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COMMUNITY BANCORP /VT (CMTV)·Q3 2025 Earnings Summary

Executive Summary

  • EPS rose 52.4% year over year to $0.84 on net income of $4.746M, driven by a 21.4% increase in net interest income and modest expense growth; this marks the third straight quarterly EPS increase in 2025 .
  • Net interest margin expanded to 3.79% from 3.29% in Q3 2024, as deposit rate pressures stabilized and wholesale funding declined; ROA/ROE improved to 1.58%/17.40% respectively .
  • Equity/book value per share climbed to $111.9M/$19.64, aided by earnings and a $5.2M year‑to‑date improvement in AFS unrealized losses; dividend was raised 4% to $0.25, the fourth annual increase since 2020 .
  • Balance sheet quality improved: ACL/loans rose to 1.12%, non‑accrual loans/loans fell to 0.84%; loan growth remained solid (+$49M YoY) while deposits grew 8.47% YoY .
  • Catalyst: The dividend increase and visible margin expansion are likely stock positives; management flagged macro uncertainty (including Canada trade policy risk), but indicated deposit pricing pressure has stabilized, supporting NIM durability .

What Went Well and What Went Wrong

What Went Well

  • Net interest income rose 21.35% YoY to $10.511M on strong loan growth and higher yields, while deposit interest expense was up only 2.42% YoY in the quarter, supporting spread expansion .
  • Non‑interest income increased 4.4% YoY to $2.095M, with higher service fees and stronger contribution from the investment affiliate (CFS Partners) .
  • Management raised the quarterly dividend to $0.25 and emphasized focus on strategic initiatives and community banking: “our robust earnings reflect our team’s hard work… significantly increased earnings and greater efficiency… we excel as Vermont’s Community Bank” — Christopher Caldwell, CEO .

What Went Wrong

  • Other income from loans declined 31.7% YoY in the quarter and 5.7% YTD on lower documentation fees; outsourcing expense trends required contract renegotiations to offset cost pressure .
  • Repurchase agreement interest expense rose 20.9% YoY in Q3, reflecting higher volumes/rates, partially offsetting net interest benefit .
  • Management highlighted macro risks, including potential trade policy impacts on Vermont businesses tied to Canada and broader economic uncertainty, warranting cautious outlook on customers and liquidity .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Net Income ($USD)$3,114,251 $3,525,455 $4,059,776 $4,746,787
Diluted EPS ($USD)$0.55 $0.62 $0.72 $0.84
Net Interest Income ($USD)$8,661,923 $9.4M $9.9M $10,510,990
Non‑Interest Income ($USD)$2,006,674 $1.58M $2.1M $2,095,054
Credit Loss Expense ($USD)$460,745 $325,054 $407,046 $258,753
Dividends Declared per Share ($USD)$0.24 $0.24 $0.24 $0.25

Margins and Returns (Q3 YoY):

MetricQ3 2024Q3 2025
Net Interest Margin (%)3.29% 3.79%
Return on Average Assets (%)1.09% 1.58%
Return on Average Equity (%)13.09% 17.40%

Segment/Portfolio Breakdown (Q3 2025):

Loan SegmentAmount ($)% of Loans
Commercial & Industrial$124,174,895 12.91%
Purchased$10,769,907 1.12%
Commercial Real Estate$481,332,182 50.04%
Municipal$70,090,106 7.29%
Residential RE – 1st Lien$229,730,996 23.88%
Residential RE – Jr Lien$42,769,310 4.45%
Consumer$3,015,113 0.31%
Total Loans$961,882,509 100.00%

Key KPIs:

KPIQ3 2024Q3 2025
Total Assets ($)~$1.18B $1,226,171,343
Securities AFS (Fair Value $)$170.5M $152,248,319
Equity Capital ($)$98.3M $111,880,342
Book Value per Share ($)$17.36 $19.64
ACL / Loans (%)1.06% 1.12%
Non‑Accrual Loans / Loans (%)0.90% 0.84%
Net Charge‑offs to Avg Loans (YTD) (%)−0.16% −0.01%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per shareQ4 2025 payable Nov 1, 2025$0.24 $0.25 Raised
Interest Rate Sensitivity (NII)Next 12 months from 9/30/25N/ADown 100 bps: −0.5%; Up 200 bps: −1.6% Baseline disclosed
Formal revenue/EPS/OpEx guidanceFY25/Q4NoneNone Maintained (no formal guidance)

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was available; themes summarized from Q1/Q2/Q3 releases and Q3 10‑Q.

TopicPrevious Mentions (Q2 2025 and Q1 2025)Current Period (Q3 2025)Trend
Deposit pricing pressureQ1: deposit interest expense +35.9% YoY; higher service contract/FDIC costs . Q2: deposit interest expense +18.22% YoY .Deposit interest expense +2.42% YoY; pressures stabilized; spread/margin improved .Easing pressure; supportive for NIM .
Loan growthQ1: loans +$73.9M YoY . Q2: +$79.6M YoY .+$49M YoY; continued growth across segments .Sustained growth; moderating pace .
Credit losses/CECLQ1 provision $325k ; Q2 $407k .Q3 $258,753; YoY down 43.8%; ACL/loans 1.12% .Benign credit environment; strong coverage .
Macro/Canada trade policyQ1: “economic uncertainty” . Q2: continued uncertainty; focus on efficiency .Assessing US‑Canada trade policy risks impacting Vermont businesses; cautious stance .Heightened monitoring; conservative posture .
Technology/vendor efficiencyQ1: core vendor renegotiation lowered cost .Vendor credits and renegotiations reduced outsourcing expenses; audit scope increased .Efficiency initiatives ongoing .
Capital & dividendsQ1/Q2: $0.24 dividends .Dividend raised to $0.25; equity/book value higher; well capitalized .Shareholder returns rising; strong capital .

Management Commentary

  • “Through three quarters this year, Community National Bank continues to deliver strong returns for our shareholders… once again increase our quarterly dividend… our compelling performance reflects exceptional service… and our focused efforts to be the leading bank in our markets… our robust earnings reflect our team’s hard work… as we move into the final quarter of 2025… maintaining our strategic initiatives… we excel as Vermont’s Community Bank.” — Christopher Caldwell, CEO .
  • Q2: “significantly increased earnings reflect the hard work of our team… recognized by Forbes’ Best in State award… opportunity for us to excel at community banking… focus on delivering banking solutions efficiently with highest level of customer service.” — Christopher Caldwell, CEO .
  • Q1: “strong results across the board… sharply higher earnings and continued growth in loan portfolio and deposit balances… serving our customer base effectively despite economic uncertainty.” — Christopher Caldwell, CEO .

Q&A Highlights

  • No Q3 2025 earnings call transcript was found; therefore, Q&A highlights and any intra‑quarter guidance clarifications were not available in primary source materials [Search attempted; none found].

Estimates Context

  • S&P Global consensus coverage appears limited for CMTV; no EPS/EBITDA/target price/recommendation consensus data were available for Q3 2025; revenue “actual” recorded at $12.347M* for Q3 2025 (consistent with bank “total operating income” concept). Values retrieved from S&P Global.
  • Given the lack of formal consensus, reported results are unlikely to trigger estimate revisions from the Street; internal models should reflect ongoing NIM stabilization, lower wholesale funding, and benign credit costs .

Key Takeaways for Investors

  • Earnings power inflected: EPS $0.84 (+52.4% YoY) on NIM expansion and disciplined funding costs; trend supports medium‑term ROE >17% in Q3 .
  • Dividend trajectory positive: quarterly dividend raised to $0.25 (4% increase), fourth annual raise since 2020; payout ratio 29.8% in Q3, leaving ample capital to grow .
  • Balance sheet quality: ACL/loans 1.12% and non‑accrual/loans 0.84% indicate solid credit coverage with declining NPL ratio YoY; net charge‑offs YTD near zero (−0.01%) .
  • Funding mix improving: borrowed funds down YoY; repurchase agreements lower than year‑end; brokered deposits used selectively; deposit pricing pressure stabilized, aiding NIM .
  • Equity accretion: book value per share rose to $19.64; OCI improvement as AFS unrealized losses narrowed by $5.2M YTD .
  • Growth runway: CRE and residential portfolios continue to expand; municipal loans steady; management focus on commercial lending and efficiency should sustain loan growth within risk appetite .
  • Risk watch: macro uncertainty and Canada trade policy could pressure certain customers; ALCO scenario analysis suggests modest NII sensitivity (−0.5% for −100 bps; −1.6% for +200 bps), manageable within policy limits .