Middlefield Banc Corp. Reports 2023 First Quarter Financial Results

MIDDLEFIELD, Ohio, April 24, 2023 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the 2023 first quarter ended March 31, 2023.

2023 First Quarter Financial Highlights Include (on a year-over-year basis unless noted):

• Net income increased 27.7% to a quarterly record of $4.9 million
• Earnings were $0.60 per diluted share compared to $0.65 per diluted share, reflecting a 38.4% increase in the average diluted shares outstanding related to the Liberty Bancshares, Inc. merger
• Adopted CECL accounting standards, which resulted in an after-tax retained earnings adjustment of $4.4 million
• Pre-tax, pre-provision net income increased 38.8% to $6.4 million
• Net interest margin improved by 46 basis points to 4.26%, compared to 3.80%
• Total loans were $1.38 billion, compared to $1.35 billion at December 31, 2022
• Loan growth funded by deposit growth and robust liquidity
• Total deposits were $1.43 billion, compared to $1.40 billion at December 31, 2022
• Uninsured deposits to total assets of approximately 19% at March 31, 2023
• Return on average assets was 1.16%, compared to 1.17%
• Return on average equity was 10.19%, compared to 10.75%
• Return on average tangible common equity⁽¹⁾ was 12.77%, compared to 12.13%
• Strong asset quality with nonperforming assets to total assets of 0.73%, compared to 0.89%
• Allowance for credit losses was 1.46% of total loans, compared to 1.48%
• Equity to assets increased to 11.30%, from 10.40%
  

“Middlefield’s first-quarter results and record quarterly net income demonstrate our strong balance sheet, robust asset quality, and diverse core deposit base, as well as the benefits and added scale of the Liberty Bancshares, Inc. merger. Despite macro-level concerns related to the health of the banking system, higher interest rates, and a slowing economy, we remained focused on successfully integrating the Liberty Bancshares merger and serving our customers across our Central, Western, and Northeast Ohio communities. I am encouraged by the deposit, loan, and earnings growth we achieved over the past three months, all of which is a testament to the experience of our management team and the dedication of our team members,” stated James R. Heslop, II, Chief Executive Officer.

“We expect higher rates and competition for deposits will continue to increase our cost of funds in the coming quarters, but we believe our compelling net interest margin and larger loan portfolio will support strong levels of interest income throughout the year. I am pleased to report that we achieved the highest quarterly net interest margin in over 20 years and the fourth consecutive quarter above 4%. As the year progresses, we remain focused on growth opportunities across our expanded Ohio markets, adding talented bankers to our platform, and maintaining strong asset quality,” concluded Mr. Heslop.

Income Statement
Net interest income for the 2023 first quarter was $16.5 million, compared to $11.5 million for the 2022 first quarter. The net interest margin for the 2023 first quarter was 4.26%, compared to 3.80% for the same period of 2022. For the 2023 first quarter, noninterest income increased 19.6% to $1.7 million from $1.4 million for the same period of 2022.

Noninterest expense was $11.8 million for the 2023 first quarter compared to $8.3 million for the 2022 first quarter. During the first quarter of 2023, the Company incurred $245,000 of additional operating expenses associated with the Liberty Bancshares, Inc.

Pre-tax income during last year’s first quarter benefited from $640,000 of accelerated net fees associated with the Paycheck Protection Program (“PPP”).

Net income for the 2023 first quarter was a quarterly record of $4.9 million, or $0.60 per diluted share, compared to $3.8 million, or $0.65 per diluted share, for the same period last year.

Pre-tax, pre-provision net income was a quarterly record of $6.4 million, an increase of 38.8% from $4.6 million last year.

Balance Sheet
Total assets at March 31, 2023, increased 30.6% to $1.73 billion, compared to $1.32 billion at March 31, 2022. Net loans at March 31, 2023, increased 41.5% to $1.36 billion, compared to $963.2 million at March 31, 2022. Total assets increased 2.4% from December 31, 2022.

Total deposits at March 31, 2023, were $1.43 billion, compared to $1.17 billion at March 31, 2022. The 22.1% deposit increase was primarily due to the Liberty Bancshares, Inc. merger. Total deposits at March 31, 2023, increased 1.7% from December 31, 2022.

Donald L. Stacy, Chief Financial Officer, stated, “We ended the quarter with a net loan-to-deposit ratio of 95.6%, $66.7 million in cash and cash equivalents, and $169.6 million in investment securities. In addition, our unrealized losses on all securities at the end of the month were a modest 9.0% of total capital. Considering our strong capital levels, robust liquidity, and diverse loan and deposit portfolios, along with our maximum borrowing capacity of $560 million at the Federal Home Loan Bank, we decided not to use the Federal Reserve’s Bank Term Funding Program. During the first quarter, we repurchased 164,221 shares at an average of $27.44 per share and have 293,910 shares remaining under our February 2023 repurchase program.”

Middlefield's CRE portfolio included the following categories at March 31, 2023:

CRE Category		Balance (in thousands)			Percent of CRE Portfolio		Percent of Loan Portfolio
Office Space			105,726		16.3%		7.7%
Shopping Plazas		$	84,995		13.1%		6.1%
Multi-Family		$	63,892		9.8%		4.6%
Self-Storage		$	56,347		8.7%		4.1%
Senior Living		$	42,589		6.5%		3.1%
Hospitality		$	34,869		5.4%		2.5%
Other		$	261,449		40.2%		18.9%
Total CRE		$	649,867		100.0%		47.0%

Stockholders’ Equity and Dividends
At March 31, 2023, stockholders’ equity was $195.2 million compared to $137.6 million at March 31, 2022. The 41.8% year-over-year increase in stockholders’ equity is primarily due to the Liberty Bancshares, Inc. merger, partially offset by an increase in the unrealized loss on the available-for-sale investment portfolio and the Company’s stock repurchase program. On a per-share basis, shareholders’ equity at March 31, 2023, was $24.13 compared to $23.43, an increase of 3.0% over the same period last year.

At March 31, 2023, tangible stockholders’ equity⁽¹⁾ was $156.0 million for the 2023 first quarter, compared to $121.2 million at March 31, 2022. On a per-share basis, tangible stockholders’ equity⁽¹⁾ was $19.29 at March 31, 2023, compared to $20.64 at March 31, 2022.

For the 2023 first quarter, cash dividends declared per share increased 17.6% to $0.20 per share totaling $1.6 million, compared to $0.17 per share or $1.0 million, for the first quarter last year.

At March 31, 2023, the Company had an equity-to-assets leverage ratio of 11.30%, compared to 10.40% at March 31, 2022.

Asset Quality
The Company recorded a provision for loan losses of $507,000 for the 2023 first quarter versus no provision for loan losses for the same period last year.

On January 1, 2023, Middlefield adopted ASU 2016-13 - Measurement of Credit Losses on Financial Instruments and implemented the current expected credit losses (“CECL”) accounting standards. Upon adoption, the reserve for credit losses on loans and leases increased by $5.3 million, the reserve for credit losses for unfunded commitments increased by $622,000. This resulted in an after-tax retained earnings adjustment of $4.4 million. During the quarter ended March 31, 2023, the Corporation recorded CECL related charges of $507,000, including a provision for credit losses on loans and leases of $334,000 and a reserve for unfunded commitments of $173,000.

Net recoveries were $8,000, or 0.00% of average loans, annualized, during the 2023 first quarter, compared to net recoveries of $150,000, or 0.06% of average loans, annualized, at March 31, 2022.

Nonperforming assets at March 31, 2023, were $12.7 million, compared to $11.7 million at March 31, 2022. Nonperforming loans at March 31, 2023, increased to $6.9 million, from $4.7 million at March 31, 2022 primarily due to the additional loans from the Liberty Bancshares, Inc. merger. The allowance for credit losses at March 31, 2023, stood at $20.2 million, or 1.46% of total loans, compared to $14.5 million, or 1.48% of total loans at March 31, 2022.

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 $1.73 billion at March 31, 2023. 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

⁽¹⁾ 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 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.

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

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)		2023				2022				2022				2022				2022
ASSETS
Cash and due from banks	$	59,609			$	51,404			$	119,777			$	60,114			$	78,804
Federal funds sold		7,048				2,405				8,800				19,039				29,474
Cash and cash equivalents		66,657				53,809				128,577				79,153				108,278
Equity securities, at fair value		777				915				972				779				851
Investment securities available for sale, at fair value		169,605				164,967				162,064				171,958				175,216
Loans held for sale		104				-				-				-				9
Loans:
Commercial real estate:
Owner occupied		185,661				191,748				120,912				120,771				113,590
Non-owner occupied		400,314				380,580				285,419				288,334				293,745
Multifamily		63,892				58,251				38,063				29,152				29,385
Residential real estate		306,179				296,308				247,612				246,453				244,747
Commercial and industrial		195,024				195,602				146,987				137,398				131,683
Home equity lines of credit		126,555				128,065				114,344				111,730				106,300
Construction and other		97,406				94,199				33,748				35,988				50,152
Consumer installment		7,816				8,119				8,110				8,171				8,118
Total loans		1,382,847				1,352,872				995,195				977,997				977,720
Less allowance for credit losses		20,162				14,438				14,532				14,550				14,492
Net loans		1,362,685				1,338,434				980,663				963,447				963,228
Premises and equipment, net		21,775				21,961				16,215				17,030				17,142
Goodwill		31,735				31,735				15,071				15,071				15,071
Core deposit intangibles		7,436				7,701				1,171				1,249				1,326
Bank-owned life insurance		34,015				33,811				17,382				17,274				17,166
Other real estate owned		5,792				5,821				6,792				6,792				6,992
Accrued interest receivable and other assets		27,258				28,528				22,104				20,624				18,019
TOTAL ASSETS	$	1,727,839			$	1,687,682			$	1,351,011			$	1,293,377			$	1,323,298
		March 31,				December 31,				September 30,				June 30,				March 31,
		2023				2022				2022				2022				2022
LIABILITIES
Deposits:
Noninterest-bearing demand	$	474,977			$	503,907			$	383,675			$	379,872			$	361,251
Interest-bearing demand		196,086				164,677				160,112				154,788				162,010
Money market		221,723				187,498				162,052				185,494				187,807
Savings		287,859				307,917				247,466				252,179				264,784
Time		244,962				238,020				177,182				174,833				191,320
Total deposits		1,425,607				1,402,019				1,130,487				1,147,166				1,167,172
Short-term borrowings		85,000				65,000				80,000				-				-
Other borrowings		12,010				12,059				12,107				12,910				12,975
Accrued interest payable and other liabilities		10,057				10,913				5,562				5,081				5,507
TOTAL LIABILITIES		1,532,674				1,489,991				1,228,156				1,165,157				1,185,654
STOCKHOLDERS' EQUITY
Common stock, no par value; 10,000,000 shares authorized, 9,924,245
shares issued, 8,088,793 shares outstanding as of March 31, 2023		161,248				161,029				87,640				87,562				87,562
Retained earnings		93,024				94,154				93,166				89,900				86,804
Accumulated other comprehensive loss		(19,253	)			(22,144	)			(25,080	)			(17,591	)			(6,674	)
Treasury stock, at cost; 1,835,452 shares as of March 31, 2023		(39,854	)			(35,348	)			(32,871	)			(31,651	)			(30,048	)
TOTAL STOCKHOLDERS' EQUITY		195,165				197,691				122,855				128,220				137,644
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,727,839			$	1,687,682			$	1,351,011			$	1,293,377			$	1,323,298
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		2023				2022				2022				2022				2022
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	18,275			$	14,368			$	11,892			$	11,268			$	10,985
Interest-earning deposits in other institutions		250				240				134				74				24
Federal funds sold		253				119				51				46				3
Investment securities:
Taxable interest		458				477				449				442				443
Tax-exempt interest		980				986				982				955				784
Dividends on stock		88				68				59				33				24
Total interest and dividend income		20,304				16,258				13,567				12,818				12,263
INTEREST EXPENSE
Deposits		2,990				1,771				812				709				726
Short-term borrowings		653				263				44				-				-
Other borrowings		155				142				112				81				69
Total interest expense		3,798				2,176				968				790				795
NET INTEREST INCOME		16,506				14,082				12,599				12,028				11,468
Provision for credit losses		507				-				-				-				-
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES		15,999				14,082				12,599				12,028				11,468
NONINTEREST INCOME
Service charges on deposit accounts		987				976				1,004				956				914
(Loss) gain on equity securities		(138	)			(77	)			(57	)			(72	)			33
Gain on other real estate owned		2				-				-				-				-
Earnings on bank-owned life insurance		200				137				108				108				106
Gains (losses) on sale of loans		23				(4	)			7				18				3
Revenue from investment services		186				147				233				153				141
Gross rental income		102				951				-				-				-
Other income		318				284				251				220				206
Total noninterest income		1,678				2,414				1,546				1,383				1,403
NONINTEREST EXPENSE
Salaries and employee benefits		5,852				4,886				4,491				3,785				4,386
Occupancy expense		696				487				458				583				505
Equipment expense		317				252				233				274				315
Data processing costs		1,070				1,050				985				822				844
Ohio state franchise tax		385				279				293				292				293
Federal deposit insurance expense		120				105				84				90				50
Professional fees		538				382				280				383				455
Other real estate owned writedowns		-				1,000				-				200				-
Gain on other real estate owned		(2	)			-				-				-				-
Advertising expense		486				308				268				229				228
Software amortization expense		26				28				27				40				48
Core deposit intangible amortization		265				140				78				77				77
Gross other real estate owned expenses		132				692				1				6				8
Merger-related costs		245				1,413				390				579				-
Other expense		1,662				1,321				1,298				1,175				1,057
Total noninterest expense		11,792				12,343				8,886				8,535				8,266
Income before income taxes		5,885				4,153				5,259				4,876				4,605
Income taxes		989				651				1,010				787				772
NET INCOME	$	4,896			$	3,502			$	4,249			$	4,089			$	3,833
PTPP (1)	$	6,392			$	4,153			$	5,259			$	4,876			$	4,605
(1)  The pre-tax pre-provision (PTPP) is the income before income taxes before provision for credit 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
		March 31,				December 31,				September 30,				June 30,				March 31,
		2023				2022				2022				2022				2022
Per common share data
Net income per common share - basic	$	0.60			$	0.53			$	0.73			$	0.70			$	0.65
Net income per common share - diluted	$	0.60			$	0.53			$	0.73			$	0.70			$	0.65
Dividends declared per share	$	0.20			$	0.30			$	0.17			$	0.17			$	0.17
Book value per share (period end)	$	24.13			$	23.98			$	21.30			$	22.07			$	23.43
Tangible book value per share (period end) (2) (3)	$	19.29			$	19.19			$	18.48			$	19.26			$	20.64
Dividends declared	$	1,605			$	2,514			$	983			$	993			$	1,000
Dividend yield		2.89	%			4.34	%			2.49	%			2.71	%			2.78	%
Dividend payout ratio		32.78	%			71.79	%			23.13	%			24.28	%			26.09	%
Average shares outstanding - basic		8,138,771				6,593,616				5,792,773				5,851,422				5,879,025
Average shares outstanding - diluted		8,152,629				6,610,907				5,805,799				5,860,098				5,889,836
Period ending shares outstanding		8,088,793				8,245,235				5,767,803				5,810,351				5,873,565
Selected ratios
Return on average assets		1.16	%			0.97	%			1.32	%			1.25	%			1.17	%
Return on average equity		10.19	%			9.35	%			12.94	%			12.30	%			10.75	%
Return on average tangible common equity (2) (4)		12.77	%			11.13	%			14.79	%			14.02	%			12.13	%
Efficiency (1)		62.44	%			72.75	%			61.07	%			61.83	%			62.54	%
Equity to assets at period end		11.30	%			11.71	%			9.09	%			9.91	%			10.40	%
Noninterest expense to average assets		0.69	%			0.86	%			0.69	%			0.65	%			0.62	%
(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
		March 31,				December 31,				September 30,				June 30,				March 31,
Yields		2023				2022				2022				2022				2022
Interest-earning assets:
Loans receivable (2)		5.45	%			5.11	%			4.78	%			4.66	%			4.53	%
Investment securities (2)		4.11	%			3.83	%			3.90	%			3.76	%			3.41	%
Interest-earning deposits with other banks		3.46	%			3.42	%			2.06	%			0.77	%			0.23	%
Total interest-earning assets		5.22	%			4.88	%			4.55	%			4.28	%			4.06	%
Deposits:
Interest-bearing demand deposits		0.83	%			0.83	%			0.22	%			0.15	%			0.14	%
Money market deposits		1.52	%			1.00	%			0.46	%			0.49	%			0.47	%
Savings deposits		1.03	%			0.49	%			0.19	%			0.06	%			0.06	%
Certificates of deposit		1.71	%			1.30	%			0.96	%			0.83	%			0.87	%
Total interest-bearing deposits		1.28	%			0.87	%			0.43	%			0.36	%			0.37	%
Non-Deposit Funding:
Borrowings		4.78	%			4.25	%			2.94	%			2.51	%			2.16	%
Total interest-bearing liabilities		1.52	%			1.02	%			0.50	%			0.39	%			0.39	%
Cost of deposits		0.84	%			0.57	%			0.29	%			0.24	%			0.25	%
Cost of funds		1.02	%			0.68	%			0.34	%			0.27	%			0.27	%
Net interest margin (1)		4.26	%			4.23	%			4.23	%			4.02	%			3.80	%
(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
		March 31,				December 31,				September 30,				June 30,				March 31,
Asset quality data		2023				2022				2022				2022				2022
(Dollar amounts in thousands, unaudited)
Nonperforming loans (1)	$	6,882			$	2,111			$	3,692			$	4,670			$	4,728
Other real estate owned		5,792				5,821				6,792				6,792				6,992
Nonperforming assets	$	12,674			$	7,932			$	10,484			$	11,462			$	11,720
Allowance for credit losses	$	20,162			$	14,438			$	14,532			$	14,550			$	14,492
Allowance for credit losses/total loans		1.46	%			1.07	%			1.46	%			1.49	%			1.48	%
Net (recoveries) charge-offs:
Quarter-to-date	$	(8	)		$	94			$	18			$	(58	)		$	(150	)
Year-to-date		(8	)			(96	)			(190	)			(208	)			(150	)
Net (recoveries) charge-offs to average loans, annualized:
Quarter-to-date		0.00	%			0.03	%			0.01	%			-0.02	%			-0.06	%
Year-to-date		0.00	%			-0.01	%			-0.02	%			-0.04	%			-0.06	%
Nonperforming loans/total loans		0.50	%			0.16	%			0.37	%			0.48	%			0.48	%
Allowance for credit losses/nonperforming loans		292.97	%			683.94	%			393.61	%			311.56	%			306.51	%
Nonperforming assets/total assets		0.73	%			0.47	%			0.78	%			0.89	%			0.89	%
(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)		March 31,				December 31,				September 30,				June 30,				March 31,
		2023				2022				2022				2022				2022
Stockholders' Equity	$	195,165			$	197,691			$	122,855			$	128,220			$	137,644
Less Goodwill and other intangibles		39,171				39,436				16,242				16,320				16,397
Tangible Common Equity	$	155,994			$	158,255			$	106,613			$	111,900			$	121,247
Shares outstanding		8,088,793				8,245,235				5,767,803				5,810,351				5,873,565
Tangible book value per share	$	19.29			$	19.19			$	18.48			$	19.26			$	20.64
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,
		2023				2022				2022				2022				2022
Average Stockholders' Equity	$	194,814			$	148,616			$	130,263			$	133,377			$	144,630
Less Average Goodwill and other intangibles		39,300				23,731				16,280				16,357				16,435
Average Tangible Common Equity	$	155,514			$	124,885			$	113,983			$	117,020			$	128,195
Net income	$	4,896			$	3,502			$	4,249			$	4,089			$	3,833
Return on average tangible common equity (annualized)		12.77	%			11.13	%			14.79	%			14.02	%			12.13	%
Reconciliation of Pre-Tax Pre-Provision Income (PTPP)
	For the Three Months Ended
		March 31,				December 31,				September 30,				June 30,				March 31,
		2023				2022				2022				2022				2022
Net income	$	4,896			$	3,502			$	4,249			$	4,089			$	3,833
Add Income Taxes		989				651				1,010				787				772
Add Provision for credit losses		507				-				-				-				-
PTPP	$	6,392			$	4,153			$	5,259			$	4,876			$	4,605

MIDDLEFIELD BANC CORP.
Average Balance Sheets
(Dollar amounts in thousands, unaudited)
	For the Three Months Ended
	March 31,									March 31,
		2023									2022
	Average						Average			Average						Average
	Balance			Interest			Yield/Cost			Balance			Interest			Yield/Cost
Interest-earning assets:
Loans receivable (3)	$	1,360,866		$	18,275		5.45	%		$	983,853		$	10,985		4.53	%
Investment securities (3)		167,674			1,438		4.11	%			170,829			1,227		3.41	%
Interest-earning deposits with other banks (4)		69,308			591		3.46	%			91,690			51		0.23	%
Total interest-earning assets		1,597,848			20,304		5.22	%			1,246,372			12,263		4.06	%
Noninterest-earning assets		115,515									85,667
Total assets	$	1,713,363								$	1,332,039
Interest-bearing liabilities:
Interest-bearing demand deposits	$	177,935		$	364		0.83	%		$	170,353		$	60		0.14	%
Money market deposits		208,408			783		1.52	%			184,265			212		0.47	%
Savings deposits		315,049			804		1.03	%			260,162			38		0.06	%
Certificates of deposit		246,151			1,039		1.71	%			193,657			416		0.87	%
Short-term borrowings		56,459			653		4.69	%			-			-		0.00	%
Other borrowings		12,038			155		5.22	%			12,943			69		2.16	%
Total interest-bearing liabilities		1,016,040			3,798		1.52	%			821,380			795		0.39	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		491,649									359,656
Other liabilities		10,860									6,373
Stockholders' equity		194,814									144,630
Total liabilities and stockholders' equity	$	1,713,363								$	1,332,039
Net interest income				$	16,506								$	11,468
Interest rate spread (1)							3.70	%								3.67	%
Net interest margin (2)							4.26	%								3.80	%
Ratio of average interest-earning assets to
average interest-bearing liabilities							157.26	%								151.74	%
(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 $278 and  $223 for the three months ended March 31, 2023 and 2022, respectively.
(4) Includes dividends received on restricted stock.
	For the Three Months Ended
	March 31,									December 31,
		2023									2022
	Average						Average			Average						Average
	Balance			Interest			Yield/Cost			Balance			Interest			Yield/Cost
Interest-earning assets:
Loans receivable (3)	$	1,360,866		$	18,275		5.45	%		$	1,117,221		$	14,368		5.11	%
Investment securities (3)		167,674			1,438		4.11	%			178,772			1,463		3.83	%
Interest-earning deposits with other banks (4)		69,308			591		3.46	%			49,569			427		3.42	%
Total interest-earning assets		1,597,848			20,304		5.22	%			1,345,562			16,258		4.88	%
Noninterest-earning assets		115,515									89,740
Total assets	$	1,713,363								$	1,435,302
Interest-bearing liabilities:
Interest-bearing demand deposits	$	177,935		$	364		0.83	%		$	165,267		$	344		0.83	%
Money market deposits		208,408			783		1.52	%			172,437			435		1.00	%
Savings deposits		315,049			804		1.03	%			266,613			330		0.49	%
Certificates of deposit		246,151			1,039		1.71	%			201,972			662		1.30	%
Short-term borrowings		56,459			653		4.69	%			25,750			263		4.05	%
Other borrowings		12,038			155		5.22	%			12,086			142		4.66	%
Total interest-bearing liabilities		1,016,040			3,798		1.52	%			844,125			2,176		1.02	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		491,649									428,155
Other liabilities		10,860									14,406
Stockholders' equity		194,814									148,616
Total liabilities and stockholders' equity	$	1,713,363								$	1,435,302
Net interest income				$	16,506								$	14,082
Interest rate spread (1)							3.70	%								3.86	%
Net interest margin (2)							4.26	%								4.23	%
Ratio of average interest-earning assets to
average interest-bearing liabilities							157.26	%								159.40	%
(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 $278 and $278 for the three months ended March 31, 2023, and December 31, 2022, respectively.
(4) Includes dividends received on restricted stock.

 

Company Contact:	Investor and Media Contact:
James R. Heslop, II Chief Executive Officer Middlefield Banc Corp. (440) 632-1666 Ext. 3219 JHeslop@middlefieldbank.com	Andrew M. Berger Managing Director SM Berger & Company, Inc. (216) 464-6400 andrew@smberger.com