Link/Page Citation
Bloomberg - Goldman Says Key Istanbul Vote to Have Positive Impact on Lira - 29/3/2024
Goldman Sachs Group Inc. analysts believe that the high-stakes municipal vote in Istanbul on Sunday will have a positive impact.
For the complete story, see:
https://www.bloomberg.com/news/articles/2024-03-29/goldman-says-key-istanbul-vote-to-have-positive-impact-on-lira
Reuters - Goldman, Morgan Stanley win dismissal of lawsuits over Archegos collapse - 28/3/2024
A U.S. judge on Thursday dismissed seven lawsuits by investors who accused Goldman Sachs Group Inc, opens new tab and Morgan Stanley, opens new tab of misconduct that fueled the rapid March 2021 collapse of Bill Hwang's $36 billion firm Archegos Capital Management.
For the complete story, see:
https://www.reuters.com/legal/goldman-morgan-stanley-win-dismissal-lawsuits-over-archegos-collapse-2024-03-28/
Reuters - JPMorgan bets on new wealth planning tool to draw investments - 27/3/2024
JPMorgan Chase seeks to expand the reach of its wealth management business and bring in more investments by offering a new planning tool to its 54 million Chase retail customers.
For the complete story, see:
https://www.reuters.com/business/finance/jpmorgan-bets-new-wealth-planning-tool-draw-investments-2024-03-27/
Other Stories
American Banker - New Bank of America platform connects small businesses with CDFIs - 27/3/2024
CNBC - Wells Fargo announces a new travel rewards card, the Autograph Journey - get 60,000 transferrable points and much more - 27/3/2024
Reuters - Walmart can end Capital One credit card partnership early, US judge rules - 26/3/2024
Reuters - Citigroup to end sweeping overhaul this week after 5000 layoffs - 25/3/2024
WSJ - Morgan Stanley Raises a Fund to Hold World 50 for Longer - 25/3/2024
Media Releases
Citigroup Inc. (NYSE: C) - Citi's Approach to Climate Change and Net Zero - 28/3/2024
Morgan Stanley (NYSE: MS) - Morgan Stanley Wins Three 2024 Technology Awards in Generative AI, Fractional Shares, and Portfolio Risk Management - 27/3/2024
Bank of America Corporation (NYSE: BAC) - New BofA Platform Connects Small Businesses to CDFI Capital and Coaching - 27/3/2024
Goldman Sachs Group Inc. (NYSE: GS) - Goldman Sachs ETF Accelerator Announces New Fund Launched Through the Platform with the Listing of Eagle Capital Management's First ETF - 25/3/2024
Bank of America Corporation (NYSE: BAC) - Runners Kick Off the Spring Running Season at the 43rd Bank of America Shamrock Shuffle - 25/3/2024
Latest Research
Keynote Speech and Dialogue: Global Financial Turbulence and Changes in the World Order - By Jiandong Ju
Industry Overview
United States Banking Industry
Federal Reserve System
Federal Deposit Insurance Corporation
Overviews of Leading Companies
Bank of America Corporation (NYSE: BAC)
Bank of New York Mellon Corporation (NYSE: BK)
BB&T Corporation Inc. (NYSE: TFC)
Capital One Financial Corporation (NYSE: COF)
Citigroup Inc. (NYSE: C)
Goldman Sachs Group Inc. (NYSE: GS)
HSBC USA Inc. (LSE: HSBA, HKEX: 5, BSX: HSBC)
JPMorgan Chase & Co. (NYSE: JPM)
Morgan Stanley (NYSE: MS)
PNC Financial Services Group Inc. (NYSE: PNC)
State Street Corporation (NYSE: STT)
SunTrust Banks Inc. (NYSE: TFC)
TD Group US Holdings LLC (NYSE: TD, TSX: TD)
Truist Financial Corporation (NYSE: TFC)
U.S. Bancorp (NYSE: USB)
Wells Fargo & Company (NYSE: WFC)
Associate: Laura Eva
News and Commentary
Bloomberg - Goldman Says Key Istanbul Vote to Have Positive Impact on Lira - 29/3/2024
Goldman Sachs Group Inc. analysts believe that the high-stakes municipal vote in Istanbul on Sunday will have a positive impact.
For the complete story, see:
https://www.bloomberg.com/news/articles/2024-03-29/goldman-says-key-istanbul-vote-to-have-positive-impact-on-lira
Reuters - Goldman, Morgan Stanley win dismissal of lawsuits over Archegos collapse - 28/3/2024
A U.S. judge on Thursday dismissed seven lawsuits by investors who accused Goldman Sachs Group Inc, opens new tab and Morgan Stanley, opens new tab of misconduct that fueled the rapid March 2021 collapse of Bill Hwang's $36 billion firm Archegos Capital Management.
For the complete story, see:
https://www.reuters.com/legal/goldman-morgan-stanley-win-dismissal-lawsuits-over-archegos-collapse-2024-03-28/
Reuters - JPMorgan bets on new wealth planning tool to draw investments - 27/3/2024
JPMorgan Chase seeks to expand the reach of its wealth management business and bring in more investments by offering a new planning tool to its 54 million Chase retail customers.
For the complete story, see:
https://www.reuters.com/business/finance/jpmorgan-bets-new-wealth-planning-tool-draw-investments-2024-03-27/
American Banker - New Bank of America platform connects small businesses with CDFIs - 27/3/2024
Bank of America is taking another step to connect small businesses with more financing options.
For the complete story, see:
https://www.americanbanker.com/news/new-bank-of-america-platform-connects-small-businesses-with-cdfis
CNBC - Wells Fargo announces a new travel rewards card, the Autograph Journey - get 60,000 transferrable points and much more - 27/3/2024
Wells Fargo is making a splash in the credit card space with its brand-new travel rewards card and a revamped rewards program.
For the complete story, see:
https://www.cnbc.com/select/new-wells-fargo-autograph-journey-card/
Reuters - Walmart can end Capital One credit card partnership early, US judge rules - 26/3/2024
A federal judge ruled on Tuesday that Walmart, opens new tab can end its credit card partnership with Capital One, opens new tab early because the bank failed to provide the required level of customer service.
For the complete story, see:
https://www.reuters.com/legal/walmart-can-end-capital-one-credit-card-partnership-early-us-judge-rules-2024-03-26/
Reuters - Citigroup to end sweeping overhaul this week after 5000 layoffs - 25/3/2024
Citigroup, opens new tab is in the last phase of a sweeping overhaul to simplify its structure and improve performance, the bank said, after shrinking its workforce by 5,000 employees since September.
For the complete story, see:
https://www.reuters.com/business/finance/citigroup-says-reorganization-has-concluded-2024-03-25/
WSJ - Morgan Stanley Raises a Fund to Hold World 50 for Longer - 25/3/2024
Morgan Stanley's private-equity arm has collected $700 million in commitments to help prolong its control of World 50, an executive-networking business that has expanded rapidly since the firm acquired it as the Covid-19 pandemic began.
For the complete story, see:
https://www.wsj.com/articles/morgan-stanley-raises-a-fund-to-hold-world-50-for-longer-7237b011
Media Releases
Citigroup Inc. (NYSE: C) - Citi's Approach to Climate Change and Net Zero - 28/3/2024
At Citi, we support our clients in navigating their biggest challenges and capturing opportunities for growth and progress. As the macroeconomic and geopolitical challenges continue to multiply and converge, we are seeing more governments and companies prioritize resiliency. This is especially true in our work on climate change and net zero, where we are working side by side with our clients to help them achieve their goals, whilst remaining highly mindful of near-term energy needs and related economic impacts.
From our work with clients in nearly 160 markets, we know that the journey toward net zero will occur at different speeds in every industry and country. We support our clients in financing their transition to low-carbon business models and innovating clean technologies, whilst also supporting clients who supply ample and affordable energy to meet the world's current and future needs. These activities are not mutually exclusive and must be addressed simultaneously.
None of this work is easy and sometimes we need to make difficult decisions. We often speak of the energy transition as if we could trade one technology for another, but what we are experiencing today is more of an energy evolution - a shift over time toward a low-emission energy mix. This shift will not be linear and will include a series of cumulative leaps and tipping points over the next few decades. Our global success will depend on maintaining energy security, increasing resiliency and sustaining economic opportunity around the world.
The evolution of our energy system hinges on many dimensions, including thoughtful public policy that incentivizes investment in clean energy technologies and critical upgrades to our electric grids, transmission systems and permitting processes to catalyze deployment of more projects. Access to stronger and more reliable data also remains an ongoing challenge, and obtaining such data allows us to analyze climate risk impacts, measure results and identify transition opportunities. Given these needs, every aspect of society - governments, corporations, nonprofits and communities - will be part of achieving progress on this journey.
At Citi, this energy evolution is an important area of opportunity for our business and our clients. Energy is a capital-intensive part of our global infrastructure and we expect to see significant finance and advisory work across all critical economic sectors as they adapt.
In our 2023 Citi Climate Report, we provide an update on the progress we are making toward our net zero commitment, how we are managing environmental risk, and detail the impact of our climate strategy over the past year. This work includes:
Lending our expertise and balance sheet to support some of the largest renewables IPOs of the year, the largest-ever global hydrogen IPO and Europe's first battery recycling gigafactory
Ranking as the #1 U.S. lead underwriter in 2023 for global green, social, sustainability and sustainability-linked bonds
Participating in the development of the Sustainable Aluminum Finance Framework to help lenders measure emissions and decarbonization of a hard-to-abate sector
Supporting innovation in sustainable finance, including a solar securitization program to broaden access to clean energy in Kenya for our client Sun King, and the World Bank's emissions-reduction linked bond, which taps the voluntary carbon markets to help reduce emissions and finance school water purifiers in Vietnam
Amidst the challenges of addressing climate change, opportunities for growth and progress abound. By supporting an orderly and inclusive shift to a low-carbon economy, we can confront one of the most complex challenges of our time while delivering value for all our stakeholders.
https://www.citigroup.com/global/news/perspective/2024/citis-approach-to-climate-change-and-net-zero
Morgan Stanley (NYSE: MS) - Morgan Stanley Wins Three 2024 Technology Awards in Generative AI, Fractional Shares, and Portfolio Risk Management - 27/3/2024
Morgan Stanley (NYSE: MS) announced today that it has won three 2024 Celent Model Awards recognizing the Firm's innovative use of technology. The awards include a Model Wealth Manager Award for its AI @ Morgan Stanley Assistant in the Essential and Emerging Technologies category, a Model Wealth Manager Award for its Fractional Share program in the Personalization category, and a Model Risk Manager Award for its Portfolio Risk Platform in the Data and Analytics category.
"Being recognized by Celent for innovation in three categories is a true honor," said Jed Finn, Head of Morgan Stanley Wealth Management. "These awards reflect our expertise in leveraging technology to create tech-forward products and solutions for the benefit of our clients and Financial Advisors."
Celent's Model Wealth Manager awards recognize best practices of technology usage in different areas critical to success in wealth management and is the main award that a financial firm in the industry can receive from Celent. Celent's Model Risk Manager award category recognizes best practices use of technology in financial risk management, operational risk management, cross risk, and financial crime.
The AI @ Morgan Stanley Assistant leverages Open AI's large language model to analyze and synthesize complex information in seconds and to summarize answers for Financial Advisors in an easily digestible format. Designed specifically for and by Morgan Stanley with appropriate controls, AI @ Morgan Stanley Assistant empowers Financial Advisors to ask questions and evaluate large amounts of Morgan Stanley's world-renowned intellectual capital.
Morgan Stanley's enhanced Select Unified Managed Account (UMA®) platform offers fractional shares holding capability for Separately Managed Accounts (SMAs) and Exchange-Traded Funds (ETFs). Fractional Shares allow access to more tax efficient vehicles and professional management with lower initial minimum investments. It also increases the opportunity for diversification* by allowing investors to hold more positions and asset classes within their portfolio.
Morgan Stanley's Portfolio Risk Platform and the risk analytics integrated into their proprietary platform applications help its Financial Advisors leverage dynamic risk insights across thousands of risk factors. Built in partnership with BlackRock and powered by Aladdin ®, Financial Advisors are able to instantly analyze an entire book of business, including assets held away, which helps identify and mitigate risk in client portfolios.
https://www.morganstanley.com/press-releases/morgan-stanley-wins-three-2024-technology-awards
Bank of America Corporation (NYSE: BAC) - New BofA Platform Connects Small Businesses to CDFI Capital and Coaching - 27/3/2024
Bank of America has launched a new Access to Capital Connector, an online platform designed to help entrepreneurs and small business owners start and maintain strong and resilient businesses by linking them directly to local Community Development Financial Institutions (CDFIs) and other business support organizations for capital, coaching and support.
Created in partnership with Community Reinvestment Fund, USA (CRF), a national nonprofit CDFI and long-time Bank of America partner, the new platform enables small business applicants to answer a series of questions to become pre-qualified and presents them with the platform participants best positioned to serve their unique situations. In total, more than 150 CDFIs and other support organizations are participating on the platform, offering capital and resources for entrepreneurs at every stage of their small business journey.
"Thousands of small businesses fail each year because they lack the connections, resources and funding to continue operating," said Sharon Miller, President of Small Business for Bank of America. "Through this longstanding partnership, we aim to help make connections stronger between start-ups, entrepreneurs and funding partners to fuel new ideas, jobs and economic value."
"When small businesses have access to responsible capital and other resources, they create jobs, grow wealth, and provide critical services for communities," said Patrick Davis, SVP of Platform and Technology Services for CRF. "Bank of America has been a strong partner in CRF's efforts to serve entrepreneurs, especially those with a history of underrepresentation. The Access to Capital Connector is the latest example of our collaborative work to support a thriving small business ecosystem by streamlining the connection between small business owners and the CDFIs designed to serve them."
The new platform represents an evolution of the Bank of America Access to Capital Directory series, which was launched in 2021 and has more than 25,000 users and 120,000 views. These resources offer a wide variety of capital sources, including equity, debt, and grant capital.
Bank of America has supported CDFIs for more than 25 years and is the largest private investor in them, with $2 billion in loans, deposits, capital grants and equity investments through more than 250 CDFI partners.
"CDFIs help us extend our reach and provide entrepreneurs with the resources they need to achieve their goals. We have found our extensive network to be highly impactful in fostering economic opportunities for individuals and communities," said Pam Seagle, senior vice president of Inclusive Entrepreneurship for Bank of America.
Bank of America is also the nation's top small business lender, with a total loan portfolio of $43.7 billion as of year-end 2023, according to the FDIC. The bank provides advice, solutions, access to capital and dedicated support to meet the unique needs of 11 million business owner clients.
https://newsroom.bankofamerica.com/content/newsroom/press-releases/2024/03/new-bofa-platform-connects-small-businesses-to-cdfi-capital-and-.html
Goldman Sachs Group Inc. (NYSE: GS) - Goldman Sachs ETF Accelerator Announces New Fund Launched Through the Platform with the Listing of Eagle Capital Management's First ETF - 25/3/2024
Today, Goldman Sachs announced the newest fund launched through Goldman Sachs ETF Accelerator with the listing of the first ETF by Eagle Capital Management, an independent asset manager focused on high quality, value-oriented equities with over $25 billion in assets under management. The Eagle Capital Select Equity ETF (NYSE Arca: EAGL) furthers Eagle's concentrated, high-conviction strategy developed with a fundamental value-oriented approach and a long-term investment horizon.
This announcement marks the fifth ETF launched through Goldman Sachs ETF Accelerator, and the first via separately managed account (SMA) conversion. Built in response to client demand amidst a boom in investor interest in ETFs, Goldman Sachs ETF Accelerator is a first-to-market institutional and outsourced solution that enables clients to quickly and efficiently launch, list, and manage their ETFs, providing services across fund launch and integration into the ETF ecosystem, along with portfolio implementation and capital markets solutions.
"Since day one, our focus has remained on providing our clients the tools, expertise, and infrastructure needed to enter the fast-growing ETF space in a way that enables them to drive forward their unique strategies and meet demand from their clients," said Lisa Mantil, Global Head of Goldman Sachs ETF Accelerator. "We are thrilled to have supported Eagle Capital Management in bringing their first active ETF to market and look forward to empowering more clients to enter the space in the way that best serves them, whether that's through SMA or mutual fund conversions, or bringing new strategies to market."
https://www.goldmansachs.com/media-relations/press-releases/2024/gs-etf-accelerator-new-fund-launched.html
Bank of America Corporation (NYSE: BAC) - Runners Kick Off the Spring Running Season at the 43rd Bank of America Shamrock Shuffle - 25/3/2024
Thousands of runners gathered in Grant Park Sunday morning to kick off Chicago's spring running season at the 43 rd Bank of America Shamrock Shuffle. Featuring a sell-out field, more than 24,000 participants crossed the finish line in Grant Park. Nathan Martin broke the tape first in the men's race in 23:08, Amy Davis-Green led the women's field with a 25:54 and Peter Ruiz placed first in the wheelchair competition.
"We were thrilled to welcome more than 24,000 runners to the streets of Chicago today," said Executive Race Director Carey Pinkowski. "Chicago's running community came out in full force to continue the city's St. Patrick's Day celebration and kick off what promises to be an exciting season of racing. The momentum continues with the sold-out Bank of America Chicago 13.1 in June and culminates this fall with the Bank of America Chicago Marathon."
The men's elite race featured top local and regional runners, including last year's champion Zach Panning, looking to claim the top spot. Nathan Martin outsprinted the field in the final stretch down Columbus Drive, reaching the finish line in 23:08, setting a new 8K personal record. Martin finished three seconds ahead of Titus Winders, who took second in 23:10. Zach Panning rounded out the top three with a 23:12.
Amy Davis-Green continued the Hansons-Brooks Distance Project's winning ways in the women's race. Davis-Green led the way, winning in 25:54. Followed close behind were her teammates Jessie Cardin who took second in 26:03 and Anne-Marie Blaney, finishing third in 26:11.
The Bank of America Shamrock Shuffle hosted the 14th Deloitte Elite Club Competition, more than 60 elite USATF-member club teams from around the country. The teams competed head-to-head for a $20,000 prize purse. On the men's side, Hansons-Brooks Distance Project earned its seventh victory with their top four runners clocking a combined score of 1:33:20. Minnesota Distance Elite finished second in 1:34:32 and Working Man's Track Club A finished third in 1:34:56.
In the women's competition, Hansons-Brooks Distance Project 1 rose to the top of the podium with a combined score of 1:44:59. This was the team's eighth win in the Deloitte Team Competition. Very Nice Track Club finished second in 1:48:09, and the Hansons-Brooks Distance Project 2 finished third in 1:50:52.
https://newsroom.bankofamerica.com/content/newsroom/press-releases/2024/03/runners-kick-off-the-spring-running-season-at-the-43rd-bank-of-a.html
Latest Research
Keynote Speech and Dialogue: Global Financial Turbulence and Changes in the World Order
Jiandong Ju
Abstract
In view of the current bilateral economic and trade relations between China and the United States, Stephen Roach believes it is necessary to enhance Sino-US bilateral communication and mutual trust, and jointly address the risk of global recession. Firstly, China and the United States need to rebuild trust, such as by reopening consulates, relaxing visa restrictions, and easing restrictions on non-governmental organizations; secondly, it is important to lower investment barriers between the two countries and reach a consensus on investment protection agreements. Lastly, Roach suggests the establishment of a Sino-US Secretariat, serving as the core of the new diplomatic framework between the two countries, playing a proactive role in the communication and coordination of national affairs. In response to the issue of global financial instability, Min Zhu believes that the banking industry is facing systemic mismatches and the global liquidity crisis will continue to spread. DaoKui Li believes that to maintain and ensure growth, the Chinese government and the market must act simultaneously, and the regulation of artificial intelligence must depend on the coordination and cooperation between China and the United States. Finally, given the backdrop of the current world economic turbulence, Jiandong Ju believes that China should adhere to a nine-(Chinese) character strategy in the competition of great powers: not seeking hegemony, stabilizing the Asian market, and sharing benefits for all.
https://link.springer.com/chapter/10.1007/978-981-97-0206-0_1
The Industry
Financial Stability Report
A stable financial system, when hit by adverse events, or "shocks," continues to meet the demands of households and businesses for financial services, such as credit provision and payment services. By contrast, in an unstable system, these same shocks are likely to have much larger effects, disrupting the flow of credit and leading to declines in employment and economic activity.
Consistent with this view of financial stability, the Federal Reserve Board's monitoring framework distinguishes between shocks to and vulnerabilities of the financial system. Shocks, such as sudden changes to financial or economic conditions, are typically surprises and are inherently difficult to predict. Vulnerabilities tend to build up over time and are the aspects of the financial system that are most expected to cause widespread problems in times of stress. As a result, the framework focuses primarily on monitoring vulnerabilities and emphasizes four broad categories based on research.
Elevated valuation pressures are signaled by asset prices that are high relative to economic fundamentals or historical norms and are often driven by an increased willingness of investors to take on risk. As such, elevated valuation pressures imply a greater possibility of outsized drops in asset prices (see Section 1, Asset Valuations).
Excessive borrowing by businesses and households leaves them vulnerable to distress if their incomes decline or the assets they own fall in value. In the event of such shocks, businesses and households with high debt burdens may need to cut back spending sharply, affecting the overall level of economic activity. Moreover, when businesses and households cannot make payments on their loans, financial institutions and investors incur losses (see Section 2, Borrowing by Businesses and Households).
Excessive leverage within the financial sector increases the risk that financial institutions will not have the ability to absorb even modest losses when hit by adverse shocks. In those situations, institutions will be forced to cut back lending, sell their assets, or, in extreme cases, shut down. Such responses can substantially impair credit access for households and businesses (see Section 3, Leverage in the Financial Sector).
Funding risks expose the financial system to the possibility that investors will "run" by withdrawing their funds from a particular institution or sector. Many financial institutions raise funds from the public with a commitment to return their investors' money on short notice, but those institutions then invest much of the funds in illiquid assets that are hard to sell quickly or in assets that have a long maturity. This liquidity and maturity transformation can create an incentive for investors to withdraw funds quickly in adverse situations. Facing a run, financial institutions may need to sell assets quickly at "fire sale" prices, thereby incurring substantial losses and potentially even becoming insolvent. Historians and economists often refer to widespread investor runs as "financial panics" (see Section 4, Funding Risks).
Source: Federal Deposit Insurance Corporation
https://www.federalreserve.gov/publications/files/financial-stability-report-20220509.pdf
FEDERAL RESERVE SYSTEM
The Federal Reserve System is the central bank of the United States. It performs five general functions to promote the effective operation of the U.S. economy and, more generally, the public interest. The Federal Reserve
conducts the nation's monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy;
promotes the stability of the financial system and seeks to minimize and contain systemic risks through active monitoring and engagement in the U.S. and abroad;
promotes the safety and soundness of individual financial institutions and monitors their impact on the financial system as a whole;
fosters payment and settlement system safety and efficiency through services to the banking industry and the U.S. government that facilitate U.S.-dollar transactions and payments; and
promotes consumer protection and community development through consumer-focused supervision and examination, research and analysis of emerging consumer issues and trends, community economic development activities, and the administration of consumer laws and regulations.
https://www.federalreserve.gov/aboutthefed.htm
https://www.federalreserve.gov/default.htm
Supervision and Regulation Report (May 2022)
Summary
The banking system remains strong overall, with robust capital and liquidity and improved asset quality. Supervisors continue to focus on firms' management of capital and liquidity, as well as cybersecurity. While supervisors continue to focus on these core areas, the Federal Reserve is also reviewing the risks created by the increasing use of technology by financial institutions. The Federal Reserve is enhancing its supervisory approaches in response to these risks.
This report focuses on developments in three areas:
Banking System Conditions provides an overview of current financial conditions in the banking sector. In the second half of 2021, banking conditions continued to be strong. Risk monitoring will continue for potential impacts from the pandemic and new geopolitical risks.
Regulatory Developments provides an overview of the Federal Reserve's recent regulatory policy work.
Supervisory Developments provides an overview of the Federal Reserve's supervisory programs and priorities. In addition to core supervisory work, the Federal Reserve is focused on industry changes involving financial technology (fintech) and third-party service providers. The report also highlights differences in supervisory approaches with respect to large, community, and regional banking organizations.
Source: Board of Governors of the Federal Reserve System
https://www.federalreserve.gov/publications/files/202205-supervision-and-regulation-report.pdf
FEDERAL DEPOSIT INSURANCE CORPORATION
What is the FDIC?
The Federal Deposit Insurance Corporation (FDIC) preserves and promotes public confidence in the U.S. financial system by insuring depositors for at least $250,000 per insured bank; by identifying, monitoring and addressing risks to the deposit insurance funds; and by limiting the effect on the economy and the financial system when a bank or thrift institution fails.
Who is on the Board of Directors? When do they meet?
The FDIC Board of Directors is comprised of a chairman, vice chairman and FDIC director, as well as the Comptroller of the Currency and the head of the Consumer Financial Protection Bureau. For biographies of the board members, visit: Board of Directors & Senior Executives. The board meets about once a month. The Board Meetings page contains the announcements, usually provided about one week in advance with specific information regarding each meeting.
Who runs the FDIC?
The Organization Directory and Office Contacts contains the names, positions, and phone numbers for FDIC senior executives and managers in headquarters, regional, and field offices.
What is the FDIC's strategic direction?
The FDIC publishes our budget, strategic plans, and financial reports on an annual or quarterly basis. The Annual Reports page contains the yearly accomplishments of the corporation, and has each report available from 1996 to the present. The Strategic Plans page contains the long-term strategic plan (currently from 2008-2013) as well as the annual performance plan and information technology strategic plan. Our Financial Reports page contains quarterly Chief Financial Officer's (CFO) Report to the Board as well as our 2010 Budget Executive Summary.
https://www.fdic.gov/about/affaq.html
2022 Risk Review
Introduction
The FDIC was created in 1933 to maintain stability and public confidence in the nation's financial system. A key part of accomplishing this mission is the FDIC's work to identify and analyze risks that could affect banks. The Risk Review summarizes the FDIC's assessment of risks related to conditions in the U.S. economy, financial markets, and the banking industry. The analysis of the banking industry pays particular attention to risks that may affect community banks. As the primary federal regulator for most community banks, the FDIC has a unique perspective on these institutions.
The Risk Review presents key risks to banks in four broad categories-credit risk, market risk, operational risk, and climate-related financial risk. The credit risk areas discussed are agriculture, commercial real estate, consumer debt, energy, housing, leveraged lending and corporate debt, nonbank lending, and small business lending. The market risk areas discussed are interest rate risk and net interest margin, and liquidity and deposits.
The 2022 Risk Review expands coverage of risks from prior reports by examining operational risk to banks from cyber threats and illicit activity and climate-related financial risks to banking organizations. Monitoring these risks is among the FDIC's top priorities.
Section I is an executive summary. Section II is an overview of economic, financial market, and banking industry conditions. Section III is an analysis of the key credit, market, operational, and climate-related financial risks facing banks.1
Source: Federal Deposit Insurance Corporation
https://www.fdic.gov/analysis/risk-review/2022-risk-review/2022-risk-review-full.pdf
Leading Companies
Bank of America Corporation (NYSE: BAC)
A global company with a local focus
At Bank of America, we have a clear purpose to help make financial lives better through the power of every connection. We fulfill this purpose through our commitment to responsible growth, which includes a focus on environmental, social and governance (ESG) leadership. Integrated across our eight lines of business - our ESG focus reflects our values, ensures we are holding ourselves accountable, presents tremendous business opportunity, and allows us to create shared success with our clients and communities.
Every day, we provide unmatched convenience in the United States, serving approximately 66 million consumer and small business clients. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. The company serves clients through operations across the United States, its territories and more than 35 countries.
Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 66 million consumer and small business clients with approximately 4,300 retail financial centers, including approximately 2,800 lending centers, 2,600 financial centers with a Consumer Investment Financial Solutions Advisor and 2,000 business centers; approximately 16,800 ATMs; and award-winning digital banking with approximately 38 million active users, including approximately 29 million mobile users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
https://about.bankofamerica.com/en-us/who-we-are.html#fbid=cKinLozwAyI
https://newsroom.bankofamerica.com/companyoverview
Bank of America Reports Q4-21 Net Income of $7.0 Billion; EPS of $0.82 Ending Loan Balances up $51 Billion to $979 Billion; Ending Deposit Balances up $269 Billion to $2.1 Trillion Record Full-Year 2021 Net Income of $32.0 Billion; EPS of $3.57
19 January 2022
Q4-21 Financial Highlights1
Net income rose 28% to $7.0 billion, or $0.82 per diluted share, reflecting strong operating leverage as revenues grew faster than expenses
Revenue, net of interest expense, increased 10% to $22.1 billion - Net interest income (NII)(B) up $1.2 billion, or 11%, to $11.4 billion, driven by strong deposit growth and investment of excess liquidity - Noninterest income up 8% to $10.7 billion, driven by record asset management fees and record investment banking revenue
Provision for credit losses improved by $542 million to a benefit of $489 million, driven by asset quality and macroeconomic improvements, partially offset by loan growth; net reserve release of $851 million(C)
Noninterest expense rose 6% to $14.7 billion, driven by higher revenue-related incentive compensation, partially offset by lower COVID-19 related costs; positive operating leverage of 4%(D) * Average loan and lease balances up $10 billion to $945 billion; ending balances up $51 billion to $979 billion, led by strong commercial loan growth as well as higher card balances
Average deposits up $280 billion, or 16%, to $2.0 trillion
Average Global Liquidity Sources rose $215 billion, or 23%, to record $1.2 trillion(E)
Common equity tier 1 (CET1) ratio 10.6% (Standardized)(F); returned $31.7 billion to shareholders in 2021 through common stock dividends and share repurchases
From Chairman and CEO Brian Moynihan:
"Our fourth-quarter results were driven by strong organic growth, record levels of digital engagement, and an improving economy. We grew loans by $51 billion and added $100 billion of deposits during the quarter, further strengthening our position as the leader in retail deposits.
"We earned a record $32 billion in 2021, with every business line solidly contributing. In Consumer, we added millions of new credit card accounts and nearly a million net new checking accounts as we continued to demonstrate the value we provide through our physical and digital capabilities. Wealth Management had record client flows and the strongest client acquisition numbers since before the pandemic. Investment Banking had its best year ever and Global Markets had its highest sales and trading revenue in a decade, led by record Equities performance as we invested in the business.
"We also continued to support our communities, helping them address some of society's biggest challenges, including the environment, the pandemic, racial equality and economic opportunity. I want to thank our talented teammates across the globe for all their work over the past year."
Q4-21 Business Segment Highlights1,2(A)
Consumer Banking
Net income of $3.1 billion
Deposit balances up 16% to more than $1.0 trillion
Consumer investment assets up $63 billion, or 20%, to a record $369 billion, driven by market valuations and inflows from new and existing clients; $23 billion of client flows since Q4-20
Organic Client Growth
Added ~901,000 net new Consumer checking accounts and ~525,000 new Consumer investment accounts in 2021, up 64% and 24%, respectively, compared to 2019
Global Wealth and Investment Management
Net income of $1.2 billion
Record client balances of $3.8 trillion, up $491 billion, or 15%, driven by higher market valuations and $149 billion in client flows in 2021
Deposits up 18% to $361 billion
Pretax margin of 30%
Organic Client Growth
Record AUM balances of $1.6 trillion, up 16%
Average loan and lease balances up 10% to $205 billion; 47th consecutive quarter of average loan and lease balance growth
Merrill Lynch Wealth Management added ~6,700 net new households; Private Bank added ~500 net new relationships
Global Banking
Net income of $2.7 billion
Record total investment banking fees (excl. self-led) of $2.4 billion, up 26%; record advisory fees of $850 million, up 55%
No. 3 in investment banking fees with 6.6% market share, up 50bps3
Deposits up 18% to $562 billion
Organic Client Growth
Debt underwriting fees rose 37% to $984 million; 7 of the top 10 debt deals3
Raised $963 billion in capital on behalf of clients in 20214
Global Markets
Net income of $669 million
Sales and trading revenue down 2% to $2.9 billion, including net debit valuation adjustment (DVA) gains of $2 million; Fixed Income Currencies and Commodities (FICC) revenue of $1.6 billion and Equities revenue of $1.4 billion
Excluding net DVA,(G) sales and trading revenue down 4% to $2.9 billion; FICC down 10% to $1.6 billion; Equities up 3% to $1.4 billion
Organic Client Growth
Average assets increased $134 billion to $817 billion, driven by higher client balances in Equities and loan growth in FICC
From Chief Financial Officer Alastair Borthwick:
"We ended the year on a strong note. Revenue rose faster than expenses, producing our second straight quarter of year-over-year positive operating leverage. Also, we significantly grew loans and deposits, which allowed us to increase net interest income by $1.2 billion versus the year-ago quarter despite a challenging rate environment. In addition, our investment banking and wealth management businesses continued to benefit from robust markets and the strong relationships we have built with our clients over many years. "Asset quality remained strong with loss rates at historically low levels as the global economy continued to improve. This enabled us to release loan loss reserves again this quarter. For our shareholders, we increased book value per share by 6% to $30.37 and returned nearly $32 billion in 2021 through common stock repurchases and dividends."
For the full release, see:
https://d1io3yog0oux5.cloudfront.net/_7ec6a378767adf69110738ff347671be/bankofamerica/db/806/9527/earnings_release/The+Press+Release.pdf
Bank of New York Mellon Corporation (NYSE: BK)
BNY Mellon is an investments company. We provide investment management, investment services and wealth management that help institutions and individuals succeed in markets all over the world. In the region of Europe, the Middle East, and Africa, which we have been serving since the 1900s, we deliver services to a broad range of clients seeking access to global capital markets.
https://www.bnymellon.com/emea/en/who-we-are/our-story/index.jsp#companyprofile
BNY MELLON REPORTS FOURTH QUARTER 2021 EARNINGS OF $822 MILLION OR $1.01 PER COMMON SHARE
NEW YORK, January 18, 2022 - The Bank of New York Mellon Corporation ("BNY Mellon") (NYSE: BK) today reported:
Fourth Quarter Results
Total revenue of $4.0 billion, increased 4%; or 3% excluding notable items (c)
Fee revenue increased 4%; or 8% excluding money market fee waivers (c)
Net interest revenue decreased slightly
Provision for credit losses was a benefit of $17 million
Total noninterest expense of $3.0 billion, increased 1%; or 6% excluding notable items (c)
AUC/A of $46.7 trillion, increased 14%
AUM of $2.4 trillion, increased 10%
Securities Services
Total revenue increased 5%
Income before taxes increased 63%; or 24% excluding notable items (c)
Pre-tax operating margin of 19%
Market and Wealth Services
Total revenue increased 1%
Income before taxes increased 4%
Pre-tax operating margin of 43%
Investment and Wealth Management
Total revenue increased 3%
Income before taxes decreased 11%
Pre-tax operating margin of 27%; adjusted pre-tax operating margin - Non-GAAP of 29% (c)
CEO Commentary
"2021 was in many regards a remarkable year for BNY Mellon. We made significant progress towards advancing our strategic priorities and growth agenda, and we delivered solid and improved financial results. Three broad themes really stood out: Our outstanding sales performance and improved broad-based organic growth, the number of innovative products and solutions that we're bringing to the market across our businesses, and our enhanced effectiveness in delivering the full breadth of Securities Services, Market and Wealth Services, and Investment and Wealth Management with better, more holistic solutions for our clients," Todd Gibbons, Chief Executive Officer, said.
Mr. Gibbons added, "Full-year EPS of $4.14 was up 8% yearover-year as the benefits of a supportive market backdrop and a benign credit environment together with our meaningfully improved organic growth more than offset the stiff headwind of lower interest rates. Having started 2021 with a significant amount of excess capital combined with our strong capital generation throughout the year allowed us to return $5.7 billion - or 160% of earnings - to our shareholders through common dividends and share repurchases."
"The pace of innovation across the firm, including in areas such as digital assets, real-time payments, the Future of Collateral and Pershing X - to name just a few - gives me great confidence in our growth prospects. As we look to 2022 and beyond, we expect double-digit EPS growth as we are determined to continue delivering consistent organic growth which, together with the current expectation for higher rates, should allow us to generate positive operating leverage, while at the same time continue investing in the growth and efficiency of our businesses," Mr. Gibbons concluded.
KEY DRIVERS (comparisons are 4Q21 vs. 4Q20, unless otherwise stated)
Total revenue increased 4%, or 3% excluding notable items (a) primarily reflecting:
Fee revenue increased 4% primarily reflecting the positive impact of higher market values and client volumes, partially offset by higher money market fee waivers. Excluding money market fee waivers, fee revenue increased 8% (a).
Investment and other revenue increased primarily reflecting the 4Q20 losses on business sales.
Net interest revenue decreased slightly primarily reflecting lower interest rates on interest-earning assets and the impact of hedging activities (primarily offset in fee and other revenue). This was partially offset by the benefit of lower funding and deposits rates and larger deposit and loan balances.
Provision for credit losses was a benefit of $17 million primarily driven by an improvement in the macroeconomic forecast.
Noninterest expense increased 1% primarily reflecting higher investments in growth, infrastructure and efficiency initiatives and higher revenue-related expenses, partially offset by lower litigation reserves, severance expense and real estate charges recorded in 4Q20. Excluding the notable items, noninterest expense increased 6% (a).
Effective tax rate of 18.4%.
Assets under custody and/or administration ("AUC/A") and Assets under management ("AUM")
AUC/A of $46.7 trillion, increased 14%, primarily reflecting net client inflows and higher market values, partially offset by the unfavorable impact of a stronger U.S. dollar.
AUM of $2.4 trillion, increased 10%, primarily reflecting higher market values and net inflows.
Capital and liquidity
Repurchased 22 million common shares for $1.2 billion; Dividends of $280 million to common shareholders (including dividend-equivalents on share-based awards). Return on common equity ("ROE") of 9%; Return on tangible common equity ("ROTCE") of 17% (a).
Common Equity Tier 1 ("CET1") ratio - 11.1%.
Tier 1 leverage ratio - 5.5%.
Average liquidity coverage ratio ("LCR") - 109%.
Total Loss Absorbing Capacity ("TLAC") ratios exceed minimum requirements.
For the full release, see:
https://www.bnymellon.com/content/dam/bnymellon/documents/pdf/investor-relations/earnings-press-release-january-2022.pdf.coredownload.pdf
BB&T Corporation Inc. (NYSE: TFC)
BB&T Corporation (formerly NYSE: BBT) and Sun Trust Banks Inc (formerly NYSE: STI) merged to become Truist Financial Corporation (NYSE: TFC).
The BB&T bonds changed name and ticker symbol to reflect the new name and ticker symbol of the common stock on Monday, 9 December 2019.
https://www.nyse.com/trader-update/history#110000182403
About BB&T
BB&T is one of the largest financial services holding companies in the U.S. with $230.9 billion in assets and market capitalization of approximately $37.6 billion as of June 30, 2019. Building on a long tradition of excellence in community banking, BB&T offers a wide range of financial services including retail and commercial banking, investments, insurance, wealth management, asset management, mortgage, corporate banking, capital markets and specialized lending. Based in Winston-Salem, N.C., BB&T operates more than 1,700 financial centers in 15 states and Washington, D.C. and is consistently recognized for outstanding client service by Greenwich Associates for small business and middle market banking.
https://bbt.mediaroom.com/company-information
Capital One Financial Corporation (NYSE: COF)
About Capital One
Capital One is on a mission to help our customers succeed by bringing ingenuity, simplicity, and humanity to banking. We were founded on the belief that the banking industry would be revolutionized by information and technology, beginning with credit cards. We are now the nation's fifth-largest consumer bank and eighth-largest bank overall.
Founder-led by Chairman and Chief Executive Officer Richard Fairbank, we believe that innovation is powered by perspective and that teamwork and respect for each other lead to superior results. Across the company, we're building customer experiences that are real-time and intelligent. We measure our efforts by the success our customers enjoy and the advocacy they exhibit.
We're enabling great talent with great spaces. Our award-winning office designs promote creativity and collaboration. In 2018, we opened our new headquarters in McLean, Virginia, where engineers, designers, and data scientists work side by side to imagine the next great chapter of Capital One.
https://www.capitalone.com/about/corporate-information/our-company/
Capital One Reports Fourth Quarter 2021 Net Income of $2.4 billion, or $5.41 per share
25 January 2022
MCLEAN, Va., Jan. 25, 2022 /PRNewswire/ -- Capital One Financial Corporation (NYSE: COF) today announced net income for the fourth quarter of 2021 of $2.4 billion, or $5.41 per diluted common share, compared with net income of $3.1 billion, or $6.78 per diluted common share in the third quarter of 2021, and with net income of $2.6 billion, or $5.35 per diluted common share in the fourth quarter of 2020.
"In the fourth quarter, we posted strong growth with strikingly strong credit results, and we continued to return capital to our shareholders," said Richard D. Fairbank, Founder, Chairman and Chief Executive Officer. "As we enter 2022, we continue to see attractive opportunities to grow and build our franchise."
The quarter included the following notable item:
(Dollars in millions, except per share data)
Pre-Tax
Impact
Diluted EPS
Impact
Legacy rewards program upgrade
$ (92)
$ (0.16)
All comparisons below are for the fourth quarter of 2021 compared with the third quarter of 2021 unless otherwise noted.
Fourth Quarter 2021 Income Statement Summary:
Total net revenue increased 4 percent to $8.1 billion.
Total non-interest expense increased 12 percent to $4.7 billion:
33 percent increase in marketing.
7 percent increase in operating expenses.
Pre-provision earnings decreased 6 percent to $3.4 billion. (1)
Provision for credit losses increased $723 million to $381 million:
Net charge-offs of $527 million.
$145 million loan reserve release.
Net interest margin of 6.60 percent, an increase of 25 basis points.
Efficiency ratio of 57.63 percent.
Operating efficiency ratio of 45.32 percent.
Fourth Quarter 2021 Balance Sheet Summary:
Common equity Tier 1 capital ratio under Basel III Standardized Approach of 13.1 percent at December 31, 2021.
Period-end loans held for investment in the quarter increased $16.0 billion, or 6 percent, to $277.3 billion.
Credit Card period-end loans increased $9.7 billion, or 9 percent, to $114.8 billion.
Domestic Card period-end loans increased $9.5 billion, or 10 percent, to $108.7 billion.
Consumer Banking period-end loans increased $534 million, or 1 percent, to $77.6 billion.
Auto period-end loans increased $1.1 billion, or 1 percent, to $75.8 billion.
Commercial Banking period-end loans increased $5.7 billion, or 7 percent, to $84.9 billion.
Average loans held for investment in the quarter increased $14.1 billion, or 6 percent, to $267.2 billion.
Credit Card average loans increased $6.5 billion, or 6 percent, to $108.6 billion.
Domestic Card average loans increased $6.4 billion, or 7 percent, to $102.7 billion.
Consumer Banking average loans increased $1.4 billion, or 2 percent, to $77.4 billion.
Auto average loans increased $2.0 billion, or 3 percent, to $75.3 billion.
Commercial Banking average loans increased $6.1 billion, or 8 percent, to $81.1 billion.
Period-end total deposits increased $5.0 billion, or 2 percent, to $311.0 billion, while average deposits increased $2.2 billion, or 1 percent, to $307.3 billion.
Interest-bearing deposits rate paid decreased 1 basis point to 0.33 percent.
2021 Full Year Income Statement Summary:
Total net revenue increased 7% to $30.4 billion.
Total non-interest expense increased 10 percent to $16.6 billion:
78 percent increase in marketing.
2 percent increase in operating expenses.
Pre-provision earnings increased 3 percent to $13.9 billion (1) .
Provision for credit losses decreased 119 percent to $1.9 billion:
Net interest margin of 6.21 percent, an increase of 15 basis points.
Efficiency ratio of 54.44 percent.
Efficiency ratio excluding adjusting items of 54.12 percent (2) .
Operating efficiency ratio of 45.01 percent.
Operating efficiency ratio excluding adjusting items of 44.68 percent (2) .
https://investor.capitalone.com/news-releases/news-release-details/capital-one-reports-fourth-quarter-2021-net-income-24-billion-or
Citigroup Inc. (NYSE: C)
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
https://www.citigroup.com/citi/about/
https://www.citigroup.com/citi/
Second Quarter 2023 Results and Key Metrics
July 14, 2023
HIGHLIGHTS
RETURNED $2.0 BILLION IN THE FORM OF DIVIDENDS AND REPURCHASES
PAYOUT RATIO OF 76%3
BOOK VALUE PER SHARE OF $97.87
TANGIBLE BOOK VALUE PER SHARE OF $85.34
Citigroup Inc. today reported net income for the second quarter 2023 of $2.9 billion, or $1.33 per diluted share, on revenues of $19.4 billion. This compares to net income of $4.5 billion, or $2.19 per diluted share, on revenues of $19.6 billion for the second quarter 2022.
Second quarter results included divestiture-related impacts of $(73) million5 in earnings before taxes ($(92) million after-tax), primarily driven by separation costs related to Mexico and severance costs in Asia exit markets, which were both recorded in Legacy Franchises. Excluding these divestiture-related impacts, earnings per share was $1.375. This compares to divestiture-related impacts in the second quarter 2022 of $48 million5 in earnings before taxes ($35 million after-tax), also recorded in Legacy Franchises, and earnings per share in the second quarter of 2022, excluding divestiture-related impacts, of $2.175.
Revenues decreased 1% from the prior-year period, as growth in Services in Institutional Clients Group (ICG) and US Personal Banking within Personal Banking and Wealth Management (PBWM) was more than offset by a decline in Markets and Investment Banking in ICG and Global Wealth Management in PBWM, as well as the revenue reduction from exited markets and wind-downs within Legacy Franchises. The decline in revenues was also partially offset by higher revenues in Corporate / Other.
Net income of $2.9 billion decreased 36% from the prior-year period. Excluding divestiture-related impacts5, net income decreased 33%. The decrease in net income was primarily driven by higher expenses, higher cost of credit and the lower revenues.
Earnings per share of $1.33 decreased 39% from the prior-year period, reflecting the lower net income and an approximate 1% increase in average diluted shares outstanding.
Citi CEO Jane Fraser said, "Amid a challenging macroeconomic backdrop, we continued to see the benefits of our diversified business model and strong balance sheet. Our Services businesses continued to deliver strong revenues, with Treasury and Trade Solutions and Securities Services both up a healthy 15%. Markets revenues were down from a strong second quarter last year, as clients stood on the sidelines starting in April while the U.S. debt limit played out. In Banking, the long-awaited rebound in Investment Banking has yet to materialize, making for a disappointing quarter.
"Our Cards businesses had double-digit growth due to strong engagement and continued normalization in payment rates. And while Wealth revenues were down, we are attracting new clients and seeing growth in segments such as Wealth at Work.
"We remain laser-focused on executing our strategy while continuing to simplify and modernize our bank. We are on track with the plan we laid out at Investor Day and remain committed to reaching our medium-term return targets. We ended the second quarter with a CET 1 ratio of 13.3%, which was 100 basis points above our new regulatory requirement that goes into effect in the fourth quarter. We returned a total of $2 billion in capital to our shareholders through common dividends and share buybacks and we will continue to review our level of capital return on a quarter-to-quarter basis," Ms. Fraser concluded.
Percentage comparisons throughout this press release are calculated for the second quarter 2023 versus the second quarter 2022, unless otherwise specified.
Citigroup
Citigroup revenues of $19.4 billion in the second quarter 2023 decreased 1%. The lower revenues reflected strength across Services and US Personal Banking which was more than offset by declines in Markets, Investment Banking, and Global Wealth Management, as well as the revenue reduction from the exited markets and continued wind-downs. The decline in revenues was also partially offset by higher revenues in Corporate / Other.
Citigroup operating expenses of $13.6 billion in the second quarter 2023 increased 9%, largely driven by investments in risk and control, business-led and enterprise-led investments, volume growth and macro factors, including inflation, as well as severance. The expense increase was partially offset by productivity savings and an expense reduction from the exited markets and continued wind-downs.
Citigroup cost of credit was approximately $1.8 billion in the second quarter 2023, compared to $1.3 billion in the prior-year period, primarily driven by the continued normalization in net credit losses. A net build in the allowance for credit losses (ACL) for loans and unfunded commitments of $161 million was primarily driven by Branded Cards and Retail Services, largely related to growth in card balances. Additionally, other provisions were $159 million in the quarter.
Citigroup net income of $2.9 billion in the second quarter 2023 decreased 36% from the prior-year period, primarily driven by the higher expenses and the higher cost of credit, as well as the lower revenues. Citigroup's effective tax rate increased to approximately 27% in the current quarter versus 20% in the second quarter 2022, largely driven by the geographic mix of earnings.
Citigroup's total allowance for credit losses on loans was approximately $17.5 billion at quarter end, with a reserve-to-funded loans ratio of 2.67%, compared to $16.0 billion, or 2.44% of funded loans, at the end of the prior-year period. Total non-accrual loans decreased 15% from the prior-year period to $2.6 billion. Consumer non-accrual loans decreased 4% to $1.3 billion and corporate non-accrual loans decreased 24% to $1.3 billion.
Citigroup's end-of-period loans were $661 billion at quarter end, up 1% versus the prior-year period, as growth in PBWM, reflecting increases in US Personal Banking, was largely offset by declines in ICG and Legacy Franchises.
Citigroup's end-of-period deposits were approximately $1.3 trillion at quarter end, largely unchanged versus the prior-year period, as an increase in institutional certificates of deposit in Corporate / Other was offset by decreases in ICG, driven by Securities Services.
Citigroup's book value per share of $97.87 and tangible book value per share of $85.34 at quarter end increased 5% and 6%, respectively, versus the prior-year period, largely driven by net income to common and common share repurchases, partially offset by payment of common dividends and adverse movements in the accumulated other comprehensive income (AOCI) component of equity. At quarter end, Citigroup's CET1 capital ratio was 13.3% versus 13.4% in the prior quarter, as the impact of common dividends and share repurchases, as well as growth in risk-weighted assets, was partially offset by net income to common. Citigroup's Supplementary Leverage ratio for the second quarter 2023 was 6.0% which was largely unchanged from the prior quarter. During the quarter, Citigroup returned a total of $2.0 billion to common shareholders in the form of dividends and repurchases.
Institutional Clients Group
ICG revenues of $10.4 billion were down 9% (including gain/(loss) on loan hedges)6, as growth in Services was more than offset by a decline in Markets and Banking.
Services revenues of $4.7 billion increased 15%. TTS revenues of $3.5 billion increased 15%, driven by 18% growth in net interest income and 8% growth in non-interest revenue. Strong performance in TTS was driven by higher interest rates and non-interest revenue benefits from continued volume growth in underlying drivers, with double-digit growth in cross border transaction value and commercial card spend volume. Securities Services revenues of $1.1 billion increased 15%, as net interest income increased 62%, driven by higher interest rates across currencies.
Markets revenues of $4.6 billion decreased 13%, driven by both Fixed Income and Equities, relative to a strong quarter last year, coupled with low volatility this quarter. Fixed Income Markets revenues of $3.5 billion decreased 13%, as strength in the Rates franchise was more than offset by declines in Currencies and Commodities. Equity Markets revenues of $1.1 billion were down 10%, primarily reflecting a decline in Equity Derivatives.
Banking revenues of $1.2 billion decreased 44%, including gain/(loss) on loan hedges in the current quarter and the prior-year period. Excluding gain/(loss) on loan hedges6, Banking revenues of $1.2 billion decreased 22%, driven by lower revenues in both Investment Banking and Corporate Lending. Investment Banking revenues of $612 million decreased 24%, as heightened macroeconomic uncertainty continued to impact client activity. Excluding gain/(loss) on loan hedges6, Corporate Lending revenues decreased 20% versus the prior-year period, driven by lower volumes.
ICG operating expenses of $7.3 billion increased 13%, driven by continued investments in TTS, risk and control investments, and severance in Markets and Investment Banking, partially offset by productivity savings.
ICG cost of credit of $58 million, compared to $(202) million in the prior-year period, included net credit losses of $73 million and other provisions of $223 million, partially offset by an ACL release for loans and unfunded commitments of $(238) million.
ICG net income of $2.2 billion decreased 45%, largely driven by the higher expenses, the lower revenues, as well as the higher cost of credit.
Personal Banking and Wealth Management
PBWM revenues of $6.4 billion increased 6%, as net interest income growth, driven by strong loan growth across US Personal Banking, was partially offset by a decline in non-interest revenue, driven by lower investment product revenues in Global Wealth Management.
US Personal Banking revenues of $4.6 billion increased 11%. Branded Cards revenues of $2.4 billion increased 8%, driven by the higher net interest income. Retail Services revenues of $1.6 billion increased 27%, primarily driven by the higher net interest income as well as lower partner payments. Retail Banking revenues of $594 million decreased 9%, primarily reflecting the transfer of relationships and the associated deposit balances to Global Wealth Management.
Global Wealth Management revenues of $1.8 billion decreased 5%, driven by continued investment fee headwinds and higher interest rates paid on deposits, partially offset by the benefits from the continued transfer of Retail Banking relationships.
PBWM operating expenses of $4.2 billion increased 5%, primarily driven by risk and control investments.
PBWM cost of credit was $1.6 billion, compared to $1.4 billion in the prior-year period. The increase was largely driven by net credit losses of $1.2 billion, which increased 78% from near historically low levels, reflecting ongoing normalization in Branded Cards and Retail Services. A net ACL build for loans and unfunded commitments of $335 million in the current quarter was primarily driven by growth in card balances.
PBWM net income of $494 million decreased 11%, driven by the higher cost of credit and the higher expenses, partially offset by the higher revenues.
Legacy Franchises
Legacy Franchises revenues of $1.9 billion decreased 1%, as the benefit of higher rates and volumes in Mexico was more than offset by the reductions from exited markets and continued wind-downs.
Legacy Franchises expenses of $1.8 billion decreased 2%, primarily driven by the impact of exited markets and continued wind-downs.
Legacy Franchises cost of credit was $300 million, compared to $121 million in the prior-year period, and included net credit losses of $190 million and a net ACL build for loans and unfunded commitments of $64 million, reflecting volume growth in Mexico. Additionally, other provisions were $46 million in the quarter.
Legacy Franchises net loss was $(125) million, compared to a net loss of $(17) million in the prior-year period, primarily reflecting the higher cost of credit, partially offset by the lower expenses.
Corporate / Other
Corporate / Other revenues increased to $677 million from $255 million in the prior-year period, largely driven by higher net revenue from the investment portfolio, primarily due to higher interest rates.
Corporate / Other expenses of $302 million increased from $160 million in the prior-year period, primarily driven by inflation and severance.
Corporate / Other cost of credit of $(113) million was driven by a reserve release.
Corporate / Other income from continuing operations was $361 million, compared to $273 million in the prior-year period, largely reflecting the higher net revenue from the investment portfolio, as well as the reserve release, partially offset by the higher expenses.
For the full release, see:
https://www.citigroup.com/global/news/press-release/2023/second-quarter-2023-results-key-metrics
Goldman Sachs Group Inc. (NYSE: GS)
The Goldman Sachs Group, Inc. is leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centers around the world.
We commit people, capital and ideas to help our clients, shareholders and the communities we serve to grow. At Goldman Sachs, we:
Advise We advise companies on buying and selling businesses, raising capital and managing risks, which enables them to grow.
Finance We help local, state and national governments finance their operations so they can invest in infrastructure, like schools, hospitals and roads.
Transact We transact for our clients in all key financial markets, including equities, bonds, currencies and commodities, so that capital flows, jobs are created and economies can grow.
Support We help markets remain efficient and liquid, so investors and companies can meet their needs, whether to invest, raise money or manage risk.
Manage We preserve and grow assets for institutions, including mutual funds, pension funds and foundations, as well as individuals.
Invest We invest our capital alongside our clients' capital to help businesses grow.
Innovate We develop ideas and analysis that drive new perspectives, new products and new paths to growth.
https://www.goldmansachs.com/our-firm/about-us/index.html
https://www.goldmansachs.com/our-firm/index.html
Full Year and Fourth Quarter 2021 Earnings Results
18 January 2022
NEW YORK, January 18, 2022 - The Goldman Sachs Group, Inc. (NYSE: GS) today reported net revenues of $59.34 billion and net earnings of $21.64 billion for the year ended December 31, 2021. Net revenues were $12.64 billion and net earnings were $3.94 billion for the fourth quarter of 2021.
Diluted earnings per common share (EPS) was $59.45 for the year ended December 31, 2021 compared with $24.74 for the year ended December 31, 2020, and was $10.81 for the fourth quarter of 2021 compared with $12.08 for the fourth quarter of 2020 and $14.93 for the third quarter of 2021. For the year ended December 31, 2020, net provisions for litigation and regulatory proceedings reduced diluted EPS by $9.51.
Return on average common shareholders' equity (ROE)1 was 23.0% for 2021 and annualized ROE was 15.6% for the fourth quarter of 2021. Return on average tangible common shareholders' equity (ROTE)1 was 24.3% for 2021 and annualized ROTE was 16.4% for the fourth quarter of 2021.
Annual Highlights.
During the year, the firm generated record net revenues of $59.34 billion, record net earnings of $21.64 billion and record diluted EPS of $59.45, each significantly surpassing the previous record. In addition, ROE1 of 23.0% was the highest since 2007.
Investment Banking generated record net revenues of $14.88 billion, driven by record net revenues in each of Financial advisory, Equity underwriting and Debt underwriting.
The firm ranked #1 in worldwide announced and completed mergers and acquisitions, and in worldwide equity and equityrelated offerings, common stock offerings and initial public offerings for the year.2
Global Markets generated net revenues of $22.08 billion, the highest annual net revenues in 12 years, reflecting strength in both Equities and Fixed Income, Currency and Commodities (FICC). Equities produced its second highest net revenues and FICC had record financing net revenues.
Asset Management generated record net revenues of $14.92 billion, including record net revenues in Equity investments and the second highest net revenues in Lending and debt investments.
Consumer & Wealth Management generated record net revenues of $7.47 billion, reflecting record net revenues in both Wealth management and Consumer banking.
Firmwide assets under supervision3,4 increased $325 billion during the year, including record long-term net inflows of $130 billion, to a record $2.47 trillion. Firmwide Management and other fees were a record $7.57 billion in 2021.
Book value per common share increased by 20.4% during the year to $284.39.
https://www.goldmansachs.com/media-relations/press-releases/current/pdfs/2021-q4-results.pdf
HSBC USA Inc. (LSE: HSBA, HKEX: 5, BSX: HSBC)
HSBC USA Inc. is a wholly-owned subsidiary of HSBC Holdings plc (LSE: HSBA, HKEX: 5, BSX: HSBC).
https://www.about.us.hsbc.com/investor-relations
https://www.hsbc.com/
About HSBC
HSBC is one of the world's largest banking and financial services organisations. We serve more than 40 million customers through four global businesses: Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking. Our network covers 65 countries and territories in Europe, Asia, the Middle East and Africa, North America and Latin America.
We aim to be where the growth is, connecting customers to opportunities, enabling businesses to thrive and economies to prosper, and ultimately helping people to fulfil their hopes and realise their ambitions.
Listed on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by around 200,000 shareholders in 129 countries and territories.
https://www.about.us.hsbc.com/
Third Quarter 10-Q
25 October 2021
For the full release, see:
https://www.about.us.hsbc.com/-/media/us/en/investor-relations/hsbc-usa/211025-form-10-q-3q-2021.pdf
JPMorgan Chase & Co. (NYSE: JPM)
JPMorgan Chase (NYSE: JPM) is one of the oldest financial institutions in the United States. With a history dating back over 200 years, here's where we stand today:
We are a leading global financial services firm with assets of $2.6 trillion.
We have a presence in over 100 markets.
We have over 250,000 employees.
We serve millions of consumers, small businesses and many of the world's most prominent corporate, institutional and government clients.
We are a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management.
Our stock is a component of the Dow Jones Industrial Average.
https://www.jpmorganchase.com/corporate/About-JPMC/about-us.htm
JPMORGAN CHASE REPORTS FOURTH-QUARTER 2021 NET INCOME OF $10.4 BILLION ($3.33 PER SHARE), OR $9.0 BILLION EXCLUDING CREDIT RESERVE RELEASES OF $1.8 BILLION ($2.86 PER SHARE)1 FULL-YEAR 2021 NET INCOME OF $48.3 BILLION ($15.36 PER SHARE)
14 January 2022
JPMORGAN CHASE (JPM)
Discussion of Results: Net income was $10.4 billion, down 14%, driven by higher noninterest expense.
Net revenue of $30.3 billion, up 1%. Net interest income was $13.7 billion, up 3%, driven by balance sheet growth, partially offset by lower net interest income in CIB Markets. Noninterest revenue was $16.6 billion, down 1%, largely driven by lower revenue in CIB Markets and Home Lending, predominantly offset by higher Investment Banking fees.
Noninterest expense was $17.9 billion, up 11%, largely on higher compensation.
The provision for credit losses was a net benefit of $1.3 billion, reflecting a net reserve release of $1.8 billion driven by a more balanced outlook due to the continued resilience in the macroeconomic environment and $550 million of net charge-offs. The prior year provision was a net benefit of $1.9 billion, reflecting a net reserve release of $2.9 billion and $1.1 billion of net charge-offs. The net reserve release in the current year was comprised of $1.5 billion in Consumer, including $1.4 billion in Card, and $270 million in Wholesale. Net charge-offs of $550 million were down $500 million, largely driven by Card.
CONSUMER & COMMUNITY BANKING (CCB)
Discussion of Results:
Net income was $4.2 billion, down 2%. Net revenue was $12.3 billion, down 4%.
Consumer & Business Banking net revenue was $6.2 billion, up 7%, driven by higher asset management fees on growth in client investment assets, the impact of PPP including the accelerated recognition of deferred processing fees due to loan forgiveness, and increased debit transactions. Home Lending net revenue was $1.1 billion, down 26%, predominantly driven by lower production margins, partially offset by higher net interest income on lower prepayments. Card & Auto net revenue was $5.0 billion, down 9%, driven by higher acquisition costs in Card and lower operating lease income in Auto.
Noninterest expense was $7.8 billion, up 10%, driven by increased compensation, technology and marketing expense as we continue to invest in and grow the business.
The provision for credit losses was a net benefit of $1.1 billion, reflecting a $1.6 billion reserve release, primarily in Card driven by continued resilience in the macroeconomic environment, compared to a $900 million reserve release in the prior year. Net charge-offs were $515 million, down $302 million, driven by Card.
https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2021/4th-quarter/ae462261-4964-48c6-b947-4b69963d1143.pdf
Morgan Stanley (NYSE: MS)
At Morgan Stanley, we believe capital can work to benefit all of society.
As a leading global financial services provider, we advise, originate, trade, manage and distribute capital for governments, corporations, institutions and individuals. By putting clients first, leading with exceptional ideas, doing the right thing and giving back, we aim to deliver results today while advancing strategic goals for the future.
The pursuit of sustainability is core to our approach as a global financial services provider. By considering environmental, social and governance (ESG) factors in our business activities and mobilizing capital to deliver sustainable growth and long-term value, we help our clients build a sustainable future.
Strong governance, ethical business conduct, risk management and support for our skilled workforce underpin our business success and sustainable investing efforts. Through innovative, scalable solutions, we aim to deliver competitive financial returns while driving positive environmental and social impact.
Source: 2017 Sustainability Report
https://www.morganstanley.com/pub/content/dam/msdotcom/about-us/giving-back/sustainability-at-morgan-stanley/2017_MS_Sustainability_Report.pdf
Wealth Management
We help individuals reach their long-term financial goals.
Investment Banking & Capital Markets
Corporations, organizations, and governments around the world rely on Morgan Stanley's reputation as a global leader in investment banking. Our advisory and capital-raising services are recognized as among the best in the industry.
Sales & Trading
Global institutions. Cutting-edge hedge funds. Industry innovators-all turn to Morgan Stanley for sales, trading and market-making services, as we work to find new forms of investment to generate superior returns.
Research
Timely, in-depth analysis of companies, industries, markets and world economies has earned Morgan Stanley's reputation as a leader in the field of investment research.
Investment Management
Morgan Stanley strives to provide outstanding long-term investment performance, service, and a comprehensive suite of investment management solutions to a diverse client base, which includes governments, institutions, corporations and individuals worldwide.
https://www.morganstanley.com/what-we-do
Morgan Stanley Fourth Quarter and Full Year 2021 Earnings Results
19 January 2022
Morgan Stanley Reports Fourth Quarter Net Revenues of $14.5 Billion, EPS of $2.01 and ROTCE of 19.8%; Record Full Year Net Revenues of $59.8 Billion, EPS of $8.03 and ROTCE of 19.8%
NEW YORK, January 19, 2022 - Morgan Stanley (NYSE: MS) today reported net revenues of $14.5 billion for the fourth quarter ended December 31, 2021 compared with $13.6 billion a year ago. Net income applicable to Morgan Stanley was $3.7 billion, or $2.01 per diluted share,1 compared with $3.4 billion, or $1.81 per diluted share,1 for the same period a year ago.
Full year net revenues were $59.8 billion compared with $48.8 billion a year ago. Net income applicable to Morgan Stanley for the current year was $15.0 billion, or $8.03 per diluted share,1 compared with $11.0 billion, or $6.46 per diluted share,1 a year ago. The comparisons of current year results to prior periods were impacted by the acquisitions of E*TRADE Financial Corporation ("E*TRADE") and Eaton Vance Corp. ("Eaton Vance").
James P. Gorman, Chairman and Chief Executive Officer, said, "2021 was an outstanding year for our Firm. We delivered record net revenues of $60 billion and a ROTCE of 20%, with stand-out results in each of our business segments. Wealth Management grew client assets by nearly $1 trillion to $4.9 trillion this year, with $438 billion in net new assets. Combined with Investment Management, we now have $6.5 trillion in client assets. Our integrated investment bank has continued to gain wallet share. We have a sustainable business model with scale, capital flexibility, momentum and growth."
Full Year Highlights
The Firm's full year results reflect both record net revenues of $59.8 billion up 23% year over year and net income of $15.0 billion up 37%.
The Firm delivered full year ROTCE of 19.8%. 5,6
The full year Firm expense efficiency ratio was 67%. 6,7
Common Equity Tier 1 capital standardized ratio was 16.0%.
Institutional Securities reported record full year net revenues of $29.8 billion up 13% with strong revenues across Advisory, Underwriting, and Equity.
Wealth Management delivered a full year pre-tax margin of 25.5% or 26.9% excluding integrationrelated expenses. 6,8 The business added net new assets of $438 billion and total client assets under management were $4.9 trillion, up 23% from a year ago.
Investment Management reported full year net revenues above $6 billion driven by strong feebased asset management revenues on record AUM of $1.6 trillion.
https://www.morganstanley.com/content/dam/msdotcom/en/about-us-ir/shareholder/4q2021.pdf
PNC Financial Services Group Inc. (NYSE: PNC)
Corporate Overview
Our capabilities: Strong. Deep. Focused on you.
PNC offers a wide range of services for all our customers, from individuals and small businesses, to corporations and government entities. No matter how simple or complicated your needs, we're sure to have the products, knowledge and resources necessary for financial success.
Retail Banking
At PNC, we work hard to provide the easiest way to bank and invest to help customers achieve financial well-being.
We strive to provide a great customer experience through our branches, care center, ATMs, online and mobile solutions. Customers have secure and convenient access to personal financial expertise, tools and competitive products and services.
More than 8 million consumers and small businesses use our various deposit, lending, credit card, cash management and investment services. You can find PNC branches, solution centers and ATMs across the Mid-Atlantic, Midwest and Southeast. We also offer residential mortgage loans within our branch network and nationwide. We've expanded our Retail Bank nationally through a digital-focused, branch-thin strategy built around our Virtual Wallet® and a High Yield Savings product. We are growing customers across primarily digital channels supported by a limited number of brick-and-mortar solutions centers in select markets outside of our existing retail branch network.
Whether it's buying a home, saving for retirement, investing for the future or finding the right credit card, PNC Bank helps customers gain the confidence they need to make important financial decisions.
Asset Management Group
We deliver a wide variety of asset management insights and solutions to affluent and ultra-affluent individuals and families, as well as corporations, unions, municipalities, non-profits, foundations and endowments, through our Investment and National Practice Groups.
Asset Management Group consists of the following:
PNC Wealth Management® provides tailored investments, wealth planning, trust and estate administration, and private banking to high-net-worth families and individuals.
Hawthorn is one of the country's largest multi-family offices, providing integrated wealth management solutions to ultra-affluent families and individuals.
PNC Institutional Asset Management® serves as investment manager and trustee for companies, not-for-profit organizations and retirement plans nationally. PNC Capital Advisors, LLC, a multi-strategy registered investment advisor, focuses on supporting clients' long-term investment objectives.
As of September 30, 2019, we had $298 billion of assets under administration.
Corporate & Institutional Banking
PNC competes to win in the middle market, where we are proud to be one of the leading credit providers to middle market companies across the country. PNC is in the top five syndicators of middle market loan transactions for each of the last five years.
But credit is only part of the story. Underpinning our success at building deep and lasting relationships with middle market clients is our breadth of capabilities--including extensive treasury management, capital markets and international banking services--many of which have been tailored specifically for the middle market audience.
PNC is an industry leader in many other target markets as well. Our client list includes more than two-thirds of the Fortune® 500 as well as thousands of real estate, utilities, healthcare, government, higher education and not-for-profit entities. All of these clients, including many of the nation's largest competitors in their respective specialties, benefit from PNC's deep industry knowledge and our sophisticated capital raising, treasury management and capital markets capabilities.
Whether your strategy involves growing your company with access to the right capital, or transitioning ownership to your employees or enabling a strategic direction, PNC can help. Through Harris Williams, an investment bank with a legacy in the middle market specializing in M&A advisory services, Solebury, a premier Equity Capital Markets and Investor Relations Advisory firm, and PNC ESOP Solutions, we offer a family of capabilities and specialized advisors to provide sophisticated advice and hands-on transaction support.
BlackRock
PNC holds a minority ownership stake in BlackRock, one of the largest publicly traded investment management firms in the country. BlackRock works on behalf of institutional and individual investors worldwide through a variety of equity, fixed income, liquidity and alternative investment products. In addition, it provides risk management, investment system outsourcing, and financial advisory services to a growing number of institutional investors.
https://www.pnc.com/en/about-pnc/company-profile/corporate-overview.html
PNC REPORTS FULL YEAR 2021 NET INCOME OF $5.7 BILLION, $12.70 DILUTED EPS OR $14.18 AS ADJUSTED
18 January 2022
Fourth quarter net income was $1.3 billion, $2.86 diluted EPS or $3.68 as adjusted
Generated full year record revenue; closed, converted and integrated BBVA USA
BBVA USA
PNC acquired BBVA USA on June 1, 2021, adding approximately 2.6 million customers, 9,000 employees and over 600 branches across seven states. Full year 2021 financial results include the addition of BBVA USA operations since June 1, 2021.
Since the announcement of the acquisition, PNC has incurred $925 million of merger and integration costs, including $120 million in write-offs of capitalized items, or approximately 95% of the $980 million expected.
Income Statement Highlights
Fourth quarter 2021 compared with third quarter 2021
Net income of $1.3 billion decreased $184 million, or 12%.
Integration costs of $438 million pre-tax increased $195 million.
Total revenue of $5.1 billion decreased $70 million, or 1%.
Net interest income of $2.9 billion increased $6 million primarily driven by higher securities balances.
Net interest margin of 2.27% was stable.
Noninterest income of $2.3 billion decreased $76 million, or 3%, and included the negative impact of $47 million of integration costs.
Fee income of $1.8 billion decreased $67 million, or 4%, as continued high levels of corporate service business activity was more than offset by a decline in residential mortgage revenue, lower service charges on deposits, and integration costs of $28 million reflecting fee waivers for BBVA USA customers related to conversion.
Other noninterest income of $440 million decreased $9 million, or 2%, and included integration costs of $19 million related to BBVA USA lease exits.
Noninterest expense of $3.8 billion increased $204 million, or 6%, including integration expenses of $391 million and higher personnel costs which reflected an increase to PNC's minimum wage.
The fourth quarter of 2021 included a provision recapture of $327 million, reflecting continued improvements in the economic environment. The third quarter included a provision recapture of $203 million.
The effective tax rate was 21.5% for the fourth quarter, 17.8% for the third quarter and 18.1% for full year 2021.
Balance Sheet Highlights
Fourth quarter 2021 compared with third quarter 2021 or December 31, 2021 compared with September 30, 2021
Average loans of $288.9 billion decreased $2.4 billion, or 1%, driven by Paycheck Protection Program (PPP) loan forgiveness of $4.7 billion.
Excluding the impact of PPP loan forgiveness, average commercial loans increased $2.2 billion driven by growth in PNC corporate banking and business credit businesses.
Average consumer loans of $95.1 billion increased modestly driven by growth in residential mortgage loans, largely offset by declines in home equity and auto loans.
Credit quality performance:
Delinquencies of $2.0 billion increased $516 million, or 35%, primarily due to BBVA USA conversion-related administrative and operational delays which should largely be resolved within the first half of 2022.
Total nonperforming loans of $2.5 billion were stable.
Net loan charge-offs of $124 million increased $43 million driven by higher consumer loan net charge-offs, reflecting BBVA USA conversion-related impacts and seasonality.
The allowance for credit losses to total loans was 1.92% at December 31, 2021 compared with 2.07% at September 30, 2021.
Average deposits of $452.8 billion decreased $1.6 billion, as growth in commercial and consumer deposits was more than offset by legacy BBVA USA commercial deposit outflows reflecting the impact of strategic repricing decisions in the third quarter.
Deposits of $457.3 billion increased $8.4 billion as a result of growth in consumer deposits.
Average investment securities of $127.8 billion increased $7.3 billion, or 6%.
Average Federal Reserve Bank balances of $75.1 billion decreased $5.0 billion, primarily reflecting increased securities purchases.
PNC maintained strong capital and liquidity positions.
On January 5, 2022, the PNC board of directors declared a quarterly cash dividend on common stock of $1.25 per share payable on February 5, 2022.
The Basel III common equity Tier 1 capital ratio was an estimated 10.2% at December 31, 2021 and 10.3% at September 30, 2021.
The Liquidity Coverage Ratio at December 31, 2021 for PNC exceeded the regulatory minimum requirement.
https://thepncfinancialservicesgroupinc.gcs-web.com/news-releases/news-release-details/pnc-reports-full-year-2021-net-income-57-billion-1270-diluted
State Street Corporation (NYSE: STT)
Our clients are looking to the future. We're helping them get there.
We're responsible for more than 10 percent* of the world's assets. Large enough to serve more than 100 markets, we're local enough to deliver on the ground. This means we're closer to the world's investments; closer to the communities where we operate; and closer to the clients we serve.
Our clients face big challenges. Where to look next for growth. How to use the insights from their data. Which functions to outsource. It's those challenges that inspire our solutions. Tapping into the power of our technology, people, insights and experience, we're creating new ways to help you reach your goals. It's what we call "asset intelligence." And it's shaping our way ahead.
http://www.statestreet.com/about.html
STATE STREET REPORTS SECOND QUARTER 2023 EPS OF $2.17
July 14, 2023
TOTAL REVENUE UP 5%
NET INTEREST INCOME GROWTH OF 18%
STRONG FLOWS IN ASSET MANAGEMENT
PRE-TAX MARGIN OF 29.5% AND ROE OF 13.0%
RETURNED $1.3 BILLION OF CAPITAL THROUGH COMMON SHARE REPURCHASES AND DIVIDENDS
Ron O'Hanley, Chairman and Chief Executive Officer: "Our second-quarter results reflect the strength of our business model year-over-year as strong net interest income growth, a significant expansion in front office solutions and higher securities finance revenue contributed to improved EPS and ROE. Quarter-over-quarter we saw good fee momentum across a number of our businesses, helped by accelerated onboarding of our tobe-installed AUC/A pipeline, while we continued to invest and serve our clients."
O'Hanley added: "Our strong balance sheet and capital generation enabled us to return approximately $1.3 billion to shareholders through common share repurchases and dividends in the second quarter. We are also pleased by the results from this year's supervisory stress test, which once again confirm the resiliency and strength of our franchise. For the third consecutive year, we announced our plan to increase our per share common stock dividend by 10%, and we intend to continue to execute on our common share repurchase authorization of up to $4.5 billion during 2023, subject to market conditions and other factors."
2Q23 HIGHLIGHTS
(all comparisons are to 2Q22, unless otherwise noted)
AUC/A and AUM
Investment Servicing AUC/A as of quarter-end increased 4% to $39.6 trillion, primarily driven by higher quarter-end equity marketlevels and client flows
Investment Management AUM as of quarter-end increased 9% to $3.8 trillion, primarily due to higher quarter-end market levels
New business and strategy execution
Investment Servicing mandates: New servicing wins of $141 billion announced in 2Q23, primarily reflecting continued strong sales in the Asset Owners, Official Institutions and Alternatives client segments
$1.2 trillion of AUC/A onboarded during 2Q23
Quarter-end servicing assets to be installed in future periods of $2.4 trillion
State Street AlphaSM: Alpha continued to gain momentum, including expanded relationships for existing mandates; 3 Alpha clients went live in 2Q23, resulting in a total of 15 live clients to-date
Front Office Software and Data: SaaS client implementations and conversions increased annual recurring revenue (ARR) to $281 million, up 12%(a)
Investment Management: Net inflows of $38 billion across ETFs, Cash and Institutional
Revenue
Total revenue increased by 5%, driven by NII growth of 18% and Fee revenue growth of 2%, reflecting stronger Front office software and data revenue, Securities lending revenue, and other fee revenue, partially offset by lower Back-office servicing fees, Management fees, and FX trading services revenue
Servicing fees decreased 3%
Management fees decreased 6%
FX trading services decreased 8%
Securities finance increased 9%
Software and processing fees increased 18%
Other fee revenue increased $101 million, primarily due to a tax credit investment accounting change and the absence of negative market-related adjustments Expenses
Total expenses increased 5%, primarily reflecting higher salaries, headcount and business investments, partially offset by continued productivity savings
Compensation and employee benefits increased 7%, mainly due to higher salaries and headcount
Non-compensation expense increased 3%, primarily reflecting higher Information systems and communications expense, elevated Occupancy costs and higher Other expenses, partially offset by lower Transaction processing costs and benefits from ongoing productivity initiatives Provision for credit losses
Provision for credit losses reflects an $18 million reserve release in 2Q23, driven by the release of the allowance for credit losses related to our support of a U.S. financial institution in the prior quarter, partially offset by an increase in loan loss reserves associated with credit portfolio rating changes
Capital and liquidity
Standardized common equity tier 1 (CET1) ratio at quarter-end of 11.8% decreased 1.1% points compared to 2Q22 and decreased 0.3% points compared to 1Q23, primarily driven by the continuation of common share repurchases, partially offset by retained earnings
Liquidity coverage ratio (LCR) for State Street Corporation was approximately 108% and LCR for State Street Bank and Trust was approximately 120%
Capital return: In 2Q23, State Street returned a total of approximately $1.3 billion of capital, consisting of $1.05 billion in common share repurchases and declared common stock dividends of $203 million, or $0.63 per share
https://s201.q4cdn.com/681076340/files/doc_financials/2023/q2/STT-2Q23-Earnings-Press-Release.pdf
SunTrust Banks Inc. (NYSE: TFC)
Sun Trust Banks Inc. (formerly NYSE: STI) and BB&T Corporation (formerly NYSE: BBT) merged to become Truist Financial Corporation (NYSE: TFC).
The Sun Trust Banks Inc. bonds changed symbol to reflect the merger and the new name and ticker symbol of the common stock on Monday, 9 December 2019.
https://www.nyse.com/trader-update/history#110000182403
https://www.nyse.com/trader-update/history#110000178314
https://www.suntrust.com/truist?icid=truistld1_brand_ld1_hero_na_l1_1030_1028_default
Spreading Financial Confidence across America
What gets you out of bed in the morning?
Your answer is a reflection of who you are, what you value, where you want to go in life - and playing a role in helping you take on that challenge and achieve your aspirations is what we love most about our purpose as SunTrust teammates.
We've helped musicians in Nashville hit the right notes in getting their careers started, family businesses grow and go multinational, and newlyweds start their life together by financing their first home.
Our purpose, Lighting the Way to Financial Well-Being, takes many forms, but put simply: whatever drives your purpose at whatever stage of life-we're here to help you live it, every day.
Everyone can achieve financial confidence
And it's our purpose to help you find it. But getting on the right path and avoiding roadblocks is an ongoing challenge. That's why we launched TheonUp Movement. To help people move onward and upward toward financial confidence - with less stress of "what if" and more freedom to focus on "what's next." To date, we've helped over 4 million people (and counting) find the right tools, resources and motivation on their journey toward a life well spent.
Take it one step at a time
You're not alone in this journey toward financial confidence-nor should you be. It's different for everyone, but here are some resources that could help:
The onUp Movement: a community of people gaining more financial confidence-breaking taboos and sharing what they learn. It's made for everyone and it's easy to join.
Momentum onUp®: an industry-leading workplace financial wellness program designed to inspire, educate, and equip employees. Offered as a part of its purpose of Lighting the Way to Financial Well-Being, SunTrust does not seek to make a profit from the program. See how Momentum onUp can help your employees and your business achieve financial confidence.
Community Programs: that support education, reach more people and build a vision for the future.
And our teammates make it all possible
We are so passionate about putting our purpose into action that we literally gave our own shoes to a flood victim who came into a branch seeking help. (True story.) Or drove 50 miles to bring a new ATM card to a veteran who couldn't leave his base. (Also a true story.)
There are many stories just like this, and every single one shows the difference that living with purpose-and building your confidence-can make
https://www.suntrust.com/about-suntrust
TD Group US Holdings LLC (NYSE: TD, TSX: TD)
TD Bank, America's Most Convenient Bank ® , is one of the 10 largest banks in the U.S. with deep roots in the community dating back more than 150 years.
TD Bank offers a broad array of retail, small business and commercial banking products and services to millions of customers through its extensive network of thousands of convenient locations and ATMs throughout the Northeast, Mid-Atlantic, Metro D.C., the Carolinas and Florida. TD Bank is headquartered in Cherry Hill, New Jersey.
In addition to banking products, TD Bank and its subsidiaries provide clients with customized private banking and wealth management services through TD Wealth ® and vehicle financing and dealer commercial services through TD Auto Finance.
TD Bank is a member of TD Bank Group and a subsidiary of The Toronto-Dominion Bank of Toronto, Canada, a top 10 financial services company in North America. The Toronto-Dominion Bank trades on the New York and Toronto stock exchanges under the ticker symbol "TD."
https://www.tdbank.com/aboutus/investor_relations.html
Corporate Profile
TD Bank Group
Headquartered in Toronto, Canada, with more than 85,000 employees in offices around the world, The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group (TD). TD offers a full range of financial products and services to over 26 million customers worldwide through three key business lines:
Canadian Retail including TD Canada Trust, Business Banking, TD Auto Finance (Canada), TD Wealth (Canada), TD Direct Investing and TD Insurance
U.S. Retail including TD Bank, America's Most Convenient Bank, TD Auto Finance (U.S.), TD Wealth (U.S.) and TD's investment in TD Ameritrade
Wholesale Banking including TD Securities
TD had CDN$1.4 trillion in assets on July 31, 2019. TD also ranks among the world's leading online financial services firms, with more than 13 million active online and mobile customers. The Toronto-Dominion Bank trades on the Toronto and New York stock exchanges under the symbol "TD".
The Toronto-Dominion Bank is a chartered bank subject to the provisions of the Bank Act (Canada). It was formed on February 1, 1955 through the amalgamation of The Bank of Toronto, chartered in 1855, and The Dominion Bank, chartered in 1869.
https://www.td.com/about-tdbfg/corporate-information/corporate-profile/profile.jsp
TD Bank Group Reports Fourth Quarter and Fiscal 2021 Results
2 December 2021
FOURTH QUARTER FINANCIAL HIGHLIGHTS, compared with the fourth quarter last year:
Reported diluted earnings per share were $2.04, compared with $2.80.
Adjusted diluted earnings per share were $2.09, compared with $1.60.
Reported net income was $3,781 million, compared with $5,143 million.
Adjusted net income was $3,866 million, compared with $2,970 million.
FULL YEAR FINANCIAL HIGHLIGHTS, compared with last year:
Reported diluted earnings per share were $7.72, compared with $6.43.
Adjusted diluted earnings per share were $7.91, compared with $5.36.
Reported net income was $14,298 million, compared with $11,895 million.
Adjusted net income was $14,649 million, compared with $9,968 million.
FOURTH QUARTER ADJUSTMENTS (ITEMS OF NOTE) The fourth quarter reported earnings figures included the following items of note:
Amortization of intangibles of $74 million ($65 million after tax or 4 cents per share), compared with $61 million ($53 million after tax or 3 cents per share) in the fourth quarter last year.
Acquisition and integration charges related to the Schwab transaction of $22 million ($20 million after-tax or 1 cent per share).
TORONTO, December 2, 2021 - TD Bank Group ("TD" or the "Bank") today announced its financial results for the fourth quarter ended October 31, 2021. Reported earnings were $3.8 billion, down 26% compared with the fourth quarter last year, primarily reflecting a net gain on the sale of the Bank's investment in TD Ameritrade. Adjusted earnings were $3.9 billion, up 30%.
"In 2021, we demonstrated the value of our diversified business model, delivering continued growth and shareholder returns while supporting millions of households and businesses through a second year of COVID-19-related disruption and uncertainty," said Bharat Masrani, Group President and CEO, TD Bank Group. "Forward-focused investments in new capabilities and innovation drove higher loan and deposit volumes in our retail businesses, increased revenues in Wealth and Insurance, and strong results in our Wholesale business in the fourth quarter of 2021. We ended the year in a position of strength, with a growing base of customers across highly competitive and diversified businesses and a robust capital position, enabling us to increase our dividend and providing us with a strong foundation upon which to continue building our business in 2022."
The Bank announced a dividend increase of ten cents per common share for the quarter ended January 31, 2022, an increase of 13%.
https://www.td.com/document/PDF/investor/2021/2021-Q4_Earnings_News_Release_F_EN.pdf
Truist Financial Corporation (NYSE: TFC)
BB&T and SunTrust formed Truist with a shared purpose-to inspire and build better lives and communities. With our combined resources, collective passion, and commitment to innovation, we're creating a better financial experience to help people and businesses achieve more.
SunTrust and BB&T have combined in a historic merger of equals to create Truist, the sixth largest U.S. bank holding company. With 275 years of combined history serving clients and communities in high-growth markets, our new company will deliver the best of both companies' talent, technology and processes.
6 th largest U.S. bank, $301B loans, ~10MM households, $324B deposits
https://www.truist.com/who-we-are/about-truist
https://www.truist.com/
Truist reports fourth quarter and full year 2021 results
18 January 2022
CHARLOTTE, N.C., (January 18, 2022) - Truist Financial Corporation (NYSE: TFC) today reported earnings for the fourth quarter and full year of 2021.
Net income available to common shareholders was $1.5 billion, up 24%, compared to the fourth quarter last year. Earnings per diluted common share were $1.13, an increase of 26% compared with the same period last year. Results for the fourth quarter produced an annualized return on average assets (ROA) of 1.19%, an annualized return on average common shareholders' equity (ROCE) of 9.8%, and an annualized return on tangible common shareholders' equity (ROTCE) of 18.9%.
Adjusted net income available to common shareholders was $1.9 billion, or $1.38 per diluted share, excluding merger-related and restructuring charges of $212 million ($163 million after-tax) and incremental operating expenses related to the merger of $215 million ($165 million after-tax). Adjusted results produced an annualized ROA of 1.43%, an annualized ROCE of 11.9%, and an annualized ROTCE of 22.6%. Adjusted earnings per diluted share were up 17% compared to the prior year.
For the full year 2021, net income available to common shareholders was $6.0 billion compared to $4.2 billion for 2020. Earnings per diluted share were $4.47 for 2021, up 45%, compared to $3.08 for 2020. Results for 2021 produced an ROA of 1.23%, an ROCE of 9.7%, and an ROTCE of 18.4%.
Adjusted net income available to common shareholders for the full year 2021, which excludes mergerrelated charges, incremental operating expenses related to the merger and certain other items as detailed in our non-GAAP reconciliations was $7.5 billion compared to $5.2 billion for 2020. Adjusted diluted earnings per share was a record $5.53, up 46%, compared to $3.80 for 2020. Adjusted results for 2021 produced an ROA of 1.50%, an ROCE of 11.9%, and an ROTCE of 22.0%.
"Our fourth quarter results reflect a strong finish to an impactful year for Truist," said Chief Executive Officer Bill Rogers. "The quarter reflects improved revenue momentum and excellent credit quality, as well as significant capital deployment, and the achievement of our cost savings targets. Our diverse business model and progress on the merger, combined with a better economic environment drove stronger 2021 performance compared with 2020. In addition to our financial performance, we also made critical progress integrating our systems, activating our purpose, and expanding ESG and diversity initiatives.
"During the year, we lived our purpose to inspire and build better lives and communities in countless ways. We invested in key businesses and digital products to help drive greater financial success for our clients. Our Paycheck Protection Program lending helped small businesses, non-profits, and commercial clients receive critical funding and we ranked as the 4th largest PPP lender. We increased access to financial education for our clients through our partnership with Operation HOPE, issued our first social bond, and were recognized in JUST Capital's 'JUST 100' list for our ongoing efforts around good corporate citizenship.
"Truist has much to look forward to in 2022. In February, we will complete our largest client conversion and will eliminate merger costs by year end. We have strong momentum heading into the year with an improving loan growth trajectory and growing fee income businesses. We will shift from an integration mindset to an operating mindset focused on executional excellence and growth, accelerate investments in our businesses, all underpinned by our unwavering purpose. Our successes in 2021 reflect the efforts of tens of thousands of hardworking, purposeful teammates and I applaud them for their accomplishments as we continue building Truist."
Fourth Quarter and Full year 2021 Performance Highlights
* Earnings per diluted common share for the fourth quarter of 2021 were $1.13 * Adjusted diluted earnings per share were $1.38 up $0.20 per share, or 17%, compared to fourth quarter 2020
* ROA was 1.19%; adjusted ROA was 1.43%
* ROCE was 9.8%; adjusted ROCE was 11.9% * ROTCE was 18.9%; adjusted ROTCE was 22.6%
* Taxable-equivalent revenue for the fourth quarter of 2021 was $5.6 billion
* Taxable-equivalent revenue was down slightly compared to third quarter 2021 and down 1.6% compared to fourth quarter 2020
* Noninterest income was down 1.8% compared to third quarter 2021 and up 1.7% compared to fourth quarter 2020
* Excluding the impacts of lower income from assets for retiree benefits that is offset by lower personnel expense, noninterest income was stable compared to third quarter of 2021
* Strong results from investment banking and insurance
* Net interest income was up 0.3% compared to third quarter 2021 and down 3.7% compared to fourth quarter 2020
* Net interest margin was 2.76%, down five basis points from third quarter 2021
* Core net interest margin was 2.55%, down three basis points from third quarter 2021, primarily driven by lower Paycheck Protection Program (PPP) fees and continued liquidity build
* Noninterest expense for the fourth quarter of 2021 was $3.7 billion, down 2.5% compared to third quarter 2021 and 3.5% compared to fourth quarter 2020
* Adjusted noninterest expense was $3.1 billion, down 3.9% compared to third quarter 2021 and 1.4% compared to fourth quarter 2020
* GAAP efficiency ratio was 66.5%, compared to 67.8% for third quarter 2021
* Adjusted efficiency ratio was 56.0%, compared to 57.9% for third quarter 2021
* Asset quality remains excellent, reflecting our prudent risk culture, diverse portfolio, improving economic conditions, and the ongoing effects of government stimulus
* Nonperforming assets were 0.21% of total assets, down two basis points from third quarter 2021
* Net charge-offs were 0.25% of average loans and leases, up six basis points compared to third quarter 2021
* The ALLL ratio was 1.53% compared to 1.65% for third quarter 2021
* Provision for credit losses was a benefit of $103 million for fourth quarter 2021, primarily reflecting an improving economic outlook
* The ALLL coverage ratio was 4.07X nonperforming loans and leases held for investment, versus 4.35X in third quarter 2021
* Capital and liquidity levels remained strong; deployed capital through organic loan growth, dividend, share repurchases and acquisitions
* Common equity tier 1 to risk-weighted assets was 9.6%
* Repurchased $500 million of common shares
* Completed acquisition of Service Finance, LLC to expand point-of-sale lending capabilities
* Consolidated average LCR ratio was 114%
* Full year 2021 financial highlights
* Earnings per diluted common share were $4.47, up 45% from 2020; Adjusted earnings per diluted common share were $5.53, up $1.73, or 46%, from 2020
* Improvement in earnings primarily driven by reserve releases
* Total taxable-equivalent revenues of $22.4 billion were down $426 million, or 1.9%, compared to $22.8 billion in 2020
* Net interest income was down $820 million, or 5.9%, primarily due to lower purchase accounting accretion and the lower rate environment
* Noninterest income was up $411 million, or 4.6%; excluding securities gains, noninterest income was up $813 million, or 9.6%,
* 2021 was highlighted by strong performance from investment banking, insurance, wealth and card and payment related fees
* Noninterest expense was up $219 million, or 1.5%; Adjusted noninterest expense was up $154 million, or 1.2%; increase driven by incentives expense due to stronger performance and insurance acquisitions
* Provision for credit losses was down $3.1 billion primarily due to reserve releases in the current year as the economic outlook improved compared to reserve builds in 2020 due to uncertainty regarding the pandemic
https://ir.truist.com/download/TFC+4Q21+Earnings+Release.pdf
U.S. Bancorp (NYSE: USB)
Our company
Our relationships are built on trust that we build every day through every interaction. Our employees are empowered to do the right thing to ensure they share our customers' vision for success. We work as a partner to provide financial products and services that make banking safe, simple and convenient. We're here to help navigate important milestones and strengthen futures together.
Our history
Our history dates back to 1863 when First National Bank of Cincinnati opened for business. As regional banks proliferated across the country in the years that followed, a number of other predecessors were born. After a series of mergers at the turn of the 21st century, we formally took on the U.S. Bank name and established our headquarters in Minnesota. Today, U.S. Bank is the fifth-largest bank in the country, with more than 70,000 employees and $495 billion in assets as of December 31, 2019.
Our businesses
Our diverse business mix is fundamental in delivering a consistent, predictable and repeatable financial performance year after year. Our core businesses include Consumer & Business Banking, Corporate & Commercial Banking, Payment Services and Wealth Management & Investment Services. Through our "One U.S. Bank" philosophy, we are able to bring the power of the whole bank to every customer, every single day.
https://www.usbank.com/about-us-bank.html
U.S. Bancorp Q21 and Full Year Key Financial Data
19 January 2022
4Q21 and Full Year Highlights
* Net income of $1,673 million and diluted earnings per common share of $1.07 for 4Q21
* Return on average assets of 1.16% and return on average common equity of 13.0% for 4Q21
* Net revenue decline driven by lower mortgage banking revenue, partially offset by higher trust and investment management fees
* Strong deposit growth supported related investment portfolio and cash balance strategies to optimize asset sensitivity going into 2022. While dilutive to NIM, this was a net benefit to net interest income. This elevated liquidity drove NIM to decline 6 basis points while lower Paycheck Protection Program "PPP" loan fees accounted for 6 basis points decline * Net charge-off ratio of 0.17% in 4Q21 compared with 0.20% in 3Q21 and 0.58% in 4Q20
* Average total loans grew 2.0% on a linked quarter basis
* Full year net income of $7,963 million and diluted earnings per common share of $5.10
* Full year average earning assets growth of 5.1%
* ull year average total deposits growth of 8.9%
* CET1 capital ratio increased to 10.0% at December 31, 2021, compared with 9.7% at December 31, 2020
INCOME STATEMENT HIGHLIGHTS
Net income attributable to U.S. Bancorp was $1,673 million for the fourth quarter of 2021, which was $154 million higher than the $1,519 million for the fourth quarter of 2020, and $355 million lower than the $2,028 million for the third quarter of 2021. Diluted earnings per common share were $1.07 in the fourth quarter of 2021, compared with $0.95 in the fourth quarter of 2020 and $1.30 in the third quarter of 2021.
The increase in net income year-over-year was primarily due to lower provision for credit losses, partially offset by lower net interest income, lower noninterest income, and higher noninterest expense. Net interest income decreased 1.6 percent on a year-over-year taxable-equivalent basis due to lower loan spreads and mix of earning assets, partially offset by higher investment portfolio balances and the benefit of deposit and funding mix. The net interest margin declined from 2.57 percent a year ago to 2.40 percent in the fourth quarter of 2021 primarily due to the mix of loans, lower loan spreads and higher investment portfolio balances, partially offset by the net benefit of funding composition. Noninterest income decreased 0.6 percent compared with a year ago primarily reflecting lower mortgage banking revenue, other noninterest income, and securities gains, mostly offset by improvements in payments revenue, trust and investment management fees, deposit service charges, and commercial products revenue. Noninterest expense increased 5.0 percent reflecting increases in compensation expense, primarily related to performance-based incentive compensation, as well as higher employee benefits expense, professional services expense and marketing and business development expense, partially offset by lower other noninterest expense.
Net income decreased on a linked quarter basis primarily due to lower net interest income, mainly due to lower loan fees related to the SBA Paycheck Protection Program, and lower noninterest income, primarily due to seasonally lower payments and capital markets revenues and lower mortgage banking revenue as refinancing continued to decline. In addition, noninterest expense increased and the provision for credit losses was higher due to reductions in the allowance for credit losses in the third quarter of 2021. Net interest income on a taxable-equivalent basis decreased 1.5 percent primarily due to the impact of loan forgiveness related to the Paycheck Protection Program ("PPP"), earning asset mix and lower loan yields, partially offset by strong growth in average loan balances. The net interest margin declined 13 basis points from 2.53 percent on a linked quarter basis primarily reflecting lower PPP loan fees as well as the impact of strong deposit flows and related investment and cash balance strategies. Noninterest income decreased 5.9 percent compared with the third quarter of 2021 driven by seasonally lower payments and capital markets revenues and lower mortgage banking revenue, partially offset by improvements in trust and investment management fees. Noninterest expense increased 3.0 percent on a linked quarter basis reflecting higher employee benefits expense, professional services expense, marketing and business development expense and amortization of tax-advantaged investments.
https://ir.usbank.com/static-files/00d399ec-801b-4097-be21-a50e961d91fc
Wells Fargo &Company (NYSE: WFC)
Wells Fargo & Company is a diversified, community-based financial services company with $1.9 trillion in assets. Wells Fargo's vision is to satisfy our customers' financial needs and help them succeed financially. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, investment and mortgage products and services, as well as consumer and commercial finance, through 7,400 locations, more than 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 32 countries and territories to support customers who conduct business in the global economy. With approximately 260,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 29 on Fortune's 2019 rankings of America's largest corporations.
https://www.wellsfargo.com/about/
Wells Fargo Reports Second Quarter 2023 Net Income of $4.9 billion, or $1.25 per Diluted Share
07/14/2023
Chief Executive Officer Charlie Scharf commented, "We reported solid results in the second quarter, with net income of $4.9 billion and revenue of $20.5 billion. Our strong net interest income continued to benefit from higher interest rates, and we remained focused on controlling expenses. As expected, net loan charge-offs increased from the first quarter. Consumer charge-offs continued to deteriorate modestly. Commercial charge-offs increased driven by a small number of borrowers in Commercial Banking, with little signs of systemic weakness across the portfolio, and higher losses in commercial real estate, primarily in the office portfolio. We had a $949 million increase in the allowance for credit losses, primarily for commercial real estate office loans, as well as for higher credit card loan balances. While we haven't seen significant losses in our office portfolio to-date, we are reserving for the weakness that we expect to play out in that market over time."
"The recent Federal Reserve stress test affirmed that Wells Fargo remains in a strong capital position, reflecting the value of our franchise and the benefits of our operating model. We repurchased $4 billion of common stock in the second quarter while maintaining our strong capital position. Our CET1 ratio was 10.7%, 1.5 percentage points above our current regulatory minimum plus buffers, and 1.8 percentage points above our expected new regulatory minimum plus buffers starting in the fourth quarter of this year. While we expect to repurchase more common stock this year, we believe continuing to maintain significant excess capital is prudent until there is more specificity on the new bank capital requirements," Scharf added.
"Our company remains strong and we have significant opportunities to continue to improve how we serve our customers. The U.S. economy continues to perform better than many had expected, and although there will likely be continued economic slowing and uncertainty remains, it is quite possible the range of scenarios will narrow over the next few quarters. We remain prepared for a variety of scenarios and our steadfast commitment to our risk and control buildout coupled with our continued focus on financial and credit risk management allows us to support our customers throughout economic cycles," Scharf concluded.
Second Quarter 2023 vs. Second Quarter 2022
Net interest income increased 29%, primarily due to the impact of higher interest rates and higher loan balances, partially offset by lower deposit balances
Noninterest income increased 8%, driven by higher trading revenue in our Markets business and lower impairments in our affiliated venture capital and private equity businesses, partially offset by lower deposit-related fees, a decline in asset-based fees in Wealth and Investment Management on lower market valuations, and lower net gains on the sales of debt securities in our investment portfolio
Noninterest expense increased 1% driven by higher salaries expense, including higher severance expense, as well as higher technology and equipment expense, FDIC assessments, and advertising costs, partially offset by lower operating losses and the impact of efficiency initiatives
Provision for credit losses in second quarter 2023 included a $949 million increase in the allowance for credit losses primarily for commercial real estate office loans, as well as for higher credit card loan balances
Second Quarter 2023 vs. First Quarter 2023
Commercial net loan charge-offs as a percentage of average loans were 0.15% (annualized), up from 0.05%, driven by higher net loan charge-offs in the commercial and industrial portfolio and higher commercial real estate net loan chargeoffs, primarily in the office portfolio. The consumer net loan charge-off rate increased to 0.58% (annualized), up from 0.56%, primarily due to higher net loan charge-offs in the credit card portfolio, partially offset by lower net loan chargeoffs in the auto portfolio
Nonperforming assets increased $877 million, or 14%, driven by higher commercial real estate nonaccrual loans, partially offset by lower residential mortgage nonaccrual loans
Operating Segment Performance
Consumer Banking and Lending offers diversified financial products and services for consumers and small businesses with annual sales generally up to $10 million. These financial products and services include checking and savings accounts, credit and debit cards, as well as home, auto, personal, and small business lending.
Second Quarter 2023 vs. Second Quarter 2022
Revenue increased 11%
Consumer and Small Business Banking was up 19% driven by the impact of higher interest rates, partially offset by lower deposit balances. Deposit-related fees declined reflecting our efforts to help customers avoid overdraft fees
Home Lending was down 13% on lower net interest income due to loan spread compression and a decline in mortgage banking income driven by lower originations
Credit Card was up 1% driven by higher loan balances, including the impact of higher point of sale volume and new product launches, which included the impact of introductory promotional rates
Auto was down 13% driven by loan spread compression and lower loan balances
Personal Lending was up 17% on higher loan balances, partially offset by loan spread compression
Noninterest expense was stable, as lower personnel expense, including the impact of efficiency initiatives, and lower operating losses were largely offset by higher operating costs, advertising expense, and FDIC assessments
For the full release, see:
https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/earnings/second-quarter-2023-earnings.pdf
ACQ_REF: IS/42678/20240401/USA/14/3
ACQ_AUTHOR: Associate/Laura Eva Anak Ramles
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