Middlefield Banc Corp. Reports Record 2021 First Half Financial Results

Middlefield Banc Corp.
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MIDDLEFIELD, Ohio, July 16, 2021 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the 2021 first half and second quarter ended June 30, 2021.

2021 First Half Financial Highlights Include (on a year-over-year basis unless noted):

  • Net income of $8.6 million, or $1.35 per diluted share driven by record second quarter earnings of $4.4 million, or a record $0.70 per diluted share

  • Net interest margin improved by 16 basis points to 3.72%, compared to 3.56%

  • Total noninterest income was up 49.9% to $3.9 million

  • Pre-tax, pre-provision(1) income increased 35.4% to $11.4 million

  • Return on average assets increased to 1.26% from 0.64%

  • Return on average equity increased to 11.88% from 5.79%

  • Return on average tangible common equity(1) increased to 13.41% from 6.59%

  • Efficiency ratio improved to 57.60%, compared to 62.33%

  • Year-to-date net charge-offs declined 46.6% to $159,000

“Our record second quarter and first half earnings reflect strong operating performance across our business and improving economic trends throughout our Northeast and Central Ohio markets,” stated Thomas G. Caldwell, President and Chief Executive Officer. “In addition, we have successfully navigated the low interest rate environment throughout the 2021 first half by successfully managing our net interest margin, enhancing our efficiency ratio, controlling operating expenses, growing noninterest income, and maintaining strong asset quality.”

“Year-to-date, we have helped small business customers secure $93.5 million of PPP forgiveness, which provided a $1.5 million benefit to our yield on earnings assets. At June 30, 2021, $90.2 million of PPP loans remained on the balance sheet and we expect the majority of the outstanding PPP loans will be forgiven by year end.”

“While economic and interest rate uncertainty remains, we are focused on pursuing our long-term growth strategy, making investments across our business, and creating value for our shareholders. As a result, we recently hired two new loan officers in Central Ohio, we are improving our customer engagement by enhancing the Bank’s online resources and returning capital to shareholders through our higher year-over-year dividend payment and share buyback program. Year-to-date, we have repurchased 181,045 shares of our common stock at an average price of $23.16 per share, which includes 131,577 shares repurchased in the second quarter at an average price of $23.42 per share. We have repurchased our common stock at an average price of 111.2% to tangible book value, which we believe is a tremendous value and offers a significant opportunity for our shareholders to increase their ownership in Middlefield Banc Corp. Overall, I am pleased with our strong year-to-date performance, and we expect 2021 will be another strong year for the Company,” concluded Mr. Caldwell.

Income Statement
Net interest income for the 2021 first half, increased 14.6% to $23.8 million, compared to $20.8 million for the same period last year. Year-to-date, the net interest margin was 3.72%, compared to 3.56% for the same period last year. Net interest income for the 2021 second quarter was $11.9 million, compared to $10.7 million for the 2020 second quarter. The 10.8% increase in net interest income for the 2021 second quarter was largely a result of a 56.8% reduction in interest expense. The net interest margin for the 2021 second quarter was 3.72%, compared to 3.49% for the same period of 2020.

For the 2021 first half, noninterest income was $3.9 million, compared to $2.6 million for the same period last year. Noninterest income for the 2021 second quarter was $1.6 million, compared to $1.5 million for the same period last year.

For the 2021 first half, noninterest expense increased 9.0% to $16.3 million, compared to $14.9 million for the same period last year. Operating costs in the 2021 second quarter increased 3.1% to $7.9 million from $7.7 million for the 2020 second quarter.

Net income for the 2021 first half ended June 30, 2021, was a record $8.6 million, or a record $1.35 per diluted share, compared to $4.0 million, or $0.62 per diluted share for the same period last year. Net income for the 2021 second quarter ended June 30, 2021, was a quarterly record of $4.4 million, or $0.70 per diluted share, compared to $3.0 million, or $0.46 per diluted share for the same period last year.

Balance Sheet
Total assets at June 30, 2021, increased 1.3% to approximately $1.36 billion from $1.34 billion at June 30, 2020. Net loans at June 30, 2021, decreased 5.3% to $1.04 billion, compared to $1.10 billion at June 30, 2020 as PPP forgiveness increased. Middlefield originated $212.6 million of loans under the PPP and helped customers receive $122.4 million of forgiveness payments under the terms of the program. The balance of PPP loans outstanding at June 30, 2021, was $90.2 million.

Total deposits at June 30, 2021, were approximately $1.20 billion, compared to $1.16 billion at June 30, 2020. The 3.2% increase in deposits was primarily due to increases in interest-bearing, money market, savings, and non-interest-bearing accounts, partially offset by decreased time-based accounts. At June 30, 2021, Middlefield had no short-term borrowings compared to $20.4 million of short-term borrowings at June 30, 2020 as the Company paid back Federal Home Loan Bank advances. The investment portfolio, which is entirely classified as available for sale, was $150.9 million June 30, 2021, compared with $112.5 million at June 30, 2020.

Donald L. Stacy, Chief Financial Officer stated, “Our balance sheet remains strong as we benefit from record earnings, favorable asset quality, and a meaningfully higher allowance. The allowance for loan losses to total loans now stands at 1.34%, compared to 1.28% at March 31, 2021, and 0.92% at June 30, 2020. In addition, at June 30, 2021, we only had eight loans in deferral status primarily within the hospitality industry representing a balance of $17.7 million, compared to a balance of $214.8 million at June 30, 2020, a decline of approximately 92%.”

“We also ended the quarter with robust capital levels and liquidity, including nearly $92.5 million in cash and cash equivalents and $150.9 million in our investment portfolio. We are focused on maximizing the yield on our investment portfolio, while prudently managing risk. As a result, our investment portfolio includes $32 million of subordinated debt, at an average yield of approximately 4.8%, in community banks across the country with similar metrics. The remainder of our investment portfolio is primarily held in tax free municipal bonds. I believe our record year-to-date financial results demonstrate strong execution across many aspects of the Bank and our ability to focus on managing items under our control,” concluded Mr. Stacy.

Stockholders’ Equity and Dividends
At June 30, 2021, shareholders’ equity increased 3.8% to $146.0 million compared to $140.7 million at June 30, 2020. On a per share basis, shareholders’ equity at June 30, 2021, was $23.50 compared to $22.09 at the same period last year.

Tangible stockholders’ equity(1) increased 4.6% to $129.4 million for the 2021 second quarter, compared to $123.7 million at June 30, 2020. On a per-share basis, tangible stockholders’ equity(1) was $20.82 at June 30, 2021, compared to $19.43 at June 30, 2020.

Through the first six months of 2021, the Company declared cash dividends of $0.32 per share, compared to $0.30 per share for the same period last year.

At June 30, 2021, the Company had an equity to assets leverage ratio of 10.74%, compared to 10.47% at June 30, 2020.

Asset Quality
The provision for loan losses for the 2021 second quarter was $200,000 versus $1.0 million for the same period last year. The year-over-year decline in the provision for loan losses was partially due to strong asset quality and last year’s prudent build in the Company’s allowance for loan losses associated with the potential economic impacts caused by the COVID-19 pandemic. The provision for loan losses for the 2021 first half was $900,000 versus $3.7 million for the same period last year.

Net charge-offs were $122,000, or 0.05% of average loans, annualized, during the 2021 second quarter, compared to net charge-offs of $34,000, or 0.01% of average loans, annualized, at June 30, 2020. Year-to-date net charge-offs were $159,000, or 0.03% of average loans, annualized, compared to net charge-offs of $298,000, or 0.06% of average loans, annualized for the six-months ended June 30, 2020.

Nonperforming assets at June 30, 2021, were $14.9 million, compared to $10.5 million at June 30, 2020. The $4.4 million increase in nonperforming assets was affected by one large legacy credit in the Central Ohio market, which was charged-off during the 2020 third quarter. Nonperforming loans at June 30, 2021 were $7.8 million a 20.8% decline from the same period last year, and a 13.4% decline from the 2021 first quarter. The allowance for loan losses at June 30, 2021, stood at $14.2 million, or 1.34% of total loans, compared to $10.2 million, or 0.92% of total loans at June 30, 2020.

About Middlefield Banc Corp.
Middlefield Banc Corp., headquartered in Middlefield, Ohio, is the bank holding company of The Middlefield Banking Company with total assets of $1.36 billion at June 30, 2021. The bank operates 16 full-service banking centers and an LPL Financial® brokerage office serving Beachwood, Chardon, Cortland, Dublin, Garrettsville, Mantua, Middlefield, Newbury, Orwell, Plain City, Powell, Solon, Sunbury, Twinsburg, and Westerville. The Bank also operates a Loan Production Office in Mentor, Ohio.

Additional information is available at www.middlefieldbank.bank

(1) This press release includes disclosure of Middlefield Banc Corp.’s tangible book value per share, return on average tangible equity, and pre-tax, pre-provision for loan losses income, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Middlefield Banc Corp. believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Middlefield Banc Corp.’s marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures are included in the tables following Consolidated Financial Highlights below.

This press release of Middlefield Banc Corp. and the reports Middlefield Banc Corp. files with the Securities and Exchange Commission often contain “forward-looking statements” relating to present or future trends or factors affecting the banking industry and, specifically, the financial operations, markets, and products of Middlefield Banc Corp. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Middlefield Banc Corp.’s future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) a significant increase in competitive pressures among financial institutions; (2) changes in the interest rate environment that may reduce interest margins; (3) changes in prepayment speeds, charge-offs and loan loss provisions; (4) less favorable than expected general economic conditions; (5) legislative or regulatory changes that may adversely affect businesses in which Middlefield Banc Corp. is engaged; (6) technological issues which may adversely affect Middlefield Banc Corp.’s financial operations or customers; (7) the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions; (8) changes in the securities markets; or (9) risk factors mentioned in the reports and registration statements Middlefield Banc Corp. files with the Securities and Exchange Commission. Middlefield Banc Corp. undertakes no obligation to release revisions to these forward-looking statements or to reflect events or circumstances after the date of this press release.

Company Contact:

Investor and Media Contact:

Thomas G. Caldwell
President/Chief Executive Officer
Middlefield Banc Corp.
(440) 632-1666 Ext. 3200
tcaldwell@middlefieldbank.com

Andrew M. Berger
Managing Director
SM Berger & Company, Inc.
(216) 464-6400
andrew@smberger.com


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)

2021

2021

2020

2020

2020

ASSETS

Cash and due from banks

$

82,435

$

93,037

$

92,874

$

46,097

$

55,766

Federal funds sold

10,034

7,436

19,543

6,884

2,520

Cash and cash equivalents

92,469

100,473

112,417

52,981

58,286

Equity securities, at fair value

730

690

609

553

581

Investment securities available for sale, at fair value

150,850

123,218

114,360

112,968

112,529

Loans held for sale

790

1,260

878

10,457

4,151

Loans:

Commercial real estate:

Owner occupied

109,777

104,379

103,121

107,342

110,134

Non-owner occupied

304,324

304,623

309,424

310,512

300,577

Multifamily

34,926

39,015

39,562

39,622

37,604

Residential real estate

228,102

228,052

233,995

222,237

227,427

Commercial and industrial

200,558

242,651

232,044

258,313

240,096

Home equity lines of credit

107,685

111,474

112,543

115,223

117,196

Construction and other

62,229

64,960

63,573

60,613

66,015

Consumer installment

8,694

9,046

9,823

10,534

11,210

Total loans

1,056,295

1,104,200

1,104,085

1,124,396

1,110,259

Less allowance for loan and lease losses

14,200

14,122

13,459

11,359

10,210

Net loans

1,042,095

1,090,078

1,090,626

1,113,037

1,100,049

Premises and equipment, net

17,680

18,002

18,333

18,633

18,962

Goodwill

15,071

15,071

15,071

15,071

15,071

Core deposit intangibles

1,564

1,644

1,724

1,807

1,890

Bank-owned life insurance

16,846

16,740

16,938

16,832

16,723

Other real estate owned

7,090

7,372

7,387

7,391

687

Accrued interest receivable and other assets

15,033

13,545

13,636

15,079

14,391

TOTAL ASSETS

$

1,360,218

$

1,388,093

$

1,391,979

$

1,364,809

$

1,343,320

June 30,

March 31,

December 31,

September 30,

June 30,

2021

2021

2020

2020

2020

LIABILITIES

Deposits:

Noninterest-bearing demand

$

326,665

$

317,224

$

291,347

$

268,838

$

270,738

Interest-bearing demand

207,725

215,684

195,722

179,080

136,722

Money market

183,453

187,204

198,493

184,936

168,842

Savings

252,171

259,973

243,888

231,696

218,545

Time

225,271

245,342

295,750

329,413

363,420

Total deposits

1,195,285

1,225,427

1,225,200

1,193,963

1,158,267

Short-term borrowings

-

-

-

-

20,417

Other borrowings

13,031

13,095

17,038

17,100

17,162

Accrued interest payable and other liabilities

5,858

4,901

5,931

11,690

6,779

TOTAL LIABILITIES

1,214,174

1,243,423

1,248,169

1,222,753

1,202,625

STOCKHOLDERS' EQUITY

Common stock, no par value; 10,000,000 shares authorized, 7,325,918

shares issued, 6,215,511 shares outstanding as of June 30, 2021

87,131

87,073

86,886

86,871

86,722

Retained earnings

76,150

72,729

69,578

68,046

67,150

Accumulated other comprehensive income

3,893

2,917

4,284

4,077

3,761

Treasury stock, at cost; 1,110,407 shares as of June 30, 2021

(21,130

)

(18,049

)

(16,938

)

(16,938

)

(16,938

)

TOTAL STOCKHOLDERS' EQUITY

146,044

144,670

143,810

142,056

140,695

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,360,218

$

1,388,093

$

1,391,979

$

1,364,809

$

1,343,320



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

2021

2021

2020

2020

2020

2021

2020

INTEREST AND DIVIDEND INCOME

Interest and fees on loans

$

11,885

$

12,167

$

12,041

$

12,603

$

12,281

$

24,052

$

24,359

Interest-earning deposits in other institutions

12

18

9

8

7

30

101

Federal funds sold

1

-

1

-

-

1

21

Investment securities:

Taxable interest

410

370

297

249

206

780

363

Tax-exempt interest

602

558

591

618

634

1,160

1,263

Dividends on stock

26

29

28

29

27

55

57

Total interest and dividend income

12,936

13,142

12,967

13,507

13,155

26,078

26,164

INTEREST EXPENSE

Deposits

1,010

1,205

1,655

2,106

2,336

2,215

5,201

Short-term borrowings

-

-

(2

)

14

32

-

67

Other borrowings

39

39

43

28

62

78

138

Total interest expense

1,049

1,244

1,696

2,148

2,430

2,293

5,406

NET INTEREST INCOME

11,887

11,898

11,271

11,359

10,725

23,785

20,758

Provision for loan losses

200

700

2,100

4,000

1,000

900

3,740

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES

11,687

11,198

9,171

7,359

9,725

22,885

17,018

NONINTEREST INCOME

Service charges on deposit accounts

856

787

729

691

566

1,643

1,119

Gain (loss) on equity securities

40

81

56

(28

)

31

121

(129

)

Earnings on bank-owned life insurance

106

226

106

109

105

332

212

Gains on sale of loans

221

592

332

660

381

813

495

Other income

409

532

387

379

412

941

872

Total noninterest income

1,632

2,218

1,610

1,811

1,495

3,850

2,569

NONINTEREST EXPENSE

Salaries and employee benefits

4,321

4,254

4,458

3,657

4,136

8,575

7,720

Occupancy expense

549

600

628

497

483

1,149

1,033

Equipment expense

313

357

365

363

307

670

580

Data processing costs

698

786

617

683

684

1,484

1,350

Ohio state franchise tax

286

286

251

282

281

572

549

Federal deposit insurance expense

150

144

103

123

74

294

197

Professional fees

323

419

352

289

369

742

718

Net loss (gain) on other real estate owned

22

46

(172

)

(184

)

(33

)

68

(32

)

Advertising expense

221

221

55

217

217

442

426

Software amortization expense

74

80

66

70

74

154

215

Core deposit intangible amortization

80

80

83

83

83

160

166

Other expense

889

1,080

1,019

942

1,014

1,969

2,019

Total noninterest expense

7,926

8,353

7,825

7,022

7,689

16,279

14,941

Income before income taxes

5,393

5,063

2,956

2,148

3,531

10,456

4,646

Income taxes

968

896

467

295

565

1,864

639

NET INCOME

$

4,425

$

4,167

$

2,489

$

1,853

$

2,966

$

8,592

$

4,007

PTPP (1)

$

5,593

$

5,763

$

5,056

$

6,148

$

4,531

$

11,356

$

8,386

(1) The pre-tax pre-provision (PTPP) is the income before income taxes before provision for loan losses considerations, for reconciliation of non-GAAP measures.



MIDDLEFIELD BANC CORP.

Consolidated Selected Financial Highlights

(Dollar amounts in thousands, except per share and share amounts, unaudited)

For the Three Months Ended

For the Six Months Ended

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

2021

2021

2020

2020

2020

2021

2020

Per common share data

Net income per common share - basic

$

0.70

$

0.65

$

0.39

$

0.29

$

0.47

$

1.36

$

0.63

Net income per common share - diluted

$

0.70

$

0.65

$

0.39

$

0.29

$

0.46

$

1.35

$

0.62

Dividends declared per share

$

0.16

$

0.16

$

0.15

$

0.15

$

0.15

$

0.32

$

0.30

Book value per share (period end)

$

23.50

$

22.80

$

22.54

$

22.27

$

22.09

$

23.50

$

22.09

Tangible book value per share (period end) (2) (3)

$

20.82

$

20.17

$

19.91

$

19.63

$

19.43

$

20.82

$

19.43

Dividends declared

$

1,004

$

1,016

$

957

$

957

$

956

$

2,020

$

1,920

Dividend yield

2.72

%

3.10

%

2.65

%

3.09

%

2.91

%

2.73

%

2.91

%

Dividend payout ratio

22.69

%

24.38

%

38.45

%

51.65

%

32.23

%

23.51

%

47.92

%

Average shares outstanding - basic

6,297,071

6,364,132

6,378,706

6,376,291

6,369,467

6,331,356

6,393,288

Average shares outstanding - diluted

6,312,230

6,378,493

6,397,681

6,385,765

6,388,118

6,348,345

6,412,585

Period ending shares outstanding

6,215,511

6,344,657

6,379,323

6,378,110

6,369,467

6,215,511

6,369,467

Selected ratios

Return on average assets

1.30

%

1.22

%

0.72

%

0.54

%

0.90

%

1.26

%

0.64

%

Return on average equity

12.10

%

11.65

%

6.76

%

5.11

%

8.57

%

11.88

%

5.79

%

Return on average tangible common equity (2) (4)

13.65

%

13.17

%

7.64

%

5.79

%

9.76

%

13.41

%

6.59

%

Efficiency (1)

57.28

%

57.91

%

59.29

%

51.96

%

61.29

%

57.60

%

62.33

%

Equity to assets at period end

10.74

%

10.42

%

10.33

%

10.41

%

10.47

%

10.74

%

10.47

%

Noninterest expense to average assets

0.58

%

0.60

%

0.57

%

0.52

%

0.58

%

1.18

%

1.19

%

(1) The efficiency ratio is calculated by dividing noninterest expense less amortization of intangibles by the sum of net interest income on a fully taxable equivalent basis plus noninterest income

(2) See reconciliation of non-GAAP measures below

(3) Calculated by dividing tangible common equity by shares outstanding

(4) Calculated by dividing annualized net income for each period by average tangible common equity


MIDDLEFIELD BANC CORP.

Consolidated Selected Financial Highlights

(Unaudited)

For the Three Months Ended

For the Six Months Ended

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

Yields

2021

2021

2020

2020

2020

2021

2020

Interest-earning assets:

Loans receivable (2)

4.43

%

4.48

%

4.28

%

4.48

%

4.53

%

4.45

%

4.73

%

Investment securities (2)

3.47

%

3.75

%

3.65

%

3.66

%

3.76

%

3.60

%

3.69

%

Interest-earning deposits with other banks

0.18

%

0.20

%

0.21

%

0.27

%

0.23

%

0.19

%

0.72

%

Total interest-earning assets

4.05

%

4.11

%

4.00

%

4.23

%

4.27

%

4.08

%

4.47

%

Deposits:

Interest-bearing demand deposits

0.12

%

0.16

%

0.21

%

0.32

%

0.35

%

0.14

%

0.38

%

Money market deposits

0.46

%

0.47

%

0.53

%

0.70

%

0.93

%

0.47

%

1.17

%

Savings deposits

0.06

%

0.07

%

0.11

%

0.20

%

0.21

%

0.07

%

0.35

%

Certificates of deposit

1.19

%

1.28

%

1.56

%

1.77

%

2.00

%

1.24

%

2.06

%

Total interest-bearing deposits

0.46

%

0.53

%

0.70

%

0.93

%

1.11

%

0.50

%

1.25

%

Non-Deposit Funding:

Borrowings

%

1.10

%

0.95

%

0.45

%

0.53

%

1.14

%

0.83

%

Total interest-bearing liabilities

0.47

%

0.54

%

0.71

%

0.91

%

1.07

%

0.50

%

1.23

%

Cost of deposits

0.34

%

0.40

%

0.54

%

0.72

%

0.85

%

0.37

%

0.98

%

Cost of funds

0.35

%

0.41

%

0.55

%

0.71

%

0.83

%

0.38

%

0.98

%

Net interest margin (1)

3.72

%

3.73

%

3.49

%

3.57

%

3.49

%

3.72

%

3.56

%

(1) Net interest margin represents net interest income as a percentage of average interest-earning assets.

(2) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were determined using an effective tax rate of 21%.

For the Three Months Ended

June 30,

March 31,

December 31,

September 30,

June 30,

Asset quality data

2021

2021

2020

2020

2020

(Dollar amounts in thousands, unaudited)

Nonperforming loans (1)

$

7,760

$

8,958

$

7,858

$

6,690

$

9,803

Other real estate owned

7,090

7,372

7,387

7,391

687

Nonperforming assets

$

14,850

$

16,330

$

15,245

$

14,081

$

10,490

Allowance for loan losses

$

14,200

$

14,122

$

13,459

$

11,359

$

10,210

Allowance for loan losses/total loans

1.34

%

1.28

%

1.22

%

1.01

%

0.92

%

Net charge-offs:

Quarter-to-date

$

122

$

37

$

-

$

2,851

$

34

Year-to-date

159

37

3,149

3,149

298

Net charge-offs to average loans, annualized:

Quarter-to-date

0.05

%

0.01

%

0.00

%

1.01

%

0.01

%

Year-to-date

0.03

%

0.01

%

0.29

%

0.39

%

0.06

%

Nonperforming loans/total loans

0.73

%

0.81

%

0.71

%

0.59

%

0.88

%

Allowance for loan losses/nonperforming loans

182.99

%

157.65

%

171.28

%

169.79

%

104.15

%

Nonperforming assets/total assets

1.09

%

1.18

%

1.10

%

1.03

%

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

For the Six Months Ended

(Dollar amounts in thousands, unaudited)

June 30,

March 31,

December 31,

September 30,

June 30,

June 30,

June 30,

2021

2021

2020

2020

2020

2021

2020

Stockholders' Equity

$

146,044

$

144,670

$

143,810

$

142,056

$

140,695

$

146,044

$

140,695

Less Goodwill and other intangibles

16,635

16,715

16,795

16,878

16,961

16,635

16,961

Tangible Common Equity

$

129,409

$

127,955

$

127,015

$

125,178

$

123,734

$

129,409

$

123,734

Shares outstanding

6,215,511

6,344,657

6,379,323

6,378,110

6,369,467

6,215,511

6,369,467

Tangible book value per share

$

20.82

$

20.17

$

19.91

$

19.63

$

19.43

$

20.82

$

19.43

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,

2021

2021

2020

2020

2020

2021

2020

Average Stockholders' Equity

$

146,719

$

145,065

$

146,374

$

144,167

$

139,212

$

145,892

$

139,287

Less Average Goodwill and other intangibles

16,674

16,754

16,836

16,919

17,002

16,714

17,043

Average Tangible Common Equity

$

130,045

$

128,311

$

129,538

$

127,248

$

122,210

$

129,178

$

122,244

Net income

$

4,425

$

4,167

$

2,489

$

1,853

$

2,966

$

8,592

$

4,007

Return on average tangible common equity (annualized)

13.65

%

13.17

%

7.64

%

5.79

%

9.76

%

13.41

%

6.59

%

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,

2021

2021

2020

2020

2020

2021

2020

Net income

$

4,425

$

4,167

$

2,489

$

1,853

$

2,966

$

8,592

$

4,007

Add Income Taxes

968

896

467

295

565

1,864

639

Add Provision for loan losses

200

700

2,100

4,000

1,000

900

3,740

PTPP

$

5,593

$

5,763

$

5,056

$

6,148

$

4,531

$

11,356

$

8,386



MIDDLEFIELD BANC CORP.

Average Balance Sheets

(Dollar amounts in thousands, unaudited)

For the Three Months Ended

June 30,

June 30,

2021

2020

Average

Average

Average

Average

Balance

Interest

Yield/Cost

Balance

Interest

Yield/Cost

Interest-earning assets:

Loans receivable (3)

$

1,078,866

$

11,885

4.43

%

$

1,092,095

$

12,281

4.53

%

Investment securities (3)

135,338

1,012

3.47

%

107,765

840

3.76

%

Interest-earning deposits with other banks (4)

85,245

39

0.18

%

58,541

34

0.23

%

Total interest-earning assets

1,299,449

12,936

4.05

%

1,258,401

13,155

4.27

%

Noninterest-earning assets

70,692

62,976

Total assets

$

1,370,141

$

1,321,377

Interest-bearing liabilities:

Interest-bearing demand deposits

$

207,080

$

64

0.12

%

$

129,917

$

112

0.35

%

Money market deposits

185,728

212

0.46

%

164,434

381

0.93

%

Savings deposits

253,612

38

0.06

%

198,967

104

0.21

%

Certificates of deposit

233,930

696

1.19

%

350,298

1,739

2.00

%

Short-term borrowings

227

-

0.00

%

55,973

32

0.23

%

Other borrowings

13,062

39

1.20

%

15,615

62

1.60

%

Total interest-bearing liabilities

893,639

1,049

0.47

%

915,204

2,430

1.07

%

Noninterest-bearing liabilities:

Noninterest-bearing demand deposits

323,590

262,575

Other liabilities

6,193

4,311

Stockholders' equity

146,719

139,287

Total liabilities and stockholders' equity

$

1,370,141

$

1,321,377

Net interest income

$

11,887

$

10,725

Interest rate spread (1)

3.58

%

3.20

%

Net interest margin (2)

3.72

%

3.49

%

Ratio of average interest-earning assets to

average interest-bearing liabilities

145.41

%

137.50

%

(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 $179 and $190 for the three months ended June 30, 2021 and 2020, respectively

(4) Includes dividends received on restricted stock.

For the Three Months Ended

June 30,

March 31,

2021

2021

Average

Average

Average

Average

Balance

Interest

Yield/Cost

Balance

Interest

Yield/Cost

Interest-earning assets:

Loans receivable (3)

$

1,078,866

$

11,885

4.43

%

$

1,103,373

$

12,167

4.48

%

Investment securities (3)

135,338

1,012

3.47

%

116,510

928

3.75

%

Interest-earning deposits with other banks (4)

85,245

39

0.18

%

93,709

47

0.20

%

Total interest-earning assets

1,299,449

12,936

4.05

%

1,313,592

13,142

4.11

%

Noninterest-earning assets

70,692

71,007

Total assets

$

1,370,141

$

1,384,599

Interest-bearing liabilities:

Interest-bearing demand deposits

$

207,080

$

64

0.12

%

$

203,047

$

78

0.16

%

Money market deposits

185,728

212

0.46

%

195,275

228

0.47

%

Savings deposits

253,612

38

0.06

%

256,151

47

0.07

%

Certificates of deposit

233,930

696

1.19

%

269,493

852

1.28

%

Short-term borrowings

227

-

0.00

%

111

-

0.00

%

Other borrowings

13,062

39

1.20

%

14,258

39

1.11

%

Total interest-bearing liabilities

893,639

1,049

0.47

%

938,335

1,244

0.54

%

Noninterest-bearing liabilities:

Noninterest-bearing demand deposits

323,590

295,199

Other liabilities

6,193

6,000

Stockholders' equity

146,719

145,065

Total liabilities and stockholders' equity

$

1,370,141

$

1,384,599

Net interest income

$

11,887

$

11,898

Interest rate spread (1)

3.58

%

3.57

%

Net interest margin (2)

3.72

%

3.73

%

Ratio of average interest-earning assets to

average interest-bearing liabilities

145.41

%

139.99

%

(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 $179 and $169 for the three months ended June 30, 2021, and March 31, 2021, respectively.

(4) Includes dividends received on restricted stock.

For the Six Months Ended

June 30,

June 30,

2021

2020

Average

Average

Average

Average

Balance

Interest

Yield/Cost

Balance

Interest

Yield/Cost

Interest-earning assets:

Loans receivable (3)

$

1,091,119

$

24,052

4.45

%

$

1,038,064

$

24,359

4.73

%

Investment securities (3)

125,924

1,940

3.60

%

106,829

1,626

3.69

%

Interest-earning deposits with other banks (4)

89,477

86

0.19

%

50,129

179

0.72

%

Total interest-earning assets

1,306,520

26,078

4.08

%

1,195,022

26,164

4.47

%

Noninterest-earning assets

70,850

63,990

Total assets

$

1,377,370

$

1,259,012

Interest-bearing liabilities:

Interest-bearing demand deposits

$

205,063

$

141

0.14

%

$

121,804

$

229

0.38

%

Money market deposits

190,502

441

0.47

%

161,221

934

1.17

%

Savings deposits

254,882

85

0.07

%

191,052

331

0.35

%

Certificates of deposit

251,711

1,548

1.24

%

362,082

3,707

2.06

%

Short-term borrowings

169

-

0.00

%

35,390

67

0.38

%

Other borrowings

13,660

78

1.15

%

14,159

138

1.96

%

Total interest-bearing liabilities

915,987

2,293

0.50

%

885,708

5,406

1.23

%

Noninterest-bearing liabilities:

Noninterest-bearing demand deposits

309,395

228,993

Other liabilities

6,096

5,024

Stockholders' equity

145,892

139,287

Total liabilities and stockholders' equity

$

1,377,370

$

1,259,012

Net interest income

$

23,785

$

20,758

Interest rate spread (1)

3.58

%

3.24

%

Net interest margin (2)

3.72

%

3.56

%

Ratio of average interest-earning assets to

average interest-bearing liabilities

142.64

%

134.92

%

(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 $347 and $379 for the six months ended June 30, 2021 and 2020, respectively.

(4) Includes dividends received on restricted stock.


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