Middlefield Banc(MBCN) - 2025 Q3 - Quarterly Report

Financial Performance - Third quarter diluted earnings increased to $0.65 per share, driving year-to-date earnings of $2.01 per share[118]. - Pre-tax, pre-provision earnings increased 37.3% to $6.8 million[118]. - The company recorded net income of $6.157 million for the three months ended September 30, 2025[126]. - Net income for the three months ended September 30, 2025, was $5.3 million, a 127.4% increase from the same period in 2024[154]. - Net interest income for the three months ended September 30, 2025, totaled $17.6 million, a 16.5% increase from the comparable period in 2024[156]. - Noninterest income increased by $2.0 million, or 38.6%, for the nine months ended September 30, 2025, driven by a one-time, non-cash gain of $1.2 million from a real estate exchange[166]. - Noninterest expense for the nine months ended September 30, 2025, was $38.9 million, an increase of 9.0% or $3.2 million compared to the same period in 2024[168]. Asset and Loan Growth - Total loans increased $102.5 million, or 6.8%, to a record $1.61 billion[118]. - Total assets increased $121.3 million, or 6.5%, to a record $1.98 billion[118]. - Total loans rose by $87.4 million, or 5.8%, to $1.61 billion as of September 30, 2025, from $1.52 billion as of December 31, 2024[132]. - The owner-occupied commercial real estate loans increased by $40.2 million, or 22.1%, to $221.6 million, while non-owner occupied loans decreased by $21.9 million, or 5.3%, to $390.4 million[132]. - Total assets reached $1,947,888 in 2025, an increase from $1,851,490 in 2024, representing a growth of 5.20%[172]. Equity and Capital - Book value increased 6.1% to $27.71 from $26.11 per share[118]. - Stockholders' equity increased by $13.6 million, representing a growth of 6.4%[127]. - Stockholders' equity increased to $219,278 in 2025, compared to $209,096 in 2024, indicating a growth of 4.00%[172]. - The Company met all well-capitalized ratio guidelines as of September 30, 2025, with Tier 1 Risk-Based Capital at 11.00%[193]. Interest and Yield - Net interest margin expanded 33 basis points to 3.79%[118]. - The average yield on loans receivable rose to 6.29% in 2025 from 6.19% in 2024, contributing to an increase in interest income[178]. - The interest rate spread improved to 2.90% in 2025 from 2.48% in 2024, reflecting improved profitability on interest-earning assets[178]. - Interest and dividend income increased by $2.0 million, or 7.8%, for the three months ended September 30, 2025, primarily due to a $2.0 million increase in interest and fees on loans[159]. Credit Quality and Losses - Nonperforming assets totaled $29.928 million, with a nonperforming loans to total loans ratio of 1.86%[123]. - The allowance for credit losses was $23.029 million, equating to 1.43% of total loans[123]. - Nonperforming loans in the commercial real estate segment totaled $25.6 million at September 30, 2025, with an allowance for credit losses to loans ratio of 1.29%[138]. - The provision for credit losses recorded for the three months ended September 30, 2025, was $392,000, significantly lower than the $2.2 million provision for the same period in the prior year[163]. Deposits and Liabilities - Total liabilities increased by $112.0 million to $1.75 billion, with total deposits rising by $176.6 million[127]. - Total deposits increased by $176.6 million to $1.62 billion, a 12.22% increase compared to $1.45 billion on December 31, 2024[147]. - Noninterest-bearing demand deposits increased by $32.7 million, or 8.66%, to $410.6 million at September 30, 2025[148]. Risk Management and Liquidity - The company has implemented heightened risk management procedures for its commercial real estate portfolio, including stress testing and independent loan monitoring[137]. - The company aims to maintain liquidity through customer deposits, loan repayments, and maturing investment securities, ensuring timely cash flow management[183]. - The company has the option to borrow from the Federal Reserve discount window, with a capacity of $132.6 million as of September 30, 2025[184]. - As of September 30, 2025, total net available liquidity was $864.8 million, accounting for 53.3% of total deposits, a decrease from 59.4% at December 31, 2024[185].