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First Citizens BancShares Reports Third Quarter 2022 Earnings

RALEIGH, N.C., Oct. 27, 2022 (GLOBE NEWSWIRE) -- First Citizens BancShares, Inc. (“BancShares”) (Nasdaq: FCNCA) reported earnings for the third quarter and year-to-date period ended September 30, 2022.

Chairman and CEO Frank B. Holding, Jr. on third quarter results, "We are pleased with our financial performance during the third quarter and reported net income of $315 million, a 23.5% increase over the prior quarter. We remain focused on merger optimization efforts and achieving our cost savings target. In July, we announced a share repurchase plan that authorized repurchases of up to 1.5 million shares of our Class A common stock. I am pleased to report that as of October 25, 2022, we have repurchased 98.5% of the 1.5 million shares authorized under that share repurchase plan.

"Contributing to higher net income during the quarter was solid top line growth led by continued momentum in loans, net interest margin expansion and solid performance in our fee income producing lines of business. Core revenues outpaced expense growth contributing to a 23.5% increase in sequential quarter pre-provision net revenue. We are pleased that credit quality remained strong as the net charge-off and nonperforming loan ratios both declined during the quarter.”

FINANCIAL HIGHLIGHTS

For the third quarter, net income available to common stockholders was $303 million, or $19.25 per common share, compared to $238 million, or $14.86 per common share in the second quarter of 2022. Third quarter adjusted net income available to common stockholders was $326 million, or $20.77 per common share, up from $270 million, or $16.86 per common share in the second quarter. The following bullets highlight significant changes in the components of net income and adjusted net income between the second and third quarters:

  • Pre-provision net revenue totaled $468 million compared to $379 million in the second quarter. Adjusted pre-provision net revenue totaled $506 million, an increase of $89 million or 21.3% compared to the second quarter due to core net revenue growth exceeding core noninterest expense growth.
  • Net revenue growth was led by a $95 million, or a 13.6% increase in net interest income over the second quarter primarily due to loan growth and higher yields on loans and overnight investments, partially offset by higher funding costs.
  • Net interest margin was 3.40%, an increase of 36 basis points over the second quarter, as the rising interest rate environment increased yields on our earning assets and BancShares had another quarter of strong loan growth, only partially offset by higher rates paid on interest-bearing deposits and higher borrowings.
  • Noninterest income totaled $433 million compared to $424 million in the second quarter. Adjusted noninterest income totaled $288 million compared to $283 million in the second quarter, an increase of $5 million. The increase was primarily due to higher capital markets fees, rental income on operating leases, net and other operating income, partially offset by lower service charges on deposit accounts.
  • Noninterest expense totaled $760 million compared to $745 million in the second quarter. Adjusted noninterest expense totaled $577 million compared to $566 million in the second quarter, an increase of $11 million. The increase was driven primarily by higher personnel costs and higher marketing expenses in the Direct Bank, partially offset by lower FDIC insurance expense and professional fees.
  • Provision for credit losses totaled $60 million compared to $42 million in the second quarter, an increase of $18 million. The increase was primarily due to deterioration in CECL macroeconomic forecasts and loan growth, partially offset by improved credit quality and portfolio mix. Net charge-offs totaled $18 million or a ratio of 0.10% of average loans compared to $22 million or a ratio of 0.13% of average loans during the second quarter.
  • Loans totaled $69.8 billion, an increase of $2.1 billion, or 12.0% on an annualized basis due to strong growth in our branch network and Mortgage as well as in our commercial bank from areas such as Commercial Finance and Business Capital.
  • Deposits totaled $87.6 billion, a decrease of $1.8 billion, or 7.9% on an annualized basis. The main component of the decline was a $1.8 billion reduction in interest-bearing deposits as we saw our more sensitive customers move funds in response to continued rate increases. The reductions were primarily concentrated in acquired branches and commercial banking, partially offset by growth in our Direct Bank.
  • Borrowings increased $3.9 billion during the quarter to support loan growth and offset declines in interest-bearing deposits.

EARNINGS CALL DETAILS
BancShares will host a conference call to discuss the company's financial results on Thursday, October 27, 2022, at 8:30 a.m. Eastern time.

To access this call, dial:

United States: 1-833-927-1758
Canada: 1-833-950-0062
All other locations: 1-929-526-1599

Access code: 355751

The third quarter 2022 earnings presentation and this news release are available on the company’s website at www.firstcitizens.com/investor-relations.

After the conference call, you may access a replay of the call through November 17, 2022, by dialing 1-866-813-9403 (United States), 1-226-828-7578 (Canada) or +44 204-525-0658 (all other locations) using the access code 319469.

ABOUT FIRST CITIZENS BANCSHARES
First Citizens BancShares, Inc. is the financial holding company for First-Citizens Bank & Trust Company (“First Citizens Bank”). In January 2022, First Citizens BancShares and CIT Group Inc. merged, creating one of the top 20 U.S. financial institutions, with more than $100 billion in assets.

First Citizens Bank helps personal, business, commercial and wealth clients build financial strength that lasts. As the largest family-controlled bank in the United States, First Citizens is continuing a unique legacy of strength, stability and long-term thinking that has spanned generations. Its commercial banking segment brings a wide array of best-in-class lending, leasing and banking services to middle-market companies and small businesses from coast to coast. Founded in 1898 and headquartered in Raleigh, N.C., First Citizens also operates a nationwide direct bank and a network of more than 550 branches in 22 states, many in high-growth markets. Visit firstcitizens.com. First Citizens Bank. Forever First®

FORWARD-LOOKING STATEMENTS
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and future performance of BancShares. Words such as “anticipates,” “believes,” “estimates,” “expects,” “predicts,” “forecasts,” “intends,” “plans,” “projects,” “targets,” “designed,” “could,” “may,” “should,” “will,” “potential,” “continue”, “aims” or other similar words and expressions are intended to identify these forward-looking statements. These forward-looking statements are based on BancShares’ current expectations and assumptions regarding BancShares’ business, the economy, and other future conditions.

Because forward-looking statements relate to future results and occurrences, they are subject to inherent risks, uncertainties, changes in circumstances and other risk factors that are difficult to predict. Many possible events or factors could affect BancShares’ future financial results and performance and could cause the actual results, performance or achievements of BancShares to differ materially from any anticipated results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, general competitive, economic, political, geopolitical events (including the military conflict between Russia and Ukraine) and market conditions, the impacts of the global COVID-19 pandemic on BancShares’ business and customers, the financial success or changing conditions or strategies of BancShares’ customers or vendors, fluctuations in interest rates, actions of government regulators, including the recent and projected interest rate hikes by the Board of Governors of the Federal Reserve Board (the “Federal Reserve”), the potential impact of decisions by the Federal Reserve on BancShares’ capital plans, adverse developments with respect to U.S. or global economic conditions, including the significant turbulence in the capital or financial markets, the impact of the current inflationary environment, the impact of implementation and compliance with current or proposed laws, regulations and regulatory interpretations, the availability of capital and personnel, and the failure to realize the anticipated benefits of BancShares’ previous acquisition transaction(s), including the recently completed transaction with CIT, which acquisition risks include (1) disruption from the transaction, or recently completed mergers, with customer, supplier or employee relationships, (2) the possibility that the amount of the costs, fees, expenses and charges related to the transaction may be greater than anticipated, including as a result of unexpected or unknown factors, events or liabilities, (3) reputational risk and the reaction of the parties’ customers to the transaction, (4) the risk that the cost savings and any revenue synergies from the transaction may not be realized or take longer than anticipated to be realized and (5) difficulties experienced in the integration of the businesses.

Except to the extent required by applicable laws or regulations, BancShares disclaims any obligation to update forward-looking statements or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Additional factors which could affect the forward-looking statements can be found in BancShares’ Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and its other filings with the Securities and Exchange Commission (the “SEC”).

NON-GAAP MEASURES
Certain measures in this release and supporting tables, including those referenced as “Adjusted” are "Non-GAAP”, meaning they are not presented in accordance with generally accepted accounting principles in the U.S. and also are not codified in U.S. banking regulations currently applicable to BancShares. BancShares believes that Non-GAAP financial measures, when reviewed in conjunction with GAAP financial information, can provide transparency about or an alternative means of assessing its operating results and financial position to its investors, analysts and management. The Non-GAAP measures are reconciled to the most comparable GAAP measure, in the Non-GAAP reconciliation table(s) and notable items are summarized in a separate table.

Dollars in millions, except per share data
   BancShares BancShares BancShares BancShares BancShares
  QTDQTDQTDYTDYTD
Summary Financial Data & Key Metrics 9/30/226/30/229/30/219/30/229/30/21
Results of Operations:      
Net interest income$795 700 347 2,144 1,033 
Provision (benefit) for credit losses 60 42 (1)566 (32)
Net interest income after provision for credit losses 735 658 348 1,578 1,065 
Noninterest income 433 424 124 1,707 394 
Noninterest expense 760 745 314 2,315 911 
Income before income taxes 408 337 158 970 548 
Income tax expense 93 82 34 129 124 
Net income 315 255 124 841 424 
Preferred stock dividends 12 17 5 36 14 
Net income available to common stockholders 303 238 119 805 410 
Adjusted net income available to common stockholders(1) 326 270 118 895 383 
Pre-tax, pre-provision net revenue (PPNR)(1) 468 379 157 1,536 516 
       
Per Share Information:      
Diluted earnings per common share (EPS)$19.25 14.86 12.17 50.70 41.79 
Adjusted diluted earnings per common share (EPS)(1) 20.77 16.86 12.04 56.41 39.03 
Book value per common share 597.75 609.95 432.07 597.75 432.07 
Tangible book value per common share (TBV)(1) 564.97 578.92 394.15 564.97 394.15 
       
Key Performance Metrics:      
Return on average assets (ROA) 1.16%0.95%0.88%1.03%1.05%
Adjusted ROA(1) 1.24 1.07 0.87 1.15 0.98 
PPNR ROA(1) 1.72 1.41 1.11 1.89 1.28 
Adjusted PPNR ROA(1) 1.86 1.56 1.10 1.58 1.19 
Return on average common equity (ROE) 12.49 9.87 11.29 11.18 13.50 
Adjusted ROE(1) 13.47 11.19 11.18 12.44 12.61 
Return on average tangible common equity (ROTCE)(1) 13.17 10.40 12.39 11.80 14.88 
Adjusted ROTCE(1) 14.20 11.80 12.27 13.13 13.89 
Efficiency ratio(1) 53.32 57.55 66.09 57.25 64.69 
Net interest margin (NIM)(2) 3.40 3.04 2.61 3.06 2.69 
       
Select Balance Sheet Items at Period End:      
Total investment securities$18,841 19,136 10,875 18,841 10,875 
Total loans and leases 69,790 67,735 32,516 69,790 32,516 
Total operating lease equipment, net 7,984 7,971  7,984  
Total deposits 87,553 89,329 50,065 87,553 50,065 
Total borrowings 8,343 4,459 1,883 8,343 1,883 
Loan to deposit ratio 79.71%75.83%64.95%79.71%64.95%
Noninterest-bearing deposits to total deposits 30.37%29.75%42.97%30.37%42.97%
       
Capital Ratios at Period End: (3)      
Total risk-based capital ratio 13.46%14.46%14.30%13.46%14.30%
Tier 1 risk-based capital ratio 11.36 12.37 12.32 11.36 12.32 
Common equity Tier 1 ratio 10.37 11.34 11.34 10.37 11.34 
Tier 1 leverage capital ratio 9.31 9.85 7.68 9.31 7.68 
       
Asset Quality at Period End:      
Nonaccrual loans to total loans and leases 0.65%0.76%0.50%0.65%0.50%
Allowance for credit losses (ACL) to loans and leases 1.26 1.26 0.56 1.26 0.56 
Net charge-off ratio 0.10 0.13 0.06 0.11 0.04 
       
(1) Denotes a non-GAAP measure. Refer to the non-GAAP reconciliation subsequently included in these materials for a reconciliation to the most directly comparable GAAP measure. “Adjusted” items exclude the impact of Notable Items.
(2) Calculated net of average credit balances of factoring clients.
(3) Capital ratios for the current quarter are preliminary pending completion of quarterly regulatory filings.
 


Dollars in millions, except share and per share data
   BancShares BancShares BancShares BancShares BancShares
  QTDQTDQTDYTDYTD
Income Statement (unaudited)  9/30/226/30/229/30/219/30/229/30/21
Interest income      
Interest and fees on loans$785 655 320 2,061 967 
Interest on investment securities 90 89 40 262 106 
Interest on deposits at banks 31 13 3 50 7 
Total interest income 906 757 363 2,373 1,080 
Interest expense      
Deposits 78 42 8 159 25 
Borrowings 33 15 8 70 22 
Total interest expense 111 57 16 229 47 
Net interest income 795 700 347 2,144 1,033 
Provision (benefit) for credit losses 60 42 (1)566 (32)
Net interest income after provision for credit losses 735 658 348 1,578 1,065 
Noninterest income      
Rental income on operating leases 219 213  640  
Fee income and other service charges 44 39 10 118 31 
Wealth management services 35 37 32 107 96 
Service charges on deposit accounts 21 28 26 77 69 
Factoring commissions 24 27  78  
Cardholder services, net 25 26 23 76 65 
Merchant services, net 8 9 9 27 26 
Insurance commissions 11 11 4 34 12 
Realized gain on sale of investment securities available for sale, net   8  33 
Fair value adjustment on marketable equity securities, net (2)(6)3 (5)31 
Bank-owned life insurance 8 9 1 25 2 
Gain on sale of leasing equipment, net 2 5  13  
Gain on acquisition    431  
Gain on extinguishment of debt 1   7  
Other noninterest income 37 26 8 79 29 
Total noninterest income 433 424 124 1,707 394 
Noninterest expense      
Depreciation on operating lease equipment 87 89  257  
Maintenance and other operating lease expenses 52 47  142  
Salaries and benefits 351 341 194 1,044 566 
Net occupancy expense 47 48 29 144 87 
Equipment expense 55 54 30 161 89 
Professional fees 13 15 5 44 13 
Third-party processing fees 27 26 16 77 44 
FDIC insurance expense 5 9 3 26 10 
Marketing 15 9 3 32 7 
Merger-related expenses 33 34 7 202 20 
Intangible asset amortization 5 6 3 17 9 
Other noninterest expense 70 67 24 169 66 
Total noninterest expense 760 745 314 2,315 911 
Income before income taxes 408 337 158 970 548 
Income tax expense 93 82 34 129 124 
Net income$315 255 124 841 424 
Preferred stock dividends 12 17 5 36 14 
Net income available to common stockholders$303 238 119 805 410 
       
Basic earnings per common share$19.27 14.87 12.17 50.76 41.79 
Diluted earnings per common share $19.25 14.86 12.17 50.70 41.79 
Weighted average common shares outstanding (basic) 15,711,976 16,023,613 9,816,405 15,851,385 9,816,405 
Weighted average common shares outstanding (diluted) 15,727,993 16,035,090 9,816,405 15,870,233 9,816,405 



Dollars in millions
  BancSharesBancShares BancShares
Balance Sheet (unaudited)  9/30/226/30/229/30/21
Assets    
Cash and due from banks$481 583 337 
Interest-earning deposits at banks 6,172 6,476 9,875 
Investments in marketable equity securities 92 94 123 
Investment securities available for sale 9,088 9,210 7,371 
Investment securities held to maturity 9,661 9,832 3,381 
Assets held for sale 21 38 98 
Loans and leases 69,790 67,735 32,516 
Allowance for credit losses (882)(850)(183)
Loans and leases, net of allowance for credit losses 68,908 66,885 32,333 
Operating lease equipment, net 7,984 7,971  
Premises and equipment, net 1,410 1,415 1,231 
Bank-owned life insurance 1,342 1,334 116 
Goodwill 346 346 350 
Other intangible assets 145 150 22 
Other assets 3,660 3,339 1,665 
Total assets$109,310 107,673 56,902 
     
Liabilities    
Deposits:    
Noninterest-bearing$26,587 26,576 21,514 
Interest-bearing 60,966 62,753 28,551 
Total deposits 87,553 89,329 50,065 
Credit balances of factoring clients 1,147 1,070  
Borrowings:    
Short-term borrowings 3,128 646 664 
Long-term borrowings 5,215 3,813 1,219 
Total borrowings 8,343 4,459 1,883 
Other liabilities 2,434 2,173 372 
Total liabilities$99,477 97,031 52,320 
     
Stockholders’ equity    
Preferred stock 881 881 340 
Common stock:    
Class A - $1 par value 14 15 9 
Class B - $1 par value 1 1 1 
Additional paid in capital 4,506 5,345  
Retained earnings 5,160 4,865 4,264 
Accumulated other comprehensive loss (729)(465)(32)
Total stockholders’ equity 9,833 10,642 4,582 
Total liabilities and stockholders’ equity$109,310 107,673 56,902 
     



Dollars in millions, except share per share data
  BancSharesBancSharesBancSharesBancSharesBancShares
  QTDQTDQTDYTDYTD
Notable Items (1) 9/30/226/30/229/30/219/30/229/30/21
Noninterest income      
Rental income on operating leases, net(2)$(139)(136) (399) 
Realized gain on sale of investment securities available for sale, net   (8) (33)
Fair value adjustment on marketable equity securities, net 2 6 (3)5 (31)
Gain on sale of leasing equipment, net (2)(5) (13) 
Gain on acquisition    (431) 
Gain on extinguishment of debt (1)  (7) 
Gain on other loan and asset sales (5)(6) (11) 
Noninterest income - total adjustments$        (145)        (141)        (11)        (856)        (64)
Noninterest expense      
Depreciation on operating lease equipment (2) (87)(89) (257) 
Maintenance and other operating lease equipment expense (2) (52)(47) (142) 
Merger-related expenses (33)(34)(7)(202)(20)
Intangible asset amortization (5)(6)(3)(17)(9)
Other noninterest expense (6)(3) 18  
Noninterest expense - total adjustments$        (183)        (179)        (10)        (600)        (29)
Day 2 provision, including provision for unfunded commitments    (513) 
Provision for credit losses - total adjustments$        —                 —                 —                 (513)        —         
Impact of notable items on pre-tax income$38 38 (1)257 (35)
Income tax impact (3) 15 6  167 (8)
Impact of notable items on net income$23 32 (1)90 (27)
Impact of notable items on basic and diluted EPS 1.52 2.00 (0.13)5.71 (2.76)
       
 
(1) The notable items above reconcile the GAAP net income to adjusted net income, which is a non-GAAP measure.
(2) Rental income on operating leases is net of depreciation and maintenance expense.
(3) Includes the impact of tax discrete items and changes in the estimated annualized effective tax rate.
       


Dollars in millions, except share and per share data
Condensed Income Statement (unaudited) - Adjusted for Notable Items (1) BancShares
BancShares
BancSharesBancShares
BancShares
 QTD
QTD
QTDYTD
YTD
 9/30/22
6/30/22
9/30/219/30/22
9/30/21
Interest income$906 757 363 2,373 1,080 
Interest expense 111 57 16 229 47 
Net interest income 795 700 347 2,144 1,033 
Provision (benefit) for credit losses 60 42 (1)53 (32)
Net interest income after provision for credit losses 735 658 348 2,091 1,065 
Noninterest income 288 283 113 851 330 
Noninterest expense 577 566 304 1,715 882 
Income before income taxes 446 375 157 1,227 513 
Income tax expense 108 88 34 296 116 
Net income$338 287 123 931 397 
Preferred stock dividends 12 17 5 36 14 
Net income available to common stockholders$326 270 118 895 383 
          
Basic earnings per common share $20.79 16.87 12.04 56.47 39.03 
Diluted earnings per common share$20.77 16.86 12.04 56.41 39.03 
Weighted average common shares outstanding (basic) 15,711,976 16,023,613 9,816,405 15,851,385 9,816,405 
Weighted average common shares outstanding (diluted) 15,727,993 16,035,090 9,816,405 15,870,233 9,816,405 
            
(1) The GAAP income statements are included previously in these materials. The adjusted income statements above reflect non-GAAP items (including core adjusted noninterest income and expense) as the impacts of the notable items are excluded. The notable items included previously in this release reconcile the GAAP net income to adjusted net income, which is a non-GAAP measure.
            


Dollars in millions
  BancShares
BancShares
BancShares
Loans & Leases by Class (end of period) 9/30/22
6/30/22
9/30/21
Loans & Leases by Class       
Commercial       
Commercial construction$2,752 2,783 1,370 
Owner-occupied commercial mortgages 14,053 13,795 11,745 
Non-owner-occupied commercial mortgages 9,683 9,167 3,077 
Commercial and industrial 24,288 23,554 6,068 
Leases 2,184 2,178 287 
Total commercial$52,960 51,477 22,547 
        
Consumer       
Residential mortgage$12,910 12,441 6,122 
Revolving mortgage 1,923 1,893 1,861 
Consumer auto 1,385 1,338 1,350 
Consumer other 612 586 636 
Total consumer$16,830 16,258 9,969 
Total loans and leases$69,790 67,735 32,516 
Less: Allowance for credit losses 882 850 183 
Total loans and leases, net of allowance for credit losses$68,908 66,885 32,333 
        
 
  BancShares
BancShares
BancShares
Deposits by Type (end of period) 9/30/22
6/30/22
9/30/21
Demand$26,587 26,645 21,514 
Checking with interest 16,118 16,285 11,769 
Money market 21,818 24,699 10,146 
Savings 14,722 13,319 4,063 
Time 8,308 8,381 2,573 
Total deposits$87,553 89,329 50,065 
        



Dollars in millions
  BancSharesBancSharesBancSharesBancSharesBancShares
  QTDQTDQTDYTDYTD
Credit Quality & Allowance 9/30/226/30/229/30/219/30/229/30/21
Nonaccrual loans$454 513 164 454 164 
Ratio of nonaccrual loans to total loans 0.65%0.76%0.50%0.65%0.50%
       
Charge-offs$(33)(41)(11)(107)(27)
Recoveries 15 19 6 52 17 
Net charge-offs$(18)(22)(5)(55)(10)
Net charge-off ratio 0.10%0.13%0.06%0.11%0.04%
       
Allowance for credit losses to loans ratio 1.26%1.26%0.56%1.26%0.56%
       
Allowance for credit losses - beginning$850 848 189 178 225 
Initial PCD ACL  (12) 272  
Day 2 provision, excluding provision for unfunded commitments    454  
Provision (benefit) for credit losses 50 36 (1)33 (32)
Net charge-offs (18)(22)(5)(55)(10)
Allowance for credit losses - ending$882 850 183 882 183 
       



Dollars in millions   
Average Balance SheetBancShares QTD 9/30/22BancShares QTD 6/30/22BancShares QTD 9/30/21
Avg
Balance
Income/
Expense
Yield/
Rate
Avg
Balance
Income/
Expense
Yield/
Rate
Avg
Balance
Income/
Expense
Yield/
Rate
Loans and leases (1) (2)$67,733 $7854.58%$65,298 $6554.01%$32,708 $3203.85%
Total investment securities 19,119  901.88  19,185  891.85  10,708  401.47 
Interest-earning deposits at banks 5,685  312.17  7,629  130.72  8,956  30.15 
Total interest-earning assets (2)$92,537 $9063.87%$92,112 $7573.28%$52,372 $3632.73%
          
Operating lease equipment, net (including held for sale)$7,981   $7,973   $   
Cash and due from banks 489    524    365   
Allowance for credit losses (851)   (849)   (190)  
All other non-interest-earning assets 7,831    7,815    3,377   
Total assets$107,987   $107,575   $55,924   
Interest-bearing deposits:         
Checking with interest$16,160 $70.17%$16,503 $40.12%$11,324 $10.05%
Money market 22,993  320.55  25,468  180.28  9,866  20.09 
Savings 13,956  280.78  13,303  110.34  3,979  10.03 
Time deposits 8,436  110.54  8,796  90.38  2,599  40.61 
Total interest-bearing deposits 61,545  780.50  64,070  420.26  27,768  80.12 
Borrowings:         
Securities sold under customer repurchase agreements 617  10.16  627  0.16  672  0.21 
Short-term FHLB borrowings 1,188  82.57         
Short-term borrowings 1,805  91.74  627  0.16  672  0.21 
Federal Home Loan Bank borrowings 1,784  112.45  386  21.64  646  41.28 
Senior unsecured borrowings 898  52.00  894  42.05     
Subordinated debt 1,054  83.21  1,057  83.06  497  33.35 
Other borrowings 67  4.51  83  12.46  79  11.24 
Long-term borrowings 3,803  242.59  2,420  152.43  1,222  82.12 
Total borrowings 5,608  332.32  3,047  151.96  1,894  81.44 
Total interest-bearing liabilities$67,153 $1110.65%$67,117 $570.34%$29,662 $160.20%
          
Noninterest-bearing deposits$26,877   $26,551   $21,339   
Credit balances of factoring clients 1,089    1,189       
Other noninterest-bearing liabilities 2,369    2,151    362   
Stockholders' equity 10,499    10,567    4,561   
Total liabilities and stockholders' equity$107,987   $107,575   $55,924   
          
Net interest income $795  $700  $347 
Net interest spread (2)  3.22%  2.94%  2.53%
Net interest margin (2)  3.40%  3.04%  2.61%
          
(1) Loans and leases include non-PCD and PCD loans, nonaccrual loans and held for sale. Interest income on loans and leases includes accretion income and loan fees.
(2) The balance and rate presented is calculated net of average credit balances of factoring clients.
 


Dollars in millions
Average Balance SheetBancShares YTD 9/30/22BancShares YTD 9/30/21
Avg
Balance
Income/
Expense
Yield/
Rate
Avg
Balance
Income/
Expense
Yield/
Rate
Loans and leases (1) (2)$65,739 $2,0614.17%$32,985 $9673.89%
Total investment securities 19,264  2621.81  10,337  1061.36 
Interest-earning deposits at banks 8,242  500.81  7,560  70.12 
Total interest-earning assets(2)$93,245 $2,3733.39%$50,882 $1,0802.81%
       
Operating lease equipment, net (including held for sale)$7,960   $   
Cash and due from banks 517    354   
Allowance for credit losses (871)   (208)  
All other non-interest-earning assets 7,792    2,899   
Total assets$108,643   $53,927   
Interest-bearing deposits:      
Checking with interest$16,437 $160.14%$11,010 $40.05%
Money market 24,875  650.35  9,489  70.11 
Savings 13,640  480.47  3,748  10.03 
Time deposits 9,004  300.45  2,692  130.63 
Total interest-bearing deposits 63,956  1590.33  26,939  250.13 
Borrowings:      
Securities sold under customer repurchase agreements 615  10.16  664  10.21 
Short-term FHLB borrowings 400  82.57     
Short-term borrowings 1,015  91.11  664  10.21 
Federal Home Loan Bank borrowings 941  152.07  649  71.28 
Senior unsecured borrowings 1,497  211.83     
Subordinated debt 1,057  243.07  497  103.36 
Other borrowings 79  12.86  83  41.22 
Long-term borrowings 3,574  612.29  1,229  212.12 
Total borrowings 4,589  702.03  1,893  221.45 
Total interest-bearing liabilities$68,545 $2290.45%$28,832 $470.21%
       
Noninterest-bearing deposits$26,253   $20,316   
Credit balances of factoring clients 1,146       
Other noninterest-bearing liabilities 2,202    352   
Stockholders' equity 10,497    4,427   
Total liabilities and stockholders' equity$108,643   $53,927   
       
Net interest income $2,144  $1,033 
Net interest spread (2)  2.94%  2.60%
Net interest margin (2)  3.06%  2.69%
       
(1) Loans and leases include non-PCD and PCD loans, nonaccrual loans and held for sale. Interest income on loans and leases includes accretion income and loan fees.
(2) The balance and rate presented is calculated net of average credit balances of factoring clients.
 


Dollars in millions, except share and per share data
    BancSharesBancSharesBancSharesBancSharesBancShares
    QTDQTDQTDYTDYTD
Non-GAAP Reconciliations   9/30/226/30/229/30/219/30/229/30/21
         
Net income and EPS        
Net income (GAAP) a$315 255 124 841 424 
Preferred stock dividends   12 17 5 36 14 
Net income available to common stockholders (GAAP) b 303 238 119 805 410 
Total notable items, after income tax c 23 32 (1)90 (27)
Adjusted net income (non-GAAP) d = (a+c) 338 287 123 931 397 
Adjusted net income available to common stockholders (non-GAAP) e = (b+c)$326 270 118 895 383 
Weighted average common shares outstanding        
Basic f 15,711,976 16,023,613 9,816,405 15,851,385 9,816,405 
Diluted g 15,727,993 16,035,090 9,816,405 15,870,233 9,816,405 
EPS (GAAP)        
Basic b/f$19.27 14.87 12.17 50.76 41.79 
Diluted b/g 19.25 14.86 12.17 50.70 41.79 
Adjusted EPS (non-GAAP)        
Basic e/f$20.79 16.87 12.04 56.47 39.03 
Diluted e/g 20.77 16.86 12.04 56.41 39.03 
         
Noninterest income and expense        
Noninterest income h$433 424 124 1,707 394 
Impact of notable items, before income tax   (145)(141)(11)(856)(64)
Adjusted or core noninterest income i$288 283 113 851 330 
         
Noninterest expense j$760 745 314 2,315 911 
Impact of notable items, before income tax   (183)(179)(10)(600)(29)
Adjusted or core noninterest expense k$577 566 304 1,715 882 
         
Provision (benefit) for credit losses        
Provision (benefit) for credit losses  $60 42 (1)566 (32)
Plus: Day 2 provision for credit losses      (513) 
Adjusted provision (benefit) for credit losses  $60 42 (1)53 (32)
         
PPNR        
Net income (GAAP) a$315 255 124 841 424 
Plus:        
Provision (benefit) for credit losses   60 42 (1)566 (32)
Income tax expense (benefit)   93 82 34 129 124 
PPNR (non-GAAP) l$468 379 157 1,536 516 
Plus: total notable items, before income tax   38 38 (1)(256)(35)
Adjusted PPNR (non-GAAP) m$506 417 156 1,280 481 
         
         
Note: Certain items above do not precisely recalculate as presented due to rounding.
         
Dollars in millions, except share and per share data
    BancSharesBancSharesBancSharesBancSharesBancShares
    QTDQTDQTDYTDYTD
Non-GAAP Reconciliations (continued)    9/30/226/30/229/30/219/30/229/30/21
         
ROA        
Net income (GAAP) a$315 255 124 841 424 
Annualized net income n = a annualized 1,250 1,023 492 1,124 567 
Adjusted net income (non-GAAP) d 338 287 123 931 397 
Annualized adjusted net income p = d annualized 1,341 1,151 488 1,245 531 
Average assets o 107,987 107,575 55,924 108,643 53,927 
ROA n/o 1.16%0.95%0.88%1.03%1.05%
Adjusted ROA p/o 1.24%1.07%0.87%1.15%0.98%
         
PPNR ROA        
PPNR (non-GAAP) l$468 379 157 1,536 516 
Annualized PPNR q = l annualized 1,858 1,519 623 2,054 690 
Adjusted PPNR (non-GAAP) m 506 417 156 1,280 481 
Annualized PPNR r = m annualized 2,009 1,672 621 1,712 643 
PPNR ROA q/o 1.72%1.41%1.11%1.89%1.28%
Adjusted PPNR ROA r/o 1.86%1.56%1.10%1.58%1.19%
         
ROE and ROTCE        
Annualized net income available to common shareholders s = b annualized$1,202 955 472 1,076 548 
Annualized adjusted net income available to common shareholders t = e annualized$1,293 1,083 468 1,197 512 
Average stockholders' equity (GAAP)  $10,499 10,567 4,561 10,497 4,427 
Less: average preferred stock   881 881 340 877 340 
Average common stockholders' equity (non-GAAP) u$9,618 9,686 4,221 9,620 4,087 
Less: average goodwill   346 346 350 346 350 
Less: average other intangible assets   148 153 24 161 26 
Average tangible common equity (non-GAAP) v$9,124 9,186 3,847 9,113 3,711 
ROE s/u 12.49%9.87%11.29%11.18%13.50%
Adjusted ROE t/u 13.47%11.19%11.18%12.44%12.61%
ROTCE s/v 13.17%10.40%12.39%11.80%14.88%
Adjusted ROTCE t/v 14.20%11.80%12.27%13.13%13.89%
         
Tangible common equity to tangible assets        
Stockholders' equity (GAAP) w$9,833 10,642 4,582 9,833 4,582 
Less: preferred stock   881 881 340 881 340 
Common equity (non-GAAP) x$8,952 9,761 4,242 8,952 4,242 
Less: goodwill   346 346 350 346 350 
Less: other intangible assets   145 150 22 145 22 
Tangible common equity (non-GAAP) y$8,461 9,265 3,870 8,461 3,870 
Total assets (GAAP) z 109,310 107,673 56,902 109,310 56,902 
Tangible assets (non-GAAP) aa 108,819 107,177 56,530 108,819 56,530 
Total equity to total assets w/z 9.00%9.88%8.05%9.00%8.05%
Tangible common equity to tangible assets (non-GAAP) y/aa 7.78%8.64%6.84%7.78%6.84%
         
Note: Certain items above do not precisely recalculate as presented due to rounding.
 
Dollars in millions, except share and per share data
    BancSharesBancSharesBancSharesBancSharesBancShares
    QTDQTDQTDYTDYTD
Non-GAAP Reconciliations (continued)    9/30/226/30/229/30/219/30/229/30/21
         
Book value and tangible book value per common share        
Common shares outstanding at period end bb 14,976,127 16,002,385 9,816,405 14,976,127 9,816,405 
Book value per share x/bb$597.75 609.95 432.07 597.75 432.07 
Tangible book value per share y/bb$564.97 578.92 394.15 564.97 394.15 
         
Efficiency ratio        
Net interest income cc$795 700 347 2,144 1,033 
Efficiency ratio (GAAP) j / (h + cc) 61.91%66.34%66.58%60.11%63.81%
Adjusted efficiency ratio (non-GAAP)(1) k / (i + cc) 53.32%57.55%66.09%57.25%64.69%
         
         
Note: Certain items above do not precisely recalculate as presented due to rounding.
 


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 Investor RelationsCorporate Communications
 919-716-2137919-716-2716


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