Middlefield Banc Corp. Reports 2024 Six-Month Financial Results

ソース: Nasdaq GlobeNewswire / 18 7 2024 17:00:20 America/New_York

MIDDLEFIELD, OHIO, July 18, 2024 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the six months ended June 30, 2024.

2024 Six-Month Financial Highlights (on a year-over-year basis):

Net income was $8.3 million, compared to $10.0 million
Pre-tax, pre-provision net income⁽¹⁾ was $9.7 million, compared to $13.3 million
Earnings were $1.03 per diluted share, compared to $1.23 per diluted share
Net interest income after the provision for credit losses was $30.1 million, compared to $32.5 million
Noninterest income increased 8.7% to $3.6 million, compared to $3.3 million
Total loans increased 6.3% to a record $1.50 billion, compared to $1.41 billion
Total deposits increased 2.6% to a record $1.47 billion, compared to $1.43 billion
Return on average assets annualized was 0.91%, compared to 1.16%
Return on average equity annualized was 8.16%, compared to 9.64%
Return on average tangible common equity⁽¹⁾ was 10.30%, compared to 11.92%
Asset quality remains at historically low levels with nonperforming assets to total assets of 0.87%, compared to 0.74%
Allowance for credit losses was 1.46% of total loans, compared to 1.46%
Equity to assets remained strong at 11.31%, compared to 11.26%
Book value increased 5.1% to $25.63 from $24.38 per share
Tangible book value⁽¹⁾ increased 7.1% to $20.37 from $19.02 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, “Throughout our Central, Western and Northeast Ohio markets, Middlefield’s team members are dedicated to providing leading community-oriented financial services to our customers. This long-standing commitment supports the financial success of our local communities, which is especially important as uncertainty about FOMC monetary policies and economic conditions has increased. Despite these macro trends, we remain focused on supporting our communities, managing expenses, and maintaining a strong balance sheet. I am pleased with the progress we are making as total loans at June 30, 2024, increased 6.3% year-over-year to a record $1.50 billion, year-to-date noninterest expense is in line with the prior year period, and we remain extremely ‘well-capitalized’ under applicable banking requirements.”

“We also continue to pursue our multi-year strategic growth goals, which are focused on increasing revenue opportunities, improving our customer experience, and advancing operational performance to create lasting value for our shareholders. For the 2024 second quarter, noninterest income increased 10.6% over the same period a year ago, and total deposits were up 2.6% over the past year to a record $1.47 billion, as we successfully diversify our revenue and increase our market share. In addition, our tangible book value⁽¹⁾ has grown 7.1% to $20.37 per share, reflecting stable profitability, limited accumulated other comprehensive income (AOCI) impacts, and asset quality in line with historical performance. While we expect the near-term banking environment to remain challenging, we continue to focus on supporting our communities, strategically allocating capital, maintaining disciplined underwriting standards, and prudently managing expenses,” concluded Mr. Zimmerly. ⁽¹⁾See non-GAAP reconciliation under the section "GAAP to Non-GAAP Reconciliations".

Income Statement
Net interest income for the 2024 first half decreased $3.8 million to $30.1 million, compared to $33.9 million for the same period last year. The net interest margin for the 2024 first half was 3.53%, compared to 4.23% last year.

For the 2024 first half, noninterest income increased $0.3 million to $3.6 million, compared to $3.3 million for the same period in 2023.

Noninterest expense for the 2024 first half was $23.9 million, compared to $23.8 million for the 2023 first half.

Net income for the six months ended June 30, 2024, was $8.3 million, or $1.03 per diluted share, compared to $10.0 million, or $1.23 per diluted share, for the same period last year.

For the 2024 first half, pre-tax, pre-provision net income was $9.7 million, compared to $13.3 million last year. (See non-GAAP reconciliation under the section “GAAP to Non-GAAP Reconciliations”.)

Balance Sheet
Total assets at June 30, 2024, increased 4.4% to $1.83 billion, compared to $1.75 billion at June 30, 2023. Total loans at June 30, 2024, were $1.50 billion, compared to $1.41 billion at June 30, 2023. The 6.3% year-over-year increase in total loans was primarily due to higher commercial and industrial, residential real estate, and multifamily loans.

Total liabilities at June 30, 2024, increased 4.3% to $1.62 billion, compared to $1.55 billion at June 30, 2023. Total deposits at June 30, 2024, were $1.47 billion, compared to $1.43 billion at June 30, 2023. The 2.6% year-over-year increase in deposits was primarily due to growth in money market and time deposits, partially offset by declines in noninterest-bearing and interest-bearing demand and savings accounts. Noninterest-bearing demand deposits were 26.3% of total deposits at June 30, 2024, compared to 30.8% at June 30, 2023. At June 30, 2024, the Company had brokered deposits of $90.4 million, compared to $90.3 million at June 30, 2023.

The investment securities available for sale portfolio was $166.4 million at June 30, 2024, compared with $167.2 million at June 30, 2023.

Michael Ranttila, Chief Financial Officer, stated, “Asset quality remains stable. We have achieved four consecutive quarters with net quarter-to-date recoveries, and nonperforming assets to total assets at June 30, 2024, were 0.87%, compared to 0.74% at June 30, 2023. The slight uptick in nonperforming assets to total assets was due primarily to two relationships in the freight and industrial segments that moved to nonaccrual in the second quarter. We believe these relationships do not indicate a trend in the markets we serve, our portfolio, or underwriting standards. Despite this increase, we remain well reserved for potential credit losses with an allowance for credit losses to total loans of 1.46% at June 30, 2024, which was in line with the same period a year ago, and up slightly from the quarter ended March 31, 2024.”

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. Year-to-date, total deposits increased 3.0%, while our Federal Home Loan Bank (FHLB) advances decreased by 23.3%. At June 30, 2024, additional borrowing capacity at the FHLB was $440.3 million, with the potential to acquire additional brokered deposits of approximately $187.8 million. The combination of high levels of potentially liquid assets, cash flows from operations, and additional borrowing capacity provides us with excellent liquidity levels to support our long-term growth strategies and our legacy of returning excess capital to shareholders.”

Middlefield's CRE portfolio included the following categories at June 30, 2024:

	Balance		Percent of			Percent of
CRE Category	(in thousands)		CRE Portfolio			Loan Portfolio
Multi-Family	$	86,951		13.3	%		5.8	%
Office Space		76,341		11.6	%		5.1	%
Shopping Plazas		70,556		10.9	%		4.7	%
Self-Storage		55,267		8.4	%		3.7	%
Hospitality		39,540		6.0	%		2.6	%
Senior Living		28,911		4.4	%		1.9	%
Other		297,842		45.4	%		19.9	%
Total CRE	$	655,408		100.0	%		43.7	%

Stockholders' Equity and Dividends
At June 30, 2024, stockholders' equity was $206.8 million compared to $197.2 million at June 30, 2023. The 4.8% 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 stock acquired under the Company's stock repurchase program. On a per-share basis, shareholders' equity at June 30, 2024, was $25.63 compared to $24.38 at June 30, 2023.

At June 30, 2024, tangible stockholders' equity⁽¹⁾ was $164.3 million, compared to $153.9 million at June 30, 2023. On a per-share basis, tangible stockholders' equity⁽¹⁾ was $20.37 at June 30, 2024, compared to $19.02 at June 30, 2023. ⁽¹⁾See non-GAAP reconciliation under the section “GAAP to Non-GAAP Reconciliations”.

For the 2024 first half, the Company declared cash dividends of $0.40 per share, totaling $3.2 million.

For the 2024 first half, the Company repurchased 43,858 shares of its common stock, at an average price of $24.00 per share. There were no repurchases during the second quarter of 2024.

At June 30, 2024, the Company's equity-to-assets ratio was 11.31%, compared to 11.26% at June 30, 2023.

Asset Quality
For the 2024 first half, the Company recorded a recovery of credit losses of $49,000 versus a provision for credit losses of $1.3 million for the same period last year.

Net recoveries were $97,000, or (0.01%) of average loans, annualized, during the first half of 2024, compared to net charge-offs of $103,000, or 0.01% of average loans, annualized, at June 30, 2023.

Nonperforming loans at June 30, 2024, were $16.0 million, compared to $7.1 million at June 30, 2023. Nonperforming assets at June 30, 2024, were $16.0 million, compared to $12.9 million at June 30, 2023. The allowance for credit losses at June 30, 2024, stood at $21.8 million, or 1.46% of total loans, compared to $20.6 million, or 1.46% of total loans at June 30, 2023. The increase in the allowance for credit losses was mainly due to changes in projected loss drivers, prepayment assumptions, and curtailment expectations over the reasonable and supportable forecast period as well as an overall increase in total loans.

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 $1.83 billion at June 30, 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)

	June 30,		March 31,		December 31,		September 30,		June 30,
Balance Sheets (period end)	2024		2024		2023		2023		2023
ASSETS
Cash and due from banks	$	50,496	$	44,816	$	56,397	$	56,228	$	49,422
Federal funds sold		1,762		1,438		4,439		9,274		9,654
Cash and cash equivalents		52,258		46,254		60,836		65,502		59,076
Investment securities available for sale, at fair value		166,424		167,890		170,779		159,414		167,209
Other investments		881		907		955		958		711
Loans held for sale		-		-		-		632		171
Loans:
Commercial real estate:
Owner occupied		182,809		178,543		183,545		185,593		187,919
Non-owner occupied		385,648		398,845		401,580		382,676		385,846
Multifamily		86,951		81,691		82,506		82,578		58,579
Residential real estate		337,121		331,480		328,854		321,331		312,196
Commercial and industrial		234,702		227,433		221,508		214,334		209,349
Home equity lines of credit		131,047		129,287		127,818		127,494		126,894
Construction and other		132,530		135,716		125,105		127,106		118,851
Consumer installment		6,896		7,131		7,214		7,481		9,801
Total loans		1,497,704		1,490,126		1,478,130		1,448,593		1,409,435
Less allowance for credit losses		21,795		21,069		21,693		20,986		20,591
Net loans		1,475,909		1,469,057		1,456,437		1,427,607		1,388,844
Premises and equipment, net		20,744		21,035		21,339		21,708		21,629
Goodwill		36,356		36,356		36,356		36,197		36,197
Core deposit intangibles		6,126		6,384		6,642		6,906		7,171
Bank-owned life insurance		34,802		34,575		34,349		34,153		34,235
Other real estate owned		-		-		-		5,792		5,792
Accrued interest receivable and other assets		34,686		34,210		35,190		34,551		30,472
TOTAL ASSETS	$	1,828,186	$	1,816,668	$	1,822,883	$	1,793,420	$	1,751,507

	June 30,			March 31,			December 31,			September 30,			June 30,
	2024			2024			2023			2023			2023
LIABILITIES
Deposits:
Noninterest-bearing demand	$	387,024		$	390,185		$	401,384		$	424,055		$	441,102
Interest-bearing demand		206,542			209,015			205,582			243,973			229,633
Money market		355,630			318,823			274,682			275,766			241,537
Savings		192,472			196,721			210,639			216,453			231,508
Time		327,876			332,165			334,315			296,732			287,861
Total deposits		1,469,544			1,446,909			1,426,602			1,456,979			1,431,641
Federal Home Loan Bank advances		125,000			137,000			163,000			118,000			100,000
Other borrowings		11,762			11,812			11,862			11,912			11,961
Accrued interest payable and other liabilities		15,092			15,372			15,738			12,780			10,678
TOTAL LIABILITIES		1,621,398			1,611,093			1,617,202			1,599,671			1,554,280
STOCKHOLDERS' EQUITY
Common stock, no par value; 25,000,000 shares authorized, 9,946,454
shares issued, 8,067,144 shares outstanding as of June 30, 2024		161,823			161,823			161,388			161,312			161,211
Retained earnings		105,342			102,791			100,237			98,717			96,500
Accumulated other comprehensive loss		(19,468	)		(18,130	)		(16,090	)		(26,426	)		(20,630	)
Treasury stock, at cost; 1,879,310 shares as of June 30, 2024		(40,909	)		(40,909	)		(39,854	)		(39,854	)		(39,854	)
TOTAL STOCKHOLDERS' EQUITY		206,788			205,575			205,681			193,749			197,227
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,828,186		$	1,816,668		$	1,822,883		$	1,793,420		$	1,751,507


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

	For the Three Months Ended														For the Six Months Ended
	June 30,			March 31,			December 31,			September 30,		June 30,			June 30,			June 30,
Statements of Income	2024			2024			2023			2023		2023			2024			2023
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	23,422		$	22,395		$	22,027		$	20,899	$	20,762		$	45,817		$	39,037
Interest-earning deposits in other institutions		386			437			370			300		369			823			620
Federal funds sold		122			152			94			266		158			274			411
Investment securities:
Taxable interest		505			467			479			477		479			972			937
Tax-exempt interest		966			972			976			980		978			1,938			1,958
Dividends on stock		198			189			144			148		91			387			179
Total interest and dividend income		25,599			24,612			24,090			23,070		22,837			50,211			43,142
INTEREST EXPENSE
Deposits		8,423			7,466			6,522			5,632		3,851			15,889			6,841
Short-term borrowings		1,920			1,993			2,013			1,258		1,462			3,913			2,114
Other borrowings		173			184			179			213		170			357			326
Total interest expense		10,516			9,643			8,714			7,103		5,483			20,159			9,281
NET INTEREST INCOME		15,083			14,969			15,376			15,967		17,354			30,052			33,861
Provision (Recovery of) for credit losses		87			(136	)		554			1,127		814			(49	)		1,321
NET INTEREST INCOME AFTER PROVISION
(RECOVERY OF) FOR CREDIT LOSSES		14,996			15,105			14,822			14,840		16,540			30,101			32,540
NONINTEREST INCOME
Service charges on deposit accounts		971			909			997			954		940			1,880			1,926
(Loss) gain on equity securities		(27	)		(52	)		(4	)		48		(67	)		(79	)		(205	)
(Loss) gain on other real estate owned		-			-			(172	)		-		-			-			2
Earnings on bank-owned life insurance		227			227			196			207		220			454			420
Gain on sale of loans		69			10			23			45		6			79			29
Revenue from investment services		269			204			193			190		174			473			359
Gross rental income		-			67			132			110		77			67			179
Other income		251			431			237			263		242			682			560
Total noninterest income		1,760			1,796			1,602			1,817		1,592			3,556			3,270
NONINTEREST EXPENSE
Salaries and employee benefits		6,111			6,333			6,646			5,994		6,019			12,444			11,871
Occupancy expense		601			552			512			699		659			1,153			1,355
Equipment expense		261			240			273			297		354			501			672
Data processing costs		1,168			1,249			1,348			1,209		1,137			2,417			2,207
Ohio state franchise tax		397			397			397			398		398			794			783
Federal deposit insurance expense		256			251			285			207		249			507			369
Professional fees		557			558			660			545		550			1,115			1,088
Advertising expense		508			419			162			414		415			927			901
Software amortization expense		21			22			22			24		23			43			49
Core deposit intangible amortization		258			258			264			265		265			516			529
Gross other real estate owned expenses		-			99			120			195		63			99			195
Merger-related costs		-			-			-			22		206			-			449
Other expense		1,764			1,587			1,483			1,849		1,716			3,351			3,378
Total noninterest expense		11,902			11,965			12,172			12,118		12,054			23,867			23,846
Income before income taxes		4,854			4,936			4,252			4,539		6,078			9,790			11,964
Income taxes		690			769			709			703		986			1,459			1,975
NET INCOME	$	4,164		$	4,167		$	3,543		$	3,836	$	5,092		$	8,331		$	9,989
PTPP ⁽¹⁾	$	4,941		$	4,800		$	4,806		$	5,666	$	6,892		$	9,741		$	13,285


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 Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
	2024			2024			2023			2023			2023			2024			2023
Per common share data
Net income per common share - basic	$	0.52		$	0.52		$	0.44		$	0.47		$	0.63		$	1.04		$	1.23
Net income per common share - diluted	$	0.52		$	0.51		$	0.44		$	0.47		$	0.63		$	1.03		$	1.23
Dividends declared per share	$	0.20		$	0.20		$	0.25		$	0.20		$	0.20		$	0.40		$	0.40
Book value per share (period end)	$	25.63		$	25.48		$	25.41		$	23.94		$	24.38		$	25.63		$	24.38
Tangible book value per share (period end) ^{(1) (2)}	$	20.37		$	20.18		$	20.10		$	18.62		$	19.02		$	20.37		$	19.02
Dividends declared	$	1,613		$	1,613		$	2,023		$	1,619		$	1,616		$	3,226		$	3,223
Dividend yield		3.34	%		3.37	%		3.06	%		3.12	%		2.99	%		3.34	%		3.01	%
Dividend payout ratio		38.74	%		38.71	%		57.10	%		42.21	%		31.74	%		38.72	%		32.27	%
Average shares outstanding - basic		8,067,144			8,091,203			8,093,478			8,092,494			8,088,793			8,079,174			8,113,645
Average shares outstanding - diluted		8,072,499			8,096,317			8,116,261			8,101,306			8,101,984			8,084,529			8,126,836
Period ending shares outstanding		8,067,144			8,067,144			8,095,252			8,092,576			8,088,793			8,067,144			8,088,793
Selected ratios
Return on average assets (Annualized)		0.91	%		0.92	%		0.78	%		0.86	%		1.17	%		0.91	%		1.16	%
Return on average equity (Annualized)		8.15	%		8.16	%		7.13	%		7.73	%		10.41	%		8.16	%		9.64	%
Return on average tangible common equity^{(1) (3)}		10.29	%		10.30	%		9.11	%		9.91	%		13.12	%		10.30	%		11.92	%
Efficiency⁽⁴⁾		67.97	%		68.68	%		68.99	%		65.65	%		61.27	%		68.32	%		62.73	%
Equity to assets at period end		11.31	%		11.32	%		11.28	%		10.80	%		11.26	%		11.31	%		11.26	%
Noninterest expense to average assets		0.64	%		0.66	%		0.68	%		0.68	%		0.69	%		1.30	%		1.38	%

⁽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.

	For the Three Months Ended															For the Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
Yields	2024			2024			2023			2023			2023			2024			2023
Interest-earning assets:
Loans receivable ⁽¹⁾		6.27	%		6.11	%		6.01	%		5.82	%		5.96	%		6.19	%		5.71	%
Investment securities ^{(1) (2)}		3.59	%		3.52	%		3.52	%		3.51	%		3.54	%		3.56	%		3.55	%
Interest-earning deposits with other banks		4.59	%		4.88	%		3.71	%		4.13	%		3.98	%		4.74	%		3.71	%
Total interest-earning assets		5.92	%		5.77	%		5.64	%		5.49	%		5.60	%		5.85	%		5.37	%
Deposits:
Interest-bearing demand deposits		1.93	%		1.86	%		1.67	%		1.51	%		1.11	%		1.90	%		0.99	%
Money market deposits		3.95	%		3.81	%		3.58	%		2.94	%		2.21	%		3.88	%		1.89	%
Savings deposits		0.64	%		0.58	%		0.59	%		0.58	%		0.73	%		0.61	%		0.89	%
Certificates of deposit		4.57	%		4.06	%		3.68	%		3.27	%		2.35	%		4.32	%		2.04	%
Total interest-bearing deposits		3.15	%		2.88	%		2.56	%		2.16	%		1.60	%		3.02	%		1.44	%
Non-Deposit Funding:
Borrowings		5.60	%		5.61	%		5.57	%		5.66	%		5.26	%		5.60	%		5.10	%
Total interest-bearing liabilities		3.45	%		3.23	%		2.96	%		2.48	%		2.02	%		3.34	%		1.78	%
Cost of deposits		2.30	%		2.08	%		1.81	%		1.53	%		1.09	%		2.19	%		0.97	%
Cost of funds		2.61	%		2.42	%		2.18	%		1.80	%		1.43	%		2.52	%		1.23	%
Net interest margin ⁽³⁾		3.51	%		3.54	%		3.63	%		3.82	%		4.27	%		3.53	%		4.23	%

⁽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.


MIDDLEFIELD BANC CORP. Consolidated Selected Financial Highlights (unaudited)

	For the Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
Asset quality data	2024			2024			2023			2023			2023
(Dollar amounts in thousands, unaudited)
Nonperforming loans	$	15,961		$	10,831		$	10,877		$	7,717		$	7,116
Other real estate owned		-			-			-			5,792			5,792
Nonperforming assets	$	15,961		$	10,831		$	10,877		$	13,509		$	12,908
Allowance for credit losses	$	21,795		$	21,069		$	21,693		$	20,986		$	20,591
Allowance for credit losses/total loans		1.46	%		1.41	%		1.47	%		1.45	%		1.46	%
Net charge-offs (recoveries):
Quarter-to-date	$	(29	)	$	(68	)	$	(117	)	$	(16	)	$	111
Year-to-date		(97	)		(68	)		(31	)		87			103
Net charge-offs (recoveries) to average loans, annualized:
Quarter-to-date		(0.01	%)		(0.02	%)		(0.03	%)		0.00	%		0.03	%
Year-to-date		(0.01	%)		(0.02	%)		0.00	%		0.01	%		0.01	%
Nonperforming loans/total loans		1.07	%		0.73	%		0.74	%		0.53	%		0.50	%
Allowance for credit losses/nonperforming loans		136.55	%		194.52	%		199.44	%		271.95	%		289.36	%
Nonperforming assets/total assets		0.87	%		0.60	%		0.60	%		0.75	%		0.74	%


MIDDLEFIELD BANC CORP. GAAP to Non-GAAP Reconciliations

Reconciliation of Common Stockholders' Equity to Tangible Common Equity	For the Three Months Ended
(Dollar amounts in thousands, unaudited)	June 30,		March 31,		December 31,		September 30,		June 30,
	2024		2024		2023		2023		2023
Stockholders' equity	$	206,788	$	205,575	$	205,681	$	193,749	$	197,227
Less goodwill and other intangibles		42,482		42,740		42,998		43,103		43,368
Tangible common equity	$	164,306	$	162,835	$	162,683	$	150,646	$	153,859
Shares outstanding		8,067,144		8,067,144		8,095,252		8,092,576		8,088,793
Tangible book value per share	$	20.37	$	20.18	$	20.10	$	18.62	$	19.02

Reconciliation of Average Equity to Return on Average Tangible Common Equity	For the Three Months Ended															For the Six Months Ended

	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
	2024			2024			2023			2023			2023			2024			2023
Average stockholders' equity	$	205,379		$	205,342		$	197,208		$	196,795		$	196,183		$	205,330		$	195,826
Less average goodwill and other intangibles		42,607			42,654			42,972			43,232			40,522			42,609			39,911
Average tangible common equity	$	162,772		$	162,688		$	154,236		$	153,563		$	155,661		$	162,721		$	155,915
Net income	$	4,164		$	4,167		$	3,543		$	3,836		$	5,092		$	8,331		$	9,989
Return on average tangible common equity (annualized)		10.29	%		10.30	%		9.11	%		9.91	%		13.12	%		10.30	%		12.92	%

Reconciliation of Pre-Tax Pre-Provision Income (PTPP)	For the Three Months Ended											For the Six Months Ended

	June 30,		March 31,			December 31,		September 30,		June 30,		June 30,			June 30,
	2024		2024			2023		2023		2023		2024			2023
Net income	$	4,164	$	4,167		$	3,543	$	3,836	$	5,092	$	8,331		$	9,989
Add income taxes		690		769			709		703		986		1,459			1,975
Add provision (recovery of) for credit losses		87		(136	)		554		1,127		814		(49	)		1,321
PTPP	$	4,941	$	4,800		$	4,806	$	5,666	$	6,892	$	9,741		$	13,285


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

	For the Three Months Ended
	June 30,							June 30,
	2024							2023
	Average				Average			Average				Average
	Balance		Interest		Yield/Cost			Balance		Interest		Yield/Cost
Interest-earning assets:
Loans receivable ⁽¹⁾	$	1,503,440	$	23,422		6.27	%	$	1,400,074	$	20,762		5.96	%
Investment securities ^{(1) (2)}		193,688		1,471		3.59	%		194,331		1,457		3.54	%
Interest-earning deposits with other banks ⁽³⁾		61,891		706		4.59	%		62,296		618		3.98	%
Total interest-earning assets		1,759,019		25,599		5.92	%		1,656,701		22,837		5.60	%
Noninterest-earning assets		84,495							88,679
Total assets	$	1,843,514						$	1,745,380
Interest-bearing liabilities:
Interest-bearing demand deposits	$	209,965	$	1,009		1.93	%	$	214,045	$	595		1.11	%
Money market deposits		337,937		3,320		3.95	%		234,497		1,294		2.21	%
Savings deposits		192,577		305		0.64	%		263,587		478		0.73	%
Certificates of deposit		333,542		3,789		4.57	%		252,785		1,484		2.35	%
Short-term borrowings		138,656		1,920		5.57	%		112,349		1,462		5.22	%
Other borrowings		11,791		173		5.90	%		11,992		170		5.69	%
Total interest-bearing liabilities		1,224,468		10,516		3.45	%		1,089,255		5,483		2.02	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		396,626							450,835
Other liabilities		17,042							9,107
Stockholders' equity		205,379							196,183
Total liabilities and stockholders' equity	$	1,843,514						$	1,745,380
Net interest income			$	15,083						$	17,354
Interest rate spread ⁽⁴⁾						2.47	%						3.58	%
Net interest margin ⁽⁵⁾						3.51	%						4.27	%
Ratio of average interest-earning assets to average interest-bearing liabilities						143.66	%						152.09	%

⁽¹⁾ Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $289 and $294 for the three months ended June 30, 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
	June 30,							March 31,
	2024							2024
	Average				Average			Average				Average
	Balance		Interest		Yield/Cost			Balance		Interest		Yield/Cost
Interest-earning assets:
Loans receivable ⁽¹⁾	$	1,503,440	$	23,422		6.27	%	$	1,476,543	$	22,395		6.11	%
Investment securities^{(1) (2)}		193,688		1,471		3.59	%		193,810		1,439		3.52	%
Interest-earning deposits with other banks ⁽³⁾		61,891		706		4.59	%		64,139		778		4.88	%
Total interest-earning assets		1,759,019		25,599		5.92	%		1,734,492		24,612		5.77	%
Noninterest-earning assets		84,495							88,192
Total assets	$	1,843,514						$	1,822,684
Interest-bearing liabilities:
Interest-bearing demand deposits	$	209,965	$	1,009		1.93	%	$	211,009	$	978		1.86	%
Money market deposits		337,937		3,320		3.95	%		298,479		2,827		3.81	%
Savings deposits		192,577		305		0.64	%		201,080		290		0.58	%
Certificates of deposit		333,542		3,789		4.57	%		333,871		3,371		4.06	%
Short-term borrowings		138,656		1,920		5.57	%		144,357		1,993		5.55	%
Other borrowings		11,791		173		5.90	%		11,840		184		6.25	%
Total interest-bearing liabilities		1,224,468		10,516		3.45	%		1,200,636		9,643		3.23	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		396,626							400,209
Other liabilities		17,042							16,497
Stockholders' equity		205,379							205,342
Total liabilities and stockholders' equity	$	1,843,514						$	1,822,684
Net interest income			$	15,083						$	14,969
Interest rate spread ⁽⁴⁾						2.47	%						2.54	%
Net interest margin⁽⁵⁾						3.51	%						3.54	%
Ratio of average interest-earning assets to average interest-bearing liabilities						143.66	%						144.46	%

⁽¹⁾ Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $289 and $282 for the three months ended June 30, 2024 and March 31, 2024, 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 Six Months Ended
	June 30,							June 30,
	2024							2023
	Average				Average			Average				Average
	Balance		Interest		Yield/Cost			Balance		Interest		Yield/Cost
Interest-earning assets:
Loans receivable ⁽¹⁾	$	1,489,992	$	45,817		6.19	%	$	1,380,470	$	39,037		5.71	%
Investment securities ^{(1) (2)}		193,749		2,910		3.56	%		194,181		2,895		3.55	%
Interest-earning deposits with other banks ⁽³⁾		63,015		1,484		4.74	%		65,802		1,210		3.71	%
Total interest-earning assets		1,746,756		50,211		5.85	%		1,640,453		43,142		5.37	%
Noninterest-earning assets		86,343							89,508
Total assets	$	1,833,099						$	1,729,961
Interest-bearing liabilities:
Interest-bearing demand deposits	$	210,487	$	1,986		1.90	%	$	195,990	$	960		0.99	%
Money market deposits		318,208		6,147		3.88	%		221,452		2,077		1.89	%
Savings deposits		196,828		594		0.61	%		289,318		1,281		0.89	%
Certificates of deposit		333,706		7,162		4.32	%		249,468		2,523		2.04	%
Short-term borrowings		141,507		3,913		5.56	%		84,404		2,114		5.05	%
Other borrowings		11,815		357		6.08	%		12,015		326		5.47	%
Total interest-bearing liabilities		1,212,551		20,159		3.34	%		1,052,647		9,281		1.78	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		398,417							471,242
Other liabilities		16,801							10,246
Stockholders' equity		205,330							195,826
Total liabilities and stockholders' equity	$	1,833,099						$	1,729,961
Net interest income			$	30,052						$	33,861
Interest rate spread ⁽⁴⁾						2.51	%						3.59	%
Net interest margin ⁽⁵⁾						3.53	%						4.23	%
Ratio of average interest-earning assets to average interest-bearing liabilities						144.06	%						155.84	%

⁽¹⁾ Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $570 and $572 for the six months ended June 30, 2024 and June 30, 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

Middlefield Banc Corp. Reports 2024 Six-Month Financial Results

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