ATLANTA--(BUSINESS WIRE)--April 20, 2026--
CoastalSouth Bancshares, Inc. ("CoastalSouth" or the "Company") (NYSE: COSO), the holding company for Coastal States Bank (the "Bank" or "CSB"), today reported net income of $6.3 million, or $0.51 per diluted share, for the first quarter of 2026, compared to approximately $7.1 million, or $0.58 per diluted share, for the fourth quarter of 2025, and $5.1 million, or $0.47 per diluted share, for the first quarter of 2025.
Additionally, on April 17, 2026 the Board of Directors of CoastalSouth Bancshares, Inc. declared a per share quarterly dividend of $0.05. The dividend will be paid in cash to all shareholders with outstanding shares as of the close of business on May 14, 2026, the record date. The dividend shall be paid on May 28, 2026.
Commenting on the Company's results, President and Chief Executive Officer, Stephen R. Stone stated, "We started strong in 2026 by growing $117.9 million in core deposits(1) during the first quarter. Our core deposit growth has allowed us to reduce alternative funding sources and will provide liquidity for continued loan growth. We were pleased to see core deposit growth across all of our markets. We also produced $166.7 million in loans held for investment in the first quarter and our loan pipeline continued to grow, particularly with the addition of new commercial bankers across the franchise."
First Quarter 2026 Performance Highlights:
-- Net income of $6.3 million or $0.51 per diluted share
-- Return on average assets ("ROAA") of 1.10%
-- Return on average equity ("ROAE") of 9.71%; Return on average tangible
common equity1 ("ROATCE") of 9.90%
-- Net interest margin of 3.59%, a decrease of 1 basis point from the
fourth quarter of 2025
-- Total deposits increased $69.5 million, driven by growth of $117.9
million in core deposits1 and a decrease in brokered certificates of
deposits of $48.4 million
-- Loans held for investment ("LHFI") production2 of $166.7 million during
the first quarter of 2026 led to LHFI growth of $9.9 million, up 2.5%
annualized from the fourth quarter of 2025
-- Book value per share growth of $0.28, or 5.24% annualized, to $21.94 at
March 31, 2026; Tangible book value1 per share growth of $0.27, or 5.15%
annualized, to $21.52 at March 31, 2026 from the fourth quarter of 2025
-- Total shareholders' equity to total assets of 11.20%, compared to
11.25% as of the fourth quarter of 2025; Tangible common equity1 to
tangible assets1 of 11.01%, compared to 11.06% at December 31, 2025
-- Net charge-offs to average loans held for investment of 0.01%
-- Nonperforming assets to total assets of 0.77%; adjusted nonperforming
assets to total assets1 of 0.62%
-- Allowance for credit losses ("ACL") on LHFI to total LHFI of 1.16%; ACL
on LHFI to nonperforming loans of 103.54%
Operating Highlights
Net interest income totaled $19.7 million for the first quarter of 2026, a decrease of approximately $119 thousand, or 0.6%, from $19.9 million for the fourth quarter of 2025, and an increase of approximately $3.0 million, or 17.8% from the first quarter of 2025. The Company's net interest margin decreased by 1 basis point to 3.59% for the first quarter of 2026, compared to 3.60% for the fourth quarter of 2025, and increased 21 basis points from the first quarter of 2025.
The yield on average interest-earning assets for the first quarter of 2026 decreased to 5.92% from 5.98% for the fourth quarter of 2025. This decrease was primarily related to an overall yield decrease in interest-earning assets, primarily federal funds sold, loans held for sale, and investment securities due to recent interest rate cuts, notwithstanding significant growth in average total earning assets. Compared to the first quarter of 2025, yields on earning assets decreased 13 basis points to 5.92% from 6.05%. The decrease was primarily attributable to the aforementioned interest rate cuts during 2025.
The Company's total cost of funds was 2.55% for the first quarter of 2026, a decrease of 5 basis points and 30 basis points compared with the fourth and first quarters of 2025, respectively. Deposit costs decreased 5 and 26 basis points during the first quarter of 2026 to 2.54%, compared to 2.59% and 2.80% in the fourth and first quarters of 2025, respectively. The cost of interest-bearing deposits decreased 8 basis points during the first quarter of 2026 to 3.01%, compared with 3.09% in the fourth quarter of 2025, reflecting continued repricing of certificates of deposits in the first quarter of 2026.
Noninterest income totaled $2.0 million for the first quarter of 2026, a decrease of $328 thousand, or 14.3%, from the fourth quarter of 2025, primarily attributable to a decrease in gain on sale of government guaranteed loans ("GGL"), net of other categories within noninterest income. Noninterest expense totaled $13.0 million for the first quarter of 2026, an increase of $782 thousand, or 6.4%, from the fourth quarter of 2025. This increase was primarily due to higher salaries and employee benefits, other professional services, and other noninterest expense. The Company continues to focus on organic growth and expansion through banker recruiting across the franchise.
The Company's effective tax rate for the first quarter of 2026 was 23.6%, compared to 18.3% for the fourth quarter of 2025, and 23.4% for the first quarter of 2025. The increase in effective tax rate from the fourth quarter of 2025 was primarily due to a lower recognition of benefits from tax credits in the first quarter of 2026.
Balance Sheet Trends
Total assets were $2.35 billion at March 31, 2026, an increase of approximately $42.0 million, or 1.8%, from $2.31 billion at December 31, 2025. Loans held for sale ("LHFS") were $202.6 million at March 31, 2026, an increase of $31.7 million, or 18.5%, from $170.9 million at December 31, 2025. Gross LHFI were $1.63 billion at March 31, 2026, an increase of approximately $9.9 million, or 0.6%, from $1.62 billion at December 31, 2025.
Total deposits were $2.06 billion at March 31, 2026, an increase of $69.5 million, or 3.5%, from $1.99 billion at December 31, 2025. Noninterest-bearing deposits were $311.1 million at March 31, 2026, or 15.1% of total deposits, compared to $312.3 million, or 15.7% of total deposits, at December 31, 2025. Brokered certificates of deposit, a component of time deposits, were $258.6 million at March 31, 2026, as compared to $307.0 million at December 31, 2025, a decrease of $48.4 million, or 15.8%.
Credit Quality
During the first quarter of 2026, the Company recorded a provision for credit losses of $382 thousand, compared to $1.2 million and $629 thousand during the fourth and first quarters of 2025, respectively. The provision expense recorded during the first quarter of 2026 was due to loan production and mix and economic factors, offset with other changes in loss rates. The Company's annualized net charge-offs to average LHFI ratio was 0.01% for the first quarter of 2026 as compared to 0.00% and 0.00% during the fourth and first quarters of 2025, respectively.
Nonperforming assets totaled $18.2 million, or 0.77% of total assets, at March 31, 2026 compared to $18.3 million, or 0.79% of total assets at December 31, 2025. The $123 thousand decrease in nonperforming assets at March 31, 2026 from December 31, 2025 was primarily due to payments on nonaccrual assets, offset with additions to nonaccrual assets. Adjusted nonperforming assets(3) , which excludes the guaranteed portions of nonaccrual loans, was $14.5 million, or 0.62% of total assets, at March 31, 2026 compared to $14.2 million, or 0.62% of total assets, at December 31, 2025.
About CoastalSouth Bancshares, Inc.
CoastalSouth Bancshares, Inc. is a bank holding company headquartered in Atlanta, Georgia. Through our wholly owned subsidiary, Coastal States Bank, a South Carolina state-chartered commercial bank, we offer a full range of banking products and services designed for businesses, real estate professionals, and consumers looking for a deep and meaningful relationship with their bank. To learn more about Coastal States Bank, visit www.coastalstatesbank.com.
_________________________
1 Considered non-GAAP financial measure - See "Non-GAAP Financial Measures"
and reconciliation of GAAP to non-GAAP financial measures in tables 9A -
9E.
2 The Company defines production as original loan commitment amount, which
includes both funded and unfunded balances. As of March 31, 2026 these
loans had funded balances of $99.5 million and unfunded commitments of
$59.9 million.
3 Considered non-GAAP financial measure - See "Non-GAAP Financial Measures"
and reconciliation of GAAP to non-GAAP financial measures in tables 9A -
9E.
Forward-Looking Statements
Statements in this press release regarding future events and our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets, constitute "forward-looking statements" within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not historical in nature and may be identified by references to a future period or periods by the use of the words "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "outlook," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could, " or "may." The forward-looking statements in this press release should not be relied on because they are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of known and unknown risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and
uncertainties, and other factors, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this press release and could cause us to make changes to our future plans.
Factors that might cause such differences include, but are not limited to: the impact of current and future economic conditions, particularly those affecting the financial services industry, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing; potential impacts of any adverse developments in the banking industry, including any impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; changes in the interest rate environment, including changes to the federal funds rate; changes in prices, values and sales volumes of residential and commercial real estate; competition in our markets that may result in increased funding costs or reduced earning assets yields, thus reducing margins and net interest income; interest rate fluctuations, which could have an adverse effect on the Company's profitability; a breach in security of our information systems, including the occurrence of a cyber-attack incidents or a deficiencies in cyber security; risks related to potential acquisitions; government actions or inactions, including a prolonged shutdown of the federal government, tariffs, or trade wars (including reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains, and decreased demand for other banking products and services), legislation or regulatory changes which could adversely affect the ability of the consolidated Company to conduct business combinations or new operations; changes in tax laws; significant turbulence or a disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities; the effects of war or other conflicts, domestic civil unrest and tyranny, and changes in the overall geopolitical landscape; and adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company's participation in and execution of government programs. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized.
Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in the section titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in the Company's 2025 Annual Report on Form 10-K under the Securities Act of 1933, as amended, filed with the Securities and Exchange Commission (the "SEC") on March 12, 2026, and in other documents that we file with the SEC from time to time, which are available on the SEC's website, http://www.sec.gov.
In addition, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release or to make predictions based solely on historical financial performance.
Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, express or implied, included in this press release are qualified in their entirety by this cautionary statement.
Financial Highlights (unaudited) Table 1A
------------------------------------- ---------- ---------- ---------- ----------
As of and for the Three Months Ended
--------------------------------------------------------------
December September
March 31, 31, 30, June 30, March 31,
(dollars in thousands
except per share
amounts) 2026 2025 2025 2025 2025
----------------------- ---------- ---------- ---------- ---------- ----------
Selected Operating
Data:
Interest income $ 32,568 $ 33,006 $ 32,890 $ 31,793 $ 30,024
Interest expense 12,824 13,143 13,700 13,715 13,265
Net interest income 19,744 19,863 19,190 18,078 16,759
Provision for credit
losses 382 1,162 653 752 629
Noninterest income 1,967 2,295 2,100 1,795 1,881
Noninterest expense 13,044 12,262 11,856 12,092 11,419
Income tax expense 1,956 1,598 2,040 1,064 1,542
Net income 6,329 7,136 6,741 5,965 5,050
Share and Per Share
Data:
Basic earnings per
share $ 0.53 $ 0.60 $ 0.57 $ 0.58 $ 0.49
Diluted earnings per
share $ 0.51 $ 0.58 $ 0.54 $ 0.57 $ 0.47
Book value per share $ 21.94 $ 21.66 $ 20.91 $ 20.37 $ 19.67
Tangible book value
per share (1) $ 21.52 $ 21.25 $ 20.49 $ 19.88 $ 19.17
Shares of common stock
outstanding 11,985,414 11,980,412 11,978,921 10,278,921 10,274,271
Weighted average
diluted shares
outstanding 12,440,809 12,387,619 12,325,462 10,612,255 10,642,078
Selected Balance Sheet
Data:
Total assets $ 2,348,547 $ 2,306,586 $ 2,255,389 $ 2,221,245 $ 2,190,391
Securities
available-for-sale,
at fair value (2) 347,533 330,503 334,955 331,760 325,478
Gross loans held for
investment 1,627,261 1,617,315 1,552,976 1,527,199 1,472,232
Loans held for sale 202,615 170,933 231,593 209,101 187,481
Allowance for credit
losses 18,826 18,743 18,028 17,497 17,104
Goodwill and other
intangible assets 6,243 6,262 6,186 6,190 6,199
Total deposits 2,057,144 1,987,684 1,949,672 1,968,301 1,937,693
Core deposits (1) 1,798,553 1,680,650 1,654,764 1,660,409 1,650,358
Other borrowings - 30,000 25,000 14,753 20,738
Total Shareholders'
equity 262,923 259,529 250,438 209,365 202,104
(1) Considered non-GAAP financial measure - See "Non-GAAP Financial
Measures" and reconciliation of GAAP to non-GAAP financial measures in
tables 9A - 9E.
(2) The Company did not have securities held to maturity in any of the
periods presented.
Table
Financial Highlights - continued (unaudited) 1B
--------------------------------------------------- --------- ------ ------
As of and for the Three Months Ended
------------------------------------------------------------------
March December September June March
31, 31, 30, 30, 31,
(dollars in thousands) 2026 2025 2025 2025 2025
----------------------- ------ ----------- --------- ------ ------
Performance Ratios:
Pre-tax, pre-provision
net revenue (PPNR)
(1) $ 8,667 $ 9,896 $ 9,434 $ 7,781 $ 7,221
Return on average
assets (ROAA) (2) 1.10 % 1.24 % 1.20 % 1.09 % 0.97 %
Return on average
equity (2) 9.71 11.02 10.84 11.62 10.25
Return on average
tangible common
equity (ROATCE)
(1)(2) 9.90 11.24 11.07 11.92 10.52
Net interest rate
spread (2) 2.90 2.87 2.83 2.76 2.67
Net interest margin
(2) 3.59 3.60 3.58 3.46 3.38
Efficiency ratio 60.08 55.34 55.69 60.85 61.26
Noninterest income to
average total assets
(2) 0.34 0.40 0.37 0.33 0.36
Noninterest expense to
average total assets
(2) 2.27 2.13 2.11 2.21 2.19
Average
interest-earning
assets to average
interest-bearing
liabilities 129.61 130.41 129.16 126.50 126.31
Average equity to
average total assets 11.34 11.22 11.08 9.37 9.46
Asset Quality Data:
Net charge-offs to
average LHFI (2) 0.01 % 0.00 % 0.03 % 0.06 % 0.00 %
Net charge-offs to
total average loans
(2) 0.01 0.00 0.03 0.05 0.00
Total allowance for
credit losses to
total LHFI 1.16 1.16 1.16 1.15 1.16
Total allowance for
credit losses to
total loans 1.03 1.05 1.01 1.01 1.03
Total allowance for
credit losses to
nonperforming loans 103.54 102.39 127.03 118.99 117.11
Nonperforming loans to
gross LHFI 1.12 1.13 0.91 0.96 0.99
Nonperforming assets
to total assets 0.77 0.79 0.63 0.66 0.70
Adjusted nonperforming
assets to total
assets (1) 0.62 0.62 0.43 0.46 0.49
Balance Sheet and
Capital Ratios:
Loan-to-deposit ratio 88.95 % 89.97 % 91.53 % 88.21 % 85.65 %
Noninterest-bearing
deposits to total
deposits 15.12 15.71 16.08 15.92 15.52
Total shareholders'
equity to total
assets 11.20 11.25 11.10 9.43 9.23
Tangible common equity
to tangible assets
(1) 11.01 11.06 10.91 9.22 9.01
Tier 1 leverage ratio
(3) 11.21 11.18 11.15 10.22 10.62
Common equity tier 1
ratio (3) 12.19 12.30 11.94 11.09 11.55
Tier 1 risk-based
capital ratio (3) 12.19 12.30 11.94 11.09 11.55
Total risk-based
capital ratio (3) 13.25 13.31 12.90 12.04 12.52
Other:
Number of branches 11 11 11 11 11
Number of full-time
equivalent employees 201 196 194 188 180
(1) Considered non-GAAP financial measure - See "Non-GAAP Financial
Measures" and reconciliation of GAAP to non-GAAP financial measures in
tables 9A - 9E.
(2) Represents annualized data.
(3) Ratios are for Coastal States Bank only. Ratios for March 31, 2026 are
preliminary.
Quarter End Balance
Sheets (unaudited) Table 2
------------------------ ---------- ---------- ---------- ---------- ----------
December September
March 31, 31, 30, June 30, March 31,
(dollars in thousands) 2026 2025 2025 2025 2025
------------------------ ---------- ---------- ---------- ---------- ----------
Assets
Cash and due from banks $ 22,546 $ 41,538 $ 20,088 $ 23,245 $ 19,380
Federal funds sold 40,011 38,229 6,191 20,045 79,153
Investment securities
(1) 355,014 339,262 342,990 338,601 332,312
Loans held for sale
(LHFS) 202,615 170,933 231,593 209,101 187,481
Loans held for
investment (LHFI) 1,627,261 1,617,315 1,552,976 1,527,199 1,472,232
Allowance for credit
losses on LHFI (18,826) (18,743) (18,028) (17,497) (17,104)
--------- --------- --------- --------- ---------
Loans held for
investment, net 1,608,435 1,598,572 1,534,948 1,509,702 1,455,128
Bank-owned life
insurance 48,752 48,296 47,833 47,373 46,924
Premises, furniture and
equipment, net 18,810 18,122 18,186 18,166 17,837
Deferred tax asset 16,910 16,370 16,262 17,211 17,123
Goodwill & intangible
assets (2) 6,243 6,262 6,186 6,190 6,199
Other assets 29,211 29,002 31,112 31,611 28,854
--------- --------- --------- --------- ---------
Total assets $2,348,547 $2,306,586 $2,255,389 $2,221,245 $2,190,391
========= ========= ========= ========= =========
Liabilities and
shareholders' equity
Liabilities
Deposits
Noninterest-bearing
transaction
accounts $ 311,054 $ 312,251 $ 313,604 $ 313,386 $ 300,678
Interest-bearing
transaction
accounts 235,422 214,620 198,753 209,816 191,452
Savings and money
market 775,962 673,609 634,826 628,729 650,050
Time deposits 734,706 787,204 802,489 816,370 795,513
--------- --------- --------- --------- ---------
Total deposits 2,057,144 1,987,684 1,949,672 1,968,301 1,937,693
Federal Home Loan Bank
of Atlanta advances - 30,000 25,000 - -
Subordinated debt, net - - - 14,753 14,741
Revolving commercial
line of credit, net - - - - 5,997
Other liabilities 28,480 29,373 30,279 28,826 29,856
--------- --------- --------- --------- ---------
Total liabilities 2,085,624 2,047,057 2,004,951 2,011,880 1,988,287
Shareholders' equity
Voting common stock 11,853 10,868 10,449 8,107 8,102
Nonvoting common stock 132 1,112 1,530 2,172 2,172
Capital surplus 190,160 189,882 189,654 159,267 158,997
Accumulated income 72,602 66,886 59,750 53,009 47,044
Accumulated other
comprehensive loss (11,824) (9,219) (10,945) (13,190) (14,211)
--------- --------- --------- --------- ---------
Total shareholders'
equity 262,923 259,529 250,438 209,365 202,104
Total liabilities
and shareholders'
equity $2,348,547 $2,306,586 $2,255,389 $2,221,245 $2,190,391
========= ========= ========= ========= =========
(1) No ACL on investment securities was recognized for the periods
presented; includes securities available-for-sale and non-marketable
equity securities.
(2) Includes commercial mortgage servicing rights of $1.3 million, $1.3
million, $1.2 million, $1.1 million, and $1.1 million at March 31, 2026,
December 31, 2025, September 30, 2025, June 30, 2025 and March 31, 2025,
respectively.
Statements of
Operations (unaudited) Table 3
----------------------- ------- --------- ---------- ------- -------
Three Months Ended
-------------------------------------------------
March December September June March
31, 31, 30, 30, 31,
(dollars in thousands) 2026 2025 2025 2025 2025
----------------------- ------- --------- ---------- ------- -------
Interest income
Interest on cash and
due from banks $ 125 $ 109 $ 129 $ 111 $ 135
Interest on federal
funds sold 792 624 616 698 963
Interest and dividends
on investment
securities 3,611 3,734 4,125 3,875 3,800
Interest and fees on
LHFS 2,915 3,771 3,422 3,296 2,819
Interest and fees on
LHFI 25,125 24,768 24,598 23,813 22,307
------ -------- --------- ------ ------
Total interest
income 32,568 33,006 32,890 31,793 30,024
------ -------- --------- ------ ------
Interest expense
Deposits 12,592 12,925 13,274 13,251 12,830
Other borrowings 232 218 426 464 435
------ -------- --------- ------ ------
Total interest
expense 12,824 13,143 13,700 13,715 13,265
------ -------- --------- ------ ------
Net interest income 19,744 19,863 19,190 18,078 16,759
Provision for credit
losses 382 1,162 653 752 629
------ -------- --------- ------ ------
Net interest income
after provision for
credit losses 19,362 18,701 18,537 17,326 16,130
------ -------- --------- ------ ------
Noninterest income
Mortgage banking
related income 394 330 299 326 221
Interchange and card
fee income 273 230 238 257 266
Service charges on
deposit accounts 232 256 208 215 211
Bank-owned life
insurance 456 462 461 449 440
Gain on sale of
government guaranteed
loans 337 682 613 265 -
Losses on sale of
available-for-sale
securities - - (10) - -
Other noninterest
income 275 335 291 283 743
------ -------- --------- ------ ------
Total noninterest
income 1,967 2,295 2,100 1,795 1,881
Noninterest expense
Salaries and employee
benefits 8,046 7,644 6,985 6,997 6,694
Occupancy and equipment 886 864 850 814 788
Data processing 655 640 647 653 624
Other professional
services 595 391 571 973 693
Software and other
technology expense 826 808 788 719 703
Regulatory assessment 371 369 419 344 361
Other noninterest
expense 1,665 1,546 1,596 1,592 1,556
------ -------- --------- ------ ------
Total noninterest
expense 13,044 12,262 11,856 12,092 11,419
Net income before taxes 8,285 8,734 8,781 7,029 6,592
Income tax expense 1,956 1,598 2,040 1,064 1,542
Net income $ 6,329 $ 7,136 $ 6,741 $ 5,965 $ 5,050
====== ======== ========= ====== ======
QTD Average Balances and Yields/Rates (unaudited) Table 4
-------------------------------------------------- ------ ---------- ---------- ------ ---------- ------------------
Three Months Ended
---------------------------------------------------------------------------------------------------------
March 31, 2026 December 31, 2025 March 31, 2025
------------------------------- ------------------------------- -------------------------------
Average Yield/ Average Yield/ Average Yield/
(dollars in thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate
------------------------ ---------- ---------- ------ ---------- ---------- ------ ---------- ---------- ------
Earning assets:
Cash and due from banks $ 24,822 $ 125 2.04% $ 21,271 $ 109 2.03% $ 22,725 $ 135 2.41%
Federal funds sold 85,959 792 3.74% 62,215 624 3.98% 88,478 963 4.41%
Investment securities 343,772 3,611 4.26% 340,416 3,734 4.35% 335,254 3,800 4.60%
Loans held for sale 158,597 2,915 7.45% 198,119 3,771 7.55% 136,849 2,819 8.35%
Loans held for
investment 1,618,301 25,125 6.30% 1,567,471 24,768 6.27% 1,428,405 22,307 6.33%
--------- ------ ------ --------- ------ ------ --------- ------ ------
Total earning assets 2,231,451 32,568 5.92% 2,189,492 33,006 5.98% 2,011,711 30,024 6.05%
Noninterest-earning
assets:
Allowance for credit
losses on LHFI (18,746) (18,034) (17,116)
Bank-owned life
insurance 48,487 48,038 46,672
Premises, furniture and
equipment, net 18,458 18,160 17,851
Deferred tax asset 16,173 15,841 17,803
Goodwill & intangible
assets 6,270 6,166 6,328
Other assets 27,365 28,695 27,947
--------- --------- ---------
Total
noninterest-earning
assets 98,007 98,866 99,485
--------- --------- ---------
Total assets $2,329,458 $2,288,358 $2,111,196
========= ========= =========
Interest-bearing
liabilities:
Interest-bearing deposits $1,697,024 $ 12,592 3.01% $1,658,037 $ 12,925 3.09% $1,566,856 $ 12,830 3.32%
Federal funds purchased - - 0.00% 8 - 0.00% - - 0.00%
Federal Home Loan Bank of
Atlanta advances 24,667 232 3.81% 20,924 218 4.13% 1,166 13 4.52%
Revolving commercial line
of credit, net - - 0.00% - - 0.00% 9,863 187 7.69%
Subordinated debt, net - - 0.00% - - 0.00% 14,735 235 6.47%
--------- ------ ------ --------- ------ ------ --------- ------ ------
Total interest-bearing
liabilities 1,721,691 12,824 3.02% 1,678,969 13,143 3.11% 1,592,620 13,265 3.38%
Noninterest-bearing
liabilities:
Noninterest-bearing
deposits 315,023 323,687 293,387
Other liabilities 28,512 28,888 25,426
--------- --------- ---------
Total
noninterest-bearing
liabilities 343,535 352,575 318,813
Shareholders' equity 264,232 256,814 199,763
--------- --------- ---------
Total liabilities and
shareholders'
equity $2,329,458 $2,288,358 $2,111,196
========= ---------- ========= ---------- ========= ----------
Net interest income $ 19,744 $ 19,863 $ 16,759
====== ------ ====== ------ ====== ------
Net interest spread 2.90% 2.87% 2.67%
------ ------ ------
Net interest margin 3.59% 3.60% 3.38%
------ ------ ------
Cost of total deposits
(1) 2.54% 2.59% 2.80%
Cost of total funding (1) 2.55% 2.60% 2.85%
(1) Includes noninterest-bearing deposits.
Loan Data (unaudited) Table 5
----------------------- ---------- ----- ---------- -------- ---------- --------- ---------- ----- -----------------
As of the Quarter Ended
--------------------------------------------------------------------------------------------------------------------
March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025
----------------- -------------------- --------------------- ----------------- -----------------
% of % of % of % of % of
(dollars in thousands) Amount Total Amount Total Amount Total Amount Total Amount Total
---------- ----- ---------- -------- ---------- --------- ---------- ----- ---------- -----
Loans held for
investment ("LHFI"):
Commercial Loans
Acquisition,
development and
construction $ 130,398 8.0% $ 119,352 7.4% $ 106,787 6.9% $ 100,528 6.6% $ 76,453 5.2%
Income producing
CRE 376,260 23.1 378,179 23.4 371,670 23.9 372,142 24.4 352,693 24.0
Owner-occupied CRE 107,344 6.6 92,787 5.7 96,287 6.2 91,147 6.0 90,204 6.1
Senior housing 254,445 15.6 259,529 16.1 223,719 14.4 236,474 15.5 245,292 16.7
Commercial and
industrial 138,964 8.5 145,380 9.0 135,039 8.7 131,716 8.6 145,784 9.8
Retail Loans
Marine vessels 307,746 18.9 312,096 19.3 318,246 20.5 301,327 19.7 284,305 19.3
Residential
mortgages 202,503 12.4 199,991 12.4 190,220 12.3 185,527 12.1 176,794 12.1
Cash value life
insurance LOC 86,610 5.3 87,172 5.4 90,115 5.8 87,135 5.7 80,503 5.5
Other consumer 22,991 1.4 22,829 1.4 20,893 1.4 21,203 1.4 20,204 1.4
--------- ----- --------- -------- --------- --------- --------- ----- --------- -----
Gross loans held for
investment $1,627,261 100.0% $1,617,315 100.0% $1,552,976 100.0% $1,527,199 100.0% $1,472,232 100.0%
--------- --------- --------- --------- ---------
Core LHFI 1,573,972 1,561,791 1,492,992 1,464,200 1,406,199
Acquired LHFI (1) 53,289 55,524 59,984 62,999 66,033
--------- --------- --------- --------- ---------
Gross loans held for
investment $1,627,261 $1,617,315 $1,552,976 $1,527,199 $1,472,232
--------- --------- --------- --------- ---------
Allowance for
credit losses on
LHFI 18,826 18,743 18,028 17,497 17,104
--------- --------- --------- --------- ---------
Net loans held for
investment $1,608,435 $1,598,572 $1,534,948 $1,509,702 $1,455,128
Total loans
held-for-sale 202,615 170,933 231,593 209,101 187,481
--------- --------- --------- --------- ---------
Total loans $1,829,876 $1,788,248 $1,784,569 $1,736,300 $1,659,713
========= ========= ========= ========= =========
(1) Includes loans acquired through business combinations.
Nonperforming Assets (unaudited) Table 6
---------------------------------------------------------------------------- -------
As of the Quarter Ended
----------------------------------------------------------------
March June March
31, December September 30, 31,
(dollars in thousands) 2026 31, 2025 30, 2025 2025 2025
----------------------- ------- --------- ---------- ------- -------
Nonaccrual loans $18,183 $ 18,306 $ 14,171 $14,611 $14,599
Past due loans 90
days and still
accruing - - 21 93 6
------ -------- --------- ------ ------
Total nonperforming
loans $18,183 $ 18,306 $ 14,192 $14,704 $14,605
Other real estate
owned - - - - 765
------ -------- --------- ------ ------
Total
nonperforming
assets $18,183 $ 18,306 $ 14,192 $14,704 $15,370
====== ======== ========= ====== ======
Nonperforming loans
to gross LHFI 1.12% 1.13% 0.91% 0.96% 0.99%
Nonaccrual loans to
total assets 0.77% 0.79% 0.63% 0.66% 0.67%
Nonperforming assets
to total assets 0.77% 0.79% 0.63% 0.66% 0.70%
Allowance for Credit Losses (unaudited) Table 7
------------------------------------------------------------- ---------- ---------- ----------
As of and for the Three Months Ended
---------------------------------------------------------------------------
December September
March 31, 31, 30, June 30, March 31,
(dollars in thousands) 2026 2025 2025 2025 2025
------------------------------- ---------- ----------- ---------- ---------- ----------
Allowance for credit losses on
LHFI
Balance, beginning of period $ 18,743 $ 18,028 $ 17,497 $ 17,104 $ 17,118
Net charge-offs/(recoveries):
Commercial Loans
Commercial and industrial (6) (4) (29) 19 1
Retail Loans
Marine vessels - - 162 - -
Residential mortgages - (29) (2) (2) (2)
Other consumer 47 20 (6) 191 16
--------- ---------- --------- --------- ---------
Total net
charge-offs/(recoveries) $ 41 $ (13) $ 125 $ 208 $ 15
--------- ---------- --------- --------- ---------
Provision for loan credit losses 124 702 656 601 1
--------- ---------- --------- --------- ---------
Balance, ending of period $ 18,826 $ 18,743 $ 18,028 $ 17,497 $ 17,104
--------- ---------- --------- --------- ---------
Allowance for credit losses for
unfunded commitments
Period beginning balance $ 3,956 $ 3,496 $ 3,499 $ 3,348 $ 2,720
Provision (recovery) for credit
losses 258 460 (3) 151 628
--------- ---------- --------- --------- ---------
Period ending balance $ 4,214 $ 3,956 $ 3,496 $ 3,499 $ 3,348
--------- ---------- --------- --------- ---------
Balance, end of period -
Allowance for credit losses:
LHFI and unfunded commitments $ 23,040 $ 22,699 $ 21,524 $ 20,996 $ 20,452
========= ========== ========= ========= =========
Total loans held for investment $1,627,261 $ 1,617,315 $1,552,976 $1,527,199 $1,472,232
Credit Analysis
Net charge-offs to average
LHFI 0.01% 0.00% 0.03% 0.06% 0.00%
Total allowance for credit
losses on LHFI to total LHFI 1.16% 1.16% 1.16% 1.15% 1.16%
Total allowance for credit
losses on LHFI to nonaccrual
loans 103.54% 102.39% 127.22% 119.75% 117.16%
Total allowance for credit
losses on LHFI to total
nonperforming loans 103.54% 102.39% 127.03% 118.99% 117.11%
Loan Risk Ratings (1)
(2) (unaudited) Table 8
----------------------- ---------- ---------- ---------- ---------- ----------
As of the Quarter Ended
----------------------------------------------------------
March 31, December September June 30, March 31,
(dollars in thousands) 2026 31, 2025 30, 2025 2025 2025
----------------------- ---------- ---------- ---------- ---------- ----------
Acquisition,
development and
construction (1)
Pass $ 130,398 $ 119,352 $ 106,787 $ 100,528 $ 76,453
Special mention - - - - -
Substandard - - - - -
--------- --------- --------- --------- ---------
Total acquisition,
development and
construction $ 130,398 $ 119,352 $ 106,787 $ 100,528 $ 76,453
========= ========= ========= ========= =========
Income producing CRE
(1)
Pass $ 375,791 $ 377,711 $ 370,788 $ 371,255 $ 352,281
Special mention - - - - -
Substandard 469 468 882 887 412
--------- --------- --------- --------- ---------
Total income
producing CRE $ 376,260 $ 378,179 $ 371,670 $ 372,142 $ 352,693
========= ========= ========= ========= =========
Owner-occupied CRE (1)
Pass $ 97,706 $ 82,959 $ 86,533 $ 81,244 $ 83,711
Special mention 2,509 2,739 3,579 3,612 -
Substandard 7,129 7,089 6,175 6,291 6,493
--------- --------- --------- --------- ---------
Total
owner-occupied
CRE $ 107,344 $ 92,787 $ 96,287 $ 91,147 $ 90,204
========= ========= ========= ========= =========
Senior housing (1)
Pass $ 239,788 $ 236,816 $ 205,330 $ 217,971 $ 208,922
Special mention 3,940 11,934 12,006 12,078 24,814
Substandard 10,717 10,779 6,383 6,425 11,556
--------- --------- --------- --------- ---------
Total senior
housing $ 254,445 $ 259,529 $ 223,719 $ 236,474 $ 245,292
========= ========= ========= ========= =========
Commercial and
industrial (1)
Pass $ 135,295 $ 141,020 $ 128,468 $ 124,979 $ 141,202
Special mention 141 212 2,402 2,199 -
Substandard 3,528 4,148 4,169 4,538 4,582
--------- --------- --------- --------- ---------
Total commercial
and industrial $ 138,964 $ 145,380 $ 135,039 $ 131,716 $ 145,784
========= ========= ========= ========= =========
Marine vessels (2)
Performing $ 307,746 $ 312,096 $ 318,246 $ 301,327 $ 284,305
Nonperforming - - - - -
--------- --------- --------- --------- ---------
Total marine
vessels $ 307,746 $ 312,096 $ 318,246 $ 301,327 $ 284,305
========= ========= ========= ========= =========
Residential mortgages
(2)
Performing $ 202,114 $ 199,601 $ 190,059 $ 185,162 $ 176,633
Nonperforming 389 390 161 365 161
--------- --------- --------- --------- ---------
Total residential
mortgages $ 202,503 $ 199,991 $ 190,220 $ 185,527 $ 176,794
========= ========= ========= ========= =========
Cash value life
insurance LOC (2)
Performing $ 86,610 $ 87,172 $ 90,115 $ 87,135 $ 80,503
Nonperforming - - - - -
--------- --------- --------- --------- ---------
Total cash value
life insurance
LOC $ 86,610 $ 87,172 $ 90,115 $ 87,135 $ 80,503
========= ========= ========= ========= =========
Other consumer (2)
Performing $ 22,991 $ 22,829 $ 20,872 $ 21,203 $ 20,204
Nonperforming - - 21 - -
--------- --------- --------- --------- ---------
Total other
consumer $ 22,991 $ 22,829 $ 20,893 $ 21,203 $ 20,204
========= ========= ========= ========= =========
Gross loans held for
investment $1,627,261 $1,617,315 $1,552,976 $1,527,199 $1,472,232
========= ========= ========= ========= =========
(1) There were no commercial loans classified as doubtful.
(2) Retail loans are classified as either performing or nonperforming.
Non-GAAP Financial Measures
The measures entitled return on average tangible common shareholders' equity, tangible book value per common share, tangible common equity, tangible assets, adjusted nonperforming assets to total assets, adjusted nonperforming assets, pre-tax, pre-provision net revenue ("PPNR"), tangible common equity to tangible assets and core deposits are not measures recognized under accounting principles generally accepted in the United States of America ("GAAP") and therefore are considered non-GAAP financial measures. The most comparable GAAP measures to these measures are return on average shareholders' equity, book value per share, total shareholders' equity, total assets, total nonperforming assets to total assets, total nonperforming assets, net income, total common equity to total assets, and total deposits, respectively.
Management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures permit investors to view the Company's performance using the same tools that management uses to evaluate the Company's past performance and prospects for future performance. While management believes that these non-GAAP financial measures are useful in evaluating our performance, this information should be considered as supplemental and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures should be considered as additional views of the way the Company's financial measures are affected by significant items and other factors, and since they are not required to be uniformly applied, they may not be comparable to other similarly titled measures at other companies.
COASTALSOUTH BANCSHARES, INC. AND SUBSIDIARY
FINANCIAL TABLES
Non-GAAP Reconciliations
Tangible Book Value per Share / Tangible Common Equity to Tangible
Assets (unaudited) Table 9A
------------------------------------------------------------------------ ----------- -----------
As of
--------------------------------------------------------------------------------
December September
March 31, 31, 30, June 30, March 31,
(dollars in thousands,
except per share data) 2026 2025 2025 2025 2025
----------------------- ----------- ----------- ------------ ----------- -----------
Tangible Common Equity:
Total shareholders'
equity $ 262,923 $ 259,529 $ 250,438 $ 209,365 $ 202,104
Less: Goodwill and
intangibles (6,243) (6,262) (6,186) (6,191) (6,199)
Adjusted for:
Mortgage servicing
rights 1,280 1,266 1,156 1,122 1,093
---------- ---------- ----------- ---------- ----------
Tangible Common Equity $ 257,960 $ 254,533 $ 245,408 $ 204,296 $ 196,998
Common shares
outstanding 11,985,414 11,980,412 11,978,921 10,278,921 10,274,271
Book value per common
share 21.94 21.66 20.91 20.37 19.67
Tangible book value
per common share 21.52 21.25 20.49 19.88 19.17
Tangible assets:
Total assets $ 2,348,547 $ 2,306,586 $ 2,255,389 $ 2,221,245 $ 2,190,391
Less: Goodwill and
intangibles (6,243) (6,262) (6,186) (6,191) (6,199)
Adjusted for:
Mortgage servicing
rights 1,280 1,266 1,156 1,122 1,093
---------- ---------- ----------- ---------- ----------
Tangible assets $ 2,343,584 $ 2,301,590 $ 2,250,359 $ 2,216,176 $ 2,185,285
Tangible common equity
to tangible assets 11.01% 11.06% 10.91% 9.22% 9.01%
ROATCE (unaudited) Table 9B
---------------------------------- --------- ---------- -------- --------
As of and for the Three Months Ended
-------------------------------------------------------------------
March December September March
31, 31, 30, June 30, 31,
(dollars in thousands) 2026 2025 2025 2025 2025
-------- --------- ---------- -------- --------
Net income $ 6,329 $ 7,136 $ 6,741 $ 5,965 $ 5,050
Average shareholders'
equity 264,232 256,814 246,688 205,837 199,763
Return on average
shareholders' equity
(1) 9.71% 11.02% 10.84% 11.62% 10.25%
Average Tangible Common
Equity:
Average shareholders'
equity $264,232 $ 256,814 $ 246,688 $205,837 $199,763
Less: Average goodwill
and intangibles (6,270) (6,166) (6,176) (6,168) (6,328)
Adjusted for: Average
mortgage servicing
rights 1,291 1,155 1,128 1,082 1,198
------- -------- --------- ------- -------
Average tangible common
equity $259,253 $ 251,803 $ 241,640 $200,751 $194,633
Return on average
tangible common (1)
shareholders' equity 9.90% 11.24% 11.07% 11.92% 10.52%
(1) Represents annualized data.
Adjusted Nonperforming Assets to Total Assets
(unaudited) Table 9C
----------------------------------------------------- ---------- ---------- ----------
As of
---------------------------------------------------------------------------
December September
March 31, 31, 30, June 30, March 31,
(dollars in thousands) 2026 2025 2025 2025 2025
----------------------- ---------- ----------- ---------- ---------- ----------
Total nonperforming
assets $ 18,183 $ 18,306 $ 14,192 $ 14,704 $ 15,370
Total assets 2,348,547 2,306,586 2,255,389 2,221,245 2,190,391
GAAP-based
nonperforming assets
to total assets 0.77% 0.79% 0.63% 0.66% 0.70%
Total nonperforming
assets $ 18,183 $ 18,306 $ 14,192 $ 14,704 $ 15,370
Adjusted for:
Guaranteed portions
of nonaccrual
loans 3,657 4,089 4,457 4,583 4,692
--------- ---------- --------- --------- ---------
Adjusted total
nonperforming assets $ 14,526 $ 14,217 $ 9,735 $ 10,121 $ 10,678
Total assets $2,348,547 $ 2,306,586 $2,255,389 $2,221,245 $2,190,391
Adjusted nonperforming
assets to total
assets 0.62% 0.62% 0.43% 0.46% 0.49%
Table
PPNR (unaudited) 9D
----------------------------------- --------- ---------- ------ ------
As of and for the Three Months Ended
------------------------------------------------
December September June March
March 31, 31, 30, 30, 31,
(dollars in thousands) 2026 2025 2025 2025 2025
----------------------- --------- --------- ---------- ------ ------
Net income (GAAP-based) $ 6,329 $ 7,136 $ 6,741 $5,965 $5,050
Plus:
Income tax expense 1,956 1,598 2,040 1,064 1,542
Provision for credit
losses 382 1,162 653 752 629
-------- -------- --------- ----- -----
Pre-tax, pre-provision
net revenue $ 8,667 $ 9,896 $ 9,434 $7,781 $7,221
======== ======== ========= ===== =====
Core Deposits (unaudited) Table 9E
------------------------------------ ---------- ---------- ---------- ----------
As of
----------------------------------------------------------
December September
March 31, 31, 30, June 30, March 31,
(dollars in thousands) 2026 2025 2025 2025 2025
---------- ---------- ---------- ---------- ----------
Total Deposits $2,057,144 $1,987,684 $1,949,672 $1,968,301 $1,937,693
Less:
Brokered CDs 258,591 307,034 294,908 307,892 287,335
--------- --------- --------- --------- ---------
Core deposits (1) $1,798,553 $1,680,650 $1,654,764 $1,660,409 $1,650,358
========= ========= ========= ========= =========
(1) The Company defines its core deposits as total deposits, less brokered
certificates of deposit.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260420651504/en/
CONTACT: Stephen R. Stone
President and Chief Executive Officer
Anthony P. Valduga
Chief Financial Officer / Chief Operating Officer
678-396-4605
investorrelations@coastalstatesbank.com
(END) Dow Jones Newswires
April 20, 2026 16:00 ET (20:00 GMT)