• Middlefield Banc Corp. Reports 2024 Six-Month Financial Results

    Source: Nasdaq GlobeNewswire / 18 Jul 2024 16:00:20   America/Chicago

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

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

    • Net income was $8.3 million, compared to $10.0 million
    • Pre-tax, pre-provision net income(1) was $9.7 million, compared to $13.3 million  
    • Earnings were $1.03 per diluted share, compared to $1.23 per diluted share
    • Net interest income after the provision for credit losses was $30.1 million, compared to $32.5 million
    • Noninterest income increased 8.7% to $3.6 million, compared to $3.3 million
    • Total loans increased 6.3% to a record  $1.50 billion, compared to $1.41 billion
    • Total deposits increased 2.6% to a record $1.47 billion, compared to $1.43 billion
    • Return on average assets annualized was 0.91%, compared to 1.16%
    • Return on average equity annualized was 8.16%, compared to 9.64%
    • Return on average tangible common equity(1) was 10.30%, compared to 11.92%
    • Asset quality remains at historically low levels with nonperforming assets to total assets of 0.87%, compared to 0.74%
    • Allowance for credit losses was 1.46% of total loans, compared to 1.46%
    • Equity to assets remained strong at 11.31%, compared to 11.26%
    • Book value increased 5.1% to $25.63 from $24.38 per share  
    • Tangible book value(1) increased 7.1% to $20.37 from $19.02 per share

    (1) See non-GAAP reconciliation under the section “GAAP to Non-GAAP Reconciliations”

    Ronald L. Zimmerly, Jr., President and Chief Executive Officer, stated, “Throughout our Central, Western and Northeast Ohio markets, Middlefield’s team members are dedicated to providing leading community-oriented financial services to our customers. This long-standing commitment supports the financial success of our local communities, which is especially important as uncertainty about FOMC monetary policies and economic conditions has increased. Despite these macro trends, we remain focused on supporting our communities, managing expenses, and maintaining a strong balance sheet. I am pleased with the progress we are making as total loans at June 30, 2024, increased 6.3% year-over-year to a record $1.50 billion, year-to-date noninterest expense is in line with the prior year period, and we remain extremely ‘well-capitalized’ under applicable banking requirements.”

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

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

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

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

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

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

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

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

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

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

    Mr. Ranttila continued, “We also remain focused on identifying opportunities to improve our cost of funds, pay down higher-cost capital, and grow core deposits to support loan demand. Year-to-date, total deposits increased 3.0%, while our Federal Home Loan Bank (FHLB) advances decreased by 23.3%. At June 30, 2024, additional borrowing capacity at the FHLB was $440.3 million, with the potential to acquire additional brokered deposits of approximately $187.8 million. The combination of high levels of potentially liquid assets, cash flows from operations, and additional borrowing capacity provides us with excellent liquidity levels to support our long-term growth strategies and our legacy of returning excess capital to shareholders.”

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

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


    Stockholders' Equity and Dividends
    At June 30, 2024, stockholders' equity was $206.8 million compared to $197.2 million at June 30, 2023. The 4.8% year-over-year increase in stockholders' equity was primarily due to higher retained earnings and an improvement in the unrealized losses on the available-for-sale investment portfolio, partially offset by stock acquired under the Company's stock repurchase program. On a per-share basis, shareholders' equity at June 30, 2024, was $25.63 compared to $24.38 at June 30, 2023.

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

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

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

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

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

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

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

    About Middlefield Banc Corp.
    Middlefield Banc Corp., headquartered in Middlefield, Ohio, is the Bank holding Company of The Middlefield Banking Company, with total assets of $1.83 billion at June 30, 2024. The Bank operates 21 full-service banking centers and an LPL Financial® brokerage office serving Ada, Beachwood, Bellefontaine, Chardon, Cortland, Dublin, Garrettsville, Kenton, Mantua, Marysville, Middlefield, Newbury, Orwell, Plain City, Powell, Solon, Sunbury, Twinsburg, and Westerville. The Bank also operates a Loan Production Office in Mentor, Ohio.

    Additional information is available at www.middlefieldbank.bank.

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

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

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


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


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


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


    (1)  See section “GAAP to Non-GAAP Reconciliations” for the reconciliation of GAAP performance measures to non-GAAP measures.
    (2)  Calculated by dividing tangible common equity by shares outstanding.
    (3)  Calculated by dividing annualized net income for each period by average tangible common equity.
    (4)  The efficiency ratio is calculated by dividing noninterest expense less amortization of intangibles by the sum of net interest income on a fully taxable equivalent basis plus noninterest income.
     


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


    (1)  Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were determined using an effective tax rate of 21%.
    (2)  Yield is calculated on the basis of amortized cost.
    (3)  Net interest margin represents net interest income as a percentage of average interest-earning assets.


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


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


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


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


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


    (1) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $289 and  $294 for the three months ended June 30, 2024 and 2023, respectively.
    (2) Yield is calculated on the basis of amortized cost.
    (3) Includes dividends received on restricted stock.
    (4) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
    (5) Net interest margin represents net interest income as a percentage of average interest-earning assets.
     


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


    (1)  Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $289 and $282 for the three months ended June 30, 2024 and March 31, 2024, respectively.
    (2) Yield is calculated on the basis of amortized cost.
    (3) Includes dividends received on restricted stock.
    (4) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
    (5) Net interest margin represents net interest income as a percentage of average interest-earning assets.
     


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


    (1)  Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $570 and $572 for the six months ended June 30, 2024 and June 30, 2023, respectively.
    (2) Yield is calculated on the basis of amortized cost.
    (3) Includes dividends received on restricted stock.
    (4) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
    (5) Net interest margin represents net interest income as a percentage of average interest-earning assets.


      
    Company Contact:Investor and Media Contact:
    Ronald L. Zimmerly, Jr.
    President and Chief Executive Officer
    Middlefield Banc Corp.
    (419) 673-1217
    rzimmerly@middlefieldbank.com     		Andrew M. Berger
    Managing Director
    SM Berger & Company, Inc.
    (216) 464-6400
    andrew@smberger.com 

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