Segment information

3 Months Ended

Mar. 31, 2017

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 of Notes to Financial Statements in the 2016 Annual Report.  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.  As disclosed in the 2016 Annual Report, during 2016 the Company revised its funds transfer pricing allocation related to borrowings and to the residential real estate loans obtained in the acquisition of Hudson City, retroactive to 2015.  Accordingly, financial information for the three-month period

14. Segment information, continued

ended March 31, 2016 has been reclassified to conform to the current methodology.  As a result, total revenues and net income increased in the Discretionary Portfolio segment and decreased in the “All Other” category by $14 million and $8 million, respectively, for the three months ended March 31, 2016 from that which was previously reported.

As also described in note 22 in the 2016 Annual Report, 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
	2017								2016
	Total Revenues(a)		Inter- segment Revenues			Net Income (Loss)			Total Revenues(a)		Inter- segment Revenues			Net Income (Loss)
	(In thousands)
Business Banking	$	115,981		911			22,407		$	113,689		991			25,448
Commercial Banking		273,845		920			112,750			253,617		1,056			101,327
Commercial Real Estate		195,125		407			84,547			177,380		387			80,529
Discretionary Portfolio		78,946		(12,927	)		33,945			101,036		(14,323	)		48,410
Residential Mortgage Banking		93,708		18,211			14,844			96,935		19,660			17,077
Retail Banking		361,237		3,047			81,873			339,046		3,014			63,288
All Other		242,263		(10,569	)		(1,439	)		211,194		(10,785	)		(37,551	)
Total	$	1,361,105		—			348,927		$	1,292,897		—			298,528

	Average total assets
	Three Months Ended March 31				Year Ended December 31
	2017		2016		2016
	(In millions)
Business Banking	$	5,596		5,424		5,456
Commercial Banking		26,723		24,838		25,592
Commercial Real Estate		22,977		19,839		21,131
Discretionary Portfolio		38,731		42,509		40,867
Residential Mortgage Banking		2,426		2,647		2,569
Retail Banking		12,204		11,568		11,840
All Other		14,321		16,427		16,885
Total	$	122,978		123,252		124,340

(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 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 $7,999,000 and $6,332,000 for the three-month periods ended March 31, 2017 and 2016, 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.