BUSINESS SEGMENTS

3 Months Ended

Mar. 31, 2012

Business Segments

BUSINESS SEGMENTS

6.          BUSINESS SEGMENTS

The Corporation assesses its results among two operating segments, Banking and PGB Trust and Investments. Management uses certain methodologies to allocate income and expense to the business segments. A funds transfer pricing methodology is used to assign interest income and interest expense. Certain indirect expenses are allocated to segments. These include support unit expenses such as technology and operations and other support functions. Taxes are allocated to each segment based on the effective rate for the period shown.

Banking

The Banking segment includes commercial, commercial real estate, residential and consumer lending activities; deposit generation; operation of ATMs; telephone and internet banking services; merchant credit card services and customer support and sales.

PGB Trust & Investments

PGB Trust & Investments includes asset management services provided for individuals and institutions; personal trust services, including services as executor, trustee, administrator, custodian and guardian; corporate trust services including services as trustee for pension and profit sharing plans; and other financial planning and advisory services.

The following table presents the statements of income and total assets for the Corporation’s reportable segments for the three months ended March 31, 2012 and 2011.

	Three Months Ended March 31, 2012
(in thousands)			PGB Trust
		Banking		& Investments		Total
Net interest income	$	12,035	$	856	$	12,891
Noninterest income		1,475		3,248		4,723
Total income		13,510		4,104		17,614
Provision for loan losses		1,500		—		1,500
Salaries and benefits		4,875		1,238		6,113
Premises and equipment expense		2,192		139		2,331
Other noninterest expense		1,695		941		2,636
Total noninterest expense		10,262		2,318		12,580
Income before income tax expense		3,248		1,786		5,034
Income tax expense		1,259		692		1,951
Net income	$	1,989	$	1,094	$	3,083
Total assets for period end	$	1,578,169	$	1,371	$	1,579,540

	Three Months Ended March 31, 2011
(in thousands)			PGB Trust
		Banking		& Investments		Total
Net interest income	$	11,326	$	895	$	12,221
Noninterest income		1,385		2,784		4,169
Total income		12,711		3,679		16,390
Provision for loan losses		2,000		—		2,000
Salaries and benefits		4,765		1,208		5,973
Premises and equipment expense		2,146		176		2,322
Other noninterest expense		1,798		1,150		2,948
Total noninterest expense		10,709		2,534		13,243
Income before income tax expense		2,002		1,145		3,147
Income tax expense		634		372		1,006
Net income	$	1,368	$	773	$	2,141
Total assets for period end	$	1,519,383	$	1,335	$	1,520,718