Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting Disclosures

 v2.3.0.11
Segment Reporting Disclosures
 6 Months Ended
Jun. 30, 2011
Segment Reporting Disclosures  
Segment Reporting Disclosures
7. SEGMENT REPORTING DISCLOSURES

The Company has two reportable segments: a traditional full service community bank and a mortgage loan origination business. The community bank segment provides loan, deposit, investment, and trust services to retail and commercial customers throughout its 99 retail locations in Virginia. The mortgage segment 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 subject the Company to only de minimus 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 their customers for the mortgage loan origination business. The mortgage segment offers a more limited referral network for the bank, 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%. 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 three and six months ended June 30, 2011 and 2010 was as follows (dollars in thousands):

 

     Community
Banks		      Mortgage      Eliminations     Consolidated  

Three Months Ended June 30, 2011

           

Net interest income

    $ 39,341       $ 282       $ —        $ 39,623   

Provision for loan losses

      4,500         —           —          4,500   
  

 

 

     

 

 

     

 

 

    

 

 

  

Net interest income after provision for loan losses

      34,841         282         —          35,123   

Noninterest income

      5,777         4,304         (118 )      9,963   

Noninterest expenses

      31,665         4,325         (118 )      35,872   
  

 

 

     

 

 

     

 

 

    

 

 

  

Income before income taxes

      8,953         261         —          9,214   

Income tax expense

      2,299         95         —          2,394   
  

 

 

     

 

 

     

 

 

    

 

 

  

Net income

    $ 6,654       $ 167       $ —        $ 6,820   
  

 

 

     

 

 

     

 

 

    

 

 

  

Total assets

    $ 3,846,714       $ 57,215       $ (52,405 )    $ 3,851,524   
  

 

 

     

 

 

     

 

 

    

 

 

  

Three Months Ended June 30, 2010

           

Net interest income

    $ 38,965       $ 602       $ —        $ 39,567   

Provision for loan losses

      3,955         —           —          3,955   
  

 

 

     

 

 

     

 

 

    

 

 

  

Net interest income after provision for loan losses

      35,010         602         —          35,612   

Noninterest income

      6,964         5,254         (118 )      12,101   

Noninterest expenses

      30,663         4,603         (118 )      35,148   
  

 

 

     

 

 

     

 

 

    

 

 

  

Income before income taxes

      11,311         1,253         —          12,565   

Income tax expense

      3,383         456         —          3,839   
  

 

 

     

 

 

     

 

 

    

 

 

  

Net income

    $ 7,928       $ 797       $ —        $ 8,726   
  

 

 

     

 

 

     

 

 

    

 

 

  

Total assets

    $ 3,865,549       $ 81,857       $ (73,207 )    $ 3,874,199   
  

 

 

     

 

 

     

 

 

    

 

 

  

Six Months Ended June 30, 2011

           

Net interest income

    $ 77,654       $ 769       $ —        $ 78,423   

Provision for loan losses

      10,800         —           —          10,800   
  

 

 

     

 

 

     

 

 

    

 

 

  

Net interest income after provision for loan losses

      66,854         769         —          67,623   

Noninterest income

      11,472         9,272         (234 )      20,510   

Noninterest expenses

      61,621         9,252         (234 )      70,639   
  

 

 

     

 

 

     

 

 

    

 

 

  

Income before income taxes

      16,705         789         —          17,494   

Income tax expense

      4,186         294         —          4,480   
  

 

 

     

 

 

     

 

 

    

 

 

  

Net income

    $ 12,519       $ 495       $ —        $ 13,014   
  

 

 

     

 

 

     

 

 

    

 

 

  

Total assets

    $ 3,846,714       $ 57,215       $ (52,405 )    $ 3,851,524   
  

 

 

     

 

 

     

 

 

    

 

 

  

Six Months Ended June 30, 2010

           

Net interest income

    $ 72,743       $ 984       $ —        $ 73,727   

Provision for loan losses

      8,956         —           —          8,956   
  

 

 

     

 

 

     

 

 

    

 

 

  

Net interest income after provision for loan losses

      63,787         984         —          64,771   

Noninterest income

      12,329         9,746         (235 )      21,840   

Noninterest expenses

      63,674         8,509         (235 )      71,948   
  

 

 

     

 

 

     

 

 

    

 

 

  

Income before income taxes

      12,442         2,221         —          14,663   

Income tax (benefit) expense

      3,394         844         —          4,238   
  

 

 

     

 

 

     

 

 

    

 

 

  

Net income

    $ 9,048       $ 1,377       $ —        $ 10,425   
  

 

 

     

 

 

     

 

 

    

 

 

  

Total assets

    $ 3,865,549       $ 81,857       $ (73,207 )    $ 3,874,199