13.	SEGMENT REPORTING

Under

ASC Topic

280,

Segment Reporting

, certain information is disclosed for the

two

reportable operating segments of Bancshares: the Bank and ALC. The reportable segments were determined using the internal management reporting system. These segments comprise Bancshares’ and the Bank’s significant subsidiaries. The accounting policies for each segment are the same as those described in Note

“Summary of Significant Accounting Policies,” of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form

-K as of and for the year ended

December 31, 2016.

The segment results include certain overhead allocations and intercompany transactions that were recorded at current market prices. All intercompany transactions have been eliminated to determine the consolidated balances. The results for the

two

reportable segments of the Company are included in the tables below.

					All
	Bank		ALC		Other			Eliminations			Consolidated
	(Dollars in Thousands)
As of and for the three months ended June 30 , 2017 :
Net interest income	$	4,066	$	2,988	$	3		$	—		$	7,057
Provision (reduction in reserve) for loan losses		—		576		—			—			576
Total non-interest income		806		237		647			(760	)		930
Total non-interest expense		4,422		2,286		310			(155	)		6,863
Income before income taxes		450		363		340			(605	)		548
Provision for income taxes		103		126		(97	)		—			132
Net income	$	347	$	237	$	437		$	(605	)	$	416
Other significant items:
Total assets	$	618,431	$	91,629	$	83,655		$	(177,497	)	$	616,218
Total investment securities		200,751		—		80			—			200,831
Total loans, net		321,797		88,049		—			(79,320	)		330,526
Investment in subsidiaries		5		—		78,036			(78,036	)		5
Fixed asset additions		3,735		28		—			—			3,763
Depreciation and amortization expense		218		42		—			—			260
Total interest income from external customers		3,506		4,177		—			—			7,683
Total interest income from affiliates		1,189		—		3			(1,192	)		—

For the six months ended June 30, 2017:
Net interest income	$	7,977	$	5,993	$	6		$	—		$	13,976
Provision (reduction in reserve) for loan losses		—		1,091		—			—			1,091
Total non-interest income		1,642		480		1,498			(1,523	)		2,097
Total non-interest expense		8,823		4,662		739			(324	)		13,900
Income before income taxes		796		720		765			(1,199	)		1,082
Provision for income taxes		201		256		(195	)		—			262
Net income	$	595	$	464	$	960		$	(1,199	)	$	820
Other significant items:
Fixed asset additions		7,760		90		—			—			7,850
Depreciation and amortization expense		419		83		—			—			502
Total interest income from external customers		6,897		8,296		—			—			15,193
Total interest income from affiliates		2,302		—		6			(2,308	)		—


						All
	Bank			ALC		Other			Eliminations			Consolidated
	(Dollars in Thousands)
As of and for the three months ended June 30, 2016:
Net interest income	$	3,683		$	3,231	$	3		$	—		$	6,917
Provision (reduction in reserve) for loan losses		(170	)		706		—			—			536
Total non-interest income		1,120			342		834			(816	)		1,480
Total non-interest expense		4,463			2,478		458			(144	)		7,255
Income before income taxes		510			389		379			(672	)		606
Provision for income taxes		123			130		(109	)		—			144
Net income	$	387		$	259	$	488		$	(672	)	$	462
Other significant items:
Total assets	$	603,722		$	89,758	$	83,936		$	(175,662	)	$	601,754
Total investment securities		213,085			—		80			—			213,165
Total loans, net		290,473			86,006		—			(77,578	)		298,901
Investment in subsidiaries		5			—		78,511			(78,511	)		5
Fixed asset additions		337			12		—			—			349
Depreciation and amortization expense		191			56		—			—			247
Total interest income from external customers		3,211			4,267		—			—			7,478
Total interest income from affiliates		1,036			—		3			(1,039	)		—

For the six months ended June 30, 2016:
Net interest income	$	7,281		$	6,291	$	6		$	—		$	13,578
Provision (reduction in reserve) for loan losses		(450	)		1,153		—			—			703
Total non-interest income		1,842			593		1,508			(1,474	)		2,469
Total non-interest expense		8,798			4,904		898			(279	)		14,321
Income before income taxes		775			827		616			(1,195	)		1,023
Provision for income taxes		171			288		(215	)		—			244
Net income	$	604		$	539	$	831		$	(1,195	)	$	779
Other significant items:
Fixed asset additions		3,561			17		—			—			3,578
Depreciation and amortization expense		371			108		—			—			479
Total interest income from external customers		6,335			8,339		—			—			14,674
Total interest income from affiliates		2,048			—		5			(2,053	)		—