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The third quarter results include $5.3 million in gains on securities sold, a $4.5 million charge to record the other than temporary impairment of pooled trust preferred CDO investments, a $0.9 million write off of a defaulted investment security, and losses on the sales and write downs of other real estate owned totaled $1.9 million. In addition, the third quarter provision for loan losses was $5.7 million, an increase of $1.6 million compared to the third quarter of 2008.
The Net Interest Income for the third quarter of 2009 was $10.5 million, a decrease of $570,000, or 5.1% compared to the same period in 2008. The Net Interest Margin was unchanged at 3.24%, but the amount of average earning assets decreased $67.4 million, or 4.8%. Earning assets decreased due to a reduction of $80.7 million, or 8.2% in average loans, as economic conditions significantly decreased loan demand.
Non interest income, excluding securities gains, losses and impairment charges decreased from $3.9 million in the third quarter of 2008 to $3.7 million in the third quarter of 2009. This was mainly due to a decrease of $151,000 in Wealth Management fee income, which was adversely impacted by the declines in market values of assets under management.
Non Interest expenses increased $25,000, or 0.2% as the bank continues to focus on controlling expenses. Losses and expenses of foreclosed real estate properties decreased $327,000, or 12.3% compared to last year while the cost of FDIC insurance increased $402,000, or 177.9%. Compared to last quarter, salaries and benefits declined by 5.1%, and overall non interest expenses net of credit related charges and the FDIC assessment declined by 3.0%.
Total assets of the bank decreased $62.5 million compared to September 30, 2008 due to the previously mentioned decrease in loan demand. The company's capital position decreased from 8.0% of assets to 7.64%, which remains above regulatory minimums to be considered "well capitalized." In addition, the company believes its liquidity position has improved, as cash and investments now total 30.3% of assets compared to 27.3% a year ago.
H. Douglas Chaffin, President and CEO, commented, "Although the national economy is beginning to show signs of recovering from the worst recession since the great depression, we expect the recession to continue into 2010 for the state of Michigan. The high level of unemployment and the unprecedented decline in real estate values had a negative impact on our asset quality and earnings. On October 8, 2009, we conducted an auction of foreclosed real estate properties. This was our second auction this year, and we were again successful in removing some non performing assets from our balance sheet. Although the auction was in the fourth quarter, we wrote down the values of the properties sold in the third quarter, recognizing a loss of $489,000. The sales are expected to close in the fourth quarter, which will result in an additional decrease of $1.4 million in Other Real Estate Owned, and a monthly decrease of nearly $10,000 in insurance, property taxes, and maintenance expenses for these properties. Our provision for loan losses and other credit related expenses remain elevated due to the current economic conditions, and the FDIC has significantly raised our deposit insurance assessment to rebuild their fund. In spite of these challenges, changes in our balance sheet structure allowed us to maintain our capital ratio at a level that exceeds the regulatory "well capitalized" minimum. Due to the losses recorded in the last few quarters, and the uncertainty of our economic and regulatory environments, our Board decided in August to take action to preserve capital by suspending the quarterly dividend to shareholders."
Mr. Chaffin concluded, "Real estate values and unemployment rates in our market have shown signs of stabilizing recently. However, we anticipate any recovery in our local market to be lengthy. As a result, our Board is currently considering various options that might be available to raise additional capital. We will seek to continue to maintain our strong capital, liquidity, and allowance for loan losses. Our community banking model is needed more than ever in our markets, and we believe that we are well positioned for the eventual economic recovery."
Conference Call
MBT Financial Corp. will hold a conference call to discuss third quarter results on Friday, October 23, 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, with $1.4 billion in assets. 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
(dollars in -------------------------------------
thousands except 2009 2009 2009
per share data) 3rd Qtr 2nd Qtr 1st Qtr
----------- ----------- -----------
EARNINGS
Net interest income $ 10,516 $ 10,185 $ 10,213
FTE Net interest income $ 10,857 $ 10,536 $ 10,565
Provision for loan and
lease losses $ 5,700 $ 8,000 $ 4,200
Non-interest income $ 3,559 $ 3,630 $ 3,331
Non-interest expense $ 11,390 $ 14,589 $ 11,997
Net income (loss) $ (1,599) $ (5,373) $ (1,367)
Basic earnings (loss)
per share $ (0.10) $ (0.33) $ (0.08)
Diluted earnings (loss)
per share $ (0.10) $ (0.33) $ (0.08)
Average shares outstanding 16,192,914 16,182,528 16,165,841
Average diluted
shares outstanding 16,192,914 16,193,278 16,181,966
PERFORMANCE RATIOS
Return on average assets -0.44% -1.48% -0.37%
Return on average
common equity -5.64% -18.31% -4.53%
Base Margin 3.08% 3.00% 2.89%
FTE Adjustment 0.10% 0.10% 0.10%
Loan Fees 0.06% 0.04% 0.05%
----------- ----------- -----------
FTE Net Interest Margin 3.24% 3.14% 3.04%
Efficiency ratio 61.90% 70.22% 69.70%
Full-time equivalent
employees 370 370 383
CAPITAL
Average equity to
average assets 7.84% 8.10% 8.09%
Book value per share $ 6.81 $ 6.80 $ 7.18
Cash dividend per share $ -- $ 0.01 $ 0.01
ASSET QUALITY
Loan Charge-Offs $ 12,364 $ 6,334 $ 1,575
Loan Recoveries $ 262 $ 456 $ 600
----------- ----------- -----------
Net Charge-Offs $ 12,102 $ 5,878 $ 975
Allowance for loan and
lease losses $ 17,473 $ 23,875 $ 21,753
Nonaccrual Loans $ 62,038 $ 61,917 $ 50,437
Loans 90 days past due $ 192 $ 300 $ 864
Restructured loans $ 14,359 $ 7,552 $ 4,901
----------- ----------- -----------
Total non performing loans $ 76,589 $ 69,769 $ 56,202
Other real estate owned &
other assets $ 20,737 $ 19,215 $ 22,792
----------- ----------- -----------
Total non performing
assets $ 97,326 $ 88,984 $ 78,994
Problem Loans
Still Performing $ 48,366 $ 59,076 $ 75,127
----------- ----------- -----------
Total Problem Assets $ 145,692 $ 148,060 $ 154,121
Net loan charge-offs to
average loans 5.34% 2.57% 0.42%
Allowance for losses to
total loans 1.99% 2.62% 2.35%
Non performing loans to
gross loans 8.71% 7.66% 6.08%
Non performing assets to
total assets 6.74% 6.17% 5.32%
Allowance to non
performing loans 22.81% 34.22% 38.71%
END OF PERIOD BALANCES
Loans and leases $ 879,513 $ 910,356 $ 923,919
Total earning assets $ 1,315,930 $ 1,321,006 $ 1,363,015
Total assets $ 1,443,238 $ 1,441,582 $ 1,485,854
Deposits $ 1,047,649 $ 1,039,479 $ 1,066,886
Interest Bearing Liabilities $ 1,199,403 $ 1,189,725 $ 1,232,573
Shareholders' equity $ 110,323 $ 110,010 $ 116,096
Total Shares Outstanding 16,198,785 16,187,277 16,178,121
AVERAGE BALANCES
Loans and leases $ 899,789 $ 918,513 $ 934,766
Total earning assets $ 1,331,375 $ 1,346,749 $ 1,405,306
Total assets $ 1,434,971 $ 1,452,339 $ 1,513,312
Deposits $ 1,051,967 $ 1,054,447 $ 1,100,982
Interest Bearing Liabilities $ 1,202,082 $ 1,212,880 $ 1,258,040
Shareholders' equity $ 112,533 $ 117,677 $ 122,371
Quarterly
(dollars in ------------------------------
thousands except 2008 2008
per share data) 4th Qtr 3rd Qtr
----------- -----------
EARNINGS
Net interest income $ 9,723 $ 11,086
FTE Net interest income $ 10,088 $ 11,417
Provision for loan and
lease losses $ 10,000 $ 4,100
Non-interest income $ 3,900 $ 4,265
Non-interest expense $ 8,773 $ 11,365
Net income (loss) $ (2,997) $ 324
Basic earnings (loss)
per share $ (0.19) $ 0.02
Diluted earnings (loss)
per share $ (0.19) $ 0.02
Average shares outstanding 16,143,902 16,136,402
Average diluted
shares outstanding 16,154,652 16,147,152
PERFORMANCE RATIOS
Return on average assets -0.77% 0.09%
Return on average
common equity -9.78% 1.04%
Base Margin 2.65% 3.08%
FTE Adjustment 0.10% 0.09%
Loan Fees 0.04% 0.07%
----------- -----------
FTE Net Interest Margin 2.79% 3.24%
Efficiency ratio 59.11% 56.66%
Full-time equivalent
employees 384 366
CAPITAL
Average equity to
average assets 7.83% 8.19%
Book value per share $ 7.49 $ 7.46
Cash dividend per share $ 0.09 $ 0.09
ASSET QUALITY
Loan Charge-Offs $ 10,132 $ 3,954
Loan Recoveries $ 252 $ 169
----------- -----------
Net Charge-Offs $ 9,880 $ 3,785
Allowance for loan and
lease losses $ 18,528 $ 18,408
Nonaccrual Loans $ 47,872 $ 34,892
Loans 90 days past due $ 93 $ 119
Restructured loans $ 5,811 $ 6,685
----------- -----------
Total non performing loans $ 53,776 $ 41,696
Other real estate owned &
other assets $ 19,211 $ 17,893
----------- -----------
Total non performing
assets $ 72,987 $ 59,589
Problem Loans
Still Performing $ 63,935 $ 56,156
----------- -----------
Total Problem Assets $ 136,922 $ 115,745
Net loan charge-offs to
average loans 4.08% 1.54%
Allowance for losses to
total loans 1.97% 1.88%
Non performing loans to
gross loans 5.71% 4.25%
Non performing assets to
total assets 4.67% 3.96%
Allowance to non
performing loans 34.45% 44.15%
END OF PERIOD BALANCES
Loans and leases $ 941,732 $ 981,038
Total earning assets $ 1,434,098 $ 1,383,659
Total assets $ 1,562,401 $ 1,505,709
Deposits $ 1,136,078 $ 1,080,194
Interest Bearing Liabilities $ 1,282,993 $ 1,234,705
Shareholders' equity $ 120,977 $ 120,413
Total Shares Outstanding 16,148,482 16,139,538
AVERAGE BALANCES
Loans and leases $ 963,445 $ 980,466
Total earning assets $ 1,436,265 $ 1,398,768
Total assets $ 1,557,430 $ 1,505,823
Deposits $ 1,144,238 $ 1,076,734
Interest Bearing Liabilities $ 1,297,202 $ 1,245,873
Shareholders' equity $ 121,969 $ 123,355
(dollars in Year to Date
thousands except ------------------------------
per share data) 2009 2008
----------- -----------
EARNINGS
Net interest income $ 30,914 $ 32,666
FTE Net interest income $ 31,958 $ 33,664
Provision for loan and
lease losses $ 17,900 $ 8,000
Non-interest income $ 10,520 $ 12,085
Non-interest expense $ 37,976 $ 31,226
Net income (loss) $ (8,339) $ 4,689
Basic earnings (loss)
per share $ (0.52) $ 0.29
Diluted earnings (loss)
per share $ (0.52) $ 0.29
Average shares outstanding 16,180,527 16,131,436
Average diluted
shares outstanding 16,180,527 16,158,897
PERFORMANCE RATIOS
Return on average assets -0.76% 0.41%
Return on average
common equity -9.49% 4.92%
Base Margin 2.99% 2.99%
FTE Adjustment 0.10% 0.09%
Loan Fees 0.05% 0.07%
----------- -----------
FTE Net Interest Margin 3.14% 3.15%
Efficiency ratio 67.21% 60.75%
Full-time equivalent
employees 374 374
CAPITAL
Average equity to
average assets 8.01% 8.32%
Book value per share $ 6.81 $ 7.46
Cash dividend per share $ 0.02 $ 0.45
ASSET QUALITY
Loan Charge-Offs $ 20,273 $ 10,516
Loan Recoveries $ 1,318 $ 702
----------- -----------
Net Charge-Offs $ 18,955 $ 9,814
Allowance for loan and
lease losses $ 17,473 $ 18,408
Nonaccrual Loans $ 62,038 $ 34,892
Loans 90 days past due $ 192 $ 119
Restructured loans $ 14,359 $ 6,685
----------- -----------
Total non performing loans $ 76,589 $ 41,696
Other real estate owned &
other assets $ 20,737 $ 17,893
----------- -----------
Total non performing
assets $ 97,326 $ 59,589
Problem Loans
Still Performing $ 48,366 $ 56,156
----------- -----------
Total Problem Assets $ 145,692 $ 115,745
Net loan charge-offs to
average loans 2.76% 1.32%
Allowance for losses to
total loans 1.99% 1.88%
Non performing loans to
gross loans 8.71% 4.25%
Non performing assets to
total assets 6.74% 3.96%
Allowance to non
performing loans 22.81% 44.15%
END OF PERIOD BALANCES
Loans and leases $ 879,513 $ 981,038
Total earning assets $ 1,315,930 $ 1,383,659
Total assets $ 1,443,238 $ 1,505,709
Deposits $ 1,047,649 $ 1,080,194
Interest Bearing Liabilities $ 1,199,403 $ 1,234,705
Shareholders' equity $ 110,323 $ 120,413
Total Shares Outstanding 16,198,785 16,139,538
AVERAGE BALANCES
Loans and leases $ 917,561 $ 990,345
Total earning assets $ 1,360,872 $ 1,425,146
Total assets $ 1,466,587 $ 1,529,166
Deposits $ 1,068,952 $ 1,087,442
Interest Bearing Liabilities $ 1,224,129 $ 1,267,559
Shareholders' equity $ 117,491 $ 127,280
MBT FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
Quarter Ended Nine Months Ended
Dollars in thousands September 30, September 30,
(except per share data) 2009 2008 2009 2008
-------------------------------------------------------------------
Interest Income
Interest and fees on loans $13,229 $15,689 $39,994 $47,888
Interest on investment
securities-
Tax-exempt 837 844 2,579 2,477
Taxable 3,544 4,558 11,872 14,312
Interest on balances due
from banks 30 -- 57 --
Interest on federal funds sold -- 22 -- 23
-------------------------------------------------------------------
Total interest income 17,640 21,113 54,502 64,700
-------------------------------------------------------------------
Interest Expense
Interest on deposits 4,174 6,263 14,280 20,122
Interest on borrowed funds 2,950 3,764 9,308 11,912
-------------------------------------------------------------------
Total interest expense 7,124 10,027 23,588 32,034
-------------------------------------------------------------------
Net Interest Income 10,516 11,086 30,914 32,666
Provision For Loan Losses 5,700 4,100 17,900 8,000
-------------------------------------------------------------------
Net Interest Income After
Provision For Loan Losses 4,816 6,986 13,014 24,666
-------------------------------------------------------------------
Other Income
Income from wealth
management services 936 1,087 2,756 3,333
Service charges and other fees 1,516 1,683 4,304 4,795
Net gain (loss) on sales
of securities 4,365 323 5,021 371
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 --
Origination fees on mortgage
loans sold 119 73 350 357
Bank Owned Life
Insurance income 369 355 1,034 985
Other 806 744 2,376 2,244
-------------------------------------------------------------------
Total other income 3,559 4,265 10,520 12,085
-------------------------------------------------------------------
Other Expenses
Salaries and employee benefits 5,122 5,090 15,956 16,113
Occupancy expense 804 801 2,445 2,712
Equipment expense 729 804 2,348 2,480
Marketing expense 277 297 798 894
Professional fees 419 401 1,286 1,325
Collection expense 121 87 685 514
Net loss on other real
estate owned 1,927 2,215 7,957 2,604
Other real estate
owned expense 399 438 1,165 1,026
FDIC deposit
insurance assessment 628 226 2,314 394
Other 964 1,006 3,022 3,164
-------------------------------------------------------------------
Total other expenses 11,390 11,365 37,976 31,226
-------------------------------------------------------------------
Income (Loss) Before
Income Taxes (3,015) (114) (14,442) 5,525
Income Tax Expense (Benefit) (1,416) (438) (6,103) 836
-------------------------------------------------------------------
Net Income (Loss) $(1,599) $ 324 $(8,339) $ 4,689
-------------------------------------------------------------------
Basic Earnings (Loss) Per
Common Share $ (0.10) $ 0.02 $ (0.52) $ 0.29
-------------------------------------------------------------------
Diluted Earnings (Loss) Per
Common Share $ (0.10) $ 0.02 $ (0.52) $ 0.29
-------------------------------------------------------------------
Dividends Declared Per
Common Share $ -- $ 0.09 $ 0.02 $ 0.45
MBT FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
Sept. 30, Sept. 30,
Dollars in thousands 2009 Dec. 31, 2008
(Unaudited) 2008 (Unaudited)
-------------------------------------------------------------------
Assets
Cash and Cash Equivalents
Cash and due from banks
Non-interest bearing $ 14,500 $ 24,463 $ 21,927
Interest bearing 56,731 26,323 600
Federal funds sold -- -- 5,300
-------------------------------------------------------------------
Total cash and
cash equivalents 71,231 50,786 27,827
Securities - Held to Maturity 34,655 46,840 38,248
Securities - Available
for Sale 331,945 406,117 345,387
Federal Home Loan Bank
stock - at cost 13,086 13,086 13,086
Loans held for sale 418 784 267
Loans - Net 861,622 922,420 962,363
Accrued interest receivable
and other assets 49,456 43,973 41,658
Bank Owned Life Insurance 47,961 45,488 45,083
Premises and Equipment - Net 32,864 32,907 31,790
-------------------------------------------------------------------
Total assets $1,443,238 $1,562,401 $1,505,709
===================================================================
Liabilities
Deposits:
Non-interest bearing $ 121,746 $ 144,585 $ 136,989
Interest-bearing 925,903 991,493 943,205
-------------------------------------------------------------------
Total deposits 1,047,649 1,136,078 1,080,194
Federal Home Loan
Bank advances 243,500 261,500 261,500
Repurchase agreements 30,000 30,000 30,000
Interest payable and
other liabilities 11,766 13,846 13,602
-------------------------------------------------------------------
Total liabilities 1,332,915 1,441,424 1,385,296
-------------------------------------------------------------------
Shareholders' Equity
Common stock (no par value) 554 321 --
Retained Earnings 114,234 122,896 127,621
Accumulated other
comprehensive income (4,465) (2,240) (7,208)
-------------------------------------------------------------------
Total shareholders' equity 110,323 120,977 120,413
-------------------------------------------------------------------
Total liabilities and
shareholders' equity $1,443,238 $1,562,401 $1,505,709
===================================================================
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: MBT Financial Corp.
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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