Middlefield Banc Corp.
Annual Report 2024

Plain-text annual report

22 Middlefield Banc Corp. 2024 Summary Annual Report 20 24 FOUNDATION For Success SUMMARY ANNUAL REPORT 23 Middlefield Banc Corp. 2024 Summary Annual Report $1,391,979 $1,331,006 $1,687,682 $1,822,883 $1,853,359 Total Assets (in thousands) 2020 2021 2022 2024 2023 $8,349 $18,633 $15,673 $17,368 $15,519 Net Income (in thousands) 2020 2021 2022 2024 2023 Return on Average Equity 8.83% 7.48% 6.07% 11.25%(1) 12.74% (1) 2022 includes $2.3 million in one-time merger expenses. 2020 2021 2022 2024 2023 Dividends Declared Per Share $0.85 $0.80 $0.60 $0.81 $0.69 2020 2021 2022 2024 2023 $1.93 EARNINGS PER SHARE—BASIC $1.92 EARNINGS PER SHARE—DILUTED Middlefield Banc Corp. 2024 Summary Annual Report 1 In the face of ongoing economic, interest rate, and regulatory uncertainty, Middlefield remained committed to the core values that have defined the Company over our 124-year history to once again deliver meaningful results for our shareholders, employees, customers, and communities. Through disciplined execution, we achieved key milestones, strengthened our financial position, and reinforced our role as a trusted financial partner. Over the years, Middlefield’s Board has put an important focus on succession planning and leadership development. Our efforts have produced a strong, experienced, and committed team that is focused on upholding Middlefield’s community- oriented values, while looking to the future to ensure we provide our customers with leading financial products and services to help them thrive. Across Middlefield, employees are encouraged to support their local communities. This involvement fosters deep relationships not only with community leaders but also with regulators and other stakeholders. In addition, Middlefield has a history of supporting banking and financial organizations. Middlefield’s CEO, Ron Zimmerly, is currently serving on the Board of Directors of the Ohio Bankers League and is a member of the Federal Reserve Bank of Cleveland’s Community Depository Institution Advisory Council. Throughout 2024, Ron Zimmerly and Sarah Winters, the Company’s Senior VP/Chief Human Resources Officer, worked with members of our Board of Directors, in particular Michael Voinovich the Chairperson of Middlefield’s Compensation Committee, to review and update our compensation structure and incentive plans. We believe these efforts ensure Middlefield is attracting, developing, and motivating talent to align with the goals, values and mission of the Company. In late 2023, Michael Cheravitch, a proven banker with over 35 years of experience, joined the Company as Chief Banking Officer. Under this role, Michael oversees all Commercial, Business, and Consumer banking channels, including digital banking, the retail branch network and call center, along with consumer lending, and residential mortgage. The Board continues to get updates from advisors and investments bankers on the M&A environment, capital market landscape, and strategic outlook for banks. These efforts demonstrate the Board’s long-standing commitment to pursue opportunities that maximize value for our shareholders. In addition, four times a year the Board receives in-depth updates from Middlefield’s leadership team. This includes updates on capital, staffing resources, and a comprehensive performance review on how our results are performing against the Company’s strategic plan. The Board also remains focused on key performance indicators including liquidity, risk, and capital allocation. I am pleased to report that Middlefield ended 2024 with robust liquidity levels including cash and investments of $222.4 million, and additional borrowing capacity of $381.7 million on Federal Home Loan Bank advances. Credit quality remained firm during the fourth quarter of 2024, and we are well reserved with an allowance for credit losses to total loans of 1.48% at December 31, 2024. Finally, I am pleased to report that the Board approved a 5% increase to our quarterly cash dividend reflecting our confidence in the future, as well as our strong capital position and expanding levels of profitability. This latest expansion in our dividend reflects the fifth time since 2018 the Board has approved an increase to our regular dividend. During 2024, Middlefield held events throughout our markets aimed at engaging local shareholders, customers, and community members. These events provided an opportunity for important stakeholders to learn more about Middlefield and meet members of the Company’s leadership team and Board of Directors. We believe it is important to have regular conversations and interactions with our stakeholders and I was pleased with the turnout from each event. Based on their success, we are looking forward to continuing these activities in 2025 and beyond. Middlefield’s Board remains highly engaged and committed to creating lasting value for the Company’s shareholders, employees, customers, and communities. We have a strong, high-performing leadership team that is executing against our strategic plan. Our solid performance in 2024 reflects the hard work and dedication of all the employees of The Middlefield Banking Company. I am proud of our success in 2024 and look forward to what we can accomplish together for our shareholders and communities. 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 I AM PROUD TO SHARE THAT 2024 WAS A YEAR MARKED BY CONTINUED GROWTH, DEVELOPMENT AND STRONG FINANCIAL PERFORMANCE. CHAIRMAN’S LETTER TO SHAREHOLDERS: 2 Middlefield Banc Corp. 2024 Summary Annual Report TO OUR SHAREHOLDERS: FOSTERING RELATIONSHIPS AND MAINTAINING MIDDLEFIELD’S LONG-STANDING COMMITMENT TO PROVIDE LOCAL, PERSONALIZED AND COMMUNITY-ORIENTED FINANCIAL SERVICES TO OUR DIVERSE OHIO MARKETS CONTINUES TO CREATE VALUE FOR OUR BANK AND OUR SHAREHOLDERS. Throughout 2024, we successfully navigated a complex economic and interest rate environment, which is a testament to Middlefield’s talented team and robust banking platform. As a result, our financial and operating results strengthened throughout the year and our 2024 fourth quarter marked one of the most profitable quarters in Middlefield’s 124-year history. As we look forward, we are focused on leveraging our history, while building a solid foundation for the future. For the year ended December 31, 2024, net income was $15.5 million, or $1.92 per diluted share, compared to $17.4 million, or $2.14 per diluted share last year. The reduction in net income over the prior year was primarily due to higher funding costs, as our cost of funds increased to 2.51% in 2024, compared to 1.62% in the prior year period, which resulted from higher interest rates and increased competition for deposits. This led to a 45-basis point year-over-year reduction in our net interest margin and reduced net-interest income. Despite these year- over-year trends, we ended the year with a strong net interest margin of 3.52%. While we expect competition for deposits will continue, we believe our net interest margin will expand in 2025 as we benefit from a strong pipeline of potential new loans. In addition, at December 31, 2024, nearly 70% of our loan portfolio was subject to repricing. Loan demand across our Central, Western, and Northeast Ohio markets remains strong and is supported by stable economic trends and compelling development projects. Our Central Ohio market in particular is experiencing historical levels of development led by investments from Intel, Amazon, Honda, Nationwide Children’s Hospital, and most recently Anduril. These are multi-billion dollar projects that require resources from across the state. For example, the $100 billion Intel plant includes suppliers from 38 counties across Ohio. Middlefield continues to distinguish itself within competitive Ohio markets through an outstanding team of bankers that provide personalized solutions to our communities. In addition, we continue to strengthen our foundation by investing in new technologies, expanding our team, and developing new financial products that meet the growing needs of our customers. During 2024, we improved our treasury management solutions to provide business customers with additional resources to manage their businesses and prevent fraud. We enhanced our infrastructure with investments in new phone systems and ATMs as well as new technologies to further protect the Bank and our customers against online threats. We also made strategic improvements to our organizational structure by enhancing our sales and lending cultures. By investing in our foundation, we are better positioned to support our future growth and expand our services to more retail and business customers. OUR FINANCIAL AND OPERATING RESULTS STRENGTHENED THROUGHOUT THE YEAR AND OUR 2024 FOURTH QUARTER MARKED ONE OF THE MOST PROFITABLE QUARTERS IN MIDDLEFIELD’S 124-YEAR HISTORY. Middlefield Banc Corp. 2024 Summary Annual Report 3 Middlefield’s growth opportunities are also supported by our strong capital levels and excellent asset quality. At December 31, 2024, our equity to assets ratio was 11.36%, compared to 11.28% from the prior year. Our overall liquidity remains robust with access to the Federal Reserve Board’s discount window, cash and investments of $221.6 million, and additional borrowing capacity of $381.7 million on Federal Home Loan Bank advances at December 31, 2024. Middlefield’s long-standing track record of producing outstanding asset quality further supports our robust liquidity levels. At December 31, 2024, annual net charge-offs were just 0.10% of average loans, compared to 0.00% at December 31, 2023. Over the past ten years, Middlefield’s net charge-offs have averaged just 0.09% of total loans, demonstrating the long-term success of our lending culture and credit infrastructure. Middlefield remains committed to returning excess capital back to its shareholders. Since 2018, we have repurchased over 1.1 million shares of our common stock. This includes 43,858 shares of stock purchased in 2024, at an average price of $24.00 per share. In addition, since paying a dividend of $0.57 per share in 2019, our regular dividend has increased at a compound annual growth rate of 7.0% to end 2024 at $0.80 per share. Reflecting our confidence in the future, as well as our strong capital position and expanding levels of profitability, the Board approved a 5.0% increase in our regular quarterly dividend for the first quarter of 2025. During 2024, we celebrated the 10th anniversary of Middlefield’s Nasdaq listing. Since listing on Nasdaq in 2014, Middlefield’s total assets have increased by 174%, and our annual net income has grown 116%. In addition, over this period, $100 invested in Middlefield’s stock has increased to $223, compared to $201 for the KBW Regional Banking Index, a well-followed bank index. This outperformance demonstrates the strong community banking franchise we have created and the success of our multi-year strategic plan. After navigating several years of rapid changes to the economy and interest rate environment, we are excited to focus more of our efforts on proactively serving our communities and building a solid foundation to further grow our Bank. We believe 2025 will be another good year of profitable growth for Middlefield, reflecting our long-standing commitment to our communities, disciplined underwriting standards, and continued investments in our business. As you can see, Middlefield has developed a long-standing track record of financial and operating success, supported by a highly profitable financial model, strong capital levels and asset quality, and community focused banking platform. In addition, we continue to invest in our business to strengthen our foundation. We believe these trends will support our business in 2025 and beyond, and I look forward to the opportunities in front of the Company to create value for our shareholders, as well as our Northeast, Central, and Western Ohio employees and communities. On behalf of everyone at the Middlefield Banc Corp., thank you for your continued support. Sincerely, RONALD L. ZIMMERLY, JR. President and Chief Executive Officer 4 Middlefield Banc Corp. 2024 Summary Annual Report 2016 $ 29,994 4,190 25,804 570 25,234 3,959 20,872 8,32 1,905 $ 6,416 $787,82 629,934 76,960 602,542 6,598 357 139 1 $ 1.52 0.54 17.07 36.13 $ 2,318 0.85 9.33 (Dollar amounts in thousands, except earnings per share data) 2015 2016 2017 Interest income $ 28,595 $ 29,994 $ 43,995 Interest expense 3,820 4,190 6,647 Net interest income 24,775 25,804 37,348 Provision for credit losses(1) 315 570 1,045 Net interest income after provision for credit losses 24,460 25,234 36,303 Noninterest income 4,044 3,959 4,859 Noninterest expense 20,077 20,872 27,485 Income before income taxes 8,427 8,321 13,677 Income taxes 1,562 1,905 4,222 Net income $ 6,865 $ 6,416 $ 9,455 Total assets $735,139 $787,821 $1,106,336 Deposits 624,447 629,934 878,194 Equity capital 62,304 76,960 119,863 Loans outstanding, net 527,325 602,542 916,023 Allowance for credit losses(1) 6,385 6,598 7,190 Net charge-offs (recoveries) 776 357 453 Full time employees (average equivalents) 143 139 190 Number of offices 10 11 14 Basic earnings per share $ 1.71 $ 1.52 $ 1.56 Dividends per share 0.54 0.54 0.54 Book value per share 16.59 17.07 18.63 Dividends payout ratio 30.90% 36.13% 35.52% Cash dividends paid $ 2,153 $ 2,318 $ 3,358 Return on average assets 0.97% 0.85% 0.88% Return on average equity 10.62% 9.33% 8.52% DECADE OF PROGRESS (1) On January 1, 2023, we adopted ASU 2016-13, Financial Instruments—Credit Losses—Topic (326): Measurement of Credit Losses on Financial Instruments. This methodology for calculating the allowance for credit losses considers the possibility of expected loss over the life of the loan. Prior to January 1, 2023, the calculation of the allowance for loan losses was based on an incurred loan loss methodology. Middlefield Banc Corp. 2024 Summary Annual Report 5 6 2017 2018 2019 2020 2021 2022 2023 2024 4 $ 43,995 $ 50,357 $ 54,525 0 6,647 9,909 13,140 4 37,348 40,448 41,385 0 1,045 840 890 4 36,303 39,608 40,495 9 4,859 3,728 4,841 2 27,485 28,743 30,033 1 13,677 14,593 15,303 5 4,222 2,162 2,592 6 $ 9,455 $ 12,431 $ 12,711 1 $1,106,336 $1,248,398 $1,182,475 4 878,194 1,016,067 1,020,843 0 119,863 128,290 137,775 2 916,023 984,681 977,490 8 7,190 7,428 6,768 7 453 602 1,550 9 190 200 189 1 14 15 16 2 $ 1.56 $ 1.92 $ 1.96 4 0.54 0.59 0.57 7 18.63 19.77 21.45 3% 35.52% 30.40% 28.99% 8 $ 3,358 $ 3,779 $ 3,685 5% 0.88% 1.09% 1.05% 3% 8.52% 9.94% 9.35% $ 52,335 4,195 48,140 700 47,440 7,249 31,991 22,698 4,065 $ 18,633 $1,331,006 1,166,610 145,335 967,349 14,342 (183) 185 16 $ 3.01 0.69 24.68 22.76% $ 4,240 1.36% 12.74% $ 54,906 4,729 50,177 — 50,177 6,746 38,030 18,893 3,220 $ 15,673 $1,687,682 1,402,019 197,691 1,338,434 14,438 (96) 238 22 $ 2.60 0.81 23.98 37.23% $ 5,490 1.17% 11.25% $ 90,301 25,098 65,203 3,002 62,201 6,691 48,137 20,755 3,387 $ 17,368 $1,822,883 1,426,602 205,681 1,456,437 21,693 (31) 256 23 $ 2.14 0.85 25.41 39.52% $ 6,864 0.99% 8.83% $ 101,262 40,582 60,680 2,008 58,672 7,213 47,541 18,344 2,825 $ 15,519 $1,853,359 1,445,693 210,562 1,497,167 22,447 1,436 256 23 $ 1.93 0.80 26.08 41.61% $ 6,457 0.84% 7.48% $ 52,638 9,250 43,388 9,840 33,548 5,990 29,788 9,750 1,401 $ 8,349 $1,391,979 1,225,200 143,810 1,090,626 13,459 3,149 184 16 $ 1.31 0.60 21.86 45.92% $ 3,834 0.64% 6.07% 6 Middlefield Banc Corp. 2024 Summary Annual Report 2023 $ 56,397 4,439 60,836 170,779 955 183,545 401,580 82,506 328,854 221,508 127,818 125,105 7,214 1,478,130 21,693 1,456,437 21,339 36,356 6,642 34,349 35,190 $1,822,883 $ 401,384 205,582 274,682 210,639 334,315 1,426,602 163,000 11,862 15,738 1,617,202 161,388 ­—­ 100,237 (16,090) (39,854) 205,681 $1,822,883 CONSOLIDATED BALANCE SHEET ASSETS Cash and due from banks Federal funds sold Cash and cash equivalents Investment securities available for sale, at fair value Other investments 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 credit losses Net loans Premises and equipment, net Goodwill Core deposit intangibles Bank-owned life insurance Accrued interest receivable and other assets TOTAL ASSETS LIABILITIES Deposits: Noninterest-bearing demand Interest-bearing demand Money market Savings Time Total deposits Federal Home Loan Bank advances Other borrowings Accrued interest payable and other liabilities TOTAL LIABILITIES STOCKHOLDERS’ EQUITY Common stock, no par value; 25,000,000 shares authorized, 9,953,018 and 9,930,704 shares issued; 8,073,708 and 8,095,252 shares outstanding Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost; 1,879,310 and 1,835,452 shares TOTAL STOCKHOLDERS’ EQUITY TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY See accompanying notes to the consolidated financial statements. (Dollar amounts in thousands, except shares) 2024 $ 46,037 9,755 55,792 165,802 855 181,447 412,291 89,849 353,442 229,034 143,379 103,608 6,564 1,519,614 22,447 1,497,167 20,565 36,356 5,611 35,259 35,952 $1,853,359 $ 377,875 208,291 414,074 197,749 247,704 1,445,693 172,400 11,660 13,044 1,642,797 161,999 246 109,299 (20,073) (40,909) 210,562 $1,853,359 Middlefield Banc Corp. 2024 Summary Annual Report 7 2024 $ 92,566 1,491 568 2,028 3,861 748 101,262 33,263 6,616 703 40,582 60,680 2,008 58,672 3,907 (9) — 930 199 916 68 1,202 7,213 24,641 2,376 925 4,740 1,583 1,055 2,265 1,581 200 1,031 99 ­— 7,045 47,541 18,344 2,825 $ 15,519 $ 1.93 1.92 2023 $81,963 1,289 771 1,893 3,914 471 90,301 18,995 5,386 717 25,098 65,203 3,002 62,201 3,878 (161) (170) 823 97 743 421 1,060 6,691 24,511 2,566 1,241 4,588 1,578 861 2,293 1,477 95 1,059 510 473 6,885 48,137 20,755 3,387 $17,368 $ 2.14 2.14 (Dollar amounts in thousands, except per share data) CONSOLIDATED STATEMENT OF INCOME 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 credit losses NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES NONINTEREST INCOME Service charges on deposit accounts Loss on equity securities Loss 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 and information technology costs Ohio state franchise tax Federal deposit insurance expense Professional fees 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 See accompanying notes to the consolidated financial statements. 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. RONALD L. ZIMMERLY, JR. 2022 President and Chief Executive Officer 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 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. 8 Middlefield Banc Corp. 2024 Summary Annual Report Central Ohio Region Advisory Board: JEFFREY A. GONGWER; GEORGE J. KONTOGIANNIS, AIA; TIMOTHY C. LONG; MICHAEL J. MORAN *Director of The Middlefield Banking Company MICHAEL C. VOINOVICH 2020 Executive Vice President and Chief Investment Officer of ECHO Health, Inc. THOMAS E. “TED” GRIFFITH* 2022 Partner Powell Seeds, LLC MARK R. WATKINS 2022 Partner Watkins Farm KEVIN A. DiGERONIMO 2021 Principal DiGeronimo Companies THOMAS J. SIMON* 2022 Chairman of the Board Coverlink Insurance JENNIFER L. MOELLER 2023 Angel Investor SPENCER T. COHN 2022 Director Castle Creek Capital LLC Middlefield Banc Corp. 2024 Summary Annual Report 9 10 Middlefield Banc Corp. 2024 Summary Annual Report RONALD L. ZIMMERLY, JR. President and Chief Executive Officer MICHAEL C. RANTTILA Senior Vice President and Chief Financial Officer JULIE E. SHAW Corporate Secretary THE MIDDLEFIELD BANKING COMPANY EXECUTIVE OFFICERS THE MIDDLEFIELD BANKING COMPANY OFFICERS MIDDLEFIELD BANC CORP. OFFICERS RONALD L. ZIMMERLY, JR. 1999 President and Chief Executive Officer COURTNEY M. ERMINIO 2010 Executive Vice President Chief Risk Officer REBECCA NOBLIT 2017 Executive Vice President Chief Credit Officer MICHAEL C. RANTTILA 2017 Executive Vice President Chief Financial Officer THOMAS WILSON, CFA 2020 Executive Vice President Chief Strategy and Innovation Officer MICHAEL CHERAVITCH 2023 Executive Vice President Chief Banking Officer SARAH WINTERS 2023 Executive Vice President Chief Human Resources Officer PATRICIA ARNETT 1987 Senior Vice President Treasury Management Director THOMAS R. NEIKIRK 1994 Senior Vice President Commercial Relationship Manager MATTHEW E. BELLIN 2006 Senior Vice President Commercial Relationship Manager ADAM T. COOK 2006 Senior Vice President Project Manager ANNA MARIA BRENNEMAN 2009 Senior Vice President Senior Commercial Market Executive FELICIA M. HOUGH 2009 Senior Vice President Branch Administration VALERIE MULLHOLAND 2011 Senior Vice President Loan Administration LORI A. GRAHAM 2013 Senior Vice President Compliance and CRA Officer DANIEL B. PLANT 2014 Senior Vice President Mortgage Lending STANLEY GREGORIN, JR. 2018 Senior Vice President Commercial Relationship Manager GREG T. YURCO 2019 Senior Vice President Commercial Relationship Manager GARY C. KERN 2020 Senior Vice President Chief Information Officer Middlefield Banc Corp. 2024 Summary Annual Report 11 BRETT BAUMEISTER 2023 Senior Vice President Commercial Relationship Manager JOSHUA RILEY 2023 Senior Vice President Senior Commercial Market Executive JULIE E. SHAW 2019 Executive Assistant Corporate Secretary/Training and Development Coordinator BRETT A. RICHEY 2010 Vice President Special Assets Manager BRANDON BUCKNELL 2015 Vice President Commercial Relationship Manager JOHN SOLICH 2015 Vice President Commercial Relationship Manager AMANDA HOYT 2016 Vice President Abrigo Product Owner NICOLE MARCHIO 2017 Vice President Deposit Operations Officer MELISSA M. MAKI 2018 Vice President Marketing Communications Director KEVIN SERNA 2019 Vice President Commercial Relationship Manager JAMESON CURRY 2023 Vice President Commercial Relationship Manager AIMEE GILLILAND 2023 Vice President Treasury Management Sales Officer MARIA HYDELL 2024 Vice President Credit Manager JODI DEARTH 2024 Vice President Controller MOLLY MILLER 2023 Vice President Project Manager KIMBERLY SARK 2023 Vice President Chief Accounting Officer PRESTON STAPLETON 2023 Vice President Commercial Relationship Manager GLEN GALLEBO 2024 Vice President Commercial Relationship Manager RACHEL DEAN 1985 Assistant Vice President Regional Branch Administrator Northeast Ohio Region KATHLEEN M. VANEK 1998 Assistant Vice President Mortgage and Consumer Loan Originator MARLIN J. MOSCHELL 2000 Assistant Vice President Lending Officer HEATHER ALTSTAETTER 2002 Assistant Vice President Public Relations Manager CORSIE ARN 2003 Assistant Vice President Branch Operations Manager 12 Middlefield Banc Corp. 2024 Summary Annual Report THE MIDDLEFIELD BANKING COMPANY OFFICERS (continued) 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 MOORE 2009 Assistant Vice President Project Manager and Bank Security Officer DERRICK HAYNES 2011 Assistant Vice President Manager of Tech Support LISABETH A. MULDOWNEY 2012 Assistant Vice President Market Manager/Portage County JENNI UNDERWOOD 2013 Assistant Vice President Mortgage Loan Operations Manager STEPHEN J. LEBOLD 2014 Assistant Vice President Branch Manager COLLEEN PIRRMANN 2014 Assistant Vice President Regional Branch Administrator Central Ohio Region KIMBERLY UTTERBACK 2014 Assistant Vice President Assistant Compliance Officer ERNA LEAGAN-MABEL 2015 Assistant Vice President Loan Servicing Manager CORRINE MITCHELL 2016 Assistant Vice President Regional Branch Administrator Western Ohio Region LAURA STIMMEL 2017 Assistant Vice President Branch Manager CHRISTOPHER J. HESS 2018 Assistant Vice President Branch Manager NICHOLAS GRAND 2019 Assistant Vice President Underwriting Manager RYAN LANE 2019 Assistant Vice President Mortgage and Consumer Lender BRIAN MOORE 2019 Assistant Vice President Mortgage and Consumer Lender DAVID WILLOBY 2019 Assistant Vice President Commercial Relationship Manager MICHELLE WELCH 2021 Assistant Vice President Human Resources Manager DAMON YODER 2022 Assistant Vice President Senior Financial Analyst JUSTIN FERGUSON 2021 Assistant Vice President Loan Documentation Manager DEANNA MOX 2025 Assistant Vice President Branch Manager KRISTINA STEPHENS 2006 Banking Officer Account Processing Manager MICHELLE BAHLEDA 2014 Banking Officer Mortgage Lender Officer III JAMIE GENOVESE 2016 Banking Officer Support Center Manager 10 YEAR ON AUGUST 27, 2024, WE’RE THRILLED TO CELEBRATE A MAJOR MILESTONE AS WE RING THE NASDAQ BELL to mark the 10-year listing anniversary under our ticker symbol MBCN! A huge thank you to our incredible team, valued clients, and dedicated shareholders who have supported us on this remarkable journey. Your trust and partnership have been key to our success, and we look forward to many more years of growth and innovation. Here’s to a decade of achievements and to the exciting future ahead. Pictured from L to R: Thomas Wilson, Executive Vice President/Chief Strategy and Innovation Officer; William Skidmore, Chairman of the Board; Ronald L. Zimmerly Jr., President and Chief Executive Officer; Michael Ranttila, Executive Vice President/Chief Financial Officer NASDAQ LISTING ANNIVERSARY Middlefield Banc Corp. 2024 Summary Annual Report 13 KENTON BELLEFONTAINE MARYSVILLE KENTON BELLEFONTAINE MARYSVILLE COLUMBUS FRANKLIN DELAWARE UNION HARDIN LOGAN PLAIN ADA BELLEFONTAINE MARYSVILLE KENTON LOGAN UNION HARDIN DUBLIN POWELL PLAIN CITY WESTERVILLE COLUMBUS FRANKLIN DELAWARE SUNBURY MARYSVILLE 14 Middlefield Banc Corp. 2024 Summary Annual Report Middlefield Banc Corp. 2024 Summary Annual Report 15 CLEVELAND PORTAGE TRUMBULL ASHTABULA GEAUGA CORTLAND GARRETTSVILLE NEWBURY SOLON TWINSBURG BEACHWOOD ORWELL CHARDON MANTUA PORTAGE TRUMBULL GEAUGA ASHTABULA MIDDLEFIELD LAKE MENTOR (LPO) THE MIDDLEFIELD BANKING COMPANY LOCATIONS 16 Middlefield Banc Corp. 2024 Summary Annual Report Administrative Offices 15200 Madison Road Middlefield, Ohio 44062 888.801.1666 Ada Office 118 South Main Street P.O. Box 135 Ada, Ohio 45810 419.634.5015 Beachwood 25201 Chagrin Boulevard Suite 120 Beachwood, Ohio 44122 216.359.5580 Bellefontaine North Office 1120 North Main Street P.O. Box 849 Bellefontaine, Ohio 43311 937.592.5688 Bellefontaine South Office 1454 South Main Street P.O. Box 670 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 Office 100 East Franklin Street P.O. Box 234 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 Marysville 160 Coleman’s Crossing Boulevard Marysville, Ohio 43040 937.642.0467 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 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 Sunbury 492 West Cherry Street Sunbury, Ohio 43074 740.913.0632 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 THE MIDDLEFIELD BANKING COMPANY LOCATIONS As a community bank, The Middlefield Banking Company is strongly committed to making a positive impact in our communities through charitable giving, volunteerism, and support for non-profits and vital community organizations. Here’s a glimpse of the meaningful donations we proudly made in 2024, which have benefited over 320 organizations with total contributions reaching $320,000! Our team members generously volunteer their time, talent, and resources in leadership roles with over 30 organizations. These efforts amount to nearly 650 eligible hours of Community Reinvestment Act (CRA) service across Northeast, Central, and Western Ohio. We have dedicated almost half of those hours by partnering with Junior Achievement to help students in grades K-12 learn about financial literacy, entrepreneurship, and workplace readiness. Additional service hours were spent supporting the United Ways, special programs, schools, and other non-profits to provide basic needs such as food, clothing, and supplies. 2024 Community Involvement Top Gifts: · Schools and Universities: over $50,000 · United Way Organizations (Team Members + Corporate): almost $40,000 · Financial Literacy Programs (Junior Achievement & EVERFI): over $35,000 · Chambers of Commerce: over $30,000 · The Salvation Army: over $14,000 · County Fairs/4-H Clubs: almost $13,000 (excludes any livestock sales) Sample of Funded Organizations: · African American Wellness Agency (Northeast Region) · Beatitudes Community Center (Western Region) · Children’s Hunger Alliance (All Regions) · EVERFI Financial Literacy (Central and Western Region) · Fair Housing (Northeast & Central Region) · Financial Empowerment (Northeast Region) · Food Pantries (All Regions) · Geauga Growth Partnership (Northeast Region) · Geauga Park District (Northeast Region) · Hattie Larlham Center for Children with Disabilities (Northeast and Central Region) · Leadership Geauga County (Northeast Region) · Logan County Community Improvement Corp (Western Region) · Metzenbaum Sheltered Industries (Northeast Region) · Next Step (Northeast Region) · Ohio Cancer Research (All Regions) · Rotary and Kiwanis Clubs (All Regions) · Women’s Recovery Center (Northeast Region) · WomenSafe at the Green House (Northeast Region) Middlefield Banc Corp. 2024 Summary Annual Report 17 Retail Team visited the Senior Citizens Conference, hosted by Ashtabula County Department of Job & Family Services. Teams at the Pelotonia Ride, raised funds for OSU’s Comprehensive Cancer Center. MB sponsored the United Way of Hardin County Bourbon Disco Ball in Groovy 70s attire. MB sponsored the Dublin Food Pantry event for the 2nd Annual Bounty at Bridge Park. Bellefontaine’s Kelly Hoffman presented a check along with other sponsors for school lunches at Indian Lake Schools. NEO Teams joined up with Junior Achievement of Greater Cleveland to teach financial literacy to Chardon students. Ada Team at “Re-Prom Party with a Purpose” raised funds for Beatitudes Community Center. Team joined United Way Services of Geauga County for their annual Day of Action at West Geauga Middle School. Western Team works the Popcorn Tent at the Hardin County Fair. Marysville Team connects with businesses at an after-hours event hosted by the Union County Chamber. Central Team attended Junior Achievement of Central Ohio’s Biztown event at Columbus City Schools. Central and Western Teams at the Chad Flowers Memorial Golf Tournament to raise funds for a scholarship in his honor. Community Involvement 18 Middlefield Banc Corp. 2024 Summary Annual Report Westerville Team booth at Uptown Fourth Friday provided giveaways for the July music festival. Mantua Team at the Farmers & Makers Market at the Granary to greet members of the community. Middlefield Team delivered items to the Geauga County Dog Shelter collected from our team and customers. Risk Team visited WomenSafe with their collected Angel Tree Donations. Garrettsville Team serves peach pie at the annual Peach Social and Car Cruise. Western Team delivered a $1,600 check to Wolf Creek Art Center in Kenton to repair the center’s water damage. Plain City Team volunteered to serve breakfast at Daily Needs Assistance’s food pantry. Central Team at the Need Knows No Season fundraiser for the Salvation Army featuring former NFL star Cardale Jones. Newbury’s Brian Cain provided refreshments to workers restoring service lines after a tornado. Middlefield Banc Corp. 2024 Summary Annual Report 19 20 Middlefield Banc Corp. 2024 Summary Annual Report I R S P I T Be Exceptional: Deliver high-quality service, exceed expectations, and create lasting positive impressions in every interaction. Be Impactful: Contribute positively to our community, fostering purpose, and connections with all team members, customers, community members, and stakeholders. Be Accountable: Uphold honesty and transparency, take responsibility for your actions, manage resources, and build trust and reliability. Be Courteous: Treat others with kindness and grace, demonstrating that you value and respect their perspectives and contributions. Cultivate an environment where dignity, mutual respect, and appreciation thrive. Be Proactive: Anticipate challenges and opportunities, take the lead in innovating and continuous improvement, and feel empowered to make a meaningful difference. Be Collaborative: Harness the power of collaboration, work seamlessly together to achieve common goals, and support and celebrate each other’s success. TEAMWORK INITIATIVE RESPECT INTEGRITY PURPOSE SERVICE OUR CORE VALUES 24 Middlefield Banc Corp. 2024 Summary Annual Report HIGH CLOSE LOW CLOSE CASH DIVIDENDS PER SHARE 2024 First Quarter $32.72 $22.99 $0.20 Second Quarter $24.40 $20.66 $0.20 Third Quarter $29.74 $21.75 $0.20 Fourth Quarter $33.50 $27.16 $0.20 2023 First Quarter $29.43 $26.00 $0.20 Second Quarter $ 29.24 $22.33 $0.20 Third Quarter $ 30.20 $24.71 $0.20 Fourth Quarter $ 36.70 $ 25.19 $0.25 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: Michael Ranttila Executive Vice President and CFO Middlefield Banc Corp. P.O. Box 35 Middlefield, Ohio 44062 or mranttila@middlefieldbank.com MARKET MAKER The symbol for Middlefield Banc Corp. common stock is MBCN and the CUSIP is 596304204. Keefe, Bruyette & Woods 800.342.5529 www.kbw.com NOTICE OF ANNUAL MEETING The 2025 Annual Meeting of Shareholders of Middlefield Banc Corp. will be held on Wednesday, May 14, 2025 at 1:00 p.m. Eastern Time. We have adopted a virtual format for our Annual Meeting. We will provide a live webcast of the Annual Meeting at www.meetnow.global/MFDL4CJ 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 1,118 shareholders of record as of March 5, 2025. Our common stock trades on the NASDAQ Capital Market under the ticker symbol MBCN. The table below shows the high and low bid prices 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. 21 Middlefield Banc Corp. 2024 Summary Annual Report Middlefield Banc Corp. 15985 East High Street, Middlefield, Ohio 44062 888.801.1666 www.middlefieldbank.bank

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