EXHIBIT 99
[MBT FINANCIAL CORP LOGO]
MBT FINANCIAL CORP. REPORTS THIRD QUARTER EPS OF $0.35
Asset Quality Continues to Improve
MONROE, MICHIGAN, October 14, 2004 -- MBT Financial Corp., (Nasdaq: MBTF), the
parent company of Monroe Bank & Trust, reported third quarter net income of $6.1
million, a 209.6% increase over the $2.0 million reported for the third quarter
of 2003. The increase reflects a significantly lower loan loss provision
complemented by solid loan growth and effective expense control. Diluted
earnings per share were $0.35, compared to $0.10 for the prior-year quarter,
representing growth of 250.0%. Earnings per share also reflect the repurchase of
shares, resulting in an 8.4% decline in diluted average shares outstanding to
17,520,938 from 19,133,621.
For the nine months ended September 30, 2004, the Company reported net income of
$17.2 million, an increase of 33.9% over the $12.8 million reported for the
prior-year period. The increase reflects the same aforementioned factors in the
quarterly trends. Diluted earnings per share were $0.98, a 46.3% increase over
the $0.67 reported for the first nine months of 2003. During the past twelve
months, share repurchases from a combination of a self-tender completed in
December of 2003 and an ongoing share repurchase program resulted in an 8.4%
decline in average shares outstanding from 19,135,564 to 17,531,225.
H. Douglas Chaffin, President and CEO, commented, "We had an excellent quarter,
reflective of our efforts over the past two years to revitalize the Company's
strategic focus. We achieved strong earnings growth, strong profitability, and
improved asset quality. We continue to focus on those strategies contributing to
our profitable growth: geographic expansion, product expansion, the addition of
highly-qualified staff, investment in technology, and asset quality improvement.
At the same time, we are mindful of our traditional strengths: our dominant
market position in Monroe County and our efficient operating structure.
"We look forward to opening our new 11,000 square foot Downriver regional center
in Wyandotte by the end of this month. This branch will provide our third
full-service office in the Downriver area of southern Wayne County, a market
similar in demographics to Monroe County, and one that has been underserved by
community banks."
Total revenue, comprised of net interest income and non-interest income, was
$17.0 million in the third quarter of 2004, an increase of 2.2% over the $16.6
million earned during the prior-year third quarter; excluding securities gains,
total revenue increased 5.1% to $17.0 million. Mr. Chaffin noted, "Our efforts
to restructure the balance sheet, begun in 2003, have improved our net interest
margin, and positioned it to expand in a rising interest rate environment." Net
interest income increased 6.7% to $13.6 million for the 2004 third quarter,
reflecting a combination of 5.5% growth in average earning assets and a 13
basis point improvement in the net interest margin to 3.55%.
Non-interest income, net of securities gains, was $3.4 million, a modest decline
of 0.9%. Strong growth in income from trust services, up 25.2%, was offset by a
65.4% decline in origination fees on mortgage loans sold.
Non-interest expense for the third quarter of 2004 was $8.0 million, an increase
of 4.5% over the prior-year period. During the quarter, the Company expensed
$370,000 for environmental cleanup costs associated with land purchased for its
branch
in Temperance. Excluding this cost, non-interest expense declined 0.3% to $7.7
million. Salaries and employee benefits, the largest component of non-interest
expense, increased 9.2%, reflecting the Downriver expansion and the improved
quality of staff. Mr. Chaffin noted that the Company continues its legacy of a
highly efficient operating structure while increasing its investment to support
its strategic initiatives. The efficiency ratio for the third quarter of 2004
was 44.65% compared to 41.87% for the prior-year quarter.
Mr. Chaffin highlighted the Company's continuing progress at improving asset
quality. "Nonperforming assets declined for the fourth consecutive quarter,
reducing 31% over the past twelve months. Charge-offs, net of recoveries, were
minimal this quarter. Despite this improvement, we have maintained our reserves
at a conservative level over the last four quarters." Non-performing assets were
2.55% of total assets at September 30, 2004, down from 2.74% at June 30, 2004
and 3.89% at September 30, 2003. Annualized net charge-offs for the quarter were
0.03% of average loans, compared to 0.78% for the prior-year third period. The
loan and lease loss reserves were $15.5 million, or 1.64% of total loans and
leases at September 30, 2004.
Total assets were $1.55 billion at September 30, 2004, an increase of 5.6% from
the prior-year third quarter. Loans rose $106.9 million, or 12.7% during the
same time period, primarily funded through borrowings, a decline in cash
equivalents and a decline in investment securities.
Shareholders' equity at September 30, 2004 was $153.3 million, a twelve-month
decrease of 9.2%, reflective of share repurchase activity over the past year.
Average equity to assets was 9.58%. Total shares outstanding at quarter end were
17,419,910. Mr. Chaffin concluded, "Our improving fundamentals are confirmation
of the strategy we have undertaken over the last two years to revitalize our
business. Local business conditions are slowly improving, and we are optimistic
as we move into the last quarter of 2004."
CONFERENCE CALL
MBT Financial Corp. will hold a conference call to discuss third quarter results
on Thursday, October 14, at 10:00 a.m. Eastern Time. The call will be webcast
and can be accessed at the Investor Relations/Corporate Profile page of MBT
Financial Corp.'s web site www.MBandT.com. The event will be archived and
available for one month following the call.
ABOUT THE COMPANY
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 $1.5
billion in assets and services nearly $1 billion in trust assets. MB&T is a
full-service bank, offering a broad range of services, from personal and
business accounts to complete credit options and the area's largest Trust
Department. With 24 offices, 33 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, and civic involvement. MB&T is also known for ENLIST, its employee
volunteer program, which is celebrating its 20th anniversary this year. Since
its inception, participants in the ENLIST program have contributed nearly 90,000
hours of volunteer work in the communities we serve. Visit MB&T's web site at
www.MBandT.com, where extensive financial and corporate information can be found
in the Investor Relations section.
FORWARD-LOOKING STATEMENTS
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 "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. The
Corporation undertakes no obligation to update or clarify forward-looking
statements, whether as a result of new information, future events or otherwise.
FOR FURTHER INFORMATION:
H. Douglas Chaffin John L. Skibski Herbert J. Lock
Chief Executive Officer Chief Financial Officer Investor Relations
(734) 384-8123 (734) 242-1879 (734) 242-2603
doug.chaffin@mbandt.com john.skibski@mbandt.com herb.lock@mbandt.com
MBT FINANCIAL CORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS - UNAUDITED
QUARTERLY
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2004 2004 2004 2003 2003
(dollars in thousands except per share data) 3RD QTR 2ND QTR 1ST QTR 4TH QTR 3RD QTR
----------- ----------- ----------- ----------- -----------
EARNINGS
Net interest income $ 13,627 $ 12,985 $ 12,640 $ 12,626 $ 12,775
FTE Net interest income $ 14,277 $ 13,649 $ 13,316 $ 13,598 $ 13,743
Provision for loan and lease losses $ 600 $ 600 $ 600 $ 30 $ 6,325
Non-interest income $ 3,396 $ 3,361 $ 3,226 $ 3,202 $ 3,882
Non-interest expense $ 8,025 $ 7,995 $ 7,889 $ 7,543 $ 7,680
Net income $ 6,109 $ 5,648 $ 5,400 $ 6,504 $ 1,973
Basic earnings per share $ 0.35 $ 0.32 $ 0.31 $ 0.36 $ 0.10
Diluted earnings per share $ 0.35 $ 0.32 $ 0.31 $ 0.35 $ 0.10
Average shares outstanding 17,419,214 17,429,648 17,501,262 18,747,900 19,115,234
Average diluted shares outstanding 17,520,938 17,500,695 17,579,979 18,779,982 19,133,621
PERFORMANCE RATIOS
Return on average assets 1.59% 1.55% 1.52% 1.76% 0.53%
Return on average common equity 16.58% 15.26% 14.90% 15.69% 4.46%
Net interest margin, net of loan fees 3.55% 3.56% 3.58% 3.40% 3.42%
Efficiency ratio 44.65% 45.34% 46.98% 41.89% 41.87%
Full-time equivalent employees 404 387 386 389 389
CAPITAL
Average equity to average assets 9.58% 10.15% 10.19% 11.20% 11.98%
Book value per share $ 8.80 $ 8.29 $ 8.50 $ 8.20 $ 8.84
Cash dividend per share $ 0.16 $ 0.15 $ 0.15 $ 0.15 $ 0.15
ASSET QUALITY
Loan Charge-Offs $ 956 $ 714 $ 666 $ 6,683 $ 2,204
Loan Recoveries $ 897 $ 330 $ 326 $ 778 $ 602
----------- ----------- ----------- ----------- -----------
Net Charge-Offs $ 59 $ 384 $ 340 $ 5,905 $ 1,602
Allowance for loan and lease losses $ 15,517 $ 14,976 $ 14,760 $ 14,500 $ 18,773
Nonaccrual Loans $ 29,993 $ 31,525 $ 32,538 $ 33,664 $ 38,499
Loans 90 days past due $ 222 $ 189 $ 259 $ 100 $ 111
Restructured loans $ 3,219 $ 3,348 $ 2,561 $ 4,755 $ 7,023
----------- ----------- ----------- ----------- -----------
Total nonperforming loans $ 33,434 $ 35,062 $ 35,358 $ 38,519 $ 45,633
Other real estate owned $ 6,255 $ 6,570 $ 8,579 $ 8,434 $ 11,578
Nonperforming investment securities $ - $ 163 $ 171 $ 140 $ 79
----------- ----------- ----------- ----------- -----------
Total nonperforming assets $ 39,689 $ 41,795 $ 44,108 $ 47,093 $ 57,290
Net loan charge-offs to average loans 0.03% 0.17% 0.16% 2.78% 0.78%
Allowance for losses to total loans 1.64% 1.62% 1.67% 1.68% 2.24%
Nonperforming loans (including OREO)
to Gross Loans 4.20% 4.51% 4.98% 5.44% 6.82%
Nonperforming assets to total assets 2.55% 2.74% 3.12% 3.23% 3.89%
Allowance for loan losses to
nonperforming assets 39.10% 35.83% 33.46% 30.79% 32.77%
END OF PERIOD BALANCES
Loans and leases $ 945,924 $ 923,738 $ 882,290 $ 863,850 $ 839,059
Total earning assets $ 1,463,758 $ 1,433,115 $ 1,326,025 $ 1,372,332 $ 1,361,269
Total assets $ 1,554,321 $ 1,523,976 $ 1,412,692 $ 1,457,788 $ 1,471,220
Deposits $ 1,072,426 $ 1,038,441 $ 1,020,188 $ 1,039,117 $ 1,070,262
Shareholders' equity $ 153,320 $ 144,393 $ 148,899 $ 143,446 $ 168,905
AVERAGE BALANCES
Loans and leases $ 934,031 $ 905,502 $ 872,746 $ 854,473 $ 827,259
Total earning assets $ 1,444,880 $ 1,378,490 $ 1,341,444 $ 1,390,854 $ 1,370,052
Total assets $ 1,529,700 $ 1,466,359 $ 1,430,303 $ 1,468,278 $ 1,463,382
Deposits $ 1,062,755 $ 1,028,702 $ 1,029,856 $ 1,077,644 $ 1,045,847
Shareholders' equity $ 146,579 $ 148,877 $ 145,751 $ 164,458 $ 175,367
MBT FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
QUARTER ENDED SEPTEMBER 30,
Dollars in thousands (except per share data) 2004 2003
-------- --------
INTEREST INCOME
Interest and fees on loans $ 14,888 $ 13,782
Interest on investment securities-
Tax-exempt 1,398 1,524
Taxable 4,458 3,975
Interest on federal funds sold - 18
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Total interest income 20,744 19,299
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INTEREST EXPENSE
Interest on deposits 3,904 3,865
Interest on borrowed funds 3,213 2,659
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Total interest expense 7,117 6,524
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NET INTEREST INCOME 13,627 12,775
PROVISION FOR LOAN LOSSES 600 6,325
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NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 13,027 6,450
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OTHER INCOME
Income from trust services 953 761
Service charges and other fees 1,423 1,417
Net gain (loss) on sales of securities (2) 454
Origination fees on mortgage loans sold 131 379
Bank Owned Life Insurance income 362 379
Other 529 492
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Total other income 3,396 3,882
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OTHER EXPENSES
Salaries and employee benefits 4,437 4,064
Occupancy expense 695 626
Other 2,893 2,990
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Total other expenses 8,025 7,680
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INCOME BEFORE PROVISION
FOR INCOME TAXES 8,398 2,652
PROVISION FOR INCOME TAXES 2,289 679
-------- --------
NET INCOME $ 6,109 $ 1,973
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BASIC EARNINGS PER COMMON SHARE $ 0.35 $ 0.10
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DILUTED EARNINGS PER COMMON SHARE $ 0.35 $ 0.10
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DIVIDENDS DECLARED PER COMMON SHARE $ 0.16 $ 0.15
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MBT FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
NINE MONTHS ENDED SEPTEMBER 30,
Dollars in thousands (except per share data) 2004 2003
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INTEREST INCOME
Interest and fees on loans $42,401 $41,778
Interest on investment securities-
Tax-exempt 4,258 4,704
Taxable 11,893 12,287
Interest on federal funds sold 2 109
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Total interest income 58,554 58,878
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INTEREST EXPENSE
Interest on deposits 10,570 12,365
Interest on borrowed funds 8,733 8,832
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Total interest expense 19,303 21,197
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NET INTEREST INCOME 39,251 37,681
PROVISION FOR LOAN LOSSES 1,800 7,975
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NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 37,451 29,706
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OTHER INCOME
Income from trust services 2,688 2,454
Service charges and other fees 4,073 3,966
Net gain on sales of securities 116 868
Origination fees on mortgage loans sold 460 1,011
Bank Owned Life Insurance income 1,128 910
Other 1,518 1,392
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Total other income 9,983 10,601
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OTHER EXPENSES
Salaries and employee benefits 13,419 12,422
Occupancy expense 2,192 1,933
Other 8,298 8,281
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Total other expenses 23,909 22,636
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INCOME BEFORE PROVISION
FOR INCOME TAXES 23,525 17,671
PROVISION FOR INCOME TAXES 6,368 4,860
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NET INCOME $17,157 $12,811
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BASIC EARNINGS PER COMMON SHARE $ 0.98 $ 0.67
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DILUTED EARNINGS PER COMMON SHARE $ 0.98 $ 0.67
======= =======
DIVIDENDS DECLARED PER COMMON SHARE $ 0.46 $ 0.43
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MBT FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS - UNAUDITED
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
Dollars in thousands 2004 2003 2003
------------ ----------- ------------
ASSETS
Cash and Cash Equivalents
Cash and due from banks $ 27,110 $ 22,525 $ 27,074
Federal funds sold - - 22,600
----------- ----------- -----------
Total cash and cash equivalents 27,110 22,525 49,674
Securities - Held to Maturity 88,045 99,154 100,191
Securities - Available for Sale 417,350 397,642 408,218
Federal Home Loan Bank stock - at cost 12,810 11,686 11,541
Loans held for sale 371 1,406 411
Loans - Net 930,036 847,944 819,875
Accrued interest receivable and other assets 23,385 25,627 30,442
Bank Owned Life Insurance 34,908 33,780 32,985
Premises and Equipment - Net 20,306 18,024 17,883
----------- ----------- -----------
Total assets $ 1,554,321 $ 1,457,788 $ 1,471,220
=========== =========== ===========
LIABILITIES
Deposits:
Non-interest bearing $ 148,515 $ 135,536 $ 132,174
Interest-bearing 923,911 903,581 938,088
----------- ----------- -----------
Total deposits 1,072,426 1,039,117 1,070,262
Federal Home Loan Bank advances 253,500 225,000 225,000
Federal funds purchased 44,200 45,000 -
Repurchase agreements 21,000 - -
Interest payable and other liabilities 9,875 5,225 7,053
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Total liabilities 1,401,001 1,314,342 1,302,315
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STOCKHOLDERS' EQUITY
Common stock (no par value) - - -
Additional paid-in capital 18,945 20,414 50,458
Retained Earnings 132,999 123,867 119,988
Accumulated other comprehensive income 1,376 (835) (1,541)
----------- ----------- -----------
Total stockholders' equity 153,320 143,446 168,905
----------- ----------- -----------
Total liabilities and stockholders' equity $ 1,554,321 $ 1,457,788 $ 1,471,220
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