EXHIBIT 99
MBT FINANCIAL CORP. ANNOUNCES THIRD
QUARTER EARNINGS (UNAUDITED)
Monroe, Michigan--- MBT Financial Corp. (NASDAQ: MBTF), the parent company of
Monroe Bank & Trust, announced today that its Net Income for the third quarter
of 2003 was $1,973,000, or $0.10 per share (basic and diluted). This compares to
the third quarter of 2002 Net Income of $5,680,000, or $0.29 per share (basic
and diluted).
Net Income for the nine months ended September 30, 2003 was $12,811,000, or
$0.67 per share (basic and diluted), compared to $15,809,000 or $0.81 per share
(basic and diluted), for the nine months ended September 30, 2002. This is a
decrease of $2,998,000, or 19.0%.
Ronald D. LaBeau, Chairman & CEO of MBT Financial Corp., and Monroe Bank &
Trust, commented, "A decision to add $5.5 million to the loan loss reserve was
the cause for the disappointing third quarter results. This amount was allocated
to the reserve to cover any future losses due to a recent deterioration of a
relationship with a large commercial customer." The Bank's net interest income
increased 1.4% over the third quarter of 2002 in spite of the unprecedented
period of low interest rates that has caused most banks to experience margin
compression. The increase in net interest income is attributed to the growth in
the loan portfolio. Total loans have increased $73 million, or 9.5% since
September 30, 2002. Non interest income was 28.0% higher than the third quarter
of last year due to increased deposit account service charges and mortgage loan
origination fees. Non interest expenses were 19.7% higher than last year due to
the Bank's efforts to expand into the Downriver area of Wayne County. LaBeau
added, "The Downriver market continues to grow. Our Trenton branch opened in
July and we have had success in reintroducing community banking into this city."
The bank is also planning to build a large branch in Wyandotte that will serve
as a regional headquarters for its operations in the Downriver market.
Although the provision for loan losses and the amount of nonperforming assets
increased significantly, the Bank has taken steps to improve its asset quality.
Stricter underwriting standards have improved the quality of loans being added
to the portfolio, and the Bank is aggressively pursuing legal action against
existing nonperforming credits. The $13.9 million increase in nonaccrual loans
in the third quarter is mainly attributed to 5 commercial credit relationships.
Although total nonperforming assets increased $15.1 million in the quarter, the
Bank was able to maintain an adequate allowance for loan losses by increasing
the allowance, net of charge offs, by $5.1 million. The table below summarizes
the Bank's nonperforming assets:
(Dollars in Thousands) September 30, June 30, March 31, December 31,
Unaudited 2003 2003 2003 2002
-----------------------------------------------------------
Nonaccrual loans $ 38,854 $24,962 $25,160 $ 22,332
Loans 90 days past due 111 174 1,154 81
Restructured loans 7,023 5,904 5,890 6,807
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Total nonperforming loans $ 45,988 $31,040 $32,204 $ 29,220
Other real estate owned 11,578 11,445 12,085 15,088
Nonperforming investment
securities 79 79 79 88
-----------------------------------------------------------
Total nonperforming assets $ 57,645 $42,564 $44,368 $ 44,396
===========================================================
Nonperforming assets to total
assets 3.92% 2.98% 3.04% 3.15%
Allowance for loan losses to
nonperforming assets 32.57% 32.15% 29.52% 27.93%
The average cost of deposits declined from 2.1% in the third quarter of 2002 to
1.5% in the third quarter of 2003. Interest rates are expected to remain low,
and the cost of deposits will continue to decline throughout the fourth quarter
of 2003. Longer term market rates began to increase in the third quarter,
causing mortgage loan refinancing activity to slow down considerably.
Origination fees on mortgage loans sold increased from $162,000 in the third
quarter of 2002 to $379,000 in the third quarter of 2003. Year to date
origination fees on mortgage loans sold are up $543,000, or 116%. This is not
expected to continue in the fourth quarter.
MBT Financial Corp., a single bank holding company headquartered in Monroe,
Michigan is the parent company of Monroe Bank & Trust. Founded in 1858, Monroe
Bank & Trust is one of the nation's largest community banks. The bank has over
$1.4 billion in assets and services nearly $1 billion in trust assets. MB&T is a
full-service bank, offering a broad range of services, including personal and
business accounts and the area's largest Trust Department. With 24 branches, 34
ATMs, PhoneLink telephone banking and eLink online banking, MB&T is the area's
most accessible community bank.
MB&T is proud to be an active supporter of the community through contributions,
reinvestment, civic involvement, and ENLIST, its employee volunteer program.
Visit MB&T's web site at www.MBandT.com, where extensive financial and corporate
information can be found in the Investor Relations section.
Certain statements contained herein are not based on historical facts and are
"forward-looking statements" within the meaning of Section 21A of the Securities
Exchange Act of 1934. Forward-looking statements which are based on various
assumptions (some of which are beyond the Corporation's control), may be
identified by reference to a future period or periods, or by the use of
forward-looking terminology, such as "forecast," "may," "will," "believe,"
"expect," "estimate," "anticipate," "continue," or similar terms or variations
on those terms, or the negative of these terms. Actual results could differ
materially from those set forth in forward-looking statements, due to a variety
of factors, including, but not limited to, those related to the economic
environment, particularly in the market areas in which the company operates,
competitive products and pricing, fiscal and monetary policies of the U.S.
Government, changes in government regulations affecting financial institutions,
including regulatory fees and capital requirements, changes in prevailing
interest rates, acquisitions and the integration of acquired
businesses, credit risk management, asset/liability management, the financial
and securities markets and the availability of and costs associated with sources
of liquidity. MBT Financial Corp. undertakes no obligation to update or clarify
forward looking statements.
Selected Financial Ratios
Unaudited September 30, September 30,
2003 2002
------------- -------------
Third Quarter
Return on Average Assets 0.5% 1.6%
Return on Average Equity 4.5% 13.7%
Efficiency Ratio 41.9% 37.4%
Year to Date
Return on Average Assets 1.2% 1.5%
Return on Average Equity 10.0% 12.9%
Efficiency Ratio 43.3% 39.2%
Period End
Book Value per common share $ 8.84 $ 8.56
Common stock price $ 15.60 $ 13.90
Common shares outstanding 19,113,521 19,248,541
MBT FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in Thousands)
(Unaudited) (Unaudited)
September 30, December 31, September 30,
ASSETS 2003 2002 2002
------------- ------------ ------------
Cash and due from banks $ 27,074 $ 30,618 $ 27,263
Federal funds sold 22,600 13,000 -
Investment securities-HTM 100,191 116,819 118,105
Investment securities-AFS 419,759 422,918 444,152
Loans 838,648 773,360 763,518
Loans held for sale 411 445 2,512
Allowance for loan losses (18,773) (12,400) (12,286)
Premises and equipment, net 17,883 15,437 15,692
Other real estate owned 11,578 15,088 15,396
Other assets 51,849 34,409 35,127
------------- ------------ ------------
Total Assets $ 1,471,220 $ 1,409,694 $ 1,409,479
============= ============ ============
LIABILITIES
Non-interest bearing demand deposits $ 132,174 $ 123,596 $ 116,894
Interest bearing demand deposits 64,317 69,756 63,029
Savings deposits 539,634 470,192 470,358
Other time deposits 334,137 347,416 348,666
------------- ------------ ------------
Total deposits 1,070,262 1,010,960 998,947
Federal funds borrowed - - 13,300
FHLB advances 225,000 225,000 225,000
Other liabilities 7,053 6,735 7,517
------------- ------------ ------------
Total liabilities 1,302,315 1,242,695 1,244,764
STOCKHOLDERS' EQUITY
Common stock, no par value - - -
Surplus 50,458 51,080 52,276
Undivided profits 119,988 115,395 112,085
Accumulated other comprehensive income (loss) (1,541) 524 354
------------- ------------ ------------
Total Stockholders' equity 168,905 166,999 164,715
Total liabilities and
------------- ------------ ------------
Stockholders' equity $ 1,471,220 $ 1,409,694 $ 1,409,479
============= ============ ============
MBT FINANCIAL CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, except per share data)
Three Months Ended September 30,
2003 2002
------- -------
Interest Income
Interest and fees on loans $13,782 $15,102
Interest on investment securities 5,499 5,793
Interest on fed funds sold 18 268
------- -------
Total interest income 19,299 21,163
Interest Expense
Interest on deposits 3,865 5,318
Interest on borrowed funds 2,659 3,249
------- -------
Total Interest Expense 6,524 8,567
------- -------
Net Interest Income 12,775 12,596
Provision for Loan Losses 6,325 1,400
------- -------
Net Interest Income After
Provision for Loan Losses 6,450 11,196
Other Income
Income from trust services 761 956
Service charges on deposit accounts 1,417 1,175
Security gains 454 33
Other income 1,250 868
------- -------
Total Other Income 3,882 3,032
Other Expenses
Salaries and employee benefits 4,064 3,548
Occupancy expense 626 535
Other 2,990 2,332
------- -------
Total Other Expenses 7,680 6,415
------- -------
Income before Federal Income Tax 2,652 7,813
Federal Income Tax Expense 679 2,133
------- -------
Net Income $ 1,973 $ 5,680
======= =======
Earnings per share
Basic $ 0.10 $ 0.29
Diluted $ 0.10 $ 0.29
Dividends declared per share $ 0.15 $ 0.14
MBT FINANCIAL CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, except per share data)
Nine Months Ended September 30,
2003 2002
------- -------
Interest Income
Interest and fees on loans $41,778 $44,877
Interest on investment securities 16,991 18,822
Interest on fed funds sold 109 542
------- -------
Total interest income 58,878 64,241
Interest Expense
Interest on deposits 12,365 16,779
Interest on borrowed funds 8,832 9,637
------- -------
Total Interest Expense 21,197 26,416
------- -------
Net Interest Income 37,681 37,825
Provision for Loan Losses 7,975 5,500
------- -------
Net Interest Income After
Provision for Loan Losses 29,706 32,325
Other Income
Income from trust services 2,454 2,596
Service charges on deposit accounts 3,966 3,299
Security gains 868 771
Other income 3,313 2,437
------- -------
Total Other Income 10,601 9,103
Other Expenses
Salaries and employee benefits 12,422 10,681
Occupancy expense 1,933 1,583
Other 8,281 7,418
------- -------
Total Other Expenses 22,636 19,682
------- -------
Income before Federal Income Tax 17,671 21,746
Federal Income Tax Expense 4,860 5,937
------- -------
Net Income $12,811 $15,809
======= =======
Earnings per share
Basic $ 0.67 $ 0.81
Diluted $ 0.67 $ 0.81
Dividends declared per share $ 0.43 $ 0.40
Questions regarding the information in this release may be submitted via our web
site, www.MBandT.com. Select Investor Relations, then Information Request, or
send questions via email to investorrelations@mbandt.com. We will accept
questions until the
close of business on Friday, October 17, 2003. The responses will be posted to
the News section on our web site after 4 pm on Wednesday, October 22, 2003.
Contact:
Herbert J. Lock, Senior Vice President, Monroe Bank & Trust, (734) 242-2603