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MBT Financial Corp. Announces 20% Increase in Annual Earnings and Increases in Quarterly and Special Dividends

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MONROE, Mich., Feb. 02, 2017 (GLOBE NEWSWIRE) -- MBT Financial Corp., (Nasdaq: MBTF), the parent company of Monroe Bank & Trust, reported a preliminary net profit of $3,578,000 ($0.16 per share, basic and diluted), in the fourth quarter of 2016, compared to a profit of $4,014,000 ($0.18 per share, basic and diluted), in the fourth quarter of 2015. The full year profit in 2016 was $14,501,000 ($0.64 per share, basic and $0.63 per share, diluted) compared to $12,082,000 ($0.53 per share, basic and diluted) in 2015.

The Company also announced that it increased its quarterly dividend from $0.04 to $0.05 this quarter, and that it will pay a special dividend of $0.70 per share. The two dividends will be paid as a single distribution of $0.75 on February 21, 2017 to shareholders of record as of February 14, 2017. The Company paid a quarterly dividend of $0.03 and a special dividend of $0.50, with the increased dividend payments representing a 41.5% increase from the prior year same period.

Although Net Interest Income increased and non-interest expenses decreased compared to the fourth quarter of 2015, Net Income for the Company decreased this quarter due to the larger adjustment to the Allowance for Loan Losses last year. The net interest margin increased from 3.11% to 3.14% and the average amount of interest earning assets increased $18.8 million. As a result, the net interest income increased $246,000, or 2.6% in the fourth quarter of 2016 compared to the fourth quarter of 2015. 

The provision for loan losses increased $1,000,000 compared to the fourth quarter of 2015 from a negative expense of $2,000,000 in the fourth quarter of 2015 to a negative expense of $1,000,000 recorded this quarter. Classified assets decreased 24% during the fourth quarter and the analysis of the risk in the loan portfolio indicated a need to reduce the Allowance for Loan Losses again this quarter. Total Loans decreased $3.5 million during the fourth quarter, and the continued improvement in asset quality and historical loss ratios enabled the Company to reduce the Allowance for Loan and Lease Losses from 1.43% of loans at the end of the third quarter to 1.30% as of the end of the fourth quarter of 2016.

Non-interest income, excluding Other Real Estate and securities gains and losses was unchanged at $3.8 million in the fourth quarter of 2016 compared to the fourth quarter of 2015. Securities gains and losses decreased $132,000 and total non-interest income decreased $114,000 or 2.9%.

Total non-interest expenses decreased $216,000, or 2.3% in the fourth quarter of 2016 compared to the fourth quarter of 2015. Salaries and benefits increased $135,000 or 2.3% while the FDIC deposit insurance assessment decreased $147,000 and other insurance expense decreased $83,000.

Total assets of the company increased $15.0 million, or 1.1% compared to December 31, 2015. Capital decreased $6.2 million during the year as the payment of the special and regular dividends slightly exceeded the net income and the Accumulated Other Comprehensive Loss (AOCL) component of capital caused a decrease of $5.2 million due to the decrease in the value of AFS securities. The securities valuation decreased as market interest rates increased during the fourth quarter of 2016. The ratio of equity to assets decreased from 10.98% at the end of 2015 to 10.40% at the end of 2016. The Bank's Tier 1 Leverage ratio decreased from 10.91% as of December 31, 2015 to 10.75% as of December 31, 2016.

H. Douglas Chaffin, President and CEO, commented, "We are pleased with our results in 2016, especially the recent trend of improving net interest margin, the reduction in classified assets, and the non-interest expense reduction. Our loan portfolio grew $34.2 million, or 5.5% during 2016, and we plan to continue our focus on loan growth in 2017.  The increase in our quarterly dividend and the payment of another special dividend reflect our efforts to actively manage our capital while we look for the right opportunities to grow throughout our existing branch network and strategic acquisitions.  We remain confident in our ability to maintain our position as the premier independent provider of financial services in the communities we serve, despite challenges in our current environment."

Conference Call
MBT Financial Corp. will hold a conference call to discuss the Fourth Quarter 2016 results on Friday, February 3, 2017, 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 (877) 510-3783. The toll free number for callers in Canada is (855) 669-9657 and international callers can access the call at (412) 902-4136. A replay will be available one hour after the conclusion of the call at (877) 344-7529, Conference #10098512. The replay will be available until March 3, 2017 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 $1.3 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 employee volunteers contribute between 8,000 to 9,000 hours of community service annually. 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 Michigan Bankers Association ranks MBT fourth among all Michigan banks for total trust assets.  With offices and ATMs in Monroe, Lenawee, and Wayne Counties, 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 World Class Banking with a Local Address. 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  
          2016       2016       2016       2016       2015            
(dollars in thousands except per share data)   4th Qtr   3rd Qtr   2nd Qtr   1st Qtr   4th Qtr     2016       2015    
                                   
EARNINGS                              
  Net interest income   $ 9,574     $ 9,515     $ 9,244     $ 9,290     $ 9,328     $   37,623     $ 36,975    
  FTE Net interest income   $ 9,731     $ 9,671     $ 9,393     $ 9,438     $ 9,469     $ 38,233     $ 37,514    
  Provision for loan and lease losses   $ (1,000 )   $ (700 )   $ (200 )   $ (300 )   $ (2,000 )   $ (2,200 )   $ (3,000 )  
  Non interest income   $ 3,805     $ 4,039     $ 5,555     $ 4,114     $ 3,919     $ 17,513     $ 15,327    
  Non interest expense   $ 9,269     $ 8,974     $ 8,872     $ 9,483     $ 9,485     $ 36,598     $ 38,200    
  Net income   $ 3,578     $ 3,687     $ 4,239     $ 2,997     $ 4,014     $ 14,501     $ 12,082    
  Basic earnings per share   $ 0.16     $ 0.16     $ 0.19     $ 0.13     $ 0.18     $ 0.64     $ 0.53    
  Diluted earnings per share   $ 0.16     $ 0.16     $ 0.18     $ 0.13     $ 0.18     $ 0.63     $ 0.53    
  Average shares outstanding     22,738,718       22,733,134       22,884,350       22,854,556       22,764,801       22,802,325       22,742,476    
  Average diluted shares outstanding     22,905,786       22,915,278       23,049,718       23,014,957       22,967,108       22,937,193       22,916,754    
                                   
PERFORMANCE RATIOS                              
  Return on average assets     1.07 %     1.10 %     1.28 %     0.91 %     1.22 %     1.09 %     0.94 %  
  Return on average common equity     9.57 %     9.98 %     11.87 %     8.57 %     10.79 %     10.00 %     8.54 %  
                                   
  Base Margin     3.07 %     3.07 %     3.03 %     3.04 %     3.04 %     3.05 %     3.06 %  
  FTE Adjustment     0.05 %     0.05 %     0.05 %     0.05 %     0.05 %     0.05 %     0.05 %  
  Loan Fees     0.02 %     -0.01 %     0.02 %     0.00 %     0.02 %     0.01 %     0.05 %  
  FTE Net Interest Margin     3.14 %     3.11 %     3.10 %     3.09 %     3.11 %     3.11 %     3.16 %  
                                   
  Efficiency ratio     68.18 %     65.59 %     67.83 %     69.75 %     72.10 %     67.83 %     71.68 %  
  Full-time equivalent employees     277       281       288       288       297       284       335    
                                   
CAPITAL                              
  Average equity to average assets     11.21 %     11.05 %     10.80 %     10.65 %     11.34 %     10.93 %     11.03 %  
  Book value per share   $ 6.20     $ 6.49     $ 6.41     $ 6.22     $ 6.46     $ 6.20     $ 6.46    
  Cash dividend per share   $ 0.04     $ 0.04     $ 0.03     $ 0.53     $ -     $ 0.64     $ -    
                                   
ASSET QUALITY                              
  Loan Charge-Offs   $ 522     $ 114     $ 618     $ 209     $ 1,191     $ 1,463     $ 2,112    
  Loan Recoveries   $ 575     $ 316     $ 184     $ 150     $ 1,091     $ 1,225     $ 2,800    
  Net Charge-Offs   $ (53 )   $ (202 )   $ 434     $ 59     $ 100     $ 238     $ (688 )  
                                   
  Allowance for loan and lease losses   $ 8,458     $ 9,405     $ 9,903     $ 10,537     $ 10,896     $ 8,458     $ 10,896    
                                   
  Nonaccrual Loans   $ 4,656     $ 6,545     $ 7,522     $ 8,079     $ 8,633     $ 4,656     $ 8,633    
  Loans 90 days past due   $ 10     $ 32     $ 41     $ 17     $ 4     $ 10     $ 4    
  Restructured loans   $ 14,161     $ 15,923     $ 16,701     $ 17,828     $ 18,910     $ 14,161     $ 18,910    
    Total non performing loans   $ 18,827     $ 22,500     $ 24,264     $ 25,924     $ 27,547     $ 18,827     $ 27,547    
  Other real estate owned & other assets   $ 1,634     $ 1,696     $ 1,818     $ 1,608     $ 2,383     $ 1,634     $ 2,383    
    Total non performing assets   $ 20,461     $ 24,196     $ 26,082     $ 27,532     $ 29,930     $ 20,461     $ 29,930    
                                   
  Classified Loans   $ 14,971     $ 20,151     $ 24,365     $ 26,768     $ 28,490     $ 14,971     $ 28,490    
  Other real estate owned & other assets   $ 1,634     $ 1,696     $ 1,818     $ 1,608     $ 2,383     $ 1,634     $ 2,383    
    Total classified assets   $ 16,605     $ 21,847     $ 26,183     $ 28,376     $ 30,873     $ 16,605     $ 30,873    
                                   
  Net loan charge-offs to average loans     -0.03 %     -0.12 %     0.28 %     0.04 %     0.06 %     0.04 %     -0.11 %  
  Allowance for loan losses to total loans     1.30 %     1.43 %     1.55 %     1.70 %     1.76 %     1.30 %     1.76 %  
  Non performing loans to gross loans     2.88 %     3.43 %     3.80 %     4.19 %     4.45 %     2.88 %     4.45 %  
  Non performing assets to total assets     1.51 %     1.80 %     1.97 %     2.06 %     2.23 %     1.51 %     2.23 %  
  Classified assets to total capital     10.95 %     14.61 %     17.70 %     19.65 %     20.04 %     10.95 %     20.04 %  
  Allowance to non performing loans     44.92 %     41.80 %     40.81 %     40.65 %     39.55 %     44.92 %     39.55 %  
                                   
END OF PERIOD BALANCES                              
  Loans and leases   $ 652,948     $ 656,445     $ 639,199     $ 618,613     $ 618,785     $ 652,948     $ 618,785    
  Total earning assets   $ 1,239,439     $ 1,232,863     $ 1,214,557     $ 1,227,990     $ 1,231,128     $ 1,239,439     $ 1,231,128    
  Total assets   $ 1,357,283     $ 1,343,026     $ 1,323,415     $ 1,334,131     $ 1,342,313     $ 1,357,283     $ 1,342,313    
  Deposits   $ 1,199,717     $ 1,180,461     $ 1,163,418     $ 1,162,733     $ 1,165,393     $ 1,199,717     $ 1,165,393    
  Interest Bearing Liabilities   $ 920,716     $ 894,697     $ 893,027     $ 918,593     $ 926,598     $ 920,716     $ 926,598    
  Shareholders' equity   $ 141,114     $ 147,662     $ 145,623     $ 142,424     $ 147,341     $ 141,114     $ 147,341    
  Tier 1 Capital (Bank)   $ 143,123     $ 140,131     $ 138,059     $ 133,870     $ 143,175     $ 143,123     $ 143,175    
  Total Shares Outstanding     22,777,882       22,736,116       22,728,558       22,902,198       22,790,707       22,777,882     $ 22,790,707    
                                   
AVERAGE BALANCES                              
  Loans and leases   $ 654,077     $ 652,163     $ 625,435     $ 620,010     $ 621,217     $ 638,006     $ 620,811    
  Total earning assets   $ 1,230,134     $ 1,234,255     $ 1,218,569     $ 1,227,703     $ 1,211,342     $ 1,227,692     $ 1,190,599    
  Total assets   $ 1,326,623     $ 1,329,284     $ 1,329,935     $ 1,320,975     $ 1,302,176     $ 1,326,710     $ 1,283,078    
  Deposits   $ 1,174,024     $ 1,178,941     $ 1,173,998     $ 1,164,320     $ 1,139,475     $ 1,172,839     $ 1,129,191    
  Interest Bearing Liabilities   $ 891,510     $ 905,082     $ 920,340     $ 926,618     $ 902,216     $ 910,818     $ 907,368    
  Shareholders' equity   $ 148,765     $ 146,926     $ 143,685     $ 140,684     $ 147,626     $ 145,030     $ 141,460    
                                   

 

MBT FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
                     
        Quarter Ended December 31,   Year Ended December 31
Dollars in thousands (except per share data)   2016       2015       2016       2015  
Interest Income              
Interest and fees on loans $ 7,513     $ 7,201     $ 29,265     $ 29,012  
Interest on investment securities-              
  Tax-exempt   317       290       1,241       1,116  
  Taxable   2,077       2,507       8,791       9,808  
Interest on balances due from banks   112       41       562       105  
      Total interest income   10,019       10,039       39,859       40,041  
                     
Interest Expense              
Interest on deposits   445       533       1,928       2,359  
Interest on borrowed funds   -       178       308       707  
      Total interest expense   445       711       2,236       3,066  
                     
Net Interest Income   9,574       9,328       37,623       36,975  
Provision For Loan Losses   (1,000 )     (2,000 )     (2,200 )     (3,000 )
                     
Net Interest Income After              
Provision For Loan Losses   10,574       11,328       39,823       39,975  
                     
Other Income              
Income from wealth management services   1,106       1,152       4,453       4,728  
Service charges and other fees   1,079       1,115       4,221       4,173  
Debit Card income   701       689       2,831       2,438  
Net gain on sales of securities   (8 )     124       2,151       398  
Net gain (loss) on other real estate owned   (24 )     (36 )     (85 )     (284 )
Origination fees on mortgage loans sold   125       129       540       579  
Bank Owned Life Insurance income   356       362       1,425       1,353  
Other     470       384       1,977       1,942  
      Total other income   3,805       3,919       17,513       15,327  
                     
Other Expenses              
Salaries and employee benefits   5,912       5,777       22,443       23,095  
Occupancy expense   728       696       2,730       2,770  
Equipment expense   738       794       2,879       3,026  
Marketing expense   319       283       1,144       1,104  
Professional fees   471       523       2,138       2,130  
EFT/ATM expense   241       247       1,022       563  
Other real estate owned expense   19       8       148       372  
FDIC deposit insurance assessment   28       175       567       1,230  
Bonding and other insurance expense   123       206       577       866  
Telephone expense   101       105       413       422  
Other     589       671       2,537       2,622  
      Total other expenses   9,269       9,485       36,598       38,200  
                     
Profit Before Income Taxes   5,110       5,762       20,738       17,102  
Income Tax Expense   1,532       1,748       6,237       5,020  
Net Profit $ 3,578     $ 4,014     $ 14,501     $ 12,082  
                     
Basic Earnings Per Common Share $ 0.16     $ 0.18     $ 0.64     $ 0.53  
                     
Diluted Earnings Per Common Share $ 0.16     $ 0.18     $ 0.63     $ 0.53  
                     
Dividends Declared Per Common Share $ 0.04     $ -     $ 0.64     $ -  
                     

 

MBT FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
             
        (Unaudited)    
Dollars in thousands December 31, 2016   December 31, 2015
Assets        
Cash and Cash Equivalents      
  Cash and due from banks      
    Non-interest bearing $ 18,183     $ 14,996  
    Interest bearing   34,589       64,554  
    Total cash and cash equivalents   52,772       79,550  
             
Interest Bearing Time Deposits in Other Banks   18,946       5,500  
Securities - Held to Maturity   40,741       41,282  
Securities - Available for Sale   488,067       496,859  
Federal Home Loan Bank stock - at cost   4,148       4,148  
Loans held for sale   611       1,477  
             
Loans     652,337       617,308  
Allowance for Loan Losses   (8,458 )     (10,896 )
Loans - Net   643,879       606,412  
             
Accrued interest receivable and other assets   24,901       23,365  
Other Real Estate Owned   1,634       2,383  
Bank Owned Life Insurance   54,415       53,093  
Premises and Equipment - Net   27,169       28,244  
    Total assets $ 1,357,283     $ 1,342,313  
             
Liabilities      
Deposits:      
  Non-interest bearing $ 279,001     $ 253,795  
  Interest-bearing   920,716       911,598  
    Total deposits   1,199,717       1,165,393  
             
Repurchase agreements   -       15,000  
Accrued interest payable and other liabilities   16,452       14,579  
    Total liabilities   1,216,169       1,194,972  
             
Shareholders' Equity      
Common stock (no par value)   22,562       23,492  
Retained Earnings   126,079       126,214  
Unearned Compensation   (4 )     (13 )
Accumulated other comprehensive income (loss)   (7,523 )     (2,352 )
    Total shareholders' equity   141,114       147,341  
    Total liabilities and shareholders' equity $ 1,357,283     $ 1,342,313  
                   


FOR FURTHER INFORMATION:
H. Douglas Chaffin
Chief Executive Officer
(734) 384-8123
doug.chaffin@mbandt.com

John L. Skibski
Chief Financial Officer
(734) 242-1879
john.skibski@mbandt.com	 

Julian J. Broggio
Director of Marketing
(734) 240-2341
julian.broggio@mbandt.com 

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