CoastalSouth Bancshares, Inc. Reports Earnings for Second Quarter 2026

CoastalSouth Bancshares, Inc. Reports Earnings for Second Quarter 2026 CoastalSouth Bancshares, Inc. (“CoastalSouth” or the “Company”) (NYSE: COSO), the holding company for Coastal States Bank (the “Bank” or "CSB"), today reported net income of $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 shareReturn on average assets ("ROAA") of 1.24%Return on average equity ("ROAE") of 11.02%; Return on average tangible common equity 1("ROATCE") of 11.23%Net interest margin of 3.66%, an increase of 7 basis points from the first quarter of 2026Total deposits decreased $9.5 million, principally driven by a decrease of $4.8 million in core deposits 1 and a decrease in brokered certificates of deposit of $4.7 millionLoans held for investment ("LHFI") production 2 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 2026Book value per share growth of $0.53, or 9.69% annualized, to $22.47 at June 30, 2026; Tangible book value 1 per common share growth of $0.54, or 10.06% annualized, to $22.06 at June 30, 2026 from the first quarter of 2026Total shareholders' equity to total assets of 11.14%, compared to 11.20% as of the first quarter of 2026; Tangible common equity 1 to tangible assets 1 of 10.96%, compared to 11.01% as of March 31, 2026Net charge-offs to average loans held for investment of 0.01%Nonperforming assets to total assets of 0.76%; adjusted nonperforming assets to total assets 1 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 (1) The Company defines its core deposits as total deposits, less brokered certificates of deposit.. Source: CoastalSouth Bancshares