Middletown Valley Bank, Inc. Reports Results For The Second Quarter 2018

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Jul 20, 2018, 17:01 ET

MIDDLETOWN, Md., July 20, 2018 /PRNewswire/ -- Middletown Valley Bank, Inc. (OTCPink: MNVB) reported increased quarterly earnings and record total assets for the second quarter of 2018. Net income for the quarter ended June 30, 2018 was $701.5 thousand and earnings per share of $0.31 (share count is 948 thousand higher in 2Q18 vs. 2Q17,) as compared to net income of $407.9 thousand and earnings per share of $0.32 recorded for the second quarter 2017. Total assets continued to grow in the second quarter 2018 to $392.9 million, an increase of $81.4 million (26%) versus second quarter ended 2017 and just shy of the $400 million threshold.

The increase in second quarter 2018 earnings versus second quarter 2017 was due to a combination of an increase in net interest income of $712.7 thousand, a decrease in loan loss provision of $268.9 thousand, and an increase in noninterest income of $37.7 thousand more than offsetting the $683.8 thousand increase in non-interest expense and $41.9 thousand increase in income taxes. The Net interest income year over year increase was driven by average loan balances increasing $72.6 million to $302.4 million and 9 bps expansion in net interest margin. Income taxes were positively impacted by the lowered corporate tax rate. Non-interest expense growth was primarily caused by an increase in personnel and technology enhancements costs as the Bank has crested over 100 employees in the second quarter of 2018.

Net charge offs were $86 thousand and $106 thousand for the second quarter ended June 30, 2018 and second quarter ended 2017, respectively. Nonperforming assets to total loans increased to 1.20% in the quarter ended June 30, 2018 versus 1.11% for the quarter ended June 30, 2017 while declining from 1.46% for the March 31, 2018 quarter. The ratio of Allowance for loan losses to total loans declined to 0.98% and 1.13% for the quarters ended June 30, 2018 and 2017, respectively as the overall loan portfolio continues to see improvement in credit quality and economic performance.

The balance sheet growth mentioned previously for the first quarter ended June 30, 2018 was driven by net loan growth of $81.5 million (35%) to $312.2 million and $3.0 million increase in cash to $22.1 million which were funded by a $63.8 million (22.5%) increase in deposits, a $4.7 million reduction in investment securities, and a $18 million increase in equity due to the fourth quarter 2017 common equity capital raise and retained earnings. The dividend declared was $0.03 for the second quarter ended June 30, 2018 as compared to $0.02 per share for the second quarter ended June 30, 2017.

This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can generally be identified by the use of forward- looking terminology such as "believes," "expects," "intends," "may," "will," "should," "anticipates" or similar terminology. Such statements, specifically regarding the Company's intentions regarding transparency, growth and market expansion, are subject to risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, changes in interest rates, stock market liquidity, deposit flows, loan demand and real estate values, as well as changes in economic, competitive, governmental, regulatory, technological and other factors which may affect the Company specifically, its existing and target market areas or the banking industry in general. The realization or occurrence of these risks or uncertainties could cause actual results to differ materially from those addressed in the forward-looking statements.

Middletown Valley Bank
Brian M. Ropp
Executive Vice President, Chief Financial Officer
(301) 371-3029

Middletown Valley Bank
June 30, 2018
Summary Financials
(dollars in thousands)


Balance Sheet	June 30,	June 30,		December 31,
	2018	2017		2017
	(unaudited)	(unaudited)		(audited)
Cash	$ 22,095	$ 19,070		$ 20,053
FHLB Stock	325	255		255
Investments, at market value	44,122	48,835		47,458
Loans, net of Reserve	312,191	230,638		280,183
Fixed assets	5,868	5,372		5,615
Other assets	8,386	7,454		7,660
Total Assets	$ 392,987	$ 311,624		$ 361,224

Deposits	$ 347,290	$ 283,499		$ 315,932
Borrowings	-	-		-
Other liabilities	1,722	1,904		1,904
Total Liabilities	349,012	285,403		317,836
Equity	44,969	26,533		43,815
Unreaized gain(loss), net of tax	(994)	(312)		(427)
Total Equity	43,975	26,221		43,388
Total Liabilities & Equity	$ 392,987	$ 311,624		$ 361,224



	For the Three Months Ended		For the Six Months Ended
Income Statement	June 30,	June 30,	June 30,	June 30,
	2018	2017	2018	2017
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Total interest and fee income	$ 3,820,067	$ 2,859,868	$ 7,366,360	$ 5,514,724
Total interest expense	505,312	257,841	949,625	478,260
Net interest income	3,314,755	2,602,027	6,416,735	5,036,464
Provision for loan losses	(21,735)	247,128	182,000	269,795
Net interest income after provision	3,336,490	2,354,899	6,234,735	4,766,669
Other non-interest income	288,829	251,101	570,654	515,163
Other non-interest expense	2,669,634	1,985,827	5,171,837	3,895,136
Pre-merger, pre-tax net income	955,685	620,173	1,633,552	1,386,696
Income taxes	254,149	212,292	430,693	483,521
Net income	$ 701,536	$ 407,881	$ 1,202,859	$ 903,175

Middletown Valley Bank

*Selected Financial Data*


	June 30,	June 30,		December 31,
	2018	2017		2017
(dollars in thousands)	(unaudited)	(unaudited)		(audited)
Total Assets	$ 392,987	$ 311,624		$ 361,224
Loans	312,191	230,638		280,183
Deposits	347,290	283,499		315,932
Shareholder's equity	43,975	26,221		43,388

Nonperforming Assets:
Accruing troubled debt restructures	$ 745	$ 773		$ 759
Loans 90 past due and still accruing	-	-		-
Nonaccrual loans	3,020	1,811		3,134
Foreclosed properties	167	-		167
Total nonperforming assets	$ 3,932	$ 2,584		$ 4,060


	For the Three Months Ended		For the Six Months Ended
	June 30,	June 30,	June 30,	June 30,
*Summary of Operating Results*	2018	2017	2018	2017
(dollars in thousands)	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Pre-allowance for loan loss provision, pre-tax net income	$ 933,950	$ 867,301	$ 1,815,552	$ 1,656,491
Allowance for loan loss provision, pre-tax	(21,735)	247,128	182,000	269,795
Tax expense	254,149	212,292	430,693	483,521
Net Income	$ 701,536	$ 407,881	$ 1,202,859	$ 903,175

Charge-Offs	$ 86	$ 108	$ 110	$ 118
(Recoveries)	(3)	(2)	(7)	(4)
Net charge-offs	$ 83	$ 106	$ 103	$ 114

*Per Common Share Data*

Basic earnings per share	$ 0.31	$ 0.32	$ 0.54	$ 0.70
Common shares outstanding	2,233,820	1,285,774	2,233,820	1,285,774
Dividends declared	$ 0.03	$ 0.02	$ 0.06	$ 0.04
Book value per share	$ 19.69	$ 20.39	$ 19.69	20.39

*Selected Unaudited Financial Ratios*

Return on average assets	0.74%	0.53%	0.66%	0.62%
Return on average equity	6.38%	6.21%	5.61%	7.10%
Allowance for loan losses to total loans	0.98%	1.13%	0.98%	1.13%
Nonperforming assets to total loans	1.20%	1.11%	1.20%	1.11%
Net charge-offs to average loans	0.02%	0.04%	0.02%	0.03%
Common equity tier 1 to risk-weighted assets	15.52%	11.93%	15.52%	11.93%
Tier 1 capital to risk-weighted assets	15.52%	11.93%	15.52%	11.93%
Total capital to risk-weighted assets	16.77%	13.17%	16.77%	13.17%
Average equity to average assets	11.19%	8.42%	11.19%	8.42%
Net interest margin	3.68%	3.59%	3.65%	3.59%
Loan to deposit ratio	90.88%	82.27%	90.84%	82.81%