Shares of Third Coast Bancshares, Inc. (TCBX) have been strong performers lately, with the stock up 9.9% over the past month. The stock hit a new 52-week high of $43.74 in the previous session. Third Coast Bancshares has gained 12.2% since the start of the year compared to the 0.5% gain for the Zacks Finance sector and the 9.5% return for the Zacks Banks - Southeast industry.What's Driving the Outperformance?The stock has a great record of positive earnings surprises, as it hasn't missed our earnings conse ...

Core Insights - Third Coast Bancshares, Inc. reported a net income of $17.9 million for Q4 2025, a slight decrease from $18.1 million in Q3 2025 and an increase from $13.7 million in Q4 2024, with basic and diluted EPS of $1.21 and $1.02 respectively [1] - The decline in net income quarter-over-quarter was attributed to merger-related legal and professional expenses, as well as higher salaries and benefits, although this was partially offset by an increase in net interest income (NII) and non-margin loan fees [1] - The company is expected to continue focusing on operational efficiency, although near-term expenses may remain volatile during the early stages of the integration of Keystone [1] Financial Performance - Q4 2025 net income: $17.9 million, compared to $18.1 million in Q3 2025 and $13.7 million in Q4 2024 [1] - Basic EPS: $1.21; Diluted EPS: $1.02 [1] - NIM (Net Interest Margin) remained steady at 4.10% [6] Growth and Integration - The company has increased the low end of its deposit growth range [6] - The integration of Keystone is ongoing, with expectations of operational efficiency being prioritized [1]

Financial Data and Key Metrics Changes - Gross loans increased by $230 million, or 5.5% compared to the third quarter, reaching $4.39 billion, marking a 10.8% rise year-over-year [5] - Total assets ended the year at $5.34 billion, reflecting a 5.5% increase over the third quarter and an 8.1% rise compared to the previous year-end [6] - Total deposits grew by over $254 million in the fourth quarter, reaching $4.6 billion, a 5.8% increase from the third quarter and a 7.3% rise year-over-year [6] - Net income for the fourth quarter was $17.9 million, leading to a record total annual net income of $66.3 million, reflecting a 39% increase year-over-year [8] - Return on equity was 14%, marking a 24% increase from last year [8] - Earnings per share reached $1.02 for the quarter and totaled $3.79 for the year, representing a 36% increase from the prior year [8] Business Line Data and Key Metrics Changes - Service charges and fees increased by approximately 24% over the third quarter and an impressive 55% year-over-year [6] - Loan interest income and fees grew by about 7% compared to the previous year [6] - Non-accrual loans decreased by $603,000 in the fourth quarter and $16.7 million for the full year, indicating improved credit quality [11] Market Data and Key Metrics Changes - The cost of funds stood at 3.33% in the fourth quarter, reflecting a 23 basis point improvement from the third quarter and a 50 basis point improvement from a year ago [9] - The loan-to-deposit ratio maintained at 95% [9] Company Strategy and Development Direction - The company is focused on the integration of its merger with Keystone Bankshares, Inc., aiming to create a combined $6 billion entity with 22 locations across Texas [13][14] - Strategic initiatives for 2026 include achieving loan growth targets of $75-$100 million per quarter and maintaining disciplined underwriting practices [14] - The company aims to enhance operational efficiency while scaling its organization for greater success [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue delivering substantial value to shareholders and highlighted the positive momentum generated in 2025 [13][15] - The outlook for 2026 is optimistic, with expectations of favorable loan production conditions and a strong pipeline [24][31] Other Important Information - The allowance for credit losses represented 1% of total loans, slightly declining from 1.02% at the previous year-end [12] - The company has reinitiated its 1% initiative to improve efficiency and is expected to realize more efficiencies from the upcoming core conversion [49] Q&A Session Summary Question: Inquiry on expenses and actions taken in the quarter - Management noted $1.5 million in sign-on and severance costs, with additional merger-related expenses expected [19][20] Question: Future hiring post-acquisition - Management indicated ongoing hiring as a talent magnet, with no fundamental shift expected in operations [22] Question: Loan growth expectations post-Keystone acquisition - Management maintained the loan growth target of $75-$100 million per quarter, with potential for favorable conditions in 2026 [24][31] Question: Deposit growth drivers - Management clarified that deposit growth was somewhat seasonal and not driven by specific campaigns [44] Question: Expectations for non-interest income - Management expressed optimism for non-interest income, projecting a strong run rate [51] Question: Update on securitization pipeline - Management indicated likelihood of another securitization in 2026, focusing on selling existing assets [55] Question: Appetite for additional M&A - Management confirmed ongoing strategic planning for M&A, remaining selective in opportunities [40]

Third Coast Bancshares (NasdaqGS:TCBX) Q4 2025 Earnings call January 22, 2026 11:00 AM ET Company ParticipantsWoody Lay - Managing Director - Equity ResearchBart Caraway - Founder, Chairman, President, and CEONatalie Hairston - Head of Investor RelationsAudrey Spaulding - Chief Credit OfficerJohn McWhorter - CFOMichael Rose - Managing Director - Equity ResearchDave Storms - Director of Equity ResearchConference Call ParticipantsBernard Von Gizycki - Equity Research AnalystMatt Olney - Equity Research Analys ...

Financial Data and Key Metrics Changes - Gross loans increased by $230 million, or 5.5% compared to the third quarter, reaching $4.39 billion, marking a 10.8% rise year-over-year [4] - Total assets ended the year at $5.34 billion, reflecting a 5.5% increase over the third quarter and an 8.1% rise compared to the previous year-end [5] - Total deposits grew by over $254 million in the fourth quarter, reaching $4.6 billion, a 5.8% increase from the third quarter and a 7.3% rise year-over-year [5] - Net income for the fourth quarter was $17.9 million, leading to a record total annual net income of $66.3 million, reflecting a 39% increase year-over-year [8] - Return on equity was 14%, marking a 24% increase from last year [8] - Earnings per share reached $1.02 for the quarter and totaled $3.79 for the year, representing a 36% increase from the prior year [8] Business Line Data and Key Metrics Changes - Service charges and fees increased by approximately 24% over the third quarter and an impressive 55% year-over-year [5] - Loan interest income and fees grew by about 7% compared to the previous year [5] - Non-accrual loans decreased by $603,000 in the fourth quarter and $16.7 million for the full year, indicating improved asset quality [11] - The allowance for credit losses represented 1% of total loans, slightly declining from 1.02% at the previous year-end [12] Market Data and Key Metrics Changes - The company maintained a loan-to-deposit ratio of 95% [9] - Cost of funds stood at 3.33% in the fourth quarter, reflecting a 23 basis point improvement from the third quarter and a 50 basis point improvement from a year ago [9] Company Strategy and Development Direction - The company is focused on the integration of its merger with Keystone Bankshares, expected to create a combined $6 billion entity with 22 locations across Texas [15] - Strategic initiatives for 2026 include achieving loan growth targets of $75-$100 million per quarter and maintaining disciplined underwriting practices [15] - The company aims to enhance operational efficiency while scaling its organization for greater success [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue delivering substantial value to shareholders and highlighted the positive momentum from 2025 [16] - The company anticipates a favorable loan production environment in 2026, with expectations of continued growth despite potential market uncertainties [32] Other Important Information - The company achieved significant milestones, including surpassing $5 billion in total assets and completing two securitizations in 2025 [14] - Management emphasized the importance of relationship banking and customer service in driving growth and profitability [15] Q&A Session Summary Question: Can you walk through the actions taken regarding expenses? - Management noted $1.5 million in sign-on and severance costs, with additional merger-related expenses expected [20] Question: How do you view additional hiring post-acquisition? - Management indicated ongoing hiring to attract quality bankers, with no fundamental shift in operations expected [23] Question: What is the expected loan growth range post-Keystone acquisition? - Management maintained the loan growth target of $75-$100 million per quarter, indicating a favorable outlook for 2026 [25] Question: What drove the strong deposit growth? - Management attributed the growth to seasonal factors and ongoing efforts to grow core deposits, with no specific campaigns conducted [44] Question: What are the expectations for non-interest income in 2026? - Management expressed optimism for non-interest income, projecting a strong run rate around $4 million [50] Question: Any updates on the securitization pipeline? - Management indicated that another securitization is likely in 2026, focusing on selling existing assets to manage concentration [54] Question: How does dynamic pricing impact interest expenses? - Management highlighted improved pricing tools and the ability to optimize earnings through dynamic pricing strategies [71]

Financial Performance - Record annual net income of $66.3 million and diluted earnings per share of $3.79 for the year ended December 31, 2025, compared to $47.7 million and $2.78 per diluted share for 2024[3] - Net income for the three months ended December 31, 2025, was $17,898 thousand, slightly down from $18,057 thousand in the previous quarter, a decrease of 0.88%[29] - Net income available to common shareholders for the three months ended December 2025 was $16,701,000, compared to $12,418,000 for the same period in 2024, reflecting a year-over-year increase of 34.5%[45] - Diluted earnings per share for the year ended December 31, 2025, was $3.79, up from $2.78 in the previous year, representing a growth of 36.3%[29] - Basic earnings per share for Q4 2025 was $1.21, up from $0.90 in Q4 2024, representing a 34.4% increase[31] - Basic earnings per share for the three months ended December 31, 2025, was $1.21, compared to $1.22 in the previous quarter, reflecting a decline of 0.82%[29] Asset Growth - Total assets rose by $398.3 million to $5.34 billion, representing an 8.1% increase over the previous year[10] - Total assets grew to $5,340,759,000 in December 2025 from $4,942,446,000 in December 2024, a rise of 8.1%[45] - Total assets increased to $5,221,538 thousand in Q4 2025, compared to $5,091,618 thousand in Q3 2025, marking a 2.6% increase[34] Loan and Deposit Metrics - Gross loans increased to $4.39 billion as of December 31, 2025, a growth of 10.8% from $3.97 billion reported as of December 31, 2024[10] - Deposits totaled $4.63 billion as of December 31, 2025, a 7.3% increase from $4.31 billion reported as of December 31, 2024[10] - Total loan portfolio increased to $4,394,751 thousand in December 2025, up from $4,165,116 thousand in September 2024, representing a growth of 5.5%[40] - Interest-bearing deposits rose to $3,989,201 thousand in Q4 2025, with an average rate of 3.73%, down from 3.98% in Q3 2025[34] Income and Expense Analysis - Net interest income for the fourth quarter of 2025 was $52.2 million, up 20.2% from $43.4 million in the fourth quarter of 2024[9] - Noninterest income increased to $4.3 million for the fourth quarter of 2025, compared to $2.9 million for the same quarter in 2024[11] - Total noninterest expense rose to $32,691 thousand for the three months ended December 31, 2025, compared to $28,892 thousand in the previous quarter, indicating an increase of 13.5%[29] - Total interest income for the three months ended December 31, 2025, was $92,099 thousand, compared to $92,503 thousand for the previous quarter, reflecting a decrease of 0.44%[29] Credit Quality - Nonperforming loans decreased to $21.5 million, with a nonperforming loans to total loans ratio of 0.49% as of December 31, 2025[15] - The provision for credit loss for the fourth quarter of 2025 was $2.2 million, with an allowance for credit losses of $43.9 million, representing 1.00% of gross loans[16] - The allowance for credit losses to total loans ratio was 1.00% in December 2025, slightly down from 1.02% in September 2024[40] - The company maintains a focus on asset quality, with nonaccrual loans totaling $10,120 thousand in December 2025, down from $10,723 thousand in September 2024[40] Shareholder Metrics - Shareholders' equity increased to $531,027 thousand, reflecting a growth of 3.4% from $513,830 thousand in the prior quarter[27] - Book value per share increased to $33.47 in Q4 2025 from $28.65 in Q4 2024, a growth of 16.3%[31] - Tangible common equity reached $446,187,000 in December 2025, up from $375,718,000 in December 2024, marking an increase of 19.0%[45] Strategic Outlook - The integration of Keystone Bancshares, Inc. is expected to enhance market presence and operational efficiency, although potential risks remain[23] - The company anticipates continued revenue and earnings growth, supported by strategic expansion initiatives and market conditions[24]

Have you been paying attention to shares of Third Coast Bancshares, Inc. (TCBX) ? Shares have been on the move with the stock up 11.2% over the past month. The stock hit a new 52-week high of $41.35 in the previous session. Third Coast Bancshares has gained 19.5% since the start of the year compared to the 15.8% move for the Zacks Finance sector and the 6.4% return for the Zacks Banks - Southeast industry.What's Driving the Outperformance?The stock has a great record of positive earnings surprises, as it ha ...

Core Insights - The analysis of Third Coast Bancshares, Inc. (TCBX) indicates a justified buy rating with approximately 7% returns over the past nine months, reflecting a positive outlook despite mixed macroeconomic signals [1] Company Overview - Third Coast Bancshares, Inc. operates in a challenging macroeconomic environment characterized by persistent inflation [1] Analyst Background - The analyst has nearly two decades of experience in the logistics sector and a decade in stock investing and macroeconomic analysis, focusing on ASEAN and NYSE/NASDAQ stocks, particularly in banking, telecommunications, logistics, and hotels [1] Investment Strategy - The analyst's investment strategy includes diversification across various industries and market capitalizations, with holdings in both retirement-focused and trading profit-oriented stocks [1]

Core Insights - Crude Value Insights provides an investment service and community focused on the oil and natural gas sectors, emphasizing cash flow generation and growth potential [1] - Subscribers benefit from a model account featuring over 50 stocks, detailed cash flow analyses of exploration and production (E&P) firms, and live discussions about the sector [1] Subscription Offer - A two-week free trial is available for new subscribers, promoting engagement with oil and gas investment opportunities [2]

Financial Performance - For the three months ended September 30, 2025, net interest income increased by $10.5 million, or 25.9%, compared to the same period in 2024, reaching $50.8 million[290]. - The company's net income for the three months ended September 30, 2025, was $18.06 million, representing a 41.3% increase compared to $12.78 million in the same period of 2024[290]. - For the nine months ended September 30, 2025, net interest income increased to $143.0 million, up from $117.3 million in 2024, representing a growth of 21.9%[295]. - Total noninterest income for the nine months ended September 30, 2025, was $9.4 million, an increase of $1.6 million, or 21.2%, compared to $7.7 million for the same period in 2024[311]. - Total noninterest expense for the nine months ended September 30, 2025, was $85.8 million, an increase of $8.7 million, or 11.3%, compared to $77.1 million for the same period in 2024[314]. Asset and Loan Growth - As of September 30, 2025, the company reported total assets of $5.06 billion, total loans of $4.17 billion, total deposits of $4.37 billion, and total shareholders' equity of $513.8 million[280]. - The average loans increased from $3.74 billion for the nine months ended September 30, 2024, to $4.06 billion for the same period in 2025, primarily driven by growth in commercial loans[292]. - Average loans increased from $3.80 billion in Q3 2024 to $4.18 billion in Q3 2025, primarily driven by growth in commercial loans[299]. - Total assets as of September 30, 2025, were $4.89 billion, compared to $4.45 billion in 2024, marking an increase of 9.9%[295]. - Total loans as of September 30, 2025, were $4.17 billion, an increase of $198.7 million, or 5.0%, compared to $3.97 billion as of December 31, 2024[322]. Credit Losses and Provisions - The provision for credit losses for the three months ended September 30, 2025, was $2.76 million, a significant increase of 154.7% from $1.08 million in the same period in 2024[290]. - The provision for credit losses for the nine months ended September 30, 2025, was $5.3 million, an increase from $4.5 million for the same period in 2024[307]. - The allowance for credit losses for loans totaled $42.6 million, or 1.02% of total loans, compared to $40.3 million, or 1.02% of total loans, as of December 31, 2024[308]. - The ratio of nonaccrual loans to total loans improved to 0.26% as of September 30, 2025, down from 0.67% as of December 31, 2024[334]. - The allowance for credit losses to nonaccrual loans ratio was 396.93% as of September 30, 2025, indicating strong coverage for potential losses[334]. Deposits and Funding - Total deposits as of September 30, 2025, were $4.37 billion, an increase of $62.2 million, or 1.4%, compared to $4.31 billion as of December 31, 2024[350]. - Noninterest-bearing deposits decreased by $152.1 million, or 25.3%, to $450.0 million as of September 30, 2025[350]. - Total interest-bearing account balances increased by $214.3 million, or 5.8%, to $3.92 billion as of September 30, 2025[350]. - The average total loans to average deposits ratio was 96.5% for the nine months ended September 30, 2025, slightly down from 96.6% for the year ended December 31, 2024[363]. - The borrowing capacity under FHLB advances was $524.5 million as of September 30, 2025, down from $623.7 million as of December 31, 2024[353]. Mergers and Acquisitions - The company entered into a merger agreement on October 22, 2025, to merge with Keystone, which is expected to close in the first quarter of 2026[283]. Interest Rate Management - The company manages interest rate risk through a measurement system for monitoring net interest rate sensitivity, with a goal to minimize risk while maximizing income[381]. - Under various interest rate shock scenarios, a 200 basis point increase in rates is estimated to result in a 3.15% increase in net interest income[387]. - The cost of senior debt and note payable was 6.17% for the nine months ended September 30, 2025, compared to 6.66% for the same period in 2024[356]. Regulatory Compliance - The Company was classified as "well capitalized" under FDIC regulations as of September 30, 2025, meeting all applicable regulatory capital requirements[368]. - The company qualifies as an "emerging growth company," allowing it to take advantage of reduced reporting requirements until certain thresholds are met[395].