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Business Segments
 9 Months Ended
Sep. 30, 2014
Segment Reporting [Abstract]  
Business Segments

10. 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 40 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. 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, 2014  
     Centers      Treasury      Other     Eliminations     Total  
     (Dollars in thousands)  

Interest income, including loan fees

    $ 36,723       $ 18,397       $ 10,175      $ —        $ 65,295   

Credit for funds provided (1)

      8,190         —           12,037        (20,227 )      —     
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Total interest income

      44,913         18,397         22,212        (20,227 )      65,295   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Interest expense

      1,637         2,415         5        —          4,057   

Charge for funds used (1)

      1,490         14,374         4,363        (20,227 )      —     
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Total interest expense

      3,127         16,789         4,368        (20,227 )      4,057   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Net interest income

      41,786         1,608         17,844        —          61,238   

Provision for loan losses

      —           —           (1,000 )      —          (1,000 ) 
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

      41,786         1,608         18,844        —          62,238   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Noninterest income

      5,288         —           2,721        —          8,009   

Noninterest expense

      12,373         186         19,922        —          32,481   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Segment pre-tax profit

    $ 34,701       $ 1,422       $ 1,643      $ —        $ 37,766   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Segment assets as of September 30, 2014

    $ 6,089,389       $ 3,431,467       $ 789,656      $ (2,887,663 )    $ 7,422,849   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

 

(1) Credit for funds provided and charges for funds used are eliminated in the condensed consolidated presentation.

 

     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         —          10,667        (17,449 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total interest income

      42,806         13,443        19,274        (17,449 )      58,074   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Interest expense

      1,551         2,435        115        —          4,101   

Charge for funds used (1)

      919         11,595        4,935        (17,449 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total interest expense

      2,470         14,030        5,050        (17,449 )      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 charges for funds used are eliminated in the condensed consolidated presentation.

       
     For the Nine Months Ended September 30, 2014  
     Centers      Treasury     Other     Eliminations     Total  
     (Dollars in thousands)  

Interest income, including loan fees

    $ 105,212       $ 52,504      $ 29,857      $ —        $ 187,573   

Credit for funds provided (1)

      22,924         —          34,914        (57,838 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total interest income

      128,136         52,504        64,771        (57,838 )      187,573   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Interest expense

      4,835         7,178        221        —          12,234   

Charge for funds used (1)

      3,817         40,607        13,414        (57,838 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total interest expense

      8,652         47,785        13,635        (57,838 )      12,234   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

      119,484         4,719        51,136        —          175,339   

Provision for loan losses

      —           —          (16,100 )      —          (16,100 ) 
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

      119,484         4,719        67,236        —          191,439   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Noninterest income

      15,232         —          11,325        —          26,557   

Noninterest expense

      35,723         564        58,675        —          94,962   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Segment pre-tax profit

    $ 98,993       $ 4,155      $ 19,886      $ —        $ 123,034   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Segment assets as of September 30, 2014

    $ 6,089,389       $ 3,431,467      $ 789,656      $ (2,887,663 )    $ 7,422,849   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

(1)    Credit for funds provided and charges for funds used are eliminated in the condensed 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         —          31,052        (50,655 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total interest income

      126,263         37,872        60,000        (50,655 )      173,480   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Interest expense

      4,495         7,270        558        —          12,323   

Charge for funds used (1)

      3,025         32,973        14,657        (50,655 )      —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total interest expense

      7,520         40,243        15,215        (50,655 )      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   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Segment pre-tax profit

    $ 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 charges for funds used are eliminated in the condensed consolidated presentation.