Humble, Texas-based Third Coast Bancshares Inc., which completed its initial public offering Nov. 9, aims to grow quickly and pursue M&A, executives said.
Shares of the company finished their first trading day at $25.01, up 0.04% from the IPO price of $25.00 per share.
The company operates through subsidiary Third Coast Bank SSB and the unit's subsidiary, Third Coast Commercial Capital Inc. It has 12 branches in the "Texas Triangle" region bounded roughly by Austin, Dallas-Fort Worth, Houston and San Antonio.
Based on the offering price, the company stood to raise roughly $87.5 million in the 3.5 million-share offering. Chairman, President and CEO Bart Caraway said in an investor presentation, hosted on the web site RetailRoadshow, that Third Coast believes it will find M&A partners in the region.
"Although we are blessed with more than enough organic growth to fuel our future, I do believe that there is a pipeline of targets that we keep that will give us opportunities to do a transaction in the future," he added. "Just know that we'll be very judicious and selective."
Third Coast said in the presentation that it is interested in merger partners in its home region, with total assets between $200 million and $1 billion and a low-cost core deposit base.
Caraway said the Texas Triangle includes "clearly some of the best markets in the country," with population expected to grow faster than both the U.S. and the rest of Texas over the next five years.
Noting the bank's "scalable infrastructure," he added, "We believe that we can grow two to three times our size with the existing team."
Third Coast roughly doubled its size in 2020, when it closed its merger with Pearland, Texas-based Heritage Bancorp Inc. and unit Heritage Bank. Through the deal, which Caraway called a transformational acquisition, the bank holding company entered the Austin-San Antonio market and and added a Detroit, Texas location. Third Coast now has seven branches in the greater Houston market, two in the Dallas-Fort Worth market and two in the Austin-San Antonio market.
The company expected to recover the tangible book value dilution associated with the deal within three years, but completed the earnback in one year instead, Caraway said.
As of June 30, Third Coast had, on a consolidated basis, total assets of $2.01 billion, total loans of $1.55 billion and total deposits of $1.78 billion. The bank holding company's commercial loan book includes roughly 23.3% owner-occupied commercial real estate loans, 18.5% non-owner-occupied CRE loans, 18.0% conventional commercial and industrial loans and 21.4% CARES act loans, according to the presentation.
