CoastalSouth Bancshares, Inc. Reports Earnings for First Quarter 2026

CoastalSouth Bancshares, Inc. Reports Earnings for First 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 $6.3 million, or $0.51 per diluted share, for the first quarter of 2026, compared to approximately $7.1 million, or $0.58 per diluted share, for the fourth quarter of 2025, and $5.1 million, or $0.47 per diluted share, for the first quarter of 2025. Additionally, on April 17, 2026 the Board of Directors of CoastalSouth Bancshares, Inc. declared a per share quarterly dividend of $0.05. The dividend will be paid in cash to all shareholders with outstanding shares as of the close of business on May 14, 2026, the record date. The dividend shall be paid on May 28, 2026. Commenting on the Company’s results, President and Chief Executive Officer, Stephen R. Stone stated, “We started strong in 2026 by growing $117.9 million in core deposits1 during the first quarter. Our core deposit growth has allowed us to reduce alternative funding sources and will provide liquidity for continued loan growth. We were pleased to see core deposit growth across all of our markets. We also produced $166.7 million in loans held for investment in the first quarter and our loan pipeline continued to grow, particularly with the addition of new commercial bankers across the franchise." First Quarter 2026 Performance Highlights: Net income of $6.3 million or $0.51 per diluted shareReturn on average assets ("ROAA") of 1.10%Return on average equity ("ROAE") of 9.71%; Return on average tangible common equity 1("ROATCE") of 9.90%Net interest margin of 3.59%, a decrease of 1 basis point from the fourth quarter of 2025Total deposits increased $69.5 million, driven by growth of $117.9 million in core deposits 1 and a decrease in brokered certificates of deposits of $48.4 millionLoans held for investment ("LHFI") production 2 of $166.7 million during the first quarter of 2026 led to LHFI growth of $9.9 million, up 2.5% annualized from the fourth quarter of 2025Book value per share growth of $0.28, or 5.24% annualized, to $21.94 at March 31, 2026; Tangible book value 1 per share growth of $0.27, or 5.15% annualized, to $21.52 at March 31, 2026 from the fourth quarter of 2025Total shareholders' equity to total assets of 11.20%, compared to 11.25% as of the fourth quarter of 2025; Tangible common equity 1 to tangible assets 1 of 11.01%, compared to 11.06% at December 31, 2025Net charge-offs to average loans held for investment of 0.01%Nonperforming assets to total assets of 0.77%; adjusted nonperforming assets to total assets 1 of 0.62%Allowance for credit losses ("ACL") on LHFI to total LHFI of 1.16%; ACL on LHFI to nonperforming loans of 103.54% Operating Highlights Net interest income totaled $19.7 million for the first quarter of 2026, a decrease of approximately $119 thousand, or 0.6%, from $19.9 million for the fourth quarter of 2025, and an increase of approximately $3.0 million, or 17.8% from the first quarter of 2025. The Company’s net interest margin decreased by 1 basis point to 3.59% for the first quarter of 2026, compared to 3.60% for the fourth quarter of 2025, and increased 21 basis points from the first quarter of 2025. The yield on average interest-earning assets for the first quarter of 2026 decreased to 5.92% from 5.98% for the fourth quarter of 2025. This decrease was primarily related to an overall yield decrease in interest-earning assets, primarily federal funds sold, loans held for sale, and investment securities due to recent interest rate cuts, notwithstanding significant growth in average total earning assets. Compared to the first quarter of 2025, yields on earning assets decreased 13 basis points to 5.92% from 6.05%. The decrease was primarily attributable to the aforementioned interest rate cuts during 2025. The Company’s total cost of funds was 2.55% for the first quarter of 2026, a decrease of 5 basis points and 30 basis points compared with the fourth and first quarters of 2025, respectively. Deposit costs decreased 5 and 26 basis points during the first quarter of 2026 to 2.54%, compared to 2.59% and 2.80% in the fourth and first quarters of 2025, respectively. The cost of interest-bearing deposits decreased 8 basis points during the first quarter of 2026 to 3.01%, compared with 3.09% in the fourth quarter of 2025, reflecting continued repricing of certificates of deposits in the first quarter of 2026. Noninterest income totaled $2.0 million for the first quarter of 2026, a decrease of $328 thousand, or 14.3%, from the fourth quarter of 2025, primarily attributable to a decrease in gain on sale of government guaranteed loans ("GGL"), net of other categories within noninterest income. Noninterest expense totaled $13.0 million for the first quarter of 2026, an increase of $782 thousand, or 6.4%, from the fourth quarter of 2025. This increase was primarily due to higher salaries and employee benefits, other professional services, and other noninterest 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 first quarter of 2026 was 23.6%, compared to 18.3% for the fourth quarter of 2025, and 23.4% for the first quarter of 2025. The increase in effective tax rate from the fourth quarter of 2025 was primarily due to a lower recognition of benefits from tax credits in the first quarter of 2026. Balance Sheet Trends Total assets were $2.35 billion at March 31, 2026, an increase of approximately $42.0 million, or 1.8%, from $2.31 billion at December 31, 2025. Loans held for sale ("LHFS") were $202.6 million at March 31, 2026, an increase of $31.7 million, or 18.5%, from $170.9 million at December 31, 2025. Gross LHFI were $1.63 billion at March 31, 2026, an increase of approximately $9.9 million, or 0.6%, from $1.62 billion at December 31, 2025. Total deposits were $2.06 billion at March 31, 2026, an increase of $69.5 million, or 3.5%, from $1.99 billion at December 31, 2025. Noninterest-bearing deposits were $311.1 million at March 31, 2026, or 15.1% 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 $258.6 million at March 31, 2026, as compared to $307.0 million at December 31, 2025, a decrease of $48.4 million, or 15.8%. Credit Quality During the first quarter of 2026, the Company recorded a provision for credit losses of $382 thousand, compared to $1.2 million and $629 thousand during the fourth and first quarters of 2025, respectively. The provision expense recorded during the first quarter of 2026 was due to loan production and mix and economic factors, offset with other changes in loss rates. The Company's annualized net charge-offs to average LHFI ratio was 0.01% for the first quarter of 2026 as compared to 0.00% and 0.00% during the fourth and first quarters of 2025, respectively. Nonperforming assets totaled $18.2 million, or 0.77% of total assets, at March 31, 2026 compared to $18.3 million, or 0.79% of total assets at December 31, 2025. The $123 thousand decrease in nonperforming assets at March 31, 2026 from December 31, 2025 was primarily due to payments on nonaccrual assets, offset with additions to nonaccrual assets. Adjusted nonperforming assets3, which excludes the guaranteed portions of nonaccrual loans, was $14.5 million, or 0.62% of total assets, at March 31, 2026 compared to $14.2 million, or 0.62% of total assets, at December 31, 2025. 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. _________________________ 1 Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of GAAP to non-GAAP financial measures in tables 9A - 9E. 2 The Company defines production as original loan commitment amount, which includes both funded and unfunded balances. As of March 31, 2026 these loans had funded balances of $99.5 million and unfunded commitments of $59.9 million. 3 Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of GAAP to non-GAAP financial measures in tables 9A - 9E. 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 a cyber-attack incidents or a 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. Financial Highlights (unaudited) Table 1A As of and for the Three Months Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands except per share amounts) 2026 2025 2025 2025 2025 Selected Operating Data: Interest income $ 32,568 $ 33,006 $ 32,890 $ 31,793 $ 30,024 Interest expense 12,824 13,143 13,700 13,715 13,265 Net interest income 19,744 19,863 19,190 18,078 16,759 Provision for credit losses 382 1,162 653 752 629 Noninterest income 1,967 2,295 2,100 1,795 1,881 Noninterest expense 13,044 12,262 11,856 12,092 11,419 Income tax expense 1,956 1,598 2,040 1,064 1,542 Net income 6,329 7,136 6,741 5,965 5,050 Share and Per Share Data: Basic earnings per share $ 0.53 $ 0.60 $ 0.57 $ 0.58 $ 0.49 Diluted earnings per share $ 0.51 $ 0.58 $ 0.54 $ 0.57 $ 0.47 Book value per share $ 21.94 $ 21.66 $ 20.91 $ 20.37 $ 19.67 Tangible book value per share(1) $ 21.52 $ 21.25 $ 20.49 $ 19.88 $ 19.17 Shares of common stock outstanding 11,985,414 11,980,412 11,978,921 10,278,921 10,274,271 Weighted average diluted shares outstanding 12,440,809 12,387,619 12,325,462 10,612,255 10,642,078 Selected Balance Sheet Data: Total assets $ 2,348,547 $ 2,306,586 $ 2,255,389 $ 2,221,245 $ 2,190,391 Securities available-for-sale, at fair value(2) 347,533 330,503 334,955 331,760 325,478 Gross loans held for investment 1,627,261 1,617,315 1,552,976 1,527,199 1,472,232 Loans held for sale 202,615 170,933 231,593 209,101 187,481 Allowance for credit losses 18,826 18,743 18,028 17,497 17,104 Goodwill and other intangible assets 6,243 6,262 6,186 6,190 6,199 Total deposits 2,057,144 1,987,684 1,949,672 1,968,301 1,937,693 Core deposits(1) 1,798,553 1,680,650 1,654,764 1,660,409 1,650,358 Other borrowings - 30,000 25,000 14,753 20,738 Total Shareholders' equity 262,923 259,529 250,438 209,365 202,104 (1) Considered non-GAAP financial measure - See "Non-GAAP Financial Measures” and reconciliation of GAAP to non-GAAP financial measures in tables 9A - 9E. (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 March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2026 2025 2025 2025 2025 Performance Ratios: Pre-tax, pre-provision net revenue (PPNR)(1) $ 8,667 $ 9,896 $ 9,434 $ 7,781 $ 7,221 Return on average assets (ROAA)(2) 1.10 % 1.24 % 1.20 % 1.09 % 0.97 % Return on average equity(2) 9.71 11.02 10.84 11.62 10.25 Return on average tangible common equity (ROATCE)(1)(2) 9.90 11.24 11.07 11.92 10.52 Net interest rate spread(2) 2.90 2.87 2.83 2.76 2.67 Net interest margin(2) 3.59 3.60 3.58 3.46 3.38 Efficiency ratio 60.08 55.34 55.69 60.85 61.26 Noninterest income to average total assets(2) 0.34 0.40 0.37 0.33 0.36 Noninterest expense to average total assets(2) 2.27 2.13 2.11 2.21 2.19 Average interest-earning assets to average interest-bearing liabilities 129.61 130.41 129.16 126.50 126.31 Average equity to average total assets 11.34 11.22 11.08 9.37 9.46 Asset Quality Data: Net charge-offs to average LHFI(2) 0.01 % 0.00 % 0.03 % 0.06 % 0.00 % Net charge-offs to total average loans(2) 0.01 0.00 0.03 0.05 0.00 Total allowance for credit losses to total LHFI 1.16 1.16 1.16 1.15 1.16 Total allowance for credit losses to total loans 1.03 1.05 1.01 1.01 1.03 Total allowance for credit losses to nonperforming loans 103.54 102.39 127.03 118.99 117.11 Nonperforming loans to gross LHFI 1.12 1.13 0.91 0.96 0.99 Nonperforming assets to total assets 0.77 0.79 0.63 0.66 0.70 Adjusted nonperforming assets to total assets(1) 0.62 0.62 0.43 0.46 0.49 Balance Sheet and Capital Ratios: Loan-to-deposit ratio 88.95 % 89.97 % 91.53 % 88.21 % 85.65 % Noninterest-bearing deposits to total deposits 15.12 15.71 16.08 15.92 15.52 Total shareholders' equity to total assets 11.20 11.25 11.10 9.43 9.23 Tangible common equity to tangible assets(1) 11.01 11.06 10.91 9.22 9.01 Tier 1 leverage ratio(3) 11.21 11.18 11.15 10.22 10.62 Common equity tier 1 ratio(3) 12.19 12.30 11.94 11.09 11.55 Tier 1 risk-based capital ratio(3) 12.19 12.30 11.94 11.09 11.55 Total risk-based capital ratio(3) 13.25 13.31 12.90 12.04 12.52 Other: Number of branches 11 11 11 11 11 Number of full-time equivalent employees 201 196 194 188 180 (1) Considered non-GAAP financial measure - See "Non-GAAP Financial Measures” and reconciliation of GAAP to non-GAAP financial measures in tables 9A - 9E. (2) Represents annualized data. (3) Ratios are for Coastal States Bank only. Ratios for March 31, 2026 are preliminary. Quarter End Balance Sheets (unaudited) Table 2 March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2026 2025 2025 2025 2025 Assets Cash and due from banks $ 22,546 $ 41,538 $ 20,088 $ 23,245 $ 19,380 Federal funds sold 40,011 38,229 6,191 20,045 79,153 Investment securities(1) 355,014 339,262 342,990 338,601 332,312 Loans held for sale (LHFS) 202,615 170,933 231,593 209,101 187,481 Loans held for investment (LHFI) 1,627,261 1,617,315 1,552,976 1,527,199 1,472,232 Allowance for credit losses on LHFI (18,826 ) (18,743 ) (18,028 ) (17,497 ) (17,104 ) Loans held for investment, net 1,608,435 1,598,572 1,534,948 1,509,702 1,455,128 Bank-owned life insurance 48,752 48,296 47,833 47,373 46,924 Premises, furniture and equipment, net 18,810 18,122 18,186 18,166 17,837 Deferred tax asset 16,910 16,370 16,262 17,211 17,123 Goodwill & intangible assets(2) 6,243 6,262 6,186 6,190 6,199 Other assets 29,211 29,002 31,112 31,611 28,854 Total assets $ 2,348,547 $ 2,306,586 $ 2,255,389 $ 2,221,245 $ 2,190,391 Liabilities and shareholders' equity Liabilities Deposits Noninterest-bearing transaction accounts $ 311,054 $ 312,251 $ 313,604 $ 313,386 $ 300,678 Interest-bearing transaction accounts 235,422 214,620 198,753 209,816 191,452 Savings and money market 775,962 673,609 634,826 628,729 650,050 Time deposits 734,706 787,204 802,489 816,370 795,513 Total deposits 2,057,144 1,987,684 1,949,672 1,968,301 1,937,693 Federal Home Loan Bank of Atlanta advances - 30,000 25,000 - - Subordinated debt, net - - - 14,753 14,741 Revolving commercial line of credit, net - - - - 5,997 Other liabilities 28,480 29,373 30,279 28,826 29,856 Total liabilities 2,085,624 2,047,057 2,004,951 2,011,880 1,988,287 Shareholders' equity Voting common stock 11,853 10,868 10,449 8,107 8,102 Nonvoting common stock 132 1,112 1,530 2,172 2,172 Capital surplus 190,160 189,882 189,654 159,267 158,997 Accumulated income 72,602 66,886 59,750 53,009 47,044 Accumulated other comprehensive loss (11,824 ) (9,219 ) (10,945 ) (13,190 ) (14,211 ) Total shareholders' equity 262,923 259,529 250,438 209,365 202,104 Total liabilities and shareholders' equity $ 2,348,547 $ 2,306,586 $ 2,255,389 $ 2,221,245 $ 2,190,391 (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 $1.3 million, $1.3 million, $1.2 million, $1.1 million, and $1.1 million at March 31, 2026, December 31, 2025, September 30, 2025, June 30, 2025 and March 31, 2025, respectively. Statements of Operations (unaudited) Table 3 Three Months Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2026 2025 2025 2025 2025 Interest income Interest on cash and due from banks $ 125 $ 109 $ 129 $ 111 $ 135 Interest on federal funds sold 792 624 616 698 963 Interest and dividends on investment securities 3,611 3,734 4,125 3,875 3,800 Interest and fees on LHFS 2,915 3,771 3,422 3,296 2,819 Interest and fees on LHFI 25,125 24,768 24,598 23,813 22,307 Total interest income 32,568 33,006 32,890 31,793 30,024 Interest expense Deposits 12,592 12,925 13,274 13,251 12,830 Other borrowings 232 218 426 464 435 Total interest expense 12,824 13,143 13,700 13,715 13,265 Net interest income 19,744 19,863 19,190 18,078 16,759 Provision for credit losses 382 1,162 653 752 629 Net interest income after provision for credit losses 19,362 18,701 18,537 17,326 16,130 Noninterest income Mortgage banking related income 394 330 299 326 221 Interchange and card fee income 273 230 238 257 266 Service charges on deposit accounts 232 256 208 215 211 Bank-owned life insurance 456 462 461 449 440 Gain on sale of government guaranteed loans 337 682 613 265 - Losses on sale of available-for-sale securities - - (10 ) - - Other noninterest income 275 335 291 283 743 Total noninterest income 1,967 2,295 2,100 1,795 1,881 Noninterest expense Salaries and employee benefits 8,046 7,644 6,985 6,997 6,694 Occupancy and equipment 886 864 850 814 788 Data processing 655 640 647 653 624 Other professional services 595 391 571 973 693 Software and other technology expense 826 808 788 719 703 Regulatory assessment 371 369 419 344 361 Other noninterest expense 1,665 1,546 1,596 1,592 1,556 Total noninterest expense 13,044 12,262 11,856 12,092 11,419 Net income before taxes 8,285 8,734 8,781 7,029 6,592 Income tax expense 1,956 1,598 2,040 1,064 1,542 Net income $ 6,329 $ 7,136 $ 6,741 $ 5,965 $ 5,050 QTD Average Balances and Yields/Rates (unaudited) Table 4 Three Months Ended March 31, 2026 December 31, 2025 March 31, 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 $ 24,822 $ 125 2.04 % $ 21,271 $ 109 2.03 % $ 22,725 $ 135 2.41 % Federal funds sold 85,959 792 3.74 % 62,215 624 3.98 % 88,478 963 4.41 % Investment securities 343,772 3,611 4.26 % 340,416 3,734 4.35 % 335,254 3,800 4.60 % Loans held for sale 158,597 2,915 7.45 % 198,119 3,771 7.55 % 136,849 2,819 8.35 % Loans held for investment 1,618,301 25,125 6.30 % 1,567,471 24,768 6.27 % 1,428,405 22,307 6.33 % Total earning assets 2,231,451 32,568 5.92 % 2,189,492 33,006 5.98 % 2,011,711 30,024 6.05 % Noninterest-earning assets: Allowance for credit losses on LHFI (18,746 ) (18,034 ) (17,116 ) Bank-owned life insurance 48,487 48,038 46,672 Premises, furniture and equipment, net 18,458 18,160 17,851 Deferred tax asset 16,173 15,841 17,803 Goodwill & intangible assets 6,270 6,166 6,328 Other assets 27,365 28,695 27,947 Total noninterest-earning assets 98,007 98,866 99,485 Total assets $ 2,329,458 $ 2,288,358 $ 2,111,196 Interest-bearing liabilities: Interest-bearing deposits $ 1,697,024 $ 12,592 3.01 % $ 1,658,037 $ 12,925 3.09 % $ 1,566,856 $ 12,830 3.32 % Federal funds purchased - - 0.00 % 8 - 0.00 % - - 0.00 % Federal Home Loan Bank of Atlanta advances 24,667 232 3.81 % 20,924 218 4.13 % 1,166 13 4.52 % Revolving commercial line of credit, net - - 0.00 % - - 0.00 % 9,863 187 7.69 % Subordinated debt, net - - 0.00 % - - 0.00 % 14,735 235 6.47 % Total interest-bearing liabilities 1,721,691 12,824 3.02 % 1,678,969 13,143 3.11 % 1,592,620 13,265 3.38 % Noninterest-bearing liabilities: Noninterest-bearing deposits 315,023 323,687 293,387 Other liabilities 28,512 28,888 25,426 Total noninterest-bearing liabilities 343,535 352,575 318,813 Shareholders' equity 264,232 256,814 199,763 Total liabilities and shareholders' equity $ 2,329,458 $ 2,288,358 $ 2,111,196 Net interest income $ 19,744 $ 19,863 $ 16,759 Net interest spread 2.90 % 2.87 % 2.67 % Net interest margin 3.59 % 3.60 % 3.38 % Cost of total deposits(1) 2.54 % 2.59 % 2.80 % Cost of total funding(1) 2.55 % 2.60 % 2.85 % (1) Includes noninterest-bearing deposits. Loan Data (unaudited) Table 5 As of the Quarter Ended March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 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 $ 130,398 8.0 % $ 119,352 7.4 % $ 106,787 6.9 % $ 100,528 6.6 % $ 76,453 5.2 % Income producing CRE 376,260 23.1 378,179 23.4 371,670 23.9 372,142 24.4 352,693 24.0 Owner-occupied CRE 107,344 6.6 92,787 5.7 96,287 6.2 91,147 6.0 90,204 6.1 Senior housing 254,445 15.6 259,529 16.1 223,719 14.4 236,474 15.5 245,292 16.7 Commercial and industrial 138,964 8.5 145,380 9.0 135,039 8.7 131,716 8.6 145,784 9.8 Retail Loans Marine vessels 307,746 18.9 312,096 19.3 318,246 20.5 301,327 19.7 284,305 19.3 Residential mortgages 202,503 12.4 199,991 12.4 190,220 12.3 185,527 12.1 176,794 12.1 Cash value life insurance LOC 86,610 5.3 87,172 5.4 90,115 5.8 87,135 5.7 80,503 5.5 Other consumer 22,991 1.4 22,829 1.4 20,893 1.4 21,203 1.4 20,204 1.4 Gross loans held for investment $ 1,627,261 100.0 % $ 1,617,315 100.0 % $ 1,552,976 100.0 % $ 1,527,199 100.0 % $ 1,472,232 100.0 % Core LHFI 1,573,972 1,561,791 1,492,992 1,464,200 1,406,199 Acquired LHFI(1) 53,289 55,524 59,984 62,999 66,033 Gross loans held for investment $ 1,627,261 $ 1,617,315 $ 1,552,976 $ 1,527,199 $ 1,472,232 Allowance for credit losses on LHFI 18,826 18,743 18,028 17,497 17,104 Net loans held for investment $ 1,608,435 $ 1,598,572 $ 1,534,948 $ 1,509,702 $ 1,455,128 Total loans held-for-sale 202,615 170,933 231,593 209,101 187,481 Total loans $ 1,829,876 $ 1,788,248 $ 1,784,569 $ 1,736,300 $ 1,659,713 (1) Includes loans acquired through business combinations. Nonperforming Assets (unaudited) Table 6 As of the Quarter Ended (dollars in thousands) March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 Nonaccrual loans $ 18,183 $ 18,306 $ 14,171 $ 14,611 $ 14,599 Past due loans 90 days and still accruing - - 21 93 6 Total nonperforming loans $ 18,183 $ 18,306 $ 14,192 $ 14,704 $ 14,605 Other real estate owned - - - - 765 Total nonperforming assets $ 18,183 $ 18,306 $ 14,192 $ 14,704 $ 15,370 Nonperforming loans to gross LHFI 1.12 % 1.13 % 0.91 % 0.96 % 0.99 % Nonaccrual loans to total assets 0.77 % 0.79 % 0.63 % 0.66 % 0.67 % Nonperforming assets to total assets 0.77 % 0.79 % 0.63 % 0.66 % 0.70 % Allowance for Credit Losses (unaudited) Table 7 As of and for the Three Months Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2026 2025 2025 2025 2025 Allowance for credit losses on LHFI Balance, beginning of period $ 18,743 $ 18,028 $ 17,497 $ 17,104 $ 17,118 Net charge-offs/(recoveries): Commercial Loans Commercial and industrial (6 ) (4 ) (29 ) 19 1 Retail Loans Marine vessels - - 162 - - Residential mortgages - (29 ) (2 ) (2 ) (2 ) Other consumer 47 20 (6 ) 191 16 Total net charge-offs/(recoveries) $ 41 $ (13 ) $ 125 $ 208 $ 15 Provision for loan credit losses 124 702 656 601 1 Balance, ending of period $ 18,826 $ 18,743 $ 18,028 $ 17,497 $ 17,104 Allowance for credit losses for unfunded commitments Period beginning balance $ 3,956 $ 3,496 $ 3,499 $ 3,348 $ 2,720 Provision (recovery) for credit losses 258 460 (3 ) 151 628 Period ending balance $ 4,214 $ 3,956 $ 3,496 $ 3,499 $ 3,348 Balance, end of period - Allowance for credit losses: LHFI and unfunded commitments $ 23,040 $ 22,699 $ 21,524 $ 20,996 $ 20,452 Total loans held for investment $ 1,627,261 $ 1,617,315 $ 1,552,976 $ 1,527,199 $ 1,472,232 Credit Analysis Net charge-offs to average LHFI 0.01 % 0.00 % 0.03 % 0.06 % 0.00 % Total allowance for credit losses on LHFI to total LHFI 1.16 % 1.16 % 1.16 % 1.15 % 1.16 % Total allowance for credit losses on LHFI to nonaccrual loans 103.54 % 102.39 % 127.22 % 119.75 % 117.16 % Total allowance for credit losses on LHFI to total nonperforming loans 103.54 % 102.39 % 127.03 % 118.99 % 117.11 % Loan Risk Ratings(1) (2) (unaudited) Table 8 As of the Quarter Ended (dollars in thousands) March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 Acquisition, development and construction(1) Pass $ 130,398 $ 119,352 $ 106,787 $ 100,528 $ 76,453 Special mention - - - - - Substandard - - - - - Total acquisition, development and construction $ 130,398 $ 119,352 $ 106,787 $ 100,528 $ 76,453 Income producing CRE(1) Pass $ 375,791 $ 377,711 $ 370,788 $ 371,255 $ 352,281 Special mention - - - - - Substandard 469 468 882 887 412 Total income producing CRE $ 376,260 $ 378,179 $ 371,670 $ 372,142 $ 352,693 Owner-occupied CRE(1) Pass $ 97,706 $ 82,959 $ 86,533 $ 81,244 $ 83,711 Special mention 2,509 2,739 3,579 3,612 - Substandard 7,129 7,089 6,175 6,291 6,493 Total owner-occupied CRE $ 107,344 $ 92,787 $ 96,287 $ 91,147 $ 90,204 Senior housing(1) Pass $ 239,788 $ 236,816 $ 205,330 $ 217,971 $ 208,922 Special mention 3,940 11,934 12,006 12,078 24,814 Substandard 10,717 10,779 6,383 6,425 11,556 Total senior housing $ 254,445 $ 259,529 $ 223,719 $ 236,474 $ 245,292 Commercial and industrial(1) Pass $ 135,295 $ 141,020 $ 128,468 $ 124,979 $ 141,202 Special mention 141 212 2,402 2,199 - Substandard 3,528 4,148 4,169 4,538 4,582 Total commercial and industrial $ 138,964 $ 145,380 $ 135,039 $ 131,716 $ 145,784 Marine vessels(2) Performing $ 307,746 $ 312,096 $ 318,246 $ 301,327 $ 284,305 Nonperforming - - - - - Total marine vessels $ 307,746 $ 312,096 $ 318,246 $ 301,327 $ 284,305 Residential mortgages(2) Performing $ 202,114 $ 199,601 $ 190,059 $ 185,162 $ 176,633 Nonperforming 389 390 161 365 161 Total residential mortgages $ 202,503 $ 199,991 $ 190,220 $ 185,527 $ 176,794 Cash value life insurance LOC(2) Performing $ 86,610 $ 87,172 $ 90,115 $ 87,135 $ 80,503 Nonperforming - - - - - Total cash value life insurance LOC $ 86,610 $ 87,172 $ 90,115 $ 87,135 $ 80,503 Other consumer(2) Performing $ 22,991 $ 22,829 $ 20,872 $ 21,203 $ 20,204 Nonperforming - - 21 - - Total other consumer $ 22,991 $ 22,829 $ 20,893 $ 21,203 $ 20,204 Gross loans held for investment $ 1,627,261 $ 1,617,315 $ 1,552,976 $ 1,527,199 $ 1,472,232 (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 shareholders' 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 Share / Tangible Common Equity to Tangible Assets (unaudited) Table 9A As of March 31, December 31, September 30, June 30, March 31, (dollars in thousands, except per share data) 2026 2025 2025 2025 2025 Tangible Common Equity: Total shareholders' equity $ 262,923 $ 259,529 $ 250,438 $ 209,365 $ 202,104 Less: Goodwill and intangibles (6,243 ) (6,262 ) (6,186 ) (6,191 ) (6,199 ) Adjusted for: Mortgage servicing rights 1,280 1,266 1,156 1,122 1,093 Tangible Common Equity $ 257,960 $ 254,533 $ 245,408 $ 204,296 $ 196,998 Common shares outstanding 11,985,414 11,980,412 11,978,921 10,278,921 10,274,271 Book value per common share 21.94 21.66 20.91 20.37 19.67 Tangible book value per common share 21.52 21.25 20.49 19.88 19.17 Tangible assets: Total assets $ 2,348,547 $ 2,306,586 $ 2,255,389 $ 2,221,245 $ 2,190,391 Less: Goodwill and intangibles (6,243 ) (6,262 ) (6,186 ) (6,191 ) (6,199 ) Adjusted for: Mortgage servicing rights 1,280 1,266 1,156 1,122 1,093 Tangible assets $ 2,343,584 $ 2,301,590 $ 2,250,359 $ 2,216,176 $ 2,185,285 Tangible common equity to tangible assets 11.01 % 11.06 % 10.91 % 9.22 % 9.01 % ROATCE (unaudited) Table 9B As of and for the Three Months Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2026 2025 2025 2025 2025 Net income $ 6,329 $ 7,136 $ 6,741 $ 5,965 $ 5,050 Average shareholders' equity 264,232 256,814 246,688 205,837 199,763 Return on average shareholders' equity(1) 9.71 % 11.02 % 10.84 % 11.62 % 10.25 % Average Tangible Common Equity: Average shareholders' equity $ 264,232 $ 256,814 $ 246,688 $ 205,837 $ 199,763 Less: Average goodwill and intangibles (6,270 ) (6,166 ) (6,176 ) (6,168 ) (6,328 ) Adjusted for: Average mortgage servicing rights 1,291 1,155 1,128 1,082 1,198 Average tangible common equity $ 259,253 $ 251,803 $ 241,640 $ 200,751 $ 194,633 Return on average tangible common(1) shareholders' equity 9.90 % 11.24 % 11.07 % 11.92 % 10.52 % (1) Represents annualized data. Adjusted Nonperforming Assets to Total Assets (unaudited) Table 9C As of March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2026 2025 2025 2025 2025 Total nonperforming assets $ 18,183 $ 18,306 $ 14,192 $ 14,704 $ 15,370 Total assets 2,348,547 2,306,586 2,255,389 2,221,245 2,190,391 GAAP-based nonperforming assets to total assets 0.77 % 0.79 % 0.63 % 0.66 % 0.70 % Total nonperforming assets $ 18,183 $ 18,306 $ 14,192 $ 14,704 $ 15,370 Adjusted for: Guaranteed portions of nonaccrual loans 3,657 4,089 4,457 4,583 4,692 Adjusted total nonperforming assets $ 14,526 $ 14,217 $ 9,735 $ 10,121 $ 10,678 Total assets $ 2,348,547 $ 2,306,586 $ 2,255,389 $ 2,221,245 $ 2,190,391 Adjusted nonperforming assets to total assets 0.62 % 0.62 % 0.43 % 0.46 % 0.49 % PPNR (unaudited) Table 9D As of and for the Three Months Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2026 2025 2025 2025 2025 Net income (GAAP-based) $ 6,329 $ 7,136 $ 6,741 $ 5,965 $ 5,050 Plus: Income tax expense 1,956 1,598 2,040 1,064 1,542 Provision for credit losses 382 1,162 653 752 629 Pre-tax, pre-provision net revenue $ 8,667 $ 9,896 $ 9,434 $ 7,781 $ 7,221 Core Deposits (unaudited) Table 9E As of March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2026 2025 2025 2025 2025 Total Deposits $ 2,057,144 $ 1,987,684 $ 1,949,672 $ 1,968,301 $ 1,937,693 Less: Brokered CDs 258,591 307,034 294,908 307,892 287,335 Core deposits(1) $ 1,798,553 $ 1,680,650 $ 1,654,764 $ 1,660,409 $ 1,650,358 (1) The Company defines its core deposits as total deposits, less brokered certificates of deposit. Source: CoastalSouth Bancshares