Commercial Bancgroup's Net Interest Margin Expands Again

The Tip Desk · November 8, 2026 · 3 min read

Net interest income reached $22.5 million in the third quarter as the margin widened 8 basis points to 4.14% and net income rose to $10.9 million.

Commercial Bancgroup, Inc. (CBK), the Tennessee bank holding company, reported net income of $10.9 million, or $0.79 a share, for the third quarter of 2026, up from $9.5 million, or $0.77 a share, a year earlier. Core net income matched the GAAP figure.

The quarter’s operating turn was in net interest. Net interest income rose to $22.5 million from $21.5 million in the second quarter. The net interest margin expanded 8 basis points to 4.14%, after an 18-basis-point expansion to 4.06% in the prior quarter. The net interest rate spread widened to 3.50% from 3.44%. Average loan yield moved to 6.1% from 6.0%. Cost of total funding was 1.77%.

Loans outstanding net of deferred fees and discounts increased $42.8 million, or 2.2%, to $1.98 billion at September 30, 2026, after a $48.4 million, or 2.6%, increase in the prior quarter. Commercial real estate loans were $1.18 billion, or 59% of the book. Total deposits were $1.89 billion, up $14.2 million from June 30. Noninterest-bearing deposits were 21.63% of total deposits. The loan-to-deposit ratio rose to 104.07% from 102.60%.

The company said the year-over-year rise in pre-tax income was primarily the result of 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 was $2.7 million. The company attributed that increase primarily to ATM fees and bank-owned life insurance income. Noninterest expense was $11.0 million.

The core efficiency ratio improved to 43.68% from 44.99%. Return on average assets was 1.84% and return on average equity 14.16%, up from 1.78% and 13.73% in the second quarter. Book value per share rose $0.62, or 2.8%, to $22.71. Tangible book value per share was $21.92.

Credit costs stayed light. Provision for credit losses was $348 thousand, down from $399 thousand in the second quarter. Net charge-offs to average loans remained 0.00%. The allowance for credit losses to total loans was 0.96%. Nonperforming assets to total assets were 0.31%, unchanged from June 30. Nonaccrual loans were $6.7 million and nonperforming loans to total loans were 0.34%.

Total assets were $2.4 billion. Common equity Tier 1 capital was 14.69% and total risk-based capital 15.61%. Tangible common equity to tangible assets was 12.36%. The Bank exceeded minimum well-capitalized requirements, with 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%.

For the nine months ended September 30, 2026, net income was $30.6 million, or $2.23 a share, compared with $27.1 million, or $2.22 a share, a year earlier. Total operating revenue for the nine months was $72.4 million. Noninterest expense was $33.0 million. The core efficiency ratio for the nine months was 44.7%.