10-Q · July 23, 2026
Texas Capital delivered stronger Q2 earnings, with $335.495 million of revenue up 9.1% year over year and GAAP diluted EPS of $1.83 up from $1.58. Growth was led by record $75.118 million non-interest income and higher…
Earnings analysis · 10-Q
TCBI earnings analysis
Filed October 22, 2026 · Our reading of the company's report
The latest report
Texas Capital reported Q3 2026 operating revenue of $356.6 million and diluted EPS of $2.28, with fee income and net interest income offsetting higher expenses and credit costs. Net income declined to $103.7 million…
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Texas Capital reported Q3 2026 operating revenue of $356.6 million and diluted EPS of $2.28, with fee income and net interest income offsetting higher expenses and credit costs. Net income declined to $103.7 million from $105.2 million year over year, while criticized loans rose to $782.4 million and nine-month net charge-offs reached $48.0 million. Balance-sheet liquidity improved through higher deposits and cash and the elimination of short-term borrowings, but securities unrealized losses materially reduced accumulated other comprehensive income.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $2.28
What stood out
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Revenue grew on stronger fee income
Total operating revenue, calculated as net interest income plus non-interest income, was $356.6 million, up 4.8% from $340.4 million in Q3 2025. Non-interest income increased 19.0% to $81.6 million, led by investment banking and advisory fees of $35.3 million versus $34.0 million.
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EPS improved despite cost pressure
Diluted EPS increased to $2.28 from $2.18 year over year, while nine-month diluted EPS rose to $5.66 from $4.67. Q3 net income was $103.7 million versus $105.2 million because higher non-interest expense offset revenue gains.
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Net interest income remained resilient
Net interest income increased 1.2% to $275.0 million, while the nine-month figure rose 3.8% to $790.1 million. Q3 net interest margin was 3.44%, down from 3.47% as earning-asset yields declined, although total deposit cost fell to 2.45% from 2.62%.
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Liquidity and deposits strengthened
Deposits increased to $27.716 billion from $26.449 billion at December 31, 2025, while interest-bearing cash and cash equivalents rose to $2.479 billion from $1.898 billion. Short-term borrowings declined from $330.0 million to zero.
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Operating cash generation improved
Operating cash flow was $398.3 million for the first nine months, up from $229.7 million in the prior-year period. Capital expenditures were $10.5 million, implying cash flow after capex of approximately $387.8 million, although the filing does not label this metric as free cash flow.
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Share repurchases continued
Capital returns remained substantial: the company repurchased 2,061,431 shares for $201.7 million during the first nine months and declared a $0.20-per-share dividend payable December 15, 2026. A new $200.0 million repurchase authorization was approved effective October 20, 2026.
What to watch
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Credit quality deteriorated
Criticized loans increased to $782.4 million from $634.9 million at December 31, 2025. Provision for credit losses rose to $51.0 million from $44.0 million, while nine-month net charge-offs increased to $48.0 million from $36.5 million.
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Delinquencies and loss sensitivity rose
Commercial real estate non-accrual loans increased to $39.4 million from $20.7 million, and loans past due 90 days or more and accruing rose to $53.2 million from $19.4 million. Management disclosed that the modeled allowance would increase by approximately $94.6 million under the most severe downside scenario.
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Rate-driven securities losses pressured capital
Accumulated other comprehensive loss widened to $250.6 million from $64.6 million at December 31, 2025, driven partly by $247.5 million of unrealized losses on available-for-sale debt securities. The company had 92 available-for-sale securities in an unrealized loss position at September 30, 2026.
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Funding mix became less stable
Brokered deposits increased to $1.723 billion from $729.2 million, representing 6.2% of total deposits versus 2.8%. Estimated uninsured deposits remained 42% of assessable deposits, leaving funding sensitivity to customer confidence and liquidity conditions.
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Commercial credit concentration remains material
The company remains exposed to Texas concentration and disclosed $7.1 billion of shared national credits, including $26.3 million on non-accrual. Commercial loans increased by $1.265 billion while commercial real estate loans declined by $592.2 million, increasing the importance of commercial credit performance.
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Interest-rate sensitivity remains
No material changes were reported to the risk factors from the 2025 Form 10-K. The filing nevertheless identifies interest-rate exposure, with modeled net interest income sensitivity of negative 4.3% for a 100-basis-point decline and negative 8.8% for a 200-basis-point decline as of September 30, 2026.
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Mixed operating and credit trends
Neutral overall: revenue increased 4.8% and diluted EPS increased 4.6% year over year, but Q3 net income declined 1.4%, non-interest expense rose 7.0% to $203.9 million, and credit deterioration increased loss pressure. Liquidity improved, but the higher criticized-loan balance and securities-related accumulated other comprehensive loss temper the earnings beat.
Management's outlook
No quantitative revenue or EPS guidance was provided, and the filing does not update a prior outlook. The filing provides risk sensitivities, including a modeled $94.6 million increase in the allowance under the most severe downside scenario, but this is not company guidance.
Earlier filings 4
10-Q · April 23, 2026
Texas Capital reported Q1 results with revenue of $323,985,000 and diluted EPS of $1.56, both above prior-year levels. Net interest income strengthened to $254,719,000 and non-interest income rose to $69,266,000, but…
10-Q · April 17, 2025
Texas Capital reported strong operating profitability in Q1 2025 with net income of $47,047,000 and diluted EPS of $0.92 (vs $26,142,000 and $0.46 in Q1 2024). Revenue (net interest income + non-interest income) was…
10-K · February 11, 2025
Texas Capital (TCBI) emphasizes a Texas‑centric commercial banking strategy supplemented by mortgage finance, homebuilder finance, corporate & investment banking and Bask Bank to diversify geographic concentration. The…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.