OPERATING SEGMENTS

6 Months Ended

Jun. 30, 2012

OPERATING SEGMENTS

17. OPERATING SEGMENTS

We have three primary operating segments: Banking, Trust and Investments and the Holding Company. With respect to the Banking and Trust and Investments’ segments, each is delineated by the products and services that each segment offers. The Banking operating segment is comprised of commercial and personal banking services, including mortgage originations. Commercial banking services are primarily provided to corporations and other business clients and include a wide array of lending and cash management products. Personal banking services offered to individuals, professionals, and entrepreneurs include direct lending and depository services. The Trust and Investments segment includes certain activities of our PrivateWealth group, including investment management, investment advisory, personal trust and estate administration, custodial and escrow, retirement account administration, and brokerage services. The activities of the third operating segment, the Holding Company, include the direct and indirect ownership of our banking subsidiary, the issuance of debt and intersegment eliminations.

The accounting policies of the individual operating segments are the same as those of the Company as described in Note 1, “Summary of Significant Accounting Policies,” to the Notes to Consolidated Financial Statements of our 2011 Annual Report on Form 10-K. Transactions between operating segments are primarily conducted at fair value, resulting in profits that are eliminated from consolidated results of operations. Financial results for each segment are presented below. For segment reporting purposes, the statement of financial condition of Trust and Investments is included with the Banking segment.

Operating Segments Performance

(Amounts in thousands)

	Quarters Ended June 30,
	Banking				Trust and Investments				Holding Company and Other Adjustments						Consolidated
	2012		2011		2012		2011		2012			2011			2012		2011
Net interest income (expense)	$	109,517	$	104,631	$	678	$	662	$	(4,849	)	$	(4,790	)	$	105,346	$	100,503
Provision for loan and covered loan losses		17,038		31,093		—		—		—			—			17,038		31,093
Non-interest income		21,917		16,854		4,312		4,722		17			16			26,246		21,592
Non-interest expense		73,716		64,322		4,418		4,829		5,724			6,513			83,858		75,664
Income (loss) before taxes		40,680		26,070		572		555		(10,556	)		(11,287	)		30,696		15,338
Income tax provision (benefit)		15,395		10,268		226		221		(2,429	)		(4,169	)		13,192		6,320
Net income (loss)		25,285		15,802		346		334		(8,127	)		(7,118	)		17,504		9,018
Noncontrolling interest expense(1)		—		—		—		58		—			—			—		58
Net income (loss) attributable to controlling interests	$	25,285	$	15,802	$	346	$	276	$	(8,127	)	$	(7,118	)	$	17,504	$	8,960

	Six Months Ended June 30,
	Banking				Trust and Investments				Holding Company and Other Adjustments						Consolidated
	2012		2011		2012		2011		2012			2011			2012		2011
Net interest income (expense)	$	218,080	$	211,308	$	1,373	$	1,264	$	(9,731	)	$	(9,516	)	$	209,722	$	203,056
Provision for loan and covered loan losses		44,739		68,671		—		—		—			—			44,739		68,671
Non-interest income		45,172		35,533		8,531		9,681		47			5			53,750		45,219
Non-interest expense		142,684		128,781		9,104		9,864		12,299			12,368			164,087		151,013
Income (loss) before taxes		75,829		49,389		800		1,081		(21,983	)		(21,879	)		54,646		28,591
Income tax provision (benefit)		29,075		16,424		317		431		(6,505	)		(8,256	)		22,887		8,599
Net income (loss)		46,754		32,965		483		650		(15,478	)		(13,623	)		31,759		19,992
Noncontrolling interest expense(1)		—		—		—		130		—			—			—		130
Net income (loss) attributable to controlling interests	$	46,754	$	32,965	$	483	$	520	$	(15,478	)	$	(13,623	)	$	31,759	$	19,862

	Banking				Holding Company and Other Adjustments(2)						Consolidated
Selected Balances	6/30/12		12/31/11		6/30/12			12/31/11			6/30/12		12/31/11
Assets	$	11,475,381	$	11,034,516	$	1,466,795		$	1,382,354		$	12,942,176	$	12,416,870
Total loans		9,436,235		9,008,561		—			—			9,436,235		9,008,561
Deposits		10,851,166		10,542,517		(116,636	)		(149,663	)		10,734,530		10,392,854

⁽¹⁾  During the third quarter 2011, the Company acquired all the noncontrolling interests of our Lodestar subsidiary.

⁽²⁾  Deposit amounts represent the elimination of Holding Company cash accounts included in total deposits of the Banking segment.