MBT Financial Corp. Announces Second Quarter 2008 Earnings


MONROE, Mich., July 17, 2008 (PRIME NEWSWIRE) -- MBT Financial Corp., (Nasdaq:MBTF), the parent company of Monroe Bank & Trust, reported second quarter 2008 net income of $1.7 million, or $0.11 per diluted share, compared to the $3.5 million, or $0.21 per diluted share earned in the second quarter of 2007. Net income for the six months ended June 30, 2008 was $4.4 million, or $0.27 per diluted share, compared to $7.2 million, or $0.43 per diluted share in the first half of 2007.

H. Douglas Chaffin, President and CEO, commented, "The ongoing challenges in the southeast Michigan economy, with increasing unemployment and decreasing real estate values, continue to have a negative impact on our performance. We monitor the quality of our loan portfolios closely, and we decided to increase the allowance for loan losses and write down the values of some of our Other Real Estate Owned this quarter. Our Allowance for Loan Losses is now $18.1 million, or 1.83% of loans. Non performing assets (NPAs) increased from $55.4 million to $62.3 million. Our strong capital position allowed us to pay quarterly dividends that exceeded our earnings for the last three quarters and now represents an annualized yield in excess of 14% on our current stock price. We are concerned about our current level of dividends relative to earnings. In accordance with its customary practice our board of directors will closely evaluate our capital needs, earnings expectations, and market conditions before declaring our next dividend. The next dividend announcement is not anticipated until after the board's August meeting on August 28, 2008."

Mr. Chaffin further commented on the Company's earnings for the quarter: "Net Interest Income increased $340,000 compared to the second quarter of 2007 due to the improvement in the net interest margin and the slight growth in average earning assets. We are encouraged by the second consecutive quarterly improvement in the margin, and we are beginning to see the benefits of our cost reduction initiatives. Non interest income, excluding securities transactions, decreased 4.8% compared to last year as Wealth Management fees were impacted by lower market values for investments and origination fees on mortgage loans sold were impacted by a decline in real estate lending activity. Credit quality issues also affected our non interest expenses, which increased 9.5% compared to last year. We expect credit related expenses to remain high, but we will see meaningful expense improvement in most other areas."

Conference Call

MBT Financial Corp. will hold a conference call to discuss first quarter results on Friday, July 18, at 10:00 a.m. Eastern Time. The call will be webcast and can be accessed at the Investor Relations/Corporate Profile page of MBT Financial Corp.'s web site www.mbandt.com. The call can also be accessed by calling (800) 860-2442. The event will be archived on the Company's web site and available for three months following the call.

About the Company

MBT Financial Corp. (Nasdaq:MBTF), a single bank holding company headquartered in Monroe, Michigan, is the parent company of Monroe Bank & Trust (MBT).

Founded in 1858, MBT is one of the largest full service community banks in Southeast Michigan, with more than $1.5 billion in assets, offering personal and business products and services, and complete credit options. MBT's Wealth Management Group is one of the area's largest trust departments with over $800 Million in assets under management. With 25 offices, 41 ATMs, PhoneLink telephone banking and eLink online banking, MBT prides itself on an incomparable level of service and access for its customers. Visit MBT's web site at www.MBandT.com.

The MBT Financial Corp. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4214

Forward-Looking Statements

Certain statements contained herein are not based on historical facts and are "forward-looking statements" within the meaning of Section 21A of the Securities Exchange Act of 1934. Forward-looking statements which are based on various assumptions (some of which are beyond the Company's control), may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of these terms. Actual results could differ materially from those set forth in forward-looking statements, due to a variety of factors, including, but not limited to, those related to the economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset/liability management, change in the financial and securities markets, including changes with respect to the market value of our financial assets, the availability of and costs associated with sources of liquidity, and the ability of the Company to resolve or dispose of problem loans. The Company undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.



                           MBT FINANCIAL CORP.
              CONSOLIDATED FINANCIAL HIGHLIGHTS - UNAUDITED

                                                Quarterly
                                         ------------------------
 (dollars in thousands except per share     2008         2008
   data)                                   2nd Qtr      1st Qtr
                                         -----------  -----------

 EARNINGS
  Net interest income                    $    11,127  $    10,453
  FTE Net interest income                $    11,463  $    10,784
  Provision for loan and lease losses    $     2,700  $     1,200
  Non-interest income                    $     3,858  $     3,962
  Non-interest expense                   $    10,163  $     9,698
  Net income (loss)                      $     1,718  $     2,647
  Basic earnings (loss) per share        $      0.11  $      0.16
  Diluted earnings (loss) per share      $      0.11  $      0.16
  Average shares outstanding              16,130,806   16,127,047
  Average diluted shares outstanding      16,144,981   16,139,073

 PERFORMANCE RATIOS
  Return on average assets                      0.45%        0.69%
  Return on average common equity               5.34%        8.24%

  Base Margin                                   3.05%        2.84%
  FTE Adjustment                                0.09%        0.09%
  Loan Fees                                     0.07%        0.07%
                                         -----------  -----------
  FTE Net Interest Margin                       3.21%        3.00%

  Efficiency ratio                             61.24%       64.51%
  Full-time equivalent employees                 384          380

 CAPITAL
  Average equity to average assets              8.42%        8.36%
  Book value per share                   $      7.52  $      7.94
  Cash dividend per share                $      0.18  $      0.18

 ASSET QUALITY
  Loan Charge-Offs                       $     2,607  $     3,955
  Loan Recoveries                        $       317  $       216
                                         -----------  -----------
  Net Charge-Offs                        $     2,290  $     3,739

  Allowance for loan and lease losses    $    18,093  $    17,683

  Nonaccrual Loans                       $    38,115  $    37,814
  Loans 90 days past due                 $       109  $        94
  Restructured loans                     $     6,023  $     1,679
                                         -----------  -----------
   Total non performing loans            $    44,247  $    39,587
  Other real estate owned & other
   assets                                $    18,065  $    15,819
                                         -----------  -----------

   Total non performing assets           $    62,312  $    55,406
  Problem Loans Still Performing         $    41,188  $    40,521
                                         -----------  -----------
   Total Problem Assets                  $   103,500  $    95,927

  Net loan charge-offs to average
  loans                                         0.93%        1.51%
  Allowance for losses to total loans           1.83%        1.78%
  Non performing loans to gross loans           4.47%        3.99%
  Non performing assets to total
  assets                                        4.04%        3.56%
  Allowance to non performing loans            40.89%       44.67%

 END OF PERIOD BALANCES
  Loans and leases                       $   989,839  $   991,402
  Total earning assets                   $ 1,421,653  $ 1,435,370
  Total assets                           $ 1,542,747  $ 1,555,450
  Deposits                               $ 1,065,770  $ 1,095,605
  Interest Bearing Liabilities           $ 1,267,718  $ 1,286,289
  Shareholders' equity                   $   121,348  $   128,081
  Total Shares Outstanding                16,132,513   16,128,321

 AVERAGE BALANCES
  Loans and leases                       $   992,618  $   998,060
  Total earning assets                   $ 1,432,923  $ 1,444,037
  Total assets                           $ 1,536,884  $ 1,545,048
  Deposits                               $ 1,076,046  $ 1,109,664
  Interest Bearing Liabilities           $ 1,273,052  $ 1,283,990
  Shareholders' equity                   $   129,353  $   129,175

                                           Quarterly                      
                              -------------------------------------
 (dollars in thousands except    2007         2007         2007
  per share data)               4th Qtr      3rd Qtr      2nd Qtr
                              -----------  -----------  -----------
 EARNINGS
  Net interest income         $    10,131  $    10,668  $    10,787
  FTE Net interest income     $    10,232  $    11,011  $    11,127
  Provision for loan and 
   lease losses               $     8,907  $     1,000  $       750
  Non-interest income         $     3,824  $     3,928  $     4,119
  Non-interest expense        $     9,601  $     9,242  $     9,279
  Net income (loss)           $    (2,706) $     3,181  $     3,535
  Basic earnings (loss) per
   share                      $     (0.17) $      0.20  $      0.21
  Diluted earnings (loss) per
   share                      $     (0.17) $      0.20  $      0.21
  Average shares outstanding   16,135,339   16,288,696   16,558,137
  Average diluted shares
   outstanding                 16,145,958   16,310,279   16,585,720

 PERFORMANCE RATIOS
  Return on average assets         -0.70%         0.83%        0.94%
  Return on average common
   equity                          -8.05%         9.55%       10.33%

  Base Margin                        2.74%        2.90%        2.98%
  FTE Adjustment                     0.03%        0.10%        0.10%
  Loan Fees                          0.06%        0.08%        0.07%
                              -----------  -----------  -----------
  FTE Net Interest Margin            2.83%        3.08%        3.15%

  Efficiency ratio                  60.16%       61.06%       60.74%
  Full-time equivalent 
   employees                          404          426          425

 CAPITAL
  Average equity to average
   assets                            8.66%        8.69%        9.06%
  Book value per share        $      7.90  $      8.15  $      8.00
  Cash dividend per share     $      0.18  $      0.18  $      0.18

 ASSET QUALITY
  Loan Charge-Offs            $     3,204  $     1,013  $     1,082
  Loan Recoveries             $       195  $       256  $       343
                              -----------  -----------  -----------
  Net Charge-Offs             $     3,009  $       757  $       739

  Allowance for loan and 
   lease losses               $    20,222  $    14,323  $    14,080

  Nonaccrual Loans            $    30,459  $    26,440  $    20,017
  Loans 90 days past due      $       102  $       105  $       105
  Restructured loans          $     3,367  $       938  $     1,371
                              -----------  -----------  -----------
   Total non performing loans $    33,928  $    27,483  $    21,493
  Other real estate owned & 
   other assets               $    12,565  $     6,389  $     3,064
                              -----------  -----------  -----------
   Total non performing 
    assets                    $    46,493  $    33,872  $    24,557
  Problem Loans Still 
   Performing                 $    41,022  $    32,822  $    34,859
                              -----------  -----------  -----------
   Total Problem Assets       $    87,515  $    66,694  $    59,416

  Net loan charge-offs to 
   average loans                     1.19%        0.30%        0.30%
  Allowance for losses to 
   total loans                       2.02%        1.42%        1.40%
  Non performing loans to 
   gross loans                       3.39%        2.72%        2.14%
  Non performing assets to 
   total assets                      2.99%        2.17%        1.62%
  Allowance to non performing
   loans                            59.60%       52.12%       65.51%

 END OF PERIOD BALANCES
  Loans and leases            $ 1,002,259  $ 1,008,875  $ 1,002,248
  Total earning assets        $ 1,440,317  $ 1,439,366  $ 1,402,808
  Total assets                $ 1,556,806  $ 1,560,234  $ 1,516,026
  Deposits                    $ 1,109,980  $ 1,110,074  $ 1,078,431
  Interest Bearing 
   Liabilities                $ 1,273,665  $ 1,273,695  $ 1,224,061
  Shareholders' equity        $   127,447  $   131,651  $   131,056
  Total Shares Outstanding     16,124,997   16,148,863   16,379,602

 AVERAGE BALANCES
  Loans and leases            $ 1,002,948  $ 1,010,604  $   994,093
  Total earning assets        $ 1,436,545  $ 1,419,329  $ 1,420,183
  Total assets                $ 1,539,446  $ 1,520,222  $ 1,516,209
  Deposits                    $ 1,094,346  $ 1,086,050  $ 1,075,960
  Interest Bearing 
   Liabilities                $ 1,264,772  $ 1,248,691  $ 1,236,703
  Shareholders' equity        $   133,363  $   132,088  $   137,322

                                               Year to Date
 (dollars in thousands except per       --------------------------
  share data)                              2008           2007
                                        -----------    -----------

 EARNINGS
  Net interest income                   $    21,580    $    21,970
  FTE Net interest income               $    22,247    $    22,714
  Provision for loan and lease losses   $     3,900    $     1,500
  Non-interest income                   $     7,820    $     7,882
  Non-interest expense                  $    19,861    $    18,391
  Net income (loss)                     $     4,365    $     7,238
  Basic earnings (loss) per share       $      0.27    $      0.43
  Diluted earnings (loss) per share     $      0.27    $      0.43
  Average shares outstanding             16,125,926     16,622,204
  Average diluted shares outstanding     16,140,101     16,651,173

 PERFORMANCE RATIOS
  Return on average assets                     0.57%          0.95%
  Return on average common equity              6.79%         10.62%

  Base Margin                                  2.95%          3.02%
  FTE Adjustment                               0.09%          0.10%
  Loan Fees                                    0.07%          0.07%
                                        -----------    -----------
  FTE Net Interest Margin                      3.11%          3.19%

  Efficiency ratio                            62.83%         59.79%
  Full-time equivalent employees                382            427

 CAPITAL
  Average equity to average assets             8.39%          8.98%
  Book value per share                  $      7.52    $      8.00
  Cash dividend per share               $      0.36    $      0.36

 ASSET QUALITY
  Loan Charge-Offs                      $     6,562    $     2,170
  Loan Recoveries                       $       533    $       986
                                        -----------    -----------
  Net Charge-Offs                       $     6,029    $     1,184

  Allowance for loan and lease losses   $    18,093    $    14,080

  Nonaccrual Loans                      $    38,115    $    20,017
  Loans 90 days past due                $       109    $       105
  Restructured loans                    $     6,023    $     1,371
                                        -----------    -----------
   Total non performing loans           $    44,247    $    21,493
  Other real estate owned & other
  assets                                $    18,065    $     3,064
                                        -----------    -----------
   Total non performing assets          $    62,312    $    24,557
  Problem Loans Still Performing        $    41,188    $    34,859
                                        -----------    -----------
   Total Problem Assets                 $   103,500    $    59,416

  Net loan charge-offs to average
   loans                                       1.22%          0.24%
  Allowance for losses to total loans          1.83%          1.40%
  Non performing loans to gross loans          4.47%          2.14%
  Non performing assets to total
   assets                                      4.04%          1.62%
  Allowance to non performing loans           40.89%         65.51%

 END OF PERIOD BALANCES
  Loans and leases                      $   989,839    $ 1,002,248
  Total earning assets                  $ 1,421,653    $ 1,402,808
  Total assets                          $ 1,542,747    $ 1,516,026
  Deposits                              $ 1,065,770    $ 1,078,431
  Interest Bearing Liabilities          $ 1,267,718    $ 1,224,061
  Shareholders' equity                  $   121,348    $   131,056
  Total Shares Outstanding               16,132,513     16,379,602

 AVERAGE BALANCES
  Loans and leases                      $   995,339    $   993,797
  Total earning assets                  $ 1,438,445    $ 1,433,143
  Total assets                          $ 1,540,966    $ 1,530,284
  Deposits                              $ 1,092,855    $ 1,087,839
  Interest Bearing Liabilities          $ 1,278,521    $ 1,249,949
  Shareholders' equity                  $   129,264    $   137,447

                        MBT FINANCIAL CORP.
             CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
 ------------------------------------------------------------------


                                               Quarter Ended June 30,
 Dollars in thousands (except per share data)      2008       2007

 Interest Income
 Interest and fees on loans                     $ 15,771   $ 17,751
 Interest on investment securities-
  Tax-exempt                                         818        871
  Taxable                                          4,798      4,582
 Interest on federal funds sold                       --         84
   Total interest income                          21,387     23,288

 Interest Expense
 Interest on deposits                              6,368      7,981
 Interest on borrowed funds                        3,892      4,520
   Total interest expense                         10,260     12,501

 Net Interest Income                              11,127     10,787
 Provision For Loan Losses                         2,700        750

 Net Interest Income After
  Provision For Loan Losses                        8,427     10,037

 Other Income
 Income from wealth management services            1,119      1,151
 Service charges and other fees                    1,586      1,574
 Net gain (loss) on sales of securities               23         92
 Origination fees on mortgage loans sold              91        210
 Bank Owned Life Insurance income                    275        334
 Other                                               764        758
   Total other income                              3,858      4,119

 Other Expenses
 Salaries and employee benefits                    5,441      5,599
 Occupancy expense                                   916        844
 Equipment expense                                   848        850
 Marketing expense                                   356        369
 Professional fees                                   455        406
 Net (gain) loss on other real estate owned          354         (8)
 Other                                             1,793      1,219
   Total other expenses                           10,163      9,279

 Income Before Income Taxes                        2,122      4,877
 Income Tax Expense                                  404      1,342
 Net Income                                     $  1,718   $  3,535
 ------------------------------------------------------------------

 Basic Earnings Per Common Share                $   0.11   $   0.21
 ------------------------------------------------------------------

 Diluted Earnings Per Common Share              $   0.11   $   0.21
 ------------------------------------------------------------------

 Dividends Declared Per Common Share            $   0.18   $   0.18
 ------------------------------------------------------------------

                         MBT FINANCIAL CORP.
            CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
 ----------------------------------------------------------------

                                                    Six Months
                                                  Ended June 30,
 Dollars in thousands (except per share           2008      2007
  data)                   

 Interest Income
 Interest and fees on loans                     $32,199   $35,512
 Interest on investment securities-
  Tax-exempt                                      1,633     1,880
  Taxable                                         9,754     9,497
 Interest on federal funds sold                       1       116
   Total interest income                         43,587    47,005

 Interest Expense
 Interest on deposits                            13,859    15,936
 Interest on borrowed funds                       8,148     9,099
   Total interest expense                        22,007    25,035

 Net Interest Income                             21,580    21,970
 Provision For Loan Losses                        3,900     1,500

 Net Interest Income After
  Provision For Loan Losses                      17,680    20,470

 Other Income
 Income from trust services                       2,246     2,218
 Service charges and other fees                   3,112     3,099
 Net gain (loss) on sales of securities              48        92
 Origination fees on mortgage loans sold            284       393
 Bank Owned Life Insurance income                   630       630
 Other                                            1,500     1,450
   Total other income                             7,820     7,882

 Other Expenses
 Salaries and employee benefits                  11,023    11,048
 Occupancy expense                                1,911     1,724
 Equipment expense                                1,676     1,695
 Marketing expense                                  597       621
 Professional fees                                  924       776
 Net loss on other real estate owned                389        10
 Other                                            3,341     2,517
   Total other expenses                          19,861    18,391

 Income Before Income Taxes                       5,639     9,961
 Income Tax Expense (Benefit)                     1,274     2,723
 Net Income                                     $ 4,365   $ 7,238
 ----------------------------------------------------------------

 Basic Earnings Per Common Share                $  0.27   $  0.43
 ----------------------------------------------------------------

 Diluted Earnings Per Common Share              $  0.27   $  0.43
 ----------------------------------------------------------------

 Dividends Declared Per Common Share            $  0.36   $  0.36
 ----------------------------------------------------------------

                         MBT FINANCIAL CORP.
                       CONSOLIDATED BALANCE SHEETS


                                         June 30, 2008   December 31,
 Dollars in thousands                     (Unaudited)        2007

 Assets
 Cash and Cash Equivalents
  Cash and due from banks                 $    21,986    $    25,113
   Total cash and cash equivalents             21,986         25,113

 Securities - Held to Maturity                 38,005         44,734
 Securities - Available for Sale              380,723        380,238
 Federal Home Loan Bank stock - at cost        13,086         13,086
 Loans held for sale                              408          1,431
 Loans - Net                                  971,338        980,606
 Accrued interest receivable and other
   assets                                      41,830         36,370
 Bank Owned Life Insurance                     43,139         42,509
 Premises and Equipment - Net                  32,232         32,719
   Total assets                           $ 1,542,747    $ 1,556,806
 -------------------------------------------------------------------

 Liabilities
 Deposits:
  Non-interest bearing                    $   139,052    $   141,115
  Interest-bearing                            926,718        968,865
   Total deposits                           1,065,770      1,109,980

 Federal Home Loan Bank advances              256,500        256,500
 Federal funds purchased                       54,500         13,300
 Repurchase agreements                         30,000         35,000
 Interest payable and other liabilities        14,629         14,579
   Total liabilities                        1,421,399      1,429,359

 Shareholders' Equity
 Common stock (no par value)                       --             --
 Retained Earnings                            128,674        129,917
 Accumulated other comprehensive income        (7,326)        (2,470)
   Total shareholders' equity                 121,348        127,447
   Total liabilities and shareholders'
    equity                                $ 1,542,747    $ 1,556,806
 -------------------------------------------------------------------


            

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