Segment information

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segment information

23. Segment information

Reportable segments have been determined based upon the Company’s organizational structure and its internal profitability reporting system. In the fourth quarter of 2023 the Company completed modifications to its internal profitability reporting system to conform its internal management reporting with certain organizational changes that resulted in the realignment of its business operations into three reportable segments: Commercial Bank, Retail Bank and Institutional Services and Wealth Management. All other business activities that are not included in the three reportable segments results have been included in the "All Other" category. The reportable segments have been determined consistent with the Company's customer types and the manner of delivery of its products and services and is reflective of the financial information reviewed by the Company's Chief Executive Officer in evaluating operating decisions and business performance. Beginning in the fourth quarter of 2023, the realigned reportable segments reflect: (1) combining the previously reported Commercial Banking and Commercial Real Estate segments and certain other related activities previously reported in the "All Other" category into one business segment called Commercial Bank; (2) combining the previously reported Retail Banking, Business Banking and Residential Mortgage Banking segments into one business segment called Retail Bank; (3) combining the Institutional Client Services, Wealth Advisory Services and certain other trust-related activities, each previously reported within the "All Other" category, into one new business segment called Institutional Services and Wealth Management; and (4) allocating residential real estate loans previously reported within the Discretionary Portfolio segment into the business segments of Retail Bank and Institutional Services and Wealth Management, with the remainder of such activities being included in the "All Other" category. Certain changes to allocation methodologies for internal transfers for funding charges and credits associated with earning assets and interest-bearing liabilities and other revenues and expenses were also made in conjunction with these reportable segment revisions. Prior period reportable segment results disclosed herein have been presented in conformity with the new segment reporting structure.

The financial information of the Company’s segments was compiled utilizing the accounting policies described in note 1 with certain exceptions. The more significant of these exceptions are described herein. The Company allocates interest income or interest expense using a methodology that

charges users of funds (assets) interest expense and credits providers of funds (liabilities) with income based on the maturity, prepayment and/or repricing characteristics of the assets and liabilities. A provision for credit losses is allocated to segments in an amount based largely on actual net charge-offs incurred by the segment during the period plus or minus an amount necessary to adjust the segment’s allowance for credit losses due to changes in loan balances. In contrast, the level of the consolidated provision for credit losses is determined using the methodologies described in notes 1 and 5. The net effects of these allocations are recorded in the “All Other” category. Indirect fixed and variable expenses incurred by certain centralized support areas are allocated to segments based on actual usage (for example, volume measurements) and other criteria. Certain types of administrative expenses and bankwide expense accruals (including amortization of core deposit and other intangible assets associated with acquisitions of financial institutions) are generally not allocated to segments. Income taxes are allocated to segments based on the Company’s marginal statutory tax rate adjusted for any tax-exempt income or non-deductible expenses. Equity is allocated to the segments based on regulatory capital requirements and in proportion to an assessment of the inherent risks associated with the business of the segment (including interest, credit and operating risk). The management accounting policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to GAAP. As a result, reported segment results are not necessarily comparable with similar information reported by other financial institutions. Furthermore, changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial data.

Information about the Company’s segments is presented in the accompanying table.

	For the Years Ended December 31,
	Commercial Bank									Retail Bank							Institutional Services and Wealth Management
(Dollars in millions)	2023			2022			2021			2023		2022		2021			2023		2022			2021
Net interest income (a)	$	2,409		$	2,302		$	1,558		$	4,352	$	3,008	$	1,929		$	700	$	403		$	156
Noninterest income		658			588			509			762		703		831			1,005		1,007			766
		3,067			2,890			2,067			5,114		3,711		2,760			1,705		1,410			922
Provision for credit losses		297			66			169			173		101		69			—		(1	)		—
Amortization of core deposit    and other intangible assets		—			—			1			—		—		—			—		—			—
Depreciation and other    amortization		39			39			39			249		198		152			8		8			9
Other noninterest expense		1,307			1,085			748			2,208		2,009		1,508			859		859			768
Income (loss) before taxes		1,424			1,700			1,110			2,484		1,403		1,031			838		544			145
Income tax expense (benefit)		385			458			297			646		364		266			218		142			38
Net income (loss)	$	1,039		$	1,242		$	813		$	1,838	$	1,039	$	765		$	620	$	402		$	107
Average total assets	$	80,243		$	69,960		$	53,578		$	51,213	$	49,059	$	43,736		$	3,675	$	3,598		$	3,260
Capital expenditures	$	2		$	2		$	3		$	104	$	122	$	55		$	6	$	2		$	12
	All Other									Total
(Dollars in millions)	2023			2022			2021			2023		2022		2021
Net interest income (a)	$	(346	)	$	109		$	182		$	7,115	$	5,822	$	3,825
Noninterest income		103			59			61			2,528		2,357		2,167
		(243	)		168			243			9,643		8,179		5,992
Provision for credit losses		175			351			(313	)		645		517		(75	)
Amortization of core deposit    and other intangible assets		62			56			9			62		56		10
Depreciation and other    amortization		139			134			114			435		379		314
Other noninterest expense		508			662			264			4,882		4,615		3,288
Income (loss) before taxes		(1,127	)		(1,035	)		169			3,619		2,612		2,455
Income tax expense (benefit)		(371	)		(344	)		(5	)		878		620		596
Net income (loss)	$	(756	)	$	(691	)	$	174		$	2,741	$	1,992	$	1,859
Average total assets	$	70,266		$	67,635		$	52,095		$	205,397	$	190,252	$	152,669
Capital expenditures	$	144		$	88		$	79		$	256	$	214	$	149

(a)Net interest income is the difference between actual taxable-equivalent interest earned on assets and interest paid on liabilities by a segment and a funding charge (credit) based on the Company’s internal funds transfer pricing methodology. Segments are charged a cost to fund any assets (e.g. loans) and are paid a funding credit for any funds provided (e.g. deposits). The taxable-equivalent adjustment aggregated $54 million in 2023, $39 million in 2022 and $15 million in 2021 and is eliminated in “All Other” net interest income and income tax expense (benefit).

The Commercial Bank segment provides a wide range of credit products and banking services to middle-market and large commercial customers, mainly within the markets served by the Company. Services provided by this segment include commercial lending and leasing, credit facilities which are secured by various types of commercial real estate, letters of credit, deposit products and cash management services. Commercial real estate loans may be secured by multifamily residential buildings, hotels, office, retail and industrial space or other types of collateral. Activities of this segment include the origination, sales and servicing of commercial real estate loans through the Fannie Mae DUS program and other programs. Commercial real estate loans held for sale are included in this segment.

The Retail Bank segment provides a wide range of services to consumers and small businesses through the Company’s branch network and several other delivery channels such as telephone banking, internet banking and automated teller machines. The Company has branch offices in New York State, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Massachusetts, Maine, Vermont, New Hampshire, Virginia, West Virginia and the District of Columbia. The segment offers to its customers deposit products, including demand, savings and time accounts, and other services. Credit services offered by this segment include automobile and recreational finance loans (originated both directly and indirectly through dealers), home equity loans and lines of credit, credit cards and other loan products. This segment also originates and services residential mortgage loans and either sells those loans in the secondary market to investors or retains them for investment purposes. Residential mortgage loans are also originated and serviced on behalf of the Institutional Services and Wealth Management segment. The Company periodically purchases the rights to service residential real estate loans that have been originated by other entities and also sub-services residential real estate loans for others. Residential

real estate loans held for sale are included in this segment. This segment also provides various business loans, including loans guaranteed by the SBA, business credit cards, deposit products and services such as cash management, payroll and direct deposit, merchant credit card and letters of credits to small businesses and professionals through the Company's branch network and other delivery channels.

The Institutional Services and Wealth Management segment provides a variety of trustee, agency, investment management and administrative services for corporations and institutions, investment bankers, corporate tax, finance and legal executives, and other institutional clients, as well as personal trust, planning, fiduciary, asset management, family office and other services designed to help high net worth individuals and families grow, preserve and transfer wealth. This segment also provides investment products, including mutual funds and annuities and other services to customers.

The “All Other” category reflects other activities of the Company that are not directly attributable to the reported segments. Reflected in this category are the difference between the provision for credit losses and the calculated provision allocated to the reportable segments; goodwill and core deposit and other intangible assets resulting from the acquisitions of financial institutions; merger-related gains and expenses related to acquisitions; the net impact of the Company’s internal funds transfer pricing methodology; eliminations of transactions between reportable segments; certain non-recurring transactions; and the residual effects of unallocated support systems and general and administrative expenses. The Company’s investment securities portfolio, brokered deposits and short-term and long-term borrowings are generally included in the “All Other” category. In its management of interest rate risk, the Company utilizes interest rate swap agreements to modify the repricing characteristics of certain portfolios of earning assets and interest-bearing liabilities. The results of such activities are captured in the "All Other" category.

The amount of intersegment activity eliminated in arriving at consolidated totals was included in the “All Other” category as follows:

	Year Ended December 31,
(Dollars in millions)	2023			2022			2021
Revenues	$	(17	)	$	(14	)	$	(12	)
Expenses		(3	)		(2	)		(2	)
Income taxes		(4	)		(3	)		(3	)
Net income		(10	)		(9	)		(7	)

There are no transactions with a single customer that in the aggregate result in revenues that exceed ten percent of consolidated total revenues.