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MBT Financial Corp. Announces Preliminary Fourth Quarter 2017 Results, Quarterly and Special Dividends, and Repurchase Authorization

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MONROE, Mich., Jan. 25, 2018 (GLOBE NEWSWIRE) -- MBT Financial Corp., (NASDAQ:MBTF), the parent company of Monroe Bank & Trust, reported a preliminary net loss of $144,000 ($0.01 per share), in the fourth quarter of 2017, compared to a profit of $3,578,000 ($0.16 per share, basic and diluted), in the fourth quarter of 2016. The profit for the year ended December 31, 2017 is $10,609,000, compared to $14,501,000 for 2016. The Company recorded Federal income Tax Expense of $5,559,000 in the fourth quarter, which included $4,278,000 to adjust the value of its deferred tax assets following the enactment of the Tax Cuts and Jobs Act of 2017. When adjusting for non-recurring items such as negative loan loss provisions, gains and losses on securities, a life insurance benefit, and an adjustment to the wealth management fee income accrual, the adjusted operating income for 2017 was $19,509,000, an increase of 18.4% compared to $16,472,000 earned in 2016.

In addition, the Company announced that it will pay a quarterly dividend of $0.06 per common share and a special dividend of $0.60 per common share. The dividends will be paid as a single distribution on February 15, 2018 to shareholders of record as of February 8, 2018. This is compared to the quarterly dividend of $0.05 and special dividend of $0.70 paid in the same quarter last year.

The Company also announced that its Board of Directors authorized the repurchase of up to 2 million shares of its common stock. This represents 8.7% of the shares currently outstanding. Repurchases may be conducted from time to time in the open market or through privately negotiated transactions. The authorization commences February 1, 2018 and expires January 31, 2020. The authorization replaces a two year authorization to repurchase up to 2 million shares that is set to expire on January 31, 2018. During that authorization, 192,080 shares were repurchased.

The Net Interest Income for the fourth quarter of 2017 increased $799,000, or 8.3% as the net interest margin improved from 3.14% in the fourth quarter of 2016 to 3.43% in the fourth quarter of 2017 due to higher interest rates and growth in the loan portfolio.

The provision for loan losses was a negative expense of $500,000 for the fourth quarter of 2017, an increase of $500,000 compared to last year's fourth quarter, when we recorded a negative expense of $1,000,000. Asset quality and historical loss ratios improved, but the growth in the loan portfolio reduced the size of the negative provision expense required to adjust the Allowance for Loan Losses. Total Loans increased $42.4 million, or 6.5% during 2017, while the Allowance for Loan and Lease Losses was reduced from $8.5 million, or 1.30% of loans to a still relatively strong $7.7 million, or 1.10%.

Non-interest income for the fourth quarter of 2017 decreased $148,000, or 3.9% compared to the fourth quarter of 2016. Excluding gains and losses on securities and ORE transactions in both periods and a gain from life insurance proceeds that occurred in the fourth quarter of 2017, the non-interest income increased $46,000, or 1.2%. Non-interest expense decreased $154,000, or 1.7%, as a $532,000 decrease in salaries and benefits was partially offset by increases in equipment 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 $8.5 million during the year as the payment of the special and regular dividends exceeded the net income. The ratio of equity to assets decreased from 10.40% at the end of 2016 to 9.84% at the end of 2017. The Bank's Tier 1 Leverage ratio decreased from 10.75% as of December 31, 2016 to 10.33 % as of December 31, 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 this year. Our new business pipeline remains strong and we expect loan growth to continue in 2018, which should lead to further margin improvement.  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 regular and special dividends and the repurchase authorization 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 Fourth Quarter 2017 results on Friday, January 26, 2018, 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 #10115518. The replay will be available until February 26, 2018 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   2017   2016        
(dollars in thousands except per share data)   4th Qtr   3rd Qtr   2nd Qtr   1st Qtr   4th Qtr     2017       2016  
                                 
EARNINGS                            
  Net interest income   $   10,373     $   10,231     $   9,864     $   9,595     $   9,574     $   40,063     $   37,623  
  FTE Net interest income   $   10,552     $   10,394     $   10,017     $   9,749     $    9,731     $   40,712     $   38,233  
  Provision for loan and lease losses   $   (500 )   $   -      $   -      $   (200 )   $   (1,000 )   $    (700 )   $   (2,200 )
  Non interest income   $   3,657     $   4,035     $   4,370     $   3,820     $   3,805     $   15,882     $   17,513  
  Non interest expense   $   9,115     $   8,950     $   9,008     $   9,062     $   9,269     $   36,135     $   36,598  
  Net income   $   (144 )   $   3,933     $   3,640     $   3,180     $   3,578     $   10,609     $   14,501  
  Basic earnings per share   $   (0.01 )   $   0.17     $   0.16     $   0.14     $   0.16     $   0.46     $    0.64  
  Diluted earnings per share   $   (0.01 )   $   0.17     $   0.16     $   0.14     $   0.16     $   0.46     $   0.63  
  Average shares outstanding     22,884,010       22,871,451       22,865,529       22,821,273       22,738,718     $   22,860,767     $   22,802,325  
  Average diluted shares outstanding     23,044,241       23,040,960       23,006,766       22,961,425       22,905,786     $   23,019,716     $   22,937,193  
                                 
PERFORMANCE RATIOS                            
  Return on average assets     -0.04 %     1.18 %     1.11 %     0.97 %     1.07 %     0.80 %     1.09 %
  Return on average common equity     -0.42 %     11.54 %     11.14 %     9.83 %     9.57 %     7.94 %     10.00 %
                                 
  Base Margin     3.37 %     3.30 %     3.25 %     3.16 %     3.07 %     3.27 %     3.05 %
  FTE Adjustment     0.06 %     0.05 %     0.05 %     0.05 %     0.05 %     0.05 %     0.05 %
  Loan Fees     0.00 %     0.03 %     0.01 %     0.00 %     0.02 %     0.01 %     0.01 %
  FTE Net Interest Margin     3.43 %     3.38 %     3.31 %     3.21 %     3.14 %     3.33 %     3.11 %
                                 
  Efficiency ratio     62.80 %     62.52 %     64.14 %     66.43 %     68.18 %     63.94 %     67.83 %
  Full-time equivalent employees       288         295         287         287         277         289         284  
                                 
CAPITAL                            
  Average equity to average assets     10.34 %     10.21 %     9.95 %     9.87 %     11.21 %     10.09 %     10.93 %
  Book value per share   $   5.79     $   5.94     $   5.87     $   5.67     $   6.20     $   5.79     $   6.20  
  Cash dividend per share   $   0.06     $   0.06     $   0.05     $   0.75     $   0.04     $   0.17     $   0.64  
                                 
ASSET QUALITY                            
  Loan Charge-Offs   $   14     $    306     $   396     $   112     $   522     $   828     $   1,463  
  Loan Recoveries   $   170     $   179     $   199     $   188     $   575     $   736     $   1,225  
  Net Charge-Offs   $   (156 )   $   127     $   197     $   (76 )   $   (53 )   $   92     $   238  
                                 
  Allowance for loan and lease losses   $   7,666     $   8,010     $    8,137     $   8,334     $   8,458     $   7,666     $   8,458  
                                 
  Nonaccrual Loans   $   3,658     $   3,050     $   4,143     $   5,001     $   4,656     $   3,658     $   4,656  
  Loans 90 days past due   $   3     $   5     $   3     $   9     $   10     $   3     $   10  
  Restructured loans   $   9,625     $   9,859     $   10,103     $    10,318     $   14,161     $   9,625     $   14,161  
    Total non performing loans   $   13,286     $   12,914     $   14,249     $   15,328     $   18,827     $   13,286     $   18,827  
  Other real estate owned & other assets   $   1,452     $   1,686     $   1,542     $   1,400     $   1,634     $   1,452     $   1,634  
    Total non performing assets   $   14,738     $   14,600     $   15,791     $   16,728     $   20,461     $    14,738     $   20,461  
                                 
  Classified Loans   $   8,273     $   9,206     $   10,599     $   14,030     $   14,971     $   8,273     $   14,971  
  Other real estate owned & other assets   $   1,452     $   1,686     $   1,542     $   1,400     $   1,634     $   1,452     $   1,634  
    Total classified assets   $   9,725     $   10,892     $   12,141     $   15,430     $   16,605     $   9,725     $   16,605  
                                 
  Net loan charge-offs to average loans     -0.09 %     0.07 %     0.12 %     -0.05 %     -0.03 %     0.01 %     0.04 %
  Allowance for loan losses to total loans     1.10 %     1.15 %     1.19 %     1.26 %     1.30 %     1.10 %     1.30 %
  Non performing loans to gross loans     1.91 %     1.86 %     2.08 %     2.31 %     2.88 %     1.91 %     2.88 %
  Non performing assets to total assets     1.09 %     1.08 %     1.19 %     1.24 %     1.51 %     1.09 %     1.51 %
  Classified assets to total capital     6.64 %     7.59 %     8.63 %     11.16 %     10.95 %     6.64 %     10.95 %
  Allowance to non performing loans     57.70 %     62.03 %     57.11 %     54.37 %     44.92 %     57.70 %     44.92 %
                                 
END OF PERIOD BALANCES                            
  Loans and leases   $   695,325     $   693,866     $   683,648     $   663,449     $   652,948     $   695,325     $   652,948  
  Total earning assets   $   1,229,425     $   1,220,844     $   1,201,903     $   1,232,350     $   1,239,439     $   1,229,425     $   1,239,439  
  Total assets   $   1,347,420     $   1,347,352     $   1,326,392     $   1,346,554     $   1,357,283     $   1,347,420     $   1,357,283  
  Deposits   $   1,198,164     $   1,195,335     $   1,177,069     $   1,203,072     $   1,199,717     $   1,198,164     $   1,199,717  
  Interest Bearing Liabilities   $   898,326     $   897,408     $   886,474     $   918,126     $   920,716     $   898,326     $   920,716  
  Shareholders' equity   $   132,658     $   135,969     $   134,222     $   129,553     $   141,114     $   132,658     $   141,114  
  Tier 1 Capital (Bank)   $   138,819     $   135,470     $   132,565     $   129,935     $   143,123     $   138,819     $   143,123  
  Total Shares Outstanding       22,907,844         22,875,505         22,870,082         22,860,794         22,777,882         22,907,844     $   22,777,882  
                                 
AVERAGE BALANCES                            
  Loans and leases   $   693,586     $   686,259     $   672,849     $   656,550     $   654,077     $   677,437     $   638,006  
  Total earning assets   $   1,220,426     $   1,220,620     $   1,215,360     $   1,229,947     $   1,230,134     $   1,221,561     $   1,227,692  
  Total assets   $   1,324,847     $   1,324,723     $   1,316,081     $   1,329,128     $   1,326,623     $   1,323,686     $   1,326,710  
  Deposits   $   1,184,592     $   1,187,768     $   1,183,645     $   1,194,296     $   1,174,024     $   1,187,550     $   1,172,839  
  Interest Bearing Liabilities   $   884,979     $    895,376     $   904,581     $   917,125     $   891,510     $   900,415     $   910,818  
  Shareholders' equity   $   136,963     $   135,188     $   131,015     $   131,171     $   148,765     $   133,605     $   145,030  
                                                           


MBT FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
                     
        Quarter Ended December 31,   Year Ended December 31,
Dollars in thousands (except per share data)   2017       2016       2017       2016  
Interest Income              
Interest and fees on loans $   8,132     $   7,513     $   31,300     $   29,265  
Interest on investment securities-              
  Tax-exempt     356         317         1,299         1,241  
  Taxable     2,200          2,077         8,707         8,791  
Interest on balances due from banks     102         112         494         562  
      Total interest income     10,790          10,019         41,800         39,859  
                     
Interest Expense              
Interest on deposits     414         445         1,731         1,928  
Interest on borrowed funds      3         -          6         308  
      Total interest expense     417         445         1,737         2,236  
                     
Net Interest Income      10,373         9,574         40,063         37,623  
Provision For Loan Losses     (500 )       (1,000 )       (700 )       (2,200 )
                     
Net Interest Income After              
Provision For Loan Losses     10,873         10,574         40,763         39,823  
                     
Other Income              
Income from wealth management services     1,187         1,106         5,017          4,453  
Service charges and other fees     1,050         1,079         4,186         4,221  
Debit Card income     730         701         2,877         2,831  
Net gain (loss) on sales of securities     (773 )       (8 )       (546 )       2,151  
Net gain (loss) on other real estate owned     67         (24 )       (22 )        (85 )
Origination fees on mortgage loans sold     68         125         329         540  
Bank Owned Life Insurance income     848         356         1,978          1,425  
Other       480         470         2,063         1,977  
      Total other income     3,657         3,805         15,882         17,513  
                     
Other Expenses              
Salaries and employee benefits     5,380         5,912         21,400         22,443  
Occupancy expense     701         728         2,825         2,730  
Equipment expense     855         738         3,126         2,879  
Marketing expense     361         319         1,322         1,144  
Professional fees     560         471         2,339         2,138  
EFT/ATM expense     259         241         1,022         1,022  
Other real estate owned expense     22          19         117         148  
FDIC deposit insurance assessment     107         28         428         567  
Bonding and other insurance expense     119          123         486         577  
Telephone expense     83         101         385         413  
Other       668         589         2,685         2,537  
      Total other expenses     9,115         9,269         36,135         36,598  
                     
Profit Before Income Taxes     5,415         5,110         20,510          20,738  
Income Tax Expense     5,559         1,532         9,901         6,237  
Net Profit $   (144 )   $   3,578     $   10,609     $   14,501  
                     
Basic Earnings Per Common Share $   (0.01 )   $   0.16     $   0.46     $   0.64  
                     
Diluted Earnings Per Common Share $   (0.01 )   $   0.16     $   0.46     $   0.63  
                     
Dividends Declared Per Common Share $   0.06     $   0.04     $   0.92     $   0.64  
                               


MBT FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
             
             
        (Unaudited)    
Dollars in thousands December 31, 2017   December 31, 2016
Assets        
Cash and Cash Equivalents      
  Cash and due from banks      
    Non-interest bearing $   18,233     $   18,183  
    Interest bearing     34,777          34,589  
    Total cash and cash equivalents     53,010         52,772  
             
Interest Bearing Time Deposits in Other Banks     15,196         18,946  
Securities - Held to Maturity     37,163         40,741  
Securities - Available for Sale     442,816         488,067  
Federal Home Loan Bank stock - at cost      4,148         4,148  
Loans held for sale     346         611  
             
Loans       694,979         652,337  
Allowance for Loan Losses     (7,666 )       (8,458 )
Loans - Net     687,313         643,879  
             
Accrued interest receivable and other assets     20,463          24,901  
Other Real Estate Owned     1,412         1,634  
Bank Owned Life Insurance     58,153         54,415  
Premises and Equipment - Net      27,400         27,169  
    Total assets $   1,347,420     $   1,357,283  
             
Liabilities      
Deposits:      
  Non-interest bearing $   299,838     $   279,001  
  Interest-bearing     898,326         920,716  
    Total deposits     1,198,164         1,199,717  
             
Accrued interest payable and other liabilities      16,598         16,452  
    Total liabilities     1,214,762         1,216,169  
             
Shareholders' Equity      
Common stock (no par value)     22,840          22,562  
Retained Earnings     117,524         126,079  
Unearned Compensation     -          (4 )
Accumulated other comprehensive loss      (7,706 )       (7,523 )
    Total shareholders' equity     132,658         141,114  
    Total liabilities and shareholders' equity $   1,347,420     $   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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