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: 109282
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,
2023
|
June 30,
2023
|
September 30,
2022
|
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,
2023
|
June 30,
2023
|
September 30,
2022
|
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
Balance
|
Income/
Expense
|
Yield/Rate
|
Avg
Balance
|
Income/
Expense
|
Yield/Rate
|
Avg
Balance
|
Income/
Expense
|
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
Balance
|
Income/
Expense
|
Yield/Rate
|
Avg
Balance
|
Income/
Expense
|
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
|
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SOURCE First Citizens BancShares, Inc.