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 47.7% Increase in 2nd Quarter Earnings
MIDDLEFIELD, OHIO, July 19, 2004wwww Middlefield Banc Corp. (Pink Sheets: MBCN) today reported net earnings for the three months ended June 30, 2004 of $908,518, or $0.74 per diluted share. The second quarter 2004 earnings represent an increase of 47.7% over the $614,950, or $0.51 per diluted share, in net earnings that the company recorded for the quarter ended June 30, 2003.
For the six months ended June 30, 2004, Middlefield Banc Corp. recorded net earnings of $1,593,776, or $1.29 per diluted share, an increase of 25.7% over the $1,267,696, or $1.04 per diluted share, in net earnings for the first six months of 2003.
The company’s total assets ended the second quarter of 2004 at $280.5 million, an increase of 12.2% over the $249.9 million in total assets recorded at June 30, 2003, and 2.5% over the $273.5 million in assets on the books at March 31, 2004. Net loans at June 30, 2004 were $200.5 million, up 11.4% over the $179.9 million in net loans at June 30, 2003. The investment portfolio at June 30, 2004, stood at $55.6 million, an increase of 37.4% from the June 30, 2003 balance of $40.5 million.
Funding for the asset growth was centered in a 14.5% increase in deposit totals in the year-to-year comparison. At mid-year 2004, deposits were $236.0 million, which was $29.9 million more that June 30, 2003’s $206.1 million. Other funding sources, including Federal Home Loan Bank borrowings experienced a decline in the mid-year comparison.
Return on average assets (ROA) was 1.31% and 1.17%, respectively, for the second quarter and year-to-date 2004, as compared to 1.01% and 1.07% for both periods of 2003. Return on average equity (ROE) was 14.94% for the quarter and 13.33% for the first six months of 2004. This compares to 2003 figures of 11.78% and 11.75%. The company’s
net interest margin for the quarter and year-to-date are 3.90% and 3.94%, respectively. These compare to 3.84% for both periods in 2003.
In reviewing Middlefield Banc Corp.’s results for the first six months, President and CEO Thomas G. Caldwell said, “We are generally pleased with the results to this point in the year. Although our total loan growth slowed in the second quarter, our focus on net interest margin, while dealing with pressure from low interest rates, benefited our bottom line. While our level of non-performing assets has risen slightly, this is attributable to a few distinct lending relationships that are being addressed. Our recoveries have once again outpaced our charge-offs and are reflective of our resolution efforts.”
Commenting on the outlook for Middlefield Banc Corp., Caldwell noted, “A key focus for us is building our revenue areas not directly related to net interest income and expansion into market areas having high potential. While doing this, we remain focused on controlling our non-interest expenses. We are also pleased that loan demand started to increase near the end of the second quarter. Coupled with the higher interest rate environment, our outlook for the remainder of 2004 is positive.”
Non-interest income showed a 35.7% increase for the quarter and a 39.2% upward movement for the first six months. In addition to normal service charge increases, the primary components of the overall increase were the income from bank-owned life insurance as well as the implementation of an overdraft privilege program during the second quarter of 2004.
Non-interest expense for the second quarter was $1.7 million, nominally above the $1.6 million recorded for the comparable quarter of 2003. The six-month figures for 2004 and 2003 are $3.5 million and $2.9 million, respectively. In addition to normal salary adjustments, the increase was driven by higher health insurance costs, the addition of a new branch office during the second quarter of 2003, and increased marketing as the bank subsidiary expands market presence.
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)
June 2004 | March 2004 | June 2003 | ||||||||||
Earnings: | ||||||||||||
Net interest income | $ | 2,477,236 | $ | 2,415,857 | $ | 2,175,419 | ||||||
Provision for loan losses | 30,000 | 30,000 | 105,000 | |||||||||
Non-interest income | 485,889 | 396,719 | 358,102 | |||||||||
Security (losses) gains | 0 | 0 | 0 | |||||||||
Non-interest expense | 1,682,607 | 1,781,318 | 1,613,208 | |||||||||
Federal income taxes | 342,000 | 316,000 | 200,363 | |||||||||
Net income | $ | 908,518 | $ | 685,258 | $ | 614,950 | ||||||
Per share: | ||||||||||||
Basic earnings | 0.74 | 0.56 | 0.51 | |||||||||
Diluted earnings | 0.74 | 0.56 | 0.51 | |||||||||
Common dividends | $ | 257,818 | $ | 257,002 | $ | 231,025 | ||||||
Book value | 19.80 | 19.88 | 18.71 | |||||||||
Weighted average shares outstanding: | ||||||||||||
Basic | 1,228,039 | 1,224,453 | 1,214,057 | |||||||||
Diluted | 1,235,829 | 1,231,269 | 1,217,239 | |||||||||
Period end balance sheet: | ||||||||||||
Assets | $ | 280,479,893 | $ | 273,508,774 | $ | 249,885,875 | ||||||
Securities | 56,189,796 | 51,084,891 | 40,507,881 | |||||||||
Total loans | 203,103,305 | 201,925,285 | 182,418,551 | |||||||||
Allowance for loan losses | 2,595,791 | 2,545,450 | 2,512,866 | |||||||||
Deposits | 236,038,287 | 228,482,609 | 206,115,632 | |||||||||
Total shareholders’ equity | 24,315,949 | 24,340,651 | 22,709,943 | |||||||||
Total capital ratio | 8.67 | % | 8.90 | % | 9.09 | % | ||||||
Average balance sheet: | ||||||||||||
Assets | $ | 276,994,334 | $ | 267,939,010 | $ | 244,241,700 | ||||||
Earning assets | 260,052,997 | 249,542,182 | 228,518,674 | |||||||||
Loans | 201,722,951 | 195,705,724 | 181,863,235 | |||||||||
Deposits | 232,269,556 | 222,942,737 | 200,987,836 | |||||||||
Shareholders’ equity | 24,328,300 | 23,922,157 | 20,882,567 |
Key ratios (%): | �� | |||||||||||
Return on average assets (ROA) | 1.31 | % | 1.02 | % | 1.01 | % | ||||||
Return on average shareholders’ equity (ROE) | 14.94 | % | 11.46 | % | 11.78 | % | ||||||
Net interest margin | 3.90 | % | 4.00 | % | 3.84 | % | ||||||
Net overhead | 1.84 | % | 2.22 | % | 2.20 | % | ||||||
Efficiency ratio | 56.78 | % | 63.33 | % | 63.67 | % | ||||||
Credit quality: | ||||||||||||
Non-accrual loans | $ | 432,308 | $ | 263,000 | $ | 509,545 | ||||||
Restructured loans | 0 | 0 | 0 | |||||||||
90 day past due and accruing | 654,944 | 516,000 | 0 | |||||||||
Non-performing loans | 1,087,252 | 779,000 | 509,545 | |||||||||
Other real estate owned | 0 | 0 | 0 | |||||||||
Non-performing assets | $ | 1,087,252 | $ | 779,000 | $ | 509,545 | ||||||
Charge-offs | $ | 10,340 | $ | 11,620 | $ | 10,710 | ||||||
Recoveries | 30,680 | 5,800 | 28,965 | |||||||||
Net charge-offs (recoveries) | $ | (20,340 | ) | $ | 5,820 | $ | (18,255 | ) | ||||
Allowance for loan losses as a percent of period-end loans (%) | 1.28 | % | 1.26 | % | 1.38 | % | ||||||
Net charge-offs (annualized) as a percent of average loans (%) | -0.02 | % | 0.01 | % | -0.02 | % | ||||||
Non-performing loans as a percent of loans | 0.54 | % | 0.39 | % | 0.28 | % | ||||||
Non-performing assets as a percent of assets | 0.39 | % | 0.28 | % | 0.20 | % | ||||||
Middlefield Banc Corp. | ||||||||||||
Financial Highlights | ||||||||||||
Year-to-Date Data (Dollars in thousands, except per share) | ||||||||||||
June 2004 | March 2004 | June 2003 | ||||||||||
Earnings: | ||||||||||||
Net interest income | $ | 4,893,093 | $ | 2,415,857 | $ | 4,311,909 | ||||||
Provision for loan losses | 60,000 | 30,000 | 210,000 | |||||||||
Non-interest income | 882,608 | 396,719 | 634,139 | |||||||||
Security (losses) gains | 0 | 0 | 542 | |||||||||
Non-interest expense | 3,463,925 | 1,781,318 | 2,923,966 | |||||||||
Federal income taxes | 658,000 | 316,000 | 544,928 | |||||||||
Net income | $ | 1,593,776 | $ | 685,258 | $ | 1,267,696 | ||||||
Per share: | ||||||||||||
Basic earnings | 1.30 | 0.56 | 1.05 | |||||||||
Diluted earnings | 1.29 | 0.56 | 1.04 | |||||||||
Common dividends | $ | 514,820 | $ | 257,002 | $ | 462,334 | ||||||
Book value | 19.83 | 19.88 | 18.71 | |||||||||
Weighted average shares outstanding: | ||||||||||||
Basic | 1,226,394 | 1,224,453 | 1,213,997 | |||||||||
Diluted | 1,233,697 | 1,231,269 | 1,216,821 | |||||||||
Period end balance sheet: | ||||||||||||
Assets | $ | 280,479,893 | $ | 273,508,774 | $ | 249,885,875 | ||||||
Securities | 56,189,797 | 51,084,891 | 40,507,882 | |||||||||
Total loans | 203,103,305 | 201,925,285 | 182,418,551 | |||||||||
Allowance for loan losses | 2,595,791 | 2,545,450 | 2,512,866 | |||||||||
Deposits | 236,038,287 | 228,482,609 | 206,115,632 | |||||||||
Total shareholders’ equity | 24,315,949 | 24,340,651 | 22,709,943 | |||||||||
Total capital ratio | 8.67 | % | 8.90 | % | 9.09 | % | ||||||
Average balance sheet: | ||||||||||||
Assets | $ | 271,424,671 | $ | 267,939,010 | $ | 237,073,107 | ||||||
Earning assets | 255,319,528 | 249,542,182 | 225,224,016 | |||||||||
Loans | 198,714,337 | 195,705,724 | 178,782,048 | |||||||||
Deposits | 227,606,146 | 222,942,737 | 194,162,968 | |||||||||
Shareholders’ equity | 23,910,132 | 23,922,157 | 21,581,058 | |||||||||
Key ratios (%): | ||||||||||||
Return on average assets (ROA) | 1.17 | % | 1.02 | % | 1.07 | % | ||||||
Return on average shareholders’ equity (ROE) | 13.33 | % | 11.46 | % | 11.75 | % | ||||||
Net interest margin | 3.94 | % | 4.00 | % | 3.84 | % | ||||||
Net overhead | 2.02 | % | 2.22 | % | 2.03 | % | ||||||
Efficiency ratio | 59.97 | % | 63.33 | % | 59.11 | % | ||||||
Credit quality: | ||||||||||||
Non-accrual loans | $ | 432,308 | $ | 263,000 | $ | 509,545 | ||||||
Restructured loans | 0 | 0 | 0 | |||||||||
90 day past due and accruing | 654,944 | 516,000 | 0 | |||||||||
Non-performing loans | 1,087,252 | 779,000 | 509,545 | |||||||||
Other real estate owned | 0 | 0 | 0 | |||||||||
Non-performing assets | $ | 1,087,252 | $ | 779,000 | $ | 509,545 | ||||||
Charge-offs | $ | 21,959 | $ | 11,620 | $ | 28,319 | ||||||
Recoveries | 36,480 | 5,800 | 30,700 | |||||||||
Net charge-offs (recoveries) | $ | (14,521 | ) | $ | 5,820 | $ | (2,381 | ) | ||||
Allowance for loan losses as a percent of period-end loans (%) | 1.28 | % | 1.26 | % | 1.38 | % | ||||||
Net charge-offs (annualized) as a percent of average loans (%) | -0.01 | % | 0.01 | % | 0.00 | % | ||||||
Non-performing loans as a percent of loans | 0.54 | % | 0.39 | % | 0.28 | % | ||||||
Non-performing assets as a percent of assets | 0.39 | % | 0.28 | % | 0.20 | % |
Consolidated Statements of Income
Quarterly Data
June 2004 | March 2004 | June 2003 | ||||||||||
INTEREST INCOME | ||||||||||||
Loans (including fees) | $ | 3,385,891 | $ | 3,297,718 | $ | 3,209,192 | ||||||
Deposits in other institutions | 1,662 | 339 | 4,719 | |||||||||
Securities: | ||||||||||||
Taxable | 339,046 | 357,477 | 275,853 | |||||||||
Exempt from federal income taxes | 137,608 | 125,303 | 113,502 | |||||||||
Federal funds sold and other temp. investments | 12,055 | 5,107 | 9,906 | |||||||||
Dividends on FHLB stock | 12,935 | 12,984 | 12,926 | |||||||||
Total interest income | 3,889,197 | 3,798,928 | 3,626,098 | |||||||||
INTEREST EXPENSE | ||||||||||||
Deposits | 1,208,525 | 1,187,799 | 1,236,828 | |||||||||
Federal funds purchased and securities sold under agreement to repurchase | 181 | 658 | 1,049 | |||||||||
Federal Home Loan Bank advances | 203,255 | 194,614 | 212,802 | |||||||||
Total interest expense | 1,411,961 | 1,383,071 | 1,450,679 | |||||||||
Net interest income | 2,477,236 | 2,415,857 | 2,175,419 | |||||||||
Provision for loan losses | 30,000 | 30,000 | 105,000 | |||||||||
Net interest income after provision for loan losses | 2,447,236 | 2,385,857 | 2,070,419 | |||||||||
NON-INTEREST INCOME | ||||||||||||
Service charges on deposit accounts | 381,121 | 281,479 | 251,910 | |||||||||
Security gains (losses) | 0 | 0 | 0 | |||||||||
Other operating income | 104,768 | 115,240 | 106,192 | |||||||||
Total non-interest income | 485,889 | 396,719 | 358,102 | |||||||||
NON-INTEREST EXPENSE | ||||||||||||
Salaries and employee benefits | 790,815 | 920,803 | 810,919 | |||||||||
Net occupancy | 118,839 | 144,481 | 106,492 | |||||||||
Equipment | 99,274 | 93,986 | 57,586 | |||||||||
Data processing costs | 84,616 | 129,345 | 70,958 | |||||||||
Ohio state franchise tax | 82,500 | 82,500 | 75,000 | |||||||||
Other expense | 506,563 | 410,203 | 492,253 | |||||||||
Total non-interest expense | 1,682,607 | 1,781,318 | 1,613,208 | |||||||||
Income before federal income taxes | 1,250,518 | 1,001,258 | 815,313 | |||||||||
Income tax expense | 342,000 | 316,000 | 200,363 | |||||||||
Net income | $ | 908,518 | $ | 685,258 | $ | 614,950 | ||||||
NET INCOME PER COMMON SHARE: | ||||||||||||
Basic | $ | 0.74 | $ | 0.56 | $ | 0.48 | ||||||
Diluted | $ | 0.74 | $ | 0.56 | $ | 0.48 |
Middlefield Banc Corp.
Consolidated Statements of
Income
Year-to-Date Data
(Dollars in thousands,
except per share data)
June 2004 | March 2004 | June 2003 | ||||||||||
INTEREST INCOME | ||||||||||||
Loans (including fees) | $ | 6,683,609 | $ | 3,297,718 | $ | 6,339,180 | ||||||
Deposits in other institutions | 2,001 | 339 | 11,820 | |||||||||
Securities: | ||||||||||||
Taxable | 696,523 | 357,477 | 584,461 | |||||||||
Exempt from federal income taxes | 262,911 | 125,303 | 233,092 | |||||||||
Federal funds sold and other temp, investments | 17,162 | 5,107 | 19,213 | |||||||||
Dividends on FHLB stock | 25,919 | 12,984 | 25,855 | |||||||||
Total interest income | 7,688,125 | 3,798,928 | 7,213,621 | |||||||||
INTEREST EXPENSE | ||||||||||||
Deposits | 2,396,324 | 1,187,799 | 2,482,187 | |||||||||
Federal funds purchased and securities sold under agreement to repurchase | 839 | 658 | 3,339 | |||||||||
Federal Home Loan Bank advances | 397,869 | 194,614 | 416,186 | |||||||||
Total interest expense | 2,795,032 | 1,383,071 | 2,901,712 | |||||||||
Net interest income | 4,893,093 | 2,415,857 | 4,311,909 | |||||||||
Provision for loan losses | 60,000 | 30,000 | 210,000 | |||||||||
Net interest income after provision for loan losses | 4,833,093 | 2,385,857 | 4,101,909 | |||||||||
NON-INTEREST INCOME | ||||||||||||
Service charges on deposit accounts | 662,600 | 281,479 | 490,561 | |||||||||
Security gains (losses) | 0 | 0 | 542 | |||||||||
Other operating income | 220,008 | 115,240 | 143,578 | |||||||||
Total non-interest income | 882,608 | 396,719 | 634,681 | |||||||||
NON-INTEREST EXPENSE | ||||||||||||
Salaries and employee benefits | 1,711,618 | 920,803 | 1,457,390 | |||||||||
Net occupancy | 263,320 | 144,481 | 205,044 | |||||||||
Equipment | 193,260 | 93,986 | 137,612 | |||||||||
Data processing costs | 213,961 | 129,345 | 187,430 | |||||||||
Ohio state franchise tax | 165,000 | 82,500 | 150,050 | |||||||||
Other expense | 916,766 | 410,203 | 786,440 | |||||||||
Total non-interest expense | 3,463,925 | 1,781,318 | 2,923,966 | |||||||||
Income before federal income taxes | 2,251,776 | 1,001,258 | 1,812,624 | |||||||||
Income tax expense | 658,000 | 316,000 | 544,928 | |||||||||
Net income | $ | 1,593,776 | $ | 685,258 | $ | 1,267,696 | ||||||
NET INCOME PER COMMON SHARE: | ||||||||||||
Basic | $ | 1.30 | $ | 0.56 | $ | 1.05 | ||||||
Diluted | $ | 1.29 | $ | 0.56 | $ | 1.04 |
Consolidated Balance Sheets
(Dollars in thousands)
June 2004 | March 2004 | June 2003 | ||||||||||
ASSETS | ||||||||||||
Cash and due from banks | $ | 4,900,236 | $ | 2,894,259 | $ | 6,102,703 | ||||||
Federal funds sold and other temp. investments. | 4,221,065 | 5,505,000 | 8,809,402 | |||||||||
Securities: | ||||||||||||
Available for sale | 54,901,165 | 49,772,770 | 37,241,937 | |||||||||
Held to maturity | 747,567 | 1,312,121 | 3,265,945 | |||||||||
Total securities | 55,648,732 | 51,084,891 | 40,507,882 | |||||||||
Loans: | 203,103,305 | 201,925,285 | 182,418,551 | |||||||||
Less: reserve for loan losses | 2,595,791 | 2,545,450 | 2,512,866 | |||||||||
Net loans | 200,507,514 | 199,379,835 | 179,905,685 |
Premises and equipment | 6,704,260 | 6,706,848 | 6,908,111 | |||||||||
Accrued interest receivable and other assets | 8,498,086 | 7,937,941 | 7,652,092 | |||||||||
Total assets | $ | 280,479,893 | $ | 273,508,774 | $ | 249,885,875 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
Deposits: | ||||||||||||
Demand — non-interest bearing | $ | 34,973,397 | $ | 29,889,636 | $ | 29,595,597 | ||||||
Demand — interest bearing | 22,299,891 | 25,397,464 | 21,096,468 | |||||||||
Savings | 75,001,599 | 71,017,095 | 54,867,549 | |||||||||
Time deposits | 103,763,401 | 102,178,414 | 100,556,018 | |||||||||
Total deposits | 236,038,288 | 228,482,609 | 206,115,632 | |||||||||
Federal funds purchased and securities sold under agreements to repurchase | 115,102 | 436 | 399,176 | |||||||||
Accrued expenses and other liabilities | 932,556 | 957,511 | 667,174 | |||||||||
Federal Home Loan Bank advances | 19,077,999 | 19,727,567 | 19,993,950 | |||||||||
Total liabilities | 256,163,945 | 249,168,123 | 227,175,932 | |||||||||
Shareholders’ equity: | ||||||||||||
Common stock, no par value; 5,000,000 shares authorized | 10,286,211 | 10,153,493 | 8,006,055 | |||||||||
Retained earnings | 16,164,824 | 15,514,124 | 15,856,470 | |||||||||
Accumulated other comprehensive income | (390,178 | ) | 417,943 | 592,327 | ||||||||
Treasury stock | (1,744,909 | ) | (1,744,909 | ) | (1,744,909 | ) | ||||||
Total shareholders’ equity | 24,315,948 | 24,340,651 | 22,709,943 | |||||||||
Total liabilities and shareholders’ equity | $ | 280,479,893 | $ | 273,508,774 | $ | 249,885,875 | ||||||
Miscellaneous data: | ||||||||||||
Common shares issued | 1,286,792 | 1,282,732 | 1,273,918 | |||||||||
Treasury shares | 55,309 | 55,309 | 55,309 | |||||||||
Bank owned life insurance (in other assets) | $ | 5,317,241 | $ | 5,269,381 | $ | 5,068,286 |