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 September 30 , 2017 :
Net interest income	$	4,192		$	2,940	$	3		$	—		$	7,135
Provision (reduction in reserve) for loan losses		(130	)		503		—			—			373
Total non-interest income		1,005			219		954			(942	)		1,236
Total non-interest expense		4,699			2,303		336			(148	)		7,190
Income before income taxes		628			353		621			(794	)		808
Provision for income taxes		48			202		(77	)		—			173
Net income	$	580		$	151	$	698		$	(794	)	$	635
Other significant items:
Total assets	$	616,820		$	92,942	$	84,170		$	(179,333	)	$	614,599
Total investment securities		185,722			—		80			—			185,802
Total loans, net		329,327			89,326		—			(80,627	)		338,026
Investment in subsidiaries		5			—		78,469			(78,469	)		5
Fixed asset additions		818			13		—			—			831
Depreciation and amortization expense		238			41		—			—			279
Total interest income from external customers		3,596			4,224		—			—			7,820
Total interest income from affiliates		1,284			—		3			(1,287	)		—

For the nine months ended September 30, 2017:
Net interest income	$	12,168		$	8,933	$	10		$	—		$	21,111
Provision (reduction in reserve) for loan losses		(130	)		1,594		—			—			1,464
Total non-interest income		2,647			700		2,451			(2,465	)		3,333
Total non-interest expense		13,522			6,966		1,074			(472	)		21,090
Income before income taxes		1,423			1,073		1,387			(1,993	)		1,890
Provision for income taxes		249			458		(272	)		—			435
Net income	$	1,174		$	615	$	1,659		$	(1,993	)	$	1,455
Other significant items:
Fixed asset additions		8,578			103		—			—			8,681
Depreciation and amortization expense		657			124		—			—			781
Total interest income from external customers		10,493			12,520		—			—			23,013
Total interest income from affiliates		3,587			—		9			(3,596	)		—


						All
	Bank			ALC		Other			Eliminations			Consolidated
	(Dollars in Thousands)
As of and for the three months ended September 30, 2016:
Net interest income	$	3,917		$	3,253	$	3		$	—		$	7,173
Provision for loan losses		100			580		—			—			680
Total non-interest income		1,159			316		973			(881	)		1,567
Total non-interest expense		4,636			2,403		474			(165	)		7,348
Income (loss) before income taxes		340			586		502			(716	)		712
Provision for income taxes		52			196		(86	)		—			162
Net income (loss)	$	288		$	390	$	588		$	(716	)	$	550
Other significant items:
Total assets	$	602,123		$	89,347	$	84,291		$	(175,454	)	$	600,307
Total investment securities		209,486			—		80			—			209,566
Total loans, net		308,423			85,720		—			(77,022	)		317,121
Investment in subsidiaries		5			—		78,737			(78,737	)		5
Fixed asset additions		960			16		—			—			976
Depreciation and amortization expense		193			54		—			—			247
Total interest income from external customers		3,415			4,345		—			—			7,760
Total interest income from affiliates		1,092			—		3			(1,095	)		—

For the nine months ended September 30, 2016:
Net interest income	$	11,199		$	9,544	$	8		$	—		$	20,751
Provision (reduction in reserve) for loan losses		(350	)		1,733		—			—			1,383
Total non-interest income		3,002			909		2,481			(2,356	)		4,036
Total non-interest expense		13,435			7,306		1,373			(445	)		21,669
Income (loss) before income taxes		1,116			1,414		1,116			(1,911	)		1,735
Provision for income taxes		224			484		(302	)		—			406
Net income (loss)	$	892		$	930	$	1,418		$	(1,911	)	$	1,329
Other significant items:
Fixed asset additions		4,521			33		—			—			4,554
Depreciation and amortization expense		564			162		—			—			726
Total interest income from external customers		9,750			12,684		—			—			22,434
Total interest income from affiliates		3,140			—		8			(3,148	)		—