SEGMENT REPORTING AND REVENUE (Tables)
|
9 Months Ended |
Sep. 30, 2023 |
Revenue from Contract with Customer [Abstract] |
|
Schedule of operating segment results |
The following tables present the Company’s operating segment results for the three months and nine months ended September 30, 2023 and 2022 (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale Banking |
|
Consumer Banking |
|
Corporate Other (1) |
|
Total |
Three Months Ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
68,049 |
|
$ |
63,912 |
|
$ |
19,980 |
|
$ |
151,941 |
Provision for credit losses |
|
|
9,310 |
|
|
(4,319) |
|
|
— |
|
|
4,991 |
Net interest income after provision for credit losses |
|
|
58,739 |
|
|
68,231 |
|
|
19,980 |
|
|
146,950 |
Noninterest income |
|
|
9,468 |
|
|
13,722 |
|
|
3,904 |
|
|
27,094 |
Noninterest expenses |
|
|
40,039 |
|
|
54,994 |
|
|
13,475 |
|
|
108,508 |
Income before income taxes |
|
$ |
28,168 |
|
$ |
26,959 |
|
$ |
10,409 |
|
$ |
65,536 |
Three Months Ended September 30, 2022 (2) |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
77,625 |
|
$ |
58,749 |
|
$ |
14,341 |
|
$ |
150,715 |
Provision for credit losses |
|
|
8,470 |
|
|
(2,058) |
|
|
— |
|
|
6,412 |
Net interest income after provision for credit losses |
|
|
69,155 |
|
|
60,807 |
|
|
14,341 |
|
|
144,303 |
Noninterest income |
|
|
8,453 |
|
|
11,939 |
|
|
5,192 |
|
|
25,584 |
Noninterest expenses |
|
|
40,164 |
|
|
54,740 |
|
|
5,019 |
|
|
99,923 |
Income before income taxes |
|
$ |
37,444 |
|
$ |
18,006 |
|
$ |
14,514 |
|
$ |
69,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale Banking |
|
Consumer Banking |
|
Corporate Other (1) |
|
Total |
Nine Months Ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
201,722 |
|
$ |
190,806 |
|
$ |
64,941 |
|
$ |
457,469 |
Provision for credit losses |
|
|
25,853 |
|
|
(2,947) |
|
|
5 |
|
|
22,911 |
Net interest income after provision for credit losses |
|
|
175,869 |
|
|
193,753 |
|
|
64,936 |
|
|
434,558 |
Noninterest income |
|
|
25,743 |
|
|
38,188 |
|
|
(3,013) |
|
|
60,918 |
Noninterest expenses |
|
|
123,207 |
|
|
168,971 |
|
|
30,264 |
|
|
322,442 |
Income before income taxes |
|
$ |
78,405 |
|
$ |
62,970 |
|
$ |
31,659 |
|
$ |
173,034 |
Nine Months Ended September 30, 2022 (2) |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
221,979 |
|
$ |
157,918 |
|
$ |
40,516 |
|
$ |
420,413 |
Provision for credit losses |
|
|
12,844 |
|
|
(100) |
|
|
27 |
|
|
12,771 |
Net interest income after provision for credit losses |
|
|
209,135 |
|
|
158,018 |
|
|
40,489 |
|
|
407,642 |
Noninterest income |
|
|
25,967 |
|
|
45,135 |
|
|
22,921 |
|
|
94,023 |
Noninterest expenses |
|
|
118,216 |
|
|
165,523 |
|
|
20,273 |
|
|
304,012 |
Income before income taxes |
|
$ |
116,886 |
|
$ |
37,630 |
|
$ |
43,137 |
|
$ |
197,653 |
(1) For the three and nine months ended September 30, 2023, noninterest expenses include $8.7 million ($8.7 million included within other expenses and ($67,000) included within salaries and benefits) and $12.6 million ($9.8 million included within other expenses and $2.8 million included within salaries and benefits), respectively, in expenses associated with strategic cost saving initiatives, principally composed of severance costs related to headcount reductions, costs related to modifying certain third-party vendor contracts, and charges for exiting certain leases.
(2) As discussed above, the segment operating results for the three and nine months ended September 30, 2022 include a reallocation from Consumer Banking to Wholesale Banking.
|
Schedule of operating segment results - balance sheet metrics |
The following table presents the Company’s operating segment results for key balance sheet metrics as of September 30, 2023 and December 31, 2022 (dollars in thousands):
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|
|
|
|
|
|
|
|
|
|
Wholesale Banking |
|
Consumer Banking |
|
Corporate Other |
|
Total |
As of September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
LHFI, net of deferred fees and costs (1) |
|
$ |
12,343,799 |
|
$ |
2,953,367 |
|
$ |
(13,546) |
|
$ |
15,283,620 |
Goodwill |
|
|
639,180 |
|
|
286,031 |
|
|
— |
|
|
925,211 |
Deposits |
|
|
6,537,472 |
|
|
9,726,079 |
|
|
522,954 |
|
|
16,786,505 |
As of December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
LHFI, net of deferred fees and costs (1)(2) |
|
$ |
11,476,258 |
|
$ |
2,990,017 |
|
$ |
(17,133) |
|
$ |
14,449,142 |
Goodwill (3) |
|
|
639,180 |
|
|
286,031 |
|
|
— |
|
|
925,211 |
Deposits (4) |
|
|
6,128,729 |
|
|
9,724,598 |
|
|
78,350 |
|
|
15,931,677 |
(1) Corporate Other includes acquisition accounting fair value adjustments.
(2) Wholesale Banking includes a $136.6 million reallocation from Consumer Banking due to the January 1, 2023 organizational change discussed above.
(3) Wholesale Banking includes a $9.6 million reallocation from Consumer Banking due to the January 1, 2023 organizational change discussed above.
(4) Wholesale Banking includes a $258.7 million reallocation from Consumer Banking due to the January 1, 2023 organizational change discussed above.
|
Schedule of Disaggregation of Revenue |
Noninterest income disaggregated by major source for the three and nine months ended September 30, 2023 and 2022, consisted of the following (dollars in thousands):
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|
|
|
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|
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|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposit Service Charges (1): |
|
|
|
|
|
|
|
|
|
|
|
|
Overdraft fees |
|
$ |
5,210 |
|
$ |
3,831 |
|
$ |
14,873 |
|
$ |
14,130 |
Maintenance fees & other |
|
|
3,347 |
|
|
2,953 |
|
|
9,704 |
|
|
8,291 |
Other service charges, commissions, and fees (1) |
|
|
2,632 |
|
|
1,770 |
|
|
6,071 |
|
|
5,134 |
Interchange fees(1) |
|
|
2,314 |
|
|
2,461 |
|
|
7,098 |
|
|
6,539 |
Fiduciary and asset management fees (1): |
|
|
|
|
|
|
|
|
|
|
|
|
Trust asset management fees |
|
|
3,120 |
|
|
3,035 |
|
|
9,329 |
|
|
9,726 |
Registered advisor management fees |
|
|
— |
|
|
— |
|
|
— |
|
|
5,088 |
Brokerage management fees |
|
|
1,429 |
|
|
1,099 |
|
|
3,840 |
|
|
3,515 |
Mortgage banking income |
|
|
666 |
|
|
1,390 |
|
|
1,969 |
|
|
6,707 |
Loss on sale of securities |
|
|
(27,594) |
|
|
— |
|
|
(40,992) |
|
|
(2) |
Bank owned life insurance income |
|
|
2,973 |
|
|
3,445 |
|
|
8,671 |
|
|
8,858 |
Loan-related interest rate swap fees |
|
|
2,695 |
|
|
2,050 |
|
|
6,450 |
|
|
8,510 |
Other operating income (2) |
|
|
30,302 |
|
|
3,550 |
|
|
33,905 |
|
|
17,527 |
Total noninterest income |
|
$ |
27,094 |
|
$ |
25,584 |
|
$ |
60,918 |
|
$ |
94,023 |
(1) Income within scope of ASC 606, Revenue from Contracts with Customers.
(2) Includes a $27.7 million gain related to the sale-leaseback transaction for the three and nine months ended September 30, 2023, and a $9.1 million gain related to the sale of DHFB for the nine months ended September 30, 2022.
|
Disaggregated noninterest income by segment |
The following tables present noninterest income disaggregated by reportable operating segment for the three and nine months ended September 30, 2023 and 2022 (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale Banking |
|
Consumer Banking |
|
Corporate Other (1)(2) |
|
Total |
Three Months Ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit service charges |
|
|
$ |
2,184 |
|
$ |
6,373 |
|
$ |
— |
|
$ |
8,557 |
Other service charges and fees |
|
|
|
399 |
|
|
2,233 |
|
|
— |
|
|
2,632 |
Fiduciary and asset management fees |
|
|
|
3,050 |
|
|
1,499 |
|
|
— |
|
|
4,549 |
Mortgage banking income |
|
|
|
— |
|
|
666 |
|
|
— |
|
|
666 |
Other income |
|
|
|
3,835 |
|
|
2,951 |
|
|
3,904 |
|
|
10,690 |
Total noninterest income |
|
|
$ |
9,468 |
|
$ |
13,722 |
|
$ |
3,904 |
|
$ |
27,094 |
Three Months Ended September 30, 2022 (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit service charges |
|
|
$ |
1,783 |
|
$ |
5,001 |
|
$ |
— |
|
$ |
6,784 |
Other service charges and fees |
|
|
|
513 |
|
|
1,257 |
|
|
— |
|
|
1,770 |
Fiduciary and asset management fees |
|
|
|
2,960 |
|
|
1,174 |
|
|
— |
|
|
4,134 |
Mortgage banking income |
|
|
|
— |
|
|
1,390 |
|
|
— |
|
|
1,390 |
Other income |
|
|
|
3,197 |
|
|
3,117 |
|
|
5,192 |
|
|
11,506 |
Total noninterest income |
|
|
$ |
8,453 |
|
$ |
11,939 |
|
$ |
5,192 |
|
$ |
25,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale Banking |
|
Consumer Banking |
|
Corporate Other (1)(2) |
|
Total |
Nine Months Ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit service charges |
|
|
$ |
6,268 |
|
$ |
18,309 |
|
$ |
— |
|
$ |
24,577 |
Other service charges and fees |
|
|
|
1,140 |
|
|
4,931 |
|
|
— |
|
|
6,071 |
Fiduciary and asset management fees |
|
|
|
9,118 |
|
|
4,051 |
|
|
— |
|
|
13,169 |
Mortgage banking income |
|
|
|
— |
|
|
1,969 |
|
|
— |
|
|
1,969 |
Other income |
|
|
|
9,217 |
|
|
8,928 |
|
|
(3,013) |
|
|
15,132 |
Total noninterest income |
|
|
$ |
25,743 |
|
$ |
38,188 |
|
$ |
(3,013) |
|
$ |
60,918 |
Nine Months Ended September 30, 2022 (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit service charges |
|
|
$ |
4,990 |
|
$ |
17,431 |
|
$ |
— |
|
$ |
22,421 |
Other service charges and fees |
|
|
|
1,342 |
|
|
3,792 |
|
|
— |
|
|
5,134 |
Fiduciary and asset management fees |
|
|
|
9,501 |
|
|
8,828 |
|
|
— |
|
|
18,329 |
Mortgage banking income |
|
|
|
— |
|
|
6,707 |
|
|
— |
|
|
6,707 |
Other income |
|
|
|
10,134 |
|
|
8,377 |
|
|
22,921 |
|
|
41,432 |
Total noninterest income |
|
|
$ |
25,967 |
|
$ |
45,135 |
|
$ |
22,921 |
|
$ |
94,023 |
(1) For the three and nine months ended September 30, 2022, other income primarily includes a $9.1 million gain related to the sale of DHFB and income from BOLI.
(2) For the three and nine months ended September 30, 2023, other income primarily includes a $27.7 million gain related to the sale-leaseback transaction, losses incurred on the sale of AFS securities ($27.6 million and $41.0 million, respectively), and income from BOLI.
(3) As discussed above, noninterest income for the three and nine months ended September 30, 2022 includes a reallocation from Consumer Banking to Wholesale Banking.
|