Texas Capital Bancshares reported second-quarter earnings that exceeded expectations, with diluted earnings per share at $1.58, a 97.5% increase from a year ago. The bank also saw a significant increase in net income to $77.3 million, primarily attributed to trading and investment banking fees. CEO Rob Holmes highlighted the success of the bank’s multi-year turnaround strategy.

To support growth goals, Texas Capital is expanding its corporate and investment banking platform to generate a more reliable stream of fee income. The bank’s broker-dealer arm, Texas Capital Securities, plans to open offices in Los Angeles and Chicago by the end of the year, with new investment bankers hired last quarter. Capital markets syndication fees and sales and trading growth contributed to strong investment banking and trading income.

In 2021, Texas Capital set a goal of achieving a 1.1% return on assets by 2025. The bank reported a 0.99% return on assets in the second quarter of 2025, bringing the year-to-date figure to 0.80%. Executives maintain their revenue outlook for the year but adjusted expense growth projections to “medium to high” single-digit percentage growth.

Despite positive earnings momentum and achievement of a quarterly 1.1% ROA in the second half of the year, Texas Capital executives emphasize that their transformation strategy is ongoing. Analysts expect shares in Texas Capital to trade higher following the strong second-quarter performance and revised expense growth guidance. Investor response to the earnings was positive, with shares rising 3% in midday trading.

Read more at Yahoo Finance: Investment banking drives strong Q2 for Texas Capital