Form 8-K - Current report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 20, 2023

THIRD COAST BANCSHARES, INC.

(Exact name of Registrant as Specified in Its Charter)


Texas	001-41028	46-2135597
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

20202 Highway 59 North Suite 190
Humble, Texas		77338
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: 281 446-7000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $1.00 per share	TCBX	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On July 26, 2023, Third Coast Bancshares, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2023. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing or document.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On July 20, 2023, the Board of Directors (the “Board”) of the Company appointed Mr. David Phelps to serve on the Board, effective immediately. Mr. Phelps will serve as a Class C director with a term expiring at the Company’s 2025 Annual Meeting of Shareholders. Mr. Phelps has served on the Board of Directors of the Company’s wholly-owned subsidiary, Third Coast Bank, SSB, since June 2022.

As a non-employee director, Mr. Phelps will participate in the Company’s non-employee director compensation program described in the Company’s definitive proxy statement on Schedule 14A filed with the U.S. Securities and Exchange Commission on April 20, 2023.

There are no transactions in which the Company is a party and in which Mr. Phelps has a material interest subject to disclosure under Item 404(a) of Regulation S-K. There are no arrangements between Mr. Phelps and any other person pursuant to which he was selected as a director.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


Exhibit Number		Description of Exhibit

99.1		Press Release dated July 26, 2023

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


			Third Coast Bancshares, Inc.

Date:	July 26, 2023	By:	/s/ R. John McWhorter
			R. John McWhorter Chief Financial Officer

Exhibit 99.1

News Release

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

FOR IMMEDIATE RELEASE

THIRD COAST BANCSHARES, INC. REPORTS

SECOND QUARTER 2023 FINANCIAL RESULTS

Book Value grows 2.5% and Tangible Book Value(1) grows 2.7% in second quarter 2023
Total assets reached $3.96 billion

HOUSTON, TX – July 26, 2023 – 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 2023 second quarter financial results.

Financial Highlights

•

Book value per share and tangible book value per share(1) increased to $24.23 and $22.82, respectively, as of June 30, 2023 compared to $23.63 and $22.22, respectively, as of March 31, 2023 and to $22.43 and $21.00, respectively, as of June 30, 2022.

•

Net income for the second quarter of 2023 totaled $8.9 million compared to $9.2 million for the first quarter of 2023 and $2.3 million for the second quarter of 2022.

•

Return on average assets remained strong at 0.96% annualized for the second quarter of 2023 compared to 1.02% annualized for the first quarter of 2023 and 0.29% annualized for the second quarter of 2022.

•

Total assets reached $3.96 billion, an increase of $103.8 million, or 2.7%, over the $3.86 billion reported as of March 31, 2023 and 18.0% over the $3.36 billion reported as of June 30, 2022.

•

Loans held for investment grew $121.0 million to $3.33 billion, or 3.8%, over the $3.21 billion reported as of March 31, 2023 and 21.3% over the $2.75 billion reported as of June 30, 2022.

•

Deposits reached $3.41 billion, an increase of $85.7 million, or 2.6%, over the $3.32 billion reported as of March 31, 2023 and 17.6% over the $2.90 billion reported as of June 30, 2022. Noninterest-bearing deposits represented 15.5% of total deposits compared to 15.6% as of March 31, 2023.

Bart Caraway, Chairman, President, and CEO of Third Coast, announced a 2.5% growth in Book Value and 2.7% growth in Tangible Book Value for the second quarter. Mr. Caraway stated “this is great news for investors and reflects positively on the overall financial health of the Company. Third Coast remains well-capitalized, which allows us to continue our commitment to customer satisfaction while preparing for future market fluctuations.

“Third Coast has seen strong performance, with total assets increasing by $103.8 million, or 2.7%, loans held for investment growing by $121 million, or 3.8%, and deposits increasing by $85.7 million, or 2.6%. I believe that Third Coast is uniquely positioned to weather market turmoil for the remainder of the year, thanks to excellent leadership, strong credit quality, and a focus on maintaining performance,” Mr. Caraway concluded.

____________________________

(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.

Operating Results

Net Income and Earnings Per Share

Net income totaled $8.9 million for the second quarter of 2023, compared to $9.2 million for the first quarter of 2023 and $2.3 million for the second quarter of 2022. Net income available to common shareholders totaled $7.7 million for the second quarter of 2023, compared to $8.1 million for the first quarter of 2023 and $2.3 million for the second quarter of 2022. Dividends on our Series A Convertible Non-Cumulative Preferred Stock totaled $1.2 million for each of the quarters ended June 30, 2023 and March 31, 2023. No shares of our Series A Convertible Non-Cumulative Preferred Stock were outstanding during the quarter ended June 30, 2022. Basic earnings per share and diluted earnings per share were $0.57 per share and $0.53 per share, respectively, in the second quarter of 2023 compared to $0.60 per share and $0.55 per share, respectively, in the first quarter of 2023 and $0.17 per share and $0.16 per share, respectively, in the second quarter of 2022.

Net Interest Margin and Net Interest Income

The net interest margin for the second quarter of 2023 was 3.82% compared to 3.79% for the first quarter of 2023 and 3.77% for the second quarter of 2022. The yield on loans for the second quarter of 2023 was 7.29% compared to 6.90% for the first quarter of 2023 and 4.73% for the second quarter of 2022. The increase in yield on loans during the second quarter of 2023 was primarily due to the increase in the Prime Rate.

Net interest income totaled $34.1 million for the second quarter of 2023, an increase of 3.9% from $32.8 million for the first quarter of 2023 and an increase of 22.9% from $27.7 million for the second quarter of 2022. Interest income totaled $62.7 million for the second quarter of 2023, an increase of 9.3% from $57.4 million for the first quarter of 2023 and an increase of 92.9% from $32.5 million for the second quarter of 2022. Interest and fees on loans increased $5.4 million, or 10.0%, compared to the first quarter of 2023, and increased $28.1 million, or 90.3%, from the second quarter of 2022. Interest expense was $28.6 million for the second quarter of 2023, an increase of $4.1 million, or 16.6% from $24.5 million for the first quarter of 2023 and an increase of $23.8 million, or 499.8%, from $4.8 million for the second quarter of 2022.

Noninterest Income and Noninterest Expense

Noninterest income totaled $2.3 million for the second quarter of 2023, compared to $1.9 million for the first quarter of 2023 and $1.3 million for the second quarter of 2022.

Noninterest expense totaled $23.8 million for the second quarter of 2023, up from $22.0 million for the first quarter of 2023 and up from $22.8 million for the second quarter of 2022. The increase from the first quarter of 2023 was primarily due to increased salary expenses related to additional employees. The year-over-year increase was primarily attributed to increased salary expenses related to additional employees and administrative expenses related to opening new branches and administrative offices. The employee headcount increased from 353 as of June 30, 2022 and 370 as of March 31, 2023 to 377 as of June 30, 2023.

The efficiency ratio was 65.52% for the second quarter of 2023, compared to 63.47% for the first quarter of 2023 and 78.52% for the second quarter of 2022.

Balance Sheet Highlights

Loan Portfolio and Composition

For the quarter ended June 30, 2023, gross loans increased to $3.33 billion, an increase of $121.0 million, or 3.8%, from $3.21 billion as of March 31, 2023, and an increase of $585.1 million, or 21.3%, from $2.75 billion as of June 30, 2022. We believe the loan growth was well diversified with real estate loans up $35.2 million, commercial loans up $52.0 million and other loans up $34.1 million from March 31, 2023.

Asset Quality

Non-performing assets were $10.0 million at June 30, 2023, compared to $9.5 million at March 31, 2023 and $11.0 million at June 30, 2022. The provision for credit loss recorded for the second quarter of 2023 was $1.4 million and related to provisioning for new loans. The allowance for credit losses increased to $37.2 million, or 1.12% of the $3.33 billion in gross loans outstanding as of June 30, 2023.

As of June 30, 2023, the nonperforming loans to loans held for investment ratio remained low at 0.30%, compared to 0.30% as of March 31, 2023 and 0.40% as of June 30, 2022. During the three months ended June 30, 2023 and 2022, the Company recorded net charge-offs of $72,000 and net recoveries of $4,000, respectively.

Deposits and Composition

Deposits totaled $3.41 billion as of June 30, 2023, an increase of 2.6% from $3.32 billion as of March 31, 2023, and an increase of 17.6% from $2.90 billion as of June 30, 2022. Noninterest-bearing demand deposits increased from $516.9 million as of March 31, 2023 to $529.5 million as of June 30, 2023. Noninterest-bearing demand deposits represented 15.5% of total deposits as of June 30, 2023, compared to 15.6% of total deposits as of March 31, 2023. As of June 30, 2023, interest-bearing demand deposits decreased $178.6 million, or 7.1%, time deposits increased $261.5 million, or 109.4%, and savings accounts decreased $9.7 million, or 26.9%, from March 31, 2023.

The average cost of deposits was 3.28% for the second quarter of 2023, representing a 36 basis point increase from the first quarter of 2023 and a 276 basis point increase from the second quarter of 2022 due primarily to time deposit growth and the increase in rates paid on interest-bearing demand deposits.

Earnings Conference Call

Third Coast has scheduled a conference call to discuss 2023 second quarter results, which will be broadcast live over the Internet, on Thursday, July 27, 2023, 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, Inc. 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 August 3, 2023, and may be accessed by dialing 201-612-7415 and using passcode 13735407#. 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 16 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,” “looking ahead,” “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: interest rate risk and fluctuations in interest rates; market conditions and economic trends generally and in the banking industry; our ability to maintain important deposit relationships; our ability to grow or maintain our deposit base; our ability to implement our expansion strategy; credit risk associated with our business; and changes in key management personnel. 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, 2022 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 Common Equity, Tangible Book Value Per Share, Tangible Common Equity to Tangible Assets 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.

Third Coast Bancshares, Inc. and Subsidiary

Financial Highlights

(unaudited)


	2023						2022
(Dollars in thousands)	June 30			March 31			December 31			September 30			June 30

ASSETS
Cash and cash equivalents:
Cash and due from banks	$	244,813		$	309,153		$	329,864		$	216,623		$	317,462
Federal funds sold		23,206			1,789			2,150			1,225			2,741
Total cash and cash equivalents		268,019			310,942			332,014			217,848			320,203

Interest bearing time deposits in other banks		-			-			-			132			132
Investment securities available-for-sale		194,467			180,376			176,067			160,437			157,261
Loans held for investment		3,334,277			3,213,326			3,107,551			2,972,852			2,749,177
Less: allowance for credit losses		(37,243	)		(35,915	)		(30,351	)		(29,109	)		(26,666	)
Loans, net		3,297,034			3,177,411			3,077,200			2,943,743			2,722,511
Accrued interest receivable		19,579			19,026			18,340			16,246			12,568
Premises and equipment, net		28,720			28,504			28,662			25,449			22,888
Bank-owned life insurance		64,762			64,235			60,761			60,263			51,919
Non-marketable securities, at cost		20,687			14,751			14,618			27,136			15,213
Deferred tax asset, net		7,808			7,146			6,303			8,097			7,179
Fair value hedge assets		9,372			8,793			9,213			11,508			6,892
Right-of-use assets - operating leases		21,778			19,328			17,872			18,266			12,648
Core Deposit Intangible, net		1,050			1,090			1,131			1,171			1,211
Goodwill		18,034			18,034			18,034			18,034			18,034
Other assets		12,172			10,021			12,933			8,515			9,403
Total assets	$	3,963,482		$	3,859,657		$	3,773,148		$	3,516,845		$	3,358,062

LIABILITIES
Deposits:
Noninterest bearing	$	529,474		$	516,909		$	486,114		$	517,265		$	519,614
Interest bearing		2,878,807			2,805,624			2,750,032			2,467,049			2,378,650
Total deposits		3,408,281			3,322,533			3,236,146			2,984,314			2,898,264

Accrued interest payable		3,522			1,636			2,545			2,925			1,683
Fair value hedge liabilities		9,177			7,271			9,221			11,514			6,912
Lease liability - operating leases		22,439			19,845			18,209			18,407			12,650
Other liabilities		12,792			10,054			14,024			12,158			7,344
FHLB advances		-			-			-			-			18,000
Line of credit - Senior Debt		30,875			30,875			30,875			30,875			30,875
Note payable - Subordinated Debentures, net		80,451			80,399			80,348			80,298			80,367
Total liabilities		3,567,537			3,472,613			3,391,368			3,140,491			3,056,095

SHAREHOLDERS' EQUITY
Series A Convertible Non-Cumulative Preferred Stock		69			69			69			69			-
Series B Convertible Perpetual Preferred Stock		-			-			-			-			-
Common stock		13,688			13,658			13,610			13,600			13,543
Common stock - non-voting		-			-			-			-			-
Additional paid-in capital		318,769			318,350			318,033			317,798			250,413
Retained earnings		65,889			58,182			53,270			47,163			40,393
Accumulated other comprehensive loss		(1,371	)		(2,116	)		(2,103	)		(1,177	)		(1,283	)
Treasury stock, at cost		(1,099	)		(1,099	)		(1,099	)		(1,099	)		(1,099	)
Total shareholders' equity		395,945			387,044			381,780			376,354			301,967
Total liabilities and shareholders' equity	$	3,963,482		$	3,859,657		$	3,773,148		$	3,516,845		$	3,358,062

Third Coast Bancshares, Inc. and Subsidiary

Financial Highlights

(unaudited)


	Three Months Ended											Six Months Ended
	2023					2022						2023		2022
(Dollars in thousands, except per share data)	June 30		March 31			December 31		September 30		June 30		June 30		June 30

INTEREST INCOME:
Loans, including fees	$	59,295	$	53,911		$	48,081	$	40,498	$	31,164	$	113,206	$	57,846
Investment securities available-for-sale		2,029		1,548			1,388		1,367		894		3,577		1,170
Federal funds sold and other		1,389		1,920			1,682		1,237		451		3,309		677
Total interest income		62,713		57,379			51,151		43,102		32,509		120,092		59,693

INTEREST EXPENSE:
Deposit accounts		24,936		22,092			15,682		9,727		3,443		47,028		5,287
FHLB advances and notes payable		3,681		2,457			3,318		2,020		1,328		6,138		1,458
Total interest expense		28,617		24,549			19,000		11,747		4,771		53,166		6,745

Net interest income		34,096		32,830			32,151		31,355		27,738		66,926		52,948

Provision for credit losses		1,400		1,200			1,950		2,900		3,350		2,600		7,350

Net interest income after credit loss expense		32,696		31,630			30,201		28,455		24,388		64,326		45,598

NONINTEREST INCOME:
Service charges and fees		720		779			706		772		617		1,499		1,236
Gain on sale of SBA loans		-		-			123		729		98		-		98
Gain on sale of securities		-		97			-		-		-		97		-
Earnings on bank-owned life insurance		526		475			497		424		248		1,001		391
Derivative fees		247		(1	)		117		313		123		246		829
Other		787		552			310		300		180		1,339		378
Total noninterest income		2,280		1,902			1,753		2,538		1,266		4,182		2,932

NONINTEREST EXPENSE:
Salaries and employee benefits		15,033		13,712			14,473		14,719		13,994		28,745		27,318
Data processing and network expense		1,261		1,203			837		1,256		932		2,464		1,854
Occupancy and equipment expense		2,852		2,633			2,591		2,232		1,830		5,485		3,703
Legal and professional		1,547		1,930			1,887		1,353		2,001		3,477		3,747
Loan operations and other real estate owned		302		(35	)		144		284		282		267		560
Advertising and marketing		812		686			580		438		467		1,498		894
Telephone and communications		129		139			175		122		99		268		199
Software purchases and maintenance		455		352			295		318		201		807		399
Regulatory assessments		458		666			863		1,000		956		1,124		1,601
Loss on sale of other real estate owned		-		-			-		-		350		-		350
Other		986		758			782		1,006		1,661		1,744		2,329
Total noninterest expense		23,835		22,044			22,627		22,728		22,773		45,879		42,954

NET INCOME BEFORE INCOME TAX EXPENSE		11,141		11,488			9,327		8,265		2,881		22,629		5,576

Income tax expense		2,250		2,245			1,802		1,495		604		4,495		1,212

NET INCOME		8,891		9,243			7,525		6,770		2,277		18,134		4,364

Preferred stock dividends declared		1,184		1,171			1,418		-		-		2,355		-

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	7,707	$	8,072		$	6,107	$	6,770	$	2,277	$	15,779	$	4,364

EARNINGS PER COMMON SHARE:
Basic earnings per share	$	0.57	$	0.60		$	0.45	$	0.50	$	0.17	$	1.16	$	0.33
Diluted earnings per share	$	0.53	$	0.55		$	0.44	$	0.49	$	0.16	$	1.08	$	0.32

Third Coast Bancshares, Inc. and Subsidiary

Financial Highlights

(unaudited)


	Three Months Ended															Six Months Ended
	2023						2022									2023			2022
(Dollars in thousands, except share and per share data)	June 30			March 31			December 31			September 30			June 30			June 30			June 30

Earnings per share, basic	$	0.57		$	0.60		$	0.45		$	0.50		$	0.17		$	1.16		$	0.33
Earnings per share, diluted	$	0.53		$	0.55		$	0.44		$	0.49		$	0.16		$	1.08		$	0.32
Dividends on common stock	$	-		$	-		$	-		$	-		$	-		$	-		$	-
Dividends on Series A Convertible Non-Cumulative Preferred Stock	$	17.06		$	16.88		$	20.44		$	-		$	-		$	33.94		$	-

Return on average assets (A)		0.96	%		1.02	%		0.84	%		0.78	%		0.29	%		0.99	%		0.31	%
Return on average common equity (A)		9.44	%		10.28	%		7.69	%		8.74	%		3.01	%		9.85	%		2.91	%
Return on average tangible common equity (A) (B)		10.02	%		10.93	%		8.19	%		9.32	%		3.22	%		10.47	%		3.11	%
Net interest margin (A) (C)		3.82	%		3.79	%		3.75	%		3.77	%		3.77	%		3.80	%		3.90	%
Efficiency ratio (D)		65.52	%		63.47	%		66.74	%		67.06	%		78.52	%		64.52	%		76.87	%

Capital Ratios
Third Coast Bancshares, Inc. (consolidated):
Total common equity to total assets		8.32	%		8.31	%		8.36	%		8.82	%		8.99	%		8.32	%		8.99	%
Tangible common equity to tangible assets (B)		7.88	%		7.86	%		7.90	%		8.32	%		8.47	%		7.88	%		8.47	%
Common equity tier 1 (to risk weighted assets)		7.75	%		7.89	%	N/A			N/A			N/A				7.75	%	N/A
Tier 1 capital (to risk weighted assets)		9.39	%		9.61	%	N/A			N/A			N/A				9.39	%	N/A
Total capital (to risk weighted assets)		12.31	%		12.63	%	N/A			N/A			N/A				12.31	%	N/A
Tier 1 capital (to average assets)		10.17	%		10.14	%	N/A			N/A			N/A				10.17	%	N/A

Third Coast Bank, SSB:
Common equity tier 1 (to risk weighted assets)		12.06	%		12.32	%		12.95	%		13.04	%		11.60	%		12.06	%		11.60	%
Tier 1 capital (to risk weighted assets)		12.06	%		12.32	%		12.95	%		13.04	%		11.60	%		12.06	%		11.60	%
Total capital (to risk weighted assets)		12.99	%		13.25	%		13.79	%		13.87	%		12.40	%		12.99	%		12.40	%
Tier 1 capital (to average assets)		13.06	%		13.00	%		13.11	%		13.29	%		12.47	%		13.06	%		12.47	%

Other Data
Weighted average shares:
Basic		13,588,747			13,532,545			13,528,504			13,490,680			13,454,423			13,560,802			13,420,065
Diluted		16,855,822			16,801,815			13,760,076			13,678,962			13,822,522			16,828,974			13,788,965
Period end shares outstanding		13,609,697			13,579,498			13,531,736			13,521,826			13,464,093			13,609,697			13,464,093
Book value per share	$	24.23		$	23.63		$	23.32		$	22.93		$	22.43		$	24.23		$	22.43
Tangible book value per share (B)	$	22.82		$	22.22		$	21.90		$	21.51		$	21.00		$	22.82		$	21.00

___________

(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 11 and 12 of this News Release.

(D) Represents total noninterest expense divided by the sum of net interest income plus noninterest income. Taxes and provision for credit losses are not part of this calculation.

Third Coast Bancshares, Inc. and Subsidiary

Financial Highlights

(unaudited)


	Three Months Ended
	June 30, 2023						March 31, 2023						June 30, 2022
(Dollars in thousands)	Average Outstanding Balance			Interest Earned/ Paid(3)		Average Yield/ Rate(4)	Average Outstanding Balance			Interest Earned/ Paid(3)		Average Yield/ Rate(4)	Average Outstanding Balance			Interest Earned/ Paid(3)		Average Yield/ Rate(4)

Assets
Interest-earnings assets:
Investment securities	$	208,980		$	2,029	3.89%	$	178,197		$	1,548	3.52%	$	112,793		$	894	3.18%
Loans, gross		3,262,804			59,295	7.29%		3,170,828			53,911	6.90%		2,641,330			31,164	4.73%
Federal funds sold and other interest-earning assets		112,239			1,389	4.96%		167,694			1,920	4.64%		200,801			451	0.90%
Total interest-earning assets		3,584,023			62,713	7.02%		3,516,719			57,379	6.62%		2,954,924			32,509	4.41%
Less allowance for loan losses		(36,381	)					(34,879	)					(24,818	)
Total interest-earning assets, net of allowance		3,547,642						3,481,840						2,930,106
Noninterest-earning assets		185,705						182,869						201,734
Total assets	$	3,733,347					$	3,664,709					$	3,131,840

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing deposits	$	2,581,560		$	24,936	3.87%	$	2,595,750		$	22,092	3.45%	$	2,222,677		$	3,443	0.62%
Notes payable		111,301			1,858	6.70%		111,250			1,814	6.61%		83,390			1,208	5.81%
FHLB advances		135,826			1,823	5.38%		52,803			643	4.94%		46,319			120	1.04%
Total interest-bearing liabilities		2,828,687			28,617	4.06%		2,759,803			24,549	3.61%		2,352,386			4,771	0.81%
Noninterest-bearing deposits		470,564						477,706						453,936
Other liabilities		40,323						42,406						22,383
Total liabilities		3,339,574						3,279,915						2,828,705
Shareholders’ equity		393,773						384,794						303,135
Total liabilities and shareholders’ equity	$	3,733,347					$	3,664,709					$	3,131,840
Net interest income				$	34,096					$	32,830					$	27,738
Net interest spread (1)						2.96%						3.01%						3.60%
Net interest margin (2)						3.82%						3.79%						3.77%

___________

(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.

(4) Annualized.

Third Coast Bancshares, Inc. and Subsidiary

Financial Highlights

(unaudited)


	Six Months Ended
	June 30, 2023						June 30, 2022
(Dollars in thousands)	Average Outstanding Balance			Interest Earned/ Paid(3)		Average Yield/ Rate(4)	Average Outstanding Balance			Interest Earned/ Paid(3)		Average Yield/ Rate(4)

Assets
Interest-earnings assets:
Investment securities	$	193,674		$	3,577	3.72%	$	82,668		$	1,170	2.85%
Loans, gross		3,217,070			113,206	7.10%		2,426,092			57,846	4.81%
Federal funds sold and other interest-earning assets		139,813			3,309	4.77%		227,388			677	0.60%
Total interest-earning assets		3,550,557			120,092	6.82%		2,736,148			59,693	4.40%
Less allowance for loan losses		(35,634	)					(22,619	)
Total interest-earning assets, net of allowance		3,514,923						2,713,529
Noninterest-earning assets		184,294						167,476
Total assets	$	3,699,217					$	2,881,005

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing deposits	$	2,588,616		$	47,028	3.66%	$	1,933,083		$	5,287	0.55%
Notes payable		111,275			3,672	6.65%		42,866			1,231	5.79%
FHLB advances		94,544			2,466	5.26%		48,149			227	0.95%
Total interest-bearing liabilities		2,794,435			53,166	3.84%		2,024,098			6,745	0.67%
Noninterest-bearing deposits		474,115						536,958
Other liabilities		41,359						17,609
Total liabilities		3,309,909						2,578,665
Shareholders’ equity		389,308						302,340
Total liabilities and shareholders’ equity	$	3,699,217					$	2,881,005
Net interest income				$	66,926					$	52,948
Net interest spread (1)						2.98%						3.73%
Net interest margin (2)						3.80%						3.90%

___________

(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.

(4) Annualized.

Third Coast Bancshares, Inc. and Subsidiary

Financial Highlights

(unaudited)


	Three Months Ended
	2023						2022
(Dollars in thousands)	June 30			March 31			December 31			September 30			June 30

Period-end Loan Portfolio:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied	$	513,934		$	508,936		$	493,791		$	529,046		$	508,864
Non-farm non-residential non-owner occupied		547,120			511,546			506,012			490,503			464,530
Residential		310,842			286,358			308,775			283,432			273,415
Construction, development & other		595,601			627,143			567,851			500,879			440,925
Farmland		24,219			22,512			22,820			22,770			23,895
Commercial & industrial		1,164,624			1,112,638			1,058,910			1,029,231			914,845
Consumer		2,891			3,280			3,872			3,728			3,706
Municipal and other		175,046			140,913			145,520			113,263			118,997
Total loans	$	3,334,277		$	3,213,326		$	3,107,551		$	2,972,852		$	2,749,177

Asset Quality:
Nonaccrual loans	$	9,968		$	9,482		$	10,963		$	9,439		$	9,806
Loans > 90 days and still accruing		-			-			518			98			387
Restructured loans--accruing		-			-			780			781			785
Total nonperforming loans		9,968			9,482			12,261			10,318			10,978
Other real estate owned		-			-			-			-			-
Total nonperforming assets	$	9,968		$	9,482		$	12,261		$	10,318		$	10,978

QTD Net charge-offs (recoveries)	$	72		$	(364	)	$	708		$	457		$	(4	)

Nonaccrual loans:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied	$	832		$	855		$	1,699		$	921		$	964
Non-farm non-residential non-owner occupied		1,417			282			296			309			323
Residential		494			506			513			111			116
Construction, development & other		36			39			45			232			238
Commercial & industrial		7,189			7,800			8,390			7,846			8,165
Consumer		-			-			20			20			-
Total nonaccrual loans	$	9,968		$	9,482		$	10,963		$	9,439		$	9,806

Asset Quality Ratios:
Nonperforming assets to total assets		0.25	%		0.25	%		0.32	%		0.29	%		0.33	%
Nonperforming loans to total loans		0.30	%		0.30	%		0.39	%		0.35	%		0.40	%
Allowance for credit losses to total loans		1.12	%		1.12	%		0.98	%		0.98	%		0.97	%
QTD Net charge-offs (recoveries) to average loans (annualized)		0.01	%		(0.05	%)		0.09	%		0.06	%		0.00	%

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 Common Equity, Tangible Book Value Per Share, Tangible Common Equity to Tangible Assets, 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.

Management believes the following non-GAAP financial measures assist investors in understanding the financial condition of the company:

•

Tangible Common Equity. The most directly comparable GAAP financial measure for tangible common equity is total shareholders’ equity. We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period of tangible common equity.

•

Tangible Book Value Per Share. The most directly comparable GAAP financial measure for tangible book value per share is book value per share. We believe that the tangible book value per share measure is important to many investors in the marketplace who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.

•

Tangible Common Equity to Tangible Assets. The most directly comparable GAAP financial measure for tangible common equity is total shareholders’ equity, the most directly comparable GAAP financial measure for tangible assets is total assets, and the most directly comparable GAAP financial measure for tangible common equity to tangible assets is total shareholders’ equity to total assets. We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period of tangible common equity to tangible assets, each exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing both total shareholders’ equity and assets while not increasing our tangible common equity or tangible assets.

•

Return on Average Tangible Common Equity. The most directly comparable GAAP financial measure for average tangible common equity is average shareholders' equity, and the most directly comparable GAAP financial measure for return on average tangible common equity is return on average common

equity. We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period of return on average tangible common equity, exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing average shareholders’ equity while not increasing our tangible common equity.

The calculations of these non-GAAP financial measures are as follows:


	Three Months Ended															Six Months Ended
	2023						2022									2023			2022
(Dollars in thousands, except share and per share data)	June 30			March 31			December 31			September 30			June 30			June 30			June 30

Tangible Common Equity:
Total shareholders' equity	$	395,945		$	387,044		$	381,780		$	376,354		$	301,967		$	395,945		$	301,967
Less: Preferred stock including additional paid in capital		66,225			66,225			66,225			66,273			-			66,225			-
Total common equity		329,720			320,819			315,555			310,081			301,967			329,720			301,967
Less: Goodwill and core deposit intangibles, net		19,084			19,124			19,165			19,205			19,245			19,084			19,245
Tangible common equity	$	310,636		$	301,695		$	296,390		$	290,876		$	282,722		$	310,636		$	282,722

Common shares outstanding at end of period		13,609,697			13,579,498			13,531,736			13,521,826			13,464,093			13,609,697			13,464,093

Book Value Per Share	$	24.23		$	23.63		$	23.32		$	22.93		$	22.43		$	24.23		$	22.43
Tangible Book Value Per Share	$	22.82		$	22.22		$	21.90		$	21.51		$	21.00		$	22.82		$	21.00


Tangible Assets:
Total assets	$	3,963,482		$	3,859,657		$	3,773,148		$	3,516,845		$	3,358,062		$	3,963,482		$	3,358,062
Adjustments: Goodwill and core deposit intangibles, net		19,084			19,124			19,165			19,205			19,245			19,084			19,245
Tangible assets	$	3,944,398		$	3,840,533		$	3,753,983		$	3,497,640		$	3,338,817		$	3,944,398		$	3,338,817

Total Common Equity to Total Assets		8.32	%		8.31	%		8.36	%		8.82	%		8.99	%		8.32	%		8.99	%
Tangible Common Equity to Tangible Assets		7.88	%		7.86	%		7.90	%		8.32	%		8.47	%		7.88	%		8.47	%


Average Tangible Common Equity:
Average shareholders' equity	$	393,773		$	384,794		$	381,271		$	308,092		$	303,135		$	389,308		$	302,340
Less: Average preferred stock including additional paid in capital		66,225			66,225			66,329			720			-			66,225			-
Average common equity		327,548			318,569			314,942			307,372			303,135			323,083			302,340
Less: Average goodwill and core deposit intangibles, net		19,108			19,149			19,184			19,225			19,265			19,128			19,286
Average tangible common equity	$	308,440		$	299,420		$	295,758		$	288,147		$	283,870		$	303,955		$	283,054

Net Income	$	8,891		$	9,243		$	7,525		$	6,770		$	2,277		$	18,134		$	4,364
Less: Dividends declared on preferred stock		1,184			1,171			1,418			-			-			2,355			-
Net Income Available to Common Shareholders	$	7,707		$	8,072		$	6,107		$	6,770		$	2,277		$	15,779		$	4,364

Return on Average Common Equity(A)		9.44	%		10.28	%		7.69	%		8.74	%		3.01	%		9.85	%		2.91	%
Return on Average Tangible Common Equity(A)		10.02	%		10.93	%		8.19	%		9.32	%		3.22	%		10.47	%		3.11	%

___________

(A) Interim periods annualized.

Document And Entity Information	Jul. 20, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 20, 2023
Entity Registrant Name	THIRD COAST BANCSHARES, INC.
Entity Central Index Key	0001781730
Entity Emerging Growth Company	true
Securities Act File Number	001-41028
Entity Incorporation, State or Country Code	TX
Entity Tax Identification Number	46-2135597
Entity Address, Address Line One	20202 Highway 59 North
Entity Address, Address Line Two	Suite 190
Entity Address, City or Town	Humble
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77338
City Area Code	281
Local Phone Number	446-7000
Entity Information, Former Legal or Registered Name	Not Applicable
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Ex Transition Period	false
Title of 12(b) Security	Common stock, par value $1.00 per share
Trading Symbol	TCBX
Security Exchange Name	NASDAQ