MINEOLA, Texas, April 24, 2026 /PRNewswire/ — Texas Community Bancshares, Inc. (“Texas Community Bancshares” or the “Company”) (NASDAQ:TCBS), the holding company for Broadstreet Bank, SSB, today reported net income of $836,000 for the three months ended March 31, 2026, compared to net income of $643,000 for the three months ended March 31, 2025.
Texas Community Bancshares’ President and Chief Executive Officer (CEO) Jason Sobel, said, “I am pleased to report continued momentum across our key financial measures. Net income increased to $836,000 for the quarter, up from $643,000 in the 1st quarter of 2025, representing a 30.0% improvement compared to the same period last year. This marks our sixth consecutive record quarter in our 92-year history. In addition, compared to 2021, the year in which we went public—when full-year net income was $518,000—we have already generated more than 150% of that amount in the first quarter of 2026.”
“We still have over $80 million in our loan portfolio at rates of 4% or less that will continue to pay down and be replaced with new loans at current market rates. Currently, we are seeing favorable loan demand that is helping us reach our growth target. We have also grown our lower cost deposit base, which is helping reduce our funding costs.”
“The bank has continued to modernize by automating portions of our loan processing, issuing tap-to-pay cards on site, and deploying ATMs that accept deposits for transactions that cannot be completed through mobile deposit.”
“As we continue to meet our improvement targets, we are now poised for growth. We plan to enter the outer DFW market and broke ground this quarter in Terrell, Texas. With the area experiencing significant expansion, we expect to be the fourth bank in a market with more than $1 billion in deposits.”
“Last year, we foreclosed on two large real estate relationships and moved the underlying collateral properties to Other Real Estate Owned. Both are located in desirable areas – one in our primary market area, and one in the DFW metroplex. Each property is being marketed for sale, and we have received strong interest.”
“There is a lot of noise in the economy today, and we believe we are positioned to benefit across a range of scenarios. If rates rise, we can replace low-rate loans with higher-yielding credits. If rates decline, we can lower our funding costs. If loan demand increases, we are prepared to grow. If loan demand slows, we can meaningfully pay down non-core funding to reduce interest expense and adjust fixed-rate deposit costs to improve efficiency. We also have more variable-rate assets than ever before, which provides additional flexibility in changing market conditions.”
“We continue to believe we are stronger, more efficient, and better positioned than ever to capitalize on opportunities in 2026. We will continue to work with trusted partners as we evaluate options to expand our market share, optimize our branch network, and grow our client base. We remain committed to executing our strategic growth plan while creating long-term value and returns for our shareholders.”
Results of Operations
Net interest income increased $103,000, or 3.1%, to $3.4 million for the three months ended March 31, 2026 from $3.3 million for the three months ended March 31, 2025 due to a decrease in interest expense of $167,000. This resulted primarily from a reduction of $10.4 million, or 3.5%, in average interest-bearing deposits from $293.6 million for the three months ended March 31, 2025 to $283.2 million for the three months ended March 31, 2026. Additionally, the cost of interest-bearing deposits decreased 12 basis points over the same period to 2.33% for the three months ended March 31, 2026 from 2.45% for the same period in 2025.
Interest income for the three months ended March 31, 2026 decreased $64,000, or 1.1% to $5.6 million. Loan interest increased by $254,000, or 5.8% to $4.7 million for three months ended March 31, 2026 from $4.4 million for the three months ended March 31, 2025. Loan yields increased 26 basis points, or 4.4%, to 6.14% for the three months ended March 31, 2026 from 5.88% for the same period in 2025. This was offset by a decrease of $266,000, or 25.9%, in interest on securities. Average securities decreased $18.1 million, or 18.8%, to $78.0 million for the three months ended March 31, 2026 from $96.1 million for the same period in 2025. The average yield on securities also decreased 37 basis points, or 8.7% to 3.91% for the three months ended March 31, 2026 from 4.28% for the same period in 2025.
The provision for credit losses was $6,000 for the three months ended March 31, 2026, a decrease of $107,000, or 94.7% compared to $113,000 for the three months ended March 31, 2025 primarily due to a $4.7 million decrease in loans in the 1st quarter of 2026 and changes in the composition of the loan portfolio. Net interest income after provision for credit losses was $3.4 million for the first quarter of 2026, compared to $3.2 million for the same period in 2025.
Noninterest income increased $236,000, or 51.1%, to $698,000 for the three months ended March 31, 2026, compared to $462,000 for the same period in 2025. This was due primarily to $168,000 in rental income on a multifamily property foreclosed on in the 3rd quarter of 2025, as well as a $57,000 referral fee earned in connection with the payoff and transfer of an existing multifamily loan to capital markets. The foreclosed property is currently held in Other Real Estate Owned. It is over 90% occupied and is currently being marketed for sale.
Noninterest expense increased $240,000, or 8.2%, to $3.2 million for the three months ended March 31, 2026 from $2.9 million for the same period in 2025. This was due primarily to $104,000 in expense related to the foreclosed multifamily noted previously, and a $77,000 increase in technology expense related to the implementation of an online loan origination and account opening platform.
Net interest margin increased 25 basis points, or 7.6%, to …