Texas Capital Q4 Earnings Beat on Strong NII, Expenses Up Y/Y

Texas Capital Bancshares, Inc. TCBI reported fourth-quarter 2025 adjusted earnings per share (EPS) of $2.08,  which surpassed the Zacks Consensus Estimate of $1.78. The figure also compared favorably with $1.43 in the year-ago quarter. TCBI’s results benefited from higher net interest income (“NII”) and non-interest income, along with solid capital levels. However, results were impacted by higher expenses and lower loan balances.Results exclude certain items. After considering this, net income available to common shareholders (GAAP basis) was $96.3 million, up 44% from $66.7 million reported in the fourth quarter of 2024.For 2025, adjusted EPS of $6.80 surpassed the Zacks Consensus Estimate of $6.50. The figure also compared favorably with $4.43 in the year-ago quarter. Net income available to common shareholders (GAAP basis) was $312.9 million, up from $60.3 million reported in 2024.TCBI’s Quarterly Revenues Rise & Expenses IncreaseTotal quarterly revenues increased 15.4% year over year to $327.5 million. Also, the top line surpassed the Zacks Consensus Estimate by 1.4%.Full-year 2025, revenues rose 34.6% year over year to $1.26 billion. Also, the top line surpassed the Zacks Consensus Estimate of $1.25 billion.NII was $267.4 million, which rose 16.5% year over year. The increase was mainly driven by growth in average earning assets and a decline in funding costs, partially offset by higher average interest-bearing liabilities.Net interest margin (“NIM”) expanded 45 basis points year over year to 3.38%.Non-interest income increased 11.0% year over year to $60.0 million. The rise was primarily driven by higher service charges on deposit accounts and increased investment banking and advisory fee income.Non-interest expenses rose 7.0% year over year to $184.2 million. The increase was mainly due to higher salaries and benefits, communications and technology expenses, and other non-interest expenses, partially offset by lower legal and professional expenses and FDIC insurance assessment expense.Texas Capital’s Loans & Deposits Decline SequentiallyAs of Dec. 31, 2025, loans held for investment totaled $17.9 billion compared with $18.1 billion as of Sept. 30, 2025. Total deposits were $26.4 billion, down from $27.5 billion in the prior quarter.TCBI’s Credit Quality MixedNet charge-offs were $10.7 million in the fourth quarter of 2025, down from $12.1 million in the year-ago quarter.Provision for credit losses aggregated to $11.0 million, declining from $18.0 million in the fourth quarter of 2024.Total non-performing assets rose to $121.2 million from $111.2 million in the year-ago quarter. The ratio of non-accrual loans held for investment to total loans held for investment was 0.49% compared with 0.50% in the fourth quarter of 2024.Texas Capital’s Capital Ratios Remain StrongAs of Dec. 31, 2025, the common equity tier 1 (CET1) ratio was 12.1%, up from 11.4% in the year-ago quarter.The total capital ratio stood at 16.1%, while the leverage ratio was 11.7%, compared with 11.3% as of Dec. 31, 2024. Tangible common equity to total tangible assets improved to 10.6% from 10.0% in the year-ago quarter.During the fourth quarter of 2025, the company repurchased 1.45 million shares for an aggregate of $126.6 million. Additionally, in December 2025, TCBI’s board authorized a new share repurchase program of up to $200 million through Dec. 31, 2026.Our View on TCBITexas Capital ended 2025 with another solid performance, supported by strong net interest income growth, expanding margins and improved capital levels. While elevated expense levels warrant monitoring, disciplined credit management and ongoing capital deployment through share repurchases position the company well for sustained shareholder value creation.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 BanksBOK Financial Corporation's BOKF fourth-quarter 2025 adjusted net income per share of $2.48 surpassed the Zacks Consensus Estimate of $2.13. The bottom line increased 16.9% from the prior-year quarter.BOKF’s results benefited from higher NII and total fees and commissions. An increase in loans and deposit balances was another positive. However, the increase in operating expenses was a major undermining factor.First Horizon Corporation’s FHN fourth-quarter 2025 adjusted earnings per share of 52 cents surpassed the Zacks Consensus Estimate of 47 cents. This compares favorably with 43 cents in the year-ago quarter.FHN’s results benefited from higher NII and a significant rise in non-interest income, along with the absence of provision for credit losses. 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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 Texas Capital Bancshares, Inc. (TCBI): Free Stock Analysis Report BOK Financial Corporation (BOKF): 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