Segment Reporting

3 Months Ended

Mar. 31, 2013

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 Investment Group.

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 March 31, 2013 and 2012, respectively.

	For the three months ended														For the three months ended
	March 31, 2013														March 31, 2012
	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	$	11,088		$	4	$	469		$	(349	)	$	11,212		$	11,854	$	2	$	738		$	(402	)	$	12,192
Trust and investment fee income	—			1,095		—			(41		)	1,054			—		956		—			(35		)	921
Other income	844			74		4,112			(156		)	4,874			1,093		—		4,167			(197		)	5,063
Total operating income	11,932			1,173		4,581			(546		)	17,140			12,947		958		4,905			(634		)	18,176
Expenses:
Interest expense	1,748			—		378			(349		)	1,777			2,272		—		551			(402		)	2,421
Salaries and employee benefits	4,185			615		2,999			—			7,799			3,796		528		3,033			—			7,357
Provision for (recovery of) loan losses	(189		)	—		1			—			(188		)	792		—		—			—			792
Other	4,595			350		1,381			(197		)	6,129			3,624		318		2,247			(232		)	5,957
Total operating expenses	10,339			965		4,759			(546		)	15,517			10,484		846		5,831			(634		)	16,527
Income (loss) before income taxes and non-controlling interest	1,593			208		(178		)	—			1,623			2,463		112		(926		)	—			1,649
Income tax expense	277			86		—			—			363			313		103		—			—			416
Net Income (loss)	1,316			122		(178		)	—			1,260			2,150		9		(926		)	—			1,233
Non-controlling interest in loss of consolidated subsidiary	—			—		67			—			67			—		—		349			—			349
Net income (loss) attributable to Middleburg Financial Corporation	$	1,316		$	122	$	(111	)	$	—		$	1,327		$	2,150	$	9	$	(577	)	$	—		$	1,582
Total assets	$	1,208,288		$	6,232	$	59,623		$	(60,387	)	$	1,213,756		$	1,179,087	$	6,239	$	90,128		$	(72,243	)	$	1,203,211
Capital expenditures	$	248		$	—	$	—		$	—		$	248		$	204	$	—	$	—		$	—		$	204
Goodwill and other intangibles	$	—		$	4,108	$	1,867		$	—		$	5,975		$	—	$	4,279	$	1,867		$	—		$	6,146