THIRD COAST BANCSHARES, INC. REPORTS 2022 FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS
Gross Loans, Deposits and Total Assets grew over 50% for full year 2022 compared to full year 2021 results
HOUSTON, Jan. 26, 2023 /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 fourth quarter and full year financial results.
2022 Fourth Quarter Financial and Operational Highlights
- Loans held for investment grew $134.7 million to $3.11 billion as of December 31, 2022, or 4.5%, over the $2.97 billion reported as of September 30, 2022.
- Deposits reached $3.24 billion as of December 31, 2022, an increase of $251.8 million, or 8.4%, over the $2.98 billion reported as of September 30, 2022.
- Total assets reached $3.77 billion as of December 31, 2022, an increase of $256.3 million, or 7.3%, over the $3.52 billion reported as of September 30, 2022.
- Net income for the fourth quarter 2022 totaled $7.5 million compared to $6.8 million for the third quarter of 2022.
- Book value per share and tangible book value per share(1) increased to $23.32 and $21.90, respectively, at December 31, 2022 compared to $22.93 and $21.51, respectively, at September 30, 2022.
- Opened a branch location in San Antonio, Texas.
2022 Full Year Financial and Operational Highlights
- Loans held for investment grew $1.04 billion to $3.11 billion as of December 31, 2022, or 50.2%, over the $2.07 billion reported as of December 31, 2021.
- Deposits reached $3.24 billion as of December 31, 2022, an increase of $1.09 billion, or 51.1%, over the $2.14 billion reported as of December 31, 2021.
- Total assets reached $3.77 billion as of December 31, 2022, an increase of $1.27 billion, or 51.0%, more than the $2.50 billion reported as of December 31, 2021.
- Net income totaled $18.7 million and $11.4 million for the years ended December 31, 2022 and 2021, respectively, an increase of 63.3%.
- Book value per share and tangible book value per share(1) increased to $23.32 and $21.90, respectively, at December 31, 2022 compared to $22.31 and $20.87, respectively, at December 31, 2021.
- Opened four locations during 2022, including in Fort Worth, Georgetown, Kingwood, and San Antonio, Texas, totaling 16 branch locations.
(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.
"A little over one year ago, on November 9, 2021, we marked an important milestone in our Company's history by successfully completing our initial public offering," stated Bart Caraway, Third Coast's Chairman, President and Chief Executive Officer. "I am delighted to report that we have had a remarkable first full year as a public company; Third Coast reported over 50% growth in gross loans, deposits and total assets in 2022 when compared to 2021. We focused on driving revenue higher while keeping expenses low throughout the year, which resulted in improved operational leverage.
"Additionally, we exceeded our internal margin, return on asset and earnings expectations during the fourth quarter and continue to be very confident about our future. Our asset quality remains strong and our earning metrics continue to improve. Looking ahead, we will continue to focus on operating performance and executing the Company's profitable business strategy," concluded Mr. Caraway.
Loan Portfolio and Composition
During the fourth quarter of 2022, gross loans increased to $3.11 billion as of December 31, 2022, an increase of $134.7 million, or 4.5%, from $2.97 billion as of September 30, 2022, and an increase of $1.04 billion, or 50.2%, from $2.07 billion as of December 31, 2021. The loan growth was well diversified with real estate loans up $72.6 million and commercial loans up $29.7 million from September 30, 2022. On a full year basis, real estate loans grew by $526.5 million and commercial loans grew by $447.6 million from 2021.
Asset Quality
Asset quality improved year-over-year with non-performing assets decreasing to $12.3 million as of December 31, 2022, or 29.0%, from $17.3 million as of December 31, 2021. Non-performing assets at December 31, 2022 increased $1.9 million, or 18.8%, from $10.3 million as of September 30, 2022. The provision for credit losses recorded for the fourth quarter of 2022 was $2.0 million, which served to increase the allowance to $30.4 million, or 0.98% of the $3.11 billion in gross loans outstanding as of December 31, 2022. Provision expense for the fourth quarter of 2022 related primarily to provisioning for new loans.
As of December 31, 2022, the nonperforming loans to loans held for investment ratio remained low at 0.39%, which increased slightly from 0.35% as of September 30, 2022 and decreased from 0.75% as of December 31, 2021. During the three months ended December 31, 2022 and 2021, net charge-offs were $708,000 and $2.4 million, respectively. On a full year basis, net charge-offs were $1.1 million and $2.6 million in 2022 and 2021, respectively.
Deposits and Composition
Deposits totaled $3.24 billion as of December 31, 2022, an increase of 8.4% from $2.98 billion as of September 30, 2022, and an increase of 51.1% from $2.14 billion as of December 31, 2021. Noninterest-bearing demand deposits decreased from $517.3 million as of September 30, 2022 to $486.1 million as of December 31, 2022, and decreased $45.3 million, or 8.5%, from December 31, 2021. Noninterest-bearing demand deposits represented 15.0% of total deposits as of December 31, 2022, down from 17.3% of total deposits as of September 30, 2022, and 24.8% of total deposits as of December 31, 2021. As of December 31, 2022, interest-bearing demand deposits increased $270.1 million, or 12.1%, and time deposits increased $14.5 million, or 7.2%, from September 30, 2022. The increase in fourth quarter deposits was offset by a decrease in savings accounts of $1.6 million, or 4.3%, from September 30, 2022.
The average cost of deposits was 2.17% for the fourth quarter of 2022, representing a 86 basis point increase from the third quarter of 2022 and a 177 basis point increase from the fourth quarter of 2021 due primarily to the increase in rates paid on interest-bearing demand deposits.
Net Interest Margin and Net Interest Income
The net interest margin for the fourth quarter of 2022 was 3.75% compared to 3.77% for the third quarter of 2022 and 4.78% for the fourth quarter of 2021. The yield on loans for the fourth quarter of 2022 was 6.27% compared to 5.59% for the third quarter of 2022 and 5.86% for the fourth quarter of 2021. The increase in yield on loans during the fourth quarter of 2022 was primarily due to the increase in the Prime Rate.
Net interest income totaled $32.2 million for the fourth quarter of 2022, an increase of 2.5% from $31.4 million for the third quarter of 2022. Interest income totaled $51.2 million for the fourth quarter of 2022, an increase of 18.7% from $43.1 million for the third quarter of 2022. Interest and fees on loans increased $7.6 million, or 18.7%, compared to the third quarter of 2022, and increased $21.9 million, or 83.3%, from the fourth quarter of 2021. Interest expense was $19.0 million for the fourth quarter of 2022, an increase of $7.3 million, or 61.7% from $11.7 million for the third quarter of 2022 and an increase of $17.0 million, or 830.9% from $2.0 million for the fourth quarter of 2021. The increase in interest expense during the fourth quarter of 2022 was primarily due to interest-bearing deposit growth and increases in interest rates paid on interest-bearing deposit accounts and FHLB advances. The increase in interest expense from the fourth quarter of 2021 is primarily due to interest-bearing deposit growth, issuance of subordinated debt in March 2022, and increases in rates paid on interest-bearing deposit accounts, FHLB advances, and line of credit advances.
Noninterest Income and Noninterest Expense
Noninterest income totaled $1.8 million for the fourth quarter of 2022, compared to $2.5 million for the third quarter of 2022, and $2.1 million for the fourth quarter of 2021. Gains on the sales of guaranteed portions of SBA loans decreased from $729,000 for the third quarter of 2022 to $123,000 for the fourth quarter 2022. In addition, derivative fees decreased from $313,000 for the third quarter of 2022 to $117,000 for the fourth quarter of 2022.
Noninterest expense totaled $22.6 million for the fourth quarter of 2022 down from $22.7 million for the third quarter of 2022 and up from $20.1 million for the fourth quarter of 2021. The year-over-year increase was primarily attributed to increased salary expenses related to additional employees hired in 2022 and administrative expenses related to opening of four branches during 2022. The employee headcount increased from 334 as of December 31, 2021 to 368 as of December 31, 2022. In addition, the year-over-year increase in legal and professional fees related to increased regulatory requirements resulting in additional audit, consulting and legal expenses and increase in regulatory assessment expense related to increased assessment rates and total asset growth.
The efficiency ratio was 66.74% for the fourth quarter of 2022, compared to 67.06% for the third quarter of 2022, and 75.31% for the fourth quarter of 2021. The improvement in the efficiency ratio was primarily due to the increase in interest and fees on loans while maintaining noninterest expense consistent with prior quarters.
Net Income and Earnings Per Share
Net income totaled $7.5 million for the fourth quarter of 2022, compared to $6.8 million for the third quarter of 2022. Net income available to common shareholders totaled $6.1 million for the fourth quarter. Dividends on Series A Preferred Stock issued on September 30, 2022 totaled $1.4 million for the fourth quarter of 2022. Basic earnings per share and diluted earnings per share were $0.45 per share and $0.44 per share, respectively, in the fourth quarter of 2022 compared to $0.50 per share and $0.49 per share, respectively, in the third quarter of 2022.
Earnings Conference Call
Third Coast has scheduled a conference call to discuss 2022 fourth quarter and fiscal year results, which will be broadcast live over the Internet, on Friday, January 27, 2023, 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 Inc. 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 February 3, 2023, and may be accessed by dialing 201-612-7415 and using passcode 13735402#. 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 16 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, and Section 21E of the Securities Exchange Act of 1934, 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, Tangible Common Equity to Tangible Assets Ratio and Return on Average Tangible Common Equity," 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.
Contact:
Ken Dennard / Natalie Hairston
Dennad Lascar Investor Relations
(713) 529-6600
TCBX@dennardlascar.com
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
2022
2021
(Dollars in thousands)
December 31
September 30
June 30
March 31
December 31
ASSETS
Cash and cash equivalents:
Cash and due from banks
$
329,864
$
216,623
$
317,462
$
369,782
$
326,733
Federal funds sold
2,150
1,225
2,741
1,538
292
Total cash and cash equivalents
332,014
217,848
320,203
371,320
327,025
Interest bearing time deposits in other banks
-
132
132
132
131
Investment securities available-for-sale
176,067
160,437
157,261
126,218
26,432
Loans held for investment
3,107,551
2,972,852
2,749,177
2,447,945
2,068,724
Less: allowance for loan and lease loss
(30,351)
(29,109)
(26,666)
(23,312)
(19,295)
Loans, net
3,077,200
2,943,743
2,722,511
2,424,633
2,049,429
Accrued interest receivable
18,340
16,246
12,568
12,648
10,228
Premises and equipment, net
28,662
25,449
22,888
20,846
19,045
Other real estate owned
-
-
-
1,666
1,676
Bank-owned life insurance
60,761
60,263
51,919
26,671
26,528
Non-marketable securities, at cost
15,405
27,136
15,213
11,327
7,527
Deferred tax asset, net
6,303
8,097
7,179
4,258
4,123
Fair value hedge assets
9,213
11,508
6,892
3,873
389
Right-of-use assets
17,872
18,266
12,648
10,697
-
Core Deposit Intangible, net
1,131
1,171
1,211
1,252
1,292
Goodwill
18,034
18,034
18,034
18,034
18,034
Other assets
12,146
8,515
9,403
6,813
7,553
Total assets
$
3,773,148
$
3,516,845
$
3,358,062
$
3,040,388
$
2,499,412
LIABILITIES
Deposits:
Noninterest bearing
$
486,114
$
517,265
$
519,614
$
931,622
$
531,401
Interest bearing
2,750,032
2,467,049
2,378,650
1,655,547
1,609,798
Total deposits
3,236,146
2,984,314
2,898,264
2,587,169
2,141,199
Accrued interest payable
2,545
2,925
1,683
387
437
Fair value hedge liabilities
9,221
11,514
6,912
3,909
389
Lease liability - operating leases
18,209
18,407
12,650
10,629
-
Other liabilities
14,024
12,158
7,344
5,584
7,380
FHLB advances
-
-
18,000
50,000
50,000
Note payable - Line of Credit - Senior Debt
30,875
30,875
30,875
1,000
1,000
Note payable - Subordinated Debentures, net
80,348
80,298
80,367
80,507
-
Total liabilities
3,391,368
3,140,491
3,056,095
2,739,185
2,200,405
SHAREHOLDERS' EQUITY
Series A Convertible Non-Cumulative Preferred Stock
69
69
-
-
-
Series B Convertible Perpetual Preferred Stock
-
-
-
-
-
Common stock
13,610
13,600
13,543
13,524
13,482
Additional paid-in capital
318,033
317,798
250,413
249,775
249,202
Retained earnings
53,270
47,163
40,393
38,116
36,029
Accumulated other comprehensive (loss) income
(2,103)
(1,177)
(1,283)
887
1,393
Treasury stock, at cost
(1,099)
(1,099)
(1,099)
(1,099)
(1,099)
Total shareholders' equity
381,780
376,354
301,967
301,203
299,007
Total liabilities and shareholders' equity
$
3,773,148
$
3,516,845
$
3,358,062
$
3,040,388
$
2,499,412
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
Three Months Ended
Year Ended
2022
2021
2022
2021
(Dollars in thousands, except per share data)
December 31
September 30
June 30
March 31
December 31
December 31
December 31
INTEREST INCOME:
Loans, including fees
$
48,081
$
40,498
$
31,164
$
26,682
$
26,226
$
146,425
$
98,886
Investment securities available-for-sale
1,388
1,367
894
276
265
3,925
1,043
Federal funds sold and deposits in other banks
1,682
1,237
451
226
169
3,596
686
Total interest income
51,151
43,102
32,509
27,184
26,660
153,946
100,615
INTEREST EXPENSE:
Deposit accounts
15,682
9,727
3,443
1,844
1,913
30,696
8,526
FHLB advances and notes payable
3,318
2,020
1,328
130
128
6,796
1,536
Total interest expense
19,000
11,747
4,771
1,974
2,041
37,492
10,062
Net interest income
32,151
31,355
27,738
25,210
24,619
116,454
90,553
Provision for loan losses
1,950
2,900
3,350
4,000
6,100
12,200
9,923
Net interest income after provision for loan losses
30,201
28,455
24,388
21,210
18,519
104,254
80,630
NONINTEREST INCOME:
Service charges and fees
706
772
617
619
566
2,714
2,367
Gain on sale of SBA loans
123
729
98
-
411
950
586
Earnings on bank-owned life insurance
497
424
248
143
146
1,312
567
Derivative fees
117
313
123
706
820
1,259
820
Other
310
300
180
198
112
988
538
Total noninterest income
1,753
2,538
1,266
1,666
2,055
7,223
4,878
NONINTEREST EXPENSE:
Salaries and employee benefits
14,473
14,719
13,994
13,324
14,029
56,510
48,642
Data processing and network expense
837
1,256
932
922
786
3,947
3,060
Occupancy and equipment expense
2,591
2,232
1,830
1,873
1,557
8,526
5,367
Legal and professional
1,887
1,353
2,001
1,746
1,450
6,987
5,293
Loan operations and other real estate owned
144
284
282
278
275
988
1,963
Advertising and marketing
580
438
467
427
657
1,912
1,889
Telephone and communications
175
122
99
100
115
496
595
Software purchases and maintenance
295
318
201
198
248
1,012
852
Regulatory assessments
863
1,000
956
645
506
3,464
1,101
Loss on sale of other real estate owned
-
-
350
-
-
350
344
Other
782
1,006
1,661
668
464
4,117
1,919
Total noninterest expense
22,627
22,728
22,773
20,181
20,087
88,309
71,025
NET INCOME BEFORE INCOME TAX EXPENSE
9,327
8,265
2,881
2,695
487
23,168
14,483
Income tax expense
1,802
1,495
604
608
133
4,509
3,059
NET INCOME
$
7,525
$
6,770
$
2,277
$
2,087
$
354
$
18,659
$
11,424
EARNINGS PER COMMON SHARE:
Basic earnings per share
$
0.45
$
0.50
$
0.17
$
0.16
$
0.03
$
1.28
$
1.45
Diluted earnings per share
$
0.44
$
0.49
$
0.16
$
0.15
$
0.03
$
1.25
$
1.40
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
Three Months Ended
Year Ended
2022
2021
2022
2021
(Dollars in thousands, except share and per share data)
December 31
September 30
June 30
March 31
December 31
December 31
December 31
Earnings per share, basic
$
0.45
$
0.50
$
0.17
$
0.16
$
0.03
$
1.28
$
1.45
Earnings per share, diluted
$
0.44
$
0.49
$
0.16
$
0.15
$
0.03
$
1.25
$
1.40
Dividends on common stock
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Dividends on Series A Preferred Stock
$
20.44
$
-
$
-
$
-
$
-
$
20.44
$
-
Return on average assets (A)
0.84
%
0.78
%
0.29
%
0.32
%
0.06
%
0.58
%
0.55
%
Return on average common equity (A)
7.69
%
8.74
%
3.01
%
2.81
%
0.55
%
5.62
%
6.70
%
Return on average tangible common equity (A) (B)
8.19
%
9.32
%
3.22
%
3.00
%
0.59
%
6.00
%
7.55
%
Net interest margin (A) (C)
3.75
%
3.77
%
3.77
%
4.09
%
4.78
%
3.82
%
4.65
%
Efficiency ratio (D)
66.74
%
67.06
%
78.52
%
75.09
%
75.31
%
71.40
%
74.43
%
Capital Ratios
Third Coast Bancshares, Inc. (consolidated):
Total common equity to total assets
8.36
%
8.82
%
8.99
%
9.91
%
11.96
%
8.36
%
11.96
%
Tangible common equity to tangible assets (B)
7.90
%
8.32
%
8.47
%
9.33
%
11.28
%
7.90
%
11.28
%
Third Coast Bank, SSB:
Common equity tier 1 (to risk weighted assets)
12.95
%
13.04
%
11.60
%
12.36
%
12.63
%
12.95
%
12.63
%
Tier 1 capital (to risk weighted assets)
12.95
%
13.04
%
11.60
%
12.36
%
12.63
%
12.95
%
12.63
%
Total capital (to risk weighted assets)
13.79
%
13.87
%
12.40
%
13.17
%
13.54
%
13.79
%
13.54
%
Tier 1 capital (to average assets)
13.11
%
13.29
%
12.47
%
13.66
%
12.27
%
13.11
%
12.27
%
Other Data
Weighted average shares:
Basic
13,528,504
13,490,680
13,454,423
13,385,324
10,724,545
13,465,196
7,874,110
Diluted
13,760,076
13,678,962
13,822,522
13,755,026
11,156,037
13,754,610
8,138,824
Period end shares outstanding
13,531,736
13,521,826
13,464,093
13,445,782
13,403,324
13,531,736
13,403,324
Book value per share
$
23.32
$
22.93
$
22.43
$
22.40
$
22.31
$
23.32
$
22.31
Tangible book value per share (B)
$
21.90
$
21.51
$
21.00
$
20.97
$
20.87
$
21.90
$
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 pages 12 and 13 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
December 31, 2022
September 30, 2022
December 31, 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
$
170,463
$
1,388
3.23 %
$
180,701
$
1,367
3.00 %
$
42,677
$
265
2.46 %
Loans, gross
3,041,923
48,081
6.27 %
2,874,857
40,498
5.59 %
1,774,294
26,226
5.86 %
Federal funds sold and other interest-earning assets
185,887
1,682
3.59 %
243,471
1,237
2.02 %
226,197
169
0.30 %
Total interest-earning assets
3,398,273
51,151
5.97 %
3,299,029
43,102
5.18 %
2,043,168
26,660
5.18 %
Less allowance for loan losses
(29,563)
(27,504)
(17,130)
Total interest-earning assets, net of allowance
3,368,710
3,271,525
2,026,038
Noninterest-earning assets
203,834
184,514
187,770
Total assets
$
3,572,544
$
3,456,039
$
2,213,808
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits
$
2,354,990
$
15,682
2.64 %
$
2,446,443
$
9,727
1.58 %
$
1,485,059
$
1,913
0.51 %
Notes payable
111,199
1,761
6.28 %
111,213
1,617
5.77 %
1,126
11
3.88 %
FHLB advances
166,783
1,557
3.70 %
60,176
403
2.66 %
66,315
117
0.70 %
Total interest-bearing liabilities
2,632,972
19,000
2.86 %
2,617,832
11,747
1.78 %
1,552,500
2,041
0.52 %
Noninterest-bearing deposits
517,075
498,408
392,955
Other liabilities
41,226
31,707
10,770
Total liabilities
3,191,273
3,147,947
1,956,225
Shareholders' equity
381,271
308,092
257,583
Total liabilities and shareholders' equity
$
3,572,544
$
3,456,039
$
2,213,808
Net interest income
$
32,151
$
31,355
$
24,619
Net interest spread (1)
3.11 %
3.40 %
4.66 %
Net interest margin (2)
3.75 %
3.77 %
4.78 %
(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
(unaudited)
Year Ended
December 31, 2022
December 31, 2021
(Dollars in thousands)
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
$
129,507
$
3,925
3.03 %
$
31,251
$
1,043
3.34 %
Loans, gross
2,694,428
146,425
5.43 %
1,646,591
98,886
6.01 %
Federal funds sold and other interest-earning assets
223,781
3,596
1.61 %
267,983
686
0.26 %
Total interest-earning assets
3,047,716
153,946
5.05 %
1,945,825
100,615
5.17 %
Less allowance for loan losses
(25,600)
(14,198)
Total interest-earning assets, net of allowance
3,022,116
1,931,627
Noninterest-earning assets
178,135
132,825
Total assets
$
3,200,251
$
2,064,452
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits
$
2,377,079
$
30,696
1.29 %
$
1,421,757
$
8,526
0.60 %
Notes payable
77,317
4,605
5.96 %
22,329
1,091
4.89 %
FHLB advances
81,083
2,191
2.70 %
56,442
445
0.79 %
Total interest-bearing liabilities
2,535,479
37,492
1.48 %
1,500,528
10,062
0.67 %
Noninterest-bearing deposits
313,972
383,747
Other liabilities
27,115
9,547
Total liabilities
2,876,566
1,893,822
Shareholders' equity
323,685
170,630
Total liabilities and shareholders' equity
$
3,200,251
$
2,064,452
Net interest income
$
116,454
$
90,553
Net interest spread (1)
3.57 %
4.50 %
Net interest margin (2)
3.82 %
4.65 %
(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
(unaudited)
Three Months Ended
2022
2021
(Dollars in thousands)
December 31
September 30
June 30
March 31
December 31
Period-end Loan Portfolio:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied
$
493,791
$
529,046
$
508,864
$
477,573
$
383,941
Non-farm non-residential non-owner occupied
506,012
490,503
464,530
463,618
445,308
Residential
308,775
283,432
273,415
225,649
213,264
Construction, development & other
567,851
500,879
440,925
414,653
320,335
Farmland
22,820
22,770
23,895
13,467
9,934
Commercial & industrial
1,058,910
1,029,231
914,845
756,005
611,348
Consumer
3,872
3,728
3,706
3,304
4,001
Municipal and other
145,520
113,263
118,997
93,676
80,593
Total loans
$
3,107,551
$
2,972,852
$
2,749,177
$
2,447,945
$
2,068,724
Asset Quality:
Nonaccrual loans
$
10,963
$
9,439
$
9,806
$
9,896
$
10,030
Loans > 90 days and still accruing
518
98
387
40
278
Restructured loans--accruing
780
781
785
790
5,295
Total nonperforming loans
$
12,261
$
10,318
$
10,978
$
10,726
$
15,603
Other real estate owned
-
-
-
1,666
1,676
Total nonperforming assets
$
12,261
$
10,318
$
10,978
$
12,392
$
17,279
QTD Net charge-offs (recoveries)
$
708
$
457
$
(4)
$
(17)
$
2,376
Nonaccrual loans:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied
$
1,699
$
921
$
964
$
986
$
1,008
Non-farm non-residential non-owner occupied
296
309
323
334
346
Residential
513
111
116
121
127
Construction, development & other
40
227
232
238
244
Commercial & industrial
8,390
7,846
8,165
8,210
8,297
Consumer
20
20
-
-
-
Purchased credit impaired
5
5
6
7
8
Total nonaccrual loans
$
10,963
$
9,439
$
9,806
$
9,896
$
10,030
Asset Quality Ratios:
Nonperforming assets to total assets
0.32
%
0.29
%
0.33
%
0.41
%
0.69
%
Nonperforming loans to total loans
0.39
%
0.35
%
0.40
%
0.44
%
0.75
%
Allowance for loan losses to total loans
0.98
%
0.98
%
0.97
%
0.95
%
0.93
%
QTD Net charge-offs to average loans (annualized)
0.09
%
0.06
%
0.00
%
0.00
%
0.53
%
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, Tangible Common Equity to Tangible Assets Ratio, and Return on Average Tangible Common Equity" 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.
Management believes the following non-GAAP financial measures assist investors in understanding the financial condition of the company:
-
Tangible Common Equity. The most directly comparable GAAP financial measure for tangible common equity is total shareholders' equity. We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period of tangible common equity.
-
Tangible Book Value Per Share. The most directly comparable GAAP financial measure for tangible book value per share is book value per share. We believe that the tangible book value per share measure is important to many investors in the marketplace who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.
-
Tangible Common Equity to Tangible Assets. The most directly comparable GAAP financial measure for tangible common equity is total shareholders' equity, the most directly comparable GAAP financial measure for tangible assets is total assets, and the most directly comparable GAAP financial measure for tangible common equity to tangible assets is total shareholders' equity to total assets. We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period of tangible common equity to tangible assets, each exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing both total shareholders' equity and assets while not increasing our tangible common equity or tangible assets.
-
Return on Average Tangible Common Equity. The most directly comparable GAAP financial measure for average tangible common equity is average shareholders' equity, and the most directly comparable GAAP financial measure for return on average tangible common equity is return on average common equity. We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period of return on average tangible common equity, exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing average shareholders' equity while not increasing our tangible common equity.
The calculations of these non-GAAP financial measures are as follows:
Three Months Ended
Year Ended
2022
2021
2022
2021
(Dollars in thousands, except per share data)
December 31
September 30
June 30
March 31
December 31
December 31
December 31
Tangible Common Equity:
Total shareholders' equity
$
381,780
$
376,354
$
301,967
$
301,203
$
299,007
$
381,780
$
299,007
Less: Preferred stock including additional paid in capital
66,225
66,273
-
-
-
66,225
-
Total common equity
315,555
310,081
301,967
301,203
299,007
315,555
299,007
Less: Goodwill and core deposit intangibles, net
19,165
19,205
19,245
19,286
19,326
19,165
19,326
Tangible common equity
$
296,390
$
290,876
$
282,722
$
281,917
$
279,681
$
296,390
$
279,681
Common shares outstanding at end of period
13,531,736
13,521,826
13,464,093
13,445,782
13,403,324
13,531,736
13,403,324
Book Value Per Share
$
23.32
$
22.93
$
22.43
$
22.40
$
22.31
$
23.32
$
22.31
Tangible Book Value Per Share
$
21.90
$
21.51
$
21.00
$
20.97
$
20.87
$
21.90
$
20.87
Tangible Assets:
Total assets
$
3,773,148
$
3,516,845
$
3,358,062
$
3,040,388
$
2,499,412
$
3,773,148
$
2,499,412
Adjustments: Goodwill and core deposit intangibles, net
19,165
19,205
19,245
19,286
19,326
19,165
19,326
Tangible assets
$
3,753,983
$
3,497,640
$
3,338,817
$
3,021,102
$
2,480,086
$
3,753,983
$
2,480,086
Total Common Equity to Total Assets
8.36
%
8.82
%
8.99
%
9.91
%
11.96
%
8.36
%
11.96
%
Tangible Common Equity to Tangible Assets
7.90
%
8.32
%
8.47
%
9.33
%
11.28
%
7.90
%
11.28
%
Average Tangible Common Equity:
Average shareholders' equity
$
381,271
$
308,092
$
303,135
$
301,537
$
257,583
$
323,685
$
170,630
Less: Average preferred stock including additional paid in capital
66,329
720
-
-
-
16,900
-
Average common equity
314,942
307,372
303,135
301,537
257,583
306,785
170,630
Less: Average goodwill and core deposit intangibles, net
19,184
19,225
19,265
19,306
19,343
19,245
19,404
Average tangible common equity
$
295,758
$
288,147
$
283,870
$
282,231
$
238,240
$
287,540
$
151,226
Net Income
$
7,525
$
6,770
$
2,277
$
2,087
$
354
$
18,659
$
11,424
Less: Dividends paid on preferred stock
1,418
-
-
-
-
1,418
-
Net Income Available to Common Shareholders
$
6,107
$
6,770
$
2,277
$
2,087
$
354
$
17,241
$
11,424
Return on Average Common Equity
7.69
%
8.74
%
3.01
%
2.81
%
0.55
%
5.62
%
6.70
%
Return on Average Tangible Common Equity
8.19
%
9.32
%
3.22
%
3.00
%
0.59
%
6.00
%
7.55
%
View original content:https://www.prnewswire.com/news-releases/third-coast-bancshares-inc-reports-2022-fourth-quarter-and-full-year-financial-results-301731964.html
SOURCE Third Coast Bancshares
Gross Loans, Deposits and Total Assets grew over 50% for full year 2022 compared to full year 2021 results
HOUSTON, Jan. 26, 2023 /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 fourth quarter and full year financial results.
2022 Fourth Quarter Financial and Operational Highlights
- Loans held for investment grew $134.7 million to $3.11 billion as of December 31, 2022, or 4.5%, over the $2.97 billion reported as of September 30, 2022.
- Deposits reached $3.24 billion as of December 31, 2022, an increase of $251.8 million, or 8.4%, over the $2.98 billion reported as of September 30, 2022.
- Total assets reached $3.77 billion as of December 31, 2022, an increase of $256.3 million, or 7.3%, over the $3.52 billion reported as of September 30, 2022.
- Net income for the fourth quarter 2022 totaled $7.5 million compared to $6.8 million for the third quarter of 2022.
- Book value per share and tangible book value per share(1) increased to $23.32 and $21.90, respectively, at December 31, 2022 compared to $22.93 and $21.51, respectively, at September 30, 2022.
- Opened a branch location in San Antonio, Texas.
2022 Full Year Financial and Operational Highlights
- Loans held for investment grew $1.04 billion to $3.11 billion as of December 31, 2022, or 50.2%, over the $2.07 billion reported as of December 31, 2021.
- Deposits reached $3.24 billion as of December 31, 2022, an increase of $1.09 billion, or 51.1%, over the $2.14 billion reported as of December 31, 2021.
- Total assets reached $3.77 billion as of December 31, 2022, an increase of $1.27 billion, or 51.0%, more than the $2.50 billion reported as of December 31, 2021.
- Net income totaled $18.7 million and $11.4 million for the years ended December 31, 2022 and 2021, respectively, an increase of 63.3%.
- Book value per share and tangible book value per share(1) increased to $23.32 and $21.90, respectively, at December 31, 2022 compared to $22.31 and $20.87, respectively, at December 31, 2021.
- Opened four locations during 2022, including in Fort Worth, Georgetown, Kingwood, and San Antonio, Texas, totaling 16 branch locations.
(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. |
"A little over one year ago, on November 9, 2021, we marked an important milestone in our Company's history by successfully completing our initial public offering," stated Bart Caraway, Third Coast's Chairman, President and Chief Executive Officer. "I am delighted to report that we have had a remarkable first full year as a public company; Third Coast reported over 50% growth in gross loans, deposits and total assets in 2022 when compared to 2021. We focused on driving revenue higher while keeping expenses low throughout the year, which resulted in improved operational leverage.
"Additionally, we exceeded our internal margin, return on asset and earnings expectations during the fourth quarter and continue to be very confident about our future. Our asset quality remains strong and our earning metrics continue to improve. Looking ahead, we will continue to focus on operating performance and executing the Company's profitable business strategy," concluded Mr. Caraway.
Loan Portfolio and Composition
During the fourth quarter of 2022, gross loans increased to $3.11 billion as of December 31, 2022, an increase of $134.7 million, or 4.5%, from $2.97 billion as of September 30, 2022, and an increase of $1.04 billion, or 50.2%, from $2.07 billion as of December 31, 2021. The loan growth was well diversified with real estate loans up $72.6 million and commercial loans up $29.7 million from September 30, 2022. On a full year basis, real estate loans grew by $526.5 million and commercial loans grew by $447.6 million from 2021.
Asset Quality
Asset quality improved year-over-year with non-performing assets decreasing to $12.3 million as of December 31, 2022, or 29.0%, from $17.3 million as of December 31, 2021. Non-performing assets at December 31, 2022 increased $1.9 million, or 18.8%, from $10.3 million as of September 30, 2022. The provision for credit losses recorded for the fourth quarter of 2022 was $2.0 million, which served to increase the allowance to $30.4 million, or 0.98% of the $3.11 billion in gross loans outstanding as of December 31, 2022. Provision expense for the fourth quarter of 2022 related primarily to provisioning for new loans.
As of December 31, 2022, the nonperforming loans to loans held for investment ratio remained low at 0.39%, which increased slightly from 0.35% as of September 30, 2022 and decreased from 0.75% as of December 31, 2021. During the three months ended December 31, 2022 and 2021, net charge-offs were $708,000 and $2.4 million, respectively. On a full year basis, net charge-offs were $1.1 million and $2.6 million in 2022 and 2021, respectively.
Deposits and Composition
Deposits totaled $3.24 billion as of December 31, 2022, an increase of 8.4% from $2.98 billion as of September 30, 2022, and an increase of 51.1% from $2.14 billion as of December 31, 2021. Noninterest-bearing demand deposits decreased from $517.3 million as of September 30, 2022 to $486.1 million as of December 31, 2022, and decreased $45.3 million, or 8.5%, from December 31, 2021. Noninterest-bearing demand deposits represented 15.0% of total deposits as of December 31, 2022, down from 17.3% of total deposits as of September 30, 2022, and 24.8% of total deposits as of December 31, 2021. As of December 31, 2022, interest-bearing demand deposits increased $270.1 million, or 12.1%, and time deposits increased $14.5 million, or 7.2%, from September 30, 2022. The increase in fourth quarter deposits was offset by a decrease in savings accounts of $1.6 million, or 4.3%, from September 30, 2022.
The average cost of deposits was 2.17% for the fourth quarter of 2022, representing a 86 basis point increase from the third quarter of 2022 and a 177 basis point increase from the fourth quarter of 2021 due primarily to the increase in rates paid on interest-bearing demand deposits.
Net Interest Margin and Net Interest Income
The net interest margin for the fourth quarter of 2022 was 3.75% compared to 3.77% for the third quarter of 2022 and 4.78% for the fourth quarter of 2021. The yield on loans for the fourth quarter of 2022 was 6.27% compared to 5.59% for the third quarter of 2022 and 5.86% for the fourth quarter of 2021. The increase in yield on loans during the fourth quarter of 2022 was primarily due to the increase in the Prime Rate.
Net interest income totaled $32.2 million for the fourth quarter of 2022, an increase of 2.5% from $31.4 million for the third quarter of 2022. Interest income totaled $51.2 million for the fourth quarter of 2022, an increase of 18.7% from $43.1 million for the third quarter of 2022. Interest and fees on loans increased $7.6 million, or 18.7%, compared to the third quarter of 2022, and increased $21.9 million, or 83.3%, from the fourth quarter of 2021. Interest expense was $19.0 million for the fourth quarter of 2022, an increase of $7.3 million, or 61.7% from $11.7 million for the third quarter of 2022 and an increase of $17.0 million, or 830.9% from $2.0 million for the fourth quarter of 2021. The increase in interest expense during the fourth quarter of 2022 was primarily due to interest-bearing deposit growth and increases in interest rates paid on interest-bearing deposit accounts and FHLB advances. The increase in interest expense from the fourth quarter of 2021 is primarily due to interest-bearing deposit growth, issuance of subordinated debt in March 2022, and increases in rates paid on interest-bearing deposit accounts, FHLB advances, and line of credit advances.
Noninterest Income and Noninterest Expense
Noninterest income totaled $1.8 million for the fourth quarter of 2022, compared to $2.5 million for the third quarter of 2022, and $2.1 million for the fourth quarter of 2021. Gains on the sales of guaranteed portions of SBA loans decreased from $729,000 for the third quarter of 2022 to $123,000 for the fourth quarter 2022. In addition, derivative fees decreased from $313,000 for the third quarter of 2022 to $117,000 for the fourth quarter of 2022.
Noninterest expense totaled $22.6 million for the fourth quarter of 2022 down from $22.7 million for the third quarter of 2022 and up from $20.1 million for the fourth quarter of 2021. The year-over-year increase was primarily attributed to increased salary expenses related to additional employees hired in 2022 and administrative expenses related to opening of four branches during 2022. The employee headcount increased from 334 as of December 31, 2021 to 368 as of December 31, 2022. In addition, the year-over-year increase in legal and professional fees related to increased regulatory requirements resulting in additional audit, consulting and legal expenses and increase in regulatory assessment expense related to increased assessment rates and total asset growth.
The efficiency ratio was 66.74% for the fourth quarter of 2022, compared to 67.06% for the third quarter of 2022, and 75.31% for the fourth quarter of 2021. The improvement in the efficiency ratio was primarily due to the increase in interest and fees on loans while maintaining noninterest expense consistent with prior quarters.
Net Income and Earnings Per Share
Net income totaled $7.5 million for the fourth quarter of 2022, compared to $6.8 million for the third quarter of 2022. Net income available to common shareholders totaled $6.1 million for the fourth quarter. Dividends on Series A Preferred Stock issued on September 30, 2022 totaled $1.4 million for the fourth quarter of 2022. Basic earnings per share and diluted earnings per share were $0.45 per share and $0.44 per share, respectively, in the fourth quarter of 2022 compared to $0.50 per share and $0.49 per share, respectively, in the third quarter of 2022.
Earnings Conference Call
Third Coast has scheduled a conference call to discuss 2022 fourth quarter and fiscal year results, which will be broadcast live over the Internet, on Friday, January 27, 2023, 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 Inc. 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 February 3, 2023, and may be accessed by dialing 201-612-7415 and using passcode 13735402#. 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 16 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, and Section 21E of the Securities Exchange Act of 1934, 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, Tangible Common Equity to Tangible Assets Ratio and Return on Average Tangible Common Equity," 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.
Contact:
Ken Dennard / Natalie Hairston
Dennad Lascar Investor Relations
(713) 529-6600
TCBX@dennardlascar.com
Third Coast Bancshares, Inc. and Subsidiary |
|||||||||||||||||||||
2022 |
2021 |
||||||||||||||||||||
(Dollars in thousands) |
December 31 |
September 30 |
June 30 |
March 31 |
December 31 |
||||||||||||||||
ASSETS |
|||||||||||||||||||||
Cash and cash equivalents: |
|||||||||||||||||||||
Cash and due from banks |
$ |
329,864 |
$ |
216,623 |
$ |
317,462 |
$ |
369,782 |
$ |
326,733 |
|||||||||||
Federal funds sold |
2,150 |
1,225 |
2,741 |
1,538 |
292 |
||||||||||||||||
Total cash and cash equivalents |
332,014 |
217,848 |
320,203 |
371,320 |
327,025 |
||||||||||||||||
Interest bearing time deposits in other banks |
- |
132 |
132 |
132 |
131 |
||||||||||||||||
Investment securities available-for-sale |
176,067 |
160,437 |
157,261 |
126,218 |
26,432 |
||||||||||||||||
Loans held for investment |
3,107,551 |
2,972,852 |
2,749,177 |
2,447,945 |
2,068,724 |
||||||||||||||||
Less: allowance for loan and lease loss |
(30,351) |
(29,109) |
(26,666) |
(23,312) |
(19,295) |
||||||||||||||||
Loans, net |
3,077,200 |
2,943,743 |
2,722,511 |
2,424,633 |
2,049,429 |
||||||||||||||||
Accrued interest receivable |
18,340 |
16,246 |
12,568 |
12,648 |
10,228 |
||||||||||||||||
Premises and equipment, net |
28,662 |
25,449 |
22,888 |
20,846 |
19,045 |
||||||||||||||||
Other real estate owned |
- |
- |
- |
1,666 |
1,676 |
||||||||||||||||
Bank-owned life insurance |
60,761 |
60,263 |
51,919 |
26,671 |
26,528 |
||||||||||||||||
Non-marketable securities, at cost |
15,405 |
27,136 |
15,213 |
11,327 |
7,527 |
||||||||||||||||
Deferred tax asset, net |
6,303 |
8,097 |
7,179 |
4,258 |
4,123 |
||||||||||||||||
Fair value hedge assets |
9,213 |
11,508 |
6,892 |
3,873 |
389 |
||||||||||||||||
Right-of-use assets |
17,872 |
18,266 |
12,648 |
10,697 |
- |
||||||||||||||||
Core Deposit Intangible, net |
1,131 |
1,171 |
1,211 |
1,252 |
1,292 |
||||||||||||||||
Goodwill |
18,034 |
18,034 |
18,034 |
18,034 |
18,034 |
||||||||||||||||
Other assets |
12,146 |
8,515 |
9,403 |
6,813 |
7,553 |
||||||||||||||||
Total assets |
$ |
3,773,148 |
$ |
3,516,845 |
$ |
3,358,062 |
$ |
3,040,388 |
$ |
2,499,412 |
|||||||||||
LIABILITIES |
|||||||||||||||||||||
Deposits: |
|||||||||||||||||||||
Noninterest bearing |
$ |
486,114 |
$ |
517,265 |
$ |
519,614 |
$ |
931,622 |
$ |
531,401 |
|||||||||||
Interest bearing |
2,750,032 |
2,467,049 |
2,378,650 |
1,655,547 |
1,609,798 |
||||||||||||||||
Total deposits |
3,236,146 |
2,984,314 |
2,898,264 |
2,587,169 |
2,141,199 |
||||||||||||||||
Accrued interest payable |
2,545 |
2,925 |
1,683 |
387 |
437 |
||||||||||||||||
Fair value hedge liabilities |
9,221 |
11,514 |
6,912 |
3,909 |
389 |
||||||||||||||||
Lease liability - operating leases |
18,209 |
18,407 |
12,650 |
10,629 |
- |
||||||||||||||||
Other liabilities |
14,024 |
12,158 |
7,344 |
5,584 |
7,380 |
||||||||||||||||
FHLB advances |
- |
- |
18,000 |
50,000 |
50,000 |
||||||||||||||||
Note payable - Line of Credit - Senior Debt |
30,875 |
30,875 |
30,875 |
1,000 |
1,000 |
||||||||||||||||
Note payable - Subordinated Debentures, net |
80,348 |
80,298 |
80,367 |
80,507 |
- |
||||||||||||||||
Total liabilities |
3,391,368 |
3,140,491 |
3,056,095 |
2,739,185 |
2,200,405 |
||||||||||||||||
SHAREHOLDERS' EQUITY |
|||||||||||||||||||||
Series A Convertible Non-Cumulative Preferred Stock |
69 |
69 |
- |
- |
- |
||||||||||||||||
Series B Convertible Perpetual Preferred Stock |
- |
- |
- |
- |
- |
||||||||||||||||
Common stock |
13,610 |
13,600 |
13,543 |
13,524 |
13,482 |
||||||||||||||||
Additional paid-in capital |
318,033 |
317,798 |
250,413 |
249,775 |
249,202 |
||||||||||||||||
Retained earnings |
53,270 |
47,163 |
40,393 |
38,116 |
36,029 |
||||||||||||||||
Accumulated other comprehensive (loss) income |
(2,103) |
(1,177) |
(1,283) |
887 |
1,393 |
||||||||||||||||
Treasury stock, at cost |
(1,099) |
(1,099) |
(1,099) |
(1,099) |
(1,099) |
||||||||||||||||
Total shareholders' equity |
381,780 |
376,354 |
301,967 |
301,203 |
299,007 |
||||||||||||||||
Total liabilities and shareholders' equity |
$ |
3,773,148 |
$ |
3,516,845 |
$ |
3,358,062 |
$ |
3,040,388 |
$ |
2,499,412 |
Third Coast Bancshares, Inc. and Subsidiary |
|||||||||||||||||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||||||||||||||||
2022 |
2021 |
2022 |
2021 |
||||||||||||||||||||||||||
(Dollars in thousands, except per share data) |
December 31 |
September 30 |
June 30 |
March 31 |
December 31 |
December 31 |
December 31 |
||||||||||||||||||||||
INTEREST INCOME: |
|||||||||||||||||||||||||||||
Loans, including fees |
$ |
48,081 |
$ |
40,498 |
$ |
31,164 |
$ |
26,682 |
$ |
26,226 |
$ |
146,425 |
$ |
98,886 |
|||||||||||||||
Investment securities available-for-sale |
1,388 |
1,367 |
894 |
276 |
265 |
3,925 |
1,043 |
||||||||||||||||||||||
Federal funds sold and deposits in other banks |
1,682 |
1,237 |
451 |
226 |
169 |
3,596 |
686 |
||||||||||||||||||||||
Total interest income |
51,151 |
43,102 |
32,509 |
27,184 |
26,660 |
153,946 |
100,615 |
||||||||||||||||||||||
INTEREST EXPENSE: |
|||||||||||||||||||||||||||||
Deposit accounts |
15,682 |
9,727 |
3,443 |
1,844 |
1,913 |
30,696 |
8,526 |
||||||||||||||||||||||
FHLB advances and notes payable |
3,318 |
2,020 |
1,328 |
130 |
128 |
6,796 |
1,536 |
||||||||||||||||||||||
Total interest expense |
19,000 |
11,747 |
4,771 |
1,974 |
2,041 |
37,492 |
10,062 |
||||||||||||||||||||||
Net interest income |
32,151 |
31,355 |
27,738 |
25,210 |
24,619 |
116,454 |
90,553 |
||||||||||||||||||||||
Provision for loan losses |
1,950 |
2,900 |
3,350 |
4,000 |
6,100 |
12,200 |
9,923 |
||||||||||||||||||||||
Net interest income after provision for loan losses |
30,201 |
28,455 |
24,388 |
21,210 |
18,519 |
104,254 |
80,630 |
||||||||||||||||||||||
NONINTEREST INCOME: |
|||||||||||||||||||||||||||||
Service charges and fees |
706 |
772 |
617 |
619 |
566 |
2,714 |
2,367 |
||||||||||||||||||||||
Gain on sale of SBA loans |
123 |
729 |
98 |
- |
411 |
950 |
586 |
||||||||||||||||||||||
Earnings on bank-owned life insurance |
497 |
424 |
248 |
143 |
146 |
1,312 |
567 |
||||||||||||||||||||||
Derivative fees |
117 |
313 |
123 |
706 |
820 |
1,259 |
820 |
||||||||||||||||||||||
Other |
310 |
300 |
180 |
198 |
112 |
988 |
538 |
||||||||||||||||||||||
Total noninterest income |
1,753 |
2,538 |
1,266 |
1,666 |
2,055 |
7,223 |
4,878 |
||||||||||||||||||||||
NONINTEREST EXPENSE: |
|||||||||||||||||||||||||||||
Salaries and employee benefits |
14,473 |
14,719 |
13,994 |
13,324 |
14,029 |
56,510 |
48,642 |
||||||||||||||||||||||
Data processing and network expense |
837 |
1,256 |
932 |
922 |
786 |
3,947 |
3,060 |
||||||||||||||||||||||
Occupancy and equipment expense |
2,591 |
2,232 |
1,830 |
1,873 |
1,557 |
8,526 |
5,367 |
||||||||||||||||||||||
Legal and professional |
1,887 |
1,353 |
2,001 |
1,746 |
1,450 |
6,987 |
5,293 |
||||||||||||||||||||||
Loan operations and other real estate owned |
144 |
284 |
282 |
278 |
275 |
988 |
1,963 |
||||||||||||||||||||||
Advertising and marketing |
580 |
438 |
467 |
427 |
657 |
1,912 |
1,889 |
||||||||||||||||||||||
Telephone and communications |
175 |
122 |
99 |
100 |
115 |
496 |
595 |
||||||||||||||||||||||
Software purchases and maintenance |
295 |
318 |
201 |
198 |
248 |
1,012 |
852 |
||||||||||||||||||||||
Regulatory assessments |
863 |
1,000 |
956 |
645 |
506 |
3,464 |
1,101 |
||||||||||||||||||||||
Loss on sale of other real estate owned |
- |
- |
350 |
- |
- |
350 |
344 |
||||||||||||||||||||||
Other |
782 |
1,006 |
1,661 |
668 |
464 |
4,117 |
1,919 |
||||||||||||||||||||||
Total noninterest expense |
22,627 |
22,728 |
22,773 |
20,181 |
20,087 |
88,309 |
71,025 |
||||||||||||||||||||||
NET INCOME BEFORE INCOME TAX EXPENSE |
9,327 |
8,265 |
2,881 |
2,695 |
487 |
23,168 |
14,483 |
||||||||||||||||||||||
Income tax expense |
1,802 |
1,495 |
604 |
608 |
133 |
4,509 |
3,059 |
||||||||||||||||||||||
NET INCOME |
$ |
7,525 |
$ |
6,770 |
$ |
2,277 |
$ |
2,087 |
$ |
354 |
$ |
18,659 |
$ |
11,424 |
|||||||||||||||
EARNINGS PER COMMON SHARE: |
|||||||||||||||||||||||||||||
Basic earnings per share |
$ |
0.45 |
$ |
0.50 |
$ |
0.17 |
$ |
0.16 |
$ |
0.03 |
$ |
1.28 |
$ |
1.45 |
|||||||||||||||
Diluted earnings per share |
$ |
0.44 |
$ |
0.49 |
$ |
0.16 |
$ |
0.15 |
$ |
0.03 |
$ |
1.25 |
$ |
1.40 |
Third Coast Bancshares, Inc. and Subsidiary | ||||||||||||||||||||||||||||
Three Months Ended |
Year Ended |
|||||||||||||||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||||||||||||||
(Dollars in thousands, except share and per share data) |
December 31 |
September 30 |
June 30 |
March 31 |
December 31 |
December 31 |
December 31 |
|||||||||||||||||||||
Earnings per share, basic |
$ |
0.45 |
$ |
0.50 |
$ |
0.17 |
$ |
0.16 |
$ |
0.03 |
$ |
1.28 |
$ |
1.45 |
||||||||||||||
Earnings per share, diluted |
$ |
0.44 |
$ |
0.49 |
$ |
0.16 |
$ |
0.15 |
$ |
0.03 |
$ |
1.25 |
$ |
1.40 |
||||||||||||||
Dividends on common stock |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
||||||||||||||
Dividends on Series A Preferred Stock |
$ |
20.44 |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
20.44 |
$ |
- |
||||||||||||||
Return on average assets (A) |
0.84 |
% |
0.78 |
% |
0.29 |
% |
0.32 |
% |
0.06 |
% |
0.58 |
% |
0.55 |
% |
||||||||||||||
Return on average common equity (A) |
7.69 |
% |
8.74 |
% |
3.01 |
% |
2.81 |
% |
0.55 |
% |
5.62 |
% |
6.70 |
% |
||||||||||||||
Return on average tangible common equity (A) (B) |
8.19 |
% |
9.32 |
% |
3.22 |
% |
3.00 |
% |
0.59 |
% |
6.00 |
% |
7.55 |
% |
||||||||||||||
Net interest margin (A) (C) |
3.75 |
% |
3.77 |
% |
3.77 |
% |
4.09 |
% |
4.78 |
% |
3.82 |
% |
4.65 |
% |
||||||||||||||
Efficiency ratio (D) |
66.74 |
% |
67.06 |
% |
78.52 |
% |
75.09 |
% |
75.31 |
% |
71.40 |
% |
74.43 |
% |
||||||||||||||
Capital Ratios |
||||||||||||||||||||||||||||
Third Coast Bancshares, Inc. (consolidated): |
||||||||||||||||||||||||||||
Total common equity to total assets |
8.36 |
% |
8.82 |
% |
8.99 |
% |
9.91 |
% |
11.96 |
% |
8.36 |
% |
11.96 |
% |
||||||||||||||
Tangible common equity to tangible assets (B) |
7.90 |
% |
8.32 |
% |
8.47 |
% |
9.33 |
% |
11.28 |
% |
7.90 |
% |
11.28 |
% |
||||||||||||||
Third Coast Bank, SSB: |
||||||||||||||||||||||||||||
Common equity tier 1 (to risk weighted assets) |
12.95 |
% |
13.04 |
% |
11.60 |
% |
12.36 |
% |
12.63 |
% |
12.95 |
% |
12.63 |
% |
||||||||||||||
Tier 1 capital (to risk weighted assets) |
12.95 |
% |
13.04 |
% |
11.60 |
% |
12.36 |
% |
12.63 |
% |
12.95 |
% |
12.63 |
% |
||||||||||||||
Total capital (to risk weighted assets) |
13.79 |
% |
13.87 |
% |
12.40 |
% |
13.17 |
% |
13.54 |
% |
13.79 |
% |
13.54 |
% |
||||||||||||||
Tier 1 capital (to average assets) |
13.11 |
% |
13.29 |
% |
12.47 |
% |
13.66 |
% |
12.27 |
% |
13.11 |
% |
12.27 |
% |
||||||||||||||
Other Data |
||||||||||||||||||||||||||||
Weighted average shares: |
||||||||||||||||||||||||||||
Basic |
13,528,504 |
13,490,680 |
13,454,423 |
13,385,324 |
10,724,545 |
13,465,196 |
7,874,110 |
|||||||||||||||||||||
Diluted |
13,760,076 |
13,678,962 |
13,822,522 |
13,755,026 |
11,156,037 |
13,754,610 |
8,138,824 |
|||||||||||||||||||||
Period end shares outstanding |
13,531,736 |
13,521,826 |
13,464,093 |
13,445,782 |
13,403,324 |
13,531,736 |
13,403,324 |
|||||||||||||||||||||
Book value per share |
$ |
23.32 |
$ |
22.93 |
$ |
22.43 |
$ |
22.40 |
$ |
22.31 |
$ |
23.32 |
$ |
22.31 |
||||||||||||||
Tangible book value per share (B) |
$ |
21.90 |
$ |
21.51 |
$ |
21.00 |
$ |
20.97 |
$ |
20.87 |
$ |
21.90 |
$ |
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 pages 12 and 13 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 | ||||||||||||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||||||||||||
December 31, 2022 |
September 30, 2022 |
December 31, 2021 |
||||||||||||||||||||||||||||
(Dollars in thousands) |
Average |
Interest |
Average |
Average |
Interest |
Average |
Average |
Interest |
Average |
|||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||
Interest-earnings assets: |
||||||||||||||||||||||||||||||
Investment securities |
$ |
170,463 |
$ |
1,388 |
3.23 % |
$ |
180,701 |
$ |
1,367 |
3.00 % |
$ |
42,677 |
$ |
265 |
2.46 % |
|||||||||||||||
Loans, gross |
3,041,923 |
48,081 |
6.27 % |
2,874,857 |
40,498 |
5.59 % |
1,774,294 |
26,226 |
5.86 % |
|||||||||||||||||||||
Federal funds sold and other interest-earning assets |
185,887 |
1,682 |
3.59 % |
243,471 |
1,237 |
2.02 % |
226,197 |
169 |
0.30 % |
|||||||||||||||||||||
Total interest-earning assets |
3,398,273 |
51,151 |
5.97 % |
3,299,029 |
43,102 |
5.18 % |
2,043,168 |
26,660 |
5.18 % |
|||||||||||||||||||||
Less allowance for loan losses |
(29,563) |
(27,504) |
(17,130) |
|||||||||||||||||||||||||||
Total interest-earning assets, net of allowance |
3,368,710 |
3,271,525 |
2,026,038 |
|||||||||||||||||||||||||||
Noninterest-earning assets |
203,834 |
184,514 |
187,770 |
|||||||||||||||||||||||||||
Total assets |
$ |
3,572,544 |
$ |
3,456,039 |
$ |
2,213,808 |
||||||||||||||||||||||||
Liabilities and Shareholders' Equity |
||||||||||||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||||||||
Interest-bearing deposits |
$ |
2,354,990 |
$ |
15,682 |
2.64 % |
$ |
2,446,443 |
$ |
9,727 |
1.58 % |
$ |
1,485,059 |
$ |
1,913 |
0.51 % |
|||||||||||||||
Notes payable |
111,199 |
1,761 |
6.28 % |
111,213 |
1,617 |
5.77 % |
1,126 |
11 |
3.88 % |
|||||||||||||||||||||
FHLB advances |
166,783 |
1,557 |
3.70 % |
60,176 |
403 |
2.66 % |
66,315 |
117 |
0.70 % |
|||||||||||||||||||||
Total interest-bearing liabilities |
2,632,972 |
19,000 |
2.86 % |
2,617,832 |
11,747 |
1.78 % |
1,552,500 |
2,041 |
0.52 % |
|||||||||||||||||||||
Noninterest-bearing deposits |
517,075 |
498,408 |
392,955 |
|||||||||||||||||||||||||||
Other liabilities |
41,226 |
31,707 |
10,770 |
|||||||||||||||||||||||||||
Total liabilities |
3,191,273 |
3,147,947 |
1,956,225 |
|||||||||||||||||||||||||||
Shareholders' equity |
381,271 |
308,092 |
257,583 |
|||||||||||||||||||||||||||
Total liabilities and shareholders' equity |
$ |
3,572,544 |
$ |
3,456,039 |
$ |
2,213,808 |
||||||||||||||||||||||||
Net interest income |
$ |
32,151 |
$ |
31,355 |
$ |
24,619 |
||||||||||||||||||||||||
Net interest spread (1) |
3.11 % |
3.40 % |
4.66 % |
|||||||||||||||||||||||||||
Net interest margin (2) |
3.75 % |
3.77 % |
4.78 % |
(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 | ||||||||||||||||||||
Year Ended |
||||||||||||||||||||
December 31, 2022 |
December 31, 2021 |
|||||||||||||||||||
(Dollars in thousands) |
Average |
Interest |
Average |
Average |
Interest |
Average |
||||||||||||||
Assets |
||||||||||||||||||||
Interest-earnings assets: |
||||||||||||||||||||
Investment securities |
$ |
129,507 |
$ |
3,925 |
3.03 % |
$ |
31,251 |
$ |
1,043 |
3.34 % |
||||||||||
Loans, gross |
2,694,428 |
146,425 |
5.43 % |
1,646,591 |
98,886 |
6.01 % |
||||||||||||||
Federal funds sold and other interest-earning assets |
223,781 |
3,596 |
1.61 % |
267,983 |
686 |
0.26 % |
||||||||||||||
Total interest-earning assets |
3,047,716 |
153,946 |
5.05 % |
1,945,825 |
100,615 |
5.17 % |
||||||||||||||
Less allowance for loan losses |
(25,600) |
(14,198) |
||||||||||||||||||
Total interest-earning assets, net of allowance |
3,022,116 |
1,931,627 |
||||||||||||||||||
Noninterest-earning assets |
178,135 |
132,825 |
||||||||||||||||||
Total assets |
$ |
3,200,251 |
$ |
2,064,452 |
||||||||||||||||
Liabilities and Shareholders' Equity |
||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||
Interest-bearing deposits |
$ |
2,377,079 |
$ |
30,696 |
1.29 % |
$ |
1,421,757 |
$ |
8,526 |
0.60 % |
||||||||||
Notes payable |
77,317 |
4,605 |
5.96 % |
22,329 |
1,091 |
4.89 % |
||||||||||||||
FHLB advances |
81,083 |
2,191 |
2.70 % |
56,442 |
445 |
0.79 % |
||||||||||||||
Total interest-bearing liabilities |
2,535,479 |
37,492 |
1.48 % |
1,500,528 |
10,062 |
0.67 % |
||||||||||||||
Noninterest-bearing deposits |
313,972 |
383,747 |
||||||||||||||||||
Other liabilities |
27,115 |
9,547 |
||||||||||||||||||
Total liabilities |
2,876,566 |
1,893,822 |
||||||||||||||||||
Shareholders' equity |
323,685 |
170,630 |
||||||||||||||||||
Total liabilities and shareholders' equity |
$ |
3,200,251 |
$ |
2,064,452 |
||||||||||||||||
Net interest income |
$ |
116,454 |
$ |
90,553 |
||||||||||||||||
Net interest spread (1) |
3.57 % |
4.50 % |
||||||||||||||||||
Net interest margin (2) |
3.82 % |
4.65 % |
(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 |
|||||||||||||||||||||
Three Months Ended |
|||||||||||||||||||||
2022 |
2021 |
||||||||||||||||||||
(Dollars in thousands) |
December 31 |
September 30 |
June 30 |
March 31 |
December 31 |
||||||||||||||||
Period-end Loan Portfolio: |
|||||||||||||||||||||
Real estate loans: |
|||||||||||||||||||||
Commercial real estate: |
|||||||||||||||||||||
Non-farm non-residential owner occupied |
$ |
493,791 |
$ |
529,046 |
$ |
508,864 |
$ |
477,573 |
$ |
383,941 |
|||||||||||
Non-farm non-residential non-owner occupied |
506,012 |
490,503 |
464,530 |
463,618 |
445,308 |
||||||||||||||||
Residential |
308,775 |
283,432 |
273,415 |
225,649 |
213,264 |
||||||||||||||||
Construction, development & other |
567,851 |
500,879 |
440,925 |
414,653 |
320,335 |
||||||||||||||||
Farmland |
22,820 |
22,770 |
23,895 |
13,467 |
9,934 |
||||||||||||||||
Commercial & industrial |
1,058,910 |
1,029,231 |
914,845 |
756,005 |
611,348 |
||||||||||||||||
Consumer |
3,872 |
3,728 |
3,706 |
3,304 |
4,001 |
||||||||||||||||
Municipal and other |
145,520 |
113,263 |
118,997 |
93,676 |
80,593 |
||||||||||||||||
Total loans |
$ |
3,107,551 |
$ |
2,972,852 |
$ |
2,749,177 |
$ |
2,447,945 |
$ |
2,068,724 |
|||||||||||
Asset Quality: |
|||||||||||||||||||||
Nonaccrual loans |
$ |
10,963 |
$ |
9,439 |
$ |
9,806 |
$ |
9,896 |
$ |
10,030 |
|||||||||||
Loans > 90 days and still accruing |
518 |
98 |
387 |
40 |
278 |
||||||||||||||||
Restructured loans--accruing |
780 |
781 |
785 |
790 |
5,295 |
||||||||||||||||
Total nonperforming loans |
$ |
12,261 |
$ |
10,318 |
$ |
10,978 |
$ |
10,726 |
$ |
15,603 |
|||||||||||
Other real estate owned |
- |
- |
- |
1,666 |
1,676 |
||||||||||||||||
Total nonperforming assets |
$ |
12,261 |
$ |
10,318 |
$ |
10,978 |
$ |
12,392 |
$ |
17,279 |
|||||||||||
QTD Net charge-offs (recoveries) |
$ |
708 |
$ |
457 |
$ |
(4) |
$ |
(17) |
$ |
2,376 |
|||||||||||
Nonaccrual loans: |
|||||||||||||||||||||
Real estate loans: |
|||||||||||||||||||||
Commercial real estate: |
|||||||||||||||||||||
Non-farm non-residential owner occupied |
$ |
1,699 |
$ |
921 |
$ |
964 |
$ |
986 |
$ |
1,008 |
|||||||||||
Non-farm non-residential non-owner occupied |
296 |
309 |
323 |
334 |
346 |
||||||||||||||||
Residential |
513 |
111 |
116 |
121 |
127 |
||||||||||||||||
Construction, development & other |
40 |
227 |
232 |
238 |
244 |
||||||||||||||||
Commercial & industrial |
8,390 |
7,846 |
8,165 |
8,210 |
8,297 |
||||||||||||||||
Consumer |
20 |
20 |
- |
- |
- |
||||||||||||||||
Purchased credit impaired |
5 |
5 |
6 |
7 |
8 |
||||||||||||||||
Total nonaccrual loans |
$ |
10,963 |
$ |
9,439 |
$ |
9,806 |
$ |
9,896 |
$ |
10,030 |
|||||||||||
Asset Quality Ratios: |
|||||||||||||||||||||
Nonperforming assets to total assets |
0.32 |
% |
0.29 |
% |
0.33 |
% |
0.41 |
% |
0.69 |
% |
|||||||||||
Nonperforming loans to total loans |
0.39 |
% |
0.35 |
% |
0.40 |
% |
0.44 |
% |
0.75 |
% |
|||||||||||
Allowance for loan losses to total loans |
0.98 |
% |
0.98 |
% |
0.97 |
% |
0.95 |
% |
0.93 |
% |
|||||||||||
QTD Net charge-offs to average loans (annualized) |
0.09 |
% |
0.06 |
% |
0.00 |
% |
0.00 |
% |
0.53 |
% |
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, Tangible Common Equity to Tangible Assets Ratio, and Return on Average Tangible Common Equity" 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.
Management believes the following non-GAAP financial measures assist investors in understanding the financial condition of the company:
- Tangible Common Equity. The most directly comparable GAAP financial measure for tangible common equity is total shareholders' equity. We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period of tangible common equity.
- Tangible Book Value Per Share. The most directly comparable GAAP financial measure for tangible book value per share is book value per share. We believe that the tangible book value per share measure is important to many investors in the marketplace who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.
- Tangible Common Equity to Tangible Assets. The most directly comparable GAAP financial measure for tangible common equity is total shareholders' equity, the most directly comparable GAAP financial measure for tangible assets is total assets, and the most directly comparable GAAP financial measure for tangible common equity to tangible assets is total shareholders' equity to total assets. We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period of tangible common equity to tangible assets, each exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing both total shareholders' equity and assets while not increasing our tangible common equity or tangible assets.
- Return on Average Tangible Common Equity. The most directly comparable GAAP financial measure for average tangible common equity is average shareholders' equity, and the most directly comparable GAAP financial measure for return on average tangible common equity is return on average common equity. We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period of return on average tangible common equity, exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing average shareholders' equity while not increasing our tangible common equity.
The calculations of these non-GAAP financial measures are as follows:
Three Months Ended |
Year Ended |
|||||||||||||||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||||||||||||||
(Dollars in thousands, except per share data) |
December 31 |
September 30 |
June 30 |
March 31 |
December 31 |
December 31 |
December 31 |
|||||||||||||||||||||
Tangible Common Equity: |
||||||||||||||||||||||||||||
Total shareholders' equity |
$ |
381,780 |
$ |
376,354 |
$ |
301,967 |
$ |
301,203 |
$ |
299,007 |
$ |
381,780 |
$ |
299,007 |
||||||||||||||
Less: Preferred stock including additional paid in capital |
66,225 |
66,273 |
- |
- |
- |
66,225 |
- |
|||||||||||||||||||||
Total common equity |
315,555 |
310,081 |
301,967 |
301,203 |
299,007 |
315,555 |
299,007 |
|||||||||||||||||||||
Less: Goodwill and core deposit intangibles, net |
19,165 |
19,205 |
19,245 |
19,286 |
19,326 |
19,165 |
19,326 |
|||||||||||||||||||||
Tangible common equity |
$ |
296,390 |
$ |
290,876 |
$ |
282,722 |
$ |
281,917 |
$ |
279,681 |
$ |
296,390 |
$ |
279,681 |
||||||||||||||
Common shares outstanding at end of period |
13,531,736 |
13,521,826 |
13,464,093 |
13,445,782 |
13,403,324 |
13,531,736 |
13,403,324 |
|||||||||||||||||||||
Book Value Per Share |
$ |
23.32 |
$ |
22.93 |
$ |
22.43 |
$ |
22.40 |
$ |
22.31 |
$ |
23.32 |
$ |
22.31 |
||||||||||||||
Tangible Book Value Per Share |
$ |
21.90 |
$ |
21.51 |
$ |
21.00 |
$ |
20.97 |
$ |
20.87 |
$ |
21.90 |
$ |
20.87 |
||||||||||||||
Tangible Assets: |
||||||||||||||||||||||||||||
Total assets |
$ |
3,773,148 |
$ |
3,516,845 |
$ |
3,358,062 |
$ |
3,040,388 |
$ |
2,499,412 |
$ |
3,773,148 |
$ |
2,499,412 |
||||||||||||||
Adjustments: Goodwill and core deposit intangibles, net |
19,165 |
19,205 |
19,245 |
19,286 |
19,326 |
19,165 |
19,326 |
|||||||||||||||||||||
Tangible assets |
$ |
3,753,983 |
$ |
3,497,640 |
$ |
3,338,817 |
$ |
3,021,102 |
$ |
2,480,086 |
$ |
3,753,983 |
$ |
2,480,086 |
||||||||||||||
Total Common Equity to Total Assets |
8.36 |
% |
8.82 |
% |
8.99 |
% |
9.91 |
% |
11.96 |
% |
8.36 |
% |
11.96 |
% |
||||||||||||||
Tangible Common Equity to Tangible Assets |
7.90 |
% |
8.32 |
% |
8.47 |
% |
9.33 |
% |
11.28 |
% |
7.90 |
% |
11.28 |
% |
||||||||||||||
Average Tangible Common Equity: |
||||||||||||||||||||||||||||
Average shareholders' equity |
$ |
381,271 |
$ |
308,092 |
$ |
303,135 |
$ |
301,537 |
$ |
257,583 |
$ |
323,685 |
$ |
170,630 |
||||||||||||||
Less: Average preferred stock including additional paid in capital |
66,329 |
720 |
- |
- |
- |
16,900 |
- |
|||||||||||||||||||||
Average common equity |
314,942 |
307,372 |
303,135 |
301,537 |
257,583 |
306,785 |
170,630 |
|||||||||||||||||||||
Less: Average goodwill and core deposit intangibles, net |
19,184 |
19,225 |
19,265 |
19,306 |
19,343 |
19,245 |
19,404 |
|||||||||||||||||||||
Average tangible common equity |
$ |
295,758 |
$ |
288,147 |
$ |
283,870 |
$ |
282,231 |
$ |
238,240 |
$ |
287,540 |
$ |
151,226 |
||||||||||||||
Net Income |
$ |
7,525 |
$ |
6,770 |
$ |
2,277 |
$ |
2,087 |
$ |
354 |
$ |
18,659 |
$ |
11,424 |
||||||||||||||
Less: Dividends paid on preferred stock |
1,418 |
- |
- |
- |
- |
1,418 |
- |
|||||||||||||||||||||
Net Income Available to Common Shareholders |
$ |
6,107 |
$ |
6,770 |
$ |
2,277 |
$ |
2,087 |
$ |
354 |
$ |
17,241 |
$ |
11,424 |
||||||||||||||
Return on Average Common Equity |
7.69 |
% |
8.74 |
% |
3.01 |
% |
2.81 |
% |
0.55 |
% |
5.62 |
% |
6.70 |
% |
||||||||||||||
Return on Average Tangible Common Equity |
8.19 |
% |
9.32 |
% |
3.22 |
% |
3.00 |
% |
0.59 |
% |
6.00 |
% |
7.55 |
% |
View original content:https://www.prnewswire.com/news-releases/third-coast-bancshares-inc-reports-2022-fourth-quarter-and-full-year-financial-results-301731964.html
SOURCE Third Coast Bancshares