Middlefield Banc Corp. Reports 2021 Full Year Financial Results

Rhea-AI Summary

Middlefield Banc Corp. (NASDAQ: MBCN) reported record financial results for 2021, with net income soaring 123.2% to $18.6 million and return on average assets rising to 1.36%. The net interest margin increased to 3.79%, while total noninterest income climbed 20.3% to $7.2 million. The company returned $16.6 million to shareholders via dividends and share repurchases. However, net loans decreased 11.3% to $967.3 million due to PPP forgiveness. Outlook for 2022 indicates ongoing challenges in loan growth, although initiatives to enhance digital offerings are underway.

Positive

• Net income increased 123.2% to $18.6 million.
• Return on average assets improved to 1.36%.
• Net interest margin rose to 3.79%.
• Total noninterest income increased 20.3% to $7.2 million.
• Returned $16.6 million to shareholders through dividends and share repurchases.

Negative

• Net loans decreased 11.3% to $967.3 million.
• Expectations for loan growth remain challenging in 2022.

MIDDLEFIELD, Ohio, Jan. 25, 2022 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the three and twelve months ended December 31, 2021.

2021 Financial Highlights (on a year-over-year basis unless noted):

• Returned $16.6 million of capital to shareholders through dividends and the repurchase of 512,449 shares
• Net income increased 123.2% to a record $18.6 million, compared to $8.3 million
• Net interest margin improved by 25 basis points to 3.79%, compared to 3.54%
• Total noninterest income increased 20.3% to $7.2 million
• Pre-tax, pre-provision⁽¹⁾ income increased 19.4% to $23.4 million
• Return on average assets increased to 1.36% from 0.64%
• Return on average equity increased to 12.74% from 5.87%
• Return on average tangible common equity⁽¹⁾ increased to 14.38% from 6.66%
• Efficiency ratio improved to 56.48%, compared to 58.77%
• Strong asset quality with nonperforming loans to total loans of 0.49%, compared to 0.71%

“We achieved record earnings in 2021 driven by strong asset quality, the contribution of PPP forgiveness, prudent expense management, and record annual noninterest income,” stated Thomas G. Caldwell, President and Chief Executive Officer. “We also returned a record amount of capital to our shareholders in 2021 through our share repurchase program and growing dividend policy. During 2021, we invested $12.3 million in our share repurchase program, retiring approximately 8.0% of our outstanding shares, and at an average price of $23.99 or 109.6% of our tangible book value of $21.88 at December 31, 2021. In addition, we paid $4.2 million in dividends during the year, reflecting an increase of 10.6% over the prior year.⁽¹⁾”  

“We expect loan growth will remain challenging in 2022, as we work to forgive the remaining $34.1 million balance of PPP loans in our loan portfolio at December 31, 2021, and we continue to focus on controlling risk and pricing on loans. However, we are proactively working on several growth initiatives that we expect will improve demand throughout 2022 and beyond. Strategies include enhancing our digital banking offerings, adding new lenders throughout our Northeast Ohio and Central Ohio markets, and pursuing new marketing initiatives that better promote our services to current and perspective customers.”  

“Having celebrated our 120^th year in business, I am proud of the milestones we achieved in 2021. I believe Middlefield’s local, community-oriented financial offerings are well positioned to add value to current and prospective customers and look forward to the Company’s success in the future. Finally, our accomplishments are a direct result of the commitment and dedication of our associates and I want to thank everyone at Middlefield for their continued hard work,” concluded Mr. Caldwell.

Income Statement
For the 2021 full year, net interest income increased 11.3% to $48.3 million, compared to $43.4 million for the same period last year. The net interest margin for the 2021 twelve-month period was 3.79%, compared to 3.54% for the same period last year. Net interest income for the 2021 fourth quarter was $12.0 million, compared to $11.3 million for the 2020 fourth quarter. The 6.4% increase in net interest income for the 2021 fourth quarter was largely a result of a 51.7% reduction in interest expense. The net interest margin for the 2021 fourth quarter was 3.82%, compared to 3.49% for the same period of 2020.

For the 2021 full year, noninterest income increased 20.3% to $7.2 million, compared to $6.0 million for the same period last year. Noninterest income for the 2021 fourth quarter was $1.5 million, compared to $1.6 million for the 2020 fourth quarter. These increases were driven primarily through the service charges recognized on deposit account activity.

For the 2021 full year, noninterest expense increased 7.7% to $32.1 million, compared to $29.8 million for the same period last year. For the 2021 fourth quarter, noninterest expense was $7.9 million, compared to $7.8 million for the same period last year. These changes were driven primarily by changes in salaries and benefits expense between the periods.

Net income for the year ended December 31, 2021, was a record $18.6 million, or a record $3.00 per diluted share, compared to $8.3 million, or $1.30 per diluted share for the same period last year. Net income for the 2021 fourth quarter, was $4.8 million, or $0.81 per diluted share, compared to $2.5 million, or $0.39 per diluted share for the same period last year.

Balance Sheet
Total assets at December 31, 2021, were $1.33 billion from $1.39 billion at December 31, 2020. Net loans at December 31, 2021, decreased 11.3% to $967.3 million, compared to $1.09 billion at December 31, 2020, as PPP forgiveness increased. Throughout 2021, Middlefield has helped customers receive $149.6 million of forgiveness payments under the terms of the program, including processing $20.1 million of forgiveness payments during the fourth quarter of 2021. The balance of PPP loans outstanding at December 31, 2021, was $34.1 million.

Total deposits at December 31, 2021, were $1.17 billion, compared to $1.23 billion at December 31, 2020. The 4.8% decrease in deposits was primarily due to a decline in time-based and money market accounts, partially offset by increased noninterest-bearing, savings, and interest-bearing accounts. The investment portfolio was $170.2 million December 31, 2021, compared with $114.4 million at December 31, 2020.

Donald L. Stacy, Chief Financial Officer stated, “We are well positioned to continue returning capital to our shareholders, while supporting our growth oriented strategic plan as a result of our strong balance sheet, liquidity position, and asset quality. The prudent funding of our allowance in 2020, combined with favorable asset quality throughout 2021, has resulted in one of the strongest reserve levels in our 120-year history.”  

“Reflecting our commitment to help our communities navigate the Covid-19 pandemic, we helped our customers receive $212.6 million of PPP loans over the past two years, while processing $178.4 million of forgiveness during this period. In addition, we also supported 390 customers during the pandemic through our Covid-19 related deferral programs. At December 31, 2021, there were no loans with Covid-19 related payment modifications,” concluded Mr. Stacy.

Stockholders’ Equity and Dividends
At December 31, 2021, shareholders’ equity increased 1.1% to $145.3 million compared to $143.8 million at December 31, 2020. On a per share basis, shareholders’ equity at December 31, 2021, increased 9.5% to $24.68 compared to $22.54 at the same period last year.  

Tangible stockholders’ equity⁽¹⁾ increased 1.5% to $128.9 million for the 2021 fourth quarter, compared to $127.0 million at December 31, 2020. On a per-share basis, tangible stockholders’ equity⁽¹⁾ at December 31, 2021, increased 9.9% to $21.88, compared to $19.91 at December 31, 2020.

For the 2021 full year, cash dividends declared per share increased 15.0% to $0.69 totaling $4.2 million, compared to $0.60 per share or $3.8 million for the same period last year. Dividends in 2021, included a $0.04 per share one-time dividend payment declared in the 2021 fourth quarter.

At December 31, 2021, the Company had an equity-to-assets leverage ratio of 10.92%, compared to 10.33% at December 31, 2020. The year-over-year increase in the Company’s equity-to-assets leverage ratio occurred even as Middlefield invested $12.3 million in its share repurchase program.

Asset Quality
The Company had a negative provision for loan losses for the 2021 fourth quarter of $200,000, versus a provision for loan losses of $2.1 million for the fourth quarter last year. The year-over-year decline in the provision for loan losses was partially due to strong asset quality and last year’s prudent build in the Company’s allowance for loan losses associated with the potential economic impacts caused by the COVID-19 pandemic. The provision for loan losses for 2021 full year was $700,000 compared to $9.8 million for the 2020 full year.  

Net recoveries were $308,000, or 0.12% of average loans, annualized, during the 2021 fourth quarter, compared to no net charge-offs for the same quarter last year. For the 2021 full year, net recoveries were $183,000, or 0.02% of average loans, compared to net charge-offs of $3.1 million, or 0.29% of average loans for the full year ended December 31, 2020.

Nonperforming assets at December 31, 2021, improved 22.3% to $11.9 million, compared to $15.2 million at December 31, 2020. Nonperforming loans at December 31 2021, were $4.9 million, a 38.2% decrease from the same period last year. The allowance for loan losses at December 31, 2021, stood at $14.3 million, or 1.46% of total loans, compared to $13.5 million, or 1.22% of total loans at December 31, 2020.

About Middlefield Banc Corp.
Middlefield Banc Corp., headquartered in Middlefield, Ohio, is the bank holding company of The Middlefield Banking Company with total assets of $1.33 billion at December 31, 2021. The bank operates 16 full-service banking centers and an LPL Financial® brokerage office serving Beachwood, Chardon, Cortland, Dublin, Garrettsville, Mantua, Middlefield, Newbury, Orwell, Plain City, Powell, Solon, Sunbury, Twinsburg, and Westerville. The Bank also operates a Loan Production Office in Mentor, Ohio.  

Additional information is available at www.middlefieldbank.bank

⁽¹⁾ This press release includes disclosure of Middlefield Banc Corp.’s tangible book value per share, return on average tangible equity, and pre-tax, pre-provision for loan losses income, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Middlefield Banc Corp. believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Middlefield Banc Corp.’s marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures are included in the tables following Consolidated Financial Highlights below.

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) the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions; (8) changes in the securities markets; or (9) 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.   

Company Contact:	Investor and Media Contact:
Thomas G. Caldwell President/Chief Executive Officer Middlefield Banc Corp. (440) 632-1666 Ext. 3200 tcaldwell@middlefieldbank.com	Andrew M. Berger Managing Director SM Berger & Company, Inc. (216) 464-6400 andrew@smberger.com

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, unaudited)

		December 31,				September 30,				June 30,				March 31,				December 31,
Balance Sheets (period end)		2021				2021				2021				2021				2020
ASSETS
Cash and due from banks	$	97,172			$	113,177			$	82,435			$	93,037			$	92,874
Federal funds sold		22,322				19,174				10,034				7,436				19,543
Cash and cash equivalents		119,494				132,351				92,469				100,473				112,417
Equity securities, at fair value		819				833				730				690				609
Investment securities available for sale, at fair value		170,199				163,057				150,850				123,218				114,360
Loans held for sale		1,051				676				790				1,260				878
Loans:
Commercial real estate:
Owner occupied		111,470				110,883				109,777				104,379				103,121
Non-owner occupied		283,618				310,222				304,324				304,623				309,424
Multifamily		31,189				30,762				34,926				39,015				39,562
Residential real estate		240,089				232,020				228,102				228,052				233,995
Commercial and industrial		148,812				163,052				200,558				242,651				232,044
Home equity lines of credit		104,355				105,450				107,685				111,474				112,543
Construction and other		54,148				49,378				62,229				64,960				63,573
Consumer installment		8,010				8,515				8,694				9,046				9,823
Total loans		981,691				1,010,282				1,056,295				1,104,200				1,104,085
Less allowance for loan and lease losses		14,342				14,234				14,200				14,122				13,459
Net loans		967,349				996,048				1,042,095				1,090,078				1,090,626
Premises and equipment, net		17,272				17,507				17,680				18,002				18,333
Goodwill		15,071				15,071				15,071				15,071				15,071
Core deposit intangibles		1,403				1,484				1,564				1,644				1,724
Bank-owned life insurance		17,060				16,954				16,846				16,740				16,938
Other real estate owned		6,992				7,090				7,090				7,372				7,387
Accrued interest receivable and other assets		14,296				14,794				15,033				13,545				13,636
TOTAL ASSETS	$	1,331,006			$	1,365,865			$	1,360,218			$	1,388,093			$	1,391,979
		December 31,				September 30,				June 30,				March 31,				December 31,
		2021				2021				2021				2021				2020
LIABILITIES
Deposits:
Noninterest-bearing demand	$	334,171			$	316,770			$	326,665			$	317,224			$	291,347
Interest-bearing demand		196,308				237,576				207,725				215,684				195,722
Money market		177,281				178,423				183,453				187,204				198,493
Savings		260,125				256,114				252,171				259,973				243,888
Time		198,725				211,674				225,271				245,342				295,750
Total deposits		1,166,610				1,200,557				1,195,285				1,225,427				1,225,200
Other borrowings		12,901				12,966				13,031				13,095				17,038
Accrued interest payable and other liabilities		6,160				6,287				5,858				4,901				5,931
TOTAL LIABILITIES		1,185,671				1,219,810				1,214,174				1,243,423				1,248,169
STOCKHOLDERS' EQUITY
Common stock, no par value; 10,000,000 shares authorized, 7,330,548
shares issued, 5,888,737 shares outstanding as of December 31, 2021		87,131				87,131				87,131				87,073				86,886
Retained earnings		83,971				80,376				76,150				72,729				69,578
Accumulated other comprehensive income		3,462				3,610				3,893				2,917				4,284
Treasury stock, at cost; 1,441,811 shares as of December 31, 2021		(29,229	)			(25,062	)			(21,130	)			(18,049	)			(16,938	)
TOTAL STOCKHOLDERS' EQUITY		145,335				146,055				146,044				144,670				143,810
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,331,006			$	1,365,865			$	1,360,218			$	1,388,093			$	1,391,979

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, except per share and share amounts, unaudited)

		For the Three Months Ended																For the Twelve Months Ended
		December 31,				September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
Statements of Income		2021				2021			2021			2021			2020			2021			2020
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	11,586			$	12,258		$	11,885		$	12,167		$	12,041		$	47,896		$	49,003
Interest-earning deposits in other institutions		30				30			12			18			9			90			118
Federal funds sold		1				1			1			-			1			3			22
Investment securities:
Taxable interest		438				461			410			370			297			1,679			909
Tax-exempt interest		732				673			602			558			591			2,565			2,472
Dividends on stock		23				24			26			29			28			102			114
Total interest and dividend income		12,810				13,447			12,936			13,142			12,967			52,335			52,638
INTEREST EXPENSE
Deposits		783				915			1,010			1,205			1,655			3,913			8,962
Short-term borrowings		-				-			-			-			(2	)		-			79
Other borrowings		37				37			39			39			43			152			209
Total interest expense		820				952			1,049			1,244			1,696			4,065			9,250
NET INTEREST INCOME		11,990				12,495			11,887			11,898			11,271			48,270			43,388
Provision (credit) for loan losses		(200	)			-			200			700			2,100			700			9,840
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES		12,190				12,495			11,687			11,198			9,171			47,570			33,548
NONINTEREST INCOME
Service charges on deposit accounts		906				876			856			787			729			3,425			2,539
(Losses) gains on equity securities		(14	)			102			40			81			56			209			(101	)
Earnings on bank-owned life insurance		106				108			106			226			106			546			427
Gains on sale of loans		118				309			221			592			332			1,240			1,487
Other income		419				426			409			532			387			1,786			1,638
Total noninterest income		1,535				1,821			1,632			2,218			1,610			7,206			5,990
NONINTEREST EXPENSE
Salaries and employee benefits		4,088				4,488			4,321			4,254			4,458			17,151			15,835
Occupancy expense		572				457			549			600			628			2,178			2,158
Equipment expense		358				333			313			357			365			1,361			1,308
Data processing costs		660				736			698			786			617			2,880			2,650
Ohio state franchise tax		285				287			286			286			251			1,144			1,082
Federal deposit insurance expense		50				150			150			144			103			494			423
Professional fees		435				136			323			419			352			1,313			1,359
(Losses) gains on other real estate owned		(66	)			9			22			46			44			11			(172	)
Advertising expense		221				222			221			221			55			885			698
Software amortization expense		119				88			74			80			66			361			351
Core deposit intangible amortization		80				81			80			80			83			321			332
Other expense		1,059				951			889			1,080			803			3,979			3,764
Total noninterest expense		7,861				7,938			7,926			8,353			7,825			32,078			29,788
Income before income taxes		5,864				6,378			5,393			5,063			2,956			22,698			9,750
Income taxes		1,027				1,174			968			896			467			4,065			1,401
NET INCOME	$	4,837			$	5,204		$	4,425		$	4,167		$	2,489		$	18,633		$	8,349
PTPP (1)	$	5,664			$	6,378		$	5,593		$	5,763		$	5,056		$	23,398		$	19,590
(1)  The pre-tax pre-provision (PTPP) is the income before income taxes before provision for loan losses considerations, for reconciliation of non-GAAP measures.

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, except per share and share amounts, unaudited)

 

		For the Three Months Ended																				For the Twelve Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
		2021				2021				2021				2021				2020				2021				2020
Per common share data
Net income per common share - basic	$	0.81			$	0.85			$	0.70			$	0.65			$	0.39			$	3.01			$	1.31
Net income per common share - diluted	$	0.81			$	0.85			$	0.70			$	0.65			$	0.39			$	3.00			$	1.30
Dividends declared per share	$	0.21			$	0.16			$	0.16			$	0.16			$	0.15			$	0.69			$	0.60
Book value per share (period end)	$	24.68			$	24.13			$	23.50			$	22.80			$	22.54			$	24.68			$	22.54
Tangible book value per share (period end) (2) (3)	$	21.88			$	21.39			$	20.82			$	20.17			$	19.91			$	21.88			$	19.91
Dividends declared	$	1,242			$	978			$	1,004			$	1,016			$	957			$	4,240			$	3,834
Dividend yield		3.37	%			2.66	%			2.72	%			3.10	%			2.65	%			2.79	%			2.67	%
Dividend payout ratio		25.68	%			18.79	%			22.69	%			24.38	%			38.45	%			22.76	%			45.92	%
Average shares outstanding - basic		5,951,838				6,136,648				6,297,071				6,364,132				6,378,706				6,186,666				6,385,350
Average shares outstanding - diluted		5,975,333				6,157,181				6,312,230				6,378,493				6,397,681				6,211,076				6,404,524
Period ending shares outstanding		5,888,737				6,054,083				6,215,511				6,344,657				6,379,323				5,888,737				6,379,323
Selected ratios
Return on average assets		1.41	%			1.51	%			1.30	%			1.22	%			0.72	%			1.36	%			0.64	%
Return on average equity		13.17	%			13.95	%			12.10	%			11.65	%			6.76	%			12.74	%			5.87	%
Return on average tangible common equity (2) (4)		14.85	%			15.71	%			13.65	%			13.17	%			7.64	%			14.38	%			6.66	%
Efficiency (1)		56.65	%			54.15	%			57.28	%			57.91	%			59.29	%			56.48	%			58.77	%
Equity to assets at period end		10.92	%			10.69	%			10.74	%			10.42	%			10.33	%			10.92	%			10.33	%
Noninterest expense to average assets		0.58	%			0.58	%			0.58	%			0.60	%			0.57	%			2.34	%			2.27	%
(1)  The efficiency ratio is calculated by dividing noninterest expense less amortization of intangibles by the sum of net interest income on a fully taxable equivalent basis plus noninterest income
(2)  See reconciliation of non-GAAP measures below
(3)  Calculated by dividing tangible common equity by shares outstanding
(4)  Calculated by dividing annualized net income for each period by average tangible common equity

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(unaudited)

		For the Three Months Ended																				For the Twelve Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
Yields		2021				2021				2021				2021				2020				2021				2020
Interest-earning assets:
Loans receivable (2)		4.61	%			4.74	%			4.43	%			4.48	%			4.28	%			4.56	%			4.55	%
Investment securities (2)		3.30	%			3.37	%			3.47	%			3.75	%			3.65	%			3.45	%			3.68	%
Interest-earning deposits with other banks		0.20	%			0.21	%			0.18	%			0.20	%			0.21	%			0.20	%			0.45	%
Total interest-earning assets		4.07	%			4.20	%			4.05	%			4.11	%			4.00	%			4.11	%			4.28	%
Deposits:
Interest-bearing demand deposits		0.12	%			0.12	%			0.12	%			0.16	%			0.21	%			0.13	%			0.31	%
Money market deposits		0.47	%			0.46	%			0.46	%			0.47	%			0.53	%			0.47	%			0.87	%
Savings deposits		0.06	%			0.06	%			0.06	%			0.07	%			0.11	%			0.06	%			0.24	%
Certificates of deposit		0.90	%			1.08	%			1.19	%			1.28	%			1.56	%			1.13	%			1.87	%
Total interest-bearing deposits		0.36	%			0.41	%			0.46	%			0.53	%			0.70	%			0.44	%			1.02	%
Non-Deposit Funding:
Borrowings		1.13	%			1.13	%			1.18	%			1.10	%			0.95	%			1.13	%			0.75	%
Total interest-bearing liabilities		0.37	%			0.42	%			0.47	%			0.54	%			0.71	%			0.45	%			1.01	%
Cost of deposits		0.26	%			0.30	%			0.34	%			0.40	%			0.54	%			0.32	%			0.79	%
Cost of funds		0.27	%			0.31	%			0.35	%			0.41	%			0.55	%			0.33	%			0.79	%
Net interest margin (1)		3.82	%			3.91	%			3.72	%			3.73	%			3.49	%			3.79	%			3.54	%
(1) Net interest margin represents net interest income as a percentage of average interest-earning assets.
(2) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were determined using an effective tax rate of 21%.

		For the Three Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
Asset quality data		2021				2021				2021				2021				2020
(Dollar amounts in thousands, unaudited)
Nonperforming loans (1)	$	4,859			$	6,806			$	7,760			$	8,958			$	7,858
Other real estate owned		6,992				7,090				7,090				7,372				7,387
Nonperforming assets	$	11,851			$	13,896			$	14,850			$	16,330			$	15,245
Allowance for loan losses	$	14,342			$	14,234			$	14,200			$	14,122			$	13,459
Allowance for loan losses/total loans		1.46	%			1.41	%			1.34	%			1.28	%			1.22	%
Net charge-offs (recoveries):
Quarter-to-date	$	(308	)		$	(34	)		$	122			$	37			$	0
Year-to-date		(183	)			125				159				37				3,149
Net charge-offs (recoveries) to average loans, annualized:
Quarter-to-date		(0.12	)%			(0.01	)%			0.05	%			0.01	%			0.00	%
Year-to-date		(0.02	)%			0.02	%			0.03	%			0.01	%			0.29	%
Nonperforming loans/total loans		0.49	%			0.67	%			0.73	%			0.81	%			0.71	%
Allowance for loan losses/nonperforming loans		295.16	%			209.14	%			182.99	%			157.65	%			171.28	%
Nonperforming assets/total assets		0.89	%			1.02	%			1.09	%			1.18	%			1.10	%
(1) Nonperforming loans exclude troubled debt restructurings that are performing in accordance with their terms over a prescribed period of time.

Reconciliation of Common Stockholders' Equity to Tangible Common Equity
		For the Three Months Ended
(Dollar amounts in thousands, unaudited)		December 31,			September 30,			June 30,			March 31,			December 31,
		2021			2021			2021			2021			2020
Stockholders' Equity	$	145,335		$	146,055		$	146,044		$	144,670		$	143,810
Less Goodwill and other intangibles		16,474			16,555			16,635			16,715			16,795
Tangible Common Equity	$	128,861		$	129,500		$	129,409		$	127,955		$	127,015
Shares outstanding		5,888,737			6,054,083			6,215,511			6,344,657			6,379,323
Tangible book value per share	$	21.88		$	21.39		$	20.82		$	20.17		$	19.91

Reconciliation of Average Equity to Return on Average Tangible Common Equity
		For the Three Months Ended															For the Twelve Months Ended
		December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
		2021			2021			2021			2021			2020			2021			2020
Average Stockholders' Equity	$	145,716		$	148,048		$	146,719		$	145,065		$	146,374		$	146,237		$	142,241
Less Average Goodwill and other intangibles		16,513			16,594			16,674			16,754			16,836			16,634			16,960
Average Tangible Common Equity	$	129,203		$	131,454		$	130,045		$	128,311		$	129,538		$	129,603		$	125,281
Net income	$	4,837		$	5,204		$	4,425		$	4,167		$	2,489		$	18,633		$	8,349
Return on average tangible common equity (annualized)		14.85%			15.71%			13.65%			13.17%			7.64%			14.38%			6.66%

Reconciliation of Pre-Tax Pre-Provision Income (PTPP)
		For the Three Months Ended															For the Twelve Months Ended
		December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
		2021			2021			2021			2021			2020			2021			2020
Net income	$	4,837		$	5,204		$	4,425		$	4,167		$	2,489		$	18,633		$	8,349
Add Income Taxes		1,027			1,174			968			896			467			4,065			1,401
Add Provision for loan losses		(200)			-			200			700			2,100			700			9,840
PTPP	$	5,664		$	6,378		$	5,593		$	5,763		$	5,056		$	23,398		$	19,590

MIDDLEFIELD BANC CORP.
Average Balance Sheets
(Dollar amounts in thousands, unaudited)

		For the Three Months Ended
		December 31,										December 31,
		2021										2020
		Average						Average				Average						Average
		Balance			Interest			Yield/Cost				Balance			Interest			Yield/Cost
Interest-earning assets:
Loans receivable (3)	$	999,229		$	11,586			4.61	%		$	1,121,259		$	12,041			4.28	%
Investment securities (3)		164,254			1,170			3.30	%			113,801			888			3.65	%
Interest-earning deposits with other banks (4)		104,804			54			0.20	%			70,803			38			0.21	%
Total interest-earning assets		1,268,287			12,810			4.07	%			1,305,863			12,967			4.00	%
Noninterest-earning assets		90,556										78,064
Total assets	$	1,358,843									$	1,383,927
Interest-bearing liabilities:
Interest-bearing demand deposits	$	212,861		$	66			0.12	%		$	186,933		$	97			0.21	%
Money market deposits		180,201			214			0.47	%			191,771			255			0.53	%
Savings deposits		257,344			39			0.06	%			238,991			66			0.11	%
Certificates of deposit		204,904			464			0.90	%			316,293			1,237			1.56	%
Short-term borrowings		-			-			0.00	%			26			-			0.00	%
Other borrowings		12,934			37			1.13	%			17,068			41			0.96	%
Total interest-bearing liabilities		868,244			820			0.37	%			951,082			1,696			0.71	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		337,900										281,608
Other liabilities		6,983										4,863
Stockholders' equity		145,716										146,374
Total liabilities and stockholders' equity	$	1,358,843									$	1,383,927
Net interest income				$	11,990									$	11,271
Interest rate spread (1)								3.70	%									3.29	%
Net interest margin (2)								3.82	%									3.49	%
Ratio of average interest-earning assets to
average interest-bearing liabilities								146.07	%									137.30	%
(1) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
(2) Net interest margin represents net interest income as a percentage of average interest-earning assets.
(3) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $210 and $178 for the three months ended December 31, 2021 and 2020, respectively
(4) Includes dividends received on restricted stock.

		For the Three Months Ended
		December 31,										September 30,
		2021										2021
		Average						Average				Average						Average
		Balance			Interest			Yield/Cost				Balance			Interest			Yield/Cost
Interest-earning assets:
Loans receivable (3)	$	999,229		$	11,586			4.61	%		$	1,027,935		$	12,258			4.74	%
Investment securities (3)		164,254			1,170			3.30	%			154,718			1,134			3.37	%
Interest-earning deposits with other banks (4)		104,804			54			0.20	%			105,910			55			0.21	%
Total interest-earning assets		1,268,287			12,810			4.07	%			1,288,563			13,447			4.20	%
Noninterest-earning assets		90,556										82,952
Total assets	$	1,358,843									$	1,371,515
Interest-bearing liabilities:
Interest-bearing demand deposits	$	212,861		$	66			0.12	%		$	225,264		$	67			0.12	%
Money market deposits		180,201			214			0.47	%			182,831			214			0.46	%
Savings deposits		257,344			39			0.06	%			253,960			38			0.06	%
Certificates of deposit		204,904			464			0.90	%			218,323			596			1.08	%
Short-term borrowings		-			-			0.00	%			-			-			0.00	%
Other borrowings		12,934			37			1.13	%			12,999			37			1.13	%
Total interest-bearing liabilities		868,244			820			0.37	%			893,377			952			0.42	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		337,900										323,726
Other liabilities		6,983										6,364
Stockholders' equity		145,716										148,048
Total liabilities and stockholders' equity	$	1,358,843									$	1,371,515
Net interest income				$	11,990									$	12,495
Interest rate spread (1)								3.70	%									3.78	%
Net interest margin (2)								3.82	%									3.91	%
Ratio of average interest-earning assets to
average interest-bearing liabilities								146.07	%									144.24	%
(1) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
(2) Net interest margin represents net interest income as a percentage of average interest-earning assets.
(3) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $210 and $195 for the three months ended December 31, 2021, and September 30, 2021, respectively.
(4) Includes dividends received on restricted stock.

	For the Twelve Months Ended
	December 31,												December 31,
	2021												2020
	Average								Average				Average								Average
	Balance				Interest				Yield/Cost				Balance				Interest				Yield/Cost
Interest-earning assets:
Loans receivable (3)	$	1,052,351			$	47,896			4.56	%			$	1,079,788			$	49,003			4.55	%
Investment securities (3)	142,705				4,244				3.45	%			109,863				3,381				3.68	%
Interest-earning deposits with other banks (4)	97,417				195				0.20	%			56,222				254				0.45	%
Total interest-earning assets	1,292,473				52,335				4.11	%			1,245,873				52,638				4.28	%
Noninterest-earning assets	78,802												68,219
Total assets	$	1,371,275											$	1,314,092
Interest-bearing liabilities:
Interest-bearing demand deposits	$	212,063			$	274			0.13	%			$	144,897			$	445			0.31	%
Money market deposits	186,009				869				0.47	%			172,587				1,501				0.87	%
Savings deposits	255,267				162				0.06	%			211,151				510				0.24	%
Certificates of deposit	231,662				2,608				1.13	%			347,609				6,506				1.87	%
Short-term borrowings	85				-				0.00	%			22,637				79				0.35	%
Other borrowings	13,313				152				1.14	%			15,629				209				1.34	%
Total interest-bearing liabilities	898,399				4,065				0.45	%			914,510				9,250				1.01	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits	320,104												252,615
Other liabilities	6,535												4,726
Stockholders' equity	146,237												142,241
Total liabilities and stockholders' equity	$	1,371,275											$	1,314,092
Net interest income					$	48,270											$	43,388
Interest rate spread (1)									3.66	%											3.27	%
Net interest margin (2)									3.79	%											3.54	%
Ratio of average interest-earning assets to
average interest-bearing liabilities									143.86	%											136.23	%
(1) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
(2) Net interest margin represents net interest income as a percentage of average interest-earning assets.
(3) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $752 and $742 for 2021 and 2020, respectively.
(4) Includes dividends received on restricted stock.

 

 

FAQ

What were Middlefield Banc Corp.'s 2021 financial results?

Middlefield Banc Corp. reported a record net income of $18.6 million for 2021, up 123.2% from the previous year.

What is the stock symbol for Middlefield Banc Corp.?

The stock symbol for Middlefield Banc Corp. is MBCN.

How much capital did MBCN return to shareholders in 2021?

Middlefield Banc Corp. returned $16.6 million to shareholders in 2021 through dividends and share repurchases.

What challenges does MBCN foresee in 2022?

Middlefield Banc Corp. anticipates challenges in loan growth in 2022 while focusing on improving digital banking offerings.

What is the status of MBCN's loans related to the PPP program?

As of December 31, 2021, Middlefield Banc Corp. had $34.1 million in PPP loans outstanding.