Third Coast Bancshares, Inc.

It is now my pleasure to introduce your host, Natalie Harrison, Senior Vice President, Denard Vaskar, and Best Relations for Third Coast Bank Shares. Thank you. You may begin.

Thank you, Operator, and good morning, everyone. We appreciate you joining us for Third Coast Bank Shares conference call and webcast to review our second quarter 2023 results. With me today is Bart Carraway, Chairman, President, and Chief Executive Officer, John McWhorter, Chief Financial Officer, and Audrey Duncan, Chief Credit Officer. 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. 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. In addition, the comments made by management during this conference call may contain forward-looking statements within the meeting 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. 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. Now I would like to turn the call over to Third Coast Chairman, President, and CEO, Mr. Bart Caraway. Bart?

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. 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, non-performing assets to total assets were 25 basis points, the same as the prior quarter and down from 33 basis points in second quarter of 2022. 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. Finally, net interest margin improved three basis points from the prior quarter and five 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 ThirdCo's strong financial footing and is well positioned for the current market environment. ThirdCo's capital position remains strong, with tangible common equity to tangible assets increasing slightly to 7.88%. By prioritizing customer satisfaction and operational competence, 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. With that, I'll turn it over to John for a more detailed financial review. John? 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. 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 this same period, our net interest margin improved three basis points quarter over quarter and five basis points year over year to 382. This improvement was primarily due to increased loan yields. 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 26th, we unwound our $200 million PAY6 swap, realizing a gain of just over $5 million. This gain will be accreted over five years as an offset to interest expense. Based on this quarter's average interest-bearing deposits, the offset is equivalent to 38 basis points. Combined with our two previous unwinds, we have almost $9 million in gains, equivalent to 70 basis points. At quarter end, our uninsured deposits totaled approximately $1 billion, or 30%. Our available borrowing lines are approximately $1.7 billion, resulting in a coverage ratio of 1.7 to 1. Non-interest 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 non-interest expense. I think for the remainder of 2023, non-interest 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 53 cents in the second quarter compared to 55 cents in the first quarter, a slight decrease of 4%. This performance resulted in returns on average assets of 96 basis points and returns on average common equity of 9.44%. Additionally, our pre-tax 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.