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Relative valuation derived from Financials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 55.2GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
38.4%
Sector: 8.5%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, CoastalSouth Bancshares, Inc. (COSO) receives a "Hold" rating with a composite score of 53.4/100, ranked #247 out of 4446 stocks. Key factor scores: Quality 55/100, Value 73/100, Momentum 39/100. This is quantitative analysis only — not investment advice.
CoastalSouth Bancshares, Inc. (COSO) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does CoastalSouth Bancshares, Inc. Do?
CoastalSouth Bancshares, Inc. is a bank holding company headquartered in Atlanta, Georgia. Through our wholly owned subsidiary, Coastal States Bank, a South Carolina state-chartered commercial bank, we offer a full range of banking products and services designed for businesses, real estate professionals, and consumers looking for a deep and meaningful relationship with their bank. Today, we have a community banking presence in some of the fastest growing and most business-friendly markets in the U.S., namely the Lowcountry of South Carolina (Hilton Head Island, Bluffton, and Beaufort), nearby Savannah, Georgia, and the Atlanta, Georgia market. --- In addition to our traditional community banking operations, we operate four specialty lines of business that provide scalability and diversification: • Senior Housing Lending - focuses on lending to operators across the spectrum of senior care, with an emphasis on assisted living; • Marine Lending - focuses on consumer loans primarily to high-net-worth borrowers secured by yachts and high-end sport fishing vessels; • Government Guaranteed Lending - focuses on origination of small business and other loans guaranteed by the SBA and USDA; and • Mortgage Banker Finance - focuses on mortgage warehouse lending to mortgage originators. By combining the relationship-based focus of a community bank with our specialty lines of business, we believe we can capitalize on the substantial growth opportunities available in our markets, particularly given the scarcity of community banks between $1.5 billion and $5.0 billion in total assets. Our principal executive offices are located in Atlanta, Georgia. CoastalSouth Bancshares, Inc. (COSO) is classified as a micro-cap stock in the Financials sector, specifically within the Banking industry. The company is led by CEO Stephen R. Stone and employs approximately 180 people. With a market capitalization of $297M, COSO is one of the notable companies in the Financials sector.
CoastalSouth Bancshares, Inc. (COSO) Stock Rating — Hold (April 2026)
As of April 2026, CoastalSouth Bancshares, Inc. receives a Hold rating with a composite score of 53.4/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.COSO ranks #247 out of 4,446 stocks in our coverage universe. Within the Financials sector, CoastalSouth Bancshares, Inc. ranks #92 of 891 stocks, placing it in the top quartile of its Financials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
COSO Stock Price and 52-Week Range
CoastalSouth Bancshares, Inc. (COSO) currently trades at $25.60. The stock lost $0.34 (1.3%) in the most recent trading session. The 52-week high for COSO is $26.29, which means the stock is currently trading -2.6% from its annual peak. The 52-week low is $19.24, putting the stock 33.1% above its annual trough. Recent trading volume was 61K shares, suggesting relatively thin trading activity.
Is COSO Overvalued or Undervalued? — Valuation Analysis
CoastalSouth Bancshares, Inc. (COSO) carries a value factor score of 73/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 11.58x, compared to the Financials sector average of 14.88x — a discount of 22%. The price-to-book ratio stands at 1.15x, versus the sector average of 1.22x. The price-to-sales ratio is 37.57x, compared to 0.90x for the average Financials stock. On an enterprise value basis, COSO trades at 2.40x EV/EBITDA, versus 3.26x for the sector.
Based on these multiples, CoastalSouth Bancshares, Inc. appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
CoastalSouth Bancshares, Inc. Profitability — ROE, Margins, and Quality Score
CoastalSouth Bancshares, Inc. (COSO) earns a quality factor score of 55/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 38.4%, compared to the Financials sector average of 8.5%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 4.3% versus the sector average of 1.2%.
On a margin basis, CoastalSouth Bancshares, Inc. reports gross margins of 65.0%. The operating margin is 1568.6% (sector: 21.8%). Net profit margin stands at 1254.0%, versus 17.7% for the average Financials stock. Revenue growth is running at 2.1% on a trailing basis, compared to 9.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
COSO Debt, Balance Sheet, and Financial Health
CoastalSouth Bancshares, Inc. has a debt-to-equity ratio of 789.0%, compared to the Financials sector average of 121.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 1.13x, suggesting adequate working capital coverage. Total debt on the balance sheet is $512M. Cash and equivalents stand at $26M.
COSO has a beta of 0.42, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for CoastalSouth Bancshares, Inc. is 93/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
CoastalSouth Bancshares, Inc. Revenue and Earnings History — Quarterly Trend
In TTM 2026, CoastalSouth Bancshares, Inc. reported revenue of $2M and earnings per share (EPS) of $2.24. Net income for the quarter was $25M. Gross margin was 65.0%. Operating income came in at $31M.
In FY 2025, CoastalSouth Bancshares, Inc. reported revenue of $2M and earnings per share (EPS) of $2.24. Net income for the quarter was $25M. Operating income came in at $31M.
In Q3 2025, CoastalSouth Bancshares, Inc. reported revenue of $464,000 and earnings per share (EPS) of $0.57. Net income for the quarter was $7M. Operating income came in at $9M.
In Q2 2025, CoastalSouth Bancshares, Inc. reported revenue of $20M and earnings per share (EPS) of $0.58. Net income for the quarter was $6M. Gross margin was 61.7%. Operating income came in at $7M.
Over the past 4 quarters, CoastalSouth Bancshares, Inc. has experienced revenue contraction from $20M to $2M. Investors analyzing COSO stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
COSO Dividend Yield and Income Analysis
CoastalSouth Bancshares, Inc. (COSO) does not currently pay a dividend. This is common among smaller companies in the Banking industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Financials dividend stocks may want to explore other Financials stocks or use the stock screener to filter by dividend yield.
COSO Momentum and Technical Analysis Profile
CoastalSouth Bancshares, Inc. (COSO) has a momentum factor score of 39/100, signaling weak relative price performance. Stocks with low momentum scores have historically tended to continue underperforming in the near term. The investment factor score is 25/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 44/100 reflects moderate short selling activity.
COSO vs Competitors — Financials Sector Ranking and Peer Comparison
Comparing COSO against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full COSO vs S&P 500 (SPY) comparison to assess how CoastalSouth Bancshares, Inc. stacks up against the broader market across all factor dimensions.
COSO Next Earnings Date
No upcoming earnings date has been announced for CoastalSouth Bancshares, Inc. (COSO) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy COSO? — Investment Thesis Summary
CoastalSouth Bancshares, Inc. presents a balanced picture with arguments on both sides. The value score of 73/100 suggests attractive pricing relative to fundamentals. Momentum is weak at 39/100, a headwind for near-term performance. Low volatility (stability score 93/100) reduces downside risk.
In summary, CoastalSouth Bancshares, Inc. (COSO) earns a Hold rating with a composite score of 53.4/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on COSO stock.
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Institutional Research Dossier
CoastalSouth Bancshares, Inc. (COSO) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
CoastalSouth Bancshares (COSO) receives a Hold rating. This assessment stems from a balanced view of the company's attractive valuation metrics, particularly its low P/E and EV/EBITDA ratios relative to the financial sector, offset by concerns regarding its high debt-to-equity ratio and inconsistent revenue generation. While COSO exhibits strong profitability metrics like ROE and net margin, its negative free cash flow and relatively weak revenue growth raise questions about its long-term sustainability and growth prospects, justifying a neutral stance.
The core takeaway is that COSO presents a mixed bag of value and risk. Its specialization in niche lending areas like senior housing and marine lending offers potential for above-average returns, but its high leverage and reliance on these specific sectors also introduce significant vulnerabilities. Investors should carefully weigh the potential upside from its attractive valuation against the downside risks associated with its financial health and growth trajectory before making an investment decision.
Business Strategy & Overview
CoastalSouth Bancshares operates as a bank holding company with a focus on community banking and specialized lending services. Its primary subsidiary, Coastal States Bank, offers traditional banking products and services to businesses, real estate professionals, and consumers in the southeastern United States, specifically targeting high-growth markets like the Lowcountry of South Carolina, Savannah, Georgia, and Atlanta, Georgia. This geographic focus allows COSO to capitalize on regional economic expansion and demographic trends.
Beyond traditional banking, COSO differentiates itself through four specialty lines of business: Senior Housing Lending, Marine Lending, Government Guaranteed Lending (SBA and USDA), and Mortgage Banker Finance. These specialized areas provide diversification and scalability, allowing COSO to target specific market segments with tailored financial solutions. The Senior Housing Lending segment caters to the growing demand for senior care facilities, while Marine Lending focuses on high-net-worth individuals seeking financing for yachts and sport fishing vessels. Government Guaranteed Lending leverages SBA and USDA programs to mitigate risk and expand access to capital for small businesses. Mortgage Banker Finance provides warehouse lending to mortgage originators, supporting the housing market.
COSO's strategy hinges on combining the relationship-based approach of a community bank with the specialized expertise of its niche lending businesses. This hybrid model aims to capture market share in underserved segments and generate higher returns compared to traditional banking operations. The company believes that the scarcity of community banks with assets between $1.5 billion and $5.0 billion creates a significant opportunity for growth and expansion.
The company's success is dependent on its ability to effectively manage credit risk within its specialized lending portfolios, maintain strong relationships with its customer base, and adapt to changing market conditions. Furthermore, COSO must navigate the regulatory landscape and maintain compliance with banking regulations to ensure its long-term viability. The strategic emphasis on high-growth markets and niche lending areas positions COSO for potential outperformance, but also exposes it to specific risks associated with these sectors.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
2.1%
Sector: 9.4%
-77% VS SCTR
Economic Moat Analysis
CoastalSouth Bancshares possesses a narrow economic moat, primarily derived from switching costs and, to a lesser extent, specialized expertise in its niche lending segments. The banking industry, in general, benefits from inherent switching costs, as customers often maintain long-term relationships with their banks due to the inconvenience of transferring accounts, loans, and other financial services. This stickiness provides COSO with a degree of customer retention, particularly within its community banking operations.
The company's specialized lending businesses, such as Senior Housing Lending and Marine Lending, contribute to its narrow moat by creating barriers to entry for competitors. These segments require specialized knowledge, industry relationships, and underwriting expertise, which are not easily replicated. COSO's experience in these areas allows it to assess risk more effectively and offer tailored financial solutions that differentiate it from larger, more generalized banks.
However, the moat is not wide due to the relatively small scale of COSO's operations and the presence of numerous competitors in both the community banking and specialized lending markets. Larger banks with greater resources and broader geographic reach can easily enter COSO's markets and offer similar products and services. Furthermore, the specialized lending segments are subject to cyclical fluctuations and economic downturns, which can erode COSO's competitive advantage.
The absence of a strong brand name and the lack of significant network effects further limit COSO's moat. While the company emphasizes relationship-based banking, its customer base is not large enough to create a self-reinforcing network that would deter customers from switching to competitors. Therefore, COSO's narrow moat is primarily based on switching costs and specialized expertise, which provide a limited degree of competitive advantage but are vulnerable to competition and economic volatility.
Financial Health & Profitability
CoastalSouth Bancshares exhibits a mixed financial profile. The company's revenue for FY2025 is reported at $1.99 million, which appears unusually low and warrants further investigation. Net income stands at $24.89 million, resulting in an EPS of $2.16. The operating margin is extraordinarily high at 1,568.6%, and the net margin is 1,254.0%, both significantly exceeding sector averages. These figures suggest either a highly efficient operation or potential anomalies in the financial reporting. The Q3 FY2025 revenue is $464,000 with a net income of $6.74 million, and an operating margin of 1,892.5%, further reinforcing the need for scrutiny.
The company's ROE of 38.4% is substantially higher than the sector average of 8.5%, indicating strong profitability relative to equity. However, the negative free cash flow of -$737.78 million raises concerns about the company's ability to generate cash from its operations. The current ratio of 1.13 suggests adequate liquidity to meet short-term obligations.
A significant concern is the company's high debt-to-equity ratio of 789.00, which is considerably higher than the sector average of 115.00. This high leverage increases the company's financial risk and vulnerability to interest rate fluctuations and economic downturns. The total debt of $512.36 million, compared to total cash of $26.28 million, further underscores the company's reliance on debt financing.
The quarterly financial history reveals inconsistent revenue generation and fluctuating profitability. While Q3 FY2025 shows a high operating margin, the overall revenue figures remain low. The negative free cash flow in Q2 FY2025, coupled with the high debt levels, suggests that COSO may be facing challenges in managing its cash flow and funding its operations. The company's financial health is therefore a concern, particularly due to its high leverage and inconsistent revenue performance.
Valuation Assessment
CoastalSouth Bancshares presents an intriguing valuation profile. Its P/E ratio of 10.6x is significantly lower than the sector average of 15.5x, suggesting that the stock may be undervalued relative to its earnings. Similarly, its EV/EBITDA ratio of 2.3x is also lower than the sector average of 3.5x, further indicating potential undervaluation based on its enterprise value and operating profitability.
However, the valuation assessment must consider the company's financial health and growth prospects. While the low P/E and EV/EBITDA ratios may appear attractive, they could also reflect investor concerns about the company's high debt levels, inconsistent revenue generation, and negative free cash flow. The high debt-to-equity ratio of 789.00 increases the company's financial risk and could limit its ability to invest in future growth opportunities.
The company's revenue growth of 2.1% is significantly lower than the sector average of 9.3%, indicating that COSO is not growing as rapidly as its peers. This slower growth rate may justify a lower valuation multiple. Furthermore, the negative free cash flow raises questions about the sustainability of the company's earnings and its ability to generate cash for future investments or dividend payments.
Considering the mixed financial profile, COSO's valuation appears to be fair, reflecting both its attractive profitability metrics (ROE and net margin) and its concerning financial health (high debt and negative free cash flow). While the low P/E and EV/EBITDA ratios may suggest undervaluation, the company's slower growth rate and high leverage warrant caution. A more conservative valuation approach is justified, given the uncertainties surrounding COSO's financial performance and growth trajectory.
Risk & Uncertainty
CoastalSouth Bancshares faces several specific risks that could negatively impact its business and financial performance. One of the most significant risks is its high debt-to-equity ratio, which increases its vulnerability to interest rate fluctuations and economic downturns. Rising interest rates could increase the company's borrowing costs and reduce its profitability. An economic recession could lead to increased loan defaults and reduced demand for its banking services.
Another risk is the concentration of its lending portfolio in specialized areas such as Senior Housing Lending and Marine Lending. These sectors are subject to specific risks and cyclical fluctuations. A downturn in the senior housing market or the marine industry could significantly impact COSO's loan portfolio and profitability. Furthermore, these specialized lending areas may attract increased competition from larger banks and non-bank lenders, which could erode COSO's market share and profitability.
Regulatory risk is also a concern for COSO. As a bank holding company, it is subject to extensive regulations and oversight by federal and state banking authorities. Changes in banking regulations could increase the company's compliance costs and limit its ability to operate its business effectively. Furthermore, regulatory scrutiny could lead to enforcement actions and penalties, which could negatively impact the company's reputation and financial performance.
Finally, the company's reliance on key personnel, particularly in its specialized lending businesses, poses a risk. The loss of key employees with specialized knowledge and industry relationships could disrupt COSO's operations and negatively impact its ability to generate revenue. Therefore, COSO must effectively manage its financial leverage, diversify its lending portfolio, comply with banking regulations, and retain key personnel to mitigate these risks and ensure its long-term viability.
Bulls Say / Bears Say
The Bull Case
BULL VIEWCOSO's low P/E and EV/EBITDA ratios indicate it's significantly undervalued compared to its peers, offering substantial upside potential as the market recognizes its true worth.
BULL VIEWThe company's high ROE demonstrates superior profitability and efficiency, suggesting it can generate strong returns for shareholders despite its current challenges.
BULL VIEWCOSO's specialization in niche lending markets like senior housing and marine lending provides a competitive edge and the potential for above-average growth as these sectors expand.
The Bear Case
BEAR VIEWCOSO's extremely high debt-to-equity ratio makes it highly vulnerable to economic downturns and interest rate hikes, threatening its long-term solvency.
BEAR VIEWThe company's negative free cash flow indicates it's burning cash and may need to raise capital, diluting existing shareholders or further increasing its debt burden.
BEAR VIEWThe unusually high operating and net margins reported in recent quarters are unsustainable and likely reflect accounting anomalies, masking underlying weaknesses in the business.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score COSO and 4,400+ other equities.
CoastalSouth Bancshares, Inc. exhibits a 1005% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
4.3%
Sector: 1.2%
Gross Margin
Pricing power and cost efficiency
65.0%
Sector: 0.0%
Operating Margin
Core business profitability
1568.6%
Sector: 21.8%
Net Margin
Bottom-line profitability
1254.0%
Sector: 17.7%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
