MONROE, Mich., Jan. 29, 2009 (GLOBE NEWSWIRE) -- Today, the Board of Directors of MBT Financial Corp.(Nasdaq:MBTF), parent company for Monroe Bank and Trust, directed the withdrawal of its application for funding under the Capital Purchase Program (CPP) of the U.S. Treasury's Troubled Asset Relief Plan (TARP).

"Our Board of Directors originally agreed to submit an application to allow time to fully review the pros and cons of the program," said H. Douglas Chaffin, President & CEO. "After a full evaluation, we determined that it was in the best interest of our company and our shareholders to withdraw its application for the CPP for the following reasons:



 1. Monroe Bank & Trust continues to be a well-capitalized institution,
    and we have ample liquidity on our balance sheet to meet the needs
    of our customers. We have enhanced that liquidity further with our
    participation in the FDIC's Transaction Account Guarantee Program,
    the option to utilize the Temporary Liquidity Guarantee Program,
    and the recent purchase of the deposits of the former Main Street
    Bank in Plymouth and Northville.
 2. Loan demand in our market area is slow, as businesses and
    individuals are cautious to avoid discretionary spending of all
    kinds in this economic climate.
 3. The costs of participating in the CPP are significant. If fully
    funded, our company would incur approximately $1.6 million annually
    of preferred stock dividend expense payable to the United States
    Treasury. To make matters worse, that payment would not be tax
    deductible thereby raising the real cost even higher. And, if the
    CPP money received from the government is not repaid within five
    years, the annual cost would nearly double to approximately $3
    million.
 4. In addition to the dilution of earnings outlined above, there would
    be a dilution to the value of shares held by our existing common
    shareholders. The CPP also requires the issuance of Common Stock
    Warrants. These warrants total 15% of the Senior Preferred Stock
    issued, and at current valuations would dilute our current
    shareholder's value by almost 10%.
 5. Under the agreement contained in this program, MBTF would be
    restricted from increasing dividends during the term of the CPP
    without the approval of the U.S. Treasury.
 6. There is a growing sentiment in Congress to place limitations
    and/or requirements on the use of CPP funding. While we anticipate
    a significant increase in regulatory burdens that will affect all
    financial institutions, the prospect of specific requirements
    concerning the use of CPP funding is of great concern to our
    Board. As outlined in the agreement, requirements or limitations
    could be imposed now or at some undetermined time in the future.
    We have increasing concerns that these impositions would not
    necessarily be based upon safe and sound banking principles."

Mr. Chaffin further stated that, "Our national and local economies remain uncertain. Our projections for the next two years, however, indicate that we will have ample capital and liquidity necessary to meet the needs of our local markets. These projections have considered low growth, and elevated levels of credit-related costs compared to historical averages. There are valid reasons for healthy institutions to participate in TARP, and each company must make an individual assessment of the merits to participate. However, given all issues outlined above, we feel that this decision is in the best interest of our shareholders."

About the Company

MBT Financial Corp. (Nasdaq:MBTF), a single 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 full service community banks in southeast Michigan, with more than $1.5 billion in assets, offering personal and business products and services, and complete credit options. MBT's Wealth Management Group is one of the area's largest trust departments with over $800 million in assets under management. With 27 offices, 45 ATMs, PhoneLink telephone banking and eLink online banking, MBT prides itself on an incomparable level of service and access for its customers. Visit MBT's web site at www.MBandT.com.

The MBT Financial Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4214

Monroe Bank & Trust
H. Douglas Chaffin, President and CEO
  734-384-8123
John L. Skibski, Executive Vice President, CFO
  734-242-1879