Middlefield Banc Corp. Reports 2020 Full Year Financial Results

MIDDLEFIELD, Ohio, Jan. 26, 2021 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the three and twelve months ended December 31, 2020.

2020 Financial Highlights (on a year-over-year basis unless noted):

• Net income decreased 34.3% to $8.3 million, as a result of a $9.0 million annual increase in the provision for loan losses
• Net interest income improved 4.8% to $43.4 million
• Total noninterest income was up 23.7% to $6.0 million
• Noninterest expense declined 0.8%
• Pre-tax, pre-provision for loan losses⁽¹⁾ income increased 21.0% to $19.6 million
• Allowance for loan losses increased 98.9% to $13.5 million
• Allowance for loan losses to nonperforming loans was 171.3%, compared to 76.2%
• Book value per share was up 5.1% to a record $22.54 per share
• Tangible book value⁽¹⁾ per share was up 6.0% to a record $19.91 per share
• Total loans increased 12.2% to $1.10 billion
• Middlefield remains well capitalized with an equity to assets ratio of 10.3% at December 31, 2020
  

Thomas G. Caldwell, President and Chief Executive Officer, stated: “Our strong asset quality, our focus on supporting our local communities, and the commitment and dedication of our team members helped us successfully navigate the unprecedented effects of the COVID-19 pandemic. Despite significant operating and economic challenges, pre-tax, pre-provision for loan losses⁽¹⁾ income increased 21.0% year-over-year, reflecting strong core earnings growth, higher noninterest income, and proactive expense management. In addition, we ended the year with record assets and a record book value per share, representing the seventh consecutive year of annual growth in book value.”

“Unfortunately, the COVID-19 pandemic continues to have a severe impact on the economy. As a result, we are focused on supporting our communities, proactively controlling asset quality, and strengthening our balance sheet. I believe this conservative approach will allow us to continue to successfully navigate near-term economic uncertainty, while providing the Company with flexibility to pursue long-term growth opportunities.”  

“On behalf of Middlefield’s leadership team and Board of Directors, I would like to thank our customers, employees, communities, and shareholders for their support throughout this challenging period,” concluded Mr. Caldwell.

Income Statement
For the 2020 full year, net interest income increased 4.8% to $43.4 million, compared to $41.4 million for the same period last year. The net interest margin for the 2020 twelve-month period was 3.54%, compared to 3.68% for the same period last year. Net interest income for the 2020 fourth quarter was $11.3 million, compared to $10.3 million for the 2019 fourth quarter. The 9.3% increase in net interest income for the 2020 fourth quarter was largely a result of a 45.8% decrease in total interest expense. The net interest margin for the 2020 fourth quarter was 3.49%, compared to 3.65% for the same period of 2019.

For the 2020 full year, noninterest income increased 23.7% to $6.0 million, compared to $4.8 million for the same period last year. Noninterest income for the 2020 fourth quarter was $1.6 million, compared to $1.3 million for the 2019 fourth quarter.

For the 2020 full year, noninterest expense decreased 0.8% to $29.8 million, compared to $30.0 million last year. For the 2020 fourth quarter, noninterest expense was $7.8 million, compared to $7.4 million for the same period last year.

Net income for the year ended December 31, 2020, was $8.3 million, or $1.30 per diluted share, compared to $12.7 million, or $1.95 per diluted share for the same period last year. The decline in net income for the year ended December 31, 2020, was primarily due to a $9.0 million increase in the provision for loan losses as a result of the COVID-19 crisis and the resolution of an isolated commercial loan that occurred in the 2020 third quarter. Net income for the 2020 fourth quarter, was $2.5 million, or $0.39 per diluted share, compared to $3.1 million, or $0.48 per diluted share for the same period last year. The 2020 fourth quarter provision for loan losses increased $1.6 million from the prior year period.

Core earnings measured by pre-tax, pre-provision for loan losses⁽¹⁾ income, increased 21.0% to $19.6 million for the year ended December 31, 2020, compared to $16.2 million for the year ended December 31, 2019. Pre-tax, pre-provision for loan losses⁽¹⁾ income for the 2020 fourth quarter increased 19.4% to $5.1 million, compared to $4.2 million for the same period last year.

Balance Sheet
Total assets at December 31, 2020, increased 17.7% to $1.39 billion, from $1.18 billion at December 31, 2019. Net loans at December 31, 2020, were $1.09 billion, compared to $977.5 million at December 31, 2019. The 11.6% year-over-year increase in total net loans was primarily a result of PPP loans originated during the second and third quarters, as well as organic loan growth that occurred throughout the year.

Total deposits at December 31, 2020, were $1.23 billion, compared to $1.02 billion at December 31, 2019. The 20.0% year-over-year increase in deposits was primarily a result of higher interest-bearing deposits. The investment portfolio, which is entirely classified as available for sale, was $114.4 million at December 31, 2020, compared with $105.7 million at December 31, 2019.

Donald L. Stacy, Chief Financial Officer stated, “Throughout 2020, we focused on building our allowance for loan losses, which increased 98.9% over the prior year period to $13.5 million at December 31, 2020. In addition, our allowance for loan losses to nonperforming loans was 171.28% at December 31, 2020, compared to our allowance for loan losses to nonperforming loans of 76.22% at December 31, 2019. This is the highest our allowance for loan losses to nonperforming loans reserve has been in over 13 years. Over the near-term, we will continue to fund our allowance and increase our reserve which we believe is necessary to reserve for potential incurred losses in the portfolio associated with the COVID-19 crisis.”  

“Overall asset quality remains strong. Loans in deferral status continue to improve and declined 88.6% from $214.8 million at June 30, 2020, to $24.5 million at December 31, 2020. No restaurant customers were seeking additional deferrals at year end, while most deferred loans were within the hospitality segment. Overall, the quality of our loan portfolio remains solid and does not appear to be significantly impacted by the current difficult economic environment. We continue to closely watch our loan portfolio, and we are doing everything we can to support all our customers and communities impacted by the COVID-19 crisis.”

Stockholders’ Equity and Dividends
At December 31, 2020, stockholders’ equity increased 4.4% to $143.8 million, compared to $137.8 million at December 31, 2019. On a per share basis, shareholders’ equity at December 31, 2020, was a record $22.54 compared to $21.45 at the same period last year.

At December 31, 2020, tangible stockholders’ equity⁽¹⁾ increased 5.3% to $127.0 million, compared to $120.6 million at December 31, 2019. On a per share basis, tangible stockholders’ equity⁽¹⁾ was $19.91 at December 31, 2020, compared to $18.78 at December 31, 2019.

For the 2020 full year, the Company declared cash dividends of $0.60 per share, compared to $0.57 per share for the same period last year.

At December 31, 2020, the Company had an equity to assets leverage ratio of 10.33%, compared to 11.65% at December 31, 2019.

Asset Quality
The provision for loan losses for the 2020 fourth quarter was $2.1 million versus $460,000 for the same period last year. The provision for loan losses for the year ended December 31, 2020 was $9.8 million compared to $890,000 for the year ended December 31, 2019.   Most of the increased provision for the year ended December 31, 2020, was the result of increases to the economic conditions qualitative factors and higher charge-offs that occurred during the 2020 third quarter.

Net charge-offs for the 2020 fourth quarter were $0, compared to $693,000, or 0.28% of average loans, for the same period last year. For the 2020 twelve-month period, net charge-offs were $3.1 million, or 0.29% of average loans, compared to $1.6 million, or 0.16% of average loans for the 2019 twelve-month period.

Nonperforming assets at December 31, 2020, were $15.2 million, compared to $9.0 million at December 31, 2019. The allowance for loan losses at December 31, 2020, stood at $13.5 million, or 1.22% of total loans, compared to $6.8 million, or 0.69% of total loans at December 31, 2019.

COVID-19 Update
The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020, and as a qualified SBA lender, we were automatically authorized to originate PPP loans. As of December 31, 2020, we approved 1,414 applications for up to $143.8 million of loans under the PPP. At December 31, 2020, we have processed $28.9 million of PPP forgiveness.

As of December 31, 2020, we modified 11 loans aggregating $24.5 million consisting of the deferral of principal payments and the extension of the maturity date, compared to 362 loans aggregating $214.8 million at June 30, 2020.

About Middlefield Banc Corp.   
Middlefield Banc Corp., headquartered in Middlefield, Ohio, is the bank holding company of The Middlefield Banking Company with total assets of $1.39 billion at December 31, 2020. The bank operates 16 full-service banking centers and an LPL Financial® brokerage office serving Beachwood, Chardon, Cortland, Dublin, Garrettsville, Mantua, Middlefield, Newbury, Orwell, Plain City, Powell, Solon, Sunbury, Twinsburg, and Westerville. The Bank also operates a Loan Production Office in Mentor, Ohio.  

Additional information is available at www.middlefieldbank.bank

_{⁽¹⁾ This press release includes disclosure of Middlefield Banc Corp.’s tangible book value per share, return on average tangible equity, and pre-tax, pre-provision for loan losses income, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Middlefield Banc Corp. believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Middlefield Banc Corp.’s marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures are included in the tables following Consolidated Financial Highlights below.}

_{This press release of Middlefield Banc Corp. and the reports Middlefield Banc Corp. files with the Securities and Exchange Commission often contain “forward-looking statements” relating to present or future trends or factors affecting the banking industry and, specifically, the financial operations, markets and products of Middlefield Banc Corp. These forward-looking statements involve certain risks and uncertainties. There are a number of important factors that could cause Middlefield Banc Corp.’s future results to differ materially from historical performance or projected performance. These factors include, but are not limited to: (1) a significant increase in competitive pressures among financial institutions; (2) changes in the interest rate environment that may reduce interest margins; (3) changes in prepayment speeds, charge-offs and loan loss provisions; (4) less favorable than expected general economic conditions; (5) legislative or regulatory changes that may adversely affect businesses in which Middlefield Banc Corp. is engaged; (6) technological issues which may adversely affect Middlefield Banc Corp.’s financial operations or customers; (7) the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions; (8) changes in the securities markets; or (9) risk factors mentioned in the reports and registration statements Middlefield Banc Corp. files with the Securities and Exchange Commission. Middlefield Banc Corp. undertakes no obligation to release revisions to these forward-looking statements or to reflect events or circumstances after the date of this press release.}   

Company Contact:	Investor and Media Contact:
Thomas G. Caldwell President/Chief Executive Officer Middlefield Banc Corp. (440) 632-1666 Ext. 3200 tcaldwell@middlefieldbank.com	Andrew M. Berger Managing Director SM Berger & Company, Inc. (216) 464-6400 andrew@smberger.com

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, unaudited)
		December 31,				September 30,				June 30,				March 31,				December 31,
Balance Sheets (period end)		2020				2020				2020				2020				2019
ASSETS
Cash and due from banks		$	92,874			$	46,097			$	55,766			$	53,533			$	35,113
Federal funds sold			19,543				6,884				2,520				1,800				-
Cash and cash equivalents			112,417				52,981				58,286				55,333				35,113
Equity securities, at fair value			609				553				581				550				710
Investment securities available for sale, at fair value			114,360				112,968				112,529				102,959				105,733
Loans held for sale			878				10,457				4,151				513				1,220
Loans:
Commercial real estate:
Owner occupied			103,121				107,342				110,134				113,272				102,386
Non-owner occupied			309,424				310,512				300,577				292,775				302,180
Multifamily			39,562				39,622				37,604				52,276				62,028
Residential real estate			233,995				222,237				227,427				233,900				234,798
Commercial and industrial			232,044				258,313				240,096				106,797				89,527
Home equity lines of credit			112,543				115,223				117,196				114,933				112,248
Construction and other			63,573				60,613				66,015				71,186				66,680
Consumer installment			9,823				10,534				11,210				12,861				14,411
Total loans			1,104,085				1,124,396				1,110,259				998,000				984,258
Less allowance for loan and lease losses			13,459				11,359				10,210				9,244				6,768
Net loans			1,090,626				1,113,037				1,100,049				988,756				977,490
Premises and equipment, net			18,333				18,633				18,962				17,653				17,874
Goodwill			15,071				15,071				15,071				15,071				15,071
Core deposit intangibles			1,724				1,807				1,890				1,973				2,056
Bank-owned life insurance			16,938				16,832				16,723				16,618				16,511
Other real estate owned			7,387				7,391				687				456				155
Accrued interest receivable and other assets			13,636				15,079				14,391				14,057				10,542
TOTAL ASSETS		$	1,391,979			$	1,364,809			$	1,343,320			$	1,213,939			$	1,182,475
		December 31,				September 30,				June 30,				March 31,				December 31,
		2020				2020				2020				2020				2019
LIABILITIES
Deposits:
Noninterest-bearing demand		$	291,347			$	268,838			$	270,738			$	206,372			$	191,370
Interest-bearing demand			195,722				179,080				136,722				125,184				107,844
Money market			198,493				184,936				168,842				156,556				160,826
Savings			243,888				231,696				218,545				175,468				192,003
Time			295,750				329,413				363,420				340,130				368,800
Total deposits			1,225,200				1,193,963				1,158,267				1,003,710				1,020,843
Short-term borrowings			-				-				20,417				60,000				5,075
Other borrowings			17,038				17,100				17,162				12,662				12,750
Accrued interest payable and other liabilities			5,931				11,690				6,779				4,880				6,032
TOTAL LIABILITIES			1,248,169				1,222,753				1,202,625				1,081,252				1,044,700
STOCKHOLDERS' EQUITY
Common stock, no par value; 10,000,000 shares authorized, 7,308,685 shares issued, 6,379,323 shares outstanding as of December 31, 2020			86,886				86,871				86,722				86,722				86,617
Retained earnings			69,578				68,046				67,150				65,140				65,063
Accumulated other comprehensive income (loss)			4,284				4,077				3,761				(2,237	)			1,842
Treasury stock, at cost; 929,362 shares as of December 31, 2020			(16,938	)			(16,938	)			(16,938	)			(16,938	)			(15,747	)
TOTAL STOCKHOLDERS' EQUITY			143,810				142,056				140,695				132,687				137,775
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,391,979			$	1,364,809			$	1,343,320			$	1,213,939			$	1,182,475
MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, unaudited)
		For the Three Months Ended																				For the Twelve Months Ended
		December 31,				September 30,					June 30,			March 31,				December 31,				December 31,				December 31,
Statements of Income		2020				2020				2020				2020				2019				2020				2019
INTEREST AND DIVIDEND INCOME
Interest and fees on loans		$	12,041			$	12,603			$	12,281			$	12,078			$	12,392			$	49,003			$	50,390
Interest-earning deposits in other institutions			9				8				7				94				124				118				673
Federal funds sold			1				-				-				21				22				22				78
Investment securities:
Taxable interest			297				249				206				157				197				909				796
Tax-exempt interest			591				618				634				629				661				2,472				2,392
Dividends on stock			28				29				27				30				40				114				196
Total interest and dividend income			12,967				13,507				13,155				13,009				13,436				52,638				54,525
INTEREST EXPENSE
Deposits			1,655				2,106				2,336				2,865				3,014				8,962				12,409
Short-term borrowings			(2	)			14				32				35				34				79				368
Other borrowings			43				28				62				76				80				209				363
Total interest expense			1,696				2,148				2,430				2,976				3,128				9,250				13,140
NET INTEREST INCOME			11,271				11,359				10,725				10,033				10,308				43,388				41,385
Provision for loan losses			2,100				4,000				1,000				2,740				460				9,840				890
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES			9,171				7,359				9,725				7,293				9,848				33,548				40,495
NONINTEREST INCOME
Service charges on deposit accounts			729				691				566				553				577				2,539				2,186
Investment securities gains on sale, net			-				-				-				-				-				-				194
Gain (loss) on equity securities			56				(28	)			31				(160	)			82				(101	)			94
Earnings on bank-owned life insurance			106				109				105				107				108				427				431
Gains on sale of loans			332				660				381				114				148				1,487				433
Other income			387				379				412				460				390				1,638				1,503
Total noninterest income			1,610				1,811				1,495				1,074				1,305				5,990				4,841
NONINTEREST EXPENSE
Salaries and employee benefits			4,458				3,657				4,136				3,584				4,039				15,835				16,783
Occupancy expense			628				497				483				550				580				2,158				2,164
Equipment expense			365				363				307				273				270				1,308				1,040
Data processing costs			617				683				684				666				614				2,650				2,208
Ohio state franchise tax			251				282				281				268				262				1,082				1,044
Federal deposit insurance expense			103				123				74				123				-				423				230
Professional fees			352				289				369				349				448				1,359				1,683
Loss (gain) on other real estate owned			44				(184	)			(33	)			1				11				(172	)			(125	)
Advertising expense			55				217				217				209				128				698				733
Software amortization expense			66				70				74				141				159				351				638
Core deposit intangible amortization			83				83				83				83				85				332				341
Other expense			803				942				1,014				1,005				782				3,764				3,294
Total noninterest expense			7,825				7,022				7,689				7,252				7,378				29,788				30,033
Income before income taxes			2,956				2,148				3,531				1,115				3,775				9,750				15,303
Income taxes			467				295				565				74				634				1,401				2,592
NET INCOME		$	2,489			$	1,853			$	2,966			$	1,041			$	3,141			$	8,349			$	12,711
PTPP (1)		$	5,056			$	6,148			$	4,531			$	3,855			$	4,235			$	19,590			$	16,193
(1) The pre-tax pre-provision (PTPP) is the income before income taxes before provision for loan losses considerations, for reconciliation of non-GAAP measures
MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, except per share and share amounts, unaudited)
		For the Three Months Ended																				For the Twelve Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
		2020				2020				2020				2020				2019				2020				2019
Per common share data
Net income per common share - basic		$	0.39			$	0.29			$	0.47			$	0.16			$	0.48			$	1.31			$	1.96
Net income per common share - diluted		$	0.39			$	0.29			$	0.46			$	0.16			$	0.48			$	1.30			$	1.95
Dividends declared per share		$	0.15			$	0.15			$	0.15			$	0.15			$	0.15			$	0.60			$	0.57
Book value per share (period end)		$	22.54			$	22.27			$	22.09			$	20.83			$	21.45			$	22.54			$	21.45
Tangible book value per share (period end) (2) (3)		$	19.91			$	19.63			$	19.43			$	18.16			$	18.78			$	19.91			$	18.78
Dividends declared		$	957			$	957			$	956			$	964			$	964			$	3,834			$	3,685
Dividend yield			2.65	%			3.09	%			2.91	%			3.82	%			2.28	%			2.67	%			2.18	%
Dividend payout ratio			38.45	%			51.65	%			32.23	%			92.60	%			30.69	%			45.92	%			28.99	%
Average shares outstanding - basic			6,378,706				6,376,291				6,369,467				6,417,109				6,423,543				6,385,350				6,470,408
Average shares outstanding - diluted			6,397,681				6,385,765				6,388,118				6,429,443				6,455,387				6,404,524				6,502,806
Period ending shares outstanding			6,379,323				6,378,110				6,369,467				6,369,467				6,423,630				6,379,323				6,423,630
Selected ratios
Return on average assets			0.72	%			0.54	%			0.90	%			0.35	%			1.04	%			0.64	%			1.05	%
Return on average equity			6.76	%			5.11	%			8.57	%			3.01	%			8.87	%			5.87	%			9.35	%
Return on average tangible common equity (2) (4)			7.64	%			5.79	%			9.76	%			3.43	%			10.11	%			6.66	%			10.72	%
Efficiency (1)			59.29	%			51.96	%			61.29	%			63.47	%			61.75	%			58.77	%			63.25	%
Equity to assets at period end			10.33	%			10.41	%			10.47	%			10.93	%			11.65	%			10.33	%			11.65	%
Noninterest expense to average assets			0.57	%			0.52	%			0.58	%			0.61	%			0.61	%			2.27	%			2.49	%
(1) The efficiency ratio is calculated by dividing noninterest expense less amortization of intangibles by the sum of net interest income on a fully taxable equivalent basis plus noninterest income
(2) See reconciliation of non-GAAP measures below
(3) Calculated by dividing tangible common equity by shares outstanding
(4) Calculated by dividing annualized net income for each period by average tangible common equity
MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Unaudited)
		For the Three Months Ended																				For the Twelve Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
Yields		2020				2020				2020				2020				2019				2020				2019
Interest-earning assets:
Loans receivable (2)			4.28	%			4.48	%			4.53	%			4.95	%			4.97	%			4.55	%			5.06	%
Investment securities (2)			3.65	%			3.66	%			3.76	%			3.62	%			3.79	%			3.68	%			3.77	%
Interest-earning deposits with other banks			0.21	%			0.27	%			0.23	%			1.40	%			1.65	%			0.45	%			2.11	%
Total interest-earning assets			4.00	%			4.23	%			4.27	%			4.69	%			4.73	%			4.28	%			4.83	%
Deposits:
Interest-bearing demand deposits			0.21	%			0.32	%			0.35	%			0.42	%			0.41	%			0.31	%			0.36	%
Money market deposits			0.53	%			0.70	%			0.93	%			1.41	%			1.41	%			0.87	%			1.46	%
Savings deposits			0.11	%			0.20	%			0.21	%			0.50	%			0.62	%			0.24	%			0.70	%
Certificates of deposit			1.56	%			1.77	%			2.00	%			2.12	%			2.18	%			1.87	%			2.22	%
Total interest-bearing deposits			0.70	%			0.93	%			1.11	%			1.39	%			1.43	%			1.02	%			1.48	%
Non-Deposit Funding:
Borrowings			0.95	%			0.45	%			0.53	%			1.62	%			2.52	%			0.75	%			2.63	%
Total interest-bearing liabilities			0.71	%			0.91	%			1.07	%			1.40	%			1.46	%			1.01	%			1.52	%
Cost of deposits			0.54	%			0.72	%			0.85	%			1.13	%			1.15	%			0.79	%			1.20	%
Cost of funds			0.55	%			0.71	%			0.83	%			1.14	%			1.17	%			0.79	%			1.23	%
Net interest margin (1)			3.49	%			3.57	%			3.49	%			3.63	%			3.65	%			3.54	%			3.68	%
(1) Net interest margin represents net interest income as a percentage of average interest-earning assets.
(2) Tax-equivalent adjustments to calculate the yield on tax-exempt securities and loans were determined using an effective tax rate of 21%.
		For the Three Months Ended
		December 31,				September 30,					June 30,			March 31,				December 31,
Asset quality data			2020				2020				2020				2020				2019
(Dollar amounts in thousands, unaudited)
Nonperforming loans (1)		$	7,858			$	6,690			$	9,803			$	8,405			$	8,879
Other real estate owned			7,387				7,391				687				456				155
Nonperforming assets		$	15,245			$	14,081			$	10,490			$	8,861			$	9,034
Allowance for loan losses		$	13,459			$	11,359			$	10,210			$	9,244			$	6,768
Allowance for loan losses/total loans			1.22	%			1.01	%			0.92	%			0.93	%			0.69	%
Net charge-offs:
Quarter-to-date		$	-			$	2,851			$	34			$	264			$	693
Year-to-date			3,149				3,149				298				264				1,550
Net charge-offs to average loans, annualized:
Quarter-to-date			0.00	%			1.01	%			0.01	%			0.11	%			0.28	%
Year-to-date			0.29	%			0.39	%			0.06	%			0.11	%			0.16	%
Nonperforming loans/total loans			0.71	%			0.59	%			0.88	%			0.84	%			0.90	%
Allowance for loan losses/nonperforming loans			171.28	%			169.79	%			104.15	%			109.98	%			76.22	%
Nonperforming assets/total assets			1.10	%			1.03	%			0.78	%			0.73	%			0.76	%
(1) Nonperforming loans exclude troubled debt restructurings that are performing in accordance with their terms over a prescribed period of time.
Reconciliation of Common Stockholders' Equity to Tangible Common Equity
		For the Three Months Ended																					For the Twelve Months Ended
(Dollar amounts in thousands, unaudited)		December 31,				September 30,					June 30,			March 31,				December 31,					December 31,				December 31,
			2020				2020				2020				2020				2019				2020				2019
Stockholders' Equity		$	143,810			$	142,056			$	140,695			$	132,687			$	137,775			$	143,810			$	137,775
Less Goodwill and other intangibles			16,795				16,878				16,961				17,044				17,127				16,795				17,127
Tangible Common Equity		$	127,015			$	125,178			$	123,734			$	115,643			$	120,648			$	127,015			$	120,648
Shares outstanding			6,379,323				6,378,110				6,369,467				6,369,467				6,423,630				6,379,323				6,423,630
Tangible book value per share		$	19.91			$	19.63			$	19.43			$	18.16			$	18.78			$	19.91			$	18.78
Reconciliation of Average Equity to Return on Average Tangible Common Equity
		For the Three Months Ended																					For the Twelve Months Ended
		December 31,				September 30,					June 30,			March 31,				December 31,					December 31,				December 31,
			2020				2020				2020				2020				2019				2020				2019
Average Stockholders' Equity		$	146,374			$	144,167			$	139,212			$	139,208			$	140,475			$	142,241			$	135,900
Less Average Goodwill and other intangibles			16,836				16,919				17,002				17,085				17,169				16,960				17,296
Average Tangible Common Equity		$	129,538			$	127,248			$	122,210			$	122,123			$	123,306			$	125,281			$	118,604
Net income		$	2,489			$	1,853			$	2,966			$	1,041			$	3,141			$	8,349			$	12,711
Return on average tangible common equity (annualized)			7.64	%			5.79	%			9.76	%			3.43	%			10.11	%			6.66	%			10.72	%
Reconciliation of Pre-Tax Pre-Provision Income (PTPP)
		For the Three Months Ended																					For the Twelve Months Ended
		December 31,				September 30,					June 30,			March 31,				December 31,					December 31,				December 31,
			2020				2020				2020				2020				2019				2020				2019
Net income		$	2,489			$	1,853			$	2,966			$	1,041			$	3,141			$	8,349			$	12,711
Add Income Taxes			467				295				565				74				634				1,401				2,592
Add Provision for loan losses			2,100				4,000				1,000				2,740				460				9,840				890
PTPP		$	5,056			$	6,148			$	4,531			$	3,855			$	4,235			$	19,590			$	16,193
MIDDLEFIELD BANC CORP.
Average Balance Sheets
(Dollar amounts in thousands, unaudited)
		For the Three Months Ended
		December 31,												December 31,
			2020												2019
		Average									Average			Average									Average
		Balance				Interest					Yield/Cost			Balance				Interest					Yield/Cost
Interest-earning assets:
Loans receivable (3)		$	1,121,259			$	12,041				4.28	%		$	990,106			$	12,392				4.97	%
Investment securities (3)			113,801				888				3.65	%			104,139				858				3.79	%
Interest-earning deposits with other banks (4)			70,803				38				0.21	%			44,816				186				1.65	%
Total interest-earning assets			1,305,863				12,967				4.00	%			1,139,061				13,436				4.73	%
Noninterest-earning assets			78,064												64,303
Total assets		$	1,383,927											$	1,203,364
Interest-bearing liabilities:
Interest-bearing demand deposits		$	186,933			$	97				0.21	%		$	108,015			$	112				0.41	%
Money market deposits			191,771				255				0.53	%			157,117				557				1.41	%
Savings deposits			238,991				66				0.11	%			198,577				309				0.62	%
Certificates of deposit			316,293				1,237				1.56	%			370,404				2,036				2.18	%
Short-term borrowings			26				-				0.00	%			5,330				34				2.53	%
Other borrowings			17,068				41				0.96	%			12,602				80				2.52	%
Total interest-bearing liabilities			951,082				1,696				0.71	%			852,045				3,128				1.46	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			281,608												207,793
Other liabilities			4,863												3,051
Stockholders' equity			146,374												140,475
Total liabilities and stockholders' equity		$	1,383,927											$	1,203,364
Net interest income						$	11,271											$	10,308
Interest rate spread (1)											3.29	%											3.27	%
Net interest margin (2)											3.49	%											3.65	%
Ratio of average interest-earning assets to
average interest-bearing liabilities											137.30	%											133.69	%
(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 calculate the yield on tax-exempt securities and loans were $178 and $157 for the three months ended December 31, 2020 and 2019, respectively
(4) Includes dividends received on restricted stock.
		For the Three Months Ended
		December 31,												September 30,
			2020												2020
		Average									Average			Average									Average
		Balance				Interest					Yield/Cost			Balance				Interest					Yield/Cost
Interest-earning assets:
Loans receivable (3)		$	1,121,259			$	12,041				4.28	%		$	1,121,763			$	12,603				4.48	%
Investment securities (3)			113,801				888				3.65	%			111,994				867				3.66	%
Interest-earning deposits with other banks (4)			70,803				38				0.21	%			53,826				37				0.27	%
Total interest-earning assets			1,305,863				12,967				4.00	%			1,287,583				13,507				4.23	%
Noninterest-earning assets			78,064												66,836
Total assets		$	1,383,927											$	1,354,419
Interest-bearing liabilities:
Interest-bearing demand deposits		$	186,933			$	97				0.21	%		$	149,048			$	120				0.32	%
Money market deposits			191,771				255				0.53	%			176,136				312				0.70	%
Savings deposits			238,991				66				0.11	%			223,507				113				0.20	%
Certificates of deposit			316,293				1,237				1.56	%			349,981				1,561				1.77	%
Short-term borrowings			26				-				0.00	%			19,740				14				0.28	%
Other borrowings			17,068				41				0.96	%			17,130				28				0.65	%
Total interest-bearing liabilities			951,082				1,696				0.71	%			935,542				2,148				0.91	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			281,608												270,868
Other liabilities			4,863												3,842
Stockholders' equity			146,374												144,167
Total liabilities and stockholders' equity		$	1,383,927											$	1,354,419
Net interest income						$	11,271											$	11,359
Interest rate spread (1)											3.29	%											3.32	%
Net interest margin (2)											3.49	%											3.57	%
Ratio of average interest-earning assets to
average interest-bearing liabilities											137.30	%											137.63	%
(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 calculate the yield on tax-exempt securities and loans were $178 and $186 for the three months ended December 31, 2020, and September 30, 2020, respectively.
(4) Includes dividends received on restricted stock.
		For the Twelve Months Ended
		December 31,												December 31,
			2020												2019
		Average									Average			Average									Average
		Balance				Interest					Yield/Cost			Balance				Interest					Yield/Cost
Interest-earning assets:
Loans receivable (3)		$	1,079,788			$	49,003				4.55	%		$	997,744			$	50,390				5.06	%
Investment securities (3)			109,863				3,381				3.68	%			101,381				3,188				3.77	%
Interest-earning deposits with other banks (4)			56,222				254				0.45	%			44,943				947				2.11	%
Total interest-earning assets			1,245,873				52,638				4.28	%			1,144,068				54,525				4.83	%
Noninterest-earning assets			68,219												61,596
Total assets		$	1,314,092											$	1,205,664
Interest-bearing liabilities:
Interest-bearing demand deposits		$	144,897			$	445				0.31	%		$	102,550			$	374				0.36	%
Money market deposits			172,587				1,501				0.87	%			167,187				2,438				1.46	%
Savings deposits			211,151				510				0.24	%			199,515				1,399				0.70	%
Certificates of deposit			347,609				6,506				1.87	%			369,006				8,198				2.22	%
Short-term borrowings			22,637				79				0.35	%			14,808				368				2.49	%
Other borrowings			15,629				209				1.34	%			12,986				363				2.80	%
Total interest-bearing liabilities			914,510				9,250				1.01	%			866,052				13,140				1.52	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits			252,615												199,672
Other liabilities			4,726												4,040
Stockholders' equity			142,241												135,900
Total liabilities and stockholders' equity		$	1,314,092											$	1,205,664
Net interest income						$	43,388											$	41,385
Interest rate spread (1)											3.27	%											3.31	%
Net interest margin (2)											3.54	%											3.68	%
Ratio of average interest-earning assets to
average interest-bearing liabilities											136.23	%											132.10	%
(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 calculate the yield on tax-exempt securities and loans were $742 and $720 for 2020 and 2019, respectively.
(4) Includes dividends received on restricted stock.