Mission Bancorp Surpasses $2.0 Billion in Total Assets, Second Quarter Earnings of $8.2 Million and Annual Loan and Deposit Growth of 12.9% and 7.6%.

BAKERSFIELD, Calif., July 20, 2026 /PRNewswire/ -- Mission Bancorp ("Mission" or the "Company") (OTC Pink: MSBC), a bank holding company and parent of Mission Bank (the "Bank"), reported unaudited net income available to common shareholders of $8.2 million, or $2.73 per diluted common share, for the second quarter of 2026, compared to net income available to common shareholders of $3.1 million, or $1.05 per diluted common share, for the second quarter of 2025, and net income available to common shareholders of $7.7 million, or $2.58 per diluted common share, for the linked quarter.

"We have seen another quarter of strong performance with results that have propelled us beyond the $2.0 billion asset mark," said Mission Bank President and CEO A.J. Antongiovanni. "We are reporting second quarter earnings of $8.2 million and annual loan and deposit growth of 12.9% and 7.6%, respectively.  We have also generated 9.4% year-over-year growth in non-interest-bearing deposits, further proving the strength and efficacy of our relationship-driven business model and commitment to high-touch personal service.  I would like to thank the dedicated team members who helped us reach this milestone.  We have bolstered the overall strength of our balance sheet and are well positioned for the second half of the year."

Second Quarter 2026 Financial Highlights

• Gross loans increased by $174.6 million, or 12.9%, to $1.53 billion as of June 30, 2026, compared to $1.36 billion as of June 30, 2025, and increased by $42.5 million, or 2.9%, compared to balances as of March 31, 2026.
  
  
  
  
• Total deposits increased by $123.0 million, or 7.6%, to $1.75 billion as of June 30, 2026, compared to $1.63 billion a year earlier, and increased by $83.2 million, or 5.0%, from $1.67 billion as of March 31, 2026. Non-interest-bearing deposits were $695.1 million and represent 39.7% of total deposits as of June 30, 2026.
  
  
  
  
• The allowance for credit losses ("ACL") as a percentage of gross loans rose from 1.35% as of March 31, 2026, to 1.37% as of June 30, 2026.
  
  
  
  
• Credit quality remains strong with nonaccrual loans representing 0.02% of total gross loans as of June 30, 2026, up from 0.01% as of March 31, 2026.
  
  
  
  
• The Community Bank Leverage Ratio for the Bank as of June 30, 2026, was 12.22%, compared to 11.43% as of June 30, 2025.

Net Income Available to Common Shareholders

Net income available to common shareholders for the second quarter of 2026 was $8.2 million, or $2.73 per diluted common share, compared with $7.7 million, or $2.58 per diluted common share, for the linked quarter ended March 31, 2026. Net income available to common shareholders was $3.1 million, or $1.05 per diluted common share, for the second quarter of 2025. Net income available to common shareholders increased $0.6 million, or 7.2%, compared to the linked quarter, and increased by $5.1 million, or 161.8%, compared to the same prior year period.

Notable variances compared to the linked quarter include an increase in net interest income and a decrease in non-interest expense, which were partially offset by an increase in the provision for income taxes. Compared to the second quarter of 2025, an increase in net interest income and decrease in non-interest expense, were partially offset by an increase in the provision for income taxes.

Net Interest Income

Net interest income was $20.4 million, or 4.35%, of average earning assets ("net interest margin"), for the second quarter of 2026, compared with $18.1 million, or a net interest margin of 4.07%, for the same prior year period, and $19.8 million, or a net interest margin of 4.39%, for the quarter ended March 31, 2026.

Net interest income increased by $2.3 million, or 12.9%, compared to the same prior year period, primarily due to growth in the Company's loan portfolio coupled with relatively stable loan yields, and lower funding costs. Loan interest income and fee accretion increased by $3.1 million compared to the second quarter of 2025, partially offset by $1.2 million lower interest income on interest earning deposits in other banks and $0.4 million lower interest income on investment securities. Additionally, interest expense declined $0.8 million compared to the same prior year period, primarily due to lower deposit costs.

Net interest income increased by $0.7 million, or 3.4%, for the quarter ended June 30, 2026, compared to the linked quarter, primarily reflecting continued loan growth, higher average balances in interest earning deposits, and one additional day in the period, partially offset by higher average interest-bearing deposit balances while funding costs remained relatively stable. Interest income on loans rose $1.0 million, primarily driven by higher average balances and rates, and interest income on interest earning deposits in other banks rose $0.1 million, primarily due to higher average balances. Interest expense rose $0.4 million compared to the linked quarter, primarily due to higher average balances on interest-bearing deposits.  

The net interest margin was 4.35% for the quarter ended June 30, 2026, compared to 4.07% for the same prior year period, and 4.39% for the linked quarter ended March 31, 2026. During the past year, the cost of interest-bearing liabilities declined 40 basis points, while a continued shift in earning-asset mix toward higher yielding loans offset lower yields on other earning assets, resulting in relatively stable earning asset yields and a 28 basis point year-over-year expansion in the quarterly net interest margin. The Federal Reserve has maintained a data-dependent approach to monetary policy following the 175 basis point reduction in the federal funds rate from its recent peak range. The lower rate environment has continued to support reduced funding costs, while sustained loan growth has helped maintain earning asset yields and net interest margin expansion.

The 4 basis point decrease in the net interest margin for the second quarter of 2026, compared to the linked quarter, primarily reflects a modest decrease in earning asset yields, combined with a modest increase in funding costs, primarily reflecting the repricing of subordinated debt following its transition to a floating-rate index. These impacts were partially offset by an improved non-interest-bearing demand deposit ratio.

The yield on loans increased 1 basis point to 6.40%, while the yield on interest earning deposits in other banks and investment securities decreased by 77 basis points to 3.69%, and 49 basis points to 3.49%, respectively, compared to the same prior year period. Additionally, our earning asset mix improved due to an increase in the average balances on loans of $195.0 million, or 14.9%, while the average balances on interest earning deposits in other banks decreased $84.3 million, or 39.5%, and average balances on investment securities decreased $10.8 million, or 4.37%. The cost of interest-bearing deposits decreased 41 basis points to 2.60%, while the average balances of interest-bearing deposits increased $35.4 million, or 3.48%. The cost of subordinated debentures increased 165 basis points to 6.32%, and average balances decreased $5.3 million, or 30.8%.

For the quarter ended June 30, 2026, the yield on loans and the yield on investment securities increased by 3 basis points to 6.40%, and 7 basis points to 3.49%, respectively, while the yield on interest bearing deposits in other banks decreased 1 basis point to 3.69%, compared to the linked quarter. Average balances on loans increased $39.4 million, or 2.68%, and average balances on interest earning deposits in other banks increased $25.5 million, or 24.6%, while average balances on investment securities decreased $5.5 million, or 2.29%. The cost of interest-bearing deposits increased 1 basis point to 2.60%, and average balances on interest-bearing deposits increased $37.3 million, or 3.67%. The cost of subordinated debentures increased 213 basis points to 6.32%, and average balances were relatively unchanged.

The cost of funds was 1.64% for the quarter ending June 30, 2026, a decrease of 26 basis points compared to 1.90%, for the same prior year period, and a 3 basis point increase compared to 1.61%, for the linked quarter ended March 31, 2026. The decrease in the Company's cost of funds over the last year is generally attributable to the lower short term rate environment, which has provided some relief in deposit cost pressures. The Bank has continued to grow its total deposit accounts through both new customer acquisition and the expansion of existing relationships over the past year. At the same time, some rate-sensitive clients have opted for higher yielding investment options.

The Company holds two pay-fixed, receive floating, interest rate swap contracts, with notional balances totaling $108 million, to hedge against rising rates on a portion of its fixed rate loan and investment securities portfolios. Combined, interest rate swap contracts incurred $0.1 million of interest expense for the second quarter of 2026, relatively unchanged compared to the linked quarter, and contributed $0.1 million of interest income for the second quarter of 2025.

Provision for Credit Losses

A $0.8 million provision for credit losses was recorded for the quarter ended June 30, 2026, compared to $0.7 million for the linked quarter, and $0.8 million for the same prior year period. The Company's quarterly credit loss provisions over the past year have been recorded primarily to account for loan growth and changes in macro-economic conditions, which impact the calculated ACL under the current expected credit loss ("CECL") model, rather than in response to changing conditions in the Company's loan portfolio, which has remained stable, demonstrating a low credit risk profile during the past twelve months.

Non-Interest Income

Non-interest income increased $0.1 million, or 4.4%, to $1.7 million for the quarter ended June 30, 2026, compared to $1.6 million for the linked quarter, and decreased $0.1 million, or 7.4%, compared to $1.8 million for the same prior year period. Compared to the linked quarter, increases in service charges, fees and other income and higher Farmer Mac referral and servicing fee income were partially offset by lower SBA servicing fees and gain on sale of loans. Compared to the same prior year period, the decline was primarily due to SBA servicing fees and gain on sale of loans.

Non-Interest Expense

Non-interest expense decreased by $0.1 million, or 1.3%, to $9.9 million for the quarter ended June 30, 2026, compared to $10.0 million for the linked quarter, and decreased by $4.8 million, or 32.6%, compared to $14.7 million for the quarter ended June 30, 2025.

The decrease in non-interest expense for the second quarter of 2026, compared to the linked quarter, was primarily due to a $0.3 million decline in salaries and benefits expense attributable to higher deferred salary loan origination costs and lower payroll taxes, compensation accruals, and benefits expenses, partially offset by higher base salary and other compensation expense. Additionally, a $0.1 million increase in professional services was driven by higher loan related legal and consulting services.  

The decrease in non-interest expense for the second quarter of 2026 compared to the same prior year period was primarily due to a $5.1 million decline in other expense attributable to one-time, non-recurring items. Excluding the one-time, non-recurring items recognized during the second quarter of 2025, non-interest expense increased $0.3 million compared to the same prior year period, primarily reflecting a $0.6 million increase in salaries and benefits expense associated with new hire activity, including the North San Luis Obispo County team, net of terminations, together with higher base compensation, payroll taxes, bank owned life insurance accruals, and incentive compensation accruals. These increases were partially offset by a $0.4 million decline in professional services resulting from lower legal fees.

Operating Efficiency

The Company's operating efficiency ratio decreased to 44.8% for the second quarter of 2026, compared to 73.8% for the second quarter of 2025, and 46.9% for the linked quarter. Total non-interest expense as a percentage of average assets, another measure of the Company's efficiency, was 2.02% for the second quarter of 2026, compared to 3.15% for the second quarter of 2025, and 2.13% compared to the quarter ended March 31, 2026.

Income Taxes

Income tax expense was $3.2 million for the second quarter of 2026, compared to $1.3 million for the quarter ended June 30, 2025, and $3.0 million for the linked quarter ended March 31, 2026. The Company's effective tax rate for the second quarter of 2026 was 28.3%, compared to 29.7% for the same prior year period, and 27.9% for the quarter ended March 31, 2026. 

Asset and Equity Returns

The return on average equity for the second quarter of 2026 was 14.1%, up from 6.28% for the same prior year period, and 13.8% for the linked quarter. The quarterly return on average assets for the second quarter of 2026 was 1.67%, up from 0.67% from the same prior year period, and 1.63% for the linked quarter.

The increase in the quarterly returns on both average equity and average assets for the quarter ended June 30, 2026, compared to the same prior year period, was primarily attributable to higher quarterly net income, reflecting the absence of one-time, non-recurring expenses recognized during the same prior year period. Compared to the same prior year period, average equity increased 16.7% and average assets increased 5.42%. The Company's capital accumulation rate over the past few years has outpaced its' earnings growth rate, resulting in declining equity returns.  

The increase in quarterly returns on both average equity and average assets for the quarter ended June 30, 2026, compared to the linked quarter, is primarily attributable to higher quarterly net income, which outpaced growth in average equity and average assets.

Balance Sheet

Total assets increased by $155.8 million, or 8.4%, to $2.01 billion as of June 30, 2026, compared to June 30, 2025, and increased by $90.3 million, or 4.7%, compared to March 31, 2026. Cash and cash equivalents were nearly unchanged at $201.6 million as of June 30, 2026, compared to the same prior year period, and increased by $52.2 million, or 34.9%, compared to March 31, 2026.

The increase in the Company's cash position over the past quarter primarily reflects strong deposit growth, which exceeded continued robust loan growth.

Investment securities decreased by $18.4 million, or 7.3%, to $231.8 million as of June 30, 2026, compared to $250.2 million as of June 30, 2025, and decreased by $6.9 million, or 2.9%, compared to $238.7 million as of March 31, 2026. The decline in the investment securities portfolio over the past year primarily reflects normal repayment and amortization of the bond portfolio, net of a decline in unrealized losses on the investment securities portfolio attributable to market rate changes. During the year, the Company continued to utilize cash flows generated from its investment portfolio to support robust loan growth while maintaining a strong liquidity position. The decrease in the investment portfolio during the second quarter of 2026, compared to the linked quarter, reflected normal repayment and amortization of the bond portfolio and a rise in unrealized losses on the investment securities portfolio attributable to market rate changes during the quarter.

Loans increased by $174.6 million, or 12.9%, to $1.53 billion as of June 30, 2026, compared to June 30, 2025, and increased by $42.5 million, or 2.9%, compared to March 31, 2026. Loan growth during the last year reflected broad-based growth across nearly every loan category, offset by contraction in agricultural production and residential 1 to 4 family loans. Loan growth during the last quarter was concentrated in commercial real estate, commercial and industrial, and construction and land development, with a notable contraction in residential 1 to 4 family loans.

Total deposits increased by $123.0 million, or 7.6%, to $1.75 billion as of June 30, 2026, from $1.63 billion as of June 30, 2025, and increased by $83.2 million, or 5.0%, compared to March 31, 2026. Non-interest-bearing deposits increased by $59.6 million, or 9.4%, during the last year, and increased by $48.1 million, or 7.4%, since March 31, 2026. The increase in deposits over the past year reflects an increase in average balances among existing customers, a declining account closure ratio, and stable new account openings. Non-interest-bearing deposits represented 39.7% of total deposits on June 30, 2026.

Total shareholders' equity was $237.2 million as of June 30, 2026, an increase of $37.8 million, or 19.0%, compared to June 30, 2025, and an increase of $8.3 million, or 3.6%, compared to March 31, 2026, primarily due to quarterly earnings, net of changes in accumulated other comprehensive loss. The accumulated other comprehensive loss component of equity decreased by $4.9 million during the year, primarily reflecting a $4.3 million decline in unrealized losses on the investment securities portfolio. The accumulated other comprehensive loss component of equity increased by $0.2 million during the quarter due to a rise in the unrealized losses on the investment securities portfolio, partially offset by a decline in the unrealized losses on the interest rate swap contracts.

Allowance for Credit Losses and Credit Quality

The ACL as a percentage of gross loans increased to 1.37% as of June 30, 2026, from 1.35% as of March 31, 2026, and decreased from 1.50% as of June 30, 2025. The ACL as a percentage of gross loans decreased during the last year, due to charge-offs on loans that previously carried specific reserves on individually analyzed loans, while the overall credit quality of the loan portfolio has remained stable.

Nonperforming assets were $0.3 million as of June 30, 2026, up from $0.1 million as of March 31, 2026, and down from $1.7 million as of June 30, 2025. Nonperforming assets as a percentage of total assets were 0.02% as of June 30, 2026, up from 0.01% as of March 31, 2026, and down from 0.09% as of June 30, 2025.

Regulatory Capital

The Bank's reported regulatory capital ratio exceeded the ratio generally required to be considered a "well capitalized" financial institution for regulatory purposes. The Community Bank Leverage Ratio for the Bank was 12.22%, as of June 30, 2026, compared with the requirement of 9.00% to generally be considered a "well capitalized" financial institution for regulatory purposes. The Bank's Community Bank Leverage ratio has increased by 79 and 3 basis points, from 11.43% and 12.19%, as of the periods ended June 30, 2025, and March 31, 2026, respectively. During the past year, earnings growth outpaced the combined impact of growth in average assets and dividends paid by the Bank to the Company, resulting in an increase in the Bank's Community Bank Leverage ratio compared to the prior year.

Stock Repurchase Program

On April 27, 2026, the Company announced the extension of its plan Rule 10b5-1 (the "2022 10b5-1 Plan") to facilitate the repurchase of its common stock. Pursuant to the 2022 10b5-1 Plan, a maximum of $4.95 million of the Company's common stock may be repurchased by the Company. The previous extension under the Plan was set to expire on April 23, 2026, and the Company extended the Plan for an additional six months through October 22, 2026. The Company may suspend or discontinue the Plan at any time. Hilltop Securities, Inc. is acting as the Company's agent to purchase its shares on pre-arranged terms pursuant to the 2022 10b5-1 Plan.

During the second quarter of 2026 the Company repurchased 3,000 shares under the 2022 10b5-1 Plan at an average price of $102.50. Since Plan inception the Company has repurchased 37,576 shares at an average price of $93.10.

About Mission Bancorp and Mission Bank

With $2.0 billion in assets, Mission Bancorp is headquartered in Bakersfield, California and is the holding company of three wholly owned subsidiaries, Mission Bank, Mission 1031 Exchange, LLC, and Mission Community Development, LLC. Mission Bank has eight Business Banking Centers, serving the greater areas of Bakersfield, Lancaster, San Luis Obispo, Ventura, Visalia, and Westlake Village, California. In addition, the Bank operates a production office in North San Luis Obispo, California. Visit Mission Bank online at www.missionbank.bank. By including the foregoing website address, Mission Bancorp does not intend to and shall not be deemed to incorporate by reference any material contained therein.

Forward Looking Statements

This press release includes "forward-looking statements," as such term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the current beliefs of the Company's directors and executive officers (collectively, "Management"), as well as assumptions made by and information currently available to the Company's Management. All statements regarding the Company's business strategy and plans and objectives of Management of the Company for future operations, are forward-looking statements. When used in this press release, the words "anticipate," "believe," "estimate," "expect" and "intend" and words or phrases of similar meaning, as they relate to the Company or the Company's Management, are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from the Company's expectations ("cautionary statements") are loan losses, rapid and unanticipated deposit withdrawals, unavailability of sources of liquidity, additional regulatory requirements that may be imposed on community banks or banks generally, changes in interest rates, loss of key personnel, lower lending limits and capital than competitors, regulatory restrictions and oversight of the Company, the secure and effective implementation of technology, risks related to the local and national economy, changes in real estate values, the Company's implementation of its business plans and management of growth, loan performance, interest rates, and regulatory matters, the effects of trade, monetary and fiscal policies, inflation, and changes in accounting policies and practices. Based upon changing conditions, if any one or more of these risks or uncertainties materialize, or if any underlying assumptions prove incorrect, actual results may vary materially from those described as anticipated, believed, estimated, expected, or intended. The Company does not intend to update these forward-looking statements.