Stonegate Capital Partners has updated its coverage on Third Coast Bancshares, Inc. (NYSE:TCBX) following the company's fourth quarter 2025 financial results. For the quarter, Third Coast reported net income of $17.9 million, which compares to $18.1 million in the third quarter of 2025 and $13.7 million in the fourth quarter of 2024. This resulted in basic earnings per share of $1.21 and diluted earnings per share of $1.02.
The modest quarter-over-quarter decline in net income was primarily driven by merger-related legal and professional expenses, along with higher salaries and benefits costs. These increases were partially offset by higher net interest income and an increase in non-margin loan fees. Stonegate noted that the company's net interest margin held steady at 4.10% for the period, indicating stability in this key profitability metric despite the integration challenges.
Stonegate anticipates that Third Coast Bancshares will continue prioritizing operational efficiency, though near-term expense levels may remain somewhat volatile through the early stages of Keystone's integration. The firm confirmed that the merger remains on track, suggesting that strategic objectives are being met despite the temporary expense pressures. Additionally, Third Coast has increased the low end of its deposit growth range, signaling confidence in its ability to attract and retain customer deposits in a competitive banking environment.
The implications of this coverage update are significant for investors and industry observers tracking regional banking performance. The steady net interest margin of 4.10% demonstrates Third Coast's ability to maintain profitability in a challenging interest rate environment, while the ongoing merger integration represents both near-term challenges and long-term strategic positioning. The increased deposit growth guidance suggests the company is successfully navigating competitive pressures for customer funds, which is particularly important as banks face continued pressure on funding costs.
For the broader banking industry, Third Coast's experience highlights the balance between growth through acquisition and maintaining operational efficiency. The company's ability to report solid earnings while absorbing merger-related expenses provides a case study in integration management. Stonegate's coverage, available through their full announcement at https://www.stonegateinc.com, offers institutional investors and market participants detailed analysis of these developments and their implications for Third Coast's strategic direction and financial performance.
The banking sector continues to face challenges related to interest rate volatility, regulatory changes, and competitive pressures, making Third Coast's performance metrics particularly relevant. The company's focus on operational efficiency while managing merger integration expenses reflects broader industry trends toward consolidation and scale optimization. As regional banks navigate an evolving financial landscape, Third Coast's experience with maintaining profitability during transitional periods offers insights into successful adaptation strategies that balance growth initiatives with financial discipline.
