Segment Reporting

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company operates in a decentralized fashion in the following principal business activities: retail banking services; wealth management services; and mortgage banking services.  

• Revenue from retail banking activity consists primarily of interest earned on loans and investment securities and service charges on deposit accounts.

• Revenue from the wealth management activities is comprised of fees based upon the market value of the accounts under administration as well as commissions on investment transactions.

• Revenue from the mortgage banking activities is comprised of interest earned on loans and fees received as a result of the mortgage origination process through the Company's affiliation with Southern Trust Mortgage. The Company recognized gains on the sale of loans as part of other income. On May 15, 2014, the Company sold all of its majority interest in Southern Trust Mortgage and as a result, any mortgage banking activity for the Company for the third quarter of 2014 is included with the results of the retail banking segment. Any activity since the sale of Southern Trust Mortgage is considered to be immaterial and incidental to the Company's retail banking activities. The mortgage banking activities will continue to be evaluated and will be separately reported as a distinguishable segment if determined to be of significance to the reader of these financial statements or if the related operating results are believed to meet the quantitative tests for disclosure. Mortgage banking activities for the nine months ended September 30, 2014 are the result of Southern Trust Mortgage activity that was consolidated with the Company through the date of sale.

Middleburg Bank and the Company have assets in custody with Middleburg Trust Company and accordingly pay Middleburg Trust Company a monthly fee. Middleburg Bank also pays interest to Middleburg Trust Company on deposit accounts with Middleburg Bank. Middleburg Bank provided a warehouse line and office space, data processing and accounting services to Southern Trust Mortgage for which it received income. Transactions related to these relationships are eliminated to reach consolidated totals.

The following tables represent reportable segment information for the three and nine months ended September 30, 2014 and 2013, respectively:

	For the Three Months Ended											For the Three Months Ended
	September 30, 2014											September 30, 2013
(In Thousands)	Retail Banking		Wealth Management		Mortgage Banking		Elimina-tions			Consolidated		Retail Banking		Wealth Management		Mortgage Banking			Elimina-tions			Consolidated
Revenues:
Interest income	$	10,876	$	4	$	—	$	(90	)	$	10,790	$	10,750	$	4	$	520		$	(320	)	$	10,954
Trust and investment fee income	193		1,158		—		(38		)	1,313		—		1,000		—			(37		)	963
Other income	969		—		—		(21		)	948		899		—		4,358			(92		)	5,165
Total operating income	12,038		1,162		—		(149		)	13,051		11,649		1,004		4,878			(449		)	17,082
Expenses:
Interest expense	1,335		—		—		(90		)	1,245		1,574		—		380			(320		)	1,634
Salaries and employee benefits	3,877		564		—		—			4,441		4,183		393		3,174			—			7,750
Provision for loan losses	550		—		—		—			550		—		—		3			—			3
Other	3,703		287		—		(59		)	3,931		4,240		223		1,221			(129		)	5,555
Total operating expenses	9,465		851		—		(149		)	10,167		9,997		616		4,778			(449		)	14,942
Income before income taxes and non-controlling interest	2,573		311		—		—			2,884		1,652		388		100			—			2,140
Income tax expense	635		128		—		—			763		440		51		—			—			491
Net Income	1,938		183		—		—			2,121		1,212		337		100			—			1,649
Non-controlling interest in income of consolidated subsidiary	—		—		—		—			—		—		—		(38		)	—			(38		)
Net income attributable to Middleburg Financial Corporation	$	1,938	$	183	$	—	$	—		$	2,121	$	1,212	$	337	$	62		$	—		$	1,611
Total assets	$	1,322,493	$	12,505	$	—	$	(127,271	)	$	1,207,727	$	1,202,151	$	12,192	$	52,281		$	(51,297	)	$	1,215,327
Capital expenditures	$	307	$	1	$	3	$	—		$	311	$	693	$	5	$	115		$	—		$	813
Goodwill and other intangibles	$	—	$	3,850	$	—	$	—		$	3,850	$	—	$	4,022	$	1,867		$	—		$	5,889

	For the Nine Months Ended												For the Nine Months Ended
	September 30, 2014												September 30, 2013
(In Thousands)	Retail Banking		Wealth Management		Mortgage Banking			Elimina-tions			Consolidated		Retail Banking			Wealth Management		Mortgage Banking			Elimina-tions			Consolidated
Revenues:
Interest income	$	32,665	$	11	$	450		$	(288	)	$	32,838	$	32,742		$	11	$	1,398		$	(993	)	$	33,158
Trust and investment fee income	479		3,339		—			(115		)	3,703		—			3,052		—			(115		)	2,937
Other income	3,659		—		5,121			(46		)	8,734		3,363			—		13,161			(325		)	16,199
Total operating income	36,803		3,350		5,571			(449		)	45,275		36,105			3,063		14,559			(1,433		)	52,294
Expenses:
Interest expense	4,055		—		304			(288		)	4,071		4,956			—		1,099			(993		)	5,062
Salaries and employee benefits	11,996		1,699		3,772			—			17,467		12,485			1,623		9,134			—			23,242
Provision for (recovery of) loan losses	1,476		—		34			—			1,510		(9		)	—		8			—			(1		)
Other	11,794		837		1,722			(161		)	14,192		12,930			910		3,699			(440		)	17,099
Total operating expenses	29,321		2,536		5,832			(449		)	37,240		30,362			2,533		13,940			(1,433		)	45,402
Income before income taxes and non-controlling interest	7,482		814		(261		)	—			8,035		5,743			530		619			—			6,892
Income tax expense	1,847		332		—			—			2,179		1,403			225		—			—			1,628
Net Income	5,635		482		(261		)	—			5,856		4,340			305		619			—			5,264
Non-controlling interest in income of consolidated subsidiary	—		—		98			—			98		—			—		(233		)	—			(233		)
Net income attributable to Middleburg Financial Corporation	$	5,635	$	482	$	(163	)	$	—		$	5,954	$	4,340		$	305	$	386		—			$	5,031
Total assets	$	1,322,493	$	12,505	$	—		$	(127,271	)	$	1,207,727	$	1,202,151		$	12,192	$	52,281		$	(51,297	)	$	1,215,327
Capital expenditures	$	748	$	11	$	3		$	—		$	762	$	1,144		$	5	$	124		$	—		$	1,273
Goodwill and other intangibles	$	—	$	3,850	$	—		$	—		$	3,850	$	—		$	4,022	$	1,867		$	—		$	5,889