BERLIN, MD / ACCESS Newswire / June 3, 2026 / 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 first quarter 2026 ("1Q26") of $3.8 million, or $1.44 per share compared to net income of $3.6 million, or $1.34 per share for the fourth quarter of 2025 ("4Q25"), and net income of $3.7 million, or $1.36 per share for the first quarter of 2025 ("1Q25").

First Quarter 2026 Highlights

• Capital Allocation and Stockholder Value - Continued to provide a tax-efficient return of capital to stockholders by repurchasing and retiring 25,982 shares of common stock in 1Q26. Quarterly cash dividends have also been utilized to provide a return of capital to stockholders and increased 5.6% in 1Q26 as compared to 1Q25.

Chief Executive Officer and President M. Dean Lewis commented, "The first quarter of 2026 reflected strong financial performance, consistent organic growth, and disciplined balance sheet management. Our lending and credit teams generated robust loan growth, complemented by continued expansion of our core deposit base by our retail deposit team. Strong financial performance was achieved alongside continued investment in both the customer and employee experience. In the first quarter of 2026, we launched a digital platform that allows customers to open consumer deposit accounts online. We also invested in technology to strengthen fraud detection and prevention, enhancing our ability to protect customers as threats continue to increase and evolve. Operational efficiency continues to be a priority, and we are utilizing technology to modernize processes and improve customer service."

Quarterly Results of Operations

Quarterly net income was $3.8 million for 1Q26, as compared to $3.6 million for 4Q25 and $3.7 million for 1Q25. A summary of the quarterly results of operations are included in the table and comments that follow.

Net interest income decreased $227 thousand, or 2.4% in 1Q26, as compared to 4Q25, due to decreases in interest income on deposits with other banks and investment securities of $411 thousand and $186 thousand, respectively, partially offset by an increase in interest and fees on loans of $256 thousand, and a lower interest expense on deposits of $115 thousand. The lower interest income on deposits with other banks and investment securities were the direct result of lower average balances in 1Q26, primarily due to loan growth funding and decreases in seasonal deposits. The average balance of loans in 1Q26 increased $30.4 million and total loan yields improved 1 bp, when compared to 4Q25. The decrease in deposit interest expense was primarily due to a lower average balance in total deposits of $21.9 million. Net interest income increased $1.0 million, or 12.7% in 1Q26, as compared to 1Q25, primarily due to an increase in average loan balances of $40.5 million coupled with a higher average yield of 21 bps. In addition, the average yield on investment securities improved by 53 bps.

Provision expense for credit losses decreased $200 thousand in 1Q26 when compared to 4Q25 and $399 thousand when compared to 1Q25, due to significant changes within the Company's CECL model during the quarter. The primary change was the result of a quantitative recalibration to the model which was implemented by the Company's third-party vendor. The Company enhanced its qualitative framework in 1Q26 by adding a qualitative factor related to non-owner occupied commercial and residential real estate, as well as loans secured by secondary residences. Overall, credit quality metrics remained steady with an improvement in loans past due 90 days or more to 0.04% of total loans in 1Q26 compared to 0.05% and 0.08% for 4Q25 and 1Q25.

Noninterest income decreased in 1Q26 by $339 thousand, or 37.8%, as compared to 4Q25, and $1.4 million, or 70.8%, as compared to 1Q25. The decrease in 1Q26 when compared to 4Q25, was due to the sale of investment securities at a loss which resulted in $20.5 million in proceeds which were reinvested in both loans and higher yielding securities. This type of sale is commonly known as a "swap loss trade" in which securities are sold at a loss and reinvested into higher yielding investments. The earn back period on this sale is forecasted to be less than one year. The decrease in noninterest income in 1Q26 when compared to 1Q25, was the result of a one-time sale of excess land adjacent to bank property in 2025 which resulted in a gain of $1.9 million, partially offset by a realized loss of $761 thousand on the sale of certain investment securities.

Noninterest expense decreased by $692 thousand, or 12.7% in 1Q26, as compared to 4Q25, and primarily reflected year-end tax planning for charitable contributions, acceleration of certain professional services, and adjustments to incentive compensation accruals. Noninterest expense in 1Q26 remained relatively unchanged as compared to 1Q25.

Quarterly per share data, dividend payout ratio, 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.

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 March 31, 2026.

The Company's financial condition at quarter end is summarized in the table and comments that follow.

The Company's deposits increased by $4.6 million, or less than 1% when compared to the 4Q25. The Company usually experiences seasonal deposit outflow during the first quarter due to the off-season of the local tourism based economy. The ability to grow deposits in the first quarter is a positive trend and reflects core deposit gathering initiatives to reduce dependency on seasonal deposits. The Company's deposits increased by $33.9 million, or 4.1% when compared to 1Q25. 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 1Q26, the Bank had deposit accounts with balances in excess of $250,000 totaling $197.8 million, which represents 23.0% of total deposits, as compared to $206.0 million or 24.1% as of 4Q25 and $198.2 million or 24.0% of total deposits as of 1Q25. 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. In recent years, the banking industry has experienced a surge in usage of the IntraFi Network by existing and new customers, due to the added insurance protection and the higher rates paid on these deposits. Reciprocal deposits from the IntraFi Network were $157.0 million as of 1Q26, as compared to $153.6 million and $130.1 million as of 4Q25 and 1Q25, respectively.

On-balance sheet liquidity, as measured by cash and unencumbered available for sale debt securities, remains strong as of 1Q26 and equaled 27.6% 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 March 31, 2026, the Bank can borrow up to $274.9 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

Funding of previously committed construction loans, localized demand for commercial and residential real estate loans, and seasonal borrowings during 1Q26 resulted in continued organic loan growth with loans increasing $29.1 million, or 4.4%, since December 31, 2025. Loan growth of $46.8 million, or 7.3%, in the previous 12 months was the result of strong demand for local real estate and construction of both residential and commercial properties. Loan growth and the repricing of existing loans at current market rates contributed to an increase in the yield on loans from 5.53% in 1Q25 to 5.74% in 1Q26. Loan yields increased modestly by 1 bp in 1Q26 as compared to 4Q25.

Loan performance has remained strong over the past 12 months as local economic conditions have remained stable. Inflation and higher interest rates have not resulted in a deterioration of credit quality as of 1Q26. Loans past due 90 days or more have decreased and were 0.04% of total loans as of 1Q26, as compared to 0.05% for 4Q25 and 0.08% for 1Q25. 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

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, Chief Financial Officer and Executive Vice President
410‑641‑1700, taylorbank.com

SOURCE: Calvin B. Taylor Bankshares, Inc.