Executive Summary

Q3 2025 delivered strong core results: diluted EPS of $0.65, net interest margin (NIM) of 3.79%, and PTPP of $6.8M; revenue (net interest income + noninterest) was $19.89M, up ~18% YoY .
Versus S&P Global consensus, EPS beat by $0.025 (+4.0%)* and revenue exceeded by $0.24M (+1.2%)*; strength driven by margin expansion and disciplined expense control .
Asset quality improved YoY (NPAs/Assets 1.51% vs 1.62% YoY), though NPAs rose sequentially on three loans (~$5.6M); management expects favorable resolutions .
Strategic catalyst: definitive all‑stock merger agreement with Farmers National Banc Corp. at a 2.6x exchange ratio, implying ~$299M value ($36.17 per MBCN share) at announcement; targeted close by Q1 2026, positioning the franchise with ~$7.4B pro forma assets .

What Went Well and What Went Wrong

What Went Well

Margin expansion and core earnings: NIM rose 33 bps YoY to 3.79%, underpinning net interest income growth to $17.6M; PTPP increased ~37% YoY to $6.8M .
Scaled balance sheet with high‑quality growth: total loans reached a record $1.61B (+6.8% YoY) and total assets hit $1.98B (+6.5% YoY), with strong C&I momentum (+$56.3M, +26.4% YoY) supporting core deposits .
Management confidence and operational execution: “third quarter performance was exceptionally strong… margin expansion and disciplined operating expense control,” and Westerville relocation “on track to open in the fourth quarter of 2025” .

What Went Wrong

Sequential asset quality headwind: NPAs/Assets increased QoQ to 1.51% from 1.30% on two CRE and one C&I relationships (~$5.6M); allowance coverage to NPLs dipped to 76.95% from 89.15% QoQ .
Noninterest expense elevated YoY: $13.1M vs $11.9M in Q3 2024, reflecting investment and certain items; though efficiency ratio improved to 63.73% from 67.93% YoY .
Noninterest income normalized from Q2’s one‑time gain: $2.3M in Q3 vs $3.1M in Q2; prior quarter included a $1.2M non‑cash real estate exchange gain .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$16.816	$18.042	$20.515	$19.889
Diluted EPS ($USD)	$0.29	$0.60	$0.76	$0.65
Net Interest Margin (%)	3.46%	3.69%	3.88%	3.79%
Net Interest Income ($USD Millions)	$15.073	$16.098	$17.437	$17.565
Noninterest Income ($USD Millions)	$1.743	$1.944	$3.078	$2.324
PTPP ($USD Millions)	$4.945	$5.849	$6.864	$6.791
Provision for Credit Losses ($USD Millions)	$2.234	$0.095	($0.506)	$0.392
Net Income ($USD Millions)	$2.340	$4.830	$6.157	$5.320
ROAA (Annualized, %)	0.50%	1.04%	1.29%	1.08%
Efficiency Ratio (%)	67.93%	65.22%	64.49%	63.73%

Segment/Loan Mix (balances at period end)

Category ($USD Millions)	Q3 2024	Q2 2025	Q3 2025
Total Loans	$1,504.531	$1,581.925	$1,607.024
Residential RE	$345.748	$357.217	$366.307
Commercial & Industrial	$213.172	$257.519	$269.422
CRE Owner Occupied	$187.313	$196.645	$221.600
CRE Non‑Owner Occupied	$407.159	$405.032	$390.354
Multifamily	$94.798	$79.497	$88.899
HELOC	$137.761	$156.297	$159.805
Construction & Other	$111.550	$123.531	$104.843
Consumer Installment	$7.030	$6.187	$5.794

KPIs and Balance Sheet

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Total Assets ($USD Billions)	$1.858	$1.888	$1.924	$1.979
Total Deposits ($USD Billions)	$1.513	$1.540	$1.594	$1.622
Noninterest‑bearing Deposits (% of total)	25.8%	24.0%	24.2%	25.3%
Brokered Deposits ($USD Millions)	$86.5	$92.4	$165.1	$108.6
Equity/Assets (%)	11.34%	11.32%	11.23%	11.33%
NPLs/Total Loans (%)	2.00%	1.91%	1.58%	1.86%
NPAs/Assets (%)	1.62%	1.56%	1.30%	1.51%
ACL/Total Loans (%)	1.50%	1.44%	1.41%	1.43%
Cost of Deposits (%)	2.33%	2.10%	2.21%	2.20%
Cost of Funds (%)	2.58%	2.30%	2.34%	2.33%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q4 2025	$0.21 (quarterly, increased in Q1 2025)	$0.21 declared, payable Dec 12, 2025	Maintained
Westerville branch relocation	Q4 2025	“Second half of 2025” expectation	“On track to open in the fourth quarter of 2025”	Refined timing
Strategic M&A close date	Q1 2026	N/A	Merger with FMNB expected to close by end of Q1 2026	New event

Management provided directional commentary (no formal quantitative guidance) emphasizing continued loan and core deposit growth, margin support from funding mix, and stable macro in Ohio markets .

Earnings Call Themes & Trends

Note: A Q3 2025 earnings call transcript was not located in our document corpus; thematic tracking below leverages Q1–Q3 press releases.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
Margin and funding mix	NIM expanded to 3.69% in Q1 and 3.88% in Q2; cost of funds declined; brokered deposits rose in Q2	NIM at 3.79%; cost of funds stable; brokered deposits down QoQ	Positive core margin; improving brokered reliance QoQ
Asset quality	NPAs/Assets improved QoQ in Q1 and Q2 (1.56% → 1.30%); reserve/loans ~1.4%	NPAs/Assets 1.51% with three loans increasing NPAs; management expects favorable resolution	Mixed: YoY improvement, QoQ uptick
Loan growth	Broad‑based growth across C&I, HELOC, residential; total loans up record levels	Loans $1.61B; C&I +26.4% YoY; owner‑occupied CRE up	Strong, diversified
Technology and talent investments	Q1 cited infrastructure upgrades; Q2 added experienced bankers	Continued investments; platform strengthening	Ongoing execution
Geographic expansion	Central Ohio emphasis; Westerville relocation planned H2 2025	Westerville opening “on track” in Q4	Advancing
Strategic M&A	None prior	Definitive agreement to merge with FMNB; creates ~$7.4B pro forma bank	Transformational

Management Commentary

CEO (Zimmerly): “Our third quarter performance was exceptionally strong, supported by core earnings growth that reflects margin expansion and disciplined operating expense control… As we look to the remainder of the year, we are confident 2025 will be another year of profitable growth and progress.”
CFO (Ranttila): “Commercial and industrial loans have increased $56.3 million, or 26.4% year-over-year… Increasing commercial and industrial relationships have helped support core deposit growth…”
CFO (Ranttila) on NPAs: “The modest increase in nonperforming assets from the prior quarter was primarily attributable to two commercial real estate loans, and one commercial and industrial loan… we expect a favorable resolution in the coming quarters.”
Merger context (CEO statement): “Joining Farmers represents an exciting next chapter… This merger enhances our ability to grow and support our stakeholders and deliver meaningful value for our shareholders.”

Q&A Highlights

A Q3 2025 earnings call transcript was not found; Q&A themes are unavailable in primary documents. Notably, a separate conference call was hosted for the merger announcement on Oct 22, 2025 (details and replay information provided) .

Estimates Context

Metric	Q3 2025 Consensus*	Q3 2025 Actual	Surprise*
EPS ($USD)	$0.625*	$0.65	+$0.025 (+4.0%)*
Revenue ($USD Millions)	$19.650*	$19.889	+$0.239 (+1.2%)*
# of EPS Estimates	4*	—	—
# of Revenue Estimates	2*	—	—

Values retrieved from S&P Global.* Results reflect a modest EPS beat and a revenue beat. Upside was driven by YoY margin expansion, higher net interest income, and controlled expenses, with minimal provisioning versus the prior year .

Key Takeaways for Investors

Core earnings quality: EPS beat and robust PTPP underscore sustainable margin improvement; efficiency ratio trended better YoY and QoQ .
Funding mix progress: QoQ decline in brokered deposits and steady cost of funds support NIM durability into year‑end .
Asset quality watchlist: Sequential NPAs uptick tied to three relationships; management expects favorable outcomes, but coverage metrics warrant monitoring .
Loan growth drivers: Strong C&I and owner‑occupied CRE growth align with treasury management expansion strategy; supports core deposit growth .
Strategic upside: FMNB merger sets a higher‑scale platform and potential operating leverage tailwinds; exchange ratio terms and expected close by Q1 2026 provide a clear roadmap .
Dividend continuity: $0.21 per share for Q4 2025 maintained, consistent capital return profile amid growth investments .
Near‑term trading lens: Results were overshadowed by M&A headline; focus likely shifts to integration milestones, asset quality resolution, and NIM stability into Q4 (Westerville opening as an operational catalyst) .

Citations:

Estimates disclaimer: Values retrieved from S&P Global.*

MIDDLEFIELD BANC CORP (MBCN)·Q3 2025 Earnings Summary