1. MCBI declared a quarterly cash dividend of $0.07, a 40% increase. 2. Net interest margin improved to 2.31% in Q1 2025. 3. Non-performing loans decreased to 0.06% of total loans. 4. Net income increased by 44% compared to Q1 2024. 5. Strong asset quality supports potential earnings growth.
The increase in dividends and net income suggests improved financial health, which can positively impact market perception and stock price, similar to historical responses seen with dividend increases in U.S. banks.
The focus on dividends and net income growth highlights MCBI's strong operational metrics and appeal to dividend investors, likely affecting its trading environment positively.
Rising dividends and improving earnings are likely to affect stock price in the near term as investor sentiment often reacts quickly to financial performance.
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 months ended March 31, 2025.
The Company also announced today that its Board of Directors declared a quarterly cash dividend of $0.07 per common share, its eighteenth consecutive quarterly dividend, and a 40% increase from the prior quarter. The dividend is payable on June 2, 2025 to shareholders of record as of the close of business on May 5, 2025.
William E. "Bill" Edwards, III, President and Chief Executive Officer of the Company, commented as follows:
"We continued to see further improvements in our net interest margin which improved from 2.29% in the fourth quarter of 2024 to 2.31% in the first quarter of 2025, and finished the quarter at 2.33% for the month of March 2025. The Company anticipates continued improvement in its net interest margin throughout 2025 as the result of rising loan portfolio yields and improved funding costs resulting from contractually scheduled repricing of certain deposits and borrowings. We also believe our net interest margin is well positioned and protected in a variety of potential interest rate scenarios. Our cost of funds declined 18 bp to 3.30% in the first quarter of 2025 from 3.48% in the fourth quarter of 2024. Partially offsetting this improvement was a 9 bp decline in taxable loan yields to 5.78% in the first quarter of 2025 from 5.87% in the fourth quarter of 2024 as a result of the Federal Reserve's decision to reduce interest rates on December 18, 2024.
We continue to experience excellent asset quality with non-performing loans to total loans of 0.06% and an allowance to non-performing loans coverage ratio of over 12x. Our noninterest expense to average assets was 1.50% during the first quarter of 2025, which is approximately half that of similarly-sized peer banks based on recent call report data. Careful management of our dividend and asset growth has allowed our tangible common equity to tangible assets ratio to rise to 7.60% at March 31, 2025 from 7.58% at December 31, 2024, with the Bank's leverage ratio finishing the first quarter of 2025 at 9.35%.
In summary, we will seek to continue to carefully control our risk and growth while net interest margin and earnings continue to recover. Our modeling and forecasting suggest continued improvement in earnings throughout 2025, should macro-economic conditions hold."
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 months ended March 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, 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.
| (Dollars in thousands, except per share data) | 2025 | 2024 |
|---|---|---|
| Net income | $2,179 | $1,515 |
| Diluted earnings per share | $0.35 | $0.24 |
| Return on average assets (ROAA) | 0.50 % | 0.34 % |
| Return on average equity | 6.43 % | 4.92 % |
| Net interest margin (tax equivalent) | 2.31 % | 1.66 % |
The following summarizes changes in the Company's noninterest income for the periods indicated:
| Three Months Ended March 31 | 2025 | 2024 |
|---|---|---|
| Service charges and fees | $384 | $382 |
| Bank owned life insurance | $55 | $55 |
| Total noninterest income | $528 | $782 |
Total assets increased $48.0 million, or 2.75%, from $1.746 billion at December 31, 2024 to $1.794 billion at March 31, 2025. The change was primarily driven by the following factors.
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. The Bank focuses on responsive relationship banking of small and medium-sized businesses, professionals, and affluent individuals. For further information, please visit us at www.mcb.com.