SEGMENT REPORTING

The Corporation manages its operations through two primary business segments: core banking and WMG. The core banking segment provides revenues by attracting deposits from the general public and using such funds to originate consumer, commercial, commercial real estate, and residential mortgage loans, primarily in the Corporation’s local markets, and to invest in securities. The WMG services segment provides revenues by providing trust and investment advisory services to clients.

Accounting policies for the segments are the same as those described in Note 1 of the Corporation’s 2016 Annual Report on Form 10-K, which was filed with the SEC on March 8, 2017. Summarized financial information concerning the Corporation’s reportable segments and the reconciliation to the Corporation’s consolidated results are shown in the following table. Income taxes are allocated based on the separate taxable income of each entity and indirect overhead expenses are allocated based on reasonable and equitable allocations applicable to the reportable segment. CFS amounts are the primary differences between segment amounts and consolidated totals, and are reflected in the Holding Company, CFS, and CRM column below, along with amounts to eliminate transactions between those segments (in thousands).



	Three months ended September 30, 2017
	Core Banking		WMG		Holding Company, CFS, and CRM			Consolidated Totals
Interest and dividend income	$	15,487	$	—	$	10		$	15,497
Interest expense	734		—		—			734
Net interest income	14,753		—		10			14,763
Provision for loan losses	1,289		—		—			1,289
Net interest income after provision for loan losses	13,464		—		10			13,474
Other non-interest income	2,989		2,147		30			5,166
Legal accruals and settlements	—		—		—			—
Other non-interest expenses	11,651		1,370		255			13,276
Income (loss) before income tax expense (benefit)	4,802		777		(215		)	5,364
Income tax expense (benefit)	1,457		295		(42		)	1,710
Segment net income (loss)	$	3,345	$	482	$	(173	)	$	3,654



	Three months ended September 30, 2016
	Core Banking		WMG		Holding Company, CFS, and CRM			Consolidated Totals
Interest and dividend income	$	14,022	$	—	$	3		$	14,025
Interest expense	985		—		—			985
Net interest income	13,037		—		3			13,040
Provision for loan losses	1,050		—		—			1,050
Net interest income after provision for loan losses	11,987		—		3			11,990
Other non-interest income	3,240		2,027		168			5,435
Legal accruals and settlements	—		—		—			—
Other non-interest expenses	11,888		1,293		290			13,471
Income (loss) before income tax expense (benefit)	3,339		734		(119		)	3,954
Income tax expense (benefit)	974		277		(42		)	1,209
Segment net income (loss)	$	2,365	$	457	$	(77	)	$	2,745



	Nine months ended September 30, 2017
	Core Banking		WMG		Holding Company, CFS, and CRM			Consolidated Totals
Interest and dividend income	$	44,478	$	—	$	17		$	44,495
Interest expense	2,288		—		—			2,288
Net interest income	42,190		—		17			42,207
Provision for loan losses	2,750		—		—			2,750
Net interest income after provision for loan losses	39,440		—		17			39,457
Other non-interest income	8,228		6,525		282			15,035
Legal settlements	850		—		—			850
Other non-interest expenses	34,795		4,142		866			39,803
Income (loss) before income tax expense (benefit)	12,023		2,383		(567		)	13,839
Income tax expense (benefit)	3,523		904		(177		)	4,250
Segment net income (loss)	$	8,500	$	1,479	$	(390	)	$	9,589

Segment assets	$	1,721,571	$	4,112	$	5,999		$	1,731,682



	Nine months ended September 30, 2016
	Core Banking		WMG		Holding Company, CFS, and CRM			Consolidated Totals
Interest and dividend income	$	41,893	$	—	$	6		$	41,899
Interest expense	2,866		—		—			2,866
Net interest income	39,027		—		6			39,033
Provision for loan losses	2,033		—		—			2,033
Net interest income after provision for loan losses	36,994		—		6			37,000
Other non-interest income	9,516		6,240		496			16,252
Legal accruals and settlements	1,200		—		—			1,200
Other non-interest expenses	36,605		4,251		993			41,849
Income (loss) before income tax expense (benefit)	8,705		1,989		(491		)	10,203
Income tax expense (benefit)	2,591		751		(212		)	3,130
Segment net income (loss)	$	6,114	$	1,238	$	(279	)	$	7,073

Segment assets	$	1,721,739	$	4,398	$	2,728		$	1,728,865