Segment Reporting

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Segment Reporting

19. SEGMENT REPORTING

The Corporation operations are divided into five reportable business segments: The Retail and Commercial Banking Services, Commercial Mortgage Banking Services, Insurance Services, Trust and Retail Brokerage Services, and Financial Management Services. These operating segments have been identified primarily based on the Corporation’s organizational structure.

The Retail and Commercial Banking Services segment serves consumer and commercial customers by offering a variety of loan and deposit products, and other traditional banking services.

The Commercial Mortgage Banking Services segment originates and services commercial mortgage loans on properties that are located throughout the southeastern United States. This segment does not directly fund any mortgages and acts primarily as a servicer and broker for participating mortgage lenders.

The Insurance Services segment offers clients a full spectrum of commercial and personal lines insurance products including life, health, property, and casualty insurance.

The Trust and Retail Brokerage Services segment provides personal trust administration, estate settlement, investment management, employee retirement benefit services, and the Individual Retirement Account (IRA) administration. Also, this segment offers full-service retail brokerage which includes the sale of retail investment products including stocks, bonds, mutual funds, and annuities.

The Financial Management Services segment is responsible for the management of the investment securities portfolio. It also is responsible for managing financial risks, including liquidity and interest rate risk.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Corporation evaluates performance based on profit or loss from operations after income taxes not including nonrecurring gains or losses.

The Corporation’s reportable segments are strategic business units that offer different products and services. They are managed separately because each segment appeals to different markets and, accordingly, requires different technology and marketing strategies.

The Corporation allocates capital and funds used or funds provided for each reportable business segment. Also, each segment is credited or charged for the cost of funds provided or used. These credits and charges are reflected as net intersegment interest income (expense) in the table below. The Corporation does allocate income taxes to the segments. Other revenue represents noninterest income, exclusive of the net gain (loss) on disposition of assets and expenses associated with administrative activities which are not allocated to the segments. Those expenses include audit, compliance, investor relations, marketing, personnel, and other executive or parent company expenditures.

The Corporation does not have operating segments other than those reported. Parent Company and the Administrative Offices financial information is included in the “Other” category, and is deemed to represent an overhead function rather than an operating segment. The Administrative Offices include audit, marketing, information technology, personnel, and the executive office.

The Corporation does not have a single external customer from which it derives 10% or more of its revenue and operates in one geographical area.

Information about reportable business segments, and reconciliation of such information to the consolidated financial statements for the years ended December 31, 2011, 2010, and 2009, are as follows:

Segment Reporting

For the year ended December 31, 2011

	Retail and Commercial Banking			Commercial Mortgage Banking			Insurance Services		Trust and Retail Brokerage Services			Financial Management			Inter-segment Elimination			Other			Totals
	(Dollars in thousands)
Net Interest Income (expense)
external customers	$	9,030			0			0		0			1,873			0			6		$	10,909
Net intersegment interest
income (expense)		1,640			(1	)		6		4			(1,649	)		0			0			0
Net Interest Income		10,670			(1	)		6		4			224			0			6			10,909
Provision for Loan Losses		984																				984
Noninterest Income (expense)
external customers		1,636			1,241			1,264		538			488			0			(8	)		5,159
Intersegment noninterest
income (expense)		(5	)		(1	)		6		37			0			(37	)		0			0
Total Noninterest Income		1,631			1,240			1,270		575			488			(37	)		(8	)		5,159
Noninterest Expenses:
Depreciation		604			38			26		19			58			0			85			830
Amortization of intangibles		182			0			19		18			0			0			0			219
Other Noninterest expenses		7,333			913			1,083		634			565			0			1,759			12,287
Total Noninterest expenses		8,119			951			1,128		671			623			0			1,844			13,336
Pre-tax Income		3,198			288			148		(92	)		89			(37	)		(1,846	)		1,748
Provision for Income Taxes		476			109			22		(14	)		8			0			(314	)		287
Net Income	$	2,722			179			126		(78	)		81			(37	)		(1,532	)	$	1,461
Assets	$	386,495			1,467			1,161		367			110,615			(195,127	)		672		$	305,650
Expenditures for Fixed Assets	$	1,457			6			14		15			61								$	1,553

Amounts included in the "Other" column are as follows:
		Other
Net interest Income:
Parent Company	$	6
Noninterest Income:
Executive office miscellaneous income		(8	)
Noninterest Expenses:
Parent Company corporate expenses		148
Executive office expenses not
allocated to segments		1,696
Provison for Income taxes:
Parent Company income taxes (benefit)		(62	)
Executive office income taxes not
allocated to segments		(252	)
Net Income:	$	(1,532	)
Segment assets:
Parent Company assets, after
intercompany elimination	$	672

Segment Reporting

For the year ended December 31, 2010 

	Retail and Commercial Banking		Commercial Mortgage Banking			Insurance Services		Trust and Retail Brokerage Services			Financial Management			Inter-segment Elimination			Other			Totals
	(Dollars in thousands)
Net Interest Income (expense)
external customers	$	7,894		(12	)		0		0			2,240			0			6		$	10,128
Net intersegment interest
income (expense)		2,208		0			6		4			(2,218	)		0			0			0
Net Interest Income		10,102		(12	)		6		4			22			0			6			10,128
Provision for Loan Losses		600																			600
Noninterest Income (expense)
external customers		1,609		1,124			1,114		541			604			0			97			5,089
Intersegment noninterest
income (expense)		6		(12	)		6		38			0			(38	)		0			0
Total Noninterest Income		1,615		1,112			1,120		579			604			(38	)		97			5,089
Noninterest Expenses:
Depreciation		537		43			22		17			47			0			117			783
Amortization of intangibles		182		0			8		18			0			0			0			208
Other Noninterest expenses		6,469		904			907		611			533			0			1,762			11,186
Total Noninterest expenses		7,188		947			937		646			580			0			1,879			12,177
Pre-tax Income		3,929		153			189		(63	)		46			(38	)		(1,776	)		2,440
Provision for Income Taxes		773		58			45		(8	)		61			0			(345	)		584
Net Income	$	3,156		95			144		(55	)		(15	)		(38	)		(1,431	)	$	1,856
Assets	$	382,365		1,273			1,186		372			123,178			(212,510	)		540		$	296,404
Expenditures for Fixed Assets	$	2,200		16			13		5			9								$	2,243

Amounts included in the "Other" column are as follows:
		Other
Net interest Income:
Parent Company	$	6
Noninterest Income:
Executive office miscellaneous income		97
Noninterest Expenses:
Parent Company corporate expenses		94
Executive office expenses not
allocated to segments		1,785
Provison for Income taxes:
Parent Company income taxes (benefit)		(20	)
Executive office income taxes not
allocated to segments		(325	)
Net Income:	$	(1,431	)
Segment assets:
Parent Company assets, after
intercompany elimination	$	540

Segment Reporting

For the year ended December 31, 2009

	Retail and Commercial Banking		Commercial Mortgage Banking			Insurance Services		Trust and Retail Brokerage Services			Financial Management			Inter-segment Elimination			Other			Totals
	(Dollars in thousands)
Net Interest Income (expense)
external customers	$	6,675		(43	)		1		0			3,285			0			7		$	9,925
Net intersegment interest
income (expense)		3,363		0			6		6			(3,375	)		0			0			0
Net Interest Income		10,038		(43	)		7		6			(90	)		0			7			9,925
Provision for Loan Losses		536																			536
Noninterest Income (expense)
external customers		1,996		1,261			1,055		479			333			0			0			5,124
Intersegment noninterest
income (expense)		36		(43	)		7		38			0			(38	)		0			0
Total Noninterest Income		2,032		1,218			1,062		517			333			(38	)		0			5,124
Noninterest Expenses:
Depreciation		478		58			21		22			49			0			92			720
Amortization of intangibles		183		0			7		18			0			0			0			208
Noninterest Income (expense)
Other Noninterest expenses		6,047		1,640			858		557			504			0			1,658			11,264
Total Noninterest expenses		6,708		1,698			886		597			553			0			1,750			12,192
Pre-tax Income		4,826		(523	)		183		(74	)		(310	)		(38	)		(1,743	)		2,321
Provision for Income Taxes		1,201		(199	)		46		(15	)		(71	)		0			(454	)		508
Net Income	$	3,625		(324	)		137		(59	)		(239	)		(38	)		(1,289	)	$	1,813
Assets	$	376,688		2,336			1,036		385			110,101			(200,317	)		779		$	291,008
Expenditures for Fixed Assets	$	2,640		69			35		1			2								$	2,747

Amounts included in the "Other" column are as follows:
		Other
Net interest Income:
Parent Company	$	7
Noninterest Income:
Executive office miscellaneous income		0
Noninterest Expenses:
Parent Company corporate expenses		135
Executive office expenses not
allocated to segments		1,615
Provison for Income taxes:
Parent Company income taxes (benefit)		(50	)
Executive office income taxes not
allocated to segments		(404	)
Net Income:	$	(1,289	)
Segment assets:
Parent Company assets, after
intercompany elimination	$	779