Main Street Financial Services Corp. (OTCQX: MSWV), the parent company of Main Street Bank Corp., delivered robust financial results for the first quarter ended March 31, 2025, reflecting the positive impact of its recent merger and strategic initiatives. The company reported net income of $3.6 million, or $0.47 per common share, underscoring its capacity to generate shareholder value amid a competitive banking environment.
The company’s return on average equity rose to 13.27% for the quarter, up from 12.94% in the same period last year excluding merger costs. Similarly, return on average assets improved to 1.03% from 0.86%, signaling enhanced operational efficiency and profitability.
A key driver of this performance was a significant increase in net interest income, which soared 128% to $11.5 million from $5.1 million in the first quarter of 2024. This was supported by a net interest margin expansion to 3.44%, up 83 basis points from 2.61% a year earlier. Loan yields increased 81 basis points to 6.14%, reflecting the repricing of $68.5 million of the loan portfolio and the origination of $62.0 million in new term loans and lines of credit at current market rates.
Investment yields also improved markedly, rising 157 basis points to 3.89%, while the overall cost of funds decreased slightly by 5 basis points to 2.43%. The cost of deposits was 2.27%, a modest increase of 13 basis points compared to the prior year, attributable to the acquisition of new deposit accounts at competitive rates. The company continued to reduce reliance on higher-cost wholesale funding, decreasing this balance by $31 million during the quarter to $69 million, now representing only 4.8% of total assets.
Loan growth remained steady, with net loan balances increasing by $17.8 million, or 6.4% annualized, primarily driven by a $17.4 million rise in commercial loans. Deposits grew by $28.3 million, or 9.8% annualized, fueled by strong inflows into Maximize Money Market accounts and Short-Term Relationship Certificates of Deposit. At quarter-end, total assets stood at $1.41 billion, with deposits totaling $1.18 billion.
Asset quality showed signs of improvement following the merger with Wayne Savings Bancshares, Inc., completed on May 31, 2024, which created a combined financial holding company with $1.4 billion in assets. Nonperforming loans declined to $4.9 million from $6.1 million at year-end 2024, with the nonperforming loan ratio at a low 0.43%. Classified loans were reduced to $12.0 million, down from $24.4 million at the time of the merger announcement in early 2023, aided by proactive credit management and loan sales.
The allowance for credit losses remained stable at $12.0 million, representing 1.05% of total loans, reflecting management’s confidence in the adequacy of reserves despite ongoing economic uncertainties. The provision for credit losses and unfunded commitments for the quarter was $245,000, with charge-offs and recoveries remaining relatively low at $22,000 and $39,000 respectively.
Noninterest income increased 20.8% to $0.8 million, driven mainly by higher interchange fees and service charges from the expanded deposit base. Noninterest expense rose to $7.5 million, reflecting the costs of operating as a combined entity post-merger, but showed a decline of $436,000 compared to the previous quarter due to lower compensation and supplies expenses. The company continues to realize expected cost savings from the merger integration.
The board declared a cash dividend of $0.14 per share on April 11, 2025, maintaining a commitment to returning capital to shareholders while supporting growth initiatives. Total stockholders’ equity increased by $4.2 million during the quarter to $114.8 million, bolstered by net income and an increase in accumulated other comprehensive income, partially offset by dividend payments.
James R. VanSickle, President and CEO, highlighted the strategic progress since the merger with Wayne Savings Bancshares, emphasizing the enhanced growth opportunities and value creation for shareholders. He credited the dedication of the combined team and the support of local communities for the company’s success.
Main Street Bank Corp., with roots dating back to 1899, operates 19 branches across Ohio and West Virginia, offering a full range of banking, commercial lending, and mortgage services. The merger has expanded its footprint and strengthened its financial position, setting the stage for continued growth in the region.
The company’s first-quarter results demonstrate its strengthened market position and operational momentum as it integrates its expanded banking platform and pursues long-term value creation.
