Yahoo Finanzas Third Coast Bancshares Inc (TCBX) Q1 2024 Earnings Call Transcript Highlights: Key Financial ...
Net Income: $10.4 million.
Return on Equity: 11%.
Diluted Earnings Per Share: $0.61.
Net Interest Income: Increased by 12.5% on an annualized days adjusted basis.
Noninterest Expenses: Decreased by 1.9% or $500,000.
Investment Securities: Up $68.2 million, current yield increased to 6.15% from 5.36%.
Deposit Growth: $248 million for the quarter.
Loan Growth: $107 million for the quarter.
Loan to Deposit Ratio: Fell to 92.5%.
Net Interest Margin: Declined by one basis point.
Gain from Sale of Swap: $5.25 million, to be accreted into income at $275,000 per quarter.
Nonperforming Assets: Increased by $4.4 million, representing 0.47% of total assets.
Provisions for Credit Losses: $1.6 million for the quarter.
Allowance for Credit Losses (ACL): Remained at 1.02% of total loans.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the drivers of the Net Interest Margin (NIM) which declined only one basis point and provide expectations for the next quarter? A: Bart Caraway, CEO of Third Coast Bancshares, explained that the slight decline in NIM was cushioned by a beneficial swap sale in April, which reduced interest expenses. He anticipates the NIM to remain stable in the next quarter, despite the drag caused by substantial cash inflows late in the first quarter, which were invested at low yields.
Q: Could you confirm the net interest income guidance for the year and explain why it might be trending towards the lower end of the previous forecast? A: R. John McWhorter, CFO, clarified that while the guidance remains at a growth of over 10%, achieving the higher end of the forecast might be challenging due to the timing of loan bookings. Most loan growth occurred late in the first quarter, which doesn't fully impact the annual figures.
Q: What strategies are in place to improve the deposit growth and manage the non-interest bearing deposit mix? A: Bart Caraway highlighted ongoing efforts to attract treasury management customers and the introduction of new products aimed at increasing deposits. He noted an unexpected drop in non-interest bearing deposits this quarter, which he attributes partly to tax-related withdrawals.
Q: Can you provide insights into the expense management strategy and expectations for future investments? A: Bart Caraway discussed maintaining strict control over expenses, with a focus on strategic investments that align with the bank's growth objectives. He emphasized the bank's efficient management of salary expenses and operational costs, which are expected to help achieve an efficiency ratio starting with a five in the near term.
Q: What drove the increase in service charges this quarter, and is this a sustainable trend? A: R. John McWhorter noted that the increase was primarily related to loan-related service charges, such as fees for unused lines of credit. While this quarter saw a higher than usual increase, he expects service charges to stabilize around the current level going forward.
Q: Could you comment on the credit quality trends, particularly in the criticized or classified loans? A: Audrey Duncan, Chief Credit Officer, reported a few downgrades in the loan portfolio but reassured that these are still performing loans with strong collateral backing. She highlighted the bank's robust credit management practices, which help maintain the overall health of the loan portfolio.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
