Segment Reporting

12 Months Ended

Dec. 31, 2021

Segment Reporting

Segment Reporting

Note 19. 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 LHFS, 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 years ended December 31, 2021 and 2020 (in thousands):

	Commercial		Mortgage				Consolidated
	Banking		Banking		Eliminations		Totals
Year Ended December 31, 2021
Revenues
Interest income	$	27,282	$	409	$	(24)	$	27,667
Gain on sale of loans		—		11,762		—		11,762
Other revenues		3,001		864		(281)		3,584
Total revenues		30,283		13,035		(305)		43,013
Expenses
Provision for (recovery of) loan losses		(500)		—		—		(500)
Interest expense		2,172		24		(24)		2,172
Salaries and benefits		9,942		4,163		—		14,105
Commissions		—		3,004		—		3,004
Other expenses		7,314		1,326		(281)		8,359
Total operating expenses		18,928		8,517		(305)		27,140
Income before income taxes		11,355		4,518		—		15,873
Income tax expense		2,471		949		—		3,420
Net income	$	8,884	$	3,569	$	—	$	12,453
Total assets	$	760,653	$	19,673	$	(31,925)	$	748,401

	Commercial		Mortgage				Consolidated
	Banking		Banking		Eliminations		Totals
Year Ended December 31, 2020
Revenues
Interest income	$	25,404	$	581	$	(159)	$	25,826
Gain on sale of loans		—		11,703		—		11,703
Other revenues		2,688		1,408		(242)		3,854
Total revenues		28,092		13,692		(401)		41,383
Expenses
Provision for loan losses		950		—		—		950
Interest expense		4,433		159		(159)		4,433
Salaries and benefits		8,867		4,053		—		12,920
Commissions		—		3,312		—		3,312
Other expenses		7,784		1,187		(242)		8,729
Total operating expenses		22,034		8,711		(401)		30,344
Income before income taxes		6,058		4,981		—		11,039
Income tax expense		1,439		1,046		—		2,485
Net income	$	4,619	$	3,935	$	—	$	8,554
Total assets	$	704,258	$	18,604	$	(16,626)	$	706,236