Segment Reporting

9 Months Ended

Sep. 30, 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 resulted 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 are 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 result in changes in previously reported segment financial data. During 2012, certain organization and methodology changes were made and, accordingly, 2011 results have been restated and presented on a comparable basis.

A description of each business segment is presented below.

Commercial Banking– The Commercial Banking segment offers loans, deposits, and related banking services 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
Nine Months Ended September 30, 2012
Net interest income		$	211,855		$	231,183		$	21,499		$	464,537
Noninterest income			65,060			159,951			10,374			235,385
	Total revenue		276,915			391,134			31,873			699,922
Credit provision *			34,251			14,629			(48,880)			0
Noninterest expense			159,781			317,994			27,720			505,495
Income before income taxes			82,883			58,511			53,033			194,427
Income tax expense			29,009			20,479			12,594			62,082
Net income		$	53,874		$	38,032		$	40,439		$	132,345
Return on average allocated capital (ROT1CE) **			9.5	%		8.7	%		10.2	%		9.4	%
Nine Months Ended September 30, 2011
Net interest income		$	190,510		$	243,298		$	27,198		$	461,006
Noninterest income			68,085			133,030			472			201,587
	Total revenue		258,595			376,328			27,670			662,593
Credit provision *			29,537			13,310			8,153			51,000
Noninterest expense			143,270			327,109			7,817			478,196
Income before income taxes			85,788			35,909			11,700			133,397
Income tax expense (benefit)			30,026			12,568			(7,771)			34,823
Net income		$	55,762		$	23,341		$	19,471		$	98,574
Return on average allocated capital (ROT1CE) **			10.2	%		5.7	%		(1.3)	%		5.9	%
Segment Balance Sheet Data
	($ in Thousands)		Commercial Banking		Consumer Banking			Risk Management and Shared Services			Consolidated Total
Average Balances for YTD 3Q 2012
Average earning assets		$	7,410,958		$	7,181,048		$	4,881,201		$	19,473,207
Average loans			7,404,668			7,181,048			25,349			14,611,065
Average deposits			4,422,944			9,437,407			1,363,454			15,223,805
Average allocated capital (T1CE) **		$	759,913		$	585,906		$	480,451		$	1,826,270
Average Balances for YTD 3Q 2011
Average earning assets		$	6,244,881		$	6,758,489		$	6,417,202		$	19,420,572
Average loans			6,241,125			6,758,489			21,520			13,021,134
Average deposits			3,429,213			9,531,142			1,274,768			14,235,123
Average allocated capital (T1CE) **		$	729,741		$	545,580		$	417,670		$	1,692,991
* 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"). The ROT1CE for the Risk Management and Shared Services segment and the Consolidated Total is inclusive of the annualized effect of the preferred stock dividends and discount accretion.
Segment Income Statement Data
	($ in Thousands)		Commercial Banking		Consumer Banking			Risk Management and Shared Services			Consolidated Total
Three Months Ended September 30, 2012
Net interest income		$	72,201		$	73,497		$	9,904		$	155,602
Noninterest income			23,669			51,511			5,808			80,988
	Total revenue		95,870			125,008			15,712			236,590
Credit provision *			11,942			4,845			(16,787)			0
Noninterest expense			53,419			105,181			11,103			169,703
Income before income taxes			30,509			14,982			21,396			66,887
Income tax expense			10,678			5,244			4,570			20,492
Net income		$	19,831		$	9,738		$	16,826		$	46,395
Return on average allocated capital (ROT1CE) **			10.2	%		6.7	%		12.3	%		9.7	%
Three Months Ended September 30, 2011
Net interest income		$	64,914		$	79,192		$	9,054		$	153,160
Noninterest income			20,147			48,406			443			68,996
	Total revenue		85,061			127,598			9,497			222,156
Credit provision *			10,062			4,599			(10,661)			4,000
Noninterest expense			48,032			110,417			1,031			159,480
Income before income taxes			26,967			12,582			19,127			58,676
Income tax expense			9,438			4,404			3,495			17,337
Net income		$	17,529		$	8,178		$	15,632		$	41,339
Return on average allocated capital (ROT1CE) **			9.6	%		5.8	%		7.4	%		7.8	%
Segment Balance Sheet Data
	($ in Thousands)		Commercial Banking		Consumer Banking			Risk Management and Shared Services			Consolidated Total
Average Balances for 3Q 2012
Average earning assets		$	7,757,046		$	7,147,934		$	4,754,816		$	19,659,796
Average loans			7,747,238			7,147,934			21,621			14,916,793
Average deposits			4,639,340			9,426,653			1,549,863			15,615,856
Average allocated capital (T1CE) **		$	770,718		$	579,108		$	500,784		$	1,850,610
Average Balances for 3Q 2011
Average earning assets		$	6,434,887		$	6,918,760		$	6,176,360		$	19,530,007
Average loans			6,431,575			6,918,760			26,593			13,376,928
Average deposits			3,731,983			9,558,565			1,114,763			14,405,311
Average allocated capital (T1CE) **		$	723,896		$	555,499		$	444,559		$	1,723,954
* 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"). The ROT1CE for the Risk Management and Shared Services segment and the Consolidated Total is inclusive of the annualized effect of the preferred stock dividends and discount accretion.