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CBK, Commercial Bancgroup Inc.
The Bank is a full-service community banking institution that offers traditional consumer and commercial products and services to serve businesses and individuals in select markets in Kentucky, North Carolina, and Tennessee.
Upon the Bank's merger with Alliance Bank & Trust Company ("Alliance") on July 1, 2024, we expanded our services to North Carolina, including parts of the Charlotte-Concord-Gastonia, North Carolina-South Carolina MSA (the "Charlotte MSA"), with branches in Shelby, Kings Mountain and Gastonia.
The business
What it sells, where the money comes from, the kind of company it is.
Next report By 11/13 · the 10-Q for the quarter ended late September · due within 45 days of period end · has filed ~43 days after · the wire records it on arrival
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What moves the needle
- Net interest margin, loan losses, and book value. A lender is read on the quality of its balance sheet, not an earnings multiple, and the worst year of credit losses matters more than the best. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Every line is arithmetic on the company's filings, shown in full in the sections below.
The record
Ten years of arithmetic, read across the cycle.
Operating income down 3.7% year over year
figures computed from the filing's XBRL
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
Is it a good business?
- Return on equity 13%StrongNet income $37M ÷ equity $285MIndustry peers: median 10%
What this means
The bank's north star, what it earns on shareholders' capital. Cost of equity is roughly 10%, so a return durably above that builds value and below it destroys it. One year is noisy; the durability across a full credit cycle is what counts.
- SolidNet income ÷ (equity − goodwill $9M − intangibles $4M)Industry peers: median 11%
What this means
The cleaner return, stripping out the goodwill paid for past acquisitions. This is the number a buyer of the whole bank actually earns on the hard capital.
- Efficiency ratio 47%Low cost ratio (<58%)Noninterest expense $42M ÷ (net interest income + fees)Industry peers: median 58%
What this means
The share of revenue eaten by running costs; lower is better, and below about 60% marks a genuinely efficient operation. A low ratio held for years is the operational side of a moat.
Is it sound?
- Capital (equity / assets) 12.5%Well capitalizedEquity $285M ÷ assets $2.3B
What this means
A plain-English leverage read: how much of the balance sheet is the owners' own money. This is a rough proxy; the regulatory figure is the CET1 ratio, which is risk-weighted and reported in the filing. The point is the same, how much loss the bank can absorb before depositors are at risk.
- Deposit funding 79%Deposit-fundedDeposits $1.8B ÷ assets $2.3B
What this means
Low-cost, sticky deposits are a bank's real moat, the cheap raw material it lends out at a spread. A bank funded mostly by deposits earns more durably than one that rents its money in the wholesale market.
- Credit cost —Not enough data
What this means
Provision or net interest income missing.
The franchise and the credit cycle
- A true franchiseDemand deposits $914M ÷ deposits $1.8B
What this means
The share of deposits the bank pays nothing for — checking accounts that stay through rate cycles. This is the deposit moat in one number: a high share means cheap, sticky raw material for lending; a low share means the funding reprices with every rate move. Buffett's Wells letter is built on exactly this economics.
- Not enough data
What this means
Not derivable from the filings' structured data — some filers carry recoveries only on segment axes, and a gross figure dressed as net would be a wrong number.
- Marks are smallPre-tax, as filed for FY2025: HTM at cost $98M − fair value $94M = $3M, against tangible equity (preferred not deducted) $273M · widest on record FY2024: $7M (54% accreted back since)
What this means
Bonds held to maturity are carried at cost, so rate rises open a gap that only shows in this disclosure. Stated equity already carries every available-for-sale mark through accumulated other comprehensive income; the held-to-maturity book's gap sits outside equity, which is why it is read here. The figure is pre-tax as the filer states it — the true after-tax dent depends on a deferred-tax position the record does not carry. The gap never hits earnings if the bank can hold on, which is precisely why the reader checks whether it could be forced to sell: the 2023 bank failures were this number meeting deposit flight.
All figures as filed; the source filing is linked above.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid.
- Insider ownership36.2%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
- Stock-based compensation$124K
The slice of the business handed to employees in shares in fiscal 2025, 0.1% of revenue, equal to 0.1% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
What an owner would ask, FY2025
read the 10-K →- Which reported numbers are a judgment call?Management names Income taxes, Credit & receivables as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →
The questions the record and the charts do not answer on their own; each carries the figure and the place to look.
Peers, Banks
The same industry, side by side on the bank lens. Each column names the period it is read over, and a median resting on fewer than three years carries that count beside it; the group median at the foot is the line to read each figure against.
| Company | Revenuelatest FY, USD | ROEmedian over the record | ROTCEmedian over the record | Efficiencymedian over the record | NII / assetsmedian over the record | Noninterest-bearing sharelatest FY |
|---|---|---|---|---|---|---|
| BCMLBayCom Corp | $101M | 7% | 8% | 65% | 3.5% | — |
| BSVNBank7 Corp. | $96M | 19% | 21% | 37% | 4.7% | 20% |
| WTBAWest Bancorporation | $95M | 14% | 14% | 49% | 2.6% | 16% |
| CHMGChemung Financial Corp | $95M | 10% | 12% | 68% | 3.0% | 28% |
| CBKCommercial Bancgroup Inc. | $90M | 14%2y | 14%2y | 50%2y | 3.4%2y | — |
| USCBUSCB Financial Holdings Inc. | $90M | 11% | 11% | 57% | 2.9% | 25% |
| NWFLNorwood Financial Corp. | $88M | 10% | 11% | 59% | 3.1% | 20% |
| COSOCoastalSouth Bancshares Inc. | $82M | 10%2y | 11%2y | 59%2y | 3.2%2y | 16% |
| Group median | — | 11% | 11% | 58% | 3.1% | — |
The price
What a price has to assume.
What the price implies
reverse-DCFA bank / financial isn't read on an owner-earnings DCF; its economics live on the balance sheet (book value, the return earned on it, and the cash the assets throw off).
Manual order: ← CBIO its page in the Manual CBL →
Industry order: ← CBC the Banks chapter CBNK →