Texas Capital vs Frost Bank vs Prosperity Bank: peer benchmarks for Q2 2026

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, Q2 2026

Every number below is from the call report filed for the quarter ending June 30, 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.

Source: FFIEC call report data for the quarter ending June 30, 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.

Frost: the profitability winner

Frost is the largest of the three at $53.95B and still owns the spread: a 3.34% NIM, a 15.21% ROE, and a 1.31% ROA. The franchise is built on a Texas branch network roughly 200 deep and an unusually sticky deposit base. Non-interest-bearing demand sits at 34.2% of deposits, the highest of the three, and it is the reason Frost funds itself at 1.71% while Texas Capital pays 3.15%. That 143 basis point funding advantage is the single most important number in this comparison.

The vulnerability is the securities book, though not in the way it is usually described. Frost's held-to-maturity book is modest at 6.3% of assets. The exposure sits in available-for-sale securities, which are marked, and AOCI runs at -18.3% of equity as a result. Frost is not in trouble: those losses are unrealized and reverse as the paper matures. But they do mean Frost will not sell securities to fund a loan, because selling books the loss, so new lending has to be funded with new deposits. For a borrower, that is the practical consequence, and it is why bringing an operating account to Frost changes the conversation more than it would elsewhere.

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 $33.62B in assets and the most explicitly commercial. The C&I share of the loan book is 36.5%, materially higher than either Frost (24.8%) or Prosperity (10.4%). The CRE share is the lowest of the three at 20.1%, and CRE runs just 104.7% of total risk-based capital against Prosperity's 171.1%, so it has the most concentration room of the three. Loans-to-deposits sits at 84.0%, meaning the bank is fully deployed and running on a tighter funding stack than either competitor.

Capital is healthy at 10.13% equity-to-assets and a 10.67% Tier 1 leverage ratio, the highest leverage capital of the three. AOCI drag is small at -2.9% of equity, and the HTM book is the smallest of the group at 2.1% of assets, so Texas Capital carries the least securities interest-rate risk here by a wide margin. ROA at 1.04% is the weakest of the three, which is not surprising for a bank paying the most for its funding (3.15%, versus 1.71% at Frost) while running a heavier C&I book.

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 has cooled to 4.4% YoY, the slowest of the three, so the build is no longer coming from balance-sheet expansion.

Prosperity: the safety and growth winner

Prosperity is in some ways the most interesting of the three. At 18.48% equity-to-assets, the bank carries more than twice the capital cushion of Frost. Its AOCI is essentially zero, which looks like the cleanest securities position of the group until you see why: 27.3% of Prosperity's assets sit in held-to-maturity securities, the largest HTM book of the three by a distance. HTM is carried at amortized cost and never marked, so the unrealized loss simply does not appear in AOCI. The interest-rate risk has not been avoided, it has been classified somewhere that does not print.

YoY growth is the other outlier number: 14.2% on assets and 12.7% on loans, both the fastest of the three. That growth almost certainly reflects acquisition activity, since 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 0.48% is consistent with its long-standing reputation for conservative credit selection, and its 44.90% efficiency ratio is the best of the three by a wide margin.

The trade-off shows up in ROE, not ROA. Prosperity earns the highest return on assets of the three at 1.43%, but the lowest return on equity at 7.58%, simply because it is over-capitalized by design: the same earnings spread across twice the equity. NIM at 3.18% is a touch under the group. If your thesis is that an over-capitalized bank with a clean loan book is undervalued in the current cycle, Prosperity is the textbook expression of it, provided you are comfortable that a quarter of the balance sheet is in securities whose mark you cannot see.

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 34.2% non-interest-bearing demand share is exceptional for a $54B bank in 2026. Those balances are largely commercial operating accounts: payroll, treasury cash, escrow. They cost the bank nothing and they are highly sticky. That single number is what gives Frost a 1.71% cost of funds and a 3.34% NIM despite running a conservative 52.0% loan-to-deposit ratio. The bank is funded so cheaply it can afford to keep half its balance sheet in securities and still earn the best spread of the three.

Texas Capital sits at 27.4% non-interest-bearing demand and pays 3.15% for its funding overall, the most expensive of the three, so it runs an 84.0% loans-to-deposits ratio to compensate. The strategy is to 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, and it is more sensitive to a credit cycle than Frost's strategy is.

Prosperity at 32.8% non-interest-bearing demand looks similar to Frost on the funding side, but deploys that cheap funding very differently. Rather than lending it out, it holds 27.3% of assets in held-to-maturity securities and carries an 18.48% equity-to-assets cushion. Prosperity is running a barbell: cheap funding, heavy capital, a large amortized-cost securities book, and the optionality to deploy that capital opportunistically through acquisitions. 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 -18.3% 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 real question is liquidity: would Frost ever be forced to sell? With 8.64% equity-to-assets, a 34.2% non-interest-bearing demand base, and a 0.56% NPL ratio, the answer is almost certainly no. The bonds will mature naturally and the drag will work itself out. Worth noting for anyone comparing the three: unrealized AFS losses do not reduce regulatory capital for banks of this size, which all elected the AOCI opt-out. The constraint is liquidity and optics, not capital.

Texas Capital's AOCI at -2.9% of equity is essentially clean, and with a 2.1% HTM share there is very little hiding off the mark either. It is the only one of the three that genuinely carries little securities interest-rate risk. Prosperity's AOCI reads 0.00%, which looks cleaner still, but its 27.3% HTM share means most of its securities book is simply not marked. Comparing the two on AOCI alone would rank them in the opposite order to the underlying risk, which is the trap in reading that line by itself.

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 18.48% equity-to-assets ratio is roughly twice Frost’s and is the textbook safety cushion, though note that its clean AOCI line reflects a 27.3% held-to-maturity book that is never marked rather than an absence of interest-rate risk.
• 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.

Related reading

• What is Net Interest Margin (NIM)?
• What is Tier 1 capital?
• How do FFIEC peer groups work?
• What is a bank's efficiency ratio?

Photo by Max Fray on Unsplash.