Middlefield Banc (MBCN) 8-K Middlefield Banc Corp. Reports 2018 First Half Financial Results

Exhibit 99

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 2018 First Half Financial Results

MIDDLEFIELD, OHIO, July 19, 2018 ◆◆◆◆ Middlefield Banc Corp. (NASDAQ: MBCN) today reported financial results for the 2018 first half and second quarter ended June 30, 2018.

2018 First Half Financial Highlights versus 2017 First Half (unless noted):

• Net income was up 23.8% to $5.7 million

• Earnings per diluted share increased 9.3% to $1.76 per share, despite a 13.5% increase in the average number of diluted shares outstanding

• For the 2018 second quarter, return on average equity was 10.08%, compared to 9.34% for the quarter ended June 30, 2017

• For the 2018 second quarter, return on average tangible common equity⁽¹⁾ was 11.77%, compared to 11.30% for the quarter ended June 30, 2017

• Book value per share was up 4.0% to $37.95 per share

• Tangible book value⁽¹⁾ per share was up 5.6% to $32.49 per share

• Total net loans increased 8.7% to $936.2 million

• Total interest income improved 14.1% to $24.1 million

• Noninterest expense was up only 3.1%

• Equity to assets remains strong at 10.52%

“Record profitability helped increase our return on average equity (“ROAE”) to over 10% during the second quarter, after several capital raises and the Liberty acquisition temporarily reduced our ROAE to the high single digits,” stated Thomas G. Caldwell, President and Chief Executive Officer. “During the quarter, we had approximately $38 million of loans payoff, which included a $6 million loan that was previously classified as a troubled debt restructuring (“TDR”). In spite of this impact, our loan portfolio has increased nearly 9% compared to the same period a year ago. Our pipeline of potential new loans remains robust, but we have started to see other lenders within our markets become more aggressive on pricing and less restrictive on covenants and standards. It is important to note that Middlefield will remain focused on our lending standards by appropriately managing credit risk and controlling growth.”

“As we enter the second half of the year, we are excited by our opportunities to grow our franchise and create further value for our shareholders. I am encouraged by positive economic trends throughout both of our regions and recent announcements of significant new development projects close to our Central Ohio offices. During the third quarter we anticipate the grand opening of our Powell location. Our Central Ohio branch strategy is well positioned to capitalize on this fast growing and compelling region,” Mr. Caldwell concluded.

Income Statement

For the 2018 first half, net interest income increased 9.5% to $19.7 million, compared to $18.0 million for the same period last year.Year-to-date, the net interest margin was 3.79%, compared to 3.82% for the same period last year. Net interest income for the 2018 second quarter was $9.8 million, compared to $9.3 million for the 2017 second quarter. The 6.1% increase in net interest income for the 2018 second quarter was largely a result of a 13.3% increase in interest and fees on loans. The net interest margin for the 2018 second quarter was 3.76%, compared to 3.80% for the same period of 2017.

For the 2018 first half, noninterest income was $1.8 million, compared to $2.5 million for the same period last year. Noninterest income for the 2018 second quarter was $1.0 million, compared to just under $1.0 million for the same period last year.

For the 2018 first half, noninterest expense increased 3.1% to $14.4 million, compared to $14.0 million for the same period last year. Operating costs in the 2018 second quarter increased 5.4% to $7.1 million from $6.7 million for the 2017 second quarter. Noninterest expense for the 2017 first half included $694,000 of additionalone-time operating expenses as a result of the Liberty acquisition.

“Asset quality improved during the second quarter due to a significant decrease in nonperforming loans as a result of a payoff of a TDR classified loan and a reduction in nonaccrual loans,” said Donald L. Stacy, Chief Financial Officer. “As a result, our nonperforming loans to total loans was 1.21%, which is the lowest level in five quarters. Competition for deposits remains elevated and we are working on strategies to bring inlow-cost deposits while reducing short-term borrowings. I am pleased with the 20.7% increase in noninterest-bearing deposits over the past 12 months. Ourloan-to-deposit ratio was 101.2% at June 30, 2018, compared to 102.5% at June 30, 2017, and 98.7% at March 31, 2018, while ournet-loan-to-asset ratio was 80.3% at June 30, 2018, compared to 80.4% at June 30, 2017, and 83.6% at March 31, 2018. We continue to believe we will improve operating leverage and funding costs throughout the remainder of the year, which should translate in continued earnings growth and improved profitability.”

Balance Sheet

Total assets at June 30, 2018, increased 8.9% to approximately $1.2 billion from $1.1 billion at June 30, 2017. Net loans at June 30, 2018, were $936.2 million, compared to $861.3 million at June 30, 2017, and $916.0 million at December 31, 2017. The 8.7% year-over-year improvement in net loans was across almost all loan categories and was primarily a result of a 12.4% increase in commercial mortgage loans, a 4.0% increase in residential mortgage loans, a 5.0% increase in commercial and industrial loans, a 28.3% increase in real estate construction loans, partially offset by a 9.0% decline in consumer installment loans.

Total deposits at June 30, 2018, was $932.2 million, compared to $846.8 million at June 30, 2017. The 10.1% increase in deposits was a result of higher noninterest-bearing demand, savings, and time deposits, offset by lower money market deposits. The investment portfolio, which is entirely classified as available for sale, was $100.0 million June 30, 2018, compared with $105.0 million at June 30, 2017.

Stockholders’ Equity and Dividends

At the end of the 2018 second quarter, shareholders’ equity increased 4.7% to $122.7 million compared to $117.2 million at June 30, 2017. On a per share basis, shareholders’ equity at June 30, 2018, was $37.95 compared to $36.49 at the same period last year. Tangible stockholders’ equity⁽¹⁾ increased 6.3% to $105.1 million for the 2018 second quarter, compared to $98.8 million at June 30, 2017. On aper-share basis, tangible stockholders’ equity⁽¹⁾ was $32.49 at June 30, 2018, compared to $30.77 at June 30, 2017.

Through the first six months of 2018, the company declared cash dividends of $0.61 per share, compared to $0.54 per share for the same period last year. The dividend payout ratio for the 2018six-month period was 34.5% compared to 35.2% for the same period last year.

At June 30, 2018, the company had an equity to assets leverage ratio of 10.52%, compared to 10.94% at June 30, 2017.

Asset Quality

The provision for loan losses for the 2018 second quarter was $210,000 versus $170,000 for the same period last year. Nonperforming assets at June 30, 2018, were $11.6 million, compared to $17.1 million at June 30, 2017. Net charge-offs for the 2018 second quarter were $259,000, or 0.11% of average loans, annualized, compared to $285,000, or 0.13% of average loans, annualized at June 30, 2017.

Year-to-date net charge-offs were $108,000, or 0.02% of average loans, annualized compared to $328,000, or 0.08% of average loans, annualized for the same period last year. The allowance for loan losses at June 30, 2018, stood at $7.5 million, or 0.79% of total loans, compared to $6.6 million or 0.76% of total loans at June 30, 2017.

Middlefield Banc Corp., headquartered in Middlefield, Ohio, is the bank holding company of The Middlefield Banking Company with total assets of $1.2 billion at June 30, 2018. The bank operates 14 full-service banking centers and an LPL Financial^® brokerage office serving Beachwood, Chardon, Cortland, Dublin, Garrettsville, Mantua, Middlefield, Newbury, Orwell, Solon, Sunbury, Twinsburg, and Westerville. The Bank also operates a Loan Production Office in Mentor, Ohio. Additional information is available atwww.middlefieldbank.bank.

⁽¹⁾This press release includes disclosure of Middlefield Banc Corp.’s tangible book value per share and return on average tangible equity, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). Anon-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 thesenon-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 ofnon-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) 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)

Balance Sheets (period end)	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
ASSETS
Cash and due from banks	$	42,451		$	33,258		$	39,886		$	47,731		$	37,971
Federal funds sold		28,795			—			—			1,200			1,600
Cash and cash equivalents		71,246			33,258			39,886			48,931			39,571
Equity securities, at fair value		656			643			—			—			—
Investment securities available for sale, at fair value		100,028			91,262			95,283			98,334			104,951
Loans held for sale		1,132			937			463			5,930			9,791
Loans		943,674			932,374			923,213			878,541			867,864
Less allowance for loan and lease losses		7,502			7,551			7,190			6,852			6,605
Net loans		936,172			924,823			916,023			871,689			861,259
Premises and equipment, net		12,978			12,225			11,853			11,768			11,511
Goodwill		15,071			15,071			15,071			15,299			15,435
Core deposit intangibles		2,571			2,658			2,749			2,848			2,948
Bank-owned life insurance		15,862			15,764			15,652			15,542			15,432
Other real estate owned		181			212			212			557			650
Accrued interest receivable and other assets		10,182			9,911			9,144			9,928			9,528
TOTAL ASSETS	$	1,166,079		$	1,106,764		$	1,106,336		$	1,080,826		$	1,071,076
	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
LIABILITIES
Deposits:
Noninterest-bearing demand	$	207,791		$	194,203		$	192,438		$	181,550		$	172,199
Interest-bearing demand		92,116			96,659			83,990			91,184			87,084
Money market		137,572			149,359			150,277			161,101			160,858
Savings		204,408			221,851			208,502			212,371			181,259
Time		290,359			282,501			242,987			251,449			245,383
Total deposits		932,246			944,573			878,194			897,655			846,783
Short-term borrowings		87,833			18,671			74,707			20,274			63,388
Other borrowings		18,996			19,028			29,065			39,273			39,346
Accrued interest payable and other liabilities		4,288			4,340			4,507			5,130			4,357
TOTAL LIABILITIES		1,043,363			986,612			986,473			962,332			953,874
STOCKHOLDERS’ EQUITY
Common equity		85,544			85,116			84,859			84,722			84,587
Retained earnings		51,121			48,927			47,431			45,913			44,318
Accumulated other comprehensive (loss) income		(431	)		(373	)		1,091			1,377			1,815
Treasury stock		(13,518	)		(13,518	)		(13,518	)		(13,518	)		(13,518	)
TOTAL STOCKHOLDERS’ EQUITY		122,716			120,152			119,863			118,494			117,202
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,166,079		$	1,106,764		$	1,106,336		$	1,080,826		$	1,071,076

MIDDLEFIELD BANC CORP.

Consolidated Selected Financial Highlights

(Dollar amounts in thousands)

	For the Three Months Ended										For the Six Months Ended
Statements of Income	June 30, 2018		March 31, 2018		December 31, 2017		September 30, 2017		June 30, 2017		June 30, 2018		June 30, 2017
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	11,234	$	11,054	$	10,696	$	10,443	$	9,916	$	22,288	$	19,096
Interest-bearing deposits in other institutions		115		119		80		107		92		234		141
Federal funds sold		7		14		6		5		1		21		4
Investment securities:
Taxable interest		170		169		162		159		223		339		441
Tax-exempt interest		550		525		560		579		630		1,075		1,267
Dividends on stock		53		59		60		37		40		112		152
Total interest and dividend income		12,129		11,940		11,564		11,330		10,902		24,069		21,101
INTEREST EXPENSE
Deposits		1,973		1,640		1,530		1,468		1,227		3,613		2,352
Short-term borrowings		192		276		101		202		273		468		450
Other borrowings		118		122		131		148		125		240		265
Total interest expense		2,283		2,038		1,762		1,818		1,625		4,321		3,067
NET INTEREST INCOME		9,846		9,902		9,802		9,512		9,277		19,748		18,034
Provision for loan losses		210		210		430		280		170		420		335
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		9,636		9,692		9,372		9,232		9,107		19,328		17,699
NONINTEREST INCOME
Service charges on deposit accounts		472		453		478		479		449		925		918
Investment securities gains on sale, net		—		—		—		398		—		—		488
Gain on equity securities		13		18		—		—		—		31		—
Earnings on bank-owned life insurance		98		112		115		109		98		210		207
Gains on sale of loans		117		4		106		255		231		121		465
Other income		305		199		219		200		211		504		422
Total noninterest income		1,005		786		918		1,441		989		1,791		2,500
NONINTEREST EXPENSE
Salaries and employee benefits		3,866		3,979		3,134		3,725		3,203		7,845		6,899
Occupancy expense		472		536		449		476		433		1,008		921
Equipment expense		201		233		261		242		266		434		547
Data processing costs		402		477		416		468		588		879		908
Ohio state franchise tax		244		115		186		186		186		359		372
Federal deposit insurance expense		150		150		165		165		135		300		203
Professional fees		327		445		522		434		423		772		796
Advertising expense		230		228		161		248		164		458		412
Software amortization expense		155		150		134		118		80		305		162
Core deposit intangible amortization		87		91		98		101		103		178		175
Merger expense		—		—		28		338		307		—		694
Other expense		929		941		663		796		816		1,870		1,882
Total noninterest expense		7,063		7,345		6,217		7,297		6,704		14,408		13,971
Income before income taxes		3,578		3,133		4,073		3,376		3,392		6,711		6,228
Income taxes		481		528		1,687		914		885		1,009		1,621
NET INCOME	$	3,097	$	2,605	$	2,386	$	2,462	$	2,507	$	5,702	$	4,607

MIDDLEFIELD BANC CORP.

Consolidated Selected Financial Highlights

(Dollar amounts in thousands, except per share and share amounts)

	For the Three Months Ended															For the Six Months Ended
	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			June 30, 2018			June 30, 2017
Per common share data
Net income per common share – basic	$	0.96		$	0.81		$	0.73		$	0.77		$	0.84		$	1.77		$	1.62
Net income per common share – diluted	$	0.96		$	0.80		$	0.73		$	0.76		$	0.83		$	1.76		$	1.61
Dividends declared per share	$	0.28		$	0.33		$	0.27		$	0.27		$	0.27		$	0.61		$	0.54
Book value per share (period end)	$	37.95		$	37.28		$	37.25		$	36.86		$	36.49		$	37.95		$	36.49
Tangible book value per share (period end) (2) (3)	$	32.49		$	31.78		$	31.71		$	31.21		$	30.77		$	32.49		$	30.77
Dividends declared	$	903		$	1,063		$	868		$	867		$	867		$	1,966		$	1,623
Dividend yield		2.21	%		2.69	%		2.24	%		2.34	%		2.14	%		2.43	%		2.16	%
Dividend payout ratio		29.16	%		40.81	%		36.38	%		35.22	%		34.58	%		34.48	%		35.23	%
Average shares outstanding – basic		3,225,726			3,220,262			3,215,300			3,212,335			3,000,451			3,223,009			2,841,019
Average shares outstanding – diluted		3,240,329			3,238,069			3,231,791			3,223,753			3,014,140			3,238,236			2,854,158
Period ending shares outstanding		3,233,678			3,222,984			3,217,716			3,214,737			3,211,748			3,233,678			3,211,748
Selected ratios
Return on average assets		1.11	%		0.94	%		0.86	%		0.90	%		0.94	%		1.03	%		0.89	%
Return on average equity		10.08	%		8.73	%		7.72	%		8.12	%		9.34	%		9.42	%		9.05	%
Return on average tangible common equity (2) (4)		11.77	%		10.23	%		9.05	%		9.57	%		11.30	%		11.02	%		10.91	%
Yield on earning assets		4.61	%		4.57	%		4.51	%		4.52	%		4.45	%		4.60	%		4.45	%
Cost of interest bearing liabilities		1.16	%		1.03	%		0.89	%		0.92	%		0.83	%		1.10	%		0.80	%
Net interest spread		3.45	%		3.54	%		3.62	%		3.60	%		3.62	%		3.50	%		3.65	%
Net interest margin		3.76	%		3.82	%		3.84	%		3.81	%		3.80	%		3.79	%		3.82	%
Efficiency (1)		63.43	%		67.00	%		55.58	%		63.96	%		63.30	%		65.20	%		65.94	%
Equity to assets at period end		10.52	%		10.86	%		10.83	%		10.96	%		10.94	%		10.52	%		10.94	%

(1) The efficiency ratio is calculated by dividingnon-interest expense less amortization of intangibles by the sum of net interest income on a fully taxable equivalent basis plusnon-interest income

(2) See reconciliation ofnon-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

	For the Three Months Ended
End of Period Loan Balances	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Commercial and industrial	$	101,975		$	99,809		$	101,346		$	99,314		$	97,160
Real estate – construction		45,647			48,687			47,017			40,760			35,571
Real estate – mortgage:
Residential		320,858			316,856			318,157			316,191			308,519
Commercial		457,050			448,766			437,947			403,135			406,670
Consumer installment		18,144			18,256			18,746			19,141			19,944
Total	$	943,674		$	932,374		$	923,213		$	878,541		$	867,864
Asset quality data	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
(Dollar amounts in thousands)
Non-accrual loans	$	8,357		$	8,747		$	8,433		$	8,525		$	10,213
Troubled debt restructuring		3,051			9,071			4,982			5,608			5,990
90 day past due and accruing		15			—			—			268			199
Nonperforming loans		11,423			17,818			13,415			14,401			16,402
Other real estate owned		181			212			212			557			650
Nonperforming assets	$	11,604		$	18,030		$	13,627		$	14,958		$	17,052
Allowance for loan losses	$	7,502		$	7,551		$	7,190		$	6,852		$	6,605
Allowance for loan losses/total loans		0.79	%		0.81	%		0.78	%		0.78	%		0.76	%
Net charge-offs (recoveries):
Quarter-to-date	$	259		$	(151	)	$	92		$	33		$	285
Year-to-date		108			(151	)		453			361			328
Net charge-offs (recoveries) to average loans, annualized:
Quarter-to-date		0.11	%		(-0.06	)%		0.04	%		0.02	%		0.13	%
Year-to-date		0.02	%		(-0.06	)%		0.05	%		0.06	%		0.08	%
Nonperforming loans/total loans		1.21	%		1.91	%		1.45	%		1.64	%		1.89	%
Allowance for loan losses/nonperforming loans		65.67	%		42.38	%		53.60	%		47.58	%		40.27	%
Nonperforming assets/total assets		1.00	%		1.63	%		1.23	%		1.38	%		1.59	%

Reconciliation of Common Stockholders’ Equity to Tangible Common Equity	For the Three Months Ended										For the Six Months Ended
(Dollar amounts in thousands)	June 30, 2018		March 31, 2018		December 31, 2017		September 30, 2017		June 30, 2017		June 30, 2018		June 30, 2017
Stockholders’ Equity	$	122,716	$	120,152	$	119,863	$	118,494	$	117,202	$	122,716	$	117,202
Less Goodwill and other intangibles		17,642		17,729		17,820		18,147		18,383		17,642		18,383
Tangible Common Equity	$	105,074	$	102,423	$	102,043	$	100,347	$	98,819	$	105,074	$	98,819
Average Stockholders’ Equity	$	123,228	$	121,001	$	122,586	$	120,310	$	107,615	$	122,115	$	102,675
Less Average Goodwill and other intangibles		17,683		17,773		17,987		18,251		18,633		17,728		17,518
Average Tangible Common Equity	$	105,545	$	103,228	$	104,599	$	102,059	$	88,982	$	104,387	$	85,157