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Segment Reporting
 6 Months Ended
Jun. 30, 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 interest income (expense) in the accompanying tables.
A provision for credit losses 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 note 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 historically 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 June 30,Six Months Ended June 30,
($ in Thousands)2021202020212020
Net interest income$93,366 $98,824 $186,527 $206,577 
Net intersegment interest income (expense)6,394 6,912 13,078 (3,814)
Segment net interest income99,760 105,736 199,605 202,764 
Noninterest income(a)
38,588 35,115 81,619 73,848 
Total revenue138,348 140,851 281,224 276,612 
Provision for credit losses16,429 13,713 33,938 25,885 
Noninterest expense56,404 53,959 114,129 108,264 
Income (loss) before income taxes65,514 73,179 133,157 142,464 
Income tax expense (benefit)11,947 13,724 24,596 26,664 
Net income$53,568 $59,456 $108,560 $115,800 
Allocated goodwill$525,836 $530,144 
Community, Consumer, and Business
Three Months Ended June 30,Six Months Ended June 30,
($ in Thousands)2021202020212020
Net interest income$70,150 $73,120 $138,425 $148,047 
Net intersegment interest income (expense)13,922 14,317 26,797 32,982 
Segment net interest income84,073 87,437 165,223 181,029 
Noninterest income31,660 54,133 77,788 107,483 
Total revenue115,732 141,570 243,011 288,512 
Provision for credit losses4,565 5,429 9,664 10,537 
Noninterest expense98,260 119,715 195,607 233,491 
Income (loss) before income taxes12,907 16,426 37,740 44,483 
Income tax expense (benefit)2,710 3,450 7,925 9,342 
Net income$10,196 $12,977 $29,815 $35,142 
Allocated goodwill$579,156 $577,758 
 Risk Management and Shared Services
Three Months Ended June 30,Six Months Ended June 30,
($ in Thousands)2021202020212020
Net interest income$15,999 $17,929 $30,464 $38,190 
Net intersegment interest income (expense)(20,316)(21,229)(39,875)(29,169)
Segment net interest income(4,318)(3,301)(9,412)9,021 
Noninterest income(b)
3,195 165,242 9,379 171,465 
Total revenue(1,123)161,941 (32)180,486 
Provision for credit losses(55,999)41,858 (101,610)77,579 
Noninterest expense19,810 9,733 40,086 33,843 
Income (loss) before income taxes35,065 110,350 61,492 69,065 
Income tax expense (benefit)7,823 34,065 14,560 25,451 
Net income$27,242 $76,285 $46,932 $43,613 
Allocated goodwill$— $— 
Consolidated Total
Three Months Ended June 30,Six Months Ended June 30,
($ in Thousands)2021202020212020
Net interest income$179,515 $189,872 $355,416 $392,814 
Net intersegment interest income (expense)— — — — 
Segment net interest income179,515 189,872 355,416 392,814 
Noninterest income(a)(b)
73,443 254,490 168,786 352,796 
Total revenue252,957 444,362 524,202 745,610 
Provision for credit losses(35,004)61,000 (58,009)114,001 
Noninterest expense174,475 183,407 349,821 375,598 
Income (loss) before income taxes113,487 199,955 232,389 256,012 
Income tax expense (benefit)22,480 51,238 47,082 61,457 
Net income$91,007 $148,718 $185,307 $194,555 
Allocated goodwill$1,104,992 $1,107,902