The headline: Three Texas commercial banks, all between $33B and $53B in assets, all serving overlapping geographies, all reporting Q1 2026 data. Each one wins a different category. Frost wins profitability and credit quality. Texas Capital wins commercial concentration and growth. Prosperity wins capital and securities-portfolio safety. None of them is the best across the board.
The three banks
All three are Texas-headquartered, all three publish detailed FFIEC call reports, and all three compete for the same general type of customer: middle-market commercial relationships, commercial real estate, and high-net-worth banking. They also differ in ways that matter to anyone trying to understand the Texas banking landscape.
Side-by-side, Q1 2026
Every number below is from the call report filed for the quarter ending March 31, 2026. The "Wins" column highlights which bank holds the best position in that category, with a brief reason. Best is defined relative to the goal of the category, not always the higher number.
| Metric | Frost | Texas Capital | Prosperity | Wins |
|---|---|---|---|---|
| Total assets | $52.8B | $33.2B | $43.6B | Frost: largest scale |
| Return on assets (ROA) | 1.31% | 0.96% | 1.18% | Frost: highest profitability |
| Net interest margin (NIM) | 3.34% | 3.24% | 3.14% | Frost: best spread |
| Return on equity (ROE) | 15.35% | 8.63% | 6.30% | Frost: thinner equity, higher ROE |
| Non-performing loans (NPL) | 0.40% | 0.74% | 0.44% | Frost: cleanest book |
| Equity / assets | 8.57% | 10.91% | 18.39% | Prosperity: highest capital cushion |
| AOCI / equity | -20.4% | -2.4% | 0.00% | Prosperity: no securities drag |
| HTM share of assets | 31.7% | 11.8% | 0.8% | Prosperity: smallest HTM bet |
| C&I share of loans | 25.6% | 35.0% | 11.4% | Texas Capital: most commercial |
| CRE share of loans | 45.9% | 20.6% | 41.0% | Texas Capital: lowest CRE exposure |
| Loans / deposits | 51.2% | 85.5% | 75.5% | Texas Capital: most loaned up |
| Non-interest-bearing demand / deposits | 28.1% | 19.0% | 26.8% | Frost: cheapest deposit base |
| YoY asset growth | 1.4% | 6.8% | 12.5% | Prosperity: fastest growth |
| YoY loan growth | 7.4% | 12.7% | 15.1% | Prosperity: loans growing fastest |
| Tier 1 capital ratio | data not yet loaded for Q1 2026 | data not yet loaded for Q1 2026 | data not yet loaded for Q1 2026 | Tier 1 schedule pending |
| Efficiency ratio | data not yet loaded for Q1 2026 | data not yet loaded for Q1 2026 | data not yet loaded for Q1 2026 | Non-interest expense schedule pending |
Source: FFIEC call report data for the quarter ending March 31, 2026. Tier 1 capital ratio and efficiency ratio will populate once the regulatory schedules complete their second-pass load.
Three sparklines that summarize the story
If you only have ten seconds to read the comparison, the three categories that matter most are profitability, capital safety, and growth. Frost wins the first, Prosperity wins the second, and Prosperity also wins the third. Texas Capital wins on commercial concentration, which is its own legitimate strategic position.
Return on assets (Q1 2026)
Frost wins on profitability.
Equity / assets (Q1 2026)
Prosperity wins on capital.
YoY loan growth (Q1 2026)
Prosperity wins on growth.
Frost: the profitability winner
Frost is the largest of the three at $52.8B and reports the strongest profitability of the group: 1.31% ROA, 15.35% ROE, 3.34% NIM, and a 0.40% NPL ratio that puts the bank in the top decile for credit quality within its peer group. The franchise is built on a Texas branch network roughly 200 deep and an unusually sticky deposit base. Non-interest-bearing demand sits at 28.1% of deposits, the highest of the three.
The vulnerability is the securities book. HTM securities represent 31.7% of total assets, a higher share than most peers. AOCI runs negative at 20.4% of equity, reflecting unrealized losses on the available-for-sale book accumulated during the rate cycle. Frost is not in trouble at all (the bank's HTM book is held to maturity and the unrealized losses are not realized unless the bank is forced to sell), but the optics make capital look thinner than the equity-to-assets number alone suggests.
If you are evaluating Frost as a depositor, counterparty, or relationship bank, the takeaway is: high-quality earnings, conservative credit, but a securities book that locks in some opportunity cost until the assets mature off the balance sheet.
Texas Capital: the commercial concentration winner
Texas Capital is the smallest of the three at $33.2B in assets and the most explicitly commercial. The C&I share of the loan book is 35.0%, materially higher than either Frost (25.6%) or Prosperity (11.4%). The CRE share is the lowest of the three at 20.6%. Loans-to-deposits sits at 85.5%, meaning the bank is fully deployed and running on a tighter funding stack than either competitor.
Capital is healthy at 10.9% equity-to-assets, comfortably above regulatory minimums and the peer median. AOCI drag is small at -2.4% of equity, suggesting Texas Capital was more disciplined about avoiding long-duration AFS securities during the low-rate years. ROA at 0.96% is the weakest of the three, which is not surprising for a bank running a tighter spread and a heavier C&I book (C&I generally produces a smaller NIM but cleaner long-term economics than CRE).
For a Texas borrower with a middle-market C&I deal, Texas Capital is the most structurally aligned of the three. For a depositor or analyst tracking earnings power, the question is whether the commercial-bank strategy reaches 1.2 to 1.4% ROA over the next two to three years. Loan growth at 12.7% YoY suggests the book is still building.
Prosperity: the safety and growth winner
Prosperity is in some ways the most interesting of the three. At 18.4% equity-to-assets, the bank carries roughly twice the capital cushion of Frost and substantially more than Texas Capital. The HTM book is tiny at 0.8% of assets, and AOCI is essentially zero. There is no securities-portfolio drag at all. By any conservative measure of balance-sheet safety, Prosperity is the bank you would put up against a stress scenario first.
YoY growth is the other outlier number: 12.5% on assets, 15.1% on loans, 16.3% on deposits. That growth almost certainly reflects acquisition activity (Prosperity is an active consolidator), and the next two quarters will be the read on whether the acquired balance sheets are clean. The bank's NPL ratio at 0.44% is consistent with its long-standing reputation for conservative credit selection.
The trade-off is profitability. ROE at 6.30% is well below Frost and below Texas Capital, simply because Prosperity is over-capitalized by design. NIM at 3.14% is a touch under the peer median. If your investment thesis is that an over-capitalized bank with a clean book is undervalued in the current cycle, Prosperity is the textbook expression of that thesis. If your thesis is that earnings growth drives returns, Frost is the better single position.
A note on what is missing
Two metrics most analysts would want in this comparison are not yet loaded for Q1 2026 in our staging environment: the bank's regulatory Tier 1 capital ratio and the efficiency ratio. The Tier 1 ratio comes from call report schedule RC-R, which loads in a second pass. The efficiency ratio requires the non-interest expense and revenue lines from schedule RI, which we cross-validate before publishing. Both should populate within the next week. Until they do, the equity-to-assets ratio is the cleanest available proxy for capital strength, and the NIM-minus-NPL gap is the cleanest proxy for risk-adjusted earnings power.
In our paid dashboard, those two ratios appear with their full peer-percentile and 8-quarter trend the moment the data lands. For now, the picture above is the call-report-validated version.
Where the deposit composition tells you the most
Deposit composition is usually the most under-read line in a bank scorecard. It is also the single number that explains most of the NIM gap between the three banks.
Frost's 28.1% non-interest-bearing demand share is exceptional for a $50B bank in 2026. The peer median for $10B to $100B commercial banks sits closer to 18 to 22%. Those non-interest-bearing balances are largely from commercial operating accounts: payroll, treasury cash, escrow. They cost the bank nothing and they are highly sticky. That single number is what gives Frost the 3.34% NIM despite running a relatively conservative loan-to-deposit ratio of 51.2%. The bank is funded so cheaply it can afford to keep half its balance sheet in securities and still earn a peer-leading spread.
Texas Capital sits at 19.0% non-interest-bearing demand, which is closer to the peer median, and runs an 85.5% loans-to-deposits ratio to compensate. The strategy is fully deploy the funding base and earn the spread on the asset side. It works when credit losses stay benign and loan growth keeps pace. It is more sensitive to a credit cycle than Frost's strategy is.
Prosperity at 26.8% non-interest-bearing demand looks similar to Frost on the funding side, but the bank deploys that cheap funding very differently. The HTM securities book is essentially empty (0.8% of assets), and the AFS book runs short duration enough that AOCI is zero. Prosperity is running a barbell strategy: lots of cheap funding, lots of capital, modest spread, and the optionality to deploy capital opportunistically. The over-capitalization is the strategy, not an accident.
Securities risk: what AOCI is telling you
AOCI (accumulated other comp income, the regulatory line that captures unrealized gains and losses on available-for-sale securities) sits in the equity section of the balance sheet. When AOCI is deeply negative, the bank is sitting on AFS losses that have not been crystallized. If the bank were forced to sell at the next dollar, those losses become realized. If the bank can hold to maturity, they melt off as the securities mature.
Frost's AOCI runs at -20.4% of equity. That is meaningful but not unusual for a bank that loaded up on long-duration securities during the 2021 zero-rate window. The market has already priced this in. The real question is liquidity: would Frost ever be forced to sell? With 8.6% equity-to-assets, a sticky non-interest-bearing demand base, and a 0.40% NPL ratio, the answer is almost certainly no. The book of bonds will mature naturally over the next few years and the drag will work itself out.
Texas Capital's AOCI at -2.4% of equity is essentially clean. Either the bank avoided heavy AFS purchases during the low-rate window or it positioned its book in shorter-duration paper. Prosperity's AOCI at zero is the cleanest of the three. With an 18.4% equity-to-assets cushion and a 0.8% HTM share, Prosperity has effectively no securities-portfolio interest-rate risk on its books. That is a deliberate position.
Investors who lived through the 2023 regional bank stress remember that AOCI matters most under tail scenarios where a bank's depositor base panics and the bank is forced to sell. The 2023 lesson was that AOCI is an early indicator of fragility, not a routine line item. By that test, Prosperity is the safest of the three by a wide margin, Texas Capital is fine, and Frost has meaningful but manageable exposure.
How to use this comparison
Three honest takeaways:
- For a commercial borrower: Texas Capital first, then Frost, then Prosperity. Texas Capital's C&I book is the most aligned with middle-market commercial credit.
- For a depositor who values stability: Prosperity. The 18.4% equity-to-assets ratio and the absence of securities-portfolio drag are the textbook safety profile.
- For an investor or analyst: Frost on earnings quality, Prosperity on book-value safety, Texas Capital on commercial-strategy growth. None is the universal answer.
The full scorecard for each bank, including the peer-group percentile rank for every metric and the 8-quarter trend, is live on the BankingLens dashboard. Direct links: Frost Bank scorecard, Texas Capital Bank scorecard, Prosperity Bank scorecard.