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 17% Increase in 3rd Quarter Earnings
MIDDLEFIELD, OHIO, October 19, 2004 ♦ ♦ ♦ ♦ Middlefield Banc Corp. (Pink Sheets: MBCN) today reported net earnings for the three months ended September 30, 2004 of $821,791, or $0.66 per diluted share. The third quarter 2004 earnings represent an increase of 17% over the $702,187, or $0.57 per diluted share, in net earnings that the company recorded for the quarter ended September 30, 2003.
For the nine months ended September 30, 2004, Middlefield Banc Corp. recorded net income of $2,415,567, or $1.95 per diluted share, an increase of 22.6% over the $1,969,881, or $1.61 per diluted share, in net income for the first nine months of 2003.
The key ratios for the company for the quarter and the first nine months of 2004 reflect positively in comparison to the results posted for the same periods of 2003. Returns on average assets (ROA) for the quarter and year-to-date were 1.15% and 1.17%, respectively, as compared to 1.10% and 1.08% a year ago. Return on average equity (ROE) for the third quarter of 2004, as well as for the nine-month period was 13.19%. The quarterly figure for 2003 was 12.29%, while the first nine months of 2003 showed a return of 11.74%.
Total assets ended the third quarter of 2004 at $289.2 million, an increase of 10.8% over the $261.0 million in total assets recorded at September 30, 2003, and 3.1% over the $280.5 million in assets on the books at June 30, 2004. Net loans at September 30, 2004 were $206.6 million, up 10.9% over the $186.3 million in net loans at September 30, 2003. The investment portfolio at September 30, 2004, stood at $55.8 million, an increase of 6.0% from the September 30, 2003 balance of $52.7 million.
The level of deposits, on a year-to-year comparison, increased 8.98%. Total deposits at September 30, 2004 were $238.7 million. This figure as of September 30, 2003, was $219.1 million. The company also increased its use of the Federal Home Loan Bank as a funding source. At the quarter-end, total borrowings from this provider were $24.0 million, up from$17.9 million a year earlier.
Commenting on Middlefield Banc Corp.’s third quarter results, President and CEO Thomas G. Caldwell said, “In a broad sense, we are pleased with our performance. Our earnings growth has been very satisfactory, while our asset levels approximate those within our financial plan. We are also very pleased with the growth in our non-interest income. This is primarily the result of the overdraft privilege program that we initiated earlier this year.”
“The level of our non-performing loans is higher than what we have seen in recent periods. However, this exposure is concentrated in a few credits that are well secured,” Caldwell continued. “We have, however, been able to maintain a relatively low level of loss within our loan portfolio, with our charge-offs for the year-to-date being only $5,722. On an annualized basis, this equates to 0.01% of our average loan totals.”
For the three months ended September 30, 2004, non-interest income grew 29% from the prior year’s comparable period. This variance on a nine-month basis was 35.3%. The primary components of the overall increase, in addition to periodic changes in the level of service charges, 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 third quarter was $1.8 million, representing a 13.3% increase over the $1.6 million recorded in the third quarter of 2003. During the quarter the banking subsidiary upgraded the capabilities of its Internet banking service, which contributed to a part of the increase. Additionally, normal salary costs, increased health insurance costs, and increased marketing costs impacted the results for 2004.
Middlefield Banc Corp. is a financial holding company headquartered in Middlefield, Ohio. Its sole subsidiary, The Middlefield Banking Company, 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
(Unaudited)
September 2004 | June 2004 | September 2003 | ||||||||||
Earnings: | ||||||||||||
Net interest income | $ | 2,522,105 | $ | 2,477,236 | $ | 2,270,202 | ||||||
Provision for loan losses | 51,000 | 30,000 | 105,000 | |||||||||
Non-interest income | 484,244 | 485,889 | 375,364 | |||||||||
Security (losses) gains | 0 | 0 | 0 | |||||||||
Non-interest expense | 1,803,558 | 1,682,607 | 1,592,379 | |||||||||
Federal income taxes | 330,000 | 342,000 | 246,000 | |||||||||
Net income | $ | 821,791 | $ | 908,518 | $ | 702,187 | ||||||
Per share: | ||||||||||||
Basic earnings | $ | 0.67 | $ | 0.74 | $ | 0.58 | ||||||
Diluted earnings | 0.66 | 0.74 | 0.57 | |||||||||
Common dividends | 0.22 | 0.21 | 0.20 | |||||||||
Book value | 20.67 | 19.75 | 18.79 | |||||||||
Weighted average shares outstanding: | ||||||||||||
Basic | 1,232,047 | 1,228,039 | 1,219,685 | |||||||||
Diluted | 1,239,837 | 1,235,829 | 1,223,250 | |||||||||
Period end balance sheet: | ||||||||||||
Assets | $ | 289,214,138 | $ | 280,479,893 | $ | 260,968,090 | ||||||
Securities | 55,840,461 | 56,189,796 | 52,676,332 | |||||||||
Total loans | 209,257,288 | 203,103,305 | 188,947,859 | |||||||||
Allowance for loan losses | 2,626,548 | 2,595,791 | 2,605,767 | |||||||||
Deposits | 238,739,091 | 236,038,287 | 219,070,209 | |||||||||
Total stockholders’ equity | 25,509,396 | 24,315,949 | 22,979,984 | |||||||||
Total capital ratio | 8.82 | % | 8.67 | % | 8.81 | % | ||||||
Average balance sheet: | ||||||||||||
Assets | $ | 284,847,016 | $ | 276,994,334 | $ | 255,426,983 | ||||||
Earning assets | 269,119,544 | 260,052,997 | 238,564,234 | |||||||||
Loans | 206,931,239 | 201,722,951 | 185,887,150 | |||||||||
Deposits | 239,030,560 | 232,269,556 | 214,615,616 | |||||||||
Stockholders’ equity | 24,912,672 | 24,328,300 | 22,845,964 | |||||||||
Key ratios (%): | ||||||||||||
Return on average assets (ROA) | 1.15 | % | 1.31 | % | 1.10 | % | ||||||
Return on average stockholders’ equity (ROE) | 13.19 | % | 14.94 | % | 12.29 | % | ||||||
Net interest margin | 3.86 | % | 3.90 | % | 3.91 | % | ||||||
Net overhead | 1.96 | % | 1.84 | % | 2.04 | % | ||||||
Efficiency ratio | 59.99 | % | 56.78 | % | 60.19 | % | ||||||
Credit quality: | ||||||||||||
Non-accrual loans | $ | 454,959 | $ | 432,308 | $ | 334,081 | ||||||
Restructured loans | 0 | 0 | 0 | |||||||||
90 day past due and accruing | 773,162 | 654,944 | 0 | |||||||||
Non-performing loans | 1,228,121 | 1,087,252 | 334,081 | |||||||||
Other real estate owned | 0 | 0 | 0 | |||||||||
Non-performing assets | $ | 1,228,121 | $ | 1,087,252 | $ | 334,081 | ||||||
Charge-offs | $ | 28,321 | $ | 10,340 | $ | 28,321 | ||||||
Recoveries | 16,222 | 30,680 | 16,222 | |||||||||
Net charge-offs (recoveries) | $ | 12,099 | $ | (20,340 | ) | $ | 12,099 | |||||
Allowance for loan losses as a percent of period-end loans (%) | 1.26 | % | 1.28 | % | 1.38 | % | ||||||
Net charge-offs (annualized) as a percent of average loans (%) | 0.02 | % | -0.04 | % | 0.01 | % | ||||||
Non-performing loans as a percent of loans | 0.59 | % | 0.54 | % | 0.18 | % | ||||||
Non-performing assets as a percent of assets | 0.42 | % | 0.39 | % | 0.13 | % |
Middlefield Banc Corp.
Financial Highlights
Year-to-Date Data
(Unaudited)
September 2004 | June 2004 | September 2003 | ||||||||||
Earnings: | ||||||||||||
Net interest income | $ | 7,415,198 | $ | 4,893,093 | $ | 6,582,110 | ||||||
Provision for loan losses | 111,000 | 60,000 | 315,000 | |||||||||
Non-interest income | 1,366,852 | 882,608 | 1,009,502 | |||||||||
Security gains | 0 | 0 | 542 | |||||||||
Non-interest expense | 5,267,483 | 3,463,925 | 4,516,345 | |||||||||
Income taxes | 988,000 | 658,000 | 790,928 | |||||||||
Net income | $ | 2,415,567 | $ | 1,593,776 | $ | 1,969,881 | ||||||
Per share: | ||||||||||||
Basic earnings | $ | 1.97 | $ | 1.30 | $ | 1.62 | ||||||
Diluted earnings | 1.95 | 1.29 | 1.61 | |||||||||
Common dividends | 0.64 | 0.42 | 0.58 | |||||||||
Book value | 20.67 | 19.75 | 18.79 | |||||||||
Weighted average shares outstanding: | ||||||||||||
Basic | 1,228,292 | 1,226,394 | 1,217,715 | |||||||||
Diluted | 1,235,595 | 1,233,697 | 1,220,786 | |||||||||
Period end balance sheet: | ||||||||||||
Assets | $ | 289,214,138 | $ | 280,479,893 | $ | 260,968,090 | ||||||
Securities | 55,840,461 | 56,189,797 | 52,676,333 | |||||||||
Total loans | 209,257,288 | 203,103,305 | 188,947,859 | |||||||||
Allowance for loan losses | 2,626,548 | 2,595,791 | 2,605,767 | |||||||||
Deposits | 238,739,091 | 236,038,287 | 219,070,209 | |||||||||
Total stockholders’ equity | 25,509,396 | 24,315,949 | 22,979,984 | |||||||||
Total capital ratio | 8.82 | % | 8.67 | % | 8.81 | % | ||||||
Average balance sheet: | ||||||||||||
Assets | $ | 276,453,880 | $ | 271,424,671 | $ | 244,288,115 | ||||||
Earning assets | 260,362,611 | 255,319,528 | 230,588,121 | |||||||||
Loans | 201,473,297 | 198,714,337 | 181,176,430 | |||||||||
Deposits | 231,442,081 | 227,606,146 | 201,055,436 | |||||||||
Stockholders’ equity | 24,417,577 | 23,910,132 | 22,366,253 | |||||||||
Key ratios (%): | ||||||||||||
Return on average assets (ROA) | 1.17 | % | 1.17 | % | 1.08 | % | ||||||
Return on average stockholders’ equity (ROE) | 13.19 | % | 13.33 | % | 11.74 | % | ||||||
Net interest margin | 3.93 | % | 3.94 | % | 3.91 | % | ||||||
Net overhead | 2.00 | % | 2.02 | % | 2.03 | % | ||||||
Efficiency ratio | 59.98 | % | 59.97 | % | 59.49 | % | ||||||
Credit quality: | ||||||||||||
Non-accrual loans | $ | 454,959 | $ | 432,308 | $ | 334,081 | ||||||
Restructured loans | 0 | 0 | 0 | |||||||||
90 day past due and accruing | 773,162 | 654,944 | 0 | |||||||||
Non-performing loans | 1,228,121 | 1,087,252 | 334,081 | |||||||||
Other real estate owned | 0 | 0 | 0 | |||||||||
Non-performing assets | $ | 1,228,121 | $ | 1,087,252 | $ | 334,081 | ||||||
Charge-offs | $ | 59,738 | $ | 21,959 | $ | 56,641 | ||||||
Recoveries | 54,016 | 36,480 | 46,923 | |||||||||
Net charge-offs (recoveries) | $ | 5,722 | $ | (14,521 | ) | $ | 9,718 | |||||
Allowance for loan losses as a percent of period-end loans (%) | 1.26 | % | 1.28 | % | 1.38 | % | ||||||
Net charge-offs (annualized) as a percent of average loans (%) | 0.01 | % | -0.01 | % | 0.01 | % | ||||||
Non-performing loans as a percent of loans | 0.59 | % | 0.54 | % | 0.18 | % | ||||||
Non-performing assets as a percent of assets | 0.42 | % | 0.39 | % | 0.13 | % |
Middlefield Banc Corp.
Consolidated Statements of Income
Quarterly Data
(Unaudited)
September 2004 | June 2004 | September 2003 | ||||||||||
INTEREST INCOME | ||||||||||||
Interest and fees on loans | $ | 3,432,153 | $ | 3,385,891 | $ | 3,270,175 | ||||||
Interest bearing deposits in other institutions | 1,538 | 1,662 | 3,850 | |||||||||
Investment securities: | ||||||||||||
Taxable | 354,392 | 339,046 | 270,921 | |||||||||
Tax-exempt interest | 166,645 | 137,608 | 121,503 | |||||||||
Federal funds sold | 10,884 | 12,055 | 20,836 | |||||||||
Dividends on FHLB stock | 12,964 | 12,935 | 12,988 | |||||||||
Total interest income | 3,978,576 | 3,889,197 | 3,700,273 | |||||||||
INTEREST EXPENSE | ||||||||||||
Deposits | 1,246,617 | 1,208,525 | 1,227,318 | |||||||||
Short-term borrowings | 304 | 181 | 365 | |||||||||
Other borrowings | 209,550 | 203,255 | 202,388 | |||||||||
Total interest expense | 1,456,471 | 1,411,961 | 1,430,071 | |||||||||
Net interest income | 2,522,105 | 2,477,236 | 2,270,202 | |||||||||
Provision for loan losses | 51,000 | 30,000 | 105,000 | |||||||||
Net interest income after provision for loan losses | 2,471,105 | 2,447,236 | 2,165,202 | |||||||||
NON-INTEREST INCOME | ||||||||||||
Service charges on deposit accounts | 371,495 | 381,121 | 269,757 | |||||||||
Earnings on bank-owned life insurance | 53,114 | 47,860 | 67,019 | |||||||||
Other operating income | 59,635 | 56,908 | 38,588 | |||||||||
Total non-interest income | 484,244 | 485,889 | 375,364 | |||||||||
NON-INTEREST EXPENSE | ||||||||||||
Salaries and employee benefits | 941,353 | 790,815 | 829,874 | |||||||||
Occupancy expense | 114,691 | 118,839 | 105,248 | |||||||||
Equipment expense | 94,948 | 99,274 | 89,649 | |||||||||
Data processing costs | 125,077 | 84,616 | 93,601 | |||||||||
Ohio state franchise tax | 82,500 | 82,500 | 75,000 | |||||||||
Other expense | 444,989 | 506,563 | 399,007 | |||||||||
Total non-interest expense | 1,803,558 | 1,682,607 | 1,592,379 | |||||||||
Income before income taxes | 1,151,791 | 1,250,518 | 948,187 | |||||||||
Income taxes | 330,000 | 342,000 | 246,000 | |||||||||
Net income | $ | 821,791 | $ | 908,518 | $ | 702,187 | ||||||
NET INCOME PER COMMON SHARE: | ||||||||||||
Basic | $ | 0.67 | $ | 0.74 | $ | 0.58 | ||||||
Diluted | $ | 0.66 | $ | 0.74 | $ | 0.57 |
Middlefield Banc Corp.
Consolidated Statements of Income
Year-to-Date Data
(Unaudited)
September 2004 | June 2004 | September 2003 | ||||||||||
INTEREST INCOME | ||||||||||||
Interest and fees on loans | $ | 10,115,762 | $ | 6,683,609 | $ | 9,609,355 | ||||||
Interest bearing deposits in other institutions | 3,539 | 2,001 | 15,670 | |||||||||
Investment securities: | ||||||||||||
Taxable | 1,050,915 | 696,523 | 855,382 | |||||||||
Tax-exempt interest | 429,556 | 262,911 | 354,595 | |||||||||
Federal funds sold | 28,046 | 17,162 | 40,049 | |||||||||
Dividends on FHLB stock | 38,883 | 25,919 | 38,843 | |||||||||
Total interest income | 11,666,701 | 7,688,125 | 10,913,894 | |||||||||
INTEREST EXPENSE | ||||||||||||
Deposits | 3,642,941 | 2,396,324 | 3,709,505 | |||||||||
Short-term borrowings | 1,143 | 839 | 3,704 | |||||||||
Other borrowings | 607,419 | 397,869 | 618,575 | |||||||||
Total interest expense | 4,251,503 | 2,795,032 | 4,331,784 | |||||||||
Net interest income | 7,415,198 | 4,893,093 | 6,582,110 | |||||||||
Provision for loan losses | 111,000 | 60,000 | 315,000 | |||||||||
Net interest income after provision for loan losses | 7,304,198 | 4,833,093 | 6,267,110 | |||||||||
NON-INTEREST INCOME | ||||||||||||
Service charges on deposit accounts | 1,034,095 | 662,600 | 760,318 | |||||||||
Security gains (losses) | 0 | 0 | 542 | |||||||||
Earnings on bank-owned life insurance | 167,970 | 114,856 | 135,305 | |||||||||
Other operating income | 164,787 | 105,152 | 113,879 | |||||||||
Total non-interest income | 1,366,852 | 882,608 | 1,010,044 | |||||||||
NON-INTEREST EXPENSE | ||||||||||||
Salaries and employee benefits | 2,652,971 | 1,711,618 | 2,287,264 | |||||||||
Net occupancy | 378,011 | 263,320 | 310,292 | |||||||||
Equipment | 288,208 | 193,260 | 227,261 | |||||||||
Data processing costs | 339,038 | 213,961 | 281,031 | |||||||||
Ohio state franchise tax | 247,500 | 165,000 | 225,050 | |||||||||
Other expense | 1,361,755 | 916,766 | 1,185,447 | |||||||||
Total non-interest expense | 5,267,483 | 3,463,925 | 4,516,345 | |||||||||
Income before federal income taxes | 3,403,567 | 2,251,776 | 2,760,809 | |||||||||
Income tax expense | 988,000 | 658,000 | 790,928 | |||||||||
Net income | $ | 2,415,567 | $ | 1,593,776 | $ | 1,969,881 | ||||||
NET INCOME PER COMMON SHARE: | ||||||||||||
Basic | $ | 1.97 | $ | 1.30 | $ | 1.62 | ||||||
Diluted | $ | 1.95 | $ | 1.29 | $ | 1.61 |
Middlefield Banc Corp.
Consolidated Balance Sheets
(Unaudited)
September 2004 | June 2004 | September 2003 | ||||||||||
ASSETS | ||||||||||||
Cash and due from banks | $ | 7,324,873 | $ | 4,900,236 | $ | 4,216,941 | ||||||
Federal funds sold and interest-bearing deposits in other institutions | 4,032,575 | 4,221,065 | 2,967,618 | |||||||||
Securities: | ||||||||||||
Available for sale | 55,278,450 | 54,901,165 | 49,911,627 | |||||||||
Held to maturity | 562,011 | 747,567 | 2,764,706 | |||||||||
Total securities | 55,840,461 | 55,648,732 | 52,676,333 | |||||||||
Loans: | 209,257,288 | 203,103,305 | 188,947,859 | |||||||||
Less: Allowance for loan losses | 2,626,548 | 2,595,791 | 2,605,767 | |||||||||
Net loans | 206,630,740 | 200,507,514 | 186,342,092 | |||||||||
Premises and equipment | 6,668,043 | 6,704,260 | 6,913,457 | |||||||||
Bank-owned life insurance | 5,370,355 | 5,317,241 | 5,135,305 | |||||||||
Accrued interest and other assets | 3,347,091 | 3,180,845 | 2,716,344 | |||||||||
Total assets | $ | 289,214,138 | $ | 280,479,893 | $ | 260,968,090 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
Deposits: | ||||||||||||
Demand — non-interest bearing | $ | 35,110,530 | $ | 34,973,397 | $ | 29,986,047 | ||||||
Demand — interest bearing | 23,595,367 | 22,299,891 | 22,749,710 | |||||||||
Savings | 75,110,539 | 75,001,599 | 64,722,200 | |||||||||
Time deposits | 104,922,655 | 103,763,401 | 101,612,252 | |||||||||
Total deposits | 238,739,091 | 236,038,288 | 219,070,209 | |||||||||
Short-term borrowings | 102,881 | 115,102 | 399,176 | |||||||||
Other borrowings | 23,957,754 | 19,077,999 | 17,863,260 | |||||||||
Accrued interest and other liabilities | 905,016 | 932,556 | 655,461 | |||||||||
Total liabilities | 263,704,742 | 256,163,945 | 237,988,106 | |||||||||
Stockholders’ equity: | ||||||||||||
Common stock, no par value; 5,000,000 shares authorized | 10,385,960 | 10,286,211 | 8,134,763 | |||||||||
Retained earnings | 16,715,668 | 16,164,824 | 16,315,403 | |||||||||
Accumulated other comprehensive income (loss) | 152,677 | (390,178 | ) | 274,727 | ||||||||
Treasury stock | (1,744,909 | ) | (1,744,909 | ) | (1,744,909 | ) | ||||||
Total stockholders’ equity | 25,509,396 | 24,315,948 | 22,979,984 | |||||||||
Total liabilities and stockholders’ equity | $ | 289,214,138 | $ | 280,479,893 | $ | 260,968,090 | ||||||
Miscellaneous data: | ||||||||||||
Common shares issued | 1,289,602 | 1,286,792 | 1,278,390 | |||||||||
Treasury shares | 55,309 | 55,309 | 55,309 |