Texas Community Bancshares Reports $643,000 Net Income in Q1 2025, Significant Turnaround from Prior Year

Texas Community Bancshares, Inc. reported a net income of $643,000 for the first quarter of 2025, a significant turnaround from a net loss of $2.7 million in the same period last year. This improvement of $3.3 million, or 123.9%, was attributed to the absence of nonrecurring losses that impacted the previous year, including a $3.8 million loss from a strategic loan sale. The company’s total interest income increased by 4.0% to $5.6 million, driven primarily by higher interest income from loans, which rose by 18.6% to $4.4 million due to increased yields and a higher average balance of loans.

In terms of financial position, total assets decreased slightly to $442.2 million as of March 31, 2025, down from $443.5 million at the end of 2024. This decline was primarily due to a $1.3 million reduction in securities, offset by a $3.8 million increase in net loans and leases, which reached $297.5 million. The company’s total deposits increased by $1.7 million to $337.5 million, with a notable rise in certificates of deposit, which grew by 2.8% to $133.5 million.

Operationally, Texas Community Bancshares has focused on diversifying its loan portfolio, with real estate loans comprising 92.3% of total loans. The company has also been actively managing its interest rate risk, having terminated an interest rate swap agreement that resulted in a $463,000 unrealized gain. The company’s allowance for credit losses stood at 1.09% of total loans, reflecting a provision for credit losses of $113,000 for the quarter, a significant increase from a reversal of $277,000 in the prior year.

Looking ahead, Texas Community Bancshares remains committed to maintaining a strong liquidity position, with available liquidity sources including a $98.7 million borrowing capacity from the Federal Home Loan Bank. The company is also focused on monitoring market conditions and adjusting its strategies accordingly, particularly in light of recent volatility in the banking sector. Management anticipates that it will have sufficient funds to meet its current commitments and is optimistic about its ability to navigate the evolving economic landscape.