Business Segment Information

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

The Company has two reportable segments, including banking activities and mortgage banking activities, which includes mortgage activities at the Bank and at Sidus Financial, a single member LLC with the Bank as the single member. Sidus is headquartered in Greensboro, North Carolina and offers mortgage banking services to its customers throughout the Southeast. The following table details the results of operations for the three and nine months ended September 30, 2012 and 2011 for bank activities and mortgage activities.

During the second quarter of 2012, a decision was made by management to make a change in how the Company's mortgage activities are reported based on the reorganization of the Bank's mortgage division and Sidus. This decision was made to improve overall reporting of its mortgage banking activities which are now analyzed and reviewed as a separate and distinct business segment. This change in reporting segment combines both mortgage activities of the Bank with mortgage activities that were previously reported separately from mortgage activities provided by Sidus. Reclassifications include interest income which was previously presented in other income, commission expenses recorded in salaries that are now recorded as a reduction in mortgage banking activity income, and other miscellaneous expenses previously recorded in other expenses that have been reclassified as a reduction to mortgage banking activity income. In addition, gains on sale of mortgage loans has been reclassified to be reported with mortgage banking income to provide a combined overview of the mortgage banking activity segment. The reclassifications had no effect on net income (loss) or shareholders' equity, as previously reported.

	Bank Activities			Mortgage Activities			Other			Total
	(Amounts in thousands)
For Three Months Ended September 30, 2012
Interest income	$	19,238		$	208		$	—		$	19,446
Interest expense	3,985			61			211			4,257
Net interest income	15,253			147			(211		)	15,189
Provision for loan losses	4,254			(3		)	—			4,251
Net interest income (loss) after provision for loan losses	10,999			150			(211		)	10,938
Other income	3,060			1,599			6			4,665
Other expense	13,589			1,192			11			14,792
Income (loss) before income taxes	470			557			(216		)	811
Income taxes	54			—			—			54
Net income (loss)	$	416		$	557		$	(216	)	$	757
Total assets	$	1,899,745		$	33,208		$	(12,575	)	$	1,920,378
Net loans	1,331,637			—			—			1,331,637
Loans held for sale	—			24,766			—			24,766
For Nine Months Ended September 30, 2012
Interest income	$	59,641		$	538		$	—		$	60,179
Interest expense	13,215			90			636			13,941
Net interest income	46,426			448			(636		)	46,238
Provision for loan losses	8,842			(22		)	—			8,820
Net interest income (loss) after provision for loan losses	37,584			470			(636		)	37,418
Other income	8,134			4,412			35			12,581
Other expense	40,781			3,297			24			44,102
Income (loss) before income taxes	4,937			1,585			(625		)	5,897
Income taxes	(9,329		)	—			—			(9,329		)
Net income (loss)	$	14,266		$	1,585		$	(625	)	$	15,226

(1) Note: The “Other” column includes asset eliminations representing the Bank's Due from Sidus account ($10,689 in 2012), the Bank's Investment in Sidus ($3,000 in 2012), and the Bank's A/R from Sidus ($0 in 2012). Also included in this column are Holding Company assets ($1,114 in 2012) and Holding Company income and expenses.

	Bank Activities			Mortgage Activities			Other			Total
	(Amounts in thousands)
For Three Months Ended September 30, 2011
Interest income	$	21,400		$	165		$	—		$	21,565
Interest expense	5,738			10			192			5,940
Net interest income	15,662			155			(192		)	15,625
Provision for loan losses	1,922			34			—			1,956
Net interest income (loss) after provision for loan losses	13,740			121			(192		)	13,669
Other income	4,281			996			(54		)	5,223
Other expense	11,299			1,528			2			12,829
Income (loss) before income tax expense	6,722			(411		)	(248		)	6,063
Income tax expense	2,384			—			—			2,384
Net income (loss)	$	4,338		$	(411	)	$	(248	)	$	3,679
Total assets	$	2,026,753		$	23,142		$	(2,764	)	$	2,047,131
Net loans	1,439,927			—			—			1,439,927
Loans held for sale	357			13,444			—			13,801
Goodwill	—			—			—			—
For Nine Months Ended September 30, 2011
Interest income	$	67,351		$	236		$	—		$	67,587
Interest expense	19,891			219			576			20,686
Net interest income	47,460			17			(576		)	46,901
Provision for loan losses	17,162			54			—			17,216
Net interest income (loss) after provision for loan losses	30,298			(37		)	(576		)	29,685
Other income	10,431			3,476			(136		)	13,771
Other expense	42,408			11,433			30			53,871
Loss before income tax expense	(1,679		)	(7,994		)	(742		)	(10,415		)
Income tax expense	6,905			—			—			6,905
Net loss	$	(8,584	)	$	(7,994	)	$	(742	)	$	(17,320	)

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(1) As an LLC, Sidus passes its pre-tax income through to its single member, the Bank, which is taxed on that income.

(2) Note: The “Other” column includes asset eliminations representing the Bank's Due from Sidus account ($3,286 in 2011), the Bank's Investment in Sidus ($3,000 in 2011), and the Bank's A/R from Sidus ($614 in 2011). Also included in this column are Holding Company assets ($1,258 in 2011) and Holding Company income and expenses.