MIDDLEBURG, Va., July 29, 2015 /PRNewswire/ -- Middleburg
Financial Corporation (the "Company") (Nasdaq: MBRG), today
announced net income of $2.28
million, or $0.32 per diluted
share, for the quarter ended June 30,
2015.
"The second quarter of 2015 extended Middleburg's trend of strong earnings growth,"
commented Gary R. Shook, President
and CEO of Middleburg Financial Corporation. He added,
"Earnings benefited from strong loan growth at Middleburg Bank and
increased asset management fees from Middleburg Investment Group
combined with good expense control and a reduction in loss reserves
driven by loan upgrades and sales of nonperforming loans."
Second Quarter 2015 Highlights:
- Net income of $2.28 million or
$0.32 per diluted share, an increase
of 22.91% compared to $1.86 million
or $0.26 per diluted share for the
second quarter of 2014. Net income for the six months ended
June 30, 2015 increased 23.35% to
$4.73 million from $3.83 million over the same period in 2014.
Earnings per diluted share for the six months ended June 30, 2015 were $0.66 per share compared to $0.54 per share for the same period in 2014.
- Net interest margin of 3.24%, lower by 16 bp compared to the
previous quarter and 14 bp lower than the second quarter of
2014.
- Cost of funds was 38 bp, a decrease of 1 bp compared to the
previous quarter and 14 bp lower than the second quarter of
2014.
- Net interest income was $9.31
million, a decrease of 3.30% compared to the previous
quarter and 2.07% lower than the second quarter of 2014. Net
interest income was $18.94 million
for the six months ended June 30,
2015, a decrease of 1.45% over net interest income reported
for the same period for 2014.
- Non-interest income for the quarter and six months ended
June 30, 2015 was lower by 43.20% and
46.49%, compared to the quarter and six months ended June 30,
2014, respectively. Non-interest income declined by 19.32%
compared to the previous quarter.
- Non-interest expense was $9.07
million, an increase of 1.90% compared to the previous
quarter and 18.52% lower than the second quarter of 2014.
Non-interest expense fell by 22.77% compared to the six months
ended June 30, 2014.
- Efficiency ratio of 74.88%, compared to 68.35% for the previous
quarter and 78.99% for the second quarter of 2014. Year to
date efficiency ratio of 71.51% compared to 75.54% for the prior
year.
- Total assets were $1.24 billion,
an increase of 1.56% since December
31, 2014. Total assets were $1.25 billion at June 30,
2014.
- Total deposits were $1.01
billion, an increase of 1.66% since December 31, 2014. Total deposits were
$1.00 billion at June 30, 2014.
- Loans held-for-investment grew to $773.09 million as of June
30, 2015, representing an annualized growth rate of 5.0% and
a growth rate of 6.3% compared to June
30, 2014. Loans held-for-investment were $754.85 million and $727.11 million at December 31, 2014 and June
30, 2014, respectively.
- Nonaccrual loans were $8.01
million or 1.04% of total loans, a decrease of 19.47% since
December 31, 2014 and a decrease of
23.06% since June 30, 2014.
- The allowance for loan losses declined by $130,000 compared to the previous quarter as a
result of net recoveries of $295,000
and recovery of the provision for loan losses of $425,000.
- The allowance for loan losses was 1.54% of total loans compared
to 1.58% for the previous quarter and 1.56% at year-end 2014.
- The ratio of nonperforming assets to total assets was 1.99%
compared to 1.59% at December 31,
2014 and 1.57% at June 30,
2014.
- Capital ratios continue to be strong: Total Risk-Based Capital
Ratio of 18.28%, Tier 1 Risk-Based Capital Ratio of 17.04%, Common
Equity Tier 1 Ratio of 16.35% and Tier 1 Leverage Ratio of 9.85% at
June 30, 2015.
TOTAL REVENUE
Total revenue, which is comprised of net interest income (before
provision for loan losses) and non-interest income, was
$11.74 million for the second quarter
of 2015, representing a decrease of 7.12% compared to the previous
quarter and a decrease of 14.83% compared to the second quarter of
2014.
Net Interest Income
The Company recorded net interest income of $9.31 million for the second quarter of 2015,
representing a decrease of 3.30% compared to the previous quarter
and a decrease of 2.07% compared to the quarter ended June 30, 2014. The net interest margin was
3.24%, 16 bp lower when compared to the previous quarter and 14 bp
lower than the quarter ended June 30,
2014.
The following factors contributed to the decrease in net
interest margin during the second quarter of 2015:
- Yields on earning assets decreased by 18 bp compared to the
previous quarter, primarily due to a 25 bp decrease in loan yields
and a 21 bp decrease in yields on investments.
- Yields on investment securities were impacted by higher premium
amortization stemming from faster prepayments on mortgage backed
securities accompanied by lower book yields for securities that
were added to the portfolio during the period.
- Loan yields declined due to refinancing of existing loans and
new loans getting booked at lower rates.
- Cost of funds was 38 bp, relatively unchanged from the previous
quarter.
The decrease in yields on earning assets resulted in total
interest income of $10.35 million for
the quarter, lower by 3.24% compared to the previous quarter.
Total interest income for the quarter declined by 5.38% compared to
the quarter ended June 30, 2014 as
yields on average earning assets fell by 29 bp while the balance of
average earning assets increased by 1.98% during the
period.
Non-Interest Income
Non-interest income decreased by19.35% compared to the previous
quarter and declined by 43.22% compared to the quarter ended
June 30, 2014. The primary
reason for the decline in non-interest income compared to the
quarter ended June 30, 2014 was due
to the decline of gain on sale revenue from residential mortgage
loans in the current period, stemming from the Company's sale of
its majority interest in Southern Trust Mortgage during the second
quarter of 2014.
- Total revenue generated by our wealth management group,
Middleburg Investment Group ("MIG") was $1.24 million for the quarter ended June 30, 2015, an increase of 2.05% compared to
the previous quarter and higher by 17.60% when compared to the
quarter ended June 30, 2014.
Fee income is based primarily upon the market value of assets under
administration which were $1.97
billion at June 30, 2015,
$1.87 billion at December 31, 2014 and $1.68 billion at June 30,
2014.
- Other operating income was $223,000 for the quarter ended June 30, 2015, a decrease of 73.52% when compared
to the previous quarter and a decrease of 19.78% when compared to
the quarter ended June 30,
2014. Most of the other operating income during the previous
quarter was the recovery of expenses related to a loan workout that
had previously been charged off.
NON-INTEREST EXPENSE
Non-interest expense increased by 1.90% when compared to
the previous quarter and decreased by 18.52% when compared to the
quarter ended June 30, 2014.
Principal categories of non-interest expense that changed were the
following:
- Salaries and employee benefit expenses increased by 2.58% when
compared to the previous quarter and declined by 17.02% when
compared to the quarter ended June
30, 2014. The increase in salary and benefit expenses
compared to the previous quarter was primarily due to an increase
in commissions and payments of signing bonuses. The decline
in salary and benefit expenses compared to the second quarter of
2014 was primarily due to the sale of the Company's majority
interest in Southern Trust Mortgage in the second quarter of
2014.
- Occupancy and equipment expense declined by 8.44% compared to
the previous quarter and by 26.98% compared to the same period in
2014. The primary reason for lower expenses in this category
compared to the previous quarter was primarily due to management's
overall expense control initiative. The year over year
decline was primarily due to the sale of Southern Trust Mortgage in
the second quarter of 2014.
- Other expenses increased by 13.72% compared to the
previous quarter and decreased by 23.30% compared to the same
period in 2014. Increased expenses related to deposit processing,
professional and advisory fees were the primary reasons for the
higher expenses when compared to the previous quarter. The
primary reason for lower expenses compared to the second quarter of
2014 was the sale of the Company's majority interest in Southern
Trust Mortgage in the second quarter of 2014.
ASSET QUALITY
The allowance for loans losses was $11.89
million or 1.54% of total loans at June 30, 2015 compared to $11.79 million or 1.56% of total loans at
December 31, 2014. During the
quarter, we sold $1.02 million of
nonperforming loans and upgraded the risk rating of several loans,
resulting in the release of reserves which led to a recovery of
provision for loan losses of $425,000
during the second quarter. Two loans from a single
borrower relationship underwent a restructuring during the second
quarter of 2015 and one of the loans was downgraded, which resulted
in total nonperforming assets increasing to $24.77 million or 1.99% of total assets compared
to $19.45 million or 1.59% to total
assets at December 31, 2014, increased total troubled debt
restructurings to $15.74 million at
June 30, 2015 compared to $6.90
million at December 31, 2014, and increased substandard
loans by 29.34% to $25.05 million at
June 30, 2015 from $19.37
million at December 31, 2014. While this loan was
restructured and downgraded during the second quarter 2015, the
Company had properly classified this loan as impaired at
December 31, 2014.
Asset quality factors that continue to improve include loans
that were delinquent for more than 90 days and still accruing
remain minimal as a percentage of total loans of 0.02% as of
June 30, 2015 and 0.004% as of December 31, 2014, past
due loans decreased from $4.85
million at December 31, 2014 to $2.08 million at June 30, 2015, a decrease
of 57.09%, and nonaccrual loans declined to $8.01 million as of June 30, 2015 from
$9.94 million as of December 31,
2014.
CONSOLIDATED ASSETS
Total consolidated assets at June 30,
2015 were $1.24 billion, an
increase of 1.56% since December 31,
2014. Changes in major asset categories were as follows:
- Cash balances and deposits with other banks decreased by
$5.62 million compared to
December 31, 2014.
- The Company deployed some of its excess liquidity into growing
its securities portfolio which increased by $3.73 million compared to December 31, 2014.
- Gross loan balances increased by $18.24
million from December 31,
2014.
CONSOLIDATED LIABILITIES
Total consolidated liabilities at June
30, 2015 were $1.12 billion,
an increase of 1.49% compared to December
31, 2014. Total deposits increased by $16.37 million from December 31, 2014 to $1.01
billion as of June 30,
2015. Federal Home Loan Bank borrowings increased by
$15.00 million from December 31, 2014 to $70.00 million at June 30,
2015.
SHAREHOLDERS' EQUITY AND CAPITAL
Shareholders' equity at June 30,
2015 was $124.79 million,
compared to $122.03 million at
December 31, 2014. Retained
earnings at June 30, 2015 were
$59.15 million compared to
$55.85 million at December 31, 2014. The book value of the
Company's common stock at June 30,
2015 was $17.42 per share
versus $17.11 per share at
December 31, 2014.
The Company's capital ratios remain well above regulatory
minimum capital ratios as of June 30,
2015:
- Tier 1 Leverage ratio was 9.85%, 5.85% over the regulatory
minimum of 4.00%.
- Common Equity Tier 1 Ratio was 16.35%, 9.35% over the
regulatory minimum of 7.00%.
- Tier 1 Risk-Based Capital Ratio was 17.04%, 8.54% over the
regulatory minimum of 8.50%.
- Total Risk Based Capital Ratio was 18.28%, 7.78% over the
regulatory minimum of 10.50%.
Caution about Forward Looking Statements
Certain information contained in this discussion may include
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These
forward-looking statements relate to the Company's future
operations and are generally identified by phrases such as "the
Company expects," "the Company believes" or words of similar
import. Although the Company believes that its expectations
with respect to the forward-looking statements are based upon
reliable assumptions within the bounds of its knowledge of its
business and operations, there can be no assurance that actual
results, performance or achievements of the Company will not differ
materially from any future results, performance or achievements
expressed or implied by such forward-looking statements. For
details on factors that could affect expectations, see the risk
factors and other cautionary language included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2014, and other filings with the
Securities and Exchange Commission.
About Middleburg Financial Corporation
Middleburg Financial Corporation is headquartered in
Middleburg, Virginia and has two
wholly owned subsidiaries, Middleburg Bank and Middleburg
Investment Group, Inc. Middleburg Bank serves communities in
Virginia with financial centers in
Ashburn, Gainesville, Leesburg, Marshall, Middleburg, Purcellville, Reston, Richmond, Warrenton and Williamsburg. Middleburg
Investment Group owns Middleburg Trust Company, which is
headquartered in Richmond,
Virginia with offices in Middleburg, Alexandria and Williamsburg.
MIDDLEBURG
FINANCIAL CORPORATION AND SUBSIDIARIES
|
Consolidated
Balance Sheets
|
(In thousands, except
for share and per share data)
|
|
|
|
|
|
(Unaudited)
|
|
|
|
June 30,
2015
|
|
December 31,
2014
|
ASSETS
|
|
|
|
Cash and due from
banks
|
$
|
5,001
|
|
|
$
|
7,396
|
|
Interest bearing
deposits with other banks
|
44,406
|
|
|
47,626
|
|
Total cash and cash
equivalents
|
49,407
|
|
|
55,022
|
|
Securities held to
maturity, fair value of $1,374 and $1,397, respectively
|
1,500
|
|
|
1,500
|
|
Securities available
for sale, at fair value
|
351,990
|
|
|
348,263
|
|
Restricted
securities, at cost
|
5,774
|
|
|
5,279
|
|
Loans, net of
allowance for loan losses of $11,894 and $11,786,
respectively
|
761,196
|
|
|
743,060
|
|
Premises and
equipment, net
|
19,888
|
|
|
18,104
|
|
Goodwill and
identified intangibles, net
|
3,722
|
|
|
3,807
|
|
Other real estate
owned, net of valuation allowance of $663 and $755,
respectively
|
3,402
|
|
|
4,051
|
|
Bank owned life
insurance
|
22,940
|
|
|
22,617
|
|
Accrued interest
receivable and other assets
|
22,166
|
|
|
21,154
|
|
TOTAL
ASSETS
|
$
|
1,241,985
|
|
|
$
|
1,222,857
|
|
|
|
|
|
LIABILITIES
|
|
|
|
Deposits:
|
|
|
|
Non-interest bearing
demand deposits
|
$
|
235,246
|
|
|
$
|
216,912
|
|
Savings and interest
bearing demand deposits
|
526,985
|
|
|
523,230
|
|
Time
deposits
|
243,221
|
|
|
248,938
|
|
Total
deposits
|
1,005,452
|
|
|
989,080
|
|
Securities sold under
agreements to repurchase
|
24,049
|
|
|
38,551
|
|
Federal Home Loan
Bank borrowings
|
70,000
|
|
|
55,000
|
|
Subordinated
notes
|
5,155
|
|
|
5,155
|
|
Accrued interest
payable and other liabilities
|
12,539
|
|
|
13,037
|
|
TOTAL
LIABILITIES
|
1,117,195
|
|
|
1,100,823
|
|
Commitments and
contingent liabilities
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Common stock ($2.50
par value; 20,000,000 shares authorized, 7,163,255 and
7,131,643,
issued and outstanding, respectively)
|
17,521
|
|
|
17,494
|
|
Capital
surplus
|
45,063
|
|
|
44,892
|
|
Retained
earnings
|
59,152
|
|
|
55,854
|
|
Accumulated other
comprehensive income
|
3,054
|
|
|
3,794
|
|
TOTAL SHAREHOLDERS'
EQUITY
|
124,790
|
|
|
122,034
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
|
$
|
1,241,985
|
|
|
$
|
1,222,857
|
|
MIDDLEBURG
FINANCIAL CORPORATION AND SUBSIDIARIES
|
Consolidated
Statements of Income
|
(In thousands, except
for per share data)
|
|
(Unaudited)
|
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
INTEREST AND DIVIDEND
INCOME
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
8,014
|
|
|
$
|
8,493
|
|
|
$
|
16,257
|
|
|
$
|
17,299
|
|
Interest and
dividends on securities
|
|
|
|
|
|
|
|
Taxable
|
1,792
|
|
|
1,792
|
|
|
3,698
|
|
|
3,410
|
|
Tax-exempt
|
449
|
|
|
537
|
|
|
910
|
|
|
1,121
|
|
Dividends
|
66
|
|
|
72
|
|
|
125
|
|
|
145
|
|
Interest on deposits
with other banks and federal funds sold
|
31
|
|
|
47
|
|
|
61
|
|
|
73
|
|
Total interest and
dividend income
|
10,352
|
|
|
10,941
|
|
|
21,051
|
|
|
22,048
|
|
INTEREST
EXPENSE
|
|
|
|
|
|
|
|
Interest on
deposits
|
848
|
|
|
995
|
|
|
1,703
|
|
|
1,997
|
|
Interest on
securities sold under agreements to repurchase
|
17
|
|
|
81
|
|
|
62
|
|
|
161
|
|
Interest on FHLB
borrowings and other debt
|
174
|
|
|
355
|
|
|
342
|
|
|
668
|
|
Total interest
expense
|
1,039
|
|
|
1,431
|
|
|
2,107
|
|
|
2,826
|
|
NET INTEREST
INCOME
|
9,313
|
|
|
9,510
|
|
|
18,944
|
|
|
19,222
|
|
(Recovery of)
provision for loan losses
|
(425)
|
|
|
72
|
|
|
25
|
|
|
960
|
|
NET INTEREST INCOME
AFTER (RECOVERY OF) PROVISION
FOR LOAN LOSSES
|
9,738
|
|
|
9,438
|
|
|
18,919
|
|
|
18,262
|
|
NON-INTEREST
INCOME
|
|
|
|
|
|
|
|
Service charges on
deposit accounts
|
612
|
|
|
622
|
|
|
1,170
|
|
|
1,180
|
|
Trust services
income
|
1,243
|
|
|
1,057
|
|
|
2,461
|
|
|
2,105
|
|
Gaines (losses) on
sales of loans held for sale
|
(6)
|
|
|
1,916
|
|
|
(6)
|
|
|
4,858
|
|
Gains on sales of
securities available for sale, net
|
37
|
|
|
66
|
|
|
138
|
|
|
129
|
|
Commissions on
investment sales
|
154
|
|
|
146
|
|
|
283
|
|
|
286
|
|
Bank owned life
insurance
|
163
|
|
|
164
|
|
|
323
|
|
|
326
|
|
Gain on sale of
majority interest in consolidated subsidiary
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
Other operating
income
|
223
|
|
|
278
|
|
|
1,065
|
|
|
1,247
|
|
Total non-interest
income
|
2,426
|
|
|
4,273
|
|
|
5,434
|
|
|
10,155
|
|
NON-INTEREST
EXPENSE
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
4,973
|
|
|
5,993
|
|
|
9,821
|
|
|
13,026
|
|
Occupancy and
equipment
|
1,226
|
|
|
1,679
|
|
|
2,565
|
|
|
3,579
|
|
Advertising
|
101
|
|
|
131
|
|
|
234
|
|
|
294
|
|
Computer
operations
|
522
|
|
|
510
|
|
|
1,012
|
|
|
969
|
|
Other real estate
owned
|
25
|
|
|
12
|
|
|
92
|
|
|
179
|
|
Other
taxes
|
231
|
|
|
220
|
|
|
454
|
|
|
417
|
|
Federal deposit
insurance
|
184
|
|
|
230
|
|
|
395
|
|
|
468
|
|
Other operating
expenses
|
1,807
|
|
|
2,356
|
|
|
3,396
|
|
|
4,335
|
|
Total non-interest
expense
|
9,069
|
|
|
11,131
|
|
|
17,969
|
|
|
23,267
|
|
Income before income
taxes
|
3,095
|
|
|
2,580
|
|
|
6,384
|
|
|
5,150
|
|
Income tax
expense
|
815
|
|
|
667
|
|
|
1,656
|
|
|
1,415
|
|
NET INCOME
|
2,280
|
|
|
1,913
|
|
|
4,728
|
|
|
3,735
|
|
Net (income) loss
attributable to non-controlling interest
|
—
|
|
|
(58)
|
|
|
—
|
|
|
98
|
|
Net income
attributable to Middleburg Financial Corporation
|
$
|
2,280
|
|
|
$
|
1,855
|
|
|
$
|
4,728
|
|
|
$
|
3,833
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.32
|
|
|
$
|
0.26
|
|
|
$
|
0.66
|
|
|
$
|
0.54
|
|
Diluted
|
$
|
0.32
|
|
|
$
|
0.26
|
|
|
$
|
0.66
|
|
|
$
|
0.54
|
|
Dividends per common
share
|
$
|
0.10
|
|
|
$
|
0.07
|
|
|
$
|
0.20
|
|
|
$
|
0.14
|
|
MIDDLEBURG
FINANCIAL CORPORATION AND SUBSIDIARIES
|
Quarterly Summary
Statements of Income
|
(Unaudited, Dollars
In thousands, except for per share data)
|
|
For the Three
Months Ended
|
|
June
30,
2015
|
|
March
31,
2015
|
|
December
31,
2014
|
|
September
30,
2014
|
|
June
30,
2014
|
INTEREST AND DIVIDEND
INCOME
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
8,014
|
|
|
$
|
8,243
|
|
|
$
|
8,176
|
|
|
$
|
8,357
|
|
|
$
|
8,493
|
|
Interest and
dividends on securities
|
|
|
|
|
|
|
|
|
|
Taxable
|
1,792
|
|
|
1,906
|
|
|
1,728
|
|
|
1,763
|
|
|
1,792
|
|
Tax-exempt
|
449
|
|
|
461
|
|
|
481
|
|
|
535
|
|
|
537
|
|
Dividends
|
66
|
|
|
59
|
|
|
64
|
|
|
84
|
|
|
72
|
|
Interest on deposits
with other banks and federal funds sold
|
31
|
|
|
30
|
|
|
38
|
|
|
51
|
|
|
47
|
|
Total interest and
dividend income
|
10,352
|
|
|
10,699
|
|
|
10,487
|
|
|
10,790
|
|
|
10,941
|
|
INTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
848
|
|
|
855
|
|
|
933
|
|
|
955
|
|
|
995
|
|
Interest on
securities sold under agreements to repurchase
|
17
|
|
|
45
|
|
|
79
|
|
|
81
|
|
|
81
|
|
Interest on FHLB
borrowings and other debt
|
174
|
|
|
168
|
|
|
160
|
|
|
209
|
|
|
355
|
|
Total interest
expense
|
1,039
|
|
|
1,068
|
|
|
1,172
|
|
|
1,245
|
|
|
1,431
|
|
NET INTEREST
INCOME
|
9,313
|
|
|
9,631
|
|
|
9,315
|
|
|
9,545
|
|
|
9,510
|
|
(Recovery of)
provision for loan losses
|
(425)
|
|
|
450
|
|
|
450
|
|
|
550
|
|
|
72
|
|
NET INTEREST INCOME
AFTER (RECOVERY
OF) PROVISION FOR LOAN LOSSES
|
9,738
|
|
|
9,181
|
|
|
8,865
|
|
|
8,995
|
|
|
9,438
|
|
NON-INTEREST
INCOME
|
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts
|
612
|
|
|
558
|
|
|
606
|
|
|
635
|
|
|
622
|
|
Trust services
income
|
1,243
|
|
|
1,218
|
|
|
1,138
|
|
|
1,119
|
|
|
1,057
|
|
Gains (losses) on
sales of loans held for sale
|
(6)
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1,916
|
|
Gains on sales of
securities available for sale, net
|
37
|
|
|
101
|
|
|
45
|
|
|
12
|
|
|
66
|
|
Commissions on
investment sales
|
154
|
|
|
129
|
|
|
132
|
|
|
193
|
|
|
146
|
|
Bank owned life
insurance
|
163
|
|
|
160
|
|
|
168
|
|
|
168
|
|
|
164
|
|
Gain on sale of
majority interest in consolidated
subsidiary
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
Other operating
income
|
223
|
|
|
842
|
|
|
260
|
|
|
152
|
|
|
278
|
|
Total non-interest
income
|
2,426
|
|
|
3,008
|
|
|
2,350
|
|
|
2,280
|
|
|
4,273
|
|
NON-INTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
4,973
|
|
|
4,848
|
|
|
5,134
|
|
|
4,441
|
|
|
5,993
|
|
Occupancy and
equipment
|
1,226
|
|
|
1,339
|
|
|
1,336
|
|
|
1,262
|
|
|
1,679
|
|
Advertising
|
101
|
|
|
133
|
|
|
(65)
|
|
|
136
|
|
|
131
|
|
Computer
operations
|
522
|
|
|
490
|
|
|
485
|
|
|
439
|
|
|
510
|
|
Other real estate
owned
|
25
|
|
|
67
|
|
|
110
|
|
|
(33)
|
|
|
12
|
|
Other
taxes
|
231
|
|
|
223
|
|
|
212
|
|
|
220
|
|
|
220
|
|
Federal deposit
insurance
|
184
|
|
|
211
|
|
|
212
|
|
|
220
|
|
|
230
|
|
Other operating
expenses
|
1,807
|
|
|
1,589
|
|
|
1,999
|
|
|
1,706
|
|
|
2,356
|
|
Total non-interest
expense
|
9,069
|
|
|
8,900
|
|
|
9,423
|
|
|
8,391
|
|
|
11,131
|
|
Income before income
taxes
|
3,095
|
|
|
3,289
|
|
|
1,792
|
|
|
2,884
|
|
|
2,580
|
|
Income tax
expense
|
815
|
|
|
841
|
|
|
162
|
|
|
763
|
|
|
667
|
|
NET INCOME
|
2,280
|
|
|
2,448
|
|
|
1,630
|
|
|
2,121
|
|
|
1,913
|
|
Net loss (income)
attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58)
|
|
Net income
attributable to Middleburg Financial Corporation
|
$
|
2,280
|
|
|
$
|
2,448
|
|
|
$
|
1,630
|
|
|
$
|
2,121
|
|
|
$
|
1,855
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.32
|
|
|
$
|
0.34
|
|
|
$
|
0.23
|
|
|
$
|
0.30
|
|
|
$
|
0.26
|
|
Diluted
|
$
|
0.32
|
|
|
$
|
0.34
|
|
|
$
|
0.23
|
|
|
$
|
0.30
|
|
|
$
|
0.26
|
|
Dividends per common
share
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.07
|
|
MIDDLEBURG
FINANCIAL CORPORATION AND SUBSIDIARIES
|
Selected Financial
Data by Quarter
|
(Unaudited, Dollars
in thousands, except for per share data)
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
2015
|
|
2015
|
|
2014
|
|
2014
|
|
2014
|
BALANCE SHEET
RATIOS
|
|
|
|
|
|
|
|
|
|
Loans to
deposits
|
76.89
|
%
|
|
74.60
|
%
|
|
76.32
|
%
|
|
73.87
|
%
|
|
72.65
|
%
|
Average
interest-earning assets to average
interest-bearing liabilities
|
135.72
|
%
|
|
136.04
|
%
|
|
133.54
|
%
|
|
130.14
|
%
|
|
128.37
|
%
|
INCOME STATEMENT
RATIOS
|
|
|
|
|
|
|
|
|
|
Return on average
assets (ROA)
|
0.73
|
%
|
|
0.80
|
%
|
|
0.53
|
%
|
|
0.69
|
%
|
|
0.61
|
%
|
Return on average
equity (ROE)
|
7.31
|
%
|
|
8.01
|
%
|
|
5.31
|
%
|
|
7.00
|
%
|
|
6.30
|
%
|
Net interest margin
(1)
|
3.24
|
%
|
|
3.40
|
%
|
|
3.31
|
%
|
|
3.36
|
%
|
|
3.38
|
%
|
Yield on average
earning assets
|
3.59
|
%
|
|
3.77
|
%
|
|
3.72
|
%
|
|
3.79
|
%
|
|
3.88
|
%
|
Cost of
funds
|
0.38
|
%
|
|
0.39
|
%
|
|
0.43
|
%
|
|
0.45
|
%
|
|
0.52
|
%
|
Efficiency ratio
(5)
|
74.88
|
%
|
|
68.35
|
%
|
|
77.53
|
%
|
|
68.82
|
%
|
|
78.99
|
%
|
PER SHARE
DATA
|
|
|
|
|
|
|
|
|
|
Dividends
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.07
|
|
Book value
|
17.42
|
|
|
17.51
|
|
|
17.11
|
|
|
16.97
|
|
|
16.73
|
|
Tangible book value
(4)
|
16.90
|
|
|
16.99
|
|
|
16.58
|
|
|
16.43
|
|
|
16.19
|
|
SHARE PRICE
DATA
|
|
|
|
|
|
|
|
|
|
Closing
price
|
$
|
18.00
|
|
|
$
|
18.30
|
|
|
$
|
18.01
|
|
|
$
|
17.74
|
|
|
$
|
20.00
|
|
Diluted earnings
multiple (2)
|
14.06
|
|
|
13.45
|
|
|
16.99
|
|
|
14.78
|
|
|
19.23
|
|
Book value multiple
(3)
|
1.03
|
|
|
1.04
|
|
|
1.05
|
|
|
1.05
|
|
|
1.20
|
|
COMMON STOCK
DATA
|
|
|
|
|
|
|
|
|
|
Outstanding shares at
end of period
|
7,163,255
|
|
|
7,127,105
|
|
|
7,131,643
|
|
|
7,123,914
|
|
|
7,113,744
|
|
Weighted average
shares O/S , basic - QTD
|
7,145,929
|
|
|
7,127,910
|
|
|
7,127,164
|
|
|
7,108,450
|
|
|
7,093,788
|
|
Weighted average
shares O/S, diluted - QTD
|
7,167,165
|
|
|
7,148,702
|
|
|
7,146,140
|
|
|
7,134,262
|
|
|
7,117,826
|
|
Dividend payout
ratio
|
31.25
|
%
|
|
29.41
|
%
|
|
43.48
|
%
|
|
33.33
|
%
|
|
26.92
|
%
|
CAPITAL
RATIOS
|
|
|
|
|
|
|
|
|
|
Capital to assets -
common shareholders
|
10.05
|
%
|
|
9.86
|
%
|
|
9.98
|
%
|
|
10.01
|
%
|
|
9.50
|
%
|
Leverage
ratio
|
9.85
|
%
|
|
9.76
|
%
|
|
9.90
|
%
|
|
9.71
|
%
|
|
9.54
|
%
|
Common equity tier 1
ratio
|
16.35
|
%
|
|
16.49
|
%
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Tier 1 risk based
capital ratio
|
17.04
|
%
|
|
17.20
|
%
|
|
15.70
|
%
|
|
16.04
|
%
|
|
15.63
|
%
|
Total risk based
capital ratio
|
18.28
|
%
|
|
18.45
|
%
|
|
16.95
|
%
|
|
17.30
|
%
|
|
16.88
|
%
|
CREDIT
QUALITY
|
|
|
|
|
|
|
|
|
|
Net
charge-offs/recoveries to average loans
|
(0.04)
|
%
|
|
0.03
|
%
|
|
0.46
|
%
|
|
0.09
|
%
|
|
0.23
|
%
|
Total nonperforming
loans to total loans
|
2.63
|
%
|
|
1.83
|
%
|
|
1.89
|
%
|
|
1.63
|
%
|
|
2.10
|
%
|
Total nonperforming
assets to total assets
|
1.99
|
%
|
|
1.46
|
%
|
|
1.59
|
%
|
|
1.50
|
%
|
|
1.57
|
%
|
Nonaccrual loans
to:
|
|
|
|
|
|
|
|
|
|
Total
loans
|
1.04
|
%
|
|
1.26
|
%
|
|
1.32
|
%
|
|
1.01
|
%
|
|
1.43
|
%
|
Total
assets
|
0.64
|
%
|
|
0.76
|
%
|
|
0.81
|
%
|
|
0.61
|
%
|
|
0.83
|
%
|
Allowance for loan
losses to:
|
|
|
|
|
|
|
|
|
|
Total
loans
|
1.54
|
%
|
|
1.58
|
%
|
|
1.56
|
%
|
|
1.57
|
%
|
|
1.58
|
%
|
Nonperforming
assets
|
48.03
|
%
|
|
65.23
|
%
|
|
60.59
|
%
|
|
63.18
|
%
|
|
58.50
|
%
|
Nonaccrual
loans
|
148.53
|
%
|
|
124.92
|
%
|
|
118.52
|
%
|
|
155.80
|
%
|
|
110.57
|
%
|
NONPERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
Loans delinquent 90+
days and still accruing
|
$
|
173
|
|
|
$
|
74
|
|
|
$
|
30
|
|
|
$
|
30
|
|
|
$
|
355
|
|
Nonaccrual
loans
|
8,008
|
|
|
9,625
|
|
|
9,944
|
|
|
7,332
|
|
|
10,408
|
|
Restructured loans
(not in nonaccrual)
|
12,138
|
|
|
4,262
|
|
|
4,295
|
|
|
4,522
|
|
|
4,552
|
|
Other real estate
owned
|
3,402
|
|
|
3,402
|
|
|
4,051
|
|
|
5,064
|
|
|
4,356
|
|
Repossessed
assets
|
1,044
|
|
|
1,070
|
|
|
1,132
|
|
|
1,132
|
|
|
—
|
|
Total
nonperforming assets
|
$
|
24,765
|
|
|
$
|
18,433
|
|
|
$
|
19,452
|
|
|
$
|
18,080
|
|
|
$
|
19,671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The net interest
margin is calculated by dividing tax equivalent net interest income
by total average earning assets. Tax equivalent net interest income
is calculated by grossing up interest income for the amounts that
are non taxable (i.e., municipal income) then subtracting interest
expense. The tax rate utilized is 34%. The Company's net interest
margin is a common measure used by the financial service industry
to determine how profitably earning assets are funded. Because the
Company earns non taxable interest income due to the mix in its
investment and loan portfolios, net interest income for the ratio
is calculated on a tax equivalent basis as described above. This
calculation excludes net securities gains and losses.
|
(2)
|
The diluted earnings
multiple is calculated by dividing the period's closing market
price per share by the annualized diluted earnings per share for
the period. The diluted earnings multiple is a measure of how
much an investor may be willing to pay for $1.00 of the Company's
earnings.
|
(3)
|
The book value
multiple (or price to book ratio) is calculated by dividing the
period's closing market price per share by the period's book value
per share. The book value multiple is a measure used to
compare the Company's market value per share to its book value per
share.
|
(4)
|
Tangible book value
is not a measurement under accounting principles generally accepted
in the United States. It is computed by subtracting
identified intangible assets and goodwill from total Middleburg
Financial Corporation shareholders' equity and then dividing the
result by the number of shares of common stock issued and
outstanding at the end of the accounting period.
|
(5)
|
The efficiency ratio
is not a measurement under accounting principles generally accepted
in the United States. It is calculated by dividing non-interest
expense (adjusted for amortization of intangibles, other real
estate expenses, and non-recurring one-time charges) by the sum of
tax equivalent net interest income and non-interest income
excluding gains and losses on the investment portfolio. The tax
rate utilized in calculating tax equivalent amounts is 34%. The
Company calculates and reviews this ratio as a means of evaluating
operational efficiency.
|
MIDDLEBURG
FINANCIAL CORPORATION AND SUBSIDIARIES
Average Balances,
Income and Expenses, Yields and Rates
(Unaudited)
|
|
Three months ended
June 30,
|
|
2015
|
|
2014
|
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate (2)
|
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate (2)
|
|
(Dollars in
thousands)
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
$
|
315,874
|
|
|
$
|
1,858
|
|
|
2.36
|
%
|
|
$
|
276,110
|
|
|
$
|
1,864
|
|
|
2.71
|
%
|
Tax-exempt
(1)
|
51,199
|
|
|
680
|
|
|
5.33
|
%
|
|
57,394
|
|
|
814
|
|
|
5.69
|
%
|
Total
securities
|
$
|
367,073
|
|
|
$
|
2,538
|
|
|
2.77
|
%
|
|
$
|
333,504
|
|
|
$
|
2,678
|
|
|
3.22
|
%
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
$
|
764,101
|
|
|
$
|
8,009
|
|
|
4.20
|
%
|
|
$
|
744,009
|
|
|
$
|
8,487
|
|
|
4.58
|
%
|
Tax-exempt (1)
|
615
|
|
|
8
|
|
|
5.22
|
%
|
|
652
|
|
|
9
|
|
|
5.54
|
%
|
Total loans
(3)
|
$
|
764,716
|
|
|
$
|
8,017
|
|
|
4.20
|
%
|
|
$
|
744,661
|
|
|
$
|
8,496
|
|
|
4.58
|
%
|
Interest on deposits
with other banks and
federal funds sold
|
50,861
|
|
|
31
|
|
|
0.24
|
%
|
|
81,552
|
|
|
47
|
|
|
0.23
|
%
|
Total earning
assets
|
$
|
1,182,650
|
|
|
$
|
10,586
|
|
|
3.59
|
%
|
|
$
|
1,159,717
|
|
|
$
|
11,221
|
|
|
3.88
|
%
|
Less: allowance for
loan losses
|
(12,150)
|
|
|
|
|
|
|
(12,606)
|
|
|
|
|
|
Total nonearning
assets
|
76,720
|
|
|
|
|
|
|
78,679
|
|
|
|
|
|
Total
assets
|
$
|
1,247,220
|
|
|
|
|
|
|
$
|
1,225,790
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
Checking
|
$
|
345,768
|
|
|
$
|
173
|
|
|
0.20
|
%
|
|
$
|
340,789
|
|
|
$
|
161
|
|
|
0.19
|
%
|
Regular
savings
|
118,467
|
|
|
55
|
|
|
0.19
|
%
|
|
113,487
|
|
|
53
|
|
|
0.19
|
%
|
Money market
savings
|
66,300
|
|
|
31
|
|
|
0.19
|
%
|
|
73,308
|
|
|
35
|
|
|
0.19
|
%
|
Time
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
$100,000 and
over
|
129,519
|
|
|
286
|
|
|
0.89
|
%
|
|
123,527
|
|
|
317
|
|
|
1.03
|
%
|
Under
$100,000
|
107,352
|
|
|
303
|
|
|
1.13
|
%
|
|
132,002
|
|
|
429
|
|
|
1.30
|
%
|
Total
interest-bearing deposits
|
$
|
767,406
|
|
|
$
|
848
|
|
|
0.44
|
%
|
|
$
|
783,113
|
|
|
$
|
995
|
|
|
0.51
|
%
|
Securities sold under
agreements to repurchase
|
29,168
|
|
|
17
|
|
|
0.25
|
%
|
|
35,114
|
|
|
81
|
|
|
0.93
|
%
|
FHLB borrowings and
other debt
|
74,825
|
|
|
174
|
|
|
0.93
|
%
|
|
85,155
|
|
|
355
|
|
|
1.60
|
%
|
Federal funds
purchased
|
4
|
|
|
—
|
|
|
—
|
%
|
|
4
|
|
|
—
|
|
|
—
|
%
|
Total
interest-bearing liabilities
|
$
|
871,403
|
|
|
$
|
1,039
|
|
|
0.48
|
%
|
|
$
|
903,386
|
|
|
$
|
1,431
|
|
|
0.63
|
%
|
Non-interest bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
237,560
|
|
|
|
|
|
|
194,779
|
|
|
|
|
|
Other
liabilities
|
13,149
|
|
|
|
|
|
|
9,936
|
|
|
|
|
|
Total
liabilities
|
$
|
1,122,112
|
|
|
|
|
|
|
$
|
1,108,101
|
|
|
|
|
|
Non-controlling
interest
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
Shareholders'
equity
|
125,108
|
|
|
|
|
|
|
117,689
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
1,247,220
|
|
|
|
|
|
|
$
|
1,225,790
|
|
|
|
|
|
Net interest
income
|
|
|
$
|
9,547
|
|
|
|
|
|
|
$
|
9,790
|
|
|
|
Interest rate
spread
|
|
|
|
|
3.11
|
%
|
|
|
|
|
|
3.25
|
%
|
Cost of
Funds
|
|
|
|
|
0.38
|
%
|
|
|
|
|
|
0.52
|
%
|
Interest expense as a
percent of average earning assets
|
|
|
|
|
0.35
|
%
|
|
|
|
|
|
0.49
|
%
|
Net interest
margin
|
|
|
|
|
3.24
|
%
|
|
|
|
|
|
3.38
|
%
|
|
(1) Income and yields are
reported on tax equivalent basis assuming a federal tax rate of
34%.
|
(2) All yields and rates have
been annualized on a 365 day year.
|
(3) Total average loans
include loans on non-accrual status.
|
MIDDLEBURG
FINANCIAL CORPORATION AND SUBSIDIARIES
Average Balances,
Income and Expenses, Yields and Rates
(Unaudited)
|
|
Six months ended
June 30,
|
|
2015
|
|
2014
|
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate (2)
|
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate (2)
|
|
(Dollars in
thousands)
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
$
|
312,875
|
|
|
$
|
3,823
|
|
|
2.46
|
%
|
|
$
|
276,510
|
|
|
$
|
3,555
|
|
|
2.59
|
%
|
Tax-exempt
(1)
|
51,899
|
|
|
1,379
|
|
|
5.36
|
%
|
|
59,155
|
|
|
1,698
|
|
|
5.79
|
%
|
Total
securities
|
$
|
364,774
|
|
|
$
|
5,202
|
|
|
2.88
|
%
|
|
$
|
335,665
|
|
|
$
|
5,253
|
|
|
3.16
|
%
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
$
|
757,880
|
|
|
$
|
16,246
|
|
|
4.32
|
%
|
|
$
|
750,666
|
|
|
$
|
17,288
|
|
|
4.64
|
%
|
Tax-exempt (1)
|
615
|
|
|
16
|
|
|
5.25
|
%
|
|
652
|
|
|
17
|
|
|
5.26
|
%
|
Total loans
(3)
|
$
|
758,495
|
|
|
$
|
16,262
|
|
|
4.32
|
%
|
|
$
|
751,318
|
|
|
$
|
17,305
|
|
|
4.66
|
%
|
Interest on deposits
with other banks and
federal funds sold
|
56,003
|
|
|
61
|
|
|
0.22
|
%
|
|
65,268
|
|
|
73
|
|
|
0.23
|
%
|
Total earning
assets
|
$
|
1,179,272
|
|
|
$
|
21,525
|
|
|
3.68
|
%
|
|
$
|
1,152,251
|
|
|
$
|
22,631
|
|
|
3.96
|
%
|
Less: allowance for
loan losses
|
(11,907)
|
|
|
|
|
|
|
(13,101)
|
|
|
|
|
|
Total nonearning
assets
|
76,473
|
|
|
|
|
|
|
80,133
|
|
|
|
|
|
Total
assets
|
$
|
1,243,838
|
|
|
|
|
|
|
$
|
1,219,283
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
Checking
|
$
|
341,471
|
|
|
$
|
339
|
|
|
0.20
|
%
|
|
$
|
336,690
|
|
|
$
|
322
|
|
|
0.19
|
%
|
Regular
savings
|
116,902
|
|
|
108
|
|
|
0.19
|
%
|
|
113,262
|
|
|
105
|
|
|
0.19
|
%
|
Money market
savings
|
67,909
|
|
|
63
|
|
|
0.19
|
%
|
|
74,864
|
|
|
71
|
|
|
0.19
|
%
|
Time
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
$100,000 and
over
|
130,872
|
|
|
579
|
|
|
0.89
|
%
|
|
126,948
|
|
|
640
|
|
|
1.02
|
%
|
Under
$100,000
|
108,851
|
|
|
614
|
|
|
1.14
|
%
|
|
131,385
|
|
|
859
|
|
|
1.32
|
%
|
Total
interest-bearing deposits
|
$
|
766,005
|
|
|
$
|
1,703
|
|
|
0.45
|
%
|
|
$
|
783,149
|
|
|
$
|
1,997
|
|
|
0.51
|
%
|
Securities sold under
agreements to repurchase
|
31,452
|
|
|
62
|
|
|
0.40
|
%
|
|
35,431
|
|
|
161
|
|
|
0.90
|
%
|
FHLB borrowings and
other debt
|
70,431
|
|
|
342
|
|
|
0.98
|
%
|
|
85,155
|
|
|
668
|
|
|
1.54
|
%
|
Federal funds
purchased
|
2
|
|
|
—
|
|
|
—
|
%
|
|
2
|
|
|
—
|
|
|
—
|
%
|
Total
interest-bearing liabilities
|
$
|
867,890
|
|
|
$
|
2,107
|
|
|
0.49
|
%
|
|
$
|
903,737
|
|
|
$
|
2,826
|
|
|
0.63
|
%
|
Non-interest bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
238,169
|
|
|
|
|
|
|
189,807
|
|
|
|
|
|
Other
liabilities
|
13,283
|
|
|
|
|
|
|
9,549
|
|
|
|
|
|
Total
liabilities
|
$
|
1,119,342
|
|
|
|
|
|
|
$
|
1,103,093
|
|
|
|
|
|
Non-controlling
interest
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
Shareholders'
equity
|
124,496
|
|
|
|
|
|
|
116,190
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
1,243,838
|
|
|
|
|
|
|
$
|
1,219,283
|
|
|
|
|
|
Net interest
income
|
|
|
$
|
19,418
|
|
|
|
|
|
|
$
|
19,805
|
|
|
|
Interest rate
spread
|
|
|
|
|
3.19
|
%
|
|
|
|
|
|
3.33
|
%
|
Cost of
Funds
|
|
|
|
|
0.38
|
%
|
|
|
|
|
|
0.52
|
%
|
Interest expense as a
percent of average earning assets
|
|
|
|
|
0.36
|
%
|
|
|
|
|
|
0.49
|
%
|
Net interest
margin
|
|
|
|
|
3.32
|
%
|
|
|
|
|
|
3.47
|
%
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/middleburg-financial-corporation-announces-second-quarter-2015-results-300120543.html
SOURCE Middleburg Financial Corporation