BUSINESS SEGMENTS

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

BUSINESS SEGMENTS

NOTE 20—BUSINESS SEGMENTS

The Company utilizes an internal reporting system to measure the performance of various operating segments within the Bank and the Company. The Company has identified three operating segments for purposes of management reporting: (1) Retail Banking; (2) Commercial Banking; and (3) Other. These three business divisions meet the criteria of an operating segment: the segment engages in business activities from which it earns revenues and incurs expenses, its operating results are regularly reviewed by the Company’s chief operating decision-maker to render decisions about resources to be allocated to the segment and assess its performance and discrete financial information is available.

The Retail Banking segment focuses primarily on retail operations through the Bank’s branch network. The Commercial Banking segment, which includes CRE, primarily generates commercial loans through the commercial lending offices located in the Bank’s production offices. Furthermore, the Company’s Commercial Banking segment offers a wide variety of international finance and trade services and products. The remaining centralized functions, including treasury activities and eliminations of inter-segment amounts, have been aggregated and included in the “Other” segment, which provides broad administrative support to the two core segments.

The Company’s funds transfer pricing assumptions are intended to promote core deposit growth and to reflect the current risk profiles of various loan categories within the credit portfolio. Transfer pricing assumptions and methodologies are reviewed at least annually to ensure that the Company’s process is reflective of current market conditions. The transfer pricing process is formulated with the goal of incenting loan and deposit growth that is consistent with the Company’s overall growth objectives, as well as to provide a reasonable and consistent basis for the measurement of the Company’s business segments and product net interest margins.

The accounting policies of the segments are the same as those described in Note 1 — Summary of Significant Accounting Policiesto the Consolidated Financial Statements. Operating segment results are based on the Company’s internal management reporting process, which reflects assignments and allocations of certain operating and administrative costs and the provision for credit losses. Net interest income is based on the Company’s internal funds transfer pricing system which assigns a cost of funds or a credit for funds to assets or liabilities based on their type, maturity or repricing characteristics. Noninterest income and noninterest expense, including depreciation and amortization, directly attributable to a segment are assigned to that business segment. Indirect costs, including overhead expense, are allocated to the segments based on several factors, including, but not limited to, full-time equivalent employees, loan volume and deposit volume. The provision for credit losses is allocated based on actual charge-offs for the period as well as average loan balances for each segment during the period. The Company evaluates overall performance based on profit or loss from operations before income taxes excluding nonrecurring gains and losses.

Changes in the Company’s management structure or reporting methodologies may result in changes in the measurement of operating segment results. Results for prior periods are generally restated for comparability for changes in management structure or reporting methodologies unless it is not deemed practicable to do so.

The following tables present the operating results and other key financial measures for the individual operating segments as of and for the years ended December 31, 2015, 2014, and 2013:

($ in thousands)	Year Ended December 31, 2015
	Retail Banking			Commercial Banking			Other			Total
Interest income	$	331,755		$	654,966		$	67,094		$	1,053,815
Charge for funds used	(86,769		)	(163,601		)	(66,773		)	(317,143		)
Interest spread on funds used	244,986			491,365			321			736,672
Interest expense	(53,088		)	(18,025		)	(32,263		)	(103,376		)
Credit on funds provided	261,117			36,251			19,775			317,143
Interest spread on funds provided	208,029			18,226			(12,488		)	213,767
Net interest income (loss)	$	453,015		$	509,591		$	(12,167	)	$	950,439
(Reversal of) provision for credit losses	$	(5,835	)	$	20,052		$	—		$	14,217
Depreciation, amortization and accretion (1)	$	10,051		$	(28,096	)	$	64,247		$	46,202
Segment pre-tax profit (loss)	$	212,036		$	382,233		$	(15,548	)	$	578,721
Segment assets	$	7,095,737		$	17,923,319		$	7,331,866		$	32,350,922

($ in thousands)	Year Ended December 31, 2014
	Retail Banking			Commercial Banking			Other			Total
Interest income	$	378,445		$	715,075		$	60,178		$	1,153,698
Charge for funds used	(94,162		)	(141,652		)	(47,570		)	(283,384		)
Interest spread on funds used	284,283			573,423			12,608			870,314
Interest expense	(48,020		)	(15,650		)	(49,150		)	(112,820		)
Credit on funds provided	225,873			38,592			18,919			283,384
Interest spread on funds provided	177,853			22,942			(30,231		)	170,564
Net interest income (loss)	$	462,136		$	596,365		$	(17,623	)	$	1,040,878
Provision for credit losses	$	14,979		$	34,179		$	—		$	49,158
Depreciation, amortization and accretion (1)(2)	$	14,376		$	(8,372	)	$	76,549		$	82,553
Segment pre-tax profit (loss) (2)	$	181,286		$	293,425		$	(27,688	)	$	447,023
Segment assets (2)	$	7,621,808		$	15,595,862		$	5,525,922		$	28,743,592

($ in thousands)	Year Ended December 31, 2013
	Retail Banking			Commercial Banking			Other			Total
Interest income	$	374,818		$	627,118		$	66,749		$	1,068,685
Charge for funds used	(86,552		)	(116,161		)	(18,244		)	(220,957		)
Interest spread on funds used	288,266			510,957			48,505			847,728
Interest expense	(47,287		)	(15,185		)	(50,020		)	(112,492		)
Credit on funds provided	173,194			29,262			18,501			220,957
Interest spread on funds provided	125,907			14,077			(31,519		)	108,465
Net interest income	$	414,173		$	525,034		$	16,986		$	956,193
Provision for credit losses	$	10,911		$	11,453		$	—		$	22,364
Depreciation, amortization and accretion (1)(2)	$	19,865		$	8,120		$	47,829		$	75,814
Segment pre-tax profit (2)	$	132,961		$	283,885		$	30,300		$	447,146
Segment assets (2)	$	7,820,191		$	11,545,405		$	5,366,620		$	24,732,216

(1) Includes amortization and accretion related to the FDIC indemnification asset/net payable to the FDIC.

(2) Prior periods were restated to reflect the retrospective application of adopting the new accounting guidance related to the Company’s investments in qualified affordable housing projects ASU 2014-01. Please see Note 9—Investments in Qualified Affordable Housing Partnerships, Tax Credit and Other Investments, Netto the Consolidated Financial Statements for additional information.