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 share
Return on average assets ("ROAA") of 1.10%
Return on average equity ("ROAE") of 9.71%; Return on average tangible common equity¹ ("ROATCE") of 9.90%
Net interest margin of 3.59%, a decrease of 1 basis point from the fourth quarter of 2025
Total deposits increased $69.5 million, driven by growth of $117.9 million in core deposits¹ and a decrease in brokered certificates of deposits of $48.4 million
Loans held for investment ("LHFI") production² 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 2025
Book value per share growth of $0.28, or 5.24% annualized, to $21.94 at March 31, 2026; Tangible book value¹per share growth of $0.27, or 5.15% annualized, to $21.52 at March 31, 2026 from the fourth quarter of 2025
Total shareholders' equity to total assets of 11.20%, compared to 11.25% as of the fourth quarter of 2025; Tangible common equity¹ to tangible assets¹ of 11.01%, compared to 11.06% at December 31, 2025
Net charge-offs to average loans held for investment of 0.01%
Nonperforming assets to total assets of 0.77%; adjusted nonperforming assets to total assets¹ 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.

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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
O

CoastalSouth Bancshares, Inc. Reports Earnings for First Quarter 2026