##### Table of Contents



United States SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 Annual
Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
 for the fiscal year ended: December 31, 2010
 Commission File Number: 000-32561
 Middlefield Banc Corp.
 (Exact name of registrant as specified in its charter)
 Ohio
    
    34-1585111(State or other jurisdiction
    
    (IRS Employerof incorporation or organization)
    
    Identification No.)
 
 (Address, including zip code, and telephone number,
including area code, of registrants principal executive offices)
 Securities registered
pursuant to section 12(b) of the Act none
 Securities
registered pursuant to section 12(g) of the Act
 Yes
o No
þ
 Yes
o No
þ
 þ o
 o o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 o þ
  Documents Incorporated by Reference




---



TABLE OF CONTENTS  Item 1   BusinessItem 1.A   Risk FactorsItem 2  PropertiesItem 3  Legal ProceedingsItem 4  Removed and ReservedPart IIItem 5  Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesItem 6  Selected Financial DataItem 7  Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A  Quantitative and Qualitative Disclosures About Market RiskItem 8  Financial Statements and Supplementary DataItem 9  Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A  Controls and ProceduresItem 9b  Other InformationPart IIIItem 10  Directors and Executive Officers of the RegistrantItem 11  Executive CompensationItem 12  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13  Certain Relationships and Related TransactionsItem 14  Principal Accountant Fees and ServicesPart IVItem 15  Exhibits, Financial Statement SchedulesSignaturesExhibit 10.26Exhibit 13Exhibit 21Exhibit 23Exhibit 31.1Exhibit 31.2Exhibit 32    Table of Contents  
 Item 1   Business
 Middlefield Banc Corp .
 1.
    
    The Middlefield Banking Company (MBC), an Ohio-chartered commercial bank that began
operations in 1901. MBC engages in a general commercial banking business in northeastern
Ohio. The principal executive office is located at 15985 East High Street, Middlefield,
Ohio 44062-0035, and its telephone number is (440) 632-1666.2.
    
    Emerald Bank (EB), an Ohio-chartered commercial bank headquartered in Dublin, Ohio.
EB engages in a general commercial banking business in central Ohio. The principal
executive office is located at 6215 Perimeter Drive, Dublin Ohio 43017, and its telephone
number is (614) 793-4631.3.
    
    EMORECO Inc., an Ohio asset resolution corporation headquartered in Middlefield, Ohio.
EMORECO engages in the resolution and disposition of troubled assets in central Ohio. The
principal executive office is located at 15985 East High Street, Middlefield, Ohio
44062-0035, and its telephone number is (440) 632-1666.
 The Middlefield Banking Company .
   Emerald Bank
 EMORECO.
 Market Area
 Competition .
  2




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Forward-looking Statements
  
    
    the strength of the United States economy in general and the strength of the local economies in
which we conduct our operations; general economic conditions, either nationally or regionally, may
be less favorable than we expect, resulting in a deterioration in the credit quality of our loan
assets, among other things
 
    
    the effects of, and changes in, trade, monetary and fiscal policies and laws, including
interest-rate policies of the Federal Reserve Board
 
    
    inflation, interest rate, market, and monetary fluctuations
 
    
    the development and acceptance of new products and services of the Company and subsidiaries and
the perceived overall value of these products and services by users, including the features,
pricing, and quality compared to competitors products and services
 
    
    the willingness of users to substitute our products and services for those of competitors
 
    
    the impact of changes in financial services laws and regulations (including laws concerning
taxes, banking, securities, and insurance)
 
    
    changes in consumer spending and saving habits
  Lending Loan Portfolio Composition and Activity
    3




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##### Table of Contents



2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(Dollars in thousands)
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentType of loan:Commercial and industrial
    
    $
    57,501
    
    
    
    15.44
    
    
    $
    56,969
    
    
    
    16.11
    
    
    $
    66,524
    
    
    
    20.69
    
    
    $
    67,010
    
    
    
    21.65
    
    
    $
    68,496
    
    
    
    27.49Real estate construction
    
    
    15,845
    
    
    
    4.25
    
    
    
    7,837
    
    
    
    2.22
    
    
    
    7,965
    
    
    
    2.48
    
    
    
    6,704
    
    
    
    2.17
    
    
    
    2,458
    
    
    
    0.99Mortgage:Residential
    
    
    209,863
    
    
    
    56.34
    
    
    
    205,074
    
    
    
    58.00
    
    
    
    199,354
    
    
    
    61.99
    
    
    
    193,514
    
    
    
    62.53
    
    
    
    162,917
    
    
    
    65.38Commercial
    
    
    84,304
    
    
    
    22.63
    
    
    
    78,763
    
    
    
    22.27
    
    
    
    42,789
    
    
    
    13.31
    
    
    
    36,818
    
    
    
    11.90
    
    
    
    9,949
    
    
    
    3.99Consumer installment
    
    
    4,985
    
    
    
    1.34
    
    
    
    4,954
    
    
    
    1.40
    
    
    
    4,943
    
    
    
    1.53
    
    
    
    5,400
    
    
    
    1.75
    
    
    
    5,371
    
    
    
    2.16Total loans
    
    
    372,498
    
    
    
    100.00
    %
    
    
    353,597
    
    
    
    100.00
    %
    
    
    321,575
    
    
    
    100.00
    %
    
    
    309,446
    
    
    
    100.00
    %
    
    
    249,191
    
    
    
    100.00
    %Less:Allowance for loan losses
    
    
    6,221
    
    
    
    
    
    
    
    4,937
    
    
    
    
    
    
    
    3,557
    
    
    
    
    
    
    
    3,299
    
    
    
    
    
    
    
    2,849Net loans
    
    $
    366,277
    
    
    
    
    
    
    $
    348,660
    
    
    
    
    
    
    $
    318,019
    
    
    
    
    
    
    $
    306,147
    
    
    
    
    
    
    $
    246,342
  Loan Portfolio Maturity at December 31, 2010Commercialand
    
    
    Real Estate
    
    
    Mortgage
    
    
    Consumer(Dollars in thousands)
    
    Industrial
    
    
    Construction
    
    
    Residential
    
    
    Commercial
    
    
    Installment
    
    
    TotalAmount due:In one year or less
    
    $
    12,657
    
    
    $
    7,221
    
    
    $
    2,362
    
    
    $
    3,606
    
    
    $
    1,213
    
    
    $
    27,059After one year through five years
    
    
    16,675
    
    
    
    680
    
    
    
    12,921
    
    
    
    5,426
    
    
    
    3,294
    
    
    
    38,996After five years
    
    
    28,169
    
    
    
    7,944
    
    
    
    194,580
    
    
    
    75,272
    
    
    
    478
    
    
    
    306,443Total amount due
    
    $
    57,501
    
    
    $
    15,845
    
    
    $
    209,863
    
    
    $
    84,304
    
    
    $
    4,985
    
    
    $
    372,498
   4




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Fixed
    
    
    Adjustable(Dollars in thousands)
    
    Rate
    
    
    Rate
    
    
    TotalCommercial and industrial
    
    $
    25,188
    
    
    $
    32,313
    
    
    $
    57,501Real estate construction
    
    
    2,852
    
    
    
    12,993
    
    
    
    15,845Mortgage:Residential
    
    
    24,701
    
    
    
    185,162
    
    
    
    209,863Commercial
    
    
    9,839
    
    
    
    74,465
    
    
    
    84,304Consumer installment
    
    
    4,813
    
    
    
    172
    
    
    
    4,985$
    67,393
    
    
    $
    305,105
    
    
    $
    372,498
 Residential Mortgage Loans .
     Commercial and Industrial Loans and Commercial Real Estate Loans .
     accounts receivable, inventory and working capital loans    renewable operating lines of credit   loans to finance capital equipment    term business loans    short-term notes    selected guaranteed or subsidized loan programs for small businesses    loans to professionals    commercial real estate loans
    5




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Real Estate Construction
 
    
    residential construction loans to borrowers who will occupy the premises upon completion of construction,
    
    residential construction loans to builders,
    
    commercial construction loans, and
    
    real estate acquisition and development loans.
   Consumer Installment Loan .
   Loan Solicitation and Processing .
  Income from Lending Activities .
 Nonperforming Loans
   6




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Classified Assets .
    Classified Assets at December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Percent
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    Percent
    
    
    
    
    
    
    Percentof total
    
    
    
    
    
    
    of total
    
    
    
    
    
    
    of total
    
    
    
    
    
    
    of total
    
    
    
    
    
    
    of total(Dollars in thousands)
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loans
    
    
    Amount
    
    
    loansClassified loans:Special mention
    
    $
    2,868
    
    
    
    0.77
    %
    
    $
    4,322
    
    
    
    1.22
    %
    
    $
    5,134
    
    
    
    1.60
    %
    
    $
    5,302
    
    
    
    1.71
    %
    
    $
    7,394
    
    
    
    2.97
    %Substandard
    
    
    28,178
    
    
    
    7.56
    %
    
    
    18,928
    
    
    
    5.35
    %
    
    
    5,350
    
    
    
    1.66
    %
    
    
    1,029
    
    
    
    0.33
    %
    
    
    1,515
    
    
    
    0.61
    %Doubtful
    
    
    224
    
    
    
    0.06
    %
    
    
    277
    
    
    
    0.08
    %
    
    
    420
    
    
    
    0.13
    %
    
    
    835
    
    
    
    0
    
    
    
    
    
    
    
    0.00
    %Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total amount
    
    $
    31,270
    
    
    
    8.39
    %
    
    $
    23,527
    
    
    
    6.65
    %
    
    $
    10,904
    
    
    
    3.39
    %
    
    $
    7,166
    
    
    
    2.31
    %
    
    $
    8,909
    
    
    
    3.58
    %
  Investments.
  7




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Investment Portfolio Amortized Cost and Fair Value at December 31,2010
    
    
    2009
    
    
    2008Amortized
    
    
    
    
    
    Amortized
    
    
    
    
    
    Amortized(Dollars in thousands)
    
    cost
    
    

Fair value
    
    
    cost
    
    

Fair value
    
    
    cost
    
    

Fair valueAvailable for Sale:U.S. Government agency securities
    
    $
    33,332
    
    
    $
    32,603
    
    
    $
    18,657
    
    
    $
    18,330
    
    
    $
    4,377
    
    
    $
    4,504Obligations of states and political subdivisions:Taxable
    
    
    7,371
    
    
    
    7,417
    
    
    
    3,451
    
    
    
    3,375
    
    
    
    500
    
    
    
    496Tax-exempt
    
    
    69,363
    
    
    
    69,463
    
    
    
    52,752
    
    
    
    53,346
    
    
    
    44,328
    
    
    
    43,684Mortgage-backed securities
    
    
    90,026
    
    
    
    91,369
    
    
    
    60,055
    
    
    
    60,741
    
    
    
    54,568
    
    
    
    54,564Equity securities
    
    
    944
    
    
    
    920
    
    
    
    944
    
    
    
    919
    
    
    
    944
    
    
    
    1,022Total Investment Securities
    
    $
    201,036
    
    
    $
    201,772
    
    
    $
    135,859
    
    
    $
    136,711
    
    
    $
    104,717
    
    
    $
    104,270
  8




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##### Table of Contents



December 31, 2010One year or less
    
    
    More than one to five
    
    
    More than five to ten
    
    
    More than ten years
    
    
    Total investment securitiesAmortized
    
    
    Average
    
    
    Amortized
    
    
    Average
    
    
    Amortized
    
    
    Average
    
    
    Amortized
    
    
    Average
    
    
    Amortized
    
    
    Average
    
    
    Market(Dollars in thousands)
    
    cost
    
    
    yield
    
    
    cost
    
    
    yield
    
    
    cost
    
    
    yield
    
    
    cost
    
    
    yield
    
    
    cost
    
    
    yield
    
    
    valueU.S. Government agency
securities
    
    $
    
    
    
    
    
    %
    
    $
    747
    
    
    
    3.00
    %
    
    $
    1,000
    
    
    
    3.75
    %
    
    $
    31,585
    
    
    
    3.63
    %
    
    $
    33,332
    
    
    
    3.62
    %
    
    $
    32,603Obligations of
states and
political
subdivisions:Taxable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    504
    
    
    
    5.00
    
    
    
    6,867
    
    
    
    5.58
    
    
    
    7,371
    
    
    
    5.54
    
    
    
    7,417Tax-exempt **
    
    
    1,422
    
    
    
    5.25
    
    
    
    4,723
    
    
    
    5.68
    
    
    
    15,522
    
    
    
    5.86
    
    
    
    47,696
    
    
    
    6.33
    
    
    
    69,363
    
    
    
    6.16
    
    
    
    69,463Mortgage-backed
securities
    
    
    127
    
    
    
    4.23
    
    
    
    254
    
    
    
    4.13
    
    
    
    4,371
    
    
    
    5.77
    
    
    
    85,274
    
    
    
    4.10
    
    
    
    90,026
    
    
    
    4.19
    
    
    
    91,369Equity Securities
    
    
    944
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    944
    
    
    
    
    
    
    
    920Total
    
    $
    2,493
    
    
    
    3.21
    %
    
    $
    5,724
    
    
    
    5.26
    %
    
    $
    21,397
    
    
    
    5.72
    %
    
    $
    171,422
    
    
    
    4.69
    %
    
    $
    201,036
    
    
    
    4.80
    %
    
    $
    201,772
 **
    
    Tax equivalent yield
   Sources of Funds Deposit Accounts
  (Dollar amounts in thousands)
    
    Amount
    
    
    Percent of TotalWithin three months
    
    $
    11,832
    
    
    
    12.93
    %Beyond three but within six months
    
    
    8,413
    
    
    
    9.20Beyond six but within twelve months
    
    
    16,427
    
    
    
    17.96Beyond one year
    
    
    54,804
    
    
    
    59.91Total
    
    $
    91,476
    
    
    
    100.00
    %
 Borrowings
  9




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##### Table of Contents



(Dollar amounts in thousands)
    
    2010
    
    
    2009
    
    
    2008Balance at year-end
    
    $
    7,632
    
    
    $
    6,800
    
    
    $
    1,886Average balance outstanding
    
    
    7,320
    
    
    
    2,281
    
    
    
    2,967Maximum month-end balance
    
    
    8,178
    
    
    
    7,406
    
    
    
    6,058Weighted-average rate at year-end
    
    
    3.10
    %
    
    
    3.47
    %
    
    
    1.10
    %Weighted-average rate during the year
    
    
    3.40
    %
    
    
    1.50
    %
    
    
    1.55
    %
 Personnel
  Supervision and Regulation
        10




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##### Table of Contents



FDIC RegulationsCapital
    
    Adequately
    
    
    Well
    
    
    December 31,Ratios
    
    Capitalized
    
    
    Capitalized
    
    
    2010
    
    
    2009Leverage
    
    
    4.00
    %
    
    
    5.00
    %(1)
    
    
    9.45
    %
    
    
    10.29
    %Risk-Based Capital:Tier 1
    
    
    4.00
    %
    
    
    6.00
    %
    
    
    13.26
    %
    
    
    13.63
    %Total
    
    
    8.00
    %
    
    
    10.00
    %
    
    
    14.55
    %
    
    
    14.91
    %
 (1)
    
    9 percent required by MOU.
 Regulation of Bank Holding Companies Bank and Bank Holding Company Acquisitions
 
    
    directly or indirectly acquiring ownership or control of any voting
shares of another bank or bank holding company, if after the
acquisition the acquiring company would own or control more than 5%
of the shares of the other bank or bank holding company (unless the
acquiring company already owns or controls a majority of the
shares),
    
    acquiring all or substantially all of the assets of another bank, or
    
    merging or consolidating with another bank holding company.
   Nonbanking Activities
 Financial Holding Companies
 
    
    financial in nature or incidental to that financial activity, or
    
    complementary to a financial activity and that does not pose a
substantial risk to the safety and soundness of depository
institutions or the financial system generally.
  11




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##### Table of Contents




    
    acting as principal, agent, or broker for insurance,
    
    underwriting, dealing in, or making a market in securities, and
    
    providing financial and investment advice.
  Holding Company Capital and Source of Strength
  Liability of Commonly Controlled Institutions.
 Federal Deposit Insurance
    12




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##### Table of Contents



Interstate Banking and Branching
 de novo de novo de novo
 Capital Risk-Based Capital Requirements
  includes

 
    
    the allowance for loan losses, up to a maximum of 1.25% of risk-weighted assets,
    
    any qualifying perpetual preferred stock exceeding the amount includable in Tier 1 capital,
    
    mandatory convertible securities, and
    
    subordinated debt and intermediate term preferred stock, up to 50% of Tier 1 capital.
     13




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##### Table of Contents



Prompt Corrective Action
  Middlefield Banc Corp.
    
    
    The Middlefield Banking Co.
    
    
    Emerald BankDecember 31, 2010
    
    
    December 31, 2010
    
    
    December 31, 2010(Dollar amounts in thousands)
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioTotal Capital 
(to Risk-weighted Assets)Actual
    
    $
    45,424
    
    
    
    11.69
    %
    
    $
    38,335
    
    
    
    11.48
    %
    
    $
    7,340
    
    
    
    14.55
    %For Capital Adequacy Purposes
    
    
    31,075
    
    
    
    8.00
    
    
    
    26,707
    
    
    
    8.00
    
    
    
    4,036
    
    
    
    8.00To Be Well Capitalized
    
    
    38,844
    
    
    
    10.00
    
    
    
    33,383
    
    
    
    10.00
    
    
    
    5,045
    
    
    
    10.00Tier I Capital 
(to Risk-weighted Assets)Actual
    
    $
    40,552
    
    
    
    10.44
    %
    
    $
    34,241
    
    
    
    10.26
    %
    
    $
    6,691
    
    
    
    13.26
    %For Capital Adequacy Purposes
    
    
    15,537
    
    
    
    4.00
    
    
    
    13,353
    
    
    
    4.00
    
    
    
    2,018
    
    
    
    4.00To Be Well Capitalized
    
    
    23,306
    
    
    
    6.00
    
    
    
    20,030
    
    
    
    5.00
    
    
    
    3,027
    
    
    
    6.00Tier I Capital 
(to Average Assets)Actual
    
    $
    40,552
    
    
    
    6.69
    %
    
    $
    34,241
    
    
    
    6.47
    %
    
    $
    6,691
    
    
    
    9.45
    %For Capital Adequacy Purposes
    
    
    24,240
    
    
    
    4.00
    
    
    
    21,176
    
    
    
    4.00
    
    
    
    2,832
    
    
    
    4.00To Be Well Capitalized
    
    
    30,300
    
    
    
    5.00
    
    
    
    26,471
    
    
    
    5.00
    
    
    
    3,540
    
    
    
    5.00
 Limits on Dividends and Other Payments x y x y
   14




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Sarbanes-Oxley Act of 2002
   Transactions with Affiliates
 
    
    limit the extent to which a bank or its subsidiaries may lend to or engage in various other kinds of
transactions with any one affiliate to an amount equal to 10% of the institutions capital and surplus,
limiting the aggregate of covered transactions with all affiliates to 20% of capital and surplus,
    
    impose restrictions on investments by a subsidiary bank in the stock or securities of its holding company,
    
    impose restrictions on the use of a holding companys stock as collateral for loans by the subsidiary bank, and
    
    require that affiliate transactions be on terms substantially the same, or at least as favorable to the
institution or subsidiary, as those provided to a non-affiliate.
  Banking agency guidance for commercial real estate lending
  
    
    total reported loans for construction, land development, and other land represent 100%
or more of the institutions total capital, or
    
    total commercial real estate loans represent 300% or more of the institutions total
capital and the outstanding balance of the institutions commercial real estate loan
portfolio has increased by 50% or more during the prior 36 months.
  15




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Community Reinvestment Act
   Federal Home Loan Bank
  Anti-money laundering and anti-terrorism legislation
   
    
    a financial institution must establish due diligence policies, procedures, and controls
reasonably designed to detect and report money laundering through correspondent accounts
and private banking accounts,
    
    no bank may establish, maintain, administer, or manage a correspondent account in the
United States for a foreign shell bank,
    
    financial institutions must abide by Treasury Department regulations encouraging
financial institutions, their regulatory authorities, and law enforcement authorities to
share information about individuals, entities, and organizations engaged in or suspected of
engaging in terrorist acts or money laundering activities,
    
    financial institutions must follow Treasury Department regulations setting forth
minimum standards regarding customer identification. These regulations require financial
institutions to implement reasonable procedures for verifying the identity of any person
seeking to open an account, maintain records of the information used to verify the persons
identity, and consult lists of known or suspected terrorists and terrorist organizations
provided to the financial institution by government agencies,
    
    every financial institution must establish anti-money laundering programs, including the
development of internal policies and procedures, designation of a compliance officer, employee
training, and an independent audit function.
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##### Table of Contents



State Banking Regulation
 Monetary Policy
 
 Item 1.A   Risk Factors
 Risks Related to the Companys Business
 Continued negative developments in the financial industry and the domestic credit market may
adversely affect the Companys operations and results .
 There can be no assurance that recent legislative and regulatory initiatives to address
difficult market and economic conditions will stabilize the U.S. banking system
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##### Table of Contents



The Company operates in a highly competitive industry and market area
  
    
    the ability to develop, maintain, and build long-term customer relationships
based on top quality service, high ethical standards, and safe, sound assets;
    
    the ability to expand the Companys market position;
    
    the scope, relevance, and pricing of products and services offered to meet
customer needs and demands;
    
    the rate at which the Company introduces new products and services relative to
its competitors;
    
    customer satisfaction with the Companys level of service; and
    
    industry and general economic trends.
  The Company may not be able to attract and retain skilled people .
 The Company does not have the financial and other resources that larger competitors have; this
could affect its ability to compete for large commercial loan originations and its ability to offer
products and services competitors provide to customers .
 The business of banking is changing rapidly with changes in technology, which poses financial
and technological challenges to small and mid-sized institutions
  18




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##### Table of Contents



The banking industry is heavily regulated; the compliance burden to the industry is
considerable; the principal beneficiary of federal and state regulation is the public at large and
depositors, not stockholders
  Success in the banking industry requires disciplined management of lending risks .
   Changing interest rates have a direct and immediate impact on financial institutions
  19




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##### Table of Contents



A prolonged economic downturn in our market area would adversely affect our loan portfolio and
our growth prospects
 The Company could incur liabilities under federal and state environmental laws if we foreclose
on commercial properties
 Changes in accounting standards could materially impact our consolidated financial statements .
 There are risks with respect to future expansion and acquisitions or mergers
 
    
    the time and expense associated with identifying and evaluating potential
acquisitions and merger partners;
    
    using inaccurate estimates and judgments to evaluate credit, operations,
management, and market risks with respect to the target institution or assets;
    
    diluting our existing shareholders in an acquisition;
    
    the time and expense associated with evaluating new markets for expansion, hiring
experienced local management, and opening new offices;
    
    taking a significant amount of time negotiating a transaction or working on
expansion plans, resulting in managements attention being diverted from the operation
of our existing business; and
    
    the time and expense associated with integrating the operations and personnel of
the combined businesses, creating an adverse short-term effect on our results of
operations.
  Compliance with Sarbanes-Oxley Act will involve significant expenditures, and non-compliance
may adversely affect us.
  20




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##### Table of Contents



The Company utilizes the Federal Home Loan Bank as an additional source of liquidity .
  Our deposit insurance premium could be substantially higher in the future which would have an
adverse effect on future earnings
    Government regulation could restrict our ability to pay cash dividends
  21




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##### Table of Contents



Risks Associated with the Companys Common Stock
 An investment in the Companys common stock is not an insured deposit
 The Companys common stock is very thinly traded, and it is therefore susceptible to wide
price swings
  22




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##### Table of Contents



Item 2  Properties
  Location
    
    County
    
    Owned/Leased
    
    Other InformationMain Office: 
15985 East High Street
Middlefield, Ohio
    
    Geauga
    
    OwnedBranches:
West Branch
15545 West High Street
Middlefield, Ohio
    
    Geauga
    
    OwnedGarrettsville Branch
8058 State Street
Garrettsville, Ohio
    
    Portage
    
    OwnedMantua Branch
10519 South Main Street
Mantua, Ohio
    
    Portage
    
    Leased
    
    three-year lease renewed in November 2010, with option to renew for five additional consecutive three-year termsChardon Branch 
348 Center Street 
Chardon, Ohio
    
    Geauga
    
    OwnedOrwell Branch
30 South Maple Avenue
Orwell, Ohio
    
    Ashtabula
    
    OwnedNewbury Branch
11110 Kinsman Road
Newbury, Ohio
    
    Geauga
    
    Leased
    
    ten-year lease dated December 2006, with option to renew for four additional consecutive five-year termsCortland Branch
3450 Niles Cortland Road
Cortland, Ohio
    
    Trumbull
    
    OwnedEmerald Bank
6215 Perimeter Drive
Dublin, OH
    
    Franklin
    
    Leased
    
    twenty-year lease dated Febuary 2004, with the option to purchase after the tenth yearWesterville Branch
(Emerald Bank)
17 North State Street
Westerville, OH
    
    Franklin
    
    Owned
  
 Item 3  Legal Proceedings
  
 Item 4  Removed and Reserved
  23




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##### Table of Contents



Part II
 
 Item 5  Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
  Equity Compensation Plan information
  Number of
    
    
    
    
    
    
    Remaining AvailableSecurities
    
    
    
    
    
    
    for Future Issuanceto be Issued Upon
    
    
    Weighted-Average
    
    
    Under EquityExercise of
    
    
    Exercise Price of
    
    
    Compensation PlansOutstanding
    
    
    Outstanding
    
    
    (Excluding SecuritiesPlan Category
    
    Options or Rights
    
    
    Options or Rights
    
    
    Reflected in Column A)Equity compensation
plans approved by
security holders:1999 Stock Option Plan
    
    
    65,577
    
    
    
    27.87
    
    
    
    02007 Omnibus Equity Plan
    
    
    23,500
    
    
    
    23.00
    
    
    
    70,923Total
    
    
    89,077
    
    
    
    27.87
    
    
    
    70,923
 Unregistered Sales of Equity Securities and Use of Proceeds
 
 Item 6  Selected Financial Data
  
 Item 7  Managements Discussion and Analysis of Financial Condition and Results of
Operations
  
 Item 7A  Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate
Sensitivity Simulation Analysis
 
 Item 8  Financial Statements and Supplementary Data
  
 Item 9  Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
   24




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##### Table of Contents



Item 9A  Controls and Procedures
 (a)
    
    Disclosure Controls and ProceduresThe Companys management, including the Companys principal executive officer and
principal financial officer, have evaluated the effectiveness of the Companys
disclosure controls and procedures, as such term is defined in Rule 13a-15(e)
promulgated under the Securities Exchange Act of 1934, as amended, (the Exchange
Act). Based upon their evaluation, the principal executive officer and principal
financial officer concluded that, as of the end of the period covered by this report,
the Companys disclosure controls and procedures were effective for the purpose of
ensuring that the information required to be disclosed in the reports that the Company
files or submits under the Exchange Act with the Securities and Exchange Commission
(the SEC) (1) is recorded, processed, summarized and reported within the time periods
specified in the SECs rules and forms, and (2) is accumulated and communicated to the
Companys management, including its principal executive and principal financial
officers, as appropriate to allow timely decisions regarding required disclosure.(b)
    
    Internal Controls Over Financial ReportingManagements annual report on internal control over financial reporting is
incorporated herein by reference to Item 8  the Companys audited Consolidated
Financial Statements in this Annual Report on Form 10-K.
This annual report does not include an attestation report of the Companys
registered public accounting firm regarding internal control over financial
reporting. Managements report was not subject to attestation by the Companys
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only managements
report in this annual report.(c)
    
    Changes to Internal Control Over Financial ReportingThere were no changes in the Companys internal control over financial reporting during
the three months ended December 31, 2010 that have materially affected, or are
reasonable likely to materially affect, the Companys internal control over financial
reporting.
 
 Item 9b  Other Information
 
 Part III
 
 Item 10  Directors and Executive Officers of the Registrant
  
 Item 11  Executive Compensation
  
 Item 12  Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
  
 Item 13  Certain Relationships and Related Transactions
  
 Item 14  Principal Accountant Fees and Services
   25




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##### Table of Contents



Part IV
 
 Item 15  Exhibits, Financial Statement Schedules
 Financial Statements
 Index to Consolidated Financial Statements
 Consolidated Financial Statements as
 of December 31, 2010 and 2009 and for each
of the three years in the period ended December 31, 2010:Report of Independent Registered Public Accounting firmConsolidated Balance SheetsConsolidated Statements of IncomeConsolidated Statements of Changes in Stockholders EquityConsolidated Statements of Cash FlowsNotes to Consolidated Financial Statements
 Financial Statement Schedules
  Exhibits
  Exhibits Required by Item 601 of Regulation S-K
 exhibitnumber
    
    description
    
    location3.1
    
    
    Second Amended and Restated Articles of Incorporation of Middlefield Banc Corp., as amended
    
    Incorporated by reference to Exhibit 3.1 of Middlefield Banc Corp.s Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2005, filed on March 29, 20063.2
    
    
    Regulations of Middlefield Banc Corp.
    
    Incorporated by reference to Exhibit 3.2 of Middlefield Banc Corp.s registration statement on Form 10 filed on April 17, 20014.0
    
    
    Specimen stock certificate
    
    Incorporated by reference to Exhibit 4 of Middlefield Banc Corp.s registration statement on Form 10 filed on April 17, 20014.1
    
    
    Amended and Restated Trust Agreement, dated as of December 21, 2006, between Middlefield Banc Corp., as Depositor, Wilmington Trust Company, as Property trustee, Wilmington Trust Company, as Delaware Trustee, and Administrative Trustees
    
    Incorporated by reference to Exhibit 4.1 of Middlefield Banc Corp.s Form 8-K Current Report filed on December 27, 2006
  26




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##### Table of Contents



exhibitnumber
    
    description
    
    location4.2
    
    
    Junior Subordinated Indenture, dated as of December 21, 2006, between Middlefield Banc Corp. and Wilmington Trust Company
    
    Incorporated by reference to Exhibit 4.2 of Middlefield Banc Corp.s Form 8-K Current Report filed on December 27, 20064.3
    
    
    Guarantee Agreement, dated as of December 21, 2006, between Middlefield Banc Corp. and Wilmington Trust Company
    
    Incorporated by reference to Exhibit 4.3 of Middlefield Banc Corp.s Form 8-K Current Report filed on December 27, 200610.1.0
    *
    
    1999 Stock Option Plan of Middlefield Banc Corp.
    
    Incorporated by reference to Exhibit 10.1 of Middlefield Banc Corp.s registration statement on Form 10 filed on April 17, 200110.1.1
    *
    
    2007 Omnibus Equity Plan
    
    Incorporated by reference to Middlefield Banc Corp.s definitive proxy statement for the 2008 Annual Meeting of Shareholders, Appendix A, filed on April 7, 200810.2
    *
    
    Severance Agreement between Middlefield Banc Corp. and Thomas G. Caldwell, dated January 7, 2008
    
    Incorporated by reference to Exhibit 10.2 of Middlefield Banc Corp.s Form 8-K Current Report filed on January 9, 200810.3
    *
    
    Severance Agreement between Middlefield Banc Corp. and James R. Heslop, II, dated January 7, 2008
    
    Incorporated by reference to Exhibit 10.3 of Middlefield Banc Corp.s Form 8-K Current Report filed on January 9, 200810.4.0
    *
    
    Severance Agreement between Middlefield Banc Corp. and Jay P. Giles, dated January 7, 2008
    
    Incorporated by reference to Exhibit 10.4 of Middlefield Banc Corp.s Form 8-K Current Report filed on January 9, 200810.4.1
    *
    
    Severance Agreement between Middlefield Banc Corp. and Teresa M. Hetrick, dated January 7, 2008
    
    Incorporated by reference to Exhibit 10.4.1 of Middlefield Banc Corp.s Form 8-K Current Report filed on January 9, 200810.4.2
    
    
    [reserved]10.4.3
    *
    
    Severance Agreement between Middlefield Banc Corp. and Donald L. Stacy, dated January 7, 2008
    
    Incorporated by reference to Exhibit 10.4.3 of Middlefield Banc Corp.s Form 8-K Current Report filed on January 9, 200810.4.4
    *
    
    Severance Agreement between Middlefield Banc Corp. and Alfred F. Thompson Jr., dated January 7, 2008
    
    Incorporated by reference to Exhibit 10.4.4 of Middlefield Banc Corp.s Form 8-K Current Report filed on January 9, 200810.5
    
    
    Federal Home Loan Bank of Cincinnati Agreement for Advances and Security Agreement dated September 14, 2000
    
    Incorporated by reference to Exhibit 10.4 of Middlefield Banc Corp.s registration statement on Form 10 filed on April 17, 200110.6
    *
    
    Amended Director Retirement Agreement with Richard T. Coyne
    
    Incorporated by reference to Exhibit 10.6 of Middlefield Banc Corp.s Form 8-K Current Report filed on January 9, 200810.7
    *
    
    Amended Director Retirement Agreement with Frances H. Frank
    
    Incorporated by reference to Exhibit 10.7 of Middlefield Banc Corp.s Form 8-K Current Report filed on January 9, 200810.8
    *
    
    Amended Director Retirement Agreement with Thomas C. Halstead
    
    Incorporated by reference to Exhibit 10.8 of Middlefield Banc Corp.s Form 8-K Current Report filed on January 9, 200810.9
    *
    
    Director Retirement Agreement with George F. Hasman
    
    Incorporated by reference to Exhibit 10.9 of Middlefield Banc Corp.s Annual Report on Form 10-K for the Year Ended December 31, 2001, filed on March 28, 2002
  27




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##### Table of Contents



exhibitnumber
    
    description
    
    location10.10
    *
    
    Director Retirement Agreement with Donald D. Hunter
    
    Incorporated by reference to Exhibit 10.10 of Middlefield Banc Corp.s Annual Report on Form 10-K for the Year Ended December 31, 2001, filed on March 28, 200210.11
    *
    
    Director Retirement Agreement with Martin S. Paul
    
    Incorporated by reference to Exhibit 10.11 of Middlefield Banc Corp.s Annual Report on Form 10-K for the Year Ended December 31, 2001, filed on March 28, 200210.12
    *
    
    Amended Director Retirement Agreement with Donald E. Villers
    
    Incorporated by reference to Exhibit 10.12 of Middlefield Banc Corp.s Form 8-K Current Report filed on January 9, 200810.13
    *
    
    Executive Survivor Income Agreement (aka DBO agreement [death benefit only]) with Donald L. Stacy
    
    Incorporated by reference to Exhibit 10.14 of Middlefield Banc Corp.s Annual Report on Form 10-K for the Year Ended December 31, 2003, filed on March 30, 200410.14
    *
    
    DBO Agreement with Jay P. Giles
    
    Incorporated by reference to Exhibit 10.15 of Middlefield Banc Corp.s Annual Report on Form 10-K for the Year Ended December 31, 2003, filed on March 30, 200410.15
    *
    
    DBO Agreement with Alfred F. Thompson Jr.
    
    Incorporated by reference to Exhibit 10.16 of Middlefield Banc Corp.s Annual Report on Form 10-K for the Year Ended December 31, 2003, filed on March 30, 200410.16
    
    
    [reserved]10.17
    *
    
    DBO Agreement with Theresa M. Hetrick
    
    Incorporated by reference to Exhibit 10.18 of Middlefield Banc Corp.s Annual Report on Form 10-K for the Year Ended December 31, 2003, filed on March 30, 200410.18
    
    
    [reserved]10.19
    *
    
    DBO Agreement with James R. Heslop, II
    
    Incorporated by reference to Exhibit 10.20 of Middlefield Banc Corp.s Annual Report on Form 10-K for the Year Ended December 31, 2003, filed on March 30, 200410.20
    *
    
    DBO Agreement with Thomas G. Caldwell
    
    Incorporated by reference to Exhibit 10.21 of Middlefield Banc Corp.s Annual Report on Form 10-K for the Year Ended December 31, 2003, filed on March 30, 200410.21
    *
    
    Form of Indemnification Agreement with directors of Middlefield Banc Corp. and with executive officers of Middlefield Banc Corp. and The Middlefield Banking Company
    
    Incorporated by reference to Exhibit 99.1 of Middlefield Banc Corp.s registration statement on Form 10, Amendment No. 1, filed on June 14, 200110.22
    *
    
    Annual Incentive Plan Summary
    
    Incorporated by reference to the summary description of the annual
incentive plan included as Exhibit 10.22 of Middlefield Banc Corp.s
Form 8-KCurrent Report filed on December 16, 200510.23
    *
    
    Amended Executive Deferred Compensation Agreement with Thomas G. Caldwell
    
    Incorporated by reference to Exhibit 10.23 of Middlefield Banc Corp.s Form 8-K Current Report filed on May 9, 2008
  28




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##### Table of Contents



exhibitnumber
    
    description
    
    location10.24
    *
    
    Amended Executive Deferred Compensation Agreement with James R. Heslop, II
    
    Incorporated by reference to Exhibit 10.24 of Middlefield Banc Corp.s Form 8-K Current Report filed on May 9, 200810.25
    *
    
    Amended Executive Deferred Compensation Agreement with Donald L. Stacy
    
    Incorporated by reference to Exhibit 10.25 of Middlefield Banc Corp.s Form 8-K Current Report filed on May 9, 200810.26
    *
    
    Executive Deferred Compensation Agreement with Jay P. Giles
    
    filed herewith13
    
    
    Portions of the Annual Report for the year ended December 31, 2010 incorporated by reference into this Form 10-K
    
    filed herewith21
    
    
    Subsidiaries of Middlefield Banc Corp.
    
    filed herewith23
    
    
    Consent of S.R. Snodgrass, A.C., independent auditors of Middlefield Banc Corp.
    
    filed herewith31.1
    
    
    Rule 13a-14(a) certification of Chief Executive Officer
    
    filed herewith31.2
    
    
    Rule 13a-14(a) certification of Chief Financial Officer
    
    filed herewith32
    
    
    Rule 13a-14(b) certification
    
    filed herewith
 *
    
    management contract or compensatory plan or arrangement  29




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##### Table of Contents



Signatures
  Middlefield Banc Corp.By:
    /s/ Thomas G. CaldwellThomas G. CaldwellPresident and Chief Executive OfficerMarch 18, 2011   30




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##### Table of Contents



/s/ Thomas G. Caldwell

Thomas G. Caldwell 
President, Chief Executive Officer, and Director
    
    March 18, 2011/s/ Donald L. Stacy

Donald L. Stacy, Treasurer and Chief Financial Officer
(Principal accounting and financial officer)
    
    March 18, 2011/s/ Richard T. Coyne

Richard T. Coyne, Chairman of the Board
    
    March 18, 2011/s/ Frances H. Frank

Frances H. Frank, Director
    
    March 18, 2011/s/ James R. Heslop, II

James R. Heslop, II, Executive Vice President, 
Chief Operating Officer, and Director
    
    March 18, 2011/s/ Kenneth E. Jones

Kenneth E Jones, Director
    
    March 18, 2011/s/ James J. McCaskey

James J. McCaskey, Director
    
    March 18, 2011/s/ Carolyn J. Turk

Carolyn J. Turk, Director
    
    March 18, 2011/s/ William J. Skidmore

William J. Skidmore, Director
    
    March 18, 2011/s/ Robert W. Toth

Robert W. Toth, Director
    
    March 18, 2011
  31