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

    Source: Nasdaq GlobeNewswire / 17 Oct 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.

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