Middlefield Banc Corp. Reports 2024 First Quarter Financial Results

Rhea-AI Summary

Middlefield Banc Corp. (NASDAQ: MBCN) reported financial results for the first quarter of 2024. Net income decreased to $4.2 million, earnings per share decreased to $0.51, and net interest income decreased to $15.1 million. However, noninterest income increased by 6.9%. Total loans and deposits increased, while asset quality remained strong. The company remains focused on strategic growth goals to create lasting value for shareholders.

Positive

• Total loans increased by 7.8% to a record $1.49 billion.

• Total deposits increased to $1.45 billion compared to $1.43 billion.

• Asset quality with nonperforming assets to total assets improved to 0.60%.

• Equity to assets remained strong at 11.32%.

• Book value increased by 5.6% to $25.48 per share.

Negative

• Net interest income decreased by 9.3% to $15.0 million.

• Net income decreased to $4.2 million with earnings per share at $0.51.

• Nonperforming loans increased to $10.8 million.

• Allowance for credit losses decreased to 1.41% of total loans.

• Net interest margin decreased to 3.53% for the first quarter of 2024.

Insights

Financial Analyst

The decrease in net income from $4.9 million to $4.2 million suggests a potential concern for profitability, possibly affecting shareholder confidence. However, the increase in total loans by 7.8% to $1.49 billion indicates growth in the bank's core business which may signal future revenue potential. The growth in noninterest income by 6.9% is also a positive indicator, demonstrating diversification of income streams.

Assessing the return on average equity (ROAE), which has increased from 7.13% to 8.16%, shows an improved efficiency in generating profits from shareholders' equity. This, alongside the growth in book value per share by 5.6%, could attract investors looking for companies with strong value growth indicators.

Risk Analyst

From a risk perspective, the decline in net interest income by 9.3% coupled with a reduced net interest margin (NIM) from 4.19% to 3.53% reflects compression in profitability per dollar of earning assets, a concern in a rising rate environment. This could potentially indicate increased funding costs or changes in asset yields that investors should monitor closely.

However, the improvement in the ratio of nonperforming assets from 0.73% to 0.60% reveals sound asset quality. Such an improvement, if sustained, can reduce credit risk and potential loan losses, potentially resulting in decreased provisions for credit losses in future quarters.

Market Analyst

The reported stabilization in economic activity within Ohio markets and the solid asset quality of Middlefield Banc Corp. present a local market condition that is conducive to steady growth. However, the increased reliance on brokered deposits, jumping from $5.0 million to $90.4 million, could suggest a search for alternative funding sources, which are typically more expensive and less stable than traditional deposits. This shift bears watching as it may impact the bank's cost structure and interest rate risk profile.

MIDDLEFIELD, Ohio, April 30, 2024 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the three months ended March 31, 2024.

2024 First Quarter Financial Highlights (on a year-over-year basis unless noted):

• Net income was $4.2 million, compared to $4.9 million for the quarter ended March 31, 2023, and $3.5 million for the quarter ended December 31, 2023
• Earnings were $0.51 per diluted share, compared to $0.60 per diluted share for the quarter ended March 31, 2023, and $0.44 per diluted share for the quarter ended December 31, 2023
• Net interest income after the provision for credit losses was $15.1 million, compared to $16.0 million
• Noninterest income increased 6.9% to $1.8 million
• Total loans increased 7.8% to a record $1.49 billion
• Total deposits were $1.45 billion, compared to $1.43 billion
• Return on average assets annualized was 0.92%, compared to 0.78% for the quarter ended December 31, 2023
• Return on average equity annualized was 8.16%, compared to 7.13% for the quarter ended December 31, 2023
• Return on average tangible common equity⁽¹⁾ was 10.30%, compared to 9.11% for the quarter ended December 31, 2023
• Excellent asset quality with nonperforming assets to total assets of 0.60%, compared to 0.73%
• Allowance for credit losses was 1.41% of total loans, compared to 1.46%
• Equity to assets remained strong at 11.32%, compared to 11.30%
• Book value increased 5.6% to $25.48 per share
  
  ^{(1) See non-GAAP reconciliation under the section “GAAP to Non-GAAP Reconciliations”}

Ronald L. Zimmerly, Jr., President and Chief Executive Officer, stated, “2024 is off to a solid start. Over the past three months, our pre-tax, pre-provision income⁽¹⁾ stabilized, reflecting positive loan growth, strong asset quality, higher noninterest income, and controlled operating expenses. During this period, our ROAA, ROAE, and ROATCE increased due to improved profitability. In addition, we ended the quarter with record total loans as our expanded Commercial, Business, and Consumer Banking teams capitalized on favorable demand trends across our Northeast, Central, and Western Ohio markets.”

“While we expect uncertainty about FOMC monetary policies and their impact on national economic conditions in 2024 to continue, economic activity and employment within our Ohio markets are stable. In addition, our asset quality remains excellent, and nonperforming assets at the end of the first quarter improved slightly from the fourth quarter and were down 14.5% from last year’s first quarter. Our first quarter performance is encouraging and reflects our teams' hard work and contributions across our three Ohio markets. As we look to the remainder of the year, we are focused on pursuing our multi-year strategic growth goals: increasing revenue opportunities, improving our customer experience, and advancing operational performance to create lasting value for our shareholders,” concluded Mr. Zimmerly.

Income Statement
Net interest income for the 2024 first quarter decreased 9.3% to $15.0 million, compared to $16.5 million for the same period last year. The net interest margin for the 2024 first quarter was 3.53%, compared to 4.19% last year.

For the 2024 first quarter, noninterest income increased 6.9% to $1.8 million, compared to $1.7 million for the same period of 2023.

Noninterest expense for the 2024 first quarter was $12.0 million, compared to $11.8 million for the 2023 first quarter.

Net income for the 2024 first quarter ended March 31, 2024, was $4.2 million, or $0.51 per diluted share, compared to $4.9 million, or $0.60 per diluted share, for the same period last year.

For the 2024 first quarter, pre-tax, pre-provision net income was $4.8 million, compared to $6.4 million last year. (See non-GAAP reconciliation under the section “GAAP to Non-GAAP Reconciliations”).

Balance Sheet
Total assets at March 31, 2024, increased 5.1% to $1.82 billion, compared to $1.73 billion at March 31, 2023. Total loans at March 31, 2024, were $1.49 billion, compared to $1.38 billion at March 31, 2023. The 7.8% year-over-year increase in total loans was primarily due to higher commercial and industrial, residential real estate, commercial real estate, and construction and other loans.

Total liabilities at March 31, 2024, increased 5.1% to $1.61 billion, compared to $1.53 billion at March 31, 2023. Total deposits at March 31, 2024, were $1.45 billion, compared to $1.43 billion at March 31, 2023. The 1.5% year-over-year increase in deposits was primarily due to growth in money market, interest-bearing demand, and time deposits, partially offset by declines in noninterest-bearing demand and savings accounts. Noninterest-bearing demand deposits were 27.0% of total deposits at March 31, 2024, compared to 33.3% at March 31, 2023. At March 31, 2024, the Company had brokered deposits of $90.4 million, compared to $5.0 million at March 31, 2023.

The investment securities available for sale portfolio was $167.9 million at March 31, 2024, compared with $169.6 million at March 31, 2023.

Michael Ranttila, Chief Financial Officer, stated, “Asset quality improved on both a sequential and year-over-year basis, reflecting our conservative underwriting standards and balanced portfolio composition. Nonperforming loans at March 31, 2024, included one self-storage loan in the Southwest Ohio market totaling $3.6 million. We believe this issue is isolated to this borrower and does not indicate a trend in the market, our portfolio, or an issue in underwriting.”

Mr. Ranttila continued, “We also remain focused on identifying opportunities to improve our cost of funds, pay down higher cost capital, and grow core deposits to support loan demand. Over the past three months, total deposits increased 1.4%, while our Federal Home Loan Bank advances decreased by nearly 16.0%. With sufficient liquidity, stabilizing profitability, and excellent asset quality, I am pleased to report that during the first quarter, we repurchased 43,858 shares of our common stock at an average price of $24.00 per share, reflecting our long-standing commitment to return excess capital to shareholders.”

Middlefield's CRE portfolio included the following categories at March 31, 2024:

CRE Category		Balance (in thousands)				Percent of CRE Portfolio		Percent of Loan Portfolio
Multi-Family		$	81,691			12.4%		5.5%
Office Space		$	78,789			12.0%		5.3%
Shopping Plazas		$	73,250			11.1%		4.9%
Self-Storage		$	61,525			9.3%		4.1%
Hospitality		$	39,779			6.0%		2.7%
Senior Living		$	26,545			4.0%		1.8%
Other		$	297,500			45.2%		19.9%
Total CRE		$	659,079			100.0%		44.2%

Stockholders' Equity and Dividends
At March 31, 2024, stockholders' equity was $205.6 million compared to $195.2 million at March 31, 2023. The 5.3% year-over-year increase in stockholders' equity was primarily due to higher retained earnings and an improvement in the unrealized losses on the available-for-sale investment portfolio, partially offset by the Company's stock repurchase program. On a per-share basis, shareholders' equity at March 31, 2024, was $25.48 compared to $24.13 at March 31, 2023.

At March 31, 2024, tangible stockholders' equity⁽¹⁾ was $162.8 million, compared to $156.0 million at March 31, 2023. On a per-share basis, tangible stockholders' equity⁽¹⁾ was $20.18 at March 31, 2024, compared to $19.29 at March 31, 2023. ⁽¹⁾See non-GAAP reconciliation under the section “GAAP to Non-GAAP Reconciliations”.

For the 2024 first quarter, the Company declared cash dividends of $0.20 per share, totaling $1.6 million.

At March 31, 2024, the Company's equity-to-assets ratio was 11.32%, compared to 11.30% at March 31, 2023.

Asset Quality
For the 2024 first quarter, the Company recorded a recovery of credit losses of $100,000 versus a provision for credit losses of $500,000 for the same period last year.

Net recoveries were $68,000, or 0.02% of average loans, annualized, during the first quarter of 2024, compared to net recoveries of $8,000, or 0.00% of average loans, annualized, at March 31, 2023.

Nonperforming loans at March 31, 2024, were $10.8 million, compared to $6.9 million at March 31, 2023. Nonperforming assets at March 31, 2024, were $10.8 million, compared to $12.7 million at March 31, 2023. The allowance for credit losses at March 31, 2024, stood at $21.1 million, or 1.41% of total loans, compared to $20.2 million, or 1.46% of total loans at March 31, 2023.   The decrease in the allowance for credit losses as a percentage of total loans was mainly due to changes in projected loss drivers, prepayment assumptions, and curtailment expectations over the reasonable and supportable forecast period. 

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 $1.82 billion at March 31, 2024. The Bank operates 21 full-service banking centers and an LPL Financial® brokerage office serving Ada, Beachwood, Bellefontaine, Chardon, Cortland, Dublin, Garrettsville, Kenton, Mantua, Marysville, 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

NON-GAAP FINANCIAL MEASURES
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 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 following Consolidated Financial Highlights tables below.

FORWARD-LOOKING STATEMENTS
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 several 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.

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, unaudited)
		March 31,				December 31,				September 30,				June 30,				March 31,
Balance Sheets (period end)			2024				2023				2023				2023				2023
ASSETS
Cash and due from banks		$	44,816			$	56,397			$	56,228			$	49,422			$	59,609
Federal funds sold			1,438				4,439				9,274				9,654				7,048
Cash and cash equivalents			46,254				60,836				65,502				59,076				66,657
Investment securities available for sale, at fair value			167,890				170,779				159,414				167,209				169,605
Other investments			907				955				958				711				777
Loans held for sale			-				-				632				171				104
Loans:
Commercial real estate:
Owner occupied			178,543				183,545				185,593				187,919				185,661
Non-owner occupied			398,845				401,580				382,676				385,846				400,314
Multifamily			81,691				82,506				82,578				58,579				63,892
Residential real estate			331,480				328,854				321,331				312,196				306,179
Commercial and industrial			227,433				221,508				214,334				209,349				195,024
Home equity lines of credit			129,287				127,818				127,494				126,894				126,555
Construction and other			135,716				125,105				127,106				118,851				97,406
Consumer installment			7,131				7,214				7,481				9,801				7,816
Total loans			1,490,126				1,478,130				1,448,593				1,409,435				1,382,847
Less allowance for credit losses			21,069				21,693				20,986				20,591				20,162
Net loans			1,469,057				1,456,437				1,427,607				1,388,844				1,362,685
Premises and equipment, net			21,035				21,339				21,708				21,629				21,775
Goodwill			36,356				36,356				36,197				36,197				31,735
Core deposit intangibles			6,384				6,642				6,906				7,171				7,436
Bank-owned life insurance			34,575				34,349				34,153				34,235				34,015
Other real estate owned			-				-				5,792				5,792				5,792
Accrued interest receivable and other assets			34,210				35,190				34,551				30,472				27,258
TOTAL ASSETS		$	1,816,668			$	1,822,883			$	1,793,420			$	1,751,507			$	1,727,839
		March 31,				December 31,				September 30,				June 30,				March 31,
			2024				2023				2023				2023				2023
LIABILITIES
Deposits:
Noninterest-bearing demand		$	390,185			$	401,384			$	424,055			$	441,102			$	474,977
Interest-bearing demand			209,015				205,582				243,973				229,633				196,086
Money market			318,823				274,682				275,766				241,537				221,723
Savings			196,721				210,639				216,453				231,508				287,859
Time			332,165				334,315				296,732				287,861				244,962
Total deposits			1,446,909				1,426,602				1,456,979				1,431,641				1,425,607
Federal Home Loan Bank advances			137,000				163,000				118,000				100,000				85,000
Other borrowings			11,812				11,862				11,912				11,961				12,010
Accrued interest payable and other liabilities			15,372				15,738				12,780				10,678				10,057
TOTAL LIABILITIES			1,611,093				1,617,202				1,599,671				1,554,280				1,532,674
STOCKHOLDERS' EQUITY
Common stock, no par value; 25,000,000 shares authorized, 9,946,454 shares issued, 8,067,144 shares outstanding as of March 31, 2024			161,823				161,388				161,312				161,211				161,248
Retained earnings			102,791				100,237				98,717				96,500				93,024
Accumulated other comprehensive loss			(18,130	)			(16,090	)			(26,426	)			(20,630	)			(19,253	)
Treasury stock, at cost; 1,879,310 shares as of March 31, 2024			(40,909	)			(39,854	)			(39,854	)			(39,854	)			(39,854	)
TOTAL STOCKHOLDERS' EQUITY			205,575				205,681				193,749				197,227				195,165
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,816,668			$	1,822,883			$	1,793,420			$	1,751,507			$	1,727,839
MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, unaudited)
		For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
Statements of Income			2024				2023				2023				2023				2023
INTEREST AND DIVIDEND INCOME
Interest and fees on loans		$	22,395			$	22,027			$	20,899			$	20,762			$	18,275
Interest-earning deposits in other institutions			437				370				300				369				250
Federal funds sold			152				94				266				158				253
Investment securities:
Taxable interest			467				479				477				479				458
Tax-exempt interest			972				976				980				978				980
Dividends on stock			189				144				148				91				88
Total interest and dividend income			24,612				24,090				23,070				22,837				20,304
INTEREST EXPENSE
Deposits			7,466				6,522				5,632				3,851				2,990
Short-term borrowings			1,993				2,013				1,258				1,462				653
Other borrowings			184				179				213				170				155
Total interest expense			9,643				8,714				7,103				5,483				3,798
NET INTEREST INCOME			14,969				15,376				15,967				17,354				16,506
(Recovery of) Provision for credit losses			(136	)			554				1,127				814				507
NET INTEREST INCOME AFTER (RECOVERY OF) PROVISION FOR CREDIT LOSSES			15,105				14,822				14,840				16,540				15,999
NONINTEREST INCOME
Service charges on deposit accounts			909				997				954				940				987
(Loss) gain on equity securities			(52	)			(4	)			48				(67	)			(138	)
(Loss) gain on other real estate owned			-				(172	)			-				-				2
Earnings on bank-owned life insurance			227				196				207				220				200
Gain on sale of loans			10				23				45				6				23
Revenue from investment services			204				193				190				174				186
Gross rental income			261				132				110				77				102
Other income			237				237				263				242				318
Total noninterest income			1,796				1,602				1,817				1,592				1,680
NONINTEREST EXPENSE
Salaries and employee benefits			6,333				6,646				5,994				6,019				5,852
Occupancy expense			552				512				699				659				696
Equipment expense			240				273				297				354				317
Data processing costs			1,249				1,348				1,209				1,137				1,070
Ohio state franchise tax			397				397				398				398				385
Federal deposit insurance expense			251				285				207				249				120
Professional fees			558				660				545				550				538
Advertising expense			419				162				414				415				486
Software amortization expense			22				22				24				23				26
Core deposit intangible amortization			258				264				265				265				265
Gross other real estate owned expenses			99				120				195				63				132
Merger-related costs			-				-				22				206				245
Other expense			1,587				1,483				1,849				1,716				1,661
Total noninterest expense			11,965				12,172				12,118				12,054				11,793
Income before income taxes			4,936				4,252				4,539				6,078				5,886
Income taxes			769				709				703				986				989
NET INCOME		$	4,167			$	3,543			$	3,836			$	5,092			$	4,897
PTPP (1)		$	4,800			$	4,806			$	5,666			$	6,892			$	6,393
(1) See section “GAAP to Non-GAAP Reconciliations” for the reconciliation of GAAP performance measures to 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
		March 31,				December 31,				September 30,				June 30,				March 31,
			2024				2023				2023				2023				2023
Per common share data
Net income per common share - basic		$	0.52			$	0.44			$	0.47			$	0.63			$	0.60
Net income per common share - diluted		$	0.51			$	0.44			$	0.47			$	0.63			$	0.60
Dividends declared per share		$	0.20			$	0.25			$	0.20			$	0.20			$	0.20
Book value per share (period end)		$	25.48			$	25.41			$	23.94			$	24.38			$	24.13
Tangible book value per share (period end) (1) (2)		$	20.18			$	20.10			$	18.62			$	19.02			$	19.29
Dividends declared		$	1,613			$	2,023			$	1,619			$	1,616			$	1,605
Dividend yield			3.37	%			3.06	%			3.12	%			2.99	%			2.89	%
Dividend payout ratio			38.71	%			57.10	%			42.21	%			31.74	%			32.78	%
Average shares outstanding - basic			8,091,203				8,093,478				8,092,494				8,088,793				8,138,771
Average shares outstanding - diluted			8,097,219				8,116,261				8,101,306				8,101,984				8,152,629
Period ending shares outstanding			8,067,144				8,095,252				8,092,576				8,088,793				8,088,793
Selected ratios
Return on average assets (Annualized)			0.92	%			0.78	%			0.86	%			1.17	%			1.16	%
Return on average equity (Annualized)			8.16	%			7.13	%			7.73	%			10.41	%			10.19	%
Return on average tangible common equity (1) (3)			10.30	%			9.11	%			9.91	%			13.12	%			12.77	%
Efficiency (4)			68.68	%			68.99	%			65.65	%			61.27	%			62.44	%
Equity to assets at period end			11.32	%			11.28	%			10.80	%			11.26	%			11.30	%
Noninterest expense to average assets			0.66	%			0.68	%			0.68	%			0.69	%			0.69	%
(1) See section “GAAP to Non-GAAP Reconciliations” for the reconciliation of GAAP performance measures to non-GAAP measures.
(2) Calculated by dividing tangible common equity by shares outstanding.
(3) Calculated by dividing annualized net income for each period by average tangible common equity.
(4) 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.
MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Unaudited)
		For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
Yields			2024				2023				2023				2023				2023
Interest-earning assets:
Loans receivable (1)			6.11	%			6.01	%			5.82	%			5.96	%			5.45	%
Investment securities (1)(2)			3.51	%			3.52	%			3.51	%			3.54	%			3.55	%
Interest-earning deposits with other banks			4.88	%			3.71	%			4.13	%			3.98	%			3.46	%
Total interest-earning assets			5.77	%			5.64	%			5.49	%			5.60	%			5.14	%
Deposits:
Interest-bearing demand deposits			1.86	%			1.67	%			1.51	%			1.11	%			0.83	%
Money market deposits			3.81	%			3.58	%			2.94	%			2.21	%			1.52	%
Savings deposits			0.58	%			0.59	%			0.58	%			0.73	%			1.03	%
Certificates of deposit			4.06	%			3.68	%			3.27	%			2.35	%			1.71	%
Total interest-bearing deposits			2.88	%			2.56	%			2.16	%			1.60	%			1.28	%
Non-Deposit Funding:
Borrowings			5.61	%			5.57	%			5.66	%			5.26	%			4.78	%
Total interest-bearing liabilities			3.23	%			2.96	%			2.48	%			2.02	%			1.52	%
Cost of deposits			2.08	%			1.81	%			1.53	%			1.09	%			0.84	%
Cost of funds			2.42	%			2.18	%			1.80	%			1.43	%			1.02	%
Net interest margin (3)			3.53	%			3.63	%			3.82	%			4.27	%			4.19	%
(1) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were determined using an effective tax rate of 21%.
(2) Yield is calculated on the basis of amortized cost.
(3) Net interest margin represents net interest income as a percentage of average interest-earning assets.
		For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
Asset quality data			2024				2023				2023				2023				2023
(Dollar amounts in thousands, unaudited)
Nonperforming loans		$	10,831			$	10,877			$	7,717			$	7,116			$	6,882
Other real estate owned			-				-				5,792				5,792				5,792
Nonperforming assets		$	10,831			$	10,877			$	13,509			$	12,908			$	12,674
Allowance for credit losses		$	21,069			$	21,693			$	20,986			$	20,591			$	20,162
Allowance for credit losses/total loans			1.41	%			1.47	%			1.45	%			1.46	%			1.46	%
Net charge-offs (recoveries):
Quarter-to-date		$	(68	)		$	(117	)		$	(16	)		$	111			$	(8	)
Year-to-date			(68	)			(31	)			87				103				(8	)
Net charge-offs (recoveries) to average loans, annualized:
Quarter-to-date			(0.02	%)			(0.03	%)			0.00	%			0.03	%			0.00	%
Year-to-date			(0.02	%)			0.00	%			0.01	%			0.01	%			0.00	%
Nonperforming loans/total loans			0.73	%			0.74	%			0.53	%			0.50	%			0.50	%
Allowance for credit losses/nonperforming loans			194.52	%			199.44	%			271.95	%			289.36	%			292.97	%
Nonperforming assets/total assets			0.60	%			0.60	%			0.75	%			0.74	%			0.73	%
Reconciliation of Common Stockholders'  Equity to Tangible Common Equity		For the Three Months Ended
(Dollar amounts in thousands, unaudited)		March 31,				December 31,				September 30,				June 30,				March 31,
			2024				2023				2023				2023				2023
Stockholders' equity		$	205,575			$	205,681			$	193,749			$	197,227			$	195,165
Less goodwill and other intangibles			42,740				42,998				43,103				43,368				39,171
Tangible common equity		$	162,835			$	162,683			$	150,646			$	153,859			$	155,994
Shares outstanding			8,067,144				8,095,252				8,092,576				8,088,793				8,088,793
Tangible book value per share		$	20.18			$	20.10			$	18.62			$	19.02			$	19.29
Reconciliation of Average Equity to Return on Average Tangible Common Equity		For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
			2024				2023				2023				2023				2023
Average stockholders' equity		$	205,342			$	197,208			$	196,795			$	196,183			$	194,814
Less average goodwill and other intangibles			42,654				42,972				43,232				40,522				39,300
Average tangible common equity		$	162,688			$	154,236			$	153,563			$	155,661			$	155,514
Net income		$	4,167			$	3,543			$	3,836			$	5,092			$	4,897
Return on average tangible common equity (annualized)			10.30	%			9.11	%			9.91	%			13.12	%			12.77	%
Reconciliation of Pre-Tax Pre-Provision Income (PTPP)		For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
			2024				2023				2023				2023				2023
Net income		$	4,167			$	3,543			$	3,836			$	5,092			$	4,897
Add income taxes			769				709				703				986				989
Add (recovery of) provision for credit losses			(136	)			554				1,127				814				507
PTPP		$	4,800			$	4,806			$	5,666			$	6,892			$	6,393
MIDDLEFIELD BANC CORP.
Average Balance Sheets
(Dollar amounts in thousands, unaudited)
		For the Three Months Ended
		March 31,												March 31,
			2024												2023
		Average								Average				Average								Average
		Balance				Interest				Yield/Cost				Balance				Interest				Yield/Cost
Interest-earning assets:
Loans receivable (1)		$	1,476,543			$	22,395				6.11	%		$	1,360,866			$	18,275			5.45	%
Investment securities (1)(2)			194,704				1,439				3.51	%			194,031				1,438			3.55	%
Interest-earning deposits with other banks (3)			64,139				778				4.88	%			69,308				591			3.46	%
Total interest-earning assets			1,735,386				24,612				5.77	%			1,624,205				20,304			5.14	%
Noninterest-earning assets			87,298												89,158
Total assets		$	1,822,684											$	1,713,363
Interest-bearing liabilities:
Interest-bearing demand deposits		$	211,009			$	978				1.86	%		$	177,935			$	364			0.83	%
Money market deposits			298,479				2,827				3.81	%			208,408				783			1.52	%
Savings deposits			201,080				290				0.58	%			315,049				804			1.03	%
Certificates of deposit			333,871				3,371				4.06	%			246,151				1,039			1.71	%
Short-term borrowings			144,357				1,993				5.55	%			56,459				653			4.69	%
Other borrowings			11,840				184				6.25	%			12,038				155			5.22	%
Total interest-bearing liabilities			1,200,636				9,643				3.23	%			1,016,040				3,798			1.52	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			400,209												491,649
Other liabilities			16,497												10,860
Stockholders' equity			205,342												194,814
Total liabilities and stockholders' equity		$	1,822,684											$	1,713,363
Net interest income						$	14,969											$	16,506
Interest rate spread (4)											2.54	%										3.62	%
Net interest margin (5)											3.53	%										4.19	%
Ratio of average interest-earning assets to average interest-bearing liabilities											144.54	%										159.86	%
(1) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $281 and $278 for the three months ended March 31, 2024 and 2023, respectively.
(2) Yield is calculated on the basis of amortized cost.
(3) Includes dividends received on restricted stock.
(4) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income as a percentage of average interest-earning assets.
		For the Three Months Ended
		March 31,												December 31,
			2024												2023
		Average								Average				Average								Average
		Balance				Interest				Yield/Cost				Balance				Interest				Yield/Cost
Interest-earning assets:
Loans receivable (1)		$	1,476,543			$	22,395				6.11	%		$	1,454,688			$	22,027			6.01	%
Investment securities (1)(2)			194,704				1,439				3.51	%			193,289				1,455			3.52	%
Interest-earning deposits with other banks (3)			64,139				778				4.88	%			64,989				608			3.71	%
Total interest-earning assets			1,735,386				24,612				5.77	%			1,712,966				24,090			5.64	%
Noninterest-earning assets			87,298												82,364
Total assets		$	1,822,684											$	1,795,330
Interest-bearing liabilities:
Interest-bearing demand deposits		$	211,009			$	978				1.86	%		$	222,517			$	935			1.67	%
Money market deposits			298,479				2,827				3.81	%			276,354				2,493			3.58	%
Savings deposits			201,080				290				0.58	%			211,997				317			0.59	%
Certificates of deposit			333,871				3,371				4.06	%			299,427				2,777			3.68	%
Short-term borrowings			144,357				1,993				5.55	%			144,344				2,013			5.53	%
Other borrowings			11,840				184				6.25	%			11,890				179			5.97	%
Total interest-bearing liabilities			1,200,636				9,643				3.23	%			1,166,529				8,714			2.96	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			400,209												422,151
Other liabilities			16,497												9,442
Stockholders' equity			205,342												197,208
Total liabilities and stockholders' equity		$	1,822,684											$	1,795,330
Net interest income						$	14,969											$	15,376
Interest rate spread (4)											2.54	%										2.68	%
Net interest margin (5)											3.53	%										3.63	%
Ratio of average interest-earning assets to average interest-bearing liabilities											144.54	%										146.84	%
(1) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $281 and $282 for the three months ended March 31, 2024 and December 31, 2023, respectively.
(2) Yield is calculated on the basis of amortized cost.
(3) Includes dividends received on restricted stock.
(4) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
(5 )Net interest margin represents net interest income as a percentage of average interest-earning assets.

Company Contact:	Investor and Media Contact:
Ronald L. Zimmerly, Jr. President and Chief Executive Officer Middlefield Banc Corp. (419) 673-1217 rzimmerly@middlefieldbank.com	Andrew M. Berger Managing Director SM Berger & Company, Inc. (216) 464-6400 andrew@smberger.com

FAQ

What was Middlefield Banc Corp.'s net income for the first quarter of 2024?

Middlefield Banc Corp. reported a net income of $4.2 million for the first quarter of 2024.

How much did total loans increase by in the first quarter of 2024?

Total loans increased by 7.8% to a record $1.49 billion in the first quarter of 2024.

What was the return on average assets for Middlefield Banc Corp. in the first quarter of 2024?

The return on average assets annualized was 0.92% for the first quarter of 2024.