Segment Information
The Company’s reportable segment is determined by the Chief Executive Officer, who is the designated chief operating decision maker, based upon information provided about the Company’s products and services offered, primarily banking operations. The segment is also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business, such as branches, which are then aggregated if operating performance, product and services, and customers are similar. The chief operating decision maker will evaluate the financial performance of the Company’s business components by evaluating revenue streams, significant expenses, and budget to actual results in assessing the Company’s segment and in the determination of resource allocations. The chief operating decision maker uses revenue streams to evaluate product pricing and uses significant expenses to assess performance and evaluate return on assets. The chief operating decision maker uses consolidated net income to benchmark the Company against its competitors. The benchmarking analysis coupled with monitoring of budget to actual results are used in assessment performance and in establishing compensation. Loans, investments, and deposits provide the revenues in the banking operation. Interest expense, provisions for credit losses, and payroll provide the significant expenses in the banking operation. All operations are domestic.
Accounting policies for segments are the same as those described in “Note 1 - Organization and Summary of Significant Accounting and Reporting Policies.” Segment performance is evaluated using consolidated net income. Information reported internally for performance assessment by the chief operating decision maker follows, inclusive of reconciliations of significant segment totals to the financial statements. Detailed information related to the Company’s banking segment is as follows:
| | | | | | | | | | | | | | | | |
| | Banking Segment | | |
| (In thousands) | | 2024 | | 2023 | | |
| Interest income | | $ | 60,751 | | | $ | 60,377 | | | |
| Noninterest income | | 4,713 | | | 5,569 | | | |
| Total revenue | | 65,464 | | | 65,946 | | | |
| | | | | | |
| Less: | | | | | | |
| Interest expense | | 13,901 | | | 11,056 | | | |
| | | | | | |
| Less: | | | | | | |
| Provision for credit losses | | 2,963 | | | 1,460 | | | |
| Salaries and employee benefits | | 13,884 | | | 13,157 | | | |
Provision for income taxes | | 5,537 | | | 7,680 | | | |
| Occupancy Expense | | 3,686 | | | 3,739 | | | |
| Depreciation | | 1,469 | | | 1,459 | | | |
| Amortization | | 1,063 | | | 1,145 | | | |
| Other expenses (1) | | 8,178 | | | 6,454 | | | |
| Banking segment net income | | $ | 14,783 | | | $ | 19,796 | | | |
| | | | | | |
| Reconciliation of assets: | | | | | | |
| Banking segment assets | | $ | 1,211,718 | | | $ | 1,211,045 | | | |
| | | | | | |
| Total consolidated assets | | $ | 1,211,718 | | | $ | 1,211,045 | | | |
(1) Other segment items include professional fees, regulatory assessments, director fees and data processing fees.
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.