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 table includes selected financial information by business segments for June 30, 2018 and 2017.


	Community		Insurance Products		Parent		Consolidated
(Dollars in thousands)	Banking		and Services		Company		Total
For the three months ended June 30, 2018
Interest Income	$	13,668	$	-	$	6	$	13,674
Interest Expense		(1,041)		-		-		(1,041)
Provision for credit losses		(418)		-		-		(418)
Noninterest income		2,295		2,245		-		4,540
Noninterest expense		(6,665)		(1,975)		(2,188)		(10,828)
Net intersegment (expense) income		(1,903)		(151)		2,054		-
Income (loss) before taxes		5,936		119		(128)		5,927
Income tax (expense) benefit		(1,532)		(31)		27		(1,536)
Net Income (loss)	$	4,404	$	88	$	(101)	$	4,391

Total assets, June 30, 2018	$	1,428,419	$	16,454	$	6,842	$	1,451,714

For the three months ended June 30, 2017
Interest Income	$	11,443	$	(1)	$	7	$	11,449
Interest Expense		(549)		-		-		(549)
Provision for credit losses		(974)		-		-		(974)
Noninterest income		2,050		2,129		-		4,179
Noninterest expense		(6,183)		(2,025)		(1,991)		(10,199)
Net intersegment (expense) income		(1,917)		36		1,881		-
Income (loss) before taxes		3,870		139		(103)		3,906
Income tax (expense) benefit		(1,541)		(55)		42		(1,554)
Net Income (loss)	$	2,329	$	84	$	(61)	$	2,352

Total assets, June 30, 2017	$	1,346,340	$	10,031	$	6,427	$	1,362,798



	Community			Insurance Products			Parent			Consolidated
(Dollars in thousands)	Banking			and Services			Company			Total
For the six months ended June 30, 2018
Interest Income	$	26,765		$	-		$	12		$	26,777
Interest Expense		(1,815)			-			-			(1,815)
Provision for credit losses		(907)			-			-			(907)
Noninterest income		4,435			5,034			-			9,469
Noninterest expense		(14,012)			(3,975)			(4,303)			(22,290)
Net intersegment (expense) income		(3,734)			(296)			4,030			-
Income (loss) before taxes		10,732			763			(261)			11,234
Income tax (expense) benefit		(2,789)			(200)			204			(2,785)
Net Income (loss)	$	7,943			563			(57)			8,449

Total assets, June 30, 2018	$	1,428,419	-	$	16,454	-	$	6,842	-	$	1,451,714

For the six months ended June 30, 2017
Interest Income	$	21,830		$	(1)		$	67		$	21,896
Interest Expense		(1,063)			-			-			(1,063)
Provision for credit losses		(1,401)			-			-			(1,401)
Noninterest income		3,933			5,053			-			8,986
Noninterest expense		(12,044)			(3,834)			(3,972)			(19,850)
Net intersegment (expense) income		(3,594)			(162)			3,756			-
Income (loss) before taxes		7,661			1,056			(149)			8,568
Income tax (expense) benefit		(3,054)			(422)			60			(3,416)
Net Income (loss)	$	4,607		$	634		$	(89)		$	5,152

Total assets, June 30, 2017	$	1,346,340		$	10,031		$	6,427		$	1,362,798