##### Table of Contents



United States SECURITIES AND EXCHANGE COMMISSION
 Washington , D.C. 20549
 FORM 10-K
 Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended: December 31, 2007
 Commission File Number: 33-23094
 Middlefield Banc Corp.
 (Exact name of registrant as specified in its charter)
 Ohio
    
    34-1585111( State or other jurisdiction 
of incorporation or organization)
    
    ( IRS Employer
Identification No.)
 
 Address, including zip code, and telephone number,
including area code, of registrants principal executive offices
 Securities registered pursuant to section 12(b) of the Act none
 Securities registered pursuant to section 12(g) of the Act
 o þ
 o þ
  þ o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
  Documents Incorporated by Reference




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##### 



Table of Contents
 PagePart IItem 1
    
    Business
    
    
    2Item 1A
    
    Risk Factors
    
    
    15Item 2
    
    Properties
    
    
    17Item 3
    
    Legal Proceedings
    
    
    18Item 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    18Part IIItem 5
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    18Item 6
    
    Selected Financial Data
    
    
    19Item 7
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    19Item 7A
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    19Item 8
    
    Financial Statements and Supplementary Data
    
    
    19Item 9
    
    Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
    
    
    19Item 9a(T)
    
    Controls and Procedures
    
    
    19Item 9b
    
    Other Information
    
    
    19Part IIIItem 10
    
    Directors and Executive Officers of the Registrant
    
    
    19Item 11
    
    Executive Compensation
    
    
    19Item 12
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    20Item 13
    
    Certain Relationships and Related Transactions
    
    
    20Item 14
    
    Principal Accountant Fees and Services
    
    
    20Part IVItem 15
    
    Exhibits, Financial Statement Schedules
    
    
    20Signatures
    
    
    
    
    
    
    25EX-13EX-21EX-23EX-31.1EX-31.2EX-32
  i




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##### Table of Contents



Item 1  Business
 Middlefield Banc Corp .
 1.
    
    The Middlefield Banking Company (MBC), an Ohio-chartered commercial bank that began
operations in 1901. MBC engages in a general commercial banking business in northeastern
Ohio. The principal executive office is located at 15985 East High Street, Middlefield,
Ohio 44062-0035, and its telephone number is (440) 632-1666.2.
    
    Emerald Bank (EB), an Ohio-chartered commercial bank headquartered in Dublin, Ohio.
EB engages in a general commercial banking business in central Ohio. The principal
executive office is located at 6215 Perimeter Drive, Dublin Ohio 43017, and its telephone
number is (614) 793-4631.
 The Middlefield Banking Company .
   Emerald Bank
 Market Area
 Competition .
 Forward-looking Statements
 2




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##### Table of Contents



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




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##### Table of Contents



Loan Portfolio Composition at December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(Dollars in thousands)
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentType of loan:Commercial and industrial
    
    $
    67,010
    
    
    
    21.65
    
    
    $
    68,496
    
    
    
    27.49
    
    
    $
    65,252
    
    
    
    27.88
    %
    
    $
    52,148
    
    
    
    24.18
    %
    
    $
    42,063
    
    
    
    21.81
    %Real estate construction
    
    
    6,704
    
    
    
    2.17
    
    
    
    2,458
    
    
    
    0.99
    
    
    
    2,725
    
    
    
    1.16
    
    
    
    3,144
    
    
    
    1.46
    
    
    
    3,434
    
    
    
    1.78Mortgage:Residential
    
    
    193,514
    
    
    
    62.53
    
    
    
    162,917
    
    
    
    65.38
    
    
    
    151,866
    
    
    
    64.88
    
    
    
    147,425
    
    
    
    68.36
    
    
    
    134,007
    
    
    
    69.48Commercial
    
    
    36,818
    
    
    
    11.90
    
    
    
    9,949
    
    
    
    3.99
    
    
    
    8,208
    
    
    
    3.51
    
    
    
    7,027
    
    
    
    3.26
    
    
    
    7,866
    
    
    
    4.08Consumer installment
    
    
    5,400
    
    
    
    1.75
    
    
    
    5,371
    
    
    
    2.16
    
    
    
    6,004
    
    
    
    2.57
    
    
    
    5,909
    
    
    
    2.74
    
    
    
    5,510
    
    
    
    2.85Total loans
    
    
    309,446
    
    
    
    100
    
    
    
    249,191
    
    
    
    100
    
    
    
    234,055
    
    
    
    100
    %
    
    
    215,653
    
    
    
    100
    %
    
    
    192,880
    
    
    
    100
    %Less:Allowance for loan losses
    
    
    3,299
    
    
    
    
    
    
    
    2,849
    
    
    
    
    
    
    
    2,841
    
    
    
    
    
    
    
    2,623
    
    
    
    
    
    
    
    2,521Net loans
    
    $
    306,147
    
    
    
    
    
    
    $
    246,342
    
    
    
    
    
    
    $
    231,214
    
    
    
    
    
    
    $
    213,030
    
    
    
    
    
    
    $
    190,359Net loans as a percent of total assets
    
    
    89.82
    %
    
    
    
    
    
    
    56.73
    %
    
    
    
    
    
    
    74.29
    %
    
    
    
    
    
    
    73.15
    %
    
    
    
    
    
    
    72.55
    %
  Loan Portfolio Maturity at December 31,2007Commercialand
    
    
    Real Estate
    
    
    Mortgage
    
    
    Consumer(Dollars in thousands)
    
    Industrial
    
    
    Construction
    
    
    Residential
    
    
    Commercial
    
    
    Installment
    
    
    TotalAmount due:In one year or less
    
    $
    21,230
    
    
    $
    3,338
    
    
    $
    59,598
    
    
    $
    4,353
    
    
    $
    1,346
    
    
    $
    89,865After one year through five years
    
    
    28,680
    
    
    
    1,259
    
    
    
    108,556
    
    
    
    21,367
    
    
    
    3,777
    
    
    
    163,639After five years
    
    
    17,100
    
    
    
    2,107
    
    
    
    25,360
    
    
    
    11,098
    
    
    
    277
    
    
    
    55,942Total amount due
    
    $
    67,010
    
    
    $
    6,704
    
    
    $
    193,514
    
    
    $
    36,818
    
    
    $
    5,400
    
    
    $
    309,446
   Fixed
    
    
    Adjustable(Dollars in thousands)
    
    Rate
    
    
    Rate
    
    
    TotalCommercial and industrial
    
    $
    27,819
    
    
    $
    39,191
    
    
    $
    67,010Real estate construction
    
    
    2,618
    
    
    
    4,086
    
    
    
    6,704Mortgage:
    
    
    
    
    
    
    Residential
    
    
    51,323
    
    
    
    142,191
    
    
    
    193,514Commercial
    
    
    14,764
    
    
    
    22,054
    
    
    
    36,818Consumer installment
    
    
    5,059
    
    
    
    341
    
    
    
    5,400$
    101,583
    
    
    $
    207,863
    
    
    $
    309,446
 4




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##### Table of Contents



Residential Mortgage Loans .
     Commercial and Industrial Loans and Commercial Real Estate Loans .
 
    
    accounts receivable, inventory and working capital loans
    
    renewable operating lines of credit
    
    loans to finance capital equipment
    
    term business loans
    
    short-term notes
    
    selected guaranteed or subsidized loan programs for small businesses
    
    loans to professionals
    
    commercial real estate loans
     Real Estate Construction
 
    
    residential construction loans to borrowers who will occupy the premises upon completion of construction,
    
    residential construction loans to builders,
    
    commercial construction loans, and
    
    real estate acquisition and development loans.
 5




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##### Table of Contents



Consumer Installment Loans .
   Loan Solicitation and Processing .
  Income from Lending Activities .
 Nonperforming Loans
   Classified Assets .
 6




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##### Table of Contents



Classified Assets at December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent of(Dollars in thousands)
    
    Amount
    
    
    total loans
    
    
    Amount
    
    
    total loans
    
    
    Amount
    
    
    total loans
    
    
    Amount
    
    
    total loans
    
    
    Amount
    
    
    total loansClassified loans:Special mention
    
    $
    5,302
    
    
    
    1.71
    %
    
    $
    7,394
    
    
    
    2.97
    %
    
    $
    6,567
    
    
    
    2.81
    %
    
    $
    4,094
    
    
    
    1.90
    %
    
    $
    2,876
    
    
    
    1.49
    %Substandard
    
    
    1,029
    
    
    
    0.33
    %
    
    
    1,515
    
    
    
    0.61
    %
    
    
    2,020
    
    
    
    0.86
    %
    
    
    3,097
    
    
    
    1.44
    %
    
    
    1,920
    
    
    
    1.00
    %Doubtful
    
    
    835
    
    
    
    0.27
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.00
    %
    
    
    163
    
    
    
    0.08
    %
    
    
    199
    
    
    
    0.10
    %Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total amount due
    
    $
    7,166
    
    
    
    2.31
    %
    
    $
    8,909
    
    
    
    3.58
    %
    
    $
    8,587
    
    
    
    3.67
    %
    
    $
    7,354
    
    
    
    3.42
    %
    
    $
    4,995
    
    
    
    3.41
    %
 Investments.
   7




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##### Table of Contents



Investment Portfolio Amortized Cost and Fair Value at December 31,2007
    2006
    
    
    2005Gross
    
    
    Gross
    
    
    
    
    
    
    
    
    
    
    Gross
    
    
    Gross
    
    
    
    
    
    
    
    
    
    
    Gross
    
    
    GrossAmortized
    
    
    unrealized
    
    
    unrealized
    
    
    Fair
    
    
    Amortized
    
    
    unrealized
    
    
    unrealized
    
    
    Fair
    
    
    Amortized
    
    
    unrealized
    
    
    unrealized
    
    
    Fair(Dollars in thousands)
    
    cost
    
    
    gains
    
    
    losses
    
    
    value
    
    
    cost
    
    
    gains
    
    
    losses
    
    
    value
    
    
    cost
    
    
    gains
    
    
    losses
    
    
    valueAvailable for Sale:U.S. Government agency securities
    
    $
    7,873
    
    
    $
    55
    
    
    $
    (1
    )
    
    $
    7,927
    
    
    $
    7,253
    
    
    $
    2
    
    
    $
    (110
    )
    
    $
    7,145
    
    
    $
    7,261
    
    
    $
    10
    
    
    $
    (112
    )
    
    $
    7,159Obligations of states and
political subdivisions:Taxable
    
    
    749
    
    
    
    
    
    
    
    (7
    )
    
    
    742
    
    
    
    748
    
    
    
    
    
    
    
    (21
    )
    
    
    727
    
    
    
    748
    
    
    
    
    
    
    
    (23
    )
    
    
    725Tax-exempt
    
    
    47,263
    
    
    
    188
    
    
    
    (522
    )
    
    
    46,929
    
    
    
    38,182
    
    
    
    140
    
    
    
    (354
    )
    
    
    37,968
    
    
    
    28,231
    
    
    
    98
    
    
    
    (331
    )
    
    
    27,998Corporate securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mortgage-backed securities
    
    
    29,219
    
    
    
    162
    
    
    
    (335
    )
    
    
    29,046
    
    
    
    16,959
    
    
    
    
    
    
    
    (490
    )
    
    
    16,469
    
    
    
    22,229
    
    
    
    16
    
    
    
    (640
    )
    
    
    21,605Equity securities
    
    
    944
    
    
    
    396
    
    
    
    (16
    )
    
    
    1,324
    
    
    
    694
    
    
    
    48
    
    
    
    (3
    )
    
    
    739
    
    
    
    444
    
    
    
    1
    
    
    
    (45
    )
    
    
    400Total
    
    $
    86,048
    
    
    $
    801
    
    
    $
    (881
    )
    
    $
    85,968
    
    
    $
    63,836
    
    
    $
    190
    
    
    $
    (978
    )
    
    $
    63,048
    
    
    $
    58,913
    
    
    $
    125
    
    
    $
    (1,151
    )
    
    $
    57,887Held to Maturity:Obligations of states and political subdivisions:
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    126
    
    
    $
    8
    
    
    $
    
    
    
    $
    134
    
    
    $
    221
    
    
    $
    12
    
    
    $
    
    
    
    $
    233Total
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    126
    
    
    $
    8
    
    
    $
    
    
    
    $
    134
    
    
    $
    221
    
    
    $
    12
    
    
    $
    
    
    
    $
    233Total Investment Securities
    
    $
    86,048
    
    
    $
    801
    
    
    $
    (881
    )
    
    $
    85,968
    
    
    $
    63,962
    
    
    $
    198
    
    
    $
    (978
    )
    
    $
    63,182
    
    
    $
    59,134
    
    
    $
    137
    
    
    $
    (1,151
    )
    
    $
    58,120
  Total investmentOne year
    
    
    More than one
    
    
    More than five
    
    
    More than
    
    
    securities and mortgage-or less
    
    
    to five years
    
    
    to ten years
    
    
    ten years
    
    
    backed securitiesAmortized
    
    
    Average
    
    
    Amortized
    
    
    Average
    
    
    Amortized
    
    
    Average
    
    
    Amortized
    
    
    Average
    
    
    Amortized
    
    
    Average
    
    
    Faircost
    
    
    yield
    
    
    cost
    
    
    yield
    
    
    cost
    
    
    yield
    
    
    cost
    
    
    yield
    
    
    cost
    
    
    yield
    
    
    ValueU.S. Government agency
securities
    
    $
    
    
    
    
    
    
    
    $
    3,103
    
    
    
    4.70
    
    
    $
    2,994
    
    
    
    4.70
    
    
    $
    1,775
    
    
    
    5.92
    
    
    $
    7,873
    
    
    
    4.98
    
    
    $
    7,927Obligations of states and
political subdivisions:Taxable
    
    
    250
    
    
    
    3.20
    
    
    
    499
    
    
    
    4.15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    749
    
    
    
    3.83
    
    
    
    742Tax-exempt
    
    
    4,049
    
    
    
    4.00
    
    
    
    6,542
    
    
    
    3.89
    
    
    
    10,100
    
    
    
    4.26
    
    
    
    26,572
    
    
    
    4.32
    
    
    
    47,263
    
    
    
    4.22
    
    
    
    46,929Mortgage-backed securities
    
    
    
    
    
    
    
    
    
    
    137
    
    
    
    5.18
    
    
    
    1,220
    
    
    
    4.47
    
    
    
    27,863
    
    
    
    5.13
    
    
    
    29,219
    
    
    
    5.10
    
    
    
    29,046Equity Securities
    
    
    944
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    944
    
    
    
    
    
    
    
    1,324Total
    
    $
    5,243
    
    
    
    3.24
    %
    
    $
    10,281
    
    
    
    4.16
    %
    
    $
    14,314
    
    
    
    4.37
    %
    
    $
    56,210
    
    
    
    4.77
    %
    
    $
    86,048
    
    
    
    4.54
    %
    
    $
    85,968
   Sources of Funds Deposit Accounts
 8




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##### Table of Contents



Maturity of Time Deposits of$100,000 or more atDecember 31,2007Amount
    
    
    Percent of TotalWithin three months
    
    $
    8,431,158
    
    
    
    16.53
    %Beyond three but within six months
    
    
    8,615,730
    
    
    
    16.89Beyond six but within twelve months
    
    
    15,291,877
    
    
    
    29.97Beyond one year
    
    
    18,677,293
    
    
    
    36.61Total
    
    $
    51,016,058
    
    
    
    100.00
 Borrowings
  2007
    
    2006
    
    2005Balance at year-end
    
    $
    1,510,607
    
    
    $
    1,609,738
    
    
    
    6,710,914Average balance outstanding
    
    
    2,383,902
    
    
    
    3,281,340
    
    
    
    1,844,018Maximum month-end balance
    
    
    5,768,057
    
    
    
    8,245,406
    
    
    
    6,710,914Weighted-average rate at year-end
    
    
    2.96
    %
    
    
    4.35
    %
    
    
    4.38
    %Weighted-average rate during the
year
    
    
    3.89
    %
    
    
    5.10
    %
    
    
    5.63
    %
 Personnel.
  Supervision and Regulation
     9




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##### Table of Contents



Regulation of Bank Holding Companies Bank and Bank Holding Company Acquisitions
 
    
    directly or indirectly acquiring ownership or control of any voting
shares of another bank or bank holding company, if after the
acquisition the acquiring company would own or control more than 5% of
the shares of the other bank or bank holding company (unless the
acquiring company already owns or controls a majority of the shares),
    
    acquiring all or substantially all of the assets of another bank, or
    
    merging or consolidating with another bank holding company.
   Nonbanking Activities
 Financial Holding Companies
 
    
    financial in nature or incidental to that financial activity, or
    
    complementary to a financial activity and that does not pose a
substantial risk to the safety and soundness of depository
institutions or the financial system generally.
  
    
    acting as principal, agent, or broker for insurance,
    
    underwriting, dealing in, or making a market in securities, and
    
    providing financial and investment advice.
  10




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##### Table of Contents



Holding Company Capital and Source of Strength
  Liability of Commonly Controlled Institutions.
 Federal Deposit Insurance
   Interstate Banking and Branching
 de novo de novo de novo
 11




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##### Table of Contents



Capital Risk-Based Capital Requirements
   
    
    the allowance for loan losses, up to a maximum of 1.25% of risk-weighted assets,
    
    any qualifying perpetual preferred stock exceeding the amount includable in Tier 1 capital,
    
    mandatory convertible securities, and
    
    subordinated debt and intermediate term preferred stock, up to 50% of Tier 1 capital.
    Prompt Corrective Action
 12




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##### Table of Contents



2007
    
    
    2006Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioTotal Capital
(to Risk-Weighted Assets)Actual
    
    $
    42,664,943
    
    
    
    14.56
    %
    
    $
    41,978,838
    
    
    
    18.05
    %For Capital Adequacy Purposes
    
    
    23,441,926
    
    
    
    8.00
    
    
    
    18,605,783
    
    
    
    8.00To Be Well Capitalized
    
    
    29,302,408
    
    
    
    10.00
    
    
    
    23,257,229
    
    
    
    10.00Tier I Capital
(to Risk-Weighted Assets)Actual
    
    $
    39,194,767
    
    
    
    13.38
    %
    
    $
    39,109,743
    
    
    
    16.82
    %For Capital Adequacy Purposes
    
    
    11,720,963
    
    
    
    4.00
    
    
    
    9,302,892
    
    
    
    4.00To Be Well Capitalized
    
    
    17,581,445
    
    
    
    6.00
    
    
    
    13,954,337
    
    
    
    6.00Tier I Capital
(to Average Assets)Actual
    
    $
    39,194,767
    
    
    
    9.23
    %
    
    $
    39,109,743
    
    
    
    11.82
    %For Capital Adequacy Purposes
    
    
    16,990,099
    
    
    
    4.00
    
    
    
    13,236,186
    
    
    
    4.00To Be Well Capitalized
    
    
    21,237,623
    
    
    
    5.00
    
    
    
    16,545,233
    
    
    
    5.00
 Limits on Dividends and Other Payments
   Recent Legislation
   13




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##### Table of Contents



Transactions with Affiliates
 
    
    limit the extent to which a bank or its subsidiaries may lend to or engage in various other kinds of
transactions with any one affiliate to an amount equal to 10% of the institutions capital and surplus,
limiting the aggregate of covered transactions with all affiliates to 20% of capital and surplus,
    
    impose restrictions on investments by a subsidiary bank in the stock or securities of its holding company,
    
    impose restrictions on the use of a holding companys stock as collateral for loans by the subsidiary bank, and
    
    require that affiliate transactions be on terms substantially the same, or at least as favorable to the
institution or subsidiary, as those provided to a non-affiliate.
  Community Reinvestment Act
   Federal Home Loan Bank
  State Banking Regulation
 14




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##### Table of Contents



Monetary Policy
 
 Item 1.A  Risk Factors
 Our market is very competitive
  The Company does not have the financial and other resources that larger competitors have; this
could affect its ability to compete for large commercial loan originations and its ability to offer
products and services competitors provide to customers.
 The business of banking is changing rapidly with changes in technology, which poses financial
and technological challenges to small and mid-sized institutions
  The banking industry is heavily regulated; the compliance burden to the industry is
considerable; the principal beneficiary of federal and state regulation is the public at large and
depositors, not stockholders
  15




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##### Table of Contents



Success in the banking industry requires disciplined management of lending risks
 Changing interest rates have a direct and immediate impact on financial institutions
  An economic downturn in our market area would adversely affect our loan portfolio and our
growth prospects
 common stock is very thinly traded, and it is therefore susceptible to wide
price swings
   Government regulation could restrict our ability to pay cash dividends
 We could incur liabilities under federal and state environmental laws if we foreclose on
commercial properties
 16




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##### Table of Contents



Item 2  Properties
  Location
    
    County
    
    Owned/Leased
    
    Other InformationMain Office:15985 East High Street
    
    Geauga
    
    OwnedMiddlefield, Ohio 44062-1666Branches:West Branch
    
    Geauga
    
    Owned15545 West High StreetMiddlefield, OhioGarrettsville Branch
    
    Portage
    
    Owned8058 State StreetGarrettsville, OhioMantua Branch 
10519 South Main Street 
Mantua, Ohio
    
    Portage
    
    Leased
    
    three-year lease renewed
in November 2004, with
option to renew for six
additional consecutive
three-year termsChardon Branch
    
    Geauga
    
    Owned
    
    opened in September, 2001348 Center StreetChardon, OhioOrwell Branch
    
    Ashtabula
    
    Owned
    
    opened in April, 200330 South Maple AvenueOrwell, OhioNewbury Branch 
11110 Kinsman Road 
Newbury, Ohio
    
    Geauga
    
    Leased
    
    ten-year lease dated
December 2006, with
option to renew for four
additional consecutive
five-year termsCortland Loan Production 
130 Windsor Drive
    
    Trumbull
    
    Leased
    
    one-year lease dated
November 2006, with
option to renewCortland, OhioEmerald Bank 
6215 Perimeter Drive 
Dublin, OH 43017
    
    Franklin
    
    Leased
    
    twenty-year lease dated
Febuary 2004, with the
option to purchase after
the tenth year
   17




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##### Table of Contents



Item 3  Legal Proceedings
  
 Item 4  Submission of Matters to a Vote of Security Holders
  
 Part II
 
 Item 5  Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
  Equity Compensation Plan information
  Number of SecuritiesNumber of
    
    
    
    
    
    Remaining AvailableSecurities
    
    
    
    
    
    for Future Issuanceto be Issued Upon
    
    Weighted-Average
    
    Under EquityExercise of
    
    Exercise Price of
    
    Compensation PlansOutstanding
    
    Outstanding
    
    (Excluding SecuritiesPlan Category
    
    Options or Rights
    
    Options or Rights
    
    Reflected in Column A)Equity compensation plans approved by
security holders:1999 Stock Option Plan
    
    
    88,211
    
    
    
    27.86
    
    
    
    153,932
 Unregistered Sales of Equity Securities and Use of Proceeds
   Total Number of
    
    Maximum Number ofShares Purchased
    
    Shares that May YetTotal Number of
    
    Average Price Paid
    
    Part of Publicly
    
    Be Purchased UnderDate
    
    Shares Purchased
    
    Per Share
    
    Announced Program
    
    the Program30-Oct-07
    
    
    1,100
    
    
    
    38.00
    
    
    
    1,100
    
    
    
    46,98831-Oct-07
    
    
    11,500
    
    
    
    38.65
    
    
    
    11,500
    
    
    
    35,48821-Nov-07
    
    
    1,027
    
    
    
    38.65
    
    
    
    1,027
    
    
    
    34,46122-Nov-07
    
    
    1,000
    
    
    
    38.50
    
    
    
    1,000
    
    
    
    33,46123-Nov-07
    
    
    7,612
    
    
    
    38.00
    
    
    
    7,612
    
    
    
    25,8494-Dec-07
    
    
    1,000
    
    
    
    37.00
    
    
    
    1,000
    
    
    
    24,84911-Dec-07
    
    
    3,900
    
    
    
    37.00
    
    
    
    3,900
    
    
    
    20,94917-Dec-07
    
    
    1,500
    
    
    
    37.00
    
    
    
    1,500
    
    
    
    19,449
 18




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##### Table of Contents



Item 6  Selected Financial Data
  
 Item 7  Managements Discussion and Analysis of Financial Condition and Results of
Operations
  
 Item 7A  Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate
Sensitivity Simulation Analysis
 
 Item 8  Financial Statements and Supplementary Data
  
 Item 9  Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
  
 Item 9a(T)  Controls and Procedures
       
 Item 9b  Other Information
 None
 
 Part III
 
 Item 10  Directors and Executive Officers of the Registrant
  
 Item 11  Executive Compensation
  19




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##### Table of Contents



Item 12  Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
  
 Item 13  Certain Relationships and Related Transactions
  
 Item 14  Principal Accountant Fees and Services
  
 Part IV
 
 Item 15  Exhibits, Financial Statement Schedules
 Financial Statements
 Index to Consolidated Financial Statements
        Financial Statement Schedules
  Exhibits
  Exhibits Required by Item 601 of Regulation S-K
 exhibitnumber
    
    description
    
    location2
    
    Agreement and Plan of Merger among Middlefield
Banc Corp., EB Interim Bank, and Emerald Bank,
dated as of November 15, 2006, as amended by
Amendment No. 1
    
    Incorporated by reference to the prospectus/proxy statement,
Appendix A, contained in Part I of Form S-4 Registration
Statement Amendment No. 1 filed on February 9, 2007.
Disclosure schedules referred to in the Agreement and Plan of
Merger are omitted in reliance on Item 601(b)(2) of
Regulation S-K. Upon request of the SEC, Middlefield Banc
Corp. will furnish supplementally to the SEC a copy of the
disclosure schedules3.1
    
    Second Amended and Restated Articles of
Incorporation of Middlefield Banc Corp., as amended
    
    Incorporated by reference to Exhibit 3.1 of Middlefield Banc
Corp.s Annual Report on Form 10-K for the Fiscal Year
Ended December 31, 2005, filed on March 29, 20063.2
    
    Regulations of Middlefield Banc Corp.
    
    Incorporated by reference to Exhibit 3.2 of Middlefield Banc
 20




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##### Table of Contents



exhibitnumber
    
    description
    
    locationCorp.s registration statement on Form 10 filed on
April 17, 20014
    
    Specimen stock certificate
    
    Incorporated by reference to Exhibit 3.2 of Middlefield Banc
Corp.s registration statement on Form 10 filed on April 17, 20014.1
    
    Amended and Restated Trust Agreement, dated as of
December 21, 2006, between Middlefield Banc Corp.,
as Depositor, Wilmington Trust Company, as Property
Trustee, Wilmington Trust Company, as Delaware
Trustee, and Administrative Trustees
    
    Incorporated by reference to Exhibit 4.1 of Middlefield Banc
Corp.s Form 8-K Current Report filed on December 27, 20064.2
    
    Junior Subordinated Indenture, dated as of December
21, 2006, between Middlefield Banc Corp. and
Wilmington Trust Company
    
    Incorporated by reference to Exhibit 4.2 of Middlefield Banc
Corp.s Form 8-K Current Report filed on December 27, 20064.3
    
    Guarantee Agreement, dated as of December 21, 2006,
between Middlefield Banc Corp. and Wilmington Trust
Company
    
    Incorporated by reference to Exhibit 4.3 of Middlefield Banc
Corp.s Form 8-K Current Report filed on December 27, 200610.1*
    
    1999 Stock Option Plan of Middlefield Banc Corp.
    
    Incorporated by reference to Exhibit 10.1 of Middlefield Banc
Corp.s registration statement on Form 10 filed on April 17, 200110.2*
    
    Severance Agreement dated July 11, 2006 between
Middlefield Banc Corp. and Thomas G. Caldwell
    
    Incorporated by reference to Exhibit 10.2 of Middlefield Banc
Corp.s Form 8-K Current Report filed on July 12, 200610.3*
    
    Severance Agreement dated July 11, 2006 between
Middlefield Banc Corp. and James R. Heslop II
    
    Incorporated by reference to Exhibit 10.3 of Middlefield Banc
Corp.s Form 8-K Current Report filed on July 12, 200610.40*
    
    Severance Agreement dated
July 11, 2006 between Middlefield
Banc Corp. and Jay P. Giles
    
    Incorporated by reference to
Exhibit 10.4 of Middlefield Banc
Corp.s Form 8-K Current Report
filed on July 12, 200610.4.1*
    
    Severance Agreement dated
July 11, 2006 between Middlefield
Banc Corp. and Teresa M. Hetrick
    
    Incorporated by reference to
Exhibit 10.4.1 of Middlefield
Banc Corp.s Form 8-K Current
Report filed on July 12, 200610.4.2*
    
    Severance Agreement dated
July 11, 2006 between Middlefield
Banc Corp. and Jack L. Lester
    
    Incorporated by reference to
Exhibit 10.4.2 of Middlefield
Banc Corp.s Form 8-K Current
Report filed on July 12, 200610.4.3*
    
    Severance Agreement dated
July 11, 2006 between Middlefield
Banc Corp. and Donald L. Stacy
    
    Incorporated by reference to
Exhibit 10.4.3 of Middlefield
Banc Corp.s Form 8-K Current
Report filed on July 12, 200610.4.4*
    
    Severance Agreement dated
July 11, 2006 between Middlefield
Banc Corp. and Alfred F. Thompson
Jr.
    
    Incorporated by reference to
Exhibit 10.4.4 of Middlefield
Banc Corp.s Form 8-K Current
Report filed on July 12, 2006
 21




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##### Table of Contents



exhibitnumber
    
    description
    
    location10.50*
    
    Federal Home Loan Bank of
Cincinnati Agreement for Advances
and Security Agreement dated
September 14, 2000
    
    Incorporated by reference to
Exhibit 10.4 of Middlefield Banc
Corp.s registration statement on
Form 10 filed on April 17, 200110.60*
    
    Amended Director Retirement Agreement
with Richard T. Coyne
    
    Incorporated by reference to
Exhibit 10.6 of Middlefield Banc Corp.s
Form 8-K Current Report filed on
January 9, 200810.70*
    
    Amended Director Retirement Agreement
with Frances H. Frank
    
    Incorporated by reference to
Exhibit 10.7 of Middlefield Banc Corp.s
Form 8-K Current Report filed on
January 9, 200810.80*
    
    Amended Director Retirement Agreement
with Thomas C. Halstead
    
    Incorporated by reference to
Exhibit 10.8 of Middlefield Banc Corp.s
Form 8-K Current Report filed on
January 9, 200810.90*
    
    Director Retirement Agreement
with George F. Hasman
    
    Incorporated by reference to
Exhibit 10.9 of Middlefield Banc
Corp.s Annual Report on
Form 10-K for the Year Ended
December 31, 2001, filed on
March 28, 200210.10*
    
    Director Retirement Agreement
with Donald D. Hunter
    
    Incorporated by reference to
Exhibit 10.10 of Middlefield Banc
Corp.s Annual Report on
Form 10-K for the Year Ended
December 31, 2001, filed on
March 28, 200210.11*
    
    Director Retirement Agreement
with Martin S. Paul
    
    Incorporated by reference to
Exhibit 10.11 of Middlefield Banc
Corp.s Annual Report on
Form 10-K for the Year Ended
December 31, 2001, filed on
March 28, 200210.12*
    
    Amended Director Retirement Agreement
with Donald E. Villers
    
    Incorporated by reference to
Exhibit 10.12 of Middlefield Banc Corp.s
Form 8-K Current Report filed on
January 9, 200810.13*
    
    Executive Survivor Income
Agreement (aka DBO agreement
[death benefit only]) with Donald
L. Stacy
    
    Incorporated by reference to
Exhibit 10.14 of Middlefield Banc
Corp.s Annual Report on
Form 10-K for the Year Ended
December 31, 2003, filed on
March 30, 200410.14*
    
    DBO Agreement with Jay P. Giles
    
    Incorporated by reference to
Exhibit 10.15 of Middlefield Banc
Corp.s Annual Report on
Form 10-K for the Year Ended
December 31, 2003, filed on
March 30, 200410.15*
    
    DBO Agreement with Alfred F.
Thompson Jr.
    
    Incorporated by reference to
Exhibit 10.16 of Middlefield Banc
Corp.s Annual Report on
 22




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##### Table of Contents



exhibitnumber
    
    description
    
    locationForm 10-K for the Year Ended
December 31, 2003, filed on
March 30, 200410.16*
    
    DBO Agreement with Nancy C. Snow
    
    Incorporated by reference to
Exhibit 10.17 of Middlefield Banc
Corp.s Annual Report on
Form 10-K for the Year Ended
December 31, 2003, filed on
March 30, 200410.17*
    
    DBO Agreement with Theresa M.
Hetrick
    
    Incorporated by reference to
Exhibit 10.18 of Middlefield Banc
Corp.s Annual Report on
Form 10-K for the Year Ended
December 31, 2003, filed on
March 30, 200410.18*
    
    DBO Agreement with Jack L. Lester
    
    Incorporated by reference to
Exhibit 10.19 of Middlefield Banc
Corp.s Annual Report on
Form 10-K for the Year Ended
December 31, 2003, filed on
March 30, 200410.19*
    
    DBO Agreement with James R.
Heslop II
    
    Incorporated by reference to
Exhibit 10.20 of Middlefield Banc
Corp.s Annual Report on
Form 10-K for the Year Ended
December 31, 2003, filed on
March 30, 200410.20*
    
    DBO Agreement with Thomas G.
Caldwell
    
    Incorporated by reference to
Exhibit 10.21 of Middlefield Banc
Corp.s Annual Report on
Form 10-K for the Year Ended
December 31, 2003, filed on
March 30, 200410.21*
    
    Form of Indemnification Agreement
with directors of Middlefield
Banc Corp. and executive officers
of Middlefield Banc Corp. and The
Middlefield Banking Company
    
    Incorporated by reference to
Exhibit 99.1 of Middlefield Banc
Corp.s registration statement on
Form 10, Amendment No. 1, filed
on June 14, 200110.22*
    
    Annual Incentive Plan Summary
    
    Incorporated by reference to the
summary description of the annual
incentive plan included as
Exhibit 10.22 of Middlefield Banc
Corp.s Form 8-K Current Report
filed on December 16, 200510.23*
    
    Executive Deferred Compensation
Agreement with Thomas G. Caldwell
    
    Incorporated by reference to
Exhibit 10.23 of Middlefield Banc
Corp.s Form 8-K Current Report
filed on January 4, 200710.24*
    
    Executive Deferred Compensation
Agreement with James R. Heslop II
    
    Incorporated by reference to
Exhibit 10.24 of Middlefield Banc
Corp.s Form 8-K Current Report
filed on January 4, 200710.25*
    
    Executive Deferred Compensation
Agreement with Donald L. Stacy
    
    Incorporated by reference to
Exhibit 10.25 of Middlefield Banc
Corp.s Form 8-K Current Report
filed on January 4, 2007
 23




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##### Table of Contents



exhibitnumber
    
    description
    
    location13
    
    Portions of the Annual Report for
the year ended December 31, 2006
incorporated by reference into
this Form 10-K
    
    filed herewith21
    
    Subsidiaries of Middlefield Banc Corp.
    
    filed herewith23
    
    Consent of S.R. Snodgrass, A.C.,
independent auditors of
Middlefield Banc Corp.
    
    filed herewith31.10
    
    Rule 13a-14(a) certification of
Chief Executive Officer
    
    filed herewith31.20
    
    Rule 13a-14(a) certification of
Chief Financial Officer
    
    filed herewith32
    
    Rule 13a-14(b) certification
    
    filed herewith
 
 *
    
    management contract or compensatory plan or arrangement 24




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##### Table of Contents



Signatures
  Middlefield Banc Corp.By:
    /s/ Thomas G. CaldwellThomas G. CaldwellPresident and Chief Executive OfficerMarch 21, 2008  /s/ Thomas G. Caldwell

Thomas G. Caldwell
    
    March 21, 2008President, Chief Executive Officer, and Director/s/ Donald L. Stacy

Donald L. Stacy, Treasurer and Chief Financial Officer
    
    March 21, 2008Principal Financial & Accounting Officer/s/ Richard T. Coyne

Richard T. Coyne, Chairman of the Board
    
    March 21, 2008/s/ Frances H. Frank

Frances H. Frank, Director
    
    March 21, 2008/s/ Thomas C. Halstead

Thomas C. Halstead, Director
    
    March 21, 2008/s/ James R. Heslop, II

James R. Heslop, II, Executive Vice President,
    
    March 21, 2008Chief Operating Officer, and Director/s/ Kenneth E. Jones

Kenneth E Jones, Director
    
    March 21, 2008/s/ James McCaskey
James McCaskey, Director
    
    March 21, 2008/s/ Carolyn Turk
Carolyn Turk, Director
    
    March 21, 2008/s/ William J. Skidmore

William J. Skidmore, Director
    
    March 21, 2008/s/ Donald E. Villers

Donald E. Villers, Director
    
    March 21, 2008
 25




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##### Table of Contents



REPORT OF REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM
 
     /s/ S. R. Snodgrass, A.C.S. R. Snodgrass, A.C. 
 26




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##### Table of Contents



MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
      /s/ Thomas G. CaldwellBy:
    Thomas G. CaldwellPresident and Chief Executive Officer
(Principal Executive Officer)  /s/ Donald L. StacyBy:
    
    Donald L. StacyTreasurer
(Principal Financial & Accounting Officer)  27