KNOXVILLE, Tenn., July 21, 2025 /PRNewswire/ -- Financial Results Announcement
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 six months ended June 30, 2025.
The Company also announced today that its Board of Directors declared a quarterly cash dividend of $0.07 per common share, its nineteenth consecutive quarterly dividend. The dividend is payable on September 2, 2025, to shareholders of record as of the close of business on August 4, 2025.
Senior Revolving Line of Credit
On July 15, 2025, the Company established a senior revolving line of credit in the maximum amount of $25 million with a financial institution. This line of credit replaces the existing senior revolving line of credit with a current balance of $10 million that was due to mature on August 1, 2025.
Pursuant to the terms of the loan and security agreement, the line of credit will mature on July 15, 2027, and bear interest at a per annum rate equal to the Prime Rate in effect from time to time minus .50 percent (50 bps), subject to a floor rate of 5.00%. Interest-only payments on the line of credit are due quarterly, with remaining principal amounts due at maturity. A non-use fee of .10 percent (10 bps) will be assessed if the principal amount declines below $10 million. The Company's obligations under the line of credit are secured by a pledge of 100% of the stock of the Bank and are subject to terms and covenants similar to the existing senior revolving line of credit. The Company intends to use the available balance of the line of credit to support the operations of the Bank and for general corporate purposes.
Management Commentary
William E. "Bill" Edwards, III, President and Chief Executive Officer of the Company, commented:
"We are pleased to see our earnings continue to increase with adjusted return on average assets and equity rising to 0.68% and 8.84%, respectively, for the second quarter of 2025, compared to 0.50% and 6.53%, respectively, in the first quarter of 2025. We continued to see further improvements in our net interest margin, which improved from 2.31% in the first quarter of 2025 to 2.40% in the second quarter of 2025, and increased significantly from 2.00% one year ago in the quarter ended June 30, 2024. We anticipate continued improvement in our net interest margin throughout the remainder of 2025 due to 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.
While we have experienced an increase in non-performing assets, 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 1.49% during the second quarter of 2025, which continues to be 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 7.66% at June 30, 2025, from 7.58% at December 31, 2024, with the Bank's leverage ratio finishing the second quarter of 2025 at 9.22%. We also remain committed to paying down senior debt, which declined by $2 million and $4 million for the three and six months ended June 30, 2025, and by $8 million from June 30, 2024.
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."
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 six months ended June 30, 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, 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 June 30
(Dollars in thousands, except per share data)
- 2025
- 2024
- GAAP
- Adjusted (1)
- Net income: $2,806 vs $2,324
- Diluted earnings per share: $0.45 vs $0.37
- Return on average assets (ROAA): 0.63% vs 0.53%
- Return on average equity: 8.17% vs 7.46%
- Noninterest expense to average assets: 1.55% vs 1.36%
- Net interest margin (tax equivalent): 2.40% vs 2.00%
For the Six Months Ended June 30
(Dollars in thousands, except per share data)
- 2025
- 2024
- GAAP
- Adjusted (1)
- Net income: $4,985 vs $3,839
- Diluted earnings per share: $0.79 vs $0.61
- Return on average assets (ROAA): 0.56% vs 0.43%
- Return on average equity: 7.31% vs 6.20%
- Noninterest expense to average assets: 1.52% vs 1.33%
- Net interest margin (tax equivalent): 2.36% vs 1.80%
Conclusion
The Company remains optimistic about its financial performance and is focused on continued growth and stability.
