 Thomas G. Caldwell
President and CEO
Donald L. Stacy
Treasurer and CFO
Middlefield Banc Corp.
Investor Presentation
April 2015
Exhibit 99.1 |
 Forward Looking Statements
This presentation contains forward-looking statements within the
meaning of the Securities Exchange Act of 1934 and the Private
Securities Litigation Reform Act of 1995 concerning Middlefield
Banc Corp.’s plans, strategies, objectives, expectations, intentions,
financial condition and results of operations. These
forward-looking statements reflect management’s current
views and intentions and are subject to known and unknown risks,
uncertainties, assumptions and other factors that could cause the
actual results to differ materially from those contemplated by
the statements. The significant risks and uncertainties
related to Middlefield Banc Corp. of which management is aware are
discussed in detail in the periodic reports that Middlefield Banc Corp.
files with the Securities
and
Exchange
Commission
(the
“SEC”),
including
in
the
“Risk
Factors”
section
of its Annual Report on Form 10-K and its Quarterly Report on Form
10-Q. Investors are urged to review Middlefield Banc
Corp.’s periodic reports, which are available at no
charge
through
the
SEC’s
website
at
www.sec.gov
and
through
Middlefield
Banc
Corp.’s
website
at
www.middlefieldbank.com
on
the
“Investor
Relations”
page.
Middlefield
Banc
Corp.
assumes
no
obligation
to
update
any
of
these
forward-looking
statements
to
reflect
a
change
in
its
views
or
events
or
circumstances
that
occur
after
the
date
of
this
presentation.
2 |
 Middlefield Banc Corp.
Company Snapshot
(1)(2)
NASDAQ:
MBCN
Stock Price:
$31.71
Market Cap:
$65.1 million
Dividend (yield):
$1.04 (3.3%)
Headquarters:
Middlefield, Ohio
Established:
Bank 1901/HC 1988
Branches:
10
Total Assets:
$699.9 million
Net Loans
$469.4 million
Total Deposits:
$617.1 million
(1)
Stock price, market cap and dividend yield as of April 22, 2015
(2)
Financial figures for the period ended March 31, 2015
For over 100 years, Middlefield Banc
Corp. has supported its communities
by offering customers superior
financial products, exceptional
service, and modern banking
amenities
3 |
 Rankings and Awards
4
Sources:
(1)
KBW April 13, 2015
http://www.kbw.com/content/the-firm-PDFs/press-releases/KBW-2015-Bank-Honor-Roll-04.13.15.pdf
(2) SNL June 16, 2014
Disproving the naysayers, some banks under $1B thrive
By Kiah Lau Haslett and Marshall Schraibman
(3) Independent Banker
http://independentbanker.org/2014/05/community-banks-with-assets-of-more-than-500-million-to-1-billion/
SNL Financial
(2)
According to a June 16, 2014 article from SNL Financial, Middlefield
Banc Corp. had the 10
th
highest ROAE out of public community banks with under $1 billion in
assets. KBW
(1)
On April 13, 2015, Middlefield was named one of 25 U.S. banking
institutions to KBW’s coveted “Bank Honor
Roll” of superior performers. Honor Roll members are
publicly traded banking
institutions
with
more
than
$500
million
in
total
assets
that
have
not
reported
an
annual
loss over the past 10 years, had 2014 annual EPS equal to or greater
than peak EPS over the past 10 years, and consecutive increases
in EPS since 2009. Independent Banker
(3)
According to May 30, 2014 study from Independent Banker, Middlefield
Banc Corp. had the 21
st
highest ROE of community banks with assets of $500 million to $1
billion |
 Ended 2014 with record net loans
outstanding, net income, and stockholders’
equity
Profitable throughout the economic cycle and
never reported a quarterly loss
History of quarterly cash dividend payments,
and maintained dividend amount during
recession
Excellent asset quality, strong liquidity
profile, and robust core deposit base
Strong returns and efficiency ratios
Two strong Ohio banking markets
5
Growing Banking Franchise
Total Assets
$-
$100
$200
$300
$400
$500
$600
$700
$800 |
 Middlefield Overview
6
Middlefield Banc Corp. is a community banking leader with
strong brand recognition in its markets
Favorable distribution network: 10 branches in five counties,
serving two distinct Ohio market areas
Northeastern Ohio market consists principally of:
–
Geauga County
–
Trumbull County
–
Ashtabula County
–
Portage County
Two central Ohio branches are located in Dublin and Westerville
in Franklin County, north of Columbus.
Cleveland MSA and Columbus MSA have a combined population of more than
4.0 million people
Opportunities to “fill in”
gap between two operating geographies
According to FDIC statistics, Ohio insured financial institutions have
declined 30% from 304 institutions at the end of 2003 to 212 at
the end of 2014 In
terms
of
deposits,
out
of
212
banks
in
the
State
of
Ohio,
Middlefield
was
the
30
th
largest
bank in the state at December 31, 2014 |
 Middlefield Serves Two Distinct Ohio Markets with Strong Demographics
Northeast Ohio
Northern Columbus
8 banking locations
Geauga
County
is
3
rd
in
median
household
income
(1)
out
of
88
Ohio
counties
Geauga
County
is
the
center
of
the
4
th
largest Amish population in the world
–
This demographic provides a strong
borrowing and stable deposit base
Improvements in manufacturing
Combined unemployment rate in all four
counties in 2014 was 5.2%
2 banking locations
Columbus is the state capital and largest
city in Ohio
Franklin
County
is
2
nd
in
population
in
Ohio with an unemployment rate of 3.6%
in 2014
Delaware County, immediately north of
Franklin,
has
the
2
nd
highest
median
household income in Ohio
At June 30, 2014, 5 of the 34 banks in
Franklin County controlled 85% of total
deposits.
8 of the bank's 10 branches (and nearly 85% of deposits) are located in
counties that have stronger demographics than the State average
median household income, median value, value of
owner-occupied housing, and employment rates 7
(1) According to:
www.usa.com/rank/ohio-state--median-household-income--county-rank.htm?hl=Geauga&hlst=OH&yr=6000
|
 Corporate Infrastructure and Experienced Management to Support Growth
Middlefield’s success is driven by a strong leadership team
dedicated to creating value for shareholders, while providing the
highest quality financial products and services within the
communities the Company serves
Experienced Management
2014 Investments
Average tenure of 8 executive officers:
–
At MBCN is over 14 years
–
Within industry is over 25 years
Thomas Caldwell, CEO, serves on the
Federal Delegate Board of the
Independent Community Bankers of
America, having been elected in June
2010. Mr. Caldwell previously served as
Chairman of the Community Bankers
Association of Ohio.
Sales-orientation culture
Community focused culture
Launched secondary mortgage
capabilities in 2014 fourth quarter
Focused on expanding technology
–
Launched new website
–
Enhanced on-line banking
–
Developed mobile banking
capabilities
Hired Chief Information Officer and
Chief Credit Officer
Centralized operations center to a new
20,000 sq. foot facility
8 |
 9
Personal Banking
Personal Banking
Products and Services
Strong brand recognition in core markets
–
#1 Market Share in Geauga County
–
#6 Market Share in Portage County
–
#3 overall within the primary
northeastern Ohio market
Focused on growth
–
Improved on-line banking offerings
–
Residential mortgage products
–
De novo expansion and strategic
acquisitions
Customers trust Middlefield Banc Corp. to be there for them in
day-to-day money management as well as for those milestone
events in their financial lives |
 10
Market Share
Ashtabula, Geauga, Portage & Trumbull Counties
June 30, 2014
Rank
Institution
Branches
Deposits in
Market ($000)
Market
Share
1
Huntington National Bank
38
1,532,821
20.60
2
JP Morgan Chase
19
894,279
12.02
4
KeyBank
15
522,389
7.02
5
PNC Bank
11
506,911
6.81
6
Talmer Bank and Trust
9
464,660
6.24
7
Cortland Savings & Banking
10
385,484
5.18
8
First Merit Bank
12
347,397
4.67
Total for institutions in market
190
7,441,520
Franklin County
June 30, 2014
Rank
Institution
Branches
Deposits in
Market ($000)
Market
Share
1
Huntington National Bank
68
14,035,079
31.14
2
JP Morgan Chase
53
10,503,465
23.30
3
PNC Bank
42
5,130,794
11.38
4
Nationwide Bank
2
4,415,679
9.80
5
Fifth Third Bank
47
4,145,568
9.20
26
Vinton County National Bank
1
57,354
0.13
27
First City Bank
1
44,764
0.10
Total for institutions in market
344
45,074,325
Strong Market Share in
Northeastern Ohio Market
Opportunities To Increase
Market Share in Central Ohio
Source: FDIC
3
The Middlefield Banking Co.
8
528,765
7.11
25
The Middlefield Banking Co.
2
61,079
0.14 |
 11
Commercial Banking
(1)
Commercial Banking
Products and Services
$214.6 million in commercial loans at
March 31, 2015
Enhanced commercial banking leadership
team in 2014 by adding:
Chief Credit Officer
SVP –
Commercial Lending
Expertise in niche commercial loan
products
Growth objectives include:
Branch expansions
Selective acquisitions
Increase market share
For over 100 years, Middlefield Banc Corp. has been helping businesses
grow (2) Dollars in millions
(1) Commercial loans include commercial and industrial, and commercial
real estate. $-
$50
$100
$150
$200
$250
2014
2013
2012
2011
2010
2009
Annual Commercial Loan Growth
(2) |
 History of Strong Financial Results
ROAA:
0.36%
0.41%
0.65%
0.95%
1.06%
1.07%
ROAE:
4.90%
6.44%
10.24%
11.98%
13.17%
12.17%
Return on Average Assets
Return on Average Equity
Managed cost of funding to increase net
interest margin
Anticipate continued pressure on margin
levels due to:
Higher regulatory costs
Continued low rate environment
Investments to support growth
Opportunities to offset margin pressures and
increase profitability by improvements in
fee based income
Three Months Ended
March 31,
2015
2014
ROAA
(1)
0.96%
1.08%
ROAE
(1)
10.23%
13.10%
(1)
Annualized
Annual Return on Average Assets and Equity
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
2014
2013
2012
2011
2010
2009
12 |
 2015 First Quarter Highlights
Net interest income increased 3.3% to $6.2 million.
Noninterest income grew 11.3% to $0.8 million.
Noninterest expense 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 profitability was impacted by selectively adding staff to improve
capabilities and increases to the advertising budget to support
growth objectives. Middlefield was able to partially offset the
impact of the 13.8% increase in noninterest expense through higher levels
of both interest and noninterest income, and reducing interest
expenses by 14.5%. 13
Net Income
Total Noninterest Income
Net Interest Income
(1) Dollars in thousands
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
2015 Q1
2014 Q4
2014 Q3
2014 Q2
2014 Q1
Quarterly Income
(1)
2015 first quarter highlights include:
(on a year-over-year basis unless noted)
|
 Stable and Growing Loan Portfolio
Net loans to total deposits of 76.1% at
March 31, 2015
Net loans at March 31, 2015 were $469.4
million, up from $436.7 million in the
same period last year
Loan policy goal is to achieve a
composition mix of:
40 –
50% residential real estate loans
35 –
45% commercial loans
5 –
15% consumer loans
5% credit card accounts
Adding secondary mortgage market will
enhance residential product
Especially in Columbus market
No national or sub-prime lending
Lending within market area
Participation loans with banks that have
similar credit quality standards and
cultures
Loan Portfolio at March 31, 2015
14
(1) Dollars in millions |
 Excellent Asset Quality and Capital Levels
Dollars in thousands
3/31/2015
12/31/2014
3/31/2014
12/31/2013
12/31/2012
Nonperforming Loans
$8,262
$9,048
$10,741
$12,290
$14,224
Real Estate Owned
2,203
2,590
2,656
2,698
1,846
Nonperforming Assets (NPAs)
10,465
11,638
13,397
14,988
16,070
Allowance for Loan Losses
6,447
6,846
7,015
7,046
7,779
Ratios:
Nonperforming Loans/
Total Loans (%)
1.74%
1.92%
2.42%
2.82%
3.48%
NPAs/Total Assets (%)
1.50%
1.72%
2.00%
2.32%
2.40%
Allowance/Total Loans (%)
1.35%
1.45%
1.58%
1.62%
1.90%
Allowance/Nonperforming
Loans (%)
78.03%
75.66%
65.31%
57.33%
54.69%
Net Charge-off Ratio –
Annualized (%)
0.43%
0.38%
0.19%
0.19%
0.30%
Tier 1 Capital Ratio
(to Average Assets)
9.69%
9.60%
9.15%
9.04%
7.90%
Strong reserve coverage provides flexibility in managing potential losses
with reduced impact on net income
15
Problem assets peaked in 2011,
primarily driven by non-owner
occupied 1 -
4 family in Central
Ohio market
Net charge-offs returned to
normalized levels in 2012
–
Peaked in 2011 with $2.5
million
2015 first quarter Nonperforming
assets lowest since 2008. |
 Annual Financial Summary
Dollars in thousands
2009
2010
2011
2012
2013
2014
Net interest income
14,268
18,149
21,075
22,299
22,928
23,804
Provision for loan losses
2,578
3,580
3,085
2,168
196
370
Noninterest income
2,668
2,623
2,237
3,451
3,145
3,588
Noninterest expense
12,650
14,763
15,501
15,639
16,870
17,850
Income before income taxes
1,708
2,429
4,726
7,943
9,007
9,172
Income taxes
(73)
(88)
596
1,662
1,979
1,992
Net income
1,781
2,517
4,130
6,281
7,028
7,180
Net interest margin
3.30%
3.41%
3.65%
3.74%
3.85%
3.93%
Total assets
558,658
632,197
654,551
670,288
647,090
677,531
Loans outstanding, net
348,660
366,277
395,061
400,654
428,679
463,738
Deposits
487,106
565,251
580,962
593,335
568,836
586,112
Equity capital
36,707
38,022
47,253
55,437
53,473
63,867
Earnings per share
1.15
1.60
2.45
3.29
3.48
3.52
Cash dividend (per share)
1.04
1.04
1.04
1.04
1.04
1.04
Dividend pay-out ratio
90.28%
65.04%
42.71%
31.87%
29.84%
29.54%
Return on average assets
0.36%
0.41%
0.65%
0.95%
1.06%
1.07%
Return on average equity
4.90%
6.44%
10.24%
11.98%
13.17%
12.17%
16 |