CNB Community Bancorp, Inc. Reports Second Quarter 2026 Results

HILLSDALE, Mich.--(BUSINESS WIRE)--CNB Community Bancorp, Inc. (OTCQX: CNBB), the parent company of County National Bank (the “Bank” “CNB”), today announced earnings for the three and six months ended June 30, 2026. Earnings during the second quarter of 2026 totaled $3.2 million, an increase of $166,000, or 5.5%, compared to the $3.0 million earned during the three months ended June 30, 2025. The increase in net income was predominately the result of an increase in net interest income of $1.0 million partially offset by an increase in the provision for credit losses of $584,000. Basic earnings per share for CNB Community Bancorp, Inc. (the “Company”) increased to $1.61 during the three months ended June 30, 2026, up $0.13 from $1.48 during the second quarter of 2025. For the six months ended June 30, 2026, the Company reported net income of $6.1 million, which was an increase of $461,000, or 8.1%, from the $5.7 million earned during the six months ended June 30, 2025, predominately resultant from an increase in net interest income somewhat offset by increases in noninterest expense. Basic earnings per share increased to $3.10 during the six months ended June 30, 2026, up $0.32 from $2.78 for the first six months of 2025.

The annualized return on average assets (“ROA”) decreased to 0.94% for the three months ended June 30, 2026, down a single basis point, or 1.1%, from 0.95% for the three months ended June 30, 2025. The annualized return on average equity (“ROE”) decreased to 11.65% for the current quarter, down from 11.71% for the second quarter of 2025. ROA increased to 0.92% for the six months ended June 30, 2026, up three basis points from the 0.89% during the first six months of 2025. ROE was 11.41% during the first half of 2026, up from 11.27% during the six-month period ended June 30, 2025. Book value per share increased to $56.10 at June 30, 2026, up $4.95 from $51.15 at June 30, 2025.

Joseph R. Williams, President and Chief Executive Officer of CNB Community Bancorp, Inc. and County National Bank, stated, “The results for the first half of 2026 continued an upward trend in earnings, and was only the second time that CNB exceeded $6.0 million in earnings in the first half of the year with the first time being in 2021. We have positioned ourselves to perform similarly whether in a falling or rising rate environment and, as such, have not seen material impact from our current rate environment. Our associates continue enhancing existing relationships and expanding new relationships in all of our communities.

However, growth is not the sole focus as we continue to work on improving our processes across all areas including operations and credit. Our credit team has been working through our nonperforming credits. Even though we have added over $13 million in nonperforming credits since the end of last year, we believe that we have made significant progress in not only collecting on these credits but moving some back to performing status. Finally, my focus is on our three pillars: Our shareholders have seen continued improvements in book value, earnings per share, and market value; our communities have seen CNB contribute over $280,000 to local charitable organizations in the last twelve months; and our associates have not only seen multiple promotions but have increased to 241.”

Financial Highlights

• Total assets increased year-over-year $89.1 million, or 7.0%, to $1.36 billion compared to June 30, 2025, and increased $44.9 million, or 3.4% from December 31, 2025.
• Net loans increased $69.3 million, or 6.6%, to $1.13 billion at June 30, 2026, compared to $1.06 billion at June 30, 2025, and increased $42.7 million, or 3.9%, from December 31, 2025.
• Total deposits increased $2.6 million, or 0.2%, to $1.10 billion at June 30, 2026, compared to June 30, 2025, and decreased $12.8 million, or 1.1% from December 31, 2025.
• Tangible book value per share increased $4.91, or 9.8%, to $54.79 at June 30, 2026, up from $49.88 at June 30, 2025, and up $2.39, or 4.6%, from $52.40 at December 31, 2025.
• The Company repurchased 2,700 shares in the second quarter of 2026 as part of the ongoing buyback announced earlier in 2026, paying $49.25 per share. Total shares outstanding are 2,019,413 as of June 30, 2026 compared to 2,038,598 at December 31, 2025.
• Net income increased $166,000, or 5.5%, to $3.2 million for the three-month period ended June 30, 2026, and basic EPS increased $0.13, or 8.8%, from $1.48 to $1.61 in the second quarter of 2026 in comparison to the second quarter of 2025.
• Net interest income for the second quarter of 2026 increased $1.0 million to $12.7 million from $11.7 million for the three months ended June 30, 2025.
• Pre-tax, pre-provision income increased $770,000 to $4.7 million in the second quarter of 2026, a 19.7% increase from the second quarter of 2025.

Balance Sheet Review

The Company’s assets totaled $1.36 billion at June 30, 2026, compared to $1.32 billion in assets at December 31, 2025, and $1.28 billion at June 30, 2025. The change in assets was resultant from an increase in lending to new and existing clients, along with additional debt securities purchased in the fourth quarter of 2025. The funding was derived from ongoing deposit efforts and additional borrowings along with an asset shift from cash to loans and debt securities.

Net loans totaled $1.13 billion at June 30, 2026, compared to $1.08 billion at December 31, 2025, and $1.06 billion at June 30, 2025. The loan portfolio at June 30, 2026, included: $663.9 million in commercial real estate loans, $247.1 million in commercial loans, $191.8 million in residential real estate loans, and $35.5 million in consumer loans.

Nonperforming assets (which are comprised of nonperforming loans and other real estate owned) at June 30, 2026, were $30.1 million, an increase of $13.3 million, or 79.2%, from the $16.8 million at December 31, 2025, and an increase of $23.1 million, or 330.0%, from the $7.0 million at June 30, 2025. Nonperforming assets as a percentage of total assets increased to 2.21% at June 30, 2026, from 1.27% at December 31, 2025, and 0.55% at June 30, 2025.

Nonperforming loans at June 30, 2026, were $29.9 million, an increase of $13.3 million, or 80.1%, from the $16.6 million balance at December 31, 2025, and an increase of $22.9 million, or 327.1%, from the $7.0 million balance at June 30, 2025. Nonperforming loans as a percentage of total loans increased to 2.62% at June 30, 2026, from 1.51% at December 31, 2025, and 0.66% at June 30, 2025. Although the increase in nonperforming loans and assets were not particular to a specific industry or geographic area, the credits have been predominately commercial real estate. As these credits are nonperforming, CNB continues the process of working out these credits, which includes assigning specific CNB personnel, usage of professional third parties, and working through the legal process, when necessary.

During the second quarter of 2026, the Bank recorded a provision for credit losses of $730,000, which is a decrease of $1.1 million from $1.8 million recorded during the fourth quarter of 2025 and an increase of $584,000 from a provision of $146,000 recorded during the second quarter of 2025. Net charge-offs totaled $513,000 during the second quarter of 2026 compared to net charge-offs of $2.4 million in the fourth quarter of 2025 and $783,000 in the second quarter of 2025.

Net charge-offs (annualized) as a percentage of average loans was 0.19% for the second quarter of 2026, 0.95% for the fourth quarter of 2025 and 0.30% for the second quarter of 2025. The allowance for credit losses totaled $12.7 million at June 30, 2026 compared to $12.1 million at December 31, 2025, and $13.0 million at June 30, 2025. The allowance for credit losses as a percentage of total loans increased to 1.11% at June 30, 2026, compared to 1.10% at December 31, 2025, and decreased from 1.21% at June 30, 2025. The allowance as a percentage of loans decreased year-over-year as a result of the $3.3 million in charge-offs over the last twelve months, the increase in the loan portfolio, and certain inputs in the allowance calculation including loss history and overall economic conditions. The allowance will continue to be adjusted based upon the current and potential issues inherent in the portfolio.

Total investment securities exclusive of the Federal Home Loan Bank of Indianapolis, Federal Reserve Bank, and other stock without readily determined fair values, aggregated to $165.1 million at June 30, 2026, which is a decrease from $170.2 million at December 31, 2025, and an increase from $119.5 million at June 30, 2025. This decrease from year-end 2025 was a result of maturities of certain securities and amortization of purchase premiums and paydowns of mortgage-backed securities. The year-over-year increase was due to the purchase of $62 million in debt securities related to a strategy of further leveraging the Bank’s balance sheet partially offset by the aforementioned maturities, amortization, and paydowns. While continued growth of the loan portfolio remains the primary focus for Bank management, the Bank will continue to manage the securities portfolio through prudent investment in securities that align with the Bank’s investment criteria when excess cash is available.

Noninterest bearing deposits have decreased by $5.4 million (2.5%) from $216.3 million at December 31, 2025, and decreased by $12.9 million (5.8%) from $223.8 million one year ago. Interest bearing deposits have decreased from $901.2 million at December 31, 2025, to $893.7 million at June 30, 2026, but increased from $878.2 million at June 30, 2025. Deposits are being impacted by the changing rate environment as the competition from higher yielding non-depository investment vehicles continues within the markets for consumer, commercial, and public fund deposits. The results have been a reallocation of deposits resulting in a reduction in noninterest-bearing deposits. CNB’s ongoing relationship banking efforts by our associates focuses on retaining existing clients as well as expanding relationships within the communities that the Bank serves.

The Company’s outstanding borrowings increased by $55.2 million to $138.2 million at June 30, 2026, compared to $83.0 million at December 31, 2025, and by $79.7 million from $58.5 million at June 30, 2025. The increase from year-end 2025 was a part of the Bank’s funding strategy that resulted in a net increase of $55.2 million, which included a reduction in debt of $705,000 at the holding company. The increase from June 30, 2025, was the result of a net borrowing increase at the Bank of $71.5 million related to CNB’s funding strategy and $8.2 million in additional debt at the holding company done in conjunction with the stock repurchase and the aforementioned leverage strategy.

Total shareholders’ equity increased $3.2 million (3.0%) from $107.8 million at December 31, 2025, and $6.2 million (5.9%) from $104.8 million a year ago. The $3.2 million increase was mainly related to earnings during the first half of 2026 of $6.1 million, which was partially offset by the repurchase of $1.3 million in holding company shares, an increase of $275,000 in the unrealized loss on available-for sale securities, and dividends totaling $1.4 million. On a year-over-year basis, the increase of $6.2 million in equity was predominately related to net income of $12.4 million, an increase in common stock from vesting of restricted shares and stock grants of $692,000, and a decrease in the loss position of OCI from temporary market value adjustments to the securities portfolio of $155,000. The partial offset was a result of the share repurchases of 88,472 shares at $4.0 million and the $3.1 million in dividends paid over the last twelve months to shareholders.

Net Interest Income and Net Interest Margin

Net interest income, on a non-fully tax equivalent basis, was $12.7 million for the quarter ended June 30, 2026, up $1.0 million, or 8.8%, from $11.7 million during the second quarter of 2025. Interest income for the second quarter of 2026 increased $1.0 million, or 5.6%, from $17.5 million for the second quarter of 2025 to $18.5 million for the second quarter of 2026, mainly due to increases in rate and volume across the loan portfolio. Interest expense for the second quarter of 2026 decreased

$43,000 to remain at $5.8 million, and for the six months ended June 30, 2026, decreased $274,000 (2.3%) to $11.5 million from $11.8 million for the six months ended June 30, 2025. These decreases were driven by certificates of deposit rates resetting at lower current market values along with overall decrease in rates on higher yielding money market and public funds accounts. The decrease was minimally offset by deposits continuing to transition to interest-bearing accounts from noninterest-bearing accounts as well as overall growth in deposits.

Net interest margin (“NIM”) is net interest income expressed as a percentage of average interest-earning assets. For the quarter ended June 30, 2026, the net interest margin on a fully taxable equivalent basis increased to 4.07% from 3.91% for the second quarter of 2025, and for the six months ended June 30, 2026, increased to 4.04% from 3.81% for the six months ended June 30, 2025. Much of the change in margin has been a product of the market rates continuing to moderate with the cost of funds decreasing 6.7%, or 13 basis points, to 1.83% in the second quarter of 2026 from 1.96% during that same period in 2025, while year-to-date 2026 cost of funds improved to 1.83% compared to 1.99% in 2025. Over the second quarter of 2026, the yield on earning assets improved to 5.77% from 5.72% during the same period in 2025 while during the first half of 2026 yield on earning assets improved to 5.75% from 5.69% during the first half of 2025.

Noninterest Income/Expense

During the three months ended June 30, 2026, noninterest income totaled $2.6 million, an increase of $348,000 (15.8%) from the $2.2 million for the three months ended June 30, 2025 and was $4.6 million, an increase of $317,000 (7.4%) from the $4.3 million, for the six months ended June 30, 2025. From a quarter-over-quarter comparison, the increase in noninterest income of $348,000 was driven by increases in Gain on sale of loans of $102,000, ATM service charges of $44,000, and a valuation adjustment for an equity position of $95,000. Year-over-year the $317,000 increase was driven by increases in Gain on sale of loans of $107,000, ATM service charges of $50,000, and a valuation adjustment for an equity position of $39,000.

Noninterest expense totaled $10.6 million during the three months ended June 30, 2026, an increase of $607,000 (6.1%) from the second quarter of 2025 and there was an increase of $1.3 million (6.6%) from $19.8 million for the six months ended June 30, 2025 to $21.1 million for the same period in 2025. The largest components of the increase in quarter-over-quarter noninterest expense were increases in salaries and employee benefits of $224,000 related to an increase in the number of associates and increases in expense for insurance, as well as an occupancy and equipment expense increase of $211,000 related to software cost increases and the refurbishment of existing sites. Through the first six months of 2026, salaries and employee benefits increased $435,000 and occupancy and equipment expense increased $380,000 from that same period in 2025. The increase in associate related expense was driven by an increase in the number of associates as well as increases in expense for insurance. The increase in occupancy and equipment expense was mainly due to software expense increases across multiple different line items and renovation to the existing network of buildings owned or leased by the Bank.

About CNB Community Bancorp Inc.

CNB Community Bancorp, Inc. (OTCQX:CNBB) is a one-bank holding company. Its subsidiary bank, County National Bank, is a nationally chartered full-service community bank that also offers investment management and trust services and has been serving southern Michigan since 1934. The corporate headquarters are in Hillsdale, Michigan. CNB provides a wide array of financial products and services through its 13 full-service offices, three loan production offices, and 18 ATMs.

Safe Harbor Statement

This news release and other releases and reports issued by the Company may contain "forward-looking statements." The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company is including this statement for purposes of taking advantage of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.

CNB Community Bancorp, Inc. Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
ASSETS	June 30, 2026			December 31, 2025			June 30, 2025
Cash and due from banks	$	21,428		$	15,947		$	49,806
Debt securities		164,671			169,859			119,084
Marketable equity securities		387			355			389
Loans & leases:
Commercial		247,090			241,459			246,411
Commercial real estate		663,877			630,374			604,320
Residential real estate		191,779			186,683			179,935
Consumer and other		35,471			36,458			38,706
Deferred loan and lease origination costs, net		642			628			511
Allowance for credit losses		(12,653	)		(12,074	)		(12,957	)
Loans and leases, net		1,126,206			1,083,528			1,056,926
Loans held for sale		589			463			871
Accrued interest receivable		5,432			5,396			8,383
Bank premises and equipment, net		11,378			11,588			11,456
Bank-owned life insurance		17,956			17,658			17,371
Goodwill		2,591			2,591			2,591
Other		14,008			12,332			8,687
Total assets	$	1,364,646		$	1,319,717		$	1,275,564
LIABILITIES
Deposits:
Noninterest-bearing	$	210,924		$	216,256		$	223,757
Money market and interest checking		566,940			588,907			562,177
Savings		137,872			142,664			138,208
Time		188,935			169,659			177,892
Total deposits		1,104,671			1,117,486			1,102,034
Borrowings		138,169			82,975			58,504
Accrued interest payable		978			874			(1,140	)
Other		9,872			10,617			11,406
Total liabilities		1,253,690			1,211,952			1,170,804
SHAREHOLDERS' EQUITY
Common stock		8,613			9,416			11,952
Unearned restricted stock awards		(1,694	)		(1,168	)		(1,715	)
Retained earnings		105,996			101,201			96,637
Accumulated other comprehensive loss		(1,959	)		(1,684	)		(2,114	)
Total shareholders' equity		110,956			107,765			104,760
Total liabilities and shareholders' equity	$	1,364,646		$	1,319,717		$	1,275,564
Ratios:
Nonperforming loans and leases to total loans and leases		2.62	%		1.51	%		0.66	%
Quarterly net charge-offs to average loans and leases (annualized)		0.19	%		0.95	%		0.30	%
Allowance for credit losses to total loans and leases		1.11	%		1.10	%		1.21	%
Book value per share (includes only vested stock)	$	56.10		$	53.69		$	51.15
Tangible book value per share (includes only vested stock)	$	54.79		$	52.40		$	49.88
Nonperforming loans	$	29,882		$	16,558		$	7,049
Nonperforming assets	$	30,127		$	16,803		$	7,049

CNB Community Bancorp, Inc. Condensed Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share data)
	Second Quarter			Second Quarter			%		For the Six Months Ended June 30,						%
		2026			2025		Change			2026			2025		Change
Interest income	$	18,517		$	17,530		5.6	%	$	36,649		$	34,814		5.3	%
Interest expense		5,786			5,829		(0.7	%)		11,516			11,790		(2.3	%)
Net interest income		12,731			11,701		8.6	%		25,133			23,024		9.2	%
Provision for credit losses		730			146		400.0	%		1,005			336		199.1	%
Noninterest income:
Service charges on deposit
accounts		327			311		5.1	%		641			605		5.9	%
ATM service charges		652			608		7.1	%		1,211			1,161		4.3	%
Gain on sale of loans		218			116		88.2	%		342			235		45.6	%
Wealth Management		806			796		1.3	%		1,527			1,511		1.1	%
Other noninterest income		557			381		46.0	%		847			739		14.6	%
Total noninterest income		2,560			2,212		15.8	%		4,568			4,251		7.4	%
Noninterest expense:
Compensation and benefits		5,910			5,686		3.9	%		11,751			11,316		3.8	%
Occupancy and equipment		1,801			1,590		13.3	%		3,601			3,221		11.8	%
ATM Expenses		458			474		(3.4	%)		914			889		2.9	%
Marketing and public relations		271			222		22.4	%		486			445		9.3	%
Professional services		200			247		(19.1	%)		391			490		(20.2	%)
Data Communications		473			503		(6.1	%)		944			986		(4.3	%)
Other expense		1,487			1,271		17.0	%		2,969			2,502		18.7	%
Total noninterest expense		10,600			9,993		6.1	%		21,056			19,849		6.6	%
Income before provision for
income taxes		3,961			3,774		4.9	%		7,640			7,090		7.8	%
Provision for income taxes		773			752		2.8	%		1,495			1,406		6.3	%
Net income	$	3,188		$	3,022		5.5	%	$	6,145		$	5,684		8.1	%
Basic earnings per share*	$	1.61		$	1.48		8.8	%	$	3.10		$	2.78		11.5	%
Net interest margin as a percentage of average earning assets (fully taxable equivalent) (Bank Level)		4.07	%		3.91	%				4.04	%		3.81	%
Return on average assets (ROA)		0.94	%		0.95	%				0.92	%		0.89	%
Return on average equity (ROE)		11.65	%		11.71	%				11.41	%		11.27	%
NOTES:
*Includes only vested stock