CoastalSouth Bancshares reports record third quarter net income

CoastalSouth Bancshares, Inc. (NYSE: COSO) reported net income of $8.8 million, or $0.71 per diluted share, for the third quarter of 2026. The holding company for Coastal States Bank recorded the quarter's earnings against $7.3 million in the second quarter of 2026 and $6.7 million in the third quarter of 2025. For the nine months ended September 30, 2026, net income reached $22.4 million, or $1.81 per diluted share, compared with $17.8 million for the same period in 2025.

President and Chief Executive Officer Stephen R. Stone attributed the performance to strong loan production and gain-on-sale revenue from the government-guaranteed lending business. Loan production totaled $248.2 million during the third quarter, which included funded and unfunded balances at origination. As of September 30, 2026, these loans held funded balances of $148.9 million and unfunded commitments of $74.1 million. This production drove an $81.6 million increase in loans held-for-investment, representing a 19.0% annualized growth rate from the second quarter.

Net interest income rose to $21.5 million for the third quarter of 2026, an increase of $862 thousand or 4.2% from the prior quarter. The net interest margin expanded by 4 basis points to 3.70%, up from 3.66% in the second quarter of 2026. Total deposits increased by $53.1 million to $2.10 billion, though core deposits declined by approximately $20.0 million due to seasonal outflows from property management clients.

The company’s accumulated other comprehensive loss grew by $8.3 million due to unrealized losses in its available-for-sale securities portfolio. Consequently, book value per share decreased by $0.15, or 2.65% annualized, to $22.32 at September 30, 2026. Tangible book value per common share fell by $0.16, or 2.88% annualized, to $21.90.

Noninterest income climbed to $3.3 million, a 51.2% increase from the second quarter, primarily driven by a $1.3 million rise in gains on sales of government-guaranteed loans. Noninterest expense increased by $336 thousand, or 2.5%, to $13.7 million, reflecting higher salaries and employee benefits.

The Board of Directors declared a quarterly dividend of $0.06 per share on October 19, 2026. The payment will be made on November 24, 2026, to shareholders of record as of November 10, 2026.