Third Coast Bancshares Inc (TCBX) 2023 Q2 法說會逐字稿

Greetings, and welcome to the Third Coast Bancshares' Second Quarter 2023 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加 Third Coast Bancshares 的 2023 年第二季度收益電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, Natalie Hairston, Senior Vice President, Dennard Lascar, Investor Relations for Third Coast Bancshares. Thank you. You may begin.

現在我很高興向您介紹主持人 Natalie Hairston，她是 Third Coast Bancshares 投資者關係部門 Dennard Lascar 高級副總裁。謝謝。你可以開始了。

Thank you, operator, and good morning, everyone. We appreciate you joining us for Third Coast Bancshares conference call and webcast to review our second quarter 2023 results. With me today is Bart Caraway, Chairman, President and Chief Executive Officer; John McWhorter, Chief Financial Officer; and Audrey Duncan, Chief Credit Officer.

謝謝接線員，大家早上好。我們感謝您參加 Third Coast Bancshares 電話會議和網絡廣播，回顧我們 2023 年第二季度的業績。今天與我在一起的是董事長、總裁兼首席執行官巴特·卡拉韋 (Bart Caraway)；約翰·麥克沃特，首席財務官；和首席信貸官奧黛麗鄧肯。

First, a few housekeeping items. There will be a replay of today's call, and it will be available by webcast on the Investors section of our website at ir.tcbssb.com. There will also be a telephonic replay available until August 3, 2023, and more information on how to access these replay features was included in yesterday's earnings release.

首先，一些家務用品。今天的電話會議將進行重播，並將通過我們網站 ir.tcbssb.com 的投資者部分的網絡廣播進行播放。截至 2023 年 8 月 3 日，還將提供電話重播，有關如何訪問這些重播功能的更多信息已包含在昨天的財報中。

Please note that information reported on this call speaks only as of today, July 27, 2023, and therefore, you are advised that time-sensitive information may no longer be accurate as of the time of any replay listing or transcript reading.

請注意，本次電話會議報告的信息僅截至今天（2023 年 7 月 27 日），因此，我們建議您，在任何重播列表或文字記錄閱讀時，時間敏感的信息可能不再準確。

In addition, the comments made by management during this conference call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of management. However, various risks, uncertainties and contingencies could cause actual results, performance or achievements to differ materially from those expressed in the statements made by management.

此外，管理層在本次電話會議中發表的評論可能包含美國聯邦證券法含義內的前瞻性陳述。這些前瞻性陳述反映了管理層當前的觀點。然而，各種風險、不確定性和意外事件可能導致實際結果、業績或成就與管理層聲明中表達的結果存在重大差異。

The listener or reader is encouraged to read the annual report on Form 10-K that was filed on March 15, 2023, to better understand those risks, uncertainties and contingencies. The comments made today will also include certain non-GAAP financial measures. Additional details and reconciliation to the most directly comparable GAAP financial measures were included in yesterday's earnings release, which can be found on the Third Coast website.

我們鼓勵聽眾或讀者閱讀 2023 年 3 月 15 日提交的 10-K 表格年度報告，以更好地了解這些風險、不確定性和意外情況。今天發表的評論還將包括某些非公認會計準則財務指標。昨天的收益報告中包含了更多詳細信息以及與最直接可比的 GAAP 財務指標的調節，您可以在第三海岸網站上找到該報告。

Now I would like to turn the call over to Third Coast Chairman, President and CEO, Mr. Bart Caraway. Bart?

現在我想把電話轉給 Third Coast 董事長、總裁兼首席執行官巴特·卡拉韋 (Bart Caraway) 先生。巴特？

Thanks, Natalie, and good morning, everyone. Thank you for joining us today. I'll begin by highlighting the company's performance for the second quarter. John will then provide a more detailed financial review, and Audrey will give a credit update. Then before we take your questions, I'll return to discuss our outlook.

謝謝娜塔莉，大家早上好。感謝您今天加入我們。首先我將重點介紹公司第二季度的業績。然後約翰將提供更詳細的財務審查，奧黛麗將提供信用更新。然後在我們回答你們的問題之前，我將回來討論我們的前景。

As reported in yesterday's press release, our second quarter results demonstrate Third Coast's ability to maintain strong credit quality, faster than peer balance sheet growth and improving margins. Despite macro pressures, nonperforming assets to total assets were 25 basis points, the same as the prior quarter and down from 33 basis points in the second quarter of 2022.

正如昨天的新聞稿所報導的，我們第二季度的業績表明，Third Coast 有能力保持強勁的信貸質量、快於同行的資產負債表增長以及不斷提高的利潤率。儘管面臨宏觀壓力，不良資產佔總資產的比例仍為 25 個基點，與上一季度持平，低於 2022 年第二季度的 33 個基點。

Total assets reached $3.96 billion, which was 2.7% more than the first quarter of 2023 and 18% over the prior year quarter. Loans held for investment grew to $3.33 billion, which was 3.8% higher sequentially and 21.3% more than a year ago period. Deposits reached $3.41 billion, 2.6% over the prior quarter and 17.6% more than the same period last year.

總資產達到 39.6 億美元，比 2023 年第一季度增長 2.7%，比去年同期增長 18%。持有的投資貸款增至 33.3 億美元，環比增長 3.8%，比去年同期增長 21.3%。存款達34.1億美元，環比增長2.6%，同比增長17.6%。

Finally, net interest margin improved 3 basis points from the prior quarter and 5 basis points from last year to a strong 3.82%. We are also pleased with the increase in tangible book value to $22.82. A positive sign for investors and customers alike. This achievement shows Third Coast's strong financial footing and is well positioned for the current market environment.

最後，淨息差較上季度提高 3 個基點，較去年提高 5 個基點，達到 3.82%。我們還對有形賬面價值增加至 22.82 美元感到高興。對於投資者和客戶來說，這是一個積極的信號。這一成就表明了 Third Coast 強大的財務基礎，並為當前的市場環境做好了準備。

Third Coast's capital position remains strong with tangible common equity to tangible assets increasing slightly to 7.88%. By prioritizing customer satisfaction and operational confidence, we have established ourselves as a dependable financial institution. The excellent leadership and strong credit quality of the company further reinforces our position in the industry.

Third Coast 的資本狀況依然強勁，有形普通股權益與有形資產之比小幅上升至 7.88%。通過優先考慮客戶滿意度和運營信心，我們已成為一家值得信賴的金融機構。公司卓越的領導力和強大的信用質量進一步鞏固了我們在行業中的地位。

With that, I'll turn it over to John for a more detailed financial review. John?

這樣，我會將其交給約翰進行更詳細的財務審查。約翰？

Thank you, Bart, and good morning, everyone. We provided the detailed financial tables in yesterday's earnings release. So today, I'll provide some additional color around select balance sheet and profitability metrics from the second quarter.

謝謝巴特，大家早上好。我們在昨天的財報中提供了詳細的財務表格。因此，今天，我將圍繞第二季度的選定資產負債表和盈利指標提供一些額外的信息。

As Bart mentioned, second quarter loans were up 3.8% or $121 million sequentially. Deposits increased $86 million over the first quarter and total assets reached $3.96 billion, a new record for the company. For the same period, our net interest margin improved 3 basis points quarter-over-quarter and 5 basis points year-over-year to 3.82%. This improvement was primarily due to increased loan yields.

正如 Bart 提到的，第二季度貸款環比增長 3.8%，即 1.21 億美元。第一季度存款增加8600萬美元，總資產達到39.6億美元，創公司新紀錄。同期，我們的淨息差環比提高3個基點，同比提高5個基點至3.82%。這一改善主要是由於貸款收益率增加。

We remain slightly asset-sensitive with new business being added at lower spreads, resulting in a slight drag on the net interest margin. Going forward, loan growth is expected to offset margin pressures resulting in increases to net interest income. On May 26, we unwound our $200 million pay-fix law, realizing a gain of just over $5 million. This gain will be accreted over 5 years as an offset to interest expense.

我們仍然對資產略顯敏感，新業務以較低的利差增加，導致淨息差略有下降。展望未來，貸款增長預計將抵消利潤率壓力，從而導致淨利息收入增加。 5 月 26 日，我們取消了 2 億美元的薪酬固定法，實現了略高於 500 萬美元的收益。該收益將在 5 年內累積，作為利息支出的抵消。

Based on this quarter's average interest-bearing deposits, the offset is equivalent to 38 basis points. Combined with our 2 previous unwind, we have almost $9 million and gained equivalent to 70 basis points. At quarter end, our uninsured deposits totaled approximately $1 billion or 30%.

以本季度平均計息存款計算，抵消額相當於38個基點。加上我們之前的兩次平倉，我們有近 900 萬美元，收益相當於 70 個基點。截至季度末，我們的未保險存款總額約為 10 億美元，即 30%。

Our available borrowing lines are approximately $1.7 billion, resulting in a coverage ratio of 1.7:1. Noninterest expense totaled $23.8 million for the second quarter of 2023 compared to $22 million for the first quarter of 2023. As anticipated, increases from new branches, new employees and inflation have resulted in slight increases in noninterest expense.

我們的可用借款額度約為 17 億美元，覆蓋率為 1.7:1。 2023 年第二季度的非利息支出總額為2,380 萬美元，而2023 年第一季度的非利息支出為2,200 萬美元。正如預期的那樣，新分支機構、新員工和通貨膨脹的增加導致非利息支出略有增加。

I think for the remainder of 2023, noninterest expense will be in the range of $24 million. Net income available to common shareholders totaled $7.7 million for the second quarter compared to $8.1 million for the first quarter. Diluted earnings per share were $0.53 in the second quarter compared to $0.55 in the first quarter, a slight decrease of 4%.

我認為 2023 年剩餘時間裡，非利息支出將在 2400 萬美元左右。第二季度普通股股東可獲得的淨利潤總計 770 萬美元，而第一季度為 810 萬美元。第二季度攤薄每股收益為 0.53 美元，較第一季度的 0.55 美元小幅下降 4%。

This performance resulted in returns on average assets of 96 basis points and returns on average common equity of 9.44%. Additionally, our pretax pre-provision ROA was approximately 1.35%. That completes the financial review and at this point, I'll pass the call to Audrey for our credit quality review.

這一業績使得平均資產回報率為 96 個基點，平均普通股回報率為 9.44%。此外，我們的稅前撥備前 ROA 約為 1.35%。財務審查就完成了，此時，我將把電話轉給奧黛麗進行我們的信用質量審查。

Thank you, John, and good morning, everyone. Credit performance for the second quarter was again strong. Nonperforming assets to total assets was 25 basis for the first and second quarters of 2023, down 8 basis points from 33 basis points for the second quarter of 2022.

謝謝約翰，大家早上好。第二季度的信貸表現再次強勁。 2023年第一季度和第二季度不良資產佔總資產的比例為25個基點，比2022年第二季度的33個基點下降8個基點。

Nonperforming loans to loans held for investment remains low at 30 basis points, which decreased 10 basis points from 40 basis points as of the prior year period. We adopted the CECL methodology beginning January 1, 2023, and under the new methodology, we recorded a loan loss provision of $1.4 million during the current quarter compared to $1.2 million for the first quarter of 2023 and $3.4 million for the second quarter of 2022.

不良貸款與投資貸款之比仍保持在30個基點的低位，較上年同期的40個基點下降10個基點。我們從2023 年1 月1 日開始採用CECL 方法，根據新方法，我們在本季度記錄了140 萬美元的貸款損失撥備，而2023 年第一季度為120 萬美元，2022 年第二季度為340萬美元。

During the second quarter of 2023, our ACL increased from $35.9 million to $37.2 million. The ACL to total loans was 1.12% up from 97 basis points for the same period last year. During the 6 months ended June 30, 2023 and 2022, the company recorded net recoveries of $292,000 and $21,000, respectively. With that, I'll turn the call back to Bart. Bart?

2023 年第二季度，我們的 ACL 從 3590 萬美元增加到 3720 萬美元。 ACL 佔貸款總額的比例為 1.12%，高於去年同期的 97 個基點。截至2023年6月30日和2022年6月30日的6個月內，該公司的淨回收額分別為292,000美元和21,000美元。這樣，我會將電話轉回給巴特。巴特？

Thanks, Audrey. As we progress through the third quarter in the second half of the year, Third Coast remains vigilant about executing on the following internal and external objectives. First, managing the balance sheet in a conservative fashion, growing deposits to fund loan growth and continuing to enhance liquidity.

謝謝，奧黛麗。隨著下半年第三季度的進展，第三海岸仍然對執行以下內部和外部目標保持警惕。一是穩健管理資產負債表，增加存款為貸款增長提供資金，繼續增強流動性。

We have been able to take advantage of higher rates in the face of rising deposit costs to stabilize the net interest margin. We feel like our performance towards these objectives has been very solid. Second, pursuing growth amid the current economic climate. Despite fluctuating market conditions, we continue to be optimistic given our strong credit position and our ability to invest with confidence in our growth strategy.

面對存款成本上升，我們能夠利用較高的利率來穩定淨息差。我們覺得我們在實現這些目標方面的表現非常紮實。其次，在當前經濟形勢下追求增長。儘管市場狀況波動，但鑑於我們強大的信用狀況以及對增長戰略充滿信心的投資能力，我們仍然保持樂觀。

Our strong capital position and solid asset quality positions us to endure and perform through the coming market cycles. Third, discipline around expense growth and efficient capital allocation. Management is constantly tasked with improving efficiency. In that regard, we are exiting our Auto Finance division. Direct expense savings will be $500,000 plus and the $40 million in loans will be reallocated to higher earning assets, managing the asset allocations to maximize our balance sheet return.

我們強大的資本實力和穩健的資產質量使我們能夠在未來的市場週期中持續發展並保持良好表現。第三，圍繞費用增長和有效資本配置的紀律。管理層始終肩負著提高效率的任務。在這方面，我們正在退出汽車金融部門。直接費用節省將超過 500,000 美元，4000 萬美元的貸款將重新分配給收益更高的資產，管理資產分配以最大化我們的資產負債表回報。

Fourth, our commitment to quality and innovation. By maintaining our strong credit culture and finding innovative ways to build out service and product capabilities is strategically important to stay ahead of our competition.

第四，我們對質量和創新的承諾。保持我們強大的信用文化並尋找創新方法來增強服務和產品能力對於在競爭中保持領先地位具有重要的戰略意義。

And finally, we understand the importance of customer service and satisfaction. Our success in attracting, retaining and even connecting with customers has been a testament to our commitment to the satisfaction. By continuing to listen to their needs, we can maintain our loyal customer base, we believe in relationship banking and diversified lending.

最後，我們了解客戶服務和滿意度的重要性。我們在吸引、保留甚至與客戶建立聯繫方面的成功證明了我們對滿意度的承諾。通過繼續傾聽他們的需求，我們可以維持我們忠實的客戶群，我們相信關係銀行業務和多元化貸款。

Overall, we are well positioned to face any challenges that may arise and continue to provide value for our shareholders by staying focused on our core beliefs and listening to our customers, we can navigate through any softening in the growth expectations and emerge stronger on the other side.

總體而言，我們有能力應對可能出現的任何挑戰，並通過專注於我們的核心信念並傾聽客戶的意見，繼續為股東提供價值，我們可以克服增長預期的任何疲軟，並在其他方面變得更加強大邊。

This concludes our prepared remarks, and I'd now like to turn it back over to the operator to begin the question-and-answer session.

我們準備好的發言到此結束，現在我想將其轉回操作員以開始問答環節。

(Operator Instructions) Our first question comes from the line of Graham Dick with Piper Sandler.

（操作員說明）我們的第一個問題來自 Graham Dick 和 Piper Sandler 的線路。

So I just wanted to start on the loan growth side of things. I think last quarter, we had talked about doing about $300 million to $400 million of loan growth this year. It seems like you guys are a little bit ahead of schedule over the last 2 quarters.

所以我只想從貸款增長方面開始。我想上個季度，我們曾討論過今年貸款增長約 3 億至 4 億美元。過去兩個季度你們似乎比計劃提前了一點。

Just wanted to get any updates on your all's color around what you're looking at for growth this year on the loan side. And I know you mentioned that you're still pretty confident in your own strategy. So if there's any upside to that initial guidance would be interesting to hear?

只是想了解有關今年貸款方面增長的所有顏色的最新信息。我知道你提到你對自己的策略仍然非常有信心。那麼，最初的指導意見是否有任何好處值得聽聽呢？

Graham, I appreciate that. You actually teed that up for me because I did want to bring that up. So what we're looking for the rest of the year is probably $100 million to $200 million in net growth from now to the end of the year. I think that's probably more accurate with where we're seeing in terms of just the environment that we're in, and we're just being very selective on the loan side. We are seeing a lot of great customers coming to us, but we're also being very selective of what meets our criteria.

格雷厄姆，我很感激。你實際上為我提出了這個問題，因為我確實想提出這個問題。因此，我們預計今年剩餘時間裡從現在到年底的淨增長可能為 1 億至 2 億美元。我認為，就我們所處的環境而言，這可能更準確，而且我們在貸款方面非常有選擇性。我們看到很多優秀的客戶來到我們這裡，但我們也非常挑剔符合我們標準的客戶。

So I think $100 million to $200 million is probably the best number I can give you in that range that we'll see between now and the end of the year.

因此，我認為 1 億到 2 億美元可能是我可以給你的最好的數字，從現在到今年年底我們都會看到這個範圍。

Yes. And Graham just to add to that. I think we mentioned last quarter that loan growth has been somewhat limited by what we can raise in deposits so we obviously don't want to outstrip our deposit growth that we think we could be growing even faster if we weren't more disciplined on rate, but there's lots of good business out there. Last couple of months have been pretty strong, but we're going to be mindful of credit and rates and deposit growth, and that will limit the growth a little bit for the rest of the year.

是的。格雷厄姆補充道。我認為我們上個季度提到貸款增長在一定程度上受到我們可以籌集的存款的限制，因此我們顯然不想超過存款增長，我們認為如果我們在利率上不更加嚴格，我們可能會增長得更快，但那裡有很多好生意。過去幾個月的表現相當強勁，但我們將關注信貸、利率和存款的增長，這將在今年剩餘時間內稍微限制增長。

Okay. That's a perfect segue. So I guess, I mean you pretty answered to that, but it sounds like you expect deposit growth in the pipeline you guys have to pretty much match net growth for the rest of the year, I guess. Is that fair to assume?

好的。這是一個完美的延續。所以我想，我的意思是你對此做出了很好的回答，但聽起來你預計管道中的存款增長必須與今年剩餘時間的淨增長基本匹配，我猜。這樣假設公平嗎？

Correct.

正確的。

Okay. Great. And then I kind of just -- I wanted to follow up on the swap -- this decision to sell a swap and the impact that's going to have on the margin. Did you say that there's 38 basis points of impact for lower deposit costs going forward from that the amortization of that gain from $5 million and then $70 million from the $9 million in total you guys have?

好的。偉大的。然後我只是——我想跟進掉期——出售掉期的決定以及這將對利潤率產生的影響。您是否說過，從你們總共擁有的 900 萬美元中攤銷 500 萬美元收益，然後攤銷 7000 萬美元，未來存款成本會降低 38 個基點？

Correct. Although that is included in the second quarter, that's not additionally to where we are. I mean, that's fully reflected in the second quarter, but that is the net effect. If we did not have those swap gains, we would be that much worse off.

正確的。儘管這已包含在第二季度中，但這並沒有超出我們的水平。我的意思是，這在第二季度得到了充分體現，但這就是淨效應。如果我們沒有這些掉期收益，我們的情況就會更糟。

So for the second quarter, we only had one full month where we were paid in the swap. We were paid $280,000 for the month of April. And going forward, we will have for that particular trade about $85,000 a month. So we had a little excess -- not exactly accretion, but the swap income for the quarter, but most of the rest of it was baked in.

因此，在第二季度，我們只有整整一個月的時間來支付掉期費用。我們四月份的工資是 280,000 美元。展望未來，我們每月將為該特定交易獲得約 85,000 美元。所以我們有一點過剩——不完全是增值，而是本季度的掉期收入，但其餘大部分都被吸收了。

Okay. I appreciate it. And then the last thing for me, I guess, would be just on the direction of the overall margin. You said you expect a little more pressure here over the next couple of quarters, it sounds like.

好的。我很感激。我想，對我來說最後一件事就是整體利潤率的方向。你說你預計未來幾個季度這裡會面臨更大的壓力，聽起來是這樣。

Do you guys have like I guess, an amount of pressure you are expecting? I know you kind of hit the nail on the head this quarter with your guidance last quarter saying it was going to be up a couple of basis points. So if there's any color you can provide on what you're expecting in terms of pressure in the back half of the year, that would be helpful?

你們有像我想的那樣，有很大的壓力嗎？我知道您本季度的指導意見有點一語中的，您上季度的指導說它將上漲幾個基點。那麼，如果您能提供有關您對下半年壓力的預期的任何信息，這會有幫助嗎？

Yes, the market is not making it any easier on us. I mean the fact that rates went up today certainly helps us. We are still asset sensitive. Should rates start coming down, I mean, the swap income that we have is going to be great protection for rates going down.

是的，市場並沒有讓我們的處境變得更容易。我的意思是，今天利率上升這一事實肯定對我們有幫助。我們仍然對資產敏感。我的意思是，如果利率開始下降，我們擁有的掉期收入將成為利率下降的有力保護。

We had mentioned that new deals that we're putting on the books are at slightly lower spreads. So I think for the quarter, we averaged about 7.5%, so that should go up to somewhere between 7.75% and 8%. So a lower spread based on marginal cost of funds. But kind of best guess is this was the max margin for us for this cycle that will probably come down, I don't know, maybe 5 basis points this quarter is kind of a best guess. But I do think that the balance sheet growth will offset that so that our net interest income is actually up versus this quarter.

我們已經提到過，我們登記的新交易的價差略低。所以我認為本季度我們的平均增長率約為 7.5%，因此應該上升到 7.75% 到 8% 之間。因此，基於資金邊際成本的較低利差。但最好的猜測是，這是我們本週期的最大利潤率，可能會下降，我不知道，也許本季度 5 個基點是最好的猜測。但我確實認為資產負債表的增長將抵消這一影響，因此我們的淨利息收入實際上比本季度有所上升。

And if you look back over the last year, our net interest income has been up about $1 million every quarter. So over the last 4, we've gone literally $31 million, $32 million, $33 million, $34 million. We probably won't be up $1 million this next quarter, but I do think the growth will offset any decline in margin.

如果你回顧去年，我們的淨利息收入每個季度增長了約 100 萬美元。所以在過去 4 年裡，我們實際上花費了 3100 萬美元、3200 萬美元、3300 萬美元、3400 萬美元。下個季度我們可能不會增加 100 萬美元，但我確實認為增長將抵消利潤率的下降。

I appreciate it. It's very helpful.

我很感激。這非常有幫助。

Our next question comes from the line of Bernard Von Gizycki with Deutsche Bank.

我們的下一個問題來自德意志銀行的 Bernard Von Gizycki。

You have a nice sequential increase in fees driven by pickup and derivative fees. Can you just talk to the activity you're seeing and any expectations in the second half of the year?

在提貨費和衍生品費用的推動下，費用連續增加。您能否簡單談談您所看到的活動以及對下半年的期望？

Yes. So those fees Bernie are totally separate from the balance sheet swap that we did. These are customer derivatives and you wouldn't think at this point in the cycle that, that would have as much appeal to customers, but there are still some that worry about rates going up, and those can be very profitable transactions when we do them.

是的。因此，伯尼的這些費用與我們所做的資產負債表互換完全分開。這些是客戶衍生品，你不會認為在周期的這個階段，這對客戶有那麼大的吸引力，但仍然有一些人擔心利率上升，當我們這樣做時，這些交易可能會非常有利可圖。

I wouldn't necessarily expect any going forward just because we are likely close to the highs in rates, but we do have the occasional customer that decides they want (inaudible). We're happy to help them where we can.

我不一定會期望任何進展，只是因為我們可能接近利率高點，但我們確實有偶爾決定他們想要的客戶（聽不清）。我們很樂意盡我們所能幫助他們。

Got it. That's helpful. And then maybe just separately, I think you guys had a recent press release, you noted partnering with Mayfair to provide up to $50 million enhanced FDIC insurance on cash accounts. So I believe at [3/31] you had $932 million in uninsured deposits, which was about 28% of total deposits.

知道了。這很有幫助。然後也許只是單獨地，我想你們最近發布了一份新聞稿，你們提到與 Mayfair 合作為現金賬戶提供高達 5000 萬美元的增強 FDIC 保險。因此，我相信在 [3/31]，您有 9.32 億美元的未保險存款，約佔總存款的 28%。

I'm just curious, any updates to this and comments on the service you're providing for clients are the costs mostly incurred by clients to get this enhanced insurance? Or is there some sort of sharing between the 2 of you?

我只是好奇，對此的任何更新以及對您為客戶提供的服務的評論是客戶獲得這種增強型保險所產生的主要費用嗎？或者你們兩個之間有某種分享嗎？

Yes. So first of all, I mean, we're very pleased with some of the partnering that we're doing on the technology side. We're going to provide some services that very few banks can do. So we've got some great customers like Mayfair and some others that are joining us and Mayfair is a great example of being able to provide a partnership, where they provide certain services for the market, and we're able to buy the technology behind that. We expect that relationship to continue to grow and prosper over even through the next couple of quarters to grow pretty dramatically. .

是的。首先，我的意思是，我們對我們在技術方面所做的一些合作感到非常滿意。我們將提供一些很少有銀行可以提供的服務。因此，我們有一些像 Mayfair 這樣的優秀客戶和其他一些客戶加入我們，而 Mayfair 是能夠提供合作夥伴關係的一個很好的例子，他們為市場提供某些服務，而我們能夠購買背後的技術那。我們預計這種關係將繼續發展和繁榮，甚至在接下來的幾個季度中將大幅增長。 。

As far as being able to offer the insurance, we have a couple of different products that are unique in order to offer FDIC insurance through some large accounts and continue to develop that, and that's been a very popular product for us in the last few months from there. John?

就能夠提供保險而言，我們有幾種不同的產品，這些產品是獨一無二的，以便通過一些大型賬戶提供 FDIC 保險，並繼續開發它，這是過去幾個月我們非常受歡迎的產品從那裡。約翰？

Yes. Bernie, last quarter, I think we mentioned (inaudible) as one of our new customers, as they had sent out a release similar to this one. So we now have 2 customers that have sent out releases about partnering with Third Coast.

是的。伯尼，上個季度，我想我們提到（聽不清）是我們的新客戶之一，因為他們發布了與此類似的版本。現在，我們有 2 個客戶已發布有關與 Third Coast 合作的新聞稿。

So for both of those, we are their depository institution, we help with all things, deposits. There's not a lot of card services, virtually none. There's no lending. I mean these are deposit relationships. And the kind of thing that we've been talking about over the last year, partnering with some of these Fintech companies that are still somewhat cash rich, and we're optimistic that these relationships and others can make a significant difference to our deposits over the long term.

因此，對於這兩者來說，我們是他們的存款機構，我們為所有事情提供幫助，包括存款。信用卡服務並不多，幾乎沒有。沒有貸款。我的意思是這些是存款關係。去年我們一直在談論的事情，與一些現金仍然充裕的金融科技公司合作，我們樂觀地認為這些關係和其他關係可以對我們的存款產生重大影響長期來看。

Our next question comes from the line of Jordan Ghent with Stephens Inc.

我們的下一個問題來自喬丹根特與斯蒂芬斯公司的線路。

I just wanted to ask a few questions on credit. First, if you could give us your CRE/office exposure. If you could just give us an update, that would be great. And then also, I don't know if I saw it mentioned, but any credit migration from classified and special mention during the quarter?

我只是想問一些關於信用的問題。首先，您是否可以向我們提供您的 CRE/辦公室經歷。如果您能給我們提供最新信息，那就太好了。另外，我不知道我是否看到它被提及，但是本季度是否有來自分類和特別提及的信用遷移？

Sure. Our office exposure nonowner occupied is 2% of total loans. Dollar amount, it's about the same as it was last quarter. Owner occupied is another 2.3% of total loans. And then we have about 1.5% of total loans in medical office.

當然。我們的非業主佔用辦公室風險佔貸款總額的 2%。美元金額與上季度大致相同。業主自住佔貸款總額的另外2.3%。然後我們大約有總貸款的 1.5% 用於醫療辦公室。

We don't have any -- all of our office, both owner occupied and on nonowner occupied are in Texas with the exception of $1.2 million loan. And we don't have any -- we have one loan in office that's $1.1 million that's classified. But the office is really -- we haven't been doing new office, but it's been holding up well for us, and it's in good markets.

我們沒有任何辦公室——除了 120 萬美元的貸款外，我們所有的辦公室，無論是業主佔用的還是非業主佔用的，都在德克薩斯州。我們沒有任何貸款——我們有一筆 110 萬美元的機密貸款。但辦公室確實——我們還沒有建造新辦公室，但它對我們來說一直表現良好，而且市場狀況良好。

Yes. We're really pleased that we are in the right position for this change in the marketplace. We have very little exposure and most of ours is smaller office sight. So we don't have any large office nor any participations in large office deals, so particularly our nonowner-occupied office is just a miniscule part of our portfolio.

是的。我們非常高興我們處於適應市場變化的正確位置。我們的曝光量很少，而且大部分都是較小的辦公室視線。因此，我們沒有任何大型辦公室，也沒有參與大型辦公室交易，所以特別是我們的非業主佔用的辦公室只是我們投資組合的一小部分。

The average loan balance is $1.2 million, and the average LTV on the nonowner occupied is about 53%.

平均貸款餘額為 120 萬美元，非業主的平均 LTV 約為 53%。

And then with regard to special assets, again, we've been relatively stable. And truthfully, what we're seeing in the market is our portfolio is handling very well the market right now. We're pretty -- see it's been very stable, and we're pretty pleased with the market conditions, how well our portfolio has performed.

然後，在特殊資產方面，我們還是相對穩定的。說實話，我們在市場上看到的是我們的投資組合目前對市場的處理非常好。我們很高興看到它一直非常穩定，我們對市場狀況以及我們的投資組合的表現非常滿意。

Okay. Perfect. And then maybe just one follow-up on that swap. Where is that -- what line item is that flowing through?

好的。完美的。然後也許只是這次交換的一個後續行動。它在哪裡——流經哪個行項目？

So if you're looking at the income statement on the press release, it's going to be interest expense on deposit accounts. The credit to interest expense, and it's running just a tad under $100,000 a month, and will be that for the next 5 years, roughly 5 years.

因此，如果您查看新聞稿中的損益表，它將是存款賬戶的利息支出。扣除利息支出後，每月的支出略低於 10 萬美元，並且在未來 5 年（大約 5 年）內都是如此。

And Is that straight lined?

那是直線嗎？

Yes, it is.

是的。

Our next question comes from the line of Michael Rose with Raymond James.

我們的下一個問題來自邁克爾·羅斯和雷蒙德·詹姆斯的對話。

Just wanted to start on the expense outlook. I think you said flattish. You guys highlighted in the press release, you guys have added some people over the past couple of quarters. Are you trying to signal that hiring is going to slow from here? Or are there other initiatives in place that are going to be offsets to kind of ongoing opportunistic hiring? And if so, what are those initiatives that are going to keep the run rate kind of flattish here?

只是想從費用前景開始。我覺得你說的是扁平化。你們在新聞稿中強調，你們在過去幾個季度增加了一些人。您是否想暗示招聘將從現在開始放緩？或者是否有其他舉措可以抵消持續的機會主義招聘？如果是這樣，那麼哪些舉措可以使運行率保持平穩？

Yes, Michael, certainly, expenses were a little higher this quarter than we were expecting. But if I think about expenses over a longer period of time rather than just one quarter, so if I go back a full year, our expenses are only up 4.6%. We had several quarters that they were actually down. And this was just a little bit of a catch-up.

是的，邁克爾，當然，本季度的費用比我們預期的要高一些。但如果我考慮更長一段時間內的支出，而不僅僅是一個季度的支出，那麼如果我回顧一整年，我們的支出僅增長了 4.6%。我們有幾個季度的業績實際上有所下降。這只是一點點的追趕。

I mean, it's hard to have an exact science with this stuff. But I mean, we've certainly hired people this year. We've hired people in compliance and operations. Loans were up 20% over the last year and expenses are up less than 5%. So we think we've done a pretty good job managing that, but there -- we have opened a couple of new branches this year, and we have hired people, particularly on the compliance side.

我的意思是，很難對這些東西進行精確的科學分析。但我的意思是，我們今年確實僱用了人員。我們聘請了合規和運營人員。貸款比去年增加了 20%，支出增幅不到 5%。因此，我們認為我們在管理方面做得非常好，但是今年我們開設了幾個新的分支機構，並且我們僱用了人員，特別是合規方面的人員。

So it's going to be $24 million plus is kind of our best estimate of where expenses are going to be, but the storyline is still the same. We think we can grow net interest income faster than we're growing expenses. Certainly that was true over the last year where net interest income was up 23%, and noninterest expense was up less than 5%. That's certainly our goal in that sort of relationship.

因此，這將是 2400 萬美元，這是我們對支出的最佳估計，但故事情節仍然是一樣的。我們認為淨利息收入的增長速度可以快於支出的增長速度。當然，去年的情況確實如此，淨利息收入增長了 23%，非利息支出增長了不到 5%。這當然是我們在這種關係中的目標。

And we certainly are internally watching every line of business in every area for expenses. And again, making a decision like exiting the line of business from auto finance is one of the ways in which we've made hard decisions to make sure that we're on the right path to hit those numbers and returns that we expect. So this team isn't afraid to make our decisions and to make sure we scour our P&L to make sure we find ways to remain competitive. And we certainly are going to continue to do that.

我們當然會在內部監視每個領域每個業務線的支出。再說一次，做出退出汽車金融業務等決定是我們做出艱難決定的方式之一，以確保我們走在正確的道路上，達到我們預期的數字和回報。因此，這個團隊不害怕做出決定，並確保我們仔細檢查損益表，以確保我們找到保持競爭力的方法。我們當然會繼續這樣做。

Yes. John or Bart, that actually leads the auto finance was actually my next question. Can you just talk about the process that you guys went through to kind of evaluate the risk rewarded, you're not the first one to scale back or get out of that business. So certainly understand the decision-making process, but just wanted to see what yours was?

是的。約翰還是巴特，這實際上引領了汽車金融實際上是我的下一個問題。您能否談談你們評估風險回報的過程，您不是第一個縮減或退出該業務的人。所以當然了解決策過程，但只是想看看你的決策過程是什麼？

And then is there any other areas or divisions that you or maybe either looking at reducing or getting out of or conversely allocating more resources to?

那麼您是否正在考慮減少或退出或相反地分配更多資源的任何其他領域或部門？

Yes. So we kind of look at a holistic view point for return on equity. What's the best allocation of assets to return what we're trying to get for the shareholders? And because of that, we constantly internally are reporting or monitoring every line of business down to stack ranking performers on it. So I think we have some really good internal accounting that we're watching everything.

是的。因此，我們從整體角度來看待股本回報率。為了回報我們想要為股東帶來的回報，最好的資產配置是什麼？正因為如此，我們不斷地在內部報告或監控每條業務線，以對其中的表現者進行排名。所以我認為我們有一些非常好的內部會計，我們正在監視一切。

And as rates have gone up, obviously, that's put different perspectives on different lines of business for us. And so as we've grown it would just become more obvious that there are ways to allocate our balance sheet to enhance shareholder equity. And so it really came down to a numbers game, whenever you look at it, that there's an obvious way for us to reallocate our assets for higher earning loans.

顯然，隨著利率的上升，我們對不同的業務領域產生了不同的看法。因此，隨著我們的成長，越來越明顯的是，有辦法分配我們的資產負債表以提高股東權益。所以這實際上歸結為一個數字遊戲，無論何時你看它，我們都有一個明顯的方法來重新分配我們的資產以獲得更高收益的貸款。

Everything we look at, I think we have a great management team and even the leaders of all the lines of businesses are always looking for ways to enhance performance. So right now, I think that was sort of the obvious internal answer. Everything else that we're working on is just sharpening our pencils to kind of refine the other businesses. But we're pretty pleased with whether the other line of businesses are growing.

從我們所看到的一切來看，我認為我們擁有一支出色的管理團隊，甚至所有業務線的領導者都在不斷尋找提高績效的方法。所以現在，我認為這是顯而易見的內部答案。我們正在做的其他事情只是削尖鉛筆以完善其他業務。但我們對其他業務是否正在增長感到非常滿意。

Yes. And Michael, along those same lines, as we were looking at the balance sheet over the last quarter and where we can be most efficient, we were looking at investment securities, and there were a lot of distressed sellers of bank sub debt over the last quarter. So we did buy roughly $20 million in bank sub debt, much of -- so the average for the quarter was not where we ended the quarter.

是的。 And Michael, along those same lines, as we were looking at the balance sheet over the last quarter and where we can be most efficient, we were looking at investment securities, and there were a lot of distressed sellers of bank sub debt over the last四分之一.因此，我們確實購買了大約 2000 萬美元的銀行次級債務，其中很大一部分——所以本季度的平均值並不是我們季度末的水平。

We are worried about $90 million now. I think we averaged about $77 million for the quarter. But the new stuff that we were buying had yields above 10%, and these were big, well-known banks, they should be money good and it just seemed like a good opportunity, where it was mostly small pieces, but just to stress sellers trying to get out of that.

我們現在擔心的是 9000 萬美元。我認為本季度我們的平均收入約為 7700 萬美元。但我們購買的新東西的收益率超過10%，而且這些都是大型知名銀行，它們應該很賺錢，這似乎是一個很好的機會，其中大部分是小塊，但只是為了給賣家帶來壓力試圖擺脫這種情況。

Makes sense. And then just -- I think just finally for me, just putting everything together, so you have positive NII growth from balance sheet, relatively flattish expenses, some momentum on the fee side. It seems like you guys could actually be one of the few banks that could actually generate some positive operating leverage next year. Is that the kind of the goal here? And is that your kind of expectation at this point?

說得通。然後，我認為最終對我來說，將所有內容放在一起，這樣你就可以從資產負債表中獲得正的NII增長，相對平穩的支出，以及費用方面的一些動力。看來你們實際上可能是明年能夠真正產生一些積極的運營槓桿的少數銀行之一。這就是這裡的目標嗎？這是您目前的期望嗎？

Definitely. We believe so. I mean you probably said it fairer than I could. I just think we're putting ourselves in a position to be nimble and have the right balance sheet structure and efficiency to be able to improve on our operating leverage.

確實。我們相信是這樣。我的意思是你可能說得比我更公平。我只是認為我們正在使自己處於一個靈活的位置，並擁有正確的資產負債表結構和效率，以便能夠提高我們的運營槓桿。

And I think you'll see a lot more of that happen over the next few quarters. It's not overnight, but it's definitely certainly throughout the rest of this year and into next year, you'll see a lot of the benefits [to term] planning that we've been working on for a couple of years now.

我認為在接下來的幾個季度裡你會看到更多這樣的事情發生。這不是一朝一夕的事，但肯定會在今年餘下的時間和明年，你會看到我們幾年來一直在努力的[長期]規劃的很多好處。

Yes, especially if we can continue growing deposits the way we have in the last couple of quarters, it certainly hasn't gotten any easier. I know some of our peers listening to their calls, they maybe had a little more confidence than I do. But the deposit market is tough out there right now.

是的，特別是如果我們能夠像過去幾個季度那樣繼續增加存款，那麼事情肯定不會變得更容易。我知道我們的一些同行在聽他們的電話時，他們可能比我更有信心。但目前存款市場形勢嚴峻。

Ours has been up. We've done great the last couple of quarters. And if that -- if we stay the course there, I think we have a lot of opportunities. Even demand, we saw at month end our demand deposits were up, where most people were down and a lot of that actually came out of our specialty finance group of all places, our builder finance group that -- they called hard on their customers and they had a lot of cash and they really had a great quarter there.

我們的已經起來了。過去幾個季度我們做得很好。如果那樣的話——如果我們堅持到底，我認為我們有很多機會。即使是需求，我們在月底也看到我們的活期存款增加了，而大多數人的存款都在下降，其中很多實際上來自我們各地的專業金融團隊，我們的建築商金融團隊——他們對客戶進行了嚴厲的呼籲，他們有很多現金，而且他們確實度過了一個很棒的季度。

Our next question comes from the line of (inaudible) with KBW.

我們的下一個問題來自（聽不清）KBW。

You all focused on the 1% ROA target for a while now and hit it in the first quarter, a little down this quarter, which is no surprise with all the expenses. Can you kind of frame your commitment in regards to that 1% as you divest that auto finance division and kind of work on -- kind of making the balance sheet more efficient?

你們都關注 1% ROA 目標有一段時間了，並在第一季度實現了這一目標，本季度略有下降，考慮到所有費用，這並不奇怪。當你剝離汽車金融部門並致力於提高資產負債表效率時，你能否就這 1% 做出承諾？

Yes. So about a year ago, we were projecting that we would get to a 1% ROA by the third quarter of this year. So we did it much sooner than we expected. So we consider ourselves ahead of schedule. If you look at the year-to-date numbers, we're at 99 basis points year-to-date. So again, quite a bit ahead. And 1% isn't our goal. I mean to be high performing is our goal. And if that means 1.25% or 1.35% or whatever the number is. We're certainly not satisfied with 1% being anything other than just a bare minimum.

是的。大約一年前，我們預計到今年第三季度我們的 ROA 將達到 1%。所以我們比我們預期的要早得多。所以我們認為自己提前了。如果你看看今年迄今的數字，我們今年迄今的利率為 99 個基點。再說一次，領先了很多。 1% 並不是我們的目標。我的意思是表現出色是我們的目標。如果這意味著 1.25% 或 1.35% 或任何數字。我們當然不滿足於 1% 僅僅是最低限度。

This concludes our question-and-answer session. I'll turn the floor back to Mr. Caraway for any final comments.

我們的問答環節到此結束。我將把發言權交還給卡拉韋先生，徵求最後的意見。

Thank you, Melissa. I want to thank everybody that called in and participated. We appreciate you, and thank you for your support of Third Coast Bancshares. We look forward to seeing you next quarter. Thank you all.

謝謝你，梅麗莎。我要感謝所有致電並參與的人。我們感謝您，也感謝您對 Third Coast Bancshares 的支持。我們期待下個季度見到您。謝謝你們。

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

謝謝。今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。