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Segment Reporting
 9 Months Ended
Sep. 30, 2020
Segment Reporting  
Segment Reporting

NOTE 14 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 for each segment includes 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, 2020

 

 

 

 

 

Retirement and

 

Wealth

 

 

 

 

Corporate

 

 

 

(dollars in thousands)

    

Banking

    

Benefit Services

    

Management

    

Mortgage

    

Administration

    

Consolidated

Net interest income

 

$

21,994

 

$

 —

 

$

 —

 

$

613

 

$

(842)

 

$

21,765

Provision for loan losses

 

 

3,500

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

3,500

Noninterest income

 

 

3,398

 

 

15,104

 

 

4,486

 

 

22,269

 

 

(1)

 

 

45,256

Noninterest expense

 

 

10,876

 

 

8,347

 

 

2,110

 

 

9,769

 

 

9,112

 

 

40,214

Net income before taxes

 

$

11,016

 

$

6,757

 

$

2,376

 

$

13,113

 

$

(9,955)

 

$

23,307

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Nine months ended September 30, 2020

 

 

 

 

 

Retirement and

 

Wealth

 

 

 

 

Corporate

 

 

 

(dollars in thousands)

    

Banking

    

Benefit Services

    

Management

    

Mortgage

    

Administration

    

Consolidated

Net interest income

 

$

61,857

 

$

 —

 

$

 —

 

$

1,411

 

$

(2,575)

 

$

60,693

Provision for loan losses

 

 

9,500

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

9,500

Noninterest income

 

 

8,129

 

 

45,034

 

 

12,644

 

 

44,860

 

 

 8

 

 

110,675

Noninterest expense

 

 

34,887

 

 

25,472

 

 

6,254

 

 

23,228

 

 

26,833

 

 

116,674

Net income before taxes

 

$

25,599

 

$

19,562

 

$

6,390

 

$

23,043

 

$

(29,400)

 

$

45,194

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Banking

The Banking division offers a complete line of loan, deposit, cash management, and treasury services through fifteen offices 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; and payroll and HIRS services for employers. In addition, the division operates within each of the banking markets as well as in Albert Lea, Minnesota, Lansing, Michigan, Bedford, New Hampshire, and 13 satellite offices.

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.