Middlefield Banc (MBCN) 8-K Results of Operations and Financial Condition

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

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. Reports Financial Results for the 2015 Third Quarter

MIDDLEFIELD, OHIO, October 22, 2015¿  ¿  ¿  ¿ Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the three and nine months ended September 30, 2015.

2015 Third Quarter Financial Highlights Include(on a year-over-year basis unless noted):

• Net interest income increased 4.7% to $6.2 million.

• Noninterest income grew 11.9% to $1.1 million.

• Net income up 3.3% to $2.0 million, or $0.96 per diluted share.

• Tangible stockholders’ equity improved 10.1%, and 4.0% from 2015 second quarter.

• Total net loans increased 9.4%.

• Nonperforming assets declined to $10.9 million from $13.2 million.

• Tier 1 capital ratio strengthened to 9.66% from 9.50%.

“We are proud of the strong profitability we were able to achieve in the 2015 third quarter, driven by increases in both interest and noninterest income, and controlled expenses,” stated Thomas G. Caldwell, President and Chief Executive Officer. “Since the start of the year our loan portfolio has increased 8.4% primarily due to higher real estate loans reflecting the investments we have made in our advertising strategy, product lines, and associates. This growth helped drive a 5.8% year-over-year increase in interest and fees generated on loans in the 2015 third quarter, despite a lower yield on earnings assets. We did a good job managing expenses during the quarter, as our funding costs declined 4.0% year-over-year, while noninterest expenses declined 10.5% sequentially. We remain committed to our growth oriented business plan, while proactively managing expenses. We have strengthened our team of seasoned lenders and look forward to their growing contributions in the coming quarters.”

Net income for the 2015 third quarter was $2.0 million, or $0.96 per diluted share, compared to net income for the 2014 third quarter of $1.9 million, or $0.93 per diluted share. Net income for the nine months ended September 30, 2015 was $5.1 million, or $2.47 per diluted share, compared to net income for the nine months ended September 30, 2014 of $5.3 million, or $2.59 per diluted share.

Annualized returns on average equity (“ROE”) and average assets (“ROA”) for the 2015 third quarter were 12.67% and 1.10%, respectively, compared with 13.55% and 1.13% for the 2014 third quarter. ROE and ROA were 10.83% and 0.97%, respectively, for the 2015 nine month period, compared with 12.74% and 1.06% for the same period last year.

Mr. Caldwell continued: “Over the past two years we have been communicating an investment strategy focused on building Middlefield’s brand within and around our communities. Highlights of this plan include enhancements made in the way customers interact with the bank and an expansion into secondary mortgage products, which has improved noninterest income by 10.2% through the first nine-months of 2015. The new loan production office in Mentor, Ohio increased our geographic footprint to Lake County and we expect this office to quickly contribute to higher loan growth, especially to commercial customers. Finally, we have also made investments throughout the year to create value for our shareholders, which includes increasing our quarterly dividend payment and the recent repurchase of nearly 10% of Middlefield’s common stock outstanding. As we enter the fourth quarter, our outlook is encouraging and is resulting from the strength in our core geographic markets, enhancements we have made to our product and service offerings, and growth in our financial results.”

Income Statement

Net interest income for the 2015 third quarter increased 4.7% to $6.2 million, compared to $5.9 million for the 2014 third quarter. For the 2015 nine month period, net interest income increased 3.8% to $18.4 million, compared to nearly $17.8 million for the same period last year. The net interest margin for the 2015 third quarter was 3.80%, compared to 3.99% for the same period of 2014. Year-to-date, the net interest margin was 3.88%, compared to 4.08% for the same period last year.

Noninterest income, compared to the same period last year, was up 11.9% for both the 2015 third quarter and year-to-date. The improvement to noninterest income in the 2015 third quarter, as well as the nine month period was primarily a result of higher investment gains, earnings on bank-owned life insurance, and gains on sale of loans.

Noninterest expense for the 2015 third quarter was $4.7 million, an increase of 6.5% from $4.4 million for the 2014 third quarter. Year-to-date, noninterest expense increased 11.2% to $14.7 million, compared to $13.2 million for the same period last year.

“Our asset quality remains strong, as we have grown assets and increased our loan portfolio,” said Donald L. Stacy, Chief Financial Officer. “Nonperforming assets for the 2015 third quarter declined 17.0% to $10.9 million, from $13.2 million in the prior year period. We are balancing loan growth with strict underwriting standards to manage risk. As a result, our allowance for loan and lease losses continues to decline, and represented 1.24% of total loans as September 30, 2015. From a capital perspective, Middlefield remains well capitalized as our Tier 1 capital to average asset ratio improved 16 basis points to 9.66% at the end of the 2015 third quarter. At September 30, 2015, the bank had $23.3 million in cash and cash equivalents on our balance sheet, and our net loans to total deposits were 80.4%. As a result of our excellent liquidity, capital position, and belief that our stock represents a compelling value, on October 5, 2015, we repurchased 196,635 shares, or 9.5% of Middlefield Banc Corp. common stock outstanding at $34.50 per share for a total cost of $6.8 million.”

Balance Sheet

Total assets at September 30, 2015 increased 4.9% to a record $710.6 million, from $677.5 million at December 31, 2014. Net loans at September 30, 2015 were $503.9 million, compared to $463.7 million at December 31, 2014. The 8.7% year-to-date improvement in net loans was a result of loan growth in both residential and commercial mortgages, which have increased 14.4% and 18.3%, respectively year-to-date. This was offset by a 12.5% reduction in commercial and industrial loans, and a 42.0% decline in construction loans.

Total deposits at September 30, 2015 increased 6.9% to $626.5 million from $586.1 million at December 31, 2014. The investment portfolio, which is entirely classified as available for sale, stood at $145.1 million at September 30, 2015, compared to $154.3 million at December 31, 2014.

Stockholders’ Equity and Dividends

Tangible stockholders’ equity increased 10.1% to $62.6 million for the 2015 third quarter, compared to $56.8 million at September 30, 2014. On a per share basis, tangible stockholders’ equity increased 9.0% to $30.23 at September 30, 2015 from $27.74 at September 30, 2014. The increase is the result of a higher level of retained earnings and accumulated other comprehensive income, which was offset by cash dividends paid to shareholders.

At September 30, 2015, the company had a Tier 1 leverage ratio of 9.66% up from 9.50%, at September 30, 2014, and 9.56% at June 30, 2015.

During the 2015 third quarter, the company paid a cash dividend of $0.27 per share, which is 3.8% higher than the amount paid in the 2014 third quarter. Year-to-date, the company has paid cash dividends of $0.80 per share, which is a 2.6% increase over the same period last year.

Asset Quality

The provision for loan losses for the 2015 third quarter was $105,000 compared to $70,000 for the 2014 third quarter. Year-to-date, the provision for loan losses was $210,000, compared to $370,000 for the same period last year. Nonperforming assets at September 30, 2015 were $10.9 million, compared with $13.2 million for the same period last year. Net charge-offs for the 2015 third quarter was $131,000, or 0.10% of average loans, annualized, compared to a reversal of $89,000 for the same period last year. Year-to-date net charge-offs were $736,000, or 0.20% of average loans, annualized, compared to $128,000, or 0.04% of average loans, annualized for the same period last year. The allowance for loan losses at September 30, 2015 was $6.3 million, or 1.24% of total loans, compared with $7.3 million, or 1.56% of total loans at September 30, 2014.

The following table provides a summary of asset quality and reserve coverage ratios.

Asset Quality History

(dollars in thousands)

	9/30/2015			9/30/2014			12/31/2014			12/31/2013			12/31/2012
Nonperforming loans	$	8,921		$	10,497		$	9,048		$	12,290		$	14,224
Real estate owned	$	2,006		$	2,674		$	2,590		$	2,698		$	1,846
Nonperforming assets	$	10,927		$	13,171		$	11,638		$	14,988		$	16,070
Allowance for loan losses	$	6,320		$	7,288		$	6,846		$	7,046		$	7,779
Ratios:
Nonperforming loans to total loans		1.75	%		2.24	%		1.92	%		2.82	%		3.48	%
Nonperforming assets to total assets		1.54	%		1.94	%		1.72	%		2.32	%		2.40	%
Allowance for loan losses to total loans		1.24	%		1.56	%		1.45	%		1.62	%		1.90	%
Allowance for loan losses to nonperforming loans		70.84	%		69.43	%		75.66	%		57.33	%		54.69	%

Middlefield Banc Corp., headquartered in Middlefield, Ohio, is a bank holding company with total assets of $710.6 million at September 30, 2015. The bank operates 10 full service banking centers and an LPL Financial^® brokerage office serving Chardon, Cortland, Dublin, Garrettsville, Mantua, Middlefield, Newbury, Orwell, and Westerville. The Bank also operates a Loan Production Office in Mentor, Ohio. Additional information is available atwww.middlefieldbank.com.

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

September 30, 2015 and 2014 and December 31, 2014

	September 30,			December 31,			September 30,
Balance Sheet (period end)	2015			2014			2014
(Dollar amounts in thousands)	(unaudited)						(unaudited)
Assets
Cash and due from banks	$	19,189		$	20,846		$	21,486
Federal funds sold		4,106			4,793			7,816
Cash and cash equivalents		23,295			25,639			29,302
Investment securities available for sale		145,146			154,334			156,021
Loans held for sale		620			438			201
Loans:		510,232			470,584			468,007
Less: reserve for loan losses		6,320			6,846			7,288
Net loans		503,912			463,738			460,719
Premises and equipment		9,892			9,980			9,916
Goodwill		4,559			4,559			4,559
Core deposit intangible		86			116			126
Bank-owned life insurance		13,354			9,092			9,022
Other real estate owned		2,006			2,590			2,674
Accrued interest receivable and other assets		7,727			7,045			7,722
Total Assets	$	710,597			677,531			680,262
	September 30,			December 31,			September 30,
	2015			2014			2014
Liabilities and Stockholders’ Equity
Non-interest bearing demand deposits	$	117,038		$	105,512		$	105,788
Interest bearing demand deposits		64,807			56,377			62,958
Money market accounts		77,811			75,895			76,157
Savings deposits		179,528			178,470			177,408
Time deposits		187,364			169,858			177,709
Total Deposits		626,548			586,112			600,020
Short-term borrowings		4,047			14,808			5,131
Other borrowings		10,300			10,624			11,105
Other liabilities		2,486			2,120			2,491
Total Liabilities		643,381			613,664			618,747
Common equity		36,039			35,529			35,455
Retained earnings		35,994			32,524			31,169
Accumulated other comprehensive income		1,917			2,548			1,625
Treasury stock		(6,734	)		(6,734	)		(6,734	)
Total Stockholders’ Equity		67,216			63,867			61,515
Total Liabilities and Stockholders’ Equity	$	710,597		$	677,531		$	680,262

MIDDLEFIELD BANC CORP.

Consolidated Selected Financial Highlights

September 30, 2015 and 2014

(Dollar amounts in thousands)

(unaudited)

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
INTEREST INCOME
Interest and fees on loans	$	5,971	$	5,646	$	17,656	$	16,915
Interest-bearing deposits in other institutions		6		5		26		19
Federal funds sold		4		2		12		11
Investment securities
Taxable interest		341		441		1,115		1,476
Tax-exempt interest		809		798		2,373		2,336
Dividends on stock		20		19		70		62
Total interest income		7,151		6,911		21,252		20,819
INTEREST EXPENSE
Deposits		876		898		2,581		2,767
Short term borrowings		30		38		100		111
Other borrowings		20		30		66		94
Trust preferred securities		33		33		85		93
Total interest expense		959		999		2,832		3,065
NET INTEREST INCOME		6,192		5,912		18,420		17,754
Provision for loan losses		105		70		210		370
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		6,087		5,842		18,210		17,384
NONINTEREST INCOME
Service charges on deposits		471		489		1,382		1,399
Investment securities gains, net		211		190		257		248
Earnings on bank-owned life insurance		101		71		262		206
Gains on sale of loans		113		20		286		20
Other income		212		220		679		689
Total non-interest income		1,108		990		2,866		2,562
NONINTEREST EXPENSE
Salaries and employee benefits		2,285		2,144		7,205		6,428
Occupancy expense		305		272		945		868
Equipment expense		249		296		706		710
Data processing costs		287		251		798		689
Ohio state franchise tax		75		93		225		269
Federal deposit insurance expense		120		132		352		361
Professional fees		229		189		825		814
Loss on sale of other real estate owned		24		49		72		119
Advertising expense		195		120		586		367
Other real estate expense		116		91		449		256
Directors Fees		98		99		343		303
Other operating expense		686		649		2,191		2,028
Total non-interest expense		4,669		4,385		14,697		13,212
Income before income taxes		2,526		2,447		6,379		6,734
Provision for income taxes		544		529		1,264		1,442
NET INCOME	$	1,982	$	1,918	$	5,115	$	5,292

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
Per common share data	2015			2014			2015			2014
Net income per common share - basic	$	0.96		$	0.94		$	2.49		$	2.60
Net income per common share - diluted	$	0.96		$	0.93		$	2.47		$	2.59
Dividends declared	$	0.27		$	0.26		$	0.80		$	0.78
Book value per share (period end)	$	32.48		$	30.02		$	32.48		$	30.02
Tangible book value per share (period end)	$	30.23		$	27.74		$	30.23		$	27.74
Dividend payout ratio		28.15	%		27.58	%		32.16	%		30.01	%
Average shares outstanding - basic		2,064,054			2,044,124			2,058,938			2,038,972
Average shares outstanding - diluted		2,072,639			2,052,012			2,068,192			2,045,660
Period ending shares outstanding		2,069,510			2,048,807			2,069,510			2,048,807
Selected ratios
Return on average assets		1.10	%		1.13	%		0.97	%		1.06	%
Return on average equity		12.67	%		13.55	%		10.83	%		12.74	%
Yield on earning assets		4.35	%		4.62	%		4.44	%		4.73	%
Cost of interest bearing liabilities		0.71	%		0.78	%		0.72	%		0.80	%
Net interest spread		3.64	%		3.84	%		3.72	%		3.94	%
Net interest margin		3.80	%		3.99	%		3.88	%		4.08	%
Efficiency		60.51	%		59.96	%		65.30	%		61.40	%
Tier 1 capital to average assets		9.66	%		9.50	%		9.66	%		9.50	%

		September 30,			September 30,
		2015			2014
Commercial and industrial		$	53,154		$	58,874
Real estate - construction			17,576			29,287
Real estate - mortgage:
Residential			260,291			224,223
Commercial			174,336			149,488
Consumer installment			4,875			6,135
	��
			510,232			468,007
		September 30,			September 30,
Asset quality data		2015			2014
(Dollar amounts in thousands)
Non-accrual loans		$	6,416		$	8,885
Troubled debt restructuring			2,456			1,587
90 day past due and accruing			49			25
Nonperforming loans			8,921			10,497
Other real estate owned			2,006			2,674
Nonperforming assets		$	10,927		$	13,171
Allowance for loan and lease losses		$	6,320		$	7,288
Allowance for loan and lease losses/total loans			1.24	%		1.56	%
Net charge-offs:
Quarter-to-date			131			(89	)
Year-to-date			736			128
Net charge-offs to average loans, annualized
Quarter-to-date			0.10	%		(0.08	%)
Year-to-date			0.20	%		0.04	%
Nonperforming loans/total loans			1.75	%		2.24	%
Allowance for loan and lease losses/nonperforming loans			70.84	%		69.43	%