| Segments |
14. SEGMENTS The Company's reportable segments are aggregated based primarily on geographic location, services offered, and markets served. The Company's regional segments, which include Arizona, Nevada, Southern California, and Northern California, provide full service banking and related services to their respective markets. The operations from the regional segments correspond to the following banking divisions: ABA in Arizona, BON and FIB in Nevada, TPB in Southern California, and Bridge in Northern California. The Company's NBL segments provide specialized banking services to niche markets. With the purchase of GE's domestic select-service hotel franchise loan portfolio on April 20, 2016, management has created a new operating segment called HFF, which is now included as one of the Company's NBL reportable segments. The Company's other NBL reportable segments include HOA Services, Public & Nonprofit Finance, Technology & Innovation, and Other NBLs. These NBLs are managed centrally and are broader in geographic scope than the Company's other segments, though still predominately located within the Company's core market areas. The HOA Services NBL corresponds to the AAB division. The newly created HFF NBL includes the hotel franchise loan portfolio purchased from GE. The operations of Public and Nonprofit Finance are combined into one reportable segment. The Technology & Innovation NBL includes the operations of Equity Fund Resources, Life Sciences Group, Renewable Resource Group, and Technology Finance. The Other NBLs segment consists of Corporate Finance, Mortgage Warehouse Lending, and Resort Finance. The Corporate & Other segment consists of corporate-related items, income and expense items not allocated to the Company's other reportable segments, and inter-segment eliminations. The Company's segment reporting process begins with the assignment of all loan and deposit accounts directly to the segments where these products are originated and/or serviced. Equity capital is assigned to each segment based on the risk profile of their assets and liabilities. With the exception of goodwill, which is assigned a 100% weighting, equity capital allocations ranged from 0% to 12% during the year, with a funds credit provided for the use of this equity as a funding source. Any excess or deficient equity not allocated to segments based on risk is assigned to the Corporate & Other segment. Net interest income, provision for credit losses, and non-interest expense amounts are recorded in their respective segment to the extent that the amounts are directly attributable to those segments. Net interest income is recorded in each segment on a TEB with a corresponding increase in income tax expense, which is eliminated in the Corporate & Other segment. Further, net interest income of a reportable segment includes a funds transfer pricing process that matches assets and liabilities with similar interest rate sensitivity and maturity characteristics. Using this funds transfer pricing methodology, liquidity is transferred between users and providers. A net user of funds has lending/investing in excess of deposits/borrowings and a net provider of funds has deposits/borrowings in excess of lending/investing. A segment that is a user of funds is charged for the use of funds, while a provider of funds is credited through funds transfer pricing, which is determined based on the average life of the assets or liabilities in the portfolio. Net income amounts for each reportable segment are further derived by the use of expense allocations. Certain expenses not directly attributable to a specific segment are allocated across all segments based on key metrics, such as number of employees, average loan balances, and average deposit balances. These types of expenses include information technology, operations, human resources, finance, risk management, credit administration, legal, and marketing. Income taxes are applied to each segment based on the effective tax rate for the geographic location of the segment. Any difference in the corporate tax rate and the aggregate effective tax rates in the segments are adjusted in the Corporate & Other segment. The following is a summary of selected operating segment information for the periods indicated: | | | | | | | | | | | | | | | | | | | | | | | | | | Regional Segments | Balance Sheet: | | Consolidated Company | | Arizona | | Nevada | | Southern California | | Northern California | At September 30, 2016 | | (dollars in millions) | Assets: | | | | | | | | | | | Cash, cash equivalents, and investment securities | | $ | 3,134.2 |
| | $ | 1.9 |
| | $ | 7.9 |
| | $ | 1.9 |
| | $ | 1.3 |
| Loans, net of deferred loan fees and costs | | 13,033.6 |
| | 2,938.0 |
| | 1,697.3 |
| | 1,833.4 |
| | 1,072.1 |
| Less: allowance for credit losses | | (122.9 | ) | | (30.5 | ) | | (18.5 | ) | | (19.8 | ) | | (9.1 | ) | Total loans | | 12,910.7 |
| | 2,907.5 |
| | 1,678.8 |
| | 1,813.6 |
| | 1,063.0 |
| Other assets acquired through foreclosure, net | | 49.6 |
| | 6.8 |
| | 20.4 |
| | — |
| | 0.3 |
| Goodwill and other intangible assets, net | | 303.6 |
| | — |
| | 23.9 |
| | — |
| | 157.8 |
| Other assets | | 644.5 |
| | 43.3 |
| | 59.9 |
| | 16.1 |
| | 14.6 |
| Total assets | | $ | 17,042.6 |
| | $ | 2,959.5 |
| | $ | 1,790.9 |
| | $ | 1,831.6 |
| | $ | 1,237.0 |
| Liabilities: | | | | | | | | | | | Deposits | | $ | 14,443.2 |
| | $ | 3,931.9 |
| | $ | 3,712.0 |
| | $ | 2,255.0 |
| | $ | 1,505.0 |
| Borrowings and qualifying debt | | 382.9 |
| | — |
| | — |
| | — |
| | — |
| Other liabilities | | 359.1 |
| | 13.2 |
| | 30.7 |
| | 11.1 |
| | 15.8 |
| Total liabilities | | 15,185.2 |
| | 3,945.1 |
| | 3,742.7 |
| | 2,266.1 |
| | 1,520.8 |
| Allocated equity: | | 1,857.4 |
| | 344.1 |
| | 247.8 |
| | 205.8 |
| | 281.7 |
| Total liabilities and stockholders' equity | | $ | 17,042.6 |
| | $ | 4,289.2 |
| | $ | 3,990.5 |
| | $ | 2,471.9 |
| | $ | 1,802.5 |
| Excess funds provided (used) | | — |
| | 1,329.7 |
| | 2,199.6 |
| | 640.3 |
| | 565.5 |
|
| | | | | | | | | | | | | | | | | | | | | | Income Statement: | | | | | | | | | | | Three Months Ended September 30, 2016: | | (in thousands) | Net interest income (expense) | | $ | 172,547 |
| | $ | 45,531 |
| | $ | 35,977 |
| | $ | 26,488 |
| | $ | 22,181 |
| Provision for (recovery of) credit losses | | 2,000 |
| | 2,399 |
| | (1,009 | ) | | (105 | ) | | 144 |
| Net interest income (expense) after provision for credit losses | | 170,547 |
| | 43,132 |
| | 36,986 |
| | 26,593 |
| | 22,037 |
| Non-interest income | | 10,683 |
| | 1,180 |
| | 2,264 |
| | 686 |
| | 2,916 |
| Non-interest expense | | (85,007 | ) | | (16,084 | ) | | (14,801 | ) | | (11,532 | ) | | (12,706 | ) | Income (loss) before income taxes | | 96,223 |
| | 28,228 |
| | 24,449 |
| | 15,747 |
| | 12,247 |
| Income tax expense (benefit) | | 29,171 |
| | 11,074 |
| | 8,557 |
| | 6,621 |
| | 5,150 |
| Net income | | $ | 67,052 |
| | $ | 17,154 |
| | $ | 15,892 |
| | $ | 9,126 |
| | $ | 7,097 |
|
| | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2016: | | (in thousands) | Net interest income (expense) | | $ | 481,944 |
| | $ | 125,191 |
| | $ | 102,016 |
| | $ | 76,719 |
| | $ | 67,272 |
| Provision for (recovery of) credit losses | | 7,000 |
| | 10,875 |
| | (3,526 | ) | | 145 |
| | 2,112 |
| Net interest income (expense) after provision for credit losses | | 474,944 |
| | 114,316 |
| | 105,542 |
| | 76,574 |
| | 65,160 |
| Non-interest income | | 32,375 |
| | 5,749 |
| | 6,420 |
| | 1,907 |
| | 7,858 |
| Non-interest expense | | (242,304 | ) | | (45,090 | ) | | (44,371 | ) | | (33,401 | ) | | (40,154 | ) | Income (loss) before income taxes | | 265,015 |
| | 74,975 |
| | 67,591 |
| | 45,080 |
| | 32,864 |
| Income tax expense (benefit) | | 75,017 |
| | 29,413 |
| | 23,657 |
| | 18,956 |
| | 13,819 |
| Net income | | $ | 189,998 |
| | $ | 45,562 |
| | $ | 43,934 |
| | $ | 26,124 |
| | $ | 19,045 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | National Business Lines | | | Balance Sheet: | | HOA Services | | HFF | | Public & Nonprofit Finance | | Technology & Innovation | | Other NBL | | Corporate & Other | At September 30, 2016 | | (dollars in millions) | Assets: | | | | | | | | | | | | | Cash, cash equivalents, and investment securities | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 3,121.2 |
| Loans, net of deferred loan fees and costs | | 106.4 |
| | 1,311.2 |
| | 1,447.7 |
| | 934.6 |
| | 1,673.9 |
| | 19.0 |
| Less: allowance for credit losses | | (1.2 | ) | | (0.6 | ) | | (15.7 | ) | | (8.7 | ) | | (18.1 | ) | | (0.7 | ) | Total loans | | 105.2 |
| | 1,310.6 |
| | 1,432.0 |
| | 925.9 |
| | 1,655.8 |
| | 18.3 |
| Other assets acquired through foreclosure, net | | — |
| | — |
| | — |
| | — |
| | — |
| | 22.1 |
| Goodwill and other intangible assets, net | | — |
| | 0.2 |
| | — |
| | 121.7 |
| | — |
| | — |
| Other assets | | 0.3 |
| | 5.4 |
| | 9.9 |
| | 4.9 |
| | 11.0 |
| | 479.1 |
| Total assets | | $ | 105.5 |
| | $ | 1,316.2 |
| | $ | 1,441.9 |
| | $ | 1,052.5 |
| | $ | 1,666.8 |
| | $ | 3,640.7 |
| Liabilities: | | | | | | | | | | | | | Deposits | | $ | 1,813.7 |
| | $ | — |
| | $ | — |
| | $ | 1,066.8 |
| | $ | — |
| | $ | 158.8 |
| Borrowings and qualifying debt | | — |
| | — |
| | — |
| | — |
| | — |
| | 382.9 |
| Other liabilities | | 0.9 |
| | 1.2 |
| | 98.2 |
| | 0.2 |
| | 59.2 |
| | 128.6 |
| Total liabilities | | 1,814.6 |
| | 1.2 |
| | 98.2 |
| | 1,067.0 |
| | 59.2 |
| | 670.3 |
| Allocated equity: | | 46.4 |
| | 108.1 |
| | 86.2 |
| | 218.2 |
| | 139.0 |
| | 180.1 |
| Total liabilities and stockholders' equity | | $ | 1,861.0 |
| | $ | 109.3 |
| | $ | 184.4 |
| | $ | 1,285.2 |
| | $ | 198.2 |
| | $ | 850.4 |
| Excess funds provided (used) | | 1,755.5 |
| | (1,206.9 | ) | | (1,257.5 | ) | | 232.7 |
| | (1,468.6 | ) | | (2,790.3 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | Income Statement: | | | | | | | | | | | | | Three Months Ended September 30, 2016: | | (in thousands) | Net interest income (expense) | | $ | 11,312 |
| | $ | 13,370 |
| | $ | 5,012 |
| | $ | 18,143 |
| | $ | 12,060 |
| | $ | (17,527 | ) | Provision for (recovery of) credit losses | | 72 |
| | — |
| | (315 | ) | | (557 | ) | | 1,372 |
| | (1 | ) | Net interest income (expense) after provision for credit losses | | 11,240 |
| | 13,370 |
| | 5,327 |
| | 18,700 |
| | 10,688 |
| | (17,526 | ) | Non-interest income | | 125 |
| | — |
| | 19 |
| | 1,871 |
| | 728 |
| | 894 |
| Non-interest expense | | (6,062 | ) | | (3,207 | ) | | (1,974 | ) | | (8,837 | ) | | (3,972 | ) | | (5,832 | ) | Income (loss) before income taxes | | 5,303 |
| | 10,163 |
| | 3,372 |
| | 11,734 |
| | 7,444 |
| | (22,464 | ) | Income tax expense (benefit) | | 1,989 |
| | 3,811 |
| | 1,265 |
| | 4,400 |
| | 2,791 |
| | (16,487 | ) | Net income | | $ | 3,314 |
| | $ | 6,352 |
| | $ | 2,107 |
| | $ | 7,334 |
| | $ | 4,653 |
| | $ | (5,977 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2016: | | (in thousands) | Net interest income (expense) | | $ | 29,853 |
| | $ | 25,438 |
| | $ | 15,259 |
| | $ | 51,083 |
| | $ | 35,220 |
| | $ | (46,107 | ) | Provision for (recovery of) credit losses | | 160 |
| | — |
| | (509 | ) | | (2,336 | ) | | 3,309 |
| | (3,230 | ) | Net interest income (expense) after provision for credit losses | | 29,693 |
| | 25,438 |
| | 15,768 |
| | 53,419 |
| | 31,911 |
| | (42,877 | ) | Non-interest income | | 340 |
| | — |
| | 22 |
| | 4,623 |
| | 1,598 |
| | 3,858 |
| Non-interest expense | | (17,423 | ) | | (5,764 | ) | | (5,927 | ) | | (23,177 | ) | | (11,007 | ) | | (15,990 | ) | Income (loss) before income taxes | | 12,610 |
| | 19,674 |
| | 9,863 |
| | 34,865 |
| | 22,502 |
| | (55,009 | ) | Income tax expense (benefit) | | 4,729 |
| | 7,378 |
| | 3,699 |
| | 13,074 |
| | 8,438 |
| | (48,146 | ) | Net income | | $ | 7,881 |
| | $ | 12,296 |
| | $ | 6,164 |
| | $ | 21,791 |
| | $ | 14,064 |
| | $ | (6,863 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | Regional Segments | Balance Sheet: | | Consolidated Company | | Arizona | | Nevada | | Southern California | | Northern California | At December 31, 2015 | | (dollars in millions) | Assets: | | | | | | | | | | | Cash, cash equivalents, and investment securities | | $ | 2,266.8 |
| | $ | 2.3 |
| | $ | 9.5 |
| | $ | 2.4 |
| | $ | 2.4 |
| Loans, net of deferred loan fees and costs | | 11,136.7 |
| | 2,811.7 |
| | 1,737.2 |
| | 1,761.9 |
| | 1,188.4 |
| Less: allowance for credit losses | | (119.1 | ) | | (30.1 | ) | | (18.6 | ) | | (18.8 | ) | | (12.7 | ) | Total loans | | 11,017.6 |
| | 2,781.6 |
| | 1,718.6 |
| | 1,743.1 |
| | 1,175.7 |
| Other assets acquired through foreclosure, net | | 43.9 |
| | 8.4 |
| | 20.8 |
| | — |
| | 0.3 |
| Goodwill and other intangible assets, net | | 305.4 |
| | — |
| | 24.8 |
| | — |
| | 158.2 |
| Other assets | | 641.4 |
| | 43.9 |
| | 62.3 |
| | 15.7 |
| | 16.1 |
| Total assets | | $ | 14,275.1 |
| | $ | 2,836.2 |
| | $ | 1,836.0 |
| | $ | 1,761.2 |
| | $ | 1,352.7 |
| Liabilities: | | | | | | | | | | | Deposits | | $ | 12,030.6 |
| | $ | 2,880.7 |
| | $ | 3,382.8 |
| | $ | 1,902.5 |
| | $ | 1,541.1 |
| Borrowings and qualifying debt | | 360.3 |
| | — |
| | — |
| | — |
| | — |
| Other liabilities | | 292.7 |
| | 12.2 |
| | 29.0 |
| | 7.8 |
| | 11.2 |
| Total liabilities | | 12,683.6 |
| | 2,892.9 |
| | 3,411.8 |
| | 1,910.3 |
| | 1,552.3 |
| Allocated equity: | | 1,591.5 |
| | 309.2 |
| | 244.4 |
| | 191.3 |
| | 293.2 |
| Total liabilities and stockholders' equity | | $ | 14,275.1 |
| | $ | 3,202.1 |
| | $ | 3,656.2 |
| | $ | 2,101.6 |
| | $ | 1,845.5 |
| Excess funds provided (used) | | — |
| | 365.9 |
| | 1,820.2 |
| | 340.4 |
| | 492.8 |
|
| | | | | | | | | | | | | | | | | | | | | | Income Statement: | | | | | | | | | | | Three Months Ended September 30, 2015: | | (in thousands) | Net interest income (expense) | | $ | 137,407 |
| | $ | 32,920 |
| | $ | 30,875 |
| | $ | 24,146 |
| | $ | 24,012 |
| Provision for (recovery of) credit losses | | — |
| | 1,964 |
| | (2,376 | ) | | (442 | ) | | 1,390 |
| Net interest income (expense) after provision for credit losses | | 137,407 |
| | 30,956 |
| | 33,251 |
| | 24,588 |
| | 22,622 |
| Non-interest income | | 8,502 |
| | 962 |
| | 2,199 |
| | 586 |
| | 2,484 |
| Non-interest expense | | (72,916 | ) | | (15,159 | ) | | (15,513 | ) | | (11,910 | ) | | (12,846 | ) | Income (loss) before income taxes | | 72,993 |
| | 16,759 |
| | 19,937 |
| | 13,264 |
| | 12,260 |
| Income tax expense (benefit) | | 17,133 |
| | 6,574 |
| | 6,978 |
| | 5,577 |
| | 5,156 |
| Net income | | $ | 55,860 |
| | $ | 10,185 |
| | $ | 12,959 |
| | $ | 7,687 |
| | $ | 7,104 |
|
| | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2015: | | (in thousands) | Net interest income (expense) | | $ | 349,233 |
| | $ | 93,996 |
| | $ | 90,030 |
| | $ | 70,706 |
| | $ | 33,681 |
| Provision for (recovery of) credit losses | | 700 |
| | 2,122 |
| | (5,175 | ) | | (176 | ) | | 1,876 |
| Net interest income (expense) after provision for credit losses | | 348,533 |
| | 91,874 |
| | 95,205 |
| | 70,882 |
| | 31,805 |
| Non-interest income | | 20,289 |
| | 2,909 |
| | 6,852 |
| | 2,101 |
| | 2,806 |
| Non-interest expense | | (188,158 | ) | | (44,520 | ) | | (45,019 | ) | | (35,389 | ) | | (16,776 | ) | Income (loss) before income taxes | | 180,664 |
| | 50,263 |
| | 57,038 |
| | 37,594 |
| | 17,835 |
| Income tax expense (benefit) | | 44,946 |
| | 19,718 |
| | 19,963 |
| | 15,808 |
| | 7,500 |
| Net income | | $ | 135,718 |
| | $ | 30,545 |
| | $ | 37,075 |
| | $ | 21,786 |
| | $ | 10,335 |
|
| | | | | | | | | | | | | | | | | | | | | | | | National Business Lines | | | Balance Sheet: | | HOA Services | | Public & Nonprofit Finance | | Technology & Innovation | | Other NBL | | Corporate & Other | At December 31, 2015 |
| (dollars in millions) | Assets: | | | | | | | | | | | Cash, cash equivalents, and investment securities | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 2,250.2 |
| Loans, net of deferred loan fees and costs | | 88.4 |
| | 1,458.9 |
| | 770.3 |
| | 1,280.3 |
| | 39.6 |
| Less: allowance for credit losses | | (0.9 | ) | | (15.6 | ) | | (8.2 | ) | | (13.8 | ) | | (0.4 | ) | Total loans | | 87.5 |
| | 1,443.3 |
| | 762.1 |
| | 1,266.5 |
| | 39.2 |
| Other assets acquired through foreclosure, net | | — |
| | — |
| | — |
| | — |
| | 14.4 |
| Goodwill and other intangible assets, net | | — |
| | — |
| | 122.4 |
| | — |
| | — |
| Other assets | | 0.2 |
| | 14.0 |
| | 2.7 |
| | 11.5 |
| | 475.0 |
| Total assets | | $ | 87.7 |
| | $ | 1,457.3 |
| | $ | 887.2 |
| | $ | 1,278.0 |
| | $ | 2,778.8 |
| Liabilities: | | | | | | | | | | | Deposits | | $ | 1,291.9 |
| | $ | — |
| | $ | 842.5 |
| | $ | — |
| | $ | 189.1 |
| Borrowings and qualifying debt | | — |
| | — |
| | — |
| | — |
| | 360.3 |
| Other liabilities | | 0.5 |
| | 63.8 |
| | — |
| | 40.8 |
| | 127.4 |
| Total liabilities | | 1,292.4 |
| | 63.8 |
| | 842.5 |
| | 40.8 |
| | 676.8 |
| Allocated equity: | | 34.2 |
| | 87.8 |
| | 200.9 |
| | 105.7 |
| | 124.8 |
| Total liabilities and stockholders' equity | | $ | 1,326.6 |
| | $ | 151.6 |
| | $ | 1,043.4 |
| | $ | 146.5 |
| | $ | 801.6 |
| Excess funds provided (used) | | 1,238.9 |
| | (1,305.7 | ) | | 156.2 |
| | (1,131.5 | ) | | (1,977.2 | ) |
| | | | | | | | | | | | | | | | | | | | | | Income Statement: | | | | | | | | | | | Three Months Ended September 30, 2015: | | (in thousands) | Net interest income (expense) | | $ | 6,458 |
| | $ | 5,050 |
| | $ | 14,527 |
| | $ | 11,312 |
| | $ | (11,893 | ) | Provision for (recovery of) credit losses | | 57 |
| | 473 |
| | 1,526 |
| | (2,544 | ) | | (48 | ) | Net interest income (expense) after provision for credit losses | | 6,401 |
| | 4,577 |
| | 13,001 |
| | 13,856 |
| | (11,845 | ) | Non-interest income | | 83 |
| | 26 |
| | 1,157 |
| | 168 |
| | 837 |
| Non-interest expense | | (4,515 | ) | | (1,419 | ) | | (3,650 | ) | | (3,541 | ) | | (4,363 | ) | Income (loss) before income taxes | | 1,969 |
| | 3,184 |
| | 10,508 |
| | 10,483 |
| | (15,371 | ) | Income tax expense (benefit) | | 738 |
| | 1,194 |
| | 3,941 |
| | 3,931 |
| | (16,956 | ) | Net income | | $ | 1,231 |
| | $ | 1,990 |
| | $ | 6,567 |
| | $ | 6,552 |
| | $ | 1,585 |
|
| | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2015: | | (in thousands) | Net interest income (expense) | | $ | 18,662 |
| | $ | 14,534 |
| | $ | 14,527 |
| | $ | 37,366 |
| | $ | (24,269 | ) | Provision for (recovery of) credit losses | | 198 |
| | 2,579 |
| | 1,526 |
| | (2,131 | ) | | (119 | ) | Net interest income (expense) after provision for credit losses | | 18,464 |
| | 11,955 |
| | 13,001 |
| | 39,497 |
| | (24,150 | ) | Non-interest income | | 236 |
| | 665 |
| | 1,157 |
| | 413 |
| | 3,150 |
| Non-interest expense | | (12,985 | ) | | (4,056 | ) | | (3,650 | ) | | (11,257 | ) | | (14,506 | ) | Income (loss) before income taxes | | 5,715 |
| | 8,564 |
| | 10,508 |
| | 28,653 |
| | (35,506 | ) | Income tax expense (benefit) | | 2,143 |
| | 3,212 |
| | 3,941 |
| | 10,745 |
| | (38,084 | ) | Net income | | $ | 3,572 |
| | $ | 5,352 |
| | $ | 6,567 |
| | $ | 17,908 |
| | $ | 2,578 |
|
|