What changed in Third Coast Bancshares, Inc.'s 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of Third Coast Bancshares, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+158 added−151 removedSource: 10-K (2026-03-04) vs 10-K (2025-03-05)
Top changes in Third Coast Bancshares, Inc.'s 2025 10-K
158 paragraphs added · 151 removed · 135 edited across 2 sections
- Item 7. Management's Discussion & Analysis+135 / −134 · 118 edited
- Item 1C. Cybersecurity+23 / −17 · 17 edited
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
17 edited+6 added−0 removed13 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
17 edited+6 added−0 removed13 unchanged
2024 filing
2025 filing
Biggest changeIssuer Purchases of Equity Securities The following table sets forth information regarding our repurchases of our common stock during the three months ended December 31, 2024: Total Number of Shares Purchased (a) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs October 1, 2024 - October 31, 2024 604 $ 25.80 — — November 1, 2024 - November 30, 2024 — $ — — — December 1, 2024 - December 31, 2024 — $ — — — (a) Represents shares of common stock transferred to us in order to satisfy tax withholding obligations incurred upon the vesting of restricted stock awards. 45 Performance Graph The following performance graph compares the cumulative total shareholder return on the Company’s common stock for the period beginning at the close of trading on November 9, 2021 (the end of the first day of trading of TCBX common stock on the Nasdaq Global Select Market) and the last trading date of each year from 2021 to 2024, with the cumulative total return of the Russell 2000 Index (RUT) and the NASDAQ Bank Index (IXBK) for the same periods.
Biggest changeIssuer Purchases of Equity Securities The following table sets forth information regarding our repurchases of our common stock during the three months ended December 31, 2025: Total Number of Shares Purchased (a) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (b) October 1, 2025 - October 31, 2025 21 $ 37.38 — $ 30,000,000 November 1, 2025 - November 30, 2025 — $ — — $ 30,000,000 December 1, 2025 - December 31, 2025 — $ — — $ 30,000,000 (a) Represents shares of common stock transferred to us in order to satisfy tax withholding obligations incurred upon the vesting of restricted stock awards.
Key components of the cybersecurity program include: • A risk assessment process that identifies and prioritizes cybersecurity risks; defines and evaluates the effectiveness of controls to mitigate the risks; and reports results to executive management and the board of directors. • A third-party managed detection and response service, which monitors the security of our information systems around-the-clock, including intrusion detection and alerting. • An incident response plan that outlines establishes a structured approach for the Company's response to a cybersecurity incident.
Key components of the cybersecurity program include: • A risk assessment process that identifies and prioritizes cybersecurity risks; defines and evaluates the effectiveness of controls to mitigate the risks; and reports results to executive management and the board of directors. • A third-party managed detection and response service, which monitors the security of our information systems around-the-clock, including intrusion detection and alerting. • An incident response plan that establishes a structured approach for the Company's response to a cybersecurity incident.
However, one or more unfavorable outcomes in any claim or litigation against us could have a material adverse effect for the period in which 43 they are resolved. In addition, regardless of their merits or their ultimate outcomes, such matters are costly, divert management’s attention and may materially and adversely affect our reputation, even if resolved in our favor.
However, one or more unfavorable outcomes in any claim or litigation against us could have a material adverse effect for the period in which they are resolved. In addition, regardless of their merits or their ultimate outcomes, such matters are costly, divert management’s attention and may materially and adversely affect our reputation, even if resolved in our favor.
The plan facilitates coordination across multiple parts of our organization and is evaluated at least annually. • A training program that educates employees about cybersecurity risks and how to identify and escalate cybersecurity events. • A third-party risk management program designed to ensure that our key vendors meet our expectations on cybersecurity.
The plan facilitates coordination across multiple parts of our organization and is evaluated at least annually. 43 • A training program that educates employees about cybersecurity risks and how to identify and escalate cybersecurity events. • A third-party risk management program designed to ensure that our key vendors meet our expectations on cybersecurity.
Our Chief Information Security Officer (“CISO”) is primarily responsible for this cybersecurity program component and is a key member of the risk management organization, reporting directly to the Chief Risk Officer and as discussed below, periodically to the Risk Committee of our board of directors.
Our Chief Information Security Officer (“CISO”) is primarily responsible for this cybersecurity program component and is a key member of the risk management organization, reporting directly to the Chief Executive Officer and, as discussed below, periodically to the Risk Committee of our board of directors.
The Risk Committee of our board of directors reviews and approves our information security and technology budgets and strategies annually. Additionally, the Risk Committee of our board of directors reviews quarterly reports regarding the information security program and technology program, key enterprise cybersecurity initiatives, and other matters relating to cybersecurity processes.
The Risk Committee of our board of directors reviews and approves our information security and technology budgets and strategies annually. Additionally, the Risk Committee of our board of directors reviews quarterly reports regarding the information security and technology functions, key enterprise cybersecurity initiatives, and other matters relating to cybersecurity processes.
This performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or incorporated by reference into any future SEC filing, except as shall be expressly set forth by specific reference in such filing. 11/9/2021 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Third Coast Bancshares, Inc. $ 100.00 $ 103.88 $ 73.69 $ 79.45 $ 135.75 NASDAQ Bank $ 100.00 $ 96.48 $ 78.76 $ 73.51 $ 85.81 Russell 2000 $ 100.00 $ 92.50 $ 72.56 $ 83.51 $ 91.88 It em 6. [Reserved] 46
This performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or incorporated by reference into any future SEC filing, except as shall be expressly set forth by specific reference in such filing. 11/9/2021 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 Third Coast Bancshares, Inc. $ 100.00 $ 103.88 $ 73.69 $ 79.45 $ 135.75 $ 151.98 NASDAQ Bank $ 100.00 $ 96.48 $ 78.76 $ 73.51 $ 85.81 $ 89.43 Russell 2000 $ 100.00 $ 92.50 $ 72.56 $ 83.51 $ 91.88 $ 102.25 It em 6. [Reserved] 47
Holders of Record As of February 28, 2025, there were approximately 381 holders of record of the Company's common stock and no holders of record of the Company's non-voting common stock. Additionally, a greater number of holders of the Company's common stock are “street name” or beneficial holders, whose shares are held by banks, brokers and other financial institutions.
Holders of Record As of February 28, 2026, there were approximately 696 holders of record of the Company's common stock and no holders of record of the Company's non-voting common stock. Additionally, a greater number of holders of the Company's common stock are “street name” or beneficial holders, whose shares are held by banks, brokers and other financial institutions.
“Risk Factors” for a discussion of cybersecurity risks. Governance Board of Directors Oversight 42 The Risk Committee of our board of directors is responsible for overseeing our information security and technology programs, including management’s actions to identify, assess, mitigate, and remediate or prevent material cybersecurity issues and risks.
For further discussion, please see Item 1A. “Risk Factors” for a discussion of cybersecurity risks. Governance Board of Directors Oversight The Risk Committee of our board of directors is responsible for overseeing our information security and technology programs, including management’s actions to identify, assess, mitigate, and remediate or prevent material cybersecurity issues and risks.
However, as of the date of this Form 10-K, the Company is not aware of any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition that are required to be reported in this Form 10-K. For further discussion, please see Item 1A.
However, as of the date of this Form 10-K, the Company is not aware of any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition that are required to be reported in this Form 10-K .
Location Address Owned/Leased Austin 1508 W 5th Street, Suite 100, Austin, Texas 78703 Leased Beaumont 3650 North Major Dr, Suite D, Beaumont, Texas 77713 Leased Conroe 1336 League Line Road, Suite 100, Conroe, Texas 77304 Leased Dallas 8235 Douglas Avenue, Suite 100, Dallas, Texas 75225 Leased Detroit 12038 US Highway 82 West, Detroit, Texas 75436 Owned Fort Worth 1400 W 7th Street, Suite 100, Fort Worth, Texas 76102 Leased Georgetown 200 E 8th Street, Suite 102, Georgetown, Texas 78626 Leased Houston - Galleria 1800 West Loop South, Suite 100, Houston, Texas 77027 Leased Houston - Memorial City 800 Gessner, Suite 250, Houston, Texas 77024 Leased Humble 20202 Highway 59 North, Humble, Texas 77338 Owned Kingwood 1910 W Lake Houston Pkwy, Kingwood, Texas 77339 Owned La Vernia 13809 West Highway 87, La Vernia, Texas 78121 Owned Lake Jackson 85 Oak Drive, Lake Jackson, Texas 77566 Owned Nixon 200 North Nixon Avenue, Nixon, Texas 78140 Owned Pearland 1850 Pearland Parkway, Pearland, Texas, 77581 Owned Plano 5000 Legacy, Suite 120, Plano, Texas 75024 Leased Port Arthur - Mid County 2901 Turtle Creek Drive, Suite 115, Port Arthur, Texas 77642 Leased San Antonio 420 Broadway, Suite 2101, San Antonio, Texas 78205 Leased The Woodlands 9709 Lakeside Boulevard, Suite 117, The Woodlands, Texas 77381 Leased In addition, we lease non-branch offices in Beaumont, Copperfield, and Fort Worth, Texas.
Location Address Owned/Leased Austin 1508 W 5th Street, Suite 100, Austin, Texas 78703 Leased Austin 507 Pressler Street, Suite 400, Austin, Texas 78703 Leased Ballinger 900 Hutchins Avenue, Ballinger, Texas 76821 Owned Beaumont 3650 North Major Drive, Suite D, Beaumont, Texas 77713 Leased Bee Cave 13715 East Ladera Boulevard, Bee Cave, Texas 78738 Leased Conroe 1336 League Line Road, Suite 100, Conroe, Texas 77304 Leased Dallas 8235 Douglas Avenue, Suite 100, Dallas, Texas 75225 Leased Detroit 12038 US Highway 82 West, Detroit, Texas 75436 Owned Fort Worth 1400 W 7th Street, Suite 100, Fort Worth, Texas 76102 Leased Georgetown 200 E 8th Street, Suite 102, Georgetown, Texas 78626 Leased Houston - Galleria 1800 West Loop South, Suite 100, Houston, Texas 77027 Leased Houston - Memorial City 800 Gessner, Suite 250, Houston, Texas 77024 Leased Humble 20202 Highway 59 North, Humble, Texas 77338 Owned Kingwood 1910 W Lake Houston Pkwy, Kingwood, Texas 77339 Owned La Vernia 13809 West Highway 87, La Vernia, Texas 78121 Owned Lake Jackson 85 Oak Drive, Lake Jackson, Texas 77566 Owned Nixon 200 North Nixon Avenue, Nixon, Texas 78140 Owned Pearland 1850 Pearland Parkway, Pearland, Texas, 77581 Owned Plano 5000 Legacy, Suite 120, Plano, Texas 75024 Leased Port Arthur - Mid County 3360 Jimmy Johnson Boulevard, Port Arthur, Texas 77642 Leased San Antonio 420 Broadway, Suite 2101, San Antonio, Texas 78205 Leased The Woodlands 9709 Lakeside Boulevard, Suite 117, The Woodlands, Texas 77381 Leased In addition, we lease non-branch offices in Bastrop, Beaumont, and Copperfield, Texas.
It em 4. Mine Safety Disclosures. Not applicable. 44 PART II It em 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Shares of the Company's common stock are traded on the Nasdaq Global Select Market under the symbol “TCBX”.
It em 4. Mine Safety Disclosures. Not applicable. 45 PART II It em 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information for Common Stock Shares of the Company's common stock are traded on the New York Stock Exchange and NYSE Texas under the symbol “TCBX”.
Management Oversight Our CISO is accountable for managing our enterprise information security department and overseeing our information security program. The CISO reports directly to the Chief Risk Officer. The CISO’s responsibilities include cybersecurity risk assessment, defense operations, incident response, vulnerability assessment, threat intelligence, identity access governance, third-party risk management, and business resilience.
The CISO periodically reports on cybersecurity risks, incidents, and program effectiveness to the Risk Committee of our board of directors and, as appropriate, to the full board of directors. The CISO’s responsibilities include cybersecurity risk assessment, defense operations, incident response, vulnerability assessment, threat intelligence, identity access governance, third-party risk management, and business resilience.
We also believe that our facilities are in good condition and are adequate to meet our operating needs for the foreseeable future. The following table sets forth a list of our branches as of the date of this Annual Report on Form 10-K.
The following table sets forth a list of our branches as of the date of this Annual Report on Form 10-K.
We have protocols by which certain cybersecurity incidents that meet established reporting thresholds are escalated internally and, where appropriate, reported to senior leadership and the Risk Committee and/or Board in a timely manner. The CISO has over 20 years of experience in cybersecurity across the U.S Government, Department of Defense contracting, and financial services industry.
We maintain escalation protocols under which cybersecurity incidents meeting established reporting thresholds are escalated internally and, where appropriate, reported to senior leadership and the Risk Committee and/or board of directors in a timely manner. These processes are designed to improve our ability to detect, respond to, and recover from cybersecurity incidents in a timely manner.
We own our headquarters and our branch locations in Detroit, Kingwood, La Vernia, Lake Jackson, Nixon, and Pearland, and we lease the remaining locations. We believe that the leases to which we are subject are generally on terms consistent with prevailing market terms.
We believe that the leases to which we are subject are generally on terms consistent with prevailing market terms. We also believe that our facilities are in good condition and are adequate to meet our operating needs for the foreseeable future.
Prior to joining the Company, the CISO served as the Deputy CISO for a major domestic financial services institution. It em 2. Properties. Our principal offices and headquarters are located at 20202 Highway 59 North, Suite 190, Humble, Texas 77338. All of our branches are located in Texas.
The CISO has over 20 years of experience in cybersecurity across the U.S Government, Department of Defense contracting, and financial services industry. Prior to joining the Company, the CISO served as the Deputy CISO for a major domestic financial services institution. 44 It em 2. Properties.
Added
Management Oversight Our CISO is accountable for managing our enterprise information security department and overseeing our information security program. The CISO reports directly to the Chief Executive Officer, reflecting the importance of cybersecurity risk at the enterprise level.
Added
Cybersecurity risk management activities are integrated into the Company’s overall enterprise risk management framework, and the CISO works closely with the Chief Risk Officer and other members of senior management to identify, assess, and manage cybersecurity risks.
Added
Our principal offices and headquarters are located at 20202 Highway 59 North, Suite 190, Humble, Texas 77338. All of our branches are located in Texas. We own our headquarters and our branch locations in Ballinger, Detroit, Kingwood, La Vernia, Lake Jackson, Nixon, and Pearland, and we lease the remaining locations.
Added
(b) On June 17, 2025, we announced that our board of directors had authorized a new share repurchase program (the “Repurchase Program”) under which we may repurchase up to $30 million of our common stock through May 22, 2026. Non-objection from the Federal Reserve Bank of Dallas related to the Repurchase Program was received on June 16, 2025.
Added
As of December 31, 2025, no shares were repurchased under the Repurchase Program. Under the Repurchase Program, we may periodically buy our shares through open market transactions at current market prices, privately negotiated deals, block trades, or other methods compliant with federal securities laws.
Added
The Repurchase Program can be extended, modified, amended, suspended, or halted at any time by our board of directors and does not obligate us to repurchase our common stock. 46 Performance Graph The following performance graph compares the cumulative total shareholder return on the Company’s common stock for the period beginning at the close of trading on November 9, 2021 (the end of the first day of trading of TCBX common stock on the Nasdaq Global Select Market) and the last trading date of each year from 2021 to 2025, with the cumulative total return of the Russell 2000 Index (RUT) and the NASDAQ Bank Index (IXBK) for the same periods.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
118 edited+17 added−16 removed98 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
118 edited+17 added−16 removed98 unchanged
2024 filing
2025 filing
Biggest changeThe following tables present as of and for the periods indicated, an analysis of the allowance for credit losses and other related data: For Year Ended December 31, (Dollars in thousands) 2024 2023 Allowance for credit loss at beginning of period $ 37,022 $ 30,351 Impact of ASC 326 adoption — 4,000 Provision for credit loss on loans 6,675 3,908 Charge-offs: Real estate: Commercial real estate: Non-farm non-residential non-owner occupied (598 ) — Commercial and industrial (3,651 ) (1,824 ) Consumer — (19 ) Municipal and other (67 ) (20 ) Total charge-offs (4,316 ) (1,863 ) Recoveries: Commercial and industrial 911 626 Consumer 1 — Municipal and other 11 — Total recoveries 923 626 Net charge-offs (3,393 ) (1,237 ) Allowance for credit losses at end of period $ 40,304 $ 37,022 Ratio of allowance for credit loss to total loans 1.02 % 1.02 % Ratio of net charge-offs to average loans 0.09 % 0.04 % The allowance for credit losses by loan category as of the dates indicated was as follows: As of December 31, 2024 2023 (Dollars in thousands) Amount % Loans in Each Category Amount % Loans in Each Category Real estate: Commercial real estate: Non-farm non-residential owner occupied $ 3,015 11.3 % $ 4,311 14.3 % Non-farm non-residential non-owner occupied 4,460 16.4 % 5,541 16.1 % Residential 2,014 8.5 % 2,341 9.4 % Construction, development and other 14,728 22.0 % 5,853 19.1 % Farmland 187 0.8 % 244 0.8 % Commercial and industrial 15,370 37.8 % 17,617 34.7 % Consumer 10 0.0 % 14 0.1 % Municipal and other 520 3.2 % 1,101 5.5 % $ 40,304 100.0 % $ 37,022 100.0 % Securities Our investment portfolio consists of state and municipal securities, mortgage-backed securities, agency collateralized mortgage obligations, U.S. treasury bonds, and corporate bonds classified as available for sale.
Biggest changeThe increase in our allowance for credit losses on loans of $3.6 million, or 9.0%, was primarily due to the $7.2 million provision for credit losses on loans recorded for the year ended December 31, 2025, offset by net charge-offs of $3.6 million for the year ended December 31, 2025. 56 The following tables present as of and for the periods indicated, an analysis of the allowance for credit losses and other related data: For Year Ended December 31, (Dollars in thousands) 2025 2024 Allowance for credit loss at beginning of period $ 40,304 $ 37,022 Provision for credit loss on loans 7,246 6,675 Charge-offs: Real estate: Commercial real estate: Non-farm non-residential non-owner occupied — (598 ) Commercial and industrial (4,104 ) (3,651 ) Consumer (44 ) — Municipal and other — (67 ) Total charge-offs (4,148 ) (4,316 ) Recoveries: Commercial real estate: Commercial real estate: Non-farm non-residential non-owner occupied 350 — Commercial and industrial 197 911 Consumer — 1 Municipal and other — 11 Total recoveries 547 923 Net charge-offs (3,601 ) (3,393 ) Allowance for credit losses at end of period $ 43,949 $ 40,304 Ratio of allowance for credit loss to total loans 1.00 % 1.02 % Ratio of net charge-offs to average loans 0.09 % 0.09 % The allowance for credit losses by loan category as of the dates indicated was as follows: As of December 31, 2025 2024 (Dollars in thousands) Amount % Loans in Each Category Amount % Loans in Each Category Real estate: Commercial real estate: Non-farm non-residential owner occupied $ 2,337 9.9 % $ 3,015 11.3 % Non-farm non-residential non-owner occupied 4,843 16.2 % 4,460 16.4 % Residential 2,008 7.6 % 2,014 8.5 % Construction, development and other 6,955 18.7 % 14,728 22.0 % Farmland 116 0.6 % 187 0.8 % Commercial and industrial 26,673 43.4 % 15,370 37.8 % Consumer 6 0.0 % 10 0.0 % Municipal and other 1,011 3.6 % 520 3.2 % $ 43,949 100.0 % $ 40,304 100.0 % Securities Our investment portfolio consists of state and municipal securities, mortgage-backed securities, agency collateralized mortgage obligations, U.S. treasury bonds, and corporate bonds classified as available for sale.
The Company will lose its emerging growth company status upon the earliest of : (i) the last day of the fiscal year in which the Company has $1.235 billion or more in annual revenues; (ii) the date on which the Company becomes a “large accelerated filer” 63 (the fiscal year end on which the total market value of the Company's common equity securities held by non-affiliates is $700 million or more as of June 30); (iii) the date on which the Company issues more than $1.0 billion of non-convertible debt over a three-year period; or (iv) December 31, 2026, which is the end of the fiscal year in which the fifth anniversary of the Company's initial public offering occurs.
The Company will lose its emerging growth company status upon the earliest of : (i) the last day of the fiscal year in which the Company has $1.235 billion or more in annual revenues; (ii) the date on which the Company becomes a “large accelerated filer” (the fiscal year end on which the total market value of the Company's common equity securities held by non-affiliates is $700 million or more as of June 30); (iii) the date on which the Company issues more than $1.0 billion of non-convertible debt over a three-year period; or (iv) December 31, 2026, which is the end of the fiscal year in which the fifth anniversary of the Company's initial public offering occurs.
(incorporated by reference to Exhibit 10.5 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.6 Form of Subordinated Note Purchase Agreement, by and among Third Coast Bancshares, Inc. and the several purchasers thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 1, 2022).# 10.7 Form of Registration Rights Agreement, by and among Third Coast Bancshares, Inc. and the several purchasers thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 1, 2022). 10.8 Lease of 229 Dowlen Road, as amended (incorporated by reference to Exhibit 10.8 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.9 Confidential Separation Agreement and General Release, dated June 30, 2022, by and between Third Coast Bancshares, Inc., Third Coast Bank, SSB, and Donald Legato (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on July 7, 2022). 10.10 Employment Agreement between Third Coast Bank, SSB and John McWhorter (incorporated by reference to Exhibit 10.11 to the Company's Form S-1 filed with the SEC on October 15, 2021). 67 10.11 Employment Agreement between Third Coast Bancshares, Inc., Third Coast Bank, SSB and Bart Caraway (incorporated by reference to Exhibit 10.12 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.12 Employment Agreement between Third Coast Bank, SSB and Audrey Duncan (incorporated by reference to Exhibit 10.13 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.13 Salary Continuation Agreement between Third Coast Bank, SSB and John McWhorter (incorporated by reference to Exhibit 10.15 to the Company's Form S-1 filed with the SEC on October 15, 2021 ). 10.14 Salary Continuation Agreement between Third Coast Bank, SSB and Bart Caraway (incorporated by reference to Exhibit 10.16 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.15 Salary Continuation Agreement between Third Coast Bank, SSB and Audrey Duncan (incorporated by reference to Exhibit 10.17 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.16 Separation Agreement between Heritage Bank and Dennis Bonnen (incorporated by reference to Exhibit 10.18 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.17 Form of Stock Option Agreement under the Third Coast Bancshares, Inc. 2017 Director Stock Option Plan (incorporated by reference to Exhibit 10.20 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.18 Form of Stock Option Award Grant Notice and Stock Option Award Agreement under the Third Coast Bancshares, Inc. 2019 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.21 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.19 Form of Notice of Grant of Restricted Stock and Restricted Stock Award Agreement for Non-Employee Directors under the Third Coast Bancshares, Inc. 2019 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.22 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.20 Form of Notice of Grant of Restricted Stock and Restricted Stock Award Agreement for Officers under the Third Coast Bancshares, Inc. 2019 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.23 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.21 Form of Investment Agreement, dated September 8, 2022, by and among Third Coast Bancshares, Inc. and the several purchasers thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 9, 2022).# 10.22 Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 9, 2022). 10.23 Form of Voting Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on September 9, 2022). 10.24 Form of Letter Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on September 9, 2022). 10.25 Renewal, Extension and Modification of Loan, effective September 10, 2022, by and among Third Coast Bancshares, Inc. and American National Bank & Trust (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 14, 2022). 10.26 Form of Letter Agreement, dated September 30, 2022, by and among Third Coast Bancshares, Inc. and the several purchasers thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 6, 2022). 10.27 Consulting Agreement, dated as of January 1, 2023, by and between Third Coast Bancshares, Inc. and Dennis Bonnen (incorporated by reference to Exhibit 10.29 to the Company's Annual Report on Form 10-K filed with the SEC on March 15, 2023). 10.28 Employment Agreement, dated as of April 20, 2023, by and between Bill Bobbora and Third Coast Bank, SSB (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the SEC on August 8, 2023). 10.29 Salary Continuation Agreement, dated as of April 20, 2023, by and between Third Coast Bank, SSB and Bill Bobbora (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed with the SEC on August 8, 2023). 10.30 Amendment to Employment Agreement, dated as of March 15, 2024, by and between Third Coast Bank and R.
(incorporated by reference to Exhibit 10.5 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.6 Form of Subordinated Note Purchase Agreement, by and among Third Coast Bancshares, Inc. and the several purchasers thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 1, 2022).# 10.7 Form of Registration Rights Agreement, by and among Third Coast Bancshares, Inc. and the several purchasers thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 1, 2022). 10.8 Lease of 229 Dowlen Road, as amended (incorporated by reference to Exhibit 10.8 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.9 Confidential Separation Agreement and General Release, dated June 30, 2022, by and between Third Coast Bancshares, Inc., Third Coast Bank, SSB, and Donald Legato (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on July 7, 2022). 68 10.10 Employment Agreement between Third Coast Bank, SSB and John McWhorter (incorporated by reference to Exhibit 10.11 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.11 Employment Agreement between Third Coast Bancshares, Inc., Third Coast Bank, SSB and Bart Caraway (incorporated by reference to Exhibit 10.12 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.12 Employment Agreement between Third Coast Bank, SSB and Audrey Duncan (incorporated by reference to Exhibit 10.13 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.13 Salary Continuation Agreement between Third Coast Bank, SSB and John McWhorter (incorporated by reference to Exhibit 10.15 to the Company's Form S-1 filed with the SEC on October 15, 2021 ). 10.14 Salary Continuation Agreement between Third Coast Bank, SSB and Bart Caraway (incorporated by reference to Exhibit 10.16 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.15 Salary Continuation Agreement between Third Coast Bank, SSB and Audrey Duncan (incorporated by reference to Exhibit 10.17 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.16 Separation Agreement between Heritage Bank and Dennis Bonnen (incorporated by reference to Exhibit 10.18 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.17 Form of Stock Option Agreement under the Third Coast Bancshares, Inc. 2017 Director Stock Option Plan (incorporated by reference to Exhibit 10.20 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.18 Form of Stock Option Award Grant Notice and Stock Option Award Agreement under the Third Coast Bancshares, Inc. 2019 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.21 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.19 Form of Notice of Grant of Restricted Stock and Restricted Stock Award Agreement for Non-Employee Directors under the Third Coast Bancshares, Inc. 2019 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.22 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.20 Form of Notice of Grant of Restricted Stock and Restricted Stock Award Agreement for Officers under the Third Coast Bancshares, Inc. 2019 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.23 to the Company's Form S-1 filed with the SEC on October 15, 2021). 10.21 Form of Investment Agreement, dated September 8, 2022, by and among Third Coast Bancshares, Inc. and the several purchasers thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 9, 2022).# 10.22 Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 9, 2022). 10.23 Form of Voting Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on September 9, 2022). 10.24 Form of Letter Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on September 9, 2022). 10.25 Renewal, Extension and Modification of Loan, effective September 10, 2022, by and among Third Coast Bancshares, Inc. and American National Bank & Trust (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 14, 2022). 10.26 Form of Letter Agreement, dated September 30, 2022, by and among Third Coast Bancshares, Inc. and the several purchasers thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 6, 2022). 10.27 Consulting Agreement, dated as of January 1, 2023, by and between Third Coast Bancshares, Inc. and Dennis Bonnen (incorporated by reference to Exhibit 10.29 to the Company's Annual Report on Form 10-K filed with the SEC on March 15, 2023). 10.28 Employment Agreement, dated as of April 20, 2023, by and between Bill Bobbora and Third Coast Bank, SSB (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the SEC on August 8, 2023). 10.29 Salary Continuation Agreement, dated as of April 20, 2023, by and between Third Coast Bank, SSB and Bill Bobbora (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed with the SEC on August 8, 2023). 10.30 Amendment to Employment Agreement, dated as of March 15, 2024, by and between Third Coast Bank and R.
Registration of Securities Issued in Private Placement The Company filed a Registration Statement on Form S-3 with the SEC on September 25, 2024 registering the resale from time to time by the securityholders named therein of the shares of Series A Preferred Stock and warrants to purchase an aggregate of 175,000 shares of the Company's common stock (or, at the election of the warrant holder in accordance with the terms of the warrant agreement, Series B Preferred Stock or non-voting common stock of the Company) (the “Preferred Warrants”)), issued to such securityholders in the private placement completed on September 30, 2022 and the securities issuable upon conversion of shares of Series A Preferred Stock, Series B Preferred Stock or non-voting common stock, or upon exercise of the Preferred Warrants.
Registration of Securities Issued in Private Placement The Company filed a Registration Statement on Form S-3 with the SEC on September 25, 2024 registering the resale from time to time by the securityholders named therein of the shares of Series A Preferred Stock and warrants to purchase an aggregate of 175,000 shares of the Company's common stock (or, at the election of the warrant holder in accordance with the terms of the warrant agreement, Series B Preferred Stock or non-voting common stock of the Company) (the “Preferred Warrants”)), issued to such securityholders in the private placement completed on September 30, 2022 and the securities issuable upon conversion of shares of 48 Series A Preferred Stock, Series B Preferred Stock or non-voting common stock, or upon exercise of the Preferred Warrants.
Insider Trading Policy. 21.1* Subsidiaries of Third Coast Bancshares, Inc. 68 23.1* Consent of Whitley Penn LLP . 24.1* Powers of attorney (included on signature page). 31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of Principal Executive Officer Pursuant to 18 U.S.C.
Insider Trading Policy. 21.1* Subsidiaries of Third Coast Bancshares, Inc. 23.1* Consent of Whitley Penn LLP. 24.1* Powers of attorney (included on signature page). 31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of Principal Executive Officer Pursuant to 18 U.S.C.
Because we act as an intermediary for our customer, changes in the fair value of the underlying derivative contracts are designed to offset each other and would not significantly impact our operating results except in certain situations where there is a significant deterioration in the customer’s credit worthiness or that of the counterparties.
Because we act as an intermediary for our customer, changes in the fair value of the underlying derivative contracts are designed to offset each other and would not significantly impact our operating results except in certain situations where there is a significant 62 deterioration in the customer’s credit worthiness or that of the counterparties.
Factors management considers in assessing whether a discounted cash flow method evaluation is needed for a security whose fair value is less than amortized costs include: (1) management will assess whether it intends to sell, or if it is more likely than not it will be required to sell, the security before recovery of the amortized cost basis; (2) the length of time (duration) and the extent 56 (severity) to which the market value has been less than costs; (3) the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer, such as changes in technology that impair the earnings potential of the investment or the discontinuance of a segment of the business that may affect the future earnings potential; and (4) changes in the rating of the security by a rating agency.
Factors management considers in assessing whether a discounted cash flow method evaluation is needed for a security whose fair value is less than amortized costs include: (1) management will assess whether it intends to sell, or if it is more likely than not it will be required to sell, the security before recovery of the amortized cost basis; (2) the length of time (duration) and the extent (severity) to which the market value has been less than costs; (3) the financial condition and near-term prospects of the issuer, 57 including any specific events which may influence the operations of the issuer, such as changes in technology that impair the earnings potential of the investment or the discontinuance of a segment of the business that may affect the future earnings potential; and (4) changes in the rating of the security by a rating agency.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 62 disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Our asset liability and funds management policy provides management with the guidelines for effective funds management, and we have established a 61 measurement system for monitoring our net interest rate sensitivity position. We have historically managed our sensitivity position within our established guidelines.
Our asset liability and funds management policy provides management with the guidelines for effective funds management, and we have established a measurement system for monitoring our net interest rate sensitivity position. We have historically managed our sensitivity position within our established guidelines.
Management’s assessment determined that the Company maintained effective internal control over financial reporting as of December 31, 2024. This Annual Report on Form 10-K does not include an attestation report of the Company’s registered public accounting firm due to a transition period established by rules of the SEC for an emerging growth company. It em 9B. Other Information.
Management’s assessment determined that the Company maintained effective internal control over financial reporting as of December 31, 2025. This Annual Report on Form 10-K does not include an attestation report of the Company’s registered public accounting firm due to a transition period established by rules of the SEC for an emerging growth company. It em 9B. Other Information.
Effective January 1, 2023, the Company adopted the provisions of ASU 2022-02, which discontinued the recognition and measurement guidance previously required on troubled debt restructurings. Therefore, restructure loans included in nonperforming assets as of December 31, 2024 exclude any loan modifications that are performing but would have previously required disclosure as troubled debt restructurings.
Effective January 1, 2023, the Company adopted the provisions of ASU 2022-02, which discontinued the recognition and measurement guidance previously required on troubled debt restructurings. Therefore, restructure loans included in nonperforming assets as of December 31, 2025 exclude any loan modifications that are performing but would have previously required disclosure as troubled debt restructurings.
Directors, Executive Officers and Corporate Governance. The information required by this Item is incorporated herein by reference to our Definitive Proxy Statement for the 2025 Annual Meeting of Shareholders to be filed with the SEC within 120 days after our fiscal year end (the “Proxy Statement”).
Directors, Executive Officers and Corporate Governance. The information required by this Item is incorporated herein by reference to our Definitive Proxy Statement for the 2026 Annual Meeting of Shareholders to be filed with the SEC within 120 days after our fiscal year end (the “Proxy Statement”).
Evaluation of Disclosure Controls and Procedures Management, with the participation of the Company’s Chairman, President and Chief Executive Officer and its Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule l3a-l5(e) and 15d-15(e) promulgated under the Exchange Act) as of December 31, 2024.
Evaluation of Disclosure Controls and Procedures Management, with the participation of the Company’s Chairman, President and Chief Executive Officer and its Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule l3a-l5(e) and 15d-15(e) promulgated under the Exchange Act) as of December 31, 2025.
See “Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of 2023 versus 2022 results. Our results of operations depend substantially on net interest income and noninterest income.
See “Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of 2024 versus 2023 results. Our results of operations depend substantially on net interest income and noninterest income.
As of December 31, 2024 and 2023, our investment portfolio did not contain any securities that are directly backed by subprime or Alt-A mortgages. The contractual maturity of a mortgage-backed security is the date at which the last underlying mortgage matures.
As of December 31, 2025 and 2024, our investment portfolio did not contain any securities that are directly backed by subprime or Alt-A mortgages. The contractual maturity of a mortgage-backed security is the date at which the last underlying mortgage matures.
As of December 31, 2024, management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in “Internal Control—Integrated Framework,” issued by the Committee of Sponsoring Organizations, or COSO, of the Treadway Commission in 2013.
As of December 31, 2025, management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in “Internal Control—Integrated Framework,” issued by the Committee of Sponsoring Organizations, or COSO, of the Treadway Commission in 2013.
The information required by this Item is incorporated herein by reference to our Proxy Statement to be filed with the SEC within 120 days after our fiscal year end. 66 PART IV It em 15. Exhibits and Financial Statement Schedules.
The information required by this Item is incorporated herein by reference to our Proxy Statement to be filed with the SEC within 120 days after our fiscal year end. 67 PART IV It em 15. Exhibits and Financial Statement Schedules.
Because noninterest-bearing sources of funds, such as noninterest-bearing deposits and shareholders’ equity, also fund interest-earning assets, net interest margin includes the benefit of these noninterest-bearing sources. Year ended December 31, 2024 vs.
Because noninterest-bearing sources of funds, such as noninterest-bearing deposits and shareholders’ equity, also fund interest-earning assets, net interest margin includes the benefit of these noninterest-bearing sources. Year ended December 31, 2025 vs.
The Bank remains as a member of the Federal Reserve System, and the Federal Reserve is the Bank’s primary federal regulator. The Federal Reserve also continues to be the Company’s primary federal regulator. 47 Results of Operations This section provides a comparative discussion of the Company’s results of operations for the two-year period ended December 31, 2024, unless otherwise specified.
The Bank remains as a member of the Federal Reserve System, and the Federal Reserve is the Bank’s primary federal regulator. The Federal Reserve also continues to be the Company’s primary federal regulator. Results of Operations This section provides a comparative discussion of the Company’s results of operations for the two-year period ended December 31, 2025, unless otherwise specified.
For additional information on our Note Payable - Subordinated Debt, see Note 7—FHLB Advances and Other Borrowings in the accompanying notes to the consolidated financial statements included elsewhere in this Form 10-K. Our cost of notes payable was 6.55% and 6.74% for the years ended December 31, 2024 and 2023, respectively. Federal Reserve Borrower-in-Custody (BIC) Loan Pledge Arrangement.
For additional information on our Note Payable - Subordinated Debt, see Note 7—FHLB Advances and Other Borrowings in the accompanying notes to the consolidated financial statements included elsewhere in this Form 10-K. Our cost of notes payable was 6.13% and 6.55% for the years ended December 31, 2025 and 2024, respectively. Federal Reserve Borrower-in-Custody (BIC) Loan Pledge Arrangement.
Based on this evaluation, the Company’s Chairman, President and Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2024.
Based on this evaluation, the Company’s Chairman, President and Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2025.
Prior to the modification, the $50.0 million facility was due on September 10, 2024, and bore interest at The Wall Street Journal US Prime Rate, as such changes from time to time, plus 0.50%, with a floor rate of 5.00% per annum. At December 31, 2024 and 2023, the outstanding balance was $30.9 million and $38.9 million, respectively.
Prior to the modification, the $50.0 million facility was due on September 10, 2024, and bore interest at The Wall Street Journal US Prime Rate, as such changes from time to time, plus 0.50%, with a floor rate of 5.00% per annum. At December 31, 2025 and 2024, the outstanding balance was $37.9 million and $30.9 million, respectively.
Based on management's analysis, an allowance for credit losses for the security portfolio was not deemed to be needed as of December 31, 2024.
Based on management's analysis, an allowance for credit losses for the security portfolio was not deemed to be needed as of December 31, 2025.
For the year ended December 31, 2024 and 2023, liquidity needs were primarily met by core deposits, loan maturities, amortizing loan portfolios, brokered deposits, and borrowings.
For the year ended December 31, 2025 and 2024, liquidity needs were primarily met by core deposits, loan maturities, amortizing loan portfolios, brokered deposits, and borrowings.
At December 31, 2024, no such deterioration was determined by management. We also offer one-way interest rate swap products to our customers.
At December 31, 2025, no such deterioration was determined by management. We also offer one-way interest rate swap products to our customers.
This increase was primarily the result of the $47.7 million in net income and $3.6 million, net of tax, in other comprehensive income, offset by the $4.7 million of dividends declared on the Series A Preferred Stock. Capital management consists of providing equity and other instruments that qualify as regulatory capital to support current and future operations.
This increase was primarily the result of the $66.3 million in net income and $6.4 million, net of tax, in other comprehensive income, offset by the $4.8 million of dividends declared on the Series A Preferred Stock. Capital management consists of providing equity and other instruments that qualify as regulatory capital to support current and future operations.
During the three months ended December 31, 202 4, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K. 64 It em 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. 65 PART III It em 10.
During the three months ended December 31, 2025 , no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K. It em 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. 66 PART III It em 10.
The provision for credit losses for the year ended December 31, 2024 was $5.7 million, compared to $6.3 million for the year ended December 31, 2023. The provision for credit losses for the year ended December 31, 2024 related primarily to provisioning for new loans and commitments.
The provision for credit losses for the year ended December 31, 2025 was $7.6 million, compared to $5.7 million for the year ended December 31, 2024. The provision for credit losses for the year ended December 31, 2025 related primarily to provisioning for new loans and commitments.
The letters of credit are used to collateralize public fund deposit accounts in excess of FDIC insurance limits and have expirations ranging from January 2025 through October 2026 as of December 31, 2024. 58 Line of Credit - Senior Debt.
The letters of credit are used to collateralize public fund deposit accounts in excess of FDIC insurance limits and have expirations ranging from January 2026 through January 2027 as of December 31, 2025. Line of Credit - Senior Debt.
For the Year Ended December 31, 2024 2023 Sources of Funds: Deposits: Noninterest-bearing 10.1 % 12.2 % Interest-bearing 76.2 % 71.5 % FHLB advances 0.1 % 2.0 % Notes payable 2.6 % 2.9 % Other liabilities 1.3 % 1.2 % Shareholders’ equity, including ESOP-owned shares 9.7 % 10.2 % Total 100.0 % 100.0 % Uses of Funds: Loans, net 82.5 % 85.5 % Securities (available for sale and held to maturity) 6.3 % 5.0 % Federal funds sold and other interest-earning assets 6.9 % 4.7 % Other noninterest-earning assets 4.3 % 4.8 % Total 100.0 % 100.0 % Average noninterest-bearing deposits to average deposits 11.7 % 14.5 % Average total loans to average deposits 96.6 % 103.3 % Our primary source of funds is deposits, and our primary use of funds is loans.
For the Year Ended December 31, 2025 2024 Sources of Funds: Deposits: Noninterest-bearing 9.0 % 10.1 % Interest-bearing 76.9 % 76.2 % FHLB advances 0.7 % 0.1 % Notes payable 2.3 % 2.6 % Other liabilities 1.1 % 1.3 % Shareholders’ equity, including ESOP-owned shares 10.0 % 9.7 % Total 100.0 % 100.0 % Uses of Funds: Loans, net 82.0 % 82.5 % Investment securities available-for-sale 8.0 % 6.3 % Investment securities held-to-maturity 2.6 % 0.0 % Federal funds sold and other interest-earning assets 3.2 % 6.9 % Other noninterest-earning assets 4.2 % 4.3 % Total 100.0 % 100.0 % Average noninterest-bearing deposits to average deposits 10.5 % 11.7 % Average total loans to average deposits 96.4 % 96.6 % Our primary source of funds is deposits, and our primary use of funds is loans.
The FHLB allows us to borrow on a blanket floating lien status collateralized by FHLB stocks and real estate loans. As of December 31, 2024 and 2023, total borrowing capacity available under this arrangement was $623.7 million and $565.1 million, respectively. The Company had no FHLB advances outstanding at December 31, 2024 and 2023.
The FHLB allows us to borrow on a blanket floating lien status collateralized by FHLB stocks and real estate loans. As of December 31, 2025 and 2024, total borrowing capacity available under this arrangement was $499.5 million and $623.7 million, respectively. The Company had no FHLB advances outstanding at December 31, 2025 and 2024.
Note Payable - Subordinated Debt . On March 31, 2022, the Company issued and sold $82.3 million in aggregate principal amount of its 5.500% Fixed-to-Floating Rate Subordinated Notes due 2032. As of December 31, 2024, the outstanding balance was $80.8 million, net of $1.5 million in unamortized debt issuance costs.
Note Payable - Subordinated Debt . On March 31, 2022, the Company issued and sold $82.3 million in aggregate principal amount of its 5.500% Fixed-to-Floating Rate Subordinated Notes due 2032. As of December 31, 2025, the outstanding balance was $81.0 million, net of $1.3 million in unamortized debt issuance costs.
As of December 31, 2024 and 2023, total borrowing capacity under this arrangement was $1.5 billion and $1.2 billion, respectively. There were no advances outstanding at December 31, 2024 and 2023. Federal Funds Lines of Credit.
As of December 31, 2025 and 2024, total borrowing capacity under this arrangement was $1.5 billion. There were no advances outstanding at December 31, 2025 and 2024. Federal Funds Lines of Credit.
We do not expect a change in the primary source or use of our funds in the foreseeable future. As of December 31, 2024, we had $1.57 billion in outstanding commitments to extend credit and $14.0 million in commitments associated with outstanding standby and commercial letters of credit.
We do not expect a change in the primary source or use of our funds in the foreseeable future. As of December 31, 2025, we had $1.69 billion in outstanding commitments to extend credit and $97.0 million in commitments associated with outstanding standby and commercial letters of credit.
We have adopted insider trading policies and procedures governing the purchase, sale and other dispositions of our securities by our directors, officers and employees that are reasonably designed to promote compliance with insider trading laws, rules and regulations, and applicable listing standards of the Nasdaq Stock Market LLC.
We have adopted insider trading policies and procedures governing the purchase, sale and other dispositions of our securities by our directors, officers and employees that are reasonably designed to promote compliance with insider trading laws, rules and regulations, and applicable listing standards of the New York Stock Exchange.
As of December 31, 2024 and 2023, we had no exposure to future cash requirements associated with known uncertainties or capital expenditure of a material nature. As of December 31, 2024, we had cash and cash equivalents of $421.2 million, compared to $411.8 million as of December 31, 2023.
As of December 31, 2025 and 2024, we had no exposure to future cash requirements associated with known uncertainties or capital expenditure of a material nature. As of December 31, 2025, we had cash and cash equivalents of $181.2 million, compared to $421.2 million as of December 31, 2024.
For the year ended December 31, 2024, net interest margin and net interest spread were 3.67% and 2.81%, respectively, compared to 3.73% and 2.86%, respectively, for the year ended December 31, 2023. 48 The following table presents an analysis of net interest income and net interest spread for the periods indicated, including average outstanding balances for each major category of interest-earning assets and interest-bearing liabilities, the interest earned or paid on such amounts, and the average rate earned or paid on such assets or liabilities, respectively.
For the year ended December 31, 2025, net interest margin and net interest spread were 4.06% and 3.36%, respectively, compared to 3.67% and 2.81%, respectively, for the year ended December 31, 2024. 49 The following table presents an analysis of net interest income and net interest spread for the periods indicated, including average outstanding balances for each major category of interest-earning assets and interest-bearing liabilities, the interest earned or paid on such amounts, and the average rate earned or paid on such assets or liabilities, respectively.
Changes in Internal Control Over Financial Reporting There was no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified during the quarter ended December 31, 2024 that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Changes in Internal Control Over Financial Reporting There was no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified during the quarter ended December 31, 2025 that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 65 Report on Management's Assessment of Internal Control Over Financial Reporting.
Tier 1 leverage capital (to average assets) 9.12% 9.23% 4.00% 4.00% N/A Common equity tier 1 capital (to risk weighted assets) 8.41% 8.06% 4.50% 7.00% N/A Tier 1 capital (to risk weighted assets) 9.90% 9.70% 6.00% 8.50% N/A Total capital (to risk weighted assets) 12.68% 12.66% 8.00% 10.50% N/A Third Coast Bank Tier 1 leverage capital (to average assets) 11.37% 11.91% 4.00% 4.00% 5.00% Common equity tier 1 capital (to risk weighted assets) 12.35% 12.52% 4.50% 7.00% 6.50% Tier 1 capital (to risk weighted assets) 12.35% 12.52% 6.00% 8.50% 8.00% Total capital (to risk weighted assets) 13.29% 13.49% 8.00% 10.50% 10.00% 60 Use of Derivatives to Manage Interest Rate and Other Risks In the ordinary course of business, we enter into derivative transactions to manage various risks and to accommodate the business requirements of our customers.
Tier 1 leverage capital (to average assets) 9.65% 9.12% 4.00% 4.00% N/A Common equity tier 1 capital (to risk weighted assets) 8.65% 8.41% 4.50% 7.00% N/A Tier 1 capital (to risk weighted assets) 9.97% 9.90% 6.00% 8.50% N/A Total capital (to risk weighted assets) 12.48% 12.68% 8.00% 10.50% N/A Third Coast Bank Tier 1 leverage capital (to average assets) 11.84% 11.37% 4.00% 4.00% 5.00% Common equity tier 1 capital (to risk weighted assets) 12.23% 12.35% 4.50% 7.00% 6.50% Tier 1 capital (to risk weighted assets) 12.23% 12.35% 6.00% 8.50% 8.00% Total capital (to risk weighted assets) 13.14% 13.29% 8.00% 10.50% 10.00% Use of Derivatives to Manage Interest Rate and Other Risks In the ordinary course of business, we enter into derivative transactions to manage various risks and to accommodate the business requirements of our customers.
The following table summarizes our nonaccrual loans by category as of the dates indicated: As of December 31, (Dollars in thousands) 2024 2023 Nonaccrual loans by category: Real estate: Commercial real estate Non-farm non-residential owner occupied $ 10,433 $ 1,211 Non-farm non-residential non-owner occupied — 1,235 Residential 2,226 2,938 Construction, development and other 400 247 Commercial and industrial 13,714 11,018 Total nonaccrual loans $ 26,773 $ 16,649 54 Risk Gradings As part of the on-going monitoring of the credit quality of the Company's loan portfolio and methodology for calculating the allowance for credit losses, management assigns and tracks risk gradings as indicated below that are used as credit quality indicators.
The following table summarizes our nonaccrual loans by category as of the dates indicated: As of December 31, (Dollars in thousands) 2025 2024 Nonaccrual loans by category: Real estate: Commercial real estate Non-farm non-residential owner occupied $ 1,235 $ 10,433 Non-farm non-residential non-owner occupied 99 — Residential 387 2,226 Construction, development and other — 400 Commercial and industrial 8,399 13,714 Total nonaccrual loans $ 10,120 $ 26,773 Risk Gradings As part of the on-going monitoring of the credit quality of the Company's loan portfolio and methodology for calculating the allowance for credit losses, management assigns and tracks risk gradings as indicated below that are used as credit quality indicators.
As of December 31, 2023, we had $1.35 billion in outstanding commitments to extend credit and $26.9 million in commitments associated with outstanding standby and commercial letters of credit. Since commitments associated with letters of credit and commitments to extend credit may expire unused, the total outstanding may not necessarily reflect the actual future cash funding requirements.
As of December 31, 2024, we had $1.57 billion in outstanding commitments to extend credit and $14.0 million in commitments associated with outstanding standby and commercial letters of credit. Since commitments associated with letters of credit and commitments to extend credit may expire unused, the total outstanding may not necessarily reflect the actual future cash funding requirements.
In addition, the Company recognized $4,000 in losses on the sales of investment securities during the year ended December 31, 2024, compared to gains of $482,000 recognized during the year ended December 31, 2023.
In addition, the Company recognized $610,000 in losses on the sales of investment securities during the year ended December 31, 2025, compared to losses of $4,000 recognized during the year ended December 31, 2024.
Income tax expense and effective tax rates for the periods shown below were as follows: Year Ended December 31, (Dollars in thousands) 2024 2023 2022 Income tax expense $ 13,680 $ 8,211 $ 4,509 Effective tax rate 22.3 % 19.7 % 19.5 % Year ended December 31, 2024 vs.
Income tax expense and effective tax rates for the periods shown below were as follows: Year Ended December 31, (Dollars in thousands) 2025 2024 2023 Income tax expense $ 16,454 $ 13,680 $ 8,211 Effective tax rate 19.9 % 22.3 % 19.7 % Year ended December 31, 2025 vs.
At December 31, 2024 and 2023, the Company had federal funds lines of credit with commercial banks that provide for availability to borrow up to an aggregate of $36.5 million. The Company had no advances outstanding under these lines at December 31, 2024 and 2023.
At December 31, 2025 and 2024, the Company had federal funds lines of credit with commercial banks that provide for availability to borrow up to an aggregate of $36.5 million.
(2) Net interest margin is equal to net interest income divided by average interest-earning assets. (3) Interest earned/paid includes accretion of deferred loan fees, premiums and discounts. Interest income on loans includes loan fees and discount accretion of $16.5 million, $15.5 million, and $14.7 million for the years ended December 31, 2024, 2023, and 2022, respectively.
(2) Net interest margin is equal to net interest income divided by average interest-earning assets. (3) Interest earned/paid includes accretion of deferred loan fees, premiums and discounts. Interest income on loans includes loan fees and discount accretion of $13.4 million, $10.7 million, and $8.8 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Our current multifamily loans are to operators who we believe are seasoned and successful and possess quality alternative repayment sources. Residential real estate loans decreased $5.9 million, or 1.7%, to $336.7 million as of December 31, 2024 from $342.6 million as of December 31, 2023. Construction, Development and Other Loans.
Our current multifamily loans are to operators who we believe are seasoned and successful and possess quality alternative repayment sources. Residential real estate loans decreased $3.3 million, or 1.0%, to $333.4 million as of December 31, 2025 from $336.7 million as of December 31, 2024. Construction, Development and Other Loans.
The balance of the allowance for credit losses was based on internally assigned risk classifications of loans, historical loan loss rates, changes in the nature and volume of our loan portfolio, overall portfolio quality, industry or borrower concentrations, delinquency trends, current economic factors and the estimated impact of current economic conditions on certain historical loan loss rates, among other factors. 55 As of December 31, 2024, the allowance for credit losses on loans totaled $40.3 million, or 1.02% of total loans.
The balance of the allowance for credit losses was based on internally assigned risk classifications of loans, historical loan loss rates, changes in the nature and volume of our loan portfolio, overall portfolio quality, industry or borrower concentrations, delinquency trends, current economic factors and the estimated impact of current economic conditions on certain historical loan loss rates, among other factors.
An interest rate swap transaction allows customers to effectively convert a variable rate loan to a fixed rate. In connection with each swap, we agree to pay interest on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate.
In connection with each swap, we agree to pay interest on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate.
All derivatives are carried at fair value in either other assets or other liabilities in the accompanying consolidated balance sheets. At December 31, 2024, the Company's derivative assets and liabilities totaled $6.5 million and $8.7 million, respectively.
All derivatives are carried at fair value in either other assets or other liabilities in the accompanying consolidated balance sheets. At December 31, 2025, the Company's derivative assets and liabilities totaled $2.5 million and $3.1 million, respectively.
The facility was discontinued on October 4, 2024, and a gain of $755,000 was recognized by the Company. The gain is being accreted from other comprehensive income, net of deferred taxes, into interest expense through the maturity date of the contract.
The facility was discontinued on March 4, 2025, and a gain of $456,000 was recognized by the Company. The gain is being accreted from other comprehensive income, net of deferred taxes, as a reduction of interest expense through maturity date of the contract.
Our cost of FHLB advances was 5.25% for the year ended December 31, 2024 and 5.43% for the year ended December 31, 2023. In addition, letters of credit with the FHLB in the amount of $535.8 million and $463.1 million were outstanding at December 31, 2024 and 2023, respectively.
Our cost of FHLB advances was 4.41% for the year ended December 31, 2025 and 5.25% for the year ended December 31, 2024. In addition, letters of credit with the FHLB in the amount of $592.0 million and $535.8 million were outstanding at December 31, 2025 and 2024, respectively.
As of December 31, (Dollars in thousands) 2024 2023 FHLB borrowings $ — $ — Line of Credit - Senior Debt 30,875 38,875 Note Payable - Subordinated Debt 80,759 80,553 Total borrowings $ 111,634 $ 119,428 Federal Home Loan Bank (FHLB) Advances.
As of December 31, (Dollars in thousands) 2025 2024 FHLB borrowings $ — $ — Line of Credit - Senior Debt 37,875 30,875 Note Payable - Subordinated Debt 80,965 80,759 Total borrowings $ 118,840 $ 111,634 Federal Home Loan Bank (FHLB) Advances.
John McWhorter (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on March 15, 2024). 10.31 Renewal, Extension and Modification of Loan, effective March 12, 2024, by and among Third Coast Bancshares, Inc. and American National Bank & Trust (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on April 24, 2024). 10.32* Change of Control Bonus Agreement, dated as of December 2, 2024, by and between Third Coast Bank and Liz Eber. 10.33* Change of Control Bonus Agreement, dated as of December 2, 2024, by and between Third Coast Bank and Vicki Alexander. 19.1* Third Coast Bancshares, Inc.
John McWhorter (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on March 15, 2024). 10.31 Renewal, Extension and Modification of Loan, effective March 12, 2024, by and among Third Coast Bancshares, Inc. and American National Bank & Trust (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on April 24, 2024). 10.32 Change of Control Bonus Agreement, dated as of December 2, 2024, by and between Third Coast Bank and Liz Eber (incorporated by reference to Exhibit 10.32 to the Company's Annual Report on Form 10-K filed with the SEC on March 5, 2025). 69 10.33 Separation Agreement and Release, dated December 1, 2025, between Third Coast Bank and Vicki Alexander (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on December 5, 2025). 10.34 Form of Keystone Voting Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 27, 2025). 10.35 Form of Keystone Director Support Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 27, 2025). 10.36 Employment Agreement, dated as of October 22, 2025, by and between Jeff Wilkinson, Third Coast Bank, Keystone Bank, SSB, and Third Coast Bancshares, Inc.
No provision for credit losses for securities was recorded for the year ended December 31, 2024. As of December 31, 2024, the allowance for credit losses for loans totaled $40.3 million, or 1.02% of total loans, compared to $37.0 million, or 1.02% of total loans, as of December 31, 2023.
No provision for credit losses for securities was recorded for the years ended December 31, 2025 and 2024. As of December 31, 2025, the allowance for credit losses for loans totaled $43.9 million, or 1.00% of total loans, compared to $40.3 million, or 1.02% of total loans, as of December 31, 2024.
The increase relates primarily to net purchases of $4.24 billion in agencies, municipal securities, mortgage-back securities and corporate bonds offset by maturities, calls and paydowns of $4.04 billion for the year ended December 31, 2024. Investment securities represented 7.8% and 4.1% of total assets as of December 31, 2024 and 2023, respectively.
The decrease relates primarily to net purchases of $5.15 billion in agencies, municipal securities, mortgage-back securities and corporate bonds offset by maturities, calls and paydowns of $5.17 billion for the year ended December 31, 2025. Investment securities available-for-sale represented 7.2% and 7.8% of total assets as of December 31, 2025 and 2024, respectively.
Emerging Growth Company The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act. As an emerging growth company, the Company has taken advantage of reduced reporting and other requirements that are otherwise generally applicable to public companies.
As an emerging growth company, the Company has taken advantage of reduced reporting and other requirements that are otherwise generally applicable to public companies.
We had $28.8 million in nonperforming assets as of December 31, 2024, compared to $17.3 million as of December 31, 2023. As of December 31, 2024, the nonperforming assets to total assets was 0.58%, compared to 0.39% as of December 31, 2023.
We had $29.9 million in nonperforming assets as of December 31, 2025, compared to $28.8 million as of December 31, 2024. As of December 31, 2025, the nonperforming assets to total assets was 0.56%, compared to 0.58% as of December 31, 2024.
The gain is being accreted from other comprehensive income, net of deferred taxes, into interest expense through the maturity date of the contracts. During March 2023, we entered into a five-year pay-fixed interest rate swap agreement with a notional amount of $200 million.
The gain is being accreted from other comprehensive income, net of deferred taxes, into interest expense through the maturity date of the contract. During December 2023, we entered into two five-year pay-fixed interest rate swap agreements with notional amounts of $100 million each.
At December 31, 2024 and 2023, the allowance for credit losses for unfunded loan commitments was $1.4 million and $2.4 million, respectively. No allowance for credit losses for securities was recorded as of December 31, 2024 and 2023.
At December 31, 2025 and 2024, the allowance for credit losses for off-balance sheet commitments was $1.8 million and $1.4 million, respectively. No allowance for credit losses for securities was recorded as of December 31, 2025 and 2024.
Liquidity and Capital Resources Liquidity Liquidity involves our ability to raise funds to support asset growth and acquisitions or reduce assets to meet deposit withdrawals and other payment obligations, to maintain reserve requirements and otherwise to operate on an ongoing basis and manage unexpected events.
The Company had no advances outstanding under these lines at December 31, 2025 and 2024. 60 Liquidity and Capital Resources Liquidity Liquidity involves our ability to raise funds to support asset growth and acquisitions or reduce assets to meet deposit withdrawals and other payment obligations, to maintain reserve requirements and otherwise to operate on an ongoing basis and manage unexpected events.
Total loans as a percentage of assets were 80.3% and 82.8% as of December 31, 2024 and 2023, respectively.
Total loans as a percentage of deposits were 95.0% and 92.0% as of December 31, 2025 and 2024, respectively. Total loans as a percentage of assets were 82.3% and 80.3% as of December 31, 2025 and 2024, respectively.
Deposits Total deposits as of December 31, 2024 were $4.31 billion, an increase of $507.4 million, or 13.3%, compared to $3.80 billion as of December 31, 2023.
Deposits Total deposits as of December 31, 2025 were $4.63 billion, an increase of $316.4 million, or 7.3%, compared to $4.31 billion as of December 31, 2024.
Noninterest expense also includes operational expenses, such as occupancy expenses, depreciation and amortization of our facilities and our furniture, fixtures and office equipment, legal and professional fees, data processing and network expenses, regulatory fees, including FDIC assessments, advertising and marketing expenses, and loan operations related expenses. 50 The following table presents, for the periods indicated, the major categories of noninterest expense: For the Year Ended December 31, For the Year Ended December 31, (Dollars in thousands) 2024 2023 Increase (Decrease) 2023 2022 Increase (Decrease) Noninterest Expense: Salaries and employee benefits $ 65,116 $ 62,217 $ 2,899 4.7 % $ 62,217 $ 56,510 $ 5,707 10.1 % Net occupancy and equipment expenses 12,712 11,285 1,427 12.6 % 11,285 8,526 2,759 32.4 % Other: Legal and professional fees 5,630 7,783 (2,153 ) (27.7 )% 7,783 6,987 796 11.4 % Data processing and network expenses 5,254 4,735 519 11.0 % 4,735 3,947 788 20.0 % Regulatory assessments 4,430 2,598 1,832 70.5 % 2,598 3,464 (866 ) (25.0 )% Advertising and marketing expenses 1,707 2,627 (920 ) (35.0 )% 2,627 1,912 715 37.4 % Software purchases and maintenance 3,265 2,375 890 37.5 % 2,375 1,012 1,363 134.7 % Loan operations 904 673 231 34.3 % 673 988 (315 ) (31.9 )% Telephone and communications 585 510 75 14.7 % 510 496 14 2.8 % Loss on sale of other real estate owned — — — — — 350 (350 ) (100.0 )% Other expenses 4,724 4,995 (271 ) (5.4 )% 4,995 4,117 878 21.3 % Total noninterest expense $ 104,327 $ 99,798 $ 4,529 4.5 % $ 99,798 $ 88,309 $ 11,489 13.0 % Year ended December 31, 2024 vs.
Noninterest expense also includes operational expenses, such as occupancy expenses, depreciation and amortization of our facilities and our furniture, fixtures and office equipment, legal and professional fees, data processing and network expenses, regulatory fees, including FDIC assessments, advertising and marketing expenses, and loan operations related expenses. 51 The following table presents, for the periods indicated, the major categories of noninterest expense: For the Year Ended December 31, For the Year Ended December 31, (Dollars in thousands) 2025 2024 Increase (Decrease) 2024 2023 Increase (Decrease) Noninterest Expense: Salaries and employee benefits $ 77,189 $ 65,116 $ 12,073 18.5 % $ 65,116 $ 62,217 $ 2,899 4.7 % Net occupancy and equipment expenses 11,323 11,093 230 2.1 % 11,093 11,285 (192 ) (1.7 )% Other: Legal and professional fees 7,462 5,630 1,832 32.5 % 5,630 7,783 (2,153 ) (27.7 )% Data processing and network expenses 4,572 5,254 (682 ) (13.0 )% 5,254 4,735 519 11.0 % Regulatory assessments 4,833 4,430 403 9.1 % 4,430 2,598 1,832 70.5 % Advertising and marketing expenses 2,144 1,707 437 25.6 % 1,707 2,627 (920 ) (35.0 )% Software purchases and maintenance 4,569 4,884 (315 ) (6.4 )% 4,884 2,375 2,509 105.6 % Loan operations and other real estate owned expense 1,134 904 230 25.4 % 904 673 231 34.3 % Telephone and communications 550 585 (35 ) (6.0 )% 585 510 75 14.7 % Other expenses 4,761 4,724 37 0.8 % 4,724 4,995 (271 ) (5.4 )% Total noninterest expense $ 118,537 $ 104,327 $ 14,210 13.6 % $ 104,327 $ 99,798 $ 4,529 4.5 % Year ended December 31, 2025 vs.
Owner occupied commercial real estate loans decreased $72.7 million, or 14.0%, to $448.1 million as of December 31, 2024 from $520.8 million as of December 31, 2023.
Owner occupied commercial real estate loans decreased $13.4 million, or 3.0%, to $434.7 million as of December 31, 2025 from $448.1 million as of December 31, 2024.
Capital Resources Total shareholders’ equity increased to $460.7 million as of December 31, 2024, compared to $412.0 million as of December 31, 2023, an increase of $48.7 million, or 11.8%.
Capital Resources Total shareholders’ equity increased to $531.0 million as of December 31, 2025, compared to $460.7 million as of December 31, 2024, an increase of $70.3 million, or 15.3%.
For the Year Ended December 31, For the Year Ended December 31, (Dollars in thousands) 2024 2023 Increase (Decrease) 2023 2022 Increase (Decrease) Interest income $ 328,356 $ 266,544 $ 61,812 23.2 % $ 266,544 $ 153,946 $ 112,598 73.1 % Interest expense 167,598 127,019 40,579 31.9 % 127,019 37,492 89,527 238.8 % Net interest income 160,758 139,525 21,233 15.2 % 139,525 116,454 23,071 19.8 % Provision for credit losses 5,701 6,320 (619 ) (9.8 )% 6,320 12,200 (5,880 ) (48.2 )% Noninterest income 10,621 8,205 2,416 29.4 % 8,205 7,223 982 13.6 % Noninterest expense 104,327 99,798 4,529 4.5 % 99,798 88,309 11,489 13.0 % Income before income taxes 61,351 41,612 19,739 47.4 % 41,612 23,168 18,444 79.6 % Income tax expense 13,680 8,211 5,469 66.6 % 8,211 4,509 3,702 82.1 % Net income $ 47,671 $ 33,401 $ 14,270 42.7 % $ 33,401 $ 18,659 $ 14,742 79.0 % Net Interest Income Our operating results depend primarily on our net interest income, calculated as the difference between interest income on interest-earning assets, such as loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings.
For the Year Ended December 31, For the Year Ended December 31, (Dollars in thousands) 2025 2024 Increase (Decrease) 2024 2023 Increase (Decrease) Interest income $ 354,030 $ 328,356 $ 25,674 7.8 % $ 328,356 $ 266,544 $ 61,812 23.2 % Interest expense 158,813 167,598 (8,785 ) (5.2 )% 167,598 127,019 40,579 31.9 % Net interest income 195,217 160,758 34,459 21.4 % 160,758 139,525 21,233 15.2 % Provision for credit losses 7,588 5,701 1,887 33.1 % 5,701 6,320 (619 ) (9.8 )% Noninterest income 13,653 10,621 3,032 28.5 % 10,621 8,205 2,416 29.4 % Noninterest expense 118,537 104,327 14,210 13.6 % 104,327 99,798 4,529 4.5 % Income before income taxes 82,745 61,351 21,394 34.9 % 61,351 41,612 19,739 47.4 % Income tax expense 16,454 13,680 2,774 20.3 % 13,680 8,211 5,469 66.6 % Net income $ 66,291 $ 47,671 $ 18,620 39.1 % $ 47,671 $ 33,401 $ 14,270 42.7 % Net Interest Income Our operating results depend primarily on our net interest income, calculated as the difference between interest income on interest-earning assets, such as loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings.
These financial instruments are not designated as hedging instruments. The interest rate swap derivative positions relate to transactions in which we enter into an interest rate swap with a customer, while at the same time entering into an offsetting interest rate swap with another financial institution.
The interest rate swap derivative positions relate to transactions in which we enter into an interest rate swap with a customer, while at the same time entering into an offsetting interest rate swap with another financial institution. An interest rate swap transaction allows customers to effectively convert a variable rate loan to a fixed rate.
For the Year Ended December 31, 2024 2023 2022 (Dollars in thousands) Average Outstanding Balance Interest Earned/ Paid (3) Average Yield/ Rate Average Outstanding Balance Interest Earned/ Paid (3) Average Yield/ Rate Average Outstanding Balance Interest Earned/ Paid (3) Average Yield/ Rate Assets Interest-earnings assets: Loans, gross $ 3,786,776 $ 295,259 7.80 % $ 3,366,180 $ 248,911 7.39 % $ 2,694,428 $ 146,425 5.43 % Investment securities 286,039 17,055 5.96 % 197,286 8,313 4.21 % 129,507 3,925 3.03 % Federal funds sold and other interest- earning assets 312,590 16,042 5.13 % 181,782 9,320 5.13 % 223,781 3,596 1.61 % Total interest-earning assets 4,385,405 328,356 7.49 % 3,745,248 266,544 7.12 % 3,047,716 153,946 5.05 % Less allowance for credit losses (38,500 ) (36,750 ) (25,600 ) Total interest-earning assets, net of allowance 4,346,905 3,708,498 3,022,116 Noninterest-earning assets 194,775 188,514 178,135 Total assets $ 4,541,680 $ 3,897,012 $ 3,200,251 Liabilities and Shareholders’ Equity Interest-bearing liabilities: Interest-bearing deposits $ 3,459,151 $ 159,748 4.62 % $ 2,785,605 $ 115,044 4.13 % $ 2,377,079 $ 30,696 1.29 % Notes payable 116,222 7,617 6.55 % 113,552 7,657 6.74 % 77,317 4,605 5.96 % FHLB advances 4,438 233 5.25 % 79,546 4,318 5.43 % 81,083 2,191 2.70 % Total interest-bearing liabilities 3,579,811 167,598 4.68 % 2,978,703 127,019 4.26 % 2,535,479 37,492 1.48 % Noninterest-bearing deposits 460,537 473,558 313,972 Other liabilities 61,148 47,527 27,115 Total liabilities 4,101,496 3,499,788 2,876,566 Shareholders’ equity, including ESOP owned shares 440,184 397,224 323,685 Total liabilities and shareholders’ equity $ 4,541,680 $ 3,897,012 $ 3,200,251 Net interest income $ 160,758 $ 139,525 $ 116,454 Net interest spread (1) 2.81 % 2.86 % 3.57 % Net interest margin (2) 3.67 % 3.73 % 3.82 % (1) Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
For the Year Ended December 31, 2025 2024 2023 (Dollars in thousands) Average Outstanding Balance Interest Earned/ Paid (3) Average Yield/ Rate Average Outstanding Balance Interest Earned/ Paid (3) Average Yield/ Rate Average Outstanding Balance Interest Earned/ Paid (3) Average Yield/ Rate Assets Interest-earnings assets: Loans, gross $ 4,119,536 $ 316,215 7.68 % $ 3,786,776 $ 295,259 7.80 % $ 3,366,180 $ 248,911 7.39 % Investment securities available-for-sale 397,618 23,951 6.02 % 286,039 17,055 5.96 % 197,286 8,313 4.21 % Investment securities held-to-maturity 130,689 7,170 5.49 % — — — — — — Federal funds sold and other interest- earning assets 161,198 6,694 4.15 % 312,590 16,042 5.13 % 181,782 9,320 5.13 % Total interest-earning assets 4,809,041 354,030 7.36 % 4,385,405 328,356 7.49 % 3,745,248 266,544 7.12 % Less allowance for credit losses (41,164 ) (38,500 ) (36,750 ) Total interest-earning assets, net of allowance 4,767,877 4,346,905 3,708,498 Noninterest-earning assets 207,824 194,775 188,514 Total assets $ 4,975,701 $ 4,541,680 $ 3,897,012 Liabilities and Shareholders’ Equity Interest-bearing liabilities: Interest-bearing deposits $ 3,826,293 $ 150,321 3.93 % $ 3,459,151 $ 159,748 4.62 % $ 2,785,605 $ 115,044 4.13 % Notes payable 113,953 6,987 6.13 % 116,222 7,617 6.55 % 113,552 7,657 6.74 % FHLB advances 34,113 1,505 4.41 % 4,438 233 5.25 % 79,546 4,318 5.43 % Total interest-bearing liabilities 3,974,359 158,813 4.00 % 3,579,811 167,598 4.68 % 2,978,703 127,019 4.26 % Noninterest-bearing deposits 446,692 460,537 473,558 Other liabilities 55,335 61,148 47,527 Total liabilities 4,476,386 4,101,496 3,499,788 Shareholders’ equity, including ESOP owned shares 499,315 440,184 397,224 Total liabilities and shareholders’ equity $ 4,975,701 $ 4,541,680 $ 3,897,012 Net interest income $ 195,217 $ 160,758 $ 139,525 Net interest spread (1) 3.36 % 2.81 % 2.86 % Net interest margin (2) 4.06 % 3.67 % 3.73 % (1) Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
The following table summarizes our loan portfolio by type of loan as of the dates indicated: As of December 31, 2024 2023 (Dollars in thousands) Amount Percent Amount Percent Real estate: Commercial real estate: Non-farm non-residential owner occupied $ 448,134 11.3 % $ 520,822 14.3 % Non-farm non-residential non-owner occupied 652,119 16.4 % 586,626 16.1 % Residential 336,736 8.5 % 342,589 9.4 % Construction, development and other 871,373 22.0 % 693,553 19.1 % Farmland 30,915 0.8 % 30,396 0.8 % Commercial and industrial 1,497,408 37.8 % 1,263,077 34.7 % Consumer 1,859 0.0 % 2,555 0.1 % Municipal and other 127,881 3.2 % 199,170 5.5 % Total loans $ 3,966,425 100.0 % $ 3,638,788 100.0 % Commercial Real Estate Loans.
The following table summarizes our loan portfolio by type of loan as of the dates indicated: As of December 31, 2025 2024 (Dollars in thousands) Amount Percent Amount Percent Real estate: Commercial real estate: Non-farm non-residential owner occupied $ 434,715 9.9 % $ 448,134 11.3 % Non-farm non-residential non-owner occupied 710,401 16.2 % 652,119 16.4 % Residential 333,419 7.6 % 336,736 8.5 % Construction, development and other 823,353 18.7 % 871,373 22.0 % Farmland 26,485 0.6 % 30,915 0.8 % Commercial and industrial 1,906,616 43.4 % 1,497,408 37.8 % Consumer 1,576 0.0 % 1,859 0.0 % Municipal and other 158,186 3.6 % 127,881 3.2 % Total loans $ 4,394,751 100.0 % $ 3,966,425 100.0 % Commercial Real Estate Loans.
As of December 31, 2023, the allowance for credit losses on loans totaled $37.0 million, or 1.02% of total loans.
As of December 31, 2025, the allowance for credit losses on loans totaled $43.9 million, or 1.00% of total loans. As of December 31, 2024, the allowance for credit losses on loans totaled $40.3 million, or 1.02% of total loans.
The facility, which was scheduled to mature on March 31, 2028, was discontinued on May 26, 2023, and a gain of $5.0 million was recognized by the Company. The gain is being accreted from other comprehensive income (loss), net of deferred taxes, into interest expense through the maturity date of the contract.
The facilities, which were scheduled to mature on December 6, 2028 and December 21, 2028, were discontinued on April 10, 2024, and a combined gain of $5.4 million was recognized by the Company. The gain is being accreted from other comprehensive income, net of deferred taxes, into interest expense through the maturity date of the contracts.
Average loans were $3.79 billion for the year ended December 31, 2024, compared to $3.37 billion for the year ended December 31, 2023 with the increase primarily due to loan growth in commercial and industrial loans and construction and development real estate loans.
Average loans were $4.12 billion for the year ended December 31, 2025, compared to $3.79 billion for the year ended December 31, 2024, with the increase primarily due to loan growth in commercial and industrial loans. Average yield on loans was 7.68% for the year ended December 31, 2025, compared to 7.80% for the year ended December 31, 2024.
Average interest-bearing deposits were $3.46 billion for the year ended December 31, 2024, compared to $2.79 billion for the year ended December 31, 2023. The average cost of interest-bearing deposits was 4.62% for the year ended December 31, 2024 and 4.13% for the year ended December 31, 2023.
The average cost of interest-bearing deposits was 3.93% for the year ended December 31, 2025 and 4.62% for the year ended December 31, 2024.
All supplemental schedules to the consolidated financial statements have been omitted as inapplicable or because the required information is included in the Company’s consolidated financial statements or the notes thereto included in this Annual Report on Form 10-K. E xhibit Index Exhibit Number Description 3.1 First Amended and Restated Certificate of Formation of Third Coast Bancshares, Inc.
All supplemental schedules to the consolidated financial statements have been omitted as inapplicable or because the required information is included in the Company’s consolidated financial statements or the notes thereto included in this Annual Report on Form 10-K.
The following table presents, for the periods indicated, the major categories of noninterest income: For the Year Ended December 31, For the Year Ended December 31, (Dollars in thousands) 2024 2023 Increase (Decrease) 2023 2022 Increase Noninterest Income: Service charges and fees $ 6,935 $ 3,233 $ 3,702 114.5 % $ 3,233 $ 2,714 $ 519 19.1 % Earnings on bank-owned life insurance 2,480 2,101 379 18.0 % 2,101 1,312 789 60.1 % (Loss) gain on sale of investment securities available-for-sale (4 ) 482 (486 ) (100.8 )% 482 — 482 100.0 % Gain on sale of SBA loans 30 440 (410 ) (93.2 )% 440 950 (510 ) (53.7 )% Derivative fees 437 763 (326 ) (42.7 )% 763 1,259 (496 ) (39.4 )% Other 743 1,186 (443 ) (37.4 )% 1,186 988 198 20.0 % Total noninterest income $ 10,621 $ 8,205 $ 2,416 29.4 % $ 8,205 $ 7,223 $ 982 13.6 % Year ended December 31, 2024 vs.
The following table presents, for the periods indicated, the major categories of noninterest income: For the Year Ended December 31, For the Year Ended December 31, (Dollars in thousands) 2025 2024 Increase (Decrease) 2024 2023 Increase (Decrease) Noninterest Income: Service charges and fees $ 10,759 $ 6,935 $ 3,824 55.1 % $ 6,935 $ 3,233 $ 3,702 114.5 % Earnings on bank-owned life insurance 3,017 2,480 537 21.7 % 2,480 2,101 379 18.0 % (Loss) gain on sale of investment securities available-for-sale (610 ) (4 ) (606 ) (15150.0 )% (4 ) 482 (486 ) (100.8 )% Gain on sale of SBA loans 74 30 44 146.7 % 30 440 (410 ) (93.2 )% Other 413 1,180 (767 ) (65.0 )% 1,180 1,949 (769 ) (39.5 )% Total noninterest income $ 13,653 $ 10,621 $ 3,032 28.5 % $ 10,621 $ 8,205 $ 2,416 29.4 % Year ended December 31, 2025 vs.
Year ended December 31, 2023 For the years ended December 31, 2024 and 2023, income tax expense totaled $13.7 million and $8.2 million, respectively. Our effective tax rates were at 22.3% and 19.7% for the years ended December 31, 2024 and 2023, respectively.
Year ended December 31, 2024 For the years ended December 31, 2025 and 2024, income tax expense totaled $16.5 million and $13.7 million, respectively. Our effective tax rates were at 19.9% and 22.3% for the years ended December 31, 2025 and 2024, respectively. The decrease in effective tax rate was primarily due to tax credit purchased in 2025.
The increase was primarily a result of increased productivity of existing lenders in response to market demand. Other Loan Categories. Other categories of loans included in our loan portfolio include farmland loans, lease financing, Bond Anticipation Notes (BANs), consumer loans, and agricultural loans made to farmers and ranchers relating to their operations.
Other categories of loans included in our loan portfolio include farmland loans, lease financing, Bond Anticipation Notes (BANs), consumer loans, and agricultural loans made to farmers and ranchers relating to their operations. None of these categories of loans represents a material portion of our total loan portfolio.
As of December 31, 2024, we had, on a consolidated basis, total assets of $4.94 billion, total loans of $3.97 billion, total deposits of $4.31 billion and total shareholders’ equity of $460.7 million.
As of December 31, 2025, we had, on a consolidated basis, total assets of $5.34 billion, total loans of $4.39 billion, total deposits of $4.63 billion and total shareholders’ equity of $531.0 million.
The following table presents the average balances and average rates paid on deposits for the periods indicated: Year Ended December 31, 2024 2023 (Dollars in thousands) Average Balance Average Rate Average Balance Average Rate Noninterest-bearing deposits $ 460,537 — $ 473,558 — Interest-bearing demand deposits 2,876,218 4.60 % 2,332,972 4.14 % Savings 34,743 2.16 % 29,282 0.51 % Time deposits 548,190 4.89 % 423,351 4.30 % Total interest-bearing deposits 3,459,151 4.62 % 2,785,605 4.13 % Total deposits $ 3,919,688 4.08 % $ 3,259,163 3.53 % The ratio of average noninterest-bearing deposits to average total deposits for the years ended December 31, 2024 and 2023 was 11.7% and 14.5%, respectively.
The following table presents the average balances and average rates paid on deposits for the periods indicated: Year Ended December 31, 2025 2024 (Dollars in thousands) Average Balance Average Rate Average Balance Average Rate Noninterest-bearing deposits $ 446,692 — $ 460,537 — Interest-bearing demand deposits 3,083,658 3.85 % 2,876,218 4.60 % Savings 23,668 1.12 % 34,743 2.16 % Time deposits 718,967 4.38 % 548,190 4.89 % Total interest-bearing deposits 3,826,293 3.93 % 3,459,151 4.62 % Total deposits $ 4,272,985 3.52 % $ 3,919,688 4.08 % The ratio of average noninterest-bearing deposits to average total deposits for the years ended December 31, 2025 and 2024 was 10.5% and 11.7%, respectively.
For the Year Ended December 31, 2024 compared to 2023 For the Year Ended December 31, 2023 compared to 2022 Increase (Decrease) Due to Changes In Total Increase Increase (Decrease) Due to Changes In Total Increase (Dollars in thousands) Volume Rate (Decrease) Volume Rate (Decrease) Interest-earning assets: Loans, gross $ 31,101 $ 15,247 $ 46,348 $ 36,505 $ 65,981 $ 102,486 Investment securities 3,740 5,002 8,742 2,054 2,334 4,388 Federal funds sold and other interest-earning assets 6,707 15 6,722 (675 ) 6,399 5,724 Total increase in interest income $ 41,548 $ 20,264 $ 61,812 $ 37,884 $ 74,714 $ 112,598 Interest-bearing liabilities: Interest-bearing deposits $ 27,817 $ 16,887 $ 44,704 $ 5,275 $ 79,073 $ 84,348 Notes payable 180 (220 ) (40 ) 2,158 894 3,052 FHLB advances (4,077 ) (8 ) (4,085 ) (42 ) 2,169 2,127 Total increase in interest expense $ 23,920 $ 16,659 $ 40,579 $ 7,391 $ 82,136 $ 89,527 Increase (decrease) in net interest income $ 17,628 $ 3,605 $ 21,233 $ 30,493 $ (7,422 ) $ 23,071 49 Provision for Credit Losses Provision for credit losses is determined by management as the amount to be added to the allowance for credit losses account for various types of financial instruments, including loans, securities and off-balance sheet credit exposures, to bring the allowances to a level which, in management's best estimate, is necessary to absorb expected credit losses over the lives of the respective financial instruments.
For the Year Ended December 31, 2025 compared to 2024 For the Year Ended December 31, 2024 compared to 2023 Increase (Decrease) Due to Changes In Total Increase Increase (Decrease) Due to Changes In Total Increase (Dollars in thousands) Volume Rate (Decrease) Volume Rate (Decrease) Interest-earning assets: Loans, gross $ 25,946 $ (4,990 ) $ 20,956 $ 31,101 $ 15,247 $ 46,348 Investment securities available-for-sale 6,653 243 6,896 3,740 5,002 8,742 Investment securities held-to-maturity 7,170 — 7,170 — — — Federal funds sold and other interest-earning assets (7,769 ) (1,579 ) (9,348 ) 6,707 15 6,722 Total increase (decrease) in interest income $ 32,000 $ (6,326 ) $ 25,674 $ 41,548 $ 20,264 $ 61,812 Interest-bearing liabilities: Interest-bearing deposits $ 16,955 $ (26,382 ) $ (9,427 ) $ 27,817 $ 16,887 $ 44,704 Notes payable (149 ) (481 ) (630 ) 180 (220 ) (40 ) FHLB advances 1,558 (286 ) 1,272 (4,077 ) (8 ) (4,085 ) Total increase (decrease) in interest expense $ 18,364 $ (27,149 ) $ (8,785 ) $ 23,920 $ 16,659 $ 40,579 Increase in net interest income $ 13,636 $ 20,823 $ 34,459 $ 17,628 $ 3,605 $ 21,233 50 Provision for Credit Losses Provision for credit losses is determined by management as the amount to be added to the allowance for credit losses account for various types of financial instruments, including loans, securities and off-balance sheet credit exposures, to bring the allowances to a level which, in management's best estimate, is necessary to absorb expected credit losses over the lives of the respective financial instruments.
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