Middlefield Banc Corp. First Quarter Earnings Increase 52% to $1.5 Million

Middlefield Banc Corp. 2012 Press Releases

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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: April 24, 2012

MIDDLEFIELD, OHIO Middlefield Banc Corp. (OTCQB:  MBCN), reported net income of $1.523 million for the quarter ended March 31, 2012, compared to $1.002 million for the quarter ended March 31, 2011, an increase of 52%. On a per share basis, the Company’s diluted earnings were $0.86 for the 2012 first quarter, as compared to $0.62 for the comparable period of 2011.

Annualized returns on average equity (“ROE”) and average assets (“ROA”) for the 2012 quarter were 12.81% and 0.94%, respectively, compared with 10.50% and 0.63% for the first quarter of 2011.

For the first three months of 2012, net interest income increased $528,000, or 10.5% from the same period last year. While interest income experienced a decline of $127,000, or 1.7%, interest expense was $655,000, or 28.0%, lower in the 2012 quarter as compared to the same period of 2011. The net interest margin for the three months ended March 31, 2012 was 3.89%, compared to 3.68% for the same period of the prior year.

For the three months ended March 31, 2012, management provided $600,000 to the allowance for loan losses, which compares to $865,000 for the same period of 2011. Net charge-offs for the 2012 first quarter were $152,000, or 0.04% of average loans. The allowance for loan losses at March 31, 2012 stood at $7.3 million, or 1.80% of total loans. At March 31, 2011, the allowance for loan losses was $6.7 million, representing 1.78% of total loans. Based on the evaluation of the adequacy of the allowance for loan losses, management believes that, at March 31, 2012, the allowance for loan losses was adequate and reflects probable losses in the loan portfolio.

Noninterest income for the first quarter of 2012 was $794,000. This was a modest increase of 13.6% from the comparable period of 2011. The primary factors in this increase were higher revenues from investment services and fees generated by increased debit card usage. Although deposit service charges increased year-over-year, the growth was tempered by rules eliminating certain automatic overdraft protection arrangements and the ability to charge fees for the payment of overdrafts for debit and ATM card transactions.

Noninterest expense for the first quarter of 2012 totaled $3.8 million, an increase of $77,000, or 2.1% from the same period last year. Salaries and benefits, the company’s largest noninterest expense, contributed $60,000 to the increase. This increase is largely related to the growth of the company, including increased staffing levels in regulatory compliance. Higher data processing costs and FDIC insurance expense were directly related to the growth of the company since the first quarter of 2011.  The limited growth in non-interest expense reflects management’s on-going efforts to control expenses.

“Having finished a record earnings year in 2011, we are very pleased to report continued strong earnings during the first quarter of 2012”, stated Thomas G. Caldwell, President and Chief Executive Officer, “We enjoyed positive growth in net interest income, while maintaining our focus on managing our non-interest expenses.”

“Our efforts during the quarter are further evidenced by our efficiency ratio, which is very positive for a community-based financial company. We are especially pleased that we achieved these results even as we increased staffing in an effort to address the increasing regulatory burden. Our focus remains on delivering excellence in customer service, increasing value to our shareholders, and operating our company in accordance with safe and sound banking practices,” Caldwell concluded.

Balance Sheet Growth

The company’s total assets as of March 31, 2012 stood at $657.9 million, an increase of 0.5% over the $654.6 million in total assets reported at December 31, 2011. Net loans at March 31, 2012, were $397.0 million, up $1.9 million, or 0.5%, over the $395.1 million reported at December 31, 2011. Total deposits at the end of the first quarter 2012 were $583.9 million, or 0.5 % greater than the deposit level of $581.0 million at December 31, 2011. Stockholders’ equity at March 31, 2012, was $48.5 million. Tangible book value per share as of March 31, 2012, was $24.78.

Dividends

During the first quarter of both 2012 and 2011, 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 $657.9 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 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
March 31, 2012 and 2011 and December 31, 2011
 (unaudited)  (unaudited)
Balance Sheet (period end)  March 31,  December 31,  March 31,
(Dollar amounts in thousands) 2012 2011 2011
           
ASSETS
Cash and due from banks $ 22,022 $ 15,730 $ 11,555
Federal funds sold 23,587 18,660 30,581
Cash and cash equivalents 45,609 34,390 42,136
Investment securities available for sale 183,770 193,977 189,640
Loans 404,269 401,880 376,529
Less allowance for loan losses 7,267 6,819 6,685
Net loans 397,002 395,061 369,844
Premises and equipment 8,368 8,264 8,053
Goodwill 4,559 4,559 4,559
Bank-owned life insurance 8,326 8,257 8,052
Accrued interest and other assets 10,315 10,043 13,553
Total Assets   $ 657,949 $ 654,551 $ 635,837
 
LIABILITIES
Noninterest-bearing demand $ 64,517 $ 63,348 $ 52,831
Interest-bearing demand 63,509 55,853 54,371
Money market 71,047 75,621 75,046
Savings 172,236 167,207 155,945
Time 212,633 218,933 230,411
Total deposits 583,942 580,962 568,604
Short-term borrowings 7,365 7,392 7,301
Other borrowings 16,561 16,831 18,956
Other liabilities 1,622 2,113 1,693
Total Liabilities 609,490 607,298 596,554
 
STOCKHOLDERS' EQUITY
Common stock 31,420 31,240 29,286
Retained earnings 19,272 18,206 16,418
Accumulated other comprehensive income 4,501 4,541 313
Treasury stock (6,734) (6,734) (6,734)
Total Stockholders' Equity 48,459 47,253 39,283
               
Total Liabilities and Stockholders' Equity   $ 657,949 $ 654,551 $ 635,837

 

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
March 31, 2012 and 2011
(Dollar amounts in thousands)
(unaudited)
   
For the Three Months Ended
Income Statement March31,
  2012   2011
INTEREST INCOME
Interest and fees on loans $ 5,537 $ 5,301
Interest-bearing deposits in other institutions 4 2
Federal funds sold 3 9
Investment securities:
Taxable interest 915 1,323
Tax-exempt interest 747 698
Dividends on FHLB stock 26 26
Total interest income 7,232 7,359
 
INTEREST EXPENSE
Deposits 1,497 2,037
Short term borrowings 59 59
Other borrowings 84 109
Trust preferred securities 46 136
Total interest expense 1,686 2,341
     
NET INTEREST INCOME 5,546 5,018
     
Provision for loan losses 600 865
 
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,946 4,153
 
NONINTEREST INCOME
Service charges on deposit accounts 431 428
Net securities gains - 15
Earnings on bank-owned life insurance 68 73
Other income 295 183
Total noninterest income 794 699
 
NONINTEREST EXPENSE
Salaries and employee benefits 1,750 1,690
Occupancy expense 248 272
Equipment expense 170 158
Data processing costs 199 180
Ohio state franchise tax 129 128
Federal deposit insurance expense 243 225
Professional fees 214 211
(Gain) Loss on sale of other real estate owned 27 (20)
Other expense 802 861
Total noninterest expense 3,782 3,705
     
Income before income taxes 1,958 1,147
Income taxes 435 145
           

NET INCOME

  $ 1,523 $ 1,002

 

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
March 31, 2012 and 2011
(unaudited)
   
For the Three Months Ended
March 31,
2012 2011
Per common share data    
Net income per common share - basic   $ 0.86 $ 0.62
Net income per common share - diluted   $ 0.86 $ 0.62
Dividends declared   $ 0.26 $ 0.26
Book value per share(period end)   $ 27.35 $ 23.86
Tangible book value per share (period end)   $ 24.78 $ 21.09
Dividend payout ratio 30.01% 40.92%
Average shares outstanding - basic 1,763,982 1,621,889
Average shares outstanding -diluted 1,764,585 1,621,889
Period ending shares outstanding 1,771,687 1,646,609
 
Selected ratios
Return on average assets 0.94% 0.63%
Return on average equity 12.81% 10.50%
Yield on earning assets 4.99% 5.28%
Cost of interest bearing liabilities 1.26% 1.77%
Net interest spread 3.74% 3.51%
Net interest margin 3.89% 3.68%
Efficiency (1) 56.24% 60.97%
Equity to assets at period end 7.37% 6.18%
 
(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.
     
 March 31,  March 31,
Asset quality data 2012 2011
(Dollar amounts in thousands)
           
Non-accrual loans $ 15,641 $ 19,017
Troubled debt restructuring 926 2,942
90 day past due and accruing 1,110 55
Non-performing loans 17,677 22,014
Other real estate owned 2,125 2,248

Non-performing assets

  $ 19,802 $ 24,262
           
Allowance for loan losses $ 7,267 $ 6,685
Allowance for loan losses/total loans 1.80% 1.78%
Net charge-offs:
Quarter-to-date $ 152 $ 401
Year-to-date 152 401
Net charge-offs to average loans
Quarter-to-date 0.04% 0.11%
Year-to-date 0.04% 0.11%
Non-performing loans/total loans 4.37% 5.85%
Allowance for loan losses/non-performing loans 41.11% 30.37%