Middleburg Financial Corporation Announces First Quarter 2012 Results
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 |
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|
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 |
|||||||||
|
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
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