##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2009
 Or
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Commission File Number: 000-30973
 MBT FINANCIAL CORP.
  Michigan
    
    38-3516922(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 102 E. Front Street
Monroe, Michigan 48161
 (734) 241-3431
 þ o
 o o
  Large accelerated filer o
    
    Accelerated Filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
 .




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TABLE OF CONTENTS  Part I Financial InformationItem 1. Financial StatementsItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3.Quantitative and Qualitative Disclosures about Market RiskItem 4.Controls and ProceduresPart II Other InformationItem 1.Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales of Equity Securities and Use of Proceeds.Item 3. Defaults Upon Senior SecuritiesItem 4. Submission of Matters to a Vote of Security HoldersItem 5. Other InformationItem 6. ExhibitsSignaturesExhibit IndexEX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  
 Part I Financial Information
 
 Item 1.
    
    Financial Statements
 MBT FINANCIAL CORP.
 June 30, 2009Dollars in thousands
    
    (Unaudited)
    
    
    December 31, 2008ASSETSCash and Cash EquivalentsCash and due from banksNon-interest bearing
    
    $
    18,047
    
    
    $
    24,463Interest bearing
    
    
    5,513
    
    
    
    26,323Total cash and cash equivalents
    
    
    23,560
    
    
    
    50,786Securities
- Held to Maturity
    
    
    40,578
    
    
    
    46,840Securities
- Available for Sale
    
    
    351,473
    
    
    
    406,117Federal Home
Loan Bank stock - at cost
    
    
    13,086
    
    
    
    13,086Loans held for sale
    
    
    825
    
    
    
    784Loans - Net
    
    
    885,656
    
    
    
    922,420Accrued interest receivable and other assets
    
    
    46,517
    
    
    
    43,973Bank Owned Life Insurance
    
    
    47,592
    
    
    
    45,488Premises and
Equipment - Net
    
    
    32,295
    
    
    
    32,907Total assets
    
    $
    1,441,582
    
    
    $
    1,562,401LIABILITIESDeposits:Non-interest bearing
    
    $
    128,254
    
    
    $
    144,585Interest-bearing
    
    
    911,225
    
    
    
    991,493Total deposits
    
    
    1,039,479
    
    
    
    1,136,078Federal Home Loan Bank advances
    
    
    248,500
    
    
    
    261,500Repurchase agreements
    
    
    30,000
    
    
    
    30,000Interest payable and other liabilities
    
    
    13,593
    
    
    
    13,846Total liabilities
    
    
    1,331,572
    
    
    
    1,441,424STOCKHOLDERS EQUITYCommon stock
(no par value; 30,000,000 shares authorized, 16,178,121 and 16,148,482 shares issued and
outstanding)
    
    
    496
    
    
    
    321Retained Earnings
    
    
    115,832
    
    
    
    122,896Accumulated other comprehensive loss
    
    
    (6,318
    )
    
    
    (2,240
    )Total stockholders equity
    
    
    110,010
    
    
    
    120,977Total liabilities and
stockholders equity
    
    $
    1,441,582
    
    
    $
    1,562,401
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##### Table of Contents



MBT FINANCIAL CORP.
  Three Months Ended June 30,Dollars in thousands, except per share data
    
    2009
    
    
    2008Interest IncomeInterest and fees on loans
    
    $
    13,165
    
    
    $
    15,771Interest on investment securities-Tax-exempt
    
    
    865
    
    
    
    818Taxable
    
    
    3,828
    
    
    
    4,798Interest on balances due from banks
    
    
    12
    
    
    
    Total interest income
    
    
    17,870
    
    
    
    21,387Interest ExpenseInterest on deposits
    
    
    4,582
    
    
    
    6,368Interest on borrowed funds
    
    
    3,103
    
    
    
    3,892Total interest expense
    
    
    7,685
    
    
    
    10,260Net Interest Income
    
    
    10,185
    
    
    
    11,127Provision For Loan Losses
    
    
    8,000
    
    
    
    2,700Net Interest Income AfterProvision For Loan Losses
    
    
    2,185
    
    
    
    8,427Other IncomeIncome from wealth management services
    
    
    906
    
    
    
    1,119Service charges and other fees
    
    
    1,432
    
    
    
    1,586Net gain on sales of securities
    
    
    50
    
    
    
    23Origination fees on mortgage loans sold
    
    
    122
    
    
    
    91Bank owned life insurance income
    
    
    296
    
    
    
    275Other
    
    
    824
    
    
    
    764Total other income
    
    
    3,630
    
    
    
    3,858Other ExpensesSalaries and employee benefits
    
    
    5,400
    
    
    
    5,441Occupancy expense
    
    
    727
    
    
    
    916Equipment expense
    
    
    771
    
    
    
    848Marketing expense
    
    
    279
    
    
    
    356Professional fees
    
    
    409
    
    
    
    455Collection expenses
    
    
    101
    
    
    
    95Net loss on other real estate owned
    
    
    4,174
    
    
    
    354Other real estate owned expenses
    
    
    467
    
    
    
    432FDIC Deposit Insurance Assessment
    
    
    1,250
    
    
    
    136Other
    
    
    1,011
    
    
    
    1,130Total other expenses
    
    
    14,589
    
    
    
    10,163Income (Loss) Before Income Taxes
    
    
    (8,774
    )
    
    
    2,122Income Tax Expense (Benefit)
    
    
    (3,401
    )
    
    
    404Net Income (Loss)
    
    $
    (5,373
    )
    
    $
    1,718Basic Earnings (Loss) Per Common Share
    
    $
    (0.33
    )
    
    $
    0.11Diluted Earnings (Loss) Per Common Share
    
    $
    (0.33
    )
    
    $
    0.11Common Stock Dividends Declared Per Share
    
    $
    0.01
    
    
    $
    0.18
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MBT FINANCIAL CORP.
 Six Months Ended June 30,Dollars in thousands, except per share data
    
    2009
    
    
    2008Interest IncomeInterest and fees on loans
    
    $
    26,765
    
    
    $
    32,199Interest on investment securities-Tax-exempt
    
    
    1,742
    
    
    
    1,633Taxable
    
    
    8,328
    
    
    
    9,754Interest on balances due from banks
    
    
    27
    
    
    
    Interest on federal funds sold
    
    
    
    
    
    
    1Total interest income
    
    
    36,862
    
    
    
    43,587Interest ExpenseInterest on deposits
    
    
    10,106
    
    
    
    13,859Interest on borrowed funds
    
    
    6,358
    
    
    
    8,148Total interest expense
    
    
    16,464
    
    
    
    22,007Net Interest Income
    
    
    20,398
    
    
    
    21,580Provision For Loan Losses
    
    
    12,200
    
    
    
    3,900Net Interest Income AfterProvision For Loan Losses
    
    
    8,198
    
    
    
    17,680Other IncomeIncome from trust services
    
    
    1,820
    
    
    
    2,246Service charges and other fees
    
    
    2,788
    
    
    
    3,112Net gain on sales of securities
    
    
    656
    
    
    
    48Other Than Temporary Impairments on securities
    
    
    (6,400
    )
    
    
    Portion of loss recognized in other comprehensive income
    
    
    5,631
    
    
    
    Origination fees on mortgage loans sold
    
    
    231
    
    
    
    284Bank Owned Life Insurance income
    
    
    665
    
    
    
    630Other
    
    
    1,570
    
    
    
    1,500Total other income
    
    
    6,961
    
    
    
    7,820Other ExpensesSalaries and employee benefits
    
    
    10,834
    
    
    
    11,023Occupancy expense
    
    
    1,641
    
    
    
    1,911Equipment expense
    
    
    1,619
    
    
    
    1,676Marketing expense
    
    
    521
    
    
    
    597Professional fees
    
    
    867
    
    
    
    924Collection expense
    
    
    564
    
    
    
    427Net loss on other real estate
    
    
    6,030
    
    
    
    389Other real estate owned expense
    
    
    766
    
    
    
    588FDIC deposit insurance assessment
    
    
    1,686
    
    
    
    168Other
    
    
    2,058
    
    
    
    2,158Total other expenses
    
    
    26,586
    
    
    
    19,861Income (Loss) Before Income Taxes
    
    
    (11,427
    )
    
    
    5,639Income Tax Expense (Benefit)
    
    
    (4,687
    )
    
    
    1,274Net Income (Loss)
    
    $
    (6,740
    )
    
    $
    4,365Basic Earnings (Loss) Per Common Share
    
    $
    (0.42
    )
    
    $
    0.27Diluted Earnings (Loss) Per Common Share
    
    $
    (0.42
    )
    
    $
    0.27Common Stock Dividends Declared Per Share
    
    $
    0.02
    
    
    $
    0.36
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MBT FINANCIAL CORP.
 Six Months Ended June 30,Dollars in thousands
    
    2009
    
    
    2008Cash Flows from Operating ActivitiesNet Income (Loss)
    
    $
    (6,740
    )
    
    $
    4,365Adjustments to reconcile net income (loss) to net cash from operating activitiesProvision for loan losses
    
    
    12,200
    
    
    
    3,900Depreciation
    
    
    1,135
    
    
    
    1,454(Increase) decrease in net deferred Federal income tax asset
    
    
    (4,302
    )
    
    
    239Net (accretion) amortization of investment premium and discount
    
    
    107
    
    
    
    15Writedowns of Other Real Estate Owned
    
    
    5,201
    
    
    
    Net increase (decrease) in interest payable and other liabilities
    
    
    (589
    )
    
    
    175Net increase in interest receivable and other assets
    
    
    (3,241
    )
    
    
    (4,728
    )Equity based compensation expense
    
    
    72
    
    
    
    135Net gain on sale/settlement of securities
    
    
    (656
    )
    
    
    (48
    )Other Than Temporary Impairment of investment securities
    
    
    769
    
    
    
    Increase in cash surrender value of life insurance
    
    
    (665
    )
    
    
    (630
    )Net cash provided by operating activities
    
    $
    3,291
    
    
    $
    4,877Cash Flows from Investing ActivitiesProceeds from maturities and redemptions of investment securities held to maturity
    
    $
    8,105
    
    
    $
    6,879Proceeds from maturities and redemptions of investment securities available for sale
    
    
    100,201
    
    
    
    153,865Proceeds from sales of investment securities available for sale
    
    
    52,589
    
    
    
    2,989Net decrease in loans
    
    
    24,523
    
    
    
    6,391Proceeds from sales of other real estate owned
    
    
    3,226
    
    
    
    1,548Proceeds from sales of other assets
    
    
    112
    
    
    
    96Purchase of investment securities held to maturity
    
    
    (1,837
    )
    
    
    (150
    )Purchase of Bank Owned Life Insurance
    
    
    (1,439
    )
    
    
    Purchase of investment securities available for sale
    
    
    (104,310
    )
    
    
    (164,903
    )Purchase of bank premises and equipment
    
    
    (576
    )
    
    
    (967
    )Net cash provided by investing activities
    
    $
    80,594
    
    
    $
    5,748Cash Flows from Financing ActivitiesNet decrease in deposits
    
    $
    (96,599
    )
    
    $
    (44,210
    )Net increase in short term borrowings
    
    
    
    
    
    
    41,200Net decrease in securities sold under agreements to repurchase
    
    
    
    
    
    
    (5,000
    )Net decrease in Federal Home Loan Bank borrowings
    
    
    (13,000
    )
    
    
    Proceeds from issuance of common stock
    
    
    103
    
    
    
    64Dividends paid
    
    
    (1,615
    )
    
    
    (5,806
    )Net cash used for financing activities
    
    $
    (111,111
    )
    
    $
    (13,752
    )Net Decrease In Cash and Cash Equivalents
    
    $
    (27,226
    )
    
    $
    (3,127
    )Cash and Cash Equivalents at Beginning Of Period
    
    
    50,786
    
    
    
    25,113Cash And Cash Equivalents At End Of Period
    
    $
    23,560
    
    
    $
    21,986
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MBT FINANCIAL CORP.
 AccumulatedOtherCommon
    
    
    Retained
    
    
    ComprehensiveDollars in thousands
    
    Stock
    
    
    Earnings
    
    
    Income (Loss)
    
    
    TotalBalance - January 1, 2009
    
    $
    321
    
    
    $
    122,896
    
    
    $
    (2,240
    )
    
    $
    120,977Issuance of Common Stock (38,795 shares)Restricted stock awards (15,000 shares)
    
    
    45
    
    
    
    
    
    
    
    
    
    
    
    45Other stock issued (23,795 shares)
    
    
    58
    
    
    
    
    
    
    
    
    
    
    
    58Equity Compensation
    
    
    72
    
    
    
    
    
    
    
    
    
    
    
    72Dividends declared ($0.02 per share)
    
    
    
    
    
    
    (324
    )
    
    
    
    
    
    
    (324
    )Comprehensive income:Net income (loss)
    
    
    
    
    
    
    (6,740
    )
    
    
    
    
    
    
    (6,740
    )Change in
net unrealized loss on securities available for sale -  Net of tax effect of $1,241
    
    
    
    
    
    
    
    
    
    
    (2,306
    )
    
    
    (2,306
    )Change in
net unrealized loss on securities available for sale for which a
portion of an other-than-temporary impairment has been recognized in
earnings - Net of tax effect of $1,068
    
    
    
    
    
    
    
    
    
    
    (1,983
    )
    
    
    (1,983
    )Reclassification
adjustment for losses included in net income - Net of tax effect of $(39)
    
    
    
    
    
    
    
    
    
    
    73
    
    
    
    73Change in
postretirement benefit obligation Net of tax effect of $(74)
    
    
    
    
    
    
    
    
    
    
    138
    
    
    
    138Total Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,818
    )Balance -  June 30, 2009
    
    $
    496
    
    
    $
    115,832
    
    
    $
    (6,318
    )
    
    $
    110,010
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MBT FINANCIAL CORP.
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
              -7-




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##### Table of Contents



2009
    
    2008BasicNet income (loss)
    
    $
    (5,373,000
    )
    
    $
    1,718,000Less preferred dividends
    
    
    
    
    
    
    Net income (loss) applicable to common stock
    
    $
    (5,373,000
    )
    
    $
    1,718,000Average common shares outstanding
    
    
    16,182,528
    
    
    
    16,130,806Earnings (loss) per common share - basic
    
    $
    (0.33
    )
    
    $
    0.11
 2009
    
    2008DilutedNet income
    
    $
    (5,373,000
    )
    
    $
    1,718,000Less preferred dividends
    
    
    
    
    
    
    Net income applicable to common stock
    
    $
    (5,373,000
    )
    
    $
    1,718,000Average common shares outstanding
    
    
    16,182,528
    
    
    
    16,130,806Stock option adjustment
    
    
    
    
    
    
    31,375Average common shares outstanding - diluted
    
    
    16,182,528
    
    
    
    16,162,181Earnings per common share - diluted
    
    $
    (0.33
    )
    
    $
    0.11
  -9-




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##### Table of Contents



2009
    
    2008BasicNet income (loss)
    
    $
    (6,740,000
    )
    
    $
    4,365,000Less preferred dividends
    
    
    
    
    
    
    Net income (loss) applicable to common stock
    
    $
    (6,740,000
    )
    
    $
    4,365,000Average common shares outstanding
    
    
    16,174,231
    
    
    
    16,128,926Earnings (loss) per common share - basic
    
    $
    (0.42
    )
    
    $
    0.27
 2009
    
    2008DilutedNet income (loss)
    
    $
    (6,740,000
    )
    
    $
    4,365,000Less preferred dividends
    
    
    
    
    
    
    Net income (loss) applicable to common stock
    
    $
    (6,740,000
    )
    
    $
    4,365,000Average common shares outstanding
    
    
    16,174,231
    
    
    
    16,128,926Stock option adjustment
    
    
    
    
    
    
    31,375Average common shares outstanding - diluted
    
    
    16,174,231
    
    
    
    16,160,301Earnings (loss) per common share - diluted
    
    $
    (0.42
    )
    
    $
    0.27
  Stock
Options
 Weighted AverageShares
    
    Exercise PriceOptions Outstanding, January 1, 2009
    
    
    541,976
    
    
    $
    17.42Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Options Outstanding, June 30, 2009
    
    
    541,976
    
    
    $
    17.42Options Exercisable, June 30, 2009
    
    
    513,646
    
    
    $
    17.54
 Restricted
Stock Unit Awards
 Three Year Cumulative Fully Diluted EPS for thePerformance Period Ending December 31, 2011
    
    Percent PSUs Vested$0.15
    
    100%$0.10
    
    75%$0.05
    
    50%
 Restricted
Stock Awards
 Stock
Only Stock Appreciation Rights (SOSARs)
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##### Table of Contents



Weighted AverageShares
    
    
    Exercise PriceSOSARs Outstanding, January 1, 2009
    
    
    99,500
    
    
    $
    8.53Granted
    
    
    141,500
    
    
    
    3.03Exercised
    
    
    
    
    
    
    Forfeited
    
    
    9,500
    
    
    
    5.06SOSARs Outstanding, June 30, 2009
    
    
    231,500
    
    
    $
    5.31SOSARs Exercisable, June 30, 2009
    
    
    35,345
    
    
    $
    8.53
     June 30,
    
    
    December 31,2009
    
    
    2008Residential real estate loans
    
    $
    413,216
    
    
    $
    439,133Non-farm, non-residential real estate loans
    
    
    351,356
    
    
    
    352,935Loans to
finance agricultural production and other loans to farmers
    
    
    9,790
    
    
    
    9,763Commercial and industrial loans
    
    
    110,182
    
    
    
    109,495Loans to
individuals for household, family, and other personal expenditures
    
    
    25,275
    
    
    
    29,901All other loans (including overdrafts)
    
    
    460
    
    
    
    384Total loans, gross
    
    
    910,279
    
    
    
    941,611Less: Deferred loan fees
    
    
    748
    
    
    
    663Total loans, net of deferred loan fees
    
    
    909,531
    
    
    
    940,948Less: Allowance for loan losses
    
    
    23,875
    
    
    
    18,528$
    885,656
    
    
    $
    922,420
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June 30,
    
    
    December 31,2009
    
    
    2008Nonaccrual loans
    
    $
    61,917
    
    
    $
    47,872Loans 90 days past due
    
    
    300
    
    
    
    93Restructured loans
    
    
    7,552
    
    
    
    5,811Total nonperforming loans
    
    $
    69,769
    
    
    $
    53,776Other real estate owned
    
    
    16,189
    
    
    
    17,156Other assets
    
    
    2,081
    
    
    
    2,055Nonperforming investment securities
    
    
    945
    
    
    
    Total nonperforming assets
    
    $
    88,984
    
    
    $
    72,987Nonperforming assets to total assets
    
    
    6.17
    %
    
    
    4.67
    %Allowance
for loan losses to nonperforming loans
    
    
    34.22
    %
    
    
    34.45
    %
   June 30, 2009
    
    
    June 30, 2008Balance beginning of quarter
    
    $
    21,753
    
    
    $
    17,683Provision for loan losses
    
    
    8,000
    
    
    
    2,700Loans charged off
    
    
    (6,334
    )
    
    
    (2,607
    )Recoveries
    
    
    456
    
    
    
    317Balance end of period
    
    $
    23,875
    
    
    $
    18,093
  June 30, 2009
    
    
    June 30, 2008Balance beginning of year
    
    $
    18,528
    
    
    $
    20,222Provision for loan losses
    
    
    12,200
    
    
    
    3,900Loans charged off
    
    
    (7,909
    )
    
    
    (6,562
    )Recoveries
    
    
    1,056
    
    
    
    533Balance end of period
    
    $
    23,875
    
    
    $
    18,093
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Held to MaturityJune 30, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueObligations
of U.S. Government Agencies
    
    $
    7
    
    
    $
    
    
    
    $
    
    
    
    $
    7Obligations
of States and Political Subdivisions
    
    
    40,571
    
    
    
    187
    
    
    
    (447
    )
    
    
    40,311$
    40,578
    
    
    $
    187
    
    
    $
    (447
    )
    
    $
    40,318
 Available for SaleJune 30, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueObligations
of U.S. Government Agencies
    
    $
    274,014
    
    
    $
    6,561
    
    
    $
    (590
    )
    
    $
    279,985Obligations
of States and Political Subdivisions
    
    
    45,240
    
    
    
    531
    
    
    
    (456
    )
    
    
    45,315Trust Preferred CDO Securities
    
    
    24,311
    
    
    
    
    
    
    
    (10,701
    )
    
    
    13,610Corporate Debt Securities
    
    
    11,756
    
    
    
    
    
    
    
    (2,241
    )
    
    
    9,515Other Securities
    
    
    2,974
    
    
    
    74
    
    
    
    
    
    
    
    3,048$
    358,295
    
    
    $
    7,166
    
    
    $
    (13,988
    )
    
    $
    351,473
 Held to MaturityDecember 31, 2008Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueObligations
of U.S. Government Agencies
    
    $
    7
    
    
    $
    
    
    
    $
    
    
    
    $
    7Obligations
of States and Political Subdivisions
    
    
    46,833
    
    
    
    214
    
    
    
    (1,011
    )
    
    
    46,036$
    46,840
    
    
    $
    214
    
    
    $
    (1,011
    )
    
    $
    46,043
 -13-




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##### Table of Contents



Available for SaleDecember 31, 2008Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueObligations
of U.S. Government Agencies
    
    $
    322,767
    
    
    $
    6,915
    
    
    $
    (11
    )
    
    $
    329,671Obligations
of States and Political Subdivisions
    
    
    40,999
    
    
    
    541
    
    
    
    (426
    )
    
    
    41,114Trust Preferred CDO Securities
    
    
    25,132
    
    
    
    
    
    
    
    (5,761
    )
    
    
    19,371Corporate Debt Securities
    
    
    15,170
    
    
    
    
    
    
    
    (1,654
    )
    
    
    13,516Other Securities
    
    
    2,386
    
    
    
    59
    
    
    
    
    
    
    
    2,445$
    406,454
    
    
    $
    7,515
    
    
    $
    (7,852
    )
    
    $
    406,117
  June 30, 2009Less than 12 months
    
    
    12 months or longer
    
    
    TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossAggregate
    
    
    Unrealized
    
    
    Aggregate
    
    
    Unrealized
    
    
    Aggregate
    
    
    UnrealizedFair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesObligations
of United States Government Agencies
    
    $
    43,790
    
    
    $
    590
    
    
    $
    
    
    
    $
    
    
    
    $
    43,790
    
    
    $
    590Obligations
of States and Political Subdivisions
    
    
    13,009
    
    
    
    402
    
    
    
    13,498
    
    
    
    501
    
    
    
    26,507
    
    
    
    903Trust Preferred CDO Securities
    
    
    
    
    
    
    
    
    
    
    13,610
    
    
    
    10,701
    
    
    
    13,610
    
    
    
    10,701Corporate Debt Securities
    
    
    878
    
    
    
    67
    
    
    
    8,638
    
    
    
    2,174
    
    
    
    9,516
    
    
    
    2,241$
    57,677
    
    
    $
    1,059
    
    
    $
    35,746
    
    
    $
    13,376
    
    
    $
    93,423
    
    
    $
    14,435
 December 31, 2008Less than 12 months
    
    
    12 months or longer
    
    
    TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossAggregate
    
    
    Unrealized
    
    
    Aggregate
    
    
    Unrealized
    
    
    Aggregate
    
    
    UnrealizedFair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesObligations
of United States Government Agencies
    
    $
    8,791
    
    
    $
    4
    
    
    $
    1,500
    
    
    $
    7
    
    
    $
    10,291
    
    
    $
    11Obligations
of States and Political Subdivisions
    
    
    20,707
    
    
    
    1,211
    
    
    
    3,878
    
    
    
    226
    
    
    
    24,585
    
    
    
    1,437Trust Preferred CDO Securities
    
    
    6,605
    
    
    
    2,474
    
    
    
    12,766
    
    
    
    3,287
    
    
    
    19,371
    
    
    
    5,761Corporate Debt Securities
    
    
    12,516
    
    
    
    1,654
    
    
    
    
    
    
    
    
    
    
    
    12,516
    
    
    
    1,654$
    48,619
    
    
    $
    5,343
    
    
    $
    18,144
    
    
    $
    3,520
    
    
    $
    66,763
    
    
    $
    8,863
  -14-




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-15-




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##### Table of Contents



June 30, 2009
    
    
    December 31, 2008Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    EstimatedValue
    
    
    Fair Value
    
    
    Value
    
    
    Fair ValueFinancial Assets:Cash and due from banks
    
    $
    23,560
    
    
    $
    23,560
    
    
    $
    50,786
    
    
    $
    50,786Securities
    
    
    392,051
    
    
    
    391,791
    
    
    
    452,957
    
    
    
    452,160Federal Home Loan Bank Stock
    
    
    13,086
    
    
    
    13,086
    
    
    
    13,086
    
    
    
    13,086Loans, net
    
    
    885,656
    
    
    
    889,561
    
    
    
    922,420
    
    
    
    953,267Financial Liabilities:Demand, NOW,
savings and money market savings deposits
    
    
    592,390
    
    
    
    592,390
    
    
    
    621,762
    
    
    
    621,762Other time deposits
    
    
    447,089
    
    
    
    455,601
    
    
    
    514,316
    
    
    
    521,272Borrowed fundsVariable Rate FHLB Advances
    
    
    110,000
    
    
    
    117,580
    
    
    
    123,000
    
    
    
    131,491Fixed Rate FHLB Advances
    
    
    8,500
    
    
    
    8,649
    
    
    
    8,500
    
    
    
    8,800Putable FHLB Advances
    
    
    130,000
    
    
    
    136,033
    
    
    
    130,000
    
    
    
    138,870Repurchase Agreements
    
    
    30,000
    
    
    
    35,075
    
    
    
    30,000
    
    
    
    33,840
   -16-




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##### Table of Contents



Quoted Prices
    
    
    
    
    
    Significantin Active Markets
    
    
    Significant Other
    
    
    Unobservablefor Identical
    
    
    Observable Inputs
    
    
    Inputs
    
    
    Balance at JuneAssets (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    30, 2009Investment
Securities - Available for Sale
    
    $
    291,147
    
    
    $
    46,716
    
    
    $
    13,610
    
    
    $
    351,473
  InvestmentSecurities -Available for SaleBalance at December 31, 2008
    
    $
    19,746Total realized and unrealized gains (losses) included in income
    
    
    (769
    )Total unrealized gains (losses) included in other
comprehensive income
    
    
    (5,367
    )Net purchases, sales, calls and maturities
    
    
    Net transfers in/out of Level 3
    
    
    Balance at June 30, 2009
    
    $
    13,610
     -17-




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##### Table of Contents



Quoted Prices inActive Markets for
    
    
    Significant Other
    
    
    Significant
    
    
    Total Losses for
    
    
    Total Losses forBalance at
    
    
    Identical Assets
    
    
    Observable Inputs
    
    
    Unobservable Inputs
    
    
    the three months
    
    
    the six monthsJune 30, 2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    ended June 30, 2009
    
    
    ended June 30, 2009Impaired loans
accounted for under
FAS 114
    
    $
    53,574
    
    
    $
    
    
    
    $
    
    
    
    $
    53,574
    
    
    $
    3,162
    
    
    $
    6,670Other Real Estate Owned
    
    $
    16,189
    
    
    $
    
    
    
    $
    16,189
    
    
    $
    
    
    
    $
    4,174
    
    
    $
    6,030
      Contractual AmountJune 30,
    
    
    December 31,2009
    
    
    2008Commitments to extend credit:Unused portion of commercial lines of credit
    
    $
    63,439
    
    
    $
    62,537Unused portion of credit card lines of credit
    
    
    5,751
    
    
    
    5,872Unused portion of home equity lines of credit
    
    
    17,229
    
    
    
    20,200Standby letters of credit and financial guarantees written
    
    
    6,279
    
    
    
    7,297All other off-balance sheet assets
    
    
    5,144
    
    
    
    3,682
  -18-




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Introduction
     -19-




---



##### Table of Contents



Critical Accounting Policies
  Recently Adopted Accounting Pronouncements
 ,
 Financial Condition
  -20-




---



##### Table of Contents



Results of Operations  Second Quarter 2009 vs. Second Quarter 2008
   -21-




---



##### Table of Contents



Results of Operations  Six Months Ended June 30, 2009 vs. June 30, 2008
   -22-




---



##### Table of Contents



Cash Flows
  Liquidity and Capital
  -23-




---



##### Table of Contents



Minimum to Qualify asActual
    
    
    Well CapitalizedAmount
    
    
    Ratio
    
    
    Amount
    
    RatioAs of June 30, 2009:Total Capital to Risk-Weighted AssetsConsolidated
    
    $
    129,791
    
    
    
    11.93
    %
    
    $
    108,796
    
    
    
    10
    %Monroe Bank & Trust
    
    
    128,647
    
    
    
    11.83
    %
    
    
    108,703
    
    
    
    10
    %Tier 1 Capital to Risk-Weighted AssetsConsolidated
    
    
    116,028
    
    
    
    10.66
    %
    
    
    65,277
    
    
    
    6
    %Monroe Bank & Trust
    
    
    114,895
    
    
    
    10.57
    %
    
    
    65,222
    
    
    
    6
    %Tier 1 Capital to Average AssetsConsolidated
    
    
    116,028
    
    
    
    7.91
    %
    
    
    73,381
    
    
    
    5
    %Monroe Bank & Trust
    
    
    114,895
    
    
    
    7.83
    %
    
    
    73,337
    
    
    
    5
    %
 Minimum to Qualify asActual
    
    
    Well CapitalizedAmount
    
    
    Ratio
    
    
    Amount
    
    
    RatioAs of December 31, 2008:Total Capital to Risk-Weighted AssetsConsolidated
    
    $
    136,286
    
    
    
    12.74
    %
    
    $
    106,980
    
    
    
    10
    %Monroe Bank & Trust
    
    
    134,853
    
    
    
    12.62
    %
    
    
    106,895
    
    
    
    10
    %Tier 1 Capital to Risk-Weighted AssetsConsolidated
    
    
    122,820
    
    
    
    11.48
    %
    
    
    64,188
    
    
    
    6
    %Monroe Bank & Trust
    
    
    121,398
    
    
    
    11.36
    %
    
    
    64,137
    
    
    
    6
    %Tier 1 Capital to Average AssetsConsolidated
    
    
    122,820
    
    
    
    7.82
    %
    
    
    78,543
    
    
    
    5
    %Monroe Bank & Trust
    
    
    121,398
    
    
    
    7.73
    %
    
    
    78,495
    
    
    
    5
    %
   -24-




---



##### Table of Contents



Forward-Looking Statements
   
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
    -25-




---



##### Table of Contents



Item 4. Controls and Procedures
   
 Part II Other Information
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities
  -26-




---



##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
               1.
    
    To elect a Board of Directors for the ensuing year;2.
    
    To transact such other business as may properly come before the meeting or any
adjournment thereof.
   WithholdFor
    
    
    AuthorityPeter H. Carlton
    
    
    11,134,854
    
    
    
    2,422,895H. Douglas Chaffin
    
    
    11,031,438
    
    
    
    2,526,311Joseph S. Daly
    
    
    9,871,357
    
    
    
    3,686,392Edwin L. Harwood
    
    
    12,316,832
    
    
    
    1,240,917Thomas M. Huner
    
    
    12,109,276
    
    
    
    1,448,473Rocque E. Lipford
    
    
    8,657,637
    
    
    
    4,900,112William D. McIntyre, Jr.
    
    
    10,220,790
    
    
    
    3,336,959Michael J. Miller
    
    
    11,080,327
    
    
    
    2,477,422Debra J. Shah
    
    
    10,744,431
    
    
    
    2,813,318John L. Skibski
    
    
    12,149,292
    
    
    
    1,408,457Philip P. Swy
    
    
    12,033,803
    
    
    
    1,523,946Karen M. Wilson
    
    
    10,739,996
    
    
    
    2,817,753
 
 Item 5. Other Information
  -27-




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##### Table of Contents



Item 6. Exhibits
  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-Q for its quarter ended March 31, 2008.31.1
    
    
    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 Financial Officer pursuant to 18 U.S.C. Section 1350, as
enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 -28-




---



##### Table of Contents



Signatures
  MBT Financial
Corp.(Registrant)August 7,
2009
    
    
    
    By
    
    /s/ H. Douglas ChaffinDate
    
    
    
    
    
    H. Douglas Chaffin
President & Chief Executive OfficerAugust 7,
2009
    
    
    
    By
    
    /s/ John L. SkibskiDate
    
    
    
    
    
    John L. Skibski
Executive Vice President and Chief Financial Officer
 -29-




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##### Table of Contents



Exhibit Index
 Exhibit Number
    
    Description of Exhibits3.1
    
    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-Q for its quarter ended March 31, 2008.31.1
    
    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 Financial Officer pursuant to 18
U.S.C. Section 1350, as enacted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
 -30-