Texas Community Bancshares, Inc. 10-K

ITEM 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm (PCAOB ID 686 ) Shareholders, Board of Directors and Audit Committee Texas Community Bancshares, Inc. and Subsidiaries Mineola, Texas Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated statements of financial condition of Texas Community Bancshares, Inc. (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. We have served as the Company’s auditor since 2020. /s/ Forvis Mazars , LLP Houston, Texas March 25, 2026 ​ ​ 52 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Consolidated Statements of Financial Condition December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ December 31, ​ ​ 2025 ​ 2024 Assets ​ ​ ​ ​ ​ ​ Cash and due from banks $ 3,876 $ 4,015 Federal funds sold ​ ​ 2,574 ​ ​ 9,275 Cash and cash equivalents ​ ​ 6,450 ​ ​ 13,290 Interest bearing deposits in banks ​ ​ 5,509 ​ ​ 9,720 Securities available for sale ​ ​ 59,893 ​ ​ 75,189 Securities held to maturity, net of allowance for credit losses of $ 0 (fair values of $ 16,744 at December 31, 2025 and $ 19,531 at December 31, 2024) ​ ​ 18,283 ​ ​ 22,096 Loans receivable, net of allowance for credit losses of $ 3,440 at December 31, 2025 and $ 3,222 at December 31, 2024 ​ ​ 301,986 ​ ​ 292,416 Net investment in direct financing leases ​ ​ 1,219 ​ ​ 1,292 Accrued interest receivable ​ ​ 1,888 ​ ​ 1,919 Premises and equipment, net ​ ​ 11,459 ​ ​ 11,526 Bank-owned life insurance ​ ​ 6,544 ​ ​ 6,370 Other real estate owned ​ ​ 9,271 ​ ​ 480 Restricted investments carried at cost ​ ​ 2,773 ​ ​ 3,715 Core deposit intangible ​ ​ — ​ ​ 132 Deferred income taxes ​ ​ 1,814 ​ ​ 2,688 Financial derivative ​ ​ — ​ ​ 419 Other assets ​ ​ 2,753 ​ ​ 2,205 ​ ​ $ 429,842 ​ $ 443,457 Liabilities and Shareholders' Equity ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ ​ Noninterest bearing ​ $ 45,871 ​ $ 41,466 Interest bearing ​ ​ 282,033 ​ ​ 294,362 Total deposits ​ ​ 327,904 ​ ​ 335,828 Advances from Federal Home Loan Bank (FHLB) ​ ​ 45,669 ​ ​ 49,878 Accrued expenses and other liabilities ​ ​ 2,512 ​ ​ 5,643 Total liabilities ​ ​ 376,085 ​ ​ 391,349 Shareholders' Equity ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.01 par value, 1,000,000 shares authorized, none issued and outstanding ​ ​ — ​ ​ — Common stock, $ 0.01 par value, 19,000,000 shares authorized, 3,366,516 issued and 2,887,275 outstanding at December 31, 2025 and 3,370,425 issued and 3,088,152 outstanding at December 31, 2024 ​ ​ 34 ​ ​ 34 Additional paid in capital ​ ​ 33,198 ​ ​ 32,493 Retained earnings ​ ​ 32,412 ​ ​ 30,163 Accumulated other comprehensive loss ​ ​ ( 3,063 ) ​ ​ ( 4,766 ) Unearned Employee Stock Ownership Program (ESOP) shares, at cost ​ ​ ( 1,884 ) ​ ​ ( 2,039 ) Treasury stock, at cost ( 479,241 shares at December 31, 2025 and 282,273 shares at December 31, 2024) ​ ​ ( 6,940 ) ​ ​ ( 3,777 ) Total shareholders' equity ​ ​ 53,757 ​ ​ 52,108 ​ ​ $ 429,842 ​ $ 443,457 ​ See Notes to Consolidated Financial Statements ​ 53 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Consolidated Statements of Operations Years Ended December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Interest Income ​ Loans, including fees ​ $ 17,681 ​ $ 15,923 Debt securities ​ ​ ​ ​ Taxable ​ 3,947 ​ 4,306 Non taxable ​ 176 ​ 158 Dividends on restricted investments ​ 167 ​ 221 Federal funds sold ​ 207 ​ 671 Deposits with banks ​ 323 ​ 723 Financial derivative ​ ( 10 ) ​ 450 Total interest income ​ 22,491 ​ 22,452 Interest Expense ​ ​ ​ ​ ​ Deposits ​ 7,105 ​ 7,293 Advances from FHLB ​ 2,063 ​ 2,599 Other ​ 9 ​ 10 Total interest expense ​ 9,177 ​ 9,902 Net Interest Income ​ 13,314 ​ 12,550 Provision for Credit Losses - loans ​ ​ 736 ​ ​ 269 Provision (Credit) for Credit Losses - off-balance sheet credit exposures ​ ​ 95 ​ ​ ( 111 ) Provision for Credit Losses ​ 831 ​ 158 Net Interest Income After Provision for Credit Losses ​ 12,483 ​ 12,392 Noninterest Income ​ ​ ​ ​ ​ Service charges on deposit accounts ​ 729 ​ 687 Other service charges and fees ​ 1,154 ​ 1,244 Net gain on securities transactions ​ 117 ​ 190 Net loss on sale of loans ​ — ​ ( 3,850 ) Net (loss) gain on sale of other real estate owned ​ ( 19 ) ​ 37 Fair value adjustments to other real estate owned ​ 495 ​ ( 78 ) Net loss on premises and equipment ​ — ​ ( 287 ) Net appreciation on bank-owned life insurance ​ 173 ​ 133 Gain on other investment ​ ​ 198 ​ ​ — Other income ​ 232 ​ 21 Total noninterest income (loss) ​ 3,079 ​ ( 1,903 ) Noninterest Expenses ​ ​ ​ ​ ​ Salaries and employee benefits ​ 6,532 ​ 6,840 Occupancy and equipment expense ​ 1,098 ​ 1,103 Data processing ​ 1,013 ​ 937 Technology expense ​ 298 ​ 435 Contract services ​ 262 ​ 265 Director fees ​ 248 ​ 304 Other expense ​ 2,747 ​ 2,386 Total noninterest expense ​ 12,198 ​ 12,270 Income (Loss) Before Income Taxes ​ 3,364 ​ ( 1,781 ) Income Tax Expense (Benefit) ​ 522 ​ ( 476 ) Net Income (Loss) ​ $ 2,842 ​ $ ( 1,305 ) Earnings (Loss) per share - basic ​ ​ 1.04 ​ ​ ( 0.45 ) Earnings (Loss) per share - diluted ​ ​ 1.00 ​ ​ ( 0.44 ) Weighted-average shares outstanding - basic ​ ​ 2,727,212 ​ ​ 2,915,402 Weighted-average shares outstanding - diluted ​ ​ 2,855,459 ​ ​ 2,986,015 ​ See Notes to Consolidated Financial Statements 54 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Consolidated Statements of Comprehensive Income (Loss) Years Ended December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Net Income (Loss) ​ $ 2,842 ​ $ ( 1,305 ) ​ ​ ​ ​ ​ ​ ​ Other items of comprehensive income ​ ​ ​ ​ ​ ​ Debt Securities ​ ​ ​ ​ ​ ​ Net changes in fair value of available for sale securities, before tax ​ 2,689 ​ 937 Reclassification adjustment for realized gain on sale of investment securities included in net income (loss), before tax ​ ​ ( 117 ) ​ ​ ( 190 ) Net changes in fair value of available for sale securities hedged, before tax ​ ( 417 ) ​ 298 Total other items of comprehensive income, before tax ​ 2,155 ​ 1,045 ​ ​ ​ ​ ​ ​ ​ Income tax expense related to other items of comprehensive income ​ ( 452 ) ​ ( 219 ) Total other items of comprehensive income (loss), after tax ​ 1,703 ​ 826 ​ ​ ​ ​ ​ ​ ​ Comprehensive Income (Loss) ​ $ 4,545 ​ $ ( 479 ) ​ See Notes to Consolidated Financial Statements ​ 55 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Consolidated Statements of Shareholders’ Equity Years Ended December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Other ​ Unearned ​ ​ ​ Total ​ ​ Preferred ​ Common ​ Paid In ​ Retained ​ Comprehensive ​ ESOP ​ Treasury ​ Shareholders' ​ ​ Stock ​ Stock ​ Capital ​ Earnings ​ Loss ​ Shares ​ Stock ​ Equity Balance at January 1, 2025 ​ $ — ​ $ 34 ​ $ 32,493 ​ $ 30,163 ​ $ ( 4,766 ) ​ $ ( 2,039 ) ​ $ ( 3,777 ) ​ $ 52,108 Net income ​ — ​ — ​ — ​ 2,842 ​ — ​ — ​ — ​ 2,842 Stock based compensation expense ​ ​ — ​ ​ — ​ ​ 607 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 607 Other comprehensive income, net of tax ​ — ​ — ​ — ​ — ​ 1,703 ​ — ​ — ​ 1,703 Cash dividend declared ($ 0.20 per share) ​ — ​ — ​ — ​ ( 593 ) ​ — ​ — ​ — ​ ( 593 ) ESOP shares committed to be released, 15,472 shares ​ — ​ — ​ 98 ​ — ​ — ​ 155 ​ — ​ 253 Treasury stock purchased, 196,968 shares ​ — ​ — ​ — ​ — ​ — ​ — ​ ( 3,163 ) ​ ( 3,163 ) Balance at December 31, 2025 ​ $ — ​ $ 34 ​ $ 33,198 ​ $ 32,412 ​ $ ( 3,063 ) ​ $ ( 1,884 ) ​ $ ( 6,940 ) ​ $ 53,757 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at January 1, 2024 ​ $ — ​ $ 34 ​ $ 31,671 ​ $ 31,972 ​ $ ( 5,592 ) ​ $ ( 2,197 ) ​ $ ( 2,199 ) ​ $ 53,689 Net loss ​ — ​ — ​ — ​ ( 1,305 ) ​ — ​ — ​ — ​ ( 1,305 ) Stock based compensation expense ​ ​ — ​ ​ — ​ ​ 757 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 757 Other comprehensive income, net of tax ​ — ​ — ​ — ​ — ​ 826 ​ — ​ — ​ 826 Cash dividend declared ($ 0.16 per share) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 504 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 504 ) ESOP shares committed to be released, 15,862 shares ​ — ​ — ​ 65 ​ — ​ — ​ 158 ​ — ​ 223 Treasury stock purchased, 107,431 shares ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,578 ) ​ ​ ( 1,578 ) Balance at December 31, 2024 ​ $ — ​ $ 34 ​ $ 32,493 ​ $ 30,163 ​ $ ( 4,766 ) ​ $ ( 2,039 ) ​ $ ( 3,777 ) ​ $ 52,108 ​ See Notes to Consolidated Financial Statements ​ 56 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Consolidated Statements of Cash Flows Years Ended December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Operating Activities ​ ​ ​ ​ Net income (loss) ​ $ 2,842 ​ $ ( 1,305 ) Adjustments to reconcile net income (loss) to net cash from operating activities ​ ​ ​ ​ Provision for credit losses - loans ​ ​ 736 ​ ​ 269 Provision (credit) for credit losses - off-balance sheet credit exposures ​ 95 ​ ( 111 ) Net (accretion) amortization of securities ​ ( 149 ) ​ 74 Depreciation and amortization ​ 593 ​ 572 Net realized gain on sales of securities available for sale ​ ( 117 ) ​ ( 190 ) Net unrealized gain on discontinued financial derivative ​ ​ 463 ​ ​ — Stock dividends on restricted investments ​ ​ ( 155 ) ​ ​ ( 211 ) Net increase on other investment ​ ​ ( 157 ) ​ ​ — Loss on sale of loans ​ ​ — ​ ​ 3,850 Loss on disposal of fixed assets ​ — ​ 287 Appreciation on bank-owned life insurance ​ ( 173 ) ​ ( 133 ) ESOP compensation expense for allocated shares ​ ​ 253 ​ ​ 223 Loss (gain) on sale other real estate owned ​ ​ 19 ​ ​ ( 37 ) Fair value adjustment on other real estate owned ​ ​ ( 495 ) ​ ​ 78 Stock-based compensation ​ 607 ​ 757 Deferred income tax expense (benefit) ​ 405 ​ ( 476 ) Loss on fair value adjustment of fair value hedges ​ 10 ​ ( 6 ) Net change in ​ ​ ​ ​ Accrued interest receivable ​ 31 ​ ( 191 ) Other assets ​ ( 229 ) ​ ( 724 ) Accrued expenses and other liabilities ​ ( 3,212 ) ​ ( 785 ) Net Cash from Operating Activities ​ 1,367 ​ 1,941 Investing Activities ​ ​ ​ ​ Net change in interest bearing deposits in banks ​ 4,211 ​ 2,578 Activity in available for sale securities ​ ​ ​ ​ ​ ​ Purchases ​ ( 53,718 ) ​ ( 19,394 ) Sales ​ 23,797 ​ 20,134 Maturities, prepayments and calls ​ ​ 47,683 ​ ​ 18,384 Activity in held to maturity securities ​ ​ ​ ​ Maturities, prepayments and calls ​ 3,724 ​ 3,801 Redemptions of restricted investments ​ 1,096 ​ — Purchases of other investment ​ ( 169 ) ​ ( 132 ) Loan originations and principal collections, net ​ ( 19,189 ) ​ ​ ( 37,139 ) Net decrease (increase) in net investment in direct financing leases ​ 73 ​ ( 1,256 ) Proceeds from sale of loans, originally classified as loans held for investment ​ — ​ 22,971 Proceeds from sales of other real estate owned ​ 568 ​ 56 Additions of premises and equipment ​ ( 394 ) ​ ( 1,201 ) Net Cash from Investing Activities ​ 7,682 ​ 8,802 Financing Activities ​ ​ ​ ​ Net (decrease) increase in deposits ​ ( 7,924 ) ​ 18,587 Advances from FHLB and other borrowings ​ 16,052 ​ 5,052 Payments on FHLB and other borrowings ​ ( 20,261 ) ​ ( 32,070 ) Cash dividends declared and paid ​ ( 593 ) ​ ( 504 ) Purchases of treasury stock ​ ( 3,163 ) ​ ( 1,578 ) Net Cash used for Financing Activities ​ ( 15,889 ) ​ ( 10,513 ) Net Change in Cash and Cash Equivalents ​ ( 6,840 ) ​ 230 Cash and Cash Equivalents at Beginning of Period ​ 13,290 ​ 13,060 Cash and Cash Equivalents at End of Period ​ $ 6,450 ​ $ 13,290 ​ See Notes to Consolidated Financial Statements ​ 57 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Note 1 - Summary of Significant Accounting Policies General Texas Community Bancshares, Inc. (the “Company”), a Maryland corporation and registered bank holding company, was incorporated on March 5, 2021, and became the holding company for Broadstreet Bank, SSB (the “Bank”), formerly known as Mineola Community Bank, SSB prior to December 4, 2023, as part of the mutual to stock conversion of the former Mineola Community Mutual Holding Company (“MHC”), which was completed on July 14, 2021. The Company’s shares trade on the NASDAQ under the symbol TCBS. Voting rights in the Company are held and exercised exclusively by the shareholders of the Company. ​ The Company’s primary source of revenue is providing loans and banking services to consumers and commercial customers in Mineola, Texas, and the surrounding area and the Dallas Fort Worth Metroplex. The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America (GAAP) and to general practices of the banking industry. ​ Policies and practices which materially affect the determination of financial position, results of operations and cash flows are summarized as follows: ​ Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, which include Broadstreet Bank, SSB and its wholly-owned subsidiary Mineola Financial Service Corporation, which is not actively being utilized. All significant intercompany transactions and balances have been eliminated in consolidation. Use of Estimates In preparing consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for credit losses. Significant Group Concentration of Credit Risk Most of the Company’s activities are with customers located within the Wood, Smith, and Van Zandt County areas and the Dallas Fort Worth Metroplex. Note 3 discusses the types of securities in which the Company invests. Note 4 discusses the types of lending in which the Company engages. Approximately 91 % and 93 % of the loan balance at December 31, 2025 and 2024, respectively, is secured by real estate. The Company does not have any other significant concentrations to any one industry or customer. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740). This update requires public business entities to annually disclose specific categories within the income tax rate reconciliation and provide additional information for reconciling items that meet a certain quantitative threshold. Additionally, the amendments in this update require entities to disclose certain information about income taxes paid, income tax disaggregation, disclosures around unrecognized tax benefits, and the removal of disclosures related to temporary differences surrounding deferred tax liabilities to enhance the transparency and decision usefulness of income tax disclosures. This update is effective for 58 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ fiscal years beginning after December 15, 2024, and early adoption is permitted. The Company adopted this update prospectively as of January 1, 2025 (see Note 10). ​ Previously Adopted Accounting Pronouncements In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which expands reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. The amendments in this update introduce a new requirement to disclose significant segment expenses regularly provided to the chief operating decision maker, extend certain annual disclosures to interim periods, clarify that single reportable segment entities must apply Topic 280 in its entirety, permit more than one measure of segment profit or loss to be reported under certain conditions and require disclosure of the title and position of the chief operating decision maker. ASU 2023-07 is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company has evaluated the impact of adopting ASU 2023-07 and concluded the impact to be immaterial on its consolidated financial position, results of operations, or disclosures. See Note 1 for the corresponding segments disclosure. ​ Accounting Pronouncements Not Yet Adopted ​ In December 2025, the FASB issued Accounting Standards Update ("ASU") 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements , which amends ASC Topic 270 to improve the organization and navigability of interim reporting guidance and to clarify when the guidance applies. The ASU compiles existing interim disclosure requirements from across the Codification into Topic 270 and introduces a disclosure principle requiring entities to disclose events that occur after the end of the most recent annual reporting period that have a material effect on the entity. The amendments are not intended to change the fundamental nature of interim reporting or significantly expand or reduce existing interim disclosure requirements. ​ For public business entities, the amendments are effective for interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied prospectively or retrospectively. The Company is currently evaluating the impact of this ASU on its interim financial statement disclosures and does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. ​ In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income— Expense Disaggregation Disclosures (Subtopic 220-40) , which requires public business entities to provide enhanced disclosures in the notes to the financial statements regarding the disaggregation of certain income statement expense captions into specified natural expense categories, including, but not limited to, employee compensation, depreciation, and amortization. The ASU does not change the expense captions presented on the face of the income statement. ​ For public business entities, the amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently assessing the impact of this ASU on its financial statement disclosures and related reporting processes. Adoption of this guidance is expected to primarily affect the Company’s disclosure requirements and is not expected to have a material impact on its consolidated financial statements. ​ Cash and Cash Equivalents For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash, balances due from banks and federal funds sold, all of which mature within ninety days. 59 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Balances in transaction accounts at other financial institutions may exceed amounts covered by federal deposit insurance. Management regularly evaluates the credit risk associated with other financial institutions and believes that the Company is not exposed to any significant credit risks on cash and cash equivalents. At December 31, 2025 and 2024, the Company had $ 5,209 and $ 9,421 , respectively, that exceeded amounts covered by federal deposit insurance. Interest Bearing Deposits in Banks Interest bearing deposits in banks mature within three to six months and are carried at cost. Debt Securities Debt securities that management has the positive intent and ability to hold to maturity are classified as “held to maturity” and recorded at amortized cost. Debt securities not classified as held to maturity are classified as “available for sale” and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss). Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Held to Maturity Securities ​ The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326. The Company first assesses whether it intends to sell or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through net income. For securities that do not meet this criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. ​ In making this assessment, the Company considers the extent to which fair value is less than amortized cost, changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income (loss). Changes in the allowance for credit losses are recorded as provision for or (reduction of) provision for credit losses. ​ Losses are charged against the allowance when management believes the uncollectability of a security is confirmed or when either of the criteria regarding intent or requirement to sell is met. ​ For the year ended December 31, 2025 and 2024, the Company determined no provision for credit losses on securities was necessary. ​ Restricted Investments Carried at Cost The Company’s primary restricted investment is Federal Home Loan Bank stock carried at cost ($ 100 per share par value), which approximates its fair value. As a member of the FHLB system, the Company is required to maintain a minimum level of investment in FHLB stock based on specific percentages of its outstanding FHLB advances. The Company may request redemption at par value of any stock in excess of the amount it is required to hold. Stock 60 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ redemptions are made at the discretion of FHLB. Due to advance requirements, there were no purchases and dividend reinvestments of $ 155 for the year ended December 31, 2025, and there were no purchases and dividend reinvestments of $ 211 for the year ended December 31, 2024. Both cash and stock dividends are reported as income. There were stock redemptions of $ 1,096 during 2025 and no sales or redemptions during 2024. Additionally, the Company periodically evaluates FHLB stock for impairment. As of December 31, 2025 or 2024, no impairment charges were recorded. Other restricted investments are carried at cost. Any changes to the cost basis of these investments are recorded in the consolidated statements of operations. Loans and Leases The Company grants mortgage, commercial and consumer loans to customers. A substantial portion of the loan portfolio is represented by loans secured by real estate throughout Wood, Smith, and Van Zandt Counties and the Dallas Fort Worth Metroplex area. The ability of the Company’s debtors to honor their contracts is dependent upon the general economic conditions in this area. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off which are measured at historical cost are generally reported at their outstanding unpaid principal balances net of any unearned income, charge-offs, and unamortized deferred fees and costs on originated loans. Interest income is accrued on the unpaid principal balance. The deferral of all loan origination fees and origination costs is quantified annually. In 2025 and 2024, management determined the deferral of these fees and costs to be immaterial to the consolidated financial statements. Unearned income is amortized to interest income using a straight-line methodology. Accrued interest receivable on loans totaled $ 1,493 and $ 1,416 as of December 31, 2025 and 2024, respectively, and was reported in accrued interest receivable on the consolidated statement of financial condition and is excluded from the estimate of credit losses. The Company makes disclosures of loans and other financing receivables and the related allowance in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 310, Receivables. The accounting guidance defines a portfolio segment as the level at which an entity develops and documents a systematic methodology to determine the allowance for credit losses, and a class of financing receivables as the level of disaggregation of portfolio segments based on the initial measurement attributes, risk characteristics and methods for assessing risk. The Company’s portfolio segments are real estate, agriculture, commercial, municipalities, and consumer and other. The classes of financing receivables within the real estate segment are Construction and Land, Farmland, 1-4 Residential and Multifamily, and Commercial Real Estate. The remaining portfolio segments contain a single class of financing receivables. Under this accounting guidance, the allowance is presented by portfolio segment. Allowance for Credit Losses ​ The Company uses the weighted average remaining maturity (“WARM”) method to estimate expected losses for all of Company’s loan pools. These pools are as follows: construction & land; farmland; 1-4 residential & multi-family real estate; commercial real estate; agriculture; commercial; municipalities; and consumer and other. The loan portfolio pools were selected in order to generally align with the loan categories specified in the quarterly call reports required to be filed with the Federal Financial Institutions Examination Council. For each of these loan pools, the Company calculates an average annual loss rate and estimates future outstanding balances based on contractual maturities and estimated prepayments. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data and peer group data. Relevant data to support the Company’s estimates of lifetime expected credit losses is maintained through internal and external information. The CECL model leverages the use of publicly available call report data, which allows the use of external information from peers to supplement the Company’s own historical data. The loss rate is based on historical loss rates for the peer group and the Company. Due to internal loss rates being 61 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ low, a blended historical loss rate of 75% peer group and 25% Company was used. The weighted average remaining life is determined based on contracted loan payments, expected prepayments and maturity dates. The allowance model uses data from the St. Louis Federal Reserve Economic Database for reasonable and supportable forecasts. ​ Management has determined that between years one and two represents a reasonable and supportable forecast period and reverts to a historical loss rate in years three or four depending on the loan type. Management leverages economic projections from the St. Louis Federal Reserve Economic Database (FRED) to inform its loss driver forecasts. Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics. ​ Allowance for Credit Losses on Off-Balance Sheet Credit Exposures ​ The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless the obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted through credit loss expense . The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its expected life. Estimates are influenced by historical losses, economic conditions and reasonable and supportable forecasts described in the preceding section for the allowance for credit losses on loans receivable. ​ Nonperforming Loans, Charge-Offs and Delinquencies ​ Nonperforming loans generally include loans that have been placed on nonaccrual status including nonaccrual loans whose contractual terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties. ​ The entire balance of a loan is contractually delinquent if the minimum payment is not received by the specified due date on the customer’s billing statement. Interest and fees continue to accrue on past due loans until the date the loan goes into nonaccrual status, if applicable. ​ The outstanding balance of real estate secured loans, including all classes of financing receivables within the real estate portfolio segment, that is in excess of the estimated property value, less estimated costs to sell, is generally charged off no later than the end of the month in which the account becomes 180 days past due. The estimated property value, less estimated costs to sell, is determined utilizing appraisals or broker price opinions of the fair value of the collateral. ​ The outstanding balance of loans within the remaining loan segments (agriculture, commercial, and consumer and other) are generally charged off no later than the end of the month in which the account becomes 120 days past due. For secured loans, accounts are written down to the collateral value. ​ The fair value of the collateral is estimated by management based on current financial information, inspections, and appraisals. For unsecured loans, the outstanding balance is written off. ​ Loans within all portfolio segments are generally placed on nonaccrual status and classified as nonperforming at 90 days past due. ​ Accrued interest receivable is reversed when a loan is placed on nonaccrual status. Interest collections on non-accruing loans for which the ultimate collectability of principal is uncertain are applied as principal reductions; otherwise, such collections are credited to interest income when received. These loans may be restored to accrual status when all principal and interest is current and full repayment of the remaining contractual principal and interest is expected, or 62 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ when the loan otherwise becomes well-secured and is in the process of collection. ​ Wholesale Lending The Company has entered into a wholesale lending agreement with a wholesale lender and correspondent bank, TIB. The Company facilitates the loan application process and interacts with the customer while the wholesale lender underwrites, funds, closes and services the loan. The Company receives a fee from the wholesale lender at closing for the services provided which is included in noninterest income. Financial Instruments In the ordinary course of business, the Company has entered into commitments to extend credit, including commercial letters of credit and standby letters of credit. Such financial instruments are recorded when they are funded. Derivative Loan Commitments Mortgage loan commitments that relate to the origination of a mortgage that will be held for sale upon funding are considered derivative instruments under the derivatives and hedging accounting guidance (FASB ASC 815, Derivatives and Hedging). Loan commitments that are derivatives are recognized at fair value on the consolidated statements of financial condition in other assets and other liabilities with changes in their fair values recorded in noninterest income. Forward Loan Sale Commitments The Company evaluates all loan sales agreements to determine whether they meet the definition of a derivative under FASB ASC 815 as facts and circumstances may differ significantly. If agreements qualify, to protect against the price risk inherent in derivative loan commitments, the Company uses "best efforts" forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments. Accordingly, forward loan sale commitments are recognized at fair value on the consolidated statements of financial condition in other assets and liabilities with changes in their fair values recorded in other noninterest income. The Company estimates the fair value of its forward loan sales commitments using a methodology similar to that used for derivative loan commitments. Transfers of Financial Assets Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company – put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets. Cash Surrender Value of Bank-owned Life Insurance Life insurance policies are initially recorded at cost at the date of purchase. Subsequent to purchase, the policies are periodically adjusted for changes in cash surrender value. The adjustment to cash surrender value increases or decreases the carrying value of the policies and is recorded as income or expense on the consolidated statements of operations. 63 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Other Real Estate Owned Assets acquired through, or in lieu of, loan foreclosure are initially recorded at fair value less estimated costs to sell at the date of foreclosure. All write-downs based on the asset’s fair value at the date of acquisition are charged to the allowance for credit losses. After foreclosure, property held for sale is carried at the lower of the new cost basis or estimated fair value less costs to sell. Impairment losses on property to be held and used are measured at the amount by which the carrying amount of a property exceeds its fair value. Costs of significant property improvements are capitalized, whereas costs related to holding property are expensed. Valuations are periodically performed by management, and any subsequent write-downs are recorded as a charge to earnings, if necessary, to reduce the carrying value of the property to the lower of its cost or fair value less costs to sell. Premises and Equipment Land is carried at cost. Buildings and equipment are carried at cost, less accumulated depreciation computed on the straight-line method over the estimated useful lives of the assets or the expected terms of the leases, if shorter. Buildings and related components are depreciated using the straight-line method with useful lives ranging from 7 to 40 years . Furniture, fixtures and equipment are depreciated using the straight-line or accelerated method with useful lives ranging from 3 to 20 years . Leases ​ Leases are classified as operating or finance leases at the lease commencement date. The Company leases certain locations and equipment. The Company records leases on the consolidated statements of financial condition in the form of a lease liability for the present value of future minimum payments under the lease terms and a right-of-use asset equal to the lease liability adjusted for items such as deferred or prepaid rent, lease incentives, and any impairment of the right-of-use asset. The discount rate used in determining the lease liability is based upon incremental borrowing rates the Company could obtain for similar loans as of the date of commencement or renewal. The Company does not record leases on the consolidated statements of financial condition that are classified as short term (less than one year). ​ At lease inception, the Company determines the lease term by considering the minimum lease term and all optional renewal periods that the Company is reasonably certain to renew. The lease term is also used to calculate straight-line rent expense. The depreciable life of leasehold improvements is limited by the estimated lease term, including renewals if they are reasonably certain to be renewed. The Company’s leases do not contain residual value guarantees or material variable lease payments that will impact the Company's ability to pay dividends or cause the Company to incur additional expenses. ​ Operating lease expense consists of a single lease cost allocated over the remaining lease term on a straight-line basis, variable lease payments not included in the lease liability, and any impairment of the right-of-use asset. Rent expense and variable lease expense are included in occupancy and equipment expense on the Company's consolidated statements of operations. ​ The Company has elected to treat property leases that include both lease and non-lease components as a single component and account for it as a lease. ​ 64 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Mortgage Servicing Rights Mortgage servicing rights are recognized as separate assets when rights are acquired through purchase or through sale of financial assets. Mortgage servicing rights are capitalized and amortized into income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. Mortgage servicing rights are evaluated for impairment based upon the fair value of the rights as compared to amortized cost. Impairment is determined by stratifying rights by predominant characteristics, such as interest rates and terms. Fair value is determined by using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Impairment is recognized through a valuation allowance for an individual stratum, to the extent that fair value is less than the capitalized amount for the stratum. Intangible Assets Intangible assets with a finite life consisted of a core deposit intangible that was carried at cost less accumulated amortization. The Company amortized the cost of the identifiable intangible asset on a straight-line basis over the expected period of benefit, which was seven years . At December 31, 2025, the Company had fully amortized the core deposit intangible. Income Taxes The Company’s income tax expense consists of the following components: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rate and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not some portion or all of a deferred tax asset will not be realized. The Company recognizes interest accrued on and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2025 and 2024, the Company recognized no interest and penalties. Based on management’s analysis, the Company did no t have any uncertain tax positions at December 31, 2025 and 2024. The Company files income tax returns in the U.S. federal jurisdiction and the State of Texas. Treasury Stock ​ Treasury stock is accounted for using the cost method and consists of 479,241 and 282,273 shares at December 31, 2025 and 2024, respectively. ​ 65 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Advertising Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2025 and 2024 amounted to $ 240 and $ 113 , respectively. Operating Segments While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed, and financial performance is evaluated on a Company-wide basis. Discrete operating results are not reviewed by senior management to make resource allocation or performance decisions. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment. ​ Segment Information The Company’s chief operating decision-maker (“CODM”) is the Chief Executive Officer. Operating segments are defined as components of a business about which separate financial information is available and evaluated regularly by the CODM in deciding how to allocate resources and assess performance. While the CODM monitors the revenue streams of the various products and services offered by the Bank, the Company’s operations are managed and financial performance is evaluated on a Company-wide basis as a single reportable operating segment, which is the Bank. ​ Discrete financial information, with a full allocation of revenue, costs, and capital from key corporate functions, is not available at a level other than on a Company-wide basis. Although the CODM has some limited financial information about the Company’s various financial products and services, this information is not complete and is insufficient for making resource allocation decisions or performance assessments at a more granular level. Therefore, management considers all financial service operations to be aggregated within one reportable operating segment, the Bank, and evaluates financial performance on a company-wide basis using net income as reported on the Consolidated Statement of Operations. The measure of segment assets is total assets, as reported on the Consolidated Statements of Financial Condition. The CODM uses net income to monitor budget versus actual results and in the determination of allocating resources across the Company. ​ The Company’s single reportable segment, the Bank, generates revenues primarily from interest income from financial instruments and non-interest income and service charges on deposit accounts. There are no intra-entity sales or transfers within the Company. Management continues to evaluate the Company’s business units for potential separate reporting in the future as facts and circumstances evolve. ​ Revenue Policies FASB ASC Topic 606, Revenue from Contracts with Customers (Topic 606), (i) creates a single framework for recognizing revenue from contracts with customers that fall within its scope and (ii) revises when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets, such as foreclosed assets. The majority of the Company’s revenues come from interest income and other sources, including loans, leases, and securities, that are outside the scope of Topic 606. The Company’s services that fall within the scope of Topic 606 are presented within Non-Interest Income and are recognized as revenue as the Company satisfies its obligation to the customer. Services within the scope of Topic 606 include service charges on deposits, interchange income, and the gain (loss) on the sale of foreclosed assets. 66 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ A description of the Company’s revenue streams accounted for under Topic 606 follows: Service Charges on Deposit Accounts: The Company earns fees from its deposit customers for transaction-based, account-maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance. Interchange Income: The Company earns interchange fees from debit/credit cardholder transactions conducted through the Visa/MasterCard/Other payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. Gains (Losses) on Sales of Other Real Estate Owned: The Company records a gain or loss from the sale of other real estate owned when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of a other real estate owned to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the other real estate owned is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant financing component is present. Deriva tives At the inception of a derivative contract, the Company designates the derivatives as one of the three types based on the Company’s intentions and belief as to likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”). For a fair value hedge, the gain or loss on the derivate, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings as fair values change. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income (loss) and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. Changes in the fair value of derivatives not designated or that do not qualify for hedge accounting are reported currently in earnings, as non-interest income. ​ Accrued settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Accrued settlements on derivatives not designated or that do not qualify for hedge accounting are reported in non-interest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged. ​ The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the statement of financial condition or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting when it determines that the derivative is no longer effective in offsetting changes in the fair value or cash 67 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended. ​ When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as non-interest income. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive income (loss) are amortized into earnings over the same periods which the hedged transactions will affect earnings. ​ The Company would be exposed to losses if a counterparty fails to make its payments under a contract in which the Company is in the net receiving position. The Company anticipates that the counterparties would be able to fully satisfy their obligations under the agreements. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains (losses) on securities available-for-sale. Stock Incentive Plan ​ Compensation cost is recognized for stock options and restricted stock awards issued to directors, executive management, and other officers based on the fair value of these awards at the date of the grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of the grant is used for restricted stock awards. ​ Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. ​ Reclassifications Certain reclassification s of amounts previously reported have been made to the accompanying financial statements to maintain consistency between periods presented. The reclassifications had no impact on net income or shareholders' equity. ​ Revision of Prior-Period Comparative Financial Statements ​ Certain disclosures in the 2024 comparative consolidated financial statements have been revised to correct for misstatements that were not material to the previously issued 2024 financial statements. The revisions relate to the presentation of certain disclosures and do not impact previously reported total assets, total liabilities, total shareholder’s equity, or net income for the year ended December 31, 2024. The specific revisions are as follows: ​ ● Related Party Loans: The balance of loans to related parties as of December 31, 2024, was revised from $2,987 to $3,978 in Note 15 Related Party Transactions. ● Related Party Deposits: The balance of deposits to related parties as of December 31, 2024, was revised from $4,052 to $6,212 in Note 15 Related Party Transactions. ​ 68 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ ​ Note 2 - Earnings Per Share Basic earnings per share is computed by dividing the net income or loss by the weighted-average number of common shares outstanding during the period, including allocated and committed-to-be-released ESOP shares and vested restricted stock awards. Diluted earnings per share is computed using the weighted-average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method. The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Net Income (Loss) ​ $ 2,842 ​ $ ( 1,305 ) ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding for basic earnings per share: ​ ​ ​ ​ Average shares outstanding ​ 2,925,812 ​ 3,132,101 Less: average unearned ESOP shares ​ ( 198,600 ) ​ ( 216,699 ) Weighted average shares outstanding for basic earnings per share ​ 2,727,212 ​ 2,915,402 ​ ​ ​ ​ ​ ​ ​ Additional dilutive shares ​ 128,247 ​ 70,613 ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding for dilutive earnings per share ​ 2,855,459 ​ 2,986,015 ​ ​ ​ ​ ​ ​ ​ Basic earnings (loss) per share ​ $ 1.04 ​ $ ( 0.45 ) ​ ​ ​ ​ ​ ​ ​ Dilutive earnings (loss) per share ​ $ 1.00 ​ $ ( 0.44 ) ​ ​ Nonvested restricted stock awards for 64,886 shares of common stock were not considered in computing diluted earnings per share for 2024, because they were antidilutive. All nonvested restricted stock awards were considered in computing diluted earnings per share for 2025, because they were dilutive. Stock options for 128,269 and 160,596 shares of common stock were not considered in computing diluted earnings per share for 2025 and 2024, because they were nonvested. Stock options for 44,630 shares of common stock have vested, however, were not considered in computing diluted earnings per share for 2024, because they were antidilutive. ​ ​ 69 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Note 3 - Debt Securities The amortized cost and fair value of securities, with gross unrealized gains and losses, follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ Gross ​ Gross ​ Estimated ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair Available for Sale ​ ​ ​ Cost ​ ​ ​ Gains ​ ​ ​ Losses ​ ​ ​ Value Debt Securities: ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed ​ $ 6,475 ​ $ — ​ $ ( 679 ) ​ $ 5,796 Collateralized mortgage obligations ​ 37,023 ​ 12 ​ ( 1,293 ) ​ 35,742 State and municipal ​ 9,753 ​ — ​ ( 1,010 ) ​ 8,743 Corporate bonds ​ 10,519 ​ 49 ​ ( 956 ) ​ 9,612 Total securities available for sale ​ $ 63,770 ​ $ 61 ​ $ ( 3,938 ) ​ $ 59,893 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held to Maturity ​ ​ ​ ​ ​ ​ ​ ​ Debt Securities: ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed ​ $ 16,112 ​ $ — ​ $ ( 1,534 ) ​ $ 14,578 State and municipal ​ ​ 1,200 ​ ​ — ​ ​ ( 6 ) ​ ​ 1,194 U.S. Government and agency ​ 971 ​ 1 ​ — ​ 972 Total securities held to maturity ​ $ 18,283 ​ $ 1 ​ $ ( 1,540 ) ​ $ 16,744 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ ​ Gross ​ Gross ​ Estimated ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair Available for Sale ​ ​ ​ Cost ​ ​ ​ Gains ​ ​ ​ Losses ​ ​ ​ Value Debt Securities: ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed ​ $ 10,356 ​ $ — ​ $ ( 1,205 ) ​ $ 9,151 Collateralized mortgage obligations ​ 48,808 ​ 21 ​ ( 2,261 ) ​ 46,568 State and municipal ​ 15,124 ​ — ​ ( 1,847 ) ​ 13,277 Corporate bonds ​ 7,352 ​ — ​ ( 1,159 ) ​ 6,193 Total securities available for sale ​ $ 81,640 ​ $ 21 ​ $ ( 6,472 ) ​ $ 75,189 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held to Maturity ​ ​ ​ ​ ​ ​ ​ ​ Debt Securities: ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed ​ $ 19,090 ​ $ — ​ $ ( 2,521 ) ​ $ 16,569 State and municipal ​ 1,567 ​ — ​ ( 45 ) ​ 1,522 U.S. Government and agency ​ ​ 1,439 ​ ​ 1 ​ ​ — ​ ​ 1,440 Total securities held to maturity ​ $ 22,096 ​ $ 1 ​ $ ( 2,566 ) ​ $ 19,531 ​ During the years ended December 31, 2025 and 2024, the Company had sales of available for sale securities with an amortized cost basis of $ 23,672 with a gain of $ 117 and $ 19,944 with a gain of $ 190 , respectively. There were no sales of held to maturity securities during the years ended December 31, 2025 and 2024. At December 31, 2025 and 2024, securities with a fair value of $ 14,815 and $ 17,862 , respectively, were pledged to secure public deposits and for other purposes required or permitted by law. 70 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ The amortized cost and fair value of debt securities by contractual maturity at December 31, 2025, follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available for Sale ​ Held to Maturity ​ ​ ​ ​ ​ Estimated ​ ​ ​ ​ Estimated ​ ​ Amortized ​ Fair ​ Amortized ​ Fair ​ ​ ​ ​ Cost ​ ​ ​ Value ​ ​ ​ Cost ​ ​ ​ Value Due in one year ​ $ — ​ $ — ​ $ — ​ $ — Due from one to five years ​ 1,144 ​ 1,054 ​ 135 ​ 128 Due in five to ten years ​ 12,879 ​ 12,074 ​ 971 ​ 972 After ten years ​ 6,249 ​ 5,227 ​ 1,065 ​ 1,066 Residential mortgage-backed ​ 6,475 ​ 5,796 ​ 16,112 ​ 14,578 Collateralized mortgage obligations ​ 37,023 ​ 35,742 ​ — ​ — Total ​ $ 63,770 ​ $ 59,893 ​ $ 18,283 ​ $ 16,744 ​ The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ Less than 12 months ​ 12 months or longer ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ Gross ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized Category (number of securities) ​ ​ ​ Value ​ ​ ​ Losses ​ ​ ​ Value ​ ​ ​ Losses Residential mortgage-backed (0, 77) ​ $ — ​ $ — ​ $ 20,374 ​ $ ( 2,213 ) Collateralized mortgage obligations (2, 15) ​ 2,538 ​ ( 18 ) ​ 24,891 ​ ( 1,275 ) State and municipal (1, 9) ​ 1,065 ​ — ​ 8,872 ​ ( 1,016 ) Corporate bonds (4, 13) ​ 2,871 ​ ( 29 ) ​ 5,572 ​ ( 927 ) Total ​ $ 6,474 ​ $ ( 47 ) ​ $ 59,709 ​ $ ( 5,431 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ Less than 12 months ​ 12 months or longer ​ ​ ​ ​ ​ Gross ​ ​ ​ ​ Gross ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized Category (number of securities) ​ ​ ​ Value ​ ​ ​ Losses ​ ​ ​ Value ​ ​ ​ Losses Residential mortgage-backed (1, 83) ​ $ 434 ​ $ ( 20 ) ​ $ 25,287 ​ $ ( 3,706 ) Collateralized mortgage obligations (8, 15) ​ 15,185 ​ ( 224 ) ​ 22,316 ​ ( 2,037 ) State and municipal (1, 17) ​ 309 ​ ( 1 ) ​ 14,126 ​ ( 1,891 ) Corporate bonds (2, 12) ​ 1,581 ​ ( 20 ) ​ 4,611 ​ ( 1,139 ) Total ​ $ 17,509 ​ $ ( 265 ) ​ $ 66,340 ​ $ ( 8,773 ) ​ At December 31, 2025 and 2024, the Company had investment securities with approximately $ 5,431 and $ 8,773 , respectively, in unrealized losses, which have been in continuous loss positions for more than twelve months. The Company’s assessments indicated that the cause of the market depreciation was primarily the change in market interest rates and not the issuer’s financial condition or downgrades by rating agencies. The Company has the ability and intent to hold such securities until maturity. ​ The Company monitors credit quality of debt securities held to maturity through the use of credit rating. The Company monitors the credit rating on a continual basis. The following table summarizes bond ratings for the Company’s held to maturity portfolio, based upon amortized cost, issued by state and political subdivisions and other securities as of 71 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ ​ Residential mortgage-backed ​ ​ ​ ​ State and municipal ​ ​ ​ ​ U.S Government and agency AAA ​ $ 16,112 ​ $ 1,066 ​ $ 971 Baa1 ​ ​ — ​ ​ 134 ​ ​ — ​ ​ $ 16,112 ​ $ 1,200 ​ $ 971 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ Residential mortgage-backed ​ State and municipal ​ U.S Government and agency AAA ​ $ 19,090 ​ $ 1,433 ​ $ 1,439 Baa1 ​ ​ — ​ ​ 134 ​ ​ — ​ ​ $ 19,090 ​ $ 1,567 ​ $ 1,439 ​ As of December 31, 2025 and 2024, there were no securities held to maturity on nonaccrual or past due status. ​ Mortgage-backed Securities and Collateralized Mortgage Obligations The unrealized losses on the Company’s investments in mortgage-backed securities and collateralized mortgage obligations were caused by market interest rate increases and changes in prepayment speeds and not credit quality. It is expected that the securities would not be settled at a price less than the amortized cost basis of the Company’s investments because the Company does not intend to sell the investments before recovery of their amortized cost basis, which may be maturity. The unrealized losses on the Company’s investment in mortgage-backed securities have not been recognized into income and no allowance for credit losses was established at December 31, 2025 and 2024. ​ U.S. Government and Agency ​ The unrealized losses on the Company’s investments in U.S. government and agency securities have not been recognized into income and no allowance for credit losses was established because the bonds are of high credit quality, management does not intend to sell, and it is likely that management will not be required to sell the securities prior to their anticipated recovery, which may be at maturity. The decline in fair value is largely due to increases in market interest rates and not credit quality deterioration and the fair value is expected to recover as the bonds approach maturity. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost basis of the Company’s investments. Therefore, an allowance for credit losses is deemed unnecessary at December 31, 2025 and 2024. ​ Municipal Securities and Corporate Bonds ​ The unrealized losses on the Company’s investments in state and municipal securities and corporate bonds have not been recognized into income and no allowance for credit losses was established because the bonds are of high credit quality, management does not intend to sell, and it is likely that management will not be required to sell the securities prior to their anticipated recovery, which may be at maturity. The decline in fair value is largely due to increases in market interest rates and not credit quality deterioration and the fair value is expected to recover as the bonds approach maturity. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost basis of the 72 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Company’s investments. Therefore, an allowance for credit losses is deemed unnecessary at December 31, 2025 and 2024. ​ Note 4 - Loans and Leases A summary of the balances of loans and leases follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Real estate ​ ​ ​ ​ ​ ​ Construction and land ​ $ 48,372 ​ $ 54,136 Farmland ​ ​ 17,085 ​ ​ 9,540 1-4 Residential and multi-family ​ ​ 151,326 ​ ​ 156,068 Commercial Real Estate ​ ​ 61,526 ​ ​ 56,068 Total real estate ​ ​ 278,309 ​ ​ 275,812 Agriculture ​ 33 ​ 55 Commercial ​ 8,813 ​ 6,315 Municipalities ​ ​ 14,890 ​ ​ 9,253 Consumer and other ​ 4,600 ​ 5,495 Subtotal ​ 306,645 ​ 296,930 Less: allowance for credit losses ​ ( 3,440 ) ​ ( 3,222 ) Loans and leases, net ​ $ 303,205 ​ $ 293,708 ​ Direct financing leases of $ 1,219 and $ 1,292 are included in consumer and other loans at December 31, 2025 and 2024, respectively. ​ The following table set forth information regarding the activity in the allowance for credit losses for the year ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ Real Estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses: ​ ​ ​ Construction and Land ​ ​ ​ Farmland ​ ​ ​ 1-4 Residential & multi-family ​ ​ ​ Commercial real estate ​ ​ ​ Agriculture ​ ​ ​ Commercial ​ ​ ​ Municipalities ​ ​ ​ Consumer and other ​ ​ ​ Total Balance, January 1, 2025 ​ $ 632 ​ $ 74 ​ $ 1,355 ​ $ 605 ​ $ 1 ​ $ 375 ​ $ 83 ​ $ 97 ​ $ 3,222 Provision (credit) for credit losses ​ 412 ​ 78 ​ 47 ​ 113 ​ — ​ 40 ​ 19 ​ 27 ​ 736 Loans charged-off ​ ( 453 ) ​ — ​ ( 3 ) ​ — ​ — ​ ( 8 ) ​ — ​ ( 60 ) ​ ( 524 ) Recoveries ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ 6 ​ 6 Balance, December 31, 2025 ​ $ 591 ​ $ 152 ​ $ 1,399 ​ $ 718 ​ $ 1 ​ $ 407 ​ $ 102 ​ $ 70 ​ $ 3,440 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Real Estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses: ​ ​ ​ Construction and Land ​ ​ ​ Farmland ​ ​ ​ 1-4 Residential & multi-family ​ ​ ​ Commercial real estate ​ ​ ​ Agriculture ​ ​ ​ Commercial ​ ​ ​ Municipalities ​ ​ ​ Consumer and other ​ ​ ​ Total Balance, January 1, 2024 ​ $ 378 ​ $ 66 ​ $ 1,621 ​ $ 482 ​ $ 2 ​ $ 441 ​ $ 18 ​ $ 88 ​ $ 3,096 Provision for credit losses ​ 254 ​ 8 ​ ( 250 ) ​ 123 ​ ( 1 ) ​ 18 ​ 65 ​ 52 ​ 269 Loans charged-off ​ — ​ — ​ ( 16 ) ​ — ​ — ​ ( 84 ) ​ — ​ ( 86 ) ​ ( 186 ) Recoveries ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ 43 ​ 43 Balance, December 31, 2024 ​ $ 632 ​ $ 74 ​ $ 1,355 ​ $ 605 ​ $ 1 ​ $ 375 ​ $ 83 ​ $ 97 ​ $ 3,222 ​ ​ 73 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days and still accruing interest as of December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ Nonaccrual without Allowance ​ ​ ​ Nonaccrual with Allowance ​ ​ ​ Loans Past Due Over 90 Days Still Accruing Real estate ​ ​ ​ ​ ​ ​ ​ Construction and land ​ $ — ​ $ — ​ $ — Farmland ​ — ​ — ​ — 1‑4 Residential & multi-family ​ 968 ​ — ​ — Commercial real estate ​ 42 ​ — ​ — Agriculture ​ — ​ — ​ — Commercial ​ 67 ​ 933 ​ 1 Municipalities ​ ​ — ​ ​ — ​ ​ — Consumer and other ​ 4 ​ — ​ — Total ​ $ 1,081 ​ $ 933 ​ $ 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Nonaccrual without Allowance ​ ​ ​ Nonaccrual with Allowance ​ ​ ​ Loans Past Due Over 90 Days Still Accruing Real estate ​ ​ ​ ​ ​ ​ ​ Construction and land ​ $ 301 ​ $ — ​ $ — Farmland ​ — ​ — ​ — 1‑4 Residential & multi-family ​ 610 ​ — ​ — Commercial real estate ​ 51 ​ — ​ — Agriculture ​ — ​ — ​ — Commercial ​ 23 ​ 1,140 ​ — Municipalities ​ ​ — ​ ​ — ​ ​ — Consumer and other ​ — ​ — ​ — Total ​ $ 985 ​ $ 1,140 ​ $ — ​ The Company did no t recognize any interest income on nonaccrual loans during the years ended December 31, 2025 or 2024. ​ 74 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ Real Estate ​ ​ ​ Accounts Receivable and Inventory ​ ​ ​ Other Real estate ​ ​ ​ ​ ​ ​ ​ 1-4 Residential & multi-family ​ $ 1,090 ​ $ — ​ $ — Commercial real estate ​ 42 ​ — ​ — Commercial ​ — ​ 247 ​ 753 Consumer and other ​ — ​ — ​ 3 Total ​ $ 1,132 ​ $ 247 ​ $ 756 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Real Estate ​ ​ ​ Accounts Receivable and Inventory ​ ​ ​ Other Real estate ​ ​ ​ ​ ​ ​ ​ Construction and land ​ ​ 301 ​ ​ — ​ ​ — 1-4 Residential & multi-family ​ $ 745 ​ $ — ​ $ — Commercial real estate ​ 51 ​ — ​ — Commercial ​ — ​ 297 ​ 866 Total ​ $ 1,097 ​ $ 297 ​ $ 866 ​ The Company had $ 2,135 and $ 2,260 in collateral-dependent loans as of December 31, 2025 and 2024, respectively. ​ Internal Risk Categories A loan is considered collateral-dependent when based on current information and events; it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming loans (nonaccrual loans), loans performing but with deterioration that leads to doubt regarding collectability. ​ Loans that do not share risk characteristics are evaluated on an individual basis. For collateral-dependent loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the present value of expected cash flows from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the fair value of the underlying collateral less estimated costs to sell. The allowance for credit losses may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan. 75 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ The Company monitors credit quality within its portfolio segments based on primary credit quality indicators. All of the Company’s loans and leases are evaluated using pass rated or reservable criticized as the primary credit quality indicator. The term reservable criticized refers to those loans and leases that are internally classified or listed by the Company as special mention, substandard, doubtful or loss. These assets pose an elevated risk and may have a high probability of default or total loss. The classifications of loans and leases reflect a judgment about the risks of default and loss associated with the loan. The Company reviews the ratings on credits quarterly. Ratings are adjusted to reflect the degree of risk and loss that is felt to be inherent in each credit as of each quarterly reporting period. The methodology is structured so that specific allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk and loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk and loss). Credits rated special mention show clear signs of financial weaknesses or deterioration in credit worthiness; however, such concerns are not so pronounced that the Company generally expects to experience significant loss within the short-term. Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits rated more harshly. Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses exist in collateral. A protracted workout on these credits is a distinct possibility. Prompt corrective action is therefore required to strengthen the Company’s position, and/or to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed. Credits rated doubtful are those in which full collection of principal appears highly questionable, and which some degree of loss is anticipated, even though the ultimate amount of loss may not yet be certain and/or other factors exist which could affect collection of debt. Based upon available information, positive action by the Company is required to avert or minimize loss. Credits with this classification have often become collateral dependent and any shortage in collateral or other likely loss amount is recorded as a specific valuation allowance. Credits rated doubtful are generally also placed on nonaccrual. Credits rated loss are those that are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. Pass rated refers to loans that are not considered criticized. In addition to this primary credit quality indicator, the Company uses other credit quality indicators for certain types of loans. ​ The Company evaluates the loan risk grading system definitions and allowance for credit loss methodology on an ongoing basis. No significant changes were made during the year ended December 31, 2025. ​ Certain loan segments were reclassified during the year ended December 31, 2024. Each loan segment is made up of loan categories with similar risk characteristics. The Company’s realignment of the segments primarily consisted of separately presenting municipality loans from the consumer and other category. Management believes this accurately represents the risk profile of each loan segment. These reclassifications did not have a significant impact on the allowance for credit losses. 76 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Based on the most recent analysis performed, the risk category of loans by class of loans and gross charge-offs as of December 31, 2025 and 2024, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ Term Loans Amortized Cost Basis by Origination Year ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2022 ​ ​ ​ 2021 ​ ​ ​ Prior ​ ​ ​ Total Construction and land ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 17,279 ​ $ 19,483 ​ $ 8,354 ​ $ 1,522 ​ $ 585 ​ $ 1,149 ​ $ 48,372 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 17,279 ​ $ 19,483 ​ $ 8,354 ​ $ 1,522 ​ $ 585 ​ $ 1,149 ​ $ 48,372 Current period gross charge-offs ​ $ — ​ $ — ​ $ 453 ​ $ — ​ $ — ​ $ — ​ $ 453 Farmland ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 9,257 ​ $ 2,893 ​ $ 1,606 ​ $ 1,383 ​ $ 146 ​ $ 1,587 ​ $ 16,872 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ 213 ​ ​ — ​ ​ — ​ ​ 213 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 9,257 ​ $ 2,893 ​ $ 1,606 ​ $ 1,596 ​ $ 146 ​ $ 1,587 ​ $ 17,085 1-4 Residential & multi-family ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 13,244 ​ $ 11,610 ​ $ 28,449 ​ $ 16,657 ​ $ 26,422 ​ $ 52,053 ​ $ 148,435 Special mention ​ ​ — ​ ​ — ​ ​ 275 ​ ​ — ​ ​ 243 ​ ​ 352 ​ ​ 870 Substandard ​ ​ — ​ ​ — ​ ​ 1,332 ​ ​ — ​ ​ — ​ ​ 689 ​ ​ 2,021 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 13,244 ​ $ 11,610 ​ $ 30,056 ​ $ 16,657 ​ $ 26,665 ​ $ 53,094 ​ $ 151,326 Current period gross charge-offs ​ $ — ​ $ — ​ $ 3 ​ $ — ​ $ — ​ $ — ​ $ 3 Commercial real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 13,786 ​ $ 13,486 ​ $ 13,042 ​ $ 4,925 ​ $ 6,605 ​ $ 8,974 ​ $ 60,818 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 666 ​ ​ 666 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 42 ​ ​ 42 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 13,786 ​ $ 13,486 ​ $ 13,042 ​ $ 4,925 ​ $ 6,605 ​ $ 9,682 ​ $ 61,526 Agriculture ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ — ​ $ — ​ $ 26 ​ $ — ​ $ 7 ​ $ — ​ $ 33 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ — ​ $ — ​ $ 26 ​ $ — ​ $ 7 ​ $ — ​ $ 33 Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 1,722 ​ $ 1,671 ​ $ 444 ​ $ 207 ​ $ 12 ​ $ 3,757 ​ $ 7,813 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ 67 ​ ​ — ​ ​ — ​ ​ 686 ​ ​ 247 ​ ​ 1,000 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 1,722 ​ $ 1,738 ​ $ 444 ​ $ 207 ​ $ 698 ​ $ 4,004 ​ $ 8,813 Current period gross charge-offs ​ $ — ​ $ 8 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Municipalities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 5,964 ​ $ 8,131 ​ $ 795 ​ $ — ​ $ — ​ $ — ​ $ 14,890 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 5,964 ​ $ 8,131 ​ $ 795 ​ $ — ​ $ — ​ $ — ​ $ 14,890 Consumer and other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 1,930 ​ $ 1,713 ​ $ 314 ​ $ 143 ​ $ 469 ​ $ — ​ $ 4,569 Special mention ​ ​ 21 ​ ​ 3 ​ ​ 3 ​ ​ — ​ ​ — ​ ​ — ​ ​ 27 Substandard ​ ​ 4 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 4 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 1,955 ​ $ 1,716 ​ $ 317 ​ $ 143 ​ $ 469 ​ $ — ​ $ 4,600 Current period gross charge-offs ​ $ 45 ​ $ 7 ​ $ 8 ​ $ — ​ $ — ​ $ — ​ $ 60 ​ 77 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ Term Loans Amortized Cost Basis by Origination Year ​ ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2022 ​ ​ ​ 2021 ​ ​ ​ 2020 ​ ​ ​ Prior ​ ​ ​ Total Construction and land ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 26,157 ​ $ 14,188 ​ $ 4,197 ​ $ 619 ​ $ 550 ​ $ 1,140 ​ $ 46,851 Special mention ​ ​ — ​ ​ 6,200 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 6,200 Substandard ​ ​ 30 ​ ​ 754 ​ ​ — ​ ​ 301 ​ ​ — ​ ​ — ​ ​ 1,085 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 26,187 ​ $ 21,142 ​ $ 4,197 ​ $ 920 ​ $ 550 ​ $ 1,140 ​ $ 54,136 Farmland ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 3,141 ​ $ 1,708 ​ $ 1,804 ​ $ 284 ​ $ 486 ​ $ 2,117 ​ $ 9,540 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 3,141 ​ $ 1,708 ​ $ 1,804 ​ $ 284 ​ $ 486 ​ $ 2,117 ​ $ 9,540 1-4 Residential & multi-family ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 16,084 ​ $ 30,595 ​ $ 19,099 ​ $ 28,452 ​ $ 37,925 ​ $ 22,283 ​ $ 154,438 Special mention ​ ​ — ​ ​ 219 ​ ​ — ​ ​ — ​ ​ — ​ ​ 198 ​ ​ 417 Substandard ​ ​ — ​ ​ 25 ​ ​ — ​ ​ — ​ ​ 92 ​ ​ 1,096 ​ ​ 1,213 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 16,084 ​ $ 30,839 ​ $ 19,099 ​ $ 28,452 ​ $ 38,017 ​ $ 23,577 ​ $ 156,068 Current period gross charge-offs ​ $ — ​ $ 16 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 16 Commercial real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 15,600 ​ $ 13,526 ​ $ 5,160 ​ $ 7,079 ​ $ 2,953 ​ $ 11,007 ​ $ 55,325 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 301 ​ ​ 301 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 442 ​ ​ 442 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 15,600 ​ $ 13,526 ​ $ 5,160 ​ $ 7,079 ​ $ 2,953 ​ $ 11,750 ​ $ 56,068 Agriculture ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ — ​ $ 40 ​ $ 1 ​ $ 14 ​ $ — ​ $ — ​ $ 55 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ — ​ $ 40 ​ $ 1 ​ $ 14 ​ $ — ​ $ — ​ $ 55 Commercial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 3,443 ​ $ 910 ​ $ 345 ​ $ 86 ​ $ 94 ​ $ 265 ​ $ 5,143 Special mention ​ ​ 8 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 8 Substandard ​ ​ 23 ​ ​ — ​ ​ — ​ ​ 844 ​ ​ 57 ​ ​ 240 ​ ​ 1,164 Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 3,474 ​ $ 910 ​ $ 345 ​ $ 930 ​ $ 151 ​ $ 505 ​ $ 6,315 Current period gross charge-offs ​ $ 84 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 84 Municipalities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 8,408 ​ $ 845 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 9,253 Special mention ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 8,408 ​ $ 845 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 9,253 Consumer and other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Risk rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pass ​ $ 3,373 ​ $ 906 ​ $ 374 ​ $ 823 ​ $ 13 ​ $ — ​ $ 5,489 Special mention ​ ​ 2 ​ ​ 3 ​ ​ 1 ​ ​ — ​ ​ — ​ ​ — ​ ​ 6 Substandard ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Doubtful ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Loss ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ $ 3,375 ​ $ 909 ​ $ 375 ​ $ 823 ​ $ 13 ​ $ — ​ $ 5,495 Current period gross charge-offs ​ $ 66 ​ $ 14 ​ $ 6 ​ $ — ​ $ — ​ $ — ​ $ 86 ​ ​ 78 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. The Company also evaluates credit quality based on the aging status of the loan, which is subsequently presented. ​ The following is an aging analysis for loans as of December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ 30-59 Days Past Due ​ ​ ​ 60-89 Days Past Due ​ ​ ​ 90 Days and Greater ​ ​ ​ Total Past Due ​ ​ ​ Current ​ ​ ​ Total Loans Real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction and land ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 48,372 ​ $ 48,372 Farmland ​ — ​ — ​ — ​ — ​ 17,085 ​ 17,085 1‑4 Residential & multi-family ​ 113 ​ 49 ​ — ​ 162 ​ 151,164 ​ 151,326 Commercial real estate ​ — ​ — ​ — ​ — ​ 61,526 ​ 61,526 Agriculture ​ — ​ — ​ — ​ — ​ 33 ​ 33 Commercial ​ 181 ​ — ​ 1 ​ 182 ​ 8,631 ​ 8,813 Municipalities ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 14,890 ​ ​ 14,890 Consumer and other ​ 22 ​ 3 ​ — ​ 25 ​ 4,575 ​ 4,600 Total ​ $ 316 ​ $ 52 ​ $ 1 ​ $ 369 ​ $ 306,276 ​ $ 306,645 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ 30-59 Days Past Due ​ ​ ​ 60-89 Days Past Due ​ ​ ​ 90 Days and Greater ​ ​ ​ Total Past Due ​ ​ ​ Current ​ ​ ​ Total Loans Real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction and land ​ $ — ​ $ — ​ $ 301 ​ $ 301 ​ $ 53,835 ​ $ 54,136 Farmland ​ — ​ — ​ — ​ — ​ 9,540 ​ 9,540 1‑4 Residential & multi-family ​ 260 ​ 8 ​ 25 ​ 293 ​ 155,775 ​ 156,068 Commercial real estate ​ 301 ​ — ​ — ​ 301 ​ 55,767 ​ 56,068 Agriculture ​ — ​ — ​ — ​ — ​ 55 ​ 55 Commercial ​ 2 ​ — ​ — ​ 2 ​ 6,313 ​ 6,315 Municipalities ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 9,253 ​ ​ 9,253 Consumer and other ​ 2 ​ — ​ — ​ 2 ​ 5,493 ​ 5,495 Total ​ $ 565 ​ $ 8 ​ $ 326 ​ $ 899 ​ $ 296,031 ​ $ 296,930 ​ All interest accrued but not collected for loans that are placed on nonaccrual or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. No interest income was recognized for loans on nonaccrual status for the years ended December 31, 2025 and 2024. The following table presents interest income recognized on loans that are collateral-dependent and individually reviewed for the years ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2025 ​ ​ ​ 2024 Real estate ​ ​ ​ ​ ​ 1-4 Residential & multi-family ​ $ — ​ $ 6 Commercial ​ — ​ 10 ​ ​ $ — ​ $ 16 ​ ​ During the year ended December 31, 2025 and 2024, there were no modifications of loans to borrowers in financial difficulty. 79 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ There have been no modification to borrowers with financial difficulty in the past 12 months that subsequently defaulted. The Company has no commitments to loan additional funds to borrowers whose loans have been modified but may on occasion extend financing to these borrowers. ​ Note 5 - Net Investment in Direct Financing Leases The Company has entered into equipment and vehicle leases with various municipalities. These leases are classified as direct financing leases. The terms of the lease provide for automatic annual renewal periods unless the lessee gives written notice, not less than ninety days prior to the end of the original term or any renewal term, of their intention to terminate. The components of the net investment in direct financing leases are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Total minimum lease payments to be received ​ $ 1,447 ​ $ 1,539 Less interest income ​ ( 228 ) ​ ( 247 ) Net investment in direct financing lease ​ $ 1,219 ​ $ 1,292 ​ At December 31, 2025, the scheduled financing lease payments are as follows: ​ ​ ​ ​ ​ 2026 ​ $ 281 2027 ​ 194 2028 ​ ​ 194 2029 ​ ​ 194 2030 ​ ​ 164 Thereafter ​ ​ 420 Total lease payments ​ ​ 1,447 Less: unearned interest income ​ ​ ( 228 ) Net lease receivables ​ $ 1,219 ​ ​ ​ ​ Note 6 - Premises and Equipment A summary of the cost and accumulated depreciation of premises and equipment follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Land ​ $ 2,023 ​ $ 2,054 Buildings and improvements ​ 12,694 ​ 12,535 Furniture, fixtures and equipment ​ 3,399 ​ 3,149 ​ ​ 18,116 ​ 17,738 Accumulated depreciation ​ ( 6,657 ) ​ ( 6,212 ) Total ​ $ 11,459 ​ $ 11,526 ​ Depreciation expense for the years ended December 31, 2025 and 2024, amounted to $ 461 and $ 439 , respectively. ​ 80 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Note 7 – Leases ​ The Company leases certain office facilities and equipment for various terms under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2030 and provide for renewal options ranging from 1 year to 5 years . The Company included in the determination of the right-of-use assets and lease liabilities any renewal options when the options are reasonably certain to be exercised. The leases provide for increases in future minimum annual rental payments based on defined increases in the Consumer Price Index, subject to certain minimum increases. Also, the agreements generally require the Company to pay real estate taxes, insurance, and repairs. ​ The weighted-average discount rate is based on the discount rate implicit in the lease, or if the implicit rate is not readily determinable from the lease, then the Company estimates an applicable incremental borrowing rate. The incremental borrowing rate is estimated using the Company’s applicable borrowing rates and the contractual lease term. ​ Total right-of-use assets and lease liabilities at December 31, 2025 and 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ Statement of Financial Condition Classification ​ ​ ​ 2025 ​ ​ ​ 2024 Right-of-use assets: ​ ​ ​ ​ ​ Operating leases Other assets ​ $ 578 ​ $ 292 ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease Liabilities: ​ ​ ​ ​ ​ Operating lease liabilities Accrued expenses and other liabilities ​ $ 577 ​ $ 292 ​ Total lease costs for the years ended December 31, 2025 and 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Operating lease cost ​ $ 121 ​ $ 72 ​ The future minimum lease payments under noncancelable operating leases with terms greater than one year at December 31, 2025, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Leases 2026 ​ $ 146 2027 ​ 149 2028 ​ 150 2029 ​ 137 2030 ​ 42 Total undiscounted lease payments ​ 624 Less: imputed interest ​ ( 47 ) Net lease liabilities ​ $ 577 ​ 81 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Supplemental Lease Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Weighted-average remaining lease term ​ ​ ​ ​ ​ Operating leases ​ 4.21 Years ​ 4.48 Years ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average discount rate ​ ​ ​ ​ ​ Operating leases ​ 3.63 % ​ 2.79 % ​ ​ ​ ​ ​ ​ ​ ​ Cash paid for amounts included in the measurement of lease liabilities ​ ​ ​ ​ ​ ​ ​ Operating cash flows from operating leases ​ $ 124 ​ $ 71 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Note 8 - Deposits The aggregate amount of time deposits meeting or exceeding FDIC limits of $250 or more at December 31, 2025 and 2024, was $ 35,824 and $ 29,697 , respectively. At December 31, 2025 and 2024, deposits include $ 18,000 and $ 22,000 , respectively, of callable brokered deposits issued as part of an investment strategy that are fully insured with $ 18,000 maturing in 2029. At December 31, 2025, the scheduled maturities of time deposits are as follows: ​ ​ ​ ​ ​ 2026 ​ $ 102,584 2027 ​ 8,600 2028 ​ 4,073 2029 ​ 18,463 2030 ​ 65 Total ​ $ 133,785 ​ ​ Note 9 - Advances from Federal Home Loan Bank The Company had outstanding advances from Federal Home Loan Bank totaling $ 45,669 and $ 49,878 at December 31, 2025 and 2024, respectively. Such advances had a weighted average interest rate of 4.20 % and 4.04 % at December 31, 2025 and 2024, respectively. Scheduled maturities of the advances, which are subject to restrictions or penalties in the event of prepayment at December 31, 2025 are as follows: ​ ​ ​ ​ ​ 2026 ​ ​ ​ $ 13,000 2027 ​ 3,352 2028 ​ 29,317 Total ​ $ 45,669 ​ Under these agreements, the Company had unused lines of credit amounting to $ 100,253 at December 31, 2025. Pursuant to a blanket collateral agreement with the FHLB, advances were secured by all stock and deposit accounts with the FHLB, mortgage collateral, securities collateral, and other collateral. $ 2,802 of securities were specifically pledged as of December 31, 2024. There were no securities specifically pledged as of December 31, 2025. ​ 82 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Note 10 - Income Taxes Allocation of income taxes between current and deferred portions is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ ​ Current federal income tax expense ​ $ 114 ​ $ — Current state income tax expense ​ ​ 3 ​ ​ — Deferred federal income tax expense (benefit) ​ 394 ​ ( 484 ) Deferred state income tax expense ​ 11 ​ 8 ​ ​ ​ ​ ​ ​ ​ Total provision (benefit) ​ $ 522 ​ $ ( 476 ) ​ The differences in amounts and percentages between the statutory federal tax rate of 21 % and the Company’s effective tax rate on net income before income taxes as reflected in the consolidated statements of operations during the year ended December 31, 2025, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2025 ​ ​ Amount ​ Percentage U.S. federal statutory tax rate $ 707 ​ 21.00 % State and local income taxes, net of federal income tax effect ​ 11 ​ 0.33 ​ Nontaxable or nondeductible items ​ ​ ​ ​ ​ Nontaxable items - tax-exempt loan interest ​ ( 164 ) ​ ( 4.87 ) ​ Nontaxable items - tax-exempt interest ​ ( 37 ) ​ ( 1.10 ) ​ Nontaxable items - insurance officer life CSV (tax exempt build up) ​ ( 37 ) ​ ( 1.10 ) ​ Nontaxable items - other nontaxable items ​ ( 2 ) ​ ( 0.06 ) ​ Nondeductible items - disallowed interest expense ​ 38 ​ 1.13 ​ Nondeductible items - other nondeductible items ​ ( 8 ) ​ ( 0.24 ) ​ Other adjustments ​ 14 ​ 0.43 ​ ​ ​ 522 ​ 15.52 % ​ Texas is the only state included in the state and local income taxes, net of federal income tax effect, category. ​ Income tax expense, as a percentage of pretax earnings, differs from the statutory federal income tax rate during the year ended December 31, 2024, is as follows: ​ ​ ​ ​ ​ ​ ​ Year ended December 31, 2024 ​ ​ ​ ​ Income tax expense at the statutory rate ​ 21.00 % State income taxes ​ ( 0.36 ) ​ Nontaxable earnings ​ 8.47 ​ Nondeductible expenses ​ ( 2.62 ) ​ Other ​ 0.20 ​ ​ ​ ​ ​ Total provision ​ 26.69 % ​ 83 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Income taxes paid were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Jurisdiction ​ ​ ​ ​ ​ ​ Federal ​ $ 175 ​ $ — State/local (Texas) ​ ​ 3 ​ ​ — Total ​ 178 ​ — ​ The components of the net deferred tax asset are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Deferred tax assets ​ ​ ​ ​ Allowance for credit losses ​ $ 767 ​ $ 701 Intangible assets ​ 104 ​ 89 Deferred compensation ​ 54 ​ 288 State income tax credit ​ 15 ​ 24 Stock options and restricted stock awards ​ 252 ​ 201 Charitable contribution credit ​ 31 ​ 77 Unrealized loss on securities available for sale ​ 814 ​ 1,267 Net operating losses ​ ​ 257 ​ ​ 574 Other ​ ​ 95 ​ ​ 16 ​ ​ 2,389 ​ 3,237 Deferred tax liabilities ​ ​ ​ ​ Depreciable assets ​ ( 145 ) ​ ( 120 ) Accrual to cash ​ ( 278 ) ​ ( 261 ) Mortgage servicing rights ​ ( 44 ) ​ ( 48 ) Restricted stock dividends ​ ( 108 ) ​ ( 120 ) ​ ​ ( 575 ) ​ ( 549 ) ​ ​ ​ ​ ​ ​ ​ Net deferred tax asset ​ $ 1,814 ​ $ 2,688 ​ No valuation allowance for deferred tax assets was recorded as of December 31, 2025 and 2024, as management believes the amounts representing future deferred tax benefits will more likely than not be recognized since the Company is expected to have sufficient taxable income of an appropriate character within the carryback and carryforward periods as permitted by the tax law to allow for utilization of the future deductible amounts. Retained earnings at December 31, 2025 and 2024, includes $ 2,663 for which no deferred federal income tax liability has been recognized. This amount represents an allocation of income to bad debt deductions for tax purposes only. Reduction of amounts so allocated for purposes other than tax bad debt losses or adjustments arising from carryback of net operating losses would create income for tax purposes only, which would be subject to the current corporate income tax rate. The unrecorded deferred income tax liability on the above amount was $ 559 at December 31, 2025 and 2024. ​ 84 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Note 11 - Off-Balance-Sheet Activities The Company is a party to credit related financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of financial condition. The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company follows the same credit policies in making commitments as it does for on-balance-sheet instruments. At December 31, 2025 and 2024, the following financial instruments were outstanding whose contract amounts represent credit risk: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contract Amount ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 Commitments to extend credit ​ $ 35,666 ​ $ 17,954 ​ Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for equity lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Company, is based on management’s credit evaluation of the customer. The Company is party to an agreement with the Federal Reserve Bank of Boston that provides the Company with a federal funds line of credit in an amount tied to securities on deposit with that bank. The Company pays no fees for this line of credit and has not drawn upon it. The Company is party to agreements with its correspondent banks that provide the Company with unsecured lines for up to $ 8,000 federal funds lines of credit to support overnight funding needs. The Company pays no fees for the lines of credit and has not drawn upon them. One line renews annually and the other line is in effect until either party changes the terms of the agreement. At December 31, 2025, the Company had no commitments to purchase securities. The Company has no other off-balance-sheet arrangements or transactions with unconsolidated, special purpose entities that would expose the Company to liability that is not reflected on the face of the consolidated statements of financial condition. ​ Note 12 - Legal Contingencies Various legal claims also arise from time to time in the normal course of business which, in the opinion of management, will have no material effect on the Company’s consolidated financial statements. ​ 85 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Note 13 - Employee Benefit Plan The Company sponsors a defined contribution 401(k) retirement plan covering substantially all of its employees. The plan provides for the Company to match employees’ contributions up to five percent of an employee’s annual salary. In addition, the Company offers a profit-sharing component to the 401(k) plan under which the Company may contribute an equal amount to the account of each employee. The amount of the profit-sharing contribution is discretionary and determined annually by the board of directors. The employees are 100 % vested after six years of service. Prior to full vesting, the employees are vested from 20 % to 80 % depending on the length of service. The Company’s contributions for the years ended December 31, 2025 and 2024 were $ 192 and $ 181 , respectively. The Company has a deferred compensation plan with a former member of its board of directors that permits that director to defer a portion of his compensation and earn a guaranteed interest rate on the deferred amounts. The portion of the former director’s compensation that is deferred has been accrued and the only other expense related to this plan is the interest on the deferred amounts. Interest expense during the years ended December 31, 2025 and 2024, included $ 8 and $ 9 , respectively, related to this plan. The Company has included $ 156 and $ 166 of deferred compensation payable at December 31, 2025 and 2024, respectively, which is included in accrued expenses and other liabilities. To fund this plan, the Company has purchased a corporate-owned whole-life insurance contract on the former director. The Company has included $ 135 and $ 130 in bank-owned life insurance at December 31, 2025 and 2024, respectively, which represents the cash surrender value of this policy. The Company adopted a deferred compensation incentive plan in January 2013. The plan provided for an individually agreed upon percentage of net income for the plan year to be deferred and vested over five years . The deferred compensation earned interest over the vesting period. The vested benefit was to be paid within 90 days of the end of each plan year. The plan was terminated on December 31, 2023, and was accelerated to fully vest all participants on December 31, 2023. The benefits totaling $ 435 that had not been previously deferred and deferrals from prior years totaling $ 561 were paid out on February 10, 2025. The only expense related to the plan after termination was interest expense on the balance being held in the plan until the designated pay date. The Company recorded compensation expense related to this program in the amount of $ 5 and $ 46 for the years ended December 31, 2025 and 2024, respectively. An accrual of $ 0 and $ 1,042 for December 31, 2025 and 2024, respectively, is included in accrued expenses and other liabilities. ​ To partially fund benefit plans, Broadstreet Bank maintains the Broadstreet Bank Split Dollar Life Insurance Plan, which consists of thirteen life insurance policies on six current, three retired officers and four former officers. The executive has the right to designate a beneficiary who will receive his or her share of the net death benefit payable upon his or her death if the employment conditions of the plan have been met. The policies are owned by Broadstreet Bank, which paid the premium due on the policies. Under the plan, the insured beneficiary will receive an agreed upon amount and Broadstreet Bank is entitled to the remaining death benefit or the entire death benefit in cases where plan employment conditions were not met. The Company has included $ 6,409 and $ 6,240 in bank-owned life insurance on bank officers at December 31, 2025 and 2024, which represents the cash surrender value of the policies. ​ 86 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Note 14 - Employee Stock Ownership Plan In connection with the Conversion, the Company established an ESOP for the exclusive benefit of eligible employees. The ESOP borrowed funds from the Company in an amount sufficient to purchase 260,621 shares (approximately 8.0 % of the common stock issued in connection with the Conversion). The loan is secured by unallocated shares and will be repaid by the ESOP with funds from contributions made by the Company and dividends received by the ESOP. Contributions will be applied to repay interest on the loan first, and then the remainder will be applied to principal. The loan is expected to be repaid over a period of up to 20 years . Shares purchased with the loan proceeds are held in a suspense account for allocation among participants as the loan is repaid. Contributions to the ESOP and shares released from the suspense account are allocated among participants in proportion to their compensation. Participants will vest in their accrued benefits determined by the years of service for vesting purposes. Vesting is accelerated upon retirement, death or disability of the participant, or a change in control of the Company or the Bank. Forfeitures will be reallocated to remaining participants. Benefits may be payable upon retirement, death, disability, separation of service, or termination of the ESOP. The debt of the ESOP is eliminated in consolidation. Contributions to the ESOP will be sufficient to pay principal and interest currently due under the loan agreement. As shares are committed to be released from collateral, the Company reports the compensation expense equal to the average market price of the shares for the respective period, and the shares become outstanding for earnings per share computations. Dividends on unallocated ESOP shares, if any, are recorded as a reduction of debt and accrued interest. ESOP compensation expense was $ 253 and $ 223 for the years ended December 31, 2025 and 2024, respectively. A summary of the ESOP shares as of December 31, 2025 and 2024 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ December 31, 2024 Shares allocated to participants ​ 72,240 ​ ​ 56,768 Shares distributed to terminated participants ​ ( 12,475 ) ​ ​ ( 5,151 ) Unreleased shares ​ 188,381 ​ ​ 203,853 Total ​ 248,146 ​ ​ 255,470 Fair value of unreleased shares ​ $ 3,385 ​ ​ $ 3,109 ​ ​ Note 15 - Stock-Based Compensation ​ The Company has one equity incentive plan with two share-based compensation awards as described below. Total compensation cost that has been charged against income for those plans was $ 607 and $ 757 for the years ended December 31, 2025 and 2024, respectively. ​ Stock Option Awards ​ The Company’s 2022 Equity Incentive Plan (the Equity Plan), which was approved by shareholders, permits the grant of stock options to its directors, executive officers and other officers for up to 325,775 shares of common stock. Stock option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant; those option awards have vesting periods of five years and have 10-year contractual terms. The Company has a policy of using shares held as treasury stock to satisfy share option exercises. ​ The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions determined by management. Expected volatility is based on historical volatility of the Company’s common stock. The Company uses historical data when available to estimate option exercise 87 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ and post-vesting termination behavior. Due to lack of historical data, the Company estimated the expected term of options granted is 7.5 years. This represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The Company’s accounting policy is to recognize forfeitures as they occur. The risk-free interest rate for the expected term of the options is based on the 7-year U.S. Treasury yield curve in effect at the time of the grants. ​ On August 31, 2022, the non-employee directors of the Company were granted 97,728 stock options with a cost of $ 6.50 per option and an exercise price of $ 16.00 . These options will vest annually over a five year period ending August 31, 2027 and will expire on August 31, 2032. During the year ended December 31, 2025 and 2024, 14,661 and 8,144 of these options were forfeited or expired, respectively. ​ On February 28, 2023, the executive officers of the Company were granted 192,204 stock options with a cost of $ 6.14 per option and an exercise price of $ 15.67 . These options will vest annually over a five year period ending February 28, 2028 and will expire on February 28, 2033. During the years ended December 31, 2025 and 2024, 22,477 and 24,758 , of these options were forfeited or expired, respectively. ​ On February 28, 2024, an executive officer of the Company was granted 58,639 stock options with a cost of $ 6.41 per option and an exercise price of $ 13.75 . The Company accelerated the first vesting period to vest 20 % of the awards at grant date and the remaining awards will vest in four equal annual installments through February 28, 2028, and will expire on February 28, 2033. ​ On August 30, 2024, certain officers of the Company were granted 19,030 stock options with a cost of $ 6.27 per option and an exercise price of $ 14.31 . These options will vest annually over a five year period ending August 31, 2029, and will expire on August 31, 2034. ​ Compensation expense for the stock options for the years ended December 31, 2025 and 2024, was $ 296 and $ 377 , respectively. ​ There were no additional grants during the year ended December 31, 2025. ​ The fair value of options granted during the year ended December 31, 2024, was determined using the following weighted-average assumptions as of grant date. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ Expected volatility ​ ​ ​ ​ 33.90 % ​ Expected dividends ​ ​ ​ ​ - % ​ Expected term (in years) ​ ​ ​ ​ 7.50 ​ ​ Risk-free rate ​ ​ ​ ​ 4.16 % ​ ​ 88 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ A summary of the activity in the stock option awards for 2025 and 2024 follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average ​ ​ Remaining ​ Options ​ ​ ​ Options ​ ​ Exercise Price ​ ​ ​ ​ Contractual Term ​ Outstanding at December 31, 2023 ​ ​ ​ 231,293 ​ ​ $ 15.81 ​ 3.9 ​ Granted ​ ​ ​ 77,669 ​ ​ ​ 13.89 ​ 4.3 ​ Exercised ​ ​ ​ ​ - ​ ​ ​ - ​ ​ - ​ Forfeited or expired ​ ​ ​ ​ ( 32,902 ) ​ ​ ​ 15.75 ​ ​ 3.3 ​ Outstanding at December 31, 2024 ​ ​ ​ ​ 276,060 ​ ​ $ 15.28 ​ ​ 3.6 ​ Granted ​ ​ ​ - ​ ​ ​ - ​ - ​ Exercised ​ ​ ​ ​ - ​ ​ ​ - ​ ​ - ​ Forfeited or expired ​ ​ ​ ​ ( 37,138 ) ​ ​ ​ 15.80 ​ ​ 2.7 ​ Outstanding at December 31, 2025 ​ ​ ​ 238,922 ​ ​ $ 15.20 ​ 2.9 ​ ​ ​ ​ ​ ​ . ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at December 31, 2025 ​ ​ ​ ​ 110,652 ​ ​ $ 15.36 ​ ​ 2.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average ​ ​ ​ ​ ​ ​ ​ ​ Grant Date Non-Vested Options ​ Options ​ ​ ​ ​ Fair Value Non-vested at December 31, 2023 ​ ​ ​ 211,747 ​ $ 6.24 Granted ​ ​ ​ 77,669 ​ ​ 6.38 Vested ​ ​ ​ ​ ( 56,358 ) ​ ​ ​ 6.36 Forfeited ​ ​ ​ ​ ( 31,273 ) ​ ​ ​ 6.23 Non-vested at December 31, 2024 ​ ​ ​ ​ 201,785 ​ ​ $ 6.26 Granted ​ ​ ​ - ​ ​ - Vested ​ ​ ​ ​ ( 49,088 ) ​ ​ ​ 6.36 Forfeited ​ ​ ​ ​ ( 24,428 ) ​ ​ ​ 4.18 Non-vested at December 31, 2025 ​ ​ ​ ​ 128,269 ​ ​ $ 6.62 ​ As of December 31, 2025 and 2024, there was $ 621 and $ 1,079 , respectively, of total unrecognized compensation cost related to nonvested stock options granted under the plan. The cost is expected to be recognized over a weighted-average period of five years . ​ Restricted Stock Awards ​ The Equity Plan also permits the grant of restricted stock to its directors, executive officers, and other officers. Compensation expense for restricted stock awards is recognized over the vesting period of the awards based on the fair value of the stock at issue date. The fair value of the stock was determined using the closing stock price of the Company on grant date. Restricted shares fully vest on the fifth anniversary of the grant date. ​ On August 31, 2022, the non-employee directors of the Company were granted 39,084 shares of Company stock at a fair market value of $ 16.00 per share. These stock awards will vest in five equal annual installments through August 31, 2027. During the year ended December 31, 2024, 2,606 of these awards were forfeited. ​ On February 28, 2023, executive officers of the Company were granted 76,880 shares of Company stock at a fair market value of $ 15.67 per share. These stock awards will vest in five equal annual installments through February 28, 2028. During the years ended December 31, 2025 and 2024, 3,909 and 9,903 , respectively, of these awards were forfeited. 89 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ On February 28, 2024, an executive officer of the Company was granted 23,455 shares of Company stock when the stock price was $ 13.75 per share. The Company accelerated the first vesting period to vest 20 % of the awards at grant date and the remaining awards will vest in four equal annual installments through February 28, 2028. ​ On August 30, 2024 certain officers of the Company were granted 9,212 shares of Company stock when the stock price was $ 14.31 per share. These stock awards will vest in five equal annual installments through August 31, 2029. ​ Compensation expense for the restricted stock awards for the years ended December 31, 2025 and 2024 was $ 311 and $ 380 , respectively. ​ A summary of changes in the Company’s nonvested shares for the years ended December 31, 2025 and 2024 follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-Average ​ ​ ​ ​ ​ ​ ​ Grant Date Non-Vested Shares ​ Shares ​ ​ ​ Fair Value Non-vested at December 31, 2023 ​ ​ ​ 84,697 $ 15.79 Granted ​ ​ ​ 32,667 ​ 13.91 Vested ​ ​ ​ ​ ( 22,535 ) ​ ​ 15.38 Forfeited ​ ​ ​ ​ ( 12,510 ) ​ ​ 15.74 Non-vested at December 31, 2024 ​ ​ ​ ​ 82,319 ​ $ 15.16 Granted ​ ​ ​ - ​ - Vested ​ ​ ​ ​ ( 21,902 ) ​ ​ 15.25 Forfeited ​ ​ ​ ​ ( 3,909 ) ​ ​ 15.67 Non-vested at December 31, 2025 ​ ​ ​ ​ 56,508 ​ $ 15.09 ​ As of December 31, 2025 and 2024, there was $ 662 and $ 1,040 of total unrecognized compensation cost related to nonvested restricted stock granted under the plan. The cost is expected to be recognized over a weighted-average period of five years . ​ Note 16 - Related Party Transactions In the ordinary course of business, the Company has granted loans to principal officers and directors and their affiliates. Annual activity consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ ​ Beginning balance ​ $ 3,978 ​ $ 5,717 Additions ​ 18 ​ 75 Repayments ​ ( 1,308 ) ​ ( 1,814 ) Ending balance ​ $ 2,688 ​ $ 3,978 ​ Deposits from related parties held by the Company at December 31, 2025 and 2024, amounted to $ 5,887 and $ 6,212 , respectively. ​ 90 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Note 17 - Supplemental Cash Flow Information Supplemental disclosure of cash flow information is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Supplemental cash flow information: ​ ​ ​ ​ Cash paid for ​ ​ ​ ​ Interest on deposits ​ $ 7,173 ​ $ 7,252 Interest on FHLB advances ​ 2,071 ​ 2,663 Other interest ​ 10 ​ 9 Non-cash activities ​ ​ ​ ​ ​ ​ Transfer on loans receivable to loans held for sale ​ $ — ​ ​ 26,821 Loan originations to facilitate the sale of other real estate owned ​ ​ — ​ ​ 150 Loans transferred to other real estate owned ​ ​ 8,883 ​ ​ — Premises and equipment transferred to other real estate owned ​ — ​ 558 Lease liabilities arising from obtaining right-of-use assets ​ 290 ​ ​ — ​ ​ Note 18 - Minimum Regulatory Capital Requirements The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgements by the regulators about components, risk weightings, and other factors. The Bank has opted into the Community Bank Leverage Ratio (CBLR) framework, beginning with the Call Report filed for the first quarter of 2020. At December 31, 2025 and 2024, the Bank’s CBLR ratio was 11.74 % and 10.84 %, respectively, which exceeded all regulatory capital requirements under the CBLR framework and the Bank was considered to be “well-capitalized.” Under the CBLR framework, banks and their bank holding companies that have less than $10 billion in total consolidated assets and meet other qualifying criteria, including a leverage ratio (equal to tier 1 capital divided by average total consolidated assets) of greater than 9%, are eligible to opt into the CBLR framework. Qualifying community banking organizations that elect to use the CBLR framework and that maintain a leverage ratio of greater than 9% are considered to have satisfied the generally applicable risk-based and leverage capital requirements in the agencies’ capital rules (generally applicable capital rules) and, if applicable, are considered to have met the well-capitalized ratio requirements for purposes of section 38 of the Federal Deposit Insurance Act. Accordingly, a qualifying community banking organization that exceeds the 9% CBLR is considered to have met: (i) the generally applicable risk-based and leverage capital requirements of the generally applicable capital rules; (ii) the capital ratio requirements in order to be considered well-capitalized under the prompt corrective action framework; (iii) any other applicable capital or leverage requirements. A qualifying community banking organization that elects to be under the CBLR framework generally would be exempt from the current capital framework, including risk-based capital requirements and capital conservation buffer requirements. ​ 91 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Note 19 - Fair Value Measurements Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability shall not be adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact. Authoritative guidance requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement costs). Valuation techniques should be consistently applied. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, authoritative guidance establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: ● Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. ● Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (for example, interest rates, volatilities, prepayment speeds, loss severities, credit risks and default rates) or inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 Inputs - Significant unobservable inputs that reflect an entity ’ s own assumptions that market participants would use in pricing the assets or liabilities. A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. There have been no changes in valuation techniques during the years ended December 31, 2025 and 2024. In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market- based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. While management 92 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. Available for Sale Securities - Securities classified as available for sale are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U. S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayments speeds, credit information and the bond’s terms and conditions, among other things. Derivative Instruments – The Company records derivative instruments at fair value on a recurring basis. The Company utilizes derivative instruments as part of the management of interest rate risk to modify the repricing characteristics of certain portions of the Company’s interest-bearing assets and liabilities. The Company has contracted with a third-party vendor to provide valuations for derivatives using standard valuation techniques and therefore classifies such valuations as Level 2. Third-party valuations are validated by the Company using Bloomberg Valuation Service’s derivative pricing functions. Collateral-dependent Loans – Collateral-dependent loans are reported at the fair value of the underlying collateral if repayment is expected solely from the collateral. Collateral values are estimated using Level 3 inputs based on internally customized discounting criteria. Other real estate owned – Fair values are valued at the time the loan is foreclosed upon and the asset is transferred from loans or when the asset is transferred into other real estate owned from premises and equipment. The value is based upon primarily third-party appraisals, less estimated costs to sell. The appraisals are generally discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the client and the client’s business. Such discounts are typically significant and result in Level 3 classification of the inputs for determining fair value. Other real estate owned is reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same or similar factors above. The following table summarizes financial assets measured at fair value on a recurring basis as of December 31, 2025 and 2024, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 ​ ​ ​ Total ​ ​ Inputs ​ Inputs ​ Inputs ​ Fair Value Financial assets ​ ​ ​ ​ ​ ​ ​ ​ Available for sale securities ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed ​ $ — ​ $ 5,796 ​ $ — ​ $ 5,796 Collateralized mortgage obligations ​ ​ — ​ ​ 35,742 ​ ​ — ​ ​ 35,742 State and municipal ​ — ​ 8,743 ​ — ​ 8,743 Corporate bonds ​ ​ — ​ ​ 9,612 ​ ​ — ​ ​ 9,612 Total financial assets ​ $ — ​ $ 59,893 ​ $ — ​ $ 59,893 ​ 93 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 ​ ​ ​ Total ​ ​ Inputs ​ Inputs ​ Inputs ​ Fair Value Financial assets ​ ​ ​ ​ ​ ​ ​ ​ Available for sale securities ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed ​ $ — ​ $ 9,151 ​ $ — ​ $ 9,151 Collateralized mortgage obligations ​ ​ — ​ ​ 46,568 ​ ​ — ​ ​ 46,568 State and municipal ​ — ​ 13,277 ​ — ​ 13,277 Corporate bonds ​ ​ — ​ ​ 6,193 ​ ​ — ​ ​ 6,193 Derivative instruments ​ ​ — ​ ​ 419 ​ ​ — ​ ​ 419 Total financial assets ​ $ — ​ $ 75,608 ​ $ — ​ $ 75,608 ​ Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following table summarizes financial and non-financial assets measured at fair value on a nonrecurring basis as of December 31, 2025 and 2024, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ Level 1 ​ Level 2 ​ Level 3 ​ Total Fair ​ ​ ​ ​ Inputs ​ ​ ​ Inputs ​ ​ ​ Inputs ​ ​ ​ Value Financial assets ​ ​ ​ ​ ​ ​ ​ ​ Collateral-dependent loans ​ $ — ​ $ — ​ $ 654 ​ $ 654 Nonfinancial assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other real estate owned ​ ​ — ​ ​ — ​ ​ 9,271 ​ ​ 9,271 ​ ​ $ — ​ $ — ​ $ 9,925 ​ $ 9,925 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ Level 1 ​ Level 2 ​ Level 3 ​ Total Fair ​ ​ ​ ​ Inputs ​ ​ ​ Inputs ​ ​ ​ Inputs ​ ​ ​ Value Financial assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Collateral-dependent loans ​ $ — ​ $ — ​ $ 861 ​ $ 861 Nonfinancial assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other real estate owned ​ ​ — ​ ​ — ​ ​ 480 ​ ​ 480 ​ ​ $ — ​ $ — ​ $ 1,341 ​ $ 1,341 ​ During the years ended December 31, 2025 and 2024, certain collateral-dependent loans were remeasured and reported at fair value through a specific allocation of the allowance for credit losses based upon the fair value of the underlying collateral. At December 31, 2025, collateral-dependent loans with a carrying value of $ 933 were reduced by specific valuation allowance allocations totaling $ 279 to a reported fair value of $ 654 . At December 31, 2024, collateral-dependent loans with a carrying value of $ 1,140 were reduced by a specific valuation allowance allocations totaling $ 279 to a reported fair value of $ 861 . The fair value of collateral-dependent loans is determined based on collateral valuations utilizing Level 3 valuation inputs. At December 31, 2025, the Company had other real estate owned consisting of one small bank property that was purchased for future expansion, one multi-family property acquired through foreclosure and two land development projects belonging to one customer that were transferred through deeds in lieu of foreclosure. The reported fair value 94 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ includes a deduction for estimated costs to sell and all properties are currently listed for sale. At December 31, 2024, the Company had other real estate owned consisting of two bank properties that were purchased for future expansion but then listed for sale. The estimated fair value amounts of other real estate owned have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Quantitative Information About Significant Unobservable Inputs Used in Level 3 Fair Value Measurements – The following table represents the Company’s Level 3 financial assets, the valuation techniques used to measure the fair value of those financial assets, the significant unobservable inputs and the ranges of values for those inputs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Significant ​ ​ ​ Range of ​ ​ Fair Value at ​ Principal Valuation ​ Unobservable ​ Significant Input Instrument ​ December 31, 2025 ​ Technique ​ Inputs ​ Values Collateral-dependent loans ​ $ 654 Appraisal of collateral (1) Appraisal adjustment 5 - 25 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Other real estate owned ​ $ 9,271 Appraisal of collateral (1) Appraisal adjustment 5 - 25 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Significant ​ ​ ​ Range of ​ ​ Fair Value at ​ Principal Valuation ​ Unobservable ​ Significant Input Instrument ​ December 31, 2024 ​ Technique ​ Inputs ​ Values Collateral-dependent loans ​ $ 861 ​ Appraisal of collateral (1) ​ Appraisal adjustment ​ 10 - 25 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other real estate owned ​ $ 480 Appraisal of collateral (1) Appraisal adjustment 10 - 25 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable. 95 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ The estimated fair values, and related carrying amounts, of the Company’s financial instruments are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ Level 1 ​ Level 2 ​ Level 3 ​ Total ​ Total ​ ​ ​ ​ Inputs ​ ​ ​ Inputs ​ ​ ​ Inputs ​ ​ ​ Fair Value ​ ​ ​ Carrying Value Financial assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 6,450 ​ $ — ​ $ — ​ $ 6,450 ​ $ 6,450 Interest bearing deposits in banks ​ 5,509 ​ — ​ — ​ 5,509 ​ 5,509 Securities held to maturity ​ — ​ 16,744 ​ — ​ 16,744 ​ 18,283 Loans, net ​ — ​ — ​ 293,446 ​ 293,446 ​ 301,986 Net investment in direct financing leases ​ — ​ — ​ ​ 1,185 ​ 1,185 ​ 1,219 Accrued interest receivable ​ 1,888 ​ — ​ — ​ 1,888 ​ 1,888 Restricted investments carried at cost ​ — ​ ​ 2,773 ​ — ​ 2,773 ​ 2,773 Mortgage servicing rights ​ ​ — ​ ​ — ​ ​ 210 ​ ​ 210 ​ ​ 210 Financial liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ — ​ — ​ 297,856 ​ 297,856 ​ 327,904 FHLB advances ​ — ​ — ​ 46,478 ​ 46,478 ​ 45,669 Accrued interest payable ​ 683 ​ — ​ — ​ 683 ​ 683 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ Level 1 ​ Level 2 ​ Level 3 ​ Total ​ Total ​ ​ ​ ​ Inputs ​ ​ ​ Inputs ​ ​ ​ Inputs ​ ​ ​ Fair Value ​ ​ ​ Carrying Value Financial assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 13,290 ​ $ — ​ $ — ​ $ 13,290 ​ $ 13,290 Interest bearing deposits in banks ​ 9,720 ​ — ​ — ​ 9,720 ​ 9,720 Securities held to maturity ​ — ​ 19,531 ​ — ​ 19,531 ​ 22,096 Loans, net ​ — ​ — ​ 276,028 ​ 276,028 ​ 292,416 Net investment in direct financing leases ​ — ​ — ​ 1,292 ​ 1,292 ​ 1,292 Accrued interest receivable ​ 1,919 ​ — ​ — ​ 1,919 ​ 1,919 Restricted investments carried at cost ​ — ​ 3,715 ​ — ​ 3,715 ​ 3,715 Mortgage servicing rights ​ — ​ — ​ 230 ​ 230 ​ 230 Financial liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ — ​ — ​ 302,400 ​ 302,400 ​ 335,828 FHLB advances ​ — ​ — ​ 49,911 ​ 49,911 ​ 49,878 Accrued interest payable ​ 759 ​ — ​ — ​ 759 ​ 759 ​ The following methods and assumptions were used by the Company in estimating fair value disclosures for financial instruments: Cash and cash equivalents and interest-bearing deposits in banks – The carrying value approximates their fair values. Securities held to maturity – Fair values for investment securities are based on quoted market prices or whose value is determined using discounted cash flow methodologies. Loans and net investment in direct financing leases – The fair values for loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms and credit quality. Accrued interest receivable – The carrying value approximates its fair value. 96 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Restricted investments carried at cost – The carrying value of these investments approximates fair value based on the redemption provisions contained in each. Mortgage servicing rights – Fair values are estimated using discounted cash flows based on current market rates of interest. Deposits – The fair values disclosed for demand deposits (for example, interest and noninterest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). The carrying amounts of variable-rate, fixed- term money market accounts and certificates of deposit approximate their fair values at the reporting date. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates on comparable instruments to a schedule of aggregated expected monthly maturities on time deposits. FHLB advances – Current market rates for debt with similar terms and remaining maturities are used to estimate fair value of existing debt. Accrued interest payable – The carrying value approximates the fair value. ​ Note 20 – Derivatives ​ The Company is exposed to economic risks arising from its business operations and uses derivatives primarily to manage risk associated with changing interest rates. The Company designates certain derivatives as hedging instruments in a qualifying hedge accounting relationship (cash flow or fair value hedge). ​ Fair Value Hedges – Derivatives are designated as fair value hedges when they are used to manage exposure to changes in the fair value of certain financial assets and liabilities, referred to as the hedged items, which fluctuate in value as a result of movements in interest rates. ​ Securities available for sale – During the year ended December 31, 2024, the Company had a swap agreement to hedge the interest rate risk on a portion of its fixed rate securities available for sale. At December 31, 2024, the aggregate notional amount of the related hedged items of the securities available for sale totaled $ 25 million and the fair value of the swaps associated with the derivative related to hedged items was an unrealized gain of $ 417 . ​ During the year ended December 31, 2024, the carrying amount of the hedged assets decreased due to the sale of two securities with an amortized cost of $ 5,500 . At December 31, 2024, the hedging relationship qualified for hedge accounting due to the amortized cost of the remaining securities exceeding the notional amount. ​ The Company applies hedge accounting in accordance with ASC 815, Derivatives and Hedging, and the fair value hedge and the underlying hedged item, attributable to the risk being hedged, are recorded at fair value with unrealized gains and losses being recorded within other interest income on the Company’s Consolidated Statements of Operations. The Company assesses the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows on the derivative hedging instrument with the changes in fair value or cash flows on the designated hedged item or transactions for the risk being hedged. ​ If a hedging relationship ceases to qualify for hedge accounting, the relationship is discontinued and future changes in the fair value of the derivative instrument are recognized in current period earnings. For a discontinued or terminated fair value hedging relationship, all remaining basis adjustments to the carrying amount of the hedged item are amortized to interest income or expense over the remaining life of the hedged item consistent with the amortization of other discounts or premiums. Previous balances deferred in AOCI from discontinued or terminated cash flow hedges are reclassified to 97 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ interest income or expense as the hedged transactions affect earnings or over the originally specified term of the hedging relationship. The Company’s hedges continue to be highly effective and had no material impact on the Consolidated Statements of Operations. ​ The following table summarizes key elements of the Company’s derivative instruments as of December 31, 2024, segregated by derivatives that are considered accounting hedges and those that are not: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Notional Amount ​ Fair Value Derivatives designated as hedges: ​ ​ ​ ​ ​ ​ Fair Value Hedges ​ $ 25,000 ​ $ 419 Total ​ $ 25,000 ​ $ 419 ​ The following table summarizes the carrying value of the Company’s hedged assets in fair value hedges and the associated cumulative basis adjustments included in those carrying values as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Carrying Amount of Hedged Assets Amount ​ ​ ​ Cumulative Amount of Basis Adjustments Included in the Carrying Amount of the Hedged Assets Line items on the Consolidated Statements of Financial Condition in which the hedged items is included: ​ ​ ​ ​ ​ ​ Securities available for sale ​ $ 33,830 ​ $ ( 417 ) ​ Termination of Fair Value Hedge Relationship ​ During the year ended December 31, 2025, the Company terminated its fair value hedge relationship related to certain AFS securities. The hedge relationship was terminated as a result of the termination of the associated derivative instrument, and the Company did not redesignate the derivative as a hedging instrument. The underlying AFS securities were not sold in connection with the termination of the hedge relationship. ​ Upon termination of the fair value hedge, the derivative instrument was settled, and no derivative instruments related to this hedge relationship remained outstanding. The cumulative fair value hedge basis adjustment previously recorded on the hedged AFS securities, which reflects changes in fair value attributable to the hedged risk, remains as part of the carrying amount of the securities. Upon termination the unamortized basis adjustment related to the terminated hedge was $ 463 .The basis adjustment is being amortized into interest income over the remaining contractual lives of the related securities using the effective interest method. The AFS securities continue to be classified as available-for-sale, with unrealized gains and losses, excluding the hedge-related basis adjustment, recorded in accumulated other comprehensive income (loss) (“AOCI”). ​ The termination of the fair value hedge relationship did not have a material impact on the Company’s consolidated financial statements. ​ ​ 98 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ Note 21 - Condensed Parent Company Financial Statements Included below are the condensed financial statements of the Parent Company, Texas Community Bancshares, Inc.: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ 2024 Assets ​ ​ ​ ​ Cash and cash equivalents ​ $ 3,703 ​ $ 7,797 Investment in subsidiary ​ 48,666 ​ 43,273 Deferred income taxes ​ 213 ​ 167 Other assets ​ 1,208 ​ 900 ​ ​ $ 53,790 ​ $ 52,137 Liabilities ​ ​ ​ ​ Accrued expenses and other liabilities ​ 33 ​ 29 ​ ​ ​ ​ ​ ​ ​ Shareholders' Equity ​ ​ ​ ​ Preferred stock, $ 0.01 par value, 1,000,000 shares authorized, none issued and outstanding ​ $ — ​ $ — Common stock, $ 0.01 par value, 19,000,000 shares authorized, 3,366,516 issued and 2,887,275 outstanding at December 31, 2025 and 3,370,425 issued and 3,088,152 outstanding at December 31, 2024 ​ 34 ​ 34 Additional paid in capital ​ 33,198 ​ 32,493 Retained earnings ​ 32,412 ​ 30,163 Accumulated other comprehensive loss ​ ( 3,063 ) ​ ( 4,766 ) Unearned Employee Stock Ownership Program shares, at cost ​ ( 1,884 ) ​ ( 2,039 ) Treasury stock, at cost ( 479,241 shares at December 31, 2025 and 282,273 shares at December 31, 2024) ​ ( 6,940 ) ​ ( 3,777 ) Total shareholders' equity ​ 53,757 ​ 52,108 ​ ​ $ 53,790 ​ $ 52,137 ​ 99 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2025 ​ 2024 Interest Income ​ ​ ​ ​ ​ ​ Gain on other investment ​ $ 198 ​ $ — ​ ​ ​ ​ ​ ​ ​ Total income ​ ​ 198 ​ ​ — ​ ​ ​ ​ ​ ​ ​ Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other expenses ​ ​ 505 ​ ​ 416 ​ ​ ​ ​ ​ ​ ​ Total expenses ​ 505 ​ 416 ​ ​ ​ ​ ​ ​ ​ Loss Before Income Taxes and Equity in Earnings of Subsidiary ​ ( 307 ) ​ ( 416 ) ​ ​ ​ ​ ​ ​ ​ Income Tax Benefit ​ ( 66 ) ​ ( 83 ) ​ ​ ​ ​ ​ ​ ​ Loss Before Equity in Earnings of Subsidiary ​ ( 241 ) ​ ( 333 ) ​ ​ ​ ​ ​ ​ ​ Equity in Earnings of Subsidiary ​ ​ ​ ​ Undistributed earnings of subsidiary ​ 3,083 ​ ( 972 ) ​ ​ ​ ​ ​ ​ ​ Total equity in earnings of subsidiary ​ 3,083 ​ ( 972 ) ​ ​ ​ ​ ​ ​ ​ Net Income (Loss) ​ ​ 2,842 ​ ​ ( 1,305 ) ​ ​ ​ ​ ​ ​ ​ Other items of comprehensive income (loss) ​ ​ ​ ​ ​ ​ Unrealized loss on investment securities available for sale, before tax ​ ​ 2,689 ​ ​ 937 Reclassification adjustment for realized gain on sale of investment securities included in net income (loss) ​ ​ ( 117 ) ​ ​ ( 190 ) Net changes in fair value of available for sale securities hedge, before tax ​ ​ ( 417 ) ​ ​ 298 Income tax benefit related to other items of comprehensive income (loss) ​ ​ ( 452 ) ​ ​ ( 219 ) ​ ​ ​ ​ ​ ​ ​ Total other items of comprehensive income (loss), net of tax expense (benefit) ​ 1,703 ​ 826 ​ ​ ​ ​ ​ ​ ​ Comprehensive Income (Loss) ​ $ 4,545 ​ $ ( 479 ) ​ 100 Table of Contents Texas Community Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Amounts in thousands, except for share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2025 ​ 2024 Operating Activities ​ ​ ​ ​ Net income (loss) ​ $ 2,842 ​ $ ( 1,305 ) Adjustments to reconcile net (loss) income to ​ ​ ​ ​ net cash used for operating activities ​ ​ ​ ​ Equity in undistributed earnings of subsidiary ​ ( 3,083 ) ​ 972 ESOP compensation expense for allocated shares ​ 253 ​ 223 Net increase in other investment ​ ​ ( 157 ) ​ ​ — Deferred tax benefit ​ ( 47 ) ​ ( 94 ) Increase in other assets ​ 19 ​ ( 80 ) Increase in accrued expenses ​ 4 ​ ( 13 ) ​ ​ ​ ​ ​ ​ ​ Net Cash used for Operating Activities ​ ( 169 ) ​ ( 297 ) ​ ​ ​ ​ ​ ​ ​ Investing Activities ​ ​ ​ ​ Purchase of other investments ​ ( 169 ) ​ ( 132 ) ​ ​ ​ ​ ​ ​ ​ Net Cash used for Investing Activities ​ ( 169 ) ​ ( 132 ) ​ ​ ​ ​ ​ ​ ​ Financing Activities ​ ​ ​ ​ Dividends Paid ​ ( 593 ) ​ ( 504 ) Purchase of treasury stock ​ ( 3,163 ) ​ ( 1,578 ) ​ ​ ​ ​ ​ ​ ​ Net Cash used for Financing Activities ​ ( 3,756 ) ​ ( 2,082 ) ​ ​ ​ ​ ​ ​ ​ Net Change in Cash and Cash Equivalents ​ ( 4,094 ) ​ ( 2,511 ) ​ ​ ​ ​ ​ ​ ​ Cash and Cash Equivalents at Beginning of Year ​ 7,797 ​ 10,308 ​ ​ ​ ​ ​ ​ ​ Cash and Cash Equivalents at End of Year ​ $ 3,703 ​ $ 7,797 ​ ​ ​ ​ ​ 101 Table of Contents ITEM 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure None. ​