Summary of TCBIO Q2 2026 Earnings Call

1Key Financial Results and Metrics

Adjusted Earnings Per Share (EPS): Increased 15% year-over-year to $1.88.

Total Revenue: Grew by 9% year-over-year to $328 million, driven by an 8% increase in adjusted total revenue.

Noninterest Income: Reached a record $75.1 million, up 39% year-over-year, contributing 22% of total revenue.

Net Interest Income: Increased to $260.4 million, a 3% rise year-over-year.

Net Income to Common: Reported at $80.6 million, up 10% year-over-year.

Tangible Book Value Per Share: Increased 10% year-over-year to $76.98, marking the ninth consecutive quarterly record.

Loan Portfolio: Commercial loans increased 10% year-over-year to $13 billion, while commercial real estate loans decreased 9% year-over-year to $5.1 billion.

2Strategic Updates and Business Highlights

Leadership Appointment: Mo Jamous appointed as Chief Digital and Information Officer to enhance technology strategy.

Focus on Fee Income: The firm is shifting towards more durable revenue sources, with record fee income in investment banking, treasury services, and wealth management.

Client Acquisition: Continued strong client onboarding, particularly in treasury services, with record levels of new clients.

Investment Banking Performance: Fees increased 34% year-over-year to $42.8 million, driven by strong M&A activity and new client relationships.

3Forward Guidance and Outlook

Revenue Growth: Expected total revenue growth in the mid- to high single-digit range for the full year.

Noninterest Revenue: Anticipated to reach $270 million to $290 million for the full year, with Q3 guidance of $70 million to $75 million.

Provision for Credit Losses: Maintained guidance of 35 to 40 basis points of average loans held for investment (LHI), excluding mortgage finance.

Net Interest Margin: Projected to decline to the low to mid-3.20% range in Q3, with expectations for recovery in Q4.

4Bad News, Challenges, or Points of Concern

Commercial Real Estate (CRE) Headwinds: Anticipated decline in average CRE balances of approximately 12% for the year due to high payoff rates and limited demand for new projects.

Credit Quality Concerns: Increase in criticized loans, particularly in multifamily commercial real estate, indicating potential risks in the portfolio.

Interest Rate Sensitivity: Rising costs of interest-bearing deposits, particularly due to seasonal factors related to mortgage finance, could pressure margins in the near term.

5Notable Q&A Insights

Margin Dynamics: Management acknowledged lower-than-expected net interest margin, attributing it to changes in earning asset mix and temporary funding costs.

Credit Quality: The increase in criticized loans was discussed, with management indicating that it reflects ongoing economic pressures rather than systemic issues.

Investment Banking Outlook: Confidence in sustaining strong investment banking performance with a healthy pipeline, driven by new client relationships and repeat business.

Capital Management: The firm remains committed to disciplined capital management, with ongoing share repurchases and a focus on maintaining strong capital ratios. Overall, TCBIO reported solid financial performance in Q2 2026, driven by strong fee income and client acquisition, while facing challenges in the commercial real estate sector and credit quality. The outlook remains cautiously optimistic, with a focus on sustainable growth and disciplined management of resources.