Greetings and welcome to the Third Coast Bancshares Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Natalie Hairston of Investor Relations. Natalie, please go ahead.

Good morning and thank you for joining us for Third Coast Bancshares' third quarter 2026 earnings conference call. With me today are Bart Caraway, founder, chairman, president, and chief executive officer, John McWhorter, chief financial officer, and Audrey Spaulding, 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 investor section of our website at ir.thirdcoast.bank. There will also be a call replay available until October 29th, 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 22nd, 2026, and therefore you are advised that time-sensitive information may no longer be accurate as the time of replay listening or transcript reading. In addition, the comments made by management during this 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 and other filings with the SEC to better understand those risks, uncertainties, and contingencies. Today's discussion will also include the proposed merger with Great Plains Bancshares. This call does not constitute an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval. Third Coast intends to file a registration statement on Form S-4 that will include a joint proxy statement prospectus, and investors are encouraged to read it when it becomes available as it will contain important information about the proposed transaction. 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, we'd like to turn the call over to Third Coast founder, chairman, president, and CEO, Mr. Bart Caraway. Bart?

Thank you, Natalie, and good morning, everyone. The third quarter was another healthy quarter for Third Coast, and importantly, One that demonstrates the underlying strength of our franchise. Reported earnings included $3.2 million in merger-related expenses, which affected non-interest expenses and net interest margin. John will walk through those items in more detail in just a moment. But when you look through those items, I believe the underlying performance of the franchise remains solid. There are a few things I'd point to. I'm encouraged by the continued momentum we're seeing in treasury management. The team continues to add customer relationships and generate a steady source of deposits. Over the past 12 months, non-interest-bearing deposits increased 60.3% compared with 35.5% growth in total deposits. For us, that's really about continuing to deepen customer relationships and build a stronger core funding base. Second, we're also seeing strong loan activity. Gross loans ended the quarter at approximately 5.5 billion. During the quarter, we sold approximately 87 million of loans through our securitization program. Excluding that sale, loan growth exceeded 144 million. That underlying growth is consistent with the pipelines we discussed with you last quarter and gives us continued confidence in the strength of customer demand across our markets. Third, credit remains stable. We recorded net recoveries during the quarter. Audrey will provide some additional detail on the portfolio in a few minutes. And fourth, tangible book value per share reached $33.31. Another new high for the company. We view the continued growth in tangible book value as an important measure of the long-term value we're building for our shareholders. When you put these things together, I believe they tell a pretty straightforward story about where we are today. We're continuing to grow the company, strengthen our customer relationships, and build value while also positioning Third Coast for the next stage of growth. And that brings me to Great Plains. Earlier this month, we announced our agreement to merge with Great Plains Bancshares, parent company of Great Plains National Bank. The combination will expand our presence in Dallas, establish our entry into Oklahoma, and is expected to create a franchise of approximately $9 billion in assets. We view Great Plains as an extension of the strategy we've been executing. We remain focused on disciplined growth, strong customer relationships, Thoughtful balance sheet management, sound credit fundamentals, and ultimately building a franchise capable of producing durable long-term earnings. We feel good about the progress we're making, both in performance of the core bank today and in what we're building for the future. With that, I'll turn the call over to John to walk through the financial results and provide additional details on the quarter.

John? Thank you, Bart, and good morning, everyone. As Bart mentioned, our third quarter results included a few items that are important to understand when looking at the quarter over quarter comparison. I'll spend some time on those items and provide additional detail on the underlying performance of the business. Net income for the third quarter was $19 million compared to $22 million in the second quarter and $18.1 million in the third quarter of 2025. And diluted earnings per share was $0.93 compared to $1.08 last quarter and $1.03 in the same period last year. However, excluding the $3.2 million of merger-related expenses, adjusted net income was approximately $21.6 million or $1.06 per diluted share. Net interest income was $59.5 million compared to $60.3 million in the second quarter and 50.8 million in the third quarter of last year. Net interest margin was 3.7 and would have been 374 without the accelerated accretion compared with 383 last quarter. On loans, gross loans ended the quarter at approximately 5.5 billion, an increase of 57 million from June. However, that reported number includes the impact of approximately 87 million of loans sold through our securitization program during the quarter. Excluding that sale, underlying loan growth exceeded 144 million. As we discussed last quarter, securitization has become a part of our broader balance sheet and capital management strategy, and we expect to close a new securitization in the fourth quarter as well. On the funding side, total deposits ended the quarter at $5.9 billion, an increase of $69 million from June. Non-interest-bearing demand deposits increased approximately $78 million to $721 million and represented 12.2% of total deposits compared with just 11% at June. As Bart noted, the longer-term trend of non-interest-bearing demand deposits is also encouraging. Average cost of deposits for the quarter was 3.09% of just four basis points from the second quarter, while remaining 47 basis points below the third quarter of last year. Our reported efficiency ratio was 63.1% and, as adjusted, was 58.63%. compared with 56.5 last quarter. The sequential comparison reflects both the merger-related and other non-recurring items as well as the approximately $3.5 million gain on the sale of the factoring business that benefited the second quarter non-interest income. We continue to build book value during the quarter. Book value per common share increased to 36.53 while tangible book value per common share reached a new high of 33.31 compared with 33.08 at June 30 and $30.91 a year ago. Finally, in case you missed it, we added a new table to our earnings release. It's something investors have asked for in the past, which is a breakout of our merger-related expenses. and we also broke out the second quarter gain realized on the sale of our factoring business. This table shows adjusted ROA and ROE and also shows that by some measures it was our best quarter ever. It also shows that we have consistently grown net income for all reported periods. Overall, while several items affected the quarter over quarter comparison, we continue to see strong loan demand, progress in our funding mix and continued growth and shareholder value. With that, I'll turn the call over to Audrey to discuss asset quality.

Thank you, John, and good morning, everyone. Credit performance remains stable during the quarter, and overall portfolio performance remains consistent with our expectations. Non-performing loans ended the quarter at approximately $29 million compared to $27.1 million in June. As a percentage of total loans, non-performing loans were 0.53% compared with 0.50% last quarter and 0.52% a year ago. While we experienced a slight increase in the quarter, the overall ratio remains relatively consistent with recent periods. The increase in non-performing loans was primarily due to the placement on non-accrual of three SBA loans totaling approximately 2.3 million. This increase was partially offset by pay downs on non-accruals and four small loans which were placed back on accrual. It is also noteworthy that over 45% of our total non-accrual loans are fully SBA guaranteed or cash secured. We recorded net recoveries of $27,000 during the quarter marking our third consecutive quarter of net recoveries. We have recorded net recoveries of $182,000 year to date. Provision for credit losses totaled $540,000 during the quarter, and the allowance for credit losses increased to $54.4 million, representing 0.99% of total loans. Our loan portfolio remains well diversified across industries, Markets, and Borrower Relationships. Portfolio allocations remain generally consistent with the prior quarter, with commercial and industrial loans representing 43% of total loans, and construction, development, and land loans representing 16%, while owner-occupied CRE was 11%, and non-owner-occupied CRE was 18%. Overall, we continue to feel good about the credit The credit profile of the portfolio. As we grow, our teams remain focused on disciplined underwriting, appropriate loan structures, and proactive portfolio management. The consistency we're seeing in credit performance, even as the balance sheet continues to grow, reflects the same disciplined approach we've discussed with you throughout the year. With that, I'll turn the call back to Bart. Bart?

Thank you, Audrey. As we look ahead, we believe Great Plains represents an important next step in building a stronger, more valuable Third Coast franchise. First and foremost, the transaction has the potential to transform our funding profile. Great Plains brings a granular, relationship-based core deposit franchise that strengthens the commercial banking platform we have built at Third Coast and gives us greater capacity to support continued growth. When you pair that stronger funding base with the scale and capabilities we're bringing together, we believe it creates an opportunity for more durable earnings and long-term stakeholder value. Our focus isn't simply on becoming a bigger bank. It's building a better bank. and as the banking landscape continues to evolve, we believe there is meaningful value in building a Texas headquartered bank of skill with the talent, capabilities and relationship banking culture to compete. That kind of franchise is increasingly difficult to replicate. Before we open the call to questions, I want to thank our employees for their continued commitment to our customers and to Third Coast and our customers and shareholders for the trust they place in us. We do not take that trust for granted and will continue to work to earn it in every way.

With that, I'll turn the call back over to the operator. Thank you.

Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

One moment, please, while we poll for questions.

Our first question comes from the line of Michael Rose with Raymond James. Please proceed.

Hey, good morning, guys. Thanks for taking my questions. I just wanted to kind of get a better understanding of the margin dynamics this quarter. Typically, when you have a securitization, you get a pretty meaningful boost, but you were down kind of 13 basis points. It looks like it was in the securities portfolio. I saw the balances grew, so maybe you added some. Yields were down. If you can just kind of walk us through What happened this quarter? I think you'd guided the flat to up. With the securitization, I would have thought that we would have seen that up. If you could just walk us through all that, it would be great.

Thanks. Sure. There's a lot, Michael, that I could say about the margin for this quarter. It certainly was a little bit of a surprise to us. On a more positive basis, we're definitely going to be up in the fourth quarter. So several points there. On the margin, I would point out that for the quarter, we were considerably better each consecutive month. In other words, July was the low point for the quarter. And we would have expected it to be a little bit better because of the securitization, but that one, we were selling loans off the balance sheet that We had already amortized most of the fee income, so there were very few fees that we picked up from that one. The one that we're doing in the fourth quarter should be more material where we actually see a difference, where this one we did not. And the securities portfolio, because we did the securitization early in the quarter, this one had a little bit lower yield than the existing portfolio, so it did drag it down a little. But then, of course, late in the quarter when rates went up, all of those asset-backed securities that we have on the books are floating rate. So I would expect an increase in the yield in securities for the quarter. Our non-interest bearing demand is going to continue to be a nice tailwind. So if you look at the quarterly average non-interest bearing demand, it was, I think, $654 million average for the quarter. were period end with $721 million. So a pretty significant difference. And we're still at about those levels today. So we're last quarter, we sold assets early in the quarter. It's going to be a little bit different this quarter that our non-interest bearing demand is up. Loans so far through today are up $80 million for the month. So it looks like we're going to have loans that are being funded by non-interest bearing demand The rate increase, we are a little bit asset sensitive, so I'm a lot more optimistic about the fourth quarter. The third quarter was just kind of quirky that I certainly wouldn't have expected the decline. And a little bit of it was amortization of premiums on the Keystone portfolio. We didn't have many loans booked at a premium, but there were a few, and Unfortunately, some of them paid off at the same time, so we had to amortize those premiums, which made a bigger difference, too. So it just happened to be one of those quarters where everything seemed to be going in the wrong direction, and I think those will reverse themselves for the fourth quarter.

All right, so not trying to pin you down here, John, but as we think about the fourth quarter and the dynamics that you just laid out, you know, the four basis points you talked about earlier, the growth that you just mentioned, the NIB mix moving higher, you know, how should we think as a starting point, you know, for the fourth quarter, you know, in the context that the margin increased through the third quarter? Thanks.

I think 380 is a pretty good number for the fourth quarter, and... would hope to overperform versus that number. But 380 is kind of what we've penciled in.

Okay, perfect. And maybe one for you, Bart. Obviously, if you back out the securitization underlying growth closer to $145 million, that's above the guide. You just mentioned that loans are up about $80 million so far this month. You're going to be adding the The New Deal. You know, just how should we think about kind of pre and post deal loan generation, you know, kind of as we move forward? Is that is that prior target, you know, still what we should expect or should it be potentially something higher? Thanks.

No, I think we're going to probably stay on target. There's a lot of dynamics to that, but we do have some teams that joined us at Third Coast that are ramping up, and I think that's reinforced the pipeline. At the same time, our focus is going to be on integrating Great Plains and spending time with them. I do think there's some upside in their production in that they have some larger customers that would benefit from more products that we have, But I think all in all, we probably are sticking with the same guidance that we've had. I think it's going to be fairly consistent and a little bit of that too with rates going up may put a little bit of damper on some of the loan production. I think that's going to be offset by how robust our pipelines are. Evening everything out, I'm sticking to the same guidance we've had for the last three, four months.

Yeah, and Michael, just maybe a little more color from my perspective. Last quarter, I would have thought that we could have done the securitization and still grown $100 million, and it was 56, so we were off a little bit there. I would say the same thing for the fourth quarter, that we can do a securitization and still grow in that $100 million range. But the difference is going to be we're not going to close it early in the quarter like we did the last one. It would be much later in the quarter and not impossible that it would push to the first quarter, but most likely it's going to be a December sort of transaction. We kind of have it teed up and should be ready to go on it. And we're waiting to see what the growth for the quarter looks like. But it's been strong enough lately that it's kind of just the best guess at this point.

Yeah, totally get it. I appreciate all that color. If I could just slip one more in, just anything in that other fee income line that you would consider kind of non-recurring at this point, you know, I know it was kind of above the four to four and a half quarterly range that you'd given last quarter. Thanks.

Yeah, so we've been real happy with fee income initiatives lately. The Treasury Management Group continues to do well. For this quarter specifically, the differences versus prior quarters were we had more swap fees and we had more loan fee income. And those are a little harder to forecast, although with the pipelines being strong, those numbers should continue to be strong. The swap fees, I mean, they're customer dependent. It's just hard to say. And then the other piece that we have this quarter that we haven't had previously is this trailing revenue stream from the sale of our factoring company. And that was $150,000 or thereabouts for the quarter. That number shouldn't go down unless those loans pay off. And if we refer more deals, it could go up. So we're pretty optimistic about fee income. Again, tend to be just a little bit lumpy based on loan volume, being that a lot of it was loan fee related, but we feel pretty good about the quarter.

All right.

Thanks for taking my questions, guys. I'll step back.

Thank you, Bob. The next question comes from the line of Hannah Wynn with KBW. Please proceed.

Hi, good morning, guys. Thanks for taking my question. I wanted to start on the hiring side. I know you guys have continued to invest in experienced lenders and hired five new hires last quarter. Just curious how the hiring progress this quarter was and when those newer teams are expected to ramp up in the process and when we should expect a more meaningful contribution to growth.

The teams that have come on are teams that we've known for a long time. And I think I'll give credit to the management team. They've gotten very good at kind of feathering in experienced team members aligned with their production so that they get profitable very quickly. And indeed, I think the team's just gotten better and better at that. But these experienced bankers come with high-quality customers that they are bringing on early. So I expect each one of them to get to profitability much faster than in the past. And indeed, some of them are already there. At this point, I think they're already contributing to the pipeline. Maybe the last one is coming is we feel like it's going to be very strong as well. and at this point, I think we've gotten the people that we'll probably have for this year. Maybe there's a lucky surprise we add another one, but for the most part, instead of volume, it is very targeted and surgical hiring. People that are coming on board, fewer numbers, but much bigger pipelines. And so I think we're really pleased the way we've managed it. It's not been a drag on the earnings like in the past. We've hired large teams and it took a while for them to ramp up. I think these are teams that are coming on that make almost an immediate impact and sometimes they're profitable within the first month they come on.

Hannah, if you look at the salary line item on our earnings release, it's been pretty consistently $25 million for the last three quarters. So we've been able to hire these new teams, we think very high performing people and it's been offset with cost saves through Keystone and the sale of our factoring company. So we've been pretty happy with that line item. Could go up a little bit in the fourth quarter. We do need to add support for these teams but we've been encouraged by the talent that we've been able to add this year at a relatively modest increase, if any, in salary expense.

Great. That's very helpful. Thank you. And then another question on Great Plains. If you could just give us an update on the expected timing of the deal and whether early first quarter 2027 closes still the right expectation and any other color on the process and integration planning would be helpful.

We don't have a date exactly yet. You know, we do have to have shareholder meetings on both sides. I think the latest it would be is April 1st. We certainly hope for it to be February 1st. We think it'll be somewhere in that range between February 1st and April 1st is kind of best guess at this point. And hopefully we can clarify that in coming weeks. And as far as integration, obviously that's our priority.

Fortunately, coming off right off the keystone, everything's relatively fresh and Our project management team's geared up and it's almost rinse and repeat. The nicer thing about Great Plains is that they're essentially on FIS as well as we are. So it greatly simplifies the products and they have a very similar treasury platform as well. So for us, this is actually an easier transaction to integrate than even what Keystone was. So it's looking... It's actually looking very well right now. The other thing is just that I'd just give a shout out to the Great Plains team. I mean, it's a very talented group of people, especially for the size of the bank. We've been very impressed by the quality of people there, and the cooperation between our teams has just been a natural fit, and it's just been a Very easy and pleasant process thus far. So I think that's going to translate into next to no customer impact. Again, we're keeping their names and there's markets. So from the customer standpoint, I don't think they're going to really know much of any difference other than they're going to have more products. And at the same time, we're going to be able to add some scale and leverage to all of it. It's turning out to be even better than what I anticipated, and I knew it was going to be good from the beginning.

That's great to hear. That's all from me, guys. Thanks for taking my questions. I'll step back.

Thank you.

The next question comes from the line of Brett Rabaton with Stonex Group. Please proceed.

Hey, good morning, guys. Thanks for the question. I wanted to go back to the margin for a second and just was curious if you had spot margin. at either the end of the quarter or the margin for September.

It might take me just a second. I don't remember that off the top of my head.

No worries. John, do you want to maybe ask another one?

Yeah.

Yeah, I was going to say, well, I'll ask another one while you're looking for that. I guess I'm just a little confused.

Don't hold me to this, but September was 385. Okay.

Great. And then, you know, Bart or John, I guess I'm still just a little confused with the loan rates in the quarter. And I know the September rate hike, you know, was late in the quarter, and so you wouldn't have had the full benefit. But can you just talk about the link quarter change and loan yields and then maybe go over, you know, how much of the portfolio would be variable and reprice with a Fed hike or change? walk us through kind of the dynamics around the repricing of the loan book.

Yeah, Brett, I admit you look at the raw numbers and it's a little bit of a head scratcher as to how rates could have gone up and our yield went down. It's all tied to loan fees, though, and the way we're amortizing fees. So if, for example, in the second quarter we had more loan payoffs that had fees that we took directly into income, I mean, that would affect it. We talked a little about the amortization of the premium that we had on the Keystone loan that paid off. It was $800,000, and you annualize that, and it has a rather large effect. And that's actually probably the biggest thing is that one single loan that paid off that we had at a large premium. I mean, we're asset-sensitive at plus 200. We're 2% asset-sensitive. When the Fed raised rates, we did not increase our deposit rates at all. I mean, there are some that are floating, obviously, but I expect the yield to go up next month for sure.

Okay. That's helpful. And then was hoping to get an update on the ORE property and just, you know, if that was leasing up and, you know, any update on that credit.

I don't think there's a whole lot to update on it. We just continue to move forward with it, but it's pretty much on trend that we talked about before.

Okay. Fair enough. Thanks for all the color.

Thank you.

The next question comes from the line of Bernard Von Giesicki with Deutsche Bank. Please proceed.

Hey, guys. Good morning. John, just following up on the fee income commentary that you mentioned, there's a little bit of an outlier given the more swap fees, the more loan fee income. Is it fair? Are you keeping your quarterly guidance around that $4 to $4.5 million, or has that changed at all?

Yeah, I think we could probably say $5 million. Okay. Some of it is certainly going to be core, just the fact that we're bigger, that we have more people, that we're doing more deals. I mean, we certainly expect that number to increase. It may not be six every quarter, or at least next quarter, but we should see a nice increase.

Okay, great. And then maybe just on expenses, obviously I understand that the merger costs can be a little lumpy, but just given your forecasts on those, Any way to think about what we should be expecting? Should there be another big number in 4Q? Just some sort of cadence, just so we have a rough idea on what you're thinking from next quarter or so.

Yeah, good question. I'm glad you brought that up. So we did go back and look at what we originally told the market for the Keystone acquisition. So most of this expense was related to Keystone, not Great Plains. And if we go back to our original investor deck, we said the Total deal expenses would be $13 million, and we've so far spent about $12.5 million. So we're just a little under where we expected to be, and we may end up getting to the $13 million. There's probably a little bit more expense there. On Great Plains, it depends on when closing is. There shouldn't be much by way of merger expense in the fourth quarter. Keystone, we're almost through with. There's work, obviously, we're doing on Great Plains, but it's not going to be material probably until the first quarter. So I would think this quarter is going to be, I don't know, $500,000, maybe a million tops in merger expenses, probably closer to the $500,000 if I had to guess.

Okay, great. Thanks for taking my questions.

The next question comes from the line of Matt Olney with Stevens, Inc. Please proceed.

Hey, thanks for taking the question. Just a few follow-ups on the securitization discussion from earlier. John, the securitization that you closed in the third quarter, you mentioned it was helpful as far as liquidity management and capital management, which makes sense. Just in terms of the overall financials of this transaction, I think you said the securitization was a slight drag to overall loan yields and obviously a drag to loan balances. So is it fair to say that that securitization on itself was a little bit of a drag to overall financials in the third quarter? Or any other considerations from that deal we should consider? And then the second part, John, on the securitization that you're planning for the fourth quarter, I think you said it would be more financially impactful? implying it would not be a drag. Any more color you can give on that securitization versus the one you just closed? Thanks.

Yeah, good question, Matt. So the first two that we did last year were very impactful because the fee income was in the million-dollar range, which far offset the attorney's fees. But the more recent one, it was a push at best. I mean, we really didn't make anything from that perspective. Now, of course, we have the earning assets. I mean, I'm not counting any of that. But if I look at non-interest income, non-interest expense, that securitization would have been a net negative for the quarter, only slightly so.

But obviously, it was a strategic play for us. It was something we needed to do to manage concentrations. And sometimes you do that when we have Such large customers that we want to make sure and accommodate. You know, I think we look at this as customer service more than anything else and managing our own balance sheet. But I think John and I talked about the fact that it closed within two weeks of the start of the quarter. That was, you know, a drag from the fact that it happened so early in the quarter.

appreciate the details. And the second part of the question was on the securitization that you're working on now. I think it was implied this one could be more financially impactful. I know it's not closed yet, but any more color on that would be helpful.

Yeah, and I don't have numbers that we can give out yet, but I think this next one is going to look more similar to the first two than the more recent one that that there will be more fee income associated with it. It'll be a little bit higher yield on the security that we buy back. I think it'll be better all the way around.

Okay.

That is helpful. Appreciate the color there. And then I guess, Bart, you mentioned the progress you've made on the non-interest-bearing deposits in the third quarter, and it sounds like that's continued thus far early in the fourth quarter. Really impressive in this kind of environment. Any more color on just the customer wins and the investments you've made that have driven some of the strong results there?

Yeah, I think almost everything singles and doubles for the most part. One thing that, again, we highlight Treasury Management, they're opening probably more accounts than they ever have been. And I think part of this is just across the bank, the partnership, but the community and the commercial as well that That's a really, really good sign of the synergies that are happening between the groups. We have some rather large customers, too, that, as you know, that we've been banking. And we have 25 accounts that are more than a million dollars, which are significant, high-quality customers' accounts. that we probably could not have onboarded on the old system. And this is another reason why we converted to a higher grade system is to be able to manage these type accounts and win these accounts. And that's part of the success story we're having.

Okay. Thank you for all the color.

I'll step back. The next question comes from the line of Dave Storms with StoneGate. Please proceed.

Good morning, and thank you for taking my questions. I wanted to go back to the Great Plain transaction. I know you mentioned in the slides there that you're expecting about 50% of the cost savings in 2027. Is there any, is it too early to talk about maybe a cadence for that? Does the Keystone acquisition and some of the legacy infrastructure there front load some of that, or maybe just any color we could get there would be helpful?

Yeah, Dave, if anything, it's probably the opposite, that it would be later in the quarter, and depending on when our conversion ends up being, that the cadence of the savings could come a little bit later. We don't have a definitive date for conversion yet, so kind of pending what we find out about that will have a lot to do with it.

Understood. Appreciate that. And then maybe just one more. In the past, you know, we've talked about the success of the Heritage Rural Branches as a source of growth. maybe just any thoughts on how you expect that to continue maybe in the second last couple months of the year here and then again if Great Plains maybe adds to that growth in any meaningful way.

That's a great observation because it really is an extension on our rule building. I think Great Plains has some fantastic history of being able to grow deposits and you know they're Truly a great marriage. They do some things better than us. We do some things a little bit better than them. But together, the synergies are going to be fantastic. And we expect one of the stories that we're going to be able to tell is the ability to continue to grow these great core deposits even faster and at a better rate with us together. And these deposits particularly are both core and stable, which is part of the story of transforming our deposit base. So I think this is one of the things that's hard to quantify, but I'm seeing it already from the dialogue that we're having internally, how well it fits together, that I think Big part of our core deposit production is going to be the contributions of us together in these particular markets. And don't forget also North Texas. It greatly expands our footprint there. And whenever you look at the markets that they're in in North Texas and the dynacism of that market, I think we're going to be able to grow a lot of market share there with the combined banks. So overall, I think that's going to be a great story that we're going to be able to update and have you all follow over time.

That's perfect. Thanks for the commentary, and good luck next quarter.

Thank you.

The next question comes from the line of Steven Skouten with Piper Sandler. Please proceed.

Hey, morning, guys. This is Jackson Andrew on for Steven. Appreciate all the colors so far. Just wanted to touch back on the pipeline, kind of what's kind of driving growth there going forward.

Yeah, I think everybody's doing well, hitting them all cylinders. I do think it will be probably disproportionately in the C&I portfolio. I've just seen the pipelines, and with the new lenders, most of them are on the C&I side. Again, Well, I didn't mention before some of the complexities are a lot of these are lines and it depends on what the utilization is and as they ramp up. So even some of these that we've booked in the past, the utilization is going to start to rise and help contribute. So it may already actually be on our books. So I think what I would say is We'll see a little bit from every one of the verticals, but I think the CNI is probably going to be the biggest growth driver over the next quarter.

Yeah, and Jackson, I probably should have mentioned that this next securitization that we're working on is actually out of the commercial portfolio, which will be a first for us.

Great, thanks. And then just one other question, kind of how should we be thinking about loan and deposit betas for this upcoming cycle?

That is a good question.

You know, we certainly consider ourselves to be slightly asset sensitive. But, you know, in saying that our cost of funds has not gone up nearly as much as market rates. I mean, I think most people view us as as being more sensitive to deposit costs, but market rates are up 50 to 100 basis points depending on where you look, and ours were certainly up far less than that. So, I mean, some of our accounts are going to be very dependent on market rates, and the betas are going to be close to 100%, but overall in the portfolio, We're managing for the margin, and even though ours may be higher than normal or higher than average, we see the same thing on the asset side. We're managing towards the margin and think it'll be up in the fourth quarter, and whether rates continue going up or not, we're confident about a higher margin for the fourth quarter.

I think we've worked well to position ourselves to be a little agnostic on the rate moves. We were prepared whether they went down or up. And sometimes for us, just movement actually helps. I think if you look at our history, we've been very adept at working our portfolio when there are changes. And I think this is going to be the same, that for us, The market rate's moving is just opportunities to us readjust our portfolio some, and I think we're going to be less impacted than most banks out there.

Thanks, guys. Appreciate all the coming. Thank you.

Thank you. This concludes the question and answer session, and I'd like to turn the call back over to Bart Caraway for closing remarks.

Well, thank you, Joe, and thank you for everybody joining us on the call in your continued support of Third Coast Bancshares. We look forward to reporting back next quarter. Thank you all. Have a good day.

Thank you. This does conclude today's conference. You may disconnect your lines at this time and enjoy the rest of your day.