Core Viewpoint - Third Coast Bancshares, Inc. (TCBX) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is effective for individual investors as it focuses on earnings estimate revisions, which are strongly correlated with near-term stock price movements [2][4]. - The recent upgrade reflects an improvement in Third Coast Bancshares' underlying business, suggesting that investors may respond positively by driving the stock price higher [5]. Earnings Estimate Revisions - Analysts have increased their earnings estimates for Third Coast Bancshares, with the Zacks Consensus Estimate rising by 9.3% over the past three months [8]. - The company is projected to earn $3.66 per share for the fiscal year ending December 2025, indicating no year-over-year change [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade places Third Coast Bancshares in the top 5% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10].

Core Insights - Five stocks have been added to the Zacks Rank 1 (Strong Buy) List, indicating strong potential for investment based on recent earnings estimate increases Company Summaries - **Comfort Systems USA (FIX)**: A national provider of HVAC services, with a 5.8% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [1] - **Third Coast Bancshares (TCBX)**: A bank holding company offering various financial services, with a 5.1% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [2] - **Simulations Plus (SLP)**: A developer of drug discovery simulation software, with a 3% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [3] - **Horizon Bancorp IN (HBNC)**: A full-service commercial bank, with a 2.7% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [4] - **Seagate Technology (STX)**: A provider of data storage technology, with a 2.4% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [5]

Core Viewpoint - Monteverde & Associates PC is investigating the merger between Third Coast Bancshares, Inc. and Keystone Bancshares, Inc., focusing on whether the deal is fair for Keystone shareholders [1]. Company Overview - Monteverde & Associates PC is a national class action securities firm based in the Empire State Building, New York City, recognized for recovering millions for shareholders and ranked as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report [1][2]. Merger Details - Under the proposed merger terms, Keystone shareholders can choose to receive either 0.45925 shares of Third Coast common stock or cash equivalent to 0.45925 multiplied by the volume-weighted average price per share of Third Coast common stock over a specified 20 trading day period [1].

Core Insights - Third Coast Bancshares, Inc. reported a net income of $18.1 million for Q3 2025, an increase from $16.7 million in Q3 2024, resulting in a basic EPS of $1.22 and a diluted EPS of $1.03 [1][7] - The increase in net income was primarily driven by stronger net interest income and higher non-margin loan fees, although it was partially offset by a higher provision for credit losses [1][7] - The company is expected to maintain operational efficiency through a 1% improvement initiative, with non-interest expenses projected to remain stable [1] Financial Performance - Net income for Q3 2025 rose to $18.1 million, with a return on average assets (ROAA) improving to 1.41% from 1.38% sequentially [7] - The net interest margin for Q3 2025 was reported at 4.10%, compared to 4.22% in Q2 2025 and 3.73% year-over-year [7] Strategic Developments - Third Coast Bancshares announced a definitive agreement to acquire Keystone Bancshares for approximately $123 million, with pro forma assets exceeding $6 billion and a targeted closing in Q1 2026 [7]

Financial Data and Key Metrics Changes - The company reported a net income of $16.9 million for Q3 2025, an increase of 8.3% compared to Q2 2025, resulting in a return on assets (ROA) of 1.41% and a return on equity (ROE) of 15.1% [8][9] - Total assets surpassed $5 billion for the first time, with a compound annual growth rate of 19.3% since the IPO in November 2021 [6] - The efficiency ratio improved to 53.05% for Q3 2025, indicating better operational efficiency [7] Business Line Data and Key Metrics Changes - Net interest income increased by $1.5 million, or 3%, primarily due to a better-than-expected net interest margin and growth in average earning assets of $229 million [9] - Average loans rose by $158 million compared to Q2 2025, while period-end loans increased by $85.4 million [9] Market Data and Key Metrics Changes - Deposits increased by $92 million for the quarter, resulting in a loan-to-deposit ratio of 95% [9] - The yield on the investment securities portfolio was 6.07% as of September 30, 2025, with total investment securities rising to $583 million [9] Company Strategy and Development Direction - The company announced a definitive merger agreement with Keystone Bancshares, expected to close in Q1 2026, which will create a combined entity with total assets exceeding $6 billion [14] - The merger aims to enhance market presence and leverage shared commitment to relationship banking and customer service [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting loan growth targets of $50 million to $100 million in Q4 2025, supported by strong loan pipelines [15] - The company remains disciplined in underwriting and portfolio management practices to ensure high-quality growth [15] Other Important Information - The company achieved new records in book value and tangible book value, reaching $32.25 and $30.91, respectively [6] - The successful completion of the bank's first and second securitization transactions received international recognition, winning the SCI Risk Sharing Award for North American Transaction of the Year [7] Q&A Session Summary Question: Integration process timeline for the Keystone merger - The integration is expected to be straightforward due to operational compatibility, with a core conversion planned for early Q2 2026 [19][20] Question: Loan growth expectations for Q4 - The company is comfortable with the $50 million to $100 million loan growth target, although year-end paydowns may affect final figures [21][22] Question: EPS accretion expectations from the merger - EPS accretion estimates are based on consensus, with expectations that the number may change following the current earnings report [29][30] Question: Near-term securitization strategy - A third securitization is being considered, likely in Q1 2026, but it will depend on customer demand [33] Question: Future M&A opportunities - The company is open to additional deals but will maintain a high bar for any future acquisitions, focusing on cultural fit and financial rewards [50][51] Question: Fee income growth and expectations - Fee income has shown strong momentum, with expectations for a slight step down in Q4 due to seasonal factors [42][44] Question: Hiring efforts to support loan growth - The company is selectively hiring top talent to support growth, focusing on high productivity and quality candidates [46][48] Question: Geographic expansion plans - The company aims to build around the Texas Triangle and is open to opportunities that enhance shareholder value [73][75]

Financial Data and Key Metrics Changes - The company reported a net income of $16.9 million for Q3 2025, an increase of 8.3% compared to Q2 2025, resulting in a return on average assets (ROAA) of 1.41% and a return on equity (ROE) of 15.1% [8][9] - Net interest income rose by $1.5 million, or 3%, primarily due to an improved net interest margin and growth in average earning assets of $229 million [9] - The efficiency ratio improved to 53.05% for the third quarter, indicating better operational efficiency [7] Business Line Data and Key Metrics Changes - Average loans increased by $158 million compared to Q2 2025, while period-end loans rose by $85.4 million [9] - Deposits increased by $92 million for the quarter, resulting in a loan-to-deposit ratio of 95% [9] - The company achieved record book value and tangible book value, reaching $32.25 and $30.91, respectively [6] Market Data and Key Metrics Changes - The company surpassed the $5 billion threshold in total assets for the first time, with a compound annual growth rate of 19.3% since its IPO in November 2021 [6] - The company’s investment securities increased by $21 million to $583 million, with a yield on the portfolio at 6.07% [9] Company Strategy and Development Direction - The company announced a definitive merger agreement with Keystone Bancshares, expected to close in Q1 2026, which will create a combined entity with pro forma total assets exceeding $6 billion [14][15] - The merger aims to enhance market presence and leverage shared commitment to relationship banking and customer service [15] - The company remains focused on organic growth, targeting loan growth of $50 to $100 million in Q4 2025 [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting loan growth targets, citing strong demand and a robust loan pipeline [15] - The company anticipates that the remainder of 2025 will be consistent with prior quarters, with a disciplined approach to underwriting and portfolio management [15] - Management highlighted the importance of maintaining strong credit quality and risk management practices [11] Other Important Information - The company received international recognition for its securitization transactions, winning the SCI Risk Sharing Award for North American Transaction of the Year [6] - Non-accrual loans declined by $2.6 million, indicating stability in credit quality [11] Q&A Session Summary Question: Integration process timeline for the merger with Keystone - The integration is expected to be straightforward, with a core conversion planned for early Q2 2026 due to operational compatibility [19][20] Question: Loan growth expectations for Q4 - The company is comfortable with the $50 million to $100 million loan growth target, although year-end paydowns may affect final figures [21][22] Question: EPS accretion expectations from the merger - EPS accretion is based on consensus estimates, but management believes it will be more accretive than initially projected due to potential synergies [29][31] Question: Near-term securitization strategy - A third securitization is likely in Q1 2026, although it may not occur this year [33] Question: Future M&A opportunities - Future deals must be financially rewarding and culturally aligned, with a high bar set for any potential acquisitions [50][51] Question: Fee income and service charges - Fee income has shown strong momentum, with expectations for a slight step down in Q4 due to seasonal factors [41][43] Question: Hiring efforts to support loan growth - The company is selectively hiring top talent to support growth, focusing on high productivity and quality [45][46] Question: Geographic expansion plans - The company aims to build around the Texas Triangle and is open to opportunities that enhance shareholder value [72][74] Question: Keystone's credit profile and potential improvements - The credit profile of Keystone is strong, and management believes additional tools can enhance underwriting and asset quality [75][78]

Financial Data and Key Metrics Changes - The company reported a net income of $16,900,000 for Q3 2025, an increase of 8.3% compared to the previous year, resulting in a return on assets (ROA) of 1.41% and a return on equity (ROE) of 15.1% [9][10] - Net interest income rose by $15,000,000 or 3% from the previous quarter, primarily due to an improved net interest margin and growth in average earning assets of $229,000,000 [10] - The efficiency ratio improved to 53.05% for the third quarter, indicating enhanced operational efficiency [8] Business Line Data and Key Metrics Changes - Average loans increased by $158,000,000 compared to Q2 2025, with period-end loans up by $85,400,000 [10] - Deposits increased by $92,000,000 for the quarter, resulting in a loan-to-deposit ratio of 95% [10] - Capitalized loan fees reached a record $19,900,000, contributing to the overall loan growth [11] Market Data and Key Metrics Changes - The company surpassed $5,000,000,000 in total assets for the first time, achieving a compound annual growth rate of 19.3% since its IPO in November 2021 [6] - The yield on the investment securities portfolio was reported at 6.07% as of September 30, 2025 [10] Company Strategy and Development Direction - The company announced a definitive merger agreement with Keystone Bancshares, expected to close in 2026, which will create a combined entity with total assets exceeding $6,000,000,000 [16][17] - The merger aims to enhance market presence and operational efficiency, leveraging shared commitment to relationship banking and customer service [17][18] - The company remains focused on organic growth while being opportunistic in pursuing additional M&A opportunities that align with its strategic goals [59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting loan growth targets of $50,000,000 to $100,000,000 in Q4 2025, supported by a strong loan pipeline [17][29] - The company anticipates continued strong performance in the remainder of 2025, with a disciplined approach to underwriting and portfolio management [18] - Management highlighted the stability of credit quality, with non-accrual loans declining for the second consecutive quarter [13] Other Important Information - The company received international recognition for its securitization transactions, winning the SCI Risk Sharing Award for North American Transaction of the Year [7] - The efficiency improvements and stable expenses contributed to a total net income of $18,100,000 for the quarter [8] Q&A Session Summary Question: Integration process timeline for the Keystone merger - Management expects a straightforward integration process with core conversion planned for early Q2 2026 due to operational compatibility [21][22] Question: Loan growth expectations for Q4 - Management remains comfortable with the loan growth target of $50,000,000 to $100,000,000, citing strong demand and quality of the loan pipeline [24][29] Question: EPS accretion expectations from the merger - EPS accretion estimates are based on consensus, with management confident that synergies will enhance the financial benefits of the merger [33][36] Question: Near-term securitization strategy - A third securitization is being considered for Q1 2026, with the timing dependent on customer demand [37] Question: Future M&A opportunities - The company will remain disciplined in pursuing M&A, focusing on cultural fit and financial rewards, while continuing to execute its organic growth strategy [56][59] Question: Fee income outlook - Management anticipates a potential step down in fee income for Q4 due to seasonal factors, but remains optimistic about ongoing fee income initiatives [48] Question: Hiring efforts to support growth - The company is selectively hiring top talent to support growth, focusing on high productivity and cultural fit [52]

Financial Data and Key Metrics Changes - The company surpassed $5 billion in total assets for the first time, achieving a compound annual growth rate of 19.3% since its IPO in November 2021 [5] - Net income for the third quarter was $16.9 million, an increase of 8.3% compared to the second quarter of 2025, resulting in a return on average assets (ROAA) of 1.41% and a return on equity (ROE) of 15.1% [8][9] - The efficiency ratio improved to 53.05% for the third quarter, indicating better operational efficiency [6][7] Business Line Data and Key Metrics Changes - Net interest income increased by $1.5 million, or 3%, primarily due to a better-than-expected net interest margin and growth in average earning assets of $229 million [9] - Average loans rose by $158 million compared to the second quarter, while period-end loans increased by $85.4 million [9] - Non-interest expenses remained stable, with salary and employee benefits rising but legal and professional expenses declining [9] Market Data and Key Metrics Changes - Deposits increased by $92 million for the quarter, resulting in a loan-to-deposit ratio of 95% [9] - The yield on the investment securities portfolio was 6.07%, with total investment securities rising to $583 million [9] Company Strategy and Development Direction - The company announced a definitive merger agreement with Keystone Bancshares, expected to close in the first quarter of 2026, which will create a combined entity with total assets exceeding $6 billion [14] - The merger aims to enhance market presence and leverage shared commitment to relationship banking and customer service [15] - The company remains focused on organic growth, targeting loan growth of $50 to $100 million in the fourth quarter [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting loan growth targets, citing strong demand and a robust loan pipeline [15][21] - The company anticipates that the remainder of 2025 will be consistent with prior quarters, with a disciplined approach to underwriting and portfolio management [15] - Management highlighted the importance of maintaining strong credit quality and risk management practices [11] Other Important Information - The company received international recognition for its securitization transactions, winning the SCI Risk Sharing Award for North American Transaction of the Year [5] - The company is positioned as a strong performer in the market, with a commitment to delivering sustained value for shareholders [8] Q&A Session Summary Question: Integration process timeline for the merger with Keystone - Management expects a straightforward integration process, targeting an early second quarter core conversion [18] Question: Loan growth expectations for Q4 - Management remains comfortable with the $50 million to $100 million loan growth target, despite potential volatility in paydowns [19][20] Question: EPS accretion expectations from the merger - EPS accretion is based on consensus estimates, with management believing the actual number may be more favorable due to potential synergies not included in initial projections [26][28] Question: Near-term securitization strategy - A third securitization is being considered, likely in the first quarter of the following year [30] Question: Future M&A opportunities - The company is open to future deals but emphasizes the need for financial rewards and cultural fit, maintaining a disciplined approach [45][47] Question: Fee income and growth initiatives - Fee income has shown strong momentum, with expectations for continued growth, although a slight step down is anticipated in the fourth quarter due to seasonal factors [36][38] Question: Hiring efforts to support loan growth - The company is selectively hiring top talent to support growth, focusing on high productivity and cultural fit [41][43] Question: Geographic expansion plans - The company aims to continue building around the Texas Triangle and is open to opportunities that enhance shareholder value [61][63]

Financial Performance - Record net income of $18.1 million for Q3 2025, up from $16.7 million in Q2 2025 and $12.8 million in Q3 2024[6] - Basic and diluted earnings per share reached $1.22 and $1.03, respectively, compared to $1.12 and $0.96 in Q2 2025 and $0.85 and $0.74 in Q3 2024[7] - Noninterest income increased to $3.6 million in Q3 2025, up from $2.7 million in Q2 2025 and $2.5 million in Q3 2024[10] - Net income for the nine months ended September 30, 2024, was $48,393,000, compared to $33,938,000 for the same period in 2023, marking a growth of 42.5%[27] - Basic earnings per share for the nine months ended September 30, 2024, was $2.23, compared to $1.12 for the same period in 2023, reflecting an increase of 99.1%[27] - Net income available to common shareholders for the nine months ended September 2025 was $44,840,000, up from $30,385,000 in the same period of 2024, reflecting a year-over-year increase of 47.5%[42] Asset and Liability Management - Total assets increased to $5,061,808 thousand as of September 30, 2025, up from $4,943,771 thousand in the previous quarter, representing a growth of 2.2%[25] - Total liabilities increased to $4,547,978 thousand, up from $4,447,656 thousand in the previous quarter, representing a growth of 2.3%[25] - Total deposits rose to $4.37 billion, a 2.1% increase from $4.28 billion in Q2 2025 and a 9.5% increase from $3.99 billion in Q3 2024[17] - Total shareholders' equity increased to $513,830 thousand, a rise of 3.4% from $496,115 thousand in the prior quarter[25] - Total common equity to total assets ratio improved to 8.84% as of September 30, 2025, compared to 8.70% a year earlier, showing enhanced asset utilization[29] Loan and Credit Quality - Gross loans increased to $4.17 billion, a 2.1% increase from $4.08 billion in Q2 2025 and a 7.1% increase from $3.89 billion in Q3 2024[13] - Provision for credit loss was $2.8 million, with an allowance for credit losses of $42.6 million representing 1.02% of gross loans[15] - Nonperforming loans to total loans ratio improved to 0.52% in September 2025 from 0.49% in June 2025[38] - Nonaccrual loans decreased to $10,723 thousand in September 2025, down from $13,358 thousand in June 2025, a reduction of 19.5%[38] - The allowance for credit losses was $42,563 thousand, compared to $40,035 thousand in the previous quarter, reflecting a 6.3% increase[25] Efficiency and Cost Management - Efficiency ratio improved to 53.03% in Q3 2025 from 55.45% in Q2 2025 and 59.57% in Q3 2024[12] - The average cost of deposits was 3.56%, a decrease of 3 basis points from Q2 2025 and 62 basis points from Q3 2024[18] - Total noninterest expense for the nine months ended September 30, 2024, was $61,223,000, compared to $22,829,000 for the same period in 2023, showing a significant increase of 168.5%[27] Capital Position - Estimated Tier 1 capital to risk-weighted assets was 10.25% as of September 30, 2025, slightly up from 10.20% in the previous year, indicating a strong capital position[29] - Estimated total capital to risk-weighted assets was 12.90% as of September 30, 2025, up from 12.87% in the previous year, reflecting a solid capital base[29] - Tangible common equity reached $428,950,000 in September 2025, compared to $365,549,000 in September 2024, marking an increase of 17.3%[42] Shareholder Value - Book value per share increased to $32.25 as of September 30, 2025, up from $31.04 a year earlier, reflecting a growth of 3.91%[29] - Common shares outstanding at the end of the period were 13,879,091 in September 2025, compared to 13,667,591 in September 2024, indicating a slight increase[42] - Return on average common equity improved to 15.14% in September 2025, up from 11.05% in September 2024, showing a significant increase of 37.5%[42]

Core Points - Third Coast Bancshares, Inc. will report its 2025 third quarter financial results on October 22, 2025, after market close [1] - A conference call and webcast to discuss these results is scheduled for October 23, 2025, at 11:00 a.m. Eastern Time [2] Company Overview - Third Coast Bancshares, Inc. is a Texas-based bank holding company primarily operating in the Greater Houston, Dallas-Fort Worth, and Austin-San Antonio markets through its subsidiary, Third Coast Bank [3] - The bank was founded in 2008 and operates 19 branches in Texas's four largest metropolitan areas [3] Additional Information - The company has been recognized as a finalist for "2025 North American Issuer of the Year" and "2025 North American Transaction of the Year" by Structured Credit Investor [4] - Third Coast Bancshares has announced a transfer of its common stock listing to the New York Stock Exchange [5]