BUSINESS SEGMENTS

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

BUSINESS SEGMENTS

BUSINESS SEGMENTS

The Company is managed by its CEO on a segment basis. The Company’s two business segments are Consumer Banking and Commercial Banking. The business segments are determined based on the products and services provided, or the type of customer served. Each segment has one or more segment heads who report directly to the CEO. The CEO has final authority over resource allocation decisions and performance assessment. The business segments reflect this management structure and the manner in which financial information is currently evaluated by the CEO. Non-segment operations are classified as Other, which includes corporate functions, the Treasury function, the securities portfolio, wholesale funding activities, intangible assets, community development, non-core assets, and other unallocated assets, liabilities, capital, revenues, provision for credit losses and expenses.

Reportable Segments

Segment results are determined based upon the Company’s management reporting system, which assigns balance sheet and income statement items to each of the business segments. The process is designed around the Company’s organizational and management structure and, accordingly, the results derived are not necessarily comparable with similar information published by other financial institutions. A description of each reportable segment and table of financial results is presented below:

Consumer Banking

The Consumer Banking segment focuses on retail customers and small businesses with annual revenues of up to $25 million. It offers traditional banking products and services, including checking, savings, home loans, student loans, credit cards, business loans and financial management services. It also operates an indirect auto financing business, providing financing for both new and used vehicles through auto dealerships. The segment’s distribution channels include a branch network, ATMs and a work force of experienced specialists ranging from financial consultants, mortgage loan officers and business banking officers to private bankers.

Commercial Banking

The Commercial Banking segment primarily targets companies with annual revenues from $25 million to $2.5 billion and provides a full complement of financial products and solutions, including loans, leases, trade financing, deposits, cash management, foreign exchange, interest rate risk management, corporate finance and capital markets advisory capabilities. It focuses on small and middle-market companies and has dedicated teams with industry expertise in government banking, not-for-profit, healthcare, technology, asset finance, franchise finance, asset-based lending, commercial real estate, private equity and sponsor finance. While the segment’s business development efforts are predominantly focused on the Company's footprint, some of its specialized industry businesses also operate selectively on a national basis (such as healthcare, asset finance and franchise finance). Commercial Banking is organized by teams that target different client industries. A key component of the Commercial Banking's growth strategy is to expand its loan portfolio by originating high-quality commercial loans, which produce revenues consistent with its financial objectives and complies with its credit policies. Commercial underwriting is driven by cash flow analysis supported by collateral analysis and review. The commercial lending teams offer a wide range of commercial loan products, including commercial real estate loans; working capital loans and lines of credit; demand, term and time loans; and equipment, inventory and accounts receivable financing.

Non-segment Operations

Other

In addition to non-segment operations, Other includes certain reconciling items in order to translate the segment results that are based on management accounting practices into consolidated results. For example, Other includes goodwill and the associated pre-tax $4.4 billion goodwill impairment charge recorded in 2013.

	As of and for the Year Ended December 31, 2014
(in millions)	Consumer Banking		Commercial Banking			Other		Consolidated
Net interest income		$2,151		$1,073			$77		$3,301
Noninterest income	899		429			350		1,678
Total revenue	3,050		1,502			427		4,979
Noninterest expense	2,513		652			227		3,392
Profit before provision for credit losses	537		850			200		1,587
Provision for credit losses	259		(6		)	66		319
Income before income tax expense	278		856			134		1,268
Income tax expense	96		295			12		403
Net income		$182		$561			$122		$865
Total Average Assets		$48,939		$38,483			$40,202		$127,624

	As of and for the Year Ended December 31, 2013
(in millions)	Consumer Banking		Commercial Banking			Other			Consolidated
Net interest income (expense)		$2,176		$1,031			($149	)		$3,058
Noninterest income	1,025		389			218			1,632
Total revenue	3,201		1,420			69			4,690
Noninterest expense	2,522		635			4,522			7,679
Profit (loss) before provision for credit losses	679		785			(4,453		)	(2,989		)
Provision for credit losses	308		(7		)	178			479
Income (loss) before income tax expense (benefit)	371		792			(4,631		)	(3,468		)
Income tax expense (benefit)	129		278			(449		)	(42		)
Net income (loss)		$242		$514			($4,182	)		($3,426	)
Total Average Assets		$46,465		$35,229			$39,172			$120,866

	As of and for the Year Ended December 31, 2012
(in millions)	Consumer Banking		Commercial Banking		Other			Consolidated
Net interest income (expense)		$2,197		$1,036		($6	)		$3,227
Noninterest income	1,187		349		131			1,667
Total revenue	3,384		1,385		125			4,894
Noninterest expense	2,691		625		141			3,457
Profit (loss) before provision for credit losses	693		760		(16		)	1,437
Provision for credit losses	408		63		(58		)	413
Income before income tax expense	285		697		42			1,024
Income tax expense	100		244		37			381
Net income		$185		$453		$5			$643
Total Average Assets		$47,824		$33,474		$46,368			$127,666

Management accounting practices utilized by the Company as the basis for presentation for segment results include the following:

FTP adjustments

The Company utilizes an FTP system to eliminate the effect of interest rate risk from the segments’ net interest income because such risk is centrally managed within the Treasury function. The FTP system credits (or charges) the segments with the economic value of the funds created (or used) by the segments. The FTP system provides a funds credit for sources of funds and a funds charge for the use of funds by each segment. The sum of the interest income/expense and FTP charges/credits for each segment is its designated net interest income. The variance between the Company’s cumulative FTP charges and cumulative FTP credits is offset in Other.

Provision for credit losses allocations

Provision for credit losses is allocated to each business segment based on actual net charge-offs that have been recognized by the business segment. The difference between the consolidated provision for credit losses and the business segments’ net charge-offs is reflected in Other.

Income tax allocations

Income taxes are assessed to each line of business at a standard tax rate with the residual tax expense or benefit to arrive at the consolidated effective tax rate included in Other.

Expense allocations

Noninterest expenses incurred by centrally managed operations or business lines that directly support another business line’s operations are charged to the applicable business line based on its utilization of those services.

Goodwill

For impairment testing purposes, the Company allocates goodwill to its Consumer Banking and Commercial Banking reporting units. For management reporting purposes, the Company presents the goodwill balance (and any related impairment charges) in Other.

Substantially all revenues generated and long-lived assets held by the Company’s business segments are derived from clients that reside in the United States. Neither business segment earns revenue from a single external customer that represents 10 percent or more of the Company’s total revenues.