KNOXVILLE, Tenn., Jan. 20, 2026 /PRNewswire/ -- Mountain Commerce Bancorp, Inc. (the "Company") (OTCQX: MCBI), the holding company for century-old Mountain Commerce Bank (the "Bank"), today announced financial results and related data as of and for the three and twelve months ended December 31, 2025.
The Company also announced today that its Board of Directors declared a quarterly cash dividend of $0.07 per common share, its twenty-first consecutive quarterly dividend. The dividend is payable on March 2, 2026 to shareholders of record as of the close of business on February 2, 2026.
Management Commentary
William E. "Bill" Edwards, III, Chief Executive Officer of the Company, commented as follows:
"We are pleased to see our earnings continue to improve with adjusted return on average assets and equity rising to 0.67% and 8.60%, respectively, for the twelve months ended 2025, compared to 0.45% and 6.22%, respectively, for the twelve months ended 2024. We continued to see further improvements in our net interest margin, which improved from 2.01% for the twelve months ended 2024 to 2.44% for the twelve months ended 2025.
While we have experienced an increase in non-performing assets in 2025, we believe these assets are well collateralized and do not represent a risk of material loss to the Company. Our adjusted noninterest expense to average assets was 1.52% for the twelve months ended 2025, which continues to be nearly half that of similarly-sized peer banks based on recent call report data. We saw an increase in non-interest expense in the fourth quarter of 2025 primarily attributable to merger-related expenses associated with our proposed merger with Home Bancshares, as well as certain non-recurring repairs and maintenance performed on buildings and properties owned by the Company. Additionally, the Company recognized a provision for credit losses of $0.6 million in the fourth quarter of 2025. Careful management of our dividend and asset growth has allowed our tangible common equity to tangible assets ratio to rise to 8.22% at December 31, 2025 from 7.58% at December 31, 2024, with the Bank's leverage ratio finishing the fourth quarter of 2025 at 9.17%. Additionally, tangible book value per share rose to $22.80 as of December 31, 2025 from $20.70 as of December 31, 2024, marking a 10.15% increase.
In summary, we will seek to continue to carefully control our risk and growth while targeting net interest margin expansion and earnings growth in 2026. Our modeling and forecasting suggest continued year-over-year improvement in earnings, assuming the current macro-economic conditions do not deteriorate."
Proposed Merger Update
On December 8, 2025, the Company and Home Bancshares announced that they had entered into a definitive agreement providing for the acquisition of the Company by Home Bancshares in an all-stock merger transaction with Home Bancshares as the surviving entity. Under the terms of the merger agreement, the Company's shareholders will receive 0.85 shares of Home Bancshares' common stock for each share of the Company's common stock owned by the shareholder at the effective time of the merger.
Home Bancshares and its subsidiary bank, Centennial Bank, have filed all required bank regulatory applications related to the proposed merger and Home Bancshares has filed a registration statement with the Securities and Exchange Commission related to the proposed transaction, which has not yet been declared effective by the SEC.
The Company's proposed merger with Home Bancshares is expected to close early in the first half of 2026, subject to the satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by the Company's shareholders.
Regarding the proposed merger, Mr. Edwards commented, "I remain excited for our proposed combination with Home Bancshares and am pleased with the progress we and Home have made in filing the required regulatory applications and our respective initial efforts to develop integration plans that I believe will result in a smooth transaction for our customers and communities. I've also enjoyed talking to our customers about the potential benefits that they will enjoy as a result of our combination with Home and believe our team is thrilled with the idea of combining with a bank of Centennial's caliber and operating philosophy. I also continue to believe that our combination with Home will reward our shareholders, many of whom have been owners of our company since its founding, with, among other benefits, an increased dividend and additional liquidity for their shares."
Highlights
The following tables highlight the trends that the Company believes are most relevant to understanding the performance of the Company as of and for the three and twelve months ended December 31, 2025. As further detailed in Appendix A and Appendix C to this press release, adjusted results (which are non-GAAP financial measures), reflect adjustments for realized and unrealized investment gains and losses, gains and losses from the sale of fixed assets and other real estate owned, corporate and strategic planning expenses, including merger-related expenses, the provision for or recovery of credit losses, and net loan charge-offs or recoveries. See Appendix B to this press release for more information on the Company's tax equivalent net interest margin. All financial information in this press release is unaudited.
For the Three Months Ended December 31 | |||||||||
(Dollars in thousands, except per share data) | |||||||||
2025 | 2024 | ||||||||
GAAP | Adjusted (1) | GAAP | Adjusted (1) | ||||||
Net income | $ | 2,304 | 2,915 | $ | 2,092 | 2,481 | |||
Diluted earnings per share | $ | 0.37 | 0.46 | $ | 0.33 | 0.39 | |||
Return on average assets (ROAA) | 0.52 % | 0.65 % | 0.47 % | 0.56 % | |||||
Return on average equity | 6.34 % | 8.02 % | 6.32 % | 7.49 % | |||||
Noninterest expense to average assets | 1.67 % | 1.61 % | 1.40 % | 1.40 % | |||||
Net interest margin (tax equivalent) | 2.54 % | 2.54 % | 2.29 % | 2.29 % | |||||
Pre-tax, pre-provision earnings (1) | $ | 3,556 | $ | 3,441 | |||||
Pre-tax, pre-provision ROAA (1) | 0.80 % | 0.78 % | |||||||
(1) Represents a non-GAAP financial measure. See Appendix A to this press release for more information. | |||||||||
For the Twelve Months Ended December 31 | |||||||||
(Dollars in thousands, except per share data) | |||||||||
2025 | 2024 | ||||||||
GAAP | Adjusted (1) | GAAP | Adjusted (1) | ||||||
Net income | $ | 11,187 | 12,025 | $ | 8,923 | 7,946 | |||
Diluted earnings per share | $ | 1.78 | 1.91 | $ | 1.42 | 1.27 | |||
Return on average assets (ROAA) | 0.63 % | 0.67 % | 0.50 % | 0.45 % | |||||
Return on average equity | 8.00 % | 8.60 % | 6.99 % | 6.22 % | |||||
Noninterest expense to average assets | 1.54 % | 1.52 % | 1.38 % | 1.37 % | |||||
Net interest margin (tax equivalent) | 2.44 % | 2.44 % | 2.01 % | 2.01 % | |||||
Pre-tax, pre-provision earnings (1) | $ | 14,771 | $ | 9,756 | |||||
Pre-tax, pre-provision ROAA (1) | 0.83 % | 0.55 % | |||||||
(1) Represents a non-GAAP financial measure. See Appendix A to this press release for more information. | |||||||||
Five Quarter Trends
For the Three Months Ended | |||||||
(Dollars in thousands, except per share data) | |||||||
2025 | 2024 | ||||||
December 31 | September 30 | June 30 | March 31 | December 31 | |||
GAAP | GAAP | GAAP | GAAP | GAAP | |||
Net income | $ | 2,304 | 3,898 | 2,806 | 2,179 | 2,092 | |
Diluted earnings per share | $ | 0.37 | 0.62 | 0.45 | 0.35 | 0.33 | |
Return on average assets (ROAA) | 0.52 % | 0.87 % | 0.63 % | 0.50 % | 0.47 % | ||
Return on average equity | 6.34 % | 11.03 % | 8.17 % | 6.43 % | 6.32 % | ||
Noninterest expense to average assets | 1.67 % | 1.46 % | 1.55 % | 1.50 % | 1.40 % | ||
Net interest margin (tax equivalent) | 2.54 % | 2.50 % | 2.40 % | 2.31 % | 2.29 % | ||
Yield on interest-earning assets | 5.57 % | 5.61 % | 5.65 % | 5.58 % | 5.69 % | ||
Cost of funds | 3.12 % | 3.19 % | 3.32 % | 3.30 % | 3.48 % | ||
2025 | 2024 | ||||||
December 31 | September 30 | June 30 | March 31 | December 31 | |||
Adjusted (1) | Adjusted (2) | Adjusted (2) | Adjusted (2) | Adjusted (1) | |||
Net income | $ | 2,915 | 3,858 | 3,037 | 2,214 | 2,481 | |
Diluted earnings per share | $ | 0.46 | 0.62 | 0.48 | 0.35 | 0.39 | |
Return on average assets (ROAA) | 0.65 % | 0.86 % | 0.68 % | 0.50 % | 0.56 % | ||
Return on average equity | 8.02 % | 10.92 % | 8.84 % | 6.53 % | 7.49 % | ||
Noninterest expense to average assets | 1.61 % | 1.46 % | 1.49 % | 1.50 % | 1.40 % | ||
Pre-tax, pre-provision earnings | $ | 3,556 | 4,781 | 3,612 | 2,823 | 3,441 | |
Pre-tax, pre-provision ROAA | 0.80 % | 1.07 % | 0.81 % | 0.64 % | 0.78 % | ||
Asset Quality and Other Data
As of and for the | As of and for the | As of and for the | |||||||
3 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
December 31, | September 30, | December 31, | |||||||
2025 | 2025 | 2024 | |||||||
(Dollars in thousands, except share data) | |||||||||
Asset Quality | |||||||||
Non-performing loans | $ | 6,058 | $ | 7,661 | $ | 1,383 | |||
Real estate owned | $ | 3,103 | $ | 2,788 | $ | 2,572 | |||
Non-performing assets | $ | 9,161 | $ | 10,449 | $ | 3,955 | |||
Non-performing loans to total loans | 0.41 % | 0.52 % | 0.09 % | ||||||
Non-performing assets to total assets | 0.52 % | 0.58 % | 0.23 % | ||||||
Year-to-date net charge-offs (recoveries) | $ | 158 | $ | 167 | $ | (247) | |||
Allowance for credit losses to non-performing loans | 191.91 % | 148.40 % | 835.14 % | ||||||
Allowance for credit losses to total loans | 0.78 % | 0.77 % | 0.79 % | ||||||
Other Data | |||||||||
Cash dividends declared and paid | $ | 0.070 | $ | 0.070 | $ | 0.230 | |||
Shares outstanding | 6,385,286 | 6,357,359 | 6,393,081 | ||||||
Book and tangible book value per share (2) | $ | 22.80 | $ | 22.50 | $ | 20.70 | |||
Accumulated other comprehensive loss (AOCI) per share | (1.75) | (1.85) | (2.37) | ||||||
Book and tangible book value per share, excluding AOCI (1) (2) | 24.56 | $ | 24.35 | $ | 23.07 | ||||
Closing market price per common share | $ | 22.85 | $ | 20.45 | $ | 21.52 | |||
Closing price to book value ratio | 100.20 % | 90.88 % | 103.95 % | ||||||
Tangible common equity to tangible assets ratio | 8.22 % | 7.94 % | 7.58 % | ||||||
Bank regulatory leverage ratio | 9.17 % | 9.22 % | 9.31 % | ||||||
(1) As further detailed in Appendix A and Appendix C to this press release, this is a non-GAAP financial measure. | |||||||||
(2) The Company does not have any intangible assets. | |||||||||
Net Interest Income
Net interest income increased $1.2 million, or 13.1%, from $9.1 million for the three months ended December 31, 2024 to $10.3 million for the same period in 2025. The change between the periods was primarily the net result of the following factors:
- Average interest-earning assets increased $15.5 million, or 0.9%, from $1.662 billion to $1.677 billion, driven primarily by increases in taxable loans and interest earning deposits.
- Average net interest-earning assets increased $3.8 million, or 1.3%, from $294.7 million to $298.5 million, due primarily to $12.8 million increase in shareholders' equity.
- Cost of funds declined 36 bp from 3.48% to 3.12% resulting in tax-equivalent net interest rate spread expanding by 33 bp to 1.88% from 1.56% and tax-equivalent net interest margin expanding 25 bp to 2.54% from 2.29%. The cost of funds and the yield earned on interest-earning assets over the comparable period last year have been impacted by 100 bp of decreases in short-term interest rates by the Federal Reserve since December 2024.
Net interest income increased $7.4 million, or 23.5%, from $31.5 million for the twelve months ended December 31, 2024 to $38.9 million for the same period in 2025. The change between the periods was primarily the net result of the following factors:
- Average interest-earning assets increased $2.6 million, or 0.2%, from $1.669 billion to $1.672 billion, driven primarily by increases in taxable loans.
- Average net interest-earning assets increased $6.1 million, or 2.1%, from $285.6 million to $291.6 million, due primarily to a $12.1 million increase in shareholders' equity.
- Cost of funds declined 45 bp from 3.70% to 3.25% resulting in tax-equivalent net interest rate spread expanding by 51 bp from 1.26% to 1.77% and tax-equivalent net interest margin expanding 43 bp from 2.01 % to 2.44%.
Rate Sensitivity
The Company has the following assets, derivatives and liabilities subject to contractual repricing of interest rates:
(In thousands) | December 31, 2025 | |
Interest-earning deposits | $ | 65,202 |
Investments available for sale | 14,300 | |
Loans receivable | 460,411 | |
Interest rate swaps (notional) | 260,000 | |
$ | 799,913 | |
Deposits | $ | 105,428 |
Senior debt | 17,996 | |
$ | 123,424 |
Interest Rate Swaps
The Company has the following interest rate swaps designated as hedges as of December 31, 2025:
Estimated | ||||||||
Fair | Annual | Receive | Pay | |||||
Hedged Item | Notional | Value | Earnings | Term | Maturity | Rate | Rate | |
(dollars in thousands) | ||||||||
Fixed rate loans | $ | 150,000 | (1,496) | (1,356) | 3 Yrs | 10/1/2026 | 3.79 % | 4.69 % |
Fixed rate loans | 75,000 | (103) | 58 | 2 Yrs | 9/1/2026 | 3.79 % | 3.71 % | |
Floating rate deposit | 35,000 | (52) | 60 | 1.5 Yrs | 10/22/2026 | 3.82 % | 3.65 % | |
$ | 260,000 | (1,651) | (1,239) |
Provision For (Recovery Of) Credit Losses
The following summarizes the Company's provision for (recovery of) credit losses and net charge-offs (recoveries) for each of the last five quarters:
Three Months Ended | ||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||
(In thousands) | 2025 | 2025 | 2025 | 2025 | 2024 | |||||
Provision for (recovery of) credit losses | $ | 575 | (33) | 138 | 64 | 480 | ||||
Net charge-offs (recoveries) | (9) | 5 | 7 | 155 | 11 | |||||
The Company continues to experience historically lower levels of specific reserves and net charge-offs which, when combined with minimal changes in economic factors, has resulted in minimal provisions for credit losses during the last five quarters. Given our limited loss history, the Company utilizes peer data in its estimation of expected loan losses.
Noninterest Income
The following summarizes changes in the Company's noninterest income for the periods indicated:
Three Months Ended December 31 | ||||
(In thousands) | 2025 | 2024 | Change | |
Service charges and fees | $ | 401 | 386 | 15 |
Bank owned life insurance | 57 | 57 | - | |
Realized and unrealized gain (loss) on equity securities | 12 | (58) | 70 | |
Gain (loss) on sale of loans | 9 | - | 9 | |
Wealth management | 219 | 199 | 20 | |
Other | 26 | (2) | 28 | |
Total noninterest income | $ | 724 | 582 | 142 |
Noninterest income increased to $0.7 million in the fourth quarter of 2025 from $0.6 million in the same quarter of 2024. The following factors had an impact on noninterest income during these periods:
- Realized and unrealized gain (loss) on equity securities improved by $0.1 million from the fourth quarter of 2024 primarily due to improved equity market conditions.
Twelve Months Ended December 31 | ||||
(In thousands) | 2025 | 2024 | Change | |
Service charges and fees | $ | 1,542 | 1,528 | 14 |
Bank owned life insurance | 224 | 223 | 1 | |
Realized gain (loss) on sale of investment securities available for sale | (160) | 69 | (229) | |
Realized and unrealized gain (loss) on equity securities | 30 | (28) | 58 | |
Gain on sale of loans | 15 | 38 | (23) | |
Gain (loss) on sale of fixed assets | 5 | 30 | (25) | |
Wealth management | 901 | 810 | 91 | |
Swap fees | 385 | 51 | 334 | |
Limited partnership income | 352 | - | 352 | |
Other | 48 | 24 | 24 | |
Total noninterest income | $ | 3,342 | 2,745 | 597 |
Noninterest income increased to $3.3 million during the twelve months ended December 31, 2025 from $2.7 million during the same period of 2024. The following factors had an impact on noninterest income during these periods:
- Realized gain (loss) on sale of investment securities available for sale declined by $0.2 million from the first twelve months of 2024 due to management's decision during January 2025 to sell a municipal bond at a loss as a risk mitigation measure given that it was issued by a municipality that was in close proximity to the California wildfires.
- Wealth management fees improved by $0.1 million as a result of an improvement in equity market conditions and assets under management.
- Swap fees increased $0.3 million due to an increased demand from customers wanting to lock in a fixed interest rate on loans. The Bank receives a fee for delivering the swap to a third party with our borrower as counterparty to the swap, but does not maintain a contractual obligation for the swap other than in the event of a default.
- Limited partnership income increased $0.4 million from distributions from certain of the Company's investments in limited partnerships, which tend to have distributions towards the end of their life.
Noninterest Expense
The following summarizes changes in the Company's noninterest expense for the periods indicated:
Three Months Ended December 31 | ||||
(In thousands) | 2025 | 2024 | Change | |
Compensation and employee benefits | $ | 3,546 | 3,010 | 536 |
Occupancy | 879 | 742 | 137 | |
Furniture and equipment | 367 | 348 | 19 | |
Data processing | 731 | 634 | 97 | |
FDIC insurance | 334 | 332 | 2 | |
Office | 188 | 173 | 15 | |
Advertising | 137 | 120 | 17 | |
Professional fees | 521 | 450 | 71 | |
Real Estate Owned | 9 | - | 9 | |
Merger-related expenses | 255 | - | 255 | |
Other noninterest expense | 484 | 396 | 88 | |
Total noninterest expense | $ | 7,451 | 6,205 | 1,246 |
Noninterest expense increased $1.3 million from $6.2 million for the three months ended December 31, 2024 to $7.5 million in the same period of 2025. The following factors had an impact on noninterest expense during these periods:
- Compensation and employee benefits expense increased $0.5 million, or 17.8%, due primarily to an increase in incentive accruals and bonuses tied to forecasted 2025 performance, as well as merit increases and an increase in FTE employees from 108 to 110.
- Merger-related expenses increased $0.3 million due to certain merger-related services received in the fourth quarter of 2025 associated with the proposed merger with Home Bancshares.
Twelve Months Ended December 31 | ||||
(In thousands) | 2025 | 2024 | Change | |
Compensation and employee benefits | $ | 14,007 | 11,912 | 2,095 |
Occupancy | 3,162 | 2,753 | 409 | |
Furniture and equipment | 1,295 | 1,182 | 113 | |
Data processing | 2,738 | 2,643 | 95 | |
FDIC insurance | 1,402 | 1,450 | (48) | |
Office | 744 | 733 | 11 | |
Advertising | 433 | 443 | (10) | |
Professional fees | 1,990 | 2,041 | (51) | |
Real Estate Owned | 25 | - | 25 | |
Merger-related expenses | 255 | - | 255 | |
Other noninterest expense | 1,472 | 1,378 | 94 | |
Total noninterest expense | $ | 27,523 | 24,535 | 2,988 |
Noninterest expense increased $3.0 million, or 12.2%, from $24.5 million for the twelve months ended December 31, 2024 to $27.5 million in the same period of 2025. The following factors had an impact on changes in noninterest expense during these periods:
- Compensation and employee benefits expense increased $2.1 million, or 17.6%, due primarily to an increase in incentive accruals and bonuses tied to forecasted 2025 performance, as well as merit increases.
- Occupancy and furniture and equipment expenses increased by a combined $0.5 million, or 13.3%, due to the opening of the Johnson City financial center on July 1, 2024, offset, in part, by the elimination of expenses for the formerly leased facilities. Additionally, certain non-recurring maintenance and repair services were performed for buildings and properties owned by the Company in the fourth quarter of 2025.
- Merger-related expenses increased $0.3 million due to certain merger-related services received in the fourth quarter of 2025 associated with the proposed merger with Home Bancshares.
Income Taxes
The effective tax rates of the Company were as follows for the periods indicated:
Three Months Ended December 31 | |
2025 | 2024 |
22.71 % | 29.35 % |
Twelve Months Ended December 31 | |
2025 | 2024 |
20.25 % | 22.58 % |
The Company's marginal tax rate of 26.14% is favorably impacted by certain sources of non-taxable income, including bank-owned life insurance (BOLI) and investments in tax-free municipal securities, and state tax credits on certain loans. The Company's effective tax rate declined in the 2025 periods compared to comparable periods in 2024 due to higher utilization of state tax credits.
Balance Sheet
Total assets increased $25.3 million, or 1.45%, from $1.746 billion at December 31, 2024 to $1.771 billion at December 31, 2025. The change was primarily driven by the following factors:
- Available for sale investment security balances decreased $3.8 million, or 3.41%, primarily due to changes in fair value and contractual maturities.
The following summarizes the composition of the Company's available for sale investment securities portfolio (at fair value) as of the periods indicated:
December 31, 2025 | December 31, 2024 | |||||
Estimated | Net | Estimated | Net | |||
Fair | Unrealized | Fair | Unrealized | |||
Value | Gain (Loss) | Value | Gain (Loss) | |||
(in thousands) | ||||||
Agency MBS / CMO | $ | 11,221 | (1,302) | 11,560 | (1,960) | |
Agency multifamily (non-guaranteed) | 5,867 | (374) | 7,081 | (750) | ||
Agency floating rate | 10,992 | 25 | 6,647 | 18 | ||
Business Development Companies | 3,665 | (86) | 3,522 | (236) | ||
Corporate | 17,659 | (633) | 22,832 | (1,860) | ||
Municipal | 27,066 | (5,428) | 25,987 | (7,169) | ||
Non-agency MBS / CMO | 33,436 | (7,293) | 35,331 | (8,566) | ||
$ | 109,905 | (15,091) | 112,960 | (20,523) | ||
Non-agency MBS/CMO have an average credit-enhancement of approximately 35% as of December 31, 2025. Municipal securities are generally rated AA or higher.
- The Company did not have any securities classified as held-to-maturity as of December 31, 2025 and 2024.
- Loans receivable increased $27.3 million, or 1.86%, from $1.463 billion at December 31, 2024 to $1.490 billion at December 31, 2025. The Company is intentionally managing its loan growth as it seeks to improve its risk profile by paying down debt, increasing capital, and reducing the amount of its wholesale borrowings. The Company is managing its exposure to commercial real estate and has a regulatory commercial real estate concentration of 335% of total risk-based capital as of December 31, 2025 as compared to 325% at December 31, 2024, while our AD&C concentration remains low at 36% of total risk-based capital as of December 31, 2025 as compared to 43% at December 31, 2024. The following summarizes changes in loan balances over the last five quarters:
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||
2025 | 2025 | 2025 | 2025 | 2024 | ||||||
(in thousands) | ||||||||||
Residential construction | $ | 28,622 | 23,446 | 18,811 | 19,636 | 14,831 | ||||
Other construction | 35,486 | 33,642 | 51,846 | 51,047 | 60,474 | |||||
Farmland | 11,904 | 10,531 | 8,192 | 7,577 | 4,513 | |||||
Home equity | 66,863 | 64,272 | 60,625 | 56,588 | 57,972 | |||||
Residential | 431,519 | 430,970 | 445,966 | 444,620 | 449,056 | |||||
Multi-family | 122,875 | 131,836 | 125,803 | 121,511 | 114,634 | |||||
Owner-occupied commercial | 263,722 | 266,357 | 251,842 | 252,764 | 252,615 | |||||
Non-owner occupied commercial | 405,089 | 403,709 | 395,038 | 389,666 | 382,136 | |||||
Commercial & industrial | 111,469 | 107,338 | 108,151 | 114,899 | 115,234 | |||||
PPP Program | 24 | 37 | 50 | 66 | 83 | |||||
Consumer | 12,786 | 11,924 | 12,068 | 11,112 | 11,559 | |||||
$ | 1,490,359 | 1,484,062 | 1,478,392 | 1,469,486 | 1,463,107 |
The following summarizes the industry components of the Company's non-owner occupied commercial real estate loans as of December 31, 2025. Office loans are primarily comprised of low-rise office space.
Loan | % of Total | |||
($ in thousands) | Balance | Loans | ||
Hotels | $ | 103,457 | 6.9 % | |
Retail | 83,612 | 5.6 % | ||
Office | 85,939 | 5.8 % | ||
Marina | 22,943 | 1.5 % | ||
Campground | 21,650 | 1.5 % | ||
Warehouse | 21,460 | 1.4 % | ||
Mini-storage | 16,746 | 1.1 % | ||
Vacation Rentals | 25,119 | 1.7 % | ||
Car Wash | 5,159 | 0.3 % | ||
Entertainment | 8,160 | 0.5 % | ||
Restaurant | 3,853 | 0.3 % | ||
Other | 6,991 | 0.5 % | ||
$ | 405,089 | 27.2 % |
The following summarizes the Company's loan portfolio by market where the loan was originated:
December 31, | December 31, | |||
(in thousands) | 2025 | 2024 | ||
Tri-Cities | $ | 193,148 | 189,287 | |
Knoxville | 1,003,695 | 1,019,266 | ||
Nashville | 293,516 | 254,554 | ||
$ | 1,490,359 | 1,463,107 |
- Other real estate owned increased $0.5 million, or 20.7%, from $2.6 million at December 31, 2024 to $3.1 million at December 31, 2025. The following summarizes the detail of Other real estate owned as of the periods indicated:
December 31, | December 31, | |||
(in thousands) | 2025 | 2024 | ||
Residential | $ | 2,572 | 2,572 | |
Commercial Real Estate | 315 | - | ||
Land | 216 | - | ||
$ | 3,103 | 2,572 |
- Total deposits increased $18.3 million, or 1.2%, from $1.527 billion at December 31, 2024 to $1.545 billion at December 31, 2025.
The following summarizes changes in deposit balances over the last five quarters:
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||
2025 | 2025 | 2025 | 2025 | 2024 | ||||||
(in thousands) | ||||||||||
Non-interest bearing transaction | $ | 231,568 | 257,199 | 264,725 | 248,711 | 248,298 | ||||
NOW and money market | 500,393 | 514,932 | 503,216 | 462,367 | 431,629 | |||||
Savings | 177,001 | 177,863 | 185,815 | 189,814 | 189,246 | |||||
Retail time deposits | 375,952 | 373,209 | 364,027 | 372,741 | 370,989 | |||||
1,284,914 | 1,323,203 | 1,317,783 | 1,273,633 | 1,240,162 | ||||||
Wholesale time deposits | 260,064 | 259,438 | 267,072 | 296,578 | 286,552 | |||||
Total deposits | $ | 1,544,978 | 1,582,641 | 1,584,855 | 1,570,211 | 1,526,714 |
The following summarizes core deposits, treasury deposits, and wholesale deposits and average interest rate as of December 31, 2025:
December 31, 2025 | ||
($ in thousands) | Balance | Rate |
Core | ||
Non-interest DDA | $ 231,568 | 0.00 % |
Interest DDA | 41,454 | 0.63 % |
Money Market | 357,160 | 3.10 % |
Savings | 128,471 | 1.83 % |
Retail CDs | 375,952 | 4.02 % |
Total Core | $ 1,134,605 | 2.52 % |
Treasury | ||
Inspira | $ 55,208 | 4.45 % |
PMA/ICS/CDARS | 95,101 | 3.20 % |
Total Treasury | $ 150,309 | 3.66 % |
Wholesale | ||
Brokered CDs | 183,113 | 4.46 % |
QwickRate CDs | 76,951 | 4.56 % |
Total Wholesale | $ 260,064 | 4.49 % |
Total Deposits | $ 1,544,978 | 2.96 % |
The following summarizes the composition of certificates of deposit by maturity and average interest rate as of December 31, 2025:
Maturity | Brokered CD | Qwickrate CD | Retail CD | Total | ||||||||||||
Date | Amount | Rate | Amount | Rate | Amount | Rate | Amount | Rate | ||||||||
Q1 2026 | 70,300 | 4.56 % | 7,341 | 4.38 % | 156,254 | 4.14 % | 233,895 | 4.27 % | ||||||||
Q2 2026 | 20,061 | 3.70 % | 17,672 | 5.24 % | 69,260 | 3.98 % | 106,993 | 4.14 % | ||||||||
Q3 2026 | - | - | 19,465 | 4.53 % | 33,088 | 4.06 % | 52,553 | 4.23 % | ||||||||
Q4 2026 | 48,551 | 4.50 % | 24,789 | 4.20 % | 70,640 | 3.85 % | 143,980 | 4.13 % | ||||||||
Q1 2027 | - | - | 4,435 | 4.88 % | 39,987 | 3.91 % | 44,422 | 4.01 % | ||||||||
Q2 2027 | 44,201 | 4.60 % | 2,751 | 3.88 % | 3,172 | 3.96 % | 50,124 | 4.52 % | ||||||||
Q3 2027 | - | - | 498 | 3.75 % | 1,546 | 4.21 % | 2,044 | 4.10 % | ||||||||
Q4 2027 | - | - | - | - | 492 | 3.71 % | 492 | 3.71 % | ||||||||
Thereafter | - | - | - | - | 1,513 | 3.78 % | 1,513 | 3.78 % | ||||||||
183,113 | 4.46 % | 76,951 | 4.56 % | 375,952 | 4.02 % | 636,016 | 4.21 % | |||||||||
The following summarizes deposits by market where the deposit was originated:
December 31, | December 31, | |||
2025 | 2024 | |||
Tri-Cities | $ | 350,140 | 329,912 | |
Knoxville | 668,958 | 688,049 | ||
Nashville | 108,620 | 100,928 | ||
$ | 1,127,718 | 1,118,889 |
- FHLB borrowings were $50.0 million at December 31, 2025 and 2024, and consisted of the following at December 31, 2025:
Amounts | Original | Current | Maturity | |
(000's) | Term | Rate | Date | |
$ | 20,000 | 1 Week | 3.69 % | 01/07/26 |
20,000 | 3 Month | 3.89 % | 03/16/26 | |
10,000 | 2 Years | 4.38 % | 11/05/26 | |
$ | 50,000 | 3.91 % |
- Total equity increased $13.3 million, or 10.0%, from $132.4 million at December 31, 2024 to $145.6 million at December 31, 2025. The following summarizes the components of the change in total shareholders' equity and tangible book value per share for the twelve months ended December 31, 2025:
Total | Tangible | |||
Shareholders' | Book Value | |||
Equity | Per Share | |||
(In thousands) | ||||
December 31, 2024 | $ | 132,353 | 20.70 | |
Net income | 11,187 | 1.78 | ||
Dividends paid | (1,659) | (0.26) | ||
Stock compensation | 943 | 0.15 | ||
Share repurchases from stock compensation | (152) | (0.02) | ||
Share repurchases | (1,003) | (0.16) | ||
Change in fair value of investments available for sale | 3,947 | 0.62 | ||
December 31, 2025 | $ | 145,616 | 22.80 | * |
* Sum of the individual components may not equal the total |
The Company's tangible equity to tangible assets ratio increased to 8.22% at December 31, 2025 from 7.58% at December 31, 2024, as the Company continues to manage its growth and dividend levels in light of current income levels. The Company and Bank both remain well capitalized at December 31, 2025, with the Bank maintaining a regulatory leverage ratio of 9.17% at December, 2025.
Share Repurchases
The Company has an active authorization to repurchase up to $5 million of shares through March 31, 2026. 50,000 shares at an average price of $20.00 per share were repurchased pursuant to such plan during the twelve months ended December 31, 2025.
Asset Quality
Non-performing loans to total loans increased to 0.41% at December 31, 2025 from 0.09% at December 31, 2024. Non-performing assets to total assets increased to 0.52% at December 31, 2025 from 0.23% at December 31, 2024. The following summarizes the composition of non-performing loans and related collateral values as of December 31, 2025:
No. of | Collateral | Loan | Collateral | |
Properties | Type | Amount | Value | |
1 | Multifamily residential | $ | 506 | 1,058 |
1 | Non-owner occupied CRE | 2,263 | 2,218 | |
3 | 1-4 Family residential | 3,223 | 4,092 | |
5 | $ | 5,992 | 7,368 |
Other real estate owned of $3.1 million at December 31, 2025 is comprised of four properties for which no remaining loss on sale is anticipated. Net charge-offs of $0.2 million were recognized during the twelve months ended December 31, 2025 in conjunction with the transfer of multiple properties to other real estate owned, compared to net recoveries of $0.2 million during the year ended December 31, 2024.
The allowance for credit losses to total loans declined to 0.78% at December 31, 2025 from 0.79% at December 31, 2024. Coverage of non-performing loans by the allowance for credit losses was nearly 2 to 1 at December 31, 2025, down from more than 8 to 1 at December 31, 2024 due to the increase in non-performing loans. Loans represented in the increase in non-performing loans during the quarter ended December 31, 2025 have been individually evaluated for collateral adequacy and did require a specific reserve of less than $0.1 million.
Non-GAAP Financial Measures
Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables in Appendix A and Appendix C, which provide a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures. This press release and the accompanying tables discuss financial measures such as adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average equity, and adjusted noninterest expense to average assets, which are all non-GAAP financial measures. We also present in this press release and the accompanying tables pre-tax, pre-provision earnings, pre-tax, pre-provision return on average assets, and book and tangible book value per share excluding AOCI, which are also non-GAAP financial measures. We believe that such non-GAAP financial measures are useful because they enhance the ability of investors and management to evaluate and compare the Company's operating results from period to period in a meaningful manner. Non-GAAP financial measures should not be considered as an alternative to any measure of performance calculated pursuant to GAAP, nor are they necessarily comparable to non-GAAP financial measures that may be presented by other companies. Investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP.
Forward-Looking Statements
This press release contains forward-looking statements. The words "expect," "intend," "should," "may," "could," "believe," "suspect," "anticipate," "seek," "target," "plan," "estimate" and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical fact may also be considered forward-looking. Such forward-looking statements involve known and unknown risks and uncertainties that include, without limitation, (i) deterioration in the financial condition of our borrowers, including as a result of continued elevated interest rates, persistent inflationary pressures and challenging economic conditions, resulting in significant increases in credit losses and provisions for those losses; (ii) the impact of U.S. and global trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting from there, and geopolitical instability, (iii) fluctuations or differences in interest rates on loans or deposits from those that we are modeling or anticipating, including as a result of our inability to better match deposit rates with the changes in the short-term rate environment, or that affect the yield curve; (iv) deterioration in the real estate market conditions in our market areas; (v) our ability to grow and retain low cost core deposits and retain large, uninsured deposits including during times when we are seeking to limit the rates we pay with other financial institutions, including pricing pressures, and the resulting impact on our results, including as a result of compression to our net interest margin; (vi) the deterioration of the economy in our market areas, including the negative impact of inflationary pressures and other challenging economic conditions on our customers and their businesses; (vii) the possibility that our proposed merger with Home Bancshares does not close when expected or at all because required regulatory, shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all; (viii) the possibility that our proposed merger with Home Bancshares may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (ix) the risk that the benefits from our proposed merger with Home Bancshares may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, interest rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which we and Home Bancshares operate; (x) the ability to promptly and effectively integrate our and Home Bancshares' businesses; (xi) the reaction to our proposed merger with Home Bancshares from our or Home Bancshares' customers, employees and counterparties; (xii) the diversion of our management's time and attention to merger-related matters; (xiii) risks associated with the shutdown of the United States federal government, including adverse effects on the national or local economies and adverse effects resulting from a shutdown of the U.S. Small Business Administration's SBA loan program; (xiv) our ability to meet our liquidity needs without having to liquidate investment securities that we own while those securities are in an unrealized loss position as a result of the elevated rate environment, or increase the rates we pay on deposits or increase our levels of non-core deposits to levels that cause our net interest margin to decline; (xv) significant downturns in the business of one or more large customers; (xvi) effectiveness of our asset management activities in improving, resolving or liquidating lower quality assets; (xvii) our inability to maintain the historical, long-term growth rate of our loan portfolio; (xviii) risks of expansion into new geographic or product markets; (xix) the possibility of increased compliance and operational costs as a result of increased regulatory oversight; (xx) our inability to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies and required capital maintenance levels; (xxi) the ineffectiveness of our hedging strategies, or the unexpected counterparty failure or failure of the underlying hedges; (xxii) changes in or interpretations of state or Federal regulations, policies, or legislation applicable to banks and other financial service providers, including regulatory or legislative developments arising out of current unsettled conditions in the economy; (xxiii) changes in capital levels and loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (xxiv) inadequate allowance for credit losses; (xxv) results of regulatory examinations; (xxvi) the vulnerability of our network and online banking portals, and the systems of parties with whom we contract or do business with, to unauthorized access, computer viruses, phishing schemes, spam attacks, ransomware attacks, human error, natural disasters, power loss and other security breaches; (xxvii) loss of key personnel; and (xxviii) adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation, examinations or other legal and/or regulatory actions. These risks and uncertainties may cause our actual results or performance to be materially different from any future results or performance expressed or implied by such forward-looking statements. Our future operating results depend on a number of factors which were derived utilizing numerous assumptions that could cause actual results to differ materially from those projected in forward-looking statements.
About Mountain Commerce Bancorp, Inc. and Mountain Commerce Bank
Mountain Commerce Bancorp, Inc. is the holding company for Mountain Commerce Bank. The Company's shares of common stock trade on the OTCQX under the symbol "MCBI".
Mountain Commerce Bank is a state-chartered financial institution headquartered in Knoxville, TN. The Bank traces its history back over a century and serves Middle and East Tennessee through 7 branches located in Brentwood, Erwin, Johnson City (2), Bearden (Knoxville), West Knoxville and Unicoi, with another branch in the Johnson City area scheduled to open by the end of the first quarter 2026. The Bank focuses on responsive relationship banking of small and medium-sized businesses, professionals, affluent individuals, and those who value the personal service and attention that only a community bank can offer. For further information, please visit us at www.mcb.com.
Additional Important Information and Where to Find It
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed business combination transaction involving Home Bancshares and Mountain Commerce Bancorp. No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended, and no offer to sell or solicitation of an offer to buy shall be made in any jurisdiction in which such offer, solicitation or sale would be unlawful. In connection with the proposed acquisition, Home Bancshares has filed with the Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-4 (the "Registration Statement") to register the shares of Home Bancshares common stock to be issued to shareholders of Mountain Commerce Bancorp in connection with the transaction. The Registration Statement will include a Proxy Statement of Mountain Commerce Bancorp and a Prospectus of Home Bancshares, as well as other relevant materials regarding the proposed merger transaction involving Home Bancshares and Mountain Commerce Bancorp. INVESTORS AND SECURITY HOLDERS OF MOUNTAIN COMMERCE BANCORP ARE ADVISED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED MERGER TRANSACTION. Investors and security holders may obtain free copies of these documents and other documents filed with the SEC on the SEC's website at http://www.sec.gov. Investors and security holders may also obtain free copies of the documents filed with the SEC by Home Bancshares at its website at http://www.homebancshares.com, Investor Relations, or by contacting Donna Townsell, by telephone at (501) 328-4625.
Participants in Solicitation
Home Bancshares and Mountain Commerce Bancorp and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Mountain Commerce Bancorp in connection with the merger transaction. Information about the directors and executive officers of Home Bancshares and their ownership of Home Bancshares common stock is set forth in the proxy statement for HOMB's 2025 Annual Meeting of Shareholders, as filed with the SEC on Schedule 14A on March 7, 2025. Information about the directors and executive officers of Mountain Commerce Bancorp and their ownership of Mountain Commerce Bancorp common stock will be set forth in the Proxy Statement/Prospectus to be included in the Registration Statement. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus regarding the merger transaction. Free copies of this document may be obtained as described in the preceding paragraph when it becomes available.
Mountain Commerce Bancorp, Inc. and Subsidiaries | |||||||||
Condensed Consolidated Statements of Income | |||||||||
(Amounts in thousands, except share data) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | |||||
2025 | 2025 | 2024 | 2025 | 2024 | |||||
Interest income | |||||||||
Loans | $ | 21,158 | 21,349 | 21,055 | $ | 84,005 | 82,573 | ||
Investment securities - taxable | 990 | 1,024 | 1,076 | 4,103 | 4,611 | ||||
Investment securities - tax exempt | 29 | 29 | 29 | 117 | 117 | ||||
Dividends and other | 926 | 940 | 1,101 | 3,616 | 4,784 | ||||
23,103 | 23,342 | 23,261 | 91,841 | 92,085 | |||||
Interest expense | |||||||||
Savings | 1,043 | 1,155 | 1,227 | 4,573 | 6,715 | ||||
Interest bearing transaction accounts | 4,113 | 4,138 | 3,762 | 15,614 | 15,763 | ||||
Time certificates of deposit of $250,000 or more | 3,851 | 3,828 | 4,397 | 16,058 | 17,877 | ||||
Other time deposits | 3,012 | 3,043 | 3,638 | 13,047 | 14,570 | ||||
Total deposits | 12,019 | 12,164 | 13,024 | 49,292 | 54,925 | ||||
Senior debt | 279 | 181 | 269 | 871 | 1,425 | ||||
Subordinated debt | 49 | 191 | 167 | 569 | 660 | ||||
FHLB advances | 473 | 634 | 737 | 2,157 | 3,529 | ||||
12,820 | 13,170 | 14,197 | 52,889 | 60,539 | |||||
Net interest income | 10,283 | 10,172 | 9,064 | 38,952 | 31,546 | ||||
Provision for (recovery of) credit losses | 575 | (33) | 480 | 744 | (1,770) | ||||
Net interest income after provision for (recovery of) credit losses | 9,708 | 10,205 | 8,584 | 38,208 | 33,316 | ||||
Noninterest income | |||||||||
Service charges and fees | 401 | 404 | 386 | 1,542 | 1,528 | ||||
Bank owned life insurance | 57 | 56 | 57 | 224 | 223 | ||||
Realized gain (loss) on sale of investment securities available for sale | - | (13) | - | (160) | 69 | ||||
Realized and unrealized gain (loss) on equity securities | 12 | 29 | (58) | 30 | (28) | ||||
Gain on sale of loans | 9 | 4 | - | 15 | 38 | ||||
Gain on sale of fixed assets | - | - | - | 5 | 30 | ||||
Wealth management | 219 | 239 | 199 | 901 | 810 | ||||
Swap fees | - | 75 | - | 385 | 51 | ||||
Limited partnership income | - | 352 | - | 352 | - | ||||
Other | 26 | 8 | (2) | 48 | 24 | ||||
724 | 1,154 | 582 | 3,342 | 2,745 | |||||
Noninterest expense | |||||||||
Compensation and employee benefits | 3,546 | 3,384 | 3,010 | 14,007 | 11,912 | ||||
Occupancy | 879 | 767 | 742 | 3,162 | 2,753 | ||||
Furniture and equipment | 367 | 302 | 348 | 1,295 | 1,182 | ||||
Data processing | 731 | 671 | 634 | 2,738 | 2,643 | ||||
FDIC insurance | 334 | 363 | 332 | 1,402 | 1,450 | ||||
Office | 188 | 200 | 173 | 744 | 733 | ||||
Advertising | 137 | 89 | 120 | 433 | 443 | ||||
Professional fees | 521 | 385 | 450 | 1,990 | 2,041 | ||||
Real estate owned expense | 9 | 53 | - | 25 | - | ||||
Merger-related expenses | 255 | - | - | 255 | - | ||||
Other noninterest expense | 484 | 331 | 396 | 1,472 | 1,378 | ||||
7,451 | 6,545 | 6,205 | 27,523 | 24,535 | |||||
Income before income taxes | 2,981 | 4,814 | 2,961 | 14,027 | 11,526 | ||||
Income taxes | 677 | 916 | 869 | 2,840 | 2,603 | ||||
Net income | $ | 2,304 | 3,898 | 2,092 | $ | 11,187 | 8,923 | ||
Earnings per common share: | |||||||||
Basic | $ | 0.37 | 0.62 | 0.33 | $ | 1.78 | 1.42 | ||
Diluted | $ | 0.37 | 0.62 | 0.33 | $ | 1.78 | 1.42 | ||
Weighted average common shares outstanding: | |||||||||
Basic | 6,264,967 | 6,251,027 | 6,284,585 | 6,269,993 | 6,268,048 | ||||
Diluted | 6,284,809 | 6,270,773 | 6,297,259 | 6,288,971 | 6,277,887 | ||||
Mountain Commerce Bancorp, Inc. and Subsidiaries | |||||||||
Condensed Consolidated Balance Sheets | |||||||||
(Amounts in thousands) | |||||||||
December 31, | September 30, | December 31, | |||||||
2025 | 2025 | 2024 | |||||||
Assets | |||||||||
Cash and due from banks | $ | 14,725 | $ | 22,528 | $ | 15,819 | |||
Interest-earning deposits in other banks | 65,202 | 90,070 | 59,717 | ||||||
Cash and cash equivalents | 79,927 | 112,598 | 75,536 | ||||||
Investments available for sale | 109,113 | 113,617 | 112,960 | ||||||
Equity securities | 2,795 | 2,763 | 2,695 | ||||||
Premises and equipment held for sale | 3,762 | 3,762 | 3,762 | ||||||
Loans receivable | 1,490,359 | 1,484,062 | 1,463,107 | ||||||
Allowance for credit losses | (11,626) | (11,369) | (11,550) | ||||||
Net loans receivable | 1,478,733 | 1,472,693 | 1,451,557 | ||||||
Premises and equipment, net | 59,251 | 59,552 | 61,215 | ||||||
Accrued interest receivable | 5,383 | 5,567 | 5,587 | ||||||
Other real estate owned | 3,103 | 2,788 | 2,572 | ||||||
Bank owned life insurance | 10,414 | 10,358 | 10,190 | ||||||
Restricted stock | 3,646 | 3,710 | 4,317 | ||||||
Deferred tax assets, net | 6,896 | 6,946 | 7,762 | ||||||
Other assets | 7,971 | 8,286 | 7,516 | ||||||
Total assets | $ | 1,770,994 | $ | 1,802,640 | $ | 1,745,669 | |||
Liabilities and Shareholders' Equity | |||||||||
Noninterest-bearing deposits | $ | 231,568 | $ | 257,199 | $ | 248,298 | |||
Interest-bearing deposits | 1,053,346 | 1,066,004 | 991,864 | ||||||
Wholesale deposits | 260,064 | 259,438 | 286,552 | ||||||
Total deposits | 1,544,978 | 1,582,641 | 1,526,714 | ||||||
FHLB borrowings | 50,000 | 45,000 | 50,000 | ||||||
Senior debt, net | 17,996 | 10,000 | 14,000 | ||||||
Subordinated debt, net | - | 7,995 | 9,971 | ||||||
Accrued interest payable | 2,395 | 2,921 | 4,435 | ||||||
Post-employment liabilities | 3,368 | 3,357 | 3,285 | ||||||
Other liabilities | 6,641 | 7,668 | 4,911 | ||||||
Total liabilities | 1,625,378 | 1,659,582 | 1,613,316 | ||||||
Total shareholders' equity | 145,616 | 143,058 | 132,353 | ||||||
Total liabilities and shareholders' equity | $ | 1,770,994 | $ | 1,802,640 | $ | 1,745,669 | |||
Appendix A - Reconciliation of Non-GAAP Financial Measures | ||||||
Three Months Ended | Twelve Months Ended | |||||
December 31 | December 31 | |||||
(Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) | |||||
2025 | 2024 | 2025 | 2024 | |||
Adjusted Net Income | ||||||
Net income (GAAP) | $ | 2,304 | 2,092 | $ | 11,187 | 8,923 |
Realized (gain) loss on sale of investment securities available for sale | - | - | 160 | (69) | ||
Realized and unrealized (gain) loss on equity securities | (12) | 58 | (30) | 28 | ||
Gain on sale of fixed assets | - | - | (5) | (30) | ||
Gain on sale of real estate owned | - | - | (75) | - | ||
Corporate and strategic initiatives | - | - | 243 | - | ||
Merger-related expenses | 255 | - | 255 | - | ||
Provision for (recovery of) credit losses | 575 | 480 | 744 | (1,770) | ||
Net (charge-offs) recoveries of credit losses | 9 | (11) | (158) | 247 | ||
Software conversion expense | - | - | - | 271 | ||
Tax effect of adjustments | (216) | (138) | (296) | 346 | ||
Adjusted net income (Non-GAAP) | $ | 2,915 | 2,481 | $ | 12,025 | 7,946 |
Adjusted Diluted Earnings Per Share | ||||||
Diluted earnings per share (GAAP) | $ | 0.37 | 0.33 | $ | 1.78 | 1.42 |
Realized (gain) loss on sale of investment securities available for sale | - | - | 0.03 | (0.01) | ||
Realized and unrealized (gain) loss on equity securities | (0.00) | 0.01 | (0.00) | 0.00 | ||
Gain on sale of fixed assets | - | - | (0.00) | (0.00) | ||
Gain on sale of real estate owned | - | - | (0.01) | - | ||
Corporate and strategic initiatives | - | - | 0.04 | - | ||
Merger-related expenses | 0.04 | - | 0.04 | - | ||
Provision for (recovery of) credit losses | 0.09 | 0.08 | 0.12 | (0.28) | ||
Net (charge-offs) recoveries of credit losses | 0.00 | (0.00) | (0.03) | 0.04 | ||
Software conversion expense | - | - | - | 0.04 | ||
Tax effect of adjustments | (0.03) | (0.02) | (0.05) | 0.06 | ||
Adjusted diluted earnings per share (Non-GAAP) | $ | 0.46 | 0.39 | $ | 1.91 | 1.27 |
Adjusted Return on Average Assets | ||||||
Return on average assets (GAAP) | 0.52 % | 0.47 % | 0.63 % | 0.50 % | ||
Realized (gain) loss on sale of investment securities available for sale | 0.00 % | 0.00 % | 0.01 % | 0.00 % | ||
Realized and unrealized (gain) loss on equity securities | 0.00 % | 0.01 % | 0.00 % | 0.00 % | ||
Gain on sale of fixed assets | 0.00 % | 0.00 % | 0.00 % | 0.00 % | ||
Gain on sale of real estate owned | 0.00 % | 0.00 % | 0.00 % | 0.00 % | ||
Corporate and strategic initiatives | 0.00 % | 0.00 % | 0.01 % | 0.00 % | ||
Merger-related expenses | 0.06 % | 0.00 % | 0.01 % | 0.00 % | ||
Provision for (recovery of) credit losses | 0.13 % | 0.11 % | 0.04 % | -0.10 % | ||
Net (charge-offs) recoveries of credit losses | 0.00 % | 0.00 % | -0.01 % | 0.01 % | ||
Software conversion expense | 0.00 % | 0.00 % | 0.00 % | 0.02 % | ||
Tax effect of adjustments | -0.05 % | -0.03 % | -0.02 % | 0.02 % | ||
Adjusted return on average assets (Non-GAAP) | 0.65 % | 0.56 % | 0.67 % | 0.45 % | ||
Adjusted Return on Average Equity | ||||||
Return on average equity (GAAP) | 6.34 % | 6.32 % | 8.00 % | 6.99 % | ||
Realized (gain) loss on sale of investment securities available for sale | 0.00 % | 0.00 % | 0.11 % | -0.05 % | ||
Realized and unrealized (gain) loss on equity securities | -0.03 % | 0.18 % | -0.02 % | 0.02 % | ||
Gain on sale of fixed assets | 0.00 % | 0.00 % | 0.00 % | -0.02 % | ||
Gain on sale of real estate owned | 0.00 % | 0.00 % | -0.05 % | 0.00 % | ||
Corporate and strategic initiatives | 0.00 % | 0.00 % | 0.17 % | 0.00 % | ||
Merger-related expenses | 0.70 % | 0.00 % | 0.18 % | 0.00 % | ||
Provision for (recovery of) credit losses | 1.58 % | 1.45 % | 0.53 % | -1.39 % | ||
Net (charge-offs) recoveries of credit losses | 0.02 % | -0.03 % | -0.11 % | 0.19 % | ||
Software conversion expense | 0.00 % | 0.00 % | 0.00 % | 0.21 % | ||
Tax effect of adjustments | -0.60 % | -0.42 % | -0.21 % | 0.27 % | ||
Adjusted return on average equity (Non-GAAP) | 8.02 % | 7.49 % | 8.60 % | 6.22 % | ||
Appendix A - Reconciliation of Non-GAAP Financial Measures, Continued | ||||||
Three Months Ended | Twelve Months Ended | |||||
December 31 | December 31 | |||||
(Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) | |||||
2025 | 2024 | 2025 | 2024 | |||
Noninterest Expense to Average Assets | ||||||
Noninterest expense to average assets (GAAP) | $ | 1.67 % | 1.40 % | $ | 1.54 % | 1.38 % |
Software conversion expense | 0.00 % | 0.00 % | 0.00 % | -0.02 % | ||
Corporate and strategic initiatives | 0.00 % | 0.00 % | -0.01 % | 0.00 % | ||
Merger-related expenses | -0.06 % | 0.00 % | -0.01 % | 0.00 % | ||
Noninterest expense to average assets (Non-GAAP) | $ | 1.61 % | 1.40 % | $ | 1.52 % | 1.37 % |
Pre-tax, Pre-Provision Earnings | ||||||
Net income (GAAP) | $ | 2,304 | 2,092 | $ | 11,187 | 8,923 |
Income taxes | 677 | 869 | 2,840 | 2,603 | ||
Provision for (recovery of) credit losses | 575 | 480 | 744 | (1,770) | ||
Pre-tax, pre-provision earnings (non-GAAP) | $ | 3,556 | 3,441 | $ | 14,771 | 9,756 |
Pre-tax, Pre-Provision Return on Average Assets (ROAA) | ||||||
Return on average assets (GAAP) | 0.52 % | 0.47 % | $ | 0.63 % | 0.50 % | |
Income taxes | 0.15 % | 0.20 % | 0.16 % | 0.15 % | ||
Provision for (recovery of) credit losses | 0.13 % | 0.11 % | 0.04 % | -0.10 % | ||
Pre-tax, pre-provision return on average assets (non-GAAP) | 0.80 % | 0.78 % | $ | 0.83 % | 0.55 % | |
Book and Tangible Book Value Per Share, excluding AOCI | ||||||
Book and tangible book value per share (GAAP) | $ | 22.80 | 20.70 | |||
Impact of AOCI per share | 1.75 | 2.37 | ||||
Book and tangible book value per share, excluding AOCI (non-GAAP) | $ | 24.56 | 23.07 | |||
Appendix B - Tax Equivalent Net Interest Margin Analysis | ||||||||||
For the Three Months Ended December 31, | ||||||||||
2025 | 2024 | |||||||||
Average | Average | |||||||||
Outstanding | Yield / | Outstanding | Yield / | |||||||
Balance | Interest | Rate | Balance | Interest | Rate | |||||
(Dollars in thousands) | ||||||||||
Interest-earning Assets: | ||||||||||
Loans - taxable, including loans held for sale | $ | 1,446,853 | 21,158 | 5.80 % | $ | 1,425,857 | 21,055 | 5.87 % | ||
Loans - imputed tax credits (2) | 26,695 | 455 | 6.75 % | 28,583 | 485 | 6.75 % | ||||
Investments - taxable | 110,555 | 990 | 3.55 % | 114,214 | 1,076 | 3.75 % | ||||
Investments - tax exempt (1) | 4,404 | 37 | 3.31 % | 4,280 | 37 | 3.41 % | ||||
Interest earning deposits | 83,058 | 817 | 3.90 % | 82,796 | 970 | 4.66 % | ||||
Other investments, at cost | 5,774 | 99 | 6.80 % | 6,114 | 131 | 8.52 % | ||||
Total interest-earning assets | 1,677,339 | 23,555 | 5.57 % | 1,661,844 | 23,754 | 5.69 % | ||||
Noninterest-earning assets | 107,014 | 107,862 | ||||||||
Total assets | $ | 1,784,353 | $ | 1,769,706 | ||||||
Interest-bearing liabilities: | ||||||||||
Interest-bearing transaction accounts | $ | 133,088 | 1,109 | 3.31 % | $ | 127,447 | 1,120 | 3.50 % | ||
Savings accounts | 171,901 | 1,044 | 2.41 % | 197,239 | 1,227 | 2.47 % | ||||
Money market accounts | 382,073 | 3,003 | 3.12 % | 305,828 | 2,642 | 3.44 % | ||||
Retail time deposits | 374,943 | 3,295 | 3.49 % | 373,191 | 4,080 | 4.35 % | ||||
Wholesale time deposits | 256,293 | 3,568 | 5.52 % | 278,213 | 3,955 | 5.66 % | ||||
Total interest bearing deposits | 1,318,298 | 12,019 | 3.62 % | 1,281,918 | 13,024 | 4.04 % | ||||
Senior debt | 17,996 | 279 | 6.15 % | 14,935 | 269 | 7.17 % | ||||
Subordinated debt | 1,217 | 49 | 15.97 % | 9,966 | 167 | 6.67 % | ||||
Federal Home Loan Bank advances | 41,348 | 473 | 4.54 % | 60,326 | 737 | 4.86 % | ||||
Total interest-bearing liabilities | 1,378,859 | 12,820 | 3.69 % | 1,367,145 | 14,197 | 4.13 % | ||||
Noninterest-bearing deposits | 250,372 | 256,142 | ||||||||
Other noninterest-bearing liabilities | 9,825 | 13,926 | ||||||||
Total liabilities | 1,639,056 | 1,637,213 | ||||||||
Total shareholders' equity | 145,297 | 132,493 | ||||||||
Total liabilities and shareholders' equity | $ | 1,784,353 | $ | 1,769,706 | ||||||
Tax-equivalent net interest income | 10,735 | 9,557 | ||||||||
Net interest-earning assets (3) | $ | 298,480 | $ | 294,699 | ||||||
Average interest-earning assets to interest- | ||||||||||
bearing liabilities | 122 % | 122 % | ||||||||
Tax-equivalent net interest rate spread (4) | 1.88 % | 1.56 % | ||||||||
Tax equivalent net interest margin (5) | 2.54 % | 2.29 % | ||||||||
(1) Tax exempt investments are calculated assuming a 21% federal tax rate | ||||||||||
(2) Reflects the tax equivalent yield of a 5% state tax credit assuming a 26% federal and state tax rate | ||||||||||
(3) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities | ||||||||||
(4) Tax-equivalent net interest rate spread represents the difference between the tax equivalent yield on average | ||||||||||
interest-earning assets and the cost of average interest-bearing liabilities. | ||||||||||
(5) Tax equivalent net interest margin represents tax equivalent net interest income divided by average total | ||||||||||
interest-earning assets | ||||||||||
Appendix B - Tax Equivalent Net Interest Margin Analysis | ||||||||||
For the Twelve Months Ended December 31, | ||||||||||
2025 | 2024 | |||||||||
Average | Average | |||||||||
Outstanding | Yield / | Outstanding | Yield / | |||||||
Balance | Interest | Rate | Balance | Interest | Rate | |||||
(Dollars in thousands) | ||||||||||
Interest-earning Assets: | ||||||||||
Loans - taxable, including loans held for sale | $ | 1,439,960 | 84,005 | 5.83 % | $ | 1,423,931 | 82,573 | 5.80 % | ||
Loans - imputed tax credits (2) | 27,349 | 1,845 | 6.75 % | 28,974 | 1,955 | 6.75 % | ||||
Investments - taxable | 112,372 | 4,103 | 3.65 % | 117,879 | 4,611 | 3.91 % | ||||
Investments - tax exempt (1) | 4,228 | 148 | 3.50 % | 4,237 | 148 | 3.50 % | ||||
Interest earning deposits | 82,491 | 3,155 | 3.82 % | 88,390 | 4,155 | 4.70 % | ||||
Other investments, at cost | 5,771 | 420 | 7.28 % | 6,117 | 630 | 10.30 % | ||||
Total interest-earning assets | 1,672,171 | 93,676 | 5.60 % | 1,669,528 | 94,072 | 5.63 % | ||||
Noninterest-earning assets | 109,586 | 106,174 | ||||||||
Total assets | $ | 1,781,757 | $ | 1,775,702 | ||||||
Interest-bearing liabilities: | ||||||||||
Interest-bearing transaction accounts | $ | 131,327 | 4,407 | 3.36 % | $ | 129,790 | 4,935 | 3.80 % | ||
Savings accounts | 182,993 | 4,573 | 2.50 % | 228,726 | 6,715 | 2.94 % | ||||
Money market accounts | 355,169 | 11,208 | 3.16 % | 278,753 | 10,828 | 3.88 % | ||||
Retail time deposits | 370,562 | 14,062 | 3.79 % | 382,599 | 16,948 | 4.43 % | ||||
Wholesale time deposits | 273,028 | 15,042 | 5.51 % | 268,025 | 15,499 | 5.78 % | ||||
Total interest bearing deposits | 1,313,079 | 49,292 | 3.75 % | 1,287,893 | 54,925 | 4.26 % | ||||
Senior debt | 12,666 | 871 | 6.88 % | 17,964 | 1,425 | 7.93 % | ||||
Subordinated debt | 6,993 | 569 | 8.14 % | 9,947 | 660 | 6.64 % | ||||
Federal Home Loan Bank advances | 47,792 | 2,157 | 4.51 % | 68,169 | 3,529 | 5.18 % | ||||
Total interest-bearing liabilities | 1,380,530 | 52,889 | 3.83 % | 1,383,973 | 60,539 | 4.37 % | ||||
Noninterest-bearing deposits | 248,743 | 252,151 | ||||||||
Other noninterest-bearing liabilities | 12,675 | 11,904 | ||||||||
Total liabilities | 1,641,948 | 1,648,028 | ||||||||
Total shareholders' equity | 139,809 | 127,674 | ||||||||
Total liabilities and shareholders' equity | $ | 1,781,757 | $ | 1,775,702 | ||||||
Tax-equivalent net interest income | 40,787 | 33,533 | ||||||||
Net interest-earning assets (3) | $ | 291,641 | $ | 285,555 | ||||||
Average interest-earning assets to interest- | ||||||||||
bearing liabilities | 121 % | 121 % | ||||||||
Tax-equivalent net interest rate spread (4) | 1.77 % | 1.26 % | ||||||||
Tax equivalent net interest margin (5) | 2.44 % | 2.01 % | ||||||||
(1) Tax exempt investments are calculated assuming a 21% federal tax rate | ||||||||||
(2) Reflects the tax equivalent yield of a 5% state tax credit assuming a 26% federal and state tax rate | ||||||||||
(3) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities | ||||||||||
(4) Tax-equivalent net interest rate spread represents the difference between the tax equivalent yield on average | ||||||||||
interest-earning assets and the cost of average interest-bearing liabilities. | ||||||||||
(5) Tax equivalent net interest margin represents tax equivalent net interest income divided by average total | ||||||||||
interest-earning assets | ||||||||||
Appendix C - Reconciliation of Prior Period Non-GAAP Financial Measures | ||||
Three Months Ended | ||||
(Dollars in thousands, except per share data) | ||||
2025 | ||||
September 30 | June 30 | March 31 | ||
Adjusted Net Income | ||||
Net income (GAAP) | $ | 3,898 | 2,806 | 2,179 |
Realized loss on sale of investment securities available for sale | 13 | 8 | 139 | |
Realized and unrealized (gain) loss on equity securities | (29) | 6 | 4 | |
Gain on sale of fixed assets | - | - | (5) | |
Gain on sale of real estate owned | - | (75) | - | |
Corporate and strategic initiatives | - | 243 | - | |
Provision for (recovery of) credit losses | (33) | 138 | 64 | |
Net (charge-offs) recoveries of credit losses | (5) | (7) | (155) | |
Tax effect of adjustments | 14 | (82) | (12) | |
Adjusted net income (Non-GAAP) | $ | 3,858 | 3,037 | 2,214 |
Adjusted Diluted Earnings Per Share | ||||
Diluted earnings per share (GAAP) | $ | 0.62 | 0.45 | 0.35 |
Realized loss on sale of investment securities available for sale | 0.00 | 0.00 | 0.02 | |
Realized and unrealized (gain) loss on equity securities | (0.00) | 0.00 | 0.00 | |
Gain on sale of fixed assets | - | - | (0.00) | |
Gain on sale of real estate owned | - | (0.01) | - | |
Corporate and strategic initiatives | - | 0.04 | - | |
Provision for (recovery of) credit losses | (0.01) | 0.02 | 0.01 | |
Net (charge-offs) recoveries of credit losses | (0.00) | (0.00) | (0.02) | |
Tax effect of adjustments | 0.00 | (0.01) | (0.00) | |
Adjusted diluted earnings per share (Non-GAAP) | $ | 0.62 | 0.48 | 0.35 |
Adjusted Return on Average Assets | ||||
Return on average assets (GAAP) | 0.87 % | 0.63 % | 0.50 % | |
Realized loss on sale of investment securities available for sale | 0.00 % | 0.00 % | 0.03 % | |
Realized and unrealized (gain) loss on equity securities | -0.01 % | 0.00 % | 0.00 % | |
Gain on sale of fixed assets | 0.00 % | 0.00 % | 0.00 % | |
Gain on sale of real estate owned | 0.00 % | -0.02 % | 0.00 % | |
Corporate and strategic initiatives | 0.00 % | 0.05 % | 0.00 % | |
Provision for (recovery of) credit losses | -0.01 % | 0.03 % | 0.01 % | |
Net (charge-offs) recoveries of credit losses | 0.00 % | 0.00 % | -0.04 % | |
Tax effect of adjustments | 0.00 % | -0.02 % | 0.00 % | |
Adjusted return on average assets (Non-GAAP) | 0.86 % | 0.68 % | 0.50 % | |
Adjusted Return on Average Equity | ||||
Return on average equity (GAAP) | 11.03 % | 8.17 % | 6.43 % | |
Realized loss on sale of investment securities available for sale | 0.04 % | 0.02 % | 0.41 % | |
Realized and unrealized (gain) loss on equity securities | -0.08 % | 0.02 % | 0.01 % | |
Gain on sale of fixed assets | 0.00 % | 0.00 % | -0.01 % | |
Gain on sale of real estate owned | 0.00 % | -0.22 % | 0.00 % | |
Corporate and strategic initiatives | 0.00 % | 0.71 % | 0.00 % | |
Provision for (recovery of) credit losses | -0.09 % | 0.40 % | 0.19 % | |
Net (charge-offs) recoveries of credit losses | -0.01 % | -0.02 % | -0.46 % | |
Tax effect of adjustments | 0.04 % | -0.24 % | -0.04 % | |
Adjusted return on average equity (Non-GAAP) | 10.92 % | 8.84 % | 6.53 % | |
Appendix C - Reconciliation of Prior Period Non-GAAP Financial Measures, Continued | ||||
Three Months Ended | ||||
(Dollars in thousands, except per share data) | ||||
2025 | ||||
September 30 | June 30 | March 31 | ||
Adjusted Noninterest Expense to Average Assets | ||||
Noninterest expense to average assets (GAAP) | 1.46 % | 1.55 % | 1.50 % | |
Corporate and strategic initiatives | 0.00 % | -0.05 % | 0.00 % | |
Adjusted noninterest expense to average assets (Non-GAAP) | 1.46 % | 1.49 % | 1.50 % | |
Pre-tax Pre-Provision Earnings | ||||
Net income (GAAP) | $ | 3,898 | 2,806 | 2,179 |
Income taxes | 916 | 668 | 580 | |
Provision for (recovery of) credit losses | (33) | 138 | 64 | |
Pre-tax Pre-provision earnings (non-GAAP) | $ | 4,781 | 3,612 | 2,823 |
Pre-tax Pre-Provision Return on Average Assets (ROAA) | ||||
Return on average assets (GAAP) | 0.87 % | 0.63 % | 0.50 % | |
Income taxes | 0.20 % | 0.15 % | 0.13 % | |
Provision for (recovery of) credit losses | -0.01 % | 0.03 % | 0.01 % | |
Pre-tax Pre-provision return on average assets (non-GAAP) | 1.07 % | 0.81 % | 0.64 % | |
Book and Tangible Book Value Per Share, excluding AOCI | ||||
Book and tangible book value per share (GAAP) | $ | 22.50 | 21.72 | 21.26 |
Impact of AOCI per share | 1.85 | 2.04 | 2.09 | |
Book and tangible book value per share, excluding AOCI (non-GAAP) | $ | 24.35 | 23.76 | 23.35 |
SOURCE Mountain Commerce Bancorp, Inc.
