Higher interest rates provide a natural boost to banks' profits, but those institutions don't want to get caught flatfooted when rates fall. They need additional revenue sources to make up for any lost profits connected to lower interest rates. Texas Capital Bancshares (NASDAQ: TCBI) has been quietly building those dependable revenue generators, and its treasury services, wealth management, investment banking, and other fee‑based segments have stepped up as meaningful contributors. Where to invest $1,000 ...

Core Viewpoint - The company experienced a significant increase in loan originations due to lower mortgage rates, but higher prepayment activity offset these gains, resulting in a modest decline in the loan portfolio [4][7][18]. Loan Originations and Prepayments - Loan originations rose to $42.1 million in the December 2025 quarter, a 42% increase from $29.6 million in the previous quarter [3][7]. - Prepayment activity also increased, with $46.7 million recorded, marking a 35% rise from $34.5 million in the September 2025 quarter [3][7]. - Loans held for investment decreased by approximately $4.1 million during the December quarter, influenced by declines in multifamily, commercial business, and commercial real estate loans [1][4]. Net Interest Margin (NIM) and Funding Costs - The net interest margin increased to 3.03%, reflecting a decrease in deposit and borrowing costs, although accelerated payoffs negatively impacted the margin by about 5 basis points [5][10][12]. - The average cost of deposits fell to 1.32%, while the cost of borrowings declined to 4.39% [11]. Asset Quality - Asset quality improved, with non-performing assets decreasing to approximately $999,000, representing about 8 basis points of total assets, down from $1.9 million in the previous quarter [6][8]. - The allowance for credit losses was 55 basis points at December 31, 2025, compared to 56 basis points at September 30, 2025 [9]. Capital Management and Expenses - The company reported operating expenses of $7.9 million in the December 2025 quarter, up from $7.6 million in the previous quarter, with expectations of a quarterly run rate of approximately $7.6 million to $7.7 million for the remainder of fiscal 2026 [17]. - The company repurchased approximately $96,000 of common stock in the December 2025 quarter and distributed $906,000 in cash dividends [21]. Future Outlook - Management anticipates that loan pipelines are "moderately higher" and expects origination volumes for the March 2026 quarter to fall within the range of $28 million to $42 million [1][22]. - Adjustable-rate loans are expected to reprice slightly lower in the March 2026 quarter, with about $112.2 million of loans repricing [14][15].

Financial Data and Key Metrics Changes - The company achieved a record adjusted total revenue of $1.3 billion, with adjusted net income to common stockholders reaching $314 million, and adjusted earnings per share at $6.80, marking a 53% improvement over 2024 levels [5][12] - Full-year adjusted return on average assets (ROAA) was 1.04%, a 30 basis point improvement compared to 2024, while Q4 ROAA reached 1.2% [4][10] - Adjusted pre-provision net revenue was a record $489 million, reflecting a 32% increase year-over-year [11][12] Business Line Data and Key Metrics Changes - Commercial loan growth was $1.1 billion, or 10%, year-over-year, with total gross loans increasing by $1.6 billion, or 7% [5][14] - Adjusted fee-based revenue grew by 9% to $229 million, marking the third consecutive year of record fee income [11][20] - The company reported a 24% increase in treasury product fees for the full year, reflecting robust client acquisition [21] Market Data and Key Metrics Changes - The company expects total market originations in mortgage finance to increase by 16% to $2.3 trillion in 2026, with internal estimates suggesting a 15% increase in full-year average balances [15][40] - Average mortgage finance loans increased by 8% late in the quarter, driven by strong industry demand [15][48] Company Strategy and Development Direction - The company is focused on executing its strategy with discipline, scaling operations intentionally, and delivering consistent superior returns [8][25] - The strategic focus has shifted towards realizing the full potential of investments made in infrastructure, talent, and technology platforms [7][58] - The company aims to enhance profitability through diversified fee income streams and disciplined capital allocation [8][25] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious outlook for the macroeconomic environment, maintaining a conservative view on provisions for credit losses [12][44] - The company anticipates continued realized scale for multi-year platform investments, with total revenue growth expected in the mid to high single-digit range [25][26] - Management highlighted the importance of maintaining financial resilience amid economic uncertainty [25][32] Other Important Information - The company repurchased 2.2 million shares, or 4.9% of prior year shares outstanding, at approximately 114% of prior month's tangible book value per share [6][24] - The tangible common equity to tangible assets ratio finished at 10.56%, ranking first among the largest banks in the country [5][24] Q&A Session Summary Question: Investment banking and trading outlook - The investment banking pipeline remains healthy, with Q4 transaction volume up about 40%, and the company arranged approximately $49 billion of debt for clients in 2025 [28][29] Question: Capital management and buyback strategy - The company is pleased with its capital management, having increased CET1 to 12.13% while growing loans and buying back shares [32][34] Question: Expense outlook and hiring plans - The company plans to focus on leveraging previous investments by expanding capabilities and adding targeted coverage, with expected mid-single-digit expense growth [36][37] Question: Credit trends and provision guidance - The company experienced a modest increase in special mention loans, primarily related to a few multi-family properties under pressure [44][49] Question: Net interest margin (NIM) expectations - The company expects NIM to remain flattish in Q1, with a focus on managing deposit repricing and maintaining a strong client acquisition strategy [45][54]

Core Viewpoint - Citizens Financial Group, Inc. (CFG) has demonstrated strong stock performance and growth in its banking services, outperforming both the broader market and regional banking ETFs over the past year [2][3][4]. Company Overview - Citizens Financial Group, Inc. is based in Providence, Rhode Island, and has a market capitalization of $22.1 billion. The company provides a range of retail and commercial banking products and services, including consumer and commercial loans, mortgage finance, deposit products, asset management, and trust services [1]. Stock Performance - CFG shares have increased by 21.8% over the past year, outperforming the S&P 500 Index, which rose by nearly 17.5%. Year-to-date in 2025, CFG stock is up 17.6%, compared to the S&P 500's 15.6% increase [2]. - Compared to the SPDR S&P Regional Banking ETF (KRE), which gained about 2.4% over the past year, CFG's performance is significantly stronger [3]. Financial Performance - CFG reported a 3.5% growth in net interest income (NII) and achieved record results in capital markets. The private banking segment surpassed $12.5 billion in deposits, contributing to the strong performance [4]. - In Q3, CFG's adjusted EPS was $1.05, exceeding Wall Street's expectation of $1.02, and the company's revenue reached $2.12 billion, surpassing forecasts of $2.10 billion. Analysts project an 18.5% growth in EPS for the current fiscal year, expecting it to reach $3.84 on a diluted basis [5]. Analyst Ratings - Among 24 analysts covering CFG, the consensus rating is a "Strong Buy," with 18 "Strong Buy" ratings, two "Moderate Buys," and four "Holds" [6]. - The sentiment has improved compared to the previous month, with 17 analysts previously suggesting a "Strong Buy." Barclays PLC analyst Jason Goldberg maintained a "Hold" rating with a price target of $56, indicating a potential upside of 8.9% from current levels [7].

Financial Data and Key Metrics Changes - The company reported earnings of $140.9 million, translating to an EPS of $2.22 per diluted share for Q3 2025, reflecting a solid foundation for future growth [4] - Total outstanding loan balances increased by 2.4% sequentially, adding nearly $1.2 billion over the past two quarters [4][7] - Net interest margin expanded by 11 basis points, with core net interest income increasing by $11.3 million [5][14] - Fee income grew by 3.6% sequentially, contributing to overall performance [6] Business Line Data and Key Metrics Changes - The core commercial and industrial (CNI) loan portfolio grew by 1.4% quarter over quarter, while the commercial real estate (CRE) business increased by 4.2% [7][8] - The specialty lending portfolio saw a slight increase, with healthcare loans up by 1.8% driven by strong origination activity [8] - Investment banking revenue reached a record of $16.1 million, primarily due to municipal bond underwriting activity [11] Market Data and Key Metrics Changes - Assets under management (AUMA) grew by 4.1% to $122.7 billion, marking the highest quarter on record [12] - The company maintained a strong liquidity profile with a loan-to-deposit ratio in the mid-60% range, providing strategic flexibility [5] Company Strategy and Development Direction - The company aims to sustain loan growth momentum, particularly in commercial real estate and core CNI, while being cautious about energy sector exposure [22] - M&A opportunities are considered, but the company prioritizes organic growth and share repurchases as primary uses of capital [24][25] - The launch of mortgage finance is expected to contribute significantly to growth, with a target of $500 million in commitments by year-end [32][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong loan growth despite competitive pressures and market disruptions from M&A activity [22] - The company anticipates that net charge-offs will remain well below historical norms, supported by strong credit quality [9][17] - Future guidance includes expectations for loan growth of 5 to 7% and net interest income between $1.325 billion and $1.35 billion [16][17] Other Important Information - The company repurchased over 365,000 shares at an average price of $111 per share during the quarter [6] - Credit quality remains a core strength, with a combined allowance for credit losses at 1.32% of outstanding loans [9][10] Q&A Session Summary Question: Loan growth expectations and competitive forces - Management noted strong loan growth of around 2.5% in recent quarters and expressed confidence in sustaining this momentum despite competitive pressures from M&A activity [20][22] Question: Capital allocation and M&A considerations - The company prioritizes organic growth and share repurchases, with M&A being a secondary consideration, focusing on strong core deposit franchises [24][25] Question: Core margin trends and expectations - Management indicated a continued upward trend in core margin, driven by fixed-rate asset repricing and deposit repricing opportunities [30] Question: Mortgage finance growth potential - The company expects significant growth in mortgage finance, with a target of $500 million in commitments by year-end and a strong appetite for growth in 2026 [32][42] Question: Fee income range and guidance - Management acknowledged the challenges in predicting fee income but expressed confidence in good activity across various fee-generating businesses [38] Question: Credit quality and charge-off expectations - Management reiterated strong credit quality and low charge-off expectations, with a long-term average loss rate projected around 20 to 25 basis points [66][67]

Financial Data and Key Metrics Changes - The company reported earnings of $140.9 million, translating to an EPS of $2.22 per diluted share for Q3 2025, reflecting a solid foundation for future growth [4] - Total outstanding loan balances increased by 2.4% sequentially, adding nearly $1.2 billion over the past two quarters [4][7] - Net interest margin expanded by 11 basis points, with core net interest income increasing by $11.3 million [5][14] - Fee income grew by 3.6% sequentially, contributing to overall performance [6] Business Line Data and Key Metrics Changes - The core Commercial and Industrial (CNI) loan portfolio grew by 1.4% quarter over quarter, while the commercial real estate (CRE) business increased by 4.2% [7][8] - The specialty lending portfolio saw a slight increase, with healthcare loans up by 1.8% driven by strong origination activity [8] - Investment banking revenue reached a record of $16.1 million, primarily due to municipal bond underwriting activity [11] Market Data and Key Metrics Changes - Assets Under Management (AUMA) grew to over $122 billion, marking a 4.1% increase in the third quarter [12] - The company maintained a strong liquidity profile with a loan-to-deposit ratio in the mid-60% range, providing strategic flexibility [5] Company Strategy and Development Direction - The company aims to sustain loan growth momentum, particularly in commercial real estate and CNI, while being cautious about energy sector exposure [22] - M&A opportunities are considered, but the company prioritizes organic growth and share repurchases as primary capital allocation strategies [24][25] - The launch of the mortgage finance business is expected to contribute significantly to loan growth in the coming quarters [32][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong loan growth despite competitive pressures and market disruptions from M&A activity [22] - The company anticipates net charge-offs to remain well below historical norms, supported by strong credit quality [9][17] - Future guidance includes expectations for loan growth of 5% - 7% and net interest income between $1.325 billion and $1.35 billion for the full year [17] Other Important Information - The company repurchased over 365,000 shares at an average price of $111 per share during the quarter, reflecting a commitment to shareholder value [6] - The combined allowance for credit losses is $328 million, representing a healthy 1.32% of outstanding loans [9] Q&A Session Summary Question: Loan growth expectations and competitive forces - Management noted strong loan growth of around 2.5% in recent quarters and expressed confidence in sustaining this momentum despite competitive pressures from M&A activity [20][22] Question: Capital allocation and M&A considerations - The company prioritizes organic growth and share repurchases, with M&A being a secondary consideration depending on strategic value [24][25] Question: Core margin trends and expectations - Management indicated a continued upward trend in core margin, driven by fixed-rate asset repricing and deposit repricing opportunities [30] Question: Mortgage finance business potential - The company expects to achieve $500 million in commitments by year-end, with significant growth anticipated in 2026 [32][42] Question: Fee income guidance and expense expectations - Management provided insights into the challenges of predicting fee income but expressed optimism about growth dynamics across various fee businesses [38] Question: Credit quality and charge-off expectations - Management confirmed strong credit quality and low charge-off rates, with expectations for charge-offs to remain below historical norms [66][67]

Financial Data and Key Metrics Changes - The company reported earnings of $140.9 million, translating to an EPS of $2.22 per diluted share for Q3 2025, reflecting a solid foundation for future growth [3][4] - Total outstanding loan balances increased by 2.4% sequentially, adding almost $1.2 billion over the past two quarters [3][6] - Net interest margin expanded by 11 basis points, with core net interest income increasing by $11.3 million [4][13] - Fee income grew by 3.6% sequentially, contributing to overall performance [5][10] Business Line Data and Key Metrics Changes - The core Commercial and Industrial (CNI) loan portfolio grew by 1.4% quarter over quarter, while the commercial real estate (CRE) business increased by 4.2% [6][7] - The specialty lending portfolio saw a slight increase, with healthcare loans up by 1.8% driven by strong origination activity [7] - Investment banking revenue reached a record of $16.1 million, primarily due to municipal bond underwriting activity [10] Market Data and Key Metrics Changes - Assets Under Management (AUMA) grew to over $122 billion, marking a 4.1% increase in the third quarter [5][11] - Non-performing assets decreased by $7 million to $67 million, with a non-performing assets to period loans ratio of 27 basis points [8] Company Strategy and Development Direction - The company aims to sustain growth momentum, particularly in the CNI and CRE sectors, while maintaining a strong liquidity profile [4][16] - There is a focus on organic growth, with share repurchases and dividends as secondary uses of capital, while M&A opportunities are considered cautiously [22][23] - The launch of the mortgage finance business is expected to contribute significantly to growth, with a target of $500 million in commitments by year-end [30][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining loan growth despite competitive pressures and market disruptions from M&A activity [20][21] - The outlook for net interest income is projected between $1.325 billion and $1.35 billion, with expectations for continued growth in loans and deposits [16][18] - Credit quality remains strong, with expectations for low charge-offs and a healthy allowance for credit losses [8][72] Other Important Information - The company repurchased over 365,000 shares at an average price of $111 per share during the quarter, reflecting a commitment to shareholder value [5][6] - Total expenses increased by $15.3 million, primarily due to personnel expenses related to workforce realignment [13][15] Q&A Session Summary Question: Loan growth expectations and competitive forces - Management noted strong loan growth of around 2.5% in recent quarters and expressed confidence in sustaining this momentum despite competitive pressures from M&A activity [19][20] Question: Capital allocation and M&A considerations - The company prioritizes organic growth but remains open to M&A opportunities that align with strategic goals, emphasizing caution in execution [22][23] Question: Core margin trends and expectations - Management indicated a continued upward trend in core margin, driven by fixed-rate asset repricing and deposit repricing opportunities [26][27] Question: Mortgage finance business potential - The mortgage finance business is expected to grow significantly, with a target of $500 million in commitments by year-end and a strong growth outlook for 2026 [30][37] Question: Fee income range and guidance - Management discussed the challenges in providing precise guidance for fee income but noted strong activity across various fee-generating businesses [32][33] Question: Credit quality and charge-off expectations - The company maintains a strong credit quality outlook, with expectations for charge-offs to remain low in the near term [56][72]

Core Insights - Bok Financial reported GAAP earnings per share of $2.19, exceeding the expected $1.99, and GAAP revenue of $525.5 million, surpassing the $520.06 million estimate, indicating strong performance in Q2 2025 [1][5] - The company experienced growth in net interest income, which rose to $328.2 million, a 10.9% increase year-over-year, while total operating expenses increased by 5.3% to $354.5 million [2][8] - Bok Financial's strategic focus includes geographic expansion, particularly in Texas, and diversification of revenue streams, balancing traditional banking with fee-based services [4][3] Financial Performance - GAAP EPS for Q2 2025 was $2.19, down 13.8% from $2.54 in Q2 2024, while GAAP revenue decreased by 5.4% from $555.7 million in the prior year [2] - Net interest income increased by 10.9% year-over-year, supported by higher average earning assets and a modest increase in loans, which totaled $24.3 billion, up $602 million from the previous quarter [6] - Total operating expenses rose to $354.5 million, with personnel costs remaining flat but other expenses increasing due to technology initiatives and professional services [8] Asset Quality and Risk Management - Nonperforming assets were reported at $81 million, representing 0.33% of total loans, with net charge-offs at $0.6 million, indicating strong asset quality [7] - The allowance for credit losses was $330 million, covering nonaccruing loans by more than fourfold, with no provision for loan losses booked due to improved credit conditions [7] Business Segments and Growth Initiatives - Commercial Banking contributed $141.6 million to net income before taxes, while wealth management services reported significant profitability and assets under management totaling $117.9 billion [9] - The company is developing a mortgage finance vertical expected to expand loan product offerings, with a launch planned for September to October 2025 [10] Capital Management - Bok Financial repurchased 663,298 shares at an average price of $93.99 per share and paid out $36.3 million in dividends, with a payout ratio of 25.9% [10] - Capital ratios remained strong, with tangible common equity at 9.63% and the Common Equity Tier 1 ratio at 13.59% [8]