Note 13 – 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 in Maryland, Delaware and Virginia through its 21branch network and two loan production offices. 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.

The following tables include selected financial information by business segments for the three and nine months of September 30, 2018 and 2017.


	Community		Insurance Products		Parent		Consolidated
(Dollars in thousands)	Banking		and Services		Company		Total
For the three months ended September 30, 2018
Interest Income	$	14,231	$	-	$	5	$	14,236
Interest Expense		(1,289)		-		-		(1,289)
Provision for credit losses		(307)		-		-		(307)
Noninterest income		2,464		2,246		-		4,710
Noninterest expense		(7,166)		(1,978)		(2,142)		(11,286)
Net intersegment (expense) income		(1,893)		(143)		2,036		-
Income (loss) before taxes		6,040		125		(101)		6,064
Income tax (expense) benefit		(1,586)		(33)		9		(1,610)
Net Income (loss)	$	4,454	$	92	$	(92)	$	4,454

Total assets, September 30, 2018	$	1,455,060	$	11,305	$	7,178	$	1,473,543

For the three months ended September 30, 2017
Interest Income	$	12,931		-		6		12,937
Interest Expense		(611)		-		-		(611)
Provision for credit losses		(345)		-		-		(345)
Noninterest income		2,178		2,247		-		4,425
Noninterest expense		(6,607)		(2,201)		(1,912)		(10,720)
Net intersegment (expense) income		(1,906)		78		1,828		-
Income (loss) before taxes		5,640		124		(78)		5,686
Income tax (expense) benefit		(2,255)		(50)		31		(2,274)
Net Income (loss)	$	3,385		74		(47)		3,412

Total assets, September 30, 2017	$	1,359,930		9,909		6,289		1,376,127



	Community			Insurance Products			Parent			Consolidated
(Dollars in thousands)	Banking			and Services			Company			Total
For the nine months ended September 30, 2018
Interest Income	$	40,996		$	-		$	17		$	41,013
Interest Expense		(3,104)			-			-			(3,104)
Provision for credit losses		(1,214)			-			-			(1,214)
Noninterest income		6,899			7,280			-			14,179
Noninterest expense		(21,178)			(5,953)			(6,445)			(33,576)
Net intersegment (expense) income		(5,627)			(439)			6,066			-
Income (loss) before taxes		16,772			888			(362)			17,298
Income tax (expense) benefit		(4,375)			(233)			213			(4,395)
Net Income (loss)	$	12,397			655			(149)			12,903

Total assets, September 30, 2018	$	1,455,060	-	$	11,305	-	$	7,178	-	$	1,473,543

For the nine months ended September 30, 2017
Interest Income	$	34,761		$	(1)		$	73		$	34,833
Interest Expense		(1,674)			-			-			(1,674)
Provision for credit losses		(1,746)			-			-			(1,746)
Noninterest income		6,111			7,300			-			13,411
Noninterest expense		(18,651)			(6,035)			(5,884)			(30,570)
Net intersegment (expense) income		(5,500)			(84)			5,584			-
Income (loss) before taxes		13,301			1,180			(227)			14,254
Income tax (expense) benefit		(5,309)			(472)			91			(5,690)
Net Income (loss)	$	7,992		$	708		$	(136)		$	8,564

Total assets, September 30, 2017	$	1,359,930		$	9,909		$	6,289		$	1,376,127