Why Middlefield Banc Stock Crushed It Today

It was an understatement to say that Wednesday was a busy and prosperous day for Middlefield Banc (NASDAQ: MBCN). The lender published its latest set of quarterly figures and announced it was merging with a peer. These happenings pushed its stock up by more than 17% on the day, contrasting very nicely with the S&P 500's (SNPINDEX: ^GSPC) 0.5% slump.

Banking on improvements

Middlefield, a regional banking and financial services company based in Ohio, took the wraps off its third-quarter and nine-month performance that morning.

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The numbers were pleasing. Total revenue rose by 18% year over year to $19.9 million, while generally accepted accounting principles (GAAP) net income more than doubled from $2.3 million to $5.3 million ($0.65 per share).

As for key balance sheet items, Middlefield's total loans and deposits both grew by 7% over that one-year stretch. They also both came in just above $1.6 billion.

In the press release detailing the quarter's results, Middlefield attributed the improvements to "steady" asset growth and its ability to improve margins, thanks in no small part to effective operating expense discipline.

Partnering up

The aforementioned peer, Farmers National Banc, was surely cheered by the results. After all, it's agreed to merge with Middlefield, as the two companies divulged Wednesday morning.

Under the terms of the all-stock deal, Middlefield will essentially be absorbed by Farmers, with its shareholders earning the right to receive 2.6 shares of Farmers for each share they hold. The two companies value the merger at $299 million, or $36.17 per each Middlefield share.

The merger has been unanimously approved by the boards of directors of both companies. It is subject to approval by shareholders of the two, plus the relevant regulatory authorities. Middlefield and Farmers expect the deal to close by the end of the first quarter of calendar 2026.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.