Middlefield Banc Corp. Reports 2021 Nine Month Financial Results

Rhea-AI Summary

Middlefield Banc Corp. (NASDAQ: MBCN) reported strong financial results for the nine months ending September 30, 2021, achieving a net income of $13.8 million, or $2.19 per diluted share. Notable highlights include a record third-quarter income of $5.2 million, a net interest margin rise of 23 basis points to 3.79%, and a 29.5% increase in noninterest income to $5.7 million. Return on average assets improved to 1.34%, while net charge-offs decreased by 96%. The company has repurchased 346,103 shares this year, demonstrating commitment to shareholder value.

Positive

• Net income increased to $13.8 million, or $2.19 per diluted share.
• Record third-quarter net income of $5.2 million, or $0.85 per diluted share.
• Net interest margin improved by 23 basis points to 3.79%.
• Total noninterest income rose 29.5% to $5.7 million.
• Pre-tax, pre-provision income increased by 22% to $17.7 million.
• Return on average assets rose to 1.34% from 0.61%.
• Year-to-date net charge-offs fell by 96% to $125,000.
• Repurchased 346,103 shares of stock at an average price of $23.47.

Negative

• Net loans decreased by 10.5% to $996.1 million due to the impact of PPP forgiveness.
• Noninterest expense increased 10.3% to $24.2 million.

MIDDLEFIELD, Ohio, Oct. 18, 2021 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the three and nine months ended September 30, 2021.

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

• Net income of $13.8 million, or $2.19 per diluted share driven by record third quarter earnings of $5.2 million, or a record $0.85 per diluted share
• Net interest margin improved by 23 basis points to 3.79%, compared to 3.56%
• Total noninterest income was up 29.5% to $5.7 million
• Pre-tax, pre-provision⁽¹⁾ income increased 22.0% to $17.7 million
• Return on average assets increased to 1.34% from 0.61%
• Return on average equity increased to 12.58% from 5.48%
• Return on average tangible common equity⁽¹⁾ increased to 14.20% from 6.22%
• Efficiency ratio improved to 56.42%, compared to 58.59%
• Year-to-date net charge-offs declined 96.0% to $125,000
• Middlefield has repurchased 346,103 shares of stock year-to-date, including 165,058 shares repurchased during the 2021 third quarter

“As we celebrate our 120^th anniversary, I am extremely pleased with the strong financial results we are achieving,” stated Thomas G. Caldwell, President and Chief Executive Officer. “We continue generating strong profitability as higher net interest margin, favorable asset quality and stable noninterest income successfully offset challenging loan growth and higher noninterest expense.”

“We also continue to allocate capital to our share repurchase program. Year-to-date, we have repurchased 346,103 shares of our common stock at an average price of $23.47 per share, which includes 165,058 shares repurchased in the third quarter at an average price of $23.82 per share. Shares repurchased this year have been at an average price of 109.7% to tangible book value of $21.39 at September 30, 2021, which we believe is a tremendous value and offers a significant opportunity for our shareholders to increase their ownership in the Company,” continued Mr. Caldwell.

“While economic and interest rate uncertainty remains, we are focused on the items under our control. We are dedicated to supporting our communities, managing risk, and looking for new opportunities to drive interest and noninterest income. These are many of the same principles that have made Middlefield successful over the past 120 years and we are committed to continue creating sustainable value for our shareholders,” concluded Mr. Caldwell.

Income Statement
Net interest income for the nine-month period ended September 30, 2021, increased 13.0% to $36.3 million, compared to $32.1 million for the same period last year. Year-to-date, the net interest margin was 3.79%, compared to 3.56% for the same period last year. Net interest income for the 2021 third quarter was $12.5 million, compared to $11.4 million for the 2020 third quarter. The 10.0% increase in net interest income for the 2021 third quarter was largely a result of a 55.7% reduction in interest expense. The net interest margin for the 2021 third quarter was 3.91%, compared to 3.57% for the same period of 2020.

For the 2021 nine-month period, noninterest income increased 29.5% to $5.7 million, compared to $4.4 million for the same period last year. Noninterest income was $1.8 million for both the 2021 and 2020 third quarters.

For the 2021 nine months, noninterest expense increased 10.3% to $24.2 million, compared to $22.0 million for the same period last year. Operating costs in the 2021 third quarter increased 13.0% to $7.9 million from $7.0 million for the 2020 third quarter.

Net income for the 2021 nine-month period ended September 30, 2021, was a record $13.8 million, or a record $2.19 per diluted share, compared to $5.9 million, or $0.92 per diluted share for the same period last year. Net income for the 2021 third quarter ended September 30, 2021, was a quarterly record of $5.2 million, or $0.85 per diluted share, compared to $1.9 million, or $0.29 per diluted share for the same period last year.

Balance Sheet
Total assets at September 30, 2021, increased slightly to approximately $1.37 billion from $1.36 billion at September 30, 2020. Net loans at September 30, 2021, decreased 10.5% to $996.1 million, compared to $1.11 billion at September 30, 2020 as PPP forgiveness increased. Year-to-date, Middlefield has helped customers receive $129.5 million of forgiveness payments under the terms of the program, including processing $36.0 million of forgiveness payments during the third quarter of 2021. The balance of PPP loans outstanding at September 30, 2021, was $54.2 million.  

Total deposits at September 30, 2021, were approximately $1.20 billion, compared to $1.19 billion at September 30, 2020. The 0.6% increase in deposits was primarily due to increases in interest-bearing, savings, and non-interest-bearing accounts, partially offset by decreased money market and time-based accounts. The investment portfolio, which is entirely classified as available for sale, was $163.1 million September 30, 2021, compared with $113.0 million at September 30, 2020.

Donald L. Stacy, Chief Financial Officer stated, “We ended the third quarter with one of the strongest balance sheets in our 120-year history. In addition, asset quality remains strong and is benefitting from stable economic trends within our Ohio markets, as well as our focus on prudently managing risk. The allowance for loan losses to total loans now stands at 1.41%, compared to 1.34% at June 30, 2021, and 1.01% at September 30, 2020. In addition, at September 30, 2021, we only had three loans in deferral status primarily within the hospitality industry representing a balance of $9.7 million,” concluded Mr. Stacy.

Stockholders’ Equity and Dividends
At September 30, 2021, shareholders’ equity increased 2.8% to $146.1 million compared to $142.1 million at September 30, 2020. On a per share basis, shareholders’ equity at September 30, 2021, was $24.13 compared to $22.27 at the same period last year.

Tangible stockholders’ equity⁽¹⁾ increased 3.5% to $129.5 million for the 2021 third quarter, compared to $125.2 million at September 30, 2020. On a per-share basis, tangible stockholders’ equity⁽¹⁾ was $21.39 at September 30, 2021, compared to $19.63 at September 30, 2020.

For the nine-month period ended September 30, 2021, the Company declared cash dividends of $0.48 per share totaling $3.0 million, compared to $0.45 per share or $2.9 million for the same period last year.

At September 30, 2021, the Company had an equity-to-assets leverage ratio of 10.69%, compared to 10.41% at September 30, 2020. The year-over-year increase in the Company’s equity-to-assets leverage ratio occurred even with the $8.1 million year-to-date investment in Middlefield’s share repurchase program.

Asset Quality
There was no provision for loan losses for the 2021 third quarter versus a $4.0 million provision for loan losses for the same period 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 the 2021 nine-month period was $900,000 versus $7.7 million for the same period last year.

Net recoveries of $34,000, or -0.01% of average loans, annualized, during the 2021 third quarter, compared to net charge-offs of $2.9 million, or 1.01% of average loans, annualized, at September 30, 2020. Year-to-date net charge-offs were $125,000, or 0.02% of average loans, annualized, compared to net charge-offs of $3.1 million, or 0.39% of average loans, annualized for the nine-months ended September 30, 2020.

Nonperforming assets at September 30, 2021, were $13.9 million, compared to $14.1 million at September 30, 2020. Nonperforming loans at September 30, 2021, were $6.8 million (excluding $9.7 million of loans currently on payment deferral), a 1.7% increase from the same period last year, but down 12.3% from the 2021 second quarter. The allowance for loan losses at September 30, 2021, stood at $14.2 million, or 1.41% of total loans, compared to $11.4 million, or 1.01% of total loans at September 30, 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 $1.37 billion at September 30, 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		Andrew M. Berger
President/Chief Executive Officer		Managing Director
Middlefield Banc Corp.		SM Berger & Company, Inc.
(440) 632-1666 Ext. 3200		(216) 464-6400
tcaldwell@middlefieldbank.com		andrew@smberger.com

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, unaudited)
		September 30,				June 30,				March 31,				December 31,				September 30,
Balance Sheets (period end)		2021				2021				2021				2020				2020
ASSETS
Cash and due from banks	$	113,177			$	82,435			$	93,037			$	92,874			$	46,097
Federal funds sold		19,174				10,034				7,436				19,543				6,884
Cash and cash equivalents		132,351				92,469				100,473				112,417				52,981
Equity securities, at fair value		833				730				690				609				553
Investment securities available for sale, at fair value		163,057				150,850				123,218				114,360				112,968
Loans held for sale		676				790				1,260				878				10,457
Loans:
Commercial real estate:
Owner occupied		110,883				109,777				104,379				103,121				107,342
Non-owner occupied		310,222				304,324				304,623				309,424				310,512
Multifamily		30,762				34,926				39,015				39,562				39,622
Residential real estate		232,020				228,102				228,052				233,995				222,237
Commercial and industrial		163,052				200,558				242,651				232,044				258,313
Home equity lines of credit		105,450				107,685				111,474				112,543				115,223
Construction and other		49,378				62,229				64,960				63,573				60,613
Consumer installment		8,515				8,694				9,046				9,823				10,534
Total loans		1,010,282				1,056,295				1,104,200				1,104,085				1,124,396
Less allowance for loan and lease losses		14,234				14,200				14,122				13,459				11,359
Net loans		996,048				1,042,095				1,090,078				1,090,626				1,113,037
Premises and equipment, net		17,507				17,680				18,002				18,333				18,633
Goodwill		15,071				15,071				15,071				15,071				15,071
Core deposit intangibles		1,484				1,564				1,644				1,724				1,807
Bank-owned life insurance		16,954				16,846				16,740				16,938				16,832
Other real estate owned		7,090				7,090				7,372				7,387				7,391
Accrued interest receivable and other assets		14,794				15,033				13,545				13,636				15,079
TOTAL ASSETS	$	1,365,865			$	1,360,218			$	1,388,093			$	1,391,979			$	1,364,809
		September 30,				June 30,				March 31,				December 31,				September 30,
		2021				2021				2021				2020				2020
LIABILITIES
Deposits:
Noninterest-bearing demand	$	316,770			$	326,665			$	317,224			$	291,347			$	268,838
Interest-bearing demand		237,576				207,725				215,684				195,722				179,080
Money market		178,423				183,453				187,204				198,493				184,936
Savings		256,114				252,171				259,973				243,888				231,696
Time		211,674				225,271				245,342				295,750				329,413
Total deposits		1,200,557				1,195,285				1,225,427				1,225,200				1,193,963
Other borrowings		12,966				13,031				13,095				17,038				17,100
Accrued interest payable and other liabilities		6,287				5,858				4,901				5,931				11,690
TOTAL LIABILITIES		1,219,810				1,214,174				1,243,423				1,248,169				1,222,753
STOCKHOLDERS' EQUITY
Common stock, no par value; 10,000,000 shares authorized, 7,329,548 shares issued, 6,054,083 shares outstanding as of September 30, 2021		87,131				87,131				87,073				86,886				86,871
Retained earnings		80,376				76,150				72,729				69,578				68,046
Accumulated other comprehensive income		3,610				3,893				2,917				4,284				4,077
Treasury stock, at cost; 1,275,465 shares as of September 30, 2021		(25,062	)			(21,130	)			(18,049	)			(16,938	)			(16,938	)
TOTAL STOCKHOLDERS' EQUITY		146,055				146,044				144,670				143,810				142,056
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,365,865			$	1,360,218			$	1,388,093			$	1,391,979			$	1,364,809

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, unaudited)
		For the Three Months Ended																	For the Nine Months Ended
		September 30,			June 30,			March 31,			December 31,				September 30,				September 30,			September 30,
Statements of Income		2021			2021			2021			2020				2020				2021			2020
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	12,258		$	11,885		$	12,167		$	12,041			$	12,603			$	36,310		$	36,962
Interest-earning deposits in other institutions		30			12			18			9				8				60			109
Federal funds sold		1			1			-			1				-				2			21
Investment securities:
Taxable interest		461			410			370			297				249				1,241			612
Tax-exempt interest		673			602			558			591				618				1,833			1,881
Dividends on stock		24			26			29			28				29				79			86
Total interest and dividend income		13,447			12,936			13,142			12,967				13,507				39,525			39,671
INTEREST EXPENSE
Deposits		915			1,010			1,205			1,655				2,106				3,130			7,307
Short-term borrowings		-			-			-			(2	)			14				-			81
Other borrowings		37			39			39			43				28				115			166
Total interest expense		952			1,049			1,244			1,696				2,148				3,245			7,554
NET INTEREST INCOME		12,495			11,887			11,898			11,271				11,359				36,280			32,117
Provision for loan losses		-			200			700			2,100				4,000				900			7,740
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		12,495			11,687			11,198			9,171				7,359				35,380			24,377
NONINTEREST INCOME
Service charges on deposit accounts		876			856			787			729				691				2,519			1,810
Gain (loss) on equity securities		102			40			81			56				(28	)			223			(157	)
Earnings on bank-owned life insurance		108			106			226			106				109				440			321
Gains on sale of loans		309			221			592			332				660				1,122			1,155
Other income		426			409			532			387				379				1,367			1,251
Total noninterest income		1,821			1,632			2,218			1,610				1,811				5,671			4,380
NONINTEREST EXPENSE
Salaries and employee benefits		4,488			4,321			4,254			4,458				3,657				13,063			11,197
Occupancy expense		457			549			600			628				497				1,606			1,530
Equipment expense		333			313			357			365				363				1,003			943
Data processing costs		736			698			786			617				683				2,220			2,033
Ohio state franchise tax		287			286			286			251				282				859			831
Federal deposit insurance expense		150			150			144			103				123				444			320
Professional fees		136			323			419			352				289				878			1,007
Net loss (gain) on other real estate owned		9			22			46			(172	)			(184	)			77			(257	)
Advertising expense		222			221			221			55				217				664			643
Software amortization expense		88			74			80			66				70				242			285
Core deposit intangible amortization		81			80			80			83				83				241			249
Other expense		951			889			1,080			1,019				942				2,920			3,182
Total noninterest expense		7,938			7,926			8,353			7,825				7,022				24,217			21,963
Income before income taxes		6,378			5,393			5,063			2,956				2,148				16,834			6,794
Income taxes		1,174			968			896			467				295				3,038			934
NET INCOME	$	5,204		$	4,425		$	4,167		$	2,489			$	1,853			$	13,796		$	5,860
PTPP (1)	$	6,378		$	5,593		$	5,763		$	5,056			$	6,148			$	17,734		$	14,534
(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 Nine Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
		2021				2021				2021				2020				2020				2021				2020
Per common share data
Net income per common share - basic	$	0.85			$	0.70			$	0.65			$	0.39			$	0.29			$	2.20			$	0.92
Net income per common share - diluted	$	0.85			$	0.70			$	0.65			$	0.39			$	0.29			$	2.19			$	0.92
Dividends declared per share	$	0.16			$	0.16			$	0.16			$	0.15			$	0.15			$	0.48			$	0.45
Book value per share (period end)	$	24.13			$	23.50			$	22.80			$	22.54			$	22.27			$	24.13			$	22.27
Tangible book value per share (period end) (2) (3)	$	21.39			$	20.82			$	20.17			$	19.91			$	19.63			$	21.39			$	19.63
Dividends declared	$	978			$	1,004			$	1,016			$	957			$	957			$	2,998			$	2,877
Dividend yield		2.66	%			2.72	%			3.10	%			2.65	%			3.09	%			2.69	%			3.11	%
Dividend payout ratio		18.79	%			22.69	%			24.38	%			38.45	%			51.65	%			21.73	%			49.10	%
Average shares outstanding - basic		6,136,648				6,297,071				6,364,132				6,378,706				6,376,291				6,265,803				6,387,581
Average shares outstanding - diluted		6,157,181				6,312,230				6,378,493				6,397,681				6,385,765				6,287,556				6,397,674
Period ending shares outstanding		6,054,083				6,215,511				6,344,657				6,379,323				6,378,110				6,054,083				6,378,110
Selected ratios
Return on average assets		1.51	%			1.30	%			1.22	%			0.72	%			0.54	%			1.34	%			0.61	%
Return on average equity		13.95	%			12.10	%			11.65	%			6.76	%			5.11	%			12.58	%			5.48	%
Return on average tangible common equity (2) (4)		15.71	%			13.65	%			13.17	%			7.64	%			5.79	%			14.20	%			6.22	%
Efficiency (1)		54.15	%			57.28	%			57.91	%			59.29	%			51.96	%			56.42	%			58.59	%
Equity to assets at period end		10.69	%			10.74	%			10.42	%			10.33	%			10.41	%			10.69	%			10.41	%
Noninterest expense to average assets		0.58	%			0.58	%			0.60	%			0.57	%			0.52	%			1.76	%			1.70	%
(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 Nine Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
Yields		2021				2021				2021				2020				2020				2021				2020
Interest-earning assets:
Loans receivable (2)		4.74	%			4.43	%			4.48	%			4.28	%			4.48	%			4.54	%			4.64	%
Investment securities (2)		3.37	%			3.47	%			3.75	%			3.65	%			3.66	%			3.51	%			3.68	%
Interest-earning deposits with other banks		0.21	%			0.18	%			0.20	%			0.21	%			0.27	%			0.20	%			0.56	%
Total interest-earning assets		4.20	%			4.05	%			4.11	%			4.00	%			4.23	%			4.12	%			4.38	%
Deposits:
Interest-bearing demand deposits		0.12	%			0.12	%			0.16	%			0.21	%			0.32	%			0.13	%			0.36	%
Money market deposits		0.46	%			0.46	%			0.47	%			0.53	%			0.70	%			0.47	%			1.00	%
Savings deposits		0.06	%			0.06	%			0.07	%			0.11	%			0.20	%			0.06	%			0.29	%
Certificates of deposit		1.08	%			1.19	%			1.28	%			1.56	%			1.77	%			1.19	%			1.97	%
Total interest-bearing deposits		0.41	%			0.46	%			0.53	%			0.70	%			0.93	%			0.47	%			1.14	%
Non-Deposit Funding:
Borrowings		1.13	%			1.18	%			1.10	%			0.95	%			0.45	%			1.14	%			0.73	%
Total interest-bearing liabilities		0.42	%			0.47	%			0.54	%			0.71	%			0.91	%			0.48	%			1.12	%
Cost of deposits		0.30	%			0.34	%			0.40	%			0.54	%			0.72	%			0.35	%			0.89	%
Cost of funds		0.31	%			0.35	%			0.41	%			0.55	%			0.71	%			0.35	%			0.88	%
Net interest margin (1)		3.91	%			3.72	%			3.73	%			3.49	%			3.57	%			3.79	%			3.56	%
(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
		September 30,				June 30,				March 31,				December 31,				September 30,
Asset quality data		2021				2021				2021				2020				2020
(Dollar amounts in thousands, unaudited)
Nonperforming loans (1)	$	6,806			$	7,760			$	8,958			$	7,858			$	6,690
Other real estate owned		7,090				7,090				7,372				7,387				7,391
Nonperforming assets	$	13,896			$	14,850			$	16,330			$	15,245			$	14,081
Allowance for loan losses	$	14,234			$	14,200			$	14,122			$	13,459			$	11,359
Allowance for loan losses/total loans		1.41	%			1.34	%			1.28	%			1.22	%			1.01	%
Net charge-offs:
Quarter-to-date	$	(34	)		$	122			$	37			$	0			$	2,851
Year-to-date		125				159				37				3,149				3,149
Net charge-offs to average loans, annualized:
Quarter-to-date		-0.01	%			0.05	%			0.01	%			0.00	%			1.01	%
Year-to-date		0.02	%			0.03	%			0.01	%			0.29	%			0.39	%
Nonperforming loans/total loans		0.67	%			0.73	%			0.81	%			0.71	%			0.59	%
Allowance for loan losses/nonperforming loans		209.14	%			182.99	%			157.65	%			171.28	%			169.79	%
Nonperforming assets/total assets		1.02	%			1.09	%			1.18	%			1.10	%			1.03	%
(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																				For the Nine Months Ended
(Dollar amounts in thousands, unaudited)		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
		2021				2021				2021				2020				2020				2021				2020
Stockholders' Equity	$	146,055			$	146,044			$	144,670			$	143,810			$	142,056			$	146,055			$	142,056
Less Goodwill and other intangibles		16,555				16,635				16,715				16,795				16,878				16,555				16,878
Tangible Common Equity	$	129,500			$	129,409			$	127,955			$	127,015			$	125,178			$	129,500			$	125,178
Shares outstanding		6,054,083				6,215,511				6,344,657				6,379,323				6,378,110				6,054,083				6,378,110
Tangible book value per share	$	21.39			$	20.82			$	20.17			$	19.91			$	19.63			$	21.39			$	19.63
Reconciliation of Average Equity to Return on Average Tangible Common Equity		For the Three Months Ended																				For the Nine Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
		2021				2021				2021				2020				2020				2021				2020
Average Stockholders' Equity	$	148,048			$	146,719			$	145,065			$	146,374			$	144,167			$	146,611			$	142,949
Less Average Goodwill and other intangibles		16,594				16,674				16,754				16,836				16,919				16,674				17,002
Average Tangible Common Equity	$	131,454			$	130,045			$	128,311			$	129,538			$	127,248			$	129,937			$	125,947
Net income	$	5,204			$	4,425			$	4,167			$	2,489			$	1,853			$	13,796			$	5,860
Return on average tangible common equity (annualized)		15.71	%			13.65	%			13.17	%			7.64	%			5.79	%			14.20	%			6.22	%
Reconciliation of Pre-Tax Pre-Provision Income (PTPP)		For the Three Months Ended																				For the Nine Months Ended
		September 30,				June 30,				March 31,				December 31,				September 30,				September 30,				September 30,
		2021				2021				2021				2020				2020				2021				2020
Net income	$	5,204			$	4,425			$	4,167			$	2,489			$	1,853			$	13,796			$	5,860
Add Income Taxes		1,174				968				896				467				295				3,038				934
Add Provision for loan losses		-				200				700				2,100				4,000				900				7,740
PTPP	$	6,378			$	5,593			$	5,763			$	5,056			$	6,148			$	17,734			$	14,534

MIDDLEFIELD BANC CORP.
Average Balance Sheets
(Dollar amounts in thousands, unaudited)
		For the Three Months Ended
		September 30,												September 30,
		2021												2020
		Average								Average				Average								Average
		Balance				Interest				Yield/Cost				Balance				Interest				Yield/Cost
Interest-earning assets:
Loans receivable (3)		$	1,027,935			$	12,258			4.74	%			$	1,121,763			$	12,603			4.48	%
Investment securities (3)			154,718				1,134			3.37	%				111,994				867			3.66	%
Interest-earning deposits with other banks (4)			105,910				55			0.21	%				53,826				37			0.27	%
Total interest-earning assets			1,288,563				13,447			4.20	%				1,287,583				13,507			4.23	%
Noninterest-earning assets			82,952												66,836
Total assets		$	1,371,515											$	1,354,419
Interest-bearing liabilities:
Interest-bearing demand deposits		$	225,264			$	67			0.12	%			$	149,048			$	120			0.32	%
Money market deposits			182,831				214			0.46	%				176,136				312			0.70	%
Savings deposits			253,960				38			0.06	%				223,507				113			0.20	%
Certificates of deposit			218,323				596			1.08	%				349,981				1,561			1.77	%
Short-term borrowings			-				-			0.00	%				19,740				14			0.28	%
Other borrowings			12,999				37			1.13	%				17,130				28			0.65	%
Total interest-bearing liabilities			893,377				952			0.42	%				935,542				2,148			0.91	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			323,726												270,868
Other liabilities			6,364												1,756
Stockholders' equity			148,048												146,253
Total liabilities and stockholders' equity		$	1,371,515											$	1,354,419
Net interest income						$	12,495											$	11,359
Interest rate spread (1)										3.78	%											3.32	%
Net interest margin (2)										3.91	%											3.57	%
Ratio of average interest-earning assets to average interest-bearing liabilities										144.24	%											137.63	%
(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 $195 and $186 for the three months ended September 30, 2021 and 2020, respectively
(4) Includes dividends received on restricted stock.
		For the Three Months Ended
		September 30,												June 30,
		2021												2021
		Average								Average				Average								Average
		Balance				Interest				Yield/Cost				Balance				Interest				Yield/Cost
Interest-earning assets:
Loans receivable (3)		$	1,027,935			$	12,258			4.74	%			$	1,078,866			$	11,885			4.43	%
Investment securities (3)			154,718				1,134			3.37	%				135,338				1,012			3.47	%
Interest-earning deposits with other banks (4)			105,910				55			0.21	%				85,245				39			0.18	%
Total interest-earning assets			1,288,563				13,447			4.20	%				1,299,449				12,936			4.05	%
Noninterest-earning assets			82,952												70,692
Total assets		$	1,371,515											$	1,370,141
Interest-bearing liabilities:
Interest-bearing demand deposits		$	225,264			$	67			0.12	%			$	207,080			$	64			0.12	%
Money market deposits			182,831				214			0.46	%				185,728				212			0.46	%
Savings deposits			253,960				38			0.06	%				253,612				38			0.06	%
Certificates of deposit			218,323				596			1.08	%				233,930				696			1.19	%
Short-term borrowings			-				-			0.00	%				227				-			0.00	%
Other borrowings			12,999				37			1.13	%				13,062				39			1.20	%
Total interest-bearing liabilities			893,377				952			0.42	%				893,639				1,049			0.47	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			323,726												323,590
Other liabilities			6,364												6,193
Stockholders' equity			148,048												146,719
Total liabilities and stockholders' equity		$	1,371,515											$	1,370,141
Net interest income						$	12,495											$	11,887
Interest rate spread (1)										3.78	%											3.58	%
Net interest margin (2)										3.91	%											3.72	%
Ratio of average interest-earning assets to average interest-bearing liabilities										144.24	%											145.41	%
(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 $195 and $179 for the three months ended September 30, 2021, and June 30, 2021, respectively.
(4) Includes dividends received on restricted stock.
		For the Nine Months Ended
		September 30,												September 30,
		2021												2020
		Average								Average				Average								Average
		Balance				Interest				Yield/Cost				Balance				Interest				Yield/Cost
Interest-earning assets:
Loans receivable (3)		$	1,070,058			$	36,310			4.54	%			$	1,065,964			$	36,962			4.64	%
Investment securities (3)			135,522				3,074			3.51	%				108,551				2,493			3.68	%
Interest-earning deposits with other banks (4)			94,955				141			0.20	%				51,361				216			0.56	%
Total interest-earning assets			1,300,535				39,525			4.12	%				1,225,876				39,671			4.38	%
Noninterest-earning assets			74,883												64,938
Total assets		$	1,375,418											$	1,290,814
Interest-bearing liabilities:
Interest-bearing demand deposits		$	211,797			$	209			0.13	%			$	130,886			$	349			0.36	%
Money market deposits			187,945				655			0.47	%				166,193				1,246			1.00	%
Savings deposits			254,574				123			0.06	%				201,871				443			0.29	%
Certificates of deposit			240,582				2,143			1.19	%				358,048				5,269			1.97	%
Short-term borrowings			113				-			0.00	%				30,174				81			0.36	%
Other borrowings			13,440				115			1.14	%				15,149				166			1.46	%
Total interest-bearing liabilities			908,451				3,245			0.48	%				902,321				7,554			1.12	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			314,172												242,951
Other liabilities			6,184												2,593
Stockholders' equity			146,611												142,949
Total liabilities and stockholders' equity		$	1,375,418											$	1,290,814
Net interest income						$	36,280											$	32,117
Interest rate spread (1)										3.64	%											3.26	%
Net interest margin (2)										3.79	%											3.56	%
Ratio of average interest-earning assets to average interest-bearing liabilities										143.16	%											135.86	%
(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 $542 and $565 for the nine months ended September 30, 2021 and 2020, respectively.
(4) Includes dividends received on restricted stock.

FAQ

What were Middlefield Banc Corp.'s earnings for the third quarter of 2021?

Middlefield Banc Corp. reported record earnings of $5.2 million, or $0.85 per diluted share, for the third quarter of 2021.

How did the net interest margin change for MBCN in 2021?

The net interest margin increased by 23 basis points to 3.79% for the nine months ended September 30, 2021.

What is the total noninterest income for Middlefield Banc Corp. for 2021?

Total noninterest income for the nine-month period ended September 30, 2021, was $5.7 million, a 29.5% increase year-over-year.

How much has MBCN repurchased in shares year-to-date?

As of September 30, 2021, Middlefield Banc Corp. has repurchased 346,103 shares of stock.

What is the year-to-date net charge-off figure for MBCN?

Year-to-date net charge-offs declined significantly to $125,000, a 96% reduction.