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 $8.8 million, or $0.71 per diluted share, for the third quarter of 2026, compared to approximately $7.3 million, or $0.59 per diluted share, for the second quarter of 2026, and $6.7 million, or $0.54 per diluted share, for the third quarter of 2025. For the nine months ended September 30, 2026, the Company reported net income of $22.4 million, or $1.81 per diluted share, compared with $17.8 million, or $1.58 per diluted share, for the same period in 2025.
Additionally, on October 19, 2026, the Board of Directors of CoastalSouth Bancshares, Inc. declared a per share quarterly dividend of $0.06. The dividend will be paid to shareholders of record as of the close of business on November 10, 2026, the record date. The dividend shall be paid on November 24, 2026.
Commenting on the Company’s third quarter performance, President and Chief Executive Officer Stephen R. Stone stated, "We delivered record earnings of $0.71 per share in the third quarter, driven by strong loan production and robust gain-on-sale revenue from our government-guaranteed lending business. We saw outstanding loan production2 of $248.2 million during the third quarter, driving an $81.6 million increase in loans held-for-investment, or 19.0% annualized. The majority of production in the third quarter continued to come from the community bank, although our specialty lines of business also had a strong production quarter. As we head into the fourth quarter, we remain focused on building deep client relationships, maintaining disciplined underwriting, and investing in talented bankers across our footprint."
Third Quarter 2026 Performance Highlights:
- Net income of $8.8 million or $0.71 per diluted share
- Return on average assets ("ROAA") of 1.45%
- Return on average equity ("ROAE") of 12.88%; Return on average tangible common equity1 ("ROATCE") of 13.12%
- Net interest margin of 3.70%, an increase of 4 basis points from the second quarter of 2026
- Total deposits increased $53.1 million, although core deposits1 were down quarter over quarter approximately $20.0 million which is primarily attributable to seasonal outflows associated with our property management clients
- Loans held-for-investment ("LHFI") production2 of $248.2 million during the third quarter of 2026 led to LHFI growth of $81.6 million, up 19.0% annualized from the second quarter of 2026
- Accumulated other comprehensive loss ("AOCL") increased by $8.3 million from prior quarter due to increased unrealized losses in our available-for-sale securities portfolio
- Book value per share decreased $0.15, or 2.65% annualized, to $22.32 at September 30, 2026; Tangible book value1 per common share decreased $0.16, or 2.88% annualized, to $21.90 at September 30, 2026 from the second quarter of 2026
- Share repurchase program launched May 1, 2026; 285,715 shares repurchased during the third quarter of 2026 with a weighted-average price of $27.10
- Total shareholders' equity to total assets of 10.81%, compared to 11.14% as of the second quarter of 2026; Tangible common equity1 to tangible assets1 of 10.63%, compared to 10.96% as of June 30, 2026
- Net charge-offs to average loans held for investment of 0.01%
- Nonperforming assets to total assets of 0.62%; adjusted nonperforming assets to total assets1 of 0.45%
- Allowance for credit losses ("ACL") on LHFI to total LHFI of 1.10%; total ACL on LHFI to nonperforming loans of 130.13%
| ______________________________ | |
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 September 30, 2026, these loans had funded balances of $148.9 million and unfunded commitments of $74.1 million. |
Operating Highlights
Net interest income totaled $21.5 million for the third quarter of 2026, an increase of $862 thousand, or 4.2%, from $20.7 million for the second quarter of 2026, and an increase of $2.3 million, or 12.2% from the third quarter of 2025. The Company’s net interest margin increased by 4 basis points to 3.70% for the third quarter of 2026, compared to 3.66% for the second quarter of 2026, and increased 12 basis points from the third quarter of 2025.
The yield on average interest-earning assets for the third quarter of 2026 increased to 5.99% from 5.94% for the second quarter of 2026. This increase was primarily related to an overall yield increase in average interest-earning assets across the board, principally investment securities, LHFI and loans held-for-sale ("LHFS"). Compared to the third quarter of 2025, yields on earning assets decreased 15 basis points to 5.99% from 6.14%. The decrease was primarily attributable to interest rate cuts during 2025, notwithstanding $186.0 million of growth in average total earning assets.
The Company’s total cost of funds was 2.51% for the third quarter of 2026, an increase of 1 basis point compared to the second quarter of 2026, and a decrease of 28 basis points compared to the third quarter of 2025. Deposit costs were 2.48% for the third quarter of 2026, similar to 2.48% for the second quarter of 2026, and compared to 2.72% for the third quarter of 2025, a decrease of 24 basis points from the third quarter of 2025. The cost of interest-bearing deposits increased 2 basis points during the third quarter of 2026 to 2.97%, compared with 2.95% in the second quarter of 2026, reflecting continued repricing of our interest-bearing deposits to align with competitive rate pressure associated with the markets expectation of the Federal Reserve hiking rates during the third quarter of 2026.
Noninterest income totaled $3.3 million for the third quarter of 2026, an increase of $1.1 million, or 51.2%, from the second quarter of 2026, primarily attributable to an increase in gain on sale of government guaranteed loans by $1.3 million; offset by a net decrease in other categories within noninterest income. Noninterest expense totaled $13.7 million for the third quarter of 2026, an increase of $336 thousand, or 2.5%, from the second quarter of 2026. This increase was primarily due to higher salaries and employee benefits of $299 thousand, coupled with a net increase in other noninterest expense categories. The Company continues to focus on organic growth and expansion through banker recruiting across the franchise.
The Company’s effective tax rate for the third quarter of 2026 was 24.2%, compared to 17.0% for the second quarter of 2026, and 23.2% for the third quarter of 2025. The increase in effective tax rate from the second quarter of 2026 was primarily due to a reduction in the deferred tax asset related to state taxes during the third quarter of 2026 of approximately $641 thousand. Excluding discrete items related to this write-down and stock based compensation activity, the Company's effective tax rate at the end of the third quarter of 2026 was 20.05%.
Balance Sheet Trends
Total assets were $2.42 billion at September 30, 2026, an increase of approximately $117.2 million, or 5.1%, from $2.31 billion at December 31, 2025. LHFS were $142.4 million at September 30, 2026, a decrease of $28.5 million, or 16.7%, from $170.9 million at December 31, 2025. Gross LHFI were $1.79 billion at September 30, 2026, an increase of approximately $169.6 million, or 10.5%, from $1.62 billion at December 31, 2025.
Total deposits were $2.10 billion at September 30, 2026, an increase of $113.1 million, or 5.7%, from $1.99 billion at December 31, 2025. Noninterest-bearing deposits were $340.4 million at September 30, 2026, or 16.2% 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 $257.0 million at September 30, 2026, as compared to $307.0 million at December 31, 2025, a decrease of $50.0 million, or 16.3%.
Credit Quality
During the third quarter of 2026, the Company recorded a recovery for credit losses of $429 thousand, compared to a provision for credit losses of $658 thousand and $653 thousand during the second quarter of 2026 and the third quarter of 2025, respectively. The recovery for credit losses recorded during the third quarter of 2026 was due to changes in the economic forecast and loan mix, offset by new loan production. The Company's annualized net charge-offs to average LHFI ratio was 0.01% for the third quarter of 2026 as compared to 0.01% and 0.03% during the second quarter of 2026 and the third quarter of 2025, respectively.
Nonperforming assets totaled $15.1 million, or 0.62% of total assets, at September 30, 2026 compared to $18.3 million, or 0.79% of total assets at December 31, 2025. The decrease in nonperforming loans was primarily due to a $4.2 million paydown of one nonaccrual senior housing loan, offset by modest additions to nonaccrual loans. Adjusted nonperforming assets3, which excludes the guaranteed portions of nonaccrual loans, was $10.9 million, or 0.45% of total assets, at September 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 Exchange Act of 1934, 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 Highlights (unaudited) |
Table 1A |
|||||||||||||||||||||||||||
As of and for the Three Months Ended |
As of and for the Nine Months Ended |
|||||||||||||||||||||||||||
(dollars in thousands except |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
September 30, |
September 30, |
|||||||||||||||||||||
per share amounts) |
2026 |
2026 |
2026 |
2025 |
2025 |
2026 |
2025 |
|||||||||||||||||||||
Selected Operating Data: |
||||||||||||||||||||||||||||
Interest income |
$ |
34,878 |
$ |
33,558 |
$ |
32,568 |
$ |
33,006 |
$ |
32,890 |
$ |
101,004 |
$ |
94,707 |
||||||||||||||
Interest expense |
13,351 |
12,893 |
12,824 |
13,143 |
13,700 |
39,068 |
40,680 |
|||||||||||||||||||||
Net interest income |
21,527 |
20,665 |
19,744 |
19,863 |
19,190 |
61,936 |
54,027 |
|||||||||||||||||||||
(Recovery) provision for credit losses |
(429 |
) |
658 |
382 |
1,162 |
653 |
611 |
2,034 |
||||||||||||||||||||
Noninterest income |
3,329 |
2,202 |
1,967 |
2,295 |
2,100 |
7,498 |
5,776 |
|||||||||||||||||||||
Noninterest expense |
13,710 |
13,374 |
13,044 |
12,262 |
11,856 |
40,128 |
35,367 |
|||||||||||||||||||||
Income tax expense |
2,803 |
1,502 |
1,956 |
1,598 |
2,040 |
6,261 |
4,646 |
|||||||||||||||||||||
Net income |
8,772 |
7,333 |
6,329 |
7,136 |
6,741 |
22,434 |
17,756 |
|||||||||||||||||||||
Share and Per Share Data: |
||||||||||||||||||||||||||||
Basic earnings per share |
$ |
0.73 |
$ |
0.61 |
$ |
0.53 |
$ |
0.60 |
$ |
0.57 |
$ |
1.87 |
$ |
1.64 |
||||||||||||||
Diluted earnings per share |
$ |
0.71 |
$ |
0.59 |
$ |
0.51 |
$ |
0.58 |
$ |
0.54 |
$ |
1.81 |
$ |
1.58 |
||||||||||||||
Dividends per share |
$ |
0.05 |
$ |
0.05 |
$ |
0.05 |
$ |
n/a |
$ |
n/a |
$ |
0.15 |
$ |
n/a |
||||||||||||||
Book value per share |
$ |
22.32 |
$ |
22.47 |
$ |
21.94 |
$ |
21.66 |
$ |
20.91 |
$ |
22.32 |
$ |
20.91 |
||||||||||||||
Tangible book value per common share (1) |
$ |
21.90 |
$ |
22.06 |
$ |
21.52 |
$ |
21.25 |
$ |
20.49 |
$ |
21.90 |
$ |
20.49 |
||||||||||||||
Shares of common stock outstanding |
11,734,134 |
12,003,040 |
11,985,414 |
11,980,412 |
11,978,921 |
11,734,134 |
11,978,921 |
|||||||||||||||||||||
Weighted average diluted shares outstanding |
12,371,522 |
12,447,791 |
12,440,809 |
12,387,619 |
12,325,462 |
12,421,421 |
11,217,972 |
|||||||||||||||||||||
Selected Balance Sheet Data: |
||||||||||||||||||||||||||||
Total assets |
$ |
2,423,766 |
$ |
2,420,993 |
$ |
2,348,547 |
$ |
2,306,586 |
$ |
2,255,389 |
$ |
2,423,766 |
$ |
2,255,389 |
||||||||||||||
Securities available-for-sale, at fair value (2) |
332,664 |
348,582 |
347,533 |
330,503 |
334,955 |
332,664 |
334,955 |
|||||||||||||||||||||
Gross loans held for investment |
1,786,923 |
1,705,370 |
1,627,261 |
1,617,315 |
1,552,976 |
1,786,923 |
1,552,976 |
|||||||||||||||||||||
Loans held for sale |
142,399 |
223,112 |
202,615 |
170,933 |
231,593 |
142,399 |
231,593 |
|||||||||||||||||||||
Allowance for credit losses |
19,623 |
19,817 |
18,826 |
18,743 |
18,028 |
19,623 |
18,028 |
|||||||||||||||||||||
Goodwill and other intangible assets |
6,307 |
6,246 |
6,243 |
6,262 |
6,186 |
6,307 |
6,186 |
|||||||||||||||||||||
Total deposits |
2,100,746 |
2,047,671 |
2,057,144 |
1,987,684 |
1,949,672 |
2,100,746 |
1,949,672 |
|||||||||||||||||||||
Core deposits (1) |
1,773,730 |
1,793,743 |
1,798,553 |
1,680,650 |
1,654,764 |
1,773,730 |
1,654,764 |
|||||||||||||||||||||
Other borrowings |
30,000 |
75,000 |
- |
30,000 |
25,000 |
30,000 |
25,000 |
|||||||||||||||||||||
Total shareholders' equity |
261,920 |
269,703 |
262,923 |
259,529 |
250,438 |
261,920 |
250,438 |
|||||||||||||||||||||
(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 Nine Months Ended |
||||||||||||||||||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
September 30, |
September 30, |
|||||||||||||||||||||||
(dollars in thousands) |
2026 |
2026 |
2026 |
2025 |
2025 |
2026 |
2025 |
||||||||||||||||||||||
Performance Ratios: |
|||||||||||||||||||||||||||||
Pre-tax, pre-provision net revenue (PPNR) (1) |
$ |
11,146 |
$ |
9,493 |
$ |
8,667 |
$ |
9,896 |
$ |
9,434 |
$ |
29,306 |
$ |
24,436 |
|||||||||||||||
Return on average assets (ROAA) (2) |
1.45 |
% |
1.24 |
% |
1.10 |
% |
1.24 |
% |
1.20 |
% |
1.27 |
% |
1.09 |
% |
|||||||||||||||
Return on average equity (2) |
12.88 |
11.02 |
9.71 |
11.02 |
10.84 |
11.23 |
10.91 |
||||||||||||||||||||||
Return on average tangible common equity (ROATCE) (1)(2) |
13.12 |
11.23 |
9.90 |
11.24 |
11.07 |
11.44 |
11.17 |
||||||||||||||||||||||
Dividend payout ratio |
6.92 |
8.33 |
9.69 |
n/a |
n/a |
8.16 |
n/a |
||||||||||||||||||||||
Net interest rate spread (2) |
2.99 |
2.97 |
2.90 |
2.87 |
2.83 |
2.95 |
2.76 |
||||||||||||||||||||||
Net interest margin (2) |
3.70 |
3.66 |
3.59 |
3.60 |
3.58 |
3.65 |
3.48 |
||||||||||||||||||||||
Efficiency ratio |
55.16 |
58.49 |
60.08 |
55.34 |
55.69 |
57.79 |
59.14 |
||||||||||||||||||||||
Noninterest income to average total assets (2) |
0.55 |
0.37 |
0.34 |
0.40 |
0.37 |
0.42 |
0.35 |
||||||||||||||||||||||
Noninterest expense to average total assets (2) |
2.26 |
2.27 |
2.27 |
2.13 |
2.11 |
2.27 |
2.17 |
||||||||||||||||||||||
Average interest-earning assets to average interest-bearing liabilities |
130.86 |
130.15 |
129.61 |
130.41 |
129.16 |
130.22 |
127.34 |
||||||||||||||||||||||
Average equity to average total assets |
11.22 |
11.29 |
11.34 |
11.22 |
11.08 |
11.28 |
9.99 |
||||||||||||||||||||||
Asset Quality Data: |
|||||||||||||||||||||||||||||
Net charge-offs to average LHFI (2) |
0.01 |
% |
0.01 |
% |
0.01 |
% |
0.00 |
% |
0.03 |
% |
0.01 |
% |
0.03 |
% |
|||||||||||||||
Net charge-offs to total average loans (2) |
0.01 |
0.01 |
0.01 |
0.00 |
0.03 |
0.01 |
0.03 |
||||||||||||||||||||||
Total allowance for credit losses to total LHFI |
1.10 |
1.16 |
1.16 |
1.16 |
1.16 |
1.10 |
1.16 |
||||||||||||||||||||||
Total allowance for credit losses to total loans |
1.02 |
1.03 |
1.03 |
1.05 |
1.01 |
1.02 |
1.01 |
||||||||||||||||||||||
Total allowance for credit losses to nonperforming loans |
130.13 |
108.16 |
103.54 |
102.39 |
127.03 |
130.13 |
127.03 |
||||||||||||||||||||||
Nonperforming loans to gross LHFI |
0.84 |
1.07 |
1.12 |
1.13 |
0.91 |
0.84 |
0.91 |
||||||||||||||||||||||
Nonperforming assets to total assets |
0.62 |
0.76 |
0.77 |
0.79 |
0.63 |
0.62 |
0.63 |
||||||||||||||||||||||
Adjusted nonperforming assets to total assets (1) |
0.45 |
0.61 |
0.62 |
0.62 |
0.43 |
0.45 |
0.43 |
||||||||||||||||||||||
Balance Sheet and Capital Ratios: |
|||||||||||||||||||||||||||||
Loan-to-deposit ratio |
91.84 |
% |
94.18 |
% |
88.95 |
% |
89.97 |
% |
91.53 |
% |
91.84 |
% |
91.53 |
% |
|||||||||||||||
Noninterest-bearing deposits to total deposits |
16.21 |
17.38 |
15.12 |
15.71 |
16.08 |
16.21 |
16.08 |
||||||||||||||||||||||
Total shareholders' equity to total assets |
10.81 |
11.14 |
11.20 |
11.25 |
11.10 |
10.81 |
11.10 |
||||||||||||||||||||||
Tangible common equity to tangible assets (1) |
10.63 |
10.96 |
11.01 |
11.06 |
10.91 |
10.63 |
10.91 |
||||||||||||||||||||||
Tier 1 leverage ratio (3) |
11.07 |
11.12 |
11.21 |
11.18 |
11.15 |
11.07 |
11.15 |
||||||||||||||||||||||
Common equity tier 1 ratio (3) |
12.30 |
12.30 |
12.19 |
12.30 |
11.94 |
12.30 |
11.94 |
||||||||||||||||||||||
Tier 1 risk-based capital ratio (3) |
12.30 |
12.30 |
12.19 |
12.30 |
11.94 |
12.30 |
11.94 |
||||||||||||||||||||||
Total risk-based capital ratio (3) |
13.36 |
13.39 |
13.25 |
13.31 |
12.90 |
13.36 |
12.90 |
||||||||||||||||||||||
Other: |
|||||||||||||||||||||||||||||
Number of branches |
12 |
11 |
11 |
11 |
11 |
12 |
11 |
||||||||||||||||||||||
Number of full-time equivalent employees |
210 |
201 |
201 |
196 |
194 |
207 |
187 |
||||||||||||||||||||||
(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 September 30, 2026 are preliminary. |
Quarter End Balance Sheets (unaudited) |
Table 2 |
||||||||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
|||||||||||||||
(dollars in thousands) |
2026 |
2026 |
2026 |
2025 |
2025 |
||||||||||||||
Assets |
|||||||||||||||||||
Cash and due from banks |
$ |
25,443 |
$ |
24,262 |
$ |
22,546 |
$ |
41,538 |
$ |
20,088 |
|||||||||
Federal funds sold |
19,775 |
9,960 |
40,011 |
38,229 |
6,191 |
||||||||||||||
Investment securities (1) |
341,590 |
359,635 |
355,014 |
339,262 |
342,990 |
||||||||||||||
Loans held for sale (LHFS) |
142,399 |
223,112 |
202,615 |
170,933 |
231,593 |
||||||||||||||
Loans held for investment (LHFI) |
1,786,923 |
1,705,370 |
1,627,261 |
1,617,315 |
1,552,976 |
||||||||||||||
Allowance for credit losses on LHFI |
(19,623 |
) |
(19,817 |
) |
(18,826 |
) |
(18,743 |
) |
(18,028 |
) |
|||||||||
Loans held for investment, net |
1,767,300 |
1,685,553 |
1,608,435 |
1,598,572 |
1,534,948 |
||||||||||||||
Bank-owned life insurance |
49,694 |
49,218 |
48,752 |
48,296 |
47,833 |
||||||||||||||
Premises, furniture and equipment, net |
18,378 |
18,611 |
18,810 |
18,122 |
18,186 |
||||||||||||||
Deferred tax asset |
17,613 |
15,740 |
16,910 |
16,370 |
16,262 |
||||||||||||||
Goodwill & intangible assets (2) |
6,307 |
6,246 |
6,243 |
6,262 |
6,186 |
||||||||||||||
Other assets |
35,267 |
28,656 |
29,211 |
29,002 |
31,112 |
||||||||||||||
Total assets |
$ |
2,423,766 |
$ |
2,420,993 |
$ |
2,348,547 |
$ |
2,306,586 |
$ |
2,255,389 |
|||||||||
Liabilities and shareholders' equity |
|||||||||||||||||||
Liabilities |
|||||||||||||||||||
Deposits |
|||||||||||||||||||
Noninterest-bearing transaction accounts |
$ |
340,427 |
$ |
355,941 |
$ |
311,054 |
$ |
312,251 |
$ |
313,604 |
|||||||||
Interest-bearing transaction accounts |
213,146 |
194,896 |
235,422 |
214,620 |
198,753 |
||||||||||||||
Savings and money market |
800,988 |
772,809 |
775,962 |
673,609 |
634,826 |
||||||||||||||
Time deposits |
746,185 |
724,025 |
734,706 |
787,204 |
802,489 |
||||||||||||||
Total deposits |
2,100,746 |
2,047,671 |
2,057,144 |
1,987,684 |
1,949,672 |
||||||||||||||
Federal Home Loan Bank of Atlanta advances |
30,000 |
75,000 |
- |
30,000 |
25,000 |
||||||||||||||
Other liabilities |
31,100 |
28,619 |
28,480 |
29,373 |
30,279 |
||||||||||||||
Total liabilities |
2,161,846 |
2,151,290 |
2,085,624 |
2,047,057 |
2,004,951 |
||||||||||||||
Shareholders' equity |
|||||||||||||||||||
Voting common stock |
11,734 |
12,003 |
11,853 |
10,868 |
10,449 |
||||||||||||||
Nonvoting common stock |
- |
- |
132 |
1,112 |
1,530 |
||||||||||||||
Capital surplus |
181,518 |
188,851 |
190,160 |
189,882 |
189,654 |
||||||||||||||
Accumulated income |
87,489 |
79,324 |
72,602 |
66,886 |
59,750 |
||||||||||||||
Accumulated other comprehensive loss |
(18,821 |
) |
(10,475 |
) |
(11,824 |
) |
(9,219 |
) |
(10,945 |
) |
|||||||||
Total shareholders' equity |
261,920 |
269,703 |
262,923 |
259,529 |
250,438 |
||||||||||||||
Total liabilities and shareholders' equity |
$ |
2,423,766 |
$ |
2,420,993 |
$ |
2,348,547 |
$ |
2,306,586 |
$ |
2,255,389 |
|||||||||
(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 $1.4 million, $1.3 million, $1.3 million, $1.3 million, and $1.2 million at September 30, 2026, June 30, 2026, March 31, 2026, December 31, 2025 and September 30, 2025, respectively. |
Statements of Operations (unaudited) |
Table 3 |
||||||||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
September 30, |
September 30, |
|||||||||||||||||||||
(dollars in thousands) |
2026 |
2026 |
2026 |
2025 |
2025 |
2026 |
2025 |
||||||||||||||||||||
Interest income |
|||||||||||||||||||||||||||
Interest on cash and due from banks |
$ |
132 |
$ |
121 |
$ |
125 |
$ |
109 |
$ |
129 |
$ |
378 |
$ |
375 |
|||||||||||||
Interest on federal funds sold |
486 |
409 |
792 |
624 |
616 |
1,687 |
2,277 |
||||||||||||||||||||
Interest and dividends on investment securities |
4,066 |
3,892 |
3,611 |
3,734 |
4,125 |
11,569 |
11,800 |
||||||||||||||||||||
Interest and fees on LHFS |
2,781 |
3,162 |
2,915 |
3,771 |
3,422 |
8,858 |
9,537 |
||||||||||||||||||||
Interest and fees on LHFI |
27,413 |
25,974 |
25,125 |
24,768 |
24,598 |
78,512 |
70,718 |
||||||||||||||||||||
Total interest income |
34,878 |
33,558 |
32,568 |
33,006 |
32,890 |
101,004 |
94,707 |
||||||||||||||||||||
Interest expense |
|||||||||||||||||||||||||||
Deposits |
12,835 |
12,545 |
12,592 |
12,925 |
13,274 |
37,972 |
39,355 |
||||||||||||||||||||
Other borrowings |
516 |
348 |
232 |
218 |
426 |
1,096 |
1,325 |
||||||||||||||||||||
Total interest expense |
13,351 |
12,893 |
12,824 |
13,143 |
13,700 |
39,068 |
40,680 |
||||||||||||||||||||
Net interest income |
21,527 |
20,665 |
19,744 |
19,863 |
19,190 |
61,936 |
54,027 |
||||||||||||||||||||
(Recovery) provision for credit losses |
(429 |
) |
658 |
382 |
1,162 |
653 |
611 |
2,034 |
|||||||||||||||||||
Net interest income after provision for credit losses |
21,956 |
20,007 |
19,362 |
18,701 |
18,537 |
61,325 |
51,993 |
||||||||||||||||||||
Noninterest income |
|||||||||||||||||||||||||||
Mortgage banking related income |
375 |
403 |
394 |
330 |
299 |
1,172 |
846 |
||||||||||||||||||||
Interchange and card fee income |
244 |
256 |
273 |
230 |
238 |
773 |
761 |
||||||||||||||||||||
Service charges on deposit accounts |
268 |
236 |
232 |
256 |
208 |
736 |
634 |
||||||||||||||||||||
Bank-owned life insurance |
476 |
466 |
456 |
462 |
461 |
1,398 |
1,349 |
||||||||||||||||||||
Gain on sale of government guaranteed loans |
1,558 |
307 |
337 |
682 |
613 |
2,202 |
878 |
||||||||||||||||||||
Other noninterest income |
408 |
534 |
275 |
335 |
281 |
1,217 |
1,308 |
||||||||||||||||||||
Total noninterest income |
3,329 |
2,202 |
1,967 |
2,295 |
2,100 |
7,498 |
5,776 |
||||||||||||||||||||
Noninterest expense |
|||||||||||||||||||||||||||
Salaries and employee benefits |
8,613 |
8,314 |
8,046 |
7,644 |
6,985 |
24,973 |
20,676 |
||||||||||||||||||||
Occupancy and equipment |
944 |
875 |
886 |
864 |
850 |
2,705 |
2,452 |
||||||||||||||||||||
Data processing |
560 |
682 |
655 |
640 |
647 |
1,897 |
1,924 |
||||||||||||||||||||
Other professional services |
503 |
632 |
595 |
391 |
571 |
1,730 |
2,237 |
||||||||||||||||||||
Software and other technology expense |
894 |
861 |
826 |
808 |
788 |
2,581 |
2,210 |
||||||||||||||||||||
Regulatory assessment |
353 |
308 |
371 |
369 |
419 |
1,032 |
1,124 |
||||||||||||||||||||
Other noninterest expense |
1,843 |
1,702 |
1,665 |
1,546 |
1,596 |
5,210 |
4,744 |
||||||||||||||||||||
Total noninterest expense |
13,710 |
13,374 |
13,044 |
12,262 |
11,856 |
40,128 |
35,367 |
||||||||||||||||||||
Net income before taxes |
11,575 |
8,835 |
8,285 |
8,734 |
8,781 |
28,695 |
22,402 |
||||||||||||||||||||
Income tax expense |
2,803 |
1,502 |
1,956 |
1,598 |
2,040 |
6,261 |
4,646 |
||||||||||||||||||||
Net income |
$ |
8,772 |
$ |
7,333 |
$ |
6,329 |
$ |
7,136 |
$ |
6,741 |
$ |
22,434 |
$ |
17,756 |
|||||||||||||
QTD Average Balances and Yields/Rates (unaudited) |
Table 4 |
|||||||||||||||||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||||||||||||||||||
September 30, 2026 |
June 30, 2026 |
September 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 |
$ |
23,841 |
$ |
132 |
2.20 |
% |
$ |
23,889 |
$ |
121 |
2.03 |
% |
$ |
21,058 |
$ |
129 |
2.43 |
% |
||||||||||||||||||
Federal funds sold |
51,509 |
486 |
3.74 |
% |
44,172 |
409 |
3.71 |
% |
52,240 |
616 |
4.68 |
% |
||||||||||||||||||||||||
Investment securities |
356,044 |
4,066 |
4.53 |
% |
358,658 |
3,892 |
4.35 |
% |
339,619 |
4,125 |
4.82 |
% |
||||||||||||||||||||||||
Loans held for sale |
145,169 |
2,781 |
7.60 |
% |
170,135 |
3,162 |
7.45 |
% |
167,424 |
3,422 |
8.11 |
% |
||||||||||||||||||||||||
Loans held for investment |
1,733,109 |
27,413 |
6.28 |
% |
1,668,045 |
25,974 |
6.25 |
% |
1,543,363 |
24,598 |
6.32 |
% |
||||||||||||||||||||||||
Total earning assets |
2,309,672 |
34,878 |
5.99 |
% |
2,264,899 |
33,558 |
5.94 |
% |
2,123,704 |
32,890 |
6.14 |
% |
||||||||||||||||||||||||
Noninterest-earning assets: |
||||||||||||||||||||||||||||||||||||
Allowance for credit losses on LHFI |
(19,815 |
) |
(18,834 |
) |
(17,504 |
) |
||||||||||||||||||||||||||||||
Bank-owned life insurance |
49,414 |
48,944 |
47,569 |
|||||||||||||||||||||||||||||||||
Premises, furniture and equipment, net |
18,538 |
18,760 |
18,241 |
|||||||||||||||||||||||||||||||||
Deferred tax asset |
16,226 |
16,702 |
17,159 |
|||||||||||||||||||||||||||||||||
Goodwill & intangible assets |
6,235 |
6,229 |
6,176 |
|||||||||||||||||||||||||||||||||
Other assets |
27,919 |
27,734 |
30,633 |
|||||||||||||||||||||||||||||||||
Total noninterest-earning assets |
98,517 |
99,535 |
102,274 |
|||||||||||||||||||||||||||||||||
Total assets |
$ |
2,408,189 |
$ |
2,364,434 |
$ |
2,225,978 |
||||||||||||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||||||||||||||
Interest-bearing deposits |
$ |
1,712,756 |
$ |
12,835 |
2.97 |
% |
$ |
1,704,027 |
$ |
12,545 |
2.95 |
% |
$ |
1,631,767 |
$ |
13,274 |
3.23 |
% |
||||||||||||||||||
Federal Home Loan Bank of Atlanta advances |
52,175 |
516 |
3.92 |
% |
36,209 |
348 |
3.85 |
% |
272 |
3 |
4.38 |
% |
||||||||||||||||||||||||
Subordinated debt, net |
- |
- |
0.00 |
% |
- |
- |
0.00 |
% |
12,191 |
423 |
13.77 |
% |
||||||||||||||||||||||||
Total interest-bearing liabilities |
1,764,931 |
13,351 |
3.00 |
% |
1,740,236 |
12,893 |
2.97 |
% |
1,644,230 |
13,700 |
3.31 |
% |
||||||||||||||||||||||||
Noninterest-bearing liabilities: |
||||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits |
343,110 |
328,644 |
306,133 |
|||||||||||||||||||||||||||||||||
Other liabilities |
29,996 |
28,580 |
28,927 |
|||||||||||||||||||||||||||||||||
Total noninterest-bearing liabilities |
373,106 |
357,224 |
335,060 |
|||||||||||||||||||||||||||||||||
Shareholders' equity |
270,152 |
266,974 |
246,688 |
|||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity |
$ |
2,408,189 |
$ |
2,364,434 |
$ |
2,225,978 |
||||||||||||||||||||||||||||||
Net interest income |
$ |
21,527 |
$ |
20,665 |
$ |
19,190 |
||||||||||||||||||||||||||||||
Net interest spread |
2.99 |
% |
2.97 |
% |
2.83 |
% |
||||||||||||||||||||||||||||||
Net interest margin |
3.70 |
% |
3.66 |
% |
3.58 |
% |
||||||||||||||||||||||||||||||
Cost of total deposits (1) |
2.48 |
% |
2.48 |
% |
2.72 |
% |
||||||||||||||||||||||||||||||
Cost of total funding (1) |
2.51 |
% |
2.50 |
% |
2.79 |
% |
||||||||||||||||||||||||||||||
(1) |
Includes noninterest-bearing deposits. |
YTD Average Balances and Yields/Rates (unaudited) |
Table 5 |
|||||||||||||||||||||||
Nine Months Ended |
||||||||||||||||||||||||
September 30, 2026 |
September 30, 2025 |
|||||||||||||||||||||||
Average |
Yield/ |
Average |
Yield/ |
|||||||||||||||||||||
(dollars in thousands) |
Balance |
Interest |
Rate |
Balance |
Interest |
Rate |
||||||||||||||||||
Earning assets: |
||||||||||||||||||||||||
Cash and due from banks |
$ |
24,180 |
$ |
378 |
2.09 |
% |
$ |
21,509 |
$ |
375 |
2.33 |
% |
||||||||||||
Federal funds sold |
60,421 |
1,687 |
3.73 |
% |
67,659 |
2,277 |
4.50 |
% |
||||||||||||||||
Investment securities |
352,870 |
11,569 |
4.38 |
% |
337,852 |
11,800 |
4.67 |
% |
||||||||||||||||
Loans held for sale |
157,918 |
8,858 |
7.50 |
% |
157,409 |
9,537 |
8.10 |
% |
||||||||||||||||
Loans held for investment |
1,673,572 |
78,512 |
6.27 |
% |
1,493,081 |
70,718 |
6.33 |
% |
||||||||||||||||
Total earning assets |
2,268,961 |
101,004 |
5.95 |
% |
2,077,510 |
94,707 |
6.09 |
% |
||||||||||||||||
Noninterest-earning assets: |
||||||||||||||||||||||||
Allowance for credit losses on LHFI |
(19,136 |
) |
(17,245 |
) |
||||||||||||||||||||
Bank-owned life insurance |
48,952 |
47,123 |
||||||||||||||||||||||
Premises, furniture and equipment, net |
18,586 |
18,044 |
||||||||||||||||||||||
Deferred tax asset |
16,367 |
17,379 |
||||||||||||||||||||||
Goodwill & intangible assets |
6,245 |
6,224 |
||||||||||||||||||||||
Other assets |
27,641 |
29,935 |
||||||||||||||||||||||
Total noninterest-earning assets |
98,655 |
101,460 |
||||||||||||||||||||||
Total assets |
$ |
2,367,616 |
$ |
2,178,970 |
||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||
Interest-bearing deposits |
$ |
1,704,661 |
$ |
37,972 |
2.98 |
% |
$ |
1,608,583 |
$ |
39,355 |
3.27 |
% |
||||||||||||
Federal funds purchased |
- |
- |
0.00 |
% |
13 |
1 |
10.28 |
% |
||||||||||||||||
Federal Home Loan Bank of Atlanta advances |
37,784 |
1,096 |
3.88 |
% |
3,809 |
131 |
4.60 |
% |
||||||||||||||||
Revolving commercial line of credit, net |
- |
- |
0.00 |
% |
5,141 |
300 |
7.80 |
% |
||||||||||||||||
Subordinated debt, net |
- |
- |
0.00 |
% |
13,882 |
893 |
8.60 |
% |
||||||||||||||||
Total interest-bearing liabilities |
1,742,445 |
39,068 |
3.00 |
% |
1,631,428 |
40,680 |
3.33 |
% |
||||||||||||||||
Noninterest-bearing liabilities: |
||||||||||||||||||||||||
Noninterest-bearing deposits |
329,028 |
301,997 |
||||||||||||||||||||||
Other liabilities |
29,002 |
27,944 |
||||||||||||||||||||||
Total noninterest-bearing liabilities |
358,030 |
329,941 |
||||||||||||||||||||||
Shareholders' equity |
267,141 |
217,601 |
||||||||||||||||||||||
Total liabilities and shareholders' equity |
$ |
2,367,616 |
$ |
2,178,970 |
||||||||||||||||||||
Net interest income |
$ |
61,936 |
$ |
54,027 |
||||||||||||||||||||
Net interest spread |
2.95 |
% |
2.76 |
% |
||||||||||||||||||||
Net interest margin |
3.65 |
% |
3.48 |
% |
||||||||||||||||||||
Cost of total deposits (1) |
2.50 |
% |
2.75 |
% |
||||||||||||||||||||
Cost of total funding (1) |
2.52 |
% |
2.81 |
% |
||||||||||||||||||||
(1) |
Includes noninterest-bearing deposits. |
Loan Data (unaudited) |
Table 6 |
||||||||||||||||||||||||||||||||||||||
As of the Quarter Ended |
|||||||||||||||||||||||||||||||||||||||
September 30, 2026 |
June 30, 2026 |
March 31, 2026 |
December 31, 2025 |
September 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 |
$ |
134,395 |
7.5 |
% |
$ |
144,436 |
8.5 |
% |
$ |
130,398 |
8.0 |
% |
$ |
119,352 |
7.4 |
% |
$ |
106,787 |
6.9 |
% |
|||||||||||||||||||
Income producing commercial real estate ("CRE") |
449,103 |
25.1 |
416,965 |
24.5 |
376,260 |
23.1 |
378,179 |
23.4 |
371,670 |
23.9 |
|||||||||||||||||||||||||||||
Owner-occupied CRE |
140,420 |
7.9 |
127,285 |
7.5 |
107,344 |
6.6 |
92,787 |
5.7 |
96,287 |
6.2 |
|||||||||||||||||||||||||||||
Senior housing |
308,295 |
17.3 |
248,282 |
14.5 |
254,445 |
15.6 |
259,529 |
16.0 |
223,719 |
14.4 |
|||||||||||||||||||||||||||||
Commercial and industrial |
113,656 |
6.4 |
139,313 |
8.1 |
138,964 |
8.6 |
145,380 |
9.0 |
135,039 |
8.7 |
|||||||||||||||||||||||||||||
Retail Loans |
|||||||||||||||||||||||||||||||||||||||
Marine vessels |
320,682 |
17.9 |
313,230 |
18.4 |
307,746 |
18.9 |
312,096 |
19.3 |
318,246 |
20.5 |
|||||||||||||||||||||||||||||
Residential mortgages |
203,476 |
11.4 |
202,768 |
11.9 |
202,503 |
12.5 |
199,991 |
12.4 |
190,220 |
12.2 |
|||||||||||||||||||||||||||||
Cash value life insurance line of credit ("LOC") |
93,210 |
5.2 |
89,305 |
5.2 |
86,610 |
5.3 |
87,172 |
5.4 |
90,115 |
5.8 |
|||||||||||||||||||||||||||||
Other consumer |
23,686 |
1.3 |
23,786 |
1.4 |
22,991 |
1.4 |
22,829 |
1.4 |
20,893 |
1.4 |
|||||||||||||||||||||||||||||
Gross loans held for investment |
$ |
1,786,923 |
100.0 |
% |
$ |
1,705,370 |
100.0 |
% |
$ |
1,627,261 |
100.0 |
% |
$ |
1,617,315 |
100.0 |
% |
$ |
1,552,976 |
100.0 |
% |
|||||||||||||||||||
Core LHFI |
1,743,128 |
1,657,581 |
1,573,972 |
1,561,791 |
1,492,992 |
||||||||||||||||||||||||||||||||||
Acquired LHFI (1) |
43,795 |
47,789 |
53,289 |
55,524 |
59,984 |
||||||||||||||||||||||||||||||||||
Gross loans held for investment |
$ |
1,786,923 |
$ |
1,705,370 |
$ |
1,627,261 |
$ |
1,617,315 |
$ |
1,552,976 |
|||||||||||||||||||||||||||||
Allowance for credit losses on LHFI |
19,623 |
19,817 |
18,826 |
18,743 |
18,028 |
||||||||||||||||||||||||||||||||||
Net loans held for investment |
$ |
1,767,300 |
$ |
1,685,553 |
$ |
1,608,435 |
$ |
1,598,572 |
$ |
1,534,948 |
|||||||||||||||||||||||||||||
Total loans held-for-sale |
142,399 |
223,112 |
202,615 |
170,933 |
231,593 |
||||||||||||||||||||||||||||||||||
Total loans |
$ |
1,929,322 |
$ |
1,928,482 |
$ |
1,829,876 |
$ |
1,788,248 |
$ |
1,784,569 |
|||||||||||||||||||||||||||||
(1) |
Includes loans acquired through business combinations. |
Nonperforming Assets (unaudited) |
Table 7 |
||||||||||||||||||
As of the Quarter Ended |
|||||||||||||||||||
(dollars in thousands) |
September 30, 2026 |
June 30, 2026 |
March 31, 2026 |
December 31, 2025 |
September 30, 2025 |
||||||||||||||
Nonaccrual loans |
$ |
15,055 |
$ |
18,322 |
$ |
18,183 |
$ |
18,306 |
$ |
14,171 |
|||||||||
Past due loans 90 days and still accruing |
25 |
- |
- |
- |
21 |
||||||||||||||
Total nonperforming loans |
$ |
15,080 |
$ |
18,322 |
$ |
18,183 |
$ |
18,306 |
$ |
14,192 |
|||||||||
Other real estate owned |
- |
- |
- |
- |
- |
||||||||||||||
Total nonperforming assets |
$ |
15,080 |
$ |
18,322 |
$ |
18,183 |
$ |
18,306 |
$ |
14,192 |
|||||||||
Nonperforming loans to gross LHFI |
0.84 |
% |
1.07 |
% |
1.12 |
% |
1.13 |
% |
0.91 |
% |
|||||||||
Nonaccrual loans to total assets |
0.62 |
% |
0.76 |
% |
0.77 |
% |
0.79 |
% |
0.63 |
% |
|||||||||
Nonperforming assets to total assets |
0.62 |
% |
0.76 |
% |
0.77 |
% |
0.79 |
% |
0.63 |
% |
|||||||||
Allowance for Credit Losses (unaudited) |
Table 8 |
|||||||||||||||||||||||||||
As of and for the Three Months Ended |
As of and for the Nine Months Ended |
|||||||||||||||||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
September 30, |
September 30, |
||||||||||||||||||||||
(dollars in thousands) |
2026 |
2026 |
2026 |
2025 |
2025 |
2026 |
2025 |
|||||||||||||||||||||
Allowance for credit losses on LHFI |
||||||||||||||||||||||||||||
Balance, beginning of period |
$ |
19,817 |
$ |
18,826 |
$ |
18,743 |
$ |
18,028 |
$ |
17,497 |
$ |
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 |
(5 |
) |
4 |
(6 |
) |
(4 |
) |
(29 |
) |
(7 |
) |
(9 |
) |
|||||||||||||||
Retail Loans |
||||||||||||||||||||||||||||
Marine vessels |
- |
27 |
- |
- |
162 |
27 |
162 |
|||||||||||||||||||||
Residential mortgages |
(1 |
) |
(2 |
) |
- |
(29 |
) |
(2 |
) |
(3 |
) |
(6 |
) |
|||||||||||||||
Cash value life insurance LOC |
- |
- |
- |
- |
- |
- |
- |
|||||||||||||||||||||
Other consumer |
35 |
(4 |
) |
47 |
20 |
(6 |
) |
78 |
201 |
|||||||||||||||||||
Total net charge-offs/(recoveries) |
$ |
29 |
$ |
25 |
$ |
41 |
$ |
(13 |
) |
$ |
125 |
$ |
95 |
$ |
348 |
|||||||||||||
(Recovery) provision for loan credit losses |
(165 |
) |
1,016 |
124 |
702 |
656 |
975 |
1,258 |
||||||||||||||||||||
Balance, ending of period |
$ |
19,623 |
$ |
19,817 |
$ |
18,826 |
$ |
18,743 |
$ |
18,028 |
$ |
19,623 |
$ |
18,028 |
||||||||||||||
Allowance for credit losses for unfunded commitments |
||||||||||||||||||||||||||||
Period beginning balance |
$ |
3,856 |
$ |
4,214 |
$ |
3,956 |
$ |
3,496 |
$ |
3,499 |
$ |
3,956 |
$ |
2,720 |
||||||||||||||
(Recovery) provision for credit losses |
(264 |
) |
(358 |
) |
258 |
460 |
(3 |
) |
(364 |
) |
776 |
|||||||||||||||||
Period ending balance |
$ |
3,592 |
$ |
3,856 |
$ |
4,214 |
$ |
3,956 |
$ |
3,496 |
$ |
3,592 |
$ |
3,496 |
||||||||||||||
Balance, end of period - Allowance for credit losses: LHFI and unfunded commitments |
$ |
23,215 |
$ |
23,673 |
$ |
23,040 |
$ |
22,699 |
$ |
21,524 |
$ |
23,215 |
$ |
21,524 |
||||||||||||||
Total loans held for investment |
$ |
1,786,923 |
$ |
1,705,370 |
$ |
1,627,261 |
$ |
1,617,315 |
$ |
1,552,976 |
$ |
1,786,923 |
$ |
1,552,976 |
||||||||||||||
Credit Analysis |
||||||||||||||||||||||||||||
Net charge-offs to average LHFI |
0.01 |
% |
0.01 |
% |
0.01 |
% |
0.00 |
% |
0.03 |
% |
0.01 |
% |
0.03 |
% |
||||||||||||||
Total allowance for credit losses on LHFI to total LHFI |
1.10 |
% |
1.16 |
% |
1.16 |
% |
1.16 |
% |
1.16 |
% |
1.10 |
% |
1.16 |
% |
||||||||||||||
Total allowance for credit losses on LHFI to nonaccrual loans |
130.34 |
% |
108.16 |
% |
103.54 |
% |
102.39 |
% |
127.22 |
% |
130.34 |
% |
127.22 |
% |
||||||||||||||
Total allowance for credit losses on LHFI to total nonperforming loans |
130.13 |
% |
108.16 |
% |
103.54 |
% |
102.39 |
% |
127.03 |
% |
130.13 |
% |
127.03 |
% |
||||||||||||||
Loan Risk Ratings (1) (2) (unaudited) |
Table 9 |
||||||||||||||||||
As of the Quarter Ended |
|||||||||||||||||||
(dollars in thousands) |
September 30, 2026 |
June 30, 2026 |
March 31, 2026 |
December 31, 2025 |
September 30, 2025 |
||||||||||||||
Acquisition, development and construction (1) |
|||||||||||||||||||
Pass |
$ |
134,395 |
$ |
144,436 |
$ |
130,398 |
$ |
119,352 |
$ |
106,787 |
|||||||||
Special mention |
- |
- |
- |
- |
- |
||||||||||||||
Substandard |
- |
- |
- |
- |
- |
||||||||||||||
Total acquisition, development and construction |
$ |
134,395 |
$ |
144,436 |
$ |
130,398 |
$ |
119,352 |
$ |
106,787 |
|||||||||
Income producing CRE (1) |
|||||||||||||||||||
Pass |
$ |
448,028 |
$ |
416,501 |
$ |
375,791 |
$ |
377,711 |
$ |
370,788 |
|||||||||
Special mention |
- |
- |
- |
- |
- |
||||||||||||||
Substandard |
1,075 |
464 |
469 |
468 |
882 |
||||||||||||||
Total income producing CRE |
$ |
449,103 |
$ |
416,965 |
$ |
376,260 |
$ |
378,179 |
$ |
371,670 |
|||||||||
Owner-occupied CRE (1) |
|||||||||||||||||||
Pass |
$ |
129,245 |
$ |
116,429 |
$ |
97,706 |
$ |
82,959 |
$ |
86,533 |
|||||||||
Special mention |
2,461 |
2,485 |
2,509 |
2,739 |
3,579 |
||||||||||||||
Substandard |
8,714 |
8,371 |
7,129 |
7,089 |
6,175 |
||||||||||||||
Total owner-occupied CRE |
$ |
140,420 |
$ |
127,285 |
$ |
107,344 |
$ |
92,787 |
$ |
96,287 |
|||||||||
Senior housing (1) |
|||||||||||||||||||
Pass |
$ |
297,434 |
$ |
233,501 |
$ |
239,788 |
$ |
236,816 |
$ |
205,330 |
|||||||||
Special mention |
- |
- |
3,940 |
11,934 |
12,006 |
||||||||||||||
Substandard |
10,861 |
14,781 |
10,717 |
10,779 |
6,383 |
||||||||||||||
Total senior housing |
$ |
308,295 |
$ |
248,282 |
$ |
254,445 |
$ |
259,529 |
$ |
223,719 |
|||||||||
Commercial and industrial (1) |
|||||||||||||||||||
Pass |
$ |
109,955 |
$ |
135,851 |
$ |
135,295 |
$ |
141,020 |
$ |
128,468 |
|||||||||
Special mention |
- |
- |
141 |
212 |
2,402 |
||||||||||||||
Substandard |
3,701 |
3,462 |
3,528 |
4,148 |
4,169 |
||||||||||||||
Total commercial and industrial |
$ |
113,656 |
$ |
139,313 |
$ |
138,964 |
$ |
145,380 |
$ |
135,039 |
|||||||||
Marine vessels (2) |
|||||||||||||||||||
Performing |
$ |
320,682 |
$ |
313,230 |
$ |
307,746 |
$ |
312,096 |
$ |
318,246 |
|||||||||
Nonperforming |
- |
- |
- |
- |
- |
||||||||||||||
Total marine vessels |
$ |
320,682 |
$ |
313,230 |
$ |
307,746 |
$ |
312,096 |
$ |
318,246 |
|||||||||
Residential mortgages (2) |
|||||||||||||||||||
Performing |
$ |
203,088 |
$ |
202,380 |
$ |
202,114 |
$ |
199,601 |
$ |
190,059 |
|||||||||
Nonperforming |
388 |
388 |
389 |
390 |
161 |
||||||||||||||
Total residential mortgages |
$ |
203,476 |
$ |
202,768 |
$ |
202,503 |
$ |
199,991 |
$ |
190,220 |
|||||||||
Cash value life insurance LOC (2) |
|||||||||||||||||||
Performing |
$ |
93,210 |
$ |
89,305 |
$ |
86,610 |
$ |
87,172 |
$ |
90,115 |
|||||||||
Nonperforming |
- |
- |
- |
- |
- |
||||||||||||||
Total cash value life insurance LOC |
$ |
93,210 |
$ |
89,305 |
$ |
86,610 |
$ |
87,172 |
$ |
90,115 |
|||||||||
Other consumer (2) |
|||||||||||||||||||
Performing |
$ |
23,661 |
$ |
23,786 |
$ |
22,991 |
$ |
22,829 |
$ |
20,872 |
|||||||||
Nonperforming |
25 |
- |
- |
- |
21 |
||||||||||||||
Total other consumer |
$ |
23,686 |
$ |
23,786 |
$ |
22,991 |
$ |
22,829 |
$ |
20,893 |
|||||||||
Gross loans held for investment |
$ |
1,786,923 |
$ |
1,705,370 |
$ |
1,627,261 |
$ |
1,617,315 |
$ |
1,552,976 |
|||||||||
(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
|
||||||||||||||||||||
Non-GAAP Reconciliations |
||||||||||||||||||||
Tangible Book Value per Common Share / Tangible Common Equity to Tangible Assets (unaudited) |
Table 10A |
|||||||||||||||||||
As of |
||||||||||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
||||||||||||||||
(dollars in thousands, except per share data) |
2026 |
2026 |
2026 |
2025 |
2025 |
|||||||||||||||
Tangible Common Equity: |
||||||||||||||||||||
Total shareholders' equity |
$ |
261,920 |
$ |
269,703 |
$ |
262,923 |
$ |
259,529 |
$ |
250,438 |
||||||||||
Less: Goodwill and intangibles |
(6,307 |
) |
(6,246 |
) |
(6,243 |
) |
(6,262 |
) |
(6,186 |
) |
||||||||||
Adjusted for: Mortgage servicing rights |
1,402 |
1,313 |
1,280 |
1,266 |
1,156 |
|||||||||||||||
Tangible Common Equity |
$ |
257,015 |
$ |
264,770 |
$ |
257,960 |
$ |
254,533 |
$ |
245,408 |
||||||||||
Common shares outstanding |
11,734,134 |
12,003,040 |
11,985,414 |
11,980,412 |
11,978,921 |
|||||||||||||||
Book value per common share |
22.32 |
22.47 |
21.94 |
21.66 |
20.91 |
|||||||||||||||
Tangible book value per common share |
21.90 |
22.06 |
21.52 |
21.25 |
20.49 |
|||||||||||||||
Tangible assets: |
||||||||||||||||||||
Total assets |
$ |
2,423,766 |
$ |
2,420,993 |
$ |
2,348,547 |
$ |
2,306,586 |
$ |
2,255,389 |
||||||||||
Less: Goodwill and intangibles |
(6,307 |
) |
(6,246 |
) |
(6,243 |
) |
(6,262 |
) |
(6,186 |
) |
||||||||||
Adjusted for: Mortgage servicing rights |
1,402 |
1,313 |
1,280 |
1,266 |
1,156 |
|||||||||||||||
Tangible assets |
$ |
2,418,861 |
$ |
2,416,060 |
$ |
2,343,584 |
$ |
2,301,590 |
$ |
2,250,359 |
||||||||||
Tangible common equity to tangible assets |
10.63 |
% |
10.96 |
% |
11.01 |
% |
11.06 |
% |
10.91 |
% |
||||||||||
ROATCE (unaudited) |
Table 10B |
|||||||||||||||||||||||||||
As of and for the Three Months Ended |
As of and for the Nine Months Ended |
|||||||||||||||||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
September 30, |
September 30, |
||||||||||||||||||||||
(dollars in thousands) |
2026 |
2026 |
2026 |
2025 |
2025 |
2026 |
2025 |
|||||||||||||||||||||
Net income |
$ |
8,772 |
$ |
7,333 |
$ |
6,329 |
$ |
7,136 |
$ |
6,741 |
$ |
22,434 |
$ |
17,756 |
||||||||||||||
Average shareholders' equity |
270,152 |
266,974 |
264,232 |
256,814 |
246,688 |
267,141 |
217,601 |
|||||||||||||||||||||
Return on average shareholders' equity (1) |
12.88 |
% |
11.02 |
% |
9.71 |
% |
11.02 |
% |
10.84 |
% |
11.23 |
% |
10.91 |
% |
||||||||||||||
Average Tangible Common Equity: |
||||||||||||||||||||||||||||
Average shareholders' equity |
$ |
270,152 |
$ |
266,974 |
$ |
264,232 |
$ |
256,814 |
$ |
246,688 |
$ |
267,141 |
$ |
217,601 |
||||||||||||||
Less: Average goodwill and intangibles |
(6,235 |
) |
(6,229 |
) |
(6,270 |
) |
(6,166 |
) |
(6,176 |
) |
(6,245 |
) |
(6,224 |
) |
||||||||||||||
Adjusted for: Average mortgage servicing rights |
1,315 |
1,281 |
1,291 |
1,155 |
1,128 |
1,296 |
1,136 |
|||||||||||||||||||||
Average tangible common equity |
$ |
265,232 |
$ |
262,026 |
$ |
259,253 |
$ |
251,803 |
$ |
241,640 |
$ |
262,192 |
$ |
212,513 |
||||||||||||||
Return on average tangible common (1) equity |
13.12 |
% |
11.23 |
% |
9.90 |
% |
11.24 |
% |
11.07 |
% |
11.44 |
% |
11.17 |
% |
||||||||||||||
(1) |
Represents annualized data. |
Adjusted Nonperforming Assets to Total Assets (unaudited) |
Table 10C |
|||||||||||||||||||
As of |
||||||||||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
||||||||||||||||
(dollars in thousands) |
2026 |
2026 |
2026 |
2025 |
2025 |
|||||||||||||||
Total nonperforming assets |
$ |
15,080 |
$ |
18,322 |
$ |
18,183 |
$ |
18,306 |
$ |
14,192 |
||||||||||
Total assets |
2,423,766 |
2,420,993 |
2,348,547 |
2,306,586 |
2,255,389 |
|||||||||||||||
GAAP-based nonperforming assets to total assets |
0.62 |
% |
0.76 |
% |
0.77 |
% |
0.79 |
% |
0.63 |
% |
||||||||||
Total nonperforming assets |
$ |
15,080 |
$ |
18,322 |
$ |
18,183 |
$ |
18,306 |
$ |
14,192 |
||||||||||
Adjusted for: |
||||||||||||||||||||
Guaranteed portions of nonaccrual loans |
(4,217 |
) |
(3,542 |
) |
(3,657 |
) |
(4,089 |
) |
(4,457 |
) |
||||||||||
Adjusted nonperforming assets |
$ |
10,863 |
$ |
14,780 |
$ |
14,526 |
$ |
14,217 |
$ |
9,735 |
||||||||||
Total assets |
$ |
2,423,766 |
$ |
2,420,993 |
$ |
2,348,547 |
$ |
2,306,586 |
$ |
2,255,389 |
||||||||||
Adjusted nonperforming assets to total assets |
0.45 |
% |
0.61 |
% |
0.62 |
% |
0.62 |
% |
0.43 |
% |
||||||||||
PPNR (unaudited) |
Table 10D |
|||||||||||||||||||||||||||
As of and for the Three Months Ended |
As of and for the Nine Months Ended |
|||||||||||||||||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
September 30, |
September 30, |
||||||||||||||||||||||
(dollars in thousands) |
2026 |
2026 |
2026 |
2025 |
2025 |
2026 |
2025 |
|||||||||||||||||||||
Net income (GAAP-based) |
$ |
8,772 |
$ |
7,333 |
$ |
6,329 |
$ |
7,136 |
$ |
6,741 |
$ |
22,434 |
$ |
17,756 |
||||||||||||||
Plus: |
||||||||||||||||||||||||||||
Income tax expense |
2,803 |
1,502 |
1,956 |
1,598 |
2,040 |
6,261 |
4,646 |
|||||||||||||||||||||
(Recovery) provision for credit losses |
(429 |
) |
658 |
382 |
1,162 |
653 |
611 |
2,034 |
||||||||||||||||||||
Pre-tax, pre-provision net revenue |
$ |
11,146 |
$ |
9,493 |
$ |
8,667 |
$ |
9,896 |
$ |
9,434 |
$ |
29,306 |
$ |
24,436 |
||||||||||||||
Core Deposits (unaudited) |
Table 10E |
||||||||||||||||||
As of |
|||||||||||||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
|||||||||||||||
(dollars in thousands) |
2026 |
2026 |
2026 |
2025 |
2025 |
||||||||||||||
Total Deposits |
$ |
2,100,746 |
$ |
2,047,671 |
$ |
2,057,144 |
$ |
1,987,684 |
$ |
1,949,672 |
|||||||||
Less: |
|||||||||||||||||||
Brokered CDs |
257,016 |
253,928 |
258,591 |
307,034 |
294,908 |
||||||||||||||
ICS money market One-Way Buy |
70,000 |
- |
- |
- |
- |
||||||||||||||
Core deposits (1) |
$ |
1,773,730 |
$ |
1,793,743 |
$ |
1,798,553 |
$ |
1,680,650 |
$ |
1,654,764 |
|||||||||
(1) |
The Company defines its core deposits as total deposits, less brokered certificates of deposit and IntraFi Cash Service ("ICS") One-Way Buy demand and money market deposits. |