Segment Reporting

6 Months Ended

Jun. 30, 2011

Segment Reporting [Abstract]

Segment Reporting

Note 9.  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 interest 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 six months ended June 30, 2011 and 2010 follows:

	Three Months Ended June 30, 2011
	Bank		Trust		Unconsolidated Parent			Eliminations			Consolidated
Revenues
Interest and dividend income	$	9,140,912	$	10,267	$	1,128,474		$	(1,127,524	)	$	9,152,129
Income from fiduciary activities		0		759,924		0			0			759,924
Other income		2,120,183		86,641		75,000			(90,276	)		2,191,548
Total operating income		11,261,095		856,832		1,203,474			(1,217,800	)		12,103,601
Expenses
Interest expense		1,689,787		0		3,123			(3,280	)		1,689,630
Provision for loan losses		500,000		0		0			0			500,000
Salaries and employee benefits		4,232,222		532,719		130,625			0			4,895,566
Other expenses		3,391,473		232,514		71,195			(90,276	)		3,604,906
Total operating expenses		9,813,482		765,233		204,943			(93,556	)		10,690,102
Income before taxes		1,447,613		91,599		998,531			(1,124,244	)		1,413,499
Income tax expense (benefit)		383,825		31,143		(36,730	)		0			378,238
Net income	$	1,063,788	$	60,456	$	1,035,261		$	(1,124,244	)	$	1,035,261
Total assets	$	828,016,619	$	4,893,559	$	84,331,209		$	(84,815,127	)	$	832,426,260

	Three Months Ended June 30, 2010
	Bank		Trust		Unconsolidated Parent			Eliminations			Consolidated
Revenues
Interest and dividend income	$	10,205,459	$	14,834	$	1,102,756		$	(1,101,818	)	$	10,221,231
Income from fiduciary activities		0		780,963		0			0			780,963
Other income		2,229,996		132,283		75,000			(90,476	)		2,346,803
Total operating income		12,435,455		928,080		1,177,756			(1,192,294	)		13,348,997
Expenses
Interest expense		2,697,215		0		3,089			(5,242	)		2,695,062
Provision for loan losses		1,300,000		0		0			0			1,300,000
Salaries and employee benefits		3,970,682		524,461		126,525			0			4,621,668
Other expenses		3,104,040		263,267		76,966			(90,476	)		3,353,797
Total operating expenses		11,071,937		787,728		206,580			(95,718	)		11,970,527
Income before taxes		1,363,518		140,352		971,176			(1,096,576	)		1,378,470
Income tax expense (benefit)		359,574		47,720		(36,920	)		0			370,374
Net income	$	1,003,944	$	92,632	$	1,008,096		$	(1,096,576	)	$	1,008,096
Total assets	$	907,795,906	$	5,051,136	$	82,238,997		$	(82,716,789	)	$	912,369,250

	Six Months Ended June 30, 2011
	Bank		Trust		Unconsolidated Parent			Eliminations			Consolidated
Revenues
Interest and dividend income	$	18,495,209	$	19,980	$	1,544,032		$	(1,542,177	)	$	18,517,044
Income from fiduciary activities		0		1,530,896		0			0			1,530,896
Other income		4,068,480		187,990		150,000			(180,652	)		4,225,818
Total operating income		22,563,689		1,738,866		1,694,032			(1,722,829	)		24,273,758
Expenses
Interest expense		3,534,696		0		6,178			(6,605	)		3,534,269
Provision for loan losses		2,300,000		0		0			0			2,300,000
Salaries and employee benefits		8,248,376		1,014,050		262,943			0			9,525,369
Other expenses		6,756,788		459,279		106,757			(180,652	)		7,142,172
Total operating expenses		20,839,860		1,473,329		375,878			(187,257	)		22,501,810
Income before taxes		1,723,829		265,537		1,318,154			(1,535,572	)		1,771,948
Income tax expense (benefit)		363,512		90,282		(61,800	)		0			391,994
Net income	$	1,360,317	$	175,255	$	1,379,954		$	(1,535,572	)	$	1,379,954
Total assets	$	828,016,619	$	4,893,559	$	84,331,209		$	(84,815,127	)	$	832,426,260

	Six Months Ended June 30, 2010
	Bank			Trust		Unconsolidated Parent			Eliminations			Consolidated
Revenues
Interest and dividend income	$	20,607,919		$	27,942	$	227,087		$	(226,230	)	$	20,636,718
Income from fiduciary activities		0			1,601,848		0			0			1,601,848
Other income		4,600,780			249,800		153,038			(179,852	)		4,823,766
Total operating income		25,208,699			1,879,590		380,125			(406,082	)		27,062,332
Expenses
Interest expense		5,664,277			0		6,144			(11,503	)		5,658,918
Provision for loan losses		6,000,000			0		0			0			6,000,000
Salaries and employee benefits		7,864,760			1,026,909		261,081			0			9,152,750
Other expenses		6,139,612			485,997		111,571			(179,852	)		6,557,328
Total operating expenses		25,668,649			1,512,906		378,796			(191,355	)		27,368,996
Income (loss) before taxes		(459,950	)		366,684		1,329			(214,727	)		(306,664	)
Income tax expense (benefit)		(432,666	)		124,673		(61,140	)		0			(369,133	)
Net income (loss)	$	(27,284	)	$	242,011	$	62,469		$	(214,727	)	$	62,469
Total assets	$	907,795,906		$	5,051,136	$	82,238,997		$	(82,716,789	)	$	912,369,250

The accounting policies of the segments are the same as those described in the summary of significant accounting policies reported in the Company's 2010 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.

The Bank extends a line of credit to the Parent. This line of credit may be used, from time to time and among other purposes, to repurchase the Parent's publicly traded stock.  As of June 30, 2011, $244 thousand was drawn under the line of credit and $6 thousand remained available. Interest is charged at the Wall Street Journal Prime Rate minus 0.5%, with a floor of 5.0%.  This loan is secured by a held-to-maturity security with a book value of $282 thousand and a market value of $289 thousand at June 30, 2011.  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.