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

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 thousandsDecember 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

Source:MBT Financial Corp.