More annual reports from Middlefield Banc Corp.:
2023 Report2021 Summary Annual Report 1500000 1200000 900000 600000 300000 0 TOTAL ASSETS (in thousands) NET LOANS OUTSTANDING (in thousands) $ 1 , 3 9 1 , 9 7 9 $ 1 , 3 3 1 , 0 0 6 $ 1 , 2 4 8 3 9 8 , $ 1 , 1 8 2 4 7 5 , $ 1 , 1 0 6 3 3 6 , $ 9 8 4 6 8 1 , $ 9 7 7 4 9 0 , $ 9 1 6 0 2 3 , $ 1 , 0 9 0 6 2 6 , $ 9 6 7 3 4 9 , Earnings Per Share: 2021 $3.01 compared to 2020 $1.31 130% increase over 2020 NET INCOME (in thousands) BOOK VALUE PER SHARE , $ 1 8 6 3 3 , $ 1 2 4 3 1 $ 1 2 7 1 1 , , $ 9 4 5 5 , $ 8 3 4 9 $ 2 4 6 8 . $ 2 2 5 4 . $ 2 1 4 5 . $ 1 9 7 7 . $ 1 8 6 3 . TOTAL ASSETS (in thousands) NET LOANS OUTSTANDING (in thousands) CHAIRMAN’S LETTER TO SHAREHOLDERS: 1500000 1200000 900000 600000 300000 0 $ 1 , 3 9 1 , 9 7 9 $ 1 , 3 3 1 , 0 0 6 $ 1 , 2 4 8 , 3 9 8 $ 1 , 1 8 2 , 4 7 5 $ 1 , 1 0 6 , 3 3 6 $ 9 8 4 , 6 8 1 $ 9 7 7 , 4 9 0 $ 9 1 6 , 0 2 3 $ 1 , 0 9 0 , 6 2 6 $ 9 6 7 , 3 4 9 NET INCOME (in thousands) BOOK VALUE PER SHARE $ 1 8 , 6 3 3 $ 1 2 , 4 3 1 $ 1 2 , 7 1 1 $ 9 , 4 5 5 $ 8 , 3 4 9 $ 2 4 . 6 8 $ 2 2 . 5 4 $ 2 1 . 4 5 $ 1 9 . 7 7 $ 1 8 . 6 3 As Middlefield emerges from the COVID-19 pandemic, management and the Board are focused on creating the necessary infrastructure to succeed in an increasingly dynamic and competitive business environment. In many ways, 2021 was a year of significant transformation for Middlefield and I am proud of the progress our Company is making. After 35 years at Middlefield and 26 years as our President and Chief Executive Officer, Tom Caldwell will retire from the Company on March 31, 2022. Under Tom’s leadership, Middlefield has grown significantly, achieved strong financial performance, and built a robust platform for long-term success. On behalf of Middlefield’s employees, management team, and Board of Directors, I want to thank Tom for his dedication and service and wish him well on his much-deserved retirement. Our Board went through a thorough and extensive succession plan that looked at both external and internal candidates. Ultimately, we appointed Jim Heslop as President and Chief Executive Officer because of his flawless track record of leadership, development, and operational excellence. In addition, Jim has been an active member of the Ohio community banking industry for over 40 years, including 26 years at Middlefield as Executive Vice President and Chief Operating Officer. This provides him with the right values, experience, and skillset to support our corporate mission and respectively serve our communities, customers, and associates, while creating sustainable value for our shareholders. Supporting Jim is a leadership team of experienced and motivated bankers and a talented Board of Directors. We added proven leaders to both the Middlefield Banc Corp. and The Middlefield Banking Company Boards as part of our continual Board refresh initiatives. During 2021, Jennifer Moeller was added to the Board of Directors of The Middlefield Banking Company, and Kevin DiGeronimo was added to the Board of Directors of Middlefield Banc Corp. As experienced executives and active members of our communities, Jennifer and Kevin are wonderful additions to the Boards of Middlefield Banc Corp. and The Middlefield Banking Company and I look forward to their contributions. I also want to acknowledge Clayton W. Rose, III who retired from our Board in November 2021. Clay was a dedicated and skillful Board member and I wish him well on his retirement. In addition to Tom’s retirement as Chief Executive Officer, he has also resigned from the Board of Directors of both the Middlefield Banc Corp. and The Middlefield Banking Company. With Tom’s retirement, Middlefield Banc Corp. took action to reduce the size of its Board of Directors from ten to nine members. In addition to our succession planning and adding new directors, our Board engaged an outside advisor to review and modernize all executive compensation and annual incentive programs. We created an ESG mission statement and began pursuing a comprehensive ESG framework to guide our efforts into the future. As part of our robust Strategic Planning process, we worked with management to create a new three-year strategic plan that is focused on growing our Bank across our Northeast Ohio and Central Ohio markets. We also continue to maintain an Advisory Board in the Central Ohio market, comprised of business leaders and active members of our Central Ohio communities, that is focused on helping us grow our Bank within this compelling market. As you can see, it was a very active year of progress for the Board and transformation for Middlefield. The Board is committed to pursuing initiatives that create continual value for all our shareholders. In fact, Middlefield returned 85% of 2021 earnings to shareholders through our share repurchase and dividend programs. We also continued our consistent track record of increasing our regular cash dividend. This included a 13.3% year-over- year increase in our regular fourth quarter dividend payment to $0.17 per share, and the Board approved a $0.04 special dividend that was also paid in the 2021 fourth quarter. I am proud of the progress we made in 2021, and excited by the opportunities we have in the future to create additional value for our customers, team members, communities, and shareholders. Our continued success and ability to serve our customers is a direct result of our team’s talent, dedication, and commitment. We remain humbled by our associates’ support and strive to provide the resources and opportunities to advance their careers. On behalf of the Middlefield Banc Corp. Board of Directors and our employees, we thank you for your continued support. WILLIAM J. SKIDMORE Chairman, Board of Directors Middlefield Banc Corp. 2021 Summary Annual Report 1 TO OUR SHAREHOLDERS AND FRIENDS: To put the last 35 years into perspective, we expanded from just three offices in Northeast Ohio to 16 offices and an LPO throughout Northeast and Central Ohio. We completed three successful acquisitions and conducted three highly successful capital raises in the last decade. The Bank’s assets increased from $134.6 million at December 31, 1995, to $1.33 billion at December 31, 2021, while core pre-tax pre-provision earnings have increased from $2.6 million for the year ended December 31, 1995 to $23.4 million at December 31, 2021. Most importantly for our shareholders, $100 invested in Middlefield on December 31, 1996 was worth $746 at December 31, 2021, including dividend reinvestment. This legacy of value creation compares favorably to many of our peers and outperformed the Nasdaq Bank Index over this time. More recently, 2021 was a transformative year for Middlefield as we continued to navigate a low interest rate environment and the prolonged effects of the COVID-19 pandemic. Middlefield participated in several COVID-19 related relief programs, while also doing our part to protect the health and safety of our customers and team members. Over the past two years, we helped our customers receive $212.6 million in Payment Protection Program (“PPP”) loans, including $67.6 million in 2021. As a local and responsive community bank, of the customers that received PPP funding over the past two years, over 45% were new relationships to Middlefield. I am pleased that we have been able to continue relationships with many of these customers even as we have processed $178.4 million of PPP loan forgiveness over the past two years. The Middlefield Banking Company strives to be a leader, an advocate, and a partner for the communities we serve through financial and volunteer contributions. Our officers and employees participate in a variety of programs to support basic needs, direct services, financial literacy, affordable housing, and economic growth. Our community-oriented values continued to drive our financial success. For 2021, we achieved record financial results. Net income for the year ended December 31, 2021, increased 123.2% to a record $18.6 million, or a record $3.00 per diluted share, from $8.3 million, or $1.30 per diluted share for the same period last year. This was driven by an 11.3% increase in net interest income, strong asset quality, controlled noninterest expense, and a 20.3% increase in noninterest income. In addition, our book value REFLECTING ON MY TIME AT MIDDLEFIELD OVER THE PAST 35 YEARS, I AM PROUD OF WHAT WE HAVE ACCOMPLISHED TOGETHER AND THE VALUE WE HAVE CREATED FOR OUR CUSTOMERS, ASSOCIATES, LOCAL COMMUNITIES, AND SHAREHOLDERS. MOST IMPORTANTLY, AS I RETIRE FROM MY DUTIES AT MIDDLEFIELD ON MARCH 31, 2022, I AM THRILLED BY THE COMPANY’S STRONG POSITION, THE LEADERSHIP TEAM WE HAVE BUILT, AND THE OPPORTUNITIES WE ARE PURSUING TO CREATE ADDITIONAL VALUE FOR ALL OUR STAKEHOLDERS. 2 Middlefield Banc Corp. 2021 Summary Annual Report per share increased 9.5% to a record $24.68 per share. Allocating excess capital is an important component of our strategic plan that is focused on creating sustainable value for our shareholders. I am pleased to report that we returned a record amount of capital to our shareholders in 2021 through our share repurchase program and growing dividend policy. During 2021, we invested $12.3 million in our share repurchase program, retiring approximately 8.0% of our outstanding shares, and at an average price of $23.99 or 109.6% of our tangible book value of $21.88 at December 31, 2021. In addition, we paid $4.2 million in dividends during the year, reflecting an increase of 10.6% over the prior year. On February 14, 2022, Middlefield’s Board of Directors increased the Company’s share repurchase program by an additional 300,000 shares. Combined with the 69,566 shares available for repurchase pursuant to the Board’s August 9, 2021 authorization, our current repurchase program permits the Company to repurchase a total of 369,566 shares, equating to approximately 6.3% of the Company’s 5,874,206 outstanding shares at February 14, 2022. As we look to the future, I am encouraged by the direction we are headed. However, we understand that to remain competitive we must continue to pursue growth opportunities, invest in our operations, and attract leading talent to our organization. We believe our continued success starts with the leadership team we have assembled. I am delighted that the Board appointed Jim Heslop as the next President and Chief Executive Officer of Middlefield Banc Corp. and The Middlefield Banking Company, which will be effective on April 1, 2022. Having worked with Jim for nearly three decades, I am confident the Board made the right decision after an extensive search of both internal and external candidates as part of our succession planning. During 2021, with the help and input of the Board, we updated our three-year strategic plan aimed at guiding our growth and capital allocation initiatives. This growth will be focused on expanding our efforts to more customers in Cuyahoga and Summit counties in Northeast Ohio, and accelerating growth across our four Central Ohio counties. These counties are dominated by large regional and national institutions, and we believe our local, independent and individual services offer a compelling customer value proposition. It is important to provide customers, especially in these markets, with modern tools and services. We continue to pursue relationships with innovative partners and FinTech companies that enhance our customer experience and expand our relationships. During 2021, we initiated a new digital account-opening solution providing customers with a modern and flexible approach to online deposit account opening to be launched in early 2022. In December, we formed a new, full-service digital insurance agency, MB Insurance Services, for retail and commercial customers that opened for business in February 2022. As we expand our digital offerings, it is essential to provide customers with the necessary tools to monitor and protect their digital accounts and in 2021 we added a new fraud prevention platform for checks and ACH transactions. As you can see, Middlefield continues to evolve and adapt to the world around us, while maintaining the core values that have made us successful throughout our history. I am extremely proud to achieve another year of record financial results in 2021, and I am confident the Bank has the right platform, leadership team, and strategies in place to continue to grow and create value for our shareholders for many years to come. I have dedicated much of my life to The Middlefield Banking Company, and it is with mixed emotions that I am announcing my retirement. I have had the honor and privilege to work with amazing individuals over the past 35 years that have been dedicated to helping our communities and supporting our growth. All the successes that the Bank and I have enjoyed would never have been possible without the efforts and support of Middlefield’s amazing team of associates. I am leaving at a time when the Bank is in a strong position, and I know Jim’s talents, respect for others, and dedication to Middlefield will continue to move the Bank forward for the benefit of our customers, team members, communities, and shareholders. On behalf of everyone at the Middlefield Banc Corp., I appreciate your continued support. Sincerely, Thomas G. Caldwell President and Chief Executive Officer Middlefield Banc Corp. 2021 Summary Annual Report 3 DECADE OF PROGRESS (Dollar amounts in thousands, except earnings per share data) 2012 2013 2014 $ 28,746 $ 28,178 $ 27,874 6,447 22,299 2,168 20,131 3,451 15,639 7,943 1,662 5,250 22,928 196 22,732 3,145 16,870 9,007 1,979 4,070 23,804 370 23,434 3,588 17,850 9,172 1,992 $ 6,281 $ 7,028 $ 7,180 $670,288 $647,090 $677,531 593,335 568,836 586,112 55,437 53,473 63,867 400,654 428,679 463,738 7,779 1,208 120 10 7,046 6,846 929 125 10 570 139 10 $ 1.64 $ 1.74 $ 1.76 0.52 13.91 0.52 13.16 0.52 15.56 31.87% 29.84% 29.54% $ 2,002 $ 2,048 $ 2,121 0.95% 11.98% 1.06% 13.17% 1.07% 12.17% Interest income Interest expense Net interest income Provision for loan loss Net interest income after provision for loan losses Noninterest income, including security gains/losses Noninterest expense Income before income taxes Income taxes Net income Total assets Deposits Equity capital Loans outstanding, net Allowance for loan losses Net charge-offs Full time employees (average equivalents) Number of offices Earnings per share Dividends per share Book value per share Dividend payout ratio Cash dividends paid Return on average assets Return on average equity 4 Middlefield Banc Corp. 2021 Summary Annual Report 2015 2016 2017 2018 2019 2020 2021 $ 28,595 $ 29,994 $ 43,995 $ 50,357 $ 54,525 $ 52,638 $ 52,335 3,820 24,775 315 24,460 4,044 20,077 8,427 1,562 4,190 25,804 570 25,234 3,959 20,872 8,321 1,905 6,647 37,348 1,045 36,303 4,859 27,485 13,677 4,222 9,909 40,448 840 39,608 3,728 28,743 14,593 2,162 13,140 41,385 890 40,495 4,841 30,033 15,303 2,592 9,250 43,388 9,840 33,548 5,990 29,788 9,750 1,401 4,065 48,270 700 47,570 7,206 32,078 22,698 4,065 $ 6,865 $ 6,416 $ 9,455 $ 12,431 $ 12,711 $ 8,349 $ 18,633 $735,139 $787,821 $1,106,336 $1,248,398 $1,182,475 $1,391,979 $1,331,006 624,447 62,304 527,325 6,385 776 143 10 629,934 878,194 1,016,067 1,020,843 1,225,200 1,166,610 76,960 602,542 6,598 357 139 11 119,863 916,023 7,190 453 190 14 128,290 984,681 7,428 602 200 15 137,775 977,490 139,448 1,090,626 6,768 1,550 189 16 13,459 3,149 184 16 145,335 967,349 14,342 (183) 185 16 $ 1.71 $ 1.52 $ 1.56 $ 1.92 $ 1.96 $ 1.31 $ 3.01 0.54 16.59 0.54 17.07 0.54 18.63 0.59 19.77 0.57 21.45 0.60 21.86 0.69 24.68 30.90% 36.13% 35.52% 30.40% 28.99% 45.92% 22.76% $ 2,153 $ 2,318 $ 3,358 $ 3,779 $ 3,685 $ 3,834 $ 4,240 0.97% 10.62% 0.85% 9.33% 0.88% 8.52% 1.09% 9.94% 1.05% 9.35% 0.64% 6.07% 1.36% 12.74% Middlefield Banc Corp. 2021 Summary Annual Report 5 CONSOLIDATED BALANCE SHEET (Dollar amounts in thousands, except shares) 2021 2020 ASSETS Cash and due from banks Federal funds sold Cash and cash equivalents Equity securities, at fair value Investment securities available for sale, at fair value Loans held for sale Loans: Commercial real estate: Owner occupied Non-owner occupied Multifamily Residential real estate Commercial and industrial Home equity lines of credit Construction and other Consumer installment Total loans Less: allowance for loan and lease losses Net loans Premises and equipment, net Goodwill Core deposit intangibles Bank-owned life insurance Other real estate owned Accrued interest receivable and other assets TOTAL ASSETS LIABILITIES Deposits: Noninterest-bearing demand Interest-bearing demand Money market Savings T ime Total deposits Short-term borrowings: Federal funds purchased Federal Home Loan Bank advances Total short-term borrowings Other borrowings Accrued interest payable and other liabilities TOTAL LIABILITIES STOCKHOLDERS’ EQUITY Common stock, no par value; 10,000,000 shares authorized, 7,330,548 and 7,308,685 shares issued; 5,888,737 and 6,379,323 shares outstanding Retained earnings Accumulated other comprehensive income Treasury stock, at cost; 1,441,811 and 929,362 shares TOTAL STOCKHOLDERS’ EQUITY $ 97,1 7 2 22,322 119,494 818 170,199 1,051 111,470 283,618 31,189 240,089 148,812 104,355 54,148 8,010 981,691 14,342 967,349 1 7,272 15,071 1,403 1 7,060 6,992 14,297 $ 92,874 19,543 112,417 609 114,360 878 103,121 309,424 39,562 233,995 232,044 112,543 63,573 9,823 1,104,085 13,459 1,090,626 18,333 15,071 1,724 16,938 7,387 13,636 $1,331,006 $1,391,979 $ 334, 1 7 1 196,308 177,2 8 1 260,1 2 5 198,725 1,166,610 — — — 12,901 6,1 6 0 $ 291,347 195,722 198,493 243,888 295,750 1,225,200 — — — 17,038 5,931 1,185, 6 7 1 1,248,169 8 7, 1 3 1 83 , 97 1 3,462 (29,229) 145,335 86,886 69,578 4,284 (16,938) 143,810 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $1,331,006 $1,391,979 See accompanying notes to the consolidated financial statements. 6 Middlefield Banc Corp. 2021 Summary Annual Report CONSOLIDATED STATEMENT OF INCOME (Dollar amounts in thousands, except per share data) 2021 2020 INTEREST AND DIVIDEND INCOME Interest and fees on loans Interest-earning deposits in other institutions Federal funds sold Investment securities: Taxable interest Tax-exempt interest Dividends on stock Total interest and dividend income INTEREST EXPENSE Deposits Short-term borrowings Other borrowings Total interest expense NET INTEREST INCOME Provision for loan losses NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES NONINTEREST INCOME Service charges on deposit accounts Gains (losses) on equity securities Earnings on bank-owned life insurance Gain on sale of loans Other income Total noninterest income NONINTEREST EXPENSE Salaries and employee benefits Occupancy expense Equipment expense Data processing costs Ohio state franchise tax Federal deposit insurance expense Professional fees Net gain (loss) on other real estate owned Advertising expense Software amortization expense Core deposit intangible amortization Other expense Total noninterest expense Income before income taxes Income taxes NET INCOME EARNINGS PER SHARE Basic Diluted $47,896 90 3 1,679 2,565 102 52,335 3,913 — 152 4,065 48,270 700 47,570 3,425 209 546 1,240 1,786 7,206 17,151 2,178 1,361 2,880 1,144 494 1,313 11 885 361 321 3,979 32,078 22,698 4,065 $18,633 $ 3.01 3.00 $49,003 118 22 909 2,472 114 52,638 8,962 79 209 9,250 43,388 9,840 33,548 2,539 (101) 427 1,487 1,638 5,990 15,835 2,158 1,308 2,650 1,082 423 1,359 (172) 698 351 332 3,764 29,788 9,750 1,401 $ 8,349 $ 1.31 1.30 See accompanying notes to the consolidated financial statements. Middlefield Banc Corp. 2021 Summary Annual Report 7 TOM CALDWELL Rachel Dean Banking Officer, UB Supervisor: “ I have spent my entire career at MBC and owe my livelihood for the last 35+ years to Tom and his guidance. I have long admired his dedication to our communities and greatly appreciate his desire to maintain an organization we can all be proud of! A Thank You seems insufficient but is all I have to offer. Enjoy your well-deserved retirement! You have most certainly earned it.” Celebrating Kevin Helmick President and CEO, Farmers Bank: “ Tom is an industry leader and always cared about community banking. His involvement in the ICBA and community organizations were exemplary. He was always willing to take time and discuss issues that faced all of us in the banking industry. He was a fair and respected competitor, and I wish him all the best in a well-deserved, next chapter.” Jim Long Orwell Branch Manager: “ Tom never hid behind his title and was always down to earth. I was impressed when he came out to Orwell to discuss Core Values and was not donning a tie. He made me feel immediately at ease. I always felt Tom supported each and every employee. He was a great leader and more importantly a great person.” Karen Branham Retired AVP, Deposit Operations Manager: “ Congratulations Tom! Thank you for always being available to talk to or listen when needed and for being such a good sport. One of the moments I fondly remember was your willingness to volunteer for the dunking machine at the Relay for Life event. You never made it into the water due to lightning—but you volunteered and that was the important part! Enjoy your retirement with your beautiful wife, Tami, and family!” 8 Middlefield Banc Corp. 2021 Summary Annual Report Mike Toth President and CEO Westfield Bank: “ Congratulations on an incredibly successful career. Thanks for all that you’ve done to help support so many businesses and families across the community. Well done, Tom!” TOM CALDWELL G. Scott McComb Chairman, President and CEO,Heartland Bank: “ I met Tom through my interactions in the industry and we became friends when I got more involved in the CBAO/ICBA. You always know where you stand with Tom. His matter-of- fact demeanor and ability to bring home his point and at the same time build relationships is something to admire. An American success story for sure! Congratulations, Tom, for making it to the finish line. Amy and I, along with the entire Heartland Family, wish you and your family the best as you enter this new stage of life. Cheers, pal!” James W. Everson Sr. Chairman, President and CEO Unified Bank: 36 Years of Leadership “ Welcome to the world of retired Bank Presidents and CEOs, Tom. You have worked long and hard to reach this goal and congratulations to you for making it. My having traveled this path a few years ago, perhaps your greatest challenge in retirement will be going from being ‘consequential’ to being ‘inconsequential,’ but I assure you that once you get used to this, you will love retirement. Keep busy and always have something to look forward to and you will find retirement to be as great as I have. Job well done, Tom!” Colleen Pirrmann Dublin Branch Manager: “ Wishing you all good things as you enter retirement. Thanks for your leadership and for making Middlefield Bank a great place to work. Please be sure to stop in the Dublin Branch to say ‘hi’ on your annual trip to the Memorial Tournament! All the best!” Ben Garlich Mayor of Middlefield, Ohio: “ As a lifetime customer of Middlefield Bank, Tom was there through the many government requirements and regulatory evolutions. I appreciated how I never just became a number with Tom. His personal attention and the relationship he maintained with me was valued and appreciated.” Middlefield Banc Corp. 2021 Summary Annual Report 9 Chris Hess Beachwood Branch Manager: “ Tom is one of those leaders that knew he had good people in place to help the organization serve our customers and communities in a way that reflected our commitment to be a true Community Bank. He always let us ‘Do our thing’ because he knew what we were doing was following the same dedication and values that he held himself. Thank you, Tom, for your dedication to customers, our communities and us. God Bless you in a well-deserved retirement.” Sheila Schroer Chief Examiner, Ohio Division of Financial Institutions: “ Tom, I sincerely hope you enjoy a long, happy, and healthy retirement. You have earned it. While you may not have always agreed with the regulators on every point, there has always been an atmosphere of mutual respect and partnership. I have always appreciated your candor and opinions. You have always had the best interest of the Bank—its employees, customers, and shareholders—at heart. It has been a pleasure to work with you. Congratulations and best wishes for a well-deserved, happy retirement!” Jack Gregorin VP Commercial Lending: “ Since the day I arrived at MBC, I have admired the easygoing way that Tom has led the Bank. He has trusted the capabilities of those that represent the Bank and made it clear that his support was always available. Wishing you all the best in the next chapter, Mr. Caldwell.” 10 Middlefield Banc Corp. 2021 Summary Annual Report Ben Pachla Account Executive Officer, Travelers: “ Retirement?! All kidding aside, congrats, Tom! It’s been a pleasure getting to know you and Middlefield Bank over the past several years. I will always value our relationship and have enjoyed working together with both Joe Jr. and Joe Sr. at the insurance agency! Best wishes to you and your family... and continued success!” Middlefield Bank is celebrating its 120th anniversary of dedicated community banking. A lot has changed in 120 years, but one thing has remained constant — our belief in the role we have in shaping the financial success of our communities, local businesses, and every customer that walks through our doors. Middlefield Banc Corp. 2021 Summary Annual Report 11 COMMUNITY COMMITMENT COMMUNITY INVOLVEMENT 2021 As a community bank, The Middlefield Banking Company strives to be leader, an advocate, and a partner for the communities we serve. As our President and CEO Thomas Caldwell has said, “community banks are the ‘lifeblood of the community’.” In 2021, the Bank celebrated its 120th anniversary which was not only cause for celebration but a chance to take stock of the values we hold dear. Though much has changed in the past 120 years, one thing has remained constant—our belief in the role we have in shaping the financial success of our communities, local businesses, and every customer that walks through our doors. Through collaborating with groups and organizations that reside in the communities we serve, we can further extend the reach of our own impact. Our officers and employees are in leadership roles of more than 20 organizations including non-profits, direct services, and education. Below is a list of some of those organizations: Affordable Housing Trust (Columbus and Franklin County) Ashtabula Community Foundation Children’s Advocacy Center (Portage) Crossroads/Beacon Health (Cuyahoga) Financial Empowerment (Portage and Trumbull) Geauga Community Improvement Corporation Geauga County Fair Housing Geauga Growth Partnership Hattie Larlham Center for Children with Disabilities Junior Achievement (Ashtabula, Central Ohio, Greater Cleveland and Mahoning Valley) Next Step (Geauga and Portage) Rotary Clubs (Burton/Middlefield and Chardon) United Way (Central Ohio, Delaware, Greater Cleveland, Geauga, Lake, Portage, Union, Summit and Trumbull) Women’s Recovery Center (Cuyahoga) WomenSafe at the Green House (Chardon) ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) MISSION STATEMENT The Middlefield Banking Company (MB) will ensure that it has respectful and responsible social policies within the organization, the communities it serves and the banking industry as a whole. MB will be accountable for its environmental footprint in its owned and leased facilities. MB will ensure that it has ethical and fair governance policies and practices including a framework for monitoring and auditing results. 12 Middlefield Banc Corp. 2021 Summary Annual Report MIDDLEFIELD BANC CORP. BOARD OF DIRECTORS WILLIAM J. SKIDMORE 2007 Chairman, Board of Directors Middlefield Banc Corp. The Middlefield Banking Company Retired Ohio Senior District Manager Waste Management of Ohio, Inc. THOMAS G. CALDWELL 1997 President and Chief Executive Officer Middlefield Banc Corp. The Middlefield Banking Company JAMES R. HESLOP, II 2001 Executive Vice President Chief Operating Officer Middlefield Banc Corp. The Middlefield Banking Company JAMES J. McCASKEY 2004 President McCaskey Landscape and Design, LLC CAROLYN J. TURK, C.P.A. 2004 Senior Internal Auditor Molded Fiber Glass Companies KENNETH E. JONES 2008 Retired Financial Executive DARRYL E. MAST 2013 Retired: Hattie Larlham Care Group and Hattie Larlham Foundation THOMAS BEVAN 2017 Chief Executive Officer Bevan & Associates, LPA, Inc. MICHAEL VOINOVICH 2020 Executive Vice President and Chief Investment Officer of ECHO Health, Inc. KEVIN DIGERONIMO 2021 President DiGeronimo Development JENNIFER L. MOELLER* 2021 Angel Investor Central Ohio Region Advisory Board: JEFFREY A. GONGWER; GEORGE J. KONTOGIANNIS, AIA; TIMOTHY C. LONG; MICHAEL J. MORAN *Director of The Middlefield Banking Company Middlefield Banc Corp. 2021 Summary Annual Report 13 MIDDLEFIELD BANC CORP. OFFICERS THOMAS G. CALDWELL President and Chief Executive Officer JAMES R. HESLOP, II Executive Vice President Chief Operating Officer DONALD L. STACY Senior Vice President Chief Financial Officer JULIE E. SHAW Corporate Secretary TERESA M. HETRICK Assistant Corporate Secretary THE MIDDLEFIELD BANKING COMPANY OFFICERS THOMAS G. CALDWELL 1986 President and Chief Executive Officer MATTHEW E. BELLIN 2006 Senior Vice President Commercial Lender ADAM T. COOK 2006 Senior Vice President Loan Administration FELICIA M. HOUGH 2009 Senior Vice President Branch Administration COURTNEY M. ERMINIO 2010 Senior Vice President Risk Officer CRAIG E. REAY 2011 Senior Vice President Credit Administration ROBERT J. DAWSON 2015 Senior Vice President Commercial Lender CAROLE L. SHAULL 2015 Senior Vice President Human Resources DONALD L. STACY 1999 Senior Executive Vice President Treasurer JAMES R. HESLOP, II 1996 Executive Vice President Chief Operating Officer CHARLES O. MOORE 2016 President, Central Ohio TERESA M. HETRICK 1996 Executive Vice President Deposit Services MICHAEL C. RANTTILA 2017 Executive Vice President Chief Financial Officer MICHAEL L. ALLEN 2018 Executive Vice President Chief Banking Officer THOMAS R. NEIKIRK 1994 Senior Vice President Commercial Lender ALFRED F. THOMPSON, JR. 1996 Senior Vice President Credit Administration 14 Middlefield Banc Corp. 2021 Summary Annual Report GREG T. YURCO 2019 Senior Vice President Senior Commercial Lender GARY C. KERN 2020 Senior Vice President Chief Information Officer MICHAEL E. KARCHER 2021 Senior Vice President Commercial Lender JULIE E. SHAW 2019 Corporate Secretary DAVID KUCERA 2004 Vice President Controller LAURA E. NEALE 2010 Vice President Commercial Lender BRETT A. RICHEY 2010 Vice President Special Assets Manager LORI A. GRAHAM 2013 Vice President Compliance/CRA Officer DANIEL B. PLANT 2014 Vice President Mortgage Lending JOHN SOLICH 2015 Vice President Commercial Lender STEVEN FLEYSHMAN 2015 Vice President Credit Manager STANLEY GREGORIN, JR. 2018 Vice President Commercial Lender MELISSA M. MAKI 2018 Vice President Director of Marketing and Communications DALE L. MOORE 2009 Assistant Vice President Project Coordinator Bank Security Officer STEPHEN J. LEBOLD 2012 Assistant Vice President Westerville Branch Manager LISABETH A. MULDOWNEY 2012 Assistant Vice President Garrettsville Branch Manager PATRICK G. PAOLETTA 2020 Vice President Commercial Lender WARREN R. COX, II 2016 Assistant Vice President Sunbury Branch Manager REBECCA BRAHENEY, CPA 2021 Vice President Chief Accounting Officer RACHEL DEAN 1985 Banking Officer Universal Banking Supervisor KATHLEEN M. VANEK 1998 Assistant Vice President Mantua Branch Manager COLLEEN M. PIRRMANN 2011 Banking Officer Dublin Branch Manager MARLIN J. MOSCHELL 2000 Assistant Vice President Orwell Lending Officer MICHELLE L. BAHLEDA 2014 Banking Officer Lender KEVIN J. MITCHELL 2007 Assistant Vice President Lender II CHRISTOPHER N. PRATT 2014 Banking Officer Customer Experience Officer MELISSA K. GAY 2008 Assistant Vice President Bank Secrecy Act Officer JEAN M. CARTER 2009 Assistant Vice President Chardon Branch Manager CHRISTOPHER J. HESS 2018 Banking Officer Beachwood Branch Middlefield Banc Corp. 2021 Summary Annual Report 15 COMMUNITY INVOLVEMENT President Central Ohio Charles O. Moore presents a $10,000 donation check to Lark Mallory, CEO of the Affordable Housing Trust for Columbus and Franklin County. Our Sunbury Branch gets into the holiday spirit with a Grinch Themed Parade float at Sunbury Chamber’s Christmas on the Square event. SVP, Branch Administration Felicia Hough speaks at the Heritage Marketplace in Middlefield to discuss financial scam prevention tips to the local community. Our Chardon Branch at St. Mary School’s Trunk or Treat event for spooky good time with candy and refreshments for all. Orwell Team Members, along with President and CEO Tom Caldwell and EVP, Chief Banking Officer Mike Allen attend the Orwell Village Centennial. Our Deposit Operations team collected goodies for our furry friends at Rescue Village in Geauga County. Pam Malcuit, Deposit Operations Specialist and Nicole Marchio, Deposit Operations Manager made the donation on behalf of Middlefield Bank to Jamie Smith from Rescue Village. The Mantua Branch marches in support of the town’s annual Potato Festival. MB’s Dave and Lauren Harth present a $550 check to the Geauga County Dog Shelter from funds raised via the Risk and Compliance teams. Also pictured are shelter volunteer Virginia and Deputy Warden Cindy. 16 Middlefield Banc Corp. 2021 Summary Annual Report Orwell Branch Manager Jim Long volunteers at Junior Achievement of Ashtabula’s Designer Bag Bingo event. VP, Commercial Lending John Solich represents Middlefeld Bank as a member of Geauga Growth Partnership’s Board at their annual Fast Track 50 event. VP, Marketing and Communications Director Melissa Maki visits Lakeview Local Schools to teach 7th and 8th graders a course from Junior Achievement of Mahoning Valley. The Garrettsville team attended the town’s annual Peach Social and Car Cruise. The team even helped make and serve the event’s famed peach pies. The Risk Department presents a $500 check to WomenSafe, a nonprofit domestic violence shelter serving Northeast Ohio as part of Domestic Violence Awareness Month. The Solon Team shows their strength during our 120th Anniversary Celebration. MB partnered with United Way Services of Geauga County to help distribute food to families at Kent State University, Geauga Campus and Twinsburg Academic Center. Pictured are Karen Perko and Claudia Toth of UWGC and Melissa Maki and Universal Banking Supervisor Rachel Dean of Middlefeld Bank. Our Twinsburg Branch celebrates their Community Appreciation Day complete with food from Chasin’ Tails BBQ, giveaways, and lots of fun had by friends and customers. Middlefield Banc Corp. 2021 Summary Annual Report 17 MENTOR LAKE CHARDON ASHTABULA ORWELL BEACHWOOD NEWBURY SOLON TWINSBURG GEAUGA MIDDLEFIELD CORTLAND MANTUA GARRETTSVILLE PORTAGE TRUMBULL THE MIDDLEFIELD BANKING COMPANY LOCATIONS DELAWARE POWELL SUNBURY PLAIN CITY WESTERVILLE DUBLIN FRANKLIN COLUMBUS 18 Middlefield Banc Corp. 2021 Summary Annual Report CLEVELANDCOLUMBUSFRANKLINDELAWAREPORTAGETRUMBULLASHTABULA MENTOR LAKE CHARDON BEACHWOOD NEWBURY SOLON MIDDLEFIELD TWINSBURG GEAUGA ASHTABULA ORWELL CORTLAND MANTUA GARRETTSVILLE PORTAGE TRUMBULL Administrative Offices Garrettsville Newbury 11110 Kinsman Road Suite 1 P.O. Box 208 Newbury, Ohio 44065 440.564.7000 Orwell 30 South Maple Street P.O. Box 66 Orwell, Ohio 44076 440.437.7200 Plain City 490 South Jefferson Avenue Plain City, Ohio 43064 614.689.2622 Powell 15200 Madison Road 8058 State Street 10628 Sawmill Parkway Middlefield, Ohio 44062 Garrettsville, Ohio 44231 Powell, Ohio, 43065 888.801.1666 Beachwood 330.527.2121 614.392.5702 Lake County Loan Solon 25201 Chagrin Boulevard Production Office Suite 120 8373 Mentor Avenue 6134 Kruse Drive Solon, Ohio 44139 Beachwood, Ohio 44122 Mentor, Ohio 44060 440.542.3789 216.359.5580 Chardon 348 Center Street P.O. Box 1078 440.632.8140 Mantua Sunbury 492 West Cherry Street 10691 Main Street Sunbury, Ohio 43074 Mantua, Ohio 44255 740.913.0632 Chardon, Ohio 44024 330.274.0881 Twinsburg 440.286.1222 Cortland Middlefield Main 2351 Edison Boulevard 15985 East High Street P.O. Box 560 3450 Niles-Cortland Road P.O. Box 35 Twinsburg, Ohio 44087 Cortland, Ohio 44410 Middlefield, Ohio 44062 330.425.3033 330.637.3208 Dublin 6215 Perimeter Drive Dublin, Ohio 43017 614.793.4631 440.632.8115 Westerville Middlefield West 17 North State Street 15545 West High Street Westerville, Ohio 43081 P.O. Box 35 614.890.7832 Middlefield, Ohio 44062 440.632.8113 Middlefield Banc Corp. 2021 Summary Annual Report 19 DELAWARE POWELL SUNBURY PLAIN CITY WESTERVILLE DUBLIN FRANKLIN COLUMBUS CLEVELANDCOLUMBUSFRANKLINDELAWAREPORTAGETRUMBULLASHTABULA COMMUNITY Fostering relationships and maintaining the tradition of local support by being a trusted ambassador of the Bank. Every interaction within our communities is an opportunity to build deeper relationships with our customers and prospective customers. CUSTOMER SERVICE Forging relationships by adding value through proactive and responsive service. CORE VALUES TEAM FOCUS Our team members are our most valuable asset. We support one another through collaboration, passion, and professionalism. Our people differentiate us from our competitors. SHAREHOLDER COMMITMENT Continuously building shareholder value by providing prudent and fiscally responsible management combined with effective and efficient stewardship of our resources. 20 Middlefield Banc Corp. 2021 Summary Annual Report DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN Shareholders may elect to reinvest their dividends in additional shares of Middlefield Banc Corp.’s common stock through the Company’s Dividend Reinvestment Plan. To arrange automatic purchase of shares with quarterly dividend proceeds, please call 1.800.736.3001. DIRECT DEPOSIT OF DIVIDENDS The direct deposit program, which is offered at no charge, provides for automatic deposit of quarterly dividends directly to a checking or savings account with The Middlefield Banking Company. For information regarding this program, please call 888.801.1666. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Middlefield Banc Corp. had approximately 947 shareholders of record as of February 25, 2022. Our common stock trades on the NASDAQ Capital Market under the ticker symbol MBCN. The table below shows the high and low bid prices of and cash dividends paid on the Company’s common stock during the periods indicated. The high and low bid prices are compiled from data available through NASDAQ. This information does not reflect retail mark-up, markdowns or commissions, and does not necessarily represent actual transactions. SHAREHOLDER INFORMATION CORPORATE HEADQUARTERS Middlefield Banc Corp. 15985 East High Street P.O. Box 35 Middlefield, Ohio 44062 888.801.1666 • 440.632.1666 fax: 440.632.1700 FORM 10-K AND 10-Q AVAILABILITY A copy of Middlefield Banc Corp.’s Annual Report on Form 10-K and Quarterly Reports on 10-Q filed with the Securities and Exchange Commission will be furnished to any shareholder, free of charge, upon written or e-mail request to: Donald L. Stacy Senior Vice President, Treasurer and CFO Middlefield Banc Corp. P.O. Box 35 Middlefield, Ohio 44062 or dstacy@middlefieldbank.com MARKET MAKERS The symbol for Middlefield Banc Corp. common stock is MBCN and the CUSIP is 596304204. Boenning & Scattergood, Inc. 866.326.8094 614.228.5391 www.boenninginc.com Keefe, Bruyette & Woods 800.342.5529 www.kbw.com NOTICE OF ANNUAL MEETING The Annual Meeting of Shareholders of Middlefield Banc Corp. will be held at 1:00 p.m. Eastern Time on Wednesday, May 11, 2022, via a live webcast at http://www.meetnow.global/ MYFZMTM You will need the control number located on your proxy card to participate. TRANSFER AGENT AND REGISTRAR Computershare P.O. Box 505000 Louisville, KY 40233-5000 1.800.736.3001 INDEPENDENT AUDITORS S.R. Snodgrass, P.C. 2009 Mackenzie Way, Suite 340 Cranberry Township, PA 16066 724.934.0344 INTERNET INFORMATION Information on the Company and its subsidiary bank is available on the Internet at www.middlefieldbank.bank. DIVIDEND PAYMENT DATES Subject to action by the Board of Directors, Middlefield Banc Corp. will pay dividends in March, June, September, and December. 2021 First Quarter Second Quarter Third Quarter Fourth Quarter 2020 First Quarter Second Quarter Third Quarter Fourth Quarter HIGH CLOSE LOW CLOSE CASH DIVIDENDS PER SHARE $ 25.58 $ 24.48 $ 24.38 $ 27.55 $ 26.70 $ 22.38 $ 21.50 $ 23.47 $19.00 $20.60 $ 22.81 $ 23.38 $ 13.06 $ 15.74 $ 17.29 $ 19.00 $ 0.16 $ 0.16 $ 0.16 $ 0.21 $ 0.15 $ 0.15 $ 0.15 $ 0.15 Middlefield Banc Corp. 15985 East High Street, Middlefield, Ohio 44062 888.801.1666 www.middlefieldbank.bank
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