Business Segment Reporting

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Business Segment Reporting

8.  Business Segment Reporting

The Company has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking, and Personal Banking (collectively, the Business Segments, and each, a Business Segment).  The Company’s senior executive officers regularly evaluate the 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.  Prior to 2020, the Company had the following four Business Segments: Commercial Banking, Institutional Banking, Personal Banking, and Healthcare Services.  In the first quarter of 2020, the Company merged the Healthcare Services segment into the Institutional Banking segment to better reflect how the core businesses, products and services are currently being evaluated by management.  The Company’s Healthcare Services leadership structure and financial performance assessments are now included in the Institutional Banking segment, and accordingly, the reportable segments were realigned to reflect these changes.  For comparability purposes, amounts in all periods are based on methodologies in effect at June 30, 2020.  Previously reported results have been reclassified in this Form 10-Q to conform to the Company’s current organizational structure. 

The following summaries provide information about the activities of each Business Segment:

Commercial Banking serves the commercial banking and treasury management needs of the small to middle-market businesses through a variety of products and services. Such services include commercial loans, commercial real estate financing, commercial credit cards, letters of credit, loan syndication services, and consultative services. In addition, our specialty lending group offers a variety of business solutions including asset-based lending, accounts receivable financing, mezzanine debt and minority equity investments.  Treasury management services include depository services, account reconciliation and cash management tools such as, accounts payable and receivable solutions, electronic funds transfer and automated payments, controlled disbursements, lockbox services and remote deposit capture services.

Institutional Banking is a combination of banking services, fund services, asset management services and healthcare services provided to institutional clients.  This segment also provides fixed income sales, trading and underwriting, corporate trust and escrow services, as well as institutional custody.  Institutional Banking includes UMB Fund Services, which provides fund administration and accounting, investor services and transfer agency, marketing and distribution, custody, and alternative investment 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.

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

Business Segment Information

Business Segment financial results for the three and six months ended June 30, 2020 and June 30, 2019 were as follows (in thousands):

	Three Months Ended June 30, 2020
	Commercial Banking		Institutional Banking		Personal Banking			Total
Net interest income	$	113,085	$	28,129	$	37,015		$	178,229
Provision for credit losses		19,281		298		1,921			21,500
Noninterest income		24,078		66,488		29,890			120,456
Noninterest expense		62,123		76,953		69,457			208,533
Income (loss) before taxes		55,759		17,366		(4,473	)		68,652
Income tax expense (benefit)		6,597		2,055		(529	)		8,123
Net income (loss)	$	49,162	$	15,311	$	(3,944	)	$	60,529
Average assets	$	12,390,000	$	9,671,000	$	6,075,000		$	28,136,000

	Three Months Ended June 30, 2019
	Commercial Banking		Institutional Banking		Personal Banking		Total
Net interest income	$	102,579	$	30,501	$	33,334	$	166,414
Provision for credit losses		9,306		181		1,513		11,000
Noninterest income		20,387		55,626		29,385		105,398
Noninterest expense		68,511		64,852		60,024		193,387
Income before taxes		45,149		21,094		1,182		67,425
Income tax expense		7,008		3,274		184		10,466
Net income	$	38,141	$	17,820	$	998	$	56,959
Average assets	$	10,668,000	$	7,249,000	$	5,353,000	$	23,270,000

	Six Months Ended June 30, 2020
	Commercial Banking		Institutional Banking		Personal Banking			Total
Net interest income	$	220,034	$	61,164	$	70,972		$	352,170
Provision for credit losses		101,501		573		7,426			109,500
Noninterest income		35,318		128,440		55,122			218,880
Noninterest expense		121,166		145,406		130,580			397,152
Income (loss) before taxes		32,685		43,625		(11,912	)		64,398
Income tax expense (benefit)		3,709		4,951		(1,352	)		7,308
Net income (loss)	$	28,976	$	38,674	$	(10,560	)	$	57,090
Average assets	$	12,000,000	$	9,340,000	$	5,748,000		$	27,088,000

	Six Months Ended June 30, 2019
	Commercial Banking		Institutional Banking		Personal Banking		Total
Net interest income	$	202,393	$	62,252	$	65,637	$	330,282
Provision for credit losses		19,635		467		3,248		23,350
Noninterest income		43,568		111,476		57,736		212,780
Noninterest expense		135,331		130,249		118,433		384,013
Income before taxes		90,995		43,012		1,692		135,699
Income tax expense		14,079		6,655		262		20,996
Net income	$	76,916	$	36,357	$	1,430	$	114,703
Average assets	$	10,558,000	$	7,132,000	$	5,373,000	$	23,063,000