v3.26.1
Note 22 - Segments
 3 Months Ended
Mar. 31, 2026
Notes to Financial Statements  
Segment Reporting [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. Other direct and indirect/allocated expenses include legal and professional fees, advertising and business development costs as well as other miscellaneous expenses. Measurement of performance for 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. Bancorp evaluates performance and allocates resources based on a reportable segment’s net income.

 

The majority of the net assets of Bancorp are associated with in the Commercial Banking segment. As of March 31, 2026, 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.

 

WM&T AUM, which are a primary driver of WM&T revenue, are not included on the consolidated balance sheets of Bancorp. WM&T AUM totaled $7.60 billion and $7.64 billion as of March 31, 2026 and December 31, 2025, respectively.

 

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

 

   

Three months ended March 31, 2026

    

Three months ended March 31, 2025

  
   

Commercial

                   

Commercial

                 

(in thousands)

  

Banking

   

WM&T

    

Total

   

Banking

   

WM&T

    

Total

 

Interest income

   $ 117,374     $ 268     $ 117,642     $ 110,887     $ 279     $ 111,166  

Interest expense

     39,221       —       39,221       40,614       —       40,614  

Net interest income

     78,153       268       78,421       70,273       279       70,552  

Provision for credit losses

     1,625       —       1,625       900       —       900  

Net interest income after provision expense

     76,528       268       76,796       69,373       279       69,652  

Non-interest income:

                                                

Wealth management and trust services

     —       11,335       11,335       —       10,647       10,647  

All other non-interest income

     13,259       —       13,259       12,349       —       12,349  

Total non-interest income

     13,259       11,335       24,594       12,349       10,647       22,996  

Non-interest expenses:

                                                

Compensation and employee benefits

     30,211       5,124       35,335       26,810       4,907       31,717  

Net occupancy and equipment

     4,067       253       4,320       3,878       245       4,123  

Technology and communication

     4,600       735       5,335       4,086       742       4,828  

Intangible amortization

     495       304       799       572       342       914  

Other direct and indirect/allocated expenses

     8,926       527       9,453       8,992       453       9,445  

Total non-interest expenses

     48,299       6,943       55,242       44,338       6,689       51,027  

Income before income tax expense

     41,488       4,660       46,148       37,384       4,237       41,621  

Income tax expense

     8,542       1,011       9,553       7,430       920       8,350  

Net income

   $ 32,946     $ 3,649     $ 36,595     $ 29,954     $ 3,317     $ 33,271  
                                                 

Total assets

   $ 9,433,888     $ 32,968     $ 9,466,856     $ 8,963,765     $ 33,713     $ 8,997,478