US BANCORP DE
For the period ended Jun 30, 2024. Filed Aug 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 6, 2024
USB$59.45-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-01.
0000036104-24-000037
Item 2. Management’s Discussion and Analysis2) Quantitative and Qualitative Disclosures About Market Risk/Corporate Risk Profile (Item 3)3) Line of Business Financial ReviewCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0000036104-24-000052
Item 2. Management’s Discussion and Analysis2) Quantitative and Qualitative Disclosures About Market Risk/Corporate Risk Profile (Item 3)3) Line of Business Financial ReviewThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 208 previous paragraphs and 218 current paragraphs.
96 unchanged; 95 reworded; 18 added; 11 removed; 6 previous and 9 current paragraphs rearranged.
Tables are not compared: 57 previous and 60 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
The provision for credit losses for the second quarter of 2024 was $253 million (30.8 percent) lower than the second quarter of 2023, driven by the impacts of balance sheet repositioning and capital management actions taken in the second quarter of 2023, along with stabilization in the economic and credit environment. Net charge-offs in the second quarter of 2024 were $538 million, compared with $649 million in the second quarter of 2023. Refer to “Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.
Current report
Net income attributable to U.S. Bancorp for the first six months of 2024 was $2.9 billion, or $1.75 per diluted common share, compared with $3.1 billion, or $1.87 per diluted common share, for the first six months of 2023. Return on
Current report
Total net revenue for the first six months of 2024 was $768 million (5.4 percent) lower than the first six months of 2023, reflecting an 11.5 percent decrease in net interest income, partially offset by a 5.4 percent increase in noninterest income. The decrease in net interest income from the first six months of 2023 was primarily due to the impact of higher interest rates on deposit mix and pricing, partially offset by higher rates on earning assets. The increase in noninterest income was driven by higher fee revenue across most categories.
Current report
Noninterest expense in the first six months of 2024 was $451 million (4.9 percent) lower than the first six months of 2023, primarily due to synergies from the MUB acquisition and lower merger and integration charges, prudent expense management and continued focus on operational efficiency, partially offset by higher marketing and business development expense.
Current report
The provision for credit losses for the first six months of 2024 was $127 million (10.2 percent) lower than the first six months of 2023, driven by the impacts of balance sheet repositioning and capital management actions taken in the second quarter of 2023. Net charge-offs were $1.0 billion in both of the first six months of 2024 and 2023. Refer to “Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.
Current report
respectively, than the same periods of 2023, driven by decreases in Wealth, Corporate, Commercial and Institutional Banking, and Consumer and Business Banking balances. The decreases were due in part to the impact of higher interest rates and a product change for certain MUB retail checking accounts into interest checking accounts at conversion to create a better customer experience.
Current report
Provision for Credit Losses The provision for credit losses was $568 million in the second quarter and $1.1 billion in the first six months of 2024, representing decreases of $253 million (30.8 percent) and $127 million (10.2 percent), respectively, from the same periods of 2023. The decreases were primarily driven by the impact of balance sheet repositioning and capital management actions in the second quarter of 2023. Net charge-offs decreased $111 million (17.1 percent) in the second quarter of 2024, compared with the second quarter of 2023, reflecting the impact of prior year charge-offs related to balance sheet repositioning and capital management actions, partially offset by higher credit card and commercial loan charge-offs in the current year. Net charge-offs increased $4 million (0.4 percent) in the first six months of 2024, compared with the first six months of 2023, reflecting higher credit card and commercial loan charge-offs, partially offset by the impacts of charge-offs in the prior year related to acquired loans and balance sheet repositioning and capital management actions. Refer to “Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.
Current report
Noninterest Expense Noninterest expense was $4.2 billion in the second quarter and $8.7 billion in the first six months of 2024, representing decreases of $355 million (7.8 percent) and $451 million (4.9 percent), respectively, from the same periods of 2023. The decreases from the prior year reflected synergies from the MUB acquisition and lower merger and integration charges, prudent expense management and continued focus on operational efficiency, partially offset by the impact of the FDIC special assessment and higher marketing and business development expense. Professional services expense and technology and communications expense decreased primarily due to synergies from the MUB acquisition. Compensation and employee benefits expense decreased in the second quarter of 2024, compared with the second quarter of 2023, primarily due to synergies from the MUB acquisition. Marketing and business development expense increased due to the timing of campaigns.
Current report
Credit card loans increased $155 million (0.5 percent) at June 30, 2024, compared with December 31, 2023, primarily driven by higher spend volume.
Current report
Analysis of Loan Net Charge-offs Total loan net charge-offs were $538 million for the second quarter of 2024, compared with $649 million for the second quarter of 2023. The decrease reflected the impact of charge-offs in the second quarter of 2023 related to balance sheet repositioning and capital management actions, partially offset by higher credit card and commercial loan charge-offs in the second quarter of 2024.
Current report
Total loan net charge-offs were $1.0 billion for both the first six months of 2024 and 2023, reflecting higher credit card and commercial loan charge-offs in the current year, offset by the impacts in the prior year of charge-offs on acquired loans and charge-offs related to balance sheet repositioning and capital management actions. The ratio of total loan net charge-offs to average loans outstanding on an annualized basis for the
Current report
second quarter and first six months of 2024 was 0.58 percent and 0.55 percent, respectively, compared with 0.67 percent and 0.53 percent, respectively, for the same periods of 2023.
Current report
(d)Includes provision for credit losses of $243 million related to balance sheet repositioning and capital management actions in the second quarter of 2023.
Current report
Noninterest expense decreased $6 million (0.4 percent) in the second quarter of 2024, compared with the second quarter of 2023, primarily due to synergies from the MUB acquisition, partially offset by higher compensation and employee benefits expense. Noninterest expense increased $8 million (0.3 percent) in the first six months of 2024, compared with the first six months of 2023, primarily due to higher compensation and employee benefits expense. The provision for credit losses decreased $62 million (38.3 percent) in the second quarter of 2024, compared with the second quarter of 2023, primarily due to stabilizing credit quality. The provision for credit losses increased $106 million (78.5 percent) in the first six months of 2024, compared with the first six months of 2023, primarily due to select commercial credit downgrades and charge-offs in the first six months of 2024.
Current report
strategic business partners. Consumer and Business Banking contributed $512 million of the Company’s net income in the second quarter and $996 million in the first six months of 2024, or decreases of $197 million (27.8 percent) and $500 million (33.4 percent), respectively, compared with the same periods of 2023.
Current report
Noninterest expense decreased $142 million (8.0 percent) in the second quarter and $272 million (7.8 percent) in the first six months of 2024, compared with the same periods of 2023, primarily due to synergies from the MUB acquisition. The provision for credit losses increased $14 million (87.5 percent) in the second quarter and $61 million in the first six months of 2024, compared with the same periods of 2023, due to credit deterioration and stabilization in balances. Economic conditions and delinquencies have subsequently stabilized.
Current report
of 2024, compared with the same periods of 2023, primarily due to a combination of loan growth and credit deterioration. Economic conditions and delinquencies have subsequently stabilized.
Current report
Noninterest expense decreased $249 million (51.4 percent) in the second quarter and $279 million (27.9 percent) in the first six months of 2024, compared with the same periods of 2023, primarily due to synergies from the MUB acquisition and lower merger and integration charges, as well as prudent expense management and continued focus on operational efficiency, partially offset by the impact of the FDIC special assessment in the current year, higher net shared services expense and higher marketing and business development expense due to the timing of campaigns. The provision for credit losses decreased $279 million (84.8 percent) in the second quarter and $507 million (91.2 percent) in the first six months of 2024, compared with the same periods of 2023, primarily due to balance sheet repositioning and capital management actions in the prior year, along with relative stability in the economic outlook in the current year.
Removed paragraphs (11)
Previous report
The provision for credit losses for the first quarter of 2024 of $553 million was $126 million (29.5 percent) higher than the first quarter of 2023, driven by normalization in the credit environment, partially offset by relative stability in the economic outlook. Net charge-offs in the first quarter of 2024 were $488 million, compared with $373 million in the first quarter of 2023. Refer to “Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.
Previous report
Provision for Credit Losses The provision for credit losses was $553 million in the first quarter of 2024, compared with $427 million in the first quarter of 2023. The $126 million (29.5
Previous report
percent) increase was driven by normalization in the credit environment, partially offset by relative stability in the economic outlook. Net charge-offs increased $115 million (30.8 percent) in the first quarter of 2024, compared with the first quarter of 2023, reflecting higher charge-offs in most loan categories consistent with normalizing credit conditions, partially offset by the impact of charge-offs in the first quarter of 2023 related to the uncollectible amount of acquired loans associated with the acquisition of MUB. Refer to “Corporate Risk Profile” for further information on the provision for credit losses, net charge-offs, nonperforming assets and other factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for credit losses.
Previous report
Noninterest Income Noninterest income was $2.7 billion in the first quarter of 2024, representing an increase of $193
Previous report
Noninterest Expense Noninterest expense was $4.5 billion in the first quarter of 2024, representing a decrease of $96 million (2.1 percent) from the first quarter of 2023. The decrease from the prior year reflected prudent expense management, continued focus on operational efficiency, synergies from the MUB acquisition and lower merger and integration charges, partially offset by the impact of the FDIC special assessment and higher compensation and employee benefits expense. Net occupancy and equipment expense decreased $25 million (7.8 percent) and professional services expense decreased $24 million (17.9 percent), primarily due to continued focus on prudent expense management and operational efficiency. Compensation and employee benefits expense increased $45 million (1.7 percent) primarily due to merit increases, higher performance-based incentives and higher employee benefits.
Previous report
Credit card loans decreased $716 million (2.5 percent) at March 31, 2024, compared with December 31, 2023, primarily the result of customers seasonally paying down balances.
Previous report
Analysis of Loan Net Charge-offs Total loan net charge-offs were $488 million for the first quarter of 2024, compared with $373 million for the first quarter of 2023. The $115 million (30.8 percent) increase reflected higher charge-offs in most loan categories consistent with normalizing credit conditions, partially offset by the impact of charge-offs in the first quarter of 2023 related to the uncollectible amount of acquired loans associated with the acquisition of MUB. The ratio of total loan net charge-offs to average loans outstanding on an annualized basis for the first quarter of 2024 was 0.53 percent, compared with 0.39 percent for the first quarter of 2023.
Previous report
Noninterest expense increased $32 million (2.4 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to higher compensation and employee benefits expense. The provision for credit losses increased $164 million in the first quarter of 2024, compared with the first quarter of 2023, primarily due to commercial real estate credit quality and select commercial downgrades.
Previous report
Net revenue decreased $305 million (11.1 percent) in the first quarter of 2024, compared with the first quarter of 2023. Net interest income, on a taxable-equivalent basis, decreased $327 million (14.0 percent) in the first quarter of 2024, compared with the first quarter of 2023, due to the impact of deposit mix and pricing, partially offset by higher rates on earning assets. Noninterest income increased $22 million (5.5 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to higher
Previous report
Noninterest expense decreased $127 million (7.4 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to lower net shared services expense and compensation and employee benefits expense. The provision for credit losses increased $48 million in the first quarter of 2024, compared with the first quarter of 2023, due to normalizing credit conditions.
Previous report
Noninterest expense decreased $67 million (12.2 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to prudent expense management, continued focus on operational efficiency, synergies from the MUB acquisition and lower merger and integration charges, along with a decline in the future delivery exposure for merchant and airline processing and other liabilities. These decreases were partially offset by the impact of the FDIC special assessment, higher compensation and employee benefits expense and higher net shared services expense. The provision for credit losses decreased $225 million (99.6 percent) in the first quarter of 2024, compared with the first quarter of 2023, primarily due to relative stability in the economic outlook in the current quarter.
Reworded paragraphs (95)
Previous wording
Earnings Summary U.S. Bancorp and its subsidiaries (the “Company”) reported net income attributable to U.S. Bancorp of $1.3 billion for the first quarter of 2024, or $0.78 per diluted common share, compared with $1.7 billion, or $1.04 per diluted common share, for the first quarter of 2023. Return on average assets and return on average common equity were 0.81 percent and 10.0 percent, respectively, for the first quarter of 2024, compared with 1.03 percent and 14.1 percent, respectively, for the first quarter of 2023. The results for the first quarter of 2024 included the impact of $265 million ($199 million net-of-tax) of notable items, including $155 million of merger and integration charges associated with the acquisition of MUFG Union Bank, N.A. (“MUB”) and a $110 million charge for the anticipated increase in the FDIC special assessment to recover losses to the Deposit Insurance Fund related to certain 2023 bank failures. Combined, these items decreased diluted earnings per common share by $0.12. The results for the first quarter of 2023 included the impact of $244 million ($183 million net-of-tax) of merger and integration charges, which decreased diluted earnings per common share by $0.12.
Current wording
Earnings Summary U.S. Bancorp and its subsidiaries (the “Company”) reported net income attributable to U.S. Bancorp of $1.6 billion for the second quarter of 2024, or $0.97 per diluted common share, compared with $1.4 billion, or $0.84 per diluted common share, for the second quarter of 2023. Return on average assets and return on average common equity were 0.97 percent and 12.4 percent, respectively, for the second quarter of 2024, compared with 0.81 percent and 10.9 percent, respectively, for the second quarter of 2023. The results for the second quarter of 2024 included the impact of a $26 million ($19 million net-of-tax) notable item for an increase in the FDIC special assessment to recover losses to the Deposit Insurance Fund related to certain 2023 bank failures, which decreased diluted earnings per common share by $0.01. The results for the second quarter of 2023 included the impact of $575 million ($432 million net-of-tax) of notable items, including $310 million of merger and integration charges associated with the acquisition of MUFG Union Bank, N.A. (“MUB”), and $243 million of provision for credit losses and an additional $22 million of losses related to balance sheet repositioning and capital management actions. Combined, these items decreased diluted earnings per common share for the second quarter of 2023 by $0.28.
Previous wording
Total net revenue for the first quarter of 2024 was $460 million (6.4 percent) lower than the first quarter of 2023, reflecting a 14.0 percent decrease in net interest income and a 7.7 percent increase in noninterest income. The decrease in net interest income from the first quarter of 2023 was primarily due to the impact of higher interest rates on deposit mix and pricing, partially offset by higher rates on earning assets. The increase in noninterest income was driven by higher fee revenue across most categories.
Current wording
Total net revenue for the second quarter of 2024 was $308 million (4.3 percent) lower than the second quarter of 2023, reflecting an 8.9 percent decrease in net interest income, partially offset by a 3.3 percent increase in noninterest income. The decrease in net interest income from the second quarter of 2023 was primarily due to the impact of higher interest rates on deposit mix and pricing, partially offset by higher rates on earning assets. The increase in noninterest income was driven by higher fee revenue across most categories.
Previous wording
Noninterest expense in the first quarter of 2024 was $96 million (2.1 percent) lower than the first quarter of 2023, primarily due to prudent expense management, continued focus on operational efficiency, and synergies from the MUB acquisition, partially offset by the impact of the FDIC special assessment charge and higher compensation and employee benefits expense to support business growth.
Current wording
Noninterest expense in the second quarter of 2024 was $355 million (7.8 percent) lower than the second quarter of 2023, primarily due to synergies from the MUB acquisition and lower merger and integration charges, prudent expense management and continued focus on operational efficiency, partially offset by higher marketing and business development expense.
Previous wording
Net Interest Income Net interest income, on a taxable-equivalent basis, was $4.0 billion in the first quarter of 2024, representing a decrease of $653 million (14.0 percent) compared with the first quarter of 2023. The decrease was primarily due to the impact of higher interest rates on deposit
Current wording
Net Interest Income Net interest income, on a taxable-equivalent basis, was $4.1 billion in the second quarter and $8.1 billion in the first six months of 2024, representing decreases of $397 million (8.9 percent) and $1.1 billion (11.5 percent), respectively, compared with the same periods of 2023. The decreases were primarily due to the impact of higher interest rates on deposit mix and pricing, partially offset by higher rates on earning assets. Average earning assets for the second quarter and first six months of 2024 were $4.9
Previous wording
mix and pricing, partially offset by higher rates on earning assets. Average earning assets for the first quarter of 2024 were $11.5 billion (1.9 percent) lower than the first quarter of 2023, reflecting decreases in loans and investment securities, partially offset by an increase in interest-bearing deposits with banks. The net interest margin, on a taxable-equivalent basis, in the first quarter of 2024 was 2.70 percent, compared with 3.10 percent in the first quarter of 2023. The decrease in net interest margin from the first quarter of 2023 was primarily due to the impact of deposit mix and pricing. Refer to the “Consolidated Daily Average Balance Sheet and Related Yields and Rates” table for further information on net interest income.
Current wording
billion (0.8 percent) and $8.2 billion (1.3 percent) lower, respectively, than the same periods of 2023, reflecting a decrease in loans, partially offset by increases in investment securities and interest-bearing deposits with banks. The net interest margin, on a taxable-equivalent basis, in the second quarter and first six months of 2024 was 2.67 percent and 2.68 percent, respectively, compared with 2.90 percent and 3.00 percent in the second quarter and first six months of 2023, respectively. The decreases in net interest margin from the prior year were primarily due to the impact of deposit mix and pricing, partially offset by higher rates on earning assets as fixed-rate assets repriced at higher levels. Refer to the “Consolidated Daily Average Balance Sheet and Related Yields and Rates” table for further information on net interest income.
Previous wording
Average total loans in the first quarter of 2024 were $15.7 billion (4.1 percent) lower than the first quarter of 2023. The decrease was primarily due to lower other retail loans, commercial loans and commercial real estate loans, partially offset by higher credit card loans. Average other retail loans decreased $9.9 billion (18.5 percent), driven by lower auto loans primarily due to balance sheet repositioning and capital management actions taken in the second quarter of 2023. Average commercial loans decreased $4.9 billion (3.6 percent) primarily due to decreased demand as corporate customers accessed the capital markets. Average commercial real estate loans decreased $2.6 billion (4.6 percent) primarily due to payoffs exceeding a reduced level of new originations. Average credit cards loans increased $2.4 billion (9.3 percent) primarily driven by higher spend volume and lower payment rates.
Current wording
Average total loans in the second quarter and first six months of 2024 were $14.1 billion (3.6 percent) and $14.9 billion (3.8 percent) lower, respectively, than the same periods of 2023. The decreases were primarily due to lower other retail loans, commercial loans and commercial real estate loans, partially offset by higher credit card loans. The decrease in average other retail loans was driven by lower auto loans primarily due to balance sheet repositioning and capital management actions taken in the second quarter of 2023. The decrease in average commercial loans was primarily due to decreased demand as corporate customers accessed the capital markets. The decrease in average commercial real estate loans was primarily due to payoffs exceeding a reduced level of new originations. The increase in average credit cards loans was primarily driven by higher spend volume.
Previous wording
Average investment securities in the first quarter of 2024 were $4.9 billion (2.9 percent) lower than the first quarter of 2023, primarily due to balance sheet repositioning and liquidity management.
Current wording
Average investment securities in the second quarter and first six months of 2024 were $7.2 billion (4.5 percent) and $1.2 billion (0.7 percent) higher, respectively, than the same periods of 2023, primarily due to balance sheet positioning and liquidity management.
Previous wording
Average total deposits for the first quarter of 2024 were $7.3 billion (1.4 percent) lower than the first quarter of 2023. Average noninterest-bearing deposits for the first quarter of 2024 were $45.0 billion (34.6 percent) lower than the first quarter of 2023, driven by decreases in Wealth, Corporate, Commercial and Institutional Banking, and Consumer and Business Banking balances. Average time deposits for the first quarter of 2024 were $19.7 billion (55.5 percent) higher than the first quarter of 2023, mainly due to increases in Consumer and Business Banking balances, partially offset by decreases in Wealth, Corporate, Commercial and Institutional Banking balances. Changes in time deposits are primarily related to those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics. Average total savings deposits for the first quarter of 2024 were $18.0 billion (5.2 percent) higher than the first quarter of 2023, driven by increases in Wealth, Corporate, Commercial and Institutional Banking, and Consumer and Business Banking balances.
Current wording
Average total deposits for the second quarter and first six months of 2024 were $16.6 billion (3.3 percent) and $4.7 billion (0.9 percent) higher, respectively, than the same periods of 2023. Average total savings deposits for the second quarter and first six months of 2024 were $33.1 billion (9.7 percent) and $25.6 billion (7.5 percent) higher, respectively, than the same periods of 2023, driven by increases in Wealth, Corporate, Commercial and Institutional Banking, and Consumer and Business Banking balances. Average time deposits for the second quarter and first six months of 2024 were $13.9 billion (31.9 percent) and $16.8 billion (42.4 percent) higher, respectively, than the same periods of 2023, mainly due to an increase in Consumer and Business Banking balances. Changes in time deposits are primarily related to those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics. Average noninterest-bearing deposits for the second quarter and first six months of 2024 were $30.3 billion (26.7 percent) and $37.6 billion (30.9 percent) lower,
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million (7.7 percent) compared with the first quarter of 2023. The increase from the prior year reflected higher commercial products revenue, trust and investment management fees, payment services revenue and mortgage banking revenue. Commercial products revenue increased $54 million (16.2 percent) primarily due to higher corporate bond fees. Trust and investment management fees increased $51 million (8.6 percent), driven by business growth and favorable market conditions. Payment services revenue increased $41 million (4.4 percent) primarily due to higher card revenue driven by higher spend volume and favorable rates, along with higher merchant processing services revenue due to higher spend volume. Mortgage banking revenue increased $38 million (29.7 percent) primarily driven by higher gain on sale margins.
Current wording
Noninterest Income Noninterest income was $2.8 billion in the second quarter and $5.5 billion in the first six months of 2024, representing increases of $89 million (3.3 percent) and $282 million (5.4 percent), respectively, compared with the same periods of 2023. The increases from the prior year reflected higher mortgage banking revenue, trust and investment management fees, payment services revenue, commercial products revenue and investment products fees, partially offset by losses on the sale of investment securities. Mortgage banking revenue increased primarily driven by a gain on the sale of mortgage servicing rights in the second quarter of 2024, along with the impact of balance sheet repositioning and capital management actions taken in the second quarter of 2023. Trust and investment management fees increased primarily due to business growth and favorable market conditions. Payment services revenue increased primarily due to higher merchant processing services revenue due to favorable rates, along with increased card revenue due to higher spend volume. Commercial products revenue increased primarily due to higher corporate bond fees. Investment products fees increased due to business growth and favorable market conditions.
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Income Tax Expense The provision for income taxes was $347 million (an effective rate of 20.7 percent) for the first quarter of 2024, compared with $455 million (an effective rate of 21.1 percent) for the first quarter of 2023. For further information on income taxes, refer to Note 11 of the Notes to Consolidated Financial Statements.
Current wording
Income Tax Expense The provision for income taxes was $445 million (an effective rate of 21.6 percent) for the second quarter and $792 million (an effective rate of 21.2 percent) for the first six months of 2024, compared with $382 million (an effective rate of 21.8 percent) and $837 million (an effective rate of 21.4 percent) for the same periods of 2023, respectively. For further information on income taxes, refer to Note 11 of the Notes to Consolidated Financial Statements.
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Loans The Company’s loan portfolio was $374.6 billion at March 31, 2024, compared with $373.8 billion at December 31, 2023, an increase of $753 million (0.2 percent). The increase was driven by higher commercial loans and residential mortgages, partially offset by lower other retail loans, commercial real estate loans and credit card loans.
Current wording
Loans The Company’s loan portfolio was $376.1 billion at June 30, 2024, compared with $373.8 billion at December 31, 2023, an increase of $2.3 billion (0.6 percent). The increase was driven by higher commercial loans and residential mortgages, partially offset by lower commercial real estate loans and other retail loans.
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Commercial loans increased $2.8 billion (2.2 percent) at March 31, 2024, compared with December 31, 2023, primarily due to growth in corporate banking.
Current wording
Commercial loans increased $3.4 billion (2.6 percent) at June 30, 2024, compared with December 31, 2023, primarily due to growth in corporate banking.
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Residential mortgages held in the loan portfolio increased $549 million (0.5 percent) at March 31, 2024, compared with December 31, 2023, driven by originations. Residential mortgages originated and placed in the Company’s loan portfolio include jumbo mortgages and branch-originated first lien home equity loans to borrowers with high credit quality.
Current wording
Residential mortgages held in the loan portfolio increased $1.6 billion (1.4 percent) at June 30, 2024, compared with December 31, 2023, driven by originations. Residential mortgages originated and placed in the Company’s loan portfolio include jumbo mortgages and branch-originated first lien home equity loans to borrowers with high credit quality.
Previous wording
Commercial real estate loans decreased $778 million (1.5 percent) at March 31, 2024, compared with December 31, 2023, primarily due to payoffs exceeding a reduced level of new originations.
Current wording
Commercial real estate loans decreased $1.6 billion (2.9 percent) at June 30, 2024, compared with December 31, 2023, primarily due to payoffs exceeding a reduced level of new originations.
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Other retail loans decreased $1.1 billion (2.6 percent) at March 31, 2024, compared with December 31, 2023, primarily due to a decrease in auto loans.
Current wording
Other retail loans decreased $1.3 billion (2.9 percent) at June 30, 2024, compared with December 31, 2023, primarily due to a decrease in auto loans.
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time based upon various factors such as ongoing asset/liability management activities, assessment of product profitability, credit risk, liquidity needs, and capital implications. If the Company’s intent or ability to hold an existing portfolio loan changes, it is transferred to loans held for sale.
Current wording
The Company generally retains portfolio loans through maturity; however, the Company’s intent may change over time based upon various factors such as ongoing asset/liability management activities, assessment of product profitability, credit risk, liquidity needs, and capital implications. If the Company’s intent or ability to hold an existing portfolio loan changes, it is transferred to loans held for sale.
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Loans Held for Sale Loans held for sale, consisting primarily of residential mortgages to be sold in the secondary market, were $2.1 billion at March 31, 2024, compared with $2.2 billion at December 31, 2023. The decrease in loans held for sale was principally due to a lower level of mortgage loan closings in the first quarter of 2024, compared with the fourth quarter of 2023. Almost all of the residential mortgage loans the Company originates or purchases for sale follow guidelines that allow the loans to be sold into existing, highly liquid secondary markets, in particular in government agency transactions and to government-sponsored enterprises (“GSEs”).
Current wording
Loans Held for Sale Loans held for sale, consisting primarily of residential mortgages to be sold in the secondary market, were $2.6 billion at June 30, 2024, compared with $2.2 billion at December 31, 2023. The increase in loans held for sale was principally due to a higher level of mortgage loan closings in the second quarter of 2024, compared with the fourth quarter of 2023. Almost all of the residential mortgage loans the
Previous wording
Investment Securities Investment securities totaled $155.4 billion at March 31, 2024, compared with $153.8 billion at December 31, 2023. The $1.6 billion (1.1 percent) increase was primarily due to $2.1 billion of net investment purchases, partially offset by a $173 million unfavorable change in net unrealized gains (losses) on available-for-sale investment securities.
Current wording
Investment Securities Investment securities totaled $161.3 billion at June 30, 2024, compared with $153.8 billion at December 31, 2023. The $7.5 billion (4.9 percent) increase was primarily due to $7.6 billion of net investment purchases driven by balance sheet positioning and liquidity management, partially offset by a $214 million unfavorable change in net unrealized gains (losses) on available-for-sale investment securities.
Previous wording
The Company’s available-for-sale investment securities are carried at fair value with changes in fair value reflected in other comprehensive income (loss) unless a portion of a security’s unrealized loss is related to credit and an allowance for credit losses is necessary. At March 31, 2024, the Company’s net unrealized losses on available-for-sale investment securities were $7.1 billion ($5.3 billion net-of-tax), compared with $6.9 billion ($5.2 billion net-of-tax) at December 31, 2023. The unfavorable change in net unrealized gains (losses) was primarily due to decreases in the fair value of mortgage-backed and state and political subdivisions securities as a result of changes in interest rates. Gross unrealized losses on available-for-sale investment securities totaled $7.2 billion at March 31, 2024, compared with $7.1 billion at December 31, 2023. When evaluating credit losses, the Company considers various factors such as the nature of the investment security, the credit ratings or financial condition of the issuer, the extent of the unrealized loss, expected cash flows of the underlying collateral, the existence of any government or agency guarantees, and market conditions. At March 31, 2024, the Company had no plans to sell securities with unrealized losses, and believed it is more likely than not that it would not be required to sell such securities before recovery of their amortized cost.
Current wording
The Company’s available-for-sale investment securities are carried at fair value with changes in fair value reflected in other comprehensive income (loss) unless a portion of a security’s unrealized loss is related to credit and an allowance for credit losses is necessary. At June 30, 2024, the Company’s net unrealized losses on available-for-sale investment securities were $7.1 billion ($5.3 billion net-of-tax), compared with $6.9 billion ($5.2 billion net-of-tax) at December 31, 2023. The unfavorable change in net unrealized gains (losses) was primarily due to decreases in the fair value of state and political subdivisions securities as a result of changes in interest rates. Gross unrealized losses on available-for-sale investment securities totaled $7.2 billion at June 30, 2024, compared with $7.1 billion at December 31, 2023. When evaluating credit losses, the Company considers various factors such as the nature of the investment security, the credit ratings or financial condition of the issuer, the extent of the unrealized loss, expected cash flows of the underlying collateral, the existence of any government or agency guarantees, and market conditions. At June 30, 2024, the Company had no plans to sell securities with unrealized losses, and believed it was more likely than not that it would not be required to sell such securities before recovery of their amortized cost.
Previous wording
(d)Amortized cost excludes portfolio level basis adjustments of $88 million at March 31, 2024 and $335 million at December 31, 2023.
Current wording
(d)Amortized cost excludes portfolio level basis adjustments of $60 million at June 30, 2024 and $335 million at December 31, 2023.
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Deposits Total deposits were $528.1 billion at March 31, 2024, compared with $512.3 billion at December 31, 2023. The $15.8 billion (3.1 percent) increase in total deposits reflected increases in total savings deposits, time deposits and noninterest-bearing deposits. Money market deposit balances increased $11.6 billion (5.8 percent), primarily due to higher Consumer and Business Banking, and Wealth, Corporate, Commercial and Institutional Banking balances. Interest checking balances increased $1.7 billion (1.3 percent), primarily due to higher Wealth, Corporate, Commercial and Institutional Banking balances. Savings account balances decreased $2.5 billion (5.9 percent), driven by lower Consumer and Business Banking balances. Time deposits increased $3.8 billion (7.3 percent) at March 31, 2024, compared with December 31, 2023, driven by higher Consumer and Business Banking balances. Changes in time deposits are primarily related to those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics. Noninterest-bearing deposits increased $1.2 billion (1.4 percent) at March 31, 2024, compared with December 31, 2023, primarily due to the impacts of seasonally higher trust and corporate deposit inflows and delays in planned institutional deposit outflows at the end of the first quarter of 2024, resulting in temporarily higher balances.
Current wording
Deposits Total deposits were $523.8 billion at June 30, 2024, compared with $512.3 billion at December 31, 2023. The $11.5 billion (2.2 percent) increase in total deposits reflected increases in total savings deposits and time deposits, partially offset by a decrease in noninterest-bearing deposits. Money market deposit balances increased $16.3 billion (8.2 percent), primarily due to higher Wealth, Corporate, Commercial and Institutional Banking, and Consumer and Business Banking balances. Savings account balances decreased $5.5 billion (12.7 percent), driven by lower Consumer and Business Banking balances. Interest checking balances decreased $1.2 billion (1.0 percent), primarily due to lower Consumer and Business Banking balances, partially offset by higher Wealth, Corporate, Commercial and Institutional Banking balances. Time deposits increased $5.0 billion (9.6 percent) at June 30, 2024, compared with December 31, 2023, driven by higher Consumer and Business Banking balances. Changes in time deposits are primarily related to those deposits managed as an alternative to other funding sources, based largely on relative pricing and liquidity characteristics. Noninterest-bearing deposits decreased $3.2 billion (3.6 percent) at June 30, 2024, compared with December 31, 2023, primarily driven by decreases within Wealth, Corporate, Commercial and Institutional Banking, and Consumer and Business Banking balances due to the impact of higher interest rates.
Previous wording
Borrowings The Company utilizes both short-term and long-term borrowings as part of its asset/liability management and funding strategies. Short-term borrowings, which include federal funds purchased, commercial paper, repurchase agreements, borrowings secured by high-grade assets and other short-term borrowings, were $17.1 billion at March 31,
Current wording
Borrowings The Company utilizes both short-term and long-term borrowings as part of its asset/liability management and funding strategies. Short-term borrowings, which include federal funds purchased, commercial paper, repurchase agreements, borrowings secured by high-grade assets and other short-term borrowings, were $16.6 billion at June 30,
Previous wording
2024, compared with $15.3 billion at December 31, 2023. The $1.8 billion (11.9 percent) increase in short-term borrowings was primarily due to an increase in repurchase agreement balances. Long-term debt was $52.7 billion at March 31, 2024, compared with $51.5 billion at December 31, 2023. The $1.2 billion (2.4 percent) increase was primarily due to $3.5 billion of medium-term note issuances, partially offset by $2.1 billion of medium-term note repayments. Refer to the “Liquidity Risk Management” section for discussion of liquidity management of the Company.
Current wording
2024, compared with $15.3 billion at December 31, 2023. The $1.3 billion (8.4 percent) increase in short-term borrowings was primarily due to an increase in repurchase agreement balances, partially offset by lower commercial paper balances. Long-term debt was $52.7 billion at June 30, 2024, compared with $51.5 billion at December 31, 2023. The $1.2 billion (2.4 percent) increase was primarily due to $4.9 billion of medium-term note issuances, partially offset by $3.4 billion of medium-term note repayments. Refer to the “Liquidity Risk Management” section for discussion of liquidity management of the Company.
Previous wording
The Executive Risk Committee (“ERC”), which is chaired by the Chief Risk Officer and includes the Chief Executive Officer and other members of the executive management team, oversees execution against the risk management framework and risk appetite statements. The ERC focuses on current and emerging risks, including strategic and
Current wording
The Executive Risk Committee (“ERC”), which is chaired by the Chief Risk Officer and includes the Chief Executive Officer and other members of the executive management team, oversees execution against the risk management framework and risk appetite statements. The ERC focuses on current and emerging risks, including strategic and reputation
Previous wording
reputation risks, by directing timely and comprehensive actions. Senior operating committees have also been established, each responsible for overseeing a specified category of risk.
Current wording
risks, by directing timely and comprehensive actions. Senior operating committees have also been established, each responsible for overseeing a specified category of risk.
Previous wording
The Company’s Board and management-level governance committees are supported by a “three lines of defense” model for establishing effective checks and balances. The first line of defense, the business lines, manages risks in conformity with established limits and policy requirements. In turn, business line leaders and their risk officers establish programs to ensure conformity with these limits and policy requirements. The second line of defense, which includes the Chief Risk Officer’s organization as well as policy and oversight activities of corporate support functions, translates risk appetite and strategy into actionable risk limits and policies. The second line of defense monitors first line of defense conformity with limits and policies and
Current wording
The Company’s Board and management-level governance committees are supported by a “three lines of defense” model for establishing effective checks and balances. The first line of defense, the business lines, manages risks in conformity with established limits and policy requirements. In turn, business line leaders and their risk officers establish programs to ensure conformity with these limits and policy requirements. The second line of defense, which includes the Chief Risk Officer’s organization as well as policy and oversight activities of corporate support functions, translates risk appetite and strategy into actionable risk limits and policies. The second line of defense monitors first line of defense conformity with limits and policies and provides reporting and escalation of emerging risks and other concerns to senior management and the Risk Management Committee of the Board of Directors. The third line of defense, internal audit, is responsible for
Previous wording
provides reporting and escalation of emerging risks and other concerns to senior management and the Risk Management Committee of the Board of Directors. The third line of defense, internal audit, is responsible for providing the Audit Committee of the Board of Directors and senior management with independent assessment and assurance regarding the effectiveness of the Company’s governance, risk management and control processes.
Current wording
providing the Audit Committee of the Board of Directors and senior management with independent assessment and assurance regarding the effectiveness of the Company’s governance, risk management and control processes.
Previous wording
In addition, credit quality ratings, as defined by the Company, are an important part of the Company’s overall credit risk management and evaluation of its allowance for credit losses. Loans with a pass rating represent those loans not classified on the Company’s rating scale for problem credits, as minimal credit risk has been identified. Loans with a special mention or classified rating, including consumer lending and small business loans that are 90 days or more past due and still accruing, nonaccrual loans and loans in a junior lien position that are current but are behind a first lien position on nonaccrual, encompass all loans held by the Company that it considers to have a potential or well-defined weakness that may put full collection of contractual cash flows at risk. The Company’s internal credit quality ratings for consumer loans are primarily based on delinquency and nonperforming status. Refer to Note 4 in the Notes to Consolidated Financial Statements for further discussion of the Company’s loan portfolios including internal credit quality ratings. In addition, refer to “Management’s Discussion and Analysis — Credit Risk Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for a more detailed discussion on credit risk management processes.
Current wording
credits, as minimal credit risk has been identified. Loans with a special mention or classified rating, including consumer lending and small business loans that are 90 days or more past due and still accruing, nonaccrual loans and loans in a junior lien position that are current but are behind a first lien position on nonaccrual, encompass all loans held by the Company that it considers to have a potential or well-defined weakness that may put full collection of contractual cash flows at risk. The Company’s internal credit quality ratings for consumer loans are primarily based on delinquency and nonperforming status. Refer to Note 4 in the Notes to Consolidated Financial Statements for further discussion of the Company’s loan portfolios including internal credit quality ratings. In addition, refer to “Management’s Discussion and Analysis — Credit Risk Management” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for a more detailed discussion on credit risk management processes.
Previous wording
The consumer lending segment represents loans and leases made to consumer customers, including residential mortgages, credit card loans, and other retail loans such as revolving consumer lines, auto loans and leases and home equity loans and lines. Key risk characteristics relevant to consumer lending segment loans primarily relate to the borrowers’ capacity and willingness to repay and include unemployment rates, consumer bankruptcy filings, household debt levels, real disposable income and other macroeconomic factors, customer payment history and credit scores, effect of higher interest rates on variable rate or
Current wording
The consumer lending segment represents loans and leases made to consumer customers, including residential mortgages, credit card loans, and other retail loans such as revolving consumer lines, auto loans and leases and home equity loans and lines. Key risk characteristics relevant to consumer lending segment loans primarily relate to the borrowers’ capacity and willingness to repay and include unemployment rates, consumer bankruptcy filings, household debt levels, real disposable income and other macroeconomic factors, customer payment history and credit scores, effect of higher interest rates on variable rate or adjustable rate loans, and in some cases, updated loan-to-value (“LTV”) information reflecting current market conditions on secured loans. These and other risk characteristics are reflected in forecasts of delinquency levels, bankruptcies and losses which are the
Previous wording
adjustable rate loans, and in some cases, updated loan-to-value (“LTV”) information reflecting current market conditions on secured loans. These and other risk characteristics are reflected in forecasts of delinquency levels, bankruptcies and losses which are the primary factors in determining the allowance for credit losses for the consumer lending segment.
Current wording
primary factors in determining the allowance for credit losses for the consumer lending segment.
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Accruing loans 90 days or more past due totaled $714 million at March 31, 2024, compared with $698 million at December 31, 2023. Accruing loans 90 days or more past due are not included in nonperforming assets and continue to accrue interest because they are adequately secured by collateral, are in the process of collection and are reasonably expected to result in repayment or restoration to current status, or are managed in homogeneous portfolios with specified charge-off timeframes adhering to regulatory guidelines. The ratio of accruing loans 90 days or more past due to total loans was 0.19 percent at March 31, 2024 and December 31, 2023.
Current wording
Accruing loans 90 days or more past due totaled $701 million at June 30, 2024, compared with $698 million at December 31, 2023. Accruing loans 90 days or more past due are not included in nonperforming assets and continue to accrue interest because they are adequately secured by collateral, are in the process of collection and are reasonably expected to result in repayment or restoration to current status, or are managed in homogeneous portfolios with specified charge-off timeframes adhering to regulatory guidelines. The ratio of accruing loans 90 days or more past due to total loans was 0.19 percent at June 30, 2024 and December 31, 2023.
Previous wording
(a)Delinquent loan ratios exclude $1.8 billion at March 31, 2024, and $2.0 billion at December 31, 2023, of loans purchased and loans that could be purchased from GNMA mortgage pools under delinquent loan repurchase options whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. Including these loans, the ratio of residential mortgages 90 days or more past due and nonperforming to total residential mortgages was 1.85 percent at March 31, 2024, and 2.00 percent at December 31, 2023.
Current wording
(a)Delinquent loan ratios exclude $1.7 billion at June 30, 2024, and $2.0 billion at December 31, 2023, of loans purchased and loans that could be purchased from GNMA mortgage pools under delinquent loan repurchase options whose repayments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. Including these loans, the ratio of residential mortgages 90 days or more past due and nonperforming to total residential mortgages was 1.71 percent at June 30, 2024, and 2.00 percent at December 31, 2023.
Previous wording
(a)Excludes $491 million of loans 30-89 days past due and $1.8 billion of loans 90 days or more past due at March 31, 2024, purchased and that could be purchased from GNMA mortgage pools under delinquent loan repurchase options that continue to accrue interest, compared with $595 million and $2.0 billion at December 31, 2023, respectively.
Current wording
(a)Excludes $561 million of loans 30-89 days past due and $1.7 billion of loans 90 days or more past due at June 30, 2024, purchased and that could be purchased from GNMA mortgage pools under delinquent loan repurchase options that continue to accrue interest, compared with $595 million and $2.0 billion at December 31, 2023, respectively.
Previous wording
The Company continues to work with customers to modify loans for borrowers who are experiencing financial difficulties. Many of the Company’s loan modifications are determined on a case-by-case basis in connection with ongoing loan collection processes. The modifications vary within each of the Company’s loan classes. Commercial lending segment modifications generally include extensions of the maturity date and may be accompanied by an increase or decrease to the interest rate. The Company may
Current wording
The Company continues to work with borrowers who are experiencing financial difficulties to modify their loans. Many of the Company’s loan modifications are determined on a case-by-case basis in connection with ongoing loan collection processes. The modifications vary within each of the Company’s loan classes. Commercial lending segment modifications generally include extensions of the maturity date and may be accompanied by an increase or decrease to the interest rate. The Company may also work with the borrower to make other changes to the loan to mitigate losses, such as
Previous wording
also work with the borrower to make other changes to the loan to mitigate losses, such as obtaining additional collateral and/or guarantees to support the loan.
Current wording
obtaining additional collateral and/or guarantees to support the loan.
Previous wording
The Company has also implemented certain residential mortgage loan modification programs. The Company modifies residential mortgage loans under Federal Housing Administration, United States Department of Veterans Affairs, and its own internal programs. Under these programs, the Company offers qualifying homeowners the opportunity to permanently modify their loan and achieve more affordable monthly payments. These modifications may include adjustments to interest rates, conversion of adjustable rates to fixed rates, extensions of maturity dates or deferrals of payments, capitalization of accrued interest and/or outstanding advances, or in limited situations, partial forgiveness of loan principal. In most instances, participation in residential mortgage loan modification programs requires the customer to complete a short-term trial period. A permanent loan modification is contingent on the customer successfully completing the trial period arrangement, and the loan documents are not modified until that time.
Current wording
The Company has also implemented certain residential mortgage loan modification programs. The Company modifies residential mortgage loans under Federal Housing Administration, United States Department of Veterans Affairs, and its own internal programs. Under these programs, the Company offers qualifying homeowners the opportunity to permanently modify their loan and achieve more affordable monthly payments. These modifications may include adjustments to interest rates, conversion of adjustable rates to fixed rates, extensions of maturity dates or deferrals of payments, capitalization of accrued interest and/or outstanding advances, or in limited situations, partial forgiveness of loan principal. In some instances, participation in residential mortgage loan modification programs requires the customer to complete a short-term trial period. A permanent loan modification is contingent on the customer successfully completing the trial period arrangement, and the loan documents are not modified until that time.
Previous wording
Credit card and other retail loan modifications are generally part of distinct modification programs providing customers modification solutions over a specified time period, generally up to 60 months.
Current wording
Credit card and other retail loan modifications are generally part of distinct modification programs providing
Previous wording
Nonperforming Assets The level of nonperforming assets represents another indicator of the potential for future credit losses. Nonperforming assets include nonaccrual loans, modified loans not performing in accordance with modified terms and not accruing interest, modified loans that have not met the performance period required to return to accrual status, other real estate owned (“OREO”) and other
Current wording
Nonperforming Assets The level of nonperforming assets represents another indicator of the potential for future credit losses. Nonperforming assets include nonaccrual loans, modified loans not performing in accordance with modified terms and not accruing interest, modified loans that have not met the performance period required to return to accrual status, other real estate owned (“OREO”) and other nonperforming assets owned by the Company. Interest
Previous wording
nonperforming assets owned by the Company. Interest payments collected from assets on nonaccrual status are generally applied against the principal balance and not recorded as income. However, interest income may be recognized for interest payments if the remaining carrying amount of the loan is believed to be collectible.
Current wording
payments collected from assets on nonaccrual status are generally applied against the principal balance and not recorded as income. However, interest income may be recognized for interest payments received if the remaining carrying amount of the loan is believed to be collectible.
Previous wording
At March 31, 2024, total nonperforming assets were $1.8 billion, compared to $1.5 billion at December 31, 2023. The $292 million (19.5 percent) increase in nonperforming assets was primarily due to higher nonperforming commercial and commercial real estate loans, including the commercial real estate office sector. Office nonperforming loans as a percent of total office loans increased to 10.0 percent at March 31, 2024, compared to 7.6 percent at December 31, 2023. The ratio of total nonperforming assets to total loans and other real estate was 0.48 percent at March 31, 2024, compared with 0.40 percent at December 31, 2023.
Current wording
At June 30, 2024, total nonperforming assets were $1.9 billion, compared to $1.5 billion at December 31, 2023. The $358 million (24.0 percent) increase in nonperforming assets was primarily due to higher nonperforming commercial and commercial real estate loans, including the commercial real estate office sector. Office nonperforming loans as a percent of total office loans increased to 11.6 percent at June 30, 2024, compared to 7.6 percent at December 31, 2023. The ratio of total nonperforming assets to total loans and other real estate was 0.49 percent at June 30, 2024, compared with 0.40 percent at December 31, 2023.
Showing the first 40 of 95 pairs. Open the source sections for the rest.
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Current report — wording carried from elsewhere
average assets and return on average common equity were 0.89 percent and 11.2 percent, respectively, for the first six months of 2024, compared with 0.92 percent and 12.5 percent, respectively, for the first six months of 2023. The results for the first six months of 2024 included the impact of $291 million ($218 million net-of-tax) of notable items, including $155 million of merger and integration charges and a $136 million charge for the increase in the FDIC special assessment. Combined, these items decreased diluted earnings per common share for the first six months of 2024 by $0.14. The results for the first six months of 2023 included the impact of $819 million ($615 million net-of-tax) of notable items, including $554 million of merger and integration charges, and $243 million of provision for credit losses and an additional $22 million of losses related to balance sheet repositioning and capital management actions. Combined, these items decreased diluted earnings per common share for the first six months of 2023 by $0.40.
Current report — wording carried from elsewhere
Company originates or purchases for sale follow guidelines that allow the loans to be sold into existing, highly liquid secondary markets, in particular in government agency transactions and to government-sponsored enterprises (“GSEs”).
Current report — wording carried from elsewhere
In addition, credit quality ratings, as defined by the Company, are an important part of the Company’s overall credit risk management and evaluation of its allowance for credit losses. Loans with a pass rating represent those loans not classified on the Company’s rating scale for problem
Current report — wording carried from elsewhere
customers modification solutions over a specified time period, generally up to 60 months.
Current report — wording carried from elsewhere
six months of 2024, reflecting portfolio growth and credit downgrades in commercial and commercial real estate portfolios.
Current report — wording carried from elsewhere
Interest Rate Risk Management In the banking industry, changes in interest rates are a significant risk that can impact
Current report — wording carried from elsewhere
The Company also measures the market risk of its hedging activities related to residential MLHFS and MSRs using the Historical Simulation method. The VaRs are measured at the
Current report — wording carried from elsewhere
In addition to assessing liquidity risk on a consolidated basis, the Company monitors the parent company’s liquidity. The parent company’s routine funding requirements consist primarily of operating expenses, dividends paid to shareholders, debt service, repurchases of common stock and funds used for acquisitions. The parent company obtains funding to meet its obligations from dividends collected from its subsidiaries and the issuance of debt and capital securities. The Company establishes limits for the minimal number of months into the future where the parent company can meet existing and forecasted obligations with cash and
Current report — wording carried from elsewhere
In addition, the Company provides financing to domestic multinational corporations that generate revenue from customers in European countries, transacts with various European banks as counterparties to certain derivative-related activities, and through a subsidiary, manages money market
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
The Company generally retains portfolio loans through maturity; however, the Company’s intent may change over
Previous report — wording carried elsewhere
Management evaluates the appropriateness of the allowance for credit losses on a quarterly basis. Multiple economic scenarios are considered over a three-year reasonable and supportable forecast period, which includes increasing consideration of historical loss experience over years two and three. These economic scenarios are constructed with interrelated projections of multiple economic variables, and loss estimates are produced that consider the historical correlation of those economic variables with credit losses. After the forecast period, the Company fully reverts to long-term historical loss experience, adjusted for
Previous report — wording carried elsewhere
The Company’s methodology for determining the appropriate allowance for credit losses also considers the imprecision inherent in the methodologies used and allocated to the various loan portfolios. As a result, amounts determined under the methodologies described above are adjusted by management to consider the potential impact of other qualitative factors not captured in quantitative model
Previous report — wording carried elsewhere
trader marks are evaluated against third-party prices, with significant variances approved by senior management in the Company’s corporate functions.
Previous report — wording carried elsewhere
In addition to assessing liquidity risk on a consolidated basis, the Company monitors the parent company’s liquidity. The parent company’s routine funding requirements consist primarily of operating expenses, dividends paid to shareholders, debt service, repurchases of common stock
Previous report — wording carried elsewhere
Company had an aggregate amount on deposit with European banks of approximately $6.8 billion, predominately with the Central Bank of Ireland and Bank of England.