MBT Financial Corp. Announces Preliminary Fourth Quarter 2017 Results, Quarterly and Special Dividends, and Repurchase Authorization

Monroe, Michigan, UNITED STATES


MONROE, Mich., Jan. 25, 2018 (GLOBE NEWSWIRE) -- MBT Financial Corp., (Nasdaq:MBTF), the parent company of Monroe Bank & Trust, reported a preliminary net loss of $144,000 ($0.01 per share), in the fourth quarter of 2017, compared to a profit of $3,578,000 ($0.16 per share, basic and diluted), in the fourth quarter of 2016. The profit for the year ended December 31, 2017 is $10,609,000, compared to $14,501,000 for 2016. The Company recorded Federal income Tax Expense of $5,559,000 in the fourth quarter, which included $4,278,000 to adjust the value of its deferred tax assets following the enactment of the Tax Cuts and Jobs Act of 2017. When adjusting for non-recurring items such as negative loan loss provisions, gains and losses on securities, a life insurance benefit, and an adjustment to the wealth management fee income accrual, the adjusted operating income for 2017 was $19,509,000, an increase of 18.4% compared to $16,472,000 earned in 2016.

In addition, the Company announced that it will pay a quarterly dividend of $0.06 per common share and a special dividend of $0.60 per common share. The dividends will be paid as a single distribution on February 15, 2018 to shareholders of record as of February 8, 2018. This is compared to the quarterly dividend of $0.05 and special dividend of $0.70 paid in the same quarter last year.

The Company also announced that its Board of Directors authorized the repurchase of up to 2 million shares of its common stock. This represents 8.7% of the shares currently outstanding. Repurchases may be conducted from time to time in the open market or through privately negotiated transactions. The authorization commences February 1, 2018 and expires January 31, 2020. The authorization replaces a two year authorization to repurchase up to 2 million shares that is set to expire on January 31, 2018. During that authorization, 192,080 shares were repurchased.

The Net Interest Income for the fourth quarter of 2017 increased $799,000, or 8.3% as the net interest margin improved from 3.14% in the fourth quarter of 2016 to 3.43% in the fourth quarter of 2017 due to higher interest rates and growth in the loan portfolio.

The provision for loan losses was a negative expense of $500,000 for the fourth quarter of 2017, an increase of $500,000 compared to last year’s fourth quarter, when we recorded a negative expense of $1,000,000. Asset quality and historical loss ratios improved, but the growth in the loan portfolio reduced the size of the negative provision expense required to adjust the Allowance for Loan Losses. Total Loans increased $42.4 million, or 6.5% during 2017, while the Allowance for Loan and Lease Losses was reduced from $8.5 million, or 1.30% of loans to a still relatively strong $7.7 million, or 1.10%.

Non-interest income for the fourth quarter of 2017 decreased $148,000, or 3.9% compared to the fourth quarter of 2016. Excluding gains and losses on securities and ORE transactions in both periods and a gain from life insurance proceeds that occurred in the fourth quarter of 2017, the non-interest income increased $46,000, or 1.2%. Non-interest expense decreased $154,000, or 1.7%, as a $532,000 decrease in salaries and benefits was partially offset by increases in equipment expense and professional fees.

Total assets of the company decreased $9.9 million, or 0.7%, compared to December 31, 2016, to $1.35 billion. Capital decreased $8.5 million during the year as the payment of the special and regular dividends exceeded the net income. The ratio of equity to assets decreased from 10.40% at the end of 2016 to 9.84% at the end of 2017. The Bank’s Tier 1 Leverage ratio decreased from 10.75% as of December 31, 2016 to 10.33 % as of December 31, 2017.

H. Douglas Chaffin, President and CEO, commented, “We continue to see solid loan growth, and the improvement in net interest margin combined with well-controlled non-interest expenses contributed to improved core earnings this year. Our new business pipeline remains strong and we expect loan growth to continue in 2018, which should lead to further margin improvement.  Notably, we also expect credit quality to remain strong, as we see nothing that might inhibit our strong quality metrics in the near term.  Our focus on managing our capital has also allowed us to bring more value to our shareholders, through the regular and special dividends and the repurchase authorization we announced today.  We will continue to keep our eyes open for the right opportunities to grow through strategic acquisitions, while remaining disciplined in that regard.  We remain confident in our ability to maintain our position as the premier independent provider of financial services in the communities we serve.”

Conference Call
MBT Financial Corp. will hold a conference call to discuss the Fourth Quarter 2017 results on Friday, January 26, 2018, 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 in the United States by calling toll free (877) 510-3783. The toll free number for callers in Canada is (855) 669-9657 and international callers can access the call at (412) 902-4136. A replay will be available one hour after the conclusion of the call at (877) 344-7529, Conference #10115518. The replay will be available until February 26, 2018 at 9:00 a.m. Eastern. The webcast will be archived on the Company’s web site and available for twelve months following the call.

About the Company:
MBT Financial Corp. (NASDAQ:MBTF), a 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 independently owned community banks in Southeast Michigan.  With over $1.3 billion in assets, MBT is a full-service bank, offering a complete range of business and personal accounts, credit and mortgage options, investment and retirement services and award-winning financial literacy outreach.  MBT employee volunteers contribute between 8,000 to 9,000 hours of community service annually. MBT’s Commercial Lending Group is a top SBA lending partner.  MBT’s Wealth Management Group (“WMG”) is one of the largest and most respected in Michigan, ranking fourth among all Michigan banks for total trust assets.  With offices and ATMs in Monroe, and Wayne Counties, convenient mobile and online banking, a robust online and social media presence and a comprehensive array of products and services, MBT prides itself in offering World Class Banking with a Local Address. Visit MBT’s website at www.mbandt.com.

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 Year to Date
    2017 2017 2017 2017 2016    
(dollars in thousands except per share data) 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr  2017   2016 
                 
EARNINGS              
 Net interest income $  10,373   $  10,231   $  9,864   $  9,595   $  9,574   $  40,063   $  37,623  
 FTE Net interest income $  10,552   $  10,394   $  10,017   $  9,749   $   9,731   $  40,712   $  38,233  
 Provision for loan and lease losses $  (500) $  -    $  -    $  (200) $  (1,000) $   (700) $  (2,200)
 Non interest income $  3,657   $  4,035   $  4,370   $  3,820   $  3,805   $  15,882   $  17,513  
 Non interest expense $  9,115   $  8,950   $  9,008   $  9,062   $  9,269   $  36,135   $  36,598  
 Net income $  (144) $  3,933   $  3,640   $  3,180   $  3,578   $  10,609   $  14,501  
 Basic earnings per share $  (0.01) $  0.17   $  0.16   $  0.14   $  0.16   $  0.46   $   0.64  
 Diluted earnings per share $  (0.01) $  0.17   $  0.16   $  0.14   $  0.16   $  0.46   $  0.63  
 Average shares outstanding   22,884,010    22,871,451    22,865,529    22,821,273    22,738,718   $  22,860,767   $  22,802,325  
 Average diluted shares outstanding  23,044,241    23,040,960    23,006,766    22,961,425    22,905,786   $  23,019,716   $  22,937,193  
                 
PERFORMANCE RATIOS              
 Return on average assets  -0.04%  1.18%  1.11%  0.97%  1.07%  0.80%  1.09%
 Return on average common equity  -0.42%  11.54%  11.14%  9.83%  9.57%  7.94%  10.00%
                 
 Base Margin  3.37%  3.30%  3.25%  3.16%  3.07%  3.27%  3.05%
 FTE Adjustment  0.06%  0.05%  0.05%  0.05%  0.05%  0.05%  0.05%
 Loan Fees  0.00%  0.03%  0.01%  0.00%  0.02%  0.01%  0.01%
 FTE Net Interest Margin  3.43%  3.38%  3.31%  3.21%  3.14%  3.33%  3.11%
                 
 Efficiency ratio  62.80%  62.52%  64.14%  66.43%  68.18%  63.94%  67.83%
 Full-time equivalent employees    288      295      287      287      277      289      284  
                 
CAPITAL              
 Average equity to average assets  10.34%  10.21%  9.95%  9.87%  11.21%  10.09%  10.93%
 Book value per share $  5.79   $  5.94   $  5.87   $  5.67   $  6.20   $  5.79   $  6.20  
 Cash dividend per share $  0.06   $  0.06   $  0.05   $  0.75   $  0.04   $  0.17   $  0.64  
                 
ASSET QUALITY              
 Loan Charge-Offs $  14   $   306   $  396   $  112   $  522   $  828   $  1,463  
 Loan Recoveries $  170   $  179   $  199   $  188   $  575   $  736   $  1,225  
 Net Charge-Offs $  (156) $  127   $  197   $  (76) $  (53) $  92   $  238  
                 
 Allowance for loan and lease losses $  7,666   $  8,010   $   8,137   $  8,334   $  8,458   $  7,666   $  8,458  
                 
 Nonaccrual Loans $  3,658   $  3,050   $  4,143   $  5,001   $  4,656   $  3,658   $  4,656  
 Loans 90 days past due $  3   $  5   $  3   $  9   $  10   $  3   $  10  
 Restructured loans $  9,625   $  9,859   $  10,103   $   10,318   $  14,161   $  9,625   $  14,161  
  Total non performing loans $  13,286   $  12,914   $  14,249   $  15,328   $  18,827   $  13,286   $  18,827  
 Other real estate owned & other assets $  1,452   $  1,686   $  1,542   $  1,400   $  1,634   $  1,452   $  1,634  
  Total non performing assets $  14,738   $  14,600   $  15,791   $  16,728   $  20,461   $   14,738   $  20,461  
                 
 Classified Loans $  8,273   $  9,206   $  10,599   $  14,030   $  14,971   $  8,273   $  14,971  
 Other real estate owned & other assets $  1,452   $  1,686   $  1,542   $  1,400   $  1,634   $  1,452   $  1,634  
  Total classified assets $  9,725   $  10,892   $  12,141   $  15,430   $  16,605   $  9,725   $  16,605  
                 
 Net loan charge-offs to average loans  -0.09%  0.07%  0.12%  -0.05%  -0.03%  0.01%  0.04%
 Allowance for loan losses to total loans  1.10%  1.15%  1.19%  1.26%  1.30%  1.10%  1.30%
 Non performing loans to gross loans  1.91%  1.86%  2.08%  2.31%  2.88%  1.91%  2.88%
 Non performing assets to total assets  1.09%  1.08%  1.19%  1.24%  1.51%  1.09%  1.51%
 Classified assets to total capital  6.64%  7.59%  8.63%  11.16%  10.95%  6.64%  10.95%
 Allowance to non performing loans  57.70%  62.03%  57.11%  54.37%  44.92%  57.70%  44.92%
                 
END OF PERIOD BALANCES              
 Loans and leases $  695,325   $  693,866   $  683,648   $  663,449   $  652,948   $  695,325   $  652,948  
 Total earning assets $  1,229,425   $  1,220,844   $  1,201,903   $  1,232,350   $  1,239,439   $  1,229,425   $  1,239,439  
 Total assets $  1,347,420   $  1,347,352   $  1,326,392   $  1,346,554   $  1,357,283   $  1,347,420   $  1,357,283  
 Deposits $  1,198,164   $  1,195,335   $  1,177,069   $  1,203,072   $  1,199,717   $  1,198,164   $  1,199,717  
 Interest Bearing Liabilities $  898,326   $  897,408   $  886,474   $  918,126   $  920,716   $  898,326   $  920,716  
 Shareholders' equity $  132,658   $  135,969   $  134,222   $  129,553   $  141,114   $  132,658   $  141,114  
 Tier 1 Capital (Bank) $  138,819   $  135,470   $  132,565   $  129,935   $  143,123   $  138,819   $  143,123  
 Total Shares Outstanding    22,907,844      22,875,505      22,870,082      22,860,794      22,777,882      22,907,844   $  22,777,882  
                 
AVERAGE BALANCES              
 Loans and leases $  693,586   $  686,259   $  672,849   $  656,550   $  654,077   $  677,437   $  638,006  
 Total earning assets $  1,220,426   $  1,220,620   $  1,215,360   $  1,229,947   $  1,230,134   $  1,221,561   $  1,227,692  
 Total assets $  1,324,847   $  1,324,723   $  1,316,081   $  1,329,128   $  1,326,623   $  1,323,686   $  1,326,710  
 Deposits $  1,184,592   $  1,187,768   $  1,183,645   $  1,194,296   $  1,174,024   $  1,187,550   $  1,172,839  
 Interest Bearing Liabilities $  884,979   $   895,376   $  904,581   $  917,125   $  891,510   $  900,415   $  910,818  
 Shareholders' equity $  136,963   $  135,188   $  131,015   $  131,171   $  148,765   $  133,605   $  145,030  
                              


MBT FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
           
    Quarter Ended December 31, Year Ended December 31,
Dollars in thousands (except per share data) 2017   2016   2017   2016 
Interest Income       
Interest and fees on loans$  8,132   $  7,513   $  31,300   $  29,265  
Interest on investment securities-       
 Tax-exempt   356      317      1,299      1,241  
 Taxable   2,200       2,077      8,707      8,791  
Interest on balances due from banks   102      112      494      562  
   Total interest income   10,790       10,019      41,800      39,859  
           
Interest Expense       
Interest on deposits   414      445      1,731      1,928  
Interest on borrowed funds    3      -       6      308  
   Total interest expense   417      445      1,737      2,236  
           
Net Interest Income    10,373      9,574      40,063      37,623  
Provision For Loan Losses   (500)    (1,000)    (700)    (2,200)
           
Net Interest Income After       
Provision For Loan Losses   10,873      10,574      40,763      39,823  
           
Other Income       
Income from wealth management services   1,187      1,106      5,017       4,453  
Service charges and other fees   1,050      1,079      4,186      4,221  
Debit Card income   730      701      2,877      2,831  
Net gain (loss) on sales of securities   (773)    (8)    (546)    2,151  
Net gain (loss) on other real estate owned   67      (24)    (22)     (85)
Origination fees on mortgage loans sold   68      125      329      540  
Bank Owned Life Insurance income   848      356      1,978       1,425  
Other    480      470      2,063      1,977  
   Total other income   3,657      3,805      15,882      17,513  
           
Other Expenses       
Salaries and employee benefits   5,380      5,912      21,400      22,443  
Occupancy expense   701      728      2,825      2,730  
Equipment expense   855      738      3,126      2,879  
Marketing expense   361      319      1,322      1,144  
Professional fees   560      471      2,339      2,138  
EFT/ATM expense   259      241      1,022      1,022  
Other real estate owned expense   22       19      117      148  
FDIC deposit insurance assessment   107      28      428      567  
Bonding and other insurance expense   119       123      486      577  
Telephone expense   83      101      385      413  
Other    668      589      2,685      2,537  
   Total other expenses   9,115      9,269      36,135      36,598  
           
Profit Before Income Taxes   5,415      5,110      20,510       20,738  
Income Tax Expense   5,559      1,532      9,901      6,237  
Net Profit$  (144) $  3,578   $  10,609   $  14,501  
           
Basic Earnings Per Common Share$  (0.01) $  0.16   $  0.46   $  0.64  
           
Diluted Earnings Per Common Share$  (0.01) $  0.16   $  0.46   $  0.63  
           
Dividends Declared Per Common Share$  0.06   $  0.04   $  0.92   $  0.64  
                


MBT FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
       
       
    (Unaudited)  
Dollars in thousandsDecember 31, 2017 December 31, 2016
Assets    
Cash and Cash Equivalents   
 Cash and due from banks   
  Non-interest bearing$  18,233   $  18,183  
  Interest bearing   34,777       34,589  
  Total cash and cash equivalents   53,010      52,772  
       
Interest Bearing Time Deposits in Other Banks   15,196      18,946  
Securities - Held to Maturity   37,163      40,741  
Securities - Available for Sale   442,816      488,067  
Federal Home Loan Bank stock - at cost    4,148      4,148  
Loans held for sale   346      611  
       
Loans    694,979      652,337  
Allowance for Loan Losses   (7,666)    (8,458)
Loans - Net   687,313      643,879  
       
Accrued interest receivable and other assets   20,463       24,901  
Other Real Estate Owned   1,412      1,634  
Bank Owned Life Insurance   58,153      54,415  
Premises and Equipment - Net    27,400      27,169  
  Total assets$  1,347,420   $  1,357,283  
       
Liabilities   
Deposits:   
 Non-interest bearing$  299,838   $  279,001  
 Interest-bearing   898,326      920,716  
  Total deposits   1,198,164      1,199,717  
       
Accrued interest payable and other liabilities    16,598      16,452  
  Total liabilities   1,214,762      1,216,169  
       
Shareholders' Equity   
Common stock (no par value)   22,840       22,562  
Retained Earnings   117,524      126,079  
Unearned Compensation   -       (4)
Accumulated other comprehensive loss    (7,706)    (7,523)
  Total shareholders' equity   132,658      141,114  
  Total liabilities and shareholders' equity$  1,347,420   $  1,357,283  
          


FOR FURTHER INFORMATION:
H. Douglas Chaffin
Chief Executive Officer
(734) 384-8123
doug.chaffin@mbandt.com
     John L. Skibski
Chief Financial Officer
(734) 242-1879
john.skibski@mbandt.com
     Julian J. Broggio
Director of Marketing
(734) 240-2341
julian.broggio@mbandt.com