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MBT Financial Corp. Announces Second Quarter 2016 Profit and Dividend Increase

MONROE, Mich., July 28, 2016 (GLOBE NEWSWIRE) -- MBT Financial Corp., (Nasdaq:MBTF), the parent company of Monroe Bank & Trust, reported a preliminary net profit of $4,239,000 ($0.19 per share, basic and $0.18 diluted), in the second quarter of 2016, compared to a profit of $2,285,000 ($0.10 per share, basic and diluted), in the second quarter of 2015. Year to date profit is $7,236,000 ($0.32 per share, basic, and $0.31 diluted) compared to $5,062,000 ($0.22 per share, basic and diluted) in the first two quarters of 2015.

The Company also announced that it will pay a dividend of $0.04 per share on August 18, 2016 to shareholders of record as of August 11, 2016. This is an increase of $0.01, or 33.3% compared to the dividend paid in the second quarter of 2016. The Company did not pay a dividend in the same period in 2015.

Earnings for the Company improved this quarter due to increases in net interest income and non-interest income and decreases in the provision for loan losses and non-interest expenses compared to the second quarter of 2015. The net interest margin decreased from 3.12% in the second quarter of 2015 to 3.10% in the second quarter of 2016, however the average amount of interest earning assets increased $35.3 million, and as a result, the net interest income increased $163,000, or 1.8% in the second quarter of 2016 compared to the second quarter of 2015.

The provision for loan losses decreased $200,000 compared to the second quarter of 2015 from no provision expense in the second quarter of 2015 to a negative expense of $200,000 recorded this quarter. Classified assets decreased 7.7% during the second quarter and the analysis of the risk in the loan portfolio indicated a need to reduce the Allowance for Loan Losses again this quarter. Total Loans increased $20.6 million during the second quarter, but the continued improvement in asset quality and historical loss ratios enabled the Company to reduce the Allowance for Loan and Lease Losses from 1.70% of loans at the end of the first quarter to 1.55% as of the end of the second quarter of 2016.

Non-interest income, excluding Other Real Estate and securities gains and losses was unchanged at $3.8 million in the second quarter of 2016 and 2015. Securities gains increased significantly, from $22,000 in the second quarter of 2015 to $1,752,000 in the second quarter of 2016. These gains were the result of bonds that were owned at discounts being called at par.

Total non-interest expenses decreased $858,000, or 8.8% in the second quarter of 2016 compared to the second quarter of 2015. Salaries and benefits decreased $351,000 or 6.1% as a result of the efficiency initiative that reduced our staffing in the fourth quarter of 2015. Expenses related to Other Real Estate Owned decreased $149,000 due to the decrease in the number of properties owned. The FDIC deposit insurance assessment decreased $238,000 as the assessment rate for FDIC insurance decreased due to the improved financial condition of the bank.

Total assets of the company decreased $18.9 million, or 1.4% compared to December 31, 2015. Capital decreased $1.7 million during the first six months of 2016 because the payment of the special and regular dividends exceeded the net income for the period. The ratio of equity to assets increased from 10.98% at the end of 2015 to 11.00% at June 30, 2016. The Bank’s Tier 1 Leverage ratio decreased from 10.91% as of December 31, 2015 to 10.33% as of June 30, 2016.

H. Douglas Chaffin, President and CEO, commented, “Exclusive of the impact of the securities gains and negative provision, we are pleased with our results this quarter, especially the loan growth and improvements in net interest income and non-interest expenses. After resuming quarterly dividends earlier this year, we think it is appropriate to increase the dividend based on these results. As the economic recovery slowly continues, we plan to continue to improve profitability by growing our loan portfolio and improving our operational efficiency. We will also continue to actively manage our capital, retaining sufficient resources to fund growth, whether it is within our existing branch network or through strategic acquisition opportunities. 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 Second Quarter 2016 results on Friday, July 29, 2016, 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 #10088121. The replay will be available until August 29, 2016 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 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, Lenawee, 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
2016 2016 2015 2015 2015
(dollars in thousands except per share data) 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 2016 2015
EARNINGS
Net interest income $ 9,244 $ 9,290 $ 9,328 $ 9,224 $ 9,081 $ 18,534 $ 18,423
FTE Net interest income $ 9,393 $ 9,438 $ 9,469 $ 9,358 $ 9,213 $ 18,831 $ 18,687
Provision for loan and lease losses $ (200) $ (300) $ (2,000) $ (200) $ - $ (500) $ (800)
Non interest income $ 5,555 $ 4,114 $ 3,919 $ 3,978 $ 3,805 $ 9,669 $ 7,430
Non interest expense $ 8,872 $ 9,483 $ 9,485 $ 9,166 $ 9,730 $ 18,355 $ 19,549
Net income $ 4,239 $ 2,997 $ 4,014 $ 3,006 $ 2,285 $ 7,236 $ 5,062
Basic earnings per share $ 0.19 $ 0.13 $ 0.18 $ 0.13 $ 0.10 $ 0.32 $ 0.22
Diluted earnings per share $ 0.18 $ 0.13 $ 0.18 $ 0.13 $ 0.10 $ 0.31 $ 0.22
Average shares outstanding 22,884,350 22,854,556 22,764,801 22,748,974 22,733,739 22,869,453 22,727,825
Average diluted shares outstanding 23,049,718 23,014,957 22,967,108 22,949,063 22,931,544 23,029,838 22,917,997
PERFORMANCE RATIOS
Return on average assets 1.28% 0.91% 1.22% 0.93% 0.72% 1.10% 0.80%
Return on average common equity 11.87% 8.57% 10.79% 8.48% 6.48% 10.23% 7.36%
Base Margin 3.03% 3.04% 3.04% 3.05% 3.04% 3.03% 3.07%
FTE Adjustment 0.05% 0.05% 0.05% 0.04% 0.04% 0.05% 0.05%
Loan Fees 0.02% 0.00% 0.02% 0.02% 0.04% 0.01% 0.08%
FTE Net Interest Margin 3.10% 3.09% 3.11% 3.11% 3.12% 3.09% 3.20%
Efficiency ratio 67.83% 69.75% 72.10% 67.83% 73.18% 68.80% 73.42%
Full-time equivalent employees 288 288 297 337 350 288 352
CAPITAL
Average equity to average assets 10.80% 10.65% 11.34% 10.96% 11.09% 10.73% 10.90%
Book value per share $ 6.41 $ 6.22 $ 6.46 $ 6.42 $ 6.11 $ 6.41 $ 6.11
Cash dividend per share $ 0.03 $ 0.53 $ - $ - $ - $ 0.56 $ -
ASSET QUALITY
Loan Charge-Offs $ 617 $ 209 $ 1,191 $ 192 $ 407 $ 826 $ 729
Loan Recoveries $ 184 $ 150 $ 1,091 $ 309 $ 295 $ 334 $ 1,400
Net Charge-Offs $ 433 $ 59 $ 100 $ (117) $ 112 $ 492 $ (671)
Allowance for loan and lease losses $ 9,903 $ 10,537 $ 10,896 $ 12,996 $ 13,079 $ 9,903 $ 13,079
Nonaccrual Loans $ 7,522 $ 8,079 $ 8,633 $ 10,623 $ 11,135 $ 7,522 $ 11,135
Loans 90 days past due $ 41 $ 17 $ 4 $ 6 $ - $ 41 $ -
Restructured loans $ 16,701 $ 17,828 $ 18,910 $ 20,972 $ 22,812 $ 16,701 $ 22,812
Total non performing loans $ 24,264 $ 25,924 $ 27,547 $ 31,601 $ 33,947 $ 24,264 $ 33,947
Other real estate owned & other assets $ 1,818 $ 1,608 $ 2,383 $ 2,154 $ 4,237 $ 1,818 $ 4,237
Total non performing assets $ 26,082 $ 27,532 $ 29,930 $ 33,755 $ 38,184 $ 26,082 $ 38,184
Classified Loans $ 24,365 $ 26,768 $ 28,490 $ 34,948 $ 41,952 $ 24,365 $ 41,952
Other real estate owned & other assets $ 1,818 $ 1,608 $ 2,383 $ 2,154 $ 4,237 $ 1,818 $ 4,237
Total classified assets $ 26,183 $ 28,376 $ 30,873 $ 37,102 $ 46,189 $ 26,183 $ 46,189
Net loan charge-offs to average loans 0.28% 0.04% 0.06% -0.07% 0.07% 0.16% -0.22%
Allowance for loan losses to total loans 1.55% 1.70% 1.76% 2.08% 2.09% 1.55% 2.09%
Non performing loans to gross loans 3.80% 4.19% 4.45% 5.05% 5.43% 3.80% 5.43%
Non performing assets to total assets 1.97% 2.06% 2.23% 2.56% 2.96% 1.97% 2.96%
Classified assets to total capital 17.70% 19.65% 20.06% 24.55% 31.36% 17.70% 31.36%
Allowance to non performing loans 40.81% 40.65% 39.55% 41.13% 38.53% 40.81% 38.53%
END OF PERIOD BALANCES
Loans and leases $ 639,199 $ 618,613 $ 618,785 $ 625,406 $ 625,172 $ 639,199 $ 625,172
Total earning assets $ 1,214,557 $ 1,227,990 $ 1,231,128 $ 1,212,892 $ 1,177,475 $ 1,214,557 $ 1,177,475
Total assets $ 1,323,415 $ 1,334,131 $ 1,342,313 $ 1,316,719 $ 1,292,104 $ 1,323,415 $ 1,292,104
Deposits $ 1,163,418 $ 1,162,733 $ 1,165,393 $ 1,136,809 $ 1,121,280 $ 1,163,418 $ 1,121,280
Interest Bearing Liabilities $ 893,027 $ 918,593 $ 926,598 $ 904,297 $ 898,116 $ 893,027 $ 898,116
Shareholders' equity $ 145,623 $ 142,424 $ 147,341 $ 146,154 $ 138,864 $ 145,623 $ 138,864
Tier 1 Capital (Bank) $ 138,059 $ 133,870 $ 142,997 $ 138,163 $ 134,215 $ 138,059 $ 134,215
Total Shares Outstanding 22,728,558 22,902,198 22,790,707 22,761,327 22,741,898 22,728,558 22,741,898
AVERAGE BALANCES
Loans and leases $ 625,435 $ 620,010 $ 621,217 $ 624,921 $ 621,010 $ 622,723 $ 618,518
Total earning assets $ 1,218,569 $ 1,227,703 $ 1,211,342 $ 1,190,561 $ 1,183,291 $ 1,223,138 $ 1,180,078
Total assets $ 1,329,935 $ 1,320,975 $ 1,302,176 $ 1,283,384 $ 1,275,744 $ 1,325,454 $ 1,273,216
Deposits $ 1,173,998 $ 1,164,320 $ 1,139,475 $ 1,130,807 $ 1,121,658 $ 1,169,160 $ 1,123,137
Interest Bearing Liabilities $ 920,340 $ 926,618 $ 902,216 $ 903,648 $ 906,725 $ 923,480 $ 911,873
Shareholders' equity $ 143,685 $ 140,684 $ 147,626 $ 140,619 $ 141,507 $ 142,184 $ 138,754


MBT FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
Quarter Ended June 30, Six Months Ended June 30,
Dollars in thousands (except per share data) 2016 2015 2016 2015
Interest Income
Interest and fees on loans$ 7,179 $ 7,154 $ 14,214 $ 14,586
Interest on investment securities-
Tax-exempt 303 273 608 548
Taxable 2,218 2,436 4,744 4,864
Interest on balances due from banks 162 14 279 40
Total interest income 9,862 9,877 19,845 20,038
Interest Expense
Interest on deposits 486 619 1,003 1,264
Interest on borrowed funds 132 177 308 351
Total interest expense 618 796 1,311 1,615
Net Interest Income 9,244 9,081 18,534 18,423
Provision For Loan Losses (200) - (500) (800)
Net Interest Income After
Provision For Loan Losses 9,444 9,081 19,034 19,223
Other Income
Income from wealth management services 1,105 1,191 2,202 2,413
Service charges and other fees 1,016 1,030 2,024 1,924
Debit Card income 735 591 1,409 1,155
Net gain on sales of securities 1,752 22 2,072 258
Net loss on other real estate owned (1) (21) (57) (284)
Origination fees on mortgage loans sold 136 137 266 266
Bank Owned Life Insurance income 362 362 717 633
Other 450 493 1,036 1,065
Total other income 5,555 3,805 9,669 7,430
Other Expenses
Salaries and employee benefits 5,399 5,750 11,017 11,624
Occupancy expense 633 606 1,334 1,426
Equipment expense 726 790 1,410 1,524
Marketing expense 286 308 545 554
Professional fees 556 550 1,208 1,126
EFT/ATM expense 237 118 546 208
Other real estate owned expense 30 179 94 305
FDIC deposit insurance assessment 191 429 360 843
Bonding and other insurance expense 214 227 336 457
Telephone expense 91 109 217 204
Other 509 664 1,288 1,278
Total other expenses 8,872 9,730 18,355 19,549
Profit Before Income Taxes 6,127 3,156 10,348 7,104
Income Tax Expense 1,888 871 3,112 2,042
Net Profit$ 4,239 $ 2,285 $ 7,236 $ 5,062
Basic Earnings Per Common Share$ 0.19 $ 0.10 $ 0.32 $ 0.22
Diluted Earnings Per Common Share$ 0.18 $ 0.10 $ 0.31 $ 0.22
Dividends Declared Per Common Share$ 0.03 $ - $ 0.56 $ -


MBT FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Dollars in thousandsJune 30, 2016 December 31, 2015
Assets
Cash and Cash Equivalents
Cash and due from banks
Non-interest bearing$ 15,529 $ 14,996
Interest bearing 102,839 70,054
Total cash and cash equivalents 118,368 85,050
Securities - Held to Maturity 39,314 41,282
Securities - Available for Sale 429,057 496,859
Federal Home Loan Bank stock - at cost 4,148 4,148
Loans held for sale 919 1,477
Loans 638,280 617,308
Allowance for Loan Losses (9,903) (10,896)
Loans - Net 628,377 606,412
Accrued interest receivable and other assets 20,106 23,365
Other Real Estate Owned 1,808 2,383
Bank Owned Life Insurance 53,707 53,093
Premises and Equipment - Net 27,611 28,244
Total assets$ 1,323,415 $ 1,342,313
Liabilities
Deposits:
Non-interest bearing$ 270,391 $ 253,795
Interest-bearing 893,027 911,598
Total deposits 1,163,418 1,165,393
Repurchase agreements - 15,000
Accrued interest payable and other liabilities 14,374 14,579
Total liabilities 1,177,792 1,194,972
Shareholders' Equity
Common stock (no par value) 22,315 23,492
Retained Earnings 120,633 126,214
Unearned Compensation (35) (13)
Accumulated other comprehensive income (loss) 2,710 (2,352)
Total shareholders' equity 145,623 147,341
Total liabilities and shareholders' equity$ 1,323,415 $ 1,342,313



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

Source:MBT Financial Corp.