Attached files
| file | filename |
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| 8-K - FORM 8-K - MIDDLEFIELD BANC CORP | c24021e8vk.htm |
Exhibit 99
15985 East High Street
P. O. Box 35
Middlefield, Ohio 44062
Phone: 440/632-1666 FAX: 440/632-1700
www.middlefieldbank.com
P. O. Box 35
Middlefield, Ohio 44062
Phone: 440/632-1666 FAX: 440/632-1700
www.middlefieldbank.com
PRESS RELEASE |
Contact:
|
James R. Heslop, 2nd | |
| Executive Vice President/Chief Operating Officer | ||
| (440) 632-1666 Ext. 3219 | ||
| jheslop@middlefieldbank.com |
Middlefield Banc Corp. Reports Continued Strong Earnings
MIDDLEFIELD, OHIO, October 31, 2011 ¨¨¨¨ Middlefield Banc Corp. (OTCQB:
MBCN), parent of The Middlefield Banking Company and Emerald Bank, today announced results for the
quarter and nine months ended September 30, 2011.
| • | Net income of $1,079,000, up 133% from the third quarter of 2010. |
| • | Total assets increased $28.5 million, or 4.5%, from December 31, 2010. |
| • | Net interest income in a year-to-year comparison grew $2.3 million or 17.1%. |
| • | Total deposits stood at $587.2 million, an increase of 3.9% for the nine month period. |
| • | Diluted earnings per common share for the quarter were $0.63. |
| • | Tangible book value per share at September 30, 2011 stood at $23.99. |
The company reported that earnings for the third quarter ended September 30, 2011, were $1,079,000
compared to earnings of $463,000 for the same period in the prior year. Fully diluted earnings per
share for the 2011 quarter were $0.63, while those reported for the 2010 period were $0.29.
Net income for the nine months ended September 30, 2011 was $2,801,000, a $978,000, or 53.6%
increase from the $1,823,000 earned during the same period of 2010. Year-to-date diluted earnings
per share were $1.69 in 2011 compared to $1.16 in 2010.
During the 2011 third quarter, net interest income increased $778,000 from the third quarter of
2010. The provision for loan losses in the third quarter of 2011 stood at $920,000, which was
$306,000 less than the same period of 2010. Total non-interest expense increased $164,000, while
non-interest income during the third quarter of 2011 was $9,000 below that reported in the same
period of 2010.
Annualized returns on average equity (“ROE”) and average assets (“ROA”) for the 2011 third quarter
were 11.11% and 0.66%, respectively, compared with 4.54% and 0.29% for the third quarter of 2010.
The nine month period ending September 30, 2011 saw ROE and ROA of 9.82% and 0.59%, respectively.
The comparable period 2010 results were 6.31% and 0.41%.
“We are pleased to report continued strong financial results for the third quarter and year-to-date
periods, especially in light of an economic environment that continues to be extremely
challenging,” stated Thomas G. Caldwell, President and Chief Executive Officer, “We have continued
to enhance our profitability by following solid banking fundamentals.”
“Obviously, we are pleased with the improvement in our net interest margin. This has been achieved
through managing our cost of funding, while properly pricing quality loans. With the Fed’s actions
to
hold short-term rates low into mid-2013, while also introducing Operation Twist, we are working to
maintain a solid net interest margin so as to remain a strong community bank.”
“Our focus remains on delivering excellent customer service, offering a dynamic suite of products,
and maximizing value for our shareholders,” Caldwell concluded.
Asset Quality
For the nine months ended September 30, 2011, the provision for loan losses increased 5.5% to
$2,485,000, which compares to the $2,355,000 for the same period of 2010. For the three month
period ended September 30, 2011, the provision for loan losses was $920,000. During the same
period of 2010, the provision was $1,226,000. Donald L. Stacy, Chief Financial Officer of
Middlefield Banc Corp. stated “Our asset quality numbers are a reflection of the economic
uncertainty that continues on a national scale. This continued weakness remains a concern and
warrants measures to provide for the sound operation of our company.”
Stacy continued, “We are, however, finding that our problem credits have been properly identified
as the increase in our non-performing assets has stabilized. Expectations are that an improvement
in our asset quality numbers will be seen as we move into 2012.”
The increased loan loss provision has significantly outpaced loan charge-offs. Net charge-offs for
the third quarter of 2011 were 0.10% of average loans, while the ratio for the first nine months of
2011 was 0.30%. The ratio of the allowance for loan losses to total loans stood at 1.95% at
September 30, 2011, compared to the 1.63% reported at September 30, 2010. Based upon the
evaluation of the allowance for loan losses, it is the belief of management that, as of September
30, 2011, the allowance for loan losses was adequate and reflects probable incurred losses within
the portfolio.
Net Interest Income
Net Interest Income totaled $15.5 million for the first nine months of 2011. This represents an
increase of 17.1 % from the $13.3 million reported for the comparable period of 2010. The
improvement in net interest income was primarily generated by an increase in both average earning
assets and net interest margin. Interest income on investment securities increased $0.2 million
while the company experienced a decrease in interest expense on deposits of $1.4 million.
Continued action by the Federal Open Market Committee to hold interest rates at historic low levels
has provided the company the opportunity to continue to lower funding costs. The pricing
environment for new loans remains highly competitive within the company’s markets. Interest
earnings on loans did increase $0.5 million from the year ago period. This increase in earnings on
loans was achieved in spite of the level of non-performing loans.
For the three month period ended September 30, 2011 compared to the same period of 2010,
Middlefield’s net interest income was up 16.9%, or $0.8 million. The positive variance was based
on an increase of $0.2 million from the loan portfolio, coupled with a decrease of $0.1 million
from the investment portfolio and a decrease in deposit costs of $0.6 million.
The net interest margin for the first nine months of 2011 was 3.69%, representing an increase from
the 2010 same period result of 3.39%. The yield on earning assets dropped 18 basis points, while
the cost of interest-bearing liabilities experienced a decrease of 51 basis points.
Non-Interest Income and Operating Expenses
Non-interest income decreased $9,000 for the three-month period of 2011 from the comparable 2010
period. Lower service charges on deposit accounts are attributable to Federal regulatory changes
to overdraft rules. For the first nine months of 2011, deposit services charges were $22,000 below
the same
period of 2010. This was offset by an increase in investment services income as well as the
collection of rents on OREO properties.
Non-interest expense of $3,906,000 for the third quarter of 2011 was 4.4%, or $164,000 higher than
the third quarter of 2010. Increases in salaries and employee benefits of $211,000 are primarily
attributable to staff additions, as well as an increase in health insurance costs. Cost associated
with the administration and liquidation of delinquent loans, OREO properties and foreclosures were
the primary contributors to higher 2011 non-interest expenses.
For the nine month period of 2011, total operating costs were $775,000, or 7.0%, above those of the
2010 comparable period. Contributing to the increase were salaries and employee benefits and
increased other expenses. The higher 2011 other expense figure is primarily attributable to costs
directly related to loan quality issues, including loan and other real estate owned expense in the
company’s non-bank subsidiary, EMORECO, Inc.
Balance Sheet Growth
The company’s total assets as of September 30, 2011 stood at $660.7 million, an increase of 4.5%
over the $632.2 million in total assets reported at December 31, 2010. Net loans at September 30,
2011, were $381.0 million, up $16.7 million, or 4.6%, over the $366.3 million reported at December
31, 2010. Total deposits at the end of the third quarter 2011 were $587.2 million, or 3.9% greater
than the deposit level of $565.3 million at December 31, 2010.
The investment portfolio, which is entirely classified as available for sale, stood at $204.5
million at September 30, 2011. This figure represented growth within that portfolio of $2.7
million from the prior year-end. Stockholders’ equity at September 30, 2011, was $46.7 million.
Book value per share as of September 30, 2011, was $26.59.
Dividends
During the third 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 $660.7 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
(Dollar amounts in thousands)
September 30, 2011 and 2010 and December 31, 2010
| (unaudited) | (unaudited) | |||||||||||
| September | December | September | ||||||||||
| 30, | 31, | 30, | ||||||||||
| Balance Sheet (period end) | 2011 | 2010 | 2010 | |||||||||
Assets |
||||||||||||
Cash and due from banks |
$ | 21,269 | $ | 10,473 | $ | 13,645 | ||||||
Federal funds sold |
22,318 | 20,162 | 37,701 | |||||||||
Interest-bearing deposits in other institutions |
— | — | 124 | |||||||||
Cash and cash equivalents |
43,587 | 30,635 | 51,470 | |||||||||
Investment securities available for sale |
204,455 | 201,772 | 195,101 | |||||||||
Loans: |
388,558 | 372,498 | 365,219 | |||||||||
Less: reserve for loan losses |
7,574 | 6,221 | 5,971 | |||||||||
Net loans |
380,984 | 366,277 | 359,248 | |||||||||
Premises and equipment |
8,042 | 8,179 | 8,222 | |||||||||
Goodwill |
4,559 | 4,559 | 4,559 | |||||||||
Bank-owned life insurance |
8,188 | 7,979 | 7,911 | |||||||||
Accrued interest receivable and other assets |
10,864 | 12,796 | 10,578 | |||||||||
Total Assets |
$ | 660,679 | 632,197 | 637,089 | ||||||||
| September | December | September | ||||||||||
| 30, | 31, | 30, | ||||||||||
| 2011 | 2010 | 2010 | ||||||||||
Liabilities and Stockholders’ Equity |
||||||||||||
Non-interest bearing demand deposits |
$ | 60,806 | $ | 53,391 | $ | 55,448 | ||||||
Interest bearing demand deposits |
61,483 | 48,869 | 44,232 | |||||||||
Money market accounts |
76,851 | 71,105 | 71,097 | |||||||||
Savings deposits |
166,531 | 146,993 | 141,693 | |||||||||
Time deposits |
221,567 | 244,893 | 251,021 | |||||||||
Total Deposits |
587,238 | 565,251 | 563,491 | |||||||||
Short-term borrowings |
6,908 | 7,632 | 7,762 | |||||||||
Other borrowings |
17,955 | 19,321 | 22,035 | |||||||||
Other liabilities |
1,915 | 1,971 | 2,111 | |||||||||
Total Liabilities |
614,016 | 594,175 | 595,399 | |||||||||
Common equity |
31,112 | 28,429 | 28,315 | |||||||||
Retained earnings |
17,335 | 15,840 | 15,558 | |||||||||
Accumulated other comprehensive income |
4,950 | 487 | 4,551 | |||||||||
Treasury stock |
(6,734 | ) | (6,734 | ) | (6,734 | ) | ||||||
Total Stockholders’ Equity |
46,663 | 38,022 | 41,690 | |||||||||
Total Liabilities and Stockholders’ Equity |
$ | 660,679 | $ | 632,197 | $ | 637,089 | ||||||
Consolidated Selected Financial Highlights
September 30, 2011 and 2010
(Dollar amounts in thousands)
(unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| Income Statement | 2011 | 2010 | 2011 | 2010 | ||||||||||||
INTEREST INCOME |
||||||||||||||||
Interest and fees on loans |
$ | 5,555 | $ | 5,325 | $ | 16,255 | $ | 15,721 | ||||||||
Interest-bearing deposits in other institutions |
4 | 3 | 8 | 10 | ||||||||||||
Federal funds sold |
0 | 15 | 13 | 38 | ||||||||||||
Investment securities
|
||||||||||||||||
Taxable interest |
1,220 | 1,290 | 3,832 | 3,832 | ||||||||||||
Tax-exempt interest |
724 | 702 | 2,124 | 1,941 | ||||||||||||
Dividends on stock |
25 | 33 | 76 | 82 | ||||||||||||
Total interest income |
7,528 | 7,368 | 22,308 | 21,624 | ||||||||||||
INTEREST EXPENSE |
||||||||||||||||
Deposits |
1,836 | 2,391 | 5,877 | 7,249 | ||||||||||||
Short term borrowings |
59 | 66 | 177 | 186 | ||||||||||||
Other borrowings |
100 | 147 | 313 | 520 | ||||||||||||
Trust preferred securities |
139 | 148 | 412 | 412 | ||||||||||||
Total interest expense |
2,134 | 2,752 | 6,779 | 8,367 | ||||||||||||
NET INTEREST INCOME |
5,394 | 4,616 | 15,529 | 13,257 | ||||||||||||
Provision for loan losses |
920 | 1,226 | 2,485 | 2,355 | ||||||||||||
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES |
4,474 | 3,390 | 13,044 | 10,902 | ||||||||||||
NONINTEREST INCOME |
||||||||||||||||
Service charges on deposits |
455 | 473 | 1,299 | 1,321 | ||||||||||||
Net securities gains (losses) |
6 | 18 | (16 | ) | 45 | |||||||||||
Earnings on bank-owned life insurance |
70 | 72 | 209 | 204 | ||||||||||||
Other income |
155 | 132 | 487 | 419 | ||||||||||||
Total non-interest income |
686 | 695 | 1,979 | 1,989 | ||||||||||||
NONINTEREST EXPENSE |
||||||||||||||||
Salaries and employee benefits |
1,754 | 1,543 | 5,388 | 4,767 | ||||||||||||
Occupancy expense |
242 | 224 | 737 | 717 | ||||||||||||
Equipment expense |
175 | 156 | 488 | 558 | ||||||||||||
Data processing costs |
162 | 160 | 515 | 575 | ||||||||||||
Ohio state franchise tax |
126 | 134 | 351 | 404 | ||||||||||||
Federal deposit insurance expense |
176 | 197 | 673 | 589 | ||||||||||||
Professional fees |
181 | 110 | 577 | 490 | ||||||||||||
Loss on sale of other real estate owned |
195 | 536 | 498 | 750 | ||||||||||||
Other operating expense |
895 | 682 | 2,676 | 2,278 | ||||||||||||
Total non-interest expense |
3,906 | 3,742 | 11,903 | 11,128 | ||||||||||||
Income before income taxes |
1,254 | 343 | 3,120 | 1,763 | ||||||||||||
Provision for income taxes |
175 | (120 | ) | 319 | (60 | ) | ||||||||||
NET INCOME |
$ | 1,079 | $ | 463 | $ | 2,801 | $ | 1,823 | ||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Per common share data |
||||||||||||||||
Net income per common share — basic |
$ | 0.63 | $ | 0.29 | $ | 1.69 | $ | 1.16 | ||||||||
Net income per common share — diluted |
$ | 0.63 | $ | 0.29 | $ | 1.69 | $ | 1.16 | ||||||||
Dividends declared |
$ | 0.26 | $ | 0.26 | $ | 0.78 | $ | 0.78 | ||||||||
Book value per share(period end) |
$ | 26.59 | $ | 26.31 | $ | 26.59 | $ | 26.31 | ||||||||
Tangible book value per share (period end) |
$ | 23.99 | $ | 23.44 | $ | 23.99 | $ | 23.44 | ||||||||
Dividend payout ratio |
44.11 | % | 88.55 | % | 46.63 | % | 67.22 | % | ||||||||
Average shares outstanding — basic |
1,704,677 | 1,578,832 | 1,658,415 | 1,571,762 | ||||||||||||
Average shares outstanding -diluted |
1,704,677 | 1,578,832 | 1,658,415 | 1,572,726 | ||||||||||||
Period ending shares outstanding |
1,754,856 | 1,584,281 | 1,754,856 | 1,584,281 | ||||||||||||
Selected ratios |
||||||||||||||||
Return on average assets |
0.66 | % | 0.29 | % | 0.59 | % | 0.41 | % | ||||||||
Return on average equity |
11.11 | % | 4.54 | % | 9.82 | % | 6.31 | % | ||||||||
Yield on earning assets |
5.14 | % | 5.26 | % | 5.20 | % | 5.38 | % | ||||||||
Cost of interest bearing liabilities |
1.56 | % | 2.08 | % | 1.68 | % | 2.19 | % | ||||||||
Net interest spread |
3.58 | % | 3.19 | % | 3.52 | % | 3.19 | % | ||||||||
Net interest margin |
3.75 | % | 3.39 | % | 3.69 | % | 3.39 | % | ||||||||
Efficiency (1) |
60.53 | % | 65.97 | % | 63.99 | % | 68.50 | % | ||||||||
Equity to assets at period end |
7.12 | % | 6.54 | % | 7.12 | % | 6.54 | % | ||||||||
| (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. |
| September | September | |||||||||
| 30, | 30, | |||||||||
| Asset quality data | 2011 | 2010 | ||||||||
| (Dollar amounts in thousands) | ||||||||||
Non-accrual loans |
$ | 17,805 | $ | 19,999 | ||||||
Troubled debt restructuring |
4,337 | 603 | ||||||||
90 day past due and accruing |
583 | 381 | ||||||||
Non-performing loans |
22,725 | 20,983 | ||||||||
Other real estate owned |
2,173 | 2,016 | ||||||||
Non-performing assets |
$ | 24,898 | $ | 22,999 | ||||||
Allowance for loan losses |
$ | 7,574 | $ | 5,971 | ||||||
Allowance for loan losses/total loans |
1.95 | % | 1.63 | % | ||||||
Net charge-offs: |
||||||||||
Quarter-to-date |
$ | 373 | $ | 1,089 | ||||||
Year-to-date |
1,132 | 1,321 | ||||||||
Net charge-offs to average loans |
||||||||||
Quarter-to-date |
0.10 | % | 0.30 | % | ||||||
Year-to-date |
0.30 | % | 0.37 | % | ||||||
Non-performing loans/total loans |
5.85 | % | 5.75 | % | ||||||
Allowance for loan losses/non-performing loans |
33.33 | % | 28.46 | % | ||||||