Third Coast Bancshares (TCBX) AI Stock Analysis

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Third Coast Bancshares

(NASDAQ:TCBX)

Rating:68Neutral

Price Target:―

Third Coast Bancshares is performing well, driven by strong financial metrics and a positive outlook from its latest earnings call. The stock's valuation is attractive, though technical indicators suggest caution due to recent bearish trends. Investors may find long-term potential, contingent on continued financial and operational improvements.

Third Coast Bancshares (TCBX) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$425.37M

Dividend YieldN/A

Average Volume (3M)68.87K

Price to Earnings (P/E)11.5

Beta (1Y)0.99

Revenue Growth15.07%

EPS Growth53.76%

CountryUS

Employees376

SectorFinancial

Sector Strength81

IndustryBanks - Regional

Share Statistics

EPS (TTM)0.78

Shares Outstanding13,833,289

10 Day Avg. Volume48,777

30 Day Avg. Volume68,874

Financial Highlights & Ratios

PEG Ratio1.93

Price to Book (P/B)0.89

Price to Sales (P/S)0.00

P/FCF Ratio12.40

Enterprise Value/Market Cap1.32

Enterprise Value/Revenue0.50

Enterprise Value/Gross Profit1.92

Enterprise Value/Ebitda5.28

Forecast

1Y Price Target

$37.50

Price Target Upside21.95% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Third Coast Bancshares Business Overview & Revenue Model

Company DescriptionThird Coast Bancshares, Inc. (TCBX) is a financial holding company based in Texas, primarily engaged in providing a range of banking products and services. The company operates through its subsidiary, Third Coast Bank, SSB, which offers commercial and retail banking services. The bank serves a diverse client base, including small and medium-sized businesses, professionals, and individuals, with a focus on personalized customer service. Its core offerings include loans, deposits, treasury management, and other financial services catering to the needs of the local communities it serves.

How the Company Makes MoneyThird Coast Bancshares generates revenue primarily through interest income derived from its lending activities. The bank provides various types of loans, including commercial, industrial, and real estate loans, which contribute significantly to its interest earnings. Additionally, the company earns non-interest income through fees and commissions from services such as treasury management, deposit account services, and other financial products. The bank's strategic focus on relationship banking helps it maintain strong customer ties, which in turn supports its revenue growth. Third Coast Bancshares may also engage in partnerships with other financial institutions to enhance its service offerings and expand its market reach, although specific partnership details are not disclosed.

Third Coast Bancshares Financial Statement Overview

Summary

Third Coast Bancshares shows strong revenue and net income growth, with a solid balance sheet marked by no debt in 2024. Positive cash flow indicates healthy operations, despite negative cash flows from investing due to substantial capital investments. Operational and capital structure improvements could enhance stability.

Income Statement

Positive

The company has demonstrated strong revenue growth, rising from $34.3M in 2019 to $328.4M in 2024. The Net Profit Margin is solid at 14.5% for 2024, showing efficient cost management. However, the EBIT margin has fluctuated, with a decrease in 2023, indicating some operational challenges.

Balance Sheet

Positive

The balance sheet is robust with no total debt in 2024, reflecting a strong equity position. The Equity Ratio is moderate, at 9.3%, which suggests a balanced approach to leveraging assets. However, the Stockholders' Equity has not grown proportionally to total assets, indicating potential capital structure issues.

Cash Flow

Positive

The Free Cash Flow has shown positive growth, with a significant increase from negative figures in previous years to $35.1M in 2024. The Operating Cash Flow to Net Income ratio is 0.74, indicating good cash generation relative to earnings. However, cash flow from investing activities remains negative, suggesting heavy investment or asset acquisition.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
328.36M	141.41M	122.34M	93.12M	69.19M
	Gross Profit
328.36M	141.41M	122.34M	93.12M	69.19M
	EBIT
326.65M	0.00	60.27M	14.48M	15.61M
	EBITDA
0.00	0.00	0.00	0.00	17.28M
	Net Income Common Stockholders
47.67M	33.40M	18.66M	11.42M	12.12M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
755.18M	411.85M	176.07M	353.30M	226.99M
	Total Assets
4.94B	4.40B	3.77B	2.50B	1.87B
	Total Debt
132.53M	141.71M	129.43M	1.00M	33.88M
	Net Debt
-238.98M	-155.22M	-200.43M	-325.86M	-167.52M
	Total Liabilities
4.48B	3.98B	3.39B	1.44M	1.75B
	Stockholders Equity
460.72M	411.97M	381.78M	299.01M	121.72M
Cash Flow		Free Cash Flow
33.37M	35.64M	9.60M	-1.04M	-5.01M
	Operating Cash Flow
35.14M	39.08M	21.79M	4.58M	-3.65M
	Investing Cash Flow
-520.93M	-529.53M	-1.24B	-500.06M	-500.01M
	Financing Cash Flow
495.15M	570.29M	1.22B	618.94M	611.16M

Third Coast Bancshares Technical Analysis

Technical Analysis Sentiment

Negative

Last Price30.75

Price Trends

50DMA

30.92

Negative

100DMA

32.95

Negative

200DMA

31.19

Negative

Market Momentum

MACD

0.25

Negative

RSI

48.73

Neutral

STOCH

28.93

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TCBX, the sentiment is Negative. The current price of 30.75 is above the 20-day moving average (MA) of 30.70, below the 50-day MA of 30.92, and below the 200-day MA of 31.19, indicating a neutral trend. The MACD of 0.25 indicates Negative momentum. The RSI at 48.73 is Neutral, neither overbought nor oversold. The STOCH value of 28.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TCBX.

Third Coast Bancshares Risk Analysis

Third Coast Bancshares disclosed 1 risk factors in its most recent earnings report. Third Coast Bancshares reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Third Coast Bancshares Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FBIZ	78 Outperform	$396.98M	8.67	14.36%	2.17%	12.02%	26.09%
NRIM	77 Outperform	$482.25M	11.60	16.22%	2.81%	23.96%	47.39%
COFS	73 Outperform	$443.68M	24.59	2.27%	3.70%	24.39%	-56.37%
TCBX	68 Neutral	$425.37M	11.51	11.27%	―	15.07%	53.76%
Sector *	64 Neutral	$12.66B	9.79	7.67%	17015.07%	12.23%	-6.06%
FFWM	57 Neutral	$428.41M	―	-8.68%	0.19%	3.61%	65.61%
FFIC	48 Neutral	$410.73M	16.43	-6.53%	7.19%	-5.55%	-242.78%

* Financial Sector Average

Performance Comparison

TCBX

Third Coast Bancshares

30.75

9.37

43.83%

FBIZ

First Business Financial

47.72

13.74

40.44%

FFIC

Flushing Financial

12.16

-0.19

-1.54%

NRIM

Northrim Bancorp

87.35

35.45

68.30%

FFWM

First Foundation

5.20

-0.72

-12.16%

COFS

ChoiceOne Financial Services

29.61

5.03

20.46%

Third Coast Bancshares Earnings Call Summary

Earnings Call Date:Apr 23, 2025

(Q1-2025)

% Change Since: 0.79%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Positive

The earnings call reflects a largely positive sentiment with significant highlights such as the successful execution of a commercial real estate loan securitization, improved credit quality, and increased net interest margin. However, there are some challenges, including a decline in deposits and an increase in non-interest expenses. Overall, the positive aspects outweigh the negatives, indicating a strong strategic direction and effective management.

Q1-2025 Updates

Positive Updates

Commercial Real Estate Loan Securitization

Third Coast executed a significant commercial real estate loan securitization, providing increased flexibility in managing the balance sheet and capital ratios, generating fee income, and positively impacting the net interest margin.

Improved Credit Quality

Non-performing loans declined by $9.3 million, improving the non-performing loans to total loans ratio by 23 basis points. Non-performing assets to total assets declined by two basis points to 0.56%.

Net Interest Margin Improvement

Net interest margin improved by nine basis points to 3.80% in the first quarter, demonstrating effective management of interest income and expenses.

Book Value and Tangible Book Value Growth

Book value and tangible book value grew by 4.4% and 4.7% respectively over the prior quarter, and by 14.3% and 15.2% compared to the same period last year.

Strong Loan Growth in April

Loan growth in April exceeded $50 million, indicating strong demand and effective management of loan portfolios.

Negative Updates

Decline in Deposits

Deposits declined by $62 million for the quarter, resulting in a loan-to-deposit ratio of 93.9%.

Increase in Non-Interest Expenses

Non-interest expenses increased by 3.2% or $878,000 in the first quarter and were up 8.5% or $2.2 million from the same quarter last year.

Flat Net Income

First-quarter net income was $12.4 million, essentially flat versus the fourth quarter of 2020.

Company Guidance

During the Third Coast Bancshares First Quarter 2025 Earnings Conference Call, the company provided several key metrics and guidance for the remainder of the year. The net interest margin improved by nine basis points to 3.80% in the first quarter, with expectations of an additional five basis points improvement in the second quarter due to a successful commercial real estate loan securitization. The bank reported a net income of $12.4 million, an ROA of 1.17%, and a return on equity of 12.4%. Non-interest expenses increased by 3.2% from the previous quarter. The loan-to-deposit ratio was 93.9%, and period-end loan growth was $21.6 million, with quarterly average growth better at $42.5 million. For the rest of 2025, Third Coast Bancshares aims for $325 million in loan growth and is considering a share buyback program due to strong capital positions. The company remains focused on disciplined loan growth, robust credit management, and enhancing shareholder value, with book value and tangible book value increasing by 4.4% and 4.7% respectively from the prior quarter.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.