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Segment Reporting
 6 Months Ended
Jun. 30, 2022
Segment Reporting [Abstract]  
Segment Reporting 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 the Corporation’s 2021 Annual Report on Form 10-K 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 taxes, 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, primarily loans) 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 the methodologies described in the Corporation’s 2021 Annual Report on Form 10-K. The net effect of the credit provision 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, and asset gains on disposed business units) 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. 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 brief description of each business segment is presented below. A more in-depth discussion of these segments can be found in the Segment Reporting note in the Corporation’s 2021 Annual Report on Form 10-K.
The Corporate and Commercial Specialty segment serves a wide range of customers including 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 and small to mid-sized businesses. During the first quarter of 2021, the Corporation sold its wealth management subsidiary Whitnell. The Community, Consumer, and Business segment serves individuals, as well as small and mid-sized businesses, by providing lending and deposit solutions. 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).
Effective during the first quarter of 2022, certain support functions and a select group of banking regions were realigned into the Community, Consumer, and Business segment from the Corporate and Commercial Specialty segment.
Information about the Corporation’s segments is presented below:
Corporate and Commercial Specialty
Three Months Ended Jun 30,Six Months Ended Jun 30,
($ in Thousands)2022202120222021
Net interest income$111,359 $90,039 $201,992 $179,700 
Net intersegment interest income (expense)(5,301)4,324 3,224 8,994 
Segment net interest income106,058 94,363 205,216 188,694 
Noninterest income(a)
39,133 37,281 76,923 79,109 
Total revenue145,191 131,643 282,139 267,803 
Provision for credit losses12,246 15,716 24,900 32,395 
Noninterest expense56,847 53,902 113,406 109,349 
Income before income taxes76,098 62,026 143,833 126,058 
Income tax expense13,919 11,214 26,232 23,106 
Net income$62,179 $50,812 $117,601 $102,953 
Allocated goodwill$525,836 $525,836 
Community, Consumer, and Business
Three Months Ended Jun 30,Six Months Ended Jun 30,
($ in Thousands)2022202120222021
Net interest income$76,999 $73,477 $146,543 $145,253 
Net intersegment interest income30,638 15,992 49,470 30,881 
Segment net interest income107,636 89,470 196,013 176,134 
Noninterest income32,121 32,967 65,327 80,298 
Total revenue139,757 122,437 261,341 256,432 
Provision for credit losses4,924 5,279 9,580 11,207 
Noninterest expense105,139 101,735 203,802 202,086 
Income before income taxes29,695 15,424 47,959 43,139 
Income tax expense6,236 3,239 10,071 9,059 
Net income$23,459 $12,185 $37,888 $34,080 
Allocated goodwill$579,156 $579,156 
 Risk Management and Shared Services
Three Months Ended Jun 30,Six Months Ended Jun 30,
($ in Thousands)2022202120222021
Net interest income$27,789 $15,999 $55,358 $30,464 
Net intersegment (expense)(25,337)(20,316)(52,694)(39,875)
Segment net interest income (loss)2,452 (4,318)2,664 (9,412)
Noninterest income4,204 3,195 7,675 9,379 
Total revenue6,656 (1,123)10,339 (33)
Provision for credit losses(17,172)(55,999)(38,472)(101,610)
Noninterest expense19,434 18,839 37,505 38,386 
Income before income taxes4,394 36,037 11,307 63,191 
Income tax expense3,209 8,027 5,710 14,917 
Net income$1,186 $28,010 $5,597 $48,274 
Allocated goodwill$— $— 
Consolidated Total
Three Months Ended Jun 30,Six Months Ended Jun 30,
($ in Thousands)2022202120222021
Net interest income$216,146 $179,515 $403,893 $355,416 
Net intersegment interest income— — — — 
Segment net interest income216,146 179,515 403,893 355,416 
Noninterest income(a)
75,458 73,443 149,925 168,786 
Total revenue291,604 252,957 553,819 524,202 
Provision for credit losses(2)(35,004)(3,992)(58,009)
Noninterest expense181,420 174,475 354,712 349,821 
Income before income taxes110,187 113,487 203,099 232,389 
Income tax expense23,363 22,480 42,013 47,082 
Net income$86,824 $91,007 $161,086 $185,307 
Allocated goodwill$1,104,992 $1,104,992 
(a) For the six months ended June 30, 2021, the Corporation recognized a $2 million pre-tax gain on sale of Whitnell.