<PAGE>

================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the quarterly period ended September 30, 2006

                                       Or

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                        Commission File Number: 000-30973

                               MBT FINANCIAL CORP.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                          <C>
            MICHIGAN                                              38-3516922
(State or other jurisdiction of                                (I.R.S. Employer
 incorporation or organization)                              Identification No.)
</TABLE>

                               102 E. FRONT STREET
                             MONROE, MICHIGAN 48161
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (734) 241-3431
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer" and "large accelerated filer" in Rule 12b-2 of the Exchange Act (check
one).

Large accelerated filer [ ]   Accelerated Filer [X]   Non-accelerated filer [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]

As of November 8, 2006, there were 16,856,173 shares of the Company's Common
Stock outstanding.

================================================================================

<PAGE>

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                               MBT FINANCIAL CORP.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                   SEPTEMBER 30, 2006   DECEMBER 31,
Dollars in thousands                                   (UNAUDITED)          2005
                                                   ------------------   ------------
<S>                                                <C>                  <C>
ASSETS
Cash and Cash Equivalents
   Cash and due from banks                             $   25,850        $   32,330
   Federal funds sold                                          --             5,000
                                                       ----------        ----------
      Total cash and cash equivalents                      25,850            37,330
Securities - Held to Maturity                              61,562            76,467
Securities - Available for Sale                           390,196           444,021
Federal Home Loan Bank stock - at cost                     13,132            13,221
Loans held for sale                                           914               434
Loans - Net                                               994,459           975,252
Accrued interest receivable and other assets               30,379            28,748
Bank Owned Life Insurance                                  39,374            36,252
Premises and Equipment - Net                               32,509            26,631
                                                       ----------        ----------
      Total assets                                     $1,588,375        $1,638,356
                                                       ==========        ==========
LIABILITIES
Deposits:
   Non-interest bearing                                $  152,522        $  178,116
   Interest-bearing                                       972,262         1,006,594
                                                       ----------        ----------
      Total deposits                                    1,124,784         1,184,710

Federal Home Loan Bank advances                           256,500           256,500
Federal funds purchased                                    16,100                --
Repurchase agreements                                      40,000            35,000
Interest payable and other liabilities                     10,974            10,527
                                                       ----------        ----------
      Total liabilities                                 1,448,358         1,486,737
                                                       ----------        ----------
STOCKHOLDERS' EQUITY
Common stock (no par value)                                    --                --
Additional paid-in capital                                  9,341            14,417
Retained Earnings                                         133,430           142,205
Accumulated other comprehensive loss                       (2,754)           (5,003)
                                                       ----------        ----------
      Total stockholders' equity                          140,017           151,619
                                                       ----------        ----------
      Total liabilities and stockholders' equity       $1,588,375        $1,638,356
                                                       ==========        ==========
</TABLE>

The accompanying notes to consolidated financial statements are integral part of
these statements.


                                      -2-

<PAGE>

                               MBT FINANCIAL CORP.
                  CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED
                                                 SEPTEMBER 30,
                                              ------------------
Dollars in thousands, except per share data     2006      2005
                                              -------   --------
<S>                                           <C>       <C>
INTEREST INCOME
Interest and fees on loans                    $18,080   $16,841
Interest on investment securities-
   Tax-exempt                                   1,041     1,242
   Taxable                                      5,039     5,037
Interest on federal funds sold                      5        57
                                              -------   -------
      Total interest income                    24,165    23,177
                                              -------   -------
INTEREST EXPENSE
Interest on deposits                            7,954     6,218
Interest on borrowed funds                      4,831     3,846
                                              -------   -------
      Total interest expense                   12,785    10,064
                                              -------   -------
NET INTEREST INCOME                            11,380    13,113
PROVISION FOR LOAN LOSSES                       7,950     4,100
                                              -------   -------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES                       3,430     9,013
                                              -------   -------
OTHER INCOME
Income from trust services                      1,060     1,045
Service charges and other fees                  1,591     1,555
Net gain (loss) on sales of securities              6       (13)
Other                                           1,066     1,096
                                              -------   -------
      Total other income                        3,723     3,683
                                              -------   -------
OTHER EXPENSES
Salaries and employee benefits                  4,728     4,368
Occupancy expense                                 805       723
Other                                           3,885     3,932
                                              -------   -------
      Total other expenses                      9,418     9,023
                                              -------   -------
INCOME (LOSS) BEFORE INCOME TAXES              (2,265)    3,673
INCOME TAX EXPENSE (BENEFIT)                   (1,147)    1,102
                                              -------   -------
NET INCOME (LOSS)                             $(1,118)  $ 2,571
                                              =======   =======
BASIC EARNINGS (LOSS) PER COMMON SHARE        $ (0.07)  $  0.15
                                              =======   =======
DILUTED EARNINGS (LOSS) PER COMMON SHARE      $ (0.07)  $  0.15
                                              =======   =======
COMMON STOCK DIVIDENDS DECLARED PER SHARE     $  0.18   $  0.17
                                              =======   =======
</TABLE>

The accompanying notes to consolidated financial statements are integral part of
these statements.


                                      -3-
<PAGE>

                               MBT FINANCIAL CORP.
                  CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

<TABLE>
<CAPTION>
                                              NINE MONTHS ENDED
                                                SEPTEMBER 30,
                                              -----------------
Dollars in thousands, except per share data     2006      2005
                                              -------   -------
<S>                                           <C>       <C>
INTEREST INCOME
Interest and fees on loans                    $53,089   $47,595
Interest on investment securities-
   Tax-exempt                                   3,283     3,764
   Taxable                                     15,401    14,468
Interest on federal funds sold                     60       188
                                              -------   -------
      Total interest income                    71,833    66,015
                                              -------   -------
INTEREST EXPENSE
Interest on deposits                           22,717    16,623
Interest on borrowed funds                     13,646    10,966
                                              -------   -------
      Total interest expense                   36,363    27,589
                                              -------   -------
NET INTEREST INCOME                            35,470    38,426
PROVISION FOR LOAN LOSSES                      15,300     5,300
                                              -------   -------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES                      20,170    33,126
                                              -------   -------
OTHER INCOME
Income from trust services                      3,192     3,132
Service charges and other fees                  4,621     4,331
Net gain (loss) on sales of securities         (4,901)      273
Other                                           3,155     3,057
                                              -------   -------
      Total other income                        6,067    10,793
                                              -------   -------
OTHER EXPENSES
Salaries and employee benefits                 15,246    13,915
Occupancy expense                               2,284     2,507
Other                                          10,429     9,540
                                              -------   -------
      Total other expenses                     27,959    25,962
                                              -------   -------
INCOME (LOSS) BEFORE INCOME TAXES              (1,722)   17,957
INCOME TAX EXPENSE (BENEFIT)                   (1,754)    5,138
                                              -------   -------
NET INCOME                                    $    32   $12,819
                                              =======   =======
BASIC EARNINGS PER COMMON SHARE               $    --   $  0.74
                                              =======   =======
DILUTED EARNINGS PER COMMON SHARE             $    --   $  0.74
                                              =======   =======
COMMON STOCK DIVIDENDS DECLARED PER SHARE     $  0.52   $  0.49
                                              =======   =======
</TABLE>

The accompanying notes to consolidated financial statements are integral part of
these statements.


                                       -4-

<PAGE>

                               MBT FINANCIAL CORP.
                CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

<TABLE>
<CAPTION>
                                                                                         NINE MONTHS ENDED
                                                                                           SEPTEMBER 30,
                                                                                       --------------------
Dollars in thousands                                                                     2006        2005
                                                                                       --------   ---------
<S>                                                                                    <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income                                                                             $     32   $  12,819
Adjustments to reconcile net income to net cash from operating activities
   Depreciation                                                                           1,889       2,172
   Provision for loan losses                                                             15,300       5,300
   (Increase) decrease in net deferred Federal income tax asset                          (1,300)        300
   Net amortization of investment premium and discount                                      (23)        160
   Net increase (decrease) in interest payable and other liabilities                        452        (582)
   Net decrease in interest receivable and other assets                                  (6,226)     (9,808)
   Equity Compensation                                                                      360          --
   Net (gain) loss on sales of securities                                                 4,901        (273)
   Increase in cash surrender value of life insurance                                      (885)       (824)
                                                                                       --------   ---------
      Net cash provided by operating activities                                        $ 14,500   $   9,264
                                                                                       --------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and redemptions of investment securities held to maturity     $ 18,639   $  14,366
Proceeds from maturities and redemptions of investment securities available for sale      6,401      48,915
Proceeds from sales of investment securities held to maturity                                --       2,994
Proceeds from sales of investment securities available for sale                         130,652      58,625
Net increase in loans                                                                   (34,987)    (33,590)
Proceeds from sales of other real estate owned                                            5,279       6,614
Proceeds from sales of other assets                                                          83         101
Purchase of investment securities held to maturity                                       (3,724)     (9,262)
Purchase of Bank Owned Life Insurance                                                    (2,238)         --
Purchase of investment securities available for sale                                    (84,568)   (145,921)
Purchase of bank premises and equipment                                                  (8,558)     (4,637)
                                                                                       --------   ---------
      Net cash provided by (used for) investing activities                             $ 26,979   $ (61,795)
                                                                                       --------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits                                                    $(59,926)  $  44,700
Net increase in Federal funds purchased                                                  16,100      10,200
Net increase in securities sold under repurchase agreements                               5,000       5,000
Proceeds from issuance of common stock                                                      210       1,200
Repurchase of common stock                                                               (5,651)     (5,354)
Dividends paid                                                                           (8,692)     (8,356)
                                                                                       --------   ---------
      Net cash provided by (used for) financing activities                             $(52,959)  $  47,390
                                                                                       --------   ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS                                              $(11,480)  $  (5,141)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                         37,330      34,540
                                                                                       --------   ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                             $ 25,850   $  29,399
                                                                                       ========   =========
</TABLE>

The accompanying notes to consolidated financial statements are integral part of
these statements.


                                       -5-

<PAGE>

                               MBT FINANCIAL CORP.
     CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - UNAUDITED

<TABLE>
<CAPTION>
                                                                                 ACCUMULATED
                                                       ADDITIONAL                   OTHER
                                                         PAID-IN    RETAINED   COMPREHENSIVE
Dollars in thousands                                     CAPITAL    EARNINGS    INCOME (LOSS)     TOTAL
                                                       ----------   --------   --------------   --------
<S>                                                    <C>          <C>        <C>              <C>
BALANCE - JANUARY 1, 2006                               $14,417     $142,205      $(5,003)      $151,619
Repurchase of Common Stock (337,174 shares)              (5,651)          --           --         (5,651)
Issuance of Common Stock (13,729 shares)
   Stock options exercised (5,999 shares)                    81           --           --             81
   Other stock issued (7,730 shares)                        129           --           --            129
Tax benefit from exercise of options                          5           --                           5
Equity Compensation                                         360           --           --            360
Dividends declared ($0.52 per share)                         --       (8,807)          --         (8,807)
Comprehensive income:
   Net income                                                --           32           --             32
   Change in net unrealized loss on securities
      available for sale - Net of tax effect of $506         --           --         (941)          (941)
   Reclassification adjustment for losses included
      in net income - Net of tax effect of ($1,717)          --           --        3,190          3,190
                                                        -------     --------      -------       --------
         Total Comprehensive Income                          --           32        2,249          2,281
                                                        -------     --------      -------       --------
BALANCE - SEPTEMBER 30, 2006                            $ 9,341     $133,430      $(2,754)      $140,017
                                                        =======     ========      =======       ========
</TABLE>

The accompanying notes to consolidated financial statements are integral part of
these statements.


                                       -6-

<PAGE>

                               MBT FINANCIAL CORP.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES

The unaudited consolidated financial statements include the accounts of MBT
Financial Corp. (the "Company") and its subsidiary, Monroe Bank & Trust (the
"Bank"). The Bank includes the accounts of its wholly owned subsidiaries, MBT
Credit Company, Inc. and MB&T Financial Services, Inc. The Bank operates twenty
branches in Monroe County, Michigan and five branches in Wayne County, Michigan.
MBT Credit Company, Inc. operates a mortgage loan office in Monroe County. The
Bank's primary source of revenue is from providing loans to customers, who are
predominantly small and middle-market businesses and middle-income individuals.
The Company's sole business segment is community banking.

The accounting and reporting policies of the Bank conform to practice within the
banking industry and are in accordance with accounting principles generally
accepted in the United States. Preparation of financial statements in conformity
with generally accepted accounting principles requires Management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Material estimates that are particularly susceptible to significant changes in
the near term are the determination of the allowance for loan losses and the
valuation of other real estate owned.

The accompanying unaudited consolidated financial statements of the Company have
been prepared in accordance with the instructions to Form 10-Q. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. However, such
information reflects all adjustments (consisting of normal recurring
adjustments), which are, in the opinion of Management, necessary for fair
statement of results for the interim periods.

The significant accounting policies are as follows:

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its subsidiary. All material intercompany transactions and balances have been
eliminated. Certain prior period amounts have been reclassified to conform to
the current period presentation.

COMPREHENSIVE INCOME

Accounting principles generally require that revenue, expenses, gains, and
losses be included in net income. Certain changes in assets and liabilities,
however, such as unrealized gains and losses on securities available for sale,
are reported as a separate component of the equity section of the balance sheet.
Such items, along with net income, are components of comprehensive income.

BUSINESS SEGMENTS

While the Company's chief decision makers monitor the revenue streams of various
products and services, operations are managed and financial performance is
evaluated on a company wide basis. Accordingly, all of the Company's operations
are considered by management to be aggregated in one reportable segment.

STOCK-BASED COMPENSATION

On January 1, 2006, the Company adopted SFAS 123(R), "Accounting for Stock Based
Compensation" for all share based payments to employees, including grants of
stock options and


                                      -7-

<PAGE>

restricted stock units. The amount of compensation is measured at the fair value
of the options when granted, and this cost is expensed over the required service
period, which is normally the vesting period of the options.

SFAS 123(R) applies to awards granted or modified after January 1, 2006.
Compensation cost is also recorded for prior option grants that vest after the
date of adoption.

The Company's as reported and pro forma earnings information for the quarter and
nine months ended September 30 were as follows:

<TABLE>
<CAPTION>
                                                       Three Months Ended   Nine Months Ended
                                                            Sept. 30,            Sept. 30,
                                                       ------------------   -----------------
Dollars in thousands, except per share data               2006     2005       2006     2005
                                                        -------   ------     -----   -------
<S>                                                    <C>        <C>       <C>      <C>
   Net Income (Loss) as Reported                        $(1,118)  $2,571     $  32   $12,819
   Add:  Stock based compensation determined
         under the fair value method, net of related
         tax effects included in Net Income             $    79   $   --     $ 234   $    --
   Less: Stock based compensation determined
         under the fair value method, net of related
         tax effects included in Net Income             $   (79)  $ (115)    $(234)  $  (345)
                                                        -------   ------     -----   -------
   Pro Forma Net Income (Loss)                          $(1,118)  $2,456     $  32   $12,474
                                                        =======   ======     =====   =======
Earnings (Loss) per Share as Reported
   Basic                                                 ($0.07)  $ 0.15     $0.00   $  0.74
   Diluted                                               ($0.07)  $ 0.15     $0.00   $  0.74
Pro Forma Earnings (Loss) per Share
   Basic                                                 ($0.07)  $ 0.14     $0.00   $  0.72
   Diluted                                               ($0.07)  $ 0.14     $0.00   $  0.71
</TABLE>

Compensation expense in the pro forma disclosures is not indicative of future
amounts, as options vest over several years and additional grants are generally
made each year.

The weighted average fair value of options granted was $3.61 in 2006 and $5.10
in 2005. The fair value of each option grant is estimated on the date of the
grant using the Black-Scholes option pricing model with the following
assumptions: expected option lives of seven years for both years; expected
volatility of 22.9% in 2006 and 24.3% in 2005; and risk-free interest rates of
4.5% in 2006 and 3.8% in 2005.

ACCOUNTING PRONOUNCEMENTS

In September 2006, the Financial Accounting Standards Board "FASB" issued FAS
No. 158, Employer's Accounting for Defined Benefit Pensions and Other
Postretirement Benefit Plans (FAS 158). FAS 158, which is effective for the
Company on December 31, 2006, requires the Company to recognize a liability for
its unfunded postretirement benefit plans. FAS 158 requires companies to
recognize changes in the funded status of a defined benefit plan in the year in
which the changes occur and report those changes in comprehensive income. The
Company currently has unfunded postretirement health benefits for all of its
employees and unfunded postretirement death benefits for its directors and
certain executive officers. While evaluating the impact of FAS 158, the Company
is determining whether the current postretirement death benefit plan can be
modified or terminated. Depending on whether or not the death benefit plan can
be modified or terminated, the potential after tax impact to comprehensive
income is expected to be between $200,000 and $5,000,000.


                                      -8-

<PAGE>

2. EARNINGS PER SHARE

The calculation of net income (loss) per common share for the three months ended
September 30 is as follows:

<TABLE>
<CAPTION>
                                                      2006          2005
                                                  -----------   -----------
<S>                                               <C>           <C>
BASIC
   Net income (loss)                              $(1,118,000)  $ 2,571,000
   Less preferred dividends                                --            --
                                                  -----------   -----------
   Net income (loss) applicable to common stock   $(1,118,000)  $ 2,571,000
                                                  -----------   -----------
   Average common shares outstanding               16,872,826    17,282,699
                                                  -----------   -----------
   Earnings (loss) per common share - basic       $     (0.07)  $      0.15
                                                  ===========   ===========
</TABLE>

<TABLE>
<CAPTION>
                                                      2006          2005
                                                  -----------   -----------
<S>                                               <C>           <C>
DILUTED
   Net income (loss)                              $(1,118,000)  $ 2,571,000
   Less preferred dividends                                --            --
                                                  -----------   -----------
   Net income (loss) applicable to common stock   $(1,118,000)  $ 2,571,000
                                                  -----------   -----------
   Average common shares outstanding               16,872,826    17,282,699
   Stock option adjustment                             21,678        83,650
                                                  -----------   -----------
   Average common shares outstanding - diluted     16,894,504    17,366,349
                                                  -----------   -----------
   Earnings (loss) per common share - diluted     $     (0.07)  $      0.15
                                                  ===========   ===========
</TABLE>

The calculation of net income per common share for the nine months ended
September 30 is as follows:

<TABLE>
<CAPTION>
                                                      2006          2005
                                                  -----------   -----------
<S>                                               <C>           <C>
BASIC
   Net income                                     $    32,000   $12,819,000
   Less preferred dividends                                --            --
                                                  -----------   -----------
   Net income applicable to common stock          $    32,000   $12,819,000
                                                  -----------   -----------
   Average common shares outstanding               16,983,826    17,371,928
                                                  -----------   -----------
   Earnings per common share - basic              $        --   $      0.74
                                                  ===========   ===========
</TABLE>

<TABLE>
<CAPTION>
                                                      2006          2005
                                                  -----------   -----------
<S>                                               <C>           <C>
DILUTED
   Net income                                     $    32,000   $12,819,000
   Less preferred dividends                                --            --
                                                  -----------   -----------
   Net income applicable to common stock          $    32,000   $12,819,000
                                                  -----------   -----------
   Average common shares outstanding               16,983,826    17,371,928
   Stock option adjustment                             26,447        84,409
                                                  -----------   -----------
   Average common shares outstanding - diluted     17,010,273    17,456,337
                                                  -----------   -----------
   Earnings per common share - diluted            $        --   $      0.74
                                                  ===========   ===========
</TABLE>

The following table summarizes the options that have been granted to
non-employee directors and certain key executives in accordance with the
Long-Term Incentive Compensation Plan that was approved by shareholders at the
Annual Meeting of Shareholders on April 6, 2000.


                                      -9-

<PAGE>

<TABLE>
<CAPTION>
                                                    Weighted Average
                                           Shares    Exercise Price
                                          -------   ----------------
<S>                                       <C>       <C>
Options Outstanding, January 1, 2006      432,642        $17.99
Granted                                    86,000         16.24
Exercised                                   5,999         13.45
Forfeited                                   2,500         20.72
                                          -------        ------
Options Outstanding, September 30, 2006   510,143        $17.74
                                          -------        ------
Options Exercisable, September 30, 2006   296,322        $16.59
                                          -------        ------
</TABLE>

On January 3, 2006, performance restricted stock units were awarded to certain
key executives in accordance with the Long-Term Incentive Compensation Plan that
was approved by shareholders at the Annual Meeting of Shareholders on April 6,
2000. Each performance stock unit (PSU) is equivalent to one share of MBT
Financial Corp. common stock. Stock will be issued to the participants following
a three year performance period that ends on December 31, 2008 based on the
cumulative earnings per share during that three year period. The PSUs vest on
December 31, 2008. There were 21,800 PSUs granted, and none will be considered
vested and earned for payment if the Company's three year cumulative earnings
per share is less than $4.06.

3. LOANS

The Bank grants commercial, consumer, and mortgage loans primarily to customers
in Monroe County, Michigan, southern Wayne County, Michigan, and surrounding
areas. Although the Bank has a diversified loan portfolio, a substantial portion
of its debtors' ability to honor their contracts is dependent on the automotive,
manufacturing, and real estate development economic sectors.

Loans consist of the following (000s omitted):

<TABLE>
<CAPTION>
                                               September 30,   December 31,
                                                   2006            2005
                                               -------------   ------------
<S>                                            <C>             <C>
Real estate loans                                $  843,084      $813,953
Loans to finance agricultural production and
   other loans to farmers                             4,480         3,519
Commercial and industrial loans                     101,237       100,289
Loans to individuals for household, family,
   and other personal expenditures                   59,404        71,244
All other loans (including overdrafts)                  648         1,635
                                                 ----------      --------
      Total loans, gross                          1,008,853       990,640
      Less: Deferred loan fees                          852         1,763
                                                 ----------      --------
      Total loans, net of deferred loan fees
                                                  1,008,001       988,877
      Less: Allowance for loan losses                13,542        13,625
                                                 ----------      --------
                                                 $  994,459      $975,252
                                                 ==========      ========
</TABLE>

Loans are placed in a nonaccrual status when, in the opinion of Management, the
collection of additional interest is doubtful. All loan relationships over
$250,000 that are classified by Management as nonperforming as well as selected
performing accounts are reviewed for impairment. Allowances for loans determined
to be impaired are included in the allowance for loan losses. All cash received
on nonaccrual loans is applied to the principal balance. Nonperforming assets
consist of nonaccrual loans, loans 90 days or more past due, restructured loans,
and other real estate owned. Other real estate owned includes real estate that
has been


                                      -10-

<PAGE>

acquired in full or partial satisfaction of loan obligations or upon foreclosure
and real estate that the bank has purchased but no longer intends to use for
bank premises.

The following table summarizes nonperforming assets (000's omitted):

<TABLE>
<CAPTION>
                                       September 30,   December 31,
                                            2006           2005
                                       -------------   ------------
<S>                                    <C>             <C>
Nonaccrual loans                          $13,334        $16,212
Loans 90 days past due                         99            101
Restructured loans                            944          1,813
                                          -------        -------
   Total nonperforming loans              $14,377        $18,126
Other real estate owned                     4,873          8,336
                                          -------        -------
   Total nonperforming assets             $19,250        $26,462
                                          =======        =======
Nonperforming assets to total assets         1.21%          1.62%
Allowance for loan losses to
   nonperforming assets                     70.35%         51.49%
</TABLE>

4. ALLOWANCE FOR LOAN LOSSES

Activity in the allowance for loan losses was as follows (000's omitted):

<TABLE>
<CAPTION>
                                       September 30,   December 31,
                                            2006           2005
                                       -------------   ------------
<S>                                    <C>             <C>
Balance beginning of year                $ 13,625        $13,800
Provision for loan losses                  15,300          6,906
Loans charged off                         (17,032)        (9,340)
Transfer to establish reserve for
   unfunded loan commitments                   --           (275)
Recoveries                                  1,649          2,534
                                         --------        -------
Balance end of period                    $ 13,542        $13,625
                                         ========        =======
</TABLE>

For each period, the provision for loan losses in the income statement is based
on Management's estimate of the amount required to maintain an adequate
Allowance for Loan Losses.

To serve as a basis for making this provision, the Bank maintains an extensive
credit risk monitoring process that considers several factors including: current
economic conditions affecting the Bank's customers, the payment performance of
individual loans and pools of homogeneous loans, portfolio seasoning, changes in
collateral values, and detailed reviews of specific loan relationships. For
loans deemed to be impaired due to an expectation that all contractual payments
will probably not be received, impairment is measured by comparing the Bank's
recorded investment in the loan to the present value of expected cash flows
discounted at the loan's effective interest rate, or the fair value of the
collateral, or the loan's observable market price.

The provision for loan losses increases the Allowance for Loan Losses, a
valuation account which is netted against loans on the consolidated statements
of condition. When it is determined that a customer will not repay a loan, the
loan is charged off, reducing the Allowance for Loan Losses. If, subsequent to a
charge off, the Bank is able to collect additional amounts from the customer or
sell collateral worth more than earlier estimated, a recovery is recorded.


                                      -11-
<PAGE>

5. INVESTMENT SECURITIES

The following is a summary of the Bank's investment securities portfolio as of
September 30, 2006 and December 31, 2005 (000's omitted):

<TABLE>
<CAPTION>
                                                      September 30, 2006          December 31, 2005
                                                   ------------------------   ------------------------
                                                   Amortized     Estimated    Amortized     Estimated
                                                      Cost     Market Value      Cost     Market Value
                                                   ---------   ------------   ---------   ------------
<S>                                                <C>         <C>            <C>         <C>
Held to Maturity
Obligations of U.S. Government Agencies             $    10       $    10      $    11       $    12
Obligations of States and Political Subdivisions     61,552        62,069       76,456        77,293
Other Securities                                         --            --           --            --
                                                    -------       -------      -------       -------
                                                    $61,562       $62,079      $76,467       $77,305
                                                    =======       =======      =======       =======
</TABLE>

<TABLE>
<CAPTION>
                                                      September 30, 2006          December 31, 2005
                                                   ------------------------   ------------------------
                                                   Amortized     Estimated    Amortized     Estimated
                                                      Cost     Market Value      Cost     Market Value
                                                   ---------   ------------   ---------   ------------
<S>                                                <C>         <C>            <C>         <C>
Available for Sale
Obligations of U.S. Government Agencies             $332,866     $328,651      $358,412     $351,074
Obligations of States and Political Subdivisions      23,276       23,285        26,206       26,081
Other Securities                                      38,291       38,260        67,098       66,866
                                                    --------     --------      --------     --------
                                                    $394,433     $390,196      $451,716     $444,021
                                                    ========     ========      ========     ========
</TABLE>

The unrealized losses on investment securities are primarily the result of
increases in market interest rates and not the result of credit quality of the
issuers of the securities. The Company has the ability and intent to hold most
of these securities until recovery, which may be until maturity. For securities
in which the Company no longer has the intent to hold until recovery, the
securities are treated as other than temporarily impaired and the amount of
impairment is charged to earnings.

6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

The Bank is a party to financial instruments with off-balance sheet risk in the
normal course of business to meet the financing needs of its customers. These
financial instruments include commitments to extend credit and standby letters
of credit. Those instruments involve, to varying degrees, elements of credit and
interest rate risk in excess of the amount recognized in the consolidated
statements of condition.

The Bank's exposure to credit loss in the event of nonperformance by the other
party to the financial instrument for commitments to extend credit and standby
letters of credit is represented by the contractual amount of those instruments.
The Bank uses the same credit policies in making commitments and conditional
obligations as it does for its other lending activities.

Financial instruments whose contractual amounts represent off-balance sheet
credit risk were as follows (000s omitted):


                                      -12-

<PAGE>

<TABLE>
<CAPTION>
                                                                CONTRACTUAL AMOUNT
                                                             ------------------------
                                                             SEPT. 30,   DECEMBER 31,
                                                                2006         2005
                                                             ---------   ------------
<S>                                                          <C>         <C>
Commitments to extend credit:
   Unused portion of commercial lines of credit               $106,238     $130,496
   Unused portion of credit card lines of credit                 7,163        7,529
   Unused portion of home equity lines of credit                20,343       20,258
Standby letters of credit and financial guarantees written      12,371       12,736
</TABLE>

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Most
commercial lines of credit are secured by real estate mortgages or other
collateral, and generally have fixed expiration dates or other termination
clauses. Since the lines of credit may expire without being drawn upon, the
total committed amounts do not necessarily represent future cash requirements.
Credit card lines of credit have various established expiration dates, but are
fundable on demand. Home equity lines of credit are secured by real estate
mortgages, a majority of which have ten year expiration dates, but are fundable
on demand. The Bank evaluates each customer's creditworthiness on a case-by-case
basis. The amount of the collateral obtained, if deemed necessary by the Bank
upon extension of credit, is based on Management's credit evaluation of the
counterparty.

Standby letters of credit written are conditional commitments issued by the Bank
to guarantee the performance of a customer to a third party. Those guarantees
are primarily issued to support public and private borrowing arrangements and
other business transactions.


                                      -13-

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

General

MBT Financial Corp. (the "Company) is a bank holding company with one
subsidiary, Monroe Bank & Trust ("the Bank"). The Bank is a commercial bank with
two wholly owned subsidiaries, MBT Credit Company, Inc. and MB&T Financial
Services. MBT Credit Company, Inc. conducts lending operations for the Bank and
MB&T Financial Services is an insurance agency which sells insurance policies to
the Bank. The Bank operates 20 branch offices in Monroe County, Michigan and 5
offices in Wayne County, Michigan. The Bank's primary source of income is
interest income on its loans and investments and its primary expense is interest
expense on its deposits and borrowings.

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, changes 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 does not undertake, and specifically disclaims any obligation, to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such statements.

Critical Accounting Policies

The Company's Allowance for Loan Losses is a "critical accounting estimate"
because it is an estimate that is based on assumptions that are highly
uncertain, and if different assumptions were used or if any of the assumptions
used were to change, there could be a material impact on the presentation of the
Company's financial condition. These assumptions include, but are not limited
to, collateral values and the effect of economic conditions on the financial
condition of the borrowers. To determine the Allowance for Loan Losses, the
Company estimates losses on all loans that are not classified as non accrual or
renegotiated by applying historical loss rates to those loans in accordance with
SFAS 5. In addition, all loans that are non accrual or renegotiated are
individually tested for impairment. Any amount of monetary impairment is
included in the Allowance for Loan Losses in accordance with SFAS 114.

Financial Condition

During the first nine months of 2006, the Company's local deposit market became
increasingly competitive, with some banks offering retail rates higher than
national market rates for money market deposits and higher than wholesale or
brokered rates for certificates of deposit. The flat


                                      -14-

<PAGE>

yield curve has narrowed the spread between bank asset yields and funding costs,
so the Company has adopted two strategies to control the decline in its net
interest margin. The first part of the strategy is to change the mix of assets,
decreasing the percent invested in securities and increasing the percent
invested in loans. The Company successfully increased its loans to assets ratio
from 60.4% at December 31, 2005 to 63.5% at September 30, 2006, and the yield on
earning assets increased from 5.94% in the first nine months of 2005 to 6.38%
for the first nine months of 2006. The second part of the strategy to control
the decline in the net interest margin is to limit the increase in the cost of
funds by keeping deposit rates low relative to the local competition. As
expected, this has caused a decrease in the amount of deposits. Total deposits
decreased $59.9 million, or 5.1% in the first nine months of 2006.

Since December 31, 2005, total loans increased $19.6 million (2.0%), total cash
and investments decreased $80.3 million (14.1%), and total assets decreased
$50.0 million (3.1%). Loan growth was restricted in the third quarter of 2006 by
the sale of $24.3 million of problem loans. Excluding this sale, loans grew
$43.9 million, or 4.4%. Loan growth efforts are focused on real estate secured
loans, particularly home equity lending. The loan growth and the decline in
deposits were funded by the decrease in investment securities and an increase in
short term borrowings. Also, capital decreased $11.6 million, or 7.7% as the
company repurchased 337,174 shares of its stock for $5.7 million, the net
unrealized loss on securities available for sale decreased $2.2 million, and
dividends declared exceeded net income by $8.8 million. The capital to assets
ratio decreased from 9.25% at December 31, 2005 to 8.82% at September 30, 2006,
but it remains above the peer group average.

The amount of nonperforming assets ("NPAs") decreased $7.2 million or 27.3%
since year end. A single credit relationship valued at $8.5 million returned to
non accrual status in the second quarter, however, the sale of that relationship
and other performing and non performing assets totaling $25 million in the third
quarter contributed to the decrease in NPAs. The Company's Allowance for Loan
and Lease Losses ("ALLL") decreased $83,000 since December 31, 2005. The ALLL is
now 1.34% of loans, compared to 1.38% at year end. The ALLL is 70.3% of NPAs, an
increase from 51.5% at year end. Because a significant portion of the Bank's
lending is secured by real estate, we believe that at this level the ALLL
adequately estimates the potential losses in the loan portfolio. With a
significant portion of the risk removed from the portfolio, we plan to resume
more traditional methods of working out the remaining non performing assets. On
November 2, 2006 the Company completed the sale of an OREO property valued at
$2.2 million. This property was written down to the sale value in the second
quarter of 2006.

Results of Operations - Third Quarter 2006 vs. Third Quarter 2005

Net Interest Income - A comparison of the income statements for the three months
ended September 30, 2006 and 2005 shows a decrease of $1.7 million, or 13.2% in
Net Interest Income. Interest income on loans increased $1.2 million or 7.4% as
the average loans outstanding increased $56.2 million and the average yield on
loans increased from 6.89% to 6.99%. Even though the yield on investments and
fed funds sold increased from 4.74% to 5.10%, the interest income on investments
and fed funds sold decreased $251,000 as the average amount of investments and
fed funds sold decreased $75.0 million. The yields on assets increased slightly
due to the increases in market interest rates and the restructuring of the
investment portfolio that was completed early in the third quarter of 2006.
Shorter term market interest rates have increased more rapidly than the longer
term rates, causing funding costs to rise faster than asset yields. The interest
expense on deposits increased $1.7 million, or 27.9% as average deposits
decreased $26.4 million but the average cost of those deposits increased from
2.16% to 2.83%. The cost of borrowed funds increased $1.0 million as the average
amount of borrowed funds increased $30.7 million and the average cost of the
borrowings increased from 5.17% to 5.88%.


                                      -15-

<PAGE>

The fed rate increases that began late in the second quarter of 2004 and
continued through the second quarter of 2006 had a positive impact on our income
as our loan portfolio contains approximately $230 million of variable rate,
prime indexed loans and our investment portfolio contains about $26 million in
LIBOR based floating rate securities. The increase in interest rates only
affected short term rates, and this flattening of the yield curve prevented our
loan and investment yields from increasing more.

Provision for Loan Losses - The Provision for Loan Losses increased from $4.1
million in the third quarter of 2005 to $8.0 million in the third quarter of
2006 to provide for the write down of $24.3 million of loans that were moved
from loans held for investment to loans available for sale. Net charge offs were
$11.9 million during the third quarter of 2006, compared to $4.1 million in the
third quarter of 2005. Each quarter, the Company conducts a review and analysis
of its ALLL to ensure its adequacy. This analysis involves specific allocations
for impaired credits and a general allocation for losses expected based on
historical experience adjusted for current conditions.

Other Income - Non interest income increased $40,000 or 1.1% in the third
quarter of 2006 compared to the third quarter of 2005. The table below compares
the components of Other Income for the two quarters:

<TABLE>
<CAPTION>
                                                Quarters Ended
                                            ---------------------
(Dollars in Thousands)                      9/30/2006   9/30/2005   % Change
                                            ---------   ---------   --------
<S>                                         <C>         <C>         <C>
Trust Income                                  $1,060     $1,045        1.4%
Deposit Account Service Charges                  249        300      -17.0%
Other Deposit Account Related Fees             1,342      1,255        6.9%
Origination Fees/Gains on Loans Sold             152        232      -34.5%
Gains (Losses) on Securities Transactions          6        (13)     146.2%
BOLI Earnings                                    310        276       12.3%
Other Income                                     604        588        2.7%
                                              ------     ------      -----
                                              $3,723     $3,683        1.1%
</TABLE>

The Deposit Account Service Charges decreased as more customers moved to our
free checking product that was introduced in 2004. Also, as interest rates rise,
the earnings credit on business accounts offsets more of the service charge
income. Other Deposit Account Related Fees, which primarily consists of NSF and
Stop Payment fees increased $87,000, or 6.9%. Origination Fees and Gains on
Mortgage Loans Sold decreased as the housing market activity slowed considerably
in southeast Michigan. Bank Owned Life Insurance earnings increased due to an
increase in the investment in BOLI from $36.0 million as of September 30, 2005
to $39.4 million at September 30, 2006. Other income increased due to increased
ATM and debit card activity.

Other Expenses - Total non interest expenses increased $395,000 or 4.4% compared
to the third quarter of 2005. Salaries and Employee Benefits increased $360,000,
or 8.2%, as the adoption of FAS 123(R) required expensing $120,000 for our stock
based compensation plan. Excluding the FAS 123(R) cost, salaries and benefits
increased $240,000, or 5.5%. Occupancy Expense increased $82,000, or 11.3%,
compared to the third quarter of 2005. Depreciation increased $24,000, utilities
increased $33,000 and repairs and maintenance expense increased $40,000 while
insurance expense decreased $15,000. The following table compares the components
of the Other Expenses for the two quarters:


                                      -16-

<PAGE>

<TABLE>
<CAPTION>
                                       Quarters Ended
                                   ---------------------
(Dollars in Thousands)             9/30/2006   9/30/2005   % Change
                                   ---------   ---------   --------
<S>                                <C>         <C>         <C>
Business Development                 $  351      $  307      14.3%
Insurance                               396         107     270.1%
Printing and Office Supplies            190         115      65.2%
Equipment                               402         422      -4.7%
Computer and Software                   320         296       8.1%
Professional Fees                       614         286     114.7%
OREO Losses (Gains) and expenses        722       1,540     -53.1%
Other Expenses                          890         859       3.6%
                                     ------      ------     -----
                                     $3,885      $3,932      -1.2%
</TABLE>

Business Development increased primarily due to a direct mail promotion to
increase demand deposit accounts. Insurance expense increased due to a death
benefit obligation plan that provides benefits for directors. Printing and
office supplies expense increased 65.2% as the third quarter of 2005 expense was
lower than typical. Professional Fees expense included approximately $300,000
for expenses related to the loan sale. This primarily consisted of the broker's
commission and legal fees. OREO losses and expenses decreased due to the large
loss on the sale of an OREO property in the third quarter of 2005.

As a result of the above activity, the Income Before Income Taxes decreased $5.9
million to a loss of $2.3 million. The Income Tax decreased $2.2 million from an
expense of $1.1 million to a benefit of $1.1 million, and reflects an effective
tax rate of 50.6% compared to the effective tax rate of 30.0% in the third
quarter of 2005. The Net Loss of $1.1 million is a decrease of $3.7 million from
the Income of $2.6 million earned in the third quarter of 2005.

Results of Operations - Year to Date September 30, 2006 vs. September 30, 2005

Net Interest Income - A comparison of the income statements for the nine months
ended September 30, 2006 and 2005 shows a decrease of $3.0 million, or 7.7% in
Net Interest Income. Interest income on loans increased $5.5 million or 11.5% as
the average loans outstanding increased $55.9 million and the average yield on
loans increased from 6.64% to 7.00%. Interest income on investments and fed
funds sold increased $324,000 as the average amount of investments and fed funds
sold decreased $35.7 million but the yield on these assets increased from 4.67%
to 5.10%. The interest expense on deposits increased $6.1 million, or 36.7% as
average deposits increased $12.7 million and the average cost of those deposits
increased from 1.98% to 2.68%. The cost of borrowed funds increased $2.7 million
as the average amount of borrowed funds increased $23.9 million and the average
cost of the borrowings increased from 4.93% to 5.68%.

Provision for Loan Losses - The Provision for Loan Losses increased from $5.3
million in 2005 to $15.3 million in 2006. In the second quarter of 2006 the
Company experienced an increase in its already high level of non performing
assets (NPAs), requiring a $6.0 million addition to its Allowance for Loan and
Lease Losses (ALLL). In the third quarter of 2006, the Company decided to reduce
its level of NPAs by selling some of its largest problem loan relationships in
an auction. The loss on the sale required an addition of $7.3 million to the
ALLL. Net charge offs were $15.4 million in 2006, an increase of $9.1 million,
or 145.7% compared to the first nine months of 2005.

Other Income - Non interest income, excluding securities gains and losses,
increased $448,000 or 4.3% compared to the first nine months of 2005. The
following table compares the components of Other Income for the two periods:


                                      -17-

<PAGE>

<TABLE>
<CAPTION>
                                              Nine Months Ended
                                            ---------------------
(Dollars in Thousands)                      9/30/2006   9/30/2005   % Change
                                            ---------   ---------   --------
<S>                                         <C>         <C>         <C>
Trust Income                                 $ 3,192     $ 3,132        1.9%
Deposit Account Service Charges                  782         908      -13.9%
Other Deposit Account Related Fees             3,839       3,423       12.2%
Origination Fees on Loans Sold                   428         537      -20.3%
Gains (Losses) on Securities Transactions     (4,901)        273    -1895.2%
BOLI Earnings                                    885         824        7.4%
Other Income                                   1,842       1,696        8.6%
                                             -------     -------    -------
                                             $ 6,067     $10,793      -43.8%
</TABLE>

In June 2006, the Company decided to restructure a portion of its investment
portfolio. The restructuring involved selling callable federal agency debt
securities with a par value of $83.25 million and a weighted average yield of
approximately 4%. This sale was completed early in July, resulting in a loss of
$5 million. The securities were classified as Available for Sale, and because
the Company no longer had the intent to hold the securities until the fair value
recovered, the impairment was recognized through a charge to earnings in the
second quarter of 2005. After the sale was completed, the Company purchased $80
million of federal agency securities that included callable debt securities,
amortizing notes, and mortgage backed securities. These replacement securities
have a weighted average yield of approximately 6.5%, and compared to the assets
they replaced, they have higher coupons and longer call protection or
amortization of principal. These features will reduce the amount of call risk
and the amount of extension risk in the Company's investment portfolio. This
restructuring improved interest income by over $400,000 in the third quarter of
2006.

The Deposit Account Service Charges decreased as customers continue to move to
our free checking product that was introduced in 2004. Also, as interest rates
rise, the earnings credit on business accounts offsets more of the service
charge income. Other Deposit Account Related Fees, which primarily consists of
NSF and Stop Payment fees increased $416,000, or 12.2%. Origination Fees and
Gains on Mortgage Loans Sold decreased as increasing mortgage rates began to
slow refinance activity and housing market activity began to decrease. Bank
Owned Life Insurance (BOLI) income increased due to an increase in the
investment in BOLI. Other income increased due to increased ATM and debit card
activity.

Other Expenses - Total non interest expenses increased $2.0 million or 7.7%
compared to the first nine months of 2005. Salaries and Employee Benefits
increased $1.3 million, or 9.6%, as the adoption of FAS 123(R) required
expensing $360,000 for our stock based compensation plan, salaries and wages
increased $477,000, incentive plan expense increased $188,000, and benefits
increased $306,000. Occupancy Expense decreased $223,000, or 8.9%, compared to
the first nine months of 2005. In 2005 the Company accelerated the depreciation
of a parking lot that is now the site of our headquarters building. The
following table compares the components of the Other Expenses for the two nine
month periods:


                                      -18-

<PAGE>

<TABLE>
<CAPTION>
                                     Nine Months Ended
                                   ---------------------
(Dollars in Thousands)             9/30/2006   9/30/2005   % Change
                                   ---------   ---------   --------
<S>                                <C>         <C>         <C>
Business Development                $ 1,069      $  940      13.7%
Insurance                               572         396      44.4%
Printing and Office Supplies            466         475      -1.9%
Equipment                             1,264       1,309      -3.4%
Computer and Software                 1,004         938       7.0%
Professional Fees                     1,230       1,171       5.0%
OREO Losses (Gains) and expenses      2,141       1,550      38.1%
Other Expenses                        2,683       2,761      -2.8%
                                    -------      ------      ----
                                    $10,429      $9,540       9.3%
</TABLE>

Business Development increased primarily due to a direct mail promotion to
increase demand deposit accounts. Insurance expense increased due to a death
benefit obligation plan that provides benefits for directors. OREO losses and
expenses increased primarily due to the large write down of an OREO property in
the second quarter of 2006.

As a result of the above activity, the Income Before Income Taxes decreased
$19.7 million to a loss of $1.7 million. The Income Tax decreased $6.9 million
from an expense of $5.1 million to a benefit of $1.8 million, and reflects an
effective tax rate of 101.9% compared to the effective tax rate of 28.6% for the
first nine months of 2005. The Net Income of $32,000 is a decrease of $12.8
million from the Income of $12.8 million earned in the first nine months of
2005.

Liquidity and Capital

The Company has maintained sufficient liquidity to fund its loan growth and
allow for fluctuations in deposit levels. Internal sources of liquidity are
provided by the maturities of loans and securities as well as holdings of
securities Available for Sale. External sources of liquidity include a line of
credit with the Federal Home Loan Bank of Indianapolis, the Federal funds lines
that have been established with correspondent banks, and Repurchase Agreements
with money center banks that allow us to pledge securities as collateral for
borrowings. As of September 30, 2006, the Bank utilized $256.5 million of its
authorized limit of $275 million with the Federal Home Loan Bank of Indianapolis
and $16.1 million of its $110 million of federal funds lines with its
correspondent banks.

Total stockholders' equity of the Company was $140.0 million at September 30,
2006 and $151.6 million at December 31, 2005. The ratio of equity to assets was
8.8% at September 30, 2006 and 9.3% at December 31, 2005. Federal bank
regulatory agencies have set capital adequacy standards for Total Risk Based
Capital, Tier 1 Risk Based Capital, and Leverage Capital. These standards
require banks to maintain Leverage and Tier 1 ratios of at least 4% and a Total
Capital ratio of at least 8% to be adequately capitalized. The regulatory
agencies consider a bank to be well capitalized if its Total Risk Based Capital
is at least 10% of Risk Weighted Assets, Tier 1 Capital is at least 6% of Risk
Weighted Assets, and the Leverage Capital Ratio is at least 5%.

The following table summarizes the capital ratios of the Company:

<TABLE>
<CAPTION>
                                                                     Minimum to be Well
                            September 30, 2006   December 31, 2005       Capitalized
                            ------------------   -----------------   ------------------
<S>                         <C>                  <C>                 <C>
Leverage Capital                    9.0%                9.6%                 5.0%
Tier 1 Risk Based Capital          12.8%               13.7%                 6.0%
Total Risk Based Capital           14.0%               15.0%                10.0%
</TABLE>


                                      -19-

<PAGE>

At September 30, 2006 and December 31, 2005, the Bank was in compliance with the
capital guidelines and is considered "well-capitalized" under regulatory
standards.

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 2005.


                                      -20-

<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Bank faces market risk to the extent that the fair values of its financial
instruments are affected by changes in interest rates. The Bank does not face
market risk due to changes in foreign currency exchange rates, commodity prices,
or equity prices. The asset and liability management process of the Bank seeks
to monitor and manage the amount of interest rate risk. This is accomplished by
analyzing the differences in repricing opportunities for assets and liabilities,
by simulating operating results under varying interest rate scenarios, and by
estimating the change in the net present value of the Bank's assets and
liabilities due to interest rate changes.

Each month, the Asset and Liability Committee (ALCO), which includes the senior
management of the Bank, estimates the effect of interest rate changes on the
projected net interest income of the Bank. The sensitivity of the Bank's net
interest income to changes in interest rates is measured by using a computer
based simulation model to estimate the impact on earnings of a gradual increase
or decrease of 100 basis points in the prime rate. The net interest income
projections are compared to a base case projection, which assumes no changes in
interest rates.

The Bank's ALCO has established limits in the acceptable amount of interest rate
risk, as measured by the change in the Bank's projected net interest income, in
its policy. Throughout the first nine months of 2006, the estimated variability
of the net interest income was within the Bank's established policy limits.

The ALCO also monitors interest rate risk by estimating the effect of changes in
interest rates on the economic value of the Bank's equity each month. The actual
economic value of the Bank's equity is first determined by subtracting the fair
value of the Bank's liabilities from the fair value of the Bank's assets. The
fair values are determined in accordance with Statement of Financial Accounting
Standards Number 107, Disclosures about Fair Value of Financial Instruments. The
Bank estimates the interest rate risk by calculating the effect of market
interest rate shocks on the economic value of its equity. For this analysis, the
Bank assumes immediate parallel shifts of plus or minus 100 and 200 basis points
in interest rates. The discount rates used to determine the present values of
the loans and deposits, as well as the prepayment rates for the loans, are based
on Management's expectations of the effect of the rate shock on the market for
loans and deposits.

The Bank's ALCO has established limits in the acceptable amount of interest rate
risk, as measured by the change in economic value of the Bank's equity, in its
policy. Throughout the first nine months of 2006, the estimated variability of
the economic value of equity was within the Bank's established policy limits.

The Bank's interest rate risk, as measured by the net interest income and
economic value of equity simulations, has not changed significantly from
December 31, 2005.

ITEM 4. CONTROLS AND PROCEDURES

The Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Company's Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures as of
September 30, 2006, pursuant to Exchange Act Rule 13a-15. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures were effective as of
September 30, 2006, in alerting them in a timely manner to material information
relating to the Company (including its consolidated subsidiaries) required to be
included in the Company's periodic SEC filings.


                                      -21-

<PAGE>

There was no change in the Company's internal control over financial reporting
that occurred during the Company's fiscal quarter ended September 30, 2006, that
has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

MBT Financial Corp. and its subsidiaries are not a party to, nor is any of their
property the subject of any material legal proceedings other than ordinary
routine litigation incidental to their respective businesses, nor are any such
proceedings known to be contemplated by governmental authorities.

ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors disclosed by the Company
in its Report on Form 10-K for the fiscal year ended December 31, 2005.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The Company has a stock repurchase program which it publicly announced on
January 5, 2006. On that date, the Board of Directors authorized the repurchase
of 2 million of the Company's common shares, which authorization will expire on
December 31, 2006. The Company did not repurchase any of its stock during the
three months ended September 30, 2006:

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

No matters to be reported.

ITEM 6. EXHIBITS

The following exhibits are filed as a part of this report:

     3.1  Restated Articles of Incorporation of MBT Financial Corp. Previously
          filed as Exhibit 3.1 to MBT Financial Corp.'s Form 10-K for its fiscal
          year ended December 31, 2000.

     3.2  Amended and Restated Bylaws of MBT Financial Corp. Previously filed as
          Exhibit 3.2 to MBT Financial Corp.'s Form 10-K for its fiscal year
          ended December 31, 2004.

     31.1 Certification by Chief Executive Officer required by Securities and
          Exchange Commission Rule 13a-14.

     31.2 Certification by Chief Financial Officer required by Securities and
          Exchange Commission Rule 13a-14.


                                      -22-

<PAGE>

     32.1 Certification by Chief Executive Officer pursuant to 18 U.S.C. Section
          1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of
          2002.

     32.2 Certification by Chief Financial Officer pursuant to 18 U.S.C. Section
          1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of
          2002.


                                      -23-

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                        MBT Financial Corp.
                                        (Registrant)


November 8, 2006                        By /s/ H. Douglas Chaffin
Date                                       -------------------------------------
                                           H. Douglas Chaffin
                                           President & Chief Executive Officer


November 8, 2006                        By /s/ John L. Skibski
Date                                       -------------------------------------
                                           John L. Skibski
                                           Executive Vice President and
                                           Chief Financial Officer


                                      -24-

<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit Number   Description of Exhibits
--------------   -----------------------
<S>              <C>
3.1              Restated Articles of Incorporation of MBT Financial Corp.
                 Previously filed as Exhibit 3.1 to MBT Financial Corp.'s Form
                 10-K for its fiscal year ended December 31, 2000.

3.2              Amended and Restated Bylaws of MBT Financial Corp. Previously
                 filed as Exhibit 3.2 to MBT Financial Corp.'s Form 10-K for its
                 fiscal year ended December 31, 2004.

31.1             Certification by Chief Executive Officer required by Securities
                 and Exchange Commission Rule 13a-14.

31.2             Certification by Chief Financial Officer required by Securities
                 and Exchange Commission Rule 13a-14.

32.1             Certification by Chief Executive Officer pursuant to 18 U.S.C.
                 Section 1350, as enacted pursuant to Section 906 of the
                 Sarbanes-Oxley Act of 2002.

32.2             Certification by Chief Executive Officer pursuant to 18 U.S.C.
                 Section 1350, as enacted pursuant to Section 906 of the
                 Sarbanes-Oxley Act of 2002.
</TABLE>