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Segment information
3 Months Ended
Mar. 31, 2015
Segment Reporting [Abstract]  
Segment information
14. Segment information

Reportable segments have been determined based upon the Company’s internal profitability reporting system, which is organized by strategic business unit. Certain strategic business units have been combined for segment information reporting purposes where the nature of the products and services, the type of customer and the distribution of those products and services are similar. The reportable segments are Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking.

The financial information of the Company’s segments was compiled utilizing the accounting policies described in note 22 to the Company’s consolidated financial statements as of and for the year ended December 31, 2014. 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, the financial information of the reported segments is 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. Effective January 1, 2015, the Company made certain changes to its methodology for measuring segment profit and loss. Those changes in the measurement of segment profitability were largely the result of updated funds transfer pricing and various cost allocation reviews. The most significant changes to the funds transfer pricing resulted from ascribing a longer duration to non-maturity deposits, which significantly benefitted the Retail Banking segment. The cost allocation review having the largest impact related to a branch cost study. That study consisted of transaction reviews and time studies which resulted in a higher cost allocation from the Retail Banking segment to the Business Banking segment. As a result of the changes, prior period financial information has been restated to provide segment information on a comparable basis, as noted below:

 

     Three months ended March 31, 2014  
     Net income (loss) as
previously reported
     Impact of
changes
     Net income (loss)
as restated
 
     (in thousands)  

Business Banking

   $ 28,598         (3,625      24,973   

Commercial Banking

     99,765         (924      98,841   

Commercial Real Estate

     74,561         (2,009      72,552   

Discretionary Portfolio

     11,279         81         11,360   

Residential Mortgage Banking

     19,411         (831      18,580   

Retail Banking

     29,711         39,323         69,034   

All Other

     (34,308      (32,015      (66,323
  

 

 

    

 

 

    

 

 

 

Total

$ 229,017      —        229,017   
  

 

 

    

 

 

    

 

 

 

As also described in note 22 to the Company’s 2014 consolidated financial statements, neither goodwill nor core deposit and other intangible assets (and the amortization charges associated with such assets) resulting from acquisitions of financial institutions have been allocated to the Company’s reportable segments, but are included in the “All Other” category. The Company does, however, assign such intangible assets to business units for purposes of testing for impairment.

 

Information about the Company’s segments is presented in the following table:

 

     Three months ended March 31  
     2015     2014  
     Total
revenues (a)
     Inter-
segment
revenues
    Net
income
(loss)
    Total
revenues (a)
     Inter-
segment
revenues
    Net
income
(loss)
 
     (in thousands)  

Business Banking

   $ 108,560         1,045        24,811      $ 111,770         1,057        24,973   

Commercial Banking

     246,581         1,085        96,423        249,349         1,197        98,841   

Commercial Real Estate

     163,320         82        80,086        157,323         348        72,552   

Discretionary Portfolio

     15,474         (5,443     5,954        24,657         (5,039     11,360   

Residential Mortgage Banking

     111,458         11,387        31,965        93,765         9,748        18,580   

Retail Banking

     300,391         3,137        68,888        306,780         3,505        69,034   

All Other

     154,007         (11,293     (66,514     132,896         (10,816     (66,323
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total

$ 1,099,791      —        241,613    $ 1,076,540      —        229,017   
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

     Average total assets  
     Three months ended
March 31
     Year ended
December 31
 
     2015      2014      2014  
     (in millions)  

Business Banking

   $ 5,300         5,242         5,281   

Commercial Banking

     23,683         22,523         22,892   

Commercial Real Estate

     18,019         16,937         17,113   

Discretionary Portfolio

     22,714         18,581         20,798   

Residential Mortgage Banking

     3,512         3,157         3,333   

Retail Banking

     10,788         10,155         10,449   

All Other

     11,876         10,070         12,277   
  

 

 

    

 

 

    

 

 

 

Total

$ 95,892      86,665      92,143   
  

 

 

    

 

 

    

 

 

 

 

(a)

Total revenues are comprised of net interest income and other income. Net interest income is the difference between taxable-equivalent interest earned on assets and interest paid on liabilities owed by a segment and a funding charge (credit) based on the Company’s internal funds transfer pricing and allocation 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 $5,838,000 and $5,945,000 for the three-month periods ended March 31, 2015 and 2014, respectively, and is eliminated in “All Other” total revenues. Intersegment revenues are included in total revenues of the reportable segments. The elimination of intersegment revenues is included in the determination of “All Other” total revenues.