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Segment Reporting
 9 Months Ended
Sep. 30, 2022
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 2021 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, primarily loans) 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.
The 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 2021 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 2021 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. 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).
Effective during the third quarter of 2022, the product and marketing functions were moved to the Risk Management and Shared Services segment from the Community, Consumer, and Business and Corporate and Commercial Specialty segments in order to centralize these functions under common leadership.
Effective during the first quarter of 2022, certain support functions and a select group of banking regions were realigned into the Community, Consumer, and Business segment from the Corporate and Commercial Specialty segment.
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)2022202120222021
Net interest income$161,143 $91,012 $363,135 $270,712 
Net intersegment interest income (expense)(37,998)3,696 (34,774)12,690 
Segment net interest income123,145 94,709 328,361 283,403 
Noninterest income(a)
35,663 41,892 112,620 120,991 
Total revenue158,808 136,601 440,981 404,394 
Provision for credit losses11,904 14,349 36,803 46,745 
Noninterest expense58,934 56,209 172,141 165,568 
Income before income taxes87,970 66,043 232,037 192,082 
Income tax expense16,420 11,920 42,692 35,021 
Net income$71,551 $54,123 $189,346 $157,060 
Allocated goodwill$525,836 $525,836 
Community, Consumer, and Business
Three Months Ended Sep 30,Nine Months Ended Sep 30,
($ in Thousands)2022202120222021
Net interest income$87,156 $73,616 $233,699 $218,868 
Net intersegment interest income49,575 15,283 99,046 46,165 
Segment net interest income136,731 88,899 332,745 265,033 
Noninterest income26,745 37,053 92,072 117,351 
Total revenue163,476 125,952 424,817 382,384 
Provision for credit losses5,378 4,748 14,958 15,955 
Noninterest expense107,782 98,172 311,210 300,913 
Income before income taxes50,316 23,032 98,649 65,517 
Income tax expense10,567 4,837 20,716 13,758 
Net income$39,749 $18,196 $77,933 $51,758 
Allocated goodwill$579,156 $579,156 
 Risk Management and Shared Services
Three Months Ended Sep 30,Nine Months Ended Sep 30,
($ in Thousands)2022202120222021
Net interest income$16,140 $19,047 $71,498 $49,511 
Net intersegment (expense)(11,577)(18,980)(64,272)(58,855)
Segment net interest income (loss)4,563 68 7,227 (9,344)
Noninterest income8,381 3,131 16,021 12,520 
Total revenue12,943 3,199 23,247 3,176 
Provision for credit losses(283)(43,107)(38,756)(144,717)
Noninterest expense29,076 23,512 67,153 61,233 
Income (loss) before income taxes(15,849)22,794 (5,150)86,660 
Income tax expense (benefit)(824)6,304 4,769 21,363 
Net income (loss)$(15,025)$16,490 $(9,918)$65,298 
Allocated goodwill$— $— 
Consolidated Total
Three Months Ended Sep 30,Nine Months Ended Sep 30,
($ in Thousands)2022202120222021
Net interest income$264,439 $183,675 $668,332 $539,092 
Net intersegment interest income— — — — 
Segment net interest income264,439 183,675 668,332 539,092 
Noninterest income(a)
70,788 82,076 220,713 250,862 
Total revenue335,227 265,752 889,045 789,954 
Provision for credit losses16,998 (24,010)13,006 (82,018)
Noninterest expense195,791 177,892 550,503 527,713 
Income before income taxes122,438 111,870 325,536 344,259 
Income tax expense26,163 23,060 68,176 70,142 
Net income$96,275 $88,809 $257,360 $274,117 
Allocated goodwill$1,104,992 $1,104,992 
(a) For the nine months ended September 30, 2021, the Corporation recognized a $2 million pre-tax gain on sale of Whitnell.