Calvin B. Taylor Bankshares (OTCQX: TYCB) posted robust third-quarter 2025 results, demonstrating significant year-over-year growth in both net income and key operational metrics. The company reported a net income of $4.2 million, or $1.53 per share, a notable increase from $3.7 million, or $1.37 per share, in the same period last year. For the year-to-date through September 30, 2025, net income reached $11.8 million, marking a substantial 23.3% increase over the first nine months of 2024.
This profitability surge was underpinned by a healthy expansion in net interest income, which climbed 17.6% year-over-year to $26.1 million for the year-to-date period. The bank’s strategic focus on relationship growth appears to be paying dividends, with average loans seeing an 8.2% increase and average deposits growing by 6.0% compared to the prior year.
Beyond the headline figures, Calvin B. Taylor Bankshares maintained a strong financial foundation. The bank’s leverage ratio (Tier 1 capital to average assets) stood at a solid 13.26% as of September 30, 2025, comfortably exceeding regulatory well-capitalized thresholds. Similarly, its liquidity ratio, a measure of readily available funds against total deposits, remained strong at 34.59%.
In a move signaling confidence in its financial standing and commitment to shareholder value, the company’s board has authorized a new stock repurchase program. This initiative allows for the buyback of up to 10% of the company’s outstanding common stock, approximately 271,438 shares, through December 31, 2026. This program is subject to the non-objection of the Federal Reserve.
**Key Financial and Operational Highlights (3Q25):**
* **Net Income:** $4.2 million, up 6.4% year-over-year.
* **Year-to-Date Net Income:** $11.8 million, up 23.3% year-over-year.
* **Net Interest Income (YTD):** $26.1 million, up 17.6% year-over-year.
* **Loan Growth (YoY):** Average loans increased by 8.2%.
* **Deposit Growth (YoY):** Average deposits increased by 6.0%.
* **Capital Strength:** Leverage ratio (Tier 1) at 13.26%.
* **Liquidity:** Liquidity ratio at 34.59%.
* **Shareholder Returns:** New stock repurchase program authorized for up to 10% of outstanding shares.
**Strategic Outlook and Performance Drivers:**
M. Dean Lewis, CEO and President, highlighted the significant milestone of surpassing $1 billion in total assets for the first time, attributing it to strategic growth and prudent management. The strong deposit growth, influenced by seasonal economic activity in the Delmarva Peninsula region, played a crucial role in achieving this asset milestone. Lewis emphasized that the new stock repurchase program underscores the company’s dedication to disciplined capital management and shareholder value while preserving the capital strength needed for sustained growth and regulatory compliance.
**Analysis of Performance Trends:**
The bank’s revenue streams show healthy growth. Net interest income, the core of a bank’s earnings, benefited from an 8.2% increase in average loan balances and an improvement in loan yields. The net interest margin for the first nine months of 2025 stood at 3.79%, up from 3.47% in the corresponding period of 2024, reflecting effective management of interest-earning assets and liabilities.
Noninterest income also experienced a substantial boost in the third quarter, largely driven by a $243,000 gain from the sale of an equity investment. Additionally, the acquisition of $5 million in bank-owned life insurance (BOLI) in the second quarter contributed to higher noninterest income compared to prior periods.
On the expense side, noninterest expense saw an increase of 14.1% year-to-date. This rise can be attributed to several factors, including investments in core system upgrades, competitive salary adjustments to retain talent, and the operational costs associated with a new branch opened in Cape Charles, Virginia. While provisions for credit losses increased year-over-year, the bank’s loan portfolio quality remained largely stable, with loans past due 30 days or more showing a significant decrease compared to the previous quarter.
**Financial Condition and Capital Management:**
Calvin B. Taylor Bankshares’ balance sheet reflects solid growth, with total assets reaching $1.01 billion as of September 30, 2025, an increase of 5.7% from the previous year. The bank continues to rely on stable, core deposits, with noninterest-bearing deposits representing a significant portion of its funding base. The utilization of the IntraFi Network further enhances deposit insurance coverage for larger depositors, providing a layer of stability.
The company’s capital ratios remain robust, and the Board’s decision to implement a new share repurchase program indicates a positive outlook on the company’s financial health and its ability to generate shareholder returns. This strategic move, coupled with consistent operational improvements, positions Calvin B. Taylor Bankshares for continued success in the evolving financial landscape.
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