0001193125-21-217160.txt : 20210716 0001193125-21-217160.hdr.sgml : 20210716 20210716124201 ACCESSION NUMBER: 0001193125-21-217160 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 20210716 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20210716 DATE AS OF CHANGE: 20210716 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MIDDLEFIELD BANC CORP CENTRAL INDEX KEY: 0000836147 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 341585111 STATE OF INCORPORATION: OH FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36613 FILM NUMBER: 211094805 BUSINESS ADDRESS: STREET 1: 15985 E HIGH ST STREET 2: P O BOX 35 CITY: MIDDLEFILED STATE: OH ZIP: 44062-9263 BUSINESS PHONE: 4406321666 MAIL ADDRESS: STREET 1: 15985 EAST HIGH STREET STREET 2: P O BOX 35 CITY: MIDDLEFIELD STATE: OH ZIP: 44062-9263 8-K 1 d178298d8k.htm 8-K 8-K
MIDDLEFIELD BANC CORP false 0000836147 0000836147 2021-07-16 2021-07-16

 

 

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 16, 2021

(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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

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.  ☐

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)

 

 

 


ITEM 2.02

RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following information is furnished under Item 2.02. On July 16, 2021, Middlefield Banc Corp. issued a press release announcing financial results for the three month and six month periods ended June 30, 2021. 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 16, 2021 press release of Middlefield Banc Corp.
104    Cover Page Interactive File (embedded within the Inline XBRL document)


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 16, 2021      

/s/ James R. Heslop, II                    ,

            Executive Vice President and COO
EX-99 2 d178298dex99.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 Record 2021 First Half Financial Results

MIDDLEFIELD, OHIO, July 16, 2021◆◆◆◆ Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the 2021 first half and second quarter ended June 30, 2021.

2021 First Half Financial Highlights Include (on a year-over-year basis unless noted):

 

   

Net income of $8.6 million, or $1.35 per diluted share driven by record second quarter earnings of $4.4 million, or a record $0.70 per diluted share

 

   

Net interest margin improved by 16 basis points to 3.72%, compared to 3.56%

 

   

Total noninterest income was up 49.9% to $3.9 million

 

   

Pre-tax, pre-provision(1) income increased 35.4% to $11.4 million

 

   

Return on average assets increased to 1.26% from 0.64%

 

   

Return on average equity increased to 11.88% from 5.79%

 

   

Return on average tangible common equity(1) increased to 13.41% from 6.59%

 

   

Efficiency ratio improved to 57.60%, compared to 62.33%

 

   

Year-to-date net charge-offs declined 46.6% to $159,000

“Our record second quarter and first half earnings reflect strong operating performance across our business and improving economic trends throughout our Northeast and Central Ohio markets,” stated Thomas G. Caldwell, President and Chief Executive Officer. “In addition, we have successfully navigated the low interest rate environment throughout the 2021 first half by successfully managing our net interest margin, enhancing our efficiency ratio, controlling operating expenses, growing noninterest income, and maintaining strong asset quality.”

“Year-to-date, we have helped small business customers secure $93.5 million of PPP forgiveness, which provided a $1.5 million benefit to our yield on earnings assets. At June 30, 2021, $90.2 million of PPP loans remained on the balance sheet and we expect the majority of the outstanding PPP loans will be forgiven by year end.”

“While economic and interest rate uncertainty remains, we are focused on pursuing our long-term growth strategy, making investments across our business, and creating value for our shareholders. As a result, we


recently hired two new loan officers in Central Ohio, we are improving our customer engagement by enhancing the Bank’s online resources and returning capital to shareholders through our higher year-over-year dividend payment and share buyback program. Year-to-date, we have repurchased 181,045 shares of our common stock at an average price of $23.16 per share, which includes 131,577 shares repurchased in the second quarter at an average price of $23.42 per share. We have repurchased our common stock at an average price of 111.2% to tangible book value, which we believe is a tremendous value and offers a significant opportunity for our shareholders to increase their ownership in Middlefield Banc Corp. Overall, I am pleased with our strong year-to-date performance, and we expect 2021 will be another strong year for the Company,” concluded Mr. Caldwell.

Income Statement

Net interest income for the 2021 first half, increased 14.6% to $23.8 million, compared to $20.8 million for the same period last year. Year-to-date, the net interest margin was 3.72%, compared to 3.56% for the same period last year. Net interest income for the 2021 second quarter was $11.9 million, compared to $10.7 million for the 2020 second quarter. The 10.8% increase in net interest income for the 2021 second quarter was largely a result of a 56.8% reduction in interest expense. The net interest margin for the 2021 second quarter was 3.72%, compared to 3.49% for the same period of 2020.

For the 2021 first half, noninterest income was $3.9 million, compared to $2.6 million for the same period last year. Noninterest income for the 2021 second quarter was $1.6 million, compared to $1.5 million for the same period last year.

For the 2021 first half, noninterest expense increased 9.0% to $16.3 million, compared to $14.9 million for the same period last year. Operating costs in the 2021 second quarter increased 3.1% to $7.9 million from $7.7 million for the 2020 second quarter.

Net income for the 2021 first half ended June 30, 2021, was a record $8.6 million, or a record $1.35 per diluted share, compared to $4.0 million, or $0.62 per diluted share for the same period last year. Net income for the 2021 second quarter ended June 30, 2021, was a quarterly record of $4.4 million, or $0.70 per diluted share, compared to $3.0 million, or $0.46 per diluted share for the same period last year.

Balance Sheet

Total assets at June 30, 2021, increased 1.3% to approximately $1.36 billion from $1.34 billion at June 30, 2020. Net loans at June 30, 2021, decreased 5.3% to $1.04 billion, compared to $1.10 billion at June 30, 2020 as PPP forgiveness increased. Middlefield originated $212.6 million of loans under the PPP and helped customers receive $122.4 million of forgiveness payments under the terms of the program. The balance of PPP loans outstanding at June 30, 2021, was $90.2 million.

Total deposits at June 30, 2021, were approximately $1.20 billion, compared to $1.16 billion at June 30, 2020. The 3.2% increase in deposits was primarily due to increases in interest-bearing, money market, savings, and non-interest-bearing accounts, partially offset by decreased time-based accounts. At June 30, 2021, Middlefield had no short-term borrowings compared to $20.4 million of short-term borrowings at June 30, 2020 as the Company paid back Federal Home Loan Bank advances. The investment portfolio, which is entirely classified as available for sale, was $150.9 million June 30, 2021, compared with $112.5 million at June 30, 2020.

Donald L. Stacy, Chief Financial Officer stated, “Our balance sheet remains strong as we benefit from record earnings, favorable asset quality, and a meaningfully higher allowance. The allowance for loan losses to total loans now stands at 1.34%, compared to 1.28% at March 31, 2021, and 0.92% at June 30, 2020. In addition, at June 30, 2021, we only had eight loans in deferral status primarily within the hospitality industry representing a balance of $17.7 million, compared to a balance of $214.8 million at June 30, 2020, a decline of approximately 92%.”


“We also ended the quarter with robust capital levels and liquidity, including nearly $92.5 million in cash and cash equivalents and $150.9 million in our investment portfolio. We are focused on maximizing the yield on our investment portfolio, while prudently managing risk. As a result, our investment portfolio includes $32 million of subordinated debt, at an average yield of approximately 4.8%, in community banks across the country with similar metrics. The remainder of our investment portfolio is primarily held in tax free municipal bonds. I believe our record year-to-date financial results demonstrate strong execution across many aspects of the Bank and our ability to focus on managing items under our control,” concluded Mr. Stacy.

Stockholders’ Equity and Dividends

At June 30, 2021, shareholders’ equity increased 3.8% to $146.0 million compared to $140.7 million at June 30, 2020. On a per share basis, shareholders’ equity at June 30, 2021, was $23.50 compared to $22.09 at the same period last year.

Tangible stockholders’ equity(1) increased 4.6% to $129.4 million for the 2021 second quarter, compared to $123.7 million at June 30, 2020. On a per-share basis, tangible stockholders’ equity(1) was $20.82 at June 30, 2021, compared to $19.43 at June 30, 2020.

Through the first six months of 2021, the Company declared cash dividends of $0.32 per share, compared to $0.30 per share for the same period last year.

At June 30, 2021, the Company had an equity to assets leverage ratio of 10.74%, compared to 10.47% at June 30, 2020.

Asset Quality

The provision for loan losses for the 2021 second quarter was $200,000 versus $1.0 million for the same period last year. The year-over-year decline in the provision for loan losses was partially due to strong asset quality and last year’s prudent build in the Company’s allowance for loan losses associated with the potential economic impacts caused by the COVID-19 pandemic. The provision for loan losses for the 2021 first half was $900,000 versus $3.7 million for the same period last year.

Net charge-offs were $122,000, or 0.05% of average loans, annualized, during the 2021 second quarter, compared to net charge-offs of $34,000, or 0.01% of average loans, annualized, at June 30, 2020. Year-to-date net charge-offs were $159,000, or 0.03% of average loans, annualized, compared to net charge-offs of $298,000, or 0.06% of average loans, annualized for the six-months ended June 30, 2020.

Nonperforming assets at June 30, 2021, were $14.9 million, compared to $10.5 million at June 30, 2020. The $4.4 million increase in nonperforming assets was affected by one large legacy credit in the Central Ohio market, which was charged-off during the 2020 third quarter. Nonperforming loans at June 30, 2021 were $7.8 million a 20.8% decline from the same period last year, and a 13.4% decline from the 2021 first quarter. The allowance for loan losses at June 30, 2021, stood at $14.2 million, or 1.34% of total loans, compared to $10.2 million, or 0.92% of total loans 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 $1.36 billion at June 30, 2021. 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)

     June 30,  
2021
      March 31,  
2021
     December 31, 
2020
    September 30,
2020
        June 30,    
2020
 

ASSETS

          

Cash and due from banks

   $ 82,435     $ 93,037     $ 92,874     $ 46,097     $ 55,766  

Federal funds sold

     10,034       7,436       19,543       6,884       2,520  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents

     92,469       100,473       112,417       52,981       58,286  

Equity securities, at fair value

     730       690       609       553       581  

Investment securities available for sale, at fair value

     150,850       123,218       114,360       112,968       112,529  

Loans held for sale

     790       1,260       878       10,457       4,151  

Loans:

          

Commercial real estate:

          

Owner occupied

     109,777       104,379       103,121       107,342       110,134  

Non-owner occupied

     304,324       304,623       309,424       310,512       300,577  

Multifamily

     34,926       39,015       39,562       39,622       37,604  

Residential real estate

     228,102       228,052       233,995       222,237       227,427  

Commercial and industrial

     200,558       242,651       232,044       258,313       240,096  

Home equity lines of credit

     107,685       111,474       112,543       115,223       117,196  

Construction and other

     62,229       64,960       63,573       60,613       66,015  

Consumer installment

     8,694       9,046       9,823       10,534       11,210  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans

     1,056,295       1,104,200       1,104,085       1,124,396       1,110,259  

Less allowance for loan and lease losses

     14,200       14,122       13,459       11,359       10,210  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loans

     1,042,095       1,090,078       1,090,626       1,113,037       1,100,049  

Premises and equipment, net

     17,680       18,002       18,333       18,633       18,962  

Goodwill

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

Core deposit intangibles

     1,564       1,644       1,724       1,807       1,890  

Bank-owned life insurance

     16,846       16,740       16,938       16,832       16,723  

Other real estate owned

     7,090       7,372       7,387       7,391       687  

Accrued interest receivable and other assets

     15,033       13,545       13,636       15,079       14,391  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

   $ 1,360,218     $ 1,388,093     $ 1,391,979     $ 1,364,809     $ 1,343,320  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     June 30,
2021
    March 31,
2021
    December 31,
2020
    September 30,
2020
    June 30,
2020
 

LIABILITIES

          

Deposits:

          

Noninterest-bearing demand

   $ 326,665     $ 317,224     $ 291,347     $ 268,838     $ 270,738  

Interest-bearing demand

     207,725       215,684       195,722       179,080       136,722  

Money market

     183,453       187,204       198,493       184,936       168,842  

Savings

     252,171       259,973       243,888       231,696       218,545  

Time

     225,271       245,342       295,750       329,413       363,420  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

     1,195,285       1,225,427       1,225,200       1,193,963       1,158,267  

Short-term borrowings

     —         —         —         —         20,417  

Other borrowings

     13,031       13,095       17,038       17,100       17,162  

Accrued interest payable and other liabilities

     5,858       4,901       5,931       11,690       6,779  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES

     1,214,174       1,243,423       1,248,169       1,222,753       1,202,625  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

STOCKHOLDERS’ EQUITY

          

Common stock, no par value; 10,000,000 shares authorized, 7,325,918 shares issued, 6,215,511 shares outstanding as of June 30, 2021

     87,131       87,073       86,886       86,871       86,722  

Retained earnings

     76,150       72,729       69,578       68,046       67,150  

Accumulated other comprehensive income

     3,893       2,917       4,284       4,077       3,761  

Treasury stock, at cost; 1,110,407 shares as of June 30, 2021

     (21,130     (18,049     (16,938     (16,938     (16,938
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL STOCKHOLDERS’ EQUITY

     146,044       144,670       143,810       142,056       140,695  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 1,360,218     $ 1,388,093     $ 1,391,979     $ 1,364,809     $ 1,343,320  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


MIDDLEFIELD BANC CORP.

Consolidated Selected Financial Highlights

(Dollar amounts in thousands, unaudited)

 

                                                                                                                                    
     For the Three Months Ended     For the Six Months Ended  

Statements of Income

   June 30,
2021
     March 31,
2021
     December 31,
2020
    September 30,
2020
    June 30,
2020
    June 30,
2021
     June 30,
2020
 

INTEREST AND DIVIDEND INCOME

                 

Interest and fees on loans

   $ 11,885      $ 12,167      $ 12,041     $ 12,603     $ 12,281     $ 24,052      $ 24,359  

Interest-earning deposits in other institutions

     12        18        9       8       7       30        101  

Federal funds sold

     1        —          1       —         —         1        21  

Investment securities:

                 

Taxable interest

     410        370        297       249       206       780        363  

Tax-exempt interest

     602        558        591       618       634       1,160        1,263  

Dividends on stock

     26        29        28       29       27       55        57  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total interest and dividend income

     12,936        13,142        12,967       13,507       13,155       26,078        26,164  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

INTEREST EXPENSE

                 

Deposits

     1,010        1,205        1,655       2,106       2,336       2,215        5,201  

Short-term borrowings

     —          —          (2     14       32       —          67  

Other borrowings

     39        39        43       28       62       78        138  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total interest expense

     1,049        1,244        1,696       2,148       2,430       2,293        5,406  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

NET INTEREST INCOME

     11,887        11,898        11,271       11,359       10,725       23,785        20,758  

Provision for loan losses

     200        700        2,100       4,000       1,000       900        3,740  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

     11,687        11,198        9,171       7,359       9,725       22,885        17,018  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

NONINTEREST INCOME

                 

Service charges on deposit accounts

     856        787        729       691       566       1,643        1,119  

Gain (loss) on equity securities

     40        81        56       (28     31       121        (129

Earnings on bank-owned life insurance

     106        226        106       109       105       332        212  

Gains on sale of loans

     221        592        332       660       381       813        495  

Other income

     409        532        387       379       412       941        872  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total noninterest income

     1,632        2,218        1,610       1,811       1,495       3,850        2,569  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

NONINTEREST EXPENSE

                 

Salaries and employee benefits

     4,321        4,254        4,458       3,657       4,136       8,575        7,720  

Occupancy expense

     549        600        628       497       483       1,149        1,033  

Equipment expense

     313        357        365       363       307       670        580  

Data processing costs

     698        786        617       683       684       1,484        1,350  

Ohio state franchise tax

     286        286        251       282       281       572        549  

Federal deposit insurance expense

     150        144        103       123       74       294        197  

Professional fees

     323        419        352       289       369       742        718  

Net loss (gain) on other real estate owned

     22        46        (172     (184     (33     68        (32

Advertising expense

     221        221        55       217       217       442        426  

Software amortization expense

     74        80        66       70       74       154        215  

Core deposit intangible amortization

     80        80        83       83       83       160        166  

Other expense

     889        1,080        1,019       942       1,014       1,969        2,019  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total noninterest expense

     7,926        8,353        7,825       7,022       7,689       16,279        14,941  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Income before income taxes

     5,393        5,063        2,956       2,148       3,531       10,456        4,646  

Income taxes

     968        896        467       295       565       1,864        639  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

NET INCOME

   $ 4,425      $ 4,167      $ 2,489     $ 1,853     $ 2,966     $ 8,592      $ 4,007  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

PTPP (1)

   $ 5,593      $ 5,763      $ 5,056     $ 6,148     $ 4,531     $ 11,356      $ 8,386  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

 

(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 Six Months Ended  

Per common share data

   June 30,
2021
    March 31,
2021
    December 31,
2020
    September 30,
2020
    June 30,
2020
    June 30,
2021
    June 30,
2020
 

Net income per common share - basic

   $ 0.70     $ 0.65     $ 0.39     $ 0.29     $ 0.47     $ 1.36     $ 0.63  

Net income per common share - diluted

   $ 0.70     $ 0.65     $ 0.39     $ 0.29     $ 0.46     $ 1.35     $ 0.62  

Dividends declared per share

   $ 0.16     $ 0.16     $ 0.15     $ 0.15     $ 0.15     $ 0.32     $ 0.30  

Book value per share (period end)

   $ 23.50     $ 22.80     $ 22.54     $ 22.27     $ 22.09     $ 23.50     $ 22.09  

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

   $ 20.82     $ 20.17     $ 19.91     $ 19.63     $ 19.43     $ 20.82     $ 19.43  

Dividends declared

   $ 1,004     $ 1,016     $ 957     $ 957     $ 956     $ 2,020     $ 1,920  

Dividend yield

     2.72     3.10     2.65     3.09     2.91     2.73     2.91

Dividend payout ratio

     22.69     24.38     38.45     51.65     32.23     23.51     47.92

Average shares outstanding - basic

     6,297,071       6,364,132       6,378,706       6,376,291       6,369,467       6,331,356       6,393,288  

Average shares outstanding - diluted

     6,312,230       6,378,493       6,397,681       6,385,765       6,388,118       6,348,345       6,412,585  

Period ending shares outstanding

     6,215,511       6,344,657       6,379,323       6,378,110       6,369,467       6,215,511       6,369,467  

Selected ratios

                                          

Return on average assets

     1.30     1.22     0.72     0.54     0.90     1.26     0.64

Return on average equity

     12.10     11.65     6.76     5.11     8.57     11.88     5.79

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

     13.65     13.17     7.64     5.79     9.76     13.41     6.59

Efficiency (1)

     57.28     57.91     59.29     51.96     61.29     57.60     62.33

Equity to assets at period end

     10.74     10.42     10.33     10.41     10.47     10.74     10.47

Noninterest expense to average assets

     0.58     0.60     0.57     0.52     0.58     1.18     1.19

 

(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 Six Months Ended  

Yields

   June 30,
2021
    March 31,
2021
    December 31,
2020
    September 30,
2020
    June 30,
2020
    June 30,
2021
    June 30,
2020
 

Interest-earning assets:

              

Loans receivable (2)

     4.43     4.48     4.28     4.48     4.53     4.45     4.73

Investment securities (2)

     3.47     3.75     3.65     3.66     3.76     3.60     3.69

Interest-earning deposits with other banks

     0.18     0.20     0.21     0.27     0.23     0.19     0.72

Total interest-earning assets

     4.05     4.11     4.00     4.23     4.27     4.08     4.47

Deposits:

              

Interest-bearing demand deposits

     0.12     0.16     0.21     0.32     0.35     0.14     0.38

Money market deposits

     0.46     0.47     0.53     0.70     0.93     0.47     1.17

Savings deposits

     0.06     0.07     0.11     0.20     0.21     0.07     0.35

Certificates of deposit

     1.19     1.28     1.56     1.77     2.00     1.24     2.06

Total interest-bearing deposits

     0.46     0.53     0.70     0.93     1.11     0.50     1.25

Non-Deposit Funding:

              

Borrowings

     1.18     1.10     0.95     0.45     0.53     1.14     0.83

Total interest-bearing liabilities

     0.47     0.54     0.71     0.91     1.07     0.50     1.23

Cost of deposits

     0.34     0.40     0.54     0.72     0.85     0.37     0.98

Cost of funds

     0.35     0.41     0.55     0.71     0.83     0.38     0.98

Net interest margin (1)

     3.72     3.73     3.49     3.57     3.49     3.72     3.56

 

(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

   June 30,
2021
    March 31,
2021
    December 31,
2020
    September 30,
2020
    June 30,
2020
 
(Dollar amounts in thousands, unaudited)           

Nonperforming loans (1)

   $ 7,760     $ 8,958     $ 7,858     $ 6,690     $ 9,803  

Other real estate owned

     7,090       7,372       7,387       7,391       687  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Nonperforming assets

   $ 14,850     $ 16,330     $ 15,245     $ 14,081     $ 10,490  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Allowance for loan losses

   $ 14,200     $ 14,122     $ 13,459     $ 11,359     $ 10,210  

Allowance for loan losses/total loans

     1.34     1.28     1.22     1.01     0.92

Net charge-offs:

          

Quarter-to-date

   $ 122     $ 37     $ —       $ 2,851     $ 34  

Year-to-date

     159       37       3,149       3,149       298  

Net charge-offs to average loans, annualized:

          

Quarter-to-date

     0.05     0.01     0.00     1.01     0.01

Year-to-date

     0.03     0.01     0.29     0.39     0.06

Nonperforming loans/total loans

     0.73     0.81     0.71     0.59     0.88

Allowance for loan losses/nonperforming loans

     182.99     157.65     171.28     169.79     104.15

Nonperforming assets/total assets

     1.09     1.18     1.10     1.03     0.78

 

(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 Six Months Ended  
(Dollar amounts in thousands,
unaudited)
   June 30,
2021
     March 31,
2021
     December 31,
2020
     September 30,
2020
     June 30,
2020
     June 30,
2021
     June 30,
2020
 

Stockholders’ Equity

   $ 146,044      $ 144,670      $ 143,810      $ 142,056      $ 140,695      $ 146,044      $ 140,695  

Less Goodwill and other intangibles

     16,635        16,715        16,795        16,878        16,961        16,635        16,961  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Tangible Common Equity

   $ 129,409      $ 127,955      $ 127,015      $ 125,178      $ 123,734      $ 129,409      $ 123,734  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Shares outstanding

     6,215,511        6,344,657        6,379,323        6,378,110        6,369,467        6,215,511        6,369,467  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Tangible book value per share

   $ 20.82      $ 20.17      $ 19.91      $ 19.63      $ 19.43      $ 20.82      $ 19.43  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

                                                                                                                                    

Reconciliation of Average Equity to Return on
Average Tangible Common Equity

   For the Three Months Ended     For the Six Months Ended  
     June 30,
2021
    March 31,
2021
    December 31,
2020
    September 30,
2020
    June 30,
2020
    June 30,
2021
    June 30,
2020
 

Average Stockholders’ Equity

   $ 146,719     $ 145,065     $ 146,374     $ 144,167     $ 139,212     $ 145,892     $ 139,287  

Less Average Goodwill and other intangibles

     16,674       16,754       16,836       16,919       17,002       16,714       17,043  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average Tangible Common Equity

   $ 130,045     $ 128,311     $ 129,538     $ 127,248     $ 122,210     $ 129,178     $ 122,244  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 4,425     $ 4,167     $ 2,489     $ 1,853     $ 2,966     $ 8,592     $ 4,007  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Return on average tangible common equity (annualized)

     13.65     13.17     7.64     5.79     9.76     13.41     6.59
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

                                                                                                                                    

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

   For the Three Months Ended      For the Six Months Ended  
     June 30,
2021
     March 31,
2021
     December 31,
2020
     September 30,
2020
     June 30,
2020
     June 30,
2021
     June 30,
2020
 

Net income

   $ 4,425      $ 4,167      $ 2,489      $ 1,853      $ 2,966      $ 8,592      $ 4,007  

Add Income Taxes

     968        896        467        295        565        1,864        639  

Add Provision for loan losses

     200        700        2,100        4,000        1,000        900        3,740  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

PTPP

   $ 5,593      $ 5,763      $ 5,056      $ 6,148      $ 4,531      $ 11,356      $ 8,386  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


MIDDLEFIELD BANC CORP.

Average Balance Sheets

(Dollar amounts in thousands, unaudited)

 

     For the Three Months Ended  
     June 30, 2021     June 30, 2020  
     Average
Balance
     Interest      Average
Yield/Cost
    Average
Balance
     Interest      Average
Yield/Cost
 

Interest-earning assets:

                

Loans receivable (3)

   $ 1,078,866      $ 11,885        4.43   $ 1,092,095      $ 12,281        4.53

Investment securities (3)

     135,338        1,012        3.47     107,765        840        3.76

Interest-earning deposits with other banks (4)

     85,245        39        0.18     58,541        34        0.23
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest-earning assets

     1,299,449        12,936        4.05     1,258,401        13,155        4.27
     

 

 

         

 

 

    

Noninterest-earning assets

     70,692             62,976        
  

 

 

         

 

 

       

Total assets

   $ 1,370,141           $ 1,321,377        
  

 

 

         

 

 

       

Interest-bearing liabilities:

                

Interest-bearing demand deposits

   $ 207,080      $ 64        0.12   $ 129,917      $ 112        0.35

Money market deposits

     185,728        212        0.46     164,434        381        0.93

Savings deposits

     253,612        38        0.06     198,967        104        0.21

Certificates of deposit

     233,930        696        1.19     350,298        1,739        2.00

Short-term borrowings

     227        —          0.00     55,973        32        0.23

Other borrowings

     13,062        39        1.20     15,615        62        1.60
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest-bearing liabilities

     893,639        1,049        0.47     915,204        2,430        1.07
     

 

 

         

 

 

    

Noninterest-bearing liabilities:

                

Noninterest-bearing demand deposits

     323,590             262,575        

Other liabilities

     6,193             4,311        

Stockholders’ equity

     146,719             139,287        
  

 

 

         

 

 

       

Total liabilities and stockholders’ equity

   $ 1,370,141           $ 1,321,377        
  

 

 

         

 

 

       

Net interest income

      $ 11,887           $ 10,725     
     

 

 

         

 

 

    

Interest rate spread (1)

           3.58           3.20

Net interest margin (2)

           3.72           3.49

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

           145.41           137.50

 

(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 $179 and $190 for the three months ended June 30, 2021 and 2020, respectively

(4)

Includes dividends received on restricted stock.


     For the Three Months Ended  
     June 30, 2021     March 31, 2021  
     Average
Balance
     Interest      Average
Yield/Cost
    Average
Balance
     Interest      Average
Yield/Cost
 

Interest-earning assets:

                

Loans receivable (3)

   $ 1,078,866      $ 11,885        4.43   $ 1,103,373      $ 12,167        4.48

Investment securities (3)

     135,338        1,012        3.47     116,510        928        3.75

Interest-earning deposits with other banks (4)

     85,245        39        0.18     93,709        47        0.20
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest-earning assets

     1,299,449        12,936        4.05     1,313,592        13,142        4.11
     

 

 

         

 

 

    

Noninterest-earning assets

     70,692             71,007        
  

 

 

         

 

 

       

Total assets

   $ 1,370,141           $ 1,384,599        
  

 

 

         

 

 

       

Interest-bearing liabilities:

                

Interest-bearing demand deposits

   $ 207,080      $ 64        0.12   $ 203,047      $ 78        0.16

Money market deposits

     185,728        212        0.46     195,275        228        0.47

Savings deposits

     253,612        38        0.06     256,151        47        0.07

Certificates of deposit

     233,930        696        1.19     269,493        852        1.28

Short-term borrowings

     227        —          0.00     111        —          0.00

Other borrowings

     13,062        39        1.20     14,258        39        1.11
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest-bearing liabilities

     893,639        1,049        0.47     938,335        1,244        0.54
     

 

 

         

 

 

    

Noninterest-bearing liabilities:

                

Noninterest-bearing demand deposits

     323,590             295,199        

Other liabilities

     6,193             6,000        

Stockholders’ equity

     146,719             145,065        
  

 

 

         

 

 

       

Total liabilities and stockholders’ equity

   $ 1,370,141           $ 1,384,599        
  

 

 

         

 

 

       

Net interest income

      $ 11,887           $ 11,898     
     

 

 

         

 

 

    

Interest rate spread (1)

           3.58           3.57

Net interest margin (2)

           3.72           3.73

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

           145.41           139.99

 

(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 $179 and $169 for the three months ended June 30, 2021, and March 31, 2021, respectively.

(4)

Includes dividends received on restricted stock.


     For the Six Months Ended  
     June 30, 2021     June 30, 2020  
     Average
Balance
     Interest      Average
Yield/Cost
    Average
Balance
     Interest      Average
Yield/Cost
 

Interest-earning assets:

                

Loans receivable (3)

   $ 1,091,119      $ 24,052        4.45   $ 1,038,064      $ 24,359        4.73

Investment securities (3)

     125,924        1,940        3.60     106,829        1,626        3.69

Interest-earning deposits with other banks (4)

     89,477        86        0.19     50,129        179        0.72
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest-earning assets

     1,306,520        26,078        4.08     1,195,022        26,164        4.47
     

 

 

         

 

 

    

Noninterest-earning assets

     70,850             63,990        
  

 

 

         

 

 

       

Total assets

   $ 1,377,370           $ 1,259,012        
  

 

 

         

 

 

       

Interest-bearing liabilities:

                

Interest-bearing demand deposits

   $ 205,063      $ 141        0.14   $ 121,804      $ 229        0.38

Money market deposits

     190,502        441        0.47     161,221        934        1.17

Savings deposits

     254,882        85        0.07     191,052        331        0.35

Certificates of deposit

     251,711        1,548        1.24     362,082        3,707        2.06

Short-term borrowings

     169        —          0.00     35,390        67        0.38

Other borrowings

     13,660        78        1.15     14,159        138        1.96
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total interest-bearing liabilities

     915,987        2,293        0.50     885,708        5,406        1.23
     

 

 

         

 

 

    

Noninterest-bearing liabilities:

                

Noninterest-bearing demand deposits

     309,395             228,993        

Other liabilities

     6,096             5,024        

Stockholders’ equity

     145,892             139,287        
  

 

 

         

 

 

       

Total liabilities and stockholders’ equity

   $ 1,377,370           $ 1,259,012        
  

 

 

         

 

 

       

Net interest income

      $ 23,785           $ 20,758     
     

 

 

         

 

 

    

Interest rate spread (1)

           3.58           3.24

Net interest margin (2)

           3.72           3.56

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

           142.64           134.92

 

(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 $347 and $379 for the six months ended June 30, 2021 and 2020, respectively.

(4)

Includes dividends received on restriced stock.

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Document and Entity Information
Jul. 16, 2021
Cover [Abstract]  
Entity Registrant Name MIDDLEFIELD BANC CORP
Amendment Flag false
Entity Central Index Key 0000836147
Document Type 8-K
Document Period End Date Jul. 16, 2021
Entity Incorporation State Country Code OH
Entity File Number 001-36613
Entity Tax Identification Number 34-1585111
Entity Address, Address Line One 15985 East High Street
Entity Address, City or Town Middlefield
Entity Address, State or Province OH
Entity Address, Postal Zip Code 44062
City Area Code 440
Local Phone Number 632-1666
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Security 12b Title Common Stock, no par value
Trading Symbol MBCN
Security Exchange Name NASDAQ
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