Cuộc họp công bố kết quả kinh doanh Quý 3/2026 của Texas Capital (TCBI): EPS và doanh thu đạt mức kỷ lục

Điểm tin chính

• EPS đã điều chỉnh đạt mức kỷ lục theo quý là 2,35 USD, tăng 8% so với cùng kỳ năm trước và 25% so với quý trước. Thu nhập thuần đã điều chỉnh dành cho cổ đông phổ thông đạt mức kỷ lục 102,7 triệu USD.
• Tổng doanh thu tăng 5% so với cùng kỳ năm trước lên 356,6 triệu USD. Mức tăng này được hỗ trợ bởi thu nhập lãi thuần kỷ lục đạt 275 triệu USD và thu nhập ngoài lãi tăng trưởng 19%.
• Thu nhập ngoài lãi đạt 81,6 triệu USD, chiếm 23% tổng doanh thu. Thu nhập từ ngân hàng đầu tư và kinh doanh chứng khoán ghi nhận quý kỷ lục thứ ba liên tiếp ở mức 46,7 triệu USD.
• Dư nợ cho vay thương mại cuối kỳ tăng 13% so với cùng kỳ năm trước lên 13,4 tỷ USD, trong khi dư nợ bất động sản thương mại giảm 16% xuống 4,8 tỷ USD và dư nợ tài trợ thế chấp giảm 15% so với quý trước xuống 5,4 tỷ USD.
• Ban lãnh đạo đã nâng triển vọng cả năm lên mức tăng trưởng doanh thu đã điều chỉnh ở mức một chữ số hàng cao và thu nhập ngoài lãi đạt từ 295 triệu USD đến 300 triệu USD.
• Texas Capital đã hoàn tất thương vụ mua lại cổ phiếu trị giá khoảng 103 triệu USD với giá trung bình 96,99 USD và nhận được chấp thuận cho chương trình mua lại cổ phiếu mới trị giá 200 triệu USD.

Dữ liệu tài chính chính

Kết quả hoạt động kinh doanh và vận hành

Thu nhập từ ngân hàng đầu tư và kinh doanh chứng khoán tăng 13% so với cùng kỳ năm trước và 9% so với quý trước lên 46,7 triệu USD. Ban lãnh đạo cho rằng kết quả này đến từ sự tăng trưởng mạnh mẽ trong các mảng tư vấn, thị trường vốn, bán hàng và giao dịch, cũng như sự trưởng thành ngày càng cao và uy tín trên thị trường của nền tảng.

Phí sản phẩm quản lý tiền tệ tăng 16% so với cùng kỳ năm trước lên 12,9 triệu USD nhờ việc sử dụng các dịch vụ quản lý dòng tiền, thẻ doanh nghiệp và thanh toán gia tăng. Phí quản lý tài sản và ủy thác tăng 14% lên 4,6 triệu USD, trong khi quy mô tài sản quản lý tăng trưởng quý thứ sáu liên tiếp lên 4,8 tỷ USD.

Dư nợ cho vay thương mại cuối kỳ tăng 1,5 tỷ USD so với cùng kỳ năm trước lên 13,4 tỷ USD. Dư nợ cho vay thương mại chiếm 56% tổng dư nợ cho vay, so với mức 28% vào cuối năm 2020 sau khi điều chỉnh cho các mảng kinh doanh đã thoái vốn.

Dư nợ bất động sản thương mại giảm 7% so với quý trước và giảm 16% so với cùng kỳ năm trước xuống 4,8 tỷ USD. Ban lãnh đạo cho biết hoạt động trả nợ tiếp tục vượt quá nhu cầu tài trợ dự án mới và dự kiến dư nợ sẽ kết thúc năm 2026 ở mức gần 4,4 tỷ USD.

Dư nợ tài trợ thế chấp cuối kỳ giảm 942 triệu USD so với quý trước xuống 5,4 tỷ USD khi lãi suất thế chấp tiến gần mức 7%. Các cấu trúc tín dụng tăng cường chiếm 76% dư nợ tài trợ thế chấp, tạo ra trọng số rủi ro danh mục kết hợp là 48%.

Tổng tiền gửi đạt 27,7 tỷ USD, giảm 4% so với quý trước do tiền gửi qua môi giới giảm cùng với dư nợ tài trợ thế chấp. Nếu không tính tiền gửi tài trợ thế chấp và tiền gửi có trả lãi qua môi giới, tiền gửi tăng 4% so với quý trước lên 22,4 tỷ USD. Tiền gửi không trả lãi thương mại bình quân tăng 7% so với cùng kỳ năm trước lên 3,7 tỷ USD.

Công ty đã tái cấu trúc đội ngũ lãnh đạo công nghệ và triển khai nhằm tập trung vào phát triển sản phẩm, hạ tầng dữ liệu và năng suất liên quan đến AI. Chi phí ngoài lãi được báo cáo bao gồm 4,3 triệu USD chi phí tái cơ cấu và xóa sổ phần mềm cũ.

Dự báo của ban lãnh đạo

• Ban lãnh đạo dự kiến tăng trưởng tổng doanh thu đã điều chỉnh cho cả năm 2026 sẽ ở mức một chữ số hàng cao so với doanh thu đã điều chỉnh 1,26 tỷ USD vào năm 2025.
• Thu nhập ngoài lãi cả năm dự báo đạt từ 295 triệu USD đến 300 triệu USD.
• Thu nhập ngoài lãi quý 4 dự kiến đạt từ 70 triệu USD đến 75 triệu USD, bao gồm khoảng 45 triệu USD đến 50 triệu USD từ ngân hàng đầu tư, bán hàng và giao dịch.
• Thu nhập lãi thuần quý 4 dự kiến đạt khoảng 275 triệu USD, với biên lãi thuần khoảng 3,45% đến 3,50%.
• Chi phí ngoài lãi quý 4 dự kiến dao động từ 205 triệu USD đến 210 triệu USD do Texas Capital đẩy mạnh tuyển dụng trong các mảng ngân hàng, thanh toán, quản lý tài sản và ngân hàng đầu tư.
• Tăng trưởng chi phí cả năm dự kiến ở mức từ một chữ số hàng trung đến hàng cao so với 768,9 triệu USD vào năm 2025.
• Ban lãnh đạo nhắc lại triển vọng dự phòng cả năm ở mức 35 đến 40 điểm cơ bản trên dư nợ bình quân nắm giữ để đầu tư, không bao gồm tài trợ thế chấp.
• Triển vọng lãi suất làm cơ sở cho dự báo giả định sẽ có thêm một đợt tăng 25 điểm cơ bản vào tháng 12, đưa mức trần của khoảng mục tiêu lãi suất quỹ liên bang lên 4,25% vào cuối năm.

Rủi ro và các mảng cần theo dõi

Lãi suất dài hạn cao hơn đã làm giảm sản lượng tài trợ thế chấp và làm chậm tiến độ trả nợ bất động sản thương mại vào cuối quý. Ban lãnh đạo dự kiến hoạt động xây dựng hạn chế và nhu cầu yếu đối với các dự án mới sẽ khiến dư nợ bất động sản thương mại tiếp tục xu hướng giảm.

Sự dịch chuyển chất lượng tín dụng vẫn tập trung vào một số người vay thuộc mảng thương mại và công nghiệp chịu ảnh hưởng bởi nhu cầu tiêu dùng suy yếu và áp lực biên lợi nhuận, cùng với một số khoản tín dụng bất động sản thương mại nhiều hộ gia đình đang đối mặt với áp lực dòng tiền. Nợ bị cảnh báo tăng so với quý trước nhưng vẫn nằm trong phạm vi lịch sử của công ty.

Ban lãnh đạo cũng lưu ý rằng các khách hàng thuộc ngành năng lượng vẫn thận trọng dù giá năng lượng cao hơn do những lo ngại về nhu cầu. Texas Capital tiếp tục căn cứ trích lập dự phòng trên các giả định kinh tế mà ban lãnh đạo mô tả là nghiêm trọng hơn so với dự báo chung của thị trường.

Nội dung nổi bật phần Hỏi & Đáp với chuyên gia phân tích

Ban lãnh đạo cho biết sự tăng trưởng mảng ngân hàng đầu tư phản ánh sự trưởng thành của nền tảng chứ không phải do một sản phẩm đơn lẻ hay làn sóng tuyển dụng. Khoảng 40% phí ngân hàng đầu tư, không bao gồm M&A cũng như bán hàng và giao dịch, đến từ các mối quan hệ ngân hàng mới, trong khi tất cả hoạt động M&A tính đến nay đều liên quan đến các công ty tư nhân tại Texas.

Texas Capital có kế hoạch tăng cường tuyển dụng nhân sự trực tiếp trên các mảng ngân hàng thương mại, ngân hàng doanh nghiệp, ngân hàng đầu tư, quản lý tiền tệ và quản lý tài sản. Ban lãnh đạo cho biết hiệu quả từ nhân sự mới sẽ xuất hiện nhanh hơn so với giai đoạn tái thiết trước đó vì hạ tầng hỗ trợ về rủi ro, tuân thủ, công nghệ và vận hành đã được thiết lập.

Về vị thế lãi suất, ban lãnh đạo lưu ý rằng 95% dư nợ cho vay là lãi suất thả nổi tự nhiên và gắn liền với đường cong kỳ hạn một tháng. Công ty đã thực hiện các giao dịch hoán đổi nhận lãi suất cố định kỳ hạn hai năm trị giá 600 triệu USD trong quý 3 với lãi suất bình quân gia quyền là 4,16%, tiếp theo là 200 triệu USD khác trong tháng 10 ở mức 4,72%.

Ban lãnh đạo dự kiến tỷ lệ tự tài trợ thế chấp sẽ duy trì ở mức khoảng 80% đến 85% trong vài quý tới và cho biết 85% là giả định phù hợp cho quý 4. Ban lãnh đạo không dự kiến tỷ lệ 76% dư nợ trong các cấu trúc tín dụng tăng cường sẽ tăng đáng kể.

Quyền hạn mua lại cổ phiếu mới trị giá 200 triệu USD sẽ được sử dụng một cách linh hoạt theo cơ hội. Ban lãnh đạo nhấn mạnh rằng mua lại cổ phiếu, đầu tư tự thân và duy trì vốn cổ phần hữu hình phổ thông mạnh mẽ là các ưu tiên sử dụng vốn bổ trợ lẫn nhau.

Toàn văn biên bản cuộc họp báo cáo kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Robert Holmes

Thank you for joining us today. This was the most complete quarter in the firm's history. A comprehensive reflection of the multitude of strategic actions taken to build a unique platform resilient to changing market conditions and positioned for sustained growth. Enabling this set of outcomes was intentional and is the product of disciplined capital management thoughtful portfolio construction, careful risk oversight and a culture motivated to build something enduring that matters for our clients and our shareholders.

Our client-centric approach means we not only engage the market with superior insight and execution but also maintain a commitment to financial resilience, ensuring our focus remains squarely on our clients' needs, not ours. The multiyear evolution of the firm's operating model means client successes translate into a balance sheet and income statement that are increasingly working in tandem to deliver financial performance regardless of the macro backdrop. The breadth of this quarter's performance is evident in financial results that feature new records achieved across many key metrics.

Quarterly adjusted earnings per share reached a record $2.35, an 8% increase year-over-year and a 25% increase relative to the previous quarter. Record net interest income and record fees drove record adjusted total revenue of $357 million and record adjusted preprovision net revenue of $157 million both of which increased 5% year-over-year. Finally, adjusted net income to common was $103 million, another record for the firm. With firmly established multi-quarter trends and strong pipelines suggesting continued momentum to finish the year. Noninterest income increased 19% year-over-year to $82 million.

Representing 23% of total revenue and supported by 14% year-over-year growth in our strategic fee income areas of focus, led by the third consecutive quarter of record income for both investment banking and trading income as well as treasury product fees. Consistent multiyear growth in these critical offerings reflects the evolution toward a more diversified and capital-efficient business model and demonstrates how serving clients across multiple touch points makes Texas Capital a uniquely relevant financial partner. Investment banking and trading income of $46.7 million grew 13% year-over-year and 9% linked quarter supported by higher capital markets and sales and trading revenues. Treasury product fees of $12.9 million, up 16% year-over-year and 3% linked quarter grew as we continue to deepen primary operating relationships and serve clients with integrated payment capabilities.

Wealth management fees increased 14% year-over-year to $4.6 million. We remain confident in the trajectory of this offering and see tremendous opportunity to replicate the proven playbook used in payments and investment banking to invest in and grow the private bank platform in 2027. Underpinning this notable fee growth is sustained new client acquisition, driven by our market-leading capability to access the right type of capital for clients across geographic markets and industry verticals. We have invested significantly in our client-facing talent, doubling the number of bankers between 2021 and 2023, and are, again, aggressively recruiting high-quality professionals to further expand client coverage and deliver product expertise.

Our financial outcomes validate this approach. The peer-leading growth we have achieved demonstrates not only that we have earned the right to compete and win in our markets, but that we know how to execute at scale. This track record of sustained performance across multiple cycles is a foundation upon which we continue to build. Supporting this next phase of growth is a continued evolution of our technology and delivery infrastructure with specific emphasis on enhancing data capabilities and optimizing process design to unlock the full operational benefits of AI. We reorganized technology leadership and team structure to prioritize product delivery and data infrastructure.

The restructuring expenses of legacy software write-offs incurred this quarter reflect our commitment to converting these long-standing investments into measurable productivity gains. This repositioning enables us to accelerate delivery cycles, improve system stability and scale and materially enhance our operating model productivity. Our approach demonstrates a disciplined capital allocation strategy whereby we can make technology investments more productive by consolidating around the capabilities that matter most.

Finally, during the quarter, we exhausted our 2026 buyback authorization, acting opportunistically during periods of market dislocation and to repurchase approximately $103 million of common shares at a weighted average price of $96.99 per share. The Board has authorized an additional $200 million share repurchase, which will be prudently leveraged to return capital to our shareholders while also investing in continued organic growth.

This quarter underscores that every product Texas Capital can deliver on its strategic objectives drive sustained growth and attractive risk-adjusted returns. We are operating from a position of maturity and strength with substantial capital and liquidity, disciplined risk management and an earnings profile built to perform across market environments. As we move through the final quarter of 2026, our priorities remain consistent: deepened client adoption across the platform realize the benefits of our investments, thoughtfully invest against our proven mandate and deploy capital with a focus on lasting franchise value.

Our achievements to date give us the confidence and capacity to increase investment in growth with the foundation from the transformation enabling progressively shorter earn-back periods on each incremental dollar deployed. Our results reflect how far we have come. Our opportunity is to continue to build on that progress and accrete value for our clients and shareholders. Thank you for your continued interest in and support of Texas Capital.

I'll now turn it over for Matt for the details of this quarter's financial results.

Unknown Executive

Thanks, Rob, and good afternoon. Third quarter total revenue increased $16.3 million or 5% year-over-year to $356.6 million, supported by growth in net interest income and a 19% increase in noninterest income compared to a year ago. Linked quarter total revenue increased $21.1 million or 6%, driven by strong firmwide execution and continued realization of multiyear investments in an increasingly diversified and resilient operating model. .

Net interest income increased $3.2 million year-over-year to $275 million, which is a record for the firm. Net interest margin improved 16 basis points linked quarter to 3.44% and remained slightly below the 3.47% reported in the third quarter of last year. Adjusted noninterest expense declined 2% or $3.2 million linked quarter to $199.6 million. reflecting an increasingly productive operating model and a return to more typical levels of legal and professional fees. Noninterest expense of $203.9 million included $4.3 million of restructuring expenses related to the reorganization of tech delivery and the write-off of select legacy software.

Pre-provision net revenue increased $2.9 million or 2% year-over-year to $152.7 million. Adjusted PPNR of $157 million increased 5% year-over-year, marking the ninth consecutive quarter of expansion. This performance demonstrates the firm's ability to translate investments in areas where we have a unique right to compete and win into attractive, defensible and growing returns. Provision for credit losses was $17 million, consistent with our expectation for near- to medium-term credit trends and our continued assumption of economic scenarios that are substantially more severe than consensus forecast.

Adjusted net income to common of $102.7 million increased 2% compared to a year ago, while adjusted EPS reached $2.35, up 8% year-over-year and 25% linked quarter. Both measures represent quarterly profit records for the firm. Book value per share and tangible book value per share both increased 3% year-over-year to $75.13 and $75.09, respectively. Supported by earnings generation and a reduction in shares outstanding. Both metrics declined modestly linked quarter, reflecting lower AOCI as well as a proactive approach to share repurchases executed within our previously communicated pricing parameters.

Period in commercial loans of $13.4 billion increased $1.5 billion or 13% year-over-year and $422 million or 13% annualized linked quarter as targeted client acquisition continues to drive broad-based commercial loan growth. This marks our 11th consecutive quarter of growth in average commercial loan balances, which when coupled with a disciplined and well communicated capital allocation framework results in commercial loans now comprising 56% of total loans compared to 28% at year-end 2020 when adjusting for divested businesses.

As communicated throughout the year, commercial real estate payoffs continue to significantly outpace client appetite to finance new projects. with period end balances decreasing 7% linked quarter to $4.8 billion, down 11% year-to-date and 16% year-over-year. The late quarter increase in the 10-year rate slowed realized payoff rates in the portfolio. with rate-driven industry stress likely to weigh on fourth quarter transaction volume. Despite the potential for a modest slowdown in payoffs, limited new fundings associated with historically low construction starts over the past 24 months are likely to result in continued downward trajectory for both commitments and funded balances, which we expect to end the year around $4.4 billion.

Average mortgage financial loans of $5.8 billion increased 5% year-over-year, a decline of $540 million or 9% linked quarter. As rate environment changed dramatically mid-quarter, and the industry reacted to mortgage rates approaching 7% for the first time since the summer of 2024. Periodortgage finance loans declined $942 million or 15% linked quarter to $5.4 billion, departing from the historical seasonal pattern of higher third quarter balances on both an average and period-end basis.

Enhanced credit structures represent 76% of period-end mortgage finance balances, up from 69% at Q2 2026. And resulting in a blended risk weight of 48% for the portfolio. As the portfolio contracted during the third quarter, a modest mix shift occurred, whereby more eligible balances represented in the enhanced credit structure than in prior periods. Over the medium term, we expect a portion of the portfolio that resides in these structures to settle closer to 70%. Total deposits of $27.7 billion at quarter end increased $210 million year-over-year and decreased $1.2 billion or 4% linked quarter.

As broker deposits declined $1.6 billion in response to the decline in mortgage finance loans. Deposits, excluding both mortgage finance and interest-bearing deposits and brokered interest-bearing deposits increased $777 million or 4% linked quarter to $22.4 billion. Average commercial noninterest-bearing deposits increased $134 million or 4% linked quarter and $250 million or 7% year-over-year to $3.7 billion. with average commercial nonspring deposits remaining at 13% of total deposits. Average noninterest-bearing mortgage finance deposits of $4.2 billion declined $726 million year-over-year, bringing the self-funding ratio to 73%.

And given the current outlook and observed seasonality, we expect the mortgage finance self-funding ratio to increase to approximately 85% in the fourth quarter. Average cost of interest bring deposits increased 2 basis points linked quarter to 3.4%. And excluding seasonal broker deposits that will largely roll off in Q4, the cost increased 1 basis point to 3.34%, reflecting our ability to compete on value rather than price. Our modeled earnings at risk improved as expected this quarter. As market rates move consistently with our previously communicated preferences for adding duration to the swap book.

Our current and prospective balance sheet positioning reflects a business model deliberately designed to be more resilient to changes in market rates. We placed equal emphasis on through-cycle earnings generation and loss-absorbing tangible common equity while maintaining strong capital levels and flexibility. During Q3, we executed $600 million of 2-year received fixed swaps against 1 month over with a weighted average receive rate of 4.16%. Managing interest rate sensitivity within our desired range while realizing the higher rates embedded in the forward curve.

Additionally, on the back of historic rate moves in October, we executed another $200 million of 2-year received fixed swaps against 1 month SOFR, with a weighted average receive rate of 4.72%. While we are comfortable with our near-term positioning across a range of potential interest rate scenarios, we will continue to actively manage the portfolio in support of established business and risk objectives. Adjusted noninterest expense of $199.6 million increased 5% compared with Q3 2025, while declining 2% from last quarter. The year-over-year increase primarily reflected higher salaries and benefits expense as resources are increasingly aligned to forward revenue generation, while the sequential decline was largely driven by the normalization of legal and professional fees following temporarily elevated levels last quarter.

As Rob discussed, we're increasing investment in frontline talent across both banking and fee-generating businesses, translating into faster growth in salaries and benefits expense over the coming quarters. For the fourth quarter of 2026, we anticipate total noninterest expense of $205 million to $210 million, comprised of $125 million to $130 million of [ Sasan ] benefits expense and approximately $80 million of all other noninterest expense. Noninterest income reached $81.6 million, up 19% year-over-year and 9% linked quarter. It represents 23% of total revenue, up from 20% a year ago. While combined fees from strategic areas of focus, reached another quarterly record at $64.1 million, up 14% year-over-year and 6% linked quarter.

Investment banking and trading achieved its third consecutive record quarter with fee income of $46.7 million, increasing 13% year-over-year and 9% linked quarter. All components of the business contributed to this result with particular strength in advisory, capital markets and Sales & Trading. Wealth Management and trust fees of $4.6 million increased 14% year-over-year as assets under management expanded for the sixth consecutive quarter to $4.8 billion. Treasury product fees of $12.9 million increased 16% year-over-year as client adoption of the cash management, commercial card and payments platform continues at a peer-leading pace.

Third quarter other noninterest income included $6 million of gains attributable to several strategically aligned nonmarketable equity investments. Total noninterest income is expected to be $70 million to $75 million for Q4. with revenue from Investment Banking and Sales & Trading contributing approximately $45 million to $50 million. Total allowance for credit losses, including off-balance sheet reserves increased to $335.8 million, while the ratio of total ACL to loans held for investment increased to 1.39%, reflecting a modest reserve build consistent with full year expectations. When excluding the impact of mortgage finance allowance and related loan balances, the ratio was flat linked quarter at 1.78%, which remains in the top decile of the peer group.

Net charge-offs for the quarter were $14.5 million or 24 basis points of average LHI down 10% from $16.1 million last quarter. Net charge-offs were primarily related to Pros identified C&I credits across a diversified set of clients with exposure to consumer demand. Criticized loan trends are generally evolving as anticipated. As select commercial real estate multifamily credits remain impacted by cash flow-related pressures and macroeconomic pressure on consumer demand and operating margins are driving select grade migrations in C&I. Capital ratios remained strong and well in excess of our internally assessed with profile.

With tangible common equity of tangible assets of 9.85% and a CET1 ratio of 12.2%, and Cash and securities remain in line with target levels at 22% of assets and the loan-to-deposit ratio is stable at 87%. During the quarter, we purchased approximately 1.05 million shares at a weighted average price of $96.99 a share, representing 126% of the prior month's tangible book value per share exhausting our authorization. The Board approved a new $200 million repurchase plan, which we'll manage prudently and opportunistically consistent with our historical approach to capital management.

For full year 2026, our performance outlook has modestly improved from guidance given in January. Our rate outlook is based on the current market forward curve and assumes an additional 25 basis points increase in December, bringing the upper bound of the federal funds target range to 4.25% at year-end. We now anticipate adjusted total revenue growth in the high single digits compared with adjusted total revenue of $1.26 billion in 2025. And driven by sustained client adoption and continued peer-leading growth in our fee income areas of focus.

Full year noninterest income is expected to reach $295 million to $300 million, which is also a modest increase in the previously provided guidance. We anticipate noninterest expense growth in the mid- to high single digits compared with $768.9 million in 2025. And reflecting higher performance-related compensation and accelerated targeted frontline hiring across banking, payments, wealth and investment banking. In the midst of persistent economic uncertainty, our commitment to operating from a position of financial resilience is unwavering. We reiterate the full year provision outlook of 35 to 40 basis points of average LHI, excluding mortgage finance.

Taken together, this outlook supports another year of positive operating leverage as we invest in the next phase of growth from a foundation of financial strength.

Operator

[Operator Instructions] Your first question comes from the line of Matt Olney with Stephens.

Phần hỏi đáp

Matt Olney

Please was going to ask more about the details behind investment banking and the results here. Any more color you can share about the third quarter results and then I heard Matt's outlook as far as expectations for banking in the fourth quarter. Curious how sensitive you think the pipeline is to higher rates, especially as we move into 2027.

Matt Scurlock

Yes. Thanks, Matt. I mean we're pleased with the third consecutive quarter of record fee income across all areas of focus, 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. That obviously helps us push the full year guide up $295 million to $300 million or approximately 30% year-over-year growth.

That includes 40% year-over-year growth in investment banking, which is up noticeably from the $265 million to $290 million that we started the year with on total noninterest revenue. You know this, Matt. We're not focused on specific product distribution, but instead trying to use what we think is a differentiated platform to uniquely solve problems for our clients, which is why the metrics that we most frequently emphasize are things like 40% of investment making fees, excluding M&A and Sales & Trading come from new banking relationships the time we extend credit, we're going to get core treasury and then all M&A to date has been with Texas privately held companies.

We try to call that stuff out, mostly because we think it matters a great deal when trying to assess the forward earnings profile of the firm. It emphasizes quality, durability and interconnectivity of the businesses that we're running. We've said quite a bit that at some point will be large enough in investment banking where what's happening in the broader market will more directly dictate our ability to deliver fees. We're not quite there yet. We've seen a lot of momentum across every area of the platform and we're both optimistic for Q4 and excited about what's coming in.

Matt Olney

Okay. Appreciate the color there, Matt. And then can you also talk about where the bank is within the investment cycle of attracting new producers and just overall investments. You made significant investments a few years ago, and now we're seeing the benefits of that. How would you characterize the level of recruitment and the level of investments that you talked about a few minutes ago. And then can you talk about the prospects of the positive operating leverage in 2027 in light of this kind of ongoing recruiting efforts .

Robert Holmes

Matt, it's Rob. I'll take that. So as you said, 1 of the goals when we first got here was to redistribute the mix of our employee base, frankly, we had way too many back and middle office and very few front office bankers to deliver the platform when we got here. We spent the last 5 years doing just that, both in terms of head count and dollars invested, increasing towards the frontline. We are going to -- given the strength of the platform in every line of business and the consistent performance and our views of the future and the client responses, we are going to invest in the front office again.

We have been investing very deliberately and carefully. But now we invest the time to dollar of revenue is much quicker. The return is much faster. Remember, when we were doing it earlier, we had to build the back of the middle office and risk control compliance technology and everything that came with it. Now we're adding frontline bankers and the return is much, much faster. So we're excited about the brand, the talent we're able to attract, and we're going to do it across the entirety of the platform, as Matt said in his remarks, from commercial banking to corporate banking to investment banking to wealth and all the products and services, treasury and beyond. So every 1 of the parts of the firm that are client facing is performing well, and we're excited about the opportunity to invest. Yes, not where we are in the cycle, and I'd say were early days

Matt Scurlock

Embedded -- not embedded in that 4Q expense number is us beginning to realize or onboard new talent. So we pushed up the full year expense number, including Q4 to $205 million to $210 million, which puts the full year growth at 6.6% to 7.2%, just to be as precise as possible. and that obviously has much higher fees than we originally guided to and notably more frontline talent. If we underachieve on fees or adding talent, then expense some will be lower fees outperform or -- and/or we have the opportunity to add even more high-performing, high-quality talent, then you could see that expense number trend to the higher end. .

Operator

Your next question comes from the line of Janet Lee with Cowen. Please go ahead. .

Sun Young Lee

Good afternoon. So if we bake in the $70 million to $75 million of fees for the fourth quarter and look at your revenue guide for 2026. There's a bit of a range there could be for the net interest income for 4Q just given multiple pieces going around with the mix shift into the higher-yielding commercial loans and reduced mortgage finance balances and broker deposits, how should we think about the 4Q NII and NIM trajectory from here? $270 million to $275 million of NII and 345 to 350 on margin? .

Got it. Going forward, should we expect in a rising rate scenario, Texas Capital benefits from here? .

Matt Scurlock

Definitely. So maybe the best way to start on that, Jed, is just to work through the components of the deposit base that we can talk a little bit about how we're approaching managing the balance sheet as rates move higher. So to start, I mean we just continue to effectively grow really high-quality deposits that are tied to broader commercial relationships $850 million of growth in commercial interest-bearing and $320 million of growth in commercial noninterest-bearing over the last year. .

So that's roughly $1.2 billion of high-quality deposit growth relative to $507 million of LHI growth, excluding mortgage finance, which enables us to continue this multiyear journey of reducing deposits that we view as higher cost or lower liquidity value, which obviously benefits our cost of funds, which will higher in aggregate than some other banks is definitely consistent with peer when you look at it against like deposit categories. And then in our view, we think much more valuable because it's almost always tied to a broader operating relationship where we're proactively helping our clients manage their liquidity.

And then we have been very consistent and vocal in our view that the cost of liquidity is going to move structurally higher over time. So we believe that having 80% of is appropriate up beta to use for risk-driven interest rate modeling. Our actual expectation is that betas are going to trend closer to 60% or so over the first few hikes and every 10% of beta drives about 1% of interest rate risk. So another way to think about that is that a 60% beta incorporated in the guidance, our disclosed IRR sensitivity an up 100 goes to 3.7% versus the 1.7%, 3.7% versus 1.7% using an 80 beta? And then you acutely aware of how we position the broker deposits to support that temporary and predictable increase in mortgage finance.

And that accounted for 6 basis points of total interest-bearing deposit cost likely goes to 0 in Q4 as broker deposits on average and ending both land below $200 million to excluding brokered, our cost of interest-bearing deposits was flat June to September, so we have been able to effectively realize the value in the deposit base. That then sets up how you think through just broad balance sheet and margin management. And can we're pretty proud of how that's played out this quarter against a rate backdrop that was dramatically different than was contemplated on the call in July. So as that curve steepens a couple of things happen that are unique to our balance sheet.

But if you start with mortgage finance, the 10-year moved about 50 basis points higher during the quarter, which pushed mortgage finance loan volumes down 11% relative to our guide on the 2Q call. And there was obviously a time where like that type of move in mortgage finance would have been pretty catastrophic for Texas Capital. But we completely changed the way that we manage that business by pretty dramatically narrowing the client base positioning our capital behind those where we can earn the best return, moving away from a margin-only business and to 1 where we have a complete relationship, very similar to how we operate the rest of the platform those clients are active in our dealer, 100% of them do treasury business with us.

We've also dramatically contracted our exposure there. It was almost 40% of total loans and Rob arrived in the third quarter of 2020 and it's consistently been down around 20% over the previous few quarters. And then finally, we've clearly adjusted the risk weighting attached to those by migrating 76% of those balance into enhanced credit structure. So average risk weighting is sub-50% this quarter. So in an environment with the average balance of worn down $700 million relative to our expectations. Our actual margin increased because they're a smaller composition of a lower yielding asset and then we're able to deliver sufficient value to those clients across fee generating businesses to deliver the right revenue profile.

And then we have a lot of capital that's created enables us to buy back shares at levels that are as low as we've seen all year. And then maybe just the last thing I'd note on the balance sheet and happy to take any follow-up questions about topics. I know it's an important one is 95% of our loans are naturally variable rate and tied to the 1-month portion of the curve. So when the curve steepens, it's an opportunity for us to selectively utilize swaps to realize the hikes that are embedded in that rate outlook, which reduces our interest rate risk today and then supports earnings and capital generation should rates decline. Those are generally going to be 2-year swaps, which means any unrealized loss or associated reduction in tangible book value is going to be recovered pretty quickly.

And because we're operating with best-in-class tangible common equity, tangible asset ratios, we got a lot of capacity to repurchase shares at any AOCI related discount that's going to reverse in 2 years.

That you didn't answer. Anything else you want to know about margin or balance sheet.

Sun Young Lee

No, that was enough.

Operator

Your next question comes from the line of Woody Lay with KBW. Now open. Please go ahead. .

Wood Lay

Wanted to start on investment banking revenue. And as you all called out, it's coming in much better than you initially laid out coming into the year. And I was just curious, are there specific tailwinds you can point to? Is it because of this -- is it because of new hires come on and they're able to hit the ground running quicker than what was able to happen a couple of years ago. I would just love your thoughts there.

Robert Holmes

It's simple maturity of the platform, more stability. Our bankers have been in front of our clients longer the brand has accreted a great deal. We have credibility in the market. We get really tough deals done. We're good on the easy deals. We brought very unique deals to market, bond sub $500 million of the high-yield space. When people said you couldn't get it done. Our bankers are good and the market is recognizing it. It's nothing like adding in [ Nordea ] of bankers already or anything else. This is simply the strategy working and maturing.

Wood Lay

Got it. And then maybe as that relates to this next wave of investment, the brand value has really proven out relative to the hiring when you were hiring a couple of years ago. So how does that change in the brand awareness to impact the forward hiring strategy?

Robert Holmes

I was just laughing how you put the question. Look, the strategy is the same. We didn't compromise and hiring 2 or 3 years ago when we went to market. It took more explaining and it took maybe longer port ship, if you will, but we didn't ever compromise.

Otherwise, we cannot be doing what we're doing today. The people that remained to the platform from earlier have contributed greatly. I'm looking at a lot of them in the room today, and the new hires are obviously working out very, very, very well. So there was no compromise even working with the worst brand. Today, it's different. Today, people call us. Today, we have thousands of people applying for 40 spots in the junior program. And so -- and by the way, the world, if you hadn't noticed, is kind of coming to North Texas and Dallas. And so that's making it easier to going forward in my mind. So we're really excited about this next wave nothing's changed. We won't compromise. We'll be sure that they're like-minded. We have shared goals and that they'll act with great integrity and always put the client first.

Wood Lay

Got it. All right. Well, that's all for me.

Robert Holmes

And would the investment bankers got to sell treasury. .

Operator

Your next question comes from the line of Michael Rose with Raymond James. Please go ahead. .

Michael Rose

I just wanted to circle back to the mortgage finance business. Really nice to see the enhanced credit structures go up. Just wanted to get some thoughts on where that could head over the next year? And then how should we think about how sustainable that 85% self-funding ratio is? And then maybe if I can just throw in, where just given the higher for longer rate backdrop, how should we at least initially contemplated average balances as we initially think about next year?

Matt Scurlock

Probably a little too early to think about average balances for next year, the sequential pickup in balances that reside in the structure was actually just driven by lower industry volumes, which disproportionately go to the largest providers, which are often those that for us reside in that structure. As industry volumes contract, the self-funding ratio is likely to stay around that 80% to 85% for at least the next few quarters. 85%, Michael is a great way to model that for Q4?

And then just in general, on mortgage finance, I just give you some ways you could think about modeling it into 27 just in terms of balances. So that change in tenure over the last 90 days, pushed our full year outlook from $2.3 trillion origination market, which sat on top of a 6.3% 30-year fixed driving $6 billion in full year average balances to now a $2 trillion origination market on a 6.55% 3rd-year fixed, which to get there, you actually need 30-year fixed rate mortgages to come down a little bit from where they are today and get closer to 7%, which makes our full year outlook go from around $6 billion to around $5.5 billion and the fourth quarter get down to about $4.5 billion.

So we went through Janet's question, I think great lengths to describe the impacts that, that has on the balance sheet. And it impacts pretty significantly, Michael, how we think about hedging and how we think about positioning tangible common equity in terms of deployment through the buyback.

Robert Holmes

And then I think the only other part of your question was the enhanced credit structure, how much further do we have to go on that. And I wouldn't expect that percentage to go up anymore. .

Michael Rose

Okay. That's helpful. Maybe just 1 other question for the Go ahead. Go ahead, Michael. I was just going to switch topics, but if you got more to say for it. .

Matt Scurlock

No, I'd say the linked quarter pickup is not because of in a significant number of new clients are migrating to the structure. It's because industry volumes are flowing to the clients that we already have in the structure. So that's a good number for you to think about forward.

Michael Rose

Understood. Maybe just 1 follow-up separately. Really good. I know you guys don't guide to loan growth or anything like that, but really good to see kind of the pickup in commercial loans. Just as we think about the CRE balances, when do you guys think that bottoms? I know it's kind of persisted a little bit longer than maybe you thought earlier in the year. But just trying to get a better sense for when that headwind kind of inflect?

Robert Holmes

I'm going to let Matt take that before I'll just comment on the loan growth. I mean we've had pretty sustained loan growth in C&I for a long, long time. And the total exposure to C&I loans have gone from high 20s, I think, when I got here to now -- so loan growth has never been a problem. It's -- we're lending to the right clients through the right client selection. And there is a high demand on the balance sheet, we will continue to be very, very discerning.

So anyway, with that, not the commercial real estate balances actually finished the quarter slightly higher than the revised guidance as that late quarter move in the 10-year delayed some pending transactions, but the trend is definitely downward expectations for year-end are $4.4 billion, which would put the full year average around $5 billion. And I would just reiterate comments that we made on the last call is that we're really pleased with the quality and the depth of the client relationships that we serve in that sector. And we're built to support their plans through a cycle. And over the past 24 months, they just haven't been particularly active, and we just don't need to chase nonrelationship growth at cyclical low risk-adjusted returns in order to hit a balance sheet growth target.

So I think that the trend is down, countervailing forces would potentially be higher rates, which makes transactions more difficult to get done. But I think that the balance sheet trends with growth in C&I and modest reduction in CRE are going to be with us for a little while.

Operator

Your next call comes from the line of Jared Shaw with Barclays Capital. Please go ahead. .

Jared David Shaw

Thanks I guess any color or commentary around what you're hearing from your energy customers? Is there any noticeable uptick there in energy or related industries? .

Robert Holmes

Look, the energy CEOs whom I speak with frequently. They're not really happy about the high price of energy. They're worried about demand, et cetera. And so I think they remain very cautious. It's a different view than when 1 that would be intuitive given the rise in the price. .

Jared David Shaw

Okay. So you're not seeing them looking in a little more here with forward pricing staying higher?

Okay. And then any color on the migration in criticized and classified that you can provide?

Unknown Executive

Yes. Jered, it's Matt. As you know, we're perpetually stressing the portfolio for any potential industry, geographic or asset-specific weakness and they don't really have anything distinct to point to other than just select instances of margin pressure or softening demand, which is pushing up C&I special mention criticized levels as a percentage of total loans did move higher linked quarter but still well within our historical experience and established credit guidance that LHI or criticized LHI has been between 3% and 4% for 2/3 of the last 3 years.

And net charge-off ratios continue to sit 20 to 25 basis points with provision between 35 and 40 basis points. And the only other thing I would note on credit is that we're still very reliant on a set of economic assumptions that is notably more severe than the consensus outlook. So we feel pretty well positioned. I would just add to that. We have -- for 6 years, we've taken more provisions than peer our provision rate, excluding mortgage finance, is still highest appear. We're stayed within our credit costs for guidance 4 or 6 years. We've experienced provision all 6 of those years and work through it exactly as intended and expected. And so this is no different. And we stand by the credit cost guidance that we gave.

Operator

Your next question comes from the line of David Chiaverini with Jefferies. Please go ahead.

David Chiaverini

I wanted to ask on the deposit side, nice growth in average noninterest-bearing deposits, excluding the mortgage finance at 7% year-over-year, can you talk about the drivers of this? And how do pipelines look there and the outlook? .

Unknown Executive

Ego first. we've had mid-teens year-over-year growth in treasury product fees for as long as since the first quarter of '22. I think as long as I 1 of us can remember and said, eventually, as people bring more of their operating business to you, we're, of course, advising them on the best way to manage their liquidity, which doesn't always mean keeping it in interest free checking account. But over time, if you're just getting more and more of their operating deposits, it's not just going to show up as fees. It will begin to show up as growth in commercial noninterest-bearing.

And I think you've seen that steadily over the last year. I would expect that the percentage of total deposits that are comprised of commercial noninterest bearing to stay on this 13% or so level, which suggests you are going to see growth moving into and if you're onboarding the right clients, those clients continue to grow as well.

David Chiaverini

And sticking with deposits, can you talk about just the competitiveness given how active the Texas market has been? Are you seeing increased competitiveness or kind of stable competitiveness?

Robert Holmes

I'd characterize the Texas market has always been very, very competitive. Most of these banks have already had frontline people here. But I will say there are some irrational banks doing some pretty irrational things. That's the beauty and the power of our platform. We pick like Matt talked about commercial real estate. We want to bank the clients that are already clients with us. That book will grow whether they do perform new development. we're not out to get more wallet share.

And so when those clients act, we'll be buy them, but we don't need to do irrational, very large holes for substandard rates to achieve loan growth targets for our balance sheet. And you're seeing that in the market, and we're not going to participate in it. So you do see some irrational actors, but the competition has been very strong for a long time, and it continues to be.

Operator

Your next call comes from the line of Anthony Elian with JPMorgan. Please go ahead.

Anthony Elian

Now on your earlier comments, you gave us some color on 4Q NII and NIM. What's driving the sequential declines in both of those metrics relative to 3Q. Were there any onetimers we should back out .

Matt Scurlock

No, the margin would suggest you're going to have growth from $344 million to $345 million to $350 million. which is in part because you're going to have lower mortgage finance balances. So a lower portion of the balance sheet is comprised of a small portion of the balance sheet comprised of a slightly lower-yielding earning asset. So margin up, and then NII relatively flat $275.

Anthony Elian

And then on the buyback, how are you thinking about balancing how aggressive you'll be with deploying the new $200 million given your CET1 is above 12%, your TC is around 10, with your earlier comments around investing in the franchise and hiring talent. .

Matt Scurlock

Yes, so C1 is up 6 basis points relative to last year with 13% growth in C&I and repurchased $325 million or 7.5% of the company at $27 a share. So we're really pleased with the ability to manage the buyback appropriately. Equally, if not more important, than the CT1 performance is that tangible common equity tangible assets for us is flat relative to Q1 at $985 and remains top quartile versus peers.

We've also been really vocal, Tony, that, that is an incredibly important metric for us. in an environment with rates and earnings up and balance sheet size and stock price down, our earn and anticipated capital levels give us a lot of options to add forward earnings per share, tangible book value per share growth. We've been pretty active under 1.3 1.3x tangible, which we're obviously under today. It's probably a pretty good way to think about it moving forward. And then we don't view investing in the franchise and managing the capital base is in conflict with each other. We'll continue to put that to work on behalf of the shareholders.

Robert Holmes

Very well said. I would just add that the TA is secs to us. It's a nonnegotiable. It allows us to be proactive in the market. It allows us to have flexibility on buyback. It allows us to do other things. We're not going to sacrifice that to over a term period of time to activate any 1 action on the balance sheet. .

Anthony Elian

Okay. One more for me. So on the planned investments, you had a press release a few weeks ago that your opening offices in New York, Los Angeles and Chicago. outside of recruiting talent that you discussed earlier. I'm curious if we should expect more of this nationwide expansion with an increased physical footprint and ultimately, what this could mean for expenses beyond 4Q? .

Robert Holmes

Great question. Look, those offices were opened because we already have employees there. And the -- and it's a good-sized group of employees. We believe we need to be in office you to understand our risk appetite, our go-to-market strategies. We need to be the same firm. We do not believe in work from home and one-off bankers in the market. We need to create scale where we are. So these activities weren't about -- we wanted to be in Illinois or California is where we found talent and we want them to be together and go to market as 1 firm.

And then as you know, in New York, we distribute a lot of debt and equity and last year, we distributed more debt to equity than assets of the bank, and there's a lot of those investors in New York. So there's different pockets of talent that we wanted. It's not about being the geographic regions but we do have a lot of clients in geographic regions through our industry verticals. But it's -- it wasn't about that. It was about talent that we had in those markets come together. So to answer your question, don't pencil any expenses from more leases.

Operator

Your next question comes from the line of John Arfstrom with RBC Capital Markets. Please go ahead.

Jon Arfstrom

Often Rob, can you -- you talked -- you mentioned technology. Can you talk about some of the changes you're referencing and what you're itching to restructuring and what's new and different in terms of what you want that you didn't have before? And is this competitive advantage type stuff or just trying to keep up with some of your competitors? .

Robert Holmes

No, it's -- thanks for the question. I won't go talk as long as I want to about this, but we're really, really excited about this. We had a great technology team before. They were great with platforms. They were great getting us up and running very grateful for their time here, left on very good terms. And today, we have a brand-new leader and leadership over the entire view of the platform. It is simply better suited to advance the new technology that we want to deploy today. We've made good quality efforts in client journeys as well as AI and the changes we made and the talent we brought on board will absolutely propel those efforts, and we're really, really excited about it. This is not -- this is not incremental change.

And the change actually is concurrent with the org change that Matt talked about RECONNECT with that group and how we go to market and how we build products and services in the bank. .

Jon Arfstrom

Okay. Kind of runs at the question I asked you last quarter on incorporation, but can you just touch briefly on the change in your listing to the Texas Stock Exchange? Any tangible benefits and anything you give up by making that move?

Robert Holmes

We give up nothing. We're going to change the TXP in the coming weeks. So be sure and note that the transfer to Taxi has gone smoothly, trade matching engine and technology and they also have a really good shared listing construct, which allows us to benefit from their profits by being traded on that exchange. And we're excited to be on it and as well as our ETFs. And we had the first 2 securities ever listed on the Texas exchange in the history of the state. And the exchange has done well. They have over $100 billion of market capital on the exchange to date with a pipeline with more on the way. It's pretty exciting. .

Operator

We have reached the end of the Q&A session. I will now turn the call back to Rob Holmes for closing remarks. Just want to thank all the employees of Texas Capital for a great quarter and look forward to the fourth. Thank you.

This concludes today's call. Thank you for attending. You may now disconnect.