THIRD COAST BANCSHARES, INC. REPORTS 2024 SECOND QUARTER FINANCIAL RESULTS

Record EPS of $0.70 and Diluted EPS of $0.63 in Latest Quarterly Results

HOUSTON, July 24, 2024 /PRNewswire/ -- Third Coast Bancshares, Inc. (NASDAQ: TCBX) (the "Company," "Third Coast," "we," "us," or "our"), the bank holding company for Third Coast Bank, today reported its 2024 second quarter financial results.

2024 Second Quarter Financial and Operational Highlights

Net income for the second quarter of 2024 totaled $10.8 million, or $0.70 and $0.63 per basic and diluted share, respectively, compared to $10.4 million, or $0.68 and $0.61 per basic and diluted share, respectively, for the first quarter of 2024.
Return on average assets of 0.97% annualized for the second quarter of 2024 compared to 0.95% annualized for the first quarter of 2024 and 0.96% annualized for the second quarter of 2023.
Efficiency Ratio continues to improve from 64.11% for the first quarter of 2024 to 61.39% for the second quarter of 2024.
Gross loans grew $12.0 million to $3.76 billion as of June 30, 2024, 0.3% more than the $3.75 billion reported as of March 31, 2024.
Noninterest-bearing demand deposits increased $40.5 million, or 9.5%, from $424.0 million as of March 31, 2024, to $464.5 million as of June 30, 2024 and represented 12.0% of total deposits as of June 30, 2024, compared to 10.5% of total deposits as of March 31, 2024.
Book value per share and tangible book value per share⁽¹⁾ increased to $26.99 and $25.60, respectively, as of June 30, 2024, compared to $26.18 and $24.79, respectively, as of March 31, 2024.
Opened our 17^th and 18^th branch locations during the second quarter of 2024 with de novo branches located in Austin, Texas and The Woodlands, Texas.

"Third Coast's second quarter performance highlights our commitment to improving profitability through operational efficiencies," said Bart Caraway, Chairman, President, and CEO of Third Coast. "The Company's focus on sustainable growth and operational excellence has played a key role in driving positive results. Through strategic process refinement and the adoption of advanced technologies, we have streamlined operations, optimized resource management, and fostered a stronger team dynamic. These efforts have resulted in improved metrics, including increased margins, stabilized expenses, and a more favorable deposit mix, as reported in the efficiency ratio and pre-provision net revenue results.

"Moving forward, we remain dedicated to investing in internal initiatives that drive long-term value creation. We appreciate the continued support from our shareholders and are determined to build upon this positive momentum through 2024. Together, we will deliver sustainable growth, improve efficiencies, and strive towards even greater profitability," Mr. Caraway concluded.

(1)	Non-GAAP financial measure. Please refer to the table titled "GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures" at the end of this press release for a reconciliation of these non-GAAP financial measures.

Operating Results

Net Income and Earnings Per Share

Net income totaled $10.8 million for the second quarter of 2024, compared to $10.4 million for the first quarter of 2024 and $8.9 million for the second quarter of 2023. Net income available to common shareholders totaled $9.6 million for the second quarter of 2024, compared to $9.2 million for the first quarter of 2024 and $7.7 million for the second quarter of 2023. The quarter-over-quarter increase was primarily due to an increase in net interest income resulting from higher rates on loans, an increase in noninterest income, and continued savings on noninterest expenses related to the implementation of cost reduction initiatives in prior quarters. The increase in net income was partially offset by a slightly higher provision for credit losses for the quarter. 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, 2024 and March 31, 2024. Basic and diluted earnings per share were $0.70 per share and $0.63 per share, respectively, in the second quarter of 2024 compared to $0.68 per share and $0.61 per share, respectively, in the first quarter of 2024 and $0.57 per share and $0.53 per share, respectively, in the second quarter of 2023.

Net Interest Margin and Net Interest Income

The net interest margin for the second quarter of 2024 was 3.62%, compared to 3.60% for the first quarter of 2024 and 3.82% for the second quarter of 2023. The yield on loans for the second quarter of 2024 was 7.86%, compared to 7.75% for the first quarter of 2024 and 7.29% for the second quarter of 2023.

Net interest income totaled $38.9 million for the second quarter of 2024, an increase of 2.0% from $38.1 million for the first quarter of 2024 and an increase of 14.0% from $34.1 million for the second quarter of 2023. Interest income totaled $81.2 million for the second quarter of 2024, an increase of 3.0% from $78.9 million for the first quarter of 2024 and an increase of 29.5% from $62.7 million for the second quarter of 2023. Interest and fees on loans increased $2.4 million, or 3.4%, compared to the first quarter of 2024, and increased $13.8 million, or 23.3%, compared to the second quarter of 2023. Interest expense was $42.4 million for the second quarter of 2024, an increase of $1.6 million, or 3.8%, from $40.8 million for the first quarter of 2024 and an increase of $13.8 million, or 48.0%, from $28.6 million for the second quarter of 2023.

Noninterest Income and Noninterest Expense

Noninterest income totaled $2.9 million for the second quarter of 2024, compared to $2.3 million for the first quarter of 2024 and $2.3 million for the second quarter of 2023. The sequential increase in noninterest income was primarily due to the increase in Small Business Investment Company income.

Noninterest expense totaled $25.6 million for the second quarter of 2024, down from $25.9 million for the first quarter of 2024 and up from $23.8 million for the second quarter of 2023. The decrease from the first quarter of 2024 was primarily attributed to decreased salary and employee benefit expenses resulting from operating efficiencies and continued cost reduction measures.

The efficiency ratio was 61.39% for the second quarter of 2024, compared to 64.11% for the first quarter of 2024 and 65.52% for the second quarter of 2023.

Balance Sheet Highlights

Loan Portfolio and Composition

For the quarter ended June 30, 2024, gross loans increased to $3.76 billion, a slight increase of $12.0 million, or 0.3%, from $3.75 billion as of March 31, 2024, and an increase of $423.9 million, or 12.7%, from $3.33 billion as of June 30, 2023. Commercial and industrial and real estate loans accounted for most of the loan growth for the second quarter of 2024, with commercial and industrial loans increasing $11.1 million and real estate loans increasing $40.0 million from March 31, 2024. The increases were offset slightly by a decrease in municipal loans of $39.0 million from March 31, 2024.

Asset Quality

Nonperforming loans were $24.4 million at June 30, 2024, compared to $21.7 million at March 31, 2024, and $10.0 million at June 30, 2023. As of June 30, 2024, the nonperforming loans to total loans ratio was 0.65%, compared to 0.58% as of March 31, 2024, and 0.30% as of June 30, 2023. The net increase in nonaccrual loans from quarter-to-quarter of $5.8 million was primarily the result of one commercial real estate loan relationship consisting of five loans totaling $7.9 million being placed on nonaccrual during the second quarter of 2024. The loan to value on the real estate supporting this relationship is 69% and management does not anticipate a loss on these loans. In addition, the increase in nonaccrual loans was partially offset by nonaccrual loan charge-offs of $2.1 million during the quarter. The decrease in loans over 90 days and still accruing was primarily the result of a $2.9 million commercial real estate loan that matured and was pending renewal at the end of the first quarter which was renewed during the second quarter.

The provision for credit loss recorded for the second quarter of 2024 was $1.9 million and the allowance for credit losses of $38.2 million represented 1.02% of the $3.76 billion in gross loans outstanding as of June 30, 2024.

The Company recorded net charge-offs of $1.8 million and $72,000 for the three months ended June 30, 2024 and June 30, 2023, respectively.

Deposits and Composition

Deposits totaled $3.86 billion as of June 30, 2024, a decrease of 4.8% from $4.05 billion as of March 31, 2024, and an increase of 13.1% from $3.41 billion as of June 30, 2023. Noninterest-bearing demand deposits increased from $424.0 million as of March 31, 2024, to $464.5 million as of June 30, 2024 and represented 12.0% of total deposits as of June 30, 2024, compared to 10.5% of total deposits as of March 31, 2024. As of June 30, 2024, interest-bearing demand deposits decreased $218.1 million, or 7.1%, time deposits decreased $9.9 million, or 2.0%, and savings accounts decreased $7.6 million, or 18.6%, respectively, from March 31, 2024.

The average cost of deposits was 4.22% for the second quarter of 2024, representing a 13-basis point increase from the first quarter of 2024 and a 94-basis point increase from the second quarter of 2023. The year-over-year increase was due to interest-bearing demand deposit growth and the increase in rates paid on interest-bearing demand deposits.

Earnings Conference Call

Third Coast has scheduled a conference call to discuss its 2024 second quarter results, which will be broadcast live over the Internet, on Thursday, July 25, 2024, 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 August 1, 2024, and may be accessed by dialing 201-612-7415 and using passcode 13746566#. 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 18 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; 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, 2023 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.

Contact:
Ken Dennard / Natalie Hairston
Dennard Lascar Investor Relations
(713) 529-6600
TCBX@dennardlascar.com

Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)

	2024				2023
(Dollars in thousands)	June 30		March 31		December 31		September 30		June 30

ASSETS
Cash and cash equivalents:
Cash and due from banks	$	241,809	$	367,831	$	296,926	$	142,122	$	244,813
Federal funds sold		12,088		130,429		114,919		144,408		23,206
Total cash and cash equivalents		253,897		498,260		411,845		286,530		268,019

Interest bearing time deposits in other banks		350		-		-		-		-
Investment securities available-for-sale		286,167		246,291		178,087		201,035		194,467
Loans held for investment		3,758,159		3,746,178		3,638,788		3,559,953		3,334,277
Less: allowance for credit losses		(38,211)		(38,140)		(37,022)		(38,067)		(37,243)
Loans, net		3,719,948		3,708,038		3,601,766		3,521,886		3,297,034
Accrued interest receivable		27,518		25,769		23,120		22,821		19,579
Premises and equipment, net		27,626		26,844		28,554		29,010		28,720
Bank-owned life insurance		67,030		66,443		65,861		65,303		64,762
Non-marketable securities, at cost		16,147		16,095		16,041		15,799		20,687
Deferred tax asset, net		8,972		8,712		9,227		8,335		7,808
Derivative assets		7,799		11,015		8,828		10,889		9,372
Right-of-use assets - operating leases		20,944		20,729		21,439		21,192		21,778
Goodwill and other intangible assets		18,922		18,963		19,003		19,043		19,084
Other assets		18,799		13,244		12,303		13,949		12,172
Total assets	$	4,474,119	$	4,660,403	$	4,396,074	$	4,215,792	$	3,963,482

LIABILITIES
Deposits:
Noninterest bearing	$	464,498	$	424,019	$	459,553	$	500,187	$	529,474
Interest bearing		3,391,093		3,626,653		3,343,595		3,146,635		2,878,807
Total deposits		3,855,591		4,050,672		3,803,148		3,646,822		3,408,281

Accrued interest payable		5,668		3,927		4,794		4,318		3,522
Derivative liabilities		7,626		8,253		10,687		10,519		9,177
Lease liability - operating leases		21,919		21,647		22,280		21,958		22,439
Other liabilities		30,786		27,806		23,763		15,467		12,792
Line of credit - Senior Debt		36,875		43,875		38,875		35,875		30,875
Note payable - Subordinated Debentures, net		80,656		80,605		80,553		80,502		80,451
Total liabilities		4,039,121		4,236,785		3,984,100		3,815,461		3,567,537

SHAREHOLDERS' EQUITY
Series A Convertible Non-Cumulative Preferred Stock		69		69		69		69		69
Series B Convertible Perpetual Preferred Stock		-		-		-		-		-
Common stock		13,744		13,731		13,683		13,679		13,688
Common stock - non-voting		-		-		-		-		-
Additional paid-in capital		320,496		320,077		319,613		319,134		318,769
Retained earnings		97,582		87,971		78,775		70,283		65,889
Accumulated other comprehensive income (loss)		4,206		2,869		933		(1,735)		(1,371)
Treasury stock, at cost		(1,099)		(1,099)		(1,099)		(1,099)		(1,099)
Total shareholders' equity		434,998		423,618		411,974		400,331		395,945
Total liabilities and shareholders' equity	$	4,474,119	$	4,660,403	$	4,396,074	$	4,215,792	$	3,963,482

Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)

	Three Months Ended										Six Months Ended
	2024				2023						2024		2023
(Dollars in thousands, except per share data)	June 30		March 31		December 31		September 30		June 30		June 30		June 30

INTEREST INCOME:
Loans, including fees	$	73,103	$	70,671	$	70,325	$	65,380	$	59,295	$	143,774	$	113,206
Investment securities available-for-sale		4,491		3,093		2,746		1,990		2,029		7,584		3,577
Federal funds sold and other		3,631		5,112		3,996		2,015		1,389		8,743		3,309
Total interest income		81,225		78,876		77,067		69,385		62,713		160,101		120,092

INTEREST EXPENSE:
Deposit accounts		40,410		38,698		37,671		30,345		24,936		79,108		47,028
FHLB advances and other borrowings		1,957		2,099		2,065		3,772		3,681		4,056		6,138
Total interest expense		42,367		40,797		39,736		34,117		28,617		83,164		53,166

Net interest income		38,858		38,079		37,331		35,268		34,096		76,937		66,926

Provision for credit losses		1,900		1,560		1,100		2,620		1,400		3,460		2,600

Net interest income after credit loss expense		36,958		36,519		36,231		32,648		32,696		73,477		64,326

NONINTEREST INCOME:
Service charges and fees		1,515		1,505		850		884		720		3,020		1,499
Earnings on bank-owned life insurance		587		582		559		541		526		1,169		1,001
Gain on sale of investment securities available-for-sale		123		157		21		364		-		280		97
Gain on sale of SBA loans		-		30		326		114		-		30		-
Derivative fees		28		66		358		159		247		94		246
Other		635		3		43		(196)		787		638		1,339
Total noninterest income		2,888		2,343		2,157		1,866		2,280		5,231		4,182

NONINTEREST EXPENSE:
Salaries and employee benefits		15,917		16,502		16,119		17,353		15,033		32,419		28,745
Occupancy and equipment expense		3,146		3,045		2,875		2,925		2,852		6,191		5,485
Legal and professional		1,621		1,385		2,305		2,001		1,547		3,006		3,477
Data processing and network expense		1,046		1,418		987		1,284		1,261		2,464		2,464
Regulatory assessments		1,005		980		942		532		458		1,985		1,124
Advertising and marketing		406		355		614		515		812		761		1,498
Software purchases and maintenance		828		817		839		729		455		1,645		807
Loan operations		262		226		134		272		302		488		267
Telephone and communications		141		134		125		117		129		275		268
Other		1,257		1,052		1,474		1,777		986		2,309		1,744
Total noninterest expense		25,629		25,914		26,414		27,505		23,835		51,543		45,879

NET INCOME BEFORE INCOME TAX EXPENSE		14,217		12,948		11,974		7,009		11,141		27,165		22,629

Income tax expense		3,421		2,581		2,285		1,431		2,250		6,002		4,495

NET INCOME		10,796		10,367		9,689		5,578		8,891		21,163		18,134

Preferred stock dividends declared		1,184		1,171		1,197		1,184		1,184		2,355		2,355

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	9,612	$	9,196	$	8,492	$	4,394	$	7,707	$	18,808	$	15,779

EARNINGS PER COMMON SHARE:
Basic earnings per share	$	0.70	$	0.68	$	0.62	$	0.32	$	0.57	$	1.38	$	1.16
Diluted earnings per share	$	0.63	$	0.61	$	0.57	$	0.32	$	0.53	$	1.25	$	1.08

Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)

	Three Months Ended															Six Months Ended
	2024						2023									2024			2023
(Dollars in thousands, except share and per share data)	June 30			March 31			December 31			September 30			June 30			June 30			June 30

Earnings per share, basic	$	0.70		$	0.68		$	0.62		$	0.32		$	0.57		$	1.38		$	1.16
Earnings per share, diluted	$	0.63		$	0.61		$	0.57		$	0.32		$	0.53		$	1.25		$	1.08
Dividends on common stock	$	-		$	-		$	-		$	-		$	-		$	-		$	-
Dividends on Series A Convertible Non-Cumulative Preferred Stock	$	17.06		$	16.88		$	17.25		$	17.06		$	17.06		$	33.94		$	33.94

Return on average assets ^(A)		0.97	%		0.95	%		0.90	%		0.56	%		0.96	%		0.96	%		0.99	%
Return on average common equity ^(A)		10.53	%		10.44	%		9.86	%		5.19	%		9.44	%		10.48	%		9.85	%
Return on average tangible common equity ^(A) (B)		11.10	%		11.03	%		10.44	%		5.50	%		10.02	%		11.06	%		10.47	%
Net interest margin ^{(A) (C)}		3.62	%		3.60	%		3.61	%		3.71	%		3.82	%		3.61	%		3.80	%
Efficiency ratio ^(D)		61.39	%		64.11	%		66.89	%		74.07	%		65.52	%		62.73	%		64.52	%

Capital Ratios
Third Coast Bancshares, Inc. (consolidated):
Total common equity to total assets		8.24	%		7.67	%		7.86	%		7.93	%		8.32	%		8.24	%		8.32	%
Tangible common equity to tangible assets ^(B)		7.85	%		7.29	%		7.46	%		7.51	%		7.88	%		7.85	%		7.88	%
Common equity tier 1 (to risk weighted assets)		8.29	%		7.97	%		8.06	%		8.01	%		7.75	%		8.29	%		7.75	%
Tier 1 capital (to risk weighted assets)		9.88	%		9.54	%		9.70	%		9.68	%		9.39	%		9.88	%		9.39	%
Total capital (to risk weighted assets)		12.78	%		12.41	%		12.66	%		12.72	%		12.31	%		12.78	%		12.31	%
Tier 1 capital (to average assets)		9.24	%		9.15	%		9.23	%		9.79	%		10.17	%		9.24	%		10.17	%

Third Coast Bank:
Common equity tier 1 (to risk weighted assets)		12.52	%		12.32	%		12.52	%		12.48	%		12.06	%		12.52	%		12.06	%
Tier 1 capital (to risk weighted assets)		12.52	%		12.32	%		12.52	%		12.48	%		12.06	%		12.52	%		12.06	%
Total capital (to risk weighted assets)		13.49	%		13.28	%		13.49	%		13.49	%		12.99	%		13.49	%		12.99	%
Tier 1 capital (to average assets)		11.71	%		11.81	%		11.91	%		12.62	%		13.06	%		11.71	%		13.06	%

Other Data
Weighted average shares:
Basic		13,657,223			13,606,256			13,603,149			13,608,718			13,588,747			13,631,740			13,560,802
Diluted		17,018,680			16,936,003			16,890,381			13,873,187			16,855,822			16,977,342			16,828,974
Period end shares outstanding		13,665,505			13,652,888			13,604,665			13,600,211			13,609,697			13,665,505			13,609,697
Book value per share	$	26.99		$	26.18		$	25.41		$	24.57		$	24.23		$	26.99		$	24.23
Tangible book value per share ^(B)	$	25.60		$	24.79		$	24.02		$	23.17		$	22.82		$	25.60		$	22.82

___________

(A) Interim periods annualized.

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

(D) Represents total noninterest expense divided by the sum of net interest income plus noninterest income. Taxes and provision for credit losses are not part of this calculation.

Third Coast Bancshares, Inc. and Subsidiary
Financial Highlights
(unaudited)

	Three Months Ended
	June 30, 2024					March 31, 2024					June 30, 2023
(Dollars in thousands)	Average Outstanding Balance		Interest Earned/ Paid⁽³⁾		Average Yield/ Rate⁽⁴⁾	Average Outstanding Balance		Interest Earned/ Paid⁽³⁾		Average Yield/ Rate⁽⁴⁾	Average Outstanding Balance		Interest Earned/ Paid⁽³⁾		Average Yield/ Rate⁽⁴⁾

Assets
Interest-earnings assets:
Investment securities	$	297,653	$	4,491	6.07 %	$	202,277	$	3,093	6.15 %	$	208,980	$	2,029	3.89 %
Loans, gross		3,740,544		73,103	7.86 %		3,665,378		70,671	7.75 %		3,262,804		59,295	7.29 %
Federal funds sold and other interest-earning assets		277,144		3,631	5.27 %		383,929		5,112	5.36 %		112,239		1,389	4.96 %
Total interest-earning assets		4,315,341		81,225	7.57 %		4,251,584		78,876	7.46 %		3,584,023		62,713	7.02 %
Less allowance for loan losses		(38,429)					(37,278)					(36,381)
Total interest-earning assets, net of allowance		4,276,912					4,214,306					3,547,642
Noninterest-earning assets		195,193					193,070					185,705
Total assets	$	4,472,105				$	4,407,376				$	3,733,347

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits	$	3,411,592	$	40,410	4.76 %	$	3,346,847	$	38,698	4.65 %	$	2,581,560	$	24,936	3.87 %
Note payable and line of credit		121,275		1,957	6.49 %		120,884		2,099	6.98 %		111,301		1,858	6.70 %
FHLB advances	—		—		—	—		—		—		135,826		1,823	5.38 %
Total interest-bearing liabilities		3,532,867		42,367	4.82 %		3,467,731		40,797	4.73 %		2,828,687		28,617	4.06 %
Noninterest-bearing deposits		442,672					457,054					470,564
Other liabilities		63,056					61,945					40,323
Total liabilities		4,038,595					3,986,730					3,339,574
Shareholders' equity		433,510					420,646					393,773
Total liabilities and shareholders' equity	$	4,472,105				$	4,407,376				$	3,733,347
Net interest income			$	38,858				$	38,079				$	34,096
Net interest spread ⁽¹⁾					2.75 %					2.73 %					2.96 %
Net interest margin ⁽²⁾					3.62 %					3.60 %					3.82 %

___________

(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)

	Six Months Ended
	June 30, 2024					June 30, 2023
(Dollars in thousands)	Average Outstanding Balance		Interest Earned/ Paid⁽³⁾		Average Yield/ Rate⁽⁴⁾	Average Outstanding Balance		Interest Earned/ Paid⁽³⁾		Average Yield/ Rate⁽⁴⁾

Assets
Interest-earnings assets:
Investment securities	$	249,965	$	7,584	6.10 %	$	193,674	$	3,577	3.72 %
Loans, gross		3,702,960		143,774	7.81 %		3,217,070		113,206	7.10 %
Federal funds sold and other interest-earning assets		330,536		8,743	5.32 %		139,813		3,309	4.77 %
Total interest-earning assets		4,283,461		160,101	7.52 %		3,550,557		120,092	6.82 %
Less allowance for loan losses		(37,853)					(35,634)
Total interest-earning assets, net of allowance		4,245,608					3,514,923
Noninterest-earning assets		194,133					184,294
Total assets	$	4,439,741				$	3,699,217

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits	$	3,379,219	$	79,108	4.71 %	$	2,588,616	$	47,028	3.66 %
Note payable and line of credit		121,080		4,056	6.74 %		111,275		3,672	6.65 %
FHLB advances and other	—		—		—		94,544		2,466	5.26 %
Total interest-bearing liabilities		3,500,299		83,164	4.78 %		2,794,435		53,166	3.84 %
Noninterest-bearing deposits		449,863					474,115
Other liabilities		62,501					41,359
Total liabilities		4,012,663					3,309,909
Shareholders' equity		427,078					389,308
Total liabilities and shareholders' equity	$	4,439,741				$	3,699,217
Net interest income			$	76,937				$	66,926
Net interest spread ⁽¹⁾					2.74 %					2.98 %
Net interest margin ⁽²⁾					3.61 %					3.80 %

___________

(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
	2024						2023
(Dollars in thousands)	June 30			March 31			December 31			September 30			June 30

Period-end Loan Portfolio:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied	$	499,941		$	510,266		$	520,822		$	517,917		$	513,934
Non-farm non-residential non-owner occupied		612,268			598,311			586,626			566,973			547,120
Residential		349,461			345,890			342,589			326,354			310,842
Construction, development & other		756,646			725,176			693,553			655,822			595,601
Farmland		31,049			29,706			30,396			30,646			24,219
Commercial & industrial		1,361,401			1,350,289			1,263,077			1,288,320			1,164,624
Consumer		2,216			2,382			2,555			2,665			2,891
Municipal and other		145,177			184,158			199,170			171,256			175,046
Total loans	$	3,758,159		$	3,746,178		$	3,638,788		$	3,559,953		$	3,334,277

Asset Quality:
Nonaccrual loans	$	23,910		$	18,130		$	16,649		$	13,963		$	9,968
Loans > 90 days and still accruing		507			3,614			670			2,442			-
Total nonperforming loans		24,417			21,744			17,319			16,405			9,968
Other real estate owned		-			-			-			-			-
Total nonperforming assets	$	24,417		$	21,744		$	17,319		$	16,405		$	9,968

QTD Net charge-offs (recoveries)	$	1,829		$	742		$	1,505		$	24		$	72

Nonaccrual loans:
Real estate loans:
Commercial real estate:
Non-farm non-residential owner occupied	$	10,051		$	2,369		$	1,211		$	978		$	832
Non-farm non-residential non-owner occupied		74			1,225			1,235			1,235			1,417
Residential		2,767			2,837			2,938			3,058			494
Construction, development & other		301			406			247			567			36
Commercial & industrial		10,717			11,293			11,018			8,125			7,189
Total nonaccrual loans	$	23,910		$	18,130		$	16,649		$	13,963		$	9,968

Asset Quality Ratios:
Nonperforming assets to total assets		0.55	%		0.47	%		0.39	%		0.39	%		0.25	%
Nonperforming loans to total loans		0.65	%		0.58	%		0.48	%		0.46	%		0.30	%
Allowance for credit losses to total loans		1.02	%		1.02	%		1.02	%		1.07	%		1.12	%
QTD Net charge-offs (recoveries) to average loans (annualized)		0.20	%		0.08	%		0.17	%		0.00	%		0.01	%

Third Coast Bancshares, Inc. and Subsidiary
GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures
(unaudited)

Our accounting and reporting policies conform to GAAP (generally accepted accounting principles) and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional financial measures discussed in this earnings release as being non-GAAP financial measures. Specifically, we review Tangible Common Equity, Tangible Book Value Per Share, Tangible Common Equity to Tangible Assets, and Return on Average Tangible Common Equity for internal planning and forecasting purposes. We classify a financial measure as a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are not included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios, or statistical measures calculated using exclusively financial measures calculated in accordance with GAAP.

The non-GAAP financial measures that we discuss in this earnings release should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in this earnings release may differ from that of other companies reporting measures with similar names. It is important to understand how other banking organizations calculate their financial measures with names similar to the non-GAAP financial measures we have discussed in this earnings release when comparing such non-GAAP financial measures.

Management believes the following non-GAAP financial measures assist investors in understanding the financial condition of the company:

Tangible Common Equity. The most directly comparable GAAP financial measure for tangible common equity is total shareholders' equity. We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period of tangible common equity.
Tangible Book Value Per Share. The most directly comparable GAAP financial measure for tangible book value per share is book value per share. We believe that the tangible book value per share measure is important to many investors in the marketplace who are interested in changes from period to period in book value per share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.
Tangible Common Equity to Tangible Assets. The most directly comparable GAAP financial measure for tangible common equity is total shareholders' equity, the most directly comparable GAAP financial measure for tangible assets is total assets, and the most directly comparable GAAP financial measure for tangible common equity to tangible assets is total shareholders' equity to total assets. We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period of tangible common equity to tangible assets, each exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing both total shareholders' equity and assets while not increasing our tangible common equity or tangible assets.
Return on Average Tangible Common Equity. The most directly comparable GAAP financial measure for average tangible common equity is average shareholders' equity, and the most directly comparable GAAP financial measure for return on average tangible common equity is return on average common equity. We believe that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period of return on average tangible common equity, exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing average shareholders' equity while not increasing our tangible common equity.

The calculations of these non-GAAP financial measures are as follows:

	Three Months Ended															Six Months Ended
	2024						2023									2024			2023
(Dollars in thousands, except share and per share data)	June 30			March 31			December 31			September 30			June 30			June 30			June 30

Tangible Common Equity:
Total shareholders' equity	$	434,998		$	423,618		$	411,974		$	400,331		$	395,945		$	434,998		$	395,945
Less: Preferred stock including additional paid in capital		66,225			66,225			66,225			66,225			66,225			66,225			66,225
Total common equity		368,773			357,393			345,749			334,106			329,720			368,773			329,720
Less: Goodwill and core deposit intangibles, net		18,922			18,963			19,003			19,043			19,084			18,922			19,084
Tangible common equity	$	349,851		$	338,430		$	326,746		$	315,063		$	310,636		$	349,851		$	310,636

Common shares outstanding at end of period		13,665,505			13,652,888			13,604,665			13,600,211			13,609,697			13,665,505			13,609,697

Book Value Per Share	$	26.99		$	26.18		$	25.41		$	24.57		$	24.23		$	26.99		$	24.23
Tangible Book Value Per Share	$	25.60		$	24.79		$	24.02		$	23.17		$	22.82		$	25.60		$	22.82


Tangible Assets:
Total assets	$	4,474,119		$	4,660,403		$	4,396,074		$	4,215,792		$	3,963,482		$	4,474,119		$	3,963,482
Adjustments: Goodwill and core deposit intangibles, net		18,922			18,963			19,003			19,043			19,084			18,922			19,084
Tangible assets	$	4,455,197		$	4,641,440		$	4,377,071		$	4,196,749		$	3,944,398		$	4,455,197		$	3,944,398

Total Common Equity to Total Assets		8.24	%		7.67	%		7.86	%		7.93	%		8.32	%		8.24	%		8.32	%
Tangible Common Equity to Tangible Assets		7.85	%		7.29	%		7.46	%		7.51	%		7.88	%		7.85	%		7.88	%


Average Tangible Common Equity:
Average shareholders' equity	$	433,510		$	420,646		$	407,972		$	402,049		$	393,773		$	427,078		$	389,308
Less: Average preferred stock including additional paid in capital		66,225			66,225			66,225			66,225			66,225			66,225			66,225
Average common equity		367,285			354,421			341,747			335,824			327,548			360,853			323,083
Less: Average goodwill and core deposit intangibles, net		18,946			18,987			19,027			19,068			19,108			18,967			19,128
Average tangible common equity	$	348,339		$	335,434		$	322,720		$	316,756		$	308,440		$	341,886		$	303,955

Net Income	$	10,796		$	10,367		$	9,689		$	5,578		$	8,891		$	21,163		$	18,134
Less: Dividends declared on preferred stock		1,184			1,171			1,197			1,184			1,184			2,355			2,355
Net Income Available to Common Shareholders	$	9,612		$	9,196		$	8,492		$	4,394		$	7,707		$	18,808		$	15,779

Return on Average Common Equity^(A)		10.53	%		10.44	%		9.86	%		5.19	%		9.44	%		10.48	%		9.85	%
Return on Average Tangible Common Equity^(A)		11.10	%		11.03	%		10.44	%		5.50	%		10.02	%		11.06	%		10.47	%

___________

(A) Interim periods annualized.

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