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Middleburg Financial Corp. Reports Operating Results (10-Q)

May 11, 2009 | About:

Middleburg Financial Corp. (MBRG) filed Quarterly Report for the period ended 2009-03-31.

Middleburg Financial Corporation has three wholly owned subsidiaries The Middleburg Bank The Tredegar Trust Company and Gilkison Patterson Investment Advisors Inc. The Middleburg Bank serves Loudoun County Virginia with 5 branches. The Tredegar Trust Company is headquartered inRichmond Virginia with a branch office in Middleburg Virginia. Gilkison Patterson Investment Advisors Inc. is an investment management firm located in Alexandria Virginia. Middleburg Financial Corp. has a market cap of $66.88 million; its shares were traded at around $14.75 with a P/E ratio of 21.07 and P/S ratio of 0.92. The dividend yield of Middleburg Financial Corp. stocks is 5.15%.

Highlight of Business Operations:

Total interest income increased $1.0 million or 7.3%, for the three months ended March 31, 2009, when compared to the same period in 2008. Funding costs have begun to decrease as a result of Middleburg Bank providing an alternative funding source for Southern Trust Mortgage and steady rate decreases since September 2008. Total interest expense was $5.3 million for the three months ended March 31, 2009, compared to $6.3 million for the three months ended March 31, 2008. Other income increased $185,000 to $5.0 million for the three months ended March 31, 2009, compared with the same period in 2008. Total other expense was $11.8 million for the three months ended March 31, 2009 compared to $10.5 million for the same period in 2008.

Total assets for the Company increased to $998.3 million at March 31, 2009, compared to $985.2 million at December 31, 2008, representing an increase of $13.1 million or 1.3%. Loans held for sale increased $26.1 million during this same period. Total average assets increased 13.5% from $880.0 million for the three months ended March 31, 2008 to $999.2 million for the same period in 2009. Total liabilities were $897.6 million at March 31, 2009, compared to $907.6 million at December 31, 2008. Total deposits increased $28.5 million, while short-term borrowings and long-term debt decreased $35.6 million combined. Total average liabilities increased $108.3 million or 13.6% to $905.1 million at March 31, 2009, compared to the same period in 2008. Total shareholders equity, which includes the non-controlling interest in Southern Trust Mortgage, increased $23.1 million to $100.7 million at March 31, 2009. The Company issued $22.0 million in preferred stock to the U.S. Treasury under the Capital Purchase Program in January 2009 and $2.2 million in common stock under a stock purchase agreement with an accredited investor in March 2009. Average shareholders equity increased $12.7 million over the same periods.

Total loans, including loans held for sale at March 31, 2009 were $725.8 million, an increase of $14.1 million from the December 31, 2008 amount of $711.7 million. Loans held for sale increased to $66.4 million, or 9.2% of total loans at March 31, 2009, compared to $40.3 million, or 5.7% of total loans at December 31, 2008. The demand for refinancing and purchase money financing increased significantly during the three months ended March 31, 2009 as a result of historically low interest rates. Southern Trust Mortgage closed $270.8 million in loans for the three months ended March 31, 2009, compared to $145.7 million for the three months ended December 31, 2008. The Company experienced decreases in real estate construction loans, which were $95.6 million at March 31, 2009, compared to $105.7 million at December 31, 2008. Real estate mortgage loans of $505.1 million at March 31, 2009 increased slightly from the December 31, 2008 amount of $502.7 million. Commercial, financial and agricultural loans, which are primarily loans to businesses, decreased to $40.5 million at March 31, 2009, compared to $44.1 at December 31, 2008. 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

Securities decreased to $165.9 million at March 31, 2009 compared to $181.3 million at December 31, 2008. During the three months ended March 31, 2009, the Company increased its cash liquidity position by investing the proceeds of sales, maturities and principal payments of securities into federal funds sold, as a precaution against the economic uncertainties and the resulting volatility that occurred in the securities markets. Accordingly, the yields on these investments were lower than the Company could attain in other less liquid investments. The average balance of federal funds sold was $21.2 million at March 31, 2009, compared to $7.9 million at March 31, 2008. The Company sold $30.0 million in securities, received proceeds of $5.9 million from maturities and principal payments, and purchased securities of $23.2 million during the three months ended March 31, 2009. The Company will continue to maintain its securities portfolio as a source of liquidity and collateral. At March 31, 2009, the tax equivalent yield on the securities portfolio was 5.44%.

Time deposits decreased $3.2 million from December 31, 2008 to $331.1 million at March 31, 2009. The decrease is the result of maturities of time deposits of public fund depositors. These deposits are larger than typical time deposits. The deposits enter and exit the Companys portfolio based on the clients funding needs. Time deposits include brokered certificates of deposit, which increased $3.9 million to $111.4 million at March 31, 2009 from the December 31, 2008 amount of $107.5 million. The brokered certificates of deposit have maturities ranging from one month to four years. Securities sold under agreements to repurchase (Repo Accounts) decreased $3.7 million from $22.7 million at December 31, 2008 to $19.0 million at March 31, 2009. The Repo Accounts include certain long-term commercial checking accounts with average balances that typically exceed $100,000 and the Tredegar Institutional Select account which includes accounts maintained by Middleburg Trust Companys business clients.

Total shareholders equity was $100.7 million at March 31, 2009. This amount represents an increase of 29.8% from the December 31, 2008 amount of $77.6 million. The book value per common share was $21.29 at March 31, 2009 and $17.12 at December 31, 2008. The Companys shareholders equity, excluding non-controlling interest was $98.1 million at March 31, 2009. This amount represents an increase of 29.6% from the December 31, 2008 amount of $75.7 million. The book value per common share was $20.75 at March 31, 2009 and $16.69 at December 31, 2008. The increases in shareholders equity and book value are the result of $22 million in additional funds under the Capital Purchase Program and $2.2 million in common stock under a stock purchase agreement with an accredited investor.

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Rating: 2.3/5 (3 votes)

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