Financial Data and Key Metrics Changes - The company reported first quarter net income of $12.4 million, essentially flat compared to the fourth quarter of 2024, resulting in a return on assets (ROA) of 1.17% and a return on equity (ROE) of 12.4% [11] - Net interest income grew by 12.4% year-over-year but declined slightly from the fourth quarter due to a decrease in Fed funds sold and other interest-earning assets [12] - Non-interest expenses increased by 3.2% or $878,000 in the first quarter, and were up 8.5% or $2.2 million from the same quarter last year [12] - The net interest margin improved by nine basis points to 3.8% [9][12] Business Line Data and Key Metrics Changes - The company successfully executed a significant commercial real estate loan securitization, enhancing balance sheet management and generating fee income that will positively impact the net interest margin in the second quarter [6][7] - Loan growth in April was reported at over $50 million, indicating a positive trend following a modest growth in the first quarter [13][20] Market Data and Key Metrics Changes - Deposits declined by $62 million for the quarter, resulting in a loan-to-deposit ratio of 93.9% [12] - The company anticipates some seasonal roll-off in deposits, which typically occurs in the first quarter [20] Company Strategy and Development Direction - The company is focused on disciplined loan growth, robust credit management practices, and improving operational efficiencies to enhance shareholder value [5][6] - The management is evaluating additional securitizations as a tool to manage concentrations and support sustainable profitable growth [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's credit risk strategies and the overall economic outlook, noting that borrowers remain cautious but optimistic [28][29] - The company aims for $325 million in loan growth for the year, translating to an 8% annual run rate compared to the prior year [20] Other Important Information - The company achieved growth in book value and tangible book value of 4.4% and 4.7% respectively over the prior quarter, and 14.3% and 15.2% compared to the same period last year [9] - The management is considering a share buyback program due to capital accretion and the current stock price being attractive [13][55] Q&A Session Summary Question: Impact of securitization on net interest margin - Management confirmed that the securitization will primarily flow through the margin, providing a five basis point benefit for the next quarter [24] Question: Loan growth confidence amid macro uncertainty - Management indicated that the loan growth in April was primarily due to fundings on revolving lines rather than new deals, and expressed optimism about the pipeline [26][28] Question: Fee income increase drivers - The increase in fee income was attributed to the treasury management division, which has seen significant growth in recent years [34] Question: Expectations for non-interest expenses - Management expects non-interest expenses to remain flat in the second quarter, around $28 million [37] Question: Future loan growth expectations - Management remains confident in achieving the loan growth target of $325 million, despite potential fluctuations due to economic conditions [51]

Financial Data and Key Metrics Changes - The first quarter net income was $12.4 million, essentially flat compared to the fourth quarter of 2024, resulting in a return on assets (ROA) of 1.17% and a return on equity (ROE) of 12.4% [11] - Net interest income grew by 12.4% year-over-year but declined slightly from the previous quarter due to a decrease in Fed funds sold and other interest-earning assets [12] - Non-interest expenses increased by 3.2% or $878,000 in the first quarter, and were up 8.5% or $2.2 million compared to the same quarter last year [12] - The net interest margin improved by nine basis points to 3.8% [9][12] Business Line Data and Key Metrics Changes - The bank successfully executed a significant commercial real estate loan securitization, enhancing balance sheet management and generating fee income that will positively impact the net interest margin in the second quarter [7][8] - Loan growth in April was reported at over $50 million, with a quarterly average growth of $42.5 million [13] - Nonperforming loans declined by $9.3 million, improving the nonperforming loans to total loans ratio by 23 basis points from the prior quarter [15] Market Data and Key Metrics Changes - Deposits declined by $62 million for the quarter, resulting in a loan to deposit ratio of 93.9% [12] - The bank's investment securities increased by $13.4 million to $397 million, with an accumulated other comprehensive income (AOCI) gain of $10.3 million [12] Company Strategy and Development Direction - The company is focused on disciplined loan growth, robust credit management, and improving operational efficiencies while increasing shareholder value [6][9] - The management emphasized the importance of maintaining a healthy balance sheet and promoting long-term sustainable growth through proactive asset management strategies [8][20] - The bank is evaluating additional securitizations as a tool for managing concentrations and supporting sustainable profitable growth [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's credit risk strategies and the overall economic outlook, noting that borrowers remain cautious but optimistic [27][29] - The company anticipates achieving $325 million in loan growth for the year, translating to an 8% annual run rate compared to the prior year [19][49] - Management acknowledged the potential for rate cuts and their impact on loan growth and customer behavior [48][49] Other Important Information - The bank's book value and tangible book value grew by 4.4% and 4.7% respectively over the prior quarter, and by 14.3% and 15.2% compared to the same period last year [9] - The company is considering a share buyback program due to capital accretion and stock price levels [13][51] Q&A Session Summary Question: Impact of securitization on net interest margin - Management confirmed that the securitization will primarily impact the margin, providing a five basis point benefit for the next quarter [23] Question: Loan growth confidence amid macro uncertainty - Management indicated that the loan growth in April was primarily due to fundings on revolving lines rather than new deals, and expressed optimism about the pipeline [25][26] Question: Fee income increase drivers - The increase in fee income was attributed to the treasury management division, which has seen significant growth in recent years [32][33] Question: Expectations for non-interest expenses - Management expects non-interest expenses to remain flat in the second quarter, around $28 million [36] Question: Outlook on loan production yields and margin - Management anticipates a stable margin around 3.75% to 3.8%, with the potential for improvement depending on interest rate movements [40][42] Question: Consideration of share buybacks - Management is seriously considering a buyback program due to attractive stock levels and capital accretion [51][52]

Third Coast Bancshares shares have lost about 11.1% since the beginning of the year versus the S&P 500's decline of -10.1%. What's Next for Third Coast Bancshares? While Third Coast Bancshares has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? Third Coast Bancshares, Inc. (TCBX) came out with quarterly earnings of $0.78 per share, beating the Zacks Consensus Estimate of $0.70 per share. This compares to earnings of $0.61 per share a yea ...

Financial Performance - Year-over-year net income improved by 31% to $13.6 million for Q1 2025, with diluted EPS increasing by 28% to $0.78[2][9] - Net interest income for Q1 2025 was $42.797 million, compared to $38.079 million in Q1 2024, reflecting a year-over-year increase of 12.66%[39] - Net income for the three months ended March 31, 2025, was $13,589 thousand, slightly down from $13,733 thousand in the previous quarter[32] - Basic earnings per share for the three months ended March 31, 2025, were $0.90, compared to $0.92 for the previous quarter[32] - The diluted earnings per share for Q1 2025 was $0.78, compared to $0.63 in Q2 2024, marking a 23.81% increase[35] Asset and Loan Growth - Gross loans increased to $3.99 billion, a growth of $21.6 million or 0.5% from Q4 2024, and up 6.5% from $3.75 billion in Q1 2024[5][16] - Total loans increased to $3,988,039 thousand in Q1 2025, up from $3,966,425 thousand in Q4 2024, representing a growth of 0.03%[43] - Loans held for investment increased to $3,988,039 thousand as of March 31, 2025, compared to $3,966,425 thousand as of December 31, 2024, representing a growth of 0.5%[31] Asset Quality - Nonperforming loans decreased to $18.6 million, with a nonperforming loans to total loans ratio of 0.47% as of March 31, 2025[17][18] - Nonperforming loans decreased to $18,569 thousand in Q1 2025, down from $27,946 thousand in Q4 2024, a reduction of 33.6%[43] - Nonaccrual loans dropped to $17,066 thousand in Q1 2025, down from $26,773 thousand in Q4 2024, a decrease of 36.4%[43] - The allowance for credit losses to total loans remained stable at 1.01% in Q1 2025, consistent with Q4 2024[43] Deposits and Funding - Deposits totaled $4.25 billion, a decrease of 1.4% from $4.31 billion in Q4 2024, but an increase of 4.9% from $4.05 billion in Q1 2024[20] - Total deposits as of March 31, 2025, were $4,248,543 thousand, a decrease from $4,310,498 thousand as of December 31, 2024[31] - The average cost of deposits was 3.60%, down 23 basis points from Q4 2024 and 49 basis points from Q1 2024[21] Efficiency and Ratios - The efficiency ratio was 61.23%, compared to 58.80% in Q4 2024 and 64.11% in Q1 2024[15] - The efficiency ratio for Q1 2025 was 61.23%, slightly higher than 58.80% in Q4 2024, suggesting a need for cost management[35] - Total common equity to total assets ratio improved to 8.45% in Q1 2025 from 7.98% in Q4 2024, indicating stronger capital position[35] - Common equity tier 1 ratio to risk-weighted assets was 8.70% in Q1 2025, up from 8.41% in Q4 2024, indicating improved capital adequacy[35] Other Financial Metrics - Book value per share rose to $29.92, compared to $28.65 in Q4 2024 and $26.18 in Q1 2024[5][9] - Tangible common equity rose to $394,825 thousand in Q1 2025, compared to $375,718 thousand in Q4 2024, reflecting an increase of 5.4%[47] - Tangible book value per share improved to $28.56 in Q1 2025, up from $27.29 in Q4 2024, an increase of 4.7%[47] - Retained earnings increased to $134,115 thousand as of March 31, 2025, compared to $121,697 thousand as of December 31, 2024[31]

Year-over-Year Net Income Improved 31% and Diluted EPS increased 28% Net Interest Margin Expands to 3.80% and Book Value Per Share IncreasesHOUSTON, April 23, 2025 /PRNewswire/ -- Third Coast Bancshares, Inc. (NASDAQ: TCBX) (the "Company," "Third Coast," "we," "us," or "our"), the bank holding company for Third Coast Bank (the "Bank"), today reported its 2025 first quarter financial results.Year to Date Financial Highlights Return on average assets of 1.17% annualized for the first quarter of 2025 compared ...

Core Viewpoint - Third Coast Bank has successfully originated a $200 million revolving commercial real estate loan, marking a significant achievement for the organization and enhancing its financial position through improved risk management and capital efficiency [1][7]. Group 1: Loan Details - The $200 million mortgage loan is secured by a portfolio of eleven Residential Master Planned Communities under development in the Houston, Dallas, and Austin metropolitan areas of Texas [2]. - EJF Capital LLC, a global alternative asset management firm with approximately $5.4 billion in assets under management as of December 31, 2024, arranged the securitization transaction related to the mortgage loan [2][10]. Group 2: Securitization Process - Following the loan origination, Third Coast Bank created participation interests in the mortgage loan, selling one to EJF CRT 2025-1 Depositor LLC, which then sold it to EJF CRT 2025-1 LLC [3]. - The Issuer pledged its participation interests to U.S. Bank Trust Company, National Association, and issued Asset-Backed Notes, including Class A-1 and Class M-1 Notes, with the Class A-1 Notes sold to the Bank [4]. Group 3: Financial Impact - The transactions are expected to reduce the Bank's risk-weighted assets and the ratio of loans for construction and land development to total capital, which is a measure used by regulators to assess loan concentration risk [6]. - The Company believes these transactions will enhance the diversity of the Bank's on-balance sheet loan portfolio [6]. Group 4: Leadership Commentary - Bart Caraway, President & CEO of Third Coast Bank, expressed pride in the team's efforts to complete the first securitization, highlighting its importance in strengthening the Bank's financial position and opening new opportunities for customer service [7].

Regulatory and Compliance Risks - The company anticipates increased regulatory scrutiny and new regulations, which may increase costs and reduce profitability [211]. - Changes in accounting standards or regulatory interpretations could materially impact the company's financial statements and disclosures [200]. - The company is subject to extensive regulations that govern operations, including minimum capital requirements and limitations on business activities, which could adversely affect results of operations [236]. - The ongoing implementation of the Dodd-Frank Act may impact the profitability of business activities and require significant management resources to comply with new regulatory requirements [237]. - The Company must receive federal and state regulatory approvals for strategic acquisitions and expansion plans, which may not be granted on acceptable terms [243]. - The Bank Secrecy Act and anti-money laundering regulations require the Company to maintain effective compliance programs, with potential penalties for deficiencies [247]. - The Company faces risks related to consumer protection laws, including the Community Reinvestment Act, which could lead to sanctions if not complied with [249]. - The conversion to a Texas banking association subjects the Bank to new examination and reporting requirements, potentially increasing operational costs [242]. - The company is subject to complex laws regarding privacy and data protection, and any violations could damage its reputation and financial condition [244]. - The company services most of its own loans, which are subject to increasing regulatory scrutiny, potentially leading to higher compliance costs and risks of noncompliance [253]. - The Federal Reserve may require the company to commit capital resources to support its subsidiary bank, which could adversely impact financial condition and operational results [255]. - The company is subject to extensive regulations, including the Foreign Corrupt Practices Act (FCPA), which could lead to serious legal and reputational consequences if not complied with [251]. - The company faces uncertainties and risks associated with its operations, as detailed in the risk factors section of its filings [275]. Economic and Market Conditions - Inflationary pressures have risen in 2022 and continued into 2023 and 2024, potentially increasing credit risk for the company [212]. - Economic conditions in primary markets, such as Greater Houston and Dallas-Fort Worth, significantly impact the company's operations and financial results [216]. - A significant portion of the company's business is generated from the Greater Houston market, which is vulnerable to natural disasters like hurricanes, potentially leading to decreased revenue and increased loan losses [217]. - Market conditions, such as uncertain regulatory environments and changing interest rates, could negatively impact the banking industry and the company's operations [222]. - The ability to assess customer creditworthiness is complicated by economic conditions, potentially leading to increased loan delinquencies and nonperforming assets [223]. - Climate change may result in more frequent extreme weather events, adversely affecting the operations and creditworthiness of customers, which could decrease revenues and increase credit risk [218]. - Legislative initiatives aimed at mitigating climate change may impose additional costs and operational changes on the company, impacting its financial condition [219]. Operational and Technological Risks - The company maintains internal controls to mitigate operational risks, but failures could adversely affect business and financial results [203]. - Cybersecurity risks are heightened due to reliance on third-party systems, which could disrupt operations and adversely affect financial condition if breaches occur [226]. - The company faces challenges in keeping pace with technological changes, which are essential for competitiveness in the financial services industry [232]. - Larger competitors may have greater resources for technological improvements, potentially putting the company at a competitive disadvantage [233]. - The development and use of artificial intelligence (AI) presents risks that may adversely impact the Company's business, including legal and regulatory uncertainties [234]. Environmental and Social Governance (ESG) Concerns - Increasing scrutiny regarding environmental, social, and governance (ESG) practices may lead to higher compliance costs and affect the company's reputation and stock price [220]. - The company may face significant environmental liabilities related to real estate properties acquired or foreclosed upon [205]. Financial Position and Capital Structure - The company had $80.8 million in subordinated debentures and $30.9 million in outstanding senior debt as of December 31, 2024, indicating significant leverage [266]. - As of December 31, 2024, the company's directors and executive officers owned approximately 10.24% of common stock, potentially influencing corporate governance and decision-making [265]. - The company has the authority to issue up to 1,000,000 shares of preferred stock, which could affect common stockholders' rights and market price [267]. - The company's ability to pay dividends is dependent on the Bank's cash flow, which is restricted by federal regulations requiring certain capital levels [268]. - The market price of the company's common stock may be subject to substantial fluctuations due to various factors, including economic conditions and regulatory changes [259]. - The company may issue additional common stock or securities in the future, which could dilute existing shareholders' ownership and affect market prices [261]. - The company has provisions in Texas law that may delay or prevent acquisitions or changes in control due to restrictions on business combinations [270]. - The bylaws require that any shareholder claims must be brought in Harris County, Texas, which may increase litigation costs for shareholders not residing nearby [273]. - The company’s common stock is not insured or guaranteed by the FDIC, posing a risk of total investment loss for shareholders [276]. - The return on investment in the company's common stock is uncertain, with potential for substantial loss [275]. - The company has exclusive federal jurisdiction over suits related to the Exchange Act, which may affect the enforcement of its exclusive forum provision [272]. - The bylaws empower the board of directors to issue preferred stock without shareholder approval, potentially impacting shareholder rights [273]. - The company’s bylaws eliminate cumulative voting in director elections, which may limit shareholder influence [273]. - The company is subject to ongoing regulatory requirements for any party seeking to acquire control, which could delay acquisitions [270]. - The company’s bylaws require a 50% shareholder request to call special meetings, potentially limiting shareholder engagement [273].

Group 1 - The banking sector has faced significant challenges due to turbulent economic conditions, including inflation and interest rate hikes, leading to events such as the SVB collapse and a banking crisis in H123 [1] - Borrowing issues and deposit runs peaked during this period, indicating a severe impact on the banking industry [1] Group 2 - The logistics sector has been a focus for investment, with a particular interest in banks, telecommunications, and hotels, reflecting a diversified investment strategy [1] - The analyst has experience in both the ASEAN and US markets, indicating a broad geographical investment approach [1]

Group 1 - The article highlights Third Coast Bancshares (NASDAQ: TCBX) as an attractive investment opportunity within the financial sector [1] - Crude Value Insights focuses on cash flow and companies in the oil and natural gas industry, emphasizing value and growth prospects [1] - The service offers subscribers access to a 50+ stock model account and in-depth cash flow analyses of exploration and production firms [2]

Core Insights - Third Coast Bancshares, Inc. reported a net income of $13.7 million for Q4 2024, an increase from $12.8 million in Q3 2024, resulting in a basic EPS of $0.92 and a diluted EPS of $0.79 [1][6] - The growth in net income was primarily driven by higher net interest income, attributed to loan growth and increased investments in federal funds sold and interest-bearing deposits with correspondent banks [1] - The company experienced a year-over-year increase in its loan portfolio of $327.6 million, indicating strong growth [6] - The efficiency ratio improved to 58.80% from 59.57% in the previous quarter, reflecting the company's focus on operational efficiency [6] - The company is expected to continue prioritizing operational efficiency through its 1% improvement initiative, which is anticipated to support its performance in the current macroeconomic environment [1]