MBT Financial Corp. Annual Profits Increase


MONROE, Mich., Jan. 22, 2008 (PRIME NEWSWIRE) -- MBT Financial Corp. (Nasdaq:MBTF), the parent company of Monroe Bank & Trust, reported 2007 net income of $10.3 million, or $0.62 per diluted share, compared to the $3.8 million, or $0.22 per diluted share earned in 2006. For the fourth quarter the Company reported a loss of $161,000, or $0.01 per diluted share, compared to a profit of $3.7 million, or $0.22 per diluted share in the fourth quarter of 2006. The fourth quarter 2007 results were negatively impacted by the need to increase the Allowance for Loan Losses due to economic weakness and declining real estate values in southeast Michigan.

H. Douglas Chaffin, President and CEO, commented, "Increasing unemployment in Michigan, continuing weakness in the business climate, and decreasing property values caused an interruption in our trend of asset quality improvement in the second half of 2007. While we have not offered the type of residential real estate loan products that caused the subprime mortgage crisis, the crisis has affected property values in our market, and the declining property values necessitated the increase in our Allowance for Loan Losses."

"Michigan has been in a single state recession, largely related to the struggles of the domestic automotive industry. Regional economic conditions resulted in a large increase in problem and non-performing assets in the fourth quarter. Most of these problem assets are concentrated in businesses related to automobile manufacturing or residential real estate development. Non-performing assets (NPAs) increased from $33.9 million to $46.5 million during the fourth quarter and total problem assets increased from $66.7 million to $87.5 million. Net charge offs during the quarter were 1.19% of loans, annualized, and we increased our allowance for loan losses from 1.38% of loans to 1.62% over the last twelve months. We continue to actively manage our capital and we reduced our share repurchase activity significantly in the fourth quarter. This will preserve capital and enable us to maintain our quarterly dividend while economic conditions challenge our earnings. Our dividend is providing an annualized return in excess of 8.0% based on the price of our stock at the end of the year."

Mr. Chaffin further commented on the Company's earnings for the quarter. "Net Interest Income decreased $1 million compared to the fourth quarter of 2006 due to the lower net interest margin and smaller amount of average earning assets. The decrease in the net interest margin in the fourth quarter of 2007 was largely due to the increase in non-performing assets. While opportunities for growth in net interest income remain weak, we are increasing our focus on improving non interest income and controlling non interest expenses. Non interest income, excluding securities transactions, increased 10.2% compared to the fourth quarter of 2006 and non interest expenses, net of OREO transactions, increased 4.5%. During the fourth quarter of 2007 we increased our expense control efforts, and the recent staff reduction and other initiatives will begin to produce meaningful results in 2008. We also announced plans to lower costs by closing a branch location in Monroe and converting two other offices to drive-up only service."

Conference Call

MBT Financial Corp. will hold a conference call to discuss fourth quarter results on Wednesday, January 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 three 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 full service community banks in Southeast Michigan, with more than $1.5 billion in assets, offering personal and business products and services, and complete credit options. MBT's Wealth Management Group is one of the area's largest trust departments with over $800 million in assets under management. With 26 offices, 41 ATMs, PhoneLink telephone banking and eLink online banking, MBT prides itself on an incomparable level of service and access for its customers. Visit MBT's web site at www.MBandT.com.

The MBT Financial Corp. logo is available at http://www.primenewswire.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
            ----------------------------------------------------------
               2007        2007        2007        2007        2006
             4th Qtr     3rd Qtr      2nd Qtr     1st Qtr     4th Qtr
            ----------  ----------  ----------  ----------  ----------

(dollars in thousands
 except per share data

 EARNINGS
  Net
   interest
   income   $   10,131  $   10,668  $   10,787  $   11,183  $   11,165
  FTE Net
   interest
   income   $   10,232  $   11,011  $   11,127  $   11,587  $   11,604
  Provision
   for
   loan
   and
   lease
   losses   $    4,907  $    1,000  $      750  $      750  $    1,175
  Non-
   interest
   income   $    3,824  $    3,928  $    4,119  $    3,763  $    3,475
  Non-
   interest
   expense  $    9,601  $    9,242  $    9,279  $    9,112  $    8,349
  Net
   income
   (loss)   $     (161) $    3,181  $    3,535  $    3,703  $    3,741
  Basic
   earnings
   (loss)
   per
   share    $    (0.01) $     0.20  $     0.21  $     0.22  $     0.22
  Diluted
   earnings
   (loss)
   per
   share    $    (0.01) $     0.20  $     0.21  $     0.22  $     0.22
  Average
   shares
   out-
   stand-
   ing      16,135,339  16,288,696  16,558,137  16,686,983  16,815,634
  Average
   diluted
   shares
   out-
   stand-
   ing      16,145,958  16,310,279  16,585,720  16,716,685  16,837,925

 PERFORMANCE 
  RATIOS

  Return
   on
   average
   assets       -0.04%       0.83%       0.94%       0.97%       0.95%
  Return
   on
   average
   common
   equity       -0.48%       9.55%      10.33%      10.92%      10.51%

  Base
   Margin        2.74%       2.90%       2.98%       3.06%       2.93%
  FTE
   Adjust-
   ment          0.03%       0.10%       0.10%       0.11%       0.12%
  Loan
   Fees          0.06%       0.08%       0.07%       0.07%       0.09%
            ----------  ----------  ----------  ----------  ----------
  FTE Net
   Interest
   Margin        2.83%       3.08%       3.15%       3.24%       3.14%

  Efficiency
   ratio        60.16%      61.06%      60.74%      58.82%      54.82%
  Full-time
   equi-
   valent
   employees       404         426         425         429         415

 CAPITAL

  Average
   equity
   to
   average
   assets        8.66%       8.69%       9.06%       8.91%       9.02%
  Book
   value
   per
   share    $     8.06  $     8.15  $     8.00  $     8.21  $     8.14
  Cash
   dividend
   per
   share    $     0.18  $     0.18  $     0.18  $     0.18  $     0.18

 ASSET QUALITY
  Loan
   Charge-
   Offs     $    3,204  $    1,013  $    1,082  $    1,088  $    1,343
  Loan
   Reco-
    veries  $      195  $      256  $      343  $      643  $      390
            ----------  ----------  ----------  ----------  ----------
  Net
   Charge-
   Offs     $    3,009  $      757  $      739  $      445  $      953

  Allowance
   for
   loan
   and
   lease
   losses  $    16,222  $   14,323  $   14,080  $   14,069  $   13,764

  Non-
   accrual
   Loans   $    30,459  $   26,440  $   20,017  $   19,527  $   19,152
  Loans 90
   days
   past
   due     $       102  $      105  $      105  $       61  $       69
  Restruc-
   tured
   loans   $     3,367  $      938  $    1,371  $      572  $      888
           -----------  ----------  ----------  ----------  ----------
    Total
     non-
     per-
     form-
     ing
     loans  $   33,928  $   27,483  $   21,493  $   20,160  $   20,109
  Other
   real
   estate
   owned
   & other
   assets   $   12,565  $    6,389  $    3,064  $    2,598  $    2,432
            ----------  ----------  ----------  ----------  ----------
    Total
     non-
     per-
     form-
     ing
     assets $   46,493  $   33,872  $   24,557  $   22,758  $   22,541
  Problem
   Loans
   Still
   Perform-
   ing      $   41,022  $   32,822  $   34,859  $   35,918  $   39,650
            ----------  ----------  ----------  ----------  ----------
    Total
     Problem
     Assets $   87,515  $   66,694  $   59,416  $   58,676  $   62,191

  Net loan
   charge-
   offs to
   average
   loans         1.19%       0.30%       0.30%       0.18%       0.38%
  Allowance
   for
   losses
   to
   total
   loans         1.62%       1.42%       1.40%       1.42%       1.38%
  Non-
   perform-
   ing
   loans
   to
   Gross
   Loans         3.39%       2.72%       2.14%       2.04%       2.01%
  Non-
   perform-
   ing
   assets
   to
   total
   assets        2.98%       2.17%       1.62%       1.47%       1.44%
  Allowance
   to non-
   perform-
   ing
   loans        47.81%      52.12%      65.51%      69.79%      68.45%

 END OF 
  PERIOD 
  BALANCES
  Loans
   and
   leases   $1,002,259  $1,008,875  $1,002,248  $  989,322  $  998,998
  Total
   earning
   assets   $1,440,317  $1,439,366  $1,402,808  $1,438,870  $1,451,109
  Total
   assets   $1,559,351  $1,560,234  $1,516,026  $1,547,709  $1,566,819
  Deposits  $1,109,980  $1,110,074  $1,078,431  $1,096,210  $1,116,057
  Interest
   Bearing
   Liabil-
   ities    $1,273,665  $1,273,695  $1,224,061  $1,251,379  $1,257,369
  Share-
   holders'
   equity   $  129,992  $  131,651  $  131,056  $  136,611  $  136,062
  Total
   Shares
   Out-
   stand-
   ing      16,124,997  16,148,863  16,379,602  16,644,463  16,713,960

 AVERAGE 
  BALANCES
  Loans
   and
   leases   $1,002,948  $1,010,604  $  994,093  $  993,498  $1,001,560
  Total
   earning
   assets   $1,436,545  $1,419,329  $1,420,183  $1,446,247  $1,467,244
  Total
   assets   $1,539,474  $1,520,222  $1,516,209  $1,544,515  $1,565,703
  Deposits  $1,094,346  $1,086,050  $1,075,960  $1,099,850  $1,112,521
  Interest
   Bearing
   Liabil-
   ities    $1,264,772  $1,248,691  $1,236,703  $1,263,342  $1,280,144
  Share-
   holders'
   equity   $  133,391  $  132,088  $  137,322  $  137,573  $  141,240



                                                Year to Date
                                          -------------------------
                                              2007         2006
                                          -----------   -----------
 (dollars in thousands 
  except per share data             

 EARNINGS
  Net interest income                      $    42,769   $    46,635
  FTE Net interest income                  $    43,957   $    48,426
  Provision for loan and lease losses      $     7,407   $    16,475
  Non-interest income                      $    15,634   $     9,542
  Non-interest expense                     $    37,234   $    36,308
  Net income (loss)                        $    10,258   $     3,773
  Basic earnings (loss) per share          $      0.62   $      0.22
  Diluted earnings (loss) per share        $      0.62   $      0.22
  Average shares outstanding                16,415,425    16,941,432
  Average diluted shares outstanding        16,426,044    16,972,825

 PERFORMANCE RATIOS
  Return on average assets                       0.67%         0.24%
  Return on average common equity                7.59%         2.59%

  Base Margin                                    2.92%         3.02%
  FTE Adjustment                                 0.08%         0.12%
  Loan Fees                                      0.07%         0.09%
                                           -----------   -----------
  FTE Net Interest Margin                        3.07%         3.23%

  Efficiency ratio                              60.19%        54.19%
  Full-time equivalent employees                   420           416

 CAPITAL
  Average equity to average assets               8.83%         9.14%
  Book value per share                     $      8.06   $      8.14
  Cash dividend per share                  $      0.72   $      0.70

 ASSET QUALITY
  Loan Charge-Offs                         $     6,387   $    18,374
  Loan Recoveries                          $     1,438   $     2,039
                                           -----------   -----------
  Net Charge-Offs                          $     4,949   $    16,335

  Allowance for loan and lease losses      $    16,222   $    13,764

  Nonaccrual Loans                         $    30,459   $    19,152
  Loans 90 days past due                   $       102   $        69
  Restructured loans                       $     3,367   $       888
                                           -----------   -----------

    Total non performing loans             $    33,928   $    20,109
  Other real estate owned &
   other assets                            $    12,565   $     2,432
                                           -----------   -----------
    Total non performing assets            $    46,493   $    22,541
  Problem Loans Still Performing           $    41,022   $    39,650
                                           -----------   -----------

    Total Problem Assets                   $    87,515   $    62,191

  Net loan charge-offs to
   average loans                                 0.49%         1.62%
  Allowance for losses to
    total loans                                  1.62%         1.38%
  Non performing loans to
   Gross Loans                                   3.39%         2.01%
  Non performing assets to
   total assets                                  2.98%         1.44%
     Allowance to non-performing
      loans                                     47.81%        68.45%

 END OF PERIOD BALANCES
  Loans and leases                         $ 1,002,259   $   998,998
  Total earning assets                     $ 1,440,317   $ 1,451,109
  Total assets                             $ 1,559,351   $ 1,566,819
  Deposits                                 $ 1,109,980   $ 1,116,057
  Interest Bearing Liabilities             $ 1,273,665   $ 1,257,369
  Shareholders' equity                     $   129,992   $   136,062
  Total Shares Outstanding                  16,124,997    16,713,960

 AVERAGE BALANCES
  Loans and leases                         $ 1,000,340   $ 1,010,585
  Total earning assets                     $ 1,430,519   $ 1,495,845
  Total assets                             $ 1,530,064   $ 1,593,078
  Deposits                                 $ 1,089,028   $ 1,128,183
  Interest Bearing Liabilities             $ 1,253,368   $ 1,294,591
  Shareholders' equity                     $   135,074   $   145,627



                           MBT FINANCIAL CORP.
             CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

 ---------------------------------------------------------------------
                                            Quarter Ended December 31,
                                              2007         2006
 Dollars in thousands
 (except per share data)

 Interest Income
 Interest and fees on loans                  $ 17,617      $ 17,861
 Interest on investment securities-
      Tax-exempt                                  422         1,073
      Taxable                                   4,947         5,145
 Interest on federal funds sold                     3            11
 ---------------------------------------------------------------------
            Total interest income              22,989        24,090
 ---------------------------------------------------------------------

 Interest Expense
 Interest on deposits                           8,209         8,132
 Interest on borrowed funds                     4,649         4,793
 ---------------------------------------------------------------------
            Total interest expense             12,858        12,925
 ---------------------------------------------------------------------

 Net Interest Income                           10,131        11,165
 Provision For Loan Losses                      4,907         1,175
 ---------------------------------------------------------------------

 Net Interest Income After
 Provision For Loan Losses                      5,224         9,990
 ---------------------------------------------------------------------

 Other Income
 Income from trust services                     1,188         1,076
 Service charges and other fees                 1,603         1,589
 Net gain (loss) on sales of securities          (176)         (156)
 Origination fees on mortgage loans sold          128           132
 Bank Owned Life Insurance income                 335           257
 Other                                            746           577
 ---------------------------------------------------------------------
            Total other income                  3,824         3,475
 ---------------------------------------------------------------------

 Other Expenses
 Salaries and employee benefits                 4,956         4,326
 Occupancy expense                                897           829
 Equipment expense                                786           828
 Marketing expense                                408           554
 Professional fees                                363           605
 Net (gain) loss on other real
  estate owned                                    800           (75)
 Other                                          1,391         1,282
 ---------------------------------------------------------------------
            Total other expenses                9,601         8,349
 ---------------------------------------------------------------------

 Income (Loss) Before Income Taxes               (553)        5,116
 Income Tax Expense (Benefit)                    (392)        1,375
 ---------------------------------------------------------------------
 Net Income (Loss)                           $   (161)     $  3,741
 ---------------------------------------------------------------------

 Basic Earnings (Loss) Per
  Common Share                               $ (0.01)      $   0.22
 ---------------------------------------------------------------------

 Diluted Earnings (Loss) Per
  Common Share                               $ (0.01)      $   0.22
 ---------------------------------------------------------------------

 Dividends Declared Per
  Common Share                               $   0.18      $   0.18
 ---------------------------------------------------------------------



                               MBT FINANCIAL CORP.
                        CONSOLIDATED STATEMENTS OF INCOME
 ---------------------------------------------------------------------

                                             Year Ended December 31,
                                               2007           2006
                                           (Unaudited)
 Dollars in thousands
 (except per share data)
 ---------------------------------------------------------------------
 Interest Income
 Interest and fees on loans                  $ 71,245      $ 70,950
 Interest on investment securities-
      Tax-exempt                                3,177         4,356
      Taxable                                  18,985        20,546
 Interest on federal funds sold                   144            71
 ---------------------------------------------------------------------
            Total interest income              93,551        95,923
 ---------------------------------------------------------------------

 Interest Expense
 Interest on deposits                          32,422        30,849
 Interest on borrowed funds                    18,360        18,439
 ---------------------------------------------------------------------
            Total interest expense             50,782        49,288
 ---------------------------------------------------------------------

 Net Interest Income                           42,769        46,635
 Provision For Loan Losses                      7,407        16,475
 ---------------------------------------------------------------------

 Net Interest Income After
 Provision For Loan Losses                     35,362        30,160
 ---------------------------------------------------------------------

 Other Income
 Income from trust services                     4,577         4,268
 Service charges and other fees                 6,301         6,210
 Net gain (loss) on sales of securities           (80)       (5,057)
 Origination fees on mortgage loans sold          690           560
 Bank Owned Life Insurance income               1,294         1,142
 Other                                          2,852         2,419
 ---------------------------------------------------------------------
            Total other income                 15,634         9,542
 ---------------------------------------------------------------------

 Other Expenses
 Salaries and employee benefits                21,367        19,572
 Occupancy expense                              3,466         3,113
 Equipment expense                              3,261         3,096
 Marketing expense                              1,455         1,623
 Professional fees                              1,508         1,835
 Net loss on other real
  estate owned                                    822         1,755
 Other                                          5,355         5,314
 ---------------------------------------------------------------------
            Total other expenses               37,234        36,308
 ---------------------------------------------------------------------
 Income Before Income Taxes                    13,762         3,394
 Income Tax Expense (Benefit)                   3,504          (379)
 ---------------------------------------------------------------------
 Net Income                                  $ 10,258       $ 3,773
 ---------------------------------------------------------------------

 Basic Earnings Per
  Common Share                                 $ 0.62        $ 0.22
 ---------------------------------------------------------------------

 Diluted Earnings Per
  Common Share                                 $ 0.62        $ 0.22
 ---------------------------------------------------------------------

 Dividends Declared Per
  Common Share                                 $ 0.72        $ 0.70
 ---------------------------------------------------------------------


                         MBT FINANCIAL CORP.
                      CONSOLIDATED BALANCE SHEETS


                                        Dec. 31, 2007   December 31,
 Dollars in thousands                    (Unaudited)        2006
 ---------------------------------------------------------------------
 Assets
 Cash and Cash Equivalents
      Cash and due from banks                $ 25,113      $ 27,903
      Federal funds sold                           --            --
 ---------------------------------------------------------------------
         Total cash and cash
          equivalents                          25,113        27,903

 Securities - Held to Maturity                 44,734        64,938
 Securities - Available for Sale              380,238       374,087
 Federal Home Loan Bank stock -
  at cost                                      13,086        13,086
 Loans held for sale                            1,431           721
 Loans - Net                                  984,606       984,513
 Accrued interest receivable
  and other assets                             34,915        27,961
 Bank Owned Life Insurance                     42,509        39,631
 Premises and Equipment - Net                  32,719        33,979
 ---------------------------------------------------------------------
         Total assets                     $ 1,559,351   $ 1,566,819
 ---------------------------------------------------------------------

 Liabilities
 Deposits:
      Non-interest bearing                $   141,115   $   158,688
      Interest-bearing                        968,865       957,369
 ---------------------------------------------------------------------
         Total deposits                     1,109,980     1,116,057

 Federal Home Loan Bank advances              256,500       256,500
 Federal funds purchased                       13,300         3,500
 Repurchase agreements                         35,000        40,000
 Interest payable and other
  liabilities                                  14,579        14,700
 ---------------------------------------------------------------------
         Total liabilities                  1,429,359     1,430,757
 ---------------------------------------------------------------------

 Shareholders' Equity
 Common stock (no par value)                       --            --
 Additional paid-in capital                        --         6,979
 Retained Earnings                            132,462       134,162
 Accumulated other comprehensive
  income                                       (2,470)       (5,079)
 ---------------------------------------------------------------------
         Total shareholders'
          equity                              129,992       136,062
 ---------------------------------------------------------------------
         Total liabilities and
          shareholders' equity            $ 1,559,351   $ 1,566,819
 ---------------------------------------------------------------------


            

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