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Business Segments
 3 Months Ended
Mar. 31, 2012
Business Segments [Abstract]  
BUSINESS SEGMENTS
6. BUSINESS SEGMENTS

The Company has identified two principal reportable segments: Business Financial and Commercial Banking Centers (“Centers”) and the Treasury Department. The Company’s subsidiary bank has 42 Business Financial Centers and five Commercial Banking Centers organized in geographic regions, which are the focal points for customer sales and services. The Company utilizes an internal reporting system to measure the performance of various operating segments within the Bank which is the basis for determining the Bank’s reportable segments. The chief operating decision maker (currently our CEO) regularly reviews the financial information of these segments in deciding how to allocate resources and assessing performance. Business Financial and Commercial Banking Centers are considered one operating segment as their products and services are similar and are sold to similar types of customers, have similar production and distribution processes, have similar economic characteristics, and have similar reporting and organizational structures. The Treasury Department’s primary focus is managing the Bank’s investments, liquidity, and interest rate risk. Information related to the Company’s remaining operating segments, which include construction lending, dairy and livestock lending, SBA lending, leasing, and centralized functions have been aggregated and included in “Other.” In addition, the Company allocates internal funds transfer pricing to the segments using a methodology that charges users of funds interest expense and credits providers of funds interest income with the net effect of this allocation being recorded in administration.

The following table represents the selected financial information for these two business segments. GAAP does not have an authoritative body of knowledge regarding the management accounting used in presenting segment financial information. The accounting policies for each of the business units is the same as those policies identified for the consolidated Company and identified in the summary of significant accounting policies, Note 1. The income numbers represent the actual income and expenses of each business unit. In addition, each segment has allocated income and expenses based on management’s internal reporting system, which allows management to determine the performance of each of its business units. Loan fees, included in the Centers category are the actual loan fees paid to the Company by its customers. These fees are eliminated and deferred in the “Other” category, resulting in deferred loan fees for the consolidated financial statements. All income and expense items not directly associated with the two business segments are grouped in the “Other” category. Future changes in the Company’s management structure or reporting methodologies may result in changes in the measurement of operating segment results.

 

The following tables present the operating results and other key financial measures for the individual operating segments for the three months ended March 31, 2012 and 2011:

 

                                         
    Three Months Ended March 31, 2012  
    Centers     Treasury     Other     Eliminations     Total  
    (Dollars in thousands)  
           

Interest income, including loan fees

   $ 37,671     $ 15,363     $ 13,031     $ —       $ 66,065  

Credit for funds provided (1)

     6,347       —         2,600       (8,947 )      —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total interest income

     44,018       15,363       15,631       (8,947 )      66,065  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           

Interest expense

     2,051       4,548       864       —         7,463  

Charge for funds used (1)

     1,097       10,028       (2,178 )      (8,947 )      —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total interest expense

     3,148       14,576       (1,314 )      (8,947 )      7,463  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

     40,870       787       16,945       —         58,602  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Provision for credit losses

     —         —         —                 —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for credit losses

     40,870       787       16,945       —         58,602  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           

Noninterest income

     5,983       —         (727 )      —         5,256  

Noninterest expenses

     11,898       195       18,119       —         30,212  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           

Segment pretax profit (loss)

   $ 34,955     $ 592     ($ 1,901 )    $ —       $ 33,646  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           

Segment assets as of March 31, 2012

   $ 4,838,109     $ 2,749,505     $ 922,575     ($ 2,004,106 )    $ 6,506,083  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

                                         
    Three Months Ended March 31, 2011  
    Centers     Treasury     Other     Eliminations     Total  
    (Dollars in thousands)  
           

Interest income, including loan fees

   $ 39,439     $ 15,221     $ 11,852     $ —       $ 66,512  

Credit for funds provided (1)

     6,026       —         2,688       (8,714 )      —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total interest income

     45,465       15,221       14,540       (8,714 )      66,512  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           

Interest expense

     3,268       5,291       844       —         9,403  

Charge for funds used (1)

     1,286       8,302       (874 )      (8,714 )      —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total interest expense

     4,554       13,593       (30 )      (8,714 )      9,403  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

     40,911       1,628       14,570       —         57,109  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Provision for credit losses

     —         —         7,068               7,068  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for credit losses

     40,911       1,628       7,502       —         50,041  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           

Noninterest income

     5,212       —         4,766       —         9,978  

Noninterest expenses

     12,631       216       23,458       —         36,305  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           

Segment pretax profit (loss)

   $ 33,492     $ 1,412     ($ 11,190 )    $ —       $ 23,714  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
           

Segment assets as of March 31, 2011

   $ 4,903,546     $ 2,540,188     $ 724,182     $ (1,669,564 )    $ 6,498,352  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(1) Credit for funds provided and charged for funds used is eliminated in the consolidated presentation.