Core Points - Middlefield Banc Corp. announced the retirement of Darryl E. Mast from its Board of Directors, effective May 14, 2025 [1] - Mr. Mast has been a member of the Board since 2011 and has significantly contributed to the company's success [2] - Following Mr. Mast's retirement, the Board will remain at 11 members as his position will not be replaced [3] Company Overview - Middlefield Banc Corp. is headquartered in Middlefield, Ohio, and serves as the holding company for The Middlefield Banking Company [4] - As of March 31, 2025, the company reported total assets of $1.89 billion [4] - The Bank operates 21 full-service banking centers and a brokerage office, serving multiple locations in Ohio [4]

Part I [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) This section presents Middlefield Banc Corp.'s unaudited consolidated financial statements for Q1 2025, including the balance sheet, income statement, comprehensive income, equity changes, cash flows, and detailed notes [Consolidated Balance Sheet](index=4&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2025, total assets were $1.89 billion, a slight increase from $1.85 billion at year-end 2024, driven by loan and deposit growth Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | **$1,888,356** | **$1,853,359** | **$34,997** | **1.9%** | | Net Loans | $1,527,948 | $1,497,167 | $30,781 | 2.1% | | Total Deposits | $1,539,725 | $1,445,693 | $94,032 | 6.5% | | Federal Home Loan Bank advances | $110,000 | $172,400 | ($62,400) | (36.2%) | | **Total Liabilities** | **$1,674,563** | **$1,642,797** | **$31,766** | **1.9%** | | **Total Stockholders' Equity** | **$213,793** | **$210,562** | **$3,231** | **1.5%** | [Consolidated Statement of Income](index=5&type=section&id=Consolidated%20Statement%20of%20Income) For the three months ended March 31, 2025, net income increased 15.9% to $4.83 million, driven by higher net interest income and lower interest expense Q1 2025 vs Q1 2024 Income Statement (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $16,098 | $14,969 | $1,129 | 7.5% | | Provision for (Recovery of) credit losses | $95 | ($136) | $231 | N/A | | Total Noninterest Income | $1,944 | $1,796 | $148 | 8.2% | | Total Noninterest Expense | $12,193 | $11,965 | $228 | 1.9% | | **Net Income** | **$4,830** | **$4,167** | **$663** | **15.9%** | | **Basic EPS** | **$0.60** | **$0.52** | **$0.08** | **15.4%** | [Consolidated Statement of Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income%20%28Loss%29) Comprehensive income for Q1 2025 more than doubled to $4.46 million, primarily due to higher net income and a significantly smaller other comprehensive loss Comprehensive Income (Loss) (in thousands) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $4,830 | $4,167 | | Other comprehensive income (loss), net of tax | ($367) | ($2,040) | | **Comprehensive income (loss)** | **$4,463** | **$2,127** | [Consolidated Statement of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity increased to $213.8 million at March 31, 2025, driven by net income, partially offset by cash dividends and other comprehensive loss - Key drivers for the change in stockholders' equity in Q1 2025 were **net income of $4.83 million**, offset by **cash dividends of $1.70 million** (**$0.21 per share**) and an **other comprehensive loss of $0.37 million**[22](index=22&type=chunk) - In Q1 2024, the company repurchased **43,858 common shares** for **$1.06 million**, whereas no shares were repurchased in Q1 2025[22](index=22&type=chunk) [Consolidated Statement of Cash Flows](index=9&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Cash and cash equivalents increased by $11.1 million in Q1 2025, primarily from financing activities, offsetting investing activities and supplemented by operations Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $8,018 | $5,440 | | Net cash provided by (used in) investing activities | ($26,824) | ($11,611) | | Net cash provided by (used in) financing activities | $29,884 | ($8,411) | | **Increase (decrease) in cash and cash equivalents** | **$11,078** | **($14,582)** | [Notes to Unaudited Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes provide detailed supplementary information on accounting policies, fair value measurements, loan portfolio, allowance for credit losses, and subsequent events - Note 5 details fair value measurements, classifying assets into Level 1, 2, and 3 hierarchies. As of March 31, 2025, the vast majority of recurring fair value assets (**$158.4 million** of **$165.7 million**) are Level II, valued using observable market data[46](index=46&type=chunk)[48](index=48&type=chunk) - Note 7 provides an in-depth analysis of the loan portfolio and the Allowance for Credit Losses (ACL). The total ACL was **$22.4 million** as of March 31, 2025, a slight decrease from year-end 2024, with changes driven by portfolio activity and updated economic assumptions[70](index=70&type=chunk)[71](index=71&type=chunk) - Note 11 discloses two significant subsequent events in April 2025: a real estate exchange with the City of Westerville resulting in a **$1.2 million gain**, and a plan to sell another property resulting in a recognized **loss of $700,000**[107](index=107&type=chunk)[108](index=108&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and results of operations for Q1 2025, highlighting increased EPS, expanded net interest margin, and improved asset quality - Financial highlights for Q1 2025 include a **17.6% YoY increase** in diluted EPS to **$0.60**, a **12 basis point increase** in annualized ROA to **1.04%**, and a **5% increase** in the quarterly dividend to **$0.21 per share**[117](index=117&type=chunk) - Total assets grew by **$35.0 million** to **$1.89 billion** since year-end 2024, driven by a **$30.7 million increase** in total loans. This growth was funded by a **$94.0 million increase** in deposits[126](index=126&type=chunk) - Net interest income rose **7.5% YoY** to **$16.1 million**, with the net interest margin expanding **15 basis points** to **3.69%**. This was attributed to lower costs on certain deposits and borrowings, and higher loan balances[155](index=155&type=chunk) [Changes in Financial Condition](index=38&type=section&id=Changes%20in%20Financial%20Condition) Total assets increased by $35.0 million to $1.89 billion at March 31, 2025, driven by loan and deposit growth, while short-term borrowings decreased Loan Portfolio Changes (Q1 2025 vs YE 2024, in thousands) | Loan Category | March 31, 2025 | Dec 31, 2024 | $ Change | | :--- | :--- | :--- | :--- | | Construction and other | $122,653 | $103,608 | $19,045 | | Commercial and industrial | $235,547 | $229,034 | $6,513 | | Home equity lines of credit | $147,154 | $143,379 | $3,775 | | **Total Loans** | **$1,550,349** | **$1,519,614** | **$30,735** | Deposit Portfolio Changes (Q1 2025 vs YE 2024, in thousands) | Deposit Category | March 31, 2025 | Dec 31, 2024 | $ Change | | :--- | :--- | :--- | :--- | | Money market | $481,664 | $414,074 | $67,590 | | Time | $275,673 | $247,704 | $27,969 | | Interest-bearing demand | $222,953 | $208,291 | $14,662 | | **Total Deposits** | **$1,539,725** | **$1,445,693** | **$94,032** | - The Allowance for Credit Losses (ACL) decreased slightly by **$46,000** to **$22.4 million**. Nonperforming loans stood at **$29.6 million**, down from **$30.0 million** at year-end 2024[142](index=142&type=chunk)[147](index=147&type=chunk) [Results of Operations](index=49&type=section&id=Results%20of%20Operations) Net income for Q1 2025 increased 15.9% to $4.8 million, driven by a 7.5% rise in net interest income and a modest 1.9% increase in noninterest expense - Net interest income increased by **$1.1 million** YoY, driven by a **$60.8 million** increase in the average balance of loans and a decrease in the cost of FHLB advances[155](index=155&type=chunk)[157](index=157&type=chunk) - Interest expense decreased by **$268,000** YoY, mainly due to a **$646,000** reduction in short-term borrowing expense as FHLB advances were paid down[158](index=158&type=chunk) - Noninterest income increased by **$148,000** YoY, largely due to a **$633,000** tax-free benefit from a bank-owned life insurance death claim[160](index=160&type=chunk) [Liquidity and Regulatory Capital](index=53&type=section&id=Liquidity%20and%20Regulatory%20Capital) The company maintained a strong liquidity position of $785.2 million at March 31, 2025, exceeding uninsured deposits, and met all 'well-capitalized' regulatory capital requirements - Total net available liquidity was **$785.2 million** at March 31, 2025, covering **51.0%** of total deposits[171](index=171&type=chunk) - Uninsured deposit balances were approximately **$486.4 million**, or **31.6%** of total deposits, at March 31, 2025[149](index=149&type=chunk) Regulatory Capital Ratios as of March 31, 2025 | Ratio | Middlefield Banc Corp. | The Middlefield Banking Company | Well-Capitalized Requirement (Bank) | | :--- | :--- | :--- | :--- | | Tier 1 Leverage | 10.92% | 10.87% | 5.00% | | Common Equity Tier 1 | 11.61% | 11.92% | 6.50% | | Tier 1 Risk Based | 12.09% | 11.92% | 8.00% | | Total Risk Based | 13.35% | 13.17% | 10.00% | [Quantitative and Qualitative Disclosures about Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages interest rate risk through simulation modeling, projecting NII and EVE impacts within policy limits, indicating a slightly liability-sensitive position Interest Rate Sensitivity Analysis (as of March 31, 2025) | Change in Rates | % Change in Net Interest Income (NII) | % Change in Economic Value of Equity (EVE) | | :--- | :--- | :--- | | +200bp | (2.60%) | (3.00%) | | -100bp | 1.30% | (0.20%) | - The company's policy limits for interest rate risk are a maximum **10% reduction** in NII for a **+/- 200bp gradual rate shift** and a maximum **20% change** in EVE for a **+200bp immediate rate shock**. The current simulations are well within these guidelines[186](index=186&type=chunk)[187](index=187&type=chunk) [Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[192](index=192&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[194](index=194&type=chunk) Part II [Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) A class action lawsuit related to the April 2023 cyber-attack has been settled, with final court approval granted on April 1, 2025, and losses covered by insurance - The class action lawsuit stemming from the April 2023 cyber-attack received final court approval for settlement on **April 1, 2025**[100](index=100&type=chunk) - Losses related to the incident are within the coverage limits of the company's **$3 million cyber risk insurance policy**, which has a **$50,000 deductible**[100](index=100&type=chunk) [Risk Factors](index=57&type=section&id=Item%201a.%20Risk%20Factors) There have been no material updates or changes to the company's risk factors since the year ended December 31, 2024 - No material changes in risk factors have occurred since **December 31, 2024**[196](index=196&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any common shares in Q1 2025, with 250,052 shares remaining available for repurchase under the board-authorized program - No common shares were repurchased in the first quarter of 2025[197](index=197&type=chunk) - The company has authorization to repurchase an additional **250,052 shares** under its existing program as of **March 31, 2025**[197](index=197&type=chunk) [Other Information](index=58&type=section&id=Item%205.%20Other%20information) No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by any director or officer during the first quarter of 2025 - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by any director or officer in Q1 2025[199](index=199&type=chunk) [Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with or incorporated by reference into the Form 10-Q report, including articles of incorporation, various agreements, and certifications

Company Overview - Middlefield Banc Corp. is headquartered in Middlefield, Ohio, and serves as the bank holding company for The Middlefield Banking Company [2] - As of March 31, 2025, the company has total assets amounting to $1.89 billion [2] - The bank operates 21 full-service banking centers and a brokerage office, with a Loan Production Office located in Mentor, Ohio [2] Dividend Announcement - The Board of Directors of Middlefield Banc Corp. declared a quarterly cash dividend of $0.21 per common share [1] - The second-quarter dividend for 2025 is scheduled to be paid on June 13, 2025, to shareholders of record as of May 30, 2025 [1]

Core Viewpoint - Middlefield Banc Corp. (MBCN) shows potential as a strong investment opportunity due to significant revisions in earnings estimates, indicating an improving earnings outlook [1][9]. Earnings Estimate Revisions - The current quarter's earnings estimate is $0.57 per share, reflecting a +9.62% change from the previous year [6]. - Over the last 30 days, the Zacks Consensus Estimate for Middlefield Banc has increased by 18.95%, with two estimates moving higher and no negative revisions [6]. - For the full year, the earnings estimate stands at $2.24 per share, representing a +16.67% change from the year-ago figure, supported by two upward revisions and no negative changes [7]. Analyst Optimism and Stock Performance - The rising trend in estimate revisions is driven by growing analyst optimism regarding the company's earnings prospects, which is expected to positively influence the stock price [2]. - The Zacks Rank system, which categorizes stocks from 1 (Strong Buy) to 5 (Strong Sell), has shown that Zacks 1 Ranked stocks have generated an average annual return of +25% since 2008 [3]. Zacks Rank and Investment Potential - Middlefield Banc has achieved a Zacks Rank 1 (Strong Buy) due to favorable estimate revisions, indicating strong investment potential [8]. - Stocks with Zacks Rank 1 and 2 (Buy) have historically outperformed the S&P 500, suggesting that Middlefield Banc may continue to see positive stock performance [8]. Recent Stock Movement - The stock has appreciated by 8.4% over the past four weeks, indicating strong investor interest, with further upside potential still available [9].

Core Viewpoint - Middlefield Banc Corp. (MBCN) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, particularly influenced by institutional investors [4][6]. - Rising earnings estimates for Middlefield Banc suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][10]. Earnings Estimate Revisions - Middlefield Banc is projected to earn $2.08 per share for the fiscal year ending December 2025, reflecting an 8.3% year-over-year increase [8]. - Over the past three months, the Zacks Consensus Estimate for Middlefield Banc has risen by 6.1%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimate revisions, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Middlefield Banc to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Group 1 - Middlefield Banc Corp. reported $18.04 million in revenue for Q1 2025, a year-over-year increase of 7.6% [1] - The EPS for the same period was $0.60, compared to $0.51 a year ago, representing a surprise of +25.00% over the consensus estimate of $0.48 [1][2] - The reported revenue exceeded the Zacks Consensus Estimate of $17.25 million by +4.59% [1] Group 2 - The efficiency ratio for Middlefield Banc was 65.2%, better than the average estimate of 69.5% from two analysts [4] - The net interest margin was reported at 3.7%, slightly above the average estimate of 3.6% [4] - Average interest-earning assets were $1.80 billion, exceeding the estimated $1.77 billion [4] - Total noninterest income was $1.94 million, compared to the estimated $1.90 million [4] - Net interest income was reported at $16.10 million, surpassing the average estimate of $15.85 million [4] Group 3 - Shares of Middlefield Banc have returned -7% over the past month, while the Zacks S&P 500 composite changed by -5.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Group 1: Earnings Performance - Middlefield Banc Corp. reported quarterly earnings of $0.60 per share, exceeding the Zacks Consensus Estimate of $0.48 per share, and up from $0.51 per share a year ago, representing an earnings surprise of 25% [1] - The company posted revenues of $18.04 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.59%, compared to year-ago revenues of $16.77 million [2] - Over the last four quarters, Middlefield Banc has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - Middlefield Banc shares have declined approximately 8.2% since the beginning of the year, slightly better than the S&P 500's decline of 8.6% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.48 on revenues of $17.85 million, and for the current fiscal year, it is $1.96 on revenues of $70.95 million [7] Group 3: Industry Context - The Zacks Industry Rank for Banks - Northeast is currently in the top 22% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6]

Financial Performance - Net income expanded by 15.9% year-over-year to $4.8 million, with earnings per share increasing 17.6% to $0.60 per diluted share[4][9] - Total loans increased by 4% year-over-year to a record $1.55 billion, driven by stable economic trends and strategic initiatives[3] - Total assets increased by 3.9% to $1.89 billion, while total deposits rose by 6.4% to $1.54 billion[9][11] - Stockholders' equity increased by 4.0% year-over-year to $213.8 million, with tangible stockholders' equity at $172.1 million[13][14] - Net income for Q1 2025 was $4,830,000, up from $4,167,000 in Q1 2024, indicating a growth of 15.9%[25] - Basic and diluted net income per common share for Q1 2025 was $0.60, consistent with Q4 2024, and significantly higher than $0.29 in Q3 2024[26] Asset Quality - Nonperforming assets to total assets decreased to 1.56%, showing improvement in asset quality[4][20] - Nonperforming assets decreased to $29,550,000 from $29,984,000 in the previous quarter, reflecting a decline of 1.44%[29] - The allowance for credit losses stood at $22.4 million, or 1.44% of total loans, indicating a proactive approach to credit risk management[19][20] - The allowance for credit losses as a percentage of total loans is 1.44%, down from 1.48% in the previous quarter[29] - Nonperforming loans as a percentage of total loans decreased to 1.91% from 1.97% in the previous quarter[29] Revenue and Income - Total interest and dividend income for Q1 2025 was $25,473,000, an increase from $24,612,000 in Q1 2024, representing a year-over-year growth of 3.5%[25] - Net interest income for Q1 2025 was $16,098,000, compared to $14,969,000 in Q1 2024, reflecting a 7.5% increase[25] - Total noninterest income for Q1 2025 was $1,944,000, a slight increase from $1,796,000 in Q1 2024[25] - The net interest margin for Q1 2025 was 3.69%, up from 3.54% in Q1 2024, reflecting improved profitability on interest-earning assets[28] Dividends and Shareholder Returns - The company declared cash dividends of $0.21 per share, a 5% increase from the previous quarter[15] - The dividend declared per share increased to $0.21 in Q1 2025 from $0.20 in Q4 2024, marking a 5% increase[26] Operational Efficiency - The efficiency ratio for Q1 2025 was 65.22%, compared to 67.93% in Q3 2024, indicating improved operational efficiency[26] - The efficiency ratio improved to 3.01% for interest-bearing liabilities, down from 3.23% in the previous quarter[32] Growth and Projections - The company expects stable economic activity to support loan demand and asset quality throughout 2025[20] - Total assets reached $1,881,536,000, up from $1,822,684,000 in the previous quarter, indicating growth of 3.23%[32] - Total loans reached $1,550,349,000, an increase of 2.0% from $1,519,614,000 in the previous quarter[24] - Cash and cash equivalents stood at $66,870,000, up from $55,792,000, marking a significant increase of 19.0%[24] Infrastructure and Technology - The company plans to make significant upgrades to its infrastructure to support a multi-year technology roadmap[5]

Core Insights - Middlefield Banc Corp. reported strong financial growth for the first quarter of 2025, with total loans increasing by 4% year-over-year to a record $1.55 billion, driven by stable economic trends and strategic initiatives [3][5][7] - Net income rose by 15.9% year-over-year to $4.8 million, resulting in a return on average assets of 1.04% and a tangible book value per share increase of 5.5% to $21.29 [3][6][12] - The company is focused on enhancing its infrastructure and technology to support long-term growth, with plans for further investments throughout the year [4][10] Financial Performance - Net interest income for the quarter increased by $1.1 million to $16.1 million, with a net interest margin of 3.69%, up from 3.54% the previous year [5][28] - Noninterest income rose by $148,000 to $1.9 million, while noninterest expenses increased slightly to $12.2 million [6][28] - Earnings per share increased by 17.6% year-over-year to $0.60 per diluted share [8][30] Balance Sheet Highlights - Total assets grew by 3.9% year-over-year to $1.89 billion, with total loans at $1.55 billion, reflecting a 4% increase [7][19] - Total deposits increased by 6.4% year-over-year to $1.54 billion, primarily due to growth in money market and interest-bearing demand deposits [9][25] - Stockholders' equity rose by 4.0% year-over-year to $213.8 million, with tangible stockholders' equity at $172.1 million [11][12] Asset Quality - Nonperforming loans increased to $29.6 million, primarily due to a loan moved to nonaccrual status [17][18] - The allowance for credit losses stood at $22.4 million, or 1.44% of total loans, indicating a stable asset quality [17][18] - Nonperforming assets to total assets improved slightly to 1.56% from 1.62% at the end of 2024 [18]

Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yie ...