Segment Reporting

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment Reporting

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 June 30, 2013 and 2012, respectively.

	For the three months ended													For the three months ended
	June 30, 2013													June 30, 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	$	10,904	$	3	$	409		$	(324	)	$	10,992		$	11,721	$	3	$	699		$	(459	)	$	11,964
Trust and investment fee income	—		1,162		—			(37		)	1,125			—		1,285		—			(34		)	1,251
Other income	1,341		—		4,691			(77		)	5,955			822		—		5,246			(148		)	5,920
Total operating income	12,245		1,165		5,100			(438		)	18,072			12,543		1,288		5,945			(641		)	19,135
Expenses:
Interest expense	1,634		—		341			(324		)	1,651			2,219		—		546			(459		)	2,306
Salaries and employee benefits	4,116		615		2,961			—			7,692			3,877		552		3,077			—			7,506
Provision for (recovery of) loan losses	180		—		4			—			184			766		—		(36		)	—			730
Other	4,096		337		1,097			(114		)	5,416			4,420		324		1,243			(182		)	5,805
Total operating expenses	10,026		952		4,403			(438		)	14,943			11,282		876		4,830			(641		)	16,347
Income before income taxes and non-controlling interest	2,219		213		697			—			3,129			1,261		412		1,115			—			2,788
Income tax expense	686		88		—			—			774			493		105		—			—			598
Net Income	1,533		125		697			—			2,355			768		307		1,115			—			2,190
Non-controlling interest in income of consolidated subsidiary	—		—		(262		)	—			(262		)	—		—		(421		)	—			(421		)
Net income attributable to Middleburg Financial Corporation	$	1,533	$	125	$	435		$	—		$	2,093		$	768	$	307	$	694		$	—		$	1,769
Total assets	$	1,203,277	$	6,355	$	75,257		$	(67,689	)	$	1,217,200		$	1,201,833	$	12,380	$	76,990		$	(72,353	)	$	1,218,850
Capital expenditures	203		—		9			—			$	212		$	330	$	—	$	—		$	—		$	330
Goodwill and other intangibles	$	—	$	4,065	$	1,867		$	—		$	5,932		$	—	$	4,236	$	1,867		$	—		$	6,103

The following table presents segment information for the six months endedJune 30, 2013 and 2012, respectively.

	For the six months ended														For the six months ended
	June 30, 2013														June 30, 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	$	21,992		$	7	$	878		$	(673	)	$	22,204		$	23,575	$	5	$	1,437		$	(861	)	$	24,156
Trust and investment fee income	—			2,257		—			(78		)	2,179			—		2,241		—			(69		)	2,172
Other income	2,185			74		8,803			(233		)	10,829			1,915		—		9,413			(345		)	10,983
Total operating income	24,177			2,338		9,681			(984		)	35,212			25,490		2,246		10,850			(1,275		)	37,311
Expenses:
Interest expense	3,382			—		719			(673		)	3,428			4,491		—		1,097			(861		)	4,727
Salaries and employee benefits	8,302			1,230		5,960			—			15,492			7,673		1,080		6,110			—			14,863
Provision for (recovery of) loan losses	(9		)	—		5			—			(4		)	1,558		—		(36		)	—			1,522
Other	8,690			687		2,478			(311		)	11,544			8,044		642		3,490			(414		)	11,762
Total operating expenses	20,365			1,917		9,162			(984		)	30,460			21,766		1,722		10,661			(1,275		)	32,874
Income before income taxes and non-controlling interest	3,812			421		519			—			4,752			3,724		524		189			—			4,437
Income tax expense	963			174		—			—			1,137			806		208		—			—			1,014
Net Income	2,849			247		519			—			3,615			2,918		316		189			—			3,423
Non-controlling interest in income of consolidated subsidiary	—			—		(195		)	—			(195		)	—		—		(72		)	—			(72		)
Net income attributable to Middleburg Financial Corporation	$	2,849		$	247	$	324		$	—		$	3,420		$	2,918	$	316	$	117		$	—		$	3,351
Total assets	$	1,203,277		$	6,355	$	75,257		$	(67,689	)	$	1,217,200		$	1,201,833	$	12,380	$	76,990		$	(72,353	)	$	1,218,850
Capital expenditures	$	451		$	—	$	9		$	—		$	460		$	534	$	—	$	—		$	—		$	534
Goodwill and other intangibles	$	—		$	4,065	$	1,867		$	—		$	5,932		$	—	$	4,236	$	1,867		$	—		$	6,103