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MBT Financial Corp. Announces Second Quarter 2017 Earnings and Increased Quarterly Dividend

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MONROE, Mich,, July 27, 2017 (GLOBE NEWSWIRE) -- MBT Financial Corp., (NASDAQ:MBTF), the parent company of Monroe Bank & Trust, reported a preliminary net profit of $3,640,000 ($0.16 per share, basic and diluted), in the second quarter of 2017, compared to a profit of $4,239,000 ($0.19 per share, basic and $0.18 per share, diluted), in the second quarter of 2016. When adjusting for non-recurring items such as negative loan loss provisions, gains and losses on Other Real Estate transactions, securities gains, and an adjustment to the wealth management fee income accrual, we calculate adjusted operating income at $4,832,000 for the second quarter of 2017, compared to $4,176,000 for the second quarter of 2016 for an increase of 15.7%.

The Company also announced that it will pay a quarterly dividend of $0.06 on August 17, 2017 to shareholders of record as of August 10, 2017. This is an increase of $0.02, or 50% compared to the dividend paid in the same quarter last year.

The Net Interest Income increased $620,000, or 6.7% as the net interest margin improved from 3.10% to 3.31% due to higher interest rates and growth in the loan portfolio. The Provision for Loan Losses increased $200,000, Non-Interest Income decreased $1,185,000, or 21.3% due primarily to a reduction in the aforementioned securities gains. Non-Interest Expense increased only $136,000, or 1.5% compared to the second quarter of 2016.

The provision for loan losses increased $200,000 compared to last year, from a negative expense of $200,000 in the second quarter of 2016 to no expense recorded this quarter. Asset quality and historical loss ratios improved, but the growth in the loan portfolio offset the need for another negative provision expense. Total Loans increased $20.2 million during the second quarter, and the Allowance for Loan and Lease Losses was reduced from $8.3 million, or 1.26% of loans at the end of the first quarter to a still relatively robust $8.1 million, or 1.19% as of the end of the second quarter.

Non-interest income, adjusted to exclude gains and losses on securities and Other Real Estate transactions, and an accrual adjustment in Wealth Management income increased 4.5% from $3,804,000 in the second quarter of 2016 to $3,976,000 in the second quarter of 2017.

Total assets of the company decreased $30.9 million, or 2.3% compared to December 31, 2016. Capital decreased $6.9 million during the first half of the year as the payment of the special and regular dividends exceeded the net income. The Accumulated Other Comprehensive Loss (AOCL) component of capital improved $3.8 million as the market value of Available for Sale investment securities improved. The ratio of equity to assets decreased from 10.40% at the end of 2016 to 10.12% at the end of the second quarter of 2017. The Bank's Tier 1 Leverage ratio decreased from 10.75% as of December 31, 2016 to 9.95% as of June 30, 2017.

H. Douglas Chaffin, President and CEO, commented, "We have carried forward the momentum from the start of the year and continue to see strong loan growth. The improvement in net interest margin combined with well-controlled non-interest expenses have contributed to improved core earnings year to date. We plan to continue our focus on each of these items for the second half of 2017, and our new business pipeline remains strong. Notably, we also expect credit quality to remain strong, as we see nothing that might inhibit our strong quality metrics in the near term. Our focus on managing our capital has also allowed us to bring more value to our shareholders, through the increased dividends we announced today. We will continue to keep our eyes open for the right opportunities to grow through strategic acquisitions, while remaining disciplined in that regard. 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 2017 results on Friday, July 28, 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 #10109894. The replay will be available until August 28, 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, ranking fourth among all Michigan banks for total trust assets. With offices and ATMs in Monroe, 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  
          2017       2017       2016       2016       2016            
(dollars in thousands except per share data)   2nd Qtr   1st Qtr   4th Qtr   3rd Qtr   2nd Qtr     2017       2016    
                                   
EARNINGS                              
  Net interest income   $   9,864     $   9,595     $   9,574     $   9,515     $   9,244     $   19,459     $   18,534    
  FTE Net interest income   $   10,017     $   9,749     $   9,731     $   9,671     $   9,393     $   19,766     $   18,831    
  Provision for loan and lease losses   $   -      $   (200 )   $   (1,000 )   $   (700 )   $   (200 )   $   (200 )
  $   (500 )  
  Non interest income   $   4,370     $   3,820     $   3,805     $   4,039     $   5,555     $   8,190     $   9,669    
  Non interest expense   $   9,008     $   9,062     $   9,269     $   8,974     $   8,872     $   18,070     $   18,355    
  Net income   $   3,640     $   3,180     $   3,578     $   3,687     $   4,239     $   6,820     $   7,236    
  Basic earnings per share   $   0.16     $   0.14     $   0.16     $   0.16     $   0.19     $   0.30     $   0.32    
  Diluted earnings per share   $   0.16     $   0.14     $   0.16     $   0.16     $   0.18     $   0.30     $   0.31    
  Average shares outstanding      22,865,529       22,821,273       22,738,718       22,733,134       22,884,350     $   22,843,523     $   22,869,453    
  Average diluted shares outstanding     23,006,766       22,961,425       22,905,786       22,915,278       23,049,718     $   22,987,803     $   23,029,838    
                                   
PERFORMANCE RATIOS                              
  Return on average assets     1.11 %     0.97 %     1.07 %     1.10 %     1.28 %     1.04 %     1.10 %  
  Return on average common equity     11.14 %     9.83 %     9.57 %     9.98 %     11.87 %     10.49 %     10.23 %  
                                   
  Base Margin     3.25 %     3.16 %     3.07 %     3.07 %     3.03 %     3.20 %     3.03 %  
  FTE Adjustment     0.05 %     0.05 %     0.05 %     0.05 %     0.05 %     0.05 %     0.05 %  
  Loan Fees     0.01 %     0.00 %     0.02 %     -0.01 %     0.02 %     0.01 %     0.01 %  
  FTE Net Interest Margin     3.31 %     3.21 %     3.14 %     3.11 %     3.10 %     3.26 %     3.09 %  
                                   
  Efficiency ratio     64.14 %     66.43 %     68.18 %     65.59 %     67.83 %     65.27 %     68.80 %  
  Full-time equivalent employees       287         287         277         281         288         287         288    
                                   
CAPITAL                              
  Average equity to average assets     9.95 %     9.87 %     11.21 %     11.05 %     10.80 %     9.91 %     10.73 %  
  Book value per share   $   5.87     $   5.67     $   6.20     $   6.49     $   6.41     $   5.87     $   6.41    
  Cash dividend per share   $   0.05     $   0.75     $   0.04     $   0.04     $   0.03     $   0.80     $   0.56    
                                   
ASSET QUALITY                              
  Loan Charge-Offs   $   396     $   112     $   522     $   114     $   618     $   508     $   827    
  Loan Recoveries   $   199     $   188     $   575     $   316     $   184     $   387     $   334    
  Net Charge-Offs   $   197     $   (76 )   $   (53 )   $   (202 )   $   434     $   121     $   493    
                                   
  Allowance for loan and lease losses   $   8,137     $   8,334     $   8,458     $   9,405     $   9,903     $   8,137     $   9,903    
                                   
  Nonaccrual Loans   $   4,143     $   5,001     $   4,656     $   6,545     $   7,522     $   4,143     $   7,522    
  Loans 90 days past due   $   3     $   9     $   10     $   32     $   41     $   3     $   41    
  Restructured loans   $   10,103     $   10,318     $   14,161     $   15,923     $   16,701     $   10,103     $   16,701    
    Total non performing loans   $   14,249     $   15,328     $   18,827     $   22,500     $   24,264     $   14,249     $   24,264    
  Other real estate owned & other assets   $   1,542     $   1,400     $   1,634     $   1,696     $   1,818     $   1,542     $   1,818    
    Total non performing assets   $   15,791     $   16,728     $   20,461     $   24,196     $   26,082     $   15,791     $   26,082    
                                   
  Classified Loans   $   10,599     $   14,030     $   14,971     $   20,151     $   24,365     $   10,599     $   24,365    
  Other real estate owned & other assets   $   1,542     $   1,400     $   1,634     $   1,696     $   1,818     $   1,542     $   1,818    
    Total classified assets   $   12,141     $   15,430     $   16,605     $   21,847     $   26,183     $   12,141     $   26,183    
                                   
  Net loan charge-offs to average loans     0.12 %     -0.05 %     -0.03 %     -0.12 %     0.28 %     0.04 %     0.16 %  
  Allowance for loan losses to total loans     1.19 %     1.26 %     1.30 %     1.43 %     1.55 %     1.19 %     1.55 %  
  Non performing loans to gross loans     2.08 %     2.31 %     2.88 %     3.43 %     3.80 %     2.08 %     3.80 %  
  Non performing assets to total assets     1.19 %     1.24 %     1.51 %     1.80 %     1.97 %     1.19 %     1.97 %  
  Classified assets to total capital     8.63 %     11.16 %     10.95 %     14.61 %     17.70 %     8.63 %     17.70 %  
  Allowance to non performing loans     57.11 %     54.37 %     44.92 %     41.80 %     40.81 %     57.11 %     40.81 %  
                                   
END OF PERIOD BALANCES                              
  Loans and leases   $   683,648     $   663,449     $   652,948     $   656,445     $   639,199     $   683,648     $   639,199    
  Total earning assets   $   1,201,903     $   1,232,350     $   1,239,439     $   1,232,863     $   1,214,557     $   1,201,903     $   1,214,557    
  Total assets   $   1,326,392     $   1,346,554     $   1,357,283     $   1,343,026     $   1,323,415     $   1,326,392     $   1,323,415    
  Deposits   $   1,177,069     $   1,203,072     $   1,199,717     $   1,180,461     $   1,163,418     $   1,177,069     $   1,163,418    
  Interest Bearing Liabilities   $   886,474     $   918,126     $   920,716     $   894,697     $   893,027     $   886,474     $   893,027    
  Shareholders' equity   $   134,222     $   129,553     $   141,114     $   147,662     $   145,623     $   134,222     $   145,623    
  Tier 1 Capital (Bank)   $   132,565     $   129,935     $   143,123     $   140,131     $   138,059     $   132,565     $   138,059    
  Total Shares Outstanding       22,870,082         22,860,794         22,777,882         22,736,116         22,728,558         22,870,082     $   22,728,558    
                                   
AVERAGE BALANCES                              
  Loans and leases   $   672,849     $   656,550     $   654,077     $   652,163     $   625,435     $   664,744     $   622,723    
  Total earning assets   $   1,215,360     $   1,229,947     $   1,230,134     $   1,234,255     $   1,218,569     $   1,222,615     $   1,223,138    
  Total assets   $   1,316,081     $   1,329,128     $   1,326,623     $   1,329,284     $   1,329,935     $   1,322,569     $   1,325,454    
  Deposits   $   1,183,645     $   1,194,296     $   1,174,024     $   1,178,941     $   1,173,998     $   1,188,943     $   1,169,160    
  Interest Bearing Liabilities   $   904,581     $   917,125     $   891,510     $   905,082     $   920,340     $   910,820     $   923,480    
  Shareholders' equity   $   131,015     $   131,171     $   148,765     $   146,926     $   143,685     $   131,092     $   142,184    
                                   


MBT FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
                     
        Quarter Ended June 30,   Six Months Ended Date June 30,
Dollars in thousands (except per share data)   2017       2016       2017       2016  
Interest Income              
Interest and fees on loans $   7,709     $   7,179     $   15,073     $   14,214  
Interest on investment securities-              
  Tax-exempt     306         303         616         608  
  Taxable     2,185         2,218         4,453         4,744  
Interest on balances due from banks     101         162         210         279  
      Total interest income     10,301         9,862         20,352         19,845  
                     
Interest Expense              
Interest on deposits     434         486         890         1,003  
Interest on borrowed funds     3         132         3         308  
      Total interest expense     437         618         893         1,311  
                     
Net Interest Income     9,864         9,244         19,459         18,534  
Provision For Loan Losses     -          (200 )       (200 )       (500 )
                     
Net Interest Income After              
Provision For Loan Losses     9,864         9,444         19,659         19,034  
                     
Other Income              
Income from wealth management services     1,547         1,105         2,675         2,202  
Service charges and other fees     1,046         1,016         2,060         2,024  
Debit Card income     748         735         1,428         1,409  
Net gain on sales of securities     67         1,752         77         2,072  
Net gain (loss) on other real estate owned     (62 )       (1 )       (96 )       (57 )
Origination fees on mortgage loans sold     115         136         174         266  
Bank Owned Life Insurance income     412         362         753         717  
Other       497         450         1,119         1,036  
      Total other income     4,370         5,555         8,190         9,669  
                     
Other Expenses              
Salaries and employee benefits     5,273         5,399         10,707         11,017  
Occupancy expense     682         633         1,430         1,334  
Equipment expense     791         726         1,488         1,410  
Marketing expense     302         286         586         545  
Professional fees     620         556         1,209         1,208  
EFT/ATM expense     259         237         507         546  
Other real estate owned expense     30         30         62         94  
FDIC deposit insurance assessment     107         191         214         360  
Bonding and other insurance expense     125         214         247         336  
Telephone expense     103         91         219         217  
Other       716         509         1,401         1,288  
      Total other expenses     9,008         8,872         18,070         18,355  
                     
Profit Before Income Taxes     5,226         6,127         9,779         10,348  
Income Tax Expense     1,586         1,888         2,959         3,112  
Net Profit $   3,640     $   4,239     $   6,820     $   7,236  
                     
Basic Earnings Per Common Share $   0.16     $   0.19     $   0.30     $   0.32  
                     
Diluted Earnings Per Common Share $   0.16     $   0.18     $   0.30     $   0.31  
                     
Dividends Declared Per Common Share $   0.05     $   0.03     $   0.80     $   0.56  
                     


MBT FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
             
             
        (Unaudited)    
Dollars in thousands June 30, 2017   December 31, 2016
Assets        
Cash and Cash Equivalents      
  Cash and due from banks      
    Non-interest bearing $   22,425     $   18,183  
    Interest bearing     18,182         34,589  
    Total cash and cash equivalents     40,607         52,772  
             
Interest Bearing Time Deposits in Other Banks     17,696         18,946  
Securities - Held to Maturity     38,617         40,741  
Securities - Available for Sale     439,612         488,067  
Federal Home Loan Bank stock - at cost     4,148         4,148  
Loans held for sale     899         611  
             
Loans       682,749         652,337  
Allowance for Loan Losses     (8,137 )       (8,458 )
Loans - Net     674,612         643,879  
             
Accrued interest receivable and other assets     22,694         24,901  
Other Real Estate Owned     1,502         1,634  
Bank Owned Life Insurance     59,217         54,415  
Premises and Equipment - Net     26,788         27,169  
    Total assets $   1,326,392     $   1,357,283  
             
Liabilities      
Deposits:      
  Non-interest bearing $   290,595     $   279,001  
  Interest-bearing     886,474         920,716  
    Total deposits     1,177,069         1,199,717  
             
Accrued interest payable and other liabilities     15,101         16,452  
    Total liabilities     1,192,170         1,216,169  
             
Shareholders' Equity      
Common stock (no par value)     22,559         22,562  
Retained Earnings     115,453         126,079  
Unearned Compensation     (39 )       (4 )
Accumulated other comprehensive income (loss)     (3,751 )       (7,523 )
    Total shareholders' equity     134,222         141,114  
    Total liabilities and shareholders' equity $   1,326,392     $   1,357,283  

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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