ATLANTA–(BUSINESS WIRE)–CoastalSouth Bancshares, Inc. (“CoastalSouth” or the “Company”) (NYSE: COSO), the holding company for Coastal States Bank (the “Bank”), today reported net income of approximately $6.0 million, or $0.57 per diluted share, for the second quarter of 2025, compared to $5.1 million, or $0.47 per diluted share, for the first quarter of 2025, and $5.9 million, or $0.56 per diluted share, for the second quarter of 2024. For the year-to-date period ending June 30, 2025, the Company reported net income of $11.0 million, or $1.04 per diluted share, compared with $8.3 million, or $0.80 per diluted share, for the same period in 2024.

On July 3, 2025, the Company completed its initial public offering of 2,035,000 shares of common stock at a public offering price of $21.50 per share, before underwriting discounts and commissions. The Company received proceeds, net of underwriting discounts and commissions, of approximately $34.0 million in the offering related to the sale of 1,700,000 shares from the Company, and 335,000 additional shares were sold by selling shareholders. The Company’s common stock began trading on the New York Stock Exchange on July 2, 2025, under the ticker symbol “COSO”. The underwriters of the initial public offering have a 30-day option to purchase an additional 305,250 shares of common stock from selling shareholders at the initial public offering price to the public, less the underwriting discounts and commissions, from certain selling shareholders.

Commenting on the Company’s results, President and Chief Executive Officer, Stephen R. Stone stated, “The Company delivered strong financial results in the second quarter with growth in both loans held for investment and loans held for sale, continued growth in core deposits, and continued improvement to our net interest margin. With the momentum of the first six months of this year, particularly with respect to loan originations, and the addition of four new commercial bankers and two new business development officers, we are well-positioned as we head into the second half of 2025.”

Second Quarter 2025 Performance Highlights:

Net income of $6.0 million or $0.57 per diluted share
Return on average assets (“ROAA”) of 1.09%
Return on average equity (“ROAE”) of 11.62%; Return on average tangible common equity (“ROATCE”) of 11.92%¹
Net interest margin of 3.46%, an increase of 8 basis points from the first quarter
Loans held for investment (“LHFI”) production of $201.1 million in commitments led to LHFI growth of $55.0 million, up 15.0% annualized from the first quarter
Book value per share growth of $0.70, or 14.2% annualized, to $20.37 at June 30, 2025; Tangible book value¹per share growth of $0.71, or 14.9% annualized, to $19.88 at June 30, 2025 from the first quarter
Total shareholders’ equity to total assets of 9.43%, compared to 9.23% at March 31, 2025; Tangible common equity ¹ to tangible assets ¹ of 9.22%, compared to 9.01% at March 31, 2025
Net charge-offs to average loans held for investment of 0.06%
Nonperforming assets to total assets of 0.66%; adjusted nonperforming assets to total assets ¹ of 0.46%
Allowance for credit losses (“ACL”) on LHFI to total LHFI of 1.15%; ACL on LHFI to nonperforming loans of 118.99%

Operating Highlights

Net interest income totaled $18.1 million for the second quarter of 2025, an increase of $1.3 million, or 7.9%, from $16.8 million for the first quarter of 2025 and an increase of $1.4 million, or 8.3% from the second quarter of 2024. The Company’s net interest margin expanded to 3.46% for the second quarter of 2025, an 8 basis point increase from the first quarter of 2025 and a 3 basis point increase from the second quarter of 2024.

The yield on average interest-earning assets for the second quarter of 2025 increased to 6.08% from 6.05% for the first quarter of 2025. This increase was primarily related to a 1 basis point increase in yield on LHFI and an increased average volume of approximately $77.8 million in the LHFI portfolio quarter over quarter. Compared to the second quarter of 2024, yields on earning assets decreased 31 basis points from 6.39%. The decrease was primarily attributable to a 33 basis point decrease in LHFI and an 84 basis point decrease in the yield on the loans held for sale portfolio.

The Company’s total cost of funds was 2.80% for the second quarter of 2025, a decrease of 5 basis points and 33 basis points compared with the first quarter of 2025 and second quarter of 2024, respectively Deposit costs decreased 5 basis points during the second quarter of 2025 to 2.75%, compared to 2.80% in the first quarter of 2025. The cost of interest-bearing deposits decreased 5 basis points during the second quarter of 2025 to 3.27%, compared with 3.32% in the first quarter of 2025, reflecting continued repricing of certificates of deposits in the second quarter of 2025.

Noninterest income totaled $1.8 million for the second quarter of 2025, a decrease of $86 thousand, or 4.6%, from the first quarter of 2025, primarily due to a decrease in other noninterest income, offset by a net increase in mortgage banking related income, gain on sale of government guaranteed loans (“GGL”), and other categories. Noninterest expense totaled $12.1 million for the second quarter of 2025, an increase of $673 thousand, or 5.9%, from the first quarter of 2025, primarily due to higher salaries and employee benefits and other professional fees. A number of strategic hires were made during the quarter including new commercial bankers, new GGL business development officers, and one mortgage loan officer.

The Company’s effective tax rate for the second quarter of 2025 was 15.1%, compared to 23.4% for the first quarter of 2025 and 21.1% for the second quarter of 2024. The decrease in effective tax rate from the first quarter of 2025 and the second quarter of 2024 was primarily due to the recognition of renewable energy tax credits.

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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 10A – 10H.

Balance Sheet Trends

Total assets were $2.22 billion at June 30, 2025, an increase of $122.5 million, or 5.8%, from $2.10 billion at December 31, 2024. Loans held for sale (“LHFS”) were $209.1 million at June 30, 2025, an increase of $35.1 million, or 20.2%, from $174.0 million at December 31, 2024. Gross LHFI were $1.53 billion at June 30, 2025, an increase of $117.8 million, or 8.4%, from $1.41 billion at December 31, 2024.

Total deposits were $1.97 billion at June 30, 2025, an increase of $133.5 million, or 7.3%, from $1.83 billion at December 31, 2024. Noninterest-bearing deposits were $313.4 million at June 30, 2025, compared to $302.9 million at December 31, 2024. Brokered certificates of deposits, a component of time deposits, were $307.9 million at June 30, 2025, as compared to $274.9 million at December 31, 2024, an increase of $33.0 million, or 12.0%.

Credit Quality

During the second quarter of 2025, the Company recorded a provision for credit losses of $752 thousand, compared to $629 thousand and $173 thousand during the first quarter of 2025 and second quarter of 2024, respectively. The provision expense recorded during the second quarter of 2025 was primarily due to increased loan production of LHFI, changes in economic factors, and current period net charge-offs, offset by other changes in loss rates. The Company’s annualized net charge-offs to average LHFI ratio was 0.06% for the second quarter of 2025 as compared to 0.00% and 0.03% during the first quarter of 2025 and second quarter of 2024, respectively.

Nonperforming assets totaled $14.7 million, or 0.66% of total assets, at June 30, 2025 compared to $15.9 million, or 0.76% of total assets at December 31, 2024. The $1.2 million decrease in nonperforming assets at June 30, 2025 from December 31, 2024 was due to the sale of other real estate owned and payments collected on nonaccrual loans during the period. Adjusted nonperforming assets², which excludes the guaranteed portions of nonaccrual loans, was $10.1 million, or 0.46% of total assets, at June 30, 2025 compared to $11.1 million, or 0.53% of total assets, at December 31, 2024.

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² Considered non-GAAP financial measure – See “Non-GAAP Financial Measures” and reconciliation of GAAP to non-GAAP financial measures in tables 10A – 10H.

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 a cyber-attack incidents or a deficiencies in cyber security; risks related to potential acquisitions; government actions, including tariffs, or trade wards (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 worlds 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 final prospectus filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, filed with the Securities and Exchange Commission (the “SEC”) on July 2, 2025 (Registration No. 333-287854), relating to our initial public offering, 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 except		June 30,			March 31,			December 31,			September 30,				June 30,			June 30,			June 30,
per share amounts)		2025			2025			2024			2024				2024			2025			2024
Selected Operating Data:
Interest income	$		31,793	$		30,024	$		30,537	$		32,554		$		31,170	$		61,817	$		60,558
Interest expense			13,715			13,265			14,266			15,588				14,470			26,980			28,473
Net interest income			18,078			16,759			16,271			16,966				16,700			34,837			32,085
Provision (recovery) for credit losses			752			629			1,240			(1,023	)			173			1,381			336
Noninterest income (loss)			1,795			1,881			1,958			2,961				1,589			3,676			(405	)
Noninterest expense			12,092			11,419			10,335			10,830				10,652			23,511			20,903
Income tax expense			1,064			1,542			950			2,236				1,577			2,606			2,125
Net income			5,965			5,050			5,704			7,884				5,887			11,015			8,316
Adjusted net income ⁽¹⁾			5,965			5,050			5,704			7,884				5,887			11,015			10,970
Share and Per Share Data:
Basic earnings per share	$		0.58	$		0.49	$		0.56	$		0.77		$		0.58	$		1.07	$		0.82
Adjusted basic earnings per share ⁽¹⁾	$		0.58	$		0.49	$		0.56	$		0.77		$		0.57	$		1.07	$		1.08
Diluted earnings per share	$		0.57	$		0.47	$		0.54	$		0.75		$		0.56	$		1.04	$		0.80
Adjusted diluted earnings per share ⁽¹⁾	$		0.57	$		0.47	$		0.54	$		0.75		$		0.56	$		1.04	$		1.06
Book value per share (at period end)	$		20.37	$		19.67	$		19.01	$		18.86		$		17.58	$		20.37	$		17.58
Tangible book value per share ⁽¹⁾	$		19.88	$		19.17	$		18.51	$		18.35		$		17.07	$		19.88	$		17.07
Shares of common stock outstanding			10,278,921			10,274,271			10,270,146			10,250,446				10,250,446			10,278,921			10,250,446
Weighted average diluted shares outstanding			10,612,255			10,642,078			10,596,364			10,544,087				10,445,144			10,636,997			10,344,815
Selected Balance Sheet Data:
Total assets	$		2,221,245	$		2,190,391	$		2,098,712	$		2,129,346		$		2,115,547	$		2,221,245	$		2,115,547
Securities available-for-sale, at fair value ⁽²⁾			331,760			325,478			335,267			355,174				339,937			331,760			339,937
Gross loans held for investment			1,527,199			1,472,232			1,409,443			1,409,913				1,442,077			1,527,199			1,442,077
Loans held for sale			209,101			187,481			174,033			193,938				154,885			209,101			154,885
Allowance for credit losses			17,497			17,104			17,118			15,615				16,002			17,497			16,002
Goodwill and other intangible assets			6,190			6,199			6,386			6,451				6,276			6,190			6,276
Deposits			1,968,301			1,937,693			1,834,802			1,807,315				1,805,590			1,968,301			1,805,590
Other borrowings			14,753			20,738			41,725			96,712				96,699			14,753			96,699
Total Shareholders’ equity			209,365			202,104			195,232			193,303				180,168			209,365			180,168
⁽¹⁾ Considered non-GAAP financial measure – See “Non-GAAP Financial Measures” and reconciliation of GAAP to non-GAAP financial measures in tables 10A – 10H. ⁽²⁾ The Company did not have securities held to maturity in any of the periods presented.

COASTALSOUTH BANCSHARES, INC. AND SUBSIDIARY FINANCIAL TABLES

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)		2025				2025				2024					2024				2024				2025				2024
Performance Ratios:
Pre-tax pre-provision net revenue (PPNR) ⁽¹⁾	$		7,781		$		7,221		$		7,894			$		9,097		$		7,637		$		15,002		$		10,777
Return on average assets (ROAA) ⁽²⁾			1.09	%			0.97	%			1.07		%			1.47	%			1.15	%			1.03	%			0.82		%
Adjusted return on average assets (Adj. ROAA) ⁽¹⁾⁽²⁾			1.09				0.97				1.07					1.47				1.15				1.03				1.08
Return on average equity ⁽²⁾			11.62				10.25				11.65					16.91				13.52				10.95				9.78
Adjusted return on average equity ⁽¹⁾⁽²⁾			11.62				10.25				11.65					16.91				13.52				10.95				12.90
Return on average tangible common equity (ROATCE) ⁽¹⁾⁽²⁾			11.92				10.52				11.97					17.40				13.94				11.23				10.09
Adjusted return on average tangible common equity (Adj. ROATCE) ⁽¹⁾⁽²⁾			11.92				10.52				11.97					17.40				13.94				11.23				13.31
Net interest rate spread ⁽²⁾			2.76				2.67				2.42					2.48				2.58				2.72				2.51
Net interest margin ⁽²⁾			3.46				3.38				3.21					3.32				3.43				3.42				3.32
Efficiency ratio			60.85				61.26				56.70					54.35				58.24				61.05				65.98
Efficiency ratio, as adjusted ⁽¹⁾			60.85				61.26				56.70					54.35				58.24				61.05				59.48
Noninterest income to average total assets ⁽²⁾			0.33				0.36				0.37					0.55				0.31				0.34				(0.04	)
Noninterest income to total revenue			9.03				10.09				10.74					14.86				8.69				9.54				(1.28	)
Adjusted noninterest income to total adjusted revenue ⁽¹⁾			9.03				10.09				10.74					14.86				8.69				9.54				8.71
Noninterest expense to average total assets ⁽²⁾			2.21				2.19				1.94					2.02				2.07				2.20				2.05
Average interest-earning assets to average interest-bearing liabilities			126.50				126.31				127.90					127.59				128.29				126.41				127.65
Average equity to average total assets			9.37				9.46				9.20					8.70				8.48				9.41				8.34
Asset Quality Data:
Net charge-offs to average LHFI ⁽²⁾			0.06	%			0.00	%			(0.02	)	%			0.02	%			0.03	%			0.03	%			0.01		%
Net charge-offs to total average loans ⁽²⁾			0.05				0.00				(0.02	)				0.02				0.03				0.03				0.01
Total allowance for credit losses to total LHFI			1.15				1.16				1.21					1.11				1.11				1.15				1.11
Total allowance for credit losses to total loans			1.01				1.03				1.08					0.97				1.00				1.01				1.00
Total allowance for credit losses to nonperforming loans			118.99				117.11				114.07					184.64				182.13				118.99				182.13
Nonperforming loans to gross LHFI			0.96				0.99				1.06					0.60				0.61				0.96				0.61
Nonperforming assets to total assets			0.66				0.70				0.76					0.44				0.42				0.66				0.42
Adjusted nonperforming assets to total assets ⁽¹⁾			0.46				0.49				0.53					0.21				0.18				0.46				0.18
Balance Sheet and Capital Ratios:
Loan-to-deposit ratio			88.21	%			85.65	%			86.30		%			88.74	%			88.45	%			88.21	%			88.45		%
Noninterest bearing deposits to total deposits			15.92				15.52				16.51					17.28				19.10				15.92				19.10
Total shareholders’ equity to total assets			9.43				9.23				9.30					9.08				8.52				9.43				8.52
Tangible common equity to tangible assets ⁽¹⁾			9.22				9.01				9.08					8.86				8.29				9.22				8.29
Other:
Number of branches			11				11				11					11				11				11				11
Number of full-time equivalent employees			188				180				181					181				178				183				177
⁽¹⁾ Considered non-GAAP financial measure – See “Non-GAAP Financial Measures” and reconciliation of GAAP to non-GAAP financial measures in tables 10A – 10H. ⁽²⁾ Represents annualized data.

COASTALSOUTH BANCSHARES, INC. AND SUBSIDIARY FINANCIAL TABLES

Quarter End Balance Sheets (unaudited)													Table 2
	June 30,			March 31,			December 31,			September 30,			June 30,
(dollars in thousands)	2025			2025			2024			2024			2024
Assets
Cash and due from banks	$	23,245		$	19,380		$	37,320		$	17,722		$	21,385
Federal funds sold		20,045			79,153			30,641			43,602			42,057
Investment securities ⁽¹⁾		338,601			332,312			342,750			361,935			346,687
Loans held for sale (LHFS)		209,101			187,481			174,033			193,938			154,885
Loans held for investment (LHFI)		1,527,199			1,472,232			1,409,443			1,409,913			1,442,077
Allowance for credit losses on LHFI		(17,497	)		(17,104	)		(17,118	)		(15,615	)		(16,002	)
Loans held for investment, net		1,509,702			1,455,128			1,392,325			1,394,298			1,426,075
Bank-owned life insurance		47,373			46,924			46,484			46,044			45,607
Premises, furniture and equipment, net		18,166			17,837			17,796			17,882			17,533
Deferred tax asset		17,211			17,123			18,148			16,772			18,641
Goodwill & intangible assets ⁽²⁾		6,190			6,199			6,386			6,451			6,276
Other assets		31,611			28,854			32,829			30,702			36,401
Total assets	$	2,221,245		$	2,190,391		$	2,098,712		$	2,129,346		$	2,115,547

Liabilities and stockholders’ equity
Liabilities
Deposits
Noninterest bearing DDA	$	313,386		$	300,678		$	302,907		$	312,290		$	344,860
Interest bearing DDA		209,816			191,452			181,068			183,707			179,557
Savings and money market		628,729			650,050			591,626			654,192			658,542
Certificates of deposit		816,370			795,513			759,201			657,126			622,631
Total deposits		1,968,301			1,937,693			1,834,802			1,807,315			1,805,590
Federal Home Loan Bank of Atlanta advances		–			–			15,000			–			–
Subordinated debt, net		14,753			14,741			14,730			14,718			14,706
Revolving commercial line of credit, net		–			5,997			11,995			11,994			11,993
Federal Reserve Bank – Bank Term Funding Program (“BTFP”) advances		–			–			–			70,000			70,000
Other liabilities		28,826			29,856			26,953			32,016			33,090
Total liabilities		2,011,880			1,988,287			1,903,480			1,936,043			1,935,379

Stockholders’ equity
Voting common stock		8,107			8,102			8,098			8,078			8,078
Nonvoting common stock		2,172			2,172			2,172			2,172			2,172
Capital surplus		159,267			158,997			158,755			158,463			158,125
Accumulated income		53,009			47,044			41,994			36,290			28,406
Accumulated other comprehensive loss		(13,190	)		(14,211	)		(15,787	)		(11,700	)		(16,613	)
Total stockholders’ equity		209,365			202,104			195,232			193,303			180,168

Total liabilities and stockholders’ equity	$	2,221,245		$	2,190,391		$	2,098,712		$	2,129,346		$	2,115,547
⁽¹⁾ No ACL was recognized for the periods presented. ⁽²⁾ Includes commercial mortgage servicing assets of $1.1 million, $1.1 million, $1.2 million, $1.3 million, and $1.0 million for June 30, 2025, March 31, 2025, December 31, 2024, September 30, 2024 and June 30, 2024, respectively.