Texas Capital Q3 Earnings Beat on Strong NII, Expenses Decline Y/Y

Texas Capital Bancshares, Inc. TCBI reported record third-quarter 2025 earnings per share (EPS) of $2.18, which surpassed the Zacks Consensus Estimate of $1.77. Further, the figure also compared favorably with $1.59 in the year-ago quarter.TCBI's results benefited from an increase in net interest income (NII), non-interest income and higher loan and deposit balances. Also, the decrease in expenses was encouraging.Net income available to common shareholders (GAAP basis) was a record $100.9 million, against net loss available to common stockholders of $65.6 million reported in the prior-year quarter.TCBI’s Quarterly Revenues Rise & Expenses DeclineTotal quarterly revenues increased 11.6% year over year to $340.4 million. Also, the top line surpassed the Zacks Consensus Estimate by 4.7%.NII was $271.8 million, which rose 13.2% year over year. The rise was mainly driven by an increase in average earning assets and a decrease in funding costs, partially offset by an increase in average interest-bearing liabilities and a decrease in earning asset yields.NIM of 3.47% in the third quarter expanded 31 basis points year over year.Non-interest income rose 5.8% year over year to $68.6 million. The increase was primarily driven by higher service charges on deposit accounts, trading income and other non-interest income. The rise also reflected the absence of the $179.6 million loss on the sale of available-for-sale debt securities recognized in the third quarter of 2024.Non-interest expenses decreased 2.4% year over year to $190.6 million. The decline was primarily due to decreases in salaries and benefits, occupancy expenses, marketing expenses, and communications and technology expenses, partially offset by increases in legal and professional expenses and Federal Deposit Insurance Corporation (“FDIC”) expenses.Texas Capital’s Loans & Deposits IncreaseAs of Sept. 30, 2025, total average loans held for investment increased 1.1% on a sequential basis to $24.2 billion. Total deposits rose 5.5% sequentially to $27.5 billion.TCBI’s Credit Quality ImprovesTotal non-performing assets rose 8% to $96.1 million from the prior-year quarter.Provision for credit losses aggregated to $12 million, which declined 20% from the year-ago quarter. Also, Texas Capital’s net charge-offs of $13.7 million were significantly up from $6.1 million in the year-ago quarter.Texas Capital’s Capital Ratios ImproveAs of Sept. 30, 2025, tangible common equity to total tangible assets increased to 10.3% from 9.7% in the year-ago quarter.The leverage ratio was 11.9% in the third quarter of 2025, up from 11.4% as of Sept. 30, 2024. The common equity tier 1 ratio was 12.1%, which rose from the prior-year quarter’s 11.2%.Our View on TCBITexas Capital continues to execute its growth strategies effectively, achieving record profitability and book value levels. Higher NII and fee income will further support top-line momentum, while lower core expenses offer additional cushion. However, elevated FDIC and legal costs remain near-term headwinds.Texas Capital Bancshares, Inc. Price, Consensus and EPS Surprise Texas Capital Bancshares, Inc. price-consensus-eps-surprise-chart | Texas Capital Bancshares, Inc. QuoteCurrently, 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 BanksSynovus Financial Corp.'s SNV third-quarter 2025 adjusted earnings per share of $1.46 surpassed the Zacks Consensus Estimate of $1.36. This compares favorably with earnings of $1.23 per share a year ago.SNV’s results benefited from strong year-over-year growth in NII and non-interest revenues, along with a fall in provisions for credit losses. Also, improving loan balances was a tailwind. However, an increase in expenses was a major headwind.First Horizon Corporation’s FHN third-quarter 2025 adjusted earnings per share (excluding notable items) of 51 cents surpassed the Zacks Consensus Estimate of 45 cents. This compares favorably with 42 cents in the year-ago quarter.Results benefited from a rise in NII and non-interest income, along with provision benefits for FHN. However, a decline in loan and deposit balances acted as a headwind.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Synovus Financial Corp. (SNV): Free Stock Analysis Report Texas Capital Bancshares, Inc. (TCBI): Free Stock Analysis Report First Horizon Corporation (FHN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks