Annual report pursuant to Section 13 and 15(d)

SEGMENT REPORTING DISCLOSURES

v2.4.0.8
SEGMENT REPORTING DISCLOSURES
 12 Months Ended
Dec. 31, 2013
SEGMENT REPORTING DISCLOSURES [Abstract]  
SEGMENT REPORTING DISCLOSURES

 

 

17.SEGMENT REPORTING DISCLOSURES

 

The Company has two reportable segments: a traditional full service community bank and a mortgage loan origination business. The community bank business for 2013 includes one subsidiary bank, which provides loan, deposit, investment, and trust services to retail and commercial customers throughout its 90 retail locations in Virginia.  The mortgage segment includes one mortgage company, which provides a variety of mortgage loan products principally in Virginia, North Carolina, South Carolina, Maryland, and the Washington D.C. metro area.  These loans are originated and sold primarily in the secondary market through purchase commitments from investors, which serves to mitigate the Company’s exposure to interest rate risk.

Profit and loss is measured by net income after taxes including realized gains and losses on the Company’s investment portfolio.  The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.  Inter-segment transactions are recorded at cost and eliminated as part of the consolidation process.

Both of the Company’s reportable segments are service-based.  The mortgage business is a fee-based business while the bank is driven principally by net interest income.  The bank segment provides a distribution and referral network through its customers for the mortgage loan origination business.  The mortgage segment offers a more limited referral network for the bank segment, due largely to the minimal degree of overlapping geographic markets.

 

The community bank segment provides the mortgage segment with the short-term funds needed to originate mortgage loans through a warehouse line of credit and charges the mortgage banking segment interest at the three month LIBOR rate plus 1.5%, floor of 2%.  These transactions are eliminated in the consolidation process.  A management fee for operations and administrative support services is charged to all subsidiaries and eliminated in the consolidated totals.

 

Information about reportable segments and reconciliation of such information to the consolidated financial statements for years ended December 31, 2013, 2012, and 2011 is as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Community Bank

 

Mortgage

 

Eliminations

 

Consolidated

For the Year Ended December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
149,975 

 

$
1,651 

 

$

 -

 

$
151,626 

Provision for loan losses

 
6,056 

 

 

 -

 

 

 -

 

 
6,056 

Net interest income after provision for loan losses

 
143,919 

 

 
1,651 

 

 

 -

 

 
145,570 

Noninterest income

 
27,492 

 

 
11,906 

 

 
(670)

 

 
38,728 

Noninterest expenses

 
120,256 

 

 
17,703 

 

 
(670)

 

 
137,289 

Income before income taxes

 
51,155 

 

 
(4,146)

 

 

 -

 

 
47,009 

Income tax expense

 
14,000 

 

 
(1,487)

 

 

 -

 

 
12,513 

Net income

$
37,155 

 

$
(2,659)

 

$

 -

 

$
34,496 

Total assets

$
4,170,682 

 

$
63,715 

 

$
(57,826)

 

$
4,176,571 

 

 

 

 

 

 

 

 

 

 

 

 

For the Year Ended December 31, 2012

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
153,024 

 

$
1,331 

 

$

 -

 

$
154,355 

Provision for loan losses

 
12,200 

 

 

 -

 

 

 -

 

 
12,200 

Net interest income after provision for loan losses

 
140,824 

 

 
1,331 

 

 

 -

 

 
142,155 

Noninterest income

 
24,876 

 

 
16,660 

 

 
(468)

 

 
41,068 

Noninterest expenses

 
119,976 

 

 
13,971 

 

 
(468)

 

 
133,479 

Income before income taxes

 
45,724 

 

 
4,020 

 

 

 -

 

 
49,744 

Income tax expense

 
12,858 

 

 
1,475 

 

 

 -

 

 
14,333 

Net income

$
32,866 

 

$
2,545 

 

$

 -

 

$
35,411 

Total assets

$
4,081,544 

 

$
187,836 

 

$
(173,515)

 

$
4,095,865 

 

 

 

 

 

 

 

 

 

 

 

 

For the Year Ended December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$
155,045 

 

$
1,315 

 

$

 -

 

$
156,360 

Provision for loan losses

 
16,800 

 

 

 -

 

 

 -

 

 
16,800 

Net interest income after provision for loan losses

 
138,245 

 

 
1,315 

 

 

 -

 

 
139,560 

Noninterest income

 
22,382 

 

 
11,050 

 

 
(468)

 

 
32,964 

Noninterest expenses

 
121,490 

 

 
9,793 

 

 
(468)

 

 
130,815 

Income before income taxes

 
39,137 

 

 
2,572 

 

 

 -

 

 
41,709 

Income tax expense

 
10,304 

 

 
960 

 

 

 -

 

 
11,264 

Net income

$
28,833 

 

$
1,612 

 

$

 -

 

$
30,445 

Total assets

$
3,904,013 

 

$
84,445 

 

$
(81,371)

 

$
3,907,087