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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.
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 customer concentration, 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.
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.
Does AI threaten the moat?
Low contestabilityThe moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.
Its FY2025 10-K names artificial intelligence as a competitive threat.
“Additionally, if we fail to keep pace with rapidly evolving AI technological developments, our competitive position and business results may be negatively impacted.”
AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
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 this year, 0% of revenue, equal to 0% 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 figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | ROE | ROTCE | Efficiency | NII / assets |
|---|---|---|---|---|---|
| BCMLBayCom Corp | $101M | 7% | 8% | 65% | 3.5% |
| BSVNBank7 Corp. | $96M | 19% | 21% | 37% | 4.7% |
| WTBAWest Bancorporation | $95M | 14% | 14% | 49% | 2.6% |
| CHMGChemung Financial Corp | $95M | 10% | 12% | 68% | 3.0% |
| CBKCommercial Bancgroup Inc. | $90M | 13% | 14% | 47% | 3.5% |
| USCBUSCB Financial Holdings Inc. | $90M | 11% | 11% | 57% | 2.9% |
| NWFLNorwood Financial Corp. | $88M | 10% | 11% | 59% | 3.1% |
| COSOCoastalSouth Bancshares Inc. | $82M | 10% | 10% | 58% | 3.2% |
| 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 →