Business Segments

12 Months Ended

Dec. 31, 2011

Business Segments [Abstract]

BUSINESS SEGMENTS

21. BUSINESS SEGMENTS

The Company has identified two principal reportable segments: Business Financial and Commercial Banking Centers (“Centers”) and the Treasury Department. The Company’s subsidiary bank has 42 Business Financial Centers and five Commercial Banking Centers organized in geographic regions, which are the focal points for customer sales and services. The Company utilizes an internal reporting system to measure the performance of various operating segments within the Bank which is the basis for determining the Bank’s reportable segments. The chief operating decision maker (currently our CEO) regularly reviews the financial information of these segments in deciding how to allocate resources and assessing performance. Business Financial and Commercial Banking Centers are considered one operating segment as their products and services are similar and are sold to similar types of customers, have similar production and distribution processes, have similar economic characteristics, and have similar reporting and organizational structures. The Treasury Department’s primary focus is managing the Bank’s investments, liquidity, and interest rate risk. Information related to the Company’s remaining operating segments, which include construction lending, dairy and livestock lending, SBA lending, leasing, and centralized functions have been aggregated and included in “Other.” In addition, the Company allocates internal funds transfer pricing to the segments using a methodology that charges users of funds interest expense and credits providers of funds interest income with the net effect of this allocation being recorded in administration.

The following table represents the selected financial information for these two business segments. Accounting principles generally accepted in the United States of America do not have an authoritative body of knowledge regarding the management accounting used in presenting segment financial information. The accounting policies for each of the business units is the same as those policies identified for the consolidated Company and identified in the summary of significant accounting policies, footnote 1. The income numbers represent the actual income and expenses of each business unit. In addition, each segment has allocated income and expenses based on management’s internal reporting system, which allows management to determine the performance of each of its business units. Loan fees, included in the Centers category are the actual loan fees paid to the Company by its customers. These fees are eliminated and deferred in the “Other” category, resulting in deferred loan fees for the consolidated financial statements. All income and expense items not directly associated with the two business segments are grouped in the “Other” category. Future changes in the Company’s management structure or reporting methodologies may result in changes in the measurement of operating segment results.

The following tables present the operating results and other key financial measures for the individual operating segments for the years ended December 31, 2011, 2010 and 2009:

	For the Year Ended December 31, 2011
	Centers		Treasury			Other			Eliminations			Total
			(Dollars in thousands)
Interest income, including loan fees	$	157,376	$	62,732		$	49,612		$	—		$	269,720
Credit for funds provided (1)		24,811		—			39,621			(64,432	)		—
Total interest income		182,187		62,732			89,233			(64,432	)		269,720
Interest expense		10,411		21,258			3,370			—			35,039
Charge for funds used (1)		4,884		35,128			24,420			(64,432	)		—
Total interest expense		15,295		56,386			27,790			(64,432	)		35,039
Net interest income		166,892		6,346			61,443			—			234,681
Provision for credit losses		—		—			7,068						7,068
Net interest income after provision for credit losses	$	166,892	$	6,346		$	54,375		$	—		$	227,613
Other operating income		21,622		(655	)		13,249			—			34,216
Other operating expenses		49,802		4,117			87,106			—			141,025
Segment pretax profit (loss)	$	138,712	$	1,574		($	19,482	)	$	—		$	120,804
Segment assets as of December 31, 2011	$	5,003,093	$	2,650,201		$	689,710		($	1,860,089	)	$	6,482,915
	For the Year Ended December 31, 2010
	Centers		Treasury			Other			Eliminations			Total
			(Dollars in thousands)
Interest income, including loan fees	$	170,335	$	76,651		$	70,303		$	—		$	317,289
Credit for funds provided (1)		71,752		—			28,965			(100,717	)		—
Total interest income		242,087		76,651			99,268			(100,717	)		317,289
Interest expense		22,438		32,302			3,232			—			57,972
Charge for funds used (1)		11,743		41,484			47,490			(100,717	)		—
Total interest expense		34,181		73,786			50,722			(100,717	)		57,972
Net interest income		207,906		2,865			48,546			—			259,317
Provision for credit losses		—		—			61,200						61,200
Net interest income after provision for credit losses	$	207,906	$	2,865		$	(12,654	)	$	—		$	198,117
Other operating income		23,204		37,997			(4,087	)		—			57,114
Other operating expenses		51,922		20,125			96,445			—			168,492
Segment pretax profit (loss)	$	179,188	$	20,737		$	(113,186	)	$	—		$	86,739
Segment assets as of December 31, 2010	$	4,941,548	$	2,329,344		$	630,451		($	1,464,652	)	$	6,436,691
	For the Year Ended December 31, 2009
	Centers		Treasury			Other			Eliminations			Total
			(Dollars in thousands)
Interest income, including loan fees	$	159,347	$	104,778		$	46,634		$	—		$	310,759
Credit for funds provided (1)		53,759		—			23,233			(76,992	)		—
Total interest income		213,106		104,778			69,867			(76,992	)		310,759
Interest expense		28,428		55,572			4,495			—			88,495
Charge for funds used (1)		12,559		28,077			36,356			(76,992	)		—
Total interest expense		40,987		83,649			40,851			(76,992	)		88,495
Net interest income		172,119		21,129			29,016			—			222,264
Provision for credit losses		—		—			80,500						80,500
Net interest income after provision for credit losses	$	172,119	$	21,129		$	(51,484	)	$	—		$	141,764
Other operating income		19,537		28,124			33,410			—			81,071
Other operating expenses		47,860		5,945			79,781			—			133,586
Segment pretax profit (loss)	$	143,796	$	43,308		$	(97,855	)	$	—		$	89,249
Segment assets as of December 31, 2009	$	4,696,134	$	2,276,909		$	698,351		($	931,625	)	$	6,739,769

(1) Credit for funds provided and charge for funds used is eliminated in the consolidated presentation.