- Middlefield is continually recognized as one of the most profitable community banks in the U.S. with assets under $1.0 billion
- Nonperforming assets of $10.1 million in the 2015 second quarter were at the lowest level since 2008
- Profitable throughout the economic cycle and never reported a quarterly loss
- Increased the quarterly cash dividend by 3.8%
- Excellent asset quality, strong liquidity profile, and robust core deposit base
- Strong customer base and market share within its core markets
- Its banking branch locations are in two major growth markets in northeast and central Ohio, with a combined population of more than four million people
Sources of Growth
Management understands the need to grow its banking franchise in order to operate in a banking environment that continues to experience historically low interest rates and increased regulatory costs. Throughout 2014, the company invested in its business by enhancing its operations, products, and services, and adding senior managers to assist with the company’s growth objectives. Middlefield has improved the way customers interact with the bank by enhancing its on-line banking services and adding new mobile banking capabilities. During the second half of 2014, the company entered the secondary mortgage market to further enhance its product offerings and diversify its income stream by growing noninterest income.
Middlefield operates in two distinct Ohio market areas. The company’s Northeast Ohio markets consist principally of Geauga, Ashtabula, Trumbull, and Portage Counties, while the company’s central Ohio market consists of Franklin County, just north of Columbus. Of the 381 MSAs in the U.S., both the Cleveland and Columbus MSAs are in the top 35 in the country with a combined population of more than 4.0 million people. Further, Ohio has the eighth largest economy in the U.S.
Experienced Management Team
Middlefield has a strong leadership team focused on a community banking culture. The company’s eight executive officers have an average tenure approaching 15 years at Middlefield and 26 years within the banking industry. The company’s CEO, Thomas Caldwell, is an experienced banker and currently serves on the Federal Delegate Board of the Independent Community Bankers of America. In addition, Mr. Caldwell previously served as Chairman of the Community Bankers Association of Ohio.
Creating Shareholder Value
By focusing on conservative banking strategies, Middlefield has a history of creating value for its shareholders. As a result, the company has never reported a quarterly loss, and during the last recession, maintained its dividend amount. In 2014, Middlefield paid out over $2.1 million, or 29.5% of its net income in dividends to shareholders and its present payout ratio was 34.7% of its earnings for the 2015 first half.
Further, the company maintains an emphasis on maximizing profitability by prudent expense management and proactively controlling its costs of funds. As a result of these programs, Middlefield is continually recognized as one of the most profitable community banks in the country.
Stable and Growing Loan Portfolio
The company lends to commercial and residential customers within its market areas. The loan portfolio consists primarily of commercial and residential mortgages, with no national or sub-prime lending. From 2004 through 2014, Middlefield’s loan portfolio grew at a compound annual growth rate of 8.8%, and at June 30, 2015 net loans were $486.5 million, an increase of 9.8% from the comparable period last year.
Excellent Asset Quality and Strong Capital Levels
|Nonperforming loans to total loans
|Nonperforming assets to total assets
|Allowance for loan losses to total loans
|Net charge-off ratio – annualized
|Tier I Capital Ratio (to Risk-weighted Assets)
2015 Second Quarter Financial Highlights
(on a year-over-year basis unless noted)
- Net interest income increased 3.2% to $6.1 million.
- Noninterest income grew 12.3% to $1.0 million.
- Noninterest expenses increased 13.5%.
- Net income declined 6.6% to $1.5 million, or $0.73 per diluted share.
- Tangible stockholders’ equity improved 10.4%
- Total net loans increased 9.8%.
- Nonperforming assets declined to $10.1 million from $12.9 million.
- Quarterly cash dividend increased 3.8% to $0.27 from $0.26 per share
This profile is for information purposes only. No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer, solicitation or recommendation to buy or sell this security. Investors should consult a professional investment adviser prior to making any investment decision. Statements contained in this profile that are not historical facts are forward-looking statements that involve risks and uncertainties. For a summary of important factors that could cause Middlefield Banc Corp.’s results to differ materially from those projected in, or inferred by, the forward-looking statements, please refer to the Company’s Annual Report on Form 10-K or quarterly report on Form 10-Q.
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