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Business Segments
 12 Months Ended
Dec. 31, 2013
Segment Reporting [Abstract]  
Business Segments

20. 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 Year Ended December 31, 2013  
    Centers     Treasury     Other     Eliminations     Total  
    (Dollars in thousands)  

Interest income, including loan fees

     $ 141,177        $ 53,234        $ 38,362        $ —          $ 232,773   

Credit for funds provided (1)

     26,754        —          41,987        (68,741 )      —     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total interest income

     167,931        53,234        80,349        (68,741 )      232,773   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest expense

     6,138        9,700        670        —          16,507   

Charge for funds used (1)

     3,874        45,269        19,598        (68,741 )      —     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total interest expense

     10,012        54,969        20,268        (68,741 )      16,507   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

     157,919        (1,735 )      60,081        —          216,266   

Provision for loan losses

     —          —          (16,750 )      —          (16,750 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

     157,919        (1,735 )      76,831        —          233,016   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Noninterest income

     20,907        2,094        2,286        —          25,287   

Noninterest expense

     45,831        714        67,483        —          114,028   

Debt termination

     —          —          —          —          —     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Segment pre-tax profit (loss)

     $ 132,995        $ (355 )      $ 11,634        $ —          $ 144,275   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Segment assets as of December 31, 2013

     $   5,407,434        $   2,866,760        $   709,348        $   (2,318,576 )      $   6,664,967   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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

 

    For the Year Ended December 31, 2012  
    Centers     Treasury     Other     Eliminations     Total  
    (Dollars in thousands)  

Interest income, including loan fees

     $ 150,071        $ 56,559        $ 55,592        $ —          $ 262,222   

Credit for funds provided (1)

     25,764        —          31,505        (57,269 )      —     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total interest income

     175,835        56,559        87,097        (57,269 )      262,222   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest expense

     7,162        15,396        2,714        —          25,272   

Charge for funds used (1)

     4,142        41,270        11,857        (57,269 )      —     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total interest expense

     11,304        56,666        14,571        (57,269 )      25,272   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

     164,531        (107 )      72,526        —          236,950   

Provision for loan losses

     —          —          —          —          —     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

     164,531        (107 )      72,526        —          236,950   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Noninterest income

     23,020        —          (7,117 )      —          15,903   

Noninterest expense

     45,189        729        71,863        —          117,781   

Debt termination

     —          20,379        —          —          20,379   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Segment pre-tax profit (loss)

     $ 142,362        $ (21,215 )      $ (6,454 )      $ —          $ 114,693   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Segment assets as of December 31, 2012

     $   5,198,393        $   2,642,445        $   635,827        $   (2,113,301 )      $   6,363,364   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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

 

    For the Year Ended December 31, 2011  
    Centers     Treasury     Other     Eliminations     Total  
    (Dollars in thousands)  

Interest income, including loan fees

     $ 157,376        $ 62,732        $ 49,612        $ —          $ 269,720   

Credit for funds provided (1)

     24,811        —          39,621        (64,432 )      —     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total interest income

     182,187        62,732        89,233        (64,432 )      269,720   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest expense

     10,411        21,258        3,370        —          35,039   

Charge for funds used (1)

     4,884        35,128        24,420        (64,432 )      —     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total interest expense

     15,295        56,386        27,790        (64,432 )      35,039   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

     166,892        6,346        61,443        —          234,681   

Provision for loan losses

     —          —          7,068        —          7,068   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

     166,892        6,346        54,375        —          227,613   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Noninterest income

     21,622        (655 )      13,249        —          34,216   

Noninterest expense

     49,802        4,117        87,106        —          141,025   

Debt termination

     —          —          —          —          —     
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Segment pre-tax profit (loss)

     $ 138,712        $ 1,574        $ (19,482 )      $ —          $ 120,804   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Segment assets as of December 31, 2011

     $   5,003,093        $   2,650,201        $   689,710        $   (1,860,089 )      $   6,482,915   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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