CoastalSouth Bancshares (COSO) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $5.9 million ($0.56 per diluted share), up from $2.4 million in Q1 2024 and nearly flat versus $5.8 million in Q2 2023.

• Six-month net income was $8.3 million, down from $12.5 million for the same period in 2023, mainly due to a $2.7 million after-tax AFS securities loss and higher deposit costs.

• Core deposits grew by $47.1 million sequentially and $120.0 million year-over-year; strong loan growth in both held-for-sale and held-for-investment portfolios.

Financial highlights

• Net interest income for Q2 2024 was $16.7 million, up from $15.4 million in Q1 2024 and $16.4 million in Q2 2023.

• Net interest margin rose to 3.43% from 3.21% in Q1 2024 but was slightly down from 3.47% in Q2 2023.

• Noninterest income was $1.6 million, rebounding from a $2.0 million loss in Q1 2024 due to the prior quarter's securities loss.

• Noninterest expense increased to $10.7 million, mainly from higher salaries and benefits.

• Tangible book value per share increased to $17.07 from $16.39 at March 31, 2024.

Outlook and guidance

• Anticipates increased GGL loan sales in the second half of 2024 as new banker pipelines mature.

• FOMC held rates steady but signaled a possible rate cut in September 2024, with upcoming inflation data likely to influence the decision.