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SEGMENT INFORMATION
 12 Months Ended
Dec. 31, 2014
SEGMENT INFORMATION  
SEGMENT INFORMATION

 

25.SEGMENT INFORMATION

 

We have the following three reportable segments: Banking Operations, Treasury and All Others. The 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, consumer 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 includes 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 those described in Note 1. 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)

 

Year ended December 31, 2014:

 

 

 

 

 

 

 

 

 

Net interest income

 

$
108,815

 

$
34,603

 

$

—

 

$
143,418

 

Intersegment net interest income (expense)

 
34,308

 
(33,356

)
(952

)

—

 

Credit (provision) for loan and lease losses

 
6,414

 

—

 

—

 
6,414

 

Other operating income

 
24,496

 
4,042

 
15,285

 
43,823

 

Other operating expense

 
(60,587

)
(2,086

)
(70,140

)
(132,813

)

Administrative and overhead expense allocation

 
(59,610

)
(1,126

)
60,736

 

—

 

Income taxes

 
(18,843

)
(727

)
(819

)
(20,389

)

Net income

 

$
34,993

 

$
1,350

 

$
4,110

 

$
40,453

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2014:

 

 

 

 

 

 

 

 

 

Investment securities

 

$

—

 

$
1,467,305

 

$

—

 

$
1,467,305

 

Loans and leases (including loans held for sale)

 
2,941,881

 

—

 

—

 
2,941,881

 

Other

 
111,071

 
248,455

 
84,275

 
443,801

 

Total assets

 

$
3,052,952

 

$
1,715,760

 

$
84,275

 

$
4,852,987

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2013:

 

 

 

 

 

 

 

 

 

Net interest income

 

$
101,282

 

$
31,827

 

$

—

 

$
133,109

 

Intersegment net interest income (expense)

 
16,947

 
(30,675

)
13,728

 

—

 

Credit (provision) for loan and lease losses

 
11,310

 

—

 

—

 
11,310

 

Other operating income

 
26,140

 
3,137

 
25,668

 
54,945

 

Other operating expense

 
(58,891

)
(3,788

)
(76,857

)
(139,536

)

Administrative and overhead expense allocation

 
(54,851

)
(2,004

)
56,855

 

—

 

Income taxes

 
117,088

 
218

 
(5,059

)
112,247

 

Net income (loss)

 

$
159,025

 

$
(1,285

)

$
14,335

 

$
172,075

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2013:

 

 

 

 

 

 

 

 

 

Investment securities

 

$

—

 

$
1,660,046

 

$

—

 

$
1,660,046

 

Loans and leases (including loans held for sale)

 
2,642,971

 

—

 

—

 
2,642,971

 

Other

 
117,655

 
256,807

 
63,719

 
438,181

 

Total assets

 

$
2,760,626

 

$
1,916,853

 

$
63,719

 

$
4,741,198

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2012:

 

 

 

 

 

 

 

 

 

Net interest income

 

$
92,500

 

$
27,211

 

$

—

 

$
119,711

 

Intersegment net interest income (expense)

 
34,018

 
(22,229

)
(11,789

)

—

 

Credit (provision) for loan and lease losses

 
18,885

 

—

 

—

 
18,885

 

Other operating income

 
32,062

 
4,135

 
24,546

 
60,743

 

Other operating expense

 
(61,130

)
(1,728

)
(89,060

)
(151,918

)

Administrative and overhead expense allocation

 
(70,592

)
(1,033

)
71,625

 

—

 

Net income (loss)

 

$
45,743

 

$
6,356

 

$
(4,678

)

$
47,421