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MBT Financial Corp. Announces Second Quarter 2018 Preliminary Earnings and Dividend Increase

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MONROE, Mich., July 26, 2018 (GLOBE NEWSWIRE) -- MBT Financial Corp. (NASDAQ:MBTF), the parent company of Monroe Bank & Trust, reported a preliminary net profit of $4,945,000 ($0.22 per basic share and $0.21 per diluted share), in the second quarter of 2018, compared to a profit of $3,640,000 ($0.16 per share, basic and diluted), in the second quarter of 2017. The profit for the first six months of 2018 was $8,847,000 ($0.39 per basic share and $0.38 per diluted share), compared to $6,820,000 ($0.30 per share, basic and diluted) for the first six months of 2017. The company also announced that it will pay a quarterly dividend of $0.10 per common share on August 16, 2018 to shareholders of record as of August 9, 2018. This is an increase of $0.03 per share compared to the dividend paid last quarter and an increase of $0.04 compared to the dividend paid in the same quarter last year.

The Net Interest Income for the second quarter of 2018 increased $969,000, or 9.8% as the net interest margin improved from 3.31% in the second quarter of 2017 to 3.64% in the second quarter of 2018 as higher interest rates and shifting assets from investment securities to loans improved the yield on earning assets while the cost of interest bearing liabilities remained low.

The Company did not record a provision for loan losses this quarter or in the second quarter of 2017. Asset quality continues to be strong, and recoveries of previously charged off loans exceeded charge offs during the second quarter of 2018. This provided sufficient growth in the Allowance for Loan Losses to maintain its adequacy even though the amount of loans increased. Total Loans increased $18.5 million, or 2.6% during the second quarter quarter of 2018, and $45.8 million, or 6.6% so far this year. The Allowance for Loan and Lease Losses increased from $7.7 million at the end of 2017 to $8.0 million at the end of the second quarter of 2018. Due to the loan growth, the Allowance as a percent of loans decreased since the beginning of the year from 1.10% to 1.07%.

Non-interest income for the second quarter of 2018 increased $33,000, or 0.8% compared to the second quarter of 2017. Excluding gains and losses on securities and other real estate transactions in both periods and an adjustment to recognize wealth management income on an accrual basis in 2017, the non-interest income decreased $89,000, or 2.2%. Non-interest income in the second quarter of 2018 included $517,000 of gains on the sales of Other Real Estate. Non-interest expense increased $178,000, or 2.0%, mainly due to increases in salaries and benefits, equipment, and marketing expenses.

Total assets of the company decreased $25.5 million, or 1.9%, compared to December 31, 2017, to $1.32 billion. Capital decreased $12.3 million during the first six months of 2018 primarily because the payment of the special and regular dividends exceeded the net income. The ratio of equity to assets decreased from 9.85% at the end of 2017 to 9.10% at the end of the second quarter of 2018. The Bank's Tier 1 Leverage ratio decreased from 10.33% as of December 31, 2017 to 9.89% as of June 30, 2018.

H. Douglas Chaffin, President and CEO, commented, "We continue to see solid loan growth, and the improvement in net interest margin combined with the effects of the Tax Cuts and Jobs Act contributed to the substantial improvement in earnings this quarter. Our new business pipeline remains strong and we expect loan growth to continue the rest of this year, 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, and the increase in the quarterly dividend we announced today reflects a higher payout ratio. Our earnings growth trend has been strong, and a consistent increase in the dividend will decrease the need for the special dividends we used in the past three years. 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 2018 results on Friday, July 27, 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.monroe.bank. 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 #10121798. The replay is available to callers from Canada at (855) 669-9658 and international callers at (412) 317-0088. The replay will be available until August 27, 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. Founded in 1858, Monroe Bank & Trust helps customers' remarkable stories unfold through an uncommon, optimistic culture. As one of the largest independently owned community banks in Southeast Michigan, with over $1.3 billion in assets, this full-service bank offers a complete range of business and personal accounts, mobile and online banking, offices and ATMs across Monroe and Wayne Counties, credit and mortgage options, investment and retirement services and award-winning community outreach. The bank believes in its customers, helping them with everything from day-to-day needs to long-term goals, and is ranked fourth among all Michigan banks for total trust assets.  The bank believes in its communities, supporting over 300 organizations with sponsorships and also more than 8,000 employee volunteer hours through the Monroe Bank & Trust ENLIST Volunteerism program. The bank believes in the power of knowledge, helping thousands of students and adults thrive through the Monroe Bank & Trust Financial Education program.  Monroe Bank & Trust is proud to be a trusted partner to communities and clients, and an employer of choice.  We are Monroe Bank & Trust, and we believe in the story of you.

For more information about Monroe Bank & Trust, visit www.monroe.bank.
Or, contact:
Julian Broggio
SVP, Director of Marketing
(734) 240-2341
julian.broggio@monroe.bank

MBT FINANCIAL CORP.  
CONSOLIDATED FINANCIAL HIGHLIGHTS - UNAUDITED  
                                   
        Quarterly   Year to Date  
          2018       2018       2017       2017       2017            
(dollars in thousands except per share data)   2nd Qtr   1st Qtr   4th Qtr   3rd Qtr   2nd Qtr     2018       2017    
                                   
EARNINGS                              
  Net interest income   $   10,833     $   10,536     $   10,373     $   10,231     $   9,864     $   21,369     $   19,459    
  FTE Net interest income   $   10,945     $   10,638     $   10,552     $   10,394     $   10,017     $   21,583     $   19,766    
  Provision for loan and lease losses   $   -      $   (100 )   $   (500 )   $   -      $   -      $   (100 )   $   (200 )  
  Non interest income   $   4,403     $   3,784     $   3,657     $   4,035     $   4,370     $   8,187     $   8,190    
  Non interest expense   $   9,186     $   9,792     $   9,115     $   8,950     $   9,008     $   18,978     $   18,070    
  Net income   $   4,945     $   3,902     $   (144 )   $   3,933     $   3,640     $   8,847     $   6,820    
  Basic earnings per share   $   0.22     $   0.17     $   (0.01 )   $   0.17     $   0.16     $   0.39     $   0.30    
  Diluted earnings per share   $   0.21     $   0.17     $   (0.01 )   $   0.17     $   0.16     $   0.38     $   0.30    
  Average shares outstanding      22,978,225       22,943,736       22,884,010       22,871,451       22,865,529       22,961,076       22,843,523    
  Average diluted shares outstanding     23,101,035       23,063,200       23,044,241       23,040,960       23,006,766       23,083,153       22,987,803    
                                   
PERFORMANCE RATIOS                              
  Return on average assets     1.52 %     1.19 %     -0.04 %     1.18 %     1.11 %     1.35 %     1.04 %  
  Return on average common equity     16.63 %     12.80 %     -0.42 %     11.54 %     11.14 %     14.69 %     10.49 %  
                                   
  Base Margin     3.57 %     3.48 %     3.37 %     3.30 %     3.25 %     3.52 %     3.20 %  
  FTE Adjustment     0.04 %     0.03 %     0.06 %     0.05 %     0.05 %     0.04 %     0.05 %  
  Loan Fees     0.03 %     0.01 %     0.00 %     0.03 %     0.01 %     0.02 %     0.01 %  
  FTE Net Interest Margin     3.64 %     3.52 %     3.43 %     3.38 %     3.31 %     3.58 %     3.26 %  
                                   
  Efficiency ratio     61.79 %     67.41 %     62.80 %     62.52 %     64.14 %     64.57 %     65.27 %  
  Full-time equivalent employees       280         281         288         295         287         281         287    
                                   
CAPITAL                              
  Average equity to average assets     9.11 %     9.31 %     10.34 %     10.21 %     9.95 %     9.21 %     9.91 %  
  Book value per share   $   5.24     $   5.11     $   5.79     $   5.94     $   5.87     $   5.24     $   5.87    
  Cash dividend per share   $   0.07     $   0.66     $   0.06     $   0.06     $   0.05     $   0.73     $   0.80    
                                   
ASSET QUALITY                              
  Loan Charge-Offs   $   51     $   12     $   14     $   306     $   396     $   63     $   508    
  Loan Recoveries   $   124     $   331     $   170     $   179     $   199     $   455     $   387    
  Net Charge-Offs   $   (73 )   $   (319 )   $   (156 )   $   127     $   197     $   (392 )   $   121    
                                   
  Allowance for loan and lease losses   $   7,958     $   7,885     $   7,666     $   8,010     $   8,137     $   7,958     $   8,137    
                                   
  Nonaccrual Loans   $   3,360     $   3,453     $   3,658     $   3,050     $   4,143     $   3,360     $   4,143    
  Loans 90 days past due   $   -      $   -      $   3     $   5     $   3     $   -      $   3    
  Restructured loans   $   8,211     $   8,290     $   9,625     $   9,859     $   10,103     $   8,211     $   10,103    
    Total non performing loans   $   11,571     $   11,743     $   13,286     $   12,914     $   14,249     $   11,571     $   14,249    
  Other real estate owned & other assets   $   394     $   1,229     $   1,452     $   1,686     $   1,542     $   394     $   1,542    
    Total non performing assets   $   11,965     $   12,972     $   14,738     $   14,600     $   15,791     $   11,965     $   15,791    
                                   
  Classified Loans   $   9,604     $   8,866     $   8,273     $   9,206     $   10,599     $   9,604     $   10,599    
  Other real estate owned & other assets   $   394     $   1,229     $   1,452     $   1,686     $   1,542     $   394     $   1,542    
    Total classified assets   $   9,998     $   10,095     $   9,725     $   10,892     $   12,141     $   9,998     $   12,141    
                                   
  Net loan charge-offs to average loans     -0.04 %     -0.18 %     -0.09 %     0.07 %     0.12 %     -0.11 %     0.04 %  
  Allowance for loan losses to total loans     1.07 %     1.09 %     1.10 %     1.15 %     1.19 %     1.07 %     1.19 %  
  Non performing loans to gross loans     1.56 %     1.63 %     1.91 %     1.86 %     2.08 %     1.56 %     2.08 %  
  Non performing assets to total assets     0.91 %     0.98 %     1.09 %     1.08 %     1.19 %     0.91 %     1.19 %  
  Classified assets to total capital     7.17 %     7.44 %     6.64 %     7.59 %     8.63 %     7.17 %     8.63 %  
  Allowance to non performing loans     68.78 %     67.15 %     57.70 %     62.03 %     57.11 %     68.78 %     57.11 %  
                                   
END OF PERIOD BALANCES                              
  Loans and leases   $   741,120     $   722,640     $   695,325     $   693,866     $   683,648     $   741,120     $   683,648    
  Total earning assets   $   1,208,138     $   1,214,209     $   1,229,425     $   1,220,844     $   1,201,903     $   1,208,138     $   1,201,903    
  Total assets   $   1,321,885     $   1,326,056     $   1,347,420     $   1,347,352     $   1,326,392     $   1,321,885     $   1,326,392    
  Deposits   $   1,147,494     $   1,193,363     $   1,198,164     $   1,195,335     $   1,177,069     $   1,147,494     $   1,177,069    
  Interest Bearing Liabilities   $   892,760     $   900,120     $   898,326     $   897,408     $   886,474     $   892,760     $   886,474    
  Shareholders' equity   $   120,354     $   117,502     $   132,658     $   135,969     $   134,222     $   120,354     $   134,222    
  Tier 1 Capital (Bank)   $   131,441     $   127,783     $   138,819     $   135,470     $   132,565     $   131,441     $   132,565    
  Total Shares Outstanding       22,983,255         22,973,261         22,907,844         22,875,505         22,870,082         22,983,255         22,870,082    
                                   
AVERAGE BALANCES                              
  Loans and leases   $   726,746     $   705,874     $   693,586     $   686,259     $   672,849     $   716,368     $   664,744    
  Total earning assets   $   1,207,102     $   1,224,359     $   1,220,426     $   1,220,620     $   1,215,360     $   1,215,684     $   1,222,615    
  Total assets   $   1,308,543     $   1,327,708     $   1,324,847     $   1,324,723     $   1,316,081     $   1,318,072     $   1,322,569    
  Deposits   $   1,166,187     $   1,192,570     $   1,184,592     $   1,187,768     $   1,183,645     $   1,179,306     $   1,188,943    
  Interest Bearing Liabilities   $   892,433     $   898,089     $   884,979     $   895,376     $   904,581     $   895,246     $   910,820    
  Shareholders' equity   $   119,260     $   123,636     $   136,963     $   135,188     $   131,015     $   121,436     $   131,092    
                                   

 

MBT FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
                     
        Quarter Ended June 30,   Six Months Ended June 30,
Dollars in thousands (except per share data)   2018       2017       2018       2017  
Interest Income              
Interest and fees on loans $   8,736     $   7,709     $   16,953     $   15,073  
Interest on investment securities-              
  Tax-exempt     443         306         847         616  
  Taxable     2,087         2,185         4,297         4,453  
Interest on balances due from banks     58         101         183         210  
      Total interest income     11,324         10,301         22,280         20,352  
                     
Interest Expense              
Interest on deposits     400         434         814         890  
Interest on borrowed funds     91         3         97         3  
      Total interest expense     491         437         911         893  
                     
Net Interest Income     10,833         9,864         21,369         19,459  
Provision For (Recovery Of) Loan Losses     -          -          (100 )       (200 )
                     
Net Interest Income After              
Provision For (Recovery Of) Loan Losses     10,833         9,864         21,469         19,659  
                     
Other Income              
Income from wealth management services     1,178         1,547         2,363         2,675  
Service charges and other fees     955         1,046         1,901         2,060  
Debit Card income     786         748         1,506         1,428  
Net gain on sales of securities     (1 )       67         (102 )       77  
Net gain (loss) on other real estate owned     517         (62 )       536         (96 )
Origination fees on mortgage loans sold     92         115         154         174  
Bank Owned Life Insurance income     349         412         702         753  
Other       527         497         1,127         1,119  
      Total other income     4,403         4,370         8,187         8,190  
                     
Other Expenses              
Salaries and employee benefits     5,371         5,273         11,333         10,707  
Occupancy expense     620         682         1,341         1,430  
Equipment expense     874         791         1,667         1,488  
Marketing expense     467         302         844         586  
Professional fees     592         620         1,186         1,209  
EFT/ATM expense     288         259         547         507  
Other real estate owned expense     21         30         36         62  
FDIC deposit insurance assessment     92         107         199         214  
Bonding and other insurance expense     137         125         269         247  
Telephone expense     74         103         149         219  
Other       650         716         1,407         1,401  
      Total other expenses     9,186         9,008         18,978         18,070  
                     
Profit Before Income Taxes     6,050         5,226         10,678         9,779  
Income Tax Expense     1,105         1,586         1,831         2,959  
Net Profit $   4,945     $   3,640     $   8,847     $   6,820  
                     
Basic Earnings Per Common Share $   0.22     $   0.16     $   0.39     $   0.30  
                     
Diluted Earnings Per Common Share $   0.21     $   0.16     $   0.38     $   0.30  
                     
Dividends Declared Per Common Share $   0.07     $   0.05     $   0.73     $   0.80  
                     

 

MBT FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
             
             
        (Unaudited)    
Dollars in thousands June 30, 2018   December 31, 2017
Assets        
Cash and Cash Equivalents      
  Cash and due from banks      
    Non-interest bearing $   13,772     $   18,233  
    Interest bearing     1,214         34,777  
    Total cash and cash equivalents     14,986         53,010  
             
Interest Bearing Time Deposits in Other Banks     12,196         15,196  
Securities - Held to Maturity     33,148         37,163  
Securities - Available for Sale     416,312         442,816  
Federal Home Loan Bank stock - at cost     4,148         4,148  
Loans held for sale     334         346  
             
Loans       740,786         694,979  
Allowance for Loan Losses     (7,958 )       (7,666 )
Loans - Net     732,828         687,313  
             
Accrued interest receivable and other assets     21,773         20,463  
Other Real Estate Owned     394         1,412  
Bank Owned Life Insurance     58,855         58,153  
Premises and Equipment - Net     26,911         27,400  
    Total assets $   1,321,885     $   1,347,420  
             
Liabilities      
Deposits:      
  Non-interest bearing $   292,534     $   299,838  
  Interest-bearing     854,960         898,326  
    Total deposits     1,147,494         1,198,164  
             
Federal Home Loan Bank advances     30,000         -   
Federal funds purchased     7,800         -   
Accrued interest payable and other liabilities     16,237         16,598  
    Total liabilities     1,201,531         1,214,762  
             
Shareholders' Equity      
Common stock (no par value)     23,231         22,840  
Retained Earnings     109,668         117,524  
Unearned Compensation     (39 )       -   
Accumulated other comprehensive loss     (12,506 )       (7,706 )
    Total shareholders' equity     120,354         132,658  
    Total liabilities and shareholders' equity $   1,321,885     $   1,347,420  

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