EXHIBIT 99
[Middlefield Banc Corp Logo]
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 Third Quarter Performance
MIDDLEFIELD, OHIO, October 21, 2003 #### Middlefield Banc Corp. (Pink Sheets: MBCN) reported third quarter 2003 net income of $702,185, up 9.8% from the $639,357 earned during the same period last year. Year-to-date earnings were $1,969,881, representing an increase of 11.9% over the net income reported for the first nine months of 2002. Diluted earnings per share for the third quarter and for the year-to-date are $0.60 and $1.70. These compare to the similar 2002 figures of $0.55 and $1.52, respectively.
The Company’s key ratios for the quarter and for the first nine months of 2003 reflect mixed results in comparison to the same periods last year. Returns on average assets (ROA) for the quarter and year-to-date were 1.10% and 1.08%, respectively, compared to 1.16% and 1.12% a year ago. Returns on average equity (ROE) were improved at 12.29% for the quarter and 11.74% year-to-date compared to 12.21% and 11.48% respectively last year. The Company’s efficiency ratio for the quarter was 60.19% and 59.49% for the first nine months of the year. The comparable ratios for 2002 were 55.61% and 57.79%, respectively. Middlefield Banc Corp.’s net interest margin was 3.91% for the quarter, up slightly from 2002’s 3.88%. For the nine month periods, the 2003 result is 3.91%, down slightly from the 4.01% recorded in 2002.
“During the first nine months of this year, we have opened a new banking office in Orwell and have begun offering a full range of financial services in conjunction with UVEST Financial Services®. Although these moves have negatively impacted our efficiency ratio, we do anticipate that the impact of both of these actions will be positive in the near term,” commented Thomas G. Caldwell, President and CEO. “The improved return on equity for both reporting periods with the resilience of our net interest margin for the third quarter are very gratifying.”
Non-interest income for the quarter increased 31.5% from the amount reported for the third quarter of 2002. A similar improvement was recorded for the three quarters of
2003, as non-interest income was 21.6% higher than the same period of last year. Contributing to these results were an overall increase in fee income related to deposit accounts as well as the earnings from bank-owned life insurance.
Non-interest expense for the quarter was $1.6 million, compared to $1.3 million for the same period of 2002. The comparable nine month figures are $4.5 million and $3.9 million respectively. The increased level of non-interest expense for 2003 reflects the opening of a new banking office, the addition of financial services, increased health care costs, and the introduction of a new logo and marketing image for the company and its subsidiary bank.
“Our new banking office in Orwell is well exceeding both loan and deposit projections,” noted Donald L. Stacy, Treasurer and Chief Financial Officer. “Our new logo and marketing campaign have been very well received. They serve to portray our organization as the dynamic financial services company that we have become. We anticipate that our affiliation with UVEST Financial Services® will have a positive improvement on our bottom line as it continues to mature.”
Total assets increased 16.1% over the prior year, ending the third quarter of 2003 at $261.0 million as compared to $224.8 million at September 30, 2002. Net loans at September 30, 2003, were $186.3 million, up 11.6% from September 30, 2002. The investment portfolio also experienced growth between the two periods, being up 34.2% over the 2002 balance. Deposit totals were $219.1 million at the end of the third quarter of 2003. This is an increase of 17.7% from the level at mid-year 2002.
Credit quality remained a strong focus for the company. For the year-to-date, the company has experienced net charge-offs of only $9,718. Non-performing loan and non-performing asset levels, at September 30, 2003, were 0.18% and 0.13%, respectively. The comparable figures at the same point in 2002 were 0.20% and 0.15%. The Company’s loan loss reserve at the end of the quarter was 1.38% of period-end loans, 6 basis points stronger than a year ago. President and Chief Executive Officer Thomas G. Caldwell stated, “We have added extra focus to the quality of our loan portfolio. We believe that our underwriting standards and our attention to our local communities and customers have permitted us to keep our exposures at reasonable levels.”
Caldwell continued, “Our commitment to our shareholders remains strong. Our continuing goal is to provide them with a fair return, while generating conservative growth. We firmly believe that our approach to being a full service community bank will position us well to continue this trend.”
Middlefield Banc Corp. and The Middlefield Banking Company are headquartered in Middlefield, Ohio. The bank operates full service banking centers and a UVEST Financial Services® brokerage office serving 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)
SEPTEMBER 2003 | JUNE 2003 | SEPTEMBER 2002 | ||||||||||||||
EARNINGS: | ||||||||||||||||
Net interest income | $ | 2,270,201 | $ | 2,175,419 | $ | 1,994,884 | ||||||||||
Provision for loan losses | 105,000 | 105,000 | 75,000 | |||||||||||||
Non-interest income | 375,363 | 358,102 | 285,499 | |||||||||||||
Security (losses) gains | 0 | 0 | 0 | |||||||||||||
Non-interest expense | 1,592,379 | 1,613,208 | 1,268,026 | |||||||||||||
Federal income taxes | 246,000 | 200,363 | 298,000 | |||||||||||||
NET INCOME | $ | 702,185 | $ | 614,950 | $ | 639,357 | ||||||||||
PER SHARE: | ||||||||||||||||
Basic earnings | $ | 0.61 | $ | 0.53 | $ | 0.55 | ||||||||||
Diluted earnings | 0.60 | 0.53 | 0.55 | |||||||||||||
Common dividends | 0.21 | 0.20 | 0.19 | |||||||||||||
Book value | 19.83 | 19.61 | 18.36 | |||||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||||||||||||||
Basic | 1,158,971 | 1,156,245 | 1,156,181 | |||||||||||||
Diluted | 1,162,366 | 1,159,275 | 1,159,277 | |||||||||||||
PERIOD END BALANCE SHEET: | ||||||||||||||||
Assets | $ | 260,968,090 | $ | 249,885,875 | $ | 224,843,468 | ||||||||||
Securities | 52,676,332 | 40,507,882 | 39,249,739 | |||||||||||||
Total loans | 188,947,859 | 182,418,551 | 169,158,698 | |||||||||||||
Allowance for loan losses | 2,605,767 | 2,512,866 | 2,226,813 | |||||||||||||
Deposits | 219,070,209 | 206,115,632 | 186,082,858 | |||||||||||||
Total shareholders’ equity | 22,979,984 | 22,709,943 | 21,228,075 | |||||||||||||
Total capital ratio | 8.81 | % | 9.09 | % | 9.44 | % | ||||||||||
AVERAGE BALANCE SHEET: | ||||||||||||||||
Assets | $ | 255,426,983 | $ | 244,241,700 | $ | 219,729,509 | ||||||||||
Earning assets | 238,564,234 | 228,518,674 | 210,969,233 | |||||||||||||
Loans | 185,887,150 | 181,863,235 | 167,459,156 | |||||||||||||
Deposits | 214,615,616 | 200,987,836 | 182,573,110 | |||||||||||||
Shareholders’ equity | 22,845,964 | 20,882,567 | 20,950,729 | |||||||||||||
KEY RATIOS (%): | ||||||||||||||||
Return on average assets (ROA) | 1.10 | % | 1.01 | % | 1.16 | % | ||||||||||
Return on average shareholders’ equity (ROE) | 12.29 | % | 11.78 | % | 12.21 | % | ||||||||||
Net interest margin | 3.91 | % | 3.94 | % | 3.88 | % | ||||||||||
Net overhead | 2.04 | % | 2.20 | % | 1.86 | % | ||||||||||
Efficiency ratio | 60.19 | % | 63.67 | % | 55.61 | % | ||||||||||
CREDIT QUALITY: | ||||||||||||||||
Non-accrual loans | $ | 334,081 | $ | 509,545 | $ | 338,429 | ||||||||||
Restructured loans | 0 | 0 | 0 | |||||||||||||
90 day past due and accruing | 0 | 0 | 0 | |||||||||||||
Non-performing loans | 334,081 | 509,545 | 338,429 | |||||||||||||
Other real estate owned | 0 | 0 | 0 | |||||||||||||
Non-performing assets | $ | 334,081 | $ | 509,545 | $ | 338,429 | ||||||||||
Charge-offs | $ | 28,321 | $ | 10,710 | $ | 24,246 | ||||||||||
Recoveries | 16,222 | 28,965 | 14,015 | |||||||||||||
Net charge-offs (recoveries) | $ | 12,099 | $ | (18,255 | ) | $ | 10,231 | |||||||||
Allowance for loan losses as a percent of period-end loans (%) | 1.38 | % | 1.38 | % | 1.32 | % | ||||||||||
Net charge-offs (annualized) as a percent of average loans (%) | 0.01 | % | -0.04 | % | 0.01 | % | ||||||||||
Non-performing loans as a percent of loans | 0.18 | % | 0.28 | % | 0.20 | % | ||||||||||
Non-performing assets as a percent of assets | 0.13 | % | 0.20 | % | 0.15 | % |
MIDDLEFIELD BANC CORP.
FINANCIAL HIGHLIGHTS
YEAR-TO-DATE DATA
(Dollars in thousands, except per share)
SEPTEMBER 2003 | JUNE 2003 | SEPTEMBER 2002 | |||||||||||
EARNINGS: | |||||||||||||
Net interest income | $ | 6,582,110 | $ | 4,311,909 | $ | 5,872,019 | |||||||
Provision for loan losses | 315,000 | 210,000 | 225,000 | ||||||||||
Non-interest income | 1,009,502 | 634,139 | 830,291 | ||||||||||
Security (losses) gains | 542 | 542 | 0 | ||||||||||
Non-interest expense | 4,516,345 | 2,923,966 | 3,873,120 | ||||||||||
Federal income taxes | 790,928 | 544,928 | 844,000 | ||||||||||
NET INCOME | $ | 1,969,881 | $ | 1,267,696 | $ | 1,760,190 | |||||||
PER SHARE: | |||||||||||||
Basic earnings | $ | 1.70 | $ | 1.10 | $ | 1.52 | |||||||
Diluted earnings | 1.70 | 1.09 | 1.52 | ||||||||||
Common dividends | 0.61 | 0.40 | 0.55 | ||||||||||
Book value | 19.86 | 19.61 | 18.34 | ||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: | |||||||||||||
Basic | 1,157,125 | 1,156,188 | 1,157,670 | ||||||||||
Diluted | 1,160,050 | 1,158,877 | 1,159,250 | ||||||||||
PERIOD END BALANCE SHEET: | |||||||||||||
Assets | $ | 260,968,090 | $ | 249,885,875 | $ | 224,843,468 | |||||||
Securities | 52,676,333 | 40,507,882 | 39,249,739 | ||||||||||
Total loans | 188,947,859 | 182,418,551 | 169,158,698 | ||||||||||
Allowance for loan losses | 2,605,767 | 2,512,866 | 2,226,813 | ||||||||||
Deposits | 219,070,209 | 206,115,632 | 186,082,858 | ||||||||||
Total shareholders’ equity | 22,979,984 | 22,709,943 | 21,228,075 | ||||||||||
Total capital ratio | 8.81 | % | 9.09 | % | 9.44 | % | |||||||
AVERAGE BALANCE SHEET: | |||||||||||||
Assets | $ | 244,288,115 | $ | 237,073,107 | $ | 210,290,121 | |||||||
Earning assets | 230,588,121 | 225,224,016 | 200,636,435 | ||||||||||
Loans | 181,176,430 | 178,782,048 | 161,137,481 | ||||||||||
Deposits | 201,055,436 | 194,162,968 | 174,917,622 | ||||||||||
Shareholders’ equity | 22,366,253 | 21,581,058 | 20,445,132 | ||||||||||
KEY RATIOS (%): | |||||||||||||
Return on average assets (ROA) | 1.08 | % | 1.07 | % | 1.12 | % | |||||||
Return on average shareholders’ equity (ROE) | 11.74 | % | 11.75 | % | 11.48 | % | |||||||
Net interest margin | 3.91 | % | 3.94 | % | 4.01 | % | |||||||
Net overhead | 2.03 | % | 2.03 | % | 2.02 | % | |||||||
Efficiency ratio | 59.49 | % | 59.11 | % | 57.79 | % | |||||||
CREDIT QUALITY: | |||||||||||||
Non-accrual loans | $ | 334,081 | $ | 509,545 | $ | 338,429 | |||||||
Restructured loans | 0 | 0 | 0 | ||||||||||
90 day past due and accruing | 0 | 0 | 0 | ||||||||||
Non-performing loans | 334,081 | 509,545 | 338,429 | ||||||||||
Other real estate owned | 0 | 0 | 0 | ||||||||||
Non-performing assets | $ | 334,081 | $ | 509,545 | $ | 338,429 | |||||||
Charge-offs | $ | 56,641 | $ | 28,319 | $ | 115,349 | |||||||
Recoveries | 46,923 | 30,700 | 54,910 | ||||||||||
Net charge-offs (recoveries) | $ | 9,718 | $ | (2,381 | ) | $ | 60,439 | ||||||
Allowance for loan losses as a percent of period-end loans (%) | 1.38 | % | 1.38 | % | 1.32 | % | |||||||
Net charge-offs (annualized) as a percent of average loans (%) | 0.01 | % | 0.00 | % | 0.05 | % | |||||||
Non-performing loans as a percent of loans | 0.18 | % | 0.28 | % | 0.20 | % | |||||||
Non-performing assets as a percent of assets | 0.13 | % | 0.20 | % | 0.15 | % |
MIDDLEFIELD BANC CORP.
CONSOLIDATED STATEMENTS OF INCOME
QUARTERLY DATA
(Dollars in thousands, except per share data)
SEPTEMBER 2003 | JUNE 2003 | SEPTEMBER 2002 | ||||||||||||
INTEREST INCOME | ||||||||||||||
Loans (including fees) | $ | 3,270,175 | $ | 3,209,192 | $ | 3,126,762 | ||||||||
Deposits in other institutions | 3,850 | 4,719 | 36,235 | |||||||||||
Securities: | ||||||||||||||
Taxable | 270,921 | 275,853 | 307,806 | |||||||||||
Exempt from federal income taxes | 121,503 | 113,502 | 102,623 | |||||||||||
Federal funds sold and other temp investments | 20,837 | 9,906 | 0 | |||||||||||
Dividends on FHLB stock | 12,987 | 12,926 | 12,185 | |||||||||||
Total interest income | 3,700,273 | 3,626,098 | 3,585,611 | |||||||||||
INTEREST EXPENSE | ||||||||||||||
Deposits | 1,227,318 | 1,236,828 | 1,410,512 | |||||||||||
Federal funds purchased and securities sold under agreement to repurchase | 365 | 1,049 | 5,777 | |||||||||||
Federal Home Loan Bank advances | 202,389 | 212,802 | 174,438 | |||||||||||
Total interest expense | 1,430,072 | 1,450,679 | 1,590,727 | |||||||||||
Net interest income | 2,270,201 | 2,175,419 | 1,994,884 | |||||||||||
Provision for loan losses | 105,000 | 105,000 | 75,000 | |||||||||||
Net interest income after provision for loan losses | 2,165,201 | 2,070,419 | 1,919,884 | |||||||||||
NON-INTEREST INCOME | ||||||||||||||
Service charges on deposit accounts | 269,757 | 251,910 | 245,343 | |||||||||||
Security gains (losses) | 0 | 0 | 0 | |||||||||||
Other operating income | 105,606 | 106,192 | 40,156 | |||||||||||
Total non-interest income | 375,363 | 358,102 | 285,499 | |||||||||||
NON-INTEREST EXPENSE | ||||||||||||||
Salaries and employee benefits | 829,874 | 810,919 | 625,624 | |||||||||||
Net occupancy | 105,248 | 106,492 | 85,296 | |||||||||||
Equipment | 89,649 | 57,586 | 92,112 | |||||||||||
Data processing costs | 93,601 | 70,958 | 87,228 | |||||||||||
Ohio state franchise tax | 75,000 | 75,000 | 67,500 | |||||||||||
Other expense | 399,007 | 492,253 | 310,266 | |||||||||||
Total non-interest expense | 1,592,379 | 1,613,208 | 1,268,026 | |||||||||||
Income before federal income taxes | 948,185 | 815,313 | 937,357 | |||||||||||
Income tax expense | 246,000 | 200,363 | 298,000 | |||||||||||
Net income | $ | 702,185 | $ | 614,950 | �� | $ | 639,357 | |||||||
NET INCOME PER COMMON SHARE: | ||||||||||||||
Basic | $ | 0.61 | $ | 0.53 | $ | 0.55 | ||||||||
Diluted | $ | 0.60 | $ | 0.53 | $ | 0.55 |
MIDDLEFIELD BANC CORP.
CONSOLIDATED STATEMENTS OF INCOME
YEAR-TO-DATE DATA
(Dollars in thousands, except per share data)
SEPTEMBER 2003 | JUNE 2003 | SEPTEMBER 2002 | ||||||||||||
INTEREST INCOME | ||||||||||||||
Loans (including fees) | $ | 9,609,355 | $ | 6,339,180 | $ | 9,204,917 | ||||||||
Deposits in other institutions | 15,670 | 11,820 | 91,358 | |||||||||||
Securities: | ||||||||||||||
Taxable | 855,382 | 584,461 | 867,607 | |||||||||||
Exempt from federal income taxes | 354,595 | 233,092 | 313,239 | |||||||||||
Federal funds sold and other temp investments | 40,050 | 19,213 | 0 | |||||||||||
Dividends on FHLB stock | 38,842 | 25,855 | 33,953 | |||||||||||
Total interest income | 10,913,894 | 7,213,621 | 10,511,074 | |||||||||||
INTEREST EXPENSE | ||||||||||||||
Deposits | 3,709,505 | 2,482,187 | 4,155,138 | |||||||||||
Federal funds purchased and securities sold under agreement to repurchase | 3,704 | 3,339 | 9,323 | |||||||||||
Federal Home Loan Bank advances | 618,575 | 416,186 | 474,594 | |||||||||||
Total interest expense | 4,331,784 | 2,901,712 | 4,639,055 | |||||||||||
Net interest income | 6,582,110 | 4,311,909 | 5,872,019 | |||||||||||
Provision for loan losses | 315,000 | 210,000 | 225,000 | |||||||||||
Net interest income after provision for loan losses | 6,267,110 | 4,101,909 | 5,647,019 | |||||||||||
NON-INTEREST INCOME | ||||||||||||||
Service charges on deposit accounts | 760,318 | 490,561 | 712,391 | |||||||||||
Security gains (losses) | 542 | 542 | 0 | |||||||||||
Other operating income | 249,184 | 143,578 | 117,900 | |||||||||||
Total non-interest income | 1,010,044 | 634,681 | 830,291 | |||||||||||
NON-INTEREST EXPENSE | ||||||||||||||
Salaries and employee benefits | 2,287,264 | 1,457,390 | 1,877,547 | |||||||||||
Net occupancy | 310,292 | 205,044 | 260,498 | |||||||||||
Equipment | 227,261 | 137,612 | 256,487 | |||||||||||
Data processing costs | 281,031 | 187,430 | 256,359 | |||||||||||
Ohio state franchise tax | 225,050 | 150,050 | 202,550 | |||||||||||
Other expense | 1,185,447 | 786,440 | 1,019,679 | |||||||||||
Total non-interest expense | 4,516,345 | 2,923,966 | 3,873,120 | |||||||||||
Income before federal income taxes | 2,760,809 | 1,812,624 | 2,604,190 | |||||||||||
Income tax expense | 790,928 | 544,928 | 844,000 | |||||||||||
Net income | $ | 1,969,881 | $ | 1,267,696 | $ | 1,760,190 | ||||||||
NET INCOME PER COMMON SHARE: | ||||||||||||||
Basic | $ | 1.70 | $ | 1.10 | $ | 1.52 | ||||||||
Diluted | $ | 1.70 | $ | 1.09 | $ | 1.52 |
MIDDLEFIELD BANC CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
SEPTEMBER 2003 | JUNE 2003 | SEPTEMBER 2002 | |||||||||||||||
ASSETS | |||||||||||||||||
Cash and due from banks | $ | 4,216,941 | $ | 6,102,703 | $ | 4,846,689 | |||||||||||
Federal funds sold and other temp investments | 2,967,618 | 8,809,402 | 5,171,007 | ||||||||||||||
Securities: | |||||||||||||||||
Available for sale | 49,911,627 | 37,241,937 | 31,961,166 | ||||||||||||||
Held to maturity | 2,764,706 | 3,265,945 | 7,288,573 | ||||||||||||||
Total securities | 52,676,333 | 40,507,882 | 39,249,739 | ||||||||||||||
Loans: | 188,947,859 | 182,418,551 | 169,158,698 | ||||||||||||||
Less: reserve for loan losses | 2,605,767 | 2,512,866 | 2,226,813 | ||||||||||||||
Net loans | 186,342,092 | 179,905,685 | 166,931,885 | ||||||||||||||
Premises and equipment | 6,913,457 | 6,908,111 | 6,330,353 | ||||||||||||||
Bank-owned life insurance | 5,135,305 | 5,068,286 | — | ||||||||||||||
Accrued interest receivable and other assets | 2,716,344 | 2,583,806 | 2,313,795 | ||||||||||||||
Total assets | $ | 260,968,090 | $ | 249,885,875 | $ | 224,843,468 | |||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||
Deposits: | |||||||||||||||||
Demand — non-interest bearing | $ | 29,986,047 | $ | 29,595,597 | $ | 25,583,496 | |||||||||||
Demand — interest bearing | 22,749,710 | 21,096,468 | 17,475,400 | ||||||||||||||
Savings | 64,722,200 | 54,867,549 | 47,372,399 | ||||||||||||||
Time deposits | 101,612,252 | 100,556,018 | 95,651,563 | ||||||||||||||
Total deposits | 219,070,209 | 206,115,632 | 186,082,858 | ||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 399,176 | 399,176 | 955,515 | ||||||||||||||
Accrued expenses and other liabilities | 655,461 | 667,174 | 771,897 | ||||||||||||||
Federal Home Loan Bank advances | 17,863,260 | 19,993,950 | 15,805,123 | ||||||||||||||
Total liabilities | 237,988,106 | 227,175,932 | 203,615,393 | ||||||||||||||
Shareholders’ equity: | |||||||||||||||||
Common stock, no par value; 5,000,000 shares authorized | 8,134,763 | 8,006,055 | 7,820,001 | ||||||||||||||
Retained earnings | 16,315,403 | 15,856,470 | 14,541,705 | ||||||||||||||
Accumulated other comprehensive income | 274,727 | 592,327 | 465,684 | ||||||||||||||
Treasury stock | (1,744,909 | ) | (1,744,909 | ) | (1,599,315 | ) | |||||||||||
Total shareholders’ equity | 22,979,984 | 22,709,943 | 21,228,075 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 260,968,090 | $ | 249,885,875 | $ | 224,843,468 | |||||||||||
Miscellaneous data: | |||||||||||||||||
Common shares issued | 1,217,514 | 1,213,255 | 1,206,921 | ||||||||||||||
Treasury shares | 55,309 | 55,309 | 50,342 |