Segment Reporting

3 Months Ended

Mar. 31, 2012

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 commissions 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 $75.0 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 three months ended March 31, 2012 and 2011, respectively.

	For the Three Months Ended												For the Three Months Ended
	March 31, 2012												March 31, 2011
	Retail Banking		Wealth Management		Mortgage Banking			Inter-company Elimina-tions			Consolidated		Retail Banking		Wealth Management			Mortgage Banking			Inter-company Elimina-tions			Consolidated
(In Thousands)
Revenues:
Interest income	$	11,854	$	2	$	887		$	(402	)	$	12,341	$	11,313	$	3		$	691		$	(249	)	$	11,758
Trust and investment fee income		-		956		-			(35	)		921		-		895			-			(28	)		867
Other income		1,093		-		4,018			(197	)		4,914		936		-			3,101			(1	)		4,036
Total operating income		12,947		958		4,905			(634	)		18,176		12,249		898			3,792			(278	)		16,661
Expenses:
Interest expense		2,272		-		551			(402	)		2,421		2,661		-			311			(249	)		2,723
Salaries and employee benefits		3,796		528		3,033			-			7,357		3,661		609			3,046			-			7,316
Provision for loan losses		792		-		-			-			792		454		-			-			-			454
Other		3,624		318		2,247			(232	)		5,957		3,613		297			973			(29	)		4,854
Total operating expenses		10,484		846		5,831			(634	)		16,527		10,389		906			4,330			(278	)		15,347
Income (loss) before income taxes and non-controlling interest		2,463		112		(926	)		-			1,649		1,860		(8	)		(538	)		-			1,314
Income tax expense (benefit)		313		103		-			-			416		322		(5	)		-			-			317
Net Income (loss)		2,150		9		(926	)		-			1,233		1,538		(3	)		(538	)		-			997
Non-controlling interest in loss of consolidated subsidiary		-		-		349			-			349							230			-			230
Net income (loss) attributable to Middleburg Financial Corporation	$	2,150	$	9	$	(577	)	$	-		$	1,582	$	1,538	$	(3	)	$	(308	)	$	-		$	1,227
Total assets	$	1,179,087	$	12,241	$	90,128		$	(78,245	)	$	1,203,211	$	1,071,689	$	11,981		$	44,718		$	(44,099	)	$	1,084,289
Capital expenditures	$	204	$	-	$	-		$	-		$	204	$	250	$	3		$	-		$	-		$	253
Goodwill and other intangibles	$	-	$	4,279	$	1,867		$	-		$	6,146	$	-	$	4,449		$	1,867		$	-		$	6,316