HUMBLE, Texas, Sept. 8, 2022 /PRNewswire/ -- Third Coast Bancshares, Inc. (NASDAQ: TCBX), ("Third Coast" or the "Company"), the holding company for Third Coast Bank, SSB (the "Bank"), today announced that it has entered into an investment agreement with Castle Creek Capital Partners VIII, LP ("Castle Creek") and certain other accredited investors (collectively, the "Investors"), pursuant to which the Company expects to raise aggregate gross proceeds of $69.4 million through the issuance of non-cumulative convertible preferred stock. The Company expects to close the offering, subject to customary closing conditions, on September 22, 2022. A representative from Castle Creek will immediately join the Board of Directors of the Company and the Bank following the closing of the transaction.
"We are extremely pleased with the success of this transaction and appreciate the support that Castle Creek and the other accredited investors have shown for our team and business plan. We look forward to the partnership and operating expertise that comes with a Castle Creek investment," said Bart O. Caraway, Third Coast's Chairman, President and Chief Executive Officer. "This additional capital will position Third Coast Bank to execute on attractive growth opportunities in the future, and continue capitalizing on the talent dislocation in our markets. Further, we remain committed to driving toward industry leading profitability and expect the unlocking of latent value in the coming quarters through investments already made in people, technology, and our community."*
"These uncertain times call for extra thorough due diligence prior to investment and we couldn't be more pleased with the results," said Tony Scavuzzo, Managing Principal at Castle Creek. "The most important decision we can make as investors is partnering with a management team that has a shared vision of the future."
The Series A Preferred Stock will have a non-cumulative dividend rate on the liquidation preference of the preferred stock of 6.75% and will be convertible into the Company's common stock, par value $1.00 per share ("Common Stock"), at an initial conversion price of $22.50 per share, subject to an ownership cap with respect to each Investor of 9.9% of the total outstanding shares of Common Stock. Thereafter, the Series A Preferred Stock will be convertible into a new series of the Company's non-voting preferred stock, to be designated as Series B Convertible Perpetual Preferred Stock, par value $1.00 per share, and, following approval by the Company's shareholders, non-voting common stock, par value $1.00 per share, of the Company. The Company also agreed to issue to Castle Creek and certain other investors an aggregate of 175,000 warrants ("Warrants") to purchase Common Stock in connection with the offering.
Piper Sandler & Co. is serving as the Company's sole placement agent for the offering. Norton Rose Fulbright US LLP is serving as legal counsel for the Company, Fenimore Kay Harrison LLP is serving as legal counsel for Piper Sandler & Co., and Sidley Austin LLP is serving as legal counsel for Castle Creek.
About Third Coast Bancshares, Inc.
Third Coast Bancshares, Inc. is a commercially focused, Texas-based bank holding company operating primarily in the Greater Houston, Dallas-Fort Worth, and Austin-San Antonio markets through its wholly owned subsidiary, Third Coast Bank, SSB. Founded in 2008 in Humble, Texas, Third Coast Bank, SSB conducts banking operations through 14 branches and one loan production office encompassing the four largest metropolitan areas in Texas. Please visit https://www.tcbssb.com for more information.
*The statement quoted above was made by an executive of a Castle Creek portfolio company.
The portfolio company executive has not received compensation for the above statement and this statement is solely his opinion and representative of his experience with Castle Creek. Other portfolio company executives may not necessarily share the same view. An executive in a Castle Creek portfolio company may have an incentive to make a statement that portrays Castle Creek in a positive light as a result of the executive's ongoing relationship with Castle Creek and any influence that Castle Creek may have or had over the governance of the portfolio company and the compensation of its executives. It should not be assumed that Castle Creek's investment in the referenced portfolio company has been or will ultimately be profitable.