##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20552
 FORM
10-Q
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2011
 Commission File Number 000-32561
 
 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.)
 15985 East High Street, Middlefield, Ohio 44062-9263
(Address of principal executive offices)
 (440) 632-1666
(Registrants telephone number, including area code)
 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YESþNOo
 Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate website, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or
for such shorter period that the registrant was required to submit and post such files). YESþNOo
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer or a smaller reporting company. See the definition of large accelerated
filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.
(Check one):
 Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Small reporting company þ
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). YES o NO þ
 State the number of shares outstanding of each of the issuers classes of common equity as of the
latest practicle date:
 Class: Common Stock, without par value
Outstanding at May 12, 2011: 1,646,609




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##### 



MIDDLEFIELD BANC CORP.
 INDEX
 PageNumberPART I    FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheet (Unaudited) as of March 31, 2011 and December 31, 2010
    
    
    3Consolidated Statement of Income (Unaudited) for the Three Months ended March 31, 2011 and 2010
    
    
    4Consolidated Statement of Changes in Stockholders Equity (Unaudited) for the Three Months ended March 31, 2011
    
    
    5Consolidated Statement of Cash Flows (Unaudited) for the Three Months ended March 31, 2011 and 2010
    
    
    6Notes to Unaudited Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    29Item 4. Controls and Procedures
    
    
    30PART II    OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    30Item 1A.
Risk Factors
    
    
    31Item 2. Unregistered sales of equity securities and use of proceeds
    
    
    31Item 3. Default Upon Senior Securities
    
    
    31Item 4. Reserved
    
    
    31Item 5. Other Information
    
    
    31Item 6. Exhibits and Reports on Form 8 - K
    
    
    31SIGNATURES
    
    
    35Exhibit 31.1Exhibit 31.2Exhibit 32Exhibit 99
   2




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(Unaudited)March 31,
    
    
    December 31,2011
    
    
    2010ASSETSCash and due from banks
    
    $
    11,555
    
    
    $
    10,473Federal funds sold
    
    
    30,581
    
    
    
    20,162Cash and cash equivalents
    
    
    42,136
    
    
    
    30,635Investment securities available for sale
    
    
    189,640
    
    
    
    201,772Loans
    
    
    376,529
    
    
    
    372,498Less allowance for loan losses
    
    
    6,685
    
    
    
    6,221Net loans
    
    
    369,844
    
    
    
    366,277Premises and equipment
    
    
    8,053
    
    
    
    8,179Goodwill
    
    
    4,559
    
    
    
    4,559Bank-owned life insurance
    
    
    8,052
    
    
    
    7,979Accrued interest and other assets
    
    
    13,553
    
    
    
    12,796TOTAL ASSETS
    
    $
    635,837
    
    
    $
    632,197LIABILITIESDeposits:Noninterest-bearing demand
    
    $
    52,831
    
    
    $
    53,391Interest-bearing demand
    
    
    54,371
    
    
    
    48,869Money market
    
    
    75,046
    
    
    
    71,105Savings
    
    
    155,945
    
    
    
    146,993Time
    
    
    230,411
    
    
    
    244,893Total deposits
    
    
    568,604
    
    
    
    565,251Short-term borrowings
    
    
    7,301
    
    
    
    7,632Other borrowings
    
    
    18,956
    
    
    
    19,321Accrued interest and other liabilities
    
    
    1,693
    
    
    
    1,971TOTAL LIABILITIES
    
    
    596,554
    
    
    
    594,175STOCKHOLDERS EQUITYCommon stock, no par value; 10,000,000 shares authorized,
1,836,139 and 1,780,553 shares issued
    
    
    29,286
    
    
    
    28,429Retained earnings
    
    
    16,418
    
    
    
    15,840Accumulated other comprehensive income
    
    
    313
    
    
    
    487Treasury stock, at cost; 189,530 shares
    
    
    (6,734
    )
    
    
    (6,734
    )TOTAL STOCKHOLDERS EQUITY
    
    
    39,283
    
    
    
    38,022TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    635,837
    
    
    $
    632,197
   3




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Three Months EndedMarch 31,2011
    
    
    2010INTEREST INCOMEInterest and fees on loans
    
    $
    5,301
    
    
    $
    5,097Interest-bearing deposits in
other institutions
    
    
    2
    
    
    
    4Federal funds sold
    
    
    9
    
    
    
    11Investment securities:Taxable interest
    
    
    1,323
    
    
    
    1,203Tax-exempt interest
    
    
    698
    
    
    
    592Dividends on stock
    
    
    26
    
    
    
    17Total interest income
    
    
    7,359
    
    
    
    6,924INTEREST EXPENSEDeposits
    
    
    2,037
    
    
    
    2,485Short term borrowings
    
    
    59
    
    
    
    58Other borrowings
    
    
    109
    
    
    
    190Trust preferred securities
    
    
    136
    
    
    
    136Total interest expense
    
    
    2,341
    
    
    
    2,869NET INTEREST INCOME
    
    
    5,018
    
    
    
    4,055Provision for loan losses
    
    
    865
    
    
    
    439NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES
    
    
    4,153
    
    
    
    3,616NONINTEREST INCOMEService charges on deposit accounts
    
    
    428
    
    
    
    415Investment securities gains, net
    
    
    15
    
    
    
    9Earnings on bank-owned life insurance
    
    
    73
    
    
    
    67Other income
    
    
    183
    
    
    
    118Total noninterest income
    
    
    699
    
    
    
    609NONINTEREST EXPENSESalaries and employee benefits
    
    
    1,690
    
    
    
    1,511Occupancy expense
    
    
    272
    
    
    
    276Equipment expense
    
    
    158
    
    
    
    198Data processing costs
    
    
    180
    
    
    
    243Ohio state franchise tax
    
    
    128
    
    
    
    136Federal deposit insurance expense
    
    
    225
    
    
    
    202Professional fees
    
    
    211
    
    
    
    192Loss (gain) on sale of other real estate owned
    
    
    (20
    )
    
    
    121Other expense
    
    
    861
    
    
    
    679Total noninterest expense
    
    
    3,705
    
    
    
    3,558Income before income taxes
    
    
    1,147
    
    
    
    667Income taxes
    
    
    145
    
    
    
    22NET INCOME
    
    $
    1,002
    
    
    $
    645EARNINGS PER SHAREBasic
    
    $
    0.62
    
    
    $
    0.41Diluted
    
    
    0.62
    
    
    
    0.41DIVIDENDS DECLARED PER SHARE
    
    $
    0.26
    
    
    $
    0.26
   4




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AccumulatedOther
    
    
    
    
    
    
    TotalCommon
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    Stockholders
    
    
    ComprehensiveStock
    
    
    Earnings
    
    
    Income
    
    
    Stock
    
    
    Equity
    
    
    IncomeBalance, December 31, 2010
    
    $
    28,429
    
    
    $
    15,840
    
    
    $
    487
    
    
    $
    (6,734
    )
    
    $
    38,022Net income
    
    
    
    
    
    
    1,002
    
    
    
    
    
    
    
    
    
    
    
    1,002
    
    
    $
    1,002Other comprehensive income:Unrealized loss on available for sale
securities net of taxes of $89, net
of reclassification adjustment
    
    
    
    
    
    
    
    
    
    
    (174
    )
    
    
    
    
    
    
    (174
    )
    
    
    (174
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    828Stock based compensation expense (2,400 shares)
    
    
    43
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43Common stock issuance (41,625 shares)
    
    
    666
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    666Dividend reinvestment and purchase plan (8,436 shares)
    
    
    148
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    148Cash dividends ($0.26 per share)
    
    
    
    
    
    
    (424
    )
    
    
    
    
    
    
    
    
    
    
    (424
    )Balance, March 31, 2011
    
    $
    29,286
    
    
    $
    16,418
    
    
    $
    313
    
    
    $
    (6,734
    )
    
    $
    39,283
   5




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Three Months EndedMarch 31,2011
    
    
    2010OPERATING ACTIVITIESNet income
    
    $
    1,002
    
    
    $
    645Adjustments to reconcile net income to
net cash provided by (used for) operating activities:Provision for loan losses
    
    
    865
    
    
    
    439Investment securities gains, net
    
    
    (15
    )
    
    
    (9
    )Depreciation and amortization
    
    
    211
    
    
    
    189Amortization of premium and
discount on investment securities
    
    
    116
    
    
    
    (59
    )Amortization of deferred loan fees, net
    
    
    (40
    )
    
    
    (3
    )Earnings on bank-owned life insurance
    
    
    (73
    )
    
    
    (67
    )Deferred income taxes
    
    
    (384
    )
    
    
    (227
    )Loss on sale of other real estate owned
    
    
    (20
    )
    
    
    44Increase in accrued interest receivable
    
    
    (487
    )
    
    
    (681
    )Increase (decrease) in accrued interest payable
    
    
    (31
    )
    
    
    26Decrease in prepaid federal deposit insurance
    
    
    225
    
    
    
    186Other, net
    
    
    (338
    )
    
    
    (941
    )Net cash provided by (used for) operating activities
    
    
    1,031
    
    
    
    (458
    )INVESTING ACTIVITIESInvestment securities available for sale:Proceeds from repayments and maturities
    
    
    10,135
    
    
    
    6,986Proceeds from sale of securities
    
    
    14,879
    
    
    
    3,893Purchases
    
    
    (13,247
    )
    
    
    (37,913
    )Increase in loans, net
    
    
    (4,487
    )
    
    
    (6,298
    )Proceeds from the sale of other real estate owned
    
    
    170
    
    
    
    96Purchase of premises and equipment
    
    
    (26
    )
    
    
    (165
    )Net cash provided by (used for) investing activities
    
    
    7,423
    
    
    
    (33,401
    )FINANCING ACTIVITIESNet increase in deposits
    
    
    3,353
    
    
    
    35,171Decrease in short-term borrowings, net
    
    
    (331
    )
    
    
    (28
    )Repayment of other borrowings
    
    
    (365
    )
    
    
    (491
    )Common stock issuance
    
    
    666
    
    
    
    Proceeds from dividend reinvestment & purchase plan
    
    
    148
    
    
    
    116Cash dividends
    
    
    (424
    )
    
    
    (408
    )Net cash provided by financing activities
    
    
    3,047
    
    
    
    34,360Increase in cash and cash equivalents
    
    
    11,501
    
    
    
    501CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD
    
    
    30,635
    
    
    
    41,153CASH AND CASH EQUIVALENTS
AT END OF PERIOD
    
    $
    42,136
    
    
    $
    41,654SUPPLEMENTAL INFORMATIONCash paid during the year for:Interest on deposits and borrowings
    
    $
    2,372
    
    
    $
    2,843Income taxes
    
    
    850
    
    
    
    400Non-cash investing transactions:Transfers from loans to other real estate owned
    
    $
    96
    
    
    $
    150
   6




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Accounting for Transfer of Financial Assets
 Equity (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
 Compensation  Stock Compensation (Topic 718):
Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the
Market in Which the Underlying Equity Security Trades
 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
  7




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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 Corrections to SEC Paragraphs  An
announcement made by the staff of the U.S. Securities and Exchange Commission
  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
 Disclosure of Supplementary Pro Forma
Information for Business Combinations
 Receivables (Topic 310): Deferral of the
Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20
  8




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##### Table of Contents



Receivables (Topic 310): A Creditors
Determination of Whether a Restructuring Is a Troubled Debt Restructuring
    Weighted-
    
    
    
    
    
    
    Weighted-average
    
    
    
    
    
    
    averageExercise
    
    
    
    
    
    
    Exercise2011
    
    
    Price
    
    
    2010
    
    
    PriceOutstanding, January 1
    
    
    89,077
    
    
    $
    27.87
    
    
    
    99,219
    
    
    $
    26.85Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    (7,549
    )
    
    
    29.22
    
    
    
    
    
    
    
    Outstanding, March 31
    
    
    81,528
    
    
    $
    27.75
    
    
    
    99,219
    
    
    $
    26.85
     9




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For the ThreeMonths EndedMarch 31,2011
    
    
    2010Weighted average common shares
outstanding
    
    
    1,811,419
    
    
    
    1,754,984Average treasury stock shares
    
    
    (189,530
    )
    
    
    (189,530
    )Weighted average common shares and
common stock equivalents used to
calculate basic earnings per share
    
    
    1,621,889
    
    
    
    1,565,454Additional common stock equivalents
(stock options) used to calculate
diluted earnings per share
    
    
    
    
    
    
    1,987Weighted average common shares and
common stock equivalents used
to calculate diluted earnings per share
    
    
    1,621,889
    
    
    
    1,567,441
     10




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For the Three MonthsEnded March 31,(Dollar amounts in thousands)
    
    2011
    
    
    2010Unrealized holding gains (losses) arising during
the period on securities held
    
    $
    (164
    )
    
    $
    692Reclassification adjustment for gains included in net income
    
    
    (10
    )
    
    
    (6
    )Net change in unrealized gains (losses) during the period
    
    
    (174
    )
    
    
    686Unrealized holding gains, beginning of period
    
    
    487
    
    
    
    562Unrealized holding gains, end of period
    
    
    313
    
    
    
    1,248Net income
    
    
    1,002
    
    
    
    645Other comprehensive income, net of tax:Unrealized holding gains (losses) arising during the period
    
    
    (174
    )
    
    
    686Comprehensive income
    
    $
    828
    
    
    $
    1,331
   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:
    
    Assets and liabilities that have little to no pricing observe ability as of the reported date. These items do not
have two-way markets and are measured using managements best estimate of fair value, where the inputs into the
determination of fair value require significant management judgment or estimation.
  11




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March 31, 2011(Dollar amounts in thousands)
    
    Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAssets Measured on a Recurring Basis:U.S. government agency securities
    
    $
    
    
    
    $
    26,470
    
    
    $
    
    
    
    $
    26,470Obligations of states and political subdivisions
    
    
    
    
    
    
    76,286
    
    
    
    
    
    
    
    76,286Mortgage-backed securities in government-sponsored entities
    
    
    
    
    
    
    69,897
    
    
    
    
    
    
    
    69,897Private-label mortgage-backed securities
    
    
    
    
    
    
    16,233
    
    
    
    
    
    
    
    16,233Total debt securities
    
    
    
    
    
    
    188,886
    
    
    
    
    
    
    
    188,886Equity securities in financial institutions
    
    
    754
    
    
    
    
    
    
    
    
    
    
    
    754Total
    
    $
    754
    
    
    $
    188,886
    
    
    $
    
    
    
    $
    189,640
 December 31, 2010Level 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 in government-sponsored entities
    
    
    
    
    
    
    74,043
    
    
    
    
    
    
    
    74,043Private-label mortgage-backed securities
    
    
    
    
    
    
    17,326
    
    
    
    
    
    
    
    17,326Total debt securities
    
    
    
    
    
    
    200,852
    
    
    
    
    
    
    
    200,852Equity securities in financial institutions
    
    
    920
    
    
    
    
    
    
    
    
    
    
    
    920Total
    
    $
    920
    
    
    
    200,852
    
    
    
    
    
    
    
    201,772
     12




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March 31, 2011(Dollar amounts in thousands)
    
    Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAssets Measured on a non-recurring Basis:Impaired loans
    
    $
    
    
    
    $
    1,818
    
    
    $
    6,695
    
    
    $
    8,513Other real estate owned
    
    
    
    
    
    
    2,248
    
    
    
    
    
    
    
    2,248
 December 31, 2010Level I
    
    
    Level II
    
    
    Level III
    
    
    TotalAssets Measured on a non-recurring Basis:Impaired loans
    
    $
    
    
    
    $
    4,312
    
    
    $
    2,758
    
    
    $
    7,070Other real estate owned
    
    
    
    
    
    
    2,302
    
    
    
    
    
    
    
    2,302
  March 31, 2011
    
    
    December 31, 2010Carrying
    
    
    Fair
    
    
    Carrying
    
    
    Fair(Dollar amounts in thousands)
    
    Value
    
    
    Value
    
    
    Value
    
    
    ValueFinancial assets:Cash and cash equivalents
    
    $
    42,136
    
    
    $
    42,136
    
    
    $
    30,635
    
    
    $
    30,635Investment securitiesAvailable for sale
    
    
    189,640
    
    
    
    189,640
    
    
    
    201,772
    
    
    
    201,772Net loans
    
    
    369,844
    
    
    
    347,335
    
    
    
    366,277
    
    
    
    347,599Bank-owned life insurance
    
    
    8,052
    
    
    
    8,052
    
    
    
    7,979
    
    
    
    7,979Federal Home Loan Bank stock
    
    
    1,887
    
    
    
    1,887
    
    
    
    1,887
    
    
    
    1,887Accrued interest receivable
    
    
    2,746
    
    
    
    2,746
    
    
    
    2,259
    
    
    
    2,259Financial liabilities:Deposits
    
    $
    568,604
    
    
    $
    573,117
    
    
    $
    565,251
    
    
    $
    570,471Short-term borrowings
    
    
    7,301
    
    
    
    7,301
    
    
    
    7,632
    
    
    
    7,632Other borrowings
    
    
    18,956
    
    
    
    20,980
    
    
    
    19,321
    
    
    
    19,801Accrued interest payable
    
    
    759
    
    
    
    759
    
    
    
    790
    
    
    
    790
      13




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##### Table of Contents



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
   14




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NOTE 6- INVESTMENT SECURITIES AVAILABLE FOR SALE
  March 31, 2011Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Fair(Dollar amounts in thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueU.S. government agency
securities
    
    $
    27,269
    
    
    $
    64
    
    
    $
    (863
    )
    
    $
    26,470Obligations of states and
political subdivisions:Taxable
    
    
    7,369
    
    
    
    49
    
    
    
    (59
    )
    
    
    7,359Tax-exempt
    
    
    68,562
    
    
    
    1,064
    
    
    
    (699
    )
    
    
    68,927Mortgage-backed securities in
government sponsored entities
    
    
    69,604
    
    
    
    1,108
    
    
    
    (815
    )
    
    
    69,897Private-label mortgage backed securities
    
    
    15,418
    
    
    
    1,025
    
    
    
    (210
    )
    
    
    16,233Total debt securities
    
    
    188,222
    
    
    
    3,310
    
    
    
    (2,646
    )
    
    
    188,886Equity securities in financial institutions
    
    
    944
    
    
    
    
    
    
    
    (190
    )
    
    
    754Total
    
    $
    189,166
    
    
    $
    3,310
    
    
    $
    (2,836
    )
    
    $
    189,640
 December 31, 2010Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    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 in
government sponsored entities
    
    
    73,390
    
    
    
    2,270
    
    
    
    (654
    )
    
    
    74,043Private-label mortgage backed securities
    
    
    16,636
    
    
    
    55
    
    
    
    (328
    )
    
    
    17,326Total debt securities
    
    
    200,092
    
    
    
    3,574
    
    
    
    (2,814
    )
    
    
    200,852Equity securities in financial institutions
    
    
    944
    
    
    
    80
    
    
    
    (104
    )
    
    
    920Total
    
    $
    201,036
    
    
    $
    3,654
    
    
    $
    (2,918
    )
    
    $
    201,772
  Amortized
    
    
    Fair(Dollar amounts in thousands)
    
    Cost
    
    
    ValueDue in one year or less
    
    $
    1,975
    
    
    $
    2,000Due after one year through five years
    
    
    5,685
    
    
    
    5,962Due after five years through ten years
    
    
    19,501
    
    
    
    20,128Due after ten years
    
    
    161,061
    
    
    
    160,796Total
    
    $
    188,222
    
    
    $
    188,886
   15




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##### Table of Contents



March 31, 2011Less than Twelve Months
    
    
    Twelve Months or Greater
    
    
    TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized(Dollar amounts in thousands)
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesU.S. government agency
securities
    
    $
    22,690
    
    
    $
    (863
    )
    
    $
    
    
    
    $
    
    
    
    $
    22,690
    
    
    $
    (863
    )Obligations of states and
political subdivisions
    
    
    32,515
    
    
    
    (681
    )
    
    
    414
    
    
    
    (77
    )
    
    
    32,929
    
    
    
    (758
    )Mortgage-backed securities in
government sponsored entities
    
    
    30,538
    
    
    
    (815
    )
    
    
    
    
    
    
    
    
    
    
    30,538
    
    
    
    (815
    )Private-label mortgage backed securities
    
    
    488
    
    
    
    (21
    )
    
    
    2,102
    
    
    
    (189
    )
    
    
    2,590
    
    
    
    (210
    )Equity securities in financial institutions
    
    
    165
    
    
    
    (85
    )
    
    
    590
    
    
    
    (105
    )
    
    
    755
    
    
    
    (190
    )Total
    
    $
    86,396
    
    
    $
    (2,465
    )
    
    $
    3,106
    
    
    $
    (371
    )
    
    $
    89,502
    
    
    $
    (2,836
    )
 December 31, 2010Less than Twelve Months
    
    
    Twelve Months or Greater
    
    
    TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    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 in
government sponsored entities
    
    
    27,792
    
    
    
    (654
    )
    
    
    
    
    
    
    
    
    
    
    27,792
    
    
    
    (654
    )Private-label mortgage backed securities
    
    
    510
    
    
    
    (11
    )
    
    
    2,480
    
    
    
    (317
    )
    
    
    2,990
    
    
    
    (328
    )Equity securities in financial institutions
    
    
    
    
    
    
    
    
    
    
    590
    
    
    
    (104
    )
    
    
    590
    
    
    
    (104
    )Total
    
    $
    88,554
    
    
    $
    (2,445
    )
    
    $
    3,509
    
    
    $
    (473
    )
    
    $
    92,063
    
    
    $
    (2,918
    )
    16




---



##### Table of Contents




    
    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; and
    
    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.
  NOTE 7- LOANS AND RELATED ALLOWANCE FOR LOAN LOSSES
  March 31,
    
    
    December 31,2011
    
    
    2010Commercial and industrial
    
    $
    59,068
    
    
    $
    57,501Real estate  construction
    
    
    16,974
    
    
    
    15,845Real estate  mortgage:Residential
    
    
    208,444
    
    
    
    209,863Commercial
    
    
    87,325
    
    
    
    84,304Consumer installment
    
    
    4,718
    
    
    
    4,985376,529
    
    
    
    372,498Less allowance for loan losses
    
    
    6,685
    
    
    
    6,221Net loans
    
    $
    369,844
    
    
    $
    366,277
   17




---



##### Table of Contents



Real Estate- MortgageCommercial and
    
    
    Real estate-
    
    
    
    
    
    
    
    
    
    
    ConsumerMarch 31, 2011
    
    industrial
    
    
    construction
    
    
    Residential
    
    
    Commercial
    
    
    installment
    
    
    TotalTotal loans
    
    $
    59,068
    
    
    $
    16,974
    
    
    $
    208,444
    
    
    $
    87,325
    
    
    $
    4,718
    
    
    $
    376,529Individually
evaluated for
impairment
    
    $
    5,413
    
    
    $
    1,290
    
    
    $
    5,829
    
    
    $
    5,466
    
    
    $
    
    
    
    $
    17,388Collectively
evaluated for
impairment
    
    
    53,655
    
    
    
    15,684
    
    
    
    202,615
    
    
    
    81,859
    
    
    
    4,718
    
    
    
    359,141
 Real estate- MortgageCommercial and
    
    
    Real estate-
    
    
    
    
    
    
    
    
    
    
    ConsumerDecember 31, 2010
    
    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
     18




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##### Table of Contents



Impaired Loanswith NoImpaired Loans with
    
    
    Specific
    
    
    Total Impaired LoansSpecific Allowance
    
    
    Allowance
    
    
    
    
    
    
    UnpaidRecorded
    
    
    Related
    
    
    Recorded
    
    
    Recorded
    
    
    PrincipalInvestment
    
    
    Allowance
    
    
    Investment
    
    
    Investment
    
    
    BalanceMarch 31, 2011Commercial and industrial
    
    $
    1,633
    
    
    $
    572
    
    
    $
    1,694
    
    
    $
    3,327
    
    
    $
    3,338Real estate  construction
    
    
    
    
    
    
    
    
    
    
    618
    
    
    
    618
    
    
    
    614Real estate  mortgage:Residential
    
    
    582
    
    
    
    217
    
    
    
    
    
    
    
    582
    
    
    
    581Commercial
    
    
    652
    
    
    
    261
    
    
    
    2,555
    
    
    
    3,207
    
    
    
    3,202Total impaired loans
    
    $
    2,867
    
    
    $
    1,050
    
    
    $
    4,867
    
    
    $
    7,734
    
    
    $
    7,735December 31, 2010Commercial and industrial
    
    $
    655
    
    
    $
    203
    
    
    $
    1,874
    
    
    $
    2,529
    
    
    $
    2,540Real estate  construction
    
    
    
    
    
    
    
    
    
    
    618
    
    
    
    618
    
    
    
    614Real estate  mortgage:Residential
    
    
    594
    
    
    
    221
    
    
    
    
    
    
    
    594
    
    
    
    594Commercial
    
    
    1,879
    
    
    
    188
    
    
    
    1,441
    
    
    
    3,320
    
    
    
    3,314Total impaired loans
    
    $
    3,128
    
    
    $
    612
    
    
    $
    3,933
    
    
    $
    7,681
    
    
    $
    7,062
    19




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##### Table of Contents



Special
    
    
    
    
    
    
    
    
    
    
    TotalPass
    
    
    Mention
    
    
    Substandard
    
    
    Doubtful
    
    
    LoansMarch 31, 2011Commercial and industrial
    
    $
    53,394
    
    
    $
    1,053
    
    
    $
    4,397
    
    
    $
    224
    
    
    $
    59,068Real estate  construction
    
    
    15,646
    
    
    
    
    
    
    
    1,328
    
    
    
    
    
    
    
    16,974Real estate  mortgage:Residential
    
    
    192,505
    
    
    
    1,529
    
    
    
    14,410
    
    
    
    
    
    
    
    208,444Commercial
    
    
    79,446
    
    
    
    341
    
    
    
    7,538
    
    
    
    
    
    
    
    87,325Consumer installment
    
    
    4,680
    
    
    
    10
    
    
    
    28
    
    
    
    
    
    
    
    4,718Total
    
    $
    345,671
    
    
    $
    2,933
    
    
    $
    27,701
    
    
    $
    224
    
    
    $
    376,529
 Special
    
    
    
    
    
    
    
    
    
    
    TotalPass
    
    
    Mention
    
    
    Substandard
    
    
    Doubtful
    
    
    LoansDecember 31, 2010Commercial 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
  Still Accruing30-59 Days
    
    
    60-89 Days
    
    
    90 Days+
    
    
    Total
    
    
    Non-
    
    
    TotalCurrent
    
    
    Past Due
    
    
    Past Due
    
    
    Past Due
    
    
    Past Due
    
    
    Accrual
    
    
    LoansMarch 31, 2011Commercial and industrial
    
    $
    53,648
    
    
    $
    1,327
    
    
    $
    755
    
    
    $
    7
    
    
    $
    2,089
    
    
    $
    3,331
    
    
    $
    59,068Real estate  construction
    
    
    16,331
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    643
    
    
    
    16,974Real estate  mortgage:Residential
    
    
    191,836
    
    
    
    5,012
    
    
    
    873
    
    
    
    48
    
    
    
    5,933
    
    
    
    10,675
    
    
    
    208,444Commercial
    
    
    82,619
    
    
    
    292
    
    
    
    50
    
    
    
    
    
    
    
    342
    
    
    
    4,364
    
    
    
    87,325Consumer installment
    
    
    4,591
    
    
    
    95
    
    
    
    28
    
    
    
    
    
    
    
    123
    
    
    
    4
    
    
    
    4,718Total
    
    $
    349,026
    
    
    $
    6,726
    
    
    $
    1,706
    
    
    $
    55
    
    
    $
    8,487
    
    
    $
    19,017
    
    
    $
    376,529
 Still Accruing30-59 Days
    
    
    60-89 Days
    
    
    90 Days+
    
    
    Total
    
    
    Non-
    
    
    TotalCurrent
    
    
    Past Due
    
    
    Past Due
    
    
    Past Due
    
    
    Past Due
    
    
    Accrual
    
    
    LoansDecember 31, 2010Commercial 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
    
    
    78,361
    
    
    
    1,607
    
    
    
    824
    
    
    
    
    
    
    
    2,431
    
    
    
    3,513
    
    
    
    84,304Consumer installment
    
    
    4,841
    
    
    
    120
    
    
    
    12
    
    
    
    
    
    
    
    132
    
    
    
    12
    
    
    
    4,985Total
    
    $
    345,757
    
    
    $
    5,150
    
    
    $
    3,192
    
    
    $
    
    
    
    $
    8,342
    
    
    $
    18,399
    
    
    $
    372,498
  20




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##### Table of Contents



Commercial
    
    
    Real estate-
    
    
    Real estate-
    
    
    Consumerand industrial
    
    
    construction
    
    
    mortgage
    
    
    installment
    
    
    TotalALL balance at December 31, 2010
    
    
    962
    
    
    $
    188
    
    
    $
    4,977
    
    
    $
    94
    
    
    $
    6,221Charge-offs
    
    
    (70
    )
    
    
    (6
    )
    
    
    (350
    )
    
    
    (6
    )
    
    
    (432
    )Recoveries
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    18
    
    
    
    31Provision
    
    
    134
    
    
    
    26
    
    
    
    692
    
    
    
    13
    
    
    
    865ALL balance at March 31, 2011
    
    $
    1,039
    
    
    $
    208
    
    
    $
    5,319
    
    
    $
    119
    
    
    $
    6,685
 
 Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
  CHANGES IN FINANCIAL CONDITION
 General.
  21




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##### Table of Contents



Cash on hand and due from banks.
 Investment securities.
 Loans receivable.
 Allowance for Loan Losses and Asset Quality.
   Non-performing assets.
  22




---



##### Table of Contents



Nonperforming Assets and Allowance for Loan Losses.
 
 (Dollar amounts in thousands)
    
    3/31/2011
    
    
    12/31/2010
    
    
    9/30/2010
    
    
    6/30/2010
    
    
    3/31/2010Nonperforming loans
    
    $
    22,014
    
    
    $
    19,986
    
    
    $
    20,983
    
    
    $
    20,053
    
    
    $
    18,143Real estate owned
    
    $
    2,248
    
    
    
    2,302
    
    
    
    2,016
    
    
    
    1,886
    
    
    
    2,175Nonperforming assets
    
    $
    24,262
    
    
    $
    22,288
    
    
    $
    22,999
    
    
    $
    21,939
    
    
    $
    20,318Allowance for loan losses
    
    $
    6,685
    
    
    $
    6,221
    
    
    $
    5,971
    
    
    $
    5,834
    
    
    $
    5,279RatiosNonperforming loans to total loans
    
    
    5.85
    %
    
    
    5.37
    %
    
    
    5.75
    %
    
    
    5.50
    %
    
    
    5.04
    %Nonperforming assets to total
assets
    
    
    3.82
    %
    
    
    3.53
    %
    
    
    3.61
    %
    
    
    3.61
    %
    
    
    3.42
    %Allowance for loan losses to total
loans
    
    
    1.78
    %
    
    
    1.67
    %
    
    
    1.63
    %
    
    
    1.60
    %
    
    
    1.47
    %Allowance for loan losses to
nonperforming loans
    
    
    30.37
    %
    
    
    31.13
    %
    
    
    28.46
    %
    
    
    29.09
    %
    
    
    29.10
    %
  Deposits.
 Borrowed funds.
 Stockholders equity.
 RESULTS OF OPERATIONS
 General.
  23




---



##### Table of Contents



Net interest income.
  Interest income.
   Interest expense.
    24




---



##### Table of Contents



Provision for loan losses.
 Non-interest income.
 Non-interest expense.
 Provision for income taxes.
 CRITICAL ACCOUNTING ESTIMATES
  Average Balance Sheet and Yield/Rate Analysis.
  25




---



##### Table of Contents



For the Three Months Ended March 31,2011

    
    
    2010Average
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    Average(Dollars in thousands)
    
    Balance
    
    
    Interest
    
    
    Yield/Cost
    
    
    Balance
    
    
    Interest
    
    
    Yield/CostInterest-earning assets:Loans receivable
    
    $
    373,916
    
    
    $
    5,301
    
    
    
    5.75
    %
    
    $
    356,239
    
    
    $
    5,097
    
    
    
    5.80
    %Investment securities (3)
    
    
    195,074
    
    
    
    2,021
    
    
    
    4.95
    %
    
    
    151,807
    
    
    
    1,795
    
    
    
    5.61
    %Interest-bearing deposits with other banks
    
    
    24,119
    
    
    
    37
    
    
    
    0.62
    %
    
    
    30,020
    
    
    
    32
    
    
    
    0.43
    %Total interest-earning assets
    
    
    593,109
    
    
    
    7,359
    
    
    
    5.28
    %
    
    
    538,066
    
    
    
    6,924
    
    
    
    5.45
    %Noninterest-earning assets
    
    
    37,326
    
    
    
    
    
    
    
    
    
    
    
    38,144Total assets
    
    $
    630,435
    
    
    
    
    
    
    
    
    
    
    $
    576,210Interest-bearing liabilities:Interest  bearing demand deposits
    
    $
    49,950
    
    
    
    80
    
    
    
    0.65
    %
    
    $
    38,874
    
    
    
    95
    
    
    
    0.99
    %Money market deposits
    
    
    71,927
    
    
    
    178
    
    
    
    1.00
    %
    
    
    60,491
    
    
    
    279
    
    
    
    1.87
    %Savings deposits
    
    
    151,029
    
    
    
    337
    
    
    
    0.90
    %
    
    
    113,593
    
    
    
    427
    
    
    
    1.53
    %Certificates of deposit
    
    
    236,917
    
    
    
    1,442
    
    
    
    2.47
    %
    
    
    247,559
    
    
    
    1,684
    
    
    
    2.76
    %Borrowings
    
    
    26,784
    
    
    
    304
    
    
    
    4.60
    %
    
    
    32,328
    
    
    
    384
    
    
    
    4.81
    %Total interest-bearing liabilities
    
    
    536,607
    
    
    
    2,341
    
    
    
    1.77
    %
    
    
    492,845
    
    
    
    2,869
    
    
    
    2.36
    %Noninterest-bearing liabilitiesOther liabilities
    
    
    55,956
    
    
    
    
    
    
    
    
    
    
    
    46,306Stockholders equity
    
    
    37,872
    
    
    
    
    
    
    
    
    
    
    
    37,060Total liabilities and stockholders equity
    
    $
    630,435
    
    
    
    
    
    
    
    
    
    
    $
    576,210Net interest income
    
    
    
    
    
    $
    5,018
    
    
    
    
    
    
    
    
    
    
    $
    4,055Interest rate spread (1)
    
    
    
    
    
    
    
    
    
    
    3.51
    %
    
    
    
    
    
    
    
    
    
    
    3.09
    %Net yield on interest-earning assets (2)
    
    
    
    
    
    
    
    
    
    
    3.68
    %
    
    
    
    
    
    
    
    
    
    
    3.29
    %Ratio of average interest-earning assets to
average interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    110.53
    %
    
    
    
    
    
    
    
    
    
    
    109.18
    %
 
 (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 interest margin represents net interest income as a percentage of average
interest-earning assets.(3)
    
    Tax equivalent adjustments to interest incomefor tax-exempt securities was $360 and $305 for
2011 and 2010, respectively. Analysis of Changes in Net Interest Income.
  26




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##### Table of Contents



For the Three Months ended March 31,2011 versus 2010Increase (decrease) due to(Dollars in thousands)
    
    Volume
    
    
    Rate
    
    
    TotalInterest-earning assets:Loans receivable
    
    $
    253
    
    
    $
    (49
    )
    
    $
    204Investment securities
    
    
    599
    
    
    
    (373
    )
    
    
    226Interest-bearing deposits with other banks
    
    
    (6
    )
    
    
    11
    
    
    
    5Total interest-earning assets
    
    
    845
    
    
    
    (410
    )
    
    
    435Interest-bearing liabilities:Interest  bearing demand deposits
    
    
    27
    
    
    
    (42
    )
    
    
    (15
    )Money market deposits
    
    
    53
    
    
    
    (154
    )
    
    
    (101
    )Savings deposits
    
    
    141
    
    
    
    (231
    )
    
    
    (90
    )Certificates of deposit
    
    
    (72
    )
    
    
    (169
    )
    
    
    (242
    )Borrowings
    
    
    (66
    )
    
    
    (14
    )
    
    
    (80
    )Total interest-bearing liabilities
    
    
    83
    
    
    
    (611
    )
    
    
    (528
    )Net interest income
    
    $
    763
    
    
    $
    200
    
    
    $
    963
 LIQUIDITY
   INFLATION
    27




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##### Table of Contents



REGULATORY MATTERS
       Adequately
    
    
    Well
    
    
    March 31,
    
    
    December 31,Capital Ratio
    
    Capitalized
    
    
    Capitalized
    
    
    2011
    
    
    2010Tier I Leverage Capital
    
    
    4.00
    %
    
    
    5.00
    %(1)
    
    
    8.53
    %
    
    
    10.29
    %Risk-Based Capital:Tier I
    
    
    4.00
    
    
    
    6.00
    
    
    
    12.67
    
    
    
    13.63Total
    
    
    8.00
    
    
    
    10.00
    
    
    
    13.97
    
    
    
    14.91
 (1)
    
    9 percent required by the MOU. REGULATORY CAPITAL REQUIREMENTS
    28




---



##### Table of Contents



Middlefield Banc Corp.
    
    
    The Middlefield Banking Co.
    
    
    Emerald BankMarch 31,
    
    
    March 31,
    
    
    March 31,2011
    
    
    2011
    
    
    2011Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioTotal Capital
(to Risk-weighted Assets)Actual
    
    $
    46,324
    
    
    
    11.79
    %
    
    $
    39,194
    
    
    
    11.46
    %
    
    $
    6,721
    
    
    
    13.97
    %For Capital Adequacy Purposes
    
    
    31,437
    
    
    
    8.00
    
    
    
    27,369
    
    
    
    8.00
    
    
    
    3,850
    
    
    
    8.00To Be Well Capitalized
    
    
    39,297
    
    
    
    10.00
    
    
    
    34,211
    
    
    
    10.00
    
    
    
    4,812
    
    
    
    10.00Tier I Capital
(to Risk-weighted Assets)Actual
    
    $
    41,390
    
    
    
    10.53
    %
    
    $
    34,916
    
    
    
    10.21
    %
    
    $
    6,098
    
    
    
    12.67
    %For Capital Adequacy Purposes
    
    
    15,719
    
    
    
    4.00
    
    
    
    13,685
    
    
    
    4.00
    
    
    
    1,925
    
    
    
    4.00To Be Well Capitalized
    
    
    23,578
    
    
    
    6.00
    
    
    
    20,527
    
    
    
    5.00
    
    
    
    2,887
    
    
    
    6.00Tier I Capital
(to Average Assets)Actual
    
    $
    41,390
    
    
    
    6.63
    %
    
    $
    34,916
    
    
    
    6.39
    %
    
    $
    6,098
    
    
    
    8.53
    %For Capital Adequacy Purposes
    
    
    24,965
    
    
    
    4.00
    
    
    
    21,852
    
    
    
    4.00
    
    
    
    2,859
    
    
    
    4.00To Be Well Capitalized
    
    
    31,207
    
    
    
    5.00
    
    
    
    27,315
    
    
    
    5.00
    
    
    
    3,574
    
    
    
    5.00
 
 Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
 ASSET AND LIABILITY MANAGEMENT
    Net interest income simulation.
  29




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##### Table of Contents



Portfolio equity simulation.
  Increase
    
    
    Decrease200 Basis Points
    
    
    200 Basis PointsNet interest income  increase (decrease)
    
    
    1.86
    %
    
    
    2.07
    %Portfolio equity  increase (decrease)
    
    
    (11.02
    )%
    
    
    (7.32
    )%
 
 Item 4.
    
    Controls and Procedures
 Controls and Procedures Disclosure
    Changes in Internal Control over Financial Reporting
  
  
 Item 1.
    
    Legal Proceedings
   30




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##### Table of Contents



Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3.
    
    Defaults by the Company on its senior securities
  
 Item 4.
    
    Reserved
 
 Item 5.
    
    Other information
  
 Item 6.
    
    Exhibits
 Exhibit list for Middlefield Banc Corp.s Form 10-Q Quarterly Report for the Period Ended March 31, 2011
 exhibitnumber
    
    description
    
    location3.1
    
    
    Second Amended and Restated Articles of
Incorporation of Middlefield Banc Corp.,
as amended
    
    Incorporated by
reference to
Exhibit 3.1 of
Middlefield Banc
Corp.s Annual
Report on Form 10-K
for the Fiscal Year
Ended December 31,
2005, filed on
March 29, 20063.2
    
    
    Regulations of Middlefield Banc Corp.
    
    Incorporated by
reference to
Exhibit 3.2 of
Middlefield Banc
Corp.s
registration
statement on Form
10 filed on April
17, 20014.0
    
    
    Specimen stock certificate
    
    Incorporated by
reference to
Exhibit 4 of
Middlefield Banc
Corp.s
registration
statement on Form
10 filed on April
17, 20014.1
    
    
    Amended and Restated Trust Agreement,
dated as of December 21, 2006, between
Middlefield Banc Corp., as Depositor,
Wilmington Trust Company, as Property
trustee, Wilmington Trust Company, as
Delaware Trustee, and Administrative
Trustees
    
    Incorporated by
reference to
Exhibit 4.1 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on December
27, 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, 2006
  31




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##### Table of Contents



exhibitnumber
    
    description
    
    location10.1.0*
    
    
    1999 Stock Option Plan of Middlefield
Banc Corp.
    
    Incorporated by
reference to
Exhibit 10.1 of
Middlefield Banc
Corp.s
registration
statement on Form
10 filed on April
17, 200110.1.1*
    
    
    2007 Omnibus Equity Plan
    
    Incorporated by
reference to
Middlefield Banc
Corp.s definitive
proxy statement for
the 2008 Annual
Meeting of
Shareholders,
Appendix A, filed
on April 7, 200810.2*
    
    
    Severance Agreement between Middlefield
Banc Corp. and Thomas G. Caldwell, dated
January 7, 2008
    
    Incorporated by
reference to
Exhibit 10.2 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on January 9,
200810.3*
    
    
    Severance Agreement between Middlefield
Banc Corp. and James R. Heslop, II,
dated January 7, 2008
    
    Incorporated by
reference to
Exhibit 10.3 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on January 9,
200810.4.0*
    
    
    Severance Agreement between Middlefield
Banc Corp. and Jay P. Giles, dated
January 7, 2008
    
    Incorporated by
reference to
Exhibit 10.4 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on January 9,
200810.4.1*
    
    
    Severance Agreement between Middlefield
Banc Corp. and Teresa M. Hetrick, dated
January 7, 2008
    
    Incorporated by
reference to
Exhibit 10.4.1 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on January 9,
200810.4.2*
    
    
    Severance Agreement between Middlefield
Banc Corp. and Jack L. Lester, dated
January 7, 2008
    
    Incorporated by
reference to
Exhibit 10.4.2 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on January 9,
200810.4.3*
    
    
    Severance Agreement between Middlefield
Banc Corp. and Donald L. Stacy, dated
January 7, 2008
    
    Incorporated by
reference to
Exhibit 10.4.3 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on January 9,
200810.4.4*
    
    
    Severance Agreement between Middlefield
Banc Corp. and Alfred F. Thompson Jr.,
dated January 7, 2008
    
    Incorporated by
reference to
Exhibit 10.4.4 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on January 9,
200810.5
    
    
    Federal Home Loan Bank of Cincinnati
Agreement for Advances and Security
Agreement dated September 14, 2000
    
    Incorporated by
reference to
Exhibit 10.4 of
Middlefield Banc
Corp.s
registration
statement on Form
10 filed on April
17, 200110.6*
    
    
    Amended Director Retirement Agreement
with Richard T. Coyne
    
    Incorporated by
reference to
Exhibit 10.6 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on January 9,
200810.7*
    
    
    Amended Director Retirement Agreement
with Frances H. Frank
    
    Incorporated by
reference to
Exhibit 10.7 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on January 9,
200810.8*
    
    
    Amended Director Retirement Agreement
with Thomas C. Halstead
    
    Incorporated by
reference to
Exhibit 10.8 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on January 9,
200810.9*
    
    
    Director Retirement Agreement with
George F. Hasman
    
    Incorporated by
reference to
Exhibit 10.9 of
Middlefield Banc
Corp.s Annual
Report on Form 10-K
for the Year Ended
December 31, 2001,
filed on March 28,
2002
  32




---



##### Table of Contents



exhibitnumber
    
    description
    
    location10.10*
    
    
    Director Retirement Agreement with
Donald D. Hunter
    
    Incorporated by
reference to
Exhibit 10.10 of
Middlefield Banc
Corp.s Annual
Report on Form 10-K
for the Year Ended
December 31, 2001,
filed on March 28,
200210.11*
    
    
    Director Retirement Agreement with
Martin S. Paul
    
    Incorporated by
reference to
Exhibit 10.11 of
Middlefield Banc
Corp.s Annual
Report on Form 10-K
for the Year Ended
December 31, 2001,
filed on March 28,
200210.12*
    
    
    Amended Director Retirement Agreement
with Donald E. Villers
    
    Incorporated by
reference to
Exhibit 10.12 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on January 9,
200810.13*
    
    
    Executive Survivor Income Agreement (aka
DBO agreement [death benefit only]) with
Donald L. Stacy
    
    Incorporated by
reference to
Exhibit 10.14 of
Middlefield Banc
Corp.s Annual
Report on Form 10-K
for the Year Ended
December 31, 2003,
filed on March 30,
200410.14*
    
    
    DBO Agreement with Jay P. Giles
    
    Incorporated by
reference to
Exhibit 10.15 of
Middlefield Banc
Corp.s Annual
Report on Form 10-K
for the Year Ended
December 31, 2003,
filed on March 30,
200410.15*
    
    
    DBO Agreement with Alfred F. Thompson Jr.
    
    Incorporated by
reference to
Exhibit 10.16 of
Middlefield Banc
Corp.s Annual
Report on Form 10-K
for the Year Ended
December 31, 2003,
filed on March 30,
200410.16*
    
    
    Reserved10.17*
    
    
    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
with executive officers of Middlefield
Banc Corp. and The Middlefield Banking
Company
    
    Incorporated by
reference to
Exhibit 99.1 of
Middlefield Banc
Corp.s
registration
statement on Form
10, Amendment No.
1, filed on June
14, 2001
  33




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##### Table of Contents



exhibitnumber
    
    description
    
    location10.22
    *
    
    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
    *
    
    Amended Executive Deferred Compensation
Agreement with Thomas G. Caldwell
    
    Incorporated by
reference to
Exhibit 10.23 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on May 9,
200810.24
    *
    
    Amended Executive Deferred Compensation
Agreement with James R. Heslop, II
    
    Incorporated by
reference to
Exhibit 10.24 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on May 9,
200810.25
    *
    
    Amended Executive Deferred Compensation
Agreement with Donald L. Stacy
    
    Incorporated by
reference to
Exhibit 10.25 of
Middlefield Banc
Corp.s Form 8-K
Current Report
filed on May 9,
200831.1
    
    
    Rule 13a-14(a) certification of Chief
Executive Officer
    
    filed herewith31.2
    
    
    Rule 13a-14(a) certification of Chief
Financial Officer
    
    filed herewith32
    
    
    Rule 13a-14(b) certification
    
    filed herewith99
    
    
    Report of independent registered public
accounting firm
    
    filed herewith
 *
    
    management contract or compensatory plan or arrangement  34




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##### Table of Contents



SIGNATURES
  MIDDLEFIELD BANC CORP.Date:  May 16, 2011
    By:

/s/ Thomas G. CaldwellThomas G. CaldwellPresident and Chief Executive OfficerDate:  May 16, 2011
    By:

/s/ Donald L. StacyDonald L. StacyPrincipal Financial and Accounting Officer  35