Third Coast Bancshares to acquire Keystone Bancshares in $123M transaction

Third Coast Bancshares (TCBX) and Keystone Bancshares jointly announced the signing of a definitive merger agreement pursuant to which Third Coast will acquire Keystone in a stock and cash transaction valued at approximately $123M based on Third Coast’s closing stock price as of October 21. Once the transaction is completed, the combined company will have pro forma total assets in excess of $6B. Pursuant to the terms of the merger agreement, the combined company will operate under the Third Coast name and brand. Keystone Bank, headquartered in Austin, Texas, operates two branches in the Austin market, one branch in Ballinger, Texas, and one loan production office in Bastrop, Texas. Under the terms of the merger agreement, at the closing of the transaction, Keystone’s shareholders will receive, for each outstanding share of Keystone common stock, either 0.45925 shares of Third Coast common stock or an amount of cash equal to 0.45925 multiplied by the volume-weighted average price per share of Third Coast common stock for the 20 trading day period set forth in the merger agreement, at the election of Keystone’s shareholders. The exchange ratio is subject to a possible downward adjustment in the event Keystone’s adjusted shareholders’ equity is less than $94,576,000 as of the calculation date, as defined in the merger agreement. Keystone’s shareholders will be permitted to elect the form of consideration, provided that the aggregate cash consideration will not exceed $20M. In the event that Keystone’s shareholders elect to receive aggregate cash consideration in an amount greater than $20M, the distribution of the cash consideration will be prorated among such shareholders. Based upon the closing price of Third Coast common stock of $39.17 on October 21 and assuming that the aggregate cash consideration is $20M, the transaction is valued at approximately $123M or $17.99 per Keystone common share. The transaction has been approved unanimously by each company’s board of directors and is expected to close during the first quarter of 2026, and is subject to customary closing conditions, including the receipt of required regulatory approvals, the approval of Keystone’s shareholders of the merger agreement and the merger, and the approval of Third Coast’s shareholders of the issuance of Third Coast common stock pursuant to the merger agreement.