Commercial Bancgroup, Inc. (NASDAQ:CBK), the Harrogate, Tennessee-based parent of Commercial Bank, reported net income of $10.9 million, or $0.79 per diluted common share, for the third quarter of 2026. The company reported net income of $9.5 million, or $0.77 per diluted common share, for the same period of 2025.
#Third-quarter financial performance
Commercial Bancgroup said core net income, which excludes certain non-recurring items, was also $10.9 million, or $0.79 per diluted common share, for the third quarter of 2026. Core net income was $9.5 million, or $0.77 per diluted common share, in the third quarter of 2025.
Return on average assets was 1.84%, while return on average equity was 14.16%. Return on average tangible common equity was 14.68%. The company reported a core efficiency ratio of 43.68%.
Net interest margin reached 4.14%, an increase of 8 basis points from the second quarter of 2026. Loans outstanding net of deferred fees and discounts increased $42.8 million during the quarter, or 2.2% from the second quarter of 2026.
#Income and expense trends
Net income before income taxes was $13.8 million for the three months ended September 30, 2026. Commercial Bancgroup said the increase from the three months ended September 30, 2025, was primarily linked to a $1.9 million, or 9.5%, increase in net interest income after provision for credit losses and a $0.1 million, or 2.8%, increase in noninterest income.
The increase was partly offset by a $0.4 million, or 4.3%, rise in noninterest expense. Noninterest income was $2.7 million for the quarter, compared with the third quarter of 2025. The company attributed the change mainly to ATM fees and bank-owned life insurance income.
#Nine-month results
For the nine months ended September 30, 2026, Commercial Bancgroup reported net income of $30.6 million, or $2.23 per diluted common share, compared with $27.1 million, or $2.22 per diluted common share, for the nine months ended September 30, 2025.
Total operating revenue for the nine-month period was $72.4 million, compared with $66.9 million in the comparable period. Noninterest expense was $33.0 million, compared with $31.9 million. Return on average assets was 1.76%, compared with 1.61%, while return on average equity was 13.71%, compared with 15.75%.
The core efficiency ratio for the nine months ended September 30, 2026, was 44.7%, compared with 47.1% for the same period of 2025.
#Assets, loans and deposits
Total assets were $2.4 billion as of September 30, 2026, compared with $2.2 billion as of September 30, 2025. Loans outstanding net of deferred fees and discounts were $2.0 billion, an increase of $216.1 million, or 12.2%, from September 30, 2025.
Total deposits were $1.9 billion at September 30, 2026, an increase of $106.8 million, or 6.0%, from September 30, 2025. Non-brokered deposits were $1.8 billion, compared with the earlier period. Noninterest-bearing demand deposits increased $9.6 million, or 2.4%, to $408.2 million from $398.6 million.
The company said the increase in deposits was primarily driven by normal customer business cycles and deposit growth.
#Capital and credit measures
Commercial Bancgroup said Commercial Bank exceeded the minimum requirements to be well-capitalized for bank regulatory purposes as of September 30, 2026. The bank reported a total risk-based capital ratio of 14.2%, a Tier 1 risk-based capital ratio of 13.3%, a common equity Tier 1 capital ratio of 13.3% and a Tier 1 leverage ratio of 11.8%.
Net charge-offs to average loans were 0.00%. Nonperforming assets to total assets were 0.31%, compared with 0.27% as of September 30, 2025. The allowance for credit losses to total loans was 0.96%, compared with 1.02% at September 30, 2025.
#Book value and reporting basis
Book value per share was $22.71 at September 30, 2026, compared with $22.09 at June 30, 2026, and $20.03 at September 30, 2025. Tangible book value per share was $21.92, compared with $21.28 and $19.05 at those respective dates.
Commercial Bancgroup noted that its core measures are non-GAAP financial measures. The company said these measures exclude certain non-recurring items, should be considered supplemental to GAAP measures and may be calculated differently by other companies.
The company’s financial statements, including earnings per share and book value per share information, reflect a September 18, 2025, stock reclassification and a 250-for-1 forward stock split retroactively. The financial impact of Commercial Bancgroup’s October 2025 initial public offering is reflected in the fourth quarter of 2025 in the financial statements presented with the announcement.
#About Commercial Bancgroup
Commercial Bancgroup is a bank holding company headquartered in Harrogate, Tennessee. Its wholly owned subsidiary, Commercial Bank, is a Tennessee state-chartered bank offering traditional consumer and commercial banking products and services to businesses and individuals in select markets in Kentucky, North Carolina and Tennessee.
#Key Takeaways
- Third-quarter 2026 net income was $10.9 million, or $0.79 per diluted common share.
- Net interest margin was 4.14%, an increase of 8 basis points from the second quarter of 2026.
- Loans outstanding net of deferred fees and discounts were $2.0 billion at September 30, 2026.
- Total deposits were $1.9 billion, while nonperforming assets to total assets were 0.31%.
- Commercial Bank reported capital ratios above the minimum requirements to be well-capitalized for bank regulatory purposes.
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