Middlefield Banc Corp. Reports 2024 Nine-Month Financial Results

来源: Nasdaq GlobeNewswire / 17 10月 2024 16:15:09 America/New_York

MIDDLEFIELD, Ohio, Oct. 17, 2024 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the nine months ended September 30, 2024.

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

Net income was $10.7 million, compared to $13.8 million
Pre-tax, pre-provision net income⁽¹⁾ was $14.7 million, compared to $19.0 million
Earnings were $1.32 per diluted share, compared to $1.70 per diluted share
Net interest income after the provision for credit losses was $42.9 million, compared to $47.4 million
Noninterest income increased 4.1% to $5.3 million, compared to $5.1 million
Total loans increased 3.9% to a record $1.50 billion, compared to $1.45 billion
Total deposits increased 3.8% to a record $1.51 billion, compared to $1.46 billion
Return on average assets annualized was 0.77%, compared to 1.06%
Return on average equity annualized was 6.90%, compared to 9.43%
Return on average tangible common equity⁽¹⁾ was 8.68%, compared to 11.92%
Nonperforming assets to total assets increased to 1.62% from 0.75%
Allowance for credit losses was 1.50% of total loans, compared to 1.45%
Equity to assets strengthened to 11.34%, compared to 10.80%
Book value increased 9.1% to $26.11 from $23.94 per share
Tangible book value⁽¹⁾ increased 12.1% to $20.87 from $18.62 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, “We ended the third quarter of 2024 with record total assets and deposits, as well as a record book value per share. These results reflect our team’s dedication and commitment to serve customers throughout our Central, Western and Northeast Ohio markets. We ended the quarter with higher charge-offs and non-performing loans, associated with one customer. As a result, the provision for credit losses increased during the third quarter and reduced after tax earnings by $0.12 per diluted share. Despite these one-time impacts, we produced strong levels of core profitability, including the highest level of pre-tax pre-provision income in the past four quarters.”

“I am pleased with the progress we are making maintaining appropriate funding costs and controlling noninterest expense, as our quarterly cost of funds declined sequentially for the first time in ten quarters, and noninterest expense was at the lowest level in six quarters. We expect the economic environment will remain fluid over the near-term, and as we look to 2025, we will continue to focus on supporting our communities, strategically allocating capital, maintaining disciplined underwriting standards, and prudently managing expenses,” concluded Mr. Zimmerly.

Income Statement
Net interest income for the nine months ended September 30, 2024, decreased $4.7 million to $45.1 million, compared to $49.8 million for the same period last year. The net interest margin for the nine months ended September 30, 2024, was 3.50%, compared to 4.09% last year. Net interest income for the 2024 third quarter decreased $894,000 to $15.1 million, compared to $16.0 million for the 2023 third quarter. The net interest margin for the 2024 third quarter was 3.46%, compared to 3.82% for the same period of 2023.

For the nine months ended September 30, 2024, noninterest income increased $211,000 to $5.3 million, compared to $5.1 million for the same period in 2023. Noninterest income for the 2024 third quarter was $1.7 million, compared to $1.8 million for the same period the previous year.

Noninterest expense for the nine months ended September 30, 2024, was $35.7 million, compared to $36.0 million for the same period in 2023. For the 2024 third quarter, noninterest expense was $11.9 million, compared to $12.1 million for the 2023 third quarter.

Net income for the nine months ended September 30, 2024, was $10.7 million, or $1.32 per diluted share, compared to $13.8 million, or $1.70 per diluted share, for the same period last year. Net income for the 2024 third quarter was $2.3 million, or $0.29 per diluted share, compared to $3.8 million, or $0.47 per diluted share, for the same period last year.

For the nine months ended September 30, 2024, pre-tax, pre-provision net income was $14.7 million, compared to $19.0 million last year. For the 2024 third quarter, pre-tax, pre-provision net income was $4.9 million, compared to $5.7 million for the same period of 2023. (See non-GAAP reconciliation under the section “GAAP to Non-GAAP Reconciliations”.)

Balance Sheet
Total assets at September 30, 2024, increased 3.6% to $1.86 billion, compared to $1.79 billion at September 30, 2023. Total loans at September 30, 2024, were $1.50 billion, compared to $1.45 billion at September 30, 2023. The 3.9% year-over-year increase in total loans was primarily due to higher non-owner occupied and residential real estate loans.

Total liabilities at September 30, 2024, increased 3.0% to $1.65 billion, compared to $1.60 billion at September 30, 2023. Total deposits at September 30, 2024, were $1.51 billion, compared to $1.46 billion at September 30, 2023. The 3.8% 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 25.8% of total deposits at September 30, 2024, compared to 29.1% at September 30, 2023. At September 30, 2024, the Company had brokered deposits of $86.5 million, compared to $53.5 million at September 30, 2023.

The investment securities available-for-sale portfolio was $169.9 million at September 30, 2024, compared with $159.4 million at September 30, 2023.

Mr. Ranttila, Chief Financial Officer, stated, “We continue to look at opportunities to proactively strengthen our balance sheet and improve our cost of funds. In addition, since December 31, 2023, deposits have increased 6.0%, while our Federal Home Loan Bank (“FHLB”) advances have decreased by 35.0%. This is the lowest level of FHLB advances in over a year. In addition, during the quarter, we received approval to use the Federal Reserve Board’s discount window, adding a new and efficient liquidity provider. The combination of high levels of potentially liquid assets, cash flows from operations, and additional borrowing capacity continues to provide 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 September 30, 2024:

	Balance		Percent of			Percent of
CRE Category	(in thousands)		CRE Portfolio			Loan Portfolio
Multi-Family	$	94,798		13.8	%		6.3	%
Office Space		75,149		10.9	%		5.0	%
Shopping Plazas		69,762		10.1	%		4.6	%
Self-Storage		56,041		8.1	%		3.7	%
Hospitality		39,840		5.8	%		2.6	%
Senior Living		23,069		3.3	%		1.5	%
Other		330,611		48.0	%		22.0	%
Total CRE	$	689,270		100.0	%		45.7	%

Stockholders' Equity and Dividends
At September 30, 2024, stockholders' equity was $210.7 million, compared to $193.7 million at September 30, 2023. The 8.8% year-over-year increase in stockholders' equity was primarily from 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 September 30, 2024, was $26.11, compared to $23.94 at September 30, 2023.

At September 30, 2024, tangible stockholders' equity⁽¹⁾ was $168.5 million, compared to $150.6 million at September 30, 2023. On a per-share basis, tangible stockholders' equity⁽¹⁾ was $20.87 at September 30, 2024, compared to $18.62 at September 30, 2023. ⁽¹⁾See non-GAAP reconciliation under the section “GAAP to Non-GAAP Reconciliations”.

For the nine months ended September 30, 2024, the Company declared cash dividends of $0.60 per share, totaling $4.8 million.

For the nine months ended September 30, 2024, 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 third quarter of 2024.

At September 30, 2024, the Company's equity-to-assets ratio was 11.34%, compared to 10.80% at September 30, 2023.

Asset Quality

For the nine months ended September 30, 2024, the Company recorded a provision for credit losses of $2.2 million, versus a provision for credit losses of $2.4 million for the same period last year. For the 2024 third quarter, the Company recorded a provision for credit losses of $2.2 million, compared to a provision for credit losses of $1.1 million for the same period of 2023.

Net charge-offs were $1.3 million, or 0.11% of average loans, annualized, for the nine months ended September 30, 2024, compared to net charge-offs of $87,000, or 0.01% of average loans, annualized, for the same period last year. Net charge-offs were $1.4 million, or 0.36% of average loans, annualized, for the 2024 third quarter, compared to net recoveries of $16,000, or 0.00% of average loans, annualized, for the same period of 2023. The higher net charge-offs were due to the partial charge-off of one loan during the 2024 third quarter.

Nonperforming loans at September 30, 2024, were $30.1 million, compared to $7.7 million at September 30, 2023. Nonperforming assets at September 30, 2024, were $30.1 million, compared to $13.5 million at September 30, 2023. The increase in nonperforming assets is primarily the result of a $13.5 million loan moved to nonaccrual in the 2024 third quarter, subsequent to the partial charge-off noted in the previous paragraph. The allowance for credit losses at September 30, 2024, stood at $22.5 million, or 1.50% of total loans, compared to $21.0 million, or 1.45% of total loans at September 30, 2023. The increase in the allowance for credit losses was mainly from changes in projected loss drivers, prepayment assumptions, curtailment expectations over the reasonable and supportable forecast period, and geographic footprint of unemployment data, as well as an overall increase in total loans.

Michael Ranttila stated, “Nonperforming assets during the third quarter were impacted by a $13.5 million loan. Combined with the two previously disclosed relationships that moved to nonaccrual in the second quarter of 2024, these three customers accounted for $20.2 million of nonperforming assets at September 30, 2024. 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 1.50% at September 30, 2024, which was up slightly from both the same period a year ago, and the quarter ended June 30, 2024.”

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 $1.86 billion at September 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.

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

	September 30,		June 30,		March 31,		December 31,		September 30,
Balance Sheets (period end)	2024		2024		2024		2023		2023
ASSETS
Cash and due from banks	$	61,851	$	50,496	$	44,816	$	56,397	$	56,228
Federal funds sold		12,022		1,762		1,438		4,439		9,274
Cash and cash equivalents		73,873		52,258		46,254		60,836		65,502
Investment securities available for sale, at fair value		169,895		166,424		167,890		170,779		159,414
Other investments		895		881		907		955		958
Loans held for sale		249		-		-		-		632
Loans:
Commercial real estate:
Owner occupied		187,313		182,809		178,543		183,545		185,593
Non-owner occupied		407,159		385,648		398,845		401,580		382,676
Multifamily		94,798		86,951		81,691		82,506		82,578
Residential real estate		345,748		337,121		331,480		328,854		321,331
Commercial and industrial		213,172		234,702		227,433		221,508		214,334
Home equity lines of credit		137,761		131,047		129,287		127,818		127,494
Construction and other		111,550		132,530		135,716		125,105		127,106
Consumer installment		7,030		6,896		7,131		7,214		7,481
Total loans		1,504,531		1,497,704		1,490,126		1,478,130		1,448,593
Less allowance for credit losses		22,526		21,795		21,069		21,693		20,986
Net loans		1,482,005		1,475,909		1,469,057		1,456,437		1,427,607
Premises and equipment, net		20,528		20,744		21,035		21,339		21,708
Goodwill		36,356		36,356		36,356		36,356		36,197
Core deposit intangibles		5,869		6,126		6,384		6,642		6,906
Bank-owned life insurance		35,049		34,802		34,575		34,349		34,153
Other real estate owned		-		-		-		-		5,792
Accrued interest receivable and other assets		32,916		34,686		34,210		35,190		34,551
TOTAL ASSETS	$	1,857,635	$	1,828,186	$	1,816,668	$	1,822,883	$	1,793,420

	September 30,			June 30,			March 31,			December 31,			September 30,
	2024			2024			2024			2023			2023
LIABILITIES
Deposits:
Noninterest-bearing demand	$	390,933		$	387,024		$	390,185		$	401,384		$	424,055
Interest-bearing demand		218,002			206,542			209,015			205,582			243,973
Money market		376,619			355,630			318,823			274,682			275,766
Savings		199,984			192,472			196,721			210,639			216,453
Time		327,231			327,876			332,165			334,315			296,732
Total deposits		1,512,769			1,469,544			1,446,909			1,426,602			1,456,979
Federal Home Loan Bank advances		106,000			125,000			137,000			163,000			118,000
Other borrowings		11,711			11,762			11,812			11,862			11,912
Accrued interest payable and other liabilities		16,450			15,092			15,372			15,738			12,780
TOTAL LIABILITIES		1,646,930			1,621,398			1,611,093			1,617,202			1,599,671
STOCKHOLDERS' EQUITY
Common stock, no par value; 25,000,000 shares authorized, 9,950,342
shares issued, 8,071,032 shares outstanding as of September 30, 2024		161,916			161,823			161,823			161,388			161,312
Additional paid-in capital		108			-			-			-			-
Retained earnings		106,067			105,342			102,791			100,237			98,717
Accumulated other comprehensive loss		(16,477	)		(19,468	)		(18,130	)		(16,090	)		(26,426	)
Treasury stock, at cost; 1,879,310 shares as of September 30, 2024		(40,909	)		(40,909	)		(40,909	)		(39,854	)		(39,854	)
TOTAL STOCKHOLDERS' EQUITY		210,705			206,788			205,575			205,681			193,749
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,857,635		$	1,828,186		$	1,816,668		$	1,822,883		$	1,793,420

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	2024		2024			2024			2023			2023		2024			2023
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	23,441	$	23,422		$	22,395		$	22,027		$	20,899	$	69,258		$	59,935
Interest-earning deposits in other institutions		348		386			437			370			300		1,171			920
Federal funds sold		143		122			152			94			266		417			678
Investment securities:
Taxable interest		528		505			467			479			477		1,500			1,415
Tax-exempt interest		962		966			972			976			980		2,900			2,938
Dividends on stock		191		198			189			144			148		578			326
Total interest and dividend income		25,613		25,599			24,612			24,090			23,070		75,824			66,212
INTEREST EXPENSE
Deposits		8,792		8,423			7,466			6,522			5,632		24,681			12,472
Short-term borrowings		1,575		1,920			1,993			2,013			1,258		5,488			3,373
Other borrowings		173		173			184			179			213		530			539
Total interest expense		10,540		10,516			9,643			8,714			7,103		30,699			16,384
NET INTEREST INCOME		15,073		15,083			14,969			15,376			15,967		45,125			49,828
Provision (Recovery of) for credit losses		2,234		87			(136	)		554			1,127		2,185			2,449
NET INTEREST INCOME AFTER PROVISION
(RECOVERY OF) FOR CREDIT LOSSES		12,839		14,996			15,105			14,822			14,840		42,940			47,379
NONINTEREST INCOME
Service charges on deposit accounts		959		971			909			997			954		2,839			2,880
Gain (loss) on equity securities		14		(27	)		(52	)		(4	)		48		(65	)		(157	)
(Loss) gain on other real estate owned		-		-			-			(172	)		-		-			2
Earnings on bank-owned life insurance		246		227			227			196			207		700			627
Gain on sale of loans		56		69			10			23			45		135			74
Revenue from investment services		206		269			204			193			190		679			550
Gross rental income		3		-			67			132			110		70			290
Other income		259		251			431			237			263		941			822
Total noninterest income		1,743		1,760			1,796			1,602			1,817		5,299			5,088
NONINTEREST EXPENSE
Salaries and employee benefits		6,201		6,111			6,333			6,646			5,994		18,645			17,865
Occupancy expense		627		601			552			512			699		1,780			2,054
Equipment expense		203		261			240			273			297		704			969
Data processing costs		1,248		1,168			1,249			1,348			1,209		3,665			3,415
Ohio state franchise tax		399		397			397			397			398		1,193			1,180
Federal deposit insurance expense		255		256			251			285			207		762			576
Professional fees		539		557			558			660			545		1,654			1,633
Advertising expense		283		508			419			162			414		1,210			1,315
Software amortization expense		74		21			22			22			24		117			73
Core deposit intangible amortization		257		258			258			264			265		773			794
Gross other real estate owned expenses		-		-			99			120			195		99			390
Merger-related costs		-		-			-			-			22		-			472
Other expense		1,785		1,764			1,587			1,483			1,849		5,136			5,228
Total noninterest expense		11,871		11,902			11,965			12,172			12,118		35,738			35,964
Income before income taxes		2,711		4,854			4,936			4,252			4,539		12,501			16,503
Income taxes		371		690			769			709			703		1,830			2,678
NET INCOME	$	2,340	$	4,164		$	4,167		$	3,543		$	3,836	$	10,671		$	13,825
PTPP ⁽¹⁾	$	4,945	$	4,941		$	4,800		$	4,806		$	5,666	$	14,686		$	18,952

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,
	2024			2024			2024			2023			2023			2024			2023
Per common share data
Net income per common share - basic	$	0.29		$	0.52		$	0.52		$	0.44		$	0.47		$	1.32		$	1.71
Net income per common share - diluted	$	0.29		$	0.52		$	0.51		$	0.44		$	0.47		$	1.32		$	1.70
Dividends declared per share	$	0.20		$	0.20		$	0.20		$	0.25		$	0.20		$	0.60		$	0.60
Book value per share (period end)	$	26.11		$	25.63		$	25.48		$	25.41		$	23.94		$	26.11		$	23.94
Tangible book value per share (period end) ^{(1) (2)}	$	20.87		$	20.37		$	20.18		$	20.10		$	18.62		$	20.87		$	18.62
Dividends declared	$	1,615		$	1,613		$	1,613		$	2,023		$	1,619		$	4,841		$	4,841
Dividend yield		2.76	%		3.34	%		3.37	%		3.06	%		3.12	%		2.78	%		3.16	%
Dividend payout ratio		69.02	%		38.74	%		38.71	%		57.10	%		42.21	%		45.37	%		35.02	%
Average shares outstanding - basic		8,071,032			8,067,144			8,091,203			8,093,478			8,092,494			8,076,440			8,106,517
Average shares outstanding - diluted		8,105,131			8,072,499			8,096,317			8,116,261			8,101,306			8,110,539			8,115,329
Period ending shares outstanding		8,071,032			8,067,144			8,067,144			8,095,252			8,092,576			8,071,032			8,092,576
Selected ratios
Return on average assets (Annualized)		0.50	%		0.91	%		0.92	%		0.78	%		0.86	%		0.77	%		1.06	%
Return on average equity (Annualized)		4.45	%		8.15	%		8.16	%		7.13	%		7.73	%		6.90	%		9.43	%
Return on average tangible common equity^{(1) (3)}		5.58	%		10.29	%		10.30	%		9.11	%		9.91	%		8.68	%		11.92	%
Efficiency⁽⁴⁾		67.93	%		67.97	%		68.68	%		68.99	%		65.65	%		68.19	%		63.10	%
Equity to assets at period end		11.34	%		11.31	%		11.32	%		11.28	%		10.80	%		11.34	%		10.80	%
Noninterest expense to average assets		0.66	%		0.64	%		0.66	%		0.68	%		0.68	%		1.94	%		2.06	%

⁽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 Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
Yields	2024			2024			2024			2023			2023			2024			2023
Interest-earning assets:
Loans receivable ⁽¹⁾		6.19	%		6.27	%		6.11	%		6.01	%		5.82	%		6.19	%		5.75	%
Investment securities ^{(1) (2)}		3.59	%		3.59	%		3.52	%		3.52	%		3.51	%		3.57	%		3.54	%
Interest-earning deposits with other banks		4.27	%		4.59	%		4.88	%		3.71	%		4.13	%		4.58	%		3.85	%
Total interest-earning assets		5.84	%		5.92	%		5.77	%		5.64	%		5.49	%		5.84	%		5.41	%
Deposits:
Interest-bearing demand deposits		2.16	%		1.93	%		1.86	%		1.67	%		1.51	%		1.99	%		1.20	%
Money market deposits		3.93	%		3.95	%		3.81	%		3.58	%		2.94	%		3.90	%		2.29	%
Savings deposits		0.71	%		0.64	%		0.58	%		0.59	%		0.58	%		0.64	%		0.80	%
Certificates of deposit		4.49	%		4.57	%		4.06	%		3.68	%		3.27	%		4.37	%		2.50	%
Total interest-bearing deposits		3.17	%		3.15	%		2.88	%		2.56	%		2.16	%		3.07	%		1.70	%
Non-Deposit Funding:
Borrowings		5.54	%		5.60	%		5.61	%		5.57	%		5.66	%		5.58	%		5.30	%
Total interest-bearing liabilities		3.41	%		3.45	%		3.23	%		2.96	%		2.48	%		3.37	%		2.03	%
Cost of deposits		2.33	%		2.30	%		2.08	%		1.81	%		1.53	%		2.24	%		1.16	%
Cost of funds		2.58	%		2.61	%		2.42	%		2.18	%		1.80	%		2.54	%		1.42	%
Net interest margin ⁽³⁾		3.46	%		3.51	%		3.54	%		3.63	%		3.82	%		3.50	%		4.09	%

⁽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
	September 30,			June 30,			March 31,			December 31,			September 30,
Asset quality data	2024			2024			2024			2023			2023
(Dollar amounts in thousands, unaudited)
Nonperforming loans	$	30,078		$	15,961		$	10,831		$	10,877		$	7,717
Other real estate owned		-			-			-			-			5,792
Nonperforming assets	$	30,078		$	15,961		$	10,831		$	10,877		$	13,509
Allowance for credit losses	$	22,526		$	21,795		$	21,069		$	21,693		$	20,986
Allowance for credit losses/total loans		1.50	%		1.46	%		1.41	%		1.47	%		1.45	%
Net charge-offs (recoveries):
Quarter-to-date	$	1,377		$	(29	)	$	(68	)	$	(117	)	$	(16	)
Year-to-date		1,285			(97	)		(68	)		(31	)		87
Net charge-offs (recoveries) to average loans, annualized:
Quarter-to-date		0.36	%		(0.01	%)		(0.02	%)		(0.03	%)		0.00	%
Year-to-date		0.11	%		(0.01	%)		(0.02	%)		0.00	%		0.01	%
Nonperforming loans/total loans		2.00	%		1.07	%		0.73	%		0.74	%		0.53	%
Allowance for credit losses/nonperforming loans		74.89	%		136.55	%		194.52	%		199.44	%		271.95	%
Nonperforming assets/total assets		1.62	%		0.87	%		0.60	%		0.60	%		0.75	%

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)	September 30,		June 30,		March 31,		December 31,		September 30,
	2024		2024		2024		2023		2023
Stockholders' equity	$	210,705	$	206,788	$	205,575	$	205,681	$	193,749
Less goodwill and other intangibles		42,225		42,482		42,740		42,998		43,103
Tangible common equity	$	168,480	$	164,306	$	162,835	$	162,683	$	150,646
Shares outstanding		8,071,032		8,067,144		8,067,144		8,095,252		8,092,576
Tangible book value per share	$	20.87	$	20.37	$	20.18	$	20.10	$	18.62

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,
	2024			2024			2024			2023			2023			2024			2023
Average stockholders' equity	$	209,096		$	205,379		$	205,342		$	197,208		$	196,795		$	206,691		$	196,074
Less average goodwill and other intangibles		42,350			42,607			42,654			42,972			43,232			42,512			41,018
Average tangible common equity	$	166,746		$	162,772		$	162,688		$	154,236		$	153,563		$	164,179		$	155,056
Net income	$	2,340		$	4,164		$	4,167		$	3,543		$	3,836		$	10,671		$	13,825
Return on average tangible common equity (annualized)		5.58	%		10.29	%		10.30	%		9.11	%		9.91	%		8.68	%		11.92	%

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,
	2024		2024		2024			2023		2023		2024		2023
Net income	$	2,340	$	4,164	$	4,167		$	3,543	$	3,836	$	10,671	$	13,825
Add income taxes		371		690		769			709		703		1,830		2,678
Add provision (recovery of) for credit losses		2,234		87		(136	)		554		1,127		2,185		2,449
PTPP	$	4,945	$	4,941	$	4,800		$	4,806	$	5,666	$	14,686	$	18,952

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

	For the Three Months Ended
	September 30,							September 30,
	2024							2023
	Average				Average			Average				Average
	Balance		Interest		Yield/Cost			Balance		Interest		Yield/Cost
Interest-earning assets:
Loans receivable ⁽¹⁾	$	1,507,518	$	23,441		6.19	%	$	1,425,375	$	20,899		5.82	%
Investment securities ^{(1) (2)}		193,659		1,490		3.59	%		193,966		1,457		3.51	%
Interest-earning deposits with other banks ⁽³⁾		63,580		682		4.27	%		68,587		714		4.13	%
Total interest-earning assets		1,764,757		25,613		5.84	%		1,687,928		23,070		5.49	%
Noninterest-earning assets		86,733							88,058
Total assets	$	1,851,490						$	1,775,986
Interest-bearing liabilities:
Interest-bearing demand deposits	$	217,124	$	1,181		2.16	%	$	256,153	$	975		1.51	%
Money market deposits		362,545		3,583		3.93	%		259,802		1,928		2.94	%
Savings deposits		198,775		357		0.71	%		225,216		327		0.58	%
Certificates of deposit		325,240		3,671		4.49	%		291,409		2,402		3.27	%
Short-term borrowings		113,812		1,575		5.51	%		91,201		1,258		5.47	%
Other borrowings		11,739		173		5.86	%		11,940		213		7.08	%
Total interest-bearing liabilities		1,229,235		10,540		3.41	%		1,135,721		7,103		2.48	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		396,456							431,775
Other liabilities		16,703							11,695
Stockholders' equity		209,096							196,795
Total liabilities and stockholders' equity	$	1,851,490						$	1,775,986
Net interest income			$	15,073						$	15,967
Interest rate spread ⁽⁴⁾						2.43	%						3.01	%
Net interest margin ⁽⁵⁾						3.46	%						3.82	%
Ratio of average interest-earning assets to average interest-bearing liabilities						143.57	%						148.62	%

⁽¹⁾ Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $281 and $270 for the three months ended September 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
	September 30,							June 30,
	2024							2024
	Average				Average			Average				Average
	Balance		Interest		Yield/Cost			Balance		Interest		Yield/Cost
Interest-earning assets:
Loans receivable ⁽¹⁾	$	1,507,518	$	23,441		6.19	%	$	1,503,440	$	23,422		6.27	%
Investment securities^{(1) (2)}		193,659		1,490		3.59	%		193,688		1,471		3.59	%
Interest-earning deposits with other banks ⁽³⁾		63,580		682		4.27	%		61,891		706		4.59	%
Total interest-earning assets		1,764,757		25,613		5.84	%		1,759,019		25,599		5.92	%
Noninterest-earning assets		86,733							84,495
Total assets	$	1,851,490						$	1,843,514
Interest-bearing liabilities:
Interest-bearing demand deposits	$	217,124	$	1,181		2.16	%	$	209,965	$	1,009		1.93	%
Money market deposits		362,545		3,583		3.93	%		337,937		3,320		3.95	%
Savings deposits		198,775		357		0.71	%		192,577		305		0.64	%
Certificates of deposit		325,240		3,671		4.49	%		333,542		3,789		4.57	%
Short-term borrowings		113,812		1,575		5.51	%		138,656		1,920		5.57	%
Other borrowings		11,739		173		5.86	%		11,791		173		5.90	%
Total interest-bearing liabilities		1,229,235		10,540		3.41	%		1,224,468		10,516		3.45	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		396,456							396,626
Other liabilities		16,703							17,041
Stockholders' equity		209,096							205,379
Total liabilities and stockholders' equity	$	1,851,490						$	1,843,514
Net interest income			$	15,073						$	15,083
Interest rate spread ⁽⁴⁾						2.43	%						2.47	%
Net interest margin⁽⁵⁾						3.46	%						3.51	%
Ratio of average interest-earning assets to average interest-bearing liabilities						143.57	%						143.66	%

⁽¹⁾ Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $281 and $289 for the three months ended September 30, 2024 and June 30, 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 Nine Months Ended
	September 30,							September 30,
	2024							2023
	Average				Average			Average				Average
	Balance		Interest		Yield/Cost			Balance		Interest		Yield/Cost
Interest-earning assets:
Loans receivable ⁽¹⁾	$	1,495,834	$	69,258		6.19	%	$	1,395,438	$	59,935		5.75	%
Investment securities^{(1) (2)}		193,719		4,400		3.57	%		194,109		4,353		3.54	%
Interest-earning deposits with other banks⁽³⁾		63,203		2,166		4.58	%		66,730		1,924		3.85	%
Total interest-earning assets		1,752,756		75,824		5.84	%		1,656,277		66,212		5.41	%
Noninterest-earning assets		86,473							89,567
Total assets	$	1,839,229						$	1,745,844
Interest-bearing liabilities:
Interest-bearing demand deposits	$	212,699	$	3,167		1.99	%	$	216,044	$	1,934		1.20	%
Money market deposits		332,987		9,730		3.90	%		234,236		4,005		2.29	%
Savings deposits		197,477		951		0.64	%		267,951		1,608		0.80	%
Certificates of deposit		330,884		10,833		4.37	%		263,448		4,925		2.50	%
Short-term borrowings		132,275		5,488		5.54	%		86,670		3,373		5.20	%
Other borrowings		11,790		530		6.00	%		11,990		539		6.01	%
Total interest-bearing liabilities		1,218,112		30,699		3.37	%		1,080,339		16,384		2.03	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		397,764							458,086
Other liabilities		16,662							11,345
Stockholders' equity		206,691							196,074
Total liabilities and stockholders' equity	$	1,839,229						$	1,745,844
Net interest income			$	45,125						$	49,828
Interest rate spread⁽⁴⁾						2.47	%						3.38	%
Net interest margin⁽⁵⁾						3.50	%						4.09	%
Ratio of average interest-earning assets to average interest-bearing liabilities						143.89	%						153.31	%

⁽¹⁾ Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $851 and $824 for the nine months ended September 30, 2024 and September 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.

Middlefield Banc Corp. Reports 2024 Nine-Month Financial Results

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