THIRD COAST BANCSHARES, INC. REPORTS SECOND QUARTER 2023 FINANCIAL RESULTS

Book Value grows 2.5% and Tangible Book Value(1) grows 2.7% in second quarter 2023
Total assets reached $3.96 billion

HOUSTON, July 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 second quarter financial results.

Financial Highlights

  • Book value per share and tangible book value per share(1) increased to $24.23 and $22.82, respectively, as of June 30, 2023 compared to $23.63 and $22.22, respectively, as of March 31, 2023 and to $22.43 and $21.00, respectively, as of June 30, 2022.
  • Net income for the second quarter of 2023 totaled $8.9 million compared to $9.2 million for the first quarter of 2023 and $2.3 million for the second quarter of 2022.
  • Return on average assets remained strong at 0.96% annualized for the second quarter of 2023 compared to 1.02% annualized for the first quarter of 2023 and 0.29% annualized for the second quarter of 2022.
  • Total assets reached $3.96 billion, an increase of $103.8 million, or 2.7%, over the $3.86 billion reported as of March 31, 2023 and 18.0% over the $3.36 billion reported as of June 30, 2022.
  • Loans held for investment grew $121.0 million to $3.33 billion, or 3.8%, over the $3.21 billion reported as of March 31, 2023 and 21.3% over the $2.75 billion reported as of June 30, 2022.
  • Deposits reached $3.41 billion, an increase of $85.7 million, or 2.6%, over the $3.32 billion reported as of March 31, 2023 and 17.6% over the $2.90 billion reported as of June 30, 2022. Noninterest-bearing deposits represented 15.5% of total deposits compared to 15.6% as of March 31, 2023.

Bart Caraway, Chairman, President, and CEO of Third Coast, announced a 2.5% growth in Book Value and 2.7% growth in Tangible Book Value for the second quarter. Mr. Caraway stated "this is great news for investors and reflects positively on the overall financial health of the Company. Third Coast remains well-capitalized, which allows us to continue our commitment to customer satisfaction while preparing for future market fluctuations.

"Third Coast has seen strong performance, with total assets increasing by $103.8 million, or 2.7%, loans held for investment growing by $121 million, or 3.8%, and deposits increasing by $85.7 million, or 2.6%. I believe that Third Coast is uniquely positioned to weather market turmoil for the remainder of the year, thanks to excellent leadership, strong credit quality, and a focus on maintaining performance," Mr. Caraway concluded.

____________________________

(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.

Operating Results

Net Income and Earnings Per Share

Net income totaled $8.9 million for the second quarter of 2023, compared to $9.2 million for the first quarter of 2023 and $2.3 million for the second quarter of 2022. Net income available to common shareholders totaled $7.7 million for the second quarter of 2023, compared to $8.1 million for the first quarter of 2023 and $2.3 million for the second quarter of 2022. Dividends on our Series A Convertible Non-Cumulative Preferred Stock totaled $1.2 million for each of the quarters ended June 30, 2023 and March 31, 2023. No shares of our Series A Convertible Non-Cumulative Preferred Stock were outstanding during the quarter ended June 30, 2022. Basic earnings per share and diluted earnings per share were $0.57 per share and $0.53 per share, respectively, in the second quarter of 2023 compared to $0.60 per share and $0.55 per share, respectively, in the first quarter of 2023 and $0.17 per share and $0.16 per share, respectively, in the second quarter of 2022.

Net Interest Margin and Net Interest Income

The net interest margin for the second quarter of 2023 was 3.82% compared to 3.79% for the first quarter of 2023 and 3.77% for the second quarter of 2022. The yield on loans for the second quarter of 2023 was 7.29% compared to 6.90% for the first quarter of 2023 and 4.73% for the second quarter of 2022. The increase in yield on loans during the second quarter of 2023 was primarily due to the increase in the Prime Rate.

Net interest income totaled $34.1 million for the second quarter of 2023, an increase of 3.9% from $32.8 million for the first quarter of 2023 and an increase of 22.9% from $27.7 million for the second quarter of 2022. Interest income totaled $62.7 million for the second quarter of 2023, an increase of 9.3% from $57.4 million for the first quarter of 2023 and an increase of 92.9% from $32.5 million for the second quarter of 2022. Interest and fees on loans increased $5.4 million, or 10.0%, compared to the first quarter of 2023, and increased $28.1 million, or 90.3%, from the second quarter of 2022. Interest expense was $28.6 million for the second quarter of 2023, an increase of $4.1 million, or 16.6% from $24.5 million for the first quarter of 2023 and an increase of $23.8 million, or 499.8%, from $4.8 million for the second quarter of 2022.

Noninterest Income and Noninterest Expense

Noninterest income totaled $2.3 million for the second quarter of 2023, compared to $1.9 million for the first quarter of 2023 and $1.3 million for the second quarter of 2022.

Noninterest expense totaled $23.8 million for the second quarter of 2023, up from $22.0 million for the first quarter of 2023 and up from $22.8 million for the second quarter of 2022. The increase from the first quarter of 2023 was primarily due to increased salary expenses related to additional employees. The year-over-year increase was primarily attributed to increased salary expenses related to additional employees and administrative expenses related to opening new branches and administrative offices. The employee headcount increased from 353 as of June 30, 2022 and 370 as of March 31, 2023 to 377 as of June 30, 2023.

The efficiency ratio was 65.52% for the second quarter of 2023, compared to 63.47% for the first quarter of 2023 and 78.52% for the second quarter of 2022.

Balance Sheet Highlights

Loan Portfolio and Composition

For the quarter ended June 30, 2023, gross loans increased to $3.33 billion, an increase of $121.0 million, or 3.8%, from $3.21 billion as of March 31, 2023, and an increase of $585.1 million, or 21.3%, from $2.75 billion as of June 30, 2022. We believe the loan growth was well diversified with real estate loans up $35.2 million, commercial loans up $52.0 million and other loans up $34.1 million from March 31, 2023.

Asset Quality

Non-performing assets were $10.0 million at June 30, 2023, compared to $9.5 million at March 31, 2023 and $11.0 million at June 30, 2022. The provision for credit loss recorded for the second quarter of 2023 was $1.4 million and related to provisioning for new loans. The allowance for credit losses increased to $37.2 million, or 1.12% of the $3.33 billion in gross loans outstanding as of June 30, 2023.

As of June 30, 2023, the nonperforming loans to loans held for investment ratio remained low at 0.30%, compared to 0.30% as of March 31, 2023 and 0.40% as of June 30, 2022. During the three months ended June 30, 2023 and 2022, the Company recorded net charge-offs of $72,000 and net recoveries of $4,000, respectively.

Deposits and Composition

Deposits totaled $3.41 billion as of June 30, 2023, an increase of 2.6% from $3.32 billion as of March 31, 2023, and an increase of 17.6% from $2.90 billion as of June 30, 2022. Noninterest-bearing demand deposits increased from $516.9 million as of March 31, 2023 to $529.5 million as of June 30, 2023. Noninterest-bearing demand deposits represented 15.5% of total deposits as of June 30, 2023, compared to 15.6% of total deposits as of March 31, 2023. As of June 30, 2023, interest-bearing demand deposits decreased $178.6 million, or 7.1%, time deposits increased $261.5 million, or 109.4%, and savings accounts decreased $9.7 million, or 26.9%, from March 31, 2023.

The average cost of deposits was 3.28% for the second quarter of 2023, representing a 36 basis point increase from the first quarter of 2023 and a 276 basis point increase from the second quarter of 2022 due primarily to time deposit growth and the increase in rates paid on interest-bearing demand deposits.

Earnings Conference Call

Third Coast has scheduled a conference call to discuss 2023 second quarter results, which will be broadcast live over the Internet, on Thursday, July 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 August 3, 2023, and may be accessed by dialing 201-612-7415 and using passcode 13735407#. 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)


June 30



March 31



December 31



September 30



June 30


















ASSETS
















Cash and cash equivalents:
















Cash and due from banks


$

244,813



$

309,153



$

329,864



$

216,623



$

317,462


Federal funds sold



23,206




1,789




2,150




1,225




2,741


Total cash and cash equivalents



268,019




310,942




332,014




217,848




320,203


















Interest bearing time deposits in other banks



-




-




-




132




132


Investment securities available-for-sale



194,467




180,376




176,067




160,437




157,261


Loans held for investment



3,334,277




3,213,326




3,107,551




2,972,852




2,749,177


Less:  allowance for credit losses



(37,243)




(35,915)




(30,351)




(29,109)




(26,666)


Loans, net



3,297,034




3,177,411




3,077,200




2,943,743




2,722,511


Accrued interest receivable



19,579




19,026




18,340




16,246




12,568


Premises and equipment, net



28,720




28,504




28,662




25,449




22,888


Bank-owned life insurance



64,762




64,235




60,761




60,263




51,919


Non-marketable securities, at cost



20,687




14,751




14,618




27,136




15,213


Deferred tax asset, net



7,808




7,146




6,303




8,097




7,179


Fair value hedge assets



9,372




8,793




9,213




11,508




6,892


Right-of-use assets - operating leases



21,778




19,328




17,872




18,266




12,648


Core Deposit Intangible, net



1,050




1,090




1,131




1,171




1,211


Goodwill



18,034




18,034




18,034




18,034




18,034


Other assets



12,172




10,021




12,933




8,515




9,403


Total assets


$

3,963,482



$

3,859,657



$

3,773,148



$

3,516,845



$

3,358,062


















LIABILITIES
















Deposits:
















Noninterest bearing


$

529,474



$

516,909



$

486,114



$

517,265



$

519,614


Interest bearing



2,878,807




2,805,624




2,750,032




2,467,049




2,378,650


Total deposits



3,408,281




3,322,533




3,236,146




2,984,314




2,898,264


















Accrued interest payable



3,522




1,636




2,545




2,925




1,683


Fair value hedge liabilities



9,177




7,271




9,221




11,514




6,912


Lease liability - operating leases



22,439




19,845




18,209




18,407




12,650


Other liabilities



12,792




10,054




14,024




12,158




7,344


FHLB advances



-




-




-




-




18,000


Line of credit - Senior Debt



30,875




30,875




30,875




30,875




30,875


Note payable - Subordinated Debentures, net



80,451




80,399




80,348




80,298




80,367


  Total liabilities



3,567,537




3,472,613




3,391,368




3,140,491




3,056,095


















SHAREHOLDERS' EQUITY
















Series A Convertible Non-Cumulative Preferred Stock



69




69




69




69




-


Series B Convertible Perpetual Preferred Stock



-




-




-




-




-


Common stock



13,688




13,658




13,610




13,600




13,543


Common stock - non-voting



-




-




-




-




-


Additional paid-in capital



318,769




318,350




318,033




317,798




250,413


Retained earnings



65,889




58,182




53,270




47,163




40,393


Accumulated other comprehensive loss



(1,371)




(2,116)




(2,103)




(1,177)




(1,283)


Treasury stock, at cost



(1,099)




(1,099)




(1,099)




(1,099)




(1,099)


Total shareholders' equity



395,945




387,044




381,780




376,354




301,967


Total liabilities and shareholders' equity


$

3,963,482



$

3,859,657



$

3,773,148



$

3,516,845



$

3,358,062


 

Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)




Three Months Ended



Six Months Ended





2023



2022



2023



2022



(Dollars in thousands, except per share data)


June 30



March 31



December
31



September
30



June 30



June 30



June 30


























INTEREST INCOME:























Loans, including fees


$

59,295



$

53,911



$

48,081



$

40,498



$

31,164



$

113,206



$

57,846



Investment securities available-for-sale



2,029




1,548




1,388




1,367




894




3,577




1,170



Federal funds sold and other



1,389




1,920




1,682




1,237




451




3,309




677



Total interest income



62,713




57,379




51,151




43,102




32,509




120,092




59,693


























INTEREST EXPENSE:























Deposit accounts



24,936




22,092




15,682




9,727




3,443




47,028




5,287



FHLB advances and notes payable



3,681




2,457




3,318




2,020




1,328




6,138




1,458



Total interest expense



28,617




24,549




19,000




11,747




4,771




53,166




6,745


























Net interest income



34,096




32,830




32,151




31,355




27,738




66,926




52,948


























Provision for credit losses



1,400




1,200




1,950




2,900




3,350




2,600




7,350


























Net interest income after credit loss expense



32,696




31,630




30,201




28,455




24,388




64,326




45,598


























NONINTEREST INCOME:























Service charges and fees



720




779




706




772




617




1,499




1,236



Gain on sale of SBA loans



-




-




123




729




98




-




98



Gain on sale of securities



-




97




-




-




-




97




-



Earnings on bank-owned life insurance



526




475




497




424




248




1,001




391



Derivative fees



247




(1)




117




313




123




246




829



Other



787




552




310




300




180




1,339




378



Total noninterest income



2,280




1,902




1,753




2,538




1,266




4,182




2,932


























NONINTEREST EXPENSE:























Salaries and employee benefits



15,033




13,712




14,473




14,719




13,994




28,745




27,318



Data processing and network expense



1,261




1,203




837




1,256




932




2,464




1,854



Occupancy and equipment expense



2,852




2,633




2,591




2,232




1,830




5,485




3,703



Legal and professional



1,547




1,930




1,887




1,353




2,001




3,477




3,747



Loan operations and other real estate owned



302




(35)




144




284




282




267




560



Advertising and marketing



812




686




580




438




467




1,498




894



Telephone and communications



129




139




175




122




99




268




199



Software purchases and maintenance



455




352




295




318




201




807




399



Regulatory assessments



458




666




863




1,000




956




1,124




1,601



Loss on sale of other real estate owned



-




-




-




-




350




-




350



Other



986




758




782




1,006




1,661




1,744




2,329



Total noninterest expense



23,835




22,044




22,627




22,728




22,773




45,879




42,954


























NET INCOME BEFORE INCOME TAX
        EXPENSE



11,141




11,488




9,327




8,265




2,881




22,629




5,576


























Income tax expense



2,250




2,245




1,802




1,495




604




4,495




1,212


























NET INCOME



8,891




9,243




7,525




6,770




2,277




18,134




4,364


























Preferred stock dividends declared



1,184




1,171




1,418




-




-




2,355




-


























NET INCOME AVAILABLE TO COMMON
        SHAREHOLDERS


$

7,707



$

8,072



$

6,107



$

6,770



$

2,277



$

15,779



$

4,364


























EARNINGS PER COMMON SHARE:























Basic earnings per share


$

0.57



$

0.60



$

0.45



$

0.50



$

0.17



$

1.16



$

0.33



Diluted earnings per share


$

0.53



$

0.55



$

0.44



$

0.49



$

0.16



$

1.08



$

0.32



 

Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)




Three Months Ended



Six Months Ended




2023



2022



2023



2022


(Dollars in thousands, except share and per
share data)


June 30



March 31



December
31



September
30



June 30



June 30



June 30
























Earnings per share, basic


$

0.57



$

0.60



$

0.45



$

0.50



$

0.17



$

1.16



$

0.33


Earnings per share, diluted


$

0.53



$

0.55



$

0.44



$

0.49



$

0.16



$

1.08



$

0.32


Dividends on common stock


$

-



$

-



$

-



$

-



$

-



$

-



$

-


Dividends on Series A Convertible
        Non-Cumulative Preferred Stock


$

17.06



$

16.88



$

20.44



$

-



$

-



$

33.94



$

-
























Return on average assets (A)



0.96

%



1.02

%



0.84

%



0.78

%



0.29

%



0.99

%



0.31

%

Return on average common equity (A)



9.44

%



10.28

%



7.69

%



8.74

%



3.01

%



9.85

%



2.91

%

Return on average tangible common
        equity (A) (B)



10.02

%



10.93

%



8.19

%



9.32

%



3.22

%



10.47

%



3.11

%

Net interest margin (A) (C)



3.82

%



3.79

%



3.75

%



3.77

%



3.77

%



3.80

%



3.90

%

Efficiency ratio (D)



65.52

%



63.47

%



66.74

%



67.06

%



78.52

%



64.52

%



76.87

%























Capital Ratios






















Third Coast Bancshares, Inc. (consolidated):






















Total common equity to total assets



8.32

%



8.31

%



8.36

%



8.82

%



8.99

%



8.32

%



8.99

%

Tangible common equity to tangible
         assets (B)



7.88

%



7.86

%



7.90

%



8.32

%



8.47

%



7.88

%



8.47

%

Common equity tier 1 (to risk weighted
        assets)



7.75

%



7.89

%


N/A



N/A



N/A




7.75

%


N/A


Tier 1 capital (to risk weighted assets)



9.39

%



9.61

%


N/A



N/A



N/A




9.39

%


N/A


Total capital (to risk weighted assets)



12.31

%



12.63

%


N/A



N/A



N/A




12.31

%


N/A


Tier 1 capital (to average assets)



10.17

%



10.14

%


N/A



N/A



N/A




10.17

%


N/A
























Third Coast Bank, SSB:






















Common equity tier 1 (to risk weighted
        assets)



12.06

%



12.32

%



12.95

%



13.04

%



11.60

%



12.06

%



11.60

%

Tier 1 capital (to risk weighted assets)



12.06

%



12.32

%



12.95

%



13.04

%



11.60

%



12.06

%



11.60

%

Total capital (to risk weighted assets)



12.99

%



13.25

%



13.79

%



13.87

%



12.40

%



12.99

%



12.40

%

Tier 1 capital (to average assets)



13.06

%



13.00

%



13.11

%



13.29

%



12.47

%



13.06

%



12.47

%























Other Data






















Weighted average shares:






















Basic



13,588,747




13,532,545




13,528,504




13,490,680




13,454,423




13,560,802




13,420,065


Diluted



16,855,822




16,801,815




13,760,076




13,678,962




13,822,522




16,828,974




13,788,965


Period end shares outstanding



13,609,697




13,579,498




13,531,736




13,521,826




13,464,093




13,609,697




13,464,093


Book value per share


$

24.23



$

23.63



$

23.32



$

22.93



$

22.43



$

24.23



$

22.43


Tangible book value per share (B)


$

22.82



$

22.22



$

21.90



$

21.51



$

21.00



$

22.82



$

21.00


___________

(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



June 30, 2023


March 31, 2023


June 30, 2022

(Dollars in thousands)


Average
Outstanding
Balance



Interest
Earned/
Paid(3)



Average
Yield/
Rate(4)


Average
Outstanding
Balance



Interest
Earned/
Paid(3)



Average
Yield/
Rate(4)


Average
Outstanding
Balance



Interest
Earned/
Paid(3)



Average
Yield/
Rate(4)


























Assets

























Interest-earnings assets:

























Investment securities


$

208,980



$

2,029



3.89 %


$

178,197



$

1,548



3.52 %


$

112,793



$

894



3.18 %

Loans, gross



3,262,804




59,295



7.29 %



3,170,828




53,911



6.90 %



2,641,330




31,164



4.73 %

Federal funds sold and other
        interest-earning assets



112,239




1,389



4.96 %



167,694




1,920



4.64 %



200,801




451



0.90 %

Total interest-earning assets



3,584,023




62,713



7.02 %



3,516,719




57,379



6.62 %



2,954,924




32,509



4.41 %

Less allowance for loan losses



(36,381)









(34,879)









(24,818)







Total interest-earning assets, net of
        allowance



3,547,642









3,481,840









2,930,106







Noninterest-earning assets



185,705









182,869









201,734







Total assets


$

3,733,347








$

3,664,709








$

3,131,840
































Liabilities and Shareholders' Equity

























Interest-bearing liabilities:

























Interest-bearing deposits


$

2,581,560



$

24,936



3.87 %


$

2,595,750



$

22,092



3.45 %


$

2,222,677



$

3,443



0.62 %

Notes payable



111,301




1,858



6.70 %



111,250




1,814



6.61 %



83,390




1,208



5.81 %

FHLB advances



135,826




1,823



5.38 %



52,803




643



4.94 %



46,319




120



1.04 %

Total interest-bearing liabilities



2,828,687




28,617



4.06 %



2,759,803




24,549



3.61 %



2,352,386




4,771



0.81 %

Noninterest-bearing deposits



470,564









477,706









453,936







Other liabilities



40,323









42,406









22,383







Total liabilities



3,339,574









3,279,915









2,828,705







Shareholders' equity



393,773









384,794









303,135







Total liabilities and shareholders'
        equity


$

3,733,347








$

3,664,709








$

3,131,840







Net interest income





$

34,096








$

32,830








$

27,738




Net interest spread (1)








2.96 %








3.01 %








3.60 %

Net interest margin (2)








3.82 %








3.79 %








3.77 %

___________

(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. 

(4)

Annualized.

 

Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)




Six Months Ended



June 30, 2023


June 30, 2022

(Dollars in thousands)


Average
Outstanding
Balance



Interest
Earned/
Paid(3)



Average
Yield/
Rate(4)


Average
Outstanding
Balance



Interest
Earned/
Paid(3)



Average
Yield/
Rate(4)


















Assets

















Interest-earnings assets:

















   Investment securities


$

193,674



$

3,577



3.72 %


$

82,668



$

1,170



2.85 %

   Loans, gross



3,217,070




113,206



7.10 %



2,426,092




57,846



4.81 %

   Federal funds sold and other interest-earning
           assets



139,813




3,309



4.77 %



227,388




677



0.60 %

      Total interest-earning assets



3,550,557




120,092



6.82 %



2,736,148




59,693



4.40 %

Less allowance for loan losses



(35,634)









(22,619)







Total interest-earning assets, net of allowance



3,514,923









2,713,529







Noninterest-earning assets



184,294









167,476







      Total assets


$

3,699,217








$

2,881,005
























Liabilities and Shareholders' Equity

















Interest-bearing liabilities:

















   Interest-bearing deposits


$

2,588,616



$

47,028



3.66 %


$

1,933,083



$

5,287



0.55 %

   Notes payable



111,275




3,672



6.65 %



42,866




1,231



5.79 %

   FHLB advances



94,544




2,466



5.26 %



48,149




227



0.95 %

      Total interest-bearing liabilities



2,794,435




53,166



3.84 %



2,024,098




6,745



0.67 %

Noninterest-bearing deposits



474,115









536,958







Other liabilities



41,359









17,609







      Total liabilities



3,309,909









2,578,665







Shareholders' equity



389,308









302,340







      Total liabilities and shareholders' equity


$

3,699,217








$

2,881,005







Net interest income





$

66,926








$

52,948




Net interest spread (1)








2.98 %








3.73 %

Net interest margin (2)








3.80 %








3.90 %

___________


(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. 

(4)

Annualized.

 

Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)




Three Months Ended





2023



2022



(Dollars in thousands)


June 30



March 31



December 31



September 30



June 30




















Period-end Loan Portfolio:

















Real estate loans:

















Commercial real estate:

















Non-farm non-residential owner occupied


$

513,934



$

508,936



$

493,791



$

529,046



$

508,864



Non-farm non-residential non-owner occupied



547,120




511,546




506,012




490,503




464,530



Residential



310,842




286,358




308,775




283,432




273,415



Construction, development & other



595,601




627,143




567,851




500,879




440,925



Farmland



24,219




22,512




22,820




22,770




23,895



Commercial & industrial



1,164,624




1,112,638




1,058,910




1,029,231




914,845



Consumer



2,891




3,280




3,872




3,728




3,706



Municipal and other



175,046




140,913




145,520




113,263




118,997



Total loans


$

3,334,277



$

3,213,326



$

3,107,551



$

2,972,852



$

2,749,177




















Asset Quality:

















Nonaccrual loans


$

9,968



$

9,482



$

10,963



$

9,439



$

9,806



Loans > 90 days and still accruing



-




-




518




98




387



Restructured loans--accruing



-




-




780




781




785



Total nonperforming loans



9,968




9,482




12,261




10,318




10,978



Other real estate owned



-




-




-




-




-



Total nonperforming assets


$

9,968



$

9,482



$

12,261



$

10,318



$

10,978




















QTD Net charge-offs (recoveries)


$

72



$

(364)



$

708



$

457



$

(4)




















Nonaccrual loans:

















Real estate loans:

















Commercial real estate:

















Non-farm non-residential owner occupied


$

832



$

855



$

1,699



$

921



$

964



Non-farm non-residential non-owner occupied



1,417




282




296




309




323



Residential



494




506




513




111




116



Construction, development & other



36




39




45




232




238



Commercial & industrial



7,189




7,800




8,390




7,846




8,165



Consumer



-




-




20




20




-



Total nonaccrual loans


$

9,968



$

9,482



$

10,963



$

9,439



$

9,806




















Asset Quality Ratios:

















Nonperforming assets to total assets



0.25

%



0.25

%



0.32

%



0.29

%



0.33

%


Nonperforming loans to total loans



0.30

%



0.30

%



0.39

%



0.35

%



0.40

%


Allowance for credit losses to total loans



1.12

%



1.12

%



0.98

%



0.98

%



0.97

%


QTD Net charge-offs (recoveries) to average loans
        (annualized)



0.01

%



(0.05)

%



0.09

%



0.06

%



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



Six Months Ended




2023



2022



2023



2022


(Dollars in thousands, except share and per
share data)


June 30



March 31



December
31



September
30



June 30



June 30



June 30
























Tangible Common Equity:






















Total shareholders' equity


$

395,945



$

387,044



$

381,780



$

376,354



$

301,967



$

395,945



$

301,967


Less:  Preferred stock including additional paid in
        capital



66,225




66,225




66,225




66,273




-




66,225




-


Total common equity



329,720




320,819




315,555




310,081




301,967




329,720




301,967


Less:  Goodwill and core deposit intangibles, net



19,084




19,124




19,165




19,205




19,245




19,084




19,245


Tangible common equity


$

310,636



$

301,695



$

296,390



$

290,876



$

282,722



$

310,636



$

282,722
























Common shares outstanding at end of period



13,609,697




13,579,498




13,531,736




13,521,826




13,464,093




13,609,697




13,464,093
























Book Value Per Share


$

24.23



$

23.63



$

23.32



$

22.93



$

22.43



$

24.23



$

22.43


Tangible Book Value Per Share


$

22.82



$

22.22



$

21.90



$

21.51



$

21.00



$

22.82



$

21.00














































Tangible Assets:






















Total assets


$

3,963,482



$

3,859,657



$

3,773,148



$

3,516,845



$

3,358,062



$

3,963,482



$

3,358,062


Adjustments:  Goodwill and core deposit
        intangibles, net



19,084




19,124




19,165




19,205




19,245




19,084




19,245


Tangible assets


$

3,944,398



$

3,840,533



$

3,753,983



$

3,497,640



$

3,338,817



$

3,944,398



$

3,338,817
























Total Common Equity to Total Assets



8.32

%



8.31

%



8.36

%



8.82

%



8.99

%



8.32

%



8.99

%

Tangible Common Equity to Tangible Assets



7.88

%



7.86

%



7.90

%



8.32

%



8.47

%



7.88

%



8.47

%













































Average Tangible Common Equity:






















Average shareholders' equity


$

393,773



$

384,794



$

381,271



$

308,092



$

303,135



$

389,308



$

302,340


Less:  Average preferred stock including
        additional paid in capital



66,225




66,225




66,329




720




-




66,225




-


Average common equity



327,548




318,569




314,942




307,372




303,135




323,083




302,340


Less:  Average goodwill and core deposit
        intangibles, net



19,108




19,149




19,184




19,225




19,265




19,128




19,286


Average tangible common equity


$

308,440



$

299,420



$

295,758



$

288,147



$

283,870



$

303,955



$

283,054
























Net Income


$

8,891



$

9,243



$

7,525



$

6,770



$

2,277



$

18,134



$

4,364


Less: Dividends declared on preferred stock



1,184




1,171




1,418




-




-




2,355




-


Net Income Available to Common Shareholders


$

7,707



$

8,072



$

6,107



$

6,770



$

2,277



$

15,779



$

4,364
























Return on Average Common Equity(A)



9.44

%



10.28

%



7.69

%



8.74

%



3.01

%



9.85

%



2.91

%

Return on Average Tangible Common Equity(A)



10.02

%



10.93

%



8.19

%



9.32

%



3.22

%



10.47

%



3.11

%

___________

(A)

Interim periods annualized.

 

Contact:
Ken Dennard / Natalie Hairston
Dennard Lascar Investor Relations
(713) 529-6600
TCBX@dennardlascar.com

Cision View original content:https://www.prnewswire.com/news-releases/third-coast-bancshares-inc-reports--second-quarter-2023-financial-results-301886736.html

SOURCE Third Coast Bancshares

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