THIRD COAST BANCSHARES, INC. REPORTS THIRD QUARTER 2022 FINANCIAL RESULTS

Rhea-AI Summary

Third Coast Bancshares, Inc. (NASDAQ: TCBX) reported strong third quarter 2022 financial results, with net income of $6.8 million ($0.49 per diluted share), a significant increase from $2.3 million in Q2 2022. Loans rose 8.1% to $2.97 billion, and deposits increased by 3.0% to $2.98 billion. Total assets grew to $3.52 billion, up 4.7% from Q2 2022. Non-performing assets decreased to 0.29% of total assets. The company issued $69.4 million in preferred stock. The net interest margin held steady at 3.77%, bolstered by strong loan growth and increased interest income.

Positive

• Net income increased to $6.8 million in Q3 2022 from $2.3 million in Q2 2022.
• Loans increased 8.1% to $2.97 billion, a year-over-year growth of 84.4%.
• Deposits rose 3.0% to $2.98 billion, up 64.3% year-over-year.
• Total assets reached $3.52 billion, a 4.7% increase from Q2 2022.
• Non-performing assets decreased to 0.29% of total assets.
• Net interest income rose 13.0% to $31.4 million compared to Q2 2022.

Negative

• Noninterest expenses increased to $22.7 million from $17.6 million YoY.

Record Quarterly Net Income and Net Interest Income

HUMBLE, Texas, Oct. 26, 2022 /PRNewswire/ -- Third Coast Bancshares, Inc. (NASDAQ: TCBX) (the "Company", "Third Coast", "we", "us", or "our"), the bank holding company for Third Coast Bank, SSB, today reported its third quarter 2022 financial results.

Third Quarter 2022 Financial and Operational Highlights

• Loans held for investment grew $223.7 million to $2.97 billion as of September 30, 2022, or 8.1%, over the $2.75 billion reported as of June 30, 2022, and increased $1.36 billion, or 84.4%, over the $1.61 billion reported as of September 30, 2021.
• Deposits reached $2.98 billion as of September 30, 2022, an increase of $86.1 million, or 3.0%, over the $2.90 billion reported as of June 30, 2022, and $1.17 billion, or 64.3%, over the $1.82 billion reported as of September 30, 2021. Noninterest-bearing deposits declined $2.3 million to $517.3 million and represent 17.3% of total deposits as of September 30, 2022.
• Total assets reached $3.52 billion as of September 30, 2022, an increase of $158.8 million, or 4.7%, over the $3.36 billion reported as of June 30, 2022, and $1.4 billion, or 68.9%, more than the $2.08 billion reported as of September 30, 2021.
• Net income totaled $6.8 million, or $0.49 per diluted common share, for the third quarter of 2022, compared to $2.3 million, or $0.16 per diluted common share, for the second quarter of 2022.
• Book value per share and tangible book value per share⁽¹⁾ increased to $22.93 and $21.51, respectively, at September 30, 2022 compared to $22.43 and $21.00, respectively, at June 30, 2022.
• Issued 69,400 shares of Series A Convertible Non-Cumulative Preferred Stock and 175,000 warrants to purchase shares of the Company's common stock for gross proceeds of $69.4 million.
• Opened 15^th location in October 2022 with a de novo branch located in the Kingwood area, north of Houston, Texas.

 

(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.

"Third Coast continues to track in the right direction, reporting another quarter of solid organic growth that demonstrates our well-executed strategy to invest in people that perform at a high level," stated Bart Caraway, Third Coast's Chairman, President and Chief Executive Officer. "Record net interest income of $31.4 million, and net income of $6.8 million, resulted from continued operating leverage. Third quarter loans and deposits are up $1.36 billion and $1.17 billion, respectively, over last year.  Our asset quality, a key emphasis for our lending culture, remains strong, representing a significant year-over-year reduction in non-performing assets to 0.29% of total assets. 

"As we approach our first anniversary as a publicly traded company, we are seeing more demand for our financial products that, in step with our strategic growth plan, advance our efforts to increase quality offerings, including investing in research and development to grow deposits and fee income. We intend to continue to enhance our diversified business model and invest in talent at all levels of the organization so that we can be the leading community bank in the markets we serve.

"Our people are critical to our success. Third Coast is committed to serving our customers, building relationships, cultivating technological evolution, and expanding our markets. Regarding our branch network, we recently opened our 15th branch in Kingwood, just north of Houston. Third Coast is focused on providing the highest quality service and financial products to commercial and retail clients through its 15 branches.  I want to thank the expanding Third Coast team once again for their commitment to delivering excellence to our customers and shareholders.

"Looking ahead, we are very excited about the future. Third Coast is poised for growth, especially as we look to bring exciting and beneficial financial products to market. We remain intensely focused on operating performance, which is bolstered by the general health of the Texas economy and improving trends that we are experiencing in our lending portfolio," concluded Mr. Caraway.

Loan Portfolio and Composition

During the third quarter of 2022, gross loans increased to $2.97 billion as of September 30, 2022, an increase of $223.7 million, or 8.1%, from $2.75 billion as of June 30, 2022, and an increase of $1.36 billion, or 84.4%, from $1.61 billion as of September 30, 2021. The loan growth was well diversified with Real Estate loans up $115.0 million and Commercial loans up $114.4 million from June 30, 2022. PPP loans declined to $1.9 million as of September 30, 2022 from $8.8 million as of June 30, 2022.

Asset Quality

Asset quality improved during the third quarter of 2022 with non-performing assets decreasing to $10.3 million as of September 30, 2022, or 44.6%, from $18.6 million as of September 30, 2021 and down slightly from $11.0 million as of June 30, 2022. The provision for loan losses recorded for the third quarter of 2022 was $2.9 million, which served to increase the allowance to $29.1 million, or 0.98% of the $2.97 billion in gross loans outstanding as of September 30, 2022. Provision expense for the third quarter of 2022 related primarily to provisioning for new loans.

As of September 30, 2022, the nonperforming loans to loans held for investment ratio remains low at 0.35%, which decreased from 0.40% as of June 30, 2022 and 1.05% as of September 30, 2021. During the three months ended September 30, 2022 and 2021, net charge-offs were  $457,000 and $146,000 respectively. 

Deposits and Composition

Deposits totaled $2.98 billion as of September 30, 2022, an increase of 3.0% from $2.90 billion as of June 30, 2022, and an increase of 64.3% from $1.82 billion as of September 30, 2021. Noninterest-bearing demand deposits decreased from $519.6 million as of June 30, 2022 to $517.3 million as of September 30, 2022, and increased $152.8 million, or 41.9%, from September 30, 2021. Noninterest-bearing demand deposits represented 17.3% of total deposits as of September 30, 2022, down from 17.9% of total deposits as of June 30, 2022, and 20.1% of total deposits as of September 30, 2021. Interest-bearing demand deposits as of September 30, 2022 increased $120.4 million, or 5.7%, from June 30, 2022. The increase was offset by a decrease in savings accounts of $1.2 million, or 3.1%, from June 30, 2022, and decrease in time deposits of $30.8 million, or 13.3%, from June 30, 2022.

The average cost of deposits was 1.31% for the third quarter of 2022, representing a 79 basis point increase from the second quarter of 2022 due primarily to the increase in rates paid on interest-bearing demand deposits.  The average cost of deposits for the third quarter of 2022 increased 87 basis points from the third quarter of 2021 due primarily to the increase in rates paid on interest-bearing demand deposits. 

Net Interest Margin and Net Interest Income

The net interest margin for the third quarter of 2022 was 3.77% which was unchanged from the second quarter of 2022 and a decrease of 72 basis points from the third quarter of 2021. We recorded excess accretion on purchased loans of $665,000 during the third quarter which increased the net interest margin by approximately 8 basis points. The yield on loans for the third quarter of 2022 was 5.59% compared to 4.73% for the second quarter of 2022. The increase in yield on loans during the third quarter of 2022 was primarily due to increased rates on new loans and an increase of $1.1 million in loan fees during the third quarter. 

Net interest income totaled $31.4 million for the third quarter of 2022, an increase of 13.0% from $27.7 million for the second quarter of 2022. Interest income totaled $43.1 million for the third quarter of 2022, an increase of 32.6% from $32.5 million for the second quarter of 2022. Interest and fees on loans increased $9.3 million, or 30.0%, compared to the second quarter of 2022, and increased $16.6 million, or 69.2%, from the third quarter of 2021.  Interest expense was $11.7 million for the third quarter of 2022, an increase of $7.0 million, or 146.2% from $4.8 million for the second quarter of 2022 and an increase of 390.1% from $2.4 million for the third quarter of 2021. The increase in interest expense was primarily due to interest paid on interest-bearing deposit accounts, FHLB advances and subordinated debt issued in March 2022.

Noninterest Income and Noninterest Expense

Noninterest income totaled $2.5 million for the third quarter of 2022, compared to $1.3 million for the second quarter of 2022, and $964,000 for the third quarter of 2021. This increase was primarily due to $729,000 in gains on the sales of the guaranteed portions of SBA loans sold and increases in derivative income of $190,000, earnings on bank-owned life insurance of $176,000, and service charges and fees of $155,000 in the third quarter of 2022.

Noninterest expense totaled $22.7 million for the third quarter of 2022 down from $22.8 million for the second quarter of 2022 and up from $17.6 million for the third quarter of 2021. The year-over-year increases were attributed to salary expense related to additional employees hired in 2022 and administrative expenses related to opening of three branches in 2022. The employee headcount increased from 334 as of December 31, 2021 to 369 as of September 30, 2022.

The efficiency ratio was 67.06% for the third quarter of 2022, compared to 78.52% for the second quarter of 2022, and 76.81% for the third quarter of 2021. The improvement in the efficiency ratio was primarily due to the increase in interest and fees on loans.   

Net Income and Earnings Per Share

Net income totaled $6.8 million for the third quarter of 2022, compared to $2.3 million for the second quarter of 2022. Basic earnings per share and diluted earnings per share increased to $0.50 per share and $0.49 per share, respectively, in the third quarter of 2022 from $0.17 per share and $0.16 per share, respectively, in the second quarter of 2022. 

Private Placement of $69.4 Million of Convertible Preferred Stock

As previously reported, the Company issued 69,400 shares of Series A Convertible Non-Cumulative Preferred Stock at a purchase price of $1,000 per share for aggregate gross proceeds of $69.4 million on September 30, 2022. In addition, the Company issued 175,000 warrants to purchase shares of the Company's common stock, par value $1.00 per share, in connection with the private placement offering.

Earnings Conference Call

Third Coast has scheduled a conference call to discuss third quarter 2022 results, which will be broadcast live over the Internet, on Thursday, October 27, 2022, at 11:00 a.m. Eastern Time / 10:00 a.m. Central Time. To participate in the call, dial 201-389-0869 and ask for the Third Coast Bancshares call at least 10 minutes prior to the start time, or access it live over the Internet at https://ir.tcbssb.com/events-and-presentations/events. For those who cannot listen to the live call, a replay will be available through November 3, 2022, and may be accessed by dialing 201-612-7415 and using passcode 13733542#. 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 15 branches and one loan production office encompassing the four largest metropolitan areas in Texas. Please visit https://www.tcbssb.com for more information.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "would" and "outlook," or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.  There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: the impact of COVID-19 on our business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on the United States economy; interest rate risk and fluctuations in interest rates; our ability to maintain our largest deposit relationships; our ability to grow or maintain our deposit base; our ability to implement our expansion strategy; changes in key management personnel; credit risk associated with our business; and other market conditions and economic trends generally and in the banking industry. For a discussion of additional factors that could cause our actual results to differ materially from those described in the forward-looking statements, please see the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission (the "SEC"), and our other filings with the SEC.                           

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

Non-GAAP Financial Measures

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

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

 

Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited)
		2022												2021
(Dollars in thousands)		September 30				June 30				March 31				December 31				September 30
ASSETS
Cash and cash equivalents:
Cash and due from banks		$	216,623			$	317,462			$	369,782			$	326,733			$	359,888
Federal funds sold			1,225				2,741				1,538				292				696
Total cash and cash equivalents			217,848				320,203				371,320				327,025				360,584
Interest bearing time deposits in other banks			132				132				132				131				131
Investment securities available-for-sale			160,437				157,261				126,218				26,432				26,431
Loans held for investment			2,972,852				2,749,177				2,447,945				2,068,724				1,612,394
Less:  allowance for loan and lease loss			(29,109)				(26,666)				(23,312)				(19,295)				(15,571)
Loans, net			2,943,743				2,722,511				2,424,633				2,049,429				1,596,823
Accrued interest receivable			16,246				12,568				12,648				10,228				10,238
Premises and equipment, net			25,449				22,888				20,846				19,045				18,364
Other real estate owned			-				-				1,666				1,676				1,676
Bank-owned life insurance			60,263				51,919				26,671				26,528				26,382
Non-marketable securities, at cost			27,136				15,213				11,327				7,527				10,905
Deferred tax asset, net			8,097				7,179				4,258				4,123				4,456
Core Deposit Intangible, net			1,171				1,211				1,252				1,292				1,332
Goodwill			18,034				18,034				18,034				18,034				18,034
Other assets			38,289				28,943				21,383				7,942				6,815
Total assets		$	3,516,845			$	3,358,062			$	3,040,388			$	2,499,412			$	2,082,171
LIABILITIES
Deposits:
Noninterest bearing		$	517,265			$	519,614			$	931,622			$	531,401			$	364,418
Interest bearing			2,467,049				2,378,650				1,655,547				1,609,798				1,451,533
Total deposits			2,984,314				2,898,264				2,587,169				2,141,199				1,815,951
Accrued interest payable			2,925				1,683				387				437				477
Other liabilities			42,079				26,906				20,122				7,769				8,291
FHLB advances			-				18,000				50,000				50,000				50,250
Note payable - Line of Credit			30,875				30,875				1,000				1,000				1,000
Note payable - Subordinated Debentures, net			80,298				80,367				80,507				-				-
Total liabilities			3,140,491				3,056,095				2,739,185				2,200,405				1,875,969
Commitments and contingencies - ESOP-owned shares			-				-				-				-				2,060
SHAREHOLDERS' EQUITY
Preferred Stock - Series A			69				-				-				-				-
Common stock			13,600				13,543				13,524				13,482				9,387
Additional paid-in capital			317,798				250,413				249,775				249,202				160,725
Retained earnings			47,163				40,393				38,116				36,029				35,675
Accumulated other comprehensive income			(1,177)				(1,283)				887				1,393				1,394
Treasury stock, at cost			(1,099)				(1,099)				(1,099)				(1,099)				(979)
			376,354				301,967				301,203				299,007				206,202
Less:  ESOP-owned shares			-				-				-				-				(2,060)
Total shareholders' equity			376,354				301,967				301,203				299,007				204,142
Total liabilities and shareholders' equity		$	3,516,845			$	3,358,062			$	3,040,388			$	2,499,412			$	2,082,171

 

Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited)
		Three Months Ended																				Year Ended
		2022												2021								2021
(Dollars in thousands, except per share data)		September 30				June 30				March 31				December 31				September 30				December 31
INTEREST INCOME:
Loans, including fees		$	40,498			$	31,164			$	26,682			$	26,226			$	23,940			$	98,886
Investment securities available-for-sale			1,367				894				276				265				265				1,043
Federal funds sold and other			1,237				451				226				169				194				686
Total interest income			43,102				32,509				27,184				26,660				24,399				100,615
INTEREST EXPENSE:
Deposit accounts			9,727				3,443				1,844				1,913				2,023				8,526
FHLB advances and notes payable			2,020				1,328				130				128				374				1,536
Total interest expense			11,747				4,771				1,974				2,041				2,397				10,062
Net interest income			31,355				27,738				25,210				24,619				22,002				90,553
Provision for loan losses			2,900				3,350				4,000				6,100				2,323				9,923
Net interest income after provision for loan losses			28,455				24,388				21,210				18,519				19,679				80,630
NONINTEREST INCOME:
Service charges and fees			772				617				619				566				559				2,367
Gain on sale of SBA loans			729				98				-				411				175				586
Earnings on bank-owned life insurance			424				248				143				146				145				567
Derivative fees			313				123				706				820				-				820
Other			300				180				198				112				85				538
Total noninterest income			2,538				1,266				1,666				2,055				964				4,878
NONINTEREST EXPENSE:
Salaries and employee benefits			14,719				13,994				13,324				14,029				12,138				48,642
Data processing and network expense			1,256				932				922				786				844				3,060
Occupancy and equipment expense			2,232				1,830				1,873				1,557				1,419				5,367
Legal and professional			1,353				2,001				1,746				1,450				1,164				5,293
Loan operations and other real estate owned expense			284				282				278				275				495				1,963
Advertising and marketing			438				467				427				657				422				1,889
Telephone and communications			122				99				100				115				119				595
Software purchases and maintenance			318				201				198				248				261				852
Regulatory assessments			1,000				956				645				506				252				1,101
Loss on sale of other real estate owned			-				350				-				-				-				344
Other			1,006				1,661				668				464				527				1,919
Total noninterest expense			22,728				22,773				20,181				20,087				17,641				71,025
NET INCOME BEFORE INCOME TAX EXPENSE			8,265				2,881				2,695				487				3,002				14,483
Income tax expense			1,495				604				608				133				617				3,059
NET INCOME		$	6,770			$	2,277			$	2,087			$	354			$	2,385			$	11,424
EARNINGS PER COMMON SHARE:
Basic earnings per share		$	0.50			$	0.17			$	0.16			$	0.03			$	0.29			$	1.45
Diluted earnings per share		$	0.49			$	0.16			$	0.15			$	0.03			$	0.28			$	1.40

 

Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited)
		Three Months Ended																				Year Ended
		2022												2021								2021
(Dollars in thousands, except share and per share data)		September 30				June 30				March 31				December 31				September 30				December 31
Net Income		$	6,770			$	2,277			$	2,087			$	354			$	2,385			$	11,424
Earnings per share, basic		$	0.50			$	0.17			$	0.16			$	0.03			$	0.29			$	1.45
Earnings per share, diluted		$	0.49			$	0.16			$	0.15			$	0.03			$	0.28			$	1.40
Dividends per share		$	-			$	-			$	-			$	-			$	-			$	-
Return on average assets (A)			0.78	%			0.29	%			0.32	%			0.06	%			0.46	%			0.55	%
Return on average common equity (A)			8.74	%			3.01	%			2.81	%			0.55	%			5.41	%			6.70	%
Return on average tangible common equity (A) (B)			9.32	%			3.22	%			3.00	%			0.59	%			6.09	%			7.55	%
Net interest margin (A) (C)			3.77	%			3.77	%			4.09	%			4.78	%			4.49	%			4.65	%
Efficiency ratio (D)			67.06	%			78.52	%			75.09	%			75.31	%			76.81	%			74.43	%
Capital Ratios
Third Coast Bancshares, Inc. (consolidated):
Total common equity to total assets			8.82	%			8.99	%			9.91	%			11.96	%			9.90	%			11.96	%
Tangible common equity to tangible assets (B)			8.32	%			8.47	%			9.33	%			11.28	%			9.06	%			11.28	%
Third Coast Bank, SSB:
Common equity tier 1 (to risk weighted assets)			13.04	%			11.60	%			12.36	%			12.63	%			11.89	%			12.63	%
Tier 1 capital (to risk weighted assets)			13.04	%			11.60	%			12.36	%			12.63	%			11.89	%			12.63	%
Total capital (to risk weighted assets)			13.87	%			12.40	%			13.17	%			13.54	%			12.96	%			13.54	%
Tier 1 capital (to average assets)			13.29	%			12.47	%			13.66	%			12.27	%			8.39	%			12.27	%
Other Data
Weighted average shares:
Basic			13,490,680				13,454,423				13,385,324				10,724,545				8,099,878				7,874,110
Diluted			13,678,962				13,822,522				13,755,026				11,156,037				8,448,112				8,138,824
Period end shares outstanding			13,521,826				13,464,093				13,445,782				13,403,324				9,313,929				13,403,324
Book value per share		$	22.93			$	22.43			$	22.40			$	22.31			$	22.14			$	22.31
Tangible book value per share (B)		$	21.51			$	21.00			$	20.97			$	20.87			$	20.06			$	20.87

(A) Interim periods annualized.
(B) Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on pages 12 and 13 of this News Release.
(C) Net interest margin represents net interest income divided by average interest-earning assets.
(D) Represents total noninterest expense divided by the sum of net interest income plus noninterest income. Taxes and provision for loan losses are not part of this calculation.

 

Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited)
		Three Months Ended
		September 30, 2022										June 30, 2022										September 30, 2021
(Dollars in thousands)		Average Outstanding Balance				Interest Earned/ Paid(3)				Average Yield/ Rate		Average Outstanding Balance				Interest Earned/ Paid(3)				Average Yield/ Rate		Average Outstanding Balance				Interest Earned/ Paid(3)				Average Yield/ Rate
Assets
Interest-earnings assets:
Investment securities		$	180,701			$	1,367			3.00 %		$	112,793			$	894			3.18 %		$	31,588			$	265			3.33 %
Loans, gross			2,874,857				40,498			5.59 %			2,641,330				31,164			4.73 %			1,553,517				23,940			6.11 %
Federal funds sold and other interest-earning assets			243,471				1,237			2.02 %			200,801				451			0.90 %			360,723				194			0.21 %
Total interest-earning assets			3,299,029				43,102			5.18 %			2,954,924				32,509			4.41 %			1,945,828				24,399			4.97 %
Less allowance for loan losses			(27,504)										(24,818)										(13,466)
Total interest-earning assets, net of allowance			3,271,525										2,930,106										1,932,362
Noninterest-earning assets			184,514										201,734										138,687
Total assets		$	3,456,039									$	3,131,840									$	2,071,049
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits		$	2,446,443			$	9,727			1.58 %		$	2,222,677			$	3,443			0.62 %		$	1,423,418			$	2,023			0.56 %
Notes payable and fed funds sold			111,213				1,617			5.77 %			83,390				1,208			5.81 %			21,278				262			4.89 %
FHLB advances			60,176				403			2.66 %			46,319				120			1.04 %			55,418				112			0.80 %
Total interest-bearing liabilities			2,617,832				11,747			1.78 %			2,352,386				4,771			0.81 %			1,500,114				2,397			0.63 %
Noninterest-bearing deposits			498,408										453,936										386,727
Other liabilities			31,707										22,383										9,440
Total liabilities			3,147,947										2,828,705										1,896,281
Shareholders' equity			308,092										303,135										174,768
Total liabilities and shareholders' equity		$	3,456,039									$	3,131,840									$	2,071,049
Net interest income						$	31,355									$	27,738									$	22,002
Net interest spread (1)										3.40 %										3.60 %										4.34 %
Net interest margin (2)										3.77 %										3.77 %										4.49 %

(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)
		Nine Months Ended
		September 30, 2022										September 30, 2021
(Dollars in thousands)		Average Outstanding Balance				Interest Earned/ Paid(3)				Average Yield/ Rate		Average Outstanding Balance				Interest Earned/ Paid(3)				Average Yield/ Rate
Assets
Interest-earnings assets:
Investment securities		$	115,705			$	2,537			2.93 %		$	27,400			$	778			3.80 %
Loans, gross			2,577,324				98,344			5.10 %			1,603,555				72,660			6.06 %
Federal funds sold and other interest-earning assets			236,552				1,914			1.08 %			282,065				517			0.25 %
Total interest-earning assets			2,929,581				102,795			4.69 %			1,913,020				73,955			5.17 %
Less allowance for loan losses			(24,265)										(13,211)
Total interest-earning assets, net of allowance			2,905,316										1,899,809
Noninterest-earning assets			169,473										114,310
Total assets		$	3,074,789									$	2,014,119
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits		$	2,279,048			$	15,014			0.88 %		$	1,400,424			$	6,613			0.63 %
Notes payable			65,898				2,848			5.78 %			29,475				1,080			4.90 %
FHLB advances			52,202				630			1.61 %			53,115				328			0.83 %
Total interest-bearing liabilities			2,397,148				18,492			1.03 %			1,483,014				8,021			0.72 %
Noninterest-bearing deposits			351,002										380,645
Other liabilities			22,361										9,134
Total liabilities			2,770,511										1,872,793
Shareholders' equity			304,278										141,326
Total liabilities and shareholders' equity		$	3,074,789									$	2,014,119
Net interest income						$	84,303									$	65,934
Net interest spread (1)										3.66 %										4.45 %
Net interest margin (2)										3.85 %										4.61 %

(1) Net interest spread is the average yield on interest earning assets minus the average rate on interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average interest-earning assets.
(3) Interest earned/paid includes accretion of deferred loan fees, premiums and discounts.

 

Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited)
		Three Months Ended
		2022												2021
(Dollars in thousands)		September 30				June 30				March 31				December 31				September 30
Period-end Loan Portfolio:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied		$	529,046			$	508,864			$	477,573			$	383,941			$	361,467
Non-farm non-residential non-owner occupied			490,503				464,530				463,618				445,308				345,360
Residential			283,432				273,415				225,649				213,264				179,971
Construction, development & other			500,879				440,925				414,653				320,335				124,548
Farmland			22,770				23,895				13,467				9,934				8,309
Commercial & industrial			1,029,231				914,845				756,005				611,348				538,551
Consumer			3,728				3,706				3,304				4,001				4,417
Other			113,263				118,997				93,676				80,593				49,771
Total loans		$	2,972,852			$	2,749,177			$	2,447,945			$	2,068,724			$	1,612,394
Asset Quality:
Nonaccrual loans		$	9,439			$	9,806			$	9,896			$	10,030			$	11,077
Loans > 90 days and still accruing			98				387				40				278				561
Restructured loans--accruing			781				785				790				5,295				5,319
Total nonperforming loans		$	10,318			$	10,978			$	10,726			$	15,603			$	16,957
Other real estate owned			-				-				1,666				1,676				1,676
Total nonperforming assets		$	10,318			$	10,978			$	12,392			$	17,279			$	18,633
QTD Net charge-offs (recoveries)		$	457			$	(4)			$	(17)			$	2,376			$	146
Nonaccrual loans:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied		$	921			$	964			$	986			$	1,008			$	1,032
Non-farm non-residential non-owner occupied			309				323				334				346				353
Residential			111				116				121				127				133
Construction, development & other			227				232				238				244				251
Farmland			-				-				-				-				-
Commercial & industrial			7,846				8,165				8,210				8,297				9,162
Consumer			20				-				-				-				-
Other			-				-				-				-				-
Purchased credit impaired			5				6				7				8				146
Total nonaccrual loans		$	9,439			$	9,806			$	9,896			$	10,030			$	11,077
Asset Quality Ratios:
Nonperforming assets to total assets			0.29	%			0.33	%			0.41	%			0.69	%			0.89	%
Nonperforming loans to total loans			0.35	%			0.40	%			0.44	%			0.75	%			1.05	%
Allowance for loan losses to total loans			0.98	%			0.97	%			0.95	%			0.93	%			0.97	%
QTD Net charge-offs(recoveries) to average loans (annualized)			0.06	%			0.00	%			0.00	%			0.53	%			0.04	%

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

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

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

		Three Months Ended																				Year Ended
		2022												2021								2021
(Dollars in thousands, except per share data)		September 30				June 30				March 31				December 31				September 30				December 31
Tangible Common Equity:
Total shareholders' equity		$	376,354			$	301,967			$	301,203			$	299,007			$	206,202			$	299,007
Less:  Preferred stock including additional paid in capital			66,273				-				-				-				-				-
Total common equity			310,081				301,967				301,203				299,007				206,202				299,007
Less:  Goodwill and core deposit intangibles, net			19,205				19,245				19,286				19,326				19,366				19,326
Tangible common equity		$	290,876			$	282,722			$	281,917			$	279,681			$	186,836			$	279,681
Common shares outstanding at end of period			13,521,826				13,464,093				13,445,782				13,403,324				9,313,929				13,403,324
Book Value Per Share		$	22.93			$	22.43			$	22.40			$	22.31			$	22.14			$	22.31
Tangible Book Value Per Share		$	21.51			$	21.00			$	20.97			$	20.87			$	20.06			$	20.87
Tangible Assets:
Total assets		$	3,516,845			$	3,358,062			$	3,040,388			$	2,499,412			$	2,082,171			$	2,499,412
Adjustments:  Goodwill and core deposit intangibles, net			19,205				19,245				19,286				19,326				19,366				19,326
Tangible assets		$	3,497,640			$	3,338,817			$	3,021,102			$	2,480,086			$	2,062,805			$	2,480,086
Total Common Equity to Total Assets			8.82	%			8.99	%			9.91	%			11.96	%			9.90	%			11.96	%
Tangible Common Equity to Tangible Assets			8.32	%			8.47	%			9.33	%			11.28	%			9.06	%			11.28	%
		Three Months Ended																				Year Ended
		2022												2021								2021
(Dollars in thousands, except per share data)		September 30				June 30				March 31				December 31				September 30				December 31
Average Tangible Common Equity:
Average shareholders' equity		$	308,092			$	303,135			$	301,537			$	257,583			$	174,768			$	170,630
Less:  Average preferred stock including additional paid in capital			720				-				-				-				-				-
Average common equity			307,372				303,135				301,537				257,583				174,768				170,630
Less:  Average goodwill and core deposit intangibles, net			19,225				19,265				19,306				19,343				19,383				19,404
Average tangible common equity		$	288,147			$	283,870			$	282,231			$	238,240			$	155,385			$	151,226
Net Income		$	6,770			$	2,277			$	2,087			$	354			$	2,385			$	11,424
Return on Average Common Equity			8.74	%			3.01	%			2.81	%			0.55	%			5.41	%			6.70	%
Return on Average Tangible Common Equity			9.32	%			3.22	%			3.00	%			0.59	%			6.09	%			7.55	%

 

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SOURCE Third Coast Bancshares

FAQ

What are the key financial highlights for TCBX in Q3 2022?

In Q3 2022, TCBX reported net income of $6.8 million and total assets of $3.52 billion, with loans increasing to $2.97 billion.

How much did Third Coast Bancshares increase its loans in Q3 2022?

Third Coast Bancshares increased its loans by 8.1%, amounting to $223.7 million in Q3 2022.

What was the net interest income for TCBX in Q3 2022?

The net interest income for TCBX in Q3 2022 was $31.4 million, up 13.0% from Q2 2022.

What is the current ratio of non-performing assets for TCBX?

As of September 30, 2022, non-performing assets for TCBX accounted for 0.29% of total assets.

When is the earnings conference call for TCBX scheduled?

The earnings conference call for TCBX is scheduled for October 27, 2022, at 11:00 a.m. Eastern Time.