10/16/2024 | Press release | Distributed by Public on 10/16/2024 04:31
Key Financial Data | 3Q24 | 2Q24 | 3Q23 |
Third Quarter 2024 Highlights
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Income Statement |
($s in millions) |
■Underlying EPS of $0.79 and ROTCE of 9.7%
■Underlying PPNR of $655 million
-NII down 2.9% QoQ, driven by a 10 bp decline in NIM primarily related to the impact of forward starting swaps
-Fees down 2.7% QoQ reflecting seasonally lower Capital Markets; solid results in Card and Wealth
-Expenses down 1.3% QoQ notwithstanding continued investment in the Private Bank
■Strong ACL coverage of 1.61%, down 2 bps QoQ
■Period-end loans broadly stable with Non-Core run off offset by Core loan growth, namely Private Bank and retail; period-end Private Bank loans up $634 million to $2.0 billion
■Average deposits stable QoQ; Private Bank spot deposits up $1.6 billion to $5.6 billion
■Strong liquidity profile; spot LDR of 80.8%; FHLB reduced to $553 million, down $6.5 billion YoY on a spot basis
-Pro forma LCR of 122% exceeds Category 1 Bank requirement of 100%
■Net charge-offs of 54 bps, up 2 bps QoQ
■Strong CET1 ratio of 10.6%; TCE ratio of 7.0%
■TBV/share of $33.54, up 9.6% QoQ reflects net AOCI benefit
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Total revenue | $ | 1,901 | $ | 1,963 | $ | 2,014 | |
Pre-provision profit | 642 | 662 | 721 | ||||
Underlying pre-provision profit | 655 | 694 | 743 | ||||
Provision for credit losses | 172 | 182 | 172 | ||||
Net income | 382 | 392 | 430 | ||||
Underlying net income | 392 | 408 | 448 | ||||
Balance Sheet & Credit Quality |
($s in billions) | ||||||
Period-end loans and leases | $ | 141.6 | $ | 141.8 | $ | 149.7 | |
Average loans and leases | 142.0 | 143.1 | 150.8 | ||||
Period-end deposits | 175.2 | 176.4 | 178.2 | ||||
Average deposits | 174.1 | 173.7 | 176.5 | ||||
Period-end loan-to-deposit ratio | 80.8 | % | 80.4 | % | 84.0 | % | |
NCO ratio | 0.54 | % | 0.52 | % | 0.40 | % | |
Financial Metrics | Diluted EPS | $ | 0.77 | $ | 0.78 | $ | 0.85 |
Underlying Diluted EPS | 0.79 | 0.82 | 0.89 | ||||
ROTCE | 9.5 | % | 10.6 | % | 12.0 | % | |
Underlying ROTCE | 9.7 | 11.1 | 12.5 | ||||
Net interest margin, FTE | 2.77 | 2.87 | 3.03 | ||||
Efficiency ratio | 66.2 | 66.3 | 64.2 | ||||
Underlying efficiency ratio | 65.6 | 64.6 | 63.1 | ||||
CET1 | 10.6 | % | 10.7 | % | 10.4 | % | |
TBV/Share | $ | 33.54 | $ | 30.61 | $ | 27.73 |
Notable Items | 3Q24 | |||
($s in millions except per share data) | Pre-tax $ | EPS | ||
Integration-related
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$ | (2) | $ | - |
TOP and Other items | (11) | (0.02) | ||
Total
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$ | (13) | $ | (0.02) |
Comments from Chairman and CEO Bruce Van Saun |
Quarterly Trends | ||||||||||||||
3Q24 change from | ||||||||||||||
($s in millions, except per share data) | 3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | |||||||||
Earnings | $/bps | % | $/bps | % | ||||||||||
Net interest income | $ | 1,369 | $ | 1,410 | $ | 1,522 | $ | (41) | (3) | % | $ | (153) | (10) | % |
Noninterest income | 532 | 553 | 492 | (21) | (4) | 40 | 8 | |||||||
Total revenue | 1,901 | 1,963 | 2,014 | (62) | (3) | (113) | (6) | |||||||
Noninterest expense | 1,259 | 1,301 | 1,293 | (42) | (3) | (34) | (3) | |||||||
Pre-provision profit | 642 | 662 | 721 | (20) | (3) | (79) | (11) | |||||||
Provision for credit losses | 172 | 182 | 172 | (10) | (5) | - | - | |||||||
Net income | 382 | 392 | 430 | (10) | (3) | (48) | (11) | |||||||
Preferred dividends | 38 | 35 | 30 | 3 | 9 | 8 | 27 | |||||||
Net income available to common stockholders | $ | 344 | $ | 357 | $ | 400 | $ | (13) | (4) | % | $ | (56) | (14) | % |
After-tax notable Items | 10 | 16 | 18 | (6) | (38) | (8) | (44) | |||||||
Underlying net income | $ | 392 | $ | 408 | $ | 448 | $ | (16) | (4) | % | $ | (56) | (13) | % |
Underlying net income available to common stockholders | 354 | 373 | 418 | (19) | (5) | (64) | (15) | |||||||
Average common shares outstanding | ||||||||||||||
Basic (in millions) | 446.6 | 454.1 | 469.5 | (7.6) | (2) | (22.9) | (5) | |||||||
Diluted (in millions) | 449.9 | 456.6 | 471.2 | (6.6) | (1) | (21.3) | (5) | |||||||
Diluted earnings per share | $ | 0.77 | $ | 0.78 | $ | 0.85 | $ | (0.01) | (1) | % | $ | (0.08) | (9) | % |
Underlying diluted earnings per share | 0.79 | 0.82 | 0.89 | (0.03) | (4) | (0.10) | (11) | |||||||
Performance metrics | ||||||||||||||
Net interest margin | 2.76 | % | 2.86 | % | 3.03 | % | (10) | bps | (27) | bps | ||||
Net interest margin, FTE | 2.77 | 2.87 | 3.03 | (10) | (26) | |||||||||
Effective income tax rate | 18.6 | 18.5 | 21.5 | 7 | (295) | |||||||||
Efficiency ratio | 66.2 | 66.3 | 64.2 | (4) | 202 | |||||||||
Underlying efficiency ratio | 65.6 | 64.6 | 63.1 | 102 | 253 | |||||||||
Return on average tangible common equity | 9.5 | 10.6 | 12.0 | (116) | (255) | |||||||||
Underlying return on average tangible common equity | 9.7 | 11.1 | 12.5 | (138) | (280) | |||||||||
Return on average total tangible assets | 0.72 | 0.75 | 0.81 | (3) | (9) | |||||||||
Underlying return on average total tangible assets | 0.74 | % | 0.78 | % | 0.84 | % | (4) | bps | (10) | bps | ||||
Capital adequacy(2,3)
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Common equity tier 1 capital ratio | 10.6 | % | 10.7 | % | 10.4 | % | ||||||||
Total capital ratio | 13.9 | 14.0 | 13.4 | |||||||||||
Tier 1 leverage ratio | 9.4 | 9.4 | 9.4 | |||||||||||
Tangible common equity ratio | 7.0 | 6.5 | 5.9 | |||||||||||
Allowance for credit losses to loans and leases | 1.61 | % | 1.63 | % | 1.55 | % | (2) | bps | 6 | bps | ||||
Asset quality(3)
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Nonaccrual loans and leases to loans and leases | 1.19 | % | 1.08 | % | 0.87 | % | 11 | bps | 32 | bps | ||||
Allowance for credit losses to nonaccrual loans and leases | 136 | 151 | 179 | (15) | (43) | |||||||||
Net charge-offs as a % of average loans and leases | 0.54 | % | 0.52 | % | 0.40 | % | 2 | bps | 14 | bps |
Quarterly Trends | ||||||||||||||
3Q24 change from | ||||||||||||||
($s in millions, except per share data) | 3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | |||||||||
$/bps | % | $/bps | % | |||||||||||
Net interest income | $ | 1,369 | $ | 1,410 | $ | 1,522 | $ | (41) | (3) | % | $ | (153) | (10) | % |
Noninterest income | 534 | 549 | 492 | (15) | (3) | 42 | 9 | |||||||
Total revenue | $ | 1,903 | $ | 1,959 | $ | 2,014 | $ | (56) | (3) | % | $ | (111) | (6) | % |
Noninterest expense | 1,248 | 1,265 | 1,271 | (17) | (1) | (23) | (2) | |||||||
Provision for credit losses | 172 | 182 | 172 | (10) | (5) | - | - | |||||||
Net income available to common stockholders | $ | 354 | $ | 373 | $ | 418 | $ | (19) | (5) | % | $ | (64) | (15) | % |
Performance metrics | ||||||||||||||
EPS | $ | 0.79 | $ | 0.82 | $ | 0.89 | $ | (0.03) | (4) | % | $ | (0.10) | (11) | % |
Efficiency ratio | 65.6 | % | 64.6 | % | 63.1 | % | 102 | bps | 253 | bps | ||||
Return on average tangible common equity | 9.7 | % | 11.1 | % | 12.5 | % | (138) | bps | (280) | bps |
3Q24 change from | ||||||||||||||
($s in millions) | 3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | |||||||||
$/bps | % | $/bps | % | |||||||||||
Total assets | $ | 219,706 | $ | 219,938 | $ | 225,270 | $ | (232) | - | % | $ | (5,564) | (2) | % |
Total loans and leases | 141,632 | 141,842 | 149,746 | (210) | - | (8,114) | (5) | |||||||
Total loans held for sale | 663 | 683 | 848 | (20) | (3) | (185) | (22) | |||||||
Deposits | 175,188 | 176,352 | 178,197 | (1,164) | (1) | (3,009) | (2) | |||||||
Stockholders' equity | 24,932 | 23,869 | 22,878 | 1,063 | 4 | 2,054 | 9 | |||||||
Stockholders' common equity | 22,819 | 21,757 | 20,864 | 1,062 | 5 | 1,955 | 9 | |||||||
Tangible common equity | $ | 14,930 | $ | 13,866 | $ | 12,930 | $ | 1,064 | 8 | % | $ | 2,000 | 15 | % |
Loan-to-deposit ratio (period-end)(2)
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80.8 | % | 80.4 | % | 84.0 | % | 42 | bps | (318) | bps | ||||
Loan-to-deposit ratio (average)(2)
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81.6 | % | 82.4 | % | 85.5 | % | (79) | bps | (387) | bps | ||||
(1) Represents period-end unless otherwise noted. | ||||||||||||||
(2) Excludes loans held for sale. |
Notable items - Integration-related | 3Q24 | 2Q24 | 3Q23 | |||||||||
($s in millions, except per share data) | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | ||||||
Salaries & benefits | $ | (2) | $ | (2) | $ | (3) | $ | (2) | $ | (4) | $ | (3) |
Equipment and software | - | - | - | - | - | - | ||||||
Outside services | - | - | - | - | (4) | (3) | ||||||
Occupancy | - | - | - | - | - | - | ||||||
Other expense | - | - | - | - | - | - | ||||||
Noninterest expense | $ | (2) | $ | (2) | $ | (3) | $ | (2) | $ | (8) | $ | (6) |
EPS Impact - Noninterest expense | $ | - | $ | (0.01) | $ | (0.02) | ||||||
Total integration related | $ | (2) | $ | (2) | $ | (3) | $ | (2) | $ | (8) | $ | (6) |
EPS Impact - Total Integration-related | $ | - | $ | (0.01) | $ | (0.02) | ||||||
Other notable items - TOP & Other | 3Q24 | 2Q24 | 3Q23 | |||||||||
($s in millions, except per share data) | Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | ||||||
Tax notable items | $ | - | $ | - | $ | - | $ | 7 | $ | - | $ | - |
Noninterest income | (2) | (1) | 4 | 3 | - | - | ||||||
Salaries & benefits | (2) | (2) | (5) | (4) | (1) | - | ||||||
Equipment and software | (2) | (2) | (4) | (3) | (6) | (5) | ||||||
Outside services | (2) | (2) | (10) | (7) | (3) | (3) | ||||||
Occupancy | (1) | - | (6) | (4) | (2) | (2) | ||||||
FDIC special assessment(1)
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- | - | (5) | (4) | - | - | ||||||
Other expense | (2) | (1) | (3) | (2) | (2) | (2) | ||||||
Noninterest expense | $ | (9) | $ | (7) | $ | (33) | $ | (24) | $ | (14) | $ | (12) |
Total Other Notable Items | $ | (11) | $ | (8) | $ | (29) | $ | (14) | $ | (14) | $ | (12) |
EPS Impact - Other Notable Items | $ | (0.02) | $ | (0.03) | $ | (0.02) | ||||||
Total Notable Items | $ | (13) | $ | (10) | $ | (32) | $ | (16) | $ | (22) | $ | (18) |
Total EPS Impact | $ | (0.02) | $ | (0.04) | $ | (0.04) | ||||||
(1) The FDIC special assessment earnings per share impact is $(0.01) for second quarter 2024.
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Net interest income | 3Q24 change from | |||||||||||||
($s in millions) | 3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | |||||||||
$/bps | % | $/bps | % | |||||||||||
Interest income: | ||||||||||||||
Interest and fees on loans and leases and loans held for sale | $ | 1,995 | $ | 2,028 | $ | 2,194 | $ | (33) | (2) | % | $ | (199) | (9) | % |
Investment securities | 423 | 417 | 290 | 6 | 1 | 133 | 46 | |||||||
Interest-bearing deposits in banks | 121 | 130 | 111 | (9) | (7) | 10 | 9 | |||||||
Total interest income | $ | 2,539 | $ | 2,575 | $ | 2,595 | $ | (36) | (1) | % | $ | (56) | (2) | % |
Interest expense: | ||||||||||||||
Deposits | $ | 990 | $ | 965 | $ | 898 | $ | 25 | 3 | % | $ | 92 | 10 | % |
Short-term borrowed funds | 3 | 4 | 8 | (1) | (25) | (5) | (63) | |||||||
Long-term borrowed funds | 177 | 196 | 167 | (19) | (10) | 10 | 6 | |||||||
Total interest expense | $ | 1,170 | $ | 1,165 | $ | 1,073 | $ | 5 | - | % | $ | 97 | 9 | % |
Net interest income | $ | 1,369 | $ | 1,410 | $ | 1,522 | $ | (41) | (3) | % | $ | (153) | (10) | % |
Net interest margin, FTE | 2.77 | % | 2.87 | % | 3.03 | % | (10) | bps | (26) | bps | ||||
Third quarter 2024 | vs. | second quarter 2024 |
Third quarter 2024 | vs. | third quarter 2023 |
Noninterest Income | 3Q24 change from | |||||||||||||
($s in millions) | 3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | |||||||||
$ | % | $ | % | |||||||||||
Service charges and fees | $ | 109 | $ | 106 | $ | 105 | $ | 3 | 3 | % | $ | 4 | 4 | % |
Capital markets fees | 94 | 134 | 67 | (40) | (30) | 27 | 40 | |||||||
Card fees | 93 | 92 | 74 | 1 | 1 | 19 | 26 | |||||||
Wealth fees(1)
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76 | 75 | 63 | 1 | 1 | 13 | 21 | |||||||
Mortgage banking fees | 46 | 54 | 69 | (8) | (15) | (23) | (33) | |||||||
Foreign exchange and derivative products | 36 | 39 | 48 | (3) | (8) | (12) | (25) | |||||||
Letter of credit and loan fees | 45 | 43 | 43 | 2 | 5 | 2 | 5 | |||||||
Securities gains, net | 9 | - | 5 | 9 | 100 | 4 | 80 | |||||||
Other income(2)
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24 | 10 | 18 | 14 | 140 | 6 | 33 | |||||||
Noninterest income | $ | 532 | $ | 553 | $ | 492 | $ | (21) | (4) | % | $ | 40 | 8 | % |
Underlying, as applicable | ||||||||||||||
Card fees | $ | 87 | $ | 88 | $ | 74 | $ | (1) | (1) | $ | 13 | 18 | ||
Other income(2)
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$ | 32 | $ | 10 | $ | 18 | $ | 22 | 220 | $ | 14 | 78 | ||
Underlying noninterest income | $ | 534 | $ | 549 | $ | 492 | $ | (15) | (3) | % | $ | 42 | 9 | % |
(1) Effective for 2Q24, Trust and Investment services fees was renamed to Wealth Fees to better reflect the broad range of wealth-related management fees and services provided to our customers.
(2) Includes bank-owned life insurance income and other miscellaneous income for all periods presented.
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Third quarter 2024 | vs. | second quarter 2024 |
Third quarter 2024 | vs. | third quarter 2023 |
Noninterest Expense | 3Q24 change from | |||||||||||||
($s in millions) | 3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | |||||||||
$ | % | $ | % | |||||||||||
Salaries and employee benefits | $ | 647 | $ | 645 | $ | 659 | $ | 2 | - | % | $ | (12) | (2) | % |
Equipment and software | 194 | 190 | 191 | 4 | 2 | 3 | 2 | |||||||
Outside services | 146 | 165 | 160 | (19) | (12) | (14) | (9) | |||||||
Occupancy | 108 | 113 | 107 | (5) | (4) | 1 | 1 | |||||||
Other operating expense | 164 | 188 | 176 | (24) | (13) | (12) | (7) | |||||||
Noninterest expense | $ | 1,259 | $ | 1,301 | $ | 1,293 | $ | (42) | (3) | % | $ | (34) | (3) | % |
Notable items | $ | 11 | $ | 36 | $ | 22 | $ | (25) | (69) | % | $ | (11) | (50)% | |
Underlying, as applicable | ||||||||||||||
Salaries and employee benefits | $ | 643 | $ | 637 | $ | 654 | $ | 6 | 1 | % | $ | (11) | (2) | % |
Equipment and software | 192 | 186 | 185 | 6 | 3 | 7 | 4 | |||||||
Outside services | 144 | 155 | 153 | (11) | (7) | (9) | (6) | |||||||
Occupancy | 107 | 107 | 105 | - | - | 2 | 2 | |||||||
Other operating expense | 162 | 180 | 174 | (18) | (10) | (12) | (7) | |||||||
Underlying noninterest expense | $ | 1,248 | $ | 1,265 | $ | 1,271 | $ | (17) | (1) | % | $ | (23) | (2) | % |
Third quarter 2024 | vs. | second quarter 2024 |
Third quarter 2024 | vs. | third quarter 2023 |
Interest-earning assets | 3Q24 change from | |||||||||||||
($s in millions) | 3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | |||||||||
Period-end interest-earning assets | $ | % | $ | % | ||||||||||
Investments | $ | 42,428 | $ | 41,677 | $ | 35,547 | $ | 751 | 2 | % | $ | 6,881 | 19 | % |
Interest-bearing deposits in banks | 10,584 | 11,139 | 14,329 | (555) | (5) | (3,745) | (26) | |||||||
Commercial loans and leases | 71,808 | 71,934 | 77,457 | (126) | - | (5,649) | (7) | |||||||
Retail loans | 69,824 | 69,908 | 72,289 | (84) | - | (2,465) | (3) | |||||||
Total loans and leases | 141,632 | 141,842 | 149,746 | (210) | - | (8,114) | (5) | |||||||
Loans held for sale, at fair value | 614 | 591 | 749 | 23 | 4 | (135) | (18) | |||||||
Other loans held for sale | 49 | 92 | 99 | (43) | (47) | (50) | (51) | |||||||
Total loans and leases and loans held for sale | 142,295 | 142,525 | 150,594 | (230) | - | (8,299) | (6) | |||||||
Total period-end interest-earning assets | $ | 195,307 | $ | 195,341 | $ | 200,470 | $ | (34) | - | % | $ | (5,163) | (3) | % |
Average interest-earning assets
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Investments(1)
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$ | 45,084 | $ | 44,692 | $ | 39,273 | $ | 392 | 1 | % | $ | 5,811 | 15 | % |
Interest-bearing deposits in banks | 8,896 | 9,650 | 8,005 | (754) | (8) | 891 | 11 | |||||||
Commercial loans and leases | 72,280 | 72,955 | 78,261 | (675) | (1) | (5,981) | (8) | |||||||
Retail loans | 69,723 | 70,112 | 72,530 | (389) | (1) | (2,807) | (4) | |||||||
Total loans and leases | 142,003 | 143,067 | 150,791 | (1,064) | (1) | (8,788) | (6) | |||||||
Loans held for sale, at fair value | 1,108 | 896 | 1,204 | 212 | 24 | (96) | (8) | |||||||
Other loans held for sale | 73 | 160 | 321 | (87) | (54) | (248) | (77) | |||||||
Total loans and leases and loans held for sale | 143,184 | 144,123 | 152,316 | (939) | (1) | (9,132) | (6) | |||||||
Total average interest-earning assets | $ | 197,164 | $ | 198,465 | $ | 199,594 | $ | (1,301) | (1) | % | $ | (2,430) | (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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Third quarter 2024 | vs. | second quarter 2024 |
Third quarter 2024 | vs. | third quarter 2023 |
Deposits | 3Q24 change from | |||||||||||||
($s in millions) | 3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | |||||||||
Period-end deposits | $ | % | $ | % | ||||||||||
Demand
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$ | 35,978 | $ | 36,927 | $ | 38,561 | $ | (949) | (3) | % | $ | (2,583) | (7) | % |
Money market | 54,654 | 52,599 | 53,517 | 2,055 | 4 | 1,137 | 2 | |||||||
Checking with interest | 33,680 | 34,421 | 33,355 | (741) | (2) | 325 | 1 | |||||||
Savings | 26,489 | 27,240 | 29,139 | (751) | (3) | (2,650) | (9) | |||||||
Term | 24,387 | 25,165 | 23,625 | (778) | (3) | 762 | 3 | |||||||
Total period-end deposits | $ | 175,188 | $ | 176,352 | $ | 178,197 | $ | (1,164) | (1) | % | $ | (3,009) | (2) | % |
Average deposits | ||||||||||||||
Demand
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$ | 36,236 | $ | 36,205 | $ | 39,728 | $ | 31 | - | % | $ | (3,492) | (9) | % |
Money market | 53,152 | 51,570 | 52,057 | 1,582 | 3 | 1,095 | 2 | |||||||
Checking with interest | 33,090 | 33,659 | 33,545 | (569) | (2) | (455) | (1) | |||||||
Savings | 26,868 | 27,560 | 29,516 | (692) | (3) | (2,648) | (9) | |||||||
Term | 24,705 | 24,676 | 21,604 | 29 | - | 3,101 | 14 | |||||||
Total average deposits | $ | 174,051 | $ | 173,670 | $ | 176,450 | $ | 381 | - | % | $ | (2,399) | (1) | % |
Third quarter 2024 | vs. | second quarter 2024 |
Third quarter 2024 | vs. | third quarter 2023 |
Borrowed Funds | 3Q24 change from | |||||||||||||
($s in millions) | 3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | |||||||||
Period-end borrowed funds | $ | % | $ | % | ||||||||||
Short-term borrowed funds | $ | 15 | $ | 2 | $ | 232 | $ | 13 | NM | $ | (217) | (94) | % | |
Long-term borrowed funds | ||||||||||||||
FHLB advances | 553 | 553 | 7,036 | - | - | (6,483) | (92) | |||||||
Senior debt | 7,766 | 6,512 | 5,258 | 1,254 | 19 | 2,508 | 48 | |||||||
Subordinated debt and other debt | 1,824 | 1,827 | 1,815 | (3) | - | 9 | - | |||||||
Auto collateralized borrowings | 3,801 | 4,190 | 3,245 | (389) | (9) | 556 | 17 | |||||||
Total borrowed funds | $ | 13,959 | $ | 13,084 | $ | 17,586 | $ | 875 | 7 | % | $ | (3,627) | (21) | % |
Average borrowed funds | ||||||||||||||
Short-term borrowed funds | $ | 150 | $ | 325 | $ | 506 | $ | (175) | (54) % | $ | (356) | (70) | % | |
Long-term borrowed funds | ||||||||||||||
FHLB advances | 477 | 2,375 | 4,023 | (1,898) | (80) | (3,546) | (88) | |||||||
Senior debt | 7,462 | 6,684 | 5,259 | 778 | 12 | 2,203 | 42 | |||||||
Subordinated debt and other debt | 1,758 | 1,826 | 1,814 | (68) | (4) | (56) | (3) | |||||||
Auto collateralized borrowings | 3,993 | 4,207 | 2,106 | (214) | (5) | 1,887 | 90 | |||||||
Total average borrowed funds | $ | 13,840 | $ | 15,417 | $ | 13,708 | $ | (1,577) | (10) | % | $ | 132 | 1 | % |
Third quarter 2024 | vs. | second quarter 2024 |
Third quarter 2024 | vs. | third quarter 2023 |
Capital | 3Q24 change from | |||||||||||||
($s and shares in millions, except per share data) | 3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | |||||||||
Period-end capital | $ | % | $ | % | ||||||||||
Stockholders' equity | $ | 24,932 | $ | 23,869 | $ | 22,878 | $ | 1,063 | 4 | % | $ | 2,054 | 9 | % |
Stockholders' common equity | 22,819 | 21,757 | 20,864 | 1,062 | 5 | 1,955 | 9 | |||||||
Tangible common equity | 14,930 | 13,866 | 12,930 | 1,064 | 8 | 2,000 | 15 | |||||||
Tangible book value per common share | $ | 33.54 | $ | 30.61 | $ | 27.73 | $ | 2.93 | 10 | % | $ | 5.81 | 21 | % |
Common shares - at end of period | 445.2 | 453.0 | 466.2 | (7.7) | (2) | (21.0) | (5) | |||||||
Common shares - average (diluted) | 449.9 | 456.6 | 471.2 | (6.6) | (1) | % | (21.3) | (5) | % | |||||
Common equity tier 1 capital ratio(1)
|
10.6 | % | 10.7 | % | 10.4 | % | ||||||||
Total capital ratio(1)
|
13.9 | 14.0 | 13.4 | |||||||||||
Tangible common equity ratio | 7.0 | 6.5 | 5.9 | |||||||||||
Tier 1 leverage ratio(1)
|
9.4 | 9.4 | 9.4 | |||||||||||
(1) Current reporting-period regulatory capital ratios are preliminary. |
Third quarter 2024 |
Credit quality review | 3Q24 change from | |||||||||||||
($s in millions) | 3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | |||||||||
$/bps | % | $/bps | % | |||||||||||
Nonaccrual loans and leases(1)
|
$ | 1,687 | $ | 1,527 | $ | 1,296 | $ | 160 | 10 | % | $ | 391 | 30 | % |
90+ days past due and accruing(2)
|
169 | 228 | 248 | (59) | (26) | (79) | (32) | |||||||
Net charge-offs | 192 | 184 | 153 | 8 | 4 | 39 | 25 | |||||||
Provision for credit losses | 172 | 182 | 172 | (10) | (5) | - | - | |||||||
Allowance for credit losses | $ | 2,286 | $ | 2,306 | $ | 2,318 | $ | (20) | (1) | % | $ | (32) | (1) | % |
Nonaccrual loans and leases to loans and leases | 1.19 | % | 1.08 | % | 0.87 | % | 11 | bps | 32 | |||||
Net charge-offs as a % of total loans and leases | 0.54 | 0.52 | 0.40 | 2 | 14 | |||||||||
Allowance for credit losses to loans and leases | 1.61 | 1.63 | 1.55 | (2) | 6 | |||||||||
Allowance for credit losses to nonaccrual loans and leases | 136 | % | 151 | % | 179 | % | (15) | bps | (43) | 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 $145 million, $168 million, and $216 million of loans fully or partially guaranteed by the FHA, VA, and USDA for September 30, 2024, June 30, 2024, and September 30, 2023, respectively.
|
Third quarter 2024 | vs. | second quarter 2024 |
Third quarter 2024 | vs. | third quarter 2023 |
QUARTERLY TRENDS | ||||||||||
3Q24 Change | ||||||||||
3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | ||||||
$ | % | $ | % | |||||||
Noninterest income, Underlying: | ||||||||||
Noninterest income (GAAP) | $532 | $553 | $492 | ($21) | (4 | %) | $40 | 8 | % | |
Less: Notable items | (2) | 4 | - | (6) | (150) | (2) | (100) | |||
Noninterest income, Underlying (non-GAAP) | $534 | $549 | $492 | ($15) | (3 | %) | $42 | 9 | % | |
Total revenue, Underlying: | ||||||||||
Total revenue (GAAP) | A | $1,901 | $1,963 | $2,014 | ($62) | (3 | %) | ($113) | (6 | %) |
Less: Notable items | (2) | 4 | - | (6) | (150) | (2) | (100) | |||
Total revenue, Underlying (non-GAAP) | B | $1,903 | $1,959 | $2,014 | ($56) | (3 | %) | ($111) | (6 | %) |
Noninterest expense, Underlying: | ||||||||||
Noninterest expense (GAAP) | C | $1,259 | $1,301 | $1,293 | ($42) | (3 | %) | ($34) | (3 | %) |
Less: Notable items | 11 | 36 | 22 | (25) | (69) | (11) | (50) | |||
Noninterest expense, Underlying (non-GAAP) | D | $1,248 | $1,265 | $1,271 | ($17) | (1 | %) | ($23) | (2 | %) |
Pre-provision profit: | ||||||||||
Total revenue (GAAP) | A | $1,901 | $1,963 | $2,014 | ($62) | (3 | %) | ($113) | (6 | %) |
Less: Noninterest expense (GAAP) | C | 1,259 | 1,301 | 1,293 | (42) | (3) | (34) | (3) | ||
Pre-provision profit (non-GAAP)
|
$642 | $662 | $721 | ($20) | (3 | %) | ($79) | (11 | %) | |
Pre-provision profit, Underlying: | ||||||||||
Total revenue, Underlying (non-GAAP) | B | $1,903 | $1,959 | $2,014 | ($56) | (3 | %) | ($111) | (6 | %) |
Less: Noninterest expense, Underlying (non-GAAP) | D | 1,248 | 1,265 | 1,271 | (17) | (1) | (23) | (2) | ||
Pre-provision profit, Underlying (non-GAAP) | $655 | $694 | $743 | ($39) | (6 | %) | ($88) | (12 | %) | |
Income before income tax expense, Underlying: | ||||||||||
Income before income tax expense (GAAP) | E | $470 | $480 | $549 | ($10) | (2 | %) | ($79) | (14 | %) |
Less: Income (expense) before income tax expense (benefit) related to notable items | (13) | (32) | (22) | 19 | 59 | 9 | 41 | |||
Income before income tax expense, Underlying (non-GAAP) | F | $483 | $512 | $571 | ($29) | (6 | %) | ($88) | (15 | %) |
Income tax expense, Underlying: | ||||||||||
Income tax expense (GAAP) | G | $88 | $88 | $119 | $- | - | % | ($31) | (26 | %) |
Less: Income tax expense (benefit) related to notable items | (3) | (16) | (4) | 13 | 81 | 1 | 25 | |||
Income tax expense, Underlying (non-GAAP) | H | $91 | $104 | $123 | ($13) | (13 | %) | ($32) | (26 | %) |
Net income, Underlying: | ||||||||||
Net income (GAAP) | I | $382 | $392 | $430 | ($10) | (3 | %) | ($48) | (11 | %) |
Add: Notable items, net of income tax benefit | 10 | 16 | 18 | (6) | (38) | (8) | (44) | |||
Net income, Underlying (non-GAAP) | J | $392 | $408 | $448 | ($16) | (4 | %) | ($56) | (13 | %) |
Net income available to common stockholders, Underlying: | ||||||||||
Net income available to common stockholders (GAAP) | K | $344 | $357 | $400 | ($13) | (4 | %) | ($56) | (14 | %) |
Add: Notable items, net of income tax benefit | 10 | 16 | 18 | (6) | (38) | (8) | (44) | |||
Net income available to common stockholders, Underlying (non-GAAP) | L | $354 | $373 | $418 | ($19) | (5 | %) | ($64) | (15 | %) |
QUARTERLY TRENDS | |||||||||||
3Q24 Change | |||||||||||
3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | |||||||
$/bps | % | $/bps | % | ||||||||
Operating leverage: | |||||||||||
Total revenue (GAAP) | A | $1,901 | $1,963 | $2,014 | ($62) | (3.23 | %) | ($113) | (5.67 | %) | |
Less: Noninterest expense (GAAP) | C | 1,259 | 1,301 | 1,293 | (42) | (3.28) | (34) | (2.69) | |||
Operating leverage | 0.05 | % | (2.98 | %) | |||||||
Operating leverage, Underlying: | |||||||||||
Total revenue, Underlying (non-GAAP) | B | $1,903 | $1,959 | $2,014 | ($56) | (2.88 | %) | ($111) | (5.54 | %) | |
Less: Noninterest expense, Underlying (non-GAAP) | D | 1,248 | 1,265 | 1,271 | (17) | (1.35) | (23) | (1.75) | |||
Operating leverage, Underlying (non-GAAP) | (1.53 | %) | (3.79 | %) | |||||||
Efficiency ratio and efficiency ratio, Underlying: | |||||||||||
Efficiency ratio | C/A | 66.23 | % | 66.27 | % | 64.21 | % | (4) | bps | 202 | bps |
Efficiency ratio, Underlying (non-GAAP) | D/B | 65.61 | 64.59 | 63.08 | 102 | bps | 253 | bps | |||
Effective income tax rate and effective income tax rate, Underlying: | |||||||||||
Effective income tax rate | G/E | 18.56 | % | 18.49 | % | 21.51 | % | 7 | bps | (295) | bps |
Effective income tax rate, Underlying (non-GAAP) | H/F | 18.75 | 20.33 | 21.69 | (158) | bps | (294) | bps | |||
Return on average tangible common equity and return on average tangible common equity, Underlying: | |||||||||||
Average common equity (GAAP) | M | $22,380 | $21,427 | $21,177 | $953 | 4 | % | $1,203 | 6 | % | |
Less: Average goodwill (GAAP) | 8,187 | 8,188 | 8,188 | (1) | - | (1) | - | ||||
Less: Average other intangibles (GAAP) | 140 | 144 | 173 | (4) | (3) | (33) | (19) | ||||
Add: Average deferred tax liabilities related to goodwill and other intangible assets (GAAP) | 435 | 432 | 422 | 3 | 1 | 13 | 3 | ||||
Average tangible common equity | N | $14,488 | $13,527 | $13,238 | $961 | 7 | % | $1,250 | 9 | % | |
Return on average tangible common equity | K/N | 9.45 | % | 10.61 | % | 12.00 | % | (116) | bps | (255) | bps |
Return on average tangible common equity, Underlying (non-GAAP) | L/N | 9.71 | 11.09 | 12.51 | (138) | bps | (280) | bps | |||
Return on average total tangible assets and return on average total tangible assets, Underlying: | |||||||||||
Average total assets (GAAP) | O | $218,578 | $219,222 | $220,162 | ($644) | - | % | ($1,584) | (1 | %) | |
Less: Average goodwill (GAAP) | 8,187 | 8,188 | 8,188 | (1) | - | (1) | - | ||||
Less: Average other intangibles (GAAP) | 140 | 144 | 173 | (4) | (3) | (33) | (19) | ||||
Add: Average deferred tax liabilities related to goodwill and other intangible assets (GAAP) | 435 | 432 | 422 | 3 | 1 | 13 | 3 | ||||
Average tangible assets | P | $210,686 | $211,322 | $212,223 | ($636) | - | % | ($1,537) | (1 | %) | |
Return on average total tangible assets | I/P | 0.72 | % | 0.75 | % | 0.81 | % | (3) | bps | (9) | bps |
Return on average total tangible assets, Underlying (non-GAAP) | J/P | 0.74 | 0.78 | 0.84 | (4) | bps | (10) | bps |
QUARTERLY TRENDS | ||||||||||
3Q24 Change | ||||||||||
3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | ||||||
$/bps | % | $/bps | % | |||||||
Tangible book value per common share: | ||||||||||
Common shares - at period-end (GAAP) | Q | 445,216,549 | 452,961,853 | 466,221,795 | (7,745,304) | (2 | %) | (21,005,246) | (5 | %) |
Common stockholders' equity (GAAP) | $22,819 | $21,757 | $20,864 | $1,062 | 5 | $1,955 | 9 | |||
Less: Goodwill (GAAP) | 8,187 | 8,187 | 8,188 | - | - | (1) | - | |||
Less: Other intangible assets (GAAP) | 137 | 139 | 167 | (2) | (1) | (30) | (18) | |||
Add: Deferred tax liabilities related to goodwill and other intangible assets (GAAP) | 435 | 435 | 421 | - | - | 14 | 3 | |||
Tangible common equity | R | $14,930 | $13,866 | $12,930 | $1,064 | 8 | % | $2,000 | 15 | % |
Tangible book value per common share | R/Q | $33.54 | $30.61 | $27.73 | $2.93 | 10 | % | $5.81 | 21 | % |
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 | 446,561,996 | 454,142,489 | 469,481,085 | (7,580,493) | (2 | %) | (22,919,089) | (5 | %) |
Average common shares outstanding - diluted (GAAP) | T | 449,913,467 | 456,561,022 | 471,183,719 | (6,647,555) | (1) | (21,270,252) | (5) | ||
Net income per average common share - basic (GAAP) | K/S | $0.77 | $0.79 | $0.85 | ($0.02) | (3) | ($0.08) | (9) | ||
Net income per average common share - diluted (GAAP) | K/T | 0.77 | 0.78 | 0.85 | (0.01) | (1) | (0.08) | (9) | ||
Net income per average common share - basic, Underlying (non-GAAP) | L/S | 0.79 | 0.82 | 0.89 | (0.03) | (4) | (0.10) | (11) | ||
Net income per average common share - diluted, Underlying (non-GAAP) | L/T | 0.79 | 0.82 | 0.89 | (0.03) | (4) | (0.10) | (11) |
QUARTERLY TRENDS | |||||||||
3Q24 Change | |||||||||
3Q24 | 2Q24 | 3Q23 | 2Q24 | 3Q23 | |||||
$/bps | % | $/bps | % | ||||||
Card fees, Underlying: | |||||||||
Card fees (GAAP) | $93 | $92 | $74 | $1 | 1 | $19 | 26% | ||
Less: Notable items | 6 | 4 | - | 2 | 50 | 6 | 100 | ||
Card fees, Underlying (non-GAAP) | $87 | $88 | $74 | ($1) | (1) | $13 | 18 | % | |
Other income, Underlying:
|
|||||||||
Other income (GAAP) | $24 | $10 | $18 | $14 | 140 | $6 | 33% | ||
Less: Notable items | (8) | - | - | (8) | (100) | (8) | (100) | ||
Other income, Underlying (non-GAAP) | $32 | $10 | $18 | $22 | 220 | $14 | 78 | % | |
Salaries and employee benefits, Underlying: | |||||||||
Salaries and employee benefits (GAAP) | $647 | $645 | $659 | $2 | - | % | ($12) | (2 | %) |
Less: Notable items | 4 | 8 | 5 | (4) | (50) | (1) | (20) | ||
Salaries and employee benefits, Underlying (non-GAAP) | $643 | $637 | $654 | $6 | 1 | % | ($11) | (2 | %) |
Equipment and software, Underlying: | |||||||||
Equipment and software(GAAP)
|
$194 | $190 | $191 | $4 | 2 | % | $3 | 2 | % |
Less: Notable items | 2 | 4 | 6 | (2) | (50) | (4) | (67) | ||
Equipment and software, Underlying (non-GAAP) | $192 | $186 | $185 | $6 | 3 | % | $7 | 4 | % |
Outside services, Underlying: | |||||||||
Outside services (GAAP) | $146 | $165 | $160 | ($19) | (12 | %) | ($14) | (9 | %) |
Less: Notable items | 2 | 10 | 7 | (8) | (80) | (5) | (71) | ||
Outside services, Underlying (non-GAAP) | $144 | $155 | $153 | ($11) | (7 | %) | ($9) | (6 | %) |
Occupancy, Underlying: | |||||||||
Occupancy (GAAP) | $108 | $113 | $107 | ($5) | (4 | %) | $1 | 1 | % |
Less: Notable items | 1 | 6 | 2 | (5) | (83) | (1) | (50) | ||
Occupancy, Underlying (non-GAAP) | $107 | $107 | $105 | $- | - | % | $2 | 2 | % |
Other operating expense, Underlying: | |||||||||
Other operating expense (GAAP) | $164 | $188 | $176 | ($24) | (13 | %) | ($12) | (7 | %) |
Less: Notable items | 2 | 8 | 2 | (6) | (75) | - | - | ||
Other operating expense, Underlying (non-GAAP) | $162 | $180 | $174 | ($18) | (10 | %) | ($12) | (7 | %) |