Industry Segment Information

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Industry Segment Information

Note 5 – Industry Segment Information

The services provided by the Company are classified into two reportable segments: Information Services and Banking Services. Each of these segments provides distinct services that are marketed through different channels. They are managed separately due to their unique service and processing requirements.

The Information Services segment provides transportation, energy, telecommunication, and environmental invoice processing and payment services to large corporations. The Banking Services segment provides banking services primarily to privately held businesses and churches as well as supporting the banking needs of the Information Services segment.

The Company’s accounting policies for segments are the same as those described in the summary of significant accounting policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Management evaluates segment performance based on tax-equivalized (as defined in the footnote to the chart on the following table) pre-tax income after allocations for corporate expenses. Transactions between segments are accounted for at what management believes to be fair value.

Substantially all revenue originates from, and all long-lived assets are located within the United States, and no revenue from any customer of any segment exceeds 10% of the Company’s consolidated revenue.

Funding sources represent average balances and deposits generated by Information Services and Banking Services and there is no allocation methodology used. Segment interest income is a function of the relative share of average funding sources generated by each segment multiplied by the following rates:

● Information Services – one or more fixed rates depending upon the specific characteristics of the funding source, and

● Banking Services – a variable rate that is based upon the overall performance of the Company’s earning assets.

Any difference between total segment interest income and overall total Company interest income is included in Corporate, Eliminations, and Other.

Summarized information about the Company’s operations in each industry segment is as follows:

					Corporate,
	Information		Banking		Eliminations
(In thousands)	Services		Services		and Other		Total
Three Months Ended June 30, 2018
Fee income from customers	$	25,262	$	318	$	60	$	25,640
Interest income*		5,334		5,735		1,068		12,137
Interest expense		–		794		–		794
Intersegment income (expense)		–		486		(486)		–
Tax-equivalized pre-tax income*		6,068		2,851		601		9,520
Goodwill		12,433		136		–		12,569
Other intangible assets, net		1,775		–		–		1,775
Total Assets		807,571		806,560		(43,826)		1,570,305
Funding Sources		617,287		553,237		–		1,170,524
Three Months Ended June 30, 2017
Fee income from customers	$	23,321	$	355	$	124	$	23,800
Interest income*		5,043		5,823		916		11,782
Interest expense		–		470		–		470
Intersegment income (expense)		–		323		(323)		–
Tax-equivalized pre-tax income*		6,360		3,286		565		10,211
Goodwill		12,433		136		–		12,569
Other intangible assets, net		2,217		–		–		2,217
Total Assets		863,562		742,659		(12,939)		1,593,282
Funding Sources		594,102		579,705		–		1,173,807
Six Months Ended June 30, 2018
Fee income from customers	$	50,134	$	694	$	186	$	51,014
Interest income*		10,850		11,486		1,777		24,113
Interest expense		–		1,473		–		1,473
Intersegment income (expense)		–		948		(948)		–
Tax-equivalized pre-tax income*		12,802		6,276		930		20,008
Goodwill		12,433		136		–		12,569
Other intangible assets, net		1,775		–		–		1,775
Total Assets		807,571		806,560		(43,826)		1,570,305
Funding Sources		631,022		574,419		–		1,205,441
Six Months Ended June 30, 2017
Fee income from customers	$	45,645	$	679	$	247	$	46,571
Interest income*		9,772		11,708		1,722		23,202
Interest expense		–		950		–		950
Intersegment income (expense)		–		623		(623)		–
Tax-equivalized pre-tax income*		11,816		6,742		1,046		19,604
Goodwill		12,433		136		–		12,569
Other intangible assets, net		2,217		–		–		2,217
Total Assets		863,562		742,659		(12,939)		1,593,282
Funding Sources		579,321		589,823		–		1,169,144

* Presented on a tax-equivalent basis assuming a tax rate of 21% for 2018 and 35% for 2017. The tax-equivalent adjustment was approximately $624,000 and $1,450,000 for the Second Quarter of 2018 and 2017, respectively, and $1,311,000 and $2,871,000 for the First Half of 2018 and 2017, respectively.