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Business Segments | 9 Months Ended
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Sep. 30, 2023
Segment Reporting [Abstract] |
Business Segments | NOTE 16. Business Segments The Company has two reportable operating segments: community banking and marine lending. Revenue from community banking operations consist primarily of net interest income related to investments in loan and securities and outstanding deposits and borrowings, fees earned on deposit accounts and debit card interchange activity. Revenue from marine lending operations consist primarily of net interest income related to commercial and consumer marine loans and gains on sales of loans. On August 23, 2023, the Company completed a sale of specific assets from its marine lending segment. As part of the sale, the Company sold its interest in marine vessel floor plan loans totaling $52.8 million, its rights to service loans that had been sold to secondary market investors prior to the date of sale (valued at $595.4 thousand on balance sheet prior to sale), and other assets that were not individually significant. The Company received total consideration, net of selling expenses, of $53.5 million and recognized a gain of $463 thousand. The assets sold as well as their related revenues and contribution to earnings did not constitute a significant portion of the Company's assets or operating results for the year-to-date period ending September 30, 2023. Subsequent to the sale of these assets, the Company retained ownership of its marine vessel retail loans which continue to constitute a significant portion of the Company's assets, revenues, and earnings. The Company expects to cease accepting new marine lending business and hold the retained outstanding loans until they are ultimately repaid. Financial information of the parent company and the Bank of Clarke Wealth Management Division is included in the "All Other" category. The parent company's revenue and expenses are comprised primarily of interest expense associated with subordinated debt. The wealth management division's net revenues are comprised primarily of income from offering wealth management services and insurance products through third-party service providers. The following table provides income and asset information as of September 30, 2023 and December 31, 2022 and for the three and nine months ended September 30, 2023 and September 30, 2022, which are included within the Consolidated Balance Sheets and Consolidated Statements of Income. The results by business segment are based on management’s accounting process, which assigns income statement items and assets to each operating segment. Given the Company's reportable segments are contained within the Bank, management must make certain allocations of expenses, which may not be representative of the costs expected to be incurred if the specific business segments operated as stand-alone entities. Subsequent to the third quarter of 2023 and going forward, the Company expects it will continue to evaluate its business segments and internal reporting structure, including the production of discrete financial information to the chief operating decision-maker.
|  | Three Months Ended |
|  | September 30, 2023 |
|  | Community Banking |  |  | Marine Lending |  |  | All Other |  |  | Eliminations |  |  | Consolidated |
|  | (in thousands) |
Interest Income |  | $ | 17,779 |  |  | $ | 4,412 |  |  | $ | — |  |  | $ | — |  |  | $ | 22,191 |
Interest Expense |  |  | 7,563 |  |  |  | 1,358 |  |  |  | 354 |  |  |  | — |  |  |  | 9,275 |
Net Interest Income (Expense) |  |  | 10,216 |  |  |  | 3,054 |  |  |  | (354 | ) |  |  | — |  |  |  | 12,916 |
Gain on sales of loans |  |  | 253 |  |  |  | 12 |  |  |  | — |  |  |  | — |  |  |  | 265 |
Other noninterest income |  |  | 1,741 |  |  |  | 1,013 |  |  |  | 1,190 |  |  |  | — |  |  |  | 3,944 |
Net Revenue |  |  | 12,210 |  |  |  | 4,079 |  |  |  | 836 |  |  |  | — |  |  |  | 17,125 |
Provision for credit losses |  |  | 453 |  |  |  | (237 | ) |  |  | — |  |  |  | — |  |  |  | 216 |
Noninterest expense |  |  | 11,131 |  |  |  | 2,285 |  |  |  | 717 |  |  |  | — |  |  |  | 14,133 |
Income before taxes |  |  | 626 |  |  |  | 2,031 |  |  |  | 119 |  |  |  | — |  |  |  | 2,776 |
Income tax expense |  |  | 2 |  |  |  | 427 |  |  |  | 28 |  |  |  | — |  |  |  | 457 |
Net Income |  | $ | 624 |  |  | $ | 1,604 |  |  | $ | 91 |  |  | $ | — |  |  | $ | 2,319 |
Other data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | 1,120 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,120 |
Depreciation and amortization |  |  | 715 |  |  |  | 32 |  |  |  | 48 |  |  |  | — |  |  |  | 795 |
|  | Three Months Ended |
|  | September 30, 2022 |
|  | Community Banking |  |  | Marine Lending |  |  | All Other |  |  | Eliminations |  |  | Consolidated |
|  | (in thousands) |
Interest Income |  | $ | 12,449 |  |  | $ | 1,917 |  |  | $ | — |  |  | $ | — |  |  | $ | 14,366 |
Interest Expense |  |  | 1,042 |  |  |  | 88 |  |  |  | 337 |  |  |  | — |  |  |  | 1,467 |
Net Interest Income (Expense) |  |  | 11,407 |  |  |  | 1,829 |  |  |  | (337 | ) |  |  | — |  |  |  | 12,899 |
Gain on sales of loans |  |  | 216 |  |  |  | 352 |  |  |  | — |  |  |  | — |  |  |  | 568 |
Other noninterest income |  |  | 1,476 |  |  |  | 25 |  |  |  | 1,095 |  |  |  | — |  |  |  | 2,596 |
Net Revenue |  |  | 13,099 |  |  |  | 2,206 |  |  |  | 758 |  |  |  | — |  |  |  | 16,063 |
Provision for credit losses |  |  | (202 | ) |  |  | 202 |  |  |  | — |  |  |  | — |  |  |  | — |
Noninterest expense |  |  | 9,243 |  |  |  | 1,155 |  |  |  | 660 |  |  |  | — |  |  |  | 11,058 |
Income before taxes |  |  | 4,058 |  |  |  | 849 |  |  |  | 98 |  |  |  | — |  |  |  | 5,005 |
Income tax expense |  |  | 724 |  |  |  | 178 |  |  |  | 21 |  |  |  | — |  |  |  | 923 |
Net Income |  | $ | 3,334 |  |  | $ | 671 |  |  | $ | 77 |  |  | $ | — |  |  | $ | 4,082 |
Other data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | — |  |  | $ | 162 |  |  | $ | — |  |  | $ | — |  |  | $ | 162 |
Depreciation and amortization |  |  | 699 |  |  |  | 64 |  |  |  | 49 |  |  |  | — |  |  |  | 812 |
|  | Nine Months Ended |
|  | September 30, 2023 |
|  | Community Banking |  |  | Marine Lending |  |  | All Other |  |  | Eliminations |  |  | Consolidated |
|  | (in thousands) |
Interest Income |  | $ | 49,479 |  |  | $ | 11,634 |  |  | $ | — |  |  | $ | — |  |  | $ | 61,113 |
Interest Expense |  |  | 18,015 |  |  |  | 4,033 |  |  |  | 1,063 |  |  |  | — |  |  |  | 23,111 |
Net Interest Income (Expense) |  |  | 31,464 |  |  |  | 7,601 |  |  |  | (1,063 | ) |  |  | — |  |  |  | 38,002 |
Gain on sales of loans |  |  | 589 |  |  |  | 324 |  |  |  | — |  |  |  | — |  |  |  | 913 |
Other noninterest income |  |  | 5,462 |  |  |  | 1,106 |  |  |  | 3,611 |  |  |  | — |  |  |  | 10,179 |
Net Revenue |  |  | 37,515 |  |  |  | 9,031 |  |  |  | 2,548 |  |  |  | — |  |  |  | 49,094 |
Provision for credit losses |  |  | 1,405 |  |  |  | (122 | ) |  |  | — |  |  |  | — |  |  |  | 1,283 |
Noninterest expense |  |  | 32,247 |  |  |  | 4,925 |  |  |  | 2,302 |  |  |  | — |  |  |  | 39,474 |
Income before taxes |  |  | 3,863 |  |  |  | 4,228 |  |  |  | 246 |  |  |  | — |  |  |  | 8,337 |
Income tax expense |  |  | 435 |  |  |  | 888 |  |  |  | 52 |  |  |  | — |  |  |  | 1,375 |
Net Income |  | $ | 3,428 |  |  | $ | 3,340 |  |  | $ | 194 |  |  | $ | — |  |  | $ | 6,962 |
Other data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | 1,091 |  |  | $ | 36 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,127 |
Depreciation and amortization |  |  | 989 |  |  |  | 224 |  |  |  | 145 |  |  |  | — |  |  |  | 1,358 |
|  | Nine Months Ended |
|  | September 30, 2022 |
|  | Community Banking |  |  | Marine Lending |  |  | All Other |  |  | Eliminations |  |  | Consolidated |
|  | (in thousands) |
Interest Income |  | $ | 33,906 |  |  | $ | 4,616 |  |  | $ | — |  |  | $ | — |  |  | $ | 38,522 |
Interest Expense |  |  | 1,713 |  |  |  | 177 |  |  |  | 675 |  |  |  | — |  |  |  | 2,565 |
Net Interest Income (Expense) |  |  | 32,193 |  |  |  | 4,439 |  |  |  | (675 | ) |  |  | — |  |  |  | 35,957 |
Gain on sales of loans |  |  | 468 |  |  |  | 1,076 |  |  |  | — |  |  |  | — |  |  |  | 1,544 |
Other noninterest income |  |  | 5,575 |  |  |  | 60 |  |  |  | 3,077 |  |  |  | — |  |  |  | 8,712 |
Net Revenue |  |  | 38,236 |  |  |  | 5,575 |  |  |  | 2,402 |  |  |  | — |  |  |  | 46,213 |
Provision for credit losses |  |  | 388 |  |  |  | 512 |  |  |  | — |  |  |  | — |  |  |  | 900 |
Noninterest expense |  |  | 26,800 |  |  |  | 2,442 |  |  |  | 2,267 |  |  |  | — |  |  |  | 31,509 |
Income before taxes |  |  | 11,048 |  |  |  | 2,621 |  |  |  | 135 |  |  |  | — |  |  |  | 13,804 |
Income tax expense |  |  | 1,902 |  |  |  | 550 |  |  |  | 28 |  |  |  | — |  |  |  | 2,480 |
Net Income |  | $ | 9,146 |  |  | $ | 2,071 |  |  | $ | 107 |  |  | $ | — |  |  | $ | 11,324 |
Other data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | 307 |  |  | $ | 170 |  |  | $ | 16 |  |  | $ | — |  |  | $ | 493 |
Depreciation and amortization |  |  | 974 |  |  |  | 157 |  |  |  | 128 |  |  |  | — |  |  |  | 1,259 |
|  | Community Banking |  |  | Marine Lending |  |  | All Other |  |  | Eliminations |  |  | Consolidated |
Total assets at September 30, 2023 |  | $ | 1,530,922 |  |  | $ | 268,704 |  |  | $ | 1,844 |  |  | $ | — |  |  | $ | 1,801,470 |
Total assets at December 31, 2022 |  | $ | 1,377,461 |  |  | $ | 237,595 |  |  | $ | 1,661 |  |  | $ | — |  |  | $ | 1,616,717 |

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