Segment Reporting

6 Months Ended

Jun. 30, 2023

Segment Reporting

Segment Reporting

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 for each segment includes net interest income, provision for credit 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 June 30, 2023
			Retirement and		Wealth				Corporate
(dollars in thousands)	Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income (loss)	$	22,681	$	—	$	—	$	218	$	(665)	$	22,234
Provision for credit losses		—		—		—		—		—		—
Noninterest income		1,336		15,890		5,449		2,905		198		25,778
Intercompany revenue (expense)		(2,933)		1,331		(257)		286		1,573		—
Noninterest expense		11,548		8,290		2,100		3,882		10,553		36,373
Net income (loss) before taxes	$	9,536	$	8,931	$	3,092	$	(473)	$	(9,447)	$	11,639

	Six months ended June 30, 2023
			Retirement and		Wealth				Corporate
(dollars in thousands)	Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income (loss)	$	46,832	$	—	$	—	$	380	$	(1,320)	$	45,892
Provision for credit losses		550		—		—		—		—		550
Noninterest income		4,158		31,372		10,644		4,622		235		51,031
Intercompany revenue (expense)		(5,980)		2,672		(425)		512		3,221		—
Noninterest expense		25,503		15,600		3,613		6,667		22,859		74,242
Net income (loss) before taxes	$	18,957	$	18,444	$	6,606	$	(1,153)	$	(20,723)	$	22,131

	Three months ended June 30, 2022
			Retirement and		Wealth				Corporate
(dollars in thousands)	Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income (loss)	$	22,779	$	—	$	—	$	558	$	(561)	$	22,776
Provision for credit losses		—		—		—		—		—		—
Noninterest income		1,341		16,293		5,548		6,038		6		29,226
Intercompany revenue (expense)		(3,829)		1,095		(337)		1,334		1,737
Noninterest expense		11,790		7,693		1,293		6,543		12,665		39,984
Net income (loss) before taxes	$	8,501	$	9,695	$	3,918	$	1,387	$	(11,483)	$	12,018

	Six months ended June 30, 2022
			Retirement and		Wealth				Corporate
(dollars in thousands)	Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income (loss)	$	44,304	$	—	$	—	$	1,267	$	(1,122)	$	44,449
Provision for credit losses		—		—		—		—		—		—
Noninterest income		2,879		33,939		10,874		10,969		35		58,696
Intercompany revenue (expense)		(4,988)		692		(851)		1,828		3,319		—
Noninterest expense		23,325		15,722		2,617		12,057		24,334		78,055
Net income (loss) before taxes	$	18,870	$	18,909	$	7,406	$	2,007	$	(22,102)	$	25,090

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; 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.