Segment Reporting

9 Months Ended

Sep. 30, 2017

The Corporation utilizes a risk-based internal profitability measurement system to provide strategic business unit reporting. The profitability measurement system is based on internal management methodologies designed to produce consistent results and reflect the underlying economics of the units. Certain strategic business units have been combined for segment information reporting purposes where the nature of the products and services, the type of customer and the distribution of those products and services are similar. The three reportable segments are Corporate and Commercial Specialty; Community, Consumer, and Business; and Risk Management and Shared Services. The financial information of the Corporation’s segments has been compiled utilizing the accounting policies described in the Corporation’s 2016 Annual Report on Form 10-K, with certain exceptions. The more significant of these exceptions are described herein.

The Corporation allocates net interest income using an internal funds transfer pricing ("FTP") methodology that charges users of funds (assets) and credits providers of funds (liabilities, primarily deposits) based on the maturity, prepayment and / or repricing characteristics of the assets and liabilities. The net effect of this allocation is recorded in the Risk Management and Shared Services segment.

A credit provision is allocated to segments based on the expected long-term annual net charge off rates attributable to the credit risk of loans managed by the segment during the period. In contrast, the level of the consolidated provision for credit losses is determined based on an incurred loss model using the methodologies described in the Corporation’s 2016 Annual Report on Form 10-K to assess the overall appropriateness of the allowance for loan losses. The net effect of the credit provision is recorded in Risk Management and Shared Services. Indirect expenses incurred by certain centralized support areas are allocated to segments based on actual usage (for example, volume measurements) and other criteria. Certain types of administrative expense and bank-

wide expense accruals (including amortization of core deposit and other intangible assets associated with acquisitions) are generally not allocated to segments. Income taxes are allocated to segments based on the Corporation’s estimated effective tax rate, with certain segments adjusted for any tax-exempt income or non-deductible expenses. Equity is allocated to the segments based on regulatory capital requirements and in proportion to an assessment of the inherent risks associated with the business of the segment (including interest, credit and operating risk).

The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to U.S. generally accepted accounting principles. As a result, reported segments and the financial information of the reported segments are not necessarily comparable with similar information reported by other financial institutions. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in previously reported segment financial data.

A brief description of each business segment is presented below. A more in-depth discussion of these segments can be found in the Segment Reporting footnote in the Corporation’s 2016 Annual Report on Form 10-K.

The Corporate and Commercial Specialty segment serves a wide range of customers including larger businesses, developers, not-for-profits, municipalities, and financial institutions. The Community, Consumer, and Business segment serves individuals, as well as small and mid-sized businesses. The Risk Management and Shared Services segment includes key shared operational functions and also includes residual revenue and expenses, representing the difference between actual amounts incurred and the amounts allocated to operating segments, including interest rate risk residuals (FTP mismatches) and credit risk and provision residuals (long-term credit charge mismatches).

Information about the Corporation’s segments is presented below.



Segment Income Statement Data
($ in Thousands)	Corporate and Commercial Specialty			Community, Consumer, and Business			Risk Management and Shared Services			Consolidated Total
Nine Months Ended September 30, 2017
Net interest income	$	271,615		$	270,011		$	12,589		$	554,215
Noninterest income	36,768			198,546			12,822			248,136
Total revenue	308,383			468,557			25,411			802,351
Credit provision^(a)	32,549			15,317			(21,866		)	26,000
Noninterest expense	116,578			361,580			49,276			527,434
Income (loss) before income taxes	159,256			91,660			(1,999		)	248,917
Income tax expense (benefit)	53,082			32,081			(15,500		)	69,663
Net income	$	106,174		$	59,579		$	13,501		$	179,254
Return on average allocated capital (ROCET1)^(b)	12.7		%	13.6		%	2.2		%	11.0		%
Nine Months Ended September 30, 2016
Net interest income	$	242,800		$	257,848		$	26,590		$	527,238
Noninterest income	35,172			207,460			17,962			260,594
Total revenue	277,972			465,308			44,552			787,832
Credit provision^(a)	38,933			18,357			(2,290		)	55,000
Noninterest expense	109,511			370,714			43,420			523,645
Income (loss) before income taxes	129,528			76,237			3,422			209,187
Income tax expense (benefit)	42,623			26,683			(5,560		)	63,746
Net income	$	86,905		$	49,554		$	8,982		$	145,441
Return on average allocated capital (ROCET1)^(b)	10.9		%	10.5		%	1.4		%	9.7		%



Segment Balance Sheet Data
($ in Thousands)	Corporate and Commercial Specialty		Community, Consumer, and Business		Risk Management and Shared Services		Consolidated Total
Average balances for YTD September 2017
Average earning assets	$	10,846,418	$	9,418,173	$	6,587,401	$	26,851,992
Average loans	10,837,933		9,414,880		248,165		20,500,978
Average deposits	6,759,105		11,568,220		3,486,354		21,813,679
Average allocated capital (CET1)^(b)	$	1,121,800	$	584,774	$	387,388	$	2,093,962
Average balances for YTD September 2016
Average earning assets	$	10,097,995	$	9,287,158	$	6,508,356	$	25,893,509
Average loans	10,088,777		9,285,848		166,447		19,541,072
Average deposits	5,906,695		11,320,106		3,531,614		20,758,415
Average allocated capital (CET1)^(b)	$	1,063,598	$	631,484	$	225,813	$	1,920,895


(a)	The consolidated credit provision is equal to the actual reported provision for credit losses.

(b)

The Federal Reserve establishes capital adequacy requirements for the Corporation, including common equity Tier 1. For segment reporting purposes, the return on common equity Tier 1 ("ROCET1") reflects return on average allocated common equity Tier 1. The ROCET1 for the Risk Management and Shared Services segment and the Consolidated Total is inclusive of the annualized effect of the preferred stock dividends.



Segment Income Statement Data
($ in Thousands)	Corporate and Commercial Specialty			Community, Consumer, and Business			Risk Management and Shared Services			Consolidated Total
Three Months Ended September 30, 2017
Net interest income	$	92,356		$	90,952		$	6,814		$	190,122
Noninterest income	12,278			67,867			5,750			85,895
Total revenue	104,634			158,819			12,564			276,017
Credit provision^(a)	9,499			5,046			(9,545		)	5,000
Noninterest expense	39,681			120,241			17,505			177,427
Income (loss) before income taxes	55,454			33,532			4,604			93,590
Income tax expense (benefit)	19,070			11,736			(2,217		)	28,589
Net income	$	36,384		$	21,796		$	6,821		$	65,001
Return on average allocated capital (ROCET1)^(b)	12.8		%	14.7		%	4.4		%	11.7		%
Three Months Ended September 30, 2016
Net interest income	$	83,567		$	87,274		$	7,693		$	178,534
Noninterest income	12,623			78,580			4,031			95,234
Total revenue	96,190			165,854			11,724			273,768
Credit provision^(a)	11,080			5,969			3,951			21,000
Noninterest expense	37,968			127,454			9,892			175,314
Income (loss) before income taxes	47,142			32,431			(2,119		)	77,454
Income tax expense (benefit)	14,907			11,351			(2,620		)	23,638
Net income	$	32,235		$	21,080		$	501		$	53,816
Return on average allocated capital (ROCET1)^(b)	11.7		%	13.2		%	(2.9		)%	10.5		%



Segment Balance Sheet Data
($ in Thousands)	Corporate and Commercial Specialty		Community, Consumer, and Business		Risk Management and Shared Services		Consolidated Total
Three Months Ended September 30, 2017
Average earning assets	$	10,923,762	$	9,608,242	$	6,927,791	$	27,459,795
Average loans	10,916,829		9,602,098		380,210		20,899,137
Average deposits	7,398,970		11,788,606		3,253,869		22,441,445
Average allocated capital (CET1)^(b)	$	1,125,181	$	588,841	$	405,653	$	2,119,675
Three Months Ended September 30, 2016
Average earning assets	$	10,441,454	$	9,414,718	$	6,577,991	$	26,434,163
Average loans	10,435,341		9,413,401		204,034		20,052,776
Average deposits	6,227,305		11,526,639		3,650,081		21,404,025
Average allocated capital (CET1)^(b)	$	1,091,624	$	633,392	$	227,600	$	1,952,616


(a)	The consolidated credit provision is equal to the actual reported provision for credit losses.

(b)

The Federal Reserve establishes capital adequacy requirements for the Corporation, including common equity Tier 1. For segment reporting purposes, the ROCET1 reflects return on average allocated common equity Tier 1. The ROCET1 for the Risk Management and Shared Services segment and the Consolidated Total is inclusive of the annualized effect of the preferred stock dividends.