Third Coast Bancshares, Inc. reported net income of $17.9 million for the fourth quarter of 2025, according to an updated coverage report from Stonegate Capital Partners. This represents a slight decrease from the $18.1 million reported in the third quarter of 2025, but a significant increase from the $13.7 million reported in the fourth quarter of 2024. The company's basic earnings per share were $1.21, with diluted earnings per share at $1.02 for the quarter.
The modest quarter-over-quarter decline was primarily attributed to 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 Capital Partners noted that the company's net interest margin held steady at 4.10% during the quarter, indicating stability in the bank's core lending operations despite the transitional expenses.
Stonegate's analysis indicates that Third Coast Bancshares' merger with Keystone remains on track, though near-term expense levels may remain somewhat elevated through the early stages of the integration process. The company has increased the low end of its deposit growth range, suggesting confidence in its ability to attract and retain customer deposits during this transitional period. This is particularly important as deposit growth serves as a foundation for future lending activities and overall bank expansion.
The financial institution's performance demonstrates its ability to maintain profitability while navigating the complexities of merger integration. The steady net interest margin of 4.10% suggests that Third Coast has maintained pricing discipline on its loans and deposits despite competitive market conditions. The increase in non-margin loan fees indicates diversification in revenue streams beyond traditional interest income, which can provide stability during periods of interest rate volatility.
Stonegate Capital Partners anticipates that Third Coast Bancshares will continue prioritizing operational efficiency as it moves forward with the Keystone integration. While expense management may present challenges in the near term, the company's fundamental performance metrics remain solid. The full coverage report, including additional financial details and analysis, is available through Stonegate's research platform. Investors and analysts following regional banking stocks will be monitoring Third Coast's progress as it works to optimize its operations post-merger while maintaining its competitive position in the market.
For Texas businesses and the broader financial sector, Third Coast's performance during merger integration signals resilience in regional banking. The company's ability to maintain a steady net interest margin while growing deposits suggests it remains well-positioned to support Texas businesses with lending and financial services. As regional banks play a crucial role in local economic development, Third Coast's successful navigation of merger challenges could strengthen its capacity to finance Texas business expansion and contribute to the state's economic growth.
The diversification into non-margin loan fees represents a strategic move that could benefit both the bank and its business clients. By developing alternative revenue streams, Third Coast may be better equipped to offer competitive loan terms to Texas businesses even during periods of interest rate fluctuation. This financial stability is particularly important for small and medium-sized enterprises that rely on consistent banking relationships for their operational and growth financing needs.
