2014

Middlefield Banc Corp. Reports Strong Earnings Increase for First Quarter

MIDDLEFIELD, Ohio, May 5, 2011 /PRNewswire/ -- Middlefield Banc Corp. (OTCQB:  MBCN), reported net income of $1.002 million for the quarter ended March 31, 2011, compared to $645,000 for the quarter ended March 31, 2010, an increase of 55.3%.  On a per share basis, the Company's diluted earnings were $0.62 for the 2011 first quarter, as compared to $0.41 for the comparable period of 2010.

Annualized returns on average equity ("ROE") and average assets ("ROA") for the 2011 quarter were 10.50% and 0.63%, respectively, compared with 7.06% and 0.45% for the first quarter of 2010.

For the first quarter of 2011, net interest income increased $963,000, or 23.7% from the same period last year.  The increase was nearly equally attributable to an increase in interest income and a decrease in interest expense.  Comparing the first quarter of 2011 to the first quarter of 2010, interest income increased $435,000, or 6.3%.  For the same period, interest expense decreased $528,000, a change of 18.4%.  The net interest margin for the three months ended March 31, 2011 was 3.68%, compared to 3.29% for the same period of the prior year.

For the three months ended March 31, 2011, management provided $865,000 to the allowance for loan losses, an increase of $426,000 from the same period the prior year.  The higher provision was related to a higher level of charge-offs and for an increase in the general allocation for loan losses.  Net charge-offs for the 2011 first quarter were $401,000, or 0.11% of average loans.  The allowance for loan losses at March 31, 2011 stood at $6.685 million, or 1.78% of total loans.  At March 31, 2010, the allowance for loan losses was $5.279 million, representing 1.47% of total loans.  Based on the evaluation of the adequacy of the allowance for loan losses, management believes that, at March 31, 2011, the allowance for loan losses was adequate and reflects probable losses in the loan portfolio.

Noninterest income for the first quarter of 2011 was $699,000.  This was a modest increase of 14.8% from the comparable period of 2010.  The primary factors in this increase were higher revenues from investment services and fees generated by increased debit card usage.  Although deposit service charges increased year-over-year, the growth was tempered by rules eliminating certain automatic overdraft protection arrangements and the ability to charge fees for the payment of overdrafts for debit and ATM card transactions.  

Noninterest expense for the first quarter of 2011 totaled $3.705 million, an increase of $147,000, or 4.13% from the same period last year.  Salaries and benefits, the company's largest noninterest expense, contributed $179,000 to the increase.  This increase is largely related to the growth of the company, including increased staffing levels in special assets/collections and credit analysis.  Expenses related to the collection of delinquent loans and the management of Other Real Estate increased $40,000 from 2010's first quarter.  The limited growth in non-interest expense reflects management's on-going efforts to control expenses.

"We are pleased to report strong year over year earnings for the first quarter of 2011," stated Thomas G. Caldwell, President and Chief Executive Officer, "We enjoyed positive growth in net interest income as we have continued to maintain our focus on managing our non-interest expenses."

"In a broad sense, we are cautiously optimistic that a transition to better economic times will begin in 2011.  As we work through that interim period, our focus remains keen on delivering excellence in customer service, increasing value to our shareholders, and operating our company in accordance with safe and sound banking practices," Caldwell concluded.

Balance Sheet Growth

The company's total assets as of March 31, 2011 stood at $635.8 million, an increase of 0.6% over the $632.2 million in total assets reported at December 31, 2010.  Net loans at March 31, 2011, were $369.8 million, up $3.6 million, or 1.0%, over the $366.3 million reported at December 31, 2010.  Total deposits at the end of the first quarter 2011 were $568.6 million, or 0.6% greater than the deposit level of $566.3 million at December 31, 2010.  Stockholders' equity at March 31, 2011, was $39.3 million.  Book value per share as of March 31, 2011, was $23.86.

Dividends    

During the first 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 $635.8 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.    


MIDDLEFIELD BANC CORP.









Consolidated Selected Financial Highlights


















March 31, 2011 and 2010 and December 31, 2010


















Balance Sheet (period end)


March 31,



December 31,



March 31,

(Dollar amounts in thousands)


2011



2010



2010

(unaudited)









Assets









Cash and due from banks

$

11,555


$

10,473


$

13,039

Federal funds sold


30,581



20,162



28,492

Interest-bearing deposits in other institutions


-



-



123

  Cash and cash equivalents


42,136



30,635



41,654

Investment securities available for sale


189,640



201,772



164,852

Loans:


376,529



372,498



359,651

Less:  reserve for loan losses


6,685



6,221



5,279

     Net loans


369,844



366,277



354,372

Premises and equipment


8,053



8,179



8,408

Goodwill


4,559



4,559



4,559

Bank-owned life insurance


8,052



7,979



7,773

Accrued interest receivable and other assets


13,553



12,796



12,399

Total Assets

$

635,837


$

632,197


$

594,017












March 31,



December 31,



March 31,



2011



2010



2010

Liabilities and Stockholders' Equity









Non-interest bearing demand deposits

$

52,831


$

53,391


$

44,082

Interest bearing demand deposits


54,371



48,869



41,959

Money market accounts


75,046



71,105



64,808

Savings deposits


155,945



146,993



120,544

Time deposits


230,411



244,893



250,885

  Total Deposits


568,604



565,251



522,278

Short-term borrowings


7,301



7,632



6,772

Federal funds purchased


-



-



-

Other borrowings


18,956



19,321



25,374

Other liabilities


1,693



1,971



1,847

  Total Liabilities


596,554



594,175



556,271










Common equity


29,286



28,429



28,035

Retained earnings


16,418



15,840



15,197

Accumulated other comprehensive income


313



487



1,248

Treasury stock


(6,734)



(6,734)



(6,734)

  Total Stockholders' Equity


39,283



38,022



37,746

Total Liabilities and Stockholders' Equity

$

635,837


$

632,197


$

594,017





















MIDDLEFIELD BANC CORP.









Consolidated Selected Financial Highlights









March 31, 2011 and 2010









(Dollar amounts in thousands)









(unaudited)











For the Three Months Ended






March 31,






2011



2010




INTEREST INCOME









  Interest and fees on loans

$

5,301


$

5,097




  Interest-bearing deposits in other institutions


2



4




  Federal funds sold


9



11




  Investment securities









     Taxable interest


1,323



1,203




     Tax-exempt interest


698



592




  Dividends on stock


26



17




     Total interest income


7,359



6,924




INTEREST EXPENSE









  Deposits


2,037



2,485




  Short term borrowings


59



58




  Other borrowings


109



190




  Trust preferred securities


136



136




     Total interest expense


2,341



2,869




NET INTEREST INCOME


5,018



4,055













Provision for loan losses


865



439




NET INTEREST INCOME AFTER PROVISION









  FOR LOAN LOSSES


4,153



3,616




NONINTEREST INCOME









  Service charges on deposits


428



415




  Investment securities gains, net


15



9




  Earnings on bank-owned life insurance


73



67




  Other income


183



118




     Total non-interest income


699



609




NONINTEREST EXPENSE









  Salaries and employee benefits


1,690



1,511




  Occupancy expense


272



276




  Equipment expense


158



198




  Data processing costs


180



243




  Ohio state franchise tax


128



136




  Federal deposit insurance expense


225



202




  Professional fees


211



192




  Loss on sale of other real estate owned


(20)



121




  Other operating expense


861



679




     Total non-interest expense


3,705



3,558




Income before income taxes


1,147



667




Provision for income taxes


145



22




NET INCOME

$

1,002


$

645













Per common share data









Net income per common share - basic

$

0.62


$

0.41




Net income per common share - diluted

$

0.62


$

0.41




Dividends declared

$

0.26


$

0.26




Book value per share(period end)

$

23.86


$

24.05




Tangible book value per share (period end)

$

21.09


$

21.15




Dividend payout ratio


40.92%



63.26%




Average shares outstanding - basic


1,621,889



1,565,454




Average shares outstanding -diluted


1,621,889



1,567,441




Period ending shares outstanding


1,646,609



1,569,486













Selected ratios









Return on average assets


0.63%



0.45%




Return on average equity


10.50%



7.06%




Yield on earning assets


5.28%



5.45%




Cost of interest bearing liabilities


1.77%



2.36%




Net interest spread


3.51%



3.09%




Net interest margin


3.68%



3.29%




Efficiency (1)


60.97%



71.60%




Equity to assets at period end


6.18%



6.35%













(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.




















March 31,



March 31,




Asset quality data


2011



2010




(Dollar amounts in thousands)









Non-accrual loans

$

19,017


$

18,140




Troubled debt restructuring


2,942



-




90 day past due and accruing


55



3




Non-performing loans


22,014



18,143




Other real estate owned


2,248



2,175




Non-performing assets

$

24,262


$

20,318






















Allowance for loan losses

$

6,685


$

5,279




Allowance for loan losses/total loans


1.78%



1.47%




Net charge-offs:









  Quarter-to-date

$

401


$

97




  Year-to-date


401



97




Net charge-offs to average loans









  Quarter-to-date


0.11%



0.03%




  Year-to-date


0.11%



0.03%




Non-performing loans/total loans


5.85%



5.04%




Allowance for loan losses/non-performing loans


30.37%



29.10%
















Contact:

James R. Heslop, 2nd


Executive Vice President/Chief Operating Officer


(440) 632-1666 Ext. 3219


jheslop@middlefieldbank.com



SOURCE Middlefield Banc Corp.



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http://www.middlefieldbank.com

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