CoastalSouth Bancshares, Inc. Debt Disclosure

NOTE 8 — OTHER BORROWINGS

The Company had no pledged investment securities as collateral for the FHLBA advances at December 31, 2025 and 2024. The Company's FHLB stock is also pledged to secure the borrowings. In addition, the Company has pledged blanket liens on its first mortgages 1-4 family residential loans, second mortgages 1-4 family residential loans, including open-ended loans and closed-end 1-4 family residential properties, and commercial real estate loans. The aggregate balance of identified pledgable loans totaled $176.3 million and $162.8 million at December 31, 2025 and 2024, respectively.

The Company had the ability to borrow an additional $144.3 million and $141.8 million at December 31, 2025 and 2024, respectively, from the FHLBA secured by a blanket lien on one-to-four family first mortgage loans, multifamily residential loans, and revolving, open-end loans, marketable securities or cash. FHLBA has approved borrowings up to 20% of CSB's total assets less advances outstanding. The borrowings are available by pledging collateral and purchasing additional stock in the FHLBA. All of the lines discussed above can be revoked at the lender’s discretion.

On December 10, 2021, the Company ("Borrower") entered into a Loan and Security Agreement (the "Agreement") with ServisFirst Bank ("Lender"), for the Lender to extend a revolving line of credit in the maximum principal amount of $18.0 million (the "Loan") and commitment. Interest on the principal balance of the Loan from time to time outstanding was payable at a per annum rate (the “Interest Rate”) equal to the greater of (i) the Prime Rate in effect from time to time; or (ii) a floor rate of three and twenty-five hundredths percent (3.25%). On November 21, 2023, the Agreement was amended and restated in its entirety to increase the maximum principal amount to $24.0 million and provided other terms and conditions. On December 10, 2025, the Agreement was amended and restated in its entirety to decrease the maximum principal amount to $15.0 million and provided other terms and conditions. At December 31, 2025 and 2024, the Company had nil and $12.0 million, respectively, of this revolving commercial line of credit outstanding. Unamortized debt issuance costs related to this line of credit were nil and $5 thousand at December 31, 2025 and 2024, respectively.

The Company incurred $300 thousand and $1.1 million of interest expense related to the ServisFirst line of credit for the years ended December 31, 2025 and 2024, respectively.

The Company had pledged investment securities at December 31, 2025 and 2024, totaling $9.1 million and $8.5 million, respectively, as collateral for federal funds purchased. As of December 31, 2025 and 2024, the Company had unused lines of credit to purchase federal funds from unrelated banks totaling $69.5 million as of the end of both periods, a portion of which is secured by investment securities. These lines of credit are available on a one-day basis for general corporate purposes. The Company had no outstanding balances under these lines of credit at December 31, 2025 and 2024.

As of December 31, 2025 and 2024, the Company had an unused line of credit to borrow from the FRB of Richmond discount window totaling $29.8 million and $30.4 million, respectively, which was fully secured by investment securities. This line of credit was available on an overnight basis for general corporate purposes. The Company had pledged investment securities at December 31, 2025 and 2024 totaling $31.6 million and $32.1 million, respectively, as collateral at the FRB. As of December 31, 2025 and 2024, the Company had no outstanding balances.

On September 9, 2020, the Company issued a private placement of $15.0 million of 5.95% fixed-to-floating rate subordinated notes due 2030 (the "Notes") to certain qualified institutional buyers and institutional accredited investors (the "Private Placement"). The Notes were structured to qualify as Tier 2 capital for regulatory capital purposes. The Notes were unsecured and had a ten-year term, maturing September 15, 2030, and bore interest at a fixed annual rate of 5.95%, payable semi-annually in arrears, for the first five years of the term. Thereafter, the interest rate were to reset quarterly to an interest rate per annum equal to the then current three-month Secured Overnight Financing Rate ("Three-Month SOFR"), plus a spread of 582 basis points, payable quarterly in arrears, provided, however, that, in the event the Three-Month SOFR is less than zero, the Three-Month SOFR was to be deemed to be zero. As was provided in the Notes, under specified conditions, the interest rate on the Notes during the Floating Rate Period was determined based upon a rate other than Three-Month SOFR. The Company had the option to redeem the Notes, in whole or in part, on any interest payment date on or after September 15, 2025, and to redeem the Notes at any time in whole upon certain other specified events. On September 15, 2025, the Company redeemed the Notes in whole along with the accrued interest. There were no unamortized debt issuance costs related to the subordinated debt at December 31, 2025 as the Note was fully redeemed and the remaining unamortized cost was expensed. Unamortized debt issuance costs related to the subordinated debt were $270 thousand at December 31, 2024.

The Company incurred $893 thousand and $940 thousand of interest expense related to subordinated debt for the years ended December 31, 2025 and 2024, respectively.