ACCESS NATIONAL CORPORATION MIDDLEBURG, Va., Jan. 30, 2017 /PRNewswire/ -- Middleburg Financial Corporation (the "Company") (Nasdaq: MBRG), today announced net income of $1.09 million, or $0.15 per diluted share, for the quarter ended December 31, 2016 and $8.06 million, or $1.13 per diluted share, for the full year 2016.
"On October 24, 2016, the Company announced a Definitive Agreement of a strategic merger of equals with Access National Corporation (NASDAQ: ANCX). We believe that this combination will result in Virginia's premier bank, with enhanced scale, improved efficiency and a well-diversified business model. The two companies have highly complementary businesses and geographic footprints with a greater market reach which creates significant opportunities for growth. Our strategic focus mirrors the attributes of the high net worth northern and central Virginia market and bodes well for us as we move forward," said Gary R. Shook, President and CEO of Middleburg Financial Corporation. "While the fourth quarter had some bumpiness from significant merger related expenses, we did see quality loan growth accompanied by a lower cost of funds and an expanded net interest margin. Loan growth came from all of our markets with a diversity of loan types. For the second year in a row Middleburg Investment Group ("MIG") produced record earnings of $1.2 million. With approximately $2 billion in assets under administration, MIG has the scale that will continue to drive increased profitability."
Fourth quarter and full year 2016 highlights :
-- The pending strategic merger with Access National Corporation is on
track to close during the second quarter of 2017.
-- Net income was $1.09 million, or $0.15 per diluted share, compared to
$2.26 million, or $0.32 per diluted share, for the previous quarter and
$781,000, or $0.11 per diluted share, for the same period in 2015.
-- Total revenue was $13.53 million for the fourth quarter of 2016, higher
by 14.09% compared to the previous quarter and an increase of 14.41%
relative to the same period in 2015.
-- The net interest margin expanded by 6 basis points to 3.17%, compared to
3.11% for the previous quarter and was unchanged relative to the same
period in 2015.
-- Cost of funds declined by 2 basis points to 36 basis points during the
fourth quarter compared to 38 basis points for the previous quarter. The
cost of funds for the full year 2016 was 38 basis points unchanged
relative to the full year 2015.
-- Reported earnings reflect merger related expenses of $1.05 million for
the fourth quarter of 2016 and $1.29 million for the full year 2016.
-- Loans held-for-investment increased by $14.21 million or 6.68% on an
annualized basis during the fourth quarter of 2016.
-- Deposits grew by 1.18% in 2016 to $1.05 billion at December 31, 2016,
while non-interest bearing demand deposits grew by 5.37% during 2016.
-- A loan loss provision of $1.80 million was recognized in the current
quarter which resulted in a ratio of loan loss reserves to total loans
of 1.33% and the ratio of reserves to nonaccrual loans was 179.90% at
December 31, 2016.
TOTAL REVENUE
Total revenue, which is composed of net interest income and non-interest income (before any provision for loan losses), was $13.53 million for the fourth quarter of 2016, higher by 14.09% compared to the previous quarter and by 14.41% compared to the same period in 2015.
Net Interest Income
The Company recorded net interest income of $9.62 million for the fourth quarter of 2016, relatively unchanged compared to the previous quarter and higher by 1.53% compared to the same period in 2015. The net interest margin in the fourth quarter of 2016 was 3.17%, higher by 6 basis points ("bp") compared to the previous quarter and unchanged compared to the same period in 2015.
The following factors contributed to the change in net interest margin during the fourth quarter of 2016 compared to the previous quarter:
-- Yields on earning assets increased by 4 bp compared to the previous
quarter.
-- Yields on investment securities increased by 24 bp compared to the
previous quarter. A significant portion of the investment portfolio is
in residential mortgage backed securities ("MBS") and SBA securities.
These securities experienced slower prepayments which had the effect of
reducing premium amortization and increasing yields. Yields on floating
rate securities, many of which have coupons that are indexed to either
LIBOR or the Prime rate, increased following the decision by the Federal
Reserve to raise the target Federal Funds rate by 25 bp in December of
2016.
-- Yields on loans decreased by 7 bp compared to the previous quarter, as
we experienced some payoffs and also added loans at lower yields. The
compression in loan yields was partially offset by higher yields on
floating rate loans following the decision by the Federal Reserve to
raise the target Federal Funds rate by 25 bp in December of 2016.
-- Cost of funds was 0.36%, compared to 0.38% for the previous quarter as
we paid off some borrowings and higher cost time deposits.
The following table analyzes changes in net interest income comparing the fourth quarter of 2016 to the previous quarter and to the quarter ended December 31, 2015. Changes in tax-exempt income are presented on a tax-equivalent basis.
Quarters Ended
(Dollars in thousands) December 31, 2016 vs. September 30, 2016 December 31, 2016 vs. December 31, 2015
Increase (Decrease) Due to Changes in:
Increase (Decrease) Due to Changes in:
Volume Rate Total Volume Rate Total
------ ---- ----- ------ ---- -----
Earning Assets:
Securities:
Taxable $(50) $210 $160 $(168) $(66) $(234)
Tax-exempt (21) - (21) (34) (45) (79)
Loans:
Taxable (85) (139) (224) 506 (101) 405
Tax-exempt - (1) (1) - (1) (1)
Interest on deposits with other banks and federal funds
sold (2) 8 6 (1) 20 19
--- --- --- --- --- ---
Total earning assets $(158) $78 $(80) $303 $(193) $110
----- --- ---- ---- ----- ----
Interest-Bearing Liabilities:
Checking $(2) $(1) $(3) $ - $14 $14
Regular savings 1 - 1 3 - 3
Money market savings 4 (1) 3 3 9 12
Time deposits:
$100,000 and over (26) - (26) (7) (3) (10)
Under $100,000 (21) 2 (19) 13 (49) (36)
--- --- --- --- --- ---
Total interest-bearing deposits $(44) $ - $(44) $12 $(29) $(17)
Securities sold under agreements to repurchase - - - - 1 1
FHLB borrowings and other debt (57) 29 (28) (15) 23 8
--- --- --- --- --- ---
Total interest-bearing liabilities $(101) $29 $(72) $(3) $(5) $(8)
----- --- ---- --- --- ---
Change in net interest income $(57) $49 $(8) $306 $(188) $118
==== === === ==== ===== ====
Comparing the fourth quarter of 2016 to the previous quarter, the table shows that the increase in interest income for securities was primarily due to higher yields stemming from reduced premium amortization on amortizing securities. We continue to manage the investment portfolio with a focus on liquidity while retaining a balance between fixed and floating rate investments. The decrease in interest income from loans in the fourth quarter relative to the previous quarter came from payoff activity accompanied by lower yields on new loan originations. Interest income from securities in the fourth quarter of 2016 was lower compared to the same quarter in 2015 as we sold some higher yielding securities in the fourth quarter of 2016 and used proceeds to fund loans and also pay off borrowings and maturing time deposits. Interest income from loans in the fourth quarter of 2016 was higher relative to the same period in 2015 primarily as a result of growth in loan balances in 2016. Competition for good credits continues to pressure loan rates.
Non-Interest Income
Non-interest income for the fourth quarter of 2016 increased by 74.51% compared to the previous quarter and was higher by 66.14% compared to the quarter ended December 31, 2015.
-- Total revenue generated by our wealth management group, Middleburg
Investment Group ("MIG") increased by 1.46% to $1.19 million compared to
the previous quarter and increased by 2.51% compared to the same quarter
in 2015. Fee income is primarily based upon the market value of assets
under administration which were $1.93 billion at December 31, 2016.
-- Net gains from securities sold were $1.04 million for the fourth quarter
and $1.55 million for the full year 2016. Securities were sold in order
to fund loan originations and also to pay off borrowings and high cost
maturing time deposits.
-- Other operating income was $894,000 for the quarter ended December 31,
2016, an increase of 557.35% compared to the previous quarter and an
increase of 102.26% compared to the quarter ended December 31, 2015. In
the fourth quarter of 2016, there was a substantial recovery of
approximately $191,000 in expenses related to an overdrawn deposit
account that had previously been charged off and also insurance proceeds
of approximately $560,000 were received related to previously incurred
storm damage to two of our financial service centers.
NON-INTEREST EXPENSE
Non-interest expense for the fourth quarter of 2016 increased by 9.22% compared to the previous quarter and by 23.13% compared to the same period in 2015. Principal categories of non-interest expense that changed were the following:
-- Salaries and employee benefit expense decreased to $4.61 million for the
current quarter compared to $4.73 million for the prior quarter and
increased by 22.12% when compared to the same period in 2015. The
increase in salary and benefit expenses in the fourth quarter of 2016
relative to the same period in 2015 was due to higher incentive accruals
in the fourth quarter of 2016.
-- Costs related to other real estate owned (OREO) decreased by $159,000
when compared to the prior quarter and increased by $25,000 when
compared to the same period in 2015. OREO expenses were higher in the
third quarter of 2016 due to valuation adjustments of $167,000 for
several properties.
-- Expenses from computer operations were $659,000 for the current quarter,
$605,000 for the prior quarter and $801,000 for the quarter ended
December 31, 2015.
-- Legal and advisory fees increased to $1.34 million for the current
quarter compared to $494,000 for the prior quarter and $328,000 for the
quarter ended December 31, 2015. These increases were primarily due to
legal and advisory fees that were incurred in the pending merger with
Access National Corporation.
-- Other operating expenses increased by 21.90% compared to the prior
quarter and increased by 20.81% when compared to the same period in
2015. The primary reason for the increase was a $200,000 impairment of
repossessed assets during the current quarter.
ASSET QUALITY
Total nonperforming assets increased to $25.45 million as of December 31, 2016 compared to $23.77 million at September 30, 2016 and $25.51 million at December 31, 2015.
-- Nonaccrual loans decreased to $6.34 million compared to $6.70 million as
of September 30, 2016 and $8.78 million compared to December 31, 2015.
-- Restructured loans that were accruing were $12.41 million compared to
$12.39 million as of September 30, 2016 and $12.06 million as of
December 31, 2015.
-- Other real estate owned was $5.07 million compared to $3.39 million as
of September 30, 2016 and $3.35 million as of December 31, 2015.
-- Loans past due 90+ days and still accruing were $781,000 as of December
31, 2016 compared to $248,000 as of September 30, 2016 and $278,000 as
of December 31, 2015.
-- Repossessed assets were $843,000 as of December 31, 2016 compared to
$1.04 million as of September 30, 2016 and December 31, 2015.
The Company's allowance for loan and lease losses ("ALLL") was $11.40 million or 1.33% of total loans at December 31, 2016 compared to $11.05 million or 1.37% of total loans at December 31, 2015. The Company recorded a provision for loan losses of $1.80 million in the fourth quarter of 2016 compared to a recovery of provision of $297,000 in the previous quarter and a provision for loan losses of $2.70 million for the same period in 2015.
CONSOLIDATED ASSETS
Total consolidated assets at December 31, 2016 were $1.27 billion, lower by 1.72% since December 31, 2015. Changes in major asset categories were as follows:
-- Cash balances and deposits with other banks decreased by $10.68 million
compared to December 31, 2015.
-- The securities portfolio decreased by $66.53 million compared to
December 31, 2015, as we sold some securities to fund loans and pay off
borrowings and maturing time deposits.
-- Loans held-for-investment increased to $860.10 million as of December
31, 2016.
CONSOLIDATED LIABILITIES
Total consolidated liabilities at December 31, 2016 were $1.15 billion, a decrease of 2.16% compared to December 31, 2015. Deposits grew by $12.26 million for the full year 2016 to $1.05 billion as of December 31, 2016. Federal Home Loan Bank ("FHLB") borrowings decreased by $45.50 million from December 31, 2015 to $39.50 million at December 31, 2016.
SHAREHOLDERS' EQUITY AND CAPITAL
Shareholders' equity at December 31, 2016 was $126.68 million, compared to $123.55 million at December 31, 2015. Retained earnings at December 31, 2016 were $64.76 million compared to $60.39 million at December 31, 2015. During the quarter, the Company did not make any purchases under its share repurchase authorization and expects to refrain from any repurchases in deference to the pending merger. The tangible book value of the Company's common stock at December 31, 2016 was $17.10 per share versus $16.93 per share at December 31, 2015.
The Company's capital ratios remain well above regulatory minimum capital ratios as of December 31, 2016:
-- Tier 1 Leverage ratio was 9.73%, 5.73% over the regulatory minimum of
4.00% to be well capitalized.
-- Common Equity Tier 1 Ratio was 15.61%, 8.61% over the regulatory minimum
of 7.00% to be well capitalized.
-- Tier 1 Risk-Based Capital Ratio was 16.25%, 7.75% over the regulatory
minimum of 8.50% to be well capitalized.
-- Total Risk Based Capital Ratio was 17.50%, 7.00% over the regulatory
minimum of 10.50% to be well capitalized.
Caution about Forward Looking Statements
Certain information contained in this release 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. Risk and uncertainties related to the pending merger with Access National include, among others, ability to obtain regulatory approvals and meet other closing conditions to the transaction; delays in closing the transaction; changes in asset quality and credit risk; changes in interest rates and capital markets; the introduction, timing and success of business initiatives; competitive conditions; and the inability to recognize cost savings or revenues or to implement integration plans associated with the transaction. Annualized, pro forma, projected, and estimated numbers are used for illustrative purposes only, may not reflect actual results and may not be relied upon. For details on other 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, 2015, and other filings with the Securities and Exchange Commission.
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.
Additional Information About the Proposed Transaction and Where to Find It
Investors are urged to review carefully and consider all public filings by Access National and Middleburg with the Securities and Exchange Commission (the "SEC"), including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Quarterly Reports on Form 10-Q, and their Current Reports on Form 8-K. The documents filed with the SEC may be obtained free of charge at the SEC's website at www.sec.gov. The documents filed by Access National with the SEC may also be obtained free of charge at Access National's website at www.accessnationalbank.com or by requesting them in writing to Access National Corporation, 1800 Robert Fulton Drive, Suite 300, Reston, VA 20191, Attention: Investor Relations. The documents filed by Middleburg with the SEC may also be obtained free of charge at Middleburg's website at www.middleburgbank.com or by requested them in writing to Middleburg Financial Corporation, 111 West Washington Street, Middleburg, Virginia 20117, Attention: Investor Relations.
In connection with the proposed transaction, Access National has filed a registration statement on Form S-4 with the SEC which includes a joint proxy statement of Access National and Middleburg and a prospectus of Access National. Once the registration statement is declared effective, a definitive joint proxy statement/prospectus will be sent to the shareholders of each company seeking the required shareholder approvals. Before making any voting or investment decision, investors and security holders of Access National and Middleburg are urged to read carefully the entire registration statement and joint proxy statement/prospectus when they become available, including any amendments thereto, because they will contain important information about the proposed transaction. Free copies of these documents may be obtained as described above.
Access National, Middleburg and certain of their directors and executive officers may be deemed participants in the solicitation of proxies from Access National and Middleburg shareholders in connection with the proposed transaction. Information about the directors and officers of Access National and their ownership of Access National common stock is set forth in the definitive proxy statement for Access National's 2016 annual meeting of shareholders, as previously filed with the SEC on April 18, 2016. Information about the directors and officers of Middleburg and their ownership of Middleburg common stock is set forth in the definitive proxy statement for Middleburg's 2016 annual meeting of shareholders, as previously filed with the SEC on April 12, 2016. Investors may obtain additional information regarding the interests of such participants by reading the registration statement and the joint proxy statement/prospectus when they become available. Free copies of these documents may be obtained as described above.
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except for share and per share data)
(Unaudited)
December 31, December 31, 2015
2016
----
ASSETS
Cash and due from banks $6,989 $5,489
Interest bearing deposits with
other banks 21,555 33,739
------ ------
Total cash and cash equivalents 28,544 39,228
Securities held to maturity,
fair value of $10,095 and
$4,163, respectively 10,683 4,207
Securities available for sale,
at fair value 301,567 374,571
Restricted securities, at cost 4,542 6,411
Loans, net of allowance for loan
losses of $11,404 and $11,046,
respectively 848,693 794,635
Premises and equipment, net 19,021 19,531
Goodwill and identified
intangibles, net 3,465 3,636
Other real estate owned, net of
valuation allowance 5,073 3,345
Bank owned life insurance 23,925 23,273
Accrued interest receivable and
other assets 27,130 26,026
------ ------
TOTAL ASSETS $1,272,643 $1,294,863
========== ==========
LIABILITIES
Deposits:
Non-interest bearing demand
deposits $248,567 $235,897
Savings and interest bearing
demand deposits 578,851 560,328
Time deposits 225,640 244,575
------- -------
Total deposits 1,053,058 1,040,800
Securities sold under agreements
to repurchase 34,864 26,869
Federal Home Loan Bank
borrowings 39,500 85,000
Subordinated notes 5,155 5,155
Accrued interest payable and
other liabilities 13,387 13,485
------ ------
TOTAL LIABILITIES 1,145,964 1,171,309
--------- ---------
Commitments and contingencies
SHAREHOLDERS' EQUITY
Common stock ($2.50 par value;
20,000,000 shares authorized,
7,205,066 and 7,085,217, issued
and outstanding, respectively) 17,608 17,330
Capital surplus 45,716 44,155
Retained earnings 64,755 60,392
Accumulated other comprehensive
income (loss) (1,400) 1,677
------ -----
TOTAL SHAREHOLDERS' EQUITY 126,679 123,554
------- -------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,272,643 $1,294,863
========== ==========
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except for per share data)
(Unaudited)
For the For the
Three Months Ended December 31, Twelve Months Ended
December 31,
------------
2016 2015 2016 2015
---- ---- ---- ----
INTEREST INCOME
Interest and fees on loans $8,398 $7,995 $33,795 $32,479
Interest and dividends on securities
Taxable 1,756 1,992 7,406 7,628
Tax-exempt 397 449 1,700 1,803
Dividends 72 69 310 265
Interest on deposits with other banks and federal funds sold 41 22 164 106
--- --- --- ---
Total interest and dividend income 10,664 10,527 43,375 42,281
------ ------ ------ ------
INTEREST EXPENSE
Interest on deposits 865 882 3,535 3,462
Interest on securities sold under agreements to repurchase 1 - 3 64
Interest on FHLB borrowings and other debt 182 174 886 681
--- --- --- ---
Total interest expense 1,048 1,056 4,424 4,207
----- ----- ----- -----
NET INTEREST INCOME 9,616 9,471 38,951 38,074
Provision for loan losses 1,800 2,700 1,853 2,293
----- ----- ----- -----
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 7,816 6,771 37,098 35,781
----- ----- ------ ------
NON-INTEREST INCOME
Service charges on deposit accounts 286 258 1,154 1,061
Trust services income 1,185 1,156 4,643 4,785
ATM fee income, net 197 204 762 797
Gains (losses) on sales of loans held for sale, net 9 (4) 32 (1)
Gains on sales of securities available for sale, net 1,043 2 1,554 140
Commissions on investment sales 138 132 555 547
Bank owned life insurance 164 167 652 656
Other operating income 894 442 1,386 1,636
--- --- ----- -----
Total non-interest income 3,916 2,357 10,738 9,621
----- ----- ------ -----
NON-INTEREST EXPENSE
Salaries and employee benefits 4,605 3,771 18,757 18,435
Occupancy and equipment 1,317 1,383 5,254 5,436
Amortization 210 193 838 671
Computer operations 659 801 2,582 2,337
Other real estate owned, net 24 (1) 363 284
Other taxes 238 231 947 915
Federal deposit insurance 142 203 748 786
Audits and exams 136 114 589 585
Legal and advisory fees 1,342 328 2,407 1,029
Other operating expenses 1,347 1,115 4,474 4,379
----- ----- ----- -----
Total non-interest expense 10,020 8,138 36,959 34,857
------ ----- ------ ------
Income before income taxes 1,712 990 10,877 10,545
Income tax expense 620 209 2,813 2,715
--- --- ----- -----
NET INCOME $1,092 $781 $8,064 $7,830
====== ==== ====== ======
Earnings per share:
Basic $0.15 $0.11 $1.13 $1.10
Diluted $0.15 $0.11 $1.13 $1.09
Dividends per common share $0.13 $0.13 $0.52 $0.46
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
Quarterly Summary of Consolidated Statements of Income
(Unaudited, Dollars In thousands, except for per share data)
For the Three Months Ended
December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
INTEREST INCOME
Interest and fees on loans $8,398 $8,624 $8,543 $8,230 $7,995
Interest and dividends on securities
Taxable 1,756 1,585 1,992 2,073 1,992
Tax-exempt 397 411 440 452 449
Dividends 72 82 87 69 69
Interest on deposits with other banks and federal funds sold 41 35 40 48 22
--- --- --- --- ---
Total interest and dividend income 10,664 10,737 11,102 10,872 10,527
------ ------ ------ ------ ------
INTEREST EXPENSE
Interest on deposits 865 909 890 871 882
Interest on securities sold under agreements to repurchase 1 1 - 1 -
Interest on FHLB borrowings and other debt 182 210 243 251 174
--- --- --- --- ---
Total interest expense 1,048 1,120 1,133 1,123 1,056
----- ----- ----- ----- -----
NET INTEREST INCOME 9,616 9,617 9,969 9,749 9,471
Provision for (recovery of) loan losses 1,800 (297) 50 300 2,700
----- ---- --- --- -----
NET INTEREST INCOME AFTER PROVISION FOR (RECOVERY OF) LOAN LOSSES 7,816 9,914 9,919 9,449 6,771
----- ----- ----- ----- -----
NON-INTEREST INCOME
Service charges on deposit accounts 286 303 286 279 258
Trust services income 1,185 1,168 1,132 1,158 1,156
ATM fee income, net 197 190 211 164 204
Gains (losses) on sales of loans held for sale, net 9 11 3 9 (4)
Gains on sales of securities available for sale, net 1,043 138 210 163 2
Commissions on investment sales 138 133 152 132 132
Bank owned life insurance 164 165 163 160 167
Other operating income 894 136 213 143 442
--- --- --- --- ---
Total non-interest income 3,916 2,244 2,370 2,208 2,357
----- ----- ----- ----- -----
NON-INTEREST EXPENSE
Salaries and employee benefits 4,605 4,727 4,613 4,812 3,771
Occupancy and equipment 1,317 1,262 1,261 1,414 1,383
Amortization 210 210 209 209 193
Computer operations 659 605 598 720 801
Other real estate owned, net 24 183 (11) 167 (1)
Other taxes 238 237 237 235 231
Federal deposit insurance 142 215 216 175 203
Audits and exams 136 136 165 152 114
Legal and advisory fees 1,342 494 350 221 328
Other operating expenses 1,347 1,105 1,113 909 1,115
----- ----- ----- --- -----
Total non-interest expense 10,020 9,174 8,751 9,014 8,138
------ ----- ----- ----- -----
Income before income taxes 1,712 2,984 3,538 2,643 990
Income tax expense 620 720 885 588 209
--- --- --- --- ---
NET INCOME $1,092 $2,264 $2,653 $2,055 $781
====== ====== ====== ====== ====
Earnings per share:
Basic $0.15 $0.32 $0.37 $0.29 $0.11
Diluted $0.15 $0.32 $0.37 $0.29 $0.11
Dividends per common share $0.13 $0.13 $0.13 $0.13 $0.13
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
Selected Financial Data by Quarter
(Unaudited, Dollars in thousands, except for per share data)
December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
BALANCE SHEET RATIOS
Loans to deposits 77.50% 77.50% 80.90% 76.07% 77.41%
Average interest-earning assets to average interest-bearing liabilities 134.84% 134.84% 133.31% 132.30% 136.05%
INCOME STATEMENT RATIOS
Return on average assets (ROA) 0.33% 0.68% 0.80% 0.63% 0.24%
Return on average equity (ROE) 3.36% 7.01% 8.47% 6.63% 2.45%
Net interest margin (1) 3.17% 3.11% 3.26% 3.24% 3.17%
Yield on average earning assets 3.51% 3.47% 3.63% 3.60% 3.52%
Yield on securities 2.73% 2.49% 2.92% 2.95% 2.83%
Yield on loans 3.96% 4.03% 4.11% 4.09% 4.01%
Cost of funds 0.36% 0.38% 0.38% 0.39% 0.37%
Efficiency ratio (5) 77.87% 74.43% 70.08% 73.22% 67.21%
PER SHARE DATA
Dividends $0.13 $0.13 $0.13 $0.13 $0.13
Book value 17.58 18.15 18.03 17.65 17.44
Tangible book value (4) 17.10 17.66 17.53 17.14 16.93
SHARE PRICE DATA
Closing price $34.75 $28.28 $27.20 $21.60 $18.48
Diluted earnings multiple (2) 57.92 22.27 18.26 18.52 16.95
Book value multiple (3) 1.98 1.56 1.51 1.22 1.06
COMMON STOCK DATA
Outstanding shares at end of period 7,205,066 7,103,358 7,101,390 7,094,602 7,085,217
Weighted average shares outstanding, basic 7,164,847 7,103,235 7,100,226 7,076,775 7,152,844
Weighted average shares outstanding, diluted 7,197,569 7,160,164 7,153,917 7,107,380 7,171,498
Dividend payout ratio 86.67% 40.63% 35.14% 44.83% 118.18%
CAPITAL RATIOS
Capital to assets 9.95% 9.66% 9.74% 9.29% 9.54%
Leverage ratio 9.73% 9.59% 9.45% 9.40% 9.59%
Common equity tier 1 ratio 15.61% 15.92% 15.44% 15.56% 15.61%
Tier 1 risk based capital ratio 16.25% 16.57% 16.08% 16.22% 16.27%
Total risk based capital ratio 17.50% 17.83% 17.34% 17.47% 17.52%
CREDIT QUALITY
Net charge-offs (recoveries) to average loans 0.19% (0.004)% (0.018)% 0.002% 0.39%
Total nonperforming loans to total loans 2.27% 2.29% 2.29% 2.46% 2.62%
Total nonperforming assets to total assets 2.00% 1.78% 1.84% 1.86% 1.97%
Nonaccrual loans to:
Total loans 0.73% 0.79% 0.82% 0.94% 1.09%
Total assets 0.50% 0.50% 0.53% 0.57% 0.68%
Allowance for loan losses to:
Total loans 1.33% 1.32% 1.35% 1.37% 1.37%
Nonperforming assets 44.82% 47.12% 47.72% 45.22% 43.30%
Nonaccrual loans 179.90% 167.09% 165.24% 146.25% 125.75%
NONPERFORMING ASSETS
Loans delinquent 90+ days and still accruing $781 $248 $179 $511 $278
Nonaccrual loans 6,339 6,703 6,976 7,747 8,784
Restructured loans (not in nonaccrual) 12,410 12,386 12,407 12,027 12,058
Other real estate owned 5,073 3,387 3,553 3,727 3,345
Repossessed assets 843 1,043 1,043 1,043 1,043
--- ----- ----- ----- -----
Total nonperforming assets $25,446 $23,767 $24,158 $25,055 $25,508
======= ======= ======= ======= =======
(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 services 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.
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
Average Balances, Income and Expenses, Yields and Rates
(Unaudited)
Three months ended December 31,
2016 2015
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate (2) Balance Expense Rate (2)
------- ------- ------- ------- ------- -------
(Dollars in thousands)
Assets:
Securities:
Taxable $304,429 $1,828 2.39% $332,163 $2,061 2.46%
Tax-exempt (1) 49,236 602 4.86% 51,884 681 5.21%
------ --- ------ ---
Total securities $353,665 $2,430 2.73% $384,047 $2,742 2.83%
Loans:
Taxable $842,541 $8,394 3.96% $791,590 $7,989 4.00%
Tax-exempt (1) 540 7 5.16% 578 8 5.49%
--- --- --- ---
Total loans (3) $843,081 $8,401 3.96% $792,168 $7,997 4.01%
Interest on deposits with other banks and federal funds sold 36,373 41 0.45% 38,348 22 0.23%
------ --- ------ ---
Total earning assets $1,233,119 $10,872 3.51% $1,214,563 $10,761 3.52%
Less: allowance for loan losses (11,169) (11,733)
Total nonearning assets 81,596 79,695
------ ------
Total assets $1,303,546 $1,282,525
========== ==========
Liabilities:
Interest-bearing deposits:
Checking $345,794 $191 0.22% $345,525 $177 0.20%
Regular savings 132,795 62 0.19% 125,947 59 0.19%
Money market savings 83,720 52 0.25% 78,918 40 0.20%
Time deposits:
$100,000 and over 141,318 310 0.87% 144,440 320 0.88%
Under $100,000 107,087 250 0.93% 102,586 286 1.11%
------- --- ------- ---
Total interest-bearing deposits $810,714 $865 0.42% $797,416 $882 0.44%
Securities sold under agreements to repurchase 34,382 1 0.01% 28,663 - - %
FHLB borrowings and other debt 55,818 182 1.30% 66,677 174 1.03%
Federal funds purchased 54 - - % - - - %
--- --- --- ---
Total interest-bearing liabilities $900,968 $1,048 0.46% $892,756 $1,056 0.47%
Non-interest bearing liabilities:
Demand deposits 259,706 248,536
Other liabilities 13,644 15,016
------ ------
Total liabilities $1,174,318 $1,156,308
Shareholders' equity 129,228 126,217
------- -------
Total liabilities and shareholders' equity $1,303,546 $1,282,525
========== ==========
Net interest income $9,824 $9,705
====== ======
Interest rate spread 3.04% 3.05%
Cost of Funds 0.36% 0.37%
Interest expense as a percent of average earning assets 0.34% 0.34%
Net interest margin 3.17% 3.17%
(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 366
day year for 2016 and 365
day year for 2015.
(3) Total average loans include
loans on non-accrual
status.
MIDDLEBURG FINANCIAL CORPORATION AND SUBSIDIARIES
Average Balances, Income and Expenses, Yields and Rates
(Unaudited)
Twelve months ended December 31,
2016 2015
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate (2) Balance Expense Rate (2)
------- ------- ------- ------- ------- -------
(Dollars in thousands)
Assets:
Securities:
Taxable $320,250 $7,716 2.41% $319,705 $7,893 2.47%
Tax-exempt (1) 50,373 2,576 5.11% 51,732 2,732 5.28%
------ ----- ------ -----
Total securities $370,623 $10,292 2.78% $371,437 $10,625 2.86%
Loans:
Taxable $834,810 $33,773 4.05% $771,207 $32,457 4.21%
Tax-exempt (1) 604 33 5.46% 609 33 5.42%
--- --- --- ---
Total loans (3) $835,414 $33,806 4.05% $771,816 $32,490 4.21%
Interest on deposits with other banks and federal funds sold 40,672 164 0.40% 49,201 106 0.22%
------ --- ------ ---
Total earning assets $1,246,709 $44,262 3.55% $1,192,454 $43,221 3.62%
Less: allowance for loan losses (11,311) (11,853)
Total nonearning assets 80,980 77,456
------ ------
Total assets $1,316,378 $1,258,057
========== ==========
Liabilities:
Interest-bearing deposits:
Checking $351,764 $767 0.22% $343,026 $693 0.20%
Regular savings 130,357 241 0.18% 119,989 223 0.19%
Money market savings 77,763 185 0.24% 70,239 136 0.19%
Time deposits:
$100,000 and over 146,406 1,290 0.88% 138,860 1,220 0.88%
Under $100,000 111,097 1,052 0.95% 106,023 1,190 1.12%
------- ----- ------- -----
Total interest-bearing deposits $817,387 $3,535 0.43% $778,137 $3,462 0.44%
Securities sold under agreements to repurchase 31,076 3 0.01% 30,095 64 0.21%
FHLB borrowings and other debt 79,751 886 1.11% 68,977 681 0.99%
Federal funds purchased 15 - - % 1 - - %
--- --- --- ---
Total interest-bearing liabilities $928,229 $4,424 0.48% $877,210 $4,207 0.48%
Non-interest bearing liabilities:
Demand deposits 247,214 241,996
Other liabilities 13,832 13,602
------ ------
Total liabilities $1,189,275 $1,132,808
Shareholders' equity 127,103 125,249
------- -------
Total liabilities and shareholders' equity $1,316,378 $1,258,057
========== ==========
Net interest income $39,838 $39,014
======= =======
Interest rate spread 3.07% 3.14%
Cost of Funds 0.38% 0.38%
Interest expense as a percent of average earning assets 0.35% 0.35%
Net interest margin 3.20% 3.27%
(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 366
day year for 2016 and 365
day year for 2015.
(3) Total average loans include
loans on non-accrual
status.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/middleburg-financial-corporation-announces-fourth-quarter-2016-results-300398746.html
SOURCE Middleburg Financial Corporation
