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Segment Reporting
 3 Months Ended
Mar. 31, 2024
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 2023 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 2023 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 2023 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 Mar 31,
($ in thousands)20242023
Net interest income$242,931 $219,123 
Net intersegment interest (expense)(93,736)(80,980)
Segment net interest income149,195 138,143 
Noninterest income34,422 32,717 
Total revenue183,617 170,860 
Provision for credit losses15,428 13,782 
Noninterest expense66,350 62,119 
Income before income taxes101,839 94,960 
Income tax expense21,081 17,726 
Net income$80,758 $77,234 
Allocated goodwill$525,836 $525,836 
Community, Consumer, and Business
Three Months Ended Mar 31,
($ in thousands)20242023
Net interest income$58,192 $80,284 
Net intersegment interest income130,159 88,079 
Segment net interest income188,351 168,363 
Noninterest income24,494 25,947 
Total revenue212,845 194,310 
Provision for credit losses6,825 6,758 
Noninterest expense110,490 111,735 
Income before income taxes95,530 75,817 
Income tax expense20,062 15,922 
Net income$75,468 $59,895 
Allocated goodwill$579,156 $579,156 
 Risk Management and Shared Services
Three Months Ended Mar 31,
($ in thousands)20242023
Net interest (loss)$(43,266)$(25,397)
Net intersegment (expense)(36,422)(7,099)
Segment net interest (loss)(79,688)(32,496)
Noninterest income6,068 3,409 
Total revenue(73,620)(29,087)
Provision for credit losses1,747 (2,568)
Noninterest expense20,817 13,558 
(Loss) before income taxes(96,184)(40,077)
Income tax (benefit)(21,127)(6,307)
Net (loss)$(75,058)$(33,770)
Allocated goodwill$— $— 
Consolidated Total
Three Months Ended Mar 31,
($ in thousands)20242023
Net interest income$257,858 $274,010 
Net intersegment interest income— — 
Segment net interest income257,858 274,010 
Noninterest income64,985 62,073 
Total revenue322,842 336,083 
Provision for credit losses24,001 17,971 
Noninterest expense197,657 187,412 
Income before income taxes101,185 130,700 
Income tax expense20,016 27,340 
Net income$81,169 $103,360 
Allocated goodwill$1,104,992 $1,104,992