📜 What This Document Is 📰

This document is a formal 8-K filing, which is an SEC filing used to announce material corporate events that shareholders should know about immediately. Think of it as a "news flash" that supplements the official quarterly reports. It signals the financial results for the first quarter of 2026 and, critically, highlights the completion of a major merger.

👉 The central message is that Third Coast Bancshares successfully merged with Keystone Bancshares on February 1, 2026, which significantly enlarged the bank's financial footprint.

🏦 What The Company Does 🏦

In simple terms, Third Coast Bancshares is a Texas-based bank holding company. Through its subsidiary, Third Coast Bank, it provides comprehensive commercial banking services across the Greater Houston, Dallas-Fort Worth, and Austin-San Antonio markets.

👉 The bank has been operating since 2008 and currently conducts banking operations across 21 branches, giving it a strong regional presence in Texas.

🤝 The Keystone Merger Details 📈

The biggest story in this filing is the completion of a successful merger with Keystone Bancshares, Inc. This deal was executed on February 1, 2026.

The merger was a major boost to Third Coast, meaning the bank immediately became much larger and more capable. The transaction added the following resources to the bank’s balance sheet:

• Loans: An approximate increase of $812.0 million.
• Assets: An addition of $1 billion.
• Deposits: An increase of $844.2 million.

👉 This successful merger means Third Coast immediately expanded its market reach and its available pool of lending capital.

💰 Overall Financial Snapshot 📊

The bank reported its 2026 first-quarter financial results, showcasing key metrics like total assets and net income. While the size of the bank increased dramatically due to the merger, profitability metrics showed a quarter-over-quarter dip.

Here are the headline numbers for the first quarter of 2026:

• Net Income: Totaled $16.4 million, which was compared to $17.9 million in the fourth quarter of 2025.
• Earnings Per Share (EPS): Basic and diluted EPS were $1.03 per share.
• Total Loans: Gross loans reached $5.25 billion as of March 31, 2026, up from $4.39 billion at the end of the prior quarter.

👉 Although the bank's size grew significantly, the dip in net income was largely attributed to one-time, non-recurring merger-related costs.

💵 Analyzing the Income Statement 📉

This section breaks down how the bank made its money, looking at key sources like interest and non-interest activity.

• Net Interest Income (NII): Totaled $53.6 million for Q1 2026. This was an increase of 2.8% from $52.2 million in Q4 2025, and a much larger increase of 25.3% from $42.8 million in Q1 2025.
  • Why it matters: NII is the core profit for a bank. The increase suggests the bank successfully increased its lending activities and interest spread.
• Noninterest Expense: This expense rose to $38.1 million in Q1 2026. This increase was driven by merger-related costs, specifically $3.3 million in noninterest expenses, which included legal/professional fees and employee benefits.
• Efficiency Ratio: The ratio was 66.06% for Q1 2026. This metric compares operating costs to total revenue. An increase signals higher costs (due to the merger) relative to the revenue gained.

🧱 Loan Portfolio Growth and Composition 🚀

The bank's lending arm saw substantial growth, which is a key indicator of its operational success following the merger.

• Gross Loans: Increased robustly to $5.25 billion as of March 31, 2026. This represented a 19.5% jump compared to the $4.39 billion recorded at the end of Q4 2025.
• Loan Growth Drivers: The majority of this loan increase came from Commercial and Industrial (C&I) loans and Real Estate loans.
  • C&I loans increased by $276.2 million from Q4 2025.
  • Real Estate loans increased by $644.2 million from Q4 2025.
• Asset Quality: While total assets grew, Nonperforming loans (NPLs) reached $35.6 million, up from $21.5 million at the end of Q4 2025.
  • 👉 This increase in NPLs was mainly due to one specific loan of $17.1 million being placed on nonaccrual status.
• Credit Cushion: The nonperforming loans to total loans ratio was 0.68% as of March 31, 2026. This ratio is monitored closely by regulators and shows how much of the bank's total loan book is considered risky.

🏦 Deposits and Customer Base Stability 🧑‍💼

A bank's deposits are its most fundamental source of funding. The filing shows significant growth in the bank's customer base.

• Total Deposits: Increased substantially to $5.72 billion as of March 31, 2026. This marked a 23.5% increase from the $4.63 billion recorded at the end of Q4 2025.
• Deposit Growth Drivers: The increase was directly impacted by the Keystone merger.
• Cost of Funds: The average cost of deposits was 3.17% for Q1 2026. This represents a 17-basis point decrease from Q4 2025 and a 44-basis point decrease from Q1 2025.
  • Why it matters: A lower average cost of deposits is generally good for the bank because it means the bank is paying less interest to attract and retain customer funds.

💻 Operational Updates and Staffing 👷

Mergers require significant operational effort, which is reflected in the bank's workforce and overhead costs.

• Workforce Expansion: The number of employees grew to 514 as of March 31, 2026. This is a notable increase from 412 at the end of Q4 2025, directly linked to integrating the staff from the Keystone merger.
• Impact of Merger: The merger required $3.3 million in noninterest expenses, primarily covering legal and professional services and salaries/benefits related to retention and bonuses.

🗣️ Management's Strategic View and Goals 🧭

Bart Caraway, Founder, Chairman, President & Chief Executive Officer, provided commentary on the merger's success, framing it as a major strategic step forward.

Caraway stated: "Our first quarter marked an important step for Third Coast with the successful merger with Keystone. This transaction meaningfully increased our balance sheet and capabilities, and we’re already seeing strong momentum across our loan pipelines and core markets."

He added that the company "remain focused on executing on our strategic objectives... building deeper relationships with clients, and translating our expanded platform into sustainable growth and shareholder value."

👉 Management is focusing on integrating the new, larger platform to drive sustainable future growth and create value for shareholders.

🔔 Key Dates and How to Follow Along 📅

The company provided specific details for investors who wish to learn more or follow up on the results.

• Conference Call: A conference call will be held on Thursday, April 23, 2026, at 11:00 a.m. Eastern Time / 10:00 a.m. Central Time.
• Replay Availability: For those who miss the live call, a replay will be available through April 30, 2026.
• Investor Relations Contact: If you have questions, you can contact the Investor Relations team:
  • People: Ken Dennard / Natalie Hairston Dennard Lascar
  • Phone: (713) 529-6600
  • Email: [email protected]

🧠 The Analogy

Think of a small local bookstore (Third Coast) that suddenly merges with a much larger bookstore chain (Keystone). Right after the merger, the bookstore looks huge and has vastly more inventory and a bigger storefront. However, the first quarter is messy because the two teams spent millions on lawyers, merging computer systems, and giving staff bonuses. This "merger drag" temporarily lowers the profit (Net Income) compared to the previous quarter, even though the business is much larger and has much better potential for future sales.

🧩 Final Takeaway

Third Coast executed a massive and successful merger with Keystone, significantly boosting its size and deposit base. While the recent profit metrics were temporarily lowered by non-recurring merger costs, the strong growth in its loan portfolio and total deposits signals a healthy, expanding platform poised for future growth.