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Business Segments
 3 Months Ended
Mar. 31, 2015
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 40 Business Financial Centers and seven 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 and agribusiness 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, included in our Annual Report on Form 10-K for the year ended December 31, 2014. 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 condensed 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 presented.

 

     For the Three Months Ended March 31, 2015  
     Centers      Treasury     Other      Eliminations     Total  
     (Dollars in thousands)  

Interest income, including loan fees

    $ 35,368       $ 18,655      $ 10,157       $ —        $ 64,180   

Credit for funds provided (1)

      8,211         —          12,641         (20,852 )      —     
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

  

Total interest income

   43,579      18,655      22,798      (20,852 )    64,180   
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

  

Interest expense

   1,663      1,431      77      —        3,171   

Charge for funds used (1)

   1,067      14,806      4,979      (20,852 )    —     
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

  

Total interest expense

   2,730      16,237      5,056      (20,852 )    3,171   
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

  

Net interest income

   40,849      2,418      17,742      —        61,009   

Provision for loan losses

   —        —        —        —        —     
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

  

Net interest income after provision for loan losses

   40,849      2,418      17,742      —        61,009   
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

  

Noninterest income

   5,067      —        2,944      —        8,011   

Noninterest expense

   11,849      213      18,540      —        30,602   

Debt termination expense

   —        13,870      —        —        13,870   
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

  

Segment pre-tax profit

 $ 34,067    $ (11,665 )  $ 2,146    $ —      $ 24,548   
  

 

 

     

 

 

    

 

 

     

 

 

    

 

 

  

Segment assets as of March 31, 2015

 $ 6,216,028    $ 3,450,529    $ 898,554    $ (3,122,160 )  $ 7,442,951   

 

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

 

     For the Three Months Ended March 31, 2014  
     Centers      Treasury      Other     Eliminations     Total  
     (Dollars in thousands)  

Interest income, including loan fees

    $ 33,091       $ 16,432       $ 11,539      $ —        $ 61,062   

Credit for funds provided (1)

      7,074         —           11,463        (18,537 )      —     
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Total interest income

   40,165      16,432      23,002      (18,537 )    61,062   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Interest expense

   1,637      2,373      110      —        4,120   

Charge for funds used (1)

   1,090      12,797      4,650      (18,537 )    —     
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Total interest expense

   2,727      15,170      4,760      (18,537 )    4,120   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Net interest income

   37,438      1,262      18,242      —        56,942   

Provision for loan losses

   —        —        (7,500 )    —        (7,500 ) 
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

   37,438      1,262      25,742      —        64,442   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Noninterest income

   4,782      —        6,716      —        11,498   

Noninterest expense

   11,828      196      19,133      —        31,157   

Debt termination expense

   —        —        —        —        —     
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Segment pre-tax profit

 $ 30,392    $ 1,066    $ 13,325    $ —      $ 44,783   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

Segment assets as of March 31, 2014

 $ 5,525,494    $ 3,264,736    $ 843,026    $ (2,730,738 )  $ 6,902,518   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

  

 

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