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Segment Information

9 Months Ended

Sep. 30, 2011

Note 7. Segment Information

The Company's segment information provided below focuses on its three primary lines of business (Segment(s)): Retail Banking, Commercial Banking and Treasury. The financial information presented was derived from the Company's internal profitability reporting system that is used by management to monitor and manage the financial performance of the Company. This information is based on internal management accounting policies which have been developed to reflect the underlying economics of the Segments and, to the extent practicable, to portray each Segment as if it operated on a stand-alone basis. Thus, each Segment, in addition to its direct revenues, expenses, assets and liabilities, includes an allocation of shared support function expenses and corporate overhead. All Segments also include funds transfer adjustments to appropriately reflect the cost of funds on loans made, funding credits on deposits generated, and the cost of maintaining adequate liquidity. Apart from these adjustments, the accounting policies used are similar to those described in Note 1.

Since there are no comprehensive standards for management accounting that are equivalent to accounting principles generally accepted in the United States of America, the information presented may not necessarily be comparable with similar information from other financial institutions. In addition, methodologies used to measure, assign, and allocate certain items may change from time-to-time to reflect, among other things, accounting estimate refinements, changes in risk profiles, changes in customers or product lines, and changes in management structure.

The Retail Banking Segment provides retail banking services including direct and indirect lending, checking, savings, money market and certificate of deposit ("CD") accounts, safe deposit rental, automated teller machines and other traditional and electronic commerce retail banking services to individual customers through the Bank's branch locations. The Retail Banking Segment also provides a variety of mortgage lending products to meet customer needs. The majority of the mortgage loans it originates are sold to a third party mortgage services company, which provides private label loan processing and servicing support for both loans sold and loans retained by the Bank.

The Commercial Banking Segment provides commercial banking services including lending, business checking and deposits, treasury management and other traditional as well as electronic commerce commercial banking services to middle market and small business customers through the Bank's branch locations.

The Treasury segment is responsible for managing the investment portfolio, acquiring wholesale funding for loan activity and assisting in the management of the Company's liquidity and interest rate risk. Information reported internally for performance assessment follows:

	Three Months Ended
	September 30, 2011
	Retail	Commercial	Treasury	Other	Total
	Segment	Segment	Segment	Operations	Company
Net interest income (loss)	$ 1,918	$ 5,476	$ (411)	$ (106)	$ 6,877
Other revenue	2,111	229	-	226	2,566
Other expense	2,607	5,129	45	3,906	11,687
Noncash items
Depreciation	270	-	-	190	460
Provision for loan losses	179	2,221	-	-	2,400
Other intangibles	250	-	-	-	250
Net allocations	1,200	2,489	287	(3,976)	-
Income tax benefit	13	(597)	(22)	-	(606)
Segment profit (loss)	$ (490)	$ (3,537)	$ (721)	$ -	$ (4,748)

Segment assets	$ 178,774	$ 496,275	$ 267,110	$ 66,794	$ 1,008,953

	Three Months Ended
	September 30, 2010
	Retail	Commercial	Treasury	Other	Total
	Segment	Segment	Segment	Operations	Company
Net interest income (loss)	$ 1,197	$ 5,929	$ 497	$ (484)	$ 7,139
Other revenue	2,292	431	401	303	3,427
Other expense	2,555	1,061	52	4,510	8,178
Noncash items
Depreciation	541	2	-	251	794
Provision for loan losses	-	7,250	-	-	7,250
Other intangibles	307	-	-	-	307
Net allocations	1,483	3,020	439	(4,942)	-
Income tax expense (benefit)	648	10,026	(234)	-	10,440
Segment profit (loss)	$ (2,045)	$ (14,999)	$ 641	$ -	$ (16,403)

Goodwill	$ 7,784	$ 8,096	$ -	$ -	$ 15,880
Segment assets	$ 200,119	$ 597,230	$ 282,056	$ 100,279	$ 1,179,684

	Nine Months Ended
	September 30, 2011
	Retail	Commercial	Treasury	Other	Total
	Segment	Segment	Segment	Operations	Company
Net interest income (loss)	$ 5,922	$ 17,293	$ (1,537)	$ (360)	$ 21,318
Other revenue	6,008	681	(120)	805	7,374
Other expense	7,960	7,555	132	12,932	28,579
Noncash items
Depreciation	818	1	-	587	1,406
Provision for loan losses	1,024	8,876	-	-	9,900
Other intangibles	789	-	-	-	789
Net allocations	3,976	8,096	1,002	(13,074)	-
Income tax benefit	(14)	(1,181)	(157)	-	(1,352)
Segment profit (loss)	$ (2,623)	$ (5,373)	$ (2,634)	$ -	$ (10,630)

Segment assets	$ 178,774	$ 496,275	$ 267,110	$ 66,794	$ 1,008,953

	Nine Months Ended
	September 30, 2010
	Retail	Commercial	Treasury	Other	Total
	Segment	Segment	Segment	Operations	Company
Net interest income (loss)	$ 3,420	$ 18,844	$ 2,252	$ (1,720)	$ 22,796
Other revenue	7,781	1,013	(2,109)	870	7,555
Other expense	8,263	4,419	158	13,641	26,481
Noncash items
Depreciation	1,162	6	-	759	1,927
Provision for loan losses	-	24,150	-	-	24,150
Other intangibles	967	-	-	-	967
Net allocations	5,170	8,732	1,348	(15,250)	-
Income tax expense (benefit)	(615)	4,835	(806)	-	3,414
Segment profit (loss)	$ (3,746)	$ (22,285)	$ (557)	$ -	$ (26,588)

Goodwill	$ 7,784	$ 8,096	$ -	$ -	$ 15,880
Segment assets	$ 200,119	$ 597,230	$ 282,056	$ 100,279	$ 1,179,684

- Definition

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

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