19. SEGMENT INFORMATION

We 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, and specialized skills.

The Banking Operations segment includes construction and real estate development lending, commercial lending, residential mortgage lending, 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 - Summary of Significant Accounting Policies to the consolidated financial statements in the Annual Report on Form 10-K, as amended by our Form 10-K/A for the year ended December 31, 2017 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 and assets are provided in the following table for the periods indicated.



(dollars in thousands)	Banking Operations			Treasury			All Others			Total
Three Months Ended March 31, 2018
Net interest income	$	36,142		$	6,180		$	—		$	42,322
Inter-segment net interest income (expense)	6,921			(5,449		)	(1,472		)	—
Credit for loan and lease losses	211			—			—			211
Other operating income:
Mortgage banking income	993			—			854			1,847
Service charges on deposit accounts	2,003			—			—			2,003
Other service charges and fees	1,143			6			1,885			3,034
Income from fiduciary activities	956			—			—			956
Equity in earnings of unconsolidated subsidiaries	43			—			—			43
Fees on foreign exchange	24			187			—			211
Income from bank-owned life insurance	—			318			—			318
Loan placement fees	197			—			—			197
Other	155			—			190			345
Other operating income	5,514			511			2,929			8,954
Other operating expense	(15,925		)	(385		)	(17,208		)	(33,518		)
Administrative and overhead expense allocation	(14,946		)	(223		)	15,169			—
Income before taxes	17,917			634			(582		)	17,969
Income tax (expense) benefit	(3,681		)	(130		)	119			(3,692		)
Net income (loss)	$	14,236		$	504		$	(463	)	$	14,277



(dollars in thousands)	Banking Operations			Treasury			All Others			Total
Three Months Ended March 31, 2017
Net interest income	$	34,090		$	7,165		$	—		$	41,255
Inter-segment net interest income (expense)	7,927			(6,190		)	(1,737		)	—
Credit for loan and lease losses	80			—			—			80
Other operating income:
Mortgage banking income	1,120			—			823			1,943
Service charges on deposit accounts	2,035			1			—			2,036
Other service charges and fees	838			—			1,910			2,748
Income from fiduciary activities	864			—			—			864
Equity in earnings of unconsolidated subsidiaries	61			—			—			61
Fees on foreign exchange	18			129			16			163
Income from bank-owned life insurance	—			1,117			—			1,117
Loan placement fees	134			—			—			134
Net gain (loss) sale of foreclosed assets	—			—			102			102
Other	654			14			178			846
Other operating income	5,724			1,261			3,029			10,014
Other operating expense	(15,018		)	(388		)	(16,054		)	(31,460		)
Administrative and overhead expense allocation	(13,704		)	(202		)	13,906			—
Income before taxes	19,099			1,646			(856		)	19,889
Income tax (expense) benefit	(6,540		)	(564		)	294			(6,810		)
Net income (loss)	$	12,559		$	1,082		$	(562	)	$	13,079



(dollars in thousands)	Banking Operations		Treasury		All Others		Total
March 31, 2018
Investment securities	$	—	$	1,503,923	$	—	$	1,503,923
Loans and leases (including loans held for sale)	3,823,638		—		—		3,823,638
Other	41,427		210,042		72,257		323,726
Total assets	$	3,865,065	$	1,713,965	$	72,257	$	5,651,287



(dollars in thousands)	Banking Operations		Treasury		All Others		Total
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