Mission Bancorp Reports All-Time Record Quarterly Earnings of $9.2 Million for the Third Quarter of 2026, an Increase of 6% Year over Year. Annualized Total Deposit Growth of 14%. Announces Extension of Stock Repurchase Plan.

BAKERSFIELD, Calif., Oct. 26, 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 $9.2 million, or $3.05 per diluted common share, for the third quarter of 2026, compared to net income available to common shareholders of $8.6 million, or $2.90 per diluted common share, for the third quarter of 2025, and net income available to common shareholders of $8.2 million, or $2.74 per diluted common share, for the linked quarter.

"We are proud to report record earnings of $9.2 million for the third quarter as well as annualized total deposit growth of 14% and over $107 million in loan growth year over year," said Mission Bank President and CEO AJ Antongiovanni. "These results can be attributed to the strength of our team and the deep, personal relationships we have built with our customers. Over the last couple quarters, we have increased our presence in existing markets and opened a new office in the Fresno market, which is driving growth. Our success is directly tied to the depositors and borrowers who come to Mission seeking a relationship where bankers are knowledgeable and local. Looking forward, the impacts of rising inflation and interest rates could contribute to an economic slowdown. However, we proceed with confidence in the strength of our team and balance sheet. We are well positioned to navigate the financial headwinds that could impact the broader market."

Third Quarter 2026 Financial Highlights

• Gross loans increased by $107.3 million, or 7.6%, to $1.52 billion as of September 30, 2026, compared to $1.42 billion as of September 30, 2025, and decreased by $6.3 million, or 0.4%, compared to balances as of June 30, 2026.

• Total deposits increased by $84.9 million, or 4.9%, to $1.81 billion as of September 30, 2026, compared to $1.73 billion a year earlier, and increased by $62.7 million, or 3.6%, from $1.75 billion as of June 30, 2026. Non-interest-bearing deposits were $701.7 million and represent 38.7% of total deposits as of September 30, 2026.

• The allowance for credit losses ("ACL") as a percentage of gross loans rose from 1.37% as of June 30, 2026, to 1.38% as of September 30, 2026.

• Credit quality remains strong with nonaccrual loans representing 0.06% of total gross loans as of September 30, 2026, up from 0.02% as of June 30, 2026.

• The Community Bank Leverage Ratio for the Bank as of September 30, 2026, was 12.22%, compared to 11.29% as of September 30, 2025.

Net Income Available to Common Shareholders

Net income available to common shareholders for the third quarter of 2026 was $9.2 million, or $3.05 per diluted common share, compared with $8.2 million, or $2.74 per diluted common share, for the linked quarter ended June 30, 2026. Net income available to common shareholders was $8.6 million, or $2.90 per diluted common share, for the third quarter of 2025. Net income available to common shareholders increased $1.0 million, or 11.6%, compared to the linked quarter, and increased by $0.5 million, or 6.1%, compared to the same prior year period.

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

Net Interest Income

Net interest income was $21.6 million, or 4.38%, of average earning assets ("net interest margin"), for the third quarter of 2026, compared with $20.0 million, or a net interest margin of 4.27%, for the same prior year period, and $20.4 million, or a net interest margin of 4.35%, for the quarter ended June 30, 2026.

Net interest income increased by $1.6 million, or 8.2%, compared to the same prior year period, primarily due to growth in the Company's loan portfolio and lower funding costs, which more than offset declining earning asset yields following Federal Reserve rate reductions during the latter part of 2025. Loan interest income and fee accretion for the current quarter increased by $2.2 million compared to the third quarter of 2025, partially offset by a decline of $0.6 million in interest income on interest earning deposits in other banks and a $0.5 million decline in interest income on investment securities. Additionally, interest expense declined $0.5 million compared to the same prior year period, primarily due to lower deposit costs and the retirement of subordinated debt during the third quarter of 2026.

Net interest income increased by $1.2 million, or 5.8%, for the quarter ended September 30, 2026, compared to the linked quarter, primarily due to higher average loan balances and yields and increased average balances on interest earning deposits in other banks, partially offset by higher interest expense. Interest income on loans rose $1.0 million, primarily driven by higher average balances and yields, while interest income on interest earning deposits in other banks rose $0.5 million, primarily due to higher average balances. Interest expense increased $0.3 million compared to the linked quarter, primarily due to higher average balances on interest-bearing deposits, partially offset by savings from the retirement of subordinated debt during the quarter. 

The net interest margin was 4.38% for the quarter ended September 30, 2026, compared to 4.27% for the same prior year period, and 4.35% for the linked quarter ended June 30, 2026. During the past year, the cost of interest-bearing liabilities declined 24 basis points, while the yield on earning assets declined 10 basis points resulting in an 11 basis point year-over-year expansion in the quarterly net interest margin. Following rate reductions during the latter part of 2025, the Federal Reserve increased the federal funds rate by 25 basis points in September 2026 amid persistent inflationary pressures. The effects of prior Federal Reserve rate reductions have continued to support lower funding costs, while sustained loan growth and a favorable earning-asset mix have helped mitigate the impact of declining earning asset yields on net interest margin.

The 3 basis point increase in the net interest margin for the third quarter of 2026, compared to the linked quarter, primarily reflects a modest increase in earning asset yields, driven by higher loan yields, partially offset by a shift in earning asset mix toward lower-yielding interest-earning deposits in other banks. Funding costs remained relatively stable, as higher interest expense associated with higher average-interest bearing deposit balances were partially offset by savings from the retirement of subordinated debt during the quarter.

The yield on loans decreased 9 basis points to 6.48%, while the yield on interest earning deposits in other banks and investment securities decreased by 68 basis points to 3.73%, and 47 basis points to 3.41%, 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 $153.6 million, or 11.1%, while the average balances on interest earning deposits in other banks decreased $31.5 million, or 14.6%, and average balances on investment securities decreased $20.2 million, or 8.2%. The cost of interest-bearing deposits decreased 24 basis points to 2.66%, while the average balances of interest-bearing deposits increased $28.5 million, or 2.7%. Average subordinated debt balances declined following the retirement of subordinated debt during the third quarter of 2026.

For the quarter ended September 30, 2026, the yield on loans increased 8 basis points to 6.48%, while the yield on interest-earning deposits in other banks increased 4 basis points to 3.73%, and the yield on investment securities decreased 8 basis points to 3.41%, compared to the linked quarter. Average balances on loans increased $26.9 million, or 1.8%, and average balances on interest-earning deposits in other banks increased $54.7 million, or 42.4%, while average investment securities' balances decreased $8.0 million, or 3.4%. The cost of interest-bearing deposits increased 6 basis points to 2.66%, and average interest-bearing deposits increased $37.4 million, or 3.6%. Average subordinated debt balances decreased $10.2 million following the retirement of subordinated debt during the quarter.

The cost of funds was 1.63% for the quarter ending September 30, 2026, a decrease of 19 basis points compared to 1.82%, for the same prior year period, and a 1 basis point decrease compared to 1.64%, for the linked quarter ended June 30, 2026. The decrease in the Company's cost of funds over the last year is primarily attributable to lower deposit costs following Federal Reserve rate reductions during the latter part of 2025, along with reduced subordinated debt expense. 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.

During the third quarter of 2026, one of the Company's pay-fixed, receive-floating, interest rate swaps used to hedge interest rate risk for the loan portfolio matured, while its existing swap associated with the investment securities portfolio remains outstanding. Additionally, the Company entered into a new forward-starting pay-fixed, receive-floating, interest rate swap agreement associated with the investment securities portfolio. As of September 30, 2026, the Company maintained interest rate swap agreements with notional balances totaling $93 million, to hedge against rising rates on a portion of its fixed rate investment securities portfolio. Combined, interest rate swap contracts incurred $17 thousand of interest expense for the third quarter of 2026, compared to $87 thousand in interest expense for the linked quarter and $110 thousand in interest income for the third quarter of 2025.

Provision for Credit Losses

A $0.5 million provision for credit losses was recorded for the quarter ended September 30, 2026, compared to $0.8 million for the linked quarter, and $0.5 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 $0.2 million, or 10.7%, to $1.8 million for the quarter ended September 30, 2026, compared to $1.7 million for the linked quarter, and remained relatively stable compared to $1.9 million for the same prior year period. Compared to the linked quarter, modest increases in SBA servicing fees and gain on sale of loans, service charges, fees and other income, and higher Farmer Mac referral and servicing fee income contributed to the increase. Compared to the same prior year period, higher Farmer Mac referral and servicing fee income was offset by lower SBA servicing fees and gain on sale of loans and service charges, fees and other income.

Non-Interest Expense

Non-interest expense increased by $0.2 million, or 1.8%, to $10.1 million for the quarter ended September 30, 2026, compared to $9.9 million for the linked quarter, and increased by $1.0 million, or 10.7%, compared to $9.1 million for the quarter ended September 30, 2025.

The increase in non-interest expense for the third quarter of 2026, compared to the linked quarter, was primarily due to a $0.1 million increase in professional services expense attributable to higher consulting and other professional services costs.

The increase in non-interest expense for the third quarter of 2026 compared to the same prior year period was primarily due to a $0.5 million increase in salaries and benefits expense associated with new hire activity, including the North San Luis Obispo County team as well as increases in bank-owned life insurance accruals, and other payroll related accruals. These increases were partially offset by higher deferred salary loan origination costs. Additionally, professional services expense increased $0.3 million attributable to higher consulting and other professional services costs.

Operating Efficiency

The Company's operating efficiency ratio increased to 43.0% for the third quarter of 2026, compared to 41.7% for the third quarter of 2025, and decreased from 44.8% for the linked quarter. Total non-interest expense as a percentage of average assets, another measure of the Company's efficiency, was 1.96% for the third quarter of 2026, compared to 1.86% for the third quarter of 2025, and 2.02% compared to the quarter ended June 30, 2026.

Income Taxes

Income tax expense was $3.7 million for the third quarter of 2026, compared to $3.6 million for the quarter ended September 30, 2025, and $3.2 million for the linked quarter ended June 30, 2026. The Company's effective tax rate for the third quarter of 2026 was 28.9%, compared to 29.6% for the same prior year period, and 28.3% for the quarter ended June 30, 2026. 

Asset and Equity Returns

The return on average equity for the third quarter of 2026 was 15.0%, down from 16.7% for the same prior year period, and 14.1% for the linked quarter. The quarterly return on average assets for the third quarter of 2026 was 1.78%, up from 1.77% from the same prior year period, and 1.67% for the linked quarter.

The decline in quarterly return on average equity for the quarter ended September 30, 2026, compared to the same prior year period, was primarily attributable to growth in average equity outpacing earnings growth, while the increase in return on average assets was attributable to higher quarterly net income outpacing growth in average assets. Compared to the same prior year period, average equity increased 17.9%, while average assets increased 5.4%.

The increase in quarterly returns on both average equity and average assets for the quarter ended September 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 $105.9 million, or 5.4%, to $2.07 billion as of September 30, 2026, compared to September 30, 2025, and increased by $58.2 million, or 2.9%, compared to June 30, 2026. Cash and cash equivalents increased by $21.5 million, or 8.5%, compared to the same prior year period, and increased by $73.8 million, or 36.7%, compared to June 30, 2026.

The increase in the Company's cash position over the past quarter primarily reflects continued strong deposit growth, coupled with a modest decline in outstanding loan balances.

Investment securities decreased by $27.8 million, or 11.2%, to $220.3 million as of September 30, 2026, compared to $248.1 million as of September 30, 2025, and decreased by $11.6 million, or 5.0%, compared to $231.8 million as of June 30, 2026. The decline in the investment securities portfolio over the past year primarily reflects repayment and amortization of the bond portfolio and an increase in the 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 third quarter of 2026, compared to the linked quarter, reflected normal repayment and amortization of the bond portfolio, along with an increase in unrealized losses on the investment securities portfolio attributable to market rate changes during the quarter.

Loans increased by $107.3 million, or 7.6%, to $1.52 billion as of September 30, 2026, compared to September 30, 2025, and decreased by $6.3 million, or 0.4%, compared to June 30, 2026. Loan growth during the last year reflected broad-based growth across nearly every loan category, offset by contraction in commercial and industrial and residential 1 to 4 family loans. The modest loan decline during the last quarter was concentrated in commercial and industrial and construction and land development, partially offset by notable growth in agricultural production and commercial real estate loans.

Total deposits increased by $84.9 million, or 4.9%, to $1.81 billion as of September 30, 2026, from $1.73 billion as of September 30, 2025, and increased by $62.7 million, or 3.6%, compared to June 30, 2026. Non-interest-bearing deposits increased by $30.4 million, or 4.5%, during the last year, and increased by $6.6 million, or 1.0%, since June 30, 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 38.7% of total deposits on September 30, 2026.

Total shareholders' equity was $243.3 million as of September 30, 2026, an increase of $31.6 million, or 14.9%, compared to September 30, 2025, and an increase of $6.2 million, or 2.6%, compared to June 30, 2026, primarily due to accumulated earnings, net of changes in accumulated other comprehensive loss. The accumulated other comprehensive loss component of equity increased by $2.1 million during the past year, primarily reflecting a $3.4 million increase in unrealized losses on the investment securities portfolio, partially offset by a $1.3 million increase in the unrealized gain on the interest rate swap contracts. The accumulated other comprehensive loss component of equity increased by $3.4 million during the quarter due to a $4.1 million increase in the unrealized losses on the investment securities portfolio, partially offset by a $0.7 million increase in the unrealized gain on the interest rate swap contracts.

Allowance for Credit Losses and Credit Quality

The ACL as a percentage of gross loans increased to 1.38% as of September 30, 2026, from 1.37% as of June 30, 2026, and decreased from 1.47% as of September 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 $0.9 million as of September 30, 2026, up from $0.3 million as of June 30, 2026, and up from $0.7 million as of September 30, 2025. Nonperforming assets as a percentage of total assets were 0.05% as of September 30, 2026, up from 0.02% as of June 30, 2026, and up from 0.04% as of September 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 September 30, 2026, compared with the requirement of greater than 8.00% to generally be considered a "well capitalized" financial institution for regulatory purposes. The Bank's Community Bank Leverage ratio has increased by 93 basis points from 11.29% as September 30, 2025, and remained unchanged from June 30, 2026. 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 October 26, 2026, the Company announced the extension of its Rule 10b5-1 Plan (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 October 22, 2026, and the Company extended the Plan for an additional six months through April 22, 2027. 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.

There were no shares repurchased under the 2022 10b5-1 Plan during the third quarter of 2026. Since Plan inception the Company has repurchased 37,576 shares at an average price of $93.10.

About Mission Bancorp and Mission Bank

With $2.1 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 two production offices in North San Luis Obispo, and Fresno, 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.