CoastalSouth Bancshares, Inc. Reports Earnings for Second Quarter 2026

(Neutral)

Key Terms

roaa financial

Return on Average Assets (ROAA) measures how efficiently a company turns its assets into profit by dividing net profit over a period by the average total assets it held during that period. It matters to investors because it shows whether a business is getting a good return from what it owns—like judging a car’s fuel efficiency by miles per gallon—helping compare profitability across companies of different sizes.

roae financial

ROAE stands for Return on Average Equity, a profitability ratio that shows how much net income a company generates for its owners relative to the average amount of shareholder equity invested over a period. It’s like measuring the interest rate a business pays its owners on the capital they’ve left in the company, with the ‘average’ smoothing out swings in equity during the year. Investors use ROAE to compare how efficiently different companies turn owner capital into profits and to assess management’s ability to deliver returns over time.

roatce financial

Return on Average Tangible Common Equity (ROATCE) measures how much profit a company generates from the average amount of its core, tangible shareholder capital—excluding items like goodwill and other intangibles—over a period. Investors use it like a fuel-efficiency gauge for a business: it shows how effectively the company's real, hard capital is being turned into earnings, helping compare profitability across firms or track whether returns on investor capital are improving or slipping.

lhfi financial

Loans held for investment (LHFI) are loans that a bank or lender keeps on its balance sheet with the intention of collecting interest and principal over time, rather than selling them to other investors. For investors, LHFI shows how much credit risk and future interest income the institution is carrying—similar to owning a portfolio of mortgages or business loans that will generate cash flows and may be affected by defaults and changing interest rates.

allowance for credit losses financial

Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google

07/20/2026 - 04:15 PM

ATLANTA--(BUSINESS WIRE)-- 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 $7.3 million, or $0.59 per diluted share, for the second quarter of 2026, compared to approximately $6.3 million, or $0.51 per diluted share, for the first quarter of 2026, and $6.0 million, or $0.57 per diluted share, for the second quarter of 2025. For the six months ended June 30, 2026, the Company reported net income of $13.7 million, or $1.10 per diluted share, compared with $11.0 million, or $1.04 per diluted share, for the same period in 2025.

Additionally, on July 20, 2026 the Board of Directors of CoastalSouth Bancshares, Inc. declared a per share quarterly dividend of $0.05. The dividend will be paid to shareholders of record as of the close of business on August 13, 2026, the record date. The dividend shall be paid on August 27, 2026.

Commenting on the Company’s second quarter performance, President and Chief Executive Officer Stephen R. Stone stated, "We saw outstanding loan production² of $181.6 million during the second quarter, driving a $78.1 million increase in loans held for investment, or 19.3% annualized. The majority of production in the second quarter continued to come from the community bank with each region, including our new Charleston team, providing meaningful contributions. We are pleased to have achieved this growth while expanding our net interest margin and maintaining low net charge-offs. We continue to see opportunities to invest in new CSB team members across our footprint particularly as a result of recent M&A activity. We are pleased with our financial results and we look forward to building upon this performance in the second half of the year."

Second Quarter 2026 Performance Highlights:

Net income of $7.3 million or $0.59 per diluted share
Return on average assets ("ROAA") of 1.24%
Return on average equity ("ROAE") of 11.02%; Return on average tangible common equity¹ ("ROATCE") of 11.23%
Net interest margin of 3.66%, an increase of 7 basis points from the first quarter of 2026
Total deposits decreased $9.5 million, principally driven by a decrease of $4.8 million in core deposits¹ and a decrease in brokered certificates of deposit of $4.7 million
Loans held for investment ("LHFI") production² of $181.6 million during the second quarter of 2026 led to LHFI growth of $78.1 million, up 19.3% annualized from the first quarter of 2026
Book value per share growth of $0.53, or 9.69% annualized, to $22.47 at June 30, 2026; Tangible book value¹per common share growth of $0.54, or 10.06% annualized, to $22.06 at June 30, 2026 from the first quarter of 2026
Total shareholders' equity to total assets of 11.14%, compared to 11.20% as of the first quarter of 2026; Tangible common equity¹ to tangible assets¹ of 10.96%, compared to 11.01% as of March 31, 2026
Net charge-offs to average loans held for investment of 0.01%
Nonperforming assets to total assets of 0.76%; adjusted nonperforming assets to total assets¹ of 0.61%
Allowance for credit losses ("ACL") on LHFI to total LHFI of 1.16%; ACL on LHFI to nonperforming loans of 108.16%
Share repurchase program launched May 1, 2026; 48,491 shares repurchased during the second quarter of 2026 with weighted-average price per share of $25.48.

___________________________________________
¹	Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of GAAP to non-GAAP financial measures in tables 10A - 10E.
²	The Company defines production as original loan commitment amount, which includes both funded and unfunded balances at the time of origination. As of June 30, 2026, these loans had funded balances of $126.0 million and unfunded commitments of $53.9 million.

Operating Highlights

Net interest income totaled $20.7 million for the second quarter of 2026, an increase of $921 thousand, or 4.7%, from $19.7 million for the first quarter of 2026, and an increase of $2.6 million, or 14.3% from the second quarter of 2025. The Company’s net interest margin increased by 7 basis points to 3.66% for the second quarter of 2026, compared to 3.59% for the first quarter of 2026, and increased 20 basis points from the second quarter of 2025.

The yield on average interest-earning assets for the second quarter of 2026 increased to 5.94% from 5.92% for the first quarter of 2026. This increase was primarily related to an overall yield increase in average interest-earning assets, principally investment securities; offset by a decrease in yield in LHFI. Compared to the second quarter of 2025, yields on earning assets decreased 14 basis points to 5.94% from 6.08%. The decrease was primarily attributable to interest rate cuts during 2025, notwithstanding a $169.0 million growth in average total earning assets.

The Company’s total cost of funds was 2.50% for the second quarter of 2026, a decrease of 5 basis points compared to the first quarter of 2026, and 30 basis points compared to the second quarter of 2025. Deposit costs were 2.48% for the second quarter of 2026, compared to 2.54% for the first quarter of 2026, a decrease of 6 basis points, and 2.75% for the second quarter of 2025, a decrease of 27 basis points. The cost of interest-bearing deposits decreased 6 basis points during the second quarter of 2026 to 2.95%, compared with 3.01% in the first quarter of 2026, reflecting continued repricing of certificates of deposits during the second quarter of 2026.

Noninterest income totaled $2.2 million for the second quarter of 2026, an increase of $235 thousand, or 12.0%, from the first quarter of 2026, primarily attributable to gain on sale of other loans, coupled with a net increase in other categories within noninterest income. Noninterest expense totaled $13.4 million for the second quarter of 2026, an increase of $330 thousand, or 2.5%, from the first quarter of 2026. This increase was primarily due to higher salaries and employee benefits, coupled with a net increase in other noninterest expense categories, principally in other professional services, software and other technology expense, and other noninterest expense; offset by a decrease in regulatory assessment 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 second quarter of 2026 was 17.0%, compared to 23.6% for the first quarter of 2026, and 15.1% for the second quarter of 2025. The decrease in effective tax rate from the first quarter of 2026 was primarily due to a higher recognition of benefits from tax credits during the second quarter of 2026.

Balance Sheet Trends

Total assets were $2.42 billion at June 30, 2026, an increase of approximately $114.4 million, or 5.0%, from $2.31 billion at December 31, 2025. Loans held for sale ("LHFS") were $223.1 million at June 30, 2026, an increase of $52.2 million, or 30.5%, from $170.9 million at December 31, 2025. Gross LHFI were $1.71 billion at June 30, 2026, an increase of approximately $88.1 million, or 5.4%, from $1.62 billion at December 31, 2025.

Total deposits were $2.05 billion at June 30, 2026, an increase of $60.0 million, or 3.0%, from $1.99 billion at December 31, 2025. Noninterest-bearing deposits were $355.9 million at June 30, 2026, or 17.4% 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 $253.9 million at June 30, 2026, as compared to $307.0 million at December 31, 2025, a decrease of $53.1 million, or 17.3%.

Credit Quality

During the second quarter of 2026, the Company recorded a provision for credit losses of $658 thousand, compared to $382 thousand and $752 thousand during the first quarter of 2026 and the second quarter of 2025, respectively. The provision expense recorded during the second quarter of 2026 was due to loan production and updated collateral values on individually reviewed loans, offset with other changes in loss rates. The Company's annualized net charge-offs to average LHFI ratio was 0.01% for the second quarter of 2026 as compared to 0.01% and 0.06% during the first quarter of 2026 and the second quarter of 2025, respectively.

Nonperforming assets totaled $18.3 million, or 0.76% of total assets, at June 30, 2026 compared to $18.3 million, or 0.79% of total assets at December 31, 2025. Adjusted nonperforming assets³, which excludes the guaranteed portions of nonaccrual loans, was $14.8 million, or 0.61% of total assets, at June 30, 2026 compared to $14.2 million, or 0.62% of total assets, at December 31, 2025.

___________________________________________
³	Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of GAAP to non-GAAP financial measures in tables 10A - 10E.

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.

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 cyber-attack incidents or 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.




COASTALSOUTH BANCSHARES, INC. AND SUBSIDIARY FINANCIAL TABLES

Financial Highlights (unaudited)																				Table 1A
		As of and for the Three Months Ended														As of and for the Six Months Ended
(dollars in thousands		June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
except per share amounts)		2026			2026			2025			2025			2025			2026			2025
Selected Operating Data:
Interest income	$		33,558	$		32,568	$		33,006	$		32,890	$		31,793	$		66,126	$		61,817
Interest expense			12,893			12,824			13,143			13,700			13,715			25,717			26,980
Net interest income			20,665			19,744			19,863			19,190			18,078			40,409			34,837
Provision for credit losses			658			382			1,162			653			752			1,040			1,381
Noninterest income			2,202			1,967			2,295			2,100			1,795			4,169			3,676
Noninterest expense			13,374			13,044			12,262			11,856			12,092			26,418			23,511
Income tax expense			1,502			1,956			1,598			2,040			1,064			3,458			2,606
Net income			7,333			6,329			7,136			6,741			5,965			13,662			11,015
Share and Per Share Data:
Basic earnings per share	$		0.61	$		0.53	$		0.60	$		0.57	$		0.58	$		1.14	$		1.07
Diluted earnings per share	$		0.59	$		0.51	$		0.58	$		0.54	$		0.57	$		1.10	$		1.04
Dividends per share	$		0.05	$		0.05	$	n/a		$	n/a		$	n/a		$		0.10	$	n/a
Book value per share	$		22.47	$		21.94	$		21.66	$		20.91	$		20.37	$		22.47	$		20.37
Tangible book value per common share ⁽¹⁾	$		22.06	$		21.52	$		21.25	$		20.49	$		19.88	$		22.06	$		19.88
Shares of common stock outstanding			12,003,040			11,985,414			11,980,412			11,978,921			10,278,921			12,003,040			10,278,921
Weighted average diluted shares outstanding			12,447,791			12,440,809			12,387,619			12,325,462			10,612,255			12,444,884			10,636,997
Selected Balance Sheet Data:
Total assets	$		2,420,993	$		2,348,547	$		2,306,586	$		2,255,389	$		2,221,245	$		2,420,993	$		2,221,245
Securities available-for-sale, at fair value ⁽²⁾			348,582			347,533			330,503			334,955			331,760			348,582			331,760
Gross loans held for investment			1,705,370			1,627,261			1,617,315			1,552,976			1,527,199			1,705,370			1,527,199
Loans held for sale			223,112			202,615			170,933			231,593			209,101			223,112			209,101
Allowance for credit losses			19,817			18,826			18,743			18,028			17,497			19,817			17,497
Goodwill and other intangible assets			6,246			6,243			6,262			6,186			6,190			6,246			6,190
Total deposits			2,047,671			2,057,144			1,987,684			1,949,672			1,968,301			2,047,671			1,968,301
Core deposits ⁽¹⁾			1,793,743			1,798,553			1,680,650			1,654,764			1,660,409			1,793,743			1,660,409
Other borrowings			75,000			-			30,000			25,000			14,753			75,000			14,753
Total Shareholders' equity			269,703			262,923			259,529			250,438			209,365			269,703			209,365

⁽¹⁾	Considered non-GAAP financial measure - See "Non-GAAP Financial Measures” and reconciliation of GAAP to non-GAAP financial measures in tables 10A - 10E.
⁽²⁾	The Company did not have securities held to maturity in any of the periods presented.





Financial Highlights - continued (unaudited)																					Table 1B
		As of and for the Three Months Ended																			As of and for the Six Months Ended
		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
(dollars in thousands)		2026				2026				2025				2025				2025				2026				2025
Performance Ratios:
Pre-tax, pre-provision net revenue (PPNR) ⁽¹⁾	$		9,493		$		8,667		$		9,896		$		9,434		$		7,781		$		18,160		$		15,002
Return on average assets (ROAA) ⁽²⁾			1.24	%			1.10	%			1.24	%			1.20	%			1.09	%			1.17	%			1.03	%
Return on average equity ⁽²⁾			11.02				9.71				11.02				10.84				11.62				10.37				10.95
Return on average tangible common equity (ROATCE) ⁽¹⁾⁽²⁾			11.23				9.90				11.24				11.07				11.92				10.57				11.23
Dividend payout ratio			8.33				9.69			n/a				n/a				n/a					8.96			n/a
Net interest rate spread ⁽²⁾			2.97				2.90				2.87				2.83				2.76				2.93				2.72
Net interest margin ⁽²⁾			3.66				3.59				3.60				3.58				3.46				3.62				3.42
Efficiency ratio			58.49				60.08				55.34				55.69				60.85				59.26				61.05
Noninterest income to average total assets ⁽²⁾			0.37				0.34				0.40				0.37				0.33				0.36				0.34
Noninterest expense to average total assets ⁽²⁾			2.27				2.27				2.13				2.11				2.21				2.27				2.20
Average interest-earning assets to average interest-bearing liabilities			130.15				129.61				130.41				129.16				126.50				129.88				126.41
Average equity to average total assets			11.29				11.34				11.22				11.08				9.37				11.32				9.41
Asset Quality Data:
Net charge-offs to average LHFI ⁽²⁾			0.01	%			0.01	%			0.00	%			0.03	%			0.06	%			0.01	%			0.03	%
Net charge-offs to total average loans ⁽²⁾			0.01				0.01				0.00				0.03				0.05				0.01				0.03
Total allowance for credit losses to total LHFI			1.16				1.16				1.16				1.16				1.15				1.16				1.15
Total allowance for credit losses to total loans			1.03				1.03				1.05				1.01				1.01				1.03				1.01
Total allowance for credit losses to nonperforming loans			108.16				103.54				102.39				127.03				118.99				108.16				118.99
Nonperforming loans to gross LHFI			1.07				1.12				1.13				0.91				0.96				1.07				0.96
Nonperforming assets to total assets			0.76				0.77				0.79				0.63				0.66				0.76				0.66
Adjusted nonperforming assets to total assets ⁽¹⁾			0.61				0.62				0.62				0.43				0.46				0.61				0.46
Balance Sheet and Capital Ratios:
Loan-to-deposit ratio			94.18	%			88.95	%			89.97	%			91.53	%			88.21	%			94.18	%			88.21	%
Noninterest-bearing deposits to total deposits			17.38				15.12				15.71				16.08				15.92				17.38				15.92
Total shareholders' equity to total assets			11.14				11.20				11.25				11.10				9.43				11.14				9.43
Tangible common equity to tangible assets ⁽¹⁾			10.96				11.01				11.06				10.91				9.22				10.96				9.22
Tier 1 leverage ratio ⁽³⁾			11.12				11.21				11.18				11.15				10.22				11.12				10.22
Common equity tier 1 ratio ⁽³⁾			12.30				12.19				12.30				11.94				11.09				12.30				11.09
Tier 1 risk-based capital ratio ⁽³⁾			12.30				12.19				12.30				11.94				11.09				12.30				11.09
Total risk-based capital ratio ⁽³⁾			13.39				13.25				13.31				12.90				12.04				13.39				12.04
Other:
Number of branches			11				11				11				11				11				11				11
Number of full-time equivalent employees			201				201				196				194				188				201				183

⁽¹⁾	Considered non-GAAP financial measure - See "Non-GAAP Financial Measures” and reconciliation of GAAP to non-GAAP financial measures in tables 10A - 10E.
⁽²⁾	Represents annualized data.
⁽³⁾	Ratios are for Coastal States Bank only. Ratios for June 30, 2026 are preliminary.





Quarter End Balance Sheets (unaudited)													Table 2
	June 30,			March 31,			December 31,			September 30,			June 30,
(dollars in thousands)	2026			2026			2025			2025			2025
Assets
Cash and due from banks	$	24,262		$	22,546		$	41,538		$	20,088		$	23,245
Federal funds sold		9,960			40,011			38,229			6,191			20,045
Investment securities ⁽¹⁾		359,635			355,014			339,262			342,990			338,601
Loans held for sale (LHFS)		223,112			202,615			170,933			231,593			209,101
Loans held for investment (LHFI)		1,705,370			1,627,261			1,617,315			1,552,976			1,527,199
Allowance for credit losses on LHFI		(19,817	)		(18,826	)		(18,743	)		(18,028	)		(17,497	)
Loans held for investment, net		1,685,553			1,608,435			1,598,572			1,534,948			1,509,702
Bank-owned life insurance		49,218			48,752			48,296			47,833			47,373
Premises, furniture and equipment, net		18,611			18,810			18,122			18,186			18,166
Deferred tax asset		15,740			16,910			16,370			16,262			17,211
Goodwill & intangible assets ⁽²⁾		6,246			6,243			6,262			6,186			6,190
Other assets		28,656			29,211			29,002			31,112			31,611
Total assets	$	2,420,993		$	2,348,547		$	2,306,586		$	2,255,389		$	2,221,245

Liabilities and shareholders' equity
Liabilities
Deposits
Noninterest-bearing transaction accounts	$	355,941		$	311,054		$	312,251		$	313,604		$	313,386
Interest-bearing transaction accounts		194,896			235,422			214,620			198,753			209,816
Savings and money market		772,809			775,962			673,609			634,826			628,729
Time deposits		724,025			734,706			787,204			802,489			816,370
Total deposits		2,047,671			2,057,144			1,987,684			1,949,672			1,968,301
Federal Home Loan Bank of Atlanta advances		75,000			-			30,000			25,000			-
Subordinated debt, net		-			-			-			-			14,753
Other liabilities		28,619			28,480			29,373			30,279			28,826
Total liabilities		2,151,290			2,085,624			2,047,057			2,004,951			2,011,880

Shareholders' equity
Voting common stock		12,003			11,853			10,868			10,449			8,107
Nonvoting common stock		-			132			1,112			1,530			2,172
Capital surplus		188,851			190,160			189,882			189,654			159,267
Accumulated income		79,324			72,602			66,886			59,750			53,009
Accumulated other comprehensive loss		(10,475	)		(11,824	)		(9,219	)		(10,945	)		(13,190	)
Total shareholders' equity		269,703			262,923			259,529			250,438			209,365

Total liabilities and shareholders' equity	$	2,420,993		$	2,348,547		$	2,306,586		$	2,255,389		$	2,221,245

⁽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 approximately $1.3 million, $1.3 million, $1.3 million, $1.2 million, and $1.1 million at June 30, 2026, March 31, 2026, December 31, 2025, September 30, 2025 and June 30, 2025, respectively.





Statements of Operations (unaudited)													Table 3
	Three Months Ended										Six Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
(dollars in thousands)	2026		2026		2025		2025		2025		2026		2025
Interest income
Interest on cash and due from banks	$	121	$	125	$	109	$	129	$	111	$	246	$	246
Interest on federal funds sold		409		792		624		616		698		1,201		1,661
Interest and dividends on investment securities		3,892		3,611		3,734		4,125		3,875		7,503		7,675
Interest and fees on LHFS		3,162		2,915		3,771		3,422		3,296		6,077		6,115
Interest and fees on LHFI		25,974		25,125		24,768		24,598		23,813		51,099		46,120
Total interest income		33,558		32,568		33,006		32,890		31,793		66,126		61,817

Interest expense
Deposits		12,545		12,592		12,925		13,274		13,251		25,137		26,081
Other borrowings		348		232		218		426		464		580		899
Total interest expense		12,893		12,824		13,143		13,700		13,715		25,717		26,980

Net interest income		20,665		19,744		19,863		19,190		18,078		40,409		34,837

Provision for credit losses		658		382		1,162		653		752		1,040		1,381
Net interest income after provision for credit losses		20,007		19,362		18,701		18,537		17,326		39,369		33,456

Noninterest income
Mortgage banking related income		403		394		330		299		326		797		547
Interchange and card fee income		256		273		230		238		257		529		523
Service charges on deposit accounts		236		232		256		208		215		468		426
Bank-owned life insurance		466		456		462		461		449		922		889
Gain on sale of government guaranteed loans		307		337		682		613		265		644		265
Other noninterest income		534		275		335		281		283		809		1,026
Total noninterest income		2,202		1,967		2,295		2,100		1,795		4,169		3,676

Noninterest expense
Salaries and employee benefits		8,314		8,046		7,644		6,985		6,997		16,360		13,691
Occupancy and equipment		875		886		864		850		814		1,761		1,602
Data processing		682		655		640		647		653		1,337		1,277
Other professional services		632		595		391		571		973		1,227		1,666
Software and other technology expense		861		826		808		788		719		1,687		1,422
Regulatory assessment		308		371		369		419		344		679		705
Other noninterest expense		1,702		1,665		1,546		1,596		1,592		3,367		3,148
Total noninterest expense		13,374		13,044		12,262		11,856		12,092		26,418		23,511

Net income before taxes		8,835		8,285		8,734		8,781		7,029		17,120		13,621
Income tax expense		1,502		1,956		1,598		2,040		1,064		3,458		2,606

Net income	$	7,333	$	6,329	$	7,136	$	6,741	$	5,965	$	13,662	$	11,015





QTD Average Balances and Yields/Rates (unaudited)																				Table 4
	Three Months Ended
	June 30, 2026								March 31, 2026								June 30, 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	$	23,889		$	121		2.03	%	$	24,822		$	125		2.04	%	$	20,762		$	111		2.14	%
Federal funds sold		44,172			409		3.71	%		85,959			792		3.74	%		62,656			698		4.47	%
Investment securities		358,658			3,892		4.35	%		343,772			3,611		4.26	%		338,635			3,875		4.59	%
Loans held for sale		170,135			3,162		7.45	%		158,597			2,915		7.45	%		167,617			3,296		7.89	%
Loans held for investment		1,668,045			25,974		6.25	%		1,618,301			25,125		6.30	%		1,506,211			23,813		6.34	%
Total earning assets		2,264,899			33,558		5.94	%		2,231,451			32,568		5.92	%		2,095,881			31,793		6.08	%
Noninterest-earning assets:
Allowance for credit losses on LHFI		(18,834	)							(18,746	)							(17,110	)
Bank-owned life insurance		48,944								48,487								47,119
Premises, furniture and equipment, net		18,760								18,458								18,034
Deferred tax asset		16,702								16,173								17,182
Goodwill & intangible assets		6,229								6,270								6,168
Other assets		27,734								27,365								29,442
Total noninterest-earning assets		99,535								98,007								100,835
Total assets	$	2,364,434							$	2,329,458							$	2,196,716

Interest-bearing liabilities:
Interest-bearing deposits	$	1,704,027		$	12,545		2.95	%	$	1,697,024		$	12,592		3.01	%	$	1,626,415		$	13,251		3.27	%
Federal funds purchased		-			-		0.00	%		-			-		0.00	%		38			1		10.56	%
Federal Home Loan Bank of Atlanta advances		36,209			348		3.85	%		24,667			232		3.81	%		10,000			116		4.65	%
Revolving commercial line of credit, net		-			-		0.00	%		-			-		0.00	%		5,667			112		7.93	%
Subordinated debt, net		-			-		0.00	%		-			-		0.00	%		14,747			235		6.39	%
Total interest-bearing liabilities		1,740,236			12,893		2.97	%		1,721,691			12,824		3.02	%		1,656,867			13,715		3.32	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits		328,644								315,023								306,330
Other liabilities		28,580								28,512								27,682
Total noninterest-bearing liabilities		357,224								343,535								334,012
Shareholders' equity		266,974								264,232								205,837
Total liabilities and shareholders' equity	$	2,364,434							$	2,329,458							$	2,196,716
Net interest income				$	20,665							$	19,744							$	18,078
Net interest spread							2.97	%							2.90	%							2.76	%
Net interest margin							3.66	%							3.59	%							3.46	%

Cost of total deposits ⁽¹⁾							2.48	%							2.54	%							2.75	%
Cost of total funding ⁽¹⁾							2.50	%							2.55	%							2.80	%

⁽¹⁾	Includes noninterest-bearing deposits.





YTD Average Balances and Yields/Rates (unaudited)														Table 5
	Six Months Ended
	June 30, 2026								June 30, 2025
	Average					Yield/			Average						Yield/
(dollars in thousands)	Balance			Interest		Rate			Balance			Interest			Rate

Earning assets:
Cash and due from banks	$	24,353		$	246		2.04	%	$	21,738		$	246			2.28	%
Federal funds sold		64,950			1,201		3.73	%		75,496			1,661			4.44	%
Investment securities		351,256			7,503		4.31	%		336,954			7,675			4.59	%
Loans held for sale		164,398			6,077		7.45	%		152,318			6,115			8.10	%
Loans held for investment		1,643,310			51,099		6.27	%		1,467,523			46,120			6.34	%
Total earning assets		2,248,267			66,126		5.93	%		2,054,029			61,817			6.07	%
Noninterest-earning assets:
Allowance for credit losses on LHFI		(18,790	)							(17,113	)
Bank-owned life insurance		48,717								46,897
Premises, furniture and equipment, net		18,610								17,943
Deferred tax asset		16,439								17,491
Goodwill & intangible assets		6,250								6,248
Other assets		27,501								29,582
Total noninterest-earning assets		98,727								101,048
Total assets	$	2,346,994							$	2,155,077

Interest-bearing liabilities:
Interest-bearing deposits	$	1,700,545		$	25,137		2.98	%	$	1,596,799		$	26,081			3.29	%
Federal funds purchased		-			-		0.00	%		19			1			10.61	%
Federal Home Loan Bank of Atlanta advances		30,470			580		3.84	%		5,607			128			4.60	%
Revolving commercial line of credit, net		-			-		0.00	%		7,754			300			7.80	%
Subordinated debt, net		-			-		0.00	%		14,741			470			6.43	%
Total interest-bearing liabilities		1,731,015			25,717		3.00	%		1,624,920			26,980			3.35	%
Noninterest-bearing liabilities:
Noninterest-bearing deposits		321,871								299,895
Other liabilities		28,497								27,445
Total noninterest-bearing liabilities		350,368								327,340
Shareholders' equity		265,611								202,817
Total liabilities and shareholders' equity	$	2,346,994							$	2,155,077

Net interest income				$	40,409							$	34,837
Net interest spread							2.93	%								2.72	%
Net interest margin							3.62	%								3.42	%

Cost of total deposits ⁽¹⁾							2.51	%								2.77	%
Cost of total funding⁽¹⁾							2.53	%								2.83	%

⁽¹⁾	Includes noninterest-bearing deposits.





Loan Data (unaudited)																					Table 6
	As of the Quarter Ended
	June 30, 2026					March 31, 2026					December 31, 2025					September 30, 2025					June 30, 2025
(dollars in thousands)	Amount		% of Total			Amount		% of Total			Amount		% of Total			Amount		% of Total			Amount		% of Total
Loans held for investment ("LHFI"):
Commercial Loans
Acquisition, development and construction	$	144,436		8.5	%	$	130,398		8.0	%	$	119,352		7.4	%	$	106,787		6.9	%	$	100,528		6.6	%
Income producing CRE		416,965		24.5			376,260		23.1			378,179		23.4			371,670		23.9			372,142		24.4
Owner-occupied CRE		127,285		7.5			107,344		6.6			92,787		5.7			96,287		6.2			91,147		6.0
Senior housing		248,282		14.5			254,445		15.6			259,529		16.0			223,719		14.4			236,474		15.5
Commercial and industrial		139,313		8.1			138,964		8.6			145,380		9.0			135,039		8.7			131,716		8.6
Retail Loans
Marine vessels		313,230		18.4			307,746		18.9			312,096		19.3			318,246		20.5			301,327		19.7
Residential mortgages		202,768		11.9			202,503		12.5			199,991		12.4			190,220		12.3			185,527		12.1
Cash value life insurance LOC		89,305		5.2			86,610		5.3			87,172		5.4			90,115		5.8			87,135		5.7
Other consumer		23,786		1.4			22,991		1.4			22,829		1.4			20,893		1.4			21,203		1.4
Gross loans held for investment	$	1,705,370		100.0	%	$	1,627,261		100.0	%	$	1,617,315		100.0	%	$	1,552,976		100.0	%	$	1,527,199		100.0	%
Core LHFI		1,657,581					1,573,972					1,561,791					1,492,992					1,464,200
Acquired LHFI ⁽¹⁾		47,789					53,289					55,524					59,984					62,999
Gross loans held for investment	$	1,705,370				$	1,627,261				$	1,617,315				$	1,552,976				$	1,527,199
Allowance for credit losses on LHFI		19,817					18,826					18,743					18,028					17,497
Net loans held for investment	$	1,685,553				$	1,608,435				$	1,598,572				$	1,534,948				$	1,509,702
Total loans held-for-sale		223,112					202,615					170,933					231,593					209,101
Total loans	$	1,928,482				$	1,829,876				$	1,788,248				$	1,784,569				$	1,736,300

⁽¹⁾	Includes loans acquired through business combinations.



Nonperforming Assets (unaudited)													Table 7
	As of the Quarter Ended
(dollars in thousands)	June 30, 2026			March 31, 2026			December 31, 2025			September 30, 2025				June 30, 2025
Nonaccrual loans	$	18,322		$	18,183		$	18,306		$	14,171			$	14,611
Past due loans 90 days and still accruing		-			-			-			21				93
Total nonperforming loans	$	18,322		$	18,183		$	18,306		$	14,192			$	14,704
Other real estate owned		-			-			-			-				-
Total nonperforming assets	$	18,322		$	18,183		$	18,306		$	14,192			$	14,704
Nonperforming loans to gross LHFI		1.07	%		1.12	%		1.13	%		0.91	%			0.96	%
Nonaccrual loans to total assets		0.76	%		0.77	%		0.79	%		0.63	%			0.66	%
Nonperforming assets to total assets		0.76	%		0.77	%		0.79	%		0.63	%			0.66	%





Allowance for Credit Losses (unaudited)																			Table 8
	As of and for the Three Months Ended															As of and for the Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
(dollars in thousands)	2026			2026			2025			2025			2025			2026			2025
Allowance for credit losses on LHFI
Balance, beginning of period	$	18,826		$	18,743		$	18,028		$	17,497		$	17,104		$	18,743		$	17,118
Net charge-offs/(recoveries):
Commercial Loans
Acquisition, development and construction		-			-			-			-			-			-			-
Income producing CRE		-			-			-			-			-			-			-
Owner-occupied CRE		-			-			-			-			-			-			-
Senior housing		-			-			-			-			-			-			-
Commercial and industrial		4			(6	)		(4	)		(29	)		19			(2	)		20
Retail Loans
Marine vessels		27			-			-			162			-			27			-
Residential mortgages		(2	)		-			(29	)		(2	)		(2	)		(2	)		(5	)
Cash value life insurance LOC		-			-			-			-			-			-			-
Other consumer		(4	)		47			20			(6	)		191			43			208
Total net charge-offs/(recoveries)	$	25		$	41		$	(13	)	$	125		$	208		$	66		$	223
Provision for loan credit losses		1,016			124			702			656			601			1,140			602
Balance, ending of period	$	19,817		$	18,826		$	18,743		$	18,028		$	17,497		$	19,817		$	17,497
Allowance for credit losses for unfunded commitments
Period beginning balance	$	4,214		$	3,956		$	3,496		$	3,499		$	3,348		$	3,956		$	2,720
Provision (recovery) for credit losses		(358	)		258			460			(3	)		151			(100	)		779
Period ending balance	$	3,856		$	4,214		$	3,956		$	3,496		$	3,499		$	3,856		$	3,499
Balance, end of period - Allowance for credit losses: LHFI and unfunded commitments	$	23,673		$	23,040		$	22,699		$	21,524		$	20,996		$	23,673		$	20,996
Total loans held for investment	$	1,705,370		$	1,627,261		$	1,617,315		$	1,552,976		$	1,527,199		$	1,705,370		$	1,527,199
Credit Analysis
Net charge-offs to average LHFI		0.01	%		0.01	%		0.00	%		0.03	%		0.06	%		0.01	%		0.03	%
Total allowance for credit losses on LHFI to total LHFI		1.16	%		1.16	%		1.16	%		1.16	%		1.15	%		1.16	%		1.15	%
Total allowance for credit losses on LHFI to nonaccrual loans		108.16	%		103.54	%		102.39	%		127.22	%		119.75	%		108.16	%		119.75	%
Total allowance for credit losses on LHFI to total nonperforming loans		108.16	%		103.54	%		102.39	%		127.03	%		118.99	%		108.16	%		118.99	%





Loan Risk Ratings ^{(1) (2)} (unaudited)									Table 9
	As of the Quarter Ended
(dollars in thousands)	June 30, 2026		March 31, 2026		December 31, 2025		September 30, 2025			June 30, 2025
Acquisition, development and construction ⁽¹⁾
Pass	$	144,436	$	130,398	$	119,352	$	106,787		$	100,528
Special mention		-		-		-		-			-
Substandard		-		-		-		-			-
Total acquisition, development and construction	$	144,436	$	130,398	$	119,352	$	106,787		$	100,528
Income producing CRE ⁽¹⁾
Pass	$	416,501	$	375,791	$	377,711	$	370,788		$	371,255
Special mention		-		-		-		-			-
Substandard		464		469		468		882			887
Total income producing CRE	$	416,965	$	376,260	$	378,179	$	371,670		$	372,142
Owner-occupied CRE ⁽¹⁾
Pass	$	116,429	$	97,706	$	82,959	$	86,533		$	81,244
Special mention		2,485		2,509		2,739		3,579			3,612
Substandard		8,371		7,129		7,089		6,175			6,291
Total owner-occupied CRE	$	127,285	$	107,344	$	92,787	$	96,287		$	91,147
Senior housing ⁽¹⁾
Pass	$	233,501	$	239,788	$	236,816	$	205,330		$	217,971
Special mention		-		3,940		11,934		12,006			12,078
Substandard		14,781		10,717		10,779		6,383			6,425
Total senior housing	$	248,282	$	254,445	$	259,529	$	223,719		$	236,474
Commercial and industrial ⁽¹⁾
Pass	$	135,851	$	135,295	$	141,020	$	128,468		$	124,979
Special mention		-		141		212		2,402			2,199
Substandard		3,462		3,528		4,148		4,169			4,538
Total commercial and industrial	$	139,313	$	138,964	$	145,380	$	135,039		$	131,716
Marine vessels ⁽²⁾
Performing	$	313,230	$	307,746	$	312,096	$	318,246		$	301,327
Nonperforming		-		-		-		-			-
Total marine vessels	$	313,230	$	307,746	$	312,096	$	318,246		$	301,327
Residential mortgages ⁽²⁾
Performing	$	202,380	$	202,114	$	199,601	$	190,059		$	185,162
Nonperforming		388		389		390		161			365
Total residential mortgages	$	202,768	$	202,503	$	199,991	$	190,220		$	185,527
Cash value life insurance LOC ⁽²⁾
Performing	$	89,305	$	86,610	$	87,172	$	90,115		$	87,135
Nonperforming		-		-		-		-			-
Total cash value life insurance LOC	$	89,305	$	86,610	$	87,172	$	90,115		$	87,135
Other consumer ⁽²⁾
Performing	$	23,786	$	22,991	$	22,829	$	20,872		$	21,203
Nonperforming		-		-		-		21			-
Total other consumer	$	23,786	$	22,991	$	22,829	$	20,893		$	21,203
Gross loans held for investment	$	1,705,370	$	1,627,261	$	1,617,315	$	1,552,976		$	1,527,199

⁽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 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 Common Share / Tangible Common Equity to Tangible Assets (unaudited)													Table 10A
	As of
	June 30,			March 31,			December 31,			September 30,			June 30,
(dollars in thousands, except per share data)	2026			2026			2025			2025			2025
Tangible Common Equity:
Total shareholders' equity	$	269,703		$	262,923		$	259,529		$	250,438		$	209,365
Less: Goodwill and intangibles		(6,246	)		(6,243	)		(6,262	)		(6,186	)		(6,190	)
Adjusted for: Mortgage servicing rights		1,313			1,280			1,266			1,156			1,122
Tangible Common Equity	$	264,770		$	257,960		$	254,533		$	245,408		$	204,297
Common shares outstanding		12,003,040			11,985,414			11,980,412			11,978,921			10,278,921
Book value per common share		22.47			21.94			21.66			20.91			20.37
Tangible book value per common share		22.06			21.52			21.25			20.49			19.88
Tangible assets:
Total assets	$	2,420,993		$	2,348,547		$	2,306,586		$	2,255,389		$	2,221,245
Less: Goodwill and intangibles		(6,246	)		(6,243	)		(6,262	)		(6,186	)		(6,190	)
Adjusted for: Mortgage servicing rights		1,313			1,280			1,266			1,156			1,122
Tangible assets	$	2,416,060		$	2,343,584		$	2,301,590		$	2,250,359		$	2,216,177
Tangible common equity to tangible assets		10.96	%		11.01	%		11.06	%		10.91	%		9.22	%



ROATCE (unaudited)																			Table 10B
	As of and for the Three Months Ended															As of and for the Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,				June 30,
(dollars in thousands)	2026			2026			2025			2025			2025			2026				2025
Net income	$	7,333		$	6,329		$	7,136		$	6,741		$	5,965		$	13,662			$	11,015
Average shareholders' equity		266,974			264,232			256,814			246,688			205,837			265,611				202,817
Return on average shareholders' equity ⁽¹⁾		11.02	%		9.71	%		11.02	%		10.84	%		11.62	%		10.37	%			10.95	%
Average Tangible Common Equity:
Average shareholders' equity	$	266,974		$	264,232		$	256,814		$	246,688		$	205,837		$	265,611			$	202,817
Less: Average goodwill and intangibles		(6,229	)		(6,270	)		(6,166	)		(6,176	)		(6,168	)		(6,250	)			(6,248	)
Adjusted for: Average mortgage servicing rights		1,281			1,291			1,155			1,128			1,082			1,286				1,140
Average tangible common equity	$	262,026		$	259,253		$	251,803		$	241,640		$	200,751		$	260,647			$	197,709
Return on average tangible common ⁽¹⁾equity		11.23	%		9.90	%		11.24	%		11.07	%		11.92	%		10.57	%			11.23	%

⁽¹⁾	Represents annualized data.



Adjusted Nonperforming Assets to Total Assets (unaudited)													Table 10C
	As of
	June 30,			March 31,			December 31,			September 30,			June 30,
(dollars in thousands)	2026			2026			2025			2025			2025
Total nonperforming assets	$	18,322		$	18,183		$	18,306		$	14,192		$	14,704
Total assets		2,420,993			2,348,547			2,306,586			2,255,389			2,221,245
GAAP-based nonperforming assets to total assets		0.76	%		0.77	%		0.79	%		0.63	%		0.66	%
Total nonperforming assets	$	18,322		$	18,183		$	18,306		$	14,192		$	14,704
Adjusted for:
Guaranteed portions of nonaccrual loans		3,542			3,657			4,089			4,457			4,583
Adjusted nonperforming assets	$	14,780		$	14,526		$	14,217		$	9,735		$	10,121
Total assets	$	2,420,993		$	2,348,547		$	2,306,586		$	2,255,389		$	2,221,245
Adjusted nonperforming assets to total assets		0.61	%		0.62	%		0.62	%		0.43	%		0.46	%



PPNR (unaudited)													Table 10D
	As of and for the Three Months Ended										As of and for the Six Months Ended
	June 30,		March 31,		December 31,		September 30,		June 30,		June 30,			June 30,
(dollars in thousands)	2026		2026		2025		2025		2025		2026			2025
Net income (GAAP-based)	$	7,333	$	6,329	$	7,136	$	6,741	$	5,965	$	13,662		$	11,015
Plus:
Income tax expense		1,502		1,956		1,598		2,040		1,064		3,458			2,606
Provision for credit losses		658		382		1,162		653		752		1,040			1,381
Pre-tax, pre-provision net revenue	$	9,493	$	8,667	$	9,896	$	9,434	$	7,781	$	18,160		$	15,002



Core Deposits (unaudited)									Table 10E
	As of
	June 30,		March 31,		December 31,		September 30,		June 30,
(dollars in thousands)	2026		2026		2025		2025		2025
Total Deposits	$	2,047,671	$	2,057,144	$	1,987,684	$	1,949,672	$	1,968,301
Less:
Brokered CDs		253,928		258,591		307,034		294,908		307,892
Core deposits ⁽¹⁾	$	1,793,743	$	1,798,553	$	1,680,650	$	1,654,764	$	1,660,409