MIDDLEFIELD, Ohio, July 24, 2023 (GLOBE NEWSWIRE) -- Middlefield Banc Corp. (NASDAQ:MBCN) reported financial results for the 2023 first half and second quarter ended June 30, 2023.

2023 First Half Financial Highlights Include (on a year-over-year basis unless noted):

Net income increased 26.1% to a record $10.0 million
Earnings were $1.23 per diluted share compared to $1.35 per diluted share, reflecting a 38.4% increase in the average diluted shares outstanding related to the Liberty Bancshares, Inc. merger
Pre-tax, pre-provision net income increased 40.1% to a record $13.3 million
Net interest margin improved by 39 basis points to 4.30%, compared to 3.91%, and reflects five consecutive quarters of a net interest margin above 4%
Total loans were a record $1.41 billion, compared to $1.35 billion at December 31, 2022
Total deposits were a record $1.43 billion, compared to $1.40 billion at December 31, 2022
Uninsured deposits to total assets were approximately 20%, and approximately 25% of total deposits at June 30, 2023
Return on average assets was 1.16%, compared to 1.21%
Return on average equity was 9.64%, compared to 11.49%
Return on average tangible common equity⁽¹⁾ was 11.92%, compared to 13.03%
Strong asset quality with nonperforming assets to total assets of 0.74%, compared to 0.89%
Allowance for credit losses was 1.46% of total loans, compared to 1.49%
Equity to assets increased to 11.26% from 9.91%

"I'm proud to report that Middlefield achieved record second-quarter and year-to-date results, including net income, assets, loans, and deposits. These results are especially encouraging as we successfully navigate the rapid rise in interest rates over the past 12 months, significant competition for deposits, and an increasingly fluid business environment. Our ability to withstand these macro-level headwinds is reflected in our strong balance sheet, robust asset quality, and diverse core deposit base, as well as the benefits and added scale of the Liberty Bancshares, Inc. merger. Most importantly, our success through the first six months of 2023 is a direct result of the dedication and expertise of our team members and the value we provide our local communities," stated James R. Heslop, II, Chief Executive Officer.

"As we look towards the second half of 2023, we expect higher rates and competition for deposits will increase our cost of funds in the coming quarters. Despite these trends, we believe our compelling net interest margin and larger loan portfolio will support strong levels of interest income throughout the remainder of the year. Middlefield's strong balance sheet and highly profitable financial model provides us with the flexibility to capitalize on opportunities for organic growth, embrace new technologies, and expand our team with top talent. We understand the importance of maintaining a prudent focus on asset quality and managing expenses, and we are committed to upholding these principles as we navigate the evolving landscape," concluded Mr. Heslop.

Income Statement

Net interest income for the 2023 first half increased 44.1% to $33.9 million, compared to $23.5 million for the same period last year. Year-to-date, the net interest margin was 4.30%, compared to 3.91% for the same period last year. Net interest income for the 2023 second quarter increased 44.3% to $17.4 million, compared to $12.0 million for the 2022 second quarter. Net interest income for the 2023 second quarter benefited from a one-time $539,000 purchase accounting adjustment for loan valuations associated with the Liberty Bancshares, Inc. merger. The net interest margin for the 2023 second quarter was 4.34%, compared to 4.02% for the same period of 2022.

Pre-tax income during last year's first half and second quarter benefited from $1.2 million and $580,000, respectively, of accelerated net fees associated with the Paycheck Protection Program ("PPP").

For the 2023 first half, noninterest income was $3.3 million, compared to $2.8 million for the same period last year. Noninterest income for the 2023 second quarter was $1.6 million, compared to $1.4 million for the same period last year.

For the 2023 first half, noninterest expense was $23.8 million, compared to $16.8 million for the same period last year. Operating costs in the 2023 second quarter were $12.1 million from $8.5 million for the 2022 second quarter. Higher second-quarter and first-half expenses were primarily associated with the Liberty Bancshares, Inc. merger. The Company's efficiency ratio for the 2023 first half was 62.73%, compared to 62.17% for the same period last year, and for the 2023 second quarter was 61.27%, compared to 61.83% for last year's second quarter.

Net income for the 2023 first half ended June 30, 2023, was $10.0 million, or $1.23 per diluted share, compared to $7.9 million, or $1.35 per diluted share for the same period last year. Net income for the 2023 second quarter ended June 30, 2023, was $5.1 million, or $0.63 per diluted share, compared to $4.1 million, or $0.70 per diluted share, for the same period last year.

Pre-tax, pre-provision net income was $13.3 million, an increase of 40.1% from $9.5 million last year. Pre-tax, pre-provision net income was a quarterly record of $6.9 million, an increase of 41.3% from $4.9 million last year.

Balance Sheet

Total assets at June 30, 2023, increased 35.4% to $1.75 billion, compared to $1.29 billion at June 30, 2022. Net loans at June 30, 2023, increased 44.2% to $1.39 billion, compared to $963.4 million at June 30, 2022. The 44.2% increase in net loans was primarily due to the Liberty Bancshares, Inc. merger.

Total deposits at June 30, 2023, were $1.43 billion, compared to $1.15 billion at June 30, 2022. The 24.8% increase in deposits was primarily due to the Liberty Bancshares, Inc. merger. At June 30, 2023, the Company had brokered deposits of $53.5 million, compared to $5.0 million at June 30, 2022. The investment portfolio was $167.2 million at June 30, 2023, compared with $172.0 million at June 30, 2022.

Michael Ranttila, Chief Financial Officer, stated, "Our legacy of maintaining a robust balance sheet continues to produce strong financial results while elevating our position as a trusted and stable financial institution. We ended the quarter with $59.1 million in cash and cash equivalents, $167.2 million in investment securities, and $582.9 million of maximum borrowing capacity at the Federal Home Loan Bank. In addition, we maintain a modest level of unrealized losses on all securities, which was 10.5% of total capital at June 30, 2023. We believe we have ample liquidity to navigate a more complex economic environment while supporting our growth and capital allocation strategies."

Middlefield's CRE portfolio included the following categories at June 30, 2023:

CRE Category	Balance (in thousands)		Percent of CRE Portfolio	Percent of Loan Portfolio
Shopping Plazas	$	80,690	12.8%	5.7%
Office Space	$	73,230	11.6%	5.2%
Multi-Family	$	58,579	9.3%	4.2%
Self-Storage	$	58,234	9.2%	4.1%
Senior Living	$	40,318	6.4%	2.9%
Hospitality	$	33,701	5.3%	2.4%
Other	$	287,592	45.5%	20.4%
Total CRE	$	632,344	100.0%	44.9%

Middlefield's commercial real estate office credit exposure represented 5.2% of the Company's total loan portfolio at June 30, 2023, with a weighted average loan-to-value of approximately 53% and an average loan of $1.2 million. In addition, Middlefield's office exposure was within Ohio, with approximately 96% of the Company's office portfolio in suburban markets.

Stockholders' Equity and Dividends

At June 30, 2023, stockholders' equity was $197.2 million compared to $128.2 million at June 30, 2022. The 53.8% year-over-year increase in stockholders' equity was primarily due to the Liberty Bancshares, Inc. merger, partially offset by an increase in the unrealized loss on the available-for-sale investment portfolio and the Company's stock repurchase program. On a per-share basis, shareholders' equity at June 30, 2023, was $24.38 compared to $22.07 at June 30, 2022.

At June 30, 2023, tangible stockholders' equity⁽¹⁾ was $153.9 million, compared to $111.9 million at June 30, 2022. On a per-share basis, tangible stockholders' equity⁽¹⁾ was $19.02 at June 30, 2023, compared to $19.26 at June 30, 2022.

Through the 2023 first half, the Company declared cash dividends of $0.40 per share, a 17.6% increase from $0.34 per share for the same period last year.

At June 30, 2023, the Company had an equity-to-assets ratio of 11.26%, compared to 9.91% at June 30, 2022.

Asset Quality

For the 2023 first half and second quarter, the Company recorded provisions for credit losses of $1.3 million and $814,000, respectively, versus no provisions for credit losses for the same periods last year.

Net charge-offs were $111,000 or 0.03% of average loans, annualized, during the 2023 second quarter, compared to net recoveries of $58,000, or 0.02% of average loans, annualized, at June 30, 2022. Year-to-date net charge-offs were $103,000, or 0.01% of average loans, annualized, compared to net recoveries of $208,000, or 0.04% of average loans, annualized for the six-months ended June 30, 2022.

Nonperforming loans at June 30, 2023, were $7.1 million, compared to $4.7 million at June 30, 2022. Nonperforming assets at June 30, 2023, were $12.9 million, compared to $11.5 million at June 30, 2022. The allowance for credit losses at June 30, 2023, stood at $20.6 million, or 1.46% of total loans, compared to $14.6 million, or 1.49% of total loans at June 30, 2022.

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 $1.75 billion at June 30, 2023. The Bank operates 21 full-service banking centers and an LPL Financial® brokerage office serving Ada, Beachwood, Bellefontaine, Chardon, Cortland, Dublin, Garrettsville, Kenton, Mantua, Marysville, 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⁾NON-GAAP FINANCIAL MEASURES

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.

FORWARD-LOOKING STATEMENTS

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) changes in the securities markets; or (8) 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.

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

		June 30,			March 31,			December 31,			September 30,			June 30,
Balance Sheets (period end)		2023			2023			2022			2022			2022
ASSETS
Cash and due from banks	$	49,422		$	59,609		$	51,404		$	119,777		$	60,114
Federal funds sold		9,654			7,048			2,405			8,800			19,039
Cash and cash equivalents		59,076			66,657			53,809			128,577			79,153
Equity securities, at fair value		711			777			915			972			779
Investment securities available for sale, at fair value		167,209			169,605			164,967			162,064			171,958
Loans held for sale		171			104			-			-			-
Loans:
Commercial real estate:
Owner occupied		187,919			185,661			191,748			120,912			120,771
Non-owner occupied		385,846			400,314			380,580			285,419			288,334
Multifamily		58,579			63,892			58,251			38,063			29,152
Residential real estate		312,196			306,179			296,308			247,612			246,453
Commercial and industrial		209,349			195,024			195,602			146,987			137,398
Home equity lines of credit		126,894			126,555			128,065			114,344			111,730
Construction and other		118,851			97,406			94,199			33,748			35,988
Consumer installment		9,801			7,816			8,119			8,110			8,171
Total loans		1,409,435			1,382,847			1,352,872			995,195			977,997
Less allowance for credit losses		20,591			20,162			14,438			14,532			14,550
Net loans		1,388,844			1,362,685			1,338,434			980,663			963,447
Premises and equipment, net		21,629			21,775			21,961			16,215			17,030
Goodwill		36,197			31,735			31,735			15,071			15,071
Core deposit intangibles		7,171			7,436			7,701			1,171			1,249
Bank-owned life insurance		34,235			34,015			33,811			17,382			17,274
Other real estate owned		5,792			5,792			5,821			6,792			6,792
Accrued interest receivable and other assets		30,472			27,258			28,528			22,104			20,624
TOTAL ASSETS	$	1,751,507		$	1,727,839		$	1,687,682		$	1,351,011		$	1,293,377

		June 30,			March 31,			December 31,			September 30,			June 30,
		2023			2023			2022			2022			2022
LIABILITIES
Deposits:
Noninterest-bearing demand	$	441,102		$	474,977		$	503,907		$	383,675		$	379,872
Interest-bearing demand		229,633			196,086			164,677			160,112			154,788
Money market		241,537			221,723			187,498			162,052			185,494
Savings		231,508			287,859			307,917			247,466			252,179
Time		287,861			244,962			238,020			177,182			174,833
Total deposits		1,431,641			1,425,607			1,402,019			1,130,487			1,147,166
Short-term borrowings		100,000			85,000			65,000			80,000			-
Other borrowings		11,961			12,010			12,059			12,107			12,910
Accrued interest payable and other liabilities		10,678			10,057			10,913			5,562			5,081
TOTAL LIABILITIES		1,554,280			1,532,674			1,489,991			1,228,156			1,165,157
STOCKHOLDERS' EQUITY
Common stock, no par value; 25,000,000 shares authorized, 9,924,245 shares issued, 8,088,793 shares outstanding as of June 30, 2023		161,211			161,248			161,029			87,640			87,562
Retained earnings		96,500			93,024			94,154			93,166			89,900
Accumulated other comprehensive loss		(20,630	)		(19,253	)		(22,144	)		(25,080	)		(17,591	)
Treasury stock, at cost; 1,835,452 shares as of June 30, 2023		(39,854	)		(39,854	)		(35,348	)		(32,871	)		(31,651	)
TOTAL STOCKHOLDERS' EQUITY		197,227			195,165			197,691			122,855			128,220

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,751,507		$	1,727,839		$	1,687,682		$	1,351,011		$	1,293,377

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

		For the Three Months Ended															For the Six Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,			30-Jun			30-Jun
Statements of Income		2023			2023			2022			2022			2022			2023			2022

INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	20,762		$	18,275		$	14,368		$	11,892		$	11,268		$	39,037		$	22,253
Interest-earning deposits in other institutions		369			250			240			134			74			620			98
Federal funds sold		158			253			119			51			46			411			49
Investment securities:
Taxable interest		479			458			477			449			442			937			885
Tax-exempt interest		978			980			986			982			955			1,958			1,739
Dividends on stock		91			88			68			59			33			179			57
Total interest and dividend income		22,837			20,304			16,258			13,567			12,818			43,142			25,081
INTEREST EXPENSE
Deposits		3,851			2,990			1,771			812			709			6,841			1,435
Short-term borrowings		1,462			653			263			44			-			2,114			-
Other borrowings		170			155			142			112			81			326			150
Total interest expense		5,483			3,798			2,176			968			790			9,281			1,585

NET INTEREST INCOME		17,354			16,506			14,082			12,599			12,028			33,861			23,496

Provision for credit losses		814			507			-			-			-			1,321			-

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		16,540			15,999			14,082			12,599			12,028			32,540			23,496
NONINTEREST INCOME
Service charges on deposit accounts		940			987			976			1,004			956			1,926			1,870
Loss on equity securities		(67	)		(138	)		(77	)		(57	)		(72	)		(205	)		(39	)
Gain on other real estate owned		-			2			-			-			-			2			-
Earnings on bank-owned life insurance		220			200			137			108			108			420			214
Gain on sale of loans		6			23			(4	)		7			18			29			21
Revenue from investment services		174			186			147			233			153			359			294
Gross rental income		77			102			951			-			-			179			-
Other income		242			318			284			251			220			560			426
Total noninterest income		1,592			1,680			2,414			1,546			1,383			3,270			2,786

NONINTEREST EXPENSE
Salaries and employee benefits		6,019			5,852			4,886			4,491			3,785			11,871			8,171
Occupancy expense		659			696			487			458			583			1,355			1,088
Equipment expense		354			317			252			233			274			672			589
Data processing costs		1,137			1,070			1,050			985			822			2,207			1,665
Ohio state franchise tax		398			385			279			293			292			783			585
Federal deposit insurance expense		249			120			105			84			90			369			140
Professional fees		550			538			382			280			383			1,088			838
Other real estate owned writedowns		-			-			1,000			-			200			-			214
Advertising expense		415			486			308			268			229			901			457
Software amortization expense		23			26			28			27			40			49			88
Core deposit intangible amortization		265			265			140			78			77			529			154
Gross other real estate owned expenses		63			132			692			1			6			195			-
Merger-related costs		206			245			1,413			390			579			449			579
Other expense		1,716			1,661			1,321			1,298			1,175			3,378			2,233
Total noninterest expense		12,054			11,793			12,343			8,886			8,535			23,846			16,801

Income before income taxes		6,078			5,886			4,153			5,259			4,876			11,964			9,481
Income taxes		986			989			651			1,010			787			1,975			1,559

NET INCOME	$	5,092		$	4,897		$	3,502		$	4,249		$	4,089		$	9,989		$	7,922

PTPP (1)	$	6,892		$	6,393		$	4,153		$	5,259		$	4,876		$	13,285		$	9,481

(1) The pre-tax pre-provision (PTPP) is the income before income taxes before provision for credit 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 Six Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
		2023			2023			2022			2022			2022			2023			2022
Per common share data
Net income per common share - basic	$	0.63		$	0.60		$	0.53		$	0.73		$	0.70		$	1.23		$	1.35
Net income per common share - diluted	$	0.63		$	0.60		$	0.53		$	0.73		$	0.70		$	1.23		$	1.35
Dividends declared per share	$	0.20		$	0.20		$	0.30		$	0.17		$	0.17		$	0.40		$	0.34
Book value per share (period end)	$	24.38		$	24.13		$	23.98		$	21.30		$	22.07		$	24.38		$	22.07
Tangible book value per share (period end) ^{(2) (3)}	$	19.02		$	19.29		$	19.19		$	18.48		$	19.26		$	19.02		$	19.26
Dividends declared	$	1,619		$	1,605		$	2,514		$	983		$	993		$	3,223		$	1,993
Dividend yield		2.99%			2.89%			4.34%			2.49%			2.71%			3.01%			2.72%
Dividend payout ratio		31.79%			32.78%			71.79%			23.13%			24.28%			32.27%			25.16%
Average shares outstanding - basic		8,088,793			8,138,771			6,593,616			5,792,773			5,851,422			8,113,645			5,865,147
Average shares outstanding - diluted		8,101,984			8,152,629			6,610,907			5,805,799			5,860,098			8,126,836			5,873,823
Period ending shares outstanding		8,088,793			8,088,793			8,245,235			5,767,803			5,810,351			8,088,793			5,810,351

Selected ratios
Return on average assets		1.17%			1.16%			0.97%			1.32%			1.25%			1.16%			1.21%
Return on average equity		9.54%			10.19%			9.35%			12.94%			12.30%			9.64%			11.49%
Return on average tangible common equity ^{(2) (4)}		11.76%			12.77%			11.13%			14.79%			14.02%			11.92%			13.03%
Efficiency ⁽¹⁾		61.27%			62.44%			72.75%			61.07%			61.83%			62.73%			62.17%
Equity to assets at period end		11.26%			11.30%			11.71%			9.09%			9.91%			11.26%			9.91%
Noninterest expense to average assets		0.69%			0.69%			0.86%			0.69%			0.65%			1.38%			1.27%

(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 Six Months Ended
		June 30,		March 31,			December 31,			September 30,			June 30,			June 30,		June 30,
Yields		2023		2023			2022			2022			2022			2023		2022
Interest-earning assets:
Loans receivable (2)		5.96%		5.45%			5.11%			4.78%			4.66%			5.71%		4.60%
Investment securities (2)		4.08%		4.11%			3.83%			3.90%			3.76%			4.08%		3.59%
Interest-earning deposits with other banks		3.98%		3.46%			3.42%			2.06%			0.77%			3.71%		0.48%
Total interest-earning assets		5.69%		5.22%			4.88%			4.55%			4.28%			5.46%		4.17%
Deposits:
Interest-bearing demand deposits		1.11%		0.83%			0.83%			0.22%			0.15%			0.99%		0.15%
Money market deposits		2.21%		1.52%			1.00%			0.46%			0.49%			1.89%		0.48%
Savings deposits		0.73%		1.03%			0.49%			0.19%			0.06%			0.89%		0.06%
Certificates of deposit		2.35%		1.71%			1.30%			0.96%			0.83%			2.04%		0.85%
Total interest-bearing deposits		1.60%		1.28%			0.87%			0.43%			0.36%			1.44%		0.36%
Non-Deposit Funding:
Borrowings		5.26%		4.78%			4.25%			2.94%			2.51%			5.10%		2.34%
Total interest-bearing liabilities		2.02%		1.52%			1.02%			0.50%			0.39%			1.78%		0.39%
Cost of deposits		1.09%		0.84%			0.57%			0.29%			0.24%			0.97%		0.25%
Cost of funds		1.43%		1.02%			0.68%			0.34%			0.27%			1.23%		0.27%
Net interest margin (1)		4.34%		4.26%			4.23%			4.23%			4.02%			4.30%		3.91%

(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
		June 30,		March 31,			December 31,			September 30,			June 30,
Asset quality data		2023		2023			2022			2022			2022
(Dollar amounts in thousands, unaudited)
Nonperforming loans ⁽¹⁾	$	7,116	$	6,882		$	2,111		$	3,692		$	4,670
Other real estate owned		5,792		5,792			5,821			6,792			6,792
Nonperforming assets	$	12,908	$	12,674		$	7,932		$	10,484		$	11,462

Allowance for credit losses	$	20,591	$	20,162		$	14,438		$	14,532		$	14,550
Allowance for credit losses/total loans		1.46%		1.46%			1.07%			1.46%			1.49%
Net charge-offs (recoveries):
Quarter-to-date	$	111	$	(8	)	$	94		$	18		$	(58	)
Year-to-date		103		(8	)		(96	)		(190	)		(208	)
Net charge-offs (recoveries) to average loans, annualized:
Quarter-to-date		0.03%		0.00%			0.03%			0.01%			-0.02	%
Year-to-date		0.01%		0.00%			-0.01	%		-0.02	%		-0.04	%

Nonperforming loans/total loans		0.50%		0.50%			0.16%			0.37%			0.48%
Allowance for credit losses/nonperforming loans		289.36%		292.97%			683.94%			393.61%			311.56%
Nonperforming assets/total assets		0.74%		0.73%			0.47%			0.78%			0.89%

(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
(Dollar amounts in thousands, unaudited)		June 30,		March 31,			December 31,			September 30,			June 30,
		2023		2023			2022			2022			2022

Stockholders' Equity	$	197,227	$	195,165		$	197,691		$	122,855		$	128,220
Less Goodwill and other intangibles		43,368		39,171			39,436			16,242			16,320
Tangible Common Equity	$	153,859	$	155,994		$	158,255		$	106,613		$	111,900

Shares outstanding		8,088,793		8,088,793			8,245,235			5,767,803			5,810,351
Tangible book value per share	$	19.02	$	19.29		$	19.19		$	18.48		$	19.26


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

		June 30,		March 31,			December 31,			September 30,			June 30,			June 30,		June 30,
		2023		2023			2022			2022			2022			2023		2022

Average Stockholders' Equity	$	214,161	$	194,814		$	148,616		$	130,263		$	133,377		$	208,930	$	139,003
Less Average Goodwill and other intangibles		40,522		39,300			23,731			16,280			16,357			39,911		16,396
Average Tangible Common Equity	$	173,639	$	155,514		$	124,885		$	113,983		$	117,020		$	169,019	$	122,607

Net income	$	5,092	$	4,897		$	4,896		$	3,502		$	4,249		$	9,989	$	7,922
Return on average tangible common equity (annualized)		11.76%		12.77%			11.13%			14.79%			14.02%			11.92%		13.03%


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

		June 30,		March 31,			December 31,			September 30,			June 30,			June 30,		June 30,
		2023		2023			2022			2022			2022			2023		2022

Net income	$	5,092	$	4,897		$	3,502		$	4,249		$	4,089		$	9,989	$	7,922
Add Income Taxes		986		989			651			1,010			787			1,975		1,559
Add Provision for credit losses		814		507			-			-			-			1,321		-
PTPP	$	6,892	$	6,393		$	4,153		$	5,259		$	4,876		$	13,285	$	9,481

MIDDLEFIELD BANC CORP.
Average Balance Sheets
(Dollar amounts in thousands, unaudited)

	For the Three Months Ended
	June 30,						June 30,
		2023						2022
	Average				Average		Average				Average
	Balance		Interest		Yield/Cost		Balance		Interest		Yield/Cost
Interest-earning assets:
Loans receivable (3)	$	1,400,074	$	20,762	5.96	%	$	970,820	$	11,268	4.66	%
Investment securities (3)		168,890		1,457	4.08	%		176,138		1,397	3.76	%
Interest-earning deposits with other banks (4)		62,296		618	3.98	%		79,924		153	0.77	%
Total interest-earning assets		1,631,260		22,837	5.69	%		1,226,882		12,818	4.28	%
Noninterest-earning assets		114,120						89,555
Total assets	$	1,745,380

Middlefield Banc Corp. Reports 2023 First Half Financial Results