Middlefield Banc Corp. Reports 2022 Nine Month Financial Results

GlobeNewswire
MIDDLEFIELD, Ohio, Oct. 18, 2022 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the three and nine months ended September 30, 2022.
2022 Nine Month Financial Highlights (on a year-over-year basis unless noted):
Returned $6.6 million of capital to shareholders through dividends and the repurchase of 141,002 shares at an average price of $25.83 per share
Net income was $12.2 million, or $2.08 per diluted share, compared to $13.8 million, or $2.19 per diluted share
Nine-month pre-tax income benefited from $1.2 million of accelerated net fees associated with the Paycheck Protection Program (“PPP”), compared to $3.1 million in the 2021 nine-month period
Year-to-date net income was negatively impacted by $969,000 of one-time expenses associated with the proposed Liberty Bancshares, Inc. merger
Net interest margin improved by 24 basis points to 4.02%, compared to 3.78%
Total loans were $995.2 million, compared to $981.7 million at December 31, 2021
Total loans increased by $46.6 million, or 6.6% annualized from December 31, 2021, without the impact of PPP loan forgiveness
Return on average assets was 1.24%, compared to 1.34%
Return on average equity was 11.96%, compared to 12.58%
Return on average tangible common equity(1) was 13.59%, compared to 14.20%
Strong asset quality with nonperforming loans to total loans of 0.37%, compared to 0.67%
Allowance for loan losses was 1.46% of total loans, compared to 1.41%
Merger with Liberty Bancshares, Inc. on schedule to close during the 2022 fourth quarter
“2022 is shaping up to be a strong year of core earnings and asset growth. Total loans increased 1.7% from the second quarter and are up 4.0% on a year-over-year basis, without the impact of PPP loan forgiveness. In addition, year-to-date profitability has benefitted from robust asset quality and a higher net interest margin, partially offsetting a $1.9 million year-over-year reduction in PPP fees and nearly $1.0 million of one-time expenses associated with the proposed Liberty Bancshares, Inc. merger,” stated James R. Heslop, II, President and Chief Executive Officer.
“As we navigate a rising rate and more fluid economic environment, we are focused on supporting the financial needs of our Ohio communities, maintaining strong asset quality, and completing the merger with Liberty Bancshares, Inc. The merger is on track to close during the 2022 fourth quarter and we expect to benefit as a larger bank with total assets of approximately $1.80 billion, strong earnings accretion, and a robust footprint in two of Ohio’s largest and fastest-growing markets,” concluded Mr. Heslop.
Income Statement
Net interest income for the nine-month period ended September 30, 2022, was $36.1 million, compared to $36.2 million for the same period last year. Year-to-date, the net interest margin was 4.02%, compared to 3.78% for the same period last year. Net interest income for the 2022 third quarter was $12.6 million, compared to $12.5 million for the 2021 third quarter. The 1.1% increase in net interest income for the 2022 third quarter from the same period in 2021, was largely a result of higher interest income and lower interest expense. The net interest margin for the 2022 third quarter was 4.23%, compared to 3.90% for the same period of 2021.
For the 2022 nine-month period, noninterest income was $4.3 million, compared to $5.7 million for the same period last year. Noninterest income for the 2022 third quarter was $1.5 million, compared to $1.8 million for the same period last year.
For the 2022 nine-month period, noninterest expense increased 6.5% to $25.7 million, compared to $24.1 million for the same period last year. Operating costs in the 2022 third quarter increased 12.4% to $8.9 million from $7.9 million for the 2021 third quarter. The Company incurred $390,000 during the 2022 third quarter and $969,000 during the 2022 nine-month period of additional operating expenses associated with the proposed Liberty Bancshares, Inc. merger.
Net income for the 2022 nine-month period, was $12.2 million, or $2.08 per diluted share, compared to $13.8 million, or $2.19 per diluted share for the same period last year. Net income for the 2022 third quarter, was $4.2 million, or $0.73 per diluted share, compared to $5.2 million, or $0.85 per diluted share for the same period last year.
Balance Sheet
Total assets at September 30, 2022, decreased slightly to approximately $1.35 billion from $1.37 billion at September 30, 2021. Net loans at September 30, 2022, decreased 1.5% to $980.7 million, compared to $996.0 million at September 30, 2021. Since 2020, Middlefield has helped customers receive $211.6 million of forgiveness payments under the terms of the Paycheck Protection Program, including processing $0.4 million of forgiveness payments during the third quarter of 2022, and $33.1 million of forgiveness payments year-to-date. The balance of PPP loans outstanding at September 30, 2022, was $1.0 million.
Total deposits at September 30, 2022, were $1.13 billion, compared to $1.20 billion at September 30, 2021. The 5.8% decrease in deposits was primarily due to declines in interest-bearing, time-based, money market and savings accounts, partially offset by increased noninterest-bearing accounts. The investment portfolio was $162.1 million at September 30, 2022, compared with $163.1 million at September 30, 2021.
Donald L. Stacy, Chief Financial Officer, stated, “The growth we have experienced in our net interest margin throughout 2022 is encouraging, driven by an 18-basis point increase in our yield on earning assets, and a 6-basis point improvement in our cost of funds. As competition for deposits increases, we expect our cost of funds to increase in future periods. Asset quality remains strong across our portfolio, with only $3.7 million of nonperforming loans at September 30, 2022, which is a 45.8% reduction from September 30, 2021, and represents just 0.37% of total loans at the end of the 2022 third quarter. With a higher degree of economic uncertainty, we have maintained a robust allowance for loan losses, which was 1.46% of total loans at September 30, 2022. We believe our strong balance sheet and favorable capital position will allow us to navigate a more challenging economic cycle, while simultaneously allocating capital to support our long-term growth strategies, dividend payment, and share repurchase program.”
Mr. Stacy continued, “Year-to-date, we have repurchased 141,002 shares of our common stock at a total cost of $3.6 million. This includes 45,638 shares repurchased during the 2022 third quarter at an average price of $26.74 per share at September 30, 2022. We have 246,549 shares remaining under our repurchase program.”
Stockholders’ Equity and Dividends
At September 30, 2022, stockholders’ equity was $122.9 million compared to $146.1 million at September 30, 2021. The 15.9% year-over-year decline in stockholders’ equity was primarily due to an increase in the unrealized loss on the available-for-sale investment portfolio as well as the Company’s stock repurchase program. On a per-share basis, shareholders’ equity at September 30, 2022, was $21.30 compared to $24.13 at September 30, 2021.
At September 30, 2022, tangible stockholders’ equity(1) was $106.6 million, compared to $129.5 million at September 30, 2021. On a per-share basis, tangible stockholders’ equity(1) was $18.48 at September 30, 2022, compared to $21.39 at September 30, 2021.
Through the 2022 nine-month period, the Company declared cash dividends of $0.51 per share, compared to $0.48 per share for the same period last year.
At September 30, 2022, the Company had an equity-to-assets ratio of 9.09%, compared to 10.69% at September 30, 2021.
Asset Quality
No provision for loan losses was recorded for both the 2022 and 2021 third quarters. There was no provision for loan losses for the 2022 nine-month period versus $900,000 for the same period last year.
Net charge-offs were $18,000, or 0.01% of average loans, annualized, during the 2022 third quarter, compared to net recoveries of $34,000, or 0.01% of average loans, annualized, at September 30, 2021. Year-to-date net recoveries were $190,000, or 0.02% of average loans, annualized, compared to net charge-offs of $125,000, or 0.02% of average loans, annualized for the nine-months ended September 30, 2021.
Nonperforming loans at September 30, 2022, were $3.7 million, compared to $6.8 million at September 30, 2021. Nonperforming assets at September 30, 2022, were $10.5 million, compared to $13.9 million at September 30, 2021. The allowance for loan losses at September 30, 2022, stood at $14.5 million, or 1.46% of total loans, compared to $14.2 million, or 1.41% of total loans at September 30, 2021.
About Middlefield Banc Corp.
Middlefield Banc Corp., headquartered in Middlefield, Ohio, is the bank holding company of The Middlefield Banking Company, with total assets of $1.35 billion at September 30, 2022. The Bank operates 16 full-service banking centers and an LPL Financial® brokerage office serving Beachwood, Chardon, Cortland, Dublin, Garrettsville, Mantua, Middlefield, Newbury, Orwell, Plain City, Powell, Solon, Sunbury, Twinsburg, and Westerville. The Bank also operates a Loan Production Office in Mentor, Ohio.
Additional information is available at www.middlefieldbank.bank
(1)NON-GAAP FINANCIAL MEASURES
This press release includes disclosure of Middlefield Banc Corp.’s tangible book value per share, return on average tangible equity, and pre-tax, pre-provision for loan losses income, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Middlefield Banc Corp. believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Middlefield Banc Corp.’s marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures are included in the tables following Consolidated Financial Highlights below.
FORWARD-LOOKING STATEMENTS
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) the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions; (8) changes in the securities markets; (9) the Company’s failure to integrate Liberty Bancshares, Inc. and Liberty National Bank with Middlefield in accordance with expectations and deviations from performance expectations related to Liberty Bancshares, Inc. and Liberty National Bank; or (10) 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
(Dollar amounts in thousands, unaudited)
ASSETS
Cash and due from banks
$
119,777
$
60,114
$
78,804
$
97,172
$
113,177
Federal funds sold
8,800
19,039
29,474
22,322
19,174
Cash and cash equivalents
128,577
79,153
108,278
119,494
132,351
Equity securities, at fair value
972
779
851
818
833
Investment securities available for sale, at fair value
162,064
171,958
175,216
170,199
163,057
Loans held for sale
-
-
9
1,051
676
Loans:
Commercial real estate:
Owner occupied
120,912
120,771
113,590
111,470
110,883
Non-owner occupied
285,419
288,334
293,745
283,618
310,222
Multifamily
38,063
29,152
29,385
31,189
30,762
Residential real estate
247,612
246,453
244,747
240,089
232,020
Commercial and industrial
146,987
137,398
131,683
148,812
163,052
Home equity lines of credit
114,344
111,730
106,300
104,355
105,450
Construction and other
33,748
35,988
50,152
54,148
49,378
Consumer installment
8,110
8,171
8,118
8,010
8,515
Total loans
995,195
977,997
977,720
981,691
1,010,282
Less allowance for loan and lease losses
14,532
14,550
14,492
14,342
14,234
Net loans
980,663
963,447
963,228
967,349
996,048
Premises and equipment, net
16,215
17,030
17,142
17,272
17,507
Goodwill
15,071
15,071
15,071
15,071
15,071
Core deposit intangibles
1,171
1,249
1,326
1,403
1,484
Bank-owned life insurance
17,382
17,274
17,166
17,060
16,954
Other real estate owned
6,792
6,792
6,992
6,992
7,090
Accrued interest receivable and other assets
22,104
20,624
18,019
14,297
14,794
TOTAL ASSETS
$
1,351,011
$
1,293,377
$
1,323,298
$
1,331,006
$
1,365,865
LIABILITIES
Deposits:
Noninterest-bearing demand
$
383,675
$
379,872
$
361,251
$
334,171
$
316,770
Interest-bearing demand
160,112
154,788
162,010
196,308
237,576
Money market
162,052
185,494
187,807
177,281
178,423
Savings
247,466
252,179
264,784
260,125
256,114
Time
177,182
174,833
191,320
198,725
211,674
Total deposits
1,130,487
1,147,166
1,167,172
1,166,610
1,200,557
Short-term borrowings
80,000
-
-
-
-
Other borrowings
12,107
12,910
12,975
12,901
12,966
Accrued interest payable and other liabilities
5,562
5,081
5,507
6,160
6,287
TOTAL LIABILITIES
1,228,156
1,165,157
1,185,654
1,185,671
1,219,810
STOCKHOLDERS' EQUITY
Common stock, no par value; 10,000,000 shares authorized, 7,350,616
shares issued, 5,767,803 shares outstanding as of September 30, 2022
87,640
87,562
87,562
87,131
87,131
Retained earnings
93,166
89,900
86,804
83,971
80,376
Accumulated other comprehensive (loss) income
(25,080
)
(17,591
)
(6,674
)
3,462
3,610
Treasury stock, at cost; 1,582,813 shares as of September 30, 2022
(32,871
)
(31,651
)
(30,048
)
(29,229
)
(25,062
)
TOTAL STOCKHOLDERS' EQUITY
122,855
128,220
137,644
145,335
146,055
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
1,351,011
$
1,293,377
$
1,323,298
$
1,331,006
$
1,365,865
MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, unaudited)
INTEREST AND DIVIDEND INCOME
Interest and fees on loans
$
11,892
$
11,268
$
10,985
$
11,586
$
12,258
$
34,145
$
36,310
Interest-earning deposits in other institutions
134
74
24
30
30
232
60
Federal funds sold
51
46
3
1
1
100
2
Investment securities:
Taxable interest
449
442
443
438
461
1,334
1,241
Tax-exempt interest
982
955
784
732
673
2,721
1,833
Dividends on stock
59
33
24
23
24
116
79
Total interest and dividend income
13,567
12,818
12,263
12,810
13,447
38,648
39,525
INTEREST EXPENSE
Deposits
812
709
726
783
915
2,247
3,130
Short-term borrowings
44
-
-
-
-
44
-
Other borrowings
112
81
69
67
68
262
214
Total interest expense
968
790
795
850
983
2,553
3,344
NET INTEREST INCOME
12,599
12,028
11,468
11,960
12,464
36,095
36,181
Provision for loan losses
-
-
-
(200
)
-
-
900
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES
12,599
12,028
11,468
12,160
12,464
36,095
35,281
NONINTEREST INCOME
Service charges on deposit accounts
1,004
956
914
906
876
2,874
2,519
(Loss) gain on equity securities
(57
)
(72
)
33
(14
)
102
(96
)
223
Earnings on bank-owned life insurance
108
108
106
106
108
322
440
Gains on sale of loans
7
18
3
118
309
28
1,122
Revenue from investment services
233
153
141
198
190
527
529
Other income
251
220
206
221
236
677
838
Total noninterest income
1,546
1,383
1,403
1,535
1,821
4,332
5,671
NONINTEREST EXPENSE
Salaries and employee benefits
4,491
3,785
4,386
4,088
4,488
12,662
13,063
Occupancy expense
458
583
505
542
426
1,546
1,506
Equipment expense
233
274
315
358
333
822
1,003
Data processing and information technology costs
985
822
844
851
845
2,650
2,447
Ohio state franchise tax
293
292
293
285
287
878
859
Federal deposit insurance expense
84
90
50
50
150
224
444
Professional fees
280
383
455
435
136
1,118
878
Net loss (gain) on other real estate owned
1
206
8
(66
)
9
215
77
Advertising expense
268
229
228
221
222
725
664
Software amortization expense
27
40
48
119
88
115
242
Core deposit intangible amortization
78
77
77
80
81
232
241
Merger-related costs
390
579
-
-
-
969
-
Other expense
1,298
1,175
1,057
868
842
3,531
2,694
Total noninterest expense
8,886
8,535
8,266
7,831
7,907
25,687
24,118
Income before income taxes
5,259
4,876
4,605
5,864
6,378
14,740
16,834
Income taxes
1,010
787
772
1,027
1,174
2,569
3,038
NET INCOME
$
4,249
$
4,089
$
3,833
$
4,837
$
5,204
$
12,171
$
13,796
PTPP (1)
$
5,259
$
4,876
$
4,605
$
5,664
$
6,378
$
14,740
$
17,734
(1) The pre-tax pre-provision (PTPP) is the income before income taxes before provision for loan losses considerations, for reconciliation of non-GAAP measures.
MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
Net income per common share - basic
$
0.73
$
0.70
$
0.65
$
0.81
$
0.85
$
2.08
$
2.20
Net income per common share - diluted
$
0.73
$
0.70
$
0.65
$
0.81
$
0.85
$
2.08
$
2.19
Dividends declared per share
$
0.17
$
0.17
$
0.17
$
0.21
$
0.16
$
0.51
$
0.48
Book value per share (period end)
$
21.30
$
22.07
$
23.43
$
24.68
$
24.13
$
21.30
$
24.13
Tangible book value per share (period end) (2) (3)
$
18.48
$
19.26
$
20.64
$
21.88
$
21.39
$
18.48
$
21.39
Dividends declared
$
983
$
993
$
1,000
$
1,242
$
978
$
2,976
$
2,998
Dividend yield
2.49
%
2.71
%
2.78
%
3.37
%
2.66
%
2.52
%
2.69
%
Dividend payout ratio
23.13
%
24.28
%
26.09
%
25.68
%
18.79
%
24.45
%
21.73
%
Average shares outstanding - basic
5,792,773
5,851,422
5,879,025
5,951,838
6,136,648
5,840,757
6,265,803
Average shares outstanding - diluted
5,805,799
5,860,098
5,889,836
5,975,333
6,157,181
5,853,783
6,287,556
Period ending shares outstanding
5,767,803
5,810,351
5,873,565
5,888,737
6,054,083
5,767,803
6,054,083
Selected ratios
Return on average assets
1.32
%
1.25
%
1.17
%
1.41
%
1.51
%
1.24
%
1.34
%
Return on average equity
12.94
%
12.30
%
10.75
%
13.17
%
13.95
%
11.96
%
12.58
%
Return on average tangible common equity (2) (4)
14.79
%
14.02
%
12.13
%
14.85
%
15.71
%
13.59
%
14.20
%
Efficiency (1)
61.07
%
61.83
%
62.54
%
56.56
%
54.05
%
61.79
%
56.42
%
Equity to assets at period end
9.09
%
9.91
%
10.40
%
10.92
%
10.69
%
9.09
%
10.69
%
Noninterest expense to average assets
0.69
%
0.65
%
0.62
%
0.58
%
0.58
%
1.96
%
1.75
%
(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
(2) See reconciliation of non-GAAP measures below
(3) Calculated by dividing tangible common equity by shares outstanding
(4) Calculated by dividing annualized net income for each period by average tangible common equity
MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Unaudited)
Interest-earning assets:
Loans receivable (2)
4.78
%
4.66
%
4.53
%
4.61
%
4.74
%
4.66
%
4.54
%
Investment securities (2)
3.90
%
3.76
%
3.41
%
3.30
%
3.37
%
3.69
%
3.51
%
Interest-earning deposits with other banks
2.06
%
0.77
%
0.23
%
0.20
%
0.21
%
0.82
%
0.20
%
Total interest-earning assets
4.55
%
4.28
%
4.06
%
4.07
%
4.20
%
4.30
%
4.12
%
Deposits:
Interest-bearing demand deposits
0.22
%
0.15
%
0.14
%
0.12
%
0.12
%
0.17
%
0.13
%
Money market deposits
0.46
%
0.49
%
0.47
%
0.47
%
0.46
%
0.47
%
0.47
%
Savings deposits
0.19
%
0.06
%
0.06
%
0.06
%
0.06
%
0.10
%
0.06
%
Certificates of deposit
0.96
%
0.83
%
0.87
%
0.90
%
1.08
%
0.89
%
1.19
%
Total interest-bearing deposits
0.43
%
0.36
%
0.37
%
0.36
%
0.41
%
0.39
%
0.47
%
Borrowings
2.94
%
2.51
%
2.16
%
2.09
%
2.08
%
2.61
%
1.14
%
Total interest-bearing liabilities
0.50
%
0.39
%
0.39
%
0.37
%
0.44
%
0.43
%
0.48
%
Cost of deposits
0.29
%
0.24
%
0.25
%
0.26
%
0.30
%
0.26
%
0.35
%
Cost of funds
0.34
%
0.27
%
0.27
%
0.27
%
0.31
%
0.29
%
0.35
%
Net interest margin (1)
4.23
%
4.02
%
3.80
%
3.82
%
3.90
%
4.02
%
3.78
%
(1) Net interest margin represents net interest income as a percentage of average interest-earning assets.
(2) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were determined using an effective tax rate of 21%.
For the Three Months Ended
(Dollar amounts in thousands, unaudited)
Nonperforming loans (1)
$
3,692
$
4,670
$
4,728
$
4,859
$
6,806
Other real estate owned
6,792
6,792
6,992
6,992
7,090
Nonperforming assets
$
10,484
$
11,462
$
11,720
$
11,851
$
13,896
Allowance for loan losses
$
14,532
$
14,550
$
14,492
$
14,342
$
14,234
Allowance for loan losses/total loans
1.46
%
1.49
%
1.48
%
1.46
%
1.41
%
Net charge-offs (recoveries):
Quarter-to-date
$
18
$
(58
)
$
(150
)
$
(308
)
$
(34
)
Year-to-date
(190
)
(208
)
(150
)
(183
)
125
Net charge-offs (recoveries) to average loans, annualized:
Quarter-to-date
0.01
%
-0.02
%
-0.06
%
-0.12
%
-0.01
%
Year-to-date
-0.02
%
-0.04
%
-0.06
%
-0.02
%
0.02
%
Nonperforming loans/total loans
0.37
%
0.48
%
0.48
%
0.49
%
0.67
%
Allowance for loan losses/nonperforming loans
393.61
%
311.56
%
306.51
%
295.16
%
209.14
%
Nonperforming assets/total assets
0.78
%
0.89
%
0.89
%
0.89
%
1.02
%
(1) Nonperforming loans exclude troubled debt restructurings that are performing in accordance with their terms over a prescribed period of time.
Reconciliation of Common Stockholders' Equity to Tangible Common Equity
For the Three Months Ended
(Dollar amounts in thousands, unaudited)
September 30,
June 30,
March 31,
December 31,
September 30,
Stockholders' Equity
$
122,855
$
128,220
$
137,644
$
145,335
$
146,055
Less Goodwill and other intangibles
16,242
16,320
16,397
16,474
16,555
Tangible Common Equity
$
106,613
$
111,900
$
121,247
$
128,861
$
129,500
Shares outstanding
5,767,803
5,810,351
5,873,565
5,888,737
6,054,083
Tangible book value per share
$
18.48
$
19.26
$
20.64
$
21.88
$
21.39
Reconciliation of Average Equity to Return on Average Tangible Common Equity
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
September 30,
Average Stockholders' Equity
$
130,263
$
133,377
$
144,630
$
145,716
$
148,048
$
136,090
$
146,611
Less Average Goodwill and other intangibles
16,280
16,357
16,435
16,513
16,594
16,357
16,674
Average Tangible Common Equity
$
113,983
$
117,020
$
128,195
$
129,203
$
131,454
$
119,733
$
129,937
Net income
$
4,249
$
4,089
$
3,833
$
4,837
$
5,204
$
12,171
$
13,796
Return on average tangible common equity (annualized)
14.79
%
14.02
%
12.13
%
14.85
%
15.71
%
13.59
%
14.20
%
Reconciliation of Pre-Tax Pre-Provision Income (PTPP)
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
September 30,
Net income
$
4,249
$
4,089
$
3,833
$
4,837
$
5,204
$
12,171
$
13,796
Add Income Taxes
1,010
787
772
1,027
1,174
2,569
3,038
Add Provision for loan losses
-
-
-
(200
)
-
-
900
PTPP
$
5,259
$
4,876
$
4,605
$
5,664
$
6,378
$
14,740
$
17,734
MIDDLEFIELD BANC CORP.
Average Balance Sheets
(Dollar amounts in thousands, unaudited)
Average
Average
Average
Average
Balance
Interest
Yield/Cost
Balance
Interest
Yield/Cost
Interest-earning assets:
Loans receivable (3)
$
987,689
$
11,892
4.78
%
$
1,027,935
$
12,258
4.74
%
Investment securities (3)
172,316
1,431
3.90
%
154,718
1,134
3.37
%
Interest-earning deposits with other banks (4)
46,938
244
2.06
%
105,910
55
0.21
%
Total interest-earning assets
1,206,943
13,567
4.55
%
1,288,563
13,447
4.20
%
Noninterest-earning assets
73,753
82,952
Total assets
$
1,280,696
$
1,371,515
Interest-bearing liabilities:
Interest-bearing demand deposits
$
162,878
$
91
0.22
%
$
225,264
$
67
0.12
%
Money market deposits
155,095
180
0.46
%
182,831
214
0.46
%
Savings deposits
249,898
119
0.19
%
253,960
38
0.06
%
Certificates of deposit
174,091
422
0.96
%
218,323
596
1.08
%
Short-term borrowings
8,554
44
2.04
%
-
-
0.00
%
Other borrowings
12,530
112
3.55
%
12,999
68
2.08
%
Total interest-bearing liabilities
763,046
968
0.50
%
893,377
983
0.44
%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits
382,351
323,726
Other liabilities
5,036
6,364
Stockholders' equity
130,263
148,048
Total liabilities and stockholders' equity
$
1,280,696
$
1,371,515
Net interest income
$
12,599
$
12,464
Interest rate spread (1)
4.05
%
3.76
%
Net interest margin (2)
4.23
%
3.90
%
Ratio of average interest-earning assets to
average interest-bearing liabilities
158.17
%
144.24
%
(1) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
(2) Net interest margin represents net interest income as a percentage of average interest-earning assets.
(3) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $277 and $195 for the three months ended September 30, 2022 and 2021, respectively
(4) Includes dividends received on restricted stock.
Average
Average
Average
Average
Balance
Interest
Yield/Cost
Balance
Interest
Yield/Cost
Interest-earning assets:
Loans receivable (3)
$
987,689
$
11,892
4.78
%
$
970,820
$
11,268
4.66
%
Investment securities (3)
172,316
1,431
3.90
%
176,138
1,397
3.76
%
Interest-earning deposits with other banks (4)
46,938
244
2.06
%
79,924
153
0.77
%
Total interest-earning assets
1,206,943
13,567
4.55
%
1,226,882
12,818
4.28
%
Noninterest-earning assets
73,753
89,555
Total assets
$
1,280,696
$
1,316,437
Interest-bearing liabilities:
Interest-bearing demand deposits
$
162,878
$
91
0.22
%
$
159,779
$
59
0.15
%
Money market deposits
155,095
180
0.46
%
185,711
228
0.49
%
Savings deposits
249,898
119
0.19
%
260,226
40
0.06
%
Certificates of deposit
174,091
422
0.96
%
184,748
382
0.83
%
Short-term borrowings
8,554
44
2.04
%
-
-
0.00
%
Other borrowings
12,530
112
3.55
%
12,945
81
2.51
%
Total interest-bearing liabilities
763,046
968
0.50
%
803,409
790
0.39
%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits
382,351
375,013
Other liabilities
5,036
4,638
Stockholders' equity
130,263
133,377
Total liabilities and stockholders' equity
$
1,280,696
$
1,316,437
Net interest income
$
12,599
$
12,028
Interest rate spread (1)
4.05
%
3.89
%
Net interest margin (2)
4.23
%
4.02
%
Ratio of average interest-earning assets to average interest-bearing liabilities
158.17
%
152.71
%
(1) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
(2) Net interest margin represents net interest income as a percentage of average interest-earning assets.
(3) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $277 and $271 for the three months ended September 30, 2022, and June 30, 2022, respectively.
(4) Includes dividends received on restricted stock.
For the Nine Months Ended
Average
Average
Average
Average
Balance
Interest
Yield/Cost
Balance
Interest
Yield/Cost
Interest-earning assets:
Loans receivable (3)
$
980,787
$
34,145
4.66
%
$
1,070,058
$
36,310
4.54
%
Investment securities (3)
173,094
4,055
3.69
%
135,522
3,074
3.51
%
Interest-earning deposits with other banks (4)
72,851
448
0.82
%
94,955
141
0.20
%
Total interest-earning assets
1,226,732
38,648
4.30
%
1,300,535
39,525
4.12
%
Noninterest-earning assets
82,733
74,883
Total assets
$
1,309,465
$
1,375,418
Interest-bearing liabilities:
Interest-bearing demand deposits
$
164,337
$
210
0.17
%
$
211,797
$
209
0.13
%
Money market deposits
175,024
620
0.47
%
187,945
655
0.47
%
Savings deposits
256,762
197
0.10
%
254,574
123
0.06
%
Certificates of deposit
184,165
1,220
0.89
%
240,582
2,143
1.19
%
Short-term borrowings
2,851
44
2.06
%
113
-
0.00
%
Other borrowings
12,806
262
2.74
%
13,440
214
2.13
%
Total interest-bearing liabilities
795,945
2,553
0.43
%
908,451
3,344
0.49
%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits
372,343
314,172
Other liabilities
5,087
6,184
Stockholders' equity
136,090
146,611
Total liabilities and stockholders' equity
$
1,309,465
$
1,375,418
Net interest income
$
36,095
$
36,181
Interest rate spread (1)
3.87
%
3.63
%
Net interest margin (2)
4.02
%
3.78
%
Ratio of average interest-earning assets to
average interest-bearing liabilities
154.12
%
143.16
%
(1) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
(2) Net interest margin represents net interest income as a percentage of average interest-earning assets.
(3) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $768 and $542 for the nine months ended September 30, 2022 and 2021, respectively.
(4) Includes dividends received on restricted stock.
Quarterly Calculations
Average shares outstanding - basic
5,792,773
5,851,422
5,879,025
5,951,838
6,136,648
Average shares outstanding -diluted
5,805,799
5,860,098
5,889,836
5,975,333
6,157,181
Period ending shares outstanding
5,767,803
5,810,351
5,873,565
5,888,737
6,054,083
Stock price at end of period
$
27.10
$
25.20
$
24.82
$
24.82
$
23.83
For the Three Months Ended
Average Loans
987,689
970,820
983,853
999,229
1,027,935
Average Assets
1,280,696
1,316,437
1,332,039
1,358,843
1,371,515
Goodwill
15,071
15,071
15,071
15,071
15,071
Average Assets less goodwill
1,265,625
1,301,366
1,316,968
1,343,772
1,356,444
Average Equity
130,263
133,377
144,630
145,716
148,048
Average Goodwill
15,071
15,071
15,071
15,071
15,071
Average Core deposit intangible
1,209
1,286
1,364
1,442
1,523
Average MSR Reserves
Average Tangible equity
113,983
117,020
128,195
129,203
131,454
Annualized Net Income
16,857
16,401
15,545
19,190
20,646
Net Interest Income (TE)
12,876
12,297
11,691
12,170
12,690
Non Interest Income
1,546
1,383
1,403
1,535
1,821
Total
14,422
13,680
13,094
13,705
14,511
Non Interest Expense
8,886
8,535
8,266
7,831
7,907
amort of intangibles
78
77
77
80
81
Non Interest Expense for Efficiency
8,808
8,458
8,189
7,751
7,826
Net Interest Income
12,599
12,028
11,468
11,960
12,464
Tax free income
277
269
223
210
195
Net Interest Income (TE)
12,876
12,297
11,691
12,170
12,659
Equity period end
122,855
128,220
137,644
145,335
146,055
Goodwill
15,071
15,071
15,071
15,071
15,071
Core deposit intangible
1,171
1,249
1,326
1,403
1,484
MSR Reserves
Tangible equity
106,613
111,900
121,247
128,861
129,500
Tangible book value per share
18.48
19.26
20.64
21.88
21.39
Period ending shares outstanding
5,767,803
5,810,351
5,873,565
5,888,737
6,054,083
Equity to assets at period end
9.09
%
9.91
%
10.40
%
10.92
%
10.69
%
Assets at period end
1,351,011
1,293,377
1,323,298
1,331,006
1,365,865
LLR Beginning of year
14,342
14,342
14,342
13,459
13,459
YTD Allocation
-
-
-
700
900
14,342
14,342
14,342
14,159
14,359
Current LLR balance
14,532
14,550
14,492
14,342
14,234
Net (recoveries) chargeoffs YTD
(190
)
(208
)
(150
)
(183
)
125
LLR Beginning of Quarter
14,550
14,492
14,342
14,234
14,200
QTD Allocation
-
-
-
(200
)
-
14,550
14,492
14,342
14,034
14,200
Current LLR balance
14,532
14,550
14,492
14,342
14,234
Net (recoveries) chargeoffs QTD
18
(58
)
(150
)
(308
)
(34
)
Total Loans
995,195
977,997
977,720
981,691
1,010,282
OREO
6,792
6,792
6,992
6,992
7,090
Loans and OREO
1,001,987
984,789
984,712
988,683
1,017,372
Non performing assets
10,484
11,462
11,720
11,851
13,896
1.05
%
1.16
%
1.19
%
1.20
%
1.37
%
Tier 1 capital
139,693
137,491
135,921
130,652
133,890
Average assets
1,280,696
1,316,437
1,332,039
1,358,843
1,371,515

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