MIDDLEBURG FINANCIAL CORP - FORM 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 6, 2014

___________

MIDDLEBURG FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Virginia (State or other jurisdiction of incorporation)	0-24159 (Commission File Number)		54-1696103 (I.R.S. Employer Identification No.)

111 West Washington Street Middleburg, Virginia (Address of principal executive offices)		20117 (Zip Code)

Registrant’s telephone number, including area code: (703) 777-6327

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On January 31, 2014, Middleburg Financial Corporation (the “Company”) furnished a Current Report on Form 8-K that included a press release announcing the Company’s financial results for the fourth quarter and year ended December 31, 2013. This Form 8-K/A is being filed to revise financial results included with such Form 8-K.

The previously-reported financial results for the fourth quarter and year ended December 31, 2013 have been revised to include a non-cash charge of $500,000 related to the impairment of goodwill associated with Southern Trust Mortgage. In light of declining profitability in the mortgage business and increasing regulatory burdens, the Company is evaluating a range of options for its interest in Southern Trust Mortgage. Due in part to these factors and in connection with the preparation of its financial statements to be included in its Annual Report on Form 10-K, the Company determined that this impairment charge was necessary to reflect the diminished fair value of Southern Trust Mortgage.

The impact of the charge on net income for the fourth quarter and year ended December 31, 2013 is $330,000. This is a non-cash charge and is not expected to affect the Company’s ongoing operations. The Company’s revised net income is $1.12 million, or $0.16 per diluted share, for the quarter ended December 31, 2013 and $6.15 million, or $0.87 per diluted share, for the full year 2013. The book value per share of the Company’s common stock declined $0.05 as a result of the revision to $15.90 per share at December 31, 2013. The impairment will have minimal impact on the Company’s capital ratios.

Set forth below are revised Consolidated Balance Sheets, Consolidated Statements of Income, Quarterly Summary Statements of Income, Key Statistics, Selected Financial Data by Quarter, Quarterly and Annual Average Balances and Yields on Earning Assets and Liabilities.

MIDDLEBURG FINANCIAL CORPORATION
Consolidated Balance Sheets
(In thousands, except for share and per share data)

		(Unaudited)		(Unaudited)		(Audited)
		December 31,		September 30,		December 31,
		2013		2013		2012
ASSETS
Cash and due from banks		$	6,648	$	9,417	$	7,139
Interest-bearing deposits with other institutions			60,695		53,228		47,276
Total cash and cash equivalents			67,343		62,645		54,415
Securities available for sale			328,423		328,378		319,457
Loans held for sale			33,175		41,855		82,114
Restricted securities, at cost			6,780		7,005		6,990
Loans receivable, net of allowance for loan losses of $13,320, $13,382 and $14,311 respectively			715,160		702,724		695,166
Premises and equipment, net			20,017		20,465		20,587
Goodwill and identified intangibles			5,346		5,889		6,017
Other real estate owned, net of valuation allowance of $398, $603 and $1,707, respectively			3,424		4,530		9,929
Prepaid federal deposit insurance			-		-		3,015
Bank owned life insurance			21,955		16,851		16,484
Accrued interest receivable and other assets			26,130		24,985		22,607

	TOTAL ASSETS	$	1,227,753	$	1,215,327	$	1,236,781

LIABILITIES
Deposits:
Non-interest bearing demand deposits		$	185,577	$	190,680	$	167,137
Savings and interest bearing demand deposits			528,879		495,348		522,740
Time deposits			267,940		272,538		292,023
	Total deposits		982,396		958,566		981,900
Securities sold under agreements to repurchase			34,539		35,005		33,975
Short-term borrowings			-		5,451		11,873
FHLB borrowings			80,000		85,000		77,912
Subordinated notes			5,155		5,155		5,155
Accrued interest payable and other liabilities			10,590		10,967		8,844
Commitments and contingent liabilities			-		-		-
	TOTAL LIABILITIES		1,112,680		1,100,144		1,119,659

SHAREHOLDERS' EQUITY
Common stock ($2.50 par value; 20,000,000 shares authorized,
7,080,591, 7,089,091 and 7,052,554 issued and outstanding,
respectively)			17,403		17,403		17,357
Capital surplus			44,251		44,139		43,869
Retained earnings			50,689		50,063		46,235
Accumulated other comprehensive income			232		833		6,467
Total Middleburg Financial Corporation shareholders' equity			112,575.00		112,438		113,928
Non-controlling interest in consolidated subsidiary			2,498.00		2,745		3,194

TOTAL SHAREHOLDERS' EQUITY			115,073.00		115,183		117,122


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	1,227,753	$	1,215,327	$	1,236,781

MIDDLEBURG FINANCIAL CORPORATION
Consolidated Statements of Income
(In thousands, except for per share data)


	Unaudited					Unaudited
	For the Thee Months Ended					For the Twelve Months Ended
	December 31,					December 31,
	2013		2012			2013			2012
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	8,744	$	9,330		$	35,248		$	37,895
Interest and dividends on securities available for sale
Taxable		1,638		1,432			6,105			6,408
Tax-exempt		638		604			2,555			2,403
Dividends		63		58			232			193
Interest on deposits in other banks		31		36			132			124
Total interest and dividend income		11,114		11,460			44,272			47,023

INTEREST EXPENSE
Interest on deposits		1,094		1,449			4,911			6,916
Interest on securities sold under agreements to
repurchase		82		82			325			332
Interest on short-term borrowings		17		81			123			392
Interest on FHLB borrowings and other debt		311		295			1,208			1,184
Total interest expense		1,504		1,907			6,567			8,824

NET INTEREST INCOME		9,610		9,553			37,705			38,199
Provision for loan losses		110		1,281			109			3,438

NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES		9,500		8,272			37,596			34,761

NONINTEREST INCOME
Service charges on deposit accounts		593		572			2,291			2,197
Trust services income		1,033		923			3,970			3,751
Gains on loans held for sale		3,114		5,926			15,652			21,014
Gains (losses) on securities available for sale, net		22		(7	)		418			445
Total other-than-temporary impairment losses		-		-			-			(46	)
Portion of loss recognized in other
comprehensive income		-		-			-			46
Net impairment losses		-		-			-			-
Commissions on investment sales		107		129			470			518
Fees on mortgages held for sale		-		43			103			186
Bank-owned life insurance		105		96			472			459
Other operating income		431		299			1,163			884
Total noninterest income		5,405		7,981			24,539			29,454

NONINTEREST EXPENSE
Salaries and employees' benefits		7,385		8,278			30,627			30,417
Net occupancy and equipment expense		1,857		1,785			7,269			7,050
Advertising		436		635			1,457			2,034
Computer operations		485		471			1,860			1,572
Other real estate owned		78		55			1,455			2,721
Other taxes		186		202			751			813
Federal deposit insurance expense		139		269			822			1,050
Other operating expenses		3,134		2,103			9,800			8,602
Total noninterest expense		13,700		13,798			54,041			54,259

Income before income taxes		1,205		2,455			8,094			9,956
Income tax expense		303		387			1,931			1,966

NET INCOME		902		2,068			6,163			7,990
Net (income) loss attributable to non-
controlling interest		224		(647	)		(9	)		(1,504	)
Net income attributable to Middleburg
Financial Corporation	$	1,126	$	1,421		$	6,154		$	6,486

Earnings per share:
Basic	$	0.16	$	0.20		$	0.87		$	0.92
Diluted	$	0.16	$	0.20		$	0.87		$	0.92
Dividends per common share	$	0.07	$	0.05		$	0.24		$	0.20

MIDDLEBURG FINANCIAL CORPORATION

Quarterly Summary Statements of Income

(In thousands, except for per share data)


	For the Three Months
	December 31,		September 30,			June 30,			March 31,			December 31,
	2013		2013			2013			2013			2012
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$	8,744	$	8,744		$	8,795		$	8,965		$	9,330
Interest and dividends on securities available for sale
Taxable		1,638		1,468			1,468			1,531			1432
Tax-exempt		638		640			646			630			604
Dividends		63		59			54			56			58
Interest on deposits in other banks		31		43			29			30			36
Total interest and dividend income		11,114		10,954			10,992			11,212			11,460

INTEREST EXPENSE
Interest on deposits		1,094		1,190			1,253			1,373			1449
Interest on securities sold under agreements to
repurchase		82		82			81			80			82
Interest on short-term borrowings		17		59			18			29			81
Interest on long-term debt		311		303			299			295			295
Total interest expense		1,504		1,634			1,651			1,777			1,907

NET INTEREST INCOME		9,610		9,320			9,341			9,435			9,553
Provision for (recovery of) loan losses		110		3			184			(188	)		1281

NET INTEREST INCOME AFTER PROVISION
FOR (RECOVERY OF)LOAN LOSSES		9,500		9,317			9,157			9,623			8,272

NONINTEREST INCOME
Service charges on deposit accounts		593		590			574			534			572
Trust services income		1,033		963			1,014			960			923
Net gains on loans held for sale		3,114		4,162			4,483			3,893			5,926
Net gains on securities available for sale		22		23			326			47			(7	)
Commissions on investment sales		107		159			110			94			129
Fees on mortgages held for sale		-		28			58			17			43
Bank-owned life insurance		105		125			123			120			96
Other operating income		431		78			392			263			299
Total noninterest income		5,405		6,128			7,080			5,928			7,981

NONINTEREST EXPENSE
Salaries and employee benefits		7,385		7,750			7,692			7,799			8,278
Net occupancy and equipment expense		1,857		1,820			1,787			1,805			1,785
Advertising		436		318			435			268			635
Computer operations		485		456			458			461			471
Other real estate owned		78		416			142			820			55
Other taxes		186		186			187			192			202
Federal deposit insurance expense		139		149			270			265			269
Other operating expenses		3,134		2,210			2,137			2,318			2,103
Total noninterest expense		13,700		13,305			13,108			13,928			13,798

Income before income taxes		1,205		2,140			3,129			1,623			2,455
Income tax expense		303		491			774			363			387

NET INCOME		902		1,649			2,355			1,260			2,068
Net (income) loss attributable to non-controlling interest		224		(38	)		(262	)		67			(647	)
Net income attributable to Middleburg
Financial Corporation	$	1,126	$	1,611		$	2,093		$	1,327		$	1,421
		-

MIDDLEBURG FINANCIAL CORPORATION

Key Statistics

(Unaudited, Dollars in thousands, except for per share data)

	For the Three Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
	2013			2013			2013			2013			2012

Net Income	$	1,126		$	1,611		$	2,093		$	1,327		$	1,421
Earnings per share, basic	$	0.16			0.2300		$	0.30		$	0.19		$	0.20
Earnings per share, diluted	$	0.16		$	0.23		$	0.29		$	0.19		$	0.20
Dividend per share	$	0.07		$	0.07		$	0.05		$	0.05		$	0.05

Return on average total assets - QTD		0.37	%		0.52	%		0.69	%		0.44	%		0.46	%
Return on average total equity - QTD		3.92	%		5.71	%		7.25	%		4.71	%		4.96	%
Dividend payout ratio		33.32	%		30.43	%		16.88	%		26.57	%		24.82	%
Non-interest revenue to total revenue (1)		35.89	%		39.58	%		41.96	%		38.40	%		45.54	%

Net interest margin (2)		3.43	%		3.33	%		3.40	%		3.45	%		3.42	%
Yield on average earning assets		3.94	%		3.89	%		3.97	%		4.08	%		4.08	%
Cost of average interest-bearing liabilities		0.66	%		0.71	%		0.72	%		0.78	%		0.82	%
Net interest spread		3.29	%		3.18	%		3.25	%		3.30	%		3.26	%

Non-interest income to average assets (3)		1.77	%		2.00	%		2.23	%		1.93	%		2.62	%
Non-interest expense to average assets (3)		4.50	%		4.33	%		4.34	%		4.57	%		4.53	%

Efficiency ratio - QTD (Tax Equivalent) (4)		88.32	%		81.19	%		78.35	%		80.96	%		76.51	%

(1) Excludes securities gains and losses.
(2) 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.
(3) Ratios are computed by dividing annualized income and expense amounts by quarterly average assets. Excludes securities gains and losses.
(4) 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

Selected Financial Data by Quarter

(Unaudited, Dollars in thousands, except for per share data)

	December 31,			September 30,			June 30,			March 31,			December 31,
	2013			2013			2013			2013			2012

BALANCE SHEET RATIOS
Loans to deposits (including HFS)		77.53	%		79.07	%		80.29	%		79.01	%		80.62	%
Portfolio loans to deposits		74.15	%		74.71	%		73.50	%		73.97	%		72.26	%
Average interest-earning assets to average interest-bearing liabilities		126.87	%		126.23	%		125.09	%		123.60	%		124.17	%
PER SHARE DATA
Dividends	$	0.07		$	0.07		$	0.05		$	0.05		$	0.05
Book value (MFC Shareholders)		15.90			15.86			15.93			16.28			16.15
Tangible book value (3)		15.14			15.03			15.09			15.41			15.3
SHARE PRICE DATA
Closing price	$	18.04		$	19.28		$	19.10		$	19.41		$	17.66
Diluted earnings multiple (1)		20.74			20.96			16.47			25.54			22.08
Book value multiple (2)		1.13			1.21			1.2			1.19			1.09
COMMON STOCK DATA
Outstanding shares at end of period		7,080,591			7,089,091			7,089,598			7,051,587			7,052,554
Weighted average shares O/S , basic - QTD		7,096,260			7,080,244			7,072,587			7,051,009			7,052,554
Weighted average shares O/S, diluted - QTD		7,130,272			7,118,208			7,102,670			7,082,354			7,069,603
CAPITAL RATIOS
Capital to assets - common shareholders		9.17	%		9.25	%		9.28	%		9.46	%		9.21	%
Capital to assets - w/non-controlling interest		9.37	%		9.48	%		9.50	%		9.70	%		9.47	%
Tangible common equity ratio (4)		8.98	%		8.81	%		8.83	%		9.01	%		8.77	%
Leverage ratio		9.43	%		9.36	%		9.32	%		9.11	%		9.10	%
Tier 1 risk based capital ratio		14.64	%		14.58	%		14.15	%		14.35	%		14.09	%
Total risk based capital ratio		15.89	%		15.83	%		15.41	%		15.60	%		15.35	%
CREDIT QUALITY
Net charge-offs to average total loans		0.02	%		0.03	%		0.01	%		0.08	%		0.12	%
Total non-performing loans to total portfolio loans		3.46	%		3.63	%		3.76	%		3.59	%		3.92	%
Total non-performing assets to total assets		2.33	%		2.51	%		2.80	%		2.77	%		3.05	%
Non-accrual loans to:
total portfolio loans		2.71	%		2.87	%		2.88	%		2.80	%		3.05	%
total assets		1.61	%		1.69	%		1.67	%		1.65	%		1.75	%
Allowance for loan losses to:
total portfolio loans		1.83	%		1.87	%		1.93	%		1.89	%		2.02	%
non-performing assets		46.48	%		43.86	%		39.88	%		40.22	%		37.89	%
non-accrual loans		67.44	%		65.20	%		66.82	%		67.48	%		66.06	%
NON-PERFORMING ASSETS
Loans delinquent 90+ days and still accruing	$	808		$	636		$	829		$	812		$	1,044
Non-accrual loans		19,752			20,525			20,376			20,019			21,664
Restructured loans (not in non-accrual)		4,674			4,820			5,366			4,854			5,132
OREO and repossessed assets		3,424			4,530			7,570			7,904			9,929
Total non-performing assets	$	28,658		$	30,511		$	34,141		$	33,589		$	37,769
ALLOWANCE FOR LOAN LOSS SUMMARY
Balance at the beginning of the period	$	13,382		$	13,616		$	13,508		$	14,311		$	13,941
Loans charged off - QTD		241			291			128			721			1,060
Recoveries - QTD		(69	)		(54	)		(52	)		(106	)		(149	)
Net charge-off loans - QTD		172			237			76			615			911
Provision for (recovery of) loan losses		110			3			184			-188			1,281
Balance at the end of the period	$	13,320		$	13,382		$	13,616		$	13,508		$	14,311

(1)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.
(2)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.
(3)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.
(4)The tangible common equity ratio 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 total assets and then dividing the adjusted shareholders’ equity balance by the adjusted total asset balance.

	MIDDLEBURG FINANCIAL CORPORATION
	Average Balances, Income and Expenses, Yields and Rates
	QTD 12/31/2013
	2013								2012
	Average			Income/		Yield/			Average			Income/		Yield/
	Balance			Expense		Rate (2)			Balance			Expense		Rate (3)
	(Dollars in thousands)
Assets :
Securities:
Taxable	$	275,208		$	1,701		2.45	%	$	260,039		$	1,490		2.28	%
Tax-exempt (1)		64,315			966		5.96	%		63,839			915		5.70	%
Total securities	$	339,523		$	2,667		3.12	%	$	323,878		$	2,405		2.95	%
Loans
Taxable	$	759,513		$	8,738		4.56	%	$	767,248		$	9,325		4.84	%
Tax-exempt (1)		655			9		5.45	%		537			8		5.93	%
Total loans (3)	$	760,168		$	8,747		4.57	%	$	767,785		$	9,333		4.84	%
Federal funds sold		-			-		-			-			-		-
Interest on money market investments		-			-		-			-			-		-
Interest bearing deposits in
other financial institutions		51,671			31		0.24	%		56,262			36		0.25	%
Total earning assets	$	1,151,362		$	11,445		3.94	%	$	1,147,925		$	11,774		4.08	%
Less: allowances for credit losses		(13,267	)							(14,112	)
Total nonearning assets		80,994								84,132
Total assets	$	1,219,089							$	1,217,945

Liabilities:
Interest-bearing deposits:
Checking	$	329,590		$	195		0.23	%	$	335,174		$	255		0.30	%
Regular savings		110,443			58		0.21	%		105,625			60		0.23	%
Money market savings		76,197			40		0.21	%		72,503			48		0.26	%
Time deposits:
$100,000 and over		132,994			345		1.03	%		147,214			533		1.44	%
Under $100,000		134,773			456		1.34	%		142,305			553		1.55	%
Total interest-bearing deposits	$	783,997		$	1,094		0.55	%	$	802,821		$	1,449		0.72	%

Short-term borrowings		2,022			16		3.14	%		7,326			81		4.40	%
Securities sold under agreements
to repurchase		36,227			82		0.90	%		34,563			82		0.94	%
FHLB borrowings and other debt		85,264			312		1.45	%		79,752			295		1.47	%
Federal funds purchased		-			-		-			-			-		-
Total interest-bearing liabilities	$	907,510		$	1,504		0.66	%	$	924,462		$	1,907		0.82	%
Non-interest bearing liabilities
Demand deposits		185,409					0.55	%		169,313					0.69	%
Other liabilities		10,022								6,341
Total liabilities	$	1,102,941							$	1,100,116
Non-controlling interest		2,649								3,792
Shareholders' equity		113,499								114,037
Total liabilities and shareholders'
equity	$	1,219,089							$	1,217,945

Net interest income				$	9,941							$	9,867

Interest rate spread							3.29	%							3.26	%
Cost of Funds							0.55	%							0.69	%
Interest expense as a percent of
average earning assets							0.52	%							0.66	%
Net interest margin							3.43	%							3.42	%

(1) Income and yields are reported on a tax equivalent basis assuming a federal tax rate of 34%.

(2) All yields and rates have been annualized on a 365 day year for 2013 and a 366 day year for 2012.

(3) Total average loans include loans on non-accrual status.

	MIDDLEBURG FINANCIAL CORPORATION
	Average Balances, Income and Expenses, Yields and Rates
	Twelve Months Ended December 31
	2013								2012
	Average			Income/		Yield/			Average			Income/		Yield/
	Balance			Expense		Rate (2)			Balance			Expense		Rate (2)
	(Dollars in thousands)
Assets :
Securities:
Taxable	$	268,954		$	6,337		2.36	%	$	262,991		$	6,601		2.51	%
Tax-exempt (1)		66,396			3,870		5.83	%		62,363			3,642		5.84	%
Total securities	$	335,350		$	10,207		3.04	%	$	325,354		$	10,243		3.15	%
Loans
Taxable	$	755,913		$	35,224		4.66	%	$	755,790		$	37,890		5.01	%
Tax-exempt (1)		679			37		5.45	%		135			8		5.93	%
Total loans (3)	$	756,592		$	35,261		4.66	%	$	755,925		$	37,898		5.01	%
Federal funds sold		-			-		0.00	%		-			-		0.00	%
Interest on money market investments		-			-		0.00	%		-			-		0.00	%
Interest bearing deposits in
other financial institutions		56,436			132		0.23	%		54,237			124		0.23	%
Total earning assets	$	1,148,378		$	45,600		3.97	%	$	1,135,516		$	48,265		4.25	%
Less: allowances for credit losses		(13,643	)							(14,830	)
Total nonearning assets		80,813								84,279
Total assets	$	1,215,548							$	1,204,965

Liabilities:
Interest-bearing deposits:
Checking	$	324,171		$	852		0.26	%	$	322,715		$	1,271		0.39	%
Regular savings		110,210			243		0.22	%		105,768			350		0.33	%
Money market savings		75,899			171		0.23	%		64,517			204		0.32	%
Time deposits:
$100,000 and over		139,018			1,671		1.20	%		143,687			2,200		1.53	%
Under $100,000		140,230			1,974		1.41	%		165,703			2,891		1.74	%
Total interest-bearing deposits	$	789,528		$	4,911		0.62	%	$	802,390		$	6,916		0.86	%

Short-term borrowings		3,565			123		3.45	%		8,725			392		4.49	%
Securities sold under agreements
to repurchase		35,536			325		0.91	%		34,177			332		0.97	%
FHLB borrowings and other debt		86,767			1,208		1.39	%		83,654			1,185		1.42	%
Federal Funds Purchased		-			-		0.00	%		1			-		0.00	%
Total interest-bearing liabilities	$	915,396		$	6,567		0.72	%	$	928,947		$	8,825		0.95	%
Non-interest bearing liabilities
Demand Deposits		175,942					0.60	%		156,057
Other liabilities		7,356								6,503
Total liabilities	$	1,098,694							$	1,091,507
Non-controlling interest		2,824								2,828
Shareholders' equity		114,030								110,630
Total liabilities and shareholders'
equity	$	1,215,548							$	1,204,965

Net interest income				$	39,033							$	39,440

Interest rate spread							3.25	%							3.30	%
Cost of Funds							0.60	%							0.81	%
Interest expense as a percent of
average earning assets							0.57	%							0.78	%
Net interest margin							3.40	%							3.47	%

(1) Income and yields are reported on a tax equivalent basis assuming a federal tax rate of 34%.
(2) All yields and rates have been annualized on a 365 day year for 2013 and a 366 day year for 2012.
(3) Total average loans include loans on non-accrual status.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MIDDLEBURG FINANCIAL CORPORATION
		(Registrant)



Date: March 6, 2014	By:	/s/ Gary R. Shook
		Gary R. Shook
		President

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