10/23/2015
Citizens Financial Group, Inc. Reports Third Quarter Net Income of $220 Million; Diluted EPS of $0.40, up 18% from third quarter 2014
Focused execution on growth and efficiency initiatives drives
positive operating leverage
PROVIDENCE, R.I.--(BUSINESS WIRE)--
Citizens Financial Group, Inc. (NYSE: CFG or “Citizens") today reported
third quarter net income of $220 million, or $0.40 per diluted common
share, compared with third quarter 2014 net income of $189 million, or
$0.34 per diluted common share. Third quarter 2015 net income was up $30
million from second quarter 2015 net income of $190 million, and diluted
EPS increased $0.05 from $0.35 in second quarter 2015. As expected, the
company recorded no restructuring charges and special items in third
quarter 2015 compared with $25 million after-tax, or $0.05 per diluted
common share, in second quarter 2015, and $13 million after-tax, or
$0.02 per diluted common share, in the third quarter 2014, as detailed
in the Discussion of Results portion of this release. Third
quarter 2015 diluted EPS totaled $0.40 compared to Adjusted diluted EPS*
of $0.40 in second quarter 2015 and $0.36 in third quarter 2014,
reflecting the continued focus on enhancing efficiency and delivering
revenue growth in the face of the persistent low-rate environment. Third
quarter 2015 net income available to common stockholders was reduced by
$7 million, or $0.01 per share, related to preferred stock dividends.
Chairman and Chief Executive Officer Bruce Van Saun commented, “We
delivered solid financial results this quarter, reflecting good
execution of our growth and efficiency initiatives. During the quarter
we continued to add strong leadership to our management team, namely Don
McCree to lead our Commercial business, John Bahnken to run Wealth
Management, and Chris Nard to run our Mortgage business. We are making
significant strides in improving our overall performance and delivering
for our stakeholders.”
Return on Average Tangible Common Equity (“ROTCE”)* of 6.6% in third
quarter 2015 improved from 5.9% in second quarter 2015 and 5.8% in third
quarter 2014. Third quarter 2015 results compare with Adjusted ROTCE* of
6.7% in second quarter 2015 and 6.2% in third quarter 2014.
Citizens also announced that its board of directors declared a quarterly
cash dividend of $0.10 per common share. The dividend is payable on
November 19, 2015 to shareholders of record at the close of business on
November 5, 2015.
Key Highlights
-
Third quarter highlights, as compared with second quarter 2015,
include 2% net interest income growth, a four basis point improvement
in net interest margin, positive operating leverage given good expense
discipline, and continued loan growth and business momentum. Tangible
book value per share increased by 2%.
-
Compared with third quarter 2014 Adjusted results*, third quarter 2015
results also reflect strong positive operating leverage, with 4% total
revenue growth and a 1% increase in noninterest expense, improving our
efficiency ratio to 66% from 68%.
Third Quarter 2015 vs. Second Quarter 2015
Results
-
Total revenue increased 1%, as 2% growth in net interest income was
partially offset by a reduction in noninterest income from relatively
strong second quarter 2015 levels.
-
Net interest income of $856 million increased $16 million, driven
by average loan growth of 1% and an additional day in the quarter.
-
Net interest margin of 2.76% increased four basis points largely
reflecting modest balance sheet deleveraging and improving retail
and commercial loan yields, partially offset by an increase in
deposit costs.
-
Noninterest income of $353 million decreased $7 million, as an
increase in other income, including $8 million in branch real
estate gains, and service charges and fee growth was more than
offset by an $8 million reduction in mortgage servicing rights
valuation, lower capital markets fees from relatively strong
second quarter levels, and a $7 million reduction in securities
gains.
-
Noninterest expense of $798 million decreased $43 million, driven by a
$40 million decrease in restructuring charges and special items.
Noninterest expense was down slightly from adjusted second quarter
2015 levels as the benefit of lower equipment expense and other
expense was partially offset by an increase in outside services.
-
Efficiency ratio of 66% improved 400 basis points driven by a $40
million decrease in restructuring charges and special items. The
efficiency ratio improved 1% from an Adjusted efficiency ratio* of 67%
in second quarter 2015.
-
Provision for credit losses of $76 million remained broadly stable.
Balance Sheet
-
Average interest-earning assets of $123.0 billion decreased $188
million, as loan growth of $1.2 billion, largely in student, mortgage,
auto, and commercial real estate was more than offset by a decrease in
short-term investment portfolio assets, largely interest-bearing cash
balances.
-
Average deposits increased $2.5 billion, or 2%, driven by broad-based
growth across money market, interest checking and demand deposits.
-
Nonperforming loans and leases (“NPLs”) decreased $16 million, or 2%,
to 1.06% of loans and leases compared with 1.09% in second quarter
2015 and 1.19% third quarter 2014; Allowance coverage of NPLs
increased to 116% from 114% in second quarter 2015 and 111% in third
quarter 2014.
-
Capital strength remained robust with a common equity Tier 1 (“CET1”)
capital ratio of 11.8%.
Third Quarter 2015 vs. Third Quarter 2014
-
Total revenue of $1.2 billion increased 4% from the prior year
quarter, on 4% growth in net interest income and a 4% increase in
noninterest income.
-
Net interest income of $856 million increased $36 million, driven by
8% average loan growth.
-
Noninterest income was up $12 million, largely as higher other income,
card and trust and investment services fees were partially offset by
lower mortgage banking, capital markets and foreign exchange and trade
finance fees.
-
Noninterest expense decreased $12 million, driven by a $21 million
decrease in restructuring charges and special items. Noninterest
expense increased $9 million on an Adjusted basis* as a reduction in
salaries and employee benefits was more than offset by increased
advertising, insurance costs, outside services and equipment costs
which included the impact of continued investments to drive growth.
-
Provision for credit losses of $76 million remained stable, largely
reflecting the benefit of improvement in credit quality offset by the
effect of continued loan growth.
-
Net income of $220 million increased $31 million, or 16%, from third
quarter 2014 and increased $18 million, or 9%, from Adjusted* third
quarter 2014 levels.
-
ROTCE of 6.6% compares with an Adjusted ROTCE* of 6.2% in the third
quarter 2014.
-
Average interest-earning assets increased 5%, as loan and lease growth
of 8% was partially offset by a 6% decrease in the investment
portfolio.
Update on Plan Execution
-
Progress on initiatives to drive revenue growth and enhance efficiency
continues:
- Consumer Banking –Continued loan and deposit growth, with
particular strength in student lending and unsecured credit;
checking households up 2% from 3Q14 with new client cross-sell
rates up 8%, and addition of new leadership in important growth
areas such as Wealth and Mortgage.
- CommercialBanking – Focus on enhancing risk
adjusted returns and comprehensive pricing initiatives is helping
to drive attractive loan growth, particularly in Franchise Finance
and CRE, with improving loan yields; renewed emphasis on lowering
cost of deposit growth is delivering results, and Treasury
Solutions fees are up 7% from 3Q14.
- Expense initiatives - Remain on track to reach our savings
target of $200 million by end 2016.
-
Incremental revenue and efficiency initiatives are tracking as planned.
- Balance sheet optimization initiatives to improve
effectiveness of deposit gathering efforts and to direct asset
growth to higher return categories is progressing well.
- TOP II initiatives are building momentum – early results
for Treasury Solutions pricing initiative are in line with
expectations, and Operations Transformation initiatives are being
implemented. Consumer and Commercial cross-selling initiatives are
showing encouraging early indications.
*These are non-GAAP financial measures. Please see Non-GAAP
Reconciliation Tables at the end of this release for an explanation of
our use of non-GAAP financial measures and their reconciliation to GAAP.
Where there is a reference to an “Adjusted” result in a paragraph, all
measures which follow that “Adjusted” result are also “Adjusted” and
exclude restructuring charges and special items as applicable. There
were no restructuring charges or special items recorded in third quarter
2015.
|
|
|
|
| |
| | | |
| | |
| |
Earnings highlights | | | | | | | | | | | | | | 3Q15 change from |
($s in millions, except per share data) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | 2Q15 |
|
|
| 3Q14 |
Earnings | | | | | | | | | | | | | | $ |
| | % | | | | $ |
| | % |
Net interest income
| | | | |
$
|
856
| | |
$
|
840
| | |
$
|
820
| | |
$
|
16
| | | |
2
|
%
| | | |
$
|
36
| | | |
4
|
%
|
Noninterest income
| | | | | |
353
| | | |
360
| | | |
341
| | | |
(7
|
)
| | |
(2
|
)
| | | | |
12
| | | |
4
| |
Total revenue
| | | | | |
1,209
| | | |
1,200
| | | |
1,161
| | | |
9
| | | |
1
| | | | | |
48
| | | |
4
| |
Noninterest expense
| | | | | |
798
| | | |
841
| | | |
810
| | | |
(43
|
)
| | |
(5
|
)
| | | | |
(12
|
)
| | |
(1
|
)
|
Pre-provision profit
| | | | | |
411
| | | |
359
| | | |
351
| | | |
52
| | | |
14
| | | | | |
60
| | | |
17
| |
Provision for credit losses
|
|
|
|
|
|
76
|
|
|
|
77
|
|
|
|
77
| | |
|
(1
|
)
| | |
(1
|
)
| | | |
|
(1
|
)
| | |
(1
|
)
|
Net income
| | | | | |
220
| | | |
190
| | | |
189
| | | |
30
| | | |
16
| | | | | |
31
| | | |
16
| |
Net income available to common shareholders
| | | | | |
213
| | | |
190
| | | |
189
| | | |
23
| | | |
12
| | | | | |
24
| | | |
13
| |
After-tax restructuring charges and special items* |
|
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
13
| | |
$
|
(25
|
)
| | |
(100
|
) %
| | | |
$
|
(13
|
)
| | |
(100
|
) %
|
Net income available to common shareholders excluding restructuring
charges and special items* |
|
|
|
|
$
|
213
|
|
|
$
|
215
|
|
|
$
|
202
| | |
$
|
(2
|
)
| | |
(1
|
) %
| | | |
$
|
11
|
| | |
5
|
%
|
Average common shares outstanding | | | | | | | | | | | | | | | | | | | | | | | | |
Basic (in millions)
| | | | | |
531.0
| | | |
537.7
| | | |
560.0
| | | |
(6.7
|
)
| | |
(1
|
) %
| | | | |
(29.0
|
)
| | |
(5
|
) %
|
Diluted (in millions)
| | | | | |
533.4
| | | |
539.9
| | | |
560.2
| | | |
(6.5
|
)
| | |
(1
|
) %
| | | | |
(26.8
|
)
| | |
(5
|
) %
|
Diluted earnings per share
| | | | |
$
|
0.40
| | |
$
|
0.35
| | |
$
|
0.34
| | |
$
|
0.05
| | | |
14
|
%
| | | |
$
|
0.06
| | | |
18
|
%
|
Diluted earnings per share, excluding restructuring charges and
special items* |
|
|
|
|
$
|
0.40
|
|
|
$
|
0.40
|
|
|
$
|
0.36
| | |
$
|
—
|
| | |
—
|
%
| | | |
$
|
0.04
|
| | |
11
|
%
|
Financial ratios | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest margin
| | | | | |
2.76
| |
%
| |
2.72
|
%
| | |
2.77
|
%
| | |
4
| | |
bps
| | | | | |
(1
|
)
| |
bps
| |
Noninterest income as a % of total revenue
| | | | | |
29.2
| | | |
30.0
| | | |
29.4
| | | |
(80
|
)
| |
bps
| | | | | |
(17
|
)
| |
bps
| |
Effective income tax rate
| | | | | |
34.1
| | | |
32.7
| | | |
30.8
| | | |
143
| | |
bps
| | | | | |
331
| | |
bps
| |
Efficiency ratio* | | | | | |
66
| | | |
70
| | | |
70
| | | |
(400
|
)
| |
bps
| | | | | |
(382
|
)
| |
bps
| |
Efficiency ratio, excluding restructuring charges and special items* | | | | | |
66
| | | |
67
| | | |
68
| | | |
(68
|
)
| |
bps
| | | | | |
(200
|
)
| |
bps
| |
Return on average tangible common equity* | | | | | |
6.6
| | | |
5.9
| | | |
5.8
| | | |
70
| | |
bps
| | | | | |
79
| | |
bps
| |
Return on average tangible common equity excluding restructuring
charges and special items* | | | | | |
6.6
| | | |
6.7
| | | |
6.2
| | | |
(7
|
)
| |
bps
| | | | | |
38
| | |
bps
| |
Return on average common equity
| | | | | |
4.4
| | | |
3.9
| | | |
3.9
| | | |
46
| | |
bps
| | | | | |
53
| | |
bps
| |
Return on average total assets
| | | | | |
0.7
| | | |
0.6
| | | |
0.6
| | | |
9
| | |
bps
| | | | | |
7
| | |
bps
| |
Return on average total tangible assets* |
|
|
|
|
|
0.7
|
|
%
|
|
0.6
|
%
|
|
|
0.6
|
%
| | |
9
| | |
bps
| | | | | |
7
| | |
bps
| |
Capital adequacy(1)(2) | | | | | | | | | | | | | | | | | | | | | | | | |
Common equity tier 1 capital ratio(3) | | | | | |
11.8
| |
%
| |
11.8
|
%
| | |
12.9
|
%
| | | | | | | | | | | | |
Total capital ratio
| | | | | |
15.4
| | | |
15.3
| | | |
16.1
| | | | | | | | | | | | | |
Tier 1 leverage ratio
|
|
|
|
|
|
10.4
|
|
%
|
|
10.4
|
%
|
|
|
10.9
|
%
| | | | | | | | | | | | |
Asset quality(2) | | | | | | | | | | | | | | | | | | | | | | | | |
Total nonperforming loans and leases as a % of total loans and leases
| | | | | |
1.06
| |
%
| |
1.09
|
%
| | |
1.19
|
%
| | |
(3
|
)
| |
bps
| | | | | |
(13
|
)
| |
bps
| |
Allowance for loan and lease losses as a % of loans and leases
| | | | | |
1.23
| | | |
1.24
| | | |
1.32
| | | |
(1
|
)
| |
bps
| | | | | |
(9
|
)
| |
bps
| |
Allowance for loan and lease losses as a % of nonperforming loans
and leases
| | | | | |
116
| | | |
114
| | | |
111
| | | |
175
| | |
bps
| | | | | |
482
| | |
bps
| |
Net charge-offs as a % of average loans and leases
|
|
|
|
|
|
0.31
|
|
%
|
|
0.33
|
%
|
|
|
0.38
|
%
| | |
(2
|
)
| |
bps
| | | | | |
(7
|
)
| |
bps
| |
* These are non-GAAP financial measures. Please see Non-GAAP
Reconciliation Tables at the end of this release for an
explanation of our use of non-GAAP financial measures and
reconciliation of those non-GAAP financial measures to GAAP. All
references to Adjusted results exclude restructuring charges and
special items.
|
1 Current reporting period regulatory capital ratios
are preliminary.
|
2 Capital adequacy and asset quality ratios calculated
on a period-end basis, except net charge-offs.
|
3 CET1 capital under Basel III replaced Tier 1 common
capital under Basel I effective January 1, 2015.
|
Discussion of Results:
Third quarter 2015 pre-provision profit of $411 million and net income
of $220 million included no restructuring charges and special items.
Second quarter 2015 pre-provision profit and net income were reduced by
a net $40 million pre-tax, or $25 million after-tax, of restructuring
charges and special items, largely related to efforts to improve
processes and enhance efficiencies, as well as rebranding and separation
from The Royal Bank of Scotland Group plc (“RBS”). Third quarter 2014
pre-provision profit and net income were reduced by a net $21 million
pre-tax, or $13 million after-tax, of restructuring charges and special
items. All references to Adjusted results* exclude the impact of
restructuring charges and special items.
|
|
|
|
| |
|
| |
|
| |
|
| |
Restructuring charges and special items | | | 3Q15 change from |
($s in millions, except per share data) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | 2Q15 |
| 3Q14 |
| | | | | | | | | | | | | | | |
|
Pre-tax total noninterest expense restructuring charges and special
items
| | | | | |
—
| | | |
40
| | | | |
21
| | | | |
(40
|
)
| | |
(21
|
)
|
After-tax total noninterest expense restructuring charges and
special items
| | | | | |
—
| | | |
25
| | | | |
13
| | | | |
(25
|
)
| | |
(13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
| | |
| |
|
Pre-tax restructuring charges and special items
|
|
|
|
|
|
—
|
|
|
|
(40
|
)
|
|
|
|
(21
|
)
| | |
|
40
|
| |
|
21
|
|
After-tax restructuring charges and special items
|
|
|
|
|
|
—
|
|
|
|
(25
|
)
|
|
|
|
(13
|
)
| | |
|
25
|
| |
|
13
|
|
| | | | | | | | | | | | | | | |
|
Diluted EPS impact
| | | | |
$
|
—
| | |
$
|
(0.05
|
)
| | |
$
|
(0.02
|
)
| | |
$
|
0.05
| | |
$
|
0.02
| |
| | | | | | | | | | | | | | | |
|
|
|
|
|
| |
|
| |
|
| |
|
| |
| |
| |
| |
Adjusted results* | | | 3Q15 change from |
($s in millions) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | 2Q15 | | 3Q14 |
Net interest income
| | | | |
$
|
856
| | |
$
|
840
| | |
$
|
820
| | |
$
|
16
| | |
2
|
%
| |
$
|
36
| | |
4
|
%
|
Noninterest income
| | | | |
|
353
|
|
|
|
360
|
|
|
|
341
| | |
|
(7
|
)
| |
(2
|
)
| |
|
12
|
| |
4
| |
Total revenue
| | | | | |
1,209
| | | |
1,200
| | | |
1,161
| | | |
9
| | |
1
| | | |
48
| | |
4
| |
Adjusted noninterest expense* | | | | |
|
798
|
|
|
|
801
|
|
|
|
789
| | |
|
(3
|
)
| |
—
| | |
|
9
|
| |
1
| |
Adjusted pre-provision profit* | | | | | |
411
| | | |
399
| | | |
372
| | | |
12
| | |
3
| | | |
39
| | |
10
| |
Provision for credit losses
| | | | |
|
76
|
|
|
|
77
|
|
|
|
77
| | |
|
(1
|
)
| |
(1
|
)
| |
|
(1
|
)
| |
(1
|
)
|
Adjusted pretax income* | | | | | |
335
| | | |
322
| | | |
295
| | | |
13
| | |
4
| | | |
40
| | |
14
| |
Adjusted income tax expense* |
|
|
|
|
|
115
|
|
|
|
107
|
|
|
|
93
| | |
|
8
|
| |
7
| | |
|
22
|
| |
24
| |
Adjusted net income* | | | | |
$
|
220
| | |
$
|
215
| | |
$
|
202
| | |
$
|
5
| | |
2
| | |
$
|
18
| | |
9
| |
Preferred dividend
|
|
|
|
|
|
7
|
|
|
|
—
|
|
|
|
—
| | |
|
7
|
| |
NM
| | |
|
7
|
| |
NM
| |
Adjusted net income available to common shareholders*
| | | | | |
213
| | | |
215
| | | |
202
| | | |
(2
|
)
| |
(1
|
)
| | |
11
| | |
5
| |
Adjusted diluted earnings per share*
|
|
|
|
|
$
|
0.40
|
|
|
$
|
0.40
|
|
|
$
|
0.36
| | |
$
|
—
|
|
|
—
|
%
| |
$
|
0.04
|
| |
11
|
%
|
Adjusted diluted earnings per share*
|
|
|
|
|
$
|
0.40
|
|
|
$
|
0.40
|
|
|
$
|
0.36
| | |
$
|
—
|
| |
—
|
%
| |
$
|
0.04
|
| |
11
|
%
|
Pre-provision profit of $411 million increased $12 million from Adjusted
second quarter 2015* levels, reflecting a $9 million increase in total
revenue and relatively flat noninterest expense. Third quarter 2015 net
income of $220 million increased $5 million from Adjusted second quarter
2015* levels, largely reflecting strength in total revenue growth,
continued expense discipline and an increase in the effective tax rate.
Pre-provision profit increased $39 million from Adjusted third quarter
2014 levels*, driven by a $48 million increase in total revenue,
partially offset by noninterest expense growth. Compared to Adjusted
third quarter 2014 results*, net income increased $18 million, or 9%,
reflecting a $48 million increase in total revenue, partially offset by
a $9 million increase in noninterest expense and an increase in the
effective tax rate. Adjusted diluted earnings per share was up 11% given
net income growth and a 5% reduction in share count.
|
|
|
|
| | |
| | |
| | |
|
| |
Net interest income | | | | | | | | | | | | | | | 3Q15 change from |
($s in millions) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | | 2Q15 |
|
|
| 3Q14 |
| | | | | | | | | | | | | | |
| $ |
|
|
|
| % |
| | | |
| $ |
|
|
|
| % |
|
Interest income: | | | | | | | | | | | | | | | |
| |
| | | | | |
| |
| |
Interest and fees on loans and leases and loans held for sale
| | | | |
$
|
818
| | |
$
|
796
| | |
$
|
756
| | | |
$
|
22
| | | | |
3
|
%
| | | |
$
|
62
| | | | |
8
|
%
|
Investment securities
| | | | | |
154
| | | |
155
| | | |
155
| | | | |
(1
|
)
| | | |
(1
|
)
| | | | |
(1
|
)
| | | |
(1
|
)
|
Interest-bearing deposits in banks
|
|
|
|
|
|
2
|
|
|
|
1
|
|
|
|
2
| | | |
|
1
|
| | | |
100
| | | | |
|
—
|
| | | |
—
| |
Total interest income
|
|
|
|
|
$
|
974
|
|
|
$
|
952
|
|
|
$
|
913
| | | |
$
|
22
|
| | | |
2
|
%
| | | |
$
|
61
|
| | | |
7
|
%
|
Interest expense: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits
| | | | |
$
|
65
| | |
$
|
60
| | |
$
|
41
| | | |
$
|
5
| | | | |
8
|
%
| | | |
$
|
24
| | | | |
59
|
%
|
Federal funds purchased and securities sold under agreements to
repurchase
| | | | | |
4
| | | |
2
| | | |
9
| | | | |
2
| | | | |
100
| | | | | |
(5
|
)
| | | |
(56
|
)
|
Other short-term borrowed funds
| | | | | |
17
| | | |
19
| | | |
21
| | | | |
(2
|
)
| | | |
(11
|
)
| | | | |
(4
|
)
| | | |
(19
|
)
|
Long-term borrowed funds
|
|
|
|
|
|
32
|
|
|
|
31
|
|
|
|
22
| | | |
|
1
|
| | | |
3
| | | | |
|
10
|
| | | |
45
| |
Total interest expense
|
|
|
|
|
$
|
118
|
|
|
$
|
112
|
|
|
$
|
93
| | | |
$
|
6
|
| | | |
5
|
%
| | | |
$
|
25
|
| | | |
27
|
%
|
Net interest income
|
|
|
|
|
$
|
856
|
|
|
$
|
840
|
|
|
$
|
820
| | | |
$
|
16
|
| | | |
2
|
%
| | | |
$
|
36
|
| | | |
4
|
%
|
Net interest margin
|
|
|
|
|
|
2.76
|
%
| |
|
2.72
|
%
| |
|
2.77
|
%
| | |
|
4
|
| |
bps
| | | | | |
|
(1
|
)
| |
bps
| | |
Net interest income of $856 million in third quarter 2015 increased $16
million from second quarter 2015 reflecting a $1.2 billion increase in
average loans and leases, one additional day in the quarter, and
improving investment portfolio and retail and commercial loan yields,
partially offset by modestly higher deposit funding costs. Net interest
margin improved four basis points to 2.76% in third quarter 2015, from
2.72% in second quarter 2015. The increase in the linked quarter margin
was driven by modest balance sheet deleveraging and improving retail and
commercial loan yields, partially offset by an increase in deposit costs.
Compared to third quarter 2014, net interest income increased $36
million largely as the benefit of average earning asset growth,
improving investment portfolio yields, improving retail loan yields and
a reduction in pay-fixed swap costs was partially offset by an increase
in deposit costs, continued pressure from the persistent low-rate
environment on loan yields, and higher borrowing costs related to the
issuance of subordinated debt and senior notes. Net interest margin
remained relatively stable with third quarter 2014 given the factors
mentioned above, as well as the impact of modest balance sheet
deleveraging.
|
|
|
|
| |
|
| |
|
| |
|
|
| |
Noninterest Income | | | | | | | | | | | | | | | 3Q15 change from |
($s in millions) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | | 2Q15 |
|
|
| 3Q14 |
| | | | | | | | | | | | | | |
| $ |
|
| % | | | |
| $ |
|
| % |
Service charges and fees
| | | | |
$
|
145
| | |
$
|
139
| | |
$
|
144
| | | |
$
|
6
| |
|
4
|
%
| | | |
$
|
1
| |
|
1
|
%
|
Card fees
| | | | | |
60
| | | |
60
| | | |
58
| | | | |
—
| | |
—
| | | | | |
2
| | |
3
| |
Trust and investment services fees
| | | | | |
41
| | | |
41
| | | |
39
| | | | |
—
| | |
—
| | | | | |
2
| | |
5
| |
Mortgage banking fees
| | | | | |
18
| | | |
30
| | | |
21
| | | | |
(12
|
)
| |
(40
|
)
| | | | |
(3
|
)
| |
(14
|
)
|
Capital markets fees
| | | | | |
21
| | | |
30
| | | |
22
| | | | |
(9
|
)
| |
(30
|
)
| | | | |
(1
|
)
| |
(5
|
)
|
Foreign exchange and trade finance fees
| | | | | |
22
| | | |
22
| | | |
26
| | | | |
—
| | |
—
| | | | | |
(4
|
)
| |
(15
|
)
|
Securities gains, net
| | | | | |
2
| | | |
9
| | | |
2
| | | | |
(7
|
)
| |
(78
|
)
| | | | |
—
| | |
—
| |
Other income1 |
|
|
|
|
|
44
|
|
|
|
29
|
|
|
|
29
| | | |
|
15
|
| |
52
| | | | |
|
15
|
| |
52
| |
Noninterest income
|
|
|
|
|
$
|
353
|
|
|
$
|
360
|
|
|
$
|
341
| | | |
$
|
(7
|
)
| |
(2
|
) %
| | | |
$
|
12
|
| |
4
|
%
|
1 Other income includes bank owned life insurance and
other income.
|
Noninterest income of $353 million in the third quarter 2015 decreased
$7 million from second quarter 2015, as a $15 million increase in other
income due to $8 million in branch real estate gains, as well as
improved service charges and fees, were partially offset by lower
mortgage banking fees and capital markets fees, and a $7 million
reduction in securities gains. Service charges and fees increased $6
million, reflecting seasonality and overall industry trends. Mortgage
banking fees decreased $12 million, the result of an $8 million
reduction in mortgage servicing rights valuation, as a second quarter
2015 write-up reversed to a modest impairment, and lower origination
volumes and gain on sale spreads.
Compared to third quarter 2014, noninterest income increased $12 million
driven by higher other income, trust and investment services fees, card
fees and service charges and fees, which were partially offset by lower
foreign exchange, trade finance fees, mortgage banking fees, and capital
markets fees. Service charges and fees were relatively stable, and card
fees and trust and investment services fees increased $4 million.
Mortgage banking fees decreased $3 million as a $7 million decrease in
mortgage servicing rights valuation more than offset improved gain on
sale spreads.
|
|
|
|
| |
|
| |
|
| |
|
| |
Noninterest expense | | | | | | | | | | | | | | 3Q15 change from |
($s in millions) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | 2Q15 |
|
| 3Q14 |
| | | | | | | | | | | | | |
| $ |
|
| % | | |
| $ |
|
| % |
Salaries and employee benefits
| | | | |
$
|
404
| | |
$
|
411
| | |
$
|
409
| | |
$
|
(7
|
)
|
|
(2
|
) %
| | |
$
|
(5
|
)
|
|
(1
|
) %
|
Outside services
| | | | | |
89
| | | |
99
| | | |
106
| | | |
(10
|
)
| |
(10
|
)
| | | |
(17
|
)
| |
(16
|
)
|
Occupancy
| | | | | |
75
| | | |
90
| | | |
77
| | | |
(15
|
)
| |
(17
|
)
| | | |
(2
|
)
| |
(3
|
)
|
Equipment expense
| | | | | |
62
| | | |
65
| | | |
58
| | | |
(3
|
)
| |
(5
|
)
| | | |
4
| | |
7
| |
Amortization of software
| | | | | |
35
| | | |
37
| | | |
38
| | | |
(2
|
)
| |
(5
|
)
| | | |
(3
|
)
| |
(8
|
)
|
Other operating expense
|
|
|
|
|
|
133
|
|
|
|
139
|
|
|
|
122
| | |
|
(6
|
)
| |
(4
|
)
| | |
|
11
|
| |
9
| |
Total noninterest expense
| | | | |
$
|
798
| | |
$
|
841
| | |
$
|
810
| | |
$
|
(43
|
)
| |
(5
|
) %
| | |
$
|
(12
|
)
| |
(1
|
) %
|
Restructuring charges and special items
|
|
|
|
|
|
—
|
|
|
|
40
|
|
|
|
21
|
|
|
|
(40
|
)
| |
(100
|
) %
| | |
|
(21
|
)
| |
(100
|
) %
|
Total noninterest expense, excluding restructuring charges and
special items*
|
|
|
|
|
$
|
798
|
|
|
$
|
801
|
|
|
$
|
789
|
|
|
$
|
(3
|
)
| |
—
|
%
| | |
$
|
9
|
| |
1
|
%
|
Noninterest expense of $798 million in third quarter 2015 decreased $43
million from second quarter 2015, largely due to a $40 million decrease
in restructuring charges and special items. Excluding these charges,
noninterest expense declined slightly from second quarter 2015 Adjusted*
levels, as lower equipment and other expense were largely offset by an
increase in outside services. Our efficiency initiatives continue to
help fund investments in the businesses to drive future revenue growth.
Compared with third quarter 2014, noninterest expense decreased $12
million, as a $21 million decrease in restructuring charges and special
items was partially offset by higher advertising, insurance and outside
services costs. Compared with Adjusted third quarter 2014 results,
noninterest expense increased $9 million, largely driven by increases in
other expense and equipment expense, partially offset by lower salaries
and employee benefits expense.
The effective tax rate increased to 34.1% in third quarter 2015 compared
with 32.7% in second quarter 2015, largely reflecting the benefit of a
true up of certain tax items during the second quarter. This increase
impacted net income by approximately $5 million. The tax rate increased
approximately 330 basis points from 30.8% in third quarter 2014.
|
|
|
|
| | |
| | |
| | |
|
| |
| |
| |
Consumer Banking Segment | | | | | | | | | | | | | | | 3Q15 change from |
($s in millions) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | | 2Q15 |
|
|
| 3Q14 |
| | | | | | | | | | | | | | |
| $ |
|
|
|
| % |
| | | |
| $ |
|
|
|
| % |
|
Net interest income
| | | | |
$
|
556
| | |
$
|
544
| | |
$
|
532
| | | |
$
|
12
| |
| | |
2
|
%
| | | |
$
|
24
| |
| | |
5
|
%
|
Noninterest income
|
|
|
|
|
|
235
|
|
|
|
230
|
|
|
|
226
| | | |
|
5
|
| | | |
2
| | | | |
|
9
|
| | | |
4
| |
Total revenue
| | | | | |
791
| | | |
774
| | | |
758
| | | | |
17
| | | | |
2
| | | | | |
33
| | | | |
4
| |
Noninterest expense
|
|
|
|
|
|
623
|
|
|
|
613
|
|
|
|
609
| | | |
|
10
|
| | | |
2
| | | | |
|
14
|
| | | |
2
| |
Pre-provision profit
| | | | | |
168
| | | |
161
| | | |
149
| | | | |
7
| | | | |
4
| | | | | |
19
| | | | |
13
| |
Provision for credit losses
|
|
|
|
|
|
64
|
|
|
|
60
|
|
|
|
66
| | | |
|
4
|
| | | |
7
| | | | |
|
(2
|
)
| | | |
(3
|
)
|
Income before income tax expense
| | | | | |
104
| | | |
101
| | | |
83
| | | | |
3
| | | | |
3
| | | | | |
21
| | | | |
25
| |
Income tax expense
|
|
|
|
|
|
36
|
|
|
|
35
|
|
|
|
29
| | | |
|
1
|
| | | |
3
| | | | |
|
7
|
| | | |
24
| |
Net income
|
|
|
|
|
$
|
68
|
|
|
$
|
66
|
|
|
$
|
54
| | | |
$
|
2
|
| | | |
3
|
%
| | | |
$
|
14
|
| | | |
26
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Average balances
|
|
|
|
|
|
|
|
|
|
|
| | | |
| | | | | | | |
| | | | |
Total loans and leases (1) | | | | |
$
|
51,886
| | |
$
|
51,024
| | |
$
|
47,848
| | | |
$
|
862
| | | | |
2
|
%
| | | |
$
|
4,038
| | | | |
8
|
%
|
Total deposits
|
|
|
|
|
|
70,527
|
|
|
|
69,963
|
|
|
|
65,609
| | | |
|
564
|
| | | |
1
|
%
| | | |
|
4,918
|
| | | |
7
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Key metrics
|
|
|
|
|
|
|
|
|
|
|
| | | |
| | | | | | | |
| | | | |
ROTCE (2)* | | | | | |
5.7
|
%
| | |
5.7
|
%
| | |
4.6
|
%
| | | |
1
| | |
bps
| | | | | | |
110
| | |
bps
| | |
Efficiency ratio* | | | | | |
79
|
%
| | |
79
|
%
| | |
80
|
%
| | | |
(53
|
)
| |
bps
| | | | | | |
(170
|
)
| |
bps
| | |
Loan-to-deposit ratio (period-end)(1) |
|
|
|
|
|
74.4
|
%
|
|
|
73.2
|
%
|
|
|
74.0
|
%
| | |
|
115
|
| |
bps
| | | | | |
|
37
|
| |
bps
| | |
1 Includes held for sale.
|
2 Operating segments are allocated capital on a
risk-adjusted basis considering economic and regulatory capital
requirements. We approximate that regulatory capital is equivalent
to a sustainable target level of common equity Tier 1 and then
allocate that approximation to the segments based on economic
capital.
|
Consumer Banking net income of $68 million in third quarter 2015
increased $2 million, or 3%, compared to second quarter 2015, as revenue
growth was partially offset by expense growth tied to investment
initiatives and increased provision expense. Net interest income
increased $12 million, or 2%, from second quarter 2015, driven by 2%
loan growth, with particular strength in student, mortgage, and auto
loans, as well as an additional day in the quarter, partially offset by
higher deposit costs. Noninterest income increased $5 million, or 2%,
from second quarter 2015, and included $8 million in branch real estate
gains. Results also reflected growth in service charges and other fees,
and trust and investment services fees, partially offset by a $12
million decline in mortgage banking fees, which included an $8 million
decrease in mortgage servicing rights valuation as a second quarter
write-up reversed to a modest impairment. Noninterest expense of $623
million increased $10 million from second quarter 2015, largely
reflecting growth in outside services, salaries and employee benefits
expense and higher regulatory costs, partially offset by lower credit
collection costs and equipment expense. Provision for credit losses of
$64 million increased $4 million, or 7%, from second quarter 2015.
Compared with third quarter 2014, net income increased $14 million, as
an increase in total revenues of $33 million was somewhat offset by
increased noninterest expense. Net interest income increased $24 million
as solid loan growth, particularly in auto, student, and mortgage, was
partially offset by the effect of the relatively persistent low-rate
environment and higher deposit costs. Noninterest income grew $9 million
as branch real estate gains and increased trust and investment services
fees were partially offset by lower mortgage banking fees. Noninterest
expense increased $14 million, as higher advertising, regulatory costs,
salaries and employee benefits expense and our continued investment in
the business to drive further growth, was partially offset by lower
credit collection costs, insurance and payroll taxes, outside services
expense and our continued focus on improving efficiency. Provision for
credit losses of $64 million decreased $2 million, or 3%, from third
quarter 2014, largely reflecting continued improvement in credit quality
modestly offset by the impact of loan growth.
|
|
|
|
| | |
| | |
| | |
|
| |
| |
| |
Commercial Banking Segment | | | | | | | | | | | | | | | 3Q15 change from |
($s in millions) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | | 2Q15 |
|
|
| 3Q14 |
| | | | | | | | | | | | | | |
| $ |
|
|
|
| % | | | |
| $ |
|
|
|
| % |
Net interest income
| | | | |
$
|
299
| | |
$
|
286
| | |
$
|
270
| | | |
$
|
13
| |
| | |
5
|
%
| | | |
$
|
29
| |
| | |
11
|
%
|
Noninterest income
|
|
|
|
|
|
100
|
|
|
|
108
|
|
|
|
104
| | | |
|
(8
|
)
| | | |
(7
|
)
| | | |
|
(4
|
)
| | | |
(4
|
)
|
Total revenue
| | | | | |
399
| | | |
394
| | | |
374
| | | | |
5
| | | | |
1
| | | | | |
25
| | | | |
7
| |
Noninterest expense
|
|
|
|
|
|
175
|
|
|
|
181
|
|
|
|
162
| | | |
|
(6
|
)
| | | |
(3
|
)
| | | |
|
13
|
| | | |
8
| |
Pre-provision profit
| | | | | |
224
| | | |
213
| | | |
212
| | | | |
11
| | | | |
5
| | | | | |
12
| | | | |
6
| |
Provision for credit losses
|
|
|
|
|
|
3
|
|
|
|
7
|
|
|
|
—
| | | |
|
(4
|
)
| | | |
(57
|
)
| | | |
|
3
|
| | | |
—
| |
Income before income tax expense
| | | | | |
221
| | | |
206
| | | |
212
| | | | |
15
| | | | |
7
| | | | | |
9
| | | | |
4
| |
Income tax expense
|
|
|
|
|
|
76
|
|
|
|
71
|
|
|
|
73
| | | |
|
5
|
| | | |
7
| | | | |
|
3
|
| | | |
4
| |
Net income
|
|
|
|
|
$
|
145
|
|
|
$
|
135
|
|
|
$
|
139
| | | |
$
|
10
|
| | | |
7
|
%
| | | |
$
|
6
|
| | | |
4
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Average balances
|
|
|
|
|
|
|
|
|
|
|
| | | |
| | | | | | | |
| | | | |
Total loans and leases (1) | | | | |
$
|
41,993
| | |
$
|
41,467
| | |
$
|
37,787
| | | |
$
|
526
| | | | |
1
|
%
| | | |
$
|
4,206
| | | | |
11
|
%
|
Total deposits
|
|
|
|
|
|
24,604
|
|
|
|
22,717
|
|
|
|
20,985
| | | |
|
1,887
|
| | | |
8
|
%
| | | |
|
3,619
|
| | | |
17
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Key metrics
|
|
|
|
|
|
|
|
|
|
|
| | | |
| | | | | | | |
| | | | |
ROTCE (2)* | | | | | |
12.2
|
%
| | |
11.7
|
%
| | |
13.1
|
%
| | | |
55
| | |
bps
| | | | | | |
(86
|
)
| |
bps
| | |
Efficiency ratio* | | | | | |
44
|
%
| | |
46
|
%
| | |
43
|
%
| | | |
(232
|
)
| |
bps
| | | | | | |
40
| | |
bps
| | |
Loan-to-deposit ratio (period-end)(1) |
|
|
|
|
|
166.0
|
%
|
|
|
176.2
|
%
|
|
|
176.9
|
%
| | |
|
(1,014
|
)
| |
bps
| | | | | |
|
(1,086
|
)
| |
bps
| | |
1 Includes held for sale.
|
2 Operating segments are allocated capital on a
risk-adjusted basis considering economic and regulatory capital
requirements. We approximate that regulatory capital is equivalent
to a sustainable target level for common equity Tier 1 and then
allocate that approximation to the segments based on economic
capital.
|
Commercial Banking net income of $145 million in third quarter 2015
increased $10 million, or 7%, from second quarter 2015, reflecting an
increase in total revenue and a reduction in noninterest expense and
provision for credit losses. Net interest income of $299 million
increased $13 million, or 5%, from second quarter 2015, driven by an
average 1% loan and lease growth and 8% deposit growth. Average loans
and leases increased $526 million led by Commercial Real Estate,
Franchise Finance and Corporate Finance lines of business. Noninterest
income decreased $8 million, or 7%, from second quarter 2015, largely as
growth in service charges and other fees, interest rate products fees
and leasing income was offset by a decrease in capital markets fees from
strong second quarter 2015 levels. Noninterest expense decreased $6
million, or 3%, from second quarter 2015, largely reflecting lower
regulatory costs and equipment expense, partially offset by increased
outside services and insurance costs. Provision for credit losses of $3
million decreased $4 million, reflecting lower net charge-offs.
Compared to third quarter 2014, net income increased $6 million, or 4%,
as a $25 million increase in total revenue was partially offset by a $13
million increase in noninterest expense and a $3 million increase in
provision for credit losses. Net interest income increased $29 million,
or 11%, from third quarter 2014, reflecting the benefit of a $4.2
billion increase in average loans and leases, as well as deposit growth,
partially offset by yield compression. Loan growth was driven by
strength in Commercial Real Estate, Industry Verticals, Corporate
Finance, Franchise Finance, and Mid Corporate. Noninterest income
decreased $4 million, or 4%, from third quarter 2014, as growth in
service charges and other fees, card fees, and interest rate products
was more than offset by a reduction in foreign exchange and trade
finance fees, capital market fees and leasing income. Noninterest
expense increased $13 million, or 8%, from third quarter 2014 reflecting
a reduction in regulatory costs which was more than offset by higher
insurance costs, salaries and employee benefits tied to growth
initiatives and higher outside services. Provision for credit losses
increased $3 million from third quarter 2014, reflecting higher
net-charge-offs.
|
|
|
|
| |
|
| |
|
| |
|
|
| |
Other(1) | | | | | | | | | | | | | | | 3Q15 change from |
($s in millions) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | | 2Q15 |
|
| 3Q14 |
| | | | | | | | | | | | | | |
| $ |
|
| % | | |
| $ |
|
| % |
Net interest income
| | | | |
$
|
1
| | |
$
|
10
| | | |
$
|
18
| | | | |
$
|
(9
|
)
|
|
(90
|
) %
| | |
$
|
(17
|
)
|
|
(94
|
) %
|
Noninterest income
|
|
|
|
|
|
18
|
|
|
|
22
|
|
|
|
|
11
|
| | | |
|
(4
|
)
| |
(18
|
)
| | |
|
7
|
| |
64
| |
Total revenue
| | | | | |
19
| | | |
32
| | | | |
29
| | | | | |
(13
|
)
| |
(41
|
)
| | | |
(10
|
)
| |
(34
|
)
|
Noninterest expense
|
|
|
|
|
|
—
|
|
|
|
47
|
|
|
|
|
39
|
| | | |
|
(47
|
)
| |
(100
|
)
| | |
|
(39
|
)
| |
(100
|
)
|
Pre-provision profit (loss)
| | | | | |
19
| | | |
(15
|
)
| | | |
(10
|
)
| | | | |
34
| | |
227
| | | | |
29
| | |
290
| |
Provision for credit losses
|
|
|
|
|
|
9
|
|
|
|
10
|
|
|
|
|
11
|
| | | |
|
(1
|
)
| |
(10
|
)
| | |
|
(2
|
)
| |
(18
|
)
|
Income (loss) before income tax expense (benefit)
| | | | | |
10
| | | |
(25
|
)
| | | |
(21
|
)
| | | | |
35
| | |
140
| | | | |
31
| | |
148
| |
Income tax expense (benefit)
|
|
|
|
|
|
3
|
|
|
|
(14
|
)
|
|
|
|
(17
|
)
| | | |
|
17
|
| |
121
| | | |
|
20
|
| |
118
| |
Net income (loss)
|
|
|
|
|
$
|
7
|
|
|
$
|
(11
|
)
|
|
|
$
|
(4
|
)
| | | |
$
|
18
|
| |
164
|
%
| | |
$
|
11
|
| |
275
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Average balances
|
|
|
|
|
|
|
|
|
|
|
| | | |
| | | | |
| | |
Total loans and leases (2) | | | | |
$
|
3,367
| | |
$
|
3,569
| | | |
$
|
4,218
| | | | |
$
|
(202
|
)
| |
(6
|
) %
| | |
$
|
(851
|
)
| |
(20
|
) %
|
Total deposits
|
|
|
|
|
|
5,859
|
|
|
|
5,853
|
|
|
|
|
5,082
|
| | | |
|
6
|
| |
—
|
%
| | |
|
777
|
| |
15
|
%
|
1 Includes the financial impact of non-core,
liquidating loan portfolios and other non-core assets, our
treasury activities, wholesale funding activities, securities
portfolio, community development assets and other unallocated
assets, liabilities, capital, revenues, provision for credit
losses and expenses not attributed to our Consumer Banking or
Commercial Banking segments.
|
2 Includes held for sale.
|
Other recorded net income of $7 million in third quarter 2015, compared
with a net loss of $11 million in second quarter 2015, as a reduction in
total revenue was more than offset by a $40 million decrease in
restructuring charges and special items. Net interest income of $1
million decreased $9 million from the prior quarter driven by lower
non-core loan balances. Noninterest income of $18 million decreased $4
million from second quarter 2015, reflecting lower securities gains.
Noninterest expense decreased $47 million, driven by lower restructuring
charges and special items. Provision for credit losses of $9 million in
third quarter decreased $1 million from the prior quarter and
represented a $1 million reserve build versus a $1 million release in
the prior quarter.
Compared with the third quarter of 2014, net income increased $11
million, as a reduction in total revenue was more than offset by lower
expenses and the benefit of a $21 million decrease in restructuring
charges and special items. Net interest income decreased $17 million,
driven by an increase in wholesale funding costs, and lower non-core
loans, partially offset by a reduction in swap costs. Noninterest income
increased $7 million, reflecting the effect of an accounting change
related to the low‐income housing investment portfolio, offset in income
tax expense. Noninterest expense decreased $39 million, driven by lower
restructuring charges and special items and lower incentives. Provision
for credit losses declined $2 million from the third quarter 2014, which
benefited from an $11 million reserve release. Provision expense also
reflected a $12 million decrease in non-core charge-offs relative to
third quarter 2014.
|
|
|
|
| | |
| | |
| | |
|
| |
| |
| |
Consolidated balance sheet review(1) | | | | 3Q15 change from |
($s in millions) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | | 2Q15 |
|
|
| 3Q14 |
| | | | | | | | | | | | | | |
| $ |
|
|
|
| % | | | |
| $ |
|
|
|
| % |
Total assets
| | | | |
$
|
135,447
| | |
$
|
137,251
| | |
$
|
131,341
| | | |
$
|
(1,804
|
)
|
| | |
(1
|
) %
| | | |
$
|
4,106
| |
| | |
3
|
%
|
Loans and leases and loans held for sale
| | | | | |
97,851
| | | |
97,235
| | | |
90,957
| | | | |
616
| | | | |
1
| | | | | |
6,894
| | | | |
8
| |
Deposits
| | | | | |
101,866
| | | |
100,615
| | | |
93,463
| | | | |
1,251
| | | | |
1
| | | | | |
8,403
| | | | |
9
| |
Average interest-earning assets (quarterly)
| | | | | |
123,017
| | | |
123,205
| | | |
117,196
| | | | |
(188
|
)
| | | |
—
| | | | | |
5,821
| | | | |
5
| |
Stockholders' equity
| | | | | |
19,600
| | | |
19,586
| | | |
19,383
| | | | |
14
| | | | |
—
| | | | | |
217
| | | | |
1
| |
Stockholders' common equity
| | | | | |
19,353
| | | |
19,339
| | | |
19,383
| | | | |
14
| | | | |
—
| | | | | |
(30
|
)
| | | |
—
| |
Tangible common equity*
| | | | |
$
|
12,939
| | |
$
|
12,909
| | |
$
|
12,900
| | | |
$
|
30
| | | | |
—
|
%
| | | |
$
|
39
| | | | |
—
|
%
|
Loan-to-deposit ratio (period-end)(2) | | | | | |
96.1
|
%
| | |
96.6
|
%
| | |
97.3
|
%
| | | |
(58
|
)
| |
bps
| | | | | | |
(126
|
)
| |
bps
| | |
Common equity tier 1 capital ratio(3) | | | | | |
11.8
| | | |
11.8
| | | |
12.9
| | | | | | | | | | | | | | | | |
Total capital ratio(3) |
|
|
|
|
|
15.4
|
%
|
|
|
15.3
|
%
|
|
|
16.1
|
%
| | |
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Represents period-end unless otherwise noted.
|
2 Includes loans held for sale.
|
3 Current reporting period regulatory capital ratios
are preliminary. Periods prior to 1Q15 reported on a Basel I
basis. Basel III ratios assume that certain definitions impacting
qualifying Basel III capital will phase in through 2018. Ratios
also reflect the required US Standardized methodology for
calculating RWAs, effective January 1, 2015.
|
Total assets of $135.4 billion decreased $1.8 billion, or 1%, from June
30, 2015 as retail and commercial loan growth was largely offset by a
$1.8 billion decrease in investment portfolio assets, largely cash and
interest-bearing deposit positions, reflecting more efficient balance
sheet management. Total assets increased $4.1 billion, or 3%, from
September 30, 2014 reflecting a $6.7 billion, or 7%, increase in loans
and leases, partially offset by a $1.7 billion decrease in short-term
investment portfolio assets, largely cash and interest-bearing deposit
positions.
Average interest-earning assets of $123.0 billion in third quarter 2015,
decreased $188 million from the prior quarter, as strength in student,
mortgage, commercial real estate and auto loans was more than offset by
a decrease in short-term investments and reductions in home equity
outstandings. Total Commercial loan and lease growth of $478 million was
driven by strength in Commercial Real Estate, Franchise Finance and
Corporate Finance businesses. Retail loan growth of $707 million was
driven by higher student, mortgage, and auto loans, which were partially
offset by lower home equity balances and a reduction in the non-core
portfolio. Average interest-earning assets increased $5.8 billion, or
5%, from third quarter 2014 reflecting a $4.0 billion increase in
commercial loans and leases and $3.2 billion increase in retail loans,
despite a $726 million decrease in the non-core loan portfolio.
Deposits of $101.9 billion increased $1.3 billion, or 1%, from June 30,
2015 reflecting growth in checking with interest and demand deposits.
Compared with September 30, 2014, deposits increased $8.4 billion, or
9%, reflecting growth across every category and with particular strength
in consumer deposits. The loan-to-deposit ratio of 96.1% as of September
30, 2015 compared with 96.6% as of June 30, 2015 and 97.3% as of
September 30, 2014.
|
|
|
|
| |
|
| |
|
| |
|
|
| |
Interest-earning assets | | | | 3Q15 change from |
($s in millions) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | | 2Q15 |
|
| 3Q14 |
Period-end interest-earning assets | | | | | | | | | | | | | | |
| $ |
|
| % | | |
| $ |
|
| % |
Investments and interest-bearing deposits
| | | | |
$
|
25,406
| | |
$
|
27,227
| | |
$
|
27,073
| | | |
$
|
(1,821
|
)
|
|
(7
|
) %
| | |
$
|
(1,667
|
)
|
|
(6
|
) %
|
Loans and leases
| | | | | | | | | | | | | | | | | | | | | | |
Commercial loans and leases
| | | | | |
45,269
| | | |
45,068
| | | |
41,470
| | | | |
201
| | |
—
| | | | |
3,799
| | |
9
| |
Retail loans
| | | | | |
52,162
| | | |
51,470
| | | |
49,279
| | | | |
692
| | |
1
| | | | |
2,883
| | |
6
| |
Total loans and leases
| | | | | |
97,431
| | | |
96,538
| | | |
90,749
| | | | |
893
| | |
1
| | | | |
6,682
| | |
7
| |
Loans held for sale
| | | | | |
369
| | | |
397
| | | |
205
| | | | |
(28
|
)
| |
(7
|
)
| | | |
164
| | |
80
| |
Other loans held for sale
| | | | | |
51
| | | |
300
| | | |
3
| | | | |
(249
|
)
| |
(83
|
)
| | | |
48
| | |
1,600
| |
Total loans and leases and loans held for sale
|
|
|
|
|
|
97,851
|
|
|
|
97,235
|
|
|
|
90,957
| | | |
|
616
|
| |
1
| | | |
|
6,894
|
| |
8
| |
Total period-end interest-earning assets
|
|
|
|
|
$
|
123,257
|
|
|
$
|
124,462
|
|
|
$
|
118,030
| | | |
$
|
(1,205
|
)
| |
(1
|
) %
| | |
$
|
5,227
|
| |
4
|
%
|
Average interest-earning assets | | | | | | | | | | | | | | | | | | | | | | |
Investments and interest-bearing deposits
| | | | |
$
|
25,771
| | |
$
|
27,145
| | |
$
|
27,343
| | | |
$
|
(1,374
|
)
| |
(5
|
)
| | |
$
|
(1,572
|
)
| |
(6
|
)
|
Loans and leases
| | | | | | | | | | | | | | | | | | | | | | |
Commercial loans and leases
| | | | | |
45,174
| | | |
44,696
| | | |
41,191
| | | | |
478
| | |
1
| | | | |
3,983
| | |
10
| |
Retail loans
| | | | | |
51,617
| | | |
50,910
| | | |
48,459
| | | | |
707
| | |
1
| | | | |
3,158
| | |
7
| |
Total loans and leases
| | | | | |
96,791
| | | |
95,606
| | | |
89,650
| | | | |
1,185
| | |
1
| | | | |
7,141
| | |
8
| |
Loans held for sale
| | | | | |
327
| | | |
308
| | | |
176
| | | | |
19
| | |
6
| | | | |
151
| | |
86
| |
Other loans held for sale
| | | | | |
128
| | | |
146
| | | |
27
| | | | |
(18
|
)
| |
(12
|
)
| | | |
101
| | |
374
| |
Total loans and leases and loans held for sale
|
|
|
|
|
|
97,246
|
|
|
|
96,060
|
|
|
|
89,853
| | | |
|
1,186
|
| |
1
| | | |
|
7,393
|
| |
8
| |
Total average interest-earning assets
|
|
|
|
|
$
|
123,017
|
|
|
$
|
123,205
|
|
|
$
|
117,196
| | | |
$
|
(188
|
)
| |
—
|
%
| | |
$
|
5,821
|
| |
5
|
%
|
Investments and interest-bearing deposits of $25.4 billion as of
September 30, 2015 decreased $1.8 billion from June 30, 2015, largely
reflecting a continued reduction in short-term investments, mainly cash.
Compared with September 30, 2014, investments and interest-bearing
deposits decreased $1.7 billion, or 6%. As of September 30, 2015, the
average effective duration of the securities portfolio was 3.3 years,
compared with 3.7 years at June 30, 2015, and 4.0 years at September 30,
2014. The decrease in the third quarter reflects the impact of a
decrease in long-term rates, as well as modest repositioning of the
investment portfolio.
Period-end loans and leases of $97.4 billion at September 30, 2015
increased $893 million from $96.5 billion at June 30, 2015, and
increased $6.7 billion from $90.7 billion at September 30, 2014. The
linked quarter increase was driven by a $692 million increase in retail
loans and a $201 million increase in commercial loans and leases. Retail
loan growth was driven by a $539 million increase in residential
mortgage loans, a $491 million increase in student loans and a $149
million increase in auto loans, partially offset by a $515 million
decrease in home equity outstandings, including continued runoff in the
non-core portfolio. Commercial loan and lease growth was driven by our
Commercial Real Estate, Franchise Finance, and Mid Corporate businesses.
During the quarter we purchased a net $96 million in auto loans, $131
million in student loans, and $63 million in mortgage loans, and sold
$100 million in commercial leases.
Compared with September 30, 2014, period-end loans and leases increased
$6.7 billion, reflecting a $3.8 billion increase in commercial loans and
leases and a $2.9 billion increase in retail loans. Commercial loan
growth was driven by growth in our Commercial Real Estate, Industry
Verticals, Franchise Finance, and Corporate Finance businesses. Retail
loan growth was driven by a $1.8 billion increase in auto loans, $1.8
billion increase in student loans, and $1.5 billion increase in
residential mortgage loans partially offset by a $2.0 billion decrease
in home equity outstandings, including continued runoff in the non-core
portfolio.
Average loans and leases of $96.8 billion increased $1.2 billion from
second quarter 2015, driven by higher student, residential mortgage,
commercial real estate, and auto balances. Results also reflect a $187
million decrease in the non-core loan portfolio. Compared with third
quarter 2014, average loans and leases increased $7.1 billion, driven by
growth in commercial and commercial real estate, and an increase in
auto, student and residential mortgage balances, partially offset by a
decrease in home equity outstandings and a $726 million reduction in the
non-core loan portfolio.
|
|
|
|
| |
|
| |
|
| |
|
|
| |
Deposits | | | | | | | | | | | | | | | 3Q15 change from |
($s in millions) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | | 2Q15 |
|
| 3Q14 |
Period-end deposits | | | | | | | | | | | | | | |
| $ |
|
| % | | |
| $ |
| % |
Demand deposits
| | | | |
$
|
27,373
| | |
$
|
26,678
| | |
$
|
25,877
| | | |
$
|
695
| |
|
3
|
%
| | |
$
|
1,496
|
|
6
|
%
|
Checking with interest
| | | | | |
18,350
| | | |
17,114
| | | |
15,449
| | | | |
1,236
| | |
7
| | | | |
2,901
| |
19
| |
Savings
| | | | | |
8,011
| | | |
8,080
| | | |
7,655
| | | | |
(69
|
)
| |
(1
|
)
| | | |
356
| |
5
| |
Money market accounts
| | | | | |
35,539
| | | |
35,735
| | | |
32,870
| | | | |
(196
|
)
| |
(1
|
)
| | | |
2,669
| |
8
| |
Term deposits
|
|
|
|
|
|
12,593
|
|
|
|
13,008
|
|
|
|
11,612
| | | |
|
(415
|
)
| |
(3
|
)
| | |
|
981
| |
8
| |
Total deposits
|
|
|
|
|
$
|
101,866
|
|
|
$
|
100,615
|
|
|
$
|
93,463
| | | |
$
|
1,251
|
| |
1
|
%
| | |
$
|
8,403
| |
9
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Average deposits |
|
|
|
|
|
|
|
|
|
|
| | | |
| | | | |
| | |
Total average deposits
|
|
|
|
|
$
|
100,990
|
|
|
$
|
98,533
|
|
|
$
|
91,676
| | | |
$
|
2,457
|
| |
2
|
%
| | |
$
|
9,314
| |
10
|
%
|
Third quarter 2015 average deposits of $101.0 billion increased $2.5
billion, or 2%, from second quarter 2015, and $9.3 billion, or 10%, from
third quarter 2014, reflecting growth in every category. Period-end
total deposits at September 30, 2015 of $101.9 billion increased $1.3
billion, or 1%, from June 30, 2015, with particular strength in checking
with interest and demand deposits. Compared with September 30, 2014,
period-end total deposits increased $8.4 billion, or 9%, driven by
growth in every category.
|
|
|
|
| |
|
| |
|
| |
|
|
| |
Borrowed funds | | | | | | | | | | | | | | | 3Q15 change from |
($s in millions) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | | 2Q15 |
|
| 3Q14 |
Period-end borrowed funds | | | | | | | | | | | | | | |
| $ |
|
| % | | |
| $ |
|
| % |
Federal funds purchased and securities sold under agreements to
repurchase
| | | | |
$
|
1,293
| | |
$
|
3,784
| | |
$
|
5,184
| | | |
$
|
(2,491
|
)
|
|
(66
|
) %
| | |
$
|
(3,891
|
)
|
|
(75
|
) %
|
Other short-term borrowed funds
| | | | | |
5,861
| | | |
6,762
| | | |
6,715
| | | | |
(901
|
)
| |
(13
|
)
| | | |
(854
|
)
| |
(13
|
)
|
Long-term borrowed funds
|
|
|
|
|
|
4,153
|
|
|
|
3,890
|
|
|
|
2,062
| | | |
|
263
|
| |
7
| | | |
|
2,091
|
| |
101
| |
Total borrowed funds
|
|
|
|
|
$
|
11,307
|
|
|
$
|
14,436
|
|
|
$
|
13,961
| | | |
$
|
(3,129
|
)
| |
(22
|
)
| | |
$
|
(2,654
|
)
| |
(19
|
)
|
| | | | | | | | | | | | | | | | | | | | | |
|
Average borrowed funds
|
|
|
|
|
$
|
12,001
|
|
|
$
|
14,772
|
|
|
$
|
14,996
| | | |
$
|
(2,771
|
)
| |
(19
|
) %
| | |
$
|
(2,995
|
)
| |
(20
|
) %
|
Total borrowed funds of $11.3 billion at September 30, 2015 decreased
$3.1 billion from June 30, 2015, largely due to strength in deposit
growth which led to a decrease in securities sold under agreement to
repurchase and excess cash at the Federal Reserve. Compared with
September 30, 2014, total borrowed funds decreased $2.7 billion given
strong deposit growth. Average borrowed funds of $12.0 billion decreased
$2.8 billion from second quarter 2015 as growth in deposits reduced our
reliance on short-term borrowings. Average borrowed funds decreased $3.0
billion from third quarter 2014 reflecting deposit growth and a
reduction in short-term borrowings and excess cash.
|
|
|
|
| | |
| | |
| | |
|
| |
Capital(1) | | | | | | | | | | | | | | | 3Q15 change from |
($s and shares in millions) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | | 2Q15 |
|
| 3Q14 |
Period-end capital | | | | | | | | | | | | | | |
| $ |
|
| % | | |
| $ |
|
| % |
Stockholders' equity
| | | | |
$
|
19,600
| | |
$
|
19,586
| | |
$
|
19,383
| | | |
$
|
14
| |
|
—
|
%
| | |
$
|
217
| |
|
1
|
%
|
Stockholders' common equity
| | | | |
$
|
19,353
| | |
$
|
19,339
| | |
$
|
19,383
| | | | |
14
| | |
—
| | | | |
(30
|
)
| |
—
| |
Tangible common equity*
| | | | |
$
|
12,939
| | |
$
|
12,909
| | |
$
|
12,900
| | | | |
30
| | |
—
| | | | |
39
| | |
—
| |
Tangible common equity per share*
| | | | |
$
|
24.52
| | |
$
|
24.03
| | |
$
|
23.04
| | | | |
0.49
| | |
2
| | | | |
1.48
| | |
6
| |
Common shares - at end of period
| | | | | |
527.6
| | | |
537.1
| | | |
560.0
| | | | |
(9.5
|
)
| |
(2
|
)
| | | |
(32.4
|
)
| |
(6
|
)
|
Common shares - average (diluted)
| | | | | |
533.4
| | | |
539.9
| | | |
560.2
| | | | |
(6.5
|
)
| |
(1
|
) %
| | | |
(26.8
|
)
| |
(5
|
) %
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Common equity tier 1 capital ratio(1)(2) | | | | | |
11.8
|
%
| | |
11.8
|
%
| | |
12.9
|
%
| | | | | | | | | | |
Total capital ratio(1)(2) | | | | | |
15.4
| | | |
15.3
| | | |
16.1
| | | | | | | | | | | |
Tier 1 leverage ratio(1)(2) |
|
|
|
|
|
10.4
|
%
|
|
|
10.4
|
%
|
|
|
10.9
|
%
| | |
|
|
| | |
|
|
|
1 Current reporting period regulatory capital ratios
are preliminary.
|
2 Periods prior to 1Q15 reported on a Basel I basis.
Basel III ratios assume that certain definitions impacting
qualifying Basel III capital will phase in through 2018. Ratios
also reflect the required US Standardized transitional methodology
for calculating RWAs, effective January 1, 2015.
|
At September 30, 2015, our Basel III Capital ratios on a transitional
basis remained well in excess of applicable regulatory requirements,
with a CET1 capital ratio of 11.8% and a total capital ratio of 15.4%.
Our capital ratios continue to reflect progress against our objective of
realigning our capital profile to be more consistent with that of peer
regional banks, while maintaining a strong capital base to support our
growth aspirations, strategy, and risk appetite. In August, we completed
the issuance of $250 million in subordinated debt due 2025, which funded
a 9.6 million common stock share repurchase, further reducing RBS’s
ownership interest to 20.9%.
|
|
|
|
| | |
| | |
| | |
|
| |
Credit quality review | | | | | | | | | | | | | | | 3Q15 change from |
($s in millions) |
|
|
|
| 3Q15 |
|
| 2Q15 |
|
| 3Q14 | | | | 2Q15 |
|
| 3Q14 |
| | | | | | | | | | | | | | |
| $ |
|
| % |
| | |
| $ |
|
| % |
|
Nonperforming loans and leases
| | | | |
$
|
1,034
| | |
$
|
1,050
| | |
$
|
1,079
| | | |
$
|
(16
|
)
|
|
(2
|
) %
| | |
$
|
(45
|
)
|
|
(4
|
) %
|
Accruing loans past due 90 days or more
| | | | | |
15
| | | |
8
| | | |
8
| | | | |
7
| | |
88
| | | | |
7
| | |
88
| |
Net charge-offs
| | | | | |
75
| | | |
78
| | | |
88
| | | | |
(3
|
)
| |
(4
|
)
| | | |
(13
|
)
| |
(15
|
)
|
Provision for credit losses
| | | | | |
76
| | | |
77
| | | |
77
| | | | |
(1
|
)
| |
(1
|
)
| | | |
(1
|
)
| |
(1
|
)
|
Allowance for loan and lease losses
| | | | |
$
|
1,201
| | |
$
|
1,201
| | |
$
|
1,201
| | | |
$
|
—
| | |
—
|
%
| | |
$
|
—
| | |
—
|
%
|
Total nonperforming loans and leases
as a % of total loans and leases
| | | | | |
1.06
|
%
| | |
1.09
|
%
|
| |
1.19
|
%
| | | |
(3
|
)
|
bps
| | | |
(13
|
)
|
bps
|
Net charge-offs as % of total loans and leases
| | | | | |
0.31
| | | |
0.33
| | | |
0.38
| | | | |
(2
|
)
|
bps
| | | |
(7
|
)
|
bps
|
Allowance for loan and lease losses as a % of nonperforming loans
and leases
|
|
|
|
|
|
116.1
|
%
|
|
|
114.4
|
%
|
|
|
111.3
|
%
| | |
|
175
|
|
bps
|
|
|
|
482
|
|
bps
|
Credit quality during the quarter remained strong, with relatively low
levels of charge-offs and a decline in nonperforming loans and leases.
Nonperforming loans and leases of $1.0 billion at September 30, 2015
decreased $16 million, or 2%, from June 30, 2015, reflecting a $21
million decrease in retail products as a reduction in secured consumer
real-estate loans was partially offset by a $5 million increase in
commercial loans. Nonperforming loans and leases to total loans and
leases of 1.06% at September 30, 2015 decreased three basis points from
1.09% at June 30, 2015, and decreased 13 basis points from 1.19% at
September 30, 2014. Nonperforming loans and leases decreased $45
million, or 4%, from third quarter 2014, largely driven by improvement
in commercial real estate and secured consumer real estate loans,
partially offset by increases in student and auto loans given expected
seasoning.
Nonperforming non-core loans totaled $162 million in third quarter 2015,
compared with $163 million in second quarter 2015, and $191 million in
third quarter 2014. Nonperforming non-core loans to total non-core loans
of 6.5% at September 30, 2015, compared with 6.1% at June 30, 2015, and
5.9% at September 30, 2014. This increase was due to a 6.8% reduction in
non-core balances during the quarter, which significantly outpaced the
reduction in nonperforming non-core loans. Troubled debt restructured
loans (“TDRs”) of $1.3 billion were stable compared to $1.3 billion at
June 30, 2015, and included $1.2 billion of retail loans and $153
million of commercial loans. Performing TDRs represented 68% of total
TDRs as of September 30, 2015, compared with 66% as of June 30, 2015,
and 67% as of September 30, 2014.
Net charge-offs of $75 million, or 31 basis points of total loans and
leases, decreased $3 million in third quarter 2015, from $78 million, or
33 basis points, in second quarter 2015. Retail product net charge-offs
of $70 million remained relatively stable with second quarter 2015
levels. Commercial net charge-offs were $5 million in third quarter
2015, compared with $7 million in second quarter 2015. Overall results
included non-core net charge-offs of $9 million in third quarter 2015,
compared with $12 million in second quarter 2015, and $21 million in
third quarter 2014. Annualized non-core net charge-offs to total average
non-core loans and leases was 1.36% in third quarter 2015, compared with
1.70% in second quarter 2015, and 2.52% in third quarter 2014. This
reduction in the non-core charge-off rate was driven by higher
recoveries in commercial and residential mortgage, and seasonal
improvement in student.
Provision for credit losses of $76 million in third quarter 2015
remained stable with second quarter 2015, as improvement in asset
quality was offset by a reserve build tied to loan growth. Third quarter
2015 provision for credit losses was also stable with third quarter
2014, as continued improvement in overall credit quality was offset by
the impact of loan growth. The total provision for credit losses
includes the provision for loan and lease losses as well as the
provision for unfunded commitments.
The allowance for loan and lease losses of $1.2 billion remained stable
compared to second quarter 2015 and third quarter 2014, largely
reflecting continued improvement in overall credit quality. Allowance
for loan and lease losses to total loans and leases was 1.23% as of
September 30, 2015, compared with 1.24% as of June 30, 2015, and 1.32%
as of September 30, 2014. Allowance for loan and lease losses to
non-performing loans and leases ratio was 116% as of September 30, 2015,
compared with 114% as of June 30, 2015, and 111% as of September 30,
2014.
Corresponding Financial Tables and Information
Investors are encouraged to review the foregoing summary and discussion
of Citizens' earnings and financial condition in conjunction with the
detailed financial tables and other information available on the
Investor Relations portion of the company’s website at www.citizensbank.com/about-us.
Conference Call
CFG management will host a live conference call today with details
as follows:
|
|
Time:
|
|
|
|
|
8:30 am ET
|
|
Dial-in:
| | | | |
Individuals may call in by dialing (800) 230-1059, conference ID
365456
|
|
Webcast/Presentation:
| | | | |
The live webcast will be available at http://investor.citizensbank.com,
under Events
|
|
Replay Information:
| | | | |
A replay of the conference call will be available beginning at
10:30 am ET on October 23 through November 23. Please dial (800)
475-6701 and enter access code 365456. The webcast replay will be
available at http://investor.citizensbank.com.
|
About Citizens Financial Group, Inc.
Citizens Financial Group, Inc. is one of the nation’s oldest and largest
financial institutions, with $135.4 billion in assets as of September
30, 2015. Headquartered in Providence, Rhode Island, Citizens offers a
broad range of retail and commercial banking products and services to
individuals, small businesses, middle-market companies, large
corporations and institutions. In Consumer Banking, Citizens helps its
retail customers “bank better” with mobile and online banking, a 24/7
customer contact center and the convenience of approximately 3,200 ATMs
and approximately 1,200 Citizens Bank branches in 11 states in the New
England, Mid-Atlantic and Midwest regions. Citizens also provides
mortgage lending, auto lending, student lending and commercial banking
services in select markets nationwide. In Commercial Banking, Citizens
offers corporate, institutional and not-for-profit clients a full range
of wholesale banking products and services including lending and
deposits, capital markets, treasury services, foreign exchange and
interest hedging, leasing and asset finance, specialty finance and trade
finance.
Citizens operates through its subsidiaries Citizens Bank,
N.A., and Citizens Bank of Pennsylvania. Additional information about
Citizens and its full line of products and services can be found at www.citizensbank.com.
Non-GAAP Financial Measures
This document contains non-GAAP financial measures. The table below
presents reconciliations of certain non-GAAP measures. These
reconciliations exclude restructuring charges and/or special items,
which are usually included, where applicable, in the financial results
presented in accordance with GAAP. Restructuring charges and special
items include expenses related to our efforts to improve processes and
enhance efficiencies, as well as rebranding, separation from RBS and
regulatory expenses.
The non-GAAP measures set forth below include “total revenue”,
“noninterest income”, “ noninterest expense”, “pre-provision profit”,
“income before income tax expense (benefit)”, “income tax expense
(benefit)”, “net income”, “net income available to common stockholders”,
“salaries and employee benefits”, “outside services”, “occupancy”,
“equipment expense”, “amortization of software”, “other operating
expense”, “net income per average common share”, “return of average
common equity” and “return on average total assets”. In addition, we
present computations for "tangible book value per common share", “return
on average tangible common equity”, “return on average total tangible
assets”, “efficiency ratio”, and “operating leverage” as part of our
non-GAAP measures. Additionally, "pro forma Basel III fully phased-in
common equity tier 1 capital" computations for periods prior to first
quarter 2015 are presented as part of our non-GAAP measures.
We believe these non-GAAP measures provide useful information to
investors because these are among the measures used by our management
team to evaluate our operating performance and make day-to-day operating
decisions. In addition, we believe restructuring charges and special
items in any period do not reflect the operational performance of the
business in that period and, accordingly, it is useful to consider these
line items with and without restructuring charges and special items. We
believe this presentation also increases comparability of
period-to-period results.
We also consider pro forma capital ratios defined by banking regulators
but not effective at each period end to be non-GAAP financial measures.
Since analysts and banking regulators may assess our capital adequacy
using these pro forma ratios, we believe they are useful to provide
investors the ability to assess our capital adequacy on the same basis.
Other companies may use similarly titled non-GAAP financial measures
that are calculated differently from the way we calculate such measures.
Accordingly, our non-GAAP financial measures may not be comparable to
similar measures used by other companies. We caution investors not to
place undue reliance on such non-GAAP measures, but instead to consider
them with the most directly comparable GAAP measure. Non-GAAP financial
measures have limitations as analytical tools, and should not be
considered in isolation, or as a substitute for our results as reported
under GAAP.
|
| |
| |
|
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS (Excluding
restructuring charges and special items) $s in millions,
except per share data |
| | | | | | | | | | | | | | | | | | | | | | |
|
| | | | QUARTERLY TRENDS | | | | FOR THE NINE MONTHS ENDED SEPTEMBER 30 |
| | | | 3Q15 | | | 2Q15 | | | 1Q15 | | | 4Q14 | | | 3Q14 | | | | | 2015 | | | | | 2014 | |
Noninterest income, excluding special items: | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest income (GAAP)
| |
A
| |
$
|
353
| | | |
$
|
360
| | | |
$
|
347
| | | |
$
|
339
| | | |
$
|
341
| | | | |
$
|
1,060
| | | |
$
|
1,339
| |
Less: Special items - Chicago gain
| | | |
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
| | | |
|
—
|
|
|
|
|
288
|
|
Noninterest income, excluding special items (non-GAAP) | |
B
| |
$
|
353
|
|
|
|
$
|
360
|
|
|
|
$
|
347
|
|
|
|
$
|
339
|
|
|
|
$
|
341
|
| | | |
$
|
1,060
|
|
|
|
$
|
1,051
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Total revenue, excluding special items: | | | | | | | | | | | | | | | | | | | | | | | |
Total revenue (GAAP)
| |
C
| |
$
|
1,209
| | | |
$
|
1,200
| | | |
$
|
1,183
| | | |
$
|
1,179
| | | |
$
|
1,161
| | | | |
$
|
3,592
| | | |
$
|
3,800
| |
Less: Special items - Chicago gain
| | | |
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
| | | |
|
—
|
|
|
|
|
288
|
|
Total revenue, excluding special items (non-GAAP) | |
D
| |
$
|
1,209
|
|
|
|
$
|
1,200
|
|
|
|
$
|
1,183
|
|
|
|
$
|
1,179
|
|
|
|
$
|
1,161
|
| | | |
$
|
3,592
|
|
|
|
$
|
3,512
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Noninterest expense, excluding restructuring charges and special
items: | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense (GAAP)
| |
E
| |
$
|
798
| | | |
$
|
841
| | | |
$
|
810
| | | |
$
|
824
| | | |
$
|
810
| | | | |
$
|
2,449
| | | |
$
|
2,568
| |
Less: Restructuring charges and special items
| |
MM
| |
|
—
|
|
|
|
|
40
|
|
|
|
|
10
|
|
|
|
|
33
|
|
|
|
|
21
|
| | | |
|
50
|
|
|
|
|
136
|
|
Noninterest expense, excluding restructuring charges and special
items (non-GAAP) | |
F
| |
$
|
798
|
|
|
|
$
|
801
|
|
|
|
$
|
800
|
|
|
|
$
|
791
|
|
|
|
$
|
789
|
| | | |
$
|
2,399
|
|
|
|
$
|
2,432
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Net income, excluding restructuring charges and special items: | | | | | | | | | | | | | | | | | | | | | | | |
Net income (GAAP)
| |
G
| |
$
|
220
| | | |
$
|
190
| | | |
$
|
209
| | | |
$
|
197
| | | |
$
|
189
| | | | |
$
|
619
| | | |
$
|
668
| |
Add: Restructuring charges and special items, net of income tax
expense (benefit)
| | | |
|
—
|
|
|
|
|
25
|
|
|
|
|
6
|
|
|
|
|
20
|
|
|
|
|
13
|
| | | |
|
31
|
|
|
|
|
(95
|
)
|
Net income, excluding restructuring charges and special items
(non-GAAP) | |
H
| |
$
|
220
|
|
|
|
$
|
215
|
|
|
|
$
|
215
|
|
|
|
$
|
217
|
|
|
|
$
|
202
|
| | | |
$
|
650
|
|
|
|
$
|
573
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Net income available to common stockholders (GAAP), excluding
restructuring charges and special items | | | | | | | | | | | | | | | | | | | | | | | |
Net income available to common stockholders (GAAP)
| |
I
| |
$
|
213
| | | |
$
|
190
| | | |
$
|
209
| | | |
$
|
197
| | | |
$
|
189
| | | | |
$
|
612
| | | |
$
|
668
| |
Add: Restructuring charges and special items, net of income tax
expense (benefit)
| | | |
|
—
|
|
|
|
|
25
|
|
|
|
|
6
|
|
|
|
|
20
|
|
|
|
|
13
|
| | | |
|
31
|
|
|
|
|
(95
|
)
|
Net income available to common stockholders, excluding
restructuring charges and special items (non-GAAP) | |
J
| |
$
|
213
|
|
|
|
$
|
215
|
|
|
|
$
|
215
|
|
|
|
$
|
217
|
|
|
|
$
|
202
|
| | | |
$
|
643
|
|
|
|
$
|
573
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Return on average common equity, excluding restructuring charges
and special items: | | | | | | | | | | | | | | | | | | | | | | | |
Average common equity (GAAP)
| |
K
| |
$
|
19,261
| | | |
$
|
19,391
| | | |
$
|
19,407
| | | |
$
|
19,209
| | | |
$
|
19,411
| | | | |
$
|
19,352
| | | |
$
|
19,463
| |
Return on average common equity, excluding restructuring charges
and special items (non-GAAP) | |
J/K
| | |
4.40
|
%
| | | |
4.45
|
%
| | | |
4.49
|
%
| | | |
4.48
|
%
| | | |
4.14
|
%
| | | | |
4.45
|
%
| | | |
3.94
|
%
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Return on average tangible common equity and return on average
tangible common equity, excluding restructuring charges and special
items: | | | | | | | | | | | | | | |
Average common equity (GAAP)
| |
L
| |
$
|
19,261
| | | |
$
|
19,391
| | | |
$
|
19,407
| | | |
$
|
19,209
| | | |
$
|
19,411
| | | | |
$
|
19,352
| | | |
$
|
19,463
| |
Less: Average goodwill (GAAP)
| | | | |
6,876
| | | | |
6,876
| | | | |
6,876
| | | | |
6,876
| | | | |
6,876
| | | | | |
6,876
| | | | |
6,876
| |
Less: Average other intangibles (GAAP)
| | | | |
4
| | | | |
5
| | | | |
5
| | | | |
6
| | | | |
6
| | | | | |
5
| | | | |
7
| |
Add: Average deferred tax liabilities related to goodwill (GAAP)
| | | |
|
453
|
|
|
|
|
437
|
|
|
|
|
422
|
|
|
|
|
403
|
|
|
|
|
384
|
| | | |
|
438
|
|
|
|
|
368
|
|
Average tangible common equity (non-GAAP) | |
M
| |
$
|
12,834
|
|
|
|
$
|
12,947
|
|
|
|
$
|
12,948
|
|
|
|
$
|
12,730
|
|
|
|
$
|
12,913
|
| | | |
$
|
12,909
|
|
|
|
$
|
12,948
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Return on average tangible common equity (non-GAAP)
| |
I/M
| | |
6.60
|
%
| | | |
5.90
|
%
| | | |
6.53
|
%
| | | |
6.12
|
%
| | | |
5.81
|
%
| | | | |
6.34
|
%
| | | |
6.90
|
%
|
Return on average tangible common equity, excluding restructuring
charges and special items (non-GAAP) | |
J/M
| | |
6.60
|
%
| | | |
6.67
|
%
| | | |
6.73
|
%
| | | |
6.76
|
%
| | | |
6.22
|
%
| | | | |
6.67
|
%
| | | |
5.92
|
%
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Return on average total assets, excluding restructuring charges
and special items: | | | | | | | | | | | | | | | | | | | | | | | |
Average total assets (GAAP)
| |
N
| |
$
|
135,103
| | | |
$
|
135,521
| | | |
$
|
133,325
| | | |
$
|
130,671
| | | |
$
|
128,691
| | | | |
$
|
134,655
| | | |
$
|
126,598
| |
Return on average total assets, excluding restructuring charges
and special items (non-GAAP) | |
H/N
| | |
0.65
|
%
| | | |
0.64
|
%
| | | |
0.65
|
%
| | | |
0.66
|
%
| | | |
0.62
|
%
| | | | |
0.65
|
%
| | | |
0.61
|
%
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Return on average total tangible assets and return on average
total tangible assets, excluding restructuring charges and special
items: | | | | | | | | | | | | | | | | |
Average total assets (GAAP)
| |
N
| |
$
|
135,103
| | | |
$
|
135,521
| | | |
$
|
133,325
| | | |
$
|
130,671
| | | |
$
|
128,691
| | | | |
$
|
134,655
| | | |
$
|
126,598
| |
Less: Average goodwill (GAAP)
| | | | |
6,876
| | | | |
6,876
| | | | |
6,876
| | | | |
6,876
| | | | |
6,876
| | | | | |
6,876
| | | | |
6,876
| |
Less: Average other intangibles (GAAP)
| | | | |
4
| | | | |
5
| | | | |
5
| | | | |
6
| | | | |
6
| | | | | |
5
| | | | |
7
| |
Add: Average deferred tax liabilities related to goodwill (GAAP)
| | | |
|
453
|
|
|
|
|
437
|
|
|
|
|
422
|
|
|
|
|
403
|
|
|
|
|
384
|
| | | |
|
438
|
|
|
|
|
368
|
|
Average tangible assets (non-GAAP) | |
O
| |
$
|
128,676
|
|
|
|
$
|
129,077
|
|
|
|
$
|
126,866
|
|
|
|
$
|
124,192
|
|
|
|
$
|
122,193
|
| | | |
$
|
128,212
|
|
|
|
$
|
120,083
|
|
Return on average total tangible assets (non-GAAP) | |
G/O
| | |
0.68
|
%
| | | |
0.59
|
%
| | | |
0.67
|
%
| | | |
0.63
|
%
| | | |
0.61
|
%
| | | | |
0.65
|
%
| | | |
0.74
|
%
|
Return on average total tangible assets, excluding restructuring
charges and special items (non-GAAP) | |
H/O
| | |
0.68
|
%
| | | |
0.67
|
%
| | | |
0.69
|
%
| | | |
0.69
|
%
| | | |
0.66
|
%
| | | | |
0.68
|
%
| | | |
0.64
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | QUARTERLY TRENDS | | | | FOR THE NINE MONTHS ENDED SEPTEMBER 30 |
| | | | 3Q15 | | | 2Q15 | | | 1Q15 | | | 4Q14 | | | 3Q14 | | | | | 2015 | | | | | 2014 | |
Efficiency ratio and efficiency ratio, excluding restructuring
charges and special items: | | | | | | | | | | | | | | | | | | | | |
Net interest income (GAAP)
| | | |
$
|
856
| | | |
$
|
840
| | | |
$
|
836
| | | |
$
|
840
| | | |
$
|
820
| | | | |
$
|
2,532
| | | |
$
|
2,461
| |
Add: Noninterest income (GAAP)
| | | |
|
353
|
|
|
|
|
360
|
|
|
|
|
347
|
|
|
|
|
339
|
|
|
|
|
341
|
| | | |
|
1,060
|
|
|
|
|
1,339
|
|
Total revenue (GAAP)
| |
C
| |
$
|
1,209
|
|
|
|
$
|
1,200
|
|
|
|
$
|
1,183
|
|
|
|
$
|
1,179
|
|
|
|
$
|
1,161
|
| | | |
$
|
3,592
|
|
|
|
$
|
3,800
|
|
Efficiency ratio (non-GAAP) | |
E/C
| | |
66.02
|
%
| | | |
70.02
|
%
| | | |
68.49
|
%
| | | |
69.88
|
%
| | | |
69.84
|
%
| | | | |
68.17
|
%
| | | |
67.58
|
%
|
Efficiency ratio, excluding restructuring charges and special
items (non-GAAP) | |
F/D
| | |
66.02
|
%
| | | |
66.70
|
%
| | | |
67.65
|
%
| | | |
67.11
|
%
| | | |
68.02
|
%
| | | | |
66.78
|
%
| | | |
69.23
|
%
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Tangible book value per common share: | | | | | | | | | | | | | | | | | | | | | | | |
Common shares - at end of period (GAAP)
| |
P
| | |
527,636,510
| | | | |
537,149,717
| | | | |
547,490,812
| | | | |
545,884,519
| | | | |
559,998,324
| | | | | |
527,636,510
| | | | |
559,998,324
| |
Stockholders' equity (GAAP)
| | | |
$
|
19,353
| | | |
$
|
19,339
| | | |
$
|
19,564
| | | |
$
|
19,268
| | | |
$
|
19,383
| | | | |
$
|
19,353
| | | |
$
|
19,383
| |
Less: Goodwill (GAAP)
| | | | |
6,876
| | | | |
6,876
| | | | |
6,876
| | | | |
6,876
| | | | |
6,876
| | | | | |
6,876
| | | | |
6,876
| |
Less: Other intangible assets (GAAP)
| | | | |
3
| | | | |
4
| | | | |
5
| | | | |
6
| | | | |
6
| | | | | |
3
| | | | |
6
| |
Add: Deferred tax liabilities related to goodwill (GAAP)
| | | |
|
465
|
|
|
|
|
450
|
|
|
|
|
434
|
|
|
|
|
420
|
|
|
|
|
399
|
| | | |
|
465
|
|
|
|
|
399
|
|
Tangible common equity (non-GAAP) | |
Q
| |
$
|
12,939
|
|
|
|
$
|
12,909
|
|
|
|
$
|
13,117
|
|
|
|
$
|
12,806
|
|
|
|
$
|
12,900
|
| | | |
$
|
12,939
|
|
|
|
$
|
12,900
|
|
Tangible book value per common share (non-GAAP) | |
Q/P
| |
$
|
24.52
| | | |
$
|
24.03
| | | |
$
|
23.96
| | | |
$
|
23.46
| | | |
$
|
23.04
| | | | |
$
|
24.52
| | | |
$
|
23.04
| |
| | | | | | | | | | | | | | | | | | | | | | |
|
Net income per average common share - basic and diluted,
excluding restructuring charges and special items: | | | | | | | | | | | | | | | | | | | | | | |
Average common shares outstanding - basic (GAAP)
| |
R
| | |
530,985,255
| | | | |
537,729,248
| | | | |
546,291,363
| | | | |
546,810,009
| | | | |
559,998,324
| | | | | |
538,279,222
| | | | |
559,998,324
| |
Average common shares outstanding - diluted (GAAP)
| |
S
| | |
533,398,158
| | | | |
539,909,366
| | | | |
549,798,717
| | | | |
550,676,298
| | | | |
560,243,747
| | | | | |
540,926,361
| | | | |
560,081,031
| |
Net income available to common stockholders (GAAP)
| |
I
| |
$
|
213
| | | |
$
|
190
| | | |
$
|
209
| | | |
$
|
197
| | | |
$
|
189
| | | | |
$
|
612
| | | |
$
|
668
| |
Net income per average common share - basic (GAAP)
| |
I/R
| | |
0.40
| | | | |
0.35
| | | | |
0.38
| | | | |
0.36
| | | | |
0.34
| | | | | |
1.14
| | | | |
1.19
| |
Net income per average common share - diluted (GAAP)
| |
I/S
| | |
0.40
| | | | |
0.35
| | | | |
0.38
| | | | |
0.36
| | | | |
0.34
| | | | | |
1.13
| | | | |
1.19
| |
Net income available to common stockholders, excluding
restructuring charges and special items (non-GAAP) | |
J
| | |
213
| | | | |
215
| | | | |
215
| | | | |
217
| | | | |
202
| | | | | |
643
| | | | |
573
| |
Net income per average common share - basic, excluding
restructuring charges and special items (non-GAAP) | |
J/R
| | |
0.40
| | | | |
0.40
| | | | |
0.39
| | | | |
0.40
| | | | |
0.36
| | | | | |
1.20
| | | | |
1.02
| |
Net income per average common share - diluted, excluding
restructuring charges and special items (non-GAAP) | |
J/S
| | |
0.40
| | | | |
0.40
| | | | |
0.39
| | | | |
0.39
| | | | |
0.36
| | | | | |
1.19
| | | | |
1.02
| |
| | | | | | | | | | | | | | | | | | | | | | |
|
Pro forma Basel III fully phased-in common equity tier 1 capital
ratio1: | | | | | | | | | | | | | | | | | | | | | | | |
Common equity tier 1 (regulatory)
| | | |
$
|
13,200
| | | |
$
|
13,270
| | | |
$
|
13,360
| | | |
$
|
13,173
| | | |
$
|
13,330
| | | | | | | | |
Less: Change in DTA and other threshold deductions (GAAP)
| | | |
|
2
|
|
|
|
|
3
|
|
|
|
|
3
|
|
|
|
|
(6
|
)
|
|
|
|
(5
|
)
| | | | | | | |
Pro forma Basel III fully phased-in common equity tier 1
(non-GAAP) | |
T
| |
$
|
13,198
|
|
|
|
$
|
13,267
|
|
|
|
$
|
13,357
|
|
|
|
$
|
13,179
|
|
|
|
$
|
13,335
|
| | | | | | | |
Risk-weighted assets (regulatory general risk weight approach)
| | | |
$
|
112,277
| | | |
$
|
112,131
| | | |
$
|
109,786
| | | |
$
|
105,964
| | | |
$
|
103,207
| | | | | | | | |
Add: Net change in credit and other risk-weighted assets (regulatory)
| | | |
|
243
|
|
|
|
|
247
|
|
|
|
|
242
|
|
|
|
|
2,882
|
|
|
|
|
3,207
|
| | | | | | | |
Basel III standardized approach risk-weighted assets (non-GAAP) | |
U
| |
$
|
112,520
|
|
|
|
$
|
112,378
|
|
|
|
$
|
110,028
|
|
|
|
$
|
108,846
|
|
|
|
$
|
106,414
|
| | | | | | | |
Pro forma Basel III fully phased-in common equity tier 1 capital
ratio (non-GAAP)1 | |
T/U
| | |
11.7
|
%
| | | |
11.8
|
%
| | | |
12.1
|
%
| | | |
12.1
|
%
| | | |
12.5
|
%
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
|
Salaries and employee benefits, excluding restructuring charges
and special items: | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits (GAAP)
| |
V
| |
$
|
404
| | | |
$
|
411
| | | |
$
|
419
| | | |
$
|
397
| | | |
$
|
409
| | | | |
$
|
1,234
| | | |
$
|
1,281
| |
Less: Restructuring charges and special items
| | | |
|
—
|
|
|
|
|
6
|
|
|
|
|
(1
|
)
|
|
|
|
1
|
|
|
|
|
—
|
| | | |
|
5
|
|
|
|
|
43
|
|
Salaries and employee benefits, excluding restructuring charges
and special items (non-GAAP) | |
W
| |
$
|
404
|
|
|
|
$
|
405
|
|
|
|
$
|
420
|
|
|
|
$
|
396
|
|
|
|
$
|
409
|
| | | |
$
|
1,229
|
|
|
|
$
|
1,238
|
|
1 Periods prior to 1Q15 reported on a Basel I basis.
Basel III ratios assume certain definitions impacting qualifying
Basel III capital, which otherwise will phase in through 2018, are
fully phased-in. Ratios also reflect the required US Standardized
methodology for calculating RWAs, effective January 1, 2015.
|
| | | | | | | | | | | | | | | | | | | | | | |
|
| | | | QUARTERLY TRENDS | | | | FOR THE NINE MONTHS ENDED SEPTEMBER 30 |
| | | | 3Q15 | | | 2Q15 | | | 1Q15 | | | 4Q14 | | | 3Q14 | | | | | 2015 | | | | | 2014 | |
Outside services, excluding restructuring charges and special
items: | | | | | | | | | | | | | | | | | | | | | | | |
Outside services (GAAP)
| |
X
| |
$
|
89
| | | |
$
|
99
| | | |
$
|
79
| | | |
$
|
106
| | | |
$
|
106
| | | | |
$
|
267
| | | |
$
|
314
| |
Less: Restructuring charges and special items
| | | |
|
—
|
|
|
|
|
16
|
|
|
|
|
8
|
|
|
|
|
18
|
|
|
|
|
19
|
| | | |
|
24
|
|
|
|
|
60
|
|
Outside services, excluding restructuring charges and special
items (non-GAAP) | |
Y
| |
$
|
89
|
|
|
|
$
|
83
|
|
|
|
$
|
71
|
|
|
|
$
|
88
|
|
|
|
$
|
87
|
| | | |
$
|
243
|
|
|
|
$
|
254
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Occupancy, excluding restructuring charges and special items: | | | | | | | | | | | | | | | | | | | | | | | |
Occupancy (GAAP)
| |
X
| |
$
|
75
| | | |
$
|
90
| | | |
$
|
80
| | | |
$
|
81
| | | |
$
|
77
| | | | |
$
|
245
| | | |
$
|
245
| |
Less: Restructuring charges and special items
| | | |
|
—
|
|
|
|
|
15
|
|
|
|
|
2
|
|
|
|
|
5
|
|
|
|
|
2
|
| | | |
|
17
|
|
|
|
|
11
|
|
Occupancy, excluding restructuring charges and special items
(non-GAAP) | |
AA
| |
$
|
75
|
|
|
|
$
|
75
|
|
|
|
$
|
78
|
|
|
|
$
|
76
|
|
|
|
$
|
75
|
| | | |
$
|
228
|
|
|
|
$
|
234
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Equipment expense, excluding restructuring charges and special
items: | | | | | | | | | | | | | | | | | | | | | | | |
Equipment expense (GAAP)
| |
BB
| |
$
|
62
| | | |
$
|
65
| | | |
$
|
63
| | | |
$
|
63
| | | |
$
|
58
| | | | |
$
|
190
| | | |
$
|
187
| |
Less: Restructuring charges and special items
| | | |
|
—
|
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
—
|
| | | |
|
1
|
|
|
|
|
3
|
|
Equipment expense, excluding restructuring charges and special
items (non-GAAP) | |
CC
| |
$
|
62
|
|
|
|
$
|
65
|
|
|
|
$
|
62
|
|
|
|
$
|
62
|
|
|
|
$
|
58
|
| | | |
$
|
189
|
|
|
|
$
|
184
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Amortization of software, excluding restructuring charges and
special items: | | | | | | | | | | | | | | | | | | | | | | | |
Amortization of software
| |
DD
| |
$
|
35
| | | |
$
|
37
| | | |
$
|
36
| | | |
$
|
43
| | | |
$
|
38
| | | | |
$
|
108
| | | |
$
|
102
| |
Less: Restructuring charges and special items
| | | |
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
6
|
|
|
|
|
—
|
| | | |
|
—
|
|
|
|
|
—
|
|
Amortization of software, excluding restructuring charges and
special items (non-GAAP) | |
EE
| |
$
|
35
|
|
|
|
$
|
37
|
|
|
|
$
|
36
|
|
|
|
$
|
37
|
|
|
|
$
|
38
|
| | | |
$
|
108
|
|
|
|
$
|
102
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Other operating expense, excluding restructuring charges and
special items: | | | | | | | | | | | | | | | | | | | | | | | |
Other operating expense (GAAP)
| |
FF
| |
$
|
133
| | | |
$
|
139
| | | |
$
|
133
| | | |
$
|
134
| | | |
$
|
122
| | | | |
$
|
405
| | | |
$
|
439
| |
Less: Restructuring charges and special items
| | | |
|
—
|
|
|
|
|
3
|
|
|
|
|
—
|
|
|
|
|
2
|
|
|
|
|
—
|
| | | |
|
3
|
|
|
|
|
19
|
|
Other operating expense, excluding restructuring charges and
special items (non-GAAP) | |
GG
| |
$
|
133
|
|
|
|
$
|
136
|
|
|
|
$
|
133
|
|
|
|
$
|
132
|
|
|
|
$
|
122
|
| | | |
$
|
402
|
|
|
|
$
|
420
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Pre-provision profit, excluding restructuring charges and special
items: | | | | | | | | | | | | | | | | | | | | | | | |
Total revenue, excluding restructuring charges and special items
(non-GAAP)
| |
D
| |
$
|
1,209
| | | |
$
|
1,200
| | | |
$
|
1,183
| | | |
$
|
1,179
| | | |
$
|
1,161
| | | | |
$
|
3,592
| | | |
$
|
3,512
| |
Less: Noninterest expense, excluding restructuring charges and
special items (non-GAAP)
| |
F
| |
|
798
|
|
|
|
|
801
|
|
|
|
|
800
|
|
|
|
|
791
|
|
|
|
|
789
|
| | | |
|
2,399
|
|
|
|
|
2,432
|
|
Pre-provision profit, excluding restructuring charges and special
items (non-GAAP) | |
HH
| |
$
|
411
|
|
|
|
$
|
399
|
|
|
|
$
|
383
|
|
|
|
$
|
388
|
|
|
|
$
|
372
|
| | | |
$
|
1,193
|
|
|
|
$
|
1,080
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Income before income tax expense (benefit), excluding
restructuring charges and special items: | | | | | | | | | | | | | | | | | | | | | | | |
Income before income tax expense (GAAP)
| |
II
| |
$
|
335
| | | |
$
|
282
| | | |
$
|
315
| | | |
$
|
283
| | | |
$
|
274
| | | | |
$
|
932
| | | |
$
|
985
| |
Less: Income before income tax expense (benefit) related to
restructuring charges and special items (GAAP)
| | | |
|
—
|
|
|
|
|
(40
|
)
|
|
|
|
(10
|
)
|
|
|
|
(33
|
)
|
|
|
|
(21
|
)
| | | |
|
(50
|
)
|
|
|
|
152
|
|
Income before income tax expense, excluding restructuring charges
and special items (non-GAAP) | |
JJ
| |
$
|
335
|
|
|
|
$
|
322
|
|
|
|
$
|
325
|
|
|
|
$
|
316
|
|
|
|
$
|
295
|
| | | |
$
|
982
|
|
|
|
$
|
833
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Income tax expense, excluding restructuring charges and special
items: | | | | | | | | | | | | | | | | | | | | | | | |
Income tax expense (GAAP)
| |
KK
| |
$
|
115
| | | |
$
|
92
| | | |
$
|
106
| | | |
$
|
86
| | | |
$
|
85
| | | | |
$
|
313
| | | |
$
|
317
| |
Less: Income tax (benefit) related to restructuring charges and
special items (GAAP)
| | | |
|
—
|
|
|
|
|
(15
|
)
|
|
|
|
(4
|
)
|
|
|
|
(13
|
)
|
|
|
|
(8
|
)
| | | |
|
(19
|
)
|
|
|
|
57
|
|
Income tax expense, excluding restructuring charges and special
items (non-GAAP) | |
LL
| |
$
|
115
|
|
|
|
$
|
107
|
|
|
|
$
|
110
|
|
|
|
$
|
99
|
|
|
|
$
|
93
|
| | | |
$
|
332
|
|
|
|
$
|
260
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
Restructuring charges and special expense items include: | | | | | | | | | | | | | | | | | | | | | | | |
Restructuring charges
| | | |
$
|
0
| | | |
$
|
25
| | | |
$
|
1
| | | |
$
|
10
| | | |
$
|
1
| | | | |
$
|
26
| | | |
$
|
104
| |
Special items
| | | |
|
0
|
|
|
|
|
15
|
|
|
|
|
9
|
|
|
|
|
23
|
|
|
|
|
20
|
| | | |
|
24
|
|
|
|
|
32
|
|
Restructuring charges and special expense items | |
MM
| |
$
|
0
|
|
|
|
$
|
40
|
|
|
|
$
|
10
|
|
|
|
$
|
33
|
|
|
|
$
|
21
|
| | | |
$
|
50
|
|
|
|
$
|
136
|
|
| | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | |
|
| | | | QUARTERLY TRENDS | | | | 3Q15 v 2Q15 | | | 3Q15 v 3Q14 |
| | | | 3Q15 | | | 2Q15 | | | 1Q15 | | | 4Q14 | | | 3Q14 | | | | | % Change | | | | | % Change | |
| | | | | | | | | | | | | | | | | | | | | | |
|
Operating leverage, excluding restructuring charges and special
items: | | | | | | | | | | | | | | | | | | | | | | | |
Total revenue, excluding restructuring charges and special items
(non-GAAP)
| |
D
| |
$
|
1,209
| | | |
$
|
1,200
| | | | | | | | | |
$
|
1,161
| | | | | |
0.8
|
%
| | | |
4.1
|
%
|
Less: Noninterest expense, excluding restructuring charges and
special items (non-GAAP)
| |
F
| |
$
|
798
| | | |
$
|
801
| | | | | | | | | |
$
|
789
| | | | |
|
(0.4
|
)%
| | |
|
1.1
|
%
|
Operating leverage, excluding restructuring charges and special
items: (non-GAAP) | |
NN
| | | | | | | | | | | | | | | | | |
| 1.1 | % | | |
| 3.0 | % |
| | | | | | | | | | | | | | | | | | | | | | |
|
|
| |
| |
|
| |
|
| |
|
| | |
|
| |
|
| |
|
| |
|
| |
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS - SEGMENTS (dollars
in millions) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | THREE MONTHS ENDED SEPT 30, | | | | THREE MONTHS ENDED JUNE 30, |
| | | | 2015 | | | | | 2015 | |
| | | | Consumer Banking | | | Commercial Banking | | | Other | | | Consolidated |
| | | Consumer Banking | | | Commercial Banking | | | Other | | | Consolidated |
Net income (loss) (GAAP)
| |
A
| | |
68
| | | | |
145
| | | | |
7
| | | | |
220
| | | | | |
66
| | | | |
135
| | | | |
(11
|
)
| | | |
190
| |
Less: Preferred stock dividends
| | | |
|
—
|
| | |
|
—
|
| | |
|
7
|
| | |
|
7
|
| | | |
|
—
|
| | |
|
—
|
| | |
|
—
|
| | |
|
—
|
|
Net income available to common stockholders
| |
B
| |
$
|
68
|
| | |
$
|
145
|
| | |
$
|
—
|
| | |
$
|
213
|
| | | |
$
|
66
|
| | |
$
|
135
|
| | |
|
($11
|
)
| | |
$
|
190
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
Return on average tangible common equity | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average common equity (GAAP)
| |
C
| |
$
|
4,791
| | | |
$
|
4,722
| | | |
$
|
9,748
| | | |
$
|
19,261
| | | | |
$
|
4,681
| | | |
$
|
4,625
| | | |
$
|
10,085
| | | |
$
|
19,391
| |
Less: Average goodwill (GAAP)
| | | | |
—
| | | | |
—
| | | | |
6,876
| | | | |
6,876
| | | | | |
—
| | | | |
—
| | | | |
6,876
| | | | |
6,876
| |
Average other intangibles (GAAP)
| | | | |
—
| | | | |
—
| | | | |
4
| | | | |
4
| | | | | |
—
| | | | |
—
| | | | |
5
| | | | |
5
| |
Add: Average deferred tax liabilities related to goodwill (GAAP)
| | | |
|
—
|
| | |
|
—
|
| | |
|
453
|
| | |
|
453
|
| | | |
|
—
|
| | |
|
—
|
| | |
|
437
|
| | |
|
437
|
|
Average tangible common equity (non-GAAP)
| |
D
| |
$
|
4,791
|
| | |
$
|
4,722
|
| | |
$
|
3,321
|
| | |
$
|
12,834
|
| | | |
$
|
4,681
|
| | |
$
|
4,625
|
| | |
$
|
3,641
|
| | |
$
|
12,947
|
|
Return on average tangible common equity (non-GAAP)
| |
B/D
| | |
5.67
|
%
| | | |
12.24
|
%
| | | |
NM
| | | | |
6.60
|
%
| | | | |
5.66
|
%
| | | |
11.69
|
%
| | | |
NM
| | | | |
5.90
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
Return on average total tangible assets | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average total assets (GAAP)
| |
E
| |
$
|
53,206
| | | |
$
|
43,113
| | | |
$
|
38,784
| | | |
$
|
135,103
| | | | |
$
|
52,489
| | | |
$
|
42,617
| | | |
$
|
40,415
| | | |
$
|
135,521
| |
Less: Average goodwill (GAAP)
| | | | |
—
| | | | |
—
| | | | |
6,876
| | | | |
6,876
| | | | | |
—
| | | | |
—
| | | | |
6,876
| | | | |
6,876
| |
Average other intangibles (GAAP)
| | | | |
—
| | | | |
—
| | | | |
4
| | | | |
4
| | | | | |
—
| | | | |
—
| | | | |
5
| | | | |
5
| |
Add: Average deferred tax liabilities related to goodwill (GAAP)
| | | |
|
—
|
| | |
|
—
|
| | |
|
453
|
| | |
|
453
|
| | | |
|
—
|
| | |
|
—
|
| | |
|
437
|
| | |
|
437
|
|
Average tangible assets (non-GAAP)
| |
F
| |
$
|
53,206
|
| | |
$
|
43,113
|
| | |
$
|
32,357
|
| | |
$
|
128,676
|
| | | |
$
|
52,489
|
| | |
$
|
42,617
|
| | |
$
|
33,971
|
| | |
$
|
129,077
|
|
Return on average total tangible assets (non-GAAP)
| |
A/F
| | |
0.51
|
%
| | | |
1.34
|
%
| | | |
NM
| | | | |
0.68
|
%
| | | | |
0.51
|
%
| | | |
1.27
|
%
| | | |
NM
| | | | |
0.59
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
Efficiency ratio | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense (GAAP)
| |
G
| |
$
|
623
| | | |
$
|
175
| | | |
$
|
—
| | | |
$
|
798
| | | | |
$
|
613
| | | |
$
|
181
| | | |
$
|
47
| | | |
$
|
841
| |
Net interest income (GAAP)
| | | | |
556
| | | | |
299
| | | | |
1
| | | | |
856
| | | | | |
544
| | | | |
286
| | | | |
10
| | | | |
840
| |
Noninterest income (GAAP)
| | | |
|
235
|
| | |
|
100
|
| | |
|
18
|
| | |
|
353
|
| | | |
|
230
|
| | |
|
108
|
| | |
|
22
|
| | |
|
360
|
|
Total revenue
| |
H
| |
$
|
791
|
| | |
$
|
399
|
| | |
$
|
19
|
| | |
$
|
1,209
|
| | | |
$
|
774
|
| | |
$
|
394
|
| | |
$
|
32
|
| | |
$
|
1,200
|
|
Efficiency ratio (non-GAAP)
| |
G/H
| | |
78.72
|
%
| | | |
43.75
|
%
| | | |
NM
| | | | |
66.02
|
%
| | | | |
79.25
|
%
| | | |
46.07
|
%
| | | |
NM
| | | | |
70.02
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | THREE MONTHS ENDED MAR 31, | | | | THREE MONTHS ENDED DEC 31, |
| | | | 2015 | | | | | 2014 | |
| | | | Consumer Banking | | | Commercial Banking | | | Other | | | Consolidated | | | | Consumer Banking | | | Commercial Banking | | | Other | | | Consolidated |
Net income (loss) (GAAP)
| |
A
| | |
61
| | | | |
147
| | | | |
1
| | | | |
209
| |
#
| | |
$
|
52
| | | |
$
|
140
| | | |
$
|
5
| | | |
$
|
197
| |
Less: Preferred stock dividends
| | | |
|
—
|
| | |
|
—
|
| | |
|
—
|
| | |
|
—
|
| | | |
|
—
|
| | |
|
—
|
| | |
|
—
|
| | |
|
—
|
|
Net income available to common stockholders
| |
B
| |
$
|
61
|
| | |
$
|
147
|
| | |
$
|
1
|
| | |
$
|
209
|
| | | |
$
|
52
|
| | |
$
|
140
|
| | |
$
|
5
|
| | |
$
|
197
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
Return on average tangible common equity | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average common equity (GAAP)
| |
C
| |
$
|
4,649
| | | |
$
|
4,526
| | | |
$
|
10,232
| | | |
$
|
19,407
| | | | |
$
|
4,756
| | | |
$
|
4,334
| | | |
$
|
10,119
| | | |
$
|
19,209
| |
Less: Average goodwill (GAAP)
| | | | |
—
| | | | |
—
| | | | |
6,876
| | | | |
6,876
| | | | | |
—
| | | | |
—
| | | | |
6,876
| | | | |
6,876
| |
Average other intangibles (GAAP)
| | | | |
—
| | | | |
—
| | | | |
5
| | | | |
5
| | | | | |
—
| | | | |
—
| | | | |
6
| | | | |
6
| |
Add: Average deferred tax liabilities related to goodwill (GAAP)
| | | |
|
—
|
| | |
|
—
|
| | |
|
422
|
| | |
|
422
|
| | | |
|
—
|
| | |
|
—
|
| | |
|
403
|
| | |
|
403
|
|
Average tangible common equity (non-GAAP)
| |
D
| |
$
|
4,649
|
| | |
$
|
4,526
|
| | |
$
|
3,773
|
| | |
$
|
12,948
|
| | | |
$
|
4,756
|
| | |
$
|
4,334
|
| | |
$
|
3,640
|
| | |
$
|
12,730
|
|
Return on average tangible common equity (non-GAAP)
| |
B/D
| | |
5.30
|
%
| | | |
13.15
|
%
| | | |
NM
| | | | |
6.53
|
%
| | | | |
4.30
|
%
| | | |
12.76
|
%
| | | |
NM
| | | | |
6.12
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
Return on average total tangible assets | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average total assets (GAAP)
| |
E
| |
$
|
51,602
| | | |
$
|
41,606
| | | |
$
|
40,117
| | | |
$
|
133,325
| | | | |
$
|
50,546
| | | |
$
|
40,061
| | | |
$
|
40,064
| | | |
$
|
130,671
| |
Less: Average goodwill (GAAP)
| | | | |
—
| | | | |
—
| | | | |
6,876
| | | | |
6,876
| | | | | |
—
| | | | |
—
| | | | |
6,876
| | | | |
6,876
| |
Average other intangibles (GAAP)
| | | | |
—
| | | | |
—
| | | | |
5
| | | | |
5
| | | | | |
—
| | | | |
—
| | | | |
6
| | | | |
6
| |
Add: Average deferred tax liabilities related to goodwill (GAAP)
| | | |
|
—
|
| | |
|
—
|
| | |
|
422
|
| | |
|
422
|
| | | |
|
—
|
| | |
|
—
|
| | |
|
403
|
| | |
|
403
|
|
Average tangible assets (non-GAAP)
| |
F
| |
$
|
51,602
|
| | |
$
|
41,606
|
| | |
$
|
33,658
|
| | |
$
|
126,866
|
| | | |
$
|
50,546
|
| | |
$
|
40,061
|
| | |
$
|
33,585
|
| | |
$
|
124,192
|
|
Return on average total tangible assets (non-GAAP)
| |
A/F
| | |
0.48
|
%
| | | |
1.43
|
%
| | | |
NM
| | | | |
0.67
|
%
| | | | |
0.40
|
%
| | | |
1.38
|
%
| | | |
NM
| | | | |
0.63
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
Efficiency ratio | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense (GAAP)
| |
G
| |
$
|
596
| | | |
$
|
173
| | | |
$
|
41
| | | |
$
|
810
| | | | |
$
|
611
| | | |
$
|
180
| | | |
$
|
33
| | | |
$
|
824
| |
Net interest income (GAAP)
| | | | |
533
| | | | |
276
| | | | |
27
| | | | |
836
| | | | | |
536
| | | | |
283
| | | | |
21
| | | | |
840
| |
Noninterest income (GAAP)
| | | |
|
219
|
| | |
|
100
|
| | |
|
28
|
| | |
|
347
|
| | | |
|
218
|
| | |
|
111
|
| | |
|
10
|
| | |
|
339
|
|
Total revenue
| |
H
| |
$
|
752
|
| | |
$
|
376
|
| | |
$
|
55
|
| | |
$
|
1,183
|
| | | |
$
|
754
|
| | |
$
|
394
|
| | |
$
|
31
|
| | |
$
|
1,179
|
|
Efficiency ratio (non-GAAP)
| |
G/H
| | |
79.25
|
%
| | | |
46.01
|
%
| | | |
NM
| | | | |
68.49
|
%
| | | | |
81.09
|
%
| | | |
45.48
|
%
| | | |
NM
| | | | |
69.88
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | THREE MONTHS ENDED SEPT 30, | | | | | | | | | | | | | |
| | | | 2014 | | | | | | | | | | | | | | |
| | | | Consumer Banking | | | Commercial Banking | | | Other | | | Consolidated | | | | | | | | | | | | | |
Net income (loss) (GAAP)
| |
A
| |
$
|
54
| | | |
$
|
139
| | | | |
($4
|
)
| | |
$
|
189
| |
| | | | | | | | | | | | |
Less: Preferred stock dividends
| | | |
|
—
|
| | |
|
—
|
| | |
|
—
|
| | |
|
—
|
| | | | | | | | | | | | | |
Net income available to common stockholders
| |
B
| |
$
|
54
|
| | |
$
|
139
|
| | |
|
($4
|
)
| | |
$
|
189
|
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
Return on average tangible common equity | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average common equity (GAAP)
| |
C
| |
$
|
4,685
| | | |
$
|
4,205
| | | |
$
|
10,521
| | | |
$
|
19,411
| | | | | | | | | | | | | | |
Less: Average goodwill (GAAP)
| | | | |
—
| | | | |
—
| | | | |
6,876
| | | | |
6,876
| | | | | | | | | | | | | | |
Average other intangibles (GAAP)
| | | | |
—
| | | | |
—
| | | | |
6
| | | | |
6
| | | | | | | | | | | | | | |
Add: Average deferred tax liabilities related to goodwill (GAAP)
| | | |
|
—
|
| | |
|
—
|
| | |
|
384
|
| | |
|
384
|
| | | | | | | | | | | | | |
Average tangible common equity (non-GAAP)
| |
D
| |
$
|
4,685
|
| | |
$
|
4,205
|
| | |
$
|
4,023
|
| | |
$
|
12,913
|
| | | | | | | | | | | | | |
Return on average tangible common equity (non-GAAP)
| |
B/D
| | |
4.57
|
%
| | | |
13.10
|
%
| | | |
NM
| | | | |
5.81
|
%
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
Return on average total tangible assets | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average total assets (GAAP)
| |
E
| |
$
|
49,012
| | | |
$
|
38,854
| | | |
$
|
40,825
| | | |
$
|
128,691
| | | | | | | | | | | | | | |
Less: Average goodwill (GAAP)
| | | | |
—
| | | | |
—
| | | | |
6,876
| | | | |
6,876
| | | | | | | | | | | | | | |
Average other intangibles (GAAP)
| | | | |
—
| | | | |
—
| | | | |
6
| | | | |
6
| | | | | | | | | | | | | | |
Add: Average deferred tax liabilities related to goodwill (GAAP)
| | | |
|
—
|
| | |
|
—
|
| | |
|
384
|
| | |
|
384
|
| | | | | | | | | | | | | |
Average tangible assets (non-GAAP)
| |
F
| |
$
|
49,012
|
| | |
$
|
38,854
|
| | |
$
|
34,327
|
| | |
$
|
122,193
|
| | | | | | | | | | | | | |
Return on average total tangible assets (non-GAAP)
| |
A/F
| | |
0.44
|
%
| | | |
1.42
|
%
| | | |
NM
| | | | |
0.61
|
%
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
Efficiency ratio | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense (GAAP)
| |
G
| |
$
|
609
| | | |
$
|
162
| | | |
$
|
39
| | | |
$
|
810
| | | | | | | | | | | | | | |
Net interest income (GAAP)
| | | | |
532
| | | | |
270
| | | | |
18
| | | | |
820
| | | | | | | | | | | | | | |
Noninterest income (GAAP)
| | | |
|
226
|
| | |
|
104
|
| | |
|
11
|
| | |
|
341
|
| | | | | | | | | | | | | |
Total revenue
| |
H
| |
$
|
758
|
| | |
$
|
374
|
| | |
$
|
29
|
| | |
$
|
1,161
|
| | | | | | | | | | | | | |
Efficiency ratio (non-GAAP)
| |
G/H
| | |
80.42
|
%
| | | |
43.35
|
%
| | | |
NM
| | | | |
69.84
|
%
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| |
| |
|
| |
|
| |
|
| |
|
|
| |
|
| |
|
| |
|
| |
NON-GAAP MEASURES - SEGMENTS (CONTINUED) (dollars in
millions) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | FOR THE NINE MONTHS ENDED SEPTEMBER 30, |
| | | | 2015 | | | | | 2014 | |
| | | | Consumer Banking | | | Commercial Banking | | | Other | | | Consolidated | | | | Consumer Banking | | | Commercial Banking | | | Other | | | Consolidated |
Net income (loss) (GAAP)
| |
A
| |
$
|
195
| | | |
$
|
427
| | | | |
($3
|
)
| | |
$
|
619
| | | | |
$
|
130
| | | |
$
|
421
| | | |
$
|
117
| | |
$
|
668
| |
Less: Preferred stock dividends
| | | |
|
—
|
| | |
|
—
|
| | |
|
7
|
| | |
|
7
|
| | | |
|
—
|
| | |
|
—
|
| | |
|
—
| | |
|
—
|
|
Net income available to common stockholders
| |
B
| |
$
|
195
|
| | |
$
|
427
|
| | |
|
($10
|
)
| | |
$
|
612
|
| | | |
$
|
130
|
| | |
$
|
421
|
| | |
$
|
117
| | |
$
|
668
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
Return on average tangible common equity | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average common equity (GAAP)
| |
C
| |
$
|
4,708
| | | |
$
|
4,625
| | | |
$
|
10,019
| | | |
$
|
19,352
| | | | |
$
|
4,635
| | | |
$
|
4,120
| | | |
$
|
10,708
| | |
$
|
19,463
| |
Less: Average goodwill (GAAP)
| | | | |
—
| | | | |
—
| | | | |
6,876
| | | | |
6,876
| | | | | |
—
| | | | |
—
| | | | |
6,876
| | | |
6,876
| |
Average other intangibles (GAAP)
| | | | |
—
| | | | |
—
| | | | |
5
| | | | |
5
| | | | | |
—
| | | | |
—
| | | | |
7
| | | |
7
| |
Add: Average deferred tax liabilities related to goodwill (GAAP)
| | | |
|
—
|
| | |
|
—
|
| | |
|
438
|
| | |
|
438
|
| | | |
|
—
|
| | |
|
—
|
| | |
|
368
| | |
|
368
|
|
Average tangible common equity (non-GAAP)
| |
D
| |
$
|
4,708
|
| | |
$
|
4,625
|
| | |
$
|
3,576
|
| | |
$
|
12,909
|
| | | |
$
|
4,635
|
| | |
$
|
4,120
|
| | |
$
|
4,193
| | |
$
|
12,948
|
|
Return on average tangible common equity (non-GAAP)
| |
B/D
| | |
5.55
|
%
| | | |
12.35
|
%
| | | |
NM
| | | | |
6.34
|
%
| | | | |
3.76
|
%
| | | |
13.67
|
%
| | | |
NM
| | | |
6.90
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
Return on average total tangible assets | | | | | | | | | | | | | | | | | | | | | | | | | | |
Average total assets (GAAP)
| |
E
| |
$
|
52,438
| | | |
$
|
42,451
| | | |
$
|
39,766
| | | |
$
|
134,655
| | | | |
$
|
48,398
| | | |
$
|
37,951
| | | |
$
|
40,249
| | |
$
|
126,598
| |
Less: Average goodwill (GAAP)
| | | | |
—
| | | | |
—
| | | | |
6,876
| | | | |
6,876
| | | | | |
—
| | | | |
—
| | | | |
6,876
| | | |
6,876
| |
Average other intangibles (GAAP)
| | | | |
—
| | | | |
—
| | | | |
5
| | | | |
5
| | | | | |
—
| | | | |
—
| | | | |
7
| | | |
7
| |
Add: Average deferred tax liabilities related to goodwill (GAAP)
| | | |
|
—
|
| | |
|
—
|
| | |
|
438
|
| | |
|
438
|
| | | |
|
—
|
| | |
|
—
|
| | |
|
368
| | |
|
368
|
|
Average tangible assets (non-GAAP)
| |
F
| |
$
|
52,438
|
| | |
$
|
42,451
|
| | |
$
|
33,323
|
| | |
$
|
128,212
|
| | | |
$
|
48,398
|
| | |
$
|
37,951
|
| | |
$
|
33,734
| | |
$
|
120,083
|
|
Return on average total tangible assets (non-GAAP)
| |
A/F
| | |
0.50
|
%
| | | |
1.35
|
%
| | | |
NM
| | | | |
0.65
|
%
| | | | |
0.36
|
%
| | | |
1.48
|
%
| | | |
NM
| | | |
0.74
|
%
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
Efficiency ratio | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest expense (GAAP)
| |
G
| |
$
|
1,832
| | | |
$
|
529
| | | |
$
|
88
| | | |
$
|
2,449
| | | | |
$
|
1,902
| | | |
$
|
472
| | | |
$
|
194
| | |
$
|
2,568
| |
Net interest income (GAAP)
| | | | |
1,633
| | | | |
861
| | | | |
38
| | | | |
2,532
| | | | | |
1,615
| | | | |
790
| | | | |
56
| | | |
2,461
| |
Noninterest income (GAAP)
| | | |
|
684
|
| | |
|
308
|
| | |
|
68
|
| | |
|
1,060
|
| | | |
|
681
|
| | |
|
318
|
| | |
|
340
| | |
|
1,339
|
|
Total revenue
| |
H
| |
$
|
2,317
|
| | |
$
|
1,169
|
| | |
$
|
106
|
| | |
$
|
3,592
|
| | | |
$
|
2,296
|
| | |
$
|
1,108
|
| | |
$
|
396
| | |
$
|
3,800
|
|
Efficiency ratio (non-GAAP)
| |
G/H
| | |
79.07
|
%
| | | |
45.26
|
%
| | | |
NM
| | | | |
68.17
|
%
| | | | |
82.82
|
%
| | | |
42.62
|
%
| | | |
NM
| | | |
67.58
|
%
|
Forward-Looking Statements
This document contains forward-looking statements within the Private
Securities Litigation Reform Act of 1995. Any statement that does not
describe historical or current facts is a forward-looking statement.
These statements often include the words “believes,” “expects,”
“anticipates,” “estimates,” “intends,” “plans,” “goals,” “targets,”
“initiatives,” “potentially,” “probably,” “projects,” “outlook” or
similar expressions or future conditional verbs such as “may,” “will,”
“should,” “would,” and “could.”
Forward-looking statements are based upon the current beliefs and
expectations of management, and on information currently available to
management. Our statements speak as of the date hereof, and we do not
assume any obligation to update these statements or to update the
reasons why actual results could differ from those contained in such
statements in light of new information or future events. We caution you,
therefore, against relying on any of these forward-looking statements.
They are neither statements of historical fact nor guarantees or
assurances of future performance. While there is no assurance that any
list of risks and uncertainties or risk factors is complete, important
factors that could cause actual results to differ materially from those
in the forward-looking statements include the following, without
limitation:
-
negative economic conditions that adversely affect the general
economy, housing prices, the job market, consumer confidence and
spending habits which may affect, among other things, the level of
nonperforming assets, charge-offs and provision expense;
-
the rate of growth in the economy and employment levels, as well as
general business and economic conditions;
-
our ability to implement our strategic plan, including the cost
savings and efficiency components, and achieve our indicative
performance targets;
-
our ability to remedy regulatory deficiencies and meet supervisory
requirements and expectations;
-
liabilities and business restrictions resulting from litigation and
regulatory investigations;
-
our capital and liquidity requirements (including under regulatory
capital standards, such as the Basel III capital standards) and our
ability to generate capital internally or raise capital on favorable
terms;
-
the effect of the current low interest rate environment or changes in
interest rates on our net interest income, net interest margin and our
mortgage originations, mortgage servicing rights and mortgages held
for sale;
-
changes in interest rates and market liquidity, as well as the
magnitude of such changes, which may reduce interest margins, impact
funding sources and affect the ability to originate and distribute
financial products in the primary and secondary markets;
-
the effect of changes in the level of checking or savings account
deposits on our funding costs and net interest margin;
-
financial services reform and other current, pending or future
legislation or regulation that could have a negative effect on our
revenue and businesses, including the Dodd-Frank Act and other
legislation and regulation relating to bank products and services;
-
a failure in or breach of our operational or security systems or
infrastructure, or those of our third party vendors or other service
providers, including as a result of cyber attacks;
-
management’s ability to identify and manage these and other risks; and
-
any failure by us to successfully replicate or replace certain
functions, systems and infrastructure provided by The Royal Bank of
Scotland Group plc (RBS).
In addition to the above factors, we also caution that the amount and
timing of any future common stock dividends or share repurchases will
depend on our financial condition, earnings, cash needs, regulatory
constraints, capital requirements (including requirements of our
subsidiaries), and any other factors that our board of directors deems
relevant in making such a determination. Therefore, there can be no
assurance that we will pay any dividends to holders of our common stock,
or as to the amount of any such dividends. In addition, the timing and
manner of the sale of RBS’s remaining ownership of our common stock
remains uncertain, and we have no control over the manner in which RBS
may seek to divest such remaining shares. Any such sale would impact the
price of our shares of common stock.
More information about factors that could cause actual results to differ
materially from those described in the forward-looking statements can be
found under “Risk Factors” in Part I, Item 1A in our Annual Report on
Form 10-K for the year ended December 31, 2014, filed with the United
States Securities and Exchange Commission on March 3, 2015.
Note: Percentage changes, per share amounts, and ratios presented in
this document are calculated using whole dollars.
CFG-IR
View source version on businesswire.com: http://www.businesswire.com/news/home/20151023005142/en/
Citizens Financial Group, Inc.
Media:
Jim Hughes,
781-751-5404
or
Investors:
Ellen A. Taylor, 203-900-6854
Source: Citizens Financial Group, Inc.