Exhibit 13
 
 Full page graphic with searchable text
ANNUAL REPORT
MIDDLE FIELD BANC CORP.




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Full page graphic with searchable text




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Statistical Summary
    
    
    2Decade of Progress
    
    
    4Shareholder Information
    
    
    8Letter to Our Shareholders
    
    
    10Letter from the Chairman
    
    
    12Middlefield Banc Corp. Board of Directors
    
    
    13Financials
    
    
    16Emerald Bank Directors & Officers
    
    
    74Emerald Bank Staff & Branch Locations
    
    
    75The Middlefield Banking Company Staff
    
    
    76The Middlefield Banking Company Officers
    
    
    77The Middlefield Banking Company Branch Locations
    
    
    78




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Net Income (in thousands)
Total Assets (in thousands)
Equity Capital (in thousands)
Net Loans Outstanding (in thousands)
Basic Earnings Per Share
Dividends Per Share Middlefield Banc Corp.




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Book Value Per Share
Return on Average Assets
Return on Average Equity 2010 Annual Report




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##### 



(Dollar amounts in thousands)
    
    2001
    
    
    2002
    
    
    2003Interest Income
    
    $
    13,707
    
    
    $
    14,120
    
    
    $
    14,647Interest Expense
    
    
    6,748
    
    
    
    6,148
    
    
    
    5,725Net Interest Income
    
    
    6,959
    
    
    
    7,972
    
    
    
    8,922Provision for Loan Loss
    
    
    170
    
    
    
    300
    
    
    
    315Net Interest Income After
Provision for Loan Losses
    
    
    6,789
    
    
    
    7,672
    
    
    
    8,607Noninterest Income, Including
Security Gains/Losses
    
    
    1,194
    
    
    
    1,143
    
    
    
    1,428Noninterest Expense
    
    
    4,741
    
    
    
    5,206
    
    
    
    6,105Income Before Income Taxes
    
    
    3,242
    
    
    
    3,609
    
    
    
    3,930Income Taxes
    
    
    971
    
    
    
    1,108
    
    
    
    1,131Net Income
    
    $
    2,271
    
    
    $
    2,501
    
    
    $
    2,799Total Assets
    
    $
    197,858
    
    
    $
    226,245
    
    
    $
    262,369Deposits
    
    
    167,383
    
    
    
    187,384
    
    
    
    219,840Equity Capital
    
    
    19,787
    
    
    
    21,746
    
    
    
    23,504Loans Outstanding, Net
    
    
    150,766
    
    
    
    172,643
    
    
    
    190,359Allowance For Loan Losses
    
    
    2,062
    
    
    
    2,300
    
    
    
    2,521Net Charge Offs (Recoveries)
    
    
    145
    
    
    
    62
    
    
    
    94Full Time Employees (Average
Equivalents)
    
    
    64
    
    
    
    66
    
    
    
    72Number of Offices
    
    
    5
    
    
    
    5
    
    
    
    6Earnings Per Share
    
    $
    1.54
    
    
    $
    1.68
    
    
    $
    1.89Dividends Per Share
    
    
    0.52
    
    
    
    0.58
    
    
    
    0.65Book Value Per Share
    
    
    13.93
    
    
    
    15.35
    
    
    
    16.49Dividends Pay-out Ratio
    
    
    34.00
    %
    
    
    34.30
    %
    
    
    34.37
    %Cash Dividends Paid
    
    $
    772
    
    
    $
    858
    
    
    $
    962Return on Average Assets
    
    
    1.22
    %
    
    
    1.17
    %
    
    
    1.13
    %Return on Average Equity
    
    
    11.89
    %
    
    
    12.08
    %
    
    
    12.39
    %
 Middlefield Banc Corp.




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2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010$
    15,733
    
    
    $
    17,379
    
    
    $
    19,494
    
    
    $
    24,873
    
    
    $
    26,038
    
    
    $
    26,051
    
    
    $
    29,0945,769
    
    
    
    6,655
    
    
    
    8,567
    
    
    
    13,531
    
    
    
    14,058
    
    
    
    11,783
    
    
    
    10,9459,964
    
    
    
    10,724
    
    
    
    10,927
    
    
    
    11,342
    
    
    
    11,980
    
    
    
    14,268
    
    
    
    18,149174
    
    
    
    302
    
    
    
    60
    
    
    
    430
    
    
    
    608
    
    
    
    2,578
    
    
    
    3,5809,790
    
    
    
    10,422
    
    
    
    10,867
    
    
    
    10,912
    
    
    
    11,372
    
    
    
    11,690
    
    
    
    14,5691,779
    
    
    
    2,119
    
    
    
    2,427
    
    
    
    2,632
    
    
    
    2,226
    
    
    
    2,668
    
    
    
    2,6236,966
    
    
    
    7,425
    
    
    
    7,938
    
    
    
    9,373
    
    
    
    10,596
    
    
    
    12,650
    
    
    
    14,7634,603
    
    
    
    5,116
    
    
    
    5,356
    
    
    
    4,171
    
    
    
    3,002
    
    
    
    1,708
    
    
    
    2,4291,330
    
    
    
    1,415
    
    
    
    1,472
    
    
    
    796
    
    
    
    387
    
    
    
    (73
    )
    
    
    (88
    )$
    3,273
    
    
    $
    3,701
    
    
    $
    3,884
    
    
    $
    3,375
    
    
    $
    2,615
    
    
    $
    1,781
    
    
    $
    2,517$
    291,214
    
    
    $
    311,214
    
    
    $
    340,604
    
    
    $
    434,273
    
    
    $
    467,847
    
    
    $
    558,658
    
    
    $
    632,197239,885
    
    
    
    249,450
    
    
    
    271,050
    
    
    
    362,918
    
    
    
    394,819
    
    
    
    487,106
    
    
    
    565,25124,822
    
    
    
    27,289
    
    
    
    30,464
    
    
    
    34,962
    
    
    
    35,059
    
    
    
    36,707
    
    
    
    38,022213,030
    
    
    
    231,214
    
    
    
    246,342
    
    
    
    306,147
    
    
    
    318,019
    
    
    
    348,660
    
    
    
    366,2772,623
    
    
    
    2,841
    
    
    
    2,849
    
    
    
    3,299
    
    
    
    3,557
    
    
    
    4,937
    
    
    
    6,22172
    
    
    
    84
    
    
    
    52
    
    
    
    423
    
    
    
    351
    
    
    
    1,198
    
    
    
    2,29673
    
    
    
    75
    
    
    
    80
    
    
    
    91
    
    
    
    101
    
    
    
    106
    
    
    
    1086
    
    
    
    6
    
    
    
    8
    
    
    
    9
    
    
    
    10
    
    
    
    10
    
    
    
    10$
    2.18
    
    
    $
    2.50
    
    
    $
    2.60
    
    
    $
    2.17
    
    
    $
    1.72
    
    
    $
    1.15
    
    
    $
    1.600.72
    
    
    
    0.80
    
    
    
    0.87
    
    
    
    0.94
    
    
    
    1.03
    
    
    
    1.04
    
    
    
    1.0417.67
    
    
    
    19.25
    
    
    
    20.30
    
    
    
    22.56
    
    
    
    22.83
    
    
    
    23.46
    
    
    
    23.9032.72
    %
    
    
    31.69
    %
    
    
    33.43
    %
    
    
    43.07
    %
    
    
    60.25
    %
    
    
    90.28
    %
    
    
    65.04
    %$
    1,071
    
    
    $
    1,173
    
    
    $
    1,299
    
    
    $
    1,454
    
    
    $
    1,575
    
    
    $
    1,608
    
    
    $
    1,6371.17
    %
    
    
    1.23
    %
    
    
    1.22
    %
    
    
    0.85
    %
    
    
    0.58
    %
    
    
    0.36
    %
    
    
    0.41
    %13.36
    %
    
    
    14.43
    %
    
    
    13.59
    %
    
    
    10.06
    %
    
    
    7.91
    %
    
    
    4.90
    %
    
    
    6.44
    %
  2010 Annual Report




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Corporate Headquarters
  
 Form 10-K and 10-Q Availability
  
 Market Makers
  
 
 
 Notice of Annual Meeting
  
 Transfer Agent and Registrar
 
 Independent Auditors
 
 Internet Information
  Dividend Payment Dates
  Middlefield
Banc Corp




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Dividend Reinvestment and Stock Purchase Plan
  Direct Deposit of Dividends
  Market for Middlefields Common Equity & Related Stockholder Matters
  CashHigh
    
    
    Low
    
    
    DividendsBid
    
    
    Bid
    
    
    per share2010First Quarter
    
    $
    24.50
    
    
    $
    19.50
    
    
    $
    0.26Second Quarter
    
    $
    23.00
    
    
    $
    18.67
    
    
    $
    0.26Third Quarter
    
    $
    20.00
    
    
    $
    16.99
    
    
    $
    0.26Fourth Quarter
    
    $
    18.00
    
    
    $
    16.25
    
    
    $
    0.262009First Quarter
    
    $
    22.50
    
    
    $
    20.00
    
    
    $
    0.26Second Quarter
    
    $
    23.00
    
    
    $
    19.50
    
    
    $
    0.26Third Quarter
    
    $
    19.50
    
    
    $
    15.25
    
    
    $
    0.26Fourth Quarter
    
    $
    24.00
    
    
    $
    14.99
    
    
    $
    0.26
 2010 Annual Report




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President and Chief Executive Officer
 To our Shareholders and Friends
        Middlefield Banc Corp




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President and Chief Executive Officer
 2010 Annual Report




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Chairman, Board of Directors
 
 Chairmans Report to the Shareholders
       
 Chairman, Board of Directors
 Middlefield Banc Corp




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Board of Directors
 (PHOTO OF RICHARD T. COYNE)
    
    Richard T. Coyne  1997Chairman, Board of Directors,
Middlefield Banc Corp.
The Middlefield Banking Company
Retired: Jaco Products and Capital
Plastics
    
    (PHOTO OF CAROLYN J. TURK)
    
    Carolyn J. Turk, C.P.A.  2004
Controller
Molded Fiber Glass Companies(PHOTO OF FRANCES H. FRANK)
    
    Frances H. Frank  1995
Secretary Treasurer
The Frank Agency, Inc.
    
    (PHOTO OF WILLIAM J. SKIDMORE)
    
    William J. Skidmore  2007
Northeast Ohio Senior District Manager
Waste Management of Ohio, Inc.(PHOTO OF THOMAS G. CALDWELL)
    
    Thomas G. Caldwell  1997President and Chief Executive Officer
Middlefield Banc Corp.
The Middlefield Banking Company
    
    (PHOTO OF KENNETH E. JONES)
    
    Kenneth E. Jones  2008
President
Chesapeake Financial Advisors(PHOTO OF JAMES R. HESLOP, II)
    
    James R. Heslop, II  2001Executive Vice President
Chief Operating Officer
Middlefield Banc Corp.
The Middlefield Banking Company
    
    (PHOTO OF ROBERT W. TOTH)
    
    Robert W. Toth  2009
Retired: Gold Key Processing, Ltd(PHOTO OF JAMES J. McCASKEY)
    
    James J. McCaskey  2004
President
McCaskey Landscape and Design, LLC
    
    (PHOTO OF ERIC W. HUMMEL)
    
    Eric W. Hummel*  2009
President
Hummel Construction
 *     denotes The Middlefield Banking Company Director only
 2010 Annual Report




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Consolidated Financial Statements
    
    
    16Notes to Consolidated Financial Statements
    
    
    20Managements Discussion and Analysis
    
    
    52




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(Dollar amounts in thousands)
    
    December 31,
Consolidated Balance Sheet
    
    2010
    
    
    2009ASSETSCash and due from banks
    
    $
    10,473
    
    
    $
    12,909Federal funds sold
    
    
    20,162
    
    
    
    28,123Interest-bearing deposits in other institutions
    
    
    
    
    
    
    121Cash and cash equivalents
    
    
    30,635
    
    
    
    41,153Investment securities available for sale
    
    
    201,772
    
    
    
    136,711Loans
    
    
    372,498
    
    
    
    353,597Less allowance for loan losses
    
    
    6,221
    
    
    
    4,937Net loans
    
    
    366,277
    
    
    
    348,660Premises and equipment
    
    
    8,179
    
    
    
    8,394Goodwill
    
    
    4,559
    
    
    
    4,559Bank-owned life insurance
    
    
    7,979
    
    
    
    7,707Accrued interest and other assets
    
    
    12,796
    
    
    
    11,474TOTAL ASSETS
    
    $
    632,197
    
    
    $
    558,658LIABILITIESDeposits:Non-interest-bearing demand
    
    $
    53,391
    
    
    $
    44,387Interest-bearing demand
    
    
    48,869
    
    
    
    38,111Money market
    
    
    71,105
    
    
    
    56,451Savings
    
    
    146,993
    
    
    
    107,358Time
    
    
    244,893
    
    
    
    240,799Total deposits
    
    
    565,251
    
    
    
    487,106Short-term borrowings
    
    
    7,632
    
    
    
    6,800Other borrowings
    
    
    19,321
    
    
    
    25,865Accrued interest and other liabilities
    
    
    1,971
    
    
    
    2,180TOTAL LIABILITIES
    
    
    594,175
    
    
    
    521,951STOCKHOLDERS EQUITYCommon stock, no par value; 10,000,000 shares
authorized, 1,780,553 and 1,754,112 shares issued
    
    
    28,429
    
    
    
    27,919Retained earnings
    
    
    15,840
    
    
    
    14,960Accumulated other comprehensive income
    
    
    487
    
    
    
    562Treasury stock, at cost; 189,530 shares in 2010 and 2009
    
    
    (6,734
    )
    
    
    (6,734
    )TOTAL STOCKHOLDERS EQUITY
    
    
    38,022
    
    
    
    36,707TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    632,197
    
    
    $
    558,658
  Middlefield Banc Corp.




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(Dollar amounts in thousands, except per share data)
    
    Year Ended December 31,
Consolidated Statement of Income
    
    2010
    
    
    2009
    
    
    2008INTEREST INCOMEInterest and fees on loans
    
    $
    21,084
    
    
    $
    20,271
    
    
    $
    21,426Interest-bearing deposits in other institutions
    
    
    15
    
    
    
    15
    
    
    
    13Federal funds sold
    
    
    52
    
    
    
    20
    
    
    
    135Investment securities:Taxable interest
    
    
    5,185
    
    
    
    3,794
    
    
    
    2,538Tax-exempt interest
    
    
    2,650
    
    
    
    1,882
    
    
    
    1,810Dividends on stock
    
    
    108
    
    
    
    69
    
    
    
    116TOTAL INTEREST INCOME
    
    
    29,094
    
    
    
    26,051
    
    
    
    26,038INTEREST EXPENSEDeposits
    
    
    9,504
    
    
    
    10,296
    
    
    
    12,352Short term borrowings
    
    
    249
    
    
    
    34
    
    
    
    46Other borrowings
    
    
    642
    
    
    
    919
    
    
    
    1,121Trust preferred securities
    
    
    550
    
    
    
    534
    
    
    
    539TOTAL INTEREST EXPENSE
    
    
    10,945
    
    
    
    11,783
    
    
    
    14,058NET INTEREST INCOME
    
    
    18,149
    
    
    
    14,268
    
    
    
    11,980Provision for loan losses
    
    
    3,580
    
    
    
    2,578
    
    
    
    608NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
    
    
    14,569
    
    
    
    11,690
    
    
    
    11,372NONINTEREST INCOMEService charges on deposit accounts
    
    
    1,784
    
    
    
    1,905
    
    
    
    1,888Investment securities gains/(losses), net
    
    
    11
    
    
    
    (14
    )
    
    
    (344
    )Earnings on bank-owned life insurance
    
    
    273
    
    
    
    266
    
    
    
    287Other income
    
    
    555
    
    
    
    511
    
    
    
    395TOTAL NONINTEREST INCOME
    
    
    2,623
    
    
    
    2,668
    
    
    
    2,226NONINTEREST EXPENSESalaries and employee benefits
    
    
    6,411
    
    
    
    5,938
    
    
    
    4,912Occupancy expense
    
    
    946
    
    
    
    928
    
    
    
    886Equipment expense
    
    
    626
    
    
    
    509
    
    
    
    539Data processing costs
    
    
    743
    
    
    
    917
    
    
    
    803Ohio state franchise tax
    
    
    348
    
    
    
    493
    
    
    
    468Federal deposit insurance expense
    
    
    1,166
    
    
    
    707
    
    
    
    188Professional Fees
    
    
    678
    
    
    
    673
    
    
    
    586Loss on sale of other real estate owned
    
    
    783
    
    
    
    183
    
    
    
    Other expense
    
    
    3,062
    
    
    
    2,302
    
    
    
    2,214TOTAL NONINTEREST EXPENSE
    
    
    14,763
    
    
    
    12,650
    
    
    
    10,596Income before income taxes
    
    
    2,429
    
    
    
    1,708
    
    
    
    3,002Income taxes (benefit)
    
    
    (88
    )
    
    
    (73
    )
    
    
    387NET INCOME
    
    $
    2,517
    
    
    $
    1,781
    
    
    $
    2,615EARNINGS PER SHAREBasic
    
    $
    1.60
    
    
    $
    1.15
    
    
    $
    1.72Diluted
    
    
    1.60
    
    
    
    1.15
    
    
    
    1.69DIVIDENDS DECLARED PER SHARE
    
    $
    1.04
    
    
    $
    1.04
    
    
    $
    1.03
  2010 Annual Report




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##### 



(Dollar amounts in thousands,
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulatedexcept dividend per share amount)
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Total
Consolidated Statement of
    
    Common Stock
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    Stockholders
    
    
    ComprehensiveChanges in Stockholders Equity
    
    Shares
    
    
    Amount
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Stock
    
    
    Equity
    
    
    IncomeBalance, December 31, 2007
    
    $
    1,701,546
    
    
    $
    26,650
    
    
    $
    13,747
    
    
    $
    (53
    )
    
    $
    (5,383
    )
    
    $
    34,961Net income
    
    
    
    
    
    
    
    
    
    
    2,615
    
    
    
    
    
    
    
    
    
    
    
    2,615
    
    
    $
    2,615Other comprehensive income:Unrealized gain on available for sale securities,
net of reclassification adjustment, net of tax
benefit of $125
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (242
    )
    
    
    
    
    
    
    (242
    )
    
    
    (242
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,373Exercise of stock options
    
    
    992
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20Expense related to stock options
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15Purchase of treasury stock (37,785 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,351
    )
    
    
    (1,351
    )Dividend reinvestment and purchase plan
    
    
    22,843
    
    
    
    616
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    616Cash dividends ($1.03 per share)
    
    
    
    
    
    
    
    
    
    
    (1,576
    )
    
    
    
    
    
    
    
    
    
    
    (1,576
    )Balance, December 31, 2008
    
    $
    1,725,381
    
    
    $
    27,301
    
    
    $
    14,786
    
    
    $
    (295
    )
    
    $
    (6,734
    )
    
    $
    35,058Net income
    
    
    
    
    
    
    
    
    
    
    1,781
    
    
    
    
    
    
    
    
    
    
    
    1,781
    
    
    $
    1,781Other comprehensive income:Unrealized gain on available for sale securities,
net of reclassification adjustment, net of taxes
of $445
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    857
    
    
    
    
    
    
    
    857
    
    
    
    857Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,638Expense related to stock options
    
    
    
    
    
    
    61
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61Dividend reinvestment and purchase plan
    
    
    28,731
    
    
    
    557
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    557Cash dividends ($1.04 per share)
    
    
    
    
    
    
    
    
    
    
    (1,607
    )
    
    
    
    
    
    
    
    
    
    
    (1,607
    )Balance, December 31, 2009
    
    $
    1,754,112
    
    
    $
    27,919
    
    
    $
    14,960
    
    
    $
    562
    
    
    $
    (6,734
    )
    
    $
    36,707Net income
    
    
    
    
    
    
    
    
    
    
    2,517
    
    
    
    
    
    
    
    
    
    
    
    2,517
    
    
    $
    2,517Other comprehensive income:Unrealized loss on available for sale securities,
net of reclassification adjustment, net of taxes
of $39
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75
    )
    
    
    
    
    
    
    (75
    )
    
    
    (75
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,442Dividend reinvestment and purchase plan
    
    
    26,441
    
    
    
    510
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    510Cash dividends ($1.04 per share)
    
    
    
    
    
    
    
    
    
    
    (1,637
    )
    
    
    
    
    
    
    
    
    
    
    (1,637
    )Balance, December 31, 2010
    
    $
    1,780,553
    
    
    $
    28,429
    
    
    $
    15,840
    
    
    $
    487
    
    
    $
    (6,734
    )
    
    $
    38,0222010
    
    
    2009
    
    
    2008Components of comprehensive income (loss):Change in net unrealized gain (loss)
on investments available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (68
    )
    
    $
    848
    
    
    $
    (469
    )Realized losses (gains) included in net income,
net of taxes of ($4), $5, and $117
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    9
    
    
    
    227TOTAL
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (75
    )
    
    $
    857
    
    
    $
    (242
    )
  Middlefield Banc Corp.




---



##### 



(Dollar amounts in thousands)
    
    Year Ended December 31,
Consolidated Statement of Cash Flows
    
    2010
    
    
    2009
    
    
    2008OPERATING ACTIVITIESNet income
    
    $
    2,517
    
    
    $
    1,781
    
    
    $
    2,615Adjustments to reconcile net income to net cash provided
by operating activities:Provision for loan losses
    
    
    3,580
    
    
    
    2,578
    
    
    
    608Depreciation and amortization
    
    
    740
    
    
    
    680
    
    
    
    645Amortization of premium and discount on investment securities
    
    
    6
    
    
    
    (483
    )
    
    
    183Amortization of deferred loan fees, net
    
    
    (58
    )
    
    
    (68
    )
    
    
    (144
    )Investment securities (gains) losses, net
    
    
    (11
    )
    
    
    14
    
    
    
    344Earnings on bank-owned life insurance
    
    
    (273
    )
    
    
    (266
    )
    
    
    (287
    )Deferred income taxes
    
    
    (777
    )
    
    
    (469
    )
    
    
    (270
    )Compensation for stock option expense
    
    
    
    
    
    
    61
    
    
    
    15Loss on other real estate owned
    
    
    783
    
    
    
    183
    
    
    
    Decrease (increase) in accrued interest receivable
    
    
    (847
    )
    
    
    35
    
    
    
    94Decrease in accrued interest payable
    
    
    (115
    )
    
    
    (394
    )
    
    
    (210
    )Decrease (increase) in prepaid federal deposit insurance
    
    
    727
    
    
    
    (2,499
    )
    
    
    (43
    )Other, net
    
    
    (538
    )
    
    
    (19
    )
    
    
    (353
    )Net cash provided by operating activities
    
    
    5,734
    
    
    
    1,134
    
    
    
    3,197INVESTING ACTIVITIESInvestment securities available for sale:Proceeds from repayments and maturities
    
    
    42,815
    
    
    
    20,674
    
    
    
    16,913Purchases
    
    
    (113,860
    )
    
    
    (52,163
    )
    
    
    (39,062
    )Proceeds from sale of securities
    
    
    5,874
    
    
    
    816
    
    
    
    2,953Increase in loans, net
    
    
    (22,992
    )
    
    
    (34,493
    )
    
    
    (13,388
    )Purchase of Federal Home Loan Bank stock
    
    
    
    
    
    
    (14
    )
    
    
    (142
    )Purchase of premises and equipment
    
    
    (327
    )
    
    
    (467
    )
    
    
    (1,408
    )Proceeds from the sale of other real estate owned
    
    
    932
    
    
    
    100
    
    
    
    Net cash used for investing activities
    
    
    (87,558
    )
    
    
    (65,547
    )
    
    
    (34,134
    )FINANCING ACTIVITIESNet increase in deposits
    
    
    78,145
    
    
    
    92,286
    
    
    
    25,806Increase in short-term borrowings, net
    
    
    832
    
    
    
    4,913
    
    
    
    375Proceeds from other borrowings
    
    
    
    
    
    
    
    
    
    
    13,500Repayment of other borrowings
    
    
    (6,544
    )
    
    
    (8,038
    )
    
    
    (11,992
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    (1,351
    )Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    20Proceeds from dividend reinvestment and purchase plan
    
    
    510
    
    
    
    557
    
    
    
    616Cash dividends
    
    
    (1,637
    )
    
    
    (1,607
    )
    
    
    (1,576
    )Net cash received from deposit acquisition
    
    
    
    
    
    
    
    
    
    
    5,179Net cash provided by financing activities
    
    
    71,306
    
    
    
    88,111
    
    
    
    30,577Increase (decrease) in cash and cash equivalents
    
    
    (10,518
    )
    
    
    23,698
    
    
    
    (360
    )CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
    
    
    41,153
    
    
    
    17,455
    
    
    
    17,815CASH AND CASH EQUIVALENTS AT END OF YEAR
    
    $
    30,635
    
    
    $
    41,153
    
    
    $
    17,455SUPPLEMENTAL INFORMATIONCash paid during the year for:Interest on deposits and borrowings
    
    $
    11,060
    
    
    $
    12,177
    
    
    $
    14,269Income taxes
    
    
    850
    
    
    
    275
    
    
    
    600Non-cash investing transactions:Transfers from loans to other real estate owned
    
    $
    2,110
    
    
    $
    1,872
    
    
    $
    1,106Loans to facilitate the sale of other real estate owned
    
    
    257
    
    
    
    531
    
    
    
    
  2010 Annual Report




---



##### 



1.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Nature of Operations and Basis of Presentation
    Investment Securities
   Middlefield Banc Corp.




---



##### 



Loans
   Allowance for Loan Losses
   
 2010 Annual Report




---



##### 



Premises and Equipment
  Goodwill
  Intangible Assets
  Bank-Owned Life Insurance (BOLI)
  Other Real Estate Owned
  Income Taxes
 
 Middlefield Banc Corp.




---



##### 



Earnings Per Share
  Stock-Based Compensation
    Expected
    
    
    
    
    
    
    
    
    
    
    Expected LifeGrant Year
    
    Dividend Yield
    
    
    Risk-Free Interest Rate
    
    
    Expected Volatility
    
    
    (in years)2008
    
    
    8.54
    
    
    
    3.53  3.73
    
    
    
    33.29
    
    
    
    9.94
 $
  Cash Flow Information
  Advertising Costs
  Reclassification of Comparative Amounts
 
 2010 Annual Report




---



##### 



Recent Accounting Pronouncements
 Accounting for Transfer of Financial Assets.
 (Topic 505): Accounting for Distributions
to Shareholders with Components of Stock and Cash  a consensus of the FASB Emerging Issues Task
Force.
 Compensation  Stock Compensation (Topic 718):
Escrowed Share Arrangements and the Presumption of Compensation.
 Fair Value Measurements and Disclosures (Topic
820): Improving Disclosures about Fair Value Measurements.
 Technical Corrections to Various Topics.
 Derivatives and Hedging.
 Receivables (Topic 310): Effect of a Loan
Modification When the Loan is a Part of a Pool That is Accounted for as a Single Asset  a
consensus of the FASB Emerging Issues Task Force.
 Middlefield Banc Corp.




---



##### 



Receivables (Topic 310): Disclosures about the Credit
Quality of Financing Receivables and the Allowance for Credit Losses.
 Accounting for Technical Amendments to Various SEC
Rules and Schedules. Technical Amendments to Rules, Forms, Schedules, and Codification of Financial
Reporting Policies
 ASU 2010-22, Technical Corrections to SEC Paragraphs  An
announcement made by the staff of the U.S. Securities and Exchange Commission.
 Plan Accounting  Defined Contribution Pension
Plans.
 Accounting for Costs Associated with Acquiring or
Renewing Insurance Contracts.
 When to Perform Step 2 of the Goodwill Impairment
Test for Reporting Units with Zero or Negative Carrying Amounts.
 2010 Annual Report




---



##### 



Disclosure of Supplementary Pro Forma Information
for Business Combinations.
 2.
    
    ACQUISITIONS
  3.
    
    EARNINGS PER SHARE
  2010
    
    
    2009
    
    
    2008Weighted-average common shares outstanding
    
    
    1,764,743
    
    
    
    1,736,769
    
    
    
    1,710,861Average treasury stock shares
    
    
    (189,530
    )
    
    
    (189,530
    )
    
    
    (177,888
    )Weighted-average common shares and common stock equivalents used to
calculate basic earnings per share
    
    
    1,575,213
    
    
    
    1,547,239
    
    
    
    1,532,973Additional common stock equivalents (stock options) used to calculate
diluted earnings per share
    
    
    608
    
    
    
    740
    
    
    
    13,440Weighted-average common shares and common stock equivalents used to
calculate diluted earnings per share
    
    
    1,575,821
    
    
    
    1,547,979
    
    
    
    1,546,413
  Middlefield Banc Corp.




---



##### 



4.
    
    INVESTMENT SECURITIES AVAILABLE FOR SALE
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairDecember 31, 2010 (Dollar amounts in thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueU.S. government agency securities
    
    $
    33,332
    
    
    $
    111
    
    
    $
    (840
    )
    
    $
    32,603Obligations of states and political subdivisions:Taxable
    
    
    7,371
    
    
    
    80
    
    
    
    (34
    )
    
    
    7,417Tax-exempt
    
    
    69,363
    
    
    
    1,058
    
    
    
    (958
    )
    
    
    69,463Mortgage-backed securities
    
    
    90,026
    
    
    
    2,325
    
    
    
    (982
    )
    
    
    91,369Total debt securities
    
    
    200,092
    
    
    
    3,574
    
    
    
    (2,814
    )
    
    
    200,852Equity securities
    
    
    944
    
    
    
    80
    
    
    
    (104
    )
    
    
    920Total
    
    $
    201,036
    
    
    $
    3,654
    
    
    $
    (2,918
    )
    
    $
    201,772
 Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairDecember 31, 2009 (Dollar amounts in thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueU.S. government agency securities
    
    $
    18,657
    
    
    $
    38
    
    
    $
    (365
    )
    
    $
    18,330Obligations of states and political subdivisions:Taxable
    
    
    3,451
    
    
    
    10
    
    
    
    (86
    )
    
    
    3,375Tax-exempt
    
    
    52,752
    
    
    
    943
    
    
    
    (349
    )
    
    
    53,346Mortgage-backed securities
    
    
    60,055
    
    
    
    1,816
    
    
    
    (1,130
    )
    
    
    60,741Total debt securities
    
    
    134,915
    
    
    
    2,807
    
    
    
    (1,930
    )
    
    
    135,792Equity securities
    
    
    944
    
    
    
    80
    
    
    
    (105
    )
    
    
    919Total
    
    $
    135,859
    
    
    $
    2,887
    
    
    $
    (2,035
    )
    
    $
    136,711
  Amortized
    
    
    Fair(Dollar amounts in thousands)
    
    Cost
    
    
    ValueDue in one year or less
    
    $
    1,549
    
    
    $
    1,580Due after one year through five years
    
    
    5,724
    
    
    
    6,010Due after five years through ten years
    
    
    21,397
    
    
    
    22,111Due after ten years
    
    
    171,422
    
    
    
    171,151Total
    
    $
    200,092
    
    
    $
    200,852
  2010 Annual Report




---



##### 



Less than Twelve Months
    
    
    Twelve Months or Greater
    
    
    TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDecember 31, 2010 (Dollar amounts in thousands)
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesU.S. government agency securities
    
    $
    24,406
    
    
    $
    (840
    )
    
    $
    
    
    
    $
    
    
    
    $
    24,406
    
    
    $
    (840
    )Obligations of states and political subdivisions
    
    
    35,846
    
    
    
    (940
    )
    
    
    439
    
    
    
    (52
    )
    
    
    36,285
    
    
    
    (992
    )Mortgage-backed securities
    
    
    28,302
    
    
    
    (665
    )
    
    
    2,480
    
    
    
    (317
    )
    
    
    30,782
    
    
    
    (982
    )Equity securities
    
    
    
    
    
    
    
    
    


    
    590
    
    
    
    (104
    )

    
    
    590
    
    
    
    (104
    )Total
    
    $
    88,554
    
    
    $
    (2,445
    )
    
    $
    3,509
    
    
    $
    (473
    )
    
    $
    92,063
    
    
    $
    (2,918
    )
 Less than Twelve Months
    
    
    Twelve Months or Greater
    
    
    TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDecember 31, 2009 (Dollar amounts in thousands)
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesU.S. government agency securities
    
    $
    17,134
    
    
    $
    (365
    )
    
    $
    
    
    
    $
    
    
    
    $
    17,134
    
    
    $
    (365
    )Obligations of states and political subdivisions
    
    
    21,593
    
    
    
    (314
    )
    
    
    1,417
    
    
    
    (121
    )
    
    
    23,010
    
    
    
    (435
    )Mortgage-backed securities
    
    
    18,509
    
    
    
    (334
    )
    
    
    4,064
    
    
    
    (796
    )
    
    
    22,573
    
    
    
    (1,130
    )Equity securities
    
    
    581
    
    
    
    (68
    )
    
    
    8
    
    
    
    (37
    )
    
    
    589
    
    
    
    (105
    )Total
    
    $
    57,817
    
    
    $
    (1,081
    )
    
    $
    5,489
    
    
    $
    (954
    )
    
    $
    63,306
    
    
    $
    (2,035
    )
  Investments  Debt and
Equity Securities Investments  Debt and Equity
Securities
 Middlefield Banc Corp.




---



##### 




    
    The length of time and the extent to which the fair value has been less than the
amortized cost basis.
 
    
    Changes in the near term prospects of the underlying collateral of a security such as
changes in default rates, loss severity given default, and significant changes in prepayment
assumptions.
 
    
    The level of cash flows generated from the underlying collateral supporting the principal
and interest payments of the debt securities.
 
    
    Any adverse change to the credit conditions and liquidity of the issuer, taking into
consideration the latest information available about the overall financial condition of the
issuer, credit ratings, recent legislation and government actions affecting the issuers
industry and actions taken by the issuer to deal with the present economic climate.
   2010 Annual Report




---



##### 



5.
    
    LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES
  2010
    
    
    2009Commercial and industrial
    
    $
    57,501
    
    
    $
    56,969Real estate  construction
    
    
    15,845
    
    
    
    7,837Real estate  mortgage:Residential
    
    
    209,863
    
    
    
    205,074Commercial
    
    
    84,304
    
    
    
    78,763Consumer installment
    
    
    4,985
    
    
    
    4,954372,498
    
    
    
    353,597Less allowance for loan losses
    
    
    6,221
    
    
    
    4,937Net loans
    
    $
    366,277
    
    
    $
    348,660
   Commercial
    
    
    Real Estate-
    
    
    
    
    
    
    
    
    
    
    ConsumerReal Estate-Mortgage
    
    & Industrial
    
    
    Construction
    
    
    Residential
    
    
    Commercial
    
    
    Installment
    
    
    TotalTotal loans
    
    $
    57,501
    
    
    $
    15,845
    
    
    $
    209,863
    
    
    $
    84,304
    
    
    $
    4,985
    
    
    $
    372,498Individually evaluated for impairment
    
    
    5,477
    
    
    
    1,299
    
    
    
    4,329
    
    
    
    6,266
    
    
    
    17
    
    
    
    17,388Collectively evaluated for impairment
    
    
    52,024
    
    
    
    14,546
    
    
    
    205,534
    
    
    
    78,038
    
    
    
    4,968
    
    
    
    355,110
   Middlefield Banc Corp.




---



##### 



Impaired LoansUnpaid
    
    
    
    
    
    
    Average
    
    
    InterestRecorded
    
    
    Principal
    
    
    Related
    
    
    Recorded
    
    
    IncomeFor the Year Ended December 31, 2010
    
    Investment
    
    
    Balance
    
    
    Allowance
    
    
    Investment
    
    
    RecognizedWith no related allowance recorded:Commercial and industrial
    
    $
    2,494
    
    
    $
    2,503
    
    
    $
    
    
    
    $
    2,157
    
    
    $
    Real estate  construction
    
    
    618
    
    
    
    614
    
    
    
    
    
    
    
    543
    
    
    
    Real estate  mortgage:Residential
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial
    
    
    1,764
    
    
    
    1,758
    
    
    
    
    
    
    
    1,372
    
    
    
    With an allowance recorded:Commercial and industrial
    
    $
    655
    
    
    $
    657
    
    
    $
    203
    
    
    $
    629
    
    
    $
    Real estate  construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Real estate  mortgage:Residential
    
    
    594
    
    
    
    594
    
    
    
    221
    
    
    
    594
    
    
    
    Commercial
    
    
    1,556
    
    
    
    1,556
    
    
    
    188
    
    
    
    663
    
    
    
    Total:Commercial and industrial
    
    $
    3,149
    
    
    $
    3,160
    
    
    $
    203
    
    
    $
    2,786
    
    
    $
    Real estate  construction
    
    
    618
    
    
    
    614
    
    
    
    
    
    
    
    543
    
    
    
    Real estate  mortgage:Residential
    
    
    594
    
    
    
    594
    
    
    
    221
    
    
    
    594
    
    
    
    Commercial
    
    
    3,320
    
    
    
    3,314
    
    
    
    188
    
    
    
    2,035
    
    
    
    
   2009
    
    
    2008Average recorded investment in impaired loans
    
    $
    3,842
    
    
    $
    1,887Interest income recognized on impaired loans
    
    
    33
    
    
    
    13
 2010 Annual Report




---



##### 



Special
    
    
    
    
    
    
    
    
    
    
    TotalDecember 31, 2010
    
    Pass
    
    
    Mention
    
    
    Substandard
    
    
    Doubtful
    
    
    LoansCommercial and industrial
    
    $
    52,008
    
    
    $
    903
    
    
    $
    4,366
    
    
    $
    224
    
    
    $
    57,501Real estate  construction
    
    
    14,481
    
    
    
    
    
    
    
    1,364
    
    
    
    
    
    
    
    15,845Real estate  mortgage:Residential
    
    
    192,823
    
    
    
    1,601
    
    
    
    15,439
    
    
    
    
    
    
    
    209,863Commercial
    
    
    76,979
    
    
    
    353
    
    
    
    6,972
    
    
    
    
    
    
    
    84,304Consumer installment
    
    
    4,937
    
    
    
    11
    
    
    
    37
    
    
    
    
    
    
    
    4,985Total:
    
    $
    341,228
    
    
    $
    2,868
    
    
    $
    28,178
    
    
    $
    224
    
    
    $
    372,498
  30-59 Days
    
    
    60-89 Days
    
    
    90 Days+
    
    
    Total Past
    
    
    
    
    
    
    TotalDecember 31, 2010
    
    Current
    
    
    Past Due
    
    
    Past Due
    
    
    Past Due
    
    
    Due
    
    
    Non-Accrual
    
    
    LoansCommercial and industrial
    
    $
    53,712
    
    
    $
    473
    
    
    $
    776
    
    
    $
    
    
    
    $
    1,249
    
    
    $
    2,540
    
    
    $
    57,501Real estate  construction
    
    
    15,197
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    648
    
    
    
    15,845Real estate  mortgage:Residential
    
    
    193,647
    
    
    
    2,950
    
    
    
    1,580
    
    
    
    
    
    
    
    4,530
    
    
    
    11,686
    
    
    
    209,863Commercial
    
    
    79,120
    
    
    
    1,607
    
    
    
    65
    
    
    
    
    
    
    
    1,672
    
    
    
    3,513
    
    
    
    84,305Consumer installment
    
    
    4,858
    
    
    
    102
    
    
    
    12
    
    
    
    
    
    
    
    114
    
    
    
    12
    
    
    
    4,984Total:
    
    $
    346,534
    
    
    $
    5,132
    
    
    $
    2,433
    
    
    $
    
    
    
    $
    7,565
    
    
    $
    18,399
    
    
    $
    372,498
 Middlefield Banc Corp.




---



##### 



2010
    
    
    2009
    
    
    2008Balance, January 1
    
    $
    4,937
    
    
    $
    3,557
    
    
    $
    3,299Add:Provisions charged to operations
    
    
    3,580
    
    
    
    2,578
    
    
    
    608Recoveries
    
    
    74
    
    
    
    89
    
    
    
    65Less loans charged off
    
    
    2,370
    
    
    
    1,287
    
    
    
    415Balance, December 31
    
    $
    6,221
    
    
    $
    4,937
    
    
    $
    3,557
 2010 Annual Report




---



##### 



6.
    
    PREMISES AND EQUIPMENT
  (Dollar amounts in thousands)
    
    2010
    
    
    2009Land and land improvements
    
    $
    1,898
    
    
    $
    1,898Building and leasehold improvements
    
    
    8,815
    
    
    
    8,954Furniture, fixtures, and equipment
    
    
    2,685
    
    
    
    4,48113,397
    
    
    
    15,333Less accumulated depreciation and amortization
    
    
    5,218
    
    
    
    6,939Total
    
    $
    8,179
    
    
    $
    8,394
  7.
    
    GOODWILL AND INTANGIBLE ASSETS
    2011
    
    $
    39,7622012
    
    
    39,7622013
    
    
    39,7622014
    
    
    39,7622015
    
    
    39,762Thereafter
    
    
    76,104$
    274,914
 Middlefield Banc Corp.




---



##### 



8.
    
    OTHER ASSETS
  (Dollar amounts in thousands)
    
    2010
    
    
    2009FHLB stock
    
    $
    1,887
    
    
    $
    1,887Accrued interest on investment securities
    
    
    1,222
    
    
    
    671Accrued interest on loans
    
    
    1,037
    
    
    
    1,045Deferred tax asset, net
    
    
    2,611
    
    
    
    1,611Prepaid federal deposit insurance
    
    
    1,684
    
    
    
    2,776Other real estate owned
    
    
    2,302
    
    
    
    2,164Other
    
    
    2,053
    
    
    
    1,320Total
    
    $
    12,796
    
    
    $
    11,474
 9.
    
    DEPOSITS
    Percent of(Dollar amounts in thousands)
    
    Amount
    
    
    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
    %
 10.
    
    SHORT-TERM BORROWINGS
  (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
    %
  2010 Annual Report




---



##### 



11.
    
    OTHER BORROWINGS
  Weighted-(Dollar amounts in thousands)
    
    Maturity range
    
    
    average
    
    
    Stated interest rate rangeDescription
    
    from
    
    
    to
    
    
    interest
    
    
    from
    
    
    to
    
    
    2010
    
    
    2009Fixed rate
    
    
    
    
    
    
    
    
    
    
    
    %
    
    
    
    %
    
    
    
    %
    
    $
    
    
    
    $
    1,250Fixed rate amortizing
    
    
    02/01/12
    
    
    
    10/01/28
    
    
    
    3.96
    
    
    
    2.70
    
    
    
    4.48
    
    
    
    9,073
    
    
    
    12,367Convertible
    
    
    10/09/12
    
    
    
    10/09/12
    
    
    
    4.14
    
    
    
    4.14
    
    
    
    4.14
    
    
    
    2,000
    
    
    
    4,000Junior subordinated debt
    
    
    12/21/37
    
    
    
    12/21/37
    
    
    
    6.58
    
    
    
    6.58
    
    
    
    6.58
    
    
    
    8,248
    
    
    
    8,248$
    19,321
    
    
    $
    25,865
  2010(Dollar amounts in thousands)
    
    
    
    
    
    Weighted-Year Ending December 31,
    
    Amount
    
    
    Average Rate2011
    
    $
    2,496
    
    
    
    3.93
    %2012
    
    
    3,854
    
    
    
    4.042013
    
    
    1,362
    
    
    
    3.952014
    
    
    984
    
    
    
    3.992015
    
    
    685
    
    
    
    4.01Beyond 2015
    
    
    9,940
    
    
    
    6.14$
    19,321
    
    
    
    5.10
    %
    Middlefield Banc Corp.




---



##### 



12.
    
    OTHER LIABILITIES
  2010
    
    
    2009Accrued interest payable
    
    $
    790
    
    
    $
    905Other
    
    
    1,181
    
    
    
    1,275Total
    
    $
    1,971
    
    
    $
    2,180
 13.
    
    INCOME TAXES
  (Dollar amounts in thousands)
    
    2010
    
    
    2009
    
    
    2008Current payable
    
    $
    689
    
    
    $
    396
    
    
    $
    657Deferred
    
    
    (777
    )
    
    
    (469
    )
    
    
    (270
    )Total provision (benefit)
    
    $
    (88
    )
    
    $
    (73
    )
    
    $
    387
  (Dollar amounts in thousands)
    
    2010
    
    
    2009Deferred tax assets:Allowance for loan losses
    
    $
    2,115
    
    
    $
    1,530Supplemental retirement plan
    
    
    168
    
    
    
    149Alternative minimum tax credits
    
    
    353
    
    
    
    268Investment security basis adjustment
    
    
    171
    
    
    
    158Nonaccrual interest income
    
    
    272
    
    
    
    Deferred origination fees, net
    
    
    69
    
    
    
    18Net operating losses
    
    
    294
    
    
    
    399Other
    
    
    157
    
    
    
    78Gross deferred tax assets
    
    
    3,599
    
    
    
    2,600Deferred tax liabilities:Premises and equipment
    
    
    287
    
    
    
    215Net unrealized gain on securities
    
    
    148
    
    
    
    290FHLB stock dividends
    
    
    225
    
    
    
    225Intangibles
    
    
    159
    
    
    
    63Other
    
    
    65
    
    
    
    12Gross deferred tax liabilities
    
    
    884
    
    
    
    805Net deferred tax assets
    
    $
    2,715
    
    
    $
    1,795
 2010 Annual Report




---



##### 



2010
    
    
    2009
    
    
    2008% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofPre-tax
    
    
    
    
    
    
    Pre-tax
    
    
    
    
    
    
    Pre-tax(Dollar amounts in thousands)
    
    Amount
    
    
    Income
    
    
    Amount
    
    
    Income
    
    
    Amount
    
    
    IncomeProvision at statutory rate
    
    $
    827
    
    
    
    34.0
    %
    
    $
    581
    
    
    
    34.0
    %
    
    $
    1,021
    
    
    
    34.0
    %Tax-free income
    
    
    (993
    )
    
    
    (40.9
    )
    
    
    (729
    )
    
    
    (42.7
    )
    
    
    (713
    )
    
    
    (23.8
    )Nondeductible interest expense
    
    
    76
    
    
    
    3.1
    
    
    
    73
    
    
    
    4.3
    
    
    
    96
    
    
    
    3.2Other
    
    
    2
    
    
    
    0.2
    
    
    
    2
    
    
    
    0.1
    
    
    
    (17
    )
    
    
    (0.7
    )Actual tax expense and effective rate
    
    $
    (88
    )
    
    
    (3.6
    )%
    
    $
    (73
    )
    
    
    (4.3
    )%
    
    $
    387
    
    
    
    12.7
    %
  14.
    
    EMPLOYEE BENEFITS
 Retirement Plan
  Middlefield Banc Corp.




---



##### 



Supplemental Retirement Plan
   (Dollar amounts in thousands)
    
    2010
    
    
    2009
    
    
    2008Components of net periodic pension costs:Service cost
    
    $
    1
    
    
    $
    6
    
    
    $
    12Interest cost
    
    
    13
    
    
    
    13
    
    
    
    13Net periodic pension cost
    
    $
    14
    
    
    $
    19
    
    
    $
    25
 Executive Deferred Compensation Plan
  Stock Option and Restricted Stock Plan
   Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise2010
    
    
    Price
    
    
    2009
    
    
    PriceOutstanding, January 1
    
    
    99,219
    
    
    $
    26.85
    
    
    
    110,465
    
    
    $
    27.21Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    (10,142
    )
    
    
    17.90
    
    
    
    (11,246
    )
    
    
    30.34Outstanding, December 31
    
    
    89,077
    
    
    
    27.87
    
    
    
    99,219
    
    
    
    26.85Exercisable at year-end
    
    
    89,077
    
    
    
    27.87
    
    
    
    99,219
    
    
    
    26.85
 2010 Annual Report




---



##### 



Outstanding
    
    
    ExercisableContractual
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Average
    
    
    Exercise
    
    
    
    
    
    
    ExerciseGrant Date
    
    Price
    
    
    Shares
    
    
    Life
    
    
    Price
    
    
    Shares
    
    
    PriceDecember 9, 2002
    
    $
    22.33
    
    
    
    9,426
    
    
    $
    1.94
    
    
    
    22.33
    
    
    $
    9,426
    
    
    
    22.33December 8, 2003
    
    
    24.29
    
    
    
    20,663
    
    
    
    2.94
    
    
    
    24.29
    
    
    
    20,663
    
    
    
    24.29May 12, 2004
    
    
    27.35
    
    
    
    907
    
    
    
    3.33
    
    
    
    27.35
    
    
    
    907
    
    
    
    27.35December 13, 2004
    
    
    30.45
    
    
    
    12,958
    
    
    
    3.95
    
    
    
    30.45
    
    
    
    12,958
    
    
    
    30.45December 14, 2005
    
    
    36.73
    
    
    
    8,485
    
    
    
    4.95
    
    
    
    36.73
    
    
    
    8,485
    
    
    
    36.73December 10, 2006
    
    
    40.24
    
    
    
    3,675
    
    
    
    5.95
    
    
    
    40.24
    
    
    
    3,675
    
    
    
    40.24April 19, 2007
    
    
    37.33
    
    
    
    3,639
    
    
    
    6.31
    
    
    
    37.33
    
    
    
    3,639
    
    
    
    37.73May 16, 2007
    
    
    37.48
    
    
    
    1,337
    
    
    
    6.41
    
    
    
    37.48
    
    
    
    1,337
    
    
    
    37.48December 10, 2007
    
    
    37.00
    
    
    
    3,150
    
    
    
    6.95
    
    
    
    37.00
    
    
    
    3,150
    
    
    
    37.00January 2, 2008
    
    
    36.25
    
    
    
    1,337
    
    
    
    7.12
    
    
    
    36.25
    
    
    
    1,337
    
    
    
    36.25November 10, 2008
    
    
    23.00
    
    
    
    23,500
    
    
    
    7.95
    
    
    
    23.00
    
    
    
    23,500
    
    
    
    23.0089,077
    
    
    
    
    
    
    
    
    
    
    
    89,077
 For the years ended December 31, 2010, 2009, and 2008, the Company granted 110, 150, and
150, respectively, of common stock under the restricted stock plan. The Company recognizes
compensation expense in the amount of fair value of the common stock at the grant date and as
an addition to stockholders equity.
 15.
    
    COMMITMENTS
 In the normal course of business, there are various outstanding commitments and certain
contingent liabilities which are not reflected in the accompanying consolidated financial
statements. These commitments and contingent liabilities represent financial instruments with
off-balance sheet risk. The contract or notional amounts of those instruments reflect the
extent of involvement in particular types of financial instruments which were composed of the
following:
 (Dollar amounts in thousands)
    
    2010
    
    
    2009Commitments to extend credit
    
    $
    68,972
    
    
    $
    59,498Standby letters of credit
    
    
    789
    
    
    
    351Total
    
    $
    69,761
    
    
    $
    59,849
   Middlefield Banc Corp.




---



##### 



Leasing Arrangements
  2011
    
    $
    2052012
    
    
    2172013
    
    
    2192014
    
    
    2212015
    
    
    226Thereafter
    
    
    628
 The above amounts represent minimum rentals not adjusted for possible future increases
due to escalation provisions and assume that all renewal option periods will be exercised by
the Company. Rent expense approximated $234,000 and $246,000 for the years ended December 31,
2010 and 2009.
 16.
    
    REGULATORY RESTRICTIONS
 The Company is subject to the regulatory requirements of the Federal Reserve System as a
multi-bank holding company. The affiliate banks are subject to regulations of the Federal
Deposit Insurance Corporation (FDIC) and the State of Ohio, Division of Financial
Institutions.
 Effective February 11, 2010, the Board of Directors of the Companys subsidiary, EB, entered
into a Memorandum of Understanding (MOU) with the FDIC and the Ohio Division of Financial
Institutions as a result of the joint examination by the FDIC and the Ohio Division of
Financial Institutions completed in the fourth quarter of 2009. The MOU sets forth certain
actions required to be taken by management of EB to rectify unsatisfactory conditions
identified by the federal and state banking regulators that relate to EBs concentration of
credit for non-owner-occupied one-to-four family residential mortgage loans. The MOU requires
EB to reduce delinquent and classified loans and enhance credit administration for
non-owner-occupied residential real estate; to develop specific plans for the reduction of
borrower indebtedness on classified and delinquent credits; to correct violations of laws and
regulations listed in the joint examination report; to implement an earnings improvement plan;
to maintain specified capital discussed below; to submit to the FDIC and the Ohio Division of
Financial Institutions for review and comment a revised methodology for calculating and
determining the adequacy of the allowance for loan losses; and to provide 30 days advance
notification of proposed dividend payments.
 Compliance with the terms of the MOU is a high priority for the Company. In anticipation of
the requirements that would be imposed by the MOU executed February 11, 2010, management
devoted significant resources to the preceding matters during the fiscal year ended December
31, 2009, and continued to do so during 2010. Specific actions taken included the evaluation
and reorganization of lending and credit administration personnel, retention of collection and
workout personnel, and the sale of $4.6 million of nonperforming assets to a sister,
nonbank-asset resolution subsidiary established late in the fourth quarter of 2009. In 2009,
the Company invested $1.25 million in EB in the form of capital infusions to maintain Tier I
capital at the level expected by the FDIC and the Ohio Division of Financial Institutions.
 The MOU requires that EB submit plans and report to the Ohio Division of Financial
Institutions and the FDIC regarding EBs loan portfolio and profit plan, among other matters.
The MOU also requires that EB maintain its Tier I Leverage Capital ratio at not less than 9
percent. At December 31, 2010, the ratio was 9.45 percent.
 2010 Annual Report




---



##### 



Cash Requirements
 The district Federal Reserve Bank requires the Bank to maintain certain average reserve
balances. As of December 31, 2010 and 2009, the Company had required reserves of $4,625,000
and $2,910,000 comprised vault cash and a depository amount held with the Federal Reserve
Bank.
 Loans
 Federal law prevents the Company from borrowing from the Banks unless the loans are
secured by specific obligations. Further, such secured loans are limited in amount of 10
percent of the Banks common stock and capital surplus.
 Dividends
 MBC and EB are subject to dividend restrictions that generally limit the amount of
dividends that can be paid by an Ohio state-chartered bank. Under the Ohio Banking Code, cash
dividends may not exceed net profits as defined for that year combined with retained net
profits for the two preceding years less any required transfers to surplus. Under this
formula, for MBC, the amount available for payment of dividends for 2011 approximates
$4,187,000 plus 2011 profits retained up to the date of the dividend declaration. For EB, the
amount available for payment of dividends for 2011 is $0 until the net deficit for the two
preceding years of $1,616,000 is overcome.
 17.
    
    REGULATORY CAPITAL
 Federal regulations require the Company and the Banks to maintain minimum amounts of
capital. Specifically, each is required to maintain certain minimum dollar amounts and ratios
of Total and Tier I capital to risk-weighted assets and of Tier I capital to average total
assets.
 In addition to the capital requirements, the Federal Deposit Insurance Corporation Improvement
Act (FDICIA) established five capital categories ranging from well capitalized to
critically undercapitalized. Should any institution fail to meet the requirements to be
considered adequately capitalized, it would become subject to a series of increasingly
restrictive regulatory actions.
 As of December 31, 2010 and 2009, the FDIC categorized the Banks as well capitalized under the
regulatory framework for prompt corrective action. To be classified as a well capitalized
financial institution, Total risk-based, Tier 1 risk-based, and Tier 1 Leverage capital ratios
must be at least 10 percent, 6 percent, and 5 percent, respectively.
 The Companys and its subsidiaries actual capital ratios are presented in the following table
that shows that all regulatory capital requirements were met as of December 31, 2010.
 Middlefield Banc Corp.




---



##### 



Middlefield Banc Corp.
    
    
    The Middlefield Banking Co.
    
    
    Emerald BankDecember 31,
    
    
    December 31,
    
    
    December 31,2010
    
    
    2010
    
    
    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
  Middlefield Banc Corp.
    
    
    The Middlefield Banking Co.
    
    
    Emerald BankDecember 31,
    
    
    December 31,
    
    
    December 31,2009
    
    
    2009
    
    
    2009(Dollar amounts in thousands)
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioTotal Capital (to Risk-weighted Assets)Actual
    
    $
    43,549
    
    
    
    12.34
    %
    
    $
    34,838
    
    
    
    11.47
    %
    
    $
    7,067
    
    
    
    14.91
    %For Capital Adequacy Purposes
    
    
    28,243
    
    
    
    8.00
    
    
    
    24,306
    
    
    
    8.00
    
    
    
    3,793
    
    
    
    8.00To Be Well Capitalized
    
    
    35,304
    
    
    
    10.00
    
    
    
    30,382
    
    
    
    10.00
    
    
    
    4,741
    
    
    
    10.00Tier I Capital (to Risk-weighted Assets)Actual
    
    $
    39,121
    
    
    
    11.08
    %
    
    $
    31,640
    
    
    
    10.41
    %
    
    $
    6,460
    
    
    
    13.63
    %For Capital Adequacy Purposes
    
    
    14,121
    
    
    
    4.00
    
    
    
    12,153
    
    
    
    4.00
    
    
    
    1,896
    
    
    
    4.00To Be Well Capitalized
    
    
    21,182
    
    
    
    6.00
    
    
    
    18,229
    
    
    
    6.00
    
    
    
    2,845
    
    
    
    6.00Tier I Capital (to Average Assets)Actual
    
    $
    39,121
    
    
    
    7.99
    %
    
    $
    31,640
    
    
    
    7.45
    %
    
    $
    6,460
    
    
    
    10.29
    %For Capital Adequacy Purposes
    
    
    19,583
    
    
    
    4.00
    
    
    
    16,984
    
    
    
    4.00
    
    
    
    2,510
    
    
    
    4.00To Be Well Capitalized
    
    
    24,479
    
    
    
    5.00
    
    
    
    21,230
    
    
    
    5.00
    
    
    
    3,138
    
    
    
    5.00
 2010 Annual Report




---



##### 



18.
    
    REORGANIZATION
 On October 23, 2009, the Company received from the Federal Reserve Bank of Cleveland
approval to establish an asset resolution subsidiary. Organized as an Ohio corporation under
the name EMORECO, Inc. and wholly owned by the Company, the purpose of the asset resolution
subsidiary is to maintain, manage, and ultimately dispose of nonperforming loans and real
estate acquired by subsidiary banks as the result of borrower default on real-estate-secured
loans. EMORECOs assets consist of 26 nonperforming loans and three real estate development
properties consisting of 18 lots transferred by Emerald Bank. EMORECO paid to Emerald Bank a
total of approximately $4.6 million for the nonperforming loans and real estate, using funds
contributed by the Company, which were borrowed under lines of credit of the holding company.
According to Federal law governing bank holding companies, the real estate must be disposed of
within two years after the properties were originally acquired by Emerald Bank, which occurred
in May and June of 2008, although limited extensions may be granted by the Federal Reserve
Bank. Federal law governing bank holding companies also provides that a holding company
subsidiary has limited real estate investment powers. EMORECO may only manage and maintain
property and may not improve or develop property without advance approval of the Federal
Reserve Bank.
 Until recently, Middlefield Banc Corp. has been entitled to engage in the expanded range of
activities in which a financial holding company, as defined in Federal Reserve Board rules,
may engage. However, Middlefield Banc Corp. has not taken advantage of that expanded authority
and has elected to rescind its financial holding company status. Middlefield Banc Corp.
continues to be entitled to engage in activities deemed permissible to a bank holding company,
as defined by Federal Reserve Board rules and the applicable laws of the United States.
 19.
    
    FAIR VALUE DISCLOSURE MEASUREMENTS
 The following disclosures show the hierarchal disclosure framework associated with the
level of pricing observations utilized in measuring assets and liabilities at fair value. The
three broad levels defined by U.S. generally accepted accounting principles are as follows:
 Level I:
    
    Quoted prices are available in active markets for identical assets or
liabilities as of the reported date.Level II:
    
    Pricing inputs are other than the quoted prices in active markets, which
are either directly or indirectly observable as of the reported date. The nature of these
assets and liabilities includes items for which quoted prices are available but traded less
frequently and items that are fair-valued using other financial instruments, the parameters of
which can be directly observed.Level III:
    
    Valuations derived from valuation techniques in which one or more
significant inputs or significant value drivers are unobservable.
 This hierarchy requires the use of observable market data when available.
 Middlefield Banc Corp.




---



##### 



December 31, 2010(Dollar amounts in thousands)
    
    Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAssets Measured on a Recurring Basis:U.S. government agency securities
    
    $
    
    
    
    $
    32,603
    
    
    $
    
    
    
    $
    32,603Obligations of states and political subdivisions
    
    
    
    
    
    
    76,880
    
    
    
    
    
    
    
    76,880Mortgage-backed securities
    
    
    
    
    
    
    91,369
    
    
    
    
    
    
    
    91,369Total debt securities
    
    
    
    
    
    
    200,852
    
    
    
    
    
    
    
    200,852Equity securities
    
    
    920
    
    
    
    
    
    
    
    
    
    
    
    920Total
    
    $
    920
    
    
    $
    200,852
    
    
    $
    
    
    
    $
    201,772
 December 31, 2009Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAssets Measured on a Recurring Basis:U.S. government agency securities
    
    $
    
    
    
    $
    18,330
    
    
    $
    
    
    
    $
    18,330Obligations of states and political subdivisions
    
    
    
    
    
    
    56,721
    
    
    
    
    
    
    
    56,721Mortgage-backed securities
    
    
    
    
    
    
    60,741
    
    
    
    
    
    
    
    60,741Total debt securities
    
    
    
    
    
    
    135,792
    
    
    
    
    
    
    
    135,792Equity securities
    
    
    919
    
    
    
    
    
    
    
    
    
    
    
    919Total
    
    $
    919
    
    
    $
    135,792
    
    
    $
    
    
    
    $
    136,711
    2010 Annual Report




---



##### 



December 31, 2010(Dollar amounts in thousands)
    
    Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAssets Measured on a Nonrecurring Basis:Impaired loans
    
    $
    
    
    
    $
    4,312
    
    
    $
    2,758
    
    
    $
    7,070Other real estate owned
    
    
    
    
    
    
    2,302
    
    
    
    
    
    
    
    2,302
 December 31, 2009Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAssets Measured on a Nonrecurring Basis:Impaired loans
    
    $
    
    
    
    $
    5,644
    
    
    $
    149
    
    
    $
    5,793Other real estate owned
    
    
    
    
    
    
    2,164
    
    
    
    
    
    
    
    2,164
  December 31,2010
    
    
    2009Carrying
    
    
    Fair
    
    
    Carrying
    
    
    Fair(Dollar amounts in thousands)
    
    Value
    
    
    Value
    
    
    Value
    
    
    ValueFinancial assets:Cash and cash equivalents
    
    $
    30,635
    
    
    $
    30,635
    
    
    $
    41,153
    
    
    $
    41,153Investment securities available for sale
    
    
    201,772
    
    
    
    201,772
    
    
    
    136,711
    
    
    
    136,711Net loans
    
    
    366,277
    
    
    
    347,599
    
    
    
    348,660
    
    
    
    332,401Bank-owned life insurance
    
    
    7,979
    
    
    
    7,979
    
    
    
    7,707
    
    
    
    7,707Federal Home Loan Bank stock
    
    
    1,887
    
    
    
    1,887
    
    
    
    1,887
    
    
    
    1,887Accrued interest receivable
    
    
    2,259
    
    
    
    2,259
    
    
    
    1,411
    
    
    
    1,411Financial liabilities:Deposits
    
    $
    565,251
    
    
    $
    570,471
    
    
    $
    487,106
    
    
    $
    491,436Short-term borrowings
    
    
    7,632
    
    
    
    7,632
    
    
    
    6,800
    
    
    
    6,800Other borrowings
    
    
    19,321
    
    
    
    19,801
    
    
    
    25,865
    
    
    
    27,356Accrued interest payable
    
    
    790
    
    
    
    790
    
    
    
    905
    
    
    
    905
    Middlefield Banc Corp.




---



##### 



Cash and Cash Equivalents, Federal Home Loan Bank Stock, Accrued Interest Receivable, Accrued
Interest Payable, and Short-Term Borrowings
  Bank-Owned Life Insurance
  Investment Securities Available for Sale
  Loans
  Deposits and Other Borrowed Funds
  Commitments to Extend Credit
  2010 Annual Report




---



##### 



20.
    
    PARENT COMPANY
  (Dollar amounts in thousands)
    
    December 31,CONDENSED BALANCE SHEET
    
    2010
    
    
    2009ASSETSCash and due from banks
    
    $
    257
    
    
    $
    979Interest-bearing deposits in other institutions
    
    
    
    
    
    
    121Investment securities available for sale
    
    
    920
    
    
    
    919Investment in non-bank subsidiary
    
    
    3,385
    
    
    
    4,543Investment in subsidiary bank
    
    
    46,666
    
    
    
    43,951Other assets
    
    
    840
    
    
    
    248TOTAL ASSETS
    
    $
    52,068
    
    
    $
    50,761LIABILITIESTrust preferred securities
    
    $
    8,248
    
    
    $
    8,248Short-term borrowings
    
    
    5,700
    
    
    
    5,700Other liabilities
    
    
    98
    
    
    
    106TOTAL LIABILITIES
    
    
    14,046
    
    
    
    14,054STOCKHOLDERS EQUITY
    
    
    38,022
    
    
    
    36,707TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    52,068
    
    
    $
    50,761
 (Dollar amounts in thousands)
    
    Year Ended December 31,CONDENSED STATEMENT OF INCOME
    
    2010
    
    
    2009
    
    
    2008INCOMEDividends from subsidiary bank
    
    $
    2,061
    
    
    $
    2,189
    
    
    $
    2,184Interest income
    
    
    3
    
    
    
    9
    
    
    
    10Other
    
    
    17
    
    
    
    
    
    
    
    5TOTAL INCOME
    
    
    2,081
    
    
    
    2,198
    
    
    
    2,199EXPENSESInterest expense
    
    
    773
    
    
    
    547
    
    
    
    539Other
    
    
    270
    
    
    
    266
    
    
    
    379TOTAL INCOME
    
    
    1,043
    
    
    
    813
    
    
    
    918Income before income tax benefit
    
    
    1,038
    
    
    
    1,385
    
    
    
    1,281Income tax benefit
    
    
    (348
    )
    
    
    (273
    )
    
    
    (323
    )Income before equity in undistributed net income of subsidiaries
    
    
    1,386
    
    
    
    1,658
    
    
    
    1,604Equity in undistributed net income of subsidiaries
    
    
    1,131
    
    
    
    123
    
    
    
    1,011NET INCOME
    
    $
    2,517
    
    
    $
    1,781
    
    
    $
    2,615
 Middlefield Banc Corp.




---



##### 



(Dollar amounts in thousands)
    
    Year Ended December 31,CONDENSED STATEMENT OF CASH FLOWS
    
    2010
    
    
    2009
    
    
    2008OPERATING ACTIVITIESNet income
    
    $
    2,517
    
    
    $
    1,781
    
    
    $
    2,615Adjustments
to reconcile net income to net cash provided by operating activities:Equity in undistributed net income of Middlefield Banking Company
    
    
    (2,582
    )
    
    
    (1,604
    )
    
    
    (982
    )Equity in undistributed net income of Emerald Bank
    
    
    292
    
    
    
    1,325
    
    
    
    (29
    )Equity in undistributed net income of EMORECO
    
    
    1,159
    
    
    
    156
    
    
    
    Compensation expense on stock options
    
    
    
    
    
    
    61
    
    
    
    15Other
    
    
    (602
    )
    
    
    (125
    )
    
    
    168Net cash provided by operating activities
    
    
    784
    
    
    
    1,594
    
    
    
    1,787INVESTING ACTIVITIESInvestment in subsidiary bank
    
    
    (500
    )
    
    
    (1,250
    )
    
    
    Investment in non-bank subsidiary
    
    
    
    
    
    
    (4,700
    )
    
    
    Net cash (used for) investing activities
    
    
    (500
    )
    
    
    (5,950
    )
    
    
    FINANCING ACTIVITIESNet increase in short-term borrowings
    
    
    
    
    
    
    5,700
    
    
    
    Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    (1,351
    )Exercise of stock options
    
    
    
    
    
    
    
    
    
    
    21Proceeds from dividend reinvestment plan
    
    
    510
    
    
    
    557
    
    
    
    616Cash dividends
    
    
    (1,637
    )
    
    
    (1,608
    )
    
    
    (1,576
    )Net cash provided by (used for) financing activities
    
    
    1,127
    
    
    
    4,649
    
    
    
    (2,290
    )Increase (decrease) in cash
    
    
    (843
    )
    
    
    293
    
    
    
    (503
    )CASH AT BEGINNING OF YEAR
    
    
    1,100
    
    
    
    807
    
    
    
    1,310CASH AT END OF YEAR
    
    $
    257
    
    
    $
    1,100
    
    
    $
    807
 21.
    
    SUBSEQUENT EVENTS
  2010 Annual Report




---



##### 



22.
    
    SELECTED QUARTERLY FINANCIAL DATA

(Unaudited)
 Three Months EndedMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,(Dollar amounts in thousands)
    
    2010
    
    
    2010
    
    
    2010
    
    
    2010Total interest income
    
    $
    6,924
    
    
    $
    7,332
    
    
    $
    7,368
    
    
    $
    7,470Total interest expense
    
    
    2,869
    
    
    
    2,747
    
    
    
    2,752
    
    
    
    2,577Net interest income
    
    
    4,055
    
    
    
    4,585
    
    
    
    4,616
    
    
    
    4,893Provision for loan losses
    
    
    439
    
    
    
    690
    
    
    
    1,226
    
    
    
    1,225Net interest income after provision for loan losses
    
    
    3,616
    
    
    
    3,895
    
    
    
    3,390
    
    
    
    3,668Total noninterest income
    
    
    609
    
    
    
    685
    
    
    
    695
    
    
    
    634Total noninterest expense
    
    
    3,558
    
    
    
    3,828
    
    
    
    3,742
    
    
    
    3,635Income before income taxes
    
    
    667
    
    
    
    752
    
    
    
    343
    
    
    
    667Income taxes
    
    
    22
    
    
    
    38
    
    
    
    (120
    )
    
    
    (28
    )Net income
    
    $
    645
    
    
    $
    714
    
    
    $
    463
    
    
    $
    695Per share data:Net incomeBasic
    
    $
    0.41
    
    
    $
    0.46
    
    
    $
    0.29
    
    
    $
    0.44Diluted
    
    
    0.41
    
    
    
    0.46
    
    
    
    0.29
    
    
    
    0.44Average shares outstandingBasic
    
    
    1,565,454
    
    
    
    1,570,852
    
    
    
    1,578,832
    
    
    
    1,575,213Diluted
    
    
    1,567,441
    
    
    
    1,572,084
    
    
    
    1,578,832
    
    
    
    1,575,821
 Three Months EndedMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,(Dollar amounts in thousands)
    
    2009
    
    
    2009
    
    
    2009
    
    
    2009Total interest income
    
    $
    6,324
    
    
    $
    6,305
    
    
    $
    6,647
    
    
    $
    6,775Total interest expense
    
    
    3,111
    
    
    
    2,934
    
    
    
    2,861
    
    
    
    2,877Net interest income
    
    
    3,213
    
    
    
    3,371
    
    
    
    3,786
    
    
    
    3,898Provision for loan losses
    
    
    154
    
    
    
    260
    
    
    
    1,346
    
    
    
    818Net interest income after provision for loan losses
    
    
    3,059
    
    
    
    3,111
    
    
    
    2,440
    
    
    
    3,080Total noninterest income
    
    
    624
    
    
    
    636
    
    
    
    690
    
    
    
    718Total noninterest expense
    
    
    2,996
    
    
    
    3,303
    
    
    
    3,040
    
    
    
    3,311Income before income taxes
    
    
    687
    
    
    
    444
    
    
    
    90
    
    
    
    487Income taxes
    
    
    84
    
    
    
    (17
    )
    
    
    (123
    )
    
    
    (17
    )Net income
    
    $
    603
    
    
    $
    461
    
    
    $
    213
    
    
    $
    504Per share data:Net incomeBasic
    
    $
    0.39
    
    
    $
    0.30
    
    
    $
    0.14
    
    
    $
    0.32Diluted
    
    
    0.39
    
    
    
    0.30
    
    
    
    0.14
    
    
    
    0.32Average shares outstandingBasic
    
    
    1,536,930
    
    
    
    1,541,960
    
    
    
    1,551,056
    
    
    
    1,547,239Diluted
    
    
    1,541,247
    
    
    
    1,543,538
    
    
    
    1,551,069
    
    
    
    1,551,069
 Middlefield Banc Corp.




---



##### 



2010 Annual Report




---



##### 



Overview
     Significant Factors Affecting Financial Results
  Middlefield Banc Corp




---



##### 



2010 Annual Report




---



##### 



Critical Accounting Policies
 Allowance for loan losses
    Valuation of Securities
   Middlefield Banc Corp




---



##### 




    
    The length of time and the extent to which the fair value has been less than the amortized cost
basis.
 
    
    Changes in the near-term prospects of the underlying collateral of a security such as changes
in default rates, loss severity given default and significant changes in prepayment
assumptions.
 
    
    The level of cash flows generated from the underlying collateral supporting the principal and
interest payments of the debt securities.
 
    
    Any adverse change to the credit conditions and liquidity of the issuer, taking into
consideration the latest information available about the overall financial condition of the
issuer, credit ratings, recent legislation and government actions affecting the issuers
industry and actions taken by the issuer to deal with the present economic climate.
   Income Taxes
    2010 Annual Report




---



##### 



Changes in Financial Condition
 General.
   Cash on hand, interest-earning deposits, and federal funds sold.
 Securities.
  Middlefield
Banc Corp




---



##### 



Loans receivable.
     FHLB stock.
 Goodwill.
 2010 Annual Report




---



##### 



Bank-owned life insurance.
 Deposits.
   Borrowed funds.
 Stockholders equity.
 Middlefield
Banc Corp




---



##### 



Average balance sheet and yield/rate analysis.
 For The Year Ended December 31,2010
    
    
    2009
    
    
    2008Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    Interest
    
    
    Yield/Cost
    
    
    Balance
    
    
    Interest
    
    
    Yield/Cost
    
    
    Balance
    
    
    Interest
    
    
    Yield/Cost(Dollars in thousands)
    
    
    (Dollars in thousands)
    
    
    (Dollars in thousands)Interest-earning assets:Loans receivable
    
    $
    362,239
    
    
    $
    21,084
    
    
    
    5.82
    %
    
    $
    335,714
    
    
    $
    20,271
    
    
    
    6.04
    %
    
    $
    317,226
    
    
    $
    21,426
    
    
    
    6.75
    %Investments securities (3)
    
    
    177,377
    
    
    
    7,835
    
    
    
    5.19
    %
    
    
    110,142
    
    
    
    5,676
    
    
    
    6.03
    %
    
    
    96,277
    
    
    
    4,349
    
    
    
    5.48
    %Interest-bearing deposits with
other banks
    
    
    32,466
    
    
    
    175
    
    
    
    0.54
    %
    
    
    16,078
    
    
    
    104
    
    
    
    0.64
    %
    
    
    7,701
    
    
    
    263
    
    
    
    3.41
    %Total interest-earning assets
    
    
    572,082
    
    
    
    29,094
    
    
    
    5.32
    %
    
    
    461,934
    
    
    
    26,051
    
    
    
    5.85
    %
    
    
    421,204
    
    
    
    26,038
    
    
    
    6.40
    %Noninterest-earning assets
    
    
    39,896
    
    
    
    
    
    
    
    
    
    
    
    33,777
    
    
    
    
    
    
    
    
    
    
    
    29,658Total assets
    
    
    611,978
    
    
    
    
    
    
    
    
    
    
    
    495,711
    
    
    
    
    
    
    
    
    
    
    
    450,862Interest-bearing liabilities:Interest-bearing demand deposits
    
    $
    43,714
    
    
    
    394
    
    
    
    0.90
    %
    
    $
    32,609
    
    
    
    318
    
    
    
    0.98
    %
    
    $
    24,178
    
    
    
    297
    
    
    
    1.23
    %Money market deposits
    
    
    66,392
    
    
    
    942
    
    
    
    1.42
    %
    
    
    37,200
    
    
    
    760
    
    
    
    2.04
    %
    
    
    25,042
    
    
    
    783
    
    
    
    3.13
    %Savings deposits
    
    
    130,107
    
    
    
    1,616
    
    
    
    1.24
    %
    
    
    87,295
    
    
    
    1,371
    
    
    
    1.57
    %
    
    
    70,868
    
    
    
    1,363
    
    
    
    1.92
    %Certificates of deposit
    
    
    248,445
    
    
    
    6,552
    
    
    
    2.64
    %
    
    
    225,821
    
    
    
    7,847
    
    
    
    3.47
    %
    
    
    216,732
    
    
    
    9,909
    
    
    
    4.57
    %Borrowings
    
    
    30,865
    
    
    
    1,441
    
    
    
    4.67
    %
    
    
    32,071
    
    
    
    1,487
    
    
    
    4.63
    %
    
    
    36,229
    
    
    
    1,706
    
    
    
    4.70
    %Total interest-bearing liabilities
    
    
    519,523
    
    
    
    10,945
    
    
    
    2.11
    %
    
    
    414,996
    
    
    
    11,783
    
    
    
    2.84
    %
    
    
    373,049
    
    
    
    14,058
    
    
    
    3.77
    %Noninterest-bearing liabilitiesOther liabilities
    
    
    53,350
    
    
    
    
    
    
    
    
    
    
    
    44,358
    
    
    
    
    
    
    
    
    
    
    
    44,762Stockholders equity
    
    
    39,105
    
    
    
    
    
    
    
    
    
    
    
    36,357
    
    
    
    
    
    
    
    
    
    
    
    33,051Total liabilities and
stockholders equity
    
    $
    611,978
    
    
    
    
    
    
    
    
    
    
    $
    495,711
    
    
    
    
    
    
    
    
    
    
    $
    450,862Net interest income
    
    
    
    
    
    $
    18,149
    
    
    
    
    
    
    
    
    
    
    $
    14,268
    
    
    
    
    
    
    
    
    
    
    $
    11,980Interest rate spread (1)
    
    
    
    
    
    
    
    
    
    
    3.22
    %
    
    
    
    
    
    
    
    
    
    
    3.01
    %
    
    
    
    
    
    
    
    
    
    
    2.63
    %Net yield on interest-earning
assets (2)
    
    
    
    
    
    
    
    
    
    
    3.41
    %
    
    
    
    
    
    
    
    
    
    
    3.30
    %
    
    
    
    
    
    
    
    
    
    
    3.06
    %Ratio of average interest-earning
assets to average
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    110.12
    %
    
    
    
    
    
    
    
    
    
    
    111.31
    %
    
    
    
    
    
    
    
    
    
    
    112.91
    %
 (1)
    
    Interest rate spread represents the difference between the average yield on interest-earning
assets and the average cost of interest-bearing liabilities.(2)
    
    Net yield on interest-earning assets represents net interest income as a percentage of average
interest-earning assets.(3)
    
    Tax equivalent adjustments to interest income for tax-exempt securities were $1,365, $969, and
$932 for 2010, 2009, and 2008 respectively. 2010 Annual Report




---



##### 



2010 versus 2009
    
    
    2009 versus 2008Increase (decrease) due to
    
    
    Increase (decrease) due toVolume
    
    
    Rate
    
    
    Total
    
    
    Volume
    
    
    Rate
    
    
    Total(Dollars in thousands)
    
    
    (Dollars in thousands)Interest-earning assets:Loans receivable
    
    $
    1,602
    
    
    $
    (789
    )
    
    $
    813
    
    
    $
    1,249
    
    
    $
    (2,404
    )
    
    $
    (1,155
    )Investments securities
    
    
    4,057
    
    
    
    (1,898
    )
    
    
    2,159
    
    
    
    760
    
    
    
    567
    
    
    
    1,327Interest-bearing deposits with other banks
    
    
    106
    
    
    
    (35
    )
    
    
    71
    
    
    
    286
    
    
    
    (445
    )
    
    
    (159
    )Total interest-earning assets
    
    
    5,765
    
    
    
    (2,722
    )
    
    
    3,043
    
    
    
    2,295
    
    
    
    (2,282
    )
    
    
    13Interest-bearing liabilities:Interest-bearing demand deposits
    
    
    108
    
    
    
    (32
    )
    
    
    76
    
    
    
    104
    
    
    
    (83
    )
    
    
    21Money market deposits
    
    
    597
    
    
    
    (416
    )
    
    
    181
    
    
    
    381
    
    
    
    (404
    )
    
    
    (23
    )Savings deposits
    
    
    672
    
    
    
    (427
    )
    
    
    245
    
    
    
    315
    
    
    
    (307
    )
    
    
    8Certificates of deposit
    
    
    786
    
    
    
    (2,081
    )
    
    
    (1,295
    )
    
    
    415
    
    
    
    (2,480
    )
    
    
    (2,065
    )Borrowings
    
    
    (56
    )
    
    
    11
    
    
    
    (45
    )
    
    
    (195
    )
    
    
    (21
    )
    
    
    (216
    )Total interest-bearing liabilities
    
    
    2,107
    
    
    
    (2,945
    )
    
    
    (838
    )
    
    
    1,020
    
    
    
    (3,295
    )
    
    
    (2,275
    )Net interest income
    
    $
    3,658
    
    
    $
    223
    
    
    $
    3,881
    
    
    $
    1,275
    
    
    $
    1,013
    
    
    $
    2,288
 Changes in Results of Operations
 2010 Results Compared to 2009 Results
 General.
 Net interest income.
   Middlefield
Banc Corp




---



##### 



Interest income.
  Interest expense.
 Loan loss provision.
  2010 Annual Report




---



##### 



Noninterest income.
 Noninterest expense.
 Provision for income taxes.
 2009 Results Compared to 2008 Results
 General.
 Net interest income.
 Middlefield
Banc Corp




---



##### 



Interest income.
  Interest expense.
 Loan loss provision.
 2010 Annual Report




---



##### 



Noninterest income.
 Noninterest expense.
 Provision for income taxes.
 Asset and Liability Management
  Middlefield
Banc Corp




---



##### 



Interest Rate Sensitivity Simulation Analysis
    Net interest income simulation.
 Portfolio equity simulation.
  Increase
    
    
    Decrease+200 BP
    
    
    -200 BPNet interest incomeincrease (decrease)
    
    
    (0.04
    )%
    
    
    1.81
    %Portfolio equityincrease (decrease)
    
    
    (17.50
    )%
    
    
    (7.48
    )%
 2010 Annual Report




---



##### 



Allowance for loan losses.
      Middlefield
Banc Corp




---



##### 



For the Years Ended December 31,2010
    
    
    2009
    
    
    2008(Dollars in thousands)Allowance balance at beginning of period
    
    $
    4,937
    
    
    $
    3,557
    
    
    $
    3,299Loans charged off:Commercial and industrial
    
    
    (450
    )
    
    
    (217
    )
    
    
    (278
    )Real estate  construction
    
    
    
    
    
    
    
    
    
    
    Real estate  mortgage:Residential
    
    
    (1,433
    )
    
    
    (768
    )
    
    
    (2
    )Commercial
    
    
    (428
    )
    
    
    (81
    )
    
    
    Consumer installment
    
    
    (59
    )
    
    
    (221
    )
    
    
    (135
    )Total loans charged off
    
    
    (2,370
    )
    
    
    (1,287
    )
    
    
    (415
    )Recoveries of loans previously charged off:Commercial and industrial
    
    
    40
    
    
    
    33
    
    
    
    30Real estate  construction
    
    
    
    
    
    
    
    
    
    
    Real estate  mortgage:Residential
    
    
    
    
    
    
    
    
    
    
    2Commercial
    
    
    
    
    
    
    
    
    
    
    Consumer installment
    
    
    34
    
    
    
    56
    
    
    
    33Total recoveries
    
    
    74
    
    
    
    89
    
    
    
    65Net loans charged off
    
    
    (2,296
    )
    
    
    (1,198
    )
    
    
    (350
    )Provision for loan losses
    
    
    3,580
    
    
    
    2,578
    
    
    
    608Allowance balance at end of period
    
    $
    6,221
    
    
    $
    4,937
    
    
    $
    3,557Loans outstanding:Average
    
    $
    362,239
    
    
    $
    335,714
    
    
    $
    317,226End of period
    
    
    372,498
    
    
    
    353,597
    
    
    
    321,575Ratio of allowance for loan losses to loans outstanding at end of period
    
    
    1.67
    %
    
    
    1.40
    %
    
    
    1.11
    %Net charge offs to average loans
    
    
    (0.63
    )
    
    
    (0.36
    )
    
    
    (0.11
    )
  At December 31,2010
    
    
    2009
    
    
    2008Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent ofLoans in Each
    
    
    
    
    
    
    Loans in Each
    
    
    
    
    
    
    Loans in EachCategory to
    
    
    
    
    
    
    Category to
    
    
    
    
    
    
    Category toAmount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans(Dollars in thousands)
    
    
    (Dollars in thousands)
    
    
    (Dollars in thousands)Type of Loans:Commercial and industrial
    
    $
    1,234
    
    
    
    15.4
    %
    
    $
    864
    
    
    
    16.1
    %
    
    $
    961
    
    
    
    20.7
    %Real estate  construction
    
    
    356
    
    
    
    4.3
    
    
    
    
    
    
    
    2.2
    
    
    
    
    
    
    
    2.5Mortgage:Residential
    
    
    3,392
    
    
    
    56.3
    
    
    
    2,816
    
    
    
    58.0
    
    
    
    2,048
    
    
    
    62.0Commercial
    
    
    1,143
    
    
    
    22.6
    
    
    
    1,198
    
    
    
    22.3
    
    
    
    521
    
    
    
    13.3Consumer installment
    
    
    96
    
    
    
    1.4
    
    
    
    59
    
    
    
    1.4
    
    
    
    27
    
    
    
    1.5Total
    
    $
    6,221
    
    
    
    100
    %
    
    $
    4,937
    
    
    
    100
    %
    
    $
    3,557
    
    
    
    100
    %
 2010 Annual Report




---



##### 



Nonperforming assets.
   At December 31,2010
    
    
    2009
    
    
    2008(Dollars in thousands)Loans accounted for on a nonaccrual basis:Commercial and industrial
    
    $
    2,540
    
    
    $
    2,960
    
    
    $
    1,530Real estate  construction
    
    
    648
    
    
    
    248
    
    
    
    469Real estate  mortgage:Residential
    
    
    11,686
    
    
    
    10,134
    
    
    
    3,902Commercial
    
    
    3,513
    
    
    
    1,175
    
    
    
    351Consumer installment
    
    
    12
    
    
    
    2
    
    
    
    2Total non-accrual loans
    
    
    18,399
    
    
    
    14,519
    
    
    
    6,254Troubled debt restructuring:Commercial and industrial
    
    
    619
    
    
    
    
    
    
    
    Real estate  construction
    
    
    
    
    
    
    
    
    
    
    Real estate  mortgage:Residential
    
    
    530
    
    
    
    
    
    
    
    Commercial
    
    
    428
    
    
    
    
    
    
    
    Consumer installment
    
    
    10
    
    
    
    
    
    
    
    Total troubled debt restructuring
    
    
    1,587
    
    
    
    
    
    
    
    Accruing loans which are contractually past due 90 days or more:Commercial and industrial
    
    
    
    
    
    
    9
    
    
    
    558Real estate  construction
    
    
    
    
    
    
    205
    
    
    
    Real estate  mortgage:Residential
    
    
    
    
    
    
    441
    
    
    
    1,659Commercial
    
    
    
    
    
    
    1,111
    
    
    
    Consumer installment
    
    
    
    
    
    
    
    
    
    
    9Total accruing loans which are contractually past due 90 days or more
    
    
    
    
    
    
    1,766
    
    
    
    2,226Total nonperforming loans
    
    $
    19,986
    
    
    $
    16,285
    
    
    $
    8,480Real estate owned
    
    
    2,302
    
    
    
    2,164
    
    
    
    1,106Total nonperforming assets
    
    $
    22,288
    
    
    $
    18,450
    
    
    $
    9,586Total nonperforming loans to total loans
    
    
    5.37
    %
    
    
    4.61
    %
    
    
    2.64
    %Total nonperforming loans to total assets
    
    
    3.16
    %
    
    
    2.92
    %
    
    
    1.81
    %Total nonperforming assets to total assets
    
    
    3.53
    %
    
    
    3.30
    %
    
    
    2.05
    %
 Middlefield
Banc Corp.




---



##### 



Liquidity and Capital Resources
 Liquidity.
  Annual Report




---



##### 



Capital Resources.
  Middlefield
Banc Corp.




---



##### 



Market Price of and Dividends on the Registrants Common Equity and Related
Stockholder Matters
  CashHigh
    
    
    Low
    
    
    DividendsBid
    
    
    Bid
    
    
    Per share2010First Quarter
    
    $
    24.50
    
    
    $
    19.50
    
    
    $
    0.26Second Quarter
    
    $
    23.00
    
    
    $
    18.67
    
    
    $
    0.26Third Quarter
    
    $
    20.00
    
    
    $
    16.99
    
    
    $
    0.26Fourth Quarter
    
    $
    18.00
    
    
    $
    16.25
    
    
    $
    0.262009First Quarter
    
    $
    22.50
    
    
    $
    20.00
    
    
    $
    0.26Second Quarter
    
    $
    23.00
    
    
    $
    19.50
    
    
    $
    0.26Third Quarter
    
    $
    19.50
    
    
    $
    15.25
    
    
    $
    0.26Fourth Quarter
    
    $
    24.00
    
    
    $
    14.99
    
    
    $
    0.26
 Annual Report




---



##### 








---



##### 



Board of Directors
 Chairman, Board of Directors, Emerald Bank
 
 
 
 President and Chief Executive Officer
Middlefield Banc Corp.
The Middlefield Banking Company
 Chairman, Board of Directors, Middlefield Banc Corp.
The Middlefield Banking Company     President and Chief Executive Officer
Emerald Bank
 Officers
 President and Chief Executive Officer
 Chief Financial Officer and Treasurer
 Vice President
Commercial Lender
 Assistant Vice President
Westerville Branch Manager
 Assistant Vice President
Commercial Lender
 Administrative Officer
Accounting
 Administrative Officer
Loan Specialist
 Compliance Officer
   Middlefield
Banc Corp.




---



##### 



Staff
 Dublin Office:  Branch Supervisor  Customer Services  Customer Services
 Westerville Branch:  Teller Supervisor  Customer Services  Customer Services
 Branch Locations
 
 Dublin Branch Drive up ATM    
 
 Westerville Branch Drive up ATM    
   Annual Report




---



##### 



Staff
  Main Office:  Branch Manager  Head Teller  Customer Service Representative  Teller  Teller  Teller  Receptionist  CSR/Licensed Annuity Specialist  Teller  Teller*  Teller*  Teller*  Teller   West Branch:  CSR / Licensed Annuity Specialist  Head Teller  Teller  Teller  Teller  Teller  Teller*   Garrettsville Branch:  Branch Manager  Teller  Head Teller  CSR / Licensed Annuity Specialist  Teller  Teller*  Teller*  Teller*   Mantua Branch:  Teller  Customer Service Representative  Teller*   Chardon Branch:  CSR/Licensed Annuity Specialist  Teller*  Teller*  Head Teller  Teller*  Teller   Orwell Branch:  Teller*  CSR/Licensed Annuity Specialist  Teller*  Teller  Teller*
 Newbury Branch:  Branch Manager  Teller*  Head Teller  Customer Service Representative  Teller*
 Cortland Branch:  Teller  Teller  Teller*  Customer Service Representative
 Loan Department:  Loan Administrative Assistant  Lender  Loan Administrative Assistant  Loan Administrative Assistant  Loan Administrative Assistant  Loan Administrative Assistant  Lender  Loan Receptionist  Loan Collection Manager  Credit Analyst  Credit Analyst  Loan Administrative Assistant  Special Assets Manager  Special Assets Manager  Loan Department Supervisor
 Operations:  Bookkeeper  Bookkeeper  Bookkeeper  Audit Assistant*  Proof Operator  Courier*  Electronic Banking Specialist  Float Teller  Facility Manager  Bookkeeper  Courier*  Float Teller  Computer Support Technician   Accounting Specialist  Float Teller  Customer Support Specialist
 Financial Services:  Financial Consultant
   *
    
    denotes part time
 Middlefield
Banc Corp.




---



##### 



Officers
 President and Chief Executive Officer
 Executive Vice President
Chief Operating Officer
 Senior Vice President
Operations/ Administration
 Senior Vice President
Senior Lender
 Senior Vice President
Chief Financial Officer
 Senior Vice President
Area Executive
 Vice President
Chief Accounting Officer
 Vice President
Human Resource Administrator
 Vice President
Loan Administration
 Vice President/ Lending
 Vice President/ Lending
 Vice President
Commercial Lender
 Vice President
Regional Branch Administration
 Vice President
Risk Officer
 Assistant Vice President
Bookkeeping Manager
 Assistant Vice President
Executive Secretary
 Assistant Vice President
West Branch Manager
 Assistant Vice President
Orwell Lending Officer
 Assistant Vice President
Orwell Branch Manager
 Banking Officer
Cortland Branch Manager
 Banking Officer
Mantua Branch Manager
 Banking Officer
Chardon Branch Manager
 Compliance/CRA Officer
   Annual Report




---



##### 



Main Office Walk up ATM     
 
 Garrettsville Branch Drive up ATM     
 Chardon Branch Drive up ATM     
 
 Newbury Branch Drive up ATM     
   Middlefield
Banc Corp.




---



##### 



Middlefield West Branch Drive up ATM     
 
 Mantua Branch Walk up ATM     
 Orwell Branch Drive up ATM     
 
 Cortland Branch Drive up ATM     
   Annual Report




---



##### 



Main Office
    
    Mantua Branch
    
    Newbury Branch15985 East High Street
    
    10519 Main Street
    
    111 10 Kinsman Road440.632.1666
    
    330.274.0881
    
    440.564.7000West Branch
    
    Chardon Branch
    
    Cortland Branch15545 West High
    
    348 Center Street
    
    3450 Niles-Cortland RoadStreet 440.632.1666
    
    440.286.1222
    
    330.637.3208Garrettsville Branch
    
    Orwell Branch8058 State Street
    
    30 South Maple Street330.527.2121
    
    440.437.7200
 
 Dublin Branch
    
    Westerville Branch6215 Perimeter Drive
    
    17 North State Street614.793.4631
    
    614.890.7832




---



##### 








---



##### 



MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
      By:
    /s/ Thomas G. Caldwell

Thomas G. CaldwellPresident and Chief Executive Officer(Principal Executive Officer)Date: March 18, 2011By:
    /s/ Donald L. Stacy

Donald L. StacyTreasurer(Principal Financial & Accounting Officer)Date: March 18, 2011