Stonegate Capital Partners has updated its coverage on Third Coast Bancshares, Inc. (NYSE: TCBX), highlighting solid underlying earnings in the first quarter of 2026 despite significant merger-related expenses. The Dallas-based bank reported net income of $16.4 million, or $1.03 per basic share and $0.88 per diluted share, compared to $17.9 million and $1.21/$1.02 in the fourth quarter of 2025.
The linked-quarter decline was primarily driven by approximately $3.3 million in pre-tax expenses tied to the Keystone merger, including elevated legal and professional fees, as well as higher compensation costs related to retention, sign-on, and discretionary bonuses. However, even with that noise, profitability remained solid, with a reported return on assets (ROA) of 1.08% and return on tangible common equity (ROTCE) of 12.23%. Excluding merger expenses, management indicated that ROA would have been 1.25% and diluted earnings per share approximately $1.02, pointing to better underlying earnings power than the headline decline suggests.
According to Stonegate, the Keystone merger shifts the story from deal close to execution. The merger added meaningful scale to Third Coast, while most cost savings remain ahead and are expected to materialize mainly in the second half of 2026. Organic growth also appears stronger than reported loan growth indicates. While Keystone drove balance sheet expansion, ex-Keystone loan growth was still positive, with unusual early paydowns masking underlying momentum.
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Its affiliate, Stonegate Capital Markets (member FINRA), offers a full spectrum of investment banking, equity research, and capital raising for public and private companies.
For more details, view the full announcement here.
