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Section 1: 8-K (FORM 8-K)

Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8 – K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

July 19, 2019

(Date of Report: Date of earliest event reported)

 

 

Middlefield Banc Corp.

(Exact name of registrant as specified in its charter)

 

 

Ohio

(State or other jurisdiction of incorporation)

001-36613

(Commission File Number)

34-1585111

(I.R.S. Employer Identification Number)

15985 East High Street

Middlefield, Ohio 44062

(Address of principal executive offices, including zip code)

(440) 632-1666

(Registrant’s telephone number, including area code)

(not applicable)

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Trading

Symbol(s)

  

Name of each exchange

on which registered

Common Stock, no par value    MBCN   

The NASDAQ Stock Market, LLC

(NASDAQ Capital Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


ITEM 2.02

RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following information is furnished under Item 2.02. On July 19, 2019, Middlefield Banc Corp. issued a press release announcing financial results for the three month and six month periods ended June 30, 2019. A copy of the press release is attached hereto as Exhibit 99 and is incorporated herein by this reference.

The information contained or incorporated by reference in this current report on Form 8-K may contain forward-looking statements, including certain plans, expectations, goals, and projections, which are subject to numerous assumptions, risks, and uncertainties. Actual results could differ materially from those contained or implied by such statements for a variety of factors, including: changes in economic conditions; movements in interest rates; competitive pressures on product pricing and services; success and timing of business strategies; the nature, extent, and timing of governmental actions and reforms; and extended disruption of vital infrastructure. All forward-looking statements included in this current report on Form 8-K are based on information available at the time of the report. Middlefield Banc Corp. assumes no obligation to update any forward-looking statement.

 

ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS

 

  (c)

Exhibits.

The following exhibits are furnished herewith:

EXHIBITS

99 July 19, 2019 press release of Middlefield Banc Corp.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    MIDDLEFIELD BANC CORP.
Date: July 19, 2019    

/s/ James R. Heslop, II                     ,

    Executive Vice President and COO
(Back To Top)

Section 2: EX-99 (EX-99)

EX-99

Exhibit 99

 

LOGO

15985 East High Street

P. O. Box 35

Middlefield, Ohio 44062

Phone: 440/632-1666    FAX: 440/632-1700    

www.middlefieldbank.bank

 

PRESS RELEASE

 

Company Contact:    Investor and Media Contact:

Thomas G. Caldwell

President/Chief Executive Officer

Middlefield Banc Corp.

(440) 632-1666 Ext. 3200

[email protected]

  

Andrew M. Berger

Managing Director

SM Berger & Company, Inc.

(216) 464-6400

[email protected]

Middlefield Banc Corp. Reports 2019 First Half Financial Results

MIDDLEFIELD, OHIO, July 19, 2019 ◆◆◆◆ Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the 2019 first half and second quarter ended June 30, 2019.

2019 First Half Financial Highlights versus 2018 First Half (unless noted):

 

   

Net income increased 10.5% to $6.3 million

 

   

Earnings per diluted share increased 9.7% to $1.93 per share

 

   

Return on average equity increased 16 basis points to 9.58%

 

   

Return on average tangible common equity(1) was 11.02%, in line with the prior year

 

   

Book value per share was up 9.1% to $41.41 per share

 

   

Tangible book value(1) per share was up 11.0% to $36.07 per share

 

   

Total loans increased 5.8% to $998.2 million

 

   

Total interest income improved 13.2% to $27.2 million

“Our second quarter financial results demonstrate the strength of our financial model as earnings per diluted share increased 5.2% from the same period a year ago to a second quarter record of $1.01 per diluted share, while our year-to-date tangible book value increased 11.0% to a record $36.07 per share,” stated Thomas G. Caldwell, President and Chief Executive Officer. “This is the first quarter in 12 quarters where our total loan portfolio contracted. While the local economies in our Central and Northeast Ohio markets remain stable, we believe businesses and consumers have become more cautious resulting in slower investments and a reduction in borrowings. We continue to focus on proactively managing risk, growing market share, and driving improvements in profitability and our second quarter and first half financial results reflect the continued successful execution of our profit focused strategic plan.”

“In addition, I am pleased with the progress we are making to diversify our income streams and grow noninterest income. Noninterest income increased 32.6% for the six months ended June 30, 2019, compared with the same period last year. We expect further improvements in noninterest income throughout the year as additional strategies are implemented.”


Income Statement

For the 2019 first half, net interest income increased 4.0% to $20.5 million, compared to $19.7 million for the same period last year. Year-to-date, the net interest margin was 3.67%, compared to 3.78% for the same period last year. Net interest income for the 2019 second quarter was $10.3 million, compared to $9.8 million for the 2018 second quarter. The 4.8% increase in net interest income for the 2019 second quarter was largely a result of a 13.5% increase in interest and fees on loans due to both an increase in the average balance of loans and an increase in the yield on loans. The net interest margin for the 2019 second quarter was 3.65%, compared to 3.74% for the same period of 2018.

For the 2019 first half, noninterest income was $2.4 million, compared to $1.8 million for the same period last year. Noninterest income for the 2019 second quarter was $1.3 million, compared to $1.0 million for the same period last year.

For the 2019 first half, noninterest expense increased 4.0% to $15.0 million, compared to $14.4 million for the same period last year. Operating costs in the 2019 second quarter increased 5.9% to $7.5 million from $7.1 million for the 2018 second quarter.

“Low quarterly charge-offs demonstrates continued strength in asset quality as a result of conservative underwriting and pricing standards, balanced portfolio composition, and stable economic trends in both of our Ohio markets,” said Donald L. Stacy, Chief Financial Officer. “While we have seen competition increase for both loans and deposits, we remain focused on managing risk and pricing on loans, while prudently managing our funding costs on deposits. Our loans to deposits ratio was 94.9% at June 30, 2019, compared to a 101.2% June 30, 2018, while our equity to assets increased 14 basis points over the past three months to 10.42%. Our strong asset quality, ample liquidity, and compelling capitalization provides us with the flexibility to pursue our growth opportunities, while supporting our business through various economic cycles.”

Balance Sheet

Total assets at June 30, 2019, increased 10.5% to approximately $1.29 billion from $1.17 billion at June 30, 2018.

Net loans at June 30, 2019, were $990.9 million, compared to $936.2 million at June 30, 2018, and $984.7 million at December 31, 2018. The 5.8% year-over-year improvement in net loans was primarily a result of an 8.6% increase in commercial mortgage loans, a 7.8% increase in residential mortgage loans, a 19.7% increase in real estate construction loans, partially offset by a 12.0% decline in consumer installment loans and a 16.1% decline in commercial and industrial loans.

Total deposits at June 30, 2019, was $1.05 billion, compared to $932.2 million at June 30, 2018. The 12.8% increase in deposits was a result of higher money market and time deposits, offset by lower noninterest-bearing demand deposits. The investment portfolio, which is entirely classified as available for sale, was $98.8 million June 30, 2019, compared with $100.0 million at June 30, 2018.

Stockholders’ Equity and Dividends

At the end of the 2019 second quarter, shareholders’ equity increased 9.4% to $134.3 million compared to $122.7 million at June 30, 2018. On a per share basis, shareholders’ equity at June 30, 2019, was $41.41 compared to $37.95 at the same period last year. Tangible stockholders’ equity(1) increased 11.3% to $117.0 million for the 2019 second quarter, compared to $105.1 million at June 30, 2018. On a per-share basis, tangible stockholders’ equity(1) was $36.07 at June 30, 2019, compared to $32.49 at June 30, 2018.


Through the first six months of 2019, the company declared cash dividends of $0.56 per share, compared to $0.61 per share for the same period last year. The dividend payout ratio for the 2019 six-month period was 28.9% compared to 34.5% for the same period last year.

At June 30, 2019, the company had an equity to assets leverage ratio of 10.42%, compared to 10.52% at June 30, 2018.

Asset Quality    

The provision for loan losses for the 2019 second quarter was $110,000 versus $210,000 for the same period last year. Nonperforming assets at June 30, 2019, were $10.8 million, compared to $8.6 million at June 30, 2018. Net charge-offs for the 2019 second quarter were $12,000, or 0.00% of average loans, annualized, compared to $259,000, or 0.11% of average loans, annualized at June 30, 2018.

Underwriting standards are being maintained in the face of competitive pressures and potential problem credits are being proactively addressed resulting in some exits that has enhanced the overall health of the loan portfolio.

Year-to-date net charge-offs were $474,000, or 0.10% of average loans, annualized compared to $108,000, or 0.02% of average loans, annualized for the same period last year. The allowance for loan losses at June 30, 2019, stood at $7.3 million, or 0.73% of total loans, compared to $7.5 million or 0.79% of total loans at June 30, 2018.

Middlefield Banc Corp., headquartered in Middlefield, Ohio, is the bank holding company of The Middlefield Banking Company with total assets of $1.29 billion at June 30, 2019. The bank operates 15 full-service banking centers and an LPL Financial® brokerage office serving Beachwood, Chardon, Cortland, Dublin, Garrettsville, Mantua, Middlefield, Newbury, Orwell, 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)This press release includes disclosure of Middlefield Banc Corp.’s tangible book value per share and return on average tangible equity, 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.

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)

 

     June 30,     March 31,     December 31,     September 30,     June 30,  

Balance Sheets (period end)

   2019     2019     2018     2018     2018  

ASSETS

          

Cash and due from banks

   $ 133,372     $ 121,045     $ 107,933     $ 81,951     $ 42,451  

Federal funds sold

     2,010       —         —         —         28,795  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents

     135,382       121,045       107,933       81,951       71,246  

Equity securities, at fair value

     660       674       616       671       656  

Investment securities available for sale, at fair value

     98,809       98,114       98,322       99,717       100,028  

Loans held for sale

     431       1,230       597       925       1,132  

Loans

     998,232       1,004,484       992,109       972,968       943,674  

Less allowance for loan and lease losses

     7,304       7,206       7,428       7,494       7,502  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loans

     990,928       997,278       984,681       965,474       936,172  

Premises and equipment, net

     16,788       15,741       13,003       13,002       12,978  

Goodwill

     15,071       15,071       15,071       15,071       15,071  

Core deposit intangibles

     2,227       2,312       2,397       2,484       2,571  

Bank-owned life insurance

     16,294       16,185       16,080       15,970       15,862  

Accrued interest receivable and other assets

     11,832       13,285       9,698       11,063       10,363  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

   $ 1,288,422     $ 1,280,935     $ 1,248,398     $ 1,206,328     $ 1,166,079  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     June 30,     March 31,     December 31,     September 30,     June 30,  
     2019     2019     2018     2018     2018  

LIABILITIES

          

Deposits:

          

Noninterest-bearing demand

   $ 198,817     $ 194,298     $ 203,410     $ 202,580     $ 205,192  

Interest-bearing demand

     94,266       107,246       92,104       99,342       94,715  

Money market

     152,885       178,668       196,685       191,261       137,572  

Savings

     194,505       184,662       222,954       224,704       204,408  

Time

     411,034       375,357       300,914       295,874       290,359  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

     1,051,507       1,040,231       1,016,067       1,013,761       932,246  

Short-term borrowings

     85,000       91,000       90,398       55,304       87,833  

Other borrowings

     12,449       11,518       8,803       8,956       18,996  

Accrued interest payable and other liabilities

     5,206       6,487       4,840       4,074       4,288  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES

     1,154,162       1,149,236       1,120,108       1,082,095       1,043,363  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

STOCKHOLDERS’ EQUITY

          

Common stock, no par value; 10,000,000 shares authorized, 3,646,497 shares issued, 3,242,585 shares outstanding as of June 30, 2019

     86,590       86,437       85,925       85,687       85,544  

Retained earnings

     60,517       58,139       56,037       53,520       51,121  

Accumulated other comprehensive income (loss)

     1,377       641       (154     (1,456     (431

Treasury stock, at cost; 403,912 shares as of June 30, 2019

     (14,224     (13,518     (13,518     (13,518     (13,518
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL STOCKHOLDERS’ EQUITY

     134,260       131,699       128,290       124,233       122,716  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 1,288,422     $ 1,280,935     $ 1,248,398     $ 1,206,328     $ 1,166,079  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


MIDDLEFIELD BANC CORP.

Consolidated Selected Financial Highlights

(Dollar amounts in thousands)

 

     For the Three Months Ended      For the Six Months Ended  
     June 30,     March 31,      December 31,     September 30,      June 30,      June 30,      June 30,  

Statements of Income

   2019     2019      2018     2018      2018      2019      2018  

INTEREST AND DIVIDEND INCOME

                  

Interest and fees on loans

   $ 12,706     $ 12,488      $ 12,467     $ 11,821      $ 11,197      $ 25,194      $ 22,251  

Interest-earning deposits in other institutions

     169       187        146       178        115        356        234  

Federal funds sold

     25       7        17       8        7        32        21  

Investment securities:

                  

Taxable interest

     214       179        182       167        170        393        339  

Tax-exempt interest

     553       565        589       598        550        1,118        1,075  

Dividends on stock

     53       58        58       57        53        111        112  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total interest and dividend income

     13,720       13,484        13,459       12,829        12,092        27,204        24,032  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

INTEREST EXPENSE

                  

Deposits

     3,277       2,945        2,828       2,178        1,979        6,222        3,619  

Short-term borrowings

     79       213        78       296        192        292        468  

Other borrowings

     95       96        92       104        118        191        240  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total interest expense

     3,451       3,254        2,998       2,578        2,289        6,705        4,327  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

NET INTEREST INCOME

     10,269       10,230        10,461       10,251        9,803        20,499        19,705  

Provision for loan losses

     110       240        210       210        210        350        420  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

     10,159       9,990        10,251       10,041        9,593        20,149        19,285  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

NONINTEREST INCOME

                  

Service charges on deposit accounts

     530       508        498       491        472        1,038        925  

Investment securities gains on sale, net

     190       —          —         —          —          190        —    

Gain (loss) on equity securities

     (14     58        (55     15        13        44        31  

Earnings on bank-owned life insurance

     109       105        110       108        98        214        210  

Gains on sale of loans

     98       59        67       43        154        157        158  

Other income

     386       402        357       291        311        788        510  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total noninterest income

     1,299       1,132        977       948        1,048        2,431        1,834  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

NONINTEREST EXPENSE

                  

Salaries and employee benefits

     4,078       4,124        4,065       3,839        3,866        8,202        7,845  

Occupancy expense

     496       553        465       460        472        1,049        1,008  

Equipment expense

     291       235        273       262        201        526        434  

Data processing costs

     549       465        446       481        402        1,014        879  

Ohio state franchise tax

     261       259        220       244        244        520        359  

Federal deposit insurance expense

     100       130        100       150        150        230        300  

Professional fees

     403       431        364       346        327        834        772  

Advertising expense

     200       203        227       236        230        403        458  

Software amortization expense

     152       145        145       155        155        297        305  

Core deposit intangible amortization

     85       85        87       87        87        170        178  

Other expense

     867       870        851       832        929        1,737        1,870  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Total noninterest expense

     7,482       7,500        7,243       7,092        7,063        14,982        14,408  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Income before income taxes

     3,976       3,622        3,985       3,897        3,578        7,598        6,711  

Income taxes

     686       611        560       593        481        1,297        1,009  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

NET INCOME

   $ 3,290     $ 3,011      $ 3,425     $ 3,304      $ 3,097      $ 6,301      $ 5,702  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 


MIDDLEFIELD BANC CORP.

Consolidated Selected Financial Highlights

(Dollar amounts in thousands, except per share and share amounts)

 

    For the Three Months Ended     For the Six Months Ended  
    June 30,     March 31,     December 31,     September 30,     June 30,     June 30,     June 30,  

Per common share data

  2019     2019     2018     2018     2018     2019     2018  

Net income per common share - basic

  $ 1.01     $ 0.93     $ 1.06     $ 1.02     $ 0.96     $ 1.94     $ 1.77  

Net income per common share - diluted

  $ 1.01     $ 0.92     $ 1.05     $ 1.02     $ 0.96     $ 1.93     $ 1.76  

Dividends declared per share

  $ 0.28     $ 0.28     $ 0.28     $ 0.28     $ 0.28     $ 0.56     $ 0.61  

Book value per share (period end)

  $ 41.41     $ 40.44     $ 39.54     $ 38.38     $ 37.95     $ 41.41     $ 37.95  

Tangible book value per share (period end) (2) (3)

  $ 36.07     $ 35.11     $ 34.16     $ 32.96     $ 32.49     $ 36.07     $ 32.49  

Dividends declared

  $ 912     $ 909     $ 908     $ 905     $ 903     $ 1,821     $ 1,966  

Dividend yield

    2.74     2.76     2.62     2.36     2.21     2.75     2.43

Dividend payout ratio

    27.72     30.19     26.51     27.39     29.16     28.90     34.48

Average shares outstanding - basic

    3,251,254       3,249,139       3,239,180       3,234,393       3,225,726       3,250,203       3,223,009  

Average shares outstanding -diluted

    3,257,473       3,255,284       3,250,149       3,248,326       3,240,329       3,256,525       3,238,236  

Period ending shares outstanding

    3,242,585       3,256,370       3,244,332       3,236,689       3,233,678       3,242,585       3,233,678  

Selected ratios

                                         

Return on average assets

    1.09     1.01     1.15     1.13     1.11     1.05     1.03

Return on average equity

    9.79     9.36     10.52     10.33     10.08     9.58     9.42

Return on average tangible common equity (2) (4)

    11.23     10.80     12.17     12.00     11.77     11.02     11.02

Efficiency (1)

    63.03     64.30     61.60     61.65     63.43     63.66     65.20

Equity to assets at period end

    10.42     10.28     10.28     10.30     10.52     10.42     10.52

Noninterest expense to average assets

    0.62     0.62     0.62     0.61     0.63     1.24     1.29

 

(1)

The efficiency ratio is calculated by dividing non-interest expense less amortization of intangibles by the sum of net interest income on a fully taxable equivalent basis plus non-interest income.

(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

 

     For the Three Months Ended     For the Six Months Ended  
     June 30,     March 31,     December 31,     September 30,     June 30,     June 30,     June 30,  

Yields

   2019     2019     2018     2018     2018     2019     2018  

Interest-earning assets:

              

Loans receivable (2)

     5.08     5.07     5.09     4.89     4.82     5.07     4.82

Investment securities (2)

     3.79     3.80     3.73     3.67     3.68     3.80     3.64

Interest-earning deposits with other banks

     2.21     2.26     2.08     1.95     1.72     2.24     1.78

Total interest-earning assets

     4.86     4.85     4.82     4.65     4.60     4.85     4.60

Deposits:

              

Interest-bearing demand deposits

     0.36     0.30     0.31     0.30     0.30     0.33     0.28

Money market deposits

     1.40     1.58     1.56     0.99     0.88     1.50     0.85

Savings deposits

     0.69     0.81     0.85     0.68     0.57     0.75     0.54

Certificates of deposit

     2.35     2.15     1.99     1.84     1.79     2.27     1.72

Total interest-bearing deposits

     1.56     1.46     1.38     1.14     1.07     1.51     1.01

Non-Deposit Funding:

              

Borrowings

     2.70     2.57     3.54     2.30     2.59     2.57     1.97

Total interest-bearing liabilities

     1.59     1.52     1.43     1.23     1.16     1.56     1.09

Cost of deposits

     1.26     1.17     1.09     0.89     0.84     1.22     0.79

Cost of funds (3)

     1.29     1.24     1.14     0.98     0.92     1.27     0.88

Net interest margin (1)

     3.65     3.70     3.76     3.72     3.74     3.67     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%.

(3)

Includes non-interest bearing funding sources in the denominator.


MIDDLEFIELD BANC CORP.

Consolidated Selected Financial Highlights

(Dollar amounts in thousands, except per share and share amounts)

 

     For the Three Months Ended  
     June 30,     March 31,     December 31,     September 30,     June 30,  

End of Period Loan Balances

   2019     2019     2018     2018     2018  
(Dollar amounts in thousands)                               

Commercial and industrial

   $ 85,520     $ 85,756     $ 83,857     $ 93,144     $ 101,975  

Real estate - construction

     54,619       58,019       56,731       48,901       45,647  

Real estate - mortgage:

          

Residential

     345,830       340,483       336,487       329,609       320,858  

Commercial

     496,300       504,289       498,247       483,675       457,050  

Consumer installment

     15,963       15,937       16,787       17,639       18,144  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 998,232     $ 1,004,484     $ 992,109     $ 972,968     $ 943,674  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     June 30,     March 31,     December 31,     September 30,     June 30,  

Asset quality data

   2019     2019     2018     2018     2018  
(Dollar amounts in thousands)                               

Non-accrual loans

   $ 10,671     $ 10,472     $ 6,595     $ 7,288     $ 8,357  

90 day past due and accruing

     58       —         945       —         15  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-performing loans (4)

     10,729       10,472       7,540       7,288       8,372  

Other real estate owned

     89       126       270       257       181  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-performing assets

   $ 10,818     $ 10,598     $ 7,810     $ 7,545     $ 8,553  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allowance for loan losses

   $ 7,304     $ 7,206     $ 7,428     $ 7,494     $ 7,502  

Allowance for loan losses/total loans

     0.73     0.72     0.75     0.77     0.79

Net charge-offs:

          

Quarter-to-date

   $ 12     $ 462     $ 276     $ 218     $ 259  

Year-to-date

     474       462       602       326       108  

Net charge-offs to average loans, annualized:

          

Quarter-to-date

     0.00     0.19     0.11     0.09     0.11

Year-to-date

     0.10     0.19     0.06     0.05     0.02

Nonperforming loans/total loans

     1.07     1.04     0.76     0.75     0.89

Allowance for loan losses/nonperforming loans

     68.08     68.81     98.51     102.83     89.61

Nonperforming assets/total assets

     0.84     0.83     0.63     0.63     0.73

 

(4)

Non-performing 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     For the Six Months Ended  
(Dollar amounts in thousands)   June 30,     March 31,     December 31,     September 30,     June 30,     June 30,     June 30,  
    2019     2019     2018     2018     2018     2019     2018  

Stockholders’ Equity

  $ 134,260     $ 131,699     $ 128,290     $ 124,233     $ 122,716     $ 134,260     $ 122,716  

Less Goodwill and other intangibles

    17,298       17,383       17,468       17,555       17,642       17,298       17,642  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible Common Equity

  $ 116,962     $ 114,316     $ 110,822     $ 106,678     $ 105,074     $ 116,962     $ 105,074  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Shares outstanding

    3,242,585       3,256,370       3,244,332       3,236,689       3,233,678       3,242,585       3,233,678  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible book value per share

  $ 36.07     $ 35.11     $ 34.16     $ 32.96     $ 32.49     $ 36.07     $ 32.49  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of Average Equity to
Return on Average Tangible Common Equity

  For the Three Months Ended     For the Six Months Ended  
    June 30,     March 31,     December 31,     September 30,     June 30,     June 30,     June 30,  
    2019     2019     2018     2018     2018     2019     2018  

Average Stockholders’ Equity

  $ 134,836     $ 130,450     $ 129,208     $ 126,865     $ 123,228     $ 132,643     $ 122,115  

Less Average Goodwill and other intangibles

    17,339       17,422       17,510       17,597       17,683       17,381       17,728  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average Tangible Common Equity

  $ 117,497     $ 113,028     $ 111,698     $ 109,268     $ 105,545     $ 115,262     $ 104,387  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

  $ 3,290       3,011       3,425       3,304       3,097       6,301       5,702  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Return on average tangible common equity (annualized)

    11.23     10.80     12.17     12.00     11.77     11.02     11.02
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
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