| SEGMENT REPORTING |
NOTE 15: SEGMENT REPORTING For the three and nine months ended September 30, 2025 and 2024, the Company had two reportable business segments: Banking (FFB) and Wealth Management (FFA). The results of FFI and any elimination entries are included in the column labeled Other. The reportable segments are determined by products and services offered and the corporate structure. Business segment earnings before taxes are the primary measure of the segment’s performance as evaluated by management. Business segment earnings before taxes include direct revenue and expenses of the segment as well as corporate and inter-company cost allocations. Allocations of corporate expenses, such as finance and accounting, data processing and human resources are calculated based on estimated activity or usage levels. The management accounting process measures the performance of the operating segments based on the Company’s management structure and is not necessarily comparable with similar information for other financial services companies. If the management structures and/or the allocation process changes, allocations, transfers, and assignments may change. In accordance with ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, the significant expenses shown in the tables below are those that are regularly provided to the chief operating decision maker (“CODM”) who regularly uses them, along with other information in assessing the segments’ performance and in decisions regarding the allocation of resources. With respect to ASU 2023-07, the CODM for the Company is the Chief Executive Officer. The following tables show key operating results for each of our business segments used to arrive at our consolidated totals for the following periods: | | | | | | | | | | | | | | | | | | Wealth | | | | | | | (dollars in thousands) | | Banking | | Management | | Other | Total | Three Months Ended September 30, 2025: | | | | | | | | | | | | | Interest income | | $ | 134,737 | | $ | — | | $ | — | | $ | 134,737 | Interest expense | | | 86,686 | | | — | | | 1,973 | | | 88,659 | Net interest income | | | 48,051 | | | — | | | (1,973) | | | 46,078 | Provision for credit losses | | | 65,045 | | | — | | | — | | | 65,045 | Noninterest income | | | 10,834 | | | 7,033 | | | (348) | | | 17,519 | Noninterest expense | | | | | | | | | | | | | Compensation and benefits | | | 18,609 | | | 4,887 | | | 217 | | | 23,713 | Customer service costs | | | 9,068 | | | — | | | — | | | 9,068 | Professional services and marketing costs | | | 5,683 | | | 812 | | | 343 | | | 6,838 | Other | | | 16,849 | | | 679 | | | 335 | | | 17,863 | (Loss) income before income taxes | | | (56,369) | | | 655 | | | (3,216) | | | (58,930) | Income tax expense (benefit) | | | 79,775 | | | — | | | 7,618 | | | 87,393 | Net (loss) income | | $ | (136,144) | | $ | 655 | | $ | (10,834) | | $ | (146,323) | | | | | | | | | | | | | | Three Months Ended September 30, 2024: | | | | | | | | | | | | | Interest income | | $ | 157,156 | | $ | — | | $ | — | | $ | 157,156 | Interest expense | | | 106,317 | | | — | | | 1,720 | | | 108,037 | Net interest income | | | 50,839 | | | — | | | (1,720) | | | 49,119 | Provision (reversal) for credit losses | | | 282 | | | — | | | — | | | 282 | Noninterest income | | | 4,598 | | | 7,704 | | | (365) | | | 11,937 | LHFS LOCOM adjustment | | | (117,517) | | | — | | | — | | | (117,517) | Noninterest expense | | | | | | | | | | | | | Compensation and benefits | | | 15,688 | | | 4,154 | | | 167 | | | 20,009 | Customer service costs | | | 18,954 | | | — | | | — | | | 18,954 | Professional services and marketing costs | | | 3,298 | | | 994 | | | 803 | | | 5,095 | Other | | | 15,266 | | | 621 | | | 280 | | | 16,167 | (Loss) income before income taxes | | | (115,568) | | | 1,935 | | | (3,335) | | | (116,968) | Income tax (benefit) expense | | | (34,399) | | | 551 | | | (946) | | | (34,794) | Net (loss) income | | $ | (81,169) | | $ | 1,384 | | $ | (2,389) | | $ | (82,174) |
| | | | | | | | | | | | | | | | | | Wealth | | | | | | | (dollars in thousands) | | Banking | | Management | | Other | Total | Nine Months Ended September 30, 2025: | | | | | | | | | | | | | Interest income | | $ | 413,604 | | $ | — | | $ | — | | $ | 413,604 | Interest expense | | | 260,277 | | | — | | | 5,368 | | | 265,645 | Net interest income | | | 153,327 | | | — | | | (5,368) | | | 147,959 | Provision for credit losses | | | 70,828 | | | — | | | — | | | 70,828 | Noninterest income | | | 17,860 | | | 21,659 | | | (1,060) | | | 38,459 | Noninterest expense | | | | | | | | | | | | | Compensation and benefits | | | 56,952 | | | 15,733 | | | (974) | | | 71,711 | Customer service costs | | | 37,102 | | | — | | | — | | | 37,102 | Professional services and marketing costs | | | 16,022 | | | 2,849 | | | 1,113 | | | 19,984 | Other | | | 47,049 | | | 1,957 | | | 1,324 | | | 50,330 | (Loss) income before income taxes | | | (56,766) | | | 1,120 | | | (7,891) | | | (63,537) | Income tax expense (benefit) | | | 77,066 | | | 146 | | | 6,368 | | | 83,580 | Net (loss) income | | $ | (133,832) | | $ | 974 | | $ | (14,259) | | $ | (147,117) | | | | | | | | | | | | | | Nine Months Ended September 30, 2024: | | | | | | | | | | | | | Interest income | | $ | 458,523 | | $ | — | | $ | — | | $ | 458,523 | Interest expense | | | 322,059 | | | — | | | 5,130 | | | 327,189 | Net interest income | | | 136,464 | | | — | | | (5,130) | | | 131,334 | Provision (reversal) for credit losses | | | 53 | | | — | | | — | | | 53 | Noninterest income | | | 16,522 | | | 22,843 | | | (1,087) | | | 38,278 | LHFS LOCOM adjustment | | | (117,517) | | | — | | | — | | | (117,517) | Noninterest expense | | | | | | | | | | | | | Compensation and benefits | | | 45,681 | | | 12,328 | | | 502 | | | 58,511 | Customer service costs | | | 45,796 | | | — | | | — | | | 45,796 | Professional services and marketing costs | | | 8,486 | | | 2,821 | | | 845 | | | 12,152 | Other | | | 47,084 | | | 1,980 | | | 940 | | | 50,004 | (Loss) income before income taxes | | | (111,631) | | | 5,714 | | | (8,504) | | | (114,421) | Income tax (benefit) expense | | | (35,365) | | | 1,632 | | | (2,392) | | | (36,125) | Net (loss) income | | $ | (76,266) | | $ | 4,082 | | $ | (6,112) | | $ | (78,296) |
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