The Middlefield Banking Company

The Middlefield Banking Company

 

Middlefield Banc Corp. 2012 Press Releases

Middlefield Banc Corp. Reports Record Earnings Performance for 2011

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Contact Info:

James R. Heslop, 2nd
Middlefield Banc Corp.
Executive Vice President/Chief Operating Officer
(440) 632-1666 Ext. 3219
Date: February 7, 2012

MIDDLEFIELD, OHIO, Middlefield Banc Corp. (OTCQB:  MBCN), parent of The Middlefield Banking Company and Emerald Bank, today reported financial results for the fourth quarter and full year ended December 31, 2011.

Net Income for the fourth quarter was $1,329,000, an increase of 91.5% from the $694,000 reported for the fourth quarter of 2010.  For the twelve months of 2011 net income totaled $4,130,000, a 64.1% increase from net income of $2,517,000 for the year ended December 31, 2010.  Other notable results for the year include:

  • Total assets increased $22.4 million, or 3.5%, from December 31, 2010.
  • Net interest income in a year-to-year comparison grew $2.9 million or 16.1%.
  • Total deposits stood at $581.0 million, an increase of 2.8% from year-end 2010.
  • Net loans grew $28.3 million during the year, ending up 7.7%.
  • Efficiency ratio improved to 62.5% from 66.7% during 2011.
  • Diluted earnings per common share for the year were $2.45, up 53.1% from 2010's $1.60 per share.

Annualized returns on average equity ("ROE") and average assets ("ROA") for the quarter were 12.33% and 0.81%, respectively, compared with 6.80% and 0.43% for the fourth quarter of 2010.  ROE and ROA were 10.24% and 0.65%, respectively, for the twelve-month period of 2011.Comparable results for the 2010 twelve-month period were 6.44% and 0.41%, respectively.

"We are pleased to report record earnings during 2011.  The $4.1 million of net income for the year is indicative of our continued focus on maintaining the financial strength of our company, which is a fundamental key to all we do," stated Thomas G. Caldwell, President and Chief Executive Officer, "We have seen continued improvement in our net interest margin and our efficiency ratio.  The success that we experienced during 2011 is a direct result of the efforts of the entire team at Middlefield Banc Corp." 

"Looking forward, the core of our company is strong.  We are confident of our abilities to address the three primary threats expected for the near-term, being a continued sluggish economy, historically low interest rates, and increased regulatory costs, especially those associated with increased compliance regulations," continued Caldwell.  "Despite these challenges, we will continue to remain focused on delivering excellent customer service, increasing value to our shareholders, and operating our company under safe and sound banking principles." 

Net Interest Income

Net interest income for the fourth quarter of 2011 increased $654,000, or 13.4%, to $5,546,000 compared to $4,892,000 in the fourth quarter of 2010.  The net interest margin increased 26 basis points to 3.73% compared to the 3.47% reported for the year-ago quarter.  Net interest income for the year 2011 increased by $2,926,000, or 16.1%, to $21,075,000 compared to the $18,149,000 for the full year of 2010.  The net interest margin for 2011 stood at 3.65%, a 24 basis point increase from the 3.41% reported for 2010.

The improvement in net interest income was driven by an increase in loans outstanding and deliberate pricing strategies to lower deposit funding costs.  While market pressures contributed to a 27 basis point decrease in yield on earning assets during 2011, the company's cost of interest bearing liabilities dropped 52 basis points. 

Non-Interest Income and Operating Expenses

Non-interest income declined for both the three and twelve month periods.  The comparative decreases on deposit service charges of $250,000 and $272,000, for the respective three and twelve month periods, are driven by the implementation of new governmental regulations.  These rules limit a bank's ability to charge fees for the payment of overdrafts for debit and ATM card transactions.  The company also experienced a loss of $173,000 during 2011 related to the sale of certain investment securities.  This loss was directly related to the re-positioning of the securities portfolio to a lower level of private label mortgage-backed securities. 

Operating expenses decreased by 1.0%, or $37,000 for the quarter while increasing $738,000, or 5.0% for 2011 over comparable periods of 2010.  Expense increases in salaries and employee benefits were directly related to the growth of the company.  In addition to normal wage increases and an increase in health insurance costs, the company increased staffing levels in loan administration, credit analysis, and special assets.  Data processing costs were lower for both the three and twelve-month periods.  During 2010 the company entered into a new contractual agreement for the provision of core processing, which resulted in lowering overall cost.  Other cost increases during 2011 were tied to the company's efforts to reduce its inventory of other real estate owned and to the maintenance of those properties, as well as general collection expenses.

Balance Sheet

The company's total assets ended 2011 at $654.6 million, an increase of 3.5% over the $632.2 million in total assets reported at December 31, 2010.  Net loans at December 31, 2011, were $394.6 million, up $28.3 million, or 7.7%, over the $366.3 million reported at December 31, 2010.  Total deposits at year-end 2011 were $581.0 million, or 2.8% 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 $194.0 million at December 31, 2011.  This figure represented a decline in balances in that portfolio of $7.8 million from the prior year-end. 

Asset Quality

The provision for loan losses for the three month period ended December 31, 2011 was $600,000, compared to the $1,225,000 posted for the fourth quarter of 2010.  For the year ended December 31, 2011, the provision was $3,085,000, while that for the full year 2010 was $3,580,000.  "When considering the continued economic malaise, we believe it to be prudent to continue a high level of provision to address potential credit quality issues," said Donald L. Stacy, Chief Financial Officer of Middlefield Banc Corp.  "We have also increased staffing levels with a keenly focused directive to improve asset quality performance metrics, which have continued to be elevated above our historical performance." 

The loan loss provision, which has significantly outpaced loan charge-offs, has strengthened the allowance for loan losses.  The ratio of the allowance for loan losses to total loans increased to 1.70% of total loans at December 31, 2011 compared to the 1.67% reported at December 31, 2010.

Shareholders' Equity

Tangible book value per share increased from $21.03 per share at December 31, 2010 to $24.23 per share at December 31, 2011.  The increase is the result of net income and mark-to-market adjustments in investment securities, offset by cash dividends paid to shareholders.  During 2011, the company paid cash dividends of $1.04 per share, which equaled the amount paid in 2010. 

Middlefield Banc Corp., headquartered in Middlefield, Ohio, is a multi-bank holding company with total assets of $654.6 million.  The company's lead bank, The Middlefield Banking Company, operates full service banking centers and a LPL Financial 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 atwww.middlefieldbank.comandwww.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
December 31, 2011 and December 31, 2010
       
    (unaudited)  
Balance Sheet (period end) December 31, December 31,
(Dollar amounts in thousands)      2011      2010
 
Assets
Cash and due from banks $ 16,235 $ 10,473
Federal funds sold 18,660 20,162
Interest-bearing deposits in other institutions 0 0
Cash and cash equivalents 34,895 30,635
Investment securities available for sale 193,977 201,772
Loans: 401,375 372,498
Less: allowance for loan losses 6,819 6,221
Net loans 394,556 366,277
Premises and equipment 8,264 8,179
Goodwill 4,559 4,559
Bank-owned life insurance 8,257 7,979
Accrued interest receivable and other assets 10,043 12,796
Total Assets   $ 654,551 $ 632,197
   
December 31, December 31,
2011 2010
Liabilities and Stockholders' Equity
Non-interest bearing demand deposits   $ 63,348 $ 53,391
Interest bearing demand deposits 55,853 48,869
Money market accounts 75,621 71,105
Savings deposits 167,207 146,993
Time deposits 218,933 244,893
Total Deposits 580,962 565,251
Short-term borrowings 7,392 7,632
Other borrowings 16,831 19,321
Other liabilities 2,113 1,971
Total Liabilities 607,298 594,175
 
Common equity 31,240 28,429
Retained earnings 18,206 15,840
Accumulated other comprehensive income 4,541 487
Treasury stock (6,734) (6,734)
Total Stockholders' Equity 47,253 38,022
 
Total Liabilities and Stockholders' Equity   $ 654,551 $ 632,197

 

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
December 31, 2011 and December 31, 2010
(Dollar amounts in thousands)
(unaudited) (unaudited)
Income Statement For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
     2011      2010      2011      2010
INTEREST INCOME        
Interest and fees on loans   $ 5,599 $ 5,363 $ 21,854 $ 21,084
Interest-bearing deposits in other institutions     6   5   14   15
Federal funds sold (1) 14 12 52
Investment securities
Taxable interest 1,030 1,353 4,862 5,185
Tax-exempt interest 759 709 2,883 2,650
Dividends on stock 26 26 102 108
Total interest income 7,419 7,470 29,727 29,094
INTEREST EXPENSE
Deposits 1,590 2,255 7,467 9,504
Short term borrowings 58 63 235 249
Other borrowings 87 122 400 642
Trust preferred securities 138 138 550 550
Total interest expense 1,873 2,578 8,652 10,945
NET INTEREST INCOME 5,546 4,892 21,075 18,149
Provision for loan losses 600 1,225 3,085 3,580
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 4,946 3,667 17,990 14,569
NONINTEREST INCOME
Service charges on deposits 213 463 1,512 1,784
Net securities gains (losses) (157) (34) (173) 11
Earnings on bank-owned life insurance 69 69 278 273
Other income 133 136 620 555
Total non-interest income 258 634 2,237 2,623
NONINTEREST EXPENSE
Salaries and employee benefits 1,845 1,644 7,233 6,411
Occupancy expense 216 229 953 946
Equipment expense 68 68 556 626
Data processing costs 178 168 693 743
Ohio state franchise tax 110 (56) 461 348
Federal deposit insurance expense 293 577 966 1,166
Professional fees 223 188 800 678
Loss on sale of other real estate owned (1) 33 497 783
Other operating expense 666 784 3,342 3,062
Total non-interest expense 3,598 3,635 15,501 14,763
Income before income taxes 1,606 666 4,726 2,429
Provision (benefit) for income taxes 277 (28) 596 (88)
NET INCOME   $ 1,329 $ 694 $ 4,130 $ 2,517

 

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
December 31, 2011 and December 31, 2010
      
     (unaudited) (unaudited)
  For the Twelve Months Ended For the Twelve Months Ended
       December 31,   December 31,
Per common share data 2011      2010      2011      2010
Net income per common share - basic   $ 0.76 $ 0.44 $ 2.45 $ 1.60
Net income per common share - diluted   $ 0.76 $ 0.44 $ 2.45 $ 1.60
Dividends declared   $ 0.26 $ 0.26 $ 1.04 $ 1.04
Book value per share (period end)   $ 26.81 $ 23.90 $ 26.81 $ 23.90
Tangible book value per share (period end)   $ 24.23 $ 21.03 $ 24.23 $ 21.03
Dividend payout ratio 34.46% 59.28% 42.71% 65.04%
Average shares outstanding - basic 1,756,157 1,585,454 1,683,052 1,575,213
Average shares outstanding - diluted 1,756,157 1,585,454 1,683,052 1,575,821
Period ending shares outstanding 1,762,338 1,591,023 1,762,338 1,591,023
 
Selected ratios
Return on average assets 0.81% 0.43% 0.65% 0.41%
Return on average equity 12.33% 6.80% 10.24% 6.44%
Yield on earning assets 4.90% 5.17% 5.05% 5.32%
Cost of interest bearing liabilities 1.34% 1.88% 1.58% 2.11%
Net interest spread 3.56% 3.29% 3.47% 3.22%
Net interest margin 3.73% 3.47% 3.65% 3.41%
Efficiency (1) 58.08% 61.69% 62.51% 66.69%
Equity to assets at period end 7.27% 6.01% 7.27% 6.01%
 
(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.

 

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
December 31, 2011 and December 31, 2010
(Dollar amounts in thousands)
       
     December 31,      December 31,
Asset quality data 2011 2010
(Dollar amounts in thousands)
Non-accrual loans   $ 16,804 $ 18,399
Troubled debt restructuring 7,423 1,587
90 day past due and accruing 319 -
Non-performing loans 24,546 19,986
Other real estate owned 2,196 2,302
Non-performing assets   $ 26,742 $ 22,288
 
Allowance for loan losses   $ 6,819 $ 6,221
Allowance for loan losses/total loans 1.70% 1.67%
Net charge-offs:
Quarter-to-date   $ 1,355 $   975
Year-to-date 2,487 2,296
Net charge-offs to average loans
Quarter-to-date 0.34% 0.26%
Year-to-date 0.65% 0.63%
Non-performing loans/total loans 6.12% 5.37%
Allowance for loan losses/non-performing loans     27.78%   31.13%
Non-performing assets/total assets 4.09% 3.53%
     
December 31, December 31,
Loans 2011 2010
Commercial and industrial   $ 59,185 $ 57,501
Real estate - construction 21,545 15,845
Real estate - mortgage
Residential 207,634 209,863
Commercial 108,502 84,304
Consumer installment 4,509 4,985
Total Loans   $ 401,375 $ 372,498
The Middlefield Banking Company, Member FDICEqual Housing Lender 
Copyright © 2004- Middlefield Banc Corp.
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