EX-99.1 2 ea030947201ex99-1.htm PRESS RELEASE OF COMMERCIAL BANCGROUP, INC., DATED OCTOBER 26, 2026

Exhibit 99.1

 

 

Commercial Bancgroup, Inc. Announces Results for the Third Quarter 2026

 

HARROGATE, TN – October 26, 2026 – Commercial Bancgroup, Inc. (“Commercial” or the “Company”) (Nasdaq: CBK), the parent company of Commercial Bank (the “Bank”), today announced net income of $10.9 million, or $0.79 per diluted common share, for the third quarter of 2026, compared to net income of $9.5 million, or $0.77 per diluted common share, for the third quarter of 2025. Core (net of any one-time adjustments) net income was $10.9 million, or $0.79 per diluted common share, for the third quarter of 2026, compared to core net income of $9.5 million, or $0.77 per diluted common share, for the third quarter of 2025.

 

Prior to Commercial’s initial public offering (“IPO”) of its common stock in October 2025, Commercial had three classes of common stock outstanding: common stock, Class B common stock, and Class C common stock. On September 18, 2025, Commercial’s charter was amended and restated. The Company’s amended and restated charter provided for, among other things:

 

●effective upon the filing of the amended and restated charter, the reclassification and conversion of (i) each outstanding share of Class B common stock into 1.15 shares of common stock and (ii) each outstanding share of Class C common stock into 1.05 shares of common stock (collectively, the “Stock Reclassification”); and

 

●effective immediately following the Stock Reclassification, a 250-for-1 forward stock split in respect of the outstanding shares of the Company’s common stock (the “Stock Split”).

 

Our financial statements, including earnings per share and book value per share data, reflect the Stock Reclassification and Stock Split retroactively. Because the IPO occurred after September 30, 2025, the financial impacts of the IPO are reflected in the fourth quarter of 2025 in the financial statements presented in this press release.

 

Third Quarter 2026 Performance Highlights:

 

●Net income of $10.9 million or $0.79 per diluted common share; Core net income of $10.9 million or $0.79 per diluted common share (see non-GAAP reconciliation)

 

●Return on average assets (“ROAA”) of 1.84%; Core ROAA of 1.84% (see non-GAAP reconciliation)

 

●Return on average equity (“ROAE”) of 14.16%; Core ROAE of 14.16% (see non-GAAP reconciliation)

 

●Return on average tangible common equity (“ROATCE”) of 14.68%; Core ROATCE of 14.68% (see non-GAAP reconciliation)

 

●Net interest margin of 4.14%, an increase of 8 basis points from the second quarter of 2026

 

●Core efficiency ratio of 43.68% (see non-GAAP reconciliation)

 

●Loans outstanding net of deferred fees and discounts increased $42.8 million during the quarter, or 2.2% from the second quarter of 2026

 

●Book value per share increased $0.62, or 2.8%, to $22.71 and tangible book value per share increased $0.64, or 3.0%, to $21.92 at September 30, 2026 from $22.09 and $21.28, respectively, at June 30, 2026 (see non-GAAP reconciliation)

 

●Net charge-offs to average loans of 0.00% and nonperforming assets to total assets of 0.31%

 

1

 

Year-To-Date Highlights:

 

●Net income of $30.6 million or $2.23 per diluted common share for the nine months ended September 30, 2026, compared to $27.1 million or $2.22 per diluted common share for the nine months ended September 30, 2025

 

●ROAA of 1.76% for the nine months ended September 30, 2026, compared to 1.61% for the nine months ended September 30, 2025

 

●ROAE of 13.71% for the nine months ended September 30, 2026, compared to 15.75% for the nine months ended September 30, 2025

 

●Total operating revenue of $72.4 million for the nine months ended September 30, 2026, compared to $66.9 million for the nine months ended September 30, 2025

 

●Noninterest expense of $33.0 million for the nine months ended September 30, 2026, compared to $31.9 million for the nine months ended September 30, 2025

 

●Book value per share of $22.71 as of September 30, 2026, compared to $20.03 as of September 30, 2025

 

●Tangible book value per share of $21.92 as of September 30, 2026, compared to $19.05 as of September 30, 2025 (see non-GAAP reconciliation)

 

●Core efficiency ratio of 44.7% for the nine months ended September 30, 2026, compared to 47.1% for the nine months ended September 30, 2025 (see non-GAAP reconciliation)

 

Balance Sheet Trends

 

Total assets were $2.4 billion as of September 30, 2026, compared to $2.2 billion as of September 30, 2025.

 

Loans outstanding net of deferred fees and discounts were $2.0 billion as of September 30, 2026, an increase of $216.1 million, or 12.2%, from September 30, 2025.

 

As of September 30, 2026, the Bank exceeded the minimum requirements to be well-capitalized for bank regulatory purposes, with a total risk-based capital ratio of 14.2%, a Tier 1 risk-based capital ratio of 13.3%, a common equity Tier 1 capital ratio of 13.3%, and a Tier 1 leverage ratio of 11.8%.

 

Total deposits were $1.9 billion as of September 30, 2026, an increase of $106.8 million, or 6.0%, from September 30, 2025.

 

Noninterest-bearing demand deposits increased $9.6 million, or 2.4%, to $408.2 million as of September 30, 2026, from $398.6 million as of September 30, 2025.

 

Non-brokered deposits were $1.8 billion as of September 30, 2026, an increase of $107.5 million, or 6.2%, from September 30, 2025. This increase was primarily driven by normal customer business cycles and deposit growth.

 

Nonperforming assets to total assets were 0.31% as of September 30, 2026, compared with 0.27% as of September 30, 2025. The allowance for credit losses to total loans was 0.96% and 1.02%, as of September 30, 2026 and September 30, 2025, respectively.

 

Net Income Before Income Taxes

 

Net income before income taxes was $13.8 million for the three months ended September 30, 2026, an increase of $1.5 million, or 12.5%, from the three months ended September 30, 2025. The increase was primarily the result of a $1.9 million, or 9.5%, increase in net interest income after provision for credit losses and a $0.1 million, or 2.8%, increase in noninterest income, partially offset by a $0.4 million, or 4.3%, increase in noninterest expense.

 

Noninterest Income

 

Noninterest income was $2.7 million for the three months ended September 30, 2026, an increase of $0.1 million, or 2.8%, compared to the three months ended September 30, 2025. The increase was primarily due to increases in ATM fees and bank-owned life insurance income.

 

About Commercial Bancgroup, Inc.

 

Commercial Bancgroup, Inc. is a bank holding company headquartered in Harrogate, Tennessee. Through our wholly owned subsidiary, Commercial Bank, a Tennessee state-chartered bank, we offer a suite of traditional consumer and commercial banking products and services to businesses and individuals in select markets in Kentucky, North Carolina, and Tennessee. More information about Commercial can be found on its website at www.cbtn.com.

 

2

 

Commercial Bancgroup, Inc.

Financial Tables

 

Financial Highlights (unaudited)Table 1A

 

   As of and for the Three Months Ended   As of and for the
Nine Months Ended		 
(dollars in thousands except per share amounts)  September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		   September 30,
2026		   September 30,
2025		 
Selected Operating Data:                                   
Interest and Dividend Income  $31,433   $30,154   $29,463   $29,958   $30,021   $91,050   $91,645 
Interest Expense   8,946    8,639    8,985    9,148    9,799    26,570    32,025 
Net Interest Income   22,487    21,515    20,478    20,810    20,222    64,480    59,620 
Provision for Credit Losses   348    399    122    463    -    869    - 
Net Interest Income After Provision for Credit Losses   22,139    21,116    20,356    20,347    20,222    63,611    59,620 
Noninterest Income   2,699    2,650    2,591    2,667    2,626    7,941    7,293 
Noninterest Expense   11,001    10,872    11,087    10,623    10,552    32,960    31,859 
Income Before Income Taxes   13,837    12,894    11,860    12,391    12,296    38,591    35,054 
Provision for Income Taxes   2,969    2,678    2,326    2,224    2,829    7,973    7,997 
Net Income   10,868    10,216    9,534    10,167    9,467    30,618    27,057 
Add: Non-recurring Expense Net of Taxes   -    -    470    -    -    470    231 
Core Net Income (1)   10,868    10,216    10,004    10,167    9,467    31,088    27,288 

 

(1)Considered non-GAAP financial measure - See “Non-GAAP Financial Measures” and reconciliation of non-GAAP financial measures at Table 10

 

3

 

Financial Highlights (unaudited)

 

   As of and for the Three Months Ended   As of and for the
Nine Months Ended		 
   September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		   September 30,
2026		   September 30,
2025		 
Share and Per Share Data:                            
Basic earnings per share  $0.79   $0.75   $0.70   $0.74   $0.77   $2.23   $2.22 
Diluted earnings per share  $0.79   $0.74   $0.70   $0.74   $0.77   $2.23   $2.22 
Core (net of any one-time adjustments) net income per share (1) diluted  $0.79   $0.74   $0.73   $0.74   $0.77   $2.27   $2.24 
Book value per share  $22.71   $22.09   $21.43   $20.83   $20.03   $22.71   $20.03 
Tangible book value per share (1)  $21.92   $21.28   $20.60   $19.98   $19.05   $21.92   $19.05 
Shares of common stock outstanding   13,710,195    13,701,270    13,697,987    13,697,987    12,239,644    13,710,195    12,239,644 
Weighted average common shares outstanding   13,701,368    13,700,296    13,697,987    13,697,987    12,239,644    13,699,901    12,205,817 
Weighted average diluted shares outstanding   13,720,149    13,722,727    13,712,162    13,704,030    12,240,568    13,718,682    12,206,128 

 

(1)Considered non-GAAP financial measure - See “Non-GAAP Financial Measures” and reconciliation of non-GAAP financial measures at Table 10

 

4

 

Financial Highlights (unaudited)

 

   As of and for the Three Months Ended   As of and for the
Nine Months Ended		 
(dollars in thousands)  September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		   September 30,
2026		   September 30,
2025		 
Selected Balance Sheet Data:                            
Total assets  $2,442,326   $2,376,584   $2,328,789   $2,291,455   $2,214,408   $2,442,326   $2,214,408 
Securities available-for-sale at fair value   37,072    38,553    42,175    43,137    29,556    37,072    29,556 
Securities held-to-maturity, at carrying value, net of allowance for credit losses   96,875    94,343    96,387    97,728    131,915    96,875    131,915 
Loans outstanding net of deferred fees and discounts   1,983,326    1,940,536    1,892,174    1,873,533    1,767,193    1,983,326    1,767,193 
Allowance for credit losses   19,029    18,722    18,329    18,096    17,942    19,029    17,942 
Goodwill and other intangible assets   11,629    12,012    12,392    12,767    13,149    11,629    13,149 
Total deposits   1,887,395    1,873,172    1,892,217    1,815,734    1,780,634    1,887,395    1,780,634 
Core deposits (1)   1,731,907    1,709,887    1,744,967    1,663,931    1,630,897    1,731,907    1,630,897 
Other borrowings   211,325    175,817    118,248    166,838    162,760    211,325    162,760 
Total Shareholders’ equity   311,307    302,618    293,518    285,344    245,153    311,307    245,153 

 

(1)Considered non-GAAP financial measure - See “Non-GAAP Financial Measures” and reconciliation of non-GAAP financial measures at Table 10

 

5

 

Financial Highlights (unaudited)

 

   As of and for the Three Months Ended   As of and for the
Nine Months Ended		 
   September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		   September 30,
2026		   September 30,
2025		 
Balance Sheet and Capital Ratios (Commercial Bancgroup, Inc.):                            
Loan-to-deposit ratio   104.07%   102.60%   99.03%   102.19%   98.24%   104.07%   98.24%
Noninterest bearing deposits to total deposits   21.63%   22.87%   21.22%   21.91%   22.39%   21.63%   22.39%
Total shareholders’ equity to total assets   12.75%   12.73%   12.60%   12.45%   11.07%   12.75%   11.07%
Tangible common equity to tangible assets (1)   12.36%   12.33%   12.18%   12.01%   10.59%   12.36%   10.59%
Tier 1 risk-based ratio Common equity tier 1 ratio   14.69%   14.55%   14.73%   14.99%   12.83%   14.69%   12.83%
Total risk-based capital ratio   15.61%   15.48%   15.68%   15.96%   14.12%   15.61%   14.12%
Other                                   
Number of branches   34    34    34    34    34    34    34 
Number of full-time equivalent employees   292    293    287    287    287    292    287 

 

(1)Considered non-GAAP financial measure - See “Non-GAAP Financial Measures” and reconciliation of non-GAAP financial measures at Table 10

 

6

 

Financial Highlights (unaudited) Table 1B

 

   As of and for the Three Months Ended   As of and for the
Nine Months Ended		 
(dollars in thousands)  September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		   September 30,
2026		   September 30,
2025		 
Performance Ratios:                            
Pre-tax pre-provision net income (PPNI) (1)  $14,185   $13,293   $11,982   $12,854   $12,296   $39,461   $35,054 
Return on average assets (ROAA)   1.84    1.78    1.66    1.81    1.74    1.76    1.61 
Return on average equity (ROAE)   14.16    13.73    13.22    15.65    15.81    13.71    15.75 
Core return on average assets (ROAA)(1)   1.84    1.78    1.74    1.81    1.74    1.79    1.63 
Core Return on average equity (ROAE)(1)   14.16    13.73    13.87    15.65    15.81    13.92    15.88 
Return on average tangible common equity (ROATCE) (1)   14.68    14.26    13.76    16.40    16.65    14.25    16.62 
Core return on average tangible common equity (ROATCE) (1)   14.68    14.26    14.44    16.40    16.65    14.46    16.77 
Net interest rate spread   3.50    3.44    3.27    3.34    3.32    3.39    3.14 
Net interest margin   4.14    4.06    3.88    4.01    4.02    4.03    3.82 
Cost of Total Funding   1.77    1.75    1.82    1.88    2.07    1.78    2.17 
Efficiency ratio   43.68    44.99    48.06    45.25    46.18    45.51    47.61 
CORE efficiency ratio (1)   43.68    44.99    45.45    45.25    46.18    44.68    47.15 
Noninterest income to average assets   0.46    0.46    0.45    0.47    0.48    0.46    0.43 
Noninterest expense to average assets   1.87    1.89    1.93    1.89    1.94    1.90    1.90 
Average interest-earning assets to                                   
average interest-bearing liabilities   1.38    1.38    1.36    1.38    1.36    1.38    1.33 
Average equity to average total assets   0.13    0.13    0.13    0.12    0.11    0.13    0.10 

 

(1)Considered non-GAAP financial measure - See “Non-GAAP Financial Measures” and reconciliation of non-GAAP financial measures at Table 10

 

Financial Highlights (unaudited)

 

   As of and for the Three Months Ended   As of and for the
Nine Months Ended		 
   September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		   September 30,
2026		   September 30,
2025		 
Asset Quality Data:                            
Net charge-offs to average loans   0.00%   0.00%   0.01%   0.01%   0.00%   0.00%   0.01%
Total allowance for credit losses to total loans   0.96%   0.96%   0.97%   0.97%   1.02%   0.96%   1.02%
Total allowance for credit losses to nonperforming loans   285%   281%   313%   290%   333%   285%   333%
Nonperforming loans to gross loans   0.34%   0.34%   0.31%   0.33%   0.31%   0.34%   0.31%
Nonperforming assets to total assets   0.31%   0.31%   0.28%   0.28%   0.27%   0.31%   0.27%

 

 

7

 

Quarter End Balance Sheets (unaudited) Table 2

 

(dollars in thousands)  September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		 
Assets                    
Cash and due from banks  $174,916   $161,327   $151,610   $118,989   $122,945 
Federal funds sold   7,663    8,787    16,784    25,329    31,841 
Investment securities   133,947    132,896    138,562    140,865    161,471 
Gross loans less deferred fees and discounts   1,983,326    1,940,536    1,892,174    1,873,533    1,767,193 
Allowance for credit losses   (19,029)   (18,722)   (18,329)   (18,096)   (17,942)
Loans, net of allowance for credit losses   1,964,297    1,921,813    1,873,845    1,855,437    1,749,251 
Premises and equipment, net   50,907    50,145    49,445    49,765    50,268 
Foreclosed assets held for sale, net   888    755    575    253    533 
Bank owned life insurance   46,954    46,619    46,469    46,648    46,482 
Goodwill and other intangible assets   11,629    12,012    12,392    12,767    13,149 
Deferred tax asset   1,190    1,076    1,056    1,003    1,427 
Other   49,935    41,153    38,049    40,399    37,041 
Total Assets  $2,442,326   $2,376,584   $2,328,789   $2,291,455   $2,214,408 
                          
Liabilities and Shareholders’ Equity                         
Liabilities                         
Deposits                         
Demand   975,548    942,633    973,678    913,986    928,958 
Savings, NOW and money market   407,028    413,904    415,132    414,716    382,002 
Time   504,819    516,635    503,408    487,032    469,674 
Total deposits   1,887,395    1,873,172    1,892,217    1,815,734    1,780,634 
Short-term borrowings   142,422    102,570    45,068    88,251    62,663 
Long-term debt   68,903    73,247    73,181    78,587    100,097 
Interest Payable   2,505    2,575    2,644    2,962    3,410 
Other Liabilities   29,794    22,402    22,161    20,576    22,451 
Total Liabilities   2,131,019    2,073,966    2,035,271    2,006,110    1,969,255 
                          
Shareholders’ Equity                         
Common stock   137    137    137    137    122 
Additional paid-in capital   38,681    38,683    38,536    38,377    8,406 
Retained earnings   273,739    264,515    255,670    247,505    237,366 
Accumulated other comprehensive loss   (1,250)   (717)   (825)   (675)   (741)
Total Shareholders’ equity   311,307    302,618    293,518    285,344    245,153 
Total liabilities and shareholders’ equity  $2,442,326   $2,376,584   $2,328,789   $2,291,454   $2,214,408 

 

8

 

Statement of Operations (unaudited)                          Table 3
                             
   As of and for the Three Months Ended   As of and for the
Nine Months Ended		 
(dollars in thousands)  September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		   September 30,
2026		   September 30,
2025		 
Interest and Dividend Income                            
Loans, including fees  $29,605   $28,396   $27,675   $27,866   $28,074   $85,676   $84,436 
Debt securities-taxable   829    832    838    739    929    2,499    2,974 
Debt securities-tax-exempt   105    109    114    114    102    328    328 
Dividends on restricted stock   131    151    147    157    156    429    464 
Interest-bearing deposits   763    666    689    1,082    760    2,118    3,444 
Total interest and dividend income   31,433    30,154    29,463    29,958    30,021    91,050    91,646 
                                    
Interest expense                                   
Deposits   8,355    8,032    8,315    8,441    8,654    24,702    28,665 
Short-term borrowings   46    40    47    18    55    133    130 
Long-term debt   545    567    623    689    1,090    1,735    3,230 
                                    
Total interest expense   8,946    8,639    8,985    9,148    9,799    26,570    32,025 
Net interest income   22,487    21,515    20,478    20,810    20,222    64,480    59,620 
                                    
Provision for credit losses   348    399    122    463    -    869    - 
Net interest income after provision for credit losses   22,139    21,116    20,356    20,347    20,222    63,611    59,620 
                                    
Noninterest Income                                   
Customer service fees   778    774    781    779    735    2,334    2,064 
Net gains on sales of premises and equipment   -    30    -    44    20    30    25 
Net gains on sales of foreclosed assets   -    -    107    48    110    107    113 
ATM fees   985    977    854    877    846    2,816    2,537 
Increase in BOLI   461    315    312    342    306    1,088    950 
Other   475    554    537    577    609    1,566    1,604 
                                    
Total noninterest income   2,699    2,650    2,591    2,667    2,626    7,941    7,293 

 

9

 

Statement of Operations (unaudited)                          Table 3
                             
   As of and for the Three Months Ended   As of and for the
Nine Months Ended		 
(dollars in thousands)  September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		   September 30,
2026		   September 30,
2025		 
Noninterest Expense                            
Salaries and employee benefits  $5,988   $5,683   $5,716   $5,753   $5,729   $17,387   $17,012 
Occupancy   843    856    843    877    738    2,542    2,529 
Data processing   1,136    1,099    1,101    1,068    1,103    3,336    3,461 
Deposit insurance premiums   259    202    242    234    267    703    738 
Professional fees   131    440    209    229    136    780    617 
Depreciation and amortization   992    942    933    1,001    955    2,867    2,706 
Other   1,652    1,650    1,440    1,461    1,624    4,742    4,795 
Loss on retirement of debt   -    -    603    -    -    603    - 
                                    
Total noninterest expense   11,001    10,872    11,087    10,623    10,552    32,960    31,858 
                                    
Income before income taxes   13,837    12,894    11,860    12,391    12,296    38,592    35,054 
Provision for income taxes   2,969    2,678    2,326    2,224    2,829    7,973    7,997 
Net Income   10,868    10,216    9,534    10,167    9,467    30,619    27,057 
Less: Net Income Attributable to Noncontrolling Interest   -    -    -    -    -    -    - 
Net Income attributable to Commercial Bancgroup, Inc.  $10,868   $10,216   $9,534   $10,167   $9,467   $30,619   $27,057 

 

10

 

QTD Average Balances and Yields/Rates (unaudited)  Table 4
     
   Three Months Ended 
(dollars in thousands)  September 30, 2026   June 30, 2026   March 31, 2026 
   Average
Balance		   Interest   Yield/
Rate		   Average
Balance		   Interest   Yield/
Rate		   Average
Balance		   Interest   Yield/
Rate		 
Interest Earning Assets                                    
Gross loans, net of unearned income  $1,948,090   $29,605    6.1%  $1,902,119   $28,396    6.0%  $1,883,103   $27,675    5.9%
Investment securities   132,441    1,065    3.2%   138,726    1,092    3.1%   140,223    1,099    3.1%
Other interest-earning assets   93,800    763    3.3%   77,015    666    3.5%   85,953    689    3.2%
Total interest-earning assets   2,174,331    31,433    5.8%   2,117,860    30,154    5.7%   2,109,279    29,463    5.6%
Noninterest-earning assets:                                             
Allowance for credit losses   (18,892)             (18,497)             (18,283)          
Noninterest-earning assets   202,006              202,388              205,119           
Total Assets   2,357,445              2,301,751              2,296,115           
                                              
Interest-bearing liabilities:                                             
Interest-bearing DDAs   567,717    2,853    2.0%   540,531    2,501    1.9%   575,981    2,809    2.0%
NOW, savings and MMDA deposits   409,530    1,367    1.3%   417,468    1,415    1.4%   412,533    1,425    1.4%
Time Deposits   517,679    4,135    3.2%   494,379    4,116    3.3%   479,804    4,081    3.4%
Federal Home Loan bank advances   58,424    431    3.0%   60,270    452    3.0%   60,522    467    3.1%
Other borrowings   17,395    160    3.7%   18,050    155    3.4%   20,355    203    4.0%
Total interest-bearing liabilities   1,570,745    8,946    2.3%   1,530,698    8,639    2.3%   1,549,195    8,985    2.3%
Noninterest bearing liabilities:                                             
Noninterest bearing deposits   446,743              444,701              430,842           
Other liabilities   33,029              28,723              27,593           
Total noninterest bearing liabilities   479,772              473,424              458,435           
Shareholders’ equity   306,929              297,631              288,485           
Total liabilities and shareholders’ equity   2,357,446              2,301,753              2,296,115           
Net interest income        22,487              21,515              20,478      
Net interest rate spread             3.50%             3.44%             3.27%
Net interest margin             4.14%             4.06%             3.88%
Cost of total deposits             1.72%             1.69%             1.75%
Cost of total funding             1.77%             1.75%             1.82%

 

11

 

YTD Average Balances and Yields/Rates (unaudited)              Table 5
                 
   Nine Months Ended 
   September 30, 2026   September 30, 2025 
(dollars in thousands)  Average
Balance		   Interest   Yield/ Rate   Average
Balance		   Interest   Yield/ Rate 
                         
Interest Earning Assets                        
Gross loans, net of unearned income   1,911,104    85,676    6.0%   1,786,357    84,435    6.3%
Investment securities   137,130    3,256    3.2%   180,975    3,766    2.8%
Other interest-earning assets   85,589    2,118    3.3%   111,265    3,444    4.1%
Total interest-earning assets   2,133,823    91,050    5.7%   2,078,597    91,645    5.9%
Noninterest-earning assets:                              
Allowance for credit losses   (18,557)             (18,151)          
Noninterest-earning assets   203,171              175,750           
Total Assets   2,318,437              2,236,196           
                               
Interest-bearing liabilities:                              
Interest-bearing DDAs   561,410    8,163    1.9%   538,268    9,083    2.2%
NOW, savings and MMDA deposits   413,177    4,207    1.4%   385,694    4,318    1.5%
Time Deposits   497,287    12,332    3.3%   533,863    15,264    3.8%
Federal Home Loan bank advances   59,739    1,350    3.0%   62,965    1,334    2.8%
Other borrowings   18,600    518    3.7%   45,160    2,026    6.0%
Total interest-bearing liabilities   1,550,213    26,570    2.3%   1,565,950    32,025    2.7%

 

12

 

Loan Data (unaudited)                                  Table 6
                                     
   As of Quarter Ended 
   September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		 
(dollars in thousands)  Amount   % of
Total		   Amount   % of
Total		   Amount   % of
Total		   Amount   % of
Total		   Amount   % of
Total		 
Real Estate Loans                                        
Commercial  $1,182,947    59%  $1,140,480    59%  $1,114,516    59%  $1,113,440    59%  $1,002,192    57%
Construction and land development   197,644    10%   201,781    10%   195,189    10%   176,688    9%   201,399    11%
Residential   386,584    20%   387,142    20%   383,346    20%   377,943    20%   376,769    21%
Other   18,108    1%   18,336    1%   14,511    1%   14,824    1%   14,831    1%
Commercial   184,715    9%   179,935    9%   171,029    9%   174,248    9%   154,732    9%
Consumer and other   19,326    1%   19,535    1%   19,497    1%   22,867    1%   23,651    1%
Total loans   1,989,324    100%   1,947,209    100%   1,898,088    100%   1,880,010    100%   1,773,574    100%
Deferred loan fees and discounts   5,998         6,673         5,914         6,477         6,381      
Allowance for credit                                                  
Losses   19,029         18,722         18,329         18,096         17,942      
Loans, net   1,964,297         1,921,813         1,873,845         1,855,437         1,749,251      

 

13

 

Nonperforming Assets (unaudited)  Table 7
     
   As of the Quarter Ended 
(dollars in thousands)  September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		 
                     
Nonaccrual loans  $6,686   $6,661   $5,861   $6,245   $5,390 
Past due loans 90 days and still accruing   -    -    -    -    - 
Total nonperforming loans   6,686    6,661    5,861    6,245    5,390 
Other real estate owned   888    755    575    253    533 
Total nonperforming assets  $7,574   $7,416   $6,436   $6,498   $5,923 
                          
Allowance for credit losses  $19,029   $18,722   $18,329   $18,096   $17,942 
Total loans outstanding at end of period net of deferred loan fees and discounts  $1,983,326   $1,940,536   $1,892,174   $1,873,533   $1,767,193 
                          
Nonperforming loans to total loans   0.34%   0.34%   0.31%   0.33%   0.31%
Nonperforming assets to total loans and OREO   0.38%   0.38%   0.34%   0.35%   0.34%
Allowance for credit losses to nonperforming loans   285%   281%   313%   290%   333%
Allowance for credit losses to total loans   0.96%   0.96%   0.97%   0.97%   1.02%
Nonaccrual loans to total assets   0.27%   0.28%   0.25%   0.27%   0.24%
Nonperforming assets to total assets   0.31%   0.31%   0.28%   0.28%   0.27%

 

14

 

Allowance for credit losses (unaudited)          Table 8
             
   As of and for the Three Months Ended   As of and for the
Nine Months Ended		 
(dollars in thousands)  September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		   September 30,
2026		   September 30,
2025		 
                             
Average loans outstanding  $1,948,090   $1,902,119   $1,883,103   $1,807,127   $1,767,379   $1,911,104   $1,786,357 
Total loans outstanding at end of period net of deferred loan fees and discounts   1,983,326    1,940,536    1,892,174    1,873,533    1,767,193    1,983,326    1,767,193 
ACL balance, beginning of period   18,722    18,329    18,096    17,942    17,989    18,096    18,205 
Charge-offs:                                   
Commercial real estate   -    -    -    (284)   -    -    (18)
Construction and land development   -    -    -    -    -    -    - 
Residential real estate   -    -    -    -    -    -    (121)
Commercial   (30)   -    -    (48)   -    (30)   (314)
Consumer and other   (22)   (18)   (15)   (13)   (186)   (55)   (237)
Total charge-offs   (52)   (18)   (15)   (345)   (186)   (85)   (690)
                                    
Recoveries:                                   
Commercial real estate   -    -    114    -    108    114    151 
Construction and land development   -    -    -    -    -    -    202 
Residential real estate   -    1    -    20    26    1    44 
Commercial   1    1    1    7    1    3    4 
Consumer and other   10    5    11    56    4    26    26 
Total recoveries   11    7    126    83    139    144    427 
                                    
Net (charge-offs) recoveries   (41)   (11)   111    (262)   (47)   59    (263)
Provision for credit losses   348    404    122    416    -    874    - 
ACL balance at end of period  $19,029   $18,722   $18,329   $18,096   $17,942   $19,029   $17,942 
Ratio of allowance to end of period loans   0.96%   0.96%   0.97%   0.97%   1.02%   0.96%   1.02%
Ratio of net (charge-offs) recoveries to average loans   0.00%   0.00%   0.01%   -0.01%   0.00%   0.00%   -0.01%

 

15

 

Loan Risk Ratings (unaudited)  Table 9
     
   As of the Quarter Ended 
(dollars in thousands)  September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		 
Real Estate Loans                    
Commercial                    
Pass  $1,166,346   $1,131,324   $1,105,529   $1,104,532   $999,788 
Special mention   15,963    8,835    8,897    8,814    1,776 
Substandard   638    321    90    94    628 
Total Commercial  $1,182,947   $1,140,480   $1,114,516   $1,113,440   $1,002,192 
Construction and land development                         
Pass  $197,201   $201,389   $194,983   $176,014   $201,363 
Special mention   412    359    171    78    - 
Substandard   31    32    35    596    36 
Total Construction and land development  $197,644   $201,781   $195,189   $176,688   $201,399 
Residential                         
Pass  $379,876   $380,157   $377,179   $371,583   $371,226 
Special mention   624    631    545    833    838 
Substandard   6,084    6,354    5,622    5,527    4,705 
Total Residential  $386,584   $387,142   $383,346   $377,943   $376,769 
Other                         
Pass  $18,108   $18,336   $14,511   $14,824   $14,831 
Special mention   -    -    -    -    - 
Substandard   -    -    -    -    - 
Total Other  $18,108   $18,336   $14,511   $14,824   $14,831 
Commercial                         
Pass  $183,830   $179,002   $170,093   $173,324   $153,819 
Special mention   666    685    701    793    733 
Substandard   220    248    235    131    180 
Total Commercial  $184,715   $179,934   $171,029   $174,248   $154,732 
Consumer and Other                         
Pass  $19,218   $19,423   $19,399   $22,768   $23,616 
Special mention   30    34    44    21    5 
Substandard   77    78    54    79    30 
Total Consumer  $19,326   $19,535   $19,497   $22,868   $23,651 
Total loans                         
Pass  $1,964,579   $1,929,632   $1,881,694   $1,863,045   $1,764,643 
Special mention   17,695    10,543    10,358    10,539    3,352 
Substandard   7,050    7,034    6,036    6,427    5,579 
Total Gross loans  $1,989,324   $1,947,209   $1,898,088   $1,880,011   $1,773,574 

 

16

 

Non-GAAP Financial Measures

 

This press release contains certain financial measures that are not financial measures recognized under generally accepted accounting principles in the U.S. (“GAAP”) and, therefore, are considered non-GAAP financial measures and should be read along with the accompanying reconciliation of non-GAAP financial measures to GAAP financial measures. We use non-GAAP financial measures, certain of which are included in this press release, both to explain our operating results to shareholders and the investment community and to evaluate, analyze, and manage our business. We believe that these non-GAAP financial measures provide a better understanding of ongoing operations, enhance the comparability of results across periods, and enable investors to better understand our performance. Our management believes that the “core” metrics described below and used in this press release assist users of the Company’s financial statements with their financial analysis period-over-period as they exclude certain non-recurring items. However, non-GAAP financial measures should not be considered in isolation and should be considered supplemental in nature and not as a substitute for or superior to the most directly comparable or other financial measures calculated in accordance with GAAP. Additionally, the manner in which the non-GAAP financial measures contained in this press release are calculated may differ from the manner in which measures with similar names are calculated by other companies. You should understand how other companies calculate their financial measures similar to, or with names similar to, the non-GAAP financial measures contained in this press release when comparing such financial measures.

 

The non-GAAP financial measures in this press release include the following:

 

●Core deposits. We calculate core deposits by excluding jumbo time deposits (deposits greater than $250,000) and brokered deposits from total deposits.

 

●Core net income. We define core net income as net income plus non-recurring expenses, net of the related tax effect of non-recurring expenses.

 

●Core net income per share diluted. We define core net income per share diluted as core net income divided by weighted average diluted common shares outstanding.

 

●Core ROAA. We define core ROAA as core net income divided by average assets, with average assets based upon the average daily balance of total assets in each period.

 

●Core ROAE. We define core ROAE as core net income divided by average shareholders’ equity, with average shareholders’ equity based upon the average daily balance of total shareholders’ equity in each period.

 

●Core ROATCE. We define core ROATCE as core net income divided by total average shareholders’ equity less average intangible assets (goodwill and core deposit intangibles) net of tax impact.

 

●Pre-tax pre-provision net income (PPNI). We define pre-tax pre-provision net income as pre-tax net income plus provision for credit losses.

 

●Core efficiency ratio. We define core efficiency ratio as noninterest expenses (less non-recurring expenses), divided by operating revenue (net interest income plus total noninterest income). This ratio is an indicator used by our management to assess operating efficiencies and is intended to demonstrate how efficiently our management is controlling expenses relative to generating revenues on our core activities.

 

●Pre-tax, pre-provision ROAA. We define pre-tax, pre-provision ROAA as pre-tax, pre-provision net income divided by average assets calculated based upon the average daily balance of total assets in each period.

 

●Tangible assets. We define tangible assets as total assets less goodwill and other intangible assets.

 

●ROATCE. We define ROATCE as net income divided by total average shareholders’ equity less average intangible assets (goodwill and core deposit intangibles) net of tax impact.

 

●Tangible book value per share. We define tangible book value per share as our tangible common equity, which is shareholders’ equity reduced by goodwill and other intangible assets, divided by total shares outstanding.

 

●Tangible common equity to tangible assets. We define tangible common equity to tangible assets as tangible common equity divided by tangible assets calculated as total assets net of intangible assets.

 

17

 

The following table provides a reconciliation of the above non-GAAP financial measures to their most directly comparable financial measure presented in accordance with GAAP.

 

Non-GAAP Reconciliations (unaudited)          Table 10
             
   As of and for the Three Months Ended   As of and for the
Nine Months Ended		 
(dollars in thousands, except per share data)  September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		   September 30,
2026		   September 30,
2025		 
                             
Pre-Tax Pre-Provision Net Income:                            
Pre-tax income  $13,837   $12,894   $11,860   $12,391   $12,296   $38,592   $35,054 
Add: provision for credit losses   348    399    122    463    -    869    - 
Pre-tax pre-provision net income  $14,185   $13,293   $11,982   $12,854   $12,296   $39,461   $35,054 
Tangible Common Equity:                                   
Shareholders’ equity  $311,307   $302,618   $293,518   $285,344   $245,153    311,307    245,153 
Less: noncontrolling interest                                 - 
Less: goodwill   8,511    8,511    8,511    8,511    8,511    8,511    8,511 
Less: core deposit intangible (net of tax benefit)   2,310    2,594    2,875    3,164    3,448    2,310    3,448 
Tangible common equity  $300,486   $291,513   $282,132   $273,669   $233,194   $300,486   $233,194 
Pre-Tax Pre-Provision Return on Average Assets:                                   
Total average assets  $2,357,445   $2,301,752   $2,296,115   $2,249,282   $2,170,869   $2,318,437   $2,236,196 
Pre-tax pre-provision net income   14,185    13,293    11,982    12,854    12,296    39,461    35,054 
Pre-tax pre-provision return on average assets   2.41%   2.31%   2.09%   2.29%   2.27%   2.27%   2.09%
Return on Average Tangible Common Equity:                                   
Total average shareholders’ equity  $306,929   $297,631   $288,485   $259,784   $239,473   $297,681   $229,099 
Less: average intangible assets (net of tax benefit)   10,821    11,105    11,386    11,767    11,980   $11,104   $12,096 
Less: average non controlling interest   -    -    -    -    -    -    - 
Average common tangible equity   296,108    286,526    277,099    248,017    227,493    286,577    217,003 
Net income to shareholders   10,868    10,216    9,534    10,167    9,467    30,619    27,057 
Return on average common tangible equity   14.68%   14.26%   13.76%   16.40%   16.65%   14.25%   16.62%

 

18

 

Non-GAAP Reconciliations (unaudited)            
   As of and for the Three Months Ended   As of and for the
Nine Months Ended		 
(dollars in thousands, except per share data)  September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		   September 30,
2026		   September 30,
2025		 
Tangible Book Value per Share:                            
Tangible common equity  $300,486   $291,513   $282,132   $273,669   $233,194   $300,486   $233,194 
Shares of common stock outstanding   13,710,195    13,701,270    13,697,987    13,697,987    12,239,644    13,710,195    12,239,644 
Tangible book value per share, reported  $21.92   $21.28   $20.60   $19.98   $19.05   $21.92   $19.05 
Tangible Common Equity to Tangible Assets:                                   
Tangible common equity  $300,486   $291,513   $282,132   $273,669   $233,194   $300,486   $233,194 
Total assets   2,442,326    2,376,584    2,328,789    2,291,455    2,214,408    2,442,326    2,214,408 
Less: intangible assets   11,629    12,012    12,392    12,767    13,149    11,629    13,149 
Tangible assets   2,430,697    2,364,572    2,316,397    2,278,688    2,201,258    2,430,697    2,201,258 
Tangible common equity to tangible assets   12.36%   12.33%   12.18%   12.01%   10.59%   12.36%   10.59%
Core Deposits:                                   
Total Deposits  $1,887,395   $1,873,172   $1,892,217   $1,815,734   $1,780,634   $1,887,395    1,780,634 
Less: Time deposits greater than $250,000   108,213    107,910    105,717    103,833    101,767    108,213    101,767 
Less: Brokered deposits   47,275    55,375    41,533    47,970    47,970    47,275    47,970 
Core deposits  $1,731,907   $1,709,887   $1,744,967   $1,663,931   $1,630,897   $1,731,907   $1,630,897 
Core Net Income:                                   
Net income  $10,868   $10,216   $9,534   $10,167   $9,467   $30,619   $27,057 
Add: Non-recurring Expense   -    -    603    -    -    603    309 
Less: tax effect   -    -    (133)   -    -    (133)   (78)
Core net income  $10,868   $10,216   $10,004   $10,167   $9,467   $31,088    27,288 
Core Net Income per Share:                                   
Core net income  $10,868   $10,216   $10,004   $10,167   $9,467   $31,088   $27,288 
Weighted average common shares outstanding   13,720,149    13,722,727    13,712,162    13,704,030    12,240,568    13,718,682    12,206,128 
Core net income per share diluted  $0.79   $0.74   $0.73   $0.74   $0.77   $2.27   $2.24 

 

19

 

Non-GAAP Reconciliations (unaudited)            
   As of and for the Three Months Ended   As of and for the
Nine Months Ended		 
(dollars in thousands, except per share data)  September 30,
2026		   June 30,
2026		   March 31,
2026		   December 31,
2025		   September 30,
2025		   September 30,
2026		   September 30,
2025		 
Core Return on Average Assets:                            
Core net income  $10,868   $10,216   $10,004   $10,167   $9,467   $31,088   $27,288 
Average assets   2,357,445    2,301,752    2,296,115    2,249,282    2,170,869    2,318,437    2,236,196 
Core return on average assets   1.84%   1.78%   1.74%   1.81%   1.74%   1.79%   1.63%
Core Return on Average Common Equity:                                   
Total average shareholders’ equity  $306,929   $297,631   $288,485   $259,784   $239,473   $297,681   $229,099 
Core net income  $10,868   $10,216   $10,004   $10,167   $9,467   $31,088   $27,288 
Core return on average common equity   14.16%   13.73%   13.87%   15.65%   15.81%   13.92%   15.88%
Core Return on Average Tangible Common Equity:                                   
Average tangible common equity  $296,108   $286,526   $277,099   $248,017   $227,493   $286,577   $217,003 
Core net income   10,868    10,216    10,004    10,167    9,467    31,088    27,288 
Core return on average tangible common equity   14.68%   14.26%   14.44%   16.40%   16.65%   14.46%   16.77%
Core Efficiency Ratio:                                   
Net interest income  $22,487   $21,515   $20,478   $20,810   $20,222   $64,480   $59,620 
Noninterest income   2,699    2,650    2,591    2,667    2,626    7,941    7,293 
Operating revenue  $25,186   $24,165   $23,069   $23,477   $22,848   $72,421    66,913 
Total noninterest expenses   11,001    10,872    11,087    10,623    10,552    32,960    31,858 
Less: non-recurring expenses   -    -    603    -    -    603    309 
Core noninterest expenses   11,001    10,872    10,484    10,623    10,552    32,357    31,549 
Core efficiency ratio   43.68%   44.99%   45.45%   45.25%   46.18%   44.68%   47.15%
Efficiency ratio   43.68%   44.99%   48.06%   45.25%   46.18%   45.51%   47.61%

 

Contacts

 

Philip J. Metheny
Sr. Executive Vice President, Chief Financial Officer
Commercial Bancgroup, Inc.
ir@cbtn.com
423-869-5151

 

Roger Mobley
Executive Vice President, Chief Financial Officer
Commercial Bank
ir@cbtn.com
704-648-0185

 

Source

 

Commercial Bancgroup, Inc.

 

20