Attached files
| file | filename |
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| 8-K - 8-K - MIDDLEBURG FINANCIAL CORP | a3-31x15earningsrelease.htm |
E A R N I N G S R E L E A S E
Press Contacts: Gary R. Shook, President & CEO 540-687-4801 or
pres@middleburgbank.com
Raj Mehra, EVP & CFO 540-687-4816 or
cfo@middleburgbank.com
Jeffrey H. Culver, EVP & COO 703-737-3470 or
coo@middleburgbank.com
MIDDLEBURG FINANCIAL CORPORATION ANNOUNCES FIRST QUARTER 2015 RESULTS
MIDDLEBURG, VA. – April 30, 2015 – Middleburg Financial Corporation (the “Company”) (Nasdaq: MBRG), today announced net income of $2.45 million, or $0.34 per diluted share, for the quarter ended March 31, 2015.
“The results for the first quarter of 2015 continued Middleburg’s trend of earnings growth,” commented Gary R. Shook, President and CEO of Middleburg Financial Corporation. He added, “The focus on revenue from quality loan growth at Middleburg Bank and increased asset management fees from Middleburg Investment Group coupled with strong expense control and improving credit quality contributed to the stronger performance. While we still have much to do to achieve our long term performance goals, the steady progress is gratifying.”
First Quarter 2015 Highlights:
• | Net income of $2.45 million or $0.34 per diluted share for the quarter ended March 31, 2015, an increase of 23.82% compared to $1.98 million or $0.28 per diluted share for the first quarter of 2014. |
• | Net interest margin for the first quarter of 2015 was 3.40%, higher by 9 bp compared to the previous quarter and a decrease of 14 bp compared to the first quarter of 2014. |
• | Cost of funds was 39 bp for the first quarter of 2015, a decrease of 4 bp from the previous quarter and a decrease of 13 bp from the first quarter of 2014. |
• | Net interest income was $9.63 million for the first quarter of 2015, an increase of 3.39% compared to the previous quarter and a decrease of 0.82% compared to the first quarter of 2014. |
• | Non-interest expense was $8.90 million for the first quarter of 2015, a decrease of 5.55% and 26.66% compared to the previous quarter and the first quarter of 2014, respectively. |
• | Efficiency ratio of 68.35% for the first quarter of 2015, compared to 77.53% for the previous quarter and 75.19% for the first quarter of 2014. |
• | Total assets were $1.27 billion as of March 31, 2015, an increase of 3.48% since December 31, 2014. |
• | Total deposits were $1.02 billion as of March 31, 2015, an increase of 3.24% since December 31, 2014. |
• | Loans held-for-investment were $761.92 million as of March 31, 2015, or annualized growth of 3.76% in 2015. |
• | Nonaccrual loans were $9.63 million on March 31, 2015, a decrease of 3.21% since December 31, 2014. |
• | The ratio of nonperforming assets to total assets was 1.46% at March 31, 2015 compared to 1.59% at December 31, 2014 and 2.04% at March 31, 2014. |
• | Capital ratios continue to be strong: Total Risk-Based Capital Ratio of 18.45%, Tier 1 Risk-Based Capital Ratio of 17.20%, Common Equity Tier 1 Ratio of 16.49% and Tier 1 Leverage Ratio of 9.76% at March 31, 2015. |
TOTAL REVENUE
Total revenue, which is comprised of net interest income (before provision for loan losses) and non-interest income, was $12.64 million for the first quarter of 2015, representing an increase of 8.35% compared to the previous quarter and a decrease of 18.94% compared to the first quarter of 2014. The increase in revenue in the first quarter of 2015 compared to the previous quarter was due to an increase in earning assets and expansion of the net interest margin during the first quarter. The decline in revenue compared to the first quarter of 2014 was primarily due to less interest income from residential mortgages that were originated by Southern
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Trust Mortgage, held on the Company's balance sheet and subsequently sold to investors. The Company sold its majority interest in Southern Trust Mortgage in the second quarter of 2014. While the Company continues to extend credit to Southern Trust Mortgage for such residential mortgage originations, the size of the line of credit has been reduced to align with our lending limits.
Net Interest Income
The Company recorded net interest income of $9.63 million for the first quarter of 2015, representing an increase of 3.39% compared to the previous quarter and a decrease of 0.82% compared to the quarter ended March 31, 2014. The net interest margin was 3.40%, higher by 9 bp compared to the previous quarter and 14 bp less than the quarter ended March 31, 2014.
The following factors contributed to the increase in net interest margin during the first quarter of 2015:
• | Yields on earning assets increased by 5 bp compared to the previous quarter, primarily due to a 3 bp increase in loan yields and a 10 bp increase in yields on investments. |
• | Yields on investment securities were impacted by a decrease in premium amortization stemming from slower prepayments on mortgage backed securities accompanied by higher book yields for securities that were added to the portfolio during the period. |
• | Cost of funds declined by 4 bp to 39 bp as the Company grew non-interest bearing deposits and paid off some maturing wholesale borrowings. |
The increase in yields on earning assets resulted in total interest income of $10.70 million for the quarter, higher by 2.02% compared to the previous quarter. Total interest income for the quarter declined by 3.66% compared to the quarter ended March 31, 2014 as yields on average earning assets fell by 27 bp while the balance of average earning assets increased by 2.57% during the period.
Non-Interest Income
Non-interest income increased by 28.00% compared to the previous quarter and declined by 48.85% compared to the quarter ended March 31, 2014.
• | Total revenue generated by our wealth management group, Middleburg Investment Group ("MIG") was $1.22 million for the quarter ended March 31, 2015, an increase of 7.03% compared to the previous quarter and 16.22% when compared to the quarter ended March 31, 2014. Fee income is based primarily upon the market value of the accounts under administration which were $1.99 billion at March 31, 2015, $1.87 billion at December 31, 2014 and $1.56 billion at March 31, 2014. |
• | Other operating income was $842,000 for the quarter ended March 31, 2015, an increase of 223.85% when compared to the previous quarter and a decrease of 13.11% when compared to the quarter ended March 31, 2014. Most of the other operating income during the first quarters of 2015 and 2014 was related to two separate recoveries of expenses during those quarters related to the same loan that had previously been charged off. |
• | The primary reason for the decline in non-interest income compared to the quarter ended March 31, 2014 was no gain on sale revenue from residential mortgage loans in the current period, stemming from the Company's sale of its majority interest in Southern Trust Mortgage during the second quarter of 2014. |
NON-INTEREST EXPENSE
Non-interest expense declined by 5.55% and 26.66% when compared to the previous quarter and the quarter ended March 31, 2014, respectively. Principal categories of non-interest expense that changed were the following:
• | Salaries and employee benefit expenses declined by 5.57% and 31.07% when compared to the previous quarter and the quarter ended March 31, 2014, respectively. The primary reasons for lower salary and employee benefit expenses for the first quarter of 2015 compared to the previous quarter were reduced benefit expenses and staff reductions at the bank. The decline in salary and benefit expenses compared to the first quarter of 2014 was primarily due to the sale of the Company's majority interest in Southern Trust Mortgage in the second quarter of 2014. |
• | Occupancy and equipment expense was relatively unchanged compared to the previous quarter and decreased by 29.53% compared to the same period in 2014. The primary reason for lower expenses in this category year over year was the sale of Southern Trust Mortgage in the second quarter of 2014. |
• | Costs related to other real estate owned (OREO) decreased by 39.09% compared to the previous quarter and by 59.88% compared to the same period in 2014. Changes in the level of OREO related expenses are primarily determined by the volume of OREO properties held, which decreased by 16.02% compared to the previous quarter and by 24.25% compared to the first quarter of 2014. |
• | Other expenses declined by 20.51% compared to the previous quarter and by 19.71% compared to the same period in 2014. Significant items in this category include expenses related to deposit processing, fees for advisory services, telephone and professional fees. Expense control contributed to lower expenses compared to the previous quarter. The primary reason for lower expenses compared to the first quarter of 2014 was the sale of the Company's majority interest in Southern Trust Mortgage in the second quarter of 2014. |
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ASSET QUALITY
The allowance for loans losses increased slightly to $12.02 million or 1.58% of total loans at March 31, 2015 compared to $11.79 million or 1.56% of total loans at December 31, 2014.
Total nonperforming assets were $18.43 million or 1.46% of total assets at March 31, 2015 compared to $19.45 million or 1.59% to total assets at December 31, 2014.
• | Loans that were delinquent for more than 90 days and still accruing increased to $74,000 as of March 31, 2015 from $30,000 as of December 31, 2014. |
• | Nonaccrual loans were $9.63 million as of March 31, 2015, compared to $9.94 million as of December 31, 2014. |
• | Troubled debt restructurings that were performing as agreed totaled $4.26 million at March 31, 2015 compared to $4.30 million at December 31, 2014. |
• | OREO balances were $3.40 million as of March 31, 2015, compared to $4.05 million as of December 31, 2014. |
CONSOLIDATED ASSETS
Total consolidated assets at March 31, 2015 were $1.27 billion, an increase of 3.48% since December 31, 2014. Changes in major asset categories were as follows:
• | Cash balances and deposits with other banks increased by $28.28 million compared to December 31, 2014. The primary reason was an increase in non-interest bearing deposits during the quarter that could not be fully deployed into funding the purchase of earning assets. |
• | The Company deployed some of its excess liquidity into growing its securities portfolio which increased by $7.60 million compared to December 31, 2014. |
• | Loan balances also grew by an annualized rate of 3.76% in the first quarter of the year or by $7.07 million from December 31, 2014. |
CONSOLIDATED LIABILITIES
Total consolidated liabilities at March 31, 2015 were $1.14 billion, an increase of 3.61% compared to December 31, 2014. Total deposits increased by $32.12 million from December 31, 2014 to $1.02 billion as of March 31, 2015. Federal Home Loan Bank borrowings increased by $15 million to $70 million.
SHAREHOLDERS' EQUITY AND CAPITAL
Shareholders’ equity at March 31, 2015 was $124.83 million, compared to $122.03 million at December 31, 2014. Retained earnings at March 31, 2015 were $57.59 million compared to $55.85 million at December 31, 2014. The book value of the Company’s common stock at March 31, 2015 was $17.51 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 March 31, 2015:
• | Tier 1 Leverage ratio was 9.76%, 5.76% over the regulatory minimum of 4.0%. |
• | Common Equity Tier 1 Ratio was 16.49%, 9.49% over the regulatory minimum of 7.0%. |
• | Tier 1 Risk-Based Capital Ratio was 17.20%, 8.70% over the regulatory minimum of 8.5%. |
• | Total Risk Based Capital Ratio was 18.45%, 7.95% over the regulatory minimum of 10.5%. |
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.
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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.
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MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES | |||||||
Consolidated Balance Sheets | |||||||
(In thousands, except for share and per share data) | |||||||
(Unaudited) | (Audited) | ||||||
March 31, 2015 | December 31, 2014 | ||||||
ASSETS | |||||||
Cash and due from banks | $ | 6,652 | $ | 7,396 | |||
Interest bearing deposits with other banks | 76,646 | 47,626 | |||||
Total cash and cash equivalents | 83,298 | 55,022 | |||||
Securities held to maturity, fair value of $1,417 and $1,397, respectively | 1,500 | 1,500 | |||||
Securities available for sale, at fair value | 355,864 | 348,263 | |||||
Restricted securities, at cost | 5,774 | 5,279 | |||||
Loans, net of allowance for loan losses of $12,024 and $11,786, respectively | 749,891 | 743,060 | |||||
Premises and equipment, net | 17,904 | 18,104 | |||||
Goodwill and identified intangibles, net | 3,765 | 3,807 | |||||
Other real estate owned, net of valuation allowance of $663 and $755, respectively | 3,402 | 4,051 | |||||
Bank owned life insurance | 22,777 | 22,617 | |||||
Accrued interest receivable and other assets | 21,212 | 21,154 | |||||
TOTAL ASSETS | $ | 1,265,387 | $ | 1,222,857 | |||
LIABILITIES | |||||||
Deposits: | |||||||
Non-interest bearing demand deposits | $ | 253,225 | $ | 216,912 | |||
Savings and interest bearing demand deposits | 532,934 | 523,230 | |||||
Time deposits | 235,038 | 248,938 | |||||
Total deposits | 1,021,197 | 989,080 | |||||
Securities sold under agreements to repurchase | 31,040 | 38,551 | |||||
Federal Home Loan Bank borrowings | 70,000 | 55,000 | |||||
Subordinated notes | 5,155 | 5,155 | |||||
Accrued interest payable and other liabilities | 13,170 | 13,037 | |||||
Commitments and contingent liabilities | — | — | |||||
TOTAL LIABILITIES | 1,140,562 | 1,100,823 | |||||
SHAREHOLDERS' EQUITY | |||||||
Common stock ($2.50 par value; 20,000,000 shares authorized, 7,127,105 and 7,131,643, issued and outstanding, respectively) | 17,511 | 17,494 | |||||
Capital surplus | 44,923 | 44,892 | |||||
Retained earnings | 57,589 | 55,854 | |||||
Accumulated other comprehensive income | 4,802 | 3,794 | |||||
TOTAL SHAREHOLDERS' EQUITY | 124,825 | 122,034 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,265,387 | $ | 1,222,857 | |||
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MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES | |||||||
Consolidated Statements of Income | |||||||
(In thousands, except for per share data) | |||||||
(Unaudited) | |||||||
For the Three Months Ended March 31, | |||||||
2015 | 2014 | ||||||
INTEREST AND DIVIDEND INCOME | |||||||
Interest and fees on loans | $ | 8,243 | $ | 8,806 | |||
Interest and dividends on securities | |||||||
Taxable | 1,906 | 1,617 | |||||
Tax-exempt | 461 | 584 | |||||
Dividends | 59 | 73 | |||||
Interest on deposits with other banks and federal funds sold | 30 | 26 | |||||
Total interest and dividend income | 10,699 | 11,106 | |||||
INTEREST EXPENSE | |||||||
Interest on deposits | 855 | 1,002 | |||||
Interest on securities sold under agreements to repurchase | 45 | 80 | |||||
Interest on FHLB borrowings and other debt | 168 | 313 | |||||
Total interest expense | 1,068 | 1,395 | |||||
NET INTEREST INCOME | 9,631 | 9,711 | |||||
Provision for loan losses | 450 | 888 | |||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 9,181 | 8,823 | |||||
NON-INTEREST INCOME | |||||||
Service charges on deposit accounts | 558 | 557 | |||||
Trust services income | 1,218 | 1,048 | |||||
Gains on sales of loans held for sale | — | 2,942 | |||||
Gains on sales of securities available for sale, net | 101 | 63 | |||||
Commissions on investment sales | 129 | 140 | |||||
Bank owned life insurance | 160 | 162 | |||||
Other operating income | 842 | 969 | |||||
Total non-interest income | 3,008 | 5,881 | |||||
NON-INTEREST EXPENSE | |||||||
Salaries and employee benefits | 4,848 | 7,033 | |||||
Occupancy and equipment | 1,339 | 1,900 | |||||
Advertising | 133 | 163 | |||||
Computer operations | 490 | 458 | |||||
Other real estate owned | 67 | 167 | |||||
Other taxes | 223 | 197 | |||||
Federal deposit insurance | 211 | 238 | |||||
Other operating expenses | 1,589 | 1,979 | |||||
Total non-interest expense | 8,900 | 12,135 | |||||
Income before income taxes | 3,289 | 2,569 | |||||
Income tax expense | 841 | 749 | |||||
NET INCOME | 2,448 | 1,820 | |||||
Net loss attributable to non-controlling interest | — | 157 | |||||
Net income attributable to Middleburg Financial Corporation | $ | 2,448 | $ | 1,977 | |||
Earnings per share: | |||||||
Basic | $ | 0.34 | $ | 0.28 | |||
Diluted | $ | 0.34 | $ | 0.28 | |||
Dividends per common share | $ | 0.10 | $ | 0.07 | |||
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MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
Quarterly Summary Statements of Income | |||||||||||||||||||
(Unaudited, Dollars In thousands, except for per share data) | |||||||||||||||||||
For the Three Months Ended | |||||||||||||||||||
March 31, 2015 | December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | |||||||||||||||
INTEREST AND DIVIDEND INCOME | |||||||||||||||||||
Interest and fees on loans | $ | 8,243 | $ | 8,176 | $ | 8,357 | $ | 8,493 | $ | 8,806 | |||||||||
Interest and dividends on securities | |||||||||||||||||||
Taxable | 1,906 | 1,728 | 1,763 | 1,792 | 1,617 | ||||||||||||||
Tax-exempt | 461 | 481 | 535 | 537 | 584 | ||||||||||||||
Dividends | 59 | 64 | 84 | 72 | 73 | ||||||||||||||
Interest on deposits with other banks and federal funds sold | 30 | 38 | 51 | 47 | 26 | ||||||||||||||
Total interest and dividend income | 10,699 | 10,487 | 10,790 | 10,941 | 11,106 | ||||||||||||||
INTEREST EXPENSE | |||||||||||||||||||
Interest on deposits | 855 | 933 | 955 | 995 | 1,002 | ||||||||||||||
Interest on securities sold under agreements to repurchase | 45 | 79 | 81 | 81 | 80 | ||||||||||||||
Interest on FHLB borrowings and other debt | 168 | 160 | 209 | 355 | 313 | ||||||||||||||
Total interest expense | 1,068 | 1,172 | 1,245 | 1,431 | 1,395 | ||||||||||||||
NET INTEREST INCOME | 9,631 | 9,315 | 9,545 | 9,510 | 9,711 | ||||||||||||||
Provision for loan losses | 450 | 450 | 550 | 72 | 888 | ||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 9,181 | 8,865 | 8,995 | 9,438 | 8,823 | ||||||||||||||
NON-INTEREST INCOME | |||||||||||||||||||
Service charges on deposit accounts | 558 | 606 | 635 | 622 | 557 | ||||||||||||||
Trust services income | 1,218 | 1,138 | 1,119 | 1,057 | 1,048 | ||||||||||||||
Gains on sales of loans held for sale | — | 1 | 1 | 1,916 | 2,942 | ||||||||||||||
Gains on sales of securities available for sale, net | 101 | 45 | 12 | 66 | 63 | ||||||||||||||
Commissions on investment sales | 129 | 132 | 193 | 146 | 140 | ||||||||||||||
Bank owned life insurance | 160 | 168 | 168 | 164 | 162 | ||||||||||||||
Gain on sale of majority interest in consolidated subsidiary | — | — | — | 24 | — | ||||||||||||||
Other operating income | 842 | 260 | 152 | 278 | 969 | ||||||||||||||
Total non-interest income | 3,008 | 2,350 | 2,280 | 4,273 | 5,881 | ||||||||||||||
NON-INTEREST EXPENSE | |||||||||||||||||||
Salaries and employee benefits | 4,848 | 5,134 | 4,441 | 5,993 | 7,033 | ||||||||||||||
Occupancy and equipment | 1,339 | 1,336 | 1,262 | 1,679 | 1,900 | ||||||||||||||
Advertising | 133 | (65 | ) | 136 | 131 | 163 | |||||||||||||
Computer operations | 490 | 485 | 439 | 510 | 458 | ||||||||||||||
Other real estate owned | 67 | 110 | (33 | ) | 12 | 167 | |||||||||||||
Other taxes | 223 | 212 | 220 | 220 | 197 | ||||||||||||||
Federal deposit insurance | 211 | 212 | 220 | 230 | 238 | ||||||||||||||
Other operating expenses | 1,589 | 1,999 | 1,706 | 2,356 | 1,979 | ||||||||||||||
Total non-interest expense | 8,900 | 9,423 | 8,391 | 11,131 | 12,135 | ||||||||||||||
Income before income taxes | 3,289 | 1,792 | 2,884 | 2,580 | 2,569 | ||||||||||||||
Income tax expense | 841 | 162 | 763 | 667 | 749 | ||||||||||||||
NET INCOME | 2,448 | 1,630 | 2,121 | 1,913 | 1,820 | ||||||||||||||
Net loss (income) attributable to non-controlling interest | — | — | — | (58 | ) | 157 | |||||||||||||
Net income attributable to Middleburg Financial Corporation | $ | 2,448 | $ | 1,630 | $ | 2,121 | $ | 1,855 | $ | 1,977 | |||||||||
Earnings per share: | |||||||||||||||||||
Basic | $ | 0.34 | $ | 0.23 | $ | 0.30 | $ | 0.26 | $ | 0.28 | |||||||||
Diluted | $ | 0.34 | $ | 0.23 | $ | 0.30 | $ | 0.26 | $ | 0.28 | |||||||||
Dividends per common share | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.07 | $ | 0.07 | |||||||||
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MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
Selected Financial Data by Quarter | |||||||||||||||||||
(Unaudited, Dollars in thousands, except for per share data) | |||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
2015 | 2014 | 2014 | 2014 | 2014 | |||||||||||||||
BALANCE SHEET RATIOS | |||||||||||||||||||
Loans to deposits | 74.60 | % | 76.32 | % | 73.87 | % | 72.65 | % | 76.10 | % | |||||||||
Average interest-earning assets to average interest-bearing liabilities | 136.04 | % | 133.54 | % | 130.14 | % | 128.37 | % | 126.80 | % | |||||||||
INCOME STATEMENT RATIOS | |||||||||||||||||||
Return on average assets (ROA) | 0.80 | % | 0.53 | % | 0.69 | % | 0.61 | % | 0.66 | % | |||||||||
Return on average equity (ROE) | 8.01 | % | 5.31 | % | 7.00 | % | 6.30 | % | 6.99 | % | |||||||||
Net interest margin (1) | 3.40 | % | 3.31 | % | 3.36 | % | 3.38 | % | 3.54 | % | |||||||||
Yield on average earning assets | 3.77 | % | 3.72 | % | 3.79 | % | 3.88 | % | 4.04 | % | |||||||||
Cost of funds | 0.39 | % | 0.43 | % | 0.45 | % | 0.52 | % | 0.52 | % | |||||||||
Efficiency ratio (5) | 68.35 | % | 77.53 | % | 68.82 | % | 78.99 | % | 75.19 | % | |||||||||
PER SHARE DATA | |||||||||||||||||||
Dividends | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.07 | $ | 0.07 | |||||||||
Book value (MFC Shareholders) | 17.51 | 17.11 | 16.97 | 16.73 | 16.37 | ||||||||||||||
Tangible book value (4) | 16.99 | 16.58 | 16.43 | 16.19 | 15.62 | ||||||||||||||
SHARE PRICE DATA | |||||||||||||||||||
Closing price | $ | 18.30 | $ | 18.01 | $ | 17.74 | $ | 20.00 | $ | 17.61 | |||||||||
Diluted earnings multiple (2) | 13.45 | 16.99 | 14.78 | 19.23 | 15.72 | ||||||||||||||
Book value multiple (3) | 1.04 | 1.05 | 1.05 | 1.20 | 1.08 | ||||||||||||||
COMMON STOCK DATA | |||||||||||||||||||
Outstanding shares at end of period | 7,127,105 | 7,131,643 | 7,123,914 | 7,113,744 | 7,076,145 | ||||||||||||||
Weighted average shares O/S , basic - QTD | 7,127,910 | 7,127,164 | 7,108,450 | 7,093,788 | 7,078,470 | ||||||||||||||
Weighted average shares O/S, diluted - QTD | 7,148,702 | 7,146,140 | 7,134,262 | 7,117,826 | 7,103,785 | ||||||||||||||
Dividend payout ratio | 29.41 | % | 43.48 | % | 33.33 | % | 26.92 | % | 25.05 | % | |||||||||
CAPITAL RATIOS | |||||||||||||||||||
Capital to assets - common shareholders | 9.86 | % | 9.98 | % | 10.01 | % | 9.50 | % | 9.59 | % | |||||||||
Capital to assets - with non-controlling interest | 9.86 | % | 9.98 | % | 10.01 | % | 9.50 | % | 9.78 | % | |||||||||
Leverage ratio | 9.76 | % | 9.90 | % | 9.71 | % | 9.54 | % | 9.61 | % | |||||||||
Common equity tier 1 ratio | 16.49 | % | N/A | N/A | N/A | N/A | |||||||||||||
Tier 1 risk based capital ratio | 17.20 | % | 15.70 | % | 16.04 | % | 15.63 | % | 14.67 | % | |||||||||
Total risk based capital ratio | 18.45 | % | 16.95 | % | 17.30 | % | 16.88 | % | 15.93 | % | |||||||||
CREDIT QUALITY | |||||||||||||||||||
Net charge-offs to average loans | 0.03 | % | 0.46 | % | 0.09 | % | 0.23 | % | 0.13 | % | |||||||||
Total nonperforming loans to total loans | 1.83 | % | 1.89 | % | 1.63 | % | 2.10 | % | 2.76 | % | |||||||||
Total nonperforming assets to total assets | 1.46 | % | 1.59 | % | 1.50 | % | 1.57 | % | 2.04 | % | |||||||||
Nonaccrual loans to: | |||||||||||||||||||
Total loans | 1.26 | % | 1.32 | % | 1.01 | % | 1.43 | % | 2.03 | % | |||||||||
Total assets | 0.76 | % | 0.81 | % | 0.61 | % | 0.83 | % | 1.23 | % | |||||||||
Allowance for loan losses to: | |||||||||||||||||||
Total loans | 1.58 | % | 1.56 | % | 1.57 | % | 1.58 | % | 1.81 | % | |||||||||
Nonperforming assets | 65.23 | % | 60.59 | % | 63.18 | % | 58.50 | % | 53.54 | % | |||||||||
Nonaccrual loans | 124.92 | % | 118.52 | % | 155.80 | % | 110.57 | % | 88.92 | % | |||||||||
NONPERFORMING ASSETS | |||||||||||||||||||
Loans delinquent 90+ days and still accruing | $ | 74 | $ | 30 | $ | 30 | $ | 355 | $ | 503 | |||||||||
Nonaccrual loans | 9,625 | 9,944 | 7,332 | 10,408 | 14,876 | ||||||||||||||
Restructured loans (not in nonaccrual) | 4,262 | 4,295 | 4,522 | 4,552 | 4,838 | ||||||||||||||
Other real estate owned | 3,402 | 4,051 | 5,064 | 4,356 | 4,491 | ||||||||||||||
Repossessed assets | 1,070 | 1,132 | 1,132 | — | — | ||||||||||||||
Total nonperforming assets | $ | 18,433 | $ | 19,452 | $ | 18,080 | $ | 19,671 | $ | 24,708 | |||||||||
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(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. |
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MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES Average Balances, Income and Expenses, Yields and Rates | |||||||||||||||||||||
Three months ended March 31, | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
Average Balance | Income/ Expense | Yield/ Rate (2) | Average Balance | Income/ Expense | Yield/ Rate (2) | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Securities: | |||||||||||||||||||||
Taxable | $ | 309,842 | $ | 1,965 | 2.57 | % | $ | 276,914 | $ | 1,690 | 2.48 | % | |||||||||
Tax-exempt (1) | 52,606 | 699 | 5.39 | % | 60,936 | 885 | 5.88 | % | |||||||||||||
Total securities | $ | 362,448 | $ | 2,664 | 2.98 | % | $ | 337,850 | $ | 2,575 | 3.09 | % | |||||||||
Loans: | |||||||||||||||||||||
Taxable | $ | 751,590 | $ | 8,237 | 4.44 | % | $ | 759,073 | $ | 8,800 | 4.70 | % | |||||||||
Tax-exempt (1) | 615 | 8 | 5.28 | % | 652 | 9 | 5.60 | % | |||||||||||||
Total loans (3) | $ | 752,205 | $ | 8,245 | 4.45 | % | $ | 759,725 | $ | 8,809 | 4.70 | % | |||||||||
Interest on deposits with other banks and federal funds sold | 61,203 | 30 | 0.20 | % | 48,803 | 26 | 0.22 | % | |||||||||||||
Total earning assets | $ | 1,175,856 | $ | 10,939 | 3.77 | % | $ | 1,146,378 | $ | 11,410 | 4.04 | % | |||||||||
Less: allowance for loan losses | (11,660 | ) | (13,622 | ) | |||||||||||||||||
Total nonearning assets | 76,223 | 79,191 | |||||||||||||||||||
Total assets | $ | 1,240,419 | $ | 1,211,947 | |||||||||||||||||
Liabilities: | |||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||
Checking | $ | 337,126 | $ | 166 | 0.20 | % | $ | 332,546 | $ | 162 | 0.20 | % | |||||||||
Regular savings | 115,319 | 53 | 0.19 | % | 113,034 | 52 | 0.19 | % | |||||||||||||
Money market savings | 69,536 | 32 | 0.19 | % | 76,437 | 36 | 0.19 | % | |||||||||||||
Time deposits: | |||||||||||||||||||||
$100,000 and over | 132,240 | 292 | 0.90 | % | 130,407 | 324 | 1.01 | % | |||||||||||||
Under $100,000 | 110,367 | 312 | 1.15 | % | 130,762 | 428 | 1.33 | % | |||||||||||||
Total interest-bearing deposits | $ | 764,588 | $ | 855 | 0.45 | % | $ | 783,186 | $ | 1,002 | 0.52 | % | |||||||||
Securities sold under agreements to repurchase | 33,761 | 45 | 0.54 | % | 35,752 | 80 | 0.90 | % | |||||||||||||
FHLB borrowings and other debt | 65,988 | 168 | 1.03 | % | 85,155 | 313 | 1.49 | % | |||||||||||||
Total interest-bearing liabilities | $ | 864,337 | $ | 1,068 | 0.50 | % | $ | 904,093 | $ | 1,395 | 0.63 | % | |||||||||
Non-interest bearing liabilities: | |||||||||||||||||||||
Demand deposits | 238,785 | 180,574 | |||||||||||||||||||
Other liabilities | 13,419 | 10,221 | |||||||||||||||||||
Total liabilities | $ | 1,116,541 | $ | 1,094,888 | |||||||||||||||||
Non-controlling interest | — | 2,284 | |||||||||||||||||||
Shareholders' equity | 123,878 | 114,775 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,240,419 | $ | 1,211,947 | |||||||||||||||||
Net interest income | $ | 9,871 | $ | 10,015 | |||||||||||||||||
Interest rate spread | 3.27 | % | 3.41 | % | |||||||||||||||||
Cost of Funds | 0.39 | % | 0.52 | % | |||||||||||||||||
Interest expense as a percent of average earning assets | 0.37 | % | 0.49 | % | |||||||||||||||||
Net interest margin | 3.40 | % | 3.54 | % | |||||||||||||||||
(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. |
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