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Industry Segment Information
 9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Industry Segment Information

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, including on-line generosity services, 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, 2019. 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:

-10-

•

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:

(In thousands)

Information

Services

Banking

Services

Corporate,

Eliminations

and Other

Total

Three Months Ended September 30, 2020

Fee income

$

24,198

$

651

$

83

$

24,932

Interest income*

 

6,306

 

7,212

 

(1,773)

 

11,745

Interest expense

 

─

 

465

 

─

 

465

Intersegment income (expense)

 

─

 

593

 

(593)

 

─

Tax-equivalized pre-tax income*

 

5,718

 

3,506

 

(1,692)

 

7,532

Goodwill

 

12,433

 

1,829

 

─

 

14,262

Other intangible assets, net

 

837

 

2,800

 

─

 

3,637

Total assets

 

905,158

 

1,105,845

 

(10,540)

 

2,000,463

Average funding sources

 

751,010

 

780,217

 

─

 

1,531,227

Three Months Ended September 30, 2019

 

 

 

 

Fee income

$

28,026

$

257

$

(21)

$

28,262

Interest income*

 

6,760

 

7,930

 

(513)

 

14,177

Interest expense

 

—

 

1,392

 

—

 

1,392

Intersegment income (expense)

 

—

 

533

 

(533)

 

—

Tax-equivalized pre-tax income*

 

7,619

 

3,399

 

(534)

 

10,484

Goodwill

 

15,758

 

136

 

—

 

15,894

Other intangible assets, net

 

3,170

 

—

 

—

 

3,170

Total assets

 

908,946

 

862,142

 

9,922

 

1,781,010

Average funding sources

 

704,772

 

588,226

 

—

 

1,292,998

Nine Months Ended September 30, 2020:

 

 

 

 

Fee income

$

72,098

$

1,906

$

1,197

$

75,201

Interest income*

 

18,153

 

21,097

 

(2,567)

 

36,683

Interest expense

 

─

 

1,911

 

─

 

1,911

Intersegment income (expense)

 

─

 

1,674

 

(1,674)

 

─

Tax-equivalized pre-tax income*

 

16,462

 

9,190

 

(1,370)

 

24,282

Goodwill

 

12,433

 

1,829

 

─

 

14,262

Other intangible assets, net

 

837

 

2,800

 

─

 

3,637

Total assets

 

905,158

 

1,105,845

 

(10,540)

 

2,000,463

Average funding sources

 

703,142

 

712,903

 

─

 

1,416,045

Nine Months Ended September 30, 2019

 

 

 

 

Fee income

$

82,049

$

1,040

$

(442)

$

82,647

Interest income*

 

19,273

 

23,082

 

(883)

 

41,472

Interest expense

 

—

 

3,987

 

—

 

3,987

Intersegment income (expense)

 

—

 

1,587

 

(1,587)

 

—

Tax-equivalized pre-tax income*

 

21,997

 

10,214

 

(1,324)

 

30,887

Goodwill

 

15,758

 

136

 

—

 

15,894

Other intangible assets, net

 

3,170

 

—

 

—

 

3,170

Total assets

 

908,946

 

862,142

 

9,922

 

1,781,010

Average funding sources

 

667,741

 

583,458

 

—

 

1,251,199

* Presented on a tax-equivalent basis assuming a tax rate of 21% for both 2020 and 2019. The tax-equivalent adjustment was approximately $466,000 and $511,000 for the Three Months Ended 2020 and 2019, respectively, and $1,424,000 and $1,583,000 for the Nine Months Ended 2020 and 2019, respectively.