Segment Reporting

9 Months Ended

Sep. 30, 2022

Segment Reporting

Segment Reporting

Note 12 – Segment Reporting

The Company has two reportable segments: traditional commercial banking and mortgage banking. Revenues from commercial banking operations consist primarily of interest earned on loans and securities and fees from deposit services. Mortgage banking operating revenues consist principally of interest earned on mortgage loans held for sale, gains on sales of loans in the secondary mortgage market, and loan origination fee income.

The Commercial Banking Segment provides the Mortgage Banking Segment with the short-term funds needed to originate mortgage loans through a warehouse line of credit and charges the Mortgage Banking Segment interest based on the Commercial Banking Segment’s cost of funds. Additionally, the Mortgage Banking Segment leases premises from the Commercial Banking Segment. These transactions are eliminated in the consolidation process.

The following table presents segment information as of and for the three and nine months ended September 30, 2022 and 2021 (in thousands):

	Commercial		Mortgage				Consolidated
	Banking		Banking		Eliminations		Totals
Three Months Ended September 30, 2022
Revenues
Interest income	$	6,885	$	70	$	—	$	6,955
Gain on sale of loans		—		1,350		—		1,350
Other revenues		822		108		(71)		859
Total revenues		7,707		1,528		(71)		9,164
Expenses
Provision for loan losses		100		—		—		100
Interest expense		420		—		—		420
Salaries and benefits		2,646		800		—		3,446
Commissions		—		459		—		459
Other expenses		1,853		296		(71)		2,078
Total operating expenses		5,019		1,555		(71)		6,503
Income (loss) before income taxes		2,688		(27)		—		2,661
Income tax expense (benefit)		514		(6)		—		508
Net income (benefit)	$	2,174	$	(21)	$	—	$	2,153
Total assets	$	755,071	$	18,281	$	(30,649)	$	742,703

	Commercial		Mortgage				Consolidated
	Banking		Banking		Eliminations		Totals
Three Months Ended September 30, 2021
Revenues
Interest income	$	6,818	$	104	$	(1)	$	6,921
Gain on sale of loans		—		2,704		—		2,704
Other revenues		733		228		(70)		891
Total revenues		7,551		3,036		(71)		10,516
Expenses
Recovery of provision for loan losses		—		—		—		—
Interest expense		493		—		(1)		492
Salaries and benefits		2,632		975		—		3,607
Commissions		—		736		—		736
Other expenses		1,738		362		(70)		2,030
Total operating expenses		4,863		2,073		(71)		6,865
Income before income taxes		2,688		963		—		3,651
Income tax expense		550		202		—		752
Net income	$	2,138	$	761	$	—	$	2,899
Total assets	$	733,611	$	19,417	$	(22,967)	$	730,061

	Commercial		Mortgage				Consolidated
	Banking		Banking		Eliminations		Totals
Nine Months Ended September 30, 2022
Revenues
Interest income	$	19,762	$	192	$	—	$	19,954
Gain on sale of loans		—		4,018		—		4,018
Other revenues		2,510		413		(148)		2,775
Total revenues		22,272		4,623		(148)		26,747
Expenses
Recovery of provision for loan losses		(300)		—		—		(300)
Interest expense		1,238		—		—		1,238
Salaries and benefits		7,900		2,494		—		10,394
Commissions		—		1,405		—		1,405
Other expenses		5,610		935		(148)		6,397
Total operating expenses		14,448		4,834		(148)		19,134
Income (loss) before income taxes		7,824		(211)		—		7,613
Income tax expense (benefit)		1,514		(44)		—		1,470
Net income (loss)	$	6,310	$	(167)	$	—	$	6,143
Total assets	$	755,071	$	18,281	$	(30,649)	$	742,703

	Commercial		Mortgage				Consolidated
	Banking		Banking		Eliminations		Totals
Nine Months Ended September 30, 2021
Revenues
Interest income	$	20,606	$	341	$	(24)	$	20,923
Gain on sale of loans		—		9,608		—		9,608
Other revenues		2,190		694		(205)		2,679
Total revenues		22,796		10,643		(229)		33,210
Expenses
Recovery of provision for loan losses		(500)		—		—		(500)
Interest expense		1,728		24		(24)		1,728
Salaries and benefits		7,274		3,267		—		10,541
Commissions		—		2,405		—		2,405
Other expenses		5,372		989		(205)		6,156
Total operating expenses		13,874		6,685		(229)		20,330
Income before income taxes		8,922		3,958		—		12,880
Income tax expense		1,959		831		—		2,790
Net income	$	6,963	$	3,127	$	—	$	10,090
Total assets	$	733,611	$	19,417	$	(22,967)	$	730,061