Texas Community Bancshares, Inc.
For the period ended Jun 30, 2026. Filed Aug 11, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 11, 2026
TCBS$17.10-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001104659-26-057280
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-11.
0001104659-26-094088
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 74 previous paragraphs and 94 current paragraphs.
33 unchanged; 39 reworded; 17 added; 2 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 59 previous and 63 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Net Income. Net income was $970,000 for the three months ended June 30, 2026, compared to net income of $678,000 for the three months ended June 30, 2025, an increase of $292,000, or 43.1%. The increase was primarily due to a $506,000, or 15.9% increase in net interest income to $3.7 million for the three months ended June 30, 2026, from $3.2 million for the three months ended June 30, 2025. Noninterest income increased $152,000, or 26.3%, from $579,000 for the three months ended June 30, 2025, to $731,000 for the three months ended June 30, 2026. This was partially offset by increases of $146,000 in the provision for loan losses, $187,000 in noninterest expense, and $33,000 in income tax expense.
Current report
interest-bearing liabilities of $9.8 million, or 2.9%, to $330.5 million for the three months ended June 30, 2026 from $340.3 million for the three months ended June 30, 2025 and a decrease in the average cost of interest-bearing liabilities of 11 basis points, or 4.0%, from 2.70% for the three months ended June 30, 2025 to 2.59% for the three months ended June 30, 2026, primarily due to the reduction in rates on interest bearing deposits.
Current report
Average Balance Sheets
Current report
Net Income. Net income was $1.8 million for the six months ended June 30, 2026, compared to $1.3 million for the six months ended June 30, 2025, an increase of $485,000, or 36.7%. This increase was due primarily to an increase of $609,000, or 9.4%, in net interest income to $7.1 million for the six months ended June 30, 2026, from $6.5 million for the six months ended June 30, 2025. Noninterest income increased $388,000, or 37.3%, to $1.4 million for the six months ended June 30, 2026 from $1.0 million for the six months ended June 30, 2025. This was partially offset by increases of $427,000 in noninterest expense, $39,000 in the provision for loan and lease losses, and $46,000 in income tax expense.
Current report
Interest Income. Interest income increased $286,000, or 2.6%, to $11.4 million for the six months ended June 30, 2026, from $11.1 million for the six months ended June 30, 2025. This was primarily the result of increased interest income on loans due to an increase in average loan balances and increased yields. This was partially offset by decreases in interest income on securities and interest bearing deposits in banks due to a decrease in the average balances and decreased yields. Average interest earning assets decreased $14.3 million, or 3.5%, from $410.7 million for the six months ended June 30, 2025, to $396.4 million for the six months ended June 30, 2026 primarily due to a decrease in average securities of $18.3 million, a decrease in average interest-bearing deposits in banks of $2.7 million, and partially offset by an increase in average loans of $6.9 million. The yield on average interest earning assets increased 34 basis points, or 6.3%, from 5.41% for the six months ended June 30, 2025 to 5.75% for the six months ended June 30, 2026.
Current report
Interest income on loans increased $907,000, or 10.5%, to $9.6 million for the six months ended June 30, 2026 from $8.7 million for the six months ended June 30, 2025. This increase resulted primarily from an increase in average loans of $6.9 million, or 2.3%, from $299.8 million for the six months ended June 30, 2025 to $306.7 million for the six months ended June 30, 2026 and an increase in average loan yield of 47 basis points, or 8.1%, to 6.25% for the six months ended June 30, 2026 from 5.78% for the six months ended June 30, 2025. Additionally, in the second quarter of 2025, a reversal of $217,000 in loan interest income was recorded due to two loan relationships totaling $9 million that were placed on nonaccrual status. The increase in loan volume and yield was due to continued efforts to increase the commercial loan portfolio.
Current report
Interest income on securities decreased $502,000, or 24.9%, from $2.0 million for the six months ended June 30, 2025 to $1.5 million for the six months ended June 30, 2026. This decrease resulted from a decrease in the average balance of securities of $18.3 million, or 19.1%, from $95.8 million for the six months ended June 30, 2025 to $77.5 million for the six months ended June 30, 2026, and a decrease of 30 basis points, or 7.1%, in average yield from 4.22% for the six months ended June 30, 2025 to 3.92% for the six months ended June 30, 2026. The yield decrease is due to principal paydowns of higher yielding securities with shorter average lives.
Current report
Interest income on interest bearing deposits in banks decreased $86,000, or 39.8%, from $216,000 for the six months ended June 30, 2025 to $130,000 for the six months ended June 30, 2026. This decrease resulted primarily from a decrease in average interest-bearing deposits of $2.7 million, or 27.6%, from $9.8 million for the six months ended June 30, 2025 to $7.1 million for the six months ended June 30, 2026 and a decrease in average yield of 78 basis points, or 17.7%, from 4.43% for the six months ended June 30, 2025 to 3.65% for the six months ended June 30, 2026. Interest income on Federal funds sold decreased $14,000, or 12.0%, from $117,000 for the six months ended June 30, 2025 to $103,000 for the six months ended June 30, 2026. This decrease is due to a decrease in the average yield of 78 basis points, or 17.8%, from 4.38% for the six months ended June 30, 2025 to 3.60% for the six months ended June 30, 2026. This was partially offset by an increase in average Federal funds sold balances of $380,000, or 7.1%, from $5.3 million
Current report
for the six months ended June 30, 2025 to $5.7 million for the six months ended June 30, 2026. The decrease in yields on deposits in banks and fed funds is reflective of the decrease in fed funds rates.
Current report
Interest expense on interest-bearing deposit accounts decreased $271,000, or 7.5%, to $3.3 million for the six months ended June 30, 2026 from $3.6 million for the six months ended June 20, 2025, due to a decrease in average interest-bearing deposits of $7.6 million, or 2.6%, from $292.2 million for the six months ended June 30, 2025 to $284.6 million for the six months ended June 30, 2026, and a decrease in the average interest-bearing deposit cost of 12 basis points, or 5.1%, from 2.46% for the six months ended June 30, 2025 to 2.34% for the six months ended June 30, 2026.
Current report
Interest expense on Federal Home Loan Bank advances decreased $50,000, or 5.0%, to $954,000 for the six months ended June 30, 2026 from $1.0 million for the six months ended June 30, 2025. This decrease was due primarily to the decrease in the average balance of Federal Home Loan Bank advances of $4.6 million, or 9.3%, to $44.9 million for the six months ended June 30, 2026 from $49.5 million for the six months ended June 30, 2025. This was partially offset by an increase in the average cost on advances of 19 basis points, or 4.8%, from 4.06% for the six months ended June 30, 2025 to 4.25% for the six months ended June 30, 2026 due to the maturity of advances with rates significantly lower than the weighted average cost of all FHLB borrowings.
Current report
Net Interest Income. Net interest income increased $609,000, or 9.4%, to $7.1 million for the six months ended June 30, 2026 from $6.5 million for the six months ended June 30, 2025 due primarily to an increase in net interest margin of 42 basis points, or 13.3%, to 3.59% for the six months ended June 30, 2026 from 3.17% for the six months ended June 30, 2025 and partially offset by a decrease in average net interest-earning assets of $2.0 million, or 2.9%, to $66.7 million at June 30, 2026 from $68.7 million at June 30, 2025. The increase in net interest margin was primarily due to changes in balance sheet composition, with a reallocation of funds from lower yielding securities to higher yielding loans, and a more disciplined approach to loan and deposit pricing. The average yield on interest-earning assets increased by 34 basis points, or 6.3%, and the average cost on interest bearing liabilities decreased by nine basis points, or 3.3%.
Current report
Provision for Credit Losses. Based on management’s analysis of the adequacy of the allowance for credit losses, the provision for credit losses increased $39,000, or 54.9%, to $110,000 for the six months ended June 30, 2026 from $71,000 for the six months ended June 30, 2025, primarily due to increased loan production and an overall increase in loan balances, as well as an increase in classified loans. Average loans and leases increased $6.9 million, or 2.3%, from $299.8 million for the six months ended June 30, 2025 to $306.7 million for the six months ended June 30, 2026, which increased the required provision. The allowance for credit losses was 1.13% of total loans at June 30, 2026.
Current report
Noninterest Expense. Noninterest expense increased $427,000, or 7.2%, to $6.3 million for the six months ended June 30, 2026 from $5.9 million for the six months ended June 30, 2025 primarily due to increases in technology expense, data processing, occupancy and equipment expenses, salaries and employee benefits, and other expenses.
Current report
Technology expense increased $98,000, or 73.7%, to $231,000 for the six months ended June 30, 2026 from $133,000 for the six months ended June 30, 2025 due primarily to expense related to the implementation of an online
Current report
loan origination and account opening platform, as well as implementation of deposit taking ATMs. Data processing expense increased $92,000, or 19.2%, from $478,000 for the six months ended June 30, 2025 to $570,000 for the six months ended June 30, 2026 due to an increase in fees paid to our bank core processor, which included costs associated with upgrades to operations software. Occupancy and equipment expense increased $82,000, or 16.0%, from $513,000 for the six months ended June 30, 2025 to $595,000 for the six months ended June 30, 2026 due primarily to higher property taxes due to higher property valuation, higher depreciation expense, and expenses related to the lease of new administrative offices. Salaries and employee benefits increased $60,000, or 1.9%, to $3.3 million for the six months ended June 30, 2026 from $3.2 million for the six months ended June 30, 2025 due primarily to annual salary increases and related payroll taxes, and partially offset by a decrease in stock compensation due to the forfeiture of stock options and awards. Other expenses increased $120,000, or 9.4%, from $1.3 million for the six months ended June 30, 2025 to $1.4 million for the six months ended June 30, 2026 which was the result of $207,000 in expense related to the foreclosed multifamily property noted previously, including utilities, maintenance, insurance, legal fees and real estate taxes, and partially offset by decreases in training and marketing expense.
Current report
Income Tax Expense. Income tax expense increased $46,000, or 18.4%, to $296,000 for the six months ended June 30, 2026 from $250,000 for the six months ended June 30, 2025, due to the increase in income before taxes of $531,000 from $1.6 million for the six months ended June 30, 2025 to $2.1 million for the six months ended June 30, 2026. The effective tax rate was 14.08% and 15.91% for the six months ended June 30, 2026 and 2025, respectively. The decrease in the effective tax rate was primarily due to nontaxable income increasing at a faster rate than taxable income.
Removed paragraphs (2)
Previous report
Net Income. The Company had net income of $836,000 for the three months ended March 31, 2026, compared to net income of $643,000 for the three months ended March 31, 2025, an increase of $193,000, or 30.0%. The increase was primarily due to a $103,000, or 3.1%, increase in net interest income, and a $107,000, or 94.7% decrease in the provision for loan loss to $6,000 for the three months ended March 31, 2026 from $113,000 for the same period in 2025. Noninterest income increased $236,000, or 51.1%, from $462,000 for the three months ended March 31, 2025 to $698,000 for the three months ended March 31, 2026. This was offset by an increase of $240,000, or 8.2%, in noninterest expense from $2.9 million for the three months ended March 31, 2025 to $3.2 million for the three months ended March 31, 2026.
Previous report
Interest income on interest bearing deposits in banks decreased $45,000, or 43.3%, from $104,000 for the three months ended March 31, 2025 to $59,000 for the three months ended March 31, 2026. This decrease is due primarily to a decrease in average interest-bearing deposits of $2.9 million, or 30.9%, from $9.4 million for the three months ended March 31, 2025 to $6.5 million for the three months ended March 31, 2026 and a decrease in average yield of 80 basis points, or 18.1%, from 4.41% for the three months ended March 31, 2025 to 3.61% for the three months ended March 31, 2026. Fed funds interest remained relatively flat, decreasing $1,000, or 1.6%, from $62,000 for the three months ended March 31, 2025 to $61,000 for the three months ended March 31, 2026. An increase in average fed funds balances of $1.2 million, or 21.4%, from $5.6 million for the three months ended March 31, 2025 to $6.8 million for the three months ended March 31, 2026 was offset by a decrease in average yield of 81 basis points, or 18.5%, from 4.39% for the three months ended March 31, 2025 to 3.58% for the three months ended March 31, 2026. These changes in volume are
Reworded paragraphs (39)
Previous wording
Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding Texas Community Bancshares, Inc.’s (the “Company”) consolidated financial condition at March 31, 2026 and consolidated results of operations for the three months ended March 31, 2026 and 2025. It should be read in conjunction with the unaudited consolidated financial statements and the related notes appearing in Part I, Item 1, of this Quarterly Report on Form 10-Q and with the audited consolidated financial statements, and notes, contained in the Annual Report on Form 10-K for the year ended December 31, 2025.
Current wording
Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding Texas Community Bancshares, Inc.’s (the “Company”) consolidated financial condition at June 30, 2026 and consolidated results of operations for the three and six months ended June 30, 2026 and 2025. It should be read in conjunction with the unaudited consolidated financial statements and the related notes appearing in Part I, Item 1, of this Quarterly Report on Form 10-Q and with the audited consolidated financial statements, and notes, contained in the Annual Report on Form 10-K for the year ended December 31, 2025.
Previous wording
Total Assets. Total assets were $430.4 million at March 31, 2026, an increase of $604,000, or 0.1%, from $429.8 million at December 31, 2025. The increase was due primarily to an increase of $4.6 million in interest bearing deposits in banks, offset by a $4.7 million decrease in net loans and leases.
Current wording
Total Assets. Total assets were $444.3 million at June 30, 2026, an increase of $14.5 million, or 3.4%, from $429.8 million at December 31, 2025. The increase was due primarily to increases in net loans and leases of $10.9 million and interest-bearing deposits in banks of $2.8 million.
Previous wording
Cash and Cash Equivalents. Cash and cash equivalents were unchanged at $6.5 million at March 31, 2026 and December 31, 2025. This included fed funds sold balances of $3.2 million at March 31, 2026 and $2.6 million at December 31, 2025.
Current wording
Cash and Cash Equivalents. Cash and cash equivalents increased $777,000, or 12.0%, to $7.2 million at June 30, 2026, compared to $6.5 million at December 31, 2025. This included fed funds sold balances of $3.7 million at June 30, 2026 and $2.6 million at December 31, 2025.
Previous wording
Interest Bearing Deposits in Banks. Interest bearing deposits in banks increased $4.6 million, or 83.6%, to $10.1 million at March 31, 2026, compared to $5.5 million at December 31, 2025. This increase was primarily the result of a decrease in net loans and leases receivable of $4.7 million, an increase in deposits of $4.1 million, and partially offset by a $4.1 million decrease in advances from the Federal Home Loan Bank.
Current wording
Interest Bearing Deposits in Banks. Interest bearing deposits in banks increased $2.8 million, or 50.9%, to $8.3 million at June 30, 2026, compared to $5.5 million at December 31, 2025. This increase was primarily the result of an increase in deposits of $11.7 million and a decrease in securities of $2.4 million, partially offset by a $10.9 million increase in net loans and leases.
Previous wording
Securities Available for Sale. Securities available for sale increased by $177,000, or 0.3%, to $60.1 million at March 31, 2026 from $59.9 million at December 31, 2025. During the three months ended March 31, 2026, there were purchases of securities of $1.5 million offset by net paydowns of $927,000. Accumulated other comprehensive loss increased by $309,000, or 9.7%, to $3.4 million, net of tax, from $3.1 million, net of tax, due primarily to changes in market interest rates. Gross unrealized losses on the AFS portfolio consisting of 67 securities increased from $3.9 million, or 6.1% of the portfolio’s amortized cost of $63.8 million at December 31, 2025, to $4.3 million, or 6.7%, of the amortized cost of $64.3 million at March 31, 2026. These unrealized losses are primarily due to increases in market interest rates. At March 31, 2026, the AFS portfolio was comprised of 59.6% collateralized mortgage obligations, 16.1% corporate bonds, 14.3% State and municipal securities, and 10.0% residential mortgage backed securities.
Current wording
Securities Available for Sale. Securities available for sale decreased by $756,000, or 1.3%, to $59.1 million at June 30, 2026 from $59.9 million at December 31, 2025. During the six months ended June 30, 2026, there were purchases of securities of $1.5 million offset by net paydowns of $2.1 million. Accumulated other comprehensive loss increased by $89,000, or 2.9%, to $3.2 million, net of tax, from $3.1 million, net of tax, due primarily to increases in market interest rates. Gross unrealized losses on the AFS portfolio consisting of 67 securities increased from $3.9 million, or 6.1% of the portfolio’s amortized cost of $63.8 million at December 31, 2025, to $4.0 million, or 6.3%, of the amortized cost of $63.1 million at June 30, 2026. These unrealized losses are primarily due to increases in market interest rates. At June 30, 2026, the AFS portfolio was comprised of 59.1% collateralized mortgage obligations, 16.4% corporate bonds, 14.7% State and municipal securities, and 9.8% residential mortgage backed securities.
Previous wording
Securities Held to Maturity. Securities held to maturity decreased by $762,000, or 4.4%, to $17.5 million at March 31, 2026 from $18.3 million at December 31, 2025. This decrease is due to paydowns of $729,000. The HTM portfolio had 60 securities with gross unrealized losses of $1.7 million, or 9.7%, of the amortized cost of $17.5 million at March 31, 2026 compared to $1.5 million, or 8.2%, of the amortized cost of $18.3 million at December 31, 2025. These unrealized losses are due to increases in market interest rates. At March 31, 2026, the HTM portfolio was comprised of 88.2% residential mortgage backed securities, 6.8% state and municipal securities and 5.0% U.S government and agency bonds.
Current wording
Securities Held to Maturity. Securities held to maturity decreased by $1.6 million, or 8.7%, to $16.7 million at June 30, 2026 from $18.3 million at December 31, 2025. This decrease is due to paydowns of $1.5 million. The HTM portfolio had 59 securities with gross unrealized losses of $1.6 million, or 9.6%, of the amortized cost of $16.7 million at June 30, 2026 compared to $1.5 million, or 8.2%, of the amortized cost of $18.3 million at December 31, 2025. These unrealized losses are due to increases in market interest rates. At June 30, 2026, the HTM portfolio was comprised of 88.4% residential mortgage-backed securities, 7.2% state and municipal securities and 4.4% U.S government and agency bonds.
Previous wording
Loans and Leases Receivable, Net. Net loans and leases receivable decreased $4.7 million, or 1.6%, to $298.5 million at March 31, 2026 from $303.2 million at December 31, 2025. The decrease in loans was primarily due to the payoff of a $7.7 million multifamily loan in the first quarter of 2026. There were new loan originations of $23.5 million partially offset by payoffs, other principal reductions, and contractual repayments.
Current wording
Loans and Leases Receivable, Net. Net loans and leases receivable increased $10.9 million, or 3.6%, to $314.1 million at June 30, 2026 from $303.2 million at December 31, 2025. The increase in loans was primarily due to new loan originations of $40.5 million partially offset by payoffs, other principal reductions, and contractual repayments.
Previous wording
The loan and lease portfolio totaled $301.9 million and was comprised of $273.3 million, or 90.5%, real estate loans, $9.3 million, or 3.1%, commercial and industrial loans, $15.2 million, or 5.0%, municipal loans and $4.1 million, or 1.4%, consumer loans and other loans. Real estate loans include $145.9 million, or 48.3%, 1-4 family residential loans, $3.2 million, or 1.1%, multi-family loans, $64.0 million, or 21.2%, commercial real estate (CRE) loans, $17.5 million, or 5.8%, farmland loans, $11.8 million, or 3.9%, 1-4 family construction loans, and $30.9 million, or 10.2%, other construction and development loans. Total loans include interim construction loans of $18.5 million, or 58.3%, of the completed project balance of $31.8 million which includes $20.2 million in single-family residence loans, including $10.5 million in speculative construction loans to builders, $1.7 million in subdivision construction, $1.1 million in multi-family construction loans and $8.8 million in CRE loans. The total construction loan portfolio consisted of 56 loans with completed project balances of $31.8 million at March 31, 2026 compared to 54 loans totaling $36.0 million at December 31, 2025.
Current wording
The loan and lease portfolio totaled $317.7 million and was comprised of $288.6 million, or 90.9%, real estate loans, $9.8 million, or 3.1%, commercial and industrial loans, $15.2 million, or 4.8%, municipal loans and $4.1 million, or 1.2%, consumer loans and other loans. Real estate loans include $150.0 million, or 47.2%, 1-4 family residential loans, $3.2 million, or 1.0%, multi-family loans, $65.4 million, or 20.6%, commercial real estate (CRE) loans, $25.8 million, or 8.2%, farmland loans, $12.4 million, or 3.9%, 1-4 family construction loans, and $31.8 million, or 10.0%, other construction and development loans. Total loans include interim construction loans of $19.1 million, or 63.4%, of the completed project balance of $30.2 million which includes $19.5 million in single-family residence loans, including $11.6 million in speculative construction loans to builders, $2.4 million in subdivision construction, $1.1 million in multi-family construction loans and $7.2 million in CRE and CRE development loans. The total construction loan portfolio consisted of 50 loans with completed project balances of $30.2 million at June 30, 2026 compared to 54 loans totaling $36.0 million at December 31, 2025.
Previous wording
At March 31, 2026, commercial real estate loans consisted of $28.2 million owner occupied and $35.8 million non-owner occupied real estate. At March 31, 2026, commercial real estate loans primarily included loans collateralized by gas stations with convenience stores ($17.0 million), self-storage facilities ($15.5 million), and commercial rental properties ($12.8 million). The maximum loan-to-value ratio of our commercial real estate loans is generally 80%. Generally, we require the debt service coverage ratio to be at least 1.2x. The significant majority of our commercial real estate loans are appraised by outside independent appraisers approved by the board of directors. Personal guarantees are generally obtained from the principals of commercial real estate borrowers. We consider a number of factors in originating commercial real estate loans. We evaluate the qualifications and financial conditions of the borrower, including credit history, profitability and expertise, as well as the value and condition of the property securing the loan. When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower’s experience in owning or managing similar property, debt service capabilities, global cash flows of the borrower and other guarantors, and the borrower’s payment history with us and other financial institutions.
Current wording
At June 30, 2026, commercial real estate loans consisted of $26.5 million owner occupied and $38.9 million non-owner occupied real estate. At June 30, 2026, commercial real estate loans primarily included loans collateralized by gas stations with convenience stores ($17.7 million), self-storage facilities ($15.4 million), commercial rental properties ($14.3 million), churches ($3.9 million) and restaurants ($3.1 million). The maximum loan-to-value ratio of our commercial real estate loans is generally 80%. Generally, we require the debt service coverage ratio to be at least 1.2x. The significant majority of our commercial real estate loans are appraised by outside independent appraisers approved by the board of directors. Personal guarantees are generally obtained from the principals of commercial real estate borrowers. We consider a number of factors in originating commercial real estate loans. We evaluate the qualifications and financial conditions of the borrower, including credit history, profitability and expertise, as well as the value and condition of the property securing the loan. When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower’s experience in owning or managing similar property, debt service capabilities, global cash flows of the borrower and other guarantors, and the borrower’s payment history with us and other financial institutions.
Previous wording
Other Real Estate Owned. Other real estate owned decreased $167,000, or 1.8%, to $9.1 million at March 31, 2026 from $9.3 million at December 31, 2025 due to the sale of a bank owned property in the first quarter of 2026. At March 31, 2026, there are three remaining properties including a residential development property in Dallas, Texas with a carrying value of $1.3 million, a commercial development property in North Richland Hills, Texas with a carrying value of $2.1 million, and a multi-family property in our primary service area with a carrying value of $5.7 million. We are actively marketing all three other real estate owned properties.
Current wording
Other Real Estate Owned. Other real estate owned decreased $167,000, or 1.8%, to $9.1 million at June 30, 2026 from $9.3 million at December 31, 2025 due to the sale of a Bank owned property in the first quarter of 2026. At June 30, 2026, there were three remaining properties consisting of a residential development property in Dallas, Texas with a carrying value of $1.3 million, a commercial development property in North Richland Hills, Texas with a carrying value of $2.1 million, and a multi-family property in our primary service area with a carrying value of $5.7 million. We are actively marketing all three other real estate owned properties for sale.
Previous wording
Deposits. Deposits increased $4.1 million, or 1.3%, to $332.0 million at March 31, 2026 from $327.9 million at December 31, 2025. Core deposits (defined as all deposits other than certificates of deposit) increased $4.9 million, or 2.5%, to $199.0 million at March 31, 2026 from $194.1 million at December 31, 2025. Certificates of deposit decreased $1.5 million, or 1.4%, to $111.5 million at March 31, 2026 from $113.1 million at December 31, 2025. At March 31, 2026, there were $18.0 million in brokered deposits and $3.5 million in listed deposits. Average cost of interest-bearing deposits decreased 12 basis points, or 5.0%, to 2.33% for the three months ended March 31, 2026 compared to 2.45% for the three months ended March 31, 2025. At March 31, 2026, there were 201 accounts with balances in excess of the $250,000 FDIC insurance limit with an aggregate balance of $98.7 million, or 29.7% of deposits. The amount that was over the FDIC insurance limit was $48.5 million, or 14.6%, that was potentially uninsured, including certificates of deposit of $13.0 million, money market and savings accounts of $16.5 million and $19.0 million in checking accounts.
Current wording
Deposits. Deposits increased $11.7 million, or 3.6%, to $339.6 million at June 30, 2026 from $327.9 million at December 31, 2025. Core deposits (defined as all deposits other than certificates of deposit) increased $6.6 million, or 3.4%, to $200.7 million at June 30, 2026 from $194.1 million at December 31, 2025. Certificates of deposit increased $1.4 million, or 1.3%, to $114.5 million at June 30, 2026 from $113.1 million at December 31, 2025. At June 30, 2026, there were $18.0 million in brokered deposits and $6.5 million in listed deposits. The year-to-date average cost of interest-bearing deposits decreased 12 basis points, or 5.1%, to 2.34% for the six months ended June 30, 2026 compared to 2.46% for the six months ended June 30, 2025. At June 30, 2026, there were 193 accounts with balances in excess of the $250,000 FDIC insurance limit with an aggregate balance of $97.2 million, or 28.6% of deposits. The amount that was over the FDIC insurance limit was $48.9 million, or 14.4%, that was potentially uninsured, including certificates of deposit of $13.5 million, money market and savings accounts of $16.0 million and $19.4 million in checking accounts.
Previous wording
Advances from Federal Home Loan Bank. Advances from Federal Home Loan Bank decreased $4.1 million, or 9.0%, to $41.6 million at March 31, 2026 from $45.7 million at December 31, 2025, as two advances totaling $4.0 million were repaid prior to maturity. There are three short-term advances remaining totaling $13.0 million that will mature in 2026.
Current wording
Advances from Federal Home Loan Bank. Advances from Federal Home Loan Bank increased $795,000, or 1.7%, to $46.5 million at June 30, 2026 from $45.7 million at December 31, 2025, due to $13.0 million in new advances booked in 2026, and partially offset by $12.2 million in maturities and repayments. There are four short-term advances remaining totaling $18.0 million that will mature in 2026.
Previous wording
Total Shareholders’ Equity. Total shareholders’ equity increased $477,000, or 0.9%, to $54.2 million at March 31, 2026 from $53.8 million at December 31, 2025. This increase was primarily due to net income of $836,000 for the three months ended March 31, 2026, an increase of $37,000 from stock-based compensation expense, and an increase of $56,000 from the accrual of ESOP commitments. This was partially offset by a $309,000 increase in accumulated other comprehensive loss, net of tax, and quarterly dividends paid totaling $143,000.
Current wording
Total Shareholders’ Equity. Total shareholders’ equity increased $1.4 million, or 2.6%, to $55.2 million at June 30, 2026 from $53.8 million at December 31, 2025. This increase was primarily due to net income of $1.8 million for the six months ended June 30, 2026, an increase of $196,000 from stock-based compensation expense, and an increase of $114,000 from the accrual of ESOP commitments. This was partially offset by a $89,000 increase in accumulated other comprehensive loss, net of tax, treasury stock purchases of $257,000, and quarterly dividends paid totaling $316,000.
Previous wording
At March 31, 2026, Broadstreet Bank opted to use the community bank leverage ratio framework (Tier 1 capital to average assets) for regulatory capital purposes. A community bank leverage ratio of at least 9.0% is required to be considered “well capitalized” under regulatory requirements. At March 31, 2026, Broadstreet Bank was well capitalized and had a leverage ratio of 11.97%.
Current wording
At June 30, 2026, Broadstreet Bank opted to use the community bank leverage ratio framework (Tier 1 capital to average assets) for regulatory capital purposes. A community bank leverage ratio of at least 9.0% is required to be considered “well capitalized” under regulatory requirements. At June 30, 2026, Broadstreet Bank was well capitalized and had a leverage ratio of 12.13%.
Previous wording
The following table sets forth average balances, average yields and costs, and certain other information at and for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Nonaccrual loans are only included in the computation of average balances. Average yields for loans include loan fees of $166,000 and $121,000 for the three months ended March 31, 2026 and 2025, respectively. We have not recorded deferred loan fees, as we have determined them to be immaterial.
Current wording
The following table sets forth average balances, average yields and costs, and certain other information at and for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Nonaccrual loans are only included in the computation of average balances. Average yields for loans include loan fees of $271,000 and $120,000 for the three months ended June 30, 2026 and 2025, respectively. We have not recorded deferred loan fees, as we have determined them to be immaterial.
Previous wording
Interest Income. Interest income decreased $64,000 or 1.1%, to $5.6 million for the three months ended March 31. This was primarily the result of decreased interest income on securities due to a decrease in the average balance and decreased yields and a decrease in interest income on interest bearing deposits in banks due to a decrease in the average balance and decreased yields. This was partially offset by an increase in interest income on loans due to an increase in the average balance and increased yields. Average interest earning assets decreased by $17.2 million, or 4.2%, from $411.0 million for the three months ended March 31, 2025 to $393.8 million for the three months ended March 31, 2026 primarily from a decrease in average securities of $18.1 million, a decrease in average interest bearing deposits in banks of $2.9 million, and partially offset by an increase in average loans of $3.6 million. The yield on average interest earning assets increased 18 basis points, or 3.2%, from 5.48% for the three months ended March 31, 2025 to 5.66% for the three months ended March 31, 2026.
Current wording
Interest Income. Interest income increased $350,000 or 6.4%, to $5.8 million for the three months ended June 30, 2026 from $5.5 million for the three months ended June 30, 2025. This was primarily the result of increased interest income on loans due to an increase in average loan balances and increased yields. This was partially offset by decreases in interest income on securities and interest bearing deposits in banks due to a decrease in the average balances and decreased yields. Average interest earning assets decreased by $11.3 million, or 2.8%, from $410.2 million for the three months ended June 30, 2025 to $398.9 million for the three months ended June 30, 2026 primarily from a decrease in average securities of $18.6 million, a decrease in average interest bearing deposits in banks of $2.4 million, and partially offset by an increase in average loans of $10.1 million. The yield on average interest earning assets increased 50 basis points, or 9.4%, from 5.34% for the three months ended June 30, 2025 to 5.84% for the three months ended June 30, 2026.
Previous wording
Interest income on loans increased $254,000, or 5.8%, to $4.7 million for the three months ended March 31, 2026 from $4.4 million for the three months ended March 31, 2025. This increase resulted primarily from an increase in average loan balances of $3.6 million, or 1.2%, from $299.4 million for the three months ended March 31, 2025 to $303.0 million for the three months ended March 31, 2026, with an increase in loan yield of 26 basis points, or 4.4%, to 6.14% for the three months ended March 31, 2026 from 5.88% for the three months ended March 31, 2025. The increase in loan volume and yield was due to continued efforts to increase the commercial loan portfolio.
Current wording
Interest income on loans increased $653,000, or 15.3%, to $4.9 million for the three months ended June 30, 2026 from $4.3 million for the three months ended June 30, 2025. This increase resulted primarily from an increase in average loan balances of $10.1 million, or 3.4%, from $300.2 million for the three months ended June 30, 2025 to $310.3 million for the three months ended June 30, 2026, with an increase in loan yield of 66 basis points, or 11.5%, to 6.35% for the three months ended June 30, 2026 from 5.69% for the three months ended June 30, 2025. The increase in loan volume and yield was due to continued efforts to increase the commercial loan portfolio.
Previous wording
Interest income on securities decreased $266,000, or 25.9%. This decrease was due primarily to a decrease of $18.1 million, or 18.8%, in average balances from $96.1 million for the three months ended March 31, 2025 to $78.0 million for the three months ended March 31, 2026 following the sale of securities in the 4 th quarter of 2025. The yield on securities decreased 37 basis points, or 8.7%, to 3.91% for the three months ended March 31, 2026 from 4.28% for the same period in 2025, due to shorter average lives and faster principal paydown of the higher yielding securities.
Current wording
Interest income on securities decreased $236,000, or 23.8%. This decrease was due primarily to a decrease of $18.6 million, or 19.5%, in average balances from $95.5 million for the three months ended June 30, 2025 to $76.9 million for the three months ended June 30, 2026 following the sale of securities in the 4 th quarter of 2025. The yield on securities decreased 22 basis points, or 5.4%, to 3.93% for the three months ended June 30, 2026 from 4.15% for the same period in 2025, due to shorter average lives and faster principal paydown of the higher yielding securities.
Previous wording
due primarily to fluctuations in overall bank liquidity, while decreases in yield were due to decreases in fed funds rates and other market interest rates.
Current wording
Interest income on interest bearing deposits in banks decreased $41,000, or 36.6%, from $112,000 for the three months ended June 30, 2025 to $71,000 for the three months ended June 30, 2026. This decrease is due primarily to a decrease in average interest-bearing deposits of $2.4 million, or 23.8%, from $10.1 million for the three months ended June 30, 2025 to $7.7 million for the three months ended June 30, 2026 and a decrease in average yield of 76 basis points, or 17.2%, from 4.44% for the three months ended June 30, 2025 to 3.68% for the three months ended June 30, 2026. Interest income on Federal funds sold decreased $13,000, or 23.6%, from $55,000 for the three months ended June 30, 2025 to $42,000 for the three months ended June 30, 2026. This decrease is due to a decrease in average Federal funds sold balances of $401,000, or 8.0%, from $5.0 million for the three months ended June 30, 2025 to $4.6 million for the three months ended June 30, 2026 and a decrease in average yield of 75 basis points, or 17.2%, from 4.37% for the three months ended June 30, 2025 to 3.62% for the three months ended June 30, 2026. These changes in volume are due primarily to fluctuations in overall bank liquidity, while decreases in yield were due to decreases in fed funds rates.
Previous wording
Interest expense on deposit accounts decreased $151,000, or 8.4%, from $1.8 million for the three months ended March 31, 2025 to $1.6 million for the three months ended March 31, 2026. This was due to a decrease in average interest-bearing deposits of $10.4 million, or 3.5%, from $293.6 million for the three months ended March 31, 2025, to $283.2 million for the three months ended March 31, 2026. The average deposit cost decreased 12 basis points, or 5.0%, from 2.45% for the three months ended March 31, 2025 to 2.33% for the three months ended March 31, 2026.
Current wording
Interest expense on deposit accounts decreased $120,000, or 6.7%, from $1.8 million for the three months ended June 30, 2025 to $1.7 million for the three months ended June 30, 2026. This was due to a decrease in average interest-bearing deposits of $4.8 million, or 1.7%, from $290.8 million for the three months ended June 30, 2025, to $286.0 million for the three months ended June 30, 2026. The average deposit cost decreased 12 basis points, or 4.9%, from 2.47% for the three months ended June 30, 2025 to 2.35% for the three months ended June 30, 2026.
Previous wording
Interest expense on Federal Home Loan Bank advances decreased $14,000, or 2.8%, to $489,000 for the three months ended March 31, 2026 from $503,000 for the three months ended March 31, 2025. This decrease was due primarily to a decrease in the average balance of FHLB advances of $4.3 million, or 8.7%, to $45.4 million for the three months ended March 31, 2026 from $49.7 million for the three months ended March 31, 2025. This was partially offset by an increase in average cost of 26 basis points, or 6.4%, primarily due to maturities and paydowns of advances with lower rates than the weighted average cost of all FHLB borrowings.
Current wording
Interest expense on Federal Home Loan Bank advances decreased $36,000, or 7.2%, to $465,000 for the three months ended June 30, 2026 from $501,000 for the three months ended June 30, 2025. This decrease was due primarily to a decrease in the average balance of FHLB advances of $4.9 million, or 9.9%, to $44.4 million for the three months ended June 30, 2026 from $49.3 million for the three months ended June 30, 2025. This was partially offset by an increase in average cost of 13 basis points, or 3.1%, primarily due to maturities and paydowns of advances with lower rates than the weighted average cost of all FHLB borrowings.
Previous wording
Net Interest Income. Net interest income increased $103,000, or 3.1%, to $3.4 million for the three months ended March 31, 2026 from $3.3 million for the three months ended March 31, 2025 due primarily to an increase in net interest margin of 25 basis points, or 7.6%, to 3.49% for the three months ended March 31, 2026 from 3.24% for the three months ended March 31, 2025. The increase in net interest margin is due primarily to higher loan volume and yield, a decrease in rates paid on interest bearing deposit accounts, and a decrease in FHLB advances. The increase in net interest margin was partially offset by a decrease in net interest earning assets of $2.2 million, or 3.3%, to $65.0 million for the three months ended March 31, 2026 from $67.2 million for the three months ended March 31, 2025.
Current wording
Net Interest Income. Net interest income increased $506,000, or 15.9%, to $3.7 million for the three months ended June 30, 2026 from $3.2 million for the three months ended June 30, 2025 due primarily to an increase in net interest margin of 60 basis points, or 19.2%, to 3.69% for the three months ended June 30, 2026 from 3.09% for the three months ended June 30, 2025. The increase in net interest margin is due primarily to higher loan volume and yield, a decrease in average interest bearing deposit balances and rates paid on these accounts, and a decrease in FHLB advances. The increase in net interest margin was partially offset by a decrease in net interest earning assets of $1.5 million, or 2.1%, to $68.4 million for the three months ended June 30, 2026 from $69.9 million for the three months ended June 30, 2025.
Previous wording
Provision for Credit Losses. Based on management’s analysis of the adequacy of the allowance for credit losses, the provision for credit losses decreased $107,000, or 94.7%, to $6,000 for the three months ended March 31, 2026 from $113,000 for the three months ended March 31, 2025, as a result of significant loan payoffs and corresponding decrease in loan balances in the 1 st quarter of 2026. The allowance for credit losses was 1.14% of total loans at March 31, 2026.
Current wording
Provision for Credit Losses. Based on management’s analysis of the adequacy of the allowance for credit losses, the provision for credit losses increased $146,000 to $104,000 for the three months ended June 30, 2026 from a reversal of $42,000 for the three months ended June 30, 2025, as a result of increased loan production and corresponding increase in loan balances in the 2nd quarter of 2026. The allowance for credit losses was 1.13% of total loans at June 30, 2026.
Previous wording
Noninterest Expense. Noninterest expense increased $240,000, or 8.2%, to $3.2 million for the three months ended March 31, 2026 from $2.9 million for the same period in 2025. This was due to an increase in other expenses of $106,000, or 17.7%, to $704,000 for the three months ended March 31, 2026 from $598,000 for the same period in 2025, which was the result of $98,000 in expense related to the foreclosed multifamily property noted previously, including utilities, maintenance, insurance, legal fees and real estate taxes. Technology expense increased $77,000, or 135.1%, from $57,000 for the three months ended March 31, 2025, to $134,000 for the three months ended March 31, 2026, due primarily to expense related to the implementation of an online loan origination and account opening platform. Occupancy and equipment expenses increased $41,000, or 16.6%, from $247,000 for the three months ended March 31, 2025 to $288,000 for the three months ended March 31, 2026 due primarily to higher property taxes due to normal increases and higher values, and expenses related to the lease of new administrative offices.
Current wording
Noninterest Expense. Noninterest expense increased $187,000, or 6.3%, to $3.2 million for the three months ended June 30, 2026 from $3.0 million for the same period in 2025. This was due to an increase in salaries and employee benefits of $71,000, or 4.5% to $1.6 million for the three months ended June 30, 2026 as a result of annual salary increases and related payroll taxes, as well as the accelerated vesting of stock option expense recorded in the 2 nd quarter 2026. Data Processing expense increased $49,000, or 20.1%, from $244,000 for the three months ended June 30, 2025, to $293,000 for the three months ended June 30, 2026, due primarily to an increase in fees paid to our bank core processor. Occupancy and equipment expenses increased $41,000, or 15.4%, from $266,000 for the three months ended June 30, 2025 to $307,000 for the three months ended June 30, 2026 due primarily to higher property taxes due to normal increases and higher values, higher depreciation expense, and expenses related to the lease of new administrative offices.
Previous wording
Income Tax Expense. Income tax expense increased by $13,000, or 12.3%, to $119,000 for the three months ended March 31, 2026 from $106,000 for the three months ended March 31, 2025. Net income before taxes increased $206,000, or 27.5%, from $749,000 for the three months ended March 31, 2025 to $955,000 for the three months ended March 31, 2026 and the effective tax rate was 12.46% and 14.15% for the three months ended March 31, 2026 and 2025, respectively. The decrease in effective tax rate was primarily due to tax-exempt income increasing at a faster rate than taxable income.
Current wording
Income Tax Expense. Income tax expense increased $33,000, or 22.9%, to $177,000 for the three months ended June 30, 2026, from $144,000 for the three months ended June 30, 2025. Net income before taxes increased $325,000, or 39.5%, from $822,000 for the three months ended June 30, 2025, to $1.1 million for the three months ended June 30, 2026 and the effective tax rate was 15.43% and 17.52% for the three months ended June 30, 2026 and 2025, respectively. The decrease in effective tax rate was primarily due to tax-exempt income increasing at a faster rate than taxable income.
Previous wording
Interest income on restricted investments, which includes stock dividends from the Federal Home Loan Bank (FHLB) and our primary correspondent bank, decreased $16,000, or 32.0%, from $50,000 for the three months ended March 31, 2025 to $34,000 for the three months ended March 31, 2026. This decrease resulted primarily from a decrease in the average balance of these investments of $854,000, or 22.2%, from $3.6 million for the three months ended March 31, 2025 to $2.8 million for the three months ended March 31, 2026 primarily due to the FHLB repurchasing $1.1 million in excess stock following a reduction in outstanding advances and a decrease of 61 basis points, or 11.1%, in the average yield from 5.51% for the three months ended March 31, 2025 to 4.90% for the three months ended March 31, 2026 due primarily to a reduction in the dividend rate paid by FHLB.
Current wording
Interest income on restricted investments, which includes primarily Federal Home Loan Bank (FHLB) and TIB Bank stock dividends, decreased $29,000, or 30.9%, from $94,000 for the six months ended June 30, 2025 to $65,000 for the six months ended June 30, 2026. This decrease resulted from a decrease in the average balance of restricted investments of $354,000, or 11.3%, from $3.1 million for the six months ended June 30, 2025 to $2.8 million for the six months ended June 30, 2026, and also from a decrease in the average yield of these investments of 132 basis points, or 22.1%, from 5.98% for the six months ended June 30, 2025 to 4.66% for the six months ended June 30, 2026 due primarily to a reduction in the dividend rate paid by FHLB.
Previous wording
Interest Expense. Total interest expense decreased $167,000, or 7.2%, to $2.1 million for the three months ended March 31, 2026 from $2.3 million for the three months ended March 31, 2025 primarily due to a decrease in average interest-bearing liabilities of $15.1 million, or 4.4%, to $328.7 million for the three months ended March 31, 2026 from $343.8 million for the three months ended March 31, 2025 and a decrease in the average cost of interest-bearing liabilities of eight basis points, or 3.0%, from 2.68% for the three months ended March 31, 2025 to 2.60% for the three months ended March 31, 2026, primarily due to the reduction in rates on interest bearing deposits.
Current wording
Interest Expense. Total interest expense decreased $323,000, or 7.0%, to $4.3 million for the six months ended June 30, 2026 from $4.6 million for the six months ended June 30, 2025 primarily due to a decrease in average interest-bearing liabilities of $12.4 million, or 3.6%, to $329.6 million for the six months ended June 30, 2026 from $342.0 million for the six months ended June 30, 2025 and a decrease in the average cost of interest-bearing liabilities of nine basis points, or 3.3%, from 2.69% for the six months ended June 30, 2025 to 2.60% for the six months ended June 30, 2026, primarily due to decreases average balances of interest-bearing deposits and FHLB advances and a decrease in the average cost of interest bearing deposits.
Previous wording
Noninterest Income. Noninterest income increased $236,000, or 51.1%, to $698,000 for the three months ended March 31, 2026 from $462,000 for the three months ended March 31, 2025. This was due primarily to $168,000 in rental income on a multifamily property foreclosed on in the 3 rd quarter of 2025, as well as a $57,000 referral fee earned in connection with the payoff and transfer of an existing multifamily loan to capital markets. The foreclosed property is currently held in other real estate owned. It is over 90% occupied and is currently being marketed for sale.
Current wording
Noninterest Income. Noninterest income increased $388,000, or 37.3%, to $1.4 million for the six months ended June 30, 2026 from $1.0 million for the six months ended June 30, 2025. This was due primarily to $340,000 in rental income on a multifamily property foreclosed on in the 3 rd quarter of 2025, as well as a $57,000 referral fee earned in connection with the payoff and transfer of an existing multifamily loan to capital markets. The foreclosed property is currently held in other real estate owned. It is over 90% occupied and is currently being marketed for sale.
Previous wording
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. The Federal Reserve Bank of Boston provides the Bank with a federal funds line of credit and we are able to borrow from the Federal Home Loan Bank of Dallas. At March 31, 2026, we had outstanding advances of $41.6 million from the Federal Home Loan Bank of Dallas. At March 31, 2026, we had unused borrowing capacity of $108.5 million with the Federal Home Loan Bank of Dallas. In addition, at March 31, 2026, we had two unused unsecured lines of credit totaling $8.0 million with correspondent banks.
Current wording
Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. The Federal Reserve Bank of Boston provides the Bank with a federal funds line of credit and we are able to borrow from the Federal Home Loan Bank of Dallas. At June 30, 2026, we had outstanding advances of $46.5 million from the Federal Home Loan Bank of Dallas. At June 30, 2026, we had unused borrowing capacity of $103.8 million with the Federal Home Loan Bank of Dallas. In addition, at June 30, 2026, we had two unused unsecured lines of credit totaling $8.0 million with correspondent banks.
Previous wording
Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. For additional information, see the consolidated statements of cash flow for the three months ended March 31, 2026 and 2025 included as part of the consolidated financial statements included in this report.
Current wording
Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. For additional information, see the consolidated statements of cash flow for the six months ended June 30, 2026 and 2025 included as part of the consolidated financial statements included in this report.
Previous wording
Texas Community Bancshares, Inc. is a separate legal entity from Broadstreet Bank, and must provide for its own liquidity to pay its operating expenses and other financial obligations. Its primary source of income is dividends received from Broadstreet Bank. The amount of dividends that Broadstreet Bank may declare and pay to Texas Community Bancshares, Inc. is governed by applicable banking laws and regulations. Broadstreet Bank paid $1.0 million in dividends to Texas Community Bancshares, Inc. in the first quarter of 2026. At March 31, 2026, Texas Community Bancshares, Inc. (on a stand-alone, unconsolidated basis) had liquid assets of $4.4 million.
Current wording
Texas Community Bancshares, Inc. is a separate legal entity from Broadstreet Bank, and must provide for its own liquidity to pay its operating expenses and other financial obligations. Its primary source of income is dividends received from Broadstreet Bank. The amount of dividends that Broadstreet Bank may declare and pay to Texas Community Bancshares, Inc. is governed by applicable banking laws and regulations. Broadstreet Bank paid $1.0 million in dividends to Texas Community Bancshares, Inc. in the first quarter of 2026. At June 30, 2026, Texas Community Bancshares, Inc. (on a stand-alone, unconsolidated basis) had liquid assets of $3.8 million.
Previous wording
We monitor our large depositors and have discussions with them on how to maximize FDIC coverage to the fullest legal extent, which is limited to coverage of $250,000 per insured depositor. At March 31, 2026, there were 201 accounts with balances in excess of the $250,000 FDIC insurance limit totaling $98.7 million, or 29.7% of deposits. The amount that was over $250,000 was $48.5 million, or 14.6%, that was potentially uninsured, including certificates of deposit of $13.0 million and $35.5 million in checking, MMDA and savings accounts.
Current wording
We monitor our large depositors and have discussions with them on how to maximize FDIC coverage to the fullest legal extent, which is limited to coverage of $250,000 per insured depositor. At June 30, 2026, there were 193 accounts with balances in excess of the $250,000 FDIC insurance limit totaling $97.2 million, or 28.6% of deposits. The amount that was over $250,000 was $48.9 million, or 14.4%, that was potentially uninsured, including certificates of deposit of $13.5 million and $35.4 million in checking, MMDA and savings accounts.
Previous wording
At March 31, 2026, the weighted average life (WAL) of our securities portfolio is 5.0 years. The gross unrealized losses on the AFS securities was $4.3 million, or 6.6% of the $64.3 million AFS portfolio and 7.9% of capital. Unrealized losses on the HTM securities were $1.7 million, or 9.5% of the $17.5 million HTM portfolio and 3.1% of capital. The total gross unrealized losses are $5.9 million, or 7.2% of the $81.8 million securities portfolio and 10.2% of capital, which includes $31.2 million, or 38.1%, that are agency issued and guaranteed by the U.S. government. These losses are the result of market interest rate increases and we continue to monitor the portfolio for
Current wording
At June 30, 2026, the weighted average life (WAL) of our securities portfolio is 4.5 years. The gross unrealized losses on the AFS securities was $4.0 million, or 6.3% of the $63.1 million AFS portfolio and 6.8% of capital. Unrealized losses on the HTM securities were $1.6 million, or 9.5% of the $16.7 million HTM portfolio and 2.7% of capital. The total gross unrealized losses are $5.6 million, or 7.0% of the $79.8 million securities portfolio and 9.6% of capital, which includes $29.9 million, or 37.4%, that are agency issued and guaranteed by the U.S. government. These losses are the result of market interest rate increases and we continue to monitor the portfolio for credit and other risks.
Previous wording
credit and other risks. The net unrealized loss on AFS securities, and the corresponding other comprehensive loss, was $3.4 million, or 5.9% of capital. Over the next 24 months from March 31, 2026, we expect to receive $38.4 million in cash flow from the securities portfolio with $17.9 million in 2026, $18.7 million in 2027 and $1.8 million in 2028. We should receive $22.2 million of that over the next 12 months. See the Securities section of the management discussion and analysis for more information.
Current wording
The net unrealized loss on AFS securities, and the corresponding other comprehensive loss, was $3.2 million, or 5.5% of capital. Over the next 24 months from June 30, 2026, we expect to receive $37.0 million in cash flow from the securities portfolio with $14.8 million in 2026, $17.6 million in 2027 and $4.6 million in 2028. We should receive $25.3 million of that over the next 12 months. See the Securities section of the management discussion and analysis for more information.
Previous wording
At March 31, 2026, our allowance for credit losses to loans and leases held for investment was 1.14%. Following the sale of one property in the 1 st quarter of 2026. At March 31, 2026, we had $9.1 million remaining in other real estate owned, which includes a residential development property in Dallas, Texas, with a carrying value of $1.3 million, a commercial development property in North Richland Hills, Texas, with a carrying value of $2.1 million, and a multi-family property in our primary service area with a carrying value of $5.7 million. We are actively marketing all three properties. We monitor credit quality in the loan portfolio on an ongoing basis and maintain strong underwriting standards and asset management procedures. Our overall asset quality remains strong. The Company continues to monitor rates and loan demand weekly and aligns pricing accordingly. Housing supply and demand are monitored for indicators of a significant change in the local housing markets. We are increasing our lending in CRE, other commercial lending and loans to municipalities to more strategically balance our loan portfolio.
Current wording
At June 30, 2026, our allowance for credit losses to loans and leases held for investment was 1.13%. At June 30, 2026, we had $9.1 million remaining in other real estate owned, which includes a residential development property in Dallas, Texas, with a carrying value of $1.3 million, a commercial development property in North Richland Hills, Texas, with a carrying value of $2.1 million, and a multi-family property in our primary service area with a carrying value of $5.7 million. We are actively marketing all three properties. We monitor credit quality in the loan portfolio on an ongoing basis and maintain strong underwriting standards and asset management procedures. Our overall asset quality remains strong. The Company continues to monitor rates and loan demand weekly and aligns pricing accordingly. Housing supply and demand are monitored for indicators of a significant change in the local housing markets. We are increasing our lending in CRE, other commercial lending and loans to municipalities to more strategically balance our loan portfolio. At June 30, 2026, there was $6.0 million in past due commercial real estate loans related to two relationships. The past due status on one loan was related to maturity status and has since been renewed and the underlying property for the second loan is under contract for sale and we expect full repayment.
Previous wording
Net Interest Income. We analyze our sensitivity to changes in interest rates through a net interest income model. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest we pay on our interest-bearing liabilities, such as deposits and borrowings. We estimate what our net interest income would be for a 12-month period. We then calculate what the net interest income would be for the same period under the assumptions that the United States Treasury yield curve increases or decreases instantaneously by 400 basis point increments, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve. A basis point equals one-hundredth of one percent, and 100 basis points equals one percent. An increase in interest rates from 3% to 4% would mean, for example, a 100 basis point increase in the “Change in Interest Rates” column below.
Current wording
Net Interest Income. We analyze our sensitivity to changes in interest rates through a net interest income model. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest we pay on our interest-bearing liabilities, such as deposits and borrowings. We estimate what our net interest income would be for a 12-month period. We then calculate what the net interest income would be for the same period under the assumptions that the United States Treasury yield curve increases or decreases instantaneously by up to 400 basis points in 100 basis point increments, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve. A basis point equals one-hundredth of one percent, and 100 basis points equals one percent. An increase in interest rates from 3% to 4% would mean, for example, a 100 basis point increase in the “Change in Interest Rates” column below.
Previous wording
The table above indicates that at March 31, 2026, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 6.52% increase in net interest income, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 3.00% decrease in net interest income.
Current wording
The table above indicates that at June 30, 2026, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 6.86% increase in net interest income, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 3.60% decrease in net interest income.
Previous wording
sensitivity of net portfolio value. The model estimates the economic value of each type of asset, liability, and off-balance sheet contract under the assumptions that the United States Treasury yield curve increases or decreases instantaneously by 400 basis point increments, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve.
Current wording
sensitivity of net portfolio value. The model estimates the economic value of each type of asset, liability, and off-balance sheet contract under the assumptions that the United States Treasury yield curve increases or decreases instantaneously by up to 400 basis points in 100 basis point increments, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve.
Previous wording
The table above indicates that at March 31, 2026, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 1.14% increase in EVE, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 9.37% decrease in EVE.
Current wording
The table above indicates that at June 30, 2026, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would experience a 1.89% decrease in EVE, and in the event of an instantaneous 200 basis point decrease in interest rates, we would experience a 5.11% decrease in EVE.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Interest income on restricted investments, which includes stock dividends from the Federal Home Loan Bank (FHLB) and our primary correspondent bank, decreased $13,000, or 29.5%, from $44,000 for the three months ended June 30, 2025 to $31,000 for the three months ended June 30, 2026. This decrease resulted primarily from a decrease of 218 basis points, or 33.1%, in the average yield from 6.60% for the three months ended June 30, 2025 to 4.42% for the three months ended June 30, 2026 due primarily to a reduction in the dividend rate paid by FHLB.
Current report — wording carried from elsewhere
Interest Expense. Total interest expense decreased $156,000, or 6.8%, to $2.1 million for the three months ended June 30, 2026 from $2.3 million for the three months ended June 30, 2025 primarily due to a decrease in average
Current report — wording carried from elsewhere
Noninterest Income. Noninterest income increased $152,000, or 26.3%, to $731,000 for the three months ended June 30, 2026 from $579,000 for the three months ended June 30, 2025. This was due primarily to $172,000 in rental income on a multifamily property foreclosed on in the 3 rd quarter of 2025. The foreclosed property is currently held in other real estate owned. It is over 90% occupied and is currently being marketed for sale.
Current report — wording carried from elsewhere
The following table sets forth average balances, average yields and costs, and certain other information at and for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Nonaccrual loans are only included in the computation of average balances. Average yields for loans include loan fees of $438,000 and $240,000 for the six months ended June 30, 2026 and 2025, respectively. We have not recorded deferred loan fees, as we have determined them to be immaterial.
Current report — wording carried from elsewhere
Comparison of the Operating Results for the Six Months ended June 30, 2026 and June 30, 2025