Segment information

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment information

23.    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 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. Income statement amounts are in thousands of dollars. Balance sheet amounts are in millions of dollars.

	For the Years Ended December 31, 2021, 2020 and 2019
	Business Banking							Commercial Banking						Commercial Real Estate									Discretionary Portfolio
	2021			2020		2019		2021		2020		2019		2021			2020			2019			2021			2020			2019
Net interest income(a)	$	518,940		$	462,614	$	451,307	$	854,264	$	864,149	$	828,888	$	643,415		$	673,894		$	692,526		$	483,624		$	486,831		$	209,807
Noninterest income		123,854			103,837		113,855		302,974		276,791		289,558		218,189			208,367			214,970			(38,638	)		(1,735	)		26,919
		642,794			566,451		565,162		1,157,238		1,140,940		1,118,446		861,604			882,261			907,496			444,986			485,096			236,726
Provision for credit losses		10,928			25,928		16,501		101,060		73,099		25,580		67,405			107,210			1,537			3,622			1,508			3,608
Amortization of core deposit    and other intangible    assets		—			—		—		—		—		—		1,060			1,060			1,060			—			—			—
Depreciation and other    amortization		1,106			1,482		2,066		2,362		2,421		2,353		35,623			28,187			26,963			194			285			279
Other noninterest expense		341,751			322,868		317,482		384,505		375,769		382,214		276,791			256,428			239,333			64,122			54,339			52,885
Income (loss) before taxes		289,009			216,173		229,113		669,311		689,651		708,299		480,725			489,376			638,603			377,048			428,964			179,954
Income tax expense    (benefit)		75,545			56,953		60,617		175,588		181,179		187,835		108,399			107,548			152,977			88,282			101,673			36,342
Net income (loss)	$	213,464		$	159,220	$	168,496	$	493,723	$	508,472	$	520,464	$	372,326		$	381,828		$	485,626		$	288,766		$	327,291		$	143,612
Average total assets    (in millions)	$	8,007		$	8,152	$	5,793	$	28,559	$	30,338	$	28,142	$	25,628		$	25,792		$	23,921		$	22,262		$	27,726		$	29,081
Capital expenditures    (in millions)	$	1		$	—	$	1	$	1	$	—	$	2	$	—		$	—		$	—		$	—		$	—		$	—
	For the Years Ended December 31, 2021, 2020 and 2019
	Residential Mortgage Banking							Retail Banking						All Other									Total
	2021			2020		2019		2021		2020		2019		2021			2020			2019			2021			2020			2019
Net interest income(a)	$	92,706		$	52,712	$	20,008	$	1,125,953	$	1,204,309	$	1,389,788	$	105,876		$	121,808		$	537,940		$	3,824,778		$	3,866,317		$	4,130,264
Noninterest income		523,765			515,549		393,372		290,610		260,163		327,562		746,240			725,472			695,443			2,166,994			2,088,444			2,061,679
		616,471			568,261		413,380		1,416,563		1,464,472		1,717,350		852,116			847,280			1,233,383			5,991,772			5,954,761			6,191,943
Provision for credit losses		(562	)		1,785		382		55,692		108,268		122,135		(313,145	)		482,202			6,257			(75,000	)		800,000			176,000
Amortization of core deposit    and other intangible    assets		—			—		—		—		—		—		9,107			13,809			18,430			10,167			14,869			19,490
Depreciation and other    amortization		57,716			60,129		48,248		93,159		95,936		93,312		123,881			116,979			108,604			314,041			305,419			281,825
Other noninterest expense		332,491			332,028		273,067		804,762		764,262		784,718		1,082,993			959,258			1,117,668			3,287,415			3,064,952			3,167,367
Income (loss) before taxes		226,826			174,319		91,683		462,950		496,006		717,185		(50,720	)		(724,968	)		(17,576	)		2,455,149			1,769,521			2,547,261
Income tax expense    (benefit)		53,866			40,667		19,355		121,464		130,745		189,611		(26,741	)		(202,396	)		(28,625	)		596,403			416,369			618,112
Net income (loss)	$	172,960		$	133,652	$	72,328	$	341,486	$	365,261	$	527,574	$	(23,979	)	$	(522,572	)	$	11,049		$	1,858,746		$	1,353,152		$	1,929,149
Average total assets    (in millions)	$	6,463		$	4,038	$	2,611	$	17,897	$	16,438	$	15,083	$	43,853		$	22,996		$	14,953		$	152,669		$	135,480		$	119,584
Capital expenditures    (in millions)	$	1		$	—	$	1	$	53	$	34	$	76	$	93		$	138		$	98		$	149		$	172		$	178

(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 $14,731,000 in 2021, $17,288,000 in 2020 and $22,863,000 in 2019 and is eliminated in “All Other” net interest income and income tax expense (benefit).

The Business Banking segment provides deposit, lending, cash management and other financial services to small businesses and professionals through the Company’s banking office network and several other delivery channels, including business banking centers, telephone banking, Internet

banking and automated teller machines. The Commercial Banking segment provides a wide range of credit products and banking services to middle-market and large commercial customers, mainly within the markets the Company serves. Among the services provided by this segment are commercial lending and leasing, letters of credit, deposit products and cash management services. The Commercial Real Estate segment provides credit services which are secured by various types of multifamily residential and commercial real estate and deposit services to its customers. Activities of this segment include the origination, sales and servicing of commercial real estate loans. Commercial real estate loans held for sale are included in the Commercial Real Estate Segment. The Discretionary Portfolio segment includes securities; residential real estate loans and other assets; short-term and long-term borrowed funds; brokered deposits; and Cayman Islands branch deposits. This segment also provides foreign exchange services to customers. The Residential Mortgage Banking segment originates and services residential real estate loans for consumers and sells substantially all originated loans in the secondary market to investors or to the Discretionary Portfolio segment. The segment periodically purchases servicing rights to loans that have been originated by other entities. Residential real estate loans held for sale are included in the Residential Mortgage Banking segment. The Retail Banking segment offers a variety of services to consumers through several delivery channels that include banking offices, automated teller machines, and telephone, mobile and Internet banking. The “All Other” category includes other operating activities of the Company that are not directly attributable to the reported segments; 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 acquisitions of financial institutions; merger-related gains and expenses resulting from acquisitions; the net impact of the Company’s internal funds transfer pricing methodology; eliminations of transactions between reportable segments; certain nonrecurring transactions; the residual effects of unallocated support systems and general and administrative expenses; and the impact of interest rate risk management strategies.

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

	Year Ended December 31
	2021			2020			2019
	(In thousands)
Revenues	$	(55,556	)	$	(47,604	)	$	(48,559	)
Expenses		(13,599	)		(14,038	)		(18,218	)
Income taxes		(10,846	)		(8,824	)		(7,976	)
Net income		(31,111	)		(24,742	)		(22,365	)

The Company conducts substantially all of its operations in the United States. There are no transactions with a single customer that in the aggregate result in revenues that exceed ten percent of consolidated total revenues.