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): October 25, 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 October 25, 2023, Third Coast Bancshares, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 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 9.01 Financial Statements and Exhibits.

(d) Exhibits.


Exhibit Number		Description of Exhibit

99.1		Press Release dated October 25, 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:	October 25, 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

THIRD QUARTER 2023 FINANCIAL RESULTS

Total loans grow $225.7 million to $3.56 billion

Book Value grows 1.4% and Tangible Book Value(1) grows 1.5%

HOUSTON, TX – October 25, 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 third quarter financial results.

Third Quarter Financial and Operational Highlights

•

Total assets reached $4.22 billion, an increase of $252.3 million, or 6.4%, over the $3.96 billion reported as of June 30, 2023, and 19.9% over the $3.52 billion reported as of September 30, 2022.

•

Loans held for investment grew $225.7 million to $3.56 billion, or 6.8%, over the $3.33 billion reported as of June 30, 2023, and 19.7% over the $2.97 billion reported as of September 30, 2022.

•

Deposits reached $3.65 billion, an increase of $238.5 million, or 7.0%, over the $3.41 billion reported as of June 30, 2023, and 22.2% over the $2.98 billion reported as of September 30, 2022.

•

Book value per share and tangible book value per share(1) increased to $24.57 and $23.17, respectively, as of September 30, 2023, compared to $24.23 and $22.82, respectively, as of June 30, 2023 and to $22.93 and $21.51, respectively, as of September 30, 2022.

•

Implemented a cost reduction plan to proactively align with current market demands.

Bart Caraway, Chairman, President, and CEO of Third Coast, stated, “Third quarter growth was impressive with sequential and year over year increases in total assets, loans, and deposits. Book value per share growth continued at 1.4% and tangible book value per share growth continued at 1.5%, demonstrating a positive sign to investors and the overall financial health of the Company.

“To better align with current market conditions, we recently took some deliberate actions to reduce our operating expenses and other overhead costs. This included the previously announced winding down of our auto-finance division and a 5% reduction in workforce. Combined, this should allow us to immediately re-position Third Coast for continued growth over the next several quarters.

____________________________

(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.

“Looking ahead, we expect to maintain our strong asset quality metrics, and we continue to be laser focused on credit quality across all lending verticals. Our ability to remain well capitalized despite market fluctuations is a testament to our dedication to our customers and shareholders. We believe our above-average industry performance and strong asset portfolio position us to perform in any economic environment, invest in strategic initiatives, and drive shareholder returns over the long term,” Caraway concluded.

Operating Results

Net Income and Earnings Per Share

Net income totaled $5.6 million for the third quarter of 2023, compared to $8.9 million for the second quarter of 2023 and $6.8 million for the third quarter of 2022. Net income available to common shareholders totaled $4.4 million for the third quarter of 2023, compared to $7.7 million for the second quarter of 2023 and $6.8 million for the third quarter of 2022. The quarter-over-quarter decrease was primarily due to higher provision for credit losses of $1.2 million, higher salary expense which included $460,000 in severance costs, and $400,000 in fraud losses. Dividends on our Series A Convertible Non-Cumulative Preferred Stock totaled $1.2 million for each of the quarters ended September 30, 2023 and June 30, 2023. Basic earnings per share and diluted earnings per share were each $0.32 per share in the third quarter of 2023 compared to $0.57 per share and $0.53 per share, respectively, in the second quarter of 2023 and $0.50 per share and $0.49 per share, respectively, in the third quarter of 2022.

Net Interest Margin and Net Interest Income

The net interest margin for the third quarter of 2023 was 3.71% compared to 3.82% for the second quarter of 2023 and 3.77% for the third quarter of 2022. The yield on loans for the third quarter of 2023 was 7.57% compared to 7.29% for the second quarter of 2023 and 5.59% for the third quarter of 2022. The increase in yield on loans during the third quarter of 2023 was primarily due to the increase in the Prime Rate.

Net interest income totaled $35.3 million for the third quarter of 2023, an increase of 3.4% from $34.1 million for the second quarter of 2023 and an increase of 12.5% from $31.4 million for the third quarter of 2022. Interest income totaled $69.4 million for the third quarter of 2023, an increase of 10.6% from $62.7 million for the second quarter of 2023 and an increase of 61.0 % from $43.1 million for the third quarter of 2022. Interest and fees on loans increased $6.1 million, or 10.3%, compared to the second quarter of 2023, and increased $24.9 million, or 61.4%, from the third quarter of 2022. Interest expense was $34.1 million for the third quarter of 2023, an increase of $5.5 million, or 19.2%, from $28.6 million for the second quarter of 2023 and an increase of $22.4 million, or 190.4%, from $11.7 million for the third quarter of 2022.

Noninterest Income and Noninterest Expense

Noninterest income totaled $1.9 million for the third quarter of 2023, compared to $2.3 million for the second quarter of 2023 and $2.5 million for the third quarter of 2022. The decrease in noninterest income from the second quarter of 2023 was primarily due to the decrease in Small Business Investment Company income.

Noninterest expense totaled $27.5 million for the third quarter of 2023, up from $23.8 million for the second quarter of 2023 and up from $22.7 million for the third quarter of 2022. The year-over-year increase was primarily attributed to increased salary expenses related to additional employees during the nine months ended September 30, 2023, and administrative expenses related to opening new branches and administrative offices.

The efficiency ratio was 74.07% for the third quarter of 2023, compared to 65.52% for the second quarter of 2023 and 67.06% for the third quarter of 2022.

Balance Sheet Highlights

Loan Portfolio and Composition

For the quarter ended September 30, 2023, gross loans increased to $3.56 billion, an increase of $225.7 million, or 6.8%, from $3.33 billion as of June 30, 2023, and an increase of $587.1 million, or 19.7%, from $2.97 billion as of September 30, 2022. We believe the loan growth was well diversified with real estate loans up $106.0 million and commercial loans up $123.7 million from June 30, 2023.

Asset Quality

Non-performing loans were $16.4 million at September 30, 2023, compared to $10.0 million at June 30, 2023, and $10.3 million at September 30, 2022. The increase in non-performing loans was primarily due to the placement of a $2.3 million loan on nonaccrual and a $2.0 million loan that is over 90 days matured and still accruing. Both of these loans are well secured, and no losses are anticipated. In October 2023, the $2.0 million loan was renewed and is current. The remaining loans placed on nonaccrual this quarter consist of two relationships totaling $2.0 million, and minimal losses are expected as these loans are worked out. The remaining loans that are over 90 days past due at quarter end are well secured and in the process of renewal.

The provision for credit loss recorded for the third quarter of 2023 was $2.6 million and related to provisioning for new loans and commitments. The allowance for credit losses increased to $38.1 million, or 1.07% of the $3.56 billion in gross loans outstanding as of September 30, 2023.

As of September 30, 2023, the nonperforming loans to loans held for investment ratio was 0.46%, compared to 0.30% as of June 30, 2023, and 0.35% as of September 30, 2022. During the three months ended September 30, 2023, and 2022, the Company recorded net charge-offs of $24,000 and $457,000, respectively.

Deposits and Composition

Deposits totaled $3.65 billion as of September 30, 2023, an increase of 7.0% from $3.41 billion as of June 30, 2023, and an increase of 22.2% from $2.98 billion as of September 30, 2022. Noninterest-bearing demand deposits decreased from $529.5 million as of June 30, 2023, to $500.2 million as of September 30, 2023. Noninterest-bearing demand deposits represented 13.7% of total deposits as of September 30, 2023, compared to 15.5% of total deposits as of June 30, 2023. As of September 30, 2023, interest-bearing demand deposits increased $165.8 million, or 7.1%, time deposits increased $102.8 million, or 20.5%, and savings accounts decreased $822,000, or 3.1%, from June 30, 2023.

The average cost of deposits was 3.73% for the third quarter of 2023, representing a 45-basis point increase from the second quarter of 2023 and a 242-basis point increase from the third quarter of 2022 due primarily to time deposit growth, interest-bearing demand 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 third quarter results, which will be broadcast live over the Internet, on Thursday, October 26, 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 November 3, 2023, and may be accessed by dialing 201-612-7415 and using passcode 13735410#. 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)	September 30			June 30			March 31			December 31			September 30

ASSETS
Cash and cash equivalents:
Cash and due from banks	$	142,122		$	244,813		$	309,153		$	329,864		$	216,623
Federal funds sold		144,408			23,206			1,789			2,150			1,225
Total cash and cash equivalents		286,530			268,019			310,942			332,014			217,848

Interest bearing time deposits in other banks		-			-			-			-			132
Investment securities available-for-sale		201,035			194,467			180,376			176,067			160,437
Loans held for investment		3,559,953			3,334,277			3,213,326			3,107,551			2,972,852
Less: allowance for credit losses		(38,067	)		(37,243	)		(35,915	)		(30,351	)		(29,109	)
Loans, net		3,521,886			3,297,034			3,177,411			3,077,200			2,943,743
Accrued interest receivable		22,821			19,579			19,026			18,340			16,246
Premises and equipment, net		29,010			28,720			28,504			28,662			25,449
Bank-owned life insurance		65,303			64,762			64,235			60,761			60,263
Non-marketable securities, at cost		15,799			20,687			14,751			14,618			27,136
Deferred tax asset, net		8,335			7,808			7,146			6,303			8,097
Fair value hedge assets		10,889			9,372			8,793			9,213			11,508
Right-of-use assets - operating leases		21,192			21,778			19,328			17,872			18,266
Core Deposit Intangible, net		1,009			1,050			1,090			1,131			1,171
Goodwill		18,034			18,034			18,034			18,034			18,034
Other assets		13,949			12,172			10,021			12,933			8,515
Total assets	$	4,215,792		$	3,963,482		$	3,859,657		$	3,773,148		$	3,516,845

LIABILITIES
Deposits:
Noninterest bearing	$	500,187		$	529,474		$	516,909		$	486,114		$	517,265
Interest bearing		3,146,635			2,878,807			2,805,624			2,750,032			2,467,049
Total deposits		3,646,822			3,408,281			3,322,533			3,236,146			2,984,314

Accrued interest payable		4,318			3,522			1,636			2,545			2,925
Fair value hedge liabilities		10,519			9,177			7,271			9,221			11,514
Lease liability - operating leases		21,958			22,439			19,845			18,209			18,407
Other liabilities		15,467			12,792			10,054			14,024			12,158
Line of credit - Senior Debt		35,875			30,875			30,875			30,875			30,875
Note payable - Subordinated Debentures, net		80,502			80,451			80,399			80,348			80,298
Total liabilities		3,815,461			3,567,537			3,472,613			3,391,368			3,140,491

SHAREHOLDERS' EQUITY
Series A Convertible Non-Cumulative Preferred Stock		69			69			69			69			69
Series B Convertible Perpetual Preferred Stock		-			-			-			-			-
Common stock		13,679			13,688			13,658			13,610			13,600
Common stock - non-voting		-			-			-			-			-
Additional paid-in capital		319,134			318,769			318,350			318,033			317,798
Retained earnings		70,283			65,889			58,182			53,270			47,163
Accumulated other comprehensive loss		(1,735	)		(1,371	)		(2,116	)		(2,103	)		(1,177	)
Treasury stock, at cost		(1,099	)		(1,099	)		(1,099	)		(1,099	)		(1,099	)
Total shareholders' equity		400,331			395,945			387,044			381,780			376,354
Total liabilities and shareholders' equity	$	4,215,792		$	3,963,482		$	3,859,657		$	3,773,148		$	3,516,845

Third Coast Bancshares, Inc. and Subsidiary

Financial Highlights

(unaudited)


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

INTEREST INCOME:
Loans, including fees	$	65,380		$	59,295	$	53,911		$	48,081	$	40,498	$	178,586	$	98,344
Investment securities available-for-sale		1,990			2,029		1,548			1,388		1,367		5,567		2,537
Federal funds sold and other		2,015			1,389		1,920			1,682		1,237		5,324		1,914
Total interest income		69,385			62,713		57,379			51,151		43,102		189,477		102,795

INTEREST EXPENSE:
Deposit accounts		30,345			24,936		22,092			15,682		9,727		77,373		15,014
FHLB advances and other borrowings		3,772			3,681		2,457			3,318		2,020		9,910		3,478
Total interest expense		34,117			28,617		24,549			19,000		11,747		87,283		18,492

Net interest income		35,268			34,096		32,830			32,151		31,355		102,194		84,303

Provision for credit losses		2,620			1,400		1,200			1,950		2,900		5,220		10,250

Net interest income after credit loss expense		32,648			32,696		31,630			30,201		28,455		96,974		74,053

NONINTEREST INCOME:
Service charges and fees		884			720		779			706		772		2,383		2,008
Gain on sale of SBA loans		114			-		-			123		729		114		827
Gain on sale of securities		364			-		97			-		-		461		-
Earnings on bank-owned life insurance		541			526		475			497		424		1,542		815
Derivative fees		159			247		(1	)		117		313		405		1,142
Other		(196	)		787		552			310		300		1,143		678
Total noninterest income		1,866			2,280		1,902			1,753		2,538		6,048		5,470

NONINTEREST EXPENSE:
Salaries and employee benefits		17,353			15,033		13,712			14,473		14,719		46,098		42,037
Data processing and network expense		1,284			1,261		1,203			837		1,256		3,748		3,110
Occupancy and equipment expense		2,925			2,852		2,633			2,591		2,232		8,410		5,935
Legal and professional		2,001			1,547		1,930			1,887		1,353		5,478		5,100
Loan operations and other real estate owned		272			302		(35	)		144		284		539		844
Advertising and marketing		515			812		686			580		438		2,013		1,332
Telephone and communications		117			129		139			175		122		385		321
Software purchases and maintenance		729			455		352			295		318		1,536		717
Regulatory assessments		532			458		666			863		1,000		1,656		2,601
Loss on sale of other real estate owned		-			-		-			-		-		-		350
Other		1,777			986		758			782		1,006		3,521		3,335
Total noninterest expense		27,505			23,835		22,044			22,627		22,728		73,384		65,682

NET INCOME BEFORE INCOME TAX EXPENSE		7,009			11,141		11,488			9,327		8,265		29,638		13,841

Income tax expense		1,431			2,250		2,245			1,802		1,495		5,926		2,707

NET INCOME		5,578			8,891		9,243			7,525		6,770		23,712		11,134

Preferred stock dividends declared		1,184			1,184		1,171			1,418		-		3,539		-

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	4,394		$	7,707	$	8,072		$	6,107	$	6,770	$	20,173	$	11,134

EARNINGS PER COMMON SHARE:
Basic earnings per share	$	0.32		$	0.57	$	0.60		$	0.45	$	0.50	$	1.49	$	0.83
Diluted earnings per share	$	0.32		$	0.53	$	0.55		$	0.44	$	0.49	$	1.41	$	0.81

Third Coast Bancshares, Inc. and Subsidiary

Financial Highlights

(unaudited)


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

Earnings per share, basic	$	0.32		$	0.57		$	0.60		$	0.45		$	0.50		$	1.49		$	0.83
Earnings per share, diluted	$	0.32		$	0.53		$	0.55		$	0.44		$	0.49		$	1.41		$	0.81
Dividends on common stock	$	-		$	-		$	-		$	-		$	-		$	-		$	-
Dividends on Series A Convertible Non-Cumulative Preferred Stock	$	17.06		$	17.06		$	16.88		$	20.44		$	-		$	51.00		$	-

Return on average assets (A)		0.56	%		0.96	%		1.02	%		0.84	%		0.78	%		0.84	%		0.48	%
Return on average common equity (A)		5.19	%		9.44	%		10.28	%		7.69	%		8.74	%		8.24	%		4.90	%
Return on average tangible common equity (A) (B)		5.50	%		10.02	%		10.93	%		8.19	%		9.32	%		8.75	%		5.23	%
Net interest margin (A) (C)		3.71	%		3.82	%		3.79	%		3.75	%		3.77	%		3.77	%		3.85	%
Efficiency ratio (D)		74.07	%		65.52	%		63.47	%		66.74	%		67.06	%		67.80	%		73.16	%

Capital Ratios
Third Coast Bancshares, Inc. (consolidated):
Total common equity to total assets		7.93	%		8.32	%		8.31	%		8.36	%		8.82	%		7.93	%		8.82	%
Tangible common equity to tangible assets (B)		7.51	%		7.88	%		7.86	%		7.90	%		8.32	%		7.51	%		8.32	%
Common equity tier 1 (to risk weighted assets)		8.01	%		7.75	%		7.89	%	N/A			N/A				8.01	%	N/A
Tier 1 capital (to risk weighted assets)		9.68	%		9.39	%		9.61	%	N/A			N/A				9.68	%	N/A
Total capital (to risk weighted assets)		12.72	%		12.31	%		12.63	%	N/A			N/A				12.72	%	N/A
Tier 1 capital (to average assets)		9.79	%		10.17	%		10.14	%	N/A			N/A				9.79	%	N/A

Third Coast Bank, SSB:
Common equity tier 1 (to risk weighted assets)		12.48	%		12.06	%		12.32	%		12.95	%		13.04	%		12.48	%		13.04	%
Tier 1 capital (to risk weighted assets)		12.48	%		12.06	%		12.32	%		12.95	%		13.04	%		12.48	%		13.04	%
Total capital (to risk weighted assets)		13.49	%		12.99	%		13.25	%		13.79	%		13.87	%		13.49	%		13.87	%
Tier 1 capital (to average assets)		12.62	%		13.06	%		13.00	%		13.11	%		13.29	%		12.62	%		13.29	%

Other Data
Weighted average shares:
Basic		13,608,718			13,588,747			13,532,545			13,528,504			13,490,680			13,576,949			13,443,862
Diluted		13,873,187			16,855,822			16,801,815			13,760,076			13,678,962			16,872,035			13,752,556
Period end shares outstanding		13,600,211			13,609,697			13,579,498			13,531,736			13,521,826			13,600,211			13,521,826
Book value per share	$	24.57		$	24.23		$	23.63		$	23.32		$	22.93		$	24.57		$	22.93
Tangible book value per share (B)	$	23.17		$	22.82		$	22.22		$	21.90		$	21.51		$	23.17		$	21.51

___________

(A) Interim periods annualized.

(B) Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on pages 12 and 13 of this News Release.

(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
	September 30, 2023						June 30, 2023						September 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	$	198,305		$	1,990	3.98%	$	208,980		$	2,029	3.89%	$	180,701		$	1,367	3.00%
Loans, gross		3,424,738			65,380	7.57%		3,262,804			59,295	7.29%		2,874,857			40,498	5.59%
Federal funds sold and other interest-earning assets		146,965			2,015	5.44%		112,239			1,389	4.96%		243,471			1,237	2.02%
Total interest-earning assets		3,770,008			69,385	7.30%		3,584,023			62,713	7.02%		3,299,029			43,102	5.18%
Less allowance for loan losses		(37,421	)					(36,381	)					(27,504	)
Total interest-earning assets, net of allowance		3,732,587						3,547,642						3,271,525
Noninterest-earning assets		190,670						185,705						184,514
Total assets	$	3,923,257					$	3,733,347					$	3,456,039

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing deposits	$	2,756,305		$	30,345	4.37%	$	2,581,560		$	24,936	3.87%	$	2,446,443		$	9,727	1.58%
Note payable and line of credit		112,765			1,919	6.75%		111,301			1,858	6.70%		111,213			1,617	5.77%
FHLB advances		129,585			1,853	5.67%		135,826			1,823	5.38%		60,176			403	2.66%
Total interest-bearing liabilities		2,998,655			34,117	4.51%		2,828,687			28,617	4.06%		2,617,832			11,747	1.78%
Noninterest-bearing deposits		473,282						470,564						498,408
Other liabilities		49,271						40,323						31,707
Total liabilities		3,521,208						3,339,574						3,147,947
Shareholders’ equity		402,049						393,773						308,092
Total liabilities and shareholders’ equity	$	3,923,257					$	3,733,347					$	3,456,039
Net interest income				$	35,268					$	34,096					$	31,355
Net interest spread (1)						2.79%						2.96%						3.40%
Net interest margin (2)						3.71%						3.82%						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)


	Nine Months Ended
	September 30, 2023						September 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	$	195,234		$	5,567	3.81%	$	115,705		$	2,537	2.93%
Loans, gross		3,287,053			178,586	7.26%		2,577,324			98,344	5.10%
Federal funds sold and other interest-earning assets		142,224			5,324	5.00%		236,552			1,914	1.08%
Total interest-earning assets		3,624,511			189,477	6.99%		2,929,581			102,795	4.69%
Less allowance for loan losses		(36,236	)					(24,265	)
Total interest-earning assets, net of allowance		3,588,275						2,905,316
Noninterest-earning assets		186,443						169,473
Total assets	$	3,774,718					$	3,074,789

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing deposits	$	2,645,127		$	77,373	3.91%	$	2,279,048		$	15,014	0.88%
Note payable and line of credit		111,777			5,592	6.69%		65,898			2,848	5.78%
FHLB advances		106,353			4,318	5.43%		52,202			630	1.61%
Total interest-bearing liabilities		2,863,257			87,283	4.08%		2,397,148			18,492	1.03%
Noninterest-bearing deposits		473,834						351,002
Other liabilities		44,025						22,361
Total liabilities		3,381,116						2,770,511
Shareholders’ equity		393,602						304,278
Total liabilities and shareholders’ equity	$	3,774,718					$	3,074,789
Net interest income				$	102,194					$	84,303
Net interest spread (1)						2.91%						3.66%
Net interest margin (2)						3.77%						3.85%

___________

(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)	September 30			June 30			March 31			December 31			September 30

Period-end Loan Portfolio:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied	$	517,917		$	513,934		$	508,936		$	493,791		$	529,046
Non-farm non-residential non-owner occupied		566,973			547,120			511,546			506,012			490,503
Residential		326,354			310,842			286,358			308,775			283,432
Construction, development & other		655,822			595,601			627,143			567,851			500,879
Farmland		30,646			24,219			22,512			22,820			22,770
Commercial & industrial		1,288,320			1,164,624			1,112,638			1,058,910			1,029,231
Consumer		2,665			2,891			3,280			3,872			3,728
Municipal and other		171,256			175,046			140,913			145,520			113,263
Total loans	$	3,559,953		$	3,334,277		$	3,213,326		$	3,107,551		$	2,972,852

Asset Quality:
Nonaccrual loans	$	13,963		$	9,968		$	9,482		$	10,963		$	9,439
Loans > 90 days and still accruing		2,442			-			-			518			98
Restructured loans--accruing		-			-			-			780			781
Total nonperforming loans		16,405			9,968			9,482			12,261			10,318
Other real estate owned		-			-			-			-			-
Total nonperforming assets	$	16,405		$	9,968		$	9,482		$	12,261		$	10,318

QTD Net charge-offs (recoveries)	$	24		$	72		$	(364	)	$	708		$	457

Nonaccrual loans:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied	$	978		$	832		$	855		$	1,699		$	921
Non-farm non-residential non-owner occupied		1,235			1,417			282			296			309
Residential		3,058			494			506			513			111
Construction, development & other		567			36			39			45			232
Commercial & industrial		8,125			7,189			7,800			8,390			7,846
Consumer		-			-			-			20			20
Total nonaccrual loans	$	13,963		$	9,968		$	9,482		$	10,963		$	9,439

Asset Quality Ratios:
Nonperforming assets to total assets		0.39	%		0.25	%		0.25	%		0.32	%		0.29	%
Nonperforming loans to total loans		0.46	%		0.30	%		0.30	%		0.39	%		0.35	%
Allowance for credit losses to total loans		1.07	%		1.12	%		1.12	%		0.98	%		0.98	%
QTD Net charge-offs (recoveries) to average loans (annualized)		0.00	%		0.01	%		(0.05	%)		0.09	%		0.06	%

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

Tangible Common Equity:
Total shareholders' equity	$	400,331		$	395,945		$	387,044		$	381,780		$	376,354		$	400,331		$	376,354
Less: Preferred stock including additional paid in capital		66,225			66,225			66,225			66,225			66,273			66,225			66,273
Total common equity		334,106			329,720			320,819			315,555			310,081			334,106			310,081
Less: Goodwill and core deposit intangibles, net		19,043			19,084			19,124			19,165			19,205			19,043			19,205
Tangible common equity	$	315,063		$	310,636		$	301,695		$	296,390		$	290,876		$	315,063		$	290,876

Common shares outstanding at end of period		13,600,211			13,609,697			13,579,498			13,531,736			13,521,826			13,600,211			13,521,826

Book Value Per Share	$	24.57		$	24.23		$	23.63		$	23.32		$	22.93		$	24.57		$	22.93
Tangible Book Value Per Share	$	23.17		$	22.82		$	22.22		$	21.90		$	21.51		$	23.17		$	21.51


Tangible Assets:
Total assets	$	4,215,792		$	3,963,482		$	3,859,657		$	3,773,148		$	3,516,845		$	4,215,792		$	3,516,845
Adjustments: Goodwill and core deposit intangibles, net		19,043			19,084			19,124			19,165			19,205			19,043			19,205
Tangible assets	$	4,196,749		$	3,944,398		$	3,840,533		$	3,753,983		$	3,497,640		$	4,196,749		$	3,497,640

Total Common Equity to Total Assets		7.93	%		8.32	%		8.31	%		8.36	%		8.82	%		7.93	%		8.82	%
Tangible Common Equity to Tangible Assets		7.51	%		7.88	%		7.86	%		7.90	%		8.32	%		7.51	%		8.32	%


Average Tangible Common Equity:
Average shareholders' equity	$	402,049		$	393,773		$	384,794		$	381,271		$	308,092		$	393,602		$	304,278
Less: Average preferred stock including additional paid in capital		66,225			66,225			66,225			66,329			720			66,225			243
Average common equity		335,824			327,548			318,569			314,942			307,372			327,377			304,035
Less: Average goodwill and core deposit intangibles, net		19,068			19,108			19,149			19,184			19,225			19,108			19,265
Average tangible common equity	$	316,756		$	308,440		$	299,420		$	295,758		$	288,147		$	308,269		$	284,770

Net Income	$	5,578		$	8,891		$	9,243		$	7,525		$	6,770		$	23,712		$	11,134
Less: Dividends declared on preferred stock		1,184			1,184			1,171			1,418			-			3,539			-
Net Income Available to Common Shareholders	$	4,394		$	7,707		$	8,072		$	6,107		$	6,770		$	20,173		$	11,134

Return on Average Common Equity(A)		5.19	%		9.44	%		10.28	%		7.69	%		8.74	%		8.24	%		4.90	%
Return on Average Tangible Common Equity(A)		5.50	%		10.02	%		10.93	%		8.19	%		9.32	%		8.75	%		5.23	%

___________

(A) Interim periods annualized.

Document And Entity Information	Oct. 25, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 25, 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