More annual reports from Middlefield Banc Corp.:
2023 Report2022 Summary Annual Report Growing Our Reach to Better Serve You CONTINUED STRONG EARNINGS $2.60 EARNINGS PER SHARE TOTAL ASSETS (in thousands) NET INCOME (in thousands) $ 1 , 6 8 7 6 8 2 , $ 1 , 2 4 8 3 9 8 , $ 1 , 1 8 2 4 7 5 , $ 1 , 3 9 1 , 9 7 9 $ 1 , 3 3 1 , 0 0 6 , $ 1 8 6 3 3 , $ 1 5 6 7 3 , $ 1 2 4 3 1 $ 1 2 7 1 1 , , $ 8 3 4 9 RETURN ON AVERAGE EQUITY DIVIDENDS DECLARED PER SHARE . 1 2 7 4 % . 1 1 2 5 % ( 1 ) $ 0 8 1 . $ 0 6 9 . $ 0 5 9 . $ 0 5 7 . . $ 0 6 0 . 9 9 4 % . 9 3 5 % . 6 0 7 % (1) 2022 includes $2.3 million in one-time merger expenses. 2000000 1500000 1000000 500000 0 20000 15000 10000 5000 0 CHAIRMAN’S LETTER TO SHAREHOLDERS: ON BEHALF OF THE MIDDLEFIELD BANC CORP. BOARD OF DIRECTORS, I am proud of the continued financial success, operating growth, and community support our Company produced in 2022. As the operating environment grows in complexity, Middlefield has demonstrated its ability to evolve and continuously develop to remain independent and build sustained value for our shareholders. Middlefield’s Board and Leadership Team worked together to develop a strategic plan focused on building a Bank with over $1.5 billion in total assets. I am pleased to report that we ended 2022 with total assets of $1.69 billion due to continued organic growth and the contribution of the Liberty Bancshares, Inc. merger. The merger with Liberty Bancshares expands our presence within Central and Western Ohio while generating meaningful earnings per share accretion, a minimal tangible book value dilution and a manageable earn-back period. 12 15 9 6 The merger expanded our scale and allowed us to add experienced and committed Ohio bankers to our leadership team that share our community banking philosophy and approach. We also added accomplished directors who know our markets and customers and deeply understand what it takes for a community bank to survive in today’s market environment. New members to Middlefield’s Board of Directors include Ronald L. Zimmerly, Jr., Liberty’s President and CEO, Mark R. Watkins, Liberty’s Chairman of the Board, and Spencer T. Cohn, a representative of Castle Creek Capital, Liberty’s largest shareholder. I look forward to working with Ron, his team, and Mark and Spencer as we focus on serving our local communities. 0 3 1.0 0.8 As we focus on successfully integrating the Liberty Bancshares merger over the near term, it is also critically important to continue pursuing long-term strategies to serve more customers within our robust Ohio communities. This includes introducing new products to attract more deposits and drive noninterest income, enhancing the delivery of personal and commercial products, and expanding our marketing efforts to promote the value of Middlefield Bank within our communities. Maintaining a high-quality lending culture and remaining well-capitalized is also imperative. These operating principles are fundamental as economic uncertainty increased during 2022. 0.6 0.4 0.2 a strong and committed team. Over the years, Middlefield’s Board has developed a comprehensive succession plan focused on attracting leaders from outside the organization and developing motivated executives from within our Company. Our transformation over the past couple of years demonstrates the success of our thorough succession planning process. In addition to our succession and strategic plans, our Board continues to review and modernize our governance and procedures. Middlefield’s Directors participated in Columbus’s FDIC Director training session this past summer. We were one of a few banks that participated, as we continue to focus on maintaining positive relationships between our Directors and our regulators. During the year, Middlefield’s corporate governance and nominating committee recommended specific minimum stock ownership levels for our CEO and CFO, subsequently approved by the full Board. We also continue to pursue a comprehensive ESG framework to guide our ESG efforts into the future. 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. Middlefield returned 74.1% of 2022 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 17.6% year-over-year increase in our regular fourth-quarter dividend payment to $0.20 per share, and the Board approved a $0.10 special dividend that was also paid in the 2022 fourth quarter. I am proud of the progress we made in 2022 and excited by the opportunities we have in the future for our customers, team members, communities, and shareholders. Our continued success and ability to serve our customers directly result from 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. We believe the successful execution of our strategic plan will continue to create sustained value for our shareholders, which is dependent on developing 0.0 WILLIAM J. SKIDMORE Chairman, Board of Directors Middlefield Banc Corp. 2022 Summary Annual Report 1 TO OUR SHAREHOLDERS AND FRIENDS: OUR PERFORMANCE DURING 2022 REFLECTS THE POSITIVE OUTCOMES OF THE LONG-TERM STRATEGIES we have been pursuing to create shareholder value by transforming the Company and creating a leading, independent community bank. Representative of the success of these strategies is the December 2022 merger with Liberty Bancshares, Inc., which has allowed us to enhance our scale, strengthen our financial position, and expand our services and offerings in both Central and Western Ohio markets. With the addition of Liberty’s six branches, Middlefield now operates 22 full-service banking centers across a 13-county operating footprint and a loan production office in Mentor, Ohio. We ended the year with record total assets of $1.69 billion, making Middlefield one of Ohio’s largest independent community banks. Net income for the year ended December 31, 2022, was $15.7 million, or $2.59 per diluted share, compared to $18.6 million, or $3.00 per diluted share, for the same period last year. Non-GAAP net income, adjusted for certain one-time items and expenses associated with the Liberty Bancshares, Inc. merger, was $18.3 million, or $3.03 per diluted share for the 2022 twelve-month period, compared to $18.5 million, or $2.98 per diluted share for the same period of 2021. Our performance during 2022 was especially encouraging as we navigated rapid increases in interest rates by the Federal Reserve, growing competition for deposits and increased economic uncertainty. Record net interest income of $50.2 million was the primary catalyst of our overall profitability in 2022. This increase, which was 5.8% higher than 2021, was driven by a 30-basis point expansion in our net interest margin to 4.08%, strong organic loan growth and the contribution of the Liberty Bancshares merger. In addition, our asset quality remains strong across our portfolio, as nonperforming loans to total loans were just 0.16% at December 31, 2022, compared to 0.49% at December 31, 2021. Our success is driven by our core values of fostering community relationships, continuously building shareholder value, adding value to our customers through proactive and responsive service, and supporting our team members through collaboration, passion, and professionalism. As we follow these core business tenets, we allow ourselves to drive continued success. As part of the Liberty Bancshares merger, Ronald L. Zimmerly, Jr., Liberty’s President and CEO, joined Middlefield as President and as a member of the Board of Directors. Ron is a proven banker and experienced leader who has added immediate value to our organization. Mark Watkins, Liberty’s former Chairman of the Board, and Spencer T. Cohn joined the Board of Directors of our Company. We also added Thomas J. Simon and Thomas E. Griffith, both former Liberty Directors, to the Board of Directors of The Middlefield Banking Company. I look forward to working with these leaders as we drive the future success of our Company. We promoted several Middlefield team members during the year. Alfred F. Thompson, Jr. was promoted to EVP/Chief Credit Officer, responsible for leading the Company’s credit administration and loan administration programs. Courtney Erminio was promoted to EVP/Chief Risk Officer and is responsible for leading the Company’s risk, audit, and compliance programs. In February 2023, Donald L. Stacy, SVP and Chief Financial Officer, announced that he will retire from the Company effective April 30, 2023. On behalf of the Board of Directors and the entire management team, we are tremendously grateful to Don for his commitment and dedication to Middlefield. He has been instrumental in the growth and success of the Company, playing a pivotal role in developing our business strategies and ensuring long-term financial excellence. I will miss Don’s daily presence as I have found him knowledgeable, dependable, and forthright. We wish him all the best as he moves to his next chapter. As part of the Company’s comprehensive succession plan, Michael C. Ranttila has been elected to succeed Don as SVP and Chief Financial Officer of the Company, effective May 1, 2023. Mike brings proven financial acumen and extensive institutional knowledge of Middlefield that will prove invaluable as he assumes the role of Chief Financial Officer. We have built a solid Our 2022 performance demonstrates the success of Middlefield’s multi-year transformation, the favorable execution of our strategic plan, and the valuable services we provide our communities. I am extremely proud of Middlefield’s success, and I am confident we are well-positioned to create an even stronger Company as we move forward into 2023. On behalf of everyone at the Middlefield Banc Corp., I thank you for your continued support. Sincerely, JAMES R. HESLOP, II Chief Executive Officer I AM EXCITED BY THE LONG-TERM OPPORTUNITIES WE HAVE TO CREATE VALUE FOR OUR CUSTOMERS, EMPLOYEES AND SHAREHOLDERS AS WE FOCUS ON GROWING OUR PRESENCE WITHIN NORTHEAST, CENTRAL AND WESTERN OHIO. team and a deep bench of experienced managers. I am excited by the prospects of what our team can do together to drive Middlefield’s record of generating long-term shareholder value. Allocating capital remains an important component of our strategic plan as we seek to balance the retention of capital for growth and financial stability with the drive to properly reward our shareholders. Since January 2019, we have repurchased 898,901 shares, representing 13.9% of the outstanding shares prior to our repurchase program. For the year ended December 31, 2022, we invested $6.1 million in our share repurchase program, repurchasing 229,420 shares of our common stock at an average price of $26.67. On February 3, 2023, Middlefield’s Board of Directors increased the Company’s share repurchase program by an additional 300,000 shares, equating to approximately 3.7% of the Company’s outstanding shares before this new authorization. This repurchase program was approved after Middlefield completed the repurchase of 300,000 shares previously authorized in February 2022. We also paid a record $5.5 million in dividends during 2022, reflecting an increase of 29.5% over the prior year. On a per-share basis, Middlefield declared cash dividends of $0.81, an increase of 17.4% from $0.69 per share last year. Dividends in 2022 included a $0.10 per share one-time dividend payment declared in the fourth quarter. As we look to 2023 and beyond, I am excited by the long-term opportunities we have to create value for our customers, employees and shareholders as we focus on growing our presence within Northeast, Central and Western Ohio. Over the near term, we are focused on the successful integration of Liberty into Middlefield. We also expect a more challenging macroeconomic environment primarily associated with restrictive Federal Reserve monetary policies. We are well-positioned to navigate the uncertainty due to our strong capital position, excellent asset quality and favorable net interest margin. Most importantly, our solid financial position allows us to support our local communities during an increasingly complex operating environment while continuing to focus on creating value and returning capital to our shareholders. 2 Middlefield Banc Corp. 2022 Summary Annual Report Middlefield Banc Corp. 2022 Summary Annual Report 3 DECADE OF PROGRESS (Dollar amounts in thousands, except earnings per share data) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 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 (recoveries) charge-offs Full time employees (average equivalents) Number of offices Earnings per share Dividends per share Book value per share Dividends payout ratio Cash dividends paid Return on average assets Return on average equity $ 28,178 $ 27,874 $ 28,595 $ 29,994 $ 43,995 $ 50,357 $ 54,525 $ 52,638 $ 52,335 $ 54,906 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 3,820 24,775 315 24,460 4,044 20,077 8,427 1,562 $ 7,028 $ 7,180 $ 6,865 $647,090 $677,531 $735,139 568,836 586,112 624,447 53,473 63,867 62,304 428,679 463,738 527,325 7,046 6,846 6,385 929 125 10 570 139 10 776 143 10 $ 1.74 $ 1.76 $ 1.71 0.52 13.16 0.52 15.56 0.54 16.59 29.84% 29.54% 30.90% $ 2,048 $ 2,121 $ 2,153 1.06% 13.17% 1.07% 12.17% 0.97% 10.62% 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 4,195 48,140 700 47,440 7,249 31,991 22,698 4,065 4,729 50,177 — 50,177 6,746 38,030 18,893 3,220 $ 6,416 $ 9,455 $ 12,431 $ 12,711 $ 8,349 $ 18,633 $ 15,673 $787,821 $1,106,336 $1,248,398 $1,182,475 $1,391,979 $1,331,006 $1,687,682 629,934 76,960 602,542 6,598 357 139 11 878,194 1,016,067 1,020,843 1,225,200 1,166,610 1,402,019 119,863 916,023 7,190 453 190 14 128,290 984,681 7,428 602 200 15 137,775 977,490 6,768 1,550 189 16 143,810 145,335 197,691 1,090,626 967,349 1,338,434 13,459 3,149 184 16 14,342 14,438 (183) 185 16 (96) 238 22 $ 1.52 $ 1.56 $ 1.92 $ 1.96 $ 1.31 $ 3.01 $ 2.60 0.54 17.07 0.54 18.63 0.59 19.77 0.57 21.45 0.60 21.86 0.69 24.68 0.81 23.98 36.13% 35.52% 30.40% 28.99% 45.92% 22.76% 35.03% $ 2,318 $ 3,358 $ 3,779 $ 3,685 $ 3,834 $ 4,240 $ 5,490 0.85% 9.33% 0.88% 8.52% 1.09% 9.94% 1.05% 9.35% 0.64% 6.07% 1.36% 12.74% 1.17% 11.25% 4 Middlefield Banc Corp. 2022 Summary Annual Report Middlefield Banc Corp. 2022 Summary Annual Report 5 CONSOLIDATED BALANCE SHEET CONSOLIDATED STATEMENT OF INCOME (Dollar amounts in thousands, except shares) 2022 2021 (Dollar amounts in thousands, except per share data) 2022 2021 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 Time 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, 9,916,466 and 7,330,548 shares issued; 8,245,235 and 5,888,737 shares outstanding Retained earnings Accumulated other comprehensive (loss) income Treasury stock, at cost; 1,671,231 and 1,441,811 shares TOTAL STOCKHOLDERS’ EQUITY TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY See accompanying notes to the consolidated financial statements. 6 Middlefield Banc Corp. 2022 Summary Annual Report $ 51,404 2,405 $ 97,172 22,322 53,809 915 164,967 — 191,748 380,580 58 , 2 51 296,308 195,602 128,065 94,199 8,1 1 9 1,352,872 14,438 1,338,434 21,961 31,735 7,701 3 3 , 8 1 1 5,821 28,528 119,494 818 170,199 1,051 111,470 283,618 31,189 240,089 148,812 104,355 54,148 8,010 981,691 14,342 967,349 17,272 15,071 1,403 1 7,060 6,992 14,297 $1,687,682 $1,331,006 $ 503,907 164,677 187,498 307,917 238,020 1,402,019 — 65,000 65,000 12,059 10,913 $ 334,171 196,308 177,281 260,125 198,725 1,166,610 — — — 12,901 6,160 1,489,991 1,185,671 161,029 94,154 (22,144) (35,348) 197,691 87,131 83,971 3,462 (29,229) 145,335 $1,687,682 $1,331,006 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 (Losses) gains on equity securities Gain on other real estate owned Earnings on bank-owned life insurance Gain on sale of loans Revenue from investment services Gross rental income 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 Other real estate owned writedowns Advertising expense Software amortization expense Core deposit intangible amortization Gross other real estate owned expenses Merger-related costs Other expense Total noninterest expense Income before income taxes Income taxes NET INCOME EARNINGS PER SHARE Basic Diluted $ 48,513 472 219 1,811 3,707 184 54,906 4,018 307 404 4,729 50,177 — 50,177 3,850 (173) — 459 24 674 951 961 6,746 17,548 2,033 1,074 3,701 1,157 329 1,500 1,200 1,033 143 372 707 2,382 4,851 38,030 18,893 3,220 $ 15,673 $ 2.60 2.59 $47,896 90 3 1,679 2,565 102 52,335 3,913 — 282 4,195 48,140 700 47,440 3,425 209 43 546 1,240 727 180 879 7,249 17,151 2,048 1,361 3,298 1,144 494 1,313 — 885 361 321 54 — 3,561 31,991 22,698 4,065 $18,633 $ 3.01 3.00 See accompanying notes to the consolidated financial statements. Middlefield Banc Corp. 2022 Summary Annual Report 7 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. JAMES R. HESLOP, II 2001 Chief Executive Officer Middlefield Banc Corp. The Middlefield Banking Company RONALD L. ZIMMERLY, JR. 2022 President Middlefield Banc Corp. The Middlefield Banking Company JAMES J. McCASKEY 2004 Vice Chairman, Board of Directors Middlefield Banc Corp. The Middlefield Banking Company President McCaskey Landscape and Design, LLC MICHAEL C. VOINOVICH 2020 Executive Vice President and Chief Investment Officer of ECHO Health, Inc. KEVIN A. DiGERONIMO 2021 Principal DiGeronimo Companies JENNIFER L. MOELLER* 2021 Angel Investor THOMAS E. “TED” GRIFFITH* 2022 Partner Powell Seeds, LLC CAROLYN J. TURK, C.P.A. 2004 Retired Financial Executive Molded Fiber Glass Companies KENNETH E. JONES 2008 Retired Financial Executive Chesapeake Financial Advisors DARRYL E. MAST 2013 Retired: Hattie Larlham Care Group and Hattie Larlham Foundation THOMAS W. BEVAN 2017 Chief Executive Officer Bevan & Associates, LPA, Inc. THOMAS J. SIMON* 2022 Chairman of the Board Coverlink Insurance SPENCER T. COHN 2022 Director Castle Creek Capital LLC MARK R. WATKINS 2022 Partner Watkins Farm Central Ohio Region Advisory Board: JEFFREY A. GONGWER; GEORGE J. KONTOGIANNIS, AIA; TIMOTHY C. LONG; MICHAEL J. MORAN *Director of The Middlefield Banking Company 8 Middlefield Banc Corp. 2022 Summary Annual Report Middlefield Banc Corp. 2022 Summary Annual Report 9 MIDDLEFIELD BANC CORP. OFFICERS THE MIDDLEFIELD BANKING COMPANY OFFICERS JAMES R. HESLOP, II Chief Executive Officer RONALD L. ZIMMERLY, JR. President DONALD L. STACY Senior Vice President/ Treasurer and Chief Financial Officer MICHAEL C. RANTTILA Vice President of Finance JULIE E. SHAW Corporate Secretary TERESA M. HETRICK Assistant Corporate Secretary JAMES R. HESLOP, II 1996 Chief Executive Officer RONALD ZIMMERLY 1999 President DONALD L. STACY 1999 Senior Executive Vice President Treasurer of the Bank TERESA M. HETRICK 1996 Executive Vice President Deposit Services ALFRED F. THOMPSON, JR. 1996 Executive Vice President Chief Credit Officer ANNA MARIA BRENNEMAN 2009 President, Western Ohio Region COURTNEY M. ERMINIO 2010 Executive Vice President Chief Risk Officer MICHAEL C. RANTTILA 2017 Executive Vice President Chief Financial Officer ROBERT J. DAWSON 2015 Executive Vice President Chief Lending Officer MICHAEL L. ALLEN, CPA 2018 Executive Vice President Financial and Deposit Services THOMAS WILSON, CFA 2020 Executive Vice President Corporate Development JULIE E. SHAW 2019 Executive Assistant Corporate Secretary DAVID KUCERA 2004 Vice President Controller ANGELA HERSH 2007 Vice President Mortgage and Consumer Lender LAURA E. NEALE 2010 Vice President Commercial Lending Officer BRETT A. RICHEY 2010 Vice President Special Assets Manager JOHN SOLICH 2015 Vice President Commercial Lending Officer THOMAS PARKER 2016 Vice President Commercial Lender NICOLE MARCHIO 2017 Vice President Deposit Operations Officer STANLEY GREGORIN, JR. 2018 Vice President Commercial Lender MELISSA M. MAKI 2018 Vice President Marketing Communications Director KEVIN SERNA 2019 Vice President Commercial Lender PATRICK G. PAOLETTA 2020 Vice President Commercial Lender REBECCA BRAHENEY, CPA 2021 Vice President Chief Accounting Officer VANCE STEELE 2022 Vice President Commercial Lender PATRICIA ARNETT 1987 Senior Vice President Treasury Management Director THOMAS R. NEIKIRK 1994 Senior Vice President Commercial Lender 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 CRAIG E. REAY 2011 Senior Vice President Credit Administration LORI A. GRAHAM 2013 Senior Vice President Compliance and CRA Officer DANIEL B. PLANT 2014 Senior Vice President Mortgage Lending REBECCA NOBLIT 2017 Senior Vice President Credit Administration GREG T. YURCO 2019 Senior Vice President Commercial Lender GARY C. KERN 2020 Senior Vice President Chief Information Officer 10 Middlefield Banc Corp. 2022 Summary Annual Report Middlefield Banc Corp. 2022 Summary Annual Report 11 THE MIDDLEFIELD BANKING COMPANY OFFICERS (continued) RACHEL DEAN 1985 Assistant Vice President Regional Branch Administrator Northeast Ohio Region KATHLEEN M. VANEK 1998 Assistant Vice President Branch Manager MARLIN J. MOSCHELL 2000 Assistant Vice President Lending Officer HEATHER COX 2002 Assistant Vice President Marketing CORSIE ARN 2003 Assistant Vice President Branch Manager NANETTE PFEIFFER 2003 Assistant Vice President Commercial Loan Specialist KRISTINA STEPHENS 2006 Banking Officer Account Processing Manager KEVIN J. MITCHELL 2007 Assistant Vice President Lender II MELISSA K. GAY 2008 Assistant Vice President BSA Officer JEAN M. CARTER 2009 Assistant Vice President Branch Manager KELLY HECKMAN 2009 Assistant Vice President Compliance Assistant DALE L. MOORE 2009 Assistant Vice President Project Manager and Bank Security Officer AMANDA HOYT 2016 Assistant Vice President Credit Manager CORRINE MITCHELL 2016 Assistant Vice President Regional Branch Administrator Western Ohio Region LAURA STIMMEL 2017 Assistant Vice President Mortgage and Consumer Lender CHRISTOPHER J. HESS 2018 Assistant Vice President Branch Manager LISABETH A. MULDOWNEY 2012 Assistant Vice President Branch Manager RYAN LANE 2019 Assistant Vice President Mortgage and Consumer Lender MICHELLE L. BAHLEDA 2014 Banking Officer Lender JAMES LONG 2019 Assistant Vice President Branch Manager BRIAN MOORE 2019 Assistant Vice President Mortgage and Consumer Lender DAVID WILLOBY 2019 Assistant Vice President Commercial Lender STEPHEN J. LEBOLD 2014 Assistant Vice President Branch Manager COLLEEN PIRRMANN 2014 Assistant Vice President Regional Branch Administrator Central Ohio Region WARREN R. COX, II 2016 Assistant Vice President Branch Manager 12 Middlefield Banc Corp. 2022 Summary Annual Report MENTOR (LPO) LAKE CHARDON MENTOR (LPO) ASHTABULA ORWELL ASHTABULA ORWELL CORTLAND BEACHWOOD NEWBURY SOLON LAKE MIDDLEFIELD CHARDON GEAUGA TWINSBURG BEACHWOOD SOLON MANTUA NEWBURY MIDDLEFIELD GARRETTSVILLE TWINSBURG GEAUGA PORTAGE TRUMBULL CORTLAND MANTUA GARRETTSVILLE PORTAGE TRUMBULL ASHTABULA CLEVELAND GEAUGA TRUMBULL MENTOR (LPO) PORTAGE LAKE CHARDON BEACHWOOD NEWBURY SOLON MIDDLEFIELD TWINSBURG GEAUGA ASHTABULA ORWELL CORTLAND MANTUA GARRETTSVILLE PORTAGE TRUMBULL THE MIDDLEFIELD BANKING COMPANY LOCATIONS Middlefield Banc Corp. 2022 Summary Annual Report 15 ADA HARDIN ADA KENTON HARDIN KENTON BELLEFONTAINE UNION LOGAN BELLEFONTAINE HARDIN LOGAN LOGAN MARYSVILLE UNION PLAIN CITY DELAWARE POWELL SUNBURY WESTERVILLE DUBLIN MARYSVILLE DELAWARE FRANKLIN POWELL SUNBURY PLAIN CITY WESTERVILLE COLUMBUS DUBLIN FRANKLIN COLUMBUS UNION DELAWARE FRANKLIN COLUMBUS ADA HARDIN KENTON BELLEFONTAINE 14 Middlefield Banc Corp. 2022 Summary Annual Report 14 Middlefield Banc Corp. 2022 Summary Annual Report UNION LOGAN SUNBURY MARYSVILLE DELAWARE POWELL PLAIN CITY WESTERVILLE DUBLIN FRANKLIN COLUMBUS THE MIDDLEFIELD BANKING COMPANY LOCATIONS Administrative Offices 15200 Madison Road Middlefield, Ohio 44062 888.801.1666 Ada 118 South Main Street Ada, Ohio 45810 419.634.5015 Beachwood 25201 Chagrin Boulevard Suite 120 Beachwood, Ohio 44122 216.359.5580 Bellefontaine North 1120 North Main Street Bellefontaine, Ohio 43311 937.592.5688 Bellefontaine South 1454 South Main Street Bellefontaine, Ohio 43311 937.593.9694 Chardon 348 Center Street P.O. Box 1078 Chardon, Ohio 44024 440.286.1222 Cortland 3450 Niles-Cortland Road Cortland, Ohio 44410 330.637.3208 Dublin 6215 Perimeter Drive Dublin, Ohio 43017 614.793.4631 Garrettsville 8058 State Street Garrettsville, Ohio 44231 330.527.2121 Kenton 100 East Franklin Street Kenton, Ohio, 43326 419.673.1217 Lake County Loan Production Office 8373 Mentor Avenue Mentor, Ohio 44060 440.632.8140 Mantua 10691 Main Street Mantua, Ohio 44255 330.274.0881 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 10628 Sawmill Parkway Powell, Ohio, 43065 614.392.5702 Solon 6134 Kruse Drive Solon, Ohio 44139 440.542.3789 Marysville 160 Coleman’s Crossing Boulevard Marysville, Ohio 43040 937.642.0467 Sunbury 492 West Cherry Street Sunbury, Ohio 43074 740.913.0632 Middlefield Main 15985 East High Street P.O. Box 35 Middlefield, Ohio 44062 440.632.8115 Middlefield West 15545 West High Street P.O. Box 35 Middlefield, Ohio 44062 440.632.8113 Newbury 11110 Kinsman Road Suite 1 P.O. Box 208 Newbury, Ohio 44065 440.564.7000 Twinsburg 2351 Edison Boulevard P.O. Box 560 Twinsburg, Ohio 44087 330.425.3033 Westerville 17 North State Street Westerville, Ohio 43081 614.890.7832 Westerville* 33 South Cleveland Avenue Westerville, Ohio 43081 614.948.7102 * Please note the Westerville branch located at 33 South Cleveland Avenue will be relocated effective April 14, 2023. COMMUNITY INVOLVEMENT 2022 As a community bank, The Middlefield Banking Below is a list of some of those organizations: Company strives to be a leader, advocate, and a partner for the communities we serve. We do this in part through charitable giving, volunteerism, and strong support for nonprofit and vital community organizations. In 2022, Middlefield Bank grew its Ohio footprint to join Liberty National Bank—a bank distinguished by its charitable partnerships and hometown focus. Bringing our banks together will only help extend our reach with a renewed focus on our combined impact across 19 communities. As the bank grows, one thing remains 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. Our officers and employees are in leadership roles in more than 30 organizations including non-profits, direct services, and education. Together, we can continue to make a positive impact on the lives of those in need and build stronger, more connected communities. • 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, Mad River and Mahoning Valley) • Next Step (Geauga and Portage) • Rotary Clubs (Burton/Middlefield and Chardon) • United Way (Central Ohio, Delaware, Greater Cleveland, Geauga, Lake, Logan, Portage, Union, Summit and Trumbull) • Women’s Recovery Center (Cuyahoga) • WomenSafe at the Green House (Chardon) 16 Middlefield Banc Corp. 2022 Summary Annual Report Middlefield Banc Corp. 2022 Summary Annual Report 17 COMMUNITY INVOLVEMENT The Western Ohio team attends a fundraiser for the Armory restaurant in Kenton. MB employees volunteer at Community Care Day in Logan County. MB team members attend Designer Bag Bingo to raise funds for Junior Achievement of Ashtabula. The Garrettsville team poses with their many prepared pies for sale at the Garettsville Peach Social. The Powell Branch takes part in the city’s Candy by the Carload event with a pirate themed display. Mantua branch takes part in the Mantua-Shalersville Fire Department open house. Chairman Bill Skidmore and Director Jim McCaskey pick up trash for Chardon Rotary Club. Chardon Branch Manager Jean Carter discusses banking with students from Chardon Local Schools. The Central Ohio team gathers at Dublin for the Hillary Moore Memorial Blood drive.. Branch Managers Brian Cain and Michelle Burke volunteering to teach financial wellness at Kinetico. Employees collect donations for coats, hats and gloves for Project Warmth. VP, Commercial lender Jack Gregorin presents Mentor’s Amvets Post 109 with a check to help with their future electronic sign. MB Investment Services advisor Tom Hart fires up his branded Olds Dynamic 88 for the Garrettsville Summerfest. MB team members volunteer for “JA in a Day” at the Robert Jameson School in Cleveland. HR delivers their pet drive’s donations to the Geauga County Dog Warden’s office. Middlefield Bank team attends Geauga County’s Fast Track 50 event. Members of the Bellefontaine branches receiving an award for service at a United Way event. Members of the Solon Branch collect donations for the food pantry for Solon’s Church of the Resurrection. 18 Middlefield Banc Corp. 2022 Summary Annual Report Middlefield Banc Corp. 2022 Summary Annual Report 19 CORE VALUES SHAREHOLDER INFORMATION 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. 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. 2022 Summary Annual Report 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 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 2023 Annual Meeting of Shareholders of Middlefield Banc Corp. will be held on Wednesday, May 10, 2023 at 1:00 p.m. Eastern Time. We have adpoted a virtual format for our Annual Meeting. We will provide a live webcast of the Annual Meeting at www.meetnow.global/MNQMY4G 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. 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. RELATED STOCKHOLDER MATTERS Middlefield Banc Corp. had approximately 1,199 shareholders of record as of February 22, 2023. 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. 2022 First Quarter Second Quarter Third Quarter Fourth Quarter 2021 First Quarter Second Quarter Third Quarter Fourth Quarter HIGH CLOSE LOW CLOSE CASH DIVIDENDS PER SHARE $26.08 $ 26.86 $ 28.38 $29.60 $ 25.58 $ 24.48 $ 24.38 $ 27.55 $ 24.10 $ 24.35 $ 25.03 $ 27.36 $19.00 $20.60 $ 22.81 $ 23.38 $ 0.17 $ 0.17 $ 0.17 $0.30 $ 0.16 $ 0.16 $ 0.16 $ 0.21 Middlefield Banc Corp. 15985 East High Street, Middlefield, Ohio 44062 888.801.1666 www.middlefieldbank.bank
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