Operator
Thank you for standing by. At this time, I would like to welcome everyone to the Commercial Bank Group third quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Terry Lee, President and CEO. You may begin.
Good morning. Thank you for joining us today for our first earnings call as we successfully completed our public company offering on September the 30th, 25, the last day of the third quarter. I'm Terry Lee, President and CEO, and with me today is Adam Robertson, Chairman, Flip Matheny, our Chief Financial Officer, and Richard Sprinkle, our Chief credit option. Before we begin, I must remind everyone that this call may include forward-looking statements within the meaning of the Private Security Litigation Reform Act 1995. These statements are based on our current expectations and assumptions and are subject to risk and uncertainties that could cause actual results to differ materially from our expectations. For a discussion of these risks and uncertainties, we encourage you to review our full safe harbor statement and cautionary language including our earnings press release and in our latest sec file also during the call today we may discuss certain non-gap measures reconciliation of those measures to the most directly comparable gap measure can be found in our earnings release which is available on our website and filed with the sec we're pleased to report the successful completion of our ipo at cbk became a public company september 30th as mentioned early as each of you are aware the ipo process is an expansive and very time-consuming process that requires a tremendous amount of human resources commitment coupled with a lot of professional guidance and even this time with all this effort directed toward our ipo cpk has produced another impressive financial performance score this performance demonstrates the depth of our many talented members that understand our core mission our values staying focused to produce strong financial results while at the same time working on a once in a lifetime project i would like to just review a few of our financial metrics for the first nine months of 25. Our net income, $27.1 million. That's a 4.9% increase year-to-date. Return on assets, $1.60, 1.9% increase. Return on equity is 15.5%. Slight decrease over 24, an 8.5% decrease. revenue came in at 66.9 million dollars a 1.9 percent increase our expenses actually failed 31.9 million what was eight basis points reduction earnings per share came in at two dollars and 22 cents per share a 6.2 percent increase our tangible book value per share 19 dollars and five cents that's a 14.5 percent increase and our efficiency ratio held strong at 47.6 percent through the first nine months of 25. We experienced moderate loan growth year over year due to headwinds from some large payoffs we experienced the first half of 25. These payoffs were from long-term growers selling their business. The loan portfolio activity remains robust enabling us to keep pace with the loan payoffs we anticipate a strong loan closing volume for the fourth quarter of 25 which will more than offset the payoff volume and provide for a moderate growth for the entire physical year in 2025. The asset quality remains very strong our long delinquencies are at historical goals of one half of one percent and our trouble debt ratio is at 2.19 looking ahead we are confident in our strategy and our direction as we move into the public bank space and with our ability to navigate this new opportunity the public market provides for us to continue to grow our franchise providing long-term value to our shareholders and providing positive experiences for every customer every day. With that, I will now turn the call over to Philip Metheny, our CFO, to provide a more detailed review of our third quarter.
Thank you, Jerry. I would like to highlight our financial metrics for the third quarter 2025 compared to the third quarter 2024. for. Net income for 2025 was 9.5 million compared to 9.2 million for 2024 for a 3.3 percent increase. Revenue, we had 22.5 million for a 4.6 percent increase over the prior year. Our expenses were maintained flat at 10.6 million compared to 10.5 million in the prior year for the third quarter for a just a lighter increase of one percent 30 per share for the third quarter of 2025 was 77 cents a share four percent increase over the prior year tangible book per share was 19.05 a 14.5 percent increase over the prior year Our efficiency ratio remains strong at 46.19% compared to 48.13% a 4% decrease from the prior year. ROA for the third quarter 2025 was 1.69 compared to 1.65 for 2024 a 2.4% increase from the prior year. ROE was 15.7, excuse me, 15.76%, a 9% decrease from the prior year.
This concludes our prepared remarks. I'll ask the operators to open the call for any questions.
Operator
At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. And your first question comes from the line of Brett Rabatton with Havdi Group. Please go ahead.
Wanted to start off just, you know, Terry, we've talked about the loan pipeline being strong, and you said fourth quarter, you expected some solid loan growth. Can you maybe just give us Any idea of the magnitude in 4Q and then just what you're growing and what the outlook is and, you know, maybe what payoffs activity you experienced during 3Q?
We didn't have a lot of payoff experience during the third quarter. I think we had one at the very start that concluded maybe it actually started some of us paid off in the second quarter and finished up in the third quarter. But, you know, I mean, our own activity has been really brisk. You know, our pipeline is really full for quarter closings. We feel confident that we will end the year in a positive where we started last year. One of the things is one of the customers that paid us off, they all, at the end of every year, they drew up a huge line of credit to the tune of about $30 million for distributions to a doctor's group. So as a result of that, every year we would have a huge run-up in our outstandings on loans, and then it worked its way down through the first quarter. We're not going to have that this year, but even not having that, we're still going to end the year positive in loan growth over where we were last year. We won't meet budget, but we'll have a nice loan growth for year-end. That's assuming, of course, the attorneys get everything done, we get everything closed uh in in those types of things but the pipeline looks good and we've got a lot of closings lined up okay great um and i know you guys are slightly asset sensitive you know and the feds possibly going to cut one or two times here um end of the year any thoughts on the margin and in 4q and and just um you know what you guys are seeing on loan and deposit pricing that that might uh either help or hinder the margin well i mean uh yeah we're i think we're more neutral as far as our asset situation right now um you know and we just finished our board report yesterday and we were for the month of september make sure i get my months right here for the month of september we were 405 in our net interest margin so i mean our net interest margin beholding strong you know a quarter basis point we just got so much flexibility in our balance sheet because we're so short we can adjust pretty fast to any any rates be it up or down we just got a lot of flexibility i think again if you look at our historical trends in earnings that we provided through this ipo process you saw our earnings increase in every rate environment to the extreme that most of us have experienced in our entire lives so uh you know we just got flexibility the way that we manage our balance sheet more to our balance sheets manage more following the loan portfolio uh and to do that we kind of match things up with the loan portfolio and that gives us you know that keeps our spread pretty good so you if i'm telling what our spread is going to be it's going to be 375 so it's a 380 as standard but now it's you know it's a little bit over four so i don't anticipate that changing at all deposit pricing uh no we're probably like probably like every other banker we we feel like we probably pay uh more for some cds than we should but we're paying like 385 i think right now is the highest CD we've got. But it's only for seven or nine months. So again, keeping that pricing really short in an environment that we're going to see decrease. And I think we're just in a good spot right now from a balance sheet perspective to react to whatever we need to do and maintain our earnings going forward.
Okay, that's helpful. And then maybe the last one I wanted to ask was just around M&A and you know we saw an acquisition in West Tennessee yesterday was just curious I know you're excited about the environment for possibly adding additional bank size scale to your franchise just any thoughts on how you see the the M&A climate environment for you and and you know I know you're looking at deals but just any any thoughts on what you're seeing out there you know again i really think it's good uh you know i've been able to attend a few meetings where ceos are at and just general conversation it's just a positive buzz for us uh you know i
think everybody's now will begin to recognize us as is kind of the only buyer that's in the marketplace uh for that half a billion to 750 million dollar size bank uh we've got a ton of relationships uh already built throughout the state uh you know i've got a network of ceos that i talk with constantly uh getting a lot of very positive feedback for the opportunities that even they see even the ones not interested in selling right now uh that they see that we've got available to us, and there are several that we're kind of looking a little bit at now, nothing that I can announce officially or seriously, but we never stop looking, and we never stop asking. So, you know, that's the key to it, is don't ever stop looking and don't ever stop asking, and sometimes ones that you don't even anticipate show up on your doorstep.
Okay. That's really helpful, and congrats on the strong profitability in the quarter.
We're really happy with it. again if you would like to ask a question press star then the number one on your telephone keypad there are no further questions at this time i will now turn the call back over to adam robertson chairman of the board for closing remarks on behalf of the board of directors i'd like to thank you for joining us today and your interest in commercial bank group our focus remains on quality growth maintaining solid asset quality and driving consistent earnings performance even in a challenging rate environment the board remains confident in our management team and pursuing opportunities that enhance shareholder value all while preserving the principles that define our community banking model i look forward to speaking with you again in the next quarter ladies and gentlemen that concludes today's call thank you all for joining you may now disconnect.
