Business Highlights

• Financial results reflect the second full quarter following the completed merger of Main Street Financial Services Corp. (Main Street) and Wayne Savings Bancshares, Inc. (Wayne) on May 31, 2024.
• Net income for the fourth quarter of 2024 totaled $3.2 million, or $0.41 per common share
• Annualized deposit growth of 19.7% for the quarter ended December 31, 2024
• Reduced reliance on wholesale funding by $40 million during the fourth quarter of 2024
• Declared cash dividend of $0.14 per share on January 10, 2025
  

WOOSTER, Ohio, Jan. 29, 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 $3.2 million, or $0.41 per common share, for the three months ended December 31, 2024. The return on average equity and return on average assets for the fourth quarter of 2024 was 11.69% and 0.90%, compared to 16.90% and 1.02%, for the fourth quarter of 2023.

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, September 30, 2024 and December 31, 2024, 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 December 31, 2024, 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, “I am proud of the dedication and hard work displayed by Main Street Bank’s team of community bankers throughout 2024. They have been instrumental in the improvement of our operational efficiencies, enhancement of our customer experience and delivering long-term value for our shareholders. I would like to thank our customers, shareholders and our communities for their confidence in Main Street Bank.”

Fourth Quarter 2024 Financial Results

Net interest income was $10.6 million for the quarter ended December 31, 2024, an increase of 103.4% from $5.2 million for the quarter ended December 31, 2023. The net interest margin of 3.19% for the fourth quarter of 2024 increased 46 basis points from 2.73% for the fourth quarter of 2023. Loan yields were 6.12% for the quarter ended December 31, 2024, an increase of 82 basis points when compared to 5.30% for the quarter ended December 31, 2023. The loan yield increase is the result of variable rate loan repricing, new loan originations at current markets rates and purchase accounting accretion on acquired loans. Investment yields increased 122 basis points to 3.59% as of December 31, 2024 when compared to the quarter ended December 31, 2023. The cost of funds for the fourth quarter of 2024, was 2.66%, an increase of 33 basis points when compared to the fourth quarter of 2023. The cost of funds increase is largely due to shifting deposit composition to higher-yielding product offerings and utilizing higher-cost wholesale funding, such FHLB advances. The cost of total deposits was 2.25% for the quarter ended December 31, 2024, a 21 basis point increase when compared to 2.04% for the quarter ended December 31, 2023. The cost of borrowings for the quarter ended December 31, 2024 totaled 5.64%, an increase of 94 basis points when compared to the quarter ended December 31, 2023.

A provision for credit losses and unfunded commitments of $79,000 was recorded for the quarter ended December 30, 2024. During the quarter, the Company recognized $20,000 in charge-offs and $5,000 in recoveries, reflecting relatively stable asset quality.

Noninterest income totaled $1.2 million for the quarter ended December 31, 2024, an increase of $148,000, or 14.6%, when compared to the quarter ended December 31, 2023. Noninterest income declined by $435,000 when compared to the quarter ended September 30, 2024. During the quarter ended September 30, 2024, the Company recognized a gain on the sale of investments totaling $702,000.

Noninterest expense totaled $8.0 million for the quarter ended December 31, 2024, an increase of $4.2 million when compared to the quarter ended December 31, 2023. Noninterest expense increased by $87,000 when compared to the quarter ended September 30, 2024 due to increased incentive compensation and a charge related to the disposition of an REO property. The increase reflects a full quarter of combined expenses after completion of the merger.

The provision for income taxes for the quarter ended December 31, 2024, decreased by $246,000 compared to the quarter ended September 30, 2024. This reduction was primarily driven by the Company's reassessment of the West Virginia state income tax impact.

December 31, 2024 Financial Condition

At December 31, 2024, the Company had total assets of $1.41 billion with net loan balances totaling $1.11 billion. Loan balances remained relatively unchanged for the quarter ended December 31, 2024. As part of the merger, the Company acquired $430.8 million in loans.

The allowance for credit losses was $11.8 million at December 31, 2024, compared to $7.3 million at December 31, 2023. The increase is a result of establishing an allowance for credit losses on the acquired non-PCD loan portfolio during the second quarter of 2024. The allowance for credit losses as a percent of total loans was 1.05%, compared to 1.09% as of December 31, 2023. 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 $6.1 million at December 31, 2024, an increase from $0.6 million at December 31, 2023. The NPL to net loan receivable ratio was 0.55% as of December 31, 2024. Past due loan balances of 30 days and more increased from $2.8 million at December 31, 2023, to $13.8 million, or 1.24% of net loans outstanding, at December 31, 2024. The increase in nonperforming and past due loans is due to the impact of the acquired loan portfolio.

Improvement in Asset Quality Since Merger Announcement: The combined level of classified loans and loans past due 30 or more days for Legacy Wayne and Main Street was $24.4 million and $19.1 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 December 31, 2024, the resultant Company has $14.8 of classified loans and $13.8 of loans past due 30 or more days.

Total liabilities increased to $1.30 billion at December 31, 2024 with deposits totaling $1.16 billion and FHLB advances totaling $100.0 million. Deposits grew by $54.3 million, or 19.7% annualized, during the fourth quarter of 2024. As part of the merger, the Company acquired $487.4 million in deposits. As of December 31, 2024, the Company held no brokered deposits compared to $116.7 million at December 31, 2023. The Company leverages FHLB advances for short-term funding needs due to their accessibility and alignment with prevailing market rates. During the fourth quarter of 2024, the Company reduced the reliance on FHLB advances by $40 million.

Total stockholders’ equity was $110.6 million at December 31, 2024, an increase of $57.7 million when compared to the December 31, 2023 balance. The increase was primarily driven by the merger between Main Street and Wayne. Total stockholders’ equity decreased during the fourth quarter of 2024 primarily from a decrease in accumulated other comprehensive income of $4.7 million and dividends of $1.1 million, partially offset by net income of $3.2 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)
		December 31, 2024				December 31, 2023
ASSETS
Cash and cash equivalents		$	54,422			$	20,884
Securities, net (1)		163,819				86,405
Loans receivable, net		1,113,900				669,603
Federal Home Loan Bank stock		6,445				3,959
Premises & equipment, net		10,880				4,904
Bank-owned life insurance		22,155				11,706
Other assets		37,608				12,486
TOTAL ASSETS		$	1,409,229			$	809,947
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts		$	1,156,328			$	693,126
Other short-term borrowings		28,308				8,743
Federal Home Loan Bank advances		100,000				47,000
Accrued interest payable and other liabilities		13,957				8,111
TOTAL LIABILITIES		1,298,593				756,980
Common stock (7,801,011 shares of $1.00 par value issued)		7,801				398
Additional paid-in capital		56,387				36,715
Retained earnings		57,356				55,342
Treasury Stock, at cost – 0 shares and 1,777,824 shares at December 31, 2024 and December 31, 2023, respectively.		–				(30,330		)
Accumulated other comprehensive loss		(10,908		)		(9,158		)
TOTAL STOCKHOLDERS' EQUITY		110,636				52,967
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,409,229			$	809,947
(1) Includes available-for-sale and held-to-maturity classifications.
Note: The December 31, 2023 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								Twelve Months Ended
		December 31,								December 31,
			2024				2023				2024				2023
Interest income		$	19,138			$	9,545			$	60,334			$	35,095
Interest expense			8,531				4,330				27,665				12,920
Net interest income			10,607				5,215				32,669				22,175
Provision for credit losses			79				4				4,782				530
Net interest income after provision for credit losses			10,528				5,211				27,887				21,645
Non-interest income			1,165				1,017				4,158				3,017
Non-interest expense
Salaries and employee benefits			3,823				1,782				12,511				7,731
Net occupancy and equipment expense			1,430				625				4,399				2,431
Federal deposit insurance premiums			197				157				637				531
Franchise taxes			107				81				464				380
Advertising and marketing			237				44				645				223
Legal			143				15				651				45
Professional fees			260				74				1,924				239
ATM network			84				123				557				443
Auditing and accounting			130				60				516				240
Other			1,539				787				4,165				2,561
Total non-interest expense			7,950				3,748				26,469				14,824
Income before federal income taxes			3,743				2,480				5,576				9,838
Provision for federal income taxes			558				443				873				2,005
Net income		$	3,185			$	2,037			$	4,703			$	7,833
Earnings per share
Basic		$	0.41			$	0.46			$	0.76			$	3.56
Diluted		$	0.41			$	0.46			$	0.76			$	3.54

MAIN STREET FINANCIAL SERVICES CORP.
Selected Condensed Consolidated Financial Data
(Dollars in thousands, except share data – unaudited)
		December				September				June				March
			2024				2024				2024				2024
Interest and dividend income		$	19,138			$	18,930			$	12,572			$	9,694
Interest expense			8,531				8,308				6,185				4,641
Net interest income			10,607				10,622				6,387				5,053
Provision for credit losses			79				109				4,720				(126	)
Net interest income after provision for credit losses			10,528				10,513				1,666				5,179
Non-interest income			1,165				1,600				716				678
Non-interest expense			7,950				7,863				6,723				3,934
Income before federal income taxes			3,743				4,251				(4,341	)			1,923
Provision for federal income taxes			558				804				(873	)			384
Net income		$	3,185			$	3,446			$	(3,468	)		$	1,539
Earnings per share – basic		$	0.41			$	0.44			$	(0.68	)		$	0.40
Earnings per share – diluted		$	0.41			$	0.44			$	(0.67	)		$	0.40
Dividends per share		$	0.14			$	0.14			$	0.14			$	0.14
Return on average assets			0.90	%			1.00	%			-1.38	%			0.76	%
Return on average equity			11.69	%			12.58	%			-17.16	%			11.63	%
Shares outstanding at quarter end			7,801,011				7,801,011				7,787,055				3,840,575
Book value per share		$	14.18			$	14.27			$	13.60			$	13.81
Tangible equity per share		$	12.13			$	12.15			$	11.49			$	13.36
		December				September				June				March
			2023				2023				2023				2023
Interest and dividend income		$	9,545			$	9,078			$	8,571			$	7,901
Interest expense			4,330				3,673				2,867				2,050
Net interest income			5,215				5,405				5,704				5,851
Provision for credit losses			4				138				170				218
Net interest income after provision for credit losses			5,211				5,267				5,534				5,633
Non-interest income			1,017				691				706				603
Non-interest expense			3,748				3,733				3,949				3,394
Income before federal income taxes			2,480				2,225				2,291				2,842
Provision for federal income taxes			443				452				547				563
Net income		$	2,037			$	1,773			$	1,744			$	2,279
Earnings per share – basic		$	0.53			$	0.46			$	0.46			$	0.60
Earnings per share – diluted		$	0.53			$	0.46			$	0.45			$	0.59
Dividends per share		$	0.14			$	0.14			$	0.14			$	0.14
Return on average assets			1.02	%			0.91	%			0.92	%			1.23	%
Return on average equity			16.90	%			14.41	%			14.36	%			19.58	%
Shares outstanding at quarter end			3,839,702				3,837,609				3,837,085				3,831,939
Book value per share		$	13.80			$	12.40			$	12.64			$	12.51
Tangible equity per share		$	13.35			$	11.95			$	12.20			$	12.06

MAIN STREET FINANCIAL SERVICES CORP.
Non-GAAP reconciliation
(Dollars in thousands, except per share data – unaudited)
		For three months ended								For the twelve months ended
		December,								December,
			2024				2023				2024				2023
Net Income as reported – GAAP		$	3,185			$	2,037			$	4,703			$	7,833
Effect of merger related expenses (net of tax benefit)			26				353				5,769				950
Net Income non-GAAP		$	3,211			$	2,390			$	10,472			$	8,783
Earnings per share – GAAP		$	0.41			$	0.93			$	0.76			$	3.56
Effect of merger related expenses			0.00				0.16				0.94				0.43
Earnings per share non-GAAP		$	0.41			$	1.09			$	1.70			$	3.99
Return on average assets – GAAP			0.90	%			1.02	%			0.41	%			1.02	%
Effect of merger related expenses			0.01	%			0.18	%			0.50	%			0.12	%
Return on average assets non-GAAP			0.91	%			1.20	%			0.91	%			1.14	%
Return on average equity – GAAP			11.69	%			16.90	%			5.58	%			16.27	%
Effect of merger related expenses			0.09	%			2.93	%			6.84	%			1.97	%
Return on average equity non-GAAP			11.78	%			19.83	%			12.42	%			18.24	%
Efficiency Ratio – GAAP			67.54	%			60.14	%			71.87	%			58.42	%
Effect of merger related expenses			-0.22	%			-5.66	%			-6.73	%			-3.77	%
Efficiency Ratio non-GAAP			67.32	%			54.48	%			65.14	%			55.07	%

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