• personal banking
  • business banking
  • online banking
  • investments
  • planning/tools

Middlefield Banc Corp. Reports Earnings for Second Quarter and Year-to-Date 2013

Middlefield Banc Corp. 2013 Press Releases

Font Size 
Facebook Icon   Twitter Icon   Email Icon   Printer Icon
Contact Info: James R. Heslop, 2nd
Middlefield Banc Corp.
Executive Vice President/Chief Operating Officer
440.632.1666 Ext. 3219
Date: July 31 2013

MIDDLEFIELD, OHIO, July 31, 2013 Middlefield Banc Corp. (OTCQB: MBCN) reported net income for the second quarter of 2013 of $1.69 million, or $0.83 per diluted share. Net income for the second quarter of 2012 was $1.64 million, or $0.85 per diluted share. Net income for the first six months of 2013 was $3.34 million, or $1.66 per diluted share. For the same period of 2012, net income of $3.16 million equated to $1.72 per diluted share.

Annualized returns on average equity ("ROE") and average assets ("ROA") for the 2013 second quarter were 12.47% and 1.02%, respectively, compared with 13.22% and 1.01% for the second quarter of 2012. ROE and ROA were 12.32% and 1.02%, respectively, for the six month period of 2013. Comparable results for the 2012 six month period were 13.02% and 0.97%, respectively.

"We are pleased to report stable earnings for the second quarter and first half of 2013," 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 improvement in our asset quality figures. This has permitted us to maintain a strong allowance relative to the portfolio, while reducing the provision expense relative to last year. As we move forward in 2013, 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 2013 was relatively flat when compared to the second quarter of 2012. For the six month periods of 2013 and 2012, the same was true. The 2013 six month period saw net interest income of $11.18 million as compared to $11.12 million for the same period of 2012. The net interest margin decreased 5 basis points to 3.88% compared to the 3.93% reported for the year-ago quarter. The net interest margin for the 2013 six month period was 3.90%, a 1 basis point decrease from the 3.91% reported for 2012.

"The Fed's policy, now in its fifth year, of holding interest rates at historic lows continues to have an impact on the net interest margin. We are finding extremely aggressive pricing on both new loans as well as on refinancing opportunities. We have chosen to control our growth so as to maximize profitability, while not becoming locked in to long-term, low-rate assets. Further, we fully recognize the community-based focus of our funding sources and have continued our efforts to control the costs of our liabilities," commented Donald L. Stacy, Chief Financial Officer.

Noninterest Income and Operating Expenses

Noninterest income decreased for both the three and six month periods. The company experienced increases in revenue from deposit services charges and in other income which was offset by a decrease in the recognized gains on investment securities. During the second quarter of 2012, a gain of $296,000 related to the sale of certain investment securities was recognized. In 2013, a loss on securities of $10,000 was booked during the second quarter, with the six month figure reflecting a gain of $175,000.

Noninterest expense for the second quarter of 2013 totaled $3.95 million, a decrease of $93,000 from the same period in the prior year. Increases in salaries and employee benefits, occupancy, franchise tax and professional fees were nearly equally matched by reductions in Federal deposit insurance premiums, equipment expense, and the recognition of a gain on the disposition of other real estate owned. For the first half of 2013, total noninterest expense of $7.95 million was $126,000 more than the 2012 comparable period. The primary factors were nearly consistent with those of the second quarter.

Balance Sheet

The company's total assets at mid-year 2013 stood at $657.8 million, a decrease of $12.5 million, or 1.9%, from the figure reported at December 31, 2012. Net loans at June 30, 2013 were $404.7 million, up $4.0 million, or 1.0%, over the year-end 2012 position. Total deposits stood at $585.4 million as of June 30, 2013. This figure represents a decrease of $7.9 million, or 1.3%, from year-end 2012. The investment portfolio, which is entirely classified as available for sale, stood at $179.8 million at June 30, 2013. This reflects a decrease of $14.7 million from December 31, 2012, with the funds being utilized for loan growth and deposit run-off.

Shareholders' Equity and Dividends

At June 30, 2013, shareholders' equity totaled $52.6 million, a decrease of $600,000, or 1.1%, from the $53.2 million reported at June 30, 2012. This change primarily results from certain mark-to-market adjustments in securities available for sale due to increases in long-term interest rates, offset by an increase in retained earnings. Tangible book value per share at June 30, 2013 was $23.66. The comparable figure at June 30, 2012, was $24.47. The decrease in tangible book value per share was also the result of the aforementioned mark-to-market adjustments in securities available for sale. Shareholders received a cash dividend of $0.26 per share in both the second quarter of 2013 and 2012.

Asset Quality

For the three months ended June 30, 2013, management added $300,000 to the allowance for loan losses, which compares to $450,000 for the same period of 2012. The comparable six months figures are $613,000 for 2013 and $1,050,000 for 2012. Net charge-offs for the first six months of 2013 were $643,000, or 0.16% of average loans. The allowance for loan losses at June 30, 2013 stood at $7.75 million, or 1.88% of total loans. At June 30, 2012, the allowance for loan losses was $7.75 million, representing 1.89% of total loans.

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

Asset Quality History
(dollars in thousands)
             
6/30/2013 12/31/2012 6/30/2012 12/31/2011 12/31/2010
Nonperforming loans     $ 12,869     $ 14,194     $ 17,177     $ 24,546     $ 19,986
Real estate owned 2,361 1,846 1,986 2,196 2,302
Nonperforming assets $ 15,230 $ 16,040 $ 19,163 $ 26,742 $ 22,288
Allowance for loan losses $ 7,749 $ 7,779 $ 7,752 $ 6,819 $ 6,221
Ratios:
Nonperforming loans to
total loans 3.12% 3.48% 4.18% 6.12% 5.37%
Nonperforming assets to
total assets 2.32% 2.39% 2.95% 4.09% 3.52%
Allowance for loan losses to
total loans 1.88% 1.90% 1.89% 1.70% 1.67%
Allowance for loan losses to
nonperforming loans 60.21% 54.80% 45.13% 27.78% 31.13%

Middlefield Banc Corp. headquartered in Middlefield, Ohio is a multi-bank holding company with total assets of $657.8 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, 2013 and 2012 and December 31, 2012
(unaudited) (unaudited)
Balance Sheet (period end) June 30, December 31, June 30,
(Dollar amounts in thousands) 2013 2012 2012
Assets
Cash and due from banks     $ 22,052     $ 33,568     $ 30,908
Federal funds sold 18,377 11,778 11,953
Cash and cash equivalents 40,429 45,346 42,861
Investment securities available for sale 179,757 194,472 173,446
Loans: 412,399 408,433 410,868
Less: reserve for loan losses 7,749 7,779 7,752
Net loans 404,650 400,654 403,116
Premises and equipment 8,583 8,670 8,598
Goodwill 4,559 4,559 4,559
Core deposit intangible 173 195 215
Bank-owned life insurance 8,675 8,536 8,394
Accrued interest receivable and other assets 10,966 7,856 8,651
Total Assets $ 657,792 $ 670,288 $ 649,840
         
June 30, December 31, June 30,
2013 2012 2012
Liabilities and Stockholders' Equity
Noninterest-bearing demand deposits $ 83,095 $ 75,912 $ 65,969
Interest-bearing demand deposits 58,238 63,915 61,935
Money market accounts 77,563 81,349 67,533
Savings deposits 180,875 175,406 171,150
Time deposits 185,648 196,753 205,142
Total Deposits 585,419 593,335 571,729
Short-term borrowings 5,407 6,538 6,959
Other borrowings 12,635 12,970 16,363
Accrued interest and other liabilities 1,781 2,008 1,631
Total Liabilities 605,242 614,851 596,682
Common equity 34,694 34,295 33,944
Retained earnings 24,780 22,485 20,399
Accumulated other comprehensive income (190) 5,391 5,549
Treasury stock (6,734) (6,734) (6,734)
Total Stockholders' Equity 52,550 55,437 53,158
Total Liabilities and Stockholders' Equity $ 657,792 $ 670,288 $ 649,840

 

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
June 30, 2013 and 2012
(Dollar amounts in thousands)
(unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2013 2012 2013 2012
INTEREST INCOME                
Interest and fees on loans $ 5,550 $ 5,641 $ 11,122 $ 11,178
Interest-bearing deposits in other institutions 9 8 17 12
Federal funds sold 4 4 8 7
Investment securities
Taxable interest 625 791 1,299 1,706
Tax-exempt interest 744 753 1,477 1,500
Dividends on FHLB Stock 15 26 38 52
Total interest income 6,947 7,223 13,961 14,455
   
INTEREST EXPENSE
Deposits 1,219 1,434 2,516 2,931
Short-term borrowings 47 99 99 158
Other borrowings 44 82 90 166
Trust preferred securities 47 31 81 77
Total interest expense 1,357 1,646 2,786 3,332
           
NET INTEREST INCOME 5,590 5,577 11,175 11,123
Provision for loan losses 300 450 613 1,050
   

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES 5,290 5,127 10,562 10,073
   
NONINTEREST INCOME
Service charges on deposits 511 471 958 902
Earnings on bank-owned life insurance 75 69 143 137
Gain on sale of loans - - - 85
Other income 243 181 411 391
Net securities gains (losses) (10) 296 175 296
Total noninterest income 819 1,017 1,687 1,811
   
NONINTEREST EXPENSE
Salaries and employee benefits 1,994 1,800 3,865 3,550
Occupancy expense 248 222 522 470
Equipment expense 186 201 375 371
Data processing costs 187 191 400 390
Ohio state franchise tax 149 128 303 257
Federal deposit insurance expense 64 258 218 501
Professional fees 203 186 479 400
(Gain) Loss on sale of other real estate owned (13) 32 (5) 50
Other operating expense 930 1,023 1,792 1,834
Total noninterest expense 3,948 4,041 7,949 7,823
Income before income taxes 2,161 2,103 4,300 4,061
Provision for income taxes 476 463 958 898
                   
NET INCOME $ 1,685 $ 1,640 $ 3,342 $ 3,163

 

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
June 30, 2013 and 2012
(Dollar amounts in thousands)
(unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Per common share data
Net income per common share - basic     $ 0.84     $ 0.85     $ 1.66     $ 1.72
Net income per common share - diluted $ 0.83 $ 0.85 $ 1.66 $ 1.72
Dividends declared $ 0.26 $ 0.26 $ 0.52 $ 0.52
Book value per share(period end) $ 26.00 $ 26.88 $ 26.00 $ 26.88
Tangible book value per share (period end) $ 23.66 $ 24.47 $ 23.66 $ 24.47
Dividend payout ratio 31.28% 31.28% 31.33% 30.67%
Average shares outstanding - basic 2,017,264 1,919,333 2,008,503 1,841,657
Average shares outstanding -diluted 2,023,961 1,021,205 2,017,060 1,842,865
Period ending shares outstanding 2,021,292 1,977,321 2,021,292 1,977,321
   
Selected ratios
Return on average assets 1.02% 1.01% 1.02% 0.97%
Return on average equity 12.47% 13.22% 12.32% 13.02%
Yield on earning assets 4.77% 5.01% 4.81% 5.00%
Cost of interest-bearing liabilities 1.04% 1.24% 1.06% 1.25%
Net interest spread 3.73% 3.78% 3.75% 3.76%
Net interest margin 3.88% 3.93% 3.90% 3.91%
Efficiency (1) 58.12% 57.88% 58.35% 57.07%
Equity to assets at period end 7.99% 8.18% 7.99% 8.18%
(1) The efficiency ratio is calculated by dividing noninterest expense less amortization of intangibles by the sum of net interest income on a fully taxable equivalent basis plus noninterest income.

 

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
June 30, 2013 and 2012
(Dollar amounts in thousands)
(unaudited)
June 30, June 30,
Asset quality data 2013 2012
(Dollar amounts in thousands)
Nonaccrual loans     $ 9,162     $ 15,310
Troubled debt restructuring 3,166 1,731
90 days past due and accruing 541 136
Nonperforming loans 12,869 17,177
Other real estate owned 2,361 1,986
Nonperforming assets $ 15,230 $ 19,163
Allowance for loan losses $ 7,749 $ 7,752
Allowance for loan losses/total loans 1.88% 1.89%
Net charge-offs:
Quarter-to-date $ 283 $ (35)
Year-to-date 643 117
Net charge-offs to average loans
Quarter-to-date 0.07% -0.01%
Year-to-date 0.16% 0.03%
Nonperforming loans/total loans 3.12% 4.18%
Allowance for loan losses/nonperforming loans 60.21% 45.13%
       
June 30, June 30,
Loans 2013 2012
(Dollar amounts in thousands)
Commercial and industrial $ 49,898 $ 65,651
Real estate - construction 24,084 20,409
Real estate - mortgage
Residential 199,250 207,080
Commercial 135,006 113,383
Consumer installment 4,161 4,345
Total Loans $ 412,399 $ 410,868