Business Segment Information

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

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, LLC ("Sidus"), a single member limited liability company 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 years ended December 31, 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.

In the fourth quarter of 2012, a decision was made by management to sale a reinsurance subsidiary held by Sidus. As a result of this decision, Sidus reclassified its investment in the reinsurance subsidiary to held for sale and wrote down its investment by $1.0 million to the estimated fair value at December 31, 2012. The sale of the subsidiary closed in the first quarter of 2013. In addition, at the beginning of 2013, the Company merged the Sidus subsidiary into the Bank and is no longer doing business as Sidus. As a result, all mortgage banking activity going forward in 2013 is at the Bank.

	Bank Activities			Mortgage Activities			Other			Total
	(Amounts in thousands)
For Year Ended December 31, 2012
Interest income	$	75,104		$	3,868		$	—		$	78,972
Interest expense	16,998			143			847			17,988
Net interest income	58,106			3,725			(847		)	60,984
Provision for loan losses	40,538			(164		)	—			40,374
Net interest income (loss) after provision for loan losses	17,568			3,889			(847		)	20,610
Other income	7,677			5,860			29			13,566
Other expense	60,070			6,569			172			66,811
Income (loss) before income taxes	(34,825		)	3,180			(990		)	(32,635		)
Income taxes	(23,961		)	—			—			(23,961		)
Net income (loss)	$	(10,864	)	$	3,180		$	(990	)	$	(8,674	)
Total assets	$	1,890,906		$	31,500		$	1,032		$	1,923,438
Net loans	$	1,284,355		$	—		$	—		$	1,284,355
Loans held for sale	$	—		$	27,679		$	—		$	27,679

(1) Note: The “Other” column includes asset eliminations representing the Bank's Due from Sidus account ($0 in 2012), the Bank's Investment in Sidus ($3,000 in 2012), and the Bank's A/R from Sidus ($3,000 in 2012). Also included in this column are Holding Company assets ($1,032 in 2012) and Holding Company income and expenses.

	Bank Activities			Mortgage Activities			Other			Total
	(Amounts in thousands)
For the year ended December 31, 2011
Interest income	$	88,156		$	390		$	—		$	88,546
Interest expense	25,016			239			786			26,041
Net interest income	63,140			151			(786		)	62,505
Provision for loan losses	20,828			15			—			20,843
Net interest income (loss) after provision for loan losses	42,312			136			(786		)	41,662
Other income	12,901			5,408			(129		)	18,180
Other expense	54,253			13,244			46			67,543
Loss before income tax expense	960			(7,700		)	(961		)	(7,701		)
Income tax expense	6,694			—			—			6,694
Net loss	$	(5,734	)	$	(7,700	)	$	(961	)	$	(14,395	)
Total assets	$	1,973,848		$	24,209		$	(4,869	)	$	1,993,188
Net loans	$	1,418,076		$	—		$	—		$	1,418,076
Loans held for sale	$	3,628		$	15,906		$	—		$	19,534

________________________

(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.

	Bank Activities			Mortgage Activities		Other			Total
	(Amounts in thousands)
For Year Ended December 31, 2010
Interest income	$	96,821		$	1,019	$	—		$	97,840
Interest expense	33,359			197		788			34,344
Net interest income	63,462			822		(788		)	63,496
Provision for loan losses	23,930			419		—			24,349
Net interest income (loss) after provision for loan losses	39,532			403		(788		)	39,147
Other income	12,417			9,778		(260		)	21,935
Other expense	54,463			7,692		328			62,483
Loss before income tax expense	(2,514		)	2,489		(1,376		)	(1,401		)
Income tax expense	(1,389		)	—		—			(1,389		)
Net loss	$	(1,125	)	$	2,489	$	(1,376	)	$	(12	)
Total assets	$	2,275,617		$	61,189	$	(36,212	)	$	2,300,594
Net loans	1,562,787			—		—			1,562,787
Loans held for sale	1,447			48,972		—			50,419
Goodwill	—			4,944		—			4,944