Accessibility StatementSkip Navigation MINEOLA, Texas, Nov. 18, 2025 /PRNewswire/ -- Texas Community Bancshares, Inc. (the "Company") (NASDAQ: "TCBS"), the holding company of Broadstreet Bank, SSB, announced today that its Board of Directors has declared the payment of a quarterly cash dividend of $0.05 per share, and a special cash dividend of $0.03 per share, on each outstanding share of common stock. Both dividends will be payable on or about December 16, 2025 to stockholders of record as of the close of ...

Accessibility StatementSkip Navigation MINEOLA, Texas, Nov. 13, 2025 /PRNewswire/ -- Texas Community Bancshares, Inc. (the "Company") (NASDAQ: TCBS), the holding company of Broadstreet Bank, SSB (the "Bank"), announced today the retirement of Julie Sharff and appointment of Jason McCrary as Chief Financial Officer, effective December 1, 2025. During her tenure of over 28 years with the Company and the Bank, Ms. Sharff has been an integral part of shaping the Company's strategy and growth. She helped guide t ...

Financial Position - Total assets decreased by $4.0 million, or 0.9%, to $439.5 million at September 30, 2025, from $443.5 million at December 31, 2024[127] - Cash and cash equivalents decreased by $1.1 million, or 8.3%, to $12.2 million at September 30, 2025, from $13.3 million at December 31, 2024[128] - Interest bearing deposits in banks decreased by $8.4 million, or 86.6%, to $1.3 million at September 30, 2025, compared to $9.7 million at December 31, 2024[129] - Securities available for sale increased by $10.7 million, or 14.2%, to $85.9 million at September 30, 2025, from $75.2 million at December 31, 2024[130] - Net loans and leases receivable decreased by $8.8 million, or 3.0%, to $284.9 million at September 30, 2025, from $293.7 million at December 31, 2024[132] - Total deposits decreased by $1.6 million, or 0.5%, to $334.2 million at September 30, 2025, from $335.8 million at December 31, 2024, with core deposits down by $11.7 million, or 5.7%[138] - Total shareholders' equity increased by $1.4 million, or 2.7%, to $53.5 million at September 30, 2025, primarily due to net income of $2.0 million for the nine months ended September 30, 2025[140] Income and Expenses - Net income for the three months ended September 30, 2025, was $680,000, an increase of $165,000, or 32.0%, compared to $515,000 for the same period in 2024[145] - Interest income on loans increased by $291,000, or 7.2%, to $4.3 million for the three months ended September 30, 2025, driven by a 6.2% increase in average loan balances[147] - Noninterest income increased by $597,000, or 112.6%, to $1.1 million for the three months ended September 30, 2025[159] - Noninterest expense increased by $274,000, or 9.5%, to $3.2 million for the three months ended September 30, 2025[160] - Net income for the nine months ended September 30, 2025 was $2.0 million, compared to a net loss of $1.8 million for the same period in 2024, an increase of $3.8 million, or 211.1%[167] - Interest income for the nine months ended September 30, 2025 was $16.7 million, a decrease of $129,000, or 0.8%, from $16.8 million for the same period in 2024[168] Interest Income and Expense - Interest income on loans increased by $1.5 million, or 12.6%, to $13.0 million for the nine months ended September 30, 2025[169] - Total interest expense decreased by $202,000, or 8.1%, to $2.3 million for the three months ended September 30, 2025[154] - Net interest income increased by $64,000, or 2.0%, to $3.3 million for the three months ended September 30, 2025[157] - Total interest expense decreased by $549,000, or 7.4%, to $6.9 million, driven by a decrease in average interest-bearing liabilities by $13.5 million, or 3.8%[176] - Net interest income increased by $420,000, or 4.5%, to $9.8 million, primarily due to an increase in net interest margin of 23 basis points, or 7.9%[179] Credit Quality and Losses - The allowance for credit losses is based on historical experience and various factors affecting collectability[123] - Provision for credit losses increased by $224,000, or 85.2%, to $487,000 for the three months ended September 30, 2025[158] - Provision for credit losses increased by $448,000, or 407.3%, to $558,000, primarily due to a $453,000 charge related to a foreclosed multi-family property[180] - The allowance for credit losses to loans and leases held for investment was 1.13% as of September 30, 2025, with $9.0 million in nonaccrual loans transferred to other real estate owned during Q3 2025[200] Asset Management and Liquidity - The bank maintains strong underwriting standards and asset management procedures, continuously monitoring credit quality in the loan portfolio[200] - The bank's liquidity sources include the Federal Reserve discount window and the ability to sell securities and loans in the secondary market as needed[203] - The bank's strategies to manage interest rate risk include maintaining capital levels above regulatory thresholds and diversifying the loan portfolio with more commercial loans[208] - The bank's overall asset quality remains strong, with ongoing monitoring of housing supply and demand for potential market changes[200] Market and Economic Factors - Accumulated other comprehensive loss decreased by $1.5 million, or 31.3%, to $3.3 million, net of tax, due primarily to changes in market interest rates[130] - The total gross unrealized losses on the securities portfolio amounted to $5.8 million, or 5.4% of the $109.1 million portfolio, primarily due to market interest rate increases[196] - As of September 30, 2025, the net unrealized loss on AFS securities was $3.3 million, representing 5.7% of capital, with expected cash flow from the securities portfolio totaling $46.8 million over the next 24 months[198] - A 200 basis point increase in interest rates would result in a 2.56% increase in net interest income, while a 200 basis point decrease would lead to a 1.26% decrease[209] - The estimated economic value of equity (EVE) as of September 30, 2025, was $61,558,000, with a 200 basis point increase in interest rates resulting in a 2.37% decrease in EVE[214] Borrowing and Advances - At September 30, 2025, the company had outstanding advances of $48.8 million from the Federal Home Loan Bank of Dallas and unused borrowing capacity of $102.5 million[189] - The bank's FHLB borrowing capacity stood at $102.5 million, with an additional $8 million in unused credit lines available from correspondent banks[203] - The bank entered into interest rate swap agreements totaling $25 million to hedge against changes in the fair value of fixed rate AFS securities, terminating these agreements at a gain of $463,000 in Q1 2025[199]

Table of Contents SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ◻ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission File No. 001-40610 Texas Community Bancshares, Inc. (Exact Name of Registrant as Specified in Its Charter) | Maryland | ...

Exhibit 99.1 Company Contact: Jason Sobel President and Chief Executive Officer Texas Community Bancshares, Inc. (903) 569-2602 jsobel@broadstreet.bank TEXAS COMMUNITY BANCSHARES, INC. REPORTS UNAUDITED FINANCIAL RESULTS FOR THE SECOND QUARTER ENDED JUNE 30, 2025 MINEOLA, Texas; August 1, 2025 — Texas Community Bancshares, Inc. ("Texas Community Bancshares" or the "Company") (NASDAQ: TCBS), the holding company for Broadstreet Bank, SSB, today reported net income of $678,000 for the three months ended June 3 ...

Core Viewpoint - Texas Community Bancshares, Inc. reported significant improvements in net income for the second quarter and first half of 2025, marking a positive trend in earnings and operational efficiency since its IPO four years ago [1][2]. Financial Performance - Net income for the three months ended June 30, 2025, was $678,000, compared to $348,000 for the same period in 2024, and for the six months ended June 30, 2025, it was $1.3 million compared to a net loss of $2.3 million in 2024 [1][2]. - Net interest income increased by $356,000, or 5.8%, to $6.5 million for the first half of 2025 from $6.1 million in the same period of 2024, primarily due to a decrease in interest expense [3][5]. - Total interest income remained flat for the first half of 2025 compared to 2024, but decreased by $207,000 in the second quarter of 2025 compared to the same quarter in 2024 [5]. Asset Quality - The company recorded a provision for credit losses of $71,000 for the first half of 2025, compared to a reversal of $153,000 in the same period of 2024, indicating a shift in credit quality [7]. - As of June 30, 2025, past due loans represented 3.71% and nonaccrual loans 3.58% of the loan portfolio, with two significant loan relationships contributing to this increase [8]. Shareholders' Equity - Total shareholders' equity increased by $761,000, or 1.5%, to $52.9 million at June 30, 2025, driven by net income and a decrease in accumulated other comprehensive loss [10]. - The company repurchased 84,500 shares of common stock for $1.3 million and paid quarterly dividends totaling $242,000 [10]. Strategic Initiatives - The company has invested in new technology and products, including an automated consumer loan process and online account opening, to enhance customer experience [2]. - The bank is focused on expanding its market share and improving its branch network while executing its strategic growth plan [2].

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, income statements, and cash flow statements, along with detailed notes on accounting policies and financial instruments [Consolidated Statements of Financial Condition](index=4&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) This statement provides a snapshot of the company's assets, liabilities, and equity at specific dates Financial Condition Summary (in thousands) | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Total Assets | $442,209 | $443,457 | | Total Liabilities | $389,454 | $391,349 | | Total Shareholders' Equity | $52,755 | $52,108 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, expenses, and net income or loss over specific periods Operations Summary (in thousands) | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Total Interest Income | $5,634 | $5,418 | | Total Interest Expense | $2,306 | $2,455 | | Net Interest Income | $3,328 | $2,963 | | Provision (Credit) for Credit Losses | $113 | $(277) | | Total Noninterest Income (Loss) | $462 | $(3,562) | | Total Noninterest Expense | $2,928 | $3,071 | | Net Income (Loss) | $643 | $(2,685) | | Earnings (Loss) per share - basic | $0.22 | $(0.90) | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This statement presents net income or loss and other comprehensive income items for specific periods Comprehensive Income Summary (in thousands) | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net Income (Loss) | $643 | $(2,685) | | Total other items of comprehensive income (loss), after tax | $395 | $417 | | Comprehensive Income (Loss) | $1,038 | $(2,268) | [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) This statement outlines changes in the company's equity accounts over specific periods Shareholders' Equity Summary (in thousands) | Metric (in thousands) | Balance at January 1, 2025 | Balance at March 31, 2025 | Balance at January 1, 2024 | Balance at March 31, 2024 | | :-------------------- | :------------------------- | :------------------------ | :------------------------- | :------------------------ | | Total Shareholders' Equity | $52,108 | $52,755 | $53,689 | $51,471 | | Net income (loss) | N/A | $643 | N/A | $(2,685) | | Cash dividend declared ($0.04 per share) | N/A | $(123) | N/A | $(128) | | Treasury stock purchased | N/A | $(495) | N/A | $(154) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement reports cash inflows and outflows from operating, investing, and financing activities for specific periods Cash Flow Summary (in thousands) | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net Cash (used for) from Operating Activities | $(1,533) | $641 | | Net Cash used for Investing Activities | $(701) | $(6,635) | | Net Cash from Financing Activities | $766 | $13,923 | | Net Change in Cash and Cash Equivalents | $(1,468) | $7,929 | | Cash and Cash Equivalents at End of Period | $11,822 | $20,989 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the consolidated financial statements [Note 1 - Summary of Significant Accounting Policies](index=10&type=section&id=Note%201%20-%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the foundational accounting principles and methods used in preparing the financial statements - Texas Community Bancshares, Inc. (TCBS) was incorporated on March 5, 2021, becoming the holding company for Broadstreet Bank, SSB, after its mutual to stock conversion on July 14, 2021, with shares trading on NASDAQ under the symbol **TCBS**[22](index=22&type=chunk) - The Company's primary revenue source is providing loans and banking services in Mineola, Texas, the surrounding area, and the Dallas-Fort Worth Metroplex[23](index=23&type=chunk) - The Company operates as a single reportable operating segment, the Bank, with financial performance evaluated on a Company-wide basis using **net income**[29](index=29&type=chunk)[30](index=30&type=chunk) [Note 2 – Earnings Per Share](index=12&type=section&id=Note%202%20%E2%80%93%20Earnings%20Per%20Share) This note details the calculation of basic and diluted earnings per share for the reporting periods Earnings Per Share Calculation (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net Income (Loss) | $643 | $(2,685) | | Weighted average shares outstanding for basic EPS | 2,863,916 | 2,970,273 | | Weighted average shares outstanding for diluted EPS | 2,965,742 | 3,013,341 | | Basic earnings (loss) per share | $0.22 | $(0.90) | | Dilutive earnings (loss) per share | $0.22 | $(0.89) | - Nonvested restricted stock awards (**21,493 shares in 2025**, **74,007 in 2024**) and stock options (**159,755 shares in 2025**, **231,946 in 2024**) were excluded from diluted EPS calculations as they were antidilutive or nonvested[33](index=33&type=chunk) [Note 3 - Debt Securities](index=14&type=section&id=Note%203%20-%20Debt%20Securities) This note provides information on the company's debt securities, including available-for-sale and held-to-maturity portfolios Debt Securities Portfolio (in thousands) | Security Type (in thousands) | March 31, 2025 Amortized Cost | March 31, 2025 Fair Value | December 31, 2024 Amortized Cost | December 31, 2024 Fair Value | | :--------------------------- | :---------------------------- | :------------------------ | :------------------------------- | :----------------------------- | | **Available for Sale** | | | | | | Residential mortgage-backed | $9,850 | $8,891 | $10,356 | $9,151 | | Collateralized mortgage obligations | $47,270 | $45,387 | $48,808 | $46,568 | | State and municipal | $14,853 | $13,282 | $15,124 | $13,277 | | Corporate bonds | $8,356 | $7,236 | $7,352 | $6,193 | | Total AFS | $80,329 | $74,796 | $81,640 | $75,189 | | **Held to Maturity** | | | | | | Residential mortgage-backed | $18,351 | $16,207 | $19,090 | $16,569 | | State and municipal | $1,564 | $1,521 | $1,567 | $1,522 | | U.S. Government and agency | $1,264 | $1,264 | $1,439 | $1,440 | | Total HTM | $21,179 | $18,992 | $22,096 | $19,531 | - The Company had **no sales** of available for sale or held to maturity securities during the three months ended March 31, 2025 and 2024[36](index=36&type=chunk) - Unrealized losses on debt securities (AFS and HTM) are primarily due to increases in market interest rates, not credit quality deterioration, with management intending to hold these securities until maturity, expecting recovery of amortized cost[39](index=39&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk)[46](index=46&type=chunk) [Note 4 - Loans and Allowance for Credit Losses](index=19&type=section&id=Note%204%20-%20Loans%20and%20Allowance%20for%20Credit%20Losses) This note details the composition of the loan portfolio and the methodology and balances of the allowance for credit losses Loan Portfolio (in thousands) | Loan Type (in thousands) | March 31, 2025 | December 31, 2024 | | :----------------------- | :------------- | :---------------- | | Real estate | $277,781 | $275,812 | | Agriculture | $87 | $55 | | Commercial | $5,599 | $6,315 | | Municipalities | $12,363 | $9,253 | | Consumer and other | $4,965 | $5,495 | | Subtotal | $300,795 | $296,930 | | Less allowance for credit losses | $(3,273) | $(3,222) | | Loans and leases, net | $297,522 | $293,708 | Allowance for Credit Losses (in thousands) | Allowance for Credit Losses (in thousands) | March 31, 2025 | March 31, 2024 | | :--------------------------------------- | :------------- | :------------- | | Balance, January 1 | $3,222 | $3,096 |\ | Provision (credit) for credit losses | $63 | $(251) |\ | Loans charged-off | $(13) | $(39) |\ | Recoveries | $1 | $17 |\ | Balance, March 31 | $3,273 | $2,823 | Nonaccrual Loans (in thousands) | Nonaccrual Loans (in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------ | :------------- | :---------------- | | Nonaccrual without Allowance | $942 | $985 | | Nonaccrual with Allowance | $1,080 | $1,140 | | Total | $2,022 | $2,125 | - The Company did not recognize any interest income on nonaccrual loans during the three months ended March 31, 2025 or March 31, 2024[52](index=52&type=chunk) - The Company had **$2,155 thousand** and **$2,260 thousand** in collateral-dependent loans at March 31, 2025 and December 31, 2024, respectively[54](index=54&type=chunk) - The Company uses internal risk categories (Pass, Special Mention, Substandard, Doubtful, Loss) to monitor credit quality, with quarterly reviews and adjustments to reflect changes in risk[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) [Note 5 - Off-Balance-Sheet Activities](index=28&type=section&id=Note%205%20-%20Off-Balance-Sheet%20Activities) This note describes the company's commitments and other off-balance-sheet arrangements Off-Balance-Sheet Commitments (in thousands) | Off-Balance-Sheet Instrument (in thousands) | March 31, 2025 | December 31, 2024 | | :---------------------------------------- | :------------- | :---------------- | | Commitments to extend credit | $24,859 | $17,954 | - The Bank has unused federal funds lines of credit totaling **$15,000 thousand** from correspondent banks and a secured line of credit of **$3,000 thousand**, in addition to a line from the Federal Reserve Bank of Boston[79](index=79&type=chunk) - The Company has no other off-balance sheet arrangements or transactions with unconsolidated, special purpose entities[80](index=80&type=chunk) [Note 6 - Supplemental Cash Flow Information](index=29&type=section&id=Note%206%20-%20Supplemental%20Cash%20Flow%20Information) This note provides additional details on non-cash investing and financing activities and cash payments for interest Supplemental Cash Flow Details (in thousands) | Supplemental Cash Flow (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Cash paid for Interest on deposits | $1,875 | $1,761 | | Cash paid for Interest on FHLB advances | $504 | $697 | | Loans transferred to other real estate owned | $22 | $0 | - In Q1 2024, the Company transferred **$29,312 thousand** in loans receivable to loans held for sale and **$150 thousand** in loan originations to facilitate the sale of other real estate owned, and **$558 thousand** in premises and equipment transferred to other real estate owned, with no such activities in Q1 2025[82](index=82&type=chunk) [Note 7 - Minimum Regulatory Capital Requirements](index=29&type=section&id=Note%207%20-%20Minimum%20Regulatory%20Capital%20Requirements) This note outlines the company's compliance with regulatory capital standards, including the Community Bank Leverage Ratio - The Bank has opted into the Community Bank Leverage Ratio (CBLR) framework and was considered 'well-capitalized' at March 31, 2025, with a CBLR ratio of **11.09%**, exceeding the **9%** requirement[84](index=84&type=chunk) Community Bank Leverage Ratio | Metric | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | CBLR Ratio | 11.09% | 10.84% | [Note 8 - Fair Value Measurements](index=31&type=section&id=Note%208%20-%20Fair%20Value%20Measurements) This note explains the fair value hierarchy and provides measurements for various financial assets and liabilities - Fair value measurements are categorized into a three-level hierarchy: **Level 1** (quoted prices in active markets), **Level 2** (observable inputs other than Level 1), and **Level 3** (significant unobservable inputs)[89](index=89&type=chunk) Financial Assets Fair Value (in thousands) | Financial Assets (in thousands) | March 31, 2025 Total Fair Value | December 31, 2024 Total Fair Value | | :------------------------------ | :------------------------------ | :------------------------------- | | Available for sale securities | $74,796 | $75,189 | | Derivative instruments | $0 | $419 | | Collateral-dependent loans | $801 | $861 | | Other real estate owned | $450 | $480 | - Collateral-dependent loans and other real estate owned are measured at fair value on a nonrecurring basis using **Level 3 inputs**, primarily based on appraisals with significant management adjustments[94](index=94&type=chunk)[95](index=95&type=chunk)[100](index=100&type=chunk)[103](index=103&type=chunk) [Note 9 - Employee Stock Ownership Plan](index=39&type=section&id=Note%209%20-%20Employee%20Stock%20Ownership%20Plan) This note details the company's Employee Stock Ownership Plan, including share allocations and compensation expense - The ESOP purchased **260,621 shares** (approximately **8.0%** of common stock) in connection with the mutual to stock conversion on July 14, 2021, with the loan repaid by Company contributions and ESOP dividends[114](index=114&type=chunk) ESOP Share Information (in thousands, except share counts) | ESOP Shares | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Shares allocated to participants | 56,768 | 56,768 | | Unreleased shares | 200,576 | 203,853 | | Total | 252,564 | 255,470 | | Fair value of unreleased shares | $3,209 | $3,109 | - ESOP compensation expense was **$52 thousand** for Q1 2025, up from **$46 thousand** for Q1 2024[116](index=116&type=chunk) [Note 10 – Derivatives](index=40&type=section&id=Note%2010%20%E2%80%93%20Derivatives) This note describes the company's derivative instruments and their impact on financial statements - The Company terminated its interest rate swap agreement on **January 15, 2025**, which was used to hedge interest rate risk on fixed-rate available-for-sale securities[121](index=121&type=chunk)[164](index=164&type=chunk) - The termination resulted in an unrealized gain of **$463 thousand**, which reduced the cost basis of the underlying securities and will be amortized to interest income over their remaining life[121](index=121&type=chunk)[125](index=125&type=chunk)[164](index=164&type=chunk) Derivative Instruments (in thousands) | Derivative Metric (in thousands) | December 31, 2024 | | :------------------------------- | :---------------- | | Notional Amount (Fair Value Hedges) | $25,000 | | Fair Value (Fair Value Hedges) | $419 | | Cumulative Basis Adjustments in Hedged Assets | $(417) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operating results, covering critical accounting policies, liquidity, capital resources, and market risk management [General](index=42&type=section&id=General) This section provides introductory context for the management's discussion and analysis - This discussion should be read in conjunction with the unaudited consolidated financial statements in Part I, Item 1 of this report and the audited consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2024[126](index=126&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=42&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This note advises readers about the inherent uncertainties and risks associated with forward-looking information in the report - The report contains forward-looking statements identifiable by words like 'estimate,' 'project,' 'believe,' 'intend,' 'anticipate,' 'plan,' 'seek,' 'expect,' 'will,' 'would,' 'should,' 'could' or 'may,' and similar meanings[127](index=127&type=chunk) - These statements are subject to significant business, economic, and competitive uncertainties and contingencies, many beyond the Company's control, and actual results may differ materially from anticipated results[127](index=127&type=chunk)[131](index=131&type=chunk) - Key factors that could cause actual results to differ include general economic conditions, changes in market interest rates, loan delinquencies, real estate values, regulatory changes, technological changes, and the ability to manage various risks[129](index=129&type=chunk)[134](index=134&type=chunk) [Summary of Critical Accounting Policies; Critical Accounting Estimates](index=44&type=section&id=Summary%20of%20Critical%20Accounting%20Policies%3B%20Critical%20Accounting%20Estimates) This section outlines the key accounting policies and significant estimates that require management's judgment - The consolidated financial statements are prepared in conformity with GAAP, requiring management to make estimates and assumptions that affect reported amounts[132](index=132&type=chunk) - The Company has elected not to use the extended transition period for complying with new or revised financial accounting standards provided by the JOBS Act[133](index=133&type=chunk) - Critical accounting policies include the **Allowance for Credit Losses**, which uses the weighted average remaining maturity (WARM) method, and **Income Taxes**, involving estimates and judgments on tax assets and liabilities[135](index=135&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) [Comparison of Financial Condition at March 31, 2025 and December 31, 2024](index=46&type=section&id=Comparison%20of%20Financial%20Condition%20at%20March%2031%2C%202025%20and%20December%2031%2C%202024) This section analyzes changes in the company's balance sheet items between the two reporting dates Financial Condition Comparison (in thousands) | Metric (in thousands) | March 31, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------- | :------------- | :---------------- | :--------- | :--------- | | Total Assets | $442,209 | $443,457 | $(1,248) | (0.3)% | | Cash and Cash Equivalents | $11,822 | $13,290 | $(1,468) | (11.0)% | | Interest Bearing Deposits in Banks | $9,284 | $9,720 | $(436) | (4.5)% | | Securities Available for Sale | $74,796 | $75,189 | $(393) | (0.5)% | | Securities Held to Maturity | $21,179 | $22,096 | $(917) | (4.1)% | | Loans and Leases Receivable, Net | $297,522 | $293,708 | $3,814 | 1.3% | | Total Deposits | $337,532 | $335,828 | $1,704 | 0.5% | | Advances from FHLB | $49,558 | $49,878 | $(320) | (0.6)% | | Total Shareholders' Equity | $52,755 | $52,108 | $647 | 1.2% | - The increase in net loans was primarily due to **$21.2 million** in loan originations and **$2.8 million** in loans repurchased from the 2024 loan sale, partially offset by payoffs and contractual repayments[144](index=144&type=chunk) - The loan portfolio is diversified, with **92.3%** in real estate loans, **1.9%** commercial and industrial, **1.7%** consumer, and **4.1%** municipal loans[145](index=145&type=chunk) - At March 31, 2025, **14.0%** of deposits (**$47.2 million**) were potentially uninsured, exceeding the **$250,000** FDIC insurance limit[149](index=149&type=chunk) - Total shareholders' equity increased due to net income, stock-based compensation, and ESOP commitments, partially offset by treasury stock repurchases and dividends[151](index=151&type=chunk) [Average Balance Sheets](index=51&type=section&id=Average%20Balance%20Sheets) This section presents average balances and yields/rates for interest-earning assets and interest-bearing liabilities Average Balance Sheet and Yield/Rate Analysis (in thousands) | Metric (in thousands) | Q1 2025 Average Balance | Q1 2025 Average Yield/Rate | Q1 2024 Average Balance | Q1 2024 Average Yield/Rate | | :-------------------- | :---------------------- | :------------------------- | :---------------------- | :------------------------- | | Loans | $299,454 | 5.88% | $281,314 | 5.27% | | Securities | $96,100 | 4.28% | $119,053 | 4.09% | | Total interest earning assets | $411,006 | 5.48% | $424,914 | 5.10% | | Total interest bearing deposits | $293,592 | 2.45% | $274,014 | 2.56% | | Advances from FHLB | $49,674 | 4.05% | $76,639 | 3.63% | | Total interest bearing liabilities | $343,790 | 2.68% | $351,357 | 2.79% | | Net Interest Income | N/A | $3,328 | N/A | $2,963 | | Net interest margin | N/A | 3.24% | N/A | 2.79% | [Comparison of the Operating Results for the Three Months Ended March 31, 2025 and March 31, 2024](index=53&type=section&id=Comparison%20of%20the%20Operating%20Results%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%20March%2031%2C%202024) This section compares the company's financial performance, including income and expenses, for the two reporting periods Operating Results Comparison (in thousands) | Metric (in thousands) | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :-------------------- | :------ | :------ | :--------- | :--------- | | Net Income (Loss) | $643 | $(2,685)| $3,328 | 123.9% | | Total Interest Income | $5,634 | $5,418 | $216 | 4.0% | | Total Interest Expense | $2,306 | $2,455 | $(149) | (6.1)% | | Net Interest Income | $3,328 | $2,963 | $365 | 12.3% | | Provision for Credit Losses | $113 | $(277) | $390 | 140.8% | | Noninterest Income (Loss) | $462 | $(3,562)| $4,024 | 113.0% | | Noninterest Expense | $2,928 | $3,071 | $(143) | (4.7)% | | Income Tax Expense (Benefit) | $106 | $(708) | $814 | 115.0% | - Net income increased significantly due to the absence of nonrecurring losses from a strategic loan sale and branch demolition in Q1 2024, coupled with increased net interest income and decreased noninterest expenses in Q1 2025[157](index=157&type=chunk) - Interest income on loans increased by **18.6%** due to a **6.4%** increase in average loans and an **11.5%** increase in loan yield, driven by portfolio diversification towards higher-yielding commercial real estate loans[159](index=159&type=chunk) - Net interest margin increased by **45 basis points** to **3.24%** due to balance sheet restructurings, including the 2024 loan sale, allowing for investment in higher-yielding assets and better alignment of asset/liability repricing[167](index=167&type=chunk) - Noninterest income saw a substantial increase, primarily recovering from Q1 2024 nonrecurring losses of **$4.1 million** related to a loan sale and branch construction[169](index=169&type=chunk) - Noninterest expense decreased due to lower occupancy and equipment expenses (post-branch openings), reduced technology expenses (contract negotiation), and lower director fees[172](index=172&type=chunk)[173](index=173&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its financial obligations and maintain adequate capital levels - The Company maintains strong liquidity, with primary funding sources including deposits, loan/security payments, and FHLB borrowings, and unused borrowing capacity with FHLB was **$98.7 million** at March 31, 2025[176](index=176&type=chunk) - The Company monitors large depositors and advises on maximizing FDIC coverage, noting **$47.2 million** (**14.0%** of deposits) was potentially uninsured at March 31, 2025[182](index=182&type=chunk) Securities Portfolio Unrealized Losses (in thousands) | Securities Portfolio (in thousands) | March 31, 2025 | | :-------------------------------- | :------------- | | Gross unrealized losses on AFS securities | $5,500 | | Gross unrealized losses on HTM securities | $2,200 | | Total gross unrealized losses | $7,700 | | Net unrealized loss on AFS securities (net of tax) | $4,400 | - The Bank terminated interest rate swap agreements in Q1 2025, recognizing a **$463 thousand** gain that reduced unrealized losses on underlying securities[186](index=186&type=chunk) - Asset quality remains strong, with an allowance for credit losses to loans and leases held for investment at **1.09%** at March 31, 2025[187](index=187&type=chunk) [Management of Market Risk](index=60&type=section&id=Management%20of%20Market%20Risk) This section describes how the company identifies, measures, and manages its exposure to market risks, primarily interest rate risk - The Company's most significant market risk is interest rate risk, managed by evaluating and limiting exposure of financial condition and operations to interest rate changes[189](index=189&type=chunk) - Strategies to manage interest rate risk include growing core deposits, managing investment portfolio maturity, diversifying the loan portfolio with more commercial loans, and utilizing derivatives[190](index=190&type=chunk)[191](index=191&type=chunk) Net Interest Income Sensitivity (in thousands) | Change in Interest Rates (basis points) | Net Interest Income Year 1 Forecast (in thousands) | Year 1 Change from Level (%) | | :-------------------------------------- | :----------------------------------------------- | :--------------------------- | | 400 | $13,354 | 6.13% | | 200 | $13,080 | 3.95% | | Level | $12,583 | — | | (200) | $12,388 | (1.55)% | | (400) | $12,185 | (3.16)% | Economic Value of Equity (EVE) Sensitivity (in thousands) | Change in Interest Rates (basis points) | Estimated EVE (in thousands) | Increase (Decrease) in EVE (%) | | :-------------------------------------- | :--------------------------- | :----------------------------- | | 400 | $54,949 | (2.52)% | | 200 | $56,916 | 0.97% | | Level | $56,371 | — | | (200) | $50,919 | (9.67)% | | (400) | $37,066 | (34.25)% | - Modeling changes in interest rates (Net Interest Income and Net Economic Value) involve assumptions that may not perfectly reflect actual market responses, thus actual results may differ[204](index=204&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the 'Management of Market Risk' discussion within Item 2 for quantitative and qualitative disclosures about market risk, primarily focusing on interest rate risk - Quantitative and qualitative disclosures about market risk are provided in the 'Management of Market Risk' section of Item 2[206](index=206&type=chunk) [Item 4. Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025. There were no material changes in internal controls over financial reporting during the quarter - The Company's disclosure controls and procedures were deemed effective as of March 31, 2025, following an evaluation by management, including the CEO and CFO[207](index=207&type=chunk) - No changes in internal controls over financial reporting materially affected, or were reasonably likely to materially affect, the Company's internal control during the quarter ended March 31, 2025[208](index=208&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not involved in any legal proceedings, other than routine matters, that are believed to be material to its consolidated financial condition or results of operations as of March 31, 2025 - The Company is not involved in any pending legal proceedings, beyond routine business operations, that are considered material to its financial condition or results[211](index=211&type=chunk) [Item 1A. Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) This section is not applicable as the Company qualifies as a 'smaller reporting company,' which exempts it from certain disclosure requirements for risk factors - Item 1A, Risk Factors, is not applicable because the Company is a 'smaller reporting company'[212](index=212&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The Company has initiated multiple stock repurchase programs, with the latest announced on February 27, 2025, to repurchase 153,083 shares. As of March 31, 2025, a total of 313,773 shares have been repurchased under these plans - On February 27, 2025, the Company announced a third stock repurchase program for **153,083 shares** (approximately **5%** of outstanding shares), with no stated expiration date[212](index=212&type=chunk) - As of March 31, 2025, the Company had repurchased a total of **313,773 shares** under its various repurchase plans[212](index=212&type=chunk) Issuer Purchases of Equity Securities | Period (Q1 2025) | Total Number of Shares Purchased | Average Price Paid Per Share | Maximum Number of Shares That May Yet be Purchased Under the Plans | | :---------------- | :------------------------------- | :--------------------------- | :--------------------------------------------------------------- | | January | 21,500 | $15.48 | 22,385 | | February | 5,000 | $16.05 | 170,468 | | March | 5,000 | $16.30 | 165,468 | | Total | 31,500 | $15.70 | N/A | [Item 3. Defaults Upon Senior Securities](index=66&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities during the period - There were no defaults upon senior securities[215](index=215&type=chunk) [Item 4. Mine Safety Disclosures](index=66&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[216](index=216&type=chunk) [Item 5. Other Information](index=66&type=section&id=Item%205.%20Other%20Information) During the first quarter of 2025, none of the Company's directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangements - No directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangements during the three months ended March 31, 2025[217](index=217&type=chunk) [Item 6. Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including organizational documents, employment agreements, certifications (Sarbanes-Oxley Act), and interactive data files (iXBRL) - Exhibits include Articles of Incorporation, Amended and Restated Bylaws, an Employment Agreement, CEO and CFO certifications under Sarbanes-Oxley Act (Sections 302 and 906), and iXBRL formatted financial statements and notes[219](index=219&type=chunk) [Signatures](index=69&type=section&id=Signatures) The report is duly signed on behalf of Texas Community Bancshares, Inc. by Jason Sobel, President and Chief Executive Officer, and Julie Sharff, CPA, Chief Financial Officer, on May 13, 2025 - The report is signed by Jason Sobel, President and CEO, and Julie Sharff, CPA, CFO, on May 13, 2025[224](index=224&type=chunk)

Financial Performance - Texas Community Bancshares reported net income of $643,000 for Q1 2025, compared to a net loss of $2.7 million in Q1 2024, marking the fourth consecutive quarter of net income growth[1][2]. - Noninterest income surged by $4.1 million, or 113.9%, to $462,000 in Q1 2025, recovering from a loss of $3.6 million in Q1 2024[3]. Income and Expenses - Net interest income increased by $365,000, or 12.3%, to $3.3 million for Q1 2025, driven by a 45 basis point increase in net interest margin from 2.79% to 3.24%[2]. - Average loan yields rose by 61 basis points to 5.88% in Q1 2025, compared to 5.27% in Q1 2024, reflecting a strategic shift towards higher yielding commercial loans[2]. - Noninterest expense decreased by $143,000, or 4.7%, to $2.9 million in Q1 2025, primarily due to reductions in occupancy, equipment, and technology expenses[5]. Credit and Capital - The provision for credit losses was recorded at $113,000 for Q1 2025, with an allowance for credit losses to total loans ratio of 1.09%[5][6]. - Total shareholders' equity increased by $647,000, or 1.2%, to $52.8 million at March 31, 2025, supported by net income and a reduction in accumulated other comprehensive loss[7]. - Broadstreet Bank maintained a leverage ratio of 11.09% as of March 31, 2025, indicating it is well-capitalized under the community bank leverage ratio framework[8]. Asset Management - The bank's total assets decreased slightly to $442.2 million at March 31, 2025, from $443.5 million at December 31, 2024[10]. Strategic Initiatives - Texas Community Bancshares has approved a stock repurchase program for up to 5% of outstanding common shares, reflecting confidence in future growth prospects[2].

Financial Performance - Net interest income increased to $12,550 thousand in 2024, up from $11,064 thousand in 2023, representing a growth of about 13.4%[220] - For the year ended December 31, 2024, net interest income increased by $1.5 million, or 13.4%, to $12.55 million compared to $11.06 million in 2023[242] - Interest income rose by $3.5 million, or 18.4%, to $22.5 million for the year ended December 31, 2024, driven by increased interest income on loans[248] - Interest income on net loans and leases increased by $3.1 million, or 24.0%, to $15.9 million for the year ended December 31, 2024[250] - Interest income from interest-bearing deposits in banks increased by $271,000, or 60.0%, to $723,000 for the year ended December 31, 2024[252] - Interest expense increased by $2.0 million, or 25.3%, to $9.9 million for the year ended December 31, 2024, primarily due to a 42 basis points increase in the average yield on interest-bearing liabilities[254] - Net interest income rose by $1.5 million, or 13.5%, to $12.6 million for the year ended December 31, 2024, driven by a 3.8% increase in interest-earning assets[256] Asset Quality - The total nonperforming assets to total assets ratio was 0.62% in 2024, up from 0.30% in 2023, indicating a deterioration in asset quality[213] - Nonperforming loans as a percentage of total loans increased to 0.76% in 2024 from 0.41% in 2023, reflecting a decline in asset quality[221] - Provision for credit losses decreased to $158 thousand in 2024 from $356 thousand in 2023, a reduction of approximately 55.6%[220] - Provision for credit losses decreased by $198,000, or 55.6%, to $158,000 for the year ended December 31, 2024, reflecting significant loan growth in 2023[257] - The allowance for credit losses to total loans and leases was 1.09% as of December 31, 2024[289] Deposits and Loans - Total deposits increased to $335,828 thousand in 2024, compared to $317,241 thousand in 2023, reflecting a growth of about 5.0%[220] - Core deposits totaled $205.9 million, or 61.3% of total deposits, as of December 31, 2024, compared to $198.5 million, or 62.6% in 2023, indicating a slight decrease in the proportion of core deposits[213] - Net loans and leases receivable increased by $13.8 million, or 4.9%, to $293.7 million, driven by an increase in commercial real estate loans and construction loans[231] - Commercial real estate loans rose to $56.1 million, or 19.0% of total loans, compared to $41.8 million, or 14.8% in 2023, indicating a significant increase in focus on this segment[210] - Construction and land loans increased to $54.1 million, or 18.4% of total loans, up from $37.5 million, or 13.3% in 2023, showing a strategic shift towards diversification[210] - Deposits increased by $18.6 million, or 5.9%, to $335.8 million, with brokered deposits rising by $10.0 million, or 83.4%[236] Expenses and Losses - Noninterest expense increased to $12,270 thousand in 2024 from $11,997 thousand in 2023, reflecting a rise of approximately 2.3%[220] - Noninterest income decreased by $2.3 million, or 641.0%, resulting in a loss of $1.9 million for the year ended December 31, 2024, primarily due to a $3.8 million loss on the sale of loans[259] - Noninterest expense increased by $273,000, or 2.3%, to $12.3 million for the year ended December 31, 2024, mainly due to higher occupancy and equipment costs[260] - Salary and employee benefit expenses decreased by $229,000, or 3.2%, to $6.8 million for the year ended December 31, 2024, despite increases in equity award expenses[261] - The net loss for the year ended December 31, 2024, was $1.3 million, an increase of $572,000, or 78.0%, compared to a net loss of $733,000 in 2023[247] Capital and Liquidity - Total assets decreased to $443,457 thousand in 2024 from $452,044 thousand in 2023, a decline of approximately 1.3%[220] - Total shareholders' equity decreased by $1.6 million, or 3.0%, to $52.1 million, primarily due to a net loss of $1.3 million for the year[238] - The efficiency ratio worsened to 115.24% in 2024 from 105.09% in 2023, indicating increased noninterest expenses relative to income[221] - At December 31, 2024, Broadstreet Bank's community bank leverage ratio was 10.84%, exceeding the required 9.0% to be considered "well capitalized" under regulatory requirements[239] - At December 31, 2024, Broadstreet Bank exceeded all regulatory capital requirements and was categorized as well-capitalized[290] - The company has a Federal Home Loan Bank borrowing capacity of $102.4 million and $18 million in credit lines with two correspondent banks[293] Securities and Investments - The total gross unrealized losses on the securities portfolio amounted to $9.0 million, or 8.7% of the $103.7 million portfolio, and 18.8% of capital[286] - The net unrealized loss on AFS securities and derivatives combined was $4.8 million, or 9.9% of capital[288] - The company anticipates $42.7 million in incoming cash flow from the securities portfolio over the next 24 months, with $22.4 million expected in 2025 and $20.3 million in 2026[286] - The company entered into interest rate swap agreements with a total notional amount of $25 million to hedge risks associated with fixed-rate AFS securities[287] Interest Rate Sensitivity - In the event of a 200 basis point increase in interest rates, net interest income would increase by 7.50%[270] - In the event of a 200 basis point decrease in interest rates, net economic value (EVE) would decrease by 8.65%[275] Other Financial Metrics - The average cost of deposits increased by 42 basis points, or 17.4%, to 2.83% at December 31, 2024, compared to 2.41% at December 31, 2023[236] - The average yield on interest-earning assets increased by 66 basis points, or 14.0%, from 4.68% in 2023 to 5.34% in 2024[248] - The average balance of the loan portfolio increased by $14.7 million, or 5.5%, from $268.2 million in 2023 to $282.9 million in 2024[250] - The average balance of securities decreased by $12.6 million, or 10.2%, from $123.5 million in 2023 to $110.9 million in 2024[249] - Dividends on restricted investments increased by $62,000, or 39.0%, to $221,000 for the year ended December 31, 2024[251]

Core Viewpoint - Texas Community Bancshares, Inc. has announced a new stock repurchase program authorizing the repurchase of up to 153,083 shares, representing approximately 5% of its outstanding common stock as of February 25, 2025 [1] Group 1 - The company has repurchased over 85% of the 161,316 shares authorized under the previous stock repurchase program [1] - The repurchases will be conducted through open market purchases or privately negotiated transactions, depending on market conditions [2] - The company emphasizes its commitment to maintaining financial flexibility for core operations while executing the stock repurchase program [2]