THIRD COAST BANCSHARES, INC. REPORTS STRONG 2021 FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS

Rhea-AI Summary

Third Coast Bancshares, Inc. (NASDAQ: TCBX) reported its fourth quarter and full year financial results for 2021. Loans held for investment surged by $456.3 million, or 28.3%, resulting in a 4.78% net interest margin. The company maintained strong asset quality with a low nonperforming loans ratio of 0.75%. However, net income fell to $354,000, with earnings per share dropping to $0.03, primarily due to a $6.1 million loan loss provision. Noninterest income increased significantly, but noninterest expenses also rose by 13.9%. Overall, Third Coast highlighted robust organic growth potential for 2022.

Positive

• Loans held for investment increased by $456.3 million, or 28.3%, quarter-over-quarter.
• Net interest margin climbed to 4.78%, a 29 basis point increase from Q3 2021.
• Noninterest income rose to $2.1 million, up from $964,000 in Q3 2021.

Negative

• Net income decreased to $354,000 compared to $2.4 million in Q3 2021.
• Earnings per share fell to $0.03 from $0.29 in Q3 2021 due to loan loss provisions.

HUMBLE, Texas, Jan. 27, 2022 /PRNewswire/ -- Third Coast Bancshares, Inc. (NASDAQ: TCBX) (the "Company" or "Third Coast"), the bank holding company for Third Coast Bank, SSB, today reported its 2021 fourth quarter and full year financial results.

Fourth Quarter 2021 Financial and Operational Highlights

• Completed successful initial public offering on November 12, 2021.
• Loans held for investment increased $456.3 million, 28.3% from quarter to quarter, or 113.2% annualized, for the three months ended December 31, 2021.
• Net interest margin for the fourth quarter of 2021 was 4.78%. The net interest margin was increased by 48 basis points from the accretion of Paycheck Protection Program (PPP) loan fees during the fourth quarter of 2021.
• Book value per share and tangible book value per share⁽¹⁾ increased to $22.39 and $20.94, respectively, at December 31, 2021.
• Noninterest-bearing demand deposits increased $167.0 million, or 45.8%, from September 30, 2021.
• Due to the robust loan growth in the fourth quarter described above, a provision for loan loss of $6.1 million was recorded for the quarter resulting in an 110 basis point reduction in the return on average assets for the fourth quarter. Return on average assets was 0.06% for the fourth quarter on an annualized basis. 

"I would like to congratulate our Third Coast team on another outstanding quarter of impressive financial and operational results," stated Bart Caraway, Third Coast's President and Chief Executive Officer. "Our fourth quarter results represent significantly improved organic growth primarily due to the exceptional performance of our legacy producers, the hiring of approximately 50 financial professionals and the addition of new product lines during the second half of 2021. Due in part to our commitment to serving our communities through the Paycheck Protection Program during the COVID-19 pandemic, coupled with our recruiting efforts during the year 2021, we have continued to attract additional high quality producing talent in 2022, which we believe will translate into continued outsized organic growth.

"We believe we are well positioned to continue to gain market share through our robust organic loan growth as we develop relationships with prospects, deepen relationships with existing customers, and advance our internal platform and processes in anticipation of the future. We are excited about the operating leverage and consequential earnings power we expect to generate through the added scale that continues to be our focus in 2022," added Mr. Caraway.

Loan Portfolio and Composition

During the fourth quarter of 2021, gross loans increased to $2.07 billion as of December 31, 2021, an increase of 28.3% from $1.61 billion as of September 30, 2021, and an increase of 32.9% from $1.56 billion as of December 31, 2020. PPP loans declined to $81.6 million at December 31, 2021 from $171.3 million at September 30, 2021. Excluding the effect of PPP loan forgiveness, the loan portfolio as of December 31, 2021 increased by $546.0 million, or 37.9% from quarter to quarter, or 151.5% annualized, from September 30, 2021. Strong loan demand has allowed the current loan pipeline to remain at historically elevated levels. 

Asset Quality

Asset quality improved during the fourth quarter of 2021 with non-performing loans declining $1.4 million, or 8.0%, from the third quarter of 2021. Economic activity continues to improve despite lingering inflationary pressures, including supply chain and labor shortages resulting from the COVID-19 pandemic. The provision for loan losses recorded for the fourth quarter of 2021 was $6.1 million, which served to increase the allowance to $19.3 million, or 0.9% of the $2.07 billion in gross loans outstanding as of December 31, 2021. Provision expense for the fourth quarter of 2021 related primarily to the provisioning for new loans.

As of December 31, 2021, the nonperforming loans to loans held for investment ratio remains low at 0.75%, which decreased from 1.05% at September 30, 2021, and decreased from 0.80% as of December 31, 2020. Net charge-offs were 16 basis points for the year ended December 31, 2021 compared to 26 basis points for the year ended December 31, 2020.

Deposits and Composition

Deposits totaled $2.14 billion as of December 31, 2021, an increase of 17.9% from $1.82 billion as of September 30, 2021, and an increase of 31.1% from $1.63 billion as of December 31, 2020. Noninterest-bearing demand deposits increased $167.0 million, or 45.8%, from September 30, 2021, and increased $204.0 million, or 62.3%, from December 31, 2020. Noninterest-bearing demand deposits represented 24.8% of total deposits as of December 31, 2021, up from 20.1% of total deposits as of September 30, 2021, and 20.0% of total deposits as of December 31, 2020.  Interest-bearing demand deposits as of December 31, 2021 increased $176.9 million, or 15.8%, from September 30, 2021 and savings accounts as of December 31, 2021 increased $3.4 million, or 11.2%, from September 30, 2021, due to our success in retaining and growing client relationships. These increases were partially offset by a decrease in time deposits of $22.0 million, or 7.35%. The average cost of deposits was 0.40% for the fourth quarter of 2021, representing a 4 basis point decrease from the third quarter of 2021 and a 24 basis point decrease from the fourth quarter of 2020. The decrease in average cost of deposits was due primarily to the continued repricing of certificates of deposit and rate reductions in money market accounts.

Net Interest Margin and Net Interest Income

The net interest margin for the fourth quarter of 2021 was 4.78%, an increase of 29 basis points from the third quarter of 2021 and an increase of 40 basis points from the fourth quarter of 2020.  Approximately $2.06 million of net deferred fees related to PPP loans remain unamortized at December 31, 2021. The yield on loans for the fourth quarter of 2021 was 5.86% compared to 6.11% at September 30, 2021.

Net interest income totaled $24.6 million for the fourth quarter of 2021, an increase of 11.9% from $22.0 million for the third quarter of 2021. Interest income totaled $26.7 million for the fourth quarter of 2021, an increase of 9.3% from $24.4 million for the third quarter of 2021.  Interest and fees on loans increased $2.3 million, or 9.5%, compared to the third quarter of 2021, and increased by $4.1 million, or 18.3%, from the fourth quarter of 2020.  Interest expense was $2.0 million for the fourth quarter of 2021, a decrease of 14.9% from $2.4 million for the third quarter of 2021 and a decrease of 35.9% from $3.2 million for the fourth quarter of 2020.

Noninterest Income and Noninterest Expense

Noninterest income totaled $2.1 million for the fourth quarter of 2021, compared to $964,000 for the third quarter of 2021.  This increase was primarily driven by a $820,000 increase in other non-loan related fee income.

Noninterest expense totaled $20.1 million in the fourth quarter of 2021, an increase of 13.9% from $17.6 million in the third quarter of 2021, which was primarily due to increases in salaries and benefits expense.

The efficiency ratio was 75.31% in the fourth quarter of 2021, compared to 76.81% in the third quarter of 2021, and 58.11% in the fourth quarter of 2020. The fourth quarter of 2021 efficiency ratio continues to be assisted by the accelerated accretion of deferred PPP loan origination fees immediately recognized at the time of forgiveness by the SBA.

Net Income and Earnings Per Share

Net income totaled $354,000 for the fourth quarter of 2021, compared to $2.4 million for the third quarter of 2021. Basic earnings per share and diluted earnings per share each decreased to $0.03 per share from $0.29 per share and $0.28 per share, respectively, in the third quarter of 2021. The decreases are primarily due to the $6.1 million provision for loan loss expense recorded in the fourth quarter of 2021 relating to our robust loan growth during the quarter.

(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.

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 12 branches and one loan production office encompassing the four largest metropolitan areas in Texas. Please visit https://www.tcbssb.com for more information.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended.  These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "would" and "outlook," or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.  There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: the impact of COVID-19 on our business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on the United States economy; interest rate risk and fluctuations in interest rates; our ability to maintain our largest deposit relationships; our ability to grow or maintain our deposit base; our ability to implement our expansion strategy; changes in key management personnel; credit risk associated with our business; market conditions and economic trends generally and in the banking industry; and other market conditions and economic trends generally and in the banking industry. For a discussion of additional factors that could cause our actual results to differ materially from those described in the forward-looking statements, please see the risk factors discussed in our prospectus, dated November 8, 2021, filed pursuant to Rule 424, filed with the U.S. Securities and Exchange Commission (the "SEC"), and our other filings with the SEC.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this press release. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Non-GAAP Financial Measures

This press release contains certain non-GAAP financial measures, including "Tangible Book Value Per Share and Tangible Shareholders' Equity to Tangible Assets Ratio, which are supplemental measures that are not required by, or are not presented in accordance with, GAAP. Please refer to the table titled "GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures" at the end of this press release for a reconciliation of these non-GAAP financial measures.

 

Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
		2021																2020
(Dollars in thousands)		December 31				September 30				June 30				March 31				December 31
ASSETS
Cash and cash equivalents:
Cash and due from banks		$	326,733			$	359,888			$	352,544			$	238,107			$	201,270
Federal funds sold			292				696				1,228				741				2,290
Total cash and cash equivalents			327,025				360,584				353,772				238,848				203,560
Interest bearing time deposits in other banks			131				131				131				131				129
Investment securities available-for-sale			26,432				26,431				25,991				24,680				25,595
Loans held for sale			-				-				-				-				2,345
Loans held for investment			2,068,724				1,612,394				1,551,722				1,692,806				1,556,092
Less:  allowance for loan and lease loss			(19,295)				(15,571)				(13,394)				(13,471)				(11,979)
Loans, net			2,049,429				1,596,823				1,538,328				1,679,335				1,544,113
Accrued interest receivable			10,228				10,238				11,350				13,375				13,676
Premises and equipment, net			19,045				18,364				15,859				15,154				15,156
Other real estate owned			1,676				1,676				1,686				3,066				3,367
Bank-owned life insurance			26,528				26,382				26,237				26,088				25,961
Non-marketable securities, at cost			7,527				10,905				8,032				4,424				4,407
Deferred tax asset, net			4,088				4,456				3,836				3,903				4,039
Core Deposit Intangible, net			1,292				1,332				1,373				1,413				1,454
Goodwill			18,034				18,034				18,034				18,034				18,034
Other assets			7,977				6,815				8,671				5,365				5,457
Total assets		$	2,499,412			$	2,082,171			$	2,013,300			$	2,033,816			$	1,867,293
LIABILITIES
Deposits:
Noninterest bearing		$	531,401			$	364,418			$	374,942			$	412,932			$	327,361
Interest bearing			1,609,798				1,451,533				1,408,326				1,400,262				1,306,470
Total deposits			2,141,199				1,815,951				1,783,268				1,813,194				1,633,831
Accrued interest payable			437				477				866				896				1,215
Other liabilities			7,769				8,291				7,845				8,056				6,654
FHLB advances			50,000				50,250				50,000				50,000				70,000
Note Payable - Senior Debt			1,000				1,000				20,500				20,500				20,875
Note Payable - Subordinated Debt			-				-				13,000				13,000				13,000
Total liabilities			2,200,405				1,875,969				1,875,479				1,905,646				1,745,575
Commitments and contingencies - ESOP-owned shares			-				2,060				1,876				1,778				1,302
SHAREHOLDERS' EQUITY
Common stock			13,432				9,387				6,647				6,402				6,350
Additional paid-in capital			249,252				160,725				97,821				92,254				91,462
Retained earnings			36,029				35,675				33,290				29,701				24,605
Accumulated other comprehensive income			1,394				1,394				1,042				792				280
Treasury stock, at cost			(1,100)				(979)				(979)				(979)				(979)
			299,007				206,202				137,821				128,170				121,718
Less:  ESOP-owned shares			-				(2,060)				(1,876)				(1,778)				(1,302)
Total shareholders' equity			299,007				204,142				135,945				126,392				120,416
Total liabilities and shareholders' equity		$	2,499,412			$	2,082,171			$	2,013,300			$	2,033,816			$	1,867,293

 

Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
		Three Months Ended																				Year Ended
		2021																2020				2021				2020
(Dollars in thousands, except per share data)		December 31				September 30				June 30				March 31				December 31				December 31				December 31
INTEREST INCOME:
Loans, including fees		$	26,226			$	23,940			$	23,522			$	25,198			$	22,162			$	98,886			$	80,791
Investment securities available-for-sale			265				265				261				252				229				1,043				297
Federal funds sold and other			169				194				148				175				463				686				1,153
Total interest income			26,660				24,399				23,931				25,625				22,854				100,615				82,241
INTEREST EXPENSE:
Deposit accounts			1,913				2,023				2,213				2,377				2,616				8,526				12,302
FHLB advances and notes payable			128				374				504				530				566				1,536				2,058
Total interest expense			2,041				2,397				2,717				2,907				3,182				10,062				14,360
Net interest income			24,619				22,002				21,214				22,718				19,672				90,553				67,881
Provision for loan losses			6,100				2,323				-				1,500				5,000				9,923				7,550
Net interest income after provision for loan losses			18,519				19,679				21,214				21,218				14,672				80,630				60,331
NONINTEREST INCOME:
Service charges and fees			566				559				770				472				507				2,367				1,709
Gain on sale of SBA loans			411				175				-				-				-				586				266
Other			1,078				230				339				278				72				1,925				707
Total noninterest income			2,055				964				1,109				750				579				4,878				2,682
NONINTEREST EXPENSE:
Salaries and employee benefits			14,029				12,138				12,512				9,963				7,125				48,642				29,262
Data processing and network expense			786				844				820				610				688				3,060				3,184
Occupancy and equipment expense			1,557				1,419				1,195				1,196				1,105				5,367				4,127
Legal and professional			1,450				1,164				1,564				1,115				914				5,293				3,962
Loan operations and other real estate owned expense			275				495				170				1,023				208				1,963				1,369
Advertising and marketing			657				422				406				404				420				1,889				1,326
Telephone and communications			115				119				168				193				158				595				605
Software purchases and maintenance			248				261				192				151				122				852				420
Regulatory assessments			506				252				294				49				489				1,101				1,303
Loss (gain) on sale of other real estate owned			-				-				(31)				375				-				344				-
Other			464				527				489				439				539				1,919				1,845
Total noninterest expense			20,087				17,641				17,779				15,518				11,768				71,025				47,403
NET INCOME BEFORE INCOME TAX EXPENSE			487				3,002				4,544				6,450				3,483				14,483				15,610
Income tax expense			133				617				955				1,354				948				3,059				3,495
NET INCOME		$	354			$	2,385			$	3,589			$	5,096			$	2,535			$	11,424			$	12,115
EARNINGS PER COMMON SHARE:
Basic earnings per share		$	0.03			$	0.29			$	0.57			$	0.81			$	0.41			$	1.45			$	1.94
Diluted earnings per share		$	0.03			$	0.28			$	0.55			$	0.80			$	0.40			$	1.40			$	1.91

 

Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
		Three Months Ended																				Year Ended
		2021																2020				2021				2020
(Dollars in thousands, except per share data)		December 31				September 30				June 30				March 31				December 31				December 31				December 31
Net Income		$	354			$	2,385			$	3,589			$	5,096			$	2,535			$	11,424			$	12,115
Earnings per share, basic		$	0.03			$	0.29			$	0.57			$	0.81			$	0.41			$	1.45			$	1.94
Earnings per share, diluted		$	0.03			$	0.28			$	0.55			$	0.80			$	0.40			$	1.40			$	1.91
Dividends per share		$	-			$	-			$	-			$	-			$	-			$	-			$	-
Return on average assets (A)			0.06	%			0.46	%			0.71	%			1.06	%			0.54	%			0.55	%			0.73	%
Return on average equity (A)			0.55	%			5.41	%			11.45	%			16.81	%			8.48	%			6.70	%			10.74	%
Net interest margin (A) (C)			4.78	%			4.49	%			4.39	%			4.97	%			4.38	%			4.65	%			4.24	%
Efficiency ratio (D)			75.31	%			76.81	%			79.64	%			66.12	%			58.11	%			74.43	%			67.18	%
Capital Ratios
Third Coast Bancshares, Inc. (consolidated):
Equity to assets			11.96	%			9.90	%			6.85	%			6.30	%			6.52	%			11.96	%			6.52	%
Tangible equity to tangible assets (B)			11.28	%			9.06	%			5.94	%			5.40	%			5.53	%			11.28	%			5.53	%
Third Coast Bank, SSB:
Common equity tier 1 (to risk weighted assets)			12.63	%			11.89	%			11.24	%			11.76	%			11.51	%			12.63	%			11.51	%
Tier 1 capital (to risk weighted assets)			12.63	%			11.89	%			11.24	%			11.76	%			11.51	%			12.63	%			11.51	%
Total capital (to risk weighted assets)			13.54	%			12.96	%			12.32	%			12.93	%			12.54	%			13.54	%			12.54	%
Tier 1 capital (to average assets)			13.01	%			9.61	%			9.17	%			9.23	%			9.70	%			13.01	%			9.70	%
Other Data
Weighted average shares:
Basic			10,724,545				8,099,878				6,339,850				6,280,855				6,242,540				7,874,110				6,232,115
Diluted			11,156,037				8,448,112				6,535,163				6,364,672				6,334,839				8,138,824				6,329,760
Period end shares outstanding			13,353,572				9,313,929				6,573,684				6,328,802				6,276,759				13,353,572				6,276,759
Book value per share		$	22.39			$	22.14			$	20.97			$	20.25			$	19.39			$	22.39			$	19.39
Tangible book value per share (B)		$	20.94			$	20.06			$	18.01			$	17.18			$	16.29			$	20.94			$	16.29

(A)	Interim periods annualized.
(B)	Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on page 11 of this News Release.
(C)	Net interest margin represents net interest income divided by average interest-earning assets.
(D)	Represents total noninterest expense divided by the sum of net interest income plus noninterest income. Taxes and provision for loan losses are not part of this calculation.

 

Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
		Three Months Ended
		December 31, 2021												September 30, 2021												December 31, 2020
(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		$	42,677			$	265				2.46	%		$	31,588			$	265				3.33	%		$	45,136			$	229				2.02	%
Loans, gross			1,774,294				26,226				5.86	%			1,553,517				23,940				6.11	%			1,605,646				22,162				5.49	%
Federal funds sold and other interest-earning assets			226,197				169				0.30	%			360,723				194				0.21	%			135,344				463				1.36	%
Total interest-earning assets			2,043,168				26,660				5.18	%			1,945,828				24,399				4.97	%			1,786,126				22,854				5.09	%
Less allowance for loan losses			(17,130)												(13,466)												(11,555)
Total interest-earning assets, net of allowance			2,026,038												1,932,362												1,774,571
Noninterest-earning assets			187,770												138,687												93,209
Total assets		$	2,213,808											$	2,071,049											$	1,867,780
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits		$	1,485,059			$	1,913				0.51	%		$	1,423,418			$	2,023				0.56	%		$	1,301,862			$	2,616				0.80	%
Notes payable			1,126				11				3.88	%			21,278				262				4.89	%			34,164				443				5.16	%
FHLB advances			66,315				117				0.70	%			55,418				112				0.80	%			89,648				123				0.55	%
Total interest-bearing liabilities			1,552,500				2,041				0.52	%			1,500,114				2,397				0.63	%			1,425,674				3,182				0.89	%
Noninterest-bearing deposits			392,955												386,727												318,335
Other liabilities			10,770												9,440												4,807
Total liabilities			1,956,225												1,896,281												1,748,816
Shareholders' equity			257,583												174,768												118,964
Total liabilities and shareholders' equity		$	2,213,808											$	2,071,049											$	1,867,780
Net interest income						$	24,619											$	22,002											$	19,672
Net interest spread (1)											4.66	%											4.34	%											4.20	%
Net interest margin (2)											4.78	%											4.49	%											4.38	%

(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)
		For the Year Ended
		December 31, 2021												December 31, 2020
(Dollars in thousands)		Average Outstanding Balance				Interest Earned/ Paid(3)				Average Yield/ Rate				Average Outstanding Balance				Interest Earned/ Paid(3)				Average Yield/ Rate
Assets
Interest-earnings assets:
Investment securities		$	31,251			$	1,043				3.34	%		$	14,709			$	297				2.02	%
Loans, gross			1,646,591				98,886				6.01	%			1,433,412				80,791				5.64	%
Federal funds sold and other interest-earning assets			267,983				686				0.26	%			152,066				1,153				0.76	%
Total interest-earning assets			1,945,825				100,615				5.17	%			1,600,187				82,241				5.14	%
Less allowance for loan losses			(14,198)												(10,506)
Total interest-earning assets, net of allowance			1,931,627												1,589,681
Noninterest-earning assets			132,825												80,686
Total assets		$	2,064,452											$	1,670,367
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits		$	1,421,757			$	8,526				0.60	%		$	1,150,723			$	12,302				1.07	%
Notes payable			22,329				1,091				4.89	%			39,793				1,615				4.06	%
FHLB advances			56,442				445				0.79	%			50,000				443				0.89	%
Total interest-bearing liabilities			1,500,528				10,062				0.67	%			1,240,516				14,360				1.16	%
Noninterest-bearing deposits			383,747												310,357
Other liabilities			9,547												6,661
Total liabilities			1,893,822												1,557,534
Shareholders' equity			170,630												112,833
Total liabilities and shareholders' equity		$	2,064,452											$	1,670,367
Net interest income						$	90,553											$	67,881
Net interest spread (1)											4.50	%											3.98	%
Net interest margin (2)											4.65	%											4.24	%

(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
		2021																2020
(Dollars in thousands)		December 31				September 30				June 30				March 31				December 31
Period-end Loan Portfolio:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied		$	383,941			$	361,467			$	361,217			$	359,416			$	353,273
Non-farm non-residential non-owner occupied			445,308				345,360				286,533				276,174				277,804
Residential			213,264				179,971				165,890				137,201				140,622
Construction, development & other			320,335				124,548				80,400				85,398				98,207
Farmland			9,934				8,309				6,011				5,164				4,653
Commercial & industrial			611,348				538,551				612,306				792,270				645,928
Consumer			4,001				4,417				4,499				4,627				4,157
Other			80,593				49,771				34,866				32,556				31,448
Total loans		$	2,068,724			$	1,612,394			$	1,551,722			$	1,692,806			$	1,556,092
Asset Quality:
Nonaccrual loans		$	10,030			$	11,077			$	5,158			$	5,761			$	7,257
Loans > 90 days and still accruing			278				561				184				1,009				752
Restructured loans--accruing			5,295				5,319				5,924				5,946				4,395
Total nonperforming loans		$	15,603			$	16,957			$	11,266			$	12,716			$	12,404
Other real estate owned			1,676				1,676				1,686				3,066				3,367
Total nonperforming assets		$	17,279			$	18,633			$	12,952			$	15,782			$	15,771
QTD Net charge-offs		$	2,376			$	146			$	77			$	8			$	3,107
Nonaccrual loans:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied		$	1,008			$	1,032			$	1,058			$	1,081			$	1,944
Non-farm non-residential non-owner occupied			346				353				365				375				385
Residential			127				133				76				80				85
Construction, development & other			244				251				257				261				264
Farmland			-				-				-				-				-
Commercial & industrial			8,297				9,162				3,227				3,810				4,155
Consumer			-				-				-				-				-
Other			-				-				-				24				-
Purchased credit impaired			8				146				175				130				424
Total nonaccrual loans		$	10,030			$	11,077			$	5,158			$	5,761			$	7,257
Asset Quality Ratios:
Nonperforming assets to total assets			0.69	%			0.89	%			0.64	%			0.78	%			0.84	%
Nonperforming loans to total loans			0.75	%			1.05	%			0.73	%			0.75	%			0.80	%
Allowance for loan losses to total loans			0.93	%			0.97	%			0.86	%			0.80	%			0.77	%
QTD Net charge-offs to average loans (annualized)			0.53	%			0.04	%			0.02	%			0.00	%			0.77	%

Third Coast Bancshares, Inc. and Subsidiary
GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures
(unaudited)

Our accounting and reporting policies conform to GAAP (generally accepted accounting principles) and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional financial measures discussed in this earnings release as being non-GAAP financial measures. Specifically, we review "Tangible Book Value Per Share and Tangible Common Equity to Tangible Assets Ratio" for internal planning and forecasting purposes. We classify a financial measure as a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are not included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively financial measures calculated in accordance with GAAP.

The non-GAAP financial measures that we discuss in this earnings release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this earnings release may differ from that of other companies reporting measures with similar names. It is important to understand how other banking organizations calculate their financial measures with names similar to the non-GAAP financial measures we have discussed in this earnings release when comparing such non-GAAP financial measures. 

		Three Months Ended
		2021																2020
(Dollars in thousands, except per share data)		December 31				September 30				June 30				March 31				December 31
Tangible Common Equity:
Total shareholders' equity		$	299,007			$	206,202			$	137,821			$	128,170			$	121,718
Less:  Goodwill and core deposit intangibles, net			19,326				19,366				19,407				19,447				19,488
Tangible shareholders' equity		$	279,681			$	186,836			$	118,414			$	108,723			$	102,230
Common shares outstanding at end of period			13,353,572				9,313,929				6,573,684				6,328,802				6,276,759
Book value per share		$	22.39			$	22.14			$	20.97			$	20.25			$	19.39
Tangible Book Value Per Share		$	20.94			$	20.06			$	18.01			$	17.18			$	16.29
Tangible Assets:
Total assets		$	2,499,412			$	2,082,171			$	2,013,300			$	2,033,816			$	1,867,293
Adjustments:  Goodwill and core deposit intangibles, net			19,326				19,366				19,407				19,447				19,488
Tangible assets		$	2,480,086			$	2,062,805			$	1,993,893			$	2,014,369			$	1,847,805
Total Shareholders' Equity to Total Assets			11.96	%			9.90	%			6.85	%			6.30	%			6.52	%
Tangible Common Equity to Tangible Assets			11.28	%			9.06	%			5.94	%			5.40	%			5.53	%

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-strong-2021-fourth-quarter-and-full-year-financial-results-301470172.html

SOURCE Third Coast Bancshares

FAQ

What were Third Coast Bancshares' fourth quarter 2021 earnings results?

Third Coast Bancshares reported a net income of $354,000 for Q4 2021 with earnings per share of $0.03.

How did Third Coast Bancshares' loan portfolio perform in Q4 2021?

The company's loans held for investment increased by $456.3 million, or 28.3%, quarter-over-quarter, totaling $2.07 billion.

What is the significance of the net interest margin for TCBX?

The net interest margin reached 4.78% in Q4 2021, reflecting a robust growth in net interest income.

How has Third Coast Bancshares' asset quality changed?

As of December 31, 2021, the nonperforming loans to loans held for investment ratio improved to 0.75%, down from 1.05% in Q3 2021.

What are the prospects for Third Coast Bancshares in 2022?

Third Coast Bancshares aims to continue its organic growth, attracting new talent and increasing loan demand.