Main Street Financial Services Corp. Announces Earnings for First Quarter of 2025

Rhea-AI Summary

Main Street Financial Services Corp. (OTCQX: MSWV) reported Q1 2025 net income of $3.6 million, or $0.47 per share, with a return on equity of 13.27% and return on assets of 1.03%. The quarter showed strong growth with deposits increasing by $28.3 million (9.8% annualized) and loans growing by $17.8 million (6.4% annualized).

Key financial metrics include net interest income of $11.5 million, up 128% year-over-year, and a net interest margin of 3.44%. The company reduced wholesale funding by $31 million to $69 million (4.8% of assets). Asset quality improved with nonperforming loans decreasing to $4.9 million and classified loans reducing to $12.0 million.

The company declared a cash dividend of $0.14 per share on April 11, 2025. Total assets stood at $1.41 billion with net loan balances of $1.13 billion as of March 31, 2025.

Positive

• Net income increased to $3.6 million in Q1 2025
• Strong deposit growth of $28.3 million (9.8% annualized)
• Loan portfolio grew by $17.8 million (6.4% annualized)
• Net interest income up 128% year-over-year to $11.5 million
• Improved asset quality with NPLs decreasing to $4.9 million
• Reduced reliance on wholesale funding by $31 million

Negative

• Past due loans increased to $14.5 million from $13.8 million
• Non-interest expenses increased by $3.6 million year-over-year
• Cost of deposits increased by 13 basis points to 2.27%

Business Highlights

• Net income for the first quarter of 2025 totaled $3.6 million, or $0.47 per common share
• Deposit growth of $28.3 million, or 9.8% annualized, for the quarter ended March 31, 2025
• Loan growth of $17.8 million, or 6.4% annualized, for the quarter ended March 31, 2025
• Continued reduction of wholesale funding by $31 million during the first quarter of 2025. The wholesale funding balance decreased to $69 million, or 4.8% of assets, as of March 31, 2025.
• Declared cash dividend of $0.14 per share on April 11, 2025
  

WOOSTER, Ohio, April 24, 2025 (GLOBE NEWSWIRE) -- Main Street Financial Services Corp. (OTCQX: MSWV), (the “Company”), the holding company parent of Main Street Bank Corp. reported a net income of $3.6 million, or $0.47 per common share, for the three months ended March 31, 2025. The return on average equity and return on average assets for the first quarter of 2025 was 13.27% and 1.03%, compared to 12.94% and 0.86%, for the first quarter of 2024 with merger costs excluded.

The Company announced a merger of equals transaction with Wayne Savings Bancshares, Inc. (“Legacy Wayne”) on February 23, 2023. On May 31, 2024 (the “Merger Date”), the Company completed the transaction, forming a financial holding company with assets of $1.4 billion. On the Merger Date, Legacy Wayne merged with and into Main Street, with Main Street surviving the merger (the “Merger”). Immediately following the Merger, Main Street’s wholly owned bank subsidiary, Main Street Bank Corp., merged with and into Wayne Savings Community Bank, with Wayne Savings Community Bank surviving the merger. Upon completion of the Merger, Wayne Savings Community Bank was renamed Main Street Bank Corp.

The Merger was accounted for as a reverse merger using the acquisition method of accounting, therefore, Legacy Wayne was deemed the acquirer for financial reporting purposes, even though Main Street was the legal acquirer. Accordingly, Legacy Wayne’s historical financial statements are the historical financial statements of the combined company for all periods before the Merger Date. Our consolidated statements of income for the quarters ended June 30, 2024 and forward, include the results from Main Street on and after May 31, 2024. Results for periods before May 31, 2024, reflect only those of Legacy Wayne and do not include the consolidated statements of income of Main Street. Accordingly, comparisons of our results for the quarter ended March 31, 2025, with those of prior periods may not be meaningful. The number of shares issued and outstanding, earnings per share, dividends paid and all references to share quantities of Main Street have been retrospectively adjusted to reflect the equivalent number of shares issued in the Merger.

President and CEO James R. VanSickle commented “We are proud of the progress we have made as a combined organization. The merger has created meaningful opportunities for growth and enhanced our ability to deliver long-term value to our shareholders. Our team’s dedication and our communities’ ongoing support have been instrumental in this success, and we’re deeply grateful for the trust placed in us.”

First Quarter 2025 Financial Results

Net interest income was $11.5 million for the quarter ended March 31, 2025, an increase of 128% from $5.1 million for the quarter ended March 31, 2024. The net interest margin of 3.44% for the first quarter of 2025 increased 83 basis points from 2.61% for the first quarter of 2024. Loan yields were 6.14% for the quarter ended March 31, 2025, an increase of 81 basis points when compared to 5.33% for the quarter ended March 31, 2024. During the first quarter of 2025, $68.5 million of the existing loan portfolio repriced and the bank funded $62.0 million in term loans and lines of credit at current market rates. Investment yields increased 157 basis points to 3.89% as of March 31, 2025, compared to the quarter ended March 31, 2024. The cost of funds for the first quarter of 2025, was 2.43%, a decrease of 5 basis points when compared to the first quarter of 2024. The cost of funds is impacted by the acquisition of new deposit accounts in the local market at rates lower than wholesale funding, such as FHLB advances. The cost of deposits was 2.27% for the quarter ended March 31, 2025, a 13 basis point increase when compared to 2.40% for the quarter ended March 31, 2024. The cost of borrowings for the quarter ended March 31, 2025 totaled 4.32%, an decrease of 42 basis points when compared to the quarter ended March 31, 2024.

A provision for credit losses and unfunded commitments of $245,000 was recorded for the quarter ended March 31, 2025. During the quarter, the Company recognized $22,000 in charge-offs and $39,000 in recoveries, reflecting relatively stable asset quality.

Noninterest income totaled $0.8 million for the quarter ended March 31, 2025, an increase of $141,000, or 20.8%, when compared to the quarter ended March 31, 2024. The increase in noninterest income is primarily attributed to interchange fees and service charges generated from the acquired deposit accounts.

Noninterest expense totaled $7.5 million for the quarter ended March 31, 2025, an increase of $3.6 million when compared to the quarter ended March 31, 2024. The increase reflects a quarter of combined expenses after the merger. The continued realization of expected cost savings from the merger have progressed as planned during the quarter. Noninterest expense decreased by $436,000 when compared to the quarter ended December 31, 2024 due to decreased compensation expense and supplies.

The provision for income taxes for the quarter ended March 31, 2025, increased by $464,000 compared to the quarter ended December 31, 2024. During the quarter ended December 31, 2024, the Company reassessed the West Virginia state income tax position and a $177,000 credit adjustment was realized during the quarter.

March 31, 2025 Financial Condition

At March 31, 2025, the Company had total assets of $1.41 billion with net loan balances totaling $1.13 billion. Loan balances grew by $17.8 million, or 6.4% annualized, during the first quarter of 2025. The increase is primarily attributed to $17.4 million growth in the commercial loan portfolio.

The allowance for credit losses was $12.0 million at March 31, 2025, compared to $11.8 million at December 31, 2024. The allowance for credit losses as a percent of total loans was 1.05% for March 31, 2025 and December 31, 2024. The allowance for credit losses and the related provision for credit losses is based on management’s judgment and evaluation of the loan portfolio. Management believes the current allowance for credit losses is adequate, however, changing economic and other conditions may require future adjustments to the allowance for credit losses.

Total nonperforming loans (NPLs) was $4.9 million at March 31, 2025, a decrease from $6.1 million at December 31, 2024. The NPL to net loan receivable ratio was 0.43% as of March 31, 2025. Past due loan balances of 30 days and more increased from $13.8 million at December 31, 2024, to $14.5 million, or 1.28% of net loans outstanding, at March 31, 2025.

Improvement in Asset Quality Since Merger Announcement: The combined level of classified loans for Legacy Wayne and Main Street was $24.4 million as of December 31, 2022. Since the merger announcement on February 23, 2023, the management teams of both Main Street and Wayne invested a great deal of time ensuring our combined organization utilizes strong underwriting standards and proactively monitors credit quality. Main Street sold approximately $15.2 million of loans in August 2023 and April 2024, of which approximately $12.7 million were classified loans. As of March 31, 2025, the resultant Company has $12.0 million of classified loans.

Total liabilities was $1.30 billion at March 31, 2025 with deposits totaling $1.18 billion and wholesale funding totaling $69.0 million. Deposits grew by $28.3 million, or 9.8% annualized, during the first quarter of 2025, mainly attributed to growth from Maximize Money Market accounts and the Short-Term Relationship Certificates of Deposits. The Company primarily utilizes FHLB advances as the primary source of wholesale funding due to their accessibility and alignment with prevailing market rates. During the first quarter of 2025, the Company reduced the reliance on FHLB advances by $36 million.

Total stockholders’ equity was $114.8 million at March 31, 2025, an increase of $4.2 million when compared to the December 31, 2024 balance. Total stockholders’ equity increased during the first quarter of 2025 primarily from net income of $3.6 million and an increase in accumulated other comprehensive income of $1.5 million, partially offset by dividends of $1.1 million.

Main Street Financial Services Corp. is a holding company headquartered in Wooster, Ohio. Its primary subsidiary, Main Street Bank Corp. was founded in 1899 and provides full-service banking, commercial lending, and mortgage services across its branch infrastructure. Today, Main Street Bank Corp. operates 19 branch locations in Wooster, Ohio, Wheeling, West Virginia and other surrounding communities in Ohio and West Virginia. Additional information about Main Street Bank Corp. is available at www.mymainstreetbank.bank.

Non-GAAP Disclosure
This press release includes disclosures of the Company’s return on average equity, return on average assets, net income, and efficiency ratios which are excluding costs related to merger activities which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flow that excludes or includes amounts that are required to be disclosed by GAAP. The Company believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and the Company’s marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP.

Forward-Looking-Statements
This release contains forward-looking statements that are not historical facts and that are intended to be “forward-looking statements” as that term is defined by the Private Securities Litigation Reform Act of 1995.  These forward-looking statements may include, but are not limited to, statements about the Company’s plans, objectives, expectations and intentions and other statements contained in this release that are not historical facts and pertain to the Company’s future operating results.  When used in this release, the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions are generally intended to identify forward-looking statements.  Actual results may differ materially from the results discussed in these forward-looking statements, because such statements are inherently subject to significant assumptions, risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control.  These include but are not limited to: the possibility of adverse economic developments that may, among other things, increase default and delinquency risks in the Company’s loan portfolios; shifts in interest rates; shifts in the rate of inflation; shifts in the demand for the Company’s loan and other products; unforeseen increases in costs and expenses; lower-than-expected revenue or cost savings in connection with acquisitions; changes in accounting policies; changes in the monetary and fiscal policies of the federal government; and changes in laws, regulations and the competitive environment.  Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information:
Matthew Hartzler
Senior Vice President, Chief Financial Officer
(330) 264-5767

MAIN STREET FINANCIAL SERVICES CORP.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share data - unaudited)
	March 31, 2025				December 31, 2024
ASSETS
Cash and cash equivalents	$	42,734			$	54,422
Securities, net (1)	162,763				163,819
Loans receivable, net	1,131,661				1,113,900
Federal Home Loan Bank stock	4,951				5,924
Premises & equipment, net	8,018				8,013
Bank-owned life insurance	21,893				22,155
Other assets	41,103				41,368
TOTAL ASSETS	$	1,413,123			$	1,409,601
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts	$	1,184,669			$	1,156,327
Other borrowings	35,852				28,399
Federal Home Loan Bank advances	64,000				100,000
Accrued interest payable and other liabilities	13,699				14,239
TOTAL LIABILITIES	1,298,220				1,298,965
Common stock (7,801,011 shares of $1.00 par value issued)	7,801				7,801
Additional paid-in capital	56,584				56,387
Retained earnings	59,893				57,356
Accumulated other comprehensive loss	(9,375		)		(10,908		)
TOTAL STOCKHOLDERS' EQUITY	114,903				110,636
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,413,123			$	1,409,601
(1) Includes available-for-sale and held-to-maturity classifications.
Note: The December 31, 2024 Condensed Consolidated Balance Sheet has been derived from the audited Consolidated Balance Sheet as of that date.

MAIN STREET FINANCIAL SERVICES CORP.
Condensed Consolidated Statements of Income
(Dollars in thousands, except share data - unaudited)
	Three Months Ended
	March 31,
		2025			2024
Interest income	$	19,397		$	9,694
Interest expense		7,872			4,641
Net interest income		11,525			5,053
Provision for credit losses		245			(126	)
Net interest income after provision for credit losses		11,280			5,179
Non-interest income		819			678
Non-interest expense
Salaries and employee benefits		3,716			2,000
Net occupancy and equipment expense		1,475			682
Federal deposit insurance premiums		171			143
Franchise taxes		105			127
Advertising and marketing		170			68
Legal		83			133
Professional fees		359			85
ATM network		80			129
Auditing and accounting		176			72
Other		1,179			495
Total non-interest expense		7,514			3,934
Income before federal income taxes		4,585			1,923
Provision for federal income taxes		956			384
Net income	$	3,629		$	1,539
Earnings per share
Basic	$	0.47		$	0.40
Diluted	$	0.47		$	0.40

MAIN STREET FINANCIAL SERVICES CORP.
Selected Condensed Consolidated Financial Data
(Dollars in thousands, except share data - unaudited)
	March				December				September				June
		2025				2024				2024				2024
Interest and dividend income	$	19,397			$	19,138			$	18,930			$	12,572
Interest expense		7,872				8,531				8,308				6,185
Net interest income		11,525				10,607				10,622				6,387
Provision for credit losses		245				79				109				4,720
Net interest income after
provision for credit losses		11,280				10,528				10,513				1,666
Non-interest income		819				1,165				1,600				716
Non-interest expense		7,514				7,950				7,863				6,723
Income before federal income taxes		4,585				3,744				4,251				(4,341	)
Provision for federal income taxes		956				558				804				(873	)
Net income	$	3,629			$	3,186			$	3,446			$	(3,468	)
Earnings per share - basic	$	0.47			$	0.41			$	0.44			$	(0.68	)
Earnings per share - diluted	$	0.47			$	0.41			$	0.44			$	(0.67	)
Dividends per share	$	0.14			$	0.14			$	0.14			$	0.13
Return on average assets		1.03	%			0.90	%			1.00	%			(1.38	%)
Return on average equity		13.27	%			11.69	%			12.58	%			(17.16	%)
Shares outstanding at quarter end		7,801,011				7,801,011				7,801,011				7,787,055
Book value per share	$	14.73			$	14.18			$	14.27			$	13.60
Tangible equity per share	$	12.73			$	12.13			$	12.15			$	11.49
Return on common tangible equity		14.62	%			13.46	%			14.54	%			(15.51	%)
	March				December				September				June
		2024				2023				2023				2023
Interest and dividend income	$	9,694			$	9,545			$	9,078			$	8,571
Interest expense		4,641				4,330				3,673				2,867
Net interest income		5,053				5,215				5,405				5,704
Provision for credit losses		(126	)			4				138				170
Net interest income after
provision for credit losses		5,179				5,211				5,267				5,534
Non-interest income		678				1,017				691				706
Non-interest expense		3,934				3,748				3,733				3,949
Income before federal income taxes		1,923				2,480				2,225				2,291
Provision for federal income taxes		384				443				452				547
Net income	$	1,539			$	2,037			$	1,773			$	1,744
Earnings per share - basic	$	0.40			$	0.53			$	0.46			$	0.46
Earnings per share - diluted	$	0.40			$	0.53			$	0.46			$	0.45
Dividends per share	$	0.13			$	0.13			$	0.13			$	0.13
Return on average assets		0.76	%			1.02	%			0.91	%			0.92	%
Return on average equity		11.63	%			16.90	%			14.41	%			14.36	%
Shares outstanding at quarter end		3,840,575				3,839,702				3,837,609				3,837,085
Book value per share	$	13.81			$	13.80			$	12.40			$	12.64
Tangible equity per share	$	13.36			$	13.35			$	11.95			$	12.20
Return on common tangible equity		12.00	%			15.90	%			15.46	%			14.90	%

MAIN STREET FINANCIAL SERVICES CORP.
Non-GAAP reconciliation
(Dollars in thousands, except per share data - unaudited)
	For three months ended
	March,
		2025				2024
Net Income as reported - GAAP	$	3,629			$	1,539
Effect of merger related expenses (net of tax benefit)		-				174
Net Income non-GAAP	$	3,629			$	1,713
Earnings per share - GAAP	$	0.47			$	0.40
Effect of merger related expenses		-				0.05
Earnings per share non-GAAP	$	0.47			$	0.45
Return on average assets - GAAP		1.03	%			0.77	%
Effect of merger related expenses		-				0.09	%
Return on average assets non-GAAP		1.03	%			0.86	%
Return on average equity - GAAP		13.27	%			11.63	%
Effect of merger related expenses		-				1.31	%
Return on average equity non-GAAP		13.27	%			12.94	%
Efficiency Ratio - GAAP		60.87	%			68.64	%
Effect of merger related expenses		-				(3.04	%)
Efficiency Ratio non-GAAP		60.87	%			65.61	%

FAQ

What was Main Street Financial Services (MSWV) Q1 2025 earnings per share?

MSWV reported earnings of $0.47 per share for Q1 2025.

How much did MSWV's deposits grow in Q1 2025?

Deposits grew by $28.3 million, representing a 9.8% annualized growth rate.

What is MSWV's current loan portfolio size and growth rate?

Net loan balances totaled $1.13 billion, with Q1 2025 growth of $17.8 million (6.4% annualized).

How much did MSWV reduce its wholesale funding in Q1 2025?

Wholesale funding was reduced by $31 million, decreasing to $69 million (4.8% of assets).

What dividend did MSWV declare for Q1 2025?

MSWV declared a cash dividend of $0.14 per share on April 11, 2025.