Middlefield Banc Corp. Reports 2021 Full Year Financial Results


MIDDLEFIELD, Ohio, Jan. 25, 2022 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the three and twelve months ended December 31, 2021.

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

  • Returned $16.6 million of capital to shareholders through dividends and the repurchase of 512,449 shares
  • Net income increased 123.2% to a record $18.6 million, compared to $8.3 million
  • Net interest margin improved by 25 basis points to 3.79%, compared to 3.54%
  • Total noninterest income increased 20.3% to $7.2 million
  • Pre-tax, pre-provision(1) income increased 19.4% to $23.4 million
  • Return on average assets increased to 1.36% from 0.64%
  • Return on average equity increased to 12.74% from 5.87%
  • Return on average tangible common equity(1) increased to 14.38% from 6.66%
  • Efficiency ratio improved to 56.48%, compared to 58.77%
  • Strong asset quality with nonperforming loans to total loans of 0.49%, compared to 0.71%

“We achieved record earnings in 2021 driven by strong asset quality, the contribution of PPP forgiveness, prudent expense management, and record annual noninterest income,” stated Thomas G. Caldwell, President and Chief Executive Officer. “We also returned a record amount of capital to our shareholders in 2021 through our share repurchase program and growing dividend policy. During 2021, we invested $12.3 million in our share repurchase program, retiring approximately 8.0% of our outstanding shares, and at an average price of $23.99 or 109.6% of our tangible book value of $21.88 at December 31, 2021. In addition, we paid $4.2 million in dividends during the year, reflecting an increase of 10.6% over the prior year.(1)”  

“We expect loan growth will remain challenging in 2022, as we work to forgive the remaining $34.1 million balance of PPP loans in our loan portfolio at December 31, 2021, and we continue to focus on controlling risk and pricing on loans. However, we are proactively working on several growth initiatives that we expect will improve demand throughout 2022 and beyond. Strategies include enhancing our digital banking offerings, adding new lenders throughout our Northeast Ohio and Central Ohio markets, and pursuing new marketing initiatives that better promote our services to current and perspective customers.”  

“Having celebrated our 120th year in business, I am proud of the milestones we achieved in 2021. I believe Middlefield’s local, community-oriented financial offerings are well positioned to add value to current and prospective customers and look forward to the Company’s success in the future. Finally, our accomplishments are a direct result of the commitment and dedication of our associates and I want to thank everyone at Middlefield for their continued hard work,” concluded Mr. Caldwell.

Income Statement
For the 2021 full year, net interest income increased 11.3% to $48.3 million, compared to $43.4 million for the same period last year. The net interest margin for the 2021 twelve-month period was 3.79%, compared to 3.54% for the same period last year. Net interest income for the 2021 fourth quarter was $12.0 million, compared to $11.3 million for the 2020 fourth quarter. The 6.4% increase in net interest income for the 2021 fourth quarter was largely a result of a 51.7% reduction in interest expense. The net interest margin for the 2021 fourth quarter was 3.82%, compared to 3.49% for the same period of 2020.

For the 2021 full year, noninterest income increased 20.3% to $7.2 million, compared to $6.0 million for the same period last year. Noninterest income for the 2021 fourth quarter was $1.5 million, compared to $1.6 million for the 2020 fourth quarter. These increases were driven primarily through the service charges recognized on deposit account activity.

For the 2021 full year, noninterest expense increased 7.7% to $32.1 million, compared to $29.8 million for the same period last year. For the 2021 fourth quarter, noninterest expense was $7.9 million, compared to $7.8 million for the same period last year. These changes were driven primarily by changes in salaries and benefits expense between the periods.

Net income for the year ended December 31, 2021, was a record $18.6 million, or a record $3.00 per diluted share, compared to $8.3 million, or $1.30 per diluted share for the same period last year. Net income for the 2021 fourth quarter, was $4.8 million, or $0.81 per diluted share, compared to $2.5 million, or $0.39 per diluted share for the same period last year.

Balance Sheet
Total assets at December 31, 2021, were $1.33 billion from $1.39 billion at December 31, 2020. Net loans at December 31, 2021, decreased 11.3% to $967.3 million, compared to $1.09 billion at December 31, 2020, as PPP forgiveness increased. Throughout 2021, Middlefield has helped customers receive $149.6 million of forgiveness payments under the terms of the program, including processing $20.1 million of forgiveness payments during the fourth quarter of 2021. The balance of PPP loans outstanding at December 31, 2021, was $34.1 million.

Total deposits at December 31, 2021, were $1.17 billion, compared to $1.23 billion at December 31, 2020. The 4.8% decrease in deposits was primarily due to a decline in time-based and money market accounts, partially offset by increased noninterest-bearing, savings, and interest-bearing accounts. The investment portfolio was $170.2 million December 31, 2021, compared with $114.4 million at December 31, 2020.

Donald L. Stacy, Chief Financial Officer stated, “We are well positioned to continue returning capital to our shareholders, while supporting our growth oriented strategic plan as a result of our strong balance sheet, liquidity position, and asset quality. The prudent funding of our allowance in 2020, combined with favorable asset quality throughout 2021, has resulted in one of the strongest reserve levels in our 120-year history.”  

“Reflecting our commitment to help our communities navigate the Covid-19 pandemic, we helped our customers receive $212.6 million of PPP loans over the past two years, while processing $178.4 million of forgiveness during this period. In addition, we also supported 390 customers during the pandemic through our Covid-19 related deferral programs. At December 31, 2021, there were no loans with Covid-19 related payment modifications,” concluded Mr. Stacy.

Stockholders’ Equity and Dividends
At December 31, 2021, shareholders’ equity increased 1.1% to $145.3 million compared to $143.8 million at December 31, 2020. On a per share basis, shareholders’ equity at December 31, 2021, increased 9.5% to $24.68 compared to $22.54 at the same period last year.  

Tangible stockholders’ equity(1) increased 1.5% to $128.9 million for the 2021 fourth quarter, compared to $127.0 million at December 31, 2020. On a per-share basis, tangible stockholders’ equity(1) at December 31, 2021, increased 9.9% to $21.88, compared to $19.91 at December 31, 2020.

For the 2021 full year, cash dividends declared per share increased 15.0% to $0.69 totaling $4.2 million, compared to $0.60 per share or $3.8 million for the same period last year. Dividends in 2021, included a $0.04 per share one-time dividend payment declared in the 2021 fourth quarter.

At December 31, 2021, the Company had an equity-to-assets leverage ratio of 10.92%, compared to 10.33% at December 31, 2020. The year-over-year increase in the Company’s equity-to-assets leverage ratio occurred even as Middlefield invested $12.3 million in its share repurchase program.

Asset Quality
The Company had a negative provision for loan losses for the 2021 fourth quarter of $200,000, versus a provision for loan losses of $2.1 million for the fourth quarter 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 2021 full year was $700,000 compared to $9.8 million for the 2020 full year.  

Net recoveries were $308,000, or 0.12% of average loans, annualized, during the 2021 fourth quarter, compared to no net charge-offs for the same quarter last year. For the 2021 full year, net recoveries were $183,000, or 0.02% of average loans, compared to net charge-offs of $3.1 million, or 0.29% of average loans for the full year ended December 31, 2020.

Nonperforming assets at December 31, 2021, improved 22.3% to $11.9 million, compared to $15.2 million at December 31, 2020. Nonperforming loans at December 31 2021, were $4.9 million, a 38.2% decrease from the same period last year. The allowance for loan losses at December 31, 2021, stood at $14.3 million, or 1.46% of total loans, compared to $13.5 million, or 1.22% of total loans at December 31, 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 $1.33 billion at December 31, 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
President/Chief Executive Officer
Middlefield Banc Corp.
(440) 632-1666 Ext. 3200
tcaldwell@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)

  December 31,    September 30,   June 30,   March 31,    December 31,  
Balance Sheets (period end) 2021   2021   2021   2021   2020 
ASSETS                   
  Cash and due from banks$97,172  $113,177  $82,435  $93,037  $92,874 
  Federal funds sold  22,322   19,174   10,034   7,436   19,543 
     Cash and cash equivalents 119,494   132,351   92,469   100,473   112,417 
  Equity securities, at fair value 819   833   730   690   609 
  Investment securities available for sale, at fair value 170,199   163,057   150,850   123,218   114,360 
  Loans held for sale 1,051   676   790   1,260   878 
  Loans:                   
Commercial real estate:                   
Owner occupied 111,470   110,883   109,777   104,379   103,121 
Non-owner occupied 283,618   310,222   304,324   304,623   309,424 
Multifamily 31,189   30,762   34,926   39,015   39,562 
Residential real estate 240,089   232,020   228,102   228,052   233,995 
Commercial and industrial 148,812   163,052   200,558   242,651   232,044 
Home equity lines of credit 104,355   105,450   107,685   111,474   112,543 
Construction and other 54,148   49,378   62,229   64,960   63,573 
Consumer installment 8,010   8,515   8,694   9,046   9,823 
Total loans 981,691   1,010,282   1,056,295   1,104,200   1,104,085 
Less allowance for loan and lease losses 14,342   14,234   14,200   14,122   13,459 
Net loans 967,349   996,048   1,042,095   1,090,078   1,090,626 
  Premises and equipment, net 17,272   17,507   17,680   18,002   18,333 
  Goodwill 15,071   15,071   15,071   15,071   15,071 
  Core deposit intangibles 1,403   1,484   1,564   1,644   1,724 
  Bank-owned life insurance 17,060   16,954   16,846   16,740   16,938 
  Other real estate owned 6,992   7,090   7,090   7,372   7,387 
  Accrued interest receivable and other assets 14,296   14,794   15,033   13,545   13,636 
     TOTAL ASSETS$1,331,006  $1,365,865  $1,360,218  $1,388,093  $1,391,979 
                    
  December 31,    September 30,   June 30,   March 31,    December 31,  
  2021   2021   2021   2021   2020 
LIABILITIES                   
  Deposits:                   
      Noninterest-bearing demand$334,171  $316,770  $326,665  $317,224  $291,347 
      Interest-bearing demand 196,308   237,576   207,725   215,684   195,722 
      Money market 177,281   178,423   183,453   187,204   198,493 
      Savings 260,125   256,114   252,171   259,973   243,888 
      Time 198,725   211,674   225,271   245,342   295,750 
         Total deposits 1,166,610   1,200,557   1,195,285   1,225,427   1,225,200 
                    
  Other borrowings 12,901   12,966   13,031   13,095   17,038 
  Accrued interest payable and other liabilities 6,160   6,287   5,858   4,901   5,931 
     TOTAL LIABILITIES 1,185,671   1,219,810   1,214,174   1,243,423   1,248,169 
STOCKHOLDERS' EQUITY                   
Common stock, no par value; 10,000,000 shares authorized, 7,330,548                   
shares issued, 5,888,737 shares outstanding as of December 31, 2021 87,131   87,131   87,131   87,073   86,886 
  Retained earnings 83,971   80,376   76,150   72,729   69,578 
  Accumulated other comprehensive income  3,462   3,610   3,893   2,917   4,284 
Treasury stock, at cost; 1,441,811 shares as of December 31, 2021 (29,229)  (25,062)  (21,130)  (18,049)  (16,938)
     TOTAL STOCKHOLDERS' EQUITY 145,335   146,055   146,044   144,670   143,810 
                    
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$1,331,006  $1,365,865  $1,360,218  $1,388,093  $1,391,979 
                    



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 Twelve Months Ended
 
  December 31,    September 30,  June 30,  March 31,   December 31,   December 31,  December 31, 
Statements of Income 2021   2021  2021  2021  2020  2021  2020 
                       
INTEREST AND DIVIDEND INCOME                      
   Interest and fees on loans$11,586  $12,258 $11,885 $12,167 $12,041 $47,896 $49,003 
   Interest-earning deposits in other institutions 30   30  12  18  9  90  118 
   Federal funds sold 1   1  1  -  1  3  22 
   Investment securities:                      
      Taxable interest 438   461  410  370  297  1,679  909 
      Tax-exempt interest 732   673  602  558  591  2,565  2,472 
   Dividends on stock 23   24  26  29  28  102  114 
      Total interest and dividend income 12,810   13,447  12,936  13,142  12,967  52,335  52,638 
INTEREST EXPENSE                      
   Deposits 783   915  1,010  1,205  1,655  3,913  8,962 
   Short-term borrowings -   -  -  -  (2) -  79 
   Other borrowings 37   37  39  39  43  152  209 
      Total interest expense 820   952  1,049  1,244  1,696  4,065  9,250 
                       
NET INTEREST INCOME 11,990   12,495  11,887  11,898  11,271  48,270  43,388 
                       
Provision (credit) for loan losses (200)  -  200  700  2,100  700  9,840 
                       
NET INTEREST INCOME AFTER PROVISION                      
   FOR LOAN LOSSES 12,190   12,495  11,687  11,198  9,171  47,570  33,548 
NONINTEREST INCOME                      
   Service charges on deposit accounts 906   876  856  787  729  3,425  2,539 
   (Losses) gains on equity securities (14)  102  40  81  56  209  (101)
   Earnings on bank-owned life insurance 106   108  106  226  106  546  427 
   Gains on sale of loans 118   309  221  592  332  1,240  1,487 
   Other income 419   426  409  532  387  1,786  1,638 
      Total noninterest income 1,535   1,821  1,632  2,218  1,610  7,206  5,990 
                       
NONINTEREST EXPENSE                      
   Salaries and employee benefits 4,088   4,488  4,321  4,254  4,458  17,151  15,835 
   Occupancy expense 572   457  549  600  628  2,178  2,158 
   Equipment expense 358   333  313  357  365  1,361  1,308 
   Data processing costs 660   736  698  786  617  2,880  2,650 
   Ohio state franchise tax 285   287  286  286  251  1,144  1,082 
   Federal deposit insurance expense 50   150  150  144  103  494  423 
   Professional fees 435   136  323  419  352  1,313  1,359 
  (Losses) gains on other real estate owned (66)  9  22  46  44  11  (172)
   Advertising expense 221   222  221  221  55  885  698 
   Software amortization expense 119   88  74  80  66  361  351 
   Core deposit intangible amortization 80   81  80  80  83  321  332 
   Other expense 1,059   951  889  1,080  803  3,979  3,764 
      Total noninterest expense 7,861   7,938  7,926  8,353  7,825  32,078  29,788 
                       
Income before income taxes 5,864   6,378  5,393  5,063  2,956  22,698  9,750 
Income taxes 1,027   1,174  968  896  467  4,065  1,401 
                       
NET INCOME$4,837  $5,204 $4,425 $4,167 $2,489 $18,633 $8,349 
                       
PTPP (1)$5,664  $6,378 $5,593 $5,763 $5,056 $23,398 $19,590 
                       
(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 Twelve Months Ended
  December 31,    September 30,   June 30,   March 31,    December 31,    December 31,    December 31,  
  2021   2021   2021   2021   2020   2021   2020 
Per common share data                           
Net income per common share - basic$0.81  $0.85  $0.70  $0.65  $0.39  $3.01  $1.31 
Net income per common share - diluted$0.81  $0.85  $0.70  $0.65  $0.39  $3.00  $1.30 
Dividends declared per share$0.21  $0.16  $0.16  $0.16  $0.15  $0.69  $0.60 
Book value per share (period end)$24.68  $24.13  $23.50  $22.80  $22.54  $24.68  $22.54 
Tangible book value per share (period end) (2) (3)$21.88  $21.39  $20.82  $20.17  $19.91  $21.88  $19.91 
Dividends declared$1,242  $978  $1,004  $1,016  $957  $4,240  $3,834 
Dividend yield 3.37%  2.66%  2.72%  3.10%  2.65%  2.79%  2.67%
Dividend payout ratio 25.68%  18.79%  22.69%  24.38%  38.45%  22.76%  45.92%
Average shares outstanding - basic 5,951,838   6,136,648   6,297,071   6,364,132   6,378,706   6,186,666   6,385,350 
Average shares outstanding - diluted 5,975,333   6,157,181   6,312,230   6,378,493   6,397,681   6,211,076   6,404,524 
Period ending shares outstanding 5,888,737   6,054,083   6,215,511   6,344,657   6,379,323   5,888,737   6,379,323 
                            
Selected ratios                           
Return on average assets 1.41%  1.51%  1.30%  1.22%  0.72%  1.36%  0.64%
Return on average equity 13.17%  13.95%  12.10%  11.65%  6.76%  12.74%  5.87%
Return on average tangible common equity (2) (4) 14.85%  15.71%  13.65%  13.17%  7.64%  14.38%  6.66%
Efficiency (1) 56.65%  54.15%  57.28%  57.91%  59.29%  56.48%  58.77%
Equity to assets at period end 10.92%  10.69%  10.74%  10.42%  10.33%  10.92%  10.33%
Noninterest expense to average assets 0.58%  0.58%  0.58%  0.60%  0.57%  2.34%  2.27%
                            
(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 Twelve Months Ended
  December 31,    September 30,   June 30,   March 31,    December 31,    December 31,    December 31,  
Yields 2021   2021   2021   2021   2020   2021   2020 
Interest-earning assets:                           
  Loans receivable (2) 4.61%  4.74%  4.43%  4.48%  4.28%  4.56%  4.55%
  Investment securities (2) 3.30%  3.37%  3.47%  3.75%  3.65%  3.45%  3.68%
  Interest-earning deposits with other banks 0.20%  0.21%  0.18%  0.20%  0.21%  0.20%  0.45%
Total interest-earning assets 4.07%  4.20%  4.05%  4.11%  4.00%  4.11%  4.28%
Deposits:                           
  Interest-bearing demand deposits 0.12%  0.12%  0.12%  0.16%  0.21%  0.13%  0.31%
  Money market deposits 0.47%  0.46%  0.46%  0.47%  0.53%  0.47%  0.87%
  Savings deposits 0.06%  0.06%  0.06%  0.07%  0.11%  0.06%  0.24%
  Certificates of deposit 0.90%  1.08%  1.19%  1.28%  1.56%  1.13%  1.87%
Total interest-bearing deposits 0.36%  0.41%  0.46%  0.53%  0.70%  0.44%  1.02%
Non-Deposit Funding:                           
  Borrowings 1.13%  1.13%  1.18%  1.10%  0.95%  1.13%  0.75%
Total interest-bearing liabilities 0.37%  0.42%  0.47%  0.54%  0.71%  0.45%  1.01%
Cost of deposits 0.26%  0.30%  0.34%  0.40%  0.54%  0.32%  0.79%
Cost of funds 0.27%  0.31%  0.35%  0.41%  0.55%  0.33%  0.79%
Net interest margin (1) 3.82%  3.91%  3.72%  3.73%  3.49%  3.79%  3.54%
                            
(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
  December 31,   September 30,  June 30,  March 31,   December 31, 
Asset quality data 2021  2021  2021  2021  2020
(Dollar amounts in thousands, unaudited)                   
Nonperforming loans (1)$4,859  $6,806  $7,760  $8,958  $7,858 
Other real estate owned 6,992   7,090   7,090   7,372   7,387 
Nonperforming assets$11,851  $13,896  $14,850  $16,330  $15,245 
                    
Allowance for loan losses$14,342  $14,234  $14,200  $14,122  $13,459 
Allowance for loan losses/total loans 1.46%  1.41%  1.34%  1.28%  1.22%
Net charge-offs (recoveries):                   
   Quarter-to-date$(308) $(34) $122  $37  $0 
   Year-to-date (183)  125   159   37   3,149 
Net charge-offs (recoveries) to average loans, annualized:                   
   Quarter-to-date (0.12)%  (0.01)%  0.05%  0.01%  0.00%
   Year-to-date (0.02)%  0.02%  0.03%  0.01%  0.29%
                    
Nonperforming loans/total loans 0.49%  0.67%  0.73%  0.81%  0.71%
Allowance for loan losses/nonperforming loans 295.16%  209.14%  182.99%  157.65%  171.28%
Nonperforming assets/total assets 0.89%  1.02%  1.09%  1.18%  1.10%
(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
(Dollar amounts in thousands, unaudited) December 31,   September 30,  June 30,  March 31,   December 31, 
  2021  2021  2021  2021  2020
               
Stockholders' Equity$145,335 $146,055 $146,044 $144,670 $143,810
Less Goodwill and other intangibles 16,474  16,555  16,635  16,715  16,795
Tangible Common Equity$128,861 $129,500 $129,409 $127,955 $127,015
               
Shares outstanding 5,888,737  6,054,083  6,215,511  6,344,657  6,379,323
Tangible book value per share$21.88 $21.39 $20.82 $20.17 $19.91
               


Reconciliation of Average Equity to Return on Average Tangible Common Equity  
  For the Three Months Ended  For the Twelve Months Ended
                     
  December 31,   September 30,  June 30,  March 31,   December 31,   December 31,   December 31, 
  2021  2021  2021  2021  2020  2021  2020
                     
Average Stockholders' Equity $145,716 $148,048 $146,719 $145,065 $146,374 $146,237 $142,241
Less Average Goodwill and other intangibles 16,513  16,594  16,674  16,754  16,836  16,634  16,960
Average Tangible Common Equity$129,203 $131,454 $130,045 $128,311 $129,538 $129,603 $125,281
                     
Net income$4,837 $5,204 $4,425 $4,167 $2,489 $18,633 $8,349
Return on average tangible common equity (annualized) 14.85%  15.71%  13.65%  13.17%  7.64%  14.38%  6.66%
                     


Reconciliation of Pre-Tax Pre-Provision Income (PTPP)                    
  For the Three Months Ended  For the Twelve Months Ended
                     
  December 31,   September 30,  June 30,  March 31,   December 31,   December 31,   December 31, 
  2021  2021  2021  2021  2020  2021  2020
                     
Net income$4,837 $5,204 $4,425 $4,167 $2,489 $18,633 $8,349
Add Income Taxes 1,027  1,174  968  896  467  4,065  1,401
Add Provision for loan losses (200)  -  200  700  2,100  700  9,840
PTPP$5,664 $6,378 $5,593 $5,763 $5,056 $23,398 $19,590
                     



MIDDLEFIELD BANC CORP.
Average Balance Sheets
(Dollar amounts in thousands, unaudited)


  For the Three Months Ended
  December 31, 
  December 31, 
  2021
  2020
  Average     Average   Average     Average 
  Balance  Interest   Yield/Cost   Balance  Interest   Yield/Cost 
Interest-earning assets:                   
  Loans receivable (3)$999,229 $11,586  4.61% $1,121,259 $12,041  4.28%
  Investment securities (3) 164,254  1,170  3.30%  113,801  888  3.65%
  Interest-earning deposits with other banks (4) 104,804  54  0.20%  70,803  38  0.21%
Total interest-earning assets 1,268,287  12,810  4.07%  1,305,863  12,967  4.00%
Noninterest-earning assets 90,556         78,064       
Total assets$1,358,843        $1,383,927       
Interest-bearing liabilities:                   
  Interest-bearing demand deposits$212,861 $66  0.12% $186,933 $97  0.21%
  Money market deposits 180,201  214  0.47%  191,771  255  0.53%
  Savings deposits 257,344  39  0.06%  238,991  66  0.11%
  Certificates of deposit 204,904  464  0.90%  316,293  1,237  1.56%
  Short-term borrowings -  -  0.00%  26  -  0.00%
  Other borrowings 12,934  37  1.13%  17,068  41  0.96%
Total interest-bearing liabilities 868,244  820  0.37%  951,082  1,696  0.71%
Noninterest-bearing liabilities:                   
  Noninterest-bearing demand deposits 337,900         281,608       
  Other liabilities 6,983         4,863       
Stockholders' equity 145,716         146,374       
Total liabilities and stockholders' equity1,358,843        $1,383,927       
Net interest income   $11,990        $11,271    
Interest rate spread (1)       3.70%        3.29%
Net interest margin (2)       3.82%        3.49%
Ratio of average interest-earning assets to                   
  average interest-bearing liabilities       146.07%        137.30%
                    
(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 $210 and $178 for the three months ended December 31, 2021 and 2020, respectively     
(4) Includes dividends received on restricted stock.                     


  For the Three Months Ended
  December 31,
  September 30,
  2021
  2021
  Average     Average  Average     Average
  Balance  Interest  Yield/Cost  Balance  Interest  Yield/Cost
Interest-earning assets:                   
  Loans receivable (3)$999,229 $11,586  4.61% $1,027,935 $12,258  4.74%
  Investment securities (3) 164,254  1,170  3.30%  154,718  1,134  3.37%
  Interest-earning deposits with other banks (4) 104,804  54  0.20%  105,910  55  0.21%
Total interest-earning assets 1,268,287  12,810  4.07%  1,288,563  13,447  4.20%
Noninterest-earning assets 90,556         82,952       
Total assets$1,358,843        $1,371,515       
Interest-bearing liabilities:                   
  Interest-bearing demand deposits$212,861 $66  0.12% $225,264 $67  0.12%
  Money market deposits 180,201  214  0.47%  182,831  214  0.46%
  Savings deposits 257,344  39  0.06%  253,960  38  0.06%
  Certificates of deposit 204,904  464  0.90%  218,323  596  1.08%
  Short-term borrowings -  -  0.00%  -  -  0.00%
  Other borrowings 12,934  37  1.13%  12,999  37  1.13%
Total interest-bearing liabilities 868,244  820  0.37%  893,377  952  0.42%
Noninterest-bearing liabilities:                   
  Noninterest-bearing demand deposits 337,900         323,726       
  Other liabilities 6,983         6,364       
Stockholders' equity 145,716         148,048       
Total liabilities and stockholders' equity$1,358,843        $1,371,515       
Net interest income   $11,990        $12,495    
Interest rate spread (1)       3.70%        3.78%
Net interest margin (2)       3.82%        3.91%
Ratio of average interest-earning assets to                   
  average interest-bearing liabilities       146.07%        144.24%
                    
(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 $210 and $195 for the three months ended December 31, 2021, and September 30, 2021, respectively.
(4) Includes dividends received on restricted stock.                   
                    


 For the Twelve Months Ended
 December 31, 
  December 31, 
 2021
  2020
 Average     Average  Average     Average
 Balance  Interest  Yield/Cost  Balance  Interest  Yield/Cost
Interest-earning assets:                  
  Loans receivable (3)$     1,052,351  $           47,896  4.56%  $     1,079,788  $           49,003  4.55%
  Investment securities (3)142,705  4,244  3.45%  109,863  3,381  3.68%
  Interest-earning deposits with other banks (4)97,417  195  0.20%  56,222  254  0.45%
Total interest-earning assets1,292,473  52,335  4.11%  1,245,873  52,638  4.28%
Noninterest-earning assets78,802         68,219       
Total assets$     1,371,275         $     1,314,092       
Interest-bearing liabilities:                  
  Interest-bearing demand deposits$         212,063  $                274  0.13%  $         144,897  $                445  0.31%
  Money market deposits186,009  869  0.47%  172,587  1,501  0.87%
  Savings deposits255,267  162  0.06%  211,151  510  0.24%
  Certificates of deposit231,662  2,608  1.13%  347,609  6,506  1.87%
  Short-term borrowings85  -  0.00%  22,637  79  0.35%
  Other borrowings13,313  152  1.14%  15,629  209  1.34%
Total interest-bearing liabilities898,399  4,065  0.45%  914,510  9,250  1.01%
Noninterest-bearing liabilities:                  
  Noninterest-bearing demand deposits320,104         252,615       
  Other liabilities6,535         4,726       
Stockholders' equity146,237         142,241       
Total liabilities and stockholders' equity$     1,371,275         $     1,314,092       
Net interest income   $           48,270         $           43,388    
Interest rate spread (1)      3.66%        3.27%
Net interest margin (2)      3.79%        3.54%
Ratio of average interest-earning assets to                  
  average interest-bearing liabilities      143.86%        136.23%
                   
(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 $752 and $742 for 2021 and 2020, respectively.       
(4) Includes dividends received on restricted stock.