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Coastal Carolina Bancshares, Inc. Reports First Quarter Earnings

MYRTLE BEACH, SC / / April 23, 2025 / Coastal Carolina Bancshares, Inc. (the "Company") (OTCQX:CCNB), parent of Coastal Carolina National Bank (the "Bank"), reported unaudited financial results for the first quarter of 2025. The Company reported net income of $2,377,289 or $0.38 per share for the three months ended March 31, 2025, compared to $2,663,997 or $0.42 per share for the prior quarter ended December 31, 2024, and $1,650,696 or $0.26 per share for three months ended March 31, 2024.

2025 First Quarter Financial Highlights

• Quarterly net income of $2.4 million and diluted EPS of $0.38 per share

• Quarterly Return on Average Equity of 12.35%

• Net Interest Margin expansion to 3.55% for the quarter ended March 31, 2025 compared to 3.34% and 3.10% for the prior quarters ended December 31, 2024 and March 31, 2024, respectively

• Increased book value per share and tangible book value per share to $12.57 and $12.07 at March 31, 2025 from $12.07 and $11.56 at December 31, 2024

• Quarterly deposit growth of $13 million or 1% (5% annualized) from $989 million at December 31, 2024 to $1,002 million at March 31, 2025

• Quarterly loan growth of $25 million or 3% (12% annualized) from $837 million at December 31, 2024 to $863 million at March 31, 2025

• Key credit quality metrics remained strong with a non-performing assets ratio of 0.0% and no past due loans greater than 30 days

Coastal Carolina Bancshares, Inc.
Selected Financial Highlights
(unaudited)

(1) - Total shares outstanding excludes unvested restricted stock awards

Capital

At March 31, 2025, the Bank's regulatory capital ratios (Leverage, Tier 1, and Total Risk-Based) were 9.04%, 11.68%, and 12.76%, respectively. Each of these ratios exceed the regulatory minimums to be considered well capitalized.

The Company reported book value per share and tangible book value per share at March 31, 2025 of $12.57 and $12.07, respectively, compared to $12.07 and $11.56 at December 31, 2024. Increased book value per share during the quarter resulted from retained earnings accumulation and changes in investment market valuations during the quarter.

Balance Sheet and Credit Quality

Net Loans increased $25 million or 3% during the first quarter (12% annualized) to $863 million at March 31, 2025. First quarter loan growth was concentrated in C&I Lending, non-owner occupied CRE, and Owner Occupied CRE which accounted for $10 million, $5 million, and $4 million in net growth, respectively.

The Company had $13 million in deposit growth during the first quarter, reporting $1,002 million in total deposits on March 31, 2025, compared to $989 million on December 31, 2024. An increase of $10 million in brokered CDs contributed to the Bank's deposit growth during the quarter. At quarter end March 31, 2025, checking and savings represented 38% of the Bank's total deposits while money market accounts and time deposits represented 45% and 17% of total deposits, respectively.

Total Assets increased by $17 million or 2% during the quarter to $1,108 million at March 31, 2025, compared to $1,090 million at December 31, 2024.

President and CEO of the Company and Bank, Laurence S. Bolchoz, Jr., commented, "We are excited to carry our positive momentum from 2024 into the first quarter of 2025 with strong loan growth of $25 million for the quarter. This increase represents an annualized growth rate of 12%."

The Company continues to report excellent asset quality metrics with no loans classified as non-accrual, no loans past due greater than 30 days, and a non-performing asset ratio of 0.00%. Additionally, the Bank had no outstanding OREO property at quarter end. The Bank had one small charge-off during the quarter of less than $2,500.

Mr. Bolchoz commented, "The Bank continues to report pristine credit quality metrics with no past dues, no non-accrual loans, and no OREO properties at quarter end. While the national economic climate has been volatile throughout the beginning of 2025, the local economies in which the Bank operates remain healthy. Understanding that our communities are not immune from the challenges of the broader market, the Bank will continue to prioritize credit quality and focus on originating high quality loans."

Income Statement

Net Interest Income

Net interest income increased $0.4 million or 4% to $9.0 million for the quarter ended March 31, 2025, compared to $8.6 million during the most recent linked quarter and increased 31% when compared to prior year's first quarter net interest income of $6.9 million. The Bank's net interest margin was 3.55% for the quarter ended March 31, 2025, compared to 3.34% for the prior quarter ended December 31, 2024 and 3.10% during the first quarter of 2024.

Net interest margin expansion during the first quarter of 2025 was driven by loan growth and increased loan yields coupled with reduced funding costs as the Federal Reserve's 2024 rate cuts continued to impact the Bank's deposit costs. The Bank's quarterly cost of funds decreased to 2.14% for the quarter ended March 31, 2025 from 2.29% for the prior quarter ended December 31, 2024 and 2.31% for the first quarter of 2024.

The Bank's yield on earning assets increased to 5.54% for the quarter ended March 31, 2025 compared to 5.47% during the most recent linked quarter, and 5.25% in the first quarter of 2024. The Bank's loan yields increased moderately when compared to the prior quarter from 5.93% to 5.98%; however, yields on interest bearing cash declined during the quarter as the Bank realized the full impact of the Fed's fourth quarter 2024 rate reductions.

Mr. Bolchoz said, "We are very pleased with the Bank's earnings for the first quarter of 2025 with net income increasing 44% when compared to the first quarter of last year. Net income has been bolstered by an improving net interest margin resulting from rising loan yields and a decreasing cost of funds."

Noninterest Income

Noninterest income totaled $610 thousand for the quarter ended March 31, 2025, compared to $868 thousand earned during the most recent quarter ended December 31, 2024 and $507 thousand
in the first quarter of 2024.

Reduced non-interest income during the first quarter resulted primarily from lower mortgage sales revenue and decreased deposit fee income. Mortgage sales revenues declined when compared to both the most recent linked quarter and the first quarter of 2024. The Company recorded mortgage sales revenues of $48 thousand during the quarter ended March 31, 2025, compared to $113 thousand for the quarter ended December 31, 2024, and $22 thousand during the first quarter of 2024. Deposit fee income decreased primarily due to reduced one way sell fee income and fee income from seasonal deposit programs.

While mortgage sales volume remains muted, the Bank continues to originate a large portion of its mortgage production through portfolio mortgage products. Portfolio mortgage products are primarily originated with adjustable rate mortgage (ARM) structures and provide an alternative to fixed rate mortgage loans.

Noninterest Expense

Noninterest expense totaled $6.2 million for the quarter ended March 31, 2025, compared to $5.9 million for the prior quarter ended December 31, 2024, and $5.2 million for the comparative quarter ended March 31, 2024. Quarterly increases resulted primarily from higher compensation and benefits expense, increased data processing and business development costs, and increased professional services expenses supporting the Company's continued growth and expansion into new markets.

Provision for Loan Losses

During the quarter the Bank recorded a net provision of $335 thousand for changes in CECL allowance for credit losses. At quarter end the Bank's allowance for credit losses on loans increased to $8.9 million and the reserve on unfunded commitments increased to $430 thousand. The cumulative CECL reserve of $9.3 million was 1.07% of total loans at March 31, 2025.

About Coastal Carolina Bancshares, Inc. Coastal Carolina Bancshares, Inc. is the Bank holding Company of Coastal Carolina National Bank, a Myrtle Beach-based community bank serving Horry, Georgetown, Aiken, Orangeburg, Richland, Lexington, Greenville, and Spartanburg, South Carolina, and Brunswick (NC) counties. Coastal Carolina National Bank is a locally operated financial institution focused on providing personalized service. It offers a full range of banking services designed to meet the specific needs of individuals and small and medium-sized businesses. Headquartered in Myrtle Beach, SC, the Bank also has branches in Garden City, North Myrtle Beach, Conway, Aiken, Orangeburg, Columbia, Greenville, and Spartanburg, South Carolina, and Ocean Isle Beach, North Carolina. Through the substantial experience of our local management and Board of Directors, Coastal Carolina Bancshares, Inc. seeks to enhance value for our shareholders, build lasting customer relationships, benefit our communities and give our employees a meaningful career opportunity. To learn more about the Company and its subsidiary bank, please visit our website at .

Forward-Looking Statements Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements. Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include, without limitation: the effects of future economic conditions; governmental fiscal and monetary policies; legislative and regulatory changes; the risks of changes in interest rates; successful merger integration; management of growth; fluctuations in our financial results; reliance on key personnel; our ability to compete effectively; privacy, security and other risks associated with our business. Coastal Carolina Bancshares, Inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

Contact:
Russell Vedder
Title: EVP/CFO
Phone: (843) 839-5662
Fax: (843) 839-5699

SOURCE: Coastal Carolina Bancshares, Inc.