Business Segment Information

9 Months Ended

Sep. 30, 2020

Business Segment Information

Business Segment Information

18) 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 credit losses on loans 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 September 30, 2020
	Banking(1)		Factoring		Consolidated
	(Dollars in thousands)
Interest income	$	33,820		2,432	$	36,252
Intersegment interest allocations		184		(184)		—
Total interest expense		2,087		—		2,087
Net interest income		31,917		2,248		34,165
Provision for credit losses on loans		169		28		197
Net interest income after provision		31,748		2,220		33,968
Noninterest income		2,412		183		2,595
Noninterest expense (2)		19,594		1,574		21,168
Intersegment expense allocations		72		(72)		—
Income before income taxes		14,638		757		15,395
Income tax (benefit) expense		3,974		224		4,198
Net income	$	10,664	$	533	$	11,197
Total assets	$	4,541,331	$	65,454	$	4,606,785
Loans, net of deferred fees	$	2,649,334	$	47,682	$	2,697,016
Goodwill	$	154,587	$	13,044	$	167,631

	Three Months Ended September 30, 2019
	Banking(1)		Factoring		Consolidated
	(Dollars in thousands)
Interest income	$	30,371		2,879	$	33,250
Intersegment interest allocations		303		(303)		—
Total interest expense		2,625		—		2,625
Net interest income		28,049		2,576		30,625
Provision (credit) for loan losses		(1,019)		443		(576)
Net interest income after provision		29,068		2,133		31,201
Noninterest income		2,488		130		2,618
Noninterest expense (2)		16,204		1,705		17,909
Intersegment expense allocations		125		(125)		—
Income before income taxes		15,477		433		15,910
Income tax expense		4,505		128		4,633
Net income	$	10,972	$	305	$	11,277
Total assets	$	3,119,367	$	63,104	$	3,182,471
Loans, net of deferred fees	$	1,831,172	$	44,215	$	1,875,387
Goodwill	$	70,709	$	13,044	$	83,753

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

(2) The banking segment’s noninterest expense includes merger-related costs of $17,000 and $661,000 for the third quarters of 2020 and 2019, respectively.

	Nine Months Ended September 30, 2020
	Banking (1)		Factoring		Consolidated
	(Dollars in thousands)
Interest income	$	106,455	$	7,871	$	114,326
Intersegment interest allocations		686		(686)		—
Total interest expense		6,641		—		6,641
Net interest income		100,500		7,185		107,685
Provision for credit losses on loans		14,150		431		14,581
Net interest income after provision		86,350		6,754		93,104
Noninterest income		7,318		548		7,866
Noninterest expense (2)		63,113		4,841		67,954
Intersegment expense allocations		307		(307)		—
Income before income taxes		30,862		2,154		33,016
Income tax expense		8,703		637		9,340
Net income	$	22,159	$	1,517	$	23,676
Total assets	$	4,541,331	$	65,454	$	4,606,785
Loans, net of deferred fees	$	2,649,334	$	47,682	$	2,697,016
Goodwill	$	154,587	$	13,044	$	167,631

	Nine Months Ended September 30, 2019
	Banking (1)		Factoring		Consolidated
	(Dollars in thousands)
Interest income	$	91,388	$	8,800	$	100,188
Intersegment interest allocations		909		(909)		—
Total interest expense		7,605		—		7,605
Net interest income		84,692		7,891		92,583
Provision for loan losses		(2,655)		278		(2,377)
Net interest income after provision		87,347		7,613		94,960
Noninterest income		7,361		490		7,851
Noninterest expense (2)		49,189		5,083		54,272
Intersegment expense allocations		378		(378)		—
Income before income taxes		45,897		2,642		48,539
Income tax expense		12,982		781		13,763
Net income	$	32,915	$	1,861	$	34,776
Total assets	$	3,119,367	$	63,104	$	3,182,471
Loans, net of deferred fees	$	1,831,172	$	44,215	$	1,875,387
Goodwill	$	70,709	$	13,044	$	83,753

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

(2) The banking segment’s noninterest expense includes merger-related costs of $2,500,000 and $1,201,000 for the first nine months of 2020 and 2019, respectively.