Calvin B. Taylor Bankshares, Inc. Reports Third Quarter Financial Results and Announces New Stock Repurchase Program

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BERLIN, MD / ACCESS Newswire / December 26, 2025 / Calvin B. Taylor Bankshares, Inc. (the "Company") (OTCQX:TYCB), the holding company of Calvin B. Taylor Bank (the "Bank"), today reported net income for the third quarter 2025 ("3Q25") of $4.2 million, or $1.53 per share compared to net income of $3.9 million, or $1.42 per share for the second quarter of 2025 ("2Q25"), and net income of $3.7 million, or $1.37 per share for the third quarter of 2024 ("3Q24"). Net income for the nine months ended September 30, 2025 was $11.8 million or $4.32 per share, compared to net income for the nine months ended September 30, 2024 of $9.5 million, or $3.47 per share.

The Company also announced that is has adopted and received non-objection from the Federal Reserve Bank of Richmond (the "Federal Reserve") for a new stock repurchase program authorizing the repurchase of up to 10% of the Company's issued and outstanding shares of common stock (approximately 271,438 shares). The new repurchase program will expire on December 31, 2026, unless extended by the Board of Directors pursuant to further non-objection from the Federal Reserve. Repurchases may be made in the open market, through private transactions, or under a Rule 10b5‑1 plan, at the Company's discretion. The amount and timing will depend on market conditions, share availability, stock price, capital needs, and financial performance.

2025 Third Quarter and Year to Date Highlights

• Increasing Return on Average Assets ("ROAA") - The Company reported ROAA of 1.64% for the third quarter of 2025, compared to 1.59% for the third quarter of 2024. For the first nine months of 2025, ROAA was 1.63% when compared to 1.47% for 2024 for the same period in 2024.

• Net Interest Income ("NII") Improvement - NII for the third quarter of 2025 improved $510 thousand or 5.8%, when compared to the second quarter of 2025. Year-to-date NII for 2025 was $26.1 million and is $3.9 million, or 17.6% higher than in 2024. For 2025, higher interest income coupled with lower cost of funds resulted in a net interest margin of 3.79% for the nine months ended September 30, 2025, compared to 3.47% for the same period in 2024.

• Deposit and Loan Growth - Strategic initiatives have driven both deposit and loan growth over the past 12 months. Average deposit balances increased 6.0% while average loans grew 8.2% in third quarter of 2025, compared to the same period last year.

• Strong and Stable Liquidity and Capital - The Company's liquidity ratio (cash and unencumbered debt securities/total deposits) was 34.59% as of September 30, 2025, as compared to 32.65% as of September 30, 2024. The leverage ratio, Tier 1 Capital to average assets, was 13.26% for the quarter ended September 30, 2025, compared to 12.86% for the same period in 2024.

• Stock Repurchase Program - The Company's existing stock repurchase program has been fulfilled which resulted in the repurchase of 300,050 shares of common stock since September 2011. The new stock repurchase program authorizes the Company to repurchase up to 10% of its outstanding common stock which is approximately 271,438 shares.

Chief Executive Officer and President, M. Dean Lewis commented, "Seasonal economic activity on the Delmarva Peninsula drove strong deposit growth this quarter and contributed to the Bank surpassing $1 billion in total assets for the first time in our history. Reaching this milestone reflects the strategic and profitable growth we've achieved. As a result of well-managed growth and strong financial performance, we have been able to complete the current stock repurchase program and initiate a new repurchase program for up to 10% of common shares outstanding. This stock repurchase program underscores our commitment to disciplined capital management and returning value to our stockholders, while maintaining the capital strength necessary to support continued growth and meet regulatory requirements."

Quarterly Results of Operations

Quarterly net income was $4.2 million for 3Q25, as compared to $3.9 million for 2Q25 and $3.7 million for 3Q24. A summary of the quarterly results of operations are included in the table and comments that follow.

Net interest income increased $510 thousand, or 5.8% in 3Q25, as compared to 2Q25, due to increases in interest income on deposits with other banks of $278 thousand, interest on investment securities of $239 thousand and interest and fee income on loans of $97 thousand. The improvement in interest income was primarily due to increases in the average balance of deposits with other banks of $28.5 million and investment securities of $16.6 million. The higher interest income on loans in 3Q25 was due to a combination of higher average balances in residential real estate loans of $4.1 million, and an improved yield on commercial real estate loans of 4 bps. Net interest income increased $1.1 million, or 13.6% in 3Q25, as compared to 3Q24, primarily due to an increase in average loan balances of $49.2 million coupled with an increase in loan yields by 28 bps. In addition, the average balance on investment securities increased $27.4 million and the average yield on these securities improved 74 bps.

Provision expense for credit losses was $400 thousand for 3Q25, compared to $401 thousand for 2Q25 and $0 for 3Q24.Loans past due 30 days or more decreased to 0.15% at the end of 3Q25, when compared to 0.89% at the end of 2Q25 and 0.65% at the end of 3Q24. The decrease in loans past due 30 days or more when compared to 2Q25, was the result of one loan in the amount of $4.5 million which became current in 3Q25. During the third quarter of 2025, the Company recorded three charge‑offs totaling $98 thousand. These charge-offs are long standing credits with minimal balances and had a positive impact on the improved credit metrics when compared to 3Q24, along with overall enhanced workout efforts by the Company's credit department during 2025.

Noninterest income increased in 3Q25 by $263 thousand, or 27.4%, as compared to 2Q25, and increased $287 thousand, or 30.7%, as compared to 3Q24. The increase in 3Q25 when compared to both the 2Q25 and 3Q24 was primarily due to the sale of an equity investment by the Company that resulted in a gain of $243 thousand. In addition, the purchase of $5 million in bank owned life insurance ("BOLI") in 2Q25 provided higher noninterest income in 3Q25 when compared to prior quarters.

Noninterest expense increased by $336 thousand, or 7.7% in 3Q25, as compared to 2Q25. The increase was primarily related to higher employee benefits costs of $259 thousand, along with higher salaries and wages expense of $96 thousand. The increase in employee benefits in 3Q25 consisted of higher health insurance claims, payroll taxes and non-qualified deferred compensation expense. Noninterest expenses increased in 3Q25 by $470 thousand, or 11.1%, as compared to 3Q24, which primarily related to higher data processing costs due to a core conversion upgrade in late 2024, higher salaries to remain competitive in the current labor market, and the addition of a new branch in Cape Charles, Virginia which increased overall operating costs.

Quarterly per share data and repurchase of stock by the Company for each period is included in the following table. The amount and timing of future stock repurchases will depend upon several factors including regulatory capital requirements, market value of the Company's stock, general market and economic conditions, liquidity, and other relevant considerations, as determined by the Company.

Year to Date Results of Operations

Net income was $11.8 million for the nine months ended September 30, 2025, as compared to $9.5 million for the nine months ended September 30, 2024, an increase of $2.2 million, or 23.3%. A summary of the year-to-date results of operations are included in the table and comments below.

Net interest income increased $3.9 million, or 17.6%, for the nine months ended September 30, 2025, as compared to same period last year, and was attributable to increases in interest income from loans and investment securities, partially offset by higher interest expense on deposits and lower interest income on deposits with other banks. The average balance of loans in 2025 increased $57.5 million and total loan yields improved 21 bps, when compared to 2024. In addition, the average balance of investment securities increased $18.5 million, and yields improved 59 bps, when compared to the prior year. Deposit costs increased $407 thousand, or 5.4%, in the first nine months of 2025, the result of growth in average interest-bearing deposits of $51.1 million and partially offset by a 12 bps reduction in rates paid on interest-bearing deposits.

The allowance for credit losses was 0.73% of total loans as of September 30, 2025, compared to 0.63% as of September 30, 2024. The provision for credit losses recorded in the nine months ended September 30, 2025, of $1.2 million was the result of loan growth, aging within the loan portfolio and the updated change to the qualitative factors in the CECL model in 2025.

Noninterest income for the nine months ended September 30, 2025, increased by $1.4 million, or 54.9%, as compared to the nine months ended September 30, 2024, primarily due to the sale of excess land adjacent to bank property in 2025, which resulted in a gain of $1.9 million. The increase related to the gain on sale was partially offset by lower net BOLI income of $444 thousand related to death insurance proceeds received in 2024, and an increase in realized losses of $394 thousand in 2025 due to the sale of certain investment securities as part of a swap loss trade. Other sources of noninterest income improved in 2025, compared to 2024, related to debit card interchange fees and other banking service charges.

Noninterest expense for the nine months ended September 30, 2025, increased $1.7 million, or 14.1% as compared to the same period in 2024, and is primarily the result of increased costs for data processing of $661 thousand, salary and wages of $649 thousand and employee benefits of $153 thousand. The increase in data processing expense was related to a core system conversion in 4Q24. Higher compensation and employee benefit expenses related to talent acquisition and higher salaries and wages paid to remain competitive in the current labor market. Other operating costs increased by $239 thousand, which related to increases in professional fees, statement and postage expenses, and the addition of the Cape Charles, Virginia branch in the second quarter of 2025 which increased overall operation costs.

Per share data and repurchases of stock by the Company for each period are included in the following table.

Financial Condition

Core deposits, deposit insurance, liquidity and capital remain an area of focus for the Company and the entire banking industry. The Company relies mostly on core deposits, as defined by bank regulators, which are gathered from customers in local markets. The Company and the Bank remain well capitalized according to regulatory capital standards and exceed the threshold to be well capitalized (Community Bank Leverage Ratio) as of September 30, 2025. The Company's financial condition at quarter end or for the quarter ended is summarized in the table and comments that follow.

The Company's deposits increased $40.6 million, or 4.8% when compared to the end of 2Q25. The Company usually experiences peak deposit balances at the end of the third quarter due to the seasonal tourism economy in our markets. The Company's deposits increased by $40.5 million, or 4.8% when compared to the end of 3Q24. The increase in deposits since last year has been the result of concerted efforts to grow core deposit relationships within current and newly expanded markets, such as Northampton County, Virginia.

The Bank operates with a high level of core deposits, defined by banking regulators as checking, money market, and savings accounts plus any time deposits less than $250,000. All deposit accounts with a balance in excess of the FDIC insurance limit of $250,000 are disclosed on quarterly regulatory reports filed with bank regulators. As of 3Q25, the Bank had deposit accounts with balances in excess of $250,000 totaling $223.0 million, which represents 25.3% of total deposits, as compared to $207.8 million or 24.7% as of 2Q25 and $233.2 million or 27.7% of total deposits as of 3Q24. The Bank is a member of the IntraFi Network which enables large depositor's access to multimillion-dollar FDIC insurance for funds placed into the network and provides an equal amount of reciprocal deposits under FDIC insurance limits to the bank. Reciprocal deposits from the IntraFi Network were $157.3 million as of 3Q25, as compared to $131.2 million and $122.2 million as of 2Q25 and 3Q24, respectively.

On-balance sheet liquidity, as measured by cash and unencumbered available for sale debt securities, remains strong as of 3Q25 and equaled 34.6% of total deposits. Selected liquidity metrics are summarized in the table below.

Noncore funding sources are available to the Bank but are intended for contingency funding needs and not to pursue growth. As of September 30, 2025, the Bank can borrow up to $241.7 million from the Federal Home Loan Bank ("FHLB") that would require pledging of loans and/or debt securities as collateral. Debt securities currently pledged are collateral for public deposits.

Loans and Asset Quality

Higher interest rates, economic uncertainty and other factors have impacted current loan demand as compared to demand experienced in the previous 12 months. Conversely, funding of previously committed construction loans, localized demand for commercial real estate loans, and seasonal borrowings during for the first nine months of 2025 resulted in continued organic loan growth with loans increasing $13.4 million, or 2.1%, since December 31, 2024. Loan growth of $50.2 million, or 8.5%, in the previous 12 months was the result of strong demand for local real estate and construction of both residential and commercial properties. Loan originations and maturities within the current interest rate environment over the last 12 months have expanded the yield on loans from 5.38% in 3Q24 to 5.66% in 3Q25. Loan yields increased 1 bps in 3Q25 as compared to 2Q25.

Overall loan performance remains strong despite inflation and a high-interest rate environment. Credit quality metrics at the end of 3Q25 significantly improved due to one borrowing relationship of $4.5 million that was current as of September 30, 2025, but was over 30 days past due as of June 30, 2025. Selected asset quality metrics are summarized in the table below.

Financial Statements

Consolidated balance sheets at period end and consolidated statements of income for the periods ended are presented below.

Calvin B. Taylor Bankshares, Inc.

Consolidated Balance Sheets

Calvin B. Taylor Bancshares, Inc.

Consolidated Statements of Income

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About Calvin B. Taylor Banking Company

Calvin B. Taylor Banking Company, the bank subsidiary of Calvin B. Taylor Bankshares, Inc. (OTCQX: TYCB), founded in 1890, offers a wide range of loan, deposit, and ancillary banking services through both physical and digital delivery channels. The Company has twelve full-service banking locations and one loan production office within the eastern coastal area of the Delmarva Peninsula including Worcester County and Wicomico County, Maryland, Accomack County and Northampton County, Virginia and Sussex County, Delaware.

Contact

Philip O'Neil, Executive Vice President and Chief Financial Officer

410‑641‑1700, taylorbank.com

SOURCE: Calvin B. Taylor Bankshares, Inc.