THIRD COAST BANCSHARES, INC. REPORTS 2023 FIRST QUARTER FINANCIAL RESULTS
Continued progress results in 1.02% ROAA on improved margins
HOUSTON, April 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 2023 first quarter financial results.
2023 First Quarter Financial Highlights
- Loans held for investment grew $105.8 million to $3.21 billion, or 3.4%, over the $3.11 billion reported as of December 31, 2022 and 31.3% over the $2.45 billion reported as of March 31, 2022.
- Deposits reached $3.32 billion, an increase of $86.4 million, or 2.7%, over the $3.24 billion reported as of December 31, 2022 and 28.4% over the $2.59 billion reported as of March 31, 2022. Noninterest-bearing deposits represented 15.6% of total deposits compared to 15.0% as of December 31, 2022.
- Total assets reached $3.86 billion, an increase of $86.5 million, or 2.3%, over the $3.77 billion reported as of December 31, 2022 and 26.9% over the $3.04 billion reported as of March 31, 2022.
- Net income for the first quarter of 2023 totaled $9.2 million compared to $7.5 million for the fourth quarter of 2022 and $2.1 million for the first quarter of 2022.
- Book value per share and tangible book value per share(1) increased to $23.63 and $22.22, respectively, as of March 31, 2023 compared to $23.32 and $21.90, respectively, as of December 31, 2022 and to $22.40 and $20.97, respectively, as of March 31, 2022.
- Return on average assets increased to 1.02% annualized for the first quarter of 2023 compared to 0.84% annualized for the fourth quarter of 2022 and 0.32% annualized for the first quarter of 2022.
"Third Coast's first quarter performance underscores the many positive trends from the preceding fourth quarter," said, Bart Caraway, Third Coast's Chairman, President and Chief Executive Officer. "The industry wide liquidity crisis gave us the opportunity to reach out to both customers and prospects, which resulted in deposit growth of $86.4 million for the quarter with $30.8 million being noninterest bearing demand. We had no need to take on brokered deposits, or public funds. At March 31, 2023, our uninsured deposits were $932 million, or 28% of total deposits, well below industry average.
_____________________________
(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.
"While no one is immune from market headwinds, Third Coast is well positioned and is focused on improving performance. For the quarter our net interest margin improved 4 basis points to 3.79% and our noninterest expense was down $583,000. Non-performing assets declined 16.3% and we delivered net recoveries of $364,000. We were especially pleased to report $9.2 million in net income, or $0.55 per diluted share, in the quarter, representing a 25% increase from the sequential fourth quarter.
"As we start the second quarter, we are optimistic regarding our deposit opportunities. We expect another quarter of similar loan growth as we navigate an increasingly uncertain environment. We also expect our net interest margin to continue to improve in the second quarter due to a recently purchased pay fixed SWAP. We will continue to be prudent in our lending practices from a risk return standpoint, conservative in our expenditures, and poised and ready to take advantage of future growth opportunities," Caraway concluded.
Loan Portfolio and Composition
For the quarter ended March 31, 2023, gross loans increased to $3.21 billion, an increase of $105.8 million, or 3.4%, from $3.11 billion as of December 31, 2022, and an increase of $765.4 million, or 31.3%, from $2.45 billion as of March 31, 2022. We believe the loan growth was well diversified with real estate loans up $57.2 million and commercial loans up $53.7 million from December 31, 2022.
Asset Quality
Asset quality improved during the first quarter of 2023 with non-performing assets decreasing to $10.3 million as of March 31, 2023, or 16.3%, from $12.3 million as of December 31, 2022. On January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASC 326"), such that the allowance calculation is based on current expected credit loss methodology ("CECL") and recorded an increase of $4.0 million to the allowance for credit losses for the cumulative effect of adopting ASC 326 for its loans held for investment portfolio. In addition, the provision for credit loss recorded for the first quarter of 2023 was $1.2 million and related to provisioning for new loans. The entries combined served to increase the allowance to $35.9 million, or 1.12% of the $3.21 billion in gross loans outstanding as of March 31, 2023.
As of March 31, 2023, the nonperforming loans to loans held for investment ratio remained low at 0.32%, a decrease from 0.39% as of December 31, 2022 and 0.44% as of March 31, 2022. During the three months ended March 31, 2023 and 2022, the Company recorded net recoveries of $364,000 and $17,000, respectively.
Deposits and Composition
Deposits totaled $3.32 billion as of March 31, 2023, an increase of 2.7% from $3.24 billion as of December 31, 2022, and an increase of 28.4% from $2.59 billion as of March 31, 2022. Noninterest-bearing demand deposits increased from $486.1 million as of December 31, 2022 to $516.9 million as of March 31, 2023. Noninterest-bearing demand deposits represented 15.6% of total deposits as of March 31, 2023, up from 15.0% of total deposits as of December 31, 2022. As of March 31, 2023, interest-bearing demand deposits increased $32.0 million, or 1.3%, time deposits increased $23.1 million, or 10.7%, and savings accounts increased $525,000, or 1.5%, from December 31, 2022.
The average cost of deposits was 2.92% for the first quarter of 2023, representing a 75 basis point increase from the fourth quarter of 2022 and a 259 basis point increase from the first quarter of 2022 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 first quarter of 2023 was 3.79% compared to 3.75% for the fourth quarter of 2022 and 4.09% for the first quarter of 2022. The yield on loans for the first quarter of 2023 was 6.90% compared to 6.27% for the fourth quarter of 2022 and 4.90% for the first quarter of 2022. The increase in yield on loans during the first quarter of 2023 was primarily due to the increase in the Prime Rate.
Net interest income totaled $32.8 million for the first quarter of 2023, an increase of 2.1% from $32.2 million for the fourth quarter of 2022. Interest income totaled $57.4 million for the first quarter of 2023, an increase of 12.2% from $51.2 million for the fourth quarter of 2022. Interest and fees on loans increased $5.8 million, or 12.1%, compared to the fourth quarter of 2022, and increased $27.2 million, or 102.1%, from the first quarter of 2022. Interest expense was $24.5 million for the first quarter of 2023, an increase of $5.5 million, or 29.2% from $19.0 million for the fourth quarter of 2022 and an increase of $22.6 million, or 1,143.6%, from $2.0 million for the first quarter of 2022. The increase in interest expense was primarily due to interest-bearing deposit growth and increases in interest rates paid on interest-bearing deposit accounts.
Noninterest Income and Noninterest Expense
Noninterest income totaled $1.9 million for the first quarter of 2023, compared to $1.8 million for the fourth quarter of 2022, and $1.7 million for the first quarter of 2022.
Noninterest expense totaled $22.0 million for the first quarter of 2023, down from $22.6 million for the fourth quarter of 2022 and up from $20.2 million for the first quarter of 2022. 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 339 as of March 31, 2022 to 370 as of March 31, 2023.
The efficiency ratio improved to 63.47% for the first quarter of 2023, from 66.74% for the fourth quarter of 2022, and 75.09% for the first quarter of 2022. The improvement 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 $9.2 million for the first quarter of 2023, compared to $7.5 million for the fourth quarter of 2022. Net income available to common shareholders totaled $8.1 million for the first quarter of 2023 compared to $6.1 million for the fourth quarter of 2022. Dividends on our Series A Convertible Non-Cumulative Preferred Stock totaled $1.2 million for the first quarter of 2023 and $1.4 million for the fourth quarter of 2022. Basic earnings per share and diluted earnings per share were $0.60 per share and $0.55 per share, respectively, in the first quarter of 2023 compared to $0.45 per share and $0.44 per share, respectively, in the fourth quarter of 2022.
Earnings Conference Call
Third Coast has scheduled a conference call to discuss 2023 first quarter results, which will be broadcast live over the Internet, on Thursday, April 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 May 4, 2023, and may be accessed by dialing 201-612-7415 and using passcode 13735405#. 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," "looking ahead," "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: interest rate risk and fluctuations in interest rates; market conditions and economic trends generally and in the banking industry; our ability to maintain important deposit relationships; our ability to grow or maintain our deposit base; our ability to implement our expansion strategy; credit risk associated with our business; and changes in key management personnel. 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, 2022 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 Common Equity, Tangible Book Value Per Share, Tangible Common Equity to Tangible Assets 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.
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
2023
2022
(Dollars in thousands)
March 31
December 31
September 30
June 30
March 31
ASSETS
Cash and cash equivalents:
Cash and due from banks
$
309,153
$
329,864
$
216,623
$
317,462
$
369,782
Federal funds sold
1,789
2,150
1,225
2,741
1,538
Total cash and cash equivalents
310,942
332,014
217,848
320,203
371,320
Interest bearing time deposits in other banks
-
-
132
132
132
Investment securities available-for-sale
180,376
176,067
160,437
157,261
126,218
Loans held for investment
3,213,326
3,107,551
2,972,852
2,749,177
2,447,945
Less: allowance for credit losses
(35,915)
(30,351)
(29,109)
(26,666)
(23,312)
Loans, net
3,177,411
3,077,200
2,943,743
2,722,511
2,424,633
Accrued interest receivable
19,026
18,340
16,246
12,568
12,648
Premises and equipment, net
28,504
28,662
25,449
22,888
20,846
Other real estate owned
-
-
-
-
1,666
Bank-owned life insurance
64,235
60,761
60,263
51,919
26,671
Non-marketable securities, at cost
14,751
15,405
27,136
15,213
11,327
Deferred tax asset, net
7,146
6,303
8,097
7,179
4,258
Fair value hedge assets
8,793
9,213
11,508
6,892
3,873
Right-of-use assets
19,328
17,872
18,266
12,648
10,697
Core Deposit Intangible, net
1,090
1,131
1,171
1,211
1,252
Goodwill
18,034
18,034
18,034
18,034
18,034
Other assets
10,021
12,146
8,515
9,403
6,813
Total assets
$
3,859,657
$
3,773,148
$
3,516,845
$
3,358,062
$
3,040,388
LIABILITIES
Deposits:
Noninterest bearing
$
516,909
$
486,114
$
517,265
$
519,614
$
931,622
Interest bearing
2,805,624
2,750,032
2,467,049
2,378,650
1,655,547
Total deposits
3,322,533
3,236,146
2,984,314
2,898,264
2,587,169
Accrued interest payable
1,636
2,545
2,925
1,683
387
Fair value hedge liabilities
7,271
9,221
11,514
6,912
3,909
Lease liability - operating leases
19,845
18,209
18,407
12,650
10,629
Other liabilities
10,054
14,024
12,158
7,344
5,584
FHLB advances
-
-
-
18,000
50,000
Note payable - Line of Credit - Senior Debt
30,875
30,875
30,875
30,875
1,000
Note payable - Subordinated Debentures, net
80,399
80,348
80,298
80,367
80,507
Total liabilities
3,472,613
3,391,368
3,140,491
3,056,095
2,739,185
SHAREHOLDERS' EQUITY
Series A Convertible Non-Cumulative Preferred Stock
69
69
69
-
-
Series B Convertible Perpetual Preferred Stock
-
-
-
-
-
Common stock
13,658
13,610
13,600
13,543
13,524
Additional paid-in capital
318,350
318,033
317,798
250,413
249,775
Retained earnings
58,182
53,270
47,163
40,393
38,116
Accumulated other comprehensive (loss) income
(2,116)
(2,103)
(1,177)
(1,283)
887
Treasury stock, at cost
(1,099)
(1,099)
(1,099)
(1,099)
(1,099)
Total shareholders' equity
387,044
381,780
376,354
301,967
301,203
Total liabilities and shareholders' equity
$
3,859,657
$
3,773,148
$
3,516,845
$
3,358,062
$
3,040,388
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
Three Months Ended
Year Ended
2023
2022
2022
(Dollars in thousands, except per share data)
March 31
December 31
September 30
June 30
March 31
December 31
INTEREST INCOME:
Loans, including fees
$
53,911
$
48,081
$
40,498
$
31,164
$
26,682
$
146,425
Investment securities available-for-sale
1,548
1,388
1,367
894
276
3,925
Federal funds sold and deposits in other banks
1,920
1,682
1,237
451
226
3,596
Total interest income
57,379
51,151
43,102
32,509
27,184
153,946
INTEREST EXPENSE:
Deposit accounts
22,092
15,682
9,727
3,443
1,844
30,696
FHLB advances and notes payable
2,457
3,318
2,020
1,328
130
6,796
Total interest expense
24,549
19,000
11,747
4,771
1,974
37,492
Net interest income
32,830
32,151
31,355
27,738
25,210
116,454
Provision for credit losses
1,200
1,950
2,900
3,350
4,000
12,200
Net interest income after credit loss expense
31,630
30,201
28,455
24,388
21,210
104,254
NONINTEREST INCOME:
Service charges and fees
779
706
772
617
619
2,714
Gain on sale of SBA loans
-
123
729
98
-
950
Gain on sale of securities
97
-
-
-
-
-
Earnings on bank-owned life insurance
475
497
424
248
143
1,312
Derivative fees
(1)
117
313
123
706
1,259
Other
552
310
300
180
198
988
Total noninterest income
1,902
1,753
2,538
1,266
1,666
7,223
NONINTEREST EXPENSE:
Salaries and employee benefits
13,712
14,473
14,719
13,994
13,324
56,510
Data processing and network expense
1,203
837
1,256
932
922
3,947
Occupancy and equipment expense
2,633
2,591
2,232
1,830
1,873
8,526
Legal and professional
1,930
1,887
1,353
2,001
1,746
6,987
Loan operations and other real estate owned
(35)
144
284
282
278
988
Advertising and marketing
686
580
438
467
427
1,912
Telephone and communications
139
175
122
99
100
496
Software purchases and maintenance
352
295
318
201
198
1,012
Regulatory assessments
666
863
1,000
956
645
3,464
Loss on sale of other real estate owned
-
-
-
350
-
350
Other
758
782
1,006
1,661
668
4,117
Total noninterest expense
22,044
22,627
22,728
22,773
20,181
88,309
NET INCOME BEFORE INCOME TAX EXPENSE
11,488
9,327
8,265
2,881
2,695
23,168
Income tax expense
2,245
1,802
1,495
604
608
4,509
NET INCOME
9,243
7,525
6,770
2,277
2,087
18,659
Preferred stock dividends declared
1,171
1,418
-
-
-
1,418
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS
$
8,072
$
6,107
$
6,770
$
2,277
$
2,087
$
17,241
EARNINGS PER COMMON SHARE:
Basic earnings per share
$
0.60
$
0.45
$
0.50
$
0.17
$
0.16
$
1.28
Diluted earnings per share
$
0.55
$
0.44
$
0.49
$
0.16
$
0.15
$
1.25
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
Three Months Ended
Year Ended
2023
2022
2022
(Dollars in thousands, except share and
per share data)
March 31
December 31
September 30
June 30
March 31
December 31
Earnings per share, basic
$
0.60
$
0.45
$
0.50
$
0.17
$
0.16
$
1.28
Earnings per share, diluted
$
0.55
$
0.44
$
0.49
$
0.16
$
0.15
$
1.25
Dividends on common stock
$
-
$
-
$
-
$
-
$
-
$
-
Dividends on Series A Convertible
Non-Cumulative Preferred Stock
$
16.88
$
20.44
$
-
$
-
$
-
$
20.44
Return on average assets (A)
1.02
%
0.84
%
0.78
%
0.29
%
0.32
%
0.58
%
Return on average common equity (A)
10.28
%
7.69
%
8.74
%
3.01
%
2.81
%
5.62
%
Return on average tangible common
equity (A) (B)
10.93
%
8.19
%
9.32
%
3.22
%
3.00
%
6.00
%
Net interest margin (A) (C)
3.79
%
3.75
%
3.77
%
3.77
%
4.09
%
3.82
%
Efficiency ratio (D)
63.47
%
66.74
%
67.06
%
78.52
%
75.09
%
71.40
%
Capital Ratios
Third Coast Bancshares, Inc. (consolidated):
Total common equity to total assets
8.31
%
8.36
%
8.82
%
8.99
%
9.91
%
8.36
%
Tangible common equity to tangible
assets (B)
7.86
%
7.90
%
8.32
%
8.47
%
9.33
%
7.90
%
Common equity tier 1 (to risk weighted assets)
7.89
%
N/A
N/A
N/A
N/A
N/A
Tier 1 capital (to risk weighted assets)
9.61
%
N/A
N/A
N/A
N/A
N/A
Total capital (to risk weighted assets)
12.63
%
N/A
N/A
N/A
N/A
N/A
Tier 1 capital (to average assets)
10.14
%
N/A
N/A
N/A
N/A
N/A
Third Coast Bank, SSB:
Common equity tier 1 (to risk weighted assets)
12.32
%
12.95
%
13.04
%
11.60
%
12.36
%
12.95
%
Tier 1 capital (to risk weighted assets)
12.32
%
12.95
%
13.04
%
11.60
%
12.36
%
12.95
%
Total capital (to risk weighted assets)
13.25
%
13.79
%
13.87
%
12.40
%
13.17
%
13.79
%
Tier 1 capital (to average assets)
13.00
%
13.11
%
13.29
%
12.47
%
13.66
%
13.11
%
Other Data
Weighted average shares:
Basic
13,532,545
13,528,504
13,490,680
13,454,423
13,385,324
13,465,196
Diluted
16,801,815
13,760,076
13,678,962
13,822,522
13,755,026
13,754,610
Period end shares outstanding
13,579,498
13,531,736
13,521,826
13,464,093
13,445,782
13,531,736
Book value per share
$
23.63
$
23.32
$
22.93
$
22.43
$
22.40
$
23.32
Tangible book value per share (B)
$
22.22
$
21.90
$
21.51
$
21.00
$
20.97
$
21.90
___________
(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 11 and 12 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 credit losses are not part of this calculation.
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
Three Months Ended
March 31, 2023
December 31, 2022
March 31, 2022
(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
$
178,197
$
1,548
3.52 %
$
170,463
$
1,388
3.23 %
$
28,170
$
276
3.97 %
Loans, gross
3,170,828
53,911
6.90 %
3,041,923
48,081
6.27 %
2,208,462
26,682
4.90 %
Federal funds sold and other
interest-earning assets
167,694
1,920
4.64 %
185,887
1,682
3.59 %
260,275
226
0.35 %
Total interest-earning assets
3,516,719
57,379
6.62 %
3,398,273
51,151
5.97 %
2,496,907
27,184
4.42 %
Less allowance for loan losses
(34,879)
(29,563)
(20,395)
Total interest-earning assets,
net of allowance
3,481,840
3,368,710
2,476,512
Noninterest-earning assets
182,869
203,834
150,871
Total assets
$
3,664,709
$
3,572,544
$
2,627,383
Liabilities and Shareholders'
Equity
Interest-bearing liabilities:
Interest-bearing deposits
$
2,595,750
$
22,092
3.45 %
$
2,354,990
$
15,682
2.64 %
$
1,640,273
$
1,844
0.46 %
Notes payable
111,250
1,814
6.61 %
111,199
1,761
6.28 %
1,891
23
4.93 %
FHLB advances
52,803
643
4.94 %
166,783
1,557
3.70 %
50,000
107
0.87 %
Total interest-bearing liabilities
2,759,803
24,549
3.61 %
2,632,972
19,000
2.86 %
1,692,164
1,974
0.47 %
Noninterest-bearing deposits
477,706
517,075
620,900
Other liabilities
42,406
41,226
12,782
Total liabilities
3,279,915
3,191,273
2,325,846
Shareholders' equity
384,794
381,271
301,537
Total liabilities and
shareholders' equity
$
3,664,709
$
3,572,544
$
2,627,383
Net interest income
$
32,830
$
32,151
$
25,210
Net interest spread (1)
3.01 %
3.11 %
3.95 %
Net interest margin (2)
3.79 %
3.75 %
4.09 %
___________
(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
2023
2022
(Dollars in thousands)
March 31
December 31
September 30
June 30
March 31
Period-end Loan Portfolio:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied
$
508,936
$
493,791
$
529,046
$
508,864
$
477,573
Non-farm non-residential non-owner occupied
511,546
506,012
490,503
464,530
463,618
Residential
286,358
308,775
283,432
273,415
225,649
Construction, development & other
627,143
567,851
500,879
440,925
414,653
Farmland
22,512
22,820
22,770
23,895
13,467
Commercial & industrial
1,112,638
1,058,910
1,029,231
914,845
756,005
Consumer
3,280
3,872
3,728
3,706
3,304
Municipal and other
140,913
145,520
113,263
118,997
93,676
Total loans
$
3,213,326
$
3,107,551
$
2,972,852
$
2,749,177
$
2,447,945
Asset Quality:
Nonaccrual loans
$
9,482
$
10,963
$
9,439
$
9,806
$
9,896
Loans > 90 days and still accruing
-
518
98
387
40
Restructured loans--accruing
780
780
781
785
790
Total nonperforming loans
$
10,262
$
12,261
$
10,318
$
10,978
$
10,726
Other real estate owned
-
-
-
-
1,666
Total nonperforming assets
$
10,262
$
12,261
$
10,318
$
10,978
$
12,392
QTD Net (recoveries) charge-offs
$
(364)
$
708
$
457
$
(4)
$
(17)
Nonaccrual loans:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied
$
855
$
1,699
$
921
$
964
$
986
Non-farm non-residential non-owner occupied
282
296
309
323
334
Residential
506
513
111
116
121
Construction, development & other
39
40
227
232
238
Commercial & industrial
7,800
8,390
7,846
8,165
8,210
Consumer
-
20
20
-
-
Purchased credit impaired
-
5
5
6
7
Total nonaccrual loans
$
9,482
$
10,963
$
9,439
$
9,806
$
9,896
Asset Quality Ratios:
Nonperforming assets to total assets
0.27
%
0.32
%
0.29
%
0.33
%
0.41
%
Nonperforming loans to total loans
0.32
%
0.39
%
0.35
%
0.40
%
0.44
%
Allowance for credit losses to total loans
1.12
%
0.98
%
0.98
%
0.97
%
0.95
%
QTD Net (recoveries) charge-offs to average loans (annualized)
(0.05)
%
0.09
%
0.06
%
0.00
%
0.00
%
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 Common Equity, Tangible Book Value Per Share, Tangible Common Equity to Tangible Assets, 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
2023
2022
2022
(Dollars in thousands, except share and per share data)
March 31
December 31
September 30
June 30
March 31
December 31
Tangible Common Equity:
Total shareholders' equity
$
387,044
$
381,780
$
376,354
$
301,967
$
301,203
$
381,780
Less: Preferred stock including additional paid in capital
66,225
66,225
66,273
-
-
66,225
Total common equity
320,819
315,555
310,081
301,967
301,203
315,555
Less: Goodwill and core deposit intangibles, net
19,124
19,165
19,205
19,245
19,286
19,165
Tangible common equity
$
301,695
$
296,390
$
290,876
$
282,722
$
281,917
$
296,390
Common shares outstanding at end of period
13,579,498
13,531,736
13,521,826
13,464,093
13,445,782
13,531,736
Book Value Per Share
$
23.63
$
23.32
$
22.93
$
22.43
$
22.40
$
23.32
Tangible Book Value Per Share
$
22.22
$
21.90
$
21.51
$
21.00
$
20.97
$
21.90
Tangible Assets:
Total assets
$
3,859,657
$
3,773,148
$
3,516,845
$
3,358,062
$
3,040,388
$
3,773,148
Adjustments: Goodwill and core deposit intangibles, net
19,124
19,165
19,205
19,245
19,286
19,165
Tangible assets
$
3,840,533
$
3,753,983
$
3,497,640
$
3,338,817
$
3,021,102
$
3,753,983
Total Common Equity to Total Assets
8.31
%
8.36
%
8.82
%
8.99
%
9.91
%
8.36
%
Tangible Common Equity to Tangible Assets
7.86
%
7.90
%
8.32
%
8.47
%
9.33
%
7.90
%
Average Tangible Common Equity:
Average shareholders' equity
$
384,794
$
381,271
$
308,092
$
303,135
$
301,537
$
323,685
Less: Average preferred stock including additional paid in capital
66,225
66,329
720
-
-
16,900
Average common equity
318,569
314,942
307,372
303,135
301,537
306,785
Less: Average goodwill and core deposit intangibles, net
19,149
19,184
19,225
19,265
19,306
19,245
Average tangible common equity
$
299,420
$
295,758
$
288,147
$
283,870
$
282,231
$
287,540
Net Income
$
9,243
$
7,525
$
6,770
$
2,277
$
2,087
$
18,659
Less: Dividends paid on preferred stock
1,171
1,418
-
-
-
1,418
Net Income Available to Common Shareholders
$
8,072
$
6,107
$
6,770
$
2,277
$
2,087
$
17,241
Return on Average Common Equity
10.28
%
7.69
%
8.74
%
3.01
%
2.81
%
5.62
%
Return on Average Tangible Common Equity
10.93
%
8.19
%
9.32
%
3.22
%
3.00
%
6.00
%
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-2023-first-quarter-financial-results-301808605.html
SOURCE Third Coast Bancshares
Continued progress results in 1.02% ROAA on improved margins
HOUSTON, April 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 2023 first quarter financial results.
2023 First Quarter Financial Highlights
- Loans held for investment grew $105.8 million to $3.21 billion, or 3.4%, over the $3.11 billion reported as of December 31, 2022 and 31.3% over the $2.45 billion reported as of March 31, 2022.
- Deposits reached $3.32 billion, an increase of $86.4 million, or 2.7%, over the $3.24 billion reported as of December 31, 2022 and 28.4% over the $2.59 billion reported as of March 31, 2022. Noninterest-bearing deposits represented 15.6% of total deposits compared to 15.0% as of December 31, 2022.
- Total assets reached $3.86 billion, an increase of $86.5 million, or 2.3%, over the $3.77 billion reported as of December 31, 2022 and 26.9% over the $3.04 billion reported as of March 31, 2022.
- Net income for the first quarter of 2023 totaled $9.2 million compared to $7.5 million for the fourth quarter of 2022 and $2.1 million for the first quarter of 2022.
- Book value per share and tangible book value per share(1) increased to $23.63 and $22.22, respectively, as of March 31, 2023 compared to $23.32 and $21.90, respectively, as of December 31, 2022 and to $22.40 and $20.97, respectively, as of March 31, 2022.
- Return on average assets increased to 1.02% annualized for the first quarter of 2023 compared to 0.84% annualized for the fourth quarter of 2022 and 0.32% annualized for the first quarter of 2022.
"Third Coast's first quarter performance underscores the many positive trends from the preceding fourth quarter," said, Bart Caraway, Third Coast's Chairman, President and Chief Executive Officer. "The industry wide liquidity crisis gave us the opportunity to reach out to both customers and prospects, which resulted in deposit growth of $86.4 million for the quarter with $30.8 million being noninterest bearing demand. We had no need to take on brokered deposits, or public funds. At March 31, 2023, our uninsured deposits were $932 million, or 28% of total deposits, well below industry average.
|
_____________________________ |
|
(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. |
"While no one is immune from market headwinds, Third Coast is well positioned and is focused on improving performance. For the quarter our net interest margin improved 4 basis points to 3.79% and our noninterest expense was down $583,000. Non-performing assets declined 16.3% and we delivered net recoveries of $364,000. We were especially pleased to report $9.2 million in net income, or $0.55 per diluted share, in the quarter, representing a 25% increase from the sequential fourth quarter.
"As we start the second quarter, we are optimistic regarding our deposit opportunities. We expect another quarter of similar loan growth as we navigate an increasingly uncertain environment. We also expect our net interest margin to continue to improve in the second quarter due to a recently purchased pay fixed SWAP. We will continue to be prudent in our lending practices from a risk return standpoint, conservative in our expenditures, and poised and ready to take advantage of future growth opportunities," Caraway concluded.
Loan Portfolio and Composition
For the quarter ended March 31, 2023, gross loans increased to $3.21 billion, an increase of $105.8 million, or 3.4%, from $3.11 billion as of December 31, 2022, and an increase of $765.4 million, or 31.3%, from $2.45 billion as of March 31, 2022. We believe the loan growth was well diversified with real estate loans up $57.2 million and commercial loans up $53.7 million from December 31, 2022.
Asset Quality
Asset quality improved during the first quarter of 2023 with non-performing assets decreasing to $10.3 million as of March 31, 2023, or 16.3%, from $12.3 million as of December 31, 2022. On January 1, 2023, the Company adopted ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASC 326"), such that the allowance calculation is based on current expected credit loss methodology ("CECL") and recorded an increase of $4.0 million to the allowance for credit losses for the cumulative effect of adopting ASC 326 for its loans held for investment portfolio. In addition, the provision for credit loss recorded for the first quarter of 2023 was $1.2 million and related to provisioning for new loans. The entries combined served to increase the allowance to $35.9 million, or 1.12% of the $3.21 billion in gross loans outstanding as of March 31, 2023.
As of March 31, 2023, the nonperforming loans to loans held for investment ratio remained low at 0.32%, a decrease from 0.39% as of December 31, 2022 and 0.44% as of March 31, 2022. During the three months ended March 31, 2023 and 2022, the Company recorded net recoveries of $364,000 and $17,000, respectively.
Deposits and Composition
Deposits totaled $3.32 billion as of March 31, 2023, an increase of 2.7% from $3.24 billion as of December 31, 2022, and an increase of 28.4% from $2.59 billion as of March 31, 2022. Noninterest-bearing demand deposits increased from $486.1 million as of December 31, 2022 to $516.9 million as of March 31, 2023. Noninterest-bearing demand deposits represented 15.6% of total deposits as of March 31, 2023, up from 15.0% of total deposits as of December 31, 2022. As of March 31, 2023, interest-bearing demand deposits increased $32.0 million, or 1.3%, time deposits increased $23.1 million, or 10.7%, and savings accounts increased $525,000, or 1.5%, from December 31, 2022.
The average cost of deposits was 2.92% for the first quarter of 2023, representing a 75 basis point increase from the fourth quarter of 2022 and a 259 basis point increase from the first quarter of 2022 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 first quarter of 2023 was 3.79% compared to 3.75% for the fourth quarter of 2022 and 4.09% for the first quarter of 2022. The yield on loans for the first quarter of 2023 was 6.90% compared to 6.27% for the fourth quarter of 2022 and 4.90% for the first quarter of 2022. The increase in yield on loans during the first quarter of 2023 was primarily due to the increase in the Prime Rate.
Net interest income totaled $32.8 million for the first quarter of 2023, an increase of 2.1% from $32.2 million for the fourth quarter of 2022. Interest income totaled $57.4 million for the first quarter of 2023, an increase of 12.2% from $51.2 million for the fourth quarter of 2022. Interest and fees on loans increased $5.8 million, or 12.1%, compared to the fourth quarter of 2022, and increased $27.2 million, or 102.1%, from the first quarter of 2022. Interest expense was $24.5 million for the first quarter of 2023, an increase of $5.5 million, or 29.2% from $19.0 million for the fourth quarter of 2022 and an increase of $22.6 million, or 1,143.6%, from $2.0 million for the first quarter of 2022. The increase in interest expense was primarily due to interest-bearing deposit growth and increases in interest rates paid on interest-bearing deposit accounts.
Noninterest Income and Noninterest Expense
Noninterest income totaled $1.9 million for the first quarter of 2023, compared to $1.8 million for the fourth quarter of 2022, and $1.7 million for the first quarter of 2022.
Noninterest expense totaled $22.0 million for the first quarter of 2023, down from $22.6 million for the fourth quarter of 2022 and up from $20.2 million for the first quarter of 2022. 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 339 as of March 31, 2022 to 370 as of March 31, 2023.
The efficiency ratio improved to 63.47% for the first quarter of 2023, from 66.74% for the fourth quarter of 2022, and 75.09% for the first quarter of 2022. The improvement 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 $9.2 million for the first quarter of 2023, compared to $7.5 million for the fourth quarter of 2022. Net income available to common shareholders totaled $8.1 million for the first quarter of 2023 compared to $6.1 million for the fourth quarter of 2022. Dividends on our Series A Convertible Non-Cumulative Preferred Stock totaled $1.2 million for the first quarter of 2023 and $1.4 million for the fourth quarter of 2022. Basic earnings per share and diluted earnings per share were $0.60 per share and $0.55 per share, respectively, in the first quarter of 2023 compared to $0.45 per share and $0.44 per share, respectively, in the fourth quarter of 2022.
Earnings Conference Call
Third Coast has scheduled a conference call to discuss 2023 first quarter results, which will be broadcast live over the Internet, on Thursday, April 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 May 4, 2023, and may be accessed by dialing 201-612-7415 and using passcode 13735405#. 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," "looking ahead," "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: interest rate risk and fluctuations in interest rates; market conditions and economic trends generally and in the banking industry; our ability to maintain important deposit relationships; our ability to grow or maintain our deposit base; our ability to implement our expansion strategy; credit risk associated with our business; and changes in key management personnel. 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, 2022 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 Common Equity, Tangible Book Value Per Share, Tangible Common Equity to Tangible Assets 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.
|
Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited) |
||||||||||||||||||||
|
2023 |
2022 |
|||||||||||||||||||
|
(Dollars in thousands) |
March 31 |
December 31 |
September 30 |
June 30 |
March 31 |
|||||||||||||||
|
ASSETS |
||||||||||||||||||||
|
Cash and cash equivalents: |
||||||||||||||||||||
|
Cash and due from banks |
$ |
309,153 |
$ |
329,864 |
$ |
216,623 |
$ |
317,462 |
$ |
369,782 |
||||||||||
|
Federal funds sold |
1,789 |
2,150 |
1,225 |
2,741 |
1,538 |
|||||||||||||||
|
Total cash and cash equivalents |
310,942 |
332,014 |
217,848 |
320,203 |
371,320 |
|||||||||||||||
|
Interest bearing time deposits in other banks |
- |
- |
132 |
132 |
132 |
|||||||||||||||
|
Investment securities available-for-sale |
180,376 |
176,067 |
160,437 |
157,261 |
126,218 |
|||||||||||||||
|
Loans held for investment |
3,213,326 |
3,107,551 |
2,972,852 |
2,749,177 |
2,447,945 |
|||||||||||||||
|
Less: allowance for credit losses |
(35,915) |
(30,351) |
(29,109) |
(26,666) |
(23,312) |
|||||||||||||||
|
Loans, net |
3,177,411 |
3,077,200 |
2,943,743 |
2,722,511 |
2,424,633 |
|||||||||||||||
|
Accrued interest receivable |
19,026 |
18,340 |
16,246 |
12,568 |
12,648 |
|||||||||||||||
|
Premises and equipment, net |
28,504 |
28,662 |
25,449 |
22,888 |
20,846 |
|||||||||||||||
|
Other real estate owned |
- |
- |
- |
- |
1,666 |
|||||||||||||||
|
Bank-owned life insurance |
64,235 |
60,761 |
60,263 |
51,919 |
26,671 |
|||||||||||||||
|
Non-marketable securities, at cost |
14,751 |
15,405 |
27,136 |
15,213 |
11,327 |
|||||||||||||||
|
Deferred tax asset, net |
7,146 |
6,303 |
8,097 |
7,179 |
4,258 |
|||||||||||||||
|
Fair value hedge assets |
8,793 |
9,213 |
11,508 |
6,892 |
3,873 |
|||||||||||||||
|
Right-of-use assets |
19,328 |
17,872 |
18,266 |
12,648 |
10,697 |
|||||||||||||||
|
Core Deposit Intangible, net |
1,090 |
1,131 |
1,171 |
1,211 |
1,252 |
|||||||||||||||
|
Goodwill |
18,034 |
18,034 |
18,034 |
18,034 |
18,034 |
|||||||||||||||
|
Other assets |
10,021 |
12,146 |
8,515 |
9,403 |
6,813 |
|||||||||||||||
|
Total assets |
$ |
3,859,657 |
$ |
3,773,148 |
$ |
3,516,845 |
$ |
3,358,062 |
$ |
3,040,388 |
||||||||||
|
LIABILITIES |
||||||||||||||||||||
|
Deposits: |
||||||||||||||||||||
|
Noninterest bearing |
$ |
516,909 |
$ |
486,114 |
$ |
517,265 |
$ |
519,614 |
$ |
931,622 |
||||||||||
|
Interest bearing |
2,805,624 |
2,750,032 |
2,467,049 |
2,378,650 |
1,655,547 |
|||||||||||||||
|
Total deposits |
3,322,533 |
3,236,146 |
2,984,314 |
2,898,264 |
2,587,169 |
|||||||||||||||
|
Accrued interest payable |
1,636 |
2,545 |
2,925 |
1,683 |
387 |
|||||||||||||||
|
Fair value hedge liabilities |
7,271 |
9,221 |
11,514 |
6,912 |
3,909 |
|||||||||||||||
|
Lease liability - operating leases |
19,845 |
18,209 |
18,407 |
12,650 |
10,629 |
|||||||||||||||
|
Other liabilities |
10,054 |
14,024 |
12,158 |
7,344 |
5,584 |
|||||||||||||||
|
FHLB advances |
- |
- |
- |
18,000 |
50,000 |
|||||||||||||||
|
Note payable - Line of Credit - Senior Debt |
30,875 |
30,875 |
30,875 |
30,875 |
1,000 |
|||||||||||||||
|
Note payable - Subordinated Debentures, net |
80,399 |
80,348 |
80,298 |
80,367 |
80,507 |
|||||||||||||||
|
Total liabilities |
3,472,613 |
3,391,368 |
3,140,491 |
3,056,095 |
2,739,185 |
|||||||||||||||
|
SHAREHOLDERS' EQUITY |
||||||||||||||||||||
|
Series A Convertible Non-Cumulative Preferred Stock |
69 |
69 |
69 |
- |
- |
|||||||||||||||
|
Series B Convertible Perpetual Preferred Stock |
- |
- |
- |
- |
- |
|||||||||||||||
|
Common stock |
13,658 |
13,610 |
13,600 |
13,543 |
13,524 |
|||||||||||||||
|
Additional paid-in capital |
318,350 |
318,033 |
317,798 |
250,413 |
249,775 |
|||||||||||||||
|
Retained earnings |
58,182 |
53,270 |
47,163 |
40,393 |
38,116 |
|||||||||||||||
|
Accumulated other comprehensive (loss) income |
(2,116) |
(2,103) |
(1,177) |
(1,283) |
887 |
|||||||||||||||
|
Treasury stock, at cost |
(1,099) |
(1,099) |
(1,099) |
(1,099) |
(1,099) |
|||||||||||||||
|
Total shareholders' equity |
387,044 |
381,780 |
376,354 |
301,967 |
301,203 |
|||||||||||||||
|
Total liabilities and shareholders' equity |
$ |
3,859,657 |
$ |
3,773,148 |
$ |
3,516,845 |
$ |
3,358,062 |
$ |
3,040,388 |
||||||||||
|
Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited) |
|||||||||||||||||||||||||
|
Three Months Ended |
Year Ended |
||||||||||||||||||||||||
|
2023 |
2022 |
2022 |
|||||||||||||||||||||||
|
(Dollars in thousands, except per share data) |
March 31 |
December 31 |
September 30 |
June 30 |
March 31 |
December 31 |
|||||||||||||||||||
|
INTEREST INCOME: |
|||||||||||||||||||||||||
|
Loans, including fees |
$ |
53,911 |
$ |
48,081 |
$ |
40,498 |
$ |
31,164 |
$ |
26,682 |
$ |
146,425 |
|||||||||||||
|
Investment securities available-for-sale |
1,548 |
1,388 |
1,367 |
894 |
276 |
3,925 |
|||||||||||||||||||
|
Federal funds sold and deposits in other banks |
1,920 |
1,682 |
1,237 |
451 |
226 |
3,596 |
|||||||||||||||||||
|
Total interest income |
57,379 |
51,151 |
43,102 |
32,509 |
27,184 |
153,946 |
|||||||||||||||||||
|
INTEREST EXPENSE: |
|||||||||||||||||||||||||
|
Deposit accounts |
22,092 |
15,682 |
9,727 |
3,443 |
1,844 |
30,696 |
|||||||||||||||||||
|
FHLB advances and notes payable |
2,457 |
3,318 |
2,020 |
1,328 |
130 |
6,796 |
|||||||||||||||||||
|
Total interest expense |
24,549 |
19,000 |
11,747 |
4,771 |
1,974 |
37,492 |
|||||||||||||||||||
|
Net interest income |
32,830 |
32,151 |
31,355 |
27,738 |
25,210 |
116,454 |
|||||||||||||||||||
|
Provision for credit losses |
1,200 |
1,950 |
2,900 |
3,350 |
4,000 |
12,200 |
|||||||||||||||||||
|
Net interest income after credit loss expense |
31,630 |
30,201 |
28,455 |
24,388 |
21,210 |
104,254 |
|||||||||||||||||||
|
NONINTEREST INCOME: |
|||||||||||||||||||||||||
|
Service charges and fees |
779 |
706 |
772 |
617 |
619 |
2,714 |
|||||||||||||||||||
|
Gain on sale of SBA loans |
- |
123 |
729 |
98 |
- |
950 |
|||||||||||||||||||
|
Gain on sale of securities |
97 |
- |
- |
- |
- |
- |
|||||||||||||||||||
|
Earnings on bank-owned life insurance |
475 |
497 |
424 |
248 |
143 |
1,312 |
|||||||||||||||||||
|
Derivative fees |
(1) |
117 |
313 |
123 |
706 |
1,259 |
|||||||||||||||||||
|
Other |
552 |
310 |
300 |
180 |
198 |
988 |
|||||||||||||||||||
|
Total noninterest income |
1,902 |
1,753 |
2,538 |
1,266 |
1,666 |
7,223 |
|||||||||||||||||||
|
NONINTEREST EXPENSE: |
|||||||||||||||||||||||||
|
Salaries and employee benefits |
13,712 |
14,473 |
14,719 |
13,994 |
13,324 |
56,510 |
|||||||||||||||||||
|
Data processing and network expense |
1,203 |
837 |
1,256 |
932 |
922 |
3,947 |
|||||||||||||||||||
|
Occupancy and equipment expense |
2,633 |
2,591 |
2,232 |
1,830 |
1,873 |
8,526 |
|||||||||||||||||||
|
Legal and professional |
1,930 |
1,887 |
1,353 |
2,001 |
1,746 |
6,987 |
|||||||||||||||||||
|
Loan operations and other real estate owned |
(35) |
144 |
284 |
282 |
278 |
988 |
|||||||||||||||||||
|
Advertising and marketing |
686 |
580 |
438 |
467 |
427 |
1,912 |
|||||||||||||||||||
|
Telephone and communications |
139 |
175 |
122 |
99 |
100 |
496 |
|||||||||||||||||||
|
Software purchases and maintenance |
352 |
295 |
318 |
201 |
198 |
1,012 |
|||||||||||||||||||
|
Regulatory assessments |
666 |
863 |
1,000 |
956 |
645 |
3,464 |
|||||||||||||||||||
|
Loss on sale of other real estate owned |
- |
- |
- |
350 |
- |
350 |
|||||||||||||||||||
|
Other |
758 |
782 |
1,006 |
1,661 |
668 |
4,117 |
|||||||||||||||||||
|
Total noninterest expense |
22,044 |
22,627 |
22,728 |
22,773 |
20,181 |
88,309 |
|||||||||||||||||||
|
NET INCOME BEFORE INCOME TAX EXPENSE |
11,488 |
9,327 |
8,265 |
2,881 |
2,695 |
23,168 |
|||||||||||||||||||
|
Income tax expense |
2,245 |
1,802 |
1,495 |
604 |
608 |
4,509 |
|||||||||||||||||||
|
NET INCOME |
9,243 |
7,525 |
6,770 |
2,277 |
2,087 |
18,659 |
|||||||||||||||||||
|
Preferred stock dividends declared |
1,171 |
1,418 |
- |
- |
- |
1,418 |
|||||||||||||||||||
|
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS |
$ |
8,072 |
$ |
6,107 |
$ |
6,770 |
$ |
2,277 |
$ |
2,087 |
$ |
17,241 |
|||||||||||||
|
EARNINGS PER COMMON SHARE: |
|||||||||||||||||||||||||
|
Basic earnings per share |
$ |
0.60 |
$ |
0.45 |
$ |
0.50 |
$ |
0.17 |
$ |
0.16 |
$ |
1.28 |
|||||||||||||
|
Diluted earnings per share |
$ |
0.55 |
$ |
0.44 |
$ |
0.49 |
$ |
0.16 |
$ |
0.15 |
$ |
1.25 |
|||||||||||||
|
Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited) |
||||||||||||||||||||||||
|
Three Months Ended |
Year Ended |
|||||||||||||||||||||||
|
2023 |
2022 |
2022 |
||||||||||||||||||||||
|
(Dollars in thousands, except share and |
March 31 |
December 31 |
September 30 |
June 30 |
March 31 |
December 31 |
||||||||||||||||||
|
Earnings per share, basic |
$ |
0.60 |
$ |
0.45 |
$ |
0.50 |
$ |
0.17 |
$ |
0.16 |
$ |
1.28 |
||||||||||||
|
Earnings per share, diluted |
$ |
0.55 |
$ |
0.44 |
$ |
0.49 |
$ |
0.16 |
$ |
0.15 |
$ |
1.25 |
||||||||||||
|
Dividends on common stock |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
||||||||||||
|
Dividends on Series A Convertible |
$ |
16.88 |
$ |
20.44 |
$ |
- |
$ |
- |
$ |
- |
$ |
20.44 |
||||||||||||
|
Return on average assets (A) |
1.02 |
% |
0.84 |
% |
0.78 |
% |
0.29 |
% |
0.32 |
% |
0.58 |
% |
||||||||||||
|
Return on average common equity (A) |
10.28 |
% |
7.69 |
% |
8.74 |
% |
3.01 |
% |
2.81 |
% |
5.62 |
% |
||||||||||||
|
Return on average tangible common |
10.93 |
% |
8.19 |
% |
9.32 |
% |
3.22 |
% |
3.00 |
% |
6.00 |
% |
||||||||||||
|
Net interest margin (A) (C) |
3.79 |
% |
3.75 |
% |
3.77 |
% |
3.77 |
% |
4.09 |
% |
3.82 |
% |
||||||||||||
|
Efficiency ratio (D) |
63.47 |
% |
66.74 |
% |
67.06 |
% |
78.52 |
% |
75.09 |
% |
71.40 |
% |
||||||||||||
|
Capital Ratios |
||||||||||||||||||||||||
|
Third Coast Bancshares, Inc. (consolidated): |
||||||||||||||||||||||||
|
Total common equity to total assets |
8.31 |
% |
8.36 |
% |
8.82 |
% |
8.99 |
% |
9.91 |
% |
8.36 |
% |
||||||||||||
|
Tangible common equity to tangible |
7.86 |
% |
7.90 |
% |
8.32 |
% |
8.47 |
% |
9.33 |
% |
7.90 |
% |
||||||||||||
|
Common equity tier 1 (to risk weighted assets) |
7.89 |
% |
N/A |
N/A |
N/A |
N/A |
N/A |
|||||||||||||||||
|
Tier 1 capital (to risk weighted assets) |
9.61 |
% |
N/A |
N/A |
N/A |
N/A |
N/A |
|||||||||||||||||
|
Total capital (to risk weighted assets) |
12.63 |
% |
N/A |
N/A |
N/A |
N/A |
N/A |
|||||||||||||||||
|
Tier 1 capital (to average assets) |
10.14 |
% |
N/A |
N/A |
N/A |
N/A |
N/A |
|||||||||||||||||
|
Third Coast Bank, SSB: |
||||||||||||||||||||||||
|
Common equity tier 1 (to risk weighted assets) |
12.32 |
% |
12.95 |
% |
13.04 |
% |
11.60 |
% |
12.36 |
% |
12.95 |
% |
||||||||||||
|
Tier 1 capital (to risk weighted assets) |
12.32 |
% |
12.95 |
% |
13.04 |
% |
11.60 |
% |
12.36 |
% |
12.95 |
% |
||||||||||||
|
Total capital (to risk weighted assets) |
13.25 |
% |
13.79 |
% |
13.87 |
% |
12.40 |
% |
13.17 |
% |
13.79 |
% |
||||||||||||
|
Tier 1 capital (to average assets) |
13.00 |
% |
13.11 |
% |
13.29 |
% |
12.47 |
% |
13.66 |
% |
13.11 |
% |
||||||||||||
|
Other Data |
||||||||||||||||||||||||
|
Weighted average shares: |
||||||||||||||||||||||||
|
Basic |
13,532,545 |
13,528,504 |
13,490,680 |
13,454,423 |
13,385,324 |
13,465,196 |
||||||||||||||||||
|
Diluted |
16,801,815 |
13,760,076 |
13,678,962 |
13,822,522 |
13,755,026 |
13,754,610 |
||||||||||||||||||
|
Period end shares outstanding |
13,579,498 |
13,531,736 |
13,521,826 |
13,464,093 |
13,445,782 |
13,531,736 |
||||||||||||||||||
|
Book value per share |
$ |
23.63 |
$ |
23.32 |
$ |
22.93 |
$ |
22.43 |
$ |
22.40 |
$ |
23.32 |
||||||||||||
|
Tangible book value per share (B) |
$ |
22.22 |
$ |
21.90 |
$ |
21.51 |
$ |
21.00 |
$ |
20.97 |
$ |
21.90 |
||||||||||||
|
___________ | |
|
(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 11 and 12 of this |
|
(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 credit losses are not part of this calculation. |
|
Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited) | ||||||||||||||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||||||||||||||
|
March 31, 2023 |
December 31, 2022 |
March 31, 2022 |
||||||||||||||||||||||||||||
|
(Dollars in thousands) |
Average |
Interest |
Average |
Average |
Interest |
Average |
Average |
Interest |
Average |
|||||||||||||||||||||
|
Assets |
||||||||||||||||||||||||||||||
|
Interest-earnings assets: |
||||||||||||||||||||||||||||||
|
Investment securities |
$ |
178,197 |
$ |
1,548 |
3.52 % |
$ |
170,463 |
$ |
1,388 |
3.23 % |
$ |
28,170 |
$ |
276 |
3.97 % |
|||||||||||||||
|
Loans, gross |
3,170,828 |
53,911 |
6.90 % |
3,041,923 |
48,081 |
6.27 % |
2,208,462 |
26,682 |
4.90 % |
|||||||||||||||||||||
|
Federal funds sold and other |
167,694 |
1,920 |
4.64 % |
185,887 |
1,682 |
3.59 % |
260,275 |
226 |
0.35 % |
|||||||||||||||||||||
|
Total interest-earning assets |
3,516,719 |
57,379 |
6.62 % |
3,398,273 |
51,151 |
5.97 % |
2,496,907 |
27,184 |
4.42 % |
|||||||||||||||||||||
|
Less allowance for loan losses |
(34,879) |
(29,563) |
(20,395) |
|||||||||||||||||||||||||||
|
Total interest-earning assets, |
3,481,840 |
3,368,710 |
2,476,512 |
|||||||||||||||||||||||||||
|
Noninterest-earning assets |
182,869 |
203,834 |
150,871 |
|||||||||||||||||||||||||||
|
Total assets |
$ |
3,664,709 |
$ |
3,572,544 |
$ |
2,627,383 |
||||||||||||||||||||||||
|
Liabilities and Shareholders' |
||||||||||||||||||||||||||||||
|
Interest-bearing liabilities: |
||||||||||||||||||||||||||||||
|
Interest-bearing deposits |
$ |
2,595,750 |
$ |
22,092 |
3.45 % |
$ |
2,354,990 |
$ |
15,682 |
2.64 % |
$ |
1,640,273 |
$ |
1,844 |
0.46 % |
|||||||||||||||
|
Notes payable |
111,250 |
1,814 |
6.61 % |
111,199 |
1,761 |
6.28 % |
1,891 |
23 |
4.93 % |
|||||||||||||||||||||
|
FHLB advances |
52,803 |
643 |
4.94 % |
166,783 |
1,557 |
3.70 % |
50,000 |
107 |
0.87 % |
|||||||||||||||||||||
|
Total interest-bearing liabilities |
2,759,803 |
24,549 |
3.61 % |
2,632,972 |
19,000 |
2.86 % |
1,692,164 |
1,974 |
0.47 % |
|||||||||||||||||||||
|
Noninterest-bearing deposits |
477,706 |
517,075 |
620,900 |
|||||||||||||||||||||||||||
|
Other liabilities |
42,406 |
41,226 |
12,782 |
|||||||||||||||||||||||||||
|
Total liabilities |
3,279,915 |
3,191,273 |
2,325,846 |
|||||||||||||||||||||||||||
|
Shareholders' equity |
384,794 |
381,271 |
301,537 |
|||||||||||||||||||||||||||
|
Total liabilities and |
$ |
3,664,709 |
$ |
3,572,544 |
$ |
2,627,383 |
||||||||||||||||||||||||
|
Net interest income |
$ |
32,830 |
$ |
32,151 |
$ |
25,210 |
||||||||||||||||||||||||
|
Net interest spread (1) |
3.01 % |
3.11 % |
3.95 % |
|||||||||||||||||||||||||||
|
Net interest margin (2) |
3.79 % |
3.75 % |
4.09 % |
|||||||||||||||||||||||||||
|
___________ | |
|
(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 |
|||||||||||||||||||||
|
2023 |
2022 |
||||||||||||||||||||
|
(Dollars in thousands) |
March 31 |
December 31 |
September 30 |
June 30 |
March 31 |
||||||||||||||||
|
Period-end Loan Portfolio: |
|||||||||||||||||||||
|
Real estate loans: |
|||||||||||||||||||||
|
Commercial real estate: |
|||||||||||||||||||||
|
Non-farm non-residential owner occupied |
$ |
508,936 |
$ |
493,791 |
$ |
529,046 |
$ |
508,864 |
$ |
477,573 |
|||||||||||
|
Non-farm non-residential non-owner occupied |
511,546 |
506,012 |
490,503 |
464,530 |
463,618 |
||||||||||||||||
|
Residential |
286,358 |
308,775 |
283,432 |
273,415 |
225,649 |
||||||||||||||||
|
Construction, development & other |
627,143 |
567,851 |
500,879 |
440,925 |
414,653 |
||||||||||||||||
|
Farmland |
22,512 |
22,820 |
22,770 |
23,895 |
13,467 |
||||||||||||||||
|
Commercial & industrial |
1,112,638 |
1,058,910 |
1,029,231 |
914,845 |
756,005 |
||||||||||||||||
|
Consumer |
3,280 |
3,872 |
3,728 |
3,706 |
3,304 |
||||||||||||||||
|
Municipal and other |
140,913 |
145,520 |
113,263 |
118,997 |
93,676 |
||||||||||||||||
|
Total loans |
$ |
3,213,326 |
$ |
3,107,551 |
$ |
2,972,852 |
$ |
2,749,177 |
$ |
2,447,945 |
|||||||||||
|
Asset Quality: |
|||||||||||||||||||||
|
Nonaccrual loans |
$ |
9,482 |
$ |
10,963 |
$ |
9,439 |
$ |
9,806 |
$ |
9,896 |
|||||||||||
|
Loans > 90 days and still accruing |
- |
518 |
98 |
387 |
40 |
||||||||||||||||
|
Restructured loans--accruing |
780 |
780 |
781 |
785 |
790 |
||||||||||||||||
|
Total nonperforming loans |
$ |
10,262 |
$ |
12,261 |
$ |
10,318 |
$ |
10,978 |
$ |
10,726 |
|||||||||||
|
Other real estate owned |
- |
- |
- |
- |
1,666 |
||||||||||||||||
|
Total nonperforming assets |
$ |
10,262 |
$ |
12,261 |
$ |
10,318 |
$ |
10,978 |
$ |
12,392 |
|||||||||||
|
QTD Net (recoveries) charge-offs |
$ |
(364) |
$ |
708 |
$ |
457 |
$ |
(4) |
$ |
(17) |
|||||||||||
|
Nonaccrual loans: |
|||||||||||||||||||||
|
Real estate loans: |
|||||||||||||||||||||
|
Commercial real estate: |
|||||||||||||||||||||
|
Non-farm non-residential owner occupied |
$ |
855 |
$ |
1,699 |
$ |
921 |
$ |
964 |
$ |
986 |
|||||||||||
|
Non-farm non-residential non-owner occupied |
282 |
296 |
309 |
323 |
334 |
||||||||||||||||
|
Residential |
506 |
513 |
111 |
116 |
121 |
||||||||||||||||
|
Construction, development & other |
39 |
40 |
227 |
232 |
238 |
||||||||||||||||
|
Commercial & industrial |
7,800 |
8,390 |
7,846 |
8,165 |
8,210 |
||||||||||||||||
|
Consumer |
- |
20 |
20 |
- |
- |
||||||||||||||||
|
Purchased credit impaired |
- |
5 |
5 |
6 |
7 |
||||||||||||||||
|
Total nonaccrual loans |
$ |
9,482 |
$ |
10,963 |
$ |
9,439 |
$ |
9,806 |
$ |
9,896 |
|||||||||||
|
Asset Quality Ratios: |
|||||||||||||||||||||
|
Nonperforming assets to total assets |
0.27 |
% |
0.32 |
% |
0.29 |
% |
0.33 |
% |
0.41 |
% |
|||||||||||
|
Nonperforming loans to total loans |
0.32 |
% |
0.39 |
% |
0.35 |
% |
0.40 |
% |
0.44 |
% |
|||||||||||
|
Allowance for credit losses to total loans |
1.12 |
% |
0.98 |
% |
0.98 |
% |
0.97 |
% |
0.95 |
% |
|||||||||||
|
QTD Net (recoveries) charge-offs to average loans (annualized) |
(0.05) |
% |
0.09 |
% |
0.06 |
% |
0.00 |
% |
0.00 |
% |
|||||||||||
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 Common Equity, Tangible Book Value Per Share, Tangible Common Equity to Tangible Assets, 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 |
|||||||||||||||||||||||
|
2023 |
2022 |
2022 |
||||||||||||||||||||||
|
(Dollars in thousands, except share and per share data) |
March 31 |
December 31 |
September 30 |
June 30 |
March 31 |
December 31 |
||||||||||||||||||
|
Tangible Common Equity: |
||||||||||||||||||||||||
|
Total shareholders' equity |
$ |
387,044 |
$ |
381,780 |
$ |
376,354 |
$ |
301,967 |
$ |
301,203 |
$ |
381,780 |
||||||||||||
|
Less: Preferred stock including additional paid in capital |
66,225 |
66,225 |
66,273 |
- |
- |
66,225 |
||||||||||||||||||
|
Total common equity |
320,819 |
315,555 |
310,081 |
301,967 |
301,203 |
315,555 |
||||||||||||||||||
|
Less: Goodwill and core deposit intangibles, net |
19,124 |
19,165 |
19,205 |
19,245 |
19,286 |
19,165 |
||||||||||||||||||
|
Tangible common equity |
$ |
301,695 |
$ |
296,390 |
$ |
290,876 |
$ |
282,722 |
$ |
281,917 |
$ |
296,390 |
||||||||||||
|
Common shares outstanding at end of period |
13,579,498 |
13,531,736 |
13,521,826 |
13,464,093 |
13,445,782 |
13,531,736 |
||||||||||||||||||
|
Book Value Per Share |
$ |
23.63 |
$ |
23.32 |
$ |
22.93 |
$ |
22.43 |
$ |
22.40 |
$ |
23.32 |
||||||||||||
|
Tangible Book Value Per Share |
$ |
22.22 |
$ |
21.90 |
$ |
21.51 |
$ |
21.00 |
$ |
20.97 |
$ |
21.90 |
||||||||||||
|
Tangible Assets: |
||||||||||||||||||||||||
|
Total assets |
$ |
3,859,657 |
$ |
3,773,148 |
$ |
3,516,845 |
$ |
3,358,062 |
$ |
3,040,388 |
$ |
3,773,148 |
||||||||||||
|
Adjustments: Goodwill and core deposit intangibles, net |
19,124 |
19,165 |
19,205 |
19,245 |
19,286 |
19,165 |
||||||||||||||||||
|
Tangible assets |
$ |
3,840,533 |
$ |
3,753,983 |
$ |
3,497,640 |
$ |
3,338,817 |
$ |
3,021,102 |
$ |
3,753,983 |
||||||||||||
|
Total Common Equity to Total Assets |
8.31 |
% |
8.36 |
% |
8.82 |
% |
8.99 |
% |
9.91 |
% |
8.36 |
% |
||||||||||||
|
Tangible Common Equity to Tangible Assets |
7.86 |
% |
7.90 |
% |
8.32 |
% |
8.47 |
% |
9.33 |
% |
7.90 |
% |
||||||||||||
|
Average Tangible Common Equity: |
||||||||||||||||||||||||
|
Average shareholders' equity |
$ |
384,794 |
$ |
381,271 |
$ |
308,092 |
$ |
303,135 |
$ |
301,537 |
$ |
323,685 |
||||||||||||
|
Less: Average preferred stock including additional paid in capital |
66,225 |
66,329 |
720 |
- |
- |
16,900 |
||||||||||||||||||
|
Average common equity |
318,569 |
314,942 |
307,372 |
303,135 |
301,537 |
306,785 |
||||||||||||||||||
|
Less: Average goodwill and core deposit intangibles, net |
19,149 |
19,184 |
19,225 |
19,265 |
19,306 |
19,245 |
||||||||||||||||||
|
Average tangible common equity |
$ |
299,420 |
$ |
295,758 |
$ |
288,147 |
$ |
283,870 |
$ |
282,231 |
$ |
287,540 |
||||||||||||
|
Net Income |
$ |
9,243 |
$ |
7,525 |
$ |
6,770 |
$ |
2,277 |
$ |
2,087 |
$ |
18,659 |
||||||||||||
|
Less: Dividends paid on preferred stock |
1,171 |
1,418 |
- |
- |
- |
1,418 |
||||||||||||||||||
|
Net Income Available to Common Shareholders |
$ |
8,072 |
$ |
6,107 |
$ |
6,770 |
$ |
2,277 |
$ |
2,087 |
$ |
17,241 |
||||||||||||
|
Return on Average Common Equity |
10.28 |
% |
7.69 |
% |
8.74 |
% |
3.01 |
% |
2.81 |
% |
5.62 |
% |
||||||||||||
|
Return on Average Tangible Common Equity |
10.93 |
% |
8.19 |
% |
9.32 |
% |
3.22 |
% |
3.00 |
% |
6.00 |
% |
||||||||||||
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-2023-first-quarter-financial-results-301808605.html
SOURCE Third Coast Bancshares