Note 22 - Segments

6 Months Ended

Jun. 30, 2025

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

(22) Segments

Bancorp’s principal activities are divided into two reportable segments, Commercial Banking and WM&T, which are delineated based on the products and services that each segment offers:

Commercial Banking provides a full range of loan and deposit products to individual consumers and businesses through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, credit card services, and other banking services. Bancorp also offers securities brokerage services via its banking center network through an arrangement with a third party broker-dealer in the Commercial Banking segment. 

WM&T provides investment management, financial & retirement planning and trust & estate services, as well as retirement plan management for businesses and corporations in all markets in which Bancorp operates. The magnitude of WM&T revenue distinguishes Bancorp from other community banks of similar asset size.

Bancorp’s Commercial Banking and WM&T segments overlap a regional reporting structure. These regions are based on the primary geographic markets in which Bancorp operates, specifically Louisville, central, eastern and northern Kentucky, and the Indianapolis, Indiana and Cincinnati, Ohio MSAs. All regions share the same lines of business, including the same products, services and delivery methods, as well as similar customer bases and pricing guidelines.

Financial information for each business segment reflects that which is specifically identifiable or allocated based on an internal allocation method. Income taxes are allocated based on the effective federal income tax rate adjusted for any tax-exempt activity. All tax-exempt activity and provision have been allocated fully to the commercial banking segment. Measurement of performance of business segments is based on the management structure of Bancorp and is not necessarily comparable with similar information for any other financial institution. Information presented is also not necessarily indicative of the segments’ operations if they were independent entities.

Bancorp’s chief executive officer is the chief operating decision maker. The financial results by operating segment, including significant expense categories provided to the chief operating decision maker, help measure the profitability of a particular segment and identify trends, evaluate each segment and its impact on consolidated earnings, and enhance decision making processes related to the allocation of Bancorp’s resources.

The majority of the net assets of Bancorp are associated with in the Commercial Banking segment. As of June 30, 2025, goodwill totaling $194 million was recorded on Bancorp’s consolidated balance sheets, of which $172 million is attributed to the commercial banking segment and $22 million is attributed to WM&T. The portion of total goodwill attributed to WM&T relates entirely to the CB acquisition, which generated $67 million in total goodwill, $8.5 million of which was subsequently written off as a result of Bancorp selling its interest in LFA effective December 31, 2022. With the exception of goodwill attributed to WM&T through the CB acquisition, assets assigned to WM&T consist primarily of a CLI asset associated with the WM&T business added through the CB acquisition, net premises and equipment and a receivable related to fees earned that have not been collected.

WM&T AUM, which are the primary driver of WM&T revenue, are not included on the consolidated balance sheets of Bancorp. WM&T AUM totaled $7.19 billion and $7.07 billion as of June 30, 2025 and December 31, 2024, respectively.

Financial results by operating segment, including significant expense categories provided to the chief operating decision maker, are detailed below:

	Three months ended June 30, 2025						Three months ended June 30, 2024
	Commercial						Commercial
(in thousands)	Banking		WM&T		Total		Banking		WM&T		Total
Net interest income	$	73,184	$	289	$	73,473	$	61,790	$	232	$	62,022
Provision for credit losses		2,175		—		2,175		1,300		—		1,300
Net interest income after provision expense		71,009		289		71,298		60,490		232		60,722
Non-interest income:
Wealth management and trust services		—		10,483		10,483		—		10,795		10,795
All other non-interest income		13,865		—		13,865		12,860		—		12,860
Total non-interest income		13,865		10,483		24,348		12,860		10,795		23,655
Non-interest expenses:
Compensation and employee benefits		27,652		4,957		32,609		25,520		4,200		29,720
Net occupancy and equipment		3,779		246		4,025		3,570		249		3,819
Technology and communication		4,066		707		4,773		4,102		792		4,894
Intangible amortization		573		342		915		671		380		1,051
Other direct and indirect/allocated expenses		9,807		571		10,378		8,767		858		9,625
Total Non-interest expenses		45,877		6,823		52,700		42,630		6,479		49,109
Income before income tax expense		38,997		3,949		42,946		30,720		4,548		35,268
Income tax expense		8,066		856		8,922		6,683		987		7,670
Net income	$	30,931	$	3,093	$	34,024	$	24,037	$	3,561	$	27,598
Total assets	$	9,175,503	$	33,483	$	9,208,986	$	8,280,324	$	35,001	$	8,315,325

	Six months ended June 30, 2025						Six months ended June 30, 2024
	Commercial						Commercial
(in thousands)	Banking		WM&T		Total		Banking		WM&T		Total
Net interest income	$	143,457	$	568	$	144,025	$	121,584	$	508	$	122,092
Provision for credit losses		3,075		—		3,075		2,725		—		2,725
Net interest income after provision expense		140,382		568		140,950		118,859		508		119,367
Non-interest income:
Wealth management and trust services		—		21,130		21,130		—		21,566		21,566
All other non-interest income		26,214		—		26,214		25,360		—		25,360
Total non-interest income		26,214		21,130		47,344		25,360		21,566		46,926
Non-interest expenses:
Compensation and employee benefits		54,462		9,864		64,326		51,416		8,401		59,817
Net occupancy and equipment		7,657		491		8,148		6,994		495		7,489
Technology and communication		8,152		1,449		9,601		8,459		1,504		9,963
Intangible amortization		1,145		684		1,829		1,343		760		2,103
Other direct and indirect/allocated expenses		18,799		1,024		19,823		17,397		1,301		18,698
Total Non-interest expenses		90,215		13,512		103,727		85,609		12,461		98,070
Income before income tax expense		76,381		8,186		84,567		58,610		9,613		68,223
Income tax expense		15,496		1,776		17,272		12,652		2,086		14,738
Net income	$	60,885	$	6,410	$	67,295	$	45,958	$	7,527	$	53,485
Total assets	$	9,175,503	$	33,483	$	9,208,986	$	8,280,324	$	35,001	$	8,315,325