• Think of it like a smaller version of Synovus Bank, but with highly specialized lending divisions that focus on niche markets like luxury yachts and senior care facilities.
• It's like a community bank that also operates distinct, scalable lending businesses for specific high-value sectors, similar to how Regions Bank has various lending groups, but COSO's are focused on unique areas like marine vessels and government-guaranteed small business loans.

• Traditional Community Banking Services: Offers a full range of banking products and services tailored for businesses, real estate professionals, and consumers.
• Senior Housing Lending: Provides loans to operators in the senior care sector, primarily focusing on assisted living facilities.
• Marine Lending: Offers consumer loans primarily to high-net-worth individuals, secured by yachts and high-end sport fishing vessels.
• Government Guaranteed Lending: Originates small business and other loans that are guaranteed by the SBA and USDA.
• Mortgage Banker Finance: Specializes in providing mortgage warehouse lending to mortgage originators.

CoastalSouth Bancshares (COSO) serves a diverse range of customers across its community banking operations and specialty lines of business. Given that specific customer names are not disclosed for banks, the major customers are best described by category:

1. Businesses: This is a broad category encompassing various types of companies. It includes local businesses in their community banking markets, small businesses seeking government-guaranteed loans (SBA and USDA), senior care facility operators (for senior housing lending), and mortgage originators (for mortgage warehouse lending).
2. Real Estate Professionals: This category includes individuals or entities involved in the real estate sector, for whom the bank offers tailored banking products and services.
3. Consumers/Individuals: This category comprises general consumers seeking traditional banking products and services within the bank's community markets (Lowcountry of South Carolina, Savannah, and Atlanta). It also includes high-net-worth individuals who are targeted for marine lending, primarily secured by yachts and high-end sport fishing vessels.

The key risks to CoastalSouth Bancshares (COSO) primarily stem from its specialized lending activities and the inherent nature of banking operations:

1. Credit and Concentration Risk: CoastalSouth Bancshares has significant concentrations in commercial real estate and senior housing lending. Its lending portfolio also includes marine lending and mortgage banker finance activities. A volatile economic environment or downturns in these specific real estate sectors, the luxury marine market, or the mortgage industry could lead to increased credit losses and impact asset quality. For instance, the increase in nonperforming assets in Q4 2025 was primarily due to a senior housing loan being transferred to nonaccrual status.
2. Interest Rate Risk: As a financial institution, CoastalSouth Bancshares is exposed to fluctuations in interest rates. Changes in interest rates can affect the company's net interest margin (NIM), profitability, and the demand for its lending products. A squeeze on the net interest margin due to rising interest expenses outpacing interest income could compress return on assets (ROA) and potentially impact dividend capacity.
3. Liquidity Risk and Wholesale Funding Sensitivity: While CoastalSouth Bancshares primarily relies on core deposits, its use of brokered deposits, though providing flexibility, introduces sensitivity to wholesale funding markets. If these markets tighten, it could lead to liquidity pressures, particularly from large depositor relationships.

CoastalSouth Bancshares (COSO) operates in several distinct lending markets. The addressable market sizes for its main products and services are as follows:

Community Banking Products and Services

The U.S. community banking market is forecasted to grow by USD 253 billion between 2024 and 2029, accelerating at a compound annual growth rate (CAGR) of 5.8%. In South Carolina, the commercial banking industry, which encompasses community banking, is projected to grow through 2030. As of December 2024, community banks in a specific South Carolina district (SC-7) held over $9.8 billion in total deposits. Georgia-based banks showed strong performance in the Southeast region, with 24 banks ranking in the top 50 community banks in 2024.

Senior Housing Lending

The U.S. senior living market, which CoastalSouth Bancshares' Senior Housing Lending focuses on, was valued at approximately $923.20 billion in 2023 and is projected to reach about $1.22 trillion by 2030, exhibiting a CAGR of 4.16%. Another estimate places the U.S. senior living market size at USD 943.90 billion in 2025, with a projection to reach USD 1.33 trillion by 2033 at a CAGR of 4.47%. Senior living transaction volume in the U.S. reached $24 billion in 2025, marking the highest level in over a decade.

Marine Lending

The specific addressable market size for marine lending in terms of total loan volume or outstanding loans is not explicitly available in the provided information. However, the recreational boating industry that marine lending serves had retail expenditures exceeding $41 billion in 2018, with an overall economic impact of over $170 billion in the U.S.

Government Guaranteed Lending (SBA and USDA)

The U.S. small business loan market, which includes SBA and USDA guaranteed loans, was valued at $245.39 billion in 2023. This market is projected to grow to $349.64 billion by 2033, with a CAGR of 3.4% from 2024 to 2033. The maximum loan size for an SBA 7(a) loan is typically $5 million, while USDA loans can go up to $25 million per project.

Mortgage Banker Finance (Mortgage Warehouse Lending)

Mortgage warehouse lending is a vital component of the U.S. mortgage ecosystem. Warehouse lenders in the U.S. collectively had an estimated $100.0 billion in commitments on their books at the end of the fourth quarter, reaching the highest level since mid-2023. This industry is also described as a "$600 billion industry" that facilitates over "one trillion dollars of capital each year" from Wall Street to Main Street in the United States.

CoastalSouth Bancshares (COSO) is expected to drive future revenue growth over the next 2-3 years through several key strategies:

1. Continued Growth in Commercial and Specialty Lending: The company anticipates significant revenue generation from its targeted loan growth, particularly within its commercial lending segments, including commercial real estate. Additionally, its specialty lines of business—Senior Housing Lending, Marine Lending, and Government Guaranteed Lending—are expected to maintain their momentum. CoastalSouth Bancshares reported over $776.0 million in loan commitments and a 14.7% increase in gross loans held for investment in 2025. The company has a strategic emphasis on these niche areas, which are critical to its revenue drivers.
2. Strategic Expansion into New Markets: A key growth driver is the strategic expansion into new geographic areas. The company announced its entry into the Charleston, South Carolina market, aiming to leverage a locally based commercial banking team to drive strong loan and deposit growth in this dynamic region. This expansion builds upon its established presence in the Lowcountry.
3. Organic Core Deposit and Customer Relationship Growth: CoastalSouth Bancshares focuses on strengthening its core funding through continued deposit gathering and cultivating new customer relationships. This strategy is vital for supporting loan growth and overall profitability. The company successfully grew core deposits by over $120.7 million and increased total deposits by 8.3% to $1.99 billion in 2025. Its strategy includes organic branch expansion and high-quality digital banking tools to foster market-leading growth in customer relationships and deposits.
4. Net Interest Margin Expansion and Management: The effective management and expansion of the net interest margin (NIM) are crucial for increasing net interest income, a primary component of the bank's revenue. The company successfully expanded its net interest margin to 3.60% in the fourth quarter of 2025, a 39 basis point increase from the fourth quarter of 2024, contributing to a 22.1% rise in net interest income over the same period. Sustaining or improving this margin will be a significant factor in future revenue growth.
5. Expansion of Mortgage and SBA Servicing Portfolios: The company is enhancing its service capabilities and fee-related activities through the expansion of its mortgage servicing and Small Business Administration (SBA) servicing portfolios. This strategic diversification helps to generate non-interest income and complements its lending operations, particularly aligning with its Government Guaranteed Lending specialty line.

Share Issuance

• CoastalSouth Bancshares, Inc. completed an initial public offering (IPO) on July 2, 2025, selling 1,700,000 shares of its common stock at a public offering price of $21.50 per share, raising approximately $36.55 million for the company.
• In January 2024, the company completed a private placement of common stock, generating gross proceeds of approximately $12 million.
• In February 2026, directors received grants of restricted stock units (RSUs) as equity awards, such as 987, 927, and 868 RSUs, which convert into common shares on a one-for-one basis upon vesting.

Inbound Investments

• EJF Capital LLC purchased 930,171 shares of CoastalSouth Bancshares in the third quarter (likely 2025), valued at approximately $20.29 million, making it their largest holding and representing a 7.77% ownership stake in the bank.
• Other institutional investors, including Endeavour Capital Advisors Inc. (approximately $7.35 million), Vanguard Group Inc. (approximately $3.21 million), and Bleakley Financial Group LLC (approximately $1.92 million), also initiated new positions in the company during the third quarter (likely 2025).

Capital Expenditures

• The net proceeds from the July 2025 IPO were intended for general corporate purposes, including supporting organic growth, funding opportunistic strategic acquisitions, and funding branch expansion.
• The company's Net Property, Plant and Equipment reflected values of $20.6 million at the end of 2025, $23.3 million in 2024, and $21.6 million in 2023, indicating ongoing investment in physical assets.