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Note 22 - Segments
 6 Months Ended
Jun. 30, 2025
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
 

(22)

Segments

 

Bancorp’s principal activities are divided into two reportable segments, Commercial Banking and WM&T, which are delineated based on the products and services that each segment offers:

 

Commercial Banking provides a full range of loan and deposit products to individual consumers and businesses through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, credit card services, and other banking services. Bancorp also offers securities brokerage services via its banking center network through an arrangement with a third party broker-dealer in the Commercial Banking segment. 

 

WM&T provides investment management, financial & retirement planning and trust & estate services, as well as retirement plan management for businesses and corporations in all markets in which Bancorp operates. The magnitude of WM&T revenue distinguishes Bancorp from other community banks of similar asset size.

 

Bancorp’s Commercial Banking and WM&T segments overlap a regional reporting structure. These regions are based on the primary geographic markets in which Bancorp operates, specifically Louisville, central, eastern and northern Kentucky, and the Indianapolis, Indiana and Cincinnati, Ohio MSAs. All regions share the same lines of business, including the same products, services and delivery methods, as well as similar customer bases and pricing guidelines.

 

Financial information for each business segment reflects that which is specifically identifiable or allocated based on an internal allocation method. Income taxes are allocated based on the effective federal income tax rate adjusted for any tax-exempt activity. All tax-exempt activity and provision have been allocated fully to the commercial banking segment. Measurement of performance of business segments is based on the management structure of Bancorp and is not necessarily comparable with similar information for any other financial institution. Information presented is also not necessarily indicative of the segments’ operations if they were independent entities.

 

Bancorp’s chief executive officer is the chief operating decision maker. The financial results by operating segment, including significant expense categories provided to the chief operating decision maker, help measure the profitability of a particular segment and identify trends, evaluate each segment and its impact on consolidated earnings, and enhance decision making processes related to the allocation of Bancorp’s resources.

 

The majority of the net assets of Bancorp are associated with in the Commercial Banking segment. As of June 30, 2025, goodwill totaling $194 million was recorded on Bancorp’s consolidated balance sheets, of which $172 million is attributed to the commercial banking segment and $22 million is attributed to WM&T. The portion of total goodwill attributed to WM&T relates entirely to the CB acquisition, which generated $67 million in total goodwill, $8.5 million of which was subsequently written off as a result of Bancorp selling its interest in LFA effective December 31, 2022. With the exception of goodwill attributed to WM&T through the CB acquisition, assets assigned to WM&T consist primarily of a CLI asset associated with the WM&T business added through the CB acquisition, net premises and equipment and a receivable related to fees earned that have not been collected.

 

WM&T AUM, which are the primary driver of WM&T revenue, are not included on the consolidated balance sheets of Bancorp. WM&T AUM totaled $7.19 billion and $7.07 billion as of June 30, 2025 and December 31, 2024, respectively.

 

 

Financial results by operating segment, including significant expense categories provided to the chief operating decision maker, are detailed below:

 

   

Three months ended June 30, 2025

    

Three months ended June 30, 2024

  
   

Commercial

                   

Commercial

                 

(in thousands)

  

Banking

   

WM&T

    

Total

   

Banking

   

WM&T

    

Total

 

Net interest income

   $ 73,184     $ 289     $ 73,473     $ 61,790     $ 232     $ 62,022  

Provision for credit losses

     2,175       —       2,175       1,300       —       1,300  

Net interest income after provision expense

     71,009       289       71,298       60,490       232       60,722  

Non-interest income:

                                                

Wealth management and trust services

     —       10,483       10,483       —       10,795       10,795  

All other non-interest income

     13,865       —       13,865       12,860       —       12,860  

Total non-interest income

     13,865       10,483       24,348       12,860       10,795       23,655  

Non-interest expenses:

                                                

Compensation and employee benefits

     27,652       4,957       32,609       25,520       4,200       29,720  

Net occupancy and equipment

     3,779       246       4,025       3,570       249       3,819  

Technology and communication

     4,066       707       4,773       4,102       792       4,894  

Intangible amortization

     573       342       915       671       380       1,051  

Other direct and indirect/allocated expenses

     9,807       571       10,378       8,767       858       9,625  

Total Non-interest expenses

     45,877       6,823       52,700       42,630       6,479       49,109  

Income before income tax expense

     38,997       3,949       42,946       30,720       4,548       35,268  

Income tax expense

     8,066       856       8,922       6,683       987       7,670  

Net income

   $ 30,931     $ 3,093     $ 34,024     $ 24,037     $ 3,561     $ 27,598  
                                                 

Total assets

   $ 9,175,503     $ 33,483     $ 9,208,986     $ 8,280,324     $ 35,001     $ 8,315,325  

 

 

   

Six months ended June 30, 2025

    

Six months ended June 30, 2024

  
   

Commercial

                   

Commercial

                 

(in thousands)

  

Banking

   

WM&T

    

Total

   

Banking

   

WM&T

    

Total

 

Net interest income

   $ 143,457     $ 568     $ 144,025     $ 121,584     $ 508     $ 122,092  

Provision for credit losses

     3,075       —       3,075       2,725       —       2,725  

Net interest income after provision expense

     140,382       568       140,950       118,859       508       119,367  

Non-interest income:

                                                

Wealth management and trust services

     —       21,130       21,130       —       21,566       21,566  

All other non-interest income

     26,214       —       26,214       25,360       —       25,360  

Total non-interest income

     26,214       21,130       47,344       25,360       21,566       46,926  

Non-interest expenses:

                                                

Compensation and employee benefits

     54,462       9,864       64,326       51,416       8,401       59,817  

Net occupancy and equipment

     7,657       491       8,148       6,994       495       7,489  

Technology and communication

     8,152       1,449       9,601       8,459       1,504       9,963  

Intangible amortization

     1,145       684       1,829       1,343       760       2,103  

Other direct and indirect/allocated expenses

     18,799       1,024       19,823       17,397       1,301       18,698  

Total Non-interest expenses

     90,215       13,512       103,727       85,609       12,461       98,070  

Income before income tax expense

     76,381       8,186       84,567       58,610       9,613       68,223  

Income tax expense

     15,496       1,776       17,272       12,652       2,086       14,738  

Net income

   $ 60,885     $ 6,410     $ 67,295     $ 45,958     $ 7,527     $ 53,485  
                                                 

Total assets

   $ 9,175,503     $ 33,483     $ 9,208,986     $ 8,280,324     $ 35,001     $ 8,315,325