Middleburg Financial Corporation Announces Fourth Quarter 2011 Results
MIDDLEBURG, Va., Jan. 31, 2012 /PRNewswire/ -- Middleburg Financial Corporation (the "Company") (Nasdaq: MBRG), today announced net income of $1.1 million for the quarter ending December 31, 2011 and $5.0 million in net income for the year 2011.
"We are certainly gratified by the forward progress of Middleburg Financial Corporation in 2011 on a number of fronts. Our net income of $5.0 million for the year demonstrates the continued positive benefit derived from the actions taken in 2010. But just as important, our ability to grow our capital, open a full service financial services office in Richmond and continue to invest in our future by hiring top quality talent, positions this company very well as we look toward the future," commented Gary R. Shook, president and chief executive officer of Middleburg Financial Corporation. He continued, "while we would have liked to see a net profit from each of our subsidiaries, we did see both the Bank and Middleburg Investment Group, post positive net income. While Southern Trust Mortgage did not post positive net income, substantial investments made during 2011, especially in the contiguous markets of Northern Virginia, position both the Bank and STM to benefit from the synergies that exist between the two entities as we move out of the current economic environment."
Fourth Quarter 2011 Highlights:
- Net income of $1.1 million or $0.16 per diluted share;
- Net interest margin of 3.67%, compared to 3.60% for the fourth quarter of 2010;
- Total revenue of $17.8 million, up 5.3% compared to the fourth quarter of 2010;
- Loan growth of 1.8% for the year;
- Total assets of $1.2 billion, an increase of 8.0% over December 31, 2010;
- Deposits increased by $39.6 million or 4.4% during the year;
- Provision for loan losses declined by 51.3% compared to fourth quarter of 2010; and
- Capital ratios continue to be strong: Tangible Common Equity Ratio of 8.4%, Total Risk-Based Capital Ratio of 14.7%, Tier 1 Risk-Based Capital Ratio of 13.5%, and a Tier 1 Leverage Ratio of 8.8% at December 31, 2011.
Total Revenue
Total revenue was $17.8 million in the quarter ended December 31, 2011 compared to $17.2 million in the previous quarter and $16.9 million in the quarter ended December 31, 2010, representing an increase of 3.5% and 5.3%, respectively.
Net interest income was $10.0 million during the three months ended December 31, 2011, which was 3.1% higher than the previous quarter and an increase of 10.5% compared to the quarter ended December 31, 2010. The yield on average earning assets was 4.55% for the quarter ended December 31, 2011 compared to 4.66% for the previous quarter and 4.78% for the quarter ended December 31, 2010, representing a decrease of 11 basis points from the previous quarter and a decrease of 23 basis points from the quarter ended December 31, 2010. The decrease in the yield on earning assets from the previous quarter reflected a 20 basis point decrease in the yield on the loan portfolio and a decrease of 9 basis points in the yield on the securities portfolio. Average earning assets increased 3.4% compared to the previous quarter. Loan growth and an increase in investment securities drove the increase in earning assets during the fourth quarter of 2011.
The average cost of interest bearing liabilities was 1.07% for the quarter ended December 31, 2011, compared to 1.21% in the previous quarter, and 1.41% for the quarter ended December 31, 2010, representing a decrease of 14 basis points from the previous quarter and a decrease of 34 basis points from the quarter ended December 31, 2010. Costs for wholesale borrowings decreased by 10 basis points during the quarter, while costs for retail deposits decreased by 19 basis points during the same period. The decline in the cost of retail deposits during the quarter ended December 31, 2011, compared to the previous quarter, was driven by reductions in interest expenses across the board: cost of time deposits declined 22 basis points, savings account interest expense declined 25 basis points, money market interest expense declined 26 basis points and interest checking costs decreased 18 basis points. 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 0.92% for the quarter ended December 31, 2011 compared to 1.06% for the quarter ended September 30, 2011, a decrease of 14 basis points from the previous quarter.
The net interest margin for the three months ended December 31, 2011 was 3.67%, compared to 3.64% for the previous quarter, and 3.60% for the quarter ended December 31, 2010, representing an increase of 3 basis points from the previous quarter and an increase of 7 basis points compared to the quarter ended December 31, 2010.
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 increased by $296,000 or 3.9% when comparing the quarter ended December 31, 2011 to the previous quarter and decreased by $92,000 or 1.2% compared to the quarter ended December 30, 2010. The primary reasons for the higher non-interest income in the fourth quarter of 2011 relative to the prior quarter were higher gain-on-sale revenues from the Company's mortgage operations, higher commissions on investment sales, and increased gains from sales of securities during the quarter.
Southern Trust Mortgage originated $212.2 million in mortgage loans during the quarter ended December 31, 2011 compared to $180.4 million originated during the previous quarter, an increase of 17.6%, and $227.1 million originated during the quarter ended December 31, 2010, a decrease of 6.6% when comparing calendar quarters. Gains on mortgage loan sales increased by 3.7% when comparing the quarter ended December 31, 2011 to the previous quarter. Gains on mortgage loan sales increased by 3.0% when comparing the quarter ended December 31, 2011 to the quarter ended December 31, 2010.
The revenues and expenses of Southern Trust Mortgage for the three month and twelve month periods ended December 31, 2010 and December 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 operations as "Net (income) / loss attributable to non-controlling interest."
Trust and investment advisory service fees earned by Middleburg Trust Company ("MTC") decreased by 2.3% when comparing the quarter ended December 31, 2011 to the previous quarter, and increased by 8.7% compared to the quarter ended December 31, 2010. 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 $1.2 billion at December 31, 2011, an increase of 1.9% relative to September 30, 2011 and unchanged relative to December 31, 2010.
Net securities gains were $197,000 during the quarter ended December 31, 2011 compared to net securities gains of $141,000 during the previous quarter and net securities gains of $109,000 during the quarter ended December 31, 2010.
Non-Interest Expense
Non-interest expense in the fourth quarter of 2011 increased by 15.9% compared to the previous quarter and by 15.1% compared to the quarter ended December 31, 2010.
Salaries and employee benefit expenses increased by $1.3 million or 14.7% when comparing the fourth quarter of 2011 to the previous quarter, primarily due to an increase in commission and recruiting expenses for mortgage loan officers. Expenses related to Other Real Estate Owned (OREO) increased by $236,000 or 34.3% when comparing the fourth quarter of 2011 to the previous quarter. Advertising expenses increased by $66,000 or 14.8% during the quarter as a result of expenses for bank-wide campaigns related to business loans and advertising at the mortgage company. Other operating expenses, which include expenses such as supplies, travel and entertainment expenses, increased by $383,000 or 27.1% when comparing the quarter ended December 31, 2011 to the previous quarter.
The Company's efficiency ratio which is represented by the ratio of non-interest expense to the sum of tax equivalent net interest income and non-interest income, excluding securities gains and losses, was 90.4% for the fourth quarter of 2011, compared to an efficiency ratio of 80.9% in the quarter ending September 30, 2011 and 81.4% for the fourth quarter of 2010.
Asset Quality and Provision for Loan Losses
The provision for loan losses in the quarter ended December 31, 2011 was $319,000 compared to a provision of $1.0 million in the previous quarter and a provision of $655,000 in the quarter ended December 31, 2010, representing a decrease of 68.8% from the previous quarter and a decrease of 51.3% from the quarter ended December 31, 2010.
The Allowance for Loan and Lease Losses (ALLL) at December 31, 2011 was $14.6 million representing 2.18% of total portfolio loans outstanding versus 2.24% at September 30, 2011 and 2.27% of total portfolio loans at December 31, 2010.
Loans that were delinquent for more than 90 days and still accruing were $2.4 million as of December 31, 2011 compared to $1.6 million as of September 30, 2011, representing an increase of 50.0% during the quarter.
Non-accrual loans were $25.4 million at the end of the fourth quarter compared to $30.5 million as of September 30, 2011, representing a decrease of 16.7% during the fourth quarter of 2011. Troubled debt restructurings that were performing as agreed were $3.8 million at the end of the fourth quarter compared to $404,000 as of September 30, 2011. Other Real Estate Owned (OREO) was $8.5 million as of December 31, 2011 compared to $6.1 million as of September 30, 2011, representing an increase of 39.3% during the fourth quarter. Non-performing assets were $40.1 million or 3.3% of total assets at December 31, 2011, compared to $38.5 million or 3.3% of total assets as of September 30, 2011.
Total Consolidated Assets
Total assets at December 31, 2011 were $1.2 billion, an increase of $39.4 million or 3.4% compared to total assets at September 30, 2011.
Total portfolio loans declined by $4.4 million or 0.65% for the fourth quarter. The securities portfolio increased by $5.2 million or 1.7% in the fourth quarter relative to the previous quarter. Balances of mortgages held for sale increased by $25.6 million or 38.2% in the fourth quarter of 2011. Cash balances and deposits at other banks increased by 24.0% in the fourth quarter of 2011.
Deposits and Other Borrowings
Total deposits increased by $20.1 million or 2.2% in the fourth quarter. Brokered deposits, including CDARS program funds, were $96.9 million at December 31, 2011, up 5.4% from September 30, 2011. FHLB advances were $82.9 million at December 31, 2011, up $5.0 million from September 30, 2011, or an increase of 6.4%.
Equity and Capital
Total shareholders' equity at December 31, 2011 was $105.9 million, compared to shareholders' equity of $105.3 million as of September 30, 2011. Retained earnings at December 31, 2011 were $41.1 million compared to $40.4 million at September 30, 2011. The book value of the Company's common stock at December 31, 2011 was $15.13 per share.
The Company's total risk-based capital ratio increased to 14.7% at December 31, 2011 from 14.1% at December 31, 2010. The Tier 1 risk-based capital ratio increased from 12.8% to 13.5% from December 31, 2010 to December 31, 2011 and the Tier 1 Leverage Ratio decreased from 9.0% to 8.8% from December 31, 2010 to 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 | ||||||||
December 31, 2011 | ||||||||
(1) | MFC | |||||||
Regulatory | Excess | |||||||
Minimum | MFC | over | ||||||
Requirement | Ratios | Minimum | ||||||
Tier 1 Leverage Ratio | 4.0% | 8.8% | 4.8% | |||||
Tier 1 Risk-Based Capital Ratio | 4.0% | 13.5% | 9.5% | |||||
Total Risk-Based Capital Ratio | 8.0% | 14.7% | 6.7% | |||||
(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, 2010, 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) | (Unaudited) | ||||||||||||
December 31, | September 30, | December 31, | |||||||||||
2011 | 2011 | 2010 | |||||||||||
ASSETS | |||||||||||||
Cash and due from banks | $ | 6,163 | $ | 5,334 | $ | 21,955 | |||||||
Interest-bearing deposits with other institutions | 45,107 | 36,024 | 42,769 | ||||||||||
Total cash and cash equivalents | 51,270 | 41,358 | 64,724 | ||||||||||
Securities available for sale | 308,242 | 303,014 | 252,042 | ||||||||||
Loans held for sale | 92,514 | 66,910 | 59,361 | ||||||||||
Restricted securities, at cost | 7,117 | 7,227 | 6,296 | ||||||||||
Loans receivable, net of allowance for loan losses of $14,623 at Dec. 31, | |||||||||||||
2011, $15,124 at Sept. 30, 2011, and $14,967 at December 31, 2010 | 656,770 | 660,689 | 644,345 | ||||||||||
Premises and equipment, net | 21,306 | 21,464 | 21,112 | ||||||||||
Goodwill and identified intangibles | 6,201 | 6,244 | 6,360 | ||||||||||
Other real estate owned, net of valuation allowance of $1,522 at Dec. 31, | |||||||||||||
2011, $1,057 at Sept. 30, 2011, and $1,486 at December 31, 2010 | 8,535 | 6,096 | 8,394 | ||||||||||
Prepaid federal deposit insurance | 3,993 | 4,227 | 5,154 | ||||||||||
Accrued interest receivable and other assets | 36,912 | 36,427 | 36,779 | ||||||||||
TOTAL ASSETS | $ | 1,192,860 | $ | 1,153,656 | $ | 1,104,567 | |||||||
LIABILITIES | |||||||||||||
Deposits: | |||||||||||||
Non-interest-bearing demand deposits | $ | 143,398 | $ | 145,393 | $ | 130,488 | |||||||
Savings and interest-bearing demand deposits | 460,576 | 455,893 | 436,718 | ||||||||||
Time deposits | 325,895 | 308,410 | 323,100 | ||||||||||
Total deposits | 929,869 | 909,696 | 890,306 | ||||||||||
Securities sold under agreements to repurchase | 31,686 | 31,286 | 25,562 | ||||||||||
Short-term borrowings | 28,331 | 12,864 | 13,320 | ||||||||||
FHLB borrowings | 82,912 | 77,912 | 62,912 | ||||||||||
Subordinated notes | 5,155 | 5,155 | 5,155 | ||||||||||
Accrued interest payable and other liabilities | 6,894 | 9,170 | 7,319 | ||||||||||
Commitments and contingent liabilities | - | - | - | ||||||||||
TOTAL LIABILITIES | 1,084,847 | 1,046,083 | 1,004,574 | ||||||||||
SHAREHOLDERS' EQUITY | |||||||||||||
Common stock ($2.50 par value; 20,000,000 shares authorized, | |||||||||||||
7,000,824 issued; 6,996,932, 6,996,932, and 6,925,437 outstanding at | |||||||||||||
Dec. 31, 2011, Sept. 30, 2011, and December 31, 2010, respectively) | 17,331 | 17,331 | 17,314 | ||||||||||
Capital surplus | 43,498 | 43,274 | 43,058 | ||||||||||
Retained earnings | 41,157 | 40,373 | 37,593 | ||||||||||
Accumulated other comprehensive income (loss) | 3,926 | 4,327 | (1,012) | ||||||||||
Total Middleburg Financial Corporation shareholders' equity | 105,912 | 105,305 | 96,953 | ||||||||||
Non-controlling interest in consolidated subsidiary | 2,101 | 2,268 | 3,040 | ||||||||||
TOTAL SHAREHOLDERS' EQUITY | 108,013 | 107,573 | 99,993 | ||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,192,860 | $ | 1,153,656 | $ | 1,104,567 | |||||||
MIDDLEBURG FINANCIAL CORPORATION | |||||||||||||
Consolidated Statements of Operations | |||||||||||||
(In thousands, except for per share data) | |||||||||||||
Unaudited | Unaudited | ||||||||||||
For the Year | For the Three Months | ||||||||||||
Ended December 31, | Ended December 31, | ||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||
INTEREST AND DIVIDEND INCOME | |||||||||||||
Interest and fees on loans | $ 39,392 | $ 40,548 | $ 10,014 | $ 9,887 | |||||||||
Interest and dividends on securities available for sale | |||||||||||||
Taxable | 6,627 | 4,733 | 1,750 | 1,539 | |||||||||
Tax-exempt | 2,363 | 2,514 | 606 | 600 | |||||||||
Dividends | 144 | 105 | 36 | 30 | |||||||||
Interest on deposits in banks and federal funds sold | 110 | 131 | 20 | 32 | |||||||||
Total interest and dividend income | 48,636 | 48,031 | 12,426 | 12,088 | |||||||||
INTEREST EXPENSE | |||||||||||||
Interest on deposits | 8,867 | 12,033 | 1,940 | 2,623 | |||||||||
Interest on securities sold under agreements to | |||||||||||||
repurchase | 293 | 205 | 84 | 61 | |||||||||
Interest on short-term borrowings | 318 | 393 | 144 | 148 | |||||||||
Interest on FHLB borrowings and other debt | 1,213 | 1,544 | 299 | 246 | |||||||||
Total interest expense | 10,691 | 14,175 | 2,467 | 3,078 | |||||||||
NET INTEREST INCOME | 37,945 | 33,856 | 9,959 | 9,010 | |||||||||
Provision for loan losses | 2,884 | 12,005 | 319 | 655 | |||||||||
NET INTEREST INCOME AFTER PROVISION | |||||||||||||
FOR LOAN LOSSES | 35,061 | 21,851 | 9,640 | 8,355 | |||||||||
NONINTEREST INCOME | |||||||||||||
Service charges on deposit accounts | 2,095 | 1,884 | 542 | 488 | |||||||||
Trust services income | 3,636 | 3,335 | 911 | 838 | |||||||||
Gains on loans held for sale | 17,992 | 17,158 | 5,706 | 5,537 | |||||||||
Gains on securities available for sale, net | 460 | 866 | 197 | 109 | |||||||||
Total other-than-temporary impairment gains (losses) | (27) | (901) | 6 | (44) | |||||||||
Portion of (gain) loss recognized in other | |||||||||||||
comprehensive income | 2 | (202) | (9) | (85) | |||||||||
Net other than temporary impairment losses | (25) | (1,103) | (3) | (129) | |||||||||
Commissions on investment sales | 755 | 622 | 203 | 169 | |||||||||
Fees on mortgages held for sale | 333 | 1,881 | 8 | 570 | |||||||||
Other service charges, commissions and fees | 452 | 467 | 105 | 114 | |||||||||
Bank-owned life insurance | 486 | 503 | 101 | 112 | |||||||||
Other operating income | 226 | 390 | 115 | 169 | |||||||||
Total noninterest income | 26,410 | 26,003 | 7,885 | 7,977 | |||||||||
NONINTEREST EXPENSE | |||||||||||||
Salaries and employees' benefits | 33,821 | 29,594 | 9,984 | 7,748 | |||||||||
Net occupancy and equipment expense | 6,748 | 6,249 | 1,732 | 1,598 | |||||||||
Advertising | 1,399 | 1,071 | 512 | 386 | |||||||||
Computer operations | 1,501 | 1,324 | 428 | 316 | |||||||||
Other real estate owned | 2,564 | 2,468 | 925 | 842 | |||||||||
Other taxes | 812 | 798 | 205 | 200 | |||||||||
Federal deposit insurance expense | 1,260 | 1,907 | 251 | 386 | |||||||||
Other operating expenses | 7,354 | 9,331 | 2,244 | 2,670 | |||||||||
Total noninterest expense | 55,459 | 52,742 | 16,281 | 14,146 | |||||||||
Income (loss) before income taxes | 6,012 | (4,888) | 1,244 | 2,186 | |||||||||
Income tax expense (benefit) | 1,350 | (2,562) | 278 | 573 | |||||||||
NET INCOME (LOSS) | 4,662 | (2,326) | 966 | 1,613 | |||||||||
Net (income) loss attributable to non- | |||||||||||||
controlling interest | 298 | (362) | 170 | (51) | |||||||||
Net income (loss) attributable to Middleburg | |||||||||||||
Financial Corporation | $ 4,960 | $ (2,688) | $ 1,136 | $ 1,562 | |||||||||
Earnings (loss) per share: | |||||||||||||
Basic | $ 0.71 | $ (0.39) | $ 0.16 | $ 0.23 | |||||||||
Diluted | $ 0.71 | $ (0.39) | $ 0.16 | $ 0.23 | |||||||||
Dividends per common share | $ 0.20 | $ 0.35 | $ 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 | ||||||||||
Dec. 31, 2011 | Sep. 30, 2011 | Jun. 30, 2011 | Mar. 31, 2011 | Dec. 31, 2010 | ||||||
Interest and Dividend Income | ||||||||||
Interest and fees on loans | $ 10,014 | $ 9,912 | $ 9,731 | $ 9,735 | $ 9,887 | |||||
Interest and dividends on securities available for sale | ||||||||||
Taxable | 1,750 | 1,727 | 1,751 | 1,399 | 1,539 | |||||
Tax Exempt | 606 | 592 | 604 | 561 | 600 | |||||
Dividends | 36 | 36 | 36 | 36 | 30 | |||||
Interest on deposits in banks and federal funds sold | 20 | 30 | 33 | 27 | 32 | |||||
Total interest and dividend income | $ 12,426 | $ 12,297 | $ 12,155 | $ 11,758 | $ 12,088 | |||||
Interest Expense | ||||||||||
Interest on deposits | $ 1,940 | $ 2,287 | $ 2,332 | $ 2,308 | $ 2,623 | |||||
Interest on securities sold under agreements to repurchase | 84 | 84 | 69 | 56 | 61 | |||||
Interest on short-term borrowings | 144 | 58 | 53 | 63 | 148 | |||||
Interest on FHLB borrowings and other debt | 299 | 312 | 306 | 296 | 246 | |||||
Total interest expense | $ 2,467 | $ 2,741 | $ 2,760 | $ 2,723 | $ 3,078 | |||||
Net interest income | $ 9,959 | $ 9,556 | $ 9,395 | $ 9,035 | $ 9,010 | |||||
Provision for loan losses | 319 | 1,024 | 1,087 | 454 | 655 | |||||
Net interest income after provision | ||||||||||
for loan losses | $ 9,640 | $ 8,532 | $ 8,308 | $ 8,581 | $ 8,355 | |||||
Non-Interest Income | ||||||||||
Trust services income | $ 911 | $ 932 | $ 926 | $ 867 | $ 838 | |||||
Service charges on deposit accounts | 542 | 538 | 526 | 489 | 488 | |||||
Net gains on securities available for sale | 197 | 141 | 87 | 35 | 109 | |||||
Total other-than-temporary impairment gain (loss) on securities | 6 | (16) | - | (17) | (44) | |||||
Portion of (gain) loss recognized in other comprehensive income | (9) | (5) | - | 16 | (85) | |||||
Net other-than-temporary impairment loss | (3) | (21) | - | (1) | (129) | |||||
Commissions on investment sales | 203 | 187 | 185 | 180 | 169 | |||||
Bank owned life insurance | 101 | 123 | 139 | 123 | 112 | |||||
Gains on loans held for sale | 5,706 | 5,501 | 3,938 | 2,847 | 5,537 | |||||
Fees on mortgages held for sale | 8 | 84 | 87 | 154 | 570 | |||||
Other operating income | 220 | 104 | 79 | 209 | 283 | |||||
Total non-interest income | $ 7,885 | $ 7,589 | $ 5,967 | $ 4,903 | $ 7,977 | |||||
Non-Interest Expense | ||||||||||
Salaries and employee benefits | $ 9,984 | $ 8,708 | $ 7,813 | $ 7,316 | $ 7,748 | |||||
Net occupancy and equipment expense | 1,732 | 1,700 | 1,640 | 1,676 | 1,598 | |||||
Other taxes | 205 | 205 | 205 | 197 | 200 | |||||
Advertising | 512 | 446 | 285 | 156 | 386 | |||||
Computer operations | 428 | 365 | 343 | 365 | 316 | |||||
Other real estate owned | 925 | 689 | 606 | 344 | 842 | |||||
Audits and examinations | 279 | 103 | 156 | 126 | 219 | |||||
Legal fees | 168 | 172 | 176 | 89 | 50 | |||||
Federal deposit insurance expense | 251 | 244 | 358 | 407 | 386 | |||||
Other operating expenses | 1,797 | 1,414 | 1,314 | 1,494 | 2,401 | |||||
Total non-interest expense | $ 16,281 | $ 14,046 | $ 12,896 | $ 12,170 | $ 14,146 | |||||
Income before income taxes | $ 1,244 | $ 2,075 | $ 1,379 | $ 1,314 | $ 2,186 | |||||
Income tax expense | 278 | 454 | 301 | 317 | 573 | |||||
Net income | $ 966 | $ 1,621 | $ 1,078 | $ 997 | $ 1,613 | |||||
Less: Net (income) loss attributable to non-controlling interest | 170 | (223) | 121 | 230 | (51) | |||||
Net income attributable to Middleburg Financial Corporation | $ 1,136 | $ 1,398 | $ 1,199 | $ 1,227 | $ 1,562 | |||||
Net income per common share, basic | $ 0.16 | $ 0.20 | $ 0.17 | $ 0.18 | $ 0.23 | |||||
Net income per common share, diluted | $ 0.16 | $ 0.20 | $ 0.17 | $ 0.18 | $ 0.23 | |||||
Dividends per common share | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | |||||
MIDDLEBURG FINANCIAL CORPORATION KEY STATISTICS (Unaudited. Dollars in thousands except per share data) | ||||||||||
For the Three Months Ended | ||||||||||
Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | Dec 31, 2010 | ||||||
Net income | $ 1,136 | $ 1,398 | $ 1,199 | $ 1,227 | $ 1,562 | |||||
Earnings per share, basic | $ 0.16 | $ 0.20 | $ 0.17 | $ 0.18 | $ 0.23 | |||||
Earnings per share, diluted | $ 0.16 | $ 0.20 | $ 0.17 | $ 0.18 | $ 0.23 | |||||
Dividend per share | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | |||||
Return on average total assets - Year to Date | 0.44% | 0.46% | 0.45% | 0.46% | -0.25% | |||||
Return on average total equity - Year to Date | 4.87% | 5.07% | 4.95% | 5.11% | -2.71% | |||||
Dividend payout ratio | 30.80% | 25.00% | 29.41% | 27.78% | 22.21% | |||||
Non-interest revenue to total revenue (1) | 43.57% | 43.90% | 38.72% | 35.02% | 9.82% | |||||
Net interest margin (2) | 3.67% | 3.64% | 3.78% | 3.80% | 3.60% | |||||
Yield on average earning assets | 4.55% | 4.66% | 4.86% | 4.91% | 4.78% | |||||
Yield on average interest-bearing liabilities | 1.07% | 1.21% | 1.26% | 1.30% | 1.41% | |||||
Net interest spread | 3.48% | 3.45% | 3.60% | 3.61% | 3.37% | |||||
Non-interest income to average assets (3) | 2.69% | 2.67% | 2.17% | 1.82% | 2.88% | |||||
Non-interest expense to average assets (3) | 5.54% | 4.93% | 4.67% | 4.53% | 5.09% | |||||
Efficiency ratio - QTD (Tax Equiv) (4) | 90.39% | 80.89% | 82.79% | 84.96% | 81.42% | |||||
(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 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 is 34%. The Company calculates this ratio in order to evaluate its overhead structure or how effectively it is operating. | |
MIDDLEBURG FINANCIAL CORPORATION | ||||||||||||||
SELECTED FINANCIAL DATA BY QUARTER | ||||||||||||||
(Unaudited. Dollars in thousands except per share data) | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | Dec 31, 2010 | |||||||||
BALANCE SHEET RATIOS | ||||||||||||||
Loans to deposits (Including HFS) | 82.15% | 81.65% | 80.02% | 80.53% | 80.72% | |||||||||
Portfolio loans to deposits | 72.20% | 74.29% | 74.66% | 76.56% | 74.05% | |||||||||
Average interest-earning assets to | ||||||||||||||
average-interest bearing liabilities | 121.22% | 119.85% | 117.42% | 117.58% | 118.50% | |||||||||
PER SHARE DATA | ||||||||||||||
Dividends | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | |||||||||
Book value (MFC Shareholders) | $ 15.13 | $ 15.04 | $ 14.68 | $ 14.18 | $ 14.02 | |||||||||
Tangible book value (3) | $ 14.24 | $ 14.15 | $ 13.78 | $ 13.27 | $ 13.10 | |||||||||
SHARE PRICE DATA | ||||||||||||||
Closing price | $ 14.25 | $ 15.00 | $ 14.94 | $ 17.75 | $ 14.26 | |||||||||
Diluted earnings multiple (1) | 22.27 | 18.75 | 21.97 | 24.65 | 15.50 | |||||||||
Book value multiple(2) | 0.94 | 1.00 | 1.02 | 1.25 | 1.02 | |||||||||
COMMON STOCK DATA | ||||||||||||||
Outstanding shares at end of period | 7,000,824 | 7,000,824 | 6,996,932 | 6,942,315 | 6,925,437 | |||||||||
Weighted average shares O/S Basic - QTD | 6,996,932 | 6,996,932 | 6,977,503 | 6,940,154 | 6,937,801 | |||||||||
Weighted average shares O/S, diluted - QTD | 6,998,019 | 6,998,494 | 6,980,331 | 6,943,189 | 6,938,359 | |||||||||
CAPITAL RATIOS | ||||||||||||||
Capital to Assets - Common shareholders | 8.88% | 9.13% | 8.97% | 9.08% | 8.79% | |||||||||
Capital to Assets - with Noncontrolling Interest | 9.05% | 9.32% | 9.16% | 9.33% | 9.05% | |||||||||
Tangible common equity ratio (4) | 8.40% | 8.63% | 8.47% | 8.54% | 8.26% | |||||||||
Total risk based capital ratio | 14.72% | 14.13% | 14.16% | 14.52% | 14.10% | |||||||||
Tier 1 risk based capital ratio | 13.46% | 12.87% | 12.90% | 13.26% | 12.84% | |||||||||
Leverage ratio | 8.81% | 8.97% | 9.12% | 9.38% | 9.04% | |||||||||
CREDIT QUALITY | ||||||||||||||
Net charge-offs to average loans | 0.11% | 0.13% | 0.08% | 0.12% | 0.22% | |||||||||
Total non-performing loans to total portfolio loans | 4.53% | 4.80% | 5.25% | 5.36% | 4.66% | |||||||||
Total non-performing assets to total assets | 3.27% | 3.34% | 3.66% | 3.99% | 3.54% | |||||||||
Non-accrual loans to: | ||||||||||||||
total loans | 3.78% | 4.51% | 4.76% | 4.17% | 4.46% | |||||||||
total assets | 2.12% | 2.64% | 2.82% | 2.55% | 2.66% | |||||||||
Allowance for loan losses to: | ||||||||||||||
total portfolio loans | 2.18% | 2.24% | 2.22% | 2.20% | 2.27% | |||||||||
non-performing assets | 37.53% | 39.24% | 35.98% | 33.65% | 38.29% | |||||||||
non-accrual loans | 57.69% | 49.61% | 46.67% | 52.74% | 50.93% | |||||||||
NON-PERFORMING ASSETS: | ||||||||||||||
Loans delinquent over 90 days and still accruing | $ 1,233 | $ 1,561 | $ 3,230 | $ 6,593 | $ 909 | |||||||||
Non-accrual loans | 25,346 | 30,485 | 32,298 | 27,638 | 29,385 | |||||||||
Restructured Loans | 3,853 | 404 | 112 | 1,254 | 1,254 | |||||||||
Other real estate owned and repossessed assets | 8,535 | 6,096 | 6,255 | 7,825 | 8,394 | |||||||||
Total non-performing assets | $ 38,967 | $ 38,546 | $ 41,895 | $ 43,310 | $ 39,942 | |||||||||
NET LOAN CHARGE-OFFS: | ||||||||||||||
Loans charged off | $ 893 | $ 1,017 | $ 621 | $ 933 | $ 1,600 | |||||||||
Recoveries | (73) | (44) | (32) | (87) | (42) | |||||||||
Net charge-offs | $ 820 | $ 973 | $ 589 | $ 846 | $ 1,558 | |||||||||
PROVISION FOR LOAN LOSSES | $ 319 | $ 1,024 | $ 1,087 | $ 454 | $ 655 | |||||||||
ALLOWANCE FOR LOAN LOSS SUMMARY | ||||||||||||||
Balance at the beginning of period | $ 15,124 | $ 15,073 | $ 14,575 | $ 14,967 | $ 15,870 | |||||||||
Provision | 319 | 1,024 | 1,087 | 454 | 655 | |||||||||
Net charge-offs | (820) | (973) | (589) | (846) | (1,558) | |||||||||
Balance at the end of period | $ 14,623 | $ 15,124 | $ 15,073 | $ 14,575 | $ 14,967 | |||||||||
(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 December 31, | ||||||||||||
2011 | 2010 | |||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||
Balance | Expense | Rate (2) | Balance | Expense | Rate (3) | |||||||
(Dollars in thousands) | ||||||||||||
Assets : | ||||||||||||
Securities: | ||||||||||||
Taxable | $ 253,949 | $ 1,786 | 2.79% | $ 201,278 | $ 1,569 | 3.09% | ||||||
Tax-exempt (1) | 59,921 | 918 | 6.08% | 58,396 | 910 | 6.18% | ||||||
Total securities | $ 313,870 | $ 2,704 | 3.42% | $ 259,674 | $ 2,479 | 3.79% | ||||||
Total loans (3) | 759,962 | 10,014 | 5.23% | 724,063 | 9,886 | 5.42% | ||||||
Interest bearing deposits in | ||||||||||||
other financial institutions | 36,256 | 20 | 0.22% | 44,715 | 32 | 0.28% | ||||||
Total earning assets | $ 1,110,088 | $ 12,738 | 4.55% | $ 1,028,452 | $ 12,397 | 4.78% | ||||||
Less: allowances for credit losses | (15,007) | (15,207) | ||||||||||
Total nonearning assets | 79,471 | 97,522 | ||||||||||
Total assets | $ 1,174,552 | $ 1,110,767 | ||||||||||
Liabilities: | ||||||||||||
Interest-bearing deposits: | ||||||||||||
Checking | $ 291,332 | $ 377 | 0.51% | $ 286,407 | $ 544 | 0.75% | ||||||
Regular savings | 101,178 | 116 | 0.45% | 84,372 | 181 | 0.85% | ||||||
Money market savings | 59,621 | 60 | 0.40% | 57,661 | 105 | 0.72% | ||||||
Time deposits: | ||||||||||||
$100,000 and over | 138,170 | 588 | 1.69% | 150,217 | 790 | 2.09% | ||||||
Under $100,000 | 185,710 | 799 | 1.71% | 185,238 | 1,001 | 2.14% | ||||||
Total interest-bearing deposits | $ 776,011 | $ 1,940 | 0.99% | $ 763,895 | $ 2,621 | 1.36% | ||||||
Short-term borrowings | 20,042 | 144 | 2.85% | 14,487 | 148 | 4.05% | ||||||
Securities sold under agreements | ||||||||||||
to repurchase | 34,058 | 84 | 0.98% | 28,018 | 62 | 0.88% | ||||||
FHLB borrowings and other debt | 85,621 | 299 | 1.39% | 61,437 | 246 | 1.59% | ||||||
Federal funds purchased | - | - | - | 54 | - | 0.00% | ||||||
Total interest-bearing liabilities | $ 915,732 | $ 2,467 | 1.07% | $ 867,891 | $ 3,077 | 1.41% | ||||||
Non-interest bearing liabilities | ||||||||||||
Demand deposits | 144,181 | 143,492 | ||||||||||
Other liabilities | 7,334 | 7,432 | ||||||||||
Total liabilities | $ 1,067,247 | $ 1,018,815 | ||||||||||
Non-controlling interest | 2,079 | 3,161 | ||||||||||
Shareholders' equity | 105,226 | 88,791 | ||||||||||
Total liabilities and shareholders' | ||||||||||||
equity | $ 1,174,552 | $ 1,110,767 | ||||||||||
Net interest income | $ 10,271 | $ 9,320 | ||||||||||
Interest rate spread | 3.48% | 3.37% | ||||||||||
Cost of Funds | 0.92% | 1.21% | ||||||||||
Interest expense as a percent of | ||||||||||||
average earning assets | 0.88% | 1.19% | ||||||||||
Net interest margin | 3.67% | 3.60% | ||||||||||
(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 | ||||||||||||
Average Balances, Income and Expenses, Yields and Rates | ||||||||||||
Twelve Months Ended December 31, | ||||||||||||
2011 | 2010 | |||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||
Balance | Expense | Rate (2) | Balance | Expense | Rate (3) | |||||||
(Dollars in thousands) | ||||||||||||
Assets : | ||||||||||||
Securities: | ||||||||||||
Taxable | $ 231,893 | $ 6,771 | 2.92% | $ 159,326 | $ 4,838 | 3.04% | ||||||
Tax-exempt (1) | 56,793 | 3,580 | 6.30% | 59,654 | 3,810 | 6.39% | ||||||
Total securities | $ 288,686 | $ 10,351 | 3.59% | $ 218,980 | $ 8,648 | 3.95% | ||||||
Total loans (3) | 720,633 | 39,392 | 5.47% | 707,135 | 40,547 | 5.73% | ||||||
Interest bearing deposits in | ||||||||||||
other financial institutions | 43,469 | 110 | 0.25% | 47,836 | 131 | 0.27% | ||||||
Total earning assets | $ 1,052,788 | $ 49,853 | 4.74% | $ 973,951 | $ 49,326 | 5.06% | ||||||
Less: allowances for credit losses | (14,835) | (11,119) | ||||||||||
Total nonearning assets | 87,410 | 94,005 | ||||||||||
Total assets | $ 1,125,363 | $ 1,056,837 | ||||||||||
Liabilities: | ||||||||||||
Interest-bearing deposits: | ||||||||||||
Checking | $ 294,660 | $ 1,883 | 0.64% | $ 283,294 | $ 2,294 | 0.81% | ||||||
Regular savings | 96,725 | 683 | 0.71% | 77,864 | 725 | 0.93% | ||||||
Money market savings | 59,356 | 353 | 0.59% | 53,894 | 427 | 0.79% | ||||||
Time deposits: | ||||||||||||
$100,000 and over | 136,526 | 2,419 | 1.77% | 160,063 | 4,298 | 2.69% | ||||||
Under $100,000 | 172,815 | 3,529 | 2.04% | 161,338 | 4,289 | 2.66% | ||||||
Total interest-bearing deposits | $ 760,082 | $ 8,867 | 1.17% | $ 736,453 | $ 12,033 | 1.63% | ||||||
Short-term borrowings | 9,555 | 318 | 3.33% | 10,419 | 393 | 3.77% | ||||||
Securities sold under agreements | ||||||||||||
to repurchase | 33,162 | 293 | 0.88% | 25,314 | 205 | 0.81% | ||||||
FHLB borrowings and other debt | 81,300 | 1,213 | 1.49% | 55,303 | 1,544 | 2.79% | ||||||
Federal Funds Purchased | 42 | - | 0.00% | 25 | - | 0.00% | ||||||
Total interest-bearing liabilities | $ 884,141 | $ 10,691 | 1.21% | $ 827,514 | $ 14,175 | 1.71% | ||||||
Non-interest bearing liabilities | ||||||||||||
Demand Deposits | 130,565 | 120,475 | ||||||||||
Other liabilities | 6,628 | 6,850 | ||||||||||
Total liabilities | $ 1,021,334 | $ 954,839 | ||||||||||
Non-controlling interest | 2,241 | 2,876 | ||||||||||
Shareholders' equity | 101,788 | 99,122 | ||||||||||
Total liabilities and shareholders' | ||||||||||||
equity | $ 1,125,363 | $ 1,056,837 | ||||||||||
Net interest income | $ 39,162 | $ 35,151 | ||||||||||
Interest rate spread | 3.53% | 3.51% | ||||||||||
Cost of Funds | 1.05% | 1.50% | ||||||||||
Interest expense as a percent of | ||||||||||||
average earning assets | 1.02% | 1.46% | ||||||||||
Net interest margin | 3.72% | 3.61% | ||||||||||
(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. | ||||||||||||
SOURCE Middleburg Financial Corporation
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