Segment Reporting

9 Months Ended

Sep. 30, 2022

Segment Reporting

Segment Reporting

NOTE 16 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, 2022
			Retirement and		Wealth				Corporate
(dollars in thousands)	Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income	$	28,512	$	—	$	—	$	393	$	(589)	$	28,316
Provision for loan losses		—		—		—		—		—		—
Noninterest income		1,723		16,597		4,852		3,782		56		27,010
Noninterest expense		19,990		6,130		1,576		4,483		10,588		42,767
Net income before taxes	$	10,245	$	10,467	$	3,276	$	(308)	$	(11,121)	$	12,559

	Nine months ended September 30, 2022
			Retirement and		Wealth				Corporate
(dollars in thousands)	Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income	$	72,816	$	—	$	—	$	1,660	$	(1,711)	$	72,765
Provision for loan losses		—		—		—		—		—		—
Noninterest income		4,602		50,536		15,726		14,751		91		85,706
Noninterest expense		48,303		21,160		5,062		14,712		31,585		120,822
Net income before taxes	$	29,115	$	29,376	$	10,664	$	1,699	$	(33,205)	$	37,649

	Three months ended September 30, 2021
			Retirement and		Wealth				Corporate
(dollars in thousands)	Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income	$	21,168	$	—	$	—	$	499	$	(535)	$	21,132
Provision for loan losses		(2,000)		—		—		—		—		(2,000)
Noninterest income		1,576		18,031		5,295		11,116		22		36,040
Noninterest expense		11,403		10,320		2,219		8,464		9,635		42,041
Net income before taxes	$	13,341	$	7,711	$	3,076	$	3,151	$	(10,148)	$	17,131

	Nine months ended September 30, 2021
			Retirement and		Wealth				Corporate
(dollars in thousands)	Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income	$	64,236	$	—	$	—	$	1,435	$	(1,361)	$	64,310
Provision for loan losses		(2,000)		—		—		—		—		(2,000)
Noninterest income		4,564		53,157		15,419		40,535		(6)		113,669
Noninterest expense		33,401		30,420		6,682		29,978		27,152		127,633
Net income before taxes	$	37,399	$	22,737	$	8,737	$	11,992	$	(28,519)	$	52,346

Banking

The Banking division offers a complete line of loan, deposit, cash management, and treasury services through fourteen 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, and COBRA recordkeeping and administration services. In addition, the division operates within each of the banking markets, as well as in Lansing, Michigan and Littleton, Colorado.

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.