Stonegate Updates Coverage on Third Coast Bancshares; Merger Costs Mask Underlying Strength

Stonegate Capital Partners has released an updated research note on Third Coast Bancshares, Inc. (NYSE: TCBX), providing analysis of the company’s first quarter 2026 results. The report focuses on the impact of the recently completed Keystone merger, which has shifted the narrative from deal closure to execution. While headline earnings per share declined quarter-over-quarter, Stonegate notes that underlying profitability remains robust, suggesting the market may be overlooking the company’s true earnings power.

For the first quarter of 2026, Third Coast reported net income of $16.4 million, or $1.03 per basic share and $0.88 per diluted share. This compares to $17.9 million, or $1.21 per basic share and $1.02 per diluted share, in the fourth quarter of 2025. The sequential decline was largely attributed to approximately $3.3 million in pre-tax expenses related to the Keystone merger, including elevated legal and professional fees, as well as higher compensation costs tied to retention, sign-on, and discretionary bonuses.

Despite these one-time charges, Stonegate emphasizes that the company’s core performance remained solid. On a reported basis, return on average assets (ROA) was 1.08% and return on tangible common equity (ROTCE) was 12.23%. However, management indicated that excluding merger expenses, ROA would have been 1.25% and diluted earnings per share approximately $1.02. According to Stonegate, this points to better underlying earnings power than the headline EPS decline alone suggests.

The Keystone merger has added meaningful scale to Third Coast, and most cost-saving opportunities remain ahead, with the benefits expected to materialize primarily in the second half of 2026. Stonegate also highlights that organic loan growth appears stronger than reported figures indicate. While Keystone drove overall balance sheet expansion, ex-Keystone loan growth was still positive, with unusual early paydowns masking underlying momentum.

Stonegate Capital Partners, a leading capital markets advisory firm, provides investor relations, equity research, and institutional investor outreach services. The full announcement, including downloadable images and bios, is available at Stonegate’s website.

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