CoastalSouth Bancshares, Inc.
For the period ended Sep 30, 2026. Filed Nov 6, 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.
Sep 30, 2026 · Filed Nov 6, 2026
COSO$28.15-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001297107-26-000014
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-06.
0001193125-26-451859
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 305 previous paragraphs and 309 current paragraphs.
206 unchanged; 95 reworded; 6 added; 2 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 37 previous and 37 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 (6)
Current report
Data processing expense for the three months ended September 30, 2026 was $560 thousand compared to $647 thousand for the three months ended September 30, 2025, a decrease of $87 thousand, or 13.4%. The data processing expense decrease was due to lower wire and account processing volumes, and other processing costs.
Current report
FDIC insurance and regulatory assessment expense for the three months ended September 30, 2026 was $353 thousand compared to $419 thousand for the three months ended September 30, 2025, a decrease of $66 thousand, or 15.8%. This decrease was primarily attributable to changes in the Bank's asset mix and growth rates.
Current report
Income tax expense for the three months ended September 30, 2026 and 2025 was $2.8 million and $2.0 million, respectively. Effective tax rates were 24.2% and 23.2% for the three months ended September 30, 2026 and 2025, respectively. The increase in effective tax rate was primarily due to a reduction in the deferred tax asset related to state taxes during the third quarter of 2026 of approximately $641 thousand. Excluding discrete items related to this deferred tax asset write-down and other stock-based compensation activity, the Company's effective tax rate at the end of the third quarter was 20.05%.
Current report
Service charges on deposit accounts increased by $102 thousand to $736 thousand for the nine months ended September 30, 2026 compared to $634 thousand for the nine months ended September 30, 2025. This increase was attributable to higher number of NSF and overdraft fees charged during the nine months ended September 30, 2026.
Current report
Nonperforming loans were $15.1 million and $18.3 million at September 30, 2026 and December 31, 2025, respectively. The decrease in nonperforming loans was primarily due to a $4.2 million paydown of one nonaccrual senior housing loan, offset by modest additions to nonaccrual loans.
Current report
At September 30, 2026, our ICS money market One-Way Buy deposits were $70.0 million, or 3.3% of total deposits. There were no ICS money market One-Way Buy deposits at December 31, 2025. We use ICS One-Way Buy to deliberately purchase floating-rate wholesale deposits from the IntraFi network to inject liquidity and replace longer-term liabilities without a reciprocal deposit exchange.
Removed paragraphs (2)
Previous report
Changes to data processing expense, and FDIC insurance and regulatory assessment expense remained relatively comparable between the three months ended June 30, 2026 and 2025.
Previous report
Nonperforming loans were approximately $18.3 million at June 30, 2026 and December 31, 2025 and remained relatively flat.
Reworded paragraphs (95)
Previous wording
The purpose of this discussion and analysis of financial condition and results of operations, also referred to hereafter as this MD&A, is to aid in understanding significant changes in the financial condition of CoastalSouth Bancshares, Inc. and our wholly owned subsidiary, Coastal States Bank, as of December 31, 2025 and June 30, 2026, and on our results of operations for the three and six months ended June 30, 2026 and 2025. This discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2025 included on the Company’s 2025 Form 10-K and information presented elsewhere in this Quarterly Report on Form 10‑Q, particularly the unaudited consolidated financial statements and related notes appearing in Item 1.
Current wording
The purpose of this discussion and analysis of financial condition and results of operations, also referred to hereafter as this MD&A, is to aid in understanding significant changes in the financial condition of CoastalSouth Bancshares, Inc. and our wholly owned subsidiary, Coastal States Bank, as of December 31, 2025 and September 30, 2026, and on our results of operations for the three and nine months ended September 30, 2026 and 2025. This discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2025 included on the Company’s 2025 Form 10-K and information presented elsewhere in this Quarterly Report on Form 10‑Q, particularly the unaudited consolidated financial statements and related notes appearing in Item 1.
Previous wording
CoastalSouth Bancshares, Inc. (the "Company"), a bank holding company headquartered in Atlanta, Georgia. The Company was incorporated under the laws of the Commonwealth of Virginia on May 24, 2004, and converted to a corporation organized under the laws of the State of Georgia on May 12, 2023. We operate through our wholly-owned banking subsidiary, Coastal States Bank (the "Bank" or "CSB"), a South Carolina state-chartered commercial bank. We currently operate 11 retail banking branches in three primary markets, including the Lowcountry of South Carolina, Savannah, Georgia, and metro Atlanta, Georgia. CSB also operates four specialty lines of business, including Senior Housing, Marine Lending, Government Guaranteed Lending, and Mortgage Banker Finance ("MBF"). The deposits of CSB are insured by the FDIC. Coastal States Mortgage, Inc. (“CSM”), a wholly owned subsidiary of CSB, is a mortgage company focused on originating and single-family residential mortgages, some of which are retained in the portfolio. In this report on Form 10-Q, the words “the Company,” “we,” “us,” and “our” refer to CoastalSouth Bancshares, Inc., together with CSB and CSB’s wholly owned subsidiaries, except where the context requires otherwise.
Current wording
CoastalSouth Bancshares, Inc. (the "Company"), is a bank holding company headquartered in Atlanta, Georgia. The Company was incorporated under the laws of the Commonwealth of Virginia on May 24, 2004, and converted to a corporation organized under the laws of the State of Georgia on May 12, 2023. We operate through our wholly-owned banking subsidiary, Coastal States Bank (the "Bank" or "CSB"), a South Carolina state-chartered commercial bank. We currently operate 12 retail banking branches in three primary markets, including the Lowcountry of South Carolina, Savannah, Georgia, and metro Atlanta, Georgia. CSB also operates four specialty lines of business, including Senior Housing, Marine Lending, Government Guaranteed Lending, and Mortgage Banker Finance ("MBF"). The deposits of CSB are insured by the FDIC. Coastal States Mortgage, Inc. (“CSM”), a wholly owned subsidiary of CSB, is a mortgage company focused on originating single-family residential mortgages, some of which are retained in the portfolio. In this report on Form 10-Q, the words “the Company,” “we,” “us,” and “our” refer to CoastalSouth Bancshares, Inc., together with CSB and CSB’s wholly owned subsidiaries, except where the context requires otherwise.
Previous wording
In addition, changes in market conditions may reduce the availability of quoted prices or observable date. See Note 6 of our consolidated financial statements as of June 30, 2026, included elsewhere in this Quarterly Report on Form 10-Q, for a complete discussion of fair value of financial assets and liabilities and their related measurement practices.
Current wording
In addition, changes in market conditions may reduce the availability of quoted prices or observable data. See Note 6 of our consolidated financial statements as of September 30, 2026, included elsewhere in this Quarterly Report on Form 10-Q, for a complete discussion of fair value of financial assets and liabilities and their related measurement practices.
Previous wording
The following table sets forth unaudited selected financial data for the most recent five quarters and the six months ended June 30, 2026 and 2025. This data should be read in conjunction with the unaudited consolidated financial statements and accompanying notes included in Item 1 and the information contained in this Item 2.
Current wording
The following table sets forth unaudited selected financial data for the most recent five quarters and the nine months ended September 30, 2026 and 2025. This data should be read in conjunction with the unaudited consolidated financial statements and accompanying notes included in Item 1 and the information contained in this Item 2.
Previous wording
The following discussion of our results of operations compares the three months ended June 30, 2026 and 2025. We reported net income for the three months ended June 30, 2026 of $7.3 million compared to net income of approximately $6.0 million for the three months ended June 30, 2025. The increase of approximately $1.4 million was principally attributable to a higher net interest income, offset by higher noninterest expense, primarily salaries and employee benefits.
Current wording
The following discussion of our results of operations compares the three months ended September 30, 2026 and 2025. We reported net income for the three months ended September 30, 2026 of $8.8 million compared to net income of approximately $6.7 million for the three months ended September 30, 2025. The increase of approximately $2.0 million was principally attributable to higher net interest income and noninterest income coupled with a lower provision for credit losses, offset by higher noninterest expense, primarily salaries and employee benefits, and income tax provision.
Previous wording
Net interest income for the three months ended June 30, 2026 was $20.7 million compared to $18.1 million for the three months ended June 30, 2025, an increase of $2.6 million, or 14.3%. This increase was primarily due to an increase in the average balance of our total interest-earning assets coupled with a decrease in the average rate paid on interest-bearing liabilities. The increase in the average balance for the interest-earning assets was primarily due to an increase in average loans outstanding and investment securities; offset by a net decrease in other categories, primarily federal funds sold. The yield on total earning assets and interest-bearing liabilities decreased by 14 and 35 basis points, respectively, during the same period.
Current wording
Net interest income for the three months ended September 30, 2026 was $21.5 million compared to $19.2 million for the three months ended September 30, 2025, an increase of $2.3 million, or 12.2%. This increase was primarily due to an increase in the average balance of our total interest-earning assets coupled with a decrease in the average rate paid on interest-bearing liabilities. The increase in the average balance for the interest-earning assets was primarily due to an increase in average loans held-for-investment outstanding and investment securities; offset by a net decrease in other categories, primarily loans held-for-sale. The yield on total earning assets and interest-bearing liabilities decreased by 15 and 31 basis points, respectively, during the same period.
Previous wording
Total interest income for the three months ended June 30, 2026 was $33.6 million compared to $31.8 million for the three months ended June 30, 2025, an increase of $1.8 million, or 5.6%. This increase was primarily due to growth in our loan portfolios, notwithstanding lower yields; offset by a modest net decrease in other categories, primarily federal funds sold.
Current wording
Total interest income for the three months ended September 30, 2026 was $34.9 million compared to $32.9 million for the three months ended September 30, 2025, an increase of $2.0 million, or 6.0%. This increase was primarily due to growth in our loans held-for-investment portfolio, notwithstanding lower yields; offset by a net decrease in other categories, primarily loans held-for-sale and federal funds sold.
Previous wording
Interest and fees on LHFI were $26.0 million for the three months ended June 30, 2026 compared to $23.8 million for the three months ended June 30, 2025, an increase of $2.2 million, or 9.1%. This increase was primarily attributable to an increase in average LHFI of $161.8 million, or 10.7%, despite a decrease in yield. The yield on gross LHFI decreased by 9 basis points compared to the same period in 2025. Interest and fees on LHFS were $3.2 million for the three months ended June 30, 2026 compared to $3.3 million for the three months ended June 30, 2025. This decrease was primarily due to a decreased yield by 43 basis points, notwithstanding an increase in the average balance of LHFS outstanding compared to the same period in 2025.
Current wording
Interest and fees on LHFI were $27.4 million for the three months ended September 30, 2026 compared to $24.6 million for the three months ended September 30, 2025, an increase of $2.8 million, or 11.4%. This increase was primarily attributable to an increase in average LHFI of $189.7 million, or 12.3%, despite a decrease in yield. The yield on gross LHFI decreased by 5 basis points compared to the same period in 2025. Interest and fees on LHFS were $2.8 million for the three months ended September 30, 2026 compared to $3.4 million for the three months ended September 30, 2025. This decrease was primarily due to a decrease in yield by 51 basis points, coupled with a decrease in the average balance of LHFS outstanding compared to the same period in 2025.
Previous wording
Interest income on investment securities remained flat at $3.9 million for the three months ended June 30, 2026 and 2025. Investment securities average balance increased by $20.0 million, notwithstanding a 24 basis points decrease in yield during the period.
Current wording
Interest income on investment securities remained flat at $4.1 million for the three months ended September 30, 2026 and 2025. Investment securities average balance increased by $16.4 million, notwithstanding a 29 basis points decrease in yield during the period.
Previous wording
Interest expense for the three months ended June 30, 2026 was $12.9 million compared to $13.7 million for the three months ended June 30, 2025, a decrease of $822 thousand, or 6.0%. This decrease was primarily driven by lower average time deposits, coupled with a 35 basis point decrease in the average cost of overall total interest-bearing liabilities, primarily in borrowings, due to the payoff of the Company's subordinated debt during the third quarter of 2025, and money market and time deposit accounts, as rates continues to align with the market.
Current wording
Interest expense for the three months ended September 30, 2026 was $13.4 million compared to $13.7 million for the three months ended September 30, 2025, a decrease of $349 thousand, or 2.5%. This decrease was primarily driven by lower average time deposits, coupled with a 31 basis point decrease in the average cost of overall total interest-bearing liabilities, primarily in borrowings, due to the payoff of the Company's subordinated debt towards the end of third quarter of 2025, and money market and time deposit accounts, as rates continued to align with the market.
Previous wording
Net interest margin for the three months ended June 30, 2026 and 2025 was 3.66% and 3.46%, respectively. Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve. This increase in our net interest margin was primarily due to a combination of average total earning assets growth and a decrease in yield for average total interest-bearing liabilities. Average earning assets for the three months ended June 30, 2026 increased by $169.0 million compared to the three months ended June 30, 2025, principally due to growth of our loan portfolios. Average interest-bearing liabilities for the three months ended June 30, 2026 increased by $83.4 million compared to the three months ended June 30, 2025, driven by growth in average interest-bearing deposits, primarily money market and demand deposits accounts; offset by a net decrease in other interest-bearing liabilities categories, primarily time deposits.
Current wording
Net interest margin for the three months ended September 30, 2026 and 2025 was 3.70% and 3.58%, respectively. Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve. This increase in our net interest margin was primarily due to a combination of average total earning assets growth and a decrease in yield for average total interest-bearing liabilities. Average earning assets for the three months ended September 30, 2026 increased by $186.0 million compared to the three months ended September 30, 2025, principally due to growth of our loans held-for-investment portfolio and investment securities. Average interest-bearing liabilities for the three months ended September 30, 2026 increased by $120.7 million compared to the three months ended September 30, 2025, driven by growth in average interest-bearing deposits, primarily money market and demand deposits accounts and borrowings; offset by a net decrease in other interest-bearing liabilities categories, primarily time deposits.
Previous wording
Provision for credit losses for the three months ended June 30, 2026 was $658 thousand compared to $752 thousand for the three months ended June 30, 2025, a decrease of $94 thousand or 12.5%. This decrease was primarily due to higher loan production during the three months ended June 30, 2025, compared to the three months ended June 30, 2026, offset by a change to individual loan reserves and updates to loss rates and economic scenarios between the comparative periods. Our allowance for credit losses as a percentage of gross LHFI was 1.16% and 1.15% at June 30, 2026 and 2025, respectively.
Current wording
There was a recovery for credit losses during the three months ended September 30, 2026 of $429 thousand compared to a provision for credit losses of $653 thousand during the three months ended September 30, 2025, a decrease of $1.1 million or 165.7%. This decrease was due to updates to loss rates and economic scenarios and reductions to reserves on individually evaluated loans, offset by increased reserves related to loan growth during the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Our allowance for credit losses as a percentage of gross LHFI was 1.10% and 1.16% at September 30, 2026 and 2025, respectively.
Previous wording
Noninterest income for the three months ended June 30, 2026 was approximately $2.2 million, an increase of $407 thousand or 22.7%, compared to approximately $1.8 million for the three months ended June 30, 2025. This increase was principally across the board, but mostly in other noninterest income.
Current wording
Noninterest income for the three months ended September 30, 2026 was approximately $3.3 million, an increase of $1.2 million or 58.5%, compared to approximately $2.1 million for the three months ended September 30, 2025. This increase was principally across the board, but primarily in gain on sale of GGL and other noninterest income.
Previous wording
Mortgage banking related income increased by $77 thousand to $403 thousand for the three months ended June 30, 2026 compared to $326 thousand for the three months ended June 30, 2025. This increase was primarily due to higher secondary market mortgage production which is comprised primarily of activity related to the sale of consumer mortgage loans as well as loan origination fees such as closing charges, document review fees, application fees, other loan origination fees, and loan processing fees.
Current wording
Mortgage banking related income increased by $76 thousand to $375 thousand for the three months ended September 30, 2026 compared to $299 thousand for the three months ended September 30, 2025. This increase was primarily due to higher secondary market mortgage production which is comprised primarily of activity related to the sale of consumer mortgage loans as well as loan origination fees such as closing charges, document review fees, application fees, other loan origination fees, and loan processing fees.
Previous wording
Gain on sale of GGL increased by $42 thousand for the three months ended June 30, 2026 compared to $265 thousand for the three months ended June 30, 2025. The Company's gain on the sale of GGL volume increases or decreases based on the attractiveness of market premiums and the amount of inventory of loans that are saleable.
Current wording
Gain on sale of GGL increased by $945 thousand for the three months ended September 30, 2026 compared to $613 thousand for the three months ended September 30, 2025. The Company's gain on the sale of GGL volume increases or decreases based on the attractiveness of market premiums and the amount of inventory of loans that are saleable.
Previous wording
Other noninterest income increased by $251 thousand to $534 thousand for the three months ended June 30, 2026 compared to $283 thousand for the three months ended June 30, 2025. This increase was primarily due to gain on sale of other loans, coupled with a net increase in other categories within other noninterest income.
Current wording
Other noninterest income increased by $127 thousand to $408 thousand for the three months ended September 30, 2026 compared to $281 thousand for the three months ended September 30, 2025. This increase was primarily due to gain on sale of other loans, offset by a net decrease in other categories within other noninterest income.
Previous wording
Noninterest expense for the three months ended June 30, 2026 was $13.4 million compared to $12.1 million for the three months ended June 30, 2025, an increase of $1.3 million, or 10.6%. This increase was primarily in salaries and employee benefits, offset by a net decrease in all other noninterest expense categories, primarily other professional services.
Current wording
Noninterest expense for the three months ended September 30, 2026 was $13.7 million compared to $11.9 million for the three months ended September 30, 2025, an increase of $1.9 million, or 15.6%. This increase was primarily in salaries and employee benefits, coupled with a net increase in all other noninterest expense categories, primarily other noninterest expense, and software and other technology expense.
Previous wording
Salaries and employee benefits expense for the three months ended June 30, 2026 was $8.3 million compared to $7.0 million for the three months ended June 30, 2025, an increase of $1.3 million, or 18.8%. This increase was attributable to hiring new employees with skills and experience necessary to support our strategic goals coupled with annual merit increases. The average number of full-time equivalent employees was 201 for the three months ended June 30, 2026 compared to 188 for three months ended June 30, 2025.
Current wording
Salaries and employee benefits expense for the three months ended September 30, 2026 was $8.6 million compared to $7.0 million for the three months ended September 30, 2025, an increase of $1.6 million, or 23.3%. This increase was attributable to hiring new employees with skills and experience necessary to support our strategic goals coupled with annual merit increases. The average number of full-time equivalent employees was 210 for the three months ended September 30, 2026 compared to 194 for three months ended September 30, 2025.
Previous wording
Occupancy and equipment expense for the three months ended June 30, 2026 was $875 thousand compared to $814 thousand for the three months ended June 30, 2025, an increase of $61 thousand, or 7.5%. This increase was primarily due to new leases and rental increases, property taxes and depreciation, and upkeep related to the properties.
Current wording
Occupancy and equipment expense for the three months ended September 30, 2026 was $944 thousand compared to $850 thousand for the three months ended September 30, 2025, an increase of $94 thousand, or 11.1%. This increase was primarily due to new leases and rental increases, property taxes and depreciation, and upkeep related to the properties.
Previous wording
Software and technology expense for the three months ended June 30, 2026 was $861 thousand compared to $719 thousand for the three months ended June 30, 2025, an increase of $142 thousand, or 19.7%. This expense was primarily comprised of our information technology services, software licenses and maintenance and commensurate with the Company's growth.
Current wording
Software and other technology expense for the three months ended September 30, 2026 was $894 thousand compared to $788 thousand for the three months ended September 30, 2025, an increase of $106 thousand, or 13.5%. This expense was primarily comprised of our information technology services, software licenses and maintenance and commensurate with the Company's growth.
Previous wording
Other professional services expense for the three months ended June 30, 2026 was $632 thousand compared to $973 thousand for the three months ended June 30, 2025, a decrease of $341 thousand, or 35.0%. This decrease was across multiple categories, primarily due to lower recruiting fees, loan collection related expense, and consultant fees; offset by a net increase in other categories, primarily legal fees expense.
Current wording
Other professional services expense for the three months ended September 30, 2026 was $503 thousand compared to $571 thousand for the three months ended September 30, 2025, a decrease of $68 thousand, or 11.9%. This decrease was across multiple categories, primarily due to lower accounting fees, outside professional services, and recruiting fees; offset by a net increase in other categories, primarily legal fees expense.
Previous wording
Marketing and advertising expense for the three months ended June 30, 2026 was $276 thousand compared to $269 thousand for the three months ended June 30, 2025. Marketing and advertising costs are associated with digital advertising, mailings, and sponsorship. Marketing and advertising expense is included in Other noninterest expenses in our Company’s Consolidated Statements of Income.
Current wording
Marketing and advertising expense for the three months ended September 30, 2026 was $313 thousand compared to $245 thousand for the three months ended September 30, 2025. Marketing and advertising costs are associated with digital advertising, mailings, and sponsorship. Marketing and advertising expense is included in Other noninterest expenses in our Company’s Consolidated Statements of Income.
Previous wording
Other noninterest expense, excluding marketing and advertising expense, for the three months ended June 30, 2026 were $1.4 million compared to $1.3 million for the three months ended June 30, 2025, an increase of $102 thousand, or 7.7%. This increase was primarily attributable to increases in general administrative expense and other loan expense; offset primarily by decreases in Board of Directors fees, coupled with a net decrease in other noninterest expense categories. Included in other noninterest expense for the three months ended June 30, 2026 and 2025 were directors’ fees of $113 thousand and $176 thousand, respectively.
Current wording
Other noninterest expense, excluding marketing and advertising expense, for the three months ended September 30, 2026 were $1.5 million compared to approximately $1.4 million for the three months ended September 30, 2025, an increase of $179 thousand, or 13.2%. This increase was primarily attributable to increases across the board, principally other noninterest expense and deposit related expenses, offset by a decrease in Board of Directors fees. Included in other noninterest expense for the three months ended September 30, 2026 and 2025 were directors’ fees of $137 thousand and $176 thousand, respectively.
Previous wording
Results of Operations — Comparison of Results of Operations for the Six Months Ended June 30, 2026 and 2025
Current wording
Results of Operations — Comparison of Results of Operations for the Nine Months Ended September 30, 2026 and 2025
Previous wording
The following discussion of our results of operations compares the six months ended June 30, 2026 and 2025. We reported net income for the six months ended June 30, 2026 of $13.7 million compared to net income of $11.0 million for the six months ended June 30, 2025. The increase of $2.6 million was primarily due to growth of our net interest income as a result of an overall better performance during the six months ended June 30, 2026; offset by an increase in noninterest expense that was commensurate with our strategic growth.
Current wording
The following discussion of our results of operations compares the nine months ended September 30, 2026 and 2025. We reported net income for the nine months ended September 30, 2026 of $22.4 million compared to net income of $17.8 million for the nine months ended September 30, 2025. The increase of $4.7 million was primarily due to growth of our net interest income as a result of an overall better performance, coupled with a higher noninterest income during the nine months ended September 30, 2026; offset by an increase in noninterest expense that was commensurate with our strategic growth.
Previous wording
Net interest income for the six months ended June 30, 2026 was $40.4 million compared to $34.8 million for the six months ended June 30, 2025, an increase of $5.6 million, or 16.0%. This increase was primarily due to an increase in the average balance of our total interest-earning assets while the yield decreased at a lower rate compared with the decrease in the average rate paid on interest-bearing liabilities despite growth in average interest-bearing liabilities. The increase in the average balance for the total interest-earning assets was primarily due to an increase in average loans outstanding. The yield on total earning assets and interest-bearing liabilities decreased by 14 and 35 basis points, respectively, during the same period.
Current wording
Net interest income for the nine months ended September 30, 2026 was $61.9 million compared to $54.0 million for the nine months ended September 30, 2025, an increase of $7.9 million, or 14.6%. This increase was primarily due to an increase in the average balance of our total interest-earning assets while the yield decreased at a lower rate compared with the decrease in the average rate paid on interest-bearing liabilities despite growth in average interest-bearing liabilities. The increase in the average balance for the total interest-earning assets was primarily due to growth in average loans held-for-investment. The yield on total earning assets and interest-bearing liabilities decreased by 14 and 33 basis points, respectively, during the same period.
Previous wording
Total interest income for the six months ended June 30, 2026 was $66.1 million compared to $61.8 million for the six months ended June 30, 2025, an increase of $4.3 million, or 7.0%. This increase was primarily due to growth in our average total earning assets by $194.2 million principally in the average loans portfolio, notwithstanding a decrease in yields by 14 basis points from the comparable period.
Current wording
Total interest income for the nine months ended September 30, 2026 was $101.0 million compared to $94.7 million for the nine months ended September 30, 2025, an increase of $6.3 million, or 6.6%. This increase was primarily due to growth in our average total earning assets by $191.5 million principally in the average LHFI portfolio, notwithstanding a decrease in yields by 14 basis points for the total earning assets from the comparable period.
Previous wording
Interest and fees on LHFI were $51.1 million for the six months ended June 30, 2026 compared to $46.1 million for the six months ended June 30, 2025, an increase of approximately $5.0 million, or 10.8%. This increase was primarily attributable to growth of average LHFI which grew by $175.8 million, notwithstanding the yield decrease by 7 basis points compared to the same period last year. Interest and fees on LHFS remained flat at approximately $6.1 million for the six months ended June 30, 2026 and 2025, notwithstanding a decrease in yields by 65 basis points.
Current wording
Interest and fees on LHFI were $78.5 million for the nine months ended September 30, 2026 compared to $70.7 million for the nine months ended September 30, 2025, an increase of $7.8 million, or 11.0%. This increase was primarily attributable to growth of average LHFI which grew by $180.5 million, notwithstanding the yield decrease by 6 basis points compared to the same period last year. Interest and fees on LHFS were $8.9 million for the nine months ended September 30, 2026 compared to $9.5 million for the nine months ended September 30, 2025, a decrease of $679 thousand, or 7.1%, coupled with a decrease in yields by 60 basis points.
Previous wording
Interest income on investment securities was $7.5 million for the six months ended June 30, 2026 compared to $7.7 million for the six months ended June 30, 2025, a decrease of $172 thousand, or 2.2%. This decrease was primarily driven by the yield on investment securities decreasing by 28 basis points, notwithstanding an increase in the average balance by $14.3 million.
Current wording
Interest income on investment securities was $11.6 million for the nine months ended September 30, 2026 compared to $11.8 million for the nine months ended September 30, 2025, a decrease of $231 thousand, or 2.0%. This decrease was primarily driven by the yield on investment securities decreasing by 29 basis points, notwithstanding an increase in the average balance by $15.0 million.
Previous wording
Interest expense for the six months ended June 30, 2026 was $25.7 million compared to approximately $27.0 million for the six months ended June 30, 2025, a decrease of approximately $1.3 million, or 4.7%. This decrease was primarily attributable to a 35 basis point decrease in the average yield on overall total interest-bearing liabilities, primarily in money market and time deposits accounts, due to rates adjustments, coupled with a decrease in yield for the borrowings. Average borrowings outstanding increased from June 30, 2025 to June 30, 2026 by $2.3 million, or 8.4%, while the yield decreased by 261 basis points, primarily due to the repayment of the Company's subordinated debt during the third quarter of 2025.
Current wording
Interest expense for the nine months ended September 30, 2026 was $39.1 million compared to approximately $40.7 million for the nine months ended September 30, 2025, a decrease of $1.6 million, or 4.0%. This decrease was primarily attributable to a 33 basis point decrease in the average yield on overall total interest-bearing liabilities, primarily in money market and time deposits accounts, due to rates adjustments, coupled with a decrease in yield for the borrowings. Average borrowings outstanding increased from September 30, 2025 to September 30, 2026 by $14.9 million, or 65.4%, while the yield decreased by 387 basis points, primarily due to the repayment of the Company's subordinated debt towards the end of third quarter of 2025.
Previous wording
Net interest margin for the six months ended June 30, 2026 and 2025 was 3.62% and 3.42%, respectively. Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve. This increase in our net interest margin was primarily due to a 35 basis points decrease in the rate on interest-bearing liabilities, partially offset by a 14 basis points decrease in total earning yield.
Current wording
Net interest margin for the nine months ended September 30, 2026 and 2025 was 3.65% and 3.48%, respectively. Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve. This increase in our net interest margin was primarily due to a 33 basis points decrease in the rate on interest-bearing liabilities, partially offset by a 14 basis points decrease in total earning assets yield.
Previous wording
Provision for credit losses for the six months ended June 30, 2026 was $1.0 million compared to $1.4 million for the six months ended June 30, 2025, a decrease of $341 thousand. This decrease was primarily attributable to higher loan volume during the six months ended June 30, 2025 and an increase in reserves of individually analyzed collateral-dependent loans, offset by other changes in loss rates for the six months ended June 30, 2025. Our allowance for credit losses as a percentage of gross LHFI at June 30, 2026 and 2025 was 1.16% and 1.15%, respectively.
Current wording
Provision for credit losses for the nine months ended September 30, 2026 was $611 thousand compared to $2.0 million for the nine months ended September 30, 2025, a decrease of $1.4 million. This decrease was primarily attributable to higher reserves related to loan growth and an increase in reserves of individually analyzed collateral-dependent loans during the nine months ended September 30, 2025, offset by other changes in loss rates and economic conditions during the nine months ended September 30, 2026. Our allowance for credit losses as a percentage of gross LHFI at September 30, 2026 and 2025 was 1.10% and 1.16%, respectively.
Previous wording
Noninterest income for the six months ended June 30, 2026 was $4.2 million, an increase of $493 thousand or 13.4%, compared to $3.7 million for the six months ended June 30, 2025. This increase was across multiple categories, primarily gain on sale of GGL and income from mortgage originations, offset by a decrease in other noninterest income.
Current wording
Noninterest income for the nine months ended September 30, 2026 was $7.5 million, an increase of $1.7 million or 29.8%, compared to $5.8 million for the nine months ended September 30, 2025. This increase was across multiple categories, primarily gain on sale of GGL, income from mortgage originations and service charges on deposit accounts, offset by a decrease in other noninterest income.
Previous wording
Mortgage banking related income increased by $250 thousand to $797 thousand for the six months ended June 30, 2026 compared to $547 thousand for the six months ended June 30, 2025. This increase was primarily due to higher revenue from mortgage production which is comprised primarily of activity related to the sale of consumer mortgage loans as well as loan origination fees such as closing charges, document review fees, application fees, other loan origination fees, and loan processing fees, albeit slightly lower secondary market volume.
Current wording
Mortgage banking related income increased by $326 thousand to $1.2 million for the nine months ended September 30, 2026 compared to $846 thousand for the nine months ended September 30, 2025. This increase was primarily due to higher revenue from mortgage production which is comprised primarily of activity related to the sale of consumer mortgage loans as well as loan origination fees such as closing charges, document review fees, application fees, other loan origination fees, and loan processing fees, albeit slightly lower secondary market volume.
Previous wording
Gain on sale of GGL increased by $379 thousand to $644 thousand for the six months ended June 30, 2026 compared to $265 thousand for the same period during 2025. The Company's gain on the sale of GGL volume increases or decreases based on the attractiveness of market premiums and the amount of inventory of loans that are saleable.
Current wording
Gain on sale of GGL increased by $1.3 million to $2.2 million for the nine months ended September 30, 2026 compared to $878 thousand for the nine months ended September 30, 2025. The Company's gain on the sale of GGL volume increases or decreases based on the attractiveness of market premiums and the amount of inventory of loans that are saleable.
Previous wording
Other noninterest income decreased by $217 thousand to $809 thousand for the six months ended June 30, 2026 compared to approximately $1.0 million for the six months ended June 30, 2025. This decrease was primarily due to a previously disclosed nonrecurring $438 thousand of income recognized from a Small Business Investment Company ("SBIC") partnership investment related to the sale of one of the fund's underlying investments during 2025; offset by a net increase in other noninterest income, primarily gain on sale of other loans. Apart from this SBIC partnership related income, the largest component of other non-interest income generally consists of SBA loan servicing fees. SBA loan servicing fees increased by $43 thousand during the six months ended June 30, 2026 compared to the same period in 2025.
Current wording
Other noninterest income decreased by $91 thousand to $1.2 million for the nine months ended September 30, 2026 compared to approximately $1.3 million for the nine months ended September 30, 2025. This decrease was primarily due to a previously disclosed nonrecurring $438 thousand of income recognized from a Small Business Investment Company ("SBIC") partnership investment related to the sale of one of the fund's underlying investments during 2025; offset by a net increase in other noninterest income, primarily gain on sale of other loans and SBA loan servicing fees. Apart from this SBIC partnership related income and gain on sale of other loans, the largest component of other non-interest income generally consists of SBA loan servicing fees. SBA loan servicing fees increased by $93 thousand during the nine months ended September 30, 2026 compared to the same period in 2025.
Previous wording
Changes to BOLI income, interchange and card fee income, and Service charges on deposit accounts remained relatively comparable between the six months ended June 30, 2026 and 2025.
Current wording
Changes to BOLI income and interchange and card fee income remained relatively comparable between the nine months ended September 30, 2026 and 2025.
Previous wording
Noninterest expense for the six months ended June 30, 2026 was $26.4 million compared to $23.5 million for the six months ended June 30, 2025, an increase of $2.9 million, or 12.4%. This increase was across multiple noninterest expense categories but primarily in salaries and employee benefits, due to Company's growth and compensation adjustments; offset by a net decrease in other categories, primarily other professional services.
Current wording
Noninterest expense for the nine months ended September 30, 2026 was $40.1 million compared to $35.4 million for the nine months ended September 30, 2025, an increase of $4.8 million, or 13.5%. This increase was across multiple noninterest expense categories but primarily in salaries and employee benefits, due to Company's growth and compensation adjustments; offset by a net decrease in other categories, primarily other professional services.
Previous wording
The following table sets forth the major components of our noninterest expense for the six months ended June 30, 2026 and 2025:
Current wording
The following table sets forth the major components of our noninterest expense for the nine months ended September 30, 2026 and 2025:
Previous wording
Salaries and employee benefits expense for the six months ended June 30, 2026 was $16.4 million compared to $13.7 million for the six months ended June 30, 2025, an increase of approximately $2.7 million, or 19.5%. This increase was attributable to hiring new employees with skills and experience necessary to support our strategic goals and annual salary adjustments. The average number of full-time equivalent employees was 201 for the six months ended June 30, 2026 compared to 183 for the six months ended June 30, 2025.
Current wording
Salaries and employee benefits expense for the nine months ended September 30, 2026 was $25.0 million compared to $20.7 million for the nine months ended September 30, 2025, an increase of approximately $4.3 million, or 20.8%. This increase was attributable to hiring new employees with skills and experience necessary to support our strategic goals and annual salary adjustments. The average number of full-time equivalent employees was 207 for the nine months ended September 30, 2026 compared to 187 for the nine months ended September 30, 2025.
Showing the first 40 of 95 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Comprehensive Income. Monthly adjustments are made to reflect changes in the fair value of our available-for-sale securities.
Current report — wording carried from elsewhere
Other available sources of liquidity include wholesale deposits, and additional borrowings from correspondent banks, FHLBA advances, and the Federal Reserve discount window.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Income tax expense for the three months ended June 30, 2026 and 2025 was $1.5 million and $1.1 million, respectively. Effective tax rates were 17.0% and 15.1% for the three months ended June 30, 2026 and 2025, respectively. The increase in effective tax rate was primarily due to varying amounts of tax credits recognized in the comparative periods.
Previous report — wording carried elsewhere
as portfolio loans, taking into consideration the likelihood that funding will occur. The ACL for unfunded commitments is included in Other liabilities on the Company’s Consolidated Balance Sheets.