What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-03-30 compared with 2022-03-23 · 51 added, 379 removed, 102 unchanged (81% of the section changed)

Controls and Procedures

(a) Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chairman of the Board, President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of December 31, 2022.

Based on that evaluation, the Company’s management, including the Chairman of the Board, President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.

During the quarter ended December 31, 2021, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

This Annual Report does not include a report of management’s assessment regarding internal control over financial reporting due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.

(b) Management’s Annual Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934.

The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

The Company’s internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the consolidated financial statements.

The Company’s management, including the principal executive officer and principal financial officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, based on the criteria set forth in the “ Internal Control-Integrated Framework (2013) ” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on such assessment, management concluded that, as of December 31, 2022, the Company’s internal control over financial reporting is effective, based on those criteria.

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting.

Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to provisions of the Dodd-Frank Act that permits the Company to provide only management’s report in this annual report.

During the year ended December 31, 2022, there have been no changes to the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Other Information

2 unchanged sentences

Directors, Executive Officers and Corporate Governance

The directors of Texas Community Bancshares are the same persons who are currently the directors of Mineola Community Bank.

In addition, each executive officer of Texas Community Bancshares is also an executive officer of Mineola Community Bank.

Texas Community Bancshares and Mineola Community Bank expect to maintain this shared management structure until there is a business reason to establish separate management structures.

Our Directors

Directors of Texas Community Bancshares serve three-year staggered terms so that approximately one-third of the directors are elected at each annual meeting.

The directors of Mineola Community Bank are also elected on the same staggered basis.

The following table sets forth for each director of Texas Community Bancshares, his or her name, his or her age at December 31, 2021, the year in which he or she began serving as a director of Mineola Community Bank, and the year when his or her current term as a director of Texas Community Bancshares expires.

Director Since

Current Term Expires

Demethrius T.

Herlocker, III

Chairman, President and Chief Executive Officer

Corporate Secretary

Jerry Presswood

Kerry Nan Saucier

Johnny Sherrill

Bryan Summerville

(1) The mailing address for each individual is 215 West Broad Street, Mineola, TX 75773 .

The business experience for the past five years of each director is set forth below.

Each individual’s biography also contains information regarding his experience, qualifications, attributes or skills that caused the board of directors to determine that he should serve as a director.

Unless otherwise indicated, each individual has held his position for the past five years.

Demethrius R.

Boyd is the Senior Pastor of St.

Paul Missionary Church in Mineola, Texas.

Boyd provides us with valuable knowledge, community involvement and leadership skills used in his counseling, ministry and numerous community leadership roles.

He had served an advisory direct since 2013.

Bradshaw is a veterinarian and the owner of Lake Country Animal Clinic.

Bradshaw opened his veterinary clinic in Mineola in 1989.

He has a degree in Veterinary Medicine from Texas A&M University.

Bradshaw provides us with extensive knowledge of Mineola Community Bank and its operations.

Bradshaw served as an Advisory Board Member of Mineola Community Bank beginning in 2000 before being appointed as a director.

He also brings extensive knowledge of the agriculture business to the Board of Directors.

Harder is a self-employed online auto dealer and business consultant.

Harder serves on several community boards and advises local businesses with his business knowledge.

As the longest serving director, Mr.

Harder provides the Board of Directors with extensive institutional knowledge of Mineola Community Bank.

Herlocker, III is the Chairman, President and Chief Executive Officer of Texas Community Bancshares and Mineola Community Bank.

He has been employed by Mineola Community Bank since 1978 and has served as its President and Chief Executive Officer since 1996.

Herlocker’s extensive knowledge of the banking industry and strong leadership skills provide us with invaluable insight and guidance into the business and regulatory requirements of today’s banking environment.

Kindle , a doctor of pharmacy, is the owner of Economy Drug in Grand Saline, Texas, and Crandall Pharmacy in Crandall, Texas.

Kindle provides us with business and financial knowledge as a successful business owner as well as serving in leadership roles on finance committees, economic development boards and other civic organizations.

He had served as an advisory director since 2017.

Mize has been employed by Mineola Community bank since 1977 and serves as Corporate Secretary of Texas Community Bancshares and Mineola Community Bank.

She joined Mineola Community Bank in 1977 and has held several positions during her tenure, giving her valuable knowledge of bank operations.

Mize provides us with extensive knowledge of the local community and years of experience in the banking industry.

Pickens served as President and Chief Executive Officer of the First National Bank of Edgewood from 1996 to 2017.

In 2017, the First National Bank of Edgewood was sold and the name was changed to Maple Mark Bank.

Mineola Community Bank acquired the Edgewood branch from Maple Mark Bank on December 31, 2018 and Mr.

Pickens began his employment with Mineola Community Bank at that time.

He retired as an employee on May 31, 2019.

After his retirement, he became a director of Mineola Community Bank.

Pickens’s extensive knowledge of the banking industry and strong leadership skills provide us with invaluable insight and guidance into the business and regulatory requirements of today’s banking environment.

Jerry Presswood , now retired, owned a sporting equipment company.

His business sold sporting equipment in the state of Texas and contiguous states.

He also has experience in home building.

Presswood provides us with extensive knowledge of Mineola Community Bank and its operations.

He also brings the knowledge of operating a small business and the understanding of how to make a business successful.

Kerry Nan Saucier , now retired, served as a junior high school principal and was an educator for 39 years.

She started with the bank in 2004 as an advisory director and became a director in September 2007.

She has served on numerous civic boards.

Saucier provides us with extensive knowledge and insight of a regulatory environment through her years as a school administrator.

She also has extensive knowledge and name recognition with thousands of students from her school tenure.

She remains a well-respected and influential community leader.

Scavuzzo is Managing Principal of Castle Creek Capital in San Diego, California, an asset management company specializing in the community banking industry.

Scavuzzo is a member of the boards of directors of the following companies with a class of securities registered under Sections 12 or 15(d) of the Securities Exchange Act of 1934:

Mid Penn Bancorp (MPB), Pathfinder Bancorp (PBHC), Enterprise Financial Services Corp (EFSC), McGregor Bancshares, Guaranty Federal Bancshares (GFED), First Bancshares of Texas, and Lincoln Bancorp.

He is the son-in-law of James H.

Herlocker, III.

Scavuzzo provides us with extensive knowledge of banking, investments, and public reporting expectations through his employment with Castle Creek Capital, as well as his many contacts and connections in the banking industry.

His unique knowledge and role as it relates to community banking provides valuable insight.

Johnny Sherrill retired and sold his interest in Sherrill Construction, a commercial construction business he started in 2005.

He is now a consultant for the company.

Sherrill has interests in the storage building industry and

home building.

He became an advisory director in 2009 before becoming a director of Mineola Community Bank in 2017.

Sherrill provides us with extensive knowledge of construction and the building business in general.

He has a wealth of knowledge through his connections with many people in the construction industry, as well as the retail business market, in the North Texas area.

Smith, III owns and operates Bob Smith Auto Sales, an automobile dealership.

He has a long history of community involvement, including serving as a director and/or officer of several community organizations among them the Meredith Foundation, Kiwanis International, Mineola Masonic Lodge, Mineola Economic Development Corporation, Mineola Chamber of Commerce.

Smith provides us with extensive knowledge of Mineola Community Bank and its operations.

He understands investing from his tenure with the Meredith Foundation and that experience is beneficial to Mineola Community Bank.

Bryan Summerville is an Operation Manager with Tyler Pipe Company in Tyler, Texas.

He is also the owner of East Texas Crete, a decorative concrete business and serves on the Lindale city council.

Summerville provides us with business knowledge and leadership skills through his experience at Tyler Pipe and owning a small business as well as his involvement in city leadership in a very active, fast-growing community.

He had served as an advisory director since 2020.

Glen Thurman is a self-employed residential builder and developer and the owner of Glen Thurman Builder.

He has successfully developed several large tracts in Mineola to residential subdivisions.

He currently has a home development project in the beginning stages that includes plans for over 60 homes, and he is building some of the homes in the project.

Thurman is an entrepreneur.

Thurman provides us with extensive knowledge of the construction and development business.

He has wealth of knowledge from a builder’s perspective of the opportunities within our local market.

He was appointed an advisory director in 2007 before becoming a director of Mineola Community Bank.

Executive Officers Who are Not Directors

Terri Baucum , age 48, has served as Senior Vice President and Chief Lending Officer since 2012.

She supervises the lending activities of Mineola Community Bank including underwriting, compliance and loan administration.

She has been employed with Mineola Community Bank since 1999.

Baucum has over 29 years of banking experience, the majority of which has consisted of the various aspects of mortgage lending.

Haskell Strange , age 55, has served as Senior Vice President and Chief Operating Officer since 2004.

He has over 20 years of experience in information technology.

He supervises Mineola Community Bank’s operations and information technology, and also assists in deposit compliance, human resources, and marketing.

Julie Sharff, CPA , age 55, has served as Chief Financial Officer since 2004 and has been employed by Mineola Community Bank since 1997 in various areas of management.

She is responsible for finance and accounting functions, including financial reporting, risk analysis and presentation, as well as auditor and regulatory relations and reporting.

Before entering banking, she practiced public accounting for five years.

Brittany Bessonett , age 45, has served as Senior Vice President and Marketing Director since 2017 when she began her employment with Mineola Community Bank.

Before then, she was employed with D&B Auto in the accounting and auto finance area.

Kraig Yarbrough , age 58, has served as Senior Vice President since 2018 when he began his employment with Mineola Community Bank.

He is responsible for risk management and interest rate risk management and reporting.

Before he came to Mineola Community Bank he was self-employed as a registered investment advisor.

Sofia Gurrusquieta , age 28, has served as the Compliance Officer, BSA Officer and CRA Officer since 2017.

From 2015 to 2017, she served as Assistant Compliance Officer and Assistant BSA Officer.

She has been employed with Mineola Community Bank since 2012.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors, certain officers and persons who own more than 10% of its common stock, to file with the Securities and Exchange Commission initial reports of ownership of the Company’ s equity securities and to all subsequent reports when there are changes in such ownership.

Based on a review of reports submitted to the Company, the Company believes that during the year ended December 31, 2021 all Section 16(a) filing requirements applicable to the Company’s officers, directors, and more than 10% owners were complied with on a timely basis.

Corporate Governance Policies and Procedures

Texas Community Bancshares adopted several written policies to govern the activities of both Texas Community Bancshares and Mineola Community Bank including corporate governance policies and a code of business conduct and ethics.

The corporate governance policies involve such matters as the following:

● the composition, responsibilities and operation of our board of directors;

● the establishment and operation of board committees, including an audit committee, the charter for which is available on our website at www.mineolacb.com under “ Investors – Governance Documents ”;

● convening executive sessions of independent directors;

● our board of directors’ interaction with management and third parties.

The code of business conduct and ethics, which applies to all employees and directors, addresses conflicts of interest, the treatment of confidential information, general employee conduct and compliance with applicable laws, rules and regulations.

In addition, the code of business conduct and ethics is designed to deter wrongdoing and to promote honest and ethical conduct, the avoidance of conflicts of interest, full and accurate disclosure and compliance with all applicable laws, rules and regulations.

A copy of the Code of Ethics is available on the Company’s website at www.mineolacb.com under “ Investors – Governance Documents .”

Texas Community Bancshares has determined that it has at least one audit committee financial expert serving on the Audit Committee.

Executive Compensation

The Company’s has adopted a Code of Ethics that applies to its principal executive officer, principal financial officer and principal accounting officer or controller or persons performing similar functions.

A copy is available on the Investors section of Mineola Community Bank’s website at www.mineolacb.com.

The information contained in the sections captioned “Business Items to be Voted on by Stockholders – Item 1 Election of Directors,” “Other Information Relating to Directors and Executive Officers” and “Corporate Governance” in the Company’s definitive Proxy Statement for the 2023 Annual Meeting of Stockholders (the “ 2023 Proxy Statement”) is incorporated herein by reference.

Executive Compensation

The following information is furnished for our principal executive officer and the two most highly compensated executive officers (other than the principal executive officer) whose total compensation exceeded $100,000 for the fiscal year ended December 31, 2021.

These individuals are sometimes referred to in this annual report as the “named executive officers.”

Incentive Plan

Name and Principal Position

Compensation (1)

Compensation (2)

Herlocker, III

Chairman, President and Chief Executive Officer

Chief Financial Officer

Senior Vice President and Chief Lending Officer

(1) Represents incentive compensation paid to executives based on (i) the net income of Mineola Community Bank and (ii) their tenure with Mineola Community Bank.

(2) “All Other Compensation” does not include ESOP allocation for each individual because this allocation data was not yet available.

For 2021, the compensation represented by the amounts in the “All Other Compensation” column for the Named Executive Officers is detailed in the following table:

Contributions

Herlocker, III

Sharff serves as an advisory director of Mineola Community Bank.

Employment Agreements.

Mineola Community Bank has entered into an employment agreement with Mr.

Herlocker, Ms.

Sharff and Ms.

The employment agreements have terms of three years for Mr.

Herlocker, one year for Ms.

Sharff and two years for Ms.

The initial term of the employment agreements will extend automatically for one additional year on each anniversary of the effective date of the agreement, so that the remaining term is again either three years, two years or one year, as applicable, unless either Mineola Community Bank or the executive give notice to the other party of non-renewal.

At least 30 days before each anniversary date of the employment agreement, the disinterested members of the board of directors of Mineola Community Bank will conduct a comprehensive evaluation and review of the executive’s performance for purposes of determining whether or not to renew the employment agreements.

Notwithstanding the foregoing, in the event Texas Community Bancshares or Mineola Community Bank enters into a transaction that would constitute a change in control, as defined under the employment agreements, the term of the agreements would automatically extend so that they would expire no less than two years following the effective date of the change in control.

The employment agreements specify the base salaries of Mr.

Herlocker, Ms.

Sharff and Ms.

The current base salaries for Mr.

Herlocker, Ms.

Sharff and Ms.

Baucum are $274,000, $159,000, and $122,400, respectively.

The Board of Directors of Mineola Community Bank or the Compensation Committee may increase, but

not decrease, the executives’ base salaries.

In addition to base salary, the agreements provide that the executives will participate in any bonus plan or arrangement of Mineola Community Bank in which senior management is eligible to participate and/or may receive a bonus on a discretionary basis, as determined by the Compensation Committee.

The executives are also entitled to participate in all employee benefit plans, arrangements and perquisites offered to employees and officers of Mineola Community Bank and the reimbursement of reasonable travel and other business expenses incurred in the performance of his or her duties with Mineola Community Bank.

Herlocker is also provided with an annual automobile allowance of $6,000.

Mineola Community Bank will reimburse Mr.

Herlocker for annual membership dues at a local country club and will reimburse Ms.

Sharff for annual dues at the local Lions Club.

Mineola Community Bank may terminate the employment of any executive, or the executives may resign from their employment, at any time with or without good reason.

Under the employment agreements with Mr.

Herlocker and Ms.

Baucum, in the event Mineola Community Bank terminates the executive’s employment without cause or the executive voluntary resigns for “good reason” (i.e., a “qualifying termination event”), Mineola Community Bank will pay the executive a severance payment equal to the base salary and bonuses (based on the highest annual bonus earned during the three most recent calendar years before his or her date of termination) he or she would have received during the remaining term of the employment agreement.

In the case of Ms.

Sharff, the severance payment would equal one times the sum of (i) her base salary and (ii) her highest annual cash bonus earned during the three prior calendar years.

In addition, the executives will be reimbursed for their monthly COBRA premium payments for up to 18 months in the case of Messrs.

Herlocker and Ms.

Baucum and 12 months in the case of Ms.

If a qualifying termination event occurs at or within two years following a change in control of Texas Community Bancshares or Mineola Community Bank, the executive would be entitled to (in lieu of the payments and benefits described in the previous paragraph) a severance payment equal to three times (in the case of Mr.

Herlocker), two times (in the case of Ms.

Baucum) or one time (in the case of Ms.

Sharff) the sum of (i) his or her base salary in effect as of the date of termination or immediately before the change in control, whichever is higher, and (ii) and highest annual cash bonus earned by the executive for the year in which the change in control occurs or any of the three prior calendar years.

In addition, the executives will be reimbursed for their monthly COBRA premium payments for up to 18 months in the case of Mr.

Herlocker and Ms.

Baucum and 12 months in the case of Ms.

The employment agreements terminate upon the executive’s death or disability.

Upon termination of employment (other than a termination in connection with a change in control), the executive will be required to adhere to one-year non-competition and non-solicitation restrictions set forth in his or her employment agreement.

Deferred Incentive Compensation Plan.

Mineola Community Bank maintains the Mineola Community Bank Deferred Incentive Compensation Plan (the “Deferred Incentive Plan”) for the benefit of certain employees who have been selected by the Board of Directors to participate in the Deferred Incentive Plan.

Each of the named executive officers participates in the Deferred Incentive Plan.

Under the Deferred Incentive Plan, within 90 days of the end of each year, Mineola Community Bank makes contributions to the accounts of participants.

Interest is credited to participants’ accounts based on the rate of return on equity of Mineola Community Bank.

Participants vest in the annual contributions at the rate of 20% per year.

Each year, Mineola Community Bank will distribute to each participant 20% of the contributions made on behalf of the participant for each of the five years preceding the year of the distribution.

Upon a participant’s separation from service at or after attaining age 65, the participant will receive the full amount of his or her deferral account under the plan.

If a participant voluntarily separates from service before attaining age 65 or if the participant’s employment is terminated for cause (as defined in the plan), he or she will forfeit any unpaid benefits.

If the participant experiences a disability before attaining age 65, he or she will receive his or her full deferral balance (regardless of any vesting criteria).

Upon a change in control, each participant will receive his or her full deferral balance (regardless of any vesting criteria).

If a participant dies before a separation from service, his or her beneficiary will receive the participant’s full deferral account balance (without regard to any vesting criteria).

In the event the participant dies after he or she has begun to receive payments under the plan, his or her beneficiary will receive the participant’s full deferral account balance (without regard to any vesting criteria).

Distributions under the Deferred Incentive Plan are made in a lump sum within 90 days of the event triggering the distribution.

Any amounts payable under the Deferred Incentive Plan that would be an excess parachute payment for purposes of Code Section 280G will be reduce to the extent necessary to avoid the amount being treated as an excess parachute payment.

Split-Dollar Life Insurance.

Mineola Community Bank maintains the Mineola Community Bank Split Dollar Life Insurance Plan, in which each of the named executive officers and Ms.

Mize participate.

Mineola Community Bank purchased life insurance policies on the life of each executive in an amount sufficient to provide for the benefits under the plan.

The executive has the right to designate the beneficiary who will receive his or her share of the proceeds payable upon his or her death.

The policies are owned by Mineola Community Bank, which paid the premium due on the policies.

Under the plan, Ms.

Sharff, and Ms.

Baucum’s respective named beneficiary, would receive $100,000, or the net death benefit upon the death of the insured, and Mineola Community Bank is entitled to the remaining death benefit if the death occurred before separation from service, or after separation from service after the participant attained age 65, or after separation from service when the sum of the participant’s age and years of service with Mineola Community Bank equals or exceeds 90.

In accordance with Mr.

Herlocker’s amended bank owned life insurance plan participation agreement, if he dies before separation from service and before attaining age 76, the proceeds of the policy are divided between Mr.

Herlocker’s beneficiary, who is entitled to the lesser of (i) $400,000 or (ii) the net death benefit, and Mineola Community Bank, which is entitled to the remainder of the death benefit.

Herlocker dies after a separation from service or after attaining age 76, the portion of the policy paid to the executive’s beneficiary will equal the lesser of (i) $150,000 or (ii) the net death benefit.

If death of the participant occurs outside of these parameters, the participant’s beneficiary will not be entitled to any benefit and the entire death benefit will go to Mineola Community Bank.

Mineola Community Bank maintains the Mineola Community Bank 401(k) Profit Sharing Plan, a tax-qualified defined contribution plan for eligible employees (the “401(k) Plan”).

The named executive officers are eligible to participate in the 401(k) Plan on the same terms as other eligible employees of Mineola Community Bank.

Eligible employees who are at least 19 years of age will become participants for purposes of making elective deferrals and receiving safe-harbor matching contributions as of the first day of the first month following the date they complete 60 consecutive days of employment with Mineola Community.

Under the 401(k) Plan a participant may elect to defer, on a pre-tax basis, the maximum amount of compensation permitted by the Internal Revenue Code, to the extent that amount does not exceed 90% of their compensation.

For 2022, the salary deferral contribution limit is $20,500, provided, however, that a participant over age 50 may contribute an additional $6,500 to the 401(k) Plan for a total of $27,000.

In addition to salary deferral contributions, Mineola Community Bank may make discretionary matching contributions and other discretionary employer contributions.

A participant is always 100% vested in his or her salary deferral contributions.

A participant will vest in matching and other employer contributions at the rate of 20% per year of service, beginning after one year of service, so that a participant will be fully vested after completing six years of credited service.

Generally, unless the participant elects otherwise, the participant’s account balance will be distributed as a result of the participant’s termination of employment.

Employee Stock Ownership Plan.

Mineola Community Bank has adopted an employee stock ownership plan for eligible employees.

The named executive officers will be eligible to participate in the employee stock ownership plan just like other eligible employees of Mineola Community Bank.

Eligible employees will begin participation in the employee stock ownership plan on the later of the effective date of the conversion and offering or upon the first entry date commencing on or after the eligible employee’s completion of one year of service and attainment of age 19.

The trustee will hold the shares purchased by the employee stock ownership plan in an unallocated suspense account, and shares will be released from the suspense account on a pro-rata basis as the trustee repays the loan.

The trustee will allocate the shares released among participants on the basis of each participant’s proportional share of compensation relative to all participants.

A participant will vest in his or her account balance based on his or her years of service with Mineola Community Bank, at the rate of 20% per year of service, beginning after one year of service, so that a participant will be fully vested after completing six years of credited service.

Participants who were employed by Mineola Community Bank immediately before the conversion and offering will receive credit for vesting purposes for years of service before adoption of the employee stock ownership plan.

Participants also will become fully vested automatically upon normal retirement age, death or disability, a change in control, or termination of the employee stock ownership plan.

Generally, participants will receive distributions from the employee stock ownership plan upon their separation from service in accordance with the terms of the plan document.

The employee stock ownership plan reallocates any unvested shares forfeited upon termination of employment among the remaining participants.

Directors’ Compensation

The following table sets forth for the year ended December 31, 2021 certain information as to the total remuneration we paid to our directors other than Mr.

His compensation for his service as a director is disclosed in the previous table.

Boyd, Kindle, Scavuzzo and Summerville did not serve as directors during the year ended December 31, 2021.

Nonequity Incentive

Fees Earned or

Plan Compensation

Paid in Cash ($)

Compensation ($)

Jerry Presswood

Kerry Nan Saucier

Johnny Sherrill

(1) Represents incentive compensation paid to Ms.

Mize based on (i) the net income of Mineola Community Bank and (ii) her tenure as an employee with Mineola Community Bank.

(2) Represents payments pursuant to a previously entered into non-compete agreement.

Mize also serves as an employee of Mineola Community Bank in the capacity as Corporate Secretary.

This amount represents $130,560 paid as salary, $7,768 received as matching contributions under the 401(k) Plan, $34,694 contributed on her behalf to the Deferred Incentive Compensation Plan, and $175 attributable to the taxable value of life insurance provided to her by Mineola Community Bank.

“All Other Compensation” does not include ESOP allocation for Ms.

Mize because this allocation data was not yet available.

Employment Agreement with Ms.

Mineola Community Bank has entered into an employment agreement with Ms.

The employment agreement has a term of one year.

The initial term of the employment agreement will extend automatically for one additional year on each anniversary of the effective date of the agreement, so that the remaining term is again one year, unless either Mineola Community Bank or Ms.

Mize give notice to the other party of non-renewal.

Mize’s performance for purposes of determining whether to take action to stop the renewal of the employment agreement.

Notwithstanding the foregoing, in the event Texas Community Bancshares or Mineola Community Bank enters into a transaction that would constitute a change in control, as defined under the employment agreement, the term of the agreement would automatically extend so that it would expire no less than two years following the effective date of the change in control.

The employment agreement specifies the base salary of Ms.

Her current base salary is $131,760.

The Board of Directors of Mineola Community Bank or the Compensation Committee may increase, but not decrease, the Ms.

Mize’s base salary.

In addition to base salary, the employment agreement provides that Ms.

Mize will participate in any bonus plan or arrangement of Mineola Community Bank in which senior management is eligible to participate and/or may receive a bonus on a discretionary basis, as determined by the Compensation Committee.

Mize is also entitled to participate in all employee benefit plans, arrangements and perquisites offered to employees and officers of Mineola Community Bank and the reimbursement of reasonable travel and other business expenses incurred in the performance of her duties with Mineola Community Bank.

Mineola Community Bank may terminate Ms.

Mize’s employment, or Ms.

Mize may resign from her employment, at any time with or without good reason.

Under the employment agreement, in the event Mineola Community Bank terminates her employment without cause or she voluntarily resigns for “good reason” (i.e., a “qualifying termination event”), Mineola Community Bank will pay her a severance payment equal to one times the sum of (i) her base salary and (ii) her highest annual cash bonus earned during the previous three prior calendar years.

In addition, Ms.

Mize will be reimbursed for her monthly COBRA premium payments for up to 12 months.

If a qualifying termination event occurs at or within two years following a change in control of Texas Community Bancshares or Mineola Community Bank, Ms.

Mize would be entitled to (in lieu of the payments and benefits described in the previous paragraph) a severance payment equal to one times the sum of (i) her base salary in effect as of the date of termination or immediately before the change in control, whichever is higher, and (ii) and highest annual cash bonus earned by her for the year in which the change in control occurs or any of the three prior calendar years.

In addition, Ms.

Mize will be reimbursed for her monthly COBRA premium payments for up to 12 months.

The employment agreement terminates upon the Ms.

Mize’s death or disability.

Upon termination of employment (other than a termination in connection with a change in control), Ms.

Mize will be required to adhere to one-year non-competition and non-solicitation restrictions set forth in her employment agreement.

Compensation Agreement with Mr.

Mineola Community Bank entered into a Compensation Agreement with Mr.

Smith on January 1, 1996.

Under the Compensation Agreement, since Mr.

Smith has served more than 10 years on the board of directors, Mineola Community Bank will pay Mr.

Smith a total of $270,000, commencing in 2021.

The payments will be made at the rate of $1,500 per month for a period of 180 months.

The cost of the plan has been shared between Mr.

Smith and the Bank.

Smith dies before receiving all payments under the agreement, Mineola Community Bank will continue to make the monthly payments to Mr.

Smith’s beneficiary until all payments have been made under the agreement.

There is a bank owned life insurance policy with Nassau Life Insurance on Mr.

Smith to offset the cost of the plan that has a death benefit balance of $188,649 as of December 31, 2021.

The information contained in the sections captioned “Executive Compensation” and “Directors’ Compensation” in the 2023 Proxy Statement is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Persons and groups who beneficially own in excess of five percent of the Company’s common stock are required to file certain reports with the Securities and Exchange Commission (the “SEC”) regarding such ownership.

The following table sets forth, as of March 18, 2022, the shares of common stock beneficially owned by the Company’s named executive officers and directors individually, by executive officers and directors as a group, and by each person or group known by us to beneficially own in excess of five percent of the Company’s common stock .

The “Amount of Shares Owned” does not include ESOP allocation for each individual because this allocation data was not yet available.

Amount of Shares

Owned and Nature

Percent of Shares

Name and Address of

of Beneficial

of Common Stock

Beneficial Owners

Ownership (1)

Outstanding (2)

Five Percent Stockholders:

Mineola Community Bank, SSB Employee Stock Ownership Plan

215 West Broad Street

Mineola, Texas 75773

Demethrius T.

Herlocker, III

Jerry Presswood

Kerry Nan Saucier

Johnny Sherrill

Bryan Summerville

Executive Officers who are not Directors :

Haskell Strange

Brittany Bessonett

Kraig Yarbrough

Sofia Gurrusquieta

All directors and executive officers as a group (21 persons)

Less than 1%.

(1) In accordance with Rule 13d-3 under the Securities Exchange Act of 1934, a person is deemed to be the beneficial owner for purposes of this table, of any shares of Common Stock if he or she has shared voting or investment power with respect to such security, or has a right to acquire beneficial ownership at any time within 60 days from the Record Date.

As used herein, “voting power” is the power to vote or direct the voting of shares, and “investment power” is the power to dispose or direct the disposition of shares.

The shares set forth above for directors and executive officers include all shares held directly, as well as by spouses and minor children, in trust and other indirect ownership, over which shares the named individuals effectively exercise sole or shared voting and investment power.

(2) Based on a Schedule 13G filed with the SEC on February 2, 2022.

(3) The business address of each director, nominee and executive officer is 215 West Broad Street, Mineola, Texas 75773.

(4) Includes 700 shares held by Mr.

Bradshaw’s spouse.

(5) Includes 1,500 shares held in an IRA.

(6) Includes 10,000 shares held in the 401(k) plan, 25,000 shares held as custodian for a child and no allocated shares held in the ESOP.

(7) Includes 25,000 shares held in the 40(k) Plan and no allocated shares held in the ESOP.

(8) Includes 25,000 shares held by Mr.

Thurman’s spouse.

(9) Includes 7,000 shares held in the 401(k) plan and no allocated shares held in the ESOP.

(10) Includes 6,000 shares held in the 401(k) plan and no allocated shares held in the ESOP.

(11) Includes 25,000 shares held in the 401(k) plan, 25,000 shares held by Ms.

Sharff’s spouse in an IRA and no allocated shares held in the ESOP.

(12) Includes 1,500 shares held in the 401(k) plan, 100 shares held for a child and no allocated shares held in the ESOP.

(13) Includes 5,500 shares held in the 401(k) plan, 20,000 shares held by Mr.

Yarborough’s spouse in an IRA and no allocated shares held in the ESOP.

(14) Includes 3,150 shares held in the 401(k) plan and no allocated shares held in the ESOP.

As of December 31, 2021, we did not have any compensation plans (other than our Employee Stock Ownership Plan) under which equity securities of Texas Community Bancshares, Inc.

are authorized for issuance.

(a) Securities Authorized for Issuance Under Stock-Based Compensation Plans

The following information is presented for the Texas Community Bancshares, Inc.

2022 Equity Incentive Plan, as of December 31, 2022:

Number of securities

Number of securities to be

Weighted-average

remaining available for

issued upon exercise of

exercise price of

future issuance under

outstanding options,

equity compensation

Plan Category

warrants and rights

plans (excluding securities

reflected in column (a))

Equity compensation plans approved by stockholders

Equity compensation plans not approved by stockholders

(b) Securities Ownership of Certain Beneficial Owners

The information required by this item is incorporated herein by reference to the section captioned “Stock Ownership” in the 2023 Proxy Statement.

(d) Changes in Control

Management of the Company knows of no arrangements, including any pledge by any person of securities of the Company, the operation of which may at a later date result in a change in control of the Company.

Certain Relationships and Related Transactions, and Director Independence

Transactions With Certain Related Persons

The Sarbanes-Oxley Act of 2002 generally prohibits publicly traded companies from making loans to their executive officers and directors, but it contains a specific exemption from such prohibition for loans made by federally insured financial institutions, such as Mineola Community Bank, to their executive officers and directors in compliance with federal banking regulations.

Federal regulations permit executive officers and directors to receive the same terms that are widely available to other employees as long as the director or executive officer is not given preferential treatment compared to the other participating employees.

At December 31, 2021, all of our loans to directors and executive officers were made in the ordinary course of business, were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to Mineola Community Bank, and did not involve more than the normal risk of collectability or present other unfavorable features.

These loans were performing according to their original repayment terms at December 31, 2021, and were made in compliance with federal banking regulations.

Board Independence

The board of directors has determined that each of our directors, except for Mr.

Herlocker, Ms.

Scavuzzo and Mr.

Pickens, is “independent” as defined in the listing standards of the Nasdaq Stock Market.

Herlocker and Ms.

Mize are not independent because they are employed by us.

Scavuzzo is not independent because he is the son-in-law of Mr.

Pickens is not independent because he was employed by us during the last three years.

In determining the independence of our directors, the board of directors considered relationships between Mineola Community Bank and our directors that are not required to be reported under “—Transactions With Certain Related Persons,” above, consisting of loans and deposit accounts that our directors maintain at Mineola Community Bank.

Principal Accountant Fees and Services

Our independent registered public accounting firm is BKD, LLP , Houston, TX , Auditor Firm ID:

The aggregate fees billed for professional services rendered by BKD, LLP for the audit of the Company’s annual financial statements for 2021 and 2020 were $161,845 and $60,970, respectively.

Audit-Related Fees .

Fees billed for professional services rendered by BKD, LLP that were reasonably related to the performance of the audits described above, including fees for services associated with SEC registration statements or other documents filed in connection with securities offerings, including comfort letters, consents and assistance with review of documents filed with the SEC, were $99,404 for 2021 and none for 2020.

All Other Fees .

There were no fees billed for professional services rendered for the Company by BKD, LLP for services other than those listed above for 2021 and 2021.

Policy on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent Auditor

The Audit Committee has adopted a policy for approval of audit and permitted non-audit services by the Company’s independent registered public accounting firm.

The Audit Committee will consider annually and approve the provision of audit services by the independent registered public accounting firm and, if appropriate, approve the provision of certain defined audit and non-audit services.

The Audit Committee also will consider on a case-by-case basis and, if appropriate, approve specific engagements.

Any proposed specific engagement may be presented to the Audit Committee for consideration at its next regular meeting or, if earlier consideration is required, to the Audit Committee or one or more of its members.

The member(s) to whom such authority is delegated shall report any specific approval of services at its next regular meeting.

The Audit Committee will regularly review summary reports detailing all services being provided to the Company by its independent registered public accounting firm.

During the year ended December 31, 2021, all audit-related fees, tax fees, and all other fees set forth in the table above were approved by the Audit Committee.

The information required by this item is incorporated herein by reference to the sections captioned “Other Information Relating to Directors and Executive Officers – Transactions with Certain Related Persons” and “Corporate Governance” of the 2023 Proxy Statement.

Principal Accountant Fees and Service s

The information required by this item is incorporated herein by reference to the section captioned “Business Items to be Voted on by Stockholders – Item 2 – Ratification of Appointment of Independent Registered Public Accounting Firm” of the 2023 Proxy Statement.

Exhibits and Financial Statement Schedules

7 unchanged sentences

333-254053), as filed on March 9, 2021)

Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934

Employment Agreement between Mineola Community Bank, S.S.B.

31 unchanged sentences

The following materials from the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, formatted in inline XBRL:

(i) Balance Sheets, (ii) Statements of Income, (iii) Statements of Comprehensive Income, (iv) Changes in Stockholders’ Equity, (v) Statements of Cash Flows and (vi) Notes to the Financial Statements.

(i) Statements of

Financial Condition, (ii) Statements of Income, (iii) Statements of Comprehensive Loss, (iv) Changes in Shareholders’ Equity, (v) Statements of Cash Flows and (vi) Notes to the Financial Statements.

Cover Page Interactive Data File (embedded within the Inline XBRL document)

18 unchanged sentences

March 30, 2023

Julie Sharff, CPA

(Principal Financial and Accounting Officer)

29 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-K

Item 9A. Controls and Procedures