• Middlefield Banc Corp. Reports 2023 Nine-Month Financial Results

    ソース: Nasdaq GlobeNewswire / 23 10 2023 07:00:49   America/Chicago

    MIDDLEFIELD, OHIO, Oct. 23, 2023 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the three and nine months ended September 30, 2023.

    2023 Nine-Month Financial Highlights (on a year-over-year basis unless noted):

    • Net income increased 13.6% to a record $13.8 million
    • Earnings were $1.70 per diluted share compared to $2.08 per diluted share, reflecting a 38.6% increase in the average diluted shares outstanding related to the Liberty Bancshares, Inc. merger
    • Pre-tax, pre-provision net income increased 28.6% to a record $19.0 million(1)
    • Net interest income increased 38.0% to a record $49.8 million
    • Net interest margin improved by 13 basis points to 4.15%, compared to 4.02%
    • Noninterest income increased 17.5% to $5.1 million
    • Total loans were a record $1.45 billion, compared to $1.35 billion at December 31, 2022
    • Total deposits were a record $1.46 billion, compared to $1.40 billion at December 31, 2022
    • Return on average assets was 1.06%, compared to 1.24%
    • Return on average equity was 9.43%, compared to 11.96%
    • Return on average tangible common equity(1) was 11.92%, compared to 13.59%
    • Strong asset quality with nonperforming assets to total assets of 0.75%, compared to 0.78%
    • Allowance for credit losses was 1.45% of total loans, compared to 1.46%
    • Equity to assets increased to 10.80% from 9.09%

    (1)See non-GAAP reconciliation under the section “GAAP to Non-GAAP Reconciliations”

    "Our third quarter performance reflects record loans, stable asset quality, and controlled operating expenses. Throughout the year, we have added proven executives to our leadership team to help support our growth. We have also added experienced lenders and treasury management professionals to grow Middlefield's brand and drive loan and deposit growth across our Northeast, Central, and Western Ohio markets. As a result of our team's efforts, we ended the third quarter with record total loans and assets and a 103-basis point year-over-year increase in our yield on earning assets. While this has produced strong levels of interest income, the higher rate environment and significant competition for deposits increased our funding costs at a faster rate and pressured net interest income during the quarter. We expect increased competition for deposits and higher funding costs to continue throughout 2023 and into 2024," stated James R. Heslop, II, Chief Executive Officer.

    "We continue prudently managing our balance sheet and closely monitoring our loan portfolio. Despite the higher rate environment, economic activity remains stable across our Ohio markets, supported by low unemployment and large-scale, multi-year economic development projects. Our local presence in attractive Ohio markets, combined with $840 million in maximum borrowing capacity and a proven team of banking professionals, allows us to support the local needs of our communities while continuing to invest in our long-term growth initiatives," concluded Mr. Heslop.

    Income Statement
    Net interest income for the 2023 nine-month period increased 38.0% to $49.8 million, compared to $36.1 million for the same period last year. Year-to-date, the net interest margin was 4.15%, compared to 4.02% for the same period last year. Net interest income for the 2023 third quarter increased 26.7% to $16.0 million, compared to $12.6 million for the 2022 third quarter. The net interest margin for the 2023 third quarter was 3.88%, compared to 4.23% for the same period of 2022.

    Pre-tax income for the 2022 nine-month period benefited from $1.2 million of accelerated net fees associated with the Paycheck Protection Program ("PPP").

    For the 2023 nine-month period, noninterest income was $5.1 million, compared to $4.3 million for the same period last year. Noninterest income for the 2023 third quarter was $1.8 million, compared to $1.5 million for the same period the previous year.

    For the 2023 nine-month period, noninterest expense was $36.0 million, compared to $25.7 million for the same period last year. Noninterest expense in the 2023 third quarter were $12.1 million, compared to $8.9 million for the 2022 third quarter. Higher 2023 third-quarter and year-to-date expenses were primarily associated with the Liberty Bancshares, Inc. merger.

    Net income for the 2023 nine-month period ended September 30, 2023, was $13.8 million, or $1.70 per diluted share, compared to $12.2 million, or $2.08 per diluted share for the same period last year. Net income for the 2023 third quarter ended September 30, 2023, was $3.8 million, or $0.47 per diluted share, compared to $4.2 million, or $0.73 per diluted share, for the same period last year.

    Pre-tax, pre-provision net income for the 2023 nine-months was $19.0 million, an increase of 28.6% from $14.7 million last year. For the 2023 third quarter, pre-tax, pre-provision net income was $5.7 million, an increase of 7.7% from $5.3 million last year. (See non-GAAP reconciliation under the section “GAAP to Non-GAAP Reconciliations”).

    Balance Sheet
    Total assets at September 30, 2023, increased 32.7% to $1.79 billion, compared to $1.35 billion at September 30, 2022. Total loans at September 30, 2023, increased 45.6% to $1.45 billion, compared to $995.2 million at September 30, 2022. The 45.6% year-over-year increase in total loans was due to the Liberty Bancshares, Inc. merger and organic loan growth. At September 30, 2023, total loans have increased organically by approximately 9.4% on an annualized basis.  

    Total deposits at September 30, 2023, were $1.46 billion, compared to $1.13 billion at September 30, 2022. The 28.9% year-over-year increase in deposits was primarily due to the Liberty Bancshares, Inc. merger. Noninterest-bearing deposits were 29.1% of total deposits at September 30, 2023, compared to 33.9% at September 30, 2022. At September 30, 2023, the Company had brokered deposits of $53.5 million, compared to $5.0 million at September 30, 2022.

    The investment securities portfolio was $159.4 million at September 30, 2023, compared with $162.1 million at September 30, 2022.

    Michael Ranttila, Chief Financial Officer, stated, "Our balance sheet remains strong, and during the quarter, we continued to benefit from stable asset quality, ample capital levels, and limited exposure to unrealized losses within our investment portfolio. Reflecting the stability of our loan portfolio, at September 30, 2023, nonperforming assets to total assets were 0.75%, compared to 0.78% at September 30, 2022. In addition, we ended the quarter with $65.5 million in cash and cash equivalents, $159.4 million in available for sale investment securities, and $570.8 million of maximum borrowing capacity at the Federal Home Loan Bank, demonstrating ample liquidity levels. Finally, we maintained a modest level of unrealized losses on all securities, which was 13.6% of total capital at September 30, 2023, compared to 20.4% at September 30, 2022. We are confident we have sufficient liquidity to navigate a more complex economic environment while supporting our growth strategies and capital allocation priorities."

    Middlefield's CRE portfolio included the following categories at September 30, 2023:

    CRE Category Balance
    (in thousands)
     Percent of CRE
    Portfolio
     Percent of Loan
    Portfolio
    Office Space $76,048 11.7% 5.3%
    Shopping Plazas $76,036 11.7% 5.3%
    Multi-Family $82,578 12.7% 5.7%
    Self-Storage $59,734 9.2% 4.1%
    Hospitality $40,450 6.2% 2.8%
    Senior Living $23,629 3.6% 1.6%
    Other $292,372 44.9% 20.2%
    Total CRE $650,847 100.0% 45.0%
            

    Middlefield's commercial real estate office credit exposure represented 5.3% of the Company's total loan portfolio at September 30, 2023, with a weighted average loan-to-value of approximately 53%.

    Stockholders' Equity and Dividends
    At September 30, 2023, stockholders' equity was $193.7 million compared to $122.9 million at September 30, 2022. The 57.7% year-over-year increase in stockholders' equity was 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 acquisition of stock under the Company's stock repurchase program. On a per-share basis, shareholders' equity at September 30, 2023, was $23.94 compared to $21.30 at September 30, 2022.

    At September 30, 2023, tangible stockholders' equity(1) was $150.6 million, compared to $106.6 million at September 30, 2022. On a per-share basis, tangible stockholders' equity(1) was $18.62 at September 30, 2023, compared to $18.48 at September 30, 2022. (See non-GAAP reconciliation under the section “GAAP to Non-GAAP Reconciliations”).

    Through the 2023 nine-month period, the Company declared cash dividends of $0.60 per share, a 17.6% increase from $0.51 per share for the same period last year.

    At September 30, 2023, the Company had an equity-to-assets ratio of 10.80%, compared to 9.09% at September 30, 2022.

    Asset Quality
    For the 2023 nine-month period and third quarter, the Company recorded provisions for credit losses of $2.4 million and $1.1 million, respectively, versus no provisions for credit losses for the same periods last year. The increase is largely due to growth in unfunded commitments.

    Net recoveries were $16,000 or 0.00% of average loans, annualized, during the 2023 third quarter, compared to net charge-offs of $18,000, or 0.01% of average loans, annualized, at September 30, 2022. Year-to-date net charge-offs were $87,000, or 0.01% of average loans, annualized, compared to net recoveries of $190,000, or 0.02% of average loans, annualized, for the nine-months ended September 30, 2022.

    Nonperforming loans at September 30, 2023, were $7.7 million, compared to $3.7 million at September 30, 2022. Nonperforming assets at September 30, 2023, were $13.5 million, compared to $10.5 million at September 30, 2022. The allowance for credit losses at September 30, 2023, stood at $21.0 million, or 1.45% of total loans, compared to $14.5 million, or 1.46% of total loans at September 30, 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 $1.79 billion at September 30, 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

    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)
     
      September 30, June 30,  March 31,  December 31,  September 30,     
    Balance Sheets (period end)  2023    2023   2023    2022    2022       
    ASSETS                    
    Cash and due from banks$ 56,228  $ 49,422  $59,609  $ 51,404  $ 119,777       
    Federal funds sold  9,274    9,654   7,048    2,405    8,800       
    Cash and cash equivalents  65,502    59,076   66,657    53,809    128,577       
    Investment securities available for sale, at fair value  159,414    167,209   169,605    164,967    162,064       
    Other investments  958    711   777    915    972       
    Loans held for sale  632    171   104    -    -       
    Loans:                    
    Commercial real estate:                    
    Owner occupied  185,593    187,919   185,661    191,748    120,912       
    Non-owner occupied  382,676    385,846   400,314    380,580    285,419       
    Multifamily  82,578    58,579   63,892    58,251    38,063       
    Residential real estate  321,331    312,196   306,179    296,308    247,612       
    Commercial and industrial  214,334    209,349   195,024    195,602    146,987       
    Home equity lines of credit  127,494    126,894   126,555    128,065    114,344       
    Construction and other  127,106    118,851   97,406    94,199    33,748       
    Consumer installment  7,481    9,801   7,816    8,119    8,110       
    Total loans  1,448,593    1,409,435   1,382,847    1,352,872    995,195       
    Less allowance for credit losses  20,986    20,591   20,162    14,438    14,532       
    Net loans  1,427,607    1,388,844   1,362,685    1,338,434    980,663       
    Premises and equipment, net  21,708    21,629   21,775    21,961    16,215       
    Goodwill  36,197    36,197   31,735    31,735    15,071       
    Core deposit intangibles  6,906    7,171   7,436    7,701    1,171       
    Bank-owned life insurance  34,153    34,235   34,015    33,811    17,382       
    Other real estate owned  5,792    5,792   5,792    5,821    6,792       
    Accrued interest receivable and other assets  34,551    30,472   27,258    28,528    22,104       
    TOTAL ASSETS$ 1,793,420  $ 1,751,507  $1,727,839  $ 1,687,682  $ 1,351,011       
                         
      September 30, June 30,  March 31,  December 31,  September 30,     
       2023    2023   2023    2022    2022       
    LIABILITIES                    
    Deposits:                    
    Noninterest-bearing demand$ 424,055  $ 441,102  $474,977  $ 503,907  $ 383,675       
    Interest-bearing demand  243,973    229,633   196,086    164,677    160,112       
    Money market  275,766    241,537   221,723    187,498    162,052       
    Savings  216,453    231,508   287,859    307,917    247,466       
    Time  296,732    287,861   244,962    238,020    177,182       
    Total deposits  1,456,979    1,431,641   1,425,607    1,402,019    1,130,487       
    Short-term borrowings:                    
    Federal Home Loan Bank advances  118,000    100,000   85,000    65,000    80,000       
    Other borrowings  11,912    11,961   12,010    12,059    12,107       
    Accrued interest payable and other liabilities  12,780    10,678   10,057    10,913    5,562       
    TOTAL LIABILITIES  1,599,671    1,554,280   1,532,674    1,489,991    1,228,156       
    STOCKHOLDERS' EQUITY                    
    Common stock, no par value; 25,000,000 shares authorized, 9,928,028                   
    shares issued, 8,092,576 shares outstanding as of September 30, 2023 161,312    161,211   161,248    161,029    87,640       
    Retained earnings  98,717    96,500   93,024    94,154    93,166       
    Accumulated other comprehensive loss  (26,426)   (20,630)  (19,253)   (22,144)   (25,080)      
    Treasury stock, at cost; 1,835,452 shares as of September 30, 2023  (39,854)   (39,854)  (39,854)   (35,348)   (32,871)      
    TOTAL STOCKHOLDERS' EQUITY  193,749    197,227   195,165    197,691    122,855       
                         
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$ 1,793,420  $ 1,751,507  $1,727,839  $ 1,687,682  $ 1,351,011       
                         
    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  2023    2023   2023    2022    2022   2023   2022 
                         
    INTEREST AND DIVIDEND INCOME                    
    Interest and fees on loans$ 20,899  $ 20,762  $18,275  $ 14,368  $ 11,892  $59,935  $34,145 
    Interest-earning deposits in other institutions  300    369   250    240    134   920   232 
    Federal funds sold  266    158   253    119    51   678   100 
    Investment securities:                    
    Taxable interest  477    479   458    477    449   1,415   1,334 
    Tax-exempt interest  980    978   980    986    982   2,938   2,721 
    Dividends on stock  148    91   88    68    59   326   116 
    Total interest and dividend income  23,070    22,837   20,304    16,258    13,567   66,212   38,648 
    INTEREST EXPENSE                    
    Deposits  5,632    3,851   2,990    1,771    812   12,472   2,247 
    Short-term borrowings  1,258    1,462   653    263    44   3,373   44 
    Other borrowings  213    170   155    142    112   539   262 
    Total interest expense  7,103    5,483   3,798    2,176    968   16,384   2,553 
                         
    NET INTEREST INCOME  15,967    17,354   16,506    14,082    12,599   49,828   36,095 
                         
    Provision for credit losses  1,127    814   507    -    -   2,449   - 
                         
    NET INTEREST INCOME AFTER PROVISION                    
    FOR CREDIT LOSSES  14,840    16,540   15,999    14,082    12,599   47,379   36,095 
    NONINTEREST INCOME                    
    Service charges on deposit accounts  954    940   987    976    1,004   2,880   2,874 
    Gain (loss) on equity  48    (67)  (138)   (77)   (57)  (157)  (96)
    Gain on other real estate owned  -    -   2    -    -   2   - 
    Earnings on bank-owned life insurance  207    220   200    137    108   627   322 
    Gain (loss) on sale of loans  45    6   23    (4)   7   74   28 
    Revenue from investment services  190    174   186    147    233   550   527 
    Gross rental income  110    77   102    951    -   290   - 
    Other income  263    242   318    284    251   822   677 
    Total noninterest income  1,817    1,592   1,680    2,414    1,546   5,088   4,332 
                         
    NONINTEREST EXPENSE                    
    Salaries and employee benefits  5,994    6,019   5,852    4,886    4,491   17,865   12,662 
    Occupancy expense  699    659   696    487    458   2,054   1,546 
    Equipment expense  297    354   317    252    233   969   822 
    Data processing costs  1,209    1,137   1,070    1,050    985   3,587   2,650 
    Ohio state franchise tax  398    398   385    279    293   1,180   878 
    Federal deposit insurance expense  207    249   120    105    84   576   224 
    Professional fees  545    550   538    382    280   1,633   1,118 
    Other real estate owned writedowns  -    -   -    1,000    -   -   215 
    Advertising expense  414    415   486    308    268   1,315   725 
    Software amortization expense  24    23   26    28    27   73   115 
    Core deposit intangible amortization  265    265   265    140    78   794   232 
    Gross other real estate owned expenses  195    63   132    692    1   390   - 
    Merger-related costs  22    206   245    1,413    390   300   969 
    Other expense  1,849    1,716   1,661    1,321    1,298   5,228   3,531 
    Total noninterest expense  12,118    12,054   11,793    12,343    8,886   35,964   25,687 
                         
    Income before income taxes  4,539    6,078   5,886    4,153    5,259   16,503   14,740 
    Income taxes  703    986   989    651    1,010   2,678   2,569 
                         
    NET INCOME$ 3,836  $ 5,092  $4,897  $ 3,502  $ 4,249  $13,825  $12,171 
                         
    PTPP (1)$ 5,666  $ 6,892  $6,393  $ 4,153  $ 5,259  $18,952  $14,740 
                         
    (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  For the Nine Months Ended
      September 30, June 30,  March 31,  December 31,  September 30, September 30, September 30,
       2023    2023   2023    2022    2022   2023   2022 
    Per common share data                    
    Net income per common share - basic$ 0.47  $ 0.63  $0.60  $ 0.53  $ 0.73  $1.71  $2.08 
    Net income per common share - diluted$ 0.47  $ 0.63  $0.60  $ 0.53  $ 0.73  $1.70  $2.08 
    Dividends declared per share$ 0.20  $ 0.20  $0.20  $ 0.30  $ 0.17  $0.60  $0.51 
    Book value per share (period end)$ 23.94  $ 24.38  $24.13  $ 23.98  $ 21.30  $23.94  $21.30 
    Tangible book value per share (period end) (1) (2)$ 18.62  $ 19.02  $19.29  $ 19.19  $ 18.48  $18.62  $18.48 
    Dividends declared$ 1,619  $ 1,616  $1,605  $ 2,514  $ 983  $4,841  $2,976 
    Dividend yield  3.12%   2.99%  2.89%   4.34%   2.49%  3.16%  2.52%
    Dividend payout ratio  42.21%   31.74%  32.78%   71.79%   23.13%  35.02%  24.45%
    Average shares outstanding - basic  8,092,494    8,088,793   8,138,771    6,593,616    5,792,773   8,106,517   5,840,757 
    Average shares outstanding - diluted  8,101,306    8,101,984   8,152,629    6,610,907    5,805,799   8,115,329   5,853,783 
    Period ending shares outstanding  8,092,576    8,088,793   8,088,793    8,245,235    5,767,803   8,092,576   5,767,803 
                         
    Selected ratios                    
    Return on average assets (Annualized)  0.86%   1.17%  1.16%   0.97%   1.32%  1.06%  1.24%
    Return on average equity (Annualized)  7.73%   10.41%  10.19%   9.35%   12.94%  9.43%  11.96%
    Return on average tangible common equity (1) (3)  9.91%   13.12%  12.77%   11.13%   14.79%  11.92%  13.59%
    Efficiency (4)  65.65%   61.27%  62.44%   72.75%   61.07%  63.10%  61.79%
    Equity to assets at period end  10.80%   11.26%  11.30%   11.71%   9.09%  10.80%  9.09%
    Noninterest expense to average assets  0.68%   0.69%  0.69%   0.86%   0.69%  2.06%  1.96%
                         
    (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  For the Nine Months Ended
      September 30, June 30,  March 31,  December 31,  September 30, September 30, September 30,
    Yields  2023    2023   2023    2022    2022   2023   2022 
    Interest-earning assets:                    
    Loans receivable (1)  5.82%   5.96%  5.45%   5.11%   4.78%  5.75%  4.66%
    Investment securities (1)  4.09%   4.08%  4.11%   3.83%   3.90%  4.08%  3.69%
    Interest-earning deposits with other banks  4.13%   3.98%  3.46%   3.42%   2.06%  3.85%  0.82%
    Total interest-earning assets  5.58%   5.69%  5.22%   4.88%   4.55%  5.50%  4.30%
    Deposits:                    
    Interest-bearing demand deposits  1.51%   1.11%  0.83%   0.83%   0.22%  1.20%  0.17%
    Money market deposits  2.94%   2.21%  1.52%   1.00%   0.46%  2.29%  0.47%
    Savings deposits  0.58%   0.73%  1.03%   0.49%   0.19%  0.80%  0.10%
    Certificates of deposit  3.27%   2.35%  1.71%   1.30%   0.96%  2.50%  0.89%
    Total interest-bearing deposits  2.16%   1.60%  1.28%   0.87%   0.43%  1.70%  0.39%
    Non-Deposit Funding:                    
    Borrowings  5.66%   5.26%  4.78%   4.25%   2.94%  5.30%  2.61%
    Total interest-bearing liabilities  2.48%   2.02%  1.52%   1.02%   0.50%  2.03%  0.43%
    Cost of deposits  1.53%   1.09%  0.84%   0.57%   0.29%  1.16%  0.26%
    Cost of funds  1.80%   1.43%  1.02%   0.68%   0.34%  1.42%  0.29%
    Net interest margin (2)  3.88%   4.34%  4.26%   4.23%   4.23%  4.15%  4.02%
                         
    (1) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were determined using an effective tax rate of 21%.         
    (2) Net interest margin represents net interest income as a percentage of average interest-earning assets.               
                         
      For the Three Months Ended      
      September 30, June 30,  March 31,  December 31,  September 30,     
    Asset quality data  2023    2023   2023    2022    2022       
    (Dollar amounts in thousands, unaudited)                    
    Nonperforming loans (1)$ 7,717  $ 7,116  $6,882  $ 2,111  $ 3,692       
    Other real estate owned  5,792    5,792   5,792    5,821    6,792       
    Nonperforming assets$ 13,509  $ 12,908  $12,674  $ 7,932  $ 10,484       
                         
    Allowance for credit losses$ 20,986  $ 20,591  $20,162  $ 14,438  $ 14,532       
    Allowance for credit losses/total loans  1.45%   1.46%  1.46%   1.07%   1.46%      
    Net charge-offs (recoveries):                    
    Quarter-to-date$ (16) $ 111  $(8) $ 94  $ 18       
    Year-to-date  87    103   (8)   (96)   (190)      
    Net charge-offs (recoveries) to average loans, annualized:                    
    Quarter-to-date  0.00%   0.03%  0.00%   0.03%   0.01%      
    Year-to-date  0.01%   0.01%  0.00%   (0.01%)   (0.02%)      
                         
    Nonperforming loans/total loans  0.53%   0.50%  0.50%   0.16%   0.37%      
    Allowance for credit losses/nonperforming loans  271.95%   289.36%  292.97%   683.94%   393.61%      
    Nonperforming assets/total assets  0.75%   0.74%  0.73%   0.47%   0.78%      
    (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) September 30, June 30,  March 31,  December 31,  September 30,     
       2023    2023   2023    2022    2022       
                         
    Stockholders' equity$ 193,749  $ 197,227  $195,165  $ 197,691  $ 122,855       
    Less goodwill and other intangibles  43,103    43,368   39,171    39,436    16,242       
    Tangible common equity$ 150,646  $ 153,859  $155,994  $ 158,255  $ 106,613       
                         
    Shares outstanding  8,092,576    8,088,793   8,088,793    8,245,235    5,767,803       
    Tangible book value per share$ 18.62  $ 19.02  $19.29  $ 19.19  $ 18.48       
                         
    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,
       2023    2023   2023    2022    2022   2023   2022 
                         
    Average stockholders' equity$ 196,795  $ 196,183  $194,814  $ 148,616  $ 130,263  $196,074  $136,090 
    Less average goodwill and other intangibles  43,232    40,522   39,300    23,731    16,280   41,018   16,357 
    Average tangible common equity$ 153,563  $ 155,661  $155,514  $ 124,885  $ 113,983  $155,056  $119,733 
                         
    Net income$ 3,836  $ 5,092  $4,897  $ 4,896  $ 3,502  $13,825  $12,171 
    Return on average tangible common equity (annualized)  9.91%   13.12%  12.77%   11.13%   14.79%  11.92%  13.59%
                         
    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,
       2023    2023   2023    2022    2022   2023   2022 
                         
    Net income$ 3,836  $ 5,092  $4,897  $ 3,502  $ 4,249  $13,825  $12,171 
    Add income taxes  703    986   989    651    1,010   2,678   2,569 
    Add provision for credit losses  1,127    814   507    -    -   2,449   - 
    PTPP$ 5,666  $ 6,892  $6,393  $ 4,153  $ 5,259  $18,952  $14,740 
                         
    MIDDLEFIELD BANC CORP.                    
    Average Balance Sheets                    
    (Dollar amounts in thousands, unaudited)                    
      For the Three Months Ended   
      September 30,  September 30,   
       2023    2022    
      Average     Average  Average     Average   
      Balance  Interest  Yield/Cost  Balance  Interest  Yield/Cost   
    Interest-earning assets:                    
    Loans Receivable (1) $1,425,375   $20,899   5.82%  $987,689   $11,892   4.78%   
    Investment securities (1)  166,671    1,457   4.09%   172,316    1,431   3.90%   
    Interest-earning deposits with other banks (2)  68,587    714   4.13%   46,938    244   2.06%   
    Total interest-earning assets  1,660,633    23,070   5.58%   1,206,943    13,567   4.55%   
    Noninterest-earning assets  115,353          73,753          
    Total assets $1,775,986         $1,280,696          
    Interest-bearing liabilities:                    
    Interest-bearing demand deposits $256,153   $975   1.51%  $162,878   $91   0.22%   
    Money market deposits  259,802    1,928   2.94%   155,095    180   0.46%   
    Savings deposits  225,216    327   0.58%   249,898    119   0.19%   
    Certificates of deposit  291,409    2,402   3.27%   174,091    422   0.96%   
    Short-term borrowings  91,201    1,258   5.47%   8,554    44   2.04%   
    Other borrowings  11,940    213   7.08%   12,530    112   3.55%   
    Total interest-bearing liabilities  1,135,721    7,103   2.48%   763,046    968   0.50%   
    Noninterest-bearing liabilities:                    
    Noninterest-bearing demand deposits  431,775          382,351          
    Other liabilities  11,695          5,036          
    Stockholders' equity  196,795          130,263          
    Total liabilities and stockholders' equity $1,775,986         $1,280,696          
    Net interest income    $15,967         $12,599       
    Interest rate spread (3)       3.10%        4.05%   
    Net interest margin (4)       3.88%        4.23%   
    Ratio of average interest-earning assets to average interest-bearing liabilities       146.22%        158.17%   
                        
                         
    (1) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $270 and $277 for the three months ended September 30, 2023 and 2022, respectively.   
    (2) Includes dividends received on restricted stock.                    
    (3) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.       
    (4) Includes dividends received on restricted stock.                    
                         
      For the Three Months Ended   
      September 30,  June 30,   
       2023    2023    
      Average     Average  Average     Average   
      Balance  Interest  Yield/Cost  Balance  Interest  Yield/Cost   
    Interest-earning assets:                    
    Loans Receivable (1) $1,425,375   $20,899   5.82%  $1,400,074   $20,762   5.96%   
    Investment securities (1)  166,671    1,457   4.09%   168,890    1,457   4.08%   
    Interest-earning deposits with other banks (2)  68,587    714   4.13%   62,296    618   3.98%   
    Total interest-earning assets  1,660,633    23,070   5.58%   1,631,260    22,837   5.69%   
    Noninterest-earning assets  115,353          114,120          
    Total assets $1,775,986         $1,745,380          
    Interest-bearing liabilities:                    
    Interest-bearing demand deposits $256,153   $975   1.51%  $214,045   $595   1.11%   
    Money market deposits  259,802    1,928   2.94%   234,497    1,294   2.21%   
    Savings deposits  225,216    327   0.58%   263,587    478   0.73%   
    Certificates of deposit  291,409    2,402   3.27%   252,785    1,484   2.35%   
    Short-term borrowings  91,201    1,258   5.47%   112,349    1,462   5.22%   
    Other borrowings  11,940    213   7.08%   11,992    170   5.69%   
    Total interest-bearing liabilities  1,135,721    7,103   2.48%   1,089,255    5,483   2.02%   
    Noninterest-bearing liabilities:                    
    Noninterest-bearing demand deposits  431,775          450,835          
    Other liabilities  11,695          9,107          
    Stockholders' equity  196,795          196,183          
    Total liabilities and stockholders' equity $1,775,986         $1,745,380          
    Net interest income    $15,967         $17,354       
    Interest rate spread (3)       3.10%        3.67%   
    Net interest margin (4)       3.88%        4.34%   
    Ratio of average interest-earning assets to average interest-bearing liabilities       146.22%        149.76%   
                        
                         
    (1) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $270 and $294 for the three months ended September 30, 2023 and June 30, 2022, respectively. 
    (2) Includes dividends received on restricted stock.                    
    (3) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.       
    (4) Includes dividends received on restricted stock.                    
                         
      For the Nine Months Ended   
      September 30,  September 30,   
       2023    2022    
      Average     Average  Average     Average   
      Balance  Interest  Yield/Cost  Balance  Interest  Yield/Cost   
    Interest-earning assets:                    
    Loans Receivable (1) $1,395,438   $59,935   5.75%  $980,787   $34,145   4.66%   
    Investment securities (1)  168,049    4,353   4.08%   173,094    4,055   3.69%   
    Interest-earning deposits with other banks (2)  66,730    1,924   3.85%   72,851    448   0.82%   
    Total interest-earning assets  1,630,217    66,212   5.50%   1,226,732    38,648   4.30%   
    Noninterest-earning assets  115,627          82,733          
    Total assets $1,745,844         $1,309,465          
    Interest-bearing liabilities:                    
    Interest-bearing demand deposits $216,044   $1,934   1.20%  $164,337   $210   0.17%   
    Money market deposits  234,236    4,005   2.29%   175,024    620   0.47%   
    Savings deposits  267,951    1,608   0.80%   256,762    197   0.10%   
    Certificates of deposit  263,448    4,925   2.50%   184,165    1,220   0.89%   
    Short-term borrowings  86,670    3,373   5.20%   2,851    44   2.06%   
    Other borrowings  11,990    539   6.01%   12,806    262   2.74%   
    Total interest-bearing liabilities  1,080,339    16,384   2.03%   795,945    2,553   0.43%   
    Noninterest-bearing liabilities:                    
    Noninterest-bearing demand deposits  458,086          372,343          
    Other liabilities  11,345          5,087          
    Stockholders' equity  196,074          136,090          
    Total liabilities and stockholders' equity $1,745,844         $1,309,465          
    Net interest income    $49,828         $36,095       
    Interest rate spread (3)       3.47%        3.87%   
    Net interest margin (4)       4.15%        4.02%   
    Ratio of average interest-earning assets to average interest-bearing liabilities       150.90%        154.12%   
                         
    (1) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $824 and $768 for the nine months ended September 30, 2023 and 2022, respectively.   
    (2) Includes dividends received on restricted stock.                    
    (3) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.       
    (4) Net interest margin represents net interest income as a percentage of average interest-earning assets.               
                         

     

    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

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