Third Quarter 2026
Filed Oct 26, 2026Commercial Bancgroup reported third-quarter net income of $10.9 million, or $0.79 per diluted common share, with net interest margin of 4.14% and loans outstanding net of deferred fees and discounts of $2.0 billion.
Third-quarter net income, net interest income, net interest margin, book value per share and loans outstanding net of deferred fees and discounts all increased from both the prior-year quarter and the second quarter, while nonperforming assets to total assets increased from the prior-year period.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net income, three months ended September 30, 2026GAAP | $10.87M | – | – |
| Core net income, three months ended September 30, 2026non-GAAP | $10.87M | – | – |
| Diluted earnings per share, three months ended September 30, 2026GAAP | $ 0.79 | – | – |
| Core net income per share diluted, three months ended September 30, 2026non-GAAP | $ 0.79 | – | – |
| Net interest income, three months ended September 30, 2026GAAP | $22.49M | – | – |
| Provision for credit losses, three months ended September 30, 2026GAAP | 348 | – | – |
| Net interest income after provision for credit losses, three months ended September 30, 2026GAAP | $22.14M | – | $1.9 million, or 9.5% |
| Noninterest income, three months ended September 30, 2026GAAP | $2.70M | – | $0.1 million, or 2.8% |
| Noninterest expense, three months ended September 30, 2026GAAP | $11.00M | – | $0.4 million, or 4.3% |
| Income before income taxes, three months ended September 30, 2026GAAP | $13.84M | – | $1.5 million, or 12.5% |
| Provision for income taxes, three months ended September 30, 2026GAAP | $2.97M | – | – |
| Total operating revenue, nine months ended September 30, 2026other | $72.42M | – | – |
| Net income, nine months ended September 30, 2026GAAP | $30.62M | – | – |
| Core net income, nine months ended September 30, 2026non-GAAP | $31.09M | – | – |
| Diluted earnings per share, nine months ended September 30, 2026GAAP | $ 2.23 | – | – |
| Core net income per share diluted, nine months ended September 30, 2026non-GAAP | $ 2.27 | – | – |
| Return on average assets, three months ended September 30, 2026GAAP | 1.84% | – | – |
| Return on average equity, three months ended September 30, 2026GAAP | 14.16% | – | – |
| Return on average tangible common equity, three months ended September 30, 2026non-GAAP | 14.68% | – | – |
| Net interest margin, three months ended September 30, 2026other | 4.14% | an increase of 8 basis points | – |
| Net interest rate spread, three months ended September 30, 2026other | 3.50% | – | – |
| Cost of total funding, three months ended September 30, 2026other | 1.77% | – | – |
| Efficiency ratio, three months ended September 30, 2026other | 43.68% | – | – |
| Core efficiency ratio, three months ended September 30, 2026non-GAAP | 43.68% | – | – |
| Total assets, as of September 30, 2026GAAP | $2.44B | – | – |
| Loans outstanding net of deferred fees and discounts, as of September 30, 2026GAAP | $1.98B | $42.8 million during the quarter, or 2.2% | $216.1 million, or 12.2% |
| Total deposits, as of September 30, 2026GAAP | $1.89B | – | $106.8 million, or 6.0% |
| Noninterest-bearing demand deposits, as of September 30, 2026GAAP | $408.2M | – | $9.6 million, or 2.4% |
| Core deposits, as of September 30, 2026non-GAAP | $1.73B | – | – |
| Other borrowings, as of September 30, 2026GAAP | $211.3M | – | – |
| Total shareholders' equity, as of September 30, 2026GAAP | $311.3M | – | – |
| Book value per share, as of September 30, 2026GAAP | $ 22.71 | increased $0.62, or 2.8% | – |
| Tangible book value per share, as of September 30, 2026non-GAAP | $ 21.92 | increased $0.64, or 3.0% | – |
| Total risk-based capital ratio, as of September 30, 2026other | 15.61% | – | – |
| Common equity tier 1 ratio, as of September 30, 2026other | 14.69% | – | – |
| Tangible common equity to tangible assets, as of September 30, 2026non-GAAP | 12.36% | – | – |
| Net charge-offs to average loans, three months ended September 30, 2026other | 0.00% | – | – |
| Nonperforming assets to total assets, as of September 30, 2026other | 0.31% | – | – |
| Allowance for credit losses to total loans, as of September 30, 2026other | 0.96% | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
What drove it
- Net income before income taxes increased primarily due 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, partially offset by a $0.4 million, or 4.3%, increase in noninterest expense.
- Noninterest income increased primarily due to increases in ATM fees and bank-owned life insurance income.
- The increase in non-brokered deposits was primarily driven by normal customer business cycles and deposit growth.
- Commercial real estate loans were $ 1,182,947 as of September 30, 2026, representing 59% of total loans.
Concerns
- Nonperforming assets to total assets were 0.31% as of September 30, 2026, compared with 0.27% as of September 30, 2025.
- Nonperforming loans were $ 6,686 and other real estate owned was $ 888 as of September 30, 2026.
- Special mention loans were $ 17,695 as of September 30, 2026, compared with $ 3,352 as of September 30, 2025.
- The allowance for credit losses to total loans was 0.96% as of September 30, 2026, compared with 1.02% as of September 30, 2025.
- The loan-to-deposit ratio was 104.07% as of September 30, 2026, compared with 98.24% as of September 30, 2025.
What to watch
- Loan growth, including the $ 1,182,947 commercial real estate loan portfolio and the $ 197,644 construction and land development loan portfolio.
- Deposit growth and funding, including total deposits of $ 1,887,395, core deposits of $ 1,731,907 and other borrowings of $ 211,325.
- Credit migration, including special mention loans of $ 17,695, substandard loans of $ 7,050 and nonperforming assets of $ 7,574.
- Net interest margin, which was 4.14% in the third quarter of 2026 compared with 4.06% in the second quarter of 2026.
Balance sheet and cash flow
- Cash and due from banks were $ 174,916 as of September 30, 2026, compared with $ 122,945 as of September 30, 2025 and $ 161,327 as of June 30, 2026.
- Total deposits were $ 1,887,395 and other borrowings were $ 211,325 as of September 30, 2026.
- Total shareholders' equity was $ 311,307 as of September 30, 2026.
- The Bank exceeded the minimum requirements to be well-capitalized for bank regulatory purposes as of September 30, 2026.
Analysis
Commercial Bancgroup produced higher third-quarter earnings, with GAAP net income of $ 10,868 and diluted earnings per share of $ 0.79, compared with $ 9,467 and $ 0.77 in the third quarter of 2025. Net income also rose from $ 10,216 in the second quarter of 2026. Core net income equaled GAAP net income in the quarter, as the reconciliation reported no non-recurring expense for the period.
The principal earnings driver was net interest income. Net interest income was $ 22,487, versus $ 20,222 in the prior-year quarter and $ 21,515 in the preceding quarter. Net interest margin was 4.14%, an increase of 8 basis points from the second quarter of 2026. Noninterest income was $ 2,699, with the company attributing its increase to ATM fees and bank-owned life insurance income. Noninterest expense was $ 11,001, and the core efficiency ratio improved to 43.68% from 46.18% in the third quarter of 2025.
Balance-sheet expansion continued. Loans outstanding net of deferred fees and discounts reached $ 1,983,326, up $216.1 million, or 12.2%, from September 30, 2025 and up $42.8 million during the quarter, or 2.2%. Total deposits reached $ 1,887,395, an increase of $106.8 million, or 6.0%, from the prior-year period, while other borrowings were $ 211,325. Book value per share was $ 22.71 and tangible book value per share was $ 21.92, each higher than at June 30, 2026.
Credit results were mixed. Net charge-offs to average loans were 0.00%, and the allowance for credit losses was $ 19,029. However, nonperforming assets to total assets were 0.31%, compared with 0.27% a year earlier, while special mention loans were $ 17,695 compared with $ 3,352 at September 30, 2025. The allowance for credit losses to total loans was 0.96%, below 1.02% a year earlier. The company reported no forward guidance or capital-return activity in the filing.
Not in the filing
stated, not guessed- Forward guidance was not provided.
- Previous-period outlook was not provided.
- Share repurchases were not reported.
- Dividends were not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Gross margin was not reported.
- Operating income was not reported.
- Reportable operating segments were not provided.
- Tax rate was not reported.
- Management quotes were not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.