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TCBI Q2 Earnings Beat on NII & Fee Income Growth, Expenses Up Y/Y
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Key Takeaways
Texas Capital beat Q2 EPS estimates as revenues rose on higher NII and non-interest income.
TCBI grew loans and deposits sequentially, while wealth, advisory and trading fees lifted non-interest income.
Texas Capital saw higher expenses and credit costs, but continued share repurchases in the quarter.
Texas Capital Bancshares, Inc. (TCBI - Free Report) reported second-quarter 2026 adjusted earnings per share (EPS) of $1.88, which surpassed the Zacks Consensus Estimate of $1.85. The figure also compared favorably with $1.63 in the year-ago quarter.
TCBI’s results benefited from higher net interest income (NII) and non-interest income, along with solid loan and deposit balances. However, results were impacted by higher expenses and credit costs.
Results exclude certain items. After considering this, net income available to common shareholders (GAAP basis) was $80.6 million, up 10.4% from $73 million in the year-ago quarter.
TCBI’s Quarterly Revenues & Expenses Rise
Total quarterly revenues increased 9.1% year over year to $335.5 million. The top line surpassed the Zacks Consensus Estimate by 1.3%.
NII was $260.4 million, which rose 2.8% year over year. The increase was mainly driven by growth in average earning assets and lower funding costs, partially offset by lower earning asset yields and growth in average interest-bearing deposits.
The net interest margin contracted 7 basis points year over year to 3.28%.
Non-interest income increased 38.9% year over year to $75.1 million. The rise was primarily driven by higher wealth management and trust fee income, investment banking and advisory fees, trading income, and other income.
Non-interest expenses rose 8% year over year to $205.5 million. The increase was mainly due to higher salaries and benefits, marketing, legal and professional, communications and technology, and other non-interest expenses.
As of June 30, 2026, loans held for investment totaled $18.6 billion compared with $18.2 billion as of March 31, 2026. Total deposits were $28.9 billion, up from $28.5 billion in the prior quarter.
TCBI’s Credit Quality Deteriorates
Net charge-offs were $16.1 million in the second quarter of 2026, up from $13 million in the year-ago quarter.
Provision for credit losses aggregated to $18 million, up from $15 million in the second quarter of 2025.
Total non-performing assets rose to $124 million from $113.6 million in the year-ago quarter. The ratio of non-accrual loans held for investment to total loans held for investment was 0.50% compared with 0.47% in the second quarter of 2025.
Texas Capital’s Capital Ratios: Mixed Bag
As of June 30, 2026, the common equity tier 1 (CET1) ratio was 12.1%, up from 11.4% in the year-ago quarter.
The total capital ratio was 14.7%, while the leverage ratio was 11.6% compared with 15.3% and 11.8%, respectively, as of June 30, 2025. Tangible common equity to total tangible assets declined to 9.9% from 10.1% in the year-ago quarter.
TCBI Share Repurchase Update
During the quarter, the company repurchased 239,348 shares for an aggregate of $23.6 million at a weighted average price of $97.63 per share.
Our View on TCBI
Texas Capital delivered a solid performance, supported by growth in NII, strong fee income and higher loan and deposit balances. While increased expenses and credit costs warrant monitoring, strong capital levels and continued share repurchases remain encouraging.
Texas Capital Bancshares, Inc. Price, Consensus and EPS Surprise
WaFd Inc.’s (WAFD - Free Report) third-quarter fiscal 2026 (ended June 30) adjusted earnings of 81 cents per share lagged the Zacks Consensus Estimate by a penny. However, the bottom line jumped 11% year over year.
WAFD’s results were hurt by a substantial rise in provisions and higher expenses. Lower loan and deposit balances acted as a spoilsport. These were partially offset by higher net interest income and non-interest income.
Citizens Financial Group (CFG - Free Report) reported second-quarter 2026 earnings per share of $1.30, which surpassed the Zacks Consensus Estimate of $1.25. The metric rose 41% from the year-ago quarter.
CFG’s results benefited from a rise in NII and non-interest income. Growth in loan and deposit balances, and an improvement in credit quality were also encouraging. However, a rise in expenses and a weaker capital position were major headwinds.
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TCBI Q2 Earnings Beat on NII & Fee Income Growth, Expenses Up Y/Y
Key Takeaways
Texas Capital Bancshares, Inc. (TCBI - Free Report) reported second-quarter 2026 adjusted earnings per share (EPS) of $1.88, which surpassed the Zacks Consensus Estimate of $1.85. The figure also compared favorably with $1.63 in the year-ago quarter.
TCBI’s results benefited from higher net interest income (NII) and non-interest income, along with solid loan and deposit balances. However, results were impacted by higher expenses and credit costs.
Results exclude certain items. After considering this, net income available to common shareholders (GAAP basis) was $80.6 million, up 10.4% from $73 million in the year-ago quarter.
TCBI’s Quarterly Revenues & Expenses Rise
Total quarterly revenues increased 9.1% year over year to $335.5 million. The top line surpassed the Zacks Consensus Estimate by 1.3%.
NII was $260.4 million, which rose 2.8% year over year. The increase was mainly driven by growth in average earning assets and lower funding costs, partially offset by lower earning asset yields and growth in average interest-bearing deposits.
The net interest margin contracted 7 basis points year over year to 3.28%.
Non-interest income increased 38.9% year over year to $75.1 million. The rise was primarily driven by higher wealth management and trust fee income, investment banking and advisory fees, trading income, and other income.
Non-interest expenses rose 8% year over year to $205.5 million. The increase was mainly due to higher salaries and benefits, marketing, legal and professional, communications and technology, and other non-interest expenses.
Texas Capital’s Loans & Deposits Increase Sequentially
As of June 30, 2026, loans held for investment totaled $18.6 billion compared with $18.2 billion as of March 31, 2026. Total deposits were $28.9 billion, up from $28.5 billion in the prior quarter.
TCBI’s Credit Quality Deteriorates
Net charge-offs were $16.1 million in the second quarter of 2026, up from $13 million in the year-ago quarter.
Provision for credit losses aggregated to $18 million, up from $15 million in the second quarter of 2025.
Total non-performing assets rose to $124 million from $113.6 million in the year-ago quarter. The ratio of non-accrual loans held for investment to total loans held for investment was 0.50% compared with 0.47% in the second quarter of 2025.
Texas Capital’s Capital Ratios: Mixed Bag
As of June 30, 2026, the common equity tier 1 (CET1) ratio was 12.1%, up from 11.4% in the year-ago quarter.
The total capital ratio was 14.7%, while the leverage ratio was 11.6% compared with 15.3% and 11.8%, respectively, as of June 30, 2025. Tangible common equity to total tangible assets declined to 9.9% from 10.1% in the year-ago quarter.
TCBI Share Repurchase Update
During the quarter, the company repurchased 239,348 shares for an aggregate of $23.6 million at a weighted average price of $97.63 per share.
Our View on TCBI
Texas Capital delivered a solid performance, supported by growth in NII, strong fee income and higher loan and deposit balances. While increased expenses and credit costs warrant monitoring, strong capital levels and continued share repurchases remain encouraging.
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
WaFd Inc.’s (WAFD - Free Report) third-quarter fiscal 2026 (ended June 30) adjusted earnings of 81 cents per share lagged the Zacks Consensus Estimate by a penny. However, the bottom line jumped 11% year over year.
WAFD’s results were hurt by a substantial rise in provisions and higher expenses. Lower loan and deposit balances acted as a spoilsport. These were partially offset by higher net interest income and non-interest income.
Citizens Financial Group (CFG - Free Report) reported second-quarter 2026 earnings per share of $1.30, which surpassed the Zacks Consensus Estimate of $1.25. The metric rose 41% from the year-ago quarter.
CFG’s results benefited from a rise in NII and non-interest income. Growth in loan and deposit balances, and an improvement in credit quality were also encouraging. However, a rise in expenses and a weaker capital position were major headwinds.