Segment Reporting

6 Months Ended

Jun. 30, 2012

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, 2012 and 2011 follows:

	Three Months Ended June 30, 2012
	Bank		Trust		Unconsolidated Parent			Eliminations			Consolidated
Revenues
Interest and dividend income	$	8,301,983	$	9,368	$	668,104		$	(667,837	)	$	8,311,618
Income from fiduciary activities		0		793,005		0			0			793,005
Other income		2,943,305		160,014		165,000			(180,476	)		3,087,843
Total operating income		11,245,288		962,387		833,104			(848,313	)		12,192,466
Expenses
Interest expense		1,498,747		0		1,567			(1,908	)		1,498,406
Provision for loan losses		1,000,000		0		0			0			1,000,000
Salaries and employee benefits		4,524,216		563,640		132,029			0			5,219,885
Other expenses		3,602,522		239,708		65,011			(180,476	)		3,726,765
Total operating expenses		10,625,485		803,348		198,607			(182,384	)		11,445,056
Income before taxes		619,803		159,039		634,497			(665,929	)		747,410
Income tax expense (benefit)		59,007		53,906		(3,710	)		0			109,203
Net income	$	560,796	$	105,133	$	638,207		$	(665,929	)	$	638,207
Total assets	$	868,035,982	$	5,229,142	$	87,516,934		$	(88,463,223	)	$	872,318,835

	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		2,118,433		86,641		75,000			(90,276	)		2,189,798
Total operating income		11,259,345		856,832		1,203,474			(1,217,800	)		12,101,851
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		3,389,723		232,514		71,195			(90,276	)		3,603,156
Total operating expenses		9,811,732		765,233		204,943			(93,556	)		10,688,352
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

	Six Months Ended June 30, 2012
	Bank		Trust		Unconsolidated Parent		Eliminations			Consolidated
Revenues
Interest and dividend income	$	16,714,277	$	18,952	$	1,760,508	$	(1,759,927	)	$	16,733,810
Income from fiduciary activities		0		1,619,651		0		0			1,619,651
Other income		5,295,982		264,352		330,000		(361,252	)		5,529,082
Total operating income		22,010,259		1,902,955		2,090,508		(2,121,179	)		23,882,543
Expenses
Interest expense		3,009,967		0		3,134		(3,769	)		3,009,332
Provision for loan losses		1,200,000		0		0		0			1,200,000
Salaries and employee benefits		8,812,752		1,100,653		266,757		0			10,180,162
Other expenses		7,088,935		485,024		103,219		(361,252	)		7,315,926
Total operating expenses		20,111,654		1,585,677		373,110		(365,021	)		21,705,420
Income before taxes		1,898,605		317,278		1,717,398		(1,756,158	)		2,177,123
Income tax expense		352,186		107,539		890		0			460,615
Net income	$	1,546,419	$	209,739	$	1,716,508	$	(1,756,158	)	$	1,716,508
Total assets	$	868,035,982	$	5,229,142	$	87,516,934	$	(88,463,223	)	$	872,318,835

	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		4,066,730		187,990		150,000			(180,652	)		4,224,068
Total operating income		22,561,939		1,738,866		1,694,032			(1,722,829	)		24,272,008
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		6,755,038		459,279		106,757			(180,652	)		7,140,422
Total operating expenses		20,838,110		1,473,329		375,878			(187,257	)		22,500,060
Income (loss) 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 (loss)	$	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

The accounting policies of the segments are the same as those described in the summary of significant accounting policies reported in the Company's 2011 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, 2012, $124 thousand was drawn under the line of credit and $7 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 $145 thousand and a market value of $147 thousand at June 30, 2012. 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.