Texas Community Bancshares, Inc. Annual Report - How They Did This Year

I’ve updated our guide with the bank’s official 2025 financial results. Now that we can see the final profit figures, the bank’s performance is much clearer.

1. What does this company do?

Texas Community Bancshares, Inc. is the parent company of Mineola Community Bank, a state-chartered bank based in Mineola, Texas. The bank serves East Texas through seven full-service branches. They primarily make money from the difference between the interest they earn on their $345.2 million loan portfolio and the interest they pay to depositors. They are currently expanding into the Tyler and Terrell markets to reach more customers beyond their home base in Wood County.

2. Financial health: From loss to profit

The big news this year is the bank’s return to profitability. After losing $1.3 million in 2024, the bank earned a profit of $2.8 million in 2025. This represents a return on average assets of about 0.75%.

• Net Interest Income: This is the profit the bank keeps after paying depositors. It grew to $13.3 million, up from $12.5 million in 2024. Higher loan yields drove this growth, even as interest costs rose.
• Efficiency: The bank is running much leaner. Their efficiency ratio—the cost to generate one dollar of revenue—improved from a high 115% in 2024 to a healthier 74% in 2025. This came from lower operating costs.
• Deposits: Total deposits dipped slightly to $327.9 million. Customers are moving money from standard savings into higher-paying Certificates of Deposit (CDs). CDs now make up 42% of total deposits, up from 35% last year. This shift makes funding more expensive and puts pressure on profit margins.

3. Major wins and challenges

The bank is shifting its focus from residential mortgages to commercial real estate and farmland. This strategy aims for higher yields, but it brings challenges in a high-interest-rate environment.

The biggest concern is the jump in foreclosed properties. This figure spiked from $480,000 in 2024 to $9.3 million in 2025. This includes a $5.7 million multi-family property repossessed in the third quarter. The bank is actively working to sell these properties. Until they do, that $9.3 million is tied up in assets that earn no interest, which impacts the bank's overall return on equity.

4. Strategy and outlook

Management is betting on the company’s future. They bought back over 50,000 shares of stock at an average price of $14.50, signaling their confidence that the shares are undervalued. They are also investing in their footprint, including a $1.5 million land purchase in Terrell for a future branch. Construction should begin in late 2026 to help them capture growth between Dallas and Tyler.

5. The bottom line for investors

Moving from a loss to a profit is a major win. However, the rise in foreclosed properties is a risk, as it suggests potential trouble in their commercial loan portfolio. If they sell these properties without further losses, they can free up cash for growth. The bank remains well-capitalized with a 9.2% leverage ratio, providing a solid safety cushion.

Investor takeaway: Keep a close eye on the bank’s ability to clear those foreclosed properties and manage the rising cost of deposits. If they can successfully offload the non-performing assets while maintaining their current profitability, it would be a strong signal that their new commercial lending strategy is working.