MIDDLEBURG, Va., April
29, 2016 /PRNewswire/ -- Middleburg Financial Corporation
(the "Company") (Nasdaq: MBRG), today announced financial results
for its first quarter 2016, including net income of $2.06 million, or $0.29 per diluted share, for the quarter ended
March 31, 2016.
First quarter 2016 highlights include:
- Net income for the first quarter of 2016 was $2.06 million or $0.29 per diluted share compared to $781,000 or $0.11
per diluted share for the previous quarter and $2.45 million or $0.34 per diluted share for the same period in
2015.
- Net interest margin was 3.24% in the first quarter of 2016,
higher by 7 basis points ("bp") compared to the previous quarter
and lower by 16 bp compared to the same period in 2015.
- Cost of funds was 39 bp compared to 37 bp in the previous
quarter and unchanged when compared to the same period in
2015.
- Total revenue increased to $12.20
million compared to the previous quarter and a decrease of
3.48% compared to the same period in 2015.
- Net interest income increased to $9.75
million, higher by 2.94% compared to the previous quarter
and 1.23% higher than the same period in 2015.
- Non-interest expense was $9.26
million, higher by 10.53% compared to the previous quarter
and higher by 4.00% compared to the same period in 2015.
- The efficiency ratio was 73.22%, compared to an efficiency
ratio of 67.21% for the previous quarter and 68.35% for the same
period in 2015.
- Loans held-for-investment were $824.55
million on March 31, 2016
compared to $805.68 million on
December 31, 2015, representing an
annualized growth rate of 9.42%.
- Total assets increased to $1.35
billion, higher by 4.11% since December 31, 2015.
- Total deposits were $1.08
billion, an increase of 4.14% since December 31, 2015.
- Nonaccrual loans declined by 19.51% in the first quarter of
2016 compared to the same period in 2015.
- The allowance for loan losses was 1.37% of total loans,
unchanged from December 31,
2015.
- Dividends per share increased 30% to $0.13 per share in the first quarter of 2016
compared to $0.10 per share for the
same period in 2015.
- Capital ratios continue to be strong: Total Risk-Based Capital
Ratio of 17.47%, Tier 1 Risk-Based Capital Ratio of 16.22%, Common
Equity Tier 1 Ratio of 15.56% and Tier 1 Leverage Ratio of 9.40% at
March 31, 2016.
"We are pleased with our performance in the first quarter as
robust loan and deposit growth and disciplined expense management
resulted in a considerable increase in net income over the prior
quarter. Additionally, wealth management revenues continue to
recover along with the market and we expect to see continued
improvement in our results as trends in our operating markets
continue to be positive," said Gary R.
Shook, President and CEO of Middleburg Financial
Corporation. "Moving forward, we feel confident in our
ability to drive shareholder value by continuing to execute on our
strategic initiatives to enhance profitability, improve efficiency
and manage risk. In addition, we are pleased to continue
returning capital to shareholders via our stock repurchase program
and strong focus on dividends."
STRATEGIC FOCUS FOR 2016
Throughout 2016, the Company
plans to focus on a number of strategic initiatives intended to
grow the business and enhance shareholder value, including:
Enhance Profitability
- Expand net interest margin
- Increase the loans to deposits ratio
- Lower cost of funds further through growth in non-interest
bearing deposits
- Replace higher cost borrowings with core deposits
- Growth in fee income from our wealth management subsidiary
Improve Efficiency
- Lower operating costs by continuing to exercise good expense
control
- More efficient use of resources
Focus on Asset Quality
- Lower nonaccrual loans relative to total loans
- Efficient management of other real estate owned properties
TOTAL REVENUE
Total revenue, which is composed of net
interest income and non-interest income (before any provision for
loan and lease losses), was $12.20
million for the first quarter of 2016, higher by 1.12%
compared to the previous quarter and a decrease of 3.48% compared
to the same period in 2015.
Net Interest Income
The Company recorded net interest
income of $9.75 million for the first
quarter of 2016, an increase of 2.94% compared to the previous
quarter and higher by 1.23% compared to the same period in 2015.
The net interest margin in the first of 2016 was 3.24%,
higher by 7 bp compared to the previous quarter and 16 bp lower
than the same period in 2015.
The following factors contributed to the changes in net interest
margin during the first quarter of 2016 compared to the previous
quarter:
- Yields on earning assets increased by 8 bp compared to the
previous quarter.
- Yields on investment securities increased by 12 bp compared to
the previous quarter, as premium amortization slowed and higher
yielding securities were added to the investment portfolio.
- Yields on loans increased by 8 bp compared to the previous
quarter. In the fourth quarter of 2015, we reversed some accrued
interest which reduced loan yields by approximately 9 bp. Excluding
that reversal, the change in loan yields would have been flat
between the fourth quarter of 2015 and the first quarter of
2016.
- Cost of funds increased slightly to 39 bp, compared to 37 bp in
the previous quarter due to higher interest expenses related to
short term FHLB borrowings that we had incurred to accommodate
seasonal activity in core deposits. We expect to retire those
borrowings as they mature and replace them with core deposits.
The following table analyzes changes in net interest income
comparing the first quarter of 2016 to the previous quarter and to
the quarter ended March 31, 2015.
|
|
Quarters Ended
(Annualized)
|
(Dollars in
thousands)
|
|
March 31, 2016 vs.
December 31, 2015 Increase (Decrease) Due to Changes in:
|
|
March 31, 2016 vs.
March 31, 2015
Increase (Decrease)
Due to Changes in:
|
|
|
Volume
|
|
Rate
|
|
Total
|
|
Volume
|
|
Rate
|
|
Total
|
Earning
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
$
|
114
|
|
|
$
|
239
|
|
|
$
|
353
|
|
|
$
|
687
|
|
|
$
|
(37)
|
|
|
$
|
650
|
|
Tax-exempt
|
|
(102)
|
|
|
125
|
|
|
23
|
|
|
(199)
|
|
|
119
|
|
|
(80)
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
728
|
|
|
301
|
|
|
1,029
|
|
|
6,834
|
|
|
(7,168)
|
|
|
(334)
|
|
Tax-exempt
|
|
8
|
|
|
—
|
|
|
8
|
|
|
6
|
|
|
2
|
|
|
8
|
|
Interest on deposits
with other banks and federal funds sold
|
|
16
|
|
|
85
|
|
|
101
|
|
|
(21)
|
|
|
89
|
|
|
68
|
|
Total earning
assets
|
|
$
|
764
|
|
|
$
|
750
|
|
|
$
|
1,514
|
|
|
$
|
7,307
|
|
|
$
|
(6,995)
|
|
|
$
|
312
|
|
Interest-Bearing
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Checking
|
|
$
|
21
|
|
|
$
|
37
|
|
|
$
|
58
|
|
|
$
|
38
|
|
|
$
|
57
|
|
|
$
|
95
|
|
Regular
savings
|
|
4
|
|
|
(3)
|
|
|
1
|
|
|
24
|
|
|
(1)
|
|
|
23
|
|
Money market
savings
|
|
(7)
|
|
|
(1)
|
|
|
(8)
|
|
|
12
|
|
|
11
|
|
|
23
|
|
Time
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
$100,000 and
over
|
|
(12)
|
|
|
12
|
|
|
—
|
|
|
99
|
|
|
—
|
|
|
99
|
|
Under
$100,000
|
|
90
|
|
|
(187)
|
|
|
(97)
|
|
|
(8)
|
|
|
(208)
|
|
|
(216)
|
|
Total
interest-bearing deposits
|
|
$
|
96
|
|
|
$
|
(142)
|
|
|
$
|
(46)
|
|
|
$
|
165
|
|
|
$
|
(141)
|
|
|
$
|
24
|
|
Securities sold under
agreements to repurchase
|
|
—
|
|
|
4
|
|
|
4
|
|
|
(29)
|
|
|
(150)
|
|
|
(179)
|
|
FHLB borrowings and
other debt
|
|
323
|
|
|
(11)
|
|
|
312
|
|
|
330
|
|
|
(2)
|
|
|
328
|
|
Total
interest-bearing liabilities
|
|
$
|
419
|
|
|
$
|
(149)
|
|
|
$
|
270
|
|
|
$
|
466
|
|
|
$
|
(293)
|
|
|
$
|
173
|
|
Change in net
interest income
|
|
$
|
345
|
|
|
$
|
899
|
|
|
$
|
1,244
|
|
|
$
|
6,841
|
|
|
$
|
(6,702)
|
|
|
$
|
139
|
|
Comparing the first quarter of 2016 to the previous quarter, the
table shows the increase in interest income for investments was
driven by growth in the securities portfolio and an increase in
yields as premium amortization slowed and higher yielding
investments were added to the balance sheet. We continue to
add securities that are less sensitive to prepayments while
retaining a balance between fixed and floating rate
investments. The increase in interest income from loans was
due to strong growth in loan balances. The changes in
interest income in the first quarter of 2016 compared to the same
quarter in 2015 reflected similar factors, namely increased
interest income from investments driven by higher securities
balances and lower premium amortization while the lower interest
income from loans was largely due to lower loan rates that more
than offset growth in loan balances. Competition for good credits
continues to pressure loan rates.
Non-Interest Income
Non-interest income declined by
5.51% compared to the previous quarter and was lower by 18.55%
compared to the quarter ended March 31,
2015.
- Total revenue generated by our wealth management group,
Middleburg Investment Group ("MIG") was $1.16 million for the quarter ended March 31, 2016, relatively unchanged
compared to the previous quarter and lower by 4.93% compared to the
same quarter in 2015. Fee income is based primarily upon the market
value of assets under administration which were $1.89 billion at March 31,
2016 and $1.99 billion at
March 31, 2015.
- Other operating income was $222,000 for the quarter ended March 31, 2016, a decrease of 57.87% compared to
the previous quarter and a decrease of 73.63% compared to the
quarter ended March 31, 2015. In the
first quarter of 2015, there was a substantial recovery of expenses
related to a loan that had previously been charged off. Excluding
this recovery of expenses, other operating income in the first
quarter of 2015 would have been $277,000. Other operating income generally
includes revenue from prepayment penalties, safe deposit charges,
wire fees and other miscellaneous adjustments.
NON-INTEREST EXPENSE
Non-interest expense increased by
10.53% compared to the previous quarter and by 4.00% compared to
the same period in 2015. Principal categories of non-interest
expense that changed were the following:
- Salaries and employee benefit expenses increased by 27.61% when
compared to the previous quarter and decreased by 0.74% when
compared to the same period in 2015. Salaries and employee benefit
expenses were lower in the fourth quarter of 2015 as we aligned
compensation to the achievement of income and growth targets, which
were negatively impacted by the $3
million loan charge-off recorded in the fourth quarter. The
increase in salaries and benefits expenses in the first quarter of
2016 reflects normal levels of incentive accruals and salary
adjustments that occurred in the first quarter.
- Costs related to other real estate owned (OREO) increased when
compared to the prior quarter and also when compared to the same
period in 2015. In the current quarter, we recorded a valuation
adjustment of $189,000 for one
property resulting from an updated appraisal.
- Computer expense decreased to $720,000 for the current quarter compared to
$801,000 for the quarter ended
December 31, 2015 and increased from
$490,000 for the quarter ended
March 31, 2015. The decrease in
computer operations expense compared to the previous quarter was
primarily related to costs associated with conversion to a new
on-line banking platform in the fourth quarter of 2015. The
increase in computer operations expenses compared to the same
period in 2015 was primarily due to a termination fee for
converting to the new on-line banking platform.
- Other miscellaneous operating expenses decreased by 20.96%
compared to the prior quarter and increased slightly by
$112,000 when compared to the same
period in 2015. This category includes meals and entertainment
expenses, advisory expenses and legal costs.
ASSET QUALITY
Total nonperforming assets were
$25.06 million as of March 31, 2016 compared to $25.51 million at December
31, 2015 and $18.43 million at
March 31, 2015. The
primary changes in nonperforming asset balances were:
- Nonaccrual loans declined by 11.81% to $7.75 million as of March
31, 2016 compared to $8.78
million as of December 31,
2015 and declined 19.51% when compared to $9.63 million as of March
31, 2015. The decline in nonaccrual loans compared to the
prior quarter was primarily due to one loan that had been on
nonaccrual that paid off in the first quarter of 2016 and one loan
that was in foreclosure that was transferred to OREO during the
quarter.
- Restructured loans that were accruing were $12.03 million as of March
31, 2016 compared to $12.06
million and $4.26 million as
of December 31, 2015 and March 31, 2015, respectively. The increase in
restructured loans that were accruing was due to the restructuring
of two loans that were part of a single relationship during the
second quarter of 2015.
- Other real estate owned were $3.73
million as of March 31, 2016
compared to $3.35 million and
$3.40 million as of December 31, 2015 and March 31, 2015, respectively.
- Loans past due 90+ days and still accruing $511,000 as of March 31,
2016 compared to $278,000 and
$74,000 as of December 31, 2015 and March 31, 2015, respectively.
The Company increased its allowance for loan and lease losses
("ALLL") slightly to $11.33 million
or 1.37% of total loans at March 31,
2016 compared to $11.05
million or 1.37% of total loans at December 31, 2015. The increase was due to
loan growth which increased general reserves. The provision
for loan losses decreased to $300,000
in the first quarter of 2016 compared to a provision of
$2.7 million in the previous quarter
and a provision of $450,000 for the
same period in 2015.
CONSOLIDATED ASSETS
Total consolidated assets at
March 31, 2016 were $1.35 billion, higher by 4.11% since December 31, 2015. Changes in major asset
categories were as follows:
- Cash balances and deposits with other banks increased by
$26.49 million compared to
December 31, 2015.
- The Company deployed some of its excess liquidity into growing
its securities portfolio which increased by $7.47 million compared to December 31, 2015.
- Loans held-for-investment grew to $824.55 million as of March 31, 2016 compared to $805.68 million on December 31, 2015, an increase of $18.87 million from December 31, 2015.
CONSOLIDATED LIABILITIES
Total consolidated
liabilities at March 31, 2016 were
$1.22 billion, an increase of 4.40%
compared to December 31, 2015.
Deposit growth continues to be strong with total deposits
increasing by $43.10 million from
December 31, 2015 to $1.08 billion as of March
31, 2016. Federal Home Loan Bank ("FHLB") borrowings
increased by $10.00 million from
December 31, 2015 to $95.00 million at March
31, 2016. The majority of FHLB borrowings mature in
less than one year. We expect to retire those advances as
they mature and replace them with core deposits.
SHAREHOLDERS' EQUITY AND CAPITAL
Shareholders' equity
at March 31, 2016 was $125.23 million, compared to $123.55 million at December 31, 2015. Retained earnings at
March 31, 2016 were $61.53 million compared to $60.39 million at December
31, 2015. On September 15,
2015, the Company's Board of Directors authorized the
repurchase of up to $10 million of
the Company's common stock, or approximately 8% of the Company's
outstanding shares. The repurchase program was effective
immediately and runs through December 31,
2017. This program replaces the previous repurchase program
adopted in 1999, pursuant to which the Company had 24,084 shares
remaining eligible for repurchase. As of March 31, 2016,
the Company had repurchased a total of 104,300 shares, totaling
$1.91 million of the repurchase
authorization for a weighted average price of $18.33. The tangible book value of the
Company's common stock at March 31,
2016 was $17.14 per share
versus $16.93 per share at
December 31, 2015.
The Company's capital ratios remain well above regulatory
minimum capital ratios as of March 31,
2016:
- Tier 1 Leverage ratio was 9.40%, 5.40% over the regulatory
minimum of 4.00% to be well capitalized.
- Common Equity Tier 1 Ratio was 15.56%, 8.56% over the
regulatory minimum of 7.00% to be well capitalized.
- Tier 1 Risk-Based Capital Ratio was 16.22%, 7.72% over the
regulatory minimum of 8.50% to be well capitalized.
- Total Risk Based Capital Ratio was 17.47%, 6.97% over the
regulatory minimum of 10.50% to be well capitalized.
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, 2015, and other filings with the
Securities and Exchange Commission.
About Middleburg Financial Corporation
Middleburg Financial Corporation is headquartered in
Middleburg, Virginia and has two
wholly owned subsidiaries, Middleburg Bank and Middleburg
Investment Group, Inc. Middleburg Bank serves communities in
Virginia with financial centers in
Ashburn, Gainesville, Leesburg, Marshall, Middleburg, Purcellville, Reston, Richmond, Warrenton and Williamsburg. Middleburg
Investment Group owns Middleburg Trust Company, which is
headquartered in Richmond,
Virginia with offices in Middleburg, Alexandria and Williamsburg.
MIDDLEBURG
FINANCIAL CORPORATION AND SUBSIDIARIES
|
Consolidated
Balance Sheets
|
(In thousands, except
for share and per share data)
|
|
|
|
|
|
(Unaudited)
|
|
|
March 31,
2016
|
|
December 31,
2015
|
ASSETS
|
|
|
|
Cash and due from
banks
|
$
|
4,586
|
|
|
$
|
5,489
|
|
Interest bearing
deposits with other banks
|
61,135
|
|
|
33,739
|
|
Total cash and cash
equivalents
|
65,721
|
|
|
39,228
|
|
Securities held to
maturity, fair value of $9,209 and $4,163, respectively
|
9,227
|
|
|
4,207
|
|
Securities available
for sale, at fair value
|
377,025
|
|
|
374,571
|
|
Restricted
securities, at cost
|
6,901
|
|
|
6,411
|
|
Loans, net of
allowance for loan losses of $11,330 and $11,046,
respectively
|
813,221
|
|
|
794,635
|
|
Premises and
equipment, net
|
19,316
|
|
|
19,531
|
|
Goodwill and
identified intangibles, net
|
3,593
|
|
|
3,636
|
|
Other real estate
owned, net of valuation allowance
|
3,727
|
|
|
3,345
|
|
Bank owned life
insurance
|
23,434
|
|
|
23,273
|
|
Accrued interest
receivable and other assets
|
25,956
|
|
|
26,026
|
|
TOTAL
ASSETS
|
$
|
1,348,121
|
|
|
$
|
1,294,863
|
|
|
|
|
|
LIABILITIES
|
|
|
|
Deposits:
|
|
|
|
Non-interest bearing
demand deposits
|
$
|
250,915
|
|
|
$
|
235,897
|
|
Savings and interest
bearing demand deposits
|
567,428
|
|
|
560,328
|
|
Time
deposits
|
265,555
|
|
|
244,575
|
|
Total
deposits
|
1,083,898
|
|
|
1,040,800
|
|
Securities sold under
agreements to repurchase
|
25,294
|
|
|
26,869
|
|
Federal Home Loan
Bank borrowings
|
95,000
|
|
|
85,000
|
|
Subordinated
notes
|
5,155
|
|
|
5,155
|
|
Accrued interest
payable and other liabilities
|
13,549
|
|
|
13,485
|
|
TOTAL
LIABILITIES
|
1,222,896
|
|
|
1,171,309
|
|
Commitments and
contingencies
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Common stock ($2.50
par value; 20,000,000 shares authorized, 7,094,602 and 7,085,217,
issued and outstanding, respectively)
|
17,304
|
|
|
17,330
|
|
Capital
surplus
|
43,625
|
|
|
44,155
|
|
Retained
earnings
|
61,529
|
|
|
60,392
|
|
Accumulated other
comprehensive income
|
2,767
|
|
|
1,677
|
|
TOTAL SHAREHOLDERS'
EQUITY
|
125,225
|
|
|
123,554
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
|
$
|
1,348,121
|
|
|
$
|
1,294,863
|
|
MIDDLEBURG
FINANCIAL CORPORATION AND SUBSIDIARIES
|
Consolidated
Statements of Income
|
(In thousands, except
for per share data)
|
|
(Unaudited)
|
|
For the Three
Months Ended March 31,
|
|
2016
|
|
2015
|
INTEREST
INCOME
|
|
|
|
Interest and fees on
loans
|
$
|
8,230
|
|
|
$
|
8,243
|
|
Interest and
dividends on securities
|
|
|
|
Taxable
|
2,073
|
|
|
1,906
|
|
Tax-exempt
|
452
|
|
|
461
|
|
Dividends
|
69
|
|
|
59
|
|
Interest on deposits
with other banks and federal funds sold
|
48
|
|
|
30
|
|
Total interest and
dividend income
|
10,872
|
|
|
10,699
|
|
INTEREST
EXPENSE
|
|
|
|
Interest on
deposits
|
871
|
|
|
855
|
|
Interest on
securities sold under agreements to repurchase
|
1
|
|
|
45
|
|
Interest on FHLB
borrowings and other debt
|
251
|
|
|
168
|
|
Total interest
expense
|
1,123
|
|
|
1,068
|
|
NET INTEREST
INCOME
|
9,749
|
|
|
9,631
|
|
Provision for loan
losses
|
300
|
|
|
450
|
|
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES
|
9,449
|
|
|
9,181
|
|
NON-INTEREST
INCOME
|
|
|
|
Service charges on
deposit accounts
|
279
|
|
|
259
|
|
Trust services
income
|
1,158
|
|
|
1,218
|
|
ATM fee
income
|
327
|
|
|
299
|
|
Gains on sales of
loans held for sale, net
|
9
|
|
|
—
|
|
Gains on sales of
securities available for sale, net
|
163
|
|
|
101
|
|
Commissions on
investment sales
|
132
|
|
|
129
|
|
Bank owned life
insurance
|
160
|
|
|
160
|
|
Other operating
income
|
222
|
|
|
842
|
|
Total non-interest
income
|
2,450
|
|
|
3,008
|
|
NON-INTEREST
EXPENSE
|
|
|
|
Salaries and employee
benefits
|
4,812
|
|
|
4,848
|
|
Occupancy and
equipment
|
1,315
|
|
|
1,339
|
|
Advertising
|
55
|
|
|
133
|
|
Computer
operations
|
720
|
|
|
490
|
|
Other real estate
owned
|
167
|
|
|
67
|
|
Other
taxes
|
235
|
|
|
223
|
|
Federal deposit
insurance
|
175
|
|
|
211
|
|
ATM
expense
|
163
|
|
|
129
|
|
Audits and
exams
|
147
|
|
|
105
|
|
Other operating
expenses
|
1,467
|
|
|
1,355
|
|
Total non-interest
expense
|
9,256
|
|
|
8,900
|
|
Income before income
taxes
|
2,643
|
|
|
3,289
|
|
Income tax
expense
|
588
|
|
|
841
|
|
NET INCOME
|
$
|
2,055
|
|
|
$
|
2,448
|
|
Earnings per
share:
|
|
|
|
Basic
|
$
|
0.29
|
|
|
$
|
0.34
|
|
Diluted
|
$
|
0.29
|
|
|
$
|
0.34
|
|
Dividends per common
share
|
$
|
0.13
|
|
|
$
|
0.10
|
|
MIDDLEBURG
FINANCIAL CORPORATION AND SUBSIDIARIES
|
Quarterly Summary
of Consolidated Statements of Income
|
(Unaudited, Dollars
In thousands, except for per share data)
|
|
For the Three
Months Ended
|
|
March
31,
2016
|
|
December
31,
2015
|
|
September
30,
2015
|
|
June
30,
2015
|
|
March
31,
2015
|
INTEREST
INCOME
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
$
|
8,230
|
|
|
$
|
7,995
|
|
|
$
|
8,227
|
|
|
$
|
8,014
|
|
|
$
|
8,243
|
|
Interest and
dividends on securities
|
|
|
|
|
|
|
|
|
|
Taxable
|
2,073
|
|
|
1,992
|
|
|
1,938
|
|
|
1,792
|
|
|
1,906
|
|
Tax-exempt
|
452
|
|
|
449
|
|
|
444
|
|
|
449
|
|
|
461
|
|
Dividends
|
69
|
|
|
69
|
|
|
71
|
|
|
66
|
|
|
59
|
|
Interest on deposits
with other banks and federal funds sold
|
48
|
|
|
22
|
|
|
23
|
|
|
31
|
|
|
30
|
|
Total interest and
dividend income
|
10,872
|
|
|
10,527
|
|
|
10,703
|
|
|
10,352
|
|
|
10,699
|
|
INTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
871
|
|
|
882
|
|
|
877
|
|
|
848
|
|
|
855
|
|
Interest on
securities sold under agreements to repurchase
|
1
|
|
|
—
|
|
|
2
|
|
|
17
|
|
|
45
|
|
Interest on FHLB
borrowings and other debt
|
251
|
|
|
174
|
|
|
165
|
|
|
174
|
|
|
168
|
|
Total interest
expense
|
1,123
|
|
|
1,056
|
|
|
1,044
|
|
|
1,039
|
|
|
1,068
|
|
NET INTEREST
INCOME
|
9,749
|
|
|
9,471
|
|
|
9,659
|
|
|
9,313
|
|
|
9,631
|
|
Provision for
(recovery of) loan losses
|
300
|
|
|
2,700
|
|
|
(432)
|
|
|
(425)
|
|
|
450
|
|
NET INTEREST INCOME
AFTER PROVISION FOR (RECOVERY OF) LOAN LOSSES
|
9,449
|
|
|
6,771
|
|
|
10,091
|
|
|
9,738
|
|
|
9,181
|
|
NON-INTEREST
INCOME
|
|
|
|
|
|
|
|
|
|
Service charges on
deposit accounts
|
279
|
|
|
258
|
|
|
275
|
|
|
269
|
|
|
259
|
|
Trust services
income
|
1,158
|
|
|
1,156
|
|
|
1,168
|
|
|
1,243
|
|
|
1,218
|
|
ATM fee
income
|
327
|
|
|
355
|
|
|
347
|
|
|
343
|
|
|
299
|
|
Gains (losses) on
sales of loans held for sale
|
9
|
|
|
(4)
|
|
|
—
|
|
|
3
|
|
|
—
|
|
Gains on sales of
securities available for sale, net
|
163
|
|
|
2
|
|
|
—
|
|
|
37
|
|
|
101
|
|
Commissions on
investment sales
|
132
|
|
|
132
|
|
|
132
|
|
|
154
|
|
|
129
|
|
Bank owned life
insurance
|
160
|
|
|
167
|
|
|
166
|
|
|
163
|
|
|
160
|
|
Other operating
income
|
222
|
|
|
527
|
|
|
266
|
|
|
223
|
|
|
842
|
|
Total non-interest
income
|
2,450
|
|
|
2,593
|
|
|
2,354
|
|
|
2,435
|
|
|
3,008
|
|
NON-INTEREST
EXPENSE
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
4,812
|
|
|
3,771
|
|
|
4,834
|
|
|
4,982
|
|
|
4,848
|
|
Occupancy and
equipment
|
1,315
|
|
|
1,293
|
|
|
1,248
|
|
|
1,226
|
|
|
1,339
|
|
Advertising
|
55
|
|
|
(44)
|
|
|
98
|
|
|
101
|
|
|
133
|
|
Computer
operations
|
720
|
|
|
801
|
|
|
524
|
|
|
522
|
|
|
490
|
|
Other real estate
owned
|
167
|
|
|
(1)
|
|
|
193
|
|
|
25
|
|
|
67
|
|
Other
taxes
|
235
|
|
|
231
|
|
|
230
|
|
|
231
|
|
|
223
|
|
Federal deposit
insurance
|
175
|
|
|
203
|
|
|
188
|
|
|
184
|
|
|
211
|
|
ATM
expense
|
163
|
|
|
151
|
|
|
138
|
|
|
129
|
|
|
129
|
|
Audits and
exams
|
147
|
|
|
113
|
|
|
148
|
|
|
195
|
|
|
105
|
|
Other operating
expenses
|
1,467
|
|
|
1,856
|
|
|
1,673
|
|
|
1,483
|
|
|
1,355
|
|
Total non-interest
expense
|
9,256
|
|
|
8,374
|
|
|
9,274
|
|
|
9,078
|
|
|
8,900
|
|
Income before income
taxes
|
2,643
|
|
|
990
|
|
|
3,171
|
|
|
3,095
|
|
|
3,289
|
|
Income tax
expense
|
588
|
|
|
209
|
|
|
850
|
|
|
815
|
|
|
841
|
|
NET INCOME
|
$
|
2,055
|
|
|
$
|
781
|
|
|
$
|
2,321
|
|
|
$
|
2,280
|
|
|
$
|
2,448
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.29
|
|
|
$
|
0.11
|
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
$
|
0.34
|
|
Diluted
|
$
|
0.29
|
|
|
$
|
0.11
|
|
|
$
|
0.32
|
|
|
$
|
0.32
|
|
|
$
|
0.34
|
|
Dividends per common
share
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
MIDDLEBURG
FINANCIAL CORPORATION AND SUBSIDIARIES
|
Selected Financial
Data by Quarter
|
(Unaudited, Dollars
in thousands, except for per share data)
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
2016
|
|
2015
|
|
2015
|
|
2015
|
|
2015
|
BALANCE SHEET
RATIOS
|
|
|
|
|
|
|
|
|
|
Loans to
deposits
|
76.07
|
%
|
|
77.41
|
%
|
|
75.64
|
%
|
|
76.89
|
%
|
|
74.60
|
%
|
Average
interest-earning assets to average interest-bearing
liabilities
|
132.30
|
%
|
|
136.05
|
%
|
|
135.94
|
%
|
|
135.72
|
%
|
|
136.04
|
%
|
INCOME STATEMENT
RATIOS
|
|
|
|
|
|
|
|
|
|
Return on average
assets (ROA)
|
0.63
|
%
|
|
0.24
|
%
|
|
0.73
|
%
|
|
0.73
|
%
|
|
0.80
|
%
|
Return on average
equity (ROE)
|
6.63
|
%
|
|
2.45
|
%
|
|
7.33
|
%
|
|
7.31
|
%
|
|
8.01
|
%
|
Net interest margin
(1)
|
3.24
|
%
|
|
3.17
|
%
|
|
3.28
|
%
|
|
3.24
|
%
|
|
3.40
|
%
|
Yield on average
earning assets
|
3.60
|
%
|
|
3.52
|
%
|
|
3.63
|
%
|
|
3.59
|
%
|
|
3.77
|
%
|
Yield on
securities
|
2.95
|
%
|
|
2.83
|
%
|
|
2.86
|
%
|
|
2.77
|
%
|
|
2.98
|
%
|
Yield on
loans
|
4.09
|
%
|
|
4.01
|
%
|
|
4.20
|
%
|
|
4.20
|
%
|
|
4.45
|
%
|
Cost of
funds
|
0.39
|
%
|
|
0.37
|
%
|
|
0.37
|
%
|
|
0.38
|
%
|
|
0.39
|
%
|
Efficiency ratio
(5)
|
73.22
|
%
|
|
67.21
|
%
|
|
73.30
|
%
|
|
74.88
|
%
|
|
68.35
|
%
|
PER SHARE
DATA
|
|
|
|
|
|
|
|
|
|
Dividends
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
Book value
|
17.65
|
|
|
17.44
|
|
|
17.65
|
|
|
17.42
|
|
|
17.51
|
|
Tangible book value
(4)
|
17.14
|
|
|
16.93
|
|
|
17.13
|
|
|
16.90
|
|
|
16.99
|
|
SHARE PRICE
DATA
|
|
|
|
|
|
|
|
|
|
Closing
price
|
$
|
21.60
|
|
|
$
|
18.48
|
|
|
$
|
17.61
|
|
|
$
|
18.00
|
|
|
$
|
18.30
|
|
Diluted earnings
multiple (2)
|
18.52
|
|
|
16.95
|
|
|
13.76
|
|
|
14.06
|
|
|
13.45
|
|
Book value multiple
(3)
|
1.22
|
|
|
1.06
|
|
|
1.00
|
|
|
1.03
|
|
|
1.04
|
|
COMMON STOCK
DATA
|
|
|
|
|
|
|
|
|
|
Outstanding shares at
end of period
|
7,094,602
|
|
|
7,085,217
|
|
|
7,162,716
|
|
|
7,163,255
|
|
|
7,127,105
|
|
Weighted average
shares outstanding, basic
|
7,076,775
|
|
|
7,152,844
|
|
|
7,162,930
|
|
|
7,145,929
|
|
|
7,127,910
|
|
Weighted average
shares outstanding, diluted
|
7,107,380
|
|
|
7,171,498
|
|
|
7,181,183
|
|
|
7,167,165
|
|
|
7,148,702
|
|
Dividend payout
ratio
|
44.83
|
%
|
|
118.18
|
%
|
|
40.63
|
%
|
|
31.25
|
%
|
|
29.41
|
%
|
CAPITAL
RATIOS
|
|
|
|
|
|
|
|
|
|
Capital to
assets
|
9.29
|
%
|
|
9.54
|
%
|
|
10.02
|
%
|
|
10.05
|
%
|
|
9.86
|
%
|
Leverage
ratio
|
9.40
|
%
|
|
9.59
|
%
|
|
9.84
|
%
|
|
9.85
|
%
|
|
9.76
|
%
|
Common equity tier 1
ratio
|
15.56
|
%
|
|
15.61
|
%
|
|
16.31
|
%
|
|
16.35
|
%
|
|
16.49
|
%
|
Tier 1 risk based
capital ratio
|
16.22
|
%
|
|
16.27
|
%
|
|
16.99
|
%
|
|
17.04
|
%
|
|
17.20
|
%
|
Total risk based
capital ratio
|
17.47
|
%
|
|
17.52
|
%
|
|
18.25
|
%
|
|
18.28
|
%
|
|
18.45
|
%
|
CREDIT
QUALITY
|
|
|
|
|
|
|
|
|
|
Net charge-offs
(recoveries) to average loans
|
0.002
|
%
|
|
0.390
|
%
|
|
(0.002)%
|
|
|
(0.04)%
|
|
|
0.03
|
%
|
Total nonperforming
loans to total loans
|
2.46
|
%
|
|
2.62
|
%
|
|
2.71
|
%
|
|
2.63
|
%
|
|
1.83
|
%
|
Total nonperforming
assets to total assets
|
1.86
|
%
|
|
1.97
|
%
|
|
2.07
|
%
|
|
1.99
|
%
|
|
1.46
|
%
|
Nonaccrual loans
to:
|
|
|
|
|
|
|
|
|
|
Total loans
|
0.94
|
%
|
|
1.09
|
%
|
|
1.13
|
%
|
|
1.04
|
%
|
|
1.26
|
%
|
Total assets
|
0.57
|
%
|
|
0.68
|
%
|
|
0.70
|
%
|
|
0.64
|
%
|
|
0.76
|
%
|
Allowance for loan
losses to:
|
|
|
|
|
|
|
|
|
|
Total
loans
|
1.37
|
%
|
|
1.37
|
%
|
|
1.46
|
%
|
|
1.54
|
%
|
|
1.58
|
%
|
Nonperforming assets
|
45.22
|
%
|
|
43.30
|
%
|
|
43.73
|
%
|
|
48.03
|
%
|
|
65.23
|
%
|
Nonaccrual loans
|
146.25
|
%
|
|
125.75
|
%
|
|
129.15
|
%
|
|
148.53
|
%
|
|
124.92
|
%
|
NONPERFORMING
ASSETS
|
|
|
|
|
|
|
|
|
|
Loans delinquent 90+
days and still accruing
|
$
|
511
|
|
|
$
|
278
|
|
|
$
|
224
|
|
|
$
|
173
|
|
|
$
|
74
|
|
Nonaccrual
loans
|
7,747
|
|
|
8,784
|
|
|
8,827
|
|
|
8,008
|
|
|
9,625
|
|
Restructured loans
(not in nonaccrual)
|
12,027
|
|
|
12,058
|
|
|
12,106
|
|
|
12,138
|
|
|
4,262
|
|
Other real estate
owned
|
3,727
|
|
|
3,345
|
|
|
3,871
|
|
|
3,402
|
|
|
3,402
|
|
Repossessed
assets
|
1,043
|
|
|
1,043
|
|
|
1,044
|
|
|
1,044
|
|
|
1,070
|
|
Total nonperforming
assets
|
$
|
25,055
|
|
|
$
|
25,508
|
|
|
$
|
26,072
|
|
|
$
|
24,765
|
|
|
$
|
18,433
|
|
|
|
(1)
|
The net interest
margin is calculated by dividing tax equivalent net interest income
by total average earning assets. Tax equivalent net interest
income is calculated by grossing up interest income for the amounts
that are non taxable (i.e., municipal income) then subtracting
interest expense. The tax rate utilized is 34%. The Company's net
interest margin is a common measure used by the financial service
industry to determine how profitably earning assets are
funded. Because the Company earns non taxable interest income
due to the mix in its investment and loan portfolios, net interest
income for the ratio is calculated on a tax equivalent basis as
described above. This calculation excludes net securities
gains and losses.
|
(2)
|
The diluted earnings
multiple is calculated by dividing the period's closing market
price per share by the annualized diluted earnings per share for
the period. The diluted earnings multiple is a measure of how
much an investor may be willing to pay for $1.00 of the Company's
earnings.
|
(3)
|
The book value
multiple (or price to book ratio) is calculated by dividing the
period's closing market price per share by the period's book value
per share. The book value multiple is a measure used to
compare the Company's market value per share to its book value per
share.
|
(4)
|
Tangible book value
is not a measurement under accounting principles generally accepted
in the United States. It is computed by subtracting
identified intangible assets and goodwill from total Middleburg
Financial Corporation shareholders' equity and then dividing the
result by the number of shares of common stock issued and
outstanding at the end of the accounting period.
|
(5)
|
The efficiency ratio
is not a measurement under accounting principles generally accepted
in the United States. It is calculated by dividing non-interest
expense (adjusted for amortization of intangibles, other real
estate expenses, and non-recurring one-time charges) by the sum of
tax equivalent net interest income and non-interest income
excluding gains and losses on the investment portfolio. The tax
rate utilized in calculating tax equivalent amounts is 34%. The
Company calculates and reviews this ratio as a means of evaluating
operational efficiency.
|
MIDDLEBURG
FINANCIAL CORPORATION AND SUBSIDIARIES
Average Balances,
Income and Expenses, Yields and Rates
(Unaudited)
|
|
Three months ended
March 31,
|
|
2016
|
|
2015
|
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate (2)
|
|
Average
Balance
|
|
Income/
Expense
|
|
Yield/
Rate (2)
|
|
(Dollars in
thousands)
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
$
|
336,696
|
|
|
$
|
2,142
|
|
|
2.56
|
%
|
|
$
|
309,842
|
|
|
$
|
1,965
|
|
|
2.57
|
%
|
Tax-exempt
(1)
|
49,231
|
|
|
685
|
|
|
5.60
|
%
|
|
52,606
|
|
|
699
|
|
|
5.39
|
%
|
Total
securities
|
$
|
385,927
|
|
|
$
|
2,827
|
|
|
2.95
|
%
|
|
$
|
362,448
|
|
|
$
|
2,664
|
|
|
2.98
|
%
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
$
|
809,451
|
|
|
$
|
8,223
|
|
|
4.09
|
%
|
|
$
|
751,590
|
|
|
$
|
8,237
|
|
|
4.44
|
%
|
Tax-exempt (1)
|
723
|
|
|
10
|
|
|
5.56
|
%
|
|
615
|
|
|
8
|
|
|
5.28
|
%
|
Total loans
(3)
|
$
|
810,174
|
|
|
$
|
8,233
|
|
|
4.09
|
%
|
|
$
|
752,205
|
|
|
$
|
8,245
|
|
|
4.45
|
%
|
Interest on deposits
with other banks and federal funds sold
|
44,407
|
|
|
48
|
|
|
0.43
|
%
|
|
61,203
|
|
|
30
|
|
|
0.20
|
%
|
Total earning
assets
|
$
|
1,240,508
|
|
|
$
|
11,108
|
|
|
3.60
|
%
|
|
$
|
1,175,856
|
|
|
$
|
10,939
|
|
|
3.77
|
%
|
Less: allowance for
loan losses
|
(11,177)
|
|
|
|
|
|
|
(11,660)
|
|
|
|
|
|
Total nonearning
assets
|
81,563
|
|
|
|
|
|
|
76,223
|
|
|
|
|
|
Total
assets
|
$
|
1,310,894
|
|
|
|
|
|
|
$
|
1,240,419
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
Checking
|
$
|
355,670
|
|
|
$
|
191
|
|
|
0.22
|
%
|
|
$
|
337,126
|
|
|
$
|
166
|
|
|
0.20
|
%
|
Regular
savings
|
128,113
|
|
|
59
|
|
|
0.19
|
%
|
|
115,319
|
|
|
53
|
|
|
0.19
|
%
|
Money market
savings
|
75,498
|
|
|
38
|
|
|
0.20
|
%
|
|
69,536
|
|
|
32
|
|
|
0.19
|
%
|
Time
deposits:
|
|
|
|
|
|
|
|
|
|
|
|
$100,000 and
over
|
143,285
|
|
|
319
|
|
|
0.90
|
%
|
|
132,240
|
|
|
292
|
|
|
0.90
|
%
|
Under
$100,000
|
109,685
|
|
|
264
|
|
|
0.97
|
%
|
|
110,367
|
|
|
312
|
|
|
1.15
|
%
|
Total
interest-bearing deposits
|
$
|
812,251
|
|
|
$
|
871
|
|
|
0.43
|
%
|
|
$
|
764,588
|
|
|
$
|
855
|
|
|
0.45
|
%
|
Securities sold under
agreements to repurchase
|
27,419
|
|
|
1
|
|
|
0.01
|
%
|
|
33,761
|
|
|
45
|
|
|
0.54
|
%
|
FHLB borrowings and
other debt
|
98,012
|
|
|
251
|
|
|
1.03
|
%
|
|
65,988
|
|
|
168
|
|
|
1.03
|
%
|
Total
interest-bearing liabilities
|
$
|
937,682
|
|
|
$
|
1,123
|
|
|
0.48
|
%
|
|
$
|
864,337
|
|
|
$
|
1,068
|
|
|
0.50
|
%
|
Non-interest bearing
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
234,780
|
|
|
|
|
|
|
238,785
|
|
|
|
|
|
Other
liabilities
|
13,726
|
|
|
|
|
|
|
13,419
|
|
|
|
|
|
Total
liabilities
|
$
|
1,186,188
|
|
|
|
|
|
|
$
|
1,116,541
|
|
|
|
|
|
Shareholders'
equity
|
124,706
|
|
|
|
|
|
|
123,878
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
1,310,894
|
|
|
|
|
|
|
$
|
1,240,419
|
|
|
|
|
|
Net interest
income
|
|
|
$
|
9,985
|
|
|
|
|
|
|
$
|
9,871
|
|
|
|
Interest rate
spread
|
|
|
|
|
3.12
|
%
|
|
|
|
|
|
3.27
|
%
|
Cost of
Funds
|
|
|
|
|
0.39
|
%
|
|
|
|
|
|
0.39
|
%
|
Interest expense as a
percent of average earning assets
|
|
|
|
|
0.36
|
%
|
|
|
|
|
|
0.37
|
%
|
Net interest
margin
|
|
|
|
|
3.24
|
%
|
|
|
|
|
|
3.40
|
%
|
|
|
(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 for 2016 and 365 day year
for 2015.
|
(3)
|
Total average loans
include loans on non-accrual status.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/middleburg-financial-corporation-announces-first-quarter-2016-results-300259779.html
SOURCE Middleburg Financial Corporation