RALEIGH, N.C., Aug. 3, 2023 /PRNewswire/ -- First Citizens BancShares, Inc. ("BancShares") (Nasdaq: FCNCA) reported earnings for the second quarter ended June 30, 2023.
Chairman and CEO Frank B. Holding, Jr. said: "We are proud of our continued strong financial performance in the second quarter as we drove momentum in our legacy business lines and began to realize the long-term strategic and financial value of our combination with SVB. Our performance was supported by the progress we made integrating SVB and our continuing efforts to provide stability and continuity for our clients and associates. We also continue to build on the strengths of our combined team, including leveraging SVB's deep innovation economy expertise and maintaining their unique approach to serving clients. As we navigate an uncertain macroeconomic environment, we remain focused on maintaining strong capital and liquidity positions as well as delivering long-term stockholder value."
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 $107.26 billion and total loans with estimated fair values of approximately $68.46 billion, including Global Fund Banking, Private Bank and the Technology & Life Science and Healthcare loan portfolios, and $35.31 billion in cash and interest-earning deposits at banks. BancShares also assumed approximately $55.90 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
Results for the second quarter included a full quarter impact from the Acquisition. 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 June 30, 2023, was $682 million compared to $9.52 billion for the three months ended March 31, 2023. Net income available to common stockholders for the three months ended June 30, 2023, was $667 million, or $45.87 per diluted common share, compared to $9.50 billion, or $653.64 per diluted common share in the first quarter of 2023.
As a result of the Acquisition, second quarter net income includes an increase to the preliminary gain on acquisition of $55 million (net of tax) as we refined our estimates of the fair value of net assets acquired and liabilities assumed. Adjusted net income available to common stockholders was $765 million, or $52.60 per diluted common share, a $473 million increase from $292 million, or $20.09 per diluted common share, in the first quarter of 2023.
Second quarter 2023 results were impacted by the following items which accounted for the difference between reported and adjusted net income described in the preceding paragraph:
- Acquisition-related expenses of $205 million,
- Additional preliminary gain on acquisition of $55 million (net of tax),
- Intangible asset amortization of $18 million,
- Unrealized loss on fair value adjustments on marketable equity securities of $10 million,
- Gain on sale of leasing equipment of $4 million, and
- Benefit for credit losses on investment securities available for sale of $1 million.
The following bullets highlight significant changes in the components of net income and adjusted net income between the second quarter of 2023 and the first quarter of 2023:
- Net interest income totaled $1.96 billion, up from $850 million in the first quarter. The $1.11 billion increase in net interest income was due to a $1.74 billion increase in interest income, partially offset by a $631 million increase in interest expense.
- The $1.74 billion increase in interest income was due to a $1.34 billion increase in interest income on loans and a $393 million increase in interest on overnight investments. A higher average balance, increased loan accretion from the full quarter impact of the Acquisition, a higher yield on loans and loan growth in both the General Bank and Commercial Bank contributed to the increase in interest income on loans. The increase in interest income on overnight investments was due to a higher yield and average balance.
- The $631 million increase in interest expense was due to a $344 million increase in borrowing costs primarily due to the Purchase Money Note related to the Acquisition and a $287 million increase in interest expense on deposits due to a higher average balance from the full quarter impact of the Acquisition, growth in the Direct Bank and a higher rate paid.
- Net interest margin was 4.10%, an increase of 69 basis points over the first quarter. The yield on interest-earning assets was 6.18%, an increase of 133 basis points over the first quarter. The increase in yield on interest-earning assets was primarily due to a higher yield on earning assets and increased loan accretion resulting from the full quarter impact of the Acquisition. Accretion on loans acquired in the Acquisition was $233 million for the second quarter. The increase in yield on interest-earning assets was partially offset by an increase in the rate paid on interest-bearing deposits.
- Noninterest income totaled $658 million compared to $10.26 billion in the first quarter. The decrease was primarily due to a $9.82 billion preliminary gain on acquisition in the first quarter, partially offset by the full quarter impact of the Acquisition. Adjusted noninterest income totaled $462 million compared to $309 million in the first quarter, an increase of $153 million. The increase was primarily due to the full quarter impact of the Acquisition and included a $50 million increase in client investment fees that are earned for managing off-balance sheet client funds and a $28 million increase in international fees related to customer foreign currency transactions. Fee income and other services charges increased $22 million primarily due to unused line of credit fees in the SVB segment. Service charges on deposits and cardholder services income both increased $20 million from higher volume associated with the full quarter impact of the Acquisition.
- Noninterest expense totaled $1.57 billion compared to $855 million in the first quarter. Adjusted noninterest expense totaled $1.20 billion compared to $677 million in the first quarter, an increase of $525 million. The increases in noninterest expense and adjusted noninterest expense were primarily due to the full quarter impact of the Acquisition and included higher personnel costs of $355 million, higher equipment expense of $75 million, higher marketing costs of $26 million and higher third-party processing fees of $24 million. The increase in marketing costs were primarily associated with the Direct Bank.
BALANCE SHEET SUMMARY
- Loans totaled $133.02 billion at June 30, 2023, a decline of $5.27 billion compared to $138.29 billion as of March 31, 2023. The decline was primarily driven by a $7.37 billion decline in the SVB segment mostly concentrated in Global Fund Banking. The decline in the SVB segment was partially offset by $1.37 billion of growth (12.6% annualized) in the General Bank (driven by business and commercial loans) and $749 million of growth (10.4% annualized) in the Commercial Bank (driven by loans in our industry verticals). The yield on loans was 7.06% for the second quarter compared to 5.57% in the first quarter of 2023. The increase was primarily due to variable rate loan resets and accretion on loans acquired in the Acquisition.
- Deposits totaled $141.16 billion at June 30, 2023, an increase of $1.11 billion, or by 3.2% on an annualized basis compared to $140.05 billion as of March 31, 2023. The increase was concentrated in Direct Bank deposits, which grew by $10.4 billion, partially offset by an $8.40 billion decline in the SVB segment. Deposits in the SVB segment totaled $40.86 billion at June 30, 2023, and remained relatively stable from the levels previously disclosed ($41.40 billion as of May 5, 2023). Branch Network deposits declined by $1.11 billion primarily due to seasonal tax payments. Noninterest-bearing deposits represented 31.6% of total deposits as of June 30, 2023, compared to 39.0% of total deposits at March 31, 2023. The decline was primarily due to a $9.1 billion decrease in noninterest-bearing deposits in the SVB segment and the previously discussed increase of $10.4 billion in Direct Bank interest-bearing deposits. The cost of average total deposits was 1.68% for the second quarter, up 44 basis points compared to the first quarter of 2023.
- Total borrowings decreased $5.96 billion during the quarter, primarily due to the $6.08 billion decline in Federal Home Loan Bank ("FHLB") borrowings.
PROVISION FOR CREDIT LOSSES AND CREDIT QUALITY
- Provision for credit losses totaled $151 million compared to $783 million in the first quarter, a decrease of $632 million, primarily related to the Acquisition, which included provisions for credit losses of $462 million for non-PCD loans and $254 million for unfunded commitments in the first quarter of 2023. Adjusted provision for credit losses totaled $152 million compared to $63 million in the first quarter of 2023, an increase of $89 million. The increase was primarily due to higher net charge-offs of $107 million.
- Net charge-offs totaled $157 million, representing 0.47% of average loans, compared to $50 million, or 0.27% of average loans during the first quarter of 2023. The increase in net charge offs was primarily due to $97 million of net charge offs in the SVB segment ($85 million of which were reserved for in connection with the Acquisition).
- Nonaccrual loans were $929 million, or 0.70% of total loans, at June 30, 2023, compared to $828 million, or 0.60% of total loans at March 31, 2023. The increase is primarily due to an increase in commercial real estate nonaccrual loans at June 30, 2023.
- The allowance for credit losses totaled $1.64 billion or 1.23% of total loans at June 30, 2023, an increase of $32 million and 1.16% of total loans at March 31, 2023. The reserve build for the quarter was a result of deteriorating CECL macroeconomic forecasts, specifically related to the CRE index, partially offset by portfolio run-off in the SVB segment.
EARNINGS CALL DETAILS
BancShares will host a conference call to discuss the company's financial results on Thursday, August 3, 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: 109282
The second 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 560 branches and offices in 23 states; commercial banking expertise delivering best-in-class lending, leasing and other financial services coast to coast; 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 the military conflict between Russia and Ukraine) 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 main 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 recently 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 transaction 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 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 Report on Form 10-Q for the period ended March 31, 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
| 2Q23
| 1Q23
| 2Q22
| 6/30/23
| 6/30/22
|
Results of Operations:
|
|
|
|
|
|
Net interest income
| $ 1,961
| $ 850
| $ 700
| 2,811
| 1,349
|
Provision for credit losses
| 151
| 783
| 42
| 934
| 506
|
Net interest income after provision for credit losses
| 1,810
| 67
| 658
| 1,877
| 843
|
Noninterest income
| 658
| 10,259
| 424
| 10,917
| 1,274
|
Noninterest expense
| 1,572
| 855
| 745
| 2,427
| 1,555
|
Income before income taxes
| 896
| 9,471
| 337
| 10,367
| 562
|
Income tax expense (benefit)
| 214
| (47)
| 82
| 167
| 36
|
Net income
| 682
| 9,518
| 255
| 10,200
| 526
|
Preferred stock dividends
| 15
| 14
| 17
| 29
| 24
|
Net income available to common stockholders
| $ 667
| $ 9,504
| $ 238
| 10,171
| $ 502
|
Adjusted net income available to common stockholders(1)
| $ 765
| $ 292
| $ 270
| $ 1,057
| $ 569
|
Pre-tax, pre-provision net revenue (PPNR)(1)
| $ 1,047
| $ 10,254
| $ 379
| $ 11,301
| $ 1,068
|
|
|
|
|
|
|
Per Share Information:
|
|
|
|
|
|
Diluted earnings per common share (EPS)
| $ 45.87
| $ 653.64
| $ 14.86
| 699.53
| 31.48
|
Adjusted diluted earnings per common share (EPS)(1)
| 52.60
| 20.09
| 16.86
| 72.69
| 35.67
|
Book value per common share
| 1,300.93
| 1,262.76
| 609.95
| 1,300.93
| 609.95
|
Tangible book value per common share (TBV)(1)
| 1,253.20
| 1,213.82
| 578.92
| 1,253.20
| 578.92
|
|
|
|
|
|
|
Key Performance Metrics:
|
|
|
|
|
|
Return on average assets (ROA)
| 1.31 %
| 33.23 %
| 0.95 %
| 12.62 %
| 0.97 %
|
Adjusted ROA(1)
| 1.49
| 1.07
| 1.07
| 1.34
| 1.10
|
PPNR ROA(1)
| 2.00
| 35.80
| 1.41
| 13.98
| 1.98
|
Adjusted PPNR ROA(1)
| 2.34
| 1.69
| 1.56
| 2.11
| 1.44
|
Return on average common equity (ROE)
| 14.35
| 367.47
| 9.87
| 140.82
| 10.51
|
Adjusted ROE(1)
| 16.46
| 11.30
| 11.19
| 14.63
| 11.91
|
Return on average tangible common equity (ROTCE)(1)
| 14.91
| 386.69
| 10.40
| 146.99
| 11.11
|
Adjusted ROTCE(1)
| 17.10
| 11.89
| 11.80
| 15.27
| 12.58
|
Efficiency ratio
| 60.06
| 7.70
| 66.34
| 17.68
| 59.26
|
Adjusted efficiency ratio(1)
| 49.65
| 58.39
| 57.55
| 52.47
| 59.50
|
Net interest margin (NIM)(2)
| 4.10
| 3.41
| 3.04
| 3.86
| 2.89
|
|
|
|
|
|
|
Select Balance Sheet Items at Period End:
|
|
|
|
|
|
Total investment securities
| $ 22,171
| $ 19,527
| $ 19,136
|
|
|
Total loans and leases
| 133,015
| 138,288
| 67,735
|
|
|
Total operating lease equipment, net
| 8,531
| 8,331
| 7,971
|
|
|
Total deposits
| 141,164
| 140,050
| 89,329
|
|
|
Total borrowings
| 40,139
| 46,094
| 4,459
|
|
|
Loan to deposit ratio
| 94.23 %
| 98.74 %
| 75.83 %
|
|
|
Noninterest-bearing deposits to total deposits
| 31.56
| 39.02
| 29.75
|
|
|
|
|
|
|
|
|
Capital Ratios at Period End: (3)
|
|
|
|
|
|
Total risk-based capital ratio
| 15.84 %
| 14.86 %
| 14.46 %
|
|
|
Tier 1 risk-based capital ratio
| 14.00
| 13.13
| 12.37
|
|
|
Common equity Tier 1 ratio
| 13.38
| 12.53
| 11.35
|
|
|
Tier 1 leverage capital ratio
| 9.50
| 16.72
| 9.85
|
|
|
|
|
|
|
|
|
Asset Quality at Period End:
|
|
|
|
|
|
Nonaccrual loans to total loans and leases
| 0.70 %
| 0.60 %
| 0.76 %
| 0.70 %
| 0.76 %
|
Allowance for credit losses (ACL) to loans and leases
| 1.23
| 1.16
| 1.26
| 1.23
| 1.26
|
Net charge-off ratio
| 0.47
| 0.27
| 0.13
| 0.39
| 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 average credit balances of factoring clients.
|
|
|
|
|
|
(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)
| 2Q23
| 1Q23
| 2Q22
| 6/30/23
| 6/30/22
|
Interest income
|
|
|
|
|
|
Interest and fees on loans
| $ 2,353
| $ 1,017
| $ 655
| 3,370
| 1,276
|
Interest on investment securities
| 120
| 107
| 89
| 227
| 172
|
Interest on deposits at banks
| 480
| 87
| 13
| 567
| 19
|
Total interest income
| 2,953
| 1,211
| 757
| 4,164
| 1,467
|
Interest expense
|
|
|
|
|
|
Deposits
| 575
| 288
| 42
| 863
| 81
|
Borrowings
| 417
| 73
| 15
| 490
| 37
|
Total interest expense
| 992
| 361
| 57
| 1,353
| 118
|
Net interest income
| 1,961
| 850
| 700
| 2,811
| 1,349
|
Provision for credit losses
| 151
| 783
| 42
| 934
| 506
|
Net interest income after provision for credit losses
| 1,810
| 67
| 658
| 1,877
| 843
|
Noninterest income
|
|
|
|
|
|
Rental income on operating lease equipment
| 238
| 233
| 213
| 471
| 421
|
Fee income and other service charges
| 69
| 47
| 37
| 116
| 71
|
Client investment fees
| 52
| 2
| —
| 54
| —
|
Wealth management services
| 51
| 40
| 37
| 91
| 72
|
International fees
| 32
| 4
| 2
| 36
| 4
|
Service charges on deposit accounts
| 44
| 24
| 28
| 68
| 55
|
Factoring commissions
| 20
| 19
| 27
| 39
| 54
|
Cardholder services, net
| 41
| 21
| 26
| 62
| 51
|
Merchant services, net
| 14
| 10
| 9
| 24
| 19
|
Insurance commissions
| 14
| 13
| 11
| 27
| 23
|
Realized loss on sale of investment securities available for sale, net
| —
| (14)
| —
| (14)
| —
|
Fair value adjustment on marketable equity securities, net
| (10)
| (9)
| (6)
| (19)
| (3)
|
Bank-owned life insurance
| 2
| 5
| 9
| 7
| 17
|
Gain on sale of leasing equipment, net
| 4
| 4
| 5
| 8
| 11
|
Gain on acquisition
| 55
| 9,824
| —
| 9,879
| 431
|
Gain on extinguishment of debt
| —
| —
| —
| —
| 6
|
Other noninterest income
| 32
| 36
| 26
| 68
| 42
|
Total noninterest income
| 658
| 10,259
| 424
| 10,917
| 1,274
|
Noninterest expense
|
|
|
|
|
|
Depreciation on operating lease equipment
| 91
| 89
| 89
| 180
| 170
|
Maintenance and other operating lease expenses
| 56
| 56
| 47
| 112
| 90
|
Salaries and benefits
| 775
| 420
| 345
| 1,195
| 701
|
Net occupancy expense
| 64
| 50
| 48
| 114
| 96
|
Equipment expense
| 133
| 58
| 54
| 191
| 106
|
Professional fees
| 21
| 11
| 11
| 32
| 23
|
Third-party processing fees
| 54
| 30
| 26
| 84
| 50
|
FDIC insurance expense
| 22
| 18
| 9
| 40
| 21
|
Marketing expense
| 41
| 15
| 9
| 56
| 17
|
Acquisition-related expenses
| 205
| 28
| 34
| 233
| 169
|
Intangible asset amortization
| 18
| 5
| 6
| 23
| 12
|
Other noninterest expense
| 92
| 75
| 67
| 167
| 100
|
Total noninterest expense
| 1,572
| 855
| 745
| 2,427
| 1,555
|
Income before income taxes
| 896
| 9,471
| 337
| 10,367
| 562
|
Income tax expense (benefit)
| 214
| (47)
| 82
| 167
| 36
|
Net income
| $ 682
| $ 9,518
| $ 255
| 10,200
| 526
|
Preferred stock dividends
| 15
| 14
| 17
| 29
| 24
|
Net income available to common stockholders
| $ 667
| $ 9,504
| $ 238
| 10,171
| 502
|
|
|
|
|
|
|
Basic earnings per common share
| $ 45.90
| $ 654.22
| $ 14.87
| $ 700.10
| $ 31.52
|
Diluted earnings per common share
| $ 45.87
| $ 653.64
| $ 14.86
| $ 699.53
| $ 31.48
|
Weighted average common shares outstanding (basic)
| 14,528,134
| 14,526,693
| 16,023,613
| 14,527,417
| 15,918,978
|
Weighted average common shares outstanding (diluted)
| 14,537,938
| 14,539,709
| 16,035,090
| 14,539,176
| 15,937,826
|
Dollars in millions
|
|
|
|
|
Balance Sheet (unaudited)
| June 30, 2023
| March 31, 2023
| June 30, 2022
|
Assets
|
|
|
|
Cash and due from banks
| $ 917
| $ 1,598
| $ 583
|
Interest-earning deposits at banks
| 37,846
| 38,522
| 6,476
|
Securities purchased under agreements to resell
| 298
| —
| —
|
Investment in marketable equity securities
| 76
| 85
| 94
|
Investment securities available for sale
| 11,894
| 9,061
| 9,210
|
Investment securities held to maturity
| 10,201
| 10,381
| 9,832
|
Assets held for sale
| 117
| 94
| 38
|
Loans and leases
| 133,015
| 138,288
| 67,735
|
Allowance for credit losses
| (1,637)
| (1,605)
| (850)
|
Loans and leases, net of allowance for credit losses
| 131,378
| 136,683
| 66,885
|
Operating lease equipment, net
| 8,531
| 8,331
| 7,971
|
Premises and equipment, net
| 1,782
| 1,743
| 1,415
|
Goodwill
| 346
| 346
| 346
|
Other intangible assets
| 347
| 364
| 150
|
Other assets
| 5,769
| 7,450
| 4,673
|
Total assets
| $ 209,502
| $ 214,658
| $ 107,673
|
|
|
|
|
Liabilities
|
|
|
|
Deposits:
|
|
|
|
Noninterest-bearing
| $ 44,547
| $ 54,649
| $ 26,576
|
Interest-bearing
| 96,617
| 85,401
| 62,753
|
Total deposits
| 141,164
| 140,050
| 89,329
|
Credit balances of factoring clients
| 1,067
| 1,126
| 1,070
|
Borrowings:
|
|
|
|
Short-term borrowings
| 454
| 1,009
| 646
|
Long-term borrowings
| 39,685
| 45,085
| 3,813
|
Total borrowings
| 40,139
| 46,094
| 4,459
|
Other liabilities
| 7,361
| 8,172
| 2,173
|
Total liabilities
| $ 189,731
| $ 195,442
| $ 97,031
|
|
|
|
|
Stockholders' equity
|
|
|
|
Preferred stock
| 881
| 881
| 881
|
Common stock:
|
|
|
|
Class A - $1 par value
| 14
| 14
| 15
|
Class B - $1 par value
| 1
| 1
| 1
|
Additional paid in capital
| 4,106
| 4,104
| 5,345
|
Retained earnings
| 15,541
| 14,885
| 4,865
|
Accumulated other comprehensive loss
| (772)
| (669)
| (465)
|
Total stockholders' equity
| 19,771
| 19,216
| 10,642
|
Total liabilities and stockholders' equity
| $ 209,502
| 214,658
| 107,673
|
|
|
|
|
Dollars in millions, except share per share data
|
|
|
|
| YTD
| YTD
|
Notable Items (1)
| 2Q23
| 1Q23
| 2Q22
| 6/30/23
| 6/30/22
|
Noninterest income
|
|
|
|
|
|
Rental income on operating lease equipment (2)
| $ (147)
| $ (145)
| $ (136)
| (292)
| (260)
|
Realized gain on sale of investment securities available for sale, net
| —
| 14
| —
| 14
| —
|
Fair value adjustment on marketable equity securities, net
| 10
| 9
| 6
| 19
| 3
|
Gain on sale of leasing equipment, net
| (4)
| (4)
| (5)
| (8)
| (11)
|
Gain on acquisition
| (55)
| (9,824)
| —
| (9,879)
| (431)
|
Gain on extinguishment of debt
| —
| —
| —
| —
| (6)
|
Other noninterest income (3)
| —
| —
| (6)
| —
| (6)
|
Noninterest income - total adjustments
| $ (196)
| $ (9,950)
| $ (141)
| (10,146)
| (711)
|
Noninterest expense
|
|
|
|
|
|
Depreciation on operating lease equipment (2)
| (91)
| (89)
| (89)
| (180)
| (170)
|
Maintenance and other operating lease equipment expense (2)
| (56)
| (56)
| (47)
| (112)
| (90)
|
Acquisition-related expenses
| (205)
| (28)
| (34)
| (233)
| (169)
|
Intangible asset amortization
| (18)
| (5)
| (6)
| (23)
| (12)
|
Other noninterest expense (4)
| —
| —
| (3)
| —
| 24
|
Noninterest expense - total adjustments
| $ (370)
| $ (178)
| $ (179)
| (548)
| (417)
|
Day 2 provision, including provision for unfunded commitments
| —
| (716)
| —
| (716)
| (513)
|
Provision for credit losses - investment securities available for sale
| 1
| (4)
| —
| (3)
| —
|
Provision for credit losses - total adjustments
| $ 1
| $ (720)
| $ —
| (719)
| (513)
|
Impact of notable items on pre-tax income
| $ 173
| $ (9,052)
| $ 38
| $ (8,879)
| $ 219
|
Income tax impact (5)
| 75
| 160
| 6
| 235
| 152
|
Impact of notable items on net income
| $ 98
| $ (9,212)
| $ 32
| (9,114)
| 67
|
Impact of notable items on diluted EPS
| $ 6.73
| $ (633.55)
| $ 2.00
| (626.84)
| 4.19
|
|
|
|
|
|
|
|
(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 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 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 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.
|
(3) Includes gain on sale of the corporate jet acquired from CIT.
|
(4) Includes specific litigation reserve for the HAMP litigation.
|
(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 Statement (unaudited) - Adjusted for Notable Items (1)
|
|
|
| BancShares
| BancShares
|
2Q23
| 1Q23
| 2Q22
| 6/30/23
| 6/30/22
|
Interest income
| $ 2,953
| $ 1,211
| $ 757
| 4,164
| 1,467
|
Interest expense
| 992
| 361
| 57
| 1,353
| 118
|
Net interest income
| 1,961
| 850
| 700
| 2,811
| 1,349
|
Provision (benefit) for credit losses
| 152
| 63
| 42
| 215
| (7)
|
Net interest income after provision for credit losses
| 1,809
| 787
| 658
| 2,596
| 1,356
|
Noninterest income
| 462
| 309
| 283
| 771
| 563
|
Noninterest expense
| 1,202
| 677
| 566
| 1,879
| 1,138
|
Income before income taxes
| 1,069
| 419
| 375
| 1,488
| 781
|
Income tax expense
| 289
| 113
| 88
| 402
| 188
|
Net income
| $ 780
| $ 306
| $ 287
| 1,086
| 593
|
Preferred stock dividends
| 15
| 14
| 17
| 29
| 24
|
Net income available to common stockholders
| $ 765
| $ 292
| $ 270
| 1,057
| 569
|
|
|
|
|
|
|
Basic earnings per common share
| $ 52.64
| $ 20.11
| $ 16.87
| 72.75
| 35.71
|
Diluted earnings per common share
| $ 52.60
| $ 20.09
| $ 16.86
| 72.69
| 35.67
|
Weighted average common shares outstanding (basic)
| 14,528,134
| 14,526,693
| 16,023,613
| 14,527,417
| 15,918,978
|
Weighted average common shares outstanding (diluted)
| 14,537,938
| 14,539,709
| 16,035,090
| 14,539,176
| 15,937,826
|
|
(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 & Leases by Class (end of period)
| June 30, 2023
| March 31, 2023
| June 30, 2022
|
Loans & Leases by Class
|
|
|
|
Commercial
|
|
|
|
Commercial construction
| $ 3,182
| $ 2,971
| $ 2,783
|
Owner-occupied commercial mortgages
| 14,748
| 14,456
| 13,795
|
Non-owner-occupied commercial mortgages
| 10,733
| 10,292
| 9,167
|
Commercial and industrial
| 25,376
| 24,508
| 23,554
|
Leases
| 2,130
| 2,163
| 2,178
|
Total commercial
| $ 56,169
| $ 54,390
| $ 51,477
|
|
|
|
|
Consumer
|
|
|
|
Residential mortgage
| $ 14,065
| $ 13,727
| $ 12,441
|
Revolving mortgage
| 1,900
| 1,916
| 1,893
|
Consumer auto
| 1,425
| 1,452
| 1,338
|
Consumer other
| 657
| 632
| 586
|
Total consumer
| $ 18,047
| $ 17,727
| $ 16,258
|
|
|
|
|
SVB
|
|
|
|
Global fund banking
| $ 29,333
| $ 36,097
| $ —
|
Investor dependent - early stage
| 1,840
| 1,994
| —
|
Investor dependent - growth stage
| 4,052
| 4,418
| —
|
Innovation C&I and cash flow dependent
| 8,905
| 9,193
| —
|
Private Bank
| 9,580
| 9,476
| —
|
CRE
| 2,530
| 2,444
| —
|
Other
| 2,559
| 2,549
| —
|
Total SVB
| $ 58,799
| $ 66,171
| $ —
|
Total loans and leases
| $ 133,015
| $ 138,288
| $ 67,735
|
Less: Allowance for credit losses
| (1,637)
| (1,605)
| (850)
|
Total loans and leases, net of allowance for credit losses
| $ 131,378
| $ 136,683
| $ 66,885
|
|
|
|
|
|
|
|
|
|
Deposits by Type (end of period)
| June 30, 2023
| March 31, 2023
| June 30, 2022
|
Demand
| $ 44,547
| $ 54,649
| $ 26,645
|
Checking with interest
| 24,809
| 23,743
| 16,285
|
Money market
| 29,149
| 30,598
| 24,699
|
Savings
| 26,389
| 17,932
| 13,319
|
Time
| 16,270
| 13,128
| 8,381
|
Total deposits
| $ 141,164
| $ 140,050
| $ 89,329
|
|
|
|
|
Dollars in millions
|
|
|
|
| YTD
| YTD
|
Credit Quality & Allowance
| 2Q23
| 1Q23
| 2Q22
| 6/30/23
| 6/30/22
|
Nonaccrual loans
| $ 929
| $ 828
| $ 513
|
|
|
Ratio of nonaccrual loans to total loans
| 0.70 %
| 0.60 %
| 0.76 %
|
|
|
|
|
|
|
|
|
Charge-offs
| $ (176)
| $ (62)
| $ (41)
| (238)
| (74)
|
Recoveries
| 19
| 12
| 19
| 31
| 37
|
Net charge-offs
| $ (157)
| $ (50)
| $ (22)
| (207)
| (37)
|
Net charge-off ratio
| 0.47 %
| 0.27 %
| 0.13 %
| 0.39 %
| 0.11 %
|
|
|
|
|
|
|
Allowance for credit losses to loans ratio
| 1.23 %
| 1.16 %
| 1.26 %
| 1.23 %
| 1.26 %
|
|
|
|
|
|
|
Allowance for credit losses - beginning
| $ 1,605
| $ 922
| $ 848
| 922
| 178
|
Initial PCD ACL
| 20
| 200
| (12)
| 220
| 272
|
Day 2 provision, excluding provision for unfunded commitments
| —
| 462
| —
| 462
| 454
|
Provision (benefit) for credit losses
| 169
| 71
| 36
| 240
| (17)
|
Net charge-offs
| (157)
| (50)
| (22)
| (207)
| (37)
|
Allowance for credit losses - ending
| $ 1,637
| $ 1,605
| $ 850
| 1,637
| 850
|
|
|
|
|
|
|
Dollars in millions
|
|
|
|
Average Balance Sheet
| 2Q23
| 1Q23
| 2Q22
|
Avg Balance
| Income/Expense
| Yield/Rate
| Avg Balance
| Income/Expense
| Yield/Rate
| Avg Balance
| Income/Expense
| Yield/Rate
|
Loans and leases (1)(2)
| $ 133,528
| $ 2,353
| 7.06 %
| $ 73,900
| $ 1,017
| 5.57 %
| $ 65,298
| $ 655
| 4.03 %
|
Investment securities
| 19,806
| 117
| 2.36
| 19,416
| 107
| 2.21
| 19,185
| 89
| 1.85
|
Securities purchased under agreements to resell
| 191
| 3
| 4.92
| —
| —
| —
| —
| —
| —
|
Interest-earning deposits at banks
| 38,014
| 480
| 5.07
| 7,585
| 87
| 4.61
| 7,629
| 13
| 0.72
|
Total interest-earning assets (2)
| $ 191,539
| $ 2,953
| 6.18 %
| $ 100,901
| $ 1,211
| 4.85 %
| $ 92,112
| $ 757
| 3.28 %
|
|
|
|
|
|
|
|
|
|
|
Operating lease equipment, net (including held for sale)
| $ 8,405
|
|
| $ 8,236
|
|
| $ 7,973
|
|
|
Cash and due from banks
| 1,161
|
|
| 595
|
|
| 524
|
|
|
Allowance for credit losses
| (1,600)
|
|
| (936)
|
|
| (849)
|
|
|
All other noninterest-earning assets
| 9,804
|
|
| 7,368
|
|
| 7,815
|
|
|
Total assets
| $ 209,309
|
|
| $ 116,164
|
|
| $ 107,575
|
|
|
Interest-bearing deposits
|
|
|
|
|
|
|
|
|
|
Checking with interest
| $ 24,164
| $ 118
| 1.92 %
| $ 16,494
| $ 22
| 0.50 %
| $ 16,503
| $ 4
| 0.12 %
|
Money Market
| 29,066
| 148
| 2.04
| 21,216
| 80
| 1.53
| 25,468
| 18
| 0.28
|
Savings
| 21,979
| 188
| 3.44
| 17,521
| 110
| 2.54
| 13,303
| 11
| 0.34
|
Time deposits
| 14,958
| 121
| 3.24
| 12,126
| 76
| 2.55
| 8,796
| 9
| 0.38
|
Total interest-bearing deposits
| 90,167
| 575
| 2.56
| 67,357
| 288
| 1.73
| 64,070
| 42
| 0.26
|
Borrowings:
|
|
|
|
|
|
|
|
|
|
Securities sold under customer repurchase agreements
| 456
| 1
| 0.31
| 455
| —
| 0.30
| 627
| —
| 0.16
|
Short-term FHLB borrowings
| 110
| 1
| 5.17
| 328
| 4
| 4.67
| —
| —
| —
|
Short-term borrowings
| 566
| 2
| 1.26
| 783
| 4
| 2.13
| 627
| —
| 0.16
|
FHLB borrowings
| 5,558
| 74
| 5.35
| 3,284
| 40
| 4.96
| 386
| 2
| 1.64
|
Senior unsecured borrowings
| 798
| 4
| 2.11
| 883
| 5
| 2.06
| 894
| 4
| 2.05
|
Subordinated debt
| 1,045
| 10
| 3.59
| 1,048
| 9
| 3.54
| 1,057
| 8
| 3.06
|
Other borrowings
| 35,168
| 327
| 3.74
| 1,978
| 15
| 2.95
| 83
| 1
| 2.37
|
Long-term borrowings
| 42,569
| 415
| 3.91
| 7,193
| 69
| 3.84
| 2,420
| 15
| 2.43
|
Total borrowings
| 43,135
| 417
| 3.88
| 7,976
| 73
| 3.68
| 3,047
| 15
| 1.96
|
Total interest-bearing liabilities
| $ 133,302
| $ 992
| 2.98 %
| $ 75,333
| $ 361
| 1.94 %
| $ 67,117
| $ 57
| 0.34 %
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits
| $ 47,241
|
|
| $ 26,482
|
|
| $ 26,551
|
|
|
Credit balances of factoring clients
| 1,168
|
|
| 1,007
|
|
| 1,189
|
|
|
Other noninterest-bearing liabilities
| 8,077
|
|
| 1,973
|
|
| 2,151
|
|
|
Stockholders' equity
| 19,521
|
|
| 11,369
|
|
| 10,567
|
|
|
Total liabilities and stockholders' equity
| $ 209,309
|
|
| $ 116,164
|
|
| $ 107,575
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
| $ 1,961
|
|
| $ 850
|
|
| $ 700
|
|
Net interest spread (2)
|
|
| 3.20 %
|
|
| 2.91 %
|
|
| 2.94 %
|
Net interest margin (2)
|
|
| 4.10 %
|
|
| 3.41 %
|
|
| 3.04 %
|
|
|
|
|
|
|
|
|
|
|
(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 average credit balances of factoring clients.
|
Note: Certain items above do not precisely recalculate as presented due to rounding.
|
|
Dollars in millions
|
|
|
|
Average Balance Sheet
| YTD 6/30/2023
| YTD 6/30/2022
|
Avg Balance
| Income/Expense
| Yield/Rate
| Avg Balance
| Income/Expense
| Yield/Rate
|
Loans and leases (1)(2)
| $ 103,878
| $ 3,370
| 6.53 %
| $ 64,724
| $ 1,276
| 3.96 %
|
Investment securities
| 19,612
| 224
| 2.29
| 19,338
| 172
| 1.78
|
Securities purchased under agreements to resell
| 96
| 3
| 4.92
| —
| —
| —
|
Interest-earning deposits at banks
| 22,884
| 567
| 4.99
| 9,542
| 19
| 0.40
|
Total interest-earning assets (2)
| $ 146,470
| $ 4,164
| 5.72 %
| $ 93,604
| $ 1,467
| 3.14 %
|
|
|
|
|
|
|
|
Operating lease equipment, net (including held for sale)
| $ 8,321
|
|
| $ 7,949
|
|
|
Cash and due from banks
| 880
|
|
| 530
|
|
|
Allowance for credit losses
| (1,270)
|
|
| (882)
|
|
|
All other noninterest-earning assets
| 8,593
|
|
| 7,776
|
|
|
Total assets
| $ 162,994
|
|
| $ 108,977
|
|
|
Interest-bearing deposits
|
|
|
|
|
|
|
Checking with interest
| $ 20,350
| $ 140
| 1.35 %
| $ 16,578
| $ 9
| 0.11 %
|
Money Market
| 25,162
| 228
| 1.82
| 25,832
| 33
| 0.26
|
Savings
| 19,762
| 298
| 3.04
| 13,480
| 20
| 0.30
|
Time deposits
| 13,550
| 197
| 2.93
| 9,293
| 19
| 0.40
|
Total interest-bearing deposits
| 78,824
| 863
| 2.21
| 65,183
| 81
| 0.25
|
Borrowings:
|
|
|
|
|
|
|
Securities sold under customer repurchase agreements
| 456
| 1
| 0.31
| 614
| —
| 0.16
|
Short-term FHLB borrowings
| 218
| 5
| 4.79
| —
| —
| —
|
Short-term borrowings
| 674
| 6
| 1.76
| 614
| —
| 0.16
|
FHLB borrowings
| 4,427
| 114
| 5.20
| 513
| 4
| 1.41
|
Senior unsecured borrowings
| 840
| 9
| 2.09
| 1,801
| 16
| 1.80
|
Subordinated debt
| 1,047
| 19
| 3.57
| 1,059
| 16
| 3.01
|
Other borrowings
| 18,665
| 342
| 3.70
| 84
| 1
| 2.20
|
Long-term borrowings
| 24,979
| 484
| 3.90
| 3,457
| 37
| 2.12
|
Total borrowings
| 25,653
| 490
| 3.85
| 4,071
| 37
| 2.12
|
Total interest-bearing liabilities
| $ 104,477
| $ 1,353
| 2.61 %
| $ 69,254
| $ 118
| 0.34 %
|
|
|
|
|
|
|
|
Noninterest-bearing deposits
| $ 36,919
|
|
| $ 25,936
|
|
|
Credit balances of factoring clients
| 1,088
|
|
| 1,175
|
|
|
Other noninterest-bearing liabilities
| 5,065
|
|
| 2,117
|
|
|
Stockholders' equity
| 15,445
|
|
| 10,495
|
|
|
Total liabilities and stockholders' equity
| $ 162,994
|
|
| $ 108,977
|
|
|
|
|
|
|
|
|
|
Net interest income
|
| $ 2,811
|
|
| $ 1,349
|
|
Net interest spread (2)
|
|
| 3.11 %
|
|
| 2.80 %
|
Net interest margin (2)
|
|
| 3.86 %
|
|
| 2.89 %
|
(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 average 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
|
|
| 2Q23
| 1Q23
| 2Q22
| 6/30/2023
| 6/30/2022
|
|
|
|
|
|
|
|
|
Net income and EPS
|
|
|
|
|
|
|
|
Net income (GAAP)
|
| a
| $ 682
| $ 9,518
| $ 255
| $ 10,200
| $ 526
|
Preferred stock dividends
|
|
| 15
| 14
| 17
| 29
| 24
|
Net income available to common stockholders (GAAP)
|
| b
| 667
| 9,504
| 238
| 10,171
| 502
|
Total notable items, after income tax
|
| c
| 98
| (9,212)
| 32
| (9,114)
| 67
|
Adjusted net income (non-GAAP)
|
| d = (a+c)
| 780
| 306
| 287
| 1,086
| 593
|
Adjusted net income available to common stockholders (non-GAAP)
|
| e = (b+c)
| $ 765
| $ 292
| $ 270
| $ 1,057
| $ 569
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
Basic
|
| f
| 14,528,134
| 14,526,693
| 16,023,613
| 14,527,417
| 15,918,978
|
Diluted
|
| g
| 14,537,938
| 14,539,709
| 16,035,090
| 14,539,176
| 15,937,826
|
EPS (GAAP)
|
|
|
|
|
|
|
|
Basic
|
| b/f
| $ 45.90
| $ 654.22
| $ 14.87
| $ 700.10
| $ 31.52
|
Diluted
|
| b/g
| 45.87
| 653.64
| 14.86
| 699.53
| 31.48
|
Adjusted EPS (non-GAAP)
|
|
|
|
|
|
|
|
Basic
|
| e/f
| $ 52.64
| $ 20.11
| $ 16.87
| $ 72.75
| $ 35.71
|
Diluted
|
| e/g
| 52.60
| 20.09
| 16.86
| 72.69
| 35.67
|
|
|
|
|
|
|
|
|
Noninterest income and expense
|
|
|
|
|
|
|
|
Noninterest income
|
| h
| $ 658
| $ 10,259
| $ 424
| $ 10,917
| $ 1,274
|
Impact of notable items, before income tax
|
|
| (196)
| (9,950)
| (141)
| (10,146)
| (711)
|
Adjusted or core noninterest income
|
| i
| $ 462
| $ 309
| $ 283
| $ 771
| $ 563
|
|
|
|
|
|
|
|
|
Noninterest expense
|
| j
| $ 1,572
| $ 855
| $ 745
| $ 2,427
| $ 1,555
|
Impact of notable items, before income tax
|
|
| (370)
| (178)
| (179)
| (548)
| (417)
|
Adjusted or core noninterest expense
|
| k
| $ 1,202
| $ 677
| $ 566
| $ 1,879
| $ 1,138
|
|
|
|
|
|
|
|
|
Provision (benefit) for credit losses
|
|
|
|
|
|
|
|
Provision (benefit) for credit losses
|
|
| $ 151
| $ 783
| $ 42
| $ 934
| $ 506
|
Plus: Day 2 provision for credit losses
|
|
| —
| (716)
| —
| (716)
| (513)
|
Plus: Specific reserve for AFS securities
|
|
| 1
| (4)
| —
| (3)
| —
|
Adjusted provision (benefit) for credit losses
|
|
| $ 152
| $ 63
| $ 42
| $ 215
| $ (7)
|
|
|
|
|
|
|
|
|
PPNR
|
|
|
|
|
|
|
|
Net income (GAAP)
|
| a
| $ 682
| $ 9,518
| $ 255
| 10,200
| 526
|
Plus:
|
|
|
|
|
|
|
|
Provision for credit losses
|
|
| 151
| 783
| 42
| 934
| 506
|
Income tax expense (benefit)
|
|
| 214
| (47)
| 82
| 167
| 36
|
PPNR (non-GAAP)
|
| l
| $ 1,047
| $ 10,254
| $ 379
| 11,301
| 1,068
|
Plus: total notable items, before income tax
|
|
| 174
| (9,772)
| 38
| (9,598)
| (294)
|
Adjusted PPNR (non-GAAP)
|
| m
| $ 1,220
| $ 482
| $ 417
| 1,702
| 774
|
|
|
|
|
|
|
|
|
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)
|
|
| 2Q23
| 1Q23
| 2Q22
| 6/30/2023
| 6/30/2022
|
|
|
|
|
|
|
|
|
ROA
|
|
|
|
|
|
|
|
Net income (GAAP)
|
| a
| $ 682
| $ 9,518
| $ 255
| $ 10,200
| $ 526
|
Annualized net income
|
| n = a annualized
| 2,734
| 38,602
| 1,023
| 20,569
| 1,061
|
Adjusted net income (non-GAAP)
|
| d
| 780
| 306
| 287
| 1,086
| 593
|
Annualized adjusted net income
|
| p = d annualized
| 3,126
| 1,244
| 1,151
| 2,190
| 1,195
|
Average assets
|
| o
| 209,309
| 116,164
| 107,575
| 162,994
| 108,977
|
ROA
|
| n/o
| 1.31 %
| 33.23 %
| 0.95 %
| 12.62 %
| 0.97 %
|
Adjusted ROA
|
| p/o
| 1.49
| 1.07
| 1.07
| 1.34
| 1.10
|
|
|
|
|
|
|
|
|
PPNR ROA
|
|
|
|
|
|
|
|
PPNR (non-GAAP)
|
| l
| $ 1,047
| $ 10,254
| $ 379
| $ 11,301
| $ 1,068
|
Annualized PPNR
|
| q = l annualized
| 4,200
| 41,586
| 1,519
| 22,789
| 2,154
|
Adjusted PPNR (non-GAAP)
|
| m
| 1,220
| 482
| 417
| 1,702
| 774
|
Annualized PPNR
|
| r = m annualized
| 4,893
| 1,954
| 1,672
| 3,432
| 1,560
|
PPNR ROA
|
| q/o
| 2.00 %
| 35.80 %
| 1.41 %
| 13.98 %
| 1.98 %
|
Adjusted PPNR ROA
|
| r/o
| 2.34
| 1.69
| 1.56
| 2.11
| 1.44
|
|
|
|
|
|
|
|
|
ROE and ROTCE
|
|
|
|
|
|
|
|
Annualized net income available to common stockholders
|
| s = b annualized
| $ 2,675
| $ 38,543
| $ 955
| $ 20,510
| $ 1,012
|
Annualized adjusted net income available to common stockholders
|
| t = e annualized
| $ 3,067
| $ 1,185
| $ 1,083
| $ 2,131
| $ 1,146
|
Average stockholders' equity (GAAP)
|
|
| $ 19,521
| $ 11,369
| $ 10,567
| $ 15,445
| $ 10,495
|
Less: average preferred stock
|
|
| 881
| 881
| 881
| 881
| 871
|
Average common stockholders' equity (non-GAAP)
|
| u
| $ 18,640
| $ 10,488
| $ 9,686
| $ 14,564
| $ 9,624
|
Less: average goodwill
|
|
| 346
| 346
| 346
| 346
| 346
|
Less: average other intangible assets
|
|
| 357
| 175
| 153
| 266
| 168
|
Average tangible common equity (non-GAAP)
|
| v
| $ 17,937
| $ 9,967
| $ 9,186
| 13,952
| 9,110
|
ROE
|
| s/u
| 14.35 %
| 367.47 %
| 9.87 %
| 140.82 %
| 10.51 %
|
Adjusted ROE
|
| t/u
| 16.46
| 11.30
| 11.19
| 14.63
| 11.91
|
ROTCE
|
| s/v
| 14.91
| 386.69
| 10.40
| 146.99
| 11.11
|
Adjusted ROTCE
|
| t/v
| 17.10
| 11.89
| 11.80
| 15.27
| 12.58
|
|
|
|
|
|
|
|
|
Tangible common equity to tangible assets
|
|
|
|
|
|
|
|
Stockholders' equity (GAAP)
|
| w
| $ 19,771
| $ 19,216
| $ 10,642
| 19,771
| 10,642
|
Less: preferred stock
|
|
| 881
| 881
| 881
| 881
| 881
|
Common equity (non-GAAP)
|
| x
| $ 18,890
| $ 18,335
| $ 9,761
| 18,890
| 9,761
|
Less: goodwill
|
|
| 346
| 346
| 346
| 346
| 346
|
Less: other intangible assets
|
|
| 347
| 364
| 150
| 347
| 150
|
Tangible common equity (non-GAAP)
|
| y
| $ 18,197
| $ 17,625
| $ 9,265
| 18,197
| 9,265
|
Total assets (GAAP)
|
| z
| 209,502
| 214,658
| 107,673
| 209,502
| 107,673
|
Tangible assets (non-GAAP)
|
| aa
| 208,809
| 213,948
| 107,177
| 208,809
| 107,177
|
Total equity to total assets
|
| w/z
| 9.44 %
| 8.95 %
| 9.88 %
| 9.44 %
| 9.88 %
|
Tangible common equity to tangible assets (non-GAAP)
|
| y/aa
| 8.71
| 8.24
| 8.64
| 8.71 %
| 8.64 %
|
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)
|
|
| 2Q23
| 1Q23
| 2Q22
| 6/30/2023
| 6/30/2022
|
|
|
|
|
|
|
|
|
Book value and tangible book value per common share
|
|
|
|
|
|
|
|
Common shares outstanding at period end
|
| bb
| 14,520,034
| 14,519,993
| 16,002,385
| 14,520,034
| 16,002,387
|
Book value per share
|
| x/bb
| $ 1,300.93
| $ 1,262.76
| $ 609.95
| 1,300.93
| 609.95
|
Tangible book value per share
|
| y/bb
| 1,253.20
| 1,213.82
| 578.92
| 1,253.20
| 578.92
|
|
|
|
|
|
|
|
|
Efficiency ratio
|
|
|
|
|
|
|
|
Net interest income
|
| cc
| $ 1,961
| $ 850
| $ 700
| 2,811
| 1,349
|
Efficiency ratio (GAAP)
|
| j / (h + cc)
| 60.06 %
| 7.70 %
| 66.34 %
| 17.68 %
| 59.26 %
|
Adjusted efficiency ratio (non-GAAP)(1)
|
| k / (i + cc)
| 49.65
| 58.39
| 57.55
| 52.47 %
| 59.50 %
|
|
|
|
|
|
|
|
|
Rental income on operating lease equipment
|
|
|
|
|
|
|
|
Rental income on operating lease equipment
|
|
| $ 238
| $ 233
| $ 213
| $ 471
| $ 421
|
Less:
|
|
|
|
|
|
|
|
Depreciation on operating lease equipment
|
|
| 91
| 89
| 89
| 180
| 170
|
Maintenance and other operating lease expenses
|
|
| 56
| 56
| 47
| 112
| 90
|
Adjusted rental income on operating lease equipment
|
|
| $ 91
| $ 88
| $ 77
| $ 179
| $ 161
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
|
|
|
|
Income tax expense (benefit)
|
|
| $ 214
| $ (47)
| $ 82
| $ 167
| $ 36
|
Impact of notable items
|
|
| 75
| 160
| 6
| 235
| 152
|
Adjusted income tax expense
|
|
| $ 289
| $ 113
| $ 88
| $ 402
| $ 188
|
|
|
|
|
|
|
|
|
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
|
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SOURCE First Citizens BancShares, Inc.
