Commercial Bancgroup, Inc.

Date of Prospectus: September 22, 2025

Commercial Bancgroup, Inc. IPO: Deep Dive into Tennessee’s Banking Debut on Nasdaq (CBK)

Commercial Bancgroup, Inc. is set to make a significant entrance to the public markets, offering investors exposure to a well-established Tennessee-based bank holding company with a robust regional franchise. This analysis covers all critical aspects of the IPO, company fundamentals, financial health, risk profile, and market outlook, based solely on the official filing.

IPO Snapshot: Key Terms and Offer Structure

IPO Symbol: CBK
Exchange: Nasdaq Capital Market
Offer Price Range: \$25.75 – \$27.75 per share (midpoint \$26.75)
Total Shares Offered: 3,738,317 shares

• Shares offered by Commercial Bancgroup, Inc.: 934,579
• Shares offered by selling shareholders: 2,803,738

Over-allotment (Greenshoe): 560,747 shares (option granted to underwriter by selling shareholders)
Post-IPO Outstanding Shares: 13,174,223
Estimated Net Proceeds to Company: \$21.3 million (based on \$26.75/share, after discounts and expenses)
Proposed Listing Date: Not specified; shares expected to be delivered on or about , 2025
IPO Manager: Hovde Group, LLC (Sole Book-Running Manager)

Use of Proceeds: Strengthening the Balance Sheet and Growth

**All net proceeds** from the company’s portion of the IPO (approximately \$21.3 million) are earmarked for **full repayment of outstanding indebtedness** under a revolving credit facility, and the remainder for general corporate purposes. This signals a **deleveraging story** with flexibility for future expansion, strengthening the company’s capital base and regulatory ratios [[71]], [[73]].

Placement Breakdown and Employee Allocation

– **Public Offering**: 3,738,317 shares, with 934,579 from the company and the remainder from selling shareholders.
– **Directed Share Program**: Up to 5% reserved for directors, executive officers, employees of the company and bank, and other designated persons, at the IPO price. Any unsold reserved shares will be offered to the public [[3]].

Dividend Policy and Shareholder Returns

– **Recent Annual Dividend per Share:** \$0.17 in 2024; semi-annual dividends of \$0.16 per share for the six months ended June 30, 2025.
– **Dividend Commitment:** No assurance of future dividends; future payments subject to board discretion, regulatory restrictions, and capital needs. There is no stated target payout ratio [[29]], [[58]].

Investor Participation and Book Quality

– **Anchor/Institutional Investors:** Not specifically disclosed. – **Subscription Levels:** Not stated. – **Assessment:** Given the directed share program and substantial shares offered by major pre-IPO holders, the float is well-structured for institutional and retail interest. The presence of a reputable bank-focused bookrunner (Hovde Group, LLC) and a firm commitment underwritten deal suggests a robust book and potential for strong first-day activity, based strictly on facts disclosed [[3]], [[183]], [[184]].

Deal Parties, Underwriting, and Stabilization

Bookrunner & Underwriter: Hovde Group, LLC (sole book-running manager)
Stabilization/Over-allotment: 560,747-share greenshoe available to cover over-allotments; stabilization activities such as short sales, penalty bids, and passive market making are permitted [[183]], [[185]].
Lock-Ups: All directors, executive officers, and certain major holders (86.4% of pre-offer stock) have agreed to 180-day or 24-month lock-up periods as applicable. These strong lock-up provisions and the lead underwriter’s right of first refusal for 12 months post-IPO help support post-listing stability [[184]].

Company Overview: Regional Banking with Growth Ambitions

Commercial Bancgroup, Inc. is a Tennessee corporation and bank holding company for Commercial Bank, a Tennessee state-chartered commercial bank.
Business Model: Traditional banking and financial services, including loans, deposits, and related fee-based services.
Key Revenue Streams:

• Interest income from loans and securities
• Fee-based income (non-interest income)

Customer Segments: Individuals, small businesses, and commercial customers in Tennessee and surrounding regions.
Geographies: Primarily Tennessee, with operational focus in local and regional markets.
Industry/Sector: Banking and financial services; sector/industry size not specified.
Competitive Advantages: Well-capitalized, local market knowledge, long-standing customer relationships, and experienced management.
Brand Strength: Not quantified, but the company highlights its local heritage and customer focus.

Financial Health and Multi-Period Performance

Commercial Bancgroup, Inc. demonstrates consistent profitability, strong capital ratios, and a solid balance sheet. Below is a summary of key financial metrics:

Capitalization (as of June 30, 2025):

• Common equity Tier 1 capital ratio: 12.14% (pro forma 13.59%)
• Tier 1 leverage ratio: 10.07% (pro forma 11.00%)
• Total borrowings: \$148.5 million (pro forma \$121.7 million)
• Total shareholders’ equity: \$235.3 million (pro forma \$256.5 million)

Market Position, Competitive Advantages, and Management Team

Market Position: Commercial Bancgroup, Inc. is a leading community bank in its region with a strong focus on customer relationships, prudent risk management, and operational efficiency.
Management Team: Notable executives include:

• Terry L. Lee, CEO (employment agreement in effect at IPO close)
• Philip J. Metheny, Chief Financial Officer
• Richard C. Sprinkle, Jr., other key executive

All have extensive banking industry experience as outlined in the company’s disclosures [[288]].

Trends, Sector Timing, and Market Environment

Sector Trends: The company operates in a competitive, regulated, and consolidating banking sector. Key drivers include economic growth in Tennessee, stable loan demand, and rising deposit costs.
Timing: The offering is positioned to leverage post-pandemic recovery and robust regional economic activity. Exact listing and offer period dates are not specified.
Macro Environment: The document highlights sensitivity to interest rates, inflation, and economic cycles, but also points to a solid capital position to weather volatility.
Recent Developments: The company completed a reclassification and split of common stock classes prior to the IPO, and is using proceeds to repay debt and bolster flexibility for future growth [[7]], [[8]], [[73]], [[74]].

Risk Factors: Quantified and Qualitative Exposures

Key Risk Factors:

• Interest Rate Sensitivity: Changes in interest rates could negatively impact earnings and asset values.
• Credit Risk: Exposure to loan losses and asset quality deterioration.
• Regulatory & Compliance: Extensive oversight, including capital requirements and anti-money laundering obligations.
• Concentration: Significant shareholding by Robertson Holding Co. (42%) and Unified Shares (24%) pre-IPO; post-IPO, these entities still hold a controlling interest.
• Liquidity: Reliance on deposit funding; potential for increased funding costs.
• Dividends: Payment of dividends is discretionary and subject to regulatory and capital constraints.
• Public Market Risk: No prior trading market; possible volatility and illiquidity in CBK shares post-listing.
• Management Experience: Limited experience operating as a public company.
• Dilution: Immediate and substantial dilution of \$8.21 per share to new investors at the assumed offer price.

Growth Strategy: Expansion and Capital Allocation

Growth Initiatives:

• Strengthen capital position post-IPO for regulatory and organic growth
• Pursue selective expansion in lending and deposit market share
• Consider M&A opportunities as part of long-term growth
• Enhance technology and operational efficiency

No specific capex or acquisition pipeline figures are disclosed; the strategy is framed around prudent capital management and balance sheet strength [[73]], [[74]].

Ownership Structure, Lock-Ups, and ESOPs

Pre-IPO Major Shareholders:

• Robertson Holding Company, L.P.: ~42%
• Unified Shares, LLC: ~24%

Post-IPO (after sale of shares): Combined, these shareholders retain a controlling interest (exact percentages depend on greenshoe exercise).
Lock-Ups: 180 days for company, directors, and executive officers; 24 months for the two largest shareholders and related entities.
Employee Share Option Pool: 850,000 shares reserved under the 2025 Omnibus Incentive Plan [[26]], [[184]].

Valuation and Peer Comparison

No peer company symbols, financial metrics, or sector multiples are disclosed in the prospectus; as such, a comparative table is not provided here.

Research & Opinions

No analyst coverage, price targets, or institutional research opinions are included.

IPO Allotment Result

Final subscription levels by tranche and oversubscription metrics are not disclosed.

Listing Outlook: Investment Case and First-Day Performance

Based on the company’s strong profitability, conservative balance sheet, and robust regional presence, the IPO appears fundamentally sound for long-term investors seeking exposure to community banking in Tennessee. The presence of a reputable underwriter and substantial lock-up commitments from major holders provide post-listing support. Immediate dilution for new investors is significant (\$8.21 per share at the midpoint), but the company’s capital ratios will be enhanced and overcapitalization risk is mitigated by prudent use of proceeds.
Inferred First-Day Trading Range: The offer price range is \$25.75–\$27.75, and with stabilized book quality and structured float, the shares are likely to open near or modestly above the offer price, barring unexpected market volatility. The large portion of shares sold by existing holders may create some selling pressure, but the lock-up structure tempers this risk. Investors should expect moderate price volatility typical of regional bank IPOs.

Prospectus Access

The official prospectus and future filings can be obtained at: www.sec.gov