COSO · CoastalSouth Bancshares, Inc.

CoastalSouth Bancshares delivered Q1 2026 results with net income of $6.3 million, reflecting a sequential decline from $7.1 million primarily due to lower noninterest income from reduced gains on government guaranteed loans and higher noninterest expenses driven by salaries, professional services, and recruiting efforts amid organic expansion. Net interest income dipped slightly to $19.7 million, with NIM stable at 3.59% despite yield compression on earning assets from recent rate cuts, offset by lower deposit costs falling to 2.54%. CEO Stephen R. Stone highlighted robust core deposit growth of $117.9 million across all markets, reducing reliance on $48.4 million in brokered CDs and positioning the bank for sustained loan expansion, evidenced by $166.7 million in LHFI production (67% from community banking). Balance sheet expansion included $42 million in total assets to $2.35 billion and deposits up 3.5% to $2.06 billion, with noninterest-bearing deposits steady at 15.1%. Credit quality remained strong, with provision expense of $382 thousand tied to loan growth and economic factors, net charge-offs at 0.01%, and nonperforming assets improving slightly to 0.77%. The board's $0.05 dividend declaration underscores confidence in capital generation, with ROATCE at 9.90% and tangible book value per share up 5.15% annualized to $21.52. Investor presentation reinforces diversified loan portfolio, conservative CRE concentrations, and effective deposit beta management stabilizing margins amid rate repricing.