Greetings, and welcome to the Third Coast Banc Third Quarter 2023 Earnings Conference Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Natalie Hairston. Thank you, Ms. Hairston, you may begin.

Thank you, operator, and good morning, everyone. We appreciate you joining us for the Third Coast Bancshares conference call and webcast to review our third quarter 2023 results. With me is Bart Caraway, Chairman, President and Chief Executive Officer; John McWhorter, Chief Financial Officer; and Audrey Duncan, Chief Credit Officer. 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 November 3, 2023, 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, October 26, 2023, 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-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.

Thanks, Natalie. Good morning, everyone. Thank you for joining us today. I'll begin by highlighting the company's performance for the third 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. During the third quarter, we achieved significant progress towards our strategy of conservative loan growth, disciplined expense management, and strengthening shareholder value. Total assets reached $4.22 billion during the third quarter, an increase of 6.4% over the prior quarter and a 19.9% increase over the prior year period. We booked over $226 million in high-quality loans, an increase of 6.8% sequentially and a 19.7% increase over the third quarter last year. Likewise, deposits reached $3.65 billion, a 7% increase from the linked quarter and a year-over-year increase of 22.2%. In response to market conditions, we took some deliberate actions to reduce our operating expenses and other overhead costs, including the previously announced winding down of our auto-finance group as well as a 5% reduction in workforce. As a result, our full-time employee headcount now stands at approximately 370, which is consistent with our numbers from the beginning of the year. We have been able to grow the bank by $443 million in that same timeframe. During the quarter, we also booked a $2.6 million provision for credit losses, primarily driven by strong loan growth for the quarter, which Audrey will discuss in more detail in her prepared remarks. These actions were necessary to position us for the fourth quarter and establish a solid foundation for 2024. Deposit rates remain highly competitive for this quarter, and we were able to increase our deposits by $238 million or 7% from the previous quarter, a notable achievement. Our success in deposit acquisition can be attributed to the deposit campaign contest held across multiple lines of business, including retail, private banking, treasury management, and commercial bankers. We were able to raise deposits by an impressive $275 million within a short span of 4 months. Our bankers' unwavering focus on deposits, coupled with their commitment to building strong relationships with clients, played a crucial role in achieving this feat. This approach, combined with our commitment to providing innovative solutions and exceptional service has resulted in success across all our markets. Our insured cash suite and treasury management services have proven to be innovative solutions contributing to our company's growth. As we progress, we will continue to explore new ways to deepen our relationships with existing customers and attract new ones, all while maintaining our focus on deposits and loans. Additionally, we were able to increase book value and tangible book value per share by 1.4% and 1.5%, respectively. By delivering exceptional shareholder value and increasing tangible book value per share, we have made significant progress in enhancing our balance sheet and maintaining a strong financial position in the third quarter. We believe we can continue to drive increased shareholder value and achieve sustainable success long term. With that, I'll turn the call over to John for a more detailed financial review.

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 for the quarter. As Bart mentioned, loans were up $226 million. Deposits were up slightly more at $239 million and total assets reached $4.22 billion, setting all new records for the company. Net interest margin for the quarter was down 11 basis points, slightly more than expected, due primarily to higher-than-expected loan growth. Spreads on new loans tend to average less than the bank's current net interest margin. Loan growth is expected to be less in the fourth quarter, which should result in less margin pressure. Additionally, the bank has a $100 million treasury security maturing in October, yielding 2.25%. If the proceeds were used to pay down wholesale funding, the net interest margin would improve by 2 to 3 basis points. We therefore believe that for the fourth quarter, the net interest margin will be down by less than 5 basis points. Noninterest expense was materially higher than expected due to several nonrecurring items, including severance expenses, fraud losses, and legal fees associated with those items. As previously mentioned, severance expense totaled $460,000. We reduced headcount to roughly where we started the year. And as a result, we expect fourth quarter salary and benefit expense to be less than $16 million. All other noninterest expenses were up $1.35 million in the third quarter versus the second quarter. This increase was primarily due to the fraud losses and legal fees mentioned earlier. Even though net interest margin was down 11 basis points for the quarter, net interest income was up $1.2 million to $35.3 million due to strong loan growth. We have shown consistent growth in net interest income since going public in the fourth quarter of 2021 when our net interest income was only $24.6 million. The third quarter performance also resulted in increases in both book value per share, which reached $24.57, and tangible book value per share, which reached $23.17. This is up 11% or $2.23 from $20.94 since going public in 2021. This compares very favorably to our peers who, over the same period, saw an average decrease in tangible book value of 9.3%. Also, as a reminder, we use the converted method to calculate earnings per share. For the third quarter, this resulted in antidilution, and therefore, the preferred shares were excluded from our diluted share count. We expect this to flip back in the fourth quarter. That completes the financial review. And at this point, I'll pass the call to Audrey for our credit quality review.

Thank you, John, and good morning, everyone. Third Coast’s credit performance for the third quarter was again strong. Our total nonperforming assets currently stand at $16.4 million, which is 0.39% of total assets, and our net charge-offs have stayed extremely low at $24,000 for the quarter. The $6.4 million increase in nonperforming loans is primarily due to the placement of a $2.3 million loan on nonaccrual and a $2 million loan that was over 90 days matured and still accruing. Both loans are well secured and no losses are anticipated. In October of 2023, the $2 million loan was renewed in its current state. The remaining loans placed on nonaccrual this quarter consist of 2 relationships totaling $2 million, and minimal losses are expected as those loans are worked out. The remaining loans that are over 90 days past due at quarter-end are well secured and in the process of renewal. Overall, we remain confident in our asset quality, which continues to remain strong. Provisions for credit losses totaled $2.6 million and related to provisioning for new loans and commitments. The ACL remains at the high end of the range calculated under the new CECL methodology. Consistent with our prior quarters, loan growth of $226 million continues to be well diversified from a loan category standpoint. Commercial loans were up $123.7 million, and real estate loans were up $106 million from the previous quarter. The loan portfolio mix is well balanced, with commercial and industrial loans accounting for 36% of total loans and owner-occupied and non-owner-occupied commercial real estate at 15% and 16%, respectively. Non-owner-occupied office represents 1.8% of the loan portfolio, with non-owner-occupied medical office accounting for an additional 1.3%, while owner-occupied office and medical office totaled 2.3% of total loans. The office portfolio generally consists of Class B space with some owner-occupied Class C space, and is all located within our Texas footprint. Performance for the quarter is a testament to our solid business model and our commitment to prudent risk management. We are pleased to see continued loan growth across a diverse range of loan categories, which further strengthens our position in the market. At the same time, we're mindful of the potential risks that may arise from the changing economic environment. We will continue to closely monitor our credit quality and remain conservative in our lending practices to maintain our strong credit performance. Overall, we are confident in our ability to navigate the current economic landscape and stay committed to delivering conservative loan growth. With that, I'll turn the call back to Bart.

Thanks, Audrey. As we move into the fourth quarter and the end of the year, we are confident in our goal to achieve operating leverage, which will translate into increased shareholder value. We will maintain an active focus on managing expenses by carefully analyzing our budget and identifying areas where we can reduce costs without sacrificing customer quality or operational efficiencies. At the same time, we will continue to invest in key areas of our business that are critical to our future growth. Our commitment to full wallet relationship banking remains a top priority. We will continue to leverage our treasury management and other services, deepen existing customer relationships, and attract new ones. In addition, our innovative custom digital solutions, such as Banking as a Service and embedded finance platforms, will play a larger role in 2024. We have successfully transitioned from the proof-of-concept stage to fully operational with wide partnerships. Our bankers and branches are strategically located in Texas' best markets, providing access to some of the highest quality deals available, allowing us to remain conservative in our deal approach and choose the most promising opportunities. Looking ahead, we will remain optimistic about our ability to continue to grow our business. We will continue to prioritize asset quality and make prudent and proactive decisions relative to the current economic environment. Our dedicated team is committed to delivering exceptional service to our customers and creating long-term value for our shareholders, and we are confident that our growth strategy will enable us to navigate the challenges and opportunities that lie ahead. This concludes our prepared remarks. I would now like to turn the call back over to the operator to begin the question-and-answer session.

The first question comes from Graham Dick with Piper Sandler.

Hey, everyone. Good morning. So I just wanted to start on expenses. You've got the $460,000 in severance, $400,000 in fraud losses. And then you mentioned another legal charge. What was the size of that legal charge this quarter?

Yes, we didn't detail out the legal expenses. I mean, any time you have a reduction in force, there are legal fees associated with agreements to the employees. We didn't detail that out just because we always have a lot of legal fees, but it was somewhat material, certainly nonrecurring.

I'm trying to understand the source of the growth compared to the previous quarter where we discussed around $24 million. I'm curious about what led to the increased expenses this quarter. Was it due to the deposit competition that you mentioned, or was it connected to the significant loan growth we experienced? Any insights would be appreciated.

Yes. I mean there were some incentives related to the deposit campaign, where we were paying out prizes to people. They were bonuses earned during the quarter. But I think the important number is where we think the fourth quarter will be, and I'm pretty confident that it will be less than $16 million in total salary expense, and total noninterest expense, we think will be less than $26 million.

Okay, that's helpful. Looking into 2024, it seems you are focused on managing expenses while continuing to grow and invest where necessary. What is your outlook for expense growth as you start budgeting for 2024?

Yes, that's a good question. I mean we certainly talk about it a lot. On the loan side, we have, for the last couple of years, discussed growth being lumpy, which makes it hard to predict. We certainly weren't expecting $225 million in loan growth for the quarter. And it's not as if all of those deals were sourced and approved and booked all in the quarter; some of them were carryover from previous quarters. The same sort of things will happen on expenses, and that's kind of what happened at this catch-up on expenses that we weren't expecting. But looking ahead to next year, I mean, our plan is to be disciplined. We're trying to grow faster than expenses. I think we've done a pretty good job with that in the past, and I think we will again next year. If we think that net interest income is going to continue to grow in that 10% to 15% range, expenses will be less than that. So they'll be in the 5% to 10% range. Yes, Graham, if I could add a little color to it, again, I think we're in the process, as we've grown, reallocating resources internally to be more efficient. You can see that from our headcount. We started the year at 369 employees. We probably got a little ahead up to 390 or so employees, now we're back down to about 370. We've grown $443 million. So what you're seeing is we're kind of managing the employee headcount to continue to grow. This whole process has been what we've talked about before, we need to grow into a little bit of the operating efficiency as well as cut costs. I think the $226 million coming to the third quarter is actually fortuitous because I think the fourth quarter will be slower, but it tees up the opportunity for us to grow a little bit into our operating efficiency, control our headcount and have an increase in revenue that will affect the bottom line. I think the fourth quarter is going to look a lot better, and it's certainly going to tee us up for a good 2024.

Okay. That's very helpful, Bart. And then I guess you touched on it a little bit there, but the loan growth outlook, obviously, you guys had some unexpected developments happen. Things got pulled forward to this quarter. What do you think for next year on loan growth? I think this year, before this quarter, we had talked about maybe $300 million to $400 million in growth for the full year. Can you frame up what you expect in 2024? Do you think it will be a little bit less than that as the economy cools down? Or are you still seeing pretty good opportunities on the lending side to do something similar?

Yes. I mean, the nice thing about the position we're in is we've had some really high-quality customers that we have been onboarding. It's just a unique market in that we can be very choosy. It has been very nice to get full high-quality customers from some of the competitors and establish strong relationships. With that, I think you’ll continue to see some growth. I think for the fourth quarter, the growth is going to be very mild, $50 million to $100 million. But when you look at 2024, we think somewhere between $300 million and $400 million is quite reasonable. You've got to factor in that we're going to have some attrition in loans. So there's going to be some paydowns and payoffs with it. But I think net growth of $300 million to $400 million is very reasonable. All of that is coming from just almost high grading the portfolio. We just have such excellent clients that we’re choosing that I think the portfolio is only going to get better as we continue to grow. I'm very excited about this. I think it's an opportunity for us to gain market share in our markets with some of the best clients available at, call it, again, $300 million to $400 million in net growth for 2024. John, do you have anything to add to that?

I mean, rates may affect that somewhat to the extent that rates were to continue to go up; we'd be at the lower end of that scale. If they come back down, I think we'll see even more opportunities, particularly on the builder side.

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

Hi. Good morning, guys. Thanks for taking my questions. Just wanted to start on kind of the continued negative mix shift in the deposit book. I know you guys have had really strong deposit growth, and it's been a welcome sight to see. But obviously, your deposit costs are fairly high relative to peers, and I think a function of that is just strong asset growth that you've had. But just as we think about the next few quarters in a rate environment where Fed rates are kind of at or near peak, how should we think about the progression of deposit cost betas and mix shift as it relates to the ongoing asset repricing that is going to help the margin again this quarter? Just trying to frame up the puts and takes as we think about the yield and margin progression into next year?

Sure. So looking at noninterest bearing balances first. As a percent of total deposits, they've certainly come down; the dollars haven't come down so much. On an average quarterly basis, our noninterest-bearing was actually up a little versus last quarter. But those deposits are certainly harder to grow when we have a quarter where we're growing $240 million in deposits; it's hard for those noninterest-bearing to keep up. That certainly is a negative shift in the mix. We will continue to grow dollars, but as a percent of total deposits to the extent that we're growing fast, that's going to be harder to keep up. We're certainly seeing more deposits go into CDs than anybody would have predicted a year ago. The good news about being relatively high regarding the cost of funds is I think we've already repriced most of the portfolio. We just don't have much left to reprice. Higher for longer is probably good for our margin, especially relative to peers. I just don't think we'll see much change. From an asset-liability perspective, we're almost exactly evenly matched. Our provider for ALM has said that we're certainly one of the most closely matched banks in their portfolio of several hundred, maybe singularly the most even fact. So if rates stay right where they are, I don't think we'll see much change in the margin. And even if they change a little bit, I don't think we'll see much change.

And I think I would add just that with the flight quality and our chance to get some of these really high-quality deals, the margin is a little less whenever you're talking about a customer that could pick basically anything they wanted to get together with. Unfortunately, we have been able to get those types of customers. There is a little better margin, but it's also a fair quality deal. So obviously, there's always trade-offs that we'll try to manage.

I appreciate all the color. And then obviously, just on the headcount reductions this quarter, some of that’s strategic. Just as we think about the next year or so, I mean, are there other businesses? I know you got out of the auto business; are there other portfolios or optimization efforts that you could look into? And maybe just on the loan side, are there areas that you're emphasizing versus kind of deemphasizing? I assume office might be one of those, but we just want some color.

Yes. If I could start with just the headcount part of it. I think we're looking at exploring all kinds of efficiencies across every line of business. I think everybody in the bank has bought into the efficiency side of it. It's been very interesting how we can even utilize cross-trained employees. For instance, we have some retail employees that volunteered to learn some of the BSA side, and with excess capacity, they're actually performing some of the BSA/AML tasks with it. It's neat that everybody's kind of pitched in, and we're finding ways to utilize people to their fullest. At the same time, as we continue to grow, some functions need more resources. So we are indeed staffed as we are; we do have to continue to think about where we're going in the future and make sure we're making proper investments. The existing lines of business that are left are very profitable, and we're very pleased with their performance. I think they're getting with scale even more efficient. I don't see, at this point, that there's another line of business to exit as much as we're just managing the headcount while still continuing to grow. I think if you look at all our different lines of business, they all can scale and become more accretive to us with just even a little bit more growth. As far as the loan mix, I don't know, Audrey, if you want to have any comments on that.

In terms of areas we are not focusing on, I want to highlight that our office segment is performing well. We have only one loan classified at $1 million. We are not pursuing opportunities in office or retail spaces, and we are not inclined to engage much in multifamily at this time. Our primary focus remains on commercial and industrial, as well as the full wallet relationships we've been discussing.

Makes sense. And John, maybe just one final one for me. Just the loss in other non-interest income. Sorry if I missed it in the release, but kind of what drove that? Was there something nonrecurring in there? Just would love an explanation.

It is a nonrecurring situation. The fraud loss falls under other non-interest income, where we experienced a negative change from quarter to quarter. Some of this was due to a swap between quarters related to SBIC. We have multiple SBIC investments, and their performance can vary from quarter to quarter. Last quarter was strong for SBIC, while this quarter saw a slight loss, although our investments there are not substantial enough to significantly impact the overall figures; it just happened to be the case this quarter.

Michael, I would like to add one thing regarding the SBICs. They typically don't experience quarters where an asset is sold at a loss that we need to account for, and I wouldn't expect that trend to continue. We didn't mention it because I doubt it's something you would normally focus on. Last quarter, we didn't emphasize that they performed well; it was just one of those unusual occurrences where the performance shifted from good to bad over successive quarters. They had around $250,000 in profit last quarter, which turned into a $250,000 loss this quarter, reflecting a significant shift.

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

Hey, guys. Good morning. John, I heard your comments on the drivers of the lower NIM than expected, given the loan spread dynamics. What kind of spreads are you putting on to the new loans versus the portfolio average? What are your expectations on loan spreads from here?

Yes. So our margin is relatively high compared to peers, but our spreads are probably much closer. We're competing for deals every day. The reason our margin is better is because we don't have the AOCI losses. We don't have the legacy investment portfolio that's relatively low yielding. For new business going forward, as we're looking at it, we typically won't do a deal that is less than Fed funds plus 300. If it funds today or however you want to look at it is 5.25, we typically don't do a deal for less than 8.25 today. There could be some exceptions to that, but for the larger floating-rate deals, they're typically 300 over or so.

And I think I would add just that with the flight quality and our chance to get some of these really high-quality deals, the margin is a little less whenever you're talking about a customer that could basically pick anything they wanted together with. Unfortunately, we've been able to get those types of customers. It is a little better margin, but it's also a fair quality deal. So obviously, there's always trade-offs that we'll try to manage.

Got it. And then just on the auto-finance exit. I think last quarter, you noted that you'd expect something like direct expense savings would be $500,000 plus, and you were reallocating $50 million of loans in some more strategic areas of focus. Is that still kind of the same thought process there? Any updates?

Yes, the team has been disbanded at this point. The portfolio was paying down, and I don't have the exact numbers, but it's significantly less than $50 million, effective September 30. We haven't realized any savings, particularly in salaries. On the loan side, we definitely stopped that in the last quarter. That portfolio has about a four-year weighted average life and pays down several million dollars each month. We are reallocating those proceeds to other loans, but the immediate effects were not seen in the third quarter. We expect to see more in the fourth, although it's not substantial, but every little bit counts, and we are looking at everything.

Next question comes from the line of Matt Olney with Stephens Inc.

Hey, thanks. Good morning. I want to go back to the discussion around the margin. John, you mentioned the spreads on some of the more recent loan growth. I appreciate the commentary there. Any other color about how those spreads have changed during the course of the year? Have they maintained similar levels? Or any kind of widening that you've seen this year So far?

Certainly, I don't think they have changed much. For larger commercial loans, we are typically in the SOFR plus 300 range. There are deals at plus 200, but we're usually not pursuing those. We've indicated before that we could be experiencing faster growth if we were willing to take those, but we are cautious about our capital and liquidity positions, so we generally avoid loans in the 2s. There may be occasional deals at plus 2.50% or 2.75%, but those are exceptions. Audrey and I have discussed our disciplined approach to ensuring we have around 600 spreads and that the deals we take on have solid stories that make sense for us. There are deals that others might choose to pass on, but we see value in them because of the quality of the customers. Overall, our loan selection process has been very selective and disciplined, and that approach will continue.

There is a higher credit that could pass, but we will ensure we don't fall below that.

Yes. And even with that, I think we are seeing a lot of loan opportunities. Maybe we do one out of every 10 or something. I mean it is a market out there. Obviously, there's a lot more loan demand than there are looks to confront. We are able to see cherry-pick really good customers. I think we'll continue to be just as disciplined as we go forward with it.

Okay. Could you provide insight into the incremental cost of funds used to support loan growth? If we combine the growth in non-interest-bearing accounts with the interest-bearing deposits, what has been the recent incremental cost of the total deposits?

Yes. For this last quarter, when we had the deposit campaign that really spanned the last 2 quarters, our cost of funds for those deposits was less. I think it was less than 5%. Wholesale deposits that we needed to raise to make up the difference is probably more in the 5.30% range. It's hard for us to predict what the mix is going to be going forward as to our self-generated core deposits versus what is needed on a wholesale basis to make up the difference. But self-generated it's probably averaging in the 4.5% range and then the wholesale in the $530 range.

Okay. Well, if I kind of take that and think about the margin in 2024, it feels like there's a little bit more incremental pressure beyond the fourth quarter we talked about, just if we assume those spreads continue. Is that the right way to think about the margin for next year, little incremental pressure from the fourth quarter?

It is. If we would have grown loans, $100 million in the third quarter, I think we would have been pretty close to our forecast of the margin being down plus 5%. So it is certainly a function of how fast we grow. Now with that said, if we grow $300 million next year, it's certainly a smaller percent of the overall balance sheet. So it won't affect the margin as much as it would have this year. But it's going to be less than 371 on average the spreads for new business.

Okay. Yes. That makes sense. Lastly, can you discuss the capital constraints and the binding ratios that you are monitoring, especially if the pipelines improve and loan growth increases significantly? What capital ratios are you closely watching?

Yes. Our risk-based capital ratio was flat quarter versus quarter. That's the one that we watch most closely as a high loan-to-deposit ratio. But as long as we're earning in that 1% ROA, it should be capital accretive. We may not be exactly there this next quarter, but certainly, that's our bare minimum goal, and we expect to be there. Again, it will be capital accretive. So we are not planning any capital on burns.

And I think in 2024, we should be in a capital-accretive position where self-funding is basically our goal. John and I feel pretty good about not being there, but we don't need capital.

So what you're saying is, I think that threshold to internally generate enough capital, the ROA needed to be pretty close to 1% to get there. Is that right?

At the rate we have been growing this year, we expect our growth rate to slow down a bit next year. Therefore, we wouldn't need to achieve a 1% growth rate to be self-sustaining, but that 1% was certainly our target this year, and I believe our growth is over 20%. As we move to 12% or 15% growth next year, it will require slightly less to reach the same objectives.

Okay. And just one more question for Audrey. I believe she mentioned there are two loans currently being worked out. What is the timeline for their resolution? Will this be a near-term event in the fourth quarter, or could it extend into next year?

Well, probably, I would say, into next year, but not probably in the first quarter, I'd say.

Okay. And how would you characterize or describe the collateral on some of those loans relative to the cost per...

The increase in nonaccruals was $4 million. This includes a $2.3 million spec house with a new appraisal showing 64% loan-to-value. It's located in a prime area and is part of a new construction project. We don't expect a loss on this as it falls within our community bank segment. Additionally, we have a small builder in Southeast Texas for whom we have financed nearly 100 small homes over the last 8 to 10 years. We have placed $1.1 million from that relationship on nonaccrual status, which involves three homes and a couple of smaller loans. We have estimated a specific reserve of $160,000 for that relationship, indicating it’s not a significant concern. The third nonaccrual is a $900,000 borrowing base line of credit, backed by a strong guarantor with separate income, so again, we do not foresee a loss related to this. In terms of past dues, we usually do not have loans that are over 90 days overdue and still accruing interest. This quarter, we had a $2 million loan that is current, has been cleared and renewed, and does not present a credit issue. This loan is also a real estate transaction with the loan-to-value in the 60% range. There are also two smaller loans undergoing renewal, and they do not raise any credit concerns either.

Thank you. There are no further questions at this time. I would like to turn the floor back over to Bart Caraway for closing comments.

Yes. I just want to thank you, Ritu, for taking care of us as an operator. I want to thank everybody else for joining us and your continued support at Third Coast Bancshares. We look forward to speaking to you next quarter. Thank you. Have a good evening.

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