Commercial Bancgroup, Inc. Announces Results for the First Quarter 2026 (Form 8-K)

Commercial Bancgroup, Inc. Announces Results for the First Quarter 2026

HARROGATE, TN -April 27, 2026 - Commercial Bancgroup, Inc. ("Commercial" or the "Company") (Nasdaq: CBK), the parent company of Commercial Bank (the "Bank"), today announced net income of $9.5 million, or $0.70 per common share, for the first quarter of 2026, compared to net income of $8.7 million, or $0.72 per common share, for the first quarter of 2025. Core (net of any one-time adjustments) net income was 10.0 million, or $0.73 per common share, for the first quarter of 2026, compared to core net income of $8.7 million, or $0.72 per common share, for the first quarter of 2025.

Prior to Commercial's initial public offering ("IPO") of it's common stock in October 2025, Commercial had three classes of common stock outstanding: common stock, Class B common stock, and Class C common stock. On September 18, 2025, Commercial's charter was amended and restated. The Company's amended and restated charter provided for, among other things:

	●	effective upon the filing of the amended and restated charter, the reclassification and conversion of (i) each outstanding share of Class B common stock into 1.15 shares of common stock and (ii) each outstanding share of Class C common stock into 1.05 shares of common stock (collectively, the "Stock Reclassification"); and

●

effective immediately following the Stock Reclassification, a 250-for-1 forward stock split in respect of the outstanding shares of our common stock (the "Stock Split").

Our financial statements, including earnings per share and book value per share, reflect the stock Reclassification and Stock Split retroactively. Because the IPO occurred after September 30, 2025, the financial impacts of the IPO are reflected for the fourth quarter of 2025 in the financial statements presented in this press release.

First Quarter 2026 Performance Highlights:

●

Net income of $9.5 million or $0.70 per common share; Core net income of $10.0 million or $0.73 per common share (see non-GAAP reconciliation)

●

Return on average assets ("ROAA") of 1.66%; Core return on average assets of 1.74% share (see non-GAAP reconciliation)

●

Return on average equity ("ROAE") of 13.22%; Core return on average equity of 13.87% share (see non-GAAP reconciliation)

●

Return on average tangible common equity ("ROATCE") of 13.76%; Core return on average tangible common equity of 14.44% (see non-GAAP reconciliation)

●

Net interest margin of 3.88%, a decrease of 13 basis points from the fourth quarter of 2025

●

Core efficiency ratio of 45.45% share (see non-GAAP reconciliation)

●

Total loans increased $18.1 million during the quarter, or 4.0% annualized, from the fourth quarter of 2025

●

Book value per share increased $0.60, or 11.5% annualized, to $21.43 and tangible book value per share increased $0.62, or 12.4% annualized, to $20.60 at March 31, 2026 from the $20.83 and $19.98, respectively, at December 31, 2025 (see non-GAAP reconciliation)

●

Net charge-offs to average loans of 0.01% and nonperforming assets to total assets of 0.28%

●

Redeemed $6.2 million in principal amount of trust preferred securities

Year-Over-Year Highlights:

●

Net income of $9.5 million or $0.70 per share for the three months ended March 31, 2026, compared to $8.7 million or $0.72per share for the three months ended March 31, 2025.

●

Return on average assets of 1.66% for the three months ended March 31, 2026, compared to 1.52% for the three months ended March 31, 2025.

●

Return on average shareholders' equity of 13.22% for the three months ended March 31, 2026, compared to 15.81% for the three months ended March 31, 2025.

●

Total operating revenue of $23.1 million for the three months ended March 31, 2026, compared to $21.8 million for the three months ended March 31, 2025.

●

Non-interest expense of $11.1 million for the three months ended March 31, 2026, compared to $10.6 million for the three months ended March 31, 2025.

●

Tangible book value per share of $20.60 per share as of March 31, 2026, compared to $17.45 per share as of March 31, 2025 (see non-GAAP reconciliation).

●

Core Efficiency ratio of 45.5% for the three months ended March 31, 2026, compared to 48.6% for the three months ended March 31, 2025.

●

The Federal Reserve Bank of Atlanta raised the Bank's Community Reinvestment Act rating from Needs to Improve to Satisfactory.

Balance Sheet Trends

Total assets were $2.3 billion as of March 31, 2026, compared to $2.3 billion as of March 31, 2025.

Total net loans were $1.9 billion as of March 31, 2026, an increase of $96.8 million, or 5.4%, from March 31, 2025. While the Bank experienced various large loan payoffs from long-term borrowers selling businesses during 2025, the Bank had strong loan growth during the fourth quarter of 2025. Total net loans increased by $18.4 million or 1.0% from $1.9 billion as of December 31, 2025.

As of March 31, 2026, the Bank exceeded the minimum requirements to be well-capitalized for bank regulatory purposes, with a total risk-based capital ratio of 14.0%, a Tier 1 risk-based capital ratio of 13.0%, a common equity Tier 1 capital ratio of 13.0%, and a Tier 1 leverage ratio of 11.1%.

Total deposits were $1.9 billion as of March 31, 2026, a decrease of $10.0 million, or 0.5%, from March 31, 2025. This decrease was primarily driven by a $103.8 million reduction in brokered deposits to $41.5 million at March 31, 2026, from $145.3 million at March 31, 2025.

Noninterest bearing demand deposits decreased $16.7 million, or 4.0%, to $403.0 million as of March 31, 2026, from $419.8 million as of March 31, 2025.

Non-brokered deposits were $1.9 billion as of March 31, 2026, an increase of $93.9 million, or 5.3%, from March 31, 2025. This increase was primarily driven by normal customer business cycles.

Asset quality decreased slightly with nonperforming assets to total assets of 0.28% as of March 31, 2026 as compared to 0.24% as of March 31, 2025. The allowance for credit losses to total loans decreased slightly to 0.97% as of March 31, 2026 from 1.01% as of March 31, 2025.

Net Income Before Income Taxes

Net income before income taxes was $11.9 million for the three months ended March 31, 2026, an increase of $0.7 million, or 5.9%, from the three months ended March 31, 2025. The increase was primarily the result of an increase in net interest income after provision for credit losses of $1.0 million or 5.3% an increase in non-interest income of $0.2 million or 6.1% net of an increase of noninterest expense of $0.5 million or 4.8%.

Non-Interest Income

Non-interest income was $2.6 million for the three months ended March 31, 2026, an increase of $0.2 million, or 6.1%, as compared to the three months ended March 31, 2025. This increase was primarily due to an increase in customer service and ATM fees.

About Commercial Bancgroup, Inc.

Commercial Bancgroup, Inc. is a bank holding company headquartered in Harrogate, Tennessee. Through our wholly owned subsidiary, Commercial Bank, a Tennessee state-chartered bank, we offer a suite of traditional consumer and commercial banking products and services to businesses and individuals in select markets in Kentucky, North Carolina, and Tennessee. More information about Commercial can be found on its website at www.cbtn.com.

Commercial Bancgroup, Inc.

Financial Tables

Financial Highlights (unaudited)

Table 1A

		For the Three Months Ended																				As of and for the Twelve Months Ended
(dollars in thousands except per share amounts)		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2025				December 31, 2024
Selected Operating Data:
Interest and Dividend Income		$	29,463			$	29,958			$	30,021			$	30,859			$	30,766			$	121,604			$	123,213
Interest Expense			8,985				9,148				9,799				10,800				11,426				41,173				45,629
Net Interest Income			20,478				20,810				20,222				20,059				19,340				80,431				77,584
Provision for Credit Losses			122				463				-				-				-				463				1,829
Net Interest Income After
Provision for Credit Losses			20,356				20,347				20,222				20,059				19,340				79,968				75,755
Noninterest Income			2,591				2,667				2,626				2,194				2,443				9,930				10,878
Noninterest Expense			11,087				10,623				10,552				10,725				10,581				42,480				46,061
Income Before Income Taxes			11,860				12,391				12,296				11,528				11,202				47,418				40,572
Provision for Income Taxes			2,326				2,224				2,829				2,658				2,510				10,221				8,886
Net Income			9,534				10,167				9,467				8,870				8,692				37,197				31,686
Less: Net Income Attributable to Noncontrolling Interest			-				-				-				-				-				-				276
Net Income attributable to Commercial Bancgroup, Inc.			9,534				10,167				9,467				8,870				8,692				37,197				31,410
Add: Non-recurring Expense Net of Taxes			470				-				-				-				-				231				-
Core Net Income (1)			10,004				10,167				9,467				8,870				8,692				37,428				31,410

(1)

Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of non-GAAP financial measures at table 10

Financial Highlights (unaudited)

		For the Three Months Ended																				As of and for the Twelve Months Ended
		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2025				December 31, 2024
Share and Per Share Data:
Basic earnings per share		$	0.70			$	0.74			$	0.77			$	0.72			$	0.72			$	2.95			$	2.58
Diluted earnings per share		$	0.69			$	0.74			$	0.77			$	0.72			$	0.72			$	2.95			$	2.54
Book value per share		$	21.43			$	20.83			$	20.03			$	19.22			$	18.48			$	20.83			$	18.18
Tangible book value per share (1)		$	20.60			$	19.98			$	19.05			$	18.22			$	17.45			$	19.98			$	17.11
Shares of common stock outstanding			13,697,987				13,697,987				12,239,644				12,239,644				12,239,644				13,697,987				12,113,114
Weighted average diluted shares outstanding			13,746,198				13,704,030				12,240,568				12,239,644				12,137,013				12,611,170				12,367,248

(1)

Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of non-GAAP financial measures at table 10

Financial Highlights (unaudited)

		As of and for the Three Months Ended																				As of and for the Twelve Months Ended
(dollars in thousands)		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2025				December 31, 2024
Selected Balance Sheet Data:
Total assets		$	2,328,789			$	2,291,455			$	2,214,408			$	2,262,511			$	2,266,878			$	2,291,455			$	2,301,211
Securities available-for-sale at fair value			42,175				43,137				29,556				30,113				48,830				43,137				47,938
Securities held-to-maturity, at carrying value, net of allowance for credit losses			96,387				97,728				131,915				157,452				140,019				97,728				128,217
Gross loans less deferred fees and discounts			1,892,174				1,873,533				1,767,193				1,791,516				1,795,178				1,873,533				1,806,997
Allowance for credit losses			18,329				18,096				17,942				17,989				18,109				18,096				18,205
Goodwill and other intangible assets			12,392				12,767				13,149				13,546				13,938				12,767				14,339
Total deposits			1,892,217				1,815,734				1,780,634				1,851,248				1,902,206				1,815,734				1,938,597
Core deposits (1)			1,733,718				1,665,470				1,631,921				1,628,816				1,659,301				1,665,470				1,669,380
Other borrowings			118,248				166,838				162,760				148,509				109,090				166,838				109,165
Total Shareholders' equity			293,518				285,344				245,153				235,268				226,179				285,344				220,256

(1)

Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of non-GAAP financial measures at table 10

Financial Highlights (unaudited)

Table 1B

		As of and for the Three Months Ended																				As of and for the Twelve Months Ended
(dollars in thousands)		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2025				December 31, 2024
Performance Ratios:
Pre-tax pre-provision net revenue (PPNR) (1)		$	11,982			$	12,854			$	12,296			$	11,528			$	11,202			$	47,880			$	42,401
Return on average assets (ROAA)			1.66				1.76				1.69				1.57				1.52				1.61				1.40
Return on average equity (ROAE)			13.22				15.46				15.81				15.57				15.81				15.60				15.30
Return on average tangible common equity (ROATCE) (1)			13.76				16.40				16.65				16.43				16.75				16.55				16.49
Net interest rate spread			3.27				3.34				3.32				3.11				2.98				3.20				3.05
Net interest margin			3.88				4.01				4.02				3.84				3.63				3.87				3.75
Cost of Funds			1.82				1.88				2.07				2.18				2.25				2.10				2.31
Efficiency ratio			45.45				45.24				46.19				48.20				48.57				47.01				48.92
Noninterest income to average assets			0.45				0.47				0.48				0.39				0.43				0.44				0.49
Noninterest expense to average assets			1.93				1.87				1.94				1.91				1.85				1.90				2.08
Average interest-earning assets to average interest-bearing liabilities			1.36				1.39				1.36				1.31				1.30				1.34				1.32
Average equity to average total assets			0.13				0.12				0.11				0.10				0.10				0.11				0.09

(1)

Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of non-GAAP financial measures at table 10

Financial Highlights (unaudited)

		As of and for the Three Months Ended																				As of and for the Twelve Months Ended
		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2025				December 31, 2024
Asset Quality Data:
Net charge-offs to average loans			0.01	%			0.01	%			0.00	%			0.01	%			0.01	%			0.03	%			0.01	%
Total allowance for credit losses to total loans			0.97	%			0.97	%			1.02	%			1.00	%			1.01	%			0.97	%			1.01	%
Total allowance for credit losses to nonperforming loans			313	%			290	%			333	%			307	%			375	%			313	%			375	%
Nonperforming loans to gross loans			0.31	%			0.33	%			0.31	%			0.33	%			0.27	%			0.31	%			0.27	%
Nonperforming assets to total assets			0.28	%			0.28	%			0.27	%			0.30	%			0.24	%			0.28	%			0.24	%

		As of and for the Three Months Ended																				As of and for the Twelve Months Ended
		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2025				December 31, 2024
Balance Sheet and Capital Ratios (Commercial Bancgroup, Inc.):
Loan-to-deposit ratio			99.03	%			102.19	%			99.25	%			96.77	%			94.37	%			102.19	%			93.21	%
Noninterest bearing deposits to total deposits			21.22	%			21.91	%			22.39	%			22.53	%			22.05	%			21.91	%			20.46	%
Total shareholders'equity to total assets			12.60	%			12.45	%			11.07	%			10.40	%			9.98	%			12.45	%			9.57	%
Tangible common equity to tangible assets (1)			12.18	%			12.01	%			10.59	%			9.92	%			9.48	%			12.01	%			9.07	%
Tier 1 leverage ratio			12.32	%			12.19	%			11.03	%			10.22	%			9.63	%			12.19	%			9.51	%
Common equity tier 1 ratio			14.73	%			14.99	%			12.83	%			12.26	%			11.62	%			14.99	%			11.11	%
Total risk-based capital ratio			15.68	%			15.96	%			14.12	%			13.55	%			12.90	%			15.96	%			12.37	%
Other
Number of branches			34				34				34				34				34				34				34
Number of full-time equivalent employees			287				287				287				289				284				287				279

(1)

Considered non-GAAP financial measure - See "Non-GAAP Financial Measures" and reconciliation of non-GAAP financial measures at table 10

Quarter End Balance Sheets (unaudited)

Table 2

(dollars in thousands)		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025
Assets
Cash and due from banks		$	151,610			$	118,989			$	122,945			$	108,501			$	113,190
Federal funds sold			16,784				25,329				31,841				42,782				37,303
Investment securities			138,562				140,865				161,471				187,565				188,849
Gross loans less deferred fees and discounts			1,892,174				1,873,533				1,767,193				1,791,516				1,795,178
Allowance for credit losses			(18,329	)			(18,096	)			(17,942	)			(17,989	)			(18,109	)
Loans, net of alloawance for credit losses			1,873,845				1,855,437				1,749,251				1,773,527				1,777,069
Premises and equipment, net			49,445				49,765				50,268				50,337				50,038
Foreclosed assets held for sale, net			575				253				533				861				565
Bank owned life insurance			46,469				46,648				46,482				46,480				46,191
Goodwill and other intangible assets			12,392				12,767				13,149				13,546				13,938
Deferred tax asset			1,056				1,003				1,427				1,029				1,029
Other			38,049				40,399				37,041				37,883				38,706
Total Assets		$	2,328,789			$	2,291,455			$	2,214,408			$	2,262,511			$	2,266,878
Liabilities and Shareholders' Equity
Liabilities
Deposits
Demand			973,678				913,986				928,958				926,886				960,915
Savings, NOW and money market			415,132				414,716				382,002				382,788				390,491
Time			503,408				487,032				469,674				541,574				550,800
Total deposits			1,892,217				1,815,734				1,780,634				1,851,248				1,902,206
Short-term borrowings			45,068				88,251				62,663				46,300				5,900
Long-term debt			73,181				78,587				100,097				102,209				103,190
Interest Payable			2,644				2,962				3,410				4,545				5,157
Other Liabilities			22,161				20,576				22,451				22,941				24,246
Total Liabilites			2,035,271				2,006,110				1,969,255				2,027,243				2,040,699
Shareholders' Equity
Common stock			137				137				122				122				122
Additional paid-in capital			38,536				38,377				8,406				8,406				8,406
Retained earnings			255,670				247,505				237,366				227,900				219,000
Accumulated other comprehensive loss			(825	)			(675	)			(741	)			(1,160	)			(1,349	)
Total Shareholders'equity			293,518				285,344				245,153				235,268				226,179
Total liabilities and shareholders' equity		$	2,328,789			$	2,291,454			$	2,214,408			$	2,262,511			$	2,266,878

Statement of Operations (unaudited)

Table 3

		For the Three Months Ended																				As of and for the Twelve Months Ended
(dollars in thousands)		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2025				December 31, 2024
Interest and Dividend Income
Loans, including fees		$	27,675			$	27,866			$	28,074			$	28,432			$	27,930			$	112,301			$	113,391
Debt securities-taxable			838				739				929				1,070				975				3,714				2,679
Debt securities-tax-exempt			114				114				102				116				110				442				368
Dividends on restricted stock			147				157				156				148				160				621				700
Interest-bearing deposits			689				1,082				760				1,093				1,591				4,526				6,075
Total interest and dividend income			29,463				29,958				30,021				30,859				30,766				121,604				123,213
Interest expense
Deposits			8,315				8,441				8,654				9,717				10,294				37,107				40,352
Short-term borrowings			47				18				55				44				31				148				205
Long-term debt			623				689				1,090				1,039				1,101				3,919				5,072
Total interest expense			8,985				9,148				9,799				10,800				11,426				41,174				45,629
Net interest income			20,478				20,810				20,222				20,059				19,340				80,430				77,584
Provision for credit losses			122				463				-				-				-				463				1,829
Net interest income after provision for credit losses			20,356				20,347				20,222				20,059				19,340				79,967				75,755
Noninterest Income
Customer service fees			781				779				735				674				655				2,844				3,041
Net gains on sales of premises and equipment			-				44				20				2				(28	)			38				759
Net gains on sales of foreclosed assets			107				48				110				1				3				161				153
ATM fees			854				877				846				891				799				3,413				3,281
Increase in BOLI			312				342				306				336				308				1,292				1,199
Other			537				577				609				290				706				2,182				2,445
Total noninterest income			2,591				2,667				2,626				2,194				2,443				9,930				10,878

Statement of Operations (unaudited)

Table 3

		For the Three Months Ended																				As of and for the Twelve Months Ended
(dollars in thousands)		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2025				December 31, 2024
Noninterest Expense
Salaries and employee benefits		$	5,716			$	5,753			$	5,729			$	5,657			$	5,626			$	22,764			$	24,873
Occupancy			843				877				738				774				875				3,264				3,786
Data processing			1,101				1,068				1,103				1,151				1,207				4,530				4,235
Deposit insurance premiums			242				234				267				245				226				972				1,129
Professional fees			209				229				136				286				195				846				1,017
Depreciation and amortization			933				1,001				955				803				948				3,706				4,109
Other			1,440				1,461				1,624				1,809				1,504				6,398				6,912
Loss on retirement of debt			603				-				-				-				-				-				-
Total noninterest expense			11,087				10,623				10,552				10,725				10,581				42,480				46,061
Income before income taxes			11,860				12,391				12,296				11,528				11,202				47,417				40,572
Provision for income taxes			2,326				2,224				2,829				2,658				2,510				10,221				8,886
Net Income			9,534				10,167				9,467				8,870				8,692				37,196				31,686
Less: Net Income Attributable to Noncontrolling Interest			-				-				-				-				-				-				276
Net Income attributable to Commercial Bancgroup, Inc.		$	9,534			$	10,167			$	9,467			$	8,870			$	8,692			$	37,196			$	31,410

QTD Average Balances and Yields/Rates (unaudited)

Table 4

		Three Months Ended
		March 31, 2026												December 31, 2025
(dollars in thousands)		Average Balance				Interest				Yield/ Rate				Average Balance				Interest				Yield/ Rate
Interest Earning Assets
Gross loans, net of unearned income		$	1,883,103			$	27,675				5.9	%		$	1,807,127			$	27,866				6.2	%
Investment securities			140,223				1,099				3.1	%			152,782				1,011				2.6	%
Other interest-earning assets			85,953				689				3.2	%			116,517				1,081				3.7	%
Total interest-earning assets			2,109,279				29,463				5.6	%			2,076,426				29,958				5.8	%
Noninterest-earning assets:
Allowance for credit losses			(18,283	)											(17,954	)
Noninterest-earning assets			205,119												190,810
Total Assets			2,296,115												2,249,282
Interest-bearing liabilities:
Interest-bearing DDAs			575,981				2,809				1.95	%			518,495				2,647				2.0	%
NOW, savings and MMDA deposits			412,533				1,425				1.38	%			427,419				1,585				1.5	%
Time Deposits			479,804				4,081				3.40	%			475,972				4,209				3.5	%
Federal Home Loan bank advances			60,522				467				3.09	%			60,781				444				2.9	%
Other borrowings			20,355				203				3.99	%			24,953				263				4.2	%
Total interest-bearing liabilities			1,549,195				8,985				2.32	%			1,507,620				9,148				2.4	%
Noninterest bearing liabilites:
Noninterest bearing deposits			430,842												434,578
Other liabilities			27,593												47,299
Total noninterest bearing liabilities			458,435												481,877
Shareholders' equity			288,485												259,785
Total liabilities and shareholders's equity			2,296,115												2,249,282
Net interest income							20,478												20,810
Net interest spread											3.27	%											3.32	%
Net interest margin											3.88	%											4.02	%
Cost interest bearing deposits											2.32	%											2.37	%
Cost of funds											1.82	%											2.43	%

YTD Average Balances and Yields/Rates (unaudited)

Table 5

		Three Months Ended
		March 31, 2026												March 31, 2025
(dollars in thousands)		Average Balance				Interest				Yield/ Rate				Average Balance				Interest				Yield/ Rate
Interest Earning Assets
Gross loans, net of unearned income			1,883,103				27,675				5.9	%			1,794,477				27,930				6.2	%
Investment securities			140,223				1,099				3.1	%			186,604				1,245				2.7	%
Other interest-earning assets			85,953				689				3.2	%			150,891				1,591				4.2	%
Total interest-earning assets			2,109,279				29,463				5.6	%			2,131,972				30,766				5.8	%
Noninterest-earning assets:
Allowance for credit losses			(18,283	)											(18,109	)
Noninterest-earning assets			205,119												176,014
Total Assets			2,296,115												2,289,877
Interest-bearing liabilities:
Interest-bearing DDAs			575,981				2,809				2.0	%			581,411				3,326				2.3	%
NOW, savings and MMDA deposits			412,533				1,425				1.4	%			383,685				1,435				1.5	%
Time Deposits			479,804				4,081				3.4	%			564,710				5,533				3.9	%
Federal Home Loan bank advances			60,522				467				3.1	%			64,361				442				2.7	%
Other borrowings			20,355				203				4.0	%			43,951				690				6.3	%
Total interest-bearing liabilities			1,549,195				8,985				2.3	%			1,638,118				11,426				2.8	%
Noninterest bearing liabilites:
Noninterest bearing deposits			430,842												395,414
Other liabilities			27,593												36,110
Total noninterest bearing liabilities			458,435												431,524
Shareholders' equity			288,485												219,940
Total liabilities and shareholders's equity			2,296,115												2,289,582
Net interest income							20,478												19,340
Net interest spread											3.27	%											2.98	%
Net interest margin											3.88	%											3.63	%
Cost of total deposits											2.32	%											2.79	%
Cost of total funding											1.82	%											2.25	%

Loan Data (unaudited)

Table 6

		As of Quarter Ended
		March 31, 2026								December 31, 2025								September 30, 2025								June 30, 2025								March 31, 2025
(dollars in thousands)		Amount				% of Total				Amount				% of Total				Amount				% of Total				Amount				% of Total				Amount				% of Total
Real Estate Loans
Commercial		$	1,114,516				58.7	%		$	1,113,440				59.2	%		$	1,002,192				56.5	%		$	1,016,229				57	%		$	1,029,444				57	%
Construction and land development			195,189				10.3	%			176,688				9.4	%			201,399				11	%			189,187				11	%			180,066				10	%
Residential			383,346				20	%			377,943				20	%			376,769				21	%			376,442				21	%			372,338				21	%
Other			14,511				1	%			14,824				1	%			14,831				1	%			15,290				1	%			16,406				1	%
Commercial			171,029				9	%			174,248				9	%			154,732				9	%			178,832				10	%			182,186				10	%
Consumer			12,260				1	%			15,417				1	%			16,009				1	%			14,636				1	%			14,908				1	%
Other			7,237				0	%			7,450				0	%			7,642				0	%			7,772				0	%			7,505				0	%
Total loans			1,898,088				100	%			1,880,010				100	%			1,773,574				100	%			1,798,388				100	%			1,802,853				100	%
Deferred loan fees and discounts			5,914								6,477								6,381								6,872								7,675
Allowance for credit Losses			18,329								18,096								17,942								17,989								18,109
Loans, net			1,873,845								1,855,437								1,749,251								1,773,527								1,777,069

Nonperforming Assets (unaudited)

Table 7

		As of the Quarter Ended
(dollars in thousands)		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025
Nonaccrual loans		$	5,861			$	6,245			$	5,390			$	5,846			$	4,808
Past due loans 90 days and still accruing			-				-				-				6				20
Total nonperforming loans			5,861				6,245				5,390				5,852				4,828
Other real estate owned			575				253				533				861				565
Total nonperforming assets		$	6,436			$	6,498			$	5,923			$	6,713			$	5,393
Allowance for credit losses		$	18,329			$	18,096			$	17,942			$	17,989			$	18,109
Total loans outstanding at end of period net of deferred loan fees and discounts		$	1,892,174			$	1,873,533			$	1,767,193			$	1,791,516			$	1,795,178
Nonperforming loans to total loans			0.31	%			0.33	%			0.31	%			0.33	%			0.27	%
Nonperforming assets to total loans and OREO			0.34	%			0.35	%			0.34	%			0.37	%			0.30	%
Allowance for credit losses to nonperforming loans			313	%			290	%			333	%			307	%			375	%
Allowance for credit losses to total loans			0.97	%			0.97	%			1.02	%			1.00	%			1.01	%
Nonaccrual loans to total assets			0.25	%			0.27	%			0.24	%			0.26	%			0.21	%

Allowance for credit losses (unaudited)

Table 8

		As of and for the Three Months Ended																				As of and for the Twelve Months Ended
(dollars in thousands)		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2025				December 31, 2024
Average loans outstanding		$	1,883,103			$	1,807,127			$	1,767,379			$	1,795,846			$	1,794,477			$	1,791,550			$	1,738,433
Total loans outstanding at end of period net of deferred loan fees and discounts			1,892,174				1,873,533				1,767,193				1,791,516				1,795,178				1,873,533				1,806,997
ACL balance, beginning of period			18,096				17,942				17,989				18,109				18,205				18,205				16,635
Charge-offs:
Commercial real estate			-				(284	)			-				(18	)			-				(301	)			(49	)
Construction and land development			-				-				-								-
Residential real estate			-				-				-				(121	)			-				(121	)			(52	)
Commercial			-				(48	)			-				-				(314	)			(362	)			(177	)
Consumer and other			(15	)			(13	)			(186	)			(34	)			(17	)			(251	)			(151	)
Total charge-offs			(15	)			(345	)			(186	)			(173	)			(331	)			(1,035	)			(429	)
Recoveries:
Commercial real estate			114				-				108				33				10				151				75
Construction and land development			-				-				-				-				202				201
Residential real estate			-				20				26				2				16				64				9
Commercial			1				7				1				3				-				11				54
Consumer and other			11				56				4				15				7				83				32
Total recoveries			126				83				139				53				235				510				170
Net (charge-offs) recoveries			111				(262	)			(47	)			(120	)			(96	)			(525	)			(259	)
Provision for credit losses			122				416				-				-				-				416				1,829
ACL balance at end of period		$	18,329			$	18,096			$	17,942			$	17,989			$	18,109			$	18,096			$	18,205
Ratio of allowance to end of period loans			0.97	%			0.97	%			1.02	%			1.00	%			1.01	%			0.97	%			1.01	%
Ratio of net (charge-offs) recoveries to average loans			0.01	%			-0.01	%			0.00	%			-0.01	%			-0.01	%			-0.03	%			-0.01	%

Loan Risk Ratings (unaudited)

Table 9

		As of the Quarter Ended
(dollars in thousands)		March 31, 2026				December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025
Real Estate Loans
Commercial
Pass		$	1,105,529			$	1,104,532			$	999,788			$	1,012,190			$	1,023,884
Special mention			8,897				8,814				1,776				2,515				4,182
Substandard			90				94				628				1,524				1,378
Total Commercial		$	1,114,516			$	1,113,440			$	1,002,192			$	1,016,229			$	1,029,444
Construction and land development
Pass		$	194,983			$	176,014			$	201,363			$	189,149			$	180,066
Special mention			171				78				-				-				-
Substandard			35				596				36				38				-
Total Construction and land development		$	195,189			$	176,688			$	201,399			$	189,187			$	180,066
Residential
Pass		$	377,179			$	371,583			$	371,226			$	371,353			$	367,216
Special mention			545				833				838				849				854
Substandard			5,622				5,527				4,705				4,240				4,268
Total Residential		$	383,346			$	377,943			$	376,769			$	376,442			$	372,338
Other
Pass		$	14,511			$	14,824			$	14,831			$	15,290			$	16,406
Special mention			-				-				-								-
Substandard			-				-				-				-				-
Total Other		$	14,511			$	14,824			$	14,831			$	15,290			$	16,406
Commercial
Pass		$	170,093			$	173,324			$	153,819			$	177,969			$	181,255
Special mention			701				793				733				747				808
Substandard			235				131				180				116				123
Total Commercial		$	171,029			$	174,248			$	154,732			$	178,832			$	182,186
Consumer
Pass		$	12,162			$	15,317			$	15,974			$	14,594			$	14,866
Special mention			44				21				5				6				7
Substandard			54				79				30				36				35
Total Consumer		$	12,260			$	15,417			$	16,009			$	14,636			$	14,908
Other
Pass		$	7,237			$	7,451			$	7,642			$	7,773			$	7,506
Special mention			-				-				-								-
Substandard			-				-				-				-				-
Total Other		$	7,237			$	7,451			$	7,642			$	7,773			$	7,506
Total loans
Pass		$	1,881,694			$	1,863,045			$	1,764,643			$	1,788,318			$	1,791,199
Special mention			10,358				10,539				3,352				4,117				5,851
Substandard			6,036				6,427				5,579				5,954				5,804
Total Gross loans		$	1,898,088			$	1,880,011			$	1,773,574			$	1,798,389			$	1,802,854

Non-GAAP Financial Measures