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Segment Reporting
 9 Months Ended
Sep. 30, 2023
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 2022 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 2022 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, when applicable, 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 2022 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. 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).
Information about the Corporation’s segments is presented below:
Corporate and Commercial Specialty
Three Months Ended Sep 30,Nine Months Ended Sep 30,
($ in thousands)2023202220232022
Net interest income$250,365 $161,143 $710,031 $363,135 
Net intersegment interest (expense)(106,675)(40,117)(288,366)(36,893)
Segment net interest income143,690 121,026 421,665 326,242 
Noninterest income34,081 35,663 99,243 112,620 
Total revenue177,771 156,688 520,908 438,862 
Provision for credit losses14,066 11,904 41,523 36,803 
Noninterest expense63,207 58,934 186,351 172,141 
Income before income taxes100,498 85,851 293,034 229,918 
Income tax expense19,304 15,967 54,138 42,248 
Net income$81,194 $69,884 $238,897 $187,670 
Allocated goodwill$525,836 $525,836 
Community, Consumer, and Business
Three Months Ended Sep 30,Nine Months Ended Sep 30,
($ in thousands)2023202220232022
Net interest income$67,139 $87,156 $219,883 $233,699 
Net intersegment interest income123,900 49,437 317,820 98,907 
Segment net interest income191,039 136,593 537,703 332,606 
Noninterest income29,675 26,745 85,881 92,072 
Total revenue220,714 163,338 623,584 424,679 
Provision for credit losses7,381 5,378 21,467 14,958 
Noninterest expense108,185 107,860 328,960 311,423 
Income before income taxes105,148 50,100 273,158 98,298 
Income tax expense22,187 10,521 57,469 20,642 
Net income$82,961 $39,579 $215,688 $77,655 
Allocated goodwill$579,156 $579,156 
 Risk Management and Shared Services
Three Months Ended Sep 30,Nine Months Ended Sep 30,
($ in thousands)2023202220232022
Net interest income (loss)$(63,260)$16,140 $(143,743)$71,498 
Net intersegment (expense)(17,225)(9,320)(29,454)(62,014)
Segment net interest income (loss)(80,485)6,820 (173,197)9,484 
Noninterest income2,823 8,381 9,071 16,021 
Total revenue(77,663)15,201 (164,126)25,505 
Provision for credit losses496 (283)(975)(38,756)
Noninterest expense24,814 28,997 58,980 66,940 
(Loss) before income taxes(102,972)(13,513)(222,131)(2,679)
Income tax expense (benefit)(22,065)(325)(41,308)5,286 
Net (loss)$(80,907)$(13,189)$(180,823)$(7,965)
Allocated goodwill$— $— 
Consolidated Total
Three Months Ended Sep 30,Nine Months Ended Sep 30,
($ in thousands)2023202220232022
Net interest income$254,244 $264,439 $786,171 $668,332 
Net intersegment interest income— — — — 
Segment net interest income254,244 264,439 786,171 668,332 
Noninterest income66,579 70,788 194,195 220,713 
Total revenue320,823 335,227 980,366 889,045 
Provision for credit losses21,943 16,998 62,014 13,006 
Noninterest expense196,205 195,791 574,291 550,503 
Income before income taxes102,674 122,438 344,061 325,536 
Income tax expense19,426 26,163 70,299 68,176 
Net income$83,248 $96,275 $273,762 $257,360 
Allocated goodwill$1,104,992 $1,104,992