(11) Segments

ASC Topic 280 – Segment Reporting identifies operating segments as components of an enterprise which are evaluated regularly by the Corporation’s Chief Operating Decision Maker, our Chief Executive Officer, in deciding how to allocate resources and assess performance. The Corporation has applied the aggregation criterion set forth in this codification to the results of its operations.

Our Banking segment consists of commercial and retail banking. The Banking segment generates interest income from its lending (including leasing) and investing activities and is dependent on the gathering of lower cost deposits from its branch network or borrowed funds from other sources for funding its loans, resulting in the generation of net interest income. The Banking segment also derives revenues from other sources including gains on the sale of available for sale investment securities, gains on the sale of residential mortgage loans, SBA income, service charges on deposit accounts, cash sweep fees, overdraft fees, BOLI income, title insurance fees, and other less significant non-interest income.

Meridian Wealth, a registered investment advisor and wholly-owned subsidiary of the Bank, provides a comprehensive array of wealth management services and products and the trusted guidance to help its clients and our banking customers prepare for the future. The unit generates non-interest income through advisory fees.

Meridian’s mortgage banking segment (“Mortgage”) consists of one central loan production facility and several loan production offices located throughout the Delaware Valley and Maryland. The Mortgage segment originates 1 – 4 family residential mortgages and sells nearly all of its production to third party investors. The unit generates net interest income on the loans it originates and holds temporarily, then earns fee income (primarily gain on sales) at the time of the sale. The unit also recognizes income from document preparation fees, changes in portfolio pipeline fair values and related net hedging gains.

The table below summarizes income and expenses, directly attributable to each business line, which has been included in the statement of operations.


	Segment Information
	Three Months Ended March 31, 2020					Three Months Ended March 31, 2019
(Dollars in thousands)	Bank		Wealth	Mortgage	Total	Bank		Wealth	Mortgage	Total
Net interest income	$	9,518	(2)	150	9,666	$	8,381	38	58	8,477
Provision for loan losses		1,552	—	—	1,552		219	—	—	219
Net interest income after provision		7,966	(2)	150	8,114		8,162	38	58	8,258

Non-interest Income
Mortgage banking income		102	—	7,800	7,902		39	—	4,869	4,908
Wealth management income		—	1,021	—	1,021		46	818	—	864
SBA income		569	—	—	569		—	—	—	—
Net change in fair values		(65)	—	1,817	1,752		—	—	430	430
Net gain (loss) on hedging activity		—	—	(1,425)	(1,425)				(275)	(275)
Other		444	0	92	536		378	—	142	520
Non-interest income		1,050	1,021	8,284	10,355		463	818	5,166	6,447
Non-interest expense		6,964	788	7,446	15,198		6,063	820	5,234	12,117
Income before income taxes	$	2,052	231	988	3,271	$	2,562	36	(10)	2,588

Total Assets	$	1,192,882	5,337	105,223	1,303,442	$	987,589	7,277	32,648	1,027,514