Segment Information

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Segment Information

Segment InformationOur operations are conducted through two operating segments: Banking and Mortgage Operations. Corporate represents costs not allocated to the operating segments. Operating segments are defined as components of an enterprise that engage in business activity from which revenues are earned and expenses are incurred for which discrete financial information is available that is evaluated regularly by executive management in deciding how to allocate resources and in assessing performance. Operating segments have been determined based on the products and services offered and reflect the manner in which financial information is currently evaluated by management. Each segment operates under the same banking charter, but is reported on a segmented basis for this report. Each of the operating segments is complementary to each other and because of the interrelationship of the segments, the information presented is not indicative of how the segments would perform if they operated as independent entities.

The Banking segment originates loans and provides deposits and fee based services to consumer, business, and mortgage lending customers. Products offered include a full range of commercial and consumer banking and financial services. The interest income on loans held-for-investment is recognized in the Banking segment, excluding newly originated residential first mortgages within the Mortgage Operations segment.

The Mortgage Operations segment originates, sells, services, and manages market risk from changes in interest rates on one-to-four family residential mortgage loans to sell or hold on our balance sheet. Loans originated-to-sell comprise the majority of the lending activity. The Mortgage Operations segment recognizes interest income on loans that are held-for-sale and newly originated residential mortgages held-for-investment, the gains from one to four family residential mortgage sales, and revenue for servicing loans and other ancillary fees following a sales transaction. Revenue from servicing activities is earned on a contractual fee basis. The Mortgage Operations segment services loans for the held-for-investment portfolio, for which it earns revenue via an intercompany service fee allocation which appears as a cost to Banking in mortgage fees. Forward traded loan purchases and sales settlements as well as mortgage servicing rights and related fair value adjustments are reported in this segment.

Corporate represents miscellaneous other expenses of a corporate nature as well as revenue and expenses not directly assigned or allocated to the Banking or Mortgage Operations segments. The majority of executive management’s time is spent managing operating segments; related costs have been allocated between the operating segments and Corporate.

Revenues are comprised of net interest income before the provision (benefit) for credit losses and noninterest income. Noninterest expenses are allocated to each operating segment. Provision for credit losses is primarily allocated to the Banking segment. Allocation methodologies may be subject to periodic adjustment as management systems evolve and/or the business or product lines within the segments change.

Significant segment totals are reconciled to the financial statements as follows for the three months ended June 30,:

	Banking		Mortgage Operations		Corporate		Total Segments
2023
Summary of Operations
Net interest income (loss)	$	73,626	$	1,479	$	(1,270)	$	73,835
Provision (benefit) for credit losses	3,649		773		—		4,422
Noninterest income:
Service charges on deposit accounts	5,358		—		—		5,358
Credit and debit card fees	3,056		1		—		3,057
Trust and investment advisory fees	1,478		—		—		1,478
Income from mortgage banking services, net	(412)		12,071		—		11,659
Other noninterest income	2,738		—		—		2,738
Total noninterest income	12,218		12,072		—		24,290
Noninterest expense:
Salary and employee benefits	26,182		7,252		622		34,056
Occupancy and equipment	7,232		671		45		7,948
Other noninterest expenses	11,887		3,826		326		16,039
Total noninterest expense	45,301		11,749		993		58,043
Income (loss) before income taxes	$	36,894	$	1,029	$	(2,263)	$	35,660
Other Information
Depreciation expense	$	1,654	$	59	$	—	$	1,713
Identifiable assets	$	6,886,328	$	843,483	$	67,533	$	7,797,344

	Banking		Mortgage Operations		Corporate		Total Segments
2022
Summary of Operations
Net interest income	$	58,164	$	2,060	$	(1,639)	$	58,585
Provision for (benefit from) credit losses	3,823		1,177		—		5,000
Noninterest income:
Service charges on deposit accounts	4,379		—		—		4,379
Credit and debit card fees	2,990		—		—		2,990
Trust and investment advisory fees	1,909		—		—		1,909
Income from mortgage banking services, net	(291)		11,962		—		11,671
Other noninterest income	1,354		(1)		—		1,353
Total noninterest income	10,341		11,961		—		22,302
Noninterest expense:
Salary and employee benefits	23,951		10,518		779		35,248
Occupancy	6,891		861		1		7,753
Other noninterest expenses	27,171		3,953		1,543		32,667
Total noninterest expense	58,013		15,332		2,323		75,668
Income (loss) before income taxes	$	6,669	$	(2,488)	$	(3,962)	$	219
Other Information
Depreciation expense	$	1,861	$	110	$	—	$	1,971
Identifiable assets	$	6,361,838	$	661,307	$	37,547	$	7,060,692

Significant segment totals are reconciled to the financial statements as follows for the six months ended June 30,:

	Banking		Mortgage Operations		Corporate		Total Segments
2023
Summary of Operations
Net interest income (loss)	$	147,112	$	3,361	$	(2,521)	$	147,952
Provision for credit losses	6,063		1,719		—		7,782
Noninterest income:
Service charges on deposit accounts	10,373		—		—		10,373
Credit and debit card fees	6,037		1		—		6,038
Trust and investment advisory fees	2,939		—		—		2,939
Income from mortgage banking services, net	(600)		19,688		—		19,088
Other noninterest income	4,783		—		—		4,783
Total noninterest income	23,532		19,689		—		43,221
Noninterest expense:
Salary and employee benefits	53,966		14,024		1,115		69,105
Occupancy and equipment	14,656		1,381		85		16,122
Other noninterest expenses	20,303		7,335		1,444		29,082
Total noninterest expense	88,925		22,740		2,644		114,309
Income (loss) before income taxes	$	75,656	$	(1,409)	$	(5,165)	$	69,082
Other Information
Depreciation expense	$	3,303	$	120	$	—	$	3,423
Identifiable assets	$	6,886,328	$	843,483	$	67,533	$	7,797,344

	Banking		Mortgage Operations		Corporate		Total Segments
2022
Summary of Operations
Net interest income	$	99,447	$	3,701	$	(3,278)	$	99,870
Provision for (benefit from) credit losses	6,630		2,070		—		8,700
Noninterest income:
Service charges on deposit accounts	8,304		—		—		8,304
Credit and debit card fees	5,405		—		—		5,405
Trust and investment advisory fees	3,856		—		—		3,856
Income from mortgage banking services, net	(1,271)		27,503		—		26,232
Other noninterest income	2,207		(9)		—		2,198
Total noninterest income	18,501		27,494		—		45,995
Noninterest expense:
Salary and employee benefits	46,670		21,932		871		69,473
Occupancy	12,747		1,838		1		14,586
Other noninterest expenses	35,057		7,125		1,894		44,076
Total noninterest expense	94,474		30,895		2,766		128,135
Income (loss) before income taxes	$	16,844	$	(1,770)	$	(6,044)	$	9,030
Other Information
Depreciation expense	$	3,172	$	213	$	—	$	3,385
Identifiable assets	$	6,361,838	$	661,307	$	37,547	$	7,060,692