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Press Release

Middlefield Banc Corp. Reports 2020 First Quarter Financial Results

Company Release - 4/27/2020 8:00 AM ET

MIDDLEFIELD, Ohio, April 27, 2020 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the 2020 first quarter ended March 31, 2020.

2020 First Quarter Financial Highlights Include (on a year-over-year basis unless noted):

  • Net interest margin remained stable at 3.63%, compared to 3.69%  
  • Nonperforming assets declined 16.4% to $8.9 million
  • Charge-offs declined 42.9% to $0.3 million
  • Net income impacted by $2.7 million provision associated with an increase in the allowance for loan losses as a result of the COVID-19 crisis
  • Allowance for loan losses to total loans increased to 0.93%, compared to 0.72%
  • Hospitality and restaurant sectors were only 4.3% and 1.7%, respectively, of net loans at March 31, 2020
  • Book value increased 3.0% to $20.83 per share
  • Equity to assets increased 65 basis points to 10.93%

“The Middlefield Banking Company is committed to helping its customers and communities respond to the significant financial challenges caused by the COVID-19 pandemic,” stated Thomas G. Caldwell, President and Chief Executive Officer. “Over the past several weeks, Middlefield has helped nearly 560 small businesses receive over $90 million of support through the March 2020 CARES Act. This process has required a significant amount of time and resources from across our organization. I am extremely proud of our associates for their response to the crisis and their dedication providing essential financial services to our communities.” 

“We ended the 2020 first quarter with a strong financial position and capital levels. Our net interest margin has remained stable over the past 12 months, despite a declining rate environment and significant competition for loans and deposits. Net income would have also been stable, but we prudently took a $2.7 million provision during the first quarter to increase our allowance for loan losses. We are confident in our conservative and disciplined approach to credit and risk management, however the economic challenges caused by the COVID-19 crisis have had an impact on credit quality and cannot be discounted.. Macroeconomic trends have yet to fully capture the impact of the COVID-19 crisis, but we believe underlying economic weaknesses in our markets existed on March 31, 2020. We expect further pressure on our net interest margin due to the recent 100 basis point reduction in the Federal Reserve target rate, and we will continue making the necessary adjustments to our allowance for loan losses as the COVID-19 crisis evolves.”   

“We are focused on managing all aspects of the business that are under our control as we navigate the COVID-19 crisis and a lower rate environment, while supporting our customers, employees, communities, and shareholders. This includes pursuing near-term strategies that protect the health and safety of our employees and customers, control risk, proactively manage expenses, and support our dividend policy. As we respond to the COVID-19 crisis and the unprecedented environment it has created, I am thankful for the proven leadership team we have assembled and our loyal customers, employees, and shareholders.” 

Income Statement
Net interest income for the 2020 first quarter was $10.0 million, compared to $10.2 million for the 2019 first quarter. The net interest margin for the 2020 first quarter was 3.63%, compared to 3.69% for the same period of 2019. For the 2020 first quarter, noninterest income was essentially unchanged from the same period last year, at $1.1 million. Noninterest expense for the 2020 first quarter decreased 3.3% to $7.3 million, from the 2019 first quarter.

Donald L. Stacy, Chief Financial Officer stated: “Throughout 2019, we remained focused on managing risk and pricing on loans, while prudently controlling our funding costs on deposits. While these strategies impacted loan growth last year, we ended the 2020 first quarter with a 16.4% year-over-year reduction in nonperforming assets, and a 42.9% year-over-year reduction in charge-offs. As a result, we entered this challenging market environment with improved asset quality trends. However, since the COVID-19 crisis began, we have experienced an increase in requests for deferrals and we are working on providing temporary relief to our customers. With an equity to assets ratio of 10.93%, we have strong liquidity and have access to additional liquidity sources if needed to navigate this challenging period.”

Balance Sheet
Total assets at March 31, 2020, decreased 5.2% to $1.21 billion, compared to $1.28 billion at March 31, 2019. Net loans at March 31, 2020, were $988.8 million, compared to $997.3 million at March 31, 2019. The 0.9% year-over-year decrease in net loans was primarily a result of a $35.5 million decrease in multifamily commercial real estate loans, and a $15.4 million decline in non-owner occupied commercial real estate loans, partially offset by a $21.0 million increase in commercial and industrial loans, and an $11.9 million increase in construction and other loans. 

Total deposits at March 31, 2020, was $1.00 billion, compared to $1.04 billion at March 31, 2019.  The 3.5% decrease in deposits was primarily a result of lower time, money market, and saving deposits, partially offset by higher noninterest-bearing and interest-bearing demand accounts. The investment portfolio, classified as available for sale, was $103.0 million at March 31, 2020, compared with $98.1 million at March 31, 2019.

Stockholders’ Equity and Dividends
At March 31, 2020, stockholders’ equity increased 0.8% to $132.7 million compared to $131.7 million at March 31, 2019. On a per share basis, shareholders’ equity at March 31, 2020, was $20.83 compared to $20.22, an increase of 3.0%, over the same period last year.

At March 31, 2020, tangible stockholders’ equity(1) increased 1.2% to $115.6 million for the 2020 first quarter, compared to $114.3 million at March 31, 2019. On a per-share basis, tangible stockholders’ equity(1) was $18.16 at March 31, 2020, compared to $17.55, an increase of 3.5%, at March 31, 2019.

During the 2020 first quarter, the Company paid cash dividends of $0.15 per share, compared to $0.14 per share for the first quarter last year.

At March 31, 2020, the Company had an equity to assets leverage ratio of 10.93%, compared to 10.28% at March 31, 2019.

Asset Quality
The provision for loan losses for the 2020 first quarter was $2.7 million, compared to $240,000 for the same period a year ago. Most of the increased provision is the result of increases to the current economic conditions qualitative factors. Nonperforming assets at March 31, 2020, were $8.9 million, compared to $10.6 million at March 31, 2019. Net charge-offs were $264,000, or 0.11% of average loans, annualized, during the 2020 first quarter, compared to net charge-offs of $462,000, or 0.19% of average loans, annualized, at March 31, 2019. The allowance for loan losses at March 31, 2020, stood at $9.2 million, or 0.93% of total loans, compared to $7.2 million, or 0.72% of total loans at March 31, 2019.

COVID-19 Update
The following table provides information with respect to our commercial loans by type at March 31, 2020.

At Risk      
Type Number of LoansBalance (in thousands)% of Total Loans
Residential non-owner occupied 337 $142,725 14.30%
Retail 220  197,073 19.75%
Restaurant/food service/bar 48  16,868 1.69%
Hospitality and tourism 32  45,225 4.53%
Self-storage facility 29  25,622 2.57%
Other 121  14,218 1.42%
Total 787 $441,731 44.26%
       
       

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020, and provides over $2.0 trillion in emergency economic relief to individuals and businesses impacted by the COVID-19 pandemic. The CARES Act authorized the Small Business Administration (“SBA”) to temporarily guarantee loans under a new 7(a) loan program called the Paycheck Protection Program (“PPP”).

As a qualified SBA lender, we were automatically authorized to originate PPP loans.

An eligible business can apply for a PPP loan up to the greater of: (1) 2.5 times its average monthly payroll costs; or (2) $10.0 million. PPP loans will have: (a) an interest rate of 1.0%, (b) a two-year loan term to maturity; and (c) principal and interest payments deferred for six months from the date of disbursement. The SBA will guarantee 100% of the PPP loans made to eligible borrowers. The entire principal amount of the borrower’s PPP loan, including any accrued interest, is eligible to be reduced by the loan forgiveness amount under the PPP so long as employee and compensation levels of the business are maintained and 75% of the loan proceeds are used for payroll expenses, with the remaining 25% of the loan proceeds used for other qualifying expenses.

As of April 22, 2020, we approved 558 applications for up to $90.7 million of loans under the PPP.

As of April 21, 2020, we received requests to modify 261 loans aggregating $164.5 million. As of April 21, 2020, we modified 188 loans aggregating $107.0 million primarily consisting of the deferral of principal and interest payments and the extension of the maturity date. The remaining modifications are in process and are expected to be completed.

Details with respect to actual loan modifications are as follows:

Deferrals      
Type Number of LoansBalance (in thousands)% of Total Loans
Residential non-owner occupied 9 $2,297 0.23%
Office 9  1,776 0.18%
Retail 41  52,443 5.25%
Restaurant/food service/bar 8  3,320 0.33%
Hospitality and tourism 8  4,638 0.46%
Other 113  42,547 4.26%
Total 188 $107,021 10.71%
       

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 $1.21 billion at March 31, 2020.  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 and return on average tangible equity, 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)               
  March 31,   December 31,   September 30,  June 30,  March 31,    
Balance Sheets (period end)  2020    2019   2019    2019    2019    
ASSETS                 
Cash and due from banks$ 53,533  $ 35,113  $118,956  $ 133,372  $ 121,045    
Federal funds sold  1,800    -   1,069    2,010    -    
Cash and cash equivalents  55,333    35,113   120,025    135,382    121,045    
Equity securities, at fair value  550    710   628    660    674    
Investment securities available for sale, at fair value  102,959    105,733   105,041    98,809    98,114    
Loans held for sale  513    1,220   791    431    1,230    
Loans:                 
Commercial real estate:                 
Owner occupied  113,272    102,386   106,839    109,944    107,084    
Non-owner occupied  292,775    302,180   312,049    307,562    308,134    
Multifamily  52,276    62,028   70,633    75,252    87,768    
Residential real estate  233,900    234,798   236,280    232,168    230,618    
Commercial and industrial  106,797    89,527   85,861    85,520    85,756    
Home equity lines of credit  114,933    112,248   111,459    113,662    109,865    
Construction and other  71,186    66,680   60,957    58,161    59,322    
Consumer installment  12,861    14,411   15,204    15,963    15,937    
Total loans  998,000    984,258   999,282    998,232    1,004,484    
Less allowance for loan and lease losses  9,244    6,768   7,001    7,304    7,206    
Net loans  988,756    977,490   992,281    990,928    997,278    
Premises and equipment, net  17,653    17,874   17,182    16,788    15,741    
Goodwill  15,071    15,071   15,071    15,071    15,071    
Core deposit intangibles  1,973    2,056   2,141    2,227    2,312    
Bank-owned life insurance  16,618    16,511   16,403    16,294    16,185    
Accrued interest receivable and other assets  14,513    10,697   11,015    11,832    13,285    
TOTAL ASSETS$ 1,213,939  $ 1,182,475  $1,280,578  $ 1,288,422  $ 1,280,935    
                  
  March 31,   December 31,   September 30,  June 30,  March 31,    
   2020    2019   2019    2019    2019    
LIABILITIES                 
Deposits:                 
Noninterest-bearing demand$ 206,372  $ 191,370  $199,235  $ 198,817  $ 194,298    
Interest-bearing demand  125,184    107,844   107,033    94,266    107,246    
Money market  156,556    160,826   155,419    152,885    178,668    
Savings  175,468    192,003   182,005    194,505    184,662    
Time  340,130    368,800   390,721    411,034    375,357    
Total deposits  1,003,710    1,020,843   1,034,413    1,051,507    1,040,231    
                  
Short-term borrowings  60,000    5,075   92,000    85,000    91,000    
Other borrowings  12,662    12,750   12,359    12,449    11,518    
Accrued interest payable and other liabilities  4,880    6,032   5,893    5,206    6,487    
TOTAL LIABILITIES  1,081,252    1,044,700   1,144,665    1,154,162    1,149,236    
STOCKHOLDERS' EQUITY *                 
Common stock, no par value; 10,000,000 shares authorized, 7,298,829               
shares issued, 6,369,467 shares outstanding as of March 31, 2020 86,722    86,617   86,617    86,590    86,437    
Retained earnings  65,140    65,063   62,886    60,517    58,139    
Accumulated other comprehensive (loss) income  (2,237)   1,842   2,157    1,377    641    
Treasury stock, at cost; 929,362 shares as of March 31, 2020  (16,938)   (15,747)  (15,747)   (14,224)   (13,518)   
TOTAL STOCKHOLDERS' EQUITY  132,687    137,775   135,913    134,260    131,699    
                  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$ 1,213,939  $ 1,182,475  $1,280,578  $ 1,288,422  $ 1,280,935    
                  
* All share and per share information has been adjusted for a two-for-one stock split completed on November 8, 2019         
                  
MIDDLEFIELD BANC CORP.                 
Consolidated Selected Financial Highlights                 
(Dollar amounts in thousands)               
  For the Three Months Ended   
  March 31,   December 31,   September 30,  June 30,  March 31,    
Statements of Income  2020    2019   2019    2019    2019    
                  
INTEREST AND DIVIDEND INCOME                 
Interest and fees on loans$ 12,078  $ 12,392  $12,804  $ 12,706  $ 12,488    
Interest-earning deposits in other institutions  94    124   193    169    187    
Federal funds sold  21    22   24    25    7    
Investment securities:                 
Taxable interest  157    197   206    214    179    
Tax-exempt interest  629    661   613    553    565    
Dividends on stock  30    40   45    53    58    
Total interest and dividend income  13,009    13,436   13,885    13,720    13,484    
INTEREST EXPENSE                 
Deposits  2,865    3,014   3,173    3,277    2,945    
Short-term borrowings  35    34   42    79    213    
Other borrowings  76    80   92    95    96    
Total interest expense  2,976    3,128   3,307    3,451    3,254    
                  
NET INTEREST INCOME  10,033    10,308   10,578    10,269    10,230    
                  
Provision for loan losses  2,740    460   80    110    240    
                  
NET INTEREST INCOME AFTER PROVISION                 
FOR LOAN LOSSES  7,293    9,848   10,498    10,159    9,990    
NONINTEREST INCOME                 
Service charges on deposit accounts  553    577   571    530    508    
Investment securities gains on sale, net  -    -   4    190    -    
(Loss) gain on equity securities  (160)   82   (32)   (14)   58    
Earnings on bank-owned life insurance  107    108   109    109    105    
Gains on sale of loans  114    148   128    98    59    
Other income  460    390   325    386    402    
Total noninterest income  1,074    1,305   1,105    1,299    1,132    
                  
NONINTEREST EXPENSE                 
Salaries and employee benefits  3,524    4,049   4,272    4,078    4,124    
Occupancy expense  550    580   535    496    553    
Equipment expense  273    270   244    291    235    
Data processing costs  666    614   580    549    465    
Ohio state franchise tax  268    262   262    261    259    
Federal deposit insurance expense  123    -   -    100    130    
Professional fees  349    448   401    403    431    
Advertising expense  209    128   202    200    203    
Software amortization expense  141    159   182    152    145    
Core deposit intangible amortization  83    85   86    85    85    
Other expense  1,066    783   909    867    870    
Total noninterest expense  7,252    7,378   7,673    7,482    7,500    
                  
Income before income taxes  1,115    3,775   3,930    3,976    3,622    
Income taxes  74    634   661    686    611    
                  
NET INCOME$ 1,041  $ 3,141  $3,269  $ 3,290  $ 3,011    
                  
MIDDLEFIELD BANC CORP.                 
Consolidated Selected Financial Highlights                 
(Dollar amounts in thousands, except per share and share amounts)               
  For the Three Months Ended   
  March 31,   December 31,   September 30,  June 30,  March 31,    
   2020    2019   2019    2019    2019    
Per common share data (5)                 
Net income per common share - basic$ 0.16  $ 0.48  $0.51  $ 0.51  $ 0.46    
Net income per common share - diluted$ 0.16  $ 0.48  $0.50  $ 0.50  $ 0.46    
Dividends declared per share$ 0.15  $ 0.15  $0.14  $ 0.14  $ 0.14    
Book value per share (period end)$ 20.83  $ 21.45  $21.16  $ 20.70  $ 20.22    
Tangible book value per share (period end) (2) (3)$ 18.16  $ 18.78  $18.48  $ 18.04  $ 17.55    
Dividends declared$ 964  $ 964  $900  $ 912  $ 909    
Dividend yield  3.82%   2.28%  2.37%   2.74%   2.76%   
Dividend payout ratio  92.60%   30.69%  27.53%   27.72%   30.19%   
Average shares outstanding - basic  6,417,109    6,423,543   6,458,258    6,502,508    6,498,278    
Average shares outstanding - diluted  6,429,443    6,455,387   6,479,066    6,514,946    6,510,568    
Period ending shares outstanding  6,369,467    6,423,630   6,423,130    6,485,170    6,512,740    
                  
Selected ratios                 
Return on average assets  0.35%   1.04%  1.07%   1.09%   1.01%   
Return on average equity  3.01%   8.87%  9.41%   9.79%   9.36%   
Return on average tangible common equity (2) (4)  3.43%   10.11%  10.76%   11.23%   10.80%   
Efficiency (1)  63.47%   61.75%  63.93%   63.03%   64.30%   
Equity to assets at period end  10.93%   11.65%  10.61%   10.42%   10.28%   
Noninterest expense to average assets  0.61%   0.61%  0.64%   0.62%   0.62%   
                  
(1) The efficiency ratio is calculated by dividing noninterest expense less amortization of intangibles by the sum of net interest income on a fully taxable equivalent basis plus noninterest income
(2) See reconciliation of non-GAAP measures below                 
(3) Calculated by dividing tangible common equity by shares outstanding               
(4) Calculated by dividing annualized net income for each period by average tangible common equity            
(5) All share and per share information has been adjusted for the two-for-one stock split completed on November 8, 2019         
                  
MIDDLEFIELD BANC CORP.                 
Consolidated Selected Financial Highlights                 
  For the Three Months Ended   
  March 31,   December 31,   September 30,  June 30,  March 31,    
Yields  2020    2019   2019    2019    2019    
Interest-earning assets:                 
Loans receivable (2)  4.95%   4.97%  5.09%   5.08%   5.07%   
Investment securities (2)  3.62%   3.94%  3.80%   3.79%   3.72%   
Interest-earning deposits with other banks  1.40%   1.65%  2.31%   2.21%   2.26%   
Total interest-earning assets  4.69%   4.75%  4.86%   4.86%   4.84%   
Deposits:                 
Interest-bearing demand deposits  0.42%   0.41%  0.39%   0.36%   0.30%   
Money market deposits  1.41%   1.41%  1.43%   1.40%   1.58%   
Savings deposits  0.50%   0.62%  0.68%   0.69%   0.81%   
Certificates of deposit  2.12%   2.18%  2.18%   2.35%   2.15%   
Total interest-bearing deposits  1.39%   1.43%  1.48%   1.56%   1.46%   
Non-Deposit Funding:                 
Borrowings  1.62%   2.52%  3.03%   2.70%   2.57%   
Total interest-bearing liabilities  1.40%   1.46%  1.51%   1.59%   1.52%   
Cost of deposits  1.13%   1.15%  1.20%   1.26%   1.17%   
Cost of funds  1.14%   1.17%  1.23%   1.29%   1.24%   
Net interest margin (1)  3.63%   3.66%  3.72%   3.65%   3.69%   
                  
(1) Net interest margin represents net interest income as a percentage of average interest-earning assets.            
(2) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were determined using an effective tax rate of 21%.      
                  
  For the Three Months Ended   
  March 31,   December 31,   September 30,  June 30,  March 31,    
Asset quality data  2020    2019   2019    2019    2019    
(Dollar amounts in thousands)                 
Nonaccrual loans$ 8,405  $ 8,879  $10,053  $ 10,671  $ 10,472    
90 day past due and accruing  -    -   -    58    -    
Nonperforming loans (1)  8,405    8,879   10,053    10,729    10,472    
Other real estate owned  456    155   89    89    126    
Nonperforming assets$ 8,861  $ 9,034  $10,142  $ 10,818  $ 10,598    
                  
Allowance for loan losses$ 9,244  $ 6,768  $7,001  $ 7,304  $ 7,206    
Allowance for loan losses/total loans  0.93%   0.69%  0.70%   0.73%   0.72%   
Net charge-offs:                 
Quarter-to-date$ 264  $ 693  $383  $ 12  $ 462    
Net charge-offs to average loans, annualized:                 
Quarter-to-date  0.11%   0.28%  0.15%   0.00%   0.19%   
                  
Nonperforming loans/total loans  0.84%   0.90%  1.01%   1.07%   1.04%   
Allowance for loan losses/nonperforming loans  109.98%   76.22%  69.64%   68.08%   68.81%   
Nonperforming assets/total assets  0.73%   0.76%  0.79%   0.84%   0.83%   
(1) Nonperforming loans exclude troubled debt restructurings that are performing in accordance with their terms over a prescribed period of time.      
                  
Reconciliation of Common Stockholders' Equity to Tangible Common Equity *                 
For the Three Months Ended   
(Dollar amounts in thousands) March 31,   December 31,   September 30,  June 30,  March 31,    
   2020    2019   2019    2019    2019    
                  
Stockholders' Equity$ 132,687  $ 137,775  $135,913  $ 134,260  $ 131,699    
Less Goodwill and other intangibles  17,044    17,127   17,212    17,298    17,383    
Tangible Common Equity$ 115,643  $ 120,648  $118,701  $ 116,962  $ 114,316    
                  
Shares outstanding  6,369,467    6,423,630   6,423,130    6,485,170    6,512,740    
Tangible book value per share$ 18.16  $ 18.78  $18.48  $ 18.04  $ 17.55    
                  
Reconciliation of Average Equity to Return on Average Tangible Common Equity                 
For the Three Months Ended   
                  
  March 31,   December 31,   September 30,  June 30,  March 31,    
   2020    2019   2019    2019    2019    
                  
Average Stockholders' Equity$ 139,208  $ 140,475  $137,843  $ 134,836  $ 130,450    
Less Average Goodwill and other intangibles  17,085    17,169   17,254    17,339    17,422    
Average Tangible Common Equity$ 122,123  $ 123,306  $120,589  $ 117,497  $ 113,028    
                  
Net income$ 1,041    3,141   3,269    3,290    3,011    
                           
Return on average tangible common equity (annualized)  3.43%   10.11%  10.76%   11.23%   10.80%   
          
* All share and per share information has been adjusted for a two-for-one stock split completed on November 8, 2019         
                  
MIDDLEFIELD BANC CORP.                 
Average Balance Sheets                 
(Dollar amounts in thousands)                 
  For the Three Months Ended
  March 31,   March 31,
   2020    2019 
  Average     Average  Average     Average
  Balance  Interest  Yield/Cost  Balance  Interest  Yield/Cost
Interest-earning assets:                 
Loans receivable (3) $984,034   $12,078   4.95%  $1,000,343   $12,488   5.07%
Investment securities (3)  105,894    786   3.62%   97,484    744   3.72%
Interest-earning deposits with other banks (4)  41,717    145   1.40%   45,283    252   2.26%
Total interest-earning assets  1,131,645    13,009   4.69%   1,143,110    13,484   4.84%
Noninterest-earning assets  65,003          60,576       
Total assets $1,196,648         $1,203,686       
Interest-bearing liabilities:                 
Interest-bearing demand deposits $113,691   $119   0.42%  $96,402   $72   0.30%
Money market deposits  158,008    552   1.41%   194,236    755   1.58%
Savings deposits  183,137    226   0.50%   207,848    417   0.81%
Certificates of deposit  373,866    1,968   2.12%   320,243    1,701   2.15%
Short-term borrowings  14,808    35   0.95%   35,390    213   2.44%
Other borrowings  12,703    76   2.41%   13,447    96   2.90%
Total interest-bearing liabilities  856,213    2,976   1.40%   867,566    3,254   1.52%
Noninterest-bearing liabilities:                 
Noninterest-bearing demand deposits  195,411          198,286       
Other liabilities  5,816          7,384       
Stockholders' equity  139,208          130,450       
Total liabilities and stockholders' equity $1,196,648         $1,203,686       
Net interest income    $10,033         $10,230    
Interest rate spread (1)       3.29%        3.32%
Net interest margin (2)       3.63%        3.69%
Ratio of average interest-earning assets to                 
average interest-bearing liabilities       132.17%        131.76%
                  
(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 $189 and $170 for the three months ended March 31, 2020 and 2019, respectively.
(4) Includes dividends received on restricted stock.                 
                  
  For the Three Months Ended
  March 31,   December 31,
   2020    2019 
  Average     Average  Average     Average
  Balance  Interest  Yield/Cost  Balance  Interest  Yield/Cost
Interest-earning assets:                 
Loans receivable (3) $984,034   $12,078   4.95%  $990,106   $12,392   4.97%
Investment securities (3)  105,894    786   3.62%   104,139    858   3.94%
Interest-earning deposits with other banks (4)  41,717    145   1.40%   44,816    186   1.65%
Total interest-earning assets  1,131,645    13,009   4.69%   1,139,061    13,436   4.75%
Noninterest-earning assets  65,003          64,303       
Total assets $1,196,648         $1,203,364       
Interest-bearing liabilities:                 
Interest-bearing demand deposits $113,691   $119   0.42%  $108,015   $112   0.41%
Money market deposits  158,008    552   1.41%   157,117    557   1.41%
Savings deposits  183,137    226   0.50%   198,577    309   0.62%
Certificates of deposit  373,866    1,968   2.12%   370,404    2,036   2.18%
Short-term borrowings  14,808    35   0.95%   5,330    34   2.53%
Other borrowings  12,703    76   2.41%   12,602    80   2.52%
Total interest-bearing liabilities  856,213    2,976   1.40%   852,045    3,128   1.46%
Noninterest-bearing liabilities:                 
Noninterest-bearing demand deposits  195,411          207,793       
Other liabilities  5,816          3,051       
Stockholders' equity  139,208          140,475       
Total liabilities and stockholders' equity $1,196,648         $1,203,364       
Net interest income    $10,033         $10,308    
Interest rate spread (1)       3.29%        3.29%
Net interest margin (2)       3.63%        3.66%
Ratio of average interest-earning assets to                 
average interest-bearing liabilities       132.17%        133.69%
                  
(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 $189 and $197 for the three months ended March 31, 2020 and December 31, 2019, respectively.
(4) Includes dividends received on restricted stock.                 
                  

Source: Middlefield Banc Corp.