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Segment Reporting
 9 Months Ended
Sep. 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, until June 30, 2020, 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 Sep 30,Nine Months Ended Sep 30,
($ in Thousands)2021202020212020
Net interest income$93,768 $92,033 $280,295 $298,611 
Net intersegment interest income (expense)5,884 6,937 18,962 3,123 
Segment net interest income99,652 98,970 299,257 301,734 
Noninterest income(a)
43,228 37,405 124,847 111,254 
Total revenue142,881 136,376 424,104 412,987 
Provision for credit losses14,864 15,572 48,803 41,456 
Noninterest expense58,652 52,635 172,781 160,899 
Income (loss) before income taxes69,364 68,169 202,521 210,633 
Income tax expense (benefit)12,617 12,497 37,213 39,161 
Net income$56,747 $55,672 $165,307 $171,472 
Allocated goodwill$525,836 $530,144 
Community, Consumer, and Business
Three Months Ended Sep 30,Nine Months Ended Sep 30,
($ in Thousands)2021202020212020
Net interest income$70,860 $73,644 $209,285 $221,691 
Net intersegment interest income (expense)12,907 9,231 39,705 42,213 
Segment net interest income83,767 82,875 248,990 263,904 
Noninterest income35,771 32,958 113,558 140,442 
Total revenue119,538 115,833 362,548 404,345 
Provision for credit losses4,233 5,758 13,897 16,296 
Noninterest expense94,762 102,139 290,443 335,675 
Income (loss) before income taxes20,543 7,936 58,209 52,374 
Income tax expense (benefit)4,314 1,667 12,224 10,999 
Net income$16,230 $6,269 $45,985 $41,376 
Allocated goodwill$579,156 $577,758 
 Risk Management and Shared Services
Three Months Ended Sep 30,Nine Months Ended Sep 30,
($ in Thousands)2021202020212020
Net interest income$19,047 $16,472 $49,511 $54,662 
Net intersegment interest income (expense)(18,791)(16,167)(58,666)(45,336)
Segment net interest income256 305 (9,155)9,326 
Noninterest income(b)
3,077 5,182 12,457 176,646 
Total revenue3,333 5,487 3,301 185,973 
Provision for credit losses(43,107)21,679 (144,717)99,257 
Noninterest expense24,478 72,813 64,490 106,610 
Income (loss) before income taxes21,962 (89,005)83,529 (19,895)
Income tax expense (benefit)6,129 (72,278)20,705 (46,817)
Net income$15,833 $(16,727)$62,824 $26,922 
Allocated goodwill$— $— 
Consolidated Total
Three Months Ended Sep 30,Nine Months Ended Sep 30,
($ in Thousands)2021202020212020
Net interest income$183,675 $182,150 $539,092 $574,964 
Net intersegment interest income (expense)— — — — 
Segment net interest income183,675 182,150 539,092 574,964 
Noninterest income(a)(b)
82,076 75,545 250,862 428,342 
Total revenue265,752 257,695 789,954 1,003,305 
Provision for credit losses(24,010)43,009 (82,018)157,009 
Noninterest expense177,892 227,587 527,713 603,184 
Income (loss) before income taxes111,870 (12,900)344,259 243,112 
Income tax expense (benefit)23,060 (58,114)70,142 3,342 
Net income$88,809 $45,214 $274,117 $239,769 
Allocated goodwill$1,104,992 $1,107,902