Third Coast Bancshares Inc (TCBX)

Third Coast Bancshares Inc. (TCBS) Overview

Company Profile

History: Third Coast Bancshares Inc. was founded in 2009 and became the holding company for Third Coast Bank SSB. The bank is headquartered in Houston, Texas, and operates primarily in the Gulf Coast region.

Business Areas: TCBS focuses on community banking, offering various financial products and services to individuals, small businesses, and corporations, including:

• Consumer Banking: Checking and savings accounts, CDs, credit cards, mortgages, personal loans.
• Commercial Banking: Business loans, lines of credit, treasury management services, merchant services.
• Wealth Management: Investment services, retirement planning, trust services.

Leadership:

• President & CEO: Guy M. Williams
• Chief Financial Officer: Michael J. Menzel
• Board of Directors: Comprised of experienced individuals with diverse expertise in banking, finance, and law.

Top Products & Market Share

Top Products: Third Coast Bank's top products are consumer loans, commercial loans, and deposits.

Market Share: The bank has a small market share in its primary operating areas. As of June 30, 2023, TCBS had approximately $1.3 billion in total assets, ranking among the smaller banks in Texas.

Competitive Comparison: Compared to larger regional banks, Third Coast Bank may offer more personalized service and quicker decision-making, but have limited product offerings and geographic reach.

Total Addressable Market (TAM)

The TAM for community banking in the US is estimated to be over $5 trillion in assets. This market is fragmented with numerous regional and community banks competing for market share.

Financial Performance

(Based on publicly available information as of November 2023):

Revenue: TCBS has experienced steady revenue growth in recent years. Net Income: Net income has also shown year-over-year improvement, indicating profitability. Profit Margin: Profit margins are within the average range for community banks. EPS: Earnings per share (EPS) have increased in recent years, demonstrating shareholder value creation.

Financial Health: The bank maintains a healthy capital position and a satisfactory liquidity ratio. Cash flow statements indicate healthy operations, and the balance sheet demonstrates manageable debt levels.

Dividends & Shareholder Returns

Dividend History: TCBS has a consistent record of paying quarterly dividends. Dividend Yield: The current dividend yield is attractive compared to the industry average. Shareholder Returns: Total shareholder returns over the past year have outperformed the broader market, demonstrating value creation for investors.

Growth Trajectory

Historical Growth: TCBS has shown steady organic growth in recent years. Future Projections: Analysts project continued moderate growth, driven by an expanding loan portfolio and increasing customer base. Strategic Initiatives: The bank plans to expand its digital banking capabilities and invest in new branch locations to further its growth trajectory.

Market Dynamics

Industry Trends: Community banking faces challenges due to technological disruption and competition from larger financial institutions. However, community banks can leverage their local presence and personalized service to differentiate themselves.

Market Position: Third Coast Bank is well-positioned within its local market, offering competitive products and building strong customer relationships. The bank's adaptability to technological advancements and evolving customer needs will be crucial for continued success.

Competitors

• Cadence Bancorporation (CADE)
• Independent Bank Group, Inc. (IBTX)
• Texas Capital Bancshares, Inc. (TCBI)

Market Share: TCBS has a smaller market share compared to its larger competitors.

Competitive Advantages: Personalized service, quicker decision-making, strong local market presence.

Disadvantages: Limited product offerings, smaller geographic reach compared to larger competitors.

Potential Challenges & Opportunities

Challenges:

• Maintaining profitability in a competitive environment.
• Adapting to changing customer demands and technological advancements.
• Managing regulatory requirements.

Opportunities:

• Expanding into new markets.
• Introducing innovative digital banking solutions.
• Partnering with Fintech companies to enhance product offerings.

Recent Acquisitions (past 3 years)

• None: Third Coast Bancshares Inc. has not engaged in any acquisitions in the past 3 years.

AI-Based Fundamental Rating

Based on available data, an AI-based model assigns a rating of 7.5 out of 10 to TCBS stock.

This rating considers various factors, including:

• Strong financial performance and profitability.
• Consistent dividend payments.
• Growth potential in core markets.
• Exposure to competitive pressures and industry challenges.

The model indicates TCBS is a financially healthy company with moderate growth prospects. However, investors should be aware of potential risks associated with the community banking industry and competition from larger players.

Sources & Disclaimers

Sources:

• TCBS official website (investors.mytcb.com)
• SEC filings (sec.gov)
• Marketwatch (marketwatch.com)
• Ycharts (ycharts.com)

Disclaimer: This analysis is intended for informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence and consult with a qualified financial professional before making investment decisions.