Middlefield Banc Corp. Reports 2021 Nine Month Financial

MIDDLEFIELD, Ohio, Oct. 18, 2021 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the three and nine months ended September 30, 2021.

2021 Nine Month Financial Highlights (on a year-over-year basis unless noted):

Net income of $13.8 million, or $2.19 per diluted share driven by record third quarter earnings of $5.2 million, or a record $0.85 per diluted share
Net interest margin improved by 23 basis points to 3.79%, compared to 3.56%
Total noninterest income was up 29.5% to $5.7 million
Pre-tax, pre-provision⁽¹⁾ income increased 22.0% to $17.7 million
Return on average assets increased to 1.34% from 0.61%
Return on average equity increased to 12.58% from 5.48%
Return on average tangible common equity⁽¹⁾ increased to 14.20% from 6.22%
Efficiency ratio improved to 56.42%, compared to 58.59%
Year-to-date net charge-offs declined 96.0% to $125,000
Middlefield has repurchased 346,103 shares of stock year-to-date, including 165,058 shares repurchased during the 2021 third quarter

“As we celebrate our 120^th anniversary, I am extremely pleased with the strong financial results we are achieving,” stated Thomas G. Caldwell, President and Chief Executive Officer. “We continue generating strong profitability as higher net interest margin, favorable asset quality and stable noninterest income successfully offset challenging loan growth and higher noninterest expense.”

“We also continue to allocate capital to our share repurchase program. Year-to-date, we have repurchased 346,103 shares of our common stock at an average price of $23.47 per share, which includes 165,058 shares repurchased in the third quarter at an average price of $23.82 per share. Shares repurchased this year have been at an average price of 109.7% to tangible book value of $21.39 at September 30, 2021, which we believe is a tremendous value and offers a significant opportunity for our shareholders to increase their ownership in the Company,” continued Mr. Caldwell.

“While economic and interest rate uncertainty remains, we are focused on the items under our control. We are dedicated to supporting our communities, managing risk, and looking for new opportunities to drive interest and noninterest income. These are many of the same principles that have made Middlefield successful over the past 120 years and we are committed to continue creating sustainable value for our shareholders,” concluded Mr. Caldwell.

Income Statement
Net interest income for the nine-month period ended September 30, 2021, increased 13.0% to $36.3 million, compared to $32.1 million for the same period last year. Year-to-date, the net interest margin was 3.79%, compared to 3.56% for the same period last year. Net interest income for the 2021 third quarter was $12.5 million, compared to $11.4 million for the 2020 third quarter. The 10.0% increase in net interest income for the 2021 third quarter was largely a result of a 55.7% reduction in interest expense. The net interest margin for the 2021 third quarter was 3.91%, compared to 3.57% for the same period of 2020.

For the 2021 nine-month period, noninterest income increased 29.5% to $5.7 million, compared to $4.4 million for the same period last year. Noninterest income was $1.8 million for both the 2021 and 2020 third quarters.

For the 2021 nine months, noninterest expense increased 10.3% to $24.2 million, compared to $22.0 million for the same period last year. Operating costs in the 2021 third quarter increased 13.0% to $7.9 million from $7.0 million for the 2020 third quarter.

Net income for the 2021 nine-month period ended September 30, 2021, was a record $13.8 million, or a record $2.19 per diluted share, compared to $5.9 million, or $0.92 per diluted share for the same period last year. Net income for the 2021 third quarter ended September 30, 2021, was a quarterly record of $5.2 million, or $0.85 per diluted share, compared to $1.9 million, or $0.29 per diluted share for the same period last year.

Balance Sheet
Total assets at September 30, 2021, increased slightly to approximately $1.37 billion from $1.36 billion at September 30, 2020. Net loans at September 30, 2021, decreased 10.5% to $996.1 million, compared to $1.11 billion at September 30, 2020 as PPP forgiveness increased. Year-to-date, Middlefield has helped customers receive $129.5 million of forgiveness payments under the terms of the program, including processing $36.0 million of forgiveness payments during the third quarter of 2021. The balance of PPP loans outstanding at September 30, 2021, was $54.2 million.

Total deposits at September 30, 2021, were approximately $1.20 billion, compared to $1.19 billion at September 30, 2020. The 0.6% increase in deposits was primarily due to increases in interest-bearing, savings, and non-interest-bearing accounts, partially offset by decreased money market and time-based accounts. The investment portfolio, which is entirely classified as available for sale, was $163.1 million September 30, 2021, compared with $113.0 million at September 30, 2020.

Donald L. Stacy, Chief Financial Officer stated, “We ended the third quarter with one of the strongest balance sheets in our 120-year history. In addition, asset quality remains strong and is benefitting from stable economic trends within our Ohio markets, as well as our focus on prudently managing risk. The allowance for loan losses to total loans now stands at 1.41%, compared to 1.34% at June 30, 2021, and 1.01% at September 30, 2020. In addition, at September 30, 2021, we only had three loans in deferral status primarily within the hospitality industry representing a balance of $9.7 million,” concluded Mr. Stacy.

Stockholders’ Equity and Dividends
At September 30, 2021, shareholders’ equity increased 2.8% to $146.1 million compared to $142.1 million at September 30, 2020. On a per share basis, shareholders’ equity at September 30, 2021, was $24.13 compared to $22.27 at the same period last year.

Tangible stockholders’ equity⁽¹⁾ increased 3.5% to $129.5 million for the 2021 third quarter, compared to $125.2 million at September 30, 2020. On a per-share basis, tangible stockholders’ equity⁽¹⁾ was $21.39 at September 30, 2021, compared to $19.63 at September 30, 2020.

For the nine-month period ended September 30, 2021, the Company declared cash dividends of $0.48 per share totaling $3.0 million, compared to $0.45 per share or $2.9 million for the same period last year.

At September 30, 2021, the Company had an equity-to-assets leverage ratio of 10.69%, compared to 10.41% at September 30, 2020. The year-over-year increase in the Company’s equity-to-assets leverage ratio occurred even with the $8.1 million year-to-date investment in Middlefield’s share repurchase program.

Asset Quality
There was no provision for loan losses for the 2021 third quarter versus a $4.0 million provision for loan losses for the same period last year. The year-over-year decline in the provision for loan losses was partially due to strong asset quality and last year’s prudent build in the Company’s allowance for loan losses associated with the potential economic impacts caused by the COVID-19 pandemic. The provision for loan losses for the 2021 nine-month period was $900,000 versus $7.7 million for the same period last year.

Net recoveries of $34,000, or -0.01% of average loans, annualized, during the 2021 third quarter, compared to net charge-offs of $2.9 million, or 1.01% of average loans, annualized, at September 30, 2020. Year-to-date net charge-offs were $125,000, or 0.02% of average loans, annualized, compared to net charge-offs of $3.1 million, or 0.39% of average loans, annualized for the nine-months ended September 30, 2020.

Nonperforming assets at September 30, 2021, were $13.9 million, compared to $14.1 million at September 30, 2020. Nonperforming loans at September 30, 2021, were $6.8 million (excluding $9.7 million of loans currently on payment deferral), a 1.7% increase from the same period last year, but down 12.3% from the 2021 second quarter. The allowance for loan losses at September 30, 2021, stood at $14.2 million, or 1.41% of total loans, compared to $11.4 million, or 1.01% of total loans at September 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 $1.37 billion at September 30, 2021. 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		Andrew M. Berger
President/Chief Executive Officer		Managing Director
Middlefield Banc Corp.		SM Berger & Company, Inc.
(440) 632-1666 Ext. 3200		(216) 464-6400
tcaldwell@middlefieldbank.com		andrew@smberger.com

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, unaudited)

		September 30,			June 30,			March 31,			December 31,			September 30,
Balance Sheets (period end)		2021			2021			2021			2020			2020
ASSETS
Cash and due from banks	$	113,177		$	82,435		$	93,037		$	92,874		$	46,097
Federal funds sold		19,174			10,034			7,436			19,543			6,884
Cash and cash equivalents		132,351			92,469			100,473			112,417			52,981
Equity securities, at fair value		833			730			690			609			553
Investment securities available for sale, at fair value		163,057			150,850			123,218			114,360			112,968
Loans held for sale		676			790			1,260			878			10,457
Loans:
Commercial real estate:
Owner occupied		110,883			109,777			104,379			103,121			107,342
Non-owner occupied		310,222			304,324			304,623			309,424			310,512
Multifamily		30,762			34,926			39,015			39,562			39,622
Residential real estate		232,020			228,102			228,052			233,995			222,237
Commercial and industrial		163,052			200,558			242,651			232,044			258,313
Home equity lines of credit		105,450			107,685			111,474			112,543			115,223
Construction and other		49,378			62,229			64,960			63,573			60,613
Consumer installment		8,515			8,694			9,046			9,823			10,534
Total loans		1,010,282			1,056,295			1,104,200			1,104,085			1,124,396
Less allowance for loan and lease losses		14,234			14,200			14,122			13,459			11,359
Net loans		996,048			1,042,095			1,090,078			1,090,626			1,113,037
Premises and equipment, net		17,507			17,680			18,002			18,333			18,633
Goodwill		15,071			15,071			15,071			15,071			15,071
Core deposit intangibles		1,484			1,564			1,644			1,724			1,807
Bank-owned life insurance		16,954			16,846			16,740			16,938			16,832
Other real estate owned		7,090			7,090			7,372			7,387			7,391
Accrued interest receivable and other assets		14,794			15,033			13,545			13,636			15,079
TOTAL ASSETS	$	1,365,865		$	1,360,218		$	1,388,093		$	1,391,979		$	1,364,809

		September 30,			June 30,			March 31,			December 31,			September 30,
		2021			2021			2021			2020			2020
LIABILITIES
Deposits:
Noninterest-bearing demand	$	316,770		$	326,665		$	317,224		$	291,347		$	268,838
Interest-bearing demand		237,576			207,725			215,684			195,722			179,080
Money market		178,423			183,453			187,204			198,493			184,936
Savings		256,114			252,171			259,973			243,888			231,696
Time		211,674			225,271			245,342			295,750			329,413
Total deposits		1,200,557			1,195,285			1,225,427			1,225,200			1,193,963

Other borrowings		12,966			13,031			13,095			17,038			17,100
Accrued interest payable and other liabilities		6,287			5,858			4,901			5,931			11,690
TOTAL LIABILITIES		1,219,810			1,214,174			1,243,423			1,248,169			1,222,753

STOCKHOLDERS' EQUITY
Common stock, no par value; 10,000,000 shares authorized, 7,329,548 shares issued, 6,054,083 shares outstanding as of September 30, 2021		87,131			87,131			87,073			86,886			86,871
Retained earnings		80,376			76,150			72,729			69,578			68,046
Accumulated other comprehensive income		3,610			3,893			2,917			4,284			4,077
Treasury stock, at cost; 1,275,465 shares as of September 30, 2021		(25,062	)		(21,130	)		(18,049	)		(16,938	)		(16,938	)
TOTAL STOCKHOLDERS' EQUITY		146,055			146,044			144,670			143,810			142,056

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,365,865		$	1,360,218		$	1,388,093		$	1,391,979		$	1,364,809

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
(Dollar amounts in thousands, unaudited)

		For the Three Months Ended												For the Nine Months Ended
		September 30,		June 30,		March 31,		December 31,			September 30,			September 30,		September 30,
Statements of Income		2021		2021		2021		2020			2020			2021		2020

INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	12,258	$	11,885	$	12,167	$	12,041		$	12,603		$	36,310	$	36,962
Interest-earning deposits in other institutions		30		12		18		9			8			60		109
Federal funds sold		1		1		-		1			-			2		21
Investment securities:
Taxable interest		461		410		370		297			249			1,241		612
Tax-exempt interest		673		602		558		591			618			1,833		1,881
Dividends on stock		24		26		29		28			29			79		86
Total interest and dividend income		13,447		12,936		13,142		12,967			13,507			39,525		39,671
INTEREST EXPENSE
Deposits		915		1,010		1,205		1,655			2,106			3,130		7,307
Short-term borrowings		-		-		-		(2	)		14			-		81
Other borrowings		37		39		39		43			28			115		166
Total interest expense		952		1,049		1,244		1,696			2,148			3,245		7,554

NET INTEREST INCOME		12,495		11,887		11,898		11,271			11,359			36,280		32,117

Provision for loan losses		-		200		700		2,100			4,000			900		7,740

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		12,495		11,687		11,198		9,171			7,359			35,380		24,377
NONINTEREST INCOME
Service charges on deposit accounts		876		856		787		729			691			2,519		1,810
Gain (loss) on equity securities		102		40		81		56			(28	)		223		(157	)
Earnings on bank-owned life insurance		108		106		226		106			109			440		321
Gains on sale of loans		309		221		592		332			660			1,122		1,155
Other income		426		409		532		387			379			1,367		1,251
Total noninterest income		1,821		1,632		2,218		1,610			1,811			5,671		4,380

NONINTEREST EXPENSE
Salaries and employee benefits		4,488		4,321		4,254		4,458			3,657			13,063		11,197
Occupancy expense		457		549		600		628			497			1,606		1,530
Equipment expense		333		313		357		365			363			1,003		943
Data processing costs		736		698		786		617			683			2,220		2,033
Ohio state franchise tax		287		286		286		251			282			859		831
Federal deposit insurance expense		150		150		144		103			123			444		320
Professional fees		136		323		419		352			289			878		1,007
Net loss (gain) on other real estate owned		9		22		46		(172	)		(184	)		77		(257	)
Advertising expense		222		221		221		55			217			664		643
Software amortization expense		88		74		80		66			70			242		285
Core deposit intangible amortization		81		80		80		83			83			241		249
Other expense		951		889		1,080		1,019			942			2,920		3,182
Total noninterest expense		7,938		7,926		8,353		7,825			7,022			24,217		21,963

Income before income taxes		6,378		5,393		5,063		2,956			2,148			16,834		6,794
Income taxes		1,174		968		896		467			295			3,038		934

NET INCOME	$	5,204	$	4,425	$	4,167	$	2,489		$	1,853		$	13,796	$	5,860

PTPP ⁽¹⁾	$	6,378	$	5,593	$	5,763	$	5,056		$	6,148		$	17,734	$	14,534

(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 Nine Months Ended
		September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
		2021			2021			2021			2020			2020			2021			2020
Per common share data
Net income per common share - basic	$	0.85		$	0.70		$	0.65		$	0.39		$	0.29		$	2.20		$	0.92
Net income per common share - diluted	$	0.85		$	0.70		$	0.65		$	0.39		$	0.29		$	2.19		$	0.92
Dividends declared per share	$	0.16		$	0.16		$	0.16		$	0.15		$	0.15		$	0.48		$	0.45
Book value per share (period end)	$	24.13		$	23.50		$	22.80		$	22.54		$	22.27		$	24.13		$	22.27
Tangible book value per share (period end) ^{(2) (3)}	$	21.39		$	20.82		$	20.17		$	19.91		$	19.63		$	21.39		$	19.63
Dividends declared	$	978		$	1,004		$	1,016		$	957		$	957		$	2,998		$	2,877
Dividend yield		2.66	%		2.72	%		3.10	%		2.65	%		3.09	%		2.69	%		3.11	%
Dividend payout ratio		18.79	%		22.69	%		24.38	%		38.45	%		51.65	%		21.73	%		49.10	%
Average shares outstanding - basic		6,136,648			6,297,071			6,364,132			6,378,706			6,376,291			6,265,803			6,387,581
Average shares outstanding - diluted		6,157,181			6,312,230			6,378,493			6,397,681			6,385,765			6,287,556			6,397,674
Period ending shares outstanding		6,054,083			6,215,511			6,344,657			6,379,323			6,378,110			6,054,083			6,378,110

Selected ratios
Return on average assets		1.51	%		1.30	%		1.22	%		0.72	%		0.54	%		1.34	%		0.61	%
Return on average equity		13.95	%		12.10	%		11.65	%		6.76	%		5.11	%		12.58	%		5.48	%
Return on average tangible common equity ^{(2) (4)}		15.71	%		13.65	%		13.17	%		7.64	%		5.79	%		14.20	%		6.22	%
Efficiency ⁽¹⁾		54.15	%		57.28	%		57.91	%		59.29	%		51.96	%		56.42	%		58.59	%
Equity to assets at period end		10.69	%		10.74	%		10.42	%		10.33	%		10.41	%		10.69	%		10.41	%
Noninterest expense to average assets		0.58	%		0.58	%		0.60	%		0.57	%		0.52	%		1.76	%		1.70	%

(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 Nine Months Ended
		September 30,			June 30,			March 31,			December 31,			September 30,		September 30,		September 30,
Yields		2021			2021			2021			2020			2020		2021		2020
Interest-earning assets:
Loans receivable ⁽²⁾		4.74	%		4.43	%		4.48	%		4.28	%		4.48	%	4.54	%	4.64	%
Investment securities ⁽²⁾		3.37	%		3.47	%		3.75	%		3.65	%		3.66	%	3.51	%	3.68	%
Interest-earning deposits with other banks		0.21	%		0.18	%		0.20	%		0.21	%		0.27	%	0.20	%	0.56	%
Total interest-earning assets		4.20	%		4.05	%		4.11	%		4.00	%		4.23	%	4.12	%	4.38	%
Deposits:
Interest-bearing demand deposits		0.12	%		0.12	%		0.16	%		0.21	%		0.32	%	0.13	%	0.36	%
Money market deposits		0.46	%		0.46	%		0.47	%		0.53	%		0.70	%	0.47	%	1.00	%
Savings deposits		0.06	%		0.06	%		0.07	%		0.11	%		0.20	%	0.06	%	0.29	%
Certificates of deposit		1.08	%		1.19	%		1.28	%		1.56	%		1.77	%	1.19	%	1.97	%
Total interest-bearing deposits		0.41	%		0.46	%		0.53	%		0.70	%		0.93	%	0.47	%	1.14	%
Non-Deposit Funding:
Borrowings		1.13	%		1.18	%		1.10	%		0.95	%		0.45	%	1.14	%	0.73	%
Total interest-bearing liabilities		0.42	%		0.47	%		0.54	%		0.71	%		0.91	%	0.48	%	1.12	%
Cost of deposits		0.30	%		0.34	%		0.40	%		0.54	%		0.72	%	0.35	%	0.89	%
Cost of funds		0.31	%		0.35	%		0.41	%		0.55	%		0.71	%	0.35	%	0.88	%
Net interest margin ⁽¹⁾		3.91	%		3.72	%		3.73	%		3.49	%		3.57	%	3.79	%	3.56	%

(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
		September 30,			June 30,			March 31,			December 31,			September 30,
Asset quality data		2021			2021			2021			2020			2020
(Dollar amounts in thousands, unaudited)
Nonperforming loans ⁽¹⁾	$	6,806		$	7,760		$	8,958		$	7,858		$	6,690
Other real estate owned		7,090			7,090			7,372			7,387			7,391
Nonperforming assets	$	13,896		$	14,850		$	16,330		$	15,245		$	14,081

Allowance for loan losses	$	14,234		$	14,200		$	14,122		$	13,459		$	11,359
Allowance for loan losses/total loans		1.41	%		1.34	%		1.28	%		1.22	%		1.01	%
Net charge-offs:
Quarter-to-date	$	(34	)	$	122		$	37		$	0		$	2,851
Year-to-date		125			159			37			3,149			3,149
Net charge-offs to average loans, annualized:
Quarter-to-date		-0.01	%		0.05	%		0.01	%		0.00	%		1.01	%
Year-to-date		0.02	%		0.03	%		0.01	%		0.29	%		0.39	%

Nonperforming loans/total loans		0.67	%		0.73	%		0.81	%		0.71	%		0.59	%
Allowance for loan losses/nonperforming loans		209.14	%		182.99	%		157.65	%		171.28	%		169.79	%
Nonperforming assets/total assets		1.02	%		1.09	%		1.18	%		1.10	%		1.03	%

(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 Nine Months Ended
(Dollar amounts in thousands, unaudited)		September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
		2021			2021			2021			2020			2020			2021			2020

Stockholders' Equity	$	146,055		$	146,044		$	144,670		$	143,810		$	142,056		$	146,055		$	142,056
Less Goodwill and other intangibles		16,555			16,635			16,715			16,795			16,878			16,555			16,878
Tangible Common Equity	$	129,500		$	129,409		$	127,955		$	127,015		$	125,178		$	129,500		$	125,178

Shares outstanding		6,054,083			6,215,511			6,344,657			6,379,323			6,378,110			6,054,083			6,378,110
Tangible book value per share	$	21.39		$	20.82		$	20.17		$	19.91		$	19.63		$	21.39		$	19.63


Reconciliation of Average Equity to Return on Average Tangible Common Equity		For the Three Months Ended															For the Nine Months Ended

		September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
		2021			2021			2021			2020			2020			2021			2020

Average Stockholders' Equity	$	148,048		$	146,719		$	145,065		$	146,374		$	144,167		$	146,611		$	142,949
Less Average Goodwill and other intangibles		16,594			16,674			16,754			16,836			16,919			16,674			17,002
Average Tangible Common Equity	$	131,454		$	130,045		$	128,311		$	129,538		$	127,248		$	129,937		$	125,947

Net income	$	5,204		$	4,425		$	4,167		$	2,489		$	1,853		$	13,796		$	5,860
Return on average tangible common equity (annualized)		15.71	%		13.65	%		13.17	%		7.64	%		5.79	%		14.20	%		6.22	%


Reconciliation of Pre-Tax Pre-Provision Income (PTPP)		For the Three Months Ended															For the Nine Months Ended

		September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
		2021			2021			2021			2020			2020			2021			2020

Net income	$	5,204		$	4,425		$	4,167		$	2,489		$	1,853		$	13,796		$	5,860
Add Income Taxes		1,174			968			896			467			295			3,038			934
Add Provision for loan losses		-			200			700			2,100			4,000			900			7,740
PTPP	$	6,378		$	5,593		$	5,763		$	5,056		$	6,148		$	17,734		$	14,534

MIDDLEFIELD BANC CORP.
Average Balance Sheets
(Dollar amounts in thousands, unaudited)
	For the Three Months Ended
	September 30,						September 30,
	2021						2020
	Average				Average		Average				Average
	Balance		Interest		Yield/Cost		Balance		Interest		Yield/Cost
Interest-earning assets:
Loans receivable ⁽³⁾	$	1,027,935	$	12,258	4.74	%	$	1,121,763	$	12,603	4.48	%
Investment securities ⁽³⁾		154,718		1,134	3.37	%		111,994		867	3.66	%
Interest-earning deposits with other banks ⁽⁴⁾		105,910		55	0.21	%		53,826		37	0.27	%
Total interest-earning assets		1,288,563		13,447	4.20	%		1,287,583		13,507	4.23	%
Noninterest-earning assets		82,952						66,836
Total assets	$	1,371,515					$	1,354,419
Interest-bearing liabilities:
Interest-bearing demand deposits	$	225,264	$	67	0.12	%	$	149,048	$	120	0.32	%
Money market deposits		182,831		214	0.46	%		176,136		312	0.70	%
Savings deposits		253,960		38	0.06	%		223,507		113	0.20	%
Certificates of deposit		218,323		596	1.08	%		349,981		1,561	1.77	%
Short-term borrowings		-		-	0.00	%		19,740		14	0.28	%
Other borrowings		12,999		37	1.13	%		17,130		28	0.65	%
Total interest-bearing liabilities		893,377		952	0.42	%		935,542		2,148	0.91	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		323,726						270,868
Other liabilities		6,364						1,756
Stockholders' equity		148,048						146,253
Total liabilities and stockholders' equity	$	1,371,515					$	1,354,419
Net interest income			$	12,495					$	11,359
Interest rate spread ⁽¹⁾					3.78	%					3.32	%
Net interest margin ⁽²⁾					3.91	%					3.57	%
Ratio of average interest-earning assets to average interest-bearing liabilities					144.24	%					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 $195 and $186 for the three months ended September 30, 2021 and 2020, respectively
(4) Includes dividends received on restricted stock.

	For the Three Months Ended
	September 30,						June 30,
	2021						2021
	Average				Average		Average				Average
	Balance		Interest		Yield/Cost		Balance		Interest		Yield/Cost
Interest-earning assets:
Loans receivable ⁽³⁾	$	1,027,935	$	12,258	4.74	%	$	1,078,866	$	11,885	4.43	%
Investment securities ⁽³⁾		154,718		1,134	3.37	%		135,338		1,012	3.47	%
Interest-earning deposits with other banks ⁽⁴⁾		105,910		55	0.21	%		85,245		39	0.18	%
Total interest-earning assets		1,288,563		13,447	4.20	%		1,299,449		12,936	4.05	%
Noninterest-earning assets		82,952						70,692
Total assets	$	1,371,515					$	1,370,141
Interest-bearing liabilities:
Interest-bearing demand deposits	$	225,264	$	67	0.12	%	$	207,080	$	64	0.12	%
Money market deposits		182,831		214	0.46	%		185,728		212	0.46	%
Savings deposits		253,960		38	0.06	%		253,612		38	0.06	%
Certificates of deposit		218,323		596	1.08	%		233,930		696	1.19	%
Short-term borrowings		-		-	0.00	%		227		-	0.00	%
Other borrowings		12,999		37	1.13	%		13,062		39	1.20	%
Total interest-bearing liabilities		893,377		952	0.42	%		893,639		1,049	0.47	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		323,726						323,590
Other liabilities		6,364						6,193
Stockholders' equity		148,048						146,719
Total liabilities and stockholders' equity	$	1,371,515					$	1,370,141
Net interest income			$	12,495					$	11,887
Interest rate spread ⁽¹⁾					3.78	%					3.58	%
Net interest margin ⁽²⁾					3.91	%					3.72	%
Ratio of average interest-earning assets to average interest-bearing liabilities					144.24	%					145.41	%

(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 $195 and $179 for the three months ended September 30, 2021, and June 30, 2021, respectively.
(4) Includes dividends received on restricted stock.

	For the Nine Months Ended
	September 30,						September 30,
	2021						2020
	Average				Average		Average				Average
	Balance		Interest		Yield/Cost		Balance		Interest		Yield/Cost
Interest-earning assets:
Loans receivable ⁽³⁾	$	1,070,058	$	36,310	4.54	%	$	1,065,964	$	36,962	4.64	%
Investment securities ⁽³⁾		135,522		3,074	3.51	%		108,551		2,493	3.68	%
Interest-earning deposits with other banks ⁽⁴⁾		94,955		141	0.20	%		51,361		216	0.56	%
Total interest-earning assets		1,300,535		39,525	4.12	%		1,225,876		39,671	4.38	%
Noninterest-earning assets		74,883						64,938
Total assets	$	1,375,418					$	1,290,814
Interest-bearing liabilities:
Interest-bearing demand deposits	$	211,797	$	209	0.13	%	$	130,886	$	349	0.36	%
Money market deposits		187,945		655	0.47	%		166,193		1,246	1.00	%
Savings deposits		254,574		123	0.06	%		201,871		443	0.29	%
Certificates of deposit		240,582		2,143	1.19	%		358,048		5,269	1.97	%
Short-term borrowings		113		-	0.00	%		30,174		81	0.36	%
Other borrowings		13,440		115	1.14	%		15,149		166	1.46	%
Total interest-bearing liabilities		908,451		3,245	0.48	%		902,321		7,554	1.12	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		314,172						242,951
Other liabilities		6,184						2,593
Stockholders' equity		146,611						142,949
Total liabilities and stockholders' equity	$	1,375,418					$	1,290,814
Net interest income			$	36,280					$	32,117
Interest rate spread ⁽¹⁾					3.64	%					3.26	%
Net interest margin ⁽²⁾					3.79	%					3.56	%
Ratio of average interest-earning assets to average interest-bearing liabilities					143.16	%					135.86	%

(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 $542 and $565 for the nine months ended September 30, 2021 and 2020, respectively.
(4) Includes dividends received on restricted stock.

Middlefield Banc Corp. Reports 2021 Nine Month Financial Results