EXHIBIT 99
![(MIDDLEFIELD BANC CORP. LOGO)](https://capedge.com/proxy/8-K/0000950152-07-003689/l25880al2588000.gif)
15985 East High Street
P. O. Box 35
Middlefield, Ohio 44062
Phone: 440/632-1666 FAX: 440/632-1700
www.middlefieldbank.com
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 First Quarter 2007 Earnings
MIDDLEFIELD, OHIO, April 26, 2007uuuu Middlefield Banc Corp. (Pink Sheets: MBCN) today announced first quarter 2007 net income of $752,000, a decline of 8.0% from the $818,000 reported for the first quarter of 2006. Diluted earnings per share were $0.52, down 8.4% from first quarter 2006 earnings of $0.57 per share.
“We had anticipated that earnings would be lower than last year in the first quarter,” commented President and Chief Executive Officer Thomas G. Caldwell. “The reduction in our net interest margin was the primary factor in the decline and was directly the result of strong pricing competition, higher deposit costs, and a general slowdown in economic activity.”
Mr. Caldwell continued, “Our net income has also been impacted by anticipated increases in non-interest expenses. The first three months of 2007 marked the first full quarter of operation for our Newbury banking center, as well as our Cortland loan production office. Although having a negative earnings impact, we are pleased that these facilities have broadened the coverage of our market.”
The company’s total assets ended the first quarter of 2007 at $357.2 million, an increase of 14.3% over the $340.9 million in total assets reported at December 31, 2006. Net loans at March 31, 2007, were $252.0 million, up $5.6 million, or 2.3%, over the $246.3 million reported at December 31, 2006. Total deposits at March 31, 2007, were $287.5 million, or 6.1% greater than the deposit level of $271.1 million at December 31, 2006.
Annualized returns on average equity (“ROE”) and average assets (“ROA”) for the first quarter of 2007 were 9.98% and 0.87%, respectively. The comparable results for the first quarter of 2006 were 11.79% and 1.05%.
Highlights for the first quarter of 2007 include:
• | Net interest income was $2.61 million, a decrease of 2.8% from the $2.69 million reported for the comparable period of 2006. The net interest margin was 3.46% for the first quarter of 2007, down from the 3.89% reported for the first quarter of 2006. The decline is primarily attributable to higher deposit costs associated with the current interest rate environment. Deposit growth at the bank has primarily been in products such as time deposits and money market accounts, which generally higher interest costs than other deposit alternatives. The bank offered a special money market promotion during the first quarter of 2007, which was tied to the grand opening of the Newbury banking office. | ||
• | Non-interest income increased $72,000 for the three-month period of 2007over the comparable 2006 period. This increase of 13.1% was primarily the result of higher service charge revenue associated with an increase in the number of deposit accounts, expanded ATM/Debit card usage, and an increase in revenue from investment services. Earnings on bank-owned life insurance was $19,000 higher during the first quarter of 2007 than the same period of 2006. | ||
• | Non-interest expense for the first quarter of 2007 was 11.7%, or $238,000, higher than the first quarter of 2006. Increases in salary and employee benefits of $110,000, occupancy expense of $15,000, and equipment expense of $30,000, were largely attributable to the opening of the Newbury banking office and the Cortland loan production office. Other expense items contributing to the increase were franchise tax, certain maintenance contracts, and increased ATM costs. | ||
• | Total deposit growth for the first quarter of 2007 was $16.5 million. With promotional efforts directed to the bank’s money market account, deposits in those accounts increased $11.6 million, while time deposits increased $5.6 million and interest-bearing deposit accounts grew $1.5 million. Offsetting this growth were declines in non-interest bearing deposits of $1.6 million and savings accounts of $0.6 million. Net loans at March 31, 2007, stood at $252.0 million, reflecting an increase of $5.6 million for the quarter. Increases were seen in all loan categories with the exception of installment loans. | ||
• | Provision for loan losses was $45,000 for the 2007 first quarter, which was in line with the company’s plan. While lower than the $75,000 provision during the first quarter of 2006, this amount was in keeping with the company’s intention to reduce the unallocated portion of its loan loss reserve. The provision is maintained at a level to absorb management’s estimate of probable inherent credit losses within the bank’s loan portfolio. At March 31, 2007, the allowance for loan losses as a percentage of total loans was 1.09%, which was down from the 1.22% reported at March 31, 2006. The ratio of non-performing loans to total loans stood at 0.67% at March 31, 2007. This was a reduction of 23.0% from the March 31, 2006 ratio of 0.87%. | ||
• | Stockholders’ equity at March 31, 2007, was $31.1 million, or 8.71% of total assets. Book value as of March 31, 2007 was $21.76. This was an increase of $2.16 over the March 31, 2006 book value. |
• | In the first quarter of 2007, Middlefield paid a cash dividend of $0.24 per share. This represents an increase of 7.1% over the cash dividend paid during the first quarter of 2006. The 2006 cash dividend amount has been adjusted to reflect the 5% stock dividend paid by the company during the fourth quarter of 2006. |
“Although our earnings results are not in line with what we have historically reported, they do exceed our plan for the first quarter of 2007, “ commented Donald L. Stacy, Chief Financial Officer and Treasurer of Middlefield Banc Corp. “The continued nature of the yield curve, as well as market pricing, has worked to compress our net interest margin. The additional overhead associated with our expansion is integral to our long-term growth efforts and is, we believe, within reasonable expectations.”
“Our anticipation is that these factors will continue to impact our earnings level as we move further into 2007,” Stacy continued. “We remain committed, however, to the short-term expense necessary to provide long-term reward for our shareholders.”
Middlefield Banc Corp. is a financial holding company headquartered in Middlefield, Ohio. Its subsidiary, The Middlefield Banking Company, operates full service banking centers and a UVEST Financial Services® brokerage office serving Chardon, Garrettsville, Mantua, Middlefield, Newbury, and Orwell, as well as a loan production office in Cortland, Ohio. On April 19, 2007, Middlefield Banc Corp. completed its acquisition of Emerald Bank, headquartered in Dublin, Ohio. Further information is available atwww.middlefieldbank.com.
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.
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET
March 31, | December 31 | |||||||
2007 | 2006 | |||||||
ASSETS | ||||||||
Cash and due from banks | $ | 6,811,047 | $ | 6,893,148 | ||||
Federal funds sold | 8,200,000 | 6,200,000 | ||||||
Interest-bearing deposits in other institutions | 552,487 | 546,454 | ||||||
Cash and cash equivalents | 15,563,534 | 13,639,602 | ||||||
Investment securities available for sale | 70,619,693 | 63,048,135 | ||||||
Investment securities held to maturity (estimated market value of $127,663 and $134,306) | 119,899 | 125,853 | ||||||
Loans | 254,776,398 | 249,190,534 | ||||||
Less allowance for loan losses | 2,787,810 | 2,848,887 | ||||||
Net loans | 251,988,588 | 246,341,647 | ||||||
Premises and equipment | 6,688,641 | 6,742,465 | ||||||
Bank-owned life insurance | 6,944,822 | 6,872,743 | ||||||
Accrued interest and other assets | 5,278,668 | 4,081,259 | ||||||
March 31, | December 31 | |||||||
2007 | 2006 | |||||||
TOTAL ASSETS | $ | 357,203,845 | $ | 340,851,704 | ||||
LIABILITIES | ||||||||
Deposits: | ||||||||
Noninterest-bearing demand | $ | 39,375,477 | $ | 41,002,573 | ||||
Interest-bearing demand | 13,241,825 | 11,724,173 | ||||||
Money market | 26,306,872 | 14,738,767 | ||||||
Savings | 53,622,139 | 54,246,499 | ||||||
Time | 154,979,513 | 149,338,181 | ||||||
Total deposits | 287,525,826 | 271,050,193 | ||||||
Short-term borrowings | 2,265,357 | 1,609,738 | ||||||
Federal funds purchased | — | — | ||||||
Other borrowings | 34,793,179 | 36,112,738 | ||||||
Accrued interest and other liabilities | 1,499,115 | 1,615,101 | ||||||
TOTAL LIABILITIES | 326,083,477 | 310,387,770 | ||||||
STOCKHOLDERS’ EQUITY | ||||||||
Common stock, no par value; 10,000,000 shares authorized, 1,525,324 and 1,519,887 shares issued | 19,712,463 | 19,507,257 | ||||||
Retained earnings | 15,108,995 | 14,685,971 | ||||||
Accumulated other comprehensive income | (492,783 | ) | (520,987 | ) | ||||
Treasury stock, at cost; 95,080 shares in 2007 and in 2006 | (3,208,307 | ) | (3,208,307 | ) | ||||
TOTAL STOCKHOLDERS’ EQUITY | 31,120,368 | 30,463,934 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 357,203,845 | $ | 340,851,704 | ||||
MIDDLEFIELD BANC CORP.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2007 | 2006 | |||||||
INTEREST INCOME | ||||||||
Interest and fees on loans | $ | 4,530,229 | $ | 3,985,618 | ||||
Interest-bearing deposits in other institutions | 55,889 | 3,121 | ||||||
Federal funds sold | 131,235 | 3,579 | ||||||
Investment securities: | ||||||||
Taxable interest | 266,114 | 305,970 | ||||||
Tax-exempt interest | 382,785 | 245,151 | ||||||
Dividends on FHLB stock | 25,495 | 17,197 | ||||||
Total interest income | 5,391,747 | 4,560,636 | ||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2007 | 2006 | |||||||
INTEREST EXPENSE | ||||||||
Deposits | 2,314,671 | 1,540,862 | ||||||
Short term borrowings | 152,292 | 60,823 | ||||||
Other borrowings | 312,335 | 272,974 | ||||||
Total interest expense | 2,779,298 | 1,874,659 | ||||||
NET INTEREST INCOME | 2,612,449 | 2,685,977 | ||||||
Provision for loan losses | 45,000 | 75,000 | ||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 2,567,449 | 2,610,977 | ||||||
NONINTEREST INCOME | ||||||||
Service charges on deposit accounts | 451,947 | 412,842 | ||||||
Investment securities losses, net | — | (5,868 | ) | |||||
Earnings on bank-owned life insurance | 72,079 | 53,222 | ||||||
Other income | 97,602 | 90,130 | ||||||
Total noninterest income | 621,628 | 550,326 | ||||||
NONINTEREST EXPENSE | ||||||||
Salaries and employee benefits | 1,104,908 | 994,944 | ||||||
Occupancy expense | 169,230 | 154,303 | ||||||
Equipment expense | 121,791 | 92,213 | ||||||
Data processing costs | 151,248 | 178,507 | ||||||
Ohio state franchise tax | 96,000 | 90,000 | ||||||
Other expense | 630,525 | 525,764 | ||||||
Total noninterest expense | 2,273,702 | 2,035,731 | ||||||
Income before income taxes | 915,375 | 1,125,572 | ||||||
Income taxes | 163,000 | 308,000 | ||||||
NET INCOME | $ | 752,375 | $ | 817,572 | ||||
EARNINGS PER SHARE | ||||||||
Basic | $ | 0.53 | $ | 0.58 | ||||
Diluted | 0.52 | 0.57 | ||||||
DIVIDENDS DECLARED PER SHARE | $ | 0.240 | $ | 0.224 |
MIDDLEFIELD BANC CORP.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
For the Three Months Ended March 31, | ||||||||||||
2007 | 2006 | % Change | ||||||||||
Per share (1) | ||||||||||||
Earnings per common share — Basic | $ | 0.53 | $ | 0.58 | -8.40 | % | ||||||
Earnings per common share — Diluted | 0.52 | 0.57 | -8.39 | % | ||||||||
Cash dividends paid | 0.24 | 0.22 | 7.14 | % | ||||||||
Book value (end of period) | 21.76 | 19.60 | 10.99 | % | ||||||||
Shares Outstanding | ||||||||||||
Average — Basic | 1,426,111 | 1,419,305 | 0.48 | % | ||||||||
Average — Diluted | 1,447,534 | 1,440,771 | 0.47 | % | ||||||||
Actual (end of period) | 1,430,244 | 1,422,729 | 0.53 | % | ||||||||
Key performance ratios | ||||||||||||
Return on average assets | 0.87 | % | 1.05 | % | -16.97 | % | ||||||
Return on average equity | 9.98 | % | 11.79 | % | -15.37 | % | ||||||
Net interest margin | 3.46 | % | 3.89 | % | -10.98 | % | ||||||
Yield on earning assets | 6.89 | % | 6.49 | % | 6.25 | % | ||||||
Efficiency ratio | 66.28 | % | 61.34 | % | 8.06 | % | ||||||
Net charge-offs to average loans (actual for the period) | 0.04 | % | 0.01 | % | 0.00 | % | ||||||
Net charge-offs to average loans (annualized) | 0.17 | % | 0.05 | % | 0.00 | % | ||||||
Total allowance for loan losses to nonperforming loans | 162.95 | % | 140.40 | % | 16.06 | % | ||||||
Nonperforming loans to total loans | 0.67 | % | 0.87 | % | -23.02 | % | ||||||
Total allowance for loan losses to total loans | 1.09 | % | 1.22 | % | -10.66 | % | ||||||
Equity to assets at period end | 8.71 | % | 8.92 | % | -2.37 | % | ||||||
At period end (in 000s) | ||||||||||||
Total assets | $ | 357,204 | $ | 312,577 | 14.28 | % | ||||||
Total deposits | 287,526 | 254,268 | 13.08 | % | ||||||||
Net loans receivable | 251,989 | 232,895 | 8.20 | % | ||||||||
Securities | 70,740 | 56,104 | 26.09 | % | ||||||||
Shareholders equity | 31,120 | 27,892 | 11.57 | % |
(1) | Per share data has been restated to reflect the five percent stock dividend paid in 2006. |
MIDDLEFIELD BANC CORP.
SUPPLEMENTAL DETAIL
SUPPLEMENTAL DETAIL
CHARGE-OFFS
For the Three Months | ||||||||
Ended March 31, | ||||||||
2007 | 2006 | |||||||
Loan charge-offs | $ | 113 | $ | 32 | ||||
Recoveries on loans | 7 | 4 | ||||||
Net loan charge-offs | 106 | 28 |