Third Coast Bancshares (TCBX) Q1 2026 earnings summary

Executive summary

• Completed the acquisition of Keystone Bancshares on February 1, 2026, adding $812M in loans, $1B in assets, and $844.2M in deposits, expanding presence in Central Texas, Austin, and Ballinger.

• Total assets grew to $6.58B, loans to $5.25B, and deposits to $5.72B as of March 31, 2026.

• Net income for Q1 2026 was $16.4M, up 20.5% year-over-year, but down from $17.9M in Q4 2025, impacted by $3.3M in merger-related expenses.

• Strategic investments in leadership and new banking divisions, including asset-based lending, public funds, and correspondent banking, are expected to drive future organic growth.

• Integration of Keystone is progressing well, with core conversion scheduled for July and most cost savings expected in the second half of the year.

Financial highlights

• Net interest income rose to $53.6M, up 25.3% year-over-year and 2.8% sequentially, driven by higher earning assets post-merger.

• Net interest margin declined to 3.67% from 3.80% in Q1 2025 and 4.10% in Q4 2025.

• Noninterest income increased 29.8% to $4.0M, mainly from higher service charges and lower securities losses.

• Noninterest expense rose to $38.1M, up 35.6%, reflecting higher salaries, merger-related costs, and increased headcount.

• Diluted EPS was $0.88; basic EPS $1.03; excluding merger expenses, EPS would have been $1.02.

Outlook and guidance

• Net interest margin expected to stabilize around 3.75% in the near term, with potential upside from loan fees and possible securitizations.

• Loan growth outlook raised to $75M–$125M per quarter, supported by new hires and robust pipelines.

• Most expense savings from the Keystone integration will be realized in Q3 and Q4, with full run-rate by year-end.

• Fee income projected in the $4–$4.5M range per quarter.

• Management expects continued growth from expanded market presence and integration of Keystone, focusing on commercial banking solutions for small and medium-sized businesses in Texas.