Middlefield Bancorp Limited
MBN

June 26, 1997

MIDDLEFIELD BANCORP ANNOUNCES CLOSING OF PRIVATE PLACEMENT AND SECOND QUARTER RESULTS

MESSAGE TO SHAREHOLDERS

At the Company's Annual General Meeting in March, 1997, shareholders approved changing the name of the Company to Middlefield Bancorp Limited and the location of head office from Vancouver to Toronto. Under the guidance of the Middlefield management team, the Company has expanded its mandate to include merchant banking related investment opportunities.

PRIVATE PLACEMENT

In connection with the new mandate, Middlefield Bancorp is pleased to announce the closing of a private placement of 2,500,000 common shares for approximately $5.3 million. The offering was well received, providing the Company with additional capital and an expanded group of investors who will contribute to the Company's flow of investment opportunities.

The Company is in the process of increasing its borrowing facility, which will further enhance its ability to make investments.

FINANCIAL

Revenue for the six months ended April 30, 1997 reached a record level of $5.6 million, up 19% from the same period last year. Net earnings were $593,000 or approximately $0.10 per share fully diluted, a 58% increase over the six months ended April 30, 1996.

The gains made in the second quarter are attributable to H.E.R.O. Industries, the Company's paint equipment division. H.E.R.O.'s colorant dispenser line, known as the H.E.R.O. 2000, continues to capture additional market share and penetrate new export markets. Fiscal 1997 sales to non-North American markets are expected to significantly surpass the level achieved in fiscal 1996. H.E.R.O.'s attention to customer requirements and dedication to product innovation continue to drive the division to new highs.

Fiscal 1997 is expected to be a record year for the Company in terms of both revenue and earnings. The Company trades on the Toronto Stock Exchange under the symbol MBN.

For further information, contact:

Dean Orrico
Vice President
(416) 362-0714