NOTE 15 Segment Reporting

The Company determines reportable segments based on the services offered, the significance of the services offered, the significance of those services to the Company’s financial statements, and management’s regular review of the operating results of those services. The Company operates through four operating segments: Banking, Retirement and Benefit Services, Wealth Management, and Mortgage.

The financial information presented on each segment sets forth net interest income, provision for loan losses, direct noninterest income, and direct noninterest expense, before indirect allocations. Corporate Administration includes the indirect overhead and is set forth in the table below. The segment net income before taxes represents direct revenue and expense before indirect allocations and income taxes.

The following table presents key metrics related to the Company’s segments for the periods presented:


	Three months ended September 30, 2019
				Retirement and		Wealth				Corporate
(dollars in thousands)		Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income		$	19,193	$	—	$	—	$	384	$	(896)	$	18,681
Provision for loan losses			1,498		—		—		—		—		1,498
Noninterest income			1,695		15,307		3,896		8,135		547		29,580
Noninterest expense			10,800		8,551		1,835		7,256		8,885		37,327
Net income before taxes		$	8,590	$	6,756	$	2,061	$	1,263	$	(9,234)	$	9,436


	Nine months ended September 30, 2019
				Retirement and		Wealth				Corporate
(dollars in thousands)		Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income		$	57,987	$	—	$	—	$	818	$	(2,713)	$	56,092
Provision for loan losses			5,515		—		—		—		—		5,515
Noninterest income			5,273		46,142		11,385		19,739		2,099		84,638
Noninterest expense			30,880		26,142		5,936		17,184		25,960		106,102
Net income before taxes		$	26,865	$	20,000	$	5,449	$	3,373	$	(26,574)	$	29,113


	Three months ended September 30, 2018
				Retirement and		Wealth				Corporate
(dollars in thousands)		Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income		$	19,568	$	—	$	17	$	248	$	(904)	$	18,929
Provision for loan losses			1,521		—		—		9		—		1,530
Noninterest income			1,710		15,536		3,685		5,318		9		26,258
Noninterest expense			10,042		8,948		1,709		5,319		8,318		34,336
Net income before taxes		$	9,715	$	6,588	$	1,993	$	238	$	(9,213)	$	9,321


	Nine months ended September 30, 2018
				Retirement and		Wealth				Corporate
(dollars in thousands)		Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income		$	57,960	$	—	$	47	$	653	$	(2,689)	$	55,971
Provision for loan losses			7,071		—		—		9		—		7,080
Noninterest income			5,159		46,873		10,948		13,551		77		76,608
Noninterest expense			29,416		27,338		5,702		14,273		23,685		100,414
Net income before taxes		$	26,632	$	19,535	$	5,293	$	(78)	$	(26,297)	$	25,085

Banking

The Banking division offers a complete line of loan, deposit, cash management, and treasury services through locations in North Dakota, Minnesota, and Arizona. These products and services are supported through web and mobile based applications. The majority of the Company’s assets and liabilities are in the Banking segment’s balance sheet.

Retirement and Benefit Services

Retirement and Benefit Services provides the following services nationally: recordkeeping and administration services to qualified retirement plans; ESOP trustee, recordkeeping, and administration; investment fiduciary services to retirement plans; health savings accounts, flex spending accounts, Cobra recordkeeping and administration services, and payroll to employers.

Wealth Management

The Wealth Management division provides advisory and planning services, investment management, and trust and fiduciary services to clients across the Company’s footprint.

Mortgage

The mortgage division offers first and second mortgage loans through a centralized mortgage unit in Minneapolis, Minnesota as well as through the Banking office locations.