Middleburg Financial Corporation Announces First Quarter 2012 Results

02 May, 2012, 10:00 ET from Middleburg Financial Corporation

MIDDLEBURG, Va., May 2, 2012 /PRNewswire/ -- Middleburg Financial Corporation (the "Company") (Nasdaq: MBRG), today announced net income of $1.6 million for the first quarter of 2012.

"Middleburg Financial Corporation continued to show improved operating results during the first quarter of 2012," commented Gary R. Shook, president and chief executive officer of the Company.  "Moreover, with a 29% increase in net income coupled with a 22% increase in total revenue over the first quarter of 2011, we are poised for continued improvement throughout 2012.  We are especially focused on loan generation and expense control in all areas of the operations.  Loan production at Middleburg Bank and Southern Trust Mortgage continue to show strength, while new business development initiatives are showing strong results at Middleburg Investment Group.  Although our NPA's continued to be elevated, we are beginning to see a leveling out of problem assets."

First Quarter 2012 Highlights:

  • Net income of $1.6 million or $0.23 per diluted share, compared to $1.2 million or $0.18 per diluted share for the first quarter of 2011;
  • Net interest margin of 3.69%, compared to 3.80% for the first quarter of 2011;
  • Total revenue of $15.7  million, up 21.8%  compared to the first quarter of 2011;
  • Loan growth of 1.6% for the quarter;
  • Total assets of $1.2 billion, an increase of 0.9% over December 31, 2011;
  • Deposits increased by $21.9 million or 2.4% since December 31, 2011;
  • Provision for loan losses increased by 74.4% compared to first quarter of 2011; and
  • Capital ratios continue to be strong: Tangible Common Equity Ratio of 8.5%, Total Risk-Based Capital Ratio of 14.8%, Tier 1 Risk-Based Capital Ratio of 13.6%, and a Tier 1 Leverage Ratio of 8.9% at March 31, 2012.

Total Revenue

Total revenue was $15.7 million in the quarter ended March 31, 2012 compared to $17.8 million in the quarter ended December 31, 2011, representing a decrease of 11.8% and $12.9 million in the quarter ended March 31, 2011, representing an increase of 21.7%.    

Net interest income was $9.9 million during the three months ended March 31, 2012, which was 0.4% lower than the quarter ended December 31, 2011 and an increase of 9.8% compared to the quarter ended March 31, 2011. The yield on average earning assets was 4.56% for the quarter ended March 31, 2012 compared to 4.55% for the previous quarter and 4.91% for the quarter ended March 31, 2011, representing an increase of 1 basis point from the previous quarter and a decrease of 35 basis points from the quarter ended March 31, 2011.  The decrease in the yield on earning assets from the quarter ended March 31, 2011 reflected a 32 basis point decrease in the yield on the loan portfolio and a decrease of 24 basis points in the yield on the securities portfolio. 

The average cost of interest bearing liabilities was 1.06% for the quarter ended March 31, 2012, compared to 1.07% in the previous quarter, and 1.30% for the quarter ended March 31, 2011, representing a decrease of 1 basis point from the previous quarter and a decrease of 24 basis points from the quarter ended March 31, 2011.  Costs for wholesale borrowings decreased by 3 basis points during the quarter, while costs for retail deposits decreased by 2 basis points during the same period.  The decline in the cost of retail deposits during the quarter ended March 31, 2012, compared to the previous quarter, was primarily due to reductions in interest expenses related to time deposits. Lower rates also allowed us to refinance maturing brokered deposits and Federal Home Loan Bank advances during the quarter. Cost of funds is calculated by dividing annualized total interest expense by the sum of average interest bearing liabilities and average demand deposits. Cost of funds was 0.91% for the quarter ended March 31, 2012 compared to 0.92% for the quarter ended December 31, 2011, a decrease of 1 basis point from the previous quarter.

The net interest margin for the three months ended March 31, 2012 was 3.69%, compared to 3.67% for the previous quarter, and 3.80% for the quarter ended March 31, 2011, representing an increase of 2 basis points from the previous quarter and a decrease of 11 basis points compared to the quarter ended March 31, 2011.  

The Company's net interest margin is not a measurement under accounting principles generally accepted in the United States, but it is a common measure used by the financial services industry to determine how profitably earning assets are funded. The Company's 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%. Details on the calculation of the net interest margin are included in the "Key Statistics" table.

Non-interest income decreased by $535,000 or 8.4% when comparing the quarter ended March 31, 2012 to the previous quarter and increased by $1.9 million or 49.6% compared to the quarter ended March 31, 2011. The primary reason for the lower non-interest income in the first quarter of 2012 relative to the prior quarter was lower gain-on-sale revenues from the Company's mortgage operations.

Southern Trust Mortgage originated $210.8 million in mortgage loans during the quarter ended March 31, 2012 compared to $212.2 million originated during the previous quarter, and $136.5 million originated during the quarter ended March 31, 2011, virtually unchanged compared to the previous quarter and an increase of 54.4% when comparing calendar quarters.  Gains on mortgage loan sales decreased by 12.2% when comparing the quarter ended March 31, 2012 to the previous quarter.  Gains on mortgage loan sales increased by 95.4% when comparing the quarter ended March 31, 2012 to the quarter ended March 31, 2011.  Gains on mortgage loan sales included in the accompanying statement of income are presented net of originator commissions incurred to originate the loans.  

The revenues and expenses of Southern Trust Mortgage for the three month periods ended March 31, 2012 and March 31, 2011 are reflected in the Company's financial statements on a consolidated basis following generally accepted accounting principles in the United States.  The outstanding equity interest not held by the Company is reported on the Company's balance sheet as "Non-controlling interest in consolidated subsidiary" and the earnings or loss attributable to the non-controlling interest is reported on the Company's statement of income as "Net (income) / loss attributable to non-controlling interest."

Trust and investment advisory service fees earned by Middleburg Trust Company ("MTC") increased by 1.2% when comparing the quarter ended March 31, 2012 to the previous quarter, and increased by 6.2% compared to the quarter ended March 31, 2011.  Trust and investment advisory fees are based primarily upon the market value of the accounts under administration. Total consolidated assets under administration by MTC were at $1.3 billion at March 31, 2012, an increase of 1.0% relative to December 31, 2011 and an increase of 1.0% relative to March 31, 2011.

Mr. Shook commented, "It is especially gratifying to note that the consolidation of all assets under administration for Middleburg Investment Group, shows that entity approaching $1.5 Billion in Assets, a 7% increase over the same period in 2011."

Net securities gains were $140,000 during the quarter March 31, 2012 compared to $197,000 during the previous quarter and $35,000 during the quarter ended March 31, 2011.

Non-Interest Expense

Non-interest expense in the first quarter of 2012 decreased by 1.0% compared to the previous quarter and increased by 19.2% compared to the quarter ended March 31, 2011.  

Salaries and employee benefit expenses decreased by $1.1 million or 13.1% when comparing the first quarter of 2012 to the previous quarter, primarily due to plan termination expenses incurred during the fourth quarter of 2011 in connection with the Company's defined benefit pension plan.  Salaries and employee benefits increased by $1.0 million or 16.5% versus the first quarter of 2011 due to increased compliance and operational salaries at the Company's mortgage subsidiary.  Expenses related to Other Real Estate Owned (OREO) decreased by $639,000 or 69.1% when comparing the first quarter of 2012 to the previous quarter. Advertising expenses decreased by $212,000 or 41.4% during the quarter. 

The Company's efficiency ratio was 77.2% for the first quarter of 2012, compared to an efficiency ratio of 81.3% for the first quarter of 2011.  The efficiency ratio is not a measurement under accounting principles generally accepted in the United States.  The Company calculates its efficiency ratio 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.  Prior to March 31, 2012, the Company did not exclude amortization of intangibles and other real estate expenses from total non-interest expense.  The efficiency ratios for the periods ended December 31, 2011 and prior and included in tables in this release have been restated for consistent presentation.

Asset Quality and Provision for Loan Losses

The provision for loan losses in the quarter ended March 31, 2012 was $792,000 compared to a provision of $319,000 in the previous quarter and a provision of $454,000 in the quarter ended March 31, 2011, representing an increase of 148.3% from the previous quarter and an increase of 74.4% from the quarter ended March 31, 2011.

The Allowance for Loan and Lease Losses (ALLL) at March 31, 2012 was $14.9 million representing 2.18% of total portfolio loans outstanding at that date versus $14.6 million and 2.18% of outstanding portfolio loans at December 31, 2011.

Loans that were delinquent for more than 90 days and still accruing were $167,000 as of March 31, 2012 compared to $1.2 million as of December 31, 2011, representing a decrease of 86.5% during the quarter. 

Non-accrual loans were $22.3 million at the end of the first quarter compared to $25.4 million as of December 31, 2011, representing a decrease of 12.2% during the first quarter of 2012. Troubled debt restructurings that were performing as agreed were $4.1 million at the end of the first quarter compared to $3.9 million as of December 31, 2011. Other Real Estate Owned (OREO) was $12.1 million as of March 31, 2012 compared to $8.5 million as of December 31, 2011, representing an increase of 41.7% during the first quarter. Total non-performing assets were $38.6 million or 3.2% of total assets at March 31, 2012, compared to $39.0 million or 3.3% of total assets as of December 31, 2011. 

Total Consolidated Assets

Total assets at March 31, 2012 were $1.2 billion, an increase of 0.9% from December 31, 2011.

Total portfolio loans increased by $11.0 million or 1.6% in the first quarter of 2012. The securities portfolio (excluding restricted stock) increased by $15.3 million or 5.0% in the first quarter relative to the previous quarter. Balances of mortgages held for sale decreased by $11.5 million or 12.4% in the first quarter of 2012 compared to the previous quarter.   Cash balances and deposits at other banks decreased by 12.2% in the first quarter of 2012 compared to the previous quarter.  

Deposits and Other Borrowings

Total deposits increased by $21.9 million or 2.4% in the first quarter.  Brokered deposits, including CDARS program funds, were $100.8 million at March 31, 2012, up 4.0% from December 31, 2011. FHLB advances were $82.9 million at March 31, 2012, unchanged during the quarter.    

Equity and Capital

Total shareholders' equity at March 31, 2012 was $107.9 million, compared to shareholders' equity of $105.9 million as of December 31, 2011. Retained earnings at March 31, 2012 were $42.4 million compared to $41.2 million at December 31, 2011. The book value of the Company's common stock at March 31, 2012 was $15.40 per share.

The Company's total risk-based capital ratio increased slightly to 14.8% as of March 31, 2012 from 14.7% at December 31, 2011.  The Tier 1 risk-based capital ratio also increased slightly from 13.5% at December 31, 2011 to 13.6% at March 31, 2012 and the Tier 1 Leverage Ratio increased to 8.9% at March 31, 2012 from 8.8% at December 31, 2011.  

As depicted in the following table, the Company's risk-based capital ratios remain well above regulatory minimum capital ratios:

 

MIDDLEBURG FINANCIAL CORPORATION

Risk-Based Capital Ratios

March 31, 2012

(1)

MFC

Regulatory

Excess

Minimum

MFC

over

Requirement

Ratios

Minimum

Tier 1 Leverage Ratio

4.0%

8.9%

4.9%

Tier 1 Risk-Based Capital Ratio

4.0%

13.6%

9.6%

Total Risk-Based Capital Ratio

8.0%

14.8%

6.8%

(1) Under the regulatory framework for prompt corrective action.

 

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, 2011, 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 is also the majority owner of Southern Trust Mortgage, which is based in Virginia Beach and provides mortgages through 17 offices in 11 states.

 

MIDDLEBURG FINANCIAL CORPORATION

Consolidated Balance Sheets

(In thousands, except for share and per share data)

(Unaudited)

March 31,

December 31,

2012

2011

ASSETS

Cash and due from banks

$

6,514

$

6,163

Interest-bearing deposits with other institutions

38,523

45,107

     Total cash and cash equivalents

45,037

51,270

Securities available for sale

323,584

308,242

Loans held for sale

81,027

92,514

Restricted securities, at cost

7,665

7,117

Loans receivable, net of allowance for loan losses of $14,861 at

  March 31, 2012 and $14,623 at December 31, 2011

667,508

656,770

Premises and equipment, net

21,099

21,306

Goodwill and identified intangibles

6,146

6,189

Other real estate owned, net of valuation allowance of $1,492 at

  March 31, 2012 and $1,522 at December 31, 2011

12,095

8,535

Prepaid federal deposit insurance

3,753

3,993

Accrued interest receivable and other assets

35,297

36,924

    TOTAL ASSETS

$

1,203,211

$

1,192,860

LIABILITIES

Deposits:

      Non-interest-bearing demand deposits

$

150,385

$

143,398

      Savings and interest-bearing demand deposits

475,138

460,576

      Time deposits

326,249

325,895

   Total deposits

951,772

929,869

Securities sold under agreements to repurchase

32,154

31,686

Short-term borrowings

14,166

28,331

FHLB borrowings

82,912

82,912

Subordinated notes

5,155

5,155

Accrued interest payable and other liabilities

7,457

6,894

Commitments and contingent liabilities

-

-

    TOTAL LIABILITIES

1,093,616

1,084,847

SHAREHOLDERS' EQUITY

Common stock ($2.50 par value; 20,000,000 shares authorized,

7,005,315 and 6,996,932 issued and outstanding at

March 31, 2012, and December 31, 2011, respectively)

17,359

17,331

Capital surplus

43,551

43,498

Retained earnings

42,389

41,157

Accumulated other comprehensive inco

4,582

3,926

    Total Middleburg Financial Corporation shareholders' equity

107,881

105,912

Non-controlling interest in consolidated subsidiary

1,714

2,101

    TOTAL SHAREHOLDERS' EQUITY

109,595

108,013

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,203,211

$

1,192,860

 

 

 

MIDDLEBURG FINANCIAL CORPORATION

Consolidated Statements of Income

(In thousands, except for per share data)

Unaudited

For the Three Months

Ended March 31,

2012

2011

INTEREST AND DIVIDEND INCOME

Interest and fees on loans

$              9,931

$             9,735

Interest and dividends on securities available for sale

Taxable

1,735

1,399

Tax-exempt

607

561

Dividends

44

36

Interest on deposits in banks and federal funds sold

24

27

    Total interest and dividend income

12,341

11,758

INTEREST EXPENSE

Interest on deposits

1,893

2,308

Interest on securities sold under agreements to

  repurchase

83

56

Interest on short-term borrowings

148

63

Interest on FHLB borrowings and other debt

297

296

    Total interest expense

2,421

2,723

NET INTEREST INCOME

9,920

9,035

Provision for loan losses

792

454

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES

9,128

8,581

NONINTEREST INCOME

Service charges on deposit accounts

530

489

Trust services income

921

867

Net gains on loans held for sale (1)

3,769

1,929

Net gains on securities available for sale

140

35

Total other-than-temporary impairment (loss) on securities

(10)

(17)

Portion of (gain) loss recognized in other

  comprehensive income

10

16

    Net impairment loss on securities

-

(1)

Commissions on investment sales (1)

147

95

Fees on mortgages held for sale

42

154

Other service charges, commissions and fees

150

115

Bank-owned life insurance

122

123

Other operating income

14

94

    Total noninterest income

5,835

3,900

NONINTEREST EXPENSE

Salaries and employees' benefits (2)

7,357

6,313

Net occupancy and equipment expense

1,778

1,676

Advertising

300

156

Computer operations

385

365

Other real estate owned

286

344

Other taxes

203

197

Federal deposit insurance expense

258

407

Other operating expenses

2,747

1,709

    Total noninterest expense

13,314

11,167

Income before income taxes

1,649

1,314

Income tax expense

416

317

NET INCOME

1,233

997

Net loss attributable to non-controlling interest

349

230

Net income attributable to Middleburg

  Financial Corporation

$              1,582

$             1,227

Earnings per share:

Basic

$                0.23

$               0.18

Diluted

$                0.23

$               0.18

Dividends per common share

$                0.05

$               0.05

 

 

 

QUARTERLY SUMMARY STATEMENTS OF INCOME

MIDDLEBURG FINANCIAL CORPORATION

(Unaudited. Dollars in thousands except per share data)

For the Three Months Ended

Mar. 31, 2012

Dec. 31, 2011

Sep. 30, 2011

Jun. 30, 2011

Mar. 31, 2011

Interest and Dividend Income

  Interest and fees on loans

$                 9,931

$               10,014

$             9,912

$                 9,731

$               9,735

  Interest and dividends on securities   available for sale

     Taxable

1,735

1,750

1,727

1,751

1,399

     Tax Exempt

607

606

592

604

561

     Dividends

44

36

36

36

36

 Interest on deposits in banks and federal funds sold

24

20

30

33

27

      Total interest and dividend income

$               12,341

$              12,426

$           12,297

$               12,155

$               11,758

Interest Expense

  Interest on deposits

$                 1,893

$                 1,940

$            2,287

$                2,332

$                 2,308

  Interest on securities sold under agreements to repurchase

83

84

84

69

56

  Interest on short-term borrowings

148

144

58

53

63

  Interest on FHLB borrowings and other debt

297

299

312

306

296

      Total interest expense

$                 2,421

$                2,467

$             2,741

$                2,760

$               2,723

      Net interest income

$                9,920

$                9,959

$            9,556

$                9,395

$               9,035

Provision for loan losses

792

319

1,024

1,087

454

      Net interest income after provision

       for loan losses

$                 9,128

$                9,640

$            8,532

$                8,308

$                8,581

Non-Interest Income

 Trust services income

$                    921

$                     911

$                932

$                   926

$                   867

 Service charges on deposit accounts

530

542

538

526

489

 Net gains on securities available for sale

140

197

141

87

35

 Total other-than-temporary impairment gain (loss) on securities

(10)

6

(16)

-

(17)

   Portion of (gain) loss recognized in other comprehensive income

10

(9)

(5)

-

16

 Net other-than-temporary impairment loss

-

(3)

(21)

-

(1)

 Commissions on investment sales (1)

147

101

100

98

95

 Bank owned life insurance

122

101

123

139

123

 Gains on loans held for sale

3,769

4,294

3,780

2,664

1,929

 Fees on mortgages held for sale (1)

42

8

84

87

154

 Other operating income

164

220

104

79

209

       Total non-interest income

$                5,835

$                 6,371

$             5,781

$                4,606

$               3,900

Non-Interest Expense

  Salaries and employee benefits (2)

$                7,357

$                8,470

$            6,900

$                6,452

$                6,313

  Net occupancy and equipment expense

1,778

1,732

1,700

1,640

1,676

  Other taxes

203

205

205

205

197

  Advertising

300

512

446

285

156

  Computer operations

385

428

365

343

365

  Other real estate owned losses and expenses

286

925

689

606

344

  Audits and examinations

148

279

103

156

126

  Legal fees

135

168

172

176

89

  Federal deposit insurance expense

258

251

244

358

407

  Other operating expenses

2,464

1,797

1,414

1,314

1,494

       Total non-interest expense

$               13,314

$              14,767

$           12,238

$               11,535

$                11,167

       Income before income taxes

$                 1,649

$                 1,244

$            2,075

$                 1,379

$                 1,314

       Income tax expense

416

278

454

301

317

       Net income

$                 1,233

$                   966

$              1,621

$                 1,078

$                   997

Less:  Net (income) loss attributable to non-controlling interest

349

170

(223)

121

230

       Net income attributable to Middleburg Financial Corporation

$                 1,582

$                  1,136

$             1,398

$                  1,199

$                1,227

Net income per common share, basic

$                  0.23

$                   0.16

$               0.20

$                   0.17

$                   0.18

Net income per common share, diluted

$                  0.23

$                   0.16

$               0.20

$                   0.17

$                   0.18

Dividends per common share

$                  0.05

$                  0.05

$               0.05

$                  0.05

$                  0.05

 

(1)  As of March 31, 2012, amounts presented are presented net of commissions paid to generate these revenue sources.  Prior periods have been restated to conform to this presentation.

(2)  As of March 31, 2012, salaries and employee benefit expenses exclude commissions paid on mortgage loan originations and investment sales.  These commissions are netted against their respective revenue amounts in the statement of income.  Prior periods have been restated to reflect this presentation.

 

 

MIDDLEBURG FINANCIAL CORPORATION

KEY STATISTICS

(Unaudited. Dollars in thousands except per share data)

For the Three Months Ended

 Mar 31, 2012

Dec 31, 2011

Sep 30, 2011

Jun 30, 2011

 Mar 31, 2011

Net income

$        1,582

$        1,136

$        1,398

$        1,199

$         1,227

Earnings per share, basic

$          0.23

$          0.16

$          0.20

$          0.17

$           0.18

Earnings per share, diluted

$          0.23

$          0.16

$          0.20

$          0.17

$           0.18

Dividend per share

$          0.05

$          0.05

$          0.05

$          0.05

$           0.05

Return on average total assets - Year to Date

0.54%

0.44%

0.46%

0.45%

0.46%

Return on average total equity - Year to Date

5.95%

4.87%

5.07%

4.95%

5.11%

Dividend payout ratio

22.11%

30.80%

25.00%

29.41%

27.78%

Non-interest  revenue to total revenue (1)

36.48%

38.27%

37.12%

32.48%

29.97%

Net interest margin (2)

3.69%

3.67%

3.64%

3.78%

3.80%

Yield on average earning assets

4.56%

4.55%

4.66%

4.86%

4.91%

Yield on average interest-bearing liabilities

1.06%

1.07%

1.21%

1.26%

1.30%

Net interest spread

3.50%

3.48%

3.45%

3.60%

3.61%

Non-interest income to average assets (3)

1.93%

2.10%

1.97%

1.63%

1.44%

Non-interest expense to average assets (3)

4.50%

5.03%

4.28%

4.16%

4.15%

Efficiency ratio - QTD (Tax Equiv)  (4)

77.24%

83.64%

73.92%

76.51%

81.34%

 

(1)  Excludes securities gains and losses including OTTI adjustments.

(2)  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 a fair amount of non taxable interest income due to the mix of securities in its investment security portfolio, net interest income for the ratio is calculated on a tax equivalent basis as described above.  This calculation excludes net securities gains and losses.

(3)  Ratios are computed by dividing annualized income and expense amounts by quarterly average assets.

(4) 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.  Prior to March 31, 2012, the Company did not exclude amortization of intangibles and other real estate expenses from total non-interest expense.  The efficiency ratios for the periods ended December 31, 2011 and prior have been restated for consistency of presentation purposes.

 

 

 

MIDDLEBURG FINANCIAL CORPORATION 

SELECTED FINANCIAL DATA BY QUARTER

(Unaudited. Dollars in thousands except per share data)

 Mar 31, 2012

Dec 31, 2011

Sep 30, 2011

Jun 30, 2011

 Mar 31, 2011

BALANCE SHEET RATIOS

Loans to deposits (Including HFS)

80.21%

82.15%

81.65%

80.02%

80.53%

Portfolio loans to deposits

71.69%

72.20%

74.29%

74.66%

76.56%

Average interest-earning assets to

    average-interest bearing liabilities

120.99%

121.22%

119.85%

117.42%

117.58%

PER SHARE DATA

Dividends

$               0.05

$               0.05

$               0.05

$               0.05

$                     0.05

Book value (MFC Shareholders)

$             15.40

$             15.13

$             15.04

$             14.68

$                   14.18

Tangible book value (3)

$             14.52

$             14.24

$             14.15

$             13.78

$                   13.27

SHARE PRICE DATA

Closing price

$             15.71

$             14.25

$             15.00

$             14.94

$                   17.75

Diluted earnings multiple  (1)

17.08

22.27

18.75

21.97

24.65

Book value multiple(2)

1.02

0.94

1.00

1.02

1.25

COMMON STOCK DATA

Outstanding shares at end of period

7,005,315

6,996,932

6,996,932

6,996,932

6,942,315

Weighted average shares O/S Basic  - QTD

6,994,858

6,996,932

6,996,932

6,977,503

6,940,154

Weighted average shares O/S, diluted - QTD

7,000,169

6,998,019

6,998,494

6,980,331

6,943,189

CAPITAL RATIOS 

Capital to Assets - Common shareholders

8.97%

8.88%

9.13%

8.97%

9.08%

Capital to Assets - with Noncontrolling Interest

9.11%

9.05%

9.32%

9.16%

9.33%

Tangible common equity ratio (4)

8.50%

8.40%

8.63%

8.47%

8.54%

Total risk based capital ratio

14.83%

14.72%

14.13%

14.16%

14.52%

Tier 1 risk based capital ratio

13.57%

13.46%

12.87%

12.90%

13.26%

Leverage ratio

8.89%

8.81%

8.97%

9.12%

9.38%

CREDIT QUALITY

Net charge-offs to average loans

0.07%

0.11%

0.13%

0.08%

0.12%

Total non-performing loans to total portfolio loans

3.88%

4.53%

4.80%

5.25%

5.36%

Total non-performing assets to total assets

3.21%

3.27%

3.34%

3.66%

3.99%

Non-accrual loans to:

      total portfolio loans

3.26%

3.78%

4.51%

4.76%

4.17%

      total assets

1.85%

2.12%

2.64%

2.82%

2.55%

Allowance for loan losses to:

      total portfolio loans

2.18%

2.18%

2.24%

2.22%

2.20%

      non-performing assets

38.53%

37.53%

39.24%

35.98%

33.65%

      non-accrual loans

66.80%

57.69%

49.61%

46.67%

52.74%

NON-PERFORMING ASSETS:

    Loans delinquent over 90 days and still accruing

$                167

$             1,233

$             1,561

$             3,230

$                   6,593

    Non-accrual loans   

22,247

25,346

30,485

32,298

27,638

    Restructured loans (Not in non accrual)

4,056

3,853

404

112

1,254

    Other real estate owned and repossessed assets

12,095

8,535

6,096

6,255

7,825

Total non-performing assets

$           38,565

$           38,967

$           38,546

$           41,895

$                 43,310

NET LOAN CHARGE-OFFS:

    Loans charged off

$                700

$                893

$             1,017

$                621

$                      933

    Recoveries

(146)

(73)

(44)

(32)

(87)

Net charge-offs

$                554

$                820

$                973

$                589

$                      846

PROVISION FOR LOAN LOSSES

$                792

$                319

$             1,024

$             1,087

$                      454

ALLOWANCE FOR LOAN LOSS SUMMARY

Balance at the beginning of period

$           14,623

$           15,124

$           15,073

$           14,575

$                 14,967

Provision

792

319

1,024

1,087

454

Net charge-offs

(554)

(820)

(973)

(589)

(846)

Balance at the end of period

$           14,861

$           14,623

$           15,124

$           15,073

$                 14,575

(1) 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.

(2) 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.

(3) 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.

(4) The tangible common equity ratio 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 total assets and then dividing the adjusted shareholders' equity balance by the adjusted total asset balance.

 

 

MIDDLEBURG FINANCIAL CORPORATION

Average Balances, Income and Expenses, Yields and Rates

 Three Months Ended March 31

2012

2011

 Average

 Income/

Yield/

 Average

 Income/

Yield/

 Balance

 Expense

Rate(2)

 Balance

 Expense

Rate  (2)

(Dollars in thousands)

Assets :

Securities:

   Taxable

$    263,408

$         1,779

2.72%

$    204,725

$         1,435

2.84%

   Tax-exempt (1)

61,802

920

5.99%

53,974

850

6.39%

       Total securities

$    325,210

$         2,699

3.34%

$    258,699

$         2,285

3.58%

       Total loans (3)

$    744,776

$         9,931

5.36%

$    694,628

$         9,735

5.68%

Interest bearing deposits in

      other financial institutions

46,111

24

0.21%

41,980

27

0.26%

       Total earning assets

$ 1,116,097

$       12,654

4.56%

$    995,307

$       12,047

4.91%

Less: allowances for loan losses

(14,871)

(14,747)

Total nonearning assets

81,699

95,185

Total assets

$ 1,182,925

$ 1,075,745

Liabilities:

Interest-bearing deposits:

    Checking

$    303,641

$            383

0.51%

$    287,005

$            486

0.69%

    Regular savings

105,010

115

0.44%

89,650

187

0.85%

    Money market savings

56,624

58

0.41%

60,872

101

0.67%

    Time deposits:

       $100,000 and over

142,688

572

1.61%

130,641

605

1.88%

       Under $100,000

180,176

765

1.71%

168,537

929

2.24%

       Total interest-bearing deposits

$    788,139

$         1,893

0.97%

$    736,705

$         2,308

1.27%

Short-term borrowings

12,379

148

4.81%

5,739

63

4.45%

Securities sold under agreements

    to repurchase

34,125

83

0.98%

29,308

56

0.77%

FHLB borrowings and other debt

87,792

297

1.36%

74,734

296

1.61%

    Total interest-bearing liabilities

$    922,435

$         2,421

1.06%

$    846,486

$         2,723

1.30%

Non-interest bearing liabilities

    Demand deposits

144,188

122,118

    Other liabilities

7,322

6,873

Total liabilities

$ 1,073,945

$    975,477

Non-controlling interest

2,023

2,830

Shareholders' equity

106,957

97,438

Total liabilities and shareholders'

   equity

$ 1,182,925

$ 1,075,745

Net interest income

$       10,233

$         9,324

Interest rate spread

3.50%

3.61%

Cost of Funds

0.91%

1.14%

Interest expense as a percent of

    average earning assets

0.87%

1.11%

Net interest margin

3.69%

3.80%

(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 366 day year.

(3) Total average loans include loans on non-accrual status.

 

 

 

 

 

SOURCE Middleburg Financial Corporation



RELATED LINKS

http://www.middleburgbank.com