| Business Segments |
Note 7 – Business SegmentsSegment OverviewThe Company reports three business segments: 1.Community Banking – Provides loans, deposits, and related banking services to retail and commercial customers primarily in Central Virginia. Revenue is primarily from net interest income. 2.Mortgage Banking – Originates residential mortgage loans for sale into the secondary market, typically with servicing released. Revenue consists mainly of gains on loan sales. 3.Investment Advisory – Offers investment advisory and financial planning services through Pettyjohn, Wood & White, Inc. Revenue is primarily fee-based, tied to assets under management (AUM). Segments refer business to one another when appropriate. Robert R. Chapman III, President of the Company, is the Chief Operating Decision Maker (CODM). The CODM evaluates performance and allocates resources based on segment profit (pre-tax income). Supplemental data regularly reviewed by the CODM includes total loans held for investment, total deposits, and AUM, as these metrics provide additional insights into segment performance. Segment accounting policies are consistent with those in the consolidated financial statements.
Note 7 – Business Segments (continued) Significant Expense Categories. Significant segment expenses are reviewed regularly by the CODM and included in segment profit measures are separately presented. For the three and six months ended June 30, 2026 and 2025, these significant approximate expenses included: Community Banking: Salaries and employee benefits ($3.97 million and $4.01 million for the three months ended June 30, 2026 and 2025, respectively, and $8.30 million and $7.75 million for the six-month periods, respectively); data processing ($519 thousand and $782 thousand for the three-month periods, and $994 thousand and $1.60 million for the six-month periods); professional and other outside expenses ($731 thousand and $715 thousand for the three-month periods, and $1.44 million and $2.37 million for the six-month periods); equipment ($646 thousand and $631 thousand for the three-month periods, and $1.37 million and $1.28 million for the six-month periods); and occupancy ($492 thousand and $502 thousand for the three-month periods, and $1.07 million and $1.04 million for the six-month periods). Mortgage Banking: Salaries and employee benefits ($1.03 million and $903 thousand for the three-month periods, and $1.75 million and $1.53 million for the six-month periods); credit-related expenses ($247 thousand and $220 thousand for the three-month periods, and $351 thousand in both six-month periods); and occupancy costs ($29 thousand and $27 thousand for the three month periods, and $61 thousand and $59 thousand for the six-month periods). Investment Advisory: Salaries and employee benefits ($514 thousand and $442 thousand for the three-month periods, and $963 thousand and $859 thousand for the six-month periods); and amortization of intangible assets ($140 thousand and $280 thousand for each of the three- and six-month periods, respectively). Supplemental Segment Data Supplemental data regularly reviewed by the CODM includes total loans held for investment, total deposits, and AUM, as these metrics provide additional insights into segment performance: Community Banking: Total loans held for investment, net of allowance, were $686.1 million at June 30, 2026, compared to $661.4 million at December 31, 2025 and $649.1 million at June 30, 2025. Deposits totaled $942.1 million at June 30, 2026, compared to $944.1 million at December 31, 2025 and $915.4 million at June 30, 2025. Investment Advisory: AUM were $1.09 billion at June 30, 2026, compared to $1.03 billion at December 31, 2025 and $930.0 million at June 30, 2025. Note 7 – Business Segments (continued) Segment financial information, including significant expense categories and supplemental metrics, is presented in the tables below, along with reconciliations to consolidated financial statements for the three and six months ended June 30, 2026 and 2025 (dollars in thousands). | | | | | | | | Business Segments for the Three Months Ended | | June 30, 2026 | Dollars in Thousands | Community Banking | Mortgage Banking | Investment Advisory | Holding Company | Eliminations (1) | Consolidated | | | | | | | | Interest income | $ 12,287 | $ - | $ - | $ - | $ - | $ 12,287 | Interest expense | 2,906 | - | - | 127 | - | 3,033 | Net interest income | 9,381 | - | - | (127) | - | 9,254 | Gains on sales of loans | - | 1,529 | - | - | - | 1,529 | Other noninterest income | 1,514 | - | 1,466 | 3,358 | (3,391) | 2,947 | Net revenue | 10,895 | 1,529 | 1,466 | 3,231 | (3,391) | 13,730 | Less: | | | | | | | Provision for credit losses | 350 | - | - | - | - | 350 | | | | | | | | Noninterest expense: | | | | | | | Salaries and employee benefits | 3,969 | 1,027 | 514 | - | - | 5,510 | Occupancy | 492 | 29 | 35 | - | (33) | 523 | Equipment | 646 | 17 | 43 | - | - | 706 | Supplies | 116 | 7 | 9 | - | - | 132 | Professional and other outside expenses | 731 | - | 4 | 21 | - | 756 | Data processing | 519 | - | - | - | - | 519 | Marketing | 237 | 1 | 5 | 15 | - | 258 | Credit expense | 12 | 247 | - | - | - | 259 | FDIC insurance expense | 118 | - | - | - | - | 118 | Amortization of intangibles | - | - | 140 | - | - | 140 | Other | 364 | 4 | 21 | 1 | - | 390 | Total noninterest expense | 7,204 | 1,332 | 771 | 37 | (33) | 9,311 | | | | | | | | Segment income before income taxes | 3,341 | 197 | 695 | 3,194 | (3,358) | 4,069 | Allocated income tax expense | 644 | 41 | 188 | (44) | - | 829 | Segment net income | $ 2,697 | $ 156 | $ 507 | $ 3,238 | $ (3,358) | $ 3,240 | Segment assets at June 30, 2026 | $ 1,027,806 | $ 5,751 | $ 9,893 | $ 109,215 | $ (111,358) | $ 1,041,307 | | | | | | | | Supplemental Data at June 30, 2026: | | | | | | | Total loans held for investment, net | $ 686,084 | $ - | $ - | $ - | $ - | $ 686,084 | Total deposits | $ 942,124 | $ - | $ - | $ - | $ (6,940) | $ 935,184 | Assets under management | $ - | $ - | $ 1,091,367 | $ - | $ - | $ 1,091,367 |
(1)Primarily service/occupancy fees and equity in earnings of subsidiaries eliminated in consolidation. Note 7 – Business Segments (continued) | | | | | | | | Business Segments for the Three Months Ended | | June 30, 2025 | Dollars in Thousands | Community Banking | Mortgage Banking | Investment Advisory | Holding Company | Eliminations (1) | Consolidated | | | | | | | | Interest income | $ 11,638 | $ - | $ - | $ - | $ - | $ 11,638 | Interest expense | 3,186 | - | - | 168 | 34 | 3,388 | Net interest income | 8,452 | - | - | (168) | (34) | 8,250 | Gains on sales of loans | - | 1,589 | - | - | - | 1,589 | Other noninterest income | 1,217 | - | 1,300 | 2,845 | (2,876) | 2,486 | Net revenue | 9,669 | 1,589 | 1,300 | 2,677 | (2,910) | 12,325 | Less: | | | | | | | Provision for credit losses | (528) | - | - | - | - | (528) | | | | | | | | Noninterest expense: | | | | | | | Salaries and employee benefits | 4,013 | 903 | 442 | - | (1) | 5,357 | Occupancy | 502 | 27 | 32 | - | (64) | 497 | Equipment | 631 | 14 | 10 | (1) | - | 654 | Supplies | 153 | 5 | 10 | - | - | 168 | Professional and other outside expenses | 715 | - | 24 | 16 | - | 755 | Data processing | 782 | - | - | - | - | 782 | Marketing | 222 | - | 7 | 8 | - | 237 | Credit expense | 43 | 220 | - | - | - | 263 | FDIC insurance expense | 120 | - | - | - | - | 120 | Amortization of intangibles | - | - | 140 | - | - | 140 | Other | 409 | 51 | 21 | 1 | - | 482 | Total noninterest expense | 7,590 | 1,220 | 686 | 24 | (65) | 9,455 | | | | | | | | Segment income before income taxes | 2,607 | 369 | 614 | 2,653 | (2,845) | 3,398 | Allocated income tax expense | 502 | 78 | 166 | (52) | - | 694 | Segment net income | $ 2,105 | $ 291 | $ 448 | $ 2,705 | $ (2,845) | $ 2,704 | Segment assets at June 30, 2025 | $ 996,032 | $ 3,992 | $ 11,517 | $ 104,891 | $ (112,190) | $ 1,004,242 | | | | | | | | Supplemental Data at June 30, 2025: | | | | | | | Total loans held for investment, net | $ 649,089 | $ - | $ - | $ - | $ - | $ 649,089 | Total deposits | $ 915,417 | $ - | $ - | $ - | $ (4,890) | $ 910,527 | Assets under management | $ - | $ - | $ 929,957 | $ - | $ - | $ 929,957 |
(1)Primarily service/occupancy fees and equity in earnings of subsidiaries eliminated in consolidation.
Note 7 – Business Segments (continued) | | | | | | | | Business Segments for the Six Months Ended | | June 30, 2026 | Dollars in Thousands | Community Banking | Mortgage Banking | Investment Advisory | Holding Company | Eliminations (1) | Consolidated | | | | | | | | Interest income | $ 24,136 | $ - | $ - | $ - | $ - | $ 24,136 | Interest expense | 5,902 | - | - | 246 | - | 6,148 | Net interest income | 18,234 | - | - | (246) | | 17,988 | Gains on sales of loans | - | 2,725 | - | - | - | 2,725 | Other noninterest income | 2,899 | - | 2,879 | 6,245 | (6,308) | 5,715 | Net revenue | 21,133 | 2,725 | 2,879 | 5,999 | (6,308) | 26,428 | Less: | | | | | | | Provision credit losses | 204 | - | - | - | - | 204 | | | | | | | | Noninterest expense: | | | | | | | Salaries and employee benefits | 8,300 | 1,747 | 963 | - | - | 11,010 | Occupancy | 1,065 | 61 | 68 | - | (63) | 1,131 | Equipment | 1,370 | 31 | 52 | - | - | 1,453 | Supplies | 264 | 11 | 17 | - | - | 292 | Professional and other outside expenses | 1,442 | - | 41 | 43 | - | 1,526 | Data processing | 994 | - | - | - | - | 994 | Marketing | 410 | 3 | 8 | 26 | - | 447 | Credit expense | 98 | 351 | - | - | - | 449 | FDIC insurance expense | 254 | - | - | - | - | 254 | Amortization of intangibles | - | - | 280 | - | - | 280 | Other | 710 | 73 | 56 | 1 | - | 840 | Total noninterest expense | 14,907 | 2,277 | 1,485 | 70 | (63) | 18,676 | | | | | | | | Segment income before income taxes | 6,022 | 448 | 1,394 | 5,929 | (6,245) | 7,548 | Allocated income tax expense | 1,149 | 94 | 376 | (85) | - | 1,534 | Segment net income | $ 4,873 | $ 354 | $ 1,018 | $ 6,014 | $ (6,245) | $ 6,014 | Segment assets at June 30, 2026 | $ 1,027,806 | $ 5,751 | $ 9,893 | $ 109,215 | $ (111,358) | $ 1,041,307 | | | | | | | | Supplemental Data at June 30, 2026: | | | | | | | Total loans held for investment, net | $ 686,084 | $ - | $ - | $ - | $ - | $ 686,084 | Total deposits | $ 942,124 | $ - | $ - | $ - | $ (6,940) | $ 935,184 | Assets under management | $ - | $ - | $ 1,091,367 | $ - | $ - | $ 1,091,367 |
(1)Primarily service/occupancy fees and equity in earnings of subsidiaries eliminated in consolidation. | | | | | | | | Business Segments for the Six Months Ended | | June 30, 2025 | Dollars in Thousands | Community Banking | Mortgage Banking | Investment Advisory | Holding Company | Eliminations (1) | Consolidated | | | | | | | | Interest income | $ 22,872 | $ - | $ - | $ - | $ - | $ 22,872 | Interest expense | 6,530 | - | - | 339 | 34 | 6,903 | Net interest income | 16,342 | - | - | (339) | (34) | 15,969 | Gains on sales of loans | - | 2,426 | - | - | - | 2,426 | Other noninterest income | 2,438 | - | 2,555 | 3,837 | (3,898) | 4,932 | Net revenue | 18,780 | 2,426 | 2,555 | 3,498 | (3,932) | 23,327 | Less: | | | | | | | Provision for credit losses | (391) | - | - | - | - | (391) | | | | | | | | Noninterest expense: | | | | | | | Salaries and employee benefits | 7,751 | 1,525 | 859 | - | (1) | 10,134 | Occupancy | 1,037 | 59 | 65 | - | (94) | 1,067 | Equipment | 1,277 | 28 | 19 | - | - | 1,324 | Supplies | 283 | 9 | 18 | - | - | 310 | Professional and other outside expenses | 2,371 | - | 61 | 38 | - | 2,470 | Data processing | 1,602 | - | - | - | - | 1,602 | Marketing | 402 | 2 | 10 | 21 | - | 435 | Credit expense | 98 | 351 | - | - | - | 449 | FDIC insurance expense | 262 | - | - | - | - | 262 | Amortization of intangibles | - | - | 280 | - | - | 280 | Other | 809 | 82 | 56 | 1 | - | 948 | Total noninterest expense | 15,892 | 2,056 | 1,368 | 60 | (95) | 19,281 | | | | | | | | Segment income before income taxes | 3,279 | 370 | 1,187 | 3,438 | (3,837) | 4,437 | Allocated income tax expense | 600 | 78 | 321 | (108) | - | 891 | Segment net income | $ 2,679 | $ 292 | $ 866 | $ 3,546 | $ (3,837) | $ 3,546 | Segment assets at June 30, 2025 | $ 996,032 | $ 3,992 | $ 11,517 | $ 104,891 | $ (112,190) | $ 1,004,242 | | | | | | | | Supplemental Data at June 30, 2025: | | | | | | | Total loans held for investment, net | $ 649,089 | $ - | $ - | $ - | $ - | $ 649,089 | Total deposits | $ 915,417 | $ - | $ - | $ - | $ (4,890) | $ 910,527 | Assets under management | $ - | $ - | $ 929,957 | $ - | $ - | $ 929,957 |
(1)Primarily service/occupancy fees and equity in earnings of subsidiaries eliminated in consolidation.
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