04/17/2024 | Press release | Distributed by Public on 04/17/2024 04:30
Key Financial Data | 1Q24 | 4Q23 | 1Q23 |
First Quarter 2024 Highlights
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Income Statement |
($s in millions) |
■Underlying EPS of $0.79 and ROTCE of 10.6%
■Underlying PPNR of $683 million
-NII down 3% QoQ given a slight decrease in interest-earning assets; stable NIM of 2.91%
-Fees up 3% QoQ with higher Capital Markets and Card fees
-Expenses stable QoQ including continued Private Bank start-up investment
■Increased ACL coverage to 1.61%, up 2 bps QoQ
■Period-end and average loans down 2% QoQ given balance sheet optimization, including Non-Core portfolio run off
■Period-end deposits up $4.2 billion YoY reflecting retail and Private Bank growth; Period-end and average deposits down slightly QoQ given Commercial seasonal outflows
■Strong liquidity profile; Spot LDR improved to 81%; FHLB advances reduced further to $2.0 billion, down 83% YoY
■Strong CET1 ratio of 10.6%; TCE ratio of 6.5%
■TBV/share of $30.19, down 2% QoQ reflecting rate impacts on AOCI
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Total revenue | $ | 1,959 | $ | 1,988 | $ | 2,128 | |
Pre-provision profit | 601 | 376 | 832 | ||||
Underlying pre-provision profit | 683 | 721 | 898 | ||||
Provision for credit losses | 171 | 171 | 168 | ||||
Net income | 334 | 189 | 511 | ||||
Underlying net income | 395 | 426 | 560 | ||||
Balance Sheet & Credit Quality |
($s in billions) | ||||||
Period-end loans and leases | $ | 143.2 | $ | 146.0 | $ | 154.7 | |
Average loans and leases | 144.8 | 148.0 | 156.5 | ||||
Period-end deposits | 176.4 | 177.3 | 172.2 | ||||
Average deposits | 176.1 | 177.1 | 174.4 | ||||
Period-end loan-to-deposit ratio
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81.2 | % | 82.3 | % | 89.8 | % | |
NCO ratio | 0.50 | % | 0.46 | % | 0.34 | % | |
Financial Metrics | Diluted EPS | $ | 0.65 | $ | 0.34 | $ | 1.00 |
Underlying Diluted EPS | 0.79 | 0.85 | 1.10 | ||||
ROTCE | 8.9 | % | 4.7 | % | 14.4 | % | |
Underlying ROTCE | 10.6 | 11.8 | 15.8 | ||||
Net interest margin, FTE | 2.91 | 2.91 | 3.30 | ||||
Efficiency ratio | 69.3 | 81.1 | 60.9 | ||||
Underlying efficiency ratio | 65.1 | 63.8 | 57.8 | ||||
CET1 | 10.6 | % | 10.6 | % | 10.0 | % | |
TBV/Share | $ | 30.19 | $ | 30.91 | $ | 29.44 |
Notable Items | 1Q24 | |||
($s in millions except per share data) | Pre-tax $ | EPS | ||
Integration related | $ | (3) | $ | (0.01) |
TOP and Other items
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(44) | (0.07) | ||
FDIC special assessment
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(35) | (0.06) | ||
Total: | $ | (82) | $ | (0.14) |
Comments from Chairman and CEO Bruce Van Saun |
Quarterly Trends | ||||||||||||||
1Q24 change from | ||||||||||||||
($s in millions, except per share data) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||
Earnings | $/bps | % | $/bps | % | ||||||||||
Net interest income | $ | 1,442 | $ | 1,488 | $ | 1,643 | $ | (46) | (3) | % | $ | (201) | (12) | % |
Noninterest income | 517 | 500 | 485 | 17 | 3 | 32 | 7 | |||||||
Total revenue | 1,959 | 1,988 | 2,128 | (29) | (1) | (169) | (8) | |||||||
Noninterest expense | 1,358 | 1,612 | 1,296 | (254) | (16) | 62 | 5 | |||||||
Pre-provision profit | 601 | 376 | 832 | 225 | 60 | (231) | (28) | |||||||
Provision for credit losses | 171 | 171 | 168 | - | - | 3 | 2 | |||||||
Net income | 334 | 189 | 511 | 145 | 77 | (177) | (35) | |||||||
Preferred dividends | 30 | 30 | 23 | - | - | 7 | 30 | |||||||
Net income available to common stockholders | $ | 304 | $ | 159 | $ | 488 | $ | 145 | 91 | % | $ | (184) | (38) | % |
After-tax notable Items | 61 | 237 | 49 | (176) | (74) | 12 | 24 | |||||||
Underlying net income | $ | 395 | $ | 426 | $ | 560 | $ | (31) | (7) | % | $ | (165) | (29) | % |
Underlying net income available to common stockholders | 365 | 396 | 537 | (31) | (8) | (172) | (32) | |||||||
Average common shares outstanding | ||||||||||||||
Basic (in millions) | 461.4 | 466.2 | 485.4 | (4.9) | (1) | (24.1) | (5) | |||||||
Diluted (in millions) | 463.8 | 468.2 | 487.7 | (4.4) | (1) | (23.9) | (5) | |||||||
Diluted earnings per share | $ | 0.65 | $ | 0.34 | $ | 1.00 | $ | 0.31 | 91 | % | $ | (0.35) | (35) | % |
Underlying diluted earnings per share | 0.79 | 0.85 | 1.10 | (0.06) | (7) | (0.31) | (28) | |||||||
Performance metrics | ||||||||||||||
Net interest margin | 2.90 | % | 2.90 | % | 3.29 | % | - | bps | (39) | bps | ||||
Net interest margin, FTE | 2.91 | 2.91 | 3.30 | - | (39) | |||||||||
Effective income tax rate | 22.3 | 7.6 | 23.0 | 1,469 | (69) | |||||||||
Efficiency ratio | 69.3 | 81.1 | 60.9 | (1,180) | 843 | |||||||||
Underlying efficiency ratio | 65.1 | 63.8 | 57.8 | 128 | 721 | |||||||||
Return on average tangible common equity | 8.9 | 4.7 | 14.4 | 414 | (552) | |||||||||
Underlying return on average tangible common equity | 10.6 | 11.8 | 15.8 | (119) | (515) | |||||||||
Return on average total tangible assets | 0.63 | 0.35 | 0.97 | 28 | (34) | |||||||||
Underlying return on average total tangible assets | 0.75 | % | 0.78 | % | 1.06 | % | (3) | bps | (31) | bps | ||||
Capital adequacy(2,3)
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Common equity tier 1 capital ratio | 10.6 | % | 10.6 | % | 10.0 | % | ||||||||
Total capital ratio | 13.8 | 13.7 | 12.9 | |||||||||||
Tier 1 leverage ratio | 9.3 | 9.3 | 9.4 | |||||||||||
Tangible common equity ratio | 6.5 | 6.7 | 6.6 | |||||||||||
Allowance for credit losses to loans and leases | 1.61 | % | 1.59 | % | 1.47 | % | 2 | bps | 14 | bps | ||||
Asset quality(3)
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Nonaccrual loans and leases to loans and leases | 1.02 | % | 0.93 | % | 0.64 | % | 9 | bps | 38 | bps | ||||
Allowance for credit losses to nonaccrual loans and leases | 157 | 170 | 229 | (13) | (72) | |||||||||
Net charge-offs as a % of average loans and leases | 0.50 | % | 0.46 | % | 0.34 | % | 4 | bps | 16 | bps |
Quarterly Trends | ||||||||||||||
1Q24 change from | ||||||||||||||
($s in millions, except per share data) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||
$/bps | % | $/bps | % | |||||||||||
Net interest income | $ | 1,442 | $ | 1,488 | $ | 1,643 | $ | (46) | (3) | % | $ | (201) | (12) | % |
Noninterest income | 514 | 500 | 485 | 14 | 3 | 29 | 6 | |||||||
Total revenue | $ | 1,956 | $ | 1,988 | $ | 2,128 | $ | (32) | (2) | % | $ | (172) | (8) | % |
Noninterest expense | 1,273 | 1,267 | 1,230 | 6 | - | % | 43 | 3 | % | |||||
Provision for credit losses | 171 | 171 | 168 | - | - | 3 | 2 | |||||||
Net income available to common stockholders | $ | 365 | $ | 396 | $ | 537 | $ | (31) | (8) | % | $ | (172) | (32) | % |
Performance metrics | ||||||||||||||
EPS | $ | 0.79 | $ | 0.85 | $ | 1.10 | $ | (0.06) | (7) | % | $ | (0.31) | (28) | % |
Efficiency ratio | 65.1 | % | 63.8 | % | 57.8 | % | 128 | bps | 721 | bps | ||||
Return on average tangible common equity | 10.6 | % | 11.8 | % | 15.8 | % | (119) | bps | (515) | bps |
1Q24 change from | ||||||||||||||
($s in millions) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||
$/bps | % | $/bps | % | |||||||||||
Total assets | $ | 220,448 | $ | 221,964 | $ | 222,256 | $ | (1,516) | (1) | % | $ | (1,808) | (1) | % |
Total loans and leases | 143,188 | 145,959 | 154,688 | (2,771) | (2) | (11,500) | (7) | |||||||
Total loans held for sale | 555 | 779 | 1,855 | (224) | (29) | (1,300) | (70) | |||||||
Deposits | 176,428 | 177,342 | 172,194 | (914) | (1) | 4,234 | 2 | |||||||
Stockholders' equity | 23,761 | 24,342 | 24,201 | (581) | (2) | (440) | (2) | |||||||
Stockholders' common equity | 21,747 | 22,329 | 22,187 | (582) | (3) | (440) | (2) | |||||||
Tangible common equity | $ | 13,844 | $ | 14,417 | $ | 14,247 | $ | (573) | (4) | % | $ | (403) | (3) | % |
Loan-to-deposit ratio (period-end)(2)
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81.2 | % | 82.3 | % | 89.8 | % | (114) | bps | (867) | bps | ||||
Loan-to-deposit ratio (average)(2)
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82.2 | % | 83.5 | % | 89.8 | % | (130) | bps | (752) | bps | ||||
(1) Represents period-end unless otherwise noted. | ||||||||||||||
(2) Excludes loans held for sale. |
Notable items - Integration-related
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1Q24 | 4Q23 | 1Q23 | |||||||||
($s in millions, except per share data) | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | ||||||
Salaries & benefits | $ | (2) | $ | (1) | $ | (2) | $ | (1) | $ | (7) | $ | (5) |
Equipment and software | - | - | - | - | (3) | (2) | ||||||
Outside services | (1) | (1) | (3) | (2) | (25) | (19) | ||||||
Occupancy | - | - | - | - | (16) | (12) | ||||||
Other expense | - | - | - | - | (1) | (1) | ||||||
Noninterest expense | $ | (3) | $ | (2) | $ | (5) | $ | (3) | $ | (52) | $ | (39) |
EPS Impact - Noninterest expense | $ | (0.01) | $ | (0.01) | $ | (0.08) | ||||||
Total integration related | $ | (3) | $ | (2) | $ | (5) | $ | (3) | $ | (52) | $ | (39) |
EPS Impact - Total Integration-related
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$ | (0.01) | $ | (0.01) | $ | (0.08) | ||||||
Other notable items - TOP & Other
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1Q24 | 4Q23 | 1Q23 | |||||||||
($s in millions, except per share data) | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | ||||||
Tax notable items | $ | - | $ | - | $ | - | $ | 17 | $ | - | $ | - |
Noninterest income | 3 | 2 | - | - | - | - | ||||||
Salaries & benefits | (15) | (11) | (30) | (22) | (9) | (7) | ||||||
Equipment and software | (8) | (6) | (37) | (27) | (1) | (1) | ||||||
Outside services | (11) | (9) | (10) | (7) | (2) | (1) | ||||||
Occupancy | (7) | (5) | (20) | (15) | (2) | (1) | ||||||
FDIC special assessment(1)
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(35) | (26) | (225) | (167) | - | - | ||||||
Other expense | (6) | (4) | (18) | (13) | - | - | ||||||
Noninterest expense | $ | (82) | $ | (61) | $ | (340) | $ | (251) | $ | (14) | $ | (10) |
Total Other Notable Items | $ | (79) | $ | (59) | $ | (340) | $ | (234) | $ | (14) | $ | (10) |
EPS Impact - Other Notable Items | $ | (0.13) | $ | (0.50) | $ | (0.02) | ||||||
Total Notable Items | $ | (82) | $ | (61) | $ | (345) | $ | (237) | $ | (66) | $ | (49) |
Total EPS Impact | $ | (0.14) | $ | (0.51) | $ | (0.10) | ||||||
(1) The FDIC special assessment earnings per share impact is $(0.06) and $(0.35) for first quarter 2024 and fourth quarter 2023, respectively.
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Net interest income | 1Q24 change from | |||||||||||||
($s in millions) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||
$/bps | % | $/bps | % | |||||||||||
Interest income: | ||||||||||||||
Interest and fees on loans and leases and loans held for sale | $ | 2,071 | $ | 2,166 | $ | 2,067 | $ | (95) | (4) | % | $ | 4 | - | % |
Investment securities | 399 | 339 | 266 | 60 | 18 | 133 | 50 | |||||||
Interest-bearing deposits in banks | 140 | 171 | 69 | (31) | (18) | 71 | 103 | |||||||
Total interest income | $ | 2,610 | $ | 2,676 | $ | 2,402 | $ | (66) | (2) | % | $ | 208 | 9 | % |
Interest expense: | ||||||||||||||
Deposits | $ | 987 | $ | 974 | $ | 550 | $ | 13 | 1 | % | $ | 437 | 79 | % |
Short-term borrowed funds | 7 | 7 | 6 | - | - | 1 | 17 | |||||||
Long-term borrowed funds | 174 | 207 | 203 | (33) | (16) | (29) | (14) | |||||||
Total interest expense | $ | 1,168 | $ | 1,188 | $ | 759 | $ | (20) | (2) | % | $ | 409 | 54 | % |
Net interest income | $ | 1,442 | $ | 1,488 | $ | 1,643 | $ | (46) | (3) | % | $ | (201) | (12) | % |
Net interest margin, FTE | 2.91 | % | 2.91 | % | 3.30 | % | - | bps | (39) | bps | ||||
First quarter 2024 | vs. | fourth quarter 2023 |
First quarter 2024 | vs. | first quarter 2023 |
Noninterest Income | 1Q24 change from | |||||||||||||
($s in millions) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||
$ | % | $ | % | |||||||||||
Service charges and fees | $ | 96 | $ | 104 | $ | 100 | $ | (8) | (8) | % | $ | (4) | (4) | % |
Capital markets fees | 118 | 87 | 83 | 31 | 36 | 35 | 42 | |||||||
Card fees | 86 | 70 | 72 | 16 | 23 | 14 | 19 | |||||||
Trust and investment services fees | 68 | 68 | 63 | - | - | 5 | 8 | |||||||
Mortgage banking fees | 49 | 57 | 57 | (8) | (14) | (8) | (14) | |||||||
Foreign exchange and derivative products | 36 | 43 | 48 | (7) | (16) | (12) | (25) | |||||||
Letter of credit and loan fees | 42 | 42 | 40 | - | - | 2 | 5 | |||||||
Securities gains, net | 5 | 9 | 5 | (4) | (44) | - | - | |||||||
Other income(1)
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17 | 20 | 17 | (3) | (15) | - | - | |||||||
Noninterest income | $ | 517 | $ | 500 | $ | 485 | $ | 17 | 3 | % | $ | 32 | 7 | % |
Underlying, as applicable | ||||||||||||||
Card fees | $ | 83 | $ | 70 | $ | 72 | $ | 13 | 19 | $ | 11 | 15 | ||
Underlying noninterest income | $ | 514 | $ | 500 | $ | 485 | $ | 14 | 3 | % | $ | 29 | 6 | % |
(1) Includes bank-owned life insurance income and other miscellaneous income for all periods presented. |
First quarter 2024 | vs. | fourth quarter 2023 |
First quarter 2024 | vs. | first quarter 2023 |
Noninterest Expense | 1Q24 change from | |||||||||||||
($s in millions) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||
$ | % | $ | % | |||||||||||
Salaries and employee benefits | $ | 691 | $ | 667 | $ | 658 | $ | 24 | 4 | % | $ | 33 | 5 | % |
Equipment and software | 192 | 215 | 169 | (23) | (11) | 23 | 14 | |||||||
Outside services | 158 | 174 | 176 | (16) | (9) | (18) | (10) | |||||||
Occupancy | 114 | 125 | 124 | (11) | (9) | (10) | (8) | |||||||
Other operating expense | 203 | 431 | 169 | (228) | (53) | 34 | 20 | |||||||
Noninterest expense | $ | 1,358 | $ | 1,612 | $ | 1,296 | $ | (254) | (16) | % | $ | 62 | 5 | % |
Notable items | $ | 85 | $ | 345 | $ | 66 | $ | (260) | (75) | % | $ | 19 | 29% | |
Underlying, as applicable | ||||||||||||||
Salaries and employee benefits | $ | 674 | $ | 635 | $ | 642 | $ | 39 | 6 | % | $ | 32 | 5 | % |
Equipment and software | 184 | 178 | 165 | 6 | 3 | 19 | 12 | |||||||
Outside services | 146 | 161 | 149 | (15) | (9) | (3) | (2) | |||||||
Occupancy | 107 | 105 | 106 | 2 | 2 | 1 | 1 | |||||||
Other operating expense | 162 | 188 | 168 | (26) | (14) | (6) | (4) | |||||||
Underlying noninterest expense | $ | 1,273 | $ | 1,267 | $ | 1,230 | $ | 6 | - | % | $ | 43 | 3 | % |
First quarter 2024 | vs. | fourth quarter 2023 |
First quarter 2024 | vs. | first quarter 2023 |
Interest-earning assets | 1Q24 change from | |||||||||||||
($s in millions) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||
Period-end interest-earning assets | $ | % | $ | % | ||||||||||
Investments | $ | 41,127 | $ | 40,003 | $ | 34,893 | $ | 1,124 | 3 | % | $ | 6,234 | 18 | % |
Interest-bearing deposits in banks | 10,893 | 10,239 | 7,011 | 654 | 6 | 3,882 | 55 | |||||||
Commercial loans and leases | 72,823 | 74,445 | 80,866 | (1,622) | (2) | (8,043) | (10) | |||||||
Retail loans | 70,365 | 71,514 | 73,822 | (1,149) | (2) | (3,457) | (5) | |||||||
Total loans and leases | 143,188 | 145,959 | 154,688 | (2,771) | (2) | (11,500) | (7) | |||||||
Loans held for sale, at fair value | 505 | 676 | 855 | (171) | (25) | (350) | (41) | |||||||
Other loans held for sale | 50 | 103 | 1,000 | (53) | (51) | (950) | (95) | |||||||
Total loans and leases and loans held for sale | 143,743 | 146,738 | 156,543 | (2,995) | (2) | (12,800) | (8) | |||||||
Total period-end interest-earning assets | $ | 195,763 | $ | 196,980 | $ | 198,447 | $ | (1,217) | (1) | % | $ | (2,684) | (1) | % |
Average interest-earning assets
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Investments(1)
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$ | 43,905 | $ | 41,499 | $ | 38,955 | $ | 2,406 | 6 | % | $ | 4,950 | 13 | % |
Interest-bearing deposits in banks | 10,268 | 12,387 | 5,899 | (2,119) | (17) | 4,369 | 74 | |||||||
Commercial loans and leases | 73,842 | 76,078 | 82,321 | (2,236) | (3) | (8,479) | (10) | |||||||
Retail loans | 70,980 | 71,891 | 74,171 | (911) | (1) | (3,191) | (4) | |||||||
Total loans and leases | 144,822 | 147,969 | 156,492 | (3,147) | (2) | (11,670) | (7) | |||||||
Loans held for sale, at fair value | 850 | 1,047 | 1,009 | (197) | (19) | (159) | (16) | |||||||
Other loans held for sale | 223 | 219 | 197 | 4 | 2 | 26 | 13 | |||||||
Total loans and leases and loans held for sale | 145,895 | 149,235 | 157,698 | (3,340) | (2) | (11,803) | (7) | |||||||
Total average interest-earning assets | $ | 200,068 | $ | 203,121 | $ | 202,552 | $ | (3,053) | (2) | % | $ | (2,484) | (1) | % |
(1) Total average interest-earning assets excludes the mark-to-market on investment securities and unsettled purchases or sales of loans and investments.
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First quarter 2024 | vs. | fourth quarter 2023 |
First quarter 2024 | vs. | first quarter 2023 |
Deposits | 1Q24 change from | |||||||||||||
($s in millions) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||
Period-end deposits | $ | % | $ | % | ||||||||||
Demand
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$ | 36,593 | $ | 37,107 | $ | 44,326 | $ | (514) | (1) | % | $ | (7,733) | (17) | % |
Money market | 52,182 | 53,812 | 48,905 | (1,630) | (3) | 3,277 | 7 | |||||||
Checking with interest | 34,487 | 31,876 | 34,496 | 2,611 | 8 | (9) | - | |||||||
Savings | 27,912 | 27,983 | 29,789 | (71) | - | (1,877) | (6) | |||||||
Term | 25,254 | 26,564 | 14,678 | (1,310) | (5) | 10,576 | 72 | |||||||
Total period-end deposits | $ | 176,428 | $ | 177,342 | $ | 172,194 | $ | (914) | (1) | % | $ | 4,234 | 2 | % |
Average deposits | ||||||||||||||
Demand
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$ | 36,684 | $ | 38,390 | $ | 46,135 | $ | (1,706) | (4) | % | $ | (9,451) | (20) | % |
Money market | 52,926 | 53,003 | 49,942 | (77) | - | 2,984 | 6 | |||||||
Checking with interest | 32,302 | 31,788 | 35,974 | 514 | 2 | (3,672) | (10) | |||||||
Savings | 27,745 | 28,455 | 29,460 | (710) | (2) | (1,715) | (6) | |||||||
Term | 26,447 | 25,492 | 12,839 | 955 | 4 | 13,608 | 106 | |||||||
Total average deposits | $ | 176,104 | $ | 177,128 | $ | 174,350 | $ | (1,024) | (1) | % | $ | 1,754 | 1 | % |
First quarter 2024 | vs. | fourth quarter 2023 |
First quarter 2024 | vs. | first quarter 2023 |
Borrowed Funds | 1Q24 change from | |||||||||||||
($s in millions) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||
Period-end borrowed funds | $ | % | $ | % | ||||||||||
Short-term borrowed funds | $ | 9 | $ | 505 | $ | 1,018 | $ | (496) | (98) % | $ | (1,009) | (99) | % | |
Long-term borrowed funds | ||||||||||||||
FHLB advances | 2,036 | 3,786 | 11,779 | (1,750) | (46) | (9,743) | (83) | |||||||
Senior debt | 6,414 | 5,170 | 5,263 | 1,244 | 24 | 1,151 | 22 | |||||||
Subordinated debt and other debt | 1,825 | 1,819 | 1,813 | 6 | - | 12 | 1 | |||||||
Auto collateralized borrowings | 3,529 | 2,692 | - | 837 | 31 | 3,529 | 100 | |||||||
Total borrowed funds | $ | 13,813 | $ | 13,972 | $ | 19,873 | $ | (159) | (1) | % | $ | (6,060) | (30) | % |
Average borrowed funds | ||||||||||||||
Short-term borrowed funds | $ | 498 | $ | 491 | $ | 542 | $ | 7 | 1 % | $ | (44) | (8) | % | |
Long-term borrowed funds | ||||||||||||||
FHLB advances | 2,272 | 5,751 | 10,362 | (3,479) | (60) | (8,090) | (78) | |||||||
Senior debt | 6,113 | 5,217 | 5,606 | 896 | 17 | 507 | 9 | |||||||
Subordinated debt and other debt | 1,821 | 1,816 | 1,812 | 5 | - | 9 | - | |||||||
Auto collateralized borrowings | 3,458 | 2,904 | - | 554 | 19 | 3,458 | 100 | |||||||
Total average borrowed funds | $ | 14,162 | $ | 16,179 | $ | 18,322 | $ | (2,017) | (12) | % | $ | (4,160) | (23) | % |
First quarter 2024 | vs. | fourth quarter 2023 |
First quarter 2024 | vs. | first quarter 2023 |
Capital | 1Q24 change from | |||||||||||||
($s and shares in millions, except per share data) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||
Period-end capital | $ | % | $ | % | ||||||||||
Stockholders' equity | $ | 23,761 | $ | 24,342 | $ | 24,201 | $ | (581) | (2) | % | $ | (440) | (2) | % |
Stockholders' common equity | 21,747 | 22,329 | 22,187 | (582) | (3) | (440) | (2) | |||||||
Tangible common equity | 13,844 | 14,417 | 14,247 | (573) | (4) | (403) | (3) | |||||||
Tangible book value per common share | $ | 30.19 | $ | 30.91 | $ | 29.44 | $ | (0.72) | (2) | % | $ | 0.75 | 3 | % |
Common shares - at end of period | 458.5 | 466.4 | 484.0 | (7.9) | (2) | (25.5) | (5) | |||||||
Common shares - average (diluted) | 463.8 | 468.2 | 487.7 | (4.4) | (1) | % | (23.9) | (5) | % | |||||
Common equity tier 1 capital ratio(1)
|
10.6 | % | 10.6 | % | 10.0 | % | ||||||||
Total capital ratio(1)
|
13.8 | 13.7 | 12.9 | |||||||||||
Tangible common equity ratio | 6.5 | 6.7 | 6.6 | |||||||||||
Tier 1 leverage ratio(1)
|
9.3 | 9.3 | 9.4 | |||||||||||
(1) Current reporting-period regulatory capital ratios are preliminary. |
First quarter 2024 |
Credit quality review | 1Q24 change from | |||||||||||||
($s in millions) | 1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||||
$/bps | % | $/bps | % | |||||||||||
Nonaccrual loans and leases(1)
|
$ | 1,469 | $ | 1,364 | $ | 996 | $ | 105 | 8 | % | $ | 473 | 47 | % |
90+ days past due and accruing(2)
|
300 | 333 | 424 | (33) | (10) | (124) | (29) | |||||||
Net charge-offs | 181 | 171 | 133 | 10 | 6 | 48 | 36 | |||||||
Provision for credit losses | 171 | 171 | 168 | - | - | 3 | 2 | |||||||
Allowance for credit losses | $ | 2,308 | $ | 2,318 | $ | 2,275 | $ | (10) | - | % | $ | 33 | 1 | % |
Nonaccrual loans and leases to loans and leases | 1.02 | % | 0.93 | % | 0.64 | % | 9 | bps | 38 | |||||
Net charge-offs as a % of total loans and leases | 0.50 | 0.46 | 0.34 | 4 | 16 | |||||||||
Allowance for credit losses to loans and leases | 1.61 | 1.59 | 1.47 | 2 | 14 | |||||||||
Allowance for credit losses to nonaccrual loans and leases | 157 | % | 170 | % | 229 | % | (13) | bps | (72) | bps | ||||
(1)Loans fully or partially guaranteed by the FHA, VA and USDA are classified as accruing.
|
||||||||||||||
(2) 90+ days past due and accruing includes $202 million, $243 million, and $309 million of loans fully or partially guaranteed by the FHA, VA, and USDA for March 31, 2024, December 31, 2023, and March 31, 2023, respectively.
|
First quarter 2024 | vs. | fourth quarter 2023 |
First quarter 2024 | vs. | first quarter 2023 |
QUARTERLY TRENDS | ||||||||||
1Q24 Change | ||||||||||
1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | ||||||
$ | % | $ | % | |||||||
Noninterest income, Underlying: | ||||||||||
Noninterest income (GAAP) | $517 | $500 | $485 | $17 | 3 | % | $32 | 7 | % | |
Less: Notable items | 3 | - | - | 3 | 100 | 3 | 100 | |||
Noninterest income, Underlying (non-GAAP) | $514 | $500 | $485 | $14 | 3 | % | $29 | 6 | % | |
Total revenue, Underlying: | ||||||||||
Total revenue (GAAP) | A | $1,959 | $1,988 | $2,128 | ($29) | (1 | %) | ($169) | (8 | %) |
Less: Notable items | 3 | - | - | 3 | 100 | 3 | 100 | |||
Total revenue, Underlying (non-GAAP) | B | $1,956 | $1,988 | $2,128 | ($32) | (2 | %) | ($172) | (8 | %) |
Noninterest expense, Underlying: | ||||||||||
Noninterest expense (GAAP) | C | $1,358 | $1,612 | $1,296 | ($254) | (16 | %) | $62 | 5 | % |
Less: Notable items | 85 | 345 | 66 | (260) | (75) | 19 | 29 | |||
Noninterest expense, Underlying (non-GAAP) | D | $1,273 | $1,267 | $1,230 | $6 | - | % | $43 | 3 | % |
Pre-provision profit: | ||||||||||
Total revenue (GAAP) | A | $1,959 | $1,988 | $2,128 | ($29) | (1 | %) | ($169) | (8 | %) |
Less: Noninterest expense (GAAP) | C | 1,358 | 1,612 | 1,296 | (254) | (16) | 62 | 5 | ||
Pre-provision profit (non-GAAP)
|
$601 | $376 | $832 | $225 | 60 | % | ($231) | (28 | %) | |
Pre-provision profit, Underlying: | ||||||||||
Total revenue, Underlying (non-GAAP) | B | $1,956 | $1,988 | $2,128 | ($32) | (2 | %) | ($172) | (8 | %) |
Less: Noninterest expense, Underlying (non-GAAP) | D | 1,273 | 1,267 | 1,230 | 6 | - | 43 | 3 | ||
Pre-provision profit, Underlying (non-GAAP) | $683 | $721 | $898 | ($38) | (5 | %) | ($215) | (24 | %) | |
Income before income tax expense, Underlying: | ||||||||||
Income before income tax expense (GAAP) | E | $430 | $205 | $664 | $225 | 110 | % | ($234) | (35 | %) |
Less: Income (expense) before income tax expense (benefit) related to notable items | (82) | (345) | (66) | 263 | 76 | (16) | (24) | |||
Income before income tax expense, Underlying (non-GAAP) | F | $512 | $550 | $730 | ($38) | (7 | %) | ($218) | (30 | %) |
Income tax expense, Underlying: | ||||||||||
Income tax expense (GAAP) | G | $96 | $16 | $153 | $80 | NM | ($57) | (37 | %) | |
Less: Income tax expense (benefit) related to notable items | (21) | (108) | (17) | 87 | 81 | (4) | (24) | |||
Income tax expense, Underlying (non-GAAP) | H | $117 | $124 | $170 | ($7) | (6 | %) | ($53) | (31 | %) |
Net income, Underlying: | ||||||||||
Net income (GAAP) | I | $334 | $189 | $511 | $145 | 77 | % | ($177) | (35 | %) |
Add: Notable items, net of income tax benefit | 61 | 237 | 49 | (176) | (74) | 12 | 24 | |||
Net income, Underlying (non-GAAP) | J | $395 | $426 | $560 | ($31) | (7 | %) | ($165) | (29 | %) |
Net income available to common stockholders, Underlying: | ||||||||||
Net income available to common stockholders (GAAP) | K | $304 | $159 | $488 | $145 | 91 | % | ($184) | (38 | %) |
Add: Notable items, net of income tax benefit | 61 | 237 | 49 | (176) | (74) | 12 | 24 | |||
Net income available to common stockholders, Underlying (non-GAAP) | L | $365 | $396 | $537 | ($31) | (8 | %) | ($172) | (32 | %) |
QUARTERLY TRENDS | |||||||||||
1Q24 Change | |||||||||||
1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||||
$/bps | % | $/bps | % | ||||||||
Operating leverage: | |||||||||||
Total revenue (GAAP) | A | $1,959 | $1,988 | $2,128 | ($29) | (1 | %) | ($169) | (8 | %) | |
Less: Noninterest expense (GAAP) | C | 1,358 | 1,612 | 1,296 | (254) | (16) | 62 | 5 | |||
Operating leverage | 14 | % | (13 | %) | |||||||
Operating leverage, Underlying: | |||||||||||
Total revenue, Underlying (non-GAAP) | B | $1,956 | $1,988 | $2,128 | ($32) | (2 | %) | ($172) | (8 | %) | |
Less: Noninterest expense, Underlying (non-GAAP) | D | 1,273 | 1,267 | 1,230 | 6 | - | 43 | 3 | |||
Operating leverage, Underlying (non-GAAP) | (2 | %) | (11 | %) | |||||||
Efficiency ratio and efficiency ratio, Underlying: | |||||||||||
Efficiency ratio | C/A | 69.33 | % | 81.13 | % | 60.90 | % | (1,180) | bps | 843 | bps |
Efficiency ratio, Underlying (non-GAAP) | D/B | 65.05 | 63.77 | 57.84 | 128 | bps | 721 | bps | |||
Effective income tax rate and effective income tax rate, Underlying: | |||||||||||
Effective income tax rate | G/E | 22.28 | % | 7.59 | % | 22.97 | % | 1,469 | bps | (69) | bps |
Effective income tax rate, Underlying (non-GAAP) | H/F | 22.84 | 22.25 | 23.25 | 59 | bps | (41) | bps | |||
Return on average tangible common equity and return on average tangible common equity, Underlying: | |||||||||||
Average common equity (GAAP) | M | $21,700 | $21,209 | $21,702 | $491 | 2 | % | ($2) | - | % | |
Less: Average goodwill (GAAP) | 8,188 | 8,188 | 8,177 | - | - | 11 | - | ||||
Less: Average other intangibles (GAAP) | 153 | 163 | 192 | (10) | (6) | (39) | (20) | ||||
Add: Average deferred tax liabilities related to goodwill and other intangible assets (GAAP) | 433 | 421 | 422 | 12 | 3 | 11 | 3 | ||||
Average tangible common equity | N | $13,792 | $13,279 | $13,755 | $513 | 4 | % | $37 | - | % | |
Return on average tangible common equity | K/N | 8.86 | % | 4.72 | % | 14.38 | % | 414 | bps | (552) | bps |
Return on average tangible common equity, Underlying (non-GAAP) | L/N | 10.65 | 11.84 | 15.80 | (119) | bps | (515) | bps | |||
Return on average total tangible assets and return on average total tangible assets, Underlying: | |||||||||||
Average total assets (GAAP) | O | $220,770 | $223,653 | $222,711 | ($2,883) | (1 | %) | ($1,941) | (1 | %) | |
Less: Average goodwill (GAAP) | 8,188 | 8,188 | 8,177 | - | - | 11 | - | ||||
Less: Average other intangibles (GAAP) | 153 | 163 | 192 | (10) | (6) | (39) | (20) | ||||
Add: Average deferred tax liabilities related to goodwill and other intangible assets (GAAP) | 433 | 421 | 422 | 12 | 3 | 11 | 3 | ||||
Average tangible assets | P | $212,862 | $215,723 | $214,764 | ($2,861) | (1 | %) | ($1,902) | (1 | %) | |
Return on average total tangible assets | I/P | 0.63 | % | 0.35 | % | 0.97 | % | 28 | bps | (34) | bps |
Return on average total tangible assets, Underlying (non-GAAP) | J/P | 0.75 | 0.78 | 1.06 | (3) | bps | (31) | bps |
QUARTERLY TRENDS | ||||||||||
1Q24 Change | ||||||||||
1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | ||||||
$/bps | % | $/bps | % | |||||||
Tangible book value per common share: | ||||||||||
Common shares - at period-end (GAAP) | Q | 458,485,032 | 466,418,055 | 483,982,264 | (7,933,023) | (2 | %) | (25,497,232) | (5 | %) |
Common stockholders' equity (GAAP) | $21,747 | $22,329 | $22,187 | ($582) | (3) | ($440) | (2) | |||
Less: Goodwill (GAAP) | 8,188 | 8,188 | 8,177 | - | - | 11 | - | |||
Less: Other intangible assets (GAAP) | 148 | 157 | 185 | (9) | (6) | (37) | (20) | |||
Add: Deferred tax liabilities related to goodwill and other intangible assets (GAAP) | 433 | 433 | 422 | - | - | 11 | 3 | |||
Tangible common equity | R | $13,844 | $14,417 | $14,247 | ($573) | (4 | %) | ($403) | (3 | %) |
Tangible book value per common share | R/Q | $30.19 | $30.91 | $29.44 | ($0.72) | (2 | %) | $0.75 | 3 | % |
Net income per average common share - basic and diluted and net income per average common share - basic and diluted, Underlying: | ||||||||||
Average common shares outstanding - basic (GAAP) | S | 461,358,681 | 466,234,324 | 485,444,313 | (4,875,643) | (1 | %) | (24,085,632) | (5 | %) |
Average common shares outstanding - diluted (GAAP) | T | 463,797,964 | 468,159,167 | 487,712,146 | (4,361,203) | (1) | (23,914,182) | (5) | ||
Net income per average common share - basic (GAAP) | K/S | $0.66 | $0.34 | $1.00 | $0.32 | 94 | ($0.34) | (34) | ||
Net income per average common share - diluted (GAAP) | K/T | 0.65 | 0.34 | 1.00 | 0.31 | 91 | (0.35) | (35) | ||
Net income per average common share - basic, Underlying (non-GAAP) | L/S | 0.79 | 0.85 | 1.10 | (0.06) | (7) | (0.31) | (28) | ||
Net income per average common share - diluted, Underlying (non-GAAP) | L/T | 0.79 | 0.85 | 1.10 | (0.06) | (7) | (0.31) | (28) |
QUARTERLY TRENDS | |||||||||
1Q24 Change | |||||||||
1Q24 | 4Q23 | 1Q23 | 4Q23 | 1Q23 | |||||
$/bps | % | $/bps | % | ||||||
Card fees, Underlying: | |||||||||
Card fees (GAAP) | $86 | $70 | $72 | $16 | 23 | $14 | 19% | ||
Less: Notable items | 3 | - | - | 3 | 100 | 3 | 100 | ||
Card fees, Underlying (non-GAAP) | $83 | $70 | $72 | $13 | 19 | $11 | 15 | % | |
Salaries and employee benefits, Underlying: | |||||||||
Salaries and employee benefits (GAAP) | $691 | $667 | $658 | $24 | 4 | % | $33 | 5 | % |
Less: Notable items | 17 | 32 | 16 | (15) | (47) | 1 | 6 | ||
Salaries and employee benefits, Underlying (non-GAAP) | $674 | $635 | $642 | $39 | 6 | % | $32 | 5 | % |
Equipment and software, Underlying: | |||||||||
Equipment and software(GAAP)
|
$192 | $215 | $169 | ($23) | (11 | %) | $23 | 14 | % |
Less: Notable items | 8 | 37 | 4 | (29) | (78) | 4 | 100 | ||
Equipment and software, Underlying (non-GAAP) | $184 | $178 | $165 | $6 | 3 | % | $19 | 12 | % |
Outside services, Underlying: | |||||||||
Outside services (GAAP) | $158 | $174 | $176 | ($16) | (9 | %) | ($18) | (10 | %) |
Less: Notable items | 12 | 13 | 27 | (1) | (8) | (15) | (56) | ||
Outside services, Underlying (non-GAAP) | $146 | $161 | $149 | ($15) | (9 | %) | ($3) | (2 | %) |
Occupancy, Underlying: | |||||||||
Occupancy (GAAP) | $114 | $125 | $124 | ($11) | (9 | %) | ($10) | (8 | %) |
Less: Notable items | 7 | 20 | 18 | (13) | (65) | (11) | (61) | ||
Occupancy, Underlying (non-GAAP) | $107 | $105 | $106 | $2 | 2 | % | $1 | 1 | % |
Other operating expense, Underlying: | |||||||||
Other operating expense (GAAP) | $203 | $431 | $169 | ($228) | (53 | %) | $34 | 20 | % |
Less: Notable items | 41 | 243 | 1 | (202) | (83) | 40 | NM | ||
Other operating expense, Underlying (non-GAAP) | $162 | $188 | $168 | ($26) | (14 | %) | ($6) | (4 | %) |