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

Commercial Bancgroup, Inc. Announces Results for the Second Quarter 2026 Commercial Bancgroup, Inc. ("Commercial" or the "Company") (NASDAQ:CBK), the parent company of Commercial Bank (the "Bank"), today announced net income of $10.2 million, or $0.75 per common share, for the second quarter of 2026, compared to net income of $8.9 million, or $0.73 per common share, for the second quarter of 2025. Core (net of any one-time adjustments) net income was $10.2 million, or $0.75 per common share, for the second quarter of 2026, compared to core net income of $9.1 million, or $0.75 per common share, for the second 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 our common stock (the "Stock Split"). Our financial statements, including earnings per share and book value per share, reflect the stock Reclassification and Stock Split retroactively. Because the IPO occurred after September 30, 2025, the financial impacts of the IPO are reflected for the fourth quarter of 2025 in the financial statements presented in this press release. Second Quarter 2026 Performance Highlights: Net income of $10.2 million or $0.75 per common share; Core net income of $10.2 million or $0.75 per common share (see non-GAAP reconciliation) Return on average assets ("ROAA") of 1.78%; Core ROAA of 1.78% (see non-GAAP reconciliation) Return on average equity ("ROAE") of 13.73%; Core ROAE of 13.73% (see non-GAAP reconciliation) Return on average tangible common equity ("ROATCE") of 14.26%; Core ROATCE of 14.26% (see non-GAAP reconciliation) Net interest margin of 4.06%, an increase of 18 basis points from the first quarter of 2026 Core efficiency ratio of 44.99% (see non-GAAP reconciliation) Loans outstanding net of deferred fees and discounts increased $48.4 million during the quarter, or 2.6% from the first quarter of 2026 Book value per share increased $0.66, or 3.1%, to $22.09 and tangible book value per share increased $0.68, or 3.3%, to $21.28 at June 30, 2026 from $21.43 and $20.60, respectively, at March 31, 2026 (see non-GAAP reconciliation) Net charge-offs to average loans of 0.00% and nonperforming assets to total assets of 0.31% Year-To-Date Highlights: Net income of $19.8 million or $1.44 per common share for the six months ended June 30, 2026, compared to $17.6 million or $1.44 per common share for the six months ended June 30, 2025 ROAA of 1.72% for the six months ended June 30, 2026, compared to 1.55% for the six months ended June 30, 2025 ROAE of 13.48% for the six months ended June 30, 2026, compared to 15.71% for the six months ended June 30, 2025 Total operating revenue of $47.2 million for the six months ended June 30, 2026, compared to $44.1 million for the six months ended June 30, 2025 Non-interest expense of $22.0 million for the six months ended June 30, 2026, compared to $21.3 million for the six months ended June 30, 2025 Book value per share of $22.09 as of June 30, 2026, compared to $19.22 as of June 30, 2025 Tangible book value per share of $21.28 as of June 30, 2026, compared to $18.22 as of June 30, 2025 (see non-GAAP reconciliation) Core efficiency ratio of 45.2% for the six months ended June 30, 2026, compared to 47.7% for the six months ended June 30, 2025 (see non-GAAP reconciliation) Balance Sheet Trends Total assets were $2.4 billion as of June 30, 2026, compared to $2.3 billion as of June 30, 2025. Loans outstanding net of deferred fees and discounts were $1.9 billion as of June 30, 2026, an increase of $149.0 million, or 8.3%, from June 30, 2025. As of June 30, 2026, the Bank exceeded the minimum requirements to be well-capitalized for bank regulatory purposes, with a total risk-based capital ratio of 14.0%, a Tier 1 risk-based capital ratio of 13.0%, a common equity Tier 1 capital ratio of 13.0%, and a Tier 1 leverage ratio of 11.6%. Total deposits were $1.9 billion as of June 30, 2026, an increase of $21.9 million, or 1.2%, from June 30, 2025. Noninterest bearing demand deposits increased $12.7 million, or 3.0%, to $428.4 million as of June 30, 2026, from $415.7 million as of June 30, 2025. Non-brokered deposits were $1.8 billion as of June 30, 2026, an increase of $91.8 million, or 5.3%, from June 30, 2025. This increase was primarily driven by normal customer business cycles and deposit growth. Asset quality declined slightly with nonperforming assets to total assets of 0.31% as of June 30, 2026 as compared to 0.30% as of June 30, 2025. The allowance for credit losses to total loans decreased to 0.96% as of June 30, 2026 from 1.00% as of June 30, 2025. Net Income Before Income Taxes Net income before income taxes was $12.9 million for the three months ended June 30, 2026, an increase of $1.3 million, or 11.6%, from the three months ended June 30, 2025. The increase was primarily the result of an increase in net interest income after provision for credit losses of $1.1 million or 5.3% and an increase in non-interest income of $0.4 million or 19.2%. These increases were offset by an increase of noninterest expense of $0.1 million or 1.4%. Non-Interest Income Non-interest income was $2.7 million for the three months ended June 30, 2026, an increase of $0.4 million, or 19.2%, as compared to the three months ended June 30, 2025. This increase was primarily due to an increase in customer service and ATM fees. 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. Commercial Bancgroup, Inc. Financial Tables Financial Highlights (Unaudited) Table 1A For the Three Months Ended As of and for the Six Months Ended (dollars in thousands except per share amounts) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Selected Operating Data: Interest and Dividend Income $ 30,154 $ 29,463 $ 29,958 $ 30,021 $ 30,859 $ 59,617 $ 61,625 Interest Expense 8,639 8,985 9,148 9,799 10,800 17,624 22,226 Net Interest Income 21,515 20,478 20,810 20,222 20,059 41,993 39,399 Provision for Credit Losses 399 122 463 - - 521 - Net Interest Income After Provision for Credit Losses 21,116 20,356 20,347 20,222 20,059 41,472 39,399 Noninterest Income 2,650 2,591 2,667 2,626 2,224 5,241 4,667 Noninterest Expense 10,872 11,087 10,623 10,552 10,725 21,959 21,306 Income Before Income Taxes 12,894 11,860 12,391 12,296 11,558 24,754 22,760 Provision for Income Taxes 2,678 2,326 2,224 2,829 2,658 5,004 5,168 Net Income 10,216 9,534 10,167 9,467 8,900 19,750 17,592 Less: Net Income Attributable to Noncontrolling Interest - - - - - - - Net Income attributable to Commercial Bancgroup, Inc. 10,216 9,534 10,167 9,467 8,900 19,750 17,592 Add: Non-recurring Expense Net of Taxes - 470 - - 226 470 231 Core Net Income (1) 10,216 10,004 10,167 9,467 9,126 20,220 17,823 (1) Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of non-GAAP financial measures at table 10 Financial Highlights (Unaudited) For the Three Months Ended As of and for the Six Months Ended June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Share and Per Share Data: Basic earnings per share $ 0.75 $ 0.70 $ 0.74 $ 0.77 $ 0.73 $ 1.44 $ 1.44 Diluted earnings per share $ 0.74 $ 0.70 $ 0.74 $ 0.77 $ 0.73 $ 1.44 $ 1.44 Core (net of any one-time adjustments) net income per share (1) $ 0.75 $ 0.73 $ 0.74 $ 0.77 $ 0.75 $ 1.48 $ 1.46 Book value per share $ 22.09 $ 21.43 $ 20.83 $ 20.03 $ 19.22 $ 22.09 $ 19.22 Tangible book value per share (1) $ 21.28 $ 20.60 $ 19.98 $ 19.05 $ 18.22 $ 21.28 $ 18.22 Shares of common stock outstanding 13,701,270 13,697,987 13,697,987 12,239,644 12,239,644 13,701,270 12,239,644 Weighted average common shares outstanding 13,700,296 13,697,987 13,697,987 12,239,644 12,239,644 13,699,148 12,188,624 Weighted average diluted shares outstanding 13,722,727 13,712,162 13,704,030 12,240,568 12,239,644 13,721,579 12,188,624 (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 Six Months Ended (dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Selected Balance Sheet Data: Total assets $ 2,376,584 $ 2,328,789 $ 2,291,455 $ 2,214,408 $ 2,262,511 $ 2,376,584 $ 2,262,511 Securities available-for-sale at fair value 38,553 42,175 43,137 29,556 30,113 38,553 30,113 Securities held-to-maturity, at carrying value, net of allowance for credit losses 94,343 96,387 97,728 131,915 157,452 94,343 157,452 Loans outstanding net of deferred fees and discounts 1,940,536 1,892,174 1,873,533 1,767,193 1,791,516 1,940,536 1,791,516 Allowance for credit losses 18,722 18,329 18,096 17,942 17,989 18,722 17,989 Goodwill and other intangible assets 12,012 12,392 12,767 13,149 13,546 12,012 13,546 Total deposits 1,873,172 1,892,217 1,815,734 1,780,634 1,851,248 1,873,172 1,851,248 Core deposits (1) 1,709,887 1,744,967 1,663,931 1,630,897 1,628,181 1,709,887 1,628,181 Other borrowings 175,817 118,248 166,838 162,760 148,509 175,817 148,509 Total Shareholders' equity 302,618 293,518 285,344 245,153 235,268 302,618 235,268 (1) Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of non-GAAP financial measures at table 10 Financial Highlights (unaudited) Table 1B As of and for the Three Months Ended As of and for the Six Months Ended (dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Performance Ratios: Pre-tax pre-provision net income (PPNI) (1) $ 13,293 $ 11,982 $ 12,854 $ 12,296 $ 11,558 $ 25,275 $ 22,760 Return on average assets (ROAA) 1.78 1.66 1.81 1.74 1.57 1.72 1.55 Return on average equity (ROAE) 13.73 13.22 15.46 15.81 15.57 13.48 15.71 Core return on average assets (ROAA)(1) 1.78 1.74 1.81 1.74 1.62 1.76 1.57 Return on average tangible common equity (ROATCE) (1) equity (ROATCE) (1) 14.26 13.76 16.40 16.65 16.43 14.02 16.94 Net interest rate spread 3.44 3.27 3.34 3.32 3.11 3.35 3.07 Net interest margin 4.06 3.88 4.01 4.02 3.84 3.97 3.73 Cost of Funds 1.75 1.82 1.88 2.07 2.18 1.78 2.21 Efficiency ratio 44.99 48.06 45.25 46.18 48.13 46.49 48.35 CORE efficiency ratio (1) 44.99 45.45 45.25 46.18 46.78 45.21 47.65 Noninterest income to average assets 0.46 0.45 0.47 0.48 0.39 0.46 0.41 Noninterest expense to average assets 1.89 1.93 1.87 1.94 1.91 1.91 1.88 Average interest-earning assets to average interest-bearing liabilities 1.38 1.36 1.38 1.36 1.31 1.37 1.31 Average equity to average total assets 0.13 0.13 0.12 0.11 0.10 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 Six Months Ended June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Asset Quality Data: Net charge-offs to average loans 0.00 % 0.01 % 0.01 % 0.00 % 0.01 % -0.01 % 0.01 % Total allowance for credit losses to total loans 0.96 % 0.97 % 0.97 % 1.02 % 1.00 % 0.96 % 1.00 % Total allowance for credit losses to nonperforming loans 281 % 313 % 290 % 333 % 307 % 281 % 307 % Nonperforming loans to gross loans 0.34 % 0.31 % 0.33 % 0.31 % 0.33 % 0.34 % 0.33 % Nonperforming assets to total assets 0.31 % 0.28 % 0.28 % 0.27 % 0.30 % 0.31 % 0.30 % Financial Highlights (Unaudited) As of and for the Three Months Ended As of and for the Six Months Ended June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Balance Sheet and Capital Ratios (Commercial Bancgroup, Inc.): Loan-to-deposit ratio 102.60 % 99.03 % 102.19 % 98.24 % 95.80 % 102.60 % 95.80 % Noninterest bearing deposits to total deposits 22.87 % 21.22 % 21.91 % 22.39 % 22.53 % 22.87 % 22.53 % Total shareholders' equity to total assets 12.73 % 12.60 % 12.45 % 11.07 % 10.40 % 12.73 % 10.40 % Tangible common equity to tangible assets (1) 12.33 % 12.18 % 12.01 % 10.59 % 9.92 % 12.33 % 9.92 % Tier 1 leverage ratio 12.70 % 12.32 % 12.19 % 11.03 % 10.22 % 12.70 % 10.22 % Common equity tier 1 ratio 14.55 % 14.73 % 14.99 % 12.83 % 12.26 % 14.55 % 12.26 % Total risk-based capital ratio 15.48 % 15.68 % 15.96 % 14.12 % 13.55 % 15.48 % 13.55 % Other Number of branches 34 34 34 34 34 34 34 Number of full-time equivalent employees 293 287 287 287 289 293 289 (1) Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of non-GAAP financial measures at table 10 Quarter End Balance Sheets (unaudited) Table 2 (dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Assets Cash and due from banks $ 161,327 $ 151,610 $ 118,989 $ 122,945 $ 108,501 Federal funds sold 8,787 16,784 25,329 31,841 42,782 Investment securities 132,896 138,562 140,865 161,471 187,565 Gross loans less deferred fees and discounts 1,940,536 1,892,174 1,873,533 1,767,193 1,791,516 Allowance for credit losses (18,722 ) (18,329 ) (18,096 ) (17,942 ) (17,989 ) Loans, net of allowance for credit losses 1,921,813 1,873,845 1,855,437 1,749,251 1,773,527 Premises and equipment, net 50,145 49,445 49,765 50,268 50,337 Foreclosed assets held for sale, net 755 575 253 533 861 Bank owned life insurance 46,619 46,469 46,648 46,482 46,480 Goodwill and other intangible assets 12,012 12,392 12,767 13,149 13,546 Deferred tax asset 1,076 1,056 1,003 1,427 1,029 Other 41,153 38,049 40,399 37,041 37,883 Total Assets $ 2,376,584 $ 2,328,789 $ 2,291,455 $ 2,214,408 $ 2,262,511 Liabilities and Shareholders' Equity Liabilities Deposits Demand 942,633 973,678 913,986 928,958 926,886 Savings, NOW and money market 413,904 415,132 414,716 382,002 382,788 Time 516,635 503,408 487,032 469,674 541,574 Total deposits 1,873,172 1,892,217 1,815,734 1,780,634 1,851,248 Short-term borrowings 102,570 45,068 88,251 62,663 46,300 Long-term debt 73,247 73,181 78,587 100,097 102,209 Interest Payable 2,575 2,644 2,962 3,410 4,545 Other Liabilities 22,402 22,161 20,576 22,451 22,941 Total Liabilities 2,073,966 2,035,271 2,006,110 1,969,255 2,027,243 Shareholders' Equity Common stock 137 137 137 122 122 Additional paid-in capital 38,683 38,536 38,377 8,406 8,406 Retained earnings 264,515 255,670 247,505 237,366 227,900 Accumulated other comprehensive loss (717 ) (825 ) (675 ) (741 ) (1,160 ) Total Shareholders' equity 302,618 293,518 285,344 245,153 235,268 Total liabilities and shareholders' equity $ 2,376,584 $ 2,328,789 $ 2,291,454 $ 2,214,408 $ 2,262,511 Statement of Operations (unaudited) Table 3 For the Three Months Ended As of and for the Six Months Ended (dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Interest and Dividend Income Loans, including fees $ 28,396 $ 27,675 $ 27,866 $ 28,074 $ 28,432 $ 56,071 $ 56,362 Debt securities-taxable 832 838 739 929 1,070 1,670 2,045 Debt securities-tax-exempt 109 114 114 102 116 223 226 Dividends on restricted stock 151 147 157 156 148 298 308 Interest-bearing deposits 666 689 1,082 760 1,093 1,355 2,684 Total interest and dividend income 30,154 29,463 29,958 30,021 30,859 59,617 61,625 Interest expense Deposits 8,032 8,315 8,441 8,654 9,717 16,347 20,011 Short-term borrowings 40 47 18 55 44 87 75 Long-term debt 567 623 689 1,090 1,039 1,190 2,140 Total interest expense 8,639 8,985 9,148 9,799 10,800 17,624 22,226 Net interest income 21,515 20,478 20,810 20,222 20,059 41,993 39,399 Provision for credit losses 399 122 463 - - 521 - Net interest income after provision for credit losses 21,116 20,356 20,347 20,222 20,059 41,472 39,399 Noninterest Income Customer service fees 774 781 779 735 674 1,555 1,329 Net gains on sales of premises and equipment 30 - 44 20 32 30 4 Net gains on sales of foreclosed assets - 107 48 110 - 107 3 ATM fees 977 854 877 846 892 1,831 1,691 Increase in BOLI 315 312 342 306 336 627 644 Other 554 537 577 609 290 1,091 996 Total noninterest income 2,650 2,591 2,667 2,626 2,224 5,241 4,667 Noninterest Expense Salaries and employee benefits $ 5,683 $ 5,716 $ 5,753 $ 5,729 $ 5,657 $ 11,399 $ 11,283 Occupancy 856 843 877 738 916 1,699 1,791 Data processing 1,099 1,101 1,068 1,103 1,151 2,200 2,358 Deposit insurance premiums 202 242 234 267 245 444 471 Professional fees 440 209 229 136 286 649 481 Depreciation and amortization 942 933 1,001 955 803 1,875 1,751 Other 1,650 1,440 1,461 1,624 1,667 3,090 3,171 Loss on retirement of debt - 603 - - - 603 - Total noninterest expense 10,872 11,087 10,623 10,552 10,725 21,959 21,306 Income before income taxes 12,894 11,860 12,391 12,296 11,558 24,754 22,760 Provision for income taxes 2,678 2,326 2,224 2,829 2,658 5,004 5,168 Net Income 10,216 9,534 10,167 9,467 8,900 19,750 17,592 Less: Net Income Attributable to Noncontrolling Interest - - - - - - - Net Income attributable to Commercial Bancgroup, Inc. $ 10,216 $ 9,534 $ 10,167 $ 9,467 $ 8,900 $ 19,750 $ 17,592 QTD Average Balances and Yields/Rates (unaudited) Table 4 Three Months Ended (dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025 Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate Interest Earning Assets Gross loans, net of unearned income $ 1,902,119 $ 28,396 6.0 % $ 1,883,103 $ 27,675 5.9 % $ 1,807,127 $ 27,866 6.2 % Investment securities 138,726 1,092 3.1 % 140,223 1,099 3.1 % 152,782 1,010 2.6 % Other interest-earning assets 77,015 666 3.5 % 85,953 689 3.2 % 116,517 1,082 3.7 % Total interest-earning assets 2,117,860 30,154 5.7 % 2,109,279 29,463 5.6 % 2,076,426 29,958 5.8 % Noninterest-earning assets: Allowance for credit losses (18,497 ) (18,283 ) (17,954 ) Noninterest-earning assets 202,388 205,119 190,810 Total Assets 2,301,751 2,296,115 2,249,282 Interest-bearing liabilities: Interest-bearing DDAs 540,531 2,501 1.9 % 575,981 2,809 2.0 % 518,495 2,647 2.0 % NOW, savings and MMDA deposits 417,468 1,415 1.4 % 412,533 1,425 1.4 % 427,419 1,585 1.5 % Time Deposits 494,379 4,116 3.3 % 479,804 4,081 3.4 % 475,972 4,209 3.5 % Federal Home Loan bank advances 60,270 452 3.0 % 60,522 467 3.1 % 60,781 444 2.9 % Other borrowings 18,050 155 3.4 % 20,355 203 4.0 % 24,953 263 4.2 % Total interest-bearing liabilities 1,530,698 8,639 2.3 % 1,549,195 8,985 2.3 % 1,507,620 9,148 2.4 % Noninterest bearing liabilities: Noninterest bearing deposits 444,701 430,842 434,578 Other liabilities 28,723 27,593 47,299 Total noninterest bearing liabilities 473,424 458,435 481,877 Shareholders' equity 297,631 288,485 259,785 Total liabilities and shareholders's equity 2,301,753 2,296,115 2,249,282 Net interest income 21,515 20,478 20,810 Net interest spread 3.44 % 3.27 % 3.40 % Net interest margin 4.06 % 3.88 % 4.01 % Cost interest bearing deposits 1.69 % 1.75 % 1.82 % Cost of funds 1.75 % 1.82 % 1.88 % YTD Average Balances and Yields/Rates (unaudited) Table 5 Six Months Ended June 30, 2026 June 30, 2025 (dollars in thousands) Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate Interest Earning Assets Gross loans, net of unearned income 1,892,611 56,071 5.9 % 1,795,846 56,362 6.3 % Investment securities 139,475 2,191 3.1 % 186,623 2,579 2.8 % Other interest-earning assets 81,484 1,355 3.3 % 128,525 2,684 4.2 % Total interest-earning assets 2,113,570 59,617 5.6 % 2,110,994 61,625 5.8 % Noninterest-earning assets: Allowance for credit losses (18,390 ) (18,242 ) Noninterest-earning assets 203,754 176,107 Total Assets 2,298,934 2,268,859 Interest-bearing liabilities: Interest-bearing DDAs 558,256 5,310 1.9 % 552,539 6,277 2.3 % NOW, savings and MMDA deposits 415,001 2,840 1.4 % 388,331 2,922 1.5 % Time Deposits 487,092 8,197 3.4 % 557,517 10,813 3.9 % Federal Home Loan bank advances 60,396 919 3.0 % 63,534 74 0.2 % Other borrowings 19,203 358 3.7 % 44,774 2,140 9.6 % Total interest-bearing liabilities 1,539,948 17,624 2.3 % 1,606,695 22,226 2.8 % Noninterest bearing liabilities: Noninterest bearing deposits 437,772 401,935 Other liabilities 28,158 36,319 Total noninterest bearing liabilities 465,930 438,254 Shareholders' equity 293,058 223,912 Total liabilities and shareholders's equity 2,298,936 2,268,861 Net interest income 41,993 39,399 Net interest spread 3.35 % 3.07 % Net interest margin 3.97 % 3.73 % Cost of total deposits 1.72 % 2.11 % Cost of total funding 1.78 % 2.21 % Loan Data (unaudited) Table 6 As of Quarter Ended June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 (dollars in thousands) Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total Real Estate Loans Commercial $ 1,140,480 59 % $ 1,114,516 59 % $ 1,113,440 59 % $ 1,002,192 57 % $ 1,016,229 57 % Construction and land development 201,781 10 % 195,189 10 % 176,688 9 % 201,399 11 % 189,187 11 % Residential 387,142 20 % 383,346 20 % 377,943 20 % 376,769 21 % 376,442 21 % Other 18,336 1 % 14,511 1 % 14,824 1 % 14,831 1 % 15,290 1 % Commercial 179,935 9 % 171,029 9 % 174,248 9 % 154,732 9 % 178,832 10 % Consumer and other 19,535 1 % 19,497 1 % 22,867 1 % 23,651 1 % 22,408 1 % Total loans 1,947,209 100 % 1,898,088 100 % 1,880,010 100 % 1,773,574 100 % 1,798,388 100 % Deferred loan fees and discounts 6,673 5,914 6,477 6,381 6,872 Allowance for credit Losses 18,722 18,329 18,096 17,942 17,989 Loans, net 1,921,813 1,873,845 1,855,437 1,749,251 1,773,527 Nonperforming Assets (Unaudited) Table 7 As of the Quarter Ended (dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Nonaccrual loans $ 6,661 $ 5,861 $ 6,245 $ 5,390 $ 5,846 Past due loans 90 days and still accruing - - - - 6 Total nonperforming loans 6,661 5,861 6,245 5,390 5,852 Other real estate owned 755 575 253 533 861 Total nonperforming assets $ 7,416 $ 6,436 $ 6,498 $ 5,923 $ 6,713 Allowance for credit losses $ 18,722 $ 18,329 $ 18,096 $ 17,942 $ 17,989 Total loans outstanding at end of period net of deferred loan fees and discounts $ 1,940,536 $ 1,892,174 $ 1,873,533 $ 1,767,193 $ 1,791,516 Nonperforming loans to total loans 0.34 % 0.31 % 0.33 % 0.31 % 0.33 % Nonperforming assets to total loans and OREO 0.38 % 0.34 % 0.35 % 0.34 % 0.37 % Allowance for credit losses to nonperforming loans 281 % 313 % 290 % 333 % 307 % Allowance for credit losses to total loans 0.96 % 0.97 % 0.97 % 1.02 % 1.00 % Nonaccrual loans to total assets 0.28 % 0.25 % 0.27 % 0.24 % 0.26 % Nonperforming assets to total assets 0.31 % 0.28 % 0.28 % 0.27 % 0.30 % Allowance for credit losses (unaudited) Table 8 As of and for the Three Months Ended As of and for the Six Months Ended (dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Average loans outstanding $ 1,902,136 $ 1,883,103 $ 1,807,127 $ 1,767,379 $ 1,794,477 $ 1,892,611 $ 1,795,846 Total loans outstanding at end of period net of deferred loan fees and discounts 1,940,536 1,892,174 1,873,533 1,767,193 1,791,516 1,940,536 1,791,516 ACL balance, beginning of period 18,329 18,096 17,942 17,989 18,109 18,096 18,205 Charge-offs: Commercial real estate - - (284 ) - (18 ) - (18 ) Construction and land development - - - - - - - Residential real estate - - - - (121 ) - (121 ) Commercial - - (48 ) - - - (314 ) Consumer and other (18 ) (15 ) (13 ) (186 ) (34 ) (33 ) (51 ) Total charge-offs (18 ) (15 ) (345 ) (186 ) (173 ) (33 ) (504 ) Recoveries: Commercial real estate - 114 - 108 33 114 43 Construction and land - development - - - - - - 202 Residential real estate 1 - 20 26 2 1 18 Commercial 1 1 7 1 3 2 3 Consumer and other 5 11 56 4 15 16 22 Total recoveries 7 126 83 139 53 133 288 Net (charge-offs) recoveries (11 ) 111 (262 ) (47 ) (120 ) 100 (216 ) Provision for credit losses 404 122 416 - - 526 - ACL balance at end of period $ 18,722 $ 18,329 $ 18,096 $ 17,942 $ 17,989 $ 18,722 $ 17,989 Ratio of allowance to end of period loans 0.96 % 0.97 % 0.97 % 1.02 % 1.00 % 0.96 % 1.00 % Ratio of net (charge-offs) recoveries to average loans 0.00 % 0.01 % -0.01 % 0.00 % -0.01 % 0.01 % -0.01 % Loan Risk Ratings (Unaudited) Table 9 As of the Quarter Ended (dollars in thousands) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Real Estate Loans Commercial Pass $ 1,131,324 $ 1,105,529 $ 1,104,532 $ 999,788 $ 1,012,190 Special mention 8,835 8,897 8,814 1,776 2,515 Substandard 321 90 94 628 1,524 Total Commercial $ 1,140,480 $ 1,114,516 $ 1,113,440 $ 1,002,192 $ 1,016,229 Construction and land development Pass $ 201,389 $ 194,983 $ 176,014 $ 201,363 $ 189,149 Special mention 359 171 78 - - Substandard 32 35 596 36 38 Total Construction and land development $ 201,781 $ 195,189 $ 176,688 $ 201,399 $ 189,187 Residential Pass $ 380,157 $ 377,179 $ 371,583 $ 371,226 $ 371,353 Special mention 631 545 833 838 849 Substandard 6,354 5,622 5,527 4,705 4,240 Total Residential $ 387,142 $ 383,346 $ 377,943 $ 376,769 $ 376,442 Other Pass $ 18,336 $ 14,511 $ 14,824 $ 14,831 $ 15,290 Special mention - - - - - Substandard - - - - - Total Other $ 18,336 $ 14,511 $ 14,824 $ 14,831 $ 15,290 Commercial Pass $ 179,002 $ 170,093 $ 173,324 $ 153,819 $ 177,969 Special mention 685 701 793 733 747 Substandard 248 235 131 180 116 Total Commercial $ 179,934 $ 171,029 $ 174,248 $ 154,732 $ 178,832 Consumer and Other Pass $ 19,423 $ 19,399 $ 22,768 $ 23,616 $ 22,367 Special mention 34 44 21 5 6 Substandard 78 54 79 30 36 Total Consumer $ 19,535 $ 19,497 $ 22,868 $ 23,651 $ 22,409 Total loans Pass $ 1,929,632 $ 1,881,694 $ 1,863,045 $ 1,764,643 $ 1,788,318 Special mention 10,543 10,358 10,539 3,352 4,117 Substandard 7,034 6,036 6,427 5,579 5,954 Total Gross loans $ 1,947,209 $ 1,898,088 $ 1,880,011 $ 1,773,574 $ 1,798,389 Non-GAAP Financial Measures This press release contains certain financial measure(s) that are not financial measure(s) recognized under generally accepted accounting principles in the U.S. ("GAAP") and, therefore, are considered non-GAAP financial measure(s) and should be read along with the accompanying reconciliation of non-GAAP financial measure(s) to GAAP financial measure(s). 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 measure(s) 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 measure(s) 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 or equal to $250,000) 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. We define core net income per share as core net income divided by weighted average 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 return on average tangible common equity. We define core return on average tangible common equity as core net income divided by total average shareholders' equity less average intangible assets (goodwill and core deposit intangibles). Pre-tax pre-provision net income. We define pre-tax pre-provision net income as pre-tax net income plus provision for loan and lease losses. Core efficiency ratio. We define core efficiency ratio as noninterest expenses (less non-recurring expenses), divided by operating revenue (net interest 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 year. Tangible assets. We define tangible assets as total assets less goodwill and other intangible assets. Return on average tangible common equity ROATCE. We define return on average tangible common equity ROATC as net income divided by average common equity calculated based as total average shareholders' equity less average intangible assets net of tax benefit. 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 diluted weighted average 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 based as total assets net of intangible assets. 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) As of and for the Three Months Ended As of and for the Six Months Ended (dollars in thousands, except per share data) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Pre-Tax Pre-Provision Net Income: Pre-tax income $ 12,894 $ 11,860 $ 12,391 $ 12,296 $ 11,558 $ 24,754 $ 22,760 Add: provision for loan and lease losses 399 122 463 - - 521 - Pre-tax pre-provision net income $ 13,293 $ 11,982 $ 12,854 $ 12,296 $ 11,558 $ 25,275 $ 22,760 Tangible Common Equity: Shareholders' equity $ 302,618 $ 293,518 $ 285,344 $ 245,153 $ 235,268 302,618 235,268 Less: non controlling 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) 2,594 2,875 3,164 3,448 3,744 2,594 3,744 Tangible common equity $ 291,513 $ 282,132 $ 273,669 $ 233,194 $ 223,013 $ 291,513 $ 223,013 Return on Average Tangible Common Equity: Total average shareholders' equity $ 297,631 $ 288,485 $ 259,784 $ 239,473 $ 227,883 $ 293,058 $ 223,912 Less: average intangible assets (net of tax benefit) 11,105 11,386 11,767 11,980 11,997 $ 11,245 13,497 Less: average non controlling interest - - - - - - 2,701 Average common tangible equity 286,526 277,099 248,017 227,493 215,886 281,813 207,714 Net income to shareholders 10,216 9,534 10,167 9,467 8,900 19,750 17,592 Return on average common tangible equity 14.26 % 13.76 % 16.40 % 16.65 % 16.49 % 14.02 % 16.94 % Tangible Book Value per Share: Tangible common equity $ 291,513 $ 282,132 $ 273,669 $ 233,194 $ 223,013 $ 291,513 $ 223,013 Shares of common stock outstanding (weighted average) 13,700,296 13,697,987 13,697,987 12,239,644 12,239,644 13,699,148 12,188,624 Tangible book value per share, reported $ 21.28 $ 20.60 $ 19.98 $ 19.05 $ 18.22 $ 21.28 $ 18.22 As of and for the Three Months Ended As of and for the Six Months Ended (dollars in thousands, except per share data) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 June 30, 2026 June 30, 2025 Tangible Common Equity to Tangible Assets: Tangible common equity $ 291,513 $ 282,132 $ 273,669 $ 233,194 $ 223,013 $ 291,513 $ 223,013 Total assets 2,376,584 2,328,789 2,291,455 2,214,408 2,262,511 2,376,584 2,262,511 Less: intangible assets 12,012 12,392 12,767 13,149 13,546 12,012 13,546 Tangible assets 2,364,572 2,316,397 2,278,688 2,201,258 2,248,965 2,364,572 2,248,965 Tangible common equity to tangible assets 12.33 % 12.18 % 12.01 % 10.59 % 9.92 % 12.33 % 9.92 % Core Deposits: Total Deposits $ 1,873,172 $ 1,892,217 $ 1,815,734 $ 1,780,634 $ 1,851,248 $ 1,873,172 1,851,248 Less: Time deposits greater than $250,000 107,910 105,717 103,833 101,767 97,844 107,910 97,844 Less: Brokered deposits 55,375 41,533 47,970 47,970 125,223 55,375 125,223 Core deposits $ 1,709,887 $ 1,744,967 $ 1,663,931 $ 1,630,897 $ 1,628,181 $ 1,709,887 $ 1,628,181 Core Net Income: Net income $ 10,216 $ 9,534 $ 10,167 $ 9,467 $ 8,900 $ 19,750 $ 17,592 Add: Non-recurring Expense - 603 - - 302 603 309 Less: tax effect - (133 ) - - (76 ) (133 ) (78 ) Core net income $ 10,216 $ 10,004 $ 10,167 $ 9,467 $ 9,126 $ 20,220 17,823 Core Net Income per Share: Core net income $ 10,216 $ 10,004 $ 10,167 $ 9,467 $ 9,126 $ 20,220 $ 17,823 Weighted average common shares outstanding 13,700,296 13,697,987 13,697,987 12,239,644 12,239,644 13,699,148 12,188,624 Core net income per share $ 0.75 $ 0.73 $ 0.74 $ 0.77 $ 0.75 $ 1.48 $ 1.46 Core Return on Average Assets: Core net income $ 10,216 $ 10,004 $ 10,167 $ 9,467 $ 9,126 $ 20,220 $ 17,823 Average assets 2,301,752 2,296,115 2,249,282 2,170,869 2,248,134 2,298,934 2,268,859 Core return on average assets 1.78 % 1.74 % 1.81 % 1.74 % 1.62 % 1.76 % 1.57 % Core Return on Average Tangible Common Equity: Average tangible common equity $ 286,526 $ 277,099 $ 248,017 $ 227,493 $ 215,886 $ 281,813 $ 207,714 Core net income 10,216 10,004 10,167 9,467 9,126 20,220 17,823 Core return on average tangible common equity 14.26 % 14.44 % 16.40 % 16.65 % 16.91 % 14.35 % 17.16 % Core Efficiency Ratio: Add: net interest income $ 21,515 $ 20,478 $ 20,810 $ 20,222 $ 20,059 $ 41,993 $ 39,399 Add: non interest income 2,650 2,591 2,667 2,626 2,224 5,241 4,667 Operating revenue $ 24,165 $ 23,069 $ 23,477 $ 22,848 $ 22,283 $ 47,234 44,066 Total noninterest expenses 10,872 11,087 10,623 10,552 10,725 21,959 21,306 Less: non-recurring expenses - 603 - - 302 603 309 Core noninterest expenses 10,872 10,484 10,623 10,552 10,423 21,356 20,997 Core efficiency ratio 44.99 % 45.45 % 45.25 % 46.18 % 46.78 % 45.21 % 47.65 % Efficiency ratio 44.99 % 48.06 % 45.25 % 46.18 % 48.13 % 46.49 % 48.35 % Contacts: Philip J. Metheny Sr. Executive Vice President, Chief Financial Officer Commercial Bancgroup, Inc. [email protected] 423-869-5151 Roger Mobley Executive Vice President, Chief Financial Officer Commercial Bank [email protected] 704-648-0185 SOURCE: Commercial Bancgroup, Inc. View the original press release on ACCESS Newswire