 MIDDLEFIELD, Ohio, July 22, 2020 GLOBE NEWSWIRE -- Middlefield Banc Corp. NASDAQ: MBCN today reported financial results for the 2020 first half and second quarter ended June 30, 2020. 2020 First Half Financial Highlights versus 2019 First Half unless noted: Net interest income up 1.3 to 20.8 million Noninterest income increased 5.7 to 2.6 million Net income totaled 4.0 million and included a 3.4 million increase in the year-to-date provision for loan losses as a result of the COVID-19 crisis Book value per share was up 6.7 to a record 22.09 per share Tangible book value1 per share was up 7.7 to 19.42 per share Total loans increased 11.2 to 1.11 billion Approved 1,343 PPP applications for 142.7 million during the second quarter Net charge-offs declined 37.1 to 0.3 million Second quarter provision was 1.0 million, compared to 2.7 million for the first quarter Allowance for loan losses to nonperforming loans was 104.2, compared to 68.1 for the same period last year Equity to assets increased slightly to 10.5Thomas G. Caldwell, President and Chief Executive Officer, stated: We continue to focus on protecting our customers and employees, while helping our communities respond to the unprecedented challenges created by the COVID-19 pandemic. After temporarily restricting walk-in transactions in our bank lobbies in late March, all our branches reopened for lobby banking during the second quarter. We have implemented safeguards to ensure we are doing our part to protect the health and well-being of our communities. This includes requiring all employees to wear masks, limiting the number of customers allowed in our branches at one time, encouraging customers to social distance, installing partitions to limit exposure, offering special lobby hours for at-risk customers, and allowing employees to work from home. I am extremely pleased with how our team and customers have responded to the operational adjustments we have made because of the pandemic.Mr. Caldwell continued, At the same time we were adapting the Bank to operate safely throughout the COVID-19 pandemic, we quickly implemented our Paycheck Protection Program PPP process. During the second quarter, we successfully secured 142.7 million for 1,343 small businesses throughout Ohio and protected over 12,000 jobs. The PPP process has driven significant loan and deposit growth during the quarter, and we are currently adjusting our focus to help customers qualify for forgiveness as permitted under the program. I am encouraged that approximately 47 of PPP applicants booked were to small businesses without a prior banking relationship demonstrating our ability to serve our communities and the need for local and responsive financial relationships. For the second quarter, net interest income increased 4.4 reflecting the proactive adjustments we made to increase the yield on investment securities and reduce our cost of funds. In addition, we were able to offset the operational and financial challenges caused by the COVID-19 crisis and the low rate environment. Our book value increased 6.7 from the prior year period to a record of 22.09 per share, and noninterest income increased 15.1 to a quarterly record of 1.5 million. While the COVID-19 crisis continues to evolve, we remain dedicated to managing items under our control and maximizing shareholder value by profitably serving our Northeast and Central Ohio communities, concluded Mr. Caldwell. Income Statement For the 2020 first half, net interest income increased 1.3 to 20.8 million, compared to 20.5 million for the same period last year. Year-to-date, the net interest margin was 3.56, compared to 3.67 for the same period last year. Net interest income for the 2020 second quarter was 10.7 million, compared to 10.3 million for the 2019 second quarter. The 4.4 increase in net interest income for the 2020 second quarter was largely a result of a 29.6 reduction in interest expense. The net interest margin for the 2020 second quarter was 3.49, compared to 3.65 for the same period of 2019. For the 2020 first half, noninterest income was 2.6 million, compared to 2.4 million for the same period last year. Noninterest income for the 2020 second quarter was 1.5 million, compared to 1.3 million for the same period last year. For the 2020 first half, noninterest expense decreased 0.3 to 14.9 million, compared to 15.0 million for the same period last year. Operating costs in the 2020 second quarter increased 2.8 to 7.7 million from 7.5 million for the 2019 second quarter. Donald L. Stacy, Chief Financial Officer stated, We continue to prudently increase our allowance for loan losses and took a 1.0 million provision in the quarter, in addition to the 2.7 million provision incurred during the first quarter. As a result, our allowance for loan losses to nonperforming loans was 104.2 at June 30, 2020, compared to 68.1 at June 30, 2019. We continue working on providing temporary relief to our customers and have modified 362 loans. We continue to believe our asset quality was strong heading into the crisis, and nonperforming assets are down 3.0 from the prior year period, while year-to-date charge-offs have declined 37.1.As benchmark rates have declined, we have quickly reduced our funding costs and our cost of funds have improved from 1.29 at June 30, 2019 to 0.83 at June 30, 2020. In addition, we continue to focus on proactively controlling expenses and second quarter noninterest expenses were up less than 3.0 and expenses are down slightly through the first six months of the year. We believe our focus on asset quality, liquidity, and profitability provides us with the flexibility to navigate the current economic challenges associated with the COVID-19 crisis, while providing local, dedicated and responsive financial services to our communities.Net income for the 2020 first half ended June 30, 2020, was 4.0 million, or 0.62 per diluted share, compared to 6.3 million, or 0.97 per diluted share for the same period last year. The decline in net income for the first half ended June 30, 2020 was primarily due to a 3.4 million increase in the year-to-date provision for loan losses as a result of the COVID-19 crisis. Net income for the 2020 second quarter ended June 30, 2020, was 3.0 million, or 0.46 per diluted share, compared to 3.3 million, or 0.50 per diluted share for the same period last year. The 2020 second quarter provision for loan losses increased 0.9 million, from the prior year period. Balance Sheet Total assets at June 30, 2020, increased 4.3 to approximately 1.34 billion from 1.29 billion at June 30, 2019. Net loans at June 30, 2020, were 1.10 billion, compared to 990.9 million at June 30, 2019, and 977.5 million at December 31, 2019. The 11.0 year-over-year improvement in net loans was primarily a result of PPP loans originated during the quarter. Total deposits at June 30, 2020, were 1.16 billion, compared to 1.05 billion at June 30, 2019. The 10.2 increase in deposits was driven by PPP deposits and pandemic uncertainty. The investment portfolio, which is entirely classified as available for sale, was 112.5 million June 30, 2020, compared with 98.8 million at June 30, 2019. Stockholders Equity and Dividends At the end of the 2020 second quarter, shareholders equity increased 4.8 to 140.7 million compared to 134.3 million at June 30, 2019. On a per share basis, shareholders equity at June 30, 2020, was 22.09 compared to 20.70 at the same period last year. Tangible stockholders equity1 increased 5.8 to 123.7 million for the 2020 second quarter, compared to 117.0 million at June 30, 2019. On a per-share basis, tangible stockholders equity1 was 19.42 at June 30, 2020, compared to 18.04 at June 30, 2019. Through the first six months of 2020, the company declared cash dividends of 0.30 per share, compared to 0.28 per share for the same period last year.At June 30, 2020, the company had an equity to assets leverage ratio of 10.47, compared to 10.42 at June 30, 2019. Asset Quality The provision for loan losses for the 2020 second quarter was 1.0 million versus 110,000 for the same period last year. Most of the increased provision is the result of increases to the economic conditions qualitative factors. Nonperforming assets at June 30, 2020, were 10.5 million, compared to 10.8 million at June 30, 2019. Net charge-offs for the 2020 second quarter were 34,000, or 0.01 of average loans, annualized, compared to 12,000, or 0.00 of average loans, annualized at June 30, 2019. Year-to-date net charge-offs were 298,000, or 0.06 of average loans, annualized compared to 474,000, or 0.10 of average loans, annualized for the same period last year. The allowance for loan losses at June 30, 2020, stood at 10.2 million, or 0.92 of total loans, compared to 7.3 million, or 0.73 of total loans at June 30, 2019. COVID-19 Update The following table provides information with respect to our commercial loans by type at June 30, 2020.At Risk Loans at June 30, 2020 Loan Type Number of Loans Balance in thousands of Total Loans Retail 270 195,550 17.6 Multifamily Residential NOO 354 120,697 10.9 Ambulatory Care, NursingRehabilitation and Social Assistance 218 81,491 7.3 Hospitality tourism 58 44,923 4.0 Restaurantfood servicebar 136 24,938 2.3 Other 219 20,208 1.8 Total 1,255 487,807 43.9 The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020, and as a qualified SBA lender, we were automatically authorized to originate PPP loans.As of June 30, 2020, we approved 1,343 applications for up to 142.7 million of loans under the PPP. 