TCBS · Texas Community Bancshares, Inc.

Texas Community Bancshares reported strong first-quarter 2026 results, with net income rising 30.0% to $836,000 from $643,000 in the prior-year quarter, marking the sixth consecutive record quarter. The improvement was driven by a 3.1% increase in net interest income to $3.4 million, as a $167,000 reduction in interest expense more than offset a $64,000 decline in interest income. The net interest margin expanded 25 basis points to 3.49%, benefiting from a 12-basis-point decrease in the cost of interest-bearing deposits to 2.33% and a 26-basis-point increase in loan yields to 6.14%. Noninterest income surged 51.1% to $698,000, primarily due to $168,000 in rental income from a foreclosed multifamily property and a $57,000 referral fee. Noninterest expense rose 8.2% to $3.2 million, reflecting $104,000 in expenses related to the foreclosed property and $77,000 in technology costs for a new loan origination platform. The provision for credit losses fell sharply to $6,000 from $113,000, driven by a $4.7 million decline in loans. On the balance sheet, total assets edged up 0.1% to $430.4 million, while deposits grew 1.3% to $332.0 million, with growth concentrated in non-interest bearing accounts. Management highlighted that over $80 million in low-rate loans (4% or less) remain in the portfolio and will reprice higher as they pay down, supporting future net interest income. The company also broke ground on a new branch in Terrell, Texas, to enter the outer DFW market. Asset quality remained strong, with nonperforming assets at 2.60% of total assets and the allowance for credit losses at 1.14% of loans. The bank remained well capitalized with a leverage ratio of 11.97%.