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Note 22 - Segments
 9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

(22)

Segments

 

Bancorp’s principal activities are divided into two reportable segments, Commercial Banking and WM&T, which are delineated based on the products and services that each segment offers:

 

Commercial Banking provides a full range of loan and deposit products to individual consumers and businesses through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, credit card services, and other banking services. Bancorp also offers securities brokerage services via its banking center network through an arrangement with a third party broker-dealer in the Commercial Banking segment. 

 

WM&T provides investment management, financial & retirement planning and trust & estate services, as well as retirement plan management for businesses and corporations in all markets in which Bancorp operates. The magnitude of WM&T revenue distinguishes Bancorp from other community banks of similar asset size.

 

Bancorp’s Commercial Banking and WM&T segments overlap a regional reporting structure. These regions are based on the primary geographic markets in which Bancorp operates, specifically Louisville, central, eastern and northern Kentucky, and the Indianapolis, Indiana and Cincinnati, Ohio MSAs. All regions share the same lines of business, including the same products, services and delivery methods, as well as similar customer bases and pricing guidelines.

 

Financial information for each business segment reflects that which is specifically identifiable or allocated based on an internal allocation method. Income taxes are allocated based on the effective federal income tax rate adjusted for any tax-exempt activity. All tax-exempt activity and provision have been allocated fully to the commercial banking segment. Measurement of performance of business segments is based on the management structure of Bancorp and is not necessarily comparable with similar information for any other financial institution. Information presented is also not necessarily indicative of the segments’ operations if they were independent entities.

 

Bancorp’s chief executive officer is the chief operating decision maker. The financial results by operating segment, including significant expense categories provided to the chief operating decision maker, help measure the profitability of a particular segment and identify trends, evaluate each segment and its impact on consolidated earnings, and enhance decision making processes related to the allocation of Bancorp’s resources.

 

The majority of the net assets of Bancorp are associated with in the Commercial Banking segment. As of September 30, 2025, goodwill totaling $194 million was recorded on Bancorp’s consolidated balance sheets, of which $172 million is attributed to the commercial banking segment and $22 million is attributed to WM&T. The portion of total goodwill attributed to WM&T relates entirely to the CB acquisition, which generated $67 million in total goodwill, $8.5 million of which was subsequently written off as a result of Bancorp selling its interest in LFA effective December 31, 2022. With the exception of goodwill attributed to WM&T through the CB acquisition, assets assigned to WM&T consist primarily of a CLI asset associated with the WM&T business added through the CB acquisition, net premises and equipment and a receivable related to fees earned that have not been collected.

 

WM&T AUM, which are a primary driver of WM&T revenue, are not included on the consolidated balance sheets of Bancorp. WM&T AUM totaled $7.48 billion and $7.07 billion as of September 30, 2025 and December 31, 2024, respectively.

 

Financial results by operating segment, including significant expense categories provided to the chief operating decision maker, are detailed below:

 

   

Three months ended September 30, 2025

    

Three months ended September 30, 2024

  
   

Commercial

                   

Commercial

                 

(in thousands)

  

Banking

   

WM&T

    

Total

   

Banking

   

WM&T

    

Total

 

Net interest income

   $ 76,759     $ 278     $ 77,037     $ 64,711     $ 268     $ 64,979  

Provision for credit losses

     1,975       —       1,975       4,325       —       4,325  

Net interest income after provision expense

     74,784       278       75,062       60,386       268       60,654  

Non-interest income:

                                                

Wealth management and trust services

     —       10,704       10,704       —       10,931       10,931  

All other non-interest income

     13,772       —       13,772       13,866       —       13,866  

Total non-interest income

     13,772       10,704       24,476       13,866       10,931       24,797  

Non-interest expenses:

                                                

Compensation and employee benefits

     28,840       4,874       33,714       25,949       4,214       30,163  

Net occupancy and equipment

     3,841       245       4,086       3,723       52       3,775  

Technology and communication

     4,414       423       4,837       4,126       374       4,500  

Intangible amortization

     573       342       915       672       380       1,052  

Other direct and indirect/allocated expenses

     9,746       533       10,279       8,526       436       8,962  

Total non-interest expenses

     47,414       6,417       53,831       42,996       5,456       48,452  

Income before income tax expense

     41,142       4,565       45,707       31,256       5,743       36,999  

Income tax expense

     8,475       991       9,466       6,393       1,246       7,639  

Net income

   $ 32,667     $ 3,574     $ 36,241     $ 24,863     $ 4,497     $ 29,360  
                                                 

Total assets

   $ 9,273,951     $ 33,425     $ 9,307,376     $ 8,403,147     $ 34,133     $ 8,437,280  

 

 

   

Nine months ended September 30, 2025

    

Nine months ended September 30, 2024

  
   

Commercial

                   

Commercial

                 

(in thousands)

  

Banking

   

WM&T

    

Total

   

Banking

   

WM&T

    

Total

 

Net interest income

   $ 220,216     $ 846     $ 221,062     $ 186,295     $ 776     $ 187,071  

Provision for credit losses

     5,050       —       5,050       7,050       —       7,050  

Net interest income after provision expense

     215,166       846       216,012       179,245       776       180,021  

Non-interest income:

                                                

Wealth management and trust services

     —       31,834       31,834       —       32,497       32,497  

All other non-interest income

     39,986       —       39,986       39,226       —       39,226  

Total non-interest income

     39,986       31,834       71,820       39,226       32,497       71,723  

Non-interest expenses:

                                                

Compensation and employee benefits

     83,302       14,738       98,040       77,364       12,616       89,980  

Net occupancy and equipment

     11,498       736       12,234       10,717       547       11,264  

Technology and communication

     12,566       1,872       14,438       12,585       1,878       14,463  

Intangible amortization

     1,718       1,026       2,744       2,015       1,140       3,155  

Other direct and indirect/allocated expenses

     28,545       1,557       30,102       25,923       1,737       27,660  

Total non-interest expenses

     137,629       19,929       157,558       128,604       17,918       146,522  

Income before income tax expense

     117,523       12,751       130,274       89,867       15,355       105,222  

Income tax expense

     23,971       2,767       26,738       19,045       3,332       22,377  

Net income

   $ 93,552     $ 9,984     $ 103,536     $ 70,822     $ 12,023     $ 82,845  
                                                 

Total assets

   $ 9,273,951     $ 33,425     $ 9,307,376     $ 8,403,147     $ 34,133     $ 8,437,280