19) Business Segment Information

The following presents the Company’s operating segments. The Company operates through two business segments: Banking segment and Factoring segment. Transactions between segments consist primarily of borrowed funds. Intersegment interest expense is allocated to the Factoring segment based on the Company’s prime rate and funding costs. The provision for loan loss is allocated based on the segment’s allowance for loan loss determination which considers the effects of charge-offs. Noninterest income and expense directly attributable to a segment are assigned to it. Taxes are paid on a consolidated basis and allocated for segment purposes. The Factoring segment includes only factoring originated by Bay View Funding.



	At or for the Year Ended
	December 31, 2017
	Banking(1)		Factoring		Consolidated
	(Dollars in thousands)
Interest income	$	95,027	$	11,884	$	106,911
Intersegment interest allocations		1,126		(1,126)		—
Total interest expense		5,387		—		5,387
Net interest income		90,766		10,758		101,524
Provision (credit) for loan losses		102		(3)		99
Net interest income after provision		90,664		10,761		101,425
Noninterest income		8,559		1,053		9,612
Noninterest expense (2)		53,860		6,878		60,738
Intersegment expense allocations		528		(528)		—
Income before income taxes		45,891		4,408		50,299
Income tax expense (3)		24,266		2,205		26,471
Net income	$	21,625	$	2,203	$	23,828

Total assets	$	2,780,286	$	63,166	$	2,843,452
Loans, net of deferred fees	$	1,533,841	$	48,826	$	1,582,667
Goodwill	$	32,620	$	13,044	$	45,664

(1)Includes the holding company’s results of operations.

(2)Includes $671,000 pre-tax acquisition costs related to the Tri-Valley and United American proposed mergers in the banking segment.

(3)Includes $7,103,000 of expense associated with remeasurement of the net DTA, of which $6,749,000 was in the banking segment, and $354,000 was in the factoring segment.



	At or for the Year Ended
	December 31, 2016
	Banking(1)		Factoring		Consolidated
	(Dollars in thousands)
Interest income	$	82,175	$	12,256	$	94,431
Intersegment interest allocations		1,163		(1,163)		—
Total interest expense		3,211		—		3,211
Net interest income		80,127		11,093		91,220
Provision for loan losses		1,181		56		1,237
Net interest income after provision		78,946		11,037		89,983
Noninterest income		10,821		804		11,625
Noninterest expense		50,298		7,341		57,639
Intersegment expense allocations		804		(804)		—
Income before income taxes		40,273		3,696		43,969
Income tax expense		15,036		1,552		16,588
Net income	$	25,237	$	2,144	$	27,381

Total assets	$	2,507,121	$	63,759	$	2,570,880
Loans, net of deferred fees	$	1,452,991	$	49,616	$	1,502,607
Goodwill	$	32,620	$	13,044	$	45,664

(1)Includes the holding company’s results of operations



	At or for the Year Ended
	December 31, 2015
	Banking(1)		Factoring		Consolidated
	(Dollars in thousands)
Interest income	$	66,306	$	12,437	$	78,743
Intersegment interest allocations		1,087		(1,087)		—
Total interest expense		2,422		—		2,422
Net interest income		64,971		11,350		76,321
Provision (credit) for loan losses		(156)		188		32
Net interest income after provision		65,127		11,162		76,289
Noninterest income		8,234		751		8,985
Noninterest expense (2)		51,438		7,235		58,673
Intersegment expense allocations		386		(386)		—
Income before income taxes		22,309		4,292		26,601
Income tax expense		8,301		1,803		10,104
Net income	$	14,008	$	2,489	$	16,497

Total assets	$	2,306,543	$	55,036	$	2,361,579
Loans, net of deferred fees	$	1,318,657	$	40,059	$	1,358,716
Goodwill	$	32,620	$	13,044	$	45,664

(1)

Includes the holding company’s results of operations

(2)

Includes $6,398,000 pre-tax acquisition costs related to the Focus acquisition.