SEGMENT REPORTING

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE 25. SEGMENT REPORTING

The Company operates two primary business segments: Community Banking and Insurance Products and Services. The Community Banking business provides services to consumers and small businesses on the Eastern Shore of Maryland and in 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 2012, goodwill and other intangible assets were subjected to an annual assessment for impairment. As a result of the assessment, the Company determined that there was no impairment at the Company’s subsidiaries that have these intangible assets on their balance sheets. During the third quarter of 2011, when goodwill and other intangible assets were assessed 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 reflected in the table below in noninterest expense.

During the third quarter of 2010, it was determined that goodwill and other intangible assets were impaired in the Company’s Community Banking segment at one of the Banks, and in the 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 is included in the following table.

	Community			Insurance Products			Parent
(Dollars in thousands)	Banking			and Services			Company			Total
2012
Interest income	$	45,822		$	79		$	-		$	45,901
Interest expense		(10,546	)		-			(16)			(10,562	)
Provision for credit losses		(27,745	)		-			-			(27,745	)
Noninterest income		5,197			10,422			139			15,758
Noninterest expense		(23,702	)		(9,820	)		(6,033	)		(39,555	)
Net intersegment (expense) income		(4,993	)		(503	)		5,496			-
(Loss) income before income taxes		(15,967	)		178			(414	)		(16,203	)
Income tax benefit (expense)		6,467			(70	)		168			6,565
Net (loss) income	$	(9,500	)	$	108		$	(246	)	$	(9,638	)
Total assets	$	1,166,468		$	16,809		$	2,530		$	1,185,807
2011
Interest income	$	50,721		$	131		$	-		$	50,852
Interest expense		(11,051	)		-			(37	)		(11,088	)
Provision for credit losses		(19,470	)		-			-			(19,470	)
Noninterest income		7,269			9,881			168			17,318
Noninterest expense		(22,738	)		(10,766	)		(5,663	)		(39,167	)
Net intersegment (expense) income		(5,148	)		(455	)		5,603			-
(Loss) income before income taxes		(417	)		(1,209	)		71			(1,555	)
Income tax benefit (expense)		176			512			(30	)		658
Net (loss) income	$	(241	)	$	(697	)	$	41		$	(897	)
Total assets	$	1,138,576		$	17,354		$	2,263		$	1,158,193
2010
Interest income	$	55,293		$	168		$	-		$	55,461
Interest expense		(12,752	)		-			(70	)		(12,822	)
Provision for credit losses		(21,119	)		-			-			(21,119	)
Noninterest income		7,308			10,739			(6)			18,041
Noninterest expense		(24,328	)		(11,410	)		(5,982	)		(41,720	)
Net intersegment (expense) income		(5,418	)		(521	)		5,939			-
Loss before income tax benefit		(1,016	)		(1,024	)		(119	)		(2,159	)
Income tax benefit		232			233			27			492
Net loss	$	(784	)	$	(791	)	$	(92	)	$	(1,667	)
Total assets	$	1,108,712		$	18,759		$	2,840		$	1,130,311