Segment Reporting

6 Months Ended

Jun. 30, 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 and accounting 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 June 30, 2012 and 2011, respectively.

	For the three months ended													For the three months ended
	June 30, 2012													June 30, 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	$	11,721	$	3	$	721		$	(459	)	$	11,986		$	11,808	$	3	$	634		$	(290	)	$	12,155
Trust and investment fee income		-		1,285		-			(34	)		1,251			-		1,125		-			(142	)		983
Other income		822		-		5,224			(148	)		5,898			675		195		4,067			168			5,105
Total operating income		12,543		1,288		5,945			(641	)		19,135			12,483		1,323		4,701			(264	)		18,243
Expenses:
Interest expense		2,219		-		546			(459	)		2,306			2,706		-		343			(289	)		2,760
Salaries and employee benefits		3,877		552		3,077			-			7,506			3,265		933		3,615			-			7,813
Provision for loan losses		766		-		(36	)		-			730			1,087		-		-			-			1,087
Other		4,420		324		1,243			(182	)		5,805			3,772		343		1,062			25			5,202
Total operating expenses		11,282		876		4,830			(641	)		16,347			10,830		1,276		5,020			(264	)		16,862
Income (loss) before income taxes and non-controlling interest		1,261		412		1,115			-			2,788			1,653		47		(319	)		-			1,381
Income tax expense		493		105		-			-			598			283		20		-			-			303
Net Income (loss)		768		307		1,115			-			2,190			1,370		27		(319	)		-			1,078
Non-controlling interest in (income) loss of consolidated subsidiary		-		-		(421	)		-			(421	)						121			-			121
Net income (loss) attributable to Middleburg Financial Corporation	$	768	$	307	$	694		$	-		$	1,769		$	1,370	$	27	$	(198	)	$	-		$	1,199
Total assets	$	1,201,833	$	12,380	$	76,990		$	(72,353	)	$	1,218,850		$	1,130,366	$	15,694	$	72,652		$	(74,045	)	$	1,144,667
Capital expenditures	$	330	$	-	$	-		$	-		$	330		$	441	$	-	$	-		$	-		$	441
Goodwill and other intangibles	$	-	$	4,236	$	1,867		$	-		$	6,103		$	-	$	4,419	$	1,867		$	-		$	6,286

The following table presents segment information for the six months ended June 30, 2012 and 2011, respectively.

	For the six months ended													For the six months ended
	June 30, 2012													June 30, 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	$	23,575	$	5	$	1,608		$	(861	)	$	24,327		$	23,120	$	6	$	1,325		$	(538	)	$	23,913
Trust and investment fee income		-		2,241		-			(69	)		2,172			-		1,850		-			-			1,850
Other income		1,915		-		9,242			(345	)		10,812			1,611		365		7,168			(1	)		9,143
Total operating income		25,490		2,246		10,850			(1,275	)		37,311			24,731		2,221		8,493			(539	)		34,906
Expenses:
Interest expense		4,491		-		1,097			(861	)		4,727			5,367		-		654			(538	)		5,483
Salaries and employee benefits		7,673		1,080		6,110			-			14,863			6,926		1,542		6,661			-			15,129
Provision for loan losses		1,558		-		(36	)		-			1,522			1,541		-		-			-			1,541
Other		8,044		642		3,490			(414	)		11,762			7,386		641		2,034			(1	)		10,060
Total operating expenses		21,766		1,722		10,661			(1,275	)		32,874			21,220		2,183		9,349			(539	)		32,213
Income (loss) before income taxes and non-controlling interest		3,724		524		189			-			4,437			3,511		38		(856	)		-			2,693
Income tax expense		806		208		-			-			1,014			605		13		-			-			618
Net Income (loss)		2,918		316		189			-			3,423			2,906		25		(856	)		-			2,075
Non-controlling interest in (income)  loss of consolidated subsidiary		-		-		(72	)		-			(72	)		-		-		351			-			351
Net income (loss) attributable to Middleburg Financial Corporation	$	2,918	$	316	$	117		$	-		$	3,351		$	2,906	$	25	$	(505	)	$	-		$	2,426
Total assets	$	1,201,833	$	12,380	$	76,990		$	(72,353	)	$	1,218,850		$	1,130,366	$	15,694	$	72,652		$	(74,045	)	$	1,144,667
Capital expenditures	$	534	$	-	$	-		$	-		$	534		$	691	$	3	$	-		$	-		$	694
Goodwill and other intangibles	$	-	$	4,236	$	1,867		$	-		$	6,103		$	-	$	4,419	$	1,867		$	-		$	6,286