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

(Date of Report: Date of earliest event reported) April 25, 2014

Middlefield Banc Corp.

(Exact name of registrant as specified in its charter)

Ohio	000-32561	34-1585111
(State or other jurisdiction of incorporation)	(Commission File Number)	(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)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following information is furnished under Item 2.02. On April 25, 2014, Middlefield Banc Corp. issued a press release announcing financial results for the three month period ended March 31, 2014. 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 April 25, 2014 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: April 28, 2014	/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 Net Income of $1.76 million for the First Quarter of 2014

MIDDLEFIELD, OHIO, April 25, 2014 ¿¿¿¿ Middlefield Banc Corp. (OTCQB: MBCN), parent of The Middlefield Banking Company, today reported net income for the first quarter of 2014 of $1.76 million, or $0.86 per diluted share. This compares to net income of $1.66 million, or $0.82 per diluted share, for the first quarter of 2013.

“Our capability to produce consistent financial results clearly demonstrates the strength of our company,” stated Thomas G. Caldwell, President and Chief Executive Officer. “Our performance in the first quarter was driven by an improved net interest margin, improved credit quality, and expansion of our loan portfolio.”

“Moving forward into 2014,” Caldwell continued, “we believe that we are well positioned to address the continued environment of historically low interest rates and the increased burden of regulatory costs. We remain focused on delivering excellence in customer service, increasing value to our shareholders, and operating our company in accordance with safe and sound banking practices.”

First quarter highlights include:

• Total net loans increased 9.4% from the first quarter of 2013 and 1.9% compared to the fourth quarter of 2013.

• The net interest margin was 4.20% for the first quarter of 2014, compared to 3.92% for the same period of 2013. The yield on earning assets increased 2 basis points, while the cost of interest-bearing liabilities decreased 28 basis points from the year ago period.

• The provision for loan and leases losses for the first quarter of 2014 was $0.2 million compared to $0.3 million for the 2013 comparable period. The current quarter’s charge was the result of lower historical charge-offs and improved credit metrics over the preceding 12 months.

• Nonperforming assets totaled $13.4 million at March 31, 2014. At the same point of 2013 nonperforming assets equaled $16.1 million.

Annualized return on average equity (“ROE”) and average assets (“ROA”) for the 2014 quarter were 13.10% and 1.08%, respectively. For the first quarter of 2013, ROE was 12.18%, with the ROA being 1.01%.

Income Statement

Net interest income for the first quarter of 2014 increased 6.6%, or $0.4 million, compared to the first quarter of 2013. This increase was driven by the increase in average net loans and a reduction in funding costs, primarily time deposits. This activity resulted in a net interest margin of 4.20% for the first quarter of 2014 compared to 3.92% for the first quarter of 2013.

Noninterest income decreased 17.6% to $0.7 million for the first quarter of 2014. This decrease was driven by a reduction in gains on investment securities transactions of $0.2 million.

Noninterest expense was up $0.2 million, or 5.7%, from the year ago quarter. Salaries and benefits, the company’s largest noninterest expense, was the leading factor in the increase and was directly related to the growth of the company. Higher levels of occupancy and equipment expense were, in part, offset by decreases in franchise tax, FDIC insurance premiums, and expenses related to other real estate owned. The non-GAAP efficiency ratio was 59.90% for the first quarter of 2014 compared to 58.57% for the first quarter of 2013.

“We have taken the opportunity to reposition our balance sheet by permitting a reduction in higher cost funding sources. This effort afforded us the ability to maintain our levels of net interest margin. Moving forward into 2014, we do anticipate continued pressure on margin levels,” stated Donald L. Stacy, Chief Financial Officer. “We are committed to executing our plan of growing our base of quality client relationships. We fully expect that this focus will continue to add value for our shareholders.”

Balance Sheet

The company’s total assets ended the first quarter of 2014 at $670.0 million, an increase of 0.5% from the $667.0 million in total assets reported at March 31, 2013. Net loans at March 31, 2014, were $436.7 million, up $37.4 million, or 9.4%, over the $399.3 million reported at March 31, 2013. Total deposits at the end of the first quarter of 2014 were $594.8 million, or 0.6% above the deposit level of $591.5 million at March 31, 2013. The investment portfolio, which is entirely classified as available for sale, stood at $155.9 million at March 31, 2014. This figure represented a reduction in the portfolio of $34.7 million from the year ago quarter end.

The company experienced growth in all loan categories. Residential real estate loans increased $16.7 million year-over-year, with commercial real estate loans experiencing growth of $14.7 million. Noninterest-bearing deposits grew $15.6 million when compared to the end of the first quarter of 2013. During the same 12 month period, time deposits increased $1.8 million. These gains were offset by a decrease of $14.2 million, year-over-year, in all other interest-bearing deposit categories.

Shareholders’ Equity

Tangible book value per share increased from $25.35 per share at March 31, 2013 to $25.52 per share at March 31, 2014. The increase is the result of a higher level of retained earnings offset by cash dividends paid to shareholders. During the 2014 first quarter, the company paid cash dividends of $0.26 per share, which equaled the amount paid in first quarter 2013. At March 31, 2014, the company had a Tier 1 leverage ratio of 9.15%. At the same point of 2013, the ratio stood at 8.22%.

Asset Quality

The provision for loan losses for the 2014 first quarter was $0.2 million, compared to the $0.3 million posted for the 2013 period. Net charge-offs for the first quarter of 2014 were $0.2 million, or an annualized 0.19% of average loans. For the first three months of 2013, net charge-offs totaled $0.4 million, which equaled an annualized 0.36% of average loans. At March 31, 2014, the allowance for loan losses was $7.0 million, representing 1.58% of total loans.

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

	Asset Quality History
	(dollars in thousands)
	3/31/2014			12/31/2013			3/31/2013			12/31/2012			12/31/2011
Nonperforming loans	$	10,741		$	12,290		$	13,899		$	14,194		$	24,546
Real estate owned		2,656			2,698			2,155			1,846			2,196
Nonperforming assets	$	13,397		$	14,988		$	16,054		$	16,040		$	26,742
Allowance for loan losses	$	7,015		$	7,046		$	7,732		$	7,779		$	6,819
Ratios:
Nonperforming loans to total loans		2.42	%		2.82	%		3.41	%		3.48	%		6.12	%
Nonperforming assets to total assets		2.00	%		2.32	%		2.41	%		2.39	%		4.09	%
Allowance for loan losses to total loans		1.58	%		1.62	%		1.90	%		1.90	%		1.70	%
Allowance for loan losses to nonperforming loans		65.31	%		57.33	%		55.63	%		54.80	%		27.78	%

Middlefield Banc Corp., headquartered in Middlefield, Ohio, is a bank holding company with total assets of $670.0 million. On January 20, 2014, the company consolidated its Emerald Bank subsidiary into the company’s lead bank, The Middlefield Banking Company. The bank operates 10 full service banking centers and a LPL Financial^® brokerage office serving Chardon, Cortland, Dublin, Garrettsville, Mantua, Middlefield, Newbury, Orwell, and Westerville. Additional information is available at www.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

March 31, 2014 and 2013 and December 31, 2013

Balance Sheet (period end)	March 31,			December 31,			March 31,
(Dollar amounts in thousands)	2014			2013			2013
(unaudited)
Assets
Cash and due from banks	$	28,663		$	20,926		$	32,426
Federal funds sold		14,147			5,267			13,204
Cash and cash equivalents		42,810			26,193			45,630
Investment securities available for sale		155,940			157,143			190,687
Loans:		443,729			435,725			407,054
Less: reserve for loan losses		7,015			7,046			7,732
Net loans		436,714			428,679			399,322
Premises and equipment		9,797			9,828			8,694
Goodwill		4,559			4,559			4,559
Core deposit intangible		146			156			184
Bank-owned life insurance		8,883			8,816			8,604
Accrued interest receivable and other assets		11,173			11,716			9,294
Total Assets	$	670,022			647,090			666,974
	March 31,			December 31,			March 31,
	2014			2013			2013
Liabilities and Stockholders’ Equity
Noninterest-bearing demand deposits	$	88,988		$	85,905		$	73,354
Interest bearing demand deposits		60,673			53,741			68,060
Money market accounts		75,296			77,473			80,051
Savings deposits		179,805			177,303			181,872
Time deposits		190,004			174,414			188,160
Total Deposits		594,766			568,836			591,497
Short-term borrowings		5,320			10,809			5,240
Other borrowings		11,468			11,609			12,779
Other liabilities		1,774			2,363			1,608
Total Liabilities		613,328			593,617			611,124
Common equity		35,115			34,979			34,697
Retained earnings		28,699			27,465			23,622
Accumulated other comprehensive (loss) income		(386	)		(2,237	)		4,265
Treasury stock		(6,734	)		(6,734	)		(6,734	)
Total Stockholders’ Equity		56,694			53,473			55,850
Total Liabilities and Stockholders’ Equity	$	670,022		$	647,090		$	666,974

MIDDLEFIELD BANC CORP.

Consolidated Selected Financial Highlights

March 31, 2014 and 2013

(Dollar amounts in thousands)

(unaudited)

	For the Three Months Ended
	March 31,
	2014			2013
INTEREST INCOME
Interest and fees on loans	$	5,694		$	5,572
Interest-bearing deposits in other institutions		5			8
Federal funds sold		3			4
Investment securities
Taxable interest		509			674
Tax-exempt interest		755			733
Dividends on stock		23			23
Total interest income		6,989			7,014
INTEREST EXPENSE
Deposits		940			1,297
Short-term borrowings		35			52
Other borrowings		32			46
Trust preferred securities		26			34
Total interest expense		1,033			1,429
NET INTEREST INCOME		5,956			5,585
Provision for loan losses		180			313
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		5,776			5,272
NONINTEREST INCOME
Service charges on deposits		441			447
Investment securities (losses) gains, net		(6	)		185
Earnings on bank-owned life insurance		67			68
Other income		213			168
Total noninterest income		715			868
NONINTEREST EXPENSE
Salaries and employee benefits		2,016			1,871
Occupancy expense		321			274
Equipment expense		220			189
Data processing costs		214			213
Ohio state franchise tax		83			154
Federal deposit insurance expense		132			154
Professional fees		287			276
(Gain) loss on sale of other real estate owned		(5	)		8
Advertising expense		123			112
Other real estate expense		63			106
Directors Fees		86			105
Other operating expense		689			539
Total noninterest expense		4,229			4,001
Income before income taxes		2,262			2,139
Provision for income taxes		499			482
NET INCOME	$	1,763		$	1,657

	For the Three Months Ended
	March 31,
	2014			2013
Per common share data
Net income per common share - basic	$	0.87		$	0.83
Net income per common share - diluted	$	0.86		$	0.82
Dividends declared	$	0.26		$	0.26
Book value per share(period end)	$	27.83		$	27.70
Tangible book value per share (period end)	$	25.52		$	25.35
Dividend payout ratio		30.01	%		31.38	%
Average shares outstanding - basic		2,033,480			1,999,645
Average shares outstanding - diluted		2,039,515			2,010,292
Period ending shares outstanding		2,037,359			2,016,284
Selected ratios
Return on average assets		1.08	%		1.01	%
Return on average equity		13.10	%		12.18	%
Yield on earning assets		4.88	%		4.86	%
Cost of interest-bearing liabilities		0.81	%		1.09	%
Net interest spread		4.07	%		3.78	%
Net interest margin		4.20	%		3.92	%
Efficiency (1)		59.90	%		58.57	%
Tier 1 capital ratio		9.15	%		8.22	%

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

	March 31,			March 31,
	2014			2013
Commercial and industrial	$	56,855		$	55,401
Real estate - construction		25,241			22,817
Real estate - mortgage:
Residential		215,809			199,063
Commercial		140,543			125,799
Consumer installment		5,281			3,974
		443,729			407,054
	March 31,			March 31,
Asset quality data	2014			2013
(Dollar amounts in thousands)
Non-accrual loans	$	7,463		$	9,730
Troubled debt restructuring		2,035			3,808
90 day past due and accruing		1,243			361
Nonperforming loans		10,741			13,899
Other real estate owned		2,656			2,155
Nonperforming assets	$	13,397		$	16,054
Allowance for loan and lease losses	$	7,015		$	7,732
Allowance for loan and lease losses/total loans		1.58	%		1.90	%
Net charge-offs:
Year-to-date		211			360
Net charge-offs to average loans, annualized
Year-to-date		0.19	%		0.36	%
Nonperforming loans/total loans		2.42	%		3.41	%
Allowance for loan and lease losses/nonperforming loans		65.31	%		55.63	%