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Texas Capital Hits Record Revenues in Q3: Can Growth Momentum Continue?
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Key Takeaways
TCBI reported record Q3'26 revenues of $356.6 million, up 4.8% year over year.
TCBI's non-interest income surged 19% y/y, while strategic fee income hit a record $64.1 million.
TCBI raised its 2026 adjusted revenue growth outlook to the high single digits.
Texas Capital Bancshares, Inc. (TCBI - Free Report) delivered record revenues of $356.6 million in the third quarter of 2026, up 4.8% year over year. Growth reflected higher net interest income (NII) and higher non-interest income, highlighting the contribution of its lending and fee-generating businesses.
During the quarter, NII rose 1.2% year over year to a record $275 million, supported by higher average earning assets and lower funding costs. Meanwhile, non-interest income climbed 19% to $81.6 million, driven by stronger service charges on deposit accounts, investment banking and advisory fees and trading income. Adding to the positive momentum, fee income from strategic areas of focus reached a quarterly record of $64.1 million, up 14% year over year, reflecting continued strength in investment banking, trading and treasury product fees.
The latest performance builds on TCBI’s longer-term growth trajectory. Over the five years ended 2025, its revenues recorded a compound annual growth rate (CAGR) of 3.6%, while NII and non-interest income expanded at CAGRs of 3.9% and 2.3%, respectively. Although the Federal Reserve raised interest rates by 25 basis points in September 2026, growth in average earning assets, loan repricing and a favorable loan and deposit mix could support NII. For the fourth quarter of 2026, management projects NII of $270-$275 million compared with $267.4 million in the prior-year quarter.
On the fee-income front, continued investment banking activity, expanding treasury services and wealth management capabilities could support fee-income growth and further diversify revenues. Reflecting these opportunities, non-interest income is projected to reach $70-$75 million in the fourth quarter, up from $60 million in the prior-year quarter.
Supported by its revenue diversification efforts and solid third-quarter performance, TCBI raised its full-year 2026 adjusted total revenue growth guidance to the high-single-digit range from the previously expected mid-to-high-single-digit range. Continued momentum across fee-generating businesses and client acquisition efforts could support this outlook. However, economic uncertainty, higher operating expenses and potential credit-quality pressures remain key risks to sustained growth.
Other Major Banks Deliver Strong Revenue Growth in Q3
U.S. Bancorp (USB - Free Report) and Citigroup (C - Free Report) also reported strong revenue growth in the third quarter of 2026.
U.S. Bancorp reported record net revenues of $7.97 billion, up 8.7% year over year, driven by growth in NII and fee income, particularly from capital markets, investment management and treasury services. The BTIG acquisition further strengthened its capital markets capabilities, although higher provisions and expenses remained concerns.
Citigroup’s revenues, net of interest expenses, rose 7.9% year over year to $23.85 billion, marking its highest third-quarter revenue in a decade. Growth was driven by higher NII across Markets, Services, Wealth and U.S. Consumer Cards. However, weaker non-interest revenues, higher credit loss provisions and capital ratio pressures remained concerns.
TCBI’s Price Performance & Zacks Rank
TCBI shares have gained 15.6% in the past year compared with the industry’s growth of 8.5%.
View the Zacks #1 Rank List
Image: Bigstock
Texas Capital Hits Record Revenues in Q3: Can Growth Momentum Continue?
Key Takeaways
Texas Capital Bancshares, Inc. (TCBI - Free Report) delivered record revenues of $356.6 million in the third quarter of 2026, up 4.8% year over year. Growth reflected higher net interest income (NII) and higher non-interest income, highlighting the contribution of its lending and fee-generating businesses.
During the quarter, NII rose 1.2% year over year to a record $275 million, supported by higher average earning assets and lower funding costs. Meanwhile, non-interest income climbed 19% to $81.6 million, driven by stronger service charges on deposit accounts, investment banking and advisory fees and trading income. Adding to the positive momentum, fee income from strategic areas of focus reached a quarterly record of $64.1 million, up 14% year over year, reflecting continued strength in investment banking, trading and treasury product fees.
The latest performance builds on TCBI’s longer-term growth trajectory. Over the five years ended 2025, its revenues recorded a compound annual growth rate (CAGR) of 3.6%, while NII and non-interest income expanded at CAGRs of 3.9% and 2.3%, respectively. Although the Federal Reserve raised interest rates by 25 basis points in September 2026, growth in average earning assets, loan repricing and a favorable loan and deposit mix could support NII. For the fourth quarter of 2026, management projects NII of $270-$275 million compared with $267.4 million in the prior-year quarter.
On the fee-income front, continued investment banking activity, expanding treasury services and wealth management capabilities could support fee-income growth and further diversify revenues. Reflecting these opportunities, non-interest income is projected to reach $70-$75 million in the fourth quarter, up from $60 million in the prior-year quarter.
Supported by its revenue diversification efforts and solid third-quarter performance, TCBI raised its full-year 2026 adjusted total revenue growth guidance to the high-single-digit range from the previously expected mid-to-high-single-digit range. Continued momentum across fee-generating businesses and client acquisition efforts could support this outlook. However, economic uncertainty, higher operating expenses and potential credit-quality pressures remain key risks to sustained growth.
Other Major Banks Deliver Strong Revenue Growth in Q3
U.S. Bancorp (USB - Free Report) and Citigroup (C - Free Report) also reported strong revenue growth in the third quarter of 2026.
U.S. Bancorp reported record net revenues of $7.97 billion, up 8.7% year over year, driven by growth in NII and fee income, particularly from capital markets, investment management and treasury services. The BTIG acquisition further strengthened its capital markets capabilities, although higher provisions and expenses remained concerns.
Citigroup’s revenues, net of interest expenses, rose 7.9% year over year to $23.85 billion, marking its highest third-quarter revenue in a decade. Growth was driven by higher NII across Markets, Services, Wealth and U.S. Consumer Cards. However, weaker non-interest revenues, higher credit loss provisions and capital ratio pressures remained concerns.
TCBI’s Price Performance & Zacks Rank
TCBI shares have gained 15.6% in the past year compared with the industry’s growth of 8.5%.
Image Source: Zacks Investment Research
Texas Capital currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.