Note 5 – Industry Segment Information

The services provided by the Company are classified into two reportable segments: Information Services and Banking Services. Each of these segments provides distinct services that are marketed through different channels. They are managed separately due to their unique service and processing requirements.

The Information Services segment provides transportation, energy, telecommunication, and environmental invoice processing and payment services to large corporations. The Banking Services segment provides banking services primarily to privately held businesses and faith-based ministries as well as supporting the banking needs of the Information Services segment.

The Company’s accounting policies for segments are the same as those described in the summary of significant accounting policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Management evaluates segment performance based on tax-equivalized (as defined in the footnote to the chart on the following table) pre-tax income after allocations for corporate expenses. Transactions between segments are accounted for at what management believes to be fair value.

Substantially all revenue originates from, and all long-lived assets are located within the United States, and no revenue from any customer of any segment exceeds 10% of the Company’s consolidated revenue.

Funding sources represent average balances and deposits generated by Information Services and Banking Services and there is no allocation methodology used. Segment interest income is a function of the relative share of average funding sources generated by each segment multiplied by the following rates:

●	Information Services – one or more fixed rates depending upon the specific characteristics of the funding source, and
●	Banking Services – a variable rate that is based upon the overall performance of the Company’s earning assets.

Any difference between total segment interest income and overall total Company interest income is included in Corporate, Eliminations, and Other.

Summarized information about the Company’s operations in each industry segment is as follows:

					Corporate,
	Information		Banking		Eliminations
*(In thousands)*	Services		Services		and Other		Total
Three Months Ended September 30, 2018
Fee income from customers	$	26,263	$	253	$	(81)	$	26,435
Interest income*		5,703		5,856		1,219		12,778
Interest expense		—		1,029		—		1,029
Intersegment income (expense)		—		467		(467)		—
Tax-equivalized pre-tax income*		6,525		2,538		591		9,654
Goodwill		12,433		136		—		12,569
Other intangible assets, net		1,664		—		—		1,664
Total Assets		903,055		847,673		(72,481)		1,678,247
Funding Sources		650,267		550,594		—		1,200,861
Three Months Ended September 30, 2017
Fee income from customers	$	23,809	$	279	$	119	$	24,207
Interest income*		5,465		5,894		725		12,084
Interest expense		—		571		—		571
Intersegment income (expense)		—		339		(339)		—
Tax-equivalized pre-tax income*		7,130		3,179		369		10,678
Goodwill		12,433		136		—		12,569
Other intangible assets, net		2,106		—		—		2,106
Total Assets		820,596		738,478		(2,324)		1,556,750
Funding Sources		631,539		601,355		—		1,232,894
Nine Months Ended September 30, 2018
Fee income from customers	$	76,397	$	947	$	105	$	77,449
Interest income*		16,553		17,342		2,996		36,891
Interest expense		—		2,502		—		2,502
Intersegment income (expense)		—		1,415		(1,415)		—
Tax-equivalized pre-tax income*		19,326		8,814		1,523		29,663
Goodwill		12,433		136		—		12,569
Other intangible assets, net		1,664		—		—		1,664
Total Assets		903,055		847,673		(72,481)		1,678,247
Funding Sources		637,508		566,390		—		1,203,898
Nine Months Ended September 30, 2017
Fee income from customers	$	69,453	$	958	$	367	$	70,778
Interest income*		15,237		17,602		2,447		35,286
Interest expense		—		1,521		—		1,521
Intersegment income (expense)		—		962		(962)		—
Tax-equivalized pre-tax income*		18,946		9,922		1,414		30,282
Goodwill		12,433		136		—		12,569
Other intangible assets, net		2,106		—		—		2,106
Total Assets		820,596		738,478		(2,324)		1,556,750
Funding Sources		596,919		593,709		—		1,190,628

* Presented on a tax-equivalent basis assuming a tax rate of 21% for 2018 and 35% for 2017. The tax-equivalent adjustment was approximately $564,000 and $1,419,000 for the Three Months Ended 2018 and 2017, respectively, and $1,875,000 and $4,290,000 for the Nine Months Ended 2018 and 2017, respectively.