Middlefield Banc Corp. Reports Earnings for Third Quarter and Year-to-Date 2013

MIDDLEFIELD, Ohio, Oct. 31, 2013 /PRNewswire/ -- Middlefield Banc Corp. (OTCQB: MBCN) reported financial results for the three and nine months ended September 30, 2013.

Net income for the three month period ended September 30, 2013 was $1.9 million, compared to $1.8 million for the same period of 2012.  On a per share basis, net income for the third quarter of 2013 was $0.92 per diluted share, compared to $0.93 for the third quarter of 2012.  For the nine months ended September 30, 2013 net income was $5.2 million, while the net income for the comparable period of 2012 was $5.0 million.  On a per share basis, net income for the nine months ended September 30, 2013 was $2.58 per diluted share.  For the same period of 2012, net income per diluted share was $2.65.  

Annualized returns on average equity ("ROE") and average assets ("ROA") for the 2013 third quarter were 13.66% and 1.12%, respectively, compared with 16.57% and 1.12% for the third quarter of 2012.  ROE and ROA were 12.74% and 1.05%, respectively, for the nine month period of 2013.  Comparable results for the 2012 nine month period were 15.26% and 1.02%, respectively.

"We are pleased with our quarter and year-to-date results," stated Thomas G. Caldwell, President and Chief Executive Officer. "With an economy that is growing very slowly, we continue to encounter pockets of soft loan demand.  In response, our team has become even more cohesive and continues to develop strong relationships within our markets, while remaining mindful of the necessity of proper expense control.  To have been able to achieve these results during a period of continued economic and regulatory uncertainty is testament to our strong staff and keen community banking focus."

"Our diligence in maintaining our community banking focus is key to our success.  We will continue to expand our business development efforts to drive prudent asset growth.  We will remain firmly focused on delivering excellent customer service, increasing value to our shareholders, and operating our company under safe and sound banking principles," Caldwell concluded.

Net Interest Income

Net interest income for the 2013 third quarter of $5.8 million was 1.8% higher than the $5.7 million reported for the same quarter of 2012.  The 2013 nine month period saw net interest income of $17.0 million as compared to $16.9 million reported for the same period of 2012, an increase of 1.0%.  The net interest margin for the third quarter of 2013 increased 3 basis points to 4.05% compared to the 4.02% reported for the year-ago quarter.  The net interest margin for the 2013 nine month period was 4.03%, an 8 basis point increase from the 3.95% reported for 2012.

Noninterest Income and Operating Expenses

Noninterest income decreased for both the three and nine month periods.  The company experienced increases in revenue from deposit services charges and in other income which was offset by a decrease in the recognized gains on investment securities.  During the third quarter of 2012, a gain of $0.2 million related to the sale of certain investment securities was recognized.  In 2013 third quarter, no sales of securities took place.  The first nine months of 2013 saw the company report a gain on the sale of securities equal to $0.2 million, while the same period of 2012 had a gain on the sale of securities of $0.4 million.    

Noninterest expense for the third quarter of 2013 totaled $4.1 million, equaling the $4.1 million reported for the third quarter of 2012.  Increases in salaries and employee benefits, occupancy, equipment expense and professional fees were nearly equally matched by reductions in Federal deposit insurance premiums and the recognition of a gain on the disposition of other real estate owned.  For the first nine months of 2013, total noninterest expense of $12.1 million was $0.1 million more than the 2012 comparable period.  The primary factors were nearly consistent with those of the third quarter.    

Balance Sheet

The company's total assets at September 30, 2013 stood at $658.1 million, a decrease of $12.1 million, or 1.8%, from the figure reported at December 31, 2012.  Net loans at September 30, 2013 were $411.2 million, representing an increase of $10.6 million, or 2.6%, over the year-end 2012 position.  Total deposits stood at $579.2 million as of September 30, 2013.  This figure represents a decrease of $14.1 million, or 2.4%, from year-end 2012.  The investment portfolio, which is entirely classified as available for sale, was $180.8 million at September 30, 2013.  This reflects a decrease of $13.7 million from December 31, 2012, with the funds being utilized for loan growth and deposit run-off.  

Shareholders' Equity and Dividends

At September 30, 2013, shareholders' equity totaled $52.5 million, a decrease of $2.9 million, or 5.2%, from the $55.4 million reported at December 31, 2012, and a decrease of $2.6 million, or 4.6%, from the September 30, 2012 figure of $55.1 million.  This change primarily results from certain mark-to-market adjustments in securities available for sale due to increases in long-term interest rates, offset by an increase in retained earnings.  Tangible book value per share at September 30, 2013 was $23.59.  The comparable figure at September 30, 2012, was $25.37.  The decrease in tangible book value per share was also the result of the aforementioned mark-to-market adjustments in securities available for sale.  Shareholders received a cash dividend of $0.26 per share in the third quarter of both 2013 and 2012.   

Asset Quality    

For the three months ended September 30, 2013, management added $0.2 million to the allowance for loan losses, which compares to $0.1 million for the same period of 2012.  The comparable nine month figures are $0.8 million for 2013 and $1.2 million for 2012.  Net charge-offs for the first nine months of 2013 were $0.7 million, or 0.23% of average loans.  Figures for the comparable period of 2012 were $0.8 million and 0.28% of average loans, respectively.  The allowance for loan losses at September 30, 2013 stood at $7.8 million, or 1.87% of total loans.  At September 30, 2012, the allowance for loan losses was $7.2 million, representing 1.75% of total loans. 

The following table provides a summary of asset quality and allowance for loan loss coverage ratios.

 



Asset Quality History



















(dollars in thousands)




















9/30/2013



12/31/2012



9/30/2012



12/31/2011



12/31/2010

















Nonperforming loans


$

13,607


$

14,194


$

15,404


$

24,546


$

19,986

Real estate owned



2,719



1,846



2,332



2,196



2,302

















Nonperforming assets


$

16,326


$

16,040


$

17,736


$

26,742


$

22,288

















Allowance for loan losses


$

7,821


$

7,779


$

7,173


$

6,819


$

6,221

















Ratios:
















Nonperforming loans to
















  total loans



3.25%



3.48%



3.76%



6.12%



5.37%

Nonperforming assets to
















  total assets



2.48%



2.39%



2.67%



4.09%



3.52%

Allowance for loan losses to
















  total loans



1.87%



1.90%



1.75%



1.70%



1.67%

Allowance for loan losses to
















  nonperforming loans



57.48%



54.80%



46.57%



27.78%



31.13%

 

Middlefield Banc Corp. headquartered in Middlefield, Ohio is a multi-bank holding company with total assets of $658.1 million.  The company's lead bank, The Middlefield Banking Company, operates full service banking centers and a LPL Financial® brokerage office serving Chardon, Cortland, Garrettsville, Mantua, Middlefield, Newbury, and Orwell.  The company also serves the central Ohio market through its Emerald Bank subsidiary, with offices in Dublin and Westerville, Ohio.  Additional information is available at www.middlefieldbank.com and www.emeraldbank.com

This press release of Middlefield Banc Corp. and the reports Middlefield Banc Corp. files with the Securities and Exchange Commission often contain "forward-looking statements" relating to present or future trends or factors affecting the banking industry and, specifically, the financial operations, markets and products of Middlefield Banc Corp.  These forward-looking statements involve certain risks and uncertainties.  There are a number of important factors that could cause Middlefield Banc Corp.'s future results to differ materially from historical performance or projected performance.  These factors include, but are not limited to: (1) a significant increase in competitive pressures among financial institutions; (2) changes in the interest rate environment that may reduce interest margins; (3) changes in prepayment speeds, charge-offs and loan loss provisions; (4) less favorable than expected general economic conditions; (5) legislative or regulatory changes that may adversely affect businesses in which Middlefield Banc Corp. is engaged; (6) technological issues which may adversely affect Middlefield Banc Corp.'s financial operations or customers; (7) changes in the securities markets; or (8) risk factors mentioned in the reports and registration statements Middlefield Banc Corp. files with the Securities and Exchange Commission.  Middlefield Banc Corp. undertakes no obligation to release revisions to these forward-looking statements or to reflect events or circumstances after the date of this press release.   

 

Contact:   James R. Heslop, 2nd 
               Executive Vice President/Chief Operating Officer 
               (440) 632-1666 Ext. 3219 
               jheslop@middlefieldbank.com

 

MIDDLEFIELD BANC CORP.







Consolidated Selected Financial Highlights

















September 30, 2013 and 2012 and December 31, 2012










(unaudited)






(unaudited)

Balance Sheet (period end)



September 30,



December 31,



September 30,

(Dollar amounts in thousands)



2013



2012



2012











Assets










Cash and due from banks


$

21,124


$

33,568


$

32,735

Federal funds sold



11,069



11,778



19,871

   Cash and cash equivalents



32,193



45,346



52,606

Investment securities available for sale



180,771



194,473



179,140

Loans:



419,060



408,433



409,175

Less:  reserve for loan losses



7,821



7,779



7,173

      Net loans



411,239



400,654



402,002

Premises and equipment



8,555



8,670



8,701

Goodwill



4,559



4,559



4,559

Core deposit intangible



161



195



215

Bank-owned life insurance



8,745



8,536



8,465

Accrued interest receivable and other assets



11,918



7,855



8,493

Total Assets


$

658,141


$

670,288


$

664,181














September 30,



December 31,



September 30,




2013



2012



2012

Liabilities and Stockholders' Equity










Noninterest-bearing demand deposits


$

81,760


$

75,912


$

70,505

Interest-bearing demand deposits



59,799



63,915



65,164

Money market accounts



77,118



81,349



72,831

Savings deposits



179,581



175,406



174,273

Time deposits



180,964



196,753



201,965

   Total Deposits



579,222



593,335



584,738

Short-term borrowings



10,575



6,538



6,518

Federal funds purchased



1,639



-



-

Other borrowings



12,261



12,970



15,836

Accrued interest and other liabilities



1,915



2,008



2,003

   Total Liabilities



605,612



614,851



609,095











Common equity



34,833



34,295



34,082

Retained earnings



26,123



22,485



21,736

Accumulated other comprehensive income (loss)


(1,693)



5,391



6,002

Treasury stock



(6,734)



(6,734)



(6,734)

   Total Stockholders' Equity



52,529



55,437



55,086











Total Liabilities and Stockholders' Equity


$

658,141


$

670,288


$

664,181

 

MIDDLEFIELD BANC CORP.













Consolidated Selected Financial Highlights












September 30, 2013 and 2012













(Dollar amounts in thousands)













(unaudited)
















For the Three Months Ended



For the Nine Months Ended




September 30,



September 30,




2013



2012



2013



2012

INTEREST INCOME













   Interest and fees on loans


$

5,754


$

5,810


$

16,876


$

16,988

   Interest-bearing deposits in other institutions



6



7



23



19

   Federal funds sold



4



6



12



13

   Investment securities













      Taxable interest



610



749



1,909



2,455

      Tax-exempt interest



782



749



2,259



2,249

   Dividends on FHLB Stock



18



21



56



73

      Total interest income



7,174



7,342



21,135



21,797

INTEREST EXPENSE













   Deposits



1,170



1,418



3,686



4,349

   Short-term borrowings



41



61



140



219

   Other borrowings



42



78



132



244

   Trust preferred securities



75



45



156



122

      Total interest expense



1,328



1,602



4,114



4,934














NET INTEREST INCOME



5,846



5,740



17,021



16,863














Provision for loan losses



153



143



766



1,193

NET INTEREST INCOME AFTER PROVISION












   FOR LOAN LOSSES



5,693



5,597



16,255



15,670

NONINTEREST INCOME













   Service charges on deposits



510



481



1,468



1,383

   Earnings on bank-owned life insurance



66



71



209



208

   Other income



232



164



643



555

   Gain on sale of loans



-



-



-



85

   Net securities gains



-



152



175



448

      Total non-interest income



808



868



2,495



2,679

NONINTEREST EXPENSE













   Salaries and employee benefits



1,872



1,705



5,649



5,255

   Occupancy expense



273



233



795



703

   Equipment expense



228



186



603



557

   Data processing costs



209



184



609



574

   Ohio state franchise tax



164



160



467



417

   Federal deposit insurance expense



135



250



353



751

   Professional fees



316



270



883



670

   (Gain)Loss on sale of other real estate owned



(35)



188



(40)



238

   Other operating expense



953



946



2,745



2,780

      Total non-interest expense



4,115



4,122



12,064



11,945














Income before income taxes



2,386



2,343



6,686



6,404

Provision for income taxes



521



494



1,479



1,392

NET INCOME


$

1,865


$

1,849


$

5,207


$

5,012

 

MIDDLEFIELD BANC CORP.













Consolidated Selected Financial Highlights















(unaudited)



(unaudited)



(unaudited)



(unaudited)




For the Three Months Ended



For the Nine Months Ended




September 30,



September 30,




2013



2012



2013



2012

Per common share data













Net income per common share - basic


$

0.92


$

0.93


$

2.59


$

2.66

Net income per common share - diluted


$

0.92


$

0.93


$

2.58


$

2.65

Dividends declared


$

0.26


$

0.26


$

0.78


$

0.78

Book value per share(period end)


$

25.92


$

27.77


$

25.92


$

27.77

Tangible book value per share (period end)


$

23.59


$

25.37


$

23.59


$

25.37

Dividend payout ratio



27.99%



27.80%



30.13%



29.57%

Average shares outstanding - basic



2,022,490



1,978,181



2,013,217



1,887,497

Average shares outstanding -diluted



2,029,420



1,983,863



2,021,198



1,891,733

Period ending shares outstanding



2,026,569



1,983,404



2,026,569



1,983,404














Selected ratios













Return on average assets



1.12%



1.12%



1.05%



1.02%

Return on average equity



13.66%



16.57%



12.74%



15.26%

Yield on earning assets



4.92%



5.07%



4.93%



5.03%

Cost of interest-bearing liabilities



1.01%



1.20%



1.04%



1.23%

Net interest spread



3.91%



3.87%



3.89%



3.79%

Net interest margin



4.05%



4.02%



4.03%



3.95%

Efficiency (1)



58.31%



58.94%



57.31%



57.70%

Tier 1 capital ratio



8.70%



7.92%



8.70%



7.92%














(1)  The efficiency ratio is calculated by dividing non-interest expense less amortization of intangibles by the sum of net interest

      income on a fully taxable equivalent basis plus non-interest income.

 

MIDDLEFIELD BANC CORP.







Consolidated Selected Financial Highlights


(unaudited)



(unaudited)




September 30,



September 30,

Asset quality data



2013



2012

(Dollar amounts in thousands)







Nonaccrual loans


$

9,223


$

13,135

Troubled debt restructuring



3,621



2,173

90 days past due and accruing



764



96

Nonperforming loans



13,607



15,404

Other real estate owned



2,719



2,332

Nonperforming assets


$

16,326


$

17,736















Allowance for loan losses


$

7,821


$

7,173

Allowance for loan losses/total loans



1.87%



1.75%

Net charge-offs:







   Quarter-to-date


$

81


$

722

   Year-to-date



724



839

Net charge-offs to average loans (annualized)







   Quarter-to-date



0.08%



0.72%

   Year-to-date



0.23%



0.28%

Nonperforming loans/total loans



3.25%



3.76%

Allowance for loan losses/nonperforming loans



57.48%



46.57%


















September 30,



September 30,

Loans



2013



2012

(Dollar amounts in thousands)







Commercial and industrial


$

50,265


$

65,323

Real estate - construction



25,487



21,322

Real estate - mortgage







   Residential



203,312



205,433

   Commercial



135,760



112,867

Consumer installment



4,236



4,230

Total Loans


$

419,060


$

409,175

 

SOURCE Middlefield Banc Corp.



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