Segment Reporting

6 Months Ended

Jun. 30, 2011

Segment Reporting [Abstract]

Segment Reporting

Note 7.                                Segment Reporting

The Company operates in a decentralized fashion in three principal business activities: retail banking services; wealth management services; and mortgage banking services.  Revenue from retail banking activities 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 commission on investment transactions.  The wealth management services are conducted by Middleburg Trust Company and the investment services department of Middleburg Bank.

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 recognizes gains on the sale of loans as part of other income.  The mortgage banking services are conducted by Southern Trust Mortgage, LLC.

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 and Southern Trust Mortgage on deposit accounts that each company has at Middleburg Bank.  Southern Trust Mortgage has an outstanding line of credit of $5.0 million and a participation agreement of $50.0 million for which it pays interest to Middleburg Bank on any outstanding balance.  Middleburg Bank provides office space and data processing services to Southern Trust Mortgage for which it receives rental and fee income.  Transactions related to these relationships are eliminated to reach consolidated totals.

The following table presents segment information for the six months ended June 30, 2011 and 2010, respectively.

	For the Six Months Ended												For the Six Months Ended
	June 30, 2011												June 30, 2010
	Retail		Wealth		Mortgage			Intercompany					Retail		Wealth			Mortgage			Intercompany
	Banking		Management		Banking			Eliminations			Consolidated		Banking		Management			Banking			Eliminations			Consolidated
(In Thousands)
Revenues:
Interest income	$	23,120	$	6	$	1,325		$	(538	)	$	23,913	$	23,369	$	4		$	1,466		$	(583	)	$	24,256
Trust and investment
fee income		-		1,850		-			-			1,850		-		1,734			-			(44	)		1,690
Other income		1,611		365		7,168			(1	)		9,143		1,680		311			7,453			(5	)		9,439
Total operating income		24,731		2,221		8,493			(539	)		34,906		25,049		2,049			8,919			(632	)		35,385
Expenses:
Interest expense		5,367		-		654			(538	)		5,483		7,259		-			690			(581	)		7,368
Salaries and employee benefits		6,926		1,542		6,661			-			15,129		6,578		1,538			6,265			-			14,381
Provision for loan losses		1,541		-		-			-			1,541		2,002		-			218			-			2,220
Other		7,386		641		2,034			(1	)		10,060		7,224		684			1,971			(51	)		9,828
Total operating expenses		21,220		2,183		9,349			(539	)		32,213		23,063		2,222			9,144			(632	)		33,797
Income before income taxes
and non-controlling interest		3,511		38		(856	)		-			2,693		1,986		(173	)		(225	)		-			1,588
Income tax expense		605		13		-			-			618		186		(24	)		-			-			162
Net Income		2,906		25		(856	)		-			2,075		1,800		(149	)		(225	)		-			1,426
Non-controlling interest in
(income)/loss of consolidated subsidiary				-		351			-			351				-			112			-			112
Net income attributable to
Middleburg Financial Corporation	$	2,906	$	25	$	(505	)	$	-		$	2,426	$	1,800	$	(149	)	$	(113	)	$	-		$	1,538
Total assets	$	1,130,366	$	15,694	$	72,652		$	(74,045	)	$	1,144,667	$	1,043,703	$	15,694		$	72,652		$	(70,697	)	$	1,061,352
Capital expenditures	$	691	$	3	$	-					$	694	$	430	$	12		$	21					$	463
Goodwill and other intangibles	$	-	$	4,419	$	1,867		$	-		$	6,286	$	-	$	4,579		$	1,867		$	-		$	6,446

The following table presents segment information for the three months ended June 30, 2011 and 2010, respectively.

	For the Three Months Ended												For the Three Months Ended
	June 30, 2011												June 30, 2010
	Retail		Wealth		Mortgage			Intercompany					Retail		Wealth			Mortgage			Intercompany
	Banking		Management		Banking			Eliminations			Consolidated		Banking		Management			Banking			Eliminations			Consolidated
(In Thousands)
Revenues:
Interest income	$	11,808	$	3	$	634			(290	)	$	12,155	$	11,782	$	2		$	691		$	(351	)	$	12,124
Trust and investment
fee income		-		1,125		-			(142	)		983		-		895			-			(20	)		875
Other income		675		195		4,067			168			5,105		297		478			4,412			(5	)		5,182
Total operating income		12,483		1,323		4,701			(264	)		18,243		12,079		1,375			5,103			(376	)		18,181
Expenses:
Interest expense		2,706		-		343			(289	)		2,760		3,665		-			376			(349	)		3,692
Salaries and employee benefits		3,265		933		3,615			-			7,813		3,302		965			3,190			-			7,457
Provision for loan losses		1,087		-		-			-			1,087		1,053		-			238			-			1,291
Other		3,772		343		1,062			25			5,204		3,430		455			951			(27	)		4,809
Total operating expenses		10,830		1,276		5,020			(264	)		16,864		11,450		1,420			4,755			(376	)		17,249
Income before income taxes
and non-controlling interest		1,653		47		(319	)		-			1,379		629		(45	)		348			-			932
Income tax expense		283		20		-			-			301		72		3			-			-			75
Net Income		1,370		27		(319	)		-			1,078		557		(48	)		348			-			857
Non-controlling interest in
(income)/loss of consolidated subsidiary						121			-			121							(133	)		-			(133	)
Net income attributable to
Middleburg Financial Corporation	$	1,370	$	27	$	(198	)	$	-		$	1,199	$	557	$	(48	)	$	215		$	-		$	724
Total assets	$	1,130,366	$	15,694	$	72,652		$	(74,045	)	$	1,144,667	$	1,043,703	$	15,694		$	72,652		$	(70,697	)	$	1,061,352
Capital expenditures	$	441	$	-	$	-		$	-		$	441	$	327	$	11		$	16		$	-		$	354
Goodwill and other intangibles	$	-	$	4,419	$	1,867		$	-		$	6,286	$	-	$	4,579		$	1,867		$	-		$	6,446