Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results
for the 2015 first quarter ended March 31, 2015.
2015 First Quarter Financial Highlights Include (on a
year-over-year basis unless noted):
-
Net interest income increased 3.3% to $6.2 million.
-
Noninterest income grew 11.3% to $0.8 million.
-
Noninterest expenses increased 13.8%.
-
Net income decreased 7.7% to $1.6 million, or $0.79 per diluted share.
-
Tangible stockholders’ equity improved 3.1% from the 2014 fourth
quarter, and 17.4% from March 31, 2014.
-
Total net loans increased 7.5%.
-
Nonperforming assets declined to $10.5 million from $13.4 million.
-
Tier 1 capital ratio strengthened to 9.69% from 9.15%.
“Overall, we are pleased with how 2015 has started,” stated Thomas G.
Caldwell, President and Chief Executive Officer. “Noninterest expenses
were up in the first quarter and impacted our overall net income for the
quarter. We were able to partially offset the impact of the 13.8%
increase in noninterest expenses through higher levels of both interest
and noninterest income, and reducing our interest expenses by 14.5%. We
selectively added staff, improved our capabilities, and increased our
advertising budget to support our growth objectives.”
Net income for the 2015 first quarter was $1.6 million, or $0.79 per
diluted share, compared to net income for the 2014 first quarter of $1.8
million, or $0.86 per diluted share. Annualized returns on average
equity (“ROE”) and average assets (“ROA”) for the 2015 first quarter
were 10.23% and 0.96%, respectively, compared with 13.10% and 1.08% for
the 2014 first quarter.
Mr. Caldwell continued: “During the 2015 first quarter the Board of
Directors had a strategic planning session that included a comprehensive
review of our company, our strategic direction, and our growth
potential. The meeting provided us further confidence in our position in
the marketplace, the products and services we offer our customers, and
the ways we can further grow our franchise. We have a great platform for
growth supported by two compelling operating geographies, a healthy
balance sheet, strong capital levels, and an experienced and
community-oriented management team. As we start the year, we are
optimistic we have the plan in place to support our long-term objectives
and profitably grow our banking franchise.”
Income Statement
Net interest income for the 2015 first quarter was approximately $6.2
million, compared to nearly $6.0 million for the 2014 first quarter. The
3.3% increase in net interest income for the 2015 first quarter was a
result of a reduction in funding costs, primarily through an 11.6%
decline in deposit expenses. The net interest margin for the 2015 first
quarter was 4.02%, compared to 4.20% for the same period of 2014.
Noninterest income for the 2015 first quarter was up 11.3% to $0.8
million, primarily a result of gains on the sales of investments and
loans. Noninterest expense for the 2015 first quarter was $4.8 million,
an increase of approximately $0.6 million from the 2014 first quarter.
The higher noninterest expenses were primarily due to higher operating
and advertising expenses to support the company’s growth objectives.
“Our asset quality and liquidity continues to improve,” said Donald L.
Stacy, Chief Financial Officer. “Nonperforming assets of $10.5 million
in the 2015 first quarter were at the lowest level since 2008 and we
expect this amount will continue to decline. We had $45.3 million in
cash and cash equivalents on our balance sheet at March 31, 2015 and net
loans to total deposits of 76.1%. We have an active pipeline of
potential loans, which we are working on closing in the coming quarters.
Our secondary mortgage program is developing, albeit at a slower rate
than we initially thought. With improving weather conditions and a
focused advertising spend in our Central Ohio market to take advantage
of seasonal housing trends, we believe we can improve our execution in
this market. We have incurred higher operating costs to support these
initiatives, which may remain elevated over the near-term. We continue
to manage our costs of interest-bearing liabilities, which fell 11 basis
points in the 2015 first quarter, compared to the prior year period, and
helped offset the increase in operating expenses.”
Balance Sheet
Total assets at March 31, 2015 increased 4.5% to a record $699.9
million, from $670.0 million at March 31, 2014. Net loans at March 31,
2015 were $469.4 million, compared to $436.7 million at March 31, 2014.
The 7.5% year-over-year improvement in net loans was a result of loan
growth in both residential and commercial mortgages, which increased
7.4% and 17.9%, respectively. This was offset primarily by a 14.0%
year-over-year reduction of commercial and industrial loans.
Total deposits at March 31, 2015 increased 3.8% to $617.1 million from
$594.8 million at March 31, 2014. The company continues to proactively
manage its cost of funds and control deposit growth. The investment
portfolio, which is entirely classified as available for sale, stood at
$151.2 million at March 31, 2015, compared to $155.9 million at March
31, 2014.
Stockholders’ Equity and Dividends
Tangible stockholders’ equity increased 17.4% to $61.0 million for the
2015 first quarter, compared to $52.0 million at March 31, 2014. On a
per share basis, tangible stockholders’ equity increased 16.2% to $29.65
at March 31, 2015 from $25.52 at March 31, 2014. The increase is the
result of a higher level of retained earnings and accumulated other
comprehensive income, which was offset by cash dividends paid to
shareholders. At March 31, 2015, the company had a Tier 1 leverage ratio
of 9.69%, up from 9.15% at March 31, 2014.
During the 2015 first quarter, the company paid cash dividends of $0.26
per share, which represents a dividend payout ratio of 32.80%.
Asset Quality
The provision for loan losses for the 2015 first quarter was $0.1
million, compared to $0.2 million for the 2014 first quarter.
Nonperforming assets at March 31, 2015 were $10.5 million, compared to
$13.4 million at March 31, 2014. Net charge-offs for the 2015 first
quarter were $0.5 million, or 0.43% of average loans, annualized
compared to $0.2 million, or 0.19% of average loans, annualized. The
allowance for loan losses at March 31, 2015 stood at $6.4 million, or
1.35% of total loans, compared to $7.0 million or 1.58% of total loans
at March 31, 2014.
The following table provides a summary of asset quality and reserve
coverage ratios.
|
|
|
|
|
Asset Quality History
|
|
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2015
|
|
|
12/31/2014
|
|
|
3/31/2014
|
|
|
12/31/2012
|
|
|
12/31/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans
|
|
$
|
8,262
|
|
$
|
9,048
|
|
$
|
10,741
|
|
$
|
14,224
|
|
$
|
24,546
|
Real estate owned
|
|
|
2,203
|
|
|
2,590
|
|
|
2,656
|
|
|
1,846
|
|
|
2,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming assets
|
|
|
10,465
|
|
|
11,638
|
|
|
13,397
|
|
|
16,070
|
|
|
26,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses
|
|
|
6,447
|
|
|
6,846
|
|
|
7,015
|
|
|
7,779
|
|
|
6,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans to total loans
|
|
|
1.74%
|
|
|
1.92%
|
|
|
2.42%
|
|
|
3.48%
|
|
|
6.12%
|
Nonperforming assets to total assets
|
|
|
1.50%
|
|
|
1.72%
|
|
|
2.00%
|
|
|
2.40%
|
|
|
4.09%
|
Allowance for loan losses to total loans
|
|
|
1.35%
|
|
|
1.45%
|
|
|
1.58%
|
|
|
1.90%
|
|
|
1.70%
|
Allowance for loan losses to nonperforming loans
|
|
|
78.03%
|
|
|
75.66%
|
|
|
65.31%
|
|
|
54.69%
|
|
|
27.78%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Middlefield Banc Corp., headquartered in Middlefield, Ohio, is a bank
holding company with total assets of $699.9 million at March 31, 2015.
The bank operates 10 full service banking centers and an LPL Financial®
brokerage office serving Chardon, Cortland, Dublin, Garrettsville,
Mantua, Middlefield, Newbury, Orwell, and Westerville. Additional
information is available at www.middlefieldbank.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, 2015 and 2014 and December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet (period end)
|
|
|
March 31,
|
|
|
December 31,
|
|
|
March 31,
|
(Dollar amounts in thousands)
|
|
|
2015
|
|
|
2014
|
|
|
2014
|
|
|
|
(unaudited)
|
|
|
|
|
|
(unaudited)
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and due from banks
|
|
$
|
32,727
|
|
|
$
|
20,846
|
|
|
$
|
28,663
|
|
Federal funds sold
|
|
|
12,535
|
|
|
|
4,793
|
|
|
|
14,147
|
|
Cash and cash equivalents
|
|
|
45,262
|
|
|
|
25,639
|
|
|
|
42,810
|
|
Investment securities available for sale
|
|
|
151,159
|
|
|
|
154,334
|
|
|
|
155,940
|
|
Loans held for sale
|
|
|
690
|
|
|
|
438
|
|
|
|
-
|
|
Loans:
|
|
|
475,818
|
|
|
|
470,584
|
|
|
|
443,729
|
|
Less: reserve for loan losses
|
|
|
6,447
|
|
|
|
6,846
|
|
|
|
7,015
|
|
Net loans
|
|
|
469,371
|
|
|
|
463,738
|
|
|
|
436,714
|
|
Premises and equipment
|
|
|
9,927
|
|
|
|
9,980
|
|
|
|
9,797
|
|
Goodwill
|
|
|
4,559
|
|
|
|
4,559
|
|
|
|
4,559
|
|
Core deposit intangible
|
|
|
106
|
|
|
|
116
|
|
|
|
146
|
|
Bank-owned life insurance
|
|
|
9,161
|
|
|
|
9,092
|
|
|
|
8,883
|
|
Accrued interest receivable and other assets
|
|
|
9,699
|
|
|
|
9,635
|
|
|
|
11,173
|
|
Total Assets
|
|
$
|
699,934
|
|
|
|
677,531
|
|
|
|
670,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
March 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
2014
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand deposits
|
|
$
|
105,728
|
|
|
$
|
105,512
|
|
|
$
|
88,988
|
|
Interest-bearing demand deposits
|
|
|
64,460
|
|
|
|
56,377
|
|
|
|
60,673
|
|
Money market accounts
|
|
|
77,099
|
|
|
|
75,895
|
|
|
|
75,296
|
|
Savings deposits
|
|
|
179,850
|
|
|
|
178,470
|
|
|
|
179,805
|
|
Time deposits
|
|
|
190,006
|
|
|
|
169,858
|
|
|
|
190,004
|
|
Total Deposits
|
|
|
617,143
|
|
|
|
586,112
|
|
|
|
594,766
|
|
Short-term borrowings
|
|
|
4,913
|
|
|
|
14,808
|
|
|
|
5,320
|
|
Other borrowings
|
|
|
10,533
|
|
|
|
10,624
|
|
|
|
11,468
|
|
Other liabilities
|
|
|
1,661
|
|
|
|
2,120
|
|
|
|
1,774
|
|
Total Liabilities
|
|
|
634,250
|
|
|
|
613,664
|
|
|
|
613,328
|
|
|
|
|
|
|
|
|
|
|
|
Common equity
|
|
|
35,706
|
|
|
|
35,529
|
|
|
|
35,115
|
|
Retained earnings
|
|
|
33,618
|
|
|
|
32,524
|
|
|
|
28,699
|
|
Accumulated other comprehensive income (loss)
|
|
|
3,094
|
|
|
|
2,548
|
|
|
|
(386
|
)
|
Treasury stock
|
|
|
(6,734
|
)
|
|
|
(6,734
|
)
|
|
|
(6,734
|
)
|
Total Stockholders' Equity
|
|
|
65,684
|
|
|
|
63,867
|
|
|
|
56,694
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
699,934
|
|
|
$
|
677,531
|
|
|
$
|
670,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIDDLEFIELD BANC CORP.
|
Consolidated Selected Financial Highlights
|
March 31, 2015 and 2014
|
(Dollar amounts in thousands)
|
(unaudited)
|
|
|
|
For the Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2015
|
|
|
2014
|
INTEREST INCOME
|
|
|
|
|
|
|
Interest and fees on loans
|
|
$
|
5,843
|
|
|
$
|
5,694
|
|
Interest-bearing deposits in other institutions
|
|
|
8
|
|
|
|
5
|
|
Federal funds sold
|
|
|
3
|
|
|
|
3
|
|
Investment securities
|
|
|
|
|
|
|
Taxable interest
|
|
|
395
|
|
|
|
509
|
|
Tax-exempt interest
|
|
|
759
|
|
|
|
755
|
|
Dividends on stock
|
|
|
27
|
|
|
|
23
|
|
Total interest income
|
|
|
7,035
|
|
|
|
6,989
|
|
INTEREST EXPENSE
|
|
|
|
|
|
|
Deposits
|
|
|
831
|
|
|
|
940
|
|
Short term borrowings
|
|
|
37
|
|
|
|
35
|
|
Other borrowings
|
|
|
23
|
|
|
|
32
|
|
Trust preferred securities
|
|
|
(8
|
)
|
|
|
26
|
|
Total interest expense
|
|
|
883
|
|
|
|
1,033
|
|
|
|
|
|
|
|
|
NET INTEREST INCOME
|
|
|
6,152
|
|
|
|
5,956
|
|
|
|
|
|
|
|
|
Provision for loan losses
|
|
|
105
|
|
|
|
180
|
|
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
|
|
6,047
|
|
|
|
5,776
|
|
NONINTEREST INCOME
|
|
|
|
|
|
|
Service charges on deposits
|
|
|
441
|
|
|
|
441
|
|
Investment securities gains (losses), net
|
|
|
24
|
|
|
|
(6
|
)
|
Earnings on bank-owned life insurance
|
|
|
69
|
|
|
|
67
|
|
Gains on sale of loans
|
|
|
53
|
|
|
|
-
|
|
Other income
|
|
|
209
|
|
|
|
213
|
|
Total noninterest income
|
|
|
796
|
|
|
|
715
|
|
NONINTEREST EXPENSE
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
|
2,360
|
|
|
|
2,016
|
|
Occupancy expense
|
|
|
349
|
|
|
|
321
|
|
Equipment expense
|
|
|
216
|
|
|
|
220
|
|
Data processing costs
|
|
|
250
|
|
|
|
214
|
|
Ohio state franchise tax
|
|
|
75
|
|
|
|
83
|
|
Federal deposit insurance expense
|
|
|
112
|
|
|
|
132
|
|
Professional fees
|
|
|
319
|
|
|
|
287
|
|
Loss (gain) on sale of other real estate owned
|
|
|
88
|
|
|
|
(5
|
)
|
Advertising expense
|
|
|
196
|
|
|
|
123
|
|
Other real estate expense
|
|
|
65
|
|
|
|
63
|
|
Directors Fees
|
|
|
118
|
|
|
|
86
|
|
Other operating expense
|
|
|
663
|
|
|
|
689
|
|
Total noninterest expense
|
|
|
4,811
|
|
|
|
4,229
|
|
Income before income taxes
|
|
|
2,032
|
|
|
|
2,262
|
|
Provision for income taxes
|
|
|
404
|
|
|
|
499
|
|
NET INCOME
|
|
$
|
1,628
|
|
|
$
|
1,763
|
|
|
|
|
|
|
|
|
Per common share data
|
|
|
|
|
|
|
Net income per common share - basic
|
|
$
|
0.79
|
|
|
$
|
0.87
|
|
Net income per common share - diluted
|
|
$
|
0.79
|
|
|
$
|
0.86
|
|
Dividends declared
|
|
$
|
0.26
|
|
|
$
|
0.26
|
|
Book value per share (period end)
|
|
$
|
31.92
|
|
|
$
|
27.83
|
|
Tangible book value per share (period end)
|
|
$
|
29.65
|
|
|
$
|
25.52
|
|
Dividend payout ratio
|
|
|
32.80
|
%
|
|
|
30.01
|
%
|
Average shares outstanding - basic
|
|
|
2,053,660
|
|
|
|
2,033,480
|
|
Average shares outstanding - diluted
|
|
|
2,062,867
|
|
|
|
2,039,515
|
|
Period ending shares outstanding
|
|
|
2,058,026
|
|
|
|
2,037,359
|
|
|
|
|
|
|
|
|
Selected ratios
|
|
|
|
|
|
|
Return on average assets
|
|
|
0.96
|
%
|
|
|
1.08
|
%
|
Return on average equity
|
|
|
10.23
|
%
|
|
|
13.10
|
%
|
Yield on earning assets
|
|
|
4.56
|
%
|
|
|
4.88
|
%
|
Cost of interest-bearing liabilities
|
|
|
0.70
|
%
|
|
|
0.81
|
%
|
Net interest spread
|
|
|
3.86
|
%
|
|
|
4.07
|
%
|
Net interest margin
|
|
|
4.02
|
%
|
|
|
4.20
|
%
|
Efficiency (1)
|
|
|
65.56
|
%
|
|
|
59.90
|
%
|
Tier 1 capital ratio (holding company)
|
|
|
9.69
|
%
|
|
|
9.15
|
%
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
Commercial and industrial
|
|
$
|
48,916
|
|
|
$
|
56,855
|
|
Real estate - construction
|
|
|
24,763
|
|
|
|
25,241
|
|
Real estate - mortgage:
|
|
|
|
|
|
|
Residential
|
|
|
231,836
|
|
|
|
215,809
|
|
Commercial
|
|
|
165,680
|
|
|
|
140,543
|
|
Consumer installment
|
|
|
4,623
|
|
|
|
5,281
|
|
|
|
|
475,818
|
|
|
|
443,729
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
March 31,
|
Asset quality data
|
|
|
2015
|
|
|
2014
|
(Dollar amounts in thousands)
|
|
|
|
|
|
|
Non-accrual loans
|
|
$
|
6,329
|
|
|
$
|
7,463
|
|
Troubled debt restructuring
|
|
|
1,767
|
|
|
|
2,035
|
|
90 day past due and accruing
|
|
|
166
|
|
|
|
1,243
|
|
Nonperforming loans
|
|
|
8,262
|
|
|
|
10,741
|
|
Other real estate owned
|
|
|
2,203
|
|
|
|
2,656
|
|
Nonperforming assets
|
|
$
|
10,465
|
|
|
$
|
13,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses
|
|
$
|
6,447
|
|
|
$
|
7,015
|
|
Allowance for loan and lease losses/total loans
|
|
|
1.35
|
%
|
|
|
1.58
|
%
|
Net charge-offs:
|
|
|
|
|
|
|
Year-to-date
|
|
|
504
|
|
|
|
211
|
|
Net charge-offs to average loans, annualized
|
|
|
|
|
|
|
Year-to-date
|
|
|
0.43
|
%
|
|
|
0.19
|
%
|
Nonperforming loans/total loans
|
|
|
1.74
|
%
|
|
|
2.42
|
%
|
Allowance for loan and lease losses/nonperforming loans
|
|
|
78.03
|
%
|
|
|
65.31
|
%
|
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