17) 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.


	Three Months Ended June 30, 2018
	Banking(1)		Factoring		Consolidated
	(Dollars in thousands)
Interest income	$	28,625		3,355	$	31,980
Intersegment interest allocations		376		(376)		—
Total interest expense		1,816		—		1,816
Net interest income		27,185		2,979		30,164
Provision for loan losses		7,141		57		7,198
Net interest income after provision		20,044		2,922		22,966
Noninterest income		2,531		249		2,780
Noninterest expense (2)		23,301		1,561		24,862
Intersegment expense allocations		227		(227)		—
Income before income taxes		(499)		1,383		884
Income tax (benefit) expense		(440)		409		(31)
Net (loss) income	$	(59)	$	974	$	915

Total assets	$	3,044,221	$	78,986	$	3,123,207
Loans, net of deferred fees	$	1,893,147	$	63,486	$	1,956,633
Goodwill	$	71,373	$	13,044	$	84,417

(1)

Includes the holding company’s results of operations

(2)

The banking segment’s noninterest expense includes acquisition costs of $8,214,000


	Three Months Ended June 30, 2017
	Banking(1)		Factoring		Consolidated
	(Dollars in thousands)
Interest income	$	23,372	$	2,735	$	26,107
Intersegment interest allocations		242		(242)		—
Total interest expense		1,174		—		1,174
Net interest income		22,440		2,493		24,933
Provision for loan losses		(46)		—		(46)
Net interest income after provision		22,486		2,493		24,979
Noninterest income		1,937		356		2,293
Noninterest expense		13,424		1,830		15,254
Intersegment expense allocations		129		(129)		—
Income before income taxes		11,128		890		12,018
Income tax expense		4,196		373		4,569
Net income	$	6,932	$	517	$	7,449

Total assets	$	2,676,599	$	56,301	$	2,732,900
Loans, net of deferred fees	$	1,523,928	$	42,396	$	1,566,324
Goodwill	$	32,620	$	13,044	$	45,664

(1)

Includes the holding company’s results of operations




	Six Months Ended June 30, 2018
	Banking(1)		Factoring		Consolidated
	(Dollars in thousands)
Interest income	$	53,356	$	6,501	$	59,857
Intersegment interest allocations		703		(703)		—
Total interest expense		3,345		—		3,345
Net interest income		50,714		5,798		56,512
Provision (credit) for loan losses		7,629		75		7,704
Net interest income after provision		43,085		5,723		48,808
Noninterest income		4,617		358		4,975
Noninterest expense (2)		37,768		3,084		40,852
Intersegment expense allocations		402		(402)		—
Income before income taxes		10,336		2,595		12,931
Income tax expense		2,440		767		3,207
Net income	$	7,896	$	1,828	$	9,724

Total assets	$	3,044,221		78,986	$	3,123,207
Loans, net of deferred fees	$	1,893,147		63,486	$	1,956,633
Goodwill	$	71,373		13,044	$	84,417

(1)

Includes the holding company’s results of operations

(2)

The banking segment’s noninterest expense includes acquisition costs of $8,829,000



	Six Months Ended June 30, 2017
	Banking(1)		Factoring		Consolidated
	(Dollars in thousands)
Interest income	$	45,341	$	5,463	$	50,804
Intersegment interest allocations		502		(502)		—
Total interest expense		2,045		—		2,045
Net interest income		43,798		4,961		48,759
Provision for loan losses		265		10		275
Net interest income after provision		43,533		4,951		48,484
Noninterest income		4,052		536		4,588
Noninterest expense		27,003		3,579		30,582
Intersegment expense allocations		262		(262)		—
Income before income taxes		20,844		1,646		22,490
Income tax expense		7,812		691		8,503
Net income	$	13,032	$	955	$	13,987

Total assets	$	2,676,599	$	56,301	$	2,732,900
Loans, net of deferred fees	$	1,523,928	$	42,396	$	1,566,324
Goodwill	$	32,620	$	13,044	$	45,664

(1)

Includes the holding company’s results of operations