![]() Thomas G. Caldwell President and CEO Donald L. Stacy Treasurer and CFO Middlefield Banc Corp. Investor Presentation April 2015 Exhibit 99.1 |
![]() Forward Looking Statements This presentation contains forward-looking statements within the meaning of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995 concerning Middlefield Banc Corp.’s plans, strategies, objectives, expectations, intentions, financial condition and results of operations. These forward-looking statements reflect management’s current views and intentions and are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause the actual results to differ materially from those contemplated by the statements. The significant risks and uncertainties related to Middlefield Banc Corp. of which management is aware are discussed in detail in the periodic reports that Middlefield Banc Corp. files with the Securities and Exchange Commission (the “SEC”), including in the “Risk Factors” section of its Annual Report on Form 10-K and its Quarterly Report on Form 10-Q. Investors are urged to review Middlefield Banc Corp.’s periodic reports, which are available at no charge through the SEC’s website at www.sec.gov and through Middlefield Banc Corp.’s website at www.middlefieldbank.com on the “Investor Relations” page. Middlefield Banc Corp. assumes no obligation to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date of this presentation. 2 |
![]() Middlefield Banc Corp. Company Snapshot (1)(2) NASDAQ: MBCN Stock Price: $31.71 Market Cap: $65.1 million Dividend (yield): $1.04 (3.3%) Headquarters: Middlefield, Ohio Established: Bank 1901/HC 1988 Branches: 10 Total Assets: $699.9 million Net Loans $469.4 million Total Deposits: $617.1 million (1) Stock price, market cap and dividend yield as of April 22, 2015 (2) Financial figures for the period ended March 31, 2015 For over 100 years, Middlefield Banc Corp. has supported its communities by offering customers superior financial products, exceptional service, and modern banking amenities 3 |
![]() Rankings and Awards 4 Sources: (1) KBW April 13, 2015 http://www.kbw.com/content/the-firm-PDFs/press-releases/KBW-2015-Bank-Honor-Roll-04.13.15.pdf (2) SNL June 16, 2014 Disproving the naysayers, some banks under $1B thrive By Kiah Lau Haslett and Marshall Schraibman (3) Independent Banker http://independentbanker.org/2014/05/community-banks-with-assets-of-more-than-500-million-to-1-billion/ SNL Financial (2) According to a June 16, 2014 article from SNL Financial, Middlefield Banc Corp. had the 10 th highest ROAE out of public community banks with under $1 billion in assets. KBW (1) On April 13, 2015, Middlefield was named one of 25 U.S. banking institutions to KBW’s coveted “Bank Honor Roll” of superior performers. Honor Roll members are publicly traded banking institutions with more than $500 million in total assets that have not reported an annual loss over the past 10 years, had 2014 annual EPS equal to or greater than peak EPS over the past 10 years, and consecutive increases in EPS since 2009. Independent Banker (3) According to May 30, 2014 study from Independent Banker, Middlefield Banc Corp. had the 21 st highest ROE of community banks with assets of $500 million to $1 billion |
![]() Ended 2014 with record net loans outstanding, net income, and stockholders’ equity Profitable throughout the economic cycle and never reported a quarterly loss History of quarterly cash dividend payments, and maintained dividend amount during recession Excellent asset quality, strong liquidity profile, and robust core deposit base Strong returns and efficiency ratios Two strong Ohio banking markets 5 Growing Banking Franchise Total Assets $- $100 $200 $300 $400 $500 $600 $700 $800 |
![]() Middlefield Overview 6 Middlefield Banc Corp. is a community banking leader with strong brand recognition in its markets Favorable distribution network: 10 branches in five counties, serving two distinct Ohio market areas Northeastern Ohio market consists principally of: – Geauga County – Trumbull County – Ashtabula County – Portage County Two central Ohio branches are located in Dublin and Westerville in Franklin County, north of Columbus. Cleveland MSA and Columbus MSA have a combined population of more than 4.0 million people Opportunities to “fill in” gap between two operating geographies According to FDIC statistics, Ohio insured financial institutions have declined 30% from 304 institutions at the end of 2003 to 212 at the end of 2014 In terms of deposits, out of 212 banks in the State of Ohio, Middlefield was the 30 th largest bank in the state at December 31, 2014 |
![]() Middlefield Serves Two Distinct Ohio Markets with Strong Demographics Northeast Ohio Northern Columbus 8 banking locations Geauga County is 3 rd in median household income (1) out of 88 Ohio counties Geauga County is the center of the 4 th largest Amish population in the world – This demographic provides a strong borrowing and stable deposit base Improvements in manufacturing Combined unemployment rate in all four counties in 2014 was 5.2% 2 banking locations Columbus is the state capital and largest city in Ohio Franklin County is 2 nd in population in Ohio with an unemployment rate of 3.6% in 2014 Delaware County, immediately north of Franklin, has the 2 nd highest median household income in Ohio At June 30, 2014, 5 of the 34 banks in Franklin County controlled 85% of total deposits. 8 of the bank's 10 branches (and nearly 85% of deposits) are located in counties that have stronger demographics than the State average median household income, median value, value of owner-occupied housing, and employment rates 7 (1) According to: www.usa.com/rank/ohio-state--median-household-income--county-rank.htm?hl=Geauga&hlst=OH&yr=6000 |
![]() Corporate Infrastructure and Experienced Management to Support Growth Middlefield’s success is driven by a strong leadership team dedicated to creating value for shareholders, while providing the highest quality financial products and services within the communities the Company serves Experienced Management 2014 Investments Average tenure of 8 executive officers: – At MBCN is over 14 years – Within industry is over 25 years Thomas Caldwell, CEO, serves on the Federal Delegate Board of the Independent Community Bankers of America, having been elected in June 2010. Mr. Caldwell previously served as Chairman of the Community Bankers Association of Ohio. Sales-orientation culture Community focused culture Launched secondary mortgage capabilities in 2014 fourth quarter Focused on expanding technology – Launched new website – Enhanced on-line banking – Developed mobile banking capabilities Hired Chief Information Officer and Chief Credit Officer Centralized operations center to a new 20,000 sq. foot facility 8 |
![]() 9 Personal Banking Personal Banking Products and Services Strong brand recognition in core markets – #1 Market Share in Geauga County – #6 Market Share in Portage County – #3 overall within the primary northeastern Ohio market Focused on growth – Improved on-line banking offerings – Residential mortgage products – De novo expansion and strategic acquisitions Customers trust Middlefield Banc Corp. to be there for them in day-to-day money management as well as for those milestone events in their financial lives |
![]() 10 Market Share Ashtabula, Geauga, Portage & Trumbull Counties June 30, 2014 Rank Institution Branches Deposits in Market ($000) Market Share 1 Huntington National Bank 38 1,532,821 20.60 2 JP Morgan Chase 19 894,279 12.02 4 KeyBank 15 522,389 7.02 5 PNC Bank 11 506,911 6.81 6 Talmer Bank and Trust 9 464,660 6.24 7 Cortland Savings & Banking 10 385,484 5.18 8 First Merit Bank 12 347,397 4.67 Total for institutions in market 190 7,441,520 Franklin County June 30, 2014 Rank Institution Branches Deposits in Market ($000) Market Share 1 Huntington National Bank 68 14,035,079 31.14 2 JP Morgan Chase 53 10,503,465 23.30 3 PNC Bank 42 5,130,794 11.38 4 Nationwide Bank 2 4,415,679 9.80 5 Fifth Third Bank 47 4,145,568 9.20 26 Vinton County National Bank 1 57,354 0.13 27 First City Bank 1 44,764 0.10 Total for institutions in market 344 45,074,325 Strong Market Share in Northeastern Ohio Market Opportunities To Increase Market Share in Central Ohio Source: FDIC 3 The Middlefield Banking Co. 8 528,765 7.11 25 The Middlefield Banking Co. 2 61,079 0.14 |
![]() 11 Commercial Banking (1) Commercial Banking Products and Services $214.6 million in commercial loans at March 31, 2015 Enhanced commercial banking leadership team in 2014 by adding: Chief Credit Officer SVP – Commercial Lending Expertise in niche commercial loan products Growth objectives include: Branch expansions Selective acquisitions Increase market share For over 100 years, Middlefield Banc Corp. has been helping businesses grow (2) Dollars in millions (1) Commercial loans include commercial and industrial, and commercial real estate. $- $50 $100 $150 $200 $250 2014 2013 2012 2011 2010 2009 Annual Commercial Loan Growth (2) |
![]() History of Strong Financial Results ROAA: 0.36% 0.41% 0.65% 0.95% 1.06% 1.07% ROAE: 4.90% 6.44% 10.24% 11.98% 13.17% 12.17% Return on Average Assets Return on Average Equity Managed cost of funding to increase net interest margin Anticipate continued pressure on margin levels due to: Higher regulatory costs Continued low rate environment Investments to support growth Opportunities to offset margin pressures and increase profitability by improvements in fee based income Three Months Ended March 31, 2015 2014 ROAA (1) 0.96% 1.08% ROAE (1) 10.23% 13.10% (1) Annualized Annual Return on Average Assets and Equity 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 2014 2013 2012 2011 2010 2009 12 |
![]() 2015 First Quarter Highlights Net interest income increased 3.3% to $6.2 million. Noninterest income grew 11.3% to $0.8 million. Noninterest expense increased 13.8%. Net income decreased 7.7% to $1.6 million, or $0.79 per diluted share. Tangible stockholders’ equity improved 3.1% from the 2014 fourth quarter, and 17.4% from March 31, 2014. Total net loans increased 7.5%. Nonperforming assets declined to $10.5 million from $13.4 million. Tier 1 capital ratio strengthened to 9.69% from 9.15%. Overall profitability was impacted by selectively adding staff to improve capabilities and increases to the advertising budget to support growth objectives. Middlefield was able to partially offset the impact of the 13.8% increase in noninterest expense through higher levels of both interest and noninterest income, and reducing interest expenses by 14.5%. 13 Net Income Total Noninterest Income Net Interest Income (1) Dollars in thousands $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 2015 Q1 2014 Q4 2014 Q3 2014 Q2 2014 Q1 Quarterly Income (1) 2015 first quarter highlights include: (on a year-over-year basis unless noted) |
![]() Stable and Growing Loan Portfolio Net loans to total deposits of 76.1% at March 31, 2015 Net loans at March 31, 2015 were $469.4 million, up from $436.7 million in the same period last year Loan policy goal is to achieve a composition mix of: 40 – 50% residential real estate loans 35 – 45% commercial loans 5 – 15% consumer loans 5% credit card accounts Adding secondary mortgage market will enhance residential product Especially in Columbus market No national or sub-prime lending Lending within market area Participation loans with banks that have similar credit quality standards and cultures Loan Portfolio at March 31, 2015 14 (1) Dollars in millions |
![]() Excellent Asset Quality and Capital Levels Dollars in thousands 3/31/2015 12/31/2014 3/31/2014 12/31/2013 12/31/2012 Nonperforming Loans $8,262 $9,048 $10,741 $12,290 $14,224 Real Estate Owned 2,203 2,590 2,656 2,698 1,846 Nonperforming Assets (NPAs) 10,465 11,638 13,397 14,988 16,070 Allowance for Loan Losses 6,447 6,846 7,015 7,046 7,779 Ratios: Nonperforming Loans/ Total Loans (%) 1.74% 1.92% 2.42% 2.82% 3.48% NPAs/Total Assets (%) 1.50% 1.72% 2.00% 2.32% 2.40% Allowance/Total Loans (%) 1.35% 1.45% 1.58% 1.62% 1.90% Allowance/Nonperforming Loans (%) 78.03% 75.66% 65.31% 57.33% 54.69% Net Charge-off Ratio – Annualized (%) 0.43% 0.38% 0.19% 0.19% 0.30% Tier 1 Capital Ratio (to Average Assets) 9.69% 9.60% 9.15% 9.04% 7.90% Strong reserve coverage provides flexibility in managing potential losses with reduced impact on net income 15 Problem assets peaked in 2011, primarily driven by non-owner occupied 1 - 4 family in Central Ohio market Net charge-offs returned to normalized levels in 2012 ��� Peaked in 2011 with $2.5 million 2015 first quarter Nonperforming assets lowest since 2008. |
![]() Annual Financial Summary Dollars in thousands 2009 2010 2011 2012 2013 2014 Net interest income 14,268 18,149 21,075 22,299 22,928 23,804 Provision for loan losses 2,578 3,580 3,085 2,168 196 370 Noninterest income 2,668 2,623 2,237 3,451 3,145 3,588 Noninterest expense 12,650 14,763 15,501 15,639 16,870 17,850 Income before income taxes 1,708 2,429 4,726 7,943 9,007 9,172 Income taxes (73) (88) 596 1,662 1,979 1,992 Net income 1,781 2,517 4,130 6,281 7,028 7,180 Net interest margin 3.30% 3.41% 3.65% 3.74% 3.85% 3.93% Total assets 558,658 632,197 654,551 670,288 647,090 677,531 Loans outstanding, net 348,660 366,277 395,061 400,654 428,679 463,738 Deposits 487,106 565,251 580,962 593,335 568,836 586,112 Equity capital 36,707 38,022 47,253 55,437 53,473 63,867 Earnings per share 1.15 1.60 2.45 3.29 3.48 3.52 Cash dividend (per share) 1.04 1.04 1.04 1.04 1.04 1.04 Dividend pay-out ratio 90.28% 65.04% 42.71% 31.87% 29.84% 29.54% Return on average assets 0.36% 0.41% 0.65% 0.95% 1.06% 1.07% Return on average equity 4.90% 6.44% 10.24% 11.98% 13.17% 12.17% 16 |