Discontinued Operations

9 Months Ended

Sep. 30, 2011

Discontinued Operations [Abstract]

Discontinued Operations

2. Discontinued Operations

The results of operations of a component of an entity that has been disposed of shall be reported in discontinued operations if both the operations and cash flows of the component have been, or will be, eliminated from ongoing operations of the entity as a result of the disposal transaction and the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction.

All operations at Dover have been discontinued. Dover, acquired by the Company in 2003, originated, underwrote and closed mortgage loans for sale into the secondary market. It maintained a retail origination network based in Charlotte, North Carolina, which originated loans for properties located in North Carolina. Dover also engaged in the wholesale mortgage origination business and conducted retail mortgage origination business outside of North Carolina. Operations outside of the State of North Carolina and the wholesale mortgage origination business were discontinued in February 2011. On March 17, 2011, Dover discontinued all of its remaining operations.

In determining whether Dover met the conditions for a discontinued operation, the Company considered the relevant accounting guidance and concluded that the conditions were met during the first quarter of 2011. The Company determined that Dover has discontinued operating activities and, as such, the assets and liabilities of Dover are presented as discontinued assets and discontinued liabilities and the results of operations directly related to Dover's activity will be presented as discontinued operations for all periods. As a result, the Consolidated Balance Sheets and Statements of Operations for all periods reflect retrospective application of Dover's classification as a discontinued operation.

Assets and liabilities of discontinued operations at the dates indicated were as follows:

(dollars in thousands)	September 30,		December 31,
	2011		2010
Assets
Loans held for sale	$	233	$	37,079
Premises and equipment, net		28		169
Other real estate owned		—		168
Other assets		7		1,673
Assets of discontinued operations	$	268	$	39,089
Liabilities
Other liabilities	$	1,092	$	1,901
Liabilities of discontinued operations	$	1,092	$	1,901

Net (loss)/income from discontinued operations, net of tax, for three and nine months ended September 30, 2011 and 2010 were as follows:

(dollars in thousands)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2011			2010			2011			2010
Interest Income
Interest and fees on loans	$	12		$	72		$	67		$	485
Total interest income		12			72			67			485
Interest Expense
Other borrowed funds		—			—			—			—
Total interest expense		—			—			—			—
Net Interest Income before Provision for Loan Losses		12			72			67			485
Provision for loan losses		—			192			—			385
Net Interest Income/(Loss) after Provision for Loan Losses		12			(120	)		67			100
Noninterest Income
Mortgage loan (loss)/income		(2	)		1,679			(167	)		3,300
Other service charges, commissions and fees, net		—			(9	)		(11	)		(24	)
Other income		—			8			10			10
Total noninterest (loss)/income		(2	)		1,678			(168	)		3,286
Noninterest Expense
Personnel expense		(1	)		1,098			1,442			3,303
Net occupancy expense		5			71			216			194
Furniture, equipment and data processing expense		14			80			185			224
Professional fees		31			63			209			181
Stationery, printing and supplies		—			8			8			26
Advertising and marketing		(1	)		45			27			108
Other real estate owned expense		—			—			166			—
Provision for recourse loans		(8	)		72			3,317			214
Other expense		10			(186	)		264			(647	)
Total noninterest expense		50			1,251			5,834			3,603
Loss before income taxes		(40	)		307			(5,935	)		(217	)
Income tax (benefit)/expense		—			122			(213	)		(84	)
Net (Loss)/Income from Discontinued Operations, net of tax	$	(40	)	$	185		$	(5,722	)	$	(133	)

As a result of the decision to discontinue operations at Dover, Dover reduced its employees from 68 positions at December 31, 2010 to one position as of September 30, 2011. Dover has one part-time employee remaining at September 30, 2011, who continues to be employed by Dover to assist Dover in completing any remaining business transactions. Dover concluded substantially all of its remaining business at June 30, 2011.

All financial information in the consolidated financial statements and notes to the consolidated financial statements reflects continuing operations, unless otherwise noted.