HOUSTON, Oct. 22, 2025 /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 2025 third quarter financial results.
Financial Highlights
Return on average assets of 1.41% annualized for the third quarter of 2025 compared to 1.38% annualized for the second quarter of 2025 and 1.14% annualized for the third quarter of 2024.
Net interest margin of 4.10% for the third quarter of 2025 compared to 4.22% for the second quarter of 2025 and 3.73% for the third quarter of 2024.
Net income for the third quarter of 2025 totaled $18.1 million, or $1.22 and $1.03 per basic and diluted share, respectively, compared to $16.7 million, or $1.12 and $0.96 per basic and diluted share, respectively, for the second quarter of 2025 and $12.8 million, or $0.85 and $0.74 per basic and diluted share, respectively, for the third quarter of 2024.
Efficiency ratio continues to improve from 55.45% for the second quarter of 2025 to 53.03% for the third quarter of 2025.
Gross loans grew to $4.17 billion as of September 30, 2025, from $4.08 billion reported as of June 30, 2025.
Book value per share and tangible book value per share(1) increased to $32.25 and $30.91, respectively, as of September 30, 2025, compared to $31.04 and $29.69, respectively, as of June 30, 2025 and $28.13 and $26.75, respectively, as of September 30, 2024.
Transfer of listing of common stock to the New York Stock Exchange and NYSE Texas.
(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, "This was a defining quarter for TCBX, showcasing our team's relentless focus through the Company's outstanding achievements and financial performance. The recent transfer of our stock to both the New York Stock Exchange and NYSE Texas signifies a strategic transition designed to boost market visibility and offer shareholders increased liquidity. Our total assets, loans, and deposits grew steadily, a true testament to our relationship-banking strategy. By optimizing operating leverage, we not only increased interest and non-interest income but also maintained stable expenses. Our unwavering commitment to delivering exceptional value is highlighted by our record-breaking earnings per share and enhanced returns on average assets. The results of this quarter vibrantly demonstrate the long-standing commitment and passion of the entire TCBX team."
Operating Results
Net Income and Earnings Per Share
Net income totaled $18.1 million for the third quarter of 2025, compared to $16.7 million for the second quarter of 2025 and $12.8 million for the third quarter of 2024. Net income available to common shareholders totaled $16.9 million for the third quarter of 2025, compared to $15.6 million for the second quarter of 2025 and $11.6 million for the third quarter of 2024. The quarter-over-quarter increase was primarily due to an increase in net interest income and an increase in non-margin loan fees, partially offset by an increase in provision for credit losses. Dividends on our Series A Convertible Non-Cumulative Preferred Stock ("Series A Preferred Stock") totaled $1.2 million for each of the quarters ended September 30, 2025 and June 30, 2025.
Basic and diluted earnings per share were $1.22 per share and $1.03 per share, respectively, in the third quarter of 2025, compared to $1.12 per share and $0.96 per share, respectively, in the second quarter of 2025 and $0.85 per share and $0.74 per share, respectively, in the third quarter of 2024.
Net Interest Margin and Net Interest Income
The net interest margin for the third quarter of 2025 was 4.10%, compared to 4.22% for the second quarter of 2025 and 3.73% for the third quarter of 2024. The yield on loans for the third quarter of 2025 was 7.79%, compared to 7.95% for the second quarter of 2025 and 7.90% for the third quarter of 2024. The cost of interest-bearing deposits for the third quarter of 2025 was 3.98%, compared to 4.00% for the second quarter of 2025 and 4.75% for the third quarter of 2024.
Net interest income totaled $50.8 million for the third quarter of 2025, an increase of 3.0% from $49.4 million for the second quarter of 2025 and an increase of 25.9% from $40.4 million for the third quarter of 2024. Interest income totaled $92.5 million for the third quarter of 2025, an increase of 4.3% from $88.7 million for the second quarter of 2025 and an increase of 11.8% from $82.7 million for the third quarter of 2024. The quarter-over-quarter increase in net interest income primarily resulted from an increase in loans and the purchase of investment securities. Interest expense was $41.7 million for the third quarter of 2025, an increase of $2.4 million, or 6.0%, from $39.3 million for the second quarter of 2025 and a decrease of $682,000, or 1.6%, from $42.3 million for the third quarter of 2024, primarily resulting from an increase in interest-bearing deposits.
Noninterest Income and Noninterest Expense
Noninterest income totaled $3.6 million for the third quarter of 2025, compared to $2.7 million for the second quarter of 2025 and $2.5 million for the third quarter of 2024. The increase in noninterest income was primarily due to an increase in loan fees during the third quarter of 2025.
Noninterest expense increased to $28.9 million for the third quarter of 2025, compared to $28.8 million for the second quarter of 2025 and $25.6 million for the third quarter of 2024. The quarter-over-quarter increase in noninterest expense was primarily due to an increase in salaries and employee benefits, offset by a decrease in legal and professional expenses and a decrease in loan operations and other real estate owned expenses compared to the second quarter of 2025. At September 30, 2025, the number of employees was 398, compared to 388 at June 30, 2025.
The efficiency ratio was 53.03% for the third quarter of 2025, compared to 55.45% for the second quarter of 2025 and 59.57% for the third quarter of 2024.
Balance Sheet Highlights
Loan Portfolio and Composition
For the quarter ended September 30, 2025, gross loans increased to $4.17 billion, an increase of $85.4 million, or 2.1%, from $4.08 billion as of June 30, 2025, and an increase of $275.3 million, or 7.1%, from $3.89 billion as of September 30, 2024. Commercial and industrial loans and real estate loans accounted for the majority of the loan growth for the third quarter of 2025, offset by slight decreases in municipal and other loans from the second quarter of 2025.
Asset Quality
Nonperforming loans at September 30, 2025 were $21.7 million, compared to $20.1 million at June 30, 2025 and $24.0 million at September 30, 2024. As of September 30, 2025, the nonperforming loans to total loans ratio was 0.52%, compared to 0.49% as of June 30, 2025 and 0.62% as of September 30, 2024. The increase in nonperforming loans during the third quarter of 2025 was due to an increase in loans greater than 90 days past due and still accruing which increased by approximately $4.3 million, primarily due to four borrowers totaling approximately $3.9 million. Of the four borrowers, one totaling $1.1 million has a 75% SBA guaranty, two totaling $2.4 million are well secured and in the process of renewal, and one is a mortgage loan that is in modification. This increase was partially offset by a decline in nonaccrual loans of $2.6 million, which was primarily attributed to $2.0 million in payoffs and paydowns, the placement of a $337,000 loan placed back on accrual, and a $233,000 foreclosure.
The provision for credit loss recorded for the third quarter of 2025 was $2.8 million, and the allowance for credit losses of $42.6 million represented 1.02% of the $4.17 billion in gross loans outstanding as of September 30, 2025. The provision for credit loss recorded for the second quarter of 2025 was $2.1 million, and the allowance for credit losses of $40.0 million represented 0.98% of the $4.08 billion in gross loans outstanding as of June 30, 2025.
The Company recorded net recoveries of $17,000 and $57,000 for the three months ended September 30, 2025 and September 30, 2024, respectively.
Deposits and Composition
Deposits totaled $4.37 billion as of September 30, 2025, an increase of 2.1% from $4.28 billion as of June 30, 2025, and an increase of 9.5% from $3.99 billion as of September 30, 2024. Noninterest-bearing demand deposits increased from $441.0 million as of June 30, 2025, to $450.0 million as of September 30, 2025 and represented 10.3% of total deposits as of both September 30, 2025 and June 30, 2025. As of September 30, 2025, interest-bearing demand deposits increased $91.6 million, or 3.0%, partially offset by a decrease in time deposits of $7.8 million, or 1.0%, and a decrease in savings accounts of $919,000, or 4.0%, respectively, from June 30, 2025.
The average cost of deposits was 3.56% for the third quarter of 2025, representing a 3-basis point decrease from the second quarter of 2025 and a 62-basis point decrease from the third 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 third quarter results, which will be broadcast live over the Internet, on Thursday, October 23, 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 October 30, 2025, and may be accessed by dialing 201-612-7415 and using passcode 13752288#. 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)
September 30
June 30
March 31
December 31
September 30
ASSETS
Cash and cash equivalents:
Cash and due from banks
$
116,383
$
113,141
$
218,990
$
371,157
$
258,191
Federal funds sold
6,629
5,815
110,379
50,045
12,265
Total cash and cash equivalents
123,012
118,956
329,369
421,202
270,456
Interest bearing time deposits in other banks
265
262
359
356
353
Investment securities available-for-sale
376,719
355,753
397,442
384,025
292,104
Investment securities held to maturity
206,037
206,065
-
-
-
Loans held for investment
4,165,116
4,079,736
3,988,039
3,966,425
3,889,831
Less: allowance for credit losses
(42,563)
(40,035)
(40,456)
(40,304)
(39,683)
Loans held for investment, net
4,122,553
4,039,701
3,947,583
3,926,121
3,850,148
Accrued interest receivable
29,537
27,736
26,752
25,820
26,111
Premises and equipment, net
24,718
24,908
25,669
26,230
26,696
Bank-owned life insurance
75,547
74,761
74,018
68,341
67,679
Non-marketable securities, at cost
26,157
18,761
15,994
15,980
24,328
Deferred tax asset, net
6,989
8,646
9,176
11,445
8,654
Derivative assets
2,803
3,059
3,052
6,479
5,786
Right-of-use assets - operating leases
17,677
18,769
19,370
19,863
20,397
Goodwill and other intangible assets
18,720
18,761
18,801
18,841
18,882
Other assets
31,074
27,633
29,404
17,743
16,176
Total assets
$
5,061,808
$
4,943,771
$
4,896,989
$
4,942,446
$
4,627,770
LIABILITIES
Deposits:
Noninterest bearing
$
450,013
$
440,964
$
448,542
$
602,082
$
489,822
Interest bearing
3,922,728
3,839,905
3,800,001
3,708,416
3,504,616
Total deposits
4,372,741
4,280,869
4,248,543
4,310,498
3,994,438
Accrued interest payable
7,153
6,691
7,044
6,281
7,283
Derivative liabilities
3,521
3,779
3,527
8,660
6,874
Lease liability - operating leases
18,735
19,835
20,425
20,900
21,412
Other liabilities
32,040
24,745
25,979
23,754
34,632
Line of credit - Senior Debt
32,875
30,875
30,875
30,875
31,875
Note payable - Subordinated Debentures, net
80,913
80,862
80,810
80,759
80,708
Total liabilities
4,547,978
4,447,656
4,417,203
4,481,727
4,177,222
SHAREHOLDERS' EQUITY
Series A Convertible Non-Cumulative Preferred Stock
69
69
69
69
69
Series B Convertible Perpetual Preferred Stock
-
-
-
-
-
Common stock
13,958
13,930
13,904
13,848
13,746
Common stock - non-voting
-
-
-
-
-
Additional paid-in capital
323,491
322,972
322,456
321,696
320,871
Retained earnings
166,537
149,677
134,115
121,697
109,160
Accumulated other comprehensive income
10,874
10,566
10,341
4,508
7,801
Treasury stock, at cost
(1,099)
(1,099)
(1,099)
(1,099)
(1,099)
Total shareholders' equity
513,830
496,115
479,786
460,719
450,548
Total liabilities and shareholders' equity
$
5,061,808
$
4,943,771
$
4,896,989
$
4,942,446
$
4,627,770
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
Three Months Ended
Nine Months Ended
2025
2024
2025
2024
(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
$
82,054
$
79,706
$
73,087
$
76,017
$
75,468
$
234,847
$
219,242
Investment securities available-for-sale
6,289
5,505
5,693
4,939
4,532
17,487
12,116
Investment securities held-to-maturity
2,882
1,607
-
-
-
4,489
-
Federal funds sold and other
1,278
1,844
1,986
4,580
2,719
5,108
11,462
Total interest income
92,503
88,662
80,766
85,536
82,719
261,931
242,820
INTEREST EXPENSE:
Deposit accounts
39,030
37,535
36,226
40,233
40,407
112,791
119,515
FHLB advances and other borrowings
2,624
1,753
1,743
1,865
1,929
6,120
5,985
Total interest expense
41,654
39,288
37,969
42,098
42,336
118,911
125,500
Net interest income
50,849
49,374
42,797
43,438
40,383
143,020
117,320
Provision for credit losses
2,763
2,130
450
1,156
1,085
5,343
4,545
Net interest income after credit loss expense
48,086
47,244
42,347
42,282
39,298
137,677
112,775
NONINTEREST INCOME:
Service charges and fees
2,839
2,125
2,277
1,772
2,143
7,241
5,163
Earnings on bank-owned life insurance
786
743
677
662
649
2,206
1,818
(Loss) gain on sale of investment securities available-for-sale
-
(110)
(228)
196
(480)
(338)
(200)
Gain on sale of SBA loans
-
44
30
-
-
74
30
Other
10
(152)
351
243
205
209
937
Total noninterest income
3,635
2,650
3,107
2,873
2,517
9,392
7,748
NONINTEREST EXPENSE:
Salaries and employee benefits
19,560
18,179
