XML 42 R22.htm IDEA: XBRL DOCUMENT v3.21.1
Segment Reporting
 3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
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 2020 Annual Report on Form 10-K with certain exceptions. The more significant of these exceptions are described herein.
The reportable segment results are presented based on the Corporation's internal management accounting process. 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. GAAP. 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. Additionally, the information presented is not indicative of how the segments would perform if they operated as independent entities.
To determine financial performance of each segment, the Corporation allocates FTP assignments, the provision for credit losses, certain noninterest expenses, income taxes, and equity to each segment. Allocation methodologies are subject to periodic adjustment as the internal management accounting system is revised, the interest rate environment evolves, and business or product lines within the segments change. Also, because the development and application of these methodologies is a dynamic process, the financial results presented may be periodically reviewed.
The Corporation allocates net interest income using an internal FTP methodology that charges users of funds (assets) and credits providers of funds (liabilities, primarily deposits) based on the maturity, prepayment and / or re-pricing characteristics of the assets and liabilities. The net effect of this allocation is offset in the Risk Management and Shared Services segment to ensure consolidated totals reflect the Corporation's net interest income. The net FTP allocation is reflected as net intersegment income (expense) in the accompanying tables.
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 ACLL model using the methodologies described in the Corporation’s 2020 Annual Report on Form 10-K. 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 CDIs and other intangible assets associated with acquisitions, acquisition-related costs, and asset gains on disposed business units) 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).
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 2020 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 by providing lending and deposit solutions as well as the support to deliver, fund, and manage such banking solutions. In addition, this segment provides a variety of investment, fiduciary, and retirement planning products and services to individuals and small to mid-sized businesses. During the first quarter of 2021, the Corporation sold its wealth management subsidiary Whitnell. The Community, Consumer, and Business segment serves individuals, as well as small and mid-sized businesses, by providing lending and deposit solutions. In addition, the Corporation offered insurance and risk consulting services. 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:
Corporate and Commercial Specialty
Three Months Ended March 31,
($ in Thousands)20212020
Net interest income$93,161 $107,753 
Net intersegment interest income (expense)6,684 (10,726)
Segment net interest income99,845 97,028 
Noninterest income(a)
43,031 38,733 
Total revenue142,876 135,761 
Provision for credit losses17,509 12,172 
Noninterest expense57,725 54,304 
Income (loss) before income taxes67,642 69,284 
Income tax expense (benefit)12,649 12,940 
Net income$54,993 $56,344 
Allocated goodwill$525,836 $530,144 

Community, Consumer, and Business
Three Months Ended March 31,
($ in Thousands)20212020
Net interest income$68,275 $74,927 
Net intersegment interest income (expense)12,875 18,665 
Segment net interest income81,150 93,592 
Noninterest income46,128 53,350 
Total revenue127,278 146,942 
Provision for credit losses5,099 5,108 
Noninterest expense97,346 113,777 
Income (loss) before income taxes24,834 28,057 
Income tax expense (benefit)5,215 5,892 
Net income$19,618 $22,165 
Allocated goodwill$579,156 $661,244 
 Risk Management and Shared Services
Three Months Ended March 31,
($ in Thousands)20212020
Net interest income$14,465 $20,261 
Net intersegment interest income (expense)(19,559)(7,939)
Segment net interest income(5,094)12,322 
Noninterest income6,184 6,223 
Total revenue1,091 18,545 
Provision for credit losses(45,612)35,720 
Noninterest expense20,275 24,110 
Income (loss) before income taxes26,427 (41,285)
Income tax expense (benefit)6,737 (8,613)
Net income$19,690 $(32,672)
Allocated goodwill$— $— 

Consolidated Total
Three Months Ended March 31,
($ in Thousands)20212020
Net interest income$175,902 $202,942 
Net intersegment interest income (expense)— — 
Segment net interest income175,902 202,942 
Noninterest income(a)
95,343 98,306 
Total revenue271,245 301,248 
Provision for credit losses(23,004)53,001 
Noninterest expense175,347 192,191 
Income (loss) before income taxes118,903 56,056 
Income tax expense (benefit)24,602 10,219 
Net income$94,301 $45,838 
Allocated goodwill$1,104,992 $1,191,388