NOTE 18, Segment Reporting

The Company operates in a decentralized fashion in three principal business segments: the Bank, the Trust, and 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 and asset management fees. The Parent company’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 years ended December 31 follows:

2018	Bank		Trust		Unconsolidated Parent			Eliminations			Consolidated
	(in thousands)
Revenues
Interest and dividend income	$	38,160	$	95	$	6,116		$	(6,114	)	$	38,257
Fiduciary and asset management fees		-		3,726		-			-			3,726
Other income		8,551		1,026		230			(262	)		9,545
Total operating income		46,711		4,847		6,346			(6,376	)		51,528

Expenses
Interest expense		4,870		-		99			-			4,969
Provision for loan losses		2,861		-		-			-			2,861
Salaries and employee benefits		19,150		2,977		453			-			22,580
Other expenses		14,078		1,086		1,018			(262	)		15,920
Total operating expenses		40,959		4,063		1,570			(262	)		46,330

Income (loss) before taxes		5,752		784		4,776			(6,114	)		5,198

Income tax expense (benefit)		256		166		(143	)		-			279

Net income (loss)	$	5,496	$	618	$	4,919		$	(6,114	)	$	4,919

Capital expenditures	$	478	$	-	$	-		$	-		$	478

Total assets	$	1,032,676	$	6,226	$	104,592		$	(105,311	)	$	1,038,183

2017	Bank			Trust		Unconsolidated Parent			Eliminations			Consolidated
	(in thousands)
Revenues
Interest and dividend income	$	32,861		$	71	$	667		$	(665	)	$	32,934
Fiduciary and asset management fees		-			3,786		-			-			3,786
Other income		8,638			944		200			(261	)		9,521
Total operating income		41,499			4,801		867			(926	)		46,241

Expenses
Interest expense		3,010			-		-			2			3,012
Provision for loan losses		4,160			-		-			-			4,160
Salaries and employee benefits		20,968			2,800		445			-			24,213
Other expenses		13,358			1,075		811			(262	)		14,982
Total operating expenses		41,496			3,875		1,256			(260	)		46,367

Income (loss) before taxes		3			926		(389	)		(666	)		(126	)

Income tax expense (benefit)		(65	)		328		(360	)		-			(97	)

Net income (loss)	$	68		$	598	$	(29	)	$	(666	)	$	(29	)

Capital expenditures	$	613		$	6	$	-		$	-		$	619

Total assets	$	975,991		$	6,126	$	96,406		$	(96,697	)	$	981,826

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. 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.

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