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Segment Reporting
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
The Company's operations are organized into three reportable segments that represent its primary businesses: Commercial Banking, HSA Bank, and Consumer Banking. These segments reflect how executive management responsibilities are assigned, how discrete financial information is evaluated, the type of customer served, and how products and services are provided. Certain Treasury activities, including the operations of interLINK, along with the amounts required to reconcile profitability metrics to those reported in accordance with GAAP, are included in the Corporate and Reconciling category.
In connection with the acquisition of interLINK on January 11, 2023, the $143.2 million of goodwill recorded was allocated entirely to Commercial Banking. In addition, as previously discussed in Note 2: Mergers and Acquisitions and
Note 6: Goodwill and Other Intangible Assets, the allocation of the purchase price for both the Sterling merger and Bend acquisition was final as of March 31, 2023. As a result, of the total $1.9 billion in goodwill recorded in connection with the Sterling merger, $1.7 billion and $0.2 billion was allocated to Commercial Banking and Consumer Banking, respectively. The $35.7 million of goodwill recorded in connection with the Bend acquisition was allocated entirely to HSA Bank.
Segment Reporting Methodology
The Company uses an internal profitability reporting system to generate information by reportable segment, which is based on a series of management estimates for funds transfer pricing, and allocations for non-interest expense, provision for credit losses, income taxes, and equity capital. These estimates and allocations, certain of which are subjective in nature, are periodically reviewed and refined. Changes in estimates and allocations that affect the results of any reportable segment do not affect the consolidated financial position or results of operations of the Company as a whole. The full profitability measurement reports, which are prepared for each reportable segment, reflect non-GAAP reporting methodologies. The differences between full profitability and GAAP results are reconciled in the Corporate and Reconciling category.
The Company allocates interest income and interest expense to each business through an internal matched maturity FTP process. The goal of the FTP allocation is to encourage loan and deposit growth consistent with the Company’s overall profitability objectives. The FTP process considers the specific interest rate risk and liquidity risk of financial instruments and other assets and liabilities in each line of business. Loans are assigned an FTP rate for funds used and deposits are assigned an FTP rate for funds provided. The allocation considers the origination date and the earlier of the maturity date or the repricing date of a financial instrument to assign an FTP rate for loans and deposits originated each day. The FTP process transfers the corporate interest rate risk exposure to the Treasury function included within the Corporate and Reconciling category where such exposures are centrally managed.
The Company allocates a majority of non-interest expense to each reportable segment using an activity and driver-based costing process. Costs, including shared services and back-office support areas, are analyzed, pooled by process, and assigned to the appropriate reportable segment. The combination of direct revenue, direct expenses, funds transfer pricing, and allocations of non-interest expense produces PPNR, which is the basis the segments are reviewed by executive management. The Company also allocates the provision for credit losses to each reportable segment based on management's estimate of the expected loss content in each of the specific loan and lease portfolios. The ACL on loans and leases is included in total assets within the Corporate and Reconciling category. Business development expenses, such as merger-related and strategic initiatives costs, are also generally included in the Corporate and Reconciling category.
The following tables present balance sheet information, including the appropriate allocations, for the Company's reportable segments and the Corporate and Reconciling category:
At June 30, 2023
(In thousands)Commercial BankingHSA BankConsumer BankingCorporate and ReconcilingConsolidated Total
Goodwill$2,029,204 $57,485 $544,776 $— $2,631,465 
Total assets46,426,949 120,295 10,725,344 16,765,655 74,038,243 
At December 31, 2022
(In thousands)Commercial BankingHSA BankConsumer BankingCorporate and ReconcilingConsolidated Total
Goodwill$1,904,291 $57,779 $552,034 $— $2,514,104 
Total assets44,380,582 122,729 10,625,334 16,148,876 71,277,521 
The following tables present operating results, including the appropriate allocations, for the Company’s reportable segments and the Corporate and Reconciling category:
 Three months ended June 30, 2023
(In thousands)Commercial BankingHSA BankConsumer BankingCorporate and ReconcilingConsolidated Total
Net interest income$383,606 $75,421 $204,455 $(79,653)$583,829 
Non-interest income32,255 23,023 28,877 5,219 89,374 
Non-interest expense110,582 42,643 108,880 81,984 344,089 
Pre-tax, pre-provision net revenue305,279 55,801 124,452 (156,418)329,114 
Provision for credit losses34,480 — 769 (3,751)31,498 
Income before income taxes270,799 55,801 123,683 (152,667)297,616 
Income tax expense67,971 15,066 32,652 (53,041)62,648 
Net income$202,828 $40,735 $91,031 $(99,626)$234,968 
 Three months ended June 30, 2022
(In thousands)Commercial BankingHSA BankConsumer BankingCorporate and ReconcilingConsolidated Total
Net interest income$333,421 $49,558 $179,287 $(75,606)$486,660 
Non-interest income49,430 26,552 30,798 14,153 120,933 
Non-interest expense102,720 37,540 107,366 110,601 358,227 
Pre-tax, pre-provision net revenue280,131 38,570 102,719 (172,054)249,366 
Provision (benefit) for credit losses22,782 — (11,053)514 12,243 
Income before income taxes257,349 38,570 113,772 (172,568)237,123 
Income tax expense64,337 10,337 29,581 (49,443)54,812 
Net income$193,012 $28,233 $84,191 $(123,125)$182,311 
Six months ended June 30, 2023
(In thousands)Commercial BankingHSA BankConsumer BankingCorporate and ReconcilingConsolidated Total
Net interest income$767,920 $147,151 $415,038 $(150,997)$1,179,112 
Non-interest income67,652 47,090 54,836 (9,438)160,140 
Non-interest expense219,091 86,343 215,759 155,363 $676,556 
Pre-tax, pre-provision net revenue616,481 $107,898 254,115 (315,798)662,696 
Provision for credit losses70,517 — 2,553 5,177 78,247 
Income before income tax expense545,964 107,898 251,562 (320,975)584,449 
Income tax expense137,037 29,132 66,412 (104,104)128,477 
Net income$408,927 $78,766 $185,150 $(216,871)$455,972 
Six months ended June 30, 2022
(In thousands)Commercial BankingHSA BankConsumer BankingCorporate and ReconcilingConsolidated Total
Net interest income$620,490 $94,135 $315,964 $(149,681)$880,908 
Non-interest income88,173 53,510 58,699 24,586 224,968 
Non-interest expense191,960 73,949 202,876 249,227 718,012 
Pre-tax, pre-provision net revenue516,703 73,696 171,787 (374,322)387,864 
Provision (benefit) for credit losses204,713 — (3,917)292 201,088 
Income before income tax expense311,990 73,696 175,704 (374,614)186,776 
Income tax expense74,392 19,751 45,634 (118,565)21,212 
Net income$237,598 $53,945 $130,070 $(256,049)$165,564