MONROE, Mich., July 24, 2014 (GLOBE NEWSWIRE) -- MBT Financial Corp., (Nasdaq:MBTF), the parent company of Monroe Bank & Trust, reported a profit of $1,687,000, or $0.08 per share (basic and diluted) for the second quarter of 2014, compared to the profit for the second quarter of 2013 of $1,496,000, or $0.08 per share (basic and diluted). The profit for the six months ended June 30, 2014 was $3,454,000, or $0.16 per share (basic and diluted), compared to $2,610,000, or $0.15 per share (basic and diluted) for the six months ended June 30, 2013.
Earnings for the Company improved this quarter due to an increase in the net interest income, a decrease in the provision for loan losses, and an increase in non-interest income. The net interest margin increased from 2.92% in the second quarter of 2013 to 3.15% in the second quarter of 2014 as the yield on earning assets was unchanged and the cost of interest bearing liabilities decreased. The provision for loan losses decreased from $400,000 in the second quarter of 2013 to $100,000 in the second quarter of 2014 due to the significant improvement in asset quality. The improvement in loan quality over the past year allowed the Company to reduce the Allowance for Loan and Lease Losses $2.2 million, lowering the ALLL from 2.79% of loans at the end of the second quarter of 2013 to what remains a robust 2.50% as of the end of the second quarter of 2014.
Non-interest income increased $342,000, or 10.5% in the second quarter of 2014 compared to the second quarter of 2013. Excluding gains and losses from securities and other real estate transactions, non-interest income decreased $128,000, or 3.3% as deposit account fees decreased $90,000 and mortgage loan origination income decreased $96,000. Wealth Management fees increased $87,000, or 8.0% as the market value of assets under management increased.
Total non-interest expenses increased $356,000, or 3.8% in the second quarter of 2014 compared to the second quarter of 2013, primarily due to an increase of $590,000, or 11.3% in salaries and benefits as the accrual for the Officer Incentive Plan increased by $262,000. This increase was partially offset by reductions in occupancy expense, equipment expense, professional fees, FDIC Deposit insurance, bonding expense, telephone expense, and other non-interest expense.
Total assets of the company decreased $12.9 million compared to December 31, 2013. Total loans increased $1.0 million since the end of 2013. New loan originations in the second quarter exceeded the reductions experienced in the first quarter, reflecting a $7.8 million increase on a linked quarter basis Capital increased $18.2 million since the end of last year due to the year to date profit of $3.5 million, the issuance of $8.2 million of common stock, and the decrease of $6.6 million in the Accumulated Other Comprehensive Loss (AOCL). The AOCL decreased due to an increase in the market values of our investment securities that are classified as available for sale. The ratio of equity to assets increased from 9.05% at the end of 2013 to 10.65% at June 30, 2014. The Bank's Tier 1 Leverage ratio increased from 8.48% as of December 31, 2013 to 9.24% as of June 30, 2014. This met the requirement of the Consent Order that was issued by the Bank's regulators in 2010, and that order was terminated by the regulators effective June 30, 2014.
Economic conditions in southeast Michigan continue to improve, and this quarter we experienced another improvement in problem assets. During the second quarter of 2014, non-performing assets decreased $8.4 million, or 12.3%. Total classified assets, which include internal watch list loans, other real estate, and our portfolio of pooled trust preferred CDO securities, decreased $7.4 million, or 8.4% compared to last quarter and $34.8 million, or 30.1% compared to a year ago. The classified assets to total capital ratio decreased from 114.76% a year ago to 63.80% in the second quarter of 2014 due to the improvement in both classified assets and total capital.
H. Douglas Chaffin, President and CEO, commented, "This quarter we experienced some significant accomplishments, including the completion of our capital offering, the termination of our regulatory Consent Order, the opening of our first office in Lenawee County, an increase in our total loans, another profit, and improvement in most of our asset quality metrics. Our existing commercial loan pipeline remains strong, and we continue to have a solid deposit base and a very liquid balance sheet, which has us well positioned for increased lending activity.
Mr. Chaffin concluded, "Local and national economic indicators continue to improve, and we are cautiously monitoring the recent signs of relative strength in the local and regional recovery. While we remain concerned about the effect of global and national issues on our local economy, we are optimistic that our progress will continue throughout 2014. We will continue to focus our efforts on improving asset quality and maintaining liquidity, and also increase our efforts to improve profitability by growing our loan portfolio and improving our operational efficiency. Our current environment still presents challenges, but we remain confident in our ability to maintain our position as the premier independent provider of financial services in the communities we serve."
Conference Call
MBT Financial Corp. will hold a conference call to discuss the second quarter results on Friday, July 25, 2014, at 10:00 a.m. Eastern Time. The call will be webcast and can be accessed at the Investor Relations/Corporate Profile page of MBT Financial Corp.'s web site www.mbandt.com. The call can also be accessed in the United States by calling toll free (888) 317-6016. The toll free number for callers in Canada is (855) 669-9657 and international callers can access the call at (412) 317-6016. A replay will be available one hour after the conclusion of the call at (877) 344-7529, Conference #10048054. The replay will be available until August 29, 2014 at 9:00 a.m. Eastern. The webcast will be archived on the Company's web site and available for twelve months following the call.
About the Company:
MBT Financial Corp. (Nasdaq:MBTF), a bank holding company headquartered in Monroe, Michigan, is the parent company of Monroe Bank & Trust ("MBT"). Founded in 1858, MBT is one of the largest independently owned community banks in Southeast Michigan. With over $1.2 billion in assets, MBT is a full-service bank, offering a complete range of business and personal accounts, credit and mortgage options, investment and retirement services and award-winning financial literacy outreach. MBT's Commercial Lending Group is a top SBA lending partner. MBT's Wealth Management Group ("WMG") is one of the largest and most respected in Michigan. The WMG has been listed as a Top Money Management firm for assets under management by Crain's Detroit Business, and is ranked fourth by the Michigan Bankers Association for total assets managed by banks headquartered in Michigan. With 25 offices, 47 ATMs, convenient mobile and online banking, a robust online and social media presence and a comprehensive array of products and services, MBT prides itself in offering an incomparable banking experience. Visit MBT's website at www.mbandt.com.
Forward-Looking Statements
Certain statements contained herein are not based on historical facts and are "forward-looking statements" within the meaning of Section 21A of the Securities Exchange Act of 1934. Forward-looking statements which are based on various assumptions (some of which are beyond the Company's control), may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of these terms. Actual results could differ materially from those set forth in forward-looking statements, due to a variety of factors, including, but not limited to, those related to the economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset/liability management, change in the financial and securities markets, including changes with respect to the market value of our financial assets, the availability of and costs associated with sources of liquidity, and the ability of the Company to resolve or dispose of problem loans. The Company undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
| MBT FINANCIAL CORP. | |||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS - UNAUDITED | |||||||
| Quarterly | Year to Date | ||||||
| 2014 | 2014 | 2013 | 2013 | 2013 | |||
| (dollars in thousands except per share data) | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 2014 | 2013 |
| EARNINGS | |||||||
| Net interest income | $ 8,552 | $ 8,495 | $ 8,529 | $ 8,539 | $ 8,089 | $ 17,047 | $ 16,133 |
| FTE Net interest income | $ 8,693 | $ 8,640 | $ 8,670 | $ 8,680 | $ 8,226 | $ 17,333 | $ 16,411 |
| Provision for loan and lease losses | $ 100 | $ 100 | $ 100 | $ 200 | $ 400 | $ 200 | $ 1,900 |
| Non interest income | $ 3,584 | $ 3,664 | $ 3,735 | $ 3,484 | $ 3,242 | $ 7,248 | $ 7,270 |
| Non interest expense | $ 9,791 | $ 9,699 | $ 9,842 | $ 9,331 | $ 9,435 | $ 19,490 | $ 18,893 |
| Net income | $ 1,687 | $ 1,767 | $ 1,640 | $ 21,287 | $ 1,496 | $ 3,454 | $ 2,610 |
| Basic earnings per share | $ 0.08 | $ 0.08 | $ 0.09 | $ 1.19 | $ 0.08 | $ 0.16 | $ 0.15 |
| Diluted earnings per share | $ 0.08 | $ 0.08 | $ 0.09 | $ 1.17 | $ 0.08 | $ 0.16 | $ 0.15 |
| Average shares outstanding | 22,205,086 | 20,818,727 | 18,185,178 | 17,912,946 | 17,906,085 | 21,515,737 | 17,712,310 |
| Average diluted shares outstanding | 22,498,236 | 21,112,926 | 18,391,184 | 18,179,335 | 18,166,220 | 21,805,165 | 17,958,569 |
| PERFORMANCE RATIOS | |||||||
| Return on average assets | 0.57% | 0.60% | 0.56% | 7.19% | 0.49% | 0.58% | 0.42% |
| Return on average common equity | 5.50% | 6.34% | 6.32% | 104.82% | 6.95% | 5.90% | 6.14% |
| Base Margin | 3.08% | 3.11% | 3.15% | 3.07% | 2.83% | 3.09% | 2.79% |
| FTE Adjustment | 0.05% | 0.05% | 0.05% | 0.05% | 0.05% | 0.05% | 0.05% |
| Loan Fees | 0.02% | 0.02% | 0.03% | 0.05% | 0.04% | 0.02% | 0.04% |
| FTE Net Interest Margin | 3.15% | 3.18% | 3.23% | 3.17% | 2.92% | 3.16% | 2.88% |
| Efficiency ratio | 75.85% | 76.14% | 77.84% | 72.25% | 75.57% | 75.99% | 75.00% |
| Full-time equivalent employees | 367 | 371 | 374 | 367 | 364 | 369 | 365 |
| CAPITAL | |||||||
| Average equity to average assets | 10.28% | 9.47% | 8.89% | 6.86% | 7.08% | 9.88% | 6.87% |
| Book value per share | $ 5.68 | $ 5.55 | $ 5.37 | $ 5.63 | $ 4.42 | $ 5.68 | $ 4.42 |
| Cash dividend per share | $ -- | $ -- | $ -- | $ -- | $ -- | $ -- | $ -- |
| ASSET QUALITY | |||||||
| Loan Charge-Offs | $ 1,662 | $ 674 | $ 1,040 | $ 1,324 | $ 1,673 | $ 2,336 | $ 3,260 |
| Loan Recoveries | $ 405 | $ 523 | $ 383 | $ 695 | $ 569 | $ 928 | $ 1,256 |
| Net Charge-Offs | $ 1,257 | $ 151 | $ 657 | $ 629 | $ 1,104 | $ 1,408 | $ 2,004 |
| Allowance for loan and lease losses | $ 15,001 | $ 16,158 | $ 16,209 | $ 16,766 | $ 17,195 | $ 15,001 | $ 17,195 |
| Nonaccrual Loans | $ 19,048 | $ 23,108 | $ 23,710 | $ 28,010 | $ 32,051 | $ 19,048 | $ 32,051 |
| Loans 90 days past due | $ 4 | $ 29 | $ 46 | $ 4 | $ 12 | $ 4 | $ 12 |
| Restructured loans | $ 29,658 | $ 32,248 | $ 32,450 | $ 29,926 | $ 32,192 | $ 29,658 | $ 32,192 |
| Total non performing loans | $ 48,710 | $ 55,385 | $ 56,206 | $ 57,940 | $ 64,255 | $ 48,710 | $ 64,255 |
| Other real estate owned & other assets | $ 7,933 | $ 9,784 | $ 9,638 | $ 10,840 | $ 11,469 | $ 7,933 | $ 11,469 |
| Nonaccrual Investment Securities | $ 3,403 | $ 3,262 | $ 3,259 | $ 3,320 | $ 3,144 | $ 3,403 | $ 3,144 |
| Total non performing assets | $ 60,046 | $ 68,431 | $ 69,103 | $ 72,100 | $ 78,868 | $ 60,046 | $ 78,868 |
| Classified Loans | $ 63,665 | $ 69,111 | $ 71,939 | $ 78,076 | $ 94,793 | $ 63,665 | $ 94,793 |
| Other real estate owned & other assets | $ 7,933 | $ 9,784 | $ 9,638 | $ 10,840 | $ 11,469 | $ 7,933 | $ 11,469 |
| Classified Investment Securities | $ 9,379 | $ 9,505 | $ 9,509 | $ 9,513 | $ 9,517 | $ 9,379 | $ 9,517 |
| Total classified assets | $ 80,977 | $ 88,400 | $ 91,086 | $ 98,429 | $ 115,779 | $ 80,977 | $ 115,779 |
| Net loan charge-offs to average loans | 0.84% | 0.10% | 0.43% | 0.41% | 0.72% | 0.48% | 0.65% |
| Allowance for loan losses to total loans | 2.50% | 2.73% | 2.71% | 2.74% | 2.79% | 2.50% | 2.79% |
| Non performing loans to gross loans | 8.12% | 9.36% | 9.39% | 9.48% | 10.43% | 8.12% | 10.43% |
| Non performing assets to total assets | 4.96% | 5.62% | 5.65% | 6.02% | 6.78% | 4.96% | 6.78% |
| Classified assets to total capital | 63.80% | 73.15% | 78.90% | 94.54% | 114.76% | 63.80% | 114.76% |
| Allowance to non performing loans | 30.80% | 29.17% | 28.84% | 28.94% | 26.76% | 30.80% | 26.76% |
| END OF PERIOD BALANCES | |||||||
| Loans and leases | $ 599,803 | $ 592,024 | $ 598,258 | $ 611,094 | $ 615,828 | $ 599,803 | $ 615,828 |
| Total earning assets | $ 1,093,461 | $ 1,100,263 | $ 1,101,015 | $ 1,078,526 | $ 1,057,862 | $ 1,093,461 | $ 1,057,862 |
| Total assets | $ 1,209,831 | $ 1,217,812 | $ 1,222,682 | $ 1,198,132 | $ 1,162,672 | $ 1,209,831 | $ 1,162,672 |
| Deposits | $ 1,049,789 | $ 1,056,611 | $ 1,069,718 | $ 1,054,143 | $ 1,040,860 | $ 1,049,789 | $ 1,040,860 |
| Interest Bearing Liabilities | $ 869,843 | $ 873,532 | $ 880,874 | $ 894,134 | $ 881,584 | $ 869,843 | $ 881,584 |
| Shareholders' equity | $ 128,794 | $ 118,107 | $ 110,608 | $ 100,824 | $ 79,075 | $ 128,794 | $ 79,075 |
| Tier 1 Capital (Bank) | $ 111,929 | $ 104,691 | $ 99,242 | $ 87,343 | $ 83,693 | $ 111,929 | $ 83,693 |
| Total Shares Outstanding | 22,690,142 | 21,266,380 | 20,605,493 | 17,917,512 | 17,909,898 | 22,690,142 | 17,909,898 |
| AVERAGE BALANCES | |||||||
| Loans and leases | $ 598,392 | $ 596,925 | $ 603,972 | $ 611,229 | $ 617,978 | $ 597,664 | $ 620,197 |
| Total earning assets | $ 1,106,590 | $ 1,101,215 | $ 1,066,010 | $ 1,084,368 | $ 1,127,714 | $ 1,103,920 | $ 1,152,994 |
| Total assets | $ 1,196,912 | $ 1,192,791 | $ 1,157,156 | $ 1,175,090 | $ 1,219,133 | $ 1,194,863 | $ 1,246,515 |
| Deposits | $ 1,058,873 | $ 1,066,036 | $ 1,038,794 | $ 1,061,365 | $ 1,044,412 | $ 1,062,433 | $ 1,050,868 |
| Interest Bearing Liabilities | $ 880,030 | $ 884,809 | $ 867,590 | $ 894,835 | $ 937,639 | $ 882,405 | $ 966,268 |
| Shareholders' equity | $ 123,011 | $ 113,000 | $ 102,891 | $ 80,571 | $ 86,350 | $ 118,033 | $ 85,665 |
| MBT FINANCIAL CORP. | ||||
| CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED | ||||
| Quarter Ended June 30, | Six Months Ended June 30, | |||
| Dollars in thousands (except per share data) | 2014 | 2013 | 2014 | 2013 |
| Interest Income | ||||
| Interest and fees on loans | $ 7,021 | $ 7,599 | $ 14,100 | $ 15,501 |
| Interest on investment securities-- | ||||
| Tax-exempt | 297 | 310 | 604 | 633 |
| Taxable | 2,200 | 1,795 | 4,318 | 3,562 |
| Interest on balances due from banks | 22 | 37 | 54 | 106 |
| Total interest income | 9,540 | 9,741 | 19,076 | 19,802 |
| Interest Expense | ||||
| Interest on deposits | 801 | 1,115 | 1,656 | 2,328 |
| Interest on borrowed funds | 187 | 537 | 373 | 1,341 |
| Total interest expense | 988 | 1,652 | 2,029 | 3,669 |
| Net Interest Income | 8,552 | 8,089 | 17,047 | 16,133 |
| Provision For Loan Losses | 100 | 400 | 200 | 1,900 |
| Net Interest Income After | ||||
| Provision For Loan Losses | 8,452 | 7,689 | 16,847 | 14,233 |
| Other Income | ||||
| Income from wealth management services | 1,168 | 1,081 | 2,302 | 2,178 |
| Service charges and other fees | 968 | 1,058 | 1,900 | 2,100 |
| Debit Card income | 542 | 530 | 1,031 | 1,008 |
| Net gain on sales of securities | 219 | 154 | 276 | 164 |
| Net gain (loss) on other real estate owned | (342) | (747) | (330) | (707) |
| Origination fees on mortgage loans sold | 88 | 184 | 150 | 473 |
| Bank Owned Life Insurance income | 351 | 364 | 705 | 754 |
| Other real estate owned rent | 130 | 147 | 265 | 292 |
| Other | 460 | 471 | 949 | 1,008 |
| Total other income | 3,584 | 3,242 | 7,248 | 7,270 |
| Other Expenses | ||||
| Salaries and employee benefits | 5,804 | 5,214 | 11,532 | 10,537 |
| Occupancy expense | 670 | 722 | 1,414 | 1,409 |
| Equipment expense | 662 | 674 | 1,279 | 1,374 |
| Marketing expense | 212 | 205 | 415 | 368 |
| Professional fees | 521 | 550 | 939 | 1,051 |
| Other real estate owned expense | 361 | 293 | 700 | 667 |
| FDIC deposit insurance assessment | 620 | 694 | 1,260 | 1,383 |
| Bonding cost expense | 255 | 266 | 519 | 535 |
| Telephone expense | 104 | 130 | 247 | 243 |
| Other | 582 | 687 | 1,185 | 1,326 |
| Total other expenses | 9,791 | 9,435 | 19,490 | 18,893 |
| Profit Before Income Taxes | 2,245 | 1,496 | 4,605 | 2,610 |
| Income Tax Expense | 558 | -- | 1,151 | -- |
| Net Profit | $ 1,687 | $ 1,496 | $ 3,454 | $ 2,610 |
| Basic Earnings Per Common Share | $ 0.08 | $ 0.08 | $ 0.16 | $ 0.15 |
| Diluted Earnings Per Common Share | $ 0.08 | $ 0.08 | $ 0.16 | $ 0.15 |
| Dividends Declared Per Common Share | $ -- | $ -- | $ -- | $ -- |
| MBT FINANCIAL CORP. | ||
| CONSOLIDATED BALANCE SHEETS | ||
| June 30, 2014 | December 31, | |
| Dollars in thousands | (Unaudited) | 2013 |
| Assets | ||
| Cash and Cash Equivalents | ||
| Cash and due from banks | ||
| Non-interest bearing | $ 13,041 | $ 15,448 |
| Interest bearing | 13,675 | 62,350 |
| Total cash and cash equivalents | 26,716 | 77,798 |
| Securities - Held to Maturity | 33,378 | 34,846 |
| Securities - Available for Sale | 436,000 | 394,956 |
| Federal Home Loan Bank stock - at cost | 10,605 | 10,605 |
| Loans held for sale | 1,219 | 668 |
| Loans | 598,584 | 597,590 |
| Allowance for Loan Losses | (15,001) | (16,209) |
| Loans - Net | 583,583 | 581,381 |
| Accrued interest receivable and other assets | 30,537 | 34,094 |
| Other Real Estate Owned | 7,911 | 9,628 |
| Bank Owned Life Insurance | 51,114 | 50,493 |
| Premises and Equipment - Net | 28,768 | 28,213 |
| Total assets | $ 1,209,831 | $ 1,222,682 |
| Liabilities | ||
| Deposits: | ||
| Non-interest bearing | $ 194,946 | $ 215,844 |
| Interest-bearing | 854,843 | 853,874 |
| Total deposits | 1,049,789 | 1,069,718 |
| Federal Home Loan Bank advances | -- | 12,000 |
| Repurchase agreements | 15,000 | 15,000 |
| Accrued interest payable and other liabilities | 16,248 | 15,356 |
| Total liabilities | 1,081,037 | 1,112,074 |
| Shareholders' Equity | ||
| Common stock (no par value) | 22,859 | 14,671 |
| Retained Earnings | 110,271 | 106,817 |
| Unearned Compensation | (17) | (7) |
| Accumulated other comprehensive loss | (4,319) | (10,873) |
| Total shareholders' equity | 128,794 | 110,608 |
| Total liabilities and shareholders' equity | $ 1,209,831 | $ 1,222,682 |