Segment Reporting

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Segment Reporting

Note 10. Segment Reporting

The Company operates in a decentralized fashion in three principal business segments: The Old Point National Bank of Phoebus (the Bank), Old Point Trust & Financial Services, N. A. (Trust), and the Company as a separate segment (for purposes of this Note, the Parent). Revenues from the Bank's operations consist primarily of interest earned on loans and investment securities and service charges on deposit accounts. Trust's operating revenues consist principally of income from fiduciary activities. The Parent's revenues are mainly fees and dividends received from the Bank and Trust companies. The Company has no other segments.

The Company'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 technologies and marketing strategies.

Information about reportable segments, and reconciliation of such information to the consolidated financial statements as of and for the three and nine months ended September 30, 2017 and 2016 follows:

	Three Months Ended September 30, 2017
	Bank			Trust		Parent			Eliminations			Consolidated
	(in thousands)
Revenues
Interest and dividend income	$	8,550		$	18	$	898		$	(898	)	$	8,568
Income from fiduciary activities		-			903		-			-			903
Other income		2,275			198		50			(65	)		2,458
Total operating income		10,825			1,119		948			(963	)		11,929
Expenses
Interest expense		837			-		-			-			837
Provision for loan losses		1,275			-		-			-			1,275
Salaries and employee benefits		4,343			657		104			-			5,104
Other expenses		3,664			253		160			(65	)		4,012
Total operating expenses		10,119			910		264			(65	)		11,228
Income before taxes		706			209		684			(898	)		701
Income tax expense (benefit)		(55	)		72		(73	)		-			(56	)
Net income	$	761		$	137	$	757		$	(898	)	$	757
Capital expenditures	$	60		$	6	$	-		$	-		$	66
Total assets	$	948,377		$	6,141	$	97,645		$	(97,666	)	$	954,497

	Three Months Ended September 30, 2016
	Bank			Trust		Parent			Eliminations			Consolidated
	(in thousands)
Revenues
Interest and dividend income	$	7,420		$	16	$	1,572		$	(1,572	)	$	7,436
Income from fiduciary activities		-			858		-			-			858
Other income		2,277			207		50			(65	)		2,469
Total operating income		9,697			1,081		1,622			(1,637	)		10,763
Expenses
Interest expense		633			-		-			-			633
Recovery of loan losses		(100	)		-		-			-			(100	)
Salaries and employee benefits		4,296			665		102			-			5,063
Other expenses		3,114			262		315			(65	)		3,626
Total operating expenses		7,943			927		417			(65	)		9,222
Income before taxes		1,754			154		1,205			(1,572	)		1,541
Income tax expense (benefit)		284			53		(125	)		-			212
Net income	$	1,470		$	101	$	1,330		$	(1,572	)	$	1,329
Capital expenditures	$	234		$	-	$	-		$	-		$	234
Total assets	$	900,160		$	5,814	$	96,467		$	(96,685	)	$	905,756

	Nine Months Ended September 30, 2017
	Bank			Trust		Parent			Eliminations			Consolidated
	(in thousands)
Revenues
Interest and dividend income	$	24,300		$	52	$	3,251		$	(3,249	)	$	24,354
Income from fiduciary activities		-			2,820		-			-			2,820
Other income		7,133			708		150			(196	)		7,795
Total operating income		31,433			3,580		3,401			(3,445	)		34,969
Expenses
Interest expense		2,097			-		-			1			2,098
Provision for loan losses		2,925			-		-			-			2,925
Salaries and employee benefits		13,252			2,068		330			-			15,650
Other expenses		10,460			766		412			(196	)		11,442
Total operating expenses		28,734			2,834		742			(195	)		32,115
Income before taxes		2,699			746		2,659			(3,250	)		2,854
Income tax expense (benefit)		(60	)		255		(201	)		-			(6	)
Net income	$	2,759		$	491	$	2,860		$	(3,250	)	$	2,860
Capital expenditures	$	504		$	6	$	-		$	-		$	510
Total assets	$	948,377		$	6,141	$	97,645		$	(97,666	)	$	954,497

	Nine Months Ended September 30, 2016
	Bank		Trust		Parent			Eliminations			Consolidated
	(in thousands)
Revenues
Interest and dividend income	$	22,191	$	45	$	3,443		$	(3,443	)	$	22,236
Income from fiduciary activities		-		2,636		-			-			2,636
Other income		6,954		734		150			(196	)		7,642
Total operating income		29,145		3,415		3,593			(3,639	)		32,514
Expenses
Interest expense		1,934		-		-			-			1,934
Provision for loan losses		1,300		-		-			-			1,300
Salaries and employee benefits		12,782		2,022		303			-			15,107
Other expenses		9,913		774		667			(196	)		11,158
Total operating expenses		25,929		2,796		970			(196	)		29,499
Income before taxes		3,216		619		2,623			(3,443	)		3,015
Income tax expense (benefit)		181		211		(279	)		-			113
Net income	$	3,035	$	408	$	2,902		$	(3,443	)	$	2,902
Capital expenditures	$	706	$	4	$	-		$	-		$	710
Total assets	$	900,160	$	5,814	$	96,467		$	(96,685	)	$	905,756

The accounting policies of the segments are the same as those described in the summary of significant accounting policies reported in the Company's 2016 annual report on Form 10-K. The Company evaluates performance based on profit or loss from operations before income taxes, not including nonrecurring gains or losses.

Both the Parent and the Trust companies maintain deposit accounts with the Bank, on terms substantially similar to those available to other customers. These transactions are eliminated to reach consolidated totals.