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 $6.7 million, or $0.54 per diluted share, for the third quarter of 2025, compared to approximately $6.0 million, or $0.57 per diluted share, for the second quarter of 2025, and $7.9 million, or $0.75 per diluted share, for the third quarter of 2024. For the year-to-date period ending September 30, 2025, the Company reported net income of $17.8 million, or $1.58 per diluted share, compared with $16.2 million, or $1.55 per diluted share, for the same period in 2024.

Commenting on the Company’s results, President and Chief Executive Officer, Stephen R. Stone stated, “Following the completion of our initial public offering on July 2, 2025, the Company continued to deliver excellent financial performance through the third quarter of 2025. Loan production continued to be robust with over $137.3 million in new commitments originated during the third quarter of 2025 while maintaining strong asset quality metrics. Given the recent acceleration of mergers and acquisition activity in our markets, we continue to focus on recruiting new bankers to expand our presence within our markets and grow new relationships.”

Third Quarter 2025 Performance Highlights:

Net income of $6.7 million or $0.54 per diluted share
Return on average assets (“ROAA”) of 1.20%
Return on average equity (“ROAE”) of 10.84%; Return on average tangible common equity (“ROATCE”) of 11.07%¹
Net interest margin of 3.58%, an increase of 12 basis points from the second quarter of 2025
Efficiency ratio of 55.69% for the third quarter of 2025
Loans held for investment (“LHFI”) production of $137.3 million in commitments led to LHFI growth of $25.8 million, up 6.7% annualized from the second quarter of 2025
Book value per share growth of $0.54, or 10.5% annualized, to $20.91 at September 30, 2025; Tangible book value¹per share growth of $0.61, or 12.2% annualized, to $20.49 at September 30, 2025 from the second quarter of 2025
Total shareholders’ equity to total assets of 11.10%, compared to 9.43% at June 30, 2025; Tangible common equity¹ to tangible assets¹ of 10.91%, compared to 9.22% at June 30, 2025
Net charge-offs to average loans held for investment of 0.03%
Nonperforming assets to total assets of 0.63%; adjusted nonperforming assets to total assets¹ of 0.43%
Allowance for credit losses (“ACL”) on LHFI to total LHFI of 1.16%; ACL on LHFI to nonperforming loans of 127.03%
Completed initial public offering of 2,035,000 shares on July 2, 2025 with an initial offering price of $21.50. The Company issued 1,700,000 shares for net proceeds of $30.2 million following discounts, commissions, and expenses
Redeemed $15.0 million of subordinated debt; recognized $236 thousand of accelerated debt issuance expense

Operating Highlights

Net interest income totaled $19.2 million for the third quarter of 2025, an increase of $1.1 million, or 6.2%, from $18.1 million for the second quarter of 2025 and an increase of $2.2 million, or 13.1% from the third quarter of 2024. The Company’s net interest margin expanded to 3.58% for the third quarter of 2025, a 12 basis point increase from the second quarter of 2025 and a 26 basis point increase from the third quarter of 2024.

The yield on average interest-earning assets for the third quarter of 2025 increased to 6.14% from 6.08% for the second quarter of 2025. This increase was primarily related to an overall yield increase in all categories except a 2 basis point decrease in yield on LHFI albeit with an increased average volume of approximately $37.2 million in the LHFI portfolio quarter over quarter. The yield on available-for-sale securities was positively impacted by $225 thousand of premium recognized on corporate bonds that were called ahead of maturity. Compared to the third quarter of 2024, yields on earning assets decreased 23 basis points to 6.14% from 6.37%. The decrease was primarily attributable to a 37 basis point decrease in LHFI, a 26 basis point decrease in the yield on the loans held for sale (“LHFS”) portfolio, and a net decrease in other earning assets categories.

____________________

¹ Considered non-GAAP financial measure – See “Non-GAAP Financial Measures” and reconciliation of GAAP to non-GAAP financial measures in tables 10A – 10I.

The Company’s total cost of funds was 2.79% for the third quarter of 2025, a decrease of 1 basis point and 45 basis points compared with the second quarter of 2025 and third quarter of 2024, respectively. The cost of funds was impacted by the recognition of a $236 thousand debt issuance costs which were accelerated due to redemption of the Company’s subordinated debt. Deposit costs decreased 3 basis points during the third quarter of 2025 to 2.72%, compared to 2.75% in the second quarter of 2025. The cost of interest-bearing deposits decreased 4 basis points during the third quarter of 2025 to 3.23%, compared with 3.27% in the second quarter of 2025, reflecting continued repricing of certificates of deposits in the third quarter of 2025.

Noninterest income totaled $2.1 million for the third quarter of 2025, an increase of $305 thousand, or 17.0%, from the second quarter of 2025, primarily attributable to an increase in gain on sale of government guaranteed loans (“GGL”). Noninterest expense totaled $11.9 million for the third quarter of 2025, a decrease of $236 thousand, or 2.0%, from the second quarter of 2025, primarily due to lower other professional fees, offset by a net increase in other noninterest expense categories.

The Company’s effective tax rate for the third quarter of 2025 was 23.2%, compared to 15.1% for the second quarter of 2025 and 22.1% for the third quarter of 2024. The increase in effective tax rate from the second quarter of 2025 was primarily due to a higher recognition of renewable energy tax credits in the second quarter of 2025.

Balance Sheet Trends

Total assets were $2.26 billion at September 30, 2025, an increase of $156.7 million, or 7.5%, from $2.10 billion at December 31, 2024. LHFS were $231.6 million at September 30, 2025, an increase of $57.6 million, or 33.1%, from $174.0 million at December 31, 2024. Gross LHFI were $1.55 billion at September 30, 2025, an increase of $143.5 million, or 10.2%, from $1.41 billion at December 31, 2024.

Total deposits were $1.95 billion at September 30, 2025, an increase of $114.9 million, or 6.3%, from $1.83 billion at December 31, 2024. Noninterest-bearing deposits were $313.6 million at September 30, 2025, or 16.1% of total deposits, compared to $302.9 million, or 16.5% of total deposits, at December 31, 2024. Brokered certificates of deposits, a component of time deposits, were $294.9 million at September 30, 2025, as compared to $274.9 million at December 31, 2024, an increase of $20.0 million, or 7.3%.

Credit Quality

During the third quarter of 2025, the Company recorded a provision (recovery) for credit losses of $653 thousand, compared to $752 thousand and ($1.0) million during the second quarter of 2025 and third quarter of 2024, respectively. The provision expense recorded during the third quarter of 2025 was primarily due to increased loan production and current period net charge-offs, offset by other changes in loss rates and economic factors. The Company’s annualized net charge-offs to average LHFI ratio was 0.03% for the third quarter of 2025 as compared to 0.06% and 0.02% during the second quarter of 2025 and third quarter of 2024, respectively.

Nonperforming assets totaled $14.2 million, or 0.63% of total assets, at September 30, 2025 compared to $15.9 million, or 0.76% of total assets at December 31, 2024. The $1.7 million decrease in nonperforming assets at September 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 $9.7 million, or 0.43% of total assets, at September 30, 2025 compared to $11.1 million, or 0.53% of total assets, at December 31, 2024.

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

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 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 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 Nine Months Ended
(dollars in thousands except		September 30,			June 30,			March 31,			December 31,			September 30,				September 30,			September 30,
per share amounts)		2025			2025			2025			2024			2024				2025			2024
Selected Operating Data:
Interest income	$		32,890	$		31,793	$		30,024	$		30,537	$		32,554		$		94,707	$		93,112
Interest expense			13,700			13,715			13,265			14,266			15,588				40,680			44,061
Net interest income			19,190			18,078			16,759			16,271			16,966				54,027			49,051
Provision (recovery) for credit losses			653			752			629			1,240			(1,023	)			2,034			(687	)
Noninterest income			2,100			1,795			1,881			1,958			2,961				5,776			2,556
Noninterest expense			11,856			12,092			11,419			10,335			10,830				35,367			31,733
Income tax expense			2,040			1,064			1,542			950			2,236				4,646			4,361
Net income			6,741			5,965			5,050			5,704			7,884				17,756			16,200
Adjusted net income ⁽¹⁾			6,749			5,965			5,050			5,704			7,884				17,764			18,854
Share and Per Share Data:
Basic earnings per share	$		0.57	$		0.58	$		0.49	$		0.56	$		0.77		$		1.64	$		1.59
Adjusted basic earnings per share ⁽¹⁾	$		0.57	$		0.58	$		0.49	$		0.56	$		0.77		$		1.64	$		1.85
Diluted earnings per share	$		0.54	$		0.57	$		0.47	$		0.54	$		0.75		$		1.58	$		1.55
Adjusted diluted earnings per share ⁽¹⁾	$		0.54	$		0.57	$		0.47	$		0.54	$		0.75		$		1.58	$		1.81
Book value per share	$		20.91	$		20.37	$		19.67	$		19.01	$		18.86		$		20.91	$		18.86
Tangible book value per share ⁽¹⁾	$		20.49	$		19.88	$		19.17	$		18.51	$		18.35		$		20.49	$		18.35
Shares of common stock outstanding			11,978,921			10,278,921			10,274,271			10,270,146			10,250,446				11,978,921			10,250,446
Weighted average diluted shares outstanding			12,325,462			10,612,255			10,642,078			10,596,364			10,544,087				11,217,972			10,420,646
Selected Balance Sheet Data:
Total assets	$		2,255,389	$		2,221,245	$		2,190,391	$		2,098,712	$		2,129,346		$		2,255,389	$		2,129,346
Securities available-for-sale, at fair value ⁽²⁾			334,955			331,760			325,478			335,267			355,174				334,955			355,174
Gross loans held for investment			1,552,976			1,527,199			1,472,232			1,409,443			1,409,913				1,552,976			1,409,913
Loans held for sale			231,593			209,101			187,481			174,033			193,938				231,593			193,938
Allowance for credit losses			18,028			17,497			17,104			17,118			15,615				18,028			15,615
Goodwill and other intangible assets			6,186			6,190			6,199			6,386			6,451				6,186			6,451
Total deposits			1,949,672			1,968,301			1,937,693			1,834,802			1,807,315				1,949,672			1,807,315
Core deposits ⁽¹⁾			1,654,764			1,660,409			1,650,358			1,559,904			1,628,706				1,654,764			1,628,706
Other borrowings			25,000			14,753			20,738			41,725			96,712				25,000			96,712
Total Shareholders’ equity			250,438			209,365			202,104			195,232			193,303				250,438			193,303

⁽¹⁾	Considered non-GAAP financial measure – See “Non-GAAP Financial Measures” and reconciliation of GAAP to non-GAAP financial measures in tables 10A – 10I.
⁽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 Nine Months Ended
		September 30,				June 30,				March 31,				December 31,					September 30,				September 30,				September 30,
(dollars in thousands)		2025				2025				2025				2024					2024				2025				2024
Performance Ratios:
Pre-tax pre-provision net revenue (PPNR) ⁽¹⁾	$		9,434		$		7,781		$		7,221		$		7,894			$		9,097		$		24,436		$		19,874
Return on average assets (ROAA) ⁽²⁾			1.20	%			1.09	%			0.97	%			1.07		%			1.47	%			1.09	%			1.04	%
Adjusted return on average assets (Adj. ROAA) ⁽¹⁾⁽²⁾			1.20				1.09				0.97				1.07					1.47				1.09				1.21
Return on average equity ⁽²⁾			10.84				11.62				10.25				11.65					16.91				10.91				12.30
Adjusted return on average equity ⁽¹⁾⁽²⁾			10.85				11.62				10.25				11.65					16.91				10.91				14.32
Return on average tangible common equity (ROATCE) ⁽¹⁾⁽²⁾			11.07				11.92				10.52				11.97					17.40				11.17				12.68
Adjusted return on average tangible common equity (Adj. ROATCE) ⁽¹⁾⁽²⁾			11.08				11.92				10.52				11.97					17.40				11.18				14.76
Net interest rate spread ⁽²⁾			2.83				2.76				2.67				2.42					2.48				2.76				2.50
Net interest margin ⁽²⁾			3.58				3.46				3.38				3.21					3.32				3.48				3.32
Efficiency ratio			55.69				60.85				61.26				56.70					54.35				59.14				61.49
Efficiency ratio, as adjusted ⁽¹⁾			55.66				60.85				61.26				56.70					54.35				59.13				57.62
Noninterest income to average total assets ⁽²⁾			0.37				0.33				0.36				0.37					0.55				0.35				0.16
Noninterest income to total revenue			9.86				9.03				10.09				10.74					14.86				9.66				4.95
Adjusted noninterest income to total adjusted revenue ⁽¹⁾			9.91				9.03				10.09				10.74					14.86				9.67				10.93
Noninterest expense to average total assets ⁽²⁾			2.11				2.21				2.19				1.94					2.02				2.17				2.04
Average interest-earning assets to average interest-bearing liabilities			129.16				126.50				126.31				127.90					127.59				127.34				127.63
Average equity to average total assets			11.08				9.37				9.46				9.20					8.70				9.99				8.47
Asset Quality Data:
Net charge-offs to average LHFI ⁽²⁾			0.03	%			0.06	%			0.00	%			(0.02	)	%			0.02	%			0.03	%			0.02	%
Net charge-offs to total average loans ⁽²⁾			0.03				0.05				0.00				(0.02	)				0.02				0.03				0.02
Total allowance for credit losses to total LHFI			1.16				1.15				1.16				1.21					1.11				1.16				1.11
Total allowance for credit losses to total loans			1.01				1.01				1.03				1.08					0.97				1.01				0.97
Total allowance for credit losses to nonperforming loans			127.03				118.99				117.11				114.07					184.64				127.03				184.64
Nonperforming loans to gross LHFI			0.91				0.96				0.99				1.06					0.60				0.91				0.60
Nonperforming assets to total assets			0.63				0.66				0.70				0.76					0.44				0.63				0.44
Adjusted nonperforming assets to total assets ⁽¹⁾			0.43				0.46				0.49				0.53					0.21				0.43				0.21
Balance Sheet and Capital Ratios:
Loan-to-deposit ratio			91.53	%			88.21	%			85.65	%			86.30		%			88.74	%			91.53	%			88.74	%
Noninterest bearing deposits to total deposits			16.08				15.92				15.52				16.51					17.28				16.08				17.28
Total shareholders’ equity to total assets			11.10				9.43				9.23				9.30					9.08				11.10				9.08
Tangible common equity to tangible assets ⁽¹⁾			10.91				9.22				9.01				9.08					8.86				10.91				8.86
Tier 1 leverage ratio ⁽³⁾			11.15				10.22				10.62				10.64					10.26				11.15				10.26
Common equity tier 1 ratio ⁽³⁾			11.94				11.09				11.55				12.07					11.72				11.94				11.72
Tier 1 risk-based capital ratio ⁽³⁾			11.94				11.09				11.55				12.07					11.72				11.94				11.72
Total risk-based capital ratio ⁽³⁾			12.90				12.04				12.52				12.97					12.55				12.90				12.55
Other:
Number of branches			11				11				11				11					11				11				11
Number of full-time equivalent employees			194				188				180				181					181				187				180

⁽¹⁾	Considered non-GAAP financial measure – See “Non-GAAP Financial Measures” and reconciliation of GAAP to non-GAAP financial measures in tables 10A – 10I.
⁽²⁾	Represents annualized data.
⁽³⁾	Ratios are for Coastal States Bank only. Ratios for September 30, 2025 are preliminary.

Quarter End Balance Sheets (unaudited)													Table 2
	September 30,			June 30,			March 31,			December 31,			September 30,
(dollars in thousands)	2025			2025			2025			2024			2024
Assets
Cash and due from banks	$	20,088		$	23,245		$	19,380		$	37,320		$	17,722
Federal funds sold		6,191			20,045			79,153			30,641			43,602
Investment securities ⁽¹⁾		342,990			338,601			332,312			342,750			361,935
Loans held for sale (LHFS)		231,593			209,101			187,481			174,033			193,938
Loans held for investment (LHFI)		1,552,976			1,527,199			1,472,232			1,409,443			1,409,913
Allowance for credit losses on LHFI		(18,028	)		(17,497	)		(17,104	)		(17,118	)		(15,615	)
Loans held for investment, net		1,534,948			1,509,702			1,455,128			1,392,325			1,394,298
Bank-owned life insurance		47,833			47,373			46,924			46,484			46,044
Premises, furniture and equipment, net		18,186			18,166			17,837			17,796			17,882
Deferred tax asset		16,262			17,211			17,123			18,148			16,772
Goodwill & intangible assets ⁽²⁾		6,186			6,190			6,199			6,386			6,451
Other assets		31,112			31,611			28,854			32,829			30,702
Total assets	$	2,255,389		$	2,221,245		$	2,190,391		$	2,098,712		$	2,129,346

Liabilities and shareholders’ equity
Liabilities
Deposits
Noninterest bearing transaction accounts	$	313,604		$	313,386		$	300,678		$	302,907		$	312,290
Interest-bearing transaction accounts		198,753			209,816			191,452			181,068			183,707
Savings and money market		634,826			628,729			650,050			591,626			654,192
Time deposits		802,489			816,370			795,513			759,201			657,126
Total deposits		1,949,672			1,968,301			1,937,693			1,834,802			1,807,315
Federal Home Loan Bank of Atlanta advances		25,000			–			–			15,000			–
Subordinated debt, net		–			14,753			14,741			14,730			14,718
Revolving commercial line of credit, net		–			–			5,997			11,995			11,994
Federal Reserve Bank – Bank Term Funding Program (“BTFP”) advances		–			–			–			–			70,000
Other liabilities		30,279			28,826			29,856			26,953			32,016
Total liabilities		2,004,951			2,011,880			1,988,287			1,903,480			1,936,043

Shareholders’ equity
Voting common stock		10,449			8,107			8,102			8,098			8,078
Nonvoting common stock		1,530			2,172			2,172			2,172			2,172
Capital surplus		189,654			159,267			158,997			158,755			158,463
Accumulated income		59,750			53,009			47,044			41,994			36,290
Accumulated other comprehensive loss		(10,945	)		(13,190	)		(14,211	)		(15,787	)		(11,700	)
Total shareholders’ equity		250,438			209,365			202,104			195,232			193,303

Total liabilities and shareholders’ equity	$	2,255,389		$	2,221,245		$	2,190,391		$	2,098,712		$	2,129,346