SEGMENT REPORTING

9 Months Ended

Sep. 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 nine months ended September 30, 2021 and 2020 (in thousands):

As of and for the three months ended September 30, 2021	Wealth Management		Mortgage		Consolidated
Income Statement
Total interest income	$	16,146	$	—	$	16,146
Total interest expense		1,300		—		1,300
Provision for loan losses		406		—		406
Net interest income, after provision for loan losses		14,440		—		14,440
Non-interest income		5,998		4,497		10,495
Total income before non-interest expense		20,438		4,497		24,935
Depreciation and amortization expense		272		13		285
All other non-interest expense		13,967		2,217		16,184
Income before income taxes	$	6,199	$	2,267	$	8,466
Goodwill	$	24,191	$	—	$	24,191
Total assets		2,020,896		55,376		2,076,272

As of and for the three months ended September 30, 2020	Wealth Management		Mortgage		Consolidated
Income Statement
Total interest income	$	14,410	$	—	$	14,410
Total interest expense		1,492		—		1,492
Provision for loan losses		1,496		—		1,496
Net interest income, after provision for loan losses		11,422		—		11,422
Non-interest income		5,709		12,323		18,032
Total income before non-interest expense		17,131		12,323		29,454
Depreciation and amortization expense		260		14		274
All other non-interest expense		14,291		2,067		16,358
Income before income taxes	$	2,580	$	10,242	$	12,822
Goodwill	$	24,191	$	—	$	24,191
Assets held for sale		3,000		—		3,000
Total assets		1,867,748		105,149		1,972,897

As of and for the nine months ended September 30, 2021	Wealth Management		Mortgage		Consolidated
Income Statement
Total interest income	$	46,193	$	—	$	46,193
Total interest expense		4,071		—		4,071
Provision for loan losses		418		—		418
Net interest income, after provision for loan losses		41,704		—		41,704
Non-interest income		16,987		13,621		30,608
Total income before non-interest expense		58,691		13,621		72,312
Depreciation and amortization expense		792		40		832
All other non-interest expense		38,800		7,987		46,787
Income before income taxes	$	19,099	$	5,594	$	24,693
Goodwill	$	24,191	$	—	$	24,191
Total assets		2,020,896		55,376		2,076,272

As of and for the nine months ended September 30, 2020	Wealth Management			Mortgage		Consolidated
Income Statement
Total interest income	$	38,392		$	—	$	38,392
Total interest expense		5,747			—		5,747
Provision for loan losses		3,987			—		3,987
Net interest income, after provision for loan losses		28,658			—		28,658
Non-interest income		16,202			25,024		41,226
Total income before non-interest expense		44,860			25,024		69,884
Depreciation and amortization expense		770			56		826
All other non-interest expense		37,391	(1)		5,706		43,097
Income before income taxes	$	6,699		$	19,262	$	25,961
Goodwill	$	24,191		$	—	$	24,191
Assets held for sale		3,000			—		3,000
Total assets		1,867,748			105,149		1,972,897

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⁽¹⁾ Includes loss on assets held for sale of $0.6 million and $0.2 million SEC penalty.