Under the Company's Certification of Formation, the Company is authorized to issue 1,000,000 shares of preferred stock, par value $1.00 per share. On September 30, 2022, the Company adopted resolutions creating Series A Convertible Non-Cumulative Preferred Stock and Series B Convertible Perpetual Preferred Stock, with 69,400 shares authorized for each series.

On September 30, 2022, the Company completed a private placement of (i) 69,400 shares of a new series of preferred stock designated Series A Convertible Non-Cumulative Preferred Stock, par value $1.00 per share, with a liquidation preference of $1,000 per share (the “Series A Preferred Stock”), and (ii) the Preferred Warrants at an exercise price equal to $22.50 per share, for aggregate gross proceeds of $69.4 million before deducting placement fees and offering expenses. Aggregate net proceeds were $66.2 million after deducting placement fees and offering expenses of $3.2 million.

The securities sold in the private placement were sold only to accredited investors and were issued without registration under the Securities Act, in reliance upon the exemption provided under Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder as securities offered and sold only to accredited investors (as defined in Rule 501(a) of Regulation D under the Securities Act) in a transaction not involving any public offering. Officers and directors of the Company purchased $2.7 million of the Series A Preferred Stock.

The Company and Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory (and possibly additional discretionary) actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of the Company and Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios (set forth in the table below) of total, Tier I capital, and Common Equity Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as defined). Management believes, as of March 31, 2023, the Company and Bank and, as of December 31, 2022, the Bank meet all capital adequacy requirements to which it is subject.

Financial institutions are categorized as well capitalized or adequately capitalized, based on minimum total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the tables below. As shown below, the Bank’s capital ratios exceed the regulatory definition of well capitalized as of March 31, 2023 and December 31, 2022. Based upon the information in its most recently filed call report, the Bank continues to meet the capital ratios necessary to be well capitalized under the regulatory framework for prompt corrective action.

There are no conditions or events since March 31, 2023, that management believes have changed the Bank’s category.

A comparison of actual capital amounts and ratios to required capital amounts and ratios for the Company and Bank are presented in the following table. The Company began reporting ratios beginning March 31, 2023 in accordance with the regulatory framework. Capital levels required to be well capitalized are based upon prompt corrective action regulations, as amended, to reflect the changes under the Basel III Capital Rules.


	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount			Ratio
THIRD COAST BANCSHARES, INC.
(Consolidated)
As of March 31, 2023:
Total capital (to risk weighted assets)		486,350		12.6	%	≥	404,431	≥	10.5	%		N/A			N/A
Tier I capital (to risk weighted assets)		370,036		9.6	%	≥	327,396	≥	8.5	%		N/A			N/A
Tier I capital (to average assets)		370,036		10.1	%	≥	146,022	≥	4.0	%		N/A			N/A
Common equity tier 1 (to risk weighted assets)		303,811		7.9	%	≥	269,620	≥	7.0	%		N/A			N/A

THIRD COAST BANK, SSB
As of March 31, 2023:
Total capital (to risk weighted assets)		509,870		13.3	%	≥	403,975	≥	10.5	%	≥		384,738	≥		10.0	%
Tier I capital (to risk weighted assets)		473,954		12.3	%	≥	327,027	≥	8.5	%	≥		307,790	≥		8.0	%
Tier I capital (to average assets)		473,954		13.0	%	≥	145,862	≥	4.0	%	≥		182,328	≥		5.0	%
Common equity tier 1 (to risk weighted assets)		473,954		12.3	%	≥	269,317	≥	7.0	%	≥		250,080	≥		6.5	%
As of December 31, 2022:
Total capital (to risk weighted assets)		496,222		13.8	%	≥	377,782	≥	10.5	%	≥		359,793	≥		10.0	%
Tier I capital (to risk weighted assets)		465,871		12.9	%	≥	305,824	≥	8.5	%	≥		287,834	≥		8.0	%
Tier I capital (to average assets)		465,871		13.1	%	≥	142,188	≥	4.0	%	≥		177,734	≥		5.0	%
Common equity tier 1 (to risk weighted assets)		465,871		12.9	%	≥	251,855	≥	7.0	%	≥		233,865	≥		6.5	%