MIDDLEFIELD, Ohio, Jan. 27, 2023 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the three and twelve-months ended December 31, 2022.
2022 Financial Highlights (on a year-over-year basis unless noted):
- Returned $11.6 million of capital to shareholders through cash dividends and the repurchase of 229,420 shares at an average price of $26.67 per share
- Net income was $15.7 million, or $2.59 per diluted share, compared to $18.6 million, or $3.00 per diluted share
- Non-GAAP(1) net income, adjusted for certain one-time items and expenses associated with the Liberty Bancshares, Inc. merger, was $18.3 million, or $3.03 per diluted share, compared to $18.5 million, or $2.98 per diluted share
- Non-GAAP(1) ROAE and ROATE, adjusted for certain one-time items and expenses associated with the Liberty Bancshares, Inc. merger, was 13.15% and 15.12%, respectively, compared to 12.65% and 14.27%, respectively
- Twelve-month pre-tax income benefited from $1.2 million of net fees associated with the Paycheck Protection Program ("PPP"), compared to $1.1 million in the 2021 full year
- Net interest margin improved by 30 basis points to 4.08%, compared to 3.78%
- Total loans were $1.35 billion, compared to $981.7 million at December 31, 2021
- Total loans increased organically by $91.4 million, or 9.6% from December 31, 2021, without the impact of PPP loan forgiveness and the Liberty Bancshares, Inc. merger
- Strong asset quality with nonperforming loans to total loans of 0.52%, compared to 0.49%
- Allowance for loan losses was 1.07% of total loans, compared to 1.46%
"Middlefield experienced another excellent year of core earnings driven by a 4.08% net interest margin, a 9.6% increase in organic loans, and robust asset quality. These results reflect the execution of our strategic plan, the dedication of our skilled team members, and the value we provide our local communities. In addition, we completed the Liberty Bancshares merger during the 2022 fourth quarter, which increased our scale and exposure in the Central and Northwest Ohio regions. We are delighted to bring our common philosophies to customers within these markets. Over the next several months, we will focus on integrating Liberty into Middlefield's organization," stated James R. Heslop, II, Chief Executive Officer.
"Our performance during 2022 was encouraging as we overcame the Federal Reserve's rapid increase in interest rates, growing competition for deposits and increased economic uncertainty. While we expect these trends to continue throughout 2023, we are well-positioned to navigate a more challenging landscape due to our strong capital position, excellent asset quality and favorable net interest margin. Most importantly, our solid financial position allows us to support our local communities during an increasingly complex operating environment while continuing to focus on creating value and returning capital to our shareholders," concluded Mr. Heslop.
Income Statement
Net interest income for the twelve-months ended December 31, 2022, was $50.2 million, an increase of $2.1 million or 4.2%, compared to $48.1 million last year. The net interest margin for the 2022 twelve-month period was 4.08%, compared to 3.78% for the same period the previous year. Net interest income for the 2022 fourth quarter was $14.1 million, compared to $12.0 million for the 2021 fourth quarter. The 17.7% increase in net interest income for the 2022 fourth quarter from the same period in 2021 was primarily a result of higher interest income. The net interest margin for the 2022 fourth quarter was 4.23%, compared to 3.81% for the same period of 2021.
For the 2022 twelve-month period, noninterest income was $6.7 million, compared to $7.2 million, a decrease of $460,000 or 6.4%, for the same period last year. Noninterest income for 2022 benefitted from $951,000 of gross rental income related to leasing other real estate owned, mostly offset by $686,000 of related gross rental expense. Noninterest income for the 2022 fourth quarter was $2.4 million, compared to $1.5 million for the same period last year.
For the 2022 twelve-month period, noninterest expense increased $6.1 million, or 19.0%, to $38.0 million, compared to $31.9 million for the same period last year. Operating costs in the 2022 fourth quarter increased 57.6% to $12.3 million from $7.8 million for the 2021 fourth quarter. The Company incurred $1.4 million of additional operating expenses associated with the Liberty Bancshares, Inc. merger during the 2022 fourth quarter and $2.4 million during the 2022 twelve-month period. In addition, the Company incurred a net loss on other real estate owned of $1.7 million during the 2022 fourth quarter mostly due to the write-down of an other real estate asset.
Net income for the 2022 twelve-month period was $15.7 million, or $2.59 per diluted share, compared to $18.6 million, or $3.00 per diluted share, for the same period last year. Non-GAAP(1) net income, adjusted for certain one-time items and expenses associated with the Liberty Bancshares, Inc. merger, was $18.3 million, or $3.03 per diluted share for the 2022 twelve-month period, compared to $18.5 million, or $2.98 per diluted share for the same period last year.
Net income for the 2022 fourth quarter was $3.5 million, or $0.53 per diluted share, compared to $4.8 million, or $0.81 per diluted share, for the same period last year. Non-GAAP(1) net income, adjusted for certain one-time items and expenses associated with the Liberty Bancshares, Inc. merger, was $5.2 million, or $0.79 per diluted share for the 2022 fourth quarter, compared to $4.8 million, or $0.80 per diluted share for the same period last year.
Balance Sheet
Total assets at December 31, 2022, increased to approximately $1.69 billion from $1.33 billion at December 31, 2021. The $356.6 million, or 26.8%, year-over-year increase in total assets was primarily due to the Liberty Bancshares, Inc. merger. Net loans at December 31, 2022, increased 38.4% to $1.34 billion, compared to $967.3 million at December 31, 2021. On an organic basis, without the impact of PPP loan forgiveness and the Liberty Bancshares, Inc. merger, total loans at December 31, 2022, increased 9.6%, compared to December 31, 2021.
Since 2020, Middlefield has helped customers receive $211.8 million of forgiveness payments under the terms of the Paycheck Protection Program, including processing $33.4 million of forgiveness payments for the 2022 full year. The balance of PPP loans outstanding at December 31, 2022, was $0.7 million.
Total deposits at December 31, 2022, were $1.40 billion, compared to $1.17 billion at December 31, 2021. The 20.2% increase in deposits was primarily due to the Liberty Bancshares, Inc. merger. On an organic basis, total deposits at December 31, 2022, decreased 7.8% compared to December 31, 2021. The investment portfolio was $165.0 million at December 31, 2022, compared with $170.2 million at December 31, 2021.
Donald L. Stacy, Chief Financial Officer, stated, "While we expect an increase in the cost of funds to pressure net interest margin in future quarters, we entered this period with the highest net interest margin since 2000. Asset quality remains strong across our portfolio, as nonperforming loans to total loans were just 0.52% at December 31, 2022, compared to 0.49% at December 31, 2021."
Mr. Stacy continued, "With a net loan-to-deposit ratio of 95.5%, $53.8 million in cash and cash equivalents, and $165.0 million in investment securities at December 31, 2022, we believe we have ample liquidity and capital levels to support our long-term growth strategies, dividend payment, and share repurchase program. Since January 2019, we have repurchased 898,901 shares, representing 13.9% of the outstanding shares prior to our repurchase program. This includes 229,420 shares repurchased during 2022 at an average of $26.67 per share."
Stockholders' Equity and Dividends
At December 31, 2022, stockholders' equity was $197.7 million compared to $145.3 million at December 31, 2021. The 36.0% year-over-year increase in stockholders' equity was primarily due to the Liberty Bancshares, Inc. merger, partially offset by an increase in the unrealized loss on the available-for-sale investment portfolio and the Company's stock repurchase program. On a per-share basis, shareholders' equity at December 31, 2022, was $23.98 compared to $24.68 at December 31, 2021.
Tangible stockholders' equity(1) was $158.3 million for December 31, 2022, compared to $128.9 million at December 31, 2021. On a per-share basis, tangible stockholders' equity(1) at December 31, 2022, was $19.19, compared to $21.88 at December 31, 2021.
For the 2022 full year, cash dividends declared per share increased 17.4% to $0.81 totaling $5.5 million, compared to $0.69 per share or $4.2 million for the same period last year. Dividends in 2022 included a $0.10 per share one-time dividend payment declared in the fourth quarter.
At December 31, 2022, the Company had an equity-to-assets leverage ratio of 11.71%, compared to 10.92% at December 31, 2021. The year-over-year increase in the Company's equity-to-assets leverage ratio occurred even as Middlefield invested $6.1 million in its share repurchase program.
Asset Quality
No provision for loan losses was recorded for the 2022 fourth quarter, compared to a net loan loss recovery of $200,000 for the 2021 fourth quarter. There was no provision for loan losses for the 2022 full year period versus a $700,000 provision for loan losses for the same period last year.
Net charge-offs were $94,000, or 0.03% of average loans, annualized, during the 2022 fourth quarter, compared to net recoveries of $308,000 for the same quarter last year. For the 2022 full year, net recoveries were $96,000, or 0.01% of average loans, compared to net recoveries of $183,000, or 0.02% of average loans for the full year ended December 31, 2021.
Nonperforming assets at December 31, 2022, were $12.8 million, compared to $11.9 million at December 31, 2021. Nonperforming loans at December 31, 2022, were $7.0 million, compared to $4.9 million at December 31, 2021 primarily due to the Liberty Bancshares, Inc. merger. The allowance for loan losses at December 31, 2022, stood at $14.4 million, or 1.07% of total loans, compared to $14.3 million, or 1.46% of total loans at December 31, 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 $1.69 billion at December 31, 2022. The Bank operates 22 full-service banking centers and an LPL Financial® brokerage office serving Ada, Beachwood, Bellefontaine, Chardon, Cortland, Dublin, Garrettsville, Kenton, Mantua, Marysville, 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) 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
(Dollar amounts in thousands, unaudited)
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||
| Balance Sheets (period end) | 2022 | 2022 | 2022 | 2022 | 2021 | |||||||||
| ASSETS | ||||||||||||||
| Cash and due from banks | $ | 51,404 | $ | 119,777 | $ | 60,114 | $ | 78,804 | $ | 97,172 | ||||
| Federal funds sold | 2,405 | 8,800 | 19,039 | 29,474 | 22,322 | |||||||||
| Cash and cash equivalents | 53,809 | 128,577 | 79,153 | 108,278 | 119,494 | |||||||||
| Equity securities, at fair value | 915 | 972 | 779 | 851 | 818 | |||||||||
| Investment securities available for sale, at fair value | 164,967 | 162,064 | 171,958 | 175,216 | 170,199 | |||||||||
| Loans held for sale | - | - | - | 9 | 1,051 | |||||||||
| Loans: | ||||||||||||||
| Commercial real estate: | ||||||||||||||
| Owner occupied | 191,748 | 120,912 | 120,771 | 113,590 | 111,470 | |||||||||
| Non-owner occupied | 380,580 | 285,419 | 288,334 | 293,745 | 283,618 | |||||||||
| Multifamily | 58,251 | 38,063 | 29,152 | 29,385 | 31,189 | |||||||||
| Residential real estate | 296,308 | 247,612 | 246,453 | 244,747 | 240,089 | |||||||||
| Commercial and industrial | 195,602 | 146,987 | 137,398 | 131,683 | 148,812 | |||||||||
| Home equity lines of credit | 128,065 | 114,344 | 111,730 | 106,300 | 104,355 | |||||||||
| Construction and other | 94,199 | 33,748 | 35,988 | 50,152 | 54,148 | |||||||||
| Consumer installment | 8,119 | 8,110 | 8,171 | 8,118 | 8,010 | |||||||||
| Total loans | 1,352,872 | 995,195 | 977,997 | 977,720 | 981,691 | |||||||||
| Less allowance for loan and lease losses | 14,438 | 14,532 | 14,550 | 14,492 | 14,342 | |||||||||
| Net loans | 1,338,434 | 980,663 | 963,447 | 963,228 | 967,349 | |||||||||
| Premises and equipment, net | 21,961 | 16,215 | 17,030 | 17,142 | 17,272 | |||||||||
| Goodwill | 31,735 | 15,071 | 15,071 | 15,071 | 15,071 | |||||||||
| Core deposit intangibles | 7,701 | 1,171 | 1,249 | 1,326 | 1,403 | |||||||||
| Bank-owned life insurance | 33,811 | 17,382 | 17,274 | 17,166 | 17,060 | |||||||||
| Other real estate owned | 5,821 | 6,792 | 6,792 | 6,992 | 6,992 | |||||||||
| Accrued interest receivable and other assets | 28,528 | 22,104 | 20,624 | 18,019 | 14,297 | |||||||||
| TOTAL ASSETS | $ | 1,687,682 | $ | 1,351,011 | $ | 1,293,377 | $ | 1,323,298 | $ | 1,331,006 | ||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||
| LIABILITIES | ||||||||||||||
| Deposits: | ||||||||||||||
| Noninterest-bearing demand | $ | 503,907 | $ | 383,675 | $ | 379,872 | $ | 361,251 | $ | 334,171 | ||||
| Interest-bearing demand | 164,677 | 160,112 | 154,788 | 162,010 | 196,308 | |||||||||
| Money market | 187,498 | 162,052 | 185,494 | 187,807 | 177,281 | |||||||||
| Savings | 307,917 | 247,466 | 252,179 | 264,784 | 260,125 | |||||||||
| Time | 238,020 | 177,182 | 174,833 | 191,320 | 198,725 | |||||||||
| Total deposits | 1,402,019 | 1,130,487 | 1,147,166 | 1,167,172 | 1,166,610 | |||||||||
| Short-term borrowings | 65,000 | 80,000 | - | - | - | |||||||||
| Other borrowings | 12,059 | 12,107 | 12,910 | 12,975 | 12,901 | |||||||||
| Accrued interest payable and other liabilities | 10,913 | 5,562 | 5,081 | 5,507 | 6,160 | |||||||||
| TOTAL LIABILITIES | 1,489,991 | 1,228,156 | 1,165,157 | 1,185,654 | 1,185,671 | |||||||||
| STOCKHOLDERS' EQUITY | ||||||||||||||
| Common stock, no par value; 10,000,000 shares authorized, 9,916,466 | ||||||||||||||
| shares issued, 8,245,235 shares outstanding as of December 31, 2022 | 161,029 | 87,640 | 87,562 | 87,562 | 87,131 | |||||||||
| Retained earnings | 94,154 | 93,166 | 89,900 | 86,804 | 83,971 | |||||||||
| Accumulated other comprehensive (loss) income | (22,144) | (25,080) | (17,591) | (6,674) | 3,462 | |||||||||
| Treasury stock, at cost; 1,671,231 shares as of December 31, 2022 | (35,348) | (32,871) | (31,651) | (30,048) | (29,229) | |||||||||
| TOTAL STOCKHOLDERS' EQUITY | 197,691 | 122,855 | 128,220 | 137,644 | 145,335 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,687,682 | $ | 1,351,011 | $ | 1,293,377 | $ | 1,323,298 | $ | 1,331,006 |
MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, except per share and share amounts, unaudited)
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | December 31, | ||||||||||||||
| Statements of Income | 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||
| INTEREST AND DIVIDEND INCOME | ||||||||||||||||||||
| Interest and fees on loans | $ | 14,368 | $ | 11,892 | $ | 11,268 | $ | 10,985 | $ | 11,586 | $ | 48,513 | $ | 47,896 | ||||||
| Interest-earning deposits in other institutions | 240 | 134 | 74 | 24 | 30 | 472 | 90 | |||||||||||||
| Federal funds sold | 119 | 51 | 46 | 3 | 1 | 219 | 3 | |||||||||||||
| Investment securities: | ||||||||||||||||||||
| Taxable interest | 477 | 449 | 442 | 443 | 438 | 1,811 | 1,679 | |||||||||||||
| Tax-exempt interest | 986 | 982 | 955 | 784 | 732 | 3,707 | 2,565 | |||||||||||||
| Dividends on stock | 68 | 59 | 33 | 24 | 23 | 184 | 102 | |||||||||||||
| Total interest and dividend income | 16,258 | 13,567 | 12,818 | 12,263 | 12,810 | 54,906 | 52,335 | |||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||
| Deposits | 1,771 | 812 | 709 | 726 | 783 | 4,018 | 3,913 | |||||||||||||
| Short-term borrowings | 263 | 44 | - | - | - | 307 | - | |||||||||||||
| Other borrowings | 142 | 112 | 81 | 69 | 67 | 404 | 282 | |||||||||||||
| Total interest expense | 2,176 | 968 | 790 | 795 | 850 | 4,729 | 4,195 | |||||||||||||
| NET INTEREST INCOME | 14,082 | 12,599 | 12,028 | 11,468 | 11,960 | 50,177 | 48,140 | |||||||||||||
| Provision for loan losses | - | - | - | - | (200) | - | 700 | |||||||||||||
| NET INTEREST INCOME AFTER PROVISION | ||||||||||||||||||||
| FOR LOAN LOSSES | 14,082 | 12,599 | 12,028 | 11,468 | 12,160 | 50,177 | 47,440 | |||||||||||||
| NONINTEREST INCOME | ||||||||||||||||||||
| Service charges on deposit accounts | 976 | 1,004 | 956 | 914 | 906 | 3,850 | 3,425 | |||||||||||||
| (Losses) gains on equity securities | (77) | (57) | (72) | 33 | (14) | (173) | 209 | |||||||||||||
| Earnings on bank-owned life insurance | 137 | 108 | 108 | 106 | 106 | 459 | 546 | |||||||||||||
| (Losses) gains on sale of loans | (4) | 7 | 18 | 3 | 118 | 24 | 1,240 | |||||||||||||
| Revenue from investment services | 147 | 233 | 153 | 141 | 198 | 674 | 727 | |||||||||||||
| Other income | 1,235 | 251 | 220 | 206 | 221 | 1,912 | 1,059 | |||||||||||||
| Total noninterest income | 2,414 | 1,546 | 1,383 | 1,403 | 1,535 | 6,746 | 7,206 | |||||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||||||
| Salaries and employee benefits | 4,886 | 4,491 | 3,785 | 4,386 | 4,088 | 17,548 | 17,151 | |||||||||||||
| Occupancy expense | 487 | 458 | 583 | 505 | 542 | 2,033 | 2,048 | |||||||||||||
| Equipment expense | 252 | 233 | 274 | 315 | 358 | 1,074 | 1,361 | |||||||||||||
| Data processing costs | 1,050 | 985 | 822 | 844 | 851 | 3,701 | 3,298 | |||||||||||||
| Ohio state franchise tax | 279 | 293 | 292 | 293 | 285 | 1,157 | 1,144 | |||||||||||||
| Federal deposit insurance expense | 105 | 84 | 90 | 50 | 50 | 329 | 494 | |||||||||||||
| Professional fees | 382 | 280 | 383 | 455 | 435 | 1,500 | 1,313 | |||||||||||||
| Net loss (gain) on other real estate owned | 1,692 | 1 | 206 | 8 | (66) | 1,907 | 11 | |||||||||||||
| Advertising expense | 308 | 268 | 229 | 228 | 221 | 1,033 | 885 | |||||||||||||
| Software amortization expense | 28 | 27 | 40 | 48 | 119 | 143 | 361 | |||||||||||||
| Core deposit intangible amortization | 140 | 78 | 77 | 77 | 80 | 372 | 321 | |||||||||||||
| Merger-related costs | 1,413 | 390 | 579 | - | - | 2,382 | - | |||||||||||||
| Other expense | 1,321 | 1,298 | 1,175 | 1,057 | 868 | 4,851 | 3,561 | |||||||||||||
| Total noninterest expense | 12,343 | 8,886 | 8,535 | 8,266 | 7,831 | 38,030 | 31,948 | |||||||||||||
| Income before income taxes | 4,153 | 5,259 | 4,876 | 4,605 | 5,864 | 18,893 | 22,698 | |||||||||||||
| Income taxes | 651 | 1,010 | 787 | 772 | 1,027 | 3,220 | 4,065 | |||||||||||||
| NET INCOME | $ | 3,502 | $ | 4,249 | $ | 4,089 | $ | 3,833 | $ | 4,837 | $ | 15,673 | $ | 18,633 | ||||||
| PTPP (1) | $ | 4,153 | $ | 5,259 | $ | 4,876 | $ | 4,605 | $ | 5,664 | $ | 18,893 | $ | 23,398 | ||||||
| (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
(Dollar amounts in thousands, except per share and share amounts, unaudited)
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | December 31, | ||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Per common share data | ||||||||||||||||||||
| Net income per common share - basic | $ | 0.53 | $ | 0.73 | $ | 0.70 | $ | 0.65 | $ | 0.81 | $ | 2.60 | $ | 3.01 | ||||||
| Net income per common share - diluted | $ | 0.53 | $ | 0.73 | $ | 0.70 | $ | 0.65 | $ | 0.81 | $ | 2.59 | $ | 3.00 | ||||||
| Dividends declared per share | $ | 0.30 | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.21 | $ | 0.81 | $ | 0.69 | ||||||
| Book value per share (period end) | $ | 23.98 | $ | 21.30 | $ | 22.07 | $ | 23.43 | $ | 24.68 | $ | 23.98 | $ | 24.68 | ||||||
| Tangible book value per share (period end) (2) (3) | $ | 19.19 | $ | 18.48 | $ | 19.26 | $ | 20.64 | $ | 21.88 | $ | 19.19 | $ | 21.88 | ||||||
| Dividends declared | $ | 2,514 | $ | 983 | $ | 993 | $ | 1,000 | $ | 1,242 | $ | 5,490 | $ | 4,240 | ||||||
| Dividend yield | 4.34% | 2.49% | 2.71% | 2.78% | 3.37% | 2.96% | 2.79% | |||||||||||||
| Dividend payout ratio | 71.79% | 23.13% | 24.28% | 26.09% | 25.68% | 35.03% | 22.76% | |||||||||||||
| Average shares outstanding - basic | 6,593,616 | 5,792,773 | 5,851,422 | 5,879,025 | 5,951,838 | 6,027,091 | 6,186,666 | |||||||||||||
| Average shares outstanding - diluted | 6,610,907 | 5,805,799 | 5,860,098 | 5,889,836 | 5,975,333 | 6,044,382 | 6,211,076 | |||||||||||||
| Period ending shares outstanding | 8,245,235 | 5,767,803 | 5,810,351 | 5,873,565 | 5,888,737 | 8,245,235 | 5,888,737 | |||||||||||||
| Selected ratios | ||||||||||||||||||||
| Return on average assets | 0.97% | 1.32% | 1.25% | 1.17% | 1.41% | 1.17% | 1.36% | |||||||||||||
| Return on average equity | 9.35% | 12.94% | 12.30% | 10.75% | 13.17% | 11.25% | 12.74% | |||||||||||||
| Return on average tangible common equity (2) (4) | 11.13% | 14.79% | 14.02% | 12.13% | 14.85% | 12.95% | 14.38% | |||||||||||||
| Efficiency (1) | 72.75% | 61.07% | 61.83% | 62.54% | 56.56% | 64.96% | 56.38% | |||||||||||||
| Equity to assets at period end | 11.71% | 9.09% | 9.91% | 10.40% | 10.92% | 11.71% | 10.92% | |||||||||||||
| Noninterest expense to average assets | 0.86% | 0.69% | 0.65% | 0.62% | 0.58% | 2.84% | 2.33% | |||||||||||||
| (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)
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | December 31, | ||||||||||||||
| Yields | 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Loans receivable (2) | 5.11% | 4.78% | 4.66% | 4.53% | 4.61% | 4.79% | 4.56% | |||||||||||||
| Investment securities (2) | 3.83% | 3.90% | 3.76% | 3.41% | 3.30% | 3.73% | 3.45% | |||||||||||||
| Interest-earning deposits with other banks | 3.42% | 2.06% | 0.77% | 0.23% | 0.20% | 1.31% | 0.20% | |||||||||||||
| Total interest-earning assets | 4.88% | 4.55% | 4.28% | 4.06% | 4.07% | 4.45% | 4.11% | |||||||||||||
| Deposits: | ||||||||||||||||||||
| Interest-bearing demand deposits | 0.83% | 0.22% | 0.15% | 0.14% | 0.12% | 0.34% | 0.13% | |||||||||||||
| Money market deposits | 1.00% | 0.46% | 0.49% | 0.47% | 0.47% | 0.61% | 0.47% | |||||||||||||
| Savings deposits | 0.49% | 0.19% | 0.06% | 0.06% | 0.06% | 0.20% | 0.06% | |||||||||||||
| Certificates of deposit | 1.30% | 0.96% | 0.83% | 0.87% | 0.90% | 1.00% | 1.13% | |||||||||||||
| Total interest-bearing deposits | 0.87% | 0.43% | 0.36% | 0.37% | 0.36% | 0.51% | 0.44% | |||||||||||||
| Non-Deposit Funding: | ||||||||||||||||||||
| Borrowings | 4.25% | 2.94% | 2.51% | 2.16% | 2.09% | 3.35% | 2.10% | |||||||||||||
| Total interest-bearing liabilities | 1.02% | 0.50% | 0.39% | 0.39% | 0.37% | 0.59% | 0.47% | |||||||||||||
| Cost of deposits | 0.57% | 0.29% | 0.24% | 0.25% | 0.26% | 0.34% | 0.32% | |||||||||||||
| Cost of funds | 0.68% | 0.34% | 0.27% | 0.27% | 0.27% | 0.40% | 0.34% | |||||||||||||
| Net interest margin (1) | 4.23% | 4.23% | 4.02% | 3.80% | 3.81% | 4.08% | 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 | ||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||
| Asset quality data | 2022 | 2022 | 2022 | 2022 | 2021 | |||||||||
| (Dollar amounts in thousands, unaudited) | ||||||||||||||
| Nonperforming loans (1) | $ | 7,013 | $ | 3,692 | $ | 4,670 | $ | 4,728 | $ | 4,859 | ||||
| Other real estate owned | 5,821 | 6,792 | 6,792 | 6,992 | 6,992 | |||||||||
| Nonperforming assets | $ | 12,834 | $ | 10,484 | $ | 11,462 | $ | 11,720 | $ | 11,851 | ||||
| Allowance for loan losses | $ | 14,438 | $ | 14,532 | $ | 14,550 | $ | 14,492 | $ | 14,342 | ||||
| Allowance for loan losses/total loans | 1.07% | 1.46% | 1.49% | 1.48% | 1.46% | |||||||||
| Net charge-offs (recoveries): | ||||||||||||||
| Quarter-to-date | $ | 94 | $ | 18 | $ | (58) | $ | (150) | $ | (308) | ||||
| Year-to-date | (96) | (190) | (208) | (150) | (183) | |||||||||
| Net charge-offs (recoveries) to average loans, annualized: | ||||||||||||||
| Quarter-to-date | 0.03% | 0.01% | -0.02% | -0.06% | -0.12% | |||||||||
| Year-to-date | -0.01% | -0.02% | -0.04% | -0.06% | -0.02% | |||||||||
| Nonperforming loans/total loans | 0.52% | 0.37% | 0.48% | 0.48% | 0.49% | |||||||||
| Allowance for loan losses/nonperforming loans | 205.87% | 393.61% | 311.56% | 306.51% | 295.16% | |||||||||
| Nonperforming assets/total assets | 0.76% | 0.78% | 0.89% | 0.89% | 0.89% | |||||||||
| (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 Period Ended | ||||||||||||||
| (Dollar amounts in thousands, unaudited) | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||
| Stockholders' Equity | $ | 197,691 | $ | 122,855 | $ | 128,220 | $ | 137,644 | $ | 145,335 | ||||
| Less Goodwill and other intangibles | 39,436 | 16,242 | 16,320 | 16,397 | 16,474 | |||||||||
| Tangible Common Equity | $ | 158,255 | $ | 106,613 | $ | 111,900 | $ | 121,247 | $ | 128,861 | ||||
| Shares outstanding | 8,245,235 | 5,767,803 | 5,810,351 | 5,873,565 | 5,888,737 | |||||||||
| Tangible book value per share | $ | 19.19 | $ | 18.48 | $ | 19.26 | $ | 20.64 | $ | 21.88 | ||||
| Reconciliation of Average Equity to Return on Average Tangible Common Equity | ||||||||||||||||||||
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | December 31, | ||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Average Stockholders' Equity | $ | 148,616 | $ | 130,263 | $ | 133,377 | $ | 144,630 | $ | 145,716 | $ | 139,270 | $ | 146,237 | ||||||
| Less Average Goodwill and other intangibles | 23,731 | 16,280 | 16,357 | 16,435 | 16,513 | 18,200 | 16,634 | |||||||||||||
| Average Tangible Common Equity | $ | 124,885 | $ | 113,983 | $ | 117,020 | $ | 128,195 | $ | 129,203 | $ | 121,070 | $ | 129,603 | ||||||
| Net income | $ | 3,502 | $ | 4,249 | $ | 4,089 | $ | 3,833 | $ | 4,837 | $ | 15,673 | $ | 18,633 | ||||||
| Return on average tangible common equity (annualized) | 11.13% | 14.79% | 14.02% | 12.13% | 14.85% | 12.95% | 14.38% | |||||||||||||
| Reconciliation of Pre-Tax Pre-Provision Income (PTPP) | ||||||||||||||||||||
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | December 31, | ||||||||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Net income | $ | 3,502 | $ | 4,249 | $ | 4,089 | $ | 3,833 | $ | 4,837 | $ | 15,673 | $ | 18,633 | ||||||
| Add Income Taxes | 651 | 1,010 | 787 | 772 | 1,027 | 3,220 | 4,065 | |||||||||||||
| Add Provision for loan losses | - | - | - | - | (200) | - | 700 | |||||||||||||
| PTPP | $ | 4,153 | $ | 5,259 | $ | 4,876 | $ | 4,605 | $ | 5,664 | $ | 18,893 | $ | 23,398 | ||||||
| Reconciliation of Net Income, Less Merger and Certain Items | ||||||||||||||
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | December 31, | ||||||||
| 2022 | 2022 | 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||
| Net Income | $ | 3,502 | $ | 4,249 | $ | 4,089 | $ | 3,833 | $ | 4,837 | $ | 15,673 | $ | 18,633 |
| Acquisition related costs- after tax | 1,116 | 308 | 457 | - | - | 1,882 | - | |||||||
| Net loss (gain) on other real estate owned - after tax (1) | 585 | 1 | 163 | 6 | (52) | 755 | (134) | |||||||
| Net Income- Adjusted | $ | 5,203 | $ | 4,558 | $ | 4,709 | $ | 3,839 | $ | 4,785 | $ | 18,310 | $ | 18,499 |
| Diluted EPS excluding merger and one-time items | $ | 0.79 | $ | 0.79 | $ | 0.80 | $ | 0.65 | $ | 0.80 | $ | 3.03 | $ | 2.98 |
| Return on average assets excluding merger and one-time items (annualized) | 1.44% | 1.41% | 1.43% | 1.17% | 1.40% | 1.37% | 1.35% | |||||||
| Return on average equity excluding merger and one-time items (annualized) | 13.89% | 13.88% | 14.16% | 10.77% | 13.03% | 13.15% | 12.65% | |||||||
| Return on average tangible common equity excluding merger and one-time items (annualized) | 16.53% | 15.86% | 16.14% | 12.15% | 14.69% | 15.12% | 14.27% | |||||||
| (1) This includes net rental income earned on other real estate owned. | ||||||||||||||
MIDDLEFIELD BANC CORP.
Average Balance Sheets
(Dollar amounts in thousands, unaudited)
| For the Three Months Ended | ||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||
| Balance | Interest | Yield/Cost | Balance | Interest | Yield/Cost | |||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Loans receivable (3) | $ | 1,117,221 | $ | 14,368 | 5.11% | $ | 999,229 | $ | 11,586 | 4.61% | ||||||||||
| Investment securities (3) | 178,772 | 1,463 | 3.83% | 164,254 | 1,170 | 3.30% | ||||||||||||||
| Interest-earning deposits with other banks (4) | 49,569 | 427 | 3.42% | 104,804 | 54 | 0.20% | ||||||||||||||
| Total interest-earning assets | 1,345,562 | 16,258 | 4.88% | 1,268,287 | 12,810 | 4.07% | ||||||||||||||
| Noninterest-earning assets | 89,740 | 90,556 | ||||||||||||||||||
| Total assets | $ | 1,435,302 | $ | 1,358,843 | ||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing demand deposits | $ | 165,267 | $ | 344 | 0.83% | $ | 212,861 | $ | 66 | 0.12% | ||||||||||
| Money market deposits | 172,437 | 435 | 1.00% | 180,201 | 214 | 0.47% | ||||||||||||||
| Savings deposits | 266,613 | 330 | 0.49% | 257,344 | 39 | 0.06% | ||||||||||||||
| Certificates of deposit | 201,972 | 662 | 1.30% | 204,904 | 464 | 0.90% | ||||||||||||||
| Short-term borrowings | 25,750 | 263 | 4.05% | - | - | 0.00% | ||||||||||||||
| Other borrowings | 12,086 | 142 | 4.66% | 12,934 | 67 | 2.06% | ||||||||||||||
| Total interest-bearing liabilities | 844,125 | 2,176 | 1.02% | 868,244 | 850 | 0.39% | ||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||
| Noninterest-bearing demand deposits | 428,155 | 337,900 | ||||||||||||||||||
| Other liabilities | 14,406 | 6,983 | ||||||||||||||||||
| Stockholders' equity | 148,616 | 145,716 | ||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 1,435,302 | $ | 1,358,843 | ||||||||||||||||
| Net interest income | $ | 14,082 | $ | 11,960 | ||||||||||||||||
| Interest rate spread (1) | 3.86% | 3.68% | ||||||||||||||||||
| Net interest margin (2) | 4.23% | 3.81% | ||||||||||||||||||
| Ratio of average interest-earning assets to | ||||||||||||||||||||
| average interest-bearing liabilities | 159.40% | 146.07% | ||||||||||||||||||
| (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 $278 and $210 for the three months ended December 31, 2022 and 2021, respectively | ||||||||||||||||||||
| (4) Includes dividends received on restricted stock. | ||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||
| December 31, | September 30, | |||||||||||||||||||
| 2022 | 2022 | |||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||
| Balance | Interest | Yield/Cost | Balance | Interest | Yield/Cost | |||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Loans receivable (3) | $ | 1,117,221 | $ | 14,368 | 5.11% | $ | 987,689 | $ | 11,892 | 4.78% | ||||||||||
| Investment securities (3) | 178,772 | 1,463 | 3.83% | 172,316 | 1,431 | 3.90% | ||||||||||||||
| Interest-earning deposits with other banks (4) | 49,569 | 427 | 3.42% | 46,938 | 244 | 2.06% | ||||||||||||||
| Total interest-earning assets | 1,345,562 | 16,258 | 4.88% | 1,206,943 | 13,567 | 4.55% | ||||||||||||||
| Noninterest-earning assets | 89,740 | 73,753 | ||||||||||||||||||
| Total assets | $ | 1,435,302 | $ | 1,280,696 | ||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing demand deposits | $ | 165,267 | $ | 344 | 0.83% | $ | 162,878 | $ | 91 | 0.22% | ||||||||||
| Money market deposits | 172,437 | 435 | 1.00% | 155,095 | 180 | 0.46% | ||||||||||||||
| Savings deposits | 266,613 | 330 | 0.49% | 249,898 | 119 | 0.19% | ||||||||||||||
| Certificates of deposit | 201,972 | 662 | 1.30% | 174,091 | 422 | 0.96% | ||||||||||||||
| Short-term borrowings | 25,750 | 263 | 4.05% | 8,554 | 44 | 2.04% | ||||||||||||||
| Other borrowings | 12,086 | 142 | 4.66% | 12,530 | 112 | 3.55% | ||||||||||||||
| Total interest-bearing liabilities | 844,125 | 2,176 | 1.02% | 763,046 | 968 | 0.50% | ||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||
| Noninterest-bearing demand deposits | 428,155 | 382,351 | ||||||||||||||||||
| Other liabilities | 14,406 | 5,036 | ||||||||||||||||||
| Stockholders' equity | 148,616 | 130,263 | ||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 1,435,302 | $ | 1,280,696 | ||||||||||||||||
| Net interest income | $ | 14,082 | $ | 12,599 | ||||||||||||||||
| Interest rate spread (1) | 3.86% | 4.05% | ||||||||||||||||||
| Net interest margin (2) | 4.23% | 4.23% | ||||||||||||||||||
| Ratio of average interest-earning assets to | ||||||||||||||||||||
| average interest-bearing liabilities | 159.40% | 158.17% | ||||||||||||||||||
| (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 $278 and $277 for the three months ended December 31, 2022 and September 30, 2022, respectively | ||||||||||||||||||||
| (4) Includes dividends received on restricted stock. | ||||||||||||||||||||
| For the Twelve Months Ended | ||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||
| Average | Average | Average | Average | |||||||||||||||||
| Balance | Interest | Yield/Cost | Balance | Interest | Yield/Cost | |||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Loans receivable (3) | $ | 1,014,896 | $ | 48,513 | 4.79% | $ | 1,052,351 | $ | 47,896 | 4.56% | ||||||||||
| Investment securities (3) | 174,514 | 5,518 | 3.73% | 142,705 | 4,244 | 3.45% | ||||||||||||||
| Interest-earning deposits with other banks (4) | 67,030 | 875 | 1.31% | 97,417 | 195 | 0.20% | ||||||||||||||
| Total interest-earning assets | 1,256,440 | 54,906 | 4.45% | 1,292,473 | 52,335 | 4.11% | ||||||||||||||
| Noninterest-earning assets | 84,484 | 78,802 | ||||||||||||||||||
| Total assets | $ | 1,340,924 | $ | 1,371,275 | ||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing demand deposits | $ | 164,569 | $ | 554 | 0.34% | $ | 212,063 | $ | 274 | 0.13% | ||||||||||
| Money market deposits | 174,377 | 1,055 | 0.61% | 186,009 | 869 | 0.47% | ||||||||||||||
| Savings deposits | 259,225 | 527 | 0.20% | 255,267 | 162 | 0.06% | ||||||||||||||
| Certificates of deposit | 188,617 | 1,882 | 1.00% | 231,662 | 2,608 | 1.13% | ||||||||||||||
| Short-term borrowings | 8,576 | 307 | 3.58% | 85 | - | 0.00% | ||||||||||||||
| Other borrowings | 12,626 | 404 | 3.20% | 13,313 | 282 | 2.12% | ||||||||||||||
| Total interest-bearing liabilities | 807,990 | 4,729 | 0.59% | 898,399 | 4,065 | 0.47% | ||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||
| Noninterest-bearing demand deposits | 386,296 | 320,104 | ||||||||||||||||||
| Other liabilities | 7,368 | 6,535 | ||||||||||||||||||
| Stockholders' equity | 139,270 | 146,237 | ||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 1,340,924 | $ | 1,371,275 | ||||||||||||||||
| Net interest income | $ | 50,177 | $ | 48,270 | ||||||||||||||||
| Interest rate spread (1) | 3.86% | 3.64% | ||||||||||||||||||
| Net interest margin (2) | 4.08% | 3.78% | ||||||||||||||||||
| Ratio of average interest-earning assets to | ||||||||||||||||||||
| average interest-bearing liabilities | 155.50% | 143.86% | ||||||||||||||||||
| (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 $1,046 and $752, for 2022 and 2021, respectively. | ||||||||||||||||||||
| (4) Includes dividends received on restricted stock. | ||||||||||||||||||||
| Company Contact: | Investor and Media Contact: |
| James R. Heslop, II Chief Executive Officer Middlefield Banc Corp. (440) 632-1666 Ext. 3219 JHeslop@middlefieldbank.com | Andrew M. Berger Managing Director SM Berger & Company, Inc. (216) 464-6400 andrew@smberger.com |
