Middlefield Banc Corp.

Financial Statement

(Quarterly)

MIDDLEFIELD BANC CORP.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2008		2007		2008		2007
INTEREST INCOME
Interest and fees on loans	$	5,425,266	$	5,604,206	$	16,273,630	$	15,449,822
Interest-bearing deposits in
other institutions		1,949		22,159		10,790		127,772
Federal funds sold		22,181		122,029		124,467		383,464
Investment securities:
Taxable interest		622,184		323,806		1,793,645		844,454
Tax-exempt interest		449,351		468,552		1,360,226		1,310,932
Dividends on FHLB stock		29,514		32,426		88,526		84,193
Total interest income		6,550,445		6,573,178		19,651,284		18,200,637

INTEREST EXPENSE
Deposits		2,948,998		3,176,508		9,381,666		8,360,623
Short-term borrowings		17,610		35,750		34,793		75,420
Other borrowings		432,055		453,853		1,254,040		1,368,738
Total interest expense		3,398,663		3,666,111		10,670,499		9,804,781

NET INTEREST INCOME		3,151,782		2,907,067		8,980,785		8,395,856

Provision for loan losses		187,000		60,000		357,000		174,391

NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES		2,964,782		2,847,067		8,623,785		8,221,465

NONINTEREST INCOME
Service charges on deposit accounts		493,228		494,456		1,417,789		1,427,458
Investment securities gains, net		25,758		-		34,508		-
Earnings on bank-owned life insurance		75,336		69,909		217,798		210,162
Other income		85,925		89,445		284,820		286,061
Total noninterest income		680,247		653,810		1,954,915		1,923,681

NONINTEREST EXPENSE
Salaries and employee benefits		1,322,026		1,220,646		3,643,199		3,365,646
Occupancy expense		203,298		184,078		643,884		551,586
Equipment expense		150,334		139,197		435,770		393,411
Data processing costs		193,033		186,213		591,098		498,932
Ohio state franchise tax		117,000		109,673		351,000		313,873
Other expense		743,890		577,126		2,159,276		1,888,020
Total noninterest expense		2,729,581		2,416,933		7,824,227		7,011,468

Income before income taxes		915,448		1,083,944		2,754,473		3,133,678
Income taxes		211,000		223,000		530,000		621,128

NET INCOME	$	704,448	$	860,944	$	2,224,473	$	2,512,550

EARNINGS PER SHARE
Basic	$	0.46	$	0.54	$	1.45	$	1.61
Diluted		0.46		0.53		1.44		1.59

DIVIDENDS DECLARED PER SHARE	$	0.260	$	0.233	$	0.770	$	0.690


See accompanying unaudited notes to the consolidated financial statements.

MIDDLEFIELD BANC CORP.
CONSOLIDATED BALANCE SHEET

		September 30,		December 31
		2008		2007

ASSETS
Cash and due from banks	$	8,263,756	$	9,072,972
Federal funds sold		4,570,826		8,631,963
Interest-bearing deposits in other institutions		112,215		110,387
Cash and cash equivalents		12,946,798		17,815,322
Investment securities available for sale		96,371,351		85,967,764
Loans		320,151,943		309,445,922
Less allowance for loan losses		3,613,857		3,299,276
Net loans		316,538,086		306,146,646
Premises and equipment		8,018,503		7,044,685
Goodwill		4,371,207		4,371,206
Bank-owned life insurance		7,371,180		7,153,381
Accrued interest and other assets		8,450,811		5,774,052

TOTAL ASSETS	$	454,067,936	$	434,273,056

LIABILITIES
Deposits:
Noninterest-bearing demand	$	40,929,373	$	41,348,219
Interest-bearing demand		27,409,745		19,566,035
Money market		26,831,740		22,684,041
Savings		69,835,964		76,895,857
Time		214,957,328		202,423,848
Total deposits		379,964,150		362,918,000
Short-term borrowings		1,693,699		1,510,607
Federal funds purchased		-		-
Other borrowings		36,687,924		32,395,319
Accrued interest and other liabilities		2,340,455		2,487,746
TOTAL LIABILITIES		420,686,229		399,311,672

STOCKHOLDERS' EQUITY
Common stock, no par value; 10,000,000 shares authorized,
1,718,822 and 1,705,608 shares issued		27,159,602		26,650,123
Retained earnings		14,793,600		13,746,956
Accumulated other comprehensive loss		(1,837,888)		(52,969)
Treasury stock, at cost; 189,530 shares in 2008 and
151,745 shares in 2007		(6,733,607)		(5,382,726)
TOTAL STOCKHOLDERS' EQUITY		33,381,707		34,961,384

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	454,067,936	$	434,273,056

See accompanying unaudited notes to the consolidated financial statements.

The Middlefield Banking Company, Member FDIC. Equal Housing Lender

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