Segment Information

The Company’s operating segments are based on the Company’s organizational structure. Each segment reflects the manner in which financial information is evaluated by management. The operating segment results include certain overhead allocations and intercompany transactions. All intercompany transactions have been eliminated to determine the consolidated balances. The Company operates primarily in the United States, and, accordingly, revenue and assets outside the United States are not material. There are no individual customers whose attributable revenues exceed 10% of consolidated revenue.

The following tables present the segment information for the Company’s existing segments.



	Three Months Ended March 31, 2020
	Commercial Banking and Wealth		Retail Banking		Corporate and Investment Banking			Treasury			Corporate Support and Other			Consolidated
	(In Thousands)
Net interest income (expense)	$	266,837	$	295,009	$	30,779		$	(36,427	)	$	33,257		$	589,455
Allocated provision for credit losses	42,184		66,729		92,970			(237		)	155,345			356,991
Noninterest income	68,535		130,704		40,135			26,202			68,666			334,242
Noninterest expense	174,583		305,258		61,395			4,046			2,263,778			2,809,060
Net income (loss) before income tax expense (benefit)	118,605		53,726		(83,451		)	(14,034		)	(2,317,200		)	(2,242,354		)
Income tax expense (benefit)	24,685		11,494		(17,525		)	(2,947		)	(20,776		)	(5,069		)
Net income (loss)	93,920		42,232		(65,926		)	(11,087		)	(2,296,424		)	(2,237,285		)
Less: net income (loss) attributable to noncontrolling interests	116		—		—			396			(11		)	501
Net income (loss) attributable to BBVA USA Bancshares, Inc.	$	93,804	$	42,232	$	(65,926	)	$	(11,483	)	$	(2,296,413	)	$	(2,237,786	)
Average assets	$	41,177,867	$	18,697,233	$	8,282,036		$	20,254,208		$	7,944,769		$	96,356,113



	Three Months Ended March 31, 2019
	Commercial Banking and Wealth		Retail Banking		Corporate and Investment Banking		Treasury			Corporate Support and Other			Consolidated
	(In Thousands)
Net interest income (expense)	$	315,332	$	349,377	$	33,818	$	(20,024	)	$	4,586		$	683,089
Allocated provision (credit) for loan losses	57,440		103,405		25,930		373			(4,856		)	182,292
Noninterest income	57,375		111,919		36,517		12,486			39,463			257,760
Noninterest expense	167,968		297,923		39,879		5,589			70,614			581,973
Net income (loss) before income tax expense (benefit)	147,299		59,968		4,526		(13,500		)	(21,709		)	176,584
Income tax expense (benefit)	30,933		12,593		950		(2,835		)	(6,038		)	35,603
Net income (loss)	116,366		47,375		3,576		(10,665		)	(15,671		)	140,981
Less: net income attributable to noncontrolling interests	96		—		—		405			55			556
Net income (loss) attributable to BBVA USA Bancshares, Inc.	$	116,270	$	47,375	$	3,576	$	(11,070	)	$	(15,726	)	$	140,425
Average assets	$	40,393,329	$	18,932,712	$	8,214,217	$	17,214,202		$	8,231,416		$	92,985,876

The financial information presented was derived from the internal profitability reporting system used by management to monitor and manage the financial performance of the Company. This information is based on internal management accounting policies that have been developed to reflect the underlying economics of the businesses. These policies address the methodologies applied and include policies related to funds transfer pricing, cost allocations and capital allocations.

Funds transfer pricing was used in the determination of net interest income earned primarily on loans and deposits. The method employed for funds transfer pricing is a matched funding concept whereby lines of business which are fund providers are credited and those that are fund users are charged based on maturity, prepayment and/or repricing characteristics applied on an instrument level. Provision for loan losses is allocated to each segment based on internal management accounting policies for the allowance for loan losses and the related provision which differs from the policies for consolidated purposes. The difference between the consolidated provision for credit losses and the segments' provision for credit losses is reflected in Corporate Support and Other and reflects a current year revision in policy. Costs for centrally managed operations are generally allocated to the lines of business based on the utilization of services provided or other appropriate indicators. Revenue is recorded in the business segment responsible for the related product or service. Fee sharing is recorded to allocate portions of such revenue to other business segments involved in selling to, or providing services to, customers. Results of operations for the business segments reflect these fee sharing allocations. Capital is allocated to the lines of business based upon the underlying risks in each business considering economic and regulatory capital standards.

The development and application of these methodologies is a dynamic process. Accordingly, prior period financial results have been revised to reflect management accounting enhancements and changes in the Company's organizational structure. The 2019 segment information has been revised to conform to the 2020 presentation. In addition, unlike financial accounting, there is no authoritative literature for management accounting similar to U.S. GAAP. Consequently, reported results are not necessarily comparable with those presented by other financial institutions.