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Middleburg Financial Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 10, 2011 03:27PM

Middleburg Financial Corp. (MBRG) filed Quarterly Report for the period ended 2011-03-31. Middleburg Financial Corp. has a market cap of $104.6 million; its shares were traded at around $15.11 with and P/S ratio of 1.4. The dividend yield of Middleburg Financial Corp. stocks is 1.3%.



Highlight of Business Operations:

Net income for the three months ended March 31, 2011 was $1.2 million compared to net income of $1.6 million for the three months ended December 31, 2010. Total interest income decreased by $330,000 or 3.0%, for the three months ended March 31, 2011, when compared to the period ended December 31, 2010. Interest and fees on loans decreased 2.0% for the three months ended March 31, 2011 to $9.7 million, compared to $9.9 million for the period ended December 31, 2010. Total interest expense was $2.7 million for the three months ended March 31, 2011, compared to $3.1 million for the three months ended December 31, 2010, a decrease of 13.0%. Interest expense on deposits for the three months ended March 31, 2011 was $2.3 million compared to $2.6 million for the period ended December 31, 2010. Other income was $4.9 million for the three months ended March 31, 2011, compared to $8.0 million when compared to the period ended December 31, 2010, a decrease of 38.7%. Total other expense was $12.2 million for the three months ended March 31, 2011 compared to $14.1 million for the period ended December 31, 2010, a decrease of 13.5%.

Net income for the three months ended March 31, 2011 increased to $1.2 million from income of $814,000 for the same period in 2010. Total interest income decreased by $374,000 or 3.1%, for the three months ended March 31, 2011, when compared to the same period in 2010. Interest and fees on loans decreased 6.8% for the three months ended March 31, 2011 to $9.7 million, compared to $10.4 million for the same period in 2010. Total interest expense decreased $953,000 or 26.0%, for the three months ended March 31, 2011, when compared to the same period in 2010. Other income decreased by $169,000 or 3.3% for the three months ended March 31, 2011, when compared to the same period in 2010. Total other expense increased by $227,000 or 2.0% for the three months ended March 31, 2011 compared to the same period in 2010. Net charge-offs against the reserves for loan losses were $846,000 during the three months ended March 31, 2011 and the provision for loan losses was $454,000.

The Company had approximately $6.3 million in intangible assets and goodwill at March 31, 2011, a decrease of $43,000 or 0.7% since December 31, 2010. On April 1, 2002, the Company acquired Middleburg Investment Advisors for $6.0 million. Approximately $5.9 million of the purchase price was allocated to intangible assets and goodwill. In connection with this investment, a purchase price valuation was completed to determine the appropriate allocation to identified intangibles. The valuation concluded that approximately 42% of the purchase price was related to the acquisition of customer relationships with an amortizable life of 15 years. Another 19% of the purchase price was allocated to a non-compete agreement with an amortizable life of seven years. The remainder of the purchase price has been allocated to goodwill. On January 3, 2011, Middleburg Investment Advisors was consolidated into Middleburg Trust Company and ceased operating as an independent entity. The goodwill and intangible assets of the former Middleburg Investment Advisors are now reflected in the records of Middleburg Trust Company. Approximately $1.0 million of the $6.3 million in intangible assets and goodwill at March 31, 2011 was attributable directly to the Company s investment in Middleburg Trust Company. With the consolidation of Southern Trust Mortgage, the Company recognized $1.9 million in goodwill as part of its equity investment.

Total assets for the Company were at $1.1 billion at March 31, 2011, a decrease of $20.3 million or 1.8% compared to total assets at December 31, 2010. Total average assets increased 8.8% from $988.9 million for the three months ended March 31, 2010 to $1.08 billion for the same period in 2011. Total liabilities were $983.1 million at March 31, 2011, compared to $1.0 billion at December 31, 2010. Total average liabilities increased $90.9 million or 10.3% to $975.5 million for the three months ended March 31, 2011, compared to the same period in 2010. Average shareholders equity decreased 4.0% or $4.1 million over the same periods.

Total loans, including loans held for sale at March 31, 2011 decreased $21.7 million to $697.0 million from the December 31, 2010 amount of $718.7 million. Loans held for sale decreased to $34.4 million at March 31, 2011, compared to $59.4 million at December 31, 2010, a decrease of 42.0% during the period. The primary reason for the decrease in loans held for sale was a decline in mortgage originations during the first quarter of 2011 compared to the previous quarter. Southern Trust Mortgage originated $136.4 million in loans for the three months ended March 31, 2011, compared to $149.0 million for the three months ended March 31, 2010. The Company experienced a decrease in real estate construction loans, which were $59.7 million at March 31, 2011, compared to $68.1 million at December 31, 2010. Real estate mortgage loans of $515.4 million at March 31, 2011 increased from the December 31, 2010 amount of $510.9 million. Commercial loans, which are primarily loans to businesses, increased to $63.9 million at March 31, 2011, compared to $56.4 at December 31, 2010. Southern Trust Mortgage has a $5.0 million line of credit and a $50.0 million participation agreement with Middleburg Bank. The line of credit and the participation amounts are eliminated in the consolidation process and are not reflected in the Company s consolidated financial statements. Net charge-offs were $846,000 for the three months ended March 31, 2011. The provision for loan losses for the three months ended March 31,

2011 was $454,000 compared to $929,000 for the same period in 2010. The allowance for loan losses at March 31, 2011 was $14.6 million or 2.2% of total loans outstanding, excluding loans held for sale, compared to $15.0 million or 2.3% at December 31, 2010.

Read the The complete Report



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