Segment Reporting

3 Months Ended

Mar. 31, 2012

Segment Reporting [Abstract]

Segment Reporting

NOTE 14: Segment Reporting

During the first quarter of 2012, the Corporation implemented a new risk-based internal profitability measurement system which provides 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. As a result of these changes, we have re-organized our business segments to provide enhanced transparency given our new system capabilities. 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. Thereorganization will result in three reportable segments, in contrast to the two previously reported, with no segment representing more than half of the assets, liabilities or Tier 1 Common Equity of the Corporation as a whole. The three reportable segments will be Commercial Banking, Consumer Banking, and Risk Management and Shared Services.

The financial information of the Corporation's segments has been compiled utilizing the accounting policies described inthe Corporation's 2011 annual report on Form 10-K with certain exceptions. The more significant of these exceptions are described herein. The Corporation allocates interest income or interest expense using a funds transfer pricing methodology that charges users of funds (assets) interest expense and credits providers of funds (liabilities, primarily deposits) with income based on the maturity, prepayment and/or repricing characteristics of the assets and liabilities. The net effect of this allocation is recorded in the Risk Management and Shared Services segment. A credit provision is allocated to segments based on long-term annual net chargeoff rates attributable to the credit risk of loans managed by the segment during the period. In contrast, the level of the consolidated provision for loan losses is determined using the methodologies described in the Corporation's 2011 annual report on Form 10-K to assess the overall appropriateness of the allowance for loan losses. 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 core deposit and other intangible assets associated with acquisitions) are generally not allocated to segments. Income taxes are allocated to segments based on the Corporation's estimated effective 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 U.S. generally accepted accounting principles. 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 results in changes in reported segment financial data.

A description of each business segment is presented below.

Commercial Banking– The Commercial Banking segment offers loans, deposits, and related banking services offered to businesses (including regional middle market and larger commercial businesses, governments/municipalities, metro or niche markets, and companies with specialized borrowing needs such as financial institutions, or asset-based borrowers),which primarily include, but are not limited to: business checking and other business deposit products, business loans, lines of credit, commercial real estate financing, construction loans, letters of credit, revolving credit arrangements, and to a lesser degree, insurance related products and services, business credit cards, equipment and machinery leases,and the support to deliver, fund and manage such banking services. To further support business customers and correspondent financial institutions, the Corporation provides safe deposit and night depository services, cash management, risk management, international banking, as well as check clearing, safekeeping, and other banking-based services. The segment competes on the basis of relationship manager performance, commitment to local markets and market competitive pricing. This segment focuses on optimizing the go to market approach with emphasis on market alignment, relationship banking and sales excellence.

Consumer Banking – The Consumer Banking segment consists of lending and deposit gathering to individuals and small businesses and also provides a variety of fiduciary, investment management, advisory and corporate agency services to assist customers in building, investing or protecting their wealth, including securities brokerage, and trust/asset management. The segment offers a variety of loan and deposit products to retail customers, including but not limited to: home equity loans and lines of credit, residential mortgage loans and mortgage refinancing, personal and installment loans, checking, savings, money market deposit accounts, IRA accounts, certificates of deposit, and safe deposit boxes; small business checking and deposit products, loans, lines of credit; fixed and variable annuities, full-service, discount and on-line investment brokerage; and trust/asset management, investment management, administration of pension, profit-sharing and other employee benefit plans, personal trusts, and estate planning. The segment competes by offering an extensive breadth and depth of products, an extensive branch network and competitive pricing. The Consumer Banking segment strives toward optimization of value propositions and relationship banking.

Risk Management and Shared Services – The Risk Management and Shared Services segment includes Corporate Risk Management, Finance, Treasury, Operations and Technology functions, which are key shared functions. The segment also includes parent company activity, intersegment eliminations and residual revenue and expenses, representing the difference between actual amounts incurred and the amounts allocated to operating segments, including interest rate risk residuals (ALM mismatches) and credit risk and provision residuals (long term credit mismatches). The earning assets within this segment include the company's investment portfolio and capital includes both allocated as well as any remaining unallocated capital.

Information about the Corporation's segments is presented below.

Segment Income Statement Data
	($ in Thousands)		Commercial Banking		Consumer Banking			Risk Management and Shared Services			Consolidated Total
Three Months Ended March 31, 2012
Net interest income		$	70,086		$	80,239		$	4,343		$	154,668
Noninterest income			27,816			54,457			(714)			81,559
	Total revenue		97,902			134,696			3,629			236,227
Credit provision *			10,882			4,931			(15,813)			―
Noninterest expense			58,504			106,346			8,025			172,875
Income before income taxes			28,516			23,419			11,417			63,352
Income tax expense			9,981			8,197			2,541			20,719
Net income		$	18,535		$	15,222		$	8,876		$	42,633
Return on average allocated capital (ROT1CE) **			9.9	%		10.3	%		7.6	%		9.2	%
Three Months Ended March 31, 2011
Net interest income		$	64,016		$	83,642		$	6,065		$	153,723
Noninterest income			29,483			44,152			(1,453)			72,182
	Total revenue		93,499			127,794			4,612			225,905
Credit provision *			9,738			4,353			16,909			31,000
Noninterest expense			50,372			109,206			4,598			164,176
Income (loss) before income taxes			33,389			14,235			(16,895)			30,729
Income tax expense (benefit)			11,686			4,982			(8,792)			7,876
Net income (loss)		$	21,703		$	9,253		$	(8,103)		$	22,853
Return on average allocated capital (ROT1CE) **			11.7	%		6.9	%		(8.3)	%		3.7	%
Segment Balance Sheet Data
	($ in Thousands)		Commercial Banking		Consumer Banking			Risk Management and Shared Services			Consolidated Total
Average Balances for 1Q 2012
Average earning assets		$	7,081,463		$	7,212,426		$	5,077,840		$	19,371,729
Average loans			7,078,409			7,212,426			19,606			14,310,441
Average deposits			4,352,399			9,432,244			1,215,924			15,000,567
Average allocated capital (T1CE) **		$	746,008		$	591,280		$	464,361		$	1,801,649
Average Balances for 1Q 2011
Average earning assets		$	6,051,968		$	6,611,525		$	6,634,373		$	19,297,866
Average loans			6,049,021			6,611,525			13,298			12,673,844
Average deposits			3,386,977			9,445,062			1,413,575			14,245,614
Average allocated capital (T1CE) **		$	738,870		$	537,805		$	389,939		$	1,666,614
* The consolidated credit provision is equal to the actual reported provision for loan losses.
** ROT1CE reflects return on average allocated Tier 1 common equity ("T1CE").