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SEGMENT INFORMATION | 12 Months Ended
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Dec. 31, 2013
SEGMENT INFORMATION |
SEGMENT INFORMATION | NOTE 24—SEGMENT INFORMATION The Company utilizes an internal reporting system to measure the performance of various operating segments within the Bank and the Company overall. We have identified three operating segments for purposes of management reporting: 1) Retail Banking; 2) Commercial Banking; and 3) Other. These three business divisions meet the criteria of an operating segment: the segment engages in business activities from which it earns revenues and incurs expenses and whose operating results are regularly reviewed by the Company’s chief operating decision-maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. The Retail Banking segment focuses primarily on retail operations through the Bank’s branch network, as well as originating consumer loans. The Commercial Banking segment, which includes commercial real estate, primarily generates commercial loans through the efforts of the commercial lending offices located in the Bank’s northern and southern California production offices. Furthermore, the Company’s Commercial Banking segment also offers a wide variety of international finance and trade services and products. The remaining centralized functions, including treasury activities and eliminations of inter-segment amounts, have been aggregated and included in the Other segment, which provides broad administrative support to the two core segments. The Company’s funds transfer pricing assumptions are intended to promote core deposit growth and to reflect the current risk profiles of various loan categories within the credit portfolio. Transfer pricing assumptions and methodologies are reviewed at least annually to ensure that the Company’s process is reflective of current market conditions. The transfer pricing process is formulated with the goal of incenting loan and deposit growth that is consistent with the Company’s overall growth objectives as well as provide a reasonable and consistent basis for the measurement of the Company’s business segments and product net interest margins. Changes to the Company’s transfer pricing and methodologies are approved by the Asset Liability Committee. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Operating segment results are based on the Company’s internal management reporting process, which reflects assignments and allocations of capital, certain operating and administrative costs and the provision for loan losses. Net interest income is based on the Company’s internal funds transfer pricing system which assigns a cost of funds or a credit for funds to assets or liabilities based on their type, maturity or repricing characteristics. Noninterest income and noninterest expense, including depreciation and amortization, directly attributable to a segment are assigned to that business. Indirect costs, including overhead expense, are allocated to the segments based on several factors, including, but not limited to, full-time equivalent employees, loan volume and deposit volume. The provision for credit losses is allocated based on actual charge-offs for the period as well as average loan balances for each segment during the period. The Company evaluates overall performance based on profit or loss from operations before income taxes excluding nonrecurring gains and losses. Changes in our management structure or reporting methodologies may result in changes in the measurement of operating segment results. Results for prior periods are generally restated for comparability for changes in management structure or reporting methodologies unless it is not deemed practicable to do so. The following tables present the operating results and other key financial measures for the individual operating segments as of and for the years ended December 31, 2013, 2012, and 2011.
|  | Year Ended December 31, 2013
|  | Retail |  | Commercial |  |  |  |
|  | Banking |  | Banking |  | Other |  | Total
|  | (In thousands)
Interest income |  | $ | 374,818 |  | $ | 627,118 |  | $ | 66,749 |  | $ | 1,068,685
Charge for funds used |  | (86,552) |  | (116,161) |  | (18,244) |  | (220,957)
Interest spread on funds used |  | 288,266 |  | 510,957 |  | 48,505 |  | 847,728
Interest expense |  | (47,287) |  | (15,185) |  | (50,020) |  | (112,492)
Credit on funds provided |  | 173,194 |  | 29,262 |  | 18,501 |  | 220,957
Interest spread on funds provided |  | 125,907 |  | 14,077 |  | (31,519) |  | 108,465
Net interest income |  | $ | 414,173 |  | $ | 525,034 |  | $ | 16,986 |  | $ | 956,193
Provision for loan losses |  | $ | 10,911 |  | $ | 11,453 |  | $ | — |  | $ | 22,364
Depreciation, amortization and accretion (1) |  | 19,865 |  | 8,120 |  | 69,125 |  | 97,110
Goodwill |  | 320,566 |  | 16,872 |  | — |  | 337,438
Segment pre-tax profit |  | 123,876 |  | 272,369 |  | 29,605 |  | 425,850
Segment assets |  | 7,820,191 |  | 11,545,405 |  | 5,364,472 |  | 24,730,068
|  | Year Ended December 31, 2012
|  | Retail |  | Commercial |  |  |  |
|  | Banking |  | Banking |  | Other |  | Total
|  | (In thousands)
Interest income |  | $ | 356,244 |  | $ | 617,041 |  | $ | 77,810 |  | $ | 1,051,095
Charge for funds used |  | (85,811) |  | (118,688) |  | 44,407 |  | (160,092)
Interest spread on funds used |  | 270,433 |  | 498,353 |  | 122,217 |  | 891,003
Interest expense |  | (57,401) |  | (23,226) |  | (51,541) |  | (132,168)
Credit on funds provided |  | 130,713 |  | 13,138 |  | 16,241 |  | 160,092
Interest spread on funds provided |  | 73,312 |  | (10,088) |  | (35,300) |  | 27,924
Net interest income |  | $ | 343,745 |  | $ | 488,265 |  | $ | 86,917 |  | $ | 918,927
Provision for loan losses |  | $ | 28,729 |  | $ | 36,455 |  | $ | — |  | $ | 65,184
Depreciation, amortization and accretion (1) |  | 12,869 |  | (13,277) |  | 44,159 |  | 43,751
Goodwill |  | 320,566 |  | 16,872 |  | — |  | 337,438
Segment pre-tax profit |  | 74,836 |  | 266,168 |  | 84,588 |  | 425,592
Segment assets |  | 6,552,217 |  | 10,421,160 |  | 5,562,733 |  | 22,536,110
|  | Year Ended December 31, 2011
|  | Retail |  | Commercial |  |  |  |
|  | Banking |  | Banking |  | Other |  | Total
|  | (In thousands)
Interest income |  | $ | 358,853 |  | $ | 619,766 |  | $ | 101,829 |  | $ | 1,080,448
Charge for funds used |  | (94,098) |  | (142,056) |  | 3,690 |  | (232,464)
Interest spread on funds used |  | 264,755 |  | 477,710 |  | 105,519 |  | 847,984
Interest expense |  | (85,356) |  | (31,407) |  | (60,659) |  | (177,422)
Credit on funds provided |  | 202,080 |  | 13,863 |  | 16,521 |  | 232,464
Interest spread on funds provided |  | 116,724 |  | (17,544) |  | (44,138) |  | 55,042
Net interest income |  | $ | 381,479 |  | $ | 460,166 |  | $ | 61,381 |  | $ | 903,026
Provision for loan losses |  | $ | 27,888 |  | $ | 67,118 |  | $ | — |  | $ | 95,006
Depreciation, amortization and accretion (1) |  | 43,899 |  | 62,803 |  | 21,552 |  | 128,254
Goodwill |  | 320,566 |  | 16,872 |  | — |  | 337,438
Segment pre-tax profit |  | 102,217 |  | 227,766 |  | 53,351 |  | 383,334
Segment assets |  | 6,530,138 |  | 10,157,195 |  | 5,281,334 |  | 21,968,667
(1) Includes amortization and accretion related to the FDIC indemnification asset.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 + Details
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