Third Coast Bancshares, Inc. Reports 2026 Third Quarter Financial Results

Third Coast Bancshares posts solid Q3 results and announces a $239.6M all-stock acquisition.

What the company is saying

Third Coast Bancshares reports third quarter 2026 financials, emphasizing steady profitability and continued growth. The company highlights net income of $19.0 million, basic EPS of $1.07, and diluted EPS of $0.93, with adjusted net income at $21.6 million excluding $3.2 million in acquisition-related expenses. Management, led by Founder, Chairman, President, and CEO Bart Caraway, frames the quarter as demonstrating franchise strength, disciplined growth, and stable credit performance. The announcement spotlights a definitive merger agreement to acquire Great Plains Bancshares in an all-stock deal valued at $239.6 million, expected to close in Q1 2027. The company attributes the sequential decline in net income primarily to lower gains on sale of factored receivables and higher M&A expenses. The tone is confident, with claims that the merger will enhance franchise value and earnings durability.

What the data suggests

The numbers show net income of $19.0 million for Q3 2026, down from $22.0 million in Q2 2026 but up from $18.1 million in Q3 2025. Adjusted net income, excluding $3.2 million in acquisition costs, was $21.6 million. Basic and diluted EPS were $1.07 and $0.93, respectively, with adjusted diluted EPS at $1.06. Net interest margin declined to 3.70% from 3.83% in the prior quarter and 4.10% a year ago. Gross loans increased to $5.49 billion, up 1.1% sequentially and 31.9% year-over-year. Deposits reached $5.92 billion, up 1.2% from Q2 and 35.5% from Q3 2025. Book value per share rose to $36.53, and tangible book value per share to $33.31. Asset quality remained stable, with nonperforming loans at $29.0 million and allowance for credit losses at $54.4 million (0.99% of loans). The efficiency ratio worsened to 63.10% from 56.51% in Q2. The $239.6 million Great Plains acquisition is contractually agreed but not yet closed. The data supports management’s claims of growth and franchise strength, though margin and efficiency pressures are evident.

Analysis

The announcement provides a comprehensive and factual disclosure of Third Coast Bancshares, Inc.'s third quarter 2026 financial results, including realized figures for net income, EPS, loan and deposit growth, and asset quality. The only forward-looking claim of note is the expected closing of the $239.6 million all-stock acquisition of Great Plains Bancshares, Inc. in Q1 2027, which is a near-term event and supported by a signed definitive agreement. The tone is positive but proportionate to the results, with no exaggerated language or unsupported projections. The capital intensity flag is set due to the large M&A transaction, but the benefits and risks are clearly disclosed and the transaction is already contractually agreed. There is no evidence of narrative inflation or overstatement; the language matches the underlying data.

Risk flags

• ●The efficiency ratio increased to 63.10% from 56.51% in the prior quarter, indicating rising operating costs relative to revenue, which could pressure profitability if not addressed.
• ●Net interest margin declined to 3.70% from 3.83% in Q2 and 4.10% a year ago, reflecting margin compression that may continue if funding costs rise or loan yields decline.
• ●The $239.6 million all-stock acquisition of Great Plains Bancshares introduces integration and execution risk, as the transaction is not expected to close until Q1 2027 and remains subject to regulatory and shareholder approvals.
• ●Nonperforming loans increased to $29.0 million, and while asset quality ratios remain stable, any further deterioration could impact credit costs and earnings.
• ●The sequential decline in net income was driven by lower gains on sale of factored receivables and higher M&A expenses, suggesting earnings volatility tied to non-core items and transaction costs.

Bottom line

Third Coast Bancshares delivered a solid Q3 2026 with net income of $19.0 million and continued loan and deposit growth, though profitability metrics such as net interest margin and efficiency ratio moved in the wrong direction. The company’s all-stock $239.6 million acquisition of Great Plains Bancshares is a significant strategic move, but its benefits will not be realized until after closing, targeted for Q1 2027. Integration, regulatory approval, and efficiency improvements are key execution risks. The data supports management’s growth narrative, but investors should watch for further margin compression and operating cost trends. The most important takeaway is that while the franchise is expanding, near-term profitability faces headwinds and the merger’s value will depend on successful integration and cost control.

Announcement summary

(NYSE:AND) Third Coast Bancshares, Inc. reported its 2026 third quarter financial results, highlighting a return on average assets of 1.13% annualized for the third quarter of 2026, compared to 1.34% for the second quarter of 2026 and 1.41% for the third quarter of 2025. Return on average assets as adjusted (non-GAAP) annualized for the third quarter of 2026 was 1.29%. Net interest margin was 3.70% for the third quarter of 2026, compared to 3.83% for the second quarter of 2026 and 4.10% for the third quarter of 2025. Net income for the third quarter of 2026 totaled $19.0 million, or $1.07 and $0.93 per basic and diluted share, respectively. This compares to $22.0 million, or $1.25 and $1.08 per basic and diluted share, respectively, for the second quarter of 2026, and $18.1 million, or $1.22 and $1.03 per basic and diluted share, respectively, for the third quarter of 2025. Excluding $3.2 million of acquisition-related expenses in the third quarter of 2026, net income as adjusted (non-GAAP) was $21.6 million, or $1.06 per diluted share as adjusted. The efficiency ratio was 63.10% for the third quarter of 2026, compared to 56.51% for the second quarter of 2026 and 53.03% for the third quarter of 2025. Gross loans grew to $5.49 billion as of September 30, 2026, from $5.44 billion as of June 30, 2026. Book value per common share and tangible book value per common share increased to $36.53 and $33.31, respectively, as of September 30, 2026, compared to $36.34 and $33.08 as of June 30, 2026, and $32.25 and $30.91 as of September 30, 2025. Noninterest bearing demand deposits increased $78.4 million to $721.2 million, or 12.2% of total deposits as of September 30, 2026, compared to 11.0% as of June 30, 2026. On October 7, 2026, the company announced a definitive merger agreement to acquire Great Plains Bancshares, Inc., the parent company of Great Plains National Bank, in an all-stock transaction valued at approximately $239.6 million based on the company's closing stock price as of October 6, 2026. The transaction is expected to close in the first quarter of 2027. Net income available to common shareholders totaled $17.8 million for the third quarter of 2026, compared to $20.8 million for the second quarter of 2026 and $16.9 million for the third quarter of 2025. Dividends on Series A Convertible Non-Cumulative Preferred Stock totaled $1.2 million for each of the quarters ended September 30, 2026, June 30, 2026, and September 30, 2025. In the third quarter of 2026, diluted earnings per common share as adjusted (non-GAAP) was $1.06, compared to $0.98 in the second quarter of 2026. The yield on loans for the third quarter of 2026 was 6.95%, compared to 7.06% for the second quarter of 2026 and 7.79% for the third quarter of 2025. The cost of interest-bearing deposits for the third quarter of 2026 was 3.49%, compared to 3.41% for the second quarter of 2026 and 3.98% for the third quarter of 2025. Net interest income totaled $59.5 million for the third quarter of 2026, a decrease of 1.2% from $60.3 million for the second quarter of 2026 and an increase of 17.1% from $50.8 million for the third quarter of 2025. Interest income totaled $106.7 million for the third quarter of 2026, an increase of 0.7% from $106.0 million for the second quarter of 2026 and an increase of 15.4% from $92.5 million for the third quarter of 2025. Interest expense was $47.2 million for the third quarter of 2026, an increase of $1.5 million, or 3.2%, from $45.7 million for the second quarter of 2026, and an increase of $5.5 million, or 13.3%, from $41.7 million for the third quarter of 2025. Noninterest income totaled $6.3 million for the third quarter of 2026, compared to $7.7 million for the second quarter of 2026 and $3.6 million for the third quarter of 2025. Noninterest expense increased to $41.6 million for the third quarter of 2026, compared to $38.4 million for the second quarter of 2026 and $28.9 million for the third quarter of 2025. The number of employees decreased to 499 at September 30, 2026, compared to 504 at June 30, 2026. The Bank completed a securitization of $87.5 million of commercial real estate loans during the third quarter of 2026. Nonperforming loans at September 30, 2026 were $29.0 million, compared to $27.1 million at June 30, 2026 and $21.7 million at September 30, 2025. The provision for credit losses recorded for the third quarter of 2026 was $540,000, and the allowance for credit losses of $54.4 million represented 0.99% of the $5.49 billion in gross loans outstanding as of September 30, 2026. Deposits totaled $5.92 billion as of September 30, 2026, an increase of 1.2% from $5.86 billion as of June 30, 2026, and an increase of 35.5% from $4.37 billion as of September 30, 2025. As of September 30, 2026, interest-bearing demand deposits decreased $141.1 million, or 3.3%, time deposits increased $126.1 million, or 14.6%, and savings accounts increased $5.9 million, or 21.1%, respectively, from June 30, 2026. The average cost of deposits was 3.09% for the third quarter of 2026, representing a 4-basis point increase from the second quarter of 2026 and a 47-basis point decrease from the third quarter of 2025.

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