MBT Financial Corp. Announces Third Quarter 2015 Profit

MONROE, Mich., Oct. 26, 2015 (GLOBE NEWSWIRE) — MBT Financial Corp., (Nasdaq:MBTF), the parent company of Monroe Bank & Trust, reported a net profit of $3,006,000 ($0.13 per share, basic and diluted), in the third quarter of 2015, compared to a profit of $1,712,000 ($0.08 per share, basic and $0.07 per share, diluted), in the third quarter of 2014. The net profit for the nine months ended September 30, 2015 was $8,068,000 ($0.35 per share, basic and diluted), compared to $5,166,000 ($0.24 per share, basic and $0.23 per share, diluted) in the nine months ended September 30, 2014.

Earnings for the Company improved this quarter due to improvements in net interest income, non-interest income, and non-interest expenses. The net interest margin decreased from 3.17% in the third quarter of 2014 to 3.11% in the third quarter of 2015, but the average amount of interest earning assets increased $65.6 million. As a result, net interest income improved by 4.2% in the third quarter of 2015 compared to the third quarter of 2014. 

The provision for loan losses increased $500,000 compared to the third quarter of 2014 from a recovery of $700,000 in 2014 to a recovery of $200,000 this quarter. Improving asset quality and recoveries of loans previously charged off allowed the bank to maintain an adequate Allowance for Loan Losses while recording its second negative quarterly provision in 2015. Loans charged off during the quarter totaled $192,000, while $309,000 was recovered on loans charged off previously. Total Loans increased $14.5 million during the first three quarters of 2015, but the continued improvement in asset quality enabled the Company to reduce the Allowance for Loan and Lease Losses from 2.24% of loans at the end of 2014 to 2.08% as of the end of the third quarter.

Non-interest income increased $1.9 million, or 87.2% in the third quarter of 2015 compared to the third quarter of 2014. Excluding gains and losses from securities and other real estate transactions, non-interest income increased $147,000, or 3.9% as deposit account fees, debit card income, and mortgage loan origination fees all increased.

Total non-interest expenses decreased $196,000, or 2.1% in the third quarter of 2015 compared to the third quarter of 2014. Expenses related to Other Real Estate Owned decreased $128,000 or 68.4% due to the decrease in the number of properties owned. FDIC insurance decreased $63,000 or 22.9% as the assessment rate decreased when the FDIC and the State of Michigan terminated the Bank’s informal regulatory agreement in 2015.

Total assets of the company increased $38.1 million, or 3.0% compared to December 31, 2014. Total loans increased $14.5 million since the end of 2014. Capital increased $11.6 million since the end of last year primarily due to the year to date profit of $8.1 million. The Accumulated Other Comprehensive Income (AOCI) component of capital increased $3.3 million compared to the end of 2014. The AOCI increased mainly due to an increase in the market values of our investment securities that are classified as available for sale. The ratio of equity to assets increased from 10.52% at the end of 2014 to 11.10% at September 30, 2015. The Bank’s Tier 1 Leverage ratio increased from 9.55% as of December 31, 2014 to 10.63% as of September 30, 2015.

H. Douglas Chaffin, President and CEO, commented, “We are pleased with our results for the first three quarters of 2015, and we believe that our balance sheet is positioned to produce better earnings results when interest rates increase. While we remain concerned about the effect of global and national issues on our local economy, we plan to continue our efforts to improve profitability by growing our loan portfolio and improving our operational efficiency.  After the end of the third quarter we began an efficiency initiative that will provide meaningful expense reductions beginning in the first quarter of 2016. Our current environment still presents challenges, but 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 results on Tuesday, October 27, 2015, 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 #10073255. The replay will be available until November 27, 2015 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 approximately 9,000 hours of community service annually. MBT’s Commercial Lending Group is a top SBA and MEDC lending partner.  MBT’s Wealth Management Group (“WMG”) is one of the largest and most respected in Michigan.  The Michigan Bankers Association ranks MBT fourth among all Michigan banks for total trust assets.  With offices and ATMs in Monroe, Wayne, and Lenawee 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
          2015       2015       2015       2014       2014          
(dollars in thousands except per share data)   3rd Qtr   2nd Qtr   1st Qtr   4th Qtr   3rd Qtr     2015       2014  
                                 
EARNINGS                            
  Net interest income   $   9,224     $   9,081     $   9,342     $   8,802     $   8,852     $   27,647     $   25,899  
  FTE Net interest income   $   9,358     $   9,213     $   9,474     $   8,934     $   8,989     $   28,045     $   26,322  
  Provision for loan and lease losses   $   (200 )   $   –      $   (800 )   $   –      $   (700 )   $   (1,000 )   $   (500 )
  Non interest income   $   3,978     $   3,805     $   3,625     $   3,980     $   2,125     $   11,408     $   9,373  
  Non interest expense   $   9,166     $   9,730     $   9,819     $   9,815     $   9,362     $   28,715     $   28,852  
  Net income   $   3,006     $   2,285     $   2,777     $   2,149     $   1,712     $   8,068     $   5,166  
  Basic earnings per share   $   0.13     $   0.10     $   0.12     $   0.09     $   0.08     $   0.35     $   0.24  
  Diluted earnings per share   $   0.13     $   0.10     $   0.12     $   0.09     $   0.07     $   0.35     $   0.23  
  Average shares outstanding      22,748,974       22,733,739       22,721,845       22,697,204       22,691,593       22,734,952       21,911,996  
  Average diluted shares outstanding     22,949,063       22,931,544       22,906,334       22,956,549       22,986,918       22,916,444       22,203,459  
                                 
PERFORMANCE RATIOS                            
  Return on average assets     0.93 %     0.72 %     0.89 %     0.70 %     0.56 %     0.84 %     0.57 %
  Return on average common equity     8.48 %     6.48 %     8.28 %     6.45 %     5.21 %     7.74 %     5.65 %
                                 
  Base Margin     3.05 %     3.04 %     3.10 %     3.07 %     3.09 %     3.07 %     3.09 %
  FTE Adjustment     0.04 %     0.04 %     0.05 %     0.05 %     0.05 %     0.04 %     0.05 %
  Loan Fees     0.02 %     0.04 %     0.12 %     0.02 %     0.03 %     0.06 %     0.03 %
  FTE Net Interest Margin     3.11 %     3.12 %     3.27 %     3.14 %     3.17 %     3.17 %     3.17 %
                                 
  Efficiency ratio     67.83 %     73.18 %     73.66 %     75.19 %     71.66 %     71.54 %     74.51 %
  Full-time equivalent employees       346         350         355         366         370         350         369  
                                 
CAPITAL                            
  Average equity to average assets     10.96 %     11.09 %     10.70 %     10.78 %     10.71 %     10.92 %     10.16 %
  Book value per share   $   6.42     $   6.11     $   6.17     $   5.92     $   5.76     $   6.42     $   5.76  
  Cash dividend per share   $   –      $   –      $   –      $   –      $   –      $   –      $   –   
                                 
ASSET QUALITY                            
  Loan Charge-Offs   $   192     $   407     $   322     $   455     $   3,353     $   921     $   5,689  
  Loan Recoveries   $   309     $   295     $   1,105     $   533     $   2,182     $   1,709     $   3,110  
  Net Charge-Offs   $   (117 )   $   112     $   (783 )   $   (78 )   $   1,171     $   (788 )   $   2,579  
                                 
  Allowance for loan and lease losses   $   12,996     $   13,079     $   13,191     $   13,208     $   13,130     $   12,996     $   13,130  
                                 
  Nonaccrual Loans   $   10,623     $   11,135     $   12,329     $   13,040     $   13,351     $   10,623     $   13,351  
  Loans 90 days past due   $   6     $   –      $   3     $   10     $   7     $   6     $   7  
  Restructured loans   $   20,972     $   22,812     $   22,788     $   22,896     $   24,094     $   20,972     $   24,094  
    Total non performing loans   $   31,601     $   33,947     $   35,120     $   35,946     $   37,452     $   31,601     $   37,452  
  Other real estate owned & other assets   $   2,154     $   4,237     $   4,893     $   5,633     $   6,043     $   2,154     $   6,043  
  Nonaccrual Investment Securities   $   –      $   –      $   –      $   –      $   –      $   –      $   –   
    Total non performing assets   $   33,755     $   38,184     $   40,013     $   41,579     $   43,495     $   33,755     $   43,495  
                                 
  Classified Loans   $   34,948     $   41,952     $   46,668     $   48,978     $   48,662     $   34,948     $   48,662  
  Other real estate owned & other assets   $   2,154     $   4,237     $   4,893     $   5,633     $   6,043     $   2,154     $   6,043  
  Classified Investment Securities   $   –      $   –      $   –      $   –      $   –      $   –      $   –   
    Total classified assets   $   37,102     $   46,189     $   51,561     $   54,611     $   54,705     $   37,102     $   54,705  
                                 
  Net loan charge-offs to average loans     -0.07 %     0.07 %     -0.52 %     -0.05 %     0.78 %     -0.17 %     0.58 %
  Allowance for loan losses to total loans     2.08 %     2.09 %     2.13 %     2.16 %     2.24 %     2.08 %     2.24 %
  Non performing loans to gross loans     5.05 %     5.43 %     5.67 %     5.88 %     6.39 %     5.05 %     6.39 %
  Non performing assets to total assets     2.56 %     2.96 %     3.06 %     3.25 %     3.47 %     2.56 %     3.47 %
  Classified assets to total capital     24.54 %     31.36 %     35.70 %     41.64 %     42.73 %     24.54 %     42.73 %
  Allowance to non performing loans     41.13 %     38.53 %     37.56 %     36.74 %     35.06 %     41.13 %     35.06 %
                                 
END OF PERIOD BALANCES                            
  Loans and leases   $   625,406     $   625,172     $   619,385     $   610,880     $   586,152     $   625,406     $   586,152  
  Total earning assets   $   1,212,892     $   1,177,475     $   1,196,949     $   1,160,371     $   1,135,016     $   1,212,892     $   1,135,016  
  Total assets   $   1,316,719     $   1,292,104     $   1,307,053     $   1,278,657     $   1,251,812     $   1,316,719     $   1,251,812  
  Deposits   $   1,136,809     $   1,121,280     $   1,135,312     $   1,111,811     $   1,089,484     $   1,136,809     $   1,089,484  
  Interest Bearing Liabilities   $   904,297     $   898,116     $   914,569     $   908,590     $   894,753     $   904,297     $   894,753  
  Shareholders’ equity   $   146,154     $   138,864     $   140,208     $   134,536     $   130,652     $   146,154     $   130,652  
  Tier 1 Capital (Bank)   $   138,163     $   134,215     $   131,235     $   117,944     $   114,898     $   138,163     $   114,898  
  Total Shares Outstanding       22,761,327         22,741,898         22,730,647         22,718,077         22,694,906         22,761,327         22,694,906  
                                 
AVERAGE BALANCES                            
  Loans and leases   $   624,921     $   621,010     $   615,994     $   606,060     $   597,771     $   620,676     $   597,699  
  Total earning assets   $   1,190,561     $   1,183,291     $   1,176,825     $   1,131,448     $   1,124,988     $   1,183,612     $   1,111,019  
  Total assets   $   1,283,384     $   1,275,744     $   1,270,661     $   1,225,996     $   1,217,640     $   1,276,642     $   1,202,540  
  Deposits   $   1,130,807     $   1,121,658     $   1,124,633     $   1,085,325     $   1,079,425     $   1,125,723     $   1,068,156  
  Interest Bearing Liabilities   $   903,648     $   906,725     $   917,079     $   880,276     $   884,832     $   909,102     $   883,221  
  Shareholders’ equity   $   140,619     $   141,507     $   135,971     $   132,121     $   130,404     $   139,382     $   122,203  
                                 

MBT FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED
                     
        Quarter Ended September 30,   Nine Months Ended September 30,
Dollars in thousands (except per share data)   2015       2014       2015       2014  
Interest Income              
Interest and fees on loans $   7,225     $   7,255     $   21,811     $   21,355  
Interest on investment securities-              
  Tax-exempt     278         288         826         892  
  Taxable     2,437         2,222         7,301         6,540  
Interest on balances due from banks     24         32         64         86  
      Total interest income     9,964         9,797         30,002         28,873  
                     
Interest Expense              
Interest on deposits     562         767         1,826         2,423  
Interest on borrowed funds     178         178         529         551  
      Total interest expense     740         945         2,355         2,974  
                     
Net Interest Income     9,224         8,852         27,647         25,899  
Provision For Loan Losses     (200 )       (700 )       (1,000 )       (500 )
                     
Net Interest Income After              
Provision For Loan Losses     9,424         9,552         28,647         26,399  
                     
Other Income              
Income from wealth management services     1,163         1,194         3,576         3,496  
Service charges and other fees     1,134         1,054         3,058         2,954  
Debit Card income     594         557         1,749         1,588  
Net gain on sales of securities     16         (1,020 )       274         (744 )
Net gain (loss) on other real estate owned     36         (634 )       (248 )       (964 )
Origination fees on mortgage loans sold     184         80         450         230  
Bank Owned Life Insurance income     358         357         991         1,062  
Other real estate owned rent     68         99         205         364  
Other       425         438         1,353         1,387  
      Total other income     3,978         2,125         11,408         9,373  
                     
Other Expenses              
Salaries and employee benefits     5,694         5,631         17,318         17,163  
Occupancy expense     648         626         2,074         2,040  
Equipment expense     708         723         2,232         2,002  
Marketing expense     267         225         821         640  
Professional fees     481         681         1,607         1,620  
Other real estate owned expense     59         187         364         887  
FDIC deposit insurance assessment     212         275         1,055         1,535  
Bonding and other insurance expense     203         258         660         777  
Telephone expense     113         108         317         355  
Other       781         648         2,267         1,833  
      Total other expenses     9,166         9,362         28,715         28,852  
                     
Profit Before Income Taxes     4,236         2,315         11,340         6,920  
Income Tax Expense     1,230         603         3,272         1,754  
Net Profit $   3,006     $   1,712     $   8,068     $   5,166  
                     
Basic Earnings Per Common Share $   0.13     $   0.08     $   0.35     $   0.24  
                     
Diluted Earnings Per Common Share $   0.13     $   0.07     $   0.35     $   0.23  
                     
Dividends Declared Per Common Share $   –      $   –      $   –      $   –   
                     

MBT FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
             
             
        (Unaudited)    
Dollars in thousands September 30, 2015   December 31, 2014
Assets        
Cash and Cash Equivalents      
  Cash and due from banks      
    Non-interest bearing $   8,205     $   15,957  
    Interest bearing     58,220         36,165  
    Total cash and cash equivalents     66,425         52,122  
             
Securities – Held to Maturity     37,492         32,613  
Securities – Available for Sale     487,626         473,176  
Federal Home Loan Bank stock – at cost     4,148         7,537  
Loans held for sale     1,597         548  
             
Loans       623,809         610,332  
Allowance for Loan Losses     (12,996 )       (13,208 )
Loans – Net     610,813         597,124  
             
Accrued interest receivable and other assets     25,275         29,465  
Other Real Estate Owned     2,154         5,615  
Bank Owned Life Insurance     52,730         51,825  
Premises and Equipment – Net     28,459         28,632  
    Total assets $   1,316,719     $   1,278,657  
             
Liabilities      
Deposits:      
  Non-interest bearing $   247,512     $   218,221  
  Interest-bearing     889,297         893,590  
    Total deposits     1,136,809         1,111,811  
             
Repurchase agreements     15,000         15,000  
Accrued interest payable and other liabilities     18,756         17,310  
    Total liabilities     1,170,565         1,144,121  
             
Shareholders’ Equity      
Common stock (no par value)     23,345         23,037  
Retained Earnings     122,200         114,132  
Unearned Compensation     (15 )       –   
Accumulated other comprehensive income (loss)     624         (2,633 )
    Total shareholders’ equity     146,154         134,536  
    Total liabilities and shareholders’ equity $   1,316,719     $   1,278,657  

 

 

CONTACT: 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