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Business Segments
 3 Months Ended
Mar. 31, 2016
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 Bank has 44 Business Financial Centers and eight 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 tables represent 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, 2015. 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, 2016  
    Centers     Treasury     Other     Eliminations     Total  
    (Dollars in thousands)  

Interest income, including loan fees

     $ 36,504         $ 18,757         $ 9,239          $ -              $ 64,500    

Credit for funds provided (1)

     8,697         -             13,681          (22,378)         -        
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total interest income

     45,201         18,757         22,920          (22,378)         64,500    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Interest expense

     1,680         184         120          -              1,984    

Charge for funds used (1)

     1,287         15,349         5,742          (22,378)         -        
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total interest expense

     2,967         15,533         5,862          (22,378)         1,984    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income

     42,234         3,224         17,058          -              62,516    

Provision for loan losses

     -             -             -              -              -        
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision for loan losses

     42,234         3,224         17,058          -              62,516    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Noninterest income

     4,827         -             3,856          -              8,683    

Noninterest expense

     12,610         216         21,538          -              34,364    

Debt termination expense

     -             -             -              -              -        
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Segment pre-tax profit (loss)

     $ 34,451         $ 3,008         $ (624)         $ -              $ 36,835    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Segment assets as of March 31, 2016

     $     6,602,994         $     3,417,737         $     976,032          $   (3,075,927)         $     7,920,836    
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

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

 

    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 (loss)

     $ 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.