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Note 13 - Business Segments | 9 Months Ended
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Sep. 30, 2025
Notes to Financial Statements |
Segment Reporting Disclosure [Text Block] | NOTE 13 – BUSINESS SEGMENTS The Company’s reportable segments are determined by the Chief Financial Officer (“CFO”), who is the designated chief operating decision maker, or CODM, based upon information provided about the Company's products and services offered, primarily distinguished between commercial and consumer banking and home lending. They are also distinguished by the level of information provided to the CFO, who uses such information to review performance of various components of business for each branch and home lending office, which are aggregated if operating performance, products/services, and customers are similar. The CFO evaluates the financial performance of the Company's business components such as by evaluating revenue streams, significant expenses, and budget to actual results in assessing the performance of the Company's segments and in the determination of allocating resources. The CFO uses revenue streams to evaluate product pricing and significant expenses to assess performance of each segment to evaluate compensation of certain employees. Segment pretax profit or loss is used to assess the performance of the banking segment by monitoring the margin between interest revenue and interest expense. Segment pretax profit or loss is used to assess the performance of the home lending segment by monitoring the premium received on loans sales. Loans, investments, and deposits provide the revenues in the commercial and consumer banking operations, and servicing fees and loan sales provide the revenues in home lending. Interest expense, provisions for credit losses, and payroll provide the significant expenses in commercial and consumer banking, and cost of loan sales and payroll provide the significant expenses in home lending. All operations are domestic and the Company has no major customers providing greater than 10% of total segment revenue. The Company does not have any material intra-entity sales or transfers, aside from certain allocations of interest expense and loan servicing cost from the commercial and consumer banking segment to the home lending segment. The Company uses various management accounting methodologies to assign certain income statement items to the responsible operating segment, including:
● | a funds transfer pricing (“FTP”) system, which allocates interest income credits and funding charges between the segments, assigning to each segment a funding credit for its liabilities, such as deposits, and a charge to fund its assets;
● | a cost per loan serviced allocation based on the number of loans being serviced on the balance sheet and the number of loans serviced for third parties;
● | an allocation based upon the approximate square footage utilized by the home lending segment in Company owned locations;
● | an allocation of charges for services rendered to the segments by centralized functions, such as corporate overhead, which are generally based on the number of full-time employees (“FTEs”) in each segment; and
● | an allocation of the Company’s consolidated income taxes which are based on the effective tax rate applied to the segment’s pretax income or loss.
Segment assets are primarily allocated by a loan origination channel. The home lending segment is limited to residential mortgage and home equity loans originated through the home lending platform. The home lending segment additionally includes related accrued interest receivable and the Company's MSR assets. The commercial and consumer banking segment includes the remainder of the loan portfolio, the assets of the retail branch network and administrative buildings, as well as the investment portfolio and other assets of the Bank. A description of the Company’s business segments and the products and services that they provide is as follows: Commercial and Consumer Banking Segment The commercial and consumer banking segment provides diversified financial products and services to our commercial and consumer customers through Bank branches, online banking platforms, mobile banking apps, and telephone banking. These products and services include deposit products; residential, consumer, business and commercial real estate lending portfolios and cash management services. The Company originates consumer loans, commercial and multi-family real estate loans, construction loans for residential and multi-family construction, and commercial business loans. At September 30, 2025, the Company’s retail deposit branch network consisted of 27 branches in the Pacific Northwest. This segment is also responsible for the management of the investment portfolio and other assets of the Bank. Home Lending Segment The home lending segment originates one-to-four-family residential mortgage loans primarily for sale in the secondary markets as well as loans held for investment. A majority of these mortgage loans are sold to or securitized by FNMA, FHLMC, GNMA, or the FHLB of Des Moines, while the Company generally retains the right to service these loans. Loans originated under the guidelines of the Federal Housing Administration (“FHA”), US Department of Veterans Affairs (“VA”), and United States Department of Agriculture (“USDA”) are generally sold servicing released to a correspondent bank or mortgage company. The Company has the option to sell loans on a servicing-released or servicing-retained basis to securitizers and correspondent lenders. A small percentage of its loans are brokered to other lenders. On occasion, the Company may sell a portion of its MSRs portfolio and may sell small pools of loans initially originated to be held in the loan portfolio. The Company manages the loan funding and the interest rate risk associated with the secondary market loan sales and the retained one-to-four-family MSRs within this business segment. One-to-four-family loans originated for investment and held in this segment are allocated to the home lending segment with a corresponding provision expense and FTP for cost of funds. Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For the three and nine months ended September 30, 2025 and 2024, the Home Lending segment included allocated overhead expenses of $1.8 million and $5.5 million, compared to $1.8 million and $4.8 million, respectively. Segment Financial Results Accounting policies for segments are consistent with those described in “Note 1 – Basis of Presentation and Summary of Significant Accounting Policies.” Segment performance is evaluated using net income. Indirect expenses are allocated based on segment assets and full-time equivalent employees (“FTEs”). Transactions among segments are made at fair value. Information reported internally for performance assessment by the CFO follows, inclusive of reconciliations of significant segment totals to the financial statements at or for the three and nine months ended September 30, 2025 and 2024:
|  | At or For the Three Months Ended September 30, 2025 |
Income: |  | Commercial and Consumer Banking |  |  | Home Lending |  |  | Total |
Interest income - loans receivable, including fees |  | $ | 37,419 |  |  | $ | 9,245 |  |  | $ | 46,664 |
Interest income - other interest earnings assets |  |  | 4,309 |  |  |  | — |  |  |  | 4,309 |
Total interest income by segment |  |  | 41,728 |  |  |  | 9,245 |  |  |  | 50,973 |
Gain on sale of loans |  |  | 63 |  |  |  | 2,376 |  |  |  | 2,439 |
Other income |  |  | 2,338 |  |  |  | 817 |  |  |  | 3,155 |
Intersegment income |  |  | (323 | ) |  |  | 323 |  |  |  | — |
Total noninterest income by segment |  |  | 2,078 |  |  |  | 3,516 |  |  |  | 5,594 |
Total income by segment |  |  | 43,806 |  |  |  | 12,761 |  |  |  | 56,567 |
Expense: |  |  |  |  |  |  |  |  |  |  |  |
Interest expense - deposits |  |  | 14,857 |  |  |  | 6 |  |  |  | 14,863 |
Interest expense - borrowings |  |  | 1,935 |  |  |  | — |  |  |  | 1,935 |
Interest expense - subordinated note |  |  | 384 |  |  |  | 101 |  |  |  | 485 |
Interest expense - intersegment |  |  | (6,259 | ) |  |  | 6,259 |  |  |  | — |
Total interest expense by segment |  |  | 10,917 |  |  |  | 6,366 |  |  |  | 17,283 |
Provision for credit losses by segment |  |  | 2,150 |  |  |  | 159 |  |  |  | 2,309 |
Salaries and benefits |  |  | 8,032 |  |  |  | 1,803 |  |  |  | 9,835 |
Overhead allocation |  |  | 5,761 |  |  |  | 1,810 |  |  |  | 7,571 |
Other segment items (1) |  |  | 6,342 |  |  |  | 1,640 |  |  |  | 7,982 |
Total noninterest expense by segment |  |  | 20,135 |  |  |  | 5,253 |  |  |  | 25,388 |
Income before provision for income taxes by segment |  |  | 10,604 |  |  |  | 983 |  |  |  | 11,587 |
Provision for income taxes by segment |  |  | (2,203 | ) |  |  | (207 | ) |  |  | (2,410 | )
Net income by segment |  | $ | 8,401 |  |  | $ | 776 |  |  | $ | 9,177 |
Other segment disclosures: |  |  |  |  |  |  |  |  |  |  |  |
Segment assets |  | $ | 2,546,789 |  |  | $ | 662,036 |  |  | $ | 3,208,825 |
FTEs |  |  | 460 |  |  |  | 115 |  |  |  | 575 |
|  | At or For the Three Months Ended September 30, 2024 |
Income: |  | Commercial and Consumer Banking |  |  | Home Lending |  |  | Total |
Interest income - loans receivable, including fees |  | $ | 35,591 |  |  | $ | 8,209 |  |  | $ | 43,800 |
Interest income - other interest earnings assets |  |  | 3,243 |  |  |  | — |  |  |  | 3,243 |
Total interest income by segment |  |  | 38,834 |  |  |  | 8,209 |  |  |  | 47,043 |
Gain on sale of loans |  |  | — |  |  |  | 2,523 |  |  |  | 2,523 |
Gain on sale of MSRs |  |  | (372 | ) |  |  | 513 |  |  |  | 141 |
Gain on sale of investment securities |  |  | 11 |  |  |  | — |  |  |  | 11 |
Other income |  |  | 2,433 |  |  |  | 859 |  |  |  | 3,292 |
Intersegment income |  |  | 185 |  |  |  | (185 | ) |  |  | — |
Total noninterest income by segment |  |  | 2,257 |  |  |  | 3,710 |  |  |  | 5,967 |
Total income by segment |  |  | 41,091 |  |  |  | 11,919 |  |  |  | 53,010 |
Expense: |  |  |  |  |  |  |  |  |  |  |  |
Interest expense - deposits |  |  | 13,485 |  |  |  | 1 |  |  |  | 13,486 |
Interest expense - borrowings |  |  | 1,828 |  |  |  | — |  |  |  | 1,828 |
Interest expense - subordinated note |  |  | 384 |  |  |  | 101 |  |  |  | 485 |
Interest expense - intersegment |  |  | (5,475 | ) |  |  | 5,475 |  |  |  | — |
Total interest expense by segment |  |  | 10,222 |  |  |  | 5,577 |  |  |  | 15,799 |
Provision for credit losses by segment |  |  | 1,331 |  |  |  | 182 |  |  |  | 1,513 |
Salaries and benefits |  |  | 7,464 |  |  |  | 2,094 |  |  |  | 9,558 |
Overhead allocation |  |  | 6,040 |  |  |  | 1,762 |  |  |  | 7,802 |
Other segment items (1) |  |  | 6,695 |  |  |  | 1,777 |  |  |  | 8,472 |
Total noninterest expense by segment |  |  | 20,199 |  |  |  | 5,633 |  |  |  | 25,832 |
Income before provision for income taxes by segment |  |  | 9,339 |  |  |  | 527 |  |  |  | 9,866 |
(Provision) benefit for income taxes by segment |  |  | (71 | ) |  |  | 491 |  |  |  | 420 |
Net income by segment |  | $ | 9,268 |  |  | $ | 1,018 |  |  | $ | 10,286 |
Other segment disclosures: |  |  |  |  |  |  |  |  |  |  |  |
Segment assets |  | $ | 2,358,004 |  |  | $ | 614,665 |  |  | $ | 2,972,669 |
FTEs |  |  | 442 |  |  |  | 117 |  |  |  | 559 |
|  | At or For the Nine Months Ended September 30, 2025 |
Income: |  | Commercial and Consumer Banking |  |  | Home Lending |  |  | Total |
Interest income - loans receivable, including fees |  | $ | 108,430 |  |  | $ | 26,574 |  |  | $ | 135,004 |
Interest income - other interest earnings assets |  |  | 11,459 |  |  |  | — |  |  |  | 11,459 |
Total interest income by segment |  |  | 119,889 |  |  |  | 26,574 |  |  |  | 146,463 |
Gain on sale of loans |  |  | 63 |  |  |  | 6,048 |  |  |  | 6,111 |
Other income |  |  | 7,533 |  |  |  | 2,246 |  |  |  | 9,779 |
Intersegment income |  |  | (975 | ) |  |  | 975 |  |  |  | — |
Total noninterest income by segment |  |  | 6,621 |  |  |  | 9,269 |  |  |  | 15,890 |
Total income by segment |  |  | 126,510 |  |  |  | 35,843 |  |  |  | 162,353 |
Expense: |  |  |  |  |  |  |  |  |  |  |  |
Interest expense - deposits |  |  | 42,430 |  |  |  | 10 |  |  |  | 42,440 |
Interest expense - borrowings |  |  | 5,783 |  |  |  | — |  |  |  | 5,783 |
Interest expense - subordinated note |  |  | 1,155 |  |  |  | 301 |  |  |  | 1,456 |
Interest expense - intersegment |  |  | (17,876 | ) |  |  | 17,876 |  |  |  | — |
Total interest expense by segment |  |  | 31,492 |  |  |  | 18,187 |  |  |  | 49,679 |
Provision for credit losses by segment |  |  | 5,320 |  |  |  | 602 |  |  |  | 5,922 |
Salaries and benefits |  |  | 23,571 |  |  |  | 6,061 |  |  |  | 29,632 |
Overhead allocation |  |  | 17,323 |  |  |  | 5,463 |  |  |  | 22,786 |
Other segment items (1) |  |  | 19,731 |  |  |  | 3,796 |  |  |  | 23,527 |
Total noninterest expense by segment |  |  | 60,625 |  |  |  | 15,320 |  |  |  | 75,945 |
Income before provision for income taxes by segment |  |  | 29,073 |  |  |  | 1,734 |  |  |  | 30,807 |
Provision for income taxes by segment |  |  | (5,517 | ) |  |  | (364 | ) |  |  | (5,881 | )
Net income by segment |  | $ | 23,556 |  |  | $ | 1,370 |  |  | $ | 24,926 |
Other segment disclosures: |  |  |  |  |  |  |  |  |  |  |  |
Segment assets |  | $ | 2,546,789 |  |  | $ | 662,036 |  |  | $ | 3,208,825 |
FTEs |  |  | 460 |  |  |  | 115 |  |  |  | 575 |
|  | At or For the Nine Months Ended September 30, 2024 |
Income: |  | Commercial and Consumer Banking |  |  | Home Lending |  |  | Total |
Interest income - loans receivable, including fees |  | $ | 104,438 |  |  | $ | 22,765 |  |  | $ | 127,203 |
Interest income - other interest earnings assets |  |  | 10,660 |  |  |  | — |  |  |  | 10,660 |
Total interest income by segment |  |  | 115,098 |  |  |  | 22,765 |  |  |  | 137,863 |
Gain on sale of loans |  |  | — |  |  |  | 6,824 |  |  |  | 6,824 |
Gain on sale of MSRs |  |  | 6,987 |  |  |  | 1,369 |  |  |  | 8,356 |
Loss on sale of investment securities |  |  | (7,836 | ) |  |  | — |  |  |  | (7,836 | )
Other income |  |  | 7,056 |  |  |  | 2,546 |  |  |  | 9,602 |
Intersegment income |  |  | 712 |  |  |  | (712 | ) |  |  | — |
Total noninterest income by segment |  |  | 6,919 |  |  |  | 10,027 |  |  |  | 16,946 |
Total income by segment |  |  | 122,017 |  |  |  | 32,792 |  |  |  | 154,809 |
Expense: |  |  |  |  |  |  |  |  |  |  |  |
Interest expense - deposits |  |  | 39,615 |  |  |  | 5 |  |  |  | 39,620 |
Interest expense - borrowings |  |  | 4,796 |  |  |  | — |  |  |  | 4,796 |
Interest expense - subordinated note |  |  | 1,167 |  |  |  | 289 |  |  |  | 1,456 |
Interest expense - intersegment |  |  | (15,229 | ) |  |  | 15,229 |  |  |  | — |
Total interest expense by segment |  |  | 30,349 |  |  |  | 15,523 |  |  |  | 45,872 |
Provision for credit losses by segment |  |  | 3,796 |  |  |  | 193 |  |  |  | 3,989 |
Salaries and benefits |  |  | 22,557 |  |  |  | 6,182 |  |  |  | 28,739 |
Overhead allocation |  |  | 16,278 |  |  |  | 4,797 |  |  |  | 21,075 |
Other segment items (1) |  |  | 19,415 |  |  |  | 3,989 |  |  |  | 23,404 |
Total noninterest expense by segment |  |  | 58,250 |  |  |  | 14,968 |  |  |  | 73,218 |
Income before provision for income taxes by segment |  |  | 29,622 |  |  |  | 2,108 |  |  |  | 31,730 |
(Provision) benefit for income taxes by segment |  |  | (4,253 | ) |  |  | 165 |  |  |  | (4,088 | )
Net income by segment |  | $ | 25,369 |  |  | $ | 2,273 |  |  | $ | 27,642 |
Other segment disclosures: |  |  |  |  |  |  |  |  |  |  |  |
Segment assets |  | $ | 2,358,004 |  |  | $ | 614,665 |  |  | $ | 2,972,669 |
FTEs |  |  | 442 |  |  |  | 117 |  |  |  | 559 |
(1) | Other segment items include operations, occupancy, data processing, loan costs, professional and board fees, marketing and advertising, and (recovery) impairment of MSRs.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-21 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name 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