26. 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 - Summary of Significant Accounting Policies. 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 net income (loss) 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, 2017
Net interest income	$	140,077		$	27,626		$	—		$	167,703
Intersegment net interest income (expense)	32,977			(25,000		)	(7,977		)	—
Credit (provision) for loan and lease losses	2,674			—			—			2,674
Other operating income	22,511			2,448			11,537			36,496
Other operating expense	(60,939		)	(1,433		)	(69,445		)	(131,817		)
Administrative and overhead expense allocation	(61,082		)	(972		)	62,054			—
Income taxes	(34,376		)	(1,204		)	1,728			(33,852		)
Net income (loss)	$	41,842		$	1,465		$	(2,103	)	$	41,204

Balance as of December 31, 2017
Investment securities	$	—		$	1,496,644		$	—		$	1,496,644
Loans and leases (including loans held for sale)	3,786,951			—			—			3,786,951
Other	42,243			228,608			69,262			340,113
Total assets	$	3,829,194		$	1,725,252		$	69,262		$	5,623,708



	Banking Operations			Treasury			All Others			Total
	(Dollars in thousands)
Year ended December 31, 2016
Net interest income	$	128,673		$	29,277		$	—		$	157,950
Intersegment net interest income (expense)	36,655			(26,618		)	(10,037		)	—
Credit (provision) for loan and lease losses	5,517			—			—			5,517
Other operating income	25,994			3,148			13,174			42,316
Other operating expense	(58,856		)	(1,616		)	(73,091		)	(133,563		)
Administrative and overhead expense allocation	(64,139		)	(918		)	65,057			—
Income taxes	(25,796		)	(1,143		)	1,711			(25,228		)
Net income	$	48,048		$	2,130		$	(3,186	)	$	46,992

Balance as of December 31, 2016
Investment securities	$	—		$	1,461,515		$	—		$	1,461,515
Loans and leases (including loans held for sale)	3,556,771			—			—			3,556,771
Other	56,482			241,387			68,081			365,950
Total assets	$	3,613,253		$	1,702,902		$	68,081		$	5,384,236



	Banking Operations			Treasury			All Others			Total
	(Dollars in thousands)
Year ended December 31, 2015
Net interest income	$	115,936		$	33,592		$	—		$	149,528
Intersegment net interest income (expense)	43,686			(31,576		)	(12,110		)	—
Credit (provision) for loan and lease losses	15,671			—			—			15,671
Other operating income	23,447			967			10,385			34,799
Other operating expense	(59,273		)	(1,859		)	(65,910		)	(127,042		)
Administrative and overhead expense allocation	(59,266		)	(1,042		)	60,308			—
Income taxes	(28,070		)	(29		)	1,011			(27,088		)
Net income (loss)	$	52,131		$	53		$	(6,316	)	$	45,868