Business Segments

9 Months Ended

Sep. 30, 2011

Business Segments [Abstract]

Business Segments

NOTE 9: Business Segments

The Corporation operates in a decentralized fashion in three principal business segments: Retail Banking, Mortgage Banking and Consumer Finance. Revenues from Retail Banking operations consist primarily of interest earned on loans and investment securities and service charges on deposit accounts. Mortgage Banking operating revenues consist principally of gains on sales of loans in the secondary market, loan origination fee income and interest earned on mortgage loans held for sale. Revenues from Consumer Finance consist primarily of interest earned on automobile retail installment sales contracts.

The Corporation's other segment includes an investment company that derives revenues from brokerage services, an insurance company that derives revenues from insurance services, and a title company that derives revenues from title insurance services. The results of the other segment are not significant to the Corporation as a whole and have been included in “Other.”  Certain expenses of the Corporation are also included in “Other,” and consist primarily of interest expense associated with the Corporation's trust preferred capital notes and other general corporate expenses.

(Dollars in thousands)	Three Months Ended September 30, 2011
	Retail Banking			Mortgage Banking		Consumer Finance		Other			Eliminations			Consolidated
Revenues:
Interest income	$	8,270		$	398	$	11,391	$	-		$	(1,141	)	$	18,918
Gains on sales of loans		-			4,282		-		-			-			4,282
Other noninterest income		1,538			748		188		384			-			2,858
Total operating income		9,808			5,428		11,579		384			(1,141	)		26,058
Expenses:
Interest expense		2,248			58		1,508		257			(1,140	)		2,931
Provision for loan losses		2,000			200		1,875		-			-			4,075
Salaries and employee benefits		3,486			2,595		1,657		227			-			7,965
Other noninterest expenses		3,075			1,779		1,013		91			-			5,958
Total operating expenses		10,809			4,632		6,053		575			(1,140	)		20,929
Income (loss) before income taxes		(1,001	)		796		5,526		(191	)		(1	)		5,129
Provision for (benefit from) income taxes		(784	)		319		2,155		(73	)		(1	)		1,616
Net income (loss)	$	(217	)	$	477	$	3,371	$	(118	)	$	-		$	3,513
Total assets	$	749,484		$	46,540	$	250,423	$	2,798		$	(140,346	)	$	908,899
Capital expenditures	$	288		$	12	$	101	$	-		$	-		$	401

	Three Months Ended September 30, 2010
(Dollars in thousands)	Retail Banking			Mortgage Banking		Consumer Finance		Other			Eliminations			Consolidated
Revenues:
Interest income	$	8,474		$	602	$	9,610	$	43		$	(993	)	$	17,736
Gains on sales of loans		-			4,865		-		-			-			4,865
Other noninterest income		1,523			1,074		143		219			-			2,959
Total operating income		9,997			6,541		9,753		262			(993	)		25,560
Expenses:
Interest expense		2,586			103		1,385		264			(1,004	)		3,334
Provision for loan losses		1,450			19		2,250		-			-			3,719
Salaries and employee benefits		3,730			3,462		1,467		152			-			8,811
Other noninterest expenses		3,334			1,863		704		92			-			5,993
Total operating expenses		11,100			5,447		5,806		508			(1,004	)		21,857
Income (loss) before income taxes		(1,103	)		1,094		3,947		(246	)		11			3,703
Provision for (benefit from) income taxes		(770	)		438		1,539		(94	)		4			1,117
Net income (loss)	$	(333	)	$	656	$	2,408	$	(152	)	$	7		$	2,586
Total assets	$	766,872		$	89,116	$	217,426	$	2,692		$	(164,293	)	$	911,813
Capital expenditures	$	352		$	40	$	34	$	-		$	-		$	426

	Nine Months Ended September 30, 2011
(Dollars in thousands)	Retail Banking			Mortgage Banking		Consumer Finance		Other			Eliminations			Consolidated
Revenues:
Interest income	$	24,474		$	1,185	$	32,477	$	-		$	(3,217	)	$	54,919
Gains on sales of loans		-			11,778		-		-			-			11,778
Other noninterest income		4,440			2,030		519		947			-			7,936
Total operating income		28,914			14,993		32,996		947			(3,217	)		74,633
Expenses:
Interest expense		6,925			170		4,323		763			(3,218	)		8,963
Provision for loan losses		4,550			235		5,500		-			-			10,285
Salaries and employee benefits		10,972			8,318		4,986		611			-			24,887
Other noninterest expenses		9,215			4,526		2,644		328			-			16,713
Total operating expenses		31,662			13,249		17,453		1,702			(3,218	)		60,848
Income (loss) before income taxes		(2,748	)		1,744		15,543		(755	)		1			13,785
Provision for (benefit from) income taxes		(2,253	)		698		6,062		(287	)		-			4,220
Net income (loss)	$	(495	)	$	1,046	$	9,481	$	(468	)	$	1		$	9,565
Total assets	$	749,484		$	46,540	$	250,423	$	2,798		$	(140,346	)	$	908,899
Capital expenditures	$	774		$	81	$	724	$	3		$	-		$	1,582

	Nine Months Ended September 30, 2010
(Dollars in thousands)	Retail Banking			Mortgage Banking			Consumer Finance		Other			Eliminations			Consolidated
Revenues:
Interest income	$	25,493		$	1,462		$	27,350	$	145		$	(2,760	)	$	51,690
Gains on sales of loans		-			13,295			-		-			(3	)		13,292
Other noninterest income		4,215			2,164			436		793			-			7,608
Total operating income		29,708			16,921			27,786		938			(2,763	)		72,590
Expenses:
Interest expense		7,943			219			3,883		775			(2,792	)		10,028
Provision for loan losses		4,050			19			6,150		-			-			10,219
Salaries and employee benefits		10,922			9,634			4,414		503			1			25,474
Other noninterest expenses		9,514			7,255			2,031		328			-			19,128
Total operating expenses		32,429			17,127			16,478		1,606			(2,791	)		64,849
Income (loss) before income taxes		(2,721	)		(206	)		11,308		(668	)		28			7,741
Provision for (benefit from) income taxes		(2,075	)		(82	)		4,410		(255	)		10			2,008
Net income (loss)	$	(646	)	$	(124	)	$	6,898	$	(413	)	$	18		$	5,733
Total assets	$	766,872		$	89,116		$	217,426	$	2,692		$	(164,293	)	$	911,813
Capital expenditures	$	1,071		$	313		$	120	$	-		$	-		$	1,504

The Retail Banking segment extends a warehouse line of credit to the Mortgage Banking segment, providing a portion of the funds needed to originate mortgage loans. The Retail Banking segment charges the Mortgage Banking segment interest at the daily FHLB advance rate plus 50 basis points. The Retail Banking segment also provides the Consumer Finance segment with a portion of the funds needed to originate loans by means of a variable rate line of credit that carries interest at one-month LIBOR plus 200 basis points and fixed rate loans that carry interest rates ranging from 5.4 percent to 8.0 percent. The Retail Banking segment acquires certain residential real estate loans from the Mortgage Banking segment at prices similar to those paid by third-party investors. These transactions are eliminated to reach consolidated totals. Certain corporate overhead costs incurred by the Retail Banking segment are not allocated to the Mortgage Banking, Consumer Finance and Other segments.