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DATE

Thursday, April 23, 2026 at 11 a.m. ET

CALL PARTICIPANTS

  • Founder, Chairman, President, and Chief Executive Officer — Bart O. Caraway
  • Chief Financial Officer — R. John McWhorter
  • Chief Credit Officer — Audrey A. Duncan
  • SVP, Investor Relations — Natalie S. Hairston

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TAKEAWAYS

  • Keystone Acquisition Impact -- Assets rose 23.2%, loans increased 19.5%, and deposits grew 23.5% from year-end, attributable to the Keystone Bank acquisition.
  • Nonrecurring Expenses -- Recorded $3.3 million in merger-related noninterest expense (including $1.6 million legal/professional, $1.3 million salary/benefits, $0.4 million miscellaneous), plus $644,000 in sign-on bonuses for new hires.
  • EPS -- Diluted earnings per share was $0.88; excluding merger expenses, EPS would have been $1.02.
  • Return on Average Assets -- Excluding merger expenses, return on average assets would have been 1.25%.
  • Net Interest Income -- Net interest income of $53.6 million represented a 2.7% increase from the prior quarter, driven by higher average earning assets after the Keystone merger and offset by a lower net interest margin.
  • Net Interest Margin (NIM) -- CFO McWhorter said, "I think we are about 3.75% for the margin going forward," with merger and interest reversal being key drivers of the decline from previous levels.
  • Loan Growth Outlook -- CEO Caraway said new hires and market disruption have led to "really robust pipeline," with anticipated quarterly loan growth raised to a range of $75 million to $125 million in upcoming periods.
  • April Loan Activity -- Monthly loan growth in April already exceeds $100 million, suggesting momentum is accelerating early in the second quarter.
  • Tangible Book Value -- Tangible book value at quarter-end was $31.97, exceeding the prior guidance of $31.69 provided at acquisition announcement.
  • Asset Quality Metrics -- Nonperforming assets to total assets increased by 11 basis points, primarily due to one $17.1 million CRE loan placed on nonaccrual and $1.8 million in acquired nonaccrual loans.
  • Allowance for Credit Losses -- Allowance was $51.5 million (0.98% of gross loans) versus $43.9 million (1.0%) in the prior quarter, reflecting the Keystone day-one allowance impact.
  • Loan Portfolio Composition -- Portfolios comprised 42% commercial and industrial, 17% construction/development/land, 18% nonowner-occupied CRE, 11% owner-occupied CRE.
  • Expense Savings Timing -- Majority of expense savings from the merger, including data processing and professional fees, will be realized in the third and fourth quarters of this year.
  • Fee Income Guidance -- CFO McWhorter said, "We guided to $4 million for the quarter, and that is almost exactly where we were. I think it will be a little bit higher going forward, but, again, we are not a huge fee income shop, so it is not going to be materially different. I think it is going to be between that $4 million and $4.5 million range." going forward.

SUMMARY

The quarter was defined by the Keystone acquisition, which materially expanded the balance sheet, added to nonrecurring expenses, and influenced both income and margin dynamics. The company disclosed sizable, one-time costs tied to integration and new talent, with management indicating these are not expected to repeat in the near term. The addition of productive bankers and investment in asset-based lending and correspondent banking are expected to broaden revenue sources and drive future organic growth momentum. Early second-quarter trends show significant loan origination velocity exceeding initial targets. Tangible book value finished above previous merger guidance, and second half cost savings have not yet been realized, with implementation expected to begin after the July core conversion.

  • April's early surge in funded loans has already redeployed previously idle Keystone cash balances, which management stated will benefit net interest margin in subsequent periods.
  • Of total nonaccrual loans, $5.3 million are fully guaranteed by the SBA, potentially mitigating loss exposure.
  • The $17.1 million nonaccrual CRE loan was foreclosed in April, with plans to list the property and address occupancy shortfalls to support resolution within the next two quarters.
  • Cost saving targets from the merger are primarily concentrated in professional and technology expenses, but will not be fully achieved until January 2027, according to management commentary.
  • CFO McWhorter indicated that another loan securitization remains possible in the second quarter, which could temporarily enhance fee income and net interest margin if executed.

INDUSTRY GLOSSARY

  • CRE: Commercial Real Estate loans, representing lending secured by commercial property and often subject to unique risk and performance metrics for regional banks.
  • Nonaccrual Loans: Loans on which the bank has stopped accruing interest income due to doubts about full collectability, signaling elevated credit risk.
  • Allowance for Credit Losses: Balance sheet reserve set aside to cover losses on loans not expected to be collected, reflecting current expected credit impairment.
  • Core Conversion: Migration of a newly acquired bank's data and systems onto the acquiring bank’s principal banking platform, a milestone for realizing integration synergies.
  • Asset-Based Lending (ABL): A lending approach where loan advances are secured by company assets, used as both a credit enhancement and fee generation strategy.
  • SBA: Refers to U.S. Small Business Administration; guarantees certain qualifying loans, reducing the lender's credit risk.

Full Conference Call Transcript

Natalie S. Hairston: Thank you, operator, and good morning, everyone. We appreciate you joining us for Third Coast Bancshares, Inc. conference call and webcast to review our first quarter 2026 results. With me today is Bart O. Caraway, Founder, Chairman, President and Chief Executive Officer; R. John McWhorter, Chief Financial Officer; and Audrey A. Duncan, Chief Credit [inaudible]. 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.thirdcoast.bank. There will also be a telephonic replay available until April 30, 2026, and more information on how to access these replay features was included in yesterday's earnings release.

Please note that the information reported on this call speaks only as of today, 04/23/2026, and therefore, you are advised that time-sensitive information may no longer be accurate as of the time of any replay listening or transcript reading. 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. The listener or reader is encouraged to read the annual report on Form 10-Ks to better understand those risks, uncertainties, and contingencies.

The comments made today will also include certain non-GAAP financial measures. Additional details and reconciliations to the directly comparable GAAP financial measures included in yesterday's earnings release can be found on the Third Coast Bancshares, Inc. website. Now I would like to turn the call over to Third Coast Bancshares, Inc. founder, chairman, president, and CEO, Mr. Bart O. Caraway. Bart?

Bart O. Caraway: Good morning, everyone, and thank you, Natalie. Welcome to the TCBX First Quarter 2026 Earnings Call. I will begin by discussing the company's progress in the quarter. John will cover the financial performance in more detail. Then Audrey will provide a credit quality update. Then I will close with a few thoughts on management's outlook. As we look at our first quarter, let us start with the broader context. This quarter marked a significant milestone for Third Coast Bancshares, Inc., highlighted by a successful addition of Keystone Bank shares to our platform.

The Keystone merger and acquisition had a substantial impact on our results this quarter, driving solid growth in loans and deposits, expanding our customer base, and strengthening our presence in key markets in Central Texas, which translated into an expanded balance sheet. Specifically, assets increased by 23.2%, loans by 19.5%, and deposits by 23.5% from year-end. Equally important is the strength of our underlying business. Our loan pipelines are robust, customer activity is healthy, and the strategic investments we continue to make in our platform are already gaining traction. This includes enhancements to our leadership team and the purposeful build-out of several key divisions.

Within our corporate banking group, we have added seasoned, best-in-class relationship bankers in Houston and Dallas, including experienced teams focused on select dedicated verticals. We also launched our asset-based lending platform, adding to our credit product suite. We believe these will be an important contributor to our loan growth and fee income. In addition, we have expanded our public funds and correspondent banking teams, further diversifying our funding base and expanding our reach across Texas and beyond. While many of these teams are still early in the ramp-up, we believe these combined investments position us to drive organic growth at meaningful levels, reinforcing our long-term goals of scalability, disciplined growth, and sustainable profitability.

Overall, we believe the first quarter demonstrates headway in building a stronger franchise while staying true to our fundamentals that have consistently driven our success and performance. With that, I will turn the call over to John to walk through the financial results and provide additional details on the quarter. John?

R. John McWhorter: Thank you, Bart, and good morning, everyone. As Bart mentioned, the Keystone transaction is the primary factor influencing the quarter-over-quarter changes in our financial results. Keystone added roughly 20% to our loans and deposits and roughly $3.3 million in merger-related nonrecurring noninterest expense. I will focus my comments on providing clarity around those impacts along with our underlying trends. Starting with expenses, our noninterest expenses were higher during the quarter, largely due to Keystone-related items as well as sign-on bonuses for several recent senior-level hires. During 2026, the company recorded $3.3 million in Keystone merger-related noninterest expenses, primarily consisting of $1.6 million in legal and professional, $1.3 million of salary and benefits, and $400 thousand miscellaneous.

Additionally, the company recorded $644 thousand in salary and benefits attributable to sign-on bonuses during the first quarter. This is the second consecutive quarter of above-average hiring. These expenses are nonrecurring and reflect the near-term cost of integrating Keystone and onboarding new talent. Diluted earnings per share for the quarter was $0.88, but excluding merger expenses would have been $1.02. Also excluding merger expenses, return on average assets would have been 1.25%. Net interest income was $53.6 million for the first quarter, marking a 2.7% increase from the previous quarter, driven by higher average earning assets following the merger and offset by a lower net interest margin.

The margin decline resulted primarily from the merger but also from the reversal of $996 thousand in accrued interest from two loans placed on nonaccrual. Turning to loan growth, excluding Keystone, loans were up approximately $45 million for the quarter, while quarterly average balances were up over $100 million. The second quarter has started even stronger with April month-to-date loans already up over $100 million. Pipelines are full, and some of our new lenders are just getting started. Lastly, I might mention that tangible book value ended the quarter at $31.97, which compares favorably to $31.69, which was the guidance that we gave in October when we announced the acquisition.

Most of our expense savings will be realized in the third and fourth quarters of this year. With that, I will turn the call over to Audrey to discuss asset quality.

Audrey A. Duncan: Thank you, John, and good morning, everyone. I would like to provide a summary of asset quality for the first quarter. Nonperforming assets to total assets increased by 11 basis points from the prior quarter. The increase in nonperforming assets was primarily due to one CRE loan of approximately $17.1 million being placed on nonaccrual as well as the addition of $1.8 million in purchased credit impaired loans from the Keystone acquisition, which are on nonaccrual. This increase was partially offset by a $5 million decline in loans over 90 days past due and still accruing.

When placing the $17.1 million loan on nonaccrual, as well as a $602 thousand loan, we reversed $996 thousand in accrued interest, which impacted our margin. On April 7, 2026, the bank foreclosed on the property securing the $17.1 million CRE loan. Our LTV on the property based upon a 2020 appraisal is just under 70%. It is also worth noting that $5.3 million of our nonaccrual loans are fully guaranteed by the SBA. The allowance for credit losses totaled $51.5 million, representing 0.98% of gross loans as of 03/31/2026, compared to $43.9 million, or 1%, as of the previous quarter-end. The increase was primarily due to the day-one allowance related to the Keystone acquisition.

We recorded net recoveries of $4 thousand in the first quarter. Our loan portfolio remains well diversified and reflects organic production as well as contributions from the Keystone portfolio, with allocations consistent with the prior year. Commercial and industrial loans are 42% of total loans, while construction, development, and land loans were 17%. Owner-occupied CRE was 11%, and nonowner-occupied CRE was 18%. I would be happy to answer any questions regarding asset quality during our question-and-answer session. With that, I will turn the call back to Bart. Bart?

Bart O. Caraway: Thank you, Audrey. As we move further into 2026, we are increasingly confident in the direction of the franchise and the strategic foundation we have put in place. We believe we are building one of the best platforms in the country and across our footprint. With our expanded corporate banking, including ABL, along with our public funds and correspondent banking capabilities, we are positioned to continue scaling the company in a disciplined and thoughtful way. We believe these groups, combined with our core teams, represent durable long-term growth engines that will drive organic growth, diversify our balance sheet, and deepen client relationships over time.

We believe when these teams gain scale, they will drive even stronger pipelines and profitability, with the potential to generate over $1 million in fees per month and extend our quarterly loan growth target range to $75 million to $125 million. Underpinning all of this is our continuous improvement mindset, which is now deeply embedded across the organization. What started as a 1% improvement challenge has evolved into a culture centered on execution, accountability, and delivering consistency across outcomes for our stakeholders, and we believe that continues to be a key differentiator for Third Coast Bancshares, Inc.

Ongoing consolidation across the banking sector continues to strengthen our scarcity value and positions us at the early stages of unlocking additional upside for our franchise. Finally, I want to thank our team for their exceptional work this quarter and extend a warm welcome to our Keystone customers and shareholders. We appreciate your continued support in Third Coast Bancshares, Inc. and look forward to building on this momentum. With that, I will turn the call back over to the operator to begin the question-and-answer session. Operator?

Operator: Thank you. At this time, we will be conducting our question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press 2 if you would like to remove your question from the queue. Participants using speaker equipment, it may be necessary to pick up your handset before the star keys. One moment while we poll for questions. Your first question comes from Matt Olney with Stephens. Please state your question.

Matt Olney: Hey, thanks, and good morning. I will start with net interest margin. As you guys mentioned, some noisy results this quarter with Keystone, and I heard the commentary about the nonaccrual impact of the margin as well. Any color you can give us as far as expectations for the margin in the near term? Thanks.

R. John McWhorter: Sure. So, Matt, this is John. You know, last quarter we guided to a number in kind of the 3.90% range, and I think Third Coast Bancshares, Inc. standalone before this interest reversal, that is exactly where we were. The interest reversal is worth about 4 basis points, and then, of course, we merged with Keystone. Their margin was about 3.50%. So you average all that out and, assuming nothing unusual next quarter, I think we are about 3.75% for the margin going forward.

Matt Olney: Okay. Perfect. Appreciate that, John. And then on the loan growth front, sounds like 2Q is off to a really strong start. Would love to hear more about the drivers of what you are seeing there. Any of this from the new producers hired or market disruption? Just more commentary on the pipeline would be helpful. Thanks.

Bart O. Caraway: Yeah, that is very observational of you. I think it is both what you mentioned. One, we have both some new team members and some team members that we hired last year that obviously have some good volumes. And, at the same time, we are seeing some opportunities from some of the disruption in the market. And I think the combination has really got our really robust pipeline. As a matter of fact, I think the first quarter maybe masked a little bit of how good it was because we had an exceptional number of payoffs or otherwise our loans would have been up quite a bit more.

We are still seeing the pipelines grow right now, and we feel pretty good about where we stand. The market is good. These producers that we are bringing are highly productive and have a loyal customer base. And at the same time, some of the disruption is starting to play out to where we are able to compete and win some business that we have been after for a while. So all in all, despite all the other macro headwinds, it is actually looking really good for us in terms of our growth and volumes.

R. John McWhorter: And, Matt, I might add that, with the market disruption, that is really what has given us the opportunity to hire a lot of these people that we have talked about over the last couple of quarters. We have paid sign-on bonuses to some of these again, two quarters in a row. I do not necessarily envision that happening in the second quarter of this year, but many of the people that we hired were exceptional. They were great opportunities—just ones that we could not pass up—that will very much contribute to our growth going forward. But it is not an every-quarter sort of thing.

I think I said the expenses related to that were about $650 thousand, and we likely—who knows, maybe we have other opportunities—but I do not think it will be of that magnitude. I think most of who we wanted to hire recently, we have hired in the last six months.

Bart O. Caraway: And if I could add on to that, the folks that we have hired are people that have had long-term relationships with the existing leadership here. So these are not new people that are unknown to us. They are people that we either worked with before or had long-time relationships with that we have been after for a while, and, once again, similar to what happened right after the pandemic, there is a lot of dislocation and disruption that has allowed us to finally get them over the fence.

Analyst: Yeah. Okay.

Matt Olney: Makes sense. And you guys seem to be in a nice spot to take advantage of all the disruption. I will hop back in the queue. Thank you.

Operator: Thank you. Your next question comes from Michael Rose with Raymond James. Please state your question.

Michael Rose: Hey, good morning, guys. Thanks for taking my questions. Maybe just following up on Matt's loan growth question. It looks like in the quarter, if I exclude Keystone, you were kind of below that $75 million to $100 million range that you had talked about previously. Was there any sort of elevated paydowns or anything that may have impacted the organic growth? Or maybe if you can just parse out what it is. And then I think, Bart, I heard you say, given some of the hires that you made over the past couple of quarters, that maybe that range on a go-forward basis is $75 million to $125 million, so a nice kind of uptick there.

I assume that there is some time that it will take for some of the newer hires to get ramped up. So should we expect an acceleration to kind of the mid to higher point of that range in the back half of the year? Just trying to frame out the loan growth outlook.

Bart O. Caraway: Yeah, good comments. In the quarter, we actually had such strong loan growth that we thought we were going to be above budget on it. But then we had some significant paydowns that came through, and the timing of it, we thought, was going to be spread out over a few quarters, and it just happened to be kind of all in one quarter. They were significant enough that they offset a lot of that growth. So I do not expect that to continue. Those headwinds probably came first quarter.

We will maybe have a few—you know, we always have a few—surprise paydowns as somebody sells or what have you, but I think the pipeline has grown such that even if we mirror what we did last quarter, we are going to have pretty strong net loan growth. That is why, you know, John and I and Audrey feel like this year is going to turn out to be a little better than what we even anticipated on the loan growth. Having said that, obviously, it is always lumpy. We cannot control the timing of when these loans close, but, prospectively, it looks like it is going to be a very strong loan year for us.

Michael Rose: Very helpful. And then just as it relates to the $17.1 million credit that was added to nonaccrual. Is that a credit that you had previously talked about? I just do not remember or recall. And then it seems like you have an appraisal on the property. What is kind of the expectation here for resolution? Is it a couple of quarters? I know it is hard to parse out individual credits, but just given the magnitude of size here, just trying to better understand when it could eventually come out of the run rate.

Audrey A. Duncan: Sure. I can give you some more color on that. I do not think we have talked about the loan previously, but it is a seasoned loan. We originated it in 2021, so it has been on the books and paying for many years. They had a significant decline in occupancy due to a tenant bankruptcy, so that precipitated the issue there. The LTV is just under 70% based on a new appraisal within the last 90 days, and that is the as-is value on the current occupancy. We are getting ready to list it with a national broker, and we are working on some additional leases to increase the occupancy.

But, yes, I would think it is probably going to be a couple of quarters.

Michael Rose: Okay. Perfect. I appreciate that, Audrey. Maybe if I could just slip in one more. It looks like on the deposit side, the growth on an organic basis was actually pretty strong. Obviously, some of the mix change was due to the acquisition. But just as we kind of think about deposit growth as we move forward, I think, Bart, you previously talked about it kind of somewhat matching loan growth. Is that still the expectation there?

R. John McWhorter: Yeah. So, Michael, one thing I wanted to point out there: we had a lot more cash at quarter-end, and the reason for that is we sold the Keystone portfolio—100% of it—thinking that we were going to fund up a bunch of loans and replace it before quarter-end. That did not happen because we had those big loan payoffs. Their investment portfolio was roughly $75 million. In April, our loans were up more than $100 million, so that is going to be a big help to the margin.

And the fact that the loan-to-deposit ratio was lower for the quarter—well, we do try to fund, to the extent that we can, just-in-time funding, and we really thought we were going to have more loan fundings. We were not expecting the payoffs. They almost all came out of one lender's portfolio who is no longer with the bank, and we were not sad to see those loans pay off. Going forward, I would expect the loan-to-deposit ratio to creep up a little bit more, and we have already reallocated that cash into loans, so that should help the margin as well.

Michael Rose: Okay. Yeah. That helps explain it. I appreciate the color and context. I will step back.

Operator: Your next question comes from Wood Neblett Lay with KBW. Please state your question.

Wood Neblett Lay: Hey. Thanks for taking my question. Had a couple follow-ups on credit. I was just curious, are there any trends to note in criticized or classified loans this quarter?

Audrey A. Duncan: Well, obviously, the $17.1 million—that was an increase in classifieds for the quarter. We had a couple of CRE loans that were downgraded during the quarter, but they are both current now. We have low LTVs on current appraisals. Those LTVs are closer to 50% to 60%, and we are not expecting any issues there. Those are actually moving in the right direction.

R. John McWhorter: And if you take out the $17 million, it really is pretty moderate.

Wood Neblett Lay: Yeah. If you take out the $17 million, what does that look like?

Audrey A. Duncan: If you exclude the $17 million, in fact, classifieds were up about $15 million. So we actually had some net reduction there if you excluded that $17 million. Our NPAs actually would have declined 15 basis points had it not been for the $17 million loan.

Bart O. Caraway: I would comment that I still feel the portfolio looks really good. We are not seeing any macro trends or any micro trends on it. I think the story was the one property we took back. Other than that, we are seeing a really strong economic environment for us. We are seeing our customers very stable and navigating through all the chaos and disruption that is out there. Portfolio looks pretty good, I think.

Audrey A. Duncan: I agree.

Wood Neblett Lay: That is great to hear. And maybe just last for me was an update on how the integration of Keystone is going—when core conversion is scheduled—and do you still feel good about all the assumptions that were laid out at deal announcement?

Bart O. Caraway: Yeah. I mean, I think it is actually going better than expected. It is a good cultural fit. We love the market. Thus far, the team has really rallied and worked well together. I would say the conversion is going to be in July, and thus far it has been going very, very well. If you remember, we did do a core conversion last summer, and so I guess everybody is already acclimated to change. We are very familiar with our system, so converting a bank onto our system versus doing a whole-bank conversion is a whole lot easier. By the way, we have a project management team that rides herd on this.

It is very organized, and we feel like everybody has the up-to-date training to be able to make this pretty seamless.

R. John McWhorter: And, Woody, as far as the assumptions and the cost saves, we are running two different banks today on two different systems, so obviously that is more expensive. We will not realize any of the cost saves from data processing until August will be the first month of savings there. Keystone needed a full-blown financial statement audit, so we did not have any savings there. Going forward, we do expect more. We obviously do not need auditors out there anymore. We will not have examiners, obviously. The data processing will happen in the third quarter. So most of the expense saves are still to come.

I think we had forecast $6 million in savings, and a lot of it is those couple of categories: the professional fees and the data processing fees and things like that.

Wood Neblett Lay: Got it. Alright. I appreciate you all taking my questions.

R. John McWhorter: Thank you.

Operator: Your next question comes from Bernard Von Gizycki with Deutsche Bank. Please state your question.

Bernard Von Gizycki: Hey, guys. Good morning. Maybe just on expenses from here, how do we think about a quarterly run rate for the rest of the year, or how to think about it from here until the end of the year? Just given some of the lumpy M&A-related costs, which I believe are nonrecurring, that you have highlighted. Not sure if there is any spillover in other merger-related costs that you want to highlight. And then as cost saves come in, are they fully realized in 3Q and 4Q, or does that spill over into 2027? Any thoughts you can break out on expenses?

R. John McWhorter: So the last thing first, I think by January 1, 2027, we will have 100% of the cost saves. But some of them we will not have until year-end. Some things that we are accruing for—some expenses. As far as expense run rate, it is hard to put a handle on. Obviously, you could take this quarter and mind out the $3.3 million and then maybe the extra bonuses that we paid out—that is another $650 thousand. That is a good starting point.

But we are spending time and effort on conversion and merger-related stuff, so we are not quite to a point where I can give you a good run-rate number, but it is certainly this quarter minus the merger expenses and probably more than that.

Bernard Von Gizycki: Okay. Got it. And then what about fee income? With the new hires and Keystone, any things we should be thinking about going forward or how we should think about the rest of the year in fee income?

R. John McWhorter: We guided to $4 million for the quarter, and that is almost exactly where we were. I think it will be a little bit higher going forward, but, again, we are not a huge fee income shop, so it is not going to be materially different. I think it is going to be between that $4 million and $4.5 million range.

Bernard Von Gizycki: Great. Thanks for taking my questions.

R. John McWhorter: Thank you.

Operator: Your next question comes from Matt Olney with Stephens. Please state your question.

Matt Olney: Hey. Thanks for taking the follow-up. Just want to go back to the net interest margin outlook. John, I think you said that 3.75%. I was struggling to get to that number. I heard your commentary about the liquidity and the impact of that late in the quarter and so far early what you are seeing in April. Any other color that can help us get to that 3.75% number? Was there any impact of securitization or anything else that can help speak to the noise that we saw and moving from the results in the first quarter to that 3.75% in 2Q?

R. John McWhorter: Yeah. I think if you add back the reversal of interest, that is going to be worth about 4 basis points. So it is not too terribly far from the 3.75% just to start with. I think the rest of where I am thinking we get there is through better loan fees. The loan fees were a little light this quarter. It looks like they are running heavier. We did not talk about securitizations. We obviously did not do one in the first quarter, but we are always looking at it, working on them.

I cannot say for sure that we will do one in the second quarter, but I think the odds are probably more likely than not that we will be able to do another securitization this quarter. If we do, it will look similar to the last ones where there is a fair amount of fee income associated with it, and that goes into the margin. I am not considering that in the 3.75% number—that would push it even higher if we were able to do that. And when we start running a little bit higher loan-to-deposit ratio, that will certainly help.

Again, had we not had the payoffs, I think that would have made somewhat of a difference on the margin as well. As we are able to dial that in a little bit, I think that is going to help our margin over the next couple of quarters.

Matt Olney: Yeah. Definitely some noisy trends given all the moving parts, but I appreciate you walking through all the items. Thanks, guys.

R. John McWhorter: Thank you.

Operator: Your next question comes from David Joseph Storms with Stonegate.

David Joseph Storms: Morning, and thank you for taking my questions. Just wanted to maybe start with some underwriting following the merger. Has there been anything that has been learned either from Keystone's way of doing things or the Third Coast Bancshares, Inc. way of doing things, or maybe any synergies that can be picked up in underwriting?

Bart O. Caraway: I think it is all kind of in process. They had a few products a little different from ours that have been interesting and that we might be able to take and evolve. At the same time, I think being able to overlay our bigger legal lending limit and some of the things that we do, particularly on the corporate side, is going to open up some business for them on some bigger loans and bigger relationships. But it has only been a few weeks since we brought them on board, and I think that is going to play out as we get this integrated. It will be a lot easier when they are on our system as well.

David Joseph Storms: Understood. And then just thinking about the long-term NIM trends. Before, you were in the 4% range. What would it take to get the portfolio back to that again, thinking over the longer term?

R. John McWhorter: I am sorry, I did not follow the question, Dave.

David Joseph Storms: Oh, sorry. Just long-term NIM trends. I know you are talking about maybe 3.75%. But, just before the merger, you were around 4%, a little north of that. Is it possible to get back to that range? And what would that take?

R. John McWhorter: That is probably optimistic at this point because we have a relatively high cost of funds. The way we would get there would be through more loan fees, which we think is possible. That certainly would be a goal—an aspirational sort of goal number. We think as we get bigger and lead more deals, there will be more loan fees associated with it that will help the margin. But 4% is probably pretty optimistic for our way of doing business. And I think it is way up there anyway.

David Joseph Storms: Really great. Thanks for taking my questions.

Bart O. Caraway: Thank you.

Operator: Thank you. There are no further questions at this time. I will hand the floor back to Mr. Caraway for closing remarks.

Bart O. Caraway: Well, thank you, and thank you, everybody, for joining us for our earnings call—first one in 2026—and we look forward to talking to you all next quarter. Thank you for your support.

Operator: Thank you. This concludes today's call. All parties may disconnect.