3rd Quarter 2026
Filed Oct 21, 2026Texas Capital Bancshares, Inc. Announces Third Quarter 2026 Results
Third-quarter earnings, net interest income, non-interest income, margin and efficiency improved from the second quarter, while net income available to common stockholders was below the third quarter of 2025 and criticized loans, past-due loans and the provision for credit losses increased year over year.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue, 3rd Quarter 2026GAAP | $356.6M | – | – |
| Interest income, 3rd Quarter 2026GAAP | $457.2M | – | – |
| Interest expense, 3rd Quarter 2026GAAP | $182.2M | – | – |
| Net interest income, 3rd Quarter 2026GAAP | $275.0M | – | – |
| Net interest margin, 3rd Quarter 2026GAAP | 3.44 % | an increase of 16 basis points | decreased 3 basis points |
| Non-interest income, 3rd Quarter 2026GAAP | $81.64M | increased $6.5 million | increased $13.1 million |
| Non-interest expense, 3rd Quarter 2026GAAP | $203.9M | decreased $1.6 million | increased $13.3 million |
| Non-interest expense, adjusted, 3rd Quarter 2026non-GAAP | $199.6M | – | – |
| Pre-provision net revenue, 3rd Quarter 2026GAAP | $152.7M | – | – |
| Pre-provision net revenue, adjusted, 3rd Quarter 2026non-GAAP | $157.0M | – | – |
| Provision for credit losses, 3rd Quarter 2026GAAP | $17M | – | – |
| Income before income taxes, 3rd Quarter 2026GAAP | $135.7M | – | – |
| Income tax expense, 3rd Quarter 2026GAAP | $32.00M | – | – |
| Net income, 3rd Quarter 2026GAAP | $103.7M | – | – |
| Net income available to common stockholders, 3rd Quarter 2026GAAP | $99.39M | – | – |
| Net income available to common stockholders, adjusted, 3rd Quarter 2026non-GAAP | $102.7M | – | – |
| Diluted earnings per common share, 3rd Quarter 2026GAAP | $ 2.28 | – | – |
| Diluted earnings per common share, adjusted, 3rd Quarter 2026non-GAAP | $ 2.35 | – | – |
| Return on average assets, 3rd Quarter 2026GAAP | 1.25 % | – | – |
| Return on average assets, adjusted, 3rd Quarter 2026non-GAAP | 1.29 % | – | – |
| Return on average common equity, 3rd Quarter 2026GAAP | 11.57 % | – | – |
| Return on average common equity, adjusted, 3rd Quarter 2026non-GAAP | 11.95 % | – | – |
| Efficiency ratio, 3rd Quarter 2026GAAP | 57.2 % | – | – |
| Efficiency ratio, adjusted, 3rd Quarter 2026non-GAAP | 56.0 % | – | – |
| Total assets, September 30, 2026GAAP | $32.35B | – | – |
| Loans held for investment, September 30, 2026GAAP | $18.64B | – | – |
| Loans held for investment, mortgage finance, September 30, 2026GAAP | $5.44B | – | – |
| Total deposits, September 30, 2026GAAP | $27.72B | – | – |
| Interest bearing cash and cash equivalents, September 30, 2026GAAP | $2.48B | – | – |
| Long-term debt, September 30, 2026GAAP | $487.3M | – | – |
| Stockholders’ equity, September 30, 2026GAAP | $3.49B | – | – |
| Common Equity Tier 1 ratio, September 30, 2026other | 12.2 % | – | – |
| Tier 1 capital ratio, September 30, 2026other | 13.7 % | – | – |
| Total capital ratio, September 30, 2026other | 14.8 % | – | – |
| Leverage ratio, September 30, 2026other | 11.7 % | – | – |
| Net charge-offs, 3rd Quarter 2026GAAP | $14.54M | – | – |
| Total allowance for credit losses, 3rd Quarter 2026GAAP | $335.8M | – | – |
| Non-accrual loans held for investment, 3rd Quarter 2026GAAP | $122.3M | – | – |
| Criticized loans, 3rd Quarter 2026other | $782.4M | – | – |
| Loans held for investment past due 90 days and still accruing, 3rd Quarter 2026GAAP | $53.21M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- During the third quarter of 2026, the Company repurchased 1,051,660 shares of its common stock for an aggregate purchase price, including excise tax expense, of $103.0 million, at a weighted average price of $96.99 per share.
- Effective October 20, 2026, the Company’s board of directors authorized a new share repurchase program under which the Company may repurchase up to $200.0 million in shares of its outstanding common stock through October 31, 2027.
- The board declared a cash dividend of $0.20 per common share, payable on December 15, 2026, to holders of record at the close of business on December 1, 2026.
- The board declared a cash dividend of $14.375 per share of Series B Preferred Stock, equivalent to $0.359375 per depositary share, payable on December 15, 2026, to holders of record at the close of business on December 1, 2026.
What drove it
- Net interest income increased primarily due to an increase in average earning asset yields and decreases in short-term and long-term borrowings, partially offset by an increase in funding costs.
- Non-interest income increased from the second quarter primarily due to increases in investment banking and advisory fees and other non-interest income.
- Non-interest income increased from the third quarter of 2025 primarily due to increases in service charges on deposit accounts, investment banking and advisory fees, trading income and other non-interest income.
- Third-quarter provision for credit losses resulted primarily from an increase in criticized loans and $14.5 million in net charge-offs.
- Third-quarter non-interest expense declined from the second quarter primarily due to lower salaries and benefits, legal and professional, and other non-interest expense, partially offset by communications and technology expense arising primarily from restructuring expenses.
Concerns
- Criticized loans totaled $782.4 million at September 30, 2026, compared to $696.3 million at June 30, 2026 and $529.7 million at September 30, 2025.
- Loans held for investment past due 90 days and still accruing were $ 53,207 (dollars in thousands), compared to $ 451 (dollars in thousands) at June 30, 2026 and $ 126 (dollars in thousands) at September 30, 2025.
- The ratio of non-accrual loans held for investment to total loans held for investment was 0.51 %, compared to 0.50 % in the second quarter of 2026 and 0.40 % in the third quarter of 2025.
- Net interest margin of 3.44 % was 3 basis points below the third quarter of 2025.
- Non-interest expense of $ 203,924 (dollars in thousands) was above $ 190,575 (dollars in thousands) in the third quarter of 2025, including restructuring expenses recognized in the third quarter of 2026.
What to watch
- Criticized loans, special mention loans and loans held for investment past due 90 days and still accruing.
- Provision for credit losses, net charge-offs and non-accrual loans held for investment.
- Net interest margin, earning-asset yields, funding costs and total cost of deposits.
- Deposit balances, mortgage-finance loans held for investment and short-term borrowings.
- Execution of the new share repurchase authorization of up to $200.0 million through October 31, 2027.
Balance sheet and cash flow
- Interest bearing cash and cash equivalents were $ 2,479,073 (dollars in thousands) at September 30, 2026, compared to $ 3,488,756 (dollars in thousands) at June 30, 2026 and $ 2,852,387 (dollars in thousands) at September 30, 2025.
- Total deposits were $ 27,715,655 (dollars in thousands) at September 30, 2026, compared to $ 28,911,388 (dollars in thousands) at June 30, 2026 and $ 27,505,398 (dollars in thousands) at September 30, 2025.
- Short-term borrowings were — at September 30, 2026, compared to $ 350,000 (dollars in thousands) at June 30, 2026 and $ 275,000 (dollars in thousands) at September 30, 2025.
- Long-term debt was $ 487,270 (dollars in thousands) at September 30, 2026, compared to $ 500,859 (dollars in thousands) at June 30, 2026 and $ 620,416 (dollars in thousands) at September 30, 2025.
Analysis
Texas Capital reported third-quarter net income available to common stockholders of $99.4 million, or $2.28 per diluted share, compared with $80.6 million, or $1.83 per diluted share, in the second quarter. Net interest income reached a record-level $275.0 million and non-interest income was $81.6 million. Total revenue was $ 356,626 (dollars in thousands), compared with $ 335,495 (dollars in thousands) in the second quarter and $ 340,354 (dollars in thousands) in the third quarter of 2025. Net income available to common stockholders remained below the $ 100,897 (dollars in thousands) reported a year earlier.
The linked-quarter improvement was supported by net interest income, which increased to $ 274,983 (dollars in thousands) from $ 260,377 (dollars in thousands), and by a 16-basis-point increase in net interest margin to 3.44 %. Management attributed the increase in net interest income primarily to higher average earning-asset yields and lower short-term and long-term borrowings, partly offset by higher funding costs. On a year-over-year basis, net interest income rose from $ 271,771 (dollars in thousands), but margin was 3 basis points below 3.47 % as lower earning-asset yields and higher average interest-bearing deposits partly offset lower funding costs.
Fee-related momentum was a material source of diversification. Non-interest income increased to $ 81,643 (dollars in thousands) from $ 75,118 (dollars in thousands) sequentially and $ 68,583 (dollars in thousands) a year earlier. Investment banking and advisory fees were $ 35,294 (dollars in thousands), trading income was $ 11,417 (dollars in thousands), service charges on deposit accounts were $ 9,418 (dollars in thousands), and wealth management and trust fee income was $ 4,562 (dollars in thousands). The release described fee income as record-level and up 14% year-over-year.
Expense discipline improved sequentially but costs remained higher than a year earlier. Non-interest expense was $ 203,924 (dollars in thousands), below $ 205,493 (dollars in thousands) in the second quarter but above $ 190,575 (dollars in thousands) in the prior-year quarter. Restructuring expenses were $(4,343) (dollars in thousands) in the non-GAAP reconciliation, producing adjusted non-interest expense of $ 199,581 (dollars in thousands). The GAAP efficiency ratio improved to 57.2 % from 61.3 % in the second quarter, while the adjusted efficiency ratio was 56.0 %.
Credit indicators warrant attention. The $ 17,000 (dollars in thousands) provision for credit losses reflected a linked-quarter increase in criticized loans and $14.5 million in net charge-offs. Criticized loans rose to $ 782,408 (dollars in thousands) from $ 696,326 (dollars in thousands) in the second quarter and $ 529,732 (dollars in thousands) a year ago. The allowance for credit losses to total loans held for investment ratio was 1.39 %, versus 1.34 % sequentially and 1.37 % a year earlier. Capital ratios remained above well-capitalized requirements, with CET1 at 12.2 % and total capital at 14.8 %. The company repurchased $103.0 million of common stock in the quarter and authorized a new program of up to $200.0 million through October 31, 2027. The release did not provide forward financial guidance.
Management, verbatim
Third quarter results exemplify a steadily improving, and increasingly diversified earnings profile, supported by a business model intentionally built to be resilient to market and rate cycles.
Rob C. Holmes, Chairman, President & CEO
We continue to effectively serve and grow our client base, leveraging our unique capabilities to support sustained momentum across the platform, despite the challenging economic backdrop.
Rob C. Holmes, Chairman, President & CEO
Not in the filing
stated, not guessed- Forward revenue, net interest income, net interest margin, expense, tax-rate, earnings or capital guidance were not provided.
- Previous outlook was not provided.
- Operating cash flow was not provided.
- Free cash flow was not provided.
- Gross margin was not provided.
- Reportable operating segment revenue was not provided.
- GAAP and non-GAAP full-year guidance were not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.