EXHIBIT 99
15985 East High Street
P. O. Box 35
Middlefield, Ohio 44062
Phone: 440/632-1666 FAX: 440/632-1700
www.middlefieldbank.com
PRESS RELEASE |
Contact: | James R. Heslop, 2nd | |
Executive Vice President/Chief Operating Officer | ||
(440) 632-1666 Ext. 3219 | ||
jheslop@middlefieldbank.com |
Middlefield Banc Corp. Reports Second Quarter Performance
MIDDLEFIELD, OHIO, July 17, 2003 tttt Middlefield Banc Corp. (Pink Sheets: MBCN) reported second quarter 2003 net income of $614,950, up 7.5% from the $571,923 earned during the same period last year. Year-to-date earnings were $1,267,696, representing an increase of 13.1% over the net income reported for the first six months of 2002. Diluted earnings per share for the second quarter and for the year-to-date are $0.53 and $1.09. These compare to the similar 2002 figures of $0.49 and $0.97, respectively.
Total assets increased 16.5% over the prior year, ending the second quarter of 2003 at $249.9 million as compared to $214.6 million at June 30, 2002. Net loans at June 30, 2003, were $179.9 million, up 10.9% from June 30, 2002. The investment portfolio also experienced growth between the two periods, being up 22.6% over the 2002 balance. Deposit totals were $206,115,632 at the end of the second quarter of 2003. This is an increase of 15.3% from the level at mid-year 2002.
Thomas G. Caldwell, President and CEO, in reviewing the results, noted, “We are pleased with our earnings and growth results for the first half of the year. The operating environment for financial institutions has been very difficult as interest rates remain at forty year lows. Additionally, we have added the extra expense of a new office.”
Caldwell continued, “It is our anticipation that the remainder of 2003 will find the economy continuing to improve, albeit at a sluggish rate. Our focus will be on minimizing risks while generating a proper level of income. Our commitment to our
shareholders remains to provide them with a fair return, while generating conservative growth.”
Return on average assets (ROA) were 1.01% and 1.07%, respectively for the quarter and year-to-date, as compared to 1.10% for both periods of 2002. Return on average equity was 11.78% for the quarter and 11.75% for the first six months of 2003. This compares to 2002 figures of 12.00% and 11.37%. The company’s net interest margin for the quarter and year-to-date was 3.94%, being lower for both periods than the prior year. The efficiency ratio for the first six months of 2003 was 59.11%, which was 20 basis points higher than the comparable 2002 result.
Non-interest income showed a 26.2% increase for the quarter and a 16.4% upward movement for the six-month period. In addition to an increase in service charges, the primary factor responsible for the increased non-interest income was the purchase of bank-owned life insurance at the end of the first quarter of 2003.
Non-interest expense for the quarter was $1.6 million, compared to $1.3 million for the same period last year and $2.9 million for the first half of 2003, incrementally higher than the $2.6 million reported for the year-ago period. The increase in expenses primarily reflects normal salary adjustments, an increase in health insurance costs, the addition of a new office, as well as the introduction of a new logo and marketing image for the company and its subsidiary bank.
“Although our non-interest expense totals were above the levels that have been our norm, we recognize that the new office and new image will have some near term impact,” stated Donald L. Stacy, Treasurer and Chief Financial Officer. “However, both of these initiatives have been very positively received. We are especially pleased with the reception of our new logo and marketing campaign, as they better portray our abilities to deliver financial services and the overall dynamic nature of our company.”
Credit quality remained a strong focus for the company. For the quarter and year-to-date, the company has experienced a net recovery of loans charged off. Non-performing loan and non-performing asset levels, at June 30, 2003, were 0.28% and 0.20%, respectively. The comparable figures at the same point in 2002 were 0.32% and 0.24%. President and Chief Executive Officer Thomas G. Caldwell stated, “Although our local economies have encountered some difficulties in the first half of this year, we have brought extra attention to the quality of our loan portfolio. We believe that our underwriting standards and our attention to our local communities and customers has permitted us to keep our exposures at reasonable levels.”
Middlefield Banc Corp. is a financial holding company for The Middlefield Banking Company. Full-service banking offices are located in Chardon, Garrettsville, Mantua, Middlefield, and Orwell, Ohio.
This announcement contains forward-looking statements that involve risk and uncertainties, including changes in general economic and financial market conditions and the Company’s ability to execute its business plans. Although management believes the expectations reflected in such statements are reasonable, actual results may differ materially.
Middlefield Banc Corp. | |||||||||||||
Financial Highlights | |||||||||||||
Quarterly Data | |||||||||||||
(Dollars in thousands, except per share) | |||||||||||||
June 2003 | March 2003 | June 2002 | |||||||||||
Earnings: | |||||||||||||
Net interest income | $ | 2,175,419 | $ | 2,136,490 | $ | 1,986,880 | |||||||
Provision for loan losses | 105,000 | 105,000 | 75,000 | ||||||||||
Non-interest income | 358,102 | 276,037 | 283,715 | ||||||||||
Security (losses) gains | 0 | 542 | 0 | ||||||||||
Non-interest expense | 1,613,208 | 1,310,758 | 1,345,672 | ||||||||||
Federal income taxes | 200,363 | 344,565 | 278,000 | ||||||||||
Net income | $ | 614,950 | $ | 652,746 | $ | 571,923 | |||||||
Per share: | |||||||||||||
Basic earnings | 0.53 | 0.56 | 0.49 | ||||||||||
Diluted earnings | 0.53 | 0.56 | 0.49 | ||||||||||
Common dividends | 0.20 | 0.20 | 0.18 | ||||||||||
Book value | 19.61 | 19.06 | 17.84 | ||||||||||
Weighted average shares outstanding: | |||||||||||||
Basic | 1,156,245 | 1,156,130 | 1,158,665 | ||||||||||
Diluted | 1,159,275 | 1,158,478 | 1,159,196 | ||||||||||
Period end balance sheet: | |||||||||||||
Assets | $ | 249,885,875 | $ | 240,086,224 | $ | 214,615,550 | |||||||
Securities | 40,507,882 | 42,838,505 | 33,048,781 | ||||||||||
Total loans | 182,418,551 | 179,433,233 | 164,357,893 | ||||||||||
Allowance for loan losses | 2,512,866 | 2,389,612 | 2,162,043 | ||||||||||
Deposits | 206,115,632 | 194,702,460 | 178,795,328 | ||||||||||
Total shareholders’ equity | 22,709,943 | 22,028,677 | 20,668,699 | ||||||||||
Total capital ratio | 9.09 | % | 9.18 | % | 9.63 | % | |||||||
Average balance sheet: | |||||||||||||
Assets | $ | 244,241,700 | $ | 231,844,604 | $ | 208,043,903 | |||||||
Earning assets | 228,518,674 | 222,957,446 | 198,140,772 | ||||||||||
Loans | 181,863,235 | 176,432,645 | 161,870,740 | ||||||||||
Deposits | 200,987,836 | 189,227,570 | 174,476,490 | ||||||||||
Shareholders’ equity | 20,882,567 | 21,379,486 | 19,063,491 | ||||||||||
Key ratios (%): | |||||||||||||
Return on average assets (ROA) | 1.01 | % | 1.13 | % | 1.10 | % | |||||||
Return on average shareholders’ equity (ROE) | 11.78 | % | 12.21 | % | 12.00 | % | |||||||
Net interest margin | 3.94 | % | 3.94 | % | 4.12 | % | |||||||
Net overhead | 2.20 | % | 1.86 | % | 2.14 | % | |||||||
Efficiency ratio | 63.67 | % | 54.32 | % | 59.27 | % | |||||||
Credit quality: | |||||||||||||
Non-accrual loans | $ | 509,545 | $ | 551,000 | $ | 50,000 | |||||||
Restructured loans | 0 | 0 | 0 | ||||||||||
90 day past due and accruing | 0 | 132,000 | 475,000 | ||||||||||
Non-performing loans | 509,545 | 683,000 | 525,000 | ||||||||||
Other real estate owned | 0 | 0 | 0 | ||||||||||
Non-performing assets | $ | 509,545 | $ | 683,000 | $ | 525,000 | |||||||
Charge-offs | $ | 10,710 | $ | 17,609 | $ | 18,955 | |||||||
Recoveries | 28,965 | 1,735 | 10,752 | ||||||||||
Net charge-offs (recoveries) | $ | (18,255 | ) | $ | 15,874 | $ | 8,203 | ||||||
Allowance for loan losses as a percent of period-end loans (%) | 1.38 | % | 1.33 | % | 1.32 | % | |||||||
Net charge-offs (annualized) as a percent of average loans (%) | -0.02 | % | 0.04 | % | 0.01 | % | |||||||
Non-performing loans as a percent of loans | 0.28 | % | 0.38 | % | 0.32 | % | |||||||
Non-performing assets as a percent of assets | 0.20 | % | 0.28 | % | 0.24 | % |
Middlefield Banc Corp. | |||||||||||||
Financial Highlights | |||||||||||||
Year-to-Date Data | |||||||||||||
(Dollars in thousands, except per share) | |||||||||||||
June 2003 | March 2003 | June 2002 | |||||||||||
Earnings: | |||||||||||||
Net interest income | $ | 4,311,909 | $ | 2,136,490 | $ | 3,877,135 | |||||||
Provision for loan losses | 210,000 | 105,000 | 150,000 | ||||||||||
Non-interest income | 634,139 | 276,037 | 544,792 | ||||||||||
Security (losses) gains | 542 | 542 | 0 | ||||||||||
Non-interest expense | 2,923,966 | 1,310,758 | 2,605,094 | ||||||||||
Federal income taxes | 544,928 | 344,565 | 546,000 | ||||||||||
Net income | $ | 1,267,696 | $ | 652,746 | $ | 1,120,833 | |||||||
Per share: | |||||||||||||
Basic earnings | 1.10 | 0.56 | 0.97 | ||||||||||
Diluted earnings | 1.09 | 0.56 | 0.97 | ||||||||||
Common dividends | 0.40 | 0.20 | 0.35 | ||||||||||
Book value | 19.61 | 19.06 | 17.84 | ||||||||||
Weighted average shares outstanding: | |||||||||||||
Basic | 1,156,188 | 1,156,130 | 1,158,427 | ||||||||||
Diluted | 1,158,877 | 1,158,478 | 1,159,249 | ||||||||||
Period end balance sheet: | |||||||||||||
Assets | $ | 249,885,875 | $ | 240,086,224 | $ | 214,615,550 | |||||||
Securities | 40,507,882 | 42,838,505 | 33,048,781 | ||||||||||
Total loans | 182,418,551 | 179,433,233 | 164,357,893 | ||||||||||
Allowance for loan losses | 2,512,866 | 2,389,612 | 2,162,043 | ||||||||||
Deposits | 206,115,632 | 194,702,460 | 178,795,328 | ||||||||||
Total shareholders’ equity | 22,709,943 | 22,028,677 | 20,668,699 | ||||||||||
Total capital ratio | 9.09 | % | 9.18 | % | 9.63 | % | |||||||
Average balance sheet: | |||||||||||||
Assets | $ | 237,073,107 | $ | 231,844,604 | $ | 203,625,183 | |||||||
Earning assets | 225,224,016 | 222,957,446 | 194,858,603 | ||||||||||
Loans | 178,782,048 | 176,432,645 | 157,931,380 | ||||||||||
Deposits | 194,162,968 | 189,227,570 | 171,040,454 | ||||||||||
Shareholders’ equity | 21,581,058 | 21,379,486 | 19,722,881 | ||||||||||
Key ratios (%): | |||||||||||||
Return on average assets (ROA) | 1.07 | % | 1.13 | % | 1.10 | % | |||||||
Return on average shareholders’ equity (ROE) | 11.75 | % | 12.21 | % | 11.37 | % | |||||||
Net interest margin | 3.94 | % | 3.94 | % | 4.08 | % | |||||||
Net overhead | 2.03 | % | 1.86 | % | 2.11 | % | |||||||
Efficiency ratio | 59.11 | % | 54.32 | % | 58.91 | % | |||||||
Credit quality: | |||||||||||||
Non-accrual loans | $ | 509,545 | $ | 551,000 | $ | 50,000 | |||||||
Restructured loans | 0 | 0 | 0 | ||||||||||
90 day past due and accruing | 0 | 132,000 | 475,000 | ||||||||||
Non-performing loans | 509,545 | 683,000 | 525,000 | ||||||||||
Other real estate owned | 0 | 0 | 0 | ||||||||||
Non-performing assets | $ | 509,545 | $ | 683,000 | $ | 525,000 | |||||||
Charge-offs | $ | 28,319 | $ | 17,609 | $ | 91,103 | |||||||
Recoveries | 30,700 | 1,735 | 40,894 | ||||||||||
Net charge-offs (recoveries) | $ | (2,381 | ) | $ | 15,874 | $ | 50,209 | ||||||
Allowance for loan losses as a percent of period-end loans (%) | 1.38 | % | 1.33 | % | 1.32 | % | |||||||
Net charge-offs (annualized) as a percent of average loans (%) | 0.00 | % | 0.04 | % | 0.06 | % | |||||||
Non-performing loans as a percent of loans | 0.28 | % | 0.38 | % | 0.32 | % | |||||||
Non-performing assets as a percent of assets | 0.20 | % | 0.28 | % | 0.24 | % |
Middlefield Banc Corp. | ||||||||||||||
Consolidated Statements of Income | ||||||||||||||
Quarterly Data | ||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||
June 2003 | March 2003 | June 2002 | ||||||||||||
INTEREST INCOME | ||||||||||||||
Loans (including fees) | $ | 3,209,192 | $ | 3,129,988 | $ | 3,078,538 | ||||||||
Deposits in other institutions | 4,719 | 7,101 | 13,627 | |||||||||||
Securities: | ||||||||||||||
Taxable | 275,853 | 308,608 | 296,483 | |||||||||||
Exempt from federal income taxes | 113,502 | 119,590 | 101,085 | |||||||||||
Federal funds sold and other temp. investments | 9,906 | 9,307 | 0 | |||||||||||
Dividends on FHLB stock | 12,926 | 12,929 | 9,407 | |||||||||||
Total interest income | 3,626,098 | 3,587,523 | 3,499,140 | |||||||||||
INTEREST EXPENSE | ||||||||||||||
Deposits | 1,236,828 | 1,245,359 | 1,356,054 | |||||||||||
Federal funds purchased and securities sold under agreement to repurchase | 1,049 | 2,290 | 2,274 | |||||||||||
Federal Home Loan Bank advances | 212,802 | 203,384 | 153,932 | |||||||||||
Total interest expense | 1,450,679 | 1,451,033 | 1,512,260 | |||||||||||
Net interest income | 2,175,419 | 2,136,490 | 1,986,880 | |||||||||||
Provision for loan losses | 105,000 | 105,000 | 75,000 | |||||||||||
Net interest income after provision for loan losses | 2,070,419 | 2,031,490 | 1,911,880 | |||||||||||
NON-INTEREST INCOME | ||||||||||||||
Service charges on deposit accounts | 251,910 | 238,651 | 244,138 | |||||||||||
Security gains (losses) | 0 | 542 | 0 | |||||||||||
Other operating income | 106,192 | 37,386 | 39,577 | |||||||||||
Total non-interest income | 358,102 | 276,579 | 283,715 | |||||||||||
NON-INTEREST EXPENSE | ||||||||||||||
Salaries and employee benefits | 810,919 | 646,471 | 659,858 | |||||||||||
Net occupancy | 106,492 | 98,552 | 87,960 | |||||||||||
Equipment | 57,586 | 80,026 | 81,167 | |||||||||||
Data processing costs | 70,958 | 116,472 | 84,163 | |||||||||||
Ohio state franchise tax | 75,000 | 75,050 | 67,500 | |||||||||||
Other expense | 492,253 | 294,187 | 365,024 | |||||||||||
Total non-interest expense | 1,613,208 | 1,310,758 | 1,345,672 | |||||||||||
Income before federal income taxes | 815,313 | 997,311 | 849,923 | |||||||||||
Income tax expense | 200,363 | 344,565 | 278,000 | |||||||||||
Net income | $ | 614,950 | $ | 652,746 | $ | 571,923 | ||||||||
NET INCOME PER COMMON SHARE: | ||||||||||||||
Basic | $ | 0.53 | $ | 0.56 | $ | 0.49 | ||||||||
Diluted | $ | 0.53 | $ | 0.56 | $ | 0.49 |
Middlefield Banc Corp. | ||||||||||||||
Consolidated Statements of Income | ||||||||||||||
Year-to-Date Data | ||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||
June 2003 | March 2003 | June 2002 | ||||||||||||
INTEREST INCOME | ||||||||||||||
Loans (including fees) | $ | 6,339,180 | $ | 3,129,988 | $ | 6,078,155 | ||||||||
Deposits in other institutions | 11,820 | 7,101 | 30,063 | |||||||||||
Securities: | ||||||||||||||
Taxable | 584,461 | 308,608 | 581,569 | |||||||||||
Exempt from federal income taxes | 233,092 | 119,590 | 210,616 | |||||||||||
Federal funds sold and other temp. investments | 19,213 | 9,307 | 0 | |||||||||||
Dividends on FHLB stock | 25,855 | 12,929 | 25,060 | |||||||||||
Total interest income | 7,213,621 | 3,587,523 | 6,925,463 | |||||||||||
INTEREST EXPENSE | ||||||||||||||
Deposits | 2,482,187 | 1,245,359 | 2,744,626 | |||||||||||
Federal funds purchased and securities sold under agreement to repurchase | 3,339 | 2,290 | 3,546 | |||||||||||
Federal Home Loan Bank advances | 416,186 | 203,384 | 300,156 | |||||||||||
Total interest expense | 2,901,712 | 1,451,033 | 3,048,328 | |||||||||||
Net interest income | 4,311,909 | 2,136,490 | 3,877,135 | |||||||||||
Provision for loan losses | 210,000 | 105,000 | 150,000 | |||||||||||
Net interest income after provision for loan losses | 4,101,909 | 2,031,490 | 3,727,135 | |||||||||||
NON-INTEREST INCOME | ||||||||||||||
Service charges on deposit accounts | 490,561 | 238,651 | 467,048 | |||||||||||
Security gains (losses) | 542 | 542 | 0 | |||||||||||
Other operating income | 143,578 | 37,386 | 77,744 | |||||||||||
Total non-interest income | 634,681 | 276,579 | 544,792 | |||||||||||
NON-INTEREST EXPENSE | ||||||||||||||
Salaries and employee benefits | 1,457,390 | 646,471 | 1,251,923 | |||||||||||
Net occupancy | 205,044 | 98,552 | 175,202 | |||||||||||
Equipment | 137,612 | 80,026 | 164,375 | |||||||||||
Data processing costs | 187,430 | 116,472 | 169,131 | |||||||||||
Ohio state franchise tax | 150,050 | 75,050 | 135,050 | |||||||||||
Other expense | 786,440 | 294,187 | 709,413 | |||||||||||
Total non-interest expense | 2,923,966 | 1,310,758 | 2,605,094 | |||||||||||
Income before federal income taxes | 1,812,624 | 997,311 | 1,666,833 | |||||||||||
Income tax expense | 544,928 | 344,565 | 546,000 | |||||||||||
Net income | $ | 1,267,696 | $ | 652,746 | $ | 1,120,833 | ||||||||
NET INCOME PER COMMON SHARE: | ||||||||||||||
Basic | $ | 1.10 | $ | 0.56 | $ | 0.97 | ||||||||
Diluted | $ | 1.09 | $ | 0.56 | $ | 0.97 |
Middlefield Banc Corp. | ||||||||||||||
Consolidated Balance Sheets | ||||||||||||||
(Dollars in thousands) | ||||||||||||||
June 2003 | March 2003 | June 2002 | ||||||||||||
ASSETS | ||||||||||||||
Cash and due from banks | $ | 6,102,703 | $ | 5,408,657 | $ | 6,268,312 | ||||||||
Federal funds sold and other temp. investments | 8,809,402 | 574,402 | 4,299,066 | |||||||||||
Securities: | ||||||||||||||
Available for sale | 37,241,937 | 38,050,327 | 25,423,981 | |||||||||||
Held to maturity | 3,265,945 | 4,788,178 | 7,624,800 | |||||||||||
Total securities | 40,507,882 | 42,838,505 | 33,048,781 | |||||||||||
Loans: | 182,418,551 | 179,433,233 | 164,357,893 | |||||||||||
Less: reserve for loan losses | 2,512,866 | 2,389,612 | 2,162,043 | |||||||||||
Net loans | 179,905,685 | 177,043,621 | 162,195,850 | |||||||||||
Premises and equipment | 6,908,111 | 6,720,069 | 6,328,866 | |||||||||||
Accrued interest receivable and other assets | 7,652,092 | 7,500,970 | 2,474,675 | |||||||||||
Total assets | $ | 249,885,875 | $ | 240,086,224 | $ | 214,615,550 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||
Deposits: | ||||||||||||||
Demand — non-interest bearing | $ | 29,595,597 | $ | 25,281,315 | $ | 26,039,948 | ||||||||
Demand — interest bearing | 21,096,468 | 23,300,237 | 16,968,316 | |||||||||||
Savings | 54,867,549 | 51,377,777 | 46,806,973 | |||||||||||
Time deposits | 100,556,018 | 94,743,131 | 88,980,091 | |||||||||||
Total deposits | 206,115,632 | 194,702,460 | 178,795,328 | |||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 399,176 | 2,389,576 | 1,095,161 | |||||||||||
Accrued expenses and other liabilities | 667,174 | 782,594 | 907,721 | |||||||||||
Federal Home Loan Bank advances | 19,993,950 | 20,182,917 | 13,148,641 | |||||||||||
Total liabilities | 227,175,932 | 218,057,547 | 193,946,851 | |||||||||||
Shareholders’ equity: | ||||||||||||||
Common stock, no par value; 5,000,000 shares authorized | 8,006,055 | 7,944,216 | 7,735,893 | |||||||||||
Retained earnings | 15,856,470 | 15,472,547 | 14,116,847 | |||||||||||
Accumulated other comprehensive income | 592,327 | 356,823 | 292,399 | |||||||||||
Treasury stock | (1,744,909 | ) | (1,744,909 | ) | (1,476,440 | ) | ||||||||
Total shareholders’ equity | 22,709,943 | 22,028,677 | 20,668,699 | |||||||||||
Total liabilities and shareholders’ equity | $ | 249,885,875 | $ | 240,086,224 | $ | 214,615,550 | ||||||||
Miscellaneous data: | ||||||||||||||
Common shares issued | 1,213,255 | 1,211,162 | 1,204,473 | |||||||||||
Treasury shares | 55,309 | 55,309 | 45,722 | |||||||||||
Bank owned life insurance (in other assets) | $ | 5,068,286 | $ | 5,000,000 | $ | 0 |