MBT Financial Corp. Announces Third Quarter Results

MONROE, Mich., Oct. 28, 2010 (GLOBE NEWSWIRE) -- MBT Financial Corp., (Nasdaq:MBTF), the parent company of Monroe Bank & Trust, reported a net loss of $4.3 million, or $0.27 per share, in the third quarter of 2010, compared to the loss of $2.3 million, or $0.14 per share in the third quarter of 2009. The loss was due to continuing elevated credit costs and a decrease in the net interest income. The Company reported a year to date net loss of $4.4 million, or $0.27 per share, compared to the loss of $9.1 million, or $0.56 per share for the first nine months of 2009. The pre-tax loss for the quarter was $4.3 million, or $0.27 per share compared to $4.1 million, or $0.25 per share. The year to date pre-tax loss of $4.4, or $0.27 per share is significantly lower than the pre-tax loss last year of $15.5 million, or $0.96 per share.

The Net Interest Income for the second quarter of 2010 was $9.4 million, a decrease of $1.1 million, or 10.4% compared to the same period in 2009. The net interest income decreased because the average earning assets decreased $183 million, or 13.7%. This included a decrease of $98.5 million, or 11.0% in average loans, as weak economic conditions, coupled with ongoing stringent underwriting standards, continue to have a negative impact on loan demand and growth.

Non interest income, excluding securities gains, increased 12.1% from $3.7 million in the third quarter of 2009 to $4.2 million in the third quarter of 2010. Total non interest expenses increased $250,000, or 2.2%. The bank's efforts to control expenses resulted in significant reductions in salaries, employee benefits, occupancy expenses, and marketing. Write downs and carrying costs of Other Real Estate Owned and FDIC insurance costs increased compared to the third quarter of 2009. Excluding OREO related costs and FDIC deposit insurance assessments, non interest expenses decreased 5.1% from $8.4 million to $8.0 million in the third quarter of 2010 compared to the third quarter of 2009.

Total assets of the company decreased $182.6 million compared to September 30, 2009, mainly due to the previously mentioned decrease in loan demand and a reduction in borrowed funds. Core deposit activity remains strong and non interest bearing demand deposits increased by 17.9% over the 12 month period. The market continues to demonstrate the value of our customer focused community bank model and we regularly evaluate the activity in each of our branch locations. Due to the confidence our customers have demonstrated in us, we recently decided to restore full service at our Erie Office. This office had been reduced to drive up only service in March of 2009, and we have decided to reallocate resources so that we can reopen the lobby without adding staff to our total retail operation.

Although we have recorded a year to date loss of $4.4 million, capital has increased $2.3 million so far this year, and the ratio of equity to assets, a key indicator of bank strength and safety, increased from 5.91% at December 31, 2009 to 6.67% at September 30, 2010. In addition, the company's liquidity position remains good, with cash and investments totaling 28.8% of assets, down slightly from 29.9% at the end of 2009.

H. Douglas Chaffin, President and CEO, commented, "We are disappointed by the loss this quarter, but we are encouraged by the continuing fundamental improvements in our financial condition. Our net interest margin, non interest income, and recurring non interest expenses all improved compared to the third quarter last year. The loss this quarter is primarily attributable to the continued decline in real estate values. Although residential property values appear to have stabilized, we are now experiencing the impact of the decline in commercial and residential development properties. Because of this, write downs and losses on sales of other real estate owned totaled $2.0 million in the third quarter. These numbers include the write downs of 17 properties that we sold at an auction on September 30, and all of those transactions are expected to close in October."

Mr. Chaffin concluded, "Economic conditions in our market have stabilized, but the effects of this prolonged period of weakness continue to impact our commercial borrowers. We will continue to focus our efforts on improving asset quality, maintaining liquidity, strengthening capital, seeking new sources of revenue, and controlling expenses. During the quarter we commenced a private placement of debt and equity to improve the capital ratios of the Bank. To date we have raised over $1.2 million, and we continue to have frequent discussions with potential investors. We still have much work ahead of us given our current environment, but we remain confident in our plans and our ability to remain the premier independent community bank in our market."

Conference Call

MBT Financial Corp. will hold a conference call to discuss third quarter results on Friday, October 29, 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 by calling (800) 860-2442. The event 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 single 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 community banks in Southeast Michigan. MBT is a full-service bank, offering a complete range of business and personal accounts, credit options, and phone and online banking services. MBT's Wealth Management Group is one of the largest and most respected in Southeastern Michigan. With 25 offices, 41 ATMs, and a comprehensive array of products and services, MBT prides itself in offering an incomparable banking experience for its customers. Visit MBT's web site at www.mbandt.com.

The MBT Financial Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4214

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
(dollars in thousands except per share data)              2010 3rd Qtr 2010 2nd Qtr 2010 1st Qtr 2009 4th Qtr 2009 3rd Qtr 2010 2009
               
EARNINGS              
Net interest income  $ 9,421  $ 9,188  $ 9,405  $ 10,101  $ 10,516  $ 28,014  $ 30,914
FTE Net interest income  $ 9,603  $ 9,389  $ 9,677  $ 10,417  $ 10,857  $ 28,669  $ 31,958
Provision for loan and lease losses  $ 6,500  $ 3,750  $ 2,200  $ 17,000  $ 6,800  $ 12,450  $ 19,000
Non-interest income  $ 4,381  $ 6,819  $ 4,041  $ (40)  $ 3,559  $ 15,241  $ 10,520
Non-interest expense  $ 11,640  $ 12,629  $ 10,898  $ 11,798  $ 11,390  $ 35,167  $ 37,976
Net income (loss)  $ (4,338)  $ (372)  $ 348  $ (25,112)  $ (2,325)  $ (4,362)  $ (9,065)
Basic earnings (loss) per share  $ (0.27)  $ (0.02)  $ 0.02  $ (1.56)  $ (0.14)  $ (0.27)  $ (0.56)
Diluted earnings (loss) per share  $ (0.27)  $ (0.02)  $ 0.02  $ (1.56)  $ (0.14)  $ (0.27)  $ (0.56)
Average shares outstanding  16,329,549 16,225,327 16,216,177 16,204,139 16,192,914 16,257,433 16,180,527
Average diluted shares outstanding 16,329,549 16,225,327 16,216,708 16,204,139 16,192,914 16,257,433 16,180,527
               
PERFORMANCE RATIOS              
Return on average assets -1.37% -0.11% 0.10% -7.17% -0.64% -0.45% -0.83%
Return on average common equity -19.74% -1.77% 1.71% -90.17% -8.20% -6.87% -10.32%
               
Base Margin 3.21% 3.03% 3.01% 3.08% 3.08% 3.08% 2.99%
FTE Adjustment 0.06% 0.07% 0.09% 0.10% 0.10% 0.07% 0.10%
Loan Fees 0.05% 0.03% 0.03% 0.04% 0.06% 0.04% 0.05%
FTE Net Interest Margin 3.32% 3.13% 3.13% 3.22% 3.24% 3.19% 3.14%
               
Efficiency ratio 65.36% 63.84% 67.75% 61.93% 61.90% 65.64% 67.21%
Full-time equivalent employees  350  356  351  362  370  352  374
               
CAPITAL              
Average equity to average assets 6.94% 6.44% 6.08% 7.95% 7.84% 6.48% 8.01%
Book value per share  $ 4.94  $ 5.31  $ 5.17  $ 5.04  $ 6.77  $ 4.94  $ 6.77
Cash dividend per share  $ --   $ --   $ --   $ --   $ --   $ --   $ 0.02
               
ASSET QUALITY              
Loan Charge-Offs  $ 10,046  $ 3,967  $ 2,362  $ 11,721  $ 12,364  $ 16,375  $ 20,273
Loan Recoveries  $ 266  $ 131  $ 211  $ 211  $ 262  $ 608  $ 1,318
Net Charge-Offs  $ 9,780  $ 3,836  $ 2,151  $ 11,510  $ 12,102  $ 15,767  $ 18,955
               
Allowance for loan and lease losses  $ 20,746  $ 24,026  $ 24,112  $ 24,063  $ 18,573  $ 20,746  $ 18,573
               
Nonaccrual Loans  $ 64,192  $ 65,066  $ 61,722  $ 56,992  $ 62,038  $ 64,192  $ 62,038
Loans 90 days past due  $ 117  $ 166  $ 53  $ 20  $ 192  $ 117  $ 192
Restructured loans  $ 15,290  $ 25,058  $ 28,042  $ 29,102  $ 14,359  $ 15,290  $ 14,359
Total non performing loans  $ 79,599  $ 90,290  $ 89,817  $ 86,114  $ 76,589  $ 79,599  $ 76,589
Other real estate owned & other assets  $ 19,042  $ 18,387  $ 19,634  $ 18,832  $ 20,737  $ 19,042  $ 20,737
Nonaccrual Investment Securities  $ 4,740  $ 4,740  $ 4,740  $ 4,740  $ --   $ 4,740  $ -- 
Total non performing assets  $ 103,381  $ 113,417  $ 114,191  $ 109,686  $ 97,326  $ 103,381  $ 97,326
Problem Loans Still Performing  $ 49,589  $ 41,693  $ 44,105  $ 46,278  $ 48,366  $ 49,589  $ 48,366
Total Problem Assets  $ 152,970  $ 155,110  $ 158,296  $ 155,964  $ 145,692  $ 152,970  $ 145,692
               
Net loan charge-offs to average loans 4.84% 1.88% 1.04% 5.25% 5.34% 2.58% 2.76%
Allowance for losses to total loans 2.64% 2.97% 2.93% 2.83% 2.11% 2.64% 2.11%
Non performing loans to gross loans 10.13% 11.18% 10.91% 10.13% 8.71% 10.13% 8.71%
Non performing assets to total assets 8.21% 8.98% 8.27% 7.93% 6.75% 8.21% 6.75%
Allowance to non performing loans 26.06% 26.61% 26.85% 27.94% 24.25% 26.06% 24.25%
               
END OF PERIOD BALANCES              
Loans and leases  $ 786,054  $ 807,788  $ 823,515  $ 849,910  $ 879,513  $ 786,054  $ 879,513
Total earning assets  $ 1,143,825  $ 1,144,120  $ 1,260,637  $ 1,258,073  $ 1,315,930  $ 1,143,825  $ 1,315,930
Total assets  $ 1,259,876  $ 1,263,678  $ 1,381,616  $ 1,383,369  $ 1,442,512  $ 1,259,876  $ 1,442,512
Deposits  $ 1,022,460  $ 1,023,657  $ 1,028,921  $ 1,031,791  $ 1,047,649  $ 1,022,460  $ 1,047,649
Interest Bearing Liabilities  $ 1,022,398  $ 1,022,293  $ 1,149,728  $ 1,155,253  $ 1,199,403  $ 1,022,398  $ 1,199,403
Shareholders' equity  $ 84,079  $ 86,201  $ 83,913  $ 81,764  $ 109,597  $ 84,079  $ 109,597
Total Shares Outstanding  17,030,844  16,228,029  16,222,177  16,210,110  16,198,785  17,030,844  16,198,785
               
AVERAGE BALANCES              
Loans and leases  $ 801,240  $ 816,487  $ 836,122  $ 869,130  $ 899,789  $ 817,824  $ 917,561
Total earning assets  $ 1,148,796  $ 1,205,711  $ 1,253,567  $ 1,283,459  $ 1,331,375  $ 1,202,312  $ 1,360,872
Total assets  $ 1,256,422  $ 1,311,835  $ 1,361,507  $ 1,390,421  $ 1,434,959  $ 1,309,536  $ 1,466,583
Deposits  $ 1,025,385  $ 1,017,761  $ 1,024,651  $ 1,024,353  $ 1,051,967  $ 1,022,601  $ 1,068,952
Interest Bearing Liabilities  $ 1,025,493  $ 1,093,471  $ 1,149,938  $ 1,158,525  $ 1,202,082  $ 1,089,179  $ 1,224,129
Shareholders' equity  $ 87,184  $ 84,486  $ 82,775  $ 110,488  $ 112,525  $ 84,832  $ 117,488
 
 
MBT FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
         
  Quarter Ended September 30, Nine Months Ended September 30,
Dollars in thousands (except per share data) 2010 2009 2010 2009
Interest Income        
Interest and fees on loans  $ 11,587  $ 13,229  $ 35,178  $ 39,994
Interest on investment securities--        
Tax-exempt  426  837  1,540  2,579
Taxable  1,742  3,544  6,784  11,872
Interest on balances due from banks  34  30  100  57
Total interest income  13,789  17,640  43,602  54,502
         
Interest Expense        
Interest on deposits  3,279  4,174  9,968  14,280
Interest on borrowed funds  1,089  2,950  5,620  9,308
Total interest expense  4,368  7,124  15,588  23,588
         
Net Interest Income  9,421  10,516  28,014  30,914
Provision For Loan Losses  6,500  6,800  12,450  19,000
         
Net Interest Income After Provision For Loan Losses  2,921  3,716  15,564  11,914
         
Other Income        
Income from wealth management services  936  936  3,039  2,756
Service charges and other fees  1,413  1,516  3,985  4,304
Net gain on sales of securities  183  4,365  3,269  5,021
         
Other Than Temporary Impairment on securities  --   (2,693)  --   (9,093)
Portion of OTTI loss recognized in other comprehensive income (before taxes)  --   (1,859)  --   3,772
Net impairment losses  --   (4,552)  --   (5,321)
         
Origination fees on mortgage loans sold  189  119  458  350
Bank Owned Life Insurance income  693  369  1,532  1,034
Other  967  806  2,958  2,376
Total other income  4,381  3,559  15,241  10,520
         
Other Expenses        
Salaries and employee benefits  4,717  5,122  14,438  15,956
Occupancy expense  686  804  2,194  2,445
Equipment expense  780  729  2,417  2,348
Marketing expense  230  277  734  798
Professional fees  549  419  1,537  1,286
Collection expense  67  121  263  685
Net loss on other real estate owned  2,040  1,927  4,030  7,957
Other real estate owned expense  564  399  1,916  1,165
FDIC deposit insurance assessment  1,029  628  2,271  2,314
Debt prepayment penalties  --   --   2,492  -- 
Other  978  964  2,875  3,022
Total other expenses  11,640  11,390  35,167  37,976
         
Loss Before Income Taxes  (4,338)  (4,115)  (4,362)  (15,542)
Income Tax Benefit  --   (1,790)  --   (6,477)
Net Loss  $ (4,338)  $ (2,325)  $ (4,362)  $ (9,065)
         
Basic Loss Per Common Share  $ (0.27)  $ (0.14)  $ (0.27)  $ (0.56)
         
Diluted Loss Per Common Share  $ (0.27)  $ (0.14)  $ (0.27)  $ (0.56)
         
Dividends Declared Per Common Share  $ --   $ --   $ --   $ 0.02
 
 
MBT FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
       
       
Dollars in thousands September 30, 2010 (Unaudited) December 31, 2009 September 30, 2009 (Unaudited)
Assets      
Cash and Cash Equivalents      
Cash and due from banks      
Non-interest bearing  $ 18,053  $ 18,448  $ 14,500
Interest bearing  33,361  51,298  56,731
Total cash and cash equivalents  51,414  69,746  71,231
       
Securities - Held to Maturity  25,044  36,433  34,655
Securities - Available for Sale  286,280  307,346  331,945
Federal Home Loan Bank stock - at cost  13,086  13,086  13,086
Loans held for sale  1,181  931  418
Loans - Net  764,127  824,916  860,522
Accrued interest receivable and other assets  37,492  50,580  49,830
Bank Owned Life Insurance  50,251  47,953  47,961
Premises and Equipment - Net  31,001  32,378  32,864
Total assets  $ 1,259,876  $ 1,383,369  $ 1,442,512
       
Liabilities      
Deposits:      
Non-interest bearing  $ 143,597  $ 135,038  $ 121,746
Interest-bearing  878,863  896,753  925,903
Total deposits  1,022,460  1,031,791  1,047,649
       
Federal Home Loan Bank advances  113,500  228,500  243,500
Repurchase agreements  30,000  30,000  30,000
Notes Payable  35  --   -- 
Interest payable and other liabilities  9,802  11,314  11,766
Total liabilities  1,175,797  1,301,605  1,332,915
       
Shareholders' Equity      
Common stock (no par value)  1,807  593  554
Retained Earnings  84,034  88,396  113,508
Accumulated other comprehensive loss  (1,762)  (7,225)  (4,465)
Total shareholders' equity  84,079  81,764  109,597
Total liabilities and shareholders' equity  $ 1,259,876  $ 1,383,369  $ 1,442,512
CONTACT:  MBT Financial Corp.          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          Mary Jane Town, Marketing Officer            (734) 240-2510            maryjane.town@mbandt.com

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