8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K/A

Amendment No. 1

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

December 1, 2022

(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)

001-36613

(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)

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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	MBCN	The NASDAQ Stock Market, LLC (NASDAQ Capital Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Explanatory Note

On December 1, 2022, Middlefield Banc Corp. (the “Company”) filed a Current Report on Form 8-K (the “Original Report”) to report that the Company completed its merger with Liberty Bancshares, Inc. (“Liberty”), pursuant to the Agreement and Plan of Merger, dated as of May 26, 2022, by and among the Company, MBCN Merger Subsidiary, LLC, a wholly owned subsidiary of the Company (“Merger Sub”) and Liberty (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”) Liberty merged with and into Merger Sub (the “Merger”), with Merger Sub as the surviving entity in the Merger.

This Current Report on Form 8-K/A (the “Amendment”) amends the Original Report to include the financial statements of Liberty and the pro forma financial information required by Item 9.01 of Form 8-K. Except as expressly set forth herein, this Amendment does not amend, modify, or update the disclosures contained in the Original Report.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The audited consolidated balance sheets of Liberty as of December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive income, shareholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes, are hereby incorporated by reference to Exhibit 99.1 hereto.

The unaudited consolidated balance sheets of Liberty as of June 30, 2022 and December 31, 2021, and the related consolidated statements of income and comprehensive income and shareholders’ equity for the three-month and six-month periods ended June 30, 2022 and 2021, and the related consolidated statements of cash flows for the six-month periods ended June 30, 2022 and 2021 are hereby incorporated by reference to Exhibit 99.2 hereto.

(b) Pro Forma Financial Information.

The unaudited pro forma combined consolidated condensed balance sheet as of September 30, 2022, and the unaudited pro forma combined consolidated condensed statements of income for the nine months ended September 30, 2022, and for the year ended December 31, 2021, as well as the accompanying notes thereto, are filed as Exhibit 99.3 and are incorporated herein by reference.

(d) Exhibits.

Exhibit
Number	Description
23.1	Consent of FORVIS, LLP
99.1	Audited consolidated balance sheets of Liberty and subsidiaries as of December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive income, shareholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes (incorporated by reference to the Company’s Form S-4 Registration Statement, as amended, filed with the SEC on September 20, 2022 (Registration No. 333-266694))
99.2	Unaudited consolidated balance sheets of Liberty as of June 30, 2022 and December 31, 2021, and the related consolidated statements of income and comprehensive income and shareholders’ equity for the three-month and six-month periods ended June 30, 2022 and 2021, and the related consolidated statements of cash flows for the six-month periods ended June 30, 2022 and 2021 (incorporated by reference to the Company’s Form S-4 Registration Statement filed with the SEC on September 20, 2022 (Registration No. 333-266694))
99.3	unaudited pro forma combined consolidated condensed balance sheet as of September 30, 2022, and unaudited pro forma combined consolidated condensed statements of income for the nine months ended September 30, 2022, and for the year ended December 31, 2021
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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: January 26, 2023	/s/ James R. Heslop, II
	CEO

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the inclusion in Amendment No. 1 of the Registration Statement of Middlefield Banc Corp. on Form S-4 of our report dated February 25, 2022, on Liberty Bancshares, Inc.’s consolidated financial statements as of December 31, 2021 and 2020 and for the years then ended and to the reference to us under the heading “Experts” in the joint proxy statement/prospectus, which is part of this Registration Statement.

/s/ FORVIS, LLP

FORVIS, LLP

(Formerly BKD, LLP)

Cincinnati, Ohio

January 26, 2023

EX-99.3

Exhibit 99.3

SELECTED UNAUDITED PRO FORMA

CONDENSED COMBINED CONSOLIDATED FINANCIAL DATA

The following unaudited pro forma condensed combined consolidated balance sheet as of September 30, 2022 and the unaudited pro forma condensed combined consolidated statements of income for the nine months ended September 30, 2022 and for the year ended December 31, 2021 are based on the historical financial statements of Middlefield Banc Corp (“MBCN”) and Liberty Bancshares, Inc. (“Liberty”) after giving effect to the merger. The merger will be accounted for using the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, “Business Combinations” (“ASC 805”).

The unaudited pro forma condensed combined consolidated statements of income for the nine months ended September 30, 2022 and for the year ended December 31, 2021 give effect to the merger as of the beginning of all periods presented. The unaudited pro forma condensed combined consolidated balance sheet as of September 30, 2022 assumed that the merger took place on September 30, 2022.

The unaudited condensed combined consolidated balance sheet and statement of income as of and for the nine months ended September 30, 2022 were derived from MBCN’s unaudited condensed financial statements and Liberty’s unaudited condensed financial statements and as of and for the nine months ended September 30, 2022. The unaudited condensed statement of income for the year ended December 31, 2021 was derived from MBCN’s and Liberty’s audited statements of income for the year ended December 31, 2021.

The pro forma condensed combined consolidated financial statements reflect management’s best estimate of the fair value of the tangible and intangible assets acquired and liabilities assumed. As final valuations are performed, increases or decreases in the fair value of assets acquired and liabilities assumed will result in adjustments, which may be material, to the balance sheet and/or statement of income.

As required, the unaudited pro forma condensed combined consolidated financial data includes adjustments which give effect to the events that are directly attributable to the merger, expected to have a continuing impact and are factually supportable. We will incur reorganization and restructuring expenses as a result of combining our companies. We also anticipate that the merger will provide the combined company with financial benefits that include reduced operating expenses (as compared to the sum of expenses from each company while operating separately) and the opportunity to earn more revenue. The pro forma information does not take into account these expected expenses or anticipated financial benefits and does not attempt to predict or suggest future results.

The unaudited pro forma condensed combined consolidated financial statements are provided for informational purposes only and are subject to a number of uncertainties and assumptions and do not purport to represent what the companies’ actual performance or financial position would have been had the merger occurred on the dates indicated and does not purport to indicate the financial position or results of operations as of any date or for any future period.

Please refer to the following information in conjunction with the accompanying notes to these pro forma financial statements

Middlefield Banc Corp.

Acquisition of Liberty Bancshares, Inc.

Pro Forma Balance Sheet as of September 30, 2022

(In thousands)

	Acquirer (Middlefield Banc Corp.)			Target (Liberty Bancshares, Inc.)			Pro Forma Adjustments					Pro Forma Combined
ASSETS
Cash and due from banks	$	119,777		$	6,296		$	—		(A	)	$	126,073
Fed funds sold		8,800			36,289			—					45,089
Cash and cash equivalents		128,577			42,585			—					171,162
Investment securities available for sale, at fair value		163,036			58,835			270		(B	)		222,141
Loans held for sale		—			—			—					—
Loans		995,195			297,029			(2,788	)	(C	)		1,289,436
Less allowance for loan and lease losses		14,532			4,519			(4,519	)	(D	)		14,532
Net loans		980,663			292,510			1,731					1,274,904
Premises and equipment, net		16,215			4,632			1,524		(E	)		22,370
Goodwill		15,071			1,456			11,265		(F	)		27,792
Core deposit intangibles		1,171			—			6,669		(G	)		7,840
Bank owned life insurance		17,382			13,933			—					31,315
Other real estate owned		6,792			—			—					6,792
Mortgage servicing rights		444			876			804		(H	)		2,124
Accrued interest and other assets		21,660			11,784			(1,961	)	(I	)		31,483
Total assets	$	1,351,011		$	426,609		$	20,303				$	1,797,923
LIABILITIES
Noninterest-bearing demand		383,675			145,856			—					529,531
Interest-bearing demand		160,112			24,617			—					184,729
Money market		162,052			50,126			—					212,178
Savings		247,466			75,538			—					323,004
Time		177,182			73,701			228		(J	)		251,110
Total deposits		1,130,487			369,838			228					1,500,552
Short-term borrowings		80,000			—			—					80,000
Other borrowings		12,107			—			—					12,107
Accrued interest and other liabilities		5,562			3,605			(23	)	(K	)		9,144
Total liabilities		1,228,156			373,443			205					1,601,803
EQUITY
Common stock, Capital		87,640			19,669			53,596		(L	)		160,905
Retained earnings		93,166			44,187			(44,187	)	(M	)		93,166
Treasury stock		(32,871	)		(4,477	)		4,477		(N	)		(32,871	)
Accumulated other comprehensive income		(25,080	)		(6,213	)		6,213		(O	)		(25,080	)
Total equity		122,855			53,166			20,098					196,120
Total liabilities and equity	$	1,351,011		$	426,609		$	20,303				$	1,797,923

See accompanying notes to unaudited pro forma condensed combined financial statements.

Middlefield Banc Corp.

Acquisition of Liberty Bancshares, Inc.

Pro Forma Income Statement as of September 30, 2022

(In thousands)

	Acquirer (Middlefield Banc Corp.)			Target (Liberty Bancshares, Inc.)		Pro Forma Adjustments					Pro Forma Combined
INTEREST INCOME
Interest and fees on originated loans	$	34,145		$	10,733		—					44,878
Accretion (net) of loan fair value discount		—			—		216		(P	)		216
Interest bearing deposits in other institutions		232			—		—					232
Federal funds sold		100			—		—					100
Investment securities
Taxable interest		1,334			858		—					2,192
Tax-exempt interest		2,721			148		—					2,869
Dividends on stock and other income		116			342		—					458
Total interest income		38,648			12,082		216					50,946
INTEREST EXPENSE
Deposits		2,247			604		40		(Q	)		2,891
Short term borrowings		44			—		—					44
Other borrowings		262			—		—					262
Total interest expense		2,553			604		40					3,197
Net interest income		36,095			11,478		176					47,749
Provision for loan and lease losses		—			—		—					—
Net interest income after provision for loan and lease losses		36,095			11,478		176					47,749
NONINTEREST INCOME
Service charges on deposit accounts		2,874			627		—					3,501
Investment securities gains, net		(96	)		—		—					(96	)
Earnings on bank-owned life insurance		322			—		—					322
Gains on sale of loans		28			301		—					329
Other income		1,204			447		—					1,651
Total noninterest income		4,332			1,375		—					5,707
NONINTEREST EXPENSE
Salaries and employee benefits		12,662			4,992		—					17,654
Occupancy expense		1,546			527		(7	)	(R	)		2,066
Equipment expense		822			518		—					1,340
Data processing costs		2,650			522		—					3,172
State franchise tax		878			356		—					1,234
Federal deposit insurance expense		224			90		—					314
Professional fees		1,118			—		—					1,118
Loss (gain) on sale of other real estate owned		215			—		—					215
Advertising expense		725			—		—					725
Software amortization expense		115			—		—					115
Core deposit intangible amortization		232			—		564		(S	)		796
Other expense		4,500			2,190		(1,634	)	(T	)		5,056
Total noninterest expense		25,687			9,195		(1,078	)				33,804
Income before taxes		14,740			3,658		1,254					19,652
Income taxes		2,569			680		263		(U	)		3,512
NET INCOME	$	12,171		$	2,978	$	991				$	16,140
Basic earnings per common share	$	2.08		$	3.29		—				$	1.92
Diluted earnings per common share		2.08			3.27		—					1.92
Average common shares outstanding		5,841			906		2,562		(V	)		8,402
Average diltuted shares outstanding		5,854			912		2,562		(V	)		8,415

See accompanying notes to unaudited pro forma condensed combined financial statements.

Middlefield Banc Corp.

Acquisition of Liberty Bancshares, Inc.

Pro Forma Income Statement as of December 31, 2021

(In thousands)

	Acquirer (Middlefield Banc Corp.)		Target (Liberty Bancshares, Inc.)		Pro Forma Adjustments					Pro Forma Combined
INTEREST INCOME
Interest and fees on originated loans	$	47,896	$	16,208		—					64,104
Accretion (net) of loan fair value discount		—		—		293		(W	)		293
Interest bearing deposits in other institutions		90		—		—					90
Federal funds sold		3		65		—					68
Investment securities
Taxable interest		1,679		594		—					2,273
Tax-exempt interest		2,565		246		—					2,811
Dividends on stock and other income		102		43		—					145
Total interest income		52,335		17,157		293					69,784
INTEREST EXPENSE
Deposits		3,913		800		145		(X	)		4,859
Short term borrowings		—		115		—					115
Other borrowings		152		—		—					152
Total interest expense		4,065		915		145					5,125
Net interest income		48,270		16,242		147					64,659
Provision for loan and lease losses		700		480		—					1,180
Net interest income after provision for loan and lease losses		47,570		15,762		147					63,479
NONINTEREST INCOME
Service charges on deposit accounts		3,425		800		—					4,225
Investment securities gains, net		209		3		—					212
Earnings on bank-owned life insurance		546		—		—					546
Gains on sale of loans		1,240		966		—					2,206
Revenue from investment services		727		—		—					727
Other income		1,059		804		—					1,863
Total noninterest income		7,206		2,573		—					9,779
NONINTEREST EXPENSE
Salaries and employee benefits		17,151		7,163		—					24,314
Occupancy expense		2,178		714		(10	)	(Y	)		2,882
Equipment expense		1,361		635		—					1,996
Data processing costs		2,880		693		—					3,573
State franchise tax		1,144		450		—					1,594
Federal deposit insurance expense		494		115		—					609
Professional fees		1,313		—		—					1,313
Loss (gain) on sale of other real estate owned		11		—		—					11
Advertising expense		885		—		—					885
Software amortization expense		361		—		—					361
Core deposit intangible amortization		321		—		762		(Z	)		1,083
Other expense		3,979		2,147		7,000		(AA	)		13,126
Total noninterest expense		32,078		11,916		7,752					51,746
Income before taxes		22,698		6,418		(7,605	)				21,511
Income taxes		4,065		1,206		(1,462	)	(U	)		3,809
NET INCOME	$	18,633	$	5,212	$	(6,143	)			$	17,702
Basic earnings per common share	$	3.01	$	5.81		—				$	2.02
Diluted earnings per common share		3.00		5.79		—					2.02
Average common shares outstanding		6,187		897		2,562		(V	)		8,748
Average diltuted shares outstanding		6,211		899		2,562		(V	)		8,773

See accompanying notes to unaudited pro forma condensed combined financial statements.

Middlefield Banc Corp.

Acquisition of Liberty Bancshares, Inc.

Comparative Per-Share Data of Middlefield and Liberty (Unaudited)

As of and for the Nine Months Ended September 30, 2022

	Middlefield Banc Corp.		Liberty Bancshares, Inc.		Pro Forma Combined				Pro Forma Equivalent Liberty Share
Basic Earnings Per Common Share	$	2.08	$	3.29	$	1.92	(AB	)		5.29	(AD	)
Diluted Earnings Per Common share		2.08		3.27		1.92	(AB	)		5.28	(AD	)
Dividends Declared per Common Share		0.51		0.75		0.51	(AC	)		1.40	(AD	)
Book Value Per Common Share (at period end)		21.30		58.61		23.55	(AB	)		64.80	(AD	)

As of and for the Year Ended December 31, 2021

	Middlefield Banc Corp.		Liberty Bancshares, Inc.		Pro Forma Combined				Pro Forma Equivalent Liberty Share
Basic Earnings Per Common Share	$	3.01	$	5.81	$	2.02	(AB	)		5.57	(AD	)
Diluted Earnings Per Common share		3.00		5.79		2.02	(AB	)		5.55	(AD	)
Dividends Declared per Common Share		0.69		1.50		0.69	(AC	)		1.90	(AD	)
Book Value Per Common Share (at period end)		24.68		63.25		26.32	(AB	)		72.42	(AD	)

Middlefield Banc Corp.

Acquisition of Liberty Bancshares, Inc.

Pro Forma Adjustments

(In thousands)

The following pro forma adjustments have been reflected in the unaudited pro forma combined consolidated financial statements presented for Middlefield. All adjustments are based on current assumptions and valuations, which are subject to change. Unless otherwise noted, all adjustments are based on assumptions and valuations as of 9/30/2022 for the respective acquisition and are subject to change.

(A) Transaction expenses incurred are expected to be approximately $5,667 (net of tax effect). However, these expenses would primarily be incurred after the Balance Sheet date and as such, are not included as an adjustment.

(B) Reflects fair value adjustment on available for sale securities.

(C) Reflects projected 0.88% discount on loans acquired from target. The fair value adjustment will be accreted over the loans’ remaining life on a level yield basis.

(D) Reflects elimination of allowance for loan and lease loss as a part of purchase accounting adjustments.

(E) Reflects the pro forma purchase account adjustment of Liberty’s appraised value of real property. Included in this adjustment is $1,822 increased value of Land and a $298 decrease in the carrying value of depreciable property.

(F) Reflects projected goodwill that will be recognized as a part of purchase accounting adjustments.

(G) Reflects the pro forma impact of the core deposit intangible asset of Liberty. The fair value adjustment will be amortized over ten years on an accelerated basis.

(H) Reflects the pro forma purchase accounting adjustment of Liberty’s Mortgage Servicing Rights to fair value.

(I) Reflects projected deferred tax liability recorded as a result of purchase accounting adjustments (assuming 21% tax rate).

(J) Reflects the pro forma purchase accounting adjustment of Liberty’s time deposits to fair value. The fair value adjustment will be accreted over the life of the time deposits on a level yield basis.

(K) Reflects the pro forma purchase accounting for historical deferred loan fees and interest, as well as liabilities settled as of the Merger Date.

(L) Reflects issuance of acquirer’s stock as consideration of $73,265 and elimination of surplus associated with target’s common stock and associated surplus.

(M) Reflects elimination of target’s retained earnings and impact to retained earnings of payment of transaction fees of $5,667, net of tax effect.

(N) Reflets elimination of target’s treasury stock.

(O) Reflects elimination of target’s AOCI.

(P) Reflects nine months of accretion of loan discount into loan interest income.

(Q) Reflects nine months of accretion of time deposit premium against deposit interest expense.

(R) Reflects nine months of reduced depreciation as a result of the fair value adjustment of the Company’s real property.

(S) Reflects nine months of amortization of core deposit intangible recorded in conjunction with acquisition of target.

(T) Reflects removal of year to date incurred merger expenses reflected in the pro-forma income statement as of 12/31/2021.

(U) Reflects incremental tax impact of respective adjustments.

(V) Reflects shares issued to target as part of merger consideration.

(W) Reflects one year of accretion of loan discount of $293 into loan interest income.

(X) Reflects one year of accretion of time deposit premium against deposit interest expense.

(Y) Reflects one year of reduced depreciation as a result of the fair value adjustment of the Company’s real property.

(Z) Reflects one year of amortization of core deposit intangible recorded in conjunction with acquisition of target.

(AA) Reflects one-time restructuring expense.

(AB) Pro forma combined amounts are calculated by adding together the historical amounts reported by Middlefield and Liberty, as adjusted for the estimated purchase accounting adjustments to be recorded in connection with the merger and an estimated 2,561,513 shares of Middlefield common stock to be issued in connection with the merger based on the terms of the Merger Agreement.

(AC) Pro forma combined dividends are based on Middlefield’s historical amounts.

(AD) The pro forma per equivalent Liberty share is computed by multiplying the pro forma combined amounts by the exchange ratio of 2.752.

XML

Document and Entity Information	Dec. 01, 2022
Cover [Abstract]
Entity Registrant Name	MIDDLEFIELD BANC CORP
Amendment Flag	true
Entity Central Index Key	0000836147
Document Type	8-K/A
Document Period End Date	Dec. 01, 2022
Entity Incorporation State Country Code	OH
Entity File Number	001-36613
Entity Tax Identification Number	34-1585111
Entity Address, Address Line One	15985 East High Street
Entity Address, City or Town	Middlefield
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	44062
City Area Code	(440)
Local Phone Number	632-1666
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Security 12b Title	Common Stock, no par value
Trading Symbol	MBCN
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Amendment Description	On December 1, 2022, Middlefield Banc Corp. (the “Company”) filed a Current Report on Form 8-K (the “Original Report”) to report that the Company completed its merger with Liberty Bancshares, Inc. (“Liberty”), pursuant to the Agreement and Plan of Merger, dated as of May 26, 2022, by and among the Company, MBCN Merger Subsidiary, LLC, a wholly owned subsidiary of the Company (“Merger Sub”) and Liberty (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”) Liberty merged with and into Merger Sub (the “Merger”), with Merger Sub as the surviving entity in the Merger. This Current Report on Form 8-K/A (the “Amendment”) amends the Original Report to include the financial statements of Liberty and the pro forma financial information required by Item 9.01 of Form 8-K. Except as expressly set forth herein, this Amendment does not amend, modify, or update the disclosures contained in the Original Report.