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Middlefield Banc Corp. Reports Third Quarter Earnings of $0.55 Per Share<

Middlefield Banc Corp. 2002 Press Releases

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Contact Info: Thomas G. Caldwell
President and CEO
440.632.1666 Ext. 3200
Donald L. Stacy
Treasurer and Chief Financial Officer
440.632.1666 Ext. 3231
Date: October 21, 2002

MIDDLEFIELD, OHIO  Middlefield Banc Corp. (Pink Sheets: MBCN) today reported third quarter 2002 net income of $639,000, or $0.55 per basic and diluted share. The company’s third quarter earnings represent a decrease of 3.11% from the $660,000 net income reported for the quarter ended September 30, 2001. Earnings per share for the year ago period were $0.57.

Third quarter 2002 results represent a return on average assets (ROA) of 1.15% and a return on average equity (ROE) of 12.11%. Comparable ratios from the 2001 period were 1.39% and 13.53%, respectively.

For the nine months ended September 30, 2002, the company’s earnings were $1,760,000, or $1.52 per basic and diluted share, an increase of 4.11% over the $1,689,000, or $1.46 per basic and diluted share, recorded for the first nine months of 2001.

For the nine month period of 2002, Return on Average Assets and Return on Average Equity were 1.12% and 11.45%, respectively. Comparable Returns for the prior year were 1.22% and 11.89%. The ratio of capital to assets, at the end of the quarter, stood at 9.44%, well above regulatory minimums.

In commenting on the third quarter, Middlefield Banc Corp. President and CEO Thomas G. Caldwell stated, "In light of the current economic climate, we are satisfied with our earnings performance. Our net interest income continued to trend positively. However, noninterest expenses were up 12.65%. Our expenses, however, did grow at a slower rate than did total assets, loans, and deposits, all of which showed double digit increases over the prior year."

"Our credit quality remains strong relative to the overall market," said Caldwell. "Net charge-offs for the quarter approximated last year, but on a year-to-date basis we are running well below 2001. We do, however, have some problem credits. These are all well secured by real estate and pose no threat to future earnings."

Net interest income for the quarter was 12.24% higher than the third quarter of 2001. The comparable figures are $1,995,000 for 2002 and $1,777,000 for 2001. Noninterest income for the quarter was up 6.54% to $285,000. Noninterest expense for the quarter was $1,268,000, an increase of 12.65% over the third quarter of 2001. The increase in noninterest expense is primarily attributable to increased employee compensation and benefit expense, which reflects increased staffing levels and cost of health insurance benefits.

For the first nine months of 2002, net interest income was $5,872,000, an increase of 13.83% from the same period of 2001. A reduction in total interest expense was the primary factor in the increase. Noninterest expense for the period was $3,873,000, and was 12.16% higher than the same period of last year. Noninterest income increased a modest 4.51% over the comparable period.

Middlefield Banc Corp.’s balance sheet at September 30, 2002 reflected continued asset growth. Total assets were 17.36% higher than the same point in 2001. Net loans increased 13.33% to $167,031,000. Total deposits also increased significantly, being $186,083,000 at September 30, 2002, an increase of 15.55% from the prior year. Shareholders’ equity at the quarter end was $21,228,000, 8.09% higher than September 30, 2001.

"With interest rates at sustained low levels, we are experiencing pressure on our net interest margin," noted Donald L. Stacy, Chief Financial Officer of MBCN. "Although our overall loan originations continue at a good pace, we are in the midst of another cycle of payoffs on existing loans as customers seek out the lower interest rates. Our net interest margin is below desired levels, however our asset/liability mix is positioned to strengthen the margin in a rising rate environment."

Headquartered in Middlefield, Ohio, Middlefield Banc Corp. is a one-bank holding company for The Middlefield Banking Company. The Middlefield Banking Company , which operates offices in Chardon, Garrettsville, Mantua and Middlefield, has received regulatory approval for a new office in Orwell, Ohio. Middlefield Banc Corp. trades under the symbol MBCN.

The information contained in this press release contains forward-looking statements regarding future performance which are not historical facts and which involve risk and uncertainties. Actual results and performance could differ materially from those contemplated by these forward looking statements.

Middlefield Banc Corp.

 

 

 

 

 

 

 

 

Selected Consolidated Financial Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30,

 

 

 

2002

 

 

2001

 

% Change

Earnings (in 000s)

 

 

 

 

 

 

 

 

   Total interest income

 

$

3,586

 

$

3,508

 

2.21%

   Total interest expense

 

 

1,591

 

 

1,731

 

-8.09%

   Net interest income

 

 

1,995

 

 

1,777

 

12.24%

   Provision for loan losses

 

 

75

 

 

45

 

66.67%

   Net interest income after

 

 

 

 

 

 

 

 

      provision for loan losses

 

 

1,920

 

 

1,732

 

10.82%

   Gain on sale of securities

 

 

0

 

 

98

 

-100.00%

   Total noninterest income

 

 

285

 

 

268

 

6.54%

   Total noninterest expense

 

 

1,268

 

 

1,126

 

12.65%

   Income before income taxes

 

 

937

 

 

972

 

-3.56%

   Federal Income Taxes

 

 

298

 

 

312

 

-4.49%

   Net income

 

 

639

 

 

660

 

-3.11%

 

 

 

 

 

 

 

 

 

Per share (1)

 

 

 

 

 

 

 

 

   Earnings per common share - Basic

$

0.55

 

$

0.57

 

-3.51%

   Earnings per common share - Diluted

 

0.55

 

 

0.57

 

-3.51%

   Cash dividends paid

 

 

0.19

 

 

0.13

 

42.54%

 

 

 

 

 

 

 

 

 

Shares Outstanding

 

 

 

 

 

 

 

 

   Average - Basic

 

 

1,156,181

 

 

1,160,388

 

---

   Average - Diluted

 

 

1,159,277

 

 

1,160,394

 

---

 

 

 

 

 

 

 

 

 

 

Key performance ratios

 

 

 

 

 

 

 

 

   Return on average assets

 

 

1.15%

 

 

1.39%

 

-17.27%

   Return on average equity

 

 

12.11%

 

 

13.53%

 

-10.50%

   Net interest margin

 

 

3.88%

 

 

4.05%

 

-4.20%

   Yield on earning assets

 

 

6.90%

 

 

7.88%

 

-12.44%

   Efficiency ratio

 

 

55.61%

 

 

52.54%

 

5.84%

   Net charge-offs to average loans

 

 

 

 

 

 

 

 

      (actual for the period)

 

 

0.01%

 

 

0.01%

 

-33.33%

   Net charge-offs to average loans

 

 

 

 

 

 

 

 

      (annualized)

 

 

0.01%

 

 

0.01%

 

-33.60%

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30,

 

 

 

2002

 

 

2001

 

% Change

Earnings (in 000s)

 

 

 

 

 

 

 

 

   Total interest income

 

$

10,511

 

$

10,270

 

2.35%

   Total interest expense

 

 

4,639

 

 

5,111

 

-9.24%

   Net interest income

 

 

5,872

 

 

5,159

 

13.83%

   Provision for loan losses

 

 

225

 

 

125

 

80.00%

   Net interest income after

 

 

 

 

 

 

 

 

      provision for loan losses

 

 

5,647

 

 

5,034

 

12.18%

   Gain on sale of securities

 

 

0

 

 

98

 

-100.00%

   Total noninterest income

 

 

830

 

 

794

 

4.51%

   Total noninterest expense

 

 

3,873

 

 

3,453

 

12.16%

   Income before income taxes

 

 

2,604

 

 

2,473

 

5.31%

   Federal Income Taxes

 

 

844

 

 

784

 

7.63%

   Net income

 

 

1,760

 

 

1,689

 

4.24%

 

 

 

 

 

 

 

 

 

Per share (1)

 

 

 

 

 

 

 

 

   Earnings per common share - Basic

$

1.52

 

$

1.46

 

4.11%

   Earnings per common share - Diluted

 

1.52

 

 

1.46

 

4.11%

   Cash dividends paid

 

 

0.54

 

 

0.40

 

35.35%

   Book value (end of period)

 

 

19.19

 

 

17.81

 

7.77%

 

 

 

 

 

 

 

 

 

Shares Outstanding

 

 

 

 

 

 

 

 

   Average - Basic

 

 

1,157,670

 

 

1,160,388

 

---

   Average - Diluted

 

 

1,159,250

 

 

1,161,838

 

---

 

 

 

 

 

 

 

 

 

At period end (in 000s)

 

 

 

 

 

 

 

 

   Total assets

 

$

224,843

 

$

191,581

 

17.36%

   Total deposits

 

 

186,083

 

 

161,038

 

15.55%

   Net loans receivable

 

 

167,031

 

 

147,390

 

13.33%

   Securities

 

 

39,250

 

 

28,521

 

37.62%

   Shareholders equity

 

 

21,228

 

 

19,640

 

8.09%

 

 

 

 

 

 

 

 

 

Key performance ratios

 

 

 

 

 

 

 

 

   Return on average assets

 

 

1.12%

 

 

1.22%

 

-8.20%

   Return on average equity

 

 

11.45%

 

 

11.89%

 

-3.70%

   Efficiency ratio

 

 

57.79%

 

 

57.07%

 

1.26%

   Net interest margin

 

 

4.01%

 

 

4.04%

 

-0.74%

   Yield on earning assets

 

 

7.09%

 

 

7.91%

 

-10.37%

   Net charge-offs to average loans

 

 

 

 

 

 

 

 

      (actual for the period)

 

 

0.04%

 

 

0.08%

 

-51.92%

   Net charge-offs to average loans

 

 

 

 

 

 

 

 

      (annualized)

 

 

0.05%

 

 

0.10%

 

-51.91%

   Total allowance for loan losses

 

 

 

 

 

 

 

 

      to nonperforming loans

 

 

102.05%

 

 

NA

 

---

   Nonperforming loans to

 

 

 

 

 

 

 

 

      total loans

 

 

1.29%

 

 

NA

 

---

   Total allowance for loan losses

 

 

 

 

 

 

 

 

      to total loans

 

 

1.32%

 

 

1.37%

 

-4.00%

   Equity to assets at period end

 

 

9.44%

 

 

10.25%

 

-7.90%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)  Per share data has been restated to reflect the five percent stock dividend paid in 2002.

 

 

 

 

 

 

 

 

 

 

 

 

Middlefield Banc Corp.

 

 

 

 

 

 

Supplemental Detail

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of September 30,

 

 

 

2002

 

 

2001

BALANCE SHEET  (in 000s)

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

   Cash and due from banks

 

$

5,418

 

$

5,319

   Federal funds sold

 

 

4,600

 

 

1,920

   Securities available for sale

 

 

31,961

 

 

17,514

   Held to maturity securities

 

 

7,289

 

 

11,006

         Total cash and securities

 

 

49,267

 

 

35,760

   Loans held for investment

 

 

169,258

 

 

149,438

   Loans held for sale

 

 

0

 

 

0

      Total loans

 

 

169,258

 

 

149,438

   Reserve for losses on loans

 

 

2,227

 

 

2,048

   Intangibles

 

 

0

 

 

0

   Other real estate owned

 

 

0

 

 

0

   Premises and equipment

 

 

6,330

 

 

6,001

   Other assets

 

 

2,215

 

 

2,430

      TOTAL ASSETS

 

$

224,843

 

$

191,581

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

   Deposits

 

$

186,083

 

$

161,038

   Federal funds purchased

 

 

0

 

 

0

   Borrowed funds

 

 

16,761

 

 

10,063

   Other liabilities

 

 

772

 

 

840

      TOTAL LIABILITIES

 

$

203,615

 

$

171,941

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

   Common equity

 

$

22,362

 

$

20,856

   Net unrealized gain

 

 

 

 

 

 

      (loss) on securities

 

 

466

 

 

260

   Treasury stock

 

 

(1,599)

 

 

(1,476)

      TOTAL EQUITY

 

$

21,228

 

$

19,640

 

 

 

 

 

 

 

      TOTAL LIABILITIES & EQUITY

$

224,843

 

$

191,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Detail (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME STATEMENT

 

 

 

 

 

 

 

 

 

For the Three Months

 

 

 

Ended September 30,

 

 

 

2002

 

 

2001

   Employee compensation and

 

 

 

 

 

 

      benefits expense

 

$

608

 

$

544

   Occupancy and equipment expense

 

 

177

 

 

148

   Other general, administrative and

 

 

 

 

 

 

      other expense

 

 

483

 

 

434

   Total noninterest expense

 

$

1,268

 

$

1,126

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months

 

 

 

Ended September 30,

 

 

 

2002

 

 

2001

   Employee compensation and

 

 

 

 

 

 

      benefits expense

 

$

1,860

 

$

1,694

   Occupancy and equipment expense

 

 

516

 

 

438

   Other general, administrative and

 

 

 

 

 

 

      other expense

 

 

1,497

 

 

1,321

   Total noninterest expense

 

$

3,873

 

$

3,453

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHARGE-OFFS

 

 

 

 

 

 

 

 

 

For the Nine Months

 

 

 

Ended September 30,

 

 

 

2002

 

 

2001

   Loan charge-offs

 

$

115

 

$

216

   Recoveries on loans

 

 

55

 

 

106

   Net loan charge-offs

 

 

60

 

 

110