10/18/2021 | Press release | Distributed by Public on 10/18/2021 14:10
compared with 3Q20 Net Earnings of $167 million, diluted EPS of $1.01, and 2Q21 Net Earnings of $345 million, diluted EPS of $2.08 |
$1.45 | $234 million | 2.68% | 10.9% |
Net earningsper diluted common share
|
Net Earnings | Net interest margin ("NIM") |
Common Equity Tier 1 |
THIRD QUARTER HIGHLIGHTS¹ | ||
Net Interest Income and NIM |
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Net interest income remained stable at $555 million |
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NIM was 2.68%, compared with 3.06%, and continued to be significantly impacted by low interest rates and higher average money market balances of $12.7 billion, compared with $3.1 billion | |
Operating Performance |
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Pre-provision net revenue ("PPNR") was $272 million, down 2%, and adjusted PPNR² was $290 million, up 9% |
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Noninterest expense was $429 million, down 3%, and adjusted noninterest expense² was $432 million, down 2% | |
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The efficiency ratio² was 59.8%, compared with 62.2% | |
Loans and Credit Quality |
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Loans and leases were $50.7 billion, down $4.1 billion, or 7%; excluding PPP, loans and leases were $47.6 billion, down $0.3 billion, or 1% |
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Nonperforming assets3 were $324 million, or 0.7%, of loans (ex-PPP), compared with $372 million, or 0.8%, of loans (ex-PPP)
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The provision for credit losses was a negative $46 million, compared with a positive $55 million | |
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The allowance for credit losses was 1.1% of loans (ex-PPP), compared with 1.9% of loans (ex-PPP) | |
Capital |
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The CET1 capital ratio was 10.9%, compared with 10.4% |
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Common stock repurchases of $325 million, 5.8 million shares, or 3.6% of shares outstanding as of June 30, 2021 | |
Notable items |
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Net unrealized loss related to SBIC investment in Recursion Pharmaceuticals, Inc. of $24 million ($28 million fair value adjustment less $4 million reversal of an accrued success fee), compared with a net unrealized gain of $54 million ($63 million fair value adjustment less $9 million success fee accrual) in second quarter of 2021
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About 19,000 PPP loans were forgiven by the SBA, totaling $1.5 billion, which contributed $41 million of interest income through accelerated recognition of net unamortized deferred fees | |
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Deposits were $77.9 billion, up $10.8 billion, or 16%, resulting in a loan-to-deposit ratio of 65% |
CEO COMMENTARY |
Harris H. Simmons, Chairman and CEO of Zions Bancorporation, commented, "We are pleased with the quarter's financial results. Following several quarters of weak loan demand, we're particularly encouraged by the loan growth we reported during the quarter, which, excluding PPP loans, was 5.6% on an annualized basis. We also reported continued strong deposit growth at an annualized pace of 9.3%. Credit outcomes remained strong, with net recoveries at an annualized 0.01% of total loans, and one of the lowest gross charge-off rates in a number of years. These positive outcomes, together with an improving economic outlook, produced a $46 million reversal of loss reserves into income."
Mr. Simmons continued, "We're optimistic that, despite lingering supply chain issues and a tight labor market, the economy seems poised for continued growth over the next several quarters as, thanks to a great deal of government stimulus, consumers and most businesses are emerging from the pandemic in relatively strong condition."
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OPERATING PERFORMANCE3
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Net Interest Income and Margin
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||||||||||||||
3Q21 - 2Q21 | 3Q21 - 3Q20 | |||||||||||||
(In millions) | 3Q21 | 2Q21 | 3Q20 | $ | % | $ | % | |||||||
Interest and fees on loans | $ | 484 | $ | 492 | $ | 505 | $ | (8) | (2) | % | $ | (21) | (4) | % |
Interest on money market investments | 7 | 4 | 2 | 3 | 75 | 5 | NM | |||||||
Interest on securities | 78 | 74 | 74 | 4 | 5 | 4 | 5 | |||||||
Total interest income
|
569 | 570 | 581 | (1) | - | (12) | (2) | |||||||
Interest on deposits | 7 | 7 | 18 | - | - | (11) | (61) | |||||||
Interest on short- and long-term borrowings | 7 | 8 | 8 | (1) | (13) | (1) | (13) | |||||||
Total interest expense
|
14 | 15 | 26 | (1) | (7) | (12) | (46) | |||||||
Net interest income
|
$ | 555 | $ | 555 | $ | 555 | $ | - | - | $ | - | - | ||
bps | bps | |||||||||||||
Yield on interest-earning assets1
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2.75 | % | 2.86 | % | 3.20 | % | (11) | (45) | ||||||
Rate paid on total deposits and interest-bearing liabilities1
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0.07 | % | 0.08 | % | 0.15 | % | (1) | (8) | ||||||
Cost of total deposits1
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0.03 | % | 0.04 | % | 0.11 | % | (1) | (8) | ||||||
Net interest margin1
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2.68 | % | 2.79 | % | 3.06 | % | (11) | (38) |
Noninterest Income
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||||||||||||||
3Q21 - 2Q21 | 3Q21 - 3Q20 | |||||||||||||
(In millions) | 3Q21 | 2Q21 | 3Q20 | $ | % | $ | % | |||||||
Commercial account fees | $ | 34 | $ | 34 | $ | 32 | $ | - | - | % | $ | 2 | 6 | % |
Card fees | 25 | 24 | 21 | 1 | 4 | 4 | 19 | |||||||
Retail and business banking fees | 20 | 18 | 17 | 2 | 11 | 3 | 18 | |||||||
Loan-related fees and income | 27 | 21 | 32 | 6 | 29 | (5) | (16) | |||||||
Capital markets and foreign exchange fees | 17 | 17 | 16 | - | - | 1 | 6 | |||||||
Wealth management fees | 13 | 12 | 10 | 1 | 8 | 3 | 30 | |||||||
Other customer-related fees | 15 | 13 | 11 | 2 | 15 | 4 | 36 | |||||||
Customer-related fees
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151 | 139 | 139 | 12 | 9 | 12 | 9 | |||||||
Fair value and nonhedge derivative income (loss) | 2 | (5) | 8 | 7 | NM | (6) | (75) | |||||||
Dividends and other income | 9 | 8 | 6 | 1 | 13 | 3 | 50 | |||||||
Securities gains (losses), net | (23) | 63 | 4 | (86) | NM | (27) | NM | |||||||
Total noninterest income
|
$ | 139 | $ | 205 | $ | 157 | $ | (66) | (32) | $ | (18) | (11) |
Noninterest Expense
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3Q21 - 2Q21 | 3Q21 - 3Q20 | |||||||||||||
(In millions) | 3Q21 | 2Q21 | 3Q20 | $ | % | $ | % | |||||||
Salaries and employee benefits | $ | 285 | $ | 272 | $ | 269 | $ | 13 | 5 | % | $ | 16 | 6 | % |
Occupancy, net | 33 | 33 | 33 | - | - | - | - | |||||||
Furniture, equipment and software, net | 31 | 32 | 32 | (1) | (3) | (1) | (3) | |||||||
Other real estate expense, net | - | - | - | - | - | - | - | |||||||
Credit-related expense | 7 | 6 | 6 | 1 | 17 | 1 | 17 | |||||||
Professional and legal services | 16 | 17 | 12 | (1) | (6) | 4 | 33 | |||||||
Advertising | 4 | 4 | 7 | - | - | (3) | (43) | |||||||
FDIC premiums | 5 | 6 | 7 | (1) | (17) | (2) | (29) | |||||||
Other | 48 | 58 | 76 | (10) | (17) | (28) | (37) | |||||||
Total noninterest expense
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$ | 429 | $ | 428 | $ | 442 | $ | 1 | - | $ | (13) | (3) | ||
Adjusted noninterest expense 1
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$ | 432 | $ | 419 | $ | 440 | $ | 13 | 3 | $ | (8) | (2) |
Asset Quality
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3Q21 - 2Q21 | 3Q21 - 3Q20 | |||||||||||
(In millions) | 3Q21 | 2Q21 | 3Q20 | bps | bps | |||||||
Ratio of nonperforming assets1 to loans and leases and other real estate owned
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0.64 | % | 0.60 | % | 0.68 | % | 4 | (4) | ||||
Annualized ratio of net loan and lease charge-offs to average loans
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(0.01) | % | (0.02) | % | 0.38 | % | 1 | (39) | ||||
Ratio of total allowance for credit losses to loans1 and leases outstanding, at period end
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1.04 | % | 1.12 | % | 1.68 | % | (8) | (64) | ||||
Ratio of total allowance for credit losses to loans1 and leases outstanding (excluding PPP loans), at period end
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1.11 | % | 1.22 | % | 1.91 | % | (11) | (80) | ||||
$ | % | $ | % | |||||||||
Classified loans | $ | 1,397 | $ | 1,557 | $ | 1,639 | $ | (160) | (10)% | $ | (242) | (15)% |
Nonperforming assets2
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324 | 308 | 372 | 16 | 5 | (48) | (13) | |||||
Net loan and lease charge-offs (recoveries) | (1) | (2) | 52 | 1 | 50 | (53) | NM | |||||
Provision for credit losses | (46) | (123) | 55 | 77 | 63 | (101) | NM |
Loans and Leases
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3Q21 - 2Q21 | 3Q21 - 3Q20 | |||||||||||
(In millions) | 3Q21 | 2Q21 | 3Q20 | $ | % | $ | % | |||||
Loans held for sale | $ | 67 | $ | 66 | $ | 89 | $ | 1 | 2% | $ | (22) | (25)% |
Loans and leases: | ||||||||||||
Commercial - excluding PPP loans
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25,369 | 24,700 | 24,704 | 669 | 3 | 665 | 3 | |||||
Commercial - PPP loans
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3,080 | 4,461 | 6,810 | (1,381) | (31) | (3,730) | (55) | |||||
Commercial real estate
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12,153 | 12,108 | 12,027 | 45 | - | 126 | 1 | |||||
Consumer
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10,076 | 10,129 | 11,204 | (53) | (1) | (1,128) | (10) | |||||
Loans and leases, net of unearned income and fees | 50,678 | 51,398 | 54,745 | (720) | (1) | (4,067) | (7) | |||||
Less allowance for loan losses
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491 | 535 | 853 | (44) | (8) | (362) | (42) | |||||
Loans and leases held for investment, net of allowance
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$ | 50,187 | $ | 50,863 | $ | 53,892 | $ | (676) | (1) | $ | (3,705) | (7) |
Unfunded lending commitments and letters of credit | $ | 26,138 | $ | 25,689 | $ | 24,845 | $ | 449 | 2 | $ | 1,293 | 5 |
Deposits and Borrowed Funds
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3Q21 - 2Q21 | 3Q21 - 3Q20 | |||||||||||||
(In millions) | 3Q21 | 2Q21 | 3Q20 | $ | % | $ | % | |||||||
Noninterest-bearing demand | $ | 39,150 | $ | 38,128 | $ | 31,338 | $ | 1,022 | 3 | % | $ | 7,812 | 25 | % |
Interest-bearing: | ||||||||||||||
Savings and money market
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37,046 | 36,037 | 32,305 | 1,009 | 3 | 4,741 | 15 | |||||||
Time
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1,688 | 1,940 | 3,451 | (252) | (13) | (1,763) | (51) | |||||||
Total deposits | $ | 77,884 | $ | 76,105 | $ | 67,094 | $ | 1,779 | 2 | $ | 10,790 | 16 | ||
Borrowed funds: | ||||||||||||||
Federal funds purchased and other short-term borrowings | $ | 579 | $ | 741 | $ | 1,252 | $ | (162) | (22) | $ | (673) | (54) | ||
Long-term debt | 1,020 | 1,308 | 1,347 | (288) | (22) | (327) | (24) | |||||||
Total borrowed funds | $ | 1,599 | $ | 2,049 | $ | 2,599 | $ | (450) | (22) | $ | (1,000) | (38) |
Shareholders' Equity | ||||||||||||||
3Q21 - 2Q21 | 3Q21 - 3Q20 | |||||||||||||
(In millions, except share data) | 3Q21 | 2Q21 | 3Q20 | $ | % | $ | % | |||||||
Shareholders' equity: | ||||||||||||||
Preferred stock
|
$ | 440 | $ | 440 | $ | 566 | $ | - | - | % | $ | (126) | (22) | % |
Common stock and additional paid-in capital
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2,245 | 2,565 | 2,680 | (320) | (12) | (435) | (16) | |||||||
Retained earnings
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5,025 | 4,853 | 4,090 | 172 | 4 | 935 | 23 | |||||||
Accumulated other comprehensive income
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64 | 175 | 332 | (111) | (63) | (268) | (81) | |||||||
Total shareholders' equity | $ | 7,774 | $ | 8,033 | $ | 7,668 | $ | (259) | (3) | $ | 106 | 1 | ||
Capital distributions: | ||||||||||||||
Common dividends paid | $ | 62 | $ | 56 | $ | 56 | $ | 6 | 11 | $ | 6 | 11 | ||
Bank common stock repurchased | 325 | 100 | 50 | 225 | NM | 275 | NM | |||||||
Total capital distributed to common shareholders | $ | 387 | $ | 156 | $ | 106 | $ | 231 | NM | $ | 281 | NM | ||
shares | % | shares | % | |||||||||||
Weighted average diluted common shares outstanding (in thousands)
|
160,480 | 163,054 | 163,779 | (2,574) | (2) | % | (3,299) | (2) | % | |||||
Common shares outstanding, at period end (in thousands) | 156,530 | 162,248 | 164,009 | (5,718) | (4) | (7,479) | (5) |
Three Months Ended | ||||||||||
(In millions, except share, per share, and ratio data) |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
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BALANCE SHEET1
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Loans held for investment, net of allowance | $ | 50,187 | $ | 50,863 | $ | 52,826 | $ | 52,699 | $ | 53,892 |
Total assets | 88,306 | 87,208 | 85,121 | 81,479 | 78,357 | |||||
Deposits | 77,884 | 76,105 | 73,853 | 69,653 | 67,094 | |||||
Total shareholders' equity | 7,774 | 8,033 | 7,933 | 7,886 | 7,668 | |||||
STATEMENT OF INCOME | ||||||||||
Net earnings applicable to common shareholders
|
$ | 234 | $ | 345 | $ | 314 | $ | 275 | $ | 167 |
Net interest income | 555 | 555 | 545 | 550 | 555 | |||||
Taxable-equivalent net interest income 2
|
562 | 562 | 553 | 557 | 562 | |||||
Total noninterest income | 139 | 205 | 169 | 166 | 157 | |||||
Total noninterest expense | 429 | 428 | 435 | 424 | 442 | |||||
Adjusted pre-provision net revenue 2
|
290 | 290 | 253 | 280 | 267 | |||||
Provision for credit losses | (46) | (123) | (132) | (67) | 55 | |||||
SHARE AND PER COMMON SHARE AMOUNTS | ||||||||||
Net earnings per diluted common share | $ | 1.45 | $ | 2.08 | $ | 1.90 | $ | 1.66 | $ | 1.01 |
Dividends | 0.38 | 0.34 | 0.34 | 0.34 | 0.34 | |||||
Book value per common share 1
|
46.85 | 46.80 | 44.98 | 44.61 | 43.30 | |||||
Tangible book value per common share 1, 2
|
40.37 | 40.54 | 38.77 | 38.42 | 37.11 | |||||
Weighted average share price | 54.78 | 55.86 | 51.34 | 36.86 | 32.09 | |||||
Weighted average diluted common shares outstanding (in thousands)
|
160,480 | 163,054 | 163,887 | 163,900 | 163,779 | |||||
Common shares outstanding (in thousands) 1
|
156,530 | 162,248 | 163,800 | 164,090 | 164,009 | |||||
SELECTED RATIOS AND OTHER DATA | ||||||||||
Return on average assets | 1.08 | % | 1.65 | % | 1.57 | % | 1.41 | % | 0.89 | % |
Return on average common equity | 12.3 | % | 18.6 | % | 17.4 | % | 15.3 | % | 9.4 | % |
Return on average tangible common equity 2
|
14.2 | % | 21.6 | % | 20.2 | % | 17.8 | % | 11.0 | % |
Net interest margin | 2.68 | % | 2.79 | % | 2.86 | % | 2.95 | % | 3.06 | % |
Cost of total deposits, annualized | 0.03 | % | 0.04 | % | 0.05 | % | 0.08 | % | 0.11 | % |
Efficiency ratio 2
|
59.8 | % | 59.1 | % | 63.5 | % | 60.2 | % | 62.2 | % |
Effective tax rate | 22.8 | % | 22.2 | % | 21.7 | % | 20.9 | % | 18.6 | % |
Ratio of nonperforming assets to loans and leases and other real estate owned
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0.64 | % | 0.60 | % | 0.61 | % | 0.69 | % | 0.68 | % |
Annualized ratio of net loan and lease charge-offs to average loans | (0.01) | % | (0.02) | % | 0.06 | % | 0.11 | % | 0.38 | % |
Ratio of total allowance for credit losses to loans and leases outstanding 1
|
1.04 | % | 1.12 | % | 1.30 | % | 1.56 | % | 1.68 | % |
Full-time equivalent employees
|
9,641 | 9,727 | 9,682 | 9,678 | 9,726 | |||||
CAPITAL RATIOS AND DATA 1
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Common equity tier 1 capital 3
|
$ | 6,236 | $ | 6,383 | $ | 6,206 | $ | 6,013 | $ | 5,804 |
Risk-weighted assets 3
|
57,459 | 56,339 | 55,402 | 55,866 | 55,654 | |||||
Tangible common equity ratio | 7.2 | % | 7.6 | % | 7.6 | % | 7.8 | % | 7.9 | % |
Common equity tier 1 capital ratio 3
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10.9 | % | 11.3 | % | 11.2 | % | 10.8 | % | 10.4 | % |
Tier 1 leverage ratio 3
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7.6 | % | 8.0 | % | 8.3 | % | 8.3 | % | 8.3 | % |
Tier 1 risk-based capital ratio 3
|
11.6 | % | 12.1 | % | 12.2 | % | 11.8 | % | 11.4 | % |
Total risk-based capital ratio 3
|
13.6 | % | 14.2 | % | 14.5 | % | 14.1 | % | 13.7 | % |
(In millions, shares in thousands) |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
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(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||
ASSETS | ||||||||||
Cash and due from banks | $ | 597 | $ | 525 | $ | 576 | $ | 543 | $ | 576 |
Money market investments: | ||||||||||
Interest-bearing deposits | 9,442 | 10,086 | 8,427 | 1,074 | 856 | |||||
Federal funds sold and security resell agreements | 1,858 | 1,714 | 1,315 | 5,765 | 2,804 | |||||
Investment securities: | ||||||||||
Held-to-maturity1, at amortized cost
|
459 | 620 | 583 | 636 | 592 | |||||
Available-for-sale, at fair value | 20,461 | 18,170 | 16,644 | 15,731 | 14,662 | |||||
Trading account, at fair value | 305 | 181 | 189 | 266 | 198 | |||||
Total securities, net of allowance | 21,225 | 18,971 | 17,416 | 16,633 | 15,452 | |||||
Loans held for sale | 67 | 66 | 77 | 81 | 89 | |||||
Loans and leases, net of unearned income and fees | 50,678 | 51,398 | 53,472 | 53,476 | 54,745 | |||||
Less allowance for loan losses | 491 | 535 | 646 | 777 | 853 | |||||
Loans held for investment, net of allowance | 50,187 | 50,863 | 52,826 | 52,699 | 53,892 | |||||
Other noninterest-bearing investments | 868 | 895 | 815 | 817 | 830 | |||||
Premises, equipment and software, net | 1,282 | 1,239 | 1,236 | 1,209 | 1,187 | |||||
Goodwill and intangibles | 1,015 | 1,015 | 1,016 | 1,016 | 1,016 | |||||
Other real estate owned | 21 | 23 | 3 | 4 | 6 | |||||
Other assets | 1,744 | 1,811 | 1,414 | 1,638 | 1,649 | |||||
Total assets | $ | 88,306 | $ | 87,208 | $ | 85,121 | $ | 81,479 | $ | 78,357 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
Deposits: | ||||||||||
Noninterest-bearing demand | $ | 39,150 | $ | 38,128 | $ | 35,882 | $ | 32,494 | $ | 31,338 |
Interest-bearing: | ||||||||||
Savings and money market | 37,046 | 36,037 | 35,762 | 34,571 | 32,305 | |||||
Time | 1,688 | 1,940 | 2,209 | 2,588 | 3,451 | |||||
Total deposits | 77,884 | 76,105 | 73,853 | 69,653 | 67,094 | |||||
Federal funds purchased and other short-term borrowings
|
579 | 741 | 1,032 | 1,572 | 1,252 | |||||
Long-term debt | 1,020 | 1,308 | 1,299 | 1,336 | 1,347 | |||||
Reserve for unfunded lending commitments | 38 | 39 | 49 | 58 | 64 | |||||
Other liabilities | 1,011 | 982 | 955 | 974 | 932 | |||||
Total liabilities | 80,532 | 79,175 | 77,188 | 73,593 | 70,689 | |||||
Shareholders' equity: | ||||||||||
Preferred stock, without par value; authorized 4,400 shares | 440 | 440 | 566 | 566 | 566 | |||||
Common stock2 ($0.001 par value; authorized 350,000 shares) and additional paid-in capital
|
2,245 | 2,565 | 2,653 | 2,686 | 2,680 | |||||
Retained earnings | 5,025 | 4,853 | 4,566 | 4,309 | 4,090 | |||||
Accumulated other comprehensive income | 64 | 175 | 148 | 325 | 332 | |||||
Total shareholders' equity | 7,774 | 8,033 | 7,933 | 7,886 | 7,668 | |||||
Total liabilities and shareholders' equity | $ | 88,306 | $ | 87,208 | $ | 85,121 | $ | 81,479 | $ | 78,357 |
1 Held-to-maturity (approximate fair value)
|
$ | 461 | $ | 622 | $ | 584 | $ | 640 | $ | 596 |
2 Common shares (issued and outstanding)
|
156,530 | 162,248 | 163,800 | 164,090 | 164,009 |
(Unaudited) | Three Months Ended | |||||||||
(In millions, except share and per share amounts) |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
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Interest income: | ||||||||||
Interest and fees on loans | $ | 484 | $ | 492 | $ | 488 | $ | 499 | $ | 505 |
Interest on money market investments | 7 | 4 | 3 | 3 | 2 | |||||
Interest on securities | 78 | 74 | 71 | 69 | 74 | |||||
Total interest income | 569 | 570 | 562 | 571 | 581 | |||||
Interest expense: | ||||||||||
Interest on deposits | 7 | 7 | 9 | 13 | 18 | |||||
Interest on short- and long-term borrowings | 7 | 8 | 8 | 8 | 8 | |||||
Total interest expense | 14 | 15 | 17 | 21 | 26 | |||||
Net interest income | 555 | 555 | 545 | 550 | 555 | |||||
Provision for credit losses: | ||||||||||
Provision for loan losses | (45) | (113) | (123) | (61) | 45 | |||||
Provision for unfunded lending commitments | (1) | (10) | (9) | (6) | 10 | |||||
Total provision for credit losses | (46) | (123) | (132) | (67) | 55 | |||||
Net interest income after provision for credit losses | 601 | 678 | 677 | 617 | 500 | |||||
Noninterest income: | ||||||||||
Commercial account fees | 34 | 34 | 32 | 32 | 32 | |||||
Card fees | 25 | 24 | 21 | 22 | 21 | |||||
Retail and business banking fees | 20 | 18 | 17 | 18 | 17 | |||||
Loan-related fees and income | 27 | 21 | 25 | 25 | 32 | |||||
Capital markets and foreign exchange fees | 17 | 17 | 15 | 19 | 16 | |||||
Wealth management fees | 13 | 12 | 12 | 10 | 10 | |||||
Other customer-related fees | 15 | 13 | 11 | 13 | 11 | |||||
Customer-related fees | 151 | 139 | 133 | 139 | 139 | |||||
Fair value and nonhedge derivative income (loss) | 2 | (5) | 18 | 8 | 8 | |||||
Dividends and other income | 9 | 8 | 7 | 7 | 6 | |||||
Securities gains (losses), net | (23) | 63 | 11 | 12 | 4 | |||||
Total noninterest income | 139 | 205 | 169 | 166 | 157 | |||||
Noninterest expense: | ||||||||||
Salaries and employee benefits | 285 | 272 | 288 | 277 | 269 | |||||
Occupancy, net | 33 | 33 | 33 | 33 | 33 | |||||
Furniture, equipment and software, net | 31 | 32 | 32 | 30 | 32 | |||||
Other real estate expense, net | - | - | - | 1 | - | |||||
Credit-related expense | 7 | 6 | 6 | 6 | 6 | |||||
Professional and legal services | 16 | 17 | 20 | 19 | 12 | |||||
Advertising | 4 | 4 | 5 | 6 | 7 | |||||
FDIC premiums | 5 | 6 | 7 | 6 | 7 | |||||
Other | 48 | 58 | 44 | 46 | 76 | |||||
Total noninterest expense | 429 | 428 | 435 | 424 | 442 | |||||
Income before income taxes | 311 | 455 | 411 | 359 | 215 | |||||
Income taxes | 71 | 101 | 89 | 75 | 40 | |||||
Net income | 240 | 354 | 322 | 284 | 175 | |||||
Preferred stock dividends | (6) | (9) | (8) | (9) | (8) | |||||
Net earnings applicable to common shareholders | $ | 234 | $ | 345 | $ | 314 | $ | 275 | $ | 167 |
Weighted average common shares outstanding during the period: | ||||||||||
Basic shares (in thousands) | 160,221 | 162,742 | 163,551 | 163,658 | 163,608 | |||||
Diluted shares (in thousands) | 160,480 | 163,054 | 163,887 | 163,900 | 163,779 | |||||
Net earnings per common share: | ||||||||||
Basic | $ | 1.45 | $ | 2.08 | $ | 1.90 | $ | 1.66 | $ | 1.01 |
Diluted | 1.45 | 2.08 | 1.90 | 1.66 | 1.01 |
(In millions) |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
|||||
Commercial: | ||||||||||
Commercial and industrial | $ | 13,230 | $ | 12,947 | $ | 12,843 | $ | 13,444 | $ | 13,543 |
PPP | 3,080 | 4,461 | 6,465 | 5,572 | 6,810 | |||||
Leasing | 293 | 307 | 310 | 320 | 319 | |||||
Owner occupied | 8,446 | 8,231 | 8,112 | 8,185 | 8,136 | |||||
Municipal | 3,400 | 3,215 | 3,234 | 2,951 | 2,706 | |||||
Total commercial | 28,449 | 29,161 | 30,964 | 30,472 | 31,514 | |||||
Commercial real estate: | ||||||||||
Construction and land development | 2,843 | 2,576 | 2,443 | 2,345 | 2,298 | |||||
Term | 9,310 | 9,532 | 9,617 | 9,759 | 9,729 | |||||
Total commercial real estate | 12,153 | 12,108 | 12,060 | 12,104 | 12,027 | |||||
Consumer: | ||||||||||
Home equity credit line | 2,834 | 2,727 | 2,695 | 2,745 | 2,797 | |||||
1-4 family residential | 6,140 | 6,269 | 6,630 | 6,969 | 7,209 | |||||
Construction and other consumer real estate | 584 | 593 | 589 | 630 | 633 | |||||
Bankcard and other revolving plans | 395 | 415 | 409 | 432 | 431 | |||||
Other | 123 | 125 | 125 | 124 | 134 | |||||
Total consumer | 10,076 | 10,129 | 10,448 | 10,900 | 11,204 | |||||
Loans and leases, net of unearned income and fees | $ | 50,678 | $ | 51,398 | $ | 53,472 | $ | 53,476 | $ | 54,745 |
(In millions) |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
|||||
Nonaccrual loans1
|
$ | 323 | $ | 307 | $ | 324 | $ | 367 | $ | 366 |
Other real estate owned2
|
1 | 1 | 3 | 4 | 6 | |||||
Total nonperforming assets | $ | 324 | $ | 308 | $ | 327 | $ | 371 | $ | 372 |
Ratio of nonperforming assets to loans1 and leases and other real estate owned2
|
0.64 | % | 0.60 | % | 0.61 | % | 0.69 | % | 0.68 | % |
Accruing loans past due 90 days or more | $ | 4 | $ | 6 | $ | 9 | $ | 12 | $ | 9 |
Ratio of accruing loans past due 90 days or more to loans1 and leases
|
0.01 | % | 0.01 | % | 0.02 | % | 0.02 | % | 0.02 | % |
Nonaccrual loans and accruing loans past due 90 days or more
|
$ | 327 | $ | 313 | $ | 333 | $ | 379 | $ | 375 |
Ratio of nonaccrual loans and accruing loans past due 90 days or more to loans1 and leases
|
0.64 | % | 0.61 | % | 0.62 | % | 0.71 | % | 0.68 | % |
Accruing loans past due 30-89 days | $ | 114 | $ | 29 | $ | 100 | $ | 112 | $ | 58 |
Restructured loans included in nonaccrual loans | 121 | 128 | 134 | 113 | 84 | |||||
Restructured loans on accrual | 231 | 330 | 280 | 198 | 197 | |||||
Classified loans | 1,397 | 1,557 | 1,660 | 1,641 | 1,639 |
Three Months Ended | ||||||||||
(In millions) |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
|||||
Allowance for Loan Losses | ||||||||||
Balance at beginning of period | $ | 535 | $ | 646 | $ | 777 | $ | 853 | $ | 860 |
Provision for loan losses | (45) | (113) | (123) | (61) | 45 | |||||
Loan and lease charge-offs | 8 | 8 | 21 | 21 | 58 | |||||
Less: Recoveries | 9 | 10 | 13 | 6 | 6 | |||||
Net loan and lease charge-offs | (1) | (2) | 8 | 15 | 52 | |||||
Balance at end of period | $ | 491 | $ | 535 | $ | 646 | $ | 777 | $ | 853 |
Ratio of allowance for loan losses to loans1 and leases, at period end
|
0.97 | % | 1.04 | % | 1.21 | % | 1.45 | % | 1.56 | % |
Ratio of allowance for loan losses to nonaccrual loans1 at period end
|
152 | % | 175 | % | 199 | % | 212 | % | 242 | % |
Annualized ratio of net loan and lease charge-offs to average loans
|
(0.01) | % | (0.02) | % | 0.06 | % | 0.11 | % | 0.38 | % |
Annualized ratio of net loan and lease charge-offs to average loans (excluding PPP loans) | (0.01) | % | (0.02) | % | 0.07 | % | 0.13 | % | 0.43 | % |
Reserve for Unfunded Lending Commitments | ||||||||||
Balance at beginning of period | $ | 39 | $ | 49 | $ | 58 | $ | 64 | $ | 54 |
Provision for unfunded lending commitments | (1) | (10) | (9) | (6) | 10 | |||||
Balance at end of period | $ | 38 | $ | 39 | $ | 49 | $ | 58 | $ | 64 |
Allowance for Credit Losses | ||||||||||
Allowance for loan losses | $ | 491 | $ | 535 | $ | 646 | $ | 777 | $ | 853 |
Reserve for unfunded lending commitments | 38 | 39 | 49 | 58 | 64 | |||||
Total allowance for credit losses | $ | 529 | $ | 574 | $ | 695 | $ | 835 | $ | 917 |
Ratio of total allowance for credit losses to loans1 and leases outstanding, at period end
|
1.04 | % | 1.12 | % | 1.30 | % | 1.56 | % | 1.68 | % |
Ratio of total allowance for credit losses to loans1 and leases outstanding (excluding PPP loans), at period end
|
1.11 | % | 1.22 | % | 1.48 | % | 1.74 | % | 1.91 | % |
(In millions) |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
|||||
Loans held for sale | $ | - | $ | 1 | $ | - | $ | - | $ | 14 |
Commercial: | ||||||||||
Commercial and industrial | $ | 157 | $ | 111 | $ | 119 | $ | 140 | $ | 158 |
PPP | - | 1 | - | - | - | |||||
Leasing | - | - | - | - | 1 | |||||
Owner occupied | 67 | 69 | 74 | 76 | 81 | |||||
Municipal | - | - | - | - | - | |||||
Total commercial | 224 | 181 | 193 | 216 | 240 | |||||
Commercial real estate: | ||||||||||
Construction and land development | - | - | - | - | - | |||||
Term | 25 | 28 | 31 | 31 | 37 | |||||
Total commercial real estate | 25 | 28 | 31 | 31 | 37 | |||||
Consumer: | ||||||||||
Home equity credit line | 15 | 18 | 19 | 16 | 16 | |||||
1-4 family residential | 58 | 78 | 80 | 103 | 59 | |||||
Construction and other consumer real estate | - | - | - | - | - | |||||
Bankcard and other revolving plans | 1 | 1 | 1 | 1 | - | |||||
Other | - | - | - | - | - | |||||
Total consumer | 74 | 97 | 100 | 120 | 75 | |||||
Total nonaccrual loans | $ | 323 | $ | 307 | $ | 324 | $ | 367 | $ | 366 |
(In millions) |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
|||||
Commercial: | ||||||||||
Commercial and industrial | $ | (2) | $ | (2) | $ | 8 | $ | 15 | $ | 51 |
PPP | - | - | - | - | - | |||||
Leasing | - | - | - | - | - | |||||
Owner occupied | (1) | - | - | - | (1) | |||||
Municipal | - | - | - | - | - | |||||
Total commercial | (3) | (2) | 8 | 15 | 50 | |||||
Commercial real estate: | ||||||||||
Construction and land development | - | - | - | - | - | |||||
Term | - | - | - | - | 1 | |||||
Total commercial real estate | - | - | - | - | 1 | |||||
Consumer: | ||||||||||
Home equity credit line | 1 | (1) | (1) | - | - | |||||
1-4 family residential | 1 | - | (1) | (1) | - | |||||
Construction and other consumer real estate | - | - | - | - | - | |||||
Bankcard and other revolving plans | - | 1 | 1 | - | 1 | |||||
Other | - | - | 1 | 1 | - | |||||
Total consumer loans | 2 | - | - | - | 1 | |||||
Total net charge-offs (recoveries) | $ | (1) | $ | (2) | $ | 8 | $ | 15 | $ | 52 |
(Unaudited) | Three Months Ended | |||||||||||
September 30, 2021 | June 30, 2021 | September 30, 2020 | ||||||||||
(In millions) | Average balance |
Average
yield/rate 1 |
Average balance |
Average
yield/rate 1 |
Average balance |
Average
yield/rate 1 |
||||||
ASSETS | ||||||||||||
Money market investments | $ | 12,716 | 0.20 | % | $ | 10,253 | 0.17 | % | $ | 3,116 | 0.25 | % |
Securities: | ||||||||||||
Held-to-maturity | 557 | 2.87 | % | 579 | 2.91 | % | 672 | 3.39 | % | |||
Available-for-sale | 18,814 | 1.56 | % | 17,041 | 1.63 | % | 14,083 | 1.95 | % | |||
Trading account | 199 | 4.41 | % | 211 | 4.43 | % | 158 | 4.31 | % | |||
Total securities | 19,570 | 1.63 | % | 17,831 | 1.71 | % | 14,913 | 2.04 | % | |||
Loans held for sale | 52 | 3.03 | % | 62 | 2.50 | % | 86 | 4.32 | % | |||
Loans and leases:2
|
||||||||||||
Commercial - excluding PPP loans | 24,854 | 3.76 | % | 24,560 | 3.85 | % | 24,909 | 3.96 | % | |||
Commercial - PPP loans | 3,795 | 6.66 | % | 5,945 | 4.56 | % | 6,771 | 3.03 | % | |||
Commercial real estate | 12,144 | 3.42 | % | 12,037 | 3.46 | % | 11,986 | 3.52 | % | |||
Consumer | 10,058 | 3.38 | % | 10,228 | 3.51 | % | 11,327 | 3.60 | % | |||
Total loans and leases | 50,851 | 3.82 | % | 52,770 | 3.77 | % | 54,993 | 3.68 | % | |||
Total interest-earning assets | 83,189 | 2.75 | % | 80,916 | 2.86 | % | 73,108 | 3.20 | % | |||
Cash and due from banks | 597 | 579 | 583 | |||||||||
Allowance for credit losses on loans and debt securities | (536) | (647) | (852) | |||||||||
Goodwill and intangibles | 1,015 | 1,015 | 1,015 | |||||||||
Other assets | 4,291 | 4,094 | 4,129 | |||||||||
Total assets | $ | 88,556 | $ | 85,957 | $ | 77,983 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
Interest-bearing deposits: | ||||||||||||
Savings and money market | $ | 37,262 | 0.05 | % | $ | 35,987 | 0.06 | % | $ | 32,111 | 0.11 | % |
Time | 1,829 | 0.32 | % | 2,108 | 0.42 | % | 3,602 | 0.96 | % | |||
Total interest-bearing deposits | 39,091 | 0.07 | % | 38,095 | 0.08 | % | 35,713 | 0.20 | % | |||
Borrowed funds: | ||||||||||||
Federal funds purchased and other short-term borrowings | 630 | 0.08 | % | 834 | 0.06 | % | 1,078 | 0.09 | % | |||
Long-term debt | 1,204 | 2.34 | % | 1,303 | 2.31 | % | 1,353 | 2.32 | % | |||
Total borrowed funds | 1,834 | 1.56 | % | 2,137 | 1.43 | % | 2,431 | 1.33 | % | |||
Total interest-bearing funds | 40,925 | 0.13 | % | 40,232 | 0.15 | % | 38,144 | 0.27 | % | |||
Noninterest-bearing demand deposits | 38,320 | 36,545 | 30,789 | |||||||||
Other liabilities | 1,302 | 1,200 | 1,406 | |||||||||
Total liabilities | 80,547 | 77,977 | 70,339 | |||||||||
Shareholders' equity: | ||||||||||||
Preferred equity | 440 | 544 | 566 | |||||||||
Common equity | 7,569 | 7,436 | 7,078 | |||||||||
Total shareholders' equity | 8,009 | 7,980 | 7,644 | |||||||||
Total liabilities and shareholders' equity | $ | 88,556 | $ | 85,957 | $ | 77,983 | ||||||
Spread on average interest-bearing funds | 2.62 | % | 2.71 | % | 2.93 | % | ||||||
Impact of net noninterest-bearing sources of funds | 0.06 | % | 0.08 | % | 0.13 | % | ||||||
Net interest margin | 2.68 | % | 2.79 | % | 3.06 | % | ||||||
Memo: total loans and leases, excluding PPP loans | 47,056 | 3.59 | % | 46,825 | 3.67 | % | 48,222 | 3.77 | % | |||
Memo: total cost of deposits | 0.03 | % | 0.04 | % | 0.11 | % | ||||||
Memo: total deposits and interest-bearing liabilities | 79,245 | 0.07 | % | 76,777 | 0.08 | % | 68,933 | 0.15 | % |
Three Months Ended | |||||||||||
(Dollar amounts in millions) |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
||||||
Return on Average Tangible Common Equity | |||||||||||
Net earnings applicable to common shareholders, net of tax | (a) | $ | 234 | $ | 345 | $ | 314 | $ | 275 | $ | 167 |
Average common equity (GAAP) | $ | 7,569 | $ | 7,436 | $ | 7,333 | $ | 7,166 | $ | 7,078 | |
Average goodwill and intangibles | (1,015) | (1,015) | (1,016) | (1,016) | (1,015) | ||||||
Average tangible common equity (non-GAAP) | (b) | $ | 6,554 | $ | 6,421 | $ | 6,317 | $ | 6,150 | $ | 6,063 |
Number of days in quarter | (c) | 92 | 91 | 90 | 92 | 92 | |||||
Number of days in year | (d) | 365 | 365 | 365 | 366 | 366 | |||||
Return on average tangible common equity (non-GAAP)
|
(a/b/c)*d | 14.2 | % | 21.6 | % | 20.2 | % | 17.8 | % | 11.0 | % |
(In millions, except shares and per share amounts) |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
||||||
Tangible Book Value per Common Share | |||||||||||
Total shareholders' equity (GAAP) | $ | 7,774 | $ | 8,033 | $ | 7,933 | $ | 7,886 | $ | 7,668 | |
Preferred stock | (440) | (440) | (566) | (566) | (566) | ||||||
Goodwill and intangibles | (1,015) | (1,015) | (1,016) | (1,016) | (1,016) | ||||||
Tangible common equity (non-GAAP) | (a) | $ | 6,319 | $ | 6,578 | $ | 6,351 | $ | 6,304 | $ | 6,086 |
Common shares outstanding (in thousands) | (b) | 156,530 | 162,248 | 163,800 | 164,090 | 164,009 | |||||
Tangible book value per common share (non-GAAP)
|
(a/b) | $ | 40.37 | $ | 40.54 | $ | 38.77 | $ | 38.42 | $ | 37.11 |
Three Months Ended | |||||||||||
(In millions) |
September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
||||||
Efficiency Ratio | |||||||||||
Noninterest expense (GAAP) | (a) | $ | 429 | $ | 428 | $ | 435 | $ | 424 | $ | 442 |
Adjustments: | |||||||||||
Severance costs | 1 | - | - | 1 | 1 | ||||||
Other real estate expense, net | - | - | - | 1 | - | ||||||
Restructuring costs | - | - | - | (1) | 1 | ||||||
Pension termination-related expense | - | - | (5) | - | - | ||||||
SBIC investment success fee accrual 1
|
(4) | 9 | - | - | - | ||||||
Total adjustments | (b) | (3) | 9 | (5) | 1 | 2 | |||||
Adjusted noninterest expense (non-GAAP) | (a-b)=(c) | $ | 432 | $ | 419 | $ | 440 | $ | 423 | $ | 440 |
Net interest income (GAAP)
|
(d) | $ | 555 | $ | 555 | $ | 545 | $ | 550 | $ | 555 |
Fully taxable-equivalent adjustments
|
(e) | 7 | 7 | 8 | 7 | 7 | |||||
Taxable-equivalent net interest income (non-GAAP)
|
(d+e)=(f) | 562 | 562 | 553 | 557 | 562 | |||||
Noninterest income (GAAP) | (g) | 139 | 205 | 169 | 166 | 157 | |||||
Combined income (non-GAAP) | (f+g)=(h) | 701 | 767 | 722 | 723 | 719 | |||||
Adjustments: | |||||||||||
Fair value and nonhedge derivative income (loss) | 2 | (5) | 18 | 8 | 8 | ||||||
Securities gains (losses), net | (23) | 63 | 11 | 12 | 4 | ||||||
Total adjustments | (i) | (21) | 58 | 29 | 20 | 12 | |||||
Adjusted taxable-equivalent revenue
(non-GAAP)
|
(h-i)=(j) | $ | 722 | $ | 709 | $ | 693 | $ | 703 | $ | 707 |
Pre-provision net revenue (PPNR) (non-GAAP)
|
(h)-(a) | $ | 272 | $ | 339 | $ | 287 | $ | 299 | $ | 277 |
Adjusted PPNR (non-GAAP)
|
(j)-(c) | 290 | 290 | 253 | 280 | 267 | |||||
Efficiency ratio (non-GAAP) 2
|
(c/j) | 59.8 | % | 59.1 | % | 63.5 | % | 60.2 | % | 62.2 | % |
Nine Months Ended | |||||
(In millions) |
September 30, 2021 |
September 30, 2020 |
|||
Efficiency Ratio | |||||
Noninterest expense (GAAP) | (a) | $ | 1,292 | $ | 1,279 |
Adjustments: | |||||
Severance costs | 1 | - | |||
Restructuring costs | - | 2 | |||
Pension termination-related expense | (5) | 28 | |||
SBIC investment success fee accrual 1
|
5 | - | |||
Total adjustments | (b) | 1 | 30 | ||
Adjusted noninterest expense (non-GAAP) | (a-b)=(c) | $ | 1,291 | $ | 1,249 |
Net interest income (GAAP) | (d) | $ | 1,655 | $ | 1,665 |
Fully taxable-equivalent adjustments | (e) | 22 | 21 | ||
Taxable-equivalent net interest income (non-GAAP) | (d+e)=(f) | 1,677 | 1,686 | ||
Noninterest income (GAAP) | (g) | 513 | 408 | ||
Combined income (non-GAAP) | (f+g)=(h) | 2,190 | 2,094 | ||
Adjustments: | |||||
Fair value and nonhedge derivative loss | 15 | (15) | |||
Securities gains, net | 51 | (5) | |||
Total adjustments | (i) | 66 | (20) | ||
Adjusted taxable-equivalent revenue (non-GAAP) | (h-i)=(j) | $ | 2,124 | $ | 2,114 |
Pre-provision net revenue (PPNR) | (h)-(a) | $ | 898 | $ | 815 |
Adjusted PPNR (non-GAAP) | (j)-(c) | 833 | 865 | ||
Efficiency ratio (non-GAAP) | (c/j) | 60.8 | % | 59.1 | % |