Middlefield Banc Corp. Reports Record 2021 First Half Financial Results

MIDDLEFIELD, Ohio, July 16, 2021 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the 2021 first half and second quarter ended June 30, 2021.

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

• Net income of $8.6 million, or $1.35 per diluted share driven by record second quarter earnings of $4.4 million, or a record $0.70 per diluted share
• Net interest margin improved by 16 basis points to 3.72%, compared to 3.56%
• Total noninterest income was up 49.9% to $3.9 million
• Pre-tax, pre-provision⁽¹⁾ income increased 35.4% to $11.4 million
• Return on average assets increased to 1.26% from 0.64%
• Return on average equity increased to 11.88% from 5.79%
• Return on average tangible common equity⁽¹⁾ increased to 13.41% from 6.59%
• Efficiency ratio improved to 57.60%, compared to 62.33%
• Year-to-date net charge-offs declined 46.6% to $159,000
  

“Our record second quarter and first half earnings reflect strong operating performance across our business and improving economic trends throughout our Northeast and Central Ohio markets,” stated Thomas G. Caldwell, President and Chief Executive Officer. “In addition, we have successfully navigated the low interest rate environment throughout the 2021 first half by successfully managing our net interest margin, enhancing our efficiency ratio, controlling operating expenses, growing noninterest income, and maintaining strong asset quality.”

“Year-to-date, we have helped small business customers secure $93.5 million of PPP forgiveness, which provided a $1.5 million benefit to our yield on earnings assets. At June 30, 2021, $90.2 million of PPP loans remained on the balance sheet and we expect the majority of the outstanding PPP loans will be forgiven by year end.”     

“While economic and interest rate uncertainty remains, we are focused on pursuing our long-term growth strategy, making investments across our business, and creating value for our shareholders. As a result, we recently hired two new loan officers in Central Ohio, we are improving our customer engagement by enhancing the Bank’s online resources and returning capital to shareholders through our higher year-over-year dividend payment and share buyback program. Year-to-date, we have repurchased 181,045 shares of our common stock at an average price of $23.16 per share, which includes 131,577 shares repurchased in the second quarter at an average price of $23.42 per share. We have repurchased our common stock at an average price of 111.2% to tangible book value, which we believe is a tremendous value and offers a significant opportunity for our shareholders to increase their ownership in Middlefield Banc Corp. Overall, I am pleased with our strong year-to-date performance, and we expect 2021 will be another strong year for the Company,” concluded Mr. Caldwell.

Income Statement
Net interest income for the 2021 first half, increased 14.6% to $23.8 million, compared to $20.8 million for the same period last year. Year-to-date, the net interest margin was 3.72%, compared to 3.56% for the same period last year. Net interest income for the 2021 second quarter was $11.9 million, compared to $10.7 million for the 2020 second quarter. The 10.8% increase in net interest income for the 2021 second quarter was largely a result of a 56.8% reduction in interest expense. The net interest margin for the 2021 second quarter was 3.72%, compared to 3.49% for the same period of 2020.

For the 2021 first half, noninterest income was $3.9 million, compared to $2.6 million for the same period last year. Noninterest income for the 2021 second quarter was $1.6 million, compared to $1.5 million for the same period last year.

For the 2021 first half, noninterest expense increased 9.0% to $16.3 million, compared to $14.9 million for the same period last year. Operating costs in the 2021 second quarter increased 3.1% to $7.9 million from $7.7 million for the 2020 second quarter.

Net income for the 2021 first half ended June 30, 2021, was a record $8.6 million, or a record $1.35 per diluted share, compared to $4.0 million, or $0.62 per diluted share for the same period last year. Net income for the 2021 second quarter ended June 30, 2021, was a quarterly record of $4.4 million, or $0.70 per diluted share, compared to $3.0 million, or $0.46 per diluted share for the same period last year.

Balance Sheet
Total assets at June 30, 2021, increased 1.3% to approximately $1.36 billion from $1.34 billion at June 30, 2020. Net loans at June 30, 2021, decreased 5.3% to $1.04 billion, compared to $1.10 billion at June 30, 2020 as PPP forgiveness increased. Middlefield originated $212.6 million of loans under the PPP and helped customers receive $122.4 million of forgiveness payments under the terms of the program. The balance of PPP loans outstanding at June 30, 2021, was $90.2 million.

Total deposits at June 30, 2021, were approximately $1.20 billion, compared to $1.16 billion at June 30, 2020. The 3.2% increase in deposits was primarily due to increases in interest-bearing, money market, savings, and non-interest-bearing accounts, partially offset by decreased time-based accounts. At June 30, 2021, Middlefield had no short-term borrowings compared to $20.4 million of short-term borrowings at June 30, 2020 as the Company paid back Federal Home Loan Bank advances. The investment portfolio, which is entirely classified as available for sale, was $150.9 million June 30, 2021, compared with $112.5 million at June 30, 2020.

Donald L. Stacy, Chief Financial Officer stated, “Our balance sheet remains strong as we benefit from record earnings, favorable asset quality, and a meaningfully higher allowance.   The allowance for loan losses to total loans now stands at 1.34%, compared to 1.28% at March 31, 2021, and 0.92% at June 30, 2020. In addition, at June 30, 2021, we only had eight loans in deferral status primarily within the hospitality industry representing a balance of $17.7 million, compared to a balance of $214.8 million at June 30, 2020, a decline of approximately 92%.”

“We also ended the quarter with robust capital levels and liquidity, including nearly $92.5 million in cash and cash equivalents and $150.9 million in our investment portfolio. We are focused on maximizing the yield on our investment portfolio, while prudently managing risk. As a result, our investment portfolio includes $32 million of subordinated debt, at an average yield of approximately 4.8%, in community banks across the country with similar metrics. The remainder of our investment portfolio is primarily held in tax free municipal bonds. I believe our record year-to-date financial results demonstrate strong execution across many aspects of the Bank and our ability to focus on managing items under our control,” concluded Mr. Stacy.

Stockholders’ Equity and Dividends
At June 30, 2021, shareholders’ equity increased 3.8% to $146.0 million compared to $140.7 million at June 30, 2020. On a per share basis, shareholders’ equity at June 30, 2021, was $23.50 compared to $22.09 at the same period last year.

Tangible stockholders’ equity⁽¹⁾ increased 4.6% to $129.4 million for the 2021 second quarter, compared to $123.7 million at June 30, 2020. On a per-share basis, tangible stockholders’ equity⁽¹⁾ was $20.82 at June 30, 2021, compared to $19.43 at June 30, 2020.

Through the first six months of 2021, the Company declared cash dividends of $0.32 per share, compared to $0.30 per share for the same period last year.

At June 30, 2021, the Company had an equity to assets leverage ratio of 10.74%, compared to 10.47% at June 30, 2020.

Asset Quality
The provision for loan losses for the 2021 second quarter was $200,000 versus $1.0 million 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 first half was $900,000 versus $3.7 million for the same period last year.

Net charge-offs were $122,000, or 0.05% of average loans, annualized, during the 2021 second quarter, compared to net charge-offs of $34,000, or 0.01% of average loans, annualized, at June 30, 2020. Year-to-date net charge-offs were $159,000, or 0.03% of average loans, annualized, compared to net charge-offs of $298,000, or 0.06% of average loans, annualized for the six-months ended June 30, 2020.

Nonperforming assets at June 30, 2021, were $14.9 million, compared to $10.5 million at June 30, 2020. The $4.4 million increase in nonperforming assets was affected by one large legacy credit in the Central Ohio market, which was charged-off during the 2020 third quarter. Nonperforming loans at June 30, 2021 were $7.8 million a 20.8% decline from the same period last year, and a 13.4% decline from the 2021 first quarter. The allowance for loan losses at June 30, 2021, stood at $14.2 million, or 1.34% of total loans, compared to $10.2 million, or 0.92% of total loans at June 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 $1.36 billion at June 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 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)
			June 30,				March 31,				December 31,				September 30,				June 30,
Balance Sheets (period end)			2021				2021				2020				2020				2020
ASSETS
Cash and due from banks		$	82,435			$	93,037			$	92,874			$	46,097			$	55,766
Federal funds sold			10,034				7,436				19,543				6,884				2,520
Cash and cash equivalents			92,469				100,473				112,417				52,981				58,286
Equity securities, at fair value			730				690				609				553				581
Investment securities available for sale, at fair value			150,850				123,218				114,360				112,968				112,529
Loans held for sale			790				1,260				878				10,457				4,151
Loans:
Commercial real estate:
Owner occupied			109,777				104,379				103,121				107,342				110,134
Non-owner occupied			304,324				304,623				309,424				310,512				300,577
Multifamily			34,926				39,015				39,562				39,622				37,604
Residential real estate			228,102				228,052				233,995				222,237				227,427
Commercial and industrial			200,558				242,651				232,044				258,313				240,096
Home equity lines of credit			107,685				111,474				112,543				115,223				117,196
Construction and other			62,229				64,960				63,573				60,613				66,015
Consumer installment			8,694				9,046				9,823				10,534				11,210
Total loans			1,056,295				1,104,200				1,104,085				1,124,396				1,110,259
Less allowance for loan and lease losses			14,200				14,122				13,459				11,359				10,210
Net loans			1,042,095				1,090,078				1,090,626				1,113,037				1,100,049
Premises and equipment, net			17,680				18,002				18,333				18,633				18,962
Goodwill			15,071				15,071				15,071				15,071				15,071
Core deposit intangibles			1,564				1,644				1,724				1,807				1,890
Bank-owned life insurance			16,846				16,740				16,938				16,832				16,723
Other real estate owned			7,090				7,372				7,387				7,391				687
Accrued interest receivable and other assets			15,033				13,545				13,636				15,079				14,391
TOTAL ASSETS		$	1,360,218			$	1,388,093			$	1,391,979			$	1,364,809			$	1,343,320
			June 30,				March 31,				December 31,				September 30,				June 30,
			2021				2021				2020				2020				2020
LIABILITIES
Deposits:
Noninterest-bearing demand		$	326,665			$	317,224			$	291,347			$	268,838			$	270,738
Interest-bearing demand			207,725				215,684				195,722				179,080				136,722
Money market			183,453				187,204				198,493				184,936				168,842
Savings			252,171				259,973				243,888				231,696				218,545
Time			225,271				245,342				295,750				329,413				363,420
Total deposits			1,195,285				1,225,427				1,225,200				1,193,963				1,158,267
Short-term borrowings			-				-				-				-				20,417
Other borrowings			13,031				13,095				17,038				17,100				17,162
Accrued interest payable and other liabilities			5,858				4,901				5,931				11,690				6,779
TOTAL LIABILITIES			1,214,174				1,243,423				1,248,169				1,222,753				1,202,625
STOCKHOLDERS' EQUITY
Common stock, no par value; 10,000,000 shares authorized, 7,325,918
shares issued, 6,215,511 shares outstanding as of June 30, 2021			87,131				87,073				86,886				86,871				86,722
Retained earnings			76,150				72,729				69,578				68,046				67,150
Accumulated other comprehensive income			3,893				2,917				4,284				4,077				3,761
Treasury stock, at cost; 1,110,407 shares as of June 30, 2021			(21,130	)			(18,049	)			(16,938	)			(16,938	)			(16,938	)
TOTAL STOCKHOLDERS' EQUITY			146,044				144,670				143,810				142,056				140,695
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,360,218			$	1,388,093			$	1,391,979			$	1,364,809			$	1,343,320

 

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, unaudited)
		For the Three Months Ended																				For the Six Months Ended
		June 30,			March 31,				December 31,				September 30,				June 30,					June 30,				June 30,
Statements of Income		2021			2021				2020				2020				2020					2021				2020
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	11,885			$	12,167			$	12,041			$	12,603			$	12,281			$	24,052			$	24,359
Interest-earning deposits in other institutions		12				18				9				8				7				30				101
Federal funds sold		1				-				1				-				-				1				21
Investment securities:
Taxable interest		410				370				297				249				206				780				363
Tax-exempt interest		602				558				591				618				634				1,160				1,263
Dividends on stock		26				29				28				29				27				55				57
Total interest and dividend income		12,936				13,142				12,967				13,507				13,155				26,078				26,164
INTEREST EXPENSE
Deposits		1,010				1,205				1,655				2,106				2,336				2,215				5,201
Short-term borrowings		-				-				(2	)			14				32				-				67
Other borrowings		39				39				43				28				62				78				138
Total interest expense		1,049				1,244				1,696				2,148				2,430				2,293				5,406
NET INTEREST INCOME		11,887				11,898				11,271				11,359				10,725				23,785				20,758
Provision for loan losses		200				700				2,100				4,000				1,000				900				3,740
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES		11,687				11,198				9,171				7,359				9,725				22,885				17,018
NONINTEREST INCOME
Service charges on deposit accounts		856				787				729				691				566				1,643				1,119
Gain (loss) on equity securities		40				81				56				(28	)			31				121				(129	)
Earnings on bank-owned life insurance		106				226				106				109				105				332				212
Gains on sale of loans		221				592				332				660				381				813				495
Other income		409				532				387				379				412				941				872
Total noninterest income		1,632				2,218				1,610				1,811				1,495				3,850				2,569
NONINTEREST EXPENSE
Salaries and employee benefits		4,321				4,254				4,458				3,657				4,136				8,575				7,720
Occupancy expense		549				600				628				497				483				1,149				1,033
Equipment expense		313				357				365				363				307				670				580
Data processing costs		698				786				617				683				684				1,484				1,350
Ohio state franchise tax		286				286				251				282				281				572				549
Federal deposit insurance expense		150				144				103				123				74				294				197
Professional fees		323				419				352				289				369				742				718
Net loss (gain) on other real estate owned		22				46				(172	)			(184	)			(33	)			68				(32	)
Advertising expense		221				221				55				217				217				442				426
Software amortization expense		74				80				66				70				74				154				215
Core deposit intangible amortization		80				80				83				83				83				160				166
Other expense		889				1,080				1,019				942				1,014				1,969				2,019
Total noninterest expense		7,926				8,353				7,825				7,022				7,689				16,279				14,941
Income before income taxes		5,393				5,063				2,956				2,148				3,531				10,456				4,646
Income taxes		968				896				467				295				565				1,864				639
NET INCOME	$	4,425			$	4,167			$	2,489			$	1,853			$	2,966			$	8,592			$	4,007
PTPP (1)	$	5,593			$	5,763			$	5,056			$	6,148			$	4,531			$	11,356			$	8,386
(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 Six Months Ended
		June 30,				March 31,				December 31,				September 30,				June 30,				June 30,				June 30,
		2021				2021				2020				2020				2020				2021				2020
Per common share data
Net income per common share - basic	$	0.70			$	0.65			$	0.39			$	0.29			$	0.47			$	1.36			$	0.63
Net income per common share - diluted	$	0.70			$	0.65			$	0.39			$	0.29			$	0.46			$	1.35			$	0.62
Dividends declared per share	$	0.16			$	0.16			$	0.15			$	0.15			$	0.15			$	0.32			$	0.30
Book value per share (period end)	$	23.50			$	22.80			$	22.54			$	22.27			$	22.09			$	23.50			$	22.09
Tangible book value per share (period end) (2) (3)	$	20.82			$	20.17			$	19.91			$	19.63			$	19.43			$	20.82			$	19.43
Dividends declared	$	1,004			$	1,016			$	957			$	957			$	956			$	2,020			$	1,920
Dividend yield		2.72	%			3.10	%			2.65	%			3.09	%			2.91	%			2.73	%			2.91	%
Dividend payout ratio		22.69	%			24.38	%			38.45	%			51.65	%			32.23	%			23.51	%			47.92	%
Average shares outstanding - basic		6,297,071				6,364,132				6,378,706				6,376,291				6,369,467				6,331,356				6,393,288
Average shares outstanding - diluted		6,312,230				6,378,493				6,397,681				6,385,765				6,388,118				6,348,345				6,412,585
Period ending shares outstanding		6,215,511				6,344,657				6,379,323				6,378,110				6,369,467				6,215,511				6,369,467
Selected ratios
Return on average assets		1.30	%			1.22	%			0.72	%			0.54	%			0.90	%			1.26	%			0.64	%
Return on average equity		12.10	%			11.65	%			6.76	%			5.11	%			8.57	%			11.88	%			5.79	%
Return on average tangible common equity (2) (4)		13.65	%			13.17	%			7.64	%			5.79	%			9.76	%			13.41	%			6.59	%
Efficiency (1)		57.28	%			57.91	%			59.29	%			51.96	%			61.29	%			57.60	%			62.33	%
Equity to assets at period end		10.74	%			10.42	%			10.33	%			10.41	%			10.47	%			10.74	%			10.47	%
Noninterest expense to average assets		0.58	%			0.60	%			0.57	%			0.52	%			0.58	%			1.18	%			1.19	%
(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 Six Months Ended
			June 30,					March 31,					December 31,				September 30,					June 30,					June 30,				June 30,
Yields				2021					2021				2020					2020					2020				2021				2020
Interest-earning assets:
Loans receivable (2)				4.43	%				4.48	%			4.28	%				4.48	%				4.53	%			4.45	%			4.73	%
Investment securities (2)				3.47	%				3.75	%			3.65	%				3.66	%				3.76	%			3.60	%			3.69	%
Interest-earning deposits with other banks				0.18	%				0.20	%			0.21	%				0.27	%				0.23	%			0.19	%			0.72	%
Total interest-earning assets				4.05	%				4.11	%			4.00	%				4.23	%				4.27	%			4.08	%			4.47	%
Deposits:
Interest-bearing demand deposits				0.12	%				0.16	%			0.21	%				0.32	%				0.35	%			0.14	%			0.38	%
Money market deposits				0.46	%				0.47	%			0.53	%				0.70	%				0.93	%			0.47	%			1.17	%
Savings deposits				0.06	%				0.07	%			0.11	%				0.20	%				0.21	%			0.07	%			0.35	%
Certificates of deposit				1.19	%				1.28	%			1.56	%				1.77	%				2.00	%			1.24	%			2.06	%
Total interest-bearing deposits				0.46	%				0.53	%			0.70	%				0.93	%				1.11	%			0.50	%			1.25	%
Non-Deposit Funding:
Borrowings				1.18	%				1.10	%			0.95	%				0.45	%				0.53	%			1.14	%			0.83	%
Total interest-bearing liabilities				0.47	%				0.54	%			0.71	%				0.91	%				1.07	%			0.50	%			1.23	%
Cost of deposits				0.34	%				0.40	%			0.54	%				0.72	%				0.85	%			0.37	%			0.98	%
Cost of funds				0.35	%				0.41	%			0.55	%				0.71	%				0.83	%			0.38	%			0.98	%
Net interest margin (1)				3.72	%				3.73	%			3.49	%				3.57	%				3.49	%			3.72	%			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
			June 30,					March 31,					December 31,				September 30,					June 30,
Asset quality data				2021					2021				2020					2020					2020
(Dollar amounts in thousands, unaudited)
Nonperforming loans (1)		$		7,760			$		8,958			$	7,858			$		6,690			$		9,803
Other real estate owned				7,090					7,372				7,387					7,391					687
Nonperforming assets		$		14,850			$		16,330			$	15,245			$		14,081			$		10,490
Allowance for loan losses		$		14,200			$		14,122			$	13,459			$		11,359			$		10,210
Allowance for loan losses/total loans				1.34	%				1.28	%			1.22	%				1.01	%				0.92	%
Net charge-offs:
Quarter-to-date		$		122			$		37			$	-			$		2,851			$		34
Year-to-date				159					37				3,149					3,149					298
Net charge-offs to average loans, annualized:
Quarter-to-date				0.05	%				0.01	%			0.00	%				1.01	%				0.01	%
Year-to-date				0.03	%				0.01	%			0.29	%				0.39	%				0.06	%
Nonperforming loans/total loans				0.73	%				0.81	%			0.71	%				0.59	%				0.88	%
Allowance for loan losses/nonperforming loans				182.99	%				157.65	%			171.28	%				169.79	%				104.15	%
Nonperforming assets/total assets				1.09	%				1.18	%			1.10	%				1.03	%				0.78	%
(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 Six Months Ended
(Dollar amounts in thousands, unaudited)			June 30,					March 31,					December 31,				September 30,					June 30,					June 30,				June 30,
				2021					2021				2020					2020					2020				2021				2020
Stockholders' Equity		$		146,044			$		144,670			$	143,810			$		142,056			$		140,695			$	146,044			$	140,695
Less Goodwill and other intangibles				16,635					16,715				16,795					16,878					16,961				16,635				16,961
Tangible Common Equity		$		129,409			$		127,955			$	127,015			$		125,178			$		123,734			$	129,409			$	123,734
Shares outstanding				6,215,511					6,344,657				6,379,323					6,378,110					6,369,467				6,215,511				6,369,467
Tangible book value per share		$		20.82			$		20.17			$	19.91			$		19.63			$		19.43			$	20.82			$	19.43
Reconciliation of Average Equity to Return on Average Tangible Common Equity
	For the Three Months Ended																										For the Six Months Ended
			June 30,					March 31,					December 31,				September 30,					June 30,					June 30,				June 30,
			2021					2021					2020				2020					2020					2021				2020
Average Stockholders' Equity		$		146,719			$		145,065			$	146,374			$		144,167			$		139,212			$	145,892			$	139,287
Less Average Goodwill and other intangibles				16,674					16,754				16,836					16,919					17,002				16,714				17,043
Average Tangible Common Equity		$		130,045			$		128,311			$	129,538			$		127,248			$		122,210			$	129,178			$	122,244
Net income		$		4,425			$		4,167			$	2,489			$		1,853			$		2,966			$	8,592			$	4,007
Return on average tangible common equity (annualized)				13.65	%				13.17	%			7.64	%				5.79	%				9.76	%			13.41	%			6.59	%
Reconciliation of Pre-Tax Pre-Provision Income (PTPP)
	For the Three Months Ended																										For the Six Months Ended
			June 30,					March 31,					December 31,				September 30,					June 30,					June 30,				June 30,
			2021					2021					2020				2020					2020					2021				2020
Net income		$		4,425			$		4,167			$	2,489			$		1,853			$		2,966			$	8,592			$	4,007
Add Income Taxes				968					896				467					295					565				1,864				639
Add Provision for loan losses				200					700				2,100					4,000					1,000				900				3,740
PTPP		$		5,593			$		5,763			$	5,056			$		6,148			$		4,531			$	11,356			$	8,386

 

MIDDLEFIELD BANC CORP.
Average Balance Sheets
(Dollar amounts in thousands, unaudited)
		For the Three Months Ended
		June 30,														June 30,
		2021														2020
		Average										Average				Average										Average
		Balance					Interest					Yield/Cost				Balance					Interest					Yield/Cost
Interest-earning assets:
Loans receivable (3)		$	1,078,866				$	11,885				4.43	%			$	1,092,095				$	12,281				4.53	%
Investment securities (3)			135,338					1,012				3.47	%				107,765					840				3.76	%
Interest-earning deposits with other banks (4)			85,245					39				0.18	%				58,541					34				0.23	%
Total interest-earning assets			1,299,449					12,936				4.05	%				1,258,401					13,155				4.27	%
Noninterest-earning assets			70,692														62,976
Total assets		$	1,370,141													$	1,321,377
Interest-bearing liabilities:
Interest-bearing demand deposits		$	207,080				$	64				0.12	%			$	129,917				$	112				0.35	%
Money market deposits			185,728					212				0.46	%				164,434					381				0.93	%
Savings deposits			253,612					38				0.06	%				198,967					104				0.21	%
Certificates of deposit			233,930					696				1.19	%				350,298					1,739				2.00	%
Short-term borrowings			227					-				0.00	%				55,973					32				0.23	%
Other borrowings			13,062					39				1.20	%				15,615					62				1.60	%
Total interest-bearing liabilities			893,639					1,049				0.47	%				915,204					2,430				1.07	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			323,590														262,575
Other liabilities			6,193														4,311
Stockholders' equity			146,719														139,287
Total liabilities and stockholders' equity		$	1,370,141													$	1,321,377
Net interest income							$	11,887													$	10,725
Interest rate spread (1)												3.58	%													3.20	%
Net interest margin (2)												3.72	%													3.49	%
Ratio of average interest-earning assets to
average interest-bearing liabilities												145.41	%													137.50	%
(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 $179 and $190 for the three months ended June 30, 2021 and 2020, respectively
(4) Includes dividends received on restricted stock.
		For the Three Months Ended
		June 30,														March 31,
		2021														2021
		Average										Average				Average										Average
		Balance					Interest					Yield/Cost				Balance					Interest					Yield/Cost
Interest-earning assets:
Loans receivable (3)		$	1,078,866				$	11,885				4.43	%			$	1,103,373				$	12,167				4.48	%
Investment securities (3)			135,338					1,012				3.47	%				116,510					928				3.75	%
Interest-earning deposits with other banks (4)			85,245					39				0.18	%				93,709					47				0.20	%
Total interest-earning assets			1,299,449					12,936				4.05	%				1,313,592					13,142				4.11	%
Noninterest-earning assets			70,692														71,007
Total assets		$	1,370,141													$	1,384,599
Interest-bearing liabilities:
Interest-bearing demand deposits		$	207,080				$	64				0.12	%			$	203,047				$	78				0.16	%
Money market deposits			185,728					212				0.46	%				195,275					228				0.47	%
Savings deposits			253,612					38				0.06	%				256,151					47				0.07	%
Certificates of deposit			233,930					696				1.19	%				269,493					852				1.28	%
Short-term borrowings			227					-				0.00	%				111					-				0.00	%
Other borrowings			13,062					39				1.20	%				14,258					39				1.11	%
Total interest-bearing liabilities			893,639					1,049				0.47	%				938,335					1,244				0.54	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			323,590														295,199
Other liabilities			6,193														6,000
Stockholders' equity			146,719														145,065
Total liabilities and stockholders' equity		$	1,370,141													$	1,384,599
Net interest income							$	11,887													$	11,898
Interest rate spread (1)												3.58	%													3.57	%
Net interest margin (2)												3.72	%													3.73	%
Ratio of average interest-earning assets to
average interest-bearing liabilities												145.41	%													139.99	%
(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 $179 and $169 for the three months ended June 30, 2021, and March 31, 2021, respectively.
(4) Includes dividends received on restricted stock.
		For the Six Months Ended
		June 30,														June 30,
		2021														2020
		Average										Average				Average										Average
		Balance					Interest					Yield/Cost				Balance					Interest					Yield/Cost
Interest-earning assets:
Loans receivable (3)		$	1,091,119				$	24,052				4.45	%			$	1,038,064				$	24,359				4.73	%
Investment securities (3)			125,924					1,940				3.60	%				106,829					1,626				3.69	%
Interest-earning deposits with other banks (4)			89,477					86				0.19	%				50,129					179				0.72	%
Total interest-earning assets			1,306,520					26,078				4.08	%				1,195,022					26,164				4.47	%
Noninterest-earning assets			70,850														63,990
Total assets		$	1,377,370													$	1,259,012
Interest-bearing liabilities:
Interest-bearing demand deposits		$	205,063				$	141				0.14	%			$	121,804				$	229				0.38	%
Money market deposits			190,502					441				0.47	%				161,221					934				1.17	%
Savings deposits			254,882					85				0.07	%				191,052					331				0.35	%
Certificates of deposit			251,711					1,548				1.24	%				362,082					3,707				2.06	%
Short-term borrowings			169					-				0.00	%				35,390					67				0.38	%
Other borrowings			13,660					78				1.15	%				14,159					138				1.96	%
Total interest-bearing liabilities			915,987					2,293				0.50	%				885,708					5,406				1.23	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			309,395														228,993
Other liabilities			6,096														5,024
Stockholders' equity			145,892														139,287
Total liabilities and stockholders' equity		$	1,377,370													$	1,259,012
Net interest income							$	23,785													$	20,758
Interest rate spread (1)												3.58	%													3.24	%
Net interest margin (2)												3.72	%													3.56	%
Ratio of average interest-earning assets to
average interest-bearing liabilities												142.64	%													134.92	%
(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 $347 and $379 for the six months ended June 30, 2021 and 2020, respectively.
(4) Includes dividends received on restricted stock.