Middleburg Agrees to Buy Stake in Mortgage Banker

Middleburg Financial Corp., the Middleburg, Va.-based holding company for Middleburg Bank, has reported signing a letter of intent to acquire a stake in Southern Trust Mortgage LLC, a regional mortgage banker based in Norfolk, Va.Under the proposed terms of the investment, Middleburg Bank would acquire 40% of Southern Trust in exchange for the contribution of the bank's mortgage division to Southern Trust and the transfer of $6 million in cash and $2 million in the bank's stock to the shareholders of Southern Trust. In addition, Jerry B. Flowers III, Southern Trust's president, and Kim S. Curtis, its chief operating officer, would enter into long-term employment agreements as well as nonsolicitation and noncompetition agreements, Middleburg said. "We are fully aware that the existing mortgage refinancing boom is likely nearing an end," said Joseph L. Boling, Middleburg's chairman, president, and chief executive officer. "However, we are attracted to Southern Trust because of its outstanding management team and its high percentage of purchase originations versus refinancings due to its strong established relationships with Realtors and builders." The bank can be found online at http://www.middleburgbank.com.