EX-99 2 d12762dex99.htm 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

tcaldwell@middlefieldbank.com

   

Andrew M. Berger

Managing Director

SM Berger & Company, Inc.

(216) 464-6400

andrew@smberger.com

   

Middlefield Banc Corp. Reports 2020 Full Year Financial Results

MIDDLEFIELD, OHIO, January 26, 2021 • • • • Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the three and twelve months ended December 31, 2020.

2020 Financial Highlights (on a year-over-year basis unless noted):

 

  •  

Net income decreased 34.3% to $8.3 million, as a result of a $9.0 million annual increase in the provision for loan losses

 

  •  

Net interest income improved 4.8% to $43.4 million

 

  •  

Total noninterest income was up 23.7% to $6.0 million

 

  •  

Noninterest expense declined 0.8%

 

  •  

Pre-tax, pre-provision for loan losses(1) income increased 21.0% to $19.6 million

 

  •  

Allowance for loan losses increased 98.9% to $13.5 million

 

  •  

Allowance for loan losses to nonperforming loans was 171.3%, compared to 76.2%

 

  •  

Book value per share was up 5.1% to a record $22.54 per share

 

  •  

Tangible book value(1) per share was up 6.0% to a record $19.91 per share

 

  •  

Total loans increased 12.2% to $1.10 billion

 

  •  

Middlefield remains well capitalized with an equity to assets ratio of 10.3% at December 31, 2020

Thomas G. Caldwell, President and Chief Executive Officer, stated: “Our strong asset quality, our focus on supporting our local communities, and the commitment and dedication of our team members helped us successfully navigate the unprecedented effects of the COVID-19 pandemic. Despite significant operating and economic challenges, pre-tax, pre-provision for loan losses(1) income increased 21.0% year-over-year, reflecting strong core earnings growth, higher noninterest income, and proactive expense management. In addition, we ended the year with record assets and a record book value per share, representing the seventh consecutive year of annual growth in book value.”

“Unfortunately, the COVID-19 pandemic continues to have a severe impact on the economy. As a result, we are focused on supporting our communities, proactively controlling asset quality, and strengthening our balance sheet. I believe this conservative approach will allow us to continue to successfully navigate near-term economic uncertainty, while providing the Company with flexibility to pursue long-term growth opportunities.”

“On behalf of Middlefield’s leadership team and Board of Directors, I would like to thank our customers, employees, communities, and shareholders for their support throughout this challenging period,” concluded Mr. Caldwell.

Income Statement

For the 2020 full year, net interest income increased 4.8% to $43.4 million, compared to $41.4 million for the same period last year. The net interest margin for the 2020 twelve-month period was 3.54%, compared to 3.68% for the same period last year. Net interest income for the 2020 fourth quarter was $11.3 million, compared to $10.3 million for the 2019 fourth quarter. The 9.3% increase in net interest income for the 2020 fourth quarter was largely a result of a 45.8% decrease in total interest expense. The net interest margin for the 2020 fourth quarter was 3.49%, compared to 3.65% for the same period of 2019.

For the 2020 full year, noninterest income increased 23.7% to $6.0 million, compared to $4.8 million for the same period last year. Noninterest income for the 2020 fourth quarter was $1.6 million, compared to $1.3 million for the 2019 fourth quarter.

For the 2020 full year, noninterest expense decreased 0.8% to $29.8 million, compared to $30.0 million last year. For the 2020 fourth quarter, noninterest expense was $7.8 million, compared to $7.4 million for the same period last year.

Net income for the year ended December 31, 2020, was $8.3 million, or $1.30 per diluted share, compared to $12.7 million, or $1.95 per diluted share for the same period last year. The decline in net income for the year ended December 31, 2020, was primarily due to a $9.0 million increase in the provision for loan losses as a result of the COVID-19 crisis and the resolution of an isolated commercial loan that occurred in the 2020 third quarter. Net income for the 2020 fourth quarter, was $2.5 million, or $0.39 per diluted share, compared to $3.1 million, or $0.48 per diluted share for the same period last year. The 2020 fourth quarter provision for loan losses increased $1.6 million from the prior year period.

Core earnings measured by pre-tax, pre-provision for loan losses(1) income, increased 21.0% to $19.6 million for the year ended December 31, 2020, compared to $16.2 million for the year ended December 31, 2019. Pre-tax, pre-provision for loan losses(1) income for the 2020 fourth quarter increased 19.4% to $5.1 million, compared to $4.2 million for the same period last year.

Balance Sheet

Total assets at December 31, 2020, increased 17.7% to $1.39 billion, from $1.18 billion at December 31, 2019. Net loans at December 31, 2020, were $1.09 billion, compared to $977.5 million at December 31, 2019. The 11.6% year-over-year increase in total net loans was primarily a result of PPP loans originated during the second and third quarters, as well as organic loan growth that occurred throughout the year.

Total deposits at December 31, 2020, were $1.23 billion, compared to $1.02 billion at December 31, 2019. The 20.0% year-over-year increase in deposits was primarily a result of higher interest-bearing deposits. The investment portfolio, which is entirely classified as available for sale, was $114.4 million at December 31, 2020, compared with $105.7 million at December 31, 2019.

Donald L. Stacy, Chief Financial Officer stated, “Throughout 2020, we focused on building our allowance for loan losses, which increased 98.9% over the prior year period to $13.5 million at December 31, 2020. In addition, our allowance for loan losses to nonperforming loans was 171.28% at December 31, 2020, compared to our allowance for loan losses to nonperforming loans of 76.22% at December 31, 2019. This is the highest our allowance for loan losses to nonperforming loans reserve has been in over 13 years. Over the near-term, we will continue to fund our allowance and increase our reserve which we believe is necessary to reserve for potential incurred losses in the portfolio associated with the COVID-19 crisis.”

“Overall asset quality remains strong. Loans in deferral status continue to improve and declined 88.6% from $214.8 million at June 30, 2020, to $24.5 million at December 31, 2020. No restaurant customers were seeking additional deferrals at year end, while most deferred loans were within the hospitality segment. Overall, the quality of our loan portfolio remains solid and does not appear to be significantly impacted by the current difficult economic environment. We continue to closely watch our loan portfolio, and we are doing everything we can to support all our customers and communities impacted by the COVID-19 crisis.”

Stockholders’ Equity and Dividends

At December 31, 2020, stockholders’ equity increased 4.4% to $143.8 million, compared to $137.8 million at December 31, 2019. On a per share basis, shareholders’ equity at December 31, 2020, was a record $22.54 compared to $21.45 at the same period last year.

At December 31, 2020, tangible stockholders’ equity(1) increased 5.3% to $127.0 million, compared to $120.6 million at December 31, 2019. On a per share basis, tangible stockholders’ equity(1) was $19.91 at December 31, 2020, compared to $18.78 at December 31, 2019.

For the 2020 full year, the Company declared cash dividends of $0.60 per share, compared to $0.57 per share for the same period last year.

At December 31, 2020, the Company had an equity to assets leverage ratio of 10.33%, compared to 11.65% at December 31, 2019.

Asset Quality

The provision for loan losses for the 2020 fourth quarter was $2.1 million versus $460,000 for the same period last year. The provision for loan losses for the year ended December 31, 2020 was $9.8 million compared to $890,000 for the year ended December 31, 2019. Most of the increased provision for the year ended December 31, 2020, was the result of increases to the economic conditions qualitative factors and higher charge-offs that occurred during the 2020 third quarter.

Net charge-offs for the 2020 fourth quarter were $0, compared to $693,000, or 0.28% of average loans, for the same period last year. For the 2020 twelve-month period, net charge-offs were $3.1 million, or 0.29% of average loans, compared to $1.6 million, or 0.16% of average loans for the 2019 twelve-month period.

Nonperforming assets at December 31, 2020, were $15.2 million, compared to $9.0 million at December 31, 2019. The allowance for loan losses at December 31, 2020, stood at $13.5 million, or 1.22% of total loans, compared to $6.8 million, or 0.69% of total loans at December 31, 2019.

COVID-19 Update

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020, and as a qualified SBA lender, we were automatically authorized to originate PPP loans. As of December 31, 2020, we approved 1,414 applications for up to $143.8 million of loans under the PPP. At December 31, 2020, we have processed $28.9 million of PPP forgiveness.

As of December 31, 2020, we modified 11 loans aggregating $24.5 million consisting of the deferral of principal payments and the extension of the maturity date, compared to 362 loans aggregating $214.8 million at June 30, 2020.

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 $1.39 billion at December 31, 2020. The bank operates 16 full-service banking centers and an LPL Financial® brokerage office serving Beachwood, Chardon, Cortland, Dublin, Garrettsville, Mantua, Middlefield, Newbury, Orwell, Plain City, Powell, Solon, Sunbury, Twinsburg, and Westerville. The Bank also operates a Loan Production Office in Mentor, Ohio.

Additional information is available at www.middlefieldbank.bank

 

(1)

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.

This press release of Middlefield Banc Corp. and the reports Middlefield Banc Corp. files with the Securities and Exchange Commission often contain “forward-looking statements” relating to present or future trends or factors affecting the banking industry and, specifically, the financial operations, markets and products of Middlefield Banc Corp. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Middlefield Banc Corp.’s future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) a significant increase in competitive pressures among financial institutions; (2) changes in the interest rate environment that may reduce interest margins; (3) changes in prepayment speeds, charge-offs and loan loss provisions; (4) less favorable than expected general economic conditions; (5) legislative or regulatory changes that may adversely affect businesses in which Middlefield Banc Corp. is engaged; (6) technological issues which may adversely affect Middlefield Banc Corp.’s financial operations or customers; (7) the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions; (8) changes in the securities markets; or (9) 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)

 

Balance Sheets (period end)

    December 31,
2020		      September 30,
2020		      June 30,
2020		      March 31,
2020		      December 31,
2019		  

ASSETS

               

Cash and due from banks

    $ 92,874      $ 46,097      $ 55,766      $ 53,533      $ 35,113  

Federal funds sold

      19,543        6,884        2,520        1,800        —    
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Cash and cash equivalents

      112,417        52,981        58,286        55,333        35,113  

Equity securities, at fair value

      609        553        581        550        710  

Investment securities available for sale, at fair value

      114,360        112,968        112,529        102,959        105,733  

Loans held for sale

      878        10,457        4,151        513        1,220  

Loans:

               

Commercial real estate:

               

Owner occupied

      103,121        107,342        110,134        113,272        102,386  

Non-owner occupied

      309,424        310,512        300,577        292,775        302,180  

Multifamily

      39,562        39,622        37,604        52,276        62,028  

Residential real estate

      233,995        222,237        227,427        233,900        234,798  

Commercial and industrial

      232,044        258,313        240,096        106,797        89,527  

Home equity lines of credit

      112,543        115,223        117,196        114,933        112,248  

Construction and other

      63,573        60,613        66,015        71,186        66,680  

Consumer installment

      9,823        10,534        11,210        12,861        14,411  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total loans

      1,104,085        1,124,396        1,110,259        998,000        984,258  

Less allowance for loan and lease losses

      13,459        11,359        10,210        9,244        6,768  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net loans

      1,090,626        1,113,037        1,100,049        988,756        977,490  

Premises and equipment, net

      18,333        18,633        18,962        17,653        17,874  

Goodwill

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

Core deposit intangibles

      1,724        1,807        1,890        1,973        2,056  

Bank-owned life insurance

      16,938        16,832        16,723        16,618        16,511  

Other real estate owned

      7,387        7,391        687        456        155  

Accrued interest receivable and other assets

      13,636        15,079        14,391        14,057        10,542  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

TOTAL ASSETS

    $  1,391,979      $  1,364,809      $ 1,343,320      $ 1,213,939      $ 1,182,475  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

     December 31,
2020		     September 30,
2020		     June 30,
2020		     March 31,
2020		     December 31,
2019		  

LIABILITIES

           

Deposits:

           

Noninterest-bearing demand

    $ 291,347     $ 268,838     $ 270,738     $ 206,372     $ 191,370  

Interest-bearing demand

      195,722       179,080       136,722       125,184       107,844  

Money market

      198,493       184,936       168,842       156,556       160,826  

Savings

      243,888       231,696       218,545       175,468       192,003  

Time

      295,750       329,413       363,420       340,130       368,800  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total deposits

      1,225,200       1,193,963       1,158,267       1,003,710       1,020,843  

Short-term borrowings

      —         —         20,417       60,000       5,075  

Other borrowings

      17,038       17,100       17,162       12,662       12,750  

Accrued interest payable and other liabilities

      5,931       11,690       6,779       4,880       6,032  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

TOTAL LIABILITIES

      1,248,169       1,222,753       1,202,625       1,081,252       1,044,700  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

STOCKHOLDERS’ EQUITY

           

Common stock, no par value; 10,000,000 shares authorized, 7,308,685 shares issued, 6,379,323 shares outstanding as of December 31, 2020

      86,886       86,871       86,722       86,722       86,617  

Retained earnings

      69,578       68,046       67,150       65,140       65,063  

Accumulated other comprehensive income (loss)

      4,284       4,077       3,761       (2,237 )      1,842  

Treasury stock, at cost; 929,362 shares as of December 31, 2020

      (16,938 )      (16,938 )      (16,938 )      (16,938 )      (15,747 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

TOTAL STOCKHOLDERS’ EQUITY

      143,810       142,056       140,695       132,687       137,775  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

    $  1,391,979     $  1,364,809     $ 1,343,320     $ 1,213,939     $ 1,182,475  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

MIDDLEFIELD BANC CORP.

Consolidated Selected Financial Highlights

(Dollar amounts in thousands, unaudited)

 

     For the Three Months Ended      For the Twelve Months Ended  

Statements of Income

    December 31,
2020		     September 30,
2020		     June 30,
2020		     March 31,
2020		     December 31,
2019		      December 31,
2020		     December 31,
2019		  

INTEREST AND DIVIDEND INCOME

                

Interest and fees on loans

    $  12,041     $ 12,603     $ 12,281     $ 12,078     $ 12,392      $ 49,003     $ 50,390  

Interest-earning deposits in other institutions

      9       8       7       94       124        118       673  

Federal funds sold

      1       —         —         21       22        22       78  

Investment securities:

                

Taxable interest

      297       249       206       157       197        909       796  

Tax-exempt interest

      591       618       634       629       661        2,472       2,392  

Dividends on stock

      28       29       27       30       40        114       196  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Total interest and dividend income

      12,967       13,507       13,155       13,009       13,436        52,638       54,525  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

INTEREST EXPENSE

                

Deposits

      1,655       2,106       2,336       2,865       3,014        8,962       12,409  

Short-term borrowings

      (2 )      14       32       35       34        79       368  

Other borrowings

      43       28       62       76       80        209       363  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Total interest expense

      1,696       2,148       2,430       2,976       3,128        9,250       13,140  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

NET INTEREST INCOME

      11,271       11,359       10,725       10,033       10,308        43,388       41,385  

Provision for loan losses

      2,100       4,000       1,000       2,740       460        9,840       890  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

      9,171       7,359       9,725       7,293       9,848        33,548       40,495  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

NONINTEREST INCOME

                

Service charges on deposit accounts

      729       691       566       553       577        2,539       2,186  

Investment securities gains on sale, net

      —         —         —         —         —          —         194  

Gain (loss) on equity securities

      56       (28 )      31       (160 )      82        (101 )      94  

Earnings on bank-owned life insurance

      106       109       105       107       108        427       431  

Gains on sale of loans

      332       660       381       114       148        1,487       433  

Other income

      387       379       412       460       390        1,638       1,503  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Total noninterest income

      1,610       1,811       1,495       1,074       1,305        5,990       4,841  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

NONINTEREST EXPENSE

                

Salaries and employee benefits

      4,458       3,657       4,136       3,584       4,039        15,835       16,783  

Occupancy expense

      628       497       483       550       580        2,158       2,164  

Equipment expense

      365       363       307       273       270        1,308       1,040  

Data processing costs

      617       683       684       666       614        2,650       2,208  

Ohio state franchise tax

      251       282       281       268       262        1,082       1,044  

Federal deposit insurance expense

      103       123       74       123       —          423       230  

Professional fees

      352       289       369       349       448        1,359       1,683  

Loss (gain) on other real estate owned

      44       (184 )      (33 )      1       11        (172 )      (125 ) 

Advertising expense

      55       217       217       209       128        698       733  

Software amortization expense

      66       70       74       141       159        351       638  

Core deposit intangible amortization

      83       83       83       83       85        332       341  

Other expense

      803       942       1,014       1,005       782        3,764       3,294  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Total noninterest expense

      7,825       7,022       7,689       7,252       7,378        29,788       30,033  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Income before income taxes

      2,956       2,148       3,531       1,115       3,775        9,750       15,303  

Income taxes

      467       295       565       74       634        1,401       2,592  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

NET INCOME

    $ 2,489     $ 1,853     $ 2,966     $ 1,041     $ 3,141      $ 8,349     $ 12,711  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

PTPP (1)

   $ 5,056     $ 6,148     $ 4,531     $ 3,855     $ 4,235      $ 19,590     $ 16,193  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

 

(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,
2020		     September 30,
2020		     June 30,
2020		     March 31,
2020		     December 31,
2019		     December 31,
2020		     December 31,
2019		  
Per common share data               

Net income per common share—basic

    $ 0.39     $ 0.29     $ 0.47     $ 0.16     $ 0.48     $ 1.31     $ 1.96  

Net income per common share—diluted

    $ 0.39     $ 0.29     $ 0.46     $ 0.16     $ 0.48     $ 1.30     $ 1.95  

Dividends declared per share

    $ 0.15     $ 0.15     $ 0.15     $ 0.15     $ 0.15     $ 0.60     $ 0.57  

Book value per share (period end)

    $ 22.54     $ 22.27     $ 22.09     $ 20.83     $ 21.45     $ 22.54     $ 21.45  

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

    $ 19.91     $ 19.63     $ 19.43     $ 18.16     $ 18.78     $ 19.91     $ 18.78  

Dividends declared

    $ 957     $ 957     $ 956     $ 964     $ 964     $ 3,834     $ 3,685  

Dividend yield

      2.65 %      3.09 %      2.91 %      3.82 %      2.28 %      2.67 %      2.18 % 

Dividend payout ratio

      38.45 %      51.65 %      32.23 %      92.60 %      30.69 %      45.92 %      28.99 % 

Average shares outstanding—basic

      6,378,706       6,376,291       6,369,467       6,417,109       6,423,543       6,385,350       6,470,408  

Average shares outstanding—diluted

      6,397,681       6,385,765       6,388,118       6,429,443       6,455,387       6,404,524       6,502,806  

Period ending shares outstanding

      6,379,323       6,378,110       6,369,467       6,369,467       6,423,630       6,379,323       6,423,630  
Selected ratios               

Return on average assets

      0.72 %      0.54 %      0.90 %      0.35 %      1.04 %      0.64 %      1.05 % 

Return on average equity

      6.76 %      5.11 %      8.57 %      3.01 %      8.87 %      5.87 %      9.35 % 

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

      7.64 %      5.79 %      9.76 %      3.43 %      10.11 %      6.66 %      10.72 % 

Efficiency (1)

     59.29 %      51.96 %      61.29 %      63.47 %      61.75 %      58.77 %      63.25 % 

Equity to assets at period end

      10.33 %      10.41 %      10.47 %      10.93 %      11.65 %      10.33 %      11.65 % 

Noninterest expense to average assets

      0.57 %      0.52 %      0.58 %      0.61 %      0.61 %      2.27 %      2.49 % 

 

(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  

Yields

    December 31,
2020		     September 30,
2020		     June 30,
2020		     March 31,
2020		     December 31,
2019		     December 31,
2020		     December 31,
2019		  

Interest-earning assets:

               

Loans receivable (2)

     4.28 %      4.48 %      4.53 %      4.95 %      4.97 %      4.55 %      5.06 % 

Investment securities (2)

     3.65 %      3.66 %      3.76 %      3.62 %      3.79 %      3.68 %      3.77 % 

Interest-earning deposits with other banks

      0.21 %      0.27 %      0.23 %      1.40 %      1.65 %      0.45 %      2.11 % 

Total interest-earning assets

      4.00 %      4.23 %      4.27 %      4.69 %      4.73 %      4.28 %      4.83 % 

Deposits:

               

Interest-bearing demand deposits

      0.21 %      0.32 %      0.35 %      0.42 %      0.41 %      0.31 %      0.36 % 

Money market deposits

      0.53 %      0.70 %      0.93 %      1.41 %      1.41 %      0.87 %      1.46 % 

Savings deposits

      0.11 %      0.20 %      0.21 %      0.50 %      0.62 %      0.24 %      0.70 % 

Certificates of deposit

      1.56 %      1.77 %      2.00 %      2.12 %      2.18 %      1.87 %      2.22 % 

Total interest-bearing deposits

      0.70 %      0.93 %      1.11 %      1.39 %      1.43 %      1.02 %      1.48 % 

Non-Deposit Funding:

               

Borrowings

      0.95 %      0.45 %      0.53 %      1.62 %      2.52 %      0.75 %      2.63 % 

Total interest-bearing liabilities

      0.71 %      0.91 %      1.07 %      1.40 %      1.46 %      1.01 %      1.52 % 

Cost of deposits

      0.54 %      0.72 %      0.85 %      1.13 %      1.15 %      0.79 %      1.20 % 

Cost of funds

      0.55 %      0.71 %      0.83 %      1.14 %      1.17 %      0.79 %      1.23 % 

Net interest margin (1)

     3.49 %      3.57 %      3.49 %      3.63 %      3.65 %      3.54 %      3.68 % 

 

(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  

Asset quality data

    December 31,
2020		     September 30,
2020		     June 30,
2020		     March 31,
2020		     December 31,
2019		  
(Dollar amounts in thousands, unaudited)                               

Nonperforming loans (1)

   $ 7,858     $ 6,690     $ 9,803     $ 8,405     $ 8,879  

Other real estate owned

      7,387       7,391       687       456       155  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Nonperforming assets

    $ 15,245     $ 14,081     $ 10,490     $ 8,861     $ 9,034  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Allowance for loan losses

    $ 13,459     $ 11,359     $ 10,210     $ 9,244     $ 6,768  

Allowance for loan losses/total loans

      1.22 %      1.01 %      0.92 %      0.93 %      0.69 % 

Net charge-offs:

           

Quarter-to-date

    $ —       $ 2,851     $ 34     $ 264     $ 693  

Year-to-date

      3,149       3,149       298       264       1,550  

Net charge-offs to average loans, annualized:

           

Quarter-to-date

      0.00 %      1.01 %      0.01 %      0.11 %      0.28 % 

Year-to-date

      0.29 %      0.39 %      0.06 %      0.11 %      0.16 % 

Nonperforming loans/total loans

      0.71 %      0.59 %      0.88 %      0.84 %      0.90 % 

Allowance for loan losses/nonperforming loans

      171.28 %      169.79 %      104.15 %      109.98 %      76.22 % 

Nonperforming assets/total assets

      1.10 %      1.03 %      0.78 %      0.73 %      0.76 % 

 

(1)

Nonperforming loans exclude troubled debt restructurings that are performing in accordance with their terms over a prescribed period of time.

 

Reconciliation of Common Stockholders’
Equity to Tangible Common Equity

    For the Three Months Ended      For the Twelve Months Ended  
(Dollar amounts in thousands, unaudited)    December 31,
2020		      September 30,
2020		      June 30,
2020		      March 31,
2020		      December 31,
2019		      December 31,
2020		     December 31,
2019		  

Stockholders’ Equity

    $ 143,810      $ 142,056      $ 140,695      $ 132,687      $ 137,775      $ 143,810     $ 137,775  

Less Goodwill and other intangibles

      16,795        16,878        16,961        17,044        17,127        16,795       17,127  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Tangible Common Equity

    $ 127,015      $ 125,178      $ 123,734      $ 115,643      $ 120,648      $ 127,015     $ 120,648  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Shares outstanding

      6,379,323        6,378,110        6,369,467        6,369,467        6,423,630        6,379,323       6,423,630  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

Tangible book value per share

    $ 19.91      $ 19.63      $ 19.43      $ 18.16      $ 18.78      $ 19.91     $ 18.78  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

 

Reconciliation of Average Equity to Return on
Average Tangible Common Equity

    For the Three Months Ended     For the Twelve Months Ended  
     December 31,
2020		     September 30,
2020		     June 30,
2020		     March 31,
2020		     December 31,
2019		     December 31,
2020		     December 31,
2019		  

Average Stockholders’ Equity

    $  146,374     $ 144,167     $ 139,212     $ 139,208     $ 140,475     $ 142,241     $ 135,900  

Less Average Goodwill and other intangibles

      16,836       16,919       17,002       17,085       17,169       16,960       17,296  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Average Tangible Common Equity

    $ 129,538     $ 127,248     $ 122,210     $ 122,123     $ 123,306     $ 125,281     $ 118,604  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income

    $ 2,489     $ 1,853     $ 2,966     $ 1,041     $ 3,141     $ 8,349     $ 12,711  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Return on average tangible common equity (annualized)

      7.64 %      5.79 %      9.76 %      3.43 %      10.11 %      6.66 %      10.72 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

Reconciliation of Pre-Tax Pre-Provision Income
(PTPP)

    For the Three Months Ended      For the Twelve Months Ended  
     December 31,
2020		      September 30,
2020		      June 30,
2020		      March 31,
2020		      December 31,
2019		      December 31,
2020		      December 31,
2019		  

Net income

    $  2,489      $ 1,853      $ 2,966      $ 1,041      $ 3,141      $ 8,349      $ 12,711  

Add Income Taxes

      467        295        565        74        634        1,401        2,592  

Add Provision for loan losses

      2,100        4,000        1,000        2,740        460        9,840        890  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

PTPP

    $ 5,056      $ 6,148      $ 4,531      $ 3,855      $ 4,235      $ 19,590      $ 16,193  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

MIDDLEFIELD BANC CORP.

Average Balance Sheets

(Dollar amounts in thousands, unaudited)

 

     For the Three Months Ended  
     December 31,
2020		     December 31,
2019		  
     Average
Balance		      Interest      Average
Yield/
Cost		     Average
Balance		      Interest      Average
Yield/
Cost		  

Interest-earning assets:

                 

Loans receivable (3)

   $ 1,121,259      $ 12,041        4.28 %    $ 990,106      $ 12,392        4.97 % 

Investment securities (3)

     113,801        888        3.65 %      104,139        858        3.79 % 

Interest-earning deposits with other banks (4)

     70,803        38        0.21 %      44,816        186        1.65 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total interest-earning assets

      1,305,863        12,967        4.00 %      1,139,061        13,436        4.73 % 
     

 

 

          

 

 

     

Noninterest-earning assets

      78,064             64,303        
  

 

 

          

 

 

        

Total assets

    $ 1,383,927           $ 1,203,364        
  

 

 

          

 

 

        

Interest-bearing liabilities:

                 

Interest-bearing demand deposits

    $ 186,933      $ 97        0.21 %    $ 108,015      $ 112        0.41 % 

Money market deposits

      191,771        255        0.53 %      157,117        557        1.41 % 

Savings deposits

      238,991        66        0.11 %      198,577        309        0.62 % 

Certificates of deposit

      316,293        1,237        1.56 %      370,404        2,036        2.18 % 

Short-term borrowings

      26        —          0.00 %      5,330        34        2.53 % 

Other borrowings

      17,068        41        0.96 %      12,602        80        2.52 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total interest-bearing liabilities

      951,082        1,696        0.71 %      852,045        3,128        1.46 % 
     

 

 

          

 

 

     

Noninterest-bearing liabilities:

                 

Noninterest-bearing demand deposits

      281,608             207,793        

Other liabilities

      4,863             3,051        

Stockholders’ equity

      146,374             140,475        
  

 

 

          

 

 

        

Total liabilities and stockholders’ equity

    $ 1,383,927           $ 1,203,364        
  

 

 

          

 

 

        

Net interest income

       $ 11,271           $ 10,308     
     

 

 

          

 

 

     

Interest rate spread (1)

           3.29 %            3.27 % 

Net interest margin (2)

           3.49 %            3.65 % 

Ratio of average interest-earning assets to average interest-bearing liabilities

            137.30 %            133.69 % 

 

(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 $178 and $157 for the three months ended December 31, 2020 and 2019, respectively

(4)

Includes dividends received on restricted stock.

 

     For the Three Months Ended  
     December 31,
2020		     September 30,
2020		  
     Average
Balance		      Interest      Average
Yield/
Cost		     Average
Balance		      Interest      Average
Yield/
Cost		  

Interest-earning assets:

                 

Loans receivable (3)

   $ 1,121,259      $ 12,041        4.28 %    $ 1,121,763      $ 12,603        4.48 % 

Investment securities (3)

     113,801        888        3.65 %      111,994        867        3.66 % 

Interest-earning deposits with other banks (4)

     70,803        38        0.21 %      53,826        37        0.27 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total interest-earning assets

      1,305,863        12,967        4.00 %      1,287,583        13,507        4.23 % 
     

 

 

          

 

 

     

Noninterest-earning assets

      78,064             66,836        
  

 

 

          

 

 

        

Total assets

    $ 1,383,927           $ 1,354,419        
  

 

 

          

 

 

        

Interest-bearing liabilities:

                 

Interest-bearing demand deposits

    $ 186,933      $ 97        0.21 %    $ 149,048      $ 120        0.32 % 

Money market deposits

      191,771        255        0.53 %      176,136        312        0.70 % 

Savings deposits

      238,991        66        0.11 %      223,507        113        0.20 % 

Certificates of deposit

      316,293        1,237        1.56 %      349,981        1,561        1.77 % 

Short-term borrowings

      26        —          0.00 %      19,740        14        0.28 % 

Other borrowings

      17,068        41        0.96 %      17,130        28        0.65 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total interest-bearing liabilities

      951,082        1,696        0.71 %      935,542        2,148        0.91 % 
     

 

 

          

 

 

     

Noninterest-bearing liabilities:

                 

Noninterest-bearing demand deposits

      281,608             270,868        

Other liabilities

      4,863             3,842        

Stockholders’ equity

      146,374             144,167        
  

 

 

          

 

 

        

Total liabilities and stockholders’ equity

    $ 1,383,927           $ 1,354,419        
  

 

 

          

 

 

        

Net interest income

       $ 11,271           $ 11,359     
     

 

 

          

 

 

     

Interest rate spread (1)

           3.29 %            3.32 % 

Net interest margin (2)

           3.49 %            3.57 % 

Ratio of average interest-earning assets to average interest-bearing liabilities

            137.30 %            137.63 % 

 

(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 $178 and $186 for the three months ended December 31, 2020, and September 30, 2020, respectively.

(4)

Includes dividends received on restricted stock.

     For the Twelve Months Ended  
     December 31,
2020		     December 31,
2019		  
     Average
Balance		      Interest      Average
Yield/
Cost		     Average
Balance		      Interest      Average
Yield/
Cost		  

Interest-earning assets:

                 

Loans receivable (3)

   $ 1,079,788      $ 49,003        4.55 %    $ 997,744      $ 50,390        5.06 % 

Investment securities (3)

     109,863        3,381        3.68 %      101,381        3,188        3.77 % 

Interest-earning deposits with other banks (4)

     56,222        254        0.45 %      44,943        947        2.11 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total interest-earning assets

      1,245,873        52,638        4.28 %      1,144,068        54,525        4.83 % 
     

 

 

          

 

 

     

Noninterest-earning assets

      68,219             61,596        
  

 

 

          

 

 

        

Total assets

    $ 1,314,092           $ 1,205,664        
  

 

 

          

 

 

        

Interest-bearing liabilities:

                 

Interest-bearing demand deposits

    $ 144,897      $ 445        0.31 %    $ 102,550      $ 374        0.36 % 

Money market deposits

      172,587        1,501        0.87 %      167,187        2,438        1.46 % 

Savings deposits

      211,151        510        0.24 %      199,515        1,399        0.70 % 

Certificates of deposit

      347,609        6,506        1.87 %      369,006        8,198        2.22 % 

Short-term borrowings

      22,637        79        0.35 %      14,808        368        2.49 % 

Other borrowings

      15,629        209        1.34 %      12,986        363        2.80 % 
  

 

 

     

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total interest-bearing liabilities

      914,510        9,250        1.01 %      866,052        13,140        1.52 % 
     

 

 

          

 

 

     

Noninterest-bearing liabilities:

                 

Noninterest-bearing demand deposits

      252,615             199,672        

Other liabilities

      4,726             4,040        

Stockholders’ equity

      142,241             135,900        
  

 

 

          

 

 

        

Total liabilities and stockholders’ equity

    $ 1,314,092           $ 1,205,664        
  

 

 

          

 

 

        

Net interest income

       $ 43,388           $ 41,385     
     

 

 

          

 

 

     

Interest rate spread (1)

           3.27 %            3.31 % 

Net interest margin (2)

           3.54 %            3.68 % 

Ratio of average interest-earning assets to average interest-bearing liabilities

            136.23 %            132.10 % 

 

(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 $ 742 and $ 720 for 2020 and 2019, respectively.

(4)

Includes dividends received on restricted stock.