Stonegate Updates Coverage on Third Coast Bancshares: Keystone Acquisition Drives Growth Despite Merger Costs

Stonegate Capital Partners has updated its coverage on Third Coast Bancshares, Inc. (NYSE: TCBX) following the company's first quarter 2026 earnings release. Third Coast 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 sequential decline was primarily driven by approximately $3.3 million in pre-tax merger expenses related to the Keystone acquisition, including elevated legal and professional fees, as well as higher compensation tied to retention, sign-on, and discretionary bonuses.

Despite these costs, profitability remained solid. The company reported a return on average assets (ROA) of 1.08% and a 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. According to Stonegate, this points to better underlying earnings power than the headline decline suggests.

The Keystone merger is a key development for Third Coast, shifting the narrative from deal completion to execution. The acquisition has added meaningful scale, while most cost savings are expected to materialize in the second half of 2026. Stonegate notes that organic growth appears stronger than reported loan growth indicates. While Keystone drove balance sheet expansion, ex-Keystone loan growth remained positive, with unusual early paydowns masking underlying momentum.

For more details, the full announcement is available here. Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services. Their affiliate, Stonegate Capital Markets (member FINRA), offers investment banking, equity research, and capital raising for public and private companies.