MIDDLEBURG, Va., Jan. 28, 2016 /PRNewswire/ -- Middleburg Financial Corporation (the "Company") (Nasdaq: MBRG), today announced net income of $781,000, or $0.11 per diluted share, for the quarter ended December 31, 2015 and $7.83 million, or $1.09 per diluted share, for the full year 2015.
The net income in the fourth quarter was impacted by the previously announced impairment charge of $3.0 million recognized during the quarter. The impairment related to a loan participation totaling $4.0 million secured by receivables and inventory. Excluding this charge for the quarter, there would have been no provision for loan losses, and salary and employee benefits expense and tax expense would have been $4.27 million and $769,000, respectively, resulting in net income of $2.22 million or $0.31 per diluted share. Excluding this charge for the full year 2015, there would have been a recovery of provision for loan losses of $407,000, and salary and employee benefits expense and tax expense would have been $18.93 million and $3.28 million, respectively, resulting in net income of $9.27 million or $1.29 per diluted share for the full year 2015. This would have resulted in an annualized return on average assets ("ROA") of 0.69% and annualized return on average equity ("ROE") of 6.98% for the quarter. For the full year 2015, ROA would have been 0.74% and ROE of 7.40%. These effects on net income and related ROA and ROE ratios are non-GAAP measures of profitability.
Gary R. Shook, President and CEO commented: "We were pleased with the positive momentum in our overall performance metrics for 2015. Robust loan and deposit growth and a strong loan pipeline combined with good expense control have built the foundation for improvements in 2016. While we were disappointed with the $3.0 million impairment charge on a loan participation, we were gratified that the net income for the full year 2015 increased compared to the previous year. Furthermore, the performance in 2015 benefited from record net income of nearly $1.0 million from our wealth management subsidiary, Middleburg Investment Group.
As we turn our attention to 2016 we will continue our focus on improving net interest margin and maintaining the asset sensitivity of the balance sheet. The balance sheet is positioned well for an increase in rates.
We have been pleased with the success of the stock repurchase program that was launched in the fourth quarter of 2015. As of December 31, 2015, the Company had repurchased 77,500 shares of common stock. It is our strong belief that judicious open market purchases of stock coupled with a strong focus on dividends will further enhance shareholder value as does our commitment to delivering robust financial performance."
Fourth Quarter 2015 Highlights:
-- Net income was $781,000 or $0.11 per diluted share in the fourth quarter
of 2015 compared to $1.63 million or $0.23 per diluted share for the
same period in 2014. Net income for the full year 2015 increased to
$7.83 million or $1.09 per diluted share compared to $7.58 million or
$1.06 per diluted share for the full year 2014.
-- Net interest margin decreased to 3.17% in the fourth quarter of 2015,
lower by 11 basis points ("bp") compared to the previous quarter and
lower by 14 bp compared to the same period in 2014. Net interest margin
for the full year 2015 was 3.27%.
-- Cost of funds was flat at 37 bp compared to the previous quarter and was
6 bp lower than the same period in 2014.
-- Total revenue increased to $12.06 million, higher by 0.42% compared to
the previous quarter and an increase of 3.42% compared to the same
period in 2014.
-- Net interest income decreased to $9.47 million, lower by 1.95% compared
to the previous quarter and 1.67% higher than the same period in 2014.
Net interest income was $38.07 million for the full year 2015,
relatively unchanged compared to net interest income reported for the
full year 2014.
-- Non-interest income increased by 10.15% compared to the previous quarter
and was higher by 10.34% compared to the same period in 2014.
-- Non-interest expense decreased to $8.37 million, lower by 9.70% compared
to the previous quarter and lower by 11.13% compared to the same period
in 2014. Non-interest expense for the full year 2015 fell by 13.28%
compared to the full year 2014.
-- The efficiency ratio improved to 67.21%, compared to 73.30% for the
previous quarter and 77.53% for the same period in 2014. The efficiency
ratio for the full year 2015 was 70.86% compared to 75.10% for the full
year 2014.
-- Total assets increased to $1.29 billion, higher by 5.89% since December
31, 2014.
-- Total deposits were $1.04 billion, an increase of 5.23% since December
31, 2014.
-- Loans held-for-investment increased by 6.73% to $805.68 million on
December 31, 2015 compared to $754.85 million on December 31, 2014.
-- The allowance for loan losses was 1.37% of total loans compared to 1.46%
for the previous quarter and 1.56% at December 31, 2014.
-- Capital ratios continue to be strong: Total Risk-Based Capital Ratio of
17.52%, Tier 1 Risk-Based Capital Ratio of 16.27%, Common Equity Tier 1
Ratio of 15.61% and Tier 1 Leverage Ratio of 9.59% at December 31, 2015.
TOTAL REVENUE
Total revenue, computed as net interest income plus non-interest income, was $12.06 million for the fourth quarter of 2015, higher by 0.42% compared to the previous quarter and an increase of 3.42% compared to the same period in 2014. Total revenue for the full year 2015 was $48.46 million while revenue for all of 2014 was $52.87 million. Total revenue for 2014 included revenue contributions from Southern Trust Mortgage. The Company sold its 62.3% ownership interest in Southern Trust Mortgage in May of 2014.
Net Interest Income
The Company recorded net interest income of $9.47 million for the fourth quarter of 2015, a decrease of 1.95% compared to the previous quarter and higher by 1.67% compared to the same period in 2014. The net interest margin in the fourth quarter of 2015 was 3.17%, lower by 11 bp compared to the previous quarter and 14 bp lower than the same period in 2014.
The following factors contributed to the changes in net interest margin during the fourth quarter of 2015, compared to the previous quarter:
-- Yields on earning assets decreased by 11 bp compared to the previous
quarter, primarily due to a 19 bp decrease in yields on loans.
-- Yields on investment securities decreased by 3 bp compared to the
previous quarter as a result of lower yields on securities added to the
investment portfolio.
-- Yields on loans decreased by 19 bp compared to the previous quarter as a
result of payoff activity, lower yields on loans added to the balance
sheet and reversal of accrued interest. The accrued interest that was
reversed represented 9 bp of loan yield.
-- Cost of funds was 37 bp, unchanged compared to the previous quarter.
The following table analyzes changes in net interest income comparing the fourth quarter of 2015 to the previous quarter and to the quarter ended December 31, 2014.
Quarters Ended (Annualized)
--------------------------
(Dollars in thousands) December 31, 2015 vs. September 30, 2015 December 31, 2015 vs. December 31, 2014
Increase (Decrease) Due to Changes in: Increase (Decrease) Due to Changes in:
-------------------------------------- --------------------------------------
Volume Rate Total Volume Rate Total
------ ---- ----- ------ ---- -----
Earning Assets:
Securities:
Taxable $281 $(75) $206 $970 $97 $1,067
Tax-exempt 33 3 36 (126) (65) (191)
Loans:
Taxable 630 (1,554) (924) 3,912 (4,634) (722)
Tax-exempt - - - - - -
Interest on deposits with other banks and federal
funds sold (50) 46 (4) (58) (5) (63)
--- --- --- --- --- ---
Total earning assets $894 $(1,580) $(686) $4,698 $(4,607) $91
---- ------- ----- ------ ------- ---
Interest-Bearing Liabilities:
Checking $4 $ - $4 $26 $30 $56
Regular savings 11 1 12 23 - 23
Money market savings 26 6 32 15 9 24
Time deposits:
$100,000 and over (45) 37 (8) 139 (36) 103
Under $100,000 (15) (5) (20) (247) (162) (409)
--- --- --- ---- ---- ----
Total interest-bearing deposits $(19) $39 $20 $(44) $(159) $(203)
Securities sold under agreements to repurchase - (4) (4) (60) (250) (310)
FHLB borrowings and other debt (16) 48 32 119 (67) 52
--- --- --- --- --- ---
Total interest-bearing liabilities $(35) $83 $48 $15 $(476) $(461)
---- --- --- --- ----- -----
Change in net interest income $929 $(1,663) $(734) $4,683 $(4,131) $552
==== ======= ===== ====== ======= ====
Comparing the fourth quarter of 2015 to the previous quarter, the table shows the increase in interest income for investments was largely driven by growth in the securities portfolio. We continue to add securities that are less sensitive to prepayments while retaining a balance between fixed and floating rate investments. The decrease in interest income from loans was mostly due to rate as the strong growth in loan balances was offset by lower loan rates. The changes in interest income in the fourth quarter of 2015 compared to the same quarter in 2014 reflected similar factors, namely increased interest income from investments driven by higher securities balances and lower interest income from loans stemming from lower loan rates that more than offset growth in loan balances. Competition for good credits continues to pressure loan rates.
Non-Interest Income
Non-interest income increased by 10.15% compared to the previous quarter and increased by 10.34% compared to the quarter ended December 31, 2014.
-- Total revenue generated by our wealth management group, Middleburg
Investment Group ("MIG") was $1.16 million for the quarter ended
December 31, 2015, relatively unchanged compared to the previous quarter
and higher by 1.58% compared to the same quarter in 2014. Fee income is
based primarily upon the market value of assets under administration
which were $1.93 billion at December 31, 2015 and $1.87 billion at
December 31, 2014.
-- Other operating income was $527,000 for the quarter ended December 31,
2015, an increase of 98.12% compared to the previous quarter and higher
by 102.69% compared to the quarter ended December 31, 2014. Most of the
increase in other operating income during the periods was due to
prepayment penalties from certain government guaranteed securities.
NON-INTEREST EXPENSE
Non-interest expense decreased by 9.70% compared to the previous quarter and by 11.13% compared to the the same period in 2014. Principal categories of non-interest expense that changed were the following:
-- Salaries and employee benefit expenses decreased by 21.99% when compared
to the previous quarter and decreased by 26.55% when compared to the
same period in 2014. The decline in salary and benefit expenses was due
to lower incentive accruals as we aligned compensation to the
achievement of income and growth targets and exercised strong expense
control throughout 2015.
-- Costs related to other real estate owned (OREO) decreased when compared
to the prior quarter and also when compared to the same period in 2014.
In the previous quarter, we recorded a valuation adjustment of $157,500
for one property resulting from an updated appraisal. Additional reasons
for the improvement in OREO expense include an overall decline in
maintenance costs for the properties.
-- Computer expense increased to $801,000 for the current quarter compared
to $524,000 and $485,000 for the quarters ended September 30, 2015 and
December 31, 2014, respectively. The increase in computer operations
expense was primarily related to costs associated with conversion to a
new on-line banking platform in the fourth quarter of 2015.
ASSET QUALITY
Total nonperforming assets increased in 2015 primarily due to the restructuring of two loans that are part of a single relationship totaling $9.93 million. The loans were restructured in the second quarter of 2015 and one of them was downgraded that quarter, which resulted in an increase in accruing Troubled Debt Restructurings ("TDR's"). Accruing TDR's rose to $12.06 million at December 31, 2015 compared to $4.30 million at December 31, 2014. While this loan was restructured and downgraded in 2015, the Company had properly classified the loan as impaired at December 31, 2014, and as a result no additional reserves were recorded in 2015 for this loan. This resulted in total nonperforming assets increasing to $25.51 million at December 31, 2015 compared to $19.45 million at December 31, 2014.
-- Total past due loans declined by 31.33% to $3.33 million as of December
31, 2015 from $4.85 million as of December 31, 2014.
-- Nonaccrual loans declined by 11.67% to $8.78 million as of December 31,
2015 from $9.94 million as of December 31, 2014.
-- Loans that were risk rated either as special mention, substandard,
doubtful, or loss declined by 15.20% to $46.67 million as of December
31, 2015 from $55.03 million as of December 31, 2014.
-- OREO balances declined by 17.43% when compared to year end 2014. Changes
in OREO include the sale of properties totaling $1.04 million, new
foreclosures of $1.20 million and transfers of $855,000 to the Company's
fixed assets to be used as part of the Bank's operations.
In an ongoing effort to improve the credit quality of the balance sheet, the Company also sold $1.02 million of nonperforming loans in the second quarter of 2015.
The Company reduced its allowance for loan and lease losses ("ALLL") to $11.05 million or 1.37% of total loans at December 31, 2015 compared to $11.79 million or 1.56% of total loans at December 31, 2014. The provision for loan losses increased to $2.7 million in the fourth quarter of 2015 compared to a recovery of provision of $432,000 in the previous quarter and a provision of $450,000 for the same period in 2014. The provision is based on the Company's methodology for determining the allowance for loan and lease losses.
CONSOLIDATED ASSETS
Total consolidated assets at December 31, 2015 were $1.29 billion, higher by 5.89% since December 31, 2014. Changes in major asset categories were as follows:
-- Cash balances and deposits with other banks decreased by $15.79 million
compared to December 31, 2014.
-- The Company deployed some of its excess liquidity into growing its
securities portfolio which increased by $29.02 million compared to
December 31, 2014.
-- Loans held-for-investment grew to $805.68 million as of December 31,
2015 compared to $754.85 million on December 31, 2014, an increase of
$50.84 million from December 31, 2014 and a growth rate of 6.73% for
2015.
-- Other assets increased $4.87 million compared to December 31, 2014,
primarily due to a $3.0 million investment in low income housing tax
credit funds.
CONSOLIDATED LIABILITIES
Total consolidated liabilities at December 31, 2015 were $1.17 billion, an increase of 6.40% compared to December 31, 2014. Deposit growth continues to be strong with total deposits increasing by $51.72 million from December 31, 2014 to $1.04 billion as of December 31, 2015. Federal Home Loan Bank ("FHLB") advances increased by $30.00 million from December 31, 2014 to $85.00 million at December 31, 2015. Most of the growth in FHLB advances occurred in the fourth quarter of 2015.
SHAREHOLDERS' EQUITY AND CAPITAL
Shareholders' equity at December 31, 2015 was $123.55 million, compared to $122.03 million at December 31, 2014. Retained earnings at December 31, 2015 were $60.39 million compared to $55.85 million at December 31, 2014. On September 15, 2015, the Company's Board of Directors authorized the repurchase of up to $10 million of the Company's common stock, or approximately 8% of the Company's outstanding shares. The repurchase program was effective immediately and runs through December 31, 2017. This program replaces the previous repurchase program adopted in 1999, pursuant to which the Company had 24,084 shares remaining eligible for repurchase. As of December 31, 2015, the Company had repurchased 77,500 shares, totaling $1.42 million, for an average price of $18.37. The book value of the Company's common stock at December 31, 2015 was $17.44 per share versus $17.11 per share at December 31, 2014.
The Company's capital ratios remain well above regulatory minimum capital ratios as of December 31, 2015:
-- Tier 1 Leverage ratio was 9.59%, 5.59% over the regulatory minimum of
4.00% to be well capitalized.
-- Common Equity Tier 1 Ratio was 15.61%, 8.61% over the regulatory minimum
of 7.00% to be well capitalized.
-- Tier 1 Risk-Based Capital Ratio was 16.27%, 7.77% over the regulatory
minimum of 8.50% to be well capitalized.
-- Total Risk Based Capital Ratio was 17.52%, 7.02% over the regulatory
minimum of 10.50% to be well capitalized .
Caution about Forward Looking Statements
Certain information contained in this discussion may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to the Company's future operations and are generally identified by phrases such as "the Company expects," "the Company believes" or words of similar import. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. For details on factors that could affect expectations, see the risk factors and other cautionary language included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, and other filings with the Securities and Exchange Commission.
About Middleburg Financial Corporation
Middleburg Financial Corporation is headquartered in Middleburg, Virginia and has two wholly owned subsidiaries, Middleburg Bank and Middleburg Investment Group, Inc. Middleburg Bank serves communities in Virginia with financial centers in Ashburn, Gainesville, Leesburg, Marshall, Middleburg, Purcellville, Reston, Richmond, Warrenton and Williamsburg. Middleburg Investment Group owns Middleburg Trust Company, which is headquartered in Richmond, Virginia with offices in Middleburg, Alexandria and Williamsburg.
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except for share and per share data)
(Unaudited)
----------
December 31, September 30, December 31,
2015 2015 2014
---- ---- ----
ASSETS
Cash and due from banks $5,489 $6,498 $7,396
Interest bearing deposits with
other banks 33,739 33,281 47,626
------ ------ ------
Total cash and cash equivalents 39,228 39,779 55,022
Securities held to maturity,
fair value of $4,163, $1,375
and $1,397, 4,207 1,500 1,500
respectively
Securities available for sale,
at fair value 374,571 372,779 348,263
Restricted securities, at cost 6,411 5,349 5,279
Loans, net of allowance for loan
losses of $11,046, $11,400 and
$11,786, 794,635 769,467 743,060
respectively
Premises and equipment, net 19,531 19,787 18,104
Goodwill and identified
intangibles, net 3,636 3,679 3,807
Other real estate owned, net of
valuation allowance 3,345 3,871 4,051
Bank owned life insurance 23,273 23,107 22,617
Accrued interest receivable and
other assets 26,026 21,972 21,154
------ ------ ------
TOTAL ASSETS $1,294,863 $1,261,290 $1,222,857
========== ========== ==========
LIABILITIES
Deposits:
Non-interest bearing demand
deposits $235,897 $242,890 $216,912
Savings and interest bearing
demand deposits 560,328 539,972 523,230
Time deposits 244,575 249,491 248,938
------- ------- -------
Total deposits 1,040,800 1,032,353 989,080
Securities sold under agreements
to repurchase 26,869 24,468 38,551
Federal Home Loan Bank
borrowings 85,000 60,000 55,000
Subordinated notes 5,155 5,155 5,155
Accrued interest payable and
other liabilities 13,485 12,902 13,037
------ ------ ------
TOTAL LIABILITIES 1,171,309 1,134,878 1,100,823
--------- --------- ---------
Commitments and contingent liabilities
SHAREHOLDERS' EQUITY
Common stock ($2.50 par value;
20,000,000 shares authorized,
7,085,217, 17,330 17,522 17,494
7,162,716 and 7,131,643, issued and
outstanding, respectively)
Capital surplus 44,155 45,224 44,892
Retained earnings 60,392 60,542 55,854
Accumulated other comprehensive
income 1,677 3,124 3,794
----- ----- -----
TOTAL SHAREHOLDERS' EQUITY 123,554 126,412 122,034
------- ------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,294,863 $1,261,290 $1,222,857
========== ========== ==========
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except for per share data)
(Unaudited)
----------
For the Three Months Ended For the Year Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
INTEREST AND DIVIDEND
INCOME
Interest and fees
on loans $7,995 $8,176 $32,479 $33,833
Interest and dividends on
securities
Taxable 1,992 1,728 7,628 6,900
Tax-exempt 449 481 1,803 2,137
Dividends 69 64 265 293
Interest on
deposits with
other banks and
federal funds
sold 22 38 106 162
--- --- --- ---
Total interest
and dividend
income 10,527 10,487 42,281 43,325
------ ------ ------ ------
INTEREST EXPENSE
Interest on
deposits 882 933 3,462 3,889
Interest on
securities sold
under agreements
to repurchase - 79 64 318
Interest on FHLB
borrowings and
other debt 174 160 681 1,036
--- --- --- -----
Total interest
expense 1,056 1,172 4,207 5,243
----- ----- ----- -----
NET INTEREST
INCOME 9,471 9,315 38,074 38,082
Provision for
loan losses 2,700 450 2,293 1,960
----- --- ----- -----
NET INTEREST
INCOME AFTER
PROVISION FOR
LOAN LOSSES 6,771 8,865 35,781 36,122
----- ----- ------ ------
NON-INTEREST INCOME
Service charges
on deposit
accounts 613 606 2,405 2,422
Trust services
income 1,156 1,138 4,785 4,362
Gains (losses) on
sales of loans
held for sale (4) 1 (1) 4,860
Gains on sales of
securities
available for
sale, net 2 45 140 186
Commissions on
investment sales 132 132 547 611
Bank owned life
insurance 167 168 656 662
Gain on sale of
majority
interest in
consolidated
subsidiary - - - 24
Other operating
income 527 260 1,858 1,659
--- --- ----- -----
Total non-
interest income 2,593 2,350 10,390 14,786
----- ----- ------ ------
NON-INTEREST EXPENSE
Salaries and
employee
benefits 3,771 5,134 18,435 22,601
Occupancy and
equipment 1,293 1,336 5,106 6,177
Advertising (44) (65) 288 365
Computer
operations 801 485 2,337 1,893
Other real estate
owned (1) 110 284 256
Other taxes 231 212 915 849
Federal deposit
insurance 203 212 786 899
Other operating
expenses 2,120 1,999 7,475 8,041
----- ----- ----- -----
Total non-
interest expense 8,374 9,423 35,626 41,081
----- ----- ------ ------
Income before
income taxes 990 1,792 10,545 9,827
Income tax
expense 209 162 2,715 2,341
--- --- ----- -----
NET INCOME 781 1,630 7,830 7,486
Net loss
attributable to
non-controlling
interest - - - 98
---
Net income
attributable to
Middleburg
Financial
Corporation $781 $1,630 $7,830 $7,584
==== ====== ====== ======
Earnings per share:
Basic $0.11 $0.23 $1.10 $1.07
Diluted $0.11 $0.23 $1.09 $1.06
Dividends per
common share $0.13 $0.10 $0.46 $0.34
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
Quarterly Summary of Consolidated Statements of Income
(Unaudited, Dollars In thousands, except for per share data)
For the Three Months Ended
--------------------------
December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
---- ---- ---- ---- ----
INTEREST AND DIVIDEND
INCOME
Interest and fees
on loans $7,995 $8,227 $8,014 $8,243 $8,176
Interest and dividends
on securities
Taxable 1,992 1,938 1,792 1,906 1,728
Tax-exempt 449 444 449 461 481
Dividends 69 71 66 59 64
Interest on
deposits with
other banks and
federal 22 23 31 30 38
funds sold
---
Total interest
and dividend
income 10,527 10,703 10,352 10,699 10,487
------ ------ ------ ------ ------
INTEREST EXPENSE
Interest on
deposits 882 877 848 855 933
Interest on
securities sold
under agreements
to - 2 17 45 79
repurchase
Interest on FHLB
borrowings and
other debt 174 165 174 168 160
--- --- --- ---
Total interest
expense 1,056 1,044 1,039 1,068 1,172
----- ----- ----- ----- -----
NET INTEREST
INCOME 9,471 9,659 9,313 9,631 9,315
Provision for
(recovery of)
loan losses 2,700 (432) (425) 450 450
----- ---- ---- ---
NET INTEREST
INCOME AFTER
PROVISION 6,771 10,091 9,738 9,181 8,865
FOR (RECOVERY OF) LOAN LOSSES
---
NON-INTEREST INCOME
Service charges
on deposit
accounts 613 622 612 558 606
Trust services
income 1,156 1,168 1,243 1,218 1,138
Gains (losses) on
sales of loans
held for sale (4) - 3 - 1
Gains on sales of
securities
available for
sale, net 2 - 37 101 45
Commissions on
investment sales 132 132 154 129 132
Bank owned life
insurance 167 166 163 160 168
Other operating
income 527 266 223 842 260
--- ---
Total non-
interest income 2,593 2,354 2,435 3,008 2,350
----- ----- ----- ----- -----
NON-INTEREST EXPENSE
Salaries and
employee
benefits 3,771 4,834 4,982 4,848 5,134
Occupancy and
equipment 1,293 1,248 1,226 1,339 1,336
Advertising (44) 98 101 133 (65)
Computer
operations 801 524 522 490 485
Other real estate
owned (1) 193 25 67 110
Other taxes 231 230 231 223 212
Federal deposit
insurance 203 188 184 211 212
Other operating
expenses 2,120 1,959 1,807 1,589 1,999
----- ----- ----- -----
Total non-
interest expense 8,374 9,274 9,078 8,900 9,423
----- ----- ----- ----- -----
Income before
income taxes 990 3,171 3,095 3,289 1,792
Income tax
expense 209 850 815 841 162
--- ---
NET INCOME $781 $2,321 $2,280 $2,448 $1,630
==== ====== ====== ====== ======
Earnings per share:
Basic $0.11 $0.32 $0.32 $0.34 $0.23
Diluted $0.11 $0.32 $0.32 $0.34 $0.23
Dividends per
common share $0.13 $0.13 $0.10 $0.10 $0.10
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
Selected Financial Data by Quarter
(Unaudited, Dollars in thousands, except for per share data)
December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
---- ---- ---- ---- ----
BALANCE SHEET RATIOS
Loans to deposits 77.41% 75.64% 76.89% 74.60% 76.32%
Average interest-earning
assets to average 136.05% 135.94% 135.72% 136.04% 133.54%
interest-bearing liabilities
INCOME STATEMENT RATIOS
Return on average assets
(ROA) 0.24% 0.73% 0.73% 0.80% 0.53%
Return on average equity
(ROE) 2.45% 7.33% 7.31% 8.01% 5.31%
Net interest margin (1) 3.17% 3.28% 3.24% 3.40% 3.31%
Yield on average earning
assets 3.52% 3.63% 3.59% 3.77% 3.72%
Yield on securities 2.83% 2.86% 2.77% 2.98% 2.87%
Yield on loans 4.01% 4.20% 4.20% 4.45% 4.42%
Cost of funds 0.37% 0.37% 0.38% 0.39% 0.43%
Efficiency ratio (5) 67.21% 73.30% 74.88% 68.35% 77.53%
PER SHARE DATA
Dividends $0.13 $0.13 $0.10 $0.10 $0.10
Book value 17.44 17.65 17.42 17.51 17.11
Tangible book value (4) 16.93 17.13 16.90 16.99 16.58
SHARE PRICE DATA
Closing price $18.48 $17.61 $18.00 $18.30 $18.01
Diluted earnings multiple (2) 16.95 13.76 14.06 13.45 16.99
Book value multiple (3) 1.06 1.00 1.03 1.04 1.05
COMMON STOCK DATA
Outstanding shares at end of
period 7,085,217 7,162,716 7,163,255 7,127,105 7,131,643
Weighted average shares O/S
, basic -QTD 7,152,844 7,162,930 7,145,929 7,127,910 7,127,164
Weighted average shares O/S,
diluted -QTD 7,171,498 7,181,183 7,167,165 7,148,702 7,146,140
Dividend payout ratio 118.18% 40.63% 31.25% 29.41% 43.48%
CAPITAL RATIOS
Capital to assets -common
shareholders 9.54% 10.02% 10.05% 9.86% 9.98%
Leverage ratio 9.59% 9.84% 9.85% 9.76% 9.90%
Common equity tier 1 ratio 15.61% 16.31% 16.35% 16.49% N/A
Tier 1 risk based capital
ratio 16.27% 16.99% 17.04% 17.20% 15.70%
Total risk based capital
ratio 17.52% 18.25% 18.28% 18.45% 16.95%
CREDIT QUALITY
Net charge-offs (recoveries)
to average loans 0.390% (0.002)% (0.04)% 0.03% 0.46%
Total nonperforming loans to
total loans 2.62% 2.71% 2.63% 1.83% 1.89%
Total nonperforming assets to
total assets 1.97% 2.07% 1.99% 1.46% 1.59%
Nonaccrual loans to:
Total loans 1.09% 1.13% 1.04% 1.26% 1.32%
Total assets 0.68% 0.70% 0.64% 0.76% 0.81%
Allowance for loan losses to:
Total loans 1.37% 1.46% 1.54% 1.58% 1.56%
Nonperforming assets 43.30% 43.73% 48.03% 65.23% 60.59%
Nonaccrual loans 125.75% 129.15% 148.53% 124.92% 118.52%
NONPERFORMING ASSETS
Loans delinquent 90+ days and
still accruing $278 $224 $173 $74 $30
Nonaccrual loans 8,784 8,827 8,008 9,625 9,944
Restructured loans (not in
nonaccrual) 12,058 12,106 12,138 4,262 4,295
Other real estate owned 3,345 3,871 3,402 3,402 4,051
Repossessed assets 1,043 1,044 1,044 1,070 1,132
----- ----- ----- ----- -----
Total nonperforming assets $25,508 $26,072 $24,765 $18,433 $19,452
======= ======= ======= ======= =======
(1) The net interest margin is
calculated by dividing tax
equivalent net interest income by
total average earning assets.
Tax equivalent net interest
income is calculated by grossing
up interest income for the
amounts that are non taxable
(i.e., municipal income) then
subtracting interest expense. The
tax rate utilized is 34%. The
Company's net interest margin is
a common measure used by the
financial service industry to
determine how profitably earning
assets are funded. Because the
Company earns non taxable
interest income due to the mix in
its investment and loan
portfolios, net interest income
for the ratio is calculated on a
tax equivalent basis as described
above. This calculation excludes
net securities gains and losses.
(2) The diluted earnings multiple is
calculated by dividing the
period's closing market price per
share by the annualized diluted
earnings per share for the
period. The diluted earnings
multiple is a measure of how much
an investor may be willing to pay
for $1.00 of the Company's
earnings.
(3) The book value multiple (or price
to book ratio) is calculated by
dividing the period's closing
market price per share by the
period's book value per share.
The book value multiple is a
measure used to compare the
Company's market value per share
to its book value per share.
(4) Tangible book value is not a
measurement under accounting
principles generally accepted in
the United States. It is
computed by subtracting
identified intangible assets and
goodwill from total Middleburg
Financial Corporation
shareholders' equity and then
dividing the result by the number
of shares of common stock issued
and outstanding at the end of the
accounting period.
(5) The efficiency ratio is not a
measurement under accounting
principles generally accepted in
the United States. It is
calculated by dividing non-
interest expense (adjusted for
amortization of intangibles,
other real estate expenses, and
non-recurring one-time charges)
by the sum of tax equivalent net
interest income and non-interest
income excluding gains and losses
on the investment portfolio. The
tax rate utilized in calculating
tax equivalent amounts is 34%.
The Company calculates and
reviews this ratio as a means of
evaluating operational
efficiency.
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
Average Balances, Income and Expenses, Yields and Rates
(Unaudited)
Three months ended December 31,
-------------------------------
2015 2014
---- ----
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate (2) Balance Expense Rate (2)
------- ------- ------- ------- ------- -------
(Dollars in thousands)
Assets:
Securities:
Taxable $332,163 $2,061 2.46% $292,726 $1,792 2.43%
Tax-exempt (1) 51,884 681 5.21% 54,275 729 5.32%
------ --- ------ ---
Total securities $384,047 $2,742 2.83% $347,001 $2,521 2.88%
Loans:
Taxable $791,590 $7,989 4.00% $733,090 $8,171 4.42%
Tax-exempt (1) 578 8 5.49% 617 8 5.14%
--- --- --- ---
Total loans (3) $792,168 $7,997 4.01% $733,707 $8,179 4.42%
Interest on
deposits with
other banks and 38,348 22 0.23% 63,905 38 0.24%
federal funds sold
Total earning
assets $1,214,563 $10,761 3.52% $1,144,613 $10,738 3.72%
Less: allowance for
loan losses (11,733) (11,482)
Total nonearning
assets 79,695 76,475
------ ------
Total assets $1,282,525 $1,209,606
========== ==========
Liabilities:
Interest-bearing deposits:
Checking $345,525 $177 0.20% $332,419 $163 0.19%
Regular savings 125,947 59 0.19% 113,316 53 0.19%
Money market
savings 78,918 40 0.20% 71,222 34 0.19%
Time deposits:
$100,000 and over 144,440 320 0.88% 128,478 294 0.91%
Under $100,000 102,586 286 1.11% 123,814 389 1.25%
------- --- ------- ---
Total interest-
bearing deposits $797,416 $882 0.44% $769,249 $933 0.48%
Securities sold
under agreements
to 28,663 - - % 37,541 79 0.83%
repurchase
FHLB borrowings and
other debt 66,677 174 1.03% 50,372 160 1.26%
------ --- ------ ---
Total interest-
bearing
liabilities $892,756 $1,056 0.47% $857,162 $1,172 0.54%
Non-interest bearing liabilities:
Demand deposits 248,536 216,402
Other liabilities 15,016 14,359
------ ------
Total liabilities $1,156,308 $1,087,923
---------- ----------
Non-controlling
interest - -
Shareholders'
equity 126,217 121,683
------- -------
Total liabilities
and shareholders'
equity $1,282,525 $1,209,606
========== ==========
Net interest income $9,705 $9,566
====== ======
Interest rate spread 3.05% 3.18%
Cost of Funds 0.37% 0.43%
Interest expense as a percent of
average 0.34% 0.41%
earning assets
Net interest margin 3.17% 3.31%
(1) Income and yields are
reported on tax equivalent
basis assuming a federal
tax rate of 34%.
(2) All yields and rates have
been annualized on a 365
day year.
(3) Total average loans include
loans on non-accrual
status.
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
Average Balances, Income and Expenses, Yields and Rates
(Unaudited)
Year ended December 31,
-----------------------
2015 2014
---- ----
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate (2) Balance Expense Rate (2)
------- ------- ------- ------- ------- -------
(Dollars in thousands)
Assets:
Securities:
Taxable $319,705 $7,893 2.47% $282,198 $7,193 2.55%
Tax-exempt (1) 51,732 2,732 5.28% 56,729 3,238 5.71%
------ ----- ------ -----
Total securities $371,437 $10,625 2.86% $338,927 $10,431 3.08%
Loans:
Taxable $771,207 $32,457 4.21% $741,028 $33,810 4.56%
Tax-exempt (1) 609 33 5.42% 643 34 5.29%
--- --- --- ---
Total loans (3) $771,816 $32,490 4.21% $741,671 $33,844 4.56%
Interest on
deposits with
other banks and 49,201 106 0.22% 71,275 162 0.23%
federal funds sold
Total earning
assets $1,192,454 $43,221 3.62% $1,151,873 $44,437 3.86%
Less: allowance for
loan losses (11,853) (12,241)
Total nonearning
assets 77,456 77,834
------ ------
Total assets $1,258,057 $1,217,466
========== ==========
Liabilities:
Interest-bearing deposits:
Checking $343,026 $693 0.20% $339,996 $651 0.19%
Regular savings 119,989 223 0.19% 113,363 212 0.19%
Money market
savings 70,239 136 0.19% 73,232 139 0.19%
Time deposits:
$100,000 and over 138,860 1,220 0.88% 125,904 1,232 0.98%
Under $100,000 106,023 1,190 1.12% 129,021 1,655 1.28%
------- ----- ------- -----
Total interest-
bearing deposits $778,137 $3,462 0.44% $781,516 $3,889 0.50%
Securities sold
under agreements
to 30,095 64 0.21% 36,899 318 0.86%
repurchase
FHLB borrowings and
other debt 68,977 681 0.99% 70,141 1,036 1.48%
Federal funds
purchased 1 - - % 1 - - %
--- --- --- ---
Total interest-
bearing
liabilities $877,210 $4,207 0.48% $888,557 $5,243 0.59%
Non-interest bearing liabilities:
Demand deposits 241,996 199,273
Other liabilities 13,602 11,059
------ ------
Total liabilities $1,132,808 $1,098,889
---------- ----------
Non-controlling
interest - -
Shareholders'
equity 125,249 118,577
------- -------
Total liabilities
and shareholders'
equity $1,258,057 $1,217,466
========== ==========
Net interest income $39,014 $39,194
======= =======
Interest rate spread 3.14% 3.27%
Cost of Funds 0.38% 0.48%
Interest expense as a percent of
average 0.35% 0.46%
earning assets
Net interest margin 3.27% 3.40%
(1) Income and yields are
reported on tax equivalent
basis assuming a federal
tax rate of 34%.
(2) All yields and rates have
been annualized on a 365
day year.
(3) Total average loans include
loans on non-accrual
status.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/middleburg-financial-corporation-announces-fourth-quarter-2015-results-300211647.html
SOURCE Middleburg Financial Corporation
