22. SEGMENT RESULTS

The financial performance of the Company is also monitored by an internal funds transfer pricing profitability measurement system which produces line of business results and key performance measures. The Company's major business units include retail banking, commercial lending, trust, and investment/parent. The reported results reflect the underlying economics of the business segments. Expenses for centrally provided services are allocated based upon the cost and estimated usage of those services. The businesses are match-funded and interest rate risk is centrally managed and accounted for within the investment/parent business segment. The key performance measure the Company focuses on for each business segment is net income contribution.

Retail banking includes the deposit-gathering branch franchise and lending to both individuals and small businesses. Lending activities include residential mortgage loans, direct consumer loans, and small business commercial loans. Commercial banking to businesses includes commercial loans, and commercial real-estate loans. The trust segment contains our wealth management businesses which include the Trust Company, West Chester Capital Advisors, our registered investment advisory firm and financial services. Wealth management includes personal trust products and services such as personal portfolio investment management, estate planning and administration, custodial services and pre-need trusts. Also, institutional trust products and services such as 401(k) plans, defined benefit and defined contribution employee benefit plans, and individual retirement accounts are included in this segment. Financial services include the sale of mutual funds, annuities, and insurance products. The Wealth management businesses also includes the union collective investment funds, namely the ERECT and BUILD funds which are designed to use union pension dollars in construction projects that utilize union labor. The investment/parent includes the net results of investment securities and borrowing activities, general corporate expenses not allocated to the business segments, interest expense on guaranteed junior subordinated deferrable interest debentures, and centralized interest rate risk management. Inter-segment revenues were not material.

The contribution of the major business segments to the Consolidated Results of Operations were as follows:

YEAR ENDED DECEMBER 31, 2011

RETAIL
BANKING

COMMERCIAL
BANKING

TRUST

INVESTMENT/
PARENT

TOTAL

(IN THOUSANDS)

Net interest income

20,100

13,860

(1,718

)

32,283

Provision (credit) for loan loss

(263

)

(3,312

)

—

(3,575

)

Non-interest income

6,055

597

7,282

(365

)

13,569

Non-interest expense

23,470

7,833

6,118

2,616

40,037

Income (loss) before income taxes

2,948

9,936

1,205

(4,699

)

9,390

Income tax expense (benefit)

880

2,995

410

(1,432

)

2,853

Net income (loss)

2,068

6,941

795

(3,267

)

6,537

Total assets

337,869

442,087

3,917

195,203

979,076


	YEAR ENDED DECEMBER 31, 2010
	RETAIL BANKING		COMMERCIAL BANKING			TRUST		INVESTMENT/ PARENT			TOTAL
	(IN THOUSANDS)
Net interest income	$	18,940	$	12,252		$	60	$	1,090		$	32,342
Provision for loan loss		268		4,982			—		—			5,250
Non-interest income		6,875		663			6,286		143			13,967
Non-interest expense		23,906		7,463			6,013		2,315			39,697

Income (loss) before income taxes		1,641		470			333		(1,082	)		1,362
Income tax expense (benefit)		379		(27	)		111		(383	)		80

Net income (loss)	$	1,262	$	497		$	222	$	(699	)	$	1,282

Total assets	$	317,210	$	455,609		$	3,520	$	172,635		$	948,974


	YEAR ENDED DECEMBER 31, 2009
	RETAIL BANKING		COMMERCIAL BANKING			TRUST		INVESTMENT/ PARENT		TOTAL
	(IN THOUSANDS)
Net interest income	$	18,057	$	11,924		$	68	$	2,385	$	32,434
Provision for loan loss		523		14,627			—		—		15,150
Non-interest income		6,872		628			6,299		129		13,928
Non-interest expense		23,202		7,694			6,141		2,120		39,157

Income (loss) before income taxes		1,204		(9,769	)		226		394		(7,945	)
Income tax expense (benefit)		256		(3,399	)		78		15		(3,050	)

Net income (loss)	$	948	$	(6,370	)	$	148	$	379	$	(4,895	)

Total assets	$	323,053	$	500,552		$	3,538	$	142,883	$	970,026