Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting Disclosures

v2.3.0.15
Segment Reporting Disclosures
 9 Months Ended
Sep. 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 business 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 nine months ended September 30, 2011 and 2010 was as follows (dollars in thousands):

 

                                 
     Community
Bank		      Mortgage      Eliminations     Consolidated  

Three Months Ended September 30, 2011

                                   

Net interest income

    $ 39,208       $ 238       $ —        $ 39,446   

Provision for loan losses

      3,600         —           —          3,600   
    

 

 

     

 

 

     

 

 

    

 

 

  

Net interest income after provision for loan losses

      35,608         238         —          35,846   

Noninterest income

      6,798         4,862         (116 )      11,544   

Noninterest expenses

      30,392         4,361         (116 )      34,637   
    

 

 

     

 

 

     

 

 

    

 

 

  

Income before income taxes

      12,014         739         —          12,753   

Income tax expense

      3,407         275         —          3,682   
    

 

 

     

 

 

     

 

 

    

 

 

  

Net income

    $ 8,607       $ 464         —        $ 9,071   
    

 

 

     

 

 

     

 

 

    

 

 

  

Total assets

    $ 3,902,362       $ 70,055       $ (57,960 )    $ 3,914,457   
    

 

 

     

 

 

     

 

 

    

 

 

  
         

Three Months Ended September 30, 2010

                                   

Net interest income

    $ 38,100       $ 548       $ —        $ 38,648   

Provision for loan losses

      5,912         —           —          5,912   
    

 

 

     

 

 

     

 

 

    

 

 

  

Net interest income after provision for loan losses

      32,188         548         —          32,736   

Noninterest income

      6,509         5,962         (118 )      12,353   

Noninterest expenses

      28,999         5,103         (118 )      33,984   
    

 

 

     

 

 

     

 

 

    

 

 

  

Income before income taxes

      9,698         1,407         —          11,105   

Income tax expense

      2,525         508         —          3,033   
    

 

 

     

 

 

     

 

 

    

 

 

  

Net income

    $ 7,173       $ 899       $ —        $ 8,072   
    

 

 

     

 

 

     

 

 

    

 

 

  

Total assets

    $ 3,849,574       $ 91,736       $ (81,987 )    $ 3,859,323   
    

 

 

     

 

 

     

 

 

    

 

 

  
         

Nine Months Ended September 30, 2011

                                   

Net interest income

    $ 116,862       $ 1,007       $ —        $ 117,869   

Provision for loan losses

      14,400         —           —          14,400   
    

 

 

     

 

 

     

 

 

    

 

 

  

Net interest income after provision for loan losses

      102,462         1,007         —          103,469   

Noninterest income

      18,270         14,135         (351 )      32,054   

Noninterest expenses

      92,013         13,614         (351 )      105,276   
    

 

 

     

 

 

     

 

 

    

 

 

  

Income before income taxes

      28,719         1,528         —          30,247   

Income tax expense

      7,593         569         —          8,162   
    

 

 

     

 

 

     

 

 

    

 

 

  

Net income

    $ 21,126       $ 959       $ —        $ 22,085   
    

 

 

     

 

 

     

 

 

    

 

 

  

Total assets

    $ 3,902,362       $ 70,055       $ (57,960 )    $ 3,914,457   
    

 

 

     

 

 

     

 

 

    

 

 

  
         

Nine Months Ended September 30, 2010

                                   

Net interest income

    $ 110,844       $ 1,532       $ —        $ 112,376   

Provision for loan losses

      14,868         —           —          14,868   
    

 

 

     

 

 

     

 

 

    

 

 

  

Net interest income after provision for loan losses

      95,976         1,532         —          97,508   

Noninterest income

      18,838         15,706         (351 )      34,193   

Noninterest expenses

      92,671         13,612         (351 )      105,932   
    

 

 

     

 

 

     

 

 

    

 

 

  

Income before income taxes

      22,143         3,626         —          25,769   

Income tax (benefit) expense

      5,919         1,352         —          7,271   
    

 

 

     

 

 

     

 

 

    

 

 

  

Net income

    $ 16,224       $ 2,274       $ —        $ 18,498   
    

 

 

     

 

 

     

 

 

    

 

 

  

Total assets

    $ 3,849,574       $ 91,736       $ (81,987 )    $ 3,859,323