8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

July 24, 2007
(Date of Report: Date of earliest event reported)

Middlefield Banc Corp.

(Exact name of registrant as specified in its charter)

Ohio
(State or other jurisdiction of incorporation)

000-32561
(Commission File Number)

34-1585111
(I.R.S. Employer Identification Number)

15985 East High Street
Middlefield, Ohio 44062
(Address of principal executive offices, including zip code)

(440) 632-1666
(Registrant’s telephone number, including area code)

(not applicable)
(Former name or former address, if changed since last report)

ITEM 2.02   RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     The following information is furnished under Item 2.02. On July 24, 2007, Middlefield Banc Corp. issued a press release announcing financial results for the second quarter and six months ended June 30, 2007. A copy of the press release is attached hereto as Exhibit 99 and is incorporated herein by this reference.

     The information contained or incorporated by reference in this current report on Form 8-K may contain forward-looking statements, including certain plans, expectations, goals, and projections, which are subject to numerous assumptions, risks, and uncertainties. Actual results could differ materially from those contained or implied by such statements for a variety of factors, including: changes in economic conditions; movements in interest rates; competitive pressures on product pricing and services; success and timing of business strategies; the nature, extent, and timing of governmental actions and reforms; and extended disruption of vital infrastructure. All forward-looking statements included in this current report on Form 8-K are based on information available at the time of the report. Middlefield Banc Corp. assumes no obligation to update any forward-looking statement.

ITEM 9.01   FINANCIAL STATEMENTS AND EXHIBITS

     (c)  Exhibits.

The following exhibits are furnished herewith:

EXHIBITS

     (99) July 24, 2007 press release of Middlefield Banc Corp.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MIDDLEFIELD BANC CORP.
Date: July 25, 2007	/s/ James R. Heslop, II,
	Executive Vice President and COO

EX-99

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 Second Quarter 2007 Earnings

MIDDLEFIELD, OHIO, July 24, 2007 ¨ ¨ ¨ ¨ Middlefield Banc Corp. (Pink Sheets: MBCN) today reported that net income for the second quarter of 2007 totaled $899,231, or 9.0 percent less than the $987,800 reported for the same period in 2006. Diluted earnings per share for the second quarter of 2007 were $0.59, a 14.5% decrease from 2006’s second quarter diluted earnings per share of $0.69. These second quarter results include the operations of Emerald Bank of Dublin, Ohio, which became a subsidiary of Middlefield on April 19, 2007.

Results from the first half of 2007 reflect a net income of $1,651,606; an 8.5% decrease compared to $1,805,372 for the first half of 2006. Diluted earnings per share for the first half of 2007 were $1.11, or 11.2% less than diluted earnings per share of $1.26 for the first six months of 2006. These figures include Emerald Bank’s operations from April 19, 2007 through June 30, 2007.

Return on average equity for the three months ended June 30, 2007, was 10.55% compared to 14.07% for the same period in 2006. Return on average assets was 0.91% for the three months ended June 30, 2007. Return on average assets was 1.26% for the three months ended June 30, 2006. For the six months ended June 30, 2007, the return on average equity and average assets were 10.21% and 0.89%, respectively. The comparable period results from 2006 were 12.94% and 1.16%.

President and Chief Executive Officer Thomas G. Caldwell commented, “The second quarter 2007 results were mixed. Like many other banks in the industry, and Ohio in particular, slower economic growth and competitive pressure have worked to reduce our net interest margin, which is the primary driver of our revenue.”

Mr. Caldwell continued, “As we reported with our first quarter 2007 results, our net income has also been impacted by anticipated increases in non-interest expenses. Our Newbury banking center and Cortland loan production office continue to be in the start-up phase. Additionally, there was an increase in non-interest expense directly related to the acquisition of Emerald Bank. While these results are disappointing in the short-term, we anticipate the longer term advantages to be gained from these actions, which have broadened the coverage of our market.”

“During the early part of the third quarter, Emerald Bank will be unveiling its new interactive website (www.emeraldbank.com), which will offer a broad array of services not previously available to that customer base. This will also include Internet banking and a bill payment feature. Our anticipation is that these actions will be well received within the market,” Caldwell concluded.

The company’s total assets ended the second quarter of 2007 at $406.4 million, an increase of 19.2% over the $340.9 million in total assets reported at December 31, 2006. Net loans at June 30, 2007, were $299.2 million, up $52.9 million, or 21.5%, over the $246.3 million reported at December 31, 2006. Total deposits at June 30, 2007, were $326.9 million, or 20.6% greater than the deposit level of $271.1 million at December 31, 2006.

Highlights for the second quarter of 2007 include:

• Net interest income was $2.88 million, an increase of 4.5% from the $2.75 million reported for the comparable period of 2006. The net interest margin was 3.31% for the second quarter of 2007, down from the 3.88% reported for the same quarter of 2006. The decline is primarily attributable to higher deposit costs and competitive pricing on lending opportunities associated with the current interest rate environment. Deposit growth at the banks has primarily been in products such as time deposits and money market accounts, which generally carry higher interest costs than other deposit alternatives. The Middlefield subsidiary offered a special money market promotion during the first quarter of 2007, which was tied to the grand opening of the Newbury banking office. Emerald Bank found most of its deposit growth in its Prime Savings Account product, which is positioned at 300 basis points below the Prime Rate.

• Non-interest income increased $54,000 for the three-month period of 2007over the comparable 2006 period. This increase of 9.1% 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. Additionally, earnings on bank-owned life insurance were $27,000 higher during the second quarter of 2007 than the same period of 2006.

• Non-interest expense for the second quarter of 2007 was 22.3%, or $423,000, higher than the second quarter of 2006. Increases in salary and employee benefits of $205,000, occupancy expense of $85,000, and equipment expense of $32,000, were largely attributable to the opening of the Newbury banking office and the Cortland loan production office, as well as the acquisition of Emerald Bank. Non-interest expenses directly attributable to Emerald Bank accounted for $205,000 of the increase in the aggregate. Other associated expense items contributing to the increase were legal, printing, and transfer agent costs, as well as an increase of costs associated with compliance with Section 404 of the Sarbanes-Oxley Act.

• Total deposit growth for the first six months of 2007 was $55.8 million. The acquisition of Emerald Bank accounted for $37.4 million of the change. At the Middlefield banking subsidiary, deposit growth was fueled by promotional efforts directed to the bank’s money market account. Deposits in those accounts increased $11.6 million, while time deposits increased $11.0 million. Net loans at June 30, 2007, stood at $299.2 million, reflecting an increase of $52.9 million for the first six months of 2007. Increases were seen in all loan categories with the exception of installment loans. Of the growth during the six-month period, 79.0%, or $41.8 million is the result of the Emerald Bank acquisition.

• Provision for loan losses was $114,000 for the 2007 six month period, which was in line with the company’s plan. While lower than the $150,000 provision during the first six months of 2006, this amount was in keeping with the company’s intention to reduce the unallocated portion of its loan loss reserve. The provision is maintained at a level to absorb management’s estimate of probable inherent credit losses within the bank’s loan portfolio. At June 30, 2007, the allowance for loan losses as a percentage of total loans was 1.09%, which was down from the 1.23% reported at June 30, 2006. The ratio of non-performing loans to total loans stood at 1.16% at June 30, 2007. This was an increase from the 0.82% reported as of June 30, 2006. Loans classified as non-accrual at June 30, 2007, were $1.69 million, which was $0.1 million less than the total reported at June 30, 2006. Loans past due 90 days and still accruing interest, as of June 30, 2007, were $1.8 million, or $1.7 million more than the prior year figure. One commercial real estate credit, which was well secured and in the process of collection, accounted for $0.8 million of the increase. The majority of the remaining increase in this category was in residential secured real estate loans.

• Stockholders’ equity at June 30, 2007, was $34.5 million, or 8.48% of total assets. Book value as of June 30, 2007 was $22.66. This was an increase of $2.92 over the June 30, 2006 book value.

• In the first six months of 2007, Middlefield paid a cash dividend of $0.48 per share. This represents an increase of 7.1% over the cash dividend paid during the same period of 2006. The 2006 cash dividend amount has been adjusted to reflect the 5% stock dividend paid by the company during the fourth quarter of 2006.

“Our earnings to this point in 2007 are reflective of the overall difficulties being experienced by most of the financial institutions within our market. We also have experienced a higher level of non-interest expenses relative to the acquisition of Emerald Bank, “ commented Donald L. Stacy, Chief Financial Officer and Treasurer of Middlefield Banc Corp. “The continued nature of the yield curve, as well as market pricing, has worked to compress our net interest margin. The additional overhead associated with our expansion is integral to our long-term growth efforts and is, we believe, within reasonable expectations.”

“We are, however, also experiencing what is, for us, a higher than normal level of problem loans. While being well secured, we are expending an increased level of effort to effect full collection. Losses will be above recent historic levels, but should remain well within peer ranges.” Stacy continued.

Middlefield Banc Corp. is a financial holding company headquartered in Middlefield, Ohio. Its subsidiary, The Middlefield Banking Company, operates full service banking centers and a UVEST Financial Services^® brokerage office serving Chardon, Garrettsville, Mantua, Middlefield, Newbury, and Orwell, as well as a loan production office in Cortland, Ohio. On April 19, 2007, Middlefield Banc Corp. completed its acquisition of Emerald Bank, headquartered in Dublin, Ohio. Further information is available at www.middlefieldbank.com.

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 BALANCE SHEET

	June 30,			December 31
	2007			2006
	(unaudited)			(audited)
ASSETS
Cash and due from banks	$	7,590,873		$	6,893,148
Federal funds sold		4,299,341			6,200,000
Interest-bearing deposits in other institutions		559,550			546,454
Cash and cash equivalents		12,449,764			13,639,602
Investment securities available for sale		71,874,997			63,048,135
Investment securities held to maturity (estimated market value of $130,579 and $134,306)		119,899			125,853
Loans		302,528,037			249,190,534
Less allowance for loan losses		3,283,975			2,848,887
Net loans		299,244,062			246,341,647
Premises and equipment		6,910,163			6,742,465
Goodwill		3,224,264			123,175
Bank-owned life insurance		7,012,996			6,872,743
Accrued interest and other assets		5,571,474			3,958,084
TOTAL ASSETS	$	406,407,619		$	340,851,704
LIABILITIES
Deposits:
Noninterest-bearing demand	$	41,348,568		$	41,002,573
Interest-bearing demand		13,128,166			11,724,173
Money market		27,511,193			14,738,767
Savings		73,077,850			54,246,499
Time		171,792,572			149,338,181
Total deposits		326,858,349			271,050,193
Short-term borrowings		5,768,056			1,609,738
Other borrowings		37,225,371			36,112,738
Accrued interest and other liabilities		2,084,045			1,615,101
TOTAL LIABILITIES		371,935,821			310,387,770
STOCKHOLDERS’ EQUITY
Common stock, no par value; 10,000,000 shares authorized, 1,525,324 and 1,519,887 shares issued		23,521,438			19,507,257
Retained earnings		15,644,003			14,685,971
Accumulated other comprehensive income		(1,288,586	)		(520,987	)
Treasury stock, at cost, 100,080 shares in 2007, and 95,080 shares in 2006		(3,405,057	)		(3,208,307	)
TOTAL STOCKHOLDERS’ EQUITY		34,471,798			30,463,934
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	406,407,619		$	340,851,704

MIDDLEFIELD BANC CORP.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)

	Three Months Ended
	June 30,
	2007		2006
INTEREST INCOME
Interest and fees on loans	$	5,315,387	$	4,219,061
Interest-bearing deposits in other institutions		49,724		4,272
Federal funds sold		130,200		5,358
Investment securities:
Taxable interest		254,534		289,841
Tax-exempt interest		459,595		248,440
Dividends on FHLB Stock		26,272		23,341
Total interest income		6,235,712		4,790,313
INTEREST EXPENSE
Deposits		2,869,444		1,677,832
Short term borrowings		20,455		61,827
Other borrowings		469,473		297,890
Total interest expense		3,359,372		2,037,549
NET INTEREST INCOME		2,876,340		2,752,764
Provision for loan losses		69,391		75,000
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		2,806,949		2,677,764
NONINTEREST INCOME
Service charges on deposit accounts		481,055		435,842
Investment securities losses, net		—		—
Earnings on bank-owned life insurance		68,174		59,950
Other income		99,014		98,863
Total noninterest income		648,243		594,655
NONINTEREST EXPENSE
Salaries and employee benefits		1,040,092		835,105
Occupancy expense		198,278		113,544
Equipment expense		132,423		100,473
Data processing costs		163,452		158,279
Ohio state franchise tax		155,343		90,000
Other expense		631,245		600,631
Total noninterest expense		2,320,833		1,898,032
Income before income taxes		1,134,359		1,374,387
Income taxes		235,128		386,587
NET INCOME	$	899,231	$	987,800
EARNINGS PER SHARE
Basic	$	0.60	$	0.70
Diluted		0.59		0.69
DIVIDENDS DECLARED PER SHARE	$	0.240	$	0.224

MIDDLEFIELD BANC CORP.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)

	Six Months Ended
	June 30,
	2007		2006
INTEREST INCOME
Interest and fees on loans	$	9,845,616	$	8,204,679
Interest-bearing deposits in other institutions		105,613		7,393
Federal funds sold		261,435		8,937
Investment securities:
Taxable interest		520,648		595,811
Tax-exempt interest		842,380		493,591
Dividends on FHLB Stock		51,767		40,538
Total interest income		11,627,459		9,350,949
INTEREST EXPENSE
Deposits		5,184,115		3,218,694
Short term borrowings		39,670		122,650
Other borrowings		914,885		570,864
Total interest expense		6,138,670		3,912,208
NET INTEREST INCOME		5,488,789		5,438,741
Provision for loan losses		114,391		150,000
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		5,374,398		5,288,741
NONINTEREST INCOME
Service charges on deposit accounts		933,002		848,684
Investment securities losses, net		—		(5,868	)
Earnings on bank-owned life insurance		140,253		113,172
Other income		196,616		188,993
Total noninterest income		1,269,871		1,144,981
NONINTEREST EXPENSE
Salaries and employee benefits		2,145,000		1,830,049
Occupancy expense		367,508		267,847
Equipment expense		254,214		192,686
Data processing costs		314,700		336,786
Ohio state franchise tax		251,343		180,000
Other expense		1,261,770		1,126,395
Total noninterest expense		4,594,535		3,933,763
Income before income taxes		2,049,734		2,499,959
Income taxes		398,128		694,587
NET INCOME	$	1,651,606	$	1,805,372
EARNINGS PER SHARE
Basic	$	1.13	$	1.28
Diluted		1.11		1.26
DIVIDENDS DECLARED PER SHARE	$	0.480	$	0.448

MIDDLEFIELD BANC CORP.
SELECTED CONSOLIDATED FINANCIAL INFORMATION

	For the Three Months Ended June 30,
	2007			2006
Per share (1)
Earnings per common share — Basic	$	0.60		$	0.70
Earnings per common share — Diluted		0.59			0.69
Cash dividends paid		0.24			0.22
Book value (end of period)		22.66			19.74
Shares Outstanding
Average — Basic		1,503,412			1,418,496
Average — Diluted		1,523,852			1,441,861
Actual (end of period)		1,521,470			1,418,811
Key performance ratios
Return on average assets		0.91	%		1.26	%
Return on average equity		10.55	%		14.07	%
Net interest margin		3.31	%		3.88	%
Yield on earning assets		6.89	%		6.63	%
Efficiency ratio		65.85	%		56.70	%
Net charge-offs to average loans (actual for the period)		0.00	%		0.00	%
Net charge-offs to average loans (annualized)		0.01	%		0.02	%
Total allowance for loan losses to nonperforming loans		93.62	%		149.83	%
Nonperforming loans to total loans		1.16	%		0.82	%
Total allowance for loan losses to total loans		1.09	%		1.23	%
Equity to assets at period end		8.48	%		8.91	%
At period end (in 000s)
Total assets	$	406,408		$	315,149
Total deposits		326,858			254,054
Net loans receivable		299,244			231,214
Securities		71,995			54,588
Shareholders equity		34,472			28,094

(1) Per share data has been restated to reflect the five percent stock dividend paid in 2006.

MIDDLEFIELD BANC CORP.
SUPPLEMENTAL DETAIL

	For the Three Months Ended June 30,
	2007		2006
Charge-offs (000s)
Loan charge-offs	$	12	$	12
Recoveries on loans		2		2
Net loan charge-offs		10		10

	As of June 30,
	2007		2006
Credit Quality (000s):
Non-accrual loans	$	1,691	$	1,833
Restructured loans		0		0
90 day past due and accruing		1,817		138
Non-performing loans		3,508		1,971
Other real estate owned		0		0
Total non-performing assets	$	3,508	$	1,971

MIDDLEFIELD BANC CORP.
SELECTED CONSOLIDATED FINANCIAL INFORMATION

	For the Six Months Ended June 30,
	2007			2006
Per share (1)
Earnings per common share — Basic	$	1.13		$	1.27
Earnings per common share — Diluted		1.11			1.25
Cash dividends paid		0.48			0.45
Book value (end of period)		22.66			19.74
Shares Outstanding
Average — Basic		1,464,975			1,420,620
Average — Diluted		1,485,907			1,443,572
Actual (end of period)		1,521,470			1,418,811
Key performance ratios
Return on average assets		0.89	%		1.16	%
Return on average equity		10.21	%		12.94	%
Net interest margin		3.36	%		3.88	%
Yield on earning assets		6.84	%		6.54	%
Efficiency ratio		67.98	%		59.75	%
Net charge-offs to average loans (actual for the period)		0.04	%		0.02	%
Net charge-offs to average loans (annualized)		0.09	%		0.01	%
Total allowance for loan losses to nonperforming loans		93.62	%		149.83	%

(1) Per share data has been restated to reflect the five percent stock dividend paid in 2006.

MIDDLEFIELD BANC CORP.
SUPPLEMENTAL DETAIL

	For the Six Months Ended June 30,
	2007		2006
CHARGE-OFFS (000s)
Loan charge-offs	$	125	$	44
Recoveries on loans		10		6
Net loan charge-offs		116		38