8. Business Segment Reporting

The Company has strategically aligned its operations into the following four reportable segments: Commercial Banking, Institutional Banking, Personal Banking, and Healthcare Services (collectively, the Business Segments). Senior executive officers regularly evaluate Business Segment financial results produced by the Company’s internal reporting system in deciding how to allocate resources and assess performance for individual Business Segments. Previously, the Company had the following three Business Segments: Bank, Institutional Investment Management, and Asset Servicing. During 2017, the Company sold all of the outstanding stock of Scout, its institutional investment management subsidiary. As the operations of Scout are included in discontinued operations, the Company no longer presents such operations as one of its business segments. The Company’s reportable Business Segments include certain corporate overhead, technology and service costs that are allocated based on methodologies that are applied consistently between periods. For comparability purposes, amounts in all periods are based on methodologies in effect at September 30, 2018. Previously reported results have been reclassified in this filing to conform to the current organizational structure.

The following summaries provide information about the activities of each segment:

Commercial Banking serves the commercial lending and leasing, capital markets, and treasury management needs of the Company’s mid-market businesses and governmental entities by offering various products and services. Such services include commercial loans, commercial credit cards, letters of credit, loan syndication services, consultative services, and a variety of financial options for companies that need non-traditional banking services. Capital markets services include asset-based financing, asset securitization, equity and mezzanine financing, factoring, private and public placement of senior debt, as well as merger and acquisition consulting. Treasury management services include depository services, account reconciliation services, electronic fund transfer services, controlled disbursements, lockbox services, and remote deposit capture services.

Institutional Banking is a combination of banking services, fund services, and asset management services provided to institutional clients. This segment also provides mutual fund cash management, international payments, corporate trust and escrow services, as well as correspondent banking and investment banking. Products and services include bond trading transactions, cash letter collections, investment portfolio accounting and safekeeping, reporting for asset/liability management, and Federal funds transactions. Institutional Banking also includes UMB Fund Services, which provides fund administration and accounting, investor services and transfer agency, marketing and distribution, custody, and alternative investment services.

Personal Banking combines consumer services and asset management provided to personal clients. This segment combines the Company’s consumer bank with the individual investment and wealth management solutions. The range of services offered to UMB clients extends from a basic checking account to estate planning and trust services. Products and services include the Company’s bank branches, call center, internet banking and ATM network, deposit accounts, retail credit cards, private banking, installment loans, home equity lines of credit, residential mortgages, small business loans, brokerage services, and insurance services in addition to a full spectrum of investment advisory, trust, and custody services.

Healthcare Services provides healthcare payment solutions including custodial services for health savings accounts (HSAs) and private label, multipurpose debit cards to insurance carriers, third-party administrators, software companies, employers, and financial institutions.

Business Segment Information

Business Segment financial results for the three and nine months ended September 30, 2018 and September 30, 2017 were as follows (in thousands):

	Three Months Ended September 30, 2018
	Commercial Banking		Institutional Banking		Personal Banking		Healthcare Services		Total
Net interest income	$	94,633	$	15,293	$	31,145	$	9,419	$	150,490
Provision for loan losses		4,062		355		1,333		—		5,750
Noninterest income		20,831		43,169		28,266		8,619		100,885
Noninterest expense		64,083		47,081		56,648		12,573		180,385
Income before taxes		47,319		11,026		1,430		5,465		65,240
Income tax expense		5,381		1,241		160		609		7,391
Income from continuing operations	$	41,938	$	9,785	$	1,270	$	4,856	$	57,849
Average assets	$	9,838,000	$	3,920,000	$	4,791,000	$	2,201,000	$	20,750,000

	Three Months Ended September 30, 2017
	Commercial Banking		Institutional Banking		Personal Banking		Healthcare Services		Total
Net interest income	$	89,386	$	12,763	$	30,675	$	8,034	$	140,858
Provision for loan losses		9,565		313		1,622		—		11,500
Noninterest income		21,094		46,405		28,261		8,546		104,306
Noninterest expense		60,620		44,727		56,127		10,347		171,821
Income before taxes		40,295		14,128		1,187		6,233		61,843
Income tax expense		8,454		2,965		244		1,308		12,971
Income from continuing operations	$	31,841	$	11,163	$	943	$	4,925	$	48,872
Average assets	$	9,710,000	$	3,582,000	$	5,072,000	$	1,949,000	$	20,313,000

	Nine Months Ended September 30, 2018
	Commercial Banking		Institutional Banking		Personal Banking		Healthcare Services		Total
Net interest income	$	279,521	$	47,351	$	93,220	$	28,546	$	448,638
Provision for loan losses		17,179		1,027		4,544		—		22,750
Noninterest income		60,606		131,999		87,700		26,394		306,699
Noninterest expense		189,096		141,499		165,945		36,939		533,479
Income before taxes		133,852		36,824		10,431		18,001		199,108
Income tax expense		19,032		5,227		1,484		2,559		28,302
Income from continuing operations	$	114,820	$	31,597	$	8,947	$	15,442	$	170,806
Average assets	$	9,788,000	$	3,895,000	$	4,853,000	$	2,168,000	$	20,704,000

	Nine Months Ended September 30, 2017
	Commercial Banking		Institutional Banking		Personal Banking		Healthcare Services		Total
Net interest income	$	261,497	$	36,731	$	91,484	$	22,855	$	412,567
Provision for loan losses		28,500		1,101		5,399		—		35,000
Noninterest income		62,014		140,232		87,932		27,351		317,529
Noninterest expense		185,825		136,086		168,760		31,899		522,570
Income before taxes		109,186		39,776		5,257		18,307		172,526
Income tax expense		23,297		8,437		1,273		3,900		36,907
Income from continuing operations	$	85,889	$	31,339	$	3,984	$	14,407	$	135,619
Average assets	$	9,723,000	$	3,457,000	$	5,233,000	$	1,875,000	$	20,288,000