THIRD COAST BANCSHARES, INC. REPORTS SECOND QUARTER 2022 FINANCIAL RESULTS
Strategic Growth Plan Includes Realignment of Production Leadership and Research and Development Initiatives
HUMBLE, Texas, July 27, 2022 /PRNewswire/ -- Third Coast Bancshares, Inc. (NASDAQ: TCBX) (the "Company", "Third Coast", "we", "us", or "our"), the bank holding company for Third Coast Bank, SSB, today reported its 2022 second quarter financial results.
Second Quarter 2022 Financial and Operational Highlights
- Loans held for investment grew $301.2 million to $2.75 billion, or 12.3%, over the first quarter of 2022, and a 77.2% increase over the $1.55 billion reported in the second quarter of 2021.
- Deposits reached $2.90 billion, an increase of $311.1 million, or 12.0%, over the first quarter of 2022, and $1.11 billion, or 62.5% over the second quarter of 2021. Noninterest-bearing deposits declined $412.0 million to $519.6 million and now represent 17.9% of total deposits.
- Total assets reached $3.36 billion, a sequential increase of $317.7 million, or 10.4%, over the first quarter of 2022, and $1.34 billion, or 66.8%, more than the $2.01 billion reported in the second quarter of 2021.
- Net income totaled $2.3 million, or $0.16 per diluted common share, in the second quarter of 2022, compared to $2.1 million, or $0.15 per diluted common share, in the first quarter of 2022.
- Book value per share and tangible book value per share(1) increased to $22.43 and $21.00, respectively, at June 30, 2022.
- Opened 14th location in June 2022 with a de novo branch located in Georgetown, Texas.
"Third Coast is pleased to report another quarter of strong organic growth," stated Bart Caraway, Third Coast's Chairman, President and Chief Executive Officer. "Loans are up $1.20 billion in the last year while our asset quality has improved consistently both on a percentage and an absolute basis. We are fortunate to operate in attractive Texas markets with extraordinary bankers that are focused on serving our clients, driving these financial results.
"Beginning in the second quarter, we refocused our efforts toward our strategic growth plan to further position the Company for success, including the structured realignment of our production leadership and making investments in our future, such as the development of new products and services. As part of our leadership realignment, earlier this week we announced the promotions of Bill Bobbora and Andrew Novarini to lead our Commercial Banking group and Community Banking group, respectively. From a research and development perspective, we incurred additional expenses related to our Fintech and Banking-as-a-Service (BaaS) initiatives. By making these investments, we believe we will be in a much better position to grow deposit and fee income. We are excited about these potential opportunities for the Company.
"In the meantime, we remain committed to our long-term focus of serving our customers, building relationships, cultivating technological evolution, and expanding our markets. Regarding our branch network, we opened our 13th branch in Ft. Worth, Texas in the first quarter and our 14th branch in Georgetown, Texas in June.
"Looking ahead, we believe that our strategic growth plan positions us well to leverage our existing infrastructure. We also believe our teams, particularly those that we have recruited over the past 12 months, are performing at a high level and we expect them to continue to exceed our expectations. I am confident we will continue to improve our financial performance and expand relationships with new and potential clients within the Texas business community," concluded Mr. Caraway.
Loan Portfolio and Composition
During the second quarter of 2022, gross loans increased to $2.75 billion as of June 30, 2022, an increase of 12.3% from $2.45 billion as of March 31, 2022, and an increase of 77.2% from $1.55 billion as of June 30, 2021. PPP loans declined to $8.8 million at June 30, 2022 from $26.7 million at March 31, 2022. Excluding the effect of PPP loan forgiveness, the loan portfolio increased $319.1 million, or 13.2%, from March 31, 2022 to June 30, 2022, or 52.9% annualized. The loan growth was well diversified with Real Estate loans up $116.7 million and Commercial loans up $158.8 million from March 31, 2022.
Asset Quality
Asset quality improved during the second quarter of 2022 with non-performing assets declining $1.4 million, or 11.4%, from the first quarter of 2022. Improvement was primarily the result of the sale of the other real estate owned property. The provision for loan losses recorded for the second quarter of 2022 was $3.4 million, which served to increase the allowance to $26.7 million, or 0.97% of the $2.75 billion in gross loans outstanding as of June 30, 2022. Provision expense for the second quarter of 2022 related primarily to provisioning for new loans.
As of June 30, 2022, the nonperforming loans to loans held for investment ratio remains low at 0.40%, which decreased from 0.44% at March 31, 2022 and 0.73% at June 30, 2021. During the three months ended June 30, 2022 and 2021, charge-offs and recoveries were minimal, representing a net recovery of $4,000 and a net charge-off of $77,000, respectively.
Deposits and Composition
Deposits totaled $2.90 billion as of June 30, 2022, an increase of 12.0% from $2.59 billion as of March 31, 2022, and an increase of 62.5% from $1.78 billion as of June 30, 2021. Noninterest-bearing demand deposits decreased from $931.6 million at March 31, 2022 to $519.6 million at June 30, 2022, and increased $144.7 million, or 38.6%, from June 30, 2021. Noninterest-bearing demand deposits represented 17.9% of total deposits as of June 30, 2022, down from 36.0% of total deposits as of March 31, 2022, and 21.0% of total deposits as of June 30, 2021. Interest-bearing demand deposits as of June 30, 2022 increased $756.9 million, or 56.0%, from March 31, 2022 and savings accounts as of June 30, 2022 increased $3.6 million, or 10.5%, from March 31, 2022. These increases were partially offset by a decrease in time deposits of $37.5 million, or 13.9%.
The average cost of deposits was 0.52% for the second quarter of 2022, representing a 19 basis point increase from the first quarter of 2022 due primarily to the increase in rates paid on interest-bearing demand deposits and the movement of a group of significant customer deposit accounts from noninterest bearing to interest bearing in the second quarter of 2022. The average cost of deposits for the second quarter of 2022 increased 3 basis points from the second quarter of 2021 due primarily to the significant increase in interest-bearing demand deposits and increased interest rates paid on deposits.
Net Interest Margin and Net Interest Income
The net interest margin for the second quarter of 2022 was 3.77%, a decrease of 32 basis points from the first quarter of 2022 and a decrease of 62 basis points from the second quarter of 2021. The yield on loans for the second quarter of 2022 was 4.73% compared to 4.90% at March 31, 2022. The decrease was primarily due to a reduction from the first quarter of 2022 of $310,000 in loan fees and $883,000 in PPP fees.
Net interest income totaled $27.7 million for the second quarter of 2022, an increase of 10.0% from $25.2 million for the first quarter of 2022. Interest income totaled $32.5 million for the second quarter of 2022, an increase of 19.6% from $27.2 million for the first quarter of 2022. Interest and fees on loans increased $4.5 million, or 16.8%, compared to the first quarter of 2022, and increased by $7.6 million, or 32.5%, from the second quarter of 2021. Interest expense was $4.8 million for the second quarter of 2022, an increase of $2.8 million, or 141.7% from $2.0 million for the first of 2022 and an increase of 75.6% from $2.7 million for the second quarter of 2021. The increase in interest expense is primarily due to interest paid on interest-bearing deposit accounts and interest related to the subordinated debt issued in March 2022.
Noninterest Income and Noninterest Expense
Noninterest income totaled $1.3 million for the second quarter of 2022, compared to $1.7 million for the first quarter of 2022. This decrease was primarily due to a decrease in derivative income of $583,000 in the second quarter of 2022 offset by a $98,000 gain on sale of the guaranteed portion of a SBA loan sold in the second quarter of 2022. There were no sales of the guaranteed portion of SBA loans in the first quarter of 2022.
Noninterest expense totaled $22.8 million in the second quarter of 2022, an increase of 12.8% from $20.2 million in the first quarter of 2022, which was primarily due to a loss on the sale of other real estate owned of $350,000, a one-time legal settlement of $900,000, and increased salary expense related to additional employees hired in the first and second quarters of 2022. We also incurred additional professional expenses related to potential new products and services and attorney fees and additional FDIC assessment expense as a result of increased rates due to bank growth. The employee headcount increased from 334 as of December 31, 2021 to 353 as of June 30, 2022.
The efficiency ratio was 78.52% in the second quarter of 2022, compared to 75.09% in the first quarter of 2022, and 79.64% in the second quarter of 2021. The slight improvement in the efficiency ratio from the second quarter of 2021 was due to the increase in interest and fees on loans.
Net Income and Earnings Per Share
Net income totaled $2.3 million for the second quarter of 2022, compared to $2.1 million for the first quarter of 2022. Basic earnings per share and diluted earnings per share increased slightly to $0.17 per share and $0.16 per share, respectively, in the second quarter of 2022 from $0.16 per share and $0.15 per share, respectively, in the first quarter of 2022.
_______________________________
(1) Non-GAAP financial measure. Please refer to the table titled "GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures" at the end of this press release for a reconciliation of these non-GAAP financial measures.
Earnings Conference Call
Third Coast has scheduled a conference call to discuss second quarter 2022 results, which will be broadcast live over the Internet, on Thursday, July 28, 2022, at 11:00 a.m. Eastern Time / 10:00 a.m. Central Time. To participate in the call, dial 201-389-0869 and ask for the Third Coast Bancshares call at least 10 minutes prior to the start time, or access it live over the Internet at https://ir.tcbssb.com/events-and-presentations/events. For those who cannot listen to the live call, a replay will be available through August 4, 2022, and may be accessed by dialing 201-612-7415 and using passcode 13731039#. Also, an archive of the webcast will be available shortly after the call at https://ir.tcbssb.com/events-and-presentations/events for 90 days.
About Third Coast Bancshares, Inc.
Third Coast Bancshares, Inc. is a commercially focused, Texas-based bank holding company operating primarily in the Greater Houston, Dallas-Fort Worth, and Austin-San Antonio markets through its wholly owned subsidiary, Third Coast Bank, SSB. Founded in 2008 in Humble, Texas, Third Coast Bank, SSB conducts banking operations through 14 branches and one loan production office encompassing the four largest metropolitan areas in Texas. Please visit https://www.tcbssb.com for more information.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "would" and "outlook," or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: the impact of COVID-19 on our business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on the United States economy; interest rate risk and fluctuations in interest rates; our ability to maintain our largest deposit relationships; our ability to grow or maintain our deposit base; our ability to implement our expansion strategy; changes in key management personnel; credit risk associated with our business; and other market conditions and economic trends generally and in the banking industry. For a discussion of additional factors that could cause our actual results to differ materially from those described in the forward-looking statements, please see the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission (the "SEC"), and our other filings with the SEC.
The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this press release. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures, including "Tangible Book Value Per Share and Tangible Common Equity to Tangible Assets Ratio," which are supplemental measures that are not required by, or are not presented in accordance with, GAAP. Please refer to the table titled "GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures" at the end of this press release for a reconciliation of these non-GAAP financial measures.
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
2022
2021
(Dollars in thousands)
June 30
March 31
December 31
September 30
June 30
ASSETS
Cash and cash equivalents:
Cash and due from banks
$
317,462
$
369,782
$
326,733
$
359,888
$
352,544
Federal funds sold
2,741
1,538
292
696
1,228
Total cash and cash equivalents
320,203
371,320
327,025
360,584
353,772
Interest bearing time deposits in other banks
132
132
131
131
131
Investment securities available-for-sale
157,261
126,218
26,432
26,431
25,991
Loans held for investment
2,749,177
2,447,945
2,068,724
1,612,394
1,551,722
Less: allowance for loan and lease loss
(26,666)
(23,312)
(19,295)
(15,571)
(13,394)
Loans, net
2,722,511
2,424,633
2,049,429
1,596,823
1,538,328
Accrued interest receivable
12,568
12,648
10,228
10,238
11,350
Premises and equipment, net
22,888
20,846
19,045
18,364
15,859
Other real estate owned
-
1,666
1,676
1,676
1,686
Bank-owned life insurance
51,919
26,671
26,528
26,382
26,237
Non-marketable securities, at cost
15,213
11,327
7,527
10,905
8,032
Deferred tax asset, net
7,179
4,258
4,123
4,456
3,836
Core Deposit Intangible, net
1,211
1,252
1,292
1,332
1,373
Goodwill
18,034
18,034
18,034
18,034
18,034
Other assets
28,943
21,383
7,942
6,815
8,671
Total assets
$
3,358,062
$
3,040,388
$
2,499,412
$
2,082,171
$
2,013,300
LIABILITIES
Deposits:
Noninterest bearing
$
519,614
$
931,622
$
531,401
$
364,418
$
374,942
Interest bearing
2,378,650
1,655,547
1,609,798
1,451,533
1,408,326
Total deposits
2,898,264
2,587,169
2,141,199
1,815,951
1,783,268
Accrued interest payable
1,683
387
437
477
866
Other liabilities
26,906
20,122
7,769
8,291
7,845
FHLB advances
18,000
50,000
50,000
50,250
50,000
Note Payable - Line of Credit
30,875
1,000
1,000
1,000
20,500
Note Payable - Subordinated Debentures
80,367
80,507
-
-
13,000
Total liabilities
3,056,095
2,739,185
2,200,405
1,875,969
1,875,479
Commitments and contingencies - ESOP-owned shares
-
-
-
2,060
1,876
SHAREHOLDERS' EQUITY
Common stock
13,543
13,524
13,482
9,387
6,647
Additional paid-in capital
250,413
249,775
249,202
160,725
97,821
Retained earnings
40,393
38,116
36,029
35,675
33,290
Accumulated other comprehensive income
(1,283)
887
1,393
1,394
1,042
Treasury stock, at cost
(1,099)
(1,099)
(1,099)
(979)
(979)
301,967
301,203
299,007
206,202
137,821
Less: ESOP-owned shares
-
-
-
(2,060)
(1,876)
Total shareholders' equity
301,967
301,203
299,007
204,142
135,945
Total liabilities and shareholders' equity
$
3,358,062
$
3,040,388
$
2,499,412
$
2,082,171
$
2,013,300
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
Three Months Ended
Year Ended
2022
2021
2021
(Dollars in thousands, except per share data)
June 30
March 31
December 31
September 30
June 30
December 31
INTEREST INCOME:
Loans, including fees
$
31,164
$
26,682
$
26,226
$
23,940
$
23,522
$
98,886
Investment securities available-for-sale
894
276
265
265
261
1,043
Federal funds sold and other
451
226
169
194
148
686
Total interest income
32,509
27,184
26,660
24,399
23,931
100,615
INTEREST EXPENSE:
Deposit accounts
3,443
1,844
1,913
2,023
2,213
8,526
FHLB advances and notes payable
1,328
130
128
374
504
1,536
Total interest expense
4,771
1,974
2,041
2,397
2,717
10,062
Net interest income
27,738
25,210
24,619
22,002
21,214
90,553
Provision for loan losses
3,350
4,000
6,100
2,323
-
9,923
Net interest income after provision for loan losses
24,388
21,210
18,519
19,679
21,214
80,630
NONINTEREST INCOME:
Service charges and fees
617
619
566
559
770
2,367
Gain on sale of SBA loans
98
-
411
175
-
586
Other
551
1,047
1,078
230
339
1,925
Total noninterest income
1,266
1,666
2,055
964
1,109
4,878
NONINTEREST EXPENSE:
Salaries and employee benefits
13,994
13,324
14,029
12,138
12,512
48,642
Data processing and network expense
932
922
786
844
820
3,060
Occupancy and equipment expense
1,830
1,873
1,557
1,419
1,195
5,367
Legal and professional
2,001
1,746
1,450
1,164
1,564
5,293
Loan operations and other real estate owned expense
282
278
275
495
170
1,963
Advertising and marketing
467
427
657
422
406
1,889
Telephone and communications
99
100
115
119
168
595
Software purchases and maintenance
201
198
248
261
192
852
Regulatory assessments
956
645
506
252
294
1,101
Loss (gain) on sale of other real estate owned
350
-
-
-
(31)
344
Other
1,661
668
464
527
489
1,919
Total noninterest expense
22,773
20,181
20,087
17,641
17,779
71,025
NET INCOME BEFORE INCOME TAX EXPENSE
2,881
2,695
487
3,002
4,544
14,483
Income tax expense
604
608
133
617
955
3,059
NET INCOME
$
2,277
$
2,087
$
354
$
2,385
$
3,589
$
11,424
EARNINGS PER COMMON SHARE:
Basic earnings per share
$
0.17
$
0.16
$
0.03
$
0.29
$
0.57
$
1.45
Diluted earnings per share
$
0.16
$
0.15
$
0.03
$
0.28
$
0.55
$
1.40
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
Three Months Ended
Year Ended
2022
2021
2021
(Dollars in thousands, except share and per share data)
June 30
March 31
December 31
September 30
June 30
December 31
Net Income
$
2,277
$
2,087
$
354
$
2,385
$
3,589
$
11,424
Earnings per share, basic
$
0.17
$
0.16
$
0.03
$
0.29
$
0.57
$
1.45
Earnings per share, diluted
$
0.16
$
0.15
$
0.03
$
0.28
$
0.55
$
1.40
Dividends per share
$
-
$
-
$
-
$
-
$
-
$
-
Return on average assets (A)
0.29
%
0.32
%
0.06
%
0.46
%
0.71
%
0.55
%
Return on average equity (A)
3.01
%
2.81
%
0.55
%
5.41
%
11.45
%
6.70
%
Net interest margin (A) (C)
3.77
%
4.09
%
4.78
%
4.49
%
4.39
%
4.65
%
Efficiency ratio (D)
78.52
%
75.09
%
75.31
%
76.81
%
79.64
%
74.43
%
Capital Ratios
Third Coast Bancshares, Inc. (consolidated):
Total shareholders' equity to total assets
8.99
%
9.91
%
11.96
%
9.90
%
6.85
%
11.96
%
Tangible common equity to tangible assets (B)
8.47
%
9.33
%
11.28
%
9.06
%
5.94
%
11.28
%
Third Coast Bank, SSB:
Common equity tier 1 (to risk weighted assets)
11.60
%
12.36
%
12.63
%
11.89
%
11.24
%
12.63
%
Tier 1 capital (to risk weighted assets)
11.60
%
12.36
%
12.63
%
11.89
%
11.24
%
12.63
%
Total capital (to risk weighted assets)
12.40
%
13.17
%
13.54
%
12.96
%
12.32
%
13.54
%
Tier 1 capital (to average assets)
12.47
%
13.66
%
12.27
%
8.39
%
6.93
%
12.27
%
Other Data
Weighted average shares:
Basic
13,454,423
13,385,324
10,724,545
8,099,878
6,339,850
7,874,110
Diluted
13,822,522
13,755,026
11,156,037
8,448,112
6,535,163
8,138,824
Period end shares outstanding
13,464,093
13,445,782
13,403,324
9,313,929
6,573,684
13,403,324
Book value per share
$
22.43
$
22.40
$
22.31
$
22.14
$
20.97
$
22.31
Tangible book value per share (B)
$
21.00
$
20.97
$
20.87
$
20.06
$
18.01
$
20.87
___________
(A) Interim periods annualized.
(B) Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on page 11 of this News Release.
(C) Net interest margin represents net interest income divided by average interest-earning assets.
(D) Represents total noninterest expense divided by the sum of net interest income plus noninterest income. Taxes and provision for loan losses are not part of this calculation.
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
Three Months Ended
June 30, 2022
December 31, 2021
June 30, 2021
(Dollars in thousands)
Average
Outstanding
Balance
Interest
Earned/
Paid(3)
Average
Yield/
Rate
Average
Outstanding
Balance
Interest
Earned/
Paid(3)
Average
Yield/
Rate
Average
Outstanding
Balance
Interest
Earned/
Paid(3)
Average
Yield/
Rate
Assets
Interest-earnings assets:
Investment securities
$
112,793
$
894
3.18
%
$
42,677
$
265
2.46
%
$
25,361
$
261
4.13
%
Loans, gross
2,641,330
31,164
4.73
%
1,774,294
26,226
5.86
%
1,653,012
23,522
5.71
%
Federal funds sold and other interest-earning assets
200,801
451
0.90
%
226,197
169
0.30
%
257,991
148
0.23
%
Total interest-earning assets
2,954,924
32,509
4.41
%
2,043,168
26,660
5.18
%
1,936,364
23,931
4.96
%
Less allowance for loan losses
(24,818)
(17,130)
(13,531)
Total interest-earning assets, net of allowance
2,930,106
2,026,038
1,922,833
Noninterest-earning assets
201,734
187,770
103,389
Total assets
$
3,131,840
$
2,213,808
$
2,026,222
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits
$
2,222,677
$
3,443
0.62
%
$
1,485,059
$
1,913
0.51
%
$
1,420,239
$
2,213
0.62
%
Notes payable and fed funds sold
83,390
1,208
5.81
%
1,126
11
3.88
%
33,500
396
4.74
%
FHLB advances
46,319
120
1.04
%
66,315
117
0.70
%
50,000
108
0.87
%
Total interest-bearing liabilities
2,352,386
4,771
0.81
%
1,552,500
2,041
0.52
%
1,503,739
2,717
0.72
%
Noninterest-bearing deposits
453,936
392,955
386,593
Other liabilities
22,383
10,770
10,219
Total liabilities
2,828,705
1,956,225
1,900,551
Shareholders' equity
303,135
257,583
125,671
Total liabilities and shareholders' equity
$
3,131,840
$
2,213,808
$
2,026,222
Net interest income
$
27,738
$
24,619
$
21,214
Net interest spread (1)
3.60
%
4.66
%
4.24
%
Net interest margin (2)
3.77
%
4.78
%
4.39
%
____________
(1) Net interest spread is the average yield on interest earning assets minus the average rate on interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average interest-earning assets.
(3) Interest earned/paid includes accretion of deferred loan fees, premiums and discounts.
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
Three Months Ended
2022
2021
(Dollars in thousands)
June 30
March 31
December 31
September 30
June 30
Period-end Loan Portfolio:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied
$
508,864
$
477,573
$
383,941
$
361,467
$
361,217
Non-farm non-residential non-owner occupied
464,530
463,618
445,308
345,360
286,533
Residential
273,415
225,649
213,264
179,971
165,890
Construction, development & other
440,925
414,653
320,335
124,548
80,400
Farmland
23,895
13,467
9,934
8,309
6,011
Commercial & industrial
914,845
756,005
611,348
538,551
612,306
Consumer
3,706
3,304
4,001
4,417
4,499
Other
118,997
93,676
80,593
49,771
34,866
Total loans
$
2,749,177
$
2,447,945
$
2,068,724
$
1,612,394
$
1,551,722
Asset Quality:
Nonaccrual loans
$
9,806
$
9,896
$
10,030
$
11,077
$
5,158
Loans > 90 days and still accruing
387
40
278
561
184
Restructured loans--accruing
785
790
5,295
5,319
5,924
Total nonperforming loans
$
10,978
$
10,726
$
15,603
$
16,957
$
11,266
Other real estate owned
-
1,666
1,676
1,676
1,686
Total nonperforming assets
$
10,978
$
12,392
$
17,279
$
18,633
$
12,952
QTD Net charge-offs (recoveries)
$
(4)
$
(17)
$
2,376
$
146
$
77
Nonaccrual loans:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied
$
964
$
986
$
1,008
$
1,032
$
1,058
Non-farm non-residential non-owner occupied
323
334
346
353
365
Residential
116
121
127
133
76
Construction, development & other
232
238
244
251
257
Farmland
-
-
-
-
-
Commercial & industrial
8,165
8,210
8,297
9,162
3,227
Consumer
-
-
-
-
-
Other
-
-
-
-
-
Purchased credit impaired
6
7
8
146
175
Total nonaccrual loans
$
9,806
$
9,896
$
10,030
$
11,077
$
5,158
Asset Quality Ratios:
Nonperforming assets to total assets
0.33
%
0.41
%
0.69
%
0.89
%
0.64
%
Nonperforming loans to total loans
0.40
%
0.44
%
0.75
%
1.05
%
0.73
%
Allowance for loan losses to total loans
0.97
%
0.95
%
0.93
%
0.97
%
0.86
%
QTD Net charge-offs(recoveries) to average loans (annualized)
0.00
%
0.00
%
0.53
%
0.04
%
0.02
%
Third Coast Bancshares, Inc. and Subsidiary
GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures
(unaudited)
Our accounting and reporting policies conform to GAAP (generally accepted accounting principles) and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional financial measures discussed in this earnings release as being non-GAAP financial measures. Specifically, we review "Tangible Book Value Per Share and Tangible Common Equity to Tangible Assets Ratio" for internal planning and forecasting purposes. We classify a financial measure as a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are not included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively financial measures calculated in accordance with GAAP.
The non-GAAP financial measures that we discuss in this earnings release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this earnings release may differ from that of other companies reporting measures with similar names. It is important to understand how other banking organizations calculate their financial measures with names similar to the non-GAAP financial measures we have discussed in this earnings release when comparing such non-GAAP financial measures.
Three Months Ended
Year Ended
2022
2021
2021
(Dollars in thousands, except per share data)
June 30
March 31
December 31
September 30
June 30
December 31
Tangible Common Equity:
Total shareholders' equity
$
301,967
$
301,203
$
299,007
$
206,202
$
137,821
$
299,007
Less: Goodwill and core deposit intangibles, net
19,245
19,286
19,326
19,366
19,407
19,326
Tangible shareholders' equity
$
282,722
$
281,917
$
279,681
$
186,836
$
118,414
$
279,681
Common shares outstanding at end of period
13,464,093
13,445,782
13,403,324
9,313,929
6,573,684
13,403,324
Book Value Per Share
$
22.43
$
22.40
$
22.31
$
22.14
$
20.97
$
22.31
Tangible Book Value Per Share
$
21.00
$
20.97
$
20.87
$
20.06
$
18.01
$
20.87
Tangible Assets:
Total assets
$
3,358,062
$
3,040,388
$
2,499,412
$
2,082,171
$
2,013,300
$
2,499,412
Adjustments: Goodwill and core deposit intangibles, net
19,245
19,286
19,326
19,366
19,407
19,326
Tangible assets
$
3,338,817
$
3,021,102
$
2,480,086
$
2,062,805
$
1,993,893
$
2,480,086
Total Shareholders' Equity to Total Assets
8.99
%
9.91
%
11.96
%
9.90
%
6.85
%
11.96
%
Tangible Common Equity to Tangible Assets
8.47
%
9.33
%
11.28
%
9.06
%
5.94
%
11.28
%
Contact:
Ken Dennard / Natalie Hairston
Dennard Lascar Investor Relations
(713) 529-6600
TCBX@dennardlascar.com
View original content:https://www.prnewswire.com/news-releases/third-coast-bancshares-inc-reports-second-quarter-2022-financial-results-301594532.html
SOURCE Third Coast Bancshares
Strategic Growth Plan Includes Realignment of Production Leadership and Research and Development Initiatives
HUMBLE, Texas, July 27, 2022 /PRNewswire/ -- Third Coast Bancshares, Inc. (NASDAQ: TCBX) (the "Company", "Third Coast", "we", "us", or "our"), the bank holding company for Third Coast Bank, SSB, today reported its 2022 second quarter financial results.
Second Quarter 2022 Financial and Operational Highlights
- Loans held for investment grew $301.2 million to $2.75 billion, or 12.3%, over the first quarter of 2022, and a 77.2% increase over the $1.55 billion reported in the second quarter of 2021.
- Deposits reached $2.90 billion, an increase of $311.1 million, or 12.0%, over the first quarter of 2022, and $1.11 billion, or 62.5% over the second quarter of 2021. Noninterest-bearing deposits declined $412.0 million to $519.6 million and now represent 17.9% of total deposits.
- Total assets reached $3.36 billion, a sequential increase of $317.7 million, or 10.4%, over the first quarter of 2022, and $1.34 billion, or 66.8%, more than the $2.01 billion reported in the second quarter of 2021.
- Net income totaled $2.3 million, or $0.16 per diluted common share, in the second quarter of 2022, compared to $2.1 million, or $0.15 per diluted common share, in the first quarter of 2022.
- Book value per share and tangible book value per share(1) increased to $22.43 and $21.00, respectively, at June 30, 2022.
- Opened 14th location in June 2022 with a de novo branch located in Georgetown, Texas.
"Third Coast is pleased to report another quarter of strong organic growth," stated Bart Caraway, Third Coast's Chairman, President and Chief Executive Officer. "Loans are up $1.20 billion in the last year while our asset quality has improved consistently both on a percentage and an absolute basis. We are fortunate to operate in attractive Texas markets with extraordinary bankers that are focused on serving our clients, driving these financial results.
"Beginning in the second quarter, we refocused our efforts toward our strategic growth plan to further position the Company for success, including the structured realignment of our production leadership and making investments in our future, such as the development of new products and services. As part of our leadership realignment, earlier this week we announced the promotions of Bill Bobbora and Andrew Novarini to lead our Commercial Banking group and Community Banking group, respectively. From a research and development perspective, we incurred additional expenses related to our Fintech and Banking-as-a-Service (BaaS) initiatives. By making these investments, we believe we will be in a much better position to grow deposit and fee income. We are excited about these potential opportunities for the Company.
"In the meantime, we remain committed to our long-term focus of serving our customers, building relationships, cultivating technological evolution, and expanding our markets. Regarding our branch network, we opened our 13th branch in Ft. Worth, Texas in the first quarter and our 14th branch in Georgetown, Texas in June.
"Looking ahead, we believe that our strategic growth plan positions us well to leverage our existing infrastructure. We also believe our teams, particularly those that we have recruited over the past 12 months, are performing at a high level and we expect them to continue to exceed our expectations. I am confident we will continue to improve our financial performance and expand relationships with new and potential clients within the Texas business community," concluded Mr. Caraway.
Loan Portfolio and Composition
During the second quarter of 2022, gross loans increased to $2.75 billion as of June 30, 2022, an increase of 12.3% from $2.45 billion as of March 31, 2022, and an increase of 77.2% from $1.55 billion as of June 30, 2021. PPP loans declined to $8.8 million at June 30, 2022 from $26.7 million at March 31, 2022. Excluding the effect of PPP loan forgiveness, the loan portfolio increased $319.1 million, or 13.2%, from March 31, 2022 to June 30, 2022, or 52.9% annualized. The loan growth was well diversified with Real Estate loans up $116.7 million and Commercial loans up $158.8 million from March 31, 2022.
Asset Quality
Asset quality improved during the second quarter of 2022 with non-performing assets declining $1.4 million, or 11.4%, from the first quarter of 2022. Improvement was primarily the result of the sale of the other real estate owned property. The provision for loan losses recorded for the second quarter of 2022 was $3.4 million, which served to increase the allowance to $26.7 million, or 0.97% of the $2.75 billion in gross loans outstanding as of June 30, 2022. Provision expense for the second quarter of 2022 related primarily to provisioning for new loans.
As of June 30, 2022, the nonperforming loans to loans held for investment ratio remains low at 0.40%, which decreased from 0.44% at March 31, 2022 and 0.73% at June 30, 2021. During the three months ended June 30, 2022 and 2021, charge-offs and recoveries were minimal, representing a net recovery of $4,000 and a net charge-off of $77,000, respectively.
Deposits and Composition
Deposits totaled $2.90 billion as of June 30, 2022, an increase of 12.0% from $2.59 billion as of March 31, 2022, and an increase of 62.5% from $1.78 billion as of June 30, 2021. Noninterest-bearing demand deposits decreased from $931.6 million at March 31, 2022 to $519.6 million at June 30, 2022, and increased $144.7 million, or 38.6%, from June 30, 2021. Noninterest-bearing demand deposits represented 17.9% of total deposits as of June 30, 2022, down from 36.0% of total deposits as of March 31, 2022, and 21.0% of total deposits as of June 30, 2021. Interest-bearing demand deposits as of June 30, 2022 increased $756.9 million, or 56.0%, from March 31, 2022 and savings accounts as of June 30, 2022 increased $3.6 million, or 10.5%, from March 31, 2022. These increases were partially offset by a decrease in time deposits of $37.5 million, or 13.9%.
The average cost of deposits was 0.52% for the second quarter of 2022, representing a 19 basis point increase from the first quarter of 2022 due primarily to the increase in rates paid on interest-bearing demand deposits and the movement of a group of significant customer deposit accounts from noninterest bearing to interest bearing in the second quarter of 2022. The average cost of deposits for the second quarter of 2022 increased 3 basis points from the second quarter of 2021 due primarily to the significant increase in interest-bearing demand deposits and increased interest rates paid on deposits.
Net Interest Margin and Net Interest Income
The net interest margin for the second quarter of 2022 was 3.77%, a decrease of 32 basis points from the first quarter of 2022 and a decrease of 62 basis points from the second quarter of 2021. The yield on loans for the second quarter of 2022 was 4.73% compared to 4.90% at March 31, 2022. The decrease was primarily due to a reduction from the first quarter of 2022 of $310,000 in loan fees and $883,000 in PPP fees.
Net interest income totaled $27.7 million for the second quarter of 2022, an increase of 10.0% from $25.2 million for the first quarter of 2022. Interest income totaled $32.5 million for the second quarter of 2022, an increase of 19.6% from $27.2 million for the first quarter of 2022. Interest and fees on loans increased $4.5 million, or 16.8%, compared to the first quarter of 2022, and increased by $7.6 million, or 32.5%, from the second quarter of 2021. Interest expense was $4.8 million for the second quarter of 2022, an increase of $2.8 million, or 141.7% from $2.0 million for the first of 2022 and an increase of 75.6% from $2.7 million for the second quarter of 2021. The increase in interest expense is primarily due to interest paid on interest-bearing deposit accounts and interest related to the subordinated debt issued in March 2022.
Noninterest Income and Noninterest Expense
Noninterest income totaled $1.3 million for the second quarter of 2022, compared to $1.7 million for the first quarter of 2022. This decrease was primarily due to a decrease in derivative income of $583,000 in the second quarter of 2022 offset by a $98,000 gain on sale of the guaranteed portion of a SBA loan sold in the second quarter of 2022. There were no sales of the guaranteed portion of SBA loans in the first quarter of 2022.
Noninterest expense totaled $22.8 million in the second quarter of 2022, an increase of 12.8% from $20.2 million in the first quarter of 2022, which was primarily due to a loss on the sale of other real estate owned of $350,000, a one-time legal settlement of $900,000, and increased salary expense related to additional employees hired in the first and second quarters of 2022. We also incurred additional professional expenses related to potential new products and services and attorney fees and additional FDIC assessment expense as a result of increased rates due to bank growth. The employee headcount increased from 334 as of December 31, 2021 to 353 as of June 30, 2022.
The efficiency ratio was 78.52% in the second quarter of 2022, compared to 75.09% in the first quarter of 2022, and 79.64% in the second quarter of 2021. The slight improvement in the efficiency ratio from the second quarter of 2021 was due to the increase in interest and fees on loans.
Net Income and Earnings Per Share
Net income totaled $2.3 million for the second quarter of 2022, compared to $2.1 million for the first quarter of 2022. Basic earnings per share and diluted earnings per share increased slightly to $0.17 per share and $0.16 per share, respectively, in the second quarter of 2022 from $0.16 per share and $0.15 per share, respectively, in the first quarter of 2022.
_______________________________
(1) Non-GAAP financial measure. Please refer to the table titled "GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures" at the end of this press release for a reconciliation of these non-GAAP financial measures.
Earnings Conference Call
Third Coast has scheduled a conference call to discuss second quarter 2022 results, which will be broadcast live over the Internet, on Thursday, July 28, 2022, at 11:00 a.m. Eastern Time / 10:00 a.m. Central Time. To participate in the call, dial 201-389-0869 and ask for the Third Coast Bancshares call at least 10 minutes prior to the start time, or access it live over the Internet at https://ir.tcbssb.com/events-and-presentations/events. For those who cannot listen to the live call, a replay will be available through August 4, 2022, and may be accessed by dialing 201-612-7415 and using passcode 13731039#. Also, an archive of the webcast will be available shortly after the call at https://ir.tcbssb.com/events-and-presentations/events for 90 days.
About Third Coast Bancshares, Inc.
Third Coast Bancshares, Inc. is a commercially focused, Texas-based bank holding company operating primarily in the Greater Houston, Dallas-Fort Worth, and Austin-San Antonio markets through its wholly owned subsidiary, Third Coast Bank, SSB. Founded in 2008 in Humble, Texas, Third Coast Bank, SSB conducts banking operations through 14 branches and one loan production office encompassing the four largest metropolitan areas in Texas. Please visit https://www.tcbssb.com for more information.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "would" and "outlook," or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: the impact of COVID-19 on our business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on the United States economy; interest rate risk and fluctuations in interest rates; our ability to maintain our largest deposit relationships; our ability to grow or maintain our deposit base; our ability to implement our expansion strategy; changes in key management personnel; credit risk associated with our business; and other market conditions and economic trends generally and in the banking industry. For a discussion of additional factors that could cause our actual results to differ materially from those described in the forward-looking statements, please see the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission (the "SEC"), and our other filings with the SEC.
The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this press release. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures, including "Tangible Book Value Per Share and Tangible Common Equity to Tangible Assets Ratio," which are supplemental measures that are not required by, or are not presented in accordance with, GAAP. Please refer to the table titled "GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures" at the end of this press release for a reconciliation of these non-GAAP financial measures.
|
Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited) | ||||||||||||||||||||
|
2022 |
2021 |
|||||||||||||||||||
|
(Dollars in thousands) |
June 30 |
March 31 |
December 31 |
September 30 |
June 30 |
|||||||||||||||
|
ASSETS |
||||||||||||||||||||
|
Cash and cash equivalents: |
||||||||||||||||||||
|
Cash and due from banks |
$ |
317,462 |
$ |
369,782 |
$ |
326,733 |
$ |
359,888 |
$ |
352,544 |
||||||||||
|
Federal funds sold |
2,741 |
1,538 |
292 |
696 |
1,228 |
|||||||||||||||
|
Total cash and cash equivalents |
320,203 |
371,320 |
327,025 |
360,584 |
353,772 |
|||||||||||||||
|
Interest bearing time deposits in other banks |
132 |
132 |
131 |
131 |
131 |
|||||||||||||||
|
Investment securities available-for-sale |
157,261 |
126,218 |
26,432 |
26,431 |
25,991 |
|||||||||||||||
|
Loans held for investment |
2,749,177 |
2,447,945 |
2,068,724 |
1,612,394 |
1,551,722 |
|||||||||||||||
|
Less: allowance for loan and lease loss |
(26,666) |
(23,312) |
(19,295) |
(15,571) |
(13,394) |
|||||||||||||||
|
Loans, net |
2,722,511 |
2,424,633 |
2,049,429 |
1,596,823 |
1,538,328 |
|||||||||||||||
|
Accrued interest receivable |
12,568 |
12,648 |
10,228 |
10,238 |
11,350 |
|||||||||||||||
|
Premises and equipment, net |
22,888 |
20,846 |
19,045 |
18,364 |
15,859 |
|||||||||||||||
|
Other real estate owned |
- |
1,666 |
1,676 |
1,676 |
1,686 |
|||||||||||||||
|
Bank-owned life insurance |
51,919 |
26,671 |
26,528 |
26,382 |
26,237 |
|||||||||||||||
|
Non-marketable securities, at cost |
15,213 |
11,327 |
7,527 |
10,905 |
8,032 |
|||||||||||||||
|
Deferred tax asset, net |
7,179 |
4,258 |
4,123 |
4,456 |
3,836 |
|||||||||||||||
|
Core Deposit Intangible, net |
1,211 |
1,252 |
1,292 |
1,332 |
1,373 |
|||||||||||||||
|
Goodwill |
18,034 |
18,034 |
18,034 |
18,034 |
18,034 |
|||||||||||||||
|
Other assets |
28,943 |
21,383 |
7,942 |
6,815 |
8,671 |
|||||||||||||||
|
Total assets |
$ |
3,358,062 |
$ |
3,040,388 |
$ |
2,499,412 |
$ |
2,082,171 |
$ |
2,013,300 |
||||||||||
|
LIABILITIES |
||||||||||||||||||||
|
Deposits: |
||||||||||||||||||||
|
Noninterest bearing |
$ |
519,614 |
$ |
931,622 |
$ |
531,401 |
$ |
364,418 |
$ |
374,942 |
||||||||||
|
Interest bearing |
2,378,650 |
1,655,547 |
1,609,798 |
1,451,533 |
1,408,326 |
|||||||||||||||
|
Total deposits |
2,898,264 |
2,587,169 |
2,141,199 |
1,815,951 |
1,783,268 |
|||||||||||||||
|
Accrued interest payable |
1,683 |
387 |
437 |
477 |
866 |
|||||||||||||||
|
Other liabilities |
26,906 |
20,122 |
7,769 |
8,291 |
7,845 |
|||||||||||||||
|
FHLB advances |
18,000 |
50,000 |
50,000 |
50,250 |
50,000 |
|||||||||||||||
|
Note Payable - Line of Credit |
30,875 |
1,000 |
1,000 |
1,000 |
20,500 |
|||||||||||||||
|
Note Payable - Subordinated Debentures |
80,367 |
80,507 |
- |
- |
13,000 |
|||||||||||||||
|
Total liabilities |
3,056,095 |
2,739,185 |
2,200,405 |
1,875,969 |
1,875,479 |
|||||||||||||||
|
Commitments and contingencies - ESOP-owned shares |
- |
- |
- |
2,060 |
1,876 |
|||||||||||||||
|
SHAREHOLDERS' EQUITY |
||||||||||||||||||||
|
Common stock |
13,543 |
13,524 |
13,482 |
9,387 |
6,647 |
|||||||||||||||
|
Additional paid-in capital |
250,413 |
249,775 |
249,202 |
160,725 |
97,821 |
|||||||||||||||
|
Retained earnings |
40,393 |
38,116 |
36,029 |
35,675 |
33,290 |
|||||||||||||||
|
Accumulated other comprehensive income |
(1,283) |
887 |
1,393 |
1,394 |
1,042 |
|||||||||||||||
|
Treasury stock, at cost |
(1,099) |
(1,099) |
(1,099) |
(979) |
(979) |
|||||||||||||||
|
301,967 |
301,203 |
299,007 |
206,202 |
137,821 |
||||||||||||||||
|
Less: ESOP-owned shares |
- |
- |
- |
(2,060) |
(1,876) |
|||||||||||||||
|
Total shareholders' equity |
301,967 |
301,203 |
299,007 |
204,142 |
135,945 |
|||||||||||||||
|
Total liabilities and shareholders' equity |
$ |
3,358,062 |
$ |
3,040,388 |
$ |
2,499,412 |
$ |
2,082,171 |
$ |
2,013,300 |
||||||||||
|
Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited) | |||||||||||||||||||||||||
|
Three Months Ended |
Year Ended |
||||||||||||||||||||||||
|
2022 |
2021 |
2021 |
|||||||||||||||||||||||
|
(Dollars in thousands, except per share data) |
June 30 |
March 31 |
December 31 |
September 30 |
June 30 |
December 31 |
|||||||||||||||||||
|
INTEREST INCOME: |
|||||||||||||||||||||||||
|
Loans, including fees |
$ |
31,164 |
$ |
26,682 |
$ |
26,226 |
$ |
23,940 |
$ |
23,522 |
$ |
98,886 |
|||||||||||||
|
Investment securities available-for-sale |
894 |
276 |
265 |
265 |
261 |
1,043 |
|||||||||||||||||||
|
Federal funds sold and other |
451 |
226 |
169 |
194 |
148 |
686 |
|||||||||||||||||||
|
Total interest income |
32,509 |
27,184 |
26,660 |
24,399 |
23,931 |
100,615 |
|||||||||||||||||||
|
INTEREST EXPENSE: |
|||||||||||||||||||||||||
|
Deposit accounts |
3,443 |
1,844 |
1,913 |
2,023 |
2,213 |
8,526 |
|||||||||||||||||||
|
FHLB advances and notes payable |
1,328 |
130 |
128 |
374 |
504 |
1,536 |
|||||||||||||||||||
|
Total interest expense |
4,771 |
1,974 |
2,041 |
2,397 |
2,717 |
10,062 |
|||||||||||||||||||
|
Net interest income |
27,738 |
25,210 |
24,619 |
22,002 |
21,214 |
90,553 |
|||||||||||||||||||
|
Provision for loan losses |
3,350 |
4,000 |
6,100 |
2,323 |
- |
9,923 |
|||||||||||||||||||
|
Net interest income after provision for loan losses |
24,388 |
21,210 |
18,519 |
19,679 |
21,214 |
80,630 |
|||||||||||||||||||
|
NONINTEREST INCOME: |
|||||||||||||||||||||||||
|
Service charges and fees |
617 |
619 |
566 |
559 |
770 |
2,367 |
|||||||||||||||||||
|
Gain on sale of SBA loans |
98 |
- |
411 |
175 |
- |
586 |
|||||||||||||||||||
|
Other |
551 |
1,047 |
1,078 |
230 |
339 |
1,925 |
|||||||||||||||||||
|
Total noninterest income |
1,266 |
1,666 |
2,055 |
964 |
1,109 |
4,878 |
|||||||||||||||||||
|
NONINTEREST EXPENSE: |
|||||||||||||||||||||||||
|
Salaries and employee benefits |
13,994 |
13,324 |
14,029 |
12,138 |
12,512 |
48,642 |
|||||||||||||||||||
|
Data processing and network expense |
932 |
922 |
786 |
844 |
820 |
3,060 |
|||||||||||||||||||
|
Occupancy and equipment expense |
1,830 |
1,873 |
1,557 |
1,419 |
1,195 |
5,367 |
|||||||||||||||||||
|
Legal and professional |
2,001 |
1,746 |
1,450 |
1,164 |
1,564 |
5,293 |
|||||||||||||||||||
|
Loan operations and other real estate owned expense |
282 |
278 |
275 |
495 |
170 |
1,963 |
|||||||||||||||||||
|
Advertising and marketing |
467 |
427 |
657 |
422 |
406 |
1,889 |
|||||||||||||||||||
|
Telephone and communications |
99 |
100 |
115 |
119 |
168 |
595 |
|||||||||||||||||||
|
Software purchases and maintenance |
201 |
198 |
248 |
261 |
192 |
852 |
|||||||||||||||||||
|
Regulatory assessments |
956 |
645 |
506 |
252 |
294 |
1,101 |
|||||||||||||||||||
|
Loss (gain) on sale of other real estate owned |
350 |
- |
- |
- |
(31) |
344 |
|||||||||||||||||||
|
Other |
1,661 |
668 |
464 |
527 |
489 |
1,919 |
|||||||||||||||||||
|
Total noninterest expense |
22,773 |
20,181 |
20,087 |
17,641 |
17,779 |
71,025 |
|||||||||||||||||||
|
NET INCOME BEFORE INCOME TAX EXPENSE |
2,881 |
2,695 |
487 |
3,002 |
4,544 |
14,483 |
|||||||||||||||||||
|
Income tax expense |
604 |
608 |
133 |
617 |
955 |
3,059 |
|||||||||||||||||||
|
NET INCOME |
$ |
2,277 |
$ |
2,087 |
$ |
354 |
$ |
2,385 |
$ |
3,589 |
$ |
11,424 |
|||||||||||||
|
EARNINGS PER COMMON SHARE: |
|||||||||||||||||||||||||
|
Basic earnings per share |
$ |
0.17 |
$ |
0.16 |
$ |
0.03 |
$ |
0.29 |
$ |
0.57 |
$ |
1.45 |
|||||||||||||
|
Diluted earnings per share |
$ |
0.16 |
$ |
0.15 |
$ |
0.03 |
$ |
0.28 |
$ |
0.55 |
$ |
1.40 |
|||||||||||||
|
Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited) | ||||||||||||||||||||||||
|
Three Months Ended |
Year Ended |
|||||||||||||||||||||||
|
2022 |
2021 |
2021 |
||||||||||||||||||||||
|
(Dollars in thousands, except share and per share data) |
June 30 |
March 31 |
December 31 |
September 30 |
June 30 |
December 31 |
||||||||||||||||||
|
Net Income |
$ |
2,277 |
$ |
2,087 |
$ |
354 |
$ |
2,385 |
$ |
3,589 |
$ |
11,424 |
||||||||||||
|
Earnings per share, basic |
$ |
0.17 |
$ |
0.16 |
$ |
0.03 |
$ |
0.29 |
$ |
0.57 |
$ |
1.45 |
||||||||||||
|
Earnings per share, diluted |
$ |
0.16 |
$ |
0.15 |
$ |
0.03 |
$ |
0.28 |
$ |
0.55 |
$ |
1.40 |
||||||||||||
|
Dividends per share |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
||||||||||||
|
Return on average assets (A) |
0.29 |
% |
0.32 |
% |
0.06 |
% |
0.46 |
% |
0.71 |
% |
0.55 |
% |
||||||||||||
|
Return on average equity (A) |
3.01 |
% |
2.81 |
% |
0.55 |
% |
5.41 |
% |
11.45 |
% |
6.70 |
% |
||||||||||||
|
Net interest margin (A) (C) |
3.77 |
% |
4.09 |
% |
4.78 |
% |
4.49 |
% |
4.39 |
% |
4.65 |
% |
||||||||||||
|
Efficiency ratio (D) |
78.52 |
% |
75.09 |
% |
75.31 |
% |
76.81 |
% |
79.64 |
% |
74.43 |
% |
||||||||||||
|
Capital Ratios |
||||||||||||||||||||||||
|
Third Coast Bancshares, Inc. (consolidated): |
||||||||||||||||||||||||
|
Total shareholders' equity to total assets |
8.99 |
% |
9.91 |
% |
11.96 |
% |
9.90 |
% |
6.85 |
% |
11.96 |
% |
||||||||||||
|
Tangible common equity to tangible assets (B) |
8.47 |
% |
9.33 |
% |
11.28 |
% |
9.06 |
% |
5.94 |
% |
11.28 |
% |
||||||||||||
|
Third Coast Bank, SSB: |
||||||||||||||||||||||||
|
Common equity tier 1 (to risk weighted assets) |
11.60 |
% |
12.36 |
% |
12.63 |
% |
11.89 |
% |
11.24 |
% |
12.63 |
% |
||||||||||||
|
Tier 1 capital (to risk weighted assets) |
11.60 |
% |
12.36 |
% |
12.63 |
% |
11.89 |
% |
11.24 |
% |
12.63 |
% |
||||||||||||
|
Total capital (to risk weighted assets) |
12.40 |
% |
13.17 |
% |
13.54 |
% |
12.96 |
% |
12.32 |
% |
13.54 |
% |
||||||||||||
|
Tier 1 capital (to average assets) |
12.47 |
% |
13.66 |
% |
12.27 |
% |
8.39 |
% |
6.93 |
% |
12.27 |
% |
||||||||||||
|
Other Data |
||||||||||||||||||||||||
|
Weighted average shares: |
||||||||||||||||||||||||
|
Basic |
13,454,423 |
13,385,324 |
10,724,545 |
8,099,878 |
6,339,850 |
7,874,110 |
||||||||||||||||||
|
Diluted |
13,822,522 |
13,755,026 |
11,156,037 |
8,448,112 |
6,535,163 |
8,138,824 |
||||||||||||||||||
|
Period end shares outstanding |
13,464,093 |
13,445,782 |
13,403,324 |
9,313,929 |
6,573,684 |
13,403,324 |
||||||||||||||||||
|
Book value per share |
$ |
22.43 |
$ |
22.40 |
$ |
22.31 |
$ |
22.14 |
$ |
20.97 |
$ |
22.31 |
||||||||||||
|
Tangible book value per share (B) |
$ |
21.00 |
$ |
20.97 |
$ |
20.87 |
$ |
20.06 |
$ |
18.01 |
$ |
20.87 |
||||||||||||
|
___________ |
|
(A) Interim periods annualized. |
|
(B) Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on page 11 of this News Release. |
|
(C) Net interest margin represents net interest income divided by average interest-earning assets. |
|
(D) Represents total noninterest expense divided by the sum of net interest income plus noninterest income. Taxes and provision for loan losses are not part of this calculation. |
|
Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited) | ||||||||||||||||||||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||||||||||||||||||||
|
June 30, 2022 |
December 31, 2021 |
June 30, 2021 |
||||||||||||||||||||||||||||||||||
|
(Dollars in thousands) |
Average |
Interest |
Average |
Average |
Interest |
Average |
Average |
Interest |
Average |
|||||||||||||||||||||||||||
|
Assets |
||||||||||||||||||||||||||||||||||||
|
Interest-earnings assets: |
||||||||||||||||||||||||||||||||||||
|
Investment securities |
$ |
112,793 |
$ |
894 |
3.18 |
% |
$ |
42,677 |
$ |
265 |
2.46 |
% |
$ |
25,361 |
$ |
261 |
4.13 |
% |
||||||||||||||||||
|
Loans, gross |
2,641,330 |
31,164 |
4.73 |
% |
1,774,294 |
26,226 |
5.86 |
% |
1,653,012 |
23,522 |
5.71 |
% |
||||||||||||||||||||||||
|
Federal funds sold and other interest-earning assets |
200,801 |
451 |
0.90 |
% |
226,197 |
169 |
0.30 |
% |
257,991 |
148 |
0.23 |
% |
||||||||||||||||||||||||
|
Total interest-earning assets |
2,954,924 |
32,509 |
4.41 |
% |
2,043,168 |
26,660 |
5.18 |
% |
1,936,364 |
23,931 |
4.96 |
% |
||||||||||||||||||||||||
|
Less allowance for loan losses |
(24,818) |
(17,130) |
(13,531) |
|||||||||||||||||||||||||||||||||
|
Total interest-earning assets, net of allowance |
2,930,106 |
2,026,038 |
1,922,833 |
|||||||||||||||||||||||||||||||||
|
Noninterest-earning assets |
201,734 |
187,770 |
103,389 |
|||||||||||||||||||||||||||||||||
|
Total assets |
$ |
3,131,840 |
$ |
2,213,808 |
$ |
2,026,222 |
||||||||||||||||||||||||||||||
|
Liabilities and Shareholders' Equity |
||||||||||||||||||||||||||||||||||||
|
Interest-bearing liabilities: |
||||||||||||||||||||||||||||||||||||
|
Interest-bearing deposits |
$ |
2,222,677 |
$ |
3,443 |
0.62 |
% |
$ |
1,485,059 |
$ |
1,913 |
0.51 |
% |
$ |
1,420,239 |
$ |
2,213 |
0.62 |
% |
||||||||||||||||||
|
Notes payable and fed funds sold |
83,390 |
1,208 |
5.81 |
% |
1,126 |
11 |
3.88 |
% |
33,500 |
396 |
4.74 |
% |
||||||||||||||||||||||||
|
FHLB advances |
46,319 |
120 |
1.04 |
% |
66,315 |
117 |
0.70 |
% |
50,000 |
108 |
0.87 |
% |
||||||||||||||||||||||||
|
Total interest-bearing liabilities |
2,352,386 |
4,771 |
0.81 |
% |
1,552,500 |
2,041 |
0.52 |
% |
1,503,739 |
2,717 |
0.72 |
% |
||||||||||||||||||||||||
|
Noninterest-bearing deposits |
453,936 |
392,955 |
386,593 |
|||||||||||||||||||||||||||||||||
|
Other liabilities |
22,383 |
10,770 |
10,219 |
|||||||||||||||||||||||||||||||||
|
Total liabilities |
2,828,705 |
1,956,225 |
1,900,551 |
|||||||||||||||||||||||||||||||||
|
Shareholders' equity |
303,135 |
257,583 |
125,671 |
|||||||||||||||||||||||||||||||||
|
Total liabilities and shareholders' equity |
$ |
3,131,840 |
$ |
2,213,808 |
$ |
2,026,222 |
||||||||||||||||||||||||||||||
|
Net interest income |
$ |
27,738 |
$ |
24,619 |
$ |
21,214 |
||||||||||||||||||||||||||||||
|
Net interest spread (1) |
3.60 |
% |
4.66 |
% |
4.24 |
% |
||||||||||||||||||||||||||||||
|
Net interest margin (2) |
3.77 |
% |
4.78 |
% |
4.39 |
% |
||||||||||||||||||||||||||||||
|
____________ |
|
(1) Net interest spread is the average yield on interest earning assets minus the average rate on interest-bearing liabilities. |
|
(2) Net interest margin represents net interest income divided by average interest-earning assets. |
|
(3) Interest earned/paid includes accretion of deferred loan fees, premiums and discounts. |
|
Third Coast Bancshares, Inc. and Subsidiary Financial Highlights |
||||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||||
|
2022 |
2021 |
|||||||||||||||||||
|
(Dollars in thousands) |
June 30 |
March 31 |
December 31 |
September 30 |
June 30 |
|||||||||||||||
|
Period-end Loan Portfolio: |
||||||||||||||||||||
|
Real estate loans: |
||||||||||||||||||||
|
Commercial real estate: |
||||||||||||||||||||
|
Non-farm non-residential owner occupied |
$ |
508,864 |
$ |
477,573 |
$ |
383,941 |
$ |
361,467 |
$ |
361,217 |
||||||||||
|
Non-farm non-residential non-owner occupied |
464,530 |
463,618 |
445,308 |
345,360 |
286,533 |
|||||||||||||||
|
Residential |
273,415 |
225,649 |
213,264 |
179,971 |
165,890 |
|||||||||||||||
|
Construction, development & other |
440,925 |
414,653 |
320,335 |
124,548 |
80,400 |
|||||||||||||||
|
Farmland |
23,895 |
13,467 |
9,934 |
8,309 |
6,011 |
|||||||||||||||
|
Commercial & industrial |
914,845 |
756,005 |
611,348 |
538,551 |
612,306 |
|||||||||||||||
|
Consumer |
3,706 |
3,304 |
4,001 |
4,417 |
4,499 |
|||||||||||||||
|
Other |
118,997 |
93,676 |
80,593 |
49,771 |
34,866 |
|||||||||||||||
|
Total loans |
$ |
2,749,177 |
$ |
2,447,945 |
$ |
2,068,724 |
$ |
1,612,394 |
$ |
1,551,722 |
||||||||||
|
Asset Quality: |
||||||||||||||||||||
|
Nonaccrual loans |
$ |
9,806 |
$ |
9,896 |
$ |
10,030 |
$ |
11,077 |
$ |
5,158 |
||||||||||
|
Loans > 90 days and still accruing |
387 |
40 |
278 |
561 |
184 |
|||||||||||||||
|
Restructured loans--accruing |
785 |
790 |
5,295 |
5,319 |
5,924 |
|||||||||||||||
|
Total nonperforming loans |
$ |
10,978 |
$ |
10,726 |
$ |
15,603 |
$ |
16,957 |
$ |
11,266 |
||||||||||
|
Other real estate owned |
- |
1,666 |
1,676 |
1,676 |
1,686 |
|||||||||||||||
|
Total nonperforming assets |
$ |
10,978 |
$ |
12,392 |
$ |
17,279 |
$ |
18,633 |
$ |
12,952 |
||||||||||
|
QTD Net charge-offs (recoveries) |
$ |
(4) |
$ |
(17) |
$ |
2,376 |
$ |
146 |
$ |
77 |
||||||||||
|
Nonaccrual loans: |
||||||||||||||||||||
|
Real estate loans: |
||||||||||||||||||||
|
Commercial real estate: |
||||||||||||||||||||
|
Non-farm non-residential owner occupied |
$ |
964 |
$ |
986 |
$ |
1,008 |
$ |
1,032 |
$ |
1,058 |
||||||||||
|
Non-farm non-residential non-owner occupied |
323 |
334 |
346 |
353 |
365 |
|||||||||||||||
|
Residential |
116 |
121 |
127 |
133 |
76 |
|||||||||||||||
|
Construction, development & other |
232 |
238 |
244 |
251 |
257 |
|||||||||||||||
|
Farmland |
- |
- |
- |
- |
- |
|||||||||||||||
|
Commercial & industrial |
8,165 |
8,210 |
8,297 |
9,162 |
3,227 |
|||||||||||||||
|
Consumer |
- |
- |
- |
- |
- |
|||||||||||||||
|
Other |
- |
- |
- |
- |
- |
|||||||||||||||
|
Purchased credit impaired |
6 |
7 |
8 |
146 |
175 |
|||||||||||||||
|
Total nonaccrual loans |
$ |
9,806 |
$ |
9,896 |
$ |
10,030 |
$ |
11,077 |
$ |
5,158 |
||||||||||
|
Asset Quality Ratios: |
||||||||||||||||||||
|
Nonperforming assets to total assets |
0.33 |
% |
0.41 |
% |
0.69 |
% |
0.89 |
% |
0.64 |
% |
||||||||||
|
Nonperforming loans to total loans |
0.40 |
% |
0.44 |
% |
0.75 |
% |
1.05 |
% |
0.73 |
% |
||||||||||
|
Allowance for loan losses to total loans |
0.97 |
% |
0.95 |
% |
0.93 |
% |
0.97 |
% |
0.86 |
% |
||||||||||
|
QTD Net charge-offs(recoveries) to average loans (annualized) |
0.00 |
% |
0.00 |
% |
0.53 |
% |
0.04 |
% |
0.02 |
% |
||||||||||
Third Coast Bancshares, Inc. and Subsidiary
GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures
(unaudited)
Our accounting and reporting policies conform to GAAP (generally accepted accounting principles) and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional financial measures discussed in this earnings release as being non-GAAP financial measures. Specifically, we review "Tangible Book Value Per Share and Tangible Common Equity to Tangible Assets Ratio" for internal planning and forecasting purposes. We classify a financial measure as a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are not included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively financial measures calculated in accordance with GAAP.
The non-GAAP financial measures that we discuss in this earnings release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this earnings release may differ from that of other companies reporting measures with similar names. It is important to understand how other banking organizations calculate their financial measures with names similar to the non-GAAP financial measures we have discussed in this earnings release when comparing such non-GAAP financial measures.
|
Three Months Ended |
Year Ended |
|||||||||||||||||||||||
|
2022 |
2021 |
2021 |
||||||||||||||||||||||
|
(Dollars in thousands, except per share data) |
June 30 |
March 31 |
December 31 |
September 30 |
June 30 |
December 31 |
||||||||||||||||||
|
Tangible Common Equity: |
||||||||||||||||||||||||
|
Total shareholders' equity |
$ |
301,967 |
$ |
301,203 |
$ |
299,007 |
$ |
206,202 |
$ |
137,821 |
$ |
299,007 |
||||||||||||
|
Less: Goodwill and core deposit intangibles, net |
19,245 |
19,286 |
19,326 |
19,366 |
19,407 |
19,326 |
||||||||||||||||||
|
Tangible shareholders' equity |
$ |
282,722 |
$ |
281,917 |
$ |
279,681 |
$ |
186,836 |
$ |
118,414 |
$ |
279,681 |
||||||||||||
|
Common shares outstanding at end of period |
13,464,093 |
13,445,782 |
13,403,324 |
9,313,929 |
6,573,684 |
13,403,324 |
||||||||||||||||||
|
Book Value Per Share |
$ |
22.43 |
$ |
22.40 |
$ |
22.31 |
$ |
22.14 |
$ |
20.97 |
$ |
22.31 |
||||||||||||
|
Tangible Book Value Per Share |
$ |
21.00 |
$ |
20.97 |
$ |
20.87 |
$ |
20.06 |
$ |
18.01 |
$ |
20.87 |
||||||||||||
|
Tangible Assets: |
||||||||||||||||||||||||
|
Total assets |
$ |
3,358,062 |
$ |
3,040,388 |
$ |
2,499,412 |
$ |
2,082,171 |
$ |
2,013,300 |
$ |
2,499,412 |
||||||||||||
|
Adjustments: Goodwill and core deposit intangibles, net |
19,245 |
19,286 |
19,326 |
19,366 |
19,407 |
19,326 |
||||||||||||||||||
|
Tangible assets |
$ |
3,338,817 |
$ |
3,021,102 |
$ |
2,480,086 |
$ |
2,062,805 |
$ |
1,993,893 |
$ |
2,480,086 |
||||||||||||
|
Total Shareholders' Equity to Total Assets |
8.99 |
% |
9.91 |
% |
11.96 |
% |
9.90 |
% |
6.85 |
% |
11.96 |
% |
||||||||||||
|
Tangible Common Equity to Tangible Assets |
8.47 |
% |
9.33 |
% |
11.28 |
% |
9.06 |
% |
5.94 |
% |
11.28 |
% |
||||||||||||
Contact:
Ken Dennard / Natalie Hairston
Dennard Lascar Investor Relations
(713) 529-6600
TCBX@dennardlascar.com
View original content:https://www.prnewswire.com/news-releases/third-coast-bancshares-inc-reports-second-quarter-2022-financial-results-301594532.html
SOURCE Third Coast Bancshares