Segment Reporting

9 Months Ended

Sep. 30, 2011

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 11 – Segment Reporting

The Company operates two primary business segments:  Community Banking and Insurance Products and Services.  Through the Community Banking business, the Company provides services to consumers and small businesses on the Eastern Shore of Maryland and Delaware through its 18-branch network.  Community banking activities include small business services, retail brokerage, trust services and consumer banking products and services.  Loan products available to consumers include mortgage, home equity, automobile, marine, and installment loans, credit cards and other secured and unsecured personal lines of credit.  Small business lending includes commercial mortgages, real estate development loans, equipment and operating loans, as well as secured and unsecured lines of credit, credit cards, accounts receivable financing arrangements, and merchant card services.

Through the Insurance Products and Services business, the Company provides a full range of insurance products and services to businesses and consumers in the Company’s market areas.  Products include property and casualty, life, marine, individual health and long-term care insurance.  Pension and profit sharing plans and retirement plans for executives and employees are available to suit the needs of individual businesses.

During the third quarter of 2011, goodwill and other intangible assets were tested for impairment.  It was determined that goodwill and other intangible assets were impaired in our Insurance Products and Services segment, primarily relating to the Company’s retail insurance business.  The Company recorded goodwill impairment charges of $1.2 million and other intangible assets impairment charges of $120 thousand.  As of September 30, 2011, goodwill relating to our Insurance Products and Services segment after the impairment charges was $9.9 million.

During the third quarter of 2010, when goodwill and other intangible assets were tested for impairment, it was determined that goodwill and other intangible assets were impaired in our Community Banking segment at one of our banks, and in our Insurance Products and Services segment, specifically relating to the Company’s wholesale insurance business. The Company recorded goodwill impairment charges of $1.5 million in both segments, and other intangible assets impairment charges of $51 thousand in the Insurance Products and Services segment.

Selected financial information by business segments for the first nine months of 2011 and 2010 is included in the following table:

	Community			Insurance Products			Parent			Consolidated
(Dollars in thousands)	Banking			and Services			Company			Total
2011
Interest income	$	38,220		$	101		$	-		$	38,321
Interest expense		(8,363	)		-			(31	)		(8,394	)
Provision for credit losses		(15,435	)		-			-			(15,435	)
Noninterest income		5,489			7,711			99			13,299
Noninterest expense		(17,123	)		(8,395	)		(4,244	)		(29,762	)
Net intersegment (expense) income		(4,267	)		(391	)		4,658			-
Loss before tax benefit		(1,479	)		(974	)		482			(1,971	)
Income tax benefit		562			370			(183	)		749
Net loss	$	(917	)	$	(604	)	$	299		$	(1,222	)
Total assets	$	1,138,228		$	17,189		$	2,119		$	1,157,536
2010
Interest income	$	41,503		$	129		$	-		$	41,632
Interest expense		(9,798	)		-			(61	)		(9,859	)
Provision for credit losses		(16,727	)		-			-			(16,727	)
Noninterest income		5,608			8,485			-			14,093
Noninterest expense		(18,959	)		(9,046	)		(4,633	)		(32,638	)
Net intersegment (expense) income		(4,128	)		(385	)		4,513			-
Loss before tax benefit		(2,501	)		(817	)		(181	)		(3,499	)
Income tax benefit		701			230			51			982
Net loss	$	(1,800	)	$	(587	)	$	(130	)	$	(2,517	)
Total assets	$	1,112,841		$	18,509		$	3,153		$	1,134,503