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CB

Commercial Bancgroup, Inc. (CBK)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered modest growth: net income rose to $9.47M and diluted EPS was $0.77, with total operating revenue up ~4.5% YoY to ~$22.85M as net interest income expanded and efficiency improved to 46.2% .
  • Results came in slightly below Wall Street: EPS missed by $0.05 ($0.77 vs $0.82) and operating revenue missed by ~$0.55M ($22.85M vs $23.40M) as noninterest income was softer versus the prior year; YTD noninterest income reflects roll-off of one-time gains in 2024 *.
  • Management guided to resilient NIM with flexibility in the balance sheet; September NIM was ~4.05% and the team expects a sustainable 3.75%–3.80% range, supported by short duration funding and active pricing .
  • Balance sheet repositioning continued: deposits fell 8.1% YTD driven by a $126.9M reduction in brokered CDs; capital ratios remain strong (CET1 14.2%, Total RBC 15.2%, leverage 12.0%) .
  • Strategic tone constructive: loan pipeline healthy into Q4; management expects positive FY loan growth (albeit below budget) and is actively evaluating M&A opportunities in the $500M–$750M bank size cohort .

What Went Well and What Went Wrong

What Went Well

  • Efficiency improvement: efficiency ratio improved to 46.2% vs 48.1% YoY; ROA ticked up to 1.69% .
    “Our net interest margin is holding strong… we’ve got so much flexibility in our balance sheet because we’re so short. We can adjust pretty fast to any rates” .
  • Top-line resilience: Net interest income increased to $20.22M (vs $19.06M a year ago), supporting operating revenue growth to ~$22.85M .
  • Capital strength and discipline: CET1 14.2%, Total RBC 15.2%, leverage 12.0%; tangible book value per share rose to $19.05 (+14.5% YoY) .

What Went Wrong

  • Slight miss versus Street: EPS ($0.77) and operating revenue (~$22.85M) were below consensus ($0.82 and $23.40M) as noninterest income tracked lower; YTD noninterest income was pressured by prior-year one-time gains rolling off * .
  • Deposit contraction and mix shift: total deposits declined $158.0M (-8.1%) YTD, led by brokered deposits down $126.9M; non-brokered deposits decreased $31.0M .
  • ROE compression and asset quality tick-up: ROE fell to 15.76% (from 17.32% YoY) and NPAs/Assets moved up to 0.26% (+1 bp vs year-end) .
    Management noted loan growth will be positive but “we won’t meet budget” due to payoff dynamics earlier in the year .

Financial Results

Income Statement Trends

MetricQ3 2024Q2 2025Q3 2025
Operating Revenue ($USD)$21,863,622 $22,283,031*$22,847,544
Net Interest Income ($USD)$19,055,697 —$20,221,599
Noninterest Income ($USD)$2,807,925 —$2,625,945
Net Income ($USD)$9,207,213 $8,899,592*$9,466,149
Diluted EPS ($USD)$0.74 $0.7132*$0.77

Notes: Operating revenue approximates Net Interest Income + Noninterest Income from the company’s statements . Asterisks denote values retrieved from S&P Global.

Q3 2025 Actual vs Consensus

MetricActualConsensusSurprise
EPS ($USD)$0.77 $0.82*-$0.05 (miss)
Operating Revenue ($USD)$22,847,544 $23,400,000*-$552,456 (miss)

Asterisks denote values retrieved from S&P Global.

KPIs and Profitability

KPIQ3 2024Q3 2025
ROA (%)1.65% 1.69%
ROE (%)17.32% 15.76%
Efficiency Ratio (%)48.13% 46.19%
Tangible BVPS ($)$16.64 $19.05
Net Interest Margin (September, %)—~4.05%

Balance Sheet and Deposits

MetricDec 31, 2024Sep 30, 2025
Total Assets ($USD)$2,301,211,138 $2,214,408,255
Total Net Loans ($USD)$1,788,791,583 $1,749,250,647
Total Deposits ($USD)$1,938,596,955 $1,780,633,582
Brokered Deposits ($USD)$174,918,000 $47,979,000
Noninterest Demand Deposits ($USD)$396,600,000 $398,800,000
CET1 (%)—14.2%
Total RBC (%)—15.2%
Tier 1 Leverage (%)—12.0%
NPAs/Assets (%)0.25% (year-end) 0.26%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest MarginQ4 2025Not disclosed“Standard” 3.75%–3.80%; Sep ~4.05% New disclosure
Loan GrowthFY 2025Not disclosedPositive YoY growth; below budget due to earlier payoffs Maintained moderate outlook
Deposit Pricing (CD)Q4 2025Not disclosedHighest CD ~3.85% for 7–9 months; keep durations short Policy clarified
M&A Activity2025–2026Not disclosedActive evaluation of $500M–$750M targets; constructive environment Strategic posture articulated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Net Interest MarginN/A (first public call post-IPO)Sep NIM ~4.05; guide 3.75%–3.80% with short duration flexibility Stable to resilient
Loan GrowthN/APipeline strong; Q4 closings expected; FY positive but under budget Improving into Q4
Deposits & PricingN/ACDs capped near 3.85%, short maturities to manage cycle Active repricing discipline
Asset QualityN/ANPAs/Assets 0.26%; delinquencies at historical goals per mgmt Strong/steady
Capital & TBVN/ACET1 14.2%, Total RBC 15.2%, TBVPS $19.05 Strength maintained
M&A OutlookN/APursuing scale; positive CEO/peer feedback on target range Constructive pipeline

Management Commentary

  • “Our net interest margin is holding strong… we’ve got so much flexibility in our balance sheet because we’re so short… If I’m telling what our spread is going to be, it’s going to be 3.75–3.80 as standard. Right now, it’s a little bit over 4.” — Terry Lee, CEO .
  • “Net income for 2025 was $9.5 million… revenue was $22.9 million… EPS $0.77… efficiency ratio 46.19%.” — Philip Metheny, CFO .
  • “We anticipate a strong loan closing volume for the fourth quarter… we’ll end the year positive in loan growth… We won’t meet budget, but we’ll have a nice loan growth for year-end.” — Terry Lee, CEO .
  • “I think everybody now will begin to recognize us as kind of the only buyer that’s in the marketplace for that $500 million–$750 million size bank… There are several that we’re kind of looking a little bit at now.” — Terry Lee, CEO .

Q&A Highlights

  • Loan pipeline and FY outlook: Management expects Q4 closings to drive positive FY loan growth despite earlier payoffs; budget will not be met but trajectory is positive .
  • NIM outlook and rate sensitivity: Company is effectively neutral given short positioning; NIM around 3.75%–3.80% with September at ~4.05%; deposit pricing kept short-dated to capture potential rate decreases .
  • M&A strategy: Active discussions and relationship network in place; targeting $500M–$750M asset-size banks; environment viewed as favorable with multiple potential opportunities .

Estimates Context

  • Q3 2025 EPS and operating revenue missed consensus: EPS $0.77 vs $0.82; revenue ~$22.85M vs $23.40M; one estimate each on EPS and revenue contributed to the consensus, limiting breadth of coverage *.
  • Forward look: Q4 2025 consensus EPS at ~$0.67 and revenue ~$23.30M; given management’s NIM guidance and Q4 loan closings, Street may fine-tune revenue higher if closings accelerate, but deposit mix and noninterest income trajectory should be monitored*.

Asterisks denote values retrieved from S&P Global.

Key Takeaways for Investors

  • Operating revenue and net interest income growth drove improved efficiency; despite a small miss vs consensus, profitability remained strong and capital levels are robust .
  • Near-term NIM appears resilient in the 3.75%–3.80% range with upside evidenced by ~4.05% in September, supported by active balance sheet management and short-dated funding .
  • Q4 loan closings are the near-term catalyst; watch for closing execution vs pipeline and whether noninterest income can stabilize vs 2024’s one-time gains roll-off .
  • Deposit strategy shifting away from brokered CDs; monitor core deposit trends and pricing discipline as rate cuts materialize .
  • ROE compression YoY and slight asset quality tick-up warrant attention, though ratios remain well within strong territory; capital provides optionality .
  • M&A optionality is credible given management relationships and target size focus; successful execution could enhance scale and earnings power .
  • Into Q4, variance vs consensus may hinge on loan growth realization and fee lines; Street estimates could adjust modestly on revenue and EPS depending on Q4 closings and margin stability*.

Supporting source documents:

  • Q3 2025 8-K and Exhibit 99.1 press release (full financials, highlights, balance sheet details) .
  • Q3 2025 earnings call transcripts (prepared remarks and Q&A) .

Values retrieved from S&P Global: tables and statements marked with an asterisk (*) (consensus estimates and certain quarterly actuals where company documents were not available).