XML 62 R16.htm IDEA: XBRL DOCUMENT v2.4.0.8
Business Segments
 9 Months Ended
Sep. 30, 2013
Segment Reporting [Abstract]  
Business Segments

9. 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 39 Business Financial Centers and six 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 to assess 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 & livestock lending, leasing, CitizensTrust, 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 disclosed in Note 3 - Summary of Significant Accounting Policies. 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 periods indicated:

 

     For the Three Months Ended September 30, 2013  
     Centers      Treasury     Other     Eliminations     Total  
     (Dollars in thousands)  

Interest income, including loan fees

    $ 36,024       $ 13,443      $ 8,607      $ —        $ 58,074   

Credit for funds provided (1)

      6,782         —          2,617        (9,399 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total interest income

      42,806         13,443        11,224        (9,399 )      58,074   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Interest expense

      1,551         2,435        115        —          4,101   

Charge for funds used (1)

      919         11,595        (3,115 )      (9,399 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total interest expense

      2,470         14,030        (3,000 )      (9,399 )      4,101   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

      40,336         (587 )      14,224        —          53,973   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Provision for loan losses

      —           —          (3,750 )      —          (3,750 ) 
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

      40,336         (587 )      17,974        —          57,723   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Noninterest income

      5,306         —          (349 )      —          4,957   

Noninterest expense

      11,514         178        14,022        —          25,714   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Segment pre-tax profit (loss)

    $ 34,128       $ (765 )    $ 3,603      $ —        $ 36,966   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Segment assets as of September 30, 2013

    $ 5,305,357       $ 2,855,964      $ 732,999      $ (2,337,037 )    $ 6,557,283   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

 

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

 

     For the Three Months Ended September 30, 2012  
     Centers      Treasury     Other     Eliminations     Total  
     (Dollars in thousands)  

Interest income, including loan fees

    $ 38,122       $ 13,263      $ 14,460      $ —        $ 65,845   

Credit for funds provided (1)

      6,403         —          2,608        (9,011 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total interest income

      44,525         13,263        17,068        (9,011 )      65,845   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Interest expense

      1,665         3,819        617        —          6,101   

Charge for funds used (1)

      992         10,309        (2,290 )      (9,011 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total interest expense

      2,657         14,128        (1,673 )      (9,011 )      6,101   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

      41,868         (865 )      18,741        —          59,744   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Provision for loan losses

      —           —          —          —          —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

      41,868         (865 )      18,741        —          59,744   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Noninterest income

      5,798         —          (3,172 )      —          2,626   

Noninterest expense

      10,874         176        18,591        —          29,641   

Debt termination

      —           20,379        —          —          20,379   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Segment pre-tax profit (loss)

    $ 36,792       $ (21,420 )    $ (3,022 )    $ —        $ 12,350   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Segment assets as of September 30, 2012

    $ 5,084,218       $ 2,604,648      $ 739,153      $ (2,106,678 )    $ 6,321,341   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

 

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

 

     For the Nine Months Ended September 30, 2013  
     Centers      Treasury     Other     Eliminations     Total  
     (Dollars in thousands)  

Interest income, including loan fees

    $ 106,660       $ 37,872      $ 28,948      $ —        $ 173,480   

Credit for funds provided (1)

      19,603         —          7,485        (27,088 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total interest income

      126,263         37,872        36,433        (27,088 )      173,480   

Interest expense

      4,495         7,270        558        —          12,323   

Charge for funds used (1)

      3,025         32,973        (8,910 )      (27,088 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total interest expense

      7,520         40,243        (8,352 )      (27,088 )      12,323   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

      118,743         (2,371 )      44,785        —          161,157   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Provision for loan losses

      —           —          (9,950 )      —          (9,950 ) 
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

      118,743         (2,371 )      54,735        —          171,107   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Noninterest income

      15,889         2,094        1,414        —          19,397   

Noninterest expense

      34,410         539        49,811        —          84,760   

Debt termination

      —           —          —          —          —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Segment pre-tax profit (loss)

    $ 100,222       $ (816 )    $ 6,338      $ —        $ 105,744   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Segment assets as of September 30, 2013

    $ 5,305,357       $ 2,855,964      $ 732,999      $ (2,337,037 )    $ 6,557,283   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

 

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

 

     For the Nine Months Ended September 30, 2012  
     Centers      Treasury     Other     Eliminations     Total  
     (Dollars in thousands)  

Interest income, including loan fees

    $ 113,366       $ 43,609      $ 45,114      $ —        $ 202,089   

Credit for funds provided (1)

      19,027         —          7,758        (26,785 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total interest income

      132,393         43,609        52,872        (26,785 )      202,089   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Interest expense

      5,581         12,936        2,266        —          20,783   

Charge for funds used (1)

      3,133         30,435        (6,783 )      (26,785 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total interest expense

      8,714         43,371        (4,517 )      (26,785 )      20,783   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

      123,679         238        57,389        —          181,306   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Provision for loan losses

      —           —          —          —          —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

      123,679         238        57,389        —          181,306   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Noninterest income

      17,588         —          (7,414 )      —          10,174   

Noninterest expense

      34,069         557        54,176        —          88,802   

Debt termination

      —           20,379        —          —          20,379   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Segment pre-tax profit (loss)

    $ 107,198       $ (20,698 )    $ (4,201 )    $ —        $ 82,299   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Segment assets as of September 30, 2012

    $ 5,084,218       $ 2,604,648      $ 739,153      $ (2,106,678 )    $ 6,321,341   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

 

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