HOUSTON, April 22, 2026 /PRNewswire/ -- Third Coast Bancshares, Inc. (NYSE & NYSE Texas: TCBX) (the "Company," "Third Coast," "we," "us," or "our"), the bank holding company for Third Coast Bank (the "Bank"), today reported its 2026 first quarter financial results.
2026 First Quarter Financial Highlights
Completed successful merger with Keystone Bancshares, Inc. ("Keystone") on February 1, 2026, which added approximately $812.0 million in loans, $1 billion in assets, and $844.2 million in deposits.
Return on average assets of 1.08% annualized for the first quarter of 2026 compared to 1.36% annualized for the fourth quarter of 2025 and 1.17% annualized for the first quarter of 2025.
Net interest margin of 3.67% for the first quarter of 2026 compared to 4.10% for the fourth quarter of 2025 and 3.80% for the first quarter of 2025.
Net income for the first quarter of 2026 totaled $16.4 million, or $1.03 and $0.88 per basic and diluted share, respectively, compared to $17.9 million, or $1.21 and $1.02 per basic and diluted share, respectively, for the fourth quarter of 2025 and $13.6 million, or $0.90 and $0.78 per basic and diluted share, respectively, for the first quarter of 2025.
The first quarter of 2026 included non-recurring adjustments related to the merger with Keystone that negatively impacted net income by approximately $3.3 million pre-tax.
Efficiency ratio of 66.06% for the first quarter of 2026 compared to 57.90% for the fourth quarter of 2025 and 61.23% for the first quarter of 2025.
Gross loans grew to $5.25 billion as of March 31, 2026, from $4.39 billion reported as of December 31, 2025.
Book value per common share and tangible book value per common share(1) increased to $35.28 and decreased to $31.97, respectively, as of March 31, 2026, compared to $33.47 and $32.12, respectively, as of December 31, 2025 and $29.92 and $28.56, respectively, as of March 31, 2025.
"Our first quarter marked an important step for Third Coast with the successful merger with Keystone. This transaction meaningfully increased our balance sheet and capabilities, and we're already seeing strong momentum across our loan pipelines and core markets. As we move through the year, we remain focused on executing on our strategic objectives, building deeper relationships with clients, and translating our expanded platform into sustainable growth and shareholder value," said Bart Caraway, Founder, Chairman, President & Chief Executive Officer of Third Coast.
Operating Results
Net Income and Earnings Per Common Share
Net income totaled $16.4 million for the first quarter of 2026, compared to $17.9 million for the fourth quarter of 2025 and $13.6 million for the first quarter of 2025. Net income available to common shareholders totaled $15.2 million for the first quarter of 2026, compared to $16.7 million for the fourth quarter of 2025 and $12.4 million for the first quarter of 2025. The quarter-over-quarter decrease from the fourth quarter of 2025 was primarily due to merger-related expenses attributing to an increase in legal and professional expenses, and an increase in salaries and employee benefits related to sign-on bonuses, retention and additional bonuses. 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, 2026, December 31, 2025 and March 31, 2025.
Basic and diluted earnings per common share were $1.03 per share and $0.88 per share, respectively, in the first quarter of 2026, compared to $1.21 per share and $1.02 per share, respectively, in the fourth quarter of 2025 and $0.90 per share and $0.78 per share, respectively, in the first quarter of 2025.
Net Interest Margin and Net Interest Income
The net interest margin for the first quarter of 2026 was 3.67%, compared to 4.10% for the fourth quarter of 2025 and 3.80% for the first quarter of 2025. The yield on loans for the first quarter of 2026 was 7.01%, compared to 7.52% for the fourth quarter of 2025 and 7.45% for the first quarter of 2025. The cost of interest-bearing deposits for the first quarter of 2026 was 3.53%, compared to 3.73% for the fourth quarter of 2025 and 4.02% for the first quarter of 2025.
Net interest income totaled $53.6 million for the first quarter of 2026, an increase of 2.8% from $52.2 million for the fourth quarter of 2025 and an increase of 25.3% from $42.8 million for the first quarter of 2025. Interest income totaled $97.4 million for the first quarter of 2026, an increase of 5.7% from $92.1 million for the fourth quarter of 2025 and an increase of 20.6% from $80.8 million for the first quarter of 2025. The quarter-over-quarter increase from the fourth quarter of 2025 in interest income primarily resulted from an increase in loans, slightly offset by a $1.0 million reversal of interest income on a loan placed on nonaccrual and a decrease in loan yields. Interest expense was $43.7 million for the first quarter of 2026, an increase of $3.8 million, or 9.6%, from $39.9 million for the fourth quarter of 2025 and an increase of $5.8 million, or 15.2%, from $38.0 million for the first quarter of 2025, primarily resulting from an increase in interest-bearing demand deposits slightly offset by a reduction in rates paid on interest-bearing demand deposits.
Noninterest Income and Noninterest Expense
Noninterest income totaled $4.0 million for the first quarter of 2026, compared to $4.3 million for the fourth quarter of 2025 and $3.1 million for the first quarter of 2025. The quarter-over-quarter decrease from the fourth quarter of 2025 in noninterest income was primarily due to a decrease in non-margin loan fees during the first quarter of 2026.
Noninterest expense increased to $38.1 million for the first quarter of 2026, compared to $32.7 million for the fourth quarter of 2025 and $28.1 million for the first quarter of 2025. The quarter-over-quarter increase from the fourth quarter of 2025 in noninterest expense was primarily due to merger-related expenses. During the first quarter of 2026, the Company recorded $3.3 million in Keystone merger-related noninterest expenses primarily attributable to $1.6 million in legal and professional expenses and $1.3 million in salaries and employee benefits. Additionally, the Company recorded $644,000 in salaries and employee benefits attributable to sign-on bonuses and additional discretionary bonuses during the first quarter of 2026. At March 31, 2026, the number of employees increased to 514, compared to 412 at December 31, 2025 primarily due to the Keystone merger.
The efficiency ratio was 66.06% for the first quarter of 2026, compared to 57.90% for the fourth quarter of 2025 and 61.23% for the first quarter of 2025.
Balance Sheet Highlights
Loan Portfolio and Composition
For the quarter ended March 31, 2026, gross loans increased to $5.25 billion, an increase of $856.7 million, or 19.5%, from $4.39 billion as of December 31, 2025, and an increase of $1.26 billion, or 31.7%, from $3.99 billion as of March 31, 2025. The increase in gross loans was impacted by the mid-quarter Keystone merger. Commercial and industrial loans and real estate loans accounted for the majority of the loan growth for the first quarter of 2026, with commercial and industrial loans increasing $276.2 million and real estate loans increasing $644.2 million from the fourth quarter of 2025, partially offset by municipal and other loans decreasing $64.4 million from the fourth quarter of 2025.
Asset Quality
Nonperforming loans at March 31, 2026 were $35.6 million, compared to $21.5 million at December 31, 2025 and $18.6 million at March 31, 2025. The increase in nonperforming loans during the first quarter of 2026 was primarily due to one loan for approximately $17.1 million that was placed on nonaccrual partially offset by a $5.0 million decline in loans over 90 days past due and still accruing. As of March 31, 2026, the nonperforming loans to total loans ratio was 0.68%, compared to 0.49% as of December 31, 2025 and 0.47% as of March 31, 2025.
The provision for credit loss recorded for the first quarter of 2026 was $580,000, and the allowance for credit losses of $51.5 million represented 0.98% of the $5.25 billion in gross loans outstanding as of March 31, 2026. The provision for credit loss recorded for the fourth quarter of 2025 was $2.2 million, and the allowance for credit losses of $43.9 million represented 1.00% of the $4.39 billion in gross loans outstanding as of December 31, 2025. The increase in the allowance for credit loss in the first quarter of 2026 compared to the fourth quarter of 2025 was primarily attributable to Day 1 allowance for credit losses related to the Keystone merger.
The Company recorded net recoveries of $4,000 and net charge-offs of $398,000 for the three months ended March 31, 2026 and March 31, 2025, respectively.
Deposits and Composition
Deposits totaled $5.72 billion as of March 31, 2026, an increase of 23.5% from $4.63 billion as of December 31, 2025, and an increase of 34.5% from $4.25 billion as of March 31, 2025. The increase in total deposits was impacted by the mid-quarter Keystone merger. Noninterest-bearing demand deposits increased from $495.0 million as of December 31, 2025, to $577.2 million as of March 31, 2026 and represented 10.1% and 10.7% of total deposits as of March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026, interest-bearing demand deposits increased $912.1 million, or 27.1%, time deposits increased $90.0 million, or 12.0%, and savings accounts increased $3.8 million, or 17.6%, respectively, from December 31, 2025.
The average cost of deposits was 3.17% for the first quarter of 2026, representing a 17-basis point decrease from the fourth quarter of 2025 and a 44-basis point decrease from the first quarter of 2025. The decreases were primarily 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 2026 first quarter results, which will be broadcast live over the Internet, on Thursday, April 23, 2026, 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 April 30, 2026, and may be accessed by dialing 201-612-7415 and using passcode 13757903#. 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 21 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; changes in key management personnel; the risk that the benefits from the transaction between Third Coast and Keystone may not be fully realized or may take longer to realize than expected, including as a result of changes in, or problems arising from, general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which Third Coast and Keystone operate; the risk that the integration of each party's operations will be materially delayed or will be more costly or difficult than expected or that the parties are otherwise unable to successfully integrate each party's businesses into the other's businesses; the possibility that the completion of the transaction may be more expensive than anticipated, including as a result of unexpected factors or events; reputational risk and potential adverse reactions of Third Coast's or Keystone's customers, suppliers, employees or other business partners, including those resulting from the completion of the transaction; the dilution caused by Third Coast's issuance of additional shares of its common stock in connection with the transaction; and other factors that may affect future results of Third Coast and Keystone including changes in asset quality and credit risk, the inability to sustain revenue and earnings growth, changes in interest rates and capital markets, inflation, customer borrowing, repayment, investment and deposit practices, the impact, extent and timing of technological changes, capital management activities and other actions of the Board of Governors of the Federal Reserve System and legislative and regulatory actions and reforms. 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, 2025 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 Common 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.
____________________________(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.
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
2026
2025
(Dollars in thousands)
March 31
December 31
September 30
June 30
March 31
ASSETS
Cash and cash equivalents:
Cash and due from banks
$
425,174
$
175,202
$
116,383
$
113,141
$
218,990
Federal funds sold
6,133
6,027
6,629
5,815
110,379
Total cash and cash equivalents
431,307
181,229
123,012
118,956
329,369
Interest bearing time deposits in other banks
270
267
265
262
359
Investment securities available-for-sale
435,846
383,192
376,719
355,753
397,442
Investment securities held to maturity
191,980
192,008
206,037
206,065
-
Loans held for investment
5,251,458
4,394,751
4,165,116
4,079,736
3,988,039
Less: allowance for credit losses
(51,455)
(43,949)
(42,563)
(40,035)
(40,456)
Loans held for investment, net
5,200,003
4,350,802
4,122,553
4,039,701
3,947,583
Accrued interest receivable
31,385
29,236
29,537
27,736
26,752
Premises and equipment, net
40,558
24,789
24,718
24,908
25,669
Other real estate owned
8,388
8,388
8,388
8,580
8,752
Bank-owned life insurance
77,107
76,357
75,547
74,761
74,018
Non-marketable securities, at cost
21,759
16,424
26,157
18,761
15,994
Deferred tax asset, net
7,493
6,450
6,989
8,646
9,176
Derivative assets
2,350
2,544
2,803
3,059
3,052
Right-of-use assets - operating leases
17,615
17,066
17,677
18,769
19,370
Goodwill and other intangible assets
54,883
18,680
18,720
18,761
18,801
Other assets
61,129
33,327
22,686
19,053
20,652
Total assets
$
6,582,073
$
5,340,759
$
5,061,808
$
4,943,771
$
4,896,989
LIABILITIES
Deposits:
Noninterest bearing
$
577,217
$
495,000
$
450,013
$
440,964
$
448,542
Interest bearing
5,137,860
4,131,888
3,922,728
3,839,905
3,800,001
Total deposits
5,715,077
4,626,888
4,372,741
4,280,869
4,248,543
Accrued interest payable
7,205
5,957
7,153
6,691
7,044
Derivative liabilities
3,517
3,142
3,521
3,779
3,527
Lease liability - operating leases
18,676
18,130
18,735
19,835
20,425
Other liabilities
48,177
36,775
32,040
24,745
25,979
Line of credit - Senior Debt
57,875
37,875
32,875
30,875
30,875
Note payable - Subordinated Debentures, net
81,016
80,965
80,913
80,862
80,810
Total liabilities
5,931,543
4,809,732
4,547,978
4,447,656
4,417,203
SHAREHOLDERS' EQUITY
Series A Convertible Non-Cumulative Preferred Stock
69
69
69
69
69
Series B Convertible Perpetual Preferred Stock
-
-
-
-
-
Common stock
16,641
13,970
13,958
13,930
13,904
Common stock - non-voting
-
-
-
-
-
Additional paid-in capital
428,815
323,929
323,491
322,972
322,456
Retained earnings
198,435
183,238
166,537
149,677
134,115
Accumulated other comprehensive income
7,669
10,920
10,874
10,566
10,341
Treasury stock, at cost
(1,099)
(1,099)
(1,099)
(1,099)
(1,099)
Total shareholders' equity
650,530
531,027
513,830
496,115
479,786
Total liabilities and shareholders' equity
$
6,582,073
$
5,340,759
$
5,061,808
$
4,943,771
$
4,896,989
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
Three Months Ended
2026
2025
(Dollars in thousands, except per share data)
March 31
December 31
September 30
June 30
March 31
INTEREST INCOME:
Loans, including fees
$
85,893
$
81,368
$
82,054
$
79,706
$
73,087
Investment securities available-for-sale
6,107
6,464
6,289
5,505
5,693
Investment securities held-to-maturity
2,398
2,681
2,882
1,607
-
Federal funds sold and other
2,988
1,586
1,278
1,844
1,986
Total interest income
97,386
92,099
92,503
88,662
80,766
INTEREST EXPENSE:
Deposit accounts
41,484
37,530
39,030
37,535
36,226
FHLB advances and other borrowings
2,257
2,372
2,624
1,753
1,743
Total interest expense
43,741
39,902
41,654
39,288
37,969
Net interest income
53,645
52,197
50,849
49,374
42,797
Provision for credit losses
580
