Middlefield Banc Corp. Reports First Quarter 2013 Net Income of $1.66 Million

MIDDLEFIELD, Ohio, April 23, 2013 /PRNewswire/ -- Middlefield Banc Corp. (OTCQB:  MBCN), reported net income of $1.66 million for the quarter ended March 31, 2013, compared to $1.52 million for the quarter ended March 31, 2012, an increase of 8.8%.  On a per share basis, the Company's diluted earnings were $0.82 for the 2013 first quarter, as compared to $0.86 for the comparable period of 2012.

Annualized returns on average equity ("ROE") and average assets ("ROA") for the 2013 quarter were 12.18% and 1.01%, respectively, compared with 12.81% and 0.94% for the first quarter of 2012.

"Our first quarter results continue the strong performance that we enjoyed in 2012.  To be able to continue to post this level of success is even more remarkable given the economic and regulatory environment that continues to present a great challenge," stated Thomas G. Caldwell, President and Chief Executive Officer.  "Our return on average assets of 1.01% and return on average equity of 12.18% reflect well on the effort put forth by our team."

"As we move forward into 2013, we continue to believe that we are well positioned to address the threats of continued sluggish economy, historically low interest rates, and increased regulatory costs," continued Caldwell.  Our focus remains on delivering excellence in customer service, increasing value to our shareholders, and operating our company in accordance with safe and sound banking practices."     

Net Interest Income

For the first three months of 2013, net interest income increased $39,000, or 0.7% from the same period last year.  While interest income experienced a decline of $218,000, or 3.0%, interest expense was $257,000, or 15.2%, lower in the 2013 quarter as compared to the same period of 2012.  The net interest margin for the three months ended March 31, 2013 was 3.92%, compared to 3.89% for the same period of the prior year.

Noninterest Income and Operating Expenses

Noninterest income for the first quarter of 2013 was $898,000.  This was a modest increase of 13.1% from the comparable period of 2012.  The largest factor in the increase was the recognition of $185,000 due to gains on the sale of securities.  A partial off-set was the gain recognized during the 2012 quarter of $85,000 from the sale of loans.  Deposit service charges increased year-over-year, primarily due to increased debit card usage and a greater amount of overdraft fees.     

Operating expense for the first quarter of 2013 totaled $4.0 million, an increase of $249,000, or 6.6% from the same period last year.  Salaries and benefits, the company's largest noninterest expense, contributed $121,000 to the increase.  This increase is largely related to the growth of the company, including increased staffing levels in regulatory compliance.  Higher data processing costs and equipment expense were directly related to the growth of the company since the first quarter of 2012.  The increase in professional fees is, in part, attributable to the negotiation of a new data processing contract and increased regulatory compliance efforts, while the company also incurred increased expenses related to the maintenance of other real estate owned properties. 

Balance Sheet

The company's total assets as of March 31, 2013 stood at $667.0 million, an increase of 1.4% over the $657.9 million in total assets reported March 31, 2012.  The March 31, 2013 total does reflect a decrease of 0.5% from the December 31, 2012 total.  Net loans at March 31, 2013, were $399.3 million, up $2.3 million from the comparable 2012 quarter-end.  Net loan totals were down 0.3% during the first three months of 2013.  The investment portfolio, which is entirely classified as available for sale, stood at $190.7 million at March 31, 2013.  This total reflects an increase of $6.9 million from the year-ago period and a decrease of $3.8 million from December 31, 2012.  Total deposits at the end of the first quarter 2013 were $591.5 million.  This represents an increase of $7.6 million from March 31, 2012 and a decrease of $1.8 million from year-end 2012.  

Shareholders' Equity and Dividends   

At March 31, 2013, shareholders' equity totaled $55.9 million, which was an increase of $7.4 million from the comparable 2012 quarter-end and $400,000 from December 31, 2012.  Tangible book value per share as of March 31, 2013 was $25.35.  During the first quarter of both 2013 and 2012, Middlefield paid cash dividends of $0.26 per share.

Asset Quality

For the three months ended March 31, 2013, management provided $313,000 to the allowance for loan losses, which compares to $600,000 for the same period of 2012.  Net charge-offs for the 2013 first quarter were $360,000, or 0.09% of average loans.  The allowance for loan losses at March 31, 2013 stood at $7.7 million, or 1.90% of total loans.  At March 31, 2012, the allowance for loan losses was $7.3 million, representing 1.80% of total loans.  Based on the evaluation of the adequacy of the allowance for loan losses, management believes that, at March 31, 2013, the allowance for loan losses was adequate and reflects probable losses in the loan portfolio.

Middlefield Banc Corp. headquartered in Middlefield, Ohio is a multi-bank holding company with total assets of $667.0 million.  The company's lead bank, The Middlefield Banking Company, operates full service banking centers and an LPL Financial® brokerage office serving Chardon, Cortland, Garrettsville, Mantua, Middlefield, Newbury, and Orwell.  The company also serves the central Ohio market through its Emerald Bank subsidiary, with offices in Dublin and Westerville, Ohio.  Additional information is available at www.middlefieldbank.com and www.emeraldbank.com

This press release of Middlefield Banc Corp. and the reports Middlefield Banc Corp. files with the Securities and Exchange Commission often contain "forward-looking statements" relating to present or future trends or factors affecting the banking industry and, specifically, the financial operations, markets and products of Middlefield Banc Corp.  These forward-looking statements involve certain risks and uncertainties.  There are a number of important factors that could cause Middlefield Banc Corp.'s future results to differ materially from historical performance or projected performance.  These factors include, but are not limited to: (1) a significant increase in competitive pressures among financial institutions; (2) changes in the interest rate environment that may reduce interest margins; (3) changes in prepayment speeds, charge-offs and loan loss provisions; (4) less favorable than expected general economic conditions; (5) legislative or regulatory changes that may adversely affect businesses in which Middlefield Banc Corp. is engaged; (6) technological issues which may adversely affect Middlefield Banc Corp.'s financial operations or customers; (7) changes in the securities markets; or (8) risk factors mentioned in the reports and registration statements Middlefield Banc Corp. files with the Securities and Exchange Commission.  Middlefield Banc Corp. undertakes no obligation to release revisions to these forward-looking statements or to reflect events or circumstances after the date of this press release.   

Contact:
James R. Heslop, 2nd
Executive Vice President/Chief Operating Officer
(440) 632-1666 Ext. 3219
[email protected]

SOURCE Middlefield Banc Corp.