First Citizens BancShares Reports Third Quarter 2023 Earnings
RALEIGH, N.C., Oct. 26, 2023 /PRNewswire/ -- First Citizens BancShares, Inc. ("BancShares") (Nasdaq: FCNCA) reported earnings for the third quarter ended September 30, 2023.
Chairman and CEO Frank B. Holding, Jr. said: "Our third quarter financial results were solid, marked by strong revenue growth and disciplined expense management. We continued to make great progress in our integration efforts with SVB. We continue to increase awareness that SVB is open for business and that we remain dedicated to supporting the innovation economy. We remain focused on managing credit risk prudently and our capital and liquidity positions remained solid due to strong earnings performance and our continued focus on core deposit gathering. We believe we are well-positioned to continue generating long-term tangible book value growth for our stockholders."
PURCHASE AND ASSUMPTION OF CERTAIN ASSETS AND LIABILITIES OF SILICON VALLEY BRIDGE BANK FROM THE FDIC
On March 27, 2023, BancShares announced that through its banking subsidiary, First-Citizens Bank & Trust Company, it assumed all customer deposits and certain other liabilities and acquired substantially all loans and certain other assets of Silicon Valley Bridge Bank, N.A. (the "Acquisition"), as successor to Silicon Valley Bank, from the Federal Deposit Insurance Corporation (the "FDIC"). In connection with the Acquisition, BancShares identified a new business segment (the "SVB segment") which includes the assets, liabilities and results of operations related to the Acquisition.
The Acquisition included total assets with estimated fair values of approximately $107.54 billion, total loans with estimated fair values of approximately $68.47 billion, including the Global Fund Banking, Private Bank and Technology & Life Science and Healthcare loan portfolios, and $35.31 billion in cash and interest-earning deposits at banks. BancShares also assumed approximately $56.01 billion in customer deposits and entered into a five-year note payable to the FDIC (the "Purchase Money Note") of approximately $36.07 billion, bearing an interest rate of 3.50%. The deposits were acquired without a premium and the assets were acquired at a discount of $16.45 billion.
FINANCIAL HIGHLIGHTS
Measures referenced as adjusted below are non-GAAP financial measures (refer to the supporting tables for a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure). Net income for the three months ended September 30, 2023 was $752 million compared to $682 million for the three months ended June 30, 2023. Net income available to common stockholders for the three months ended September 30, 2023 was $737 million, or $50.67 per diluted common share, a $70 million increase from $667 million, or $45.87 per diluted common share, in the second quarter of 2023.
For the third quarter, adjusted net income available to common stockholders was $813 million, or $55.92 per diluted common share, a $48 million increase from $765 million, or $52.60 per diluted common share, in the second quarter of 2023.
Third quarter 2023 results were impacted by the following notable items:
- Acquisition-related expenses of $121 million,
- Additional preliminary gain on acquisition of $12 million (net of tax),
- Intangible asset amortization of $17 million,
- Gain on sale of leasing equipment of $10 million, and
- Realized loss on sales of investment securities available for sale of $12 million.
Financial highlights comparing significant components of net income and adjusted net income from the third quarter of 2023 to the second quarter of 2023 are summarized below:
- Net interest income totaled $1.99 billion, up from $1.96 billion in the second quarter. The $29 million increase in net interest income was due to a $157 million increase in interest income, partially offset by a $128 million increase in interest expense.
- The increase in interest income of $157 million was due to increases of $73 million for interest on loans, $60 million for interest on investment securities, and $24 million for interest on interest-earning deposits at banks. The increase in interest on loans was attributable to an increase in loan accretion of $32 million, primarily related to the Acquisition, a higher yield, and loan growth in both the General Bank and Commercial Bank. The increase in interest income on investment securities was a result of a higher average balance and a higher yield. The increase in interest income on interest-earning deposits at banks was due to a higher yield.
- The $128 million increase in interest expense was due to a $194 million increase in interest expense on deposits from growth in the Direct Bank and a higher rate paid, partially offset by a $66 million decrease in borrowing costs from a lower average balance and rate paid.
- Net interest margin was 4.07%, a decrease of 3 basis points compared to the second quarter. The yield on interest-earning assets was 6.36%, an increase of 18 basis points over the second quarter. The increase in yield on interest-earning assets was primarily due to a 22 basis points increase in the yield on loans. The increase was mostly related to variable rate loan resets and the previously discussed increase in accretion on acquired loans. The increase in the yield on interest-earning assets was partially offset by a 20 basis points increase in the rate paid on interest-bearing liabilities.
- Noninterest income totaled $615 million compared to $658 million in the second quarter. The decrease was mainly related to a $43 million lower adjustment to the gain on acquisition as we further refined our estimates for the fair value of net assets acquired and liabilities assumed in the Acquisition. Additionally, the $12 million realized loss from the sale of the municipal bond portfolio acquired in the Acquisition was offset by increases of $10 million in rental income on operating lease equipment and $2 million in fee income and other service charges. Adjusted noninterest income totaled $468 million compared to $462 million in the second quarter, an increase of $6 million. The previously discussed increases from rental income on operating lease equipment and fee income and other service charges were partially offset by slight declines of $2 million in wealth management services, $2 million in merchant services, and $2 million in mortgage income.
- Noninterest expense totaled $1.42 billion compared to $1.57 billion in the second quarter, a decrease of $156 million. The decline was largely related to a reduction of $84 million in acquisition-related expenses. Adjusted noninterest expense totaled $1.13 billion compared to $1.20 billion in the second quarter, a decrease of $70 million. The decreases in noninterest expense and adjusted noninterest expense were primarily due to declines of $48 million in salaries and benefits, $16 million in equipment expense, $16 million in marketing expense, and $9 million in professional fees. The declines were partially offset by an increase of $14 million in FDIC insurance expense.
BALANCE SHEET SUMMARY
- Loans totaled $133.20 billion at September 30, 2023, an increase of $187 million compared to $133.02 billion as of June 30, 2023. The increases were mostly related to $1.10 billion of growth in the General Bank (9.7% annualized) and $1.05 billion of growth in the Commercial Bank (14.3% annualized). The growth in the Commercial Bank was broad-based given strong performance in many of our industry verticals. The increases were partially offset by a $1.94 billion decline in the SVB segment, mostly concentrated in Global Fund Banking.
- Total investment securities were $26.82 billion at September 30, 2023, an increase of $4.65 billion compared to $22.17 billion as of June 30, 2023. The increase was primarily due to purchases of approximately $5.38 billion in short duration U.S. Treasury and U.S. agency mortgage-backed investment securities available for sale during the quarter.
- Deposits totaled $146.23 billion at September 30, 2023, an increase of $5.07 billion, or 14.2% on an annualized basis, compared to $141.16 billion as of June 30, 2023. The increase was concentrated in Direct Bank deposits, which grew by $6.42 billion, partially offset by an $890 million decline in the SVB segment. Deposits in the SVB segment totaled $39.97 billion at September 30, 2023 compared to $40.86 billion as of June 30, 2023. Noninterest-bearing deposits represented 29.5% of total deposits as of September 30, 2023, compared to 31.6% of total deposits at June 30, 2023. The cost of average total deposits was 2.12% for the third quarter, up 44 basis points compared to the second quarter.
- Total borrowings decreased $2.43 billion during the third quarter, reflecting the payoff of borrowings from the Federal Home Loan Bank.
PROVISION FOR CREDIT LOSSES AND CREDIT QUALITY
- Provision for credit losses totaled $192 million for the third quarter compared to $151 million in the second quarter, an increase of $41 million. The third quarter total provision for credit losses of $192 million included a $212 million provision for loan and lease losses, partially offset by benefits for credit losses of $3 million for investment securities available for sale and $17 million for off-balance sheet credit exposure. The provision for loan and lease losses increased $43 million compared to the second quarter as a result of deterioration in macroeconomic factors, credit quality, and higher net charge-offs. The benefit for losses for off-balance sheet credit exposure was $17 million in the second and third quarters.
- Net charge-offs totaled $176 million, representing 0.53% of average loans, compared to $157 million, or 0.47% of average loans, during the second quarter. Net charge-offs in the SVB segment were $100 million, an increase of $3 million from the second quarter, and were primarily in early and growth stage investor dependent portfolios. Net charge-offs in the Commercial Bank were $58 million, an increase of $9 million from the second quarter. Consistent with prior quarters, Commercial Bank net charge-offs occurred primarily in the general office and small ticket equipment leasing portfolios.
- Nonaccrual loans were $899 million, or 0.68% of average loans, at September 30, 2023, compared to $929 million, or 0.70% of average loans, at June 30, 2023.
- The allowance for loan and lease losses totaled $1.67 billion, or 1.26% of total loans, at September 30, 2023, an increase of $36 million compared to the second quarter of 2023. The $36 million reserve build for the quarter was a result of deteriorating macroeconomic forecasts, specifically related to declining corporate profits and deterioration in the commercial real estate portfolio. These increases were partially offset by lower specific reserves and lower loan balances in the SVB segment.
CAPITAL AND LIQUIDITY
- Capital position remains strong and capital ratios are well above regulatory requirements. The estimated total risk-based capital, Tier 1 risk-based capital, Common equity Tier 1 risk-based capital, and Tier 1 leverage ratios were 15.64%, 13.82% , 13.23% , and 9.72%, respectively, at September 30, 2023.
- During the third quarter, a dividend of $0.75 per share of common stock was declared.
- Liquidity position remains strong as liquid assets were $57.02 billion at September 30, 2023 compared to $53.42 billion at June 30, 2023.
EARNINGS CALL DETAILS
BancShares will host a conference call to discuss the company's financial results on Thursday, October 26, 2023, at 9:00 a.m. Eastern time.
To access this call, dial:
United States: 1-833-470-1428
Canada: 1-833-950-0062
All other locations: 1-929-526-1599
Access code: 979664
The third quarter 2023 earnings presentation and this news release are available on the company's website at ir.firstcitizens.com. After the event, a replay of the call will be available via webcast at ir.firstcitizens.com.
ABOUT FIRST CITIZENS BANCSHARES
First Citizens BancShares, Inc., a top 20 U.S. financial institution with more than $200 billion in assets, is the financial holding company for First-Citizens Bank & Trust Company ("First Citizens Bank"). Headquartered in Raleigh, N.C., and now celebrating the 125th anniversary of its founding, First Citizens Bank has built a unique legacy of strength, stability and long-term thinking that has spanned generations. First Citizens offers an array of general banking services including a network of more than 500 branches and offices in 30 states; commercial banking expertise delivering best-in-class lending, leasing and other financial services coast to coast; innovation banking serving businesses at every stage; and a nationwide direct bank. First Citizens Bank, Member FDIC. Discover more at firstcitizens.com.
FORWARD-LOOKING STATEMENTS
This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans, asset quality, future performance, and other strategic goals of BancShares. Words such as "anticipates," "believes," "estimates," "expects," "predicts," "forecasts," "intends," "plans," "projects," "targets," "designed," "could," "may," "should," "will," "potential," "continue," "aims" or other similar words and expressions are intended to identify these forward-looking statements. These forward-looking statements are based on BancShares' current expectations and assumptions regarding BancShares' business, the economy, and other future conditions.
Because forward-looking statements relate to future results and occurrences, they are subject to inherent risks, uncertainties, changes in circumstances and other risk factors that are difficult to predict. Many possible events or factors could affect BancShares' future financial results and performance and could cause the actual results, performance or achievements of BancShares to differ materially from any anticipated results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, general competitive, economic, political, geopolitical events (including conflicts in Ukraine, Israel and the Gaza Strip) and market conditions, including changes in competitive pressures among financial institutions and the impacts related to or resulting from recent bank failures and other volatility, the financial success or changing conditions or strategies of BancShares' vendors or customers, including changes in demand for deposits, loans and other financial services, fluctuations in interest rates, changes in the quality or composition of BancShares' loan or investment portfolio, actions of government regulators, including the recent and projected interest rate hikes by the Board of Governors of the Federal Reserve Board (the "Federal Reserve"), changes to estimates of future costs and benefits of actions taken by BancShares, BancShares' ability to maintain adequate sources of funding and liquidity, the potential impact of decisions by the Federal Reserve on BancShares' capital plans, adverse developments with respect to U.S. or global economic conditions, including the significant turbulence in the capital or financial markets, the impact of the current inflationary environment, the impact of implementation and compliance with current or proposed laws, regulations and regulatory interpretations, including the interagency proposed rule on regulatory capital, along with the risk that such laws, regulations and regulatory interpretations may change, the availability of capital and personnel, and the failure to realize the anticipated benefits of BancShares' previous acquisition transactions, including the Acquisition and the previously completed transaction with CIT Group Inc. ("CIT"), which acquisition risks include (1) disruption from the transactions with customer, supplier or employee relationships, (2) the possibility that the amount of the costs, fees, expenses and charges related to the transactions may be greater than anticipated, including as a result of unexpected or unknown factors, events or liabilities or increased regulatory compliance obligations or oversight, (3) reputational risk and the reaction of the parties' customers to the transactions, (4) the risk that the cost savings and any revenue synergies from the transactions may not be realized or take longer than anticipated to be realized, (5) difficulties experienced in completing the integration of the businesses, (6) the ability to retain customers following the transactions and (7) adjustments to BancShares' estimated purchase accounting impacts of the Acquisition.
Except to the extent required by applicable laws or regulations, BancShares disclaims any obligation to update forward-looking statements or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Additional factors which could affect the forward-looking statements can be found in BancShares' Annual Report on Form 10-K for the fiscal year ended December 31, 2022, its Quarterly Reports on Form 10-Q for the periods ended March 31, 2023 and June 30, 2023, and its other filings with the Securities and Exchange Commission (the "SEC").
NON-GAAP MEASURES
Certain measures in this release and supporting tables, including those referenced as "Adjusted," are "non-GAAP", meaning they are not presented in accordance with generally accepted accounting principles in the U.S. and also are not codified in U.S. banking regulations currently applicable to BancShares. BancShares believes that non-GAAP financial measures, when reviewed in conjunction with GAAP financial information, can provide transparency about or an alternative means of assessing its operating results and financial position to its investors, analysts and management. Each non-GAAP measure is reconciled to the most comparable GAAP measure in the non-GAAP reconciliation table below and notable items are summarized in a separate table.
Dollars in millions, except per share data |
|||||
YTD |
YTD |
||||
Summary Financial Data & Key Metrics |
3Q23 |
2Q23 |
3Q22 |
9/30/23 |
9/30/22 |
Results of Operations: |
|||||
Net interest income |
$ 1,990 |
$ 1,961 |
$ 795 |
$ 4,801 |
$ 2,144 |
Provision for credit losses |
192 |
151 |
60 |
1,126 |
566 |
Net interest income after provision for credit losses |
1,798 |
1,810 |
735 |
3,675 |
1,578 |
Noninterest income |
615 |
658 |
433 |
11,532 |
1,707 |
Noninterest expense |
1,416 |
1,572 |
760 |
3,843 |
2,315 |
Income before income taxes |
997 |
896 |
408 |
11,364 |
970 |
Income tax expense |
245 |
214 |
93 |
412 |
129 |
Net income |
752 |
682 |
315 |
10,952 |
841 |
Preferred stock dividends |
15 |
15 |
12 |
44 |
36 |
Net income available to common stockholders |
$ 737 |
$ 667 |
$ 303 |
$ 10,908 |
$ 805 |
Adjusted net income available to common stockholders(1) |
$ 813 |
$ 765 |
$ 326 |
$ 1,870 |
$ 895 |
Pre-tax, pre-provision net revenue (PPNR)(1) |
$ 1,189 |
$ 1,047 |
$ 468 |
$ 12,490 |
$ 1,536 |
Per Share Information: |
|||||
Diluted earnings per common share (EPS) |
$ 50.67 |
$ 45.87 |
$ 19.25 |
$ 750.19 |
$ 50.70 |
Adjusted diluted earnings per common share (EPS)(1) |
55.92 |
52.60 |
20.77 |
128.64 |
56.40 |
Book value per common share |
1,343.52 |
1,300.93 |
597.75 |
||
Tangible book value per common share (TBV)(1) |
1,297.00 |
1,253.20 |
564.97 |
||
Key Performance Metrics: |
|||||
Return on average assets (ROA) |
1.41 % |
1.31 % |
1.16 % |
7.81 % |
1.04 % |
Adjusted ROA(1) |
1.55 |
1.49 |
1.24 |
1.37 |
1.15 |
PPNR ROA(1) |
2.23 |
2.00 |
1.72 |
8.91 |
1.89 |
Adjusted PPNR ROA(1) |
2.48 |
2.34 |
1.86 |
2.16 |
1.58 |
Return on average common equity (ROE) |
15.20 |
14.35 |
12.49 |
90.46 |
11.18 |
Adjusted ROE(1) |
16.77 |
16.46 |
13.47 |
15.51 |
12.44 |
Return on average tangible common equity (ROTCE)(1) |
15.76 |
14.91 |
13.17 |
94.17 |
11.80 |
Adjusted ROTCE(1) |
17.39 |
17.10 |
14.20 |
16.15 |
13.13 |
Efficiency ratio |
54.34 |
60.06 |
61.91 |
23.53 |
60.10 |
Adjusted efficiency ratio(1) |
46.04 |
49.65 |
53.32 |
49.85 |
57.25 |
Net interest margin (NIM)(2) |
4.07 |
4.10 |
3.42 |
3.94 |
3.08 |
Select Balance Sheet Items at Period End: |
|||||
Total investment securities |
$ 26,818 |
$ 22,171 |
$ 18,841 |
||
Total loans and leases |
133,202 |
133,015 |
69,790 |
||
Total operating lease equipment, net |
8,661 |
8,531 |
7,984 |
||
Total deposits |
146,233 |
141,164 |
87,553 |
||
Total borrowings |
37,712 |
40,139 |
8,343 |
||
Loan to deposit ratio |
91.09 % |
94.23 % |
79.71 % |
||
Noninterest-bearing deposits to total deposits |
29.50 |
31.56 |
30.37 |
||
Capital Ratios at Period End: (3) |
|||||
Total risk-based capital ratio |
15.64 % |
15.84 % |
13.46 % |
||
Tier 1 risk-based capital ratio |
13.82 |
14.00 |
11.36 |
||
Common equity Tier 1 ratio |
13.23 |
13.38 |
10.37 |
||
Tier 1 leverage capital ratio |
9.72 |
9.50 |
9.31 |
||
Asset Quality at Period End: |
|||||
Nonaccrual loans to total loans and leases |
0.68 % |
0.70 % |
0.65 % |
||
Allowance for loan and lease losses (ALLL) to loans and leases |
1.26 |
1.23 |
1.26 |
||
Net charge-off ratio |
0.53 |
0.47 |
0.10 |
0.45 |
0.11 |
(1) Denotes a non-GAAP measure. Refer to the non-GAAP reconciliation subsequently included in these materials for a reconciliation to the most directly comparable GAAP measure. "Adjusted" items exclude the impact of Notable Items. |
|||||
(2) Calculated net of credit balances of factoring clients and credit balances of factoring deposits. |
|||||
(3) Capital ratios for the current quarter are preliminary pending completion of quarterly regulatory filings. |
|||||
Dollars in millions, except share and per share data |
|||||
YTD |
YTD |
||||
Income Statement (unaudited) |
3Q23 |
2Q23 |
3Q22 |
9/30/23 |
9/30/22 |
Interest income |
|||||
Interest and fees on loans |
$ 2,426 |
$ 2,353 |
$ 785 |
$ 5,796 |
$ 2,061 |
Interest on investment securities |
180 |
120 |
90 |
407 |
262 |
Interest on deposits at banks |
504 |
480 |
31 |
1,071 |
50 |
Total interest income |
3,110 |
2,953 |
906 |
7,274 |
2,373 |
Interest expense |
|||||
Deposits |
769 |
575 |
78 |
1,632 |
159 |
Borrowings |
351 |
417 |
33 |
841 |
70 |
Total interest expense |
1,120 |
992 |
111 |
2,473 |
229 |
Net interest income |
1,990 |
1,961 |
795 |
4,801 |
2,144 |
Provision for credit losses |
192 |
151 |
60 |
1,126 |
566 |
Net interest income after provision for credit losses |
1,798 |
1,810 |
735 |
3,675 |
1,578 |
Noninterest income |
|||||
Rental income on operating lease equipment |
248 |
238 |
219 |
719 |
640 |
Fee income and other service charges |
70 |
68 |
41 |
185 |
112 |
Client investment fees |
52 |
52 |
— |
106 |
— |
Wealth management services |
49 |
51 |
35 |
140 |
107 |
International fees |
34 |
33 |
3 |
71 |
7 |
Service charges on deposit accounts |
44 |
44 |
21 |
112 |
76 |
Factoring commissions |
21 |
20 |
24 |
60 |
78 |
Cardholder services, net |
41 |
41 |
25 |
103 |
76 |
Merchant services, net |
12 |
14 |
8 |
36 |
27 |
Insurance commissions |
13 |
14 |
11 |
40 |
34 |
Realized loss on sale of investment securities available for sale, net |
(12) |
— |
— |
(26) |
— |
Fair value adjustment on marketable equity securities, net |
(1) |
(10) |
(2) |
(20) |
(5) |
Bank-owned life insurance |
1 |
2 |
8 |
8 |
25 |
Gain on sale of leasing equipment, net |
10 |
4 |
2 |
18 |
13 |
Gain on acquisition |
12 |
55 |
— |
9,891 |
431 |
Gain on extinguishment of debt |
— |
— |
1 |
— |
7 |
Other noninterest income |
21 |
32 |
37 |
89 |
79 |
Total noninterest income |
615 |
658 |
433 |
11,532 |
1,707 |
Noninterest expense |
|||||
Depreciation on operating lease equipment |
95 |
91 |
87 |
275 |
257 |
Maintenance and other operating lease expenses |
51 |
56 |
52 |
163 |
142 |
Salaries and benefits |
727 |
775 |
353 |
1,922 |
1,054 |
Net occupancy expense |
65 |
64 |
47 |
179 |
143 |
Equipment expense |
117 |
133 |
55 |
308 |
161 |
Professional fees |
12 |
21 |
11 |
44 |
34 |
Third-party processing fees |
54 |
54 |
27 |
138 |
77 |
FDIC insurance expense |
36 |
22 |
5 |
76 |
26 |
Marketing expense |
25 |
41 |
15 |
81 |
32 |
Acquisition-related expenses |
121 |
205 |
33 |
354 |
202 |
Intangible asset amortization |
17 |
18 |
5 |
40 |
17 |
Other noninterest expense |
96 |
92 |
70 |
263 |
170 |
Total noninterest expense |
1,416 |
1,572 |
760 |
3,843 |
2,315 |
Income before income taxes |
997 |
896 |
408 |
11,364 |
970 |
Income tax expense |
245 |
214 |
93 |
412 |
129 |
Net income |
$ 752 |
$ 682 |
$ 315 |
$ 10,952 |
$ 841 |
Preferred stock dividends |
15 |
15 |
12 |
44 |
36 |
Net income available to common stockholders |
$ 737 |
$ 667 |
$ 303 |
$ 10,908 |
$ 805 |
Basic earnings per common share |
$ 50.71 |
$ 45.90 |
$ 19.27 |
$ 750.79 |
$ 50.76 |
Diluted earnings per common share |
$ 50.67 |
$ 45.87 |
$ 19.25 |
$ 750.19 |
$ 50.70 |
Weighted average common shares outstanding (basic) |
14,528,310 |
14,528,134 |
15,711,976 |
14,527,718 |
15,849,219 |
Weighted average common shares outstanding (diluted) |
14,539,133 |
14,537,938 |
15,727,993 |
14,539,383 |
15,867,314 |
Dollars in millions |
|||
Balance Sheet (unaudited) |
September 30, 2023 |
June 30, 2023 |
September 30, 2022 |
Assets |
|||
Cash and due from banks |
$ 791 |
$ 917 |
$ 481 |
Interest-earning deposits at banks |
36,704 |
37,846 |
6,172 |
Securities purchased under agreements to resell |
549 |
298 |
— |
Investment in marketable equity securities |
75 |
76 |
92 |
Investment securities available for sale |
16,661 |
11,894 |
9,088 |
Investment securities held to maturity |
10,082 |
10,201 |
9,661 |
Assets held for sale |
58 |
117 |
21 |
Loans and leases |
133,202 |
133,015 |
69,790 |
Allowance for loan and lease losses |
(1,673) |
(1,637) |
(882) |
Loans and leases, net of allowance for loan and lease losses |
131,529 |
131,378 |
68,908 |
Operating lease equipment, net |
8,661 |
8,531 |
7,984 |
Premises and equipment, net |
1,768 |
1,782 |
1,410 |
Goodwill |
346 |
346 |
346 |
Other intangible assets |
329 |
347 |
145 |
Other assets |
6,212 |
5,769 |
5,002 |
Total assets |
$ 213,765 |
$ 209,502 |
$ 109,310 |
Liabilities |
|||
Deposits: |
|||
Noninterest-bearing |
$ 43,141 |
$ 44,547 |
$ 26,587 |
Interest-bearing |
103,092 |
96,617 |
60,966 |
Total deposits |
146,233 |
141,164 |
87,553 |
Credit balances of factoring clients |
1,282 |
1,067 |
1,147 |
Borrowings: |
|||
Short-term borrowings |
453 |
454 |
3,128 |
Long-term borrowings |
37,259 |
39,685 |
5,215 |
Total borrowings |
37,712 |
40,139 |
8,343 |
Other liabilities |
8,149 |
7,361 |
2,434 |
Total liabilities |
$ 193,376 |
$ 189,731 |
$ 99,477 |
Stockholders' equity |
|||
Preferred stock |
881 |
881 |
881 |
Common stock: |
|||
Class A - $1 par value |
14 |
14 |
14 |
Class B - $1 par value |
1 |
1 |
1 |
Additional paid in capital |
4,106 |
4,106 |
4,506 |
Retained earnings |
16,267 |
15,541 |
5,160 |
Accumulated other comprehensive loss |
(880) |
(772) |
(729) |
Total stockholders' equity |
20,389 |
19,771 |
9,833 |
Total liabilities and stockholders' equity |
$ 213,765 |
$ 209,502 |
$ 109,310 |
Dollars in millions, except share per share data |
|||||
Notable Items (1) |
YTD |
YTD |
|||
3Q23 |
2Q23 |
3Q22 |
9/30/23 |
9/30/22 |
|
Noninterest income |
|||||
Rental income on operating lease equipment (2) |
$ (146) |
$ (147) |
$ (139) |
$ (438) |
$ (399) |
Realized loss on sale of investment securities available for sale, net |
12 |
— |
— |
26 |
— |
Fair value adjustment on marketable equity securities, net |
1 |
10 |
2 |
20 |
5 |
Gain on sale of leasing equipment, net |
(10) |
(4) |
(2) |
(18) |
(13) |
Gain on acquisition |
(12) |
(55) |
— |
(9,891) |
(431) |
Gain on extinguishment of debt |
— |
— |
(1) |
— |
(7) |
Other noninterest income (3) |
8 |
— |
(5) |
8 |
(11) |
Impact of notable items on adjusted noninterest income |
$ (147) |
$ (196) |
$ (145) |
$ (10,293) |
$ (856) |
Noninterest expense |
|||||
Depreciation on operating lease equipment (2) |
(95) |
(91) |
(87) |
(275) |
(257) |
Maintenance and other operating lease equipment expense (2) |
(51) |
(56) |
(52) |
(163) |
(142) |
Acquisition-related expenses |
(121) |
(205) |
(33) |
(354) |
(202) |
Intangible asset amortization |
(17) |
(18) |
(5) |
(40) |
(17) |
Other noninterest expense (4) |
— |
— |
(6) |
— |
18 |
Impact of notable items on adjusted noninterest expense |
$ (284) |
$ (370) |
$ (183) |
$ (832) |
$ (600) |
Day 2 provision for loan and lease losses and off-balance sheet exposure |
$ — |
$ — |
$ — |
$ (716) |
$ (513) |
Benefit for credit losses on investment securities available for sale |
3 |
1 |
— |
— |
— |
Impact of notable items on adjusted provision for credit losses |
$ 3 |
$ 1 |
$ — |
$ (716) |
$ (513) |
Impact of notable items on adjusted pre-tax income |
$ 134 |
$ 173 |
$ 38 |
$ (8,745) |
$ 257 |
Income tax impact (5) |
58 |
75 |
15 |
293 |
167 |
Impact of notable items on adjusted net income |
$ 76 |
$ 98 |
$ 23 |
$ (9,038) |
$ 90 |
Impact of notable items on adjusted diluted EPS |
$ 5.25 |
$ 6.73 |
$ 1.52 |
$ (621.55) |
$ 5.70 |
(1) |
Notable items include income and expense for infrequent transactions and certain recurring items (typically noncash) that Management believes should be excluded from adjusted measures (Non-GAAP) to enhance understanding of operations and comparability to historical periods. Management utilizes both GAAP and adjusted measures (Non-GAAP) to analyze the Company's performance. Refer to subsequent pages of this earnings release for a reconciliation of Non-GAAP measures to the most directly comparable GAAP measures. |
(2) |
Depreciation and maintenance and other operating lease expenses are reclassified from noninterest expense to a reduction of rental income on operating lease equipment. There is no net impact to earnings for this notable item as adjusted noninterest income and expense are reduced by the same amount. Adjusted rental income on operating lease equipment (Non-GAAP) is net of depreciation and maintenance expense for operating lease equipment. Management believes this measure enhances comparability to banking peers, primarily due to the extent of our rail and other equipment rental activities. Refer to subsequent pages of this earnings release for a reconciliation of Non-GAAP measures to the most directly comparable GAAP measure. |
(3) |
Notable items included in other noninterest income consist of a measurement period adjustment related to FX translation in 3Q23 and YTD23 and a railcar lease settlement in 3Q22 in addition to the gain on sale of the corporate jet in YTD22. |
(4) |
Notable items included in other noninterest expense consist of an impairment on corporate real estate in 3Q22 in addition to the termination of legacy CIT post-retirement plans in YTD22. |
(5) |
For the periods presented the income tax impact may include tax discrete items and changes in the estimated annualized effective tax rate. |
Dollars in millions, except share and per share data |
|||||
Condensed Income Statements (unaudited) - Adjusted for Notable Items (1) |
YTD |
YTD |
|||
3Q23 |
2Q23 |
3Q22 |
9/30/23 |
9/30/22 |
|
Interest income |
$ 3,110 |
$ 2,953 |
$ 906 |
$ 7,274 |
$ 2,373 |
Interest expense |
1,120 |
992 |
111 |
2,473 |
229 |
Net interest income |
1,990 |
1,961 |
795 |
4,801 |
2,144 |
Provision for credit losses |
195 |
152 |
60 |
410 |
53 |
Net interest income after provision for credit losses |
1,795 |
1,809 |
735 |
4,391 |
2,091 |
Noninterest income |
468 |
462 |
288 |
1,239 |
851 |
Noninterest expense |
1,132 |
1,202 |
577 |
3,011 |
1,715 |
Income before income taxes |
1,131 |
1,069 |
446 |
2,619 |
1,227 |
Income tax expense |
303 |
289 |
108 |
705 |
296 |
Net income |
$ 828 |
$ 780 |
$ 338 |
$ 1,914 |
$ 931 |
Preferred stock dividends |
15 |
15 |
12 |
44 |
36 |
Net income available to common stockholders |
$ 813 |
$ 765 |
$ 326 |
$ 1,870 |
$ 895 |
Basic earnings per common share |
$ 55.96 |
$ 52.64 |
$ 20.79 |
$ 128.74 |
$ 56.46 |
Diluted earnings per common share |
55.92 |
52.60 |
20.77 |
128.64 |
56.40 |
Weighted average common shares outstanding (basic) |
14,528,310 |
14,528,134 |
15,711,976 |
14,527,718 |
15,849,219 |
Weighted average common shares outstanding (diluted) |
14,539,133 |
14,537,938 |
15,727,993 |
14,539,383 |
15,867,314 |
(1) The GAAP income statements and notable items are included previously in this communication. The condensed adjusted income statements above (Non-GAAP) exclude the impacts of notable items. Refer to the Non-GAAP reconciliation table(s) at the end of this earnings release for a reconciliation of Non-GAAP measures to the most directly comparable GAAP measure. |
|||||
Dollars in millions |
|||
Loans and Leases by Class (end of period) |
September 30, |
June 30, 2023 |
September 30, |
Loans and Leases by Class |
|||
Commercial |
|||
Commercial construction |
$ 3,382 |
$ 3,182 |
$ 2,752 |
Owner-occupied commercial mortgages |
15,230 |
14,748 |
14,053 |
Non-owner-occupied commercial mortgages |
10,941 |
10,733 |
9,683 |
Commercial and industrial |
26,389 |
25,376 |
24,288 |
Leases |
2,108 |
2,130 |
2,184 |
Total commercial |
$ 58,050 |
$ 56,169 |
$ 52,960 |
Consumer |
|||
Residential mortgage |
$ 14,287 |
$ 14,065 |
$ 12,910 |
Revolving mortgage |
1,909 |
1,900 |
1,923 |
Consumer auto |
1,411 |
1,425 |
1,385 |
Consumer other |
681 |
657 |
612 |
Total consumer |
$ 18,288 |
$ 18,047 |
$ 16,830 |
SVB |
|||
Global fund banking |
$ 27,516 |
$ 29,333 |
$ — |
Investor dependent - early stage |
1,718 |
1,840 |
— |
Investor dependent - growth stage |
3,948 |
4,052 |
— |
Innovation C&I and cash flow dependent |
8,724 |
8,905 |
— |
Private Bank |
9,648 |
9,580 |
— |
CRE |
2,629 |
2,530 |
— |
Other |
2,681 |
2,559 |
— |
Total SVB |
$ 56,864 |
$ 58,799 |
$ — |
Total loans and leases |
$ 133,202 |
$ 133,015 |
$ 69,790 |
Less: allowance for loan and lease losses |
(1,673) |
(1,637) |
(882) |
Total loans and leases, net of allowance for loan and lease losses |
$ 131,529 |
$ 131,378 |
$ 68,908 |
Deposits by Type (end of period) |
September 30, |
June 30, 2023 |
September 30, |
Demand |
$ 43,141 |
$ 44,547 |
$ 26,587 |
Checking with interest |
23,461 |
24,809 |
16,118 |
Money market |
30,082 |
29,149 |
21,818 |
Savings |
32,513 |
26,389 |
14,722 |
Time |
17,036 |
16,270 |
8,308 |
Total deposits |
$ 146,233 |
$ 141,164 |
$ 87,553 |
Dollars in millions |
|||||
YTD |
YTD |
||||
Credit Quality and Allowance for Loan and Lease Losses |
3Q23 |
2Q23 |
3Q22 |
9/30/23 |
9/30/22 |
Nonaccrual loans |
$ 899 |
$ 929 |
$ 454 |
||
Ratio of nonaccrual loans to total loans |
0.68 % |
0.70 % |
0.65 % |
||
Charge-offs |
$ (199) |
$ (176) |
$ (33) |
$ (437) |
$ (107) |
Recoveries |
23 |
19 |
15 |
54 |
52 |
Net charge-offs |
$ (176) |
$ (157) |
$ (18) |
$ (383) |
$ (55) |
Net charge-off ratio |
0.53 % |
0.47 % |
0.10 % |
0.45 % |
0.11 % |
Allowance for loan and lease losses to loans ratio |
1.26 % |
1.23 % |
1.26 % |
||
Allowance for loan and lease losses - beginning |
$ 1,637 |
$ 1,605 |
$ 850 |
$ 922 |
$ 178 |
Initial PCD ALLL |
— |
20 |
— |
220 |
272 |
Day 2 provision for loan and lease losses |
— |
— |
— |
462 |
454 |
Provision for loan and lease losses |
212 |
169 |
50 |
452 |
33 |
Net charge-offs |
(176) |
(157) |
(18) |
(383) |
(55) |
Allowance for loan and lease losses - ending |
$ 1,673 |
$ 1,637 |
$ 882 |
$ 1,673 |
$ 882 |
Dollars in millions |
|||||||||
Average Balance Sheets, Yields and Rates |
3Q23 |
2Q23 |
3Q22 |
||||||
Avg |
Income/ |
Yield/Rate |
Avg |
Income/ |
Yield/Rate |
Avg |
Income/ |
Yield/Rate |
|
Loans and leases (1)(2) |
$ 131,926 |
$ 2,426 |
7.29 % |
$ 133,407 |
$ 2,353 |
7.07 % |
$ 67,413 |
$ 785 |
4.63 % |
Investment securities |
24,388 |
177 |
2.90 |
19,806 |
117 |
2.36 |
19,119 |
90 |
1.88 |
Securities purchased under agreements to resell |
223 |
3 |
5.28 |
191 |
3 |
4.92 |
— |
— |
— |
Interest-earning deposits at banks |
37,456 |
504 |
5.34 |
38,014 |
480 |
5.07 |
5,685 |
31 |
2.17 |
Total interest-earning assets (2) |
$ 193,993 |
$ 3,110 |
6.36 % |
$ 191,418 |
$ 2,953 |
6.18 % |
$ 92,217 |
$ 906 |
3.90 % |
Operating lease equipment, net (including held for sale) |
$ 8,617 |
$ 8,405 |
$ 7,981 |
||||||
Cash and due from banks |
911 |
1,161 |
489 |
||||||
Allowance for loan and lease losses |
(1,714) |
(1,600) |
(851) |
||||||
All other noninterest-earning assets |
10,187 |
9,925 |
8,133 |
||||||
Total assets |
$ 211,994 |
$ 209,309 |
$ 107,969 |
||||||
Interest-bearing deposits |
|||||||||
Checking with interest |
$ 24,600 |
$ 134 |
2.10 % |
$ 24,164 |
$ 118 |
1.92 % |
$ 16,160 |
$ 7 |
0.14 % |
Money Market |
29,684 |
179 |
2.40 |
29,066 |
148 |
2.04 |
22,993 |
32 |
0.55 |
Savings |
29,988 |
303 |
4.01 |
21,979 |
188 |
3.44 |
13,956 |
28 |
0.78 |
Time deposits |
16,686 |
153 |
3.64 |
14,958 |
121 |
3.24 |
8,436 |
11 |
0.54 |
Total interest-bearing deposits |
100,958 |
769 |
3.02 |
90,167 |
575 |
2.56 |
61,545 |
78 |
0.50 |
Borrowings: |
|||||||||
Securities sold under customer repurchase agreements |
454 |
— |
0.35 |
456 |
1 |
0.31 |
617 |
1 |
0.16 |
ST FHLB Borrowings |
— |
— |
— |
110 |
1 |
5.17 |
1,188 |
8 |
2.60 |
Short-term borrowings |
454 |
— |
0.35 |
566 |
2 |
1.26 |
1,805 |
9 |
1.77 |
Federal Home Loan Bank borrowings |
444 |
6 |
5.47 |
5,558 |
74 |
5.35 |
1,784 |
11 |
2.48 |
Senior unsecured borrowings |
382 |
2 |
2.46 |
798 |
4 |
2.11 |
898 |
5 |
2.05 |
Subordinated debt |
1,042 |
10 |
3.65 |
1,045 |
10 |
3.59 |
1,054 |
8 |
3.21 |
Other borrowings |
35,831 |
333 |
3.68 |
35,168 |
327 |
3.74 |
67 |
— |
4.47 |
Long-term borrowings |
37,699 |
351 |
3.69 |
42,569 |
415 |
3.91 |
3,803 |
24 |
2.62 |
Total borrowings |
38,153 |
351 |
3.65 |
43,135 |
417 |
3.88 |
5,608 |
33 |
2.34 |
Total interest-bearing liabilities |
$ 139,111 |
$ 1,120 |
3.19 % |
$ 133,302 |
$ 992 |
2.99 % |
$ 67,153 |
$ 111 |
0.66 % |
Noninterest-bearing deposits |
$ 43,085 |
$ 47,271 |
$ 26,877 |
||||||
Credit balances of factoring clients |
1,209 |
1,168 |
1,089 |
||||||
Other noninterest-bearing liabilities |
8,473 |
8,047 |
2,351 |
||||||
Stockholders' equity |
20,116 |
19,521 |
10,499 |
||||||
Total liabilities and stockholders' equity |
$ 211,994 |
$ 209,309 |
$ 107,969 |
||||||
Net interest income |
$ 1,990 |
$ 1,961 |
$ 795 |
||||||
Net interest spread (2) |
3.17 % |
3.19 % |
3.24 % |
||||||
Net interest margin (2) |
4.07 % |
4.10 % |
3.42 % |
||||||
(1) Loans and leases include non-PCD and PCD loans, nonaccrual loans and held for sale. Interest income on loans and leases includes accretion income and loan fees. |
|||||||||
(2) The balance and rate presented is calculated net of credit balances of factoring clients. |
|||||||||
Note: Certain items above do not precisely recalculate as presented due to rounding. |
|||||||||
Dollars in millions |
||||||
Average Balance Sheets, Yields and Rates |
YTD 9/30/2023 |
YTD 9/30/2022 |
||||
Avg |
Income/ |
Yield/Rate |
Avg |
Income/ |
Yield/Rate |
|
Loans and leases (1)(2) |
$ 113,189 |
$ 5,796 |
6.84 % |
$ 65,411 |
$ 2,061 |
4.21 % |
Investment securities |
21,222 |
401 |
2.52 |
19,264 |
262 |
1.81 |
Securities purchased under agreements to resell |
139 |
6 |
5.12 |
— |
— |
— |
Interest-earning deposits at banks |
27,794 |
1,071 |
5.15 |
8,242 |
50 |
0.81 |
Total interest-earning assets (2) |
$ 162,344 |
$ 7,274 |
5.98 % |
$ 92,917 |
$ 2,373 |
3.41 % |
Operating lease equipment, net (including held for sale) |
$ 8,421 |
$ 7,960 |
||||
Cash and due from banks |
891 |
517 |
||||
Allowance for loan and lease losses |
(1,420) |
(871) |
||||
All other noninterest-earning assets |
17,193 |
8,102 |
||||
Total assets |
$ 187,429 |
$ 108,625 |
||||
Interest-bearing deposits |
||||||
Checking with interest |
$ 21,783 |
$ 274 |
1.63 % |
$ 16,437 |
$ 16 |
0.11 % |
Money Market |
26,686 |
407 |
2.04 |
24,875 |
65 |
0.35 |
Savings |
23,208 |
601 |
3.46 |
13,640 |
48 |
0.47 |
Time deposits |
14,606 |
350 |
3.20 |
9,004 |
30 |
0.45 |
Total interest-bearing deposits |
86,283 |
1,632 |
2.53 |
63,956 |
159 |
0.33 |
Borrowings: |
||||||
Securities sold under customer repurchase agreements |
455 |
1 |
0.32 |
615 |
1 |
0.16 |
ST FHLB Borrowings |
145 |
5 |
4.79 |
400 |
8 |
2.60 |
Short-term borrowings |
600 |
6 |
1.40 |
1,015 |
9 |
1.12 |
Federal Home Loan Bank borrowings |
3,084 |
120 |
5.22 |
941 |
15 |
2.10 |
Senior unsecured borrowings |
686 |
11 |
2.16 |
1,497 |
21 |
1.85 |
Subordinated debt |
1,045 |
29 |
3.59 |
1,057 |
24 |
3.07 |
Other borrowings |
24,450 |
675 |
3.69 |
79 |
1 |
2.87 |
Long-term borrowings |
29,265 |
835 |
3.81 |
3,574 |
61 |
2.30 |
Total borrowings |
29,865 |
841 |
3.76 |
4,589 |
70 |
2.04 |
Total interest-bearing liabilities |
$ 116,148 |
$ 2,473 |
2.85 % |
$ 68,545 |
$ 229 |
0.45 % |
Noninterest-bearing deposits |
$ 39,007 |
$ 26,253 |
||||
Credit balances of factoring clients |
1,129 |
1,146 |
||||
Other noninterest-bearing liabilities |
14,143 |
2,184 |
||||
Stockholders' equity |
17,002 |
10,497 |
||||
Total liabilities and stockholders' equity |
$ 187,429 |
$ 108,625 |
||||
Net interest income |
$ 4,801 |
$ 2,144 |
||||
Net interest spread (2) |
3.13 % |
2.96 % |
||||
Net interest margin (2) |
3.94 % |
3.08 % |
||||
(1) Loans and leases include non-PCD and PCD loans, nonaccrual loans and held for sale. Interest income on loans and leases includes accretion income and loan fees. |
||||||
(2) The balance and rate presented is calculated net of credit balances of factoring clients. |
||||||
Note: Certain items above do not precisely recalculate as presented due to rounding. |
||||||
Dollars in millions, except share and per share data |
|||||||
YTD |
YTD |
||||||
Non-GAAP Reconciliations |
3Q23 |
2Q23 |
3Q22 |
9/30/2023 |
9/30/2022 |
||
Net income and EPS |
|||||||
Net income (GAAP) |
a |
$ 752 |
$ 682 |
$ 315 |
$ 10,952 |
$ 841 |
|
Preferred stock dividends |
15 |
15 |
12 |
44 |
36 |
||
Net income available to common stockholders (GAAP) |
b |
737 |
667 |
303 |
10,908 |
805 |
|
Total notable items, after income tax |
c |
76 |
98 |
23 |
(9,038) |
90 |
|
Adjusted net income (non-GAAP) |
d = (a+c) |
828 |
780 |
338 |
1,914 |
931 |
|
Adjusted net income available to common stockholders (non-GAAP) |
e = (b+c) |
$ 813 |
$ 765 |
$ 326 |
$ 1,870 |
$ 895 |
|
Weighted average common shares outstanding |
|||||||
Basic |
f |
14,528,310 |
14,528,134 |
15,711,976 |
14,527,718 |
15,849,219 |
|
Diluted |
g |
14,539,133 |
14,537,938 |
15,727,993 |
14,539,383 |
15,867,314 |
|
EPS (GAAP) |
|||||||
Basic |
b/f |
$ 50.71 |
$ 45.90 |
$ 19.27 |
$ 750.79 |
$ 50.76 |
|
Diluted |
b/g |
50.67 |
45.87 |
19.25 |
750.19 |
50.70 |
|
Adjusted EPS (non-GAAP) |
|||||||
Basic |
e/f |
$ 55.96 |
$ 52.64 |
$ 20.79 |
$ 128.74 |
$ 56.46 |
|
Diluted |
e/g |
55.92 |
52.60 |
20.77 |
128.64 |
56.40 |
|
Noninterest income and expense |
|||||||
Noninterest income |
h |
$ 615 |
$ 658 |
$ 433 |
$ 11,532 |
$ 1,707 |
|
Impact of notable items, before income tax |
(147) |
(196) |
(145) |
(10,293) |
(856) |
||
Adjusted or core noninterest income |
i |
$ 468 |
$ 462 |
$ 288 |
$ 1,239 |
$ 851 |
|
Noninterest expense |
j |
$ 1,416 |
$ 1,572 |
$ 760 |
$ 3,843 |
$ 2,315 |
|
Impact of notable items, before income tax |
(284) |
(370) |
(183) |
(832) |
(600) |
||
Adjusted or core noninterest expense |
k |
$ 1,132 |
$ 1,202 |
$ 577 |
$ 3,011 |
$ 1,715 |
|
Provision for credit losses |
|||||||
Provision for credit losses |
$ 192 |
$ 151 |
$ 60 |
$ 1,126 |
$ 566 |
||
Less: Day 2 provision for loan and lease losses and off-balance sheet exposure |
— |
— |
— |
716 |
513 |
||
Plus: Benefit for credit losses on investment securities available for sale |
3 |
1 |
— |
— |
— |
||
Adjusted provision for credit losses |
$ 195 |
$ 152 |
$ 60 |
$ 410 |
$ 53 |
||
PPNR |
|||||||
Net income (GAAP) |
a |
$ 752 |
$ 682 |
$ 315 |
$ 10,952 |
$ 841 |
|
Plus: |
|||||||
Provision for credit losses |
192 |
151 |
60 |
1,126 |
566 |
||
Income tax expense (benefit) |
245 |
214 |
93 |
412 |
129 |
||
PPNR (non-GAAP) |
l |
$ 1,189 |
$ 1,047 |
$ 468 |
$ 12,490 |
$ 1,536 |
|
Impact of notable items (1) |
137 |
174 |
38 |
(9,461) |
(256) |
||
Adjusted PPNR (non-GAAP) |
m |
$ 1,326 |
$ 1,221 |
$ 506 |
$ 3,028 |
$ 1,279 |
|
(1) Excludes the notable items for the provision for credit losses and income taxes as these items are excluded from PPNR as presented in the table above. |
|||||||
Note: Certain items above do not precisely recalculate as presented due to rounding. |
|||||||
Dollars in millions, except share and per share data |
|||||||
YTD |
YTD |
||||||
Non-GAAP Reconciliations (continued) |
3Q23 |
2Q23 |
3Q22 |
9/30/2023 |
9/30/2022 |
||
ROA |
|||||||
Net income (GAAP) |
a |
$ 752 |
$ 682 |
$ 315 |
$ 10,952 |
$ 841 |
|
Annualized net income |
n = a annualized |
2,983 |
2,734 |
1,250 |
14,642 |
1,124 |
|
Adjusted net income (non-GAAP) |
d |
828 |
780 |
338 |
1,914 |
931 |
|
Annualized adjusted net income |
p = d annualized |
3,286 |
3,126 |
1,341 |
2,560 |
1,245 |
|
Average assets |
o |
211,994 |
209,309 |
107,969 |
187,429 |
108,625 |
|
ROA |
n/o |
1.41 % |
1.31 % |
1.16 % |
7.81 % |
1.04 % |
|
Adjusted ROA |
p/o |
1.55 |
1.49 |
1.24 |
1.37 |
1.15 |
|
PPNR ROA |
|||||||
PPNR (non-GAAP) |
l |
$ 1,189 |
$ 1,047 |
$ 468 |
$ 12,490 |
$ 1,536 |
|
Annualized PPNR |
q = l annualized |
4,717 |
4,200 |
1,858 |
16,699 |
2,054 |
|
Adjusted PPNR (non-GAAP) |
m |
1,326 |
1,221 |
506 |
3,028 |
1,279 |
|
Annualized PPNR |
r = m annualized |
5,261 |
4,893 |
2,009 |
4,049 |
1,710 |
|
PPNR ROA |
q/o |
2.23 % |
2.00 % |
1.72 % |
8.91 % |
1.89 % |
|
Adjusted PPNR ROA |
r/o |
2.48 |
2.34 |
1.86 |
2.16 |
1.58 |
|
ROE and ROTCE |
|||||||
Annualized net income available to common stockholders |
s = b annualized |
$ 2,923 |
$ 2,675 |
$ 1,202 |
$ 14,583 |
$ 1,076 |
|
Annualized adjusted net income available to common stockholders |
t = e annualized |
$ 3,225 |
$ 3,067 |
$ 1,293 |
$ 2,501 |
$ 1,197 |
|
Average stockholders' equity (GAAP) |
$ 20,116 |
$ 19,521 |
$ 10,499 |
$ 17,002 |
$ 10,497 |
||
Less: average preferred stock |
881 |
881 |
881 |
881 |
875 |
||
Average common stockholders' equity (non-GAAP) |
u |
$ 19,235 |
$ 18,640 |
$ 9,618 |
$ 16,121 |
$ 9,622 |
|
Less: average goodwill |
346 |
346 |
346 |
346 |
346 |
||
Less: average other intangible assets |
338 |
357 |
148 |
290 |
162 |
||
Average tangible common equity (non-GAAP) |
v |
$ 18,551 |
$ 17,937 |
$ 9,124 |
$ 15,485 |
$ 9,114 |
|
ROE |
s/u |
15.20 % |
14.35 % |
12.49 % |
90.46 % |
11.18 % |
|
Adjusted ROE |
t/u |
16.77 |
16.46 |
13.47 |
15.51 |
12.44 |
|
ROTCE |
s/v |
15.76 |
14.91 |
13.17 |
94.17 |
11.80 |
|
Adjusted ROTCE |
t/v |
17.39 |
17.10 |
14.20 |
16.15 |
13.13 |
|
Tangible common equity to tangible assets |
|||||||
Stockholders' equity (GAAP) |
w |
$ 20,389 |
$ 19,771 |
$ 9,833 |
|||
Less: preferred stock |
881 |
881 |
881 |
||||
Common equity (non-GAAP) |
x |
$ 19,508 |
$ 18,890 |
$ 8,952 |
|||
Less: goodwill |
346 |
346 |
346 |
||||
Less: other intangible assets |
329 |
347 |
145 |
||||
Tangible common equity (non-GAAP) |
y |
$ 18,833 |
$ 18,197 |
$ 8,461 |
|||
Total assets (GAAP) |
z |
213,765 |
209,502 |
109,310 |
|||
Tangible assets (non-GAAP) |
aa |
213,090 |
208,809 |
108,819 |
|||
Total equity to total assets |
w/z |
9.54 % |
9.44 % |
9.00 % |
|||
Tangible common equity to tangible assets (non-GAAP) |
y/aa |
8.84 |
8.71 |
7.78 |
|||
Note: Certain items above do not precisely recalculate as presented due to rounding. |
|||||||
Dollars in millions, except share and per share data |
|||||||
YTD |
YTD |
||||||
Non-GAAP Reconciliations (continued) |
3Q23 |
2Q23 |
3Q22 |
9/30/2023 |
9/30/2022 |
||
Book value and tangible book value per common share |
|||||||
Common shares outstanding at period end |
bb |
14,520,103 |
14,520,034 |
14,976,129 |
|||
Book value per share |
x/bb |
$ 1,343.52 |
$ 1,300.93 |
$ 597.75 |
|||
Tangible book value per share |
y/bb |
1,297.00 |
1,253.20 |
564.97 |
|||
Efficiency ratio |
|||||||
Net interest income |
cc |
$ 1,990 |
$ 1,961 |
$ 795 |
$ 4,801 |
$ 2,144 |
|
Efficiency ratio (GAAP) |
j / (h + cc) |
54.34 % |
60.06 % |
61.91 % |
23.53 % |
60.10 % |
|
Adjusted efficiency ratio (non-GAAP)(1) |
k / (i + cc) |
46.04 |
49.65 |
53.32 |
49.85 % |
57.25 % |
|
Rental income on operating lease equipment |
|||||||
Rental income on operating lease equipment |
$ 248 |
$ 238 |
$ 219 |
$ 719 |
$ 640 |
||
Less: |
|||||||
Depreciation on operating lease equipment |
95 |
91 |
87 |
275 |
257 |
||
Maintenance and other operating lease expenses |
51 |
56 |
52 |
163 |
142 |
||
Adjusted rental income on operating lease equipment |
$ 102 |
$ 91 |
$ 80 |
$ 281 |
$ 241 |
||
Income tax expense |
|||||||
Income tax expense |
$ 245 |
$ 214 |
$ 93 |
$ 412 |
$ 129 |
||
Impact of notable items |
58 |
75 |
15 |
293 |
167 |
||
Adjusted income tax expense |
$ 303 |
$ 289 |
$ 108 |
$ 705 |
$ 296 |
||
Note: Certain items above do not precisely recalculate as presented due to rounding. |
|||||||
Contact: |
Deanna Hart |
Barbara Thompson |
Investor Relations |
Corporate Communications |
|
919-716-2137 |
919-716-2716 |
SOURCE First Citizens BancShares, Inc.
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