M B T Financial Corp (MBTF, Financial) filed Quarterly Report for the period ended 2011-09-30.
Mbt Financial Corp has a market cap of $19.41 million; its shares were traded at around $1.1234 with and P/S ratio of 0.26.
Other Expenses – Total non interest expenses decreased $733,000, or 6.9% compared to the third quarter of 2010. Salaries and Employee Benefits increased $161,000, or 3.4%, due to increases in medical insurance, life insurance, and payroll tax expenses. Occupancy expense increased $95,000, or 13.8%, as we accrued $100,000 for the estimated additional costs of the environmental cleanup of our Temperance branch location. Losses on Other Real Estate Owned (OREO) properties decreased $258,000 compared to the third quarter of 2010 as the rate of decrease in the values of foreclosed properties slowed in 2011. We conducted two auctions of OREO properties late in the third quarter of 2011. Most of the sales will not close until the fourth quarter, but the losses were recognized as write downs of the property values in the third quarter. FDIC deposit insurance premium expense decreased $411,000, or 39.9%, due to a change in the assessment method in 2011.
Other Income – Non interest income, excluding securities gains, decreased $783,000, or 6.5% compared to the first three quarters of 2010. Service charges and other fees on deposit accounts decreased $463,000, or 11.6%, primarily due to a decrease in overdraft fees on checking accounts. Origination fees on mortgage loans sold decreased 40.8% from $458,000 in 2010 to $271,000 in 2011 due to a significant decline in the amount of mortgage loan activity. Income from bank owned life insurance policies decreased $325,000, or 21.2% due to a positive valuation adjustment in 2010 and a decrease in policies owned in 2011. The gain on securities transactions decreased $2.6 million due to a large of amount of securities sales in the second quarter of 2010. Other non interest income increased $276,000, or 9.3%, mainly due to increases of $173,000 in OREO rental income and $62,000 in ATM and debit card income.
Cash flows provided by operating activities decreased from $10.7 million in the first nine months of 2010 to $4.8 million in the first nine months of 2011. The cash provided by operations decreased even though the net loss did not change significantly because non-cash charges to earnings decreased, interest payable and other liabilities increased and interest receivable and other assets decreased. Cash flows from investing activities decreased from $94.1 million provided in the first nine months of 2010 to $23.2 million in the first nine months of 2011 primarily due to a decrease in the sales, maturities, and redemptions of investment securities. The decrease in the sales of investment securities was due to the sales of federal agency debt and mortgage backed securities in 2010 related to a restructuring of the portfolio and to generate the cash to prepay FHLB advances. Proceeds from maturities and redemptions of investment securities increased in 2011 as the low interest rate environment resulted in an increase in early redemptions of callable securities. In addition, the Corporation surrendered $3.7 million in Bank Owned Life Insurance policies that are no longer required to provide benefits to former employees and directors in 2011. The amount of cash used for financing activities decreased in the first nine months of 2011 compared to the first nine months of 2010 due to the repayment of borrowed funds in both periods.
Market risk for the Bank, as is typical for most banks, consists mainly of interest rate risk and market price risk. The Bank s earnings and the economic value of its equity are exposed to interest rate risk and market price risk, and monitoring this risk is the responsibility of the Asset/Liability Management Committee (ALCO) of the Bank. The Bank s market risk is monitored monthly and it has not changed significantly since year-end 2010.
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Mbt Financial Corp has a market cap of $19.41 million; its shares were traded at around $1.1234 with and P/S ratio of 0.26.
Highlight of Business Operations:
Net Interest Income decreased $465,000 compared to the third quarter of 2010 as the net interest margin decreased from 3.32% to 3.16% and the average earning assets decreased $5.6 million, or 0.5%. The provision for loan losses decreased from $7.5 million in the third quarter of 2010 to $2.7 million in the third quarter of 2011. Improvement in the risk ratings of loans, a decrease in the historical loss rates, and the decrease in the size of the loan portfolio decreased the amount of ALLL required. As a result, we were able to record a provision that was smaller than the net charge offs for the quarter. Non interest income, net of securities transactions, decreased $434,000 compared to last year, as a decrease in overdraft service charges that resulted from a decrease in NSF check activity and origination fees on mortgage loans sold decreased due to a significant decline in mortgage loan activity. Also, income from Bank Owned Life Insurance policies decreased due to a favorable adjustment to the asset values in the third quarter of 2010 and a reduction in the amount of policies owned in 2011. Non interest expenses decreased $733,000, or 6.9% due to lower losses on Other Real Estate Owned, and lower FIDC deposit insurance assessments. We continue to work to control costs, and we decreased several non interest expense categories. We expect credit related expenses, including the costs of carrying a high level of Other Real Estate Owned (OREO), to continue to improve, but still remain above normal levels.Other Expenses – Total non interest expenses decreased $733,000, or 6.9% compared to the third quarter of 2010. Salaries and Employee Benefits increased $161,000, or 3.4%, due to increases in medical insurance, life insurance, and payroll tax expenses. Occupancy expense increased $95,000, or 13.8%, as we accrued $100,000 for the estimated additional costs of the environmental cleanup of our Temperance branch location. Losses on Other Real Estate Owned (OREO) properties decreased $258,000 compared to the third quarter of 2010 as the rate of decrease in the values of foreclosed properties slowed in 2011. We conducted two auctions of OREO properties late in the third quarter of 2011. Most of the sales will not close until the fourth quarter, but the losses were recognized as write downs of the property values in the third quarter. FDIC deposit insurance premium expense decreased $411,000, or 39.9%, due to a change in the assessment method in 2011.
Other Income – Non interest income, excluding securities gains, decreased $783,000, or 6.5% compared to the first three quarters of 2010. Service charges and other fees on deposit accounts decreased $463,000, or 11.6%, primarily due to a decrease in overdraft fees on checking accounts. Origination fees on mortgage loans sold decreased 40.8% from $458,000 in 2010 to $271,000 in 2011 due to a significant decline in the amount of mortgage loan activity. Income from bank owned life insurance policies decreased $325,000, or 21.2% due to a positive valuation adjustment in 2010 and a decrease in policies owned in 2011. The gain on securities transactions decreased $2.6 million due to a large of amount of securities sales in the second quarter of 2010. Other non interest income increased $276,000, or 9.3%, mainly due to increases of $173,000 in OREO rental income and $62,000 in ATM and debit card income.
Cash flows provided by operating activities decreased from $10.7 million in the first nine months of 2010 to $4.8 million in the first nine months of 2011. The cash provided by operations decreased even though the net loss did not change significantly because non-cash charges to earnings decreased, interest payable and other liabilities increased and interest receivable and other assets decreased. Cash flows from investing activities decreased from $94.1 million provided in the first nine months of 2010 to $23.2 million in the first nine months of 2011 primarily due to a decrease in the sales, maturities, and redemptions of investment securities. The decrease in the sales of investment securities was due to the sales of federal agency debt and mortgage backed securities in 2010 related to a restructuring of the portfolio and to generate the cash to prepay FHLB advances. Proceeds from maturities and redemptions of investment securities increased in 2011 as the low interest rate environment resulted in an increase in early redemptions of callable securities. In addition, the Corporation surrendered $3.7 million in Bank Owned Life Insurance policies that are no longer required to provide benefits to former employees and directors in 2011. The amount of cash used for financing activities decreased in the first nine months of 2011 compared to the first nine months of 2010 due to the repayment of borrowed funds in both periods.
Market risk for the Bank, as is typical for most banks, consists mainly of interest rate risk and market price risk. The Bank s earnings and the economic value of its equity are exposed to interest rate risk and market price risk, and monitoring this risk is the responsibility of the Asset/Liability Management Committee (ALCO) of the Bank. The Bank s market risk is monitored monthly and it has not changed significantly since year-end 2010.
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