| Business Segments |
NOTE 16. Business Segments The Company has three reportable operating segments: community banking, marine lending and wealth management. The community banking segment offers a wide range of retail and community banking services in the form of loan and deposit products. Revenues consist primarily of net interest income related to investments in non-marine loans and securities and outstanding deposits and borrowings, fees earned on deposit accounts and debit card interchange activity. For the three and six months ended June 30, 2026, the community banking segment's income was impacted by a gain on sale of other assets and a reduction in interest expense. During the second quarter of 2026, the Company sold its membership interest in Bearing Insurance Group, LLC ("Bearing") to an unaffiliated third party and recognized a pre-tax gain of $3.5 million. Additionally, there was no interest expense attributable to FHLB borrowings during the current quarter, reflecting advance maturity in March, 2026. During the first quarter of 2025, the Company sold available for sale securities with an amortized cost of $99.2 million, which resulted in a net realized pre-tax loss of $12.4 million. This loss on the sale of securities is the main driver of the community banking segment's reported net loss, total noninterest loss and income tax benefit for the six months ended June 30, 2025. Revenue from marine lending operations consist primarily of net interest income related to commercial and consumer marine vessel loans originated through August 2023, at which time the Company ceased accepting new marine lending business. The interest expense allocation is a function of the Bank's internal cost of funds rate and the average loan balance of marine lending. The balance of the marine loan portfolio, which constitutes a significant portion of the Company's assets, revenues, and earnings, totaled $159.2 million and $175.6 million at June 30, 2026 and December 31, 2025, respectively. This balance will continue to decline as the loans are repaid. The wealth management segment offers both a trust department and investment services. Trust department services include a full range of personal and retirement plan services, and investment services products include, among other products, annuities, IRA's, life insurance, fixed income investing, and full service or discount brokerage services. Non-deposit investment products are offered through a third-party service provider. Financial information of the parent company 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 Company's segment structure reflects the financial information and reports used by our chief operating decision maker to make decisions regarding the business, including resource allocations and performance. Our Chief Executive Officer is the chief operating decision maker ("CODM"). We evaluate performance and allocate resources based on the operating income of each operating segment. The CODM uses segment operating income in the annual budget process. The operating income of each operating segment includes the revenues of the segment less expenses that are directly related to those revenues. Operating overhead, shared costs and share-based compensation costs are included in Community Banking. As such, expenses may not be representative of the costs expected to be incurred if the specific business segments operated as stand-alone entities. The Company expects it will continue to evaluate its business segments and internal reporting structure, including the production of discrete financial information to the CODM. The following tables provide income and asset information as of June 30, 2026 and December 31, 2025 and for three and six months ended June 30, 2026 and 2025, which are included within the Consolidated Balance Sheets and Consolidated Statements of Operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, 2026 |
|
|
|
Community Banking |
|
|
|
Marine Lending |
|
|
Wealth Management |
|
|
All Other |
|
|
Eliminations |
|
|
Consolidated |
|
|
|
(in thousands) |
|
Interest Income |
|
$ |
22,254 |
|
|
|
$ |
2,121 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
24,375 |
|
Interest Expense |
|
|
6,314 |
|
|
|
|
736 |
|
|
|
— |
|
|
|
355 |
|
|
|
— |
|
|
|
7,405 |
|
Net Interest Income (Expense) |
|
|
15,940 |
|
|
|
|
1,385 |
|
|
|
— |
|
|
|
(355 |
) |
|
|
— |
|
|
|
16,970 |
|
Gain on sales of loans |
|
|
646 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
646 |
|
Other noninterest income |
|
|
5,704 |
|
|
|
|
— |
|
|
|
2,240 |
|
|
|
— |
|
|
|
— |
|
|
|
7,944 |
|
Net Revenue (Expense) |
|
|
22,290 |
|
|
|
|
1,385 |
|
|
|
2,240 |
|
|
|
(355 |
) |
|
|
— |
|
|
|
25,560 |
|
Provision for credit losses |
|
|
2,975 |
|
|
|
|
528 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,503 |
|
Salaries and employee benefits |
|
|
8,545 |
|
|
|
|
— |
|
|
|
630 |
|
|
|
37 |
|
|
|
— |
|
|
|
9,212 |
|
Occupancy expenses |
|
|
583 |
|
|
|
|
— |
|
|
|
30 |
|
|
|
— |
|
|
|
— |
|
|
|
613 |
|
Professional fees |
|
|
451 |
|
|
|
|
3 |
|
|
|
— |
|
|
|
97 |
|
|
|
— |
|
|
|
551 |
|
Data processing fees |
|
|
591 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
591 |
|
Other noninterest expense |
|
|
4,202 |
|
|
|
|
88 |
|
|
|
248 |
|
|
|
26 |
|
|
|
— |
|
|
|
4,564 |
|
Total Noninterest Expenses |
|
|
14,372 |
|
|
|
|
91 |
|
|
|
908 |
|
|
|
160 |
|
|
|
— |
|
|
|
15,531 |
|
Income (loss) before taxes |
|
|
4,943 |
|
|
|
|
766 |
|
|
|
1,332 |
|
|
|
(515 |
) |
|
|
— |
|
|
|
6,526 |
|
Income tax expense (benefit) |
|
|
1,213 |
|
|
|
|
161 |
|
|
|
279 |
|
|
|
(108 |
) |
|
|
— |
|
|
|
1,545 |
|
Net Income (Loss) |
|
$ |
3,730 |
|
|
|
$ |
605 |
|
|
$ |
1,053 |
|
|
$ |
(407 |
) |
|
$ |
— |
|
|
$ |
4,981 |
|
Other data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
$ |
282 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
282 |
|
Depreciation and amortization |
|
|
358 |
|
|
|
|
— |
|
|
|
34 |
|
|
|
17 |
|
|
|
— |
|
|
|
409 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, 2025 |
|
|
|
Community Banking |
|
|
|
Marine Lending |
|
|
Wealth Management |
|
|
All Other |
|
|
Eliminations |
|
|
Consolidated |
|
|
|
(in thousands) |
|
Interest Income |
|
$ |
22,158 |
|
|
|
$ |
2,657 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
24,815 |
|
Interest Expense |
|
|
7,724 |
|
|
|
|
1,038 |
|
|
|
— |
|
|
|
355 |
|
|
|
— |
|
|
|
9,117 |
|
Net Interest Income (Expense) |
|
|
14,434 |
|
|
|
|
1,619 |
|
|
|
— |
|
|
|
(355 |
) |
|
|
— |
|
|
|
15,698 |
|
Gain on sales of loans |
|
|
1,104 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,104 |
|
Other noninterest income |
|
|
2,120 |
|
|
|
|
— |
|
|
|
1,693 |
|
|
|
— |
|
|
|
— |
|
|
|
3,813 |
|
Net Revenue (Expense) |
|
|
17,658 |
|
|
— |
|
|
1,619 |
|
|
|
1,693 |
|
|
|
(355 |
) |
|
|
— |
|
|
|
20,615 |
|
Provision for (recovery of) credit losses |
|
|
794 |
|
|
|
|
(126 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
668 |
|
Salaries and employee benefits |
|
|
7,276 |
|
|
|
|
— |
|
|
|
543 |
|
|
|
26 |
|
|
|
— |
|
|
|
7,845 |
|
Occupancy expenses |
|
|
577 |
|
|
|
|
— |
|
|
|
21 |
|
|
|
— |
|
|
|
— |
|
|
|
598 |
|
Professional fees |
|
|
521 |
|
|
|
|
10 |
|
|
|
— |
|
|
|
110 |
|
|
|
— |
|
|
|
641 |
|
Data processing fees |
|
|
618 |
|
|
|
|
— |
|
|
|
15 |
|
|
|
— |
|
|
|
— |
|
|
|
633 |
|
Other noninterest expense |
|
|
3,347 |
|
|
|
|
116 |
|
|
|
197 |
|
|
|
22 |
|
|
|
— |
|
|
|
3,682 |
|
Total Noninterest Expenses |
|
|
12,339 |
|
|
|
|
126 |
|
|
|
776 |
|
|
|
158 |
|
|
|
— |
|
|
|
13,399 |
|
Income (loss) before taxes |
|
|
4,525 |
|
|
|
|
1,619 |
|
|
|
917 |
|
|
|
(513 |
) |
|
|
— |
|
|
|
6,548 |
|
Income tax expense (benefit) |
|
|
855 |
|
|
|
|
339 |
|
|
|
192 |
|
|
|
(108 |
) |
|
|
— |
|
|
|
1,278 |
|
Net Income (Loss) |
|
$ |
3,670 |
|
|
|
$ |
1,280 |
|
|
$ |
725 |
|
|
$ |
(405 |
) |
|
$ |
— |
|
|
$ |
5,270 |
|
Other data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
$ |
262 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
262 |
|
Depreciation and amortization |
|
|
447 |
|
|
|
|
— |
|
|
|
25 |
|
|
|
17 |
|
|
|
— |
|
|
$ |
489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
June 30, 2026 |
|
|
|
Community Banking |
|
|
Marine Lending |
|
|
Wealth Management |
|
|
All Other |
|
|
Eliminations |
|
|
Consolidated |
|
|
|
(in thousands) |
|
Interest Income |
|
$ |
43,848 |
|
|
$ |
4,353 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
48,201 |
|
Interest Expense |
|
|
13,069 |
|
|
|
1,550 |
|
|
|
— |
|
|
|
709 |
|
|
|
— |
|
|
|
15,328 |
|
Net Interest Income (Expense) |
|
|
30,779 |
|
|
|
2,803 |
|
|
|
— |
|
|
|
(709 |
) |
|
|
— |
|
|
|
32,873 |
|
Gain on sales of loans |
|
|
1,658 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,658 |
|
Other noninterest income |
|
|
7,795 |
|
|
|
— |
|
|
|
4,065 |
|
|
|
— |
|
|
|
— |
|
|
|
11,860 |
|
Net Revenue (Expense) |
|
|
40,232 |
|
|
|
2,803 |
|
|
|
4,065 |
|
|
|
(709 |
) |
|
|
— |
|
|
|
46,391 |
|
Provision for credit losses |
|
|
4,917 |
|
|
|
547 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,464 |
|
Salaries and employee benefits |
|
|
16,322 |
|
|
|
— |
|
|
|
1,044 |
|
|
|
75 |
|
|
|
— |
|
|
|
17,441 |
|
Occupancy expenses |
|
|
1,226 |
|
|
|
— |
|
|
|
53 |
|
|
|
— |
|
|
|
— |
|
|
|
1,279 |
|
Professional fees |
|
|
973 |
|
|
|
5 |
|
|
|
1 |
|
|
|
176 |
|
|
|
— |
|
|
|
1,155 |
|
Data processing fees |
|
|
1,077 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,077 |
|
Other noninterest expense |
|
|
8,101 |
|
|
|
179 |
|
|
|
485 |
|
|
|
26 |
|
|
|
— |
|
|
|
8,791 |
|
Total Noninterest Expenses |
|
|
27,699 |
|
|
|
184 |
|
|
|
1,583 |
|
|
|
277 |
|
|
|
— |
|
|
|
29,743 |
|
Income (loss) before taxes |
|
|
7,616 |
|
|
|
2,072 |
|
|
|
2,482 |
|
|
|
(986 |
) |
|
|
— |
|
|
|
11,184 |
|
Income tax expense (benefit) |
|
|
1,738 |
|
|
|
435 |
|
|
|
521 |
|
|
|
(231 |
) |
|
|
— |
|
|
|
2,463 |
|
Net Income (Loss) |
|
$ |
5,878 |
|
|
$ |
1,637 |
|
|
$ |
1,961 |
|
|
$ |
(755 |
) |
|
$ |
— |
|
|
$ |
8,721 |
|
Other data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
$ |
482 |
|
|
$ |
— |
|
|
$ |
9 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
491 |
|
Depreciation and amortization |
|
|
779 |
|
|
|
— |
|
|
|
68 |
|
|
|
34 |
|
|
|
— |
|
|
|
881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
June 30, 2025 |
|
|
|
Community Banking |
|
|
Marine Lending |
|
|
Wealth Management |
|
|
All Other |
|
|
Eliminations |
|
|
Consolidated |
|
|
|
(in thousands) |
|
Interest Income |
|
$ |
42,954 |
|
|
$ |
5,363 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
48,317 |
|
Interest Expense |
|
|
16,340 |
|
|
|
2,234 |
|
|
|
— |
|
|
|
709 |
|
|
|
— |
|
|
|
19,283 |
|
Net Interest Income (Expense) |
|
|
26,614 |
|
|
|
3,129 |
|
|
|
— |
|
|
|
(709 |
) |
|
|
— |
|
|
|
29,034 |
|
Gain on sales of loans |
|
|
1,533 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,533 |
|
(Loss) on the sale of securities |
|
|
(12,425 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12,425 |
) |
Other noninterest income |
|
|
3,838 |
|
|
|
— |
|
|
|
3,417 |
|
|
|
— |
|
|
|
— |
|
|
|
7,255 |
|
Net Revenue (Expense) |
|
|
19,560 |
|
|
|
3,129 |
|
|
|
3,417 |
|
|
|
(709 |
) |
|
|
— |
|
|
|
25,397 |
|
Provision for (recovery of) credit losses |
|
|
2,171 |
|
|
|
(270 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,901 |
|
Salaries and employee benefits |
|
|
13,971 |
|
|
|
— |
|
|
|
1,001 |
|
|
|
52 |
|
|
|
— |
|
|
|
15,024 |
|
Occupancy expenses |
|
|
1,219 |
|
|
|
— |
|
|
|
41 |
|
|
|
— |
|
|
|
— |
|
|
|
1,260 |
|
Professional fees |
|
|
1,020 |
|
|
|
10 |
|
|
|
— |
|
|
|
174 |
|
|
|
— |
|
|
|
1,204 |
|
Data processing fees |
|
|
1,148 |
|
|
|
— |
|
|
|
35 |
|
|
|
— |
|
|
|
— |
|
|
|
1,183 |
|
Other noninterest expense |
|
|
6,693 |
|
|
|
220 |
|
|
|
382 |
|
|
|
22 |
|
|
|
— |
|
|
|
7,317 |
|
Total Noninterest Expenses |
|
|
24,051 |
|
|
|
230 |
|
|
|
1,459 |
|
|
|
248 |
|
|
|
— |
|
|
|
25,988 |
|
(Loss) income before taxes |
|
|
(6,662 |
) |
|
|
3,169 |
|
|
|
1,958 |
|
|
|
(957 |
) |
|
|
— |
|
|
|
(2,492 |
) |
Income tax (benefit) expense |
|
|
(1,651 |
) |
|
|
665 |
|
|
|
411 |
|
|
|
(213 |
) |
|
|
— |
|
|
|
(788 |
) |
Net (Loss) Income |
|
$ |
(5,011 |
) |
|
$ |
2,504 |
|
|
$ |
1,547 |
|
|
$ |
(744 |
) |
|
$ |
— |
|
|
$ |
(1,704 |
) |
Other data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
$ |
799 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
799 |
|
Depreciation and amortization |
|
|
841 |
|
|
|
— |
|
|
|
57 |
|
|
|
34 |
|
|
|
— |
|
|
|
932 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Community Banking |
|
|
Marine Lending |
|
|
Wealth Management |
|
|
All Other |
|
|
Eliminations |
|
|
Consolidated |
|
Total assets at June 30, 2026 |
|
$ |
1,678,024 |
|
|
$ |
167,060 |
|
|
$ |
790 |
|
|
$ |
1,491 |
|
|
$ |
— |
|
|
$ |
1,847,365 |
|
Total assets at December 31, 2025 |
|
|
1,705,394 |
|
|
|
181,062 |
|
|
|
849 |
|
|
|
1,321 |
|
|
|
— |
|
|
|
1,888,626 |
|
|