Segment Reporting

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Reporting

Note 21 Segment Reporting

The Corporation utilizes a risk-based internal profitability measurement system to provide strategic business unit reporting. The profitability measurement system is based on internal management methodologies designed to produce consistent results and reflect the underlying economics of the units. 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 three reportable segments are Corporate and Commercial Specialty; Community, Consumer, and Business; and Risk Management and Shared Services. The financial information of the Corporation’s segments has been compiled utilizing the accounting policies described in Note 1, with certain exceptions. The more significant of these exceptions are described herein.

The reportable segment results are presented based on the Corporation's internal management accounting process. 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 U.S. GAAP. As a result, reported segments and the financial information of the reported segments 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 previously reported segment financial data. Additionally, the information presented is not indicative of how the segments would perform if they operated as independent entities.

To determine financial performance of each segment, the Corporation allocates FTP assignments, the provision for credit losses, certain noninterest expenses, income tax, and equity to each segment. Allocation methodologies are subject to periodic adjustment as the internal management accounting system is revised, the interest rate environment evolves, and business or product lines within the segments change. Also, because the development and application of these methodologies is a dynamic process, the financial results presented may be periodically reviewed.

The Corporation allocates net interest income using an internal FTP methodology that charges users of funds (assets) and credits providers of funds (liabilities, primarily deposits) based on the maturity, prepayment, and / or re-pricing characteristics of the assets and liabilities. The net effect of this allocation is offset in the Risk Management and Shared Services segment to ensure consolidated totals reflect the Corporation's net interest income. The net FTP allocation is reflected as net intersegment interest income (expense) in the accompanying tables.

The provision for credit losses is allocated to segments based on the expected long-term annual net charge off rates attributable to the credit risk of loans managed by the segment during the period. In contrast, the level of the consolidated provision for credit losses is determined based on an ACLL model using methodologies described in Note 1. The net effect of the provision for credit losses is recorded in Risk Management and Shared Services. Indirect 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 expense and bank-wide expense accruals (including amortization of CDIs and other intangible assets associated with acquisitions, acquisition-related costs, asset gains on disposed business units, loss on the prepayment of FHLB advances, and income tax benefits as a result of corporate restructuring) are generally not allocated to segments. Income taxes are allocated to segments based on the Corporation’s estimated effective tax rate, with certain segments adjusted for any tax-exempt income or non-deductible expenses with the net tax residual recorded in Risk Management and Shared Services. 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).

A description of each business segment is presented below.

Corporate and Commercial Specialty: The Corporate and Commercial Specialty segment serves a wide range of customers including private clients, larger businesses, developers, not-for-profits, municipalities, and financial institutions by providing lending and deposit solutions as well as the support to deliver, fund, and manage such banking solutions. In addition, this segment provides a variety of investment, fiduciary, and retirement planning products and services to individuals, private clients, and small to mid-sized businesses. In serving this segment, we compete based on an in-depth understanding of our customers’ financial needs, the ability to match market competitive solutions to those needs, and the highest standards of relationship and service excellence in the delivery of these services. Delivery of services is provided through our corporate and commercial units, our CRE unit, as well as our specialized industries and commercial financial services units. Within this segment we provide the following products and services: (1) lending solutions, such as commercial loans and lines of credit, CRE financing, construction loans, letters of credit, leasing, asset-based lending, and, for our larger clients, loan syndications; (2) deposit and cash management solutions such as commercial checking and interest-bearing deposit products, cash vault and night depository services, liquidity solutions, payables and receivables solutions, and information services; (3) specialized financial services such as interest rate risk management, foreign exchange solutions, and commodity hedging; (4) fiduciary services such as administration of pension, profit-sharing and other employee benefit plans, fiduciary and corporate agency services, and institutional asset management; and (5) investable funds solutions such as savings, money market deposit accounts, IRA accounts, CDs, fixed and variable annuities, full-service, discount and online investment brokerage; investment advisory services; and trust and investment management accounts. During the first quarter of 2021, the Corporation sold its wealth management subsidiary, Whitnell.

Community, Consumer, and Business: The Community, Consumer, and Business segment serves individuals, as well as small and mid-sized businesses, by providing lending and deposit solutions. In addition, the Corporation offered insurance and risk consulting services, until the sale of the business in June of 2020. In serving this segment, we compete based on providing a broad range of solutions to meet the needs of our customers in their entire financial lifecycle, convenient access to our services through multiple channels such as branches, phone based services, online and mobile banking, and a relationship based business model which assists our customers in navigating any changes and challenges in their financial circumstances. Delivery of services is provided through our various consumer banking and community banking units. Within this segment we provide the following products and services: (1) lending solutions such as residential mortgages, home equity loans and lines of credit, personal and installment loans, auto loans, business loans, and business lines of credit, and (2) deposit and transactional solutions such as checking, credit, debit and pre-paid cards, online banking and bill pay, and money transfer services.

Risk Management and Shared Services: The Risk Management and Shared Services segment includes key shared operational functions and also includes residual revenue and expenses, representing the difference between actual amounts incurred and the amounts allocated to operating segments, including interest rate risk residuals (FTP mismatches) and credit risk and provision residuals (long-term credit charge mismatches). All acquisition related costs, the asset gain on sale of ABRC, loss on the prepayment of FHLB advances, and the tax benefit from corporate restructuring are included within the Risk Management and Shared Services segment.

Effective during 2021, select back office support functions that specifically support Community, Consumer and Business were reorganized under that segment from the Risk Management and Shared Services segment.

Information about the Corporation’s segments is presented below:

	Corporate and Commercial Specialty
	For the Years Ended December 31,
($ in Thousands)	2021		2020		2019
Net interest income	$	373,856	$	395,135	$	447,979
Net intersegment interest income (expense)	26,710		10,400		(52,200)
Segment net interest income	400,565		405,535		395,779
Noninterest income	170,338		149,456		136,097
Total revenue	570,903		554,991		531,876
Provision for credit losses	62,795		59,780		49,341
Noninterest expense	229,444		209,507		233,655
Income before income taxes	278,664		285,705		248,879
Income tax expense	49,772		53,193		47,480
Net income	$	228,891	$	232,512	$	201,399
Allocated goodwill	$	525,836	$	530,144	$	530,144

	Community, Consumer, and Business
	For the Years Ended December 31,
($ in Thousands)	2021		2020		2019
Net interest income	$	276,854	$	295,297	$	301,563
Net intersegment interest income	53,668		54,203		93,331
Segment net interest income	330,522		349,500		394,894
Noninterest income	146,457		185,737		223,712
Total revenue	476,978		535,237		618,606
Provision for credit losses	18,138		21,862		18,594
Noninterest expense	387,033		429,565		467,086
Income before income taxes	71,808		83,810		132,925
Income tax expense	15,080		17,600		27,914
Net income	$	56,728	$	66,210	$	105,011
Allocated goodwill	$	579,156	$	579,156	$	646,086

	Risk Management and Shared Services
	For the Years Ended December 31,
($ in Thousands)	2021		2020		2019
Net interest income	$	75,146	$	72,525	$	86,132
Net intersegment interest (expense)	(80,378)		(64,603)		(41,130)
Segment net interest income	(5,232)		7,922		45,001
Noninterest income(a)	15,570		178,862		21,015
Total revenue	10,338		186,784		66,017
Provision for credit losses	(168,944)		92,365		(51,935)
Noninterest expense	93,446		136,962		93,247
Income (loss) before income taxes	85,836		(42,543)		24,705
Income tax expense (benefit)(b)	20,461		(50,593)		4,325
Net income	$	65,374	$	8,050	$	20,379
Allocated goodwill	$	—	$	—	$	—

	Consolidated Total
	For the Years Ended December 31,
($ in Thousands)	2021		2020		2019
Net interest income	$	725,855	$	762,957	$	835,674
Net intersegment interest income	—		—		—
Segment net interest income	725,855		762,957		835,674
Noninterest income(a)	332,364		514,056		380,824
Total revenue	1,058,219		1,277,012		1,216,498
Provision for credit losses	(88,011)		174,006		16,000
Noninterest expense	709,924		776,034		793,988
Income before income taxes	436,307		326,972		406,509
Income tax expense(b)	85,313		20,200		79,720
Net income	$	350,994	$	306,771	$	326,790
Allocated goodwill	$	1,104,992	$	1,109,300	$	1,176,230

(a) For the year ended December 31, 2020, the Corporation recognized a $163 million asset gain related to the sale of ABRC.

(b) The Corporation has recognized $63 million in tax benefits for the year ended December 31, 2020.