# EDGAR Filing Document

**Accession Number:** 0000836147
**File Stem:** 0001193125-23-016376
**Filing Date:** 2023-1
**Character Count:** 33787
**Document Hash:** 8f7eeeb4ddff7052a37e4dbc8655a134
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-016376.hdr.sgml**: 20230126

**ACCESSION NUMBER**: 0001193125-23-016376

**CONFORMED SUBMISSION TYPE**: 8-K/A

**PUBLIC DOCUMENT COUNT**: 16

**CONFORMED PERIOD OF REPORT**: 20221201

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230126

**DATE AS OF CHANGE**: 20230126

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MIDDLEFIELD BANC CORP
- **CENTRAL INDEX KEY:** 0000836147
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **IRS NUMBER:** 341585111
- **STATE OF INCORPORATION:** OH
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-36613
- **FILM NUMBER:** 23558786

**BUSINESS ADDRESS:**
- **STREET 1:** 15985 E HIGH ST
- **STREET 2:** P O BOX 35
- **CITY:** MIDDLEFILED
- **STATE:** OH
- **ZIP:** 44062-9263
- **BUSINESS PHONE:** 4406321666

**MAIL ADDRESS:**
- **STREET 1:** 15985 EAST HIGH STREET
- **STREET 2:** P O BOX 35
- **CITY:** MIDDLEFIELD
- **STATE:** OH
- **ZIP:** 44062-9263

?xml version="1.0" encoding="utf-8" ? 8-K/A

------

### UNITED STATES

### SECURITIES AND EXCHANGE COMMISSION

#### WASHINGTON, DC 20549

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### FORM 8-K/A
&nbsp;&nbsp;&nbsp;&nbsp;

#### Amendment No. 1

------

#### CURRENT REPORT

#### PURSUANT TO SECTION 13 OR 15(d)

#### OF THE SECURITIES EXCHANGE ACT OF 1934

#### December 1, 2022

#### (Date of Report: Date of earliest event reported)

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## Middlefield Banc Corp.

#### (Exact name of registrant as specified in its charter)

------

#### Ohio

#### (State or other jurisdiction of incorporation)

#### 001-36613

#### (Commission File Number)

#### 34-1585111

#### (I.R.S. Employer Identification Number)

#### 15985 East High Street

#### Middlefield, Ohio 44062

#### (Address of principal executive offices, including zip code)
(440) 632-1666

#### (Registrant's telephone number, including area code)

#### (not applicable)

#### (Former name or former address, if changed since last report)

------

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading**<br> **Symbol(s)** | **Name of each exchange**<br> **on which registered** |
| Common Stock, no par value | MBCN | The NASDAQ Stock Market, LLC<br> (NASDAQ Capital Market) |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

------

#### Explanatory Note
On December 1, 2022, Middlefield Banc Corp. (the "Company") filed a Current Report on Form 8-K (the "Original Report") to report that the Company completed its merger with Liberty Bancshares, Inc. ("Liberty"), pursuant to the Agreement and Plan of Merger, dated as of May 26, 2022, by and among the Company, MBCN Merger Subsidiary, LLC, a wholly owned subsidiary of the Company ("Merger Sub") and Liberty (the "Merger Agreement"). Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the "Effective Time") Liberty merged with and into Merger Sub (the "Merger"), with Merger Sub as the surviving entity in the Merger.

This Current Report on Form 8-K/A (the "Amendment") amends the Original Report to include the financial statements of Liberty and the pro forma financial information required by Item 9.01 of Form 8-K. Except as expressly set forth herein, this Amendment does not amend, modify, or update the disclosures contained in the Original Report.

---

| | |
|:---|:---|
| **Item 9.01** | **Financial Statements and Exhibits.**  |

---

(a) Financial Statements of Businesses Acquired.

The audited consolidated balance sheets of Liberty as of December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive income, shareholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes, are hereby incorporated by reference to Exhibit 99.1 hereto.

The unaudited consolidated balance sheets of Liberty as of June 30, 2022 and December 31, 2021, and the related consolidated statements of income and comprehensive income and shareholders' equity for the three-month and six-month periods ended June 30, 2022 and 2021, and the related consolidated statements of cash flows for the six-month periods ended June 30, 2022 and 2021 are hereby incorporated by reference to Exhibit 99.2 hereto.

(b) Pro Forma Financial Information.

The unaudited pro forma combined consolidated condensed balance sheet as of September 30, 2022, and the unaudited pro forma combined consolidated condensed statements of income for the nine months ended September 30, 2022, and for the year ended December 31, 2021, as well as the accompanying notes thereto, are filed as Exhibit 99.3 and are incorporated herein by reference.

------

(d) Exhibits.

---

| | |
|:---|:---|
| Exhibit |  |
| Number | Description |
| 23.1 | [Consent of FORVIS, LLP](d639588dex231.htm) |
| 99.1 | [Audited consolidated balance sheets of Liberty and subsidiaries as of December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive income, shareholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes (incorporated by reference to the Company's Form S-4 Registration Statement, as amended, filed with the SEC on September 20, 2022 (Registration No. 333-266694))](http://www.sec.gov/Archives/edgar/data/836147/000119312522247719/d365548ds4a.htm) |
| 99.2 | [Unaudited consolidated balance sheets of Liberty as of June 30, 2022 and December 31, 2021, and the related consolidated statements of income and comprehensive income and shareholders' equity for the three-month and six-month periods ended June 30, 2022 and 2021, and the related consolidated statements of cash flows for the six-month periods ended June 30, 2022 and 2021 (incorporated by reference to the Company's Form S-4 Registration Statement filed with the SEC on September 20, 2022 (Registration No. 333-266694))](http://www.sec.gov/Archives/edgar/data/836147/000119312522247719/d365548ds4a.htm) |
| 99.3 | [unaudited pro forma combined consolidated condensed balance sheet as of September 30, 2022, and unaudited pro forma combined consolidated condensed statements of income for the nine months ended September 30, 2022, and for the year ended December 31, 2021](d639588dex993.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

------

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | |
|:---|:---|
|  | MIDDLEFIELD BANC CORP. |
| Date: January 26, 2023 | /s/ James R. Heslop, II |
|  | CEO |

---

## Exhibit 23.1

**Exhibit 23.1**![LOGO](g639588snap1.jpg)

**Consent of Independent Registered Public Accounting Firm** 

We consent to the inclusion in Amendment No. 1 of the Registration Statement of Middlefield Banc Corp. on Form S-4 of our report dated February 25, 2022, on Liberty Bancshares, Inc.'s consolidated financial statements as of December 31, 2021 and 2020 and for the years then ended and to the reference to us under the heading "Experts" in the joint proxy statement/prospectus, which is part of this Registration Statement.

/s/ FORVIS, LLP

FORVIS, LLP

(Formerly BKD, LLP)

Cincinnati, Ohio

January 26, 2023

![LOGO](g639588snap3.jpg)

## Exhibit 99.3

**Exhibit 99.3** 

**SELECTED UNAUDITED PRO FORMA** 

**CONDENSED COMBINED CONSOLIDATED FINANCIAL DATA** 

The following unaudited pro forma condensed combined consolidated balance sheet as of September 30, 2022 and the unaudited pro forma condensed combined consolidated statements of income for the nine months ended September 30, 2022 and for the year ended December 31, 2021 are based on the historical financial statements of Middlefield Banc Corp ("MBCN") and Liberty Bancshares, Inc. ("Liberty") after giving effect to the merger. The merger will be accounted for using the acquisition method of accounting in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 805, "Business Combinations" ("ASC 805").

The unaudited pro forma condensed combined consolidated statements of income for the nine months ended September 30, 2022 and for the year ended December 31, 2021 give effect to the merger as of the beginning of all periods presented. The unaudited pro forma condensed combined consolidated balance sheet as of September 30, 2022 assumed that the merger took place on September 30, 2022.

The unaudited condensed combined consolidated balance sheet and statement of income as of and for the nine months ended September 30, 2022 were derived from MBCN's unaudited condensed financial statements and Liberty's unaudited condensed financial statements and as of and for the nine months ended September 30, 2022. The unaudited condensed statement of income for the year ended December 31, 2021 was derived from MBCN's and Liberty's audited statements of income for the year ended December 31, 2021.

The pro forma condensed combined consolidated financial statements reflect management's best estimate of the fair value of the tangible and intangible assets acquired and liabilities assumed. As final valuations are performed, increases or decreases in the fair value of assets acquired and liabilities assumed will result in adjustments, which may be material, to the balance sheet and/or statement of income.

As required, the unaudited pro forma condensed combined consolidated financial data includes adjustments which give effect to the events that are directly attributable to the merger, expected to have a continuing impact and are factually supportable. We will incur reorganization and restructuring expenses as a result of combining our companies. We also anticipate that the merger will provide the combined company with financial benefits that include reduced operating expenses (as compared to the sum of expenses from each company while operating separately) and the opportunity to earn more revenue. The pro forma information does not take into account these expected expenses or anticipated financial benefits and does not attempt to predict or suggest future results.

The unaudited pro forma condensed combined consolidated financial statements are provided for informational purposes only and are subject to a number of uncertainties and assumptions and do not purport to represent what the companies' actual performance or financial position would have been had the merger occurred on the dates indicated and does not purport to indicate the financial position or results of operations as of any date or for any future period.

Please refer to the following information in conjunction with the accompanying notes to these pro forma financial statements

------

**Middlefield Banc Corp.**

**Acquisition of Liberty Bancshares, Inc.**

**Pro Forma Balance Sheet as of September 30, 2022**

**(In thousands)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Acquirer<br>(Middlefield<br>Banc Corp.)** | **Target (Liberty<br>Bancshares, Inc.)** | **Pro Forma<br>Adjustments** | | **Pro Forma<br>Combined** |
|  **<u>ASSETS</u>** | **<u>ASSETS</u>** | **<u>ASSETS</u>** | **<u>ASSETS</u>** | **<u>ASSETS</u>** | **<u>ASSETS</u>** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and due from banks | $119777 | $6296 | $— | **(A)** | $126073 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fed funds sold | 8800 | 36289 |  |  | 45089 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Cash and cash equivalents** | 128577 | 42585 |  |  | 171162 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investment securities available for sale, at fair value | 163036 | 58835 | 270 | **(B)** | 222141 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans held for sale |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans | 995195 | 297029 | (2788) | **(C)** | 1289436 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less allowance for loan and lease losses | 14532 | 4519 | (4519) | **(D)** | 14532 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net loans** | 980663 | 292510 | 1731 |  | 1274904 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Premises and equipment, net | 16215 | 4632 | 1524 | **(E)** | 22370 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Goodwill | 15071 | 1456 | 11265 | **(F)** | 27792 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Core deposit intangibles | 1171 |  | 6669 | **(G)** | 7840 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bank owned life insurance | 17382 | 13933 |  |  | 31315 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other real estate owned | 6792 |  |  |  | 6792 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mortgage servicing rights | 444 | 876 | 804 | **(H)** | 2124 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued interest and other assets | 21660 | 11784 | (1961) | **(I)** | 31483 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total assets** | $1351011 | $426609 | $20303 |  | $1797923 |
|  **<u>LIABILITIES</u>** | **<u>LIABILITIES</u>** | **<u>LIABILITIES</u>** | **<u>LIABILITIES</u>** | **<u>LIABILITIES</u>** | **<u>LIABILITIES</u>** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Noninterest-bearing demand | 383675 | 145856 |  |  | 529531 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-bearing demand | 160112 | 24617 |  |  | 184729 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Money market | 162052 | 50126 |  |  | 212178 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Savings | 247466 | 75538 |  |  | 323004 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Time | 177182 | 73701 | 228 | **(J)** | 251110 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total deposits** | 1130487 | 369838 | 228 |  | 1500552 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short-term borrowings | 80000 |  |  |  | 80000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other borrowings | 12107 |  |  |  | 12107 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued interest and other liabilities | 5562 | 3605 | (23) | **(K)** | 9144 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities** | 1228156 | 373443 | 205 |  | 1601803 |
|  **<u>EQUITY</u>** | **<u>EQUITY</u>** | **<u>EQUITY</u>** | **<u>EQUITY</u>** | **<u>EQUITY</u>** | **<u>EQUITY</u>** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common stock, Capital | 87640 | 19669 | 53596 | **(L)** | 160905 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retained earnings | 93166 | 44187 | (44187) | **(M)** | 93166 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Treasury stock | (32871) | (4477) | 4477 | **(N)** | (32871) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive income | (25080) | (6213) | 6213 | **(O)** | (25080) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total equity** | 122855 | 53166 | 20098 |  | 196120 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities and equity** | $1351011 | $426609 | $20303 |  | $1797923 |

---

See accompanying notes to unaudited pro forma condensed combined financial statements.

------

**Middlefield Banc Corp.** 

**Acquisition of Liberty Bancshares, Inc.** 

**Pro Forma Income Statement as of September 30, 2022** 

**(In thousands)** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Acquirer<br>(Middlefield<br>Banc Corp.)** | **Target (Liberty<br>Bancshares,<br>Inc.)** | **Pro Forma<br>Adjustments** | | **Pro Forma<br>Combined** |
|  **<u>INTEREST INCOME</u>** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest and fees on originated loans | $34145 | $10733 |  |  | 44878 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accretion (net) of loan fair value discount |  |  | 216 | **(P)** | 216 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest bearing deposits in other institutions | 232 |  |  |  | 232 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Federal funds sold | 100 |  |  |  | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investment securities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taxable interest | 1334 | 858 |  |  | 2192 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tax-exempt interest | 2721 | 148 |  |  | 2869 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dividends on stock and other income | 116 | 342 |  |  | 458 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total interest income** | 38648 | 12082 | 216 |  | 50946 |
|  **<u>INTEREST EXPENSE</u>** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deposits | 2247 | 604 | 40 | **(Q)** | 2891 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short term borrowings | 44 |  |  |  | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other borrowings | 262 |  |  |  | 262 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total interest expense** | 2553 | 604 | 40 |  | 3197 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net interest income** | 36095 | 11478 | 176 |  | 47749 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for loan and lease losses |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net interest income after provision for loan and lease losses** | 36095 | 11478 | 176 |  | 47749 |
|  **<u>NONINTEREST INCOME</u>** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Service charges on deposit accounts | 2874 | 627 |  |  | 3501 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investment securities gains, net | (96) |  |  |  | (96) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Earnings on bank-owned life insurance | 322 |  |  |  | 322 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gains on sale of loans | 28 | 301 |  |  | 329 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income | 1204 | 447 |  |  | 1651 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total noninterest income** | 4332 | 1375 |  |  | 5707 |
|  **<u>NONINTEREST EXPENSE</u>** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Salaries and employee benefits | 12662 | 4992 |  |  | 17654 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Occupancy expense | 1546 | 527 | (7) | **(R)** | 2066 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equipment expense | 822 | 518 |  |  | 1340 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Data processing costs | 2650 | 522 |  |  | 3172 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; State franchise tax | 878 | 356 |  |  | 1234 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Federal deposit insurance expense | 224 | 90 |  |  | 314 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Professional fees | 1118 |  |  |  | 1118 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss (gain) on sale of other real estate owned | 215 |  |  |  | 215 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Advertising expense | 725 |  |  |  | 725 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Software amortization expense | 115 |  |  |  | 115 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Core deposit intangible amortization | 232 |  | 564 | **(S)** | 796 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other expense | 4500 | 2190 | (1634) | **(T)** | 5056 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total noninterest expense** | 25687 | 9195 | (1078) |  | 33804 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income before taxes | 14740 | 3658 | 1254 |  | 19652 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income taxes | 2569 | 680 | 263 | **(U)** | 3512 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **NET INCOME** | $12171 | $2978 | $991 |  | $16140 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Basic earnings per common share** | $2.08 | $3.29 |  |  | $1.92 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Diluted earnings per common share** | 2.08 | 3.27 |  |  | 1.92 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Average common shares outstanding | 5841 | 906 | 2562 | **(V)** | 8402 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Average diltuted shares outstanding | 5854 | 912 | 2562 | **(V)** | 8415 |

---

See accompanying notes to unaudited pro forma condensed combined financial statements.

------

**Middlefield Banc Corp.** 

**Acquisition of Liberty Bancshares, Inc.** 

**Pro Forma Income Statement as of December 31, 2021** 

**(In thousands)** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Acquirer<br>(Middlefield<br>Banc Corp.)** | **Target (Liberty<br>Bancshares,<br>Inc.)** | **Pro Forma<br>Adjustments** | | **Pro Forma<br>Combined** |
|  **<u>INTEREST INCOME</u>** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest and fees on originated loans | $47896 | $16208 |  |  | 64104 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accretion (net) of loan fair value discount |  |  | 293 | **(W)** | 293 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest bearing deposits in other institutions | 90 |  |  |  | 90 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Federal funds sold | 3 | 65 |  |  | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investment securities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taxable interest | 1679 | 594 |  |  | 2273 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tax-exempt interest | 2565 | 246 |  |  | 2811 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dividends on stock and other income | 102 | 43 |  |  | 145 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total interest income** | 52335 | 17157 | 293 |  | 69784 |
|  **<u>INTEREST EXPENSE</u>** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deposits | 3913 | 800 | 145 | **(X)** | 4859 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short term borrowings |  | 115 |  |  | 115 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other borrowings | 152 |  |  |  | 152 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total interest expense** | 4065 | 915 | 145 |  | 5125 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net interest income** | 48270 | 16242 | 147 |  | 64659 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for loan and lease losses | 700 | 480 |  |  | 1180 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net interest income after provision for loan and lease losses** | 47570 | 15762 | 147 |  | 63479 |
|  **<u>NONINTEREST INCOME</u>** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Service charges on deposit accounts | 3425 | 800 |  |  | 4225 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investment securities gains, net | 209 | 3 |  |  | 212 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Earnings on bank-owned life insurance | 546 |  |  |  | 546 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gains on sale of loans | 1240 | 966 |  |  | 2206 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Revenue from investment services | 727 |  |  |  | 727 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income | 1059 | 804 |  |  | 1863 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total noninterest income** | 7206 | 2573 |  |  | 9779 |
|  **<u>NONINTEREST EXPENSE</u>** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Salaries and employee benefits | 17151 | 7163 |  |  | 24314 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Occupancy expense | 2178 | 714 | (10) | **(Y)** | 2882 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equipment expense | 1361 | 635 |  |  | 1996 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Data processing costs | 2880 | 693 |  |  | 3573 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; State franchise tax | 1144 | 450 |  |  | 1594 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Federal deposit insurance expense | 494 | 115 |  |  | 609 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Professional fees | 1313 |  |  |  | 1313 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss (gain) on sale of other real estate owned | 11 |  |  |  | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Advertising expense | 885 |  |  |  | 885 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Software amortization expense | 361 |  |  |  | 361 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Core deposit intangible amortization | 321 |  | 762 | **(Z)** | 1083 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other expense | 3979 | 2147 | 7000 | **(AA)** | 13126 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total noninterest expense** | 32078 | 11916 | 7752 |  | 51746 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income before taxes | 22698 | 6418 | (7605) |  | 21511 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income taxes | 4065 | 1206 | (1462) | **(U)** | 3809 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **NET INCOME** | $18633 | $5212 | $(6143) |  | $17702 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Basic earnings per common share** | $3.01 | $5.81 |  |  | $2.02 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Diluted earnings per common share** | 3.00 | 5.79 |  |  | 2.02 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Average common shares outstanding | 6187 | 897 | 2562 | **(V)** | 8748 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Average diltuted shares outstanding | 6211 | 899 | 2562 | **(V)** | 8773 |

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See accompanying notes to unaudited pro forma condensed combined financial statements.

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**Middlefield Banc Corp.** 

**Acquisition of Liberty Bancshares, Inc.** 

**Comparative Per-Share Data of Middlefield and Liberty (Unaudited)** 

**As of and for the Nine Months Ended September 30, 2022** 

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Middlefield Banc<br>Corp. | Liberty<br>Bancshares, Inc. | Pro Forma<br>Combined | | Pro Forma<br>Equivalent Liberty<br>Share | |
|  Basic Earnings Per Common Share | $2.08 | $3.29 | $1.92 | **(AB)** | 5.29 | **(AD)** |
|  Diluted Earnings Per Common share | 2.08 | 3.27 | 1.92 | **(AB)** | 5.28 | **(AD)** |
|  Dividends Declared per Common Share | 0.51 | 0.75 | 0.51 | **(AC)** | 1.40 | **(AD)** |
|  Book Value Per Common Share (at period end) | 21.30 | 58.61 | 23.55 | **(AB)** | 64.80 | **(AD)** |

---

**As of and for the Year Ended December 31, 2021** 

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Middlefield Banc<br>Corp. | Liberty<br>Bancshares, Inc. | Pro Forma<br>Combined | | Pro Forma<br>Equivalent Liberty<br>Share | |
|  Basic Earnings Per Common Share | $3.01 | $5.81 | $2.02 | **(AB)** | 5.57 | **(AD)** |
|  Diluted Earnings Per Common share | 3.00 | 5.79 | 2.02 | **(AB)** | 5.55 | **(AD)** |
|  Dividends Declared per Common Share | 0.69 | 1.50 | 0.69 | **(AC)** | 1.90 | **(AD)** |
|  Book Value Per Common Share (at period end) | 24.68 | 63.25 | 26.32 | **(AB)** | 72.42 | **(AD)** |

---

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**Middlefield Banc Corp.** 

**Acquisition of Liberty Bancshares, Inc.** 

**Pro Forma Adjustments** 

**(In thousands)** 

The following pro forma adjustments have been reflected in the unaudited pro forma combined consolidated financial statements presented for Middlefield. All adjustments are based on current assumptions and valuations, which are subject to change. Unless otherwise noted, all adjustments are based on assumptions and valuations as of 9/30/2022 for the respective acquisition and are subject to change.

**(A)** Transaction expenses incurred are expected to be approximately $5,667 (net of tax effect). However, these
expenses would primarily be incurred after the Balance Sheet date and as such, are not included as an adjustment.

**(B)** Reflects fair value adjustment on available for sale securities.

**(C)** Reflects projected 0.88% discount on loans acquired from target. The fair value adjustment will be
accreted over the loans' remaining life on a level yield basis.

**(D)** Reflects elimination of allowance for loan and lease loss as a part of purchase accounting adjustments.

**(E)** Reflects the pro forma purchase account adjustment of Liberty's appraised value of real property. Included
in this adjustment is $1,822 increased value of Land and a $298 decrease in the carrying value of depreciable property.

**(F)** Reflects projected goodwill that will be recognized as a part of purchase accounting adjustments.

**(G)** Reflects the pro forma impact of the core deposit intangible asset of Liberty. The fair value adjustment
will be amortized over ten years on an accelerated basis.

**(H)** Reflects the pro forma purchase accounting adjustment of Liberty's Mortgage Servicing Rights to
fair value.

**(I)** Reflects projected deferred tax liability recorded as a result of purchase accounting adjustments
(assuming 21% tax rate).

**(J)** Reflects the pro forma purchase accounting adjustment of Liberty's time deposits to fair value. The
fair value adjustment will be accreted over the life of the time deposits on a level yield basis.

**(K)** Reflects the pro forma purchase accounting for historical deferred loan fees and interest, as well as
liabilities settled as of the Merger Date.

**(L)** Reflects issuance of acquirer's stock as consideration of $73,265 and elimination of surplus
associated with target's common stock and associated surplus.

**(M)** Reflects elimination of target's retained earnings and impact to retained earnings of payment of
transaction fees of $5,667, net of tax effect.

**(N)** Reflets elimination of target's treasury stock.

**(O)** Reflects elimination of target's AOCI.

**(P)** Reflects nine months of accretion of loan discount into loan interest income.

**(Q)** Reflects nine months of accretion of time deposit premium against deposit interest expense.

**(R)** Reflects nine months of reduced depreciation as a result of the fair value adjustment of the
Company's real property.

**(S)** Reflects nine months of amortization of core deposit intangible recorded in conjunction with acquisition
of target.

**(T)** Reflects removal of year to date incurred merger expenses reflected in the pro-forma income statement as of 12/31/2021.

**(U)** Reflects incremental tax impact of respective adjustments.

**(V)** Reflects shares issued to target as part of merger consideration.

**(W)** Reflects one year of accretion of loan discount of $293 into loan interest income.

**(X)** Reflects one year of accretion of time deposit premium against deposit interest expense.

**(Y)** Reflects one year of reduced depreciation as a result of the fair value adjustment of the Company's
real property.

**(Z)** Reflects one year of amortization of core deposit intangible recorded in conjunction with acquisition of
target.

**(AA)** Reflects one-time restructuring expense.

**(AB)** Pro forma combined amounts are calculated by adding together the historical amounts reported by Middlefield and
Liberty, as adjusted for the estimated purchase accounting adjustments to be recorded in connection with the merger and an estimated 2,561,513 shares of Middlefield common stock to be issued in connection with the merger based on the terms of the
Merger Agreement.

**(AC)** Pro forma combined dividends are based on Middlefield's historical amounts.

**(AD)** The pro forma per equivalent Liberty share is computed by multiplying the pro forma combined amounts by
the exchange ratio of 2.752.