MBTF MBT Financial Corporation

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 CallMBT 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