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MBT Financial Corp. Announces Third Quarter 2017 Earnings and Quarterly Dividend

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MONROE, Mich., Oct. 26, 2017 (GLOBE NEWSWIRE) -- MBT Financial Corp., (NASDAQ:MBTF), the parent company of Monroe Bank & Trust, reported a preliminary net profit of $3,933,000 ($0.17 per share, basic and diluted), in the third quarter of 2017, compared to a profit of $3,687,000 ($0.16 per share, basic and diluted), in the third quarter of 2016. The profit for the nine months ended September 30, 2017 is $10,753,000, compared to $10,923,000 for the first nine months 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, the adjusted operating income is $14,368,000 for the first three quarters of 2017, compared to $12,330,000 for the first three quarters of 2016 for an increase of 16.5%.

The Company also announced that it will pay a quarterly dividend of $0.06 on November 16, 2017 to shareholders of record as of November 9, 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 for the third quarter of 2017 increased $716,000, or 7.5% as the net interest margin improved from 3.11% in the third quarter of 2016 to 3.38% in the third quarter of 2017 due to higher interest rates and growth in the loan portfolio.

The provision for loan losses was $0 for the third quarter of 2017, an increase of $700,000 compared to last year's third quarter, when we recorded a negative expense of $700,000. 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 $10.2 million, or 1.5% during the third quarter, which is an annualized growth rate of 6.0%. The Allowance for Loan and Lease Losses was reduced from $8.1 million, or 1.19% of loans at the end of the second quarter to a still relatively robust $8.0 million, or 1.15% as of the end of the third quarter.

Non-interest income was little changed from the third quarter of 2016 to the third quarter of 2017, decreasing $4,000, or 0.1%. Non-interest expense decreased $24,000, or 0.3%, as a $201,000 decrease in salaries and benefits was offset by increases in marketing expense and professional fees.

Total assets of the company decreased $9.9 million, or 0.7%, compared to December 31, 2016, to $1.35 billion. Capital decreased $5.1 million during the first three quarters 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 $3.0 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 10.09% at the end of the third quarter of 2017. The Bank's Tier 1 Leverage ratio decreased from 10.75% as of December 31, 2016 to 10.12 % as of September 30, 2017.

H. Douglas Chaffin, President and CEO, commented, "We continue to see solid loan growth, and the improvement in net interest margin combined with well-controlled non-interest expenses contributed to improved core earnings year to date. We plan to continue our focus on each of these items for the rest 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 Third Quarter 2017 results on Friday, October 27, 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 #10113109. The replay will be available until November 27, 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       2017       2016       2016          
(dollars in thousands except per share data)   3rd Qtr   2nd Qtr   1st Qtr   4th Qtr   3rd Qtr     2017       2016  
                                 
EARNINGS                            
  Net interest income   $ 10,231     $ 9,864     $ 9,595     $ 9,574     $ 9,515     $ 29,690     $ 28,049  
  FTE Net interest income   $ 10,394     $ 10,017     $ 9,749     $ 9,731     $ 9,671     $ 30,160     $ 28,502  
  Provision for loan and lease losses   $ -     $ -     $ (200 )   $ (1,000 )   $ (700 )   $ (200 )   $ (1,200 )
  Non interest income   $ 4,035     $ 4,370     $ 3,820     $ 3,805     $ 4,039     $ 12,225     $ 13,708  
  Non interest expense   $ 8,950     $ 9,008     $ 9,062     $ 9,269     $ 8,974     $ 27,020     $ 27,329  
  Net income   $ 3,933     $ 3,640     $ 3,180     $ 3,578     $ 3,687     $ 10,753     $ 10,923  
  Basic earnings per share   $ 0.17     $ 0.16     $ 0.14     $ 0.16     $ 0.16     $ 0.47     $ 0.48  
  Diluted earnings per share   $ 0.17     $ 0.16     $ 0.14     $ 0.16     $ 0.16     $ 0.47     $ 0.48  
  Average shares outstanding     22,871,451       22,865,529       22,821,273       22,738,718       22,733,134     $ 22,852,935     $ 22,823,682  
  Average diluted shares outstanding     23,040,960       23,006,766       22,961,425       22,905,786       22,915,278     $ 23,034,533     $ 22,988,364  
                                 
PERFORMANCE RATIOS                            
  Return on average assets     1.18 %     1.11 %     0.97 %     1.07 %     1.10 %     1.09 %     1.10 %
  Return on average common equity     11.54 %     11.14 %     9.83 %     9.57 %     9.98 %     10.85 %     10.15 %
                                 
  Base Margin     3.30 %     3.25 %     3.16 %     3.07 %     3.07 %     3.24 %     3.05 %
  FTE Adjustment     0.05 %     0.05 %     0.05 %     0.05 %     0.05 %     0.05 %     0.05 %
  Loan Fees     0.03 %     0.01 %     0.00 %     0.02 %     -0.01 %     0.01 %     0.01 %
  FTE Net Interest Margin     3.38 %     3.31 %     3.21 %     3.14 %     3.11 %     3.30 %     3.11 %
                                 
  Efficiency ratio     62.52 %     64.14 %     66.43 %     68.18 %     65.59 %     64.33 %     67.71 %
  Full-time equivalent employees     295       287       287       277       281       290       286  
                                 
CAPITAL                            
  Average equity to average assets     10.21 %     9.95 %     9.87 %     11.21 %     11.05 %     10.01 %     10.84 %
  Book value per share   $ 5.94     $ 5.87     $ 5.67     $ 6.20     $ 6.49     $ 5.94     $ 6.49  
  Cash dividend per share   $ 0.06     $ 0.05     $ 0.75     $ 0.04     $ 0.04     $ 0.86     $ 0.60  
                                 
ASSET QUALITY                            
  Loan Charge-Offs   $ 306     $ 396     $ 112     $ 522     $ 114     $ 814     $ 941  
  Loan Recoveries   $ 179     $ 199     $ 188     $ 575     $ 316     $ 566     $ 650  
  Net Charge-Offs   $ 127     $ 197     $ (76 )   $ (53 )   $ (202 )   $ 248     $ 291  
                                 
  Allowance for loan and lease losses   $ 8,010     $ 8,137     $ 8,334     $ 8,458     $ 9,405     $ 8,010     $ 9,405  
                                 
  Nonaccrual Loans   $ 3,050     $ 4,143     $ 5,001     $ 4,656     $ 6,545     $ 3,050     $ 6,545  
  Loans 90 days past due   $ 5     $ 3     $ 9     $ 10     $ 32     $ 5     $ 32  
  Restructured loans   $ 9,859     $ 10,103     $ 10,318     $ 14,161     $ 15,923     $ 9,859     $ 15,923  
    Total non performing loans   $ 12,914     $ 14,249     $ 15,328     $ 18,827     $ 22,500     $ 12,914     $ 22,500  
  Other real estate owned & other assets   $ 1,686     $ 1,542     $ 1,400     $ 1,634     $ 1,696     $ 1,686     $ 1,696  
    Total non performing assets   $ 14,600     $ 15,791     $ 16,728     $ 20,461     $ 24,196     $ 14,600     $ 24,196  
                                 
  Classified Loans   $ 9,206     $ 10,599     $ 14,030     $ 14,971     $ 20,151     $ 9,206     $ 20,151  
  Other real estate owned & other assets   $ 1,686     $ 1,542     $ 1,400     $ 1,634     $ 1,696     $ 1,686     $ 1,696  
    Total classified assets   $ 10,892     $ 12,141     $ 15,430     $ 16,605     $ 21,847     $ 10,892     $ 21,847  
                                 
  Net loan charge-offs to average loans     0.07 %     0.12 %     -0.05 %     -0.03 %     -0.12 %     0.05 %     0.06 %
  Allowance for loan losses to total loans     1.15 %     1.19 %     1.26 %     1.30 %     1.43 %     1.15 %     1.43 %
  Non performing loans to gross loans     1.86 %     2.08 %     2.31 %     2.88 %     3.43 %     1.86 %     3.43 %
  Non performing assets to total assets     1.08 %     1.19 %     1.24 %     1.51 %     1.80 %     1.08 %     1.80 %
  Classified assets to total capital     7.59 %     8.63 %     11.16 %     10.95 %     14.61 %     7.59 %     14.61 %
  Allowance to non performing loans     62.03 %     57.11 %     54.37 %     44.92 %     41.80 %     62.03 %     41.80 %
                                 
END OF PERIOD BALANCES                            
  Loans and leases   $ 693,866     $ 683,648     $ 663,449     $ 652,948     $ 656,445     $ 693,866     $ 656,445  
  Total earning assets   $ 1,220,844     $ 1,201,903     $ 1,232,350     $ 1,239,439     $ 1,232,863     $ 1,220,844     $ 1,232,863  
  Total assets   $ 1,347,352     $ 1,326,392     $ 1,346,554     $ 1,357,283     $ 1,343,026     $ 1,347,352     $ 1,343,026  
  Deposits   $ 1,195,335     $ 1,177,069     $ 1,203,072     $ 1,199,717     $ 1,180,461     $ 1,195,335     $ 1,180,461  
  Interest Bearing Liabilities   $ 897,408     $ 886,474     $ 918,126     $ 920,716     $ 894,697     $ 897,408     $ 894,697  
  Shareholders' equity   $ 135,969     $ 134,222     $ 129,553     $ 141,114     $ 147,662     $ 135,969     $ 147,662  
  Tier 1 Capital (Bank)   $ 135,470     $ 132,565     $ 129,935     $ 143,123     $ 140,131     $ 135,470     $ 140,131  
  Total Shares Outstanding     22,875,505       22,870,082       22,860,794       22,777,882       22,736,116       22,875,505     $ 22,736,116  
                                 
AVERAGE BALANCES                            
  Loans and leases   $ 686,259     $ 672,849     $ 656,550     $ 654,077     $ 652,163     $ 671,995     $ 632,608  
  Total earning assets   $ 1,220,620     $ 1,215,360     $ 1,229,947     $ 1,230,134     $ 1,234,255     $ 1,221,946     $ 1,226,871  
  Total assets   $ 1,324,723     $ 1,316,081     $ 1,329,128     $ 1,326,623     $ 1,329,284     $ 1,323,295     $ 1,326,739  
  Deposits   $ 1,187,768     $ 1,183,645     $ 1,194,296     $ 1,174,024     $ 1,178,941     $ 1,188,546     $ 1,172,441  
  Interest Bearing Liabilities   $ 895,376     $ 904,581     $ 917,125     $ 891,510     $ 905,082     $ 905,615     $ 917,300  
  Shareholders' equity   $ 135,188     $ 131,015     $ 131,171     $ 148,765     $ 146,926     $ 132,473     $ 143,776  
                                 


MBT FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
                     
        Quarter Ended September 30,   Nine Months Ended Date September 30,
Dollars in thousands (except per share data)   2017     2016       2017       2016  
Interest Income              
Interest and fees on loans $ 8,095   $ 7,538     $ 23,168     $ 21,752  
Interest on investment securities-              
  Tax-exempt   327     316       943       924  
  Taxable   2,054     1,970       6,507       6,714  
Interest on balances due from banks   182     171       392       450  
      Total interest income   10,658     9,995       31,010       29,840  
                     
Interest Expense              
Interest on deposits   427     480       1,317       1,483  
Interest on borrowed funds   -     -       3       308  
      Total interest expense   427     480       1,320       1,791  
                     
Net Interest Income   10,231     9,515       29,690       28,049  
Provision For Loan Losses   -     (700 )     (200 )     (1,200 )
                     
Net Interest Income After              
Provision For Loan Losses   10,231     10,215       29,890       29,249  
                     
Other Income              
Income from wealth management services   1,155     1,145       3,830       3,347  
Service charges and other fees   1,076     1,118       3,136       3,142  
Debit Card income   719     721       2,147       2,130  
Net gain on sales of securities   150     87       227       2,159  
Net gain (loss) on other real estate owned   7     (4 )     (89 )     (61 )
Origination fees on mortgage loans sold   87     149       261       415  
Bank Owned Life Insurance income   377     352       1,130       1,069  
Other     464     471       1,583       1,507  
      Total other income   4,035     4,039       12,225       13,708  
                     
Other Expenses              
Salaries and employee benefits   5,313     5,514       16,020       16,531  
Occupancy expense   694     668       2,124       2,002  
Equipment expense   783     731       2,271       2,141  
Marketing expense   375     280       961       825  
Professional fees   570     459       1,779       1,667  
EFT/ATM expense   256     235       763       781  
Other real estate owned expense   33     35       95       129  
FDIC deposit insurance assessment   107     179       321       539  
Bonding and other insurance expense   120     118       367       454  
Telephone expense   83     95       302       312  
Other     616     660       2,017       1,948  
      Total other expenses   8,950     8,974       27,020       27,329  
                     
Profit Before Income Taxes   5,316     5,280       15,095       15,628  
Income Tax Expense   1,383     1,593       4,342       4,705  
Net Profit $ 3,933   $ 3,687     $ 10,753     $ 10,923  
                     
Basic Earnings Per Common Share $ 0.17   $ 0.16     $ 0.47     $ 0.48  
                     
Diluted Earnings Per Common Share $ 0.17   $ 0.16     $ 0.47     $ 0.48  
                     
Dividends Declared Per Common Share $ 0.06   $ 0.04     $ 0.86     $ 0.60  
                     


MBT FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
             
        (Unaudited)    
Dollars in thousands September 30, 2017   December 31, 2016
Assets        
Cash and Cash Equivalents      
  Cash and due from banks      
    Non-interest bearing $ 21,959     $ 18,183  
    Interest bearing   6,532       34,589  
    Total cash and cash equivalents   28,491       52,772  
             
Interest Bearing Time Deposits in Other Banks   16,946       18,946  
Securities - Held to Maturity   34,029       40,741  
Securities - Available for Sale   465,323       488,067  
Federal Home Loan Bank stock - at cost   4,148       4,148  
Loans held for sale   -       611  
             
Loans     693,866       652,337  
Allowance for Loan Losses   (8,010 )     (8,458 )
Loans - Net   685,856       643,879  
             
Accrued interest receivable and other assets   24,416       24,901  
Other Real Estate Owned   1,646       1,634  
Bank Owned Life Insurance   59,594       54,415  
Premises and Equipment - Net   26,903       27,169  
    Total assets $ 1,347,352     $ 1,357,283  
             
Liabilities      
Deposits:      
  Non-interest bearing $ 297,927     $ 279,001  
  Interest-bearing   897,408       920,716  
    Total deposits   1,195,335       1,199,717  
             
Accrued interest payable and other liabilities   16,048       16,452  
    Total liabilities   1,211,383       1,216,169  
             
Shareholders' Equity      
Common stock (no par value)   22,718       22,562  
Retained Earnings   117,773       126,079  
Unearned Compensation   (20 )     (4 )
Accumulated other comprehensive loss   (4,502 )     (7,523 )
    Total shareholders' equity   135,969       141,114  
    Total liabilities and shareholders' equity $ 1,347,352     $ 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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