Commercial Bancgroup, Inc. Announces Results for the Fourth Quarter 2025

Commercial Bancgroup, Inc. Announces Results for the Fourth Quarter 2025 Commercial Bancgroup, Inc. ("Commercial" or the "Company") (Nasdaq:CBK), the parent company of Commercial Bank (the "Bank"), today announced net income less non-controlling interest of $9.9 million, or $0.72 per diluted common share, for the fourth quarter of 2025, compared to net income less non-controlling interest of $5.6 million, or $0.46 per diluted common share, for the fourth quarter of 2024. On October 1, 2025, the Company priced its initial public offering (the "IPO") of 7,173,092 shares of its common stock 1,458,343 of which were sold by Commercial and 5,714,758 of which were sold by certain selling shareholders, at a public offering price of $24.00 per share. Prior to September 18, 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. Fourth Quarter 2025 Performance Highlights: Net income of $9.9 million or $0.72 per diluted share Return on average assets ("ROAA") of 1.76% Return on average equity ("ROAE") of 15.26%; Return on average tangible common equity ("ROATCE") of 15.99% Net interest margin of 4.01%, a decrease of 1 basis points from the third quarter of 2025 Efficiency ratio of 45.24% Gross loans increased $106.3 million during the quarter, or 24% annualized, from the third quarter Book value per share increased $0.78, or 16% annualized, to $20.81 and tangible book value per increased $0.91, or 19% annualized, to $19.96 at December 31, 2025 from the third quarter of 2025 Net charge-offs to average loans of 0.014% and Nonperforming assets to total assets of 0.28% Redeemed $20.3 million of holding company debt 2025 highlights: Net income less non-controlling interest of $36.9 million or $2.93 per share and $2.92 per diluted share for the twelve months ended December 31, 2025, compared to $31.4 million or $2.58 per share and $2.54 per diluted share for the twelve months ended December 31, 2024. Return on average assets of 1.61% for the twelve months ended December 31, 2025, compared to 1.40% for the twelve months ended December 31, 2024. Return on average shareholders' equity of 15.60% for the twelve months ended December 31, 2025, compared to 15.30% for the twelve months ended December 31, 2024. Total operating revenue of $90.4 million for the twelve months ended December 31, 2025, compared to $88.5 million for the twelve months ended December 31, 2024. Non-interest expense of $42.5 million for the twelve months ended December 31, 2025, compared to $46.1 million for the twelve months ended December 31, 2024. Tangible book value per share of $19.96 per share as of December 31, 2025, compared to $17.11 per share as of December 31, 2024 (see non-GAAP reconciliation). Efficiency ratio of 47.0% for the twelve months ended December 31, 2025, compared to 48.9% for the twelve months ended December 31, 2024. Balance Sheet Trends Total assets were $2.3 billion as of December 31, 2025, compared to $2.3 billion as of December 31, 2024. This was primarily due to a decrease in the loan portfolio during the first three quarters of the year offset by loan growth during the fourth quarter. Total net loans were $1.9 billion as of December 31, 2025, an increase of $66.9 million, or 3.7%, from December 31, 2024. While the Bank experienced some large loan payoffs from long-term borrowers selling businesses during the year, the Bank had strong loan growth during the fourth quarter. Total net loans increased by $106.5 million or 6.1% from $1.7 billion as of September 30, 2025. As of December 31, 2025, the Bank exceeded the minimum requirements to be well-capitalized for bank regulatory purposes, with a total risk-based capital ratio of 14.1%, a Tier 1 risk-based capital ratio of 13.1%, a common equity Tier 1 capital ratio of 13.1%, and a Tier 1 leverage ratio of 10.8%. Total deposits were $1.8 billion as of December 31, 2025, a decrease of $122.9 million, or 6.3%, from December 31, 2024. This decrease was primarily driven by a $126.9 million reduction in brokered deposits to $48.0 million at December 31, 2025, from $174.9 million at December 31, 2024. Noninterest bearing demand deposits increased $1.2 million, or 0.3%, to $397.8 million as of December 31, 2025, from $396.6 million as of December 31, 2024. Non-brokered deposits were $1.8 billion as of December 31, 2025, an increase of $4.1 million, or 0.2%, from December 31, 2024. This increase was primarily driven by normal customer business cycles. Asset quality decreased slightly with nonperforming assets to total assets of .28% as of December 31, 2025 and compared to .26% as of December 31, 2024. The allowance for credit losses to total loans decreased slightly to 0.95% as of December 31, 2025 from 1.00% as of December 31, 2014. Net Income Before Income Taxes Net income before income taxes was $47.7 million for the twelve months ended December 31, 2025, an increase of $7.2 million, or 17.6%, from the twelve months ended December 31, 2024. The increase was primarily the result of an increase in net interest income after provision for credit losses of $4.5 million or 6.0% and a decrease of noninterest expense of $3.6 million or 7.8%. Non-Interest Income Non-interest income was $9.9 million for the twelve months ended December 31, 2025, a decrease of $0.9 million, or 8.7%, from the twelve months ended December 31, 2024. This decrease was primarily due to one-time gains on the sale of bank property during 2024 of $0.4 million. About Commercial Bancgroup, Inc. Commercial Bancgroup, Inc. is a bank holding company headquartered in Harrogate, Tennessee. Through a wholly owned subsidiary, Commercial Bank, a Tennessee state-chartered bank, the Bank offers 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 As of and for the Three Months Ended As of and for the Twelve Months Ended (dollars in thousands except per share amounts) December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Selected Operating Data: Interest and Dividend Income $ 29,958 $ 30,021 $ 30,859 $ 30,766 $ 31,334 $ 121,604 $ 123,213 Interest Expense 9,148 9,799 10,800 11,426 11,566 41,173 45,629 Net Interest Income 20,810 20,222 20,059 19,340 19,768 80,431 77,584 Provision for Credit Losses 150 - - - 6 150 1,829 Net Interest Income After Provision for Credit Losses 20,660 20,222 20,059 19,340 19,762 80,281 75,755 Noninterest Income 2,666 2,626 2,194 2,443 3,000 9,930 10,878 Noninterest Expense 10,621 10,552 10,725 10,581 13,916 42,480 46,061 Income Before Income Taxes 12,705 12,296 11,528 11,202 8,846 47,731 40,572 Provision for Income Taxes 2,792 2,829 2,658 2,510 3,235 10,789 8,886 Net Income 9,913 9,467 8,870 8,692 5,611 36,942 31,686 Less: Net Income Attributable to Noncontrolling Interest - - - - - - 276 Net Income attributable to Commercial Bancgroup, Inc. 9,913 9,467 8,870 8,692 5,611 36,942 31,410 (1) Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of GAAP to non-GAAP financial measures tables 10A - 10I Commercial Bancgroup, Inc. Financial Tables (Unaudited) Financial Highlights (unaudited) As of and for the Three Months Ended As of and for the Twelve Months Ended December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Share and Per Share Data: Basic earnings per share $ 0.72 $ 0.77 $ 0.72 $ 0.71 $ 0.46 $ 2.93 $ 2.58 Diluted earnings per share $ 0.72 $ 0.77 $ 0.73 $ 0.72 $ 0.46 $ 2.92 $ 2.54 Book value per share $ 20.81 $ 20.03 $ 19.22 $ 18.48 $ 18.18 $ 20.81 $ 18.18 Tangible book value per share (1) $ 19.96 $ 19.05 $ 18.22 $ 17.45 $ 17.11 $ 19.96 $ 17.11 Shares of common stock outstanding 13,697,987 12,239,644 12,239,644 12,239,644 12,113,114 13,697,987 12,113,114 Weighted average diluted shares outstanding 13,835,816 12,188,624 12,137,013 12,137,013 12,301,998 13,835,816 12,367,248 (1) Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of GAAP to non-GAAP financial measures tables 10A - 10I Financial Highlights (unaudited) As of and for the Three Months Ended As of and for the Twelve Months Ended (dollars in thousands) December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Selected Balance Sheet Data: Total assets $ 2,291,112 $ 2,214,408 $ 2,262,511 $ 2,266,878 $ 2,301,211 $ 2,291,112 $ 2,301,211 Securities available-for-sale at fair value 43,137 29,556 30,113 48,830 47,938 43,137 47,938 Securities held-to-maturity, at carrying value, net of allowance for credit losses 97,728 131,915 157,452 140,019 128,217 97,728 128,217 Gross loans less deferred fees and discounts 1,873,533 1,767,193 1,791,516 1,795,178 1,806,997 1,873,533 1,806,997 Allowance for credit losses 17,830 17,942 17,989 18,109 18,205 17,830 18,205 Goodwill and other intangible assets 12,767 13,149 13,546 13,938 14,339 12,767 14,339 Total deposits 1,815,734 1,780,634 1,851,248 1,902,207 1,938,597 1,815,734 1,938,597 Core deposits (1) 1,665,470 1,631,921 1,628,816 1,659,301 1,669,380 1,665,470 1,669,380 Other borrowings 166,838 162,760 148,509 109,090 109,165 166,838 109,165 Total Shareholders' equity 285,090 245,153 235,268 226,180 220,256 285,090 220,256 (1) Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of GAAP to non-GAAP financial measures tables 10 Financial Highlights (unaudited) Table 1B As of and for the Three Months Ended As of and for the Twelve Months Ended (dollars in thousands) December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Performance Ratios Pre-tax Pre-provision net revenue (PPNR) (1) $ 12,855 $ 12,296 $ 11,528 $ 11,202 $ 8,851 $ 47,881 $ 42,401 Return on average assets (ROAA) 1.76 1.69 1.57 1.52 0.99 1.61 1.40 Return on average equity (ROAE) 15.26 15.81 15.57 15.81 10.38 15.60 15.30 Return on average tangible common equity (ROATCE) (1) 15.99 16.65 16.43 16.75 11.03 16.44 16.49 Net interest rate spread 3.34 3.32 3.11 2.98 3.10 3.20 3.05 Net interest margin 4.01 4.02 3.84 3.63 3.77 3.87 3.75 Cost of Funds 1.88 2.07 2.18 2.25 2.31 2.10 2.31 Efficiency ratio 45.24 46.19 48.20 48.57 61.12 47.01 48.92 Noninterest income to average assets 0.47 0.48 0.39 0.43 0.53 0.44 0.49 Noninterest expense to average assets 1.89 1.94 1.91 1.85 2.47 1.90 2.08 Average interest-earning assets to average interest-bearing liabilities 1.38 1.36 1.31 1.30 1.31 1.34 1.32 Average equity to average total assets 0.12 0.11 0.10 0.10 0.09 0.11 0.09 (1) Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of GAAP to non-GAAP financial measures tables 10 Commercial Bancgroup, Inc. Financial Tables (Unaudited) Financial Highlights (unaudited) As of and for the Three Months Ended As of and for the Twelve Months Ended December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Asset Quality Data: Net charge-offs to average loans 0.01 % 0.00 % 0.01 % 0.01 % 0.00 % 0.03 % 0.01 % Total allowance for credit losses to total loans 0.95 1.02 1.00 1.01 1.01 0.95 1.01 Total allowance for credit losses to nonperforming loans 286 % 333 % 307 % 375 % 360 % 286 % 360 % Nonperforming loans to gross loans 0.33 % 0.31 % 0.33 % 0.27 % 0.28 % 0.33 % 0.28 % Nonperforming assets to total assets 0.28 % 0.27 % 0.30 % 0.24 % 0.26 % 0.28 % 0.26 % Commercial Bancgroup, Inc. Financial Tables (Unaudited) Financial Highlights (unaudited) As of and for the Three Months Ended As of and for the Twelve Months Ended December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Balance Sheet and Capital Ratios (Commercial Bancgroup, Inc.) Loan-to-deposit ratio 103.18 % 99.25 % 96.77 % 94.37 % 93.21 % 103.18 % 93.21 % Noninterest bearing deposits to total deposits 21.91 % 22.39 % 22.53 % 22.05 % 20.46 % 21.91 % 20.46 % Total shareholders' equity to total assets 12.44 % 11.07 % 10.40 % 9.98 % 9.57 % 12.44 % 9.57 % Tangible common equity to tangible assets (1) 12.00 % 10.59 % 9.92 % 9.48 % 9.07 % 12.00 % 9.07 % Tier 1 leverage ratio 12.19 % 11.03 % 10.22 % 9.63 % 9.51 % 12.19 % 9.51 % Common equity tier 1 ratio 14.99 % 12.83 % 12.26 % 11.62 % 11.11 % 14.99 % 11.11 % Total risk-based capital ratio 15.96 % 14.12 % 13.55 % 12.90 % 12.37 % 15.96 % 12.37 % Other Number of branches 34 34 34 34 34 34 34 Number of full-time equivalent employees 287 287 289 284 279 287 279 (1) Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of GAAP to non-GAAP financial measures tables 10 Commercial Bancgroup, Inc. Financial Tables (Unaudited) Quarter End Balance Sheets (unaudited) Table 2 (dollars in thousands) December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 Assets Cash and due from banks $ 118,989 $ 122,945 $ 108,501 $ 113,190 $ 134,455 Federal funds sold 25,329 31,841 42,782 37,303 43,743 Investment securities 140,865 161,471 187,565 188,849 176,155 Gross loans less deferred fees and discounts 1,873,533 1,767,193 1,791,516 1,795,178 1,806,997 Allowance for credit losses (17,830 ) (17,942 ) (17,989 ) (18,109 ) (18,205 ) Loans, net of allowance for credit losses 1,855,703 1,749,251 1,773,527 1,777,069 1,788,792 Premises and equipment, net 49,765 50,268 50,337 50,038 50,288 Foreclosed assets held for sale, net 253 533 861 565 832 Bank owned life insurance 46,648 46,482 46,480 46,191 45,883 Goodwill and other intangible assets 12,767 13,149 13,546 13,938 14,339 Deferred tax asset 1,427 1,427 1,029 1,029 1,079 Other 39,366 37,041 37,883 38,706 45,645 Total Assets $ 2,291,112 $ 2,214,408 $ 2,262,511 $ 2,266,878 $ 2,301,211 Liabilities and Shareholders' Equity Liabilities Deposits Demand 913,986 928,958 926,886 960,915 976,481 Savings, NOW and money market 414,716 382,002 382,788 390,491 385,615 Time 487,032 469,674 541,574 550,800 576,501 Total deposits 1,815,734 1,780,634 1,851,248 1,902,206 1,938,597 Short-term borrowings 88,251 62,663 46,300 5,900 3,392 Long-term debt 78,587 100,097 102,209 103,190 105,773 Interest Payable 2,962 3,410 4,545 5,157 4,225 Other Liabilities 20,488 22,451 22,941 24,246 28,968 Total Liabilities $ 2,006,022 $ 1,969,255 $ 2,027,243 $ 2,040,699 $ 2,080,955 Shareholders' Equity Common stock 137 122 122 122 121 Additional paid-in capital 38,377 8,406 8,406 8,406 9,388 Retained earnings 247,251 237,366 227,900 219,000 212,312 Accumulated other comprehensive loss (675 ) (741 ) (1,160 ) (1,349 ) (1,565 ) Total Shareholders' equity 285,090 245,153 235,268 226,179 220,256 Total liabilities and shareholders' equity $ 2,291,112 $ 2,214,408 $ 2,262,511 $ 2,266,878 $ 2,301,211 Commercial Bancgroup, Inc. Financial Tables (Unaudited) Statement of Operations (unaudited) Table 3 As of and for the Three Months Ended As of and for the Twelve Months Ended (dollars in thousands) December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Interest and Dividend Income Loans, including fees $ 27,866 $ 28,074 $ 28,432 $ 27,930 $ 28,422 $ 112,301 $ 113,391 Debt securities-taxable 739 929 1,070 975 764 3,714 2,679 Debt securities-tax-exempt 114 102 116 110 91 442 368 Dividends on restricted stock 157 156 148 160 184 621 700 Interest-bearing deposits 1,082 760 1,093 1,591 1,872 4,526 6,075 Total interest and dividend income 29,958 30,021 30,859 30,766 31,333 121,604 123,213 Interest expense Deposits 8,441 8,654 9,717 10,294 10,377 37,107 40,352 Short-term borrowings 18 55 44 31 40 148 205 Long-term debt 689 1,090 1,039 1,101 1,149 3,919 5,072 Total interest expense 9,148 9,799 10,800 11,426 11,566 41,174 45,629 Net interest income 20,810 20,222 20,059 19,340 19,767 80,430 77,584 Provision for credit losses 150 - - - 5 150 1,829 Net interest income after provision for credit losses 20,660 20,222 20,059 19,340 19,762 80,280 75,755 Noninterest Income Customer service fees 779 735 674 655 882 2,844 3,041 Net gains on sales of premises and equipment 13 20 2 (28 ) 347 38 759 Net gains on sales of foreclosed assets 48 110 1 3 2 161 153 ATM fees 877 846 891 799 849 3,413 3,281 Increase in BOLI 342 306 336 308 323 1,292 1,199 Other 607 609 290 706 597 2,182 2,445 Total noninterest income 2,666 2,626 2,194 2,443 3,000 9,930 10,878 Noninterest Expense Salaries and employee benefits 5,753 5,729 5,657 5,626 8,021 22,764 24,873 Occupancy 734 738 774 875 1,135 3,264 3,786 Data processing 1,068 1,103 1,151 1,207 842 4,530 4,235 Deposit insurance premiums 234 267 245 226 254 972 1,129 Professional fees 229 136 286 195 37 846 1,017 Depreciation and amortization 1,001 955 803 948 992 3,706 4,109 Other 1,602 1,624 1,809 1,504 2,635 6,397 6,912 Total noninterest expense 10,621 10,552 10,725 10,581 13,916 42,479 46,061 Income before income taxes 12,705 12,296 11,528 11,202 8,846 47,731 40,572 Provision for income taxes 2,792 2,829 2,658 2,510 3,235 10,789 8,886 Net Income 9,913 9,467 8,870 8,692 5,611 36,942 31,686 Less: Net Income Attributable to Noncontrolling Interest - - - - - - 276 Net Income attributable to Commercial Bancgroup, Inc. $ 9,913 $ 9,467 $ 8,870 $ 8,692 $ 5,611 $ 36,942 $ 31,410 QTD Average Balances and Yields/Rates (unaudited) Table 4 Three Months Ended (dollars in thousands) December 31, 2025 September 30, 2025 Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate Interest Earning Assets Gross loans, net of unearned income $ 1,807,127 $ 27,866 6.2 % $ 1,767,379 $ 28,074 6.4 % Investment securities 152,782 1,011 2.6 % 169,679 1,187 2.8 % Other interest-earning assets 116,517 1,081 3.7 % 76,746 760 4.0 % Total interest-earning assets 2,076,426 29,958 5.8 % 2,013,804 30,021 6.0 % Noninterest-earning assets: Allowance for credit losses (17,954 ) (17,971 ) Noninterest-earning assets 190,810 175,036 Total Assets 2,249,282 2,170,869 Interest-bearing liabilities: Interest-bearing DDAs 518,495 2,647 2.0 % 509,726 2,806 2.2 % NOW, savings and MMDA deposits 427,419 1,585 1.5 % 380,421 1,396 1.5 % Time Deposits 475,972 4,209 3.5 % 486,555 4,452 3.7 % Federal Home Loan bank advances 60,781 444 2.9 % 61,827 455 2.9 % Other borrowings 24,953 263 4.2 % 45,934 690 6.0 % Total interest-bearing liabilities 1,507,620 9,148 2.4 % 1,484,463 9,799 2.6 % Noninterest bearing liabilities: Noninterest bearing deposits 434,578 413,376 Other liabilities 47,299 33,557 Total noninterest bearing liabilities 481,877 446,933 Shareholders' equity 259,785 239,473 Total liabilities and shareholders' equity 2,249,282 2,170,869 Net interest income 20,810 20,222 Net interest spread 3.3 % 3.3 % Net interest margin 4.0 % 4.0 % Cost interest bearing deposits 2.37 % 2.51 % Cost of funds 2.43 % 2.64 % YTD Average Balances and Yields/Rates (unaudited) Table 5 Twelve Months Ended December 31, 2025 December 31, 2024 (dollars in thousands) Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate Interest Earning Assets Gross loans, net of unearned income 1,791,550 112,301 6.27 % 1,738,433 113,391 6.52 % Investment securities 173,927 4,777 2.75 % 204,554 3,747 1.83 % Other interest-earning assets 112,578 4,526 4.02 % 123,380 6,075 4.92 % Total interest-earning assets 2,078,055 121,604 5.85 % 2,066,367 123,213 5.96 % Noninterest-earning assets: Allowance for credit losses (18,102 ) (17,568 ) Noninterest-earning assets 179,515 168,624 Total Assets 2,239,468 2,217,423 Interest-bearing liabilities: Interest-bearing DDAs 533,325 11,730 2.20 % 497,662 11,757 2.36 % NOW, savings and MMDA deposits 396,126 5,902 1.49 % 403,563 6,665 1.65 % Time Deposits 519,390 19,475 3.75 % 546,599 21,931 4.01 % Short-term borrowings Federal Home Loan bank advances 62,419 1,778 2.85 % 72,540 1,983 2.73 % Other borrowings 40,109 2,288 5.71 % 47,746 3,293 6.90 % Total interest-bearing liabilities 1,551,369 41,173 2.65 % 1,568,110 45,629 2.91 % Noninterest bearing liabilities: Noninterest bearing deposits 412,956 409,405 Other liabilities 38,373 33,286 Total noninterest bearing liabilities 451,329 442,691 Shareholders' equity 236,770 206,622 Total liabilities and shareholders' equity 2,239,468 2,217,423 Net interest income 80,431 77,584 Net interest spread 3.20 % 3.05 % Net interest margin 3.87 % 3.75 % Commercial Bancgroup, Inc. Financial Tables (Unaudited) Loan Data (unaudited) Table 6 As of Quarter Ended December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 (dollars in thousands) Amount % of Total Amount % of Total Amount % of Total Amount % of Total Amount % of Total Real Estate Loans Commercial 1,113,440 57 % 1,002,192 57 % 1,016,229 57 % 1,029,444 57 % 1,006,207 55 % Construction and land development 176,688 11 % 201,399 11 % 189,187 11 % 180,066 10 % 199,800 11 % Residential 377,943 21 % 376,769 21 % 376,442 21 % 372,338 21 % 369,308 20 % Other 14,824 1 % 14,831 1 % 15,290 1 % 16,406 1 % 16,816 1 % Commercial 174,248 9 % 154,732 9 % 178,832 10 % 182,186 10 % 201,593 11 % Consumer 15,417 1 % 16,009 1 % 14,636 1 % 14,908 1 % 15,214 1 % Other 7,450 0 % 7,642 0 % 7,772 0 % 7,505 0 % 6,744 0 % Total loans 1,880,010 100 % 1,773,574 100 % 1,798,388 100 % 1,802,853 100 % 1,815,682 100 % Deferred loan fees and discounts 6,477 6,381 6,872 7,675 8,685 Allowance for credit losses 17,830 17,942 17,989 18,109 18,205 Loans, net 1,855,703 1,749,251 1,773,527 1,777,069 1,788,792 Commercial Bancgroup, Inc. Financial Tables (Unaudited) Nonperforming Assets (unaudited) Table 7 As of the Quarter Ended (dollars in thousands) December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 Nonaccrual loans $ 6,245 $ 5,390 $ 5,846 $ 4,808 $ 5,059 Past due loans 90 days and still accruing - - 6 20 2 Total nonperforming loans 6,245 5,390 5,852 4,828 5,061 Other real estate owned 253 533 861 565 832 Total nonperforming assets $ 6,498 $ 5,923 $ 6,713 $ 5,393 $ 5,893 Allowance for credit losses $ 17,830 $ 17,942 $ 17,989 $ 18,109 $ 18,205 Total loans outstanding at end of period $ 1,873,533 $ 1,767,193 $ 1,791,516 $ 1,795,178 $ 1,806,997 Nonperforming loans to total loans 0.33 % 0.31 % 0.33 % 0.27 % 0.28 % Nonperforming assets to total loans and OREO 0.35 % 0.34 % 0.37 % 0.30 % 0.33 % Allowance for credit losses to nonperforming loans 286 % 333 % 307 % 375 % 360 % Allowance for credit losses to total loans 0.95 % 1.02 % 1.00 % 1.01 % 1.01 % Nonaccrual loans to total assets 0.27 % 0.24 % 0.26 % 0.21 % 0.22 % Nonperforming assets to total assets 0.28 % 0.27 % 0.30 % 0.24 % 0.26 % Allowance for credit losses (unaudited) Table 8 As of and for the Three Months Ended As of and for the Twelve Months Ended (dollars in thousands) December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Average loans outstanding $ 1,807,127 $ 1,767,379 $ 1,795,846 $ 1,794,477 $ 1,769,580 $ 1,791,550 $ 1,738,433 Total loans outstanding at end of period 1,873,533 1,767,193 1,791,516 1,795,178 1,806,997 1,873,533 1,806,997 Balance, beginning of period 17,942 17,989 18,109 18,205 18,291 18,205 16,635 Charge-offs: Commercial real estate (284 ) - (18 ) - - (301 ) (49 ) Construction and land development - - - - Residential real estate - - (121 ) - (105 ) (121 ) (52 ) Commercial (48 ) - - (314 ) (5 ) (362 ) (177 ) Consumer and other (13 ) (186 ) (34 ) (17 ) - (251 ) (151 ) Total charge-offs (345 ) (186 ) (173 ) (331 ) (110 ) (1,035 ) (429 ) Recoveries: Commercial real estate - 108 33 10 19 151 75 Construction and land development - - - 202 - 202 Residential real estate 20 26 2 16 - 64 9 Commercial 7 1 3 - - 11 54 Consumer and other 56 4 15 7 5 83 32 Total recoveries 83 139 53 235 24 511 170 Net (charge-offs) recoveries (262 ) (47 ) (120 ) (96 ) (86 ) (524 ) (259 ) Provision for credit losses 150 - - - - 150 1,829 Balance at end of period $ 17,830 $ 17,942 $ 17,989 $ 18,109 $ 18,205 $ 17,831 $ 18,205 Ratio of allowance to end of period loans 0.95 % 1.02 % 1.00 % 1.01 % 1.01 % 0.95 % 1.01 % Ratio of net (charge-offs) recoveries to average loans -0.01 % 0.00 % -0.01 % -0.01 % 0.00 % -0.03 % -0.01 % Commercial Bancgroup, Inc. Financial Tables (Unaudited) Loan Risk Ratings (unaudited) Table 9 As of the Quarter Ended (dollars in thousands) December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 Real Estate Loans Commercial Pass $ 1,104,532 $ 999,788 $ 1,012,190 $ 1,023,884 $ 1,002,113 Special mention 8,814 1,776 2,515 4,182 3,605 Substandard 94 628 1,524 1,378 489 Total Commercial $ 1,113,440 $ 1,002,192 $ 1,016,229 $ 1,029,444 $ 1,006,207 Construction and land development Pass $ 176,014 $ 201,363 $ 189,149 $ 180,066 $ 199,098 Special mention 78 - - - 702 Substandard 596 36 38 - - Total Construction and land development $ 176,688 $ 201,399 $ 189,187 $ 180,066 $ 199,800 Residential Pass $ 371,583 $ 371,226 $ 371,353 $ 367,216 $ 363,952 Special mention 833 838 849 854 865 Substandard 5,527 4,705 4,240 4,268 4,491 Total Residential $ 377,943 $ 376,769 $ 376,442 $ 372,338 $ 369,308 Other Pass $ 14,824 $ 14,831 $ 15,290 $ 16,406 $ 16,816 Special mention - - - - Substandard - - - - - Total Other $ 14,824 $ 14,831 $ 15,290 $ 16,406 $ 16,816 Commercial Pass $ 173,324 $ 153,819 $ 177,969 $ 181,255 $ 200,976 Special mention 793 733 747 808 543 Substandard 131 180 116 123 74 Total Commercial $ 174,248 $ 154,732 $ 178,832 $ 182,186 $ 201,593 Consumer Pass $ 15,317 $ 15,974 $ 14,594 $ 14,866 $ 15,159 Special mention 21 5 6 7 8 Substandard 79 30 36 35 47 Total Consumer $ 15,417 $ 16,009 $ 14,636 $ 14,908 $ 15,214 Other Pass $ 7,451 $ 7,642 $ 7,773 $ 7,506 $ 6,744 Special mention - - - - Substandard - - - - - Total Other $ 7,451 $ 7,642 $ 7,773 $ 7,506 $ 6,744 Total loans Pass $ 1,863,045 $ 1,764,643 $ 1,788,318 $ 1,791,199 $ 1,804,858 Special mention 10,539 3,352 4,117 5,851 5,723 Substandard 6,427 5,579 5,954 5,804 5,101 Total Gross loans $ 1,880,011 $ 1,773,574 $ 1,798,389 $ 1,802,854 $ 1,815,682 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. 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 acquisition related expenses, net of the related tax effect of acquisition related expenses. Core diluted earnings per share. We define core diluted earnings per share as core net income divided by diluted weighted average 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 year. 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). Core efficiency ratio. We define core efficiency ratio as operating revenue (net interest income, plus total noninterest income, divided by noninterest expenses (less acquisition related expenses). 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. Efficiency Ratio. We define efficiency ratio as operating expenses divided by fee income plus tax equivalent net interest income. This metric indicates how effectively the Company manages its expenses relative to its income, providing insights into cost management and profitability. 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. 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. Our management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures permit investors to view our performance using the same tools that our management uses to evaluate our performance. In addition to the foregoing, our management believes that the "core" metrics described above assist users of the Company's financial statements with their financial analysis period-over-period as they exclude certain non-recurring items. While we believe that these non-GAAP financial measures are useful in evaluating our performance, these non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate these non-GAAP financial measures may differ from that of other companies reporting measures with similar names. 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 Twelve Months Ended (dollars in thousands, except per share data) December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Pre-Tax Pre-Provision Net Income Pre-tax income $ 12,705 $ 12,296 $ 11,528 $ 11,202 $ 8,846 $ 47,731 $ 40,572 Add: provision for loan and lease losses 150 - - - 5 150 1,829 Pre-tax pre-provision net income $ 12,855 $ 12,296 $ 11,528 $ 11,202 $ 8,851 $ 47,881 $ 42,401 Tangible Common Equity: Shareholders' equity $ 285,090 $ 245,153 $ 235,268 $ 226,179 $ 220,256 285,090 220,256 Less: non controlling interest - - Less: goodwill 8,511 8,511 8,511 8,511 8,514 8,511 8,514 Less: core deposit intangible (net of tax benefit) 3,164 3,448 3,744 4,035 4,331 3,164 4,331 Tangible common equity $ 273,415 $ 233,194 $ 223,013 $ 213,633 $ 207,411 $ 273,415 $ 207,411 Pre-Tax Pre-Provision Return on Average Assets: Total average assets $ 2,249,282 $ 2,170,869 $ 2,248,134 $ 2,289,582 $ 2,255,565 $ 2,239,468 $ 2,217,423 Pre-tax pre-provision net income 12,855 12,296 11,528 11,202 8,851 47,881 42,401 Pre-tax pre-provision return on average assets 2.29 % 2.27 % 2.05 % 1.96 % 1.57 % 2.14 % 1.91 % Return on Average Tangible Common Equity: Total average shareholders' equity $ 259,784 $ 239,473 $ 227,883 $ 219,940 $ 216,140 $ 236,770 $ 206,622 Less: average intangible assets (net of tax benefit) 11,767 11,980 11,997 12,310 12,676 $ 12,014 13,497 Less: average non controlling interest - - - - - - 2,701 Average tangible equity 248,017 227,493 215,886 207,630 203,464 224,757 190,424 Net income to shareholders 9,913 9,467 8,870 8,692 5,611 36,942 31,410 Return on average tangible equity 15.99 % 16.65 % 16.43 % 16.75 % 11.03 % 16.44 % 16.49 % Tangible Book Value per Common Share, Reported: Tangible common equity $ 273,415 $ 233,194 $ 223,013 $ 213,633 $ 207,411 $ 273,415 $ 207,411 Shares of common stock outstanding 13,697,987 12,239,644 12,239,644 12,239,644 12,113,114 13,697,987 12,113,114 Tangible book value per share, reported $ 19.96 $ 19.05 $ 18.22 $ 17.45 $ 17.12 $ 19.96 $ 17.12 Tangible Common Equity to Tangible Assets: Tangible common equity $ 273,415 $ 233,194 $ 223,013 $ 213,633 $ 207,411 $ 273,415 $ 207,411 Total assets 2,291,112 2,214,408 2,262,511 2,266,878 2,301,211 2,291,112 2,301,211 Less: intangible assets 12,767 13,149 13,546 13,938 14,339 12,767 14,339 Tangible assets 2,278,345 2,201,258 2,248,965 2,252,940 2,286,872 2,278,345 2,286,872 Tangible common equity to tangible assets 12.00 % 10.59 % 9.92 % 9.48 % 9.07 % 12.00 % 9.07 % Core Deposits: Total Deposits $ 1,815,734 $ 1,780,634 $ 1,851,248 $ 1,902,206 $ 1,938,597 $ 1,815,734 1,938,597 Less: Time deposits equal to or greater than $250,000 102,294 100,743 97,209 97,537 94,567 102,294 94,567 Less: Brokered deposits 47,970 47,970 125,223 145,375 174,918 47,970 174,918 Core deposits $ 1,665,470 $ 1,631,921 $ 1,628,816 $ 1,659,294 $ 1,669,112 $ 1,665,470 $ 1,669,112 Core Net Income: Net income $ 9,913 $ 9,467 $ 8,870 $ 8,692 $ 5,611 $ 36,942 31,410 Add: merger expenses from AB&T acquisition - - 302 7 131 309 2,788 Less: tax effect - - (76 ) (2 ) (33 ) (78 ) (697 ) Core net income $ 9,913 $ 9,467 $ 9,096 $ 8,697 $ 5,709 $ 37,173 33,501 Core Earnings per Share: Core net income $ 9,913 $ 9,467 $ 9,096 $ 8,697 $ 5,709 $ 37,173 $ 33,501 Average shares outstanding 13,835,816 12,188,624 12,137,013 12,137,013 12,301,998 12,574,617 12,187,788 Core earnings per share $ 0.72 $ 0.78 $ 0.75 $ 0.72 $ 0.46 $ 2.96 $ 2.75 Core Return on Average Assets: Core net income $ 9,913 $ 9,467 $ 9,096 $ 8,697 $ 5,709 $ 37,173 $ 33,501 Average assets 2,249,282 2,170,869 2,248,134 2,289,582 2,255,565 2,239,468 2,217,423 Core return on average assets 1.76 % 1.74 % 1.62 % 1.52 % 1.01 % 1.66 % 1.51 % Core Return on Average Common Tangible Equity: Average tangible common equity $ 248,017 $ 227,493 $ 215,886 $ 207,630 $ 203,464 $ 224,757 $ 190,424 Core net income 9,913 9,467 9,096 8,697 5,709 37,173 33,501 Core return on average tangible common equity 15.99 % 16.65 % 16.85 % 16.75 % 11.22 % 16.54 % 17.59 % Core Efficiency Ratio: Add: net interest income $ 20,810 $ 20,222 $ 20,059 $ 19,340 $ 19,767 $ 80,431 $ 77,584 Add: non interest income 2,666 2,626 2,194 2,443 3,000 9,929 10,878 Operating revenue $ 23,476 $ 22,848 $ 22,253 $ 21,783 $ 22,767 $ 90,360 88,462 Total noninterest expenses 10,621 10,552 10,725 10,581 13,916 42,479 46,061 Less: merger expenses from AB&T acquisition - - 302 7 131 309 2,788 Core noninterest expenses 10,621 10,552 10,423 10,574 13,785 42,170 43,273 Core efficiency ratio 45.24 % 46.18 % 46.84 % 48.54 % 60.55 % 46.67 % 48.92 % Contacts Philip J. Metheny Sr. Executive Vice President, Chief Financial Officer Commercial Bancgroup, Inc. [email protected] 423-869-5151 Ext. 3307 Roger Mobley Executive Vice President, Chief Financial Officer Commercial Bank [email protected] 704-648-0185 Ext. 4118 Forward-Looking Statements This press release contains statements that constitute "forward-looking statements" within the meaning of the U.S. federal securities laws. The statements in this press release that are not purely historical facts are forward-looking statements. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would" and, in each case, their negative or other variations or comparable terminology and expressions. You should not place undue reliance on these forward-looking statements as actual future results may differ materially from those expressed or implied by any forward-looking statement. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from those expressed in any forward-looking statements, including but not limited to: (1) business and economic conditions nationally, regionally and in our target markets, particularly in Kentucky, North Carolina and Tennessee and the particular geographic areas in which we operate; (2) the level of, or changes in the level of, interest rates and inflation, including the effects thereof on our earnings and financial condition and the market value of our investment securities and loan portfolios; (3) the concentration of our loan portfolio in real estate loans and changes in the prices, values and sales volumes of commercial and residential real estate; (4) the concentration of our business within our geographic areas of operation in Kentucky, North Carolina and Tennessee and neighboring markets; (5) credit and lending risks associated with our commercial real estate, commercial, and construction and land development loan portfolios; (6) risks associated with our focus on lending to small and medium-sized businesses; (7) our ability to maintain important deposit customer relationships, maintain our reputation or otherwise avoid liquidity risks; (8) changes in demand for our products and services; (9) the failure of assumptions and estimates underlying the establishment of allowances for possible credit losses and other asset impairments, losses, valuations of assets and liabilities and other estimates; (10) the sufficiency of our capital, including sources of such capital and the extent to which capital may be used or required; (11) our inability to secure a "satisfactory" rating under the Community Reinvestment Act; (12) the risk that our cost of funding could increase in the event we are unable to continue to attract stable, low-cost deposits and reduce our cost of deposits; (13) our inability to raise necessary capital to fund our growth strategy and operations or to meet increased required minimum regulatory capital levels; (14) our ability to execute and prudently manage our growth and execute our business strategy, including expansionary activities; (15) the composition of and changes in our management team and our ability to attract, incentivize and retain key personnel; (16) the effects of competition from a wide variety of local, regional, national and other providers of financial, investment, trust and other wealth management services and insurance services, including the disruptive effects of financial technology and other competitors who are not subject to the same regulations as the Company and the Bank; (17) the deterioration of our asset quality or the value of collateral securing loans; (18) changes in accounting standards; (19) the effectiveness of our risk management framework, including internal controls; (20) severe weather, natural disasters, pandemics, epidemics, acts of war, terrorism, or other external events, such as the transition risk associated with climate change, and other matters beyond our control; (21) changes in technology or products that may be more difficult, costly, or less effective than anticipated; (22) the risks of acquisitions and other expansionary activities, including without limitation our ability to identify and consummate transactions with potential future acquisition candidates, the time and costs associated with pursuing such transactions, our ability to successfully integrate operations as part of such transactions and our ability, and possible failures, to achieve expected gains, revenue growth, expense savings and/or other synergies from such transactions; (23) our ability to maintain our historical rate of growth; (24) failure to keep pace with technological change or difficulties when implementing new technologies; (25) systems failures or interruptions involving our risk management framework, our information technology and telecommunications systems or fourth-party service providers; (26) our ability to identify and address unauthorized data access, cyber-crime and other threats to data security and customer privacy; (27) our compliance with governmental and regulatory requirements, including the Bank Holding Company Act of 1956, as amended, and other laws relating to banking, consumer protection, securities and tax matters, and our ability to maintain licenses required in connection with mortgage origination, sale and servicing operations; (28) compliance with the Bank Secrecy Act of 1970, Office of Foreign Assets Control rules and anti-money laundering laws and regulations; (29) governmental monetary and fiscal policies; (30) changes in laws, rules, or regulations, or interpretations thereof, or policies relating to financial institutions or accounting, tax, trade, monetary or fiscal matters; (31) our ability to receive dividends from the Bank and satisfy our obligations as they become due; (32) the institution and outcome of litigation and other legal proceedings against us or to which we become subject; (33) the limited experience of our management team in managing and operating a public company; (34) the incremental costs of operating as a public company; (35) our ability to meet our obligations as a public company, including our obligations under Section 404 of the Sarbanes-Oxley Act of 2002; and (36) other risks and factors described under the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Registration Statement on Form S-1/A (Registration No. 333-289862) filed with the U.S. Securities and Exchange Commission on September 22, 2025. Commercial undertakes no obligation to update these forward-looking statements, as a result of changes in assumptions, new information, or otherwise, after the date of this press release, except as required by law. SOURCE: Commercial Bancgroup, Inc. View the original press release on ACCESS Newswire