Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting Disclosures

v2.4.0.6
Segment Reporting Disclosures
 6 Months Ended
Jun. 30, 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 94 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 and six months ended June 30, 2012 and 2011 was as follows (dollars in thousands):

 

 

                                 
    Community
Bank		     Mortgage     Eliminations     Consolidated  

Three Months Ended June 30, 2012

                                

Net interest income

   $ 37,792     $ 295     $ —       $ 38,087  

Provision for loan losses

     3,000       —         —         3,000  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

     34,792       295       —         35,087  

Noninterest income

     7,212       7,315       (117 )      14,410  

Noninterest expenses

     31,061       6,820       (117 )      37,764  
   

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

     10,943       790       —         11,733  

Income tax expense

     2,993       320       —         3,313  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net income

   $ 7,950     $ 470     $ —       $ 8,420  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total assets

   $ 3,967,690     $ 110,374     $ (95,776 )    $ 3,982,288  
   

 

 

    

 

 

    

 

 

    

 

 

  

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  
   

 

 

    

 

 

    

 

 

    

 

 

  

Six Months Ended June 30, 2012

                                

Net interest income

   $ 75,830     $ 604     $ —       $ 76,434  

Provision for loan losses

     6,500       —         —         6,500  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

     69,330       604       —         69,934  

Noninterest income

     13,849       12,613       (234 )      26,228  

Noninterest expenses

     61,555       12,052       (234 )      73,373  
   

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

     21,624       1,165       —         22,789  

Income tax expense

     5,985       461       —         6,446  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net income

   $ 15,639     $ 704     $ —       $ 16,343  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total assets

   $ 3,967,690     $ 110,374     $ (95,776 )    $ 3,982,288  
   

 

 

    

 

 

    

 

 

    

 

 

  

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 (benefit) 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