Third Coast lifts adjusted EPS to $1.06 despite decline in reported earnings
Key Facts
Third Coast Bancshares said in its earnings release issued on October 21 that adjusted diluted earnings per share, a non-GAAP measure, rose to $1.06 in the third quarter of 2026 from $0.98 in the previous quarter. Reported net income was $19.0 million. Net income was $22.0 million in the second quarter, according to the previous earnings release filed with the U.S. Securities and Exchange Commission. GAAP diluted earnings per share fell to $0.93 from $1.08 in the previous quarter. Adjusted results excluded $3.2 million in acquisition-related expenses, according to the company.
The company attributed the quarterly decline in reported earnings to lower gains on sales of factoring receivables and "higher merger and acquisition-related expenses." The previous quarter's results included a $3.5 million gain from the sale of most of Third Coast Commercial Capital's assets, according to that quarter's release. The sale included an ongoing revenue-sharing arrangement. In the third quarter, net interest margin fell to 3.70%, according to the new earnings release. The margin was 3.83% in the second quarter.
On the balance sheet, total loans rose to $5.49 billion at the end of September from $5.44 billion at the end of the previous quarter, according to company data. Deposits increased to $5.92 billion from $5.86 billion over the same period. Nonperforming loans fell to $29.0 million from $30.0 million at the end of the second quarter. The company recorded a provision for credit losses of $540,000 in the third quarter. That expense was $2.1 million in the previous quarter, according to the earnings release filed with the Securities and Exchange Commission.
The results follow the company's October 7 announcement of an agreement to acquire Great Plains in an all-stock deal valued at about $239.6 million at announcement, based on Third Coast's closing share price on the eve of the announcement. The deal aims to expand the company's presence in Dallas and enter the Oklahoma market, according to the merger filing with the Securities and Exchange Commission. When announcing the agreement, the company projected that the combined entity would have about $9 billion in assets after the acquisition closes. The deal presentation included an estimate that the merger would boost earnings per share by about 14% in 2028. The company expects to complete the deal in the first quarter of 2027, subject to regulatory and shareholder approvals and closing conditions. In the nearer term, the company will hold its third-quarter earnings call on October 22, 2026, at 11:00 a.m. U.S. Eastern Time, according to its investor relations page.