Segment Reporting

9 Months Ended

Sep. 30, 2023

Segment Reporting

Segment Reporting

NOTE 15 Segment Reporting

Operating segments are components of an enterprise, which are evaluated regularly by the “chief operating decision maker” in deciding how to allocate resources and assess performance. The Company’s chief operating decision maker is the President and Chief Executive Officer of the Company. Reportable segments are determined 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 September 30, 2023
			Retirement and		Wealth				Corporate
(dollars in thousands)	Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income (loss)	$	20,818	$	—	$	—	$	255	$	(678)	$	20,395
Provision for credit losses		—		—		—		—		—		—
Noninterest income (loss)		2,150		18,605		5,271		2,510		(129)		28,407
Intercompany revenue (expense)		(9,371)		4,264		4,624		483		—		—
Noninterest expense		10,728		9,354		2,722		3,245		11,211		37,260
Net income (loss) before taxes	$	2,869	$	13,515	$	7,173	$	3	$	(12,018)	$	11,542

	Nine months ended September 30, 2023
			Retirement and		Wealth				Corporate
(dollars in thousands)	Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income (loss)	$	67,650	$	—	$	—	$	635	$	(1,998)	$	66,287
Provision for credit losses		550		—		—		—		—		550
Noninterest income		6,308		49,977		15,915		7,132		107		79,439
Intercompany revenue (expense)		(15,351)		6,936		4,200		994		3,221		—
Noninterest expense		36,231		24,954		6,335		9,912		34,071		111,503
Net income (loss) before taxes	$	21,826	$	31,959	$	13,780	$	(1,151)	$	(32,741)	$	33,673

	Three months ended September 30, 2022
			Retirement and		Wealth				Corporate
(dollars in thousands)	Banking		Benefit Services		Management		Mortgage		Administration		Consolidated
Net interest income (loss)	$	28,512	$	—	$	—	$	393	$	(589)	$	28,316
Provision for credit losses		—		—		—		—		—		—
Noninterest income		1,723		16,597		4,852		3,782		56		27,010
Intercompany revenue (expense)		(4,562)		1,868		(170)		1,386		1,478		—
Noninterest expense		15,428		7,998		1,406		5,869		12,066		42,767
Net income (loss) 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 (loss)	$	72,816	$	—	$	—	$	1,660	$	(1,711)	$	72,765
Provision for credit losses		—		—		—		—		—		—
Noninterest income		4,602		50,536		15,726		14,751		91		85,706
Intercompany revenue (expense)		(8,664)		2,695		(1,028)		3,214		3,783		—
Noninterest expense		39,639		23,855		4,034		17,926		35,368		120,822
Net income (loss) before taxes	$	29,115	$	29,376	$	10,664	$	1,699	$	(33,205)	$	37,649

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 services to other types of retirement plans; investment fiduciary services to retirement plans; health savings accounts, flex spending accounts, and COBRA recordkeeping and administration services. 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.