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Filer: Middlefield Banc Corp. Project Type:
8-K Description: (LED) Form 8-K Q2 Earnings Release |
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Document Type: 8-K Document Version: 7
Project ID: 106163 |
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Created By: Damon Yoder Created At:
7/16/2024 9:51:22 PM EDT |
Ronald L. Zimmerly, Jr., President and Chief Executive Officer, stated, Throughout our Central, Western
and Northeast Ohio markets, Middlefields team members are dedicated to providing leading community-oriented financial services to our customers. This long-standing commitment supports the financial success of our local communities, which
is especially important as uncertainty about FOMC monetary policies and economic conditions has increased. Despite these macro trends, we remain focused on supporting our communities, managing expenses, and maintaining a strong balance
sheet. I am pleased with the progress we are making as total loans at June 30, 2024, increased 6.3% year-over-year to a record $1.50 billion, year-to-date
noninterest expense is in line with the prior year period, and we remain extremely well-capitalized under applicable banking requirements.
We also continue to pursue our multi-year strategic growth goals, which are focused on increasing revenue opportunities, improving our customer
experience, and advancing operational performance to create lasting value for our shareholders. For the 2024 second quarter, noninterest income increased 10.6% over the same period a year ago, and total deposits were up 2.6% over the past year
to a record $1.47 billion, as we successfully diversify our revenue and increase our market share. In addition, our tangible book value(1) has grown 7.1% to $20.37 per share, reflecting
stable profitability, limited accumulated other comprehensive income (AOCI) impacts, and asset quality in line with historical performance. While we expect the near-term banking environment to remain challenging, we continue to focus on
supporting our communities, strategically allocating capital, maintaining disciplined underwriting standards, and prudently managing expenses, concluded Mr. Zimmerly. (1)See non-GAAP
reconciliation under the section GAAP to Non-GAAP Reconciliations.
Income Statement
Net interest income for the 2024 first half decreased $3.8 million to $30.1 million, compared to $33.9 million for the same
period last year. The net interest margin for the 2024 first half was 3.53%, compared to 4.23% last year.
For the 2024 first half, noninterest
income increased $0.3 million to $3.6 million, compared to $3.3 million for the same period in 2023.
Noninterest expense
for the 2024 first half was $23.9 million, compared to $23.8 million for the 2023 first half.
Net income for the six months ended
June 30, 2024, was $8.3 million, or $1.03 per diluted share, compared to $10.0 million, or $1.23 per diluted share, for the same period last year.
For the 2024 first half, pre-tax, pre-provision net income was
$9.7 million, compared to $13.3 million last year. (See non-GAAP reconciliation under the section GAAP to Non-GAAP Reconciliations.)
Balance Sheet
Total assets at June 30, 2024,
increased 4.4% to $1.83 billion, compared to $1.75 billion at June 30, 2023. Total loans at June 30, 2024, were $1.50 billion, compared to $1.41 billion at June 30, 2023. The 6.3% year-over-year increase in total
loans was primarily due to higher commercial and industrial, residential real estate, and multifamily loans.
Total liabilities at June 30,
2024, increased 4.3% to $1.62 billion, compared to $1.55 billion at June 30, 2023. Total deposits at June 30, 2024, were $1.47 billion, compared to $1.43 billion at June 30, 2023. The 2.6% year-over-year increase
in deposits was primarily due to growth in money market and time deposits, partially offset by declines in noninterest-bearing and interest-bearing demand and savings accounts. Noninterest-bearing demand deposits were 26.3% of total deposits at
June 30, 2024, compared to 30.8% at June 30, 2023. At June 30, 2024, the Company had brokered deposits of $90.4 million, compared to $90.3 million at June 30, 2023.
The investment securities available for sale portfolio was $166.4 million at June 30, 2024, compared with $167.2 million at June 30, 2023.
Michael Ranttila, Chief Financial Officer, stated, Asset quality remains stable. We have achieved four consecutive quarters with net quarter-to-date recoveries, and nonperforming assets to total assets at June 30, 2024, were 0.87%, compared to 0.74% at June 30, 2023. The slight uptick in
nonperforming assets to total assets was due primarily to two relationships in the freight and industrial segments that moved to nonaccrual in the second quarter. We believe these relationships do not indicate a trend in the markets we serve, our
portfolio, or underwriting standards. Despite this increase, we remain well reserved for potential credit losses with an allowance for credit losses to total loans of 1.46% at June 30, 2024, which was in line with the same period a year ago,
and up slightly from the quarter ended March 31, 2024.