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SEGMENT INFORMATION
 6 Months Ended
Jun. 30, 2012
SEGMENT INFORMATION  
SEGMENT INFORMATION

18.  SEGMENT INFORMATION

 

Due to recent changes in our organizational structure, in the first quarter of 2012, we changed our reportable segments to better align our segments with how management reviews and monitors the performance of the Company’s financial results. We now have the following three reportable segments: Banking Operations, Treasury and All Others. These segments are consistent with our internal functional reporting lines and are managed separately because each unit has different target markets, technological requirements, marketing strategies and specialized skills.

 

The Banking Operations segment includes construction and real estate development lending, commercial lending, residential mortgage lending and servicing, indirect auto lending, trust services, retail brokerage services and our retail branch offices, which provide a full range of deposit and loan products, as well as various other banking services. The Treasury segment is responsible for managing the Company’s investment securities portfolio and wholesale funding activities. The All Others segment consists of all activities not captured by the Banking Operations or Treasury segments described above and includes activities such as electronic banking, data processing and management of bank owned properties.

 

The accounting policies of the segments are consistent with the Company’s accounting policies that are described in Note 1 to the consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2011 filed with the SEC. The majority of the Company’s net income is derived from net interest income. Accordingly, management focuses primarily on net interest income, rather than gross interest income and expense amounts, in evaluating segment profitability.

 

Intersegment net interest income (expense) was allocated to each segment based upon a funds transfer pricing process that assigns costs of funds to assets and earnings credits to liabilities based on market interest rates that reflect interest rate sensitivity and maturity characteristics. All administrative and overhead expenses are allocated to the segments at cost. Cash, investment securities, loans and leases and their related balances are allocated to the segment responsible for acquisition and maintenance of those assets. Segment assets also include all premises and equipment used directly in segment operations.

 

Segment profits (losses) and assets are provided in the following table for the periods indicated.

 

 

 

Banking

 

 

 

 

 

 

 

 

 

Operations

 

Treasury

 

All Others

 

Total

 

 

 

(Dollars in thousands)

 

Three months ended June 30, 2012:

 

 

 

 

 

 

 

 

 

Net interest income

 

$

22,994

 

$

7,265

 

$

—

 

$

30,259

 

Intersegment net interest income (expense)

 

10,059

 

(5,111

)

(4,948

)

—

 

Credit for loan and lease losses

 

6,630

 

—

 

—

 

6,630

 

Other operating income

 

12,365

 

1,452

 

(203

)

13,614

 

Other operating expense

 

(21,677

)

(500

)

(17,514

)

(39,691

)

Administrative and overhead expense allocation

 

(16,771

)

(266

)

17,037

 

—

 

Net income (loss)

 

$

13,600

 

$

2,840

 

$

(5,628

)

$

10,812

 

 

 

 

 

 

 

 

 

 

 

Three months ended June 30, 2011:

 

 

 

 

 

 

 

 

 

Net interest income

 

$

23,305

 

$

5,674

 

$

—

 

$

28,979

 

Intersegment net interest income (expense)

 

11,084

 

(5,074

)

(6,010

)

—

 

Credit for loan and lease losses

 

8,784

 

—

 

—

 

8,784

 

Other operating income

 

8,892

 

1,704

 

341

 

10,937

 

Other operating expense

 

(26,460

)

(138

)

(13,891

)

(40,489

)

Administrative and overhead expense allocation

 

(13,050

)

(127

)

13,177

 

—

 

Net income (loss)

 

$

12,555

 

$

2,039

 

$

(6,383

)

$

8,211

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 2012:

 

 

 

 

 

 

 

 

 

Net interest income

 

$

46,231

 

$

14,530

 

$

—

 

$

60,761

 

Intersegment net interest income (expense)

 

22,475

 

(10,968

)

(11,507

)

—

 

Credit for loan and lease losses

 

11,620

 

—

 

—

 

11,620

 

Other operating income

 

24,701

 

2,538

 

(393

)

26,846

 

Other operating expense

 

(43,521

)

(898

)

(30,518

)

(74,937

)

Administrative and overhead expense allocation

 

(29,525

)

(462

)

29,987

 

—

 

Net income (loss)

 

$

31,981

 

$

4,740

 

$

(12,431

)

$

24,290

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 2011:

 

 

 

 

 

 

 

 

 

Net interest income

 

$

47,729

 

$

9,451

 

$

—

 

$

57,180

 

Intersegment net interest income (expense)

 

21,510

 

(6,297

)

(15,213

)

—

 

Credit for loan and lease losses

 

10,359

 

—

 

—

 

10,359

 

Other operating income

 

19,267

 

3,343

 

827

 

23,437

 

Other operating expense

 

(51,906

)

(227

)

(25,993

)

(78,126

)

Administrative and overhead expense allocation

 

(24,752

)

(252

)

25,004

 

—

 

Net income (loss)

 

$

22,207

 

$

6,018

 

$

(15,375

)

$

12,850

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2012:

 

 

 

 

 

 

 

 

 

Investment securities

 

$

—

 

$

1,633,011

 

$

—

 

$

1,633,011

 

Loans and leases (including loans held for sale)

 

2,131,994

 

—

 

—

 

2,131,994

 

Other

 

24,527

 

348,556

 

88,982

 

462,065

 

Total assets

 

$

2,156,521

 

$

1,981,567

 

$

88,982

 

$

4,227,070

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2011:

 

 

 

 

 

 

 

 

 

Investment securities

 

$

—

 

$

1,493,925

 

$

—

 

$

1,493,925

 

Loans and leases (including loans held for sale)

 

2,114,737

 

—

 

—

 

2,114,737

 

Other

 

23,858

 

429,141

 

71,204

 

524,203

 

Total assets

 

$

2,138,595

 

$

1,923,066

 

$

71,204

 

$

4,132,865