Executive Summary

Q1 2023 EPS was $0.13, down from $0.14 in Q4 2022 and $0.17 in Q1 2022 as higher funding costs and elevated operating expenses offset strong asset yields; net income was $0.34M vs $0.38M in Q4 2022 and $0.47M in Q1 2022 .
Net interest margin (tax-equivalent) compressed sequentially to 2.93% from 3.12% in Q4 2022, reflecting a 315% YoY increase in interest expense as deposit and borrowing costs rose; efficiency ratio remained elevated at 83.3% vs 83.5% in Q4 2022 .
Liquidity and funding were proactively managed via the Bank Term Funding Program; MSVB ended Q1 with $25.0M BTFP borrowings at 4.37% replacing FHLB advances; capital stayed robust (CBLR 15.3%) .
Asset quality improved: NPLs fell to 0.4% of loans and ACL coverage rose to 379.7% of NPLs post-CECL adoption; provision was $52k with annualized net charge-offs at 0.0% .
No formal guidance or earnings call transcript was available; we did not find S&P Global consensus estimates for Q1 2023 (unavailable at query time), limiting beat/miss comparisons .

What Went Well and What Went Wrong

What Went Well
- Credit quality strengthened: NPLs declined to $0.612M (0.4% of loans) from $0.732M (0.5%) at YE22; ACL rose to 1.6% of loans and 379.7% of NPLs post-CECL, with minimal net charge-offs (0.0% annualized) .
- Balance sheet resilience and capital: CBLR remained a strong 15.3%; book value per share increased to $12.11 (ex-AOCI $15.23) from $11.55 at YE22, aided by AOCI improvement and earnings .
- Proactive liquidity actions: Deployed BTFP ($25.0M at 4.37%) to refinance FHLB borrowing and stabilize funding during March volatility .
What Went Wrong
- Earnings pressure: EPS fell to $0.13 vs $0.14 in Q4 and $0.17 in Q1 2022; net income decreased to $0.34M YoY/QoQ as rising interest expense and higher operating costs offset revenue growth .
- Margin compression and operating leverage: NIM (tax-equivalent) fell to 2.93% from 3.12% in Q4; efficiency ratio stayed elevated at 83.3% (vs 75.2% in Q1 2022), reflecting higher data processing and compensation costs and lower noninterest income .
- Noninterest income declined 14.4% YoY (lower brokered loan fees and a $27k AFS securities loss), limiting topline diversification amid higher funding costs .

Financial Results

Headline quarterly trend (oldest → newest)

Metric	Q3 2022	Q4 2022	Q1 2023
Net Income ($USD Millions)	$0.512	$0.376	$0.340
Diluted EPS ($)	$0.19	$0.14	$0.13
Total Interest Income ($USD Millions)	$2.294	$2.487	$2.483
Net Interest Income ($USD Millions)	$2.000	$1.986	$1.860
Total Non-interest Income ($USD Millions)	$0.295	$0.304	$0.244
Total Non-interest Expense ($USD Millions)	$1.667	$1.912	$1.749
Net Interest Margin (tax-equivalent) (%)	3.16%	3.12%	2.93%
Efficiency Ratio (%)	72.6%	83.5%	83.3%
ROA (annualized) (%)	0.77%	0.57%	0.51%
ROE (annualized) (%)	5.87%	4.82%	4.03%

Income statement detail – Q1 2023 vs prior periods

Metric	Q1 2022	Q4 2022	Q1 2023
Total Interest Income ($USD Millions)	$1.883	$2.487	$2.483
Total Interest Expense ($USD Millions)	$0.150	$0.501	$0.623
Net Interest Income ($USD Millions)	$1.733	$1.986	$1.860
Provision for Credit Losses ($USD Millions)	$0.000	$0.000	$0.052
Non-interest Income ($USD Millions)	$0.285	$0.304	$0.244
Non-interest Expense ($USD Millions)	$1.517	$1.912	$1.749
Pre-tax Income ($USD Millions)	$0.501	$0.378	$0.303
Income Tax (Benefit)/Expense ($USD Millions)	$0.034	$0.002	$(0.037)
Net Income ($USD Millions)	$0.467	$0.376	$0.340
Diluted EPS ($)	$0.17	$0.14	$0.13

Balance sheet snapshot (period-end)

Metric	9/30/2022	12/31/2022	3/31/2023
Loans, net ($USD Millions)	$142.473	$144.379	$147.198
Deposits ($USD Millions)	$201.815	$206.064	$205.637
Borrowings ($USD Millions)	$31.000	$29.000	$25.000
Total Assets ($USD Millions)	$264.548	$269.218	$266.368
Stockholders’ Equity ($USD Millions)	$30.810	$33.322	$34.943
CBLR (%)	15.4%	15.4%	15.3%

Asset quality and reserve

Metric	Q3 2022	Q4 2022	Q1 2023
Non-performing Loans ($USD Millions)	$0.857	$0.732	$0.612
NPLs / Total Loans (%)	0.6%	0.5%	0.4%
ACL / Total Loans (%)	1.1%	1.2%	1.6%
ACL / NPLs (%)	192.9%	231.1%	379.7%
Net Charge-offs to Avg Loans (annualized, %)	0.0%	0.0%	0.0%
Provision for Credit Losses ($USD Millions)	$0.085	$0.000	$0.052

Capital and shareholder returns

Metric	Q3 2022	Q4 2022	Q1 2023
Book Value/Share ($)	$10.74	$11.55	$12.11
Book Value/Share ex-AOCI ($)	$15.25	$15.30	$15.23
Cash Dividend/Share ($)	$0.04	$0.06	$0.06

Note: MSVB did not report a “revenue” line item typical of non-banks; we show banking-relevant topline components (interest income, net interest income) and profitability metrics from company filings .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal financial guidance (revenue/EPS/margins/OpEx)	2023/Q1 update	None provided	None provided	Maintained (no guidance)
Dividend per share	Q1 2023	$0.06 in Q4 2022 actual; $0.04 in Q1 2022 actual	$0.06 paid in Q1 2023	Maintained vs Q4; increased YoY

No explicit quantitative guidance ranges were provided in the Q1 release; no 8-K guidance update was filed beyond the earnings release .

Earnings Call Themes & Trends

No earnings call transcript was available; themes are drawn from sequential earnings releases.

Topic	Previous Mentions (Q3 2022 and Q4 2022)	Current Period (Q1 2023)	Trend
Funding and Liquidity	Increased reliance on FHLB borrowings amid deposit mix shift (borrowings $31.0M at 9/30/22; $29.0M at 12/31/22) .	Proactively used BTFP; $25.0M advance at 4.37% for one year, replacing FHLB advance; deposits stable QoQ ($205.6M) .	Liquidity fortified; higher-cost funding mix persists.
Net Interest Margin	NIM (tax-eq) 3.16% in Q3; 3.12% in Q4 as funding costs rose .	NIM (tax-eq) declined to 2.93% as interest-bearing liability cost increased to 1.21% .	Modest compression.
Loan Growth/Mix	Loans +$19.9M YTD by Q3; +$21.8M YoY by YE22; growth in CRE and commercial .	Loans net +$2.8M QoQ; growth in CRE and 1–4 family; construction and C&I down .	Selective growth; construction and C&I softer.
Noninterest Income	Stable to slightly lower; pressure from lower brokered loan fees .	Down 14.4% YoY; lower brokered loan fees and $27k AFS loss .	Under pressure.
Operating Expenses	Gradual increase in data processing, occupancy, and other items .	Up 15.3% YoY, led by data processing (+$93k) and comp/benefits (+$58k) .	Elevated run-rate.
Credit/Reserves	NPLs 0.6%→0.5%; allowance 1.1%→1.2% through YE22 .	CECL adopted; ACL to 1.6%; NPLs 0.4%; coverage 379.7% .	Strengthened reserves; stable credit.
Capital/AOCI	AOCI pressure reduced book value; still strong CBLR 15.4% .	AOCI improved QoQ; BVPS up to $12.11; CBLR 15.3% .	Stabilizing.

Management Commentary

Strategic posture and market expansion (Q4 2022): “We are very pleased to report our earnings for 2022… Our expansion into the Louisville Market through our Loan Production Office continues to produce positive results as evidenced by loans growing 17.8% over 2021 levels. We believe that we continue to meet the objectives in our strategic plan and look forward to continuing our efforts to build shareholder value…” — Alexander G. Babey, President & CEO .
Q1 2023 release emphasized operating drivers rather than direct quotes: higher asset yields, materially higher funding costs, lower noninterest income (brokered loan fees), and higher operating expenses (data processing, compensation) as key P&L determinants .
Liquidity actions: Management detailed BTFP usage (pledging $28.6M par of agency MBS; $26.0M initial draw at 4.69% on March 17; refinanced to $25.0M at 4.37% on March 20) to replace FHLB advance .

Q&A Highlights

No earnings call transcript was available for Q1 2023; we found no analyst Q&A to report [earnings-call-transcript: none in catalog for period].

Estimates Context

Wall Street consensus estimates (S&P Global) for MSVB’s Q1 2023 and the prior two quarters were unavailable at query time; therefore, we cannot assess EPS or topline relative to consensus. Where estimates are required, please note that S&P Global consensus could not be retrieved for this micro-cap bank during this period.
Implication: Absent consensus, focus should be on sequential and YoY operating trends (margin, funding costs, credit, and expense trajectory) demonstrated in company filings .

Key Takeaways for Investors

Earnings headwinds stem from higher funding costs and elevated operating expenses; NIM compression to 2.93% and efficiency ratio >80% constrained EPS to $0.13 despite solid asset yields .
Liquidity risk appears well-managed: deposit balances were stable QoQ and BTFP borrowings replaced FHLB advances, reducing refinancing uncertainty during March turmoil; watch cost of funds given the 4.37% BTFP rate .
Credit remains a bright spot with NPL ratio at 0.4% and significantly higher reserve coverage post-CECL (ACL/NPLs ~380%), supporting downside protection if macro weakens .
Capital is strong (CBLR 15.3%), and book value per share rose QoQ; ex-AOCI BVPS remained stable (~$15.23), indicating underlying capital resilience even as rates move .
Noninterest income softness (brokered loan fees) and expense inflation (notably data processing) are key levers; monitoring expense discipline and fee initiatives will be critical for operating leverage improvement .
Dividend at $0.06/share was maintained; sustainable given earnings and capital, but growth likely contingent on margin stabilization and expense control .
Near-term trading: stock likely most sensitive to datapoints on deposit costs, BTFP/FHLB funding mix, and NIM trajectory; medium-term thesis hinges on maintaining pristine credit, measured loan growth in core markets, and normalizing efficiency ratio toward the low-70s over time .

Citations:

Q1 2023 8-K and Exhibit 99.1 press release, including financial tables and operating commentary .
Q4 2022 8-K and Exhibit 99.1 for prior-quarter comparisons and CEO quote .
Q3 2022 8-K and Exhibit 99.1 for two-quarters-prior comparisons .

Mid-Southern Bancorp, Inc. (MSVB)·Q1 2023 Earnings Summary