Segment Reporting

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company operates its principal business activities of retail banking services and wealth management services in a decentralized fashion. Revenue from retail banking activity consists primarily of interest and fees earned on loans, including mortgage banking activity, interest earned on 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.

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 Trust Company pays rental and other miscellaneous occupancy expenses to Middleburg Bank. Transactions related to these relationships are eliminated to reach consolidated totals.

In 2014, revenue from the mortgage banking activities is comprised of interest earned on loans and fees received as a result of the mortgage origination process. 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 subsequent to the sale date is included with the results of the retail banking segment. Mortgage banking activities for the twelve months ended December 31, 2014 are the result of Southern Trust Mortgage activity that was consolidated with the Company through the date of sale. In 2014, Middleburg Bank provided a warehouse line, 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.

Information about reportable segments and reconciliation to the consolidated financial statements follows:

	2016
(Dollars in thousands)	Commercial & Retail Banking		Wealth Management		Mortgage Banking		Intercompany Eliminations			Consolidated
Revenues:
Interest income	$	43,365	$	10	$	—	$	—		$	43,375
Trust services income	—		4,806		—		(163		)	4,643
Other income	6,204		—		—		(109		)	6,095
Total operating income	49,569		4,816		—		(272		)	54,113
Expenses:
Interest expense	4,424		—		—		—			4,424
Salaries and employee benefits	16,473		2,284		—		—			18,757
Provision for loan losses	1,853		—		—		—			1,853
Other expense	17,556		918		—		(272		)	18,202
Total operating expenses	40,306		3,202		—		(272		)	43,236
Income before income taxes	9,263		1,614		—		—			10,877
Income tax expense	2,203		610		—		—			2,813
Net income	$	7,060	$	1,004	$	—	$	—		$	8,064
Total assets	$	1,270,222	$	6,693	$	—	$	(4,272	)	$	1,272,643
Capital expenditures	$	978	$	—	$	—	$	—		$	978
Goodwill and other intangibles	$	—	$	3,465	$	—	$	—		$	3,465

	2015
(Dollars in thousands)	Commercial & Retail Banking		Wealth Management		Mortgage Banking		Intercompany Eliminations			Consolidated
Revenues:
Interest income	$	42,270	$	11	$	—	$	—		$	42,281
Trust services income	—		4,951		—		(166		)	4,785
Other income	5,605		—		—		—			5,605
Total operating income	47,875		4,962		—		(166		)	52,671
Expenses:
Interest expense	4,207		—		—		—			4,207
Salaries and employee benefits	16,130		2,305		—		—			18,435
Provision for loan losses	2,293		—		—		—			2,293
Other expense	16,237		1,120		—		(166		)	17,191
Total operating expenses	38,867		3,425		—		(166		)	42,126
Income before income taxes	9,008		1,537		—		—			10,545
Income tax expense	2,131		584		—		—			2,715
Net income	$	6,877	$	953	$	—	$	—		$	7,830
Total assets	$	1,291,708	$	6,700	$	—	$	(3,545	)	$	1,294,863
Capital expenditures	$	2,137	$	—	$	—	$	—		$	2,137
Goodwill and other intangibles	$	—	$	3,636	$	—	$	—		$	3,636

	2014
(Dollars in thousands)	Commercial & Retail Banking		Wealth Management		Mortgage Banking			Intercompany Eliminations			Consolidated
Revenues:
Interest income	$	43,149	$	14	$	450		$	(288	)	$	43,325
Trust services income	—		4,516		—			(154		)	4,362
Other income	5,349		—		5,121			(46		)	10,424
Total operating income	48,498		4,530		5,571			(488		)	58,111
Expenses:
Interest expense	5,227		—		304			(288		)	5,243
Salaries and employee benefits	16,567		2,262		3,772			—			22,601
Provision for loan losses	1,926		—		34			—			1,960
Other expense	15,818		1,140		1,722			(200		)	18,480
Total operating expenses	39,538		3,402		5,832			(488		)	48,284
Income before income taxes and non-controlling interest	8,960		1,128		(261		)	—			9,827
Income tax expense	1,894		447		—			—			2,341
Net income	7,066		681		(261		)	—			7,486
Non-controlling interest in consolidated subsidiary	—		—		98			—			98
Net income attributable to Middleburg Financial Corporation	$	7,066	$	681	$	(163	)	$	—		$	7,584
Total assets	$	1,218,452	$	7,152	$	—		$	(2,747	)	$	1,222,857
Capital expenditures	$	911	$	6	$	3		$	—		$	920
Goodwill and other intangibles	$	—	$	3,807	$	—		$	—		$	3,807