Annual report pursuant to Section 13 and 15(d)

Segment Reporting

v2.4.0.6
Segment Reporting
 12 Months Ended
Dec. 31, 2012
Segment Reporting [Abstract]  
SEGMENT REPORTING
17. SEGMENT REPORTING

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 90 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 the years ended December 31, 2012, 2011, and 2010 are as follows (dollars in thousands):

 

                                 
    Community
Bank		     Mortgage     Eliminations     Consolidated
Totals		  

For the Year Ended December 31, 2012

                        

Net interest income

   $ 153,024     $ 1,331     $ —       $ 154,355  

Provision for loan losses

     12,200       —         —         12,200  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

     140,824       1,331       —         142,155  

Noninterest income

     24,876       16,660       (468 )      41,068  

Noninterest expenses

     119,976       13,971       (468 )      133,479  
   

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

     45,724       4,020       —         49,744  

Income tax expense

     12,858       1,475       —         14,333  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net income

   $ 32,866     $ 2,545     $ —       $ 35,411  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Total assets

   $ 4,081,544     $ 187,836     $ (173,515 )    $ 4,095,865  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

For the Year Ended December 31, 2011

                        

Net interest income

   $ 155,045     $ 1,315     $ —       $ 156,360  

Provision for loan losses

     16,800       —         —         16,800  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

     138,245       1,315       —         139,560  

Noninterest income

     22,382       11,050       (468 )      32,964  

Noninterest expenses

     121,490       9,793       (468 )      130,815  
   

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

     39,137       2,572       —         41,709  

Income tax expense

     10,304       960       —         11,264  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net income

   $ 28,833     $ 1,612     $ —       $ 30,445  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Total assets

   $ 3,904,013     $ 84,445     $ (81,371 )    $ 3,907,087  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

For the Year Ended December 31, 2010

                        

Net interest income

   $ 149,353     $ 2,223     $ —       $ 151,576  

Provision for loan losses

     24,368       —         —         24,368  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

     124,985       2,223       —         127,208  

Noninterest income

     22,882       11,803       (468 )      34,217  

Noninterest expenses

     121,381       9,007       (468 )      129,920  
   

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

     26,486       5,019       —         31,505  

Income tax expense

    6,692       1,891       —         8,583  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net income

   $ 19,794     $ 3,128     $ —       $ 22,922  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Total assets

   $ 3,828,954     $ 82,255     $ (73,962 )    $ 3,837,247