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Texas Capital Q1 Earnings Beat on Strong NII & Fee Income, Cost Up Y/Y
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Key Takeaways
TCBI Q1 EPS of $1.58 beat estimates and rose from 92 cents a year ago on higher revenues.
Revenues climbed 15.5% on stronger NII, wider margins and a surge in non-interest income.
Loans and deposits grew sequentially, but credit costs and non-performing assets increased.
Texas Capital Bancshares, Inc. (TCBI - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $1.58, which surpassed the Zacks Consensus Estimate of $1.42. The figure also compared favorably with 92 cents per share in the year-ago quarter.
TCBI’s results benefited from higher net interest income (NII) and non-interest income, along with solid loans and deposits balance. However, results were impacted by higher expenses and elevated credit costs.
Results exclude certain items. After considering this, net income available to common shareholders (GAAP basis) was $69.5 million, up 62.6% from $42.7 million reported in the year-ago quarter.
Total quarterly revenues increased 15.5% year over year to $324 million. Also, the top line surpassed the Zacks Consensus Estimate by 1.4%.
NII was $254.7 million, which rose 7.9% year over year. The increase was mainly driven by growth in average earning assets and a decline in funding costs.
Net interest margin (“NIM”) expanded 24 basis points year over year to 3.43%.
Non-interest income increased 55.9% year over year to $69.3 million. The rise was primarily driven by higher service charges on deposit accounts, wealth management and trust fee income, brokered loan fees, trading income, investment banking and advisory fee income and other income.
Non-interest expenses rose 5.2% year over year to $213.6 million. The increase was mainly due to higher salaries and benefits, occupancy expense, communications and technology expenses, and other non-interest expenses, partially offset by lower legal and professional expenses, marketing expenses and FDIC insurance assessment expense.
As of March 31, 2026, loans held for investment totaled $18.2 billion compared with $17.9 billion as of Dec. 31, 2025. Total deposits were $28.5 billion, up from $26.4 billion in the prior quarter.
TCBI’s Credit Quality Mixed
Net charge-offs were $17.4 million in the first quarter of 2026, up from $9.8 million in the year-ago quarter.
Provision for credit losses aggregated to $16.0 million, down from $17.0 million in the first quarter of 2025.
Total non-performing assets rose to $166.3 million from $93.6 million in the year-ago quarter. The ratio of non-accrual loans held for investment to total loans held for investment was 0.58% compared with 0.42% in the first quarter of 2025.
Texas Capital’s Capital Ratios: Mixed Bag
As of March 31, 2026, the common equity tier 1 (CET1) ratio was 12%, up from 11.6% in the year-ago quarter.
The total capital ratio was 15.9%, while the leverage ratio was 12.1%, compared with 15.6% and 11.8%, respectively, as of March 31, 2025. Tangible common equity to total tangible assets declined to 9.9% from 10.0% in the year-ago quarter.
During the quarter, the company repurchased 0.77 million shares for an aggregate of $75.1 million at a weighted average price of $96.82 per share.
Our View on TCBI
Texas Capital delivered a solid performance, supported by strong NII growth, expanding margins and diversified fee income. While elevated expense levels and rising credit costs warrant monitoring, strong capital levels and ongoing capital deployment through share repurchases position the company well for sustained shareholder value creation.
Texas Capital Bancshares, Inc. Price, Consensus and EPS Surprise
BOK Financial Corporation's (BOKF - Free Report) first-quarter 2026 earnings of $2.58 per share surpassed the Zacks Consensus Estimate of $2.30. The bottom line jumped 38.7% from the prior-year quarter.
BOKF’s results benefited from higher NII and total fees and commissions. An increase in loans was another positive. However, the rise in operating expenses was a major undermining factor.
First Horizon Corporation (FHN - Free Report) posted first-quarter 2026 earnings per share of 53 cents, surpassing the Zacks Consensus Estimate of 49 cents. This compares favorably with 42 cents in the year-ago quarter.
FHN’s results benefited from higher NII and a rise in non-interest income, along with improved credit quality. However, the rise in expenses remains a headwind.
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Texas Capital Q1 Earnings Beat on Strong NII & Fee Income, Cost Up Y/Y
Key Takeaways
Texas Capital Bancshares, Inc. (TCBI - Free Report) reported first-quarter 2026 adjusted earnings per share (EPS) of $1.58, which surpassed the Zacks Consensus Estimate of $1.42. The figure also compared favorably with 92 cents per share in the year-ago quarter.
TCBI’s results benefited from higher net interest income (NII) and non-interest income, along with solid loans and deposits balance. However, results were impacted by higher expenses and elevated credit costs.
Results exclude certain items. After considering this, net income available to common shareholders (GAAP basis) was $69.5 million, up 62.6% from $42.7 million reported in the year-ago quarter.
TCBI’s Quarterly Revenues Rise & Expenses Increase
Total quarterly revenues increased 15.5% year over year to $324 million. Also, the top line surpassed the Zacks Consensus Estimate by 1.4%.
NII was $254.7 million, which rose 7.9% year over year. The increase was mainly driven by growth in average earning assets and a decline in funding costs.
Net interest margin (“NIM”) expanded 24 basis points year over year to 3.43%.
Non-interest income increased 55.9% year over year to $69.3 million. The rise was primarily driven by higher service charges on deposit accounts, wealth management and trust fee income, brokered loan fees, trading income, investment banking and advisory fee income and other income.
Non-interest expenses rose 5.2% year over year to $213.6 million. The increase was mainly due to higher salaries and benefits, occupancy expense, communications and technology expenses, and other non-interest expenses, partially offset by lower legal and professional expenses, marketing expenses and FDIC insurance assessment expense.
Texas Capital’s Loans & Deposits Increase Sequentially
As of March 31, 2026, loans held for investment totaled $18.2 billion compared with $17.9 billion as of Dec. 31, 2025. Total deposits were $28.5 billion, up from $26.4 billion in the prior quarter.
TCBI’s Credit Quality Mixed
Net charge-offs were $17.4 million in the first quarter of 2026, up from $9.8 million in the year-ago quarter.
Provision for credit losses aggregated to $16.0 million, down from $17.0 million in the first quarter of 2025.
Total non-performing assets rose to $166.3 million from $93.6 million in the year-ago quarter. The ratio of non-accrual loans held for investment to total loans held for investment was 0.58% compared with 0.42% in the first quarter of 2025.
Texas Capital’s Capital Ratios: Mixed Bag
As of March 31, 2026, the common equity tier 1 (CET1) ratio was 12%, up from 11.6% in the year-ago quarter.
The total capital ratio was 15.9%, while the leverage ratio was 12.1%, compared with 15.6% and 11.8%, respectively, as of March 31, 2025. Tangible common equity to total tangible assets declined to 9.9% from 10.0% in the year-ago quarter.
During the quarter, the company repurchased 0.77 million shares for an aggregate of $75.1 million at a weighted average price of $96.82 per share.
Our View on TCBI
Texas Capital delivered a solid performance, supported by strong NII growth, expanding margins and diversified fee income. While elevated expense levels and rising credit costs warrant monitoring, strong capital levels and ongoing capital deployment through share repurchases position the company well for sustained shareholder value creation.
Texas Capital Bancshares, Inc. Price, Consensus and EPS Surprise
Texas Capital Bancshares, Inc. price-consensus-eps-surprise-chart | Texas Capital Bancshares, Inc. Quote
Currently, TCBI carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
BOK Financial Corporation's (BOKF - Free Report) first-quarter 2026 earnings of $2.58 per share surpassed the Zacks Consensus Estimate of $2.30. The bottom line jumped 38.7% from the prior-year quarter.
BOKF’s results benefited from higher NII and total fees and commissions. An increase in loans was another positive. However, the rise in operating expenses was a major undermining factor.
First Horizon Corporation (FHN - Free Report) posted first-quarter 2026 earnings per share of 53 cents, surpassing the Zacks Consensus Estimate of 49 cents. This compares favorably with 42 cents in the year-ago quarter.
FHN’s results benefited from higher NII and a rise in non-interest income, along with improved credit quality. However, the rise in expenses remains a headwind.