Third Coast Bancshares, Inc.
For the period ended Sep 30, 2025. Filed Nov 4, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 4, 2025
TCBX$38.69-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-05.
0000950170-25-103125
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-04.
0001193125-25-264821
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 167 previous paragraphs and 165 current paragraphs.
121 unchanged; 40 reworded; 4 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 26 previous and 26 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
Definitive Merger Agreement
Current report
On October 22, 2025, the Company entered into the Merger Agreement, pursuant to which, upon the terms and subject to the conditions set forth therein, (i) Merger Sub will merge with and into Keystone, with Keystone surviving as a wholly owned subsidiary of the Company, (ii) immediately following, and in connection with, the Merger, Keystone will be merged with and into the Company, with the Company surviving the merger, and (iii) immediately following the Second Step Merger, or at such later time as the Company may determine, the Company will cause Keystone Bank to be merged with and into the Bank, with the Bank surviving the merger.
Current report
Under the terms of the Merger Agreement, at the closing of the transaction, Keystone’s shareholders will receive, for each outstanding share of Keystone common stock, either (i) 0.45925 shares of Common Stock or (ii) an amount of cash equal to 0.45925 multiplied by the volume-weighted average price per share of Common Stock for the 20 trading day period set forth in the Merger Agreement, at the election of Keystone’s shareholders. The exchange ratio is subject to reduction in the event that Keystone does not deliver a minimum of $94,576,000 of Adjusted Equity. Keystone’s shareholders will be permitted to elect the form of consideration, provided that the aggregate cash consideration will not exceed $20 million. In the event that Keystone’s shareholders elect to receive aggregate cash consideration in an amount greater than $20 million, the distribution of the cash consideration will be prorated among such shareholders.
Current report
The transaction has been approved unanimously by each company’s board of directors and is expected to close during the first quarter of 2026, and is subject to customary closing conditions, including the receipt of required regulatory approvals, the approval of Keystone’s shareholders of the Merger Agreement and the Merger, and the approval of the Company’s shareholders of the issuance of shares of Common Stock in connection with the Merger.
Removed paragraphs (6)
Previous report
Occupancy and equipment expenses were $5.6 million and $5.4 million for the six months ended June 30, 2025 and 2024, respectively. Building, leasehold, furniture, fixtures and equipment depreciation included in net occupancy and equipment expense totaled $2.1 million and $2.0 million for the six months ended June 30, 2025 and 2024, respectively.
Previous report
Legal and professional fees were $3.4 million and $3.0 million for the six months ended June 30, 2025 and 2024, respectively. The increase was primarily due to increased expenses related to the securitization of loans in the second quarter of 2025.
Previous report
Regulatory assessment fees increased from $2.0 million for the six months ended June 30, 2024 to $2.5 million for the six months ended June 30, 2025. The increase was primarily due to our growth in total assets from $4.47 billion at June 30, 2024 to $4.94 billion at June 30, 2025 and a change in our quarterly assessment rate.
Previous report
Occupancy and equipment expenses were $2.8 million for both the three months ended June 30, 2025 and 2024, respectively. Building, leasehold, furniture, fixtures and equipment depreciation included in net occupancy and equipment expenses totaled $1.0 million for both the three months ended June 30, 2025 and 2024, respectively.
Previous report
Legal and professional fees were $1.9 million and $1.6 million for the three months ended June 30, 2025 and 2024, respectively. The increase was primarily due to increased expenses related to the securitization of loans in the second quarter of 2025.
Previous report
Regulatory assessment fees increased from $1.0 million for the three months ended June 30, 2024 to $1.2 million for the three months ended June 30, 2025. The increase was primarily due to our growth in total assets from $4.47 billion at June 30, 2024 to $4.94 billion at June 30, 2025 and a change in our quarterly assessment rate.
Reworded paragraphs (40)
Previous wording
We are a bank holding company with headquarters in Humble, Texas that operates through our wholly owned subsidiary, the Bank, and the Bank’s wholly owned subsidiary, TCCC. We focus on providing commercial banking solutions to small and medium-sized businesses and professionals with operations in our markets. We provide financial results based on a fiscal year ending December 31 as a single reportable segment. Our market expertise, coupled with a deep understanding of our customers’ needs, allows us to deliver tailored financial products and services. We currently operate nineteen branches, with ten branches in the Greater Houston market, three branches in the Dallas-Fort Worth market, five branches in the Austin-San Antonio market, and one branch in Detroit, Texas. As of June 30, 2025, we had, on a consolidated basis, total assets of $4.94 billion, total loans of $4.08 billion, total deposits of $4.28 billion and total shareholders’ equity of $496.1 million.
Current wording
We are a bank holding company with headquarters in Humble, Texas that operates through our wholly owned subsidiary, the Bank, and the Bank’s wholly owned subsidiary, TCCC. We focus on providing commercial banking solutions to small and medium-sized businesses and professionals with operations in our markets. We provide financial results based on a fiscal year ending December 31 as a single reportable segment. Our market expertise, coupled with a deep understanding of our customers’ needs, allows us to deliver tailored financial products and services. We currently operate nineteen branches, with ten branches in the Greater Houston market, three branches in the Dallas-Fort Worth market, five branches in the Austin-San Antonio market, and one branch in Detroit, Texas. As of September 30, 2025, we had, on a consolidated basis, total assets of $5.06 billion, total loans of $4.17 billion, total deposits of $4.37 billion and total shareholders’ equity of $513.8 million.
Previous wording
Net interest income increased $15.2 million, or 19.8%, during the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to increased interest income from loan growth, a portion of which loans were securitized, and the purchase of associated securities resulted in an increase in investment yields and decreased rates paid on interest-bearing deposits. Average loans increased from $3.70 billion for the six months ended June 30, 2024 to $4.00 billion for the six months ended June 30, 2025, with the growth in commercial loans offset by a decrease in real estate loans and municipal and other. The yield on loans for the six months ended June 30, 2025 was 7.70%, compared to 7.81% for the six months ended June 30, 2024. Interest expense related to interest bearing deposit accounts was $73.8 million and $79.1 million for six months ended June 30, 2025 and 2024, respectively. Average interest-bearing deposits increased from $3.38 billion for the six months ended June 30, 2024 to $3.71 billion for the six months ended June 30, 2025. The average rate paid on interest-bearing deposits decreased from 4.71% for the six months ended June 30, 2024 to 4.01% for the six months ended June 30, 2025. Interest expense related to borrowings was $3.4 million for the six months ended June 30, 2025 compared to $4.1 million for the six months ended June 30, 2024. The decrease was primarily due to the lower balance of borrowings resulting from a paydown of the senior debt in the third quarter of 2024 and a decrease in the average rate paid on borrowings. For the six months ended June 30, 2025, net interest margin and net interest spread were 4.02% and 3.31%, respectively, compared to 3.61% and 2.74%, respectively, for the six months ended June 30, 2024.
Current wording
Net interest income increased $25.7 million, or 21.9%, during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to increased interest income from loan growth, a portion of which loans were securitized, and the purchase of associated securities resulted in an increase in investment yields and decreased rates paid on interest-bearing deposits. Average loans increased from $3.74 billion for the nine months ended September 30, 2024 to $4.06 billion for the nine months ended September 30, 2025, with the growth primarily in commercial loans. The yield on loans for the nine months ended September 30, 2025 was 7.73%, compared to 7.84% for the nine months ended September 30, 2024. Interest expense related to interest bearing deposit accounts was $112.8 million and $119.5 million for nine months ended September 30, 2025 and 2024, respectively. Average interest-bearing deposits increased from $3.38 billion for the nine months ended September 30, 2024 to $3.77 billion for the nine months ended September 30, 2025. The average rate paid on interest-bearing deposits decreased from 4.72% for the nine months ended September 30, 2024 to 4.00% for the nine months ended September 30, 2025. Interest expense related to borrowings was $6.1 million for the nine months ended September 30, 2025 compared to $6.0 million for the nine months ended September 30, 2024. For the nine months ended September 30, 2025, net interest margin and net interest spread were 4.05% and 3.34%, respectively, compared to 3.65% and 2.76%, respectively, for the nine months ended September 30, 2024.
Previous wording
Interest earned/paid includes accretion of deferred loan fees, premiums and discounts. Interest income on loans includes loan fees and discount accretion of $10.6 million and $8.5 million for the six months ended June 30, 2025 and 2024, respectively.
Current wording
Interest earned/paid includes accretion of deferred loan fees, premiums and discounts. Interest income on loans includes loan fees and discount accretion of $14.4 million and $14.2 million for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
Net interest income increased $10.5 million, or 27.1%, during the three months ended June 30, 2025, compared to the three months ended June 30, 2024, primarily due to increased interest income resulting from an increase in loans, a portion of which were securitized, and the purchase of associated securities resulted in an increase in investment yields offset by a decrease in federal funds sold. The increase in net interest income was also due to a decrease in interest expense resulting from lower rates paid on interest-bearing deposits. Average loans increased from $3.74 billion for the three months ended June 30, 2024 to $4.02 billion for the three months ended June 30, 2025, with the growth in commercial loans offset by a decrease in real estate loans and municipal and other. The yield on loans for the three months ended June 30, 2025 was 7.95%, compared to 7.86% for the three months ended June 30, 2024. Interest expense related to interest bearing deposit accounts was $37.5 million and $40.4 million for three months ended June 30, 2025 and 2024, respectively. Average interest-bearing deposits increased from $3.41 billion for the three months ended June 30, 2024 to $3.77 billion for the three months ended June 30, 2025. The average rate paid on interest-bearing deposits decreased from 4.76% for the three months ended June 30, 2024 to 4.00% for the three months ended June 30, 2025. For the three months ended June 30, 2025, net interest margin and net interest spread were 4.22% and 3.52%, respectively, compared to 3.62% and 2.75%, respectively, for the three months ended June 30, 2024.
Current wording
Net interest income increased $10.5 million, or 25.9%, during the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to increased interest income resulting from an increase in loans and the purchase of investment securities. Average loans increased from $3.80 billion for the three months ended September 30, 2024 to $4.18 billion for the three months ended September 30, 2025, with the growth primarily in commercial loans. The yield on loans for the three months ended September 30, 2025 was 7.79%, compared to 7.90% for the three months ended September 30, 2024. Interest expense related to interest bearing deposit accounts was $39.0 million and $40.4 million for three months ended September 30, 2025 and 2024, respectively. Average interest-bearing deposits increased from $3.38 billion for the three months ended September 30, 2024 to $3.89 billion for the three months ended September 30, 2025. The average rate paid on interest-bearing deposits decreased from 4.75% for the three months ended September 30, 2024 to 3.98% for the three months ended September 30, 2025. For the three months ended September 30, 2025, net interest margin and net interest spread were 4.10% and 3.41%, respectively, compared to 3.73% and 2.82%, respectively, for the three months ended September 30, 2024.
Previous wording
Interest earned/paid includes accretion of deferred loan fees, premiums and discounts. Interest income on loans includes loan fees and discount accretion of $6.6 million and $4.4 million for the three months ended June 30, 2025 and 2024, respectively.
Current wording
Interest earned/paid includes accretion of deferred loan fees, premiums and discounts. Interest income on loans includes loan fees and discount accretion of $3.8 million and $5.7 million for the three months ended September 30, 2025 and 2024, respectively.
Previous wording
The provision for credit losses for the six months ended June 30, 2025 was $2.6 million, compared to $3.5 million for the six months ended June 30, 2024. The provisions for each period related primarily to provisioning for new loans and commitments booked during the periods. No provision for credit losses for securities was recorded for the six months ended June 30, 2025 and 2024.
Current wording
The provision for credit losses for the nine months ended September 30, 2025 was $5.3 million, compared to $4.5 million for the nine months ended September 30, 2024. The provisions for each period related primarily to provisioning for new loans and commitments booked during the periods. No provision for credit losses for securities was recorded for the nine months ended September 30, 2025 and 2024.
Previous wording
As of June 30, 2025, the allowance for credit losses for loans totaled $40.0 million, or 0.98% of total loans, compared to $40.3 million, or 1.02% of total loans, as of December 31, 2024. At June 30, 2025, the allowance for credit losses for unfunded loan commitments was $1.5 million, compared to $1.4 million at December 31, 2024. No allowance for credit losses for securities was recorded as of June 30, 2025 or December 31, 2024.
Current wording
As of September 30, 2025, the allowance for credit losses for loans totaled $42.6 million, or 1.02% of total loans, compared to $40.3 million, or 1.02% of total loans, as of December 31, 2024. At September 30, 2025, the allowance for credit losses for unfunded loan commitments was $1.8 million, compared to $1.4 million at December 31, 2024. No allowance for credit losses for securities was recorded as of September 30, 2025 or December 31, 2024.
Previous wording
The increase in noninterest income of $526,000 for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was primarily due to increased service charges and fees and increased earnings on bank-owned life insurance, offset by losses on the sales of investment securities and a decrease in Small Business Investment income.
Current wording
The increase in noninterest income of $1.6 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily due to increased service charges and fees and increased earnings on bank-owned life insurance, offset by losses on the sales of investment securities and a decrease in Small Business Investment income.
Previous wording
The decrease in noninterest income of $238,000 for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was primarily due to increased service charges and fees, offset by losses on the sales of investment securities and changes in the first quarter valuation estimates of other real estate owned during the second quarter of 2025.
Current wording
The increase in noninterest income of $1.1 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, was primarily due to increased service charges and fees and decreased losses on sale of securities.
Previous wording
The increase in noninterest expense of $5.4 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was primarily due to increases in salaries and employee benefit expenses, increased legal and professional fees, and increases in regulatory assessments.
Current wording
The increase in noninterest expense of $8.7 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily due to increases in salaries and employee benefit expenses.
Previous wording
Salaries and employee benefits are the largest component of noninterest expense and include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. Salaries and employee benefits were $36.5 million for the six months ended June 30, 2025, an increase of $4.1 million, or 12.6%, compared to $32.4 million for the same period in 2024. The increase was primarily due to increased salary expense resulting from new hires, increased bonus expense and a reduction in salary expense deferral related to loan fundings during the first half of 2025. For the six months ended June 30, 2025, the average number of employees was 386, compared to an average number of employees of 361 for the six months ended June 30, 2024.
Current wording
Salaries and employee benefits are the largest component of noninterest expense and include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. Salaries and employee benefits were $56.1 million for the nine months ended September 30, 2025, an increase of $8.0 million, or 16.6%, compared to $48.1 million for the same period in 2024. The increase was primarily due to increased salary expense resulting from new hires, increased bonus expense and a reduction in salary expense deferral related to loan fundings during the first half of 2025. For the nine months ended September 30, 2025, the average number of employees was 385, compared to an average number of employees of 361 for the nine months ended September 30, 2024.
Previous wording
The increase in noninterest expense of $3.2 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was primarily due to increases in salaries and employee benefit expenses, increased legal and professional fees, and increase in regulatory assessments.
Current wording
The increase in noninterest expense of $3.3 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, was primarily due to increases in salaries and employee benefit expenses.
Previous wording
Salaries and employee benefits are the largest component of noninterest expense and include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. Salaries and employee benefits were $18.2 million for the three months ended June 30, 2025, an increase of $2.3 million, or 14.2%, compared to $15.9 million for the same period in 2024. The increase was primarily due to increased salary expense resulting from new hires, increased bonus expense and a reduction in salary expense deferral related to loan fundings during the second quarter of 2025. For the three months ended June 30, 2025, the average number of employees was 380, compared to an average number of employees of 362 for the three months ended June 30, 2024.
Current wording
Salaries and employee benefits are the largest component of noninterest expense and include payroll expense, the cost of incentive compensation, benefit plans, health insurance and payroll taxes. Salaries and employee benefits were $19.6 million for the three months ended September 30, 2025, an increase of $3.9 million, or 24.8%, compared to $15.7 million for the same period in 2024. The increase was primarily due to increased salary expense resulting from new hires and increased bonus expense. For the three months ended September 30, 2025, the average number of employees was 393, compared to an average number of employees of 359 for the three months ended September 30, 2024.
Previous wording
Total assets were $4.94 billion as of June 30, 2025, compared to $4.94 billion as of December 31, 2024. The increase in total assets of $1.3 million was primarily due to organic loan growth and investment security and BOLI purchases offset by a decrease in cash and cash equivalents resulting from a decrease in noninterest bearing deposits during the six months ended June 30, 2025.
Current wording
Total assets were $5.06 billion as of September 30, 2025, compared to $4.94 billion as of December 31, 2024. The increase in total assets of $119.4 million was primarily due to organic loan growth and investment security and BOLI purchases offset by a decrease in cash and cash equivalents resulting from a decrease in noninterest bearing deposits during the nine months ended September 30, 2025.
Previous wording
As of June 30, 2025, total loans were $4.08 billion, an increase of $113.3 million, or 2.9%, compared to $3.97 billion as of December 31, 2024. Commercial and industrial loans accounted for the majority of the loan growth, increasing $227.2 million from December 31, 2024. The growth was partially offset by a $112.2 million decrease in real estate loans from December 31, 2024. Total loans as a percentage of deposits were 95.3% and 92.0% as of June 30, 2025 and December 31, 2024, respectively. Total loans as a percentage of assets were 82.5% and 80.3% as of June 30, 2025 and December 31, 2024, respectively.
Current wording
As of September 30, 2025, total loans were $4.17 billion, an increase of $198.7 million, or 5.0%, compared to $3.97 billion as of December 31, 2024. Commercial and industrial loans accounted for the majority of the loan growth, increasing $274.6 million from December 31, 2024. The growth was partially offset by a $55.7 million decrease in real estate loans and a $19.7 million decrease in municipal loans from December 31, 2024. Total loans as a percentage of deposits were 95.3% and 92.0% as of September 30, 2025 and December 31, 2024, respectively. Total loans as a percentage of assets were 82.3% and 80.3% as of September 30, 2025 and December 31, 2024, respectively.
Previous wording
Owner-occupied commercial real estate loans are a key component of our lending strategy to owner-operated businesses, representing a large percentage of our total commercial real estate loans. Owner-occupied commercial real estate loans decreased $24.2 million, or 5.4%, to $424.0 million as of June 30, 2025 from $448.1 million as of December 31, 2024.
Current wording
Owner-occupied commercial real estate loans are a key component of our lending strategy to owner-operated businesses, representing a large percentage of our total commercial real estate loans. Owner-occupied commercial real estate loans decreased $39.1 million, or 8.7%, to $409.0 million as of September 30, 2025 from $448.1 million as of December 31, 2024.
Previous wording
Non-owner-occupied commercial real estate loans are loans for income producing properties and are generally for retail strip centers, office buildings, self-storage facilities, and multi and single tenant office warehouses, all within our markets. Non-owner-occupied commercial real estate loans increased $14.7 million, or 2.3%, to $666.8 million as of June 30, 2025 from $652.1 million as of December 31, 2024.
Current wording
Non-owner-occupied commercial real estate loans are loans for income producing properties and are generally for retail strip centers, office buildings, self-storage facilities, and multi and single tenant office warehouses, all within our markets. Non-owner-occupied commercial real estate loans increased $35.8 million, or 5.5%, to $687.9 million as of September 30, 2025 from $652.1 million as of December 31, 2024.
Previous wording
Residential Real Estate Loans. Residential real estate loans consist of 1-4 family residential loans and multi-family residential loans. Our 1-4 family residential loan portfolio is predominately comprised of loans secured by 1-4 family homes, which are investor owned. While we do have some owner-occupied 1-4 family residential loans, we have not historically pursued this product line; however, we do offer limited mortgage products through our mortgage department. Our multi-family residential loan portfolio is comprised of loans secured by properties deemed multi-family, which includes apartment buildings. Our current multifamily loans are to operators who we believe are seasoned and successful and possess quality alternative repayment sources. Residential real estate loans decreased $12.8 million, or 3.8%, to $323.9 million as of June 30, 2025 from $336.7 million as of December 31, 2024.
Current wording
Residential Real Estate Loans. Residential real estate loans consist of 1-4 family residential loans and multi-family residential loans. Our 1-4 family residential loan portfolio is predominately comprised of loans secured by 1-4 family homes, which are investor owned. While we do have some owner-occupied 1-4 family residential loans, we have not historically pursued this product line; however, we do offer limited mortgage products through our mortgage department. Our multi-family residential loan portfolio is comprised of loans secured by properties deemed multi-family, which includes apartment buildings. Our current multifamily loans are to operators who we believe are seasoned and successful and possess quality alternative repayment sources. Residential real estate loans decreased $2.2 million, or 0.6%, to $334.6 million as of September 30, 2025 from $336.7 million as of December 31, 2024.
Previous wording
Construction, Development and Other Loans. Construction and development loans are comprised of loans used to fund construction, land acquisition and land development. The properties securing the portfolio are primarily in the Greater Houston and Dallas markets and are generally diverse in terms of type. During 2021, we expanded our construction and development portfolio through the formation of our builder finance group, which provides traditional homebuilder lines secured by lots and single-family homes, and land acquisition and development loans. This group also finances bond anticipation notes and lines of credit to large national institutional tier-one funds that invest equity in various real estate assets. Construction, development and other loans decreased $87.0 million, or 10.0%, to $784.4 million as of June 30, 2025 from $871.4 million as of December 31, 2024.
Current wording
Construction, Development and Other Loans. Construction and development loans are comprised of loans used to fund construction, land acquisition and land development. The properties securing the portfolio are primarily in the Greater Houston and Dallas markets and are generally diverse in terms of type. During 2021, we expanded our construction and development portfolio through the formation of our builder finance group, which provides traditional homebuilder lines secured by lots and single-family homes, and land acquisition and development loans. This group also finances bond anticipation notes and lines of credit to large national institutional tier-one funds that invest equity in various real estate assets. Construction, development and other loans decreased $44.8 million, or 5.1%, to $826.6 million as of September 30, 2025 from $871.4 million as of December 31, 2024.
Previous wording
In addition, the commercial and industrial loan category includes factored receivables. TCCC provides working capital solutions for small- to medium-sized businesses throughout the United States. TCCC provides working capital financing through the purchase of accounts receivables. Our factored receivables portfolio consists primarily of customers in the transportation, energy services and service industries. At June 30, 2025 and December 31, 2024, outstanding factored receivables were $24.9 million and $36.8 million, respectively.
Current wording
In addition, the commercial and industrial loan category includes factored receivables. TCCC provides working capital solutions for small- to medium-sized businesses throughout the United States. TCCC provides working capital financing through the purchase of accounts receivables. Our factored receivables portfolio consists primarily of customers in the transportation, energy services and service industries. At September 30, 2025 and December 31, 2024, outstanding factored receivables were $27.0 million and $36.8 million, respectively.
Previous wording
Commercial and industrial loans increased $227.2 million, or 15.2%, to $1.72 billion as of June 30, 2025 from $1.50 billion as of December 31, 2024. The increase was primarily a result of increased productivity in response to market demand.
Current wording
Commercial and industrial loans increased $274.6 million, or 18.3%, to $1.77 billion as of September 30, 2025 from $1.50 billion as of December 31, 2024. The increase was primarily a result of increased productivity in response to market demand.
Previous wording
We had $28.7 million in nonperforming assets as of June 30, 2025, compared to $28.8 million as of December 31, 2024. Included in nonperforming assets, nonperforming loans were $20.1 million and $27.9 million as of June 30, 2025 and December 31, 2024, respectively.
Current wording
We had $30.1 million in nonperforming assets as of September 30, 2025, compared to $28.8 million as of December 31, 2024. Included in nonperforming assets, nonperforming loans were $21.7 million and $27.9 million as of September 30, 2025 and December 31, 2024, respectively.
Previous wording
As of June 30, 2025, the allowance for credit losses for loans totaled $40.0 million, or 0.98% of total loans. As of December 31, 2024, the allowance for credit losses for loans totaled $40.3 million, or 1.02% of total loans. The decrease in our allowance for credit losses for loans was primarily due to $2.8 million of net charge-offs partially offset by the $2.6 million provision for credit losses on loans recorded for the six months ended June 30, 2025.
Current wording
As of September 30, 2025, the allowance for credit losses for loans totaled $42.6 million, or 1.02% of total loans. As of December 31, 2024, the allowance for credit losses for loans totaled $40.3 million, or 1.02% of total loans. The increase in our allowance for credit losses for loans was primarily due to the $5.3 million provision for credit losses on loans partially offset by $2.8 million of net charge-offs recorded for the nine months ended September 30, 2025.
Previous wording
As of June 30, 2025, the carrying amount of the available-for-sale security portfolio was $355.8 million, compared to $384.0 million as of December 31, 2024, a decrease of $28.3 million, or 7.4%. The decrease relates primarily to maturities, calls and paydowns of $28.5 million and net sales of $2.7 million in agencies, municipal securities, mortgage-back securities and corporate bonds during the six months ended June 30, 2025. Investment securities available-for-sale represented 7.2% and 7.8% of total assets as of June 30, 2025 and December 31, 2024, respectively.
Current wording
As of September 30, 2025, the carrying amount of the available-for-sale security portfolio was $376.7 million, compared to $384.0 million as of December 31, 2024, a decrease of $7.3 million, or 1.9%. The decrease relates primarily to maturities, calls and paydowns of $5.11 billion and net acquisitions of $5.10 billion in agencies, municipal securities, mortgage-back securities and corporate bonds during the nine months ended September 30, 2025. Investment securities available-for-sale represented 7.4% and 7.8% of total assets as of September 30, 2025 and December 31, 2024, respectively.
Previous wording
The weighted average life of our investment portfolio was 4.80 years and 4.79 years as of June 30, 2025 and December 31, 2024, respectively.
Current wording
The weighted average life of our investment portfolio was 4.11 years and 4.79 years as of September 30, 2025 and December 31, 2024, respectively.
Previous wording
Total deposits as of June 30, 2025 were $4.28 billion, a decrease of $29.6 million, or 0.7%, compared to $4.31 billion as of December 31, 2024. Noninterest-bearing deposits as of June 30, 2025 were $441.0 million, a decrease of $161.1 million, or 26.8%, compared to $602.1 million as of December 31, 2024. Total interest-bearing account balances as of June 30, 2025 were $3.84 billion, an increase of $131.5 million, or 3.6%, from $3.71 billion as of December 31, 2024.
Current wording
Total deposits as of September 30, 2025 were $4.37 billion, an increase of $62.2 million, or 1.4%, compared to $4.31 billion as of December 31, 2024. Noninterest-bearing deposits as of September 30, 2025 were $450.0 million, a decrease of $152.1 million, or 25.3%, compared to $602.1 million as of December 31, 2024. Total interest-bearing account balances as of September 30, 2025 were $3.92 billion, an increase of $214.3 million, or 5.8%, from $3.71 billion as of December 31, 2024.
Previous wording
The ratio of average noninterest-bearing deposits to average total deposits for the six months ended June 30, 2025 was 10.3% and for the year ended December 31, 2024 was 11.7%.
Current wording
The ratio of average noninterest-bearing deposits to average total deposits for the nine months ended September 30, 2025 was 10.4% and for the year ended December 31, 2024 was 11.7%.
Previous wording
Federal Home Loan Bank (FHLB) Advances. The FHLB allows us to borrow on a blanket floating lien status collateralized by FHLB stocks and real estate loans. As of June 30, 2025 and December 31, 2024, borrowing capacity available under this arrangement was $491.8 million and $623.7 million, respectively. We had no FHLB advances outstanding at June 30, 2025 or December 31, 2024. Our cost of FHLB advances was 4.72% and 5.25% for the six months ended June 30, 2025 and for the year ended December 31, 2024, respectively. In addition, letters of credit with the FHLB in the amount of $669.9 million and $535.8 million were outstanding at June 30, 2025 and December 31, 2024, respectively. The letters of credit are used to collateralize public fund deposit accounts in excess of FDIC insurance limits and have expirations ranging from July 2025 through October 2026 as of June 30, 2025.
Current wording
Federal Home Loan Bank (FHLB) Advances. The FHLB allows us to borrow on a blanket floating lien status collateralized by FHLB stocks and real estate loans. As of September 30, 2025 and December 31, 2024, borrowing capacity available under this arrangement was $524.5 million and $623.7 million, respectively. We had no FHLB advances outstanding at September 30, 2025 or December 31, 2024. Our cost of FHLB advances was 4.70% and 5.25% for the nine months ended September 30, 2025 and for the year ended December 31, 2024, respectively. In addition, letters of credit with the FHLB in the amount of $619.7 million and $535.8 million were outstanding at September 30, 2025 and December 31, 2024, respectively. The letters of credit are used to collateralize public fund deposit accounts in excess of FDIC insurance limits and have expirations ranging from October 2025 through January 2027 as of September 30, 2025.
Previous wording
Line of Credit - Senior Debt. The Company has a $55.0 million revolving line of credit facility that was modified effective March 12, 2024, whereby the facility was increased by $5.0 million and the note rate was decreased to The Wall Street Journal US Prime Rate, as such changes from time to time, less 0.625%, with a floor rate of 5.00% per annum. Interest continues to be payable quarterly on the 10 th day of March, June, September and December through maturity date of March 10, 2026. All principal and unpaid interest is due at maturity. The note is secured by 100% of the outstanding stock of the Bank and is senior in rights to the subordinated debt described below. Prior to the modification, the $50.0 million facility was due on September 10, 2024, and bore interest at The Wall Street Journal US Prime Rate, as such changes from time to time, plus 0.50%, with a floor rate of 5.00% per annum. At both June 30, 2025 and December 31, 2024, the outstanding balance was $30.9 million.
Current wording
Line of Credit - Senior Debt. The Company has a $55.0 million revolving line of credit facility that was modified effective March 12, 2024, whereby the facility was increased by $5.0 million and the note rate was decreased to The Wall Street Journal US Prime Rate, as such changes from time to time, less 0.625%, with a floor rate of 5.00% per annum. Interest continues to be payable quarterly on the 10 th day of March, June, September and December through maturity date of March 10, 2026. All principal and unpaid interest is due at maturity. The note is secured by 100% of the outstanding stock of the Bank and is senior in rights to the subordinated debt described below. Prior to the modification, the $50.0 million facility was due on September 10, 2024, and bore interest at The Wall Street Journal US Prime Rate, as such changes from time to time, plus 0.50%, with a floor rate of 5.00% per annum. At September 30, 2025 and December 31, 2024, the outstanding balance was $32.9 million and $30.9 million, respectively.
Previous wording
Note Payable - Subordinated Debt. On March 31, 2022, the Company issued and sold $82.3 million in aggregate principal amount of the Notes. At June 30, 2025 and December 31, 2024, the Company had $82.3 million in outstanding principal and $1.4 million and $1.5 million, respectively, in unamortized debt issuance costs. For additional information on our Note Payable - Subordinated Debt, see Note 7 – FHLB Advances and Other Borrowings in the accompanying notes to the consolidated financial statements included elsewhere in this Form 10-Q.
Current wording
Note Payable - Subordinated Debt. On March 31, 2022, the Company issued and sold $82.3 million in aggregate principal amount of the Notes. At September 30, 2025 and December 31, 2024, the Company had $82.3 million in outstanding principal and $1.3 million and $1.5 million, respectively, in unamortized debt issuance costs. For additional information on our Note Payable - Subordinated Debt, see Note 7 – FHLB Advances and Other Borrowings in the accompanying notes to the consolidated financial statements included elsewhere in this Form 10-Q.
Previous wording
Our cost of our senior debt and note payable was 6.20% and 6.74% for the six months ended June 30, 2025 and 2024, respectively.
Current wording
Our cost of our senior debt and note payable was 6.17% and 6.66% for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
Federal Reserve Borrower-in-Custody (BIC) Loan Pledge Arrangement. The Company has a Borrower-in-Custody (“BIC”) arrangement in place with the Federal Reserve Bank of Dallas. The arrangement provides the Bank with the ability to secure collateralized contingency funding from the Federal Reserve Bank's Discount Window by pledging its commercial and industrial loans on a blanket floating lien status. As of June 30, 2025 and December 31, 2024, total borrowing capacity under this arrangement was $1.8 billion and $1.5 billion, respectively. The Company had no advances outstanding under these lines as of June 30, 2025 or December 31, 2024.
Current wording
Federal Reserve Borrower-in-Custody (BIC) Loan Pledge Arrangement. The Company has a Borrower-in-Custody (“BIC”) arrangement in place with the Federal Reserve Bank of Dallas. The arrangement provides the Bank with the ability to secure collateralized contingency funding from the Federal Reserve Bank's Discount Window by pledging its commercial and industrial loans on a blanket floating lien status. As of September 30, 2025 and December 31, 2024, total borrowing capacity under this arrangement was $1.4 billion and $1.5 billion, respectively. The Company had no advances outstanding under these lines as of September 30, 2025 or December 31, 2024.
Previous wording
For the six months ended June 30, 2025 and for the year ended December 31, 2024, liquidity needs were primarily met by core deposits, loan maturities, amortizing loan portfolios, brokered deposits, and borrowings.
Current wording
For the nine months ended September 30, 2025 and for the year ended December 31, 2024, liquidity needs were primarily met by core deposits, loan maturities, amortizing loan portfolios, brokered deposits, and borrowings.
Previous wording
At June 30, 2025, the Company had borrowing capacity available under FHLB advances of $491.8 million, line of credit - senior debt of $24.1 million, the Federal Reserve Bank of Dallas Discount Window of $1.8 billion, and federal funds lines of credit of $36.5 million. At December 31, 2024, the Company had borrowing capacity under FHLB advances of $623.7 million, line of credit - senior debt of $24.1 million, the Federal Reserve Bank of Dallas Discount Window of $1.5 billion, and federal funds lines of credit of $36.5 million.
Current wording
At September 30, 2025, the Company had borrowing capacity available under FHLB advances of $524.5 million, line of credit - senior debt of $22.1 million, the Federal Reserve Bank of Dallas Discount Window of $1.4 billion, and federal funds lines of credit of $36.5 million. At December 31, 2024, the Company had borrowing capacity under FHLB advances of $623.7 million, line of credit - senior debt of $24.1 million, the Federal Reserve Bank of Dallas Discount Window of $1.5 billion, and federal funds lines of credit of $36.5 million.
Previous wording
The following table illustrates, during the periods presented, the composition of our funding sources and the average assets in which those funds are invested as a percentage of average total assets for the periods indicated. Average assets were $4.79 billion for the six months ended June 30, 2025 and $4.54 billion for the year ended December 31, 2024.
Current wording
The following table illustrates, during the periods presented, the composition of our funding sources and the average assets in which those funds are invested as a percentage of average total assets for the periods indicated. Average assets were $4.89 billion for the nine months ended September 30, 2025 and $4.54 billion for the year ended December 31, 2024.
Previous wording
As of June 30, 2025, we had $1.64 billion in outstanding commitments to extend credit and $2.8 million in commitments associated with outstanding standby and commercial letters of credit. As of December 31, 2024, we had $1.57 billion in outstanding commitments to extend credit and $14.0 million in commitments associated with outstanding standby and commercial letters of credit. Since commitments associated with letters of credit and commitments to extend credit may expire unused, the total outstanding may not necessarily reflect the actual future cash funding requirements.
Current wording
As of September 30, 2025, we had $1.60 billion in outstanding commitments to extend credit and $55.1 million in commitments associated with outstanding standby and commercial letters of credit. As of December 31, 2024, we had $1.57 billion in outstanding commitments to extend credit and $14.0 million in commitments associated with outstanding standby and commercial letters of credit. Since commitments associated with letters of credit and commitments to extend credit may expire unused, the total outstanding may not necessarily reflect the actual future cash funding requirements.
Previous wording
As of June 30, 2025 and December 31, 2024, we had no exposure to future cash requirements associated with known uncertainties or capital expenditure of a material nature. As of June 30, 2025, we had cash and cash equivalents of $119.0 million, compared to $421.2 million as of December 31, 2024.
Current wording
As of September 30, 2025 and December 31, 2024, we had no exposure to future cash requirements associated with known uncertainties or capital expenditure of a material nature. As of September 30, 2025, we had cash and cash equivalents of $123.0 million, compared to $421.2 million as of December 31, 2024.
Previous wording
Total shareholders’ equity increased to $496.1 million as of June 30, 2025, compared to $460.7 million as of December 31, 2024, an increase of $35.4 million, or 7.7%. This increase was primarily the result of the $30.3 million in net income and $6.1 million of other comprehensive income on securities and derivatives for the six months ended June 30, 2025 offset by the $2.4 million of dividends declared on the Series A Preferred Stock.
Current wording
Total shareholders’ equity increased to $513.8 million as of September 30, 2025, compared to $460.7 million as of December 31, 2024, an increase of $53.1 million, or 11.5%. This increase was primarily the result of the $48.4 million in net income and $6.4 million of other comprehensive income on securities and derivatives for the nine months ended September 30, 2025 offset by the $3.6 million of dividends declared on the Series A Preferred Stock.
Previous wording
For the six months ended June 30, 2025 and 2024, approximately $1.3 million and $1.0 million, respectively, was reclassified out of accumulated other comprehensive income and recognized as a reduction of interest expense on discontinued hedges. For the three months ended June 30, 2025 and 2024, approximately $662,000 and $654,000, respectively, was reclassified out of accumulated other comprehensive income and recognized as a reduction of interest expense on discontinued hedges. At June 30, 2025, the Company expected approximately $2.5 million of the unrealized gain to be reclassified as a reduction of interest expense over the next twelve month period.
Current wording
For the nine months ended September 30, 2025 and 2024, approximately $1.9 million and $1.6 million, respectively, was reclassified out of accumulated other comprehensive income and recognized as a reduction of interest expense on discontinued hedges. For the three months ended September 30, 2025 and 2024, approximately $646,000 and $596,000, respectively, was reclassified out of accumulated other comprehensive income and recognized as a reduction of interest expense on discontinued hedges. At September 30, 2025, the Company expected approximately $2.5 million of the unrealized gain to be reclassified as a reduction of interest expense over the next twelve month period.
Previous wording
All derivatives are carried at fair value in either other assets or other liabilities in the accompanying consolidated balance sheets. At June 30, 2025, our derivative assets and liabilities totaled $3.1 million and $3.8 million, respectively.
Current wording
All derivatives are carried at fair value in either other assets or other liabilities in the accompanying consolidated balance sheets. At September 30, 2025, our derivative assets and liabilities totaled $2.8 million and $3.5 million, respectively.