Segment Reporting

6 Months Ended

Jun. 30, 2024

Segment Reporting

Segment Reporting

Note 13 – Segment Reporting

Currently, the Corporation conducts business in two operating segments:  (i) Community Banking; and (ii) Trust and Investment Services.  The accounting policies of the segments are the same as those described in the summary of significant accounting policies provided earlier in this report.

Business activity for the operating segments are as follows:

Community Banking:  The Community Banking segment is conducted through the Bank and involves delivering a broad range of financial products and services, including various loan and deposit products, to consumer, business, and not-for-profit customers.  Parent company income and assets are included in the Community Banking segment, as the majority of parent company functions are related to this segment.  Major revenue sources include net interest income, gains on sales of mortgage loans, and service charges on deposit accounts.  Expenses include personnel, occupancy, marketing, equipment, and other expenses.  Non-cash charges other than depreciation of fixed assets were immaterial for the six- and three-month periods ended June 30, 2024 and 2023.

Trust and Investment Services:  The Trust and Investment Services segment is conducted through the Bank and offers corporate trustee services, trust and estate administration, IRA administration and custody services.  Revenues for this segment is generated from administration, service and custody fees, as well as management fees that are derived from Assets Under Management.  Expenses include personnel, occupancy, marketing, equipment, and other expenses.   Non-cash charges associated with amortization of intangibles were approximately $104,000 for both of the six-month periods ended June 30, 2024 and 2023 and $52,000 for both of the three-month periods ended June 30, 2024 and 2023.

Information for the operating segments for the six- and three-month periods ended June 30, 2024 and 2023 are presented in the following tables:

		Six Months Ended
		June 30, 2024
				Trust and
		Community		Investment
(in thousands)		Banking		Services		Total
Interest income	$	45,011	$	-	$	45,011
Interest expense		15,961		-		15,961
Credit loss expense		2,140		-		2,140
Non-interest income		4,417		5,299		9,716
Non-interest expense		22,609		2,636		25,245
Income before income taxes and intercompany fees		8,718		2,663		11,381
Intercompany management fee income (expense)		6		(6)		-
Income before income taxes		8,724		2,657		11,381
Income tax expense		2,210		559		2,769
Net income	$	6,514	$	2,098	$	8,612

		Six Months Ended
		June 30, 2023
				Trust and
		Community		Investment
(in thousands)		Banking		Services		Total
Interest income	$	37,801	$	-	$	37,801
Interest expense		9,109		-		9,109
Credit loss expense		938		-		938
Non-interest income		4,411		4,551		8,962
Non-interest expense		22,562		2,587		25,149
Income before income taxes and intercompany fees		9,603		1,964		11,567
Intercompany management fee income (expense)		6		(6)		-
Income before income taxes		9,609		1,958		11,567
Income tax expense		2,367		411		2,778
Net income	$	7,242	$	1,547	$	8,789

		Three Months Ended
		June 30, 2024
				Trust and
		Community		Investment
(in thousands)		Banking		Services		Total
Interest income	$	23,113	$	-	$	23,113
Interest expense		7,875		-		7,875
Credit loss expense		1,194		-		1,194
Non-interest income		2,225		2,616		4,841
Non-interest expense		11,015		1,349		12,364
Income before income taxes and intercompany fees		5,254		1,267		6,521
Intercompany management fee income (expense)		3		(3)		-
Income before income taxes		5,257		1,264		6,521
Income tax expense		1,341		266		1,607
Net income	$	3,916	$	998	$	4,914
		Three Months Ended
		June 30, 2023
				Trust and
		Community		Investment
(in thousands)		Banking		Services		Total
Interest income	$	19,972	$	-	$	19,972
Interest expense		5,798		-		5,798
Credit loss credit		395		-		395
Non-interest income		2,286		2,283		4,569
Non-interest expense		11,177		1,334		12,511
Income before income taxes and intercompany fees		4,887		950		5,837
Intercompany management fee income (expense)		3		(3)		-
Income before income taxes		4,890		947		5,837
Income tax expense		1,224		199		1,423
Net income	$	3,666	$	748	$	4,414

Total non-fiduciary assets of the trust and investment services segment were $0.7 million (including $0.6 million in intangible assets) at both June 30, 2024 and December 31, 2023.  All other assets (including goodwill of $11.0 million at June 30, 2024 and December 31, 2023 and other intangible assets of $0.4 million and $0.5 million at June 30, 2024 and December 31, 2023, respectively) were held by the community banking segment.