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MIDDLEFIELD BANC CORP (MBCN)·Q1 2025 Earnings Summary

Executive Summary

  • Solid quarter with EPS of $0.60, up 17.6% YoY, on 15 bps NIM expansion to 3.69% and stable ROAA at 1.04% .
  • Results beat consensus on both EPS ($0.60 vs $0.46*) and revenue ($18.04M vs $17.23M*), driven by stronger net interest income and lower cost of funds; management cited disciplined pricing, rate cuts impacting short-term borrowings, and funding optimization as tailwinds .
  • Credit quality optics remain the key watch item: NPAs/Assets improved sequentially to 1.56% from 1.62%, but remain elevated vs prior year due to a few identified relationships; ACL/Loans at 1.44% provides reserve support .
  • Liquidity/capital actions favorable: FHLB advances reduced by $62.4M from year-end and additional borrowing capacity remains robust ($346.9M) . Dividend raised 5% to $0.21 and maintained for Q2 2025 .
  • Potential stock reaction catalysts: sustained NIM resilience above peer, further deposit cost normalization, and visible progress resolving identified nonaccrual relationships .

What Went Well and What Went Wrong

What Went Well

  • NIM inflected higher: Net interest margin rose 15 bps YoY to 3.69% as management executed disciplined pricing and benefited from rate cuts on short-term borrowings .
  • Earnings and profitability improved: EPS increased 17.6% YoY to $0.60; PTPP rose to $5.85M (vs $4.80M LY); ROAA held at 1.04% .
  • Funding and liquidity progress: FHLB advances cut to $110.0M from $172.4M in Q4; management highlighted $346.9M of additional borrowing capacity and high levels of potentially liquid assets .

Management quote: “The 15-basis point expansion in our net interest margin is encouraging, reflecting our disciplined approach to pricing and ongoing efforts to reduce our cost of funds.” – CEO Ronald L. Zimmerly, Jr.

What Went Wrong

  • Asset quality remains elevated vs prior year: NPLs/Loans at 1.91% (vs 0.73% LY) with NPAs/Assets at 1.56% given a small number of specific relationships moved to nonaccrual in 2024 .
  • Noninterest-bearing deposit mix drifted lower: NIBD fell to 24.0% of deposits (vs 27.0% LY), a modest headwind to funding costs normalization pace .
  • Modest opex lift: Noninterest expense up to $12.19M vs $11.97M LY as the company invests in technology and infrastructure; efficiency ratio remains mid‑60s (65.22%) .

Financial Results

Results vs prior periods and select operating ratios

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$16.77 (NII $14.97 + Noninterest $1.80) $16.82 (NII $15.07 + Noninterest $1.74) $17.47 (NII $15.56 + Noninterest $1.91) $18.04 (NII $16.10 + Noninterest $1.94)
Diluted EPS ($)$0.51 $0.29 $0.60 $0.60
Net Interest Margin (%)3.54% 3.46% 3.56% 3.69%
ROAA (Annualized, %)0.92% 0.50% 1.04% 1.04%
Efficiency Ratio (%)68.68% 67.93% 65.05% 65.22%

Consensus vs Actual (Q1 2025)

MetricConsensusActual
EPS ($)0.46*0.60
Revenue ($)17,233,330*18,042,000 (NII+Noninterest)

Values marked with * retrieved from S&P Global.

Key KPIs and balance sheet metrics (period-end unless noted)

KPIQ1 2024Q3 2024Q4 2024Q1 2025
Total Loans ($000)1,490,126 1,504,531 1,519,614 1,550,349
Total Deposits ($000)1,446,909 1,512,769 1,445,693 1,539,725
FHLB Advances ($000)137,000 106,000 172,400 110,000
Brokered Deposits ($000)90,400 86,500 35,100 92,400
NIBD % of Deposits27.0% 25.8% 26.1% 24.0%
NPLs/Total Loans (%)0.73% 2.00% 1.97% 1.91%
NPAs/Total Assets (%)0.60% 1.62% 1.62% 1.56%
ACL/Total Loans (%)1.41% 1.50% 1.48% 1.44%
Cost of Deposits (%)2.08% 2.33% 2.24% 2.10%
Equity/Assets (%)11.32% 11.34% 11.36% 11.32%
Tangible BV/Share ($)20.18 20.87 20.88 21.29

Guidance Changes

No formal quantitative guidance was issued; management provided directional commentary.

MetricPeriodPrevious Guidance/CommentaryCurrent Guidance/CommentaryChange
Net Interest Margin2025“Cautiously optimistic we can maintain a stable net interest margin throughout 2025.” (Q4 2024) NIM expanded to 3.69%; “disciplined approach to pricing” and lower cost of funds noted Maintained positive trajectory
Funding/LiquidityNear termAdded FRB discount window in Q3 2024; $381.7M FHLB capacity at 12/31/24 Reduced FHLB advances by $62.4M QoQ; $346.9M additional borrowing capacity at 3/31/25 Liquidity intact; funding mix improved
Capital ReturnOngoingQ4 2024 dividend $0.20; 2024 total $0.80 Dividend raised to $0.21 in Q1; Q2 dividend maintained at $0.21 Raised
Strategic Investment2025—“Significant upgrades to infrastructure to support multi-year technology road map” Incremental investment

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was available in our dataset; themes sourced from press release and investor slides.

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Net Interest Margin & Cost of FundsQ3: NIM 3.46%; first sequential decline in cost of funds after 10 quarters; focus on funding cost control . Q4: NIM 3.56%; stable outlook for 2025 .NIM 3.69% (+15 bps YoY); “disciplined pricing” and lower short-term borrowing costs .Improving
Asset Quality (NPLs/NPAs)Q3: NPLs elevated due to specific relationships; NPAs/Assets 1.62% . Q4: NPAs/Assets 1.62% .NPAs/Assets improved to 1.56%; NPL/Loans 1.91%; identified relationships remain in nonaccrual .Stabilizing from elevated levels
Liquidity & Funding MixQ3: Discount window access added; FHLB down vs YE23 . Q4: Cash+investments $221.6M; FHLB capacity $381.7M .FHLB advances cut by $62.4M; FHLB capacity $346.9M; brokered deposits $92.4M .Balanced; funding optimization ongoing
Technology/Infrastructure Investment—“Significant upgrades” to support multi-year technology roadmap; further footprint/back-office investments planned .Investment increasing
Regional Growth Opportunity—Slides highlight Central Ohio mega‑projects (Intel/AWS/Honda) supporting long-term demand in served markets .Constructive long-term backdrop
Capital Return (Dividends/Buybacks)2024: $0.80 dividend; buybacks executed in Q1 2024 .Dividend up 5% to $0.21; Q2 dividend declared at $0.21; no Q1 2025 buybacks .Shareholder-friendly; steady dividend

Management Commentary

  • “The first quarter of 2025 was a strong period of growth, profitability and value creation for Middlefield… The 15-basis point expansion in our net interest margin is encouraging, reflecting our disciplined approach to pricing and ongoing efforts to reduce our cost of funds.” – Ronald L. Zimmerly, Jr., President & CEO .
  • “We remain focused on proactively managing our funding sources to support loan growth, while optimizing our cost of funds… we reduced our balance of Federal Home Loan Bank advances by $62.4 million… ended the first quarter with $346.9 million in additional borrowing capacity.” – Michael C. Ranttila, CFO .
  • “Asset quality remains stable, with nonperforming assets to total assets of 1.56%… we remain well reserved with an allowance for credit losses to total loans of 1.44%.” – Michael C. Ranttila, CFO .

Q&A Highlights

  • No Q1 2025 earnings call transcript was available; no Q&A details to report (we searched for “earnings-call-transcript” and found none for the period) [Search: no results].

Estimates Context

  • EPS beat: $0.60 vs $0.46 consensus* (4 estimates). Revenue beat: ~$18.04M vs $17.23M consensus* (3 estimates) .
  • Given NIM upside and deposit cost improvement, estimates may drift higher for NII/EPS if momentum persists; however, elevated NPLs remain a modeling overhang until specific relationships resolve .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Profitability is improving as NIM expanded to 3.69% and revenue grew sequentially; discipline on pricing and lower short-term borrowing costs are the key drivers .
  • Funding mix and liquidity are constructive: FHLB advances reduced Q/Q; capacity and liquid assets remain ample to support growth and capital returns .
  • Credit quality is the watch item: metrics improved sequentially but remain elevated vs prior year due to a few identified credits; reserves look adequate at 1.44% of loans .
  • Capital return continues: dividend lifted 5% to $0.21 and maintained for Q2, signaling confidence in earnings durability .
  • Tangible book value per share rose 5.5% YoY to $21.29; equity/assets steady at 11.32%, supporting valuation resilience .
  • Medium-term: regional economic tailwinds in Central/Western/Northeast Ohio (Intel/AWS/Honda) provide a supportive backdrop for loan growth and operating leverage .
  • Near-term trading setup: Sustained NIM strength and visible NPA progress would be positive catalysts; any uptick in nonaccruals or deposit remix away from NIBD would be risks to multiple/estimates .

Other Relevant Q1 2025-period Press Releases

  • Q2 2025 dividend declared at $0.21 per share (payable June 13, 2025) .
  • Director retirement; board size reduced to 11 (corporate governance update) .

Non‑GAAP note: Management references PTPP, TBV/share, and ROATCE; reconciliations are provided in the release and slides .