Middlefield Banc (MBCN) 8-K Middlefield Banc Corp. Reports First Quarter 2006 Earnings

Exhibit 99

15985 East High Street
P. O. Box 35
Middlefield, Ohio 44062
Phone: 440/632-1666 FAX: 440/632-1700
www.middlefieldbank.com

PRESS RELEASE

Contact:	James R. Heslop, 2nd
	Executive Vice President/Chief Operating Officer
	(440) 632-1666 Ext. 3219
	jheslop@middlefieldbank.com

Middlefield Banc Corp. Reports First Quarter 2006 Earnings

MIDDLEFIELD, OHIO, April 20, 2006¨¨¨¨ Middlefield Banc Corp. (Pink Sheets: MBCN) today reported net earnings for the three months ended March 31, 2006, of $818,000, or $0.60 per diluted share. The first quarter of 2006 earnings represent a 14.5% increase over the $714,000, or $0.53 per diluted share, in net earnings that the company recorded for the quarter ended March 31, 2005.

The company’s total assets ended the first quarter of 2006 at $312.6 million, an increase of 4.7% over the $298.6 million in total assets reported at March 31, 2005. Net loans at March 31, 2006, were $232.9 million, up $17.1 million, or 7.9%, over the $215.8 million reported at March 31, 2005. Total deposits at March 31, 2006, were $254.3 million, or 1.9% greater than the deposit level of $249.4 million at March 31, 2005.

Annualized returns on average equity (“ROE”) and average assets (“ROA”) for the first quarter of 2006 were 11.79% and 1.05%, respectively. The comparable results for the first quarter of 2005 were 11.45% and 0.97%.

In reviewing his company’s performance, Middlefield Banc Corp. President and CEO Thomas G. Caldwell, commented, “To report another quarter of earnings growth is, in fact, a pleasure. The increase in non-interest income coupled with the control exhibited in operating expenses worked to offset the continued margin compression that is being felt across the industry.”

Caldwell continued, “While our balance sheet growth continues to be slower than plan, we recognize that pricing within the market remains at levels that we do not deem prudent for both loans and deposits. We remain committed to our strategic focus of

prudent growth of the balance sheet as we have undertaken initiatives to both increase the level of earning assets and grow core deposit relationships.”

Highlights for the first quarter of 2006 include:

• Net interest income was $2.69 million, an increase of 4.6% over the $2.57 million reported for the comparable period of 2005. The net interest margin was 3.89% for the first quarter of 2006 as well as the first quarter of 2005. Although the yield curve has begun to show some movement, it remained flat for most of the first quarter of 2006. This along with aggressive loan and deposit pricing within the company’s market area were factors in the reported net interest margin.

• Non-interest income increased $69,000 for the three-month period of 2006 over the comparable 2005 period. This increase of 14.4% was primarily the result of higher service charge revenue associated with an increase in the number of deposit accounts, expanded ATM/Debit card usage, and an increase in revenue from investment services. Offsetting the increases were a seasonal decline in statement service charges and a loss on the sale of securities as the company disposed of the remaining portions of several mortgage-backed securities from its investment portfolio.

• Non-interest expense for the first quarter of 2006 was consistent with that of the first quarter of 2005. Non-interest expense for the 2006 period was $2.04 million, while the 2005 figure was $2.01 million, reflecting an increase of 1.1%. The leading factor in the increased expenses was data processing costs associated with an expanded base of products per customer, as well as the introduction during 2005 of the company’s image based item processing system. Also contributing were the cost of certain maintenance contracts, seasonal utility costs, and depreciation.

• Total deposit growth from the end of the first quarter of 2005 to the same point in 2006 was $4.83 million. The slower growth is directly the result of the competitive interest rate environment present within the company’s market area. The company also had a shift in the deposit composition as certificates of deposits and IRA accounts increased $13.9 million in the period-to-period comparison and savings accounts and money market accounts decreased $15.5 million during the same period. Net loans at March 31, 2006, stood at $232.9 million, reflecting an increase of $17.1 million from March 31, 2005. Increases in commercial loans were the predominant factor, while residential mortgages loans increased at levels lower than historically experienced by the company.

• Provision for loan losses was $75,000 for the 2006 first quarter and $60,000 for equal 2005 period. The level of provision was in keeping with the company’s financial plan and is designed to accommodate the increased size of the loan portfolio and the larger level of commercial relationships. At March 31, 2006, the allowance for loan losses as a percentage of total loans was 1.22%, which was comparable to the 1.23% reported at March 31, 2005.

• Stockholders’ equity at March 31, 2006, was $27.9 million, or 8.92% of total assets. This represents an increase of 11.4% from the March 31, 2005 figure.

Book value as of March 31, 2006 was $20.65. This was an increase of $1.88 over the March 31, 2005 book value.

• In the first quarter of 2006, Middlefield paid a cash dividend of $0.235 per share. This represents an increase of 12.2% over the cash dividend paid during the first quarter of 2005. The 2005 cash dividend amount has been adjusted to reflect the 5% stock dividend paid by the company during the fourth quarter of 2005.

“Our two primary areas of focus are the net interest margin and asset quality,” commented Donald L. Stacy, Chief Financial Officer and Treasurer of Middlefield Banc Corp. “We have continued our conservative posture on loan pricing, which has been reflected in our loan growth. This has also impacted our earnings as the investment alternatives have provided lower yields. On the liability side of the balance sheet, we have been faced with what we deem to be irrational pricing within our markets. While we have worked to control interest expense, we have also worked to maintain deposit balances.”

“Our level of non-performing loans remains relatively high in comparison to our historical levels,” Stacy continued. “However, one large commercial credit, which is real estate secured, constitutes the bulk of the dollar total. Our senior credit personnel remain committed to resolving that and other issues within the most expedient timeframe. Our expectations are for only nominal losses, should there be any.”

Middlefield Banc Corp. is a financial holding company headquartered in Middlefield, Ohio. Its subsidiary, The Middlefield Banking Company, operates six full service banking centers and a UVEST Financial Services^® brokerage office serving Chardon, Garrettsville, Mantua, Middlefield, and Orwell, Ohio. The banking subsidiary has recently entered into a lease arrangement for a seventh banking office to be located in Newbury, Geauga County, Ohio.

This announcement contains forward-looking statements that involve risk and uncertainties, including changes in general economic and financial market conditions and the Company’s ability to execute its business plans. Although management believes the expectations reflected in such statements are reasonable, actual results may differ materially.

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights

March 31, 2006 and 2005
(unaudited, dollars in thousands)

	March 31,		March 31,		Percent
Balance Sheet (period end)	2006		2005		Change
Assets
Cash and cash equivalents	$	6,259	$	4,386		42.7	%
Federal funds sold		—		4,675		—
Available for sale securities		55,888		58,042		-3.7	%
Held to maturity securities		216		221		-2.5	%
Loans:		235,783		218,469		7.9	%
Less: reserve for loan losses		2,888		2,686		7.5	%
Net loans		232,895		215,784		7.9	%
Premises and equipment		6,588		6,616		-0.4	%
Bank-owned life insurance		6,686		5,474		22.1	%
Accrued interest receivable and other assets		4,045		3,364		20.2	%
Total Assets	$	312,577	$	298,563		4.7	%

	March 31,			March 31,
	2006			2005
Liabilities and Stockholders’ Equity
Non-interest bearing demand deposits	$	39,562		$	35,603		11.1	%
Interest bearing demand deposits		11,344			8,898		27.5	%
Money market accounts		13,069			17,095		-23.5	%
Savings deposits		63,086			74,539		-15.4	%
Certificates of deposit		127,206			113,307		12.3	%
Total Deposits		254,268			249,442		1.9	%
Borrowed funds		29,352			23,213		26.4	%
Other liabilities		1,065			864		23.3	%
Total Liabilities		284,685			273,519		4.1	%
Common equity		31,664			28,438		11.3	%
Net Unrealized gain (loss) on securities		(747	)		(424	)	76.4	%
Treasury stock		(3,026	)		(2,970	)	1.9	%
Total Stockholders’ Equity		27,892			25,044		11.4	%
Total Liabilities and Stockholders’ Equity	$	312,577		$	298,563		4.7	%

MIDDLEFIELD BANC CORP.
Consolidated Selected Financial Highlights
March 31, 2006 and 2005
(unaudited, dollars in thousands, except per share amounts)

	For the Three Months Ended
	March 31,					Percent
	2006			2005		Change
Statement of Income
Interest Income	$	4,561		$	4,116		10.8	%
Interest Expense		1,875			1,548		21.1	%
Net interest income		2,686			2,568		4.6	%
Provision for loan losses		75			60		25.0	%
Net interest income after provision for loan losses		2,611			2,508		4.1	%
Non-interest income
Service charges on deposits		413			353		16.8	%
Other income		90			78		16.2	%
Earnings on bank-owned life insurance		53			50		6.3	%
Net securities gains (losses)		(6	)		—		—
Total non-interest income		550			481		14.4	%
Non-interest expense
Salaries and employee benefits		995			1,016		-2.1	%
Net occupancy expense		154			135		14.4	%
Equipment expense		92			108		-14.9	%
Data processing costs		179			149		19.8	%
Ohio state franchise tax		90			90		0.0	%
Other operating expense		526			515		2.2	%
Total non-interest expense		2,036			2,013		1.1	%
Income before income taxes		1,126			976		15.3	%

	For the Three Months Ended
	March 31,						Percent
	2006			2005			Change
Provision for income taxes		308			262			17.6	%
Net income	$	818		$	714			14.5	%
Per common share data
Net income per common share — basic	$	0.61		$	0.53			15.1	%
Net income per common share — diluted	$	0.60		$	0.53			13.2	%
Dividends declared	$	0.235		$	0.210			12.2	%
Book value (period end)	$	20.65		$	18.77			10.0	%
Average shares outstanding — basic		1,347,464			1,329,800
Average shares outstanding -diluted		1,368,931			1,336,957
Period ending shares outstanding		1,350,661			1,334,486
Selected ratios
Return on average assets		1.05	%		0.97	%
Return on average equity		11.79	%		11.45	%
Yield on earning assets		6.49	%		6.15	%
Cost of interest bearing liabilities		3.07	%		2.70	%
Net interest spread		3.42	%		3.45	%
Net interest margin		3.89	%		3.89	%
Efficiency ratio		61.34	%		64.70	%
Equity to assets at period end		8.92	%		8.39	%

	March 31,			March 31,
Asset quality data	2006			2005
Allowance for loan losses	$	2,888		$	2,686
Allowance for loan losses/total loans		1.22	%		1.23	%
Net charge-offs:
Quarter-to-date	$	28		$	(2	)
Year-to-date		28			(2	)
Net charge-offs to average loans		0.01	%		0.00	%
Non-performing loans/total loans		0.87	%		0.96	%
Allowance for loan losses/non-performing loans		140.40	%		127.72	%