SEGMENT REPORTING

6 Months Ended

Jun. 30, 2021

SEGMENT REPORTING

SEGMENT REPORTING

NOTE 14 - SEGMENT REPORTING

The Company’s reportable segments consist of Wealth Management and Mortgage. The chief operating decision maker ("CODM") is the Chief Executive Officer. The measure of profit or loss used by the CODM to identify and measure the Company’s reportable segments is income before income tax.

The Company completed the sale of its LA fixed income team in the fourth quarter 2020. The LA fixed income team and the related assets made up a majority of the previously reported Capital Management Segment. As a result of the sale the Company evaluated its reportable segments and determined the remaining assets following the sale in the Capital

Management segment no longer meet the thresholds of income before income tax to be a reportable segment. The residual assets that remained in the Capital Management segment are now included in the Wealth Management segment.

The Wealth Management segment consists of operations relative to the Company’s fully integrated wealth management products and services. Services provided include deposit, loan, insurance, and trust and investment management advisory products and services.

The Mortgage segment consists of operations relative to the Company’s residential mortgage service offerings. Mortgage products and services are financial in nature for which premiums are recognized net of expenses, upon the sale of mortgage loans to third parties.

For 2020 periods presented, the Wealth Management segment includes the previously reported key metrics of the previously reported Capital Management segment.

The tables below present the financial information for each segment that is specifically identifiable or based on allocations using internal methods as of or for the three and six months ended June 30, 2021 and 2020 (in thousands):

As of and for the three months ended June 30, 2021	Wealth Management		Mortgage		Consolidated
Income Statement
Total interest income	$	15,548	$	—	$	15,548
Total interest expense		1,325		—		1,325
Provision for loan losses		12		—		12
Net interest income, after provision for loan losses		14,211		—		14,211
Non-interest income		5,571		3,927		9,498
Total income before non-interest expense		19,782		3,927		23,709
Depreciation and amortization expense		262		13		275
All other non-interest expense		12,537		2,709		15,246
Income before income taxes	$	6,983	$	1,205	$	8,188
Goodwill	$	24,191	$	—	$	24,191
Total assets	$	1,956,393	$	52,911	$	2,009,304

As of and for the three months ended June 30, 2020	Wealth Management		Mortgage		Consolidated
Income Statement
Total interest income	$	12,470	$	—	$	12,470
Total interest expense		1,674		—		1,674
Provision for loan losses		2,124		—		2,124
Net interest income, after provision for loan losses		8,672		—		8,672
Non-interest income		5,230		10,197		15,427
Total income before non-interest expense		13,902		10,197		24,099
Depreciation and amortization expense		255		21		276
All other non-interest expense		10,499		1,869		12,368
Income before income taxes	$	3,148	$	8,307	$	11,455
Goodwill	$	24,191	$	—	$	24,191
Assets held for sale		3,010		—		3,010
Total assets	$	1,730,957	$	79,569	$	1,810,526

As of and for the six months ended June 30, 2021	Wealth Management		Mortgage		Consolidated
Income Statement
Total interest income	$	30,047	$	—	$	30,047
Total interest expense		2,771		—		2,771
Provision for loan losses		12		—		12
Net interest income, after provision for loan losses		27,264		—		27,264
Non-interest income		10,989		9,124		20,113
Total income before non-interest expense		38,253		9,124		47,377
Depreciation and amortization expense		520		27		547
All other non-interest expense		24,833		5,770		30,603
Income before income taxes	$	12,900	$	3,327	$	16,227
Goodwill	$	24,191	$	—	$	24,191
Total assets	$	1,956,393	$	52,911	$	2,009,304

As of and for the six months ended June 30, 2020	Wealth Management			Mortgage		Consolidated
Income Statement
Total interest income	$	23,982		$	—	$	23,982
Total interest expense		4,255			—		4,255
Provision for loan losses		2,491			—		2,491
Net interest income, after provision for loan losses		17,236			—		17,236
Non-interest income		10,493			12,701		23,194
Total income before non-interest expense		27,729			12,701		40,430
Depreciation and amortization expense		510			42		552
All other non-interest expense		23,100	(1)		3,639		26,739
Income before income taxes	$	4,119		$	9,020	$	13,139
Goodwill	$	24,191		$	—	$	24,191
Assets held for sale		3,010			—		3,010
Total assets	$	1,730,957		$	79,569	$	1,810,526

______________________________________

⁽¹⁾ Includes loss on assets held for sale of $0.6 million.