Business Segments

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Business Segments

9. 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 40 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 to assess 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. GAAP does 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 disclosed in Note 3 — Summary of Significant Accounting Policies. 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 periods indicated:

	For the Three Months Ended March 31, 2013
	Centers		Treasury			Other			Eliminations			Total
	(Dollars in thousands)
Interest income, including loan fees	$	35,435	$	12,788		$	10,590		$	—		$	58,813
Credit for funds provided (1)		6,312		—			2,559			(8,871	)		—
Total interest income		41,747		12,788			13,149			(8,871	)		58,813
Interest expense		1,499		2,417			308			—			4,224
Charge for funds used (1)		1,073		10,514			(2,716	)		(8,871	)		—
Total interest expense		2,572		12,931			(2,408	)		(8,871	)		4,224
Net interest income		39,175		(143	)		15,557			—			54,589
Provision for credit losses		—		—			—						—
Net interest income after provision for credit losses		39,175		(143	)		15,557			—			54,589
Noninterest income		5,106		2,094			(455	)		—			6,745
Noninterest expense		11,577		184			19,037			—			30,798
Segment pre-tax profit (loss)	$	32,704	$	1,767		$	(3,935	)	$	—		$	30,536
Segment assets as of March 31, 2013	$	4,985,725	$	2,622,402		$	788,016		$	(2,130,376	)	$	6,265,767

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

	For the Three Months Ended March 31, 2012
	Centers		Treasury		Other			Eliminations			Total
	(Dollars in thousands)
Interest income, including loan fees	$	37,671	$	15,363	$	13,031		$	—		$	66,065
Credit for funds provided (1)		6,347		—		2,600			(8,947	)		—
Total interest income		44,018		15,363		15,631			(8,947	)		66,065
Interest expense		2,051		4,548		864			—			7,463
Charge for funds used (1)		1,097		10,028		(2,178	)		(8,947	)		—
Total interest expense		3,148		14,576		(1,314	)		(8,947	)		7,463
Net interest income		40,870		787		16,945			—			58,602
Provision for credit losses		—		—		—			—			—
Net interest income after provision for credit losses		40,870		787		16,945			—			58,602
Noninterest income		5,983		—		(727	)		—			5,256
Noninterest expense		11,898		195		18,119			—			30,212
Debt termination		—		—		—			—			—
Segment pre-tax profit (loss)	$	34,955	$	592	$	(1,901	)	$	—		$	33,646
Segment assets as of December 31, 2012	$	4,838,109	$	2,749,505	$	922,575		$	(2,004,106	)	$	6,506,083

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