Third Coast Bancshares, Inc. Reports 2025 First Quarter Financial Results

Year-over-Year Net Income Improved 31% and Diluted EPS increased 28% Net Interest Margin Expands to 3.80% and Book Value Per Share Increases , /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 to 1.13% annualized for the fourth quarter of 2024 and 0.95% annualized for the first quarter of 2024. Net interest margin of 3.80% for the first quarter of 2025 compared to 3.71% for the fourth quarter of 2024 and 3.60% for the first quarter of 2024. Net income for the first quarter of 2025 totaled $13.6 million, or $0.90 and $0.78 per basic and diluted share, respectively, compared to $13.7 million, or $0.92 and $0.79 per basic and diluted share, respectively, for the fourth quarter of 2024. Gross loans grew to $3.99 billion as of March 31, 2025, from $3.97 billion reported as of December 31, 2024. Book value per share and tangible book value per share(1) increased to $29.92 and $28.56, respectively, as of March 31, 2025, compared to $28.65 and $27.29, respectively, as of December 31, 2024 and $26.18 and $24.79, respectively, as of March 31, 2024. On April 1, 2025, the Bank completed a $200 million commercial real estate loan securitization, reducing our risk-weighted assets and improving risk-weighted capital ratios. The transactions also strengthened our financial position by reducing construction and land development loan concentrations and mitigating credit risk. ______________ (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 news release for a reconciliation of these non-GAAP financial measures. Bart Caraway, Founder, Chairman, President & CEO of Third Coast, said, "We delivered a solid first quarter, marked by continued expansion in our net interest margin and steady growth in our loan portfolio, while preserving strong asset quality. Our disciplined approach to managing deposit costs and thoughtful credit risk management enabled us to enhance shareholder value, as reflected in the increase in both book value and tangible book value per share. Despite some seasonal softness in deposits, our core profitability metrics improved, and our capital ratios strengthened, underscoring the resilience of our business model and our commitment to sustainable growth. "Just following the quarter end, we successfully executed a significant commercial real estate loan securitization, which will provide us with additional flexibility to manage our balance sheet and capital ratios. We believe this transaction will not only reduce our CRE concentration and improve our risk-based capital, but also generate meaningful fee income that will benefit our results in the coming quarters. The securitization demonstrates our forward-thinking approach to capital management and positions us to support future loan growth while upholding a prudent risk profile. "With a strong capital base, improved asset quality, and a focus on disciplined execution, Third Coast is well positioned to deliver continued value for our shareholders and to compete effectively in the dynamic Texas banking landscape," Mr. Caraway concluded. Operating Results Net Income and Earnings Per Share Net income totaled $13.6 million for the first quarter of 2025, compared to $13.7 million for the fourth quarter of 2024 and $10.4 million for the first quarter of 2024. Net income available to common shareholders totaled $12.4 million for the first quarter of 2025, compared to $12.5 million for the fourth quarter of 2024 and $9.2 million for the first quarter of 2024. The year-over-year increase was primarily due to an increase in net interest income, resulting from loan growth and the purchase of investment securities, and an increase in service charges and fees, offset by an increase in salary and employee benefit expenses during the first quarter of 2025. Dividends on our Series A Convertible Non-Cumulative Preferred Stock ("Series A Preferred Stock") totaled $1.2 million for each of the quarters ended March 31, 2025 and December 31, 2024. Basic and diluted earnings per share were $0.90 per share and $0.78 per share, respectively, in the first quarter of 2025, compared to $0.92 per share and $0.79 per share, respectively, in the fourth quarter of 2024 and $0.68 per share and $0.61 per share, respectively, in the first quarter of 2024. Net Interest Margin and Net Interest Income The net interest margin for the first quarter of 2025 was 3.80%, compared to 3.71% for the fourth quarter of 2024 and 3.60% for the first quarter of 2024. The yield on loans for the first quarter of 2025 was 7.45%, compared to 7.68% for the fourth quarter of 2024 and 7.75% for the first quarter of 2024. The cost of interest-bearing deposits for the first quarter of 2025 was 4.02%, compared to 4.33% for the fourth quarter of 2024 and 4.65% for the first quarter of 2024. Net interest income totaled $42.8 million for the first quarter of 2025, a decrease of 1.5% from $43.4 million for the fourth quarter of 2024 and an increase of 12.4% from $38.1 million for the first quarter of 2024. Interest income totaled $80.8 million for the first quarter of 2025, a decrease of 5.6% from $85.5 million for the fourth quarter of 2024 and an increase of 2.4% from $78.9 million for the first quarter of 2024. The quarter-over-quarter decrease in interest income resulted from a decrease in loan yields and a decrease in interest income from federal funds sold and deposits in interest-bearing correspondent banks during the first quarter of 2025. Interest expense decreased from $42.1 million for the fourth quarter of 2024 and $40.8 million for the first quarter of 2024 to $38.0 million for the first quarter of 2025, primarily resulting from the reduction in rates paid on interest-bearing deposits. Noninterest Income and Noninterest Expense Noninterest income totaled $3.1 million for the first quarter of 2025, compared to $2.9 million for the fourth quarter of 2024 and $2.3 million for the first quarter of 2024. The sequential increase in noninterest income was primarily due to increased service charges and fees during the first quarter of 2025. Noninterest expense increased to $28.1 million for the first quarter of 2025, compared to $27.2 million for the fourth quarter of 2024 and $25.9 million for the first quarter of 2024. The quarter-over-quarter increase in noninterest expense was primarily due to increased salary expense resulting from new hires, increased bonus expense and a reduction in salary expense deferral related to loan fundings during the first quarter of 2025. At March 31, 2025, the number of employees was 383, compared to 369 at December 31, 2024. The efficiency ratio was 61.23% for the first quarter of 2025, compared to 58.80% for the fourth quarter of 2024 and 64.11% for the first quarter of 2024. Balance Sheet Highlights Loan Portfolio and Composition For the quarter ended March 31, 2025, gross loans increased to $3.99 billion, an increase of $21.6 million, or 0.5%, from $3.97 billion as of December 31, 2024, and an increase of $241.9 million, or 6.5%, from $3.75 billion as of March 31, 2024. Commercial and industrial loans accounted for the majority of the loan growth for the first quarter of 2025, offset by slight decreases in real estate loans and municipal loans from the fourth quarter of 2024. Asset Quality Nonperforming loans at March 31, 2025 were $18.6 million, compared to $27.9 million at December 31, 2024 and $21.7 million at March 31, 2024. As of March 31, 2025, the nonperforming loans to total loans ratio was 0.47%, compared to 0.70% as of December 31, 2024 and 0.58% as of March 31, 2024. The decrease in nonperforming loans during the first quarter of 2025 was primarily due to the foreclosure and transfer to OREO of three nonperforming loans for one relationship totaling $7.3 million, the payoff and paydown of five nonperforming loans totaling $1.9 million, and the charge-off of one relationship for $810,000. The provision for credit loss recorded for the first quarter of 2025 was $450,000, and the allowance for credit losses of $40.5 million represented 1.01% of the $3.99 billion in gross loans outstanding as of March 31, 2025. The provision for credit loss recorded for the fourth quarter of 2024 was $1.2 million, and the allowance for credit losses of $40.3 million represented 1.02% of the $3.97 billion in gross loans outstanding as of December 31, 2024. The decrease in the provision for credit loss recorded in the first quarter of 2025 compared to the fourth quarter of 2024 is a reflection of the improvement in asset quality and loan growth. The Company recorded net charge-offs of $398,000 and $742,000 for the three months ended March 31, 2025 and March 31, 2024, respectively. Deposits and Composition Deposits totaled $4.25 billion as of March 31, 2025, a decrease of 1.4% from $4.31 billion as of December 31, 2024, and an increase of 4.9% from $4.05 billion as of March 31, 2024. Noninterest-bearing demand deposits decreased from $602.1 million as of December 31, 2024, to $448.5 million as of March 31, 2025 and represented 10.6% of total deposits as of March 31, 2025, compared to 14.0% of total deposits as of December 31, 2024. As of March 31, 2025, interest-bearing demand deposits increased $23.5 million, or 0.8%, time deposits increased $71.2 million, or 12.3%, and savings accounts decreased $3.1 million, or 11.1%, respectively, from December 31, 2024. The average cost of deposits was 3.60% for the first quarter of 2025, representing a 23-basis point decrease from the fourth quarter of 2024 and a 49-basis point decrease from the first quarter of 2024. The decreases were due to the reduction in rates paid on interest-bearing demand deposits. Earnings Conference Call Third Coast has scheduled a conference call to discuss its 2025 first quarter results, which will be broadcast live over the Internet, on Thursday, April 24, 2025, 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.thirdcoast.bank/events-and-presentations/events/. For those who cannot listen to the live call, a replay will be available through May 1, 2025, and may be accessed by dialing 201-612-7415 and using passcode 13752283#. Also, an archive of the webcast will be available shortly after the call at https://ir.thirdcoast.bank/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. Founded in 2008 in Humble, Texas, Third Coast Bank conducts banking operations through 19 branches encompassing the four largest metropolitan areas in Texas. Please visit https://www.thirdcoast.bank 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; our ability to pay dividends on our Series A Preferred Stock; credit risk associated with our business; economic conditions affecting the real estate market; prepayment risks associated with commercial real estate loans; liquidity risks in the securitization market; operational risks related to the administration of securitized assets; 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, 2024 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) 2025 2024 (Dollars in thousands) March 31 December 31 September 30 June 30 March 31 ASSETS Cash and cash equivalents: Cash and due from banks $ 218,990 $ 371,157 $ 258,191 $ 241,809 $ 367,831 Federal funds sold 110,379 50,045 12,265 12,088 130,429 Total cash and cash equivalents 329,369 421,202 270,456 253,897 498,260 Interest bearing time deposits in other banks 359 356 353 350 - Investment securities available-for-sale 397,442 384,025 292,104 286,167 246,291 Loans held for investment 3,988,039 3,966,425 3,889,831 3,758,159 3,746,178 Less: allowance for credit losses (40,456) (40,304) (39,683) (38,211) (38,140) Loans, net 3,947,583 3,926,121 3,850,148 3,719,948 3,708,038 Accrued interest receivable 26,752 25,820 26,111 27,518 25,769 Premises and equipment, net 25,669 26,230 26,696 27,626 26,844 Bank-owned life insurance 74,018 68,341 67,679 67,030 66,443 Non-marketable securities, at cost 15,994 15,980 24,328 16,147 16,095 Deferred tax asset, net 9,176 11,445 8,654 8,972 8,712 Derivative assets 3,052 6,479 5,786 7,799 11,015 Right-of-use assets - operating leases 19,370 19,863 20,397 20,944 20,729 Goodwill and other intangible assets 18,801 18,841 18,882 18,922 18,963 Other assets 29,404 17,743 16,176 18,799 13,244 Total assets $ 4,896,989 $ 4,942,446 $ 4,627,770 $ 4,474,119 $ 4,660,403 LIABILITIES Deposits: Noninterest bearing $ 448,542 $ 602,082 $ 489,822 $ 464,498 $ 424,019 Interest bearing 3,800,001 3,708,416 3,504,616 3,391,093 3,626,653 Total deposits 4,248,543 4,310,498 3,994,438 3,855,591 4,050,672 Accrued interest payable 7,044 6,281 7,283 5,668 3,927 Derivative liabilities 3,527 8,660 6,874 7,626 8,253 Lease liability - operating leases 20,425 20,900 21,412 21,919 21,647 Other liabilities 25,979 23,754 34,632 30,786 27,806 Line of credit - Senior Debt 30,875 30,875 31,875 36,875 43,875 Note payable - Subordinated Debentures, net 80,810 80,759 80,708 80,656 80,605 Total liabilities 4,417,203 4,481,727 4,177,222 4,039,121 4,236,785 SHAREHOLDERS' EQUITY Series A Convertible Non-Cumulative Preferred Stock 69 69 69 69 69 Series B Convertible Perpetual Preferred Stock - - - - - Common stock 13,904 13,848 13,746 13,744 13,731 Common stock - non-voting - - - - - Additional paid-in capital 322,456 321,696 320,871 320,496 320,077 Retained earnings 134,115 121,697 109,160 97,583 87,971 Accumulated other comprehensive income 10,341 4,508 7,801 4,205 2,869 Treasury stock, at cost (1,099) (1,099) (1,099) (1,099) (1,099) Total shareholders' equity 479,786 460,719 450,548 434,998 423,618 Total liabilities and shareholders' equity $ 4,896,989 $ 4,942,446 $ 4,627,770 $ 4,474,119 $ 4,660,403 Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited) Three Months Ended Year Ended 2025 2024 2024 (Dollars in thousands, except per share data) March 31 December 31 September 30 June 30 March 31 December 31 INTEREST INCOME: Loans, including fees $ 73,087 $ 76,017 $ 75,468 $ 73,103 $ 70,671 $ 295,259 Investment securities available-for-sale 5,693 4,939 4,532 4,491 3,093 17,055 Federal funds sold and other 1,986 4,580 2,719 3,631 5,112 16,042 Total interest income 80,766 85,536 82,719 81,225 78,876 328,356 INTEREST EXPENSE: Deposit accounts 36,226 40,233 40,407 40,410 38,698 159,748 FHLB advances and other borrowings 1,743 1,865 1,929 1,957 2,099 7,850 Total interest expense 37,969 42,098 42,336 42,367 40,797 167,598 Net interest income 42,797 43,438 40,383 38,858 38,079 160,758 Provision for credit losses 450 1,156 1,085 1,900 1,560 5,701 Net interest income after credit loss expense 42,347 42,282 39,298 36,958 36,519 155,057 NONINTEREST INCOME: Service charges and fees 2,277 1,772 2,143 1,515 1,505 6,935 Earnings on bank-owned life insurance 677 662 649 587 582 2,480 (Loss) gain on sale of investment securities available-for-sale (228) 196 (480) 123 157 (4) Gain on sale of SBA loans 30 - - - 30 30 Other 351 243 205 663 69 1,180 Total noninterest income 3,107 2,873 2,517 2,888 2,343 10,621 NONINTEREST EXPENSE: Salaries and employee benefits 18,341 17,018 15,679 15,917 16,502 65,116 Occupancy and equipment expense 3,282 3,292 3,229 3,146 3,045 12,712 Legal and professional 1,431 1,587 1,037 1,621 1,385 5,630 Data processing and network expense 1,120 1,182 1,608 1,046 1,418 5,254 Regulatory assessments 1,306 1,196 1,249 1,005 980 4,430 Advertising and marketing 409 526 420 406 355 1,707 Software purchases and maintenance 811 766 854 828 817 3,265 Loan operations 269 189 227 262 226 904 Telephone and communications 175 144 166 141 134 585 Other 964 1,330 1,085 1,257 1,052 4,724 Total noninterest expense 28,108 27,230 25,554 25,629 25,914 104,327 NET INCOME BEFORE INCOME TAX EXPENSE 17,346 17,925 16,261 14,217 12,948 61,351 Income tax expense 3,757 4,192 3,486 3,421 2,581 13,680 NET INCOME 13,589 13,733 12,775 10,796 10,367 47,671 Preferred stock dividends declared 1,171 1,196 1,198 1,184 1,171 4,749 NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 12,418 $ 12,537 $ 11,577 $ 9,612 $ 9,196 $ 42,922 EARNINGS PER COMMON SHARE: Basic earnings per share $ 0.90 $ 0.92 $ 0.85 $ 0.70 $ 0.68 $ 3.14 Diluted earnings per share $ 0.78 $ 0.79 $ 0.74 $ 0.63 $ 0.61 $ 2.78 Third Coast Bancshares, Inc. and Subsidiary Financial Highlights (unaudited) Three Months Ended Year Ended 2025 2024 2024 (Dollars in thousands, except share and per share data) March 31 December 31 September 30 June 30 March 31 December 31 Earnings per share, basic $ 0.90 $ 0.92 $ 0.85 $ 0.70 $ 0.68 $ 3.14 Earnings per share, diluted $ 0.78 $ 0.79 $ 0.74 $ 0.63 $ 0.61 $ 2.78 Dividends on common stock $ - $ - $ - $ - $ - $ - Dividends on Series A Convertible Non-Cumulative Preferred Stock $ 16.88 $ 17.25 $ 17.25 $ 17.06 $ 16.88 $ 68.44 Return on average assets (A) 1.17 % 1.13 % 1.14 % 0.97 % 0.95 % 1.05 % Return on average common equity (A) 12.41 % 12.66 % 12.12 % 10.53 % 10.44 % 11.48 % Return on average tangible common equity (A) (B) 13.01 % 13.29 % 12.76 % 11.10 % 11.03 % 12.09 % Net interest margin (A) (C) 3.80 % 3.71 % 3.73 % 3.62 % 3.60 % 3.67 % Efficiency ratio (D) 61.23 % 58.80 % 59.57 % 61.39 % 64.11 % 60.88 % Capital Ratios Third Coast Bancshares, Inc. (consolidated): Total common equity to total assets 8.45 % 7.98 % 8.31 % 8.24 % 7.67 % 7.98 % Tangible common equity to tangible assets (B) 8.09 % 7.63 % 7.93 % 7.85 % 7.29 % 7.63 % Common equity tier 1 (to risk weighted assets) 8.70 % 8.41 % 8.38 % 8.29 % 7.97 % 8.41 % Tier 1 capital (to risk weighted assets) 10.19 % 9.90 % 9.93 % 9.88 % 9.54 % 9.90 % Total capital (to risk weighted assets) 12.97 % 12.68 % 12.80 % 12.78 % 12.41 % 12.68 % Tier 1 capital (to average assets) 9.58 % 9.12 % 9.53 % 9.24 % 9.15 % 9.12 % Third Coast Bank: Common equity tier 1 (to risk weighted assets) 12.69 % 12.35 % 12.45 % 12.52 % 12.32 % 12.35 % Tier 1 capital (to risk weighted assets) 12.69 % 12.35 % 12.45 % 12.52 % 12.32 % 12.35 % Total capital (to risk weighted assets) 13.63 % 13.29 % 13.42 % 13.49 % 13.28 % 13.29 % Tier 1 capital (to average assets) 11.93 % 11.37 % 11.95 % 11.71 % 11.81 % 11.37 % Other Data Weighted average shares: Basic 13,776,998 13,698,010 13,665,400 13,657,223 13,606,256 13,656,859 Diluted 17,440,826 17,394,884 17,184,991 17,018,680 16,936,003 17,133,845 Period end shares outstanding 13,825,286 13,769,780 13,667,591 13,665,505 13,652,888 13,769,780 Book value per share $ 29.92 $ 28.65 $ 28.13 $ 26.99 $ 26.18 $ 28.65 Tangible book value per share (B) $ 28.56 $ 27.29 $ 26.75 $ 25.60 $ 24.79 $ 27.29 ___________ (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 at the end of this news release. (C) Net interest margin represents net interest income divided by average interest-earning assets. (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 March 31, 2025 December 31, 2024 March 31, 2024 (Dollars in thousands) AverageOutstandingBalance InterestEarned/Paid(3) AverageYield/Rate(4) AverageOutstandingBalance InterestEarned/Paid(3) AverageYield/Rate(4) AverageOutstandingBalance InterestEarned/Paid(3) AverageYield/Rate(4) Assets Interest-earnings assets: Loans, gross $ 3,979,859 $ 73,087 7.45 % $ 3,937,405 $ 76,017 7.68 % $ 3,665,378 $ 70,671 7.75 % Investment securities 398,115 5,693 5.80 % 342,474 4,939 5.74 % 202,277 3,093 6.15 % Federal funds sold and other interest-earning assets 186,893 1,986 4.31 % 379,836 4,580 4.80 % 383,929 5,112 5.36 % Total interest-earning assets 4,564,867 80,766 7.18 % 4,659,715 85,536 7.30 % 4,251,584 78,876 7.46 % Less allowance for loan losses (40,595) (39,855) (37,278) Total interest-earning assets, net of allowance 4,524,272 4,619,860 4,214,306 Noninterest-earning assets 198,522 195,143 193,070 Total assets $ 4,722,794 $ 4,815,003 $ 4,407,376 Liabilities and Shareholders' Equity Interest-bearing liabilities: Interest-bearing deposits $ 3,652,006 $ 36,226 4.02 % $ 3,692,533 $ 40,233 4.33 % $ 3,346,847 $ 38,698 4.65 % Note payable and line of credit 111,661 1,713 6.22 % 109,294 1,708 6.22 % 120,884 2,099 6.98 % FHLB advances 2,551 30 4.77 % 11,900 157 5.25 % — — — Total interest-bearing liabilities 3,766,218 37,969 4.09 % 3,813,727 42,098 4.39 % 3,467,731 40,797 4.73 % Noninterest-bearing deposits 423,780 484,738 457,054 Other liabilities 60,755 56,369 61,945 Total liabilities 4,250,753 4,354,834 3,986,730 Shareholders' equity 472,041 460,169 420,646 Total liabilities and shareholders' equity $ 4,722,794 $ 4,815,003 $ 4,407,376 Net interest income $ 42,797 $ 43,438 $ 38,079 Net interest spread (1) 3.09 % 2.91 % 2.73 % Net interest margin (2) 3.80 % 3.71 % 3.60 % ___________ (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 2025 2024 (Dollars in thousands) March 31 December 31 September 30 June 30 March 31 Period-end Loan Portfolio: Real estate loans: Commercial real estate: Non-farm non-residential owner occupied $ 420,902 $ 448,134 $ 470,222 $ 499,941 $ 510,266 Non-farm non-residential non-owner occupied 633,227 652,119 611,617 612,268 598,311 Residential 335,285 336,736 339,558 349,461 345,890 Construction, development & other 846,166 871,373 825,302 756,646 725,176 Farmland 30,783 30,915 35,650 31,049 29,706 Commercial & industrial 1,605,243 1,497,408 1,499,302 1,361,401 1,350,289 Consumer 1,443 1,859 2,002 2,216 2,382 Municipal and other 114,990 127,881 106,178 145,177 184,158 Total loans $ 3,988,039 $ 3,966,425 $ 3,889,831 $ 3,758,159 $ 3,746,178 Asset Quality: Nonaccrual loans $ 17,066 $ 26,773 $ 23,522 $ 23,910 $ 18,130 Loans > 90 days and still accruing 1,503 1,173 522 507 3,614 Total nonperforming loans 18,569 27,946 24,044 24,417 21,744 Other real estate owned 8,752 862 283 - - Total nonperforming assets $ 27,321 $ 28,808 $ 24,327 $ 24,417 $ 21,744 QTD Net charge-offs (recoveries) $ 398 $ 879 $ (57) $ 1,829 $ 742 Nonaccrual loans: Real estate loans: Commercial real estate: Non-farm non-residential owner occupied $ 3,100 $ 10,433 $ 9,696 $ 10,051 $ 2,369 Non-farm non-residential non-owner occupied - - 68 74 1,225 Residential 2,616 2,226 2,664 2,767 2,837 Construction, development & other 358 400 1 301 406 Commercial & industrial 10,992 13,714 11,093 10,717 11,293 Total nonaccrual loans $ 17,066 $ 26,773 $ 23,522 $ 23,910 $ 18,130 Asset Quality Ratios: Nonperforming assets to total assets 0.56 % 0.58 % 0.53 % 0.55 % 0.47 % Nonperforming loans to total loans 0.47 % 0.70 % 0.62 % 0.65 % 0.58 % Allowance for credit losses to total loans 1.01 % 1.02 % 1.02 % 1.02 % 1.02 % QTD Net charge-offs (recoveries) to average loans (annualized) 0.04 % 0.09 % (0.01) % 0.20 % 0.08 % Third Coast Bancshares, Inc. and SubsidiaryGAAP 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 Year Ended 2025 2024 2024 (Dollars in thousands, except share and per share data) March 31 December 31 September 30 June 30 March 31 December 31 Tangible Common Equity: Total shareholders' equity $ 479,786 $ 460,719 $ 450,548 $ 434,998 $ 423,618 $ 460,719 Less: Preferred stock including additional paid in capital 66,160 66,160 66,117 66,225 66,225 66,160 Total common equity 413,626 394,559 384,431 368,773 357,393 394,559 Less: Goodwill and core deposit intangibles, net 18,801 18,841 18,882 18,922 18,963 18,841 Tangible common equity $ 394,825 $ 375,718 $ 365,549 $ 349,851 $ 338,430 $ 375,718 Common shares outstanding at end of period 13,825,286 13,769,780 13,667,591 13,665,505 13,652,888 13,769,780 Book Value Per Share $ 29.92 $ 28.65 $ 28.13 $ 26.99 $ 26.18 $ 28.65 Tangible Book Value Per Share $ 28.56 $ 27.29 $ 26.75 $ 25.60 $ 24.79 $ 27.29 Tangible Assets: Total assets $ 4,896,989 $ 4,942,446 $ 4,627,770 $ 4,474,119 $ 4,660,403 $ 4,942,446 Adjustments: Goodwill and core deposit intangibles, net 18,801 18,841 18,882 18,922 18,963 18,841 Tangible assets $ 4,878,188 $ 4,923,605 $ 4,608,888 $ 4,455,197 $ 4,641,440 $ 4,923,605 Total Common Equity to Total Assets 8.45 % 7.98 % 8.31 % 8.24 % 7.67 % 7.98 % Tangible Common Equity to Tangible Assets 8.09 % 7.63 % 7.93 % 7.85 % 7.29 % 7.63 % Average Tangible Common Equity: Average shareholders' equity $ 472,041 $ 460,169 $ 446,124 $ 433,510 $ 420,646 $ 440,184 Less: Average preferred stock including additional paid in capital 66,160 66,121 66,223 66,225 66,225 66,198 Average common equity 405,881 394,048 379,901 367,285 354,421 373,986 Less: Average goodwill and core deposit intangibles, net 18,826 18,865 18,906 18,946 18,987 18,926 Average tangible common equity $ 387,055 $ 375,183 $ 360,995 $ 348,339 $ 335,434 $ 355,060 Net Income $ 13,589 $ 13,733 $ 12,775 $ 10,796 $ 10,367 $ 47,671 Less: Dividends declared on preferred stock 1,171 1,196 1,198 1,184 1,171 4,749 Net Income Available to Common Shareholders $ 12,418 $ 12,537 $ 11,577 $ 9,612 $ 9,196 $ 42,922 Return on Average Common Equity(A) 12.41 % 12.66 % 12.12 % 10.53 % 10.44 % 11.48 % Return on Average Tangible Common Equity(A) 13.01 % 13.29 % 12.76 % 11.10 % 11.03 % 12.09 % ___________ (A) Interim periods annualized. Contact:Ken Dennard / Natalie HairstonDennard Lascar Investor Relations(713) 529-6600[email protected] SOURCE Third Coast Bancshares WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Third Coast Bancshares, Inc. Reports 2025 First Quarter Financial Results

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