Third Coast Bancshares, Inc. Reports 2025 Second Quarter Financial Results
Record EPS of $1.12 and Diluted EPS of $0.96 in Latest Quarterly Results
HOUSTON, July 23, 2025 /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 second quarter financial results.
Year to Date Financial Highlights
Return on average assets of 1.38% annualized for the second quarter of 2025 compared to 1.17% annualized for the first quarter of 2025 and 0.97% annualized for the second quarter of 2024.
Net interest margin of 4.22% for the second quarter of 2025 compared to 3.80% for the first quarter of 2025 and 3.62% for the second quarter of 2024.
Net income for the second quarter of 2025 totaled $16.7 million, or $1.12 and $0.96 per basic and diluted share, respectively, compared to $13.6 million, or $0.90 and $0.78 per basic and diluted share, respectively, for the first quarter of 2025 and $10.8 million, or $0.70 and $0.63 per basic and diluted share, respectively, for the second quarter of 2024.
Efficiency ratio continues to improve from 61.23% for the first quarter of 2025 to 55.45% for the second quarter of 2025.
Gross loans grew to $4.08 billion as of June 30, 2025, from $3.99 billion reported as of March 31, 2025.
Book value per share and tangible book value per share(1) increased to $31.04 and $29.69, respectively, as of June 30, 2025, compared to $29.92 and $28.56, respectively, as of March 31, 2025 and $26.99 and $25.60, respectively, as of June 30, 2024.
Completed two securitizations of $100 million and $150 million of commercial real estate loans during the second quarter of 2025.
(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've achieved another record–breaking quarter, setting a new high for earnings per share in the second quarter. This marks a 15.4% increase in Net Interest Income from the sequential first quarter and a 27.1% increase from the second quarter of 2024.
"Since Third Coast's IPO in November 2021, we have consistently delivered exceptional performance and sustained value creation. Total assets have grown by 98% from $2.49 billion in December 2021 to $4.94 billion today. In parallel, we've improved our efficiency ratio by an impressive 25%, moving from 74.43% in 2021 to 55.45% this quarter—a clear indicator of operational discipline. Additionally, our return on assets has increased 150% in this short period of time, climbing from 0.55% in 2021 to 1.38% in the current quarter, another milestone that underscores the steep and steady trajectory of our profitability.
"With a team that continues to execute at a high level and a track record of outperforming our peers, we believe Third Coast is well positioned to remain in the top tier of bank performers. Backed by a strong Texas-based franchise and a scalable platform—demonstrated by our successful securitizations this quarter—Third Coast intends to thrive in a consolidating industry while continuing to attract long-term investors."
Operating Results
Net Income and Earnings Per Share
Net income totaled $16.7 million for the second quarter of 2025, compared to $13.6 million for the first quarter of 2025 and $10.8 million for the second quarter of 2024. Net income available to common shareholders totaled $15.6 million for the second quarter of 2025, compared to $12.4 million for the first quarter of 2025 and $9.6 million for the second quarter of 2024. The quarter-over-quarter increase was primarily due to an increase in net interest income, resulting from an increase in loans, a portion of which were securitized, and the purchase of associated securities resulted in an increase in investment yields during the second 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 June 30, 2025 and March 31, 2025.
Basic and diluted earnings per share were $1.12 per share and $0.96 per share, respectively, in the second quarter of 2025, compared to $0.90 per share and $0.78 per share, respectively, in the first quarter of 2025 and $0.70 per share and $0.63 per share, respectively, in the second quarter of 2024.
Net Interest Margin and Net Interest Income
The net interest margin for the second quarter of 2025 was 4.22%, compared to 3.80% for the first quarter of 2025 and 3.62% for the second quarter of 2024. The yield on loans for the second quarter of 2025 was 7.95%, compared to 7.45% for the first quarter of 2025 and 6.07% for the second quarter of 2024. The cost of interest-bearing deposits for the second quarter of 2025 was 4.00%, compared to 4.02% for the first quarter of 2025 and 4.76% for the second quarter of 2024.
Net interest income totaled $49.4 million for the second quarter of 2025, an increase of 15.4% from $42.8 million for the first quarter of 2025 and an increase of 27.1% from $38.9 million for the second quarter of 2024. Interest income totaled $88.7 million for the second quarter of 2025, an increase of 9.8% from $80.8 million for the first quarter of 2025 and an increase of 9.2% from $81.2 million for the second quarter of 2024. The quarter-over-quarter increase in interest income resulted from an increase in loans, a portion of which were securitized, and the purchase of associated securities resulted in an increase in investment yields during the second quarter of 2025. Interest expense was $39.3 million for the second quarter of 2025, an increase of $1.3 million, or 3.5%, from $38.0 million for the first quarter of 2025 and a decrease of $3.1 million, or 7.3%, from $42.4 million for the second quarter of 2024.
Noninterest Income and Noninterest Expense
Noninterest income totaled $2.7 million for the second quarter of 2025, compared to $3.1 million for the first quarter of 2025 and $2.9 million for the second quarter of 2024. The decrease in other noninterest income was primarily due to changes in the first quarter valuation estimates of other real estate owned during the second quarter of 2025.
Noninterest expense increased to $28.8 million for the second quarter of 2025, compared to $28.1 million for the first quarter of 2025 and $25.6 million for the second quarter of 2024. The quarter-over-quarter increase in noninterest expense was primarily due to increased legal and professional expenses related to the securitization of loans and increased other expenses due to higher letter of credit costs during the second quarter of 2025. At June 30, 2025, the number of employees was 388, compared to 383 at March 31, 2025.
The efficiency ratio was 55.45% for the second quarter of 2025, compared to 61.23% for the first quarter of 2025 and 61.39% for the second quarter of 2024.
Balance Sheet Highlights
Loan Portfolio and Composition
For the quarter ended June 30, 2025, gross loans increased to $4.08 billion, an increase of $91.7 million, or 2.3%, from $3.99 billion as of March 31, 2025, and an increase of $321.6 million, or 8.6%, from $3.76 billion as of June 30, 2024. Commercial and industrial loans accounted for the majority of the loan growth for the second quarter of 2025, offset by slight decreases in real estate loans from the first quarter of 2025.
Asset Quality
Nonperforming loans at June 30, 2025 were $20.1 million, compared to $18.6 million at March 31, 2025 and $24.4 million at June 30, 2024. As of June 30, 2025, the nonperforming loans to total loans ratio was 0.49%, compared to 0.47% as of March 31, 2025 and 0.65% as of June 30, 2024. The increase in nonperforming loans during the second quarter of 2025 was primarily due to several factors. Loans greater than 90 days past due and still accruing increased by $5.2 million, primarily due to one commercial loan with a net book value of $4.2 million. This increase was partially offset by a decline in nonaccrual loans of $3.7 million, which was primarily attributed to the payoff of a $2.0 million loan and approximately $800,000 in loans placed back on accrual.
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 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 increase in the provision for credit loss recorded in the second quarter of 2025 compared to the first quarter of 2025 was primarily due to the charge-off of a factoring receivable facility.
The Company recorded net charge-offs of $2.4 million and $1.8 million for the three months ended June 30, 2025 and June 30, 2024, respectively.
Deposits and Composition
Deposits totaled $4.28 billion as of June 30, 2025, an increase of 0.8% from $4.25 billion as of March 31, 2025, and an increase of 11.0% from $3.86 billion as of June 30, 2024. Noninterest-bearing demand deposits decreased from $448.5 million as of March 31, 2025, to $441.0 million as of June 30, 2025 and represented 10.3% of total deposits as of June 30, 2025, compared to 10.6% of total deposits as of March 31, 2025. As of June 30, 2025, time deposits increased $130.7 million, or 20.1%, partially offset by a decrease in interest-bearing demand deposits of $89.1 million, or 2.9%, and a decrease in savings accounts of $1.7 million, or 6.7%, respectively, from March 31, 2025.
The average cost of deposits was 3.59% for the second quarter of 2025, representing a 1-basis point decrease from the first quarter of 2025 and a 63-basis point decrease from the second 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 second quarter results, which will be broadcast live over the Internet, on Thursday, July 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 July 31, 2025, and may be accessed by dialing 201-612-7415 and using passcode 13752287#. 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)
June 30
March 31
December 31
September 30
June 30
ASSETS
Cash and cash equivalents:
Cash and due from banks
$
113,141
$
218,990
$
371,157
$
258,191
$
241,809
Federal funds sold
5,815
110,379
50,045
12,265
12,088
Total cash and cash equivalents
118,956
329,369
421,202
270,456
253,897
Interest bearing time deposits in other banks
262
359
356
353
350
Investment securities available-for-sale
355,753
397,442
384,025
292,104
286,167
Investment securities held to maturity
206,065
-
-
-
-
Loans held for investment
4,079,736
3,988,039
3,966,425
3,889,831
3,758,159
Less: allowance for credit losses
(40,035)
(40,456)
(40,304)
(39,683)
(38,211)
Loans held for investment, net
4,039,701
3,947,583
3,926,121
3,850,148
3,719,948
Accrued interest receivable
27,736
26,752
25,820
26,111
27,518
Premises and equipment, net
24,908
25,669
26,230
26,696
27,626
Bank-owned life insurance
74,761
74,018
68,341
67,679
67,030
Non-marketable securities, at cost
18,761
15,994
15,980
24,328
16,147
Deferred tax asset, net
8,646
9,176
11,445
8,654
8,972
Derivative assets
3,059
3,052
6,479
5,786
7,799
Right-of-use assets - operating leases
18,769
19,370
19,863
20,397
20,944
Goodwill and other intangible assets
18,761
18,801
18,841
18,882
18,922
Other assets
27,633
29,404
17,743
16,176
18,799
Total assets
$
4,943,771
$
4,896,989
$
4,942,446
$
4,627,770
$
4,474,119
LIABILITIES
Deposits:
Noninterest bearing
$
440,964
$
448,542
$
602,082
$
489,822
$
464,498
Interest bearing
3,839,905
3,800,001
3,708,416
3,504,616
3,391,093
Total deposits
4,280,869
4,248,543
4,310,498
3,994,438
3,855,591
Accrued interest payable
6,691
7,044
6,281
7,283
5,668
Derivative liabilities
3,779
3,527
8,660
6,874
7,626
Lease liability - operating leases
19,835
20,425
20,900
21,412
21,919
Other liabilities
24,745
25,979
23,754
34,632
30,786
Line of credit - Senior Debt
30,875
30,875
30,875
31,875
36,875
Note payable - Subordinated Debentures, net
80,862
80,810
80,759
80,708
80,656
Total liabilities
4,447,656
4,417,203
4,481,727
4,177,222
4,039,121
SHAREHOLDERS' EQUITY
Series A Convertible Non-Cumulative Preferred Stock
69
69
69
69
69
Series B Convertible Perpetual Preferred Stock
-
-
-
-
-
Common stock
13,930
13,904
13,848
13,746
13,744
Common stock - non-voting
-
-
-
-
-
Additional paid-in capital
322,972
322,456
321,696
320,871
320,496
Retained earnings
149,677
134,115
121,697
109,160
97,583
Accumulated other comprehensive income
10,566
10,341
4,508
7,801
4,205
Treasury stock, at cost
(1,099)
(1,099)
(1,099)
(1,099)
(1,099)
Total shareholders' equity
496,115
479,786
460,719
450,548
434,998
Total liabilities and shareholders' equity
$
4,943,771
$
4,896,989
$
4,942,446
$
4,627,770
$
4,474,119
Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)
Three Months Ended
Six Months Ended
2025
2024
2025
2024
(Dollars in thousands, except per share data)
June 30
March 31
December31
September 30
June 30
June 30
June 30
INTEREST INCOME:
Loans, including fees
$
79,706
$
73,087
$
76,017
$
75,468
$
73,103
$
152,793
$
143,774
Investment securities available-for-sale
5,505
5,693
4,939
4,532
4,491
11,198
7,584
Investment securities held-to-maturity
1,607
-
-
-
-
1,607
-
Federal funds sold and other
1,844
1,986
4,580
2,719
3,631
3,830
8,743
Total interest income
88,662
80,766
85,536
82,719
81,225
169,428
160,101
INTEREST EXPENSE:
Deposit accounts
37,535
36,226
40,233
40,407
40,410
73,761
79,108
FHLB advances and other borrowings
1,753
1,743
1,865
1,929
1,957
3,496
4,056
Total interest expense
39,288
37,969
42,098
42,336
42,367
77,257
83,164
Net interest income
49,374
42,797
43,438
40,383
38,858
92,171
76,937
Provision for credit losses
2,130
450
1,156
1,085
1,900
2,580
3,460
Net interest income after credit loss expense
47,244
42,347
42,282
39,298
36,958
89,591
73,477
NONINTEREST INCOME:
Service charges and fees
2,125
2,277
1,772
2,143
1,515
4,402
3,020
Earnings on bank-owned life insurance
743
677
662
649
587
1,420
1,169
(Loss) gain on sale of investment securities available-for-sale
(110)
(228)
196
(480)
123
(338)
280
Gain on sale of SBA loans
44
30
-
-
-
74
30
Other
(152)
351
243
205
663
199
732
Total noninterest income
2,650
3,107
2,873
2,517
2,888
5,757
5,231
NONINTEREST EXPENSE:
Salaries and employee benefits
18,179
18,341
17,018
15,679
15,917
36,520
