Middlefield Banc Corp. Reports First Quarter 2013 Net Income of $1.66 Million

MIDDLEFIELD, Ohio, April 23, 2013 /PRNewswire/ -- Middlefield Banc Corp. (OTCQB:  MBCN), reported net income of $1.66 million for the quarter ended March 31, 2013, compared to $1.52 million for the quarter ended March 31, 2012, an increase of 8.8%.  On a per share basis, the Company's diluted earnings were $0.82 for the 2013 first quarter, as compared to $0.86 for the comparable period of 2012.

Annualized returns on average equity ("ROE") and average assets ("ROA") for the 2013 quarter were 12.18% and 1.01%, respectively, compared with 12.81% and 0.94% for the first quarter of 2012.

"Our first quarter results continue the strong performance that we enjoyed in 2012.  To be able to continue to post this level of success is even more remarkable given the economic and regulatory environment that continues to present a great challenge," stated Thomas G. Caldwell, President and Chief Executive Officer.  "Our return on average assets of 1.01% and return on average equity of 12.18% reflect well on the effort put forth by our team."

"As we move forward into 2013, we continue to believe that we are well positioned to address the threats of continued sluggish economy, historically low interest rates, and increased regulatory costs," continued Caldwell.  Our focus remains on delivering excellence in customer service, increasing value to our shareholders, and operating our company in accordance with safe and sound banking practices."     

Net Interest Income

For the first three months of 2013, net interest income increased $39,000, or 0.7% from the same period last year.  While interest income experienced a decline of $218,000, or 3.0%, interest expense was $257,000, or 15.2%, lower in the 2013 quarter as compared to the same period of 2012.  The net interest margin for the three months ended March 31, 2013 was 3.92%, compared to 3.89% for the same period of the prior year.

Noninterest Income and Operating Expenses

Noninterest income for the first quarter of 2013 was $898,000.  This was a modest increase of 13.1% from the comparable period of 2012.  The largest factor in the increase was the recognition of $185,000 due to gains on the sale of securities.  A partial off-set was the gain recognized during the 2012 quarter of $85,000 from the sale of loans.  Deposit service charges increased year-over-year, primarily due to increased debit card usage and a greater amount of overdraft fees.     

Operating expense for the first quarter of 2013 totaled $4.0 million, an increase of $249,000, or 6.6% from the same period last year.  Salaries and benefits, the company's largest noninterest expense, contributed $121,000 to the increase.  This increase is largely related to the growth of the company, including increased staffing levels in regulatory compliance.  Higher data processing costs and equipment expense were directly related to the growth of the company since the first quarter of 2012.  The increase in professional fees is, in part, attributable to the negotiation of a new data processing contract and increased regulatory compliance efforts, while the company also incurred increased expenses related to the maintenance of other real estate owned properties. 

Balance Sheet

The company's total assets as of March 31, 2013 stood at $667.0 million, an increase of 1.4% over the $657.9 million in total assets reported March 31, 2012.  The March 31, 2013 total does reflect a decrease of 0.5% from the December 31, 2012 total.  Net loans at March 31, 2013, were $399.3 million, up $2.3 million from the comparable 2012 quarter-end.  Net loan totals were down 0.3% during the first three months of 2013.  The investment portfolio, which is entirely classified as available for sale, stood at $190.7 million at March 31, 2013.  This total reflects an increase of $6.9 million from the year-ago period and a decrease of $3.8 million from December 31, 2012.  Total deposits at the end of the first quarter 2013 were $591.5 million.  This represents an increase of $7.6 million from March 31, 2012 and a decrease of $1.8 million from year-end 2012.  

Shareholders' Equity and Dividends   

At March 31, 2013, shareholders' equity totaled $55.9 million, which was an increase of $7.4 million from the comparable 2012 quarter-end and $400,000 from December 31, 2012.  Tangible book value per share as of March 31, 2013 was $25.35.  During the first quarter of both 2013 and 2012, Middlefield paid cash dividends of $0.26 per share.

Asset Quality

For the three months ended March 31, 2013, management provided $313,000 to the allowance for loan losses, which compares to $600,000 for the same period of 2012.  Net charge-offs for the 2013 first quarter were $360,000, or 0.09% of average loans.  The allowance for loan losses at March 31, 2013 stood at $7.7 million, or 1.90% of total loans.  At March 31, 2012, the allowance for loan losses was $7.3 million, representing 1.80% of total loans.  Based on the evaluation of the adequacy of the allowance for loan losses, management believes that, at March 31, 2013, the allowance for loan losses was adequate and reflects probable losses in the loan portfolio.


Asset Quality History

















(dollars in thousands)


















3/31/2013



12/31/2012



3/31/2012



12/31/2011



12/31/2010
















Nonperforming loans

$

13,899


$

14,194


$

17,677


$

24,546


$

19,986

Real estate owned


2,155



1,846



2,125



2,196



2,302
















Nonperforming assets

$

16,054


$

16,040


$

19,802


$

26,742


$

22,288
















Allowance for loan losses

$

7,732


$

7,779


$

7,267


$

6,819


$

6,221
















Ratios:















Nonperforming loans to















  total loans


3.41%



3.48%



4.37%



6.12%



5.37%

Nonperforming assets to















  total assets


2.41%



2.39%



3.01%



4.09%



3.52%

Allowance for loan losses to















  total loans


1.90%



1.90%



1.80%



1.70%



1.67%

Allowance for loan losses to















  nonperforming loans


55.63%



54.80%



41.11%



27.78%



31.13%

Middlefield Banc Corp. headquartered in Middlefield, Ohio is a multi-bank holding company with total assets of $667.0 million.  The company's lead bank, The Middlefield Banking Company, operates full service banking centers and an 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.   

 

Middlefield Banc Corp.









Consolidated Selected Financial Highlights


















March 31, 2013 and 2012 and December 31, 2012











 (unaudited)



 (audited)



 (unaudited)

Balance Sheet (period end)


 March 31,



 December 31,



 March 31,

(Dollar amounts in thousands)


2013



2012



2012










ASSETS









   Cash and due from banks

$

32,426


$

33,568


$

22,022

   Federal funds sold


13,204



11,778



23,587

      Cash and cash equivalents


45,630



45,346



45,609

   Investment securities available for sale


190,687



194,472



183,770

   Loans


407,054



408,433



404,269

   Less allowance for loan losses


7,732



7,779



7,267

      Net loans


399,322



400,654



397,002

   Premises and equipment


8,694



8,670



8,368

   Goodwill


4,559



4,559



4,559

   Core deposit intangible


184



195



225

   Bank-owned life insurance


8,604



8,536



8,326

   Accrued interest and other assets


9,294



7,856



10,090










Total Assets

$

666,974


$

670,288


$

657,949










LIABILITIES









   Noninterest-bearing demand

$

73,354


$

75,912


$

64,517

   Interest-bearing demand


68,060



63,915



63,509

   Money market


80,051



81,349



71,047

   Savings


181,872



175,406



172,236

   Time


188,160



196,753



212,633

      Total deposits


591,497



593,335



583,942

   Short-term borrowings


5,240



6,538



7,365

   Other borrowings


12,779



12,970



16,561

   Other liabilities


1,608



2,008



1,622

     Total Liabilities


611,124



614,851



609,490










STOCKHOLDERS' EQUITY









   Common stock


34,697



34,295



31,420

   Retained earnings


23,622



22,485



19,272

   Accumulated other comprehensive income


4,265



5,391



4,501

   Treasury stock


(6,734)



(6,734)



(6,734)

     Total Stockholders' Equity


55,850



55,437



48,459










Total Liabilities and Stockholders' Equity

$

666,974


$

670,288


$

657,949










 

 

MIDDLEFIELD BANC CORP.






Consolidated Selected Financial Highlights






March 31, 2013 and 2012 (unaudited)







For the Three Months Ended

Income Statement

March 31,

(Dollar amounts in thousands)


2013



2012







INTEREST INCOME






     Interest and fees on loans

$

5,572


$

5,537

     Interest-bearing deposits in other institutions


8



4

     Federal funds sold


4



3

     Investment securities:






          Taxable interest


674



915

          Tax-exempt interest


733



747

     Dividends on FHLB stock


23



26

                   Total interest income


7,014



7,232







INTEREST EXPENSE






     Deposits


1,297



1,497

     Short term borrowings


52



59

     Other borrowings


46



84

     Trust preferred securities


34



46

                   Total interest expense


1,429



1,686







NET INTEREST INCOME


5,585



5,546







Provision for loan losses


313



600







NET INTEREST INCOME AFTER






   PROVISION FOR LOAN LOSSES


5,272



4,946







NONINTEREST INCOME






     Service charges on deposit accounts


447



431

     Net securities gains


185



-

     Earnings on bank-owned life insurance


73



68

     Gain on sale of loans


-



85

     Other income


193



210

                    Total noninterest income


898



794







NONINTEREST EXPENSE






     Salaries and employee benefits


1,871



1,750

     Occupancy expense


274



248

     Equipment expense


189



170

     Data processing costs


213



199

     Ohio state franchise tax


154



129

     Federal deposit insurance expense


154



243

     Professional fees


276



214

     (Gain) Loss on sale of other real estate owned


8



18

     Advertising expense


112



20

     Other real estate


106



10

     Other expense


674



781

                    Total noninterest expense


4,031



3,782







Income before income taxes


2,139



1,958

Income taxes


482



435

NET INCOME

$

1,657


$

1,523

 

MIDDLEFIELD BANC CORP.




Consolidated Selected Financial Highlights




March 31, 2013 and 2012




(unaudited)





For the Three Months Ended


March 31,



2013



2012

Per common share data






Net income per common share - basic

$

0.83


$

0.86

Net income per common share - diluted

$

0.82


$

0.86

Dividends declared

$

0.26


$

0.26

Book value per share (period end)

$

27.70


$

27.35

Tangible book value per share (period end)

$

25.35


$

24.78

Dividend payout ratio


31.38%



30.01%

Average shares outstanding - basic


1,999,612



1,763,982

Average shares outstanding -diluted


2,010,259



1,764,585

Period ending shares outstanding


2,016,284



1,771,687







Selected ratios






Return on average assets


1.01%



0.94%

Return on average equity


12.18%



12.81%

Yield on earning assets


4.86%



4.99%

Cost of interest bearing liabilities


1.09%



1.26%

Net interest spread


3.77%



3.74%

Net interest margin


3.92%



3.89%

Efficiency (1)


58.75%



56.24%

Equity to assets at period end


8.37%



7.37%







(1)  The efficiency ratio is calculated by dividing noninterest 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




March 31, 2013 and 2012




(unaudited)












 March 31,



 March 31,

Asset quality data


2013



2012

(Dollar amounts in thousands)












Non-accrual loans

$

9,730


$

15,641

Troubled debt restructuring


3,808



926

90 day past due and accruing


361



1,110

Nonperforming loans


13,899



17,677

Other real estate owned


2,155



2,125

Nonperforming assets

$

16,054


$

19,802







Allowance for loan losses

$

7,732


$

7,267

Allowance for loan losses/total loans


1.90%



1.80%

Net charge-offs:






   Quarter-to-date

$

360


$

152

   Year-to-date


360



152

Net charge-offs to average loans






   Quarter-to-date


0.09%



0.04%

   Year-to-date


0.09%



0.04%

Nonperforming loans/total loans


3.41%



4.37%

Allowance for loan losses/non-performing loans


55.63%



41.11%















 March 31,



 March 31,

Loans


2013



2012

(Dollar amounts in thousands)












Commercial and industrial

$

55,401


$

60,924

Real estate - construction


22,817



21,444

Real estate - mortgage






   Residential


199,063



207,735

   Commercial


125,799



109,941

Consumer installment


3,974



4,225

Total Loans

$

407,054


$

404,269

 

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

SOURCE Middlefield Banc Corp.



RELATED LINKS
http://www.middlefieldbank.com

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