Capital Requirements

12 Months Ended

Dec. 31, 2016

Regulatory Capital Requirements [Abstract]

Capital Requirements

Capital Requirements

The Company, on a consolidated basis, and Middleburg Bank are subject to various regulatory capital requirements administered by the federal banking agencies.  Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and Bank’s financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Middleburg Bank must meet specific capital guidelines that involve quantitative measures of the Company's and Middleburg Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices.  The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.  Prompt corrective action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Middleburg Bank to maintain minimum amounts and ratios, as set forth in the table below.  Management believes, as of December 31, 2016 and 2015, that the Company and Middleburg Bank meet all capital adequacy requirements to which they are subject.

As of December 31, 2016, the most recent notification from the Federal Reserve Bank categorized Middleburg Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum capital requirements as set forth in the table.  There are no conditions or events since that notification that management believes have changed the institution's category.

The Company’s and Middleburg Bank’s actual capital amounts and ratios are also presented in the following table.

	Actual			Minimum Capital Requirement			Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in thousands)	Amount		Ratio	Amount		Ratio	Amount		Ratio
As of December 31, 2016
Total Capital (to Risk- Weighted Assets):
Consolidated	$	139,419	17.9%	$	62,436	8.0%	N/A		N/A
Middleburg Bank	131,725		17.0%	61,994		8.0%	$	77,492	10.0%
Tier 1 Capital (to Risk- Weighted Assets):
Consolidated	$	129,642	16.6%	$	46,827	6.0%	N/A		N/A
Middleburg Bank	122,016		15.8%	46,495		6.0%	$	61,994	8.0%
Common Equity Tier 1 Capital (to Risk-Weighted Assets):
Consolidated	$	124,642	16.0%	$	35,121	4.5%	N/A		N/A
Middleburg Bank	122,016		15.8%	34,872		4.5%	$	50,370	6.5%
Tier 1 Capital (to Average Assets):
Consolidated	$	129,642	10.0%	$	52,142	4.0%	N/A		N/A
Middleburg Bank	122,016		9.4%	51,909		4.0%	$	64,886	5.0%
As of December 31, 2015
Total Capital (to Risk- Weighted Assets):
Consolidated	$	132,481	17.5%	$	60,495	8.0%	N/A		N/A
Middleburg Bank	127,418		17.0%	60,055		8.0%	$	75,068	10.0%
Tier 1 Capital (to Risk- Weighted Assets):
Consolidated	$	123,008	16.3%	$	45,371	6.0%	N/A		N/A
Middleburg Bank	118,013		15.7%	45,041		6.0%	$	60,055	8.0%
Common Equity Tier 1 Capital (to Risk-Weighted Assets):
Consolidated	$	118,008	15.6%	$	34,028	4.5%	N/A		N/A
Middleburg Bank	118,013		15.7%	33,781		4.5%	$	48,794	6.5%
Tier 1 Capital (to Average Assets):
Consolidated	$	123,008	9.6%	$	51,301	4.0%	N/A		N/A
Middleburg Bank	118,013		9.2%	51,067		4.0%	$	63,834	5.0%

In addition to the minimum regulatory capital required for capital adequacy purposes included in the table above, the Company is required to maintain a minimum Capital Conservation Buffer, in the form of common equity, in order to avoid restrictions on capital distributions and discretionary bonuses. The required amount of the Capital Conservation Buffer was 0.625% on January 1, 2016 and will increase by 0.625% each year until it reaches 2.5% on January 1, 2019. The Capital Conservation Buffer is applicable to all ratios except the leverage ratio, which is noted above as Tier 1 Capital to Average Assets.

On January 1, 2015, the Company and the Bank applied changes to the regulatory capital framework that were approved on July 9, 2013 by the federal banking agencies (the Basel III Final Rule). The regulatory risk-based capital amounts presented above include: (1) common equity tier 1 capital (CET1) which consists principally of common stock (including surplus) and retained earnings with adjustments for goodwill, intangible assets and deferred tax assets; (2) Tier 1 capital which consists principally of CET1 plus the Company’s “grandfathered” trust preferred securities; and (3) Tier 2 capital which consists principally of Tier 1 capital plus a limited amount of the allowance for loan losses. In addition, the Company has made the one-time irrevocable election to continue treating accumulated other comprehensive income (loss) under regulatory standards that were in place prior to the Basel III Final Rule in order to eliminate volatility of regulatory capital that can result from fluctuations in accumulated other comprehensive income (loss) and the inclusion of accumulated other comprehensive income (loss) in regulatory capital, as would otherwise be required under the Basel III Capital Rule. The table above also reflects the minimum regulatory and certain prompt corrective action capital levels that began on January 1, 2015.