Middlefield Banc Corp. Reports 2021 Nine Month Financial Results

Middlefield, Ohio, UNITED STATES


MIDDLEFIELD, Ohio, Oct. 18, 2021 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the three and nine months ended September 30, 2021.

2021 Nine Month Financial Highlights (on a year-over-year basis unless noted):

  • Net income of $13.8 million, or $2.19 per diluted share driven by record third quarter earnings of $5.2 million, or a record $0.85 per diluted share
  • Net interest margin improved by 23 basis points to 3.79%, compared to 3.56%
  • Total noninterest income was up 29.5% to $5.7 million
  • Pre-tax, pre-provision(1) income increased 22.0% to $17.7 million
  • Return on average assets increased to 1.34% from 0.61%
  • Return on average equity increased to 12.58% from 5.48%
  • Return on average tangible common equity(1) increased to 14.20% from 6.22%
  • Efficiency ratio improved to 56.42%, compared to 58.59%
  • Year-to-date net charge-offs declined 96.0% to $125,000
  • Middlefield has repurchased 346,103 shares of stock year-to-date, including 165,058 shares repurchased during the 2021 third quarter

“As we celebrate our 120th anniversary, I am extremely pleased with the strong financial results we are achieving,” stated Thomas G. Caldwell, President and Chief Executive Officer. “We continue generating strong profitability as higher net interest margin, favorable asset quality and stable noninterest income successfully offset challenging loan growth and higher noninterest expense.”

“We also continue to allocate capital to our share repurchase program. Year-to-date, we have repurchased 346,103 shares of our common stock at an average price of $23.47 per share, which includes 165,058 shares repurchased in the third quarter at an average price of $23.82 per share. Shares repurchased this year have been at an average price of 109.7% to tangible book value of $21.39 at September 30, 2021, which we believe is a tremendous value and offers a significant opportunity for our shareholders to increase their ownership in the Company,” continued Mr. Caldwell.

“While economic and interest rate uncertainty remains, we are focused on the items under our control. We are dedicated to supporting our communities, managing risk, and looking for new opportunities to drive interest and noninterest income. These are many of the same principles that have made Middlefield successful over the past 120 years and we are committed to continue creating sustainable value for our shareholders,” concluded Mr. Caldwell.

Income Statement
Net interest income for the nine-month period ended September 30, 2021, increased 13.0% to $36.3 million, compared to $32.1 million for the same period last year. Year-to-date, the net interest margin was 3.79%, compared to 3.56% for the same period last year. Net interest income for the 2021 third quarter was $12.5 million, compared to $11.4 million for the 2020 third quarter. The 10.0% increase in net interest income for the 2021 third quarter was largely a result of a 55.7% reduction in interest expense. The net interest margin for the 2021 third quarter was 3.91%, compared to 3.57% for the same period of 2020.

For the 2021 nine-month period, noninterest income increased 29.5% to $5.7 million, compared to $4.4 million for the same period last year. Noninterest income was $1.8 million for both the 2021 and 2020 third quarters.

For the 2021 nine months, noninterest expense increased 10.3% to $24.2 million, compared to $22.0 million for the same period last year. Operating costs in the 2021 third quarter increased 13.0% to $7.9 million from $7.0 million for the 2020 third quarter.

Net income for the 2021 nine-month period ended September 30, 2021, was a record $13.8 million, or a record $2.19 per diluted share, compared to $5.9 million, or $0.92 per diluted share for the same period last year. Net income for the 2021 third quarter ended September 30, 2021, was a quarterly record of $5.2 million, or $0.85 per diluted share, compared to $1.9 million, or $0.29 per diluted share for the same period last year.

Balance Sheet
Total assets at September 30, 2021, increased slightly to approximately $1.37 billion from $1.36 billion at September 30, 2020. Net loans at September 30, 2021, decreased 10.5% to $996.1 million, compared to $1.11 billion at September 30, 2020 as PPP forgiveness increased. Year-to-date, Middlefield has helped customers receive $129.5 million of forgiveness payments under the terms of the program, including processing $36.0 million of forgiveness payments during the third quarter of 2021. The balance of PPP loans outstanding at September 30, 2021, was $54.2 million.  

Total deposits at September 30, 2021, were approximately $1.20 billion, compared to $1.19 billion at September 30, 2020. The 0.6% increase in deposits was primarily due to increases in interest-bearing, savings, and non-interest-bearing accounts, partially offset by decreased money market and time-based accounts. The investment portfolio, which is entirely classified as available for sale, was $163.1 million September 30, 2021, compared with $113.0 million at September 30, 2020.

Donald L. Stacy, Chief Financial Officer stated, “We ended the third quarter with one of the strongest balance sheets in our 120-year history. In addition, asset quality remains strong and is benefitting from stable economic trends within our Ohio markets, as well as our focus on prudently managing risk. The allowance for loan losses to total loans now stands at 1.41%, compared to 1.34% at June 30, 2021, and 1.01% at September 30, 2020. In addition, at September 30, 2021, we only had three loans in deferral status primarily within the hospitality industry representing a balance of $9.7 million,” concluded Mr. Stacy.

Stockholders’ Equity and Dividends
At September 30, 2021, shareholders’ equity increased 2.8% to $146.1 million compared to $142.1 million at September 30, 2020. On a per share basis, shareholders’ equity at September 30, 2021, was $24.13 compared to $22.27 at the same period last year.

Tangible stockholders’ equity(1) increased 3.5% to $129.5 million for the 2021 third quarter, compared to $125.2 million at September 30, 2020. On a per-share basis, tangible stockholders’ equity(1) was $21.39 at September 30, 2021, compared to $19.63 at September 30, 2020.

For the nine-month period ended September 30, 2021, the Company declared cash dividends of $0.48 per share totaling $3.0 million, compared to $0.45 per share or $2.9 million for the same period last year.

At September 30, 2021, the Company had an equity-to-assets leverage ratio of 10.69%, compared to 10.41% at September 30, 2020. The year-over-year increase in the Company’s equity-to-assets leverage ratio occurred even with the $8.1 million year-to-date investment in Middlefield’s share repurchase program.

Asset Quality
There was no provision for loan losses for the 2021 third quarter versus a $4.0 million provision for loan losses for the same period last year. The year-over-year decline in the provision for loan losses was partially due to strong asset quality and last year’s prudent build in the Company’s allowance for loan losses associated with the potential economic impacts caused by the COVID-19 pandemic. The provision for loan losses for the 2021 nine-month period was $900,000 versus $7.7 million for the same period last year.

Net recoveries of $34,000, or -0.01% of average loans, annualized, during the 2021 third quarter, compared to net charge-offs of $2.9 million, or 1.01% of average loans, annualized, at September 30, 2020. Year-to-date net charge-offs were $125,000, or 0.02% of average loans, annualized, compared to net charge-offs of $3.1 million, or 0.39% of average loans, annualized for the nine-months ended September 30, 2020.

Nonperforming assets at September 30, 2021, were $13.9 million, compared to $14.1 million at September 30, 2020. Nonperforming loans at September 30, 2021, were $6.8 million (excluding $9.7 million of loans currently on payment deferral), a 1.7% increase from the same period last year, but down 12.3% from the 2021 second quarter. The allowance for loan losses at September 30, 2021, stood at $14.2 million, or 1.41% of total loans, compared to $11.4 million, or 1.01% of total loans at September 30, 2020.

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 $1.37 billion at September 30, 2021. The bank operates 16 full-service banking centers and an LPL Financial® brokerage office serving Beachwood, Chardon, Cortland, Dublin, Garrettsville, Mantua, 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

(1) 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 that are 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 tables following Consolidated Financial Highlights below.

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 a number of 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) the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions; (8) changes in the securities markets; or (9) 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:
Thomas G. Caldwell Andrew M. Berger
President/Chief Executive Officer Managing Director
Middlefield Banc Corp. SM Berger & Company, Inc.
(440) 632-1666 Ext. 3200 (216) 464-6400
tcaldwell@middlefieldbank.com  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) 2021  2021  2021  2020  2020
ASSETS              
Cash and due from banks$113,177  $82,435  $93,037  $92,874  $46,097 
Federal funds sold 19,174   10,034   7,436   19,543   6,884 
Cash and cash equivalents 132,351   92,469   100,473   112,417   52,981 
Equity securities, at fair value 833   730   690   609   553 
Investment securities available for sale, at fair value 163,057   150,850   123,218   114,360   112,968 
Loans held for sale 676   790   1,260   878   10,457 
Loans:              
Commercial real estate:              
Owner occupied 110,883   109,777   104,379   103,121   107,342 
Non-owner occupied 310,222   304,324   304,623   309,424   310,512 
Multifamily 30,762   34,926   39,015   39,562   39,622 
Residential real estate 232,020   228,102   228,052   233,995   222,237 
Commercial and industrial 163,052   200,558   242,651   232,044   258,313 
Home equity lines of credit 105,450   107,685   111,474   112,543   115,223 
Construction and other 49,378   62,229   64,960   63,573   60,613 
Consumer installment 8,515   8,694   9,046   9,823   10,534 
Total loans 1,010,282   1,056,295   1,104,200   1,104,085   1,124,396 
Less allowance for loan and lease losses 14,234   14,200   14,122   13,459   11,359 
Net loans 996,048   1,042,095   1,090,078   1,090,626   1,113,037 
Premises and equipment, net 17,507   17,680   18,002   18,333   18,633 
Goodwill 15,071   15,071   15,071   15,071   15,071 
Core deposit intangibles 1,484   1,564   1,644   1,724   1,807 
Bank-owned life insurance 16,954   16,846   16,740   16,938   16,832 
Other real estate owned 7,090   7,090   7,372   7,387   7,391 
Accrued interest receivable and other assets 14,794   15,033   13,545   13,636   15,079 
TOTAL ASSETS$1,365,865  $1,360,218  $1,388,093  $1,391,979  $1,364,809 
               
  September 30,   June
30,
  March
31,
  December 31,   September 30,
  2021  2021  2021  2020  2020
LIABILITIES              
Deposits:              
Noninterest-bearing demand$316,770  $326,665  $317,224  $291,347  $268,838 
Interest-bearing demand 237,576   207,725   215,684   195,722   179,080 
Money market 178,423   183,453   187,204   198,493   184,936 
Savings 256,114   252,171   259,973   243,888   231,696 
Time 211,674   225,271   245,342   295,750   329,413 
Total deposits 1,200,557   1,195,285   1,225,427   1,225,200   1,193,963 
               
Other borrowings 12,966   13,031   13,095   17,038   17,100 
Accrued interest payable and other liabilities 6,287   5,858   4,901   5,931   11,690 
TOTAL LIABILITIES 1,219,810   1,214,174   1,243,423   1,248,169   1,222,753 
               
STOCKHOLDERS' EQUITY              
Common stock, no par value; 10,000,000 shares authorized, 7,329,548 shares issued, 6,054,083 shares outstanding as of September 30, 202187,131   87,131   87,073   86,886   86,871 
Retained earnings 80,376   76,150   72,729   69,578   68,046 
Accumulated other comprehensive income 3,610   3,893   2,917   4,284   4,077 
Treasury stock, at cost; 1,275,465 shares as of September 30, 2021 (25,062)  (21,130)  (18,049)  (16,938)  (16,938)
TOTAL STOCKHOLDERS' EQUITY 146,055   146,044   144,670   143,810   142,056 
               
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$1,365,865  $1,360,218  $1,388,093  $1,391,979  $1,364,809 
               


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 2021  2021  2021  2020  2020  2021  2020
                     
INTEREST AND DIVIDEND INCOME                    
Interest and fees on loans$12,258 $11,885 $12,167 $12,041  $12,603  $36,310 $36,962 
Interest-earning deposits in other institutions 30  12  18  9   8   60  109 
Federal funds sold 1  1  -  1   -   2  21 
Investment securities:                    
Taxable interest 461  410  370  297   249   1,241  612 
Tax-exempt interest 673  602  558  591   618   1,833  1,881 
Dividends on stock 24  26  29  28   29   79  86 
Total interest and dividend income 13,447  12,936  13,142  12,967   13,507   39,525  39,671 
INTEREST EXPENSE                    
Deposits 915  1,010  1,205  1,655   2,106   3,130  7,307 
Short-term borrowings -  -  -  (2)  14   -  81 
Other borrowings 37  39  39  43   28   115  166 
Total interest expense 952  1,049  1,244  1,696   2,148   3,245  7,554 
                     
NET INTEREST INCOME 12,495  11,887  11,898  11,271   11,359   36,280  32,117 
                     
Provision for loan losses -  200  700  2,100   4,000   900  7,740 
                     
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 12,495  11,687  11,198  9,171   7,359   35,380  24,377 
NONINTEREST INCOME                    
Service charges on deposit accounts 876  856  787  729   691   2,519  1,810 
Gain (loss) on equity securities 102  40  81  56   (28)  223  (157)
Earnings on bank-owned life insurance 108  106  226  106   109   440  321 
Gains on sale of loans 309  221  592  332   660   1,122  1,155 
Other income 426  409  532  387   379   1,367  1,251 
Total noninterest income 1,821  1,632  2,218  1,610   1,811   5,671  4,380 
                     
NONINTEREST EXPENSE                    
Salaries and employee benefits 4,488  4,321  4,254  4,458   3,657   13,063  11,197 
Occupancy expense 457  549  600  628   497   1,606  1,530 
Equipment expense 333  313  357  365   363   1,003  943 
Data processing costs 736  698  786  617   683   2,220  2,033 
Ohio state franchise tax 287  286  286  251   282   859  831 
Federal deposit insurance expense 150  150  144  103   123   444  320 
Professional fees 136  323  419  352   289   878  1,007 
Net loss (gain) on other real estate owned 9  22  46  (172)  (184)  77  (257)
Advertising expense 222  221  221  55   217   664  643 
Software amortization expense 88  74  80  66   70   242  285 
Core deposit intangible amortization 81  80  80  83   83   241  249 
Other expense 951  889  1,080  1,019   942   2,920  3,182 
Total noninterest expense 7,938  7,926  8,353  7,825   7,022   24,217  21,963 
                     
Income before income taxes 6,378  5,393  5,063  2,956   2,148   16,834  6,794 
Income taxes 1,174  968  896  467   295   3,038  934 
                     
NET INCOME$5,204 $4,425 $4,167 $2,489  $1,853  $13,796 $5,860 
                     
PTPP (1)$6,378 $5,593 $5,763 $5,056  $6,148  $17,734 $14,534 
                     
(1) The pre-tax pre-provision (PTPP) is the income before income taxes before provision for loan losses considerations, for reconciliation of non-GAAP measures.      
 


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,
  2021  2021  2021  2020  2020  2021  2020
Per common share data                    
Net income per common share - basic$0.85  $0.70  $0.65  $0.39  $0.29  $2.20  $0.92 
Net income per common share - diluted$0.85  $0.70  $0.65  $0.39  $0.29  $2.19  $0.92 
Dividends declared per share$0.16  $0.16  $0.16  $0.15  $0.15  $0.48  $0.45 
Book value per share (period end)$24.13  $23.50  $22.80  $22.54  $22.27  $24.13  $22.27 
Tangible book value per share (period end) (2) (3)$21.39  $20.82  $20.17  $19.91  $19.63  $21.39  $19.63 
Dividends declared$978  $1,004  $1,016  $957  $957  $2,998  $2,877 
Dividend yield 2.66%  2.72%  3.10%  2.65%  3.09%  2.69%  3.11%
Dividend payout ratio 18.79%  22.69%  24.38%  38.45%  51.65%  21.73%  49.10%
Average shares outstanding - basic 6,136,648   6,297,071   6,364,132   6,378,706   6,376,291   6,265,803   6,387,581 
Average shares outstanding - diluted 6,157,181   6,312,230   6,378,493   6,397,681   6,385,765   6,287,556   6,397,674 
Period ending shares outstanding 6,054,083   6,215,511   6,344,657   6,379,323   6,378,110   6,054,083   6,378,110 
                     
Selected ratios                    
Return on average assets 1.51%  1.30%  1.22%  0.72%  0.54%  1.34%  0.61%
Return on average equity 13.95%  12.10%  11.65%  6.76%  5.11%  12.58%  5.48%
Return on average tangible common equity (2) (4) 15.71%  13.65%  13.17%  7.64%  5.79%  14.20%  6.22%
Efficiency (1) 54.15%  57.28%  57.91%  59.29%  51.96%  56.42%  58.59%
Equity to assets at period end 10.69%  10.74%  10.42%  10.33%  10.41%  10.69%  10.41%
Noninterest expense to average assets 0.58%  0.58%  0.60%  0.57%  0.52%  1.76%  1.70%
                     
(1) 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  
(2) See reconciliation of non-GAAP measures below                    
(3) Calculated by dividing tangible common equity by shares outstanding                  
(4) Calculated by dividing annualized net income for each period by average tangible common equity               
                     


MIDDLEFIELD BANC CORP.                    
Consolidated Selected Financial Highlights                    
(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,
Yields 2021   2021   2021   2020   2020   2021   2020 
Interest-earning assets:                    
Loans receivable (2) 4.74%  4.43%  4.48%  4.28%  4.48%  4.54%  4.64%
Investment securities (2) 3.37%  3.47%  3.75%  3.65%  3.66%  3.51%  3.68%
Interest-earning deposits with other banks 0.21%  0.18%  0.20%  0.21%  0.27%  0.20%  0.56%
Total interest-earning assets 4.20%  4.05%  4.11%  4.00%  4.23%  4.12%  4.38%
Deposits:                    
Interest-bearing demand deposits 0.12%  0.12%  0.16%  0.21%  0.32%  0.13%  0.36%
Money market deposits 0.46%  0.46%  0.47%  0.53%  0.70%  0.47%  1.00%
Savings deposits 0.06%  0.06%  0.07%  0.11%  0.20%  0.06%  0.29%
Certificates of deposit 1.08%  1.19%  1.28%  1.56%  1.77%  1.19%  1.97%
Total interest-bearing deposits 0.41%  0.46%  0.53%  0.70%  0.93%  0.47%  1.14%
Non-Deposit Funding:                    
Borrowings 1.13%  1.18%  1.10%  0.95%  0.45%  1.14%  0.73%
Total interest-bearing liabilities 0.42%  0.47%  0.54%  0.71%  0.91%  0.48%  1.12%
Cost of deposits 0.30%  0.34%  0.40%  0.54%  0.72%  0.35%  0.89%
Cost of funds 0.31%  0.35%  0.41%  0.55%  0.71%  0.35%  0.88%
Net interest margin (1) 3.91%  3.72%  3.73%  3.49%  3.57%  3.79%  3.56%
                     
(1) Net interest margin represents net interest income as a percentage of average interest-earning assets.               
(2) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were determined using an effective tax rate of 21%.         
                     
  For the Three Months Ended      
  September 30,   June
30,
  March
31,
  December 31,   September 30,      
Asset quality data 2021   2021   2021   2020   2020       
(Dollar amounts in thousands, unaudited)                    
Nonperforming loans (1)$6,806  $7,760  $8,958  $7,858  $6,690       
Other real estate owned 7,090   7,090   7,372   7,387   7,391       
Nonperforming assets$13,896  $14,850  $16,330  $15,245  $14,081       
                     
Allowance for loan losses$14,234 $14,200 $14,122 $13,459 $11,359      
Allowance for loan losses/total loans 1.41%  1.34%  1.28%  1.22%  1.01%      
Net charge-offs:                    
Quarter-to-date$(34) $122  $37  $0  $2,851       
Year-to-date 125   159   37   3,149   3,149       
Net charge-offs to average loans, annualized:                    
Quarter-to-date -0.01%  0.05%  0.01%  0.00%  1.01%      
Year-to-date 0.02%  0.03%  0.01%  0.29%  0.39%      
                     
Nonperforming loans/total loans 0.67%  0.73%  0.81%  0.71%  0.59%      
Allowance for loan losses/nonperforming loans 209.14%  182.99%  157.65%  171.28%  169.79%      
Nonperforming assets/total assets 1.02%  1.09%  1.18%  1.10%  1.03%      
 
(1) Nonperforming loans exclude troubled debt restructurings that are performing in accordance with their terms over a prescribed period of time.         
                     


Reconciliation of Common Stockholders' Equity to Tangible Common Equity For the Three Months Ended  For the Nine Months Ended
(Dollar amounts in thousands, unaudited) September 30,   June
30,
  March
31,
  December 31,   September 30,  September 30,   September 30,
  2021  2021  2021  2020  2020  2021  2020
                     
Stockholders' Equity$146,055  $146,044  $144,670  $143,810  $142,056  $146,055  $142,056 
Less Goodwill and other intangibles 16,555   16,635   16,715   16,795   16,878   16,555   16,878 
Tangible Common Equity$129,500  $129,409  $127,955  $127,015  $125,178  $129,500  $125,178 
                     
Shares outstanding 6,054,083   6,215,511   6,344,657   6,379,323   6,378,110   6,054,083   6,378,110 
Tangible book value per share$21.39  $20.82  $20.17  $19.91  $19.63  $21.39  $19.63 
                     
                     
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,
  2021  2021  2021  2020  2020  2021  2020
                     
Average Stockholders' Equity$148,048  $146,719  $145,065  $146,374  $144,167  $146,611  $142,949 
Less Average Goodwill and other intangibles 16,594   16,674   16,754   16,836   16,919   16,674   17,002 
Average Tangible Common Equity$131,454  $130,045  $128,311  $129,538  $127,248  $129,937  $125,947 
                     
Net income$5,204  $4,425  $4,167  $2,489  $1,853  $13,796  $5,860 
Return on average tangible common equity (annualized) 15.71%  13.65%  13.17%  7.64%  5.79%  14.20%  6.22%
                     
                     
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,
  2021  2021  2021  2020  2020  2021  2020
                     
Net income$5,204  $4,425  $4,167  $2,489  $1,853  $13,796  $5,860 
Add Income Taxes 1,174   968   896   467   295   3,038   934 
Add Provision for loan losses -   200   700   2,100   4,000   900   7,740 
PTPP$6,378  $5,593  $5,763  $5,056  $6,148  $17,734  $14,534 
                     


MIDDLEFIELD BANC CORP.                 
Average Balance Sheets                 
(Dollar amounts in thousands, unaudited)                 
  For the Three Months Ended
  September 30,   September 30,
  2021
  2020
  Average     Average  Average     Average
  Balance  Interest  Yield/Cost  Balance  Interest  Yield/Cost
Interest-earning assets:                 
Loans receivable (3) $1,027,935  $12,258  4.74%  $1,121,763  $12,603  4.48%
Investment securities (3)  154,718   1,134  3.37%   111,994   867  3.66%
Interest-earning deposits with other banks (4)  105,910   55  0.21%   53,826   37  0.27%
Total interest-earning assets  1,288,563   13,447  4.20%   1,287,583   13,507  4.23%
Noninterest-earning assets  82,952         66,836      
Total assets $1,371,515        $1,354,419      
Interest-bearing liabilities:                 
Interest-bearing demand deposits $225,264  $67  0.12%  $149,048  $120  0.32%
Money market deposits  182,831   214  0.46%   176,136   312  0.70%
Savings deposits  253,960   38  0.06%   223,507   113  0.20%
Certificates of deposit  218,323   596  1.08%   349,981   1,561  1.77%
Short-term borrowings  -   -  0.00%   19,740   14  0.28%
Other borrowings  12,999   37  1.13%   17,130   28  0.65%
Total interest-bearing liabilities  893,377   952  0.42%   935,542   2,148  0.91%
Noninterest-bearing liabilities:                 
Noninterest-bearing demand deposits  323,726         270,868      
Other liabilities  6,364         1,756      
Stockholders' equity  148,048         146,253      
Total liabilities and stockholders' equity $1,371,515        $1,354,419      
Net interest income    $12,495        $11,359   
Interest rate spread (1)       3.78%        3.32%
Net interest margin (2)       3.91%        3.57%
Ratio of average interest-earning assets to average interest-bearing liabilities       144.24%        137.63%
                  
(1) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.      
(2) Net interest margin represents net interest income as a percentage of average interest-earning assets.            
(3) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $195 and $186 for the three months ended September 30, 2021 and 2020, respectively
(4) Includes dividends received on restricted stock.                 
                  
  For the Three Months Ended
  September 30,   June 30,
  2021  2021
  Average     Average  Average     Average
  Balance  Interest  Yield/Cost  Balance  Interest  Yield/Cost
Interest-earning assets:                 
Loans receivable (3) $1,027,935  $12,258  4.74%  $1,078,866  $11,885  4.43%
Investment securities (3)  154,718   1,134  3.37%   135,338   1,012  3.47%
Interest-earning deposits with other banks (4)  105,910   55  0.21%   85,245   39  0.18%
Total interest-earning assets  1,288,563   13,447  4.20%   1,299,449   12,936  4.05%
Noninterest-earning assets  82,952         70,692      
Total assets $1,371,515        $1,370,141      
Interest-bearing liabilities:                 
Interest-bearing demand deposits $225,264  $67  0.12%  $207,080  $64  0.12%
Money market deposits  182,831   214  0.46%   185,728   212  0.46%
Savings deposits  253,960   38  0.06%   253,612   38  0.06%
Certificates of deposit  218,323   596  1.08%   233,930   696  1.19%
Short-term borrowings  -   -  0.00%   227   -  0.00%
Other borrowings  12,999   37  1.13%   13,062   39  1.20%
Total interest-bearing liabilities  893,377   952  0.42%   893,639   1,049  0.47%
Noninterest-bearing liabilities:                 
Noninterest-bearing demand deposits  323,726         323,590      
Other liabilities  6,364         6,193      
Stockholders' equity  148,048         146,719      
Total liabilities and stockholders' equity $1,371,515        $1,370,141      
Net interest income    $12,495        $11,887   
Interest rate spread (1)       3.78%        3.58%
Net interest margin (2)       3.91%        3.72%
Ratio of average interest-earning assets to average interest-bearing liabilities       144.24%        145.41%
                  
(1) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.      
(2) Net interest margin represents net interest income as a percentage of average interest-earning assets.            
(3) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $195 and $179 for the three months ended September 30, 2021, and June 30, 2021, respectively.
(4) Includes dividends received on restricted stock.                 
                  
  For the Nine Months Ended
  September 30,   September 30,
  2021  2020
  Average     Average  Average     Average
  Balance  Interest  Yield/Cost  Balance  Interest  Yield/Cost
Interest-earning assets:                 
Loans receivable (3) $1,070,058  $36,310  4.54%  $1,065,964  $36,962  4.64%
Investment securities (3)  135,522   3,074  3.51%   108,551   2,493  3.68%
Interest-earning deposits with other banks (4)  94,955   141  0.20%   51,361   216  0.56%
Total interest-earning assets  1,300,535   39,525  4.12%   1,225,876   39,671  4.38%
Noninterest-earning assets  74,883         64,938      
Total assets $1,375,418        $1,290,814      
Interest-bearing liabilities:                 
Interest-bearing demand deposits $211,797  $209  0.13%  $130,886  $349  0.36%
Money market deposits  187,945   655  0.47%   166,193   1,246  1.00%
Savings deposits  254,574   123  0.06%   201,871   443  0.29%
Certificates of deposit  240,582   2,143  1.19%   358,048   5,269  1.97%
Short-term borrowings  113   -  0.00%   30,174   81  0.36%
Other borrowings  13,440   115  1.14%   15,149   166  1.46%
Total interest-bearing liabilities  908,451   3,245  0.48%   902,321   7,554  1.12%
Noninterest-bearing liabilities:                 
Noninterest-bearing demand deposits  314,172         242,951      
Other liabilities  6,184         2,593      
Stockholders' equity  146,611         142,949      
Total liabilities and stockholders' equity $1,375,418        $1,290,814      
Net interest income    $36,280        $32,117   
Interest rate spread (1)       3.64%        3.26%
Net interest margin (2)       3.79%        3.56%
Ratio of average interest-earning assets to average interest-bearing liabilities       143.16%        135.86%
                  
(1) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.      
(2) Net interest margin represents net interest income as a percentage of average interest-earning assets.            
(3) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were $542 and $565 for the nine months ended September 30, 2021 and 2020, respectively.
(4) Includes dividends received on restricted stock.