What changed in this filing

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Item 1. Financial Statements

2026-05-07 compared with 2025-11-07 · 147 added, 229 removed, 620 unchanged (38% of the section changed)

3 unchanged sentences

Consolidated Statements of Financial Condition

September 30, 2025 and December 31, 2024

March 31, 2026 and December 31, 2025

(Amounts in thousands, except share and per share data)

September 30,

Cash and due from banks

3 unchanged sentences

Securities available for sale

Securities held to maturity (fair values of $ 17,359 at September 30, 2025 and $ 19,531 at December 31, 2024)

Loans receivable, net of allowance for credit losses of $ 3,247 at September 30, 2025 and $ 3,222 at December 31, 2024

Securities held to maturity, net of allowance for credit losses of $ 0 (fair values of $ 15,859 at March 31, 2026 and $ 16,744 at December 31, 2025)

Loans receivable, net of allowance for credit losses of $ 3,437 at March 31, 2026 and $ 3,440 at December 31, 2025

Net investment in direct financing leases

4 unchanged sentences

Restricted investments carried at cost

Core deposit intangible

Deferred income taxes

Financial derivative

Liabilities and Shareholders' Equity

7 unchanged sentences

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 2,937,743 outstanding at September 30, 2025 and 3,370,425 issued and 3,088,152 outstanding at December 31, 2024

Common stock, $ 0.01 par value, 19,000,000 shares authorized, 3,364,633 issued and 2,885,392 outstanding at March 31, 2026 and 3,366,516 issued and 2,887,275 outstanding at December 31, 2025

Additional paid in capital

2 unchanged sentences

Unearned Employee Stock Ownership Program (ESOP) shares, at cost

Treasury stock, at cost ( 428,773 shares at September 30, 2025 and 282,273 shares at December 31, 2024)

Treasury stock, at cost ( 479,241 shares at March 31, 2026 and December 31, 2025)

Total shareholders' equity

3 unchanged sentences

Consolidated Statements of Operations (Unaudited)

Three and Nine Months Ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share and per share data)

Three Months Ended

Nine Months Ended

September 30,

Interest Income

11 unchanged sentences

Provision for Credit Losses - loans

Provision (Credit) for Credit Losses - off-balance sheet credit exposures

Provision for Credit Losses - off-balance sheet credit exposures

Provision for Credit Losses

3 unchanged sentences

Other service charges and fees

Net loss on securities transactions

Net loss on sale of loans

Net (loss) gain on sale of other real estate owned

Net loss on sale of other real estate owned

Fair value adjustments to other real estate owned

Net loss on premises and equipment

Net appreciation on bank-owned life insurance

Gain on equity investment

Total noninterest income (loss)

Total noninterest income

Noninterest Expenses

7 unchanged sentences

Total noninterest expense

Income (Loss) Before Income Taxes

Income Tax Expense (Benefit)

Net Income (Loss)

Earnings (Loss) per share - basic

Earnings (Loss) per share - diluted

Income Before Income Taxes

Income Tax Expense

Earnings per share - basic

Earnings per share - diluted

Weighted-average shares outstanding - basic

4 unchanged sentences

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Three and Nine Months Ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share and per share data)

Three Months Ended

Nine Months Ended

September 30,

Net Income (Loss)

Other items of comprehensive income

Other items of comprehensive income (loss)

Debt Securities

Net changes in fair value of available for sale securities, before tax

Reclassification adjustment for realized loss on sale of investment securities included in net income (loss), before tax

Net changes in fair value of available for sale securities hedged, before tax

Total other items of comprehensive income, before tax

Income tax expense related to other items of comprehensive income

Total other items of comprehensive income, after tax

Comprehensive Income (Loss)

Total other items of comprehensive (loss) income, before tax

Income tax (expense) benefit related to other items of comprehensive (loss) income

Total other items of comprehensive (loss) income, after tax

Comprehensive Income

See Notes to Consolidated Financial Statements

2 unchanged sentences

Consolidated Statements of Shareholders’ Equity (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share and per share data)

1 unchanged sentence

Shareholders'

Three Months Ended September 30, 2025 and 2024

Balance at July 1, 2025

Stock based compensation expense

Other comprehensive income, net of tax

Cash dividend declared ($ 0.04 per share)

ESOP shares committed to be released, 3,453 shares

Treasury stock purchased, 62,000 shares

Balance at September 30, 2025

Balance at July 1, 2024

Stock based compensation expense

Other comprehensive income, net of tax

Cash dividend declared ($ 0.04 per share)

ESOP shares committed to be released, 3,277 shares

Treasury stock purchased, 29,331 shares

Balance at September 30, 2024

Comprehensive

Shareholders'

Nine Months Ended September 30, 2025 and 2024

Balance at January 1, 2026

Stock based compensation expense

Other comprehensive income, net of tax

Other comprehensive loss, net of tax

Cash dividend declared ($ 0.05 per share)

ESOP shares committed to be released, 3,349 shares

Treasury stock purchased, 146,500 shares

Balance at September 30, 2025

Balance at March 31, 2026

Balance at January 1, 2025

4 unchanged sentences

Treasury stock purchased, 31,500 shares

Balance at September 30, 2024

Balance at March 31, 2025

See Notes to Consolidated Financial Statements

2 unchanged sentences

Consolidated Statements of Cash Flows (Unaudited)

Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share and per share data)

Nine Months Ended

September 30,

Three Months Ended

Operating Activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash from operating activities

Adjustments to reconcile net income to net cash from operating activities

Provision for credit losses - loans

Provision (credit) for credit losses - off-balance sheet credit exposures

Net (accretion) amortization of securities

Provision for credit losses - off-balance sheet credit exposures

Net amortization (accretion) of securities

Depreciation and amortization

Net realized loss on sales of securities available for sale

Net unrealized gain on discontinued financial derivative

Stock dividends on restricted investments

Net increase on restricted investments

Loss on sale of loans

Loss on disposal of fixed assets

Appreciation on bank-owned life insurance

ESOP compensation expense for allocated shares

Loss (gain) on sale other real estate owned

Loss on sale other real estate owned

Fair value adjustment on other real estate owned

Stock-based compensation

Deferred income tax expense (benefit)

Deferred income tax expense

Loss on fair value adjustment of fair value hedges

2 unchanged sentences

Accrued expenses and other liabilities

Net Cash from Operating Activities

Net Cash from (used for) Operating Activities

Investing Activities

5 unchanged sentences

Redemptions of restricted investments

Purchases of restricted investments

Purchases of other investment

Loan originations and principal collections, net

Net decrease (increase) in net investment in direct financing leases

Proceeds from sale of loans, originally classified as loans held for investment

Net decrease in net investment in direct financing leases

Proceeds from sales of other real estate owned

Additions of premises and equipment

Net Cash from Investing Activities

Net Cash (used for) Investing Activities

Financing Activities

Net (decrease) increase in deposits

Advances from FHLB and other borrowings

Net increase in deposits

Payments on FHLB and other borrowings

1 unchanged sentence

Purchases of treasury stock

Net Cash used for Financing Activities

Net Cash (used for) from Financing Activities

Net Change in Cash and Cash Equivalents

5 unchanged sentences

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

9 unchanged sentences

Interim Financial Statements

The interim unaudited consolidated financial statements as of September 30, 2025, and for the three and nine months ended September 30, 2025 and 2024, are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented.

The interim unaudited consolidated financial statements as of March 31, 2026, and for the three months ended March 31, 2026 and 2025, are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented.

Such adjustments are the only adjustments contained in these unaudited consolidated financial statements.

These unaudited consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission, and therefore certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been omitted.

The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be achieved for the year ending December 31, 2025, or any other period.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be achieved for the year ending December 31, 2026, or any other period.

Certain prior period data presented in the consolidated financial statements has been revised to conform with the current period presentation.

11 unchanged sentences

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

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 restricted stock awards granted during the applicable period.

Basic earnings per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period, including allocated and committed to be released ESOP shares and restricted stock awards granted during the applicable period.

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.

1 unchanged sentence

Three Months Ended

Nine Months Ended

September 30,

Net Income (Loss)

Weighted average shares outstanding for basic earnings per share:

4 unchanged sentences

Weighted average shares outstanding for dilutive earnings per share

Basic earnings (loss) per share

Dilutive earnings (loss) per share

Nonvested restricted stock awards for 14,332 and 64,888 shares of common stock were not considered in computing diluted earnings per share for the nine months ended September 30, 2025 and 2024, respectively, because they were antidilutive.

Nonvested restricted stock awards for 64,888 shares of common stock were not considered in computing diluted earnings per share for the three months ended September 30, 2024.

There were no antidilutive restricted stock awards for the three months ended September 30, 2025.

Stock options for 48,859 and 64,176 shares of common stock have vested, however, were not considered in computing diluted earnings per share for the nine months ended September 30, 2025 and 2024, because they were antidilutive.

Stock options for 64,176 shares of common stock have vested, however, were not considered in computing diluted earnings per share for the three months ended September 30, 2024, because they were antidilutive.

There were no antidilutive stock options for the three months ended September 30, 2025.

Basic earnings per share

Dilutive earnings per share

There were no antidilutive restricted awards for the three months ended March 31, 2026.

Nonvested restricted stock awards for 21,493 shares of common stock were not considered in computing diluted earnings per share for the three months ended March 31, 2025, because they were antidilutive.

There were no antidilutive stock options for the three months ended March 31, 2026.

Stock options for 35,838 shares of common stock have vested, however, were not considered in computing diluted earnings per share for the three months ended March 31, 2025, because they were antidilutive.

Texas Community Bancshares, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

1 unchanged sentence

The amortized cost and fair value of securities, with gross unrealized gains and losses, follows:

September 30, 2025

March 31, 2026

Available for Sale

25 unchanged sentences

Total securities held to maturity

During the three and nine months ended September 30, 2025, the Company had no sales of available for sale securities or held to maturity securities.

During the three and nine months ended September 30, 2024, the Company had sales of available for sale securities with an amortized cost basis of $ 5,500 with a loss of $ 1 and no sales of held to maturity securities.

At September 30, 2025 and December 31, 2024, securities with a fair value of $ 17,467 and $ 17,862 , respectively, were pledged to secure public deposits and for other purposes required or permitted by law.

During the three months ended March 31, 2026 and 2025, the Company had no sales of available for sale securities or held to maturity securities.

At March 31, 2026 and December 31, 2025, securities with a fair value of $ 14,872 and $ 14,815 , respectively, were pledged to secure public deposits and for other purposes required or permitted by law.

Texas Community Bancshares, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

The amortized cost and fair value of debt securities by contractual maturity at September 30, 2025, follows:

The amortized cost and fair value of debt securities by contractual maturity at March 31, 2026, follows:

Available for Sale

7 unchanged sentences

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:

September 30, 2025

March 31, 2026

Less than 12 months

5 unchanged sentences

Corporate bonds (1, 14)

Government and agency (1,0)

December 31, 2025

6 unchanged sentences

Corporate bonds (4, 13)

At September 30, 2025 and December 31, 2024, the Company had investment securities with approximately $ 6,161 and $ 8,773 , respectively, in unrealized losses, which have been in continuous loss positions for more than twelve months.

At March 31, 2026 and December 31, 2025, the Company had investment securities with approximately $ 5,825 and $ 5,431 , 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 unrealized losses was primarily the change in market interest rates and not the issuers’ 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 nationally recognized

Texas Community Bancshares, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

The Company monitors credit quality of debt securities held-to-maturity through the use of nationally recognized credit ratings.

credit ratings.

The Company monitors credit ratings 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 September 30, 2025 and December 31, 2024:

September 30, 2025

March 31, 2026

mortgage-backed

3 unchanged sentences

U.S Government

As of September 30, 2025 and December 31, 2024, there were no securities held to maturity on nonaccrual status or past due status.

As of March 31, 2026 and December 31, 2025, there were no securities held to maturity on nonaccrual status or past due status.

Mortgage-backed Securities and Collateralized Mortgage Obligations

1 unchanged sentence

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 September 30, 2025 or December 31, 2024.

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 March 31, 2026 or December 31, 2025.

Government and Agency Securities

1 unchanged sentence

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.

The decline in fair value is primarily 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 September 30, 2025 and December 31, 2024.

Therefore, an allowance for credit losses is deemed unnecessary at March 31, 2026 and December 31, 2025.

Texas Community Bancshares, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

1 unchanged sentence

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.

The decline in fair value is primarily 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 September 30, 2025 and December 31, 2024.

Therefore, an allowance for credit losses is deemed unnecessary at March 31, 2026 and December 31, 2025.

Note 4 - Loans and Allowance for Credit Losses

A summary of the balances of loans and leases follows:

September 30,

Construction and land

6 unchanged sentences

Loans and leases, net

Direct financing leases of $ 1,228 and $ 1,292 are included in consumer and other loans at September 30, 2025 and December 31, 2024, respectively.

Texas Community Bancshares, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

(Amounts in thousands, except share, per share data, and percentages)

The following tables set forth information regarding the activity in the allowance for credit losses for the three and nine months ended September 30, 2025 and September 30, 2024:

September 30, 2025

Direct financing leases of $ 1,038 and $ 1,219 are included in consumer and other loans at March 31, 2026 and December 31, 2025, respectively.

The following tables set forth information regarding the activity in the allowance for credit losses for the three months ended March 31, 2026 and March 31, 2025:

March 31, 2026

Allowance for credit losses:

2 unchanged sentences

Municipalities

Three months ended

Beginning balance, July 1, 2025

Provision (credit) for credit losses

Loans charged-off

Balance, September 30, 2025

Nine months ended

Balance, January 1, 2026

1 unchanged sentence

Loans charged-off

Balance, September 30, 2025

September 30, 2024

Balance, March 31, 2026

Texas Community Bancshares, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

March 31, 2025

Allowance for credit losses:

2 unchanged sentences

Municipalities

Three months ended

Beginning balance, July 1, 2024

Provision for credit losses

Loans charged-off

Balance, September 30, 2024

Nine months ended

Balance, January 1, 2025

1 unchanged sentence

Loans charged-off

Balance, September 30, 2024

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days and still accruing as of September 30, 2025 and December 31, 2024:

September 30, 2025

Balance, March 31, 2025

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days and still accruing as of March 31, 2026 and December 31, 2025:

March 31, 2026

with Allowance

5 unchanged sentences

Consumer and other

Texas Community Bancshares, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

(Amounts in thousands, except share, per share data, and percentages)

December 31, 2025

6 unchanged sentences

Consumer and other

The Company did no t recognize any interest income on nonaccrual loans during the three and nine months ended September 30, 2025 or September 30, 2024.

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of September 30, 2025 and December 31, 2024:

September 30, 2025

The Company did no t recognize any interest income on nonaccrual loans during the three months ended March 31, 2026 or March 31, 2025.

Texas Community Bancshares, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of March 31, 2026 and December 31, 2025:

March 31, 2026

1-4 Residential & multi-family

2 unchanged sentences

December 31, 2025

Construction and land

1-4 Residential & multi-family

Commercial real estate

Texas Community Bancshares, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

(Amounts in thousands, except share, per share data, and percentages)

The Company had $ 2,323 and $ 2,260 in collateral-dependent loans at September 30, 2025 and December 31, 2024, respectively.

Consumer and other

The Company had $ 2,068 and $ 2,135 in collateral-dependent loans at March 31, 2026 and December 31, 2025, respectively.

Internal Risk Categories

5 unchanged sentences

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.

Texas Community Bancshares, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

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.

14 unchanged sentences

Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed.

Texas Community Bancshares, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

(Amounts in thousands, except share, per share data, and percentages)

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.

1 unchanged sentence

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 doubtful are generally also placed on nonaccrual status.

Credits rated loss are those that are considered uncollectable and of such little value that their continuance as bankable assets is not warranted.

3 unchanged sentences

The Company evaluates the loan risk grading system definitions and allowance for credit loss methodology on an ongoing basis.

No significant changes in methodology were made during the nine months ended September 30, 2025.

No significant changes in methodology were made during the three months ended March 31, 2026.

Texas Community Bancshares, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

Based on the most recent analysis performed, the risk category of loans by class of loans and gross chargeoffs as of September 30, 2025 and December 31, 2024 are as follows:

September 30, 2025

Based on the most recent analysis performed, the risk category of loans by class of loans and gross chargeoffs as of March 31, 2026 and December 31, 2025 are as follows:

March 31, 2026

Term Loans Amortized Cost Basis by Origination Year

1 unchanged sentence

Special mention

Current period gross charge-offs

Special mention

1 unchanged sentence

Special mention

Current period gross charge-offs

Commercial real estate

10 unchanged sentences

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

3 unchanged sentences

Special mention

Current period gross charge-offs

Special mention

15 unchanged sentences

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

1 unchanged sentence

The Company also evaluates credit quality based on the aging status of the loan.

The following is an aging analysis for loans as of September 30, 2025 and December 31, 2024:

September 30, 2025

The following is an aging analysis for loans as of March 31, 2026 and December 31, 2025:

March 31, 2026

Construction and land

12 unchanged sentences

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 three and nine months ended September 30, 2025 and 2024.

The following table presents interest income recognized on loans that are collateral-dependent and individually reviewed for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended

Nine Months Ended

September 30,

1-4 Residential & multi-family

No interest income was recognized for loans on nonaccrual status for the three months ended March 31, 2026 and 2025.

During the three months ended March 31, 2026 and 2025, there was no interest income recognized on collateral-dependent loans.

During the three months ended March 31, 2026 and 2025, there were no modifications of loans to borrowers in financial difficulty.

There have been no modifications to borrowers with financial difficulty in the three months ended March 31, 2026 and 2025, 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.

Texas Community Bancshares, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

During the three and nine months ended September 30, 2025 and 2024, there were no modifications of loans to borrowers in financial difficulty.

There have been no modifications to borrowers with financial difficulty in the three and nine months ended September 30, 2025 and 2024, 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 - Off-Balance-Sheet Activities

4 unchanged sentences

The Company follows the same credit policies in making commitments as it does for on-balance sheet instruments.

At September 30, 2025 and December 31, 2024, the following financial instruments were outstanding whose contract amounts represent credit risk:

At March 31, 2026 and December 31, 2025, the following financial instruments were outstanding whose contract amounts represent credit risk:

Contract Amount

September 30, 2025

March 31, 2026

December 31, 2025

10 unchanged sentences

One line renews annually and the other line is in effect until either party changes the terms of the agreement.

At September 30, 2025, the Company had no commitments to purchase securities.

At March 31, 2026, 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 financial statements.

2 unchanged sentences

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

1 unchanged sentence

Supplemental disclosure of cash flow information is as follows:

Nine Months Ended

September 30,

Three Months Ended

Supplemental cash flow information:

4 unchanged sentences

Non-cash activities

Transfer on loans receivable to loans held for sale

Loan originations to facilitate the sale of other real estate owned

Loans transferred to other real estate owned

Premises and equipment transferred to other real estate owned

Lease liabilities arising from obtaining right-of-use assets

Note 7 - Minimum Regulatory Capital Requirements

4 unchanged sentences

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 September 30, 2025 and December 31, 2024, the Bank’s CBLR ratio was 11.53 % and 10.84 %, respectively, which exceeded all regulatory capital requirements under the CBLR framework, and the Bank was considered to be “well-capitalized.”

At March 31, 2026 and December 31, 2025, the Bank’s CBLR ratio was 11.97 % and 11.74 %, 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.

4 unchanged sentences

(iii) any other applicable capital or leverage requirements.

Qualifying community banking organizations

Qualifying community banking organizations that elect 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.

Texas Community Bancshares, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

that elect 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.

Note 8 - Fair Value Measurements

19 unchanged sentences

A description of the valuation methodologies used for assets measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

There were no changes in valuation techniques during either the three and nine months ended September 30, 2025 or the year ended December

There were no changes in valuation techniques during either the three months ended March 31, 2026 or the year ended December 31, 2025.

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 or third-party models that primarily use, as inputs,

Texas Community Bancshares, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

However, the allowable range of significant unobservable inputs for collateral-dependent loans and other real estate owned was changed to 5 % - 25 % from 10 % - 25 % at September 30, 2025.

This change was primarily due to a higher number of larger loans in the portfolio.

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 or third-party models that primarily use, as inputs, observable market- based parameters.

observable market- based parameters.

Valuation adjustments may be made to ensure that financial instruments are recorded at fair value.

2 unchanged sentences

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.

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.

2 unchanged sentences

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 value is based upon primarily third-party appraised values, 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.

4 unchanged sentences

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

The following table summarizes financial assets measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

September 30, 2025

The following table summarizes financial assets measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

March 31, 2026

Financial assets

12 unchanged sentences

Corporate bonds

Derivative instruments

Total financial assets

4 unchanged sentences

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

The following table summarizes financial and non-financial assets measured at fair value on a nonrecurring basis as of September 30, 2025 and December 31, 2024, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

September 30, 2025

The following table summarizes financial and non-financial assets measured at fair value on a nonrecurring basis as of March 31, 2026 and December 31, 2025, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

March 31, 2026

Financial assets

Collateral-dependent loans

Nonfinancial assets

Other real estate owned

December 31, 2025

3 unchanged sentences

Other real estate owned

During the three and nine months ended September 30, 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.

During the three months ended March 31, 2026 and 2025, 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.

The fair value of collateral dependent loans is determined based on collateral valuations utilizing Level 3 valuation inputs.

At September 30, 2025, collateral-dependent loans with a carrying value of $ 990 were reduced by specific valuation allowance allocations totaling $ 288 to a reported fair value of $ 702 .

At March 31, 2026, collateral-dependent loans with a carrying value of $ 885 were reduced by specific valuation allowance allocations totaling $ 279 to a reported fair value of $ 606 .

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 September 30, 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.

At March 31, 2026, the Company had other real estate owned consisting of 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 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.

At December 31, 2025, the Company had other real estate owned consisting of Bank-owned 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 estimated fair value amounts of other real estate owned have been determined by the Company using available market information and appropriate valuation methodologies.

5 unchanged sentences

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

3 unchanged sentences

Significant Input

September 30, 2025

March 31, 2026

Collateral-dependent loans

18 unchanged sentences

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

The estimated fair values, and related carrying amounts, of the Company’s financial instruments are as follows:

September 30, 2025

March 31, 2026

Carrying Value

31 unchanged sentences

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

22 unchanged sentences

Dividends on unallocated ESOP shares, if any, are recorded as a reduction of debt and accrued interest.

ESOP compensation was $ 56 and $ 166 for the three and nine months ended September 30, 2025 and $ 46 and $ 139 for the three and nine months ended September 30, 2024.

ESOP compensation was $ 56 and $ 52 for the three months ended March 31, 2026 and 2025, respectively.

Texas Community Bancshares, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements (Unaudited)

Three and Nine months ended September 30, 2025 and 2024

Three Months Ended March 31, 2026 and 2025

(Amounts in thousands, except share, per share data, and percentages)

A summary of the ESOP shares as of September 30, 2025 and December 31, 2024 are as follows:

September 30, 2025

A summary of the ESOP shares as of March 31, 2026 and December 31, 2025 are as follows:

March 31, 2026

December 31, 2025

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements