Overview

GREENSBORO, N.C. -- (Business Wire)

In the first quarter of 2026, Triad Business Bank (the “Bank”) reported net income of $404,000 compared to $199,000 for the same period a year ago. Net income totaled $0.05 per share in the first quarter of 2026 compared to $0.02 per share in the first quarter of 2025.

Ramsey Hamadi, Chief Executive Officer, commented, “The Bank’s core earnings improved $437,000 over the prior year period due primarily to an increase in the Bank’s net interest margin. The Bank’s net interest margin increased 36 basis points over the prior year period due primarily to a lower cost of funds. Net interest income increased $540,000 to $3.4 million in the first quarter of 2026 compared to the same period a year ago. Looking forward, the Bank intends to maintain disciplined expense control practices while the Bank’s net interest margin is expected to further improve throughout 2026 and 2027.”

Income Statement Comparison

The Bank’s net income totaled $404,000 for the quarter ended March 31, 2026 compared to $199,000 for the quarter ended March 31, 2025. Core operating results, a non-GAAP measurement which excludes the provision for credit losses and taxes, reflected earnings of $471,000 for the first quarter of 2026 compared to $34,000 for the same quarter in the prior year.

Net interest income increased $540,000 to $3.4 million for the first quarter of 2026 from $2.9 million for the first quarter of 2025. The Bank’s net interest margin for the first quarter increased 36 basis points to 2.63% compared to 2.27% for the prior year quarter.

Interest income decreased $17,000 to $6.7 million in the first quarter of 2026 compared to the same quarter of 2025. The slight decrease in interest income year over year was due primarily to declines in market interest rates and declines in average investment securities. Average loans increased $25.8 million to $403.8 million at March 31, 2026. The weighted average yield on average loans decreased 15 basis points to 5.86% in the first quarter of 2026 compared to 6.01% in the first quarter of 2025. The weighted average rate on interest-bearing liabilities decreased 73 basis points to 3.44% in the first quarter of 2026 compared to 4.17% in the same quarter of 2025. Approximately half the decline in the cost of funds was due to repricing of brokered CDs during the past 12 months.

Noninterest income increased 10% to $267,000 in the first quarter of 2026 compared to $242,000 in the first quarter of 2025. The increase was primarily due to the expanded collection of overdraft/NSF fees beginning in December 2025.

Noninterest expense increased $127,000 in the first quarter of 2026 compared to the prior year quarter. Salaries and benefits expense increased $115,000, or 6%, in the first quarter of 2026 compared to the first quarter of 2025. This increase was primarily due to compensation adjustments effective July 1, 2025 and an increase in performance-related compensation. The Bank had 54 employees at the end of March 2026 compared to 55 employees at the end of March 2025. Premises and equipment expense increased $30,000 in the first quarter of 2026 compared to the prior year period due primarily to increased lease expense. Other noninterest expenses decreased $18,000 for the first quarter of 2026 over the same period in 2025. Increases in legal and other professional expense were offset by decreases in FDIC insurance assessment expense, repossessed property expense, and director compensation expense.

Balance Sheet Comparison

Total assets increased $15.7 million to $536.9 million at March 31, 2026 from $521.2 million at March 31, 2025. Loans increased $33.5 million while cash decreased $4.6 million and securities decreased $15.1 million over the same period. Deposits decreased $16.4 million year over year, net of an increase of $2.3 million in brokered CDs. Other borrowings increased $26.0 million to $45.0 million at March 31, 2026 from $19.0 million at March 31, 2025.

Shareholders’ equity increased $5.5 million year over year to $50.6 million at March 31, 2026. Accumulated other comprehensive income/loss (“AOCI”) improved by $3.7 million year over year to an unrealized loss of $8.5 million from an unrealized loss of $12.2 million at March 31, 2025. The AOCI loss is expected to reverse, assuming no future credit impairments, as the bond portfolio shortens in life and is assumed to mature at par value.

Regulatory Capital

Total risk-based capital consists of tier 1 capital and tier 2 capital. The Bank’s tier 1 capital is largely a measure of shareholders’ equity as calculated under GAAP but excludes the AOCI loss. Tier 2 capital is primarily the allowance for credit losses on funded and unfunded loan commitments. Tier 1 and tier 2 capital ratios are measured against total assets and risk-weighted assets.

The following is a summary presentation of the Bank’s total regulatory capital to risk-weighted assets, tier 1 capital to risk-weighted assets and tier 1 capital to average assets in comparison with the regulatory guidelines at March 31, 2026:

Capital and Capital Ratios

The Bank continues to be “well-capitalized” for regulatory purposes.

Loans

The Bank’s outstanding loans increased $33.5 million, or 9%, to $407.9 million at March 31, 2026 compared to $374.4 million at March 31, 2025. While not included in loans outstanding, the Bank also had unfunded loan commitments of $142.1 million, bringing total loans outstanding and unfunded commitments to $550.0 million at March 31, 2026. For internal monitoring purposes, the Bank considers owner-occupied real estate loans to be part of commercial and industrial (“C&I”) loans. As of March 31, 2026, approximately 50% of the Bank’s outstanding loan portfolio was composed of C&I loans:

Loan Diversification

Credit Risk and Allowance for Credit Losses

During the first quarter of 2026, there was a provision for credit losses of $46,000 compared to a reversal of $165,000 during the quarter ended March 31, 2025. For first quarter 2026, the components of this item were a provision for credit losses on loans of $75,000 and a reversal of provision for credit losses on unfunded loan commitments of $29,000 compared to first quarter 2025 components of a reversal of provision for credit losses on loans of $136,000 and a reversal of provision for credit losses on unfunded loan commitments of $29,000.

The allowance for credit losses on loans was $3.4 million at March 31, 2026 compared to $3.8 million at March 31, 2025, or 0.85% and 1.02% of outstanding loans, respectively. Loan charge-offs were $45,000 in the first quarter of 2026 compared to $114,000 in the first quarter of 2025. The allowance for credit losses on unfunded loan commitments, recorded as a liability on the balance sheet, was $347,000, or 0.24% of unfunded commitments, at March 31, 2026 compared to $429,000, or 0.30%, at March 31, 2025. The decline in the allowance for credit losses on loans and unfunded commitments was driven by adjustments made due to changes in qualitative assessment factors related to changes in the government regulatory environment and the interest rate environment.

The Bank had $6.6 million in nonaccrual loans relating to two credit relationships at March 31, 2026 compared to no nonaccrual loans at March 31 2025. These loans were individually evaluated for credit loss. The loans in one relationship were written down to fair value in the fourth quarter of 2025. The loan in the second relationship is well secured and does not require a specific allowance.

Adjusted Tangible Book Value (Non-GAAP Measures)

The Bank’s GAAP tangible book value per share was $6.29 at March 31, 2026. On a non-GAAP basis, excluding the AOCI loss and the impairment on the Bank’s deferred tax asset (two reductions in capital under GAAP the Bank anticipates it will recover over time), adjusted tangible book value per share was $7.70 at March 31, 2026.

The organization and startup costs incurred during the Bank’s organizational period and net operating losses from the beginning of operations created a deferred tax asset of $2.8 million. This asset is currently fully impaired and will be carried at $0 until sufficient, verifiable evidence exists (generally, sustained profitability) to demonstrate that the deferred tax asset will more likely than not be realized. At that time, the valuation allowance will be reversed.

The change in fair value, excluding any credit impairment, of the Bank’s investment securities that are available for sale is recorded in AOCI as a gain or loss, based on current circumstances, and constitutes an unrealized component of equity. At March 31, 2026, the Bank had an aggregate AOCI loss of $8.5 million. Assuming the underlying investment securities are held to maturity and there are no future credit impairments, the value of the securities will return to their face values at maturity.

Outlook

Although there could be some compression in the net interest margin in the near term if the Federal Reserve makes additional reductions in the federal funds target rate, we expect the Bank’s net interest margin to increase throughout 2026 and 2027 as lower yielding loans and investments mature and are replaced by those with higher yields, coupled with a further modest decline in the cost of funds.

About Triad Business Bank

With three co-equal offices located in Winston-Salem, High Point and Greensboro, Triad Business Bank focuses on meeting the needs of small to midsize businesses and their owners by providing loans, treasury management and private banking, all with a high level of personal attention and best-in-class technology. For more information, visit www.triadbusinessbank.com.

Non-GAAP Financial Measures

This release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States (“GAAP”). The management of Triad Business Bank uses these non-GAAP financial measures in its analysis of the Bank’s performance. These measures typically adjust GAAP performance measures to exclude the effects of the provision for credit losses, income tax, deferred tax asset, and AOCI. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Bank. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Forward Looking Language

This release contains certain forward-looking statements with respect to the financial condition, results of operations and business of Triad Business Bank. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management of Triad Business Bank and on the information available to management at the time that these disclosures were prepared. These statements can be identified by the use of words like “expect,” “anticipate,” “estimate” and “believe,” variations of these words and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Triad Business Bank undertakes no obligation to update any forward-looking statements.

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Contacts:

Ramsey Hamadi
rhamadi@triadbusinessbank.com

Source: Triad Business Bank