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Business Segments
 9 Months Ended
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