2014

Middlefield Banc Corp. Reports Second Quarter 2011 Results

MIDDLEFIELD, Ohio, Aug. 4, 2011 /PRNewswire/ -- Middlefield Banc Corp. (OTCQB: MBCN) today announced results for the second quarter of 2011.  Net income totaled $720,000 for the quarter ended June 30, 2011, representing earnings per diluted share of $0.44.  In comparison, earnings per diluted share were $0.45, on net income of $715,000, for the second quarter of 2010.

Net income for the first six months of 2011 was $1,722,000 or $1.10 per diluted share.  For the same period of 2010, net income of $1,360,000 equated to $0.87 per diluted share.

Annualized returns on average equity ("ROE") and average assets ("ROA") for the 2011 second quarter were 7.22% and 0.45%, respectively, compared with 7.48% and 0.47% for the second quarter of 2010.  ROE and ROA were 8.89% and 0.55%, respectively, for the six month period of 2011.  Comparable results for the 2010 six month period were 7.27% and 0.46%, respectively.

"We are pleased with our earnings position for the second quarter of 2011," stated Thomas G. Caldwell, President and Chief Executive Officer, "This is especially true as we seek to navigate through a very uncertain economic environment."

"We remain cautiously optimistic that a transition in that environment will begin near the end of 2011.  We will continue to 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.

For the second quarter of 2011, net interest income increased $531,000, or 11.6% from the same period last year.  A decrease of $369,000 in interest on deposits was the leading factor in this improvement.  Similarly, for the first six months of 2011, net interest income was $1,494,000 above the figure reported for the 2010 first half.  An increase of $524,000 in interest income coupled with a decrease in interest expense of $970,000 were the components of the shift.

The net interest margin for the three months ended June 30, 2011 was 3.64% compared to 3.49% for the same period of 2010.  For the six month periods, the net interest margin for 2011 was 3.66%, with 2010 being 3.39%.

"Our net interest margin continues to show positive movement," commented Donald L. Stacy, Chief Financial Officer.  "However, the challenges relative to consistent net interest margin improvement are far from over.  The Fed's policy of maintaining a continued low rate environment has led to aggressive pricing on the part of many of our competitors."

For the three months ended June 30, 2011, management added $700,000 to the allowance for loan losses, being only a slight increase from the $690,000 recorded for the same period the prior year.  The comparable six months figures are $1,565,000 for 2011 and $1,129,000 for 2010.  The increased loan loss provision on a year-to-date basis for 2011 was related to a higher level of charge-offs and an increase in the general allocation for loan losses.  Net charge-offs for 2011 were $759,000, or 0.20% of average loans.  The allowance for loan losses at June 30, 2011 stood at $7,027,000, or 1.82% of total loans.  At June 30, 2010, the allowance for loan losses was $5,834,000, representing 1.60% of total loans.  

Noninterest income for the second quarter of 2011 was $594,000, and continues to be tempered by certain regulatory changes including those mandated by the Dodd-Frank Act.  The first half of 2011 saw the company report noninterest income of $1,293,000, down only $1,000 from the prior year.    

Noninterest expense for the second quarter of 2011 totaled $4,292,000, an increase of $464,000, from the same period last year.  The two largest components of this increase were salaries and benefits, which was up $231,000, and loss on the sale of other real estate owned of $230,000.  The increased employee costs reflect increased headcounts, primarily related to special assets/collections, credit analysis, and regulatory compliance.  For the first half of 2011, total noninterest expense of $7,997,000 was $611,000 above the 2010 comparable period.  

Balance Sheet Growth

The company's total assets as of June 30, 2011 stood at $639.6 million, an increase of 1.2% over the $632.2 million in total assets reported at December 31, 2010.  Net loans at June 30, 2011, were $378.3 million, up $12.0 million, or 3.3%, over the $366.3 million reported at December 31, 2010.  Total deposits at the end of the second quarter 2011 were $569.7 million or 0.8% greater than the deposit level of $566.3 million at December 31, 2010.  Stockholders' equity at June 30, 2011, was $42.3 million.  Book value per share as of June 30, 2011, was $25.58.

Dividends    

During the second quarter of both 2011 and 2010, Middlefield paid cash dividends of $0.26 per share.

Middlefield Banc Corp. headquartered in Middlefield, Ohio is a multi-bank holding company with total assets of $639.6 million.  The company's lead bank, The Middlefield Banking Company, operates full service banking centers and a UVEST Financial Services® 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


June 30, 2011 and 2010 and December 31, 2010




(unaudited)






(unaudited)




Balance Sheet (period end)



June 30,



December 31,



June 30,




(Dollar amounts in thousands)



2011



2010



2010

















Assets













Cash and due from banks


$

15,540


$

10,473


$

15,065




Federal funds sold



19,364



20,162



22,152




Interest-bearing deposits in other institutions



-



-



124




  Cash and cash equivalents



34,904



30,635



37,341




Investment securities available for sale



193,821



201,772



178,963




Loans:



385,339



372,498



364,762




Less:  reserve for loan losses



7,027



6,221



5,834




     Net loans



378,312



366,277



358,928




Premises and equipment



7,939



8,179



8,360




Goodwill



4,559



4,559



4,559




Bank-owned life insurance



8,118



7,979



7,839




Accrued interest receivable and other assets



11,921



12,796



10,949




Total Assets


$

639,574


$

632,197


$

606,939




















June 30,



December 31,



June 30,







2011



2010



2010




Liabilities and Stockholders' Equity













Non-interest bearing demand deposits


$

58,219


$

53,391


$

51,118




Interest bearing demand deposits



55,315



48,869



40,055




Money market accounts



74,482



71,105



65,275




Savings deposits



160,141



146,993



131,818




Time deposits



221,588



244,893



244,829




  Total Deposits



569,745



565,251



533,095




Short-term borrowings



6,787



7,632



7,201




Other borrowings



18,694



19,321



25,040




Accrued interest and other liabilities



2,045



1,971



1,995




  Total Liabilities



597,271



594,175



567,331

















Common equity



29,485



28,429



28,201




Retained earnings



16,712



15,840



15,504




Accumulated other comprehensive income



2,840



487



2,637




Treasury stock



(6,734)



(6,734)



(6,734)




  Total Stockholders' Equity



42,303



38,022



39,608

















Total Liabilities and Stockholders' Equity


$

639,574


$

632,197


$

606,939


























































MIDDLEFIELD BANC CORP.

Consolidated Selected Financial Highlights

June 30, 2011 and 2010

(Dollar amounts in thousands)

(unaudited)




For the Three Months Ended



For the Six Months Ended




June 30,



June 30,




2011



2010



2011



2010

INTEREST INCOME













  Interest and fees on loans


$

5,399


$

5,299


$

10,700


$

10,396

  Interest-bearing deposits in other institutions



2



3



4



7

  Federal funds sold



4



12



13



23

  Investment securities













     Taxable interest



1,289



1,339



2,612



2,542

     Tax-exempt interest



702



647



1,400



1,239

  Dividends on FHLB Stock



25



32



51



49

     Total interest income



7,421



7,332



14,780



14,256

INTEREST EXPENSE













  Deposits



2,004



2,373



4,041



4,858

  Short term borrowings



59



62



118



120

  Other borrowings



104



183



213



373

  Trust preferred securities



137



128



273



264

     Total interest expense



2,304



2,746



4,645



5,615














NET INTEREST INCOME



5,117



4,586



10,135



8,641














Provision for loan losses



700



690



1,565



1,129

NET INTEREST INCOME AFTER PROVISION












  FOR LOAN LOSSES



4,417



3,896



8,570



7,512

NONINTEREST INCOME













  Service charges on deposits



416



433



844



848

  Earnings on bank-owned life insurance



66



65



139



132

  Other income



149



169



332



287

  Net securities gains (losses)



(37)



18



(22)



27

     Total non-interest income



594



685



1,293



1,294

NONINTEREST EXPENSE













  Salaries and employee benefits



1,944



1,713



3,634



3,224

  Occupancy expense



223



217



495



493

  Equipment expense



155



204



313



402

  Data processing costs



173



172



353



415

  Ohio state franchise tax



97



134



225



270

  FDIC assessment



272



190



497



392

  Professional fees



185



188



396



380

  Loss on sale of other real estate owned



323



93



303



214

  Other operating expense



920



917



1,781



1,596

     Total non-interest expense



4,292



3,828



7,997



7,386














Income before income taxes



719



753



1,866



1,420

Provision for income taxes



(1)



38



144



60

NET INCOME


$

720


$

715


$

1,722


$

1,360






























(unaudited)



(unaudited)



(unaudited)



(unaudited)



For the Three Months Ended


For the Six Months Ended




June 30,



June 30,




2011



2010



2011



2010

Per common share data













Net income per common share - basic


$

0.44


$

0.46


$

1.10


$

0.87

Net income per common share - diluted


$

0.44


$

0.45


$

1.10


$

0.87

Dividends declared


$

0.26


$

0.26


$

0.52


$

0.52

Book value per share(period end)


$

25.58


$

25.10


$

25.58


$

25.10

Tangible book value per share (period end)


$

22.82


$

22.21


$

22.82


$

22.21

Dividend payout ratio



56.94%



57.06%



49.36%



60.00%

Average shares outstanding - basic



1,647,771



1,570,852



1,568,168



1,568,168

Average shares outstanding -diluted



1,647,920



1,572,084



1,568,243



1,569,742

Period ending shares outstanding



1,653,660



1,577,771



1,653,660



1,577,771














Selected ratios













Return on average assets



0.45%



0.47%



0.55%



0.46%

Return on average equity



7.22%



7.48%



8.89%



7.27%

Yield on earning assets



5.17%



5.44%



5.23%



5.44%

Cost of interest bearing liabilities



1.71%



2.15%



1.74%



2.25%

Net interest spread



3.36%



3.29%



3.49%



3.19%

Net interest margin



3.64%



3.49%



3.66%



3.39%

Efficiency (1)



70.68%



68.30%



65.82%



69.86%

Equity to assets at period end



6.61%



6.53%



6.61%



6.53%














(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.













June 30,



June 30,

Asset quality data



2011



2010

(Dollar amounts in thousands)







Non-accrual loans


$

19,155


$

19,817

Troubled debt restructuring



3,198



-

90 days past due and accruing



116



236

Non-performing loans



22,469



20,053

Other real estate owned



2,145



1,886

Non-performing assets


$

24,614


$

21,939















Allowance for loan losses


$

7,027


$

5,834

Allowance for loan losses/total loans



1.82%



1.60%

Net charge-offs:







  Quarter-to-date


$

358


$

135

  Year-to-date



759



232

Net charge-offs to average loans







  Quarter-to-date



0.09%



0.04%

  Year-to-date



0.20%



0.06%

Non-performing loans/total loans



5.83%



5.50%

Allowance for loan losses/non-performing loans



31.27%



29.09%



SOURCE Middlefield Banc Corp.



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http://www.middlefieldbank.com

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