Third Coast Bancshares (TCBX) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $10.8 million, a 21.4% year-over-year increase, with record diluted EPS of $0.63 and return on equity of 10.5%.

• Total assets reached $4.47 billion as of June 30, 2024, up $78.0 million from year-end, driven by organic loan growth and investment securities purchases.

• Opened two new branches in Austin and The Woodlands, expanding to 18 Texas locations.

• Focused on operational efficiencies, cost reduction, and technology adoption to drive profitability and sustainable growth.

• Deposits increased 1.4% to $3.86 billion, with interest-bearing deposits comprising 88% of total deposits.

Financial highlights

• Net interest income rose to $38.9 million in Q2 2024, up 14.0% year-over-year and 2.0% sequentially.

• Net interest margin for Q2 2024 was 3.62%, down from 3.82% in Q2 2023.

• Noninterest income increased 26.7% to $2.9 million, driven by service charges, securities gains, and SBIC income.

• Noninterest expense was $25.6 million in Q2 2024, down sequentially but up 7.5% year-over-year due to higher salaries, regulatory assessments, and technology investments.

• Efficiency ratio improved to 61.39% from 64.11% in Q1 2024 and 65.52% in Q2 2023.

Outlook and guidance

• Management expects continued focus on loan and deposit growth, ongoing investment in technology, and risk management.

• Loan pipelines for Q3 and Q4 are strong, with expected growth of $50M-$100M per quarter.

• Net interest income growth projected to exceed 10%, with non-interest expense growth under 5%.

• Efficiency ratio expected to fall below 60% with continued growth and flat expenses.

• The company plans to monitor and control growth to remain in compliance with all regulatory capital standards.