The Middlefield Banking Company

The Middlefield Banking Company

 

Middlefield Banc Corp. 2012 Press Releases

Middlefield Banc Corp. Reports 84% Increase in Net Income for First Six Months of 2012

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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: July 26, 2012

MIDDLEFIELD, OHIO Middlefield Banc Corp. (OTCQB:  MBCN), parent company of The Middlefield Banking Company and Emerald Bank, announced net income for the second quarter of 2012 of $1,640,000, or $0.85 per share.  Net income for the second quarter of 2011 was $720,000, or $0.44 per share.  Net income for the first six months of 2012 was $3,163,000, or $1.72 per share.  For the same period of 2011, net income of $1,722,000 equated to $1.05 per share.

Annualized returns on average equity (“ROE”) and average assets (“ROA”) for the 2012 second quarter were 13.22% and 1.01%, respectively, compared with 7.22% and 0.45% for the second quarter of 2011.  ROE and ROA were 13.02% and 0.97%, respectively, for the six month period of 2012.  Comparable results for the 2011 six month period were 8.89% and 0.55%, respectively.

“We are pleased to report a solid increase in earnings for the second quarter and first half of 2012,” stated Thomas G. Caldwell, President and Chief Executive Officer. “To have been able to achieve these results during a period of continued economic and regulatory uncertainty is testament to our strong staff and keen community banking focus.”

“We have continued to see many positive trends in our operations during the second quarter.  In spite of the current interest rate environment, which the Fed has chosen to keep at record low levels, and strong competitive pricing, we have been able to maintain a level of stability in our net interest margin.  As we move forward in 2012, we will continue to remain firmly focused on delivering excellent customer service, increasing value to our shareholders, and operating our company under safe and sound banking principles,” Caldwell concluded.

Net Interest Income

Net interest income for the second quarter of 2012 increased $460,000, or 9.0%, to $5,577,000 compared to $5,117,000 in the second quarter of 2011.  The net interest margin increased 29 basis points to 3.93% compared to the 3.64% reported for the year-ago quarter.  Net interest income for the first six months of 2012 increased by $988,000, or 9.7%, to $11,123,000.  For the same period of 2011, net interest income was $10,135,000.  The net interest margin for the 2012 six month period was 3.91%, a 25 basis point increase from the 3.66% reported for 2011.

“The improvement in our net interest income was driven by deliberate strategies initiated by management near the end of 2009.  This included an effort to maintain the maximum yield on newly originated loans, while pricing deposits so as to reduce funding costs,” commented Donald L. Stacy, Chief Financial Officer.  “However, the challenges relative to consistent net interest margin improvement are far from over.  The Fed’s policy of maintaining a continued low rate environment has led to aggressive pricing on the part of many of our competitors.  These market pressures have contributed to a 23 basis point decrease in our yield on earning assets for the six month period.  We have been able to offset this decline because our cost of interest-bearing liabilities has fallen 49 basis points for the same period.”

Non-Interest Income and Operating Expenses

Non-interest income increased for both the three and six month periods.  During the second quarter, the company recorded a gain of $296,000 related to the sale of certain investment securities.  In 2011, a loss on securities of $37,000 was booked during the second quarter, with the six month figure reflecting a loss of $22,000.  Also, for the six month period, fees related to debit cards increased $72,000, while income from investment services grew $68,000.

Noninterest expense for the second quarter of 2012 totaled $4,041,000, a decrease of $251,000 from the same period last year.  The two largest components of this decrease were salaries and benefits, which was down $144,000, and loss on the sale of other real estate owned which improved by $291,000.  For the first half of 2012, total non-interest expense of $7,823,000 was $174,000 less than the 2011 comparable period.  As with the quarter, a decrease in salaries and benefits combined with a lower loss on sale of other real estate owned were the primary factors. 

Balance Sheet

The company’s total assets at mid-year 2012 stood at $649.8 million, a decrease of $4.7 million, or 0.7%, from the figure reported at December 31, 2011.  Net loans at June 30, 2012 were $403.1 million, up $8.1 million, or 2.0%, over the year-end 2011 position.  Total deposits stood at $571.7 million as of June 30, 2012.  This figure represents a decrease of $9.2 million, or 1.6%, from year-end 2011.  The investment portfolio, which is entirely classified as available for sale, stood at $173.4 million at June 30, 2012.  This reflects a decrease of $20.5 million from December 31, 2012, with the funds being utilized for loan growth and deposit run-off.  Stockholders’ equity at June 30, 2012, was $53.2 million.  Tangible book value per share was $24.47. 

Asset Quality    

For the three months ended June 30, 2012, management added $450,000 to the allowance for loan losses, which compares to $700,000 for the same period of 2011.  The comparable six months figures are $1,050,000 for 2012 and $1,565,000 for 2011.  The lower loan loss provision was related to a lower level of charge-offs and a decrease in the total of non-performing assets.  Net charge-offs for the first six months of 2012 were $117,000, or 0.03% of average loans.  The allowance for loan losses at June 30, 2012 stood at $7,752,000, or 1.89% of total loans.  At June 30, 2011, the allowance for loan losses was $7,027,000, representing 1.82% of total loans. 

The following table provides a summary of asset quality and reserve coverage ratios.

Asset Quality History
(dollars in thousands)
                                       
6/30/2012     12/31/2011     6/30/2011   12/31/2010     12/31/2009
                       
Nonperforming loans $ 17,177 $ 24,546 $ 22,469 $ 19,986 $ 16,285
Real estate owned   1,986   2,196   2,145   2,302   2,164
Nonperforming assets $ 19,163 $ 26,742 $ 24,614 $ 22,288 $ 18,449
Allowance for loan losses $ 7,752 $ 6,819 $ 7,027 $ 6,221 $ 4,937
   
Ratios:
Nonperforming loans to total loans 4.18% 6.11% 5.83% 5.37% 4.61%
Nonperforming assets to total assets 2.95% 4.09% 3.85% 3.53% 3.30%
Allowance for loan losses to total loans 1.89% 1.70% 1.82% 1.67% 1.40%
Allowance for loan losses tononperforming loans 45.13% 27.78% 31.27% 31.13% 30.32%

Dividends   

During the second 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 $649.8 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
June 30, 2012 and 2011 and December 31, 2011
 
  (unaudited) (unaudited)
Balance Sheet (period end) June 30, December 31, June 30,
(Dollar amounts in thousands) 2012   2011   2011
   
Assets                
Cash and due from banks $ 30,908 $ 15,730 $ 15,540
Federal funds sold 11,953 18,660 19,364
   Cash and cash equivalents 42,861     34,390     34,904
Investment securities available for sale 173,446 193,977 193,821
Loans: 410,868 401,880 385,339
Less:  reserve for loan losses 7,752 6,819 7,027
      Net loans 403,116   395,061   378,312
Premises and equipment 8,598 8,264 7,939
Goodwill 4,559 4,559 4,559
Bank-owned life insurance 8,394 8,257 8,118
Accrued interest receivable and other assets 8,866 10,043 11,921
Total Assets $ 649,840   $ 654,551   $ 639,574
     
     
Liabilities and Stockholders' Equity
Noninterest-bearing demand deposits $ 65,969 $ 63,348 $ 58,219
Interest-bearing demand deposits 61,935 55,853 55,315
Money market accounts 67,533 75,621 74,482
Savings deposits 171,150 167,207 160,141
Time deposits 205,142 218,933 221,588
   Total Deposits   571,729     580,962     569,745
Short-term borrowings 6,959 7,392 6,787
Other borrowings 16,363 16,831 18,694
Accrued interest and other liabilities 1,631 2,113 2,045
   Total Liabilities 596,682   607,298   597,271
     
Common equity 33,944 31,240 29,485
Retained earnings 20,399 18,206 16,712
Accumulated other comprehensive income 5,549 4541 2,840
Treasury stock (6,734) (6,734) (6,734)
   Total Stockholders' Equity 53,158   47,253   42,303
     
Total Liabilities and Stockholders' Equity $ 649,840 $ 654,551 $ 639,574
     
     
MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
June 30, 2012 and 2011
(Dollar amounts in thousands)
(unaudited)
     
For the Three Months Ended For the Six Months Ended
June 30,    June 30,
2012 2011 2012 2011
INTEREST INCOME
   Interest and fees on loans $ 5,641 $ 5,399 $ 11,178 $ 10,700
   Interest-bearing deposits in other institutions 8 2 12 4
   Federal funds sold 4 4 7 13
   Investment securities    
      Taxable interest 791 1,289 1,706 2,612
      Tax-exempt interest 753 702 1,500 1,400
   Dividends on FHLB Stock 26 25 52 51
      Total interest income   7,223   7,421   14,455   14,780
INTEREST EXPENSE
   Deposits 1,434 2,004 2,931 4,041
   Short-term borrowings 99 59 158 118
   Other borrowings 82 104 166 213
   Trust preferred securities 31 137 77 273
      Total interest expense 1,646 2,304 3,332 4,645
     
NET INTEREST INCOME 5,577 5,117 11,123 10,135
     
Provision for loan losses 450 700 1,050 1,565
NET INTEREST INCOME AFTER PROVISION
   FOR LOAN LOSSES 5,127 4,417 10,073 8,570
NONINTEREST INCOME
   Service charges on deposits 471 416 902 844
   Earnings on bank-owned life insurance 69 66 137 139
   Other income 181 149 476 332
   Net securities gains (losses) 296 (37) 296 (22)
      Total non-interest income 1017 594 1,811 1,293
NONINTEREST EXPENSE
   Salaries and employee benefits 1,800 1,944 3,550 3,634
   Occupancy expense 222 223 470 495
   Equipment expense 201 155 371 313
   Data processing costs 191 173 390 353
   Ohio state franchise tax 128 97 257 225
   Federal deposit insurance expense 258 272 501 497
   Professional fees 186 185 400 396
   Loss on sale of other real estate owned 32 323 50 303
   Other operating expense 1023 920 1,834 1,781
      Total non-interest expense 4,041 4,292 7,823 7,997
     
Income before income taxes 2103     719     4,061     1,866
Provision for income taxes 463 (1) 898 144
NET INCOME $ 1640 $ 720 $ 3,163 $ 1,722
     
     
For the Three Months Ended For the Six Months Ended
 June 30,    June 30,
2012 2011 2012 2011
  (unaudited) (unaudited) (unaudited) (unaudited)
Per common share data
Net income per common share - basic $ 0.85 $ 0.44 $ 1.72 $ 1.05
Net income per common share - diluted $ 0.85 $ 0.44 $ 1.72 $ 1.05
Dividends declared $ 0.26 $ 0.26 $ 0.52 $ 0.52
Book value per share(period end) $ 26.88 $ 25.58 $ 26.88 $ 25.58
Tangible book value per share (period end) $ 24.47 $ 22.82 $ 24.47 $ 22.82
Dividend payout ratio 31.28% 56.94% 30.67% 49.36%
Average shares outstanding - basic 1,919,333 1,647,771 1,841,657 1,634,901
Average shares outstanding -diluted 1,921,205 1,647,920 1,842,865 1,634,976
Period ending shares outstanding 1,977,321 1,653,660 1,977,321 1,653,660
     
Selected ratios
Return on average assets 1.01% 0.45% 0.97% 0.55%
Return on average equity 13.22% 7.22% 13.02% 8.89%
Yield on earning assets 5.01% 5.17% 5.00% 5.23%
Cost of interest-bearing liabilities 1.24% 1.71% 1.25% 1.74%
Net interest spread 3.78% 3.46% 3.76% 3.49%
Net interest margin 3.93%   3.64% 3.91% 3.66%
Efficiency (1) 57.88% 70.68% 57.07% 65.82%
Equity to assets at period end 8.18% 6.61% 8.18% 6.61%
     
(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.
     
     
June 30, June 30,    
Asset quality data 2012 2011    
(Dollar amounts in thousands)
Non-accrual loans $ 15,310  $ 19,155
Troubled debt restructuring 1,731 3,198
90 days past due and accruing 136 116
Non-performing loans 17,177       22,469
Other real estate owned 1,986 2,145
Non-performing assets $ 19,163     $ 24,614
     
Allowance for loan losses $ 7,752 $ 7,027        
Allowance for loan losses/total loans 1.89%   1.82%      
Net charge-offs:
   Quarter-to-date $ (35) $ 358        
   Year-to-date 117 759    
Net charge-offs to average loans        
   Quarter-to-date -0.01% 0.09%
   Year-to-date 0.03% 0.20%
Non-performing loans/total loans 4.18% 5.83%    
Allowance for loan losses/non-performing loans 45.13% 31.27%    
     
     
  June 30, June 30,
Loans 2012 2011
(Dollar amounts in thousands)
Commercial and industrial   $ 65,651    $ 58,665
Real estate - construction 20,409 19,952
Real estate - moretgage      
   Residential 207,080 209,115
   Commercial 113,383       92,851
Consumer installment 4,345 4,756
Total Loans   $ 410,868    $ 385,339
The Middlefield Banking Company, Member FDICEqual Housing Lender 
Copyright © 2004- Middlefield Banc Corp.
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