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SEGMENT REPORTING AND REVENUE | 9 Months Ended
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Sep. 30, 2023
Revenue from Contract with Customer [Abstract] |
SEGMENT REPORTING AND REVENUE | 12. SEGMENT REPORTING AND REVENUE Operating Segments ​ Effective January 1, 2023, the Company made an organizational change to move certain lines of business in the wealth management division that primarily serve Wholesale Banking customers from the Consumer Banking segment to the Wholesale Banking segment. As a result, the Company reallocated $9.6 million of goodwill from the Consumer Banking segment to the Wholesale Banking segment and restated its prior segment information for the year ended December 31, 2022, based on this organizational change. Goodwill was evaluated for impairment prior to and immediately following the organizational change. Refer to Note 4 “Goodwill and Intangible Assets” within this Item 1 “Financial Statements” of this Quarterly Report for additional information. In addition, effective January 1, 2023, the Company restated its prior segment operating results for the three and nine months ended September 30, 2022, resulting in a reallocation of noninterest income ($3.0 million and $9.5 million, respectively) and noninterest expense ($4.0 million and $12.1 million, respectively) from the Consumer Banking segment to the Wholesale Banking segment. ​ As of September 30, 2023, the Company’s operating segments include the following: ​
| ● | Wholesale Banking: The Wholesale Banking segment provides loan and deposit services, as well as treasury management, and capital market services to wholesale customers primarily throughout Virginia, Maryland, North Carolina, and South Carolina. These customers include commercial real estate and commercial and industrial customers. This segment also includes the Company’s equipment finance subsidiary, which has nationwide exposure. The private banking and trust businesses also reside in the Wholesale Banking segment.
| ● | Consumer Banking: The Consumer Banking segment provides loan and deposit services to consumers and small businesses throughout Virginia, Maryland, and North Carolina. Consumer Banking includes the home loan division and investment management and advisory services businesses.
| ● | Corporate Other: Corporate Other includes the Company’s Corporate Treasury functions, such as management of the investment securities portfolio, long-term debt, short-term liquidity and funding activities, balance sheet risk management, and other corporate support functions, as well as intercompany eliminations.
​ Segment Reporting Methodology ​ The Company’s segment reporting is based on a “management approach” as described in Note 1 “Summary of Significant Accounting Policies” of the Company’s 2022 Form 10-K. Inter-segment transactions are recorded at cost and eliminated as part of the consolidation process. A management fee for operations and administrative support services is charged to all subsidiaries and eliminated in the consolidated totals. For additional information on the methodologies used in preparing the operating segment results, refer to Note 17 “Segment Reporting and Revenue” in the Company’s 2022 Form 10-K. ​ Segment Results ​ The following tables present the Company’s operating segment results for the three months and nine months ended September 30, 2023 and 2022 (dollars in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Wholesale Banking | ​ | Consumer Banking | ​ | Corporate Other (1) | ​ | Total
Three Months Ended September 30, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income | ​ | $ | 68,049 | ​ | $ | 63,912 | ​ | $ | 19,980 | ​ | $ | 151,941
Provision for credit losses | ​ |  | 9,310 | ​ | ​ | (4,319) | ​ | ​ | — | ​ | ​ | 4,991
Net interest income after provision for credit losses | ​ |  | 58,739 | ​ | ​ | 68,231 | ​ | ​ | 19,980 | ​ | ​ | 146,950
Noninterest income | ​ |  | 9,468 | ​ | ​ | 13,722 | ​ | ​ | 3,904 | ​ | ​ | 27,094
Noninterest expenses | ​ |  | 40,039 | ​ | ​ | 54,994 | ​ | ​ | 13,475 | ​ | ​ | 108,508
Income before income taxes | ​ | $ | 28,168 | ​ | $ | 26,959 | ​ | $ | 10,409 | ​ | $ | 65,536
Three Months Ended September 30, 2022 (2) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income | ​ | $ | 77,625 | ​ | $ | 58,749 | ​ | $ | 14,341 | ​ | $ | 150,715
Provision for credit losses | ​ |  | 8,470 | ​ | ​ | (2,058) | ​ | ​ | — | ​ | ​ | 6,412
Net interest income after provision for credit losses | ​ |  | 69,155 | ​ | ​ | 60,807 | ​ | ​ | 14,341 | ​ | ​ | 144,303
Noninterest income | ​ |  | 8,453 | ​ | ​ | 11,939 | ​ | ​ | 5,192 | ​ | ​ | 25,584
Noninterest expenses | ​ |  | 40,164 | ​ | ​ | 54,740 | ​ | ​ | 5,019 | ​ | ​ | 99,923
Income before income taxes | ​ | $ | 37,444 | ​ | $ | 18,006 | ​ | $ | 14,514 | ​ | $ | 69,964
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Wholesale Banking | ​ | Consumer Banking | ​ | Corporate Other (1) | ​ | Total
Nine Months Ended September 30, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income | ​ | $ | 201,722 | ​ | $ | 190,806 | ​ | $ | 64,941 | ​ | $ | 457,469
Provision for credit losses | ​ |  | 25,853 | ​ | ​ | (2,947) | ​ | ​ | 5 | ​ | ​ | 22,911
Net interest income after provision for credit losses | ​ |  | 175,869 | ​ | ​ | 193,753 | ​ | ​ | 64,936 | ​ | ​ | 434,558
Noninterest income | ​ |  | 25,743 | ​ | ​ | 38,188 | ​ | ​ | (3,013) | ​ | ​ | 60,918
Noninterest expenses | ​ |  | 123,207 | ​ | ​ | 168,971 | ​ | ​ | 30,264 | ​ | ​ | 322,442
Income before income taxes | ​ | $ | 78,405 | ​ | $ | 62,970 | ​ | $ | 31,659 | ​ | $ | 173,034
Nine Months Ended September 30, 2022 (2) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income | ​ | $ | 221,979 | ​ | $ | 157,918 | ​ | $ | 40,516 | ​ | $ | 420,413
Provision for credit losses | ​ |  | 12,844 | ​ | ​ | (100) | ​ | ​ | 27 | ​ | ​ | 12,771
Net interest income after provision for credit losses | ​ |  | 209,135 | ​ | ​ | 158,018 | ​ | ​ | 40,489 | ​ | ​ | 407,642
Noninterest income | ​ |  | 25,967 | ​ | ​ | 45,135 | ​ | ​ | 22,921 | ​ | ​ | 94,023
Noninterest expenses | ​ |  | 118,216 | ​ | ​ | 165,523 | ​ | ​ | 20,273 | ​ | ​ | 304,012
Income before income taxes | ​ | $ | 116,886 | ​ | $ | 37,630 | ​ | $ | 43,137 | ​ | $ | 197,653
(1) For the three and nine months ended September 30, 2023, noninterest expenses include $8.7 million ($8.7 million included within other expenses and ($67,000) included within salaries and benefits) and $12.6 million ($9.8 million included within other expenses and $2.8 million included within salaries and benefits), respectively, in expenses associated with strategic cost saving initiatives, principally composed of severance costs related to headcount reductions, costs related to modifying certain third-party vendor contracts, and charges for exiting certain leases. (2) As discussed above, the segment operating results for the three and nine months ended September 30, 2022 include a reallocation from Consumer Banking to Wholesale Banking. ​ The following table presents the Company’s operating segment results for key balance sheet metrics as of September 30, 2023 and December 31, 2022 (dollars in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Wholesale Banking | ​ | Consumer Banking | ​ | Corporate Other | ​ | Total
As of September 30, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
LHFI, net of deferred fees and costs (1) | ​ | $ | 12,343,799 | ​ | $ | 2,953,367 | ​ | $ | (13,546) | ​ | $ | 15,283,620
Goodwill | ​ | ​ | 639,180 | ​ | ​ | 286,031 | ​ | ​ | — | ​ | ​ | 925,211
Deposits | ​ | ​ | 6,537,472 | ​ | ​ | 9,726,079 | ​ | ​ | 522,954 | ​ | ​ | 16,786,505
As of December 31, 2022 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
LHFI, net of deferred fees and costs (1)(2) | ​ | $ | 11,476,258 | ​ | $ | 2,990,017 | ​ | $ | (17,133) | ​ | $ | 14,449,142
Goodwill (3) | ​ | ​ | 639,180 | ​ | ​ | 286,031 | ​ | ​ | — | ​ | ​ | 925,211
Deposits (4) | ​ | ​ | 6,128,729 | ​ | ​ | 9,724,598 | ​ | ​ | 78,350 | ​ | ​ | 15,931,677
(1) Corporate Other includes acquisition accounting fair value adjustments. (2) Wholesale Banking includes a $136.6 million reallocation from Consumer Banking due to the January 1, 2023 organizational change discussed above. (3) Wholesale Banking includes a $9.6 million reallocation from Consumer Banking due to the January 1, 2023 organizational change discussed above. (4) Wholesale Banking includes a $258.7 million reallocation from Consumer Banking due to the January 1, 2023 organizational change discussed above. ​ Revenue ​ The majority of the Company’s noninterest income is being accounted for in accordance with ASC 606, Revenue from Contracts with Customers and comes from short term contracts associated with fees for services provided on deposit accounts and credit cards from the Consumer and Wholesale Banking segments, as well as fiduciary and asset management fees from the Consumer Banking and Wholesale Banking segments. R efer to Note 17 “Segment Reporting and Revenue” in the Company’s 2022 Form 10-K for additional information on the Company’s contract balances, performance obligations, and mortgage banking income. ​ Noninterest income disaggregated by major source for the three and nine months ended September 30, 2023 and 2022, consisted of the following (dollars in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended |  | Nine Months Ended
​ | ​ | September 30, | ​ | September 30, |  | September 30, | ​ | September 30,
​ | ​ | 2023 | ​ | 2022 |  | 2023 | ​ | 2022
Noninterest income: |  | ​ |  |  | ​ |  | ​ | ​ |  |  | ​ |
Deposit Service Charges (1): |  | ​ |  |  | ​ |  | ​ | ​ |  |  | ​ |
Overdraft fees | ​ | $ | 5,210 | ​ | $ | 3,831 | ​ | $ | 14,873 | ​ | $ | 14,130
Maintenance fees & other | ​ |  | 3,347 | ​ |  | 2,953 | ​ |  | 9,704 | ​ |  | 8,291
Other service charges, commissions, and fees (1) | ​ |  | 2,632 | ​ |  | 1,770 | ​ |  | 6,071 | ​ |  | 5,134
Interchange fees(1) | ​ |  | 2,314 | ​ |  | 2,461 | ​ |  | 7,098 | ​ |  | 6,539
Fiduciary and asset management fees (1): | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Trust asset management fees | ​ |  | 3,120 | ​ |  | 3,035 | ​ |  | 9,329 | ​ |  | 9,726
Registered advisor management fees | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 5,088
Brokerage management fees | ​ |  | 1,429 | ​ |  | 1,099 | ​ |  | 3,840 | ​ |  | 3,515
Mortgage banking income | ​ |  | 666 | ​ |  | 1,390 | ​ |  | 1,969 | ​ |  | 6,707
Loss on sale of securities | ​ | ​ | (27,594) | ​ | ​ | — | ​ | ​ | (40,992) | ​ | ​ | (2)
Bank owned life insurance income | ​ |  | 2,973 | ​ |  | 3,445 | ​ |  | 8,671 | ​ |  | 8,858
Loan-related interest rate swap fees | ​ |  | 2,695 | ​ |  | 2,050 | ​ |  | 6,450 | ​ |  | 8,510
Other operating income (2) | ​ |  | 30,302 | ​ |  | 3,550 | ​ |  | 33,905 | ​ |  | 17,527
Total noninterest income | ​ | $ | 27,094 | ​ | $ | 25,584 | ​ | $ | 60,918 | ​ | $ | 94,023
(1) Income within scope of ASC 606, Revenue from Contracts with Customers. (2) Includes a $27.7 million gain related to the sale-leaseback transaction for the three and nine months ended September 30, 2023, and a $9.1 million gain related to the sale of DHFB for the nine months ended September 30, 2022. ​ ​ The following tables present noninterest income disaggregated by reportable operating segment for the three and nine months ended September 30, 2023 and 2022 (dollars in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Wholesale Banking | ​ | Consumer Banking | ​ | Corporate Other (1)(2) | ​ | Total
Three Months Ended September 30, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Noninterest income: | ​ |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Deposit service charges | ​ | ​ | $ | 2,184 | ​ | $ | 6,373 | ​ | $ | — | ​ | $ | 8,557
Other service charges and fees | ​ | ​ | ​ | 399 | ​ | ​ | 2,233 | ​ | ​ | — | ​ | ​ | 2,632
Fiduciary and asset management fees | ​ | ​ | ​ | 3,050 | ​ | ​ | 1,499 | ​ | ​ | — | ​ | ​ | 4,549
Mortgage banking income | ​ | ​ | ​ | — | ​ | ​ | 666 | ​ | ​ | — | ​ | ​ | 666
Other income | ​ | ​ | ​ | 3,835 | ​ | ​ | 2,951 | ​ | ​ | 3,904 | ​ | ​ | 10,690
Total noninterest income | ​ | ​ | $ | 9,468 | ​ | $ | 13,722 | ​ | $ | 3,904 | ​ | $ | 27,094
Three Months Ended September 30, 2022 (3) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Noninterest income: | ​ |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Deposit service charges | ​ | ​ | $ | 1,783 | ​ | $ | 5,001 | ​ | $ | — | ​ | $ | 6,784
Other service charges and fees | ​ | ​ | ​ | 513 | ​ | ​ | 1,257 | ​ | ​ | — | ​ | ​ | 1,770
Fiduciary and asset management fees | ​ | ​ | ​ | 2,960 | ​ | ​ | 1,174 | ​ | ​ | — | ​ | ​ | 4,134
Mortgage banking income | ​ | ​ | ​ | — | ​ | ​ | 1,390 | ​ | ​ | — | ​ | ​ | 1,390
Other income | ​ | ​ | ​ | 3,197 | ​ | ​ | 3,117 | ​ | ​ | 5,192 | ​ | ​ | 11,506
Total noninterest income | ​ | ​ | $ | 8,453 | ​ | $ | 11,939 | ​ | $ | 5,192 | ​ | $ | 25,584
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Wholesale Banking | ​ | Consumer Banking | ​ | Corporate Other (1)(2) | ​ | Total
Nine Months Ended September 30, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Noninterest income: | ​ |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Deposit service charges | ​ | ​ | $ | 6,268 | ​ | $ | 18,309 | ​ | $ | — | ​ | $ | 24,577
Other service charges and fees | ​ | ​ | ​ | 1,140 | ​ | ​ | 4,931 | ​ | ​ | — | ​ | ​ | 6,071
Fiduciary and asset management fees | ​ | ​ | ​ | 9,118 | ​ | ​ | 4,051 | ​ | ​ | — | ​ | ​ | 13,169
Mortgage banking income | ​ | ​ | ​ | — | ​ | ​ | 1,969 | ​ | ​ | — | ​ | ​ | 1,969
Other income | ​ | ​ | ​ | 9,217 | ​ | ​ | 8,928 | ​ | ​ | (3,013) | ​ | ​ | 15,132
Total noninterest income | ​ | ​ | $ | 25,743 | ​ | $ | 38,188 | ​ | $ | (3,013) | ​ | $ | 60,918
Nine Months Ended September 30, 2022 (3) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Noninterest income: | ​ |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Deposit service charges | ​ | ​ | $ | 4,990 | ​ | $ | 17,431 | ​ | $ | — | ​ | $ | 22,421
Other service charges and fees | ​ | ​ | ​ | 1,342 | ​ | ​ | 3,792 | ​ | ​ | — | ​ | ​ | 5,134
Fiduciary and asset management fees | ​ | ​ | ​ | 9,501 | ​ | ​ | 8,828 | ​ | ​ | — | ​ | ​ | 18,329
Mortgage banking income | ​ | ​ | ​ | — | ​ | ​ | 6,707 | ​ | ​ | — | ​ | ​ | 6,707
Other income | ​ | ​ | ​ | 10,134 | ​ | ​ | 8,377 | ​ | ​ | 22,921 | ​ | ​ | 41,432
Total noninterest income | ​ | ​ | $ | 25,967 | ​ | $ | 45,135 | ​ | $ | 22,921 | ​ | $ | 94,023
(1) For the three and nine months ended September 30, 2022, other income primarily includes a $9.1 million gain related to the sale of DHFB and income from BOLI. (2) For the three and nine months ended September 30, 2023, other income primarily includes a $27.7 million gain related to the sale-leaseback transaction, losses incurred on the sale of AFS securities ($27.6 million and $41.0 million, respectively), and income from BOLI. (3) As discussed above, noninterest income for the three and nine months ended September 30, 2022 includes a reallocation from Consumer Banking to Wholesale Banking. ​

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