Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting Disclosures

v2.4.0.6
Segment Reporting Disclosures
 3 Months Ended
Mar. 31, 2012
Segment Reporting Disclosures [Abstract]  
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 business for 2012 includes one subsidiary bank, which provides loan, deposit, investment, and trust services to retail and commercial customers throughout its 98 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 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% basis points, 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 three months ended March 31, 2012 and 2011 was as follows (dollars in thousands):

 

     Community
Bank		      Mortgage      Eliminations     Consolidated  

Three Months Ended March 31, 2012

           

Net interest income

    $ 38,038       $ 309       $ —        $ 38,347   

Provision for loan losses

      3,500         —           —          3,500   
  

 

 

     

 

 

     

 

 

    

 

 

  

Net interest income after provision for loan losses

      34,538         309         —          34,847   

Noninterest income

      6,637         5,298         (117 )      11,818   

Noninterest expenses

      30,494         5,232         (117 )      35,609   
  

 

 

     

 

 

     

 

 

    

 

 

  

Income before income taxes

      10,681         375         —          11,056   

Income tax expense

      2,992         141         —          3,133   
  

 

 

     

 

 

     

 

 

    

 

 

  

Net income

    $ 7,689       $ 234         —        $ 7,923   
  

 

 

     

 

 

     

 

 

    

 

 

  

Total assets

    $ 3,940,249       $ 83,637       $ (76,087 )    $ 3,947,799   
  

 

 

     

 

 

     

 

 

    

 

 

  

Three Months Ended March 31, 2011

           

Net interest income

    $ 38,313       $ 487       $ —        $ 38,800   

Provision for loan losses

      6,300         —           —          6,300   
  

 

 

     

 

 

     

 

 

    

 

 

  

Net interest income after provision for loan losses

      32,013         487         —          32,500   

Noninterest income

      5,695         4,969         (117 )      10,547   

Noninterest expenses

      29,956         4,928         (117 )      34,767   
  

 

 

     

 

 

     

 

 

    

 

 

  

Income before income taxes

      7,752         528         —          8,280   

Income tax expense

      1,887         199         —          2,086   
  

 

 

     

 

 

     

 

 

    

 

 

  

Net income

    $ 5,865       $ 329       $ —        $ 6,194   
  

 

 

     

 

 

     

 

 

    

 

 

  

Total assets

    $ 3,807,228       $ 55,260       $ (49,788 )    $ 3,812,700