Exhibit 99.1

Dear Shareholder:

         We are pleased to send you this prospectus describing our Dividend
Reinvestment Plan. Through the Plan, you may purchase additional shares of
Middlefield Banc Corp. common stock using cash dividends that you receive on
your shares of common stock. You may also make optional cash payments under the
Plan, which will also be invested in Middlefield Banc Corp. common stock. We
reserve the right to suspend, modify, or terminate the Plan at any time.

         Participants in the Plan have the following benefits--

         -        you will pay no service charges or brokerage commissions for
                  shares purchased on your behalf under the Plan

         -        your dollars will be invested in full and fractional shares to
                  three decimal places

         -        dividends are credited to your account on both full and
                  fractional shares

         -        your dividends will be invested quarterly and cash payments
                  will be invested monthly

         -        your recordkeeping will be simplified because you will receive
                  a statement each time there is activity in your account

         -        the shares of Middlefield Banc Corp. common stock purchased on
                  your behalf under the Plan will be held in safekeeping until
                  termination of your participation in the Plan, or until you
                  request that a certificate be issued to you

         -        you may terminate your participation in the Plan at any time

         The prospectus provides complete details of the Plan in simple question
and answer form. We recommend that you review the description of the Plan
carefully and that you retain this prospectus for future reference.

         If you wish to enroll in the Plan, simply complete the enclosed
Authorization Card and return it in the enclosed postage-paid envelope. You may
enroll for partial dividend reinvestment, for full dividend reinvestment, or for
optional cash payments only. If you do not participate in the Plan, you will
continue to receive checks for your dividends as they are declared and paid.
Middlefield Banc Corp. reserves the right to refuse to register or qualify its
common stock or the offer or sale of the common stock in any state or
jurisdiction if, in Middlefield Banc Corp.'s sole judgment, the burden or costs
of such registration or qualification are excessive. You will not be eligible to
participate in the Plan if you reside in a state or jurisdiction in which it is
unlawful for Middlefield Banc Corp. to permit your participation. The
accompanying prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any securities in any jurisdiction or to any person in which
or to whom it is unlawful to make such offer or solicitation.

                                            Sincerely,



                                            Thomas G. Caldwell
                                            President & Chief Executive Officer