Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting Disclosures

v2.4.0.6
Segment Reporting Disclosures
 9 Months Ended
Sep. 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 nine months ended September 30, 2012 and 2011 was as follows (dollars in thousands):

 

                                 
    Community
Bank		     Mortgage     Eliminations     Consolidated  
Three Months Ended September 30, 2012                                

Net interest income

   $ 38,428     $ 334     $ —       $ 38,762  

Provision for loan losses

     2,400       —         —         2,400  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

     36,028       334       —         36,362  

Noninterest income

     6,750       8,919       (117 )      15,552  

Noninterest expenses

     30,596       7,839       (117 )      38,318  
   

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

     12,182       1,414       —         13,596  

Income tax expense

     3,415       555       —         3,970  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net income

   $ 8,767     $ 859     $ —       $ 9,626  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total assets

   $ 4,020,661     $ 154,181     $ (146,649 )    $ 4,028,193  
   

 

 

    

 

 

    

 

 

    

 

 

  
         
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

     6,665       4,862       (116 )      11,411  

Noninterest expenses

     30,259       4,361       (116 )      34,504  
   

 

 

    

 

 

    

 

 

    

 

 

  

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  
   

 

 

    

 

 

    

 

 

    

 

 

  
         
Nine Months Ended September 30, 2012                                

Net interest income

   $ 114,258     $ 938     $ —       $ 115,196  

Provision for loan losses

     8,900       —         —         8,900  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

     105,358       938       —         106,296  

Noninterest income

     20,805       21,532       (351 )      41,986  

Noninterest expenses

     92,357       19,891       (351 )      111,897  
   

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

     33,806       2,579       —         36,385  

Income tax expense

     9,400       1,016       —         10,416  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net income

   $ 24,406     $ 1,563     $ —       $ 25,969  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total assets

   $ 4,020,661     $ 154,181     $ (146,649 )    $ 4,028,193  
   

 

 

    

 

 

    

 

 

    

 

 

  
         
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

     18,599       14,135       (351 )      32,383  

Noninterest expenses

     92,342       13,614       (351 )      105,605  
   

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

     28,719       1,528       —         30,247  

Income tax (benefit) 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