Commencement Bancorp, Inc. (OTCQX:CBWA), the parent company of Commencement Bank, reported net income of $2.0 million, or $0.55 per share, for the third quarter of 2026. That compared with $1.8 million, or $0.48 per share, in the second quarter of 2026 and comparable earnings of $1.9 million, or $0.49 per share, in the third quarter of 2025.
Return on average assets was 1.11% in the third quarter, compared with 1.01% in the second quarter and 1.06% in the third quarter of 2025. Return on average common equity was 12.67%, versus 11.81% and 13.10% in the same comparison periods.
Net interest income rose $148,000, or 2.1%, to $7.3 million from $7.1 million in the second quarter. The increase reflected higher interest income of $238,000, partly offset by a $90,000 increase in interest expense. Total non-interest income increased $103,000, or 23.2%, during the quarter, including recognition of interest rate swap income of $93,000.
Total non-interest expense rose $80,000, or 1.6%, compared with the second quarter. The company attributed the increase primarily to compensation related to newly hired teams and incentive awards. Compared with the third quarter of 2025, non-interest expense was higher by $480,000, mainly because of compensation and employee benefits, employee merit increases, additional stock compensation expense, payroll taxes and employee benefits.
Loans receivable increased $13.5 million, or 9.6% annualized, to $570.1 million at September 30, 2026, from $556.6 million at June 30, 2026. Commencement Bank said the change reflected loan originations, partly offset by loan payments.
The Bank originated commitments of $40.0 million during the third quarter, compared with $60.0 million during the second quarter and $43.0 million during the third quarter of 2025. For the nine months ended September 30, 2026, the annualized loan growth rate was 11.7%.
Total deposits declined $23.0 million to $636.6 million from $659.6 million, primarily because of seasonality, according to the company. Annualized deposit growth for the nine months ended September 30, 2026 was 5.8%. Noninterest-bearing deposits represented 30.4% of total deposits at September 30, 2026, compared with 30.2% at June 30, 2026 and 29.3% at December 31, 2025.
Net interest margin was 4.28% in the third quarter, down from 4.29% in the second quarter but above 4.21% in the third quarter of 2025. The company said the quarter included a reversal of interest income on a loan classified as nonaccrual. That reversal reduced net interest margin by seven basis points and loan yield by ten basis points.
The cost of total interest-bearing liabilities increased to 2.02% from 1.94%, which the company linked to subordinated debenture issuances. Total cost of deposits decreased to 1.36% from 1.37% in the second quarter and 1.51% in the third quarter of 2025.
Interest expense on deposits increased $19,000, or 0.9%, from the second quarter. The cost of certificate of deposits increased 13 bps to 3.23%, while interest expense on subordinated debentures increased to $84,000 from $13,000.
Total assets decreased $20.5 million to $719.3 million at September 30, 2026, from $739.8 million at June 30, 2026. Federal funds sold declined $26.8 million to $10.5 million. Investment securities available for sale decreased $1.9 million, or 2.6%, to $72.1 million.
During the quarter, Commencement Bancorp raised an additional $750,000 of fixed-to-floating subordinated notes, bringing the total to $5.8 million at September 30, 2026. The company said the Notes will support organic growth while maintaining a strong capital position and are intended to qualify as Tier 2 capital for regulatory purposes.
On-balance-sheet liquidity was $109.8 million, or 15.3% of total assets. The Bank also reported access to $237.7 million through available Federal Home Loan Bank advances, the Federal Reserve's discount window and federal funds lines with correspondent banks. The company said capital ratios remained well above regulatory requirements.
Nonperforming assets increased to $1.8 million, or 0.25% of total assets, at September 30, 2026, from $488,000, or 0.07% of total assets, at June 30, 2026. The increase resulted from two credit relationships being classified as nonaccrual. Nonperforming loans were recorded at the lesser of fair market value or book balance.
The provision for credit losses was $141,000, a decrease of $120,000 from the second quarter. The provision included a reversal of provision for unfunded credit losses of $16,000. The allowance for credit losses to loans receivable remained 1.18% at both September 30, 2026 and June 30, 2026.
Classified loans, defined by the company as loans rated Substandard or worse, represented 0.86% of loans receivable at September 30, 2026, compared with 0.89% at June 30, 2026. The company said there were no changes to the relationships identified as classified loans during the third quarter.
Commencement Bancorp, Inc. is headquartered in Tacoma, Washington, and is the holding company for Commencement Bank. The Bank was formed in 2006 and serves Pierce, King, Kitsap and Thurston counties and surrounding areas.
Commencement Bancorp, Inc. announced its financial results for the third quarter of 2026 on October 29, 2026. The company reported net income of $2.0 million, or $0.55 per share, compared with $1.8 million, or $0.48 per share, for the second quarter of 2026.
Commencement Bancorp, Inc. reported net income of $2.0 million, or $0.55 per share, for the third quarter of 2026, compared with comparable earnings of $1.9 million, or $0.49 per share, for the third quarter of 2025. Return on average assets was 1.11%, compared with 1.06%, while return on average common equity was 12.67%, compared with 13.10%.
Loans receivable increased $13.5 million, or 9.6% annualized, to $570.1 million at September 30, 2026, from $556.6 million at June 30, 2026. Total deposits decreased $23.0 million to $636.6 million from $659.6 million, which the company attributed primarily to seasonality; annualized deposit growth for the nine months ended September 30, 2026 was 5.8%.
Commencement Bancorp, Inc. said the increase in loans receivable was due to loan originations, offset by loan payments. The Bank originated commitments of $40.0 million during the third quarter of 2026, compared with $60.0 million during the second quarter of 2026 and $43.0 million during the third quarter of 2025.
Commencement Bancorp, Inc.’s net interest margin decreased to 4.28% in the third quarter of 2026 from 4.29% in the second quarter of 2026, while total cost of deposits decreased to 1.36% from 1.37%. Compared with the third quarter of 2025, net interest margin increased from 4.21% and total cost of deposits decreased from 1.51%.
Commencement Bancorp, Inc. said net interest margin was negatively affected by the reversal of interest income on a loan classified as nonaccrual, which reduced net interest margin by seven basis points and loan yield by ten basis points. The cost of total interest-bearing liabilities also increased to 2.02% from 1.94%, based on the issuance of subordinated debentures.
Net interest income increased $148,000, or 2.1%, to $7.3 million in the third quarter of 2026 from $7.1 million in the second quarter of 2026, while total non-interest income increased $103,000, or 23.2%. Total non-interest expense increased $80,000, or 1.6%, due to higher compensation, newly hired teams and incentive awards.
Total assets decreased $20.5 million to $719.3 million at September 30, 2026, from $739.8 million at June 30, 2026. Federal funds sold decreased $26.8 million to $10.5 million, and investment securities available for sale decreased $1.9 million, or 2.6%, to $72.1 million.
Commencement Bancorp, Inc. raised an additional $750,000 of fixed-to-floating subordinated notes during the third quarter of 2026, bringing the total to $5.8 million as of September 30, 2026. The company said the Notes will support organic growth while maintaining a strong capital position and are intended to qualify as Tier 2 capital for regulatory purposes.
Commencement Bancorp, Inc. said capital ratios remained well above regulatory requirements and that the Bank had ample liquidity from on- and off-balance-sheet sources. On-balance-sheet liquidity was $109.8 million, or 15.3% of total assets, while available Federal Home Loan Bank advances, the Federal Reserve’s discount window and federal funds lines with correspondent banks totalled $237.7 million.
Nonperforming assets increased to $1.8 million, or 0.25% of total assets, at September 30, 2026, from $488,000, or 0.07% of total assets, at June 30, 2026, due to two credit relationships being classified as nonaccrual. The provision for credit losses was $141,000, a decrease of $120,000 from the second quarter of 2026, while the allowance for credit losses to loans receivable remained 1.18%.
Commencement Bancorp, Inc. is the holding company for Commencement Bank, which is headquartered in Tacoma, Washington. Commencement Bank provides traditional, reliable and sustainable banking in Pierce, King, Kitsap and Thurston counties and surrounding areas through personal attention, flexible service, state-of-the-art technology and traditional delivery systems.
Commencement Bancorp, Inc.’s shares trade on OTCQX under the ticker symbol CBWA. The company directs investors to OTC Markets for information related to the trading of CBWA.
Chief Executive Officer John E. Manolides said the company remains focused on a long-term approach to loan growth, core deposits, funding costs and profitability. President and Chief Operating Officer Nigel L. English said the company intends to scale its regional footprint, deepen its community and market impact, and pursue adjacent commercial lending opportunities; the release states that forward-looking statements involve risks and uncertainties and are not guarantees of future performance.