Third Coast Bancshares, Inc.
For the period ended Dec 31, 2025. Filed Mar 4, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 4, 2026
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-K
Period ended 2024-12-31; filed 2025-03-05.
0000950170-25-033724
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-04.
0001193125-26-091656
Item 7. 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 162 previous paragraphs and 161 current paragraphs.
110 unchanged; 43 reworded; 7 added; 7 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 24 previous and 25 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 (7)
Current report
Keystone Merger
Current report
On February 1, 2026, we completed our merger with Keystone, the parent company of Keystone Bank, SSB (“Keystone Bank”), a Texas state savings bank, pursuant to the terms of the Agreement and Plan of Reorganization, dated as of October 22, 2025, by and among the Company, Arch Merger Sub, Inc. (“Merger Sub”), a Texas corporation and a wholly owned subsidiary of the Company, and Keystone (the “Merger Agreement”). Pursuant to the Merger Agreement, on February 1, 2026, Merger Sub merged with and into Keystone (the “Merger”), with Keystone surviving as a wholly owned subsidiary of the Company. Immediately following the Merger, Keystone merged with and into the Company, with the Company surviving the merger (the “Second Step Merger”). Immediately following the Second Step Merger, Keystone Bank merged with and into the Bank, with the Bank surviving the merger. The total aggregate consideration payable in the Merger was approximately 2.6 million shares of our common stock and $20 million in cash.
Current report
Legal and professional fees were $7.5 million and $5.6 million for the years ended December 31, 2025 and 2024, respectively. The increase was primarily due to merger-related expenses during the fourth quarter of 2025 and the securitization of loans during the second quarter of 2025.
Current report
Securitization of Commercial Real Estate Loans
Current report
During April and June 2025, the Company completed two securitizations totaling $250 million of revolving commercial real estate loans secured by interests in 1-4 family residential dwellings located throughout the United States. In connection with the transactions, the Company purchased Class A-1 asset backed notes, Series 2025-1, for a total of $78 million on April 1, 2025; and Class A-1 asset backed notes, Series 2025-2 for a total of $127.5 million on June 3, 2025. The Company is not affiliated with the issuer of the notes. Further information regarding the securitization of commercial real estate loans is presented in Note 3—Loans and Allowance for Credit Losses in the accompanying notes to the consolidated financial statements included elsewhere in this Form 10-K.
Current report
The Class A-1 Notes are classified as held-to-maturity investments. The following table summarizes the carrying values and approximate fair values of our investment securities held-to-maturity as of the dates shown:
Current report
On April 4, 2025, we entered into a five-year pay-fixed interest rate swap agreement with a notional amount of $100 million which was scheduled to mature on April 4, 2030. The facility was discontinued on April 9, 2025, and a gain of $1.1 million was recognized by the Company. The gain is being accreted from other comprehensive income, net of deferred taxes, as a reduction of interest expense through maturity date of the contract.
Removed paragraphs (7)
Previous report
Net occupancy and equipment expenses were $12.7 million and $11.3 million for the years ended December 31, 2024 and 2023, respectively. This category includes building, leasehold, furniture, fixtures and equipment depreciation and software amortization totaling $5.7 million and $4.9 million for the years ended December 31, 2024 and 2023, respectively. The increases were primarily due to costs associated with opening three branch locations during 2024.
Previous report
Legal and professional fees were $5.6 million and $7.8 million for the years ended December 31, 2024 and 2023, respectively. The decrease in these expenses was primarily related to decreased legal costs for corporate business, loan collections and new products and decreased professional fees for information technology consulting. Legal fees decreased $1.5 million and consulting fees decreased $332,000 for the year ended December 31, 2024 compared to December 31, 2023. The addition of in-house counsel and information technology specialists contributed to these decreases.
Previous report
Regulatory assessment fees increased from $2.6 million for the year ended December 31, 2023 to $4.4 million for the year ended December 31, 2024. The increase was primarily due to our growth in total assets from $4.40 billion at December 31, 2023 to $4.94 billion at December 31, 2024 and changes in our assessment rate during the year.
Previous report
The Company's software-related expenditures, including software purchases and maintenance, amounted to $3.3 million and $2.4 million for the years ended December 31, 2024 and 2023, respectively. The increase in these expenses is attributed to our continued investment towards adopting new and advanced technology and software aimed at achieving greater efficiency in lending and deposit processes and management of risk.
Previous report
Advertising and marketing expenses and other noninterest expenses decreased $1.2 million for the year ended December 31, 2024 compared to December 31, 2023. The decreases were primarily a result of the Company's expense reduction initiatives and decreases in ACH and deposit account related fraud losses.
Previous report
The decrease in owner occupied commercial real estate loans was due to payoffs during the year and the increase in non-owner occupied commercial real estate loans was due to the addition of several lenders and increased productivity of existing lenders in response to market demand.
Previous report
During July 2022, we entered into a five-year pay-fixed interest rate swap agreement with a notional amount of $200 million on its floating rate deposits. The facility, which was designated as a cash flow hedge, was discontinued on August 24, 2022, and a gain on the terminated hedge of $3.0 million was recognized by the Company. The gain is being accreted from other comprehensive income (loss), net of deferred taxes, into interest expense through the maturity date of the contract, or July 9, 2027.
Reworded paragraphs (43)
Previous wording
We are a bank holding company headquartered in Humble, Texas and operated 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. 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 December 31, 2024, we had, on a consolidated basis, total assets of $4.94 billion, total loans of $3.97 billion, total deposits of $4.31 billion and total shareholders’ equity of $460.7 million.
Current wording
We are a bank holding company headquartered in Humble, Texas and operated 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. Our market expertise, coupled with a deep understanding of our customers’ needs, allows us to deliver tailored financial products and services. Following the completion of our merger with Keystone Bancshares, Inc., a Texas corporation (“Keystone”), discussed below, we currently operate twenty-two branches, with ten branches in the Greater Houston market, three branches in the Dallas-Fort Worth market, seven branches in the Austin-San Antonio market, one branch in Ballinger, Texas, and one branch in Detroit, Texas. As of December 31, 2025, we had, on a consolidated basis, total assets of $5.34 billion, total loans of $4.39 billion, total deposits of $4.63 billion and total shareholders’ equity of $531.0 million.
Previous wording
The Company filed a Registration Statement on Form S-3 with the SEC on September 25, 2024 registering the resale from time to time by the securityholders named therein of the shares of Series A Preferred Stock and warrants to purchase an aggregate of 175,000 shares of the Company's common stock (or, at the election of the warrant holder in accordance with the terms of the warrant agreement, Series B Preferred Stock or non-voting common stock of the Company) (the “Preferred Warrants”)), issued to such securityholders in the private placement completed on September 30, 2022 and the securities issuable upon conversion of shares of Series A Preferred Stock, Series B Preferred Stock or non-voting common stock, or upon exercise of the Preferred Warrants. The Registration Statement was declared effective by the SEC on October 4, 2024.
Current wording
The Company filed a Registration Statement on Form S-3 with the SEC on September 25, 2024 registering the resale from time to time by the securityholders named therein of the shares of Series A Preferred Stock and warrants to purchase an aggregate of 175,000 shares of the Company's common stock (or, at the election of the warrant holder in accordance with the terms of the warrant agreement, Series B Preferred Stock or non-voting common stock of the Company) (the “Preferred Warrants”)), issued to such securityholders in the private placement completed on September 30, 2022 and the securities issuable upon conversion of shares of
Previous wording
Net interest income increased $21.2 million, or 15.2%, during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to increased interest income from loan growth and increased yields on loans offset by an increase in interest expense resulting from interest-bearing deposit growth and increased rates paid on interest-bearing deposits. Average loans were $3.79 billion for the year ended December 31, 2024, compared to $3.37 billion for the year ended December 31, 2023 with the increase primarily due to loan growth in commercial and industrial loans and construction and development real estate loans. Average yield on loans was 7.80% for the year ended December 31, 2024, compared to 7.39% for the year ended December 31, 2023. Interest expense related to interest bearing deposit accounts was $159.7 million and $115.0 million for the years ended December 31, 2024 and 2023, respectively. Average interest-bearing deposits were $3.46 billion for the year ended December 31, 2024, compared to $2.79 billion for the year ended December 31, 2023. The average cost of interest-bearing deposits was 4.62% for the year ended December 31, 2024 and 4.13% for the year ended December 31, 2023. For the year ended December 31, 2024, net interest margin and net interest spread were 3.67% and 2.81%, respectively, compared to 3.73% and 2.86%, respectively, for the year ended December 31, 2023.
Current wording
Net interest income increased $34.5 million, or 21.4%, during the year ended December 31, 2025, compared to the year ended December 31, 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 were $4.12 billion for the year ended December 31, 2025, compared to $3.79 billion for the year ended December 31, 2024, with the increase primarily due to loan growth in commercial and industrial loans. Average yield on loans was 7.68% for the year ended December 31, 2025, compared to 7.80% for the year ended December 31, 2024. Interest expense related to interest bearing deposit accounts was $150.3 million and $159.7 million for the years ended December 31, 2025 and 2024, respectively. Average interest-bearing deposits were $3.83 billion for the year ended December 31, 2025, compared to $3.46 billion for the year ended December 31, 2024. The average cost of interest-bearing deposits was 3.93% for the year ended December 31, 2025 and 4.62% for the year ended December 31, 2024. For the year ended December 31, 2025, net interest margin and net interest spread were 4.06% and 3.36%, respectively, compared to 3.67% and 2.81%, respectively, for the year ended December 31, 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 $16.5 million, $15.5 million, and $14.7 million for the years ended December 31, 2024, 2023, and 2022, 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 $13.4 million, $10.7 million, and $8.8 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Previous wording
The provision for credit losses for the year ended December 31, 2024 was $5.7 million, compared to $6.3 million for the year ended December 31, 2023. The provision for credit losses for the year ended December 31, 2024 related primarily to provisioning for new loans and commitments. No provision for credit losses for securities was recorded for the year ended December 31, 2024.
Current wording
The provision for credit losses for the year ended December 31, 2025 was $7.6 million, compared to $5.7 million for the year ended December 31, 2024. The provision for credit losses for the year ended December 31, 2025 related primarily to provisioning for new loans and commitments. No provision for credit losses for securities was recorded for the years ended December 31, 2025 and 2024.
Previous wording
As of December 31, 2024, the allowance for credit losses for loans totaled $40.3 million, or 1.02% of total loans, compared to $37.0 million, or 1.02% of total loans, as of December 31, 2023. At December 31, 2024 and 2023, the allowance for credit losses for unfunded loan commitments was $1.4 million and $2.4 million, respectively. No allowance for credit losses for securities was recorded as of December 31, 2024 and 2023.
Current wording
As of December 31, 2025, the allowance for credit losses for loans totaled $43.9 million, or 1.00% of total loans, compared to $40.3 million, or 1.02% of total loans, as of December 31, 2024. At December 31, 2025 and 2024, the allowance for credit losses for off-balance sheet commitments was $1.8 million and $1.4 million, respectively. No allowance for credit losses for securities was recorded as of December 31, 2025 and 2024.
Previous wording
The increase in noninterest income of $2.4 million for the year ended December 31, 2024, compared to the year ended December 31, 2023, was primarily due to increases in service charges and fees and BOLI income, offset by decreases in gains recognized on the sale of the guaranteed portion of SBA loans, derivative related fee income, and advisory fee income. In addition, the Company recognized $4,000 in losses on the sales of investment securities during the year ended December 31, 2024, compared to gains of $482,000 recognized during the year ended December 31, 2023.
Current wording
The increase in noninterest income of $3.0 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to increased service charges and fees and increased earnings on BOLI, offset by losses on the sales of investment securities and a decrease in Small Business Investment income. In addition, the Company recognized $610,000 in losses on the sales of investment securities during the year ended December 31, 2025, compared to losses of $4,000 recognized during the year ended December 31, 2024.
Previous wording
The increase in noninterest expense of $4.5 million for the year ended December 31, 2024, compared to the year ended December 31, 2023, was primarily due to increases in salaries and employee benefit expenses, increased expenses related to new branch locations, increases in regulatory assessments, and investment in new technology and software. The increase in noninterest expense was offset by a decrease in legal and professional fees and advertising and marketing expenses.
Current wording
The increase in noninterest expense of $14.2 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to increased salaries and employee benefit expenses and increased legal and professional fees.
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 $65.1 million for the year ended December 31, 2024, an increase of $2.9 million, or 4.7%, compared to $62.2 million for the same period in 2023. The increase was primarily due to annual wage increases and merit awards, offset by workforce reductions during 2024. For the year ended December 31, 2024, the average number of employees was 363, compared to an average number of employees of 370 for the year ended December 31, 2023.
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 $77.2 million for the year ended December 31, 2025, an increase of $12.1 million, or 18.5%, compared to $65.1 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 year ended December 31, 2025, the average number of employees was 390, compared to an average number of employees of 363 for the year ended December 31, 2024.
Previous wording
For the years ended December 31, 2024 and 2023, income tax expense totaled $13.7 million and $8.2 million, respectively. Our effective tax rates were at 22.3% and 19.7% for the years ended December 31, 2024 and 2023, respectively.
Current wording
For the years ended December 31, 2025 and 2024, income tax expense totaled $16.5 million and $13.7 million, respectively. Our effective tax rates were at 19.9% and 22.3% for the years ended December 31, 2025 and 2024, respectively. The decrease in effective tax rate was primarily due to tax credit purchased in 2025.
Previous wording
Total assets were $4.94 billion as of December 31, 2024, compared to $4.40 billion as of December 31, 2023. The increase of $546.4 million, or 12.4%, was primarily due to organic loan growth and the increase in investment securities available-for-sale. The increases were primarily funded by the growth in demand deposits.
Current wording
Total assets were $5.34 billion as of December 31, 2025, compared to $4.94 billion as of December 31, 2024. The increase of $398.3 million, or 8.1%, 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.
Previous wording
As of December 31, 2024, total loans were $3.97 billion, an increase of $327.6 million, or 9.0%, compared to $3.64 billion as of December 31, 2023. Commercial and industrial loans and construction and development real estate loans accounted for most of the loan growth for the year ended December 31, 2024. Total loans as a percentage of deposits were 92.0% and 95.7% as of December 31, 2024 and 2023, respectively. Total loans as a percentage of assets were 80.3% and 82.8% as of December 31, 2024 and 2023, respectively.
Current wording
As of December 31, 2025, total loans were $4.39 billion, an increase of $428.3 million, or 10.8%, compared to $3.97 billion as of December 31, 2024. Commercial and industrial loans accounted for most of the loan growth for the year ended December 31, 2025. Total loans as a percentage of deposits were 95.0% and 92.0% as of December 31, 2025 and 2024, respectively. Total loans as a percentage of assets were 82.3% and 80.3% as of December 31, 2025 and 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 $72.7 million, or 14.0%, to $448.1 million as of December 31, 2024 from $520.8 million as of December 31, 2023.
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 $13.4 million, or 3.0%, to $434.7 million as of December 31, 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 $65.5 million, or 11.2%, to $652.1 million as of December 31, 2024 from $586.6 million as of December 31, 2023.
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 $58.3 million, or 8.9%, to $710.4 million as of December 31, 2025 from $652.1 million as of December 31, 2024.
Previous wording
Residential Real Estate Loans. Residential real estate loans consists of 1-4 family residential loans and multi-family residential loans. Our 1-4 family residential loan portfolio is comprised of owner-occupied and investor owned loans secured by 1-4 family homes. 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 $5.9 million, or 1.7%, to $336.7 million as of December 31, 2024 from $342.6 million as of December 31, 2023.
Current wording
Residential Real Estate Loans. Residential real estate loans consists of 1-4 family residential loans and multi-family residential loans. Our 1-4 family residential loan portfolio is comprised of owner-occupied and investor owned loans secured by 1-4 family homes. 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 $3.3 million, or 1.0%, to $333.4 million as of December 31, 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 our Texas markets and are generally diverse in terms of type. Our builder finance group 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 increased $177.8 million, or 25.6%, to $871.4 million as of December 31, 2024 from $693.6 million as of December 31, 2023 due primarily to the additional productivity from the builder finance group.
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 our Texas markets and are generally diverse in terms of type. Our builder finance group 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 $48.0 million, or 5.5%, to $823.4 million as of December 31, 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 December 31, 2024 and 2023, outstanding factored receivables were $36.8 million and $25.8 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 December 31, 2025 and 2024, outstanding factored receivables were $26.7 million and $36.8 million, respectively.
Previous wording
Commercial and industrial loans increased $234.3 million, or 18.6%, to $1.50 billion as of December 31, 2024 from $1.26 billion as of December 31, 2023. The increase was primarily a result of increased productivity of existing lenders in response to market demand.
Current wording
Commercial and industrial loans increased $409.2 million, or 27.3%, to $1.91 billion as of December 31, 2025 from $1.50 billion as of December 31, 2024. The increase was primarily a result of increased productivity of existing lenders in response to market demand.
Previous wording
We had $28.8 million in nonperforming assets as of December 31, 2024, compared to $17.3 million as of December 31, 2023. As of December 31, 2024, the nonperforming assets to total assets was 0.58%, compared to 0.39% as of December 31, 2023.
Current wording
We had $29.9 million in nonperforming assets as of December 31, 2025, compared to $28.8 million as of December 31, 2024. As of December 31, 2025, the nonperforming assets to total assets was 0.56%, compared to 0.58% as of December 31, 2024.
Previous wording
As of December 31, 2024, the allowance for credit losses on loans totaled $40.3 million, or 1.02% of total loans. As of December 31, 2023, the allowance for credit losses on loans totaled $37.0 million, or 1.02% of total loans. The increase in our allowance for credit losses on loans of $3.3 million, or 8.9%, was primarily due to the $6.7 million provision for credit losses on loans recorded for the year ended December 31, 2024, offset by net charge-offs of $3.4 million for the year ended December 31, 2024.
Current wording
As of December 31, 2025, the allowance for credit losses on loans totaled $43.9 million, or 1.00% of total loans. As of December 31, 2024, the allowance for credit losses on loans totaled $40.3 million, or 1.02% of total loans. The increase in our allowance for credit losses on loans of $3.6 million, or 9.0%, was primarily due to the $7.2 million provision for credit losses on loans recorded for the year ended December 31, 2025, offset by net charge-offs of $3.6 million for the year ended December 31, 2025.
Previous wording
(severity) to which the market value has been less than costs; (3) the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer, such as changes in technology that impair the earnings potential of the investment or the discontinuance of a segment of the business that may affect the future earnings potential; and (4) changes in the rating of the security by a rating agency. Based on management's analysis, an allowance for credit losses for the security portfolio was not deemed to be needed as of December 31, 2024.
Current wording
Factors management considers in assessing whether a discounted cash flow method evaluation is needed for a security whose fair value is less than amortized costs include: (1) management will assess whether it intends to sell, or if it is more likely than not it will be required to sell, the security before recovery of the amortized cost basis; (2) the length of time (duration) and the extent (severity) to which the market value has been less than costs; (3) the financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer, such as changes in technology that impair the earnings potential of the investment or the discontinuance of a segment of the business that may affect the future earnings potential; and (4) changes in the rating of the security by a rating agency. Based on management's analysis, an allowance for credit losses for the security portfolio was not deemed to be needed as of December 31, 2025.
Previous wording
The following table summarizes the amortized cost and estimated fair value of our investment securities as of the dates shown:
Current wording
The following table summarizes the amortized cost and estimated fair value of our investment securities available-for-sale as of the dates shown:
Previous wording
As of December 31, 2024, the carrying amount of the security portfolio was $384.0 million, compared to $178.1 million as of December 31, 2023, an increase of $205.9 million, or 115.6%. The increase relates primarily to net purchases of $4.24 billion in agencies, municipal securities, mortgage-back securities and corporate bonds offset by maturities, calls and paydowns of $4.04 billion for the year ended December 31, 2024. Investment securities represented 7.8% and 4.1% of total assets as of December 31, 2024 and 2023, respectively.
Current wording
As of December 31, 2025, the carrying amount of the available-for-sale security portfolio was $383.2 million, compared to $384.0 million as of December 31, 2024, a decrease of $833,000, or 0.2%. The decrease relates primarily to net purchases of $5.15 billion in agencies, municipal securities, mortgage-back securities and corporate bonds offset by maturities, calls and paydowns of $5.17 billion for the year ended December 31, 2025. Investment securities available-for-sale represented 7.2% and 7.8% of total assets as of December 31, 2025 and 2024, respectively.
Previous wording
The amortized cost and estimated fair value of securities available for sale at December 31, 2024, by contractual maturity, are shown below:
Current wording
The amortized cost and estimated fair value of securities available-for-sale and held-to-maturity at December 31, 2025, by contractual maturity, are shown below:
Previous wording
The weighted average life of our investment portfolio was 4.79 years and 7.47 years as of December 31, 2024 and 2023, respectively.
Current wording
The weighted average life of our investment portfolio was 3.99 years and 4.79 years as of December 31, 2025 and 2024, respectively.
Previous wording
Total deposits as of December 31, 2024 were $4.31 billion, an increase of $507.4 million, or 13.3%, compared to $3.80 billion as of December 31, 2023. The increase was primarily due to growth in our national wholesale deposits through our core, fiduciary and institutional deposit programs, continued growth in our primary market areas, and the increase in commercial lending relationships for which we also seek deposit balances.
Current wording
Total deposits as of December 31, 2025 were $4.63 billion, an increase of $316.4 million, or 7.3%, compared to $4.31 billion as of December 31, 2024. The increase was primarily due to growth in our national wholesale deposits through our core, fiduciary and institutional deposit programs, continued growth in our primary market areas, and the increase in commercial lending relationships for which we also seek deposit balances.
Previous wording
Noninterest-bearing deposits as of December 31, 2024 were $602.1 million, an increase of $142.5 million, or 31.0%, compared to $459.6 million as of December 31, 2023. Total interest-bearing account balances as of December 31, 2024 were $3.71 billion, an increase of $364.8 million, or 10.9%, from $3.34 billion as of December 31, 2023.
Current wording
Noninterest-bearing deposits as of December 31, 2025 were $495.0 million, a decrease of $107.1 million, or 17.8%, compared to $602.1 million as of December 31, 2024. Total interest-bearing account balances as of December 31, 2025 were $4.13 billion, an increase of $423.5 million, or 11.4%, from $3.71 billion as of December 31, 2024.
Previous wording
The estimated amount of uninsured deposits at December 31, 2024 was $1.35 billion.
Current wording
The estimated amount of uninsured deposits at December 31, 2025 was $1.32 billion.
Previous wording
The ratio of average noninterest-bearing deposits to average total deposits for the years ended December 31, 2024 and 2023 was 11.7% and 14.5%, respectively.
Current wording
The ratio of average noninterest-bearing deposits to average total deposits for the years ended December 31, 2025 and 2024 was 10.5% and 11.7%, respectively.
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 December 31, 2024 and 2023, total borrowing capacity available under this arrangement was $623.7 million and $565.1 million, respectively. The Company had no FHLB advances outstanding at December 31, 2024 and 2023. Our cost of FHLB advances was 5.25% for the year ended December 31, 2024 and 5.43% for the year ended December 31, 2023. In addition, letters of credit with the FHLB in the amount of $535.8 million and $463.1 million were outstanding at December 31, 2024 and 2023, respectively. The letters of credit are used to collateralize public fund deposit accounts in excess of FDIC insurance limits and have expirations ranging from January 2025 through October 2026 as of December 31, 2024.
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 December 31, 2025 and 2024, total borrowing capacity available under this arrangement was $499.5 million and $623.7 million, respectively. The Company had no FHLB advances outstanding at December 31, 2025 and 2024. Our cost of FHLB advances was 4.41% for the year ended December 31, 2025 and 5.25% for the year ended December 31, 2024. In addition, letters of credit with the FHLB in the amount of $592.0 million and $535.8 million were outstanding at December 31, 2025 and 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 January 2026 through January 2027 as of December 31, 2025.
Previous wording
Line of Credit - Senior Debt. The Company has a $55.0 million revolving line of credit facility which 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 is 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 December 31, 2024 and 2023, the outstanding balance was $30.9 million and $38.9 million, respectively.
Current wording
Line of Credit - Senior Debt. The Company has a $55.0 million revolving line of credit facility which 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 is 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 December 31, 2025 and 2024, the outstanding balance was $37.9 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 its 5.500% Fixed-to-Floating Rate Subordinated Notes due 2032. As of December 31, 2024, the outstanding balance was $80.8 million, net of $1.5 million 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-K.
Current wording
Note Payable - Subordinated Debt. On March 31, 2022, the Company issued and sold $82.3 million in aggregate principal amount of its 5.500% Fixed-to-Floating Rate Subordinated Notes due 2032. As of December 31, 2025, the outstanding balance was $81.0 million, net of $1.3 million 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-K.
Previous wording
Our cost of notes payable was 6.55% and 6.74% for the years ended December 31, 2024 and 2023, respectively.
Current wording
Our cost of notes payable was 6.13% and 6.55% for the years ended December 31, 2025 and 2024, respectively.
Previous wording
Federal Reserve Borrower-in-Custody (BIC) Loan Pledge Arrangement. In June 2023, the Federal Reserve Bank approved the Company to begin pledging, on a blanket floating lien status, its commercial and industrial loans under a Borrower-in-Custody arrangement. The arrangement provides the Company with the ability to secure collateralized contingency funding from the Discount Window of the Federal Reserve Bank of Dallas. As of December 31, 2024 and 2023, total borrowing capacity under this arrangement was $1.5 billion and $1.2 billion, respectively. There were no advances outstanding at December 31, 2024 and 2023.
Current wording
Federal Reserve Borrower-in-Custody (BIC) Loan Pledge Arrangement. In June 2023, the Federal Reserve Bank approved the Company to begin pledging, on a blanket floating lien status, its commercial and industrial loans under a Borrower-in-Custody arrangement. The arrangement provides the Company with the ability to secure collateralized contingency funding from the Discount Window of the Federal Reserve Bank of Dallas. As of December 31, 2025 and 2024, total borrowing capacity under this arrangement was $1.5 billion. There were no advances outstanding at December 31, 2025 and 2024.
Previous wording
At December 31, 2024, the Company had borrowing capacity available 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. At December 31, 2023, the Company had borrowing capacity available under FHLB advances of $565.1 million, line of credit - senior debt of $11.1 million, the Federal Reserve Bank of Dallas Discount Window of $1.2 billion, and federal funds lines of credit of $36.5 million.
Current wording
At December 31, 2025, the Company had borrowing capacity available under FHLB advances of $499.5 million, line of credit - senior debt of $17.1 million, the Federal Reserve Bank of Dallas Discount Window of $1.5 billion, and federal funds lines of credit of $36.5 million. At December 31, 2024, the Company had borrowing capacity available 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 $4.54 billion for the year ended December 31, 2024 and $3.90 billion for the year ended December 31, 2023.
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 $4.98 billion for the year ended December 31, 2025 and $4.54 billion for the year ended December 31, 2024.
Previous wording
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. As of December 31, 2023, we had $1.35 billion in outstanding commitments to extend credit and $26.9 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 December 31, 2025, we had $1.69 billion in outstanding commitments to extend credit and $97.0 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 December 31, 2024 and 2023, we had no exposure to future cash requirements associated with known uncertainties or capital expenditure of a material nature. As of December 31, 2024, we had cash and cash equivalents of $421.2 million, compared to $411.8 million as of December 31, 2023.
Current wording
As of December 31, 2025 and 2024, we had no exposure to future cash requirements associated with known uncertainties or capital expenditure of a material nature. As of December 31, 2025, we had cash and cash equivalents of $181.2 million, compared to $421.2 million as of December 31, 2024.
Previous wording
Total shareholders’ equity increased to $460.7 million as of December 31, 2024, compared to $412.0 million as of December 31, 2023, an increase of $48.7 million, or 11.8%. This increase was primarily the result of the $47.7 million in net income and $3.6 million, net of tax, in other comprehensive income, offset by the $4.7 million of dividends declared on the Series A Preferred Stock.
Current wording
Total shareholders’ equity increased to $531.0 million as of December 31, 2025, compared to $460.7 million as of December 31, 2024, an increase of $70.3 million, or 15.3%. This increase was primarily the result of the $66.3 million in net income and $6.4 million, net of tax, in other comprehensive income, offset by the $4.8 million of dividends declared on the Series A Preferred Stock.
Previous wording
On October 31, 2024, we entered into a ten year and four-month receive-fixed interest rate swap agreement with a notional amount of $100 million and a receive-fixed interest rate of 3.728%. Counterparty settlements begin on April 30, 2025. The instrument is designated as a cash flow hedge, and changes in fair value are recognized in other comprehensive income. The facility is scheduled to mature on April 30, 2035.
Current wording
On October 31, 2024, we entered into a ten year and four-month receive-fixed interest rate swap agreement with a notional amount of $100 million which was scheduled to mature on April 30, 2035. The facility was discontinued on March 4, 2025, and a gain of $456,000 was recognized by the Company. The gain is being accreted from other comprehensive income, net of deferred taxes, as a reduction of interest expense through maturity date of the contract.
Showing the first 40 of 43 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Series A Preferred Stock, Series B Preferred Stock or non-voting common stock, or upon exercise of the Preferred Warrants. The Registration Statement was declared effective by the SEC on October 4, 2024.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Factors management considers in assessing whether a discounted cash flow method evaluation is needed for a security whose fair value is less than amortized costs include: (1) management will assess whether it intends to sell, or if it is more likely than not it will be required to sell, the security before recovery of the amortized cost basis; (2) the length of time (duration) and the extent
Previous report — wording carried elsewhere
The Company will lose its emerging growth company status upon the earliest of : (i) the last day of the fiscal year in which the Company has $1.235 billion or more in annual revenues; (ii) the date on which the Company becomes a “large accelerated filer”