Middlefield Banc Corp. Reports 47.7% Increase in 2nd Quarter Earnings

Middlefield Banc Corp. 2004 Press Releases

Font Size 
Facebook Icon   Twitter Icon   Email Icon   Printer Icon
Contact Info: James R. Heslop, 2nd
Executive Vice President/Chief Operating Officer
440.632.1666 Ext. 3219
Date: July 19, 2004

MIDDLEFIELD, OHIO   

Middlefield Banc Corp. (Pink Sheets: MBCN) today reported net earnings for the three months ended June 30, 2004 of $908,518, or $0.74 per diluted share. The second quarter 2004 earnings represent an increase of 47.7% over the $614,950, or $0.51 per diluted share, in net earnings that the company recorded for the quarter ended June 30, 2003.

For the six months ended June 30, 2004, Middlefield Banc Corp. recorded net earnings of $1,593,776, or $1.29 per diluted share, an increase of 25.7% over the $1,267,696, or $1.04 per diluted share, in net earnings for the first six months of 2003.

The company's total assets ended the second quarter of 2004 at $280.5 million, an increase of 12.2% over the $249.9 million in total assets recorded at June 30, 2003, and 2.5% over the $273.5 million in assets on the books at March 31, 2004. Net loans at June 30, 2004 were $200.5 million, up 11.4% over the $179.9 million in net loans at June 30, 2003. The investment portfolio at June 30, 2004, stood at $55.6 million, an increase of 37.4% from the June 30, 2003 balance of $40.5 million.

Funding for the asset growth was centered in a 14.5% increase in deposit totals in the year-to-year comparison. At mid-year 2004, deposits were $236.0 million, which was $29.9 million more that June 30, 2003's $206.1 million. Other funding sources, including Federal Home Loan Bank borrowings experienced a decline in the mid-year comparison.

Return on average assets (ROA) was 1.31% and 1.17%, respectively, for the second quarter and year-to-date 2004, as compared to 1.01% and 1.07% for both periods of 2003. Return on average equity (ROE) was 14.94% for the quarter and 13.33% for the first six months of 2004. This compares to 2003 figures of 11.78% and 11.75%. The company's net interest margin for the quarter and year-to-date are 3.90% and 3.94%, respectively. These compare to 3.84% for both periods in 2003. 

In reviewing Middlefield Banc Corp.'s results for the first six months, President and CEO Thomas G. Caldwell said, "We are generally pleased with the results to this point in the year. Although our total loan growth slowed in the second quarter, our focus on net interest margin, while dealing with pressure from low interest rates, benefited our bottom line. While our level of non-performing assets has risen slightly, this is attributable to a few distinct lending relationships that are being addressed. Our recoveries have once again outpaced our charge-offs and are reflective of our resolution efforts."

Commenting on the outlook for Middlefield Banc Corp., Caldwell noted, "A key focus for us is building our revenue areas not directly related to net interest income and expansion into market areas having high potential. While doing this, we remain focused on controlling our non-interest expenses. We are also pleased that loan demand started to increase near the end of the second quarter. Coupled with the higher interest rate environment, our outlook for the remainder of 2004 is positive."

Non-interest income showed a 35.7% increase for the quarter and a 39.2% upward movement for the first six months. In addition to normal service charge increases, the primary components of the overall increase were the income from bank-owned life insurance as well as the implementation of an overdraft privilege program during the second quarter of 2004.

Non-interest expense for the second quarter was $1.7 million, nominally above the $1.6 million recorded for the comparable quarter of 2003. The six-month figures for 2004 and 2003 are $3.5 million and $2.9 million, respectively. In addition to normal salary adjustments, the increase was driven by higher health insurance costs, the addition of a new branch office during the second quarter of 2003, and increased marketing as the bank subsidiary expands market presence.   

Middlefield Banc Corp. and The Middlefield Banking Company are headquartered in Middlefield, Ohio. The bank operates full service banking centers and a LPL Financial brokerage office serving Chardon, Garrettsville, Mantua, Middlefield, and Orwell, Ohio.

This announcement contains forward-looking statements that involve risk and uncertainties, including changes in general economic and financial market conditions and the Company’s ability to execute its business plans.  Although management believes the expectations reflected in such statements are reasonable, actual results may differ materially.

 
 

Middlefield Banc Corp.
Financial Highlights
Quarterly Data
(Dollars in thousands, except per share)
                   
                   
      June 2004     March 2004     June 2003
                   
Earnings:                
  Net interest income $ 2,477,236     $ 2,415,857     $ 2,175,419
  Provision for loan losses   30,000     30,000     105,000
  Non-interest income   485,889     396,719     358,102
  Security (losses) gains   0     0     0
  Non-interest expense   1,682,607     1,781,318     1,613,208
  Federal income taxes   342,000     316,000     200,363
  Net income $ 908,518   $ 685,258   $ 614,950
                   
Per share:                
  Basic earnings   0.74     0.56     0.51
  Diluted earnings   0.74     0.56     0.51
  Common dividends $ 257,818   $ 257,002   $ 231,025
  Book value   19.80     19.88     18.71
                   
Weighted average shares                
  outstanding:                
  Basic   1,228,039     1,224,453     1,214,057
  Diluted   1,235,829     1,231,269     1,217,239
                   
Period end balance sheet:                
  Assets $ 280,479,893   $ 273,508,774   $ 249,885,875
  Securities   56,189,796     51,084,891     40,507,881
  Total loans   203,103,305     201,925,285     182,418,551
  Allowance for loan losses   2,595,791     2,545,450     2,512,866
  Deposits   236,038,287     228,482,609     206,115,632
  Total shareholders' equity   24,315,949     24,340,651     22,709,943
  Total capital ratio   8.67%     8.90%     9.09%
                   
Average balance sheet:                
  Assets $ 276,994,334   $ 267,939,010   $ 244,241,700
  Earning assets   260,052,997     249,542,182     228,518,674
  Loans   201,722,951     195,705,724     181,863,235
  Deposits   232,269,556     222,942,737     200,987,836
  Shareholders' equity   24,328,300     23,922,157     20,882,567
                         
Key ratios (%):                
  Return on average assets (ROA)   1.31%     1.02%     1.01%
  Return on average shareholders'                
    equity (ROE)   14.94%     11.46%     11.78%
  Net interest margin   3.90%     4.00%     3.84%
  Net overhead   1.84%     2.22%     2.20%
  Efficiency ratio   56.78%     63.33%     63.67%
                   
Credit quality:                
  Non-accrual loans $ 432,308   $ 263,000   $ 509,545
  Restructured loans   0     0     0
  90 day past due and accruing   654,944     516,000     0
  Non-performing loans   1,087,252     779,000     509,545
  Other real estate owned   0     0     0
  Non-performing assets $ 1,087,252   $ 779,000   $ 509,545
                   
  Charge-offs $ 10,340   $ 11,620   $ 10,710
  Recoveries   30,680     5,800     28,965
  Net charge-offs (recoveries) $ (20,340)   $ 5,820   $ (18,255)
                   
  Allowance for loan losses as a percent                
    of period-end loans (%)   1.28%     1.26%     1.38%
  Net charge-offs (annualized) as a percent                
    of average loans (%)   -0.02%     0.01%     -0.02%
  Non-performing loans as a percent of                
    loans   0.54%     0.39%     0.28%
  Non-performing assets as a percent of                
    assets   0.39%     0.28%     0.20%

 
 

Middlefield Banc Corp.
Financial Highlights
Year-to-Date Data
(Dollars in thousands, except per share)
                   
                   
      June 2004     March 2004     June 2003
                   
Earnings:                
  Net interest income $ 4,893,093     $ 2,415,857     $ 4,311,909
  Provision for loan losses   60,000     30,000     210,000
  Non-interest income   882,608     396,719     634,139
  Security (losses) gains   0     0     542
  Non-interest expense   3,463,925     1,781,318     2,923,966
  Federal income taxes   658,000     316,000     544,928
  Net income $ 1,593,776   $ 685,258   $ 1,267,696
                   
Per share:                
  Basic earnings   1.30     0.56     1.05
  Diluted earnings   1.29     0.56     1.04
  Common dividends $ 514,820   $ 257,002   $ 462,334
  Book value   19.83     19.88     18.71
                   
Weighted average shares                
  outstanding:                
  Basic   1,226,394     1,224,453     1,213,997
  Diluted   1,233,697     1,231,269     1,216,821
                   
Period end balance sheet:                
  Assets $ 280,479,893   $ 273,508,774   $ 249,885,875
  Securities   56,189,797     51,084,891     40,507,882
  Total loans   203,103,305     201,925,285     182,418,551
  Allowance for loan losses   2,595,791     2,545,450     2,512,866
  Deposits   236,038,287     228,482,609     206,115,632
  Total shareholders' equity   24,315,949     24,340,651     22,709,943
  Total capital ratio   8.67%     8.90%     9.09%
                   
Average balance sheet:                
  Assets $ 271,424,671   $ 267,939,010   $ 237,073,107
  Earning assets   255,319,528     249,542,182     225,224,016
  Loans   198,714,337     195,705,724     178,782,048
  Deposits   227,606,146     222,942,737     194,162,968
  Shareholders' equity   23,910,132     23,922,157     21,581,058
                   
Key ratios (%):                
  Return on average assets (ROA)   1.17%     1.02%     1.07%
  Return on average shareholders'                
    equity (ROE)   13.33%     11.46%     11.75%
  Net interest margin   3.94%     4.00%     3.84%
  Net overhead   2.02%     2.22%     2.03%
  Efficiency ratio   59.97%     63.33%     59.11%
                   
Credit quality:                
  Non-accrual loans $ 432,308   $ 263,000   $ 509,545
  Restructured loans   0     0     0
  90 day past due and accruing   654,944     516,000     0
  Non-performing loans   1,087,252     779,000     509,545
  Other real estate owned   0     0     0
  Non-performing assets $ 1,087,252   $ 779,000   $ 509,545
                         
  Charge-offs $ 21,959   $ 11,620   $ 28,319
  Recoveries   36,480     5,800     30,700
  Net charge-offs (recoveries) $ (14,521)   $ 5,820   $ (2,381)
                   
  Allowance for loan losses as a percent                
    of period-end loans (%)   1.28%     1.26%     1.38%
  Net charge-offs (annualized) as a percent                
    of average loans (%)   -0.01%     0.01%     0.00%
  Non-performing loans as a percent of                
    loans   0.54%     0.39%     0.28%
  Non-performing assets as a percent of                
    assets   0.39%     0.28%     0.20%

 
 

Middlefield Banc Corp.Middlefield Banc Corp.
Consolidated Statements of Income
Quarterly Data
(Dollars in thousands, except per share data)
                     
                         
        June 2004     March 2004     June 2003
                     
INTEREST INCOME
  Loans (including fees) $ 3,385,891   $ 3,297,718   $ 3,209,192
  Deposits in other institutions   1,662     339     4,719
  Securities:                
    Taxable   339,046     357,477     275,853
    Exempt from federal income taxes   137,608     125,303     113,502
  Federal funds sold and other temp. investments 12,055     5,107     9,906
  Dividends on FHLB stock   12,935     12,984     12,926
    Total interest income   3,889,197     3,798,928     3,626,098
INTEREST EXPENSE
  Deposits   1,208,525     1,187,799     1,236,828
  Federal funds purchased and securities sold                
    under agreement to repurchase   181     658     1,049
  Federal Home Loan Bank advances   203,255     194,614     212,802
    Total interest expense   1,411,961     1,383,071     1,450,679
                     
    Net interest income   2,477,236     2,415,857     2,175,419
                     
  Provision for loan losses   30,000     30,000     105,000
                     
    Net interest income after provision for                
      loan losses   2,447,236     2,385,857     2,070,419
                     
NON-INTEREST INCOME
  Service charges on deposit accounts   381,121     281,479     251,910
  Security gains (losses)   0     0     0
  Other operating income   104,768     115,240     106,192
    Total non-interest income   485,889     396,719     358,102
                     
NON-INTEREST EXPENSE
  Salaries and employee benefits   790,815     920,803     810,919
  Net occupancy   118,839     144,481     106,492
  Equipment   99,274     93,986     57,586
  Data processing costs   84,616     129,345     70,958
  Ohio state franchise tax   82,500     82,500     75,000
  Other expense   506,563     410,203     492,253
    Total non-interest expense   1,682,607     1,781,318     1,613,208
  Income before federal income taxes   1,250,518     1,001,258     815,313
  Income tax expense   342,000     316,000     200,363
Net income $ 908,518   $ 685,258   $ 614,950
                     
NET INCOME PER COMMON SHARE:                
    Basic $ 0.74   $ 0.56   $ 0.48
    Diluted $ 0.74   $ 0.56   $ 0.48

 
 

Middlefield Banc Corp.
Consolidated Statements of Income
Year-to-Date Data
(Dollars in thousands, except per share data)
                     
                     
        June 2004     March 2004     June 2003
                     
INTEREST INCOME                
  Loans (including fees) $ 6,683,609   $ 3,297,718   $ 6,339,180
  Deposits in other institutions 2,001     339     11,820
  Securities:              
    Taxable 696,523     357,477     584,461
    Exempt from federal income taxes 262,911     125,303     233,092
  Federal funds sold and other temp. investments 17,162     5,107     19,213
  Dividends on FHLB stock   25,919     12,984     25,855
    Total interest income   7,688,125     3,798,928     7,213,621
INTEREST EXPENSE                
  Deposits   2,396,324     1,187,799     2,482,187
  Federal funds purchased and securities sold                
    under agreement to repurchase   839     658     3,339
  Federal Home Loan Bank advances   397,869     194,614     416,186
    Total interest expense   2,795,032     1,383,071     2,901,712
                     
    Net interest income   4,893,093     2,415,857     4,311,909
                     
  Provision for loan losses   60,000     30,000     210,000
                     
    Net interest income after provision for                
      loan losses   4,833,093     2,385,857     4,101,909
                     
NON-INTEREST INCOME                
  Service charges on deposit accounts   662,600     281,479     490,561
  Security gains (losses)   0     0     542
  Other operating income   220,008     115,240     143,578
    Total non-interest income   882,608     396,719     634,681
                     
NON-INTEREST EXPENSE                
  Salaries and employee benefits   1,711,618     920,803     1,457,390
  Net occupancy   263,320     144,481     205,044
  Equipment   193,260     93,986     137,612
  Data processing costs   213,961     129,345     187,430
  Ohio state franchise tax   165,000     82,500     150,050
  Other expense   916,766     410,203     786,440
    Total non-interest expense   3,463,925     1,781,318     2,923,966
Income before federal income taxes   2,251,776     1,001,258     1,812,624
Income tax expense   658,000     316,000     544,928
Net income $ 1,593,776   $ 685,258   $ 1,267,696
                     
NET INCOME PER COMMON SHARE:                
    Basic $ 1.30   $ 0.56   $ 1.05
    Diluted $ 1.29   $ 0.56   $ 1.04

 
 

Middlefield Banc Corp.
Consolidated Balance Sheets
(Dollars in thousands)
                 
                 
    June 2004     March 2004     June 2003
                 
ASSETS                
Cash and due from banks $ 4,900,236   $ 2,894,259   $ 6,102,703
Federal funds sold and other temp. investments.   4,221,065     5,505,000     8,809,402
Securities:                
  Available for sale   54,901,165     49,772,770     37,241,937
  Held to maturity   747,567     1,312,121     3,265,945
     Total securities   55,648,732     51,084,891     40,507,882
                 
Loans:   203,103,305     201,925,285     182,418,551
Less: reserve for loan losses   2,595,791     2,545,450     2,512,866
     Net loans   200,507,514     199,379,835     179,905,685
Premises and equipment   6,704,260     6,706,848     6,908,111
Accrued interest receivable and other assets   8,498,086     7,937,941     7,652,092
     Total assets $ 280,479,893   $ 273,508,774   $ 249,885,875
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Deposits:                
  Demand -- non-interest bearing $ 34,973,397   $ 29,889,636   $ 29,595,597
  Demand -- interest bearing   22,299,891     25,397,464     21,096,468
  Savings   75,001,599     71,017,095     54,867,549
  Time deposits   103,763,401     102,178,414     100,556,018
     Total deposits   236,038,288     228,482,609     206,115,632
Federal funds purchased and securities sold                
  under agreements to repurchase   115,102     436     399,176
Accrued expenses and other liabilities   932,556     957,511     667,174
Federal Home Loan Bank advances   19,077,999     19,727,567     19,993,950
     Total liabilities   256,163,945     249,168,123     227,175,932
Shareholders' equity:                
  Common stock, no par value; 5,000,000                
     shares authorized   10,286,211     10,153,493     8,006,055
  Retained earnings   16,164,824     15,514,124     15,856,470
  Accumulated other comprehensive income   (390,178)     417,943     592,327
  Treasury stock   (1,744,909)     (1,744,909)     (1,744,909)
     Total shareholders' equity   24,315,948     24,340,651     22,709,943
     Total liabilities and shareholders' equity $ 280,479,893   $ 273,508,774   $ 249,885,875
                 
Miscellaneous data:                
  Common shares issued   1,286,792     1,282,732     1,273,918
  Treasury shares   55,309     55,309     55,309
  Bank owned life insurance (in other assets) $ 5,317,241   $ 5,269,381   $ 5,068,286