Oct 21, 2026 earnings call — Record quarter, fee growth, and share buybacks
Texas Capital reported record adjusted total revenue of $357 million and record adjusted EPS of $2.35.
Key quotes
"Investment banking and trading achieved its third consecutive record quarter. Fee income of $46.7 million, increasing 13% year over year and 9% linked quarter."
"Period end commercial loans of $13.4 billion increased $1.5 billion or 13% year over year."
"The restructuring expenses and legacy software write offs incurred this quarter reflect our commitment to converting these long standing investments into measurable productivity gains."
Analyst Q&A 9
investment banking results and recruiting
Q (Matt Olney · Stephen): Analyst asked for more color on Q3 investment banking results, sensitivity of the pipeline to higher rates into 2027, and the bank's stage in recruiting and investments and how that affects 2027 operating leverage.
A: Management said Q4 has a strong pipeline supporting $70 million to $75 million of estimated fees on top of $45 million to $50 million of investment banking and trading fees, which raised the full-year guide. They said the platform is still maturing so market moves do not yet fully dictate fees, and they are continuing to hire frontline talent; Q4 expenses embed onboarding new hires and full year expense guide was raised to $205 million to $210 million.
"With a strong pipeline supporting $70 million to $75 million of estimated fees in Q4, which sits on top of $45 million to $50 million in investment banking and trading fees." — John Matthew Scurlock (CFO)
net interest income and margins
Q (Janet Lee · TD Cowen): Analyst asked how to think about Q4 NII and NIM given mix shifts into high-yield commercial loans, lower mortgage finance balances, and broker deposits, and about rate beta assumptions going forward.
A: Management gave Q4 guidance of $270 million to $275 million of NII and 3.45% to 3.50% margin. They said deposit growth has been strong in commercial relationships and they model an 80% up beta but expect actual betas nearer 60% over the first few hikes; broker deposits likely go to zero in Q4 and mortgage finance balances fell, which helped margin.
"$270 million to $275 million of NII and 3.45% to 3.50% on margin." — John Matthew Scurlock (CFO)
investment banking momentum and hiring
Q (Wood Lay · KBW): Analyst asked what is driving better-than-expected investment banking revenue and how improved brand awareness changes hiring strategy.
A: Management said the improvement is simple platform maturity: bankers are more stable, have more credibility, and are getting tough deals done. They said the hiring strategy hasn't changed — they did not compromise when recruiting earlier — and now many more candidates apply, making recruitment easier while still holding strict standards.
"Today, we have thousands of people applying for, you know, 40 spots in the junior program." — Robert C. Holmes (CEO·CHAIR)
mortgage finance balances and credit structure
Q (Michael Rose · Raymond James): Analyst asked where enhanced credit structures could head over the next year, sustainability of the ~85% self-funding ratio, and how to think about average mortgage finance balances next year given higher rates.
A: Management said it is too early to forecast next year’s average balances but suggested modeling 85% self-funding for Q4 and the next few quarters. They explained industry origination expectations changed from $2.3 trillion at a 6.3% 30-year fixed to $2 trillion at a 6.5% 30-year fixed, moving full-year average balances down toward $5.5 billion and Q4 toward about $4.5 billion. On enhanced credit structures, they said they would not expect that percentage to go up anymore.
"And I would not I would not expect that percentage to go up anymore." — John Matthew Scurlock (CFO)
commercial CRE balances outlook
Q (Michael Rose · Raymond James): Analyst asked when commercial real estate (CRE) balances might bottom and commented on pickup in commercial loans.
A: Management said C&I growth has been sustained and the firm is lending to the right clients while remaining discerning. They gave year-end CRE expectation of $4.4 billion and a full-year average around $5 billion, and said the trend is downward while C&I grows modestly.
"it is because industry volumes are flowing to the clients that we already have in the structure." — John Matthew Scurlock (CFO)
energy customers and credit quality
Q (Jared David Shaw · Barclays Capital): Analyst asked whether energy customers show an uptick with higher forward pricing and for color on migration in criticized and classified loans.
A: Management said energy CEOs remain cautious despite higher prices and are worried about demand, so they are not seeing a clear pickup from energy clients. On credit, they said criticized levels moved higher linked quarter but remain within historical experience and guidance; net charge-off and provision ranges were repeated and they noted they use more severe economic assumptions than consensus.
"The criticized levels as a percentage total loans did move higher linked quarter, but still well within our historical experience and established credit guidance." — John Matthew Scurlock (CFO)
deposit growth and competition
Q (David Chiaverini · Jeff): Analyst asked what’s driving growth in non-interest-bearing commercial deposits and whether Texas market competitiveness is increasing.
A: Management said mid-teens year-over-year growth in treasury product fees has led to more operating deposits showing up as commercial noninterest bearing, and they expect that deposit mix to stay around 13% and to continue growing into 2027. On competition, they said Texas has long been very competitive and some banks are acting irrationally, but they will not chase growth with substandard rates.
"So would expect that the percentage of total deposits that are comprised of commercial noninterest bearing to stay around this 13% or so level, which suggests you are going to see that growth move into 2027." — John Matthew Scurlock (CFO)
Q4 margin, buyback, and expansion
Q (Anthony Elian · JPMorgan): Analyst asked what drives the sequential Q4 NII/NIM moves, how aggressively they will deploy the new $200 million buyback given current capital, and whether to expect more nationwide office expansion and related expense beyond Q4.
A: Management said Q4 margin should be up to 3.45%–3.50% because mortgage finance balances are lower, while NII is guided to $270 million to $275 million. They said CET1 is up 6 basis points, tangible metrics remain top quartile, past buybacks purchased $325 million or 7.5% of the company at $92.70, and they can balance capital, buybacks, and franchise investments without sacrificing TCE/TA. On offices, they said new offices reflect groups already in those cities and are about bringing talent together, not a broad lease-driven expansion.
"So CT 1's up 6 basis points relative to last year with 13% growth in C&I and purchased $325 million or 7.5% of the company at $92.70 a share." — John Matthew Scurlock (CFO)
technology changes and exchange listing
Q (John · RBC): Analyst asked what technology changes are being made, what is being restructured or replaced, and whether the Texas exchange move has tangible benefits or costs.
A: Management said they have a new technology leader and reorganized leadership to advance client journeys, AI, and new technologies — this is not incremental but a substantive change tied to how they build products and go to market. On the listing, they said they give up nothing, will change to TCBI in the coming week, and view the transfer to the Texas exchange as smooth and positive.
"We have a brand new leader and leadership over the entirety of the platform that is simply better suited to advance the new technologies that we wanna deploy today." — Robert C. Holmes (CEO·CHAIR)