Segment Reporting

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Segment Reporting

NOTE 20  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 Commercial Banking, Consumer Banking, and Risk Management and Shared Services, with no segment representing more than half of the assets, liabilities or Tier 1 common equity of the Corporation as a whole.

The financial information of the Corporation's segments has been compiled utilizing the accounting policies described in Note 1, 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 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 loan losses is determined using the methodologies described in Note 1 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 tosegments. Income taxes are allocated tosegments 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 thesegments 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 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. During 2013, certain organization and methodology changes were made and, accordingly, 2012 and 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 serves a wide range of customers including, businesses, developers, non-profits, municipalities, and financial institutions. Business customers in this segment typically include companies with annual sales over $10 million and delivery of services is provided through our regional and middle market units, our commercial real estate unit, as well as our specialized industries and commercial financial services area. The financial solutions provided to our customers include but are not limited to: (1) Lending solutions, such as business loans and lines of credit, business credit cards, commercial real estate financing, construction loans, letters of credit, leasing, and asset based lending. For our larger clients we also offer syndicated loans to meet their lending needs; (2) Deposit and cash management solutions such as business checking and interest-bearing deposit products, safe deposit and night depository services, liquidity solutions, payables and receivables solutions; and information services; and (3) Specialized financial services such as insurance and benefits related products and services, risk management, and international banking solutions. In serving the commercial banking segment we compete based on an in-depth understanding of our customers' financial needs, the ability to match market competitive solutions to those needs, and the highest standards of relationship and service excellence in the delivery of these services.

Consumer Banking – The Consumer Banking segment serves individuals and small businesses (typically entities with less than $10 million in annual sales) through our various Retail Banking and Private Client offices, and provides companies of varying sizes with fiduciary services such as administration of pension, profit-sharing and other employee benefit plans, fiduciary and corporate agency services, and institutional asset management. The services provided to our individual and small business customers include but are not limited to: (1) Transactional solutions such as checking, credit, debit and pre-paid cards, online banking and bill pay, and money transfer services; (2) Lending solutions such as residential mortgages, home equity loans and lines of credit, business loans and lines, and personal and installment loans; and (3) Investable funds solutions such as savings, money market deposit accounts, IRA accounts, certificates of deposit, market linked certificates of deposit, fixed and variable annuities, full-service, discount and on-line investment brokerage; as well as trust and investment management accounts. In serving the consumer banking segment we compete based on providing a broad range of solutions to meet the needs of our customers in their entire financial lifecycle, convenient access to our services through multiple channels such as branches, phone based services, online and mobile banking, and a relationship based business model which assists our customers in navigating any changes and challenges in their financial circumstances.

Risk Management and Shared Services – The Risk Management and Shared Services segment includes Corporate Risk Management, Credit Administration, Finance, Treasury, Operations, and Technology, 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 (funds transfer pricing mismatches) and credit risk and provision residuals (long term credit charge mismatches). The earning assets within this segment include the Corporation'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
2013
Net interest income		$	318,377		$	317,016		$	10,150		$	645,543
Noninterest income			94,450			201,634			17,015			313,099
	Total revenue		412,827			518,650			27,165			958,642
Credit provision *			55,198			20,122			(65,320)			10,000
Noninterest expense			187,277			428,591			64,881			680,749
Income before income taxes			170,352			69,937			27,604			267,893
Income tax expense (benefit)			59,623			24,478			(4,900)			79,201
Net income		$	110,729		$	45,459		$	32,504		$	188,692
Return on average allocated capital (ROT1CE) **			14.2	%		8.5	%		4.8	%		9.8	%
2012
Net interest income		$	290,594		$	301,807		$	33,591		$	625,992
Noninterest income			86,912			207,234			19,144			313,290
	Total revenue		377,506			509,041			52,735			939,282
Credit provision *			46,563			19,419			(62,982)			3,000
Noninterest expense			194,327			440,611			46,885			681,823
Income before income taxes			136,616			49,011			68,832			254,459
Income tax expense			47,816			17,154			10,516			75,486
Net income		$	88,800		$	31,857		$	58,316		$	178,973
Return on average allocated capital (ROT1CE) **			12.1	%		5.7	%		9.8	%		9.5	%
2011
Net interest income		$	264,728		$	317,020		$	31,083		$	612,831
Noninterest income			86,087			176,236			10,796			273,119
	Total revenue		350,815			493,256			41,879			885,950
Credit provision *			40,259			17,988			(6,247)			52,000
Noninterest expense			191,038			441,468			18,017			650,523
Income before income taxes			119,518			33,800			30,109			183,427
Income tax expense (benefit)			41,831			11,830			(9,933)			43,728
Net income		$	77,687		$	21,970		$	40,042		$	139,699
Return on average allocated capital (ROT1CE) **			11.0	%		4.2	%		3.1	%		6.7	%
Segment Balance Sheet Data
	($ in Thousands)		Commercial Banking		Consumer Banking			Risk Management and Shared Services			Consolidated Total
2013
Average earning assets		$	8,443,203		$	7,225,943		$	5,310,982		$	20,980,128
Average loans			8,433,389			7,225,943			3,813			15,663,145
Average deposits			5,479,567			9,675,302			2,283,326			17,438,195
Average allocated capital (T1CE) **		$	778,098		$	535,783		$	564,490		$	1,878,371
2012
Average earning assets		$	7,540,502		$	7,182,766		$	4,890,509		$	19,613,777
Average loans			7,534,026			7,182,766			24,993			14,741,785
Average deposits			4,613,215			9,441,330			1,527,824			15,582,369
Average allocated capital (T1CE) **		$	731,943		$	562,125		$	544,356		$	1,838,424
2011
Average earning assets		$	6,498,071		$	6,653,451		$	6,290,741		$	19,442,263
Average loans			6,494,133			6,653,451			131,264			13,278,848
Average deposits			3,685,191			9,446,488			1,269,448			14,401,127
Average allocated capital (T1CE) **		$	705,775		$	523,168		$	484,212		$	1,713,155
* 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.