Segment Reporting

3 Months Ended

Mar. 31, 2020

Segment Reporting

Segment Reporting

Note 13 – 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 months ended March 31, 2020 and 2019 (in thousands):

	Commercial		Mortgage				Consolidated
	Banking		Banking		Eliminations		Totals
Three Months Ended March 31, 2020
Revenues
Interest income	$	5,590	$	109	$	(15)	$	5,684
Gain on sale of loans		—		1,624		—		1,624
Other revenues		733		197		(57)		873
Total revenues		6,323		1,930		(72)		8,181
Expenses
Provision for loan losses		400		—		—		400
Interest expense		1,257		15		(15)		1,257
Salaries and benefits		2,208		814		—		3,022
Commissions		—		437		—		437
Other expenses		1,709		276		(57)		1,928
Total operating expenses		5,574		1,542		(72)		7,044
Income before income taxes		749		388		—		1,137
Income tax expense		158		81		—		239
Net income	$	591	$	307	$	—	$	898
Total assets	$	570,751	$	12,433	$	(12,979)	$	570,205

	Commercial		Mortgage				Consolidated
	Banking		Banking		Eliminations		Totals
Three Months Ended March 31, 2019
Revenues
Interest income	$	5,646	$	63	$	—	$	5,709
Gain on sale of loans		—		928		—		928
Other revenues		774		112		(57)		829
Total revenues		6,420		1,103		(57)		7,466
Expenses
Interest expense		1,243		—		—		1,243
Salaries and benefits		2,200		736		—		2,936
Commissions		—		239		—		239
Other expenses		1,882		238		(57)		2,063
Total operating expenses		5,325		1,213		(57)		6,481
Income before income taxes		1,095		(110)		—		985
Income tax expense		199		(23)		—		176
Net income	$	896	$	(87)	$	—	$	809
Total assets	$	525,782	$	9,892	$	(13,400)	$	522,274