Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting Disclosures

v2.4.0.6
Segment Reporting Disclosures
 3 Months Ended
Mar. 31, 2013
Segment Reporting Disclosures [Abstract]  
SEGMENT REPORTING DISCLOSURES
12. 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 2013 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 includes one mortgage company, which 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%, 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, 2013 and 2012 was as follows (dollars in thousands):

 

                                 
    Community
Bank		     Mortgage     Eliminations     Consolidated  

Three Months Ended March 31, 2013

                                

Net interest income

   $ 37,188     $ 565     $ —       $ 37,753  

Provision for loan losses

     2,050       —         —         2,050  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

     35,138       565       —         35,703  

Noninterest income

     6,146       3,856       (167 )      9,835  

Noninterest expenses

     29,544       4,124       (167 )      33,501  
   

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

     11,740       297       —         12,037  

Income tax expense

     2,934       120       —         3,054  
   

 

 

    

 

 

    

 

 

    

 

 

  

Net income

   $ 8,806     $ 177     $ —       $ 8,983  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total assets

   $ 4,031,302     $ 136,238     $ (116,405 )    $ 4,051,135  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

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

     5,826       2,768       (117 )      8,477  

Noninterest expenses

     29,683       2,702       (117 )      32,268  
   

 

 

    

 

 

    

 

 

    

 

 

  

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