Segment Reporting

9 Months Ended

Sep. 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 nine- and three-month periods ended September 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 $156,000 for both of the nine-month periods ended September 30, 2024 and 2023 and $52,000 for both of the three-month periods ended September 30, 2024 and 2023.

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

		Nine Months Ended
		September 30, 2024
				Trust and
		Community		Investment
(in thousands)		Banking		Services		Total
Interest income	$	68,268	$	-	$	68,268
Interest expense		23,990		-		23,990
Credit loss expense		2,404		-		2,404
Non-interest income		6,844		7,925		14,769
Non-interest expense		33,663		3,896		37,559
Income before income taxes and intercompany fees		15,055		4,029		19,084
Intercompany management fee income (expense)		9		(9)		-
Income before income taxes		15,064		4,020		19,084
Income tax expense		3,857		844		4,701
Net income	$	11,207	$	3,176	$	14,383
		Nine Months Ended
		September 30, 2023
				Trust and
		Community		Investment
(in thousands)		Banking		Services		Total
Interest income	$	58,965	$	-	$	58,965
Interest expense		16,289		-		16,289
Credit loss expense		1,201		-		1,201
Non-interest income		6,927		6,933		13,860
Non-interest expense		34,070		3,864		37,934
Income before income taxes and intercompany fees		14,332		3,069		17,401
Intercompany management fee income (expense)		9		(9)		-
Income before income taxes		14,341		3,060		17,401
Income tax expense		3,456		643		4,099
Net income	$	10,885	$	2,417	$	13,302

		Three Months Ended
		September 30, 2024
				Trust and
		Community		Investment
(in thousands)		Banking		Services		Total
Interest income	$	23,257	$	-	$	23,257
Interest expense		8,029		-		8,029
Credit loss expense		264		-		264
Non-interest income		2,428		2,625		5,053
Non-interest expense		11,048		1,266		12,314
Income before income taxes and intercompany fees		6,344		1,359		7,703
Intercompany management fee income (expense)		3		(3)		-
Income before income taxes		6,347		1,356		7,703
Income tax expense		1,647		285		1,932
Net income	$	4,700	$	1,071	$	5,771

		Three Months Ended
		September 30, 2023
				Trust and
		Community		Investment
(in thousands)		Banking		Services		Total
Interest income	$	21,164	$	-	$	21,164
Interest expense		7,180		-		7,180
Credit loss credit		263		-		263
Non-interest income		2,515		2,383		4,898
Non-interest expense		11,507		1,278		12,785
Income before income taxes and intercompany fees		4,729		1,105		5,834
Intercompany management fee income (expense)		3		(3)		-
Income before income taxes		4,732		1,102		5,834
Income tax expense		1,090		231		1,321
Net income	$	3,642	$	871	$	4,513

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