![]() 3Q14 Financial Results October 27, 2014 Exhibit 99.2 |
![]() Forward-looking statements 1 Note: Percentage changes, per share amounts, and ratios presented in this document are calculated using whole dollars. This document contains forward-looking statements within the Private Securities Litigation Reform Act of 1995. Statements regarding potential future share repurchases and future dividends are forward-looking statements. Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “goals,” “targets,” “initiatives,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.” Forward-looking statements are based upon the current beliefs and expectations of management, and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation: • negative economic conditions that adversely affect the general economy, housing prices, the job market, consumer confidence and spending habits which may affect, among other things, the level of nonperforming assets, charge-offs and provision expense; • the rate of growth in the economy and employment levels, as well as general business and economic conditions; • our ability to implement our strategic plan, including the cost savings and efficiency components, and achieve our indicative performance targets; • our ability to remedy regulatory deficiencies and meet supervisory requirements and expectations; • liabilities resulting from litigation and regulatory investigations; • our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms; • the effect of the current low interest rate environment or changes in interest rates on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgages held for sale; • changes in interest rates and market liquidity, as well as the magnitude of such changes, which may reduce interest margins, impact funding sources and affect the ability to originate and distribute financial products in the primary and secondary markets; • the effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin; • financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd- Frank Act and other legislation and regulation relating to bank products and services; • a failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors or other service providers, including as a result of cyber attacks; • management’s ability to identify and manage these and other risks; and • any failure by us to successfully replicate or replace certain functions, systems and infrastructure provided by The Royal Bank of Scotland Group plc (RBS). In addition to the above factors, we also caution that the amount and timing of any future common stock dividends will depend on our financial condition, earnings, cash needs, regulatory constraints, capital requirements (including requirements of our subsidiaries), and any other factors that our Board of Directors deems relevant in making such a determination. Therefore, there can be no assurance that we will pay any dividends to holders of our common stock, or as to the amount of any such dividends. In addition, the timing and manner of the sale of RBS's remaining ownership of our common stock remains uncertain, and we have no control over the manner in which RBS may seek to divest such remaining shares. Any such sale would impact the price of our shares of common stock. More information about factors that could cause actual results to differ materially from those described in the forward-looking statements can be found under “Risk Factors” in our Registration Statement on Form S-1 filed with the United States Securities and Exchange Commission and declared effective on September 23, 2014. |
![]() 3Q14 highlights 2 Improving profitability and returns GAAP EPS of $0.34; Adjusted EPS 1 of $0.36 up 38% from 3Q13 Adjusted ROTCE 1 of 6.2% vs. 4.3% in 3Q13 YoY average loan growth of 6% drives 6% growth in NII Benefit of growth and efficiency initiatives driving underlying sequential quarter PPNR improvement Strong capital, liquidity, and funding Excellent credit quality and progress on risk management Driving growth and efficiency initiatives Robust capital levels with a Tier 1 Common Equity Ratio of 12.9% 2 Period-end deposits increased $1.8 billion, or 2% vs. 2Q14; Loan-to-deposit ratio remained stable at 97% Successfully executed remaining 2014 capital transactions; repurchased 14.3 million shares in early 4Q14 Strong balance sheet supports targeted future loan growth Continued strong credit quality with NPLs down 10% from 2Q14 and NPL coverage of 111% Net charge-off ratio of 0.38%, up 7 bps from 7-year record low 2Q14 levels; down 23 bps from 3Q13 Allowance for loan and lease losses of 1.32% Continued progress in Mortgage, Business Banking and Wealth hiring Leveraging Auto and Student platforms; launched attractive student loan re-finance product Commercial lending momentum continues, #5 middle market book runner rank in 3Q14 Expense initiatives implementation on track Regulatory capital ratios are preliminary. 2 Adjusted results are non-GAAP items and exclude the effect of net restructuring charges and special items associated with Chicago Divestiture, efficiency and effectiveness programs and separation from RBS. See important information on use of Non-GAAP items on pages 27-31. “Chicago Divestiture“ refers to the sale of the Chicago-area Charter One branches, small business and select middle market relationships. 1 |
![]() 3Q14 financial summary – GAAP 3 1 Non-GAAP item. See important information on use of Non-GAAP items on pages 27-31. 2 Includes held for sale. 3 Return on average tangible common equity. 4 Return on average total tangible assets. 5 Full-time equivalent employees. Linked Quarter: Net income down 40% from 2Q14 which included $108 million net benefit from restructuring charges and special items Net interest income down 2% as the benefit of earning asset growth and one additional business day in the quarter was more than offset by effect of the Chicago Divestiture and lower loan yields and deposit spreads Chicago Divestiture reduced NII by an estimated $13 million Noninterest income down $299 million driven by effect of 2Q14 Chicago Divestiture net gain of $288 million Chicago Divestiture reduced noninterest income by an estimated $12 million Expense management initiatives gaining traction Noninterest expense down $138 million; $94 million reduction in restructuring charges and special items Chicago Divestiture reduced noninterest expense by an estimated $21 million Prior Year Quarter: Net income up 31% NII up 6% from 3Q13 Provision lower by 47% Highlights 3Q14 change from $s in millions 3Q14 2Q14 3Q13 2Q14 3Q13 $ % $ % 167 Net interest income 820 $ 833 $ 770 $ (13) $ (2) % 50 $ 6 % 168 Noninterest income 341 640 383 (299) (47) % (42) (11) % 169 Total revenue 1,161 1,473 1,153 (312) (21) % 8 1 % 170 Noninterest expense 810 948 788 (138) (15) % 22 3 % 171 Pre-provision profit 351 525 365 (174) (33) % (14) (4) % 172 Provision for credit losses 77 49 145 28 57 % (68) (47) % 173 Income before income tax expense 274 476 220 (202) (42) % 54 25 % 174 Income tax expense 85 163 76 (78) (48) % 9 12 % 175 Net income (loss) 189 $ 313 $ 144 $ (124) $ (40) % 45 $ 31 % $s in billions 176 Average interest earning assets 117 $ 116 $ 106 $ 1 $ 1 % 11 $ 11 % 177 Average deposits 2 92 92 93 (0) (1) % (1) (2) % Key metrics 178 Net interest margin 2.77 % 2.87 % 2.88 % (10) bps (11) bps 109 Loan-to-deposit ratio (period-end) 2 97.32 % 97.20 % 91.34 % 12 bps 598 bps 180 ROTCE 1,3 5.81 % 9.59 % 4.34 % (378) bps 147 bps 181 ROTA 1,4 0.61 % 1.04 % 0.52 % (43) bps 9 bps 182 Efficiency ratio 1 70 % 64 % 68 % 551 bps 135 bps 183 FTEs 5 17,852 18,049 18,961 (197) (1) % (1,109) (6) % Per common share 156 Diluted earnings 0.34 $ 0.56 $ 0.26 $ (0.22) $ (39) % 0.08 $ 31 % 157 Tangible book value 23.04 $ 23.39 $ 22.97 $ (0.35) $ (1) % 0.07 $ — % 158 Average diluted shares outstanding (in millions) 560.2 560.0 560.0 0.2 — % 0.2 — % |
![]() Restructuring charges and special items 4 3Q14 results included restructuring charges and special items related to enhancing efficiencies and improving processes across the organization and separation from The Royal Bank of Scotland Group plc (“RBS”). Expect to utilize the balance of the gain to continue to reinvest to drive future growth, and to fund an additional $35-$45 million of further restructuring charges and special expense items in 4Q14, and $30-$40 million in 1H15. As of and for the three months ended Restructuring charges and special items ($s in millions, except per share data) pre-tax after-tax pre-tax after-tax pre-tax after-tax Noninterest income special items: Other income Net Gain on Chicago Divestiture — $ — $ 288 $ 180 $ (288) $ (180) $ Total noninterest income special items — $ — $ 288 $ 180 $ (288) $ (180) $ Noninterest expense restructuring charges and special items: Salaries and employee benefits Chicago Divestiture — $ — $ 3 $ 2 $ (3) $ (2) $ Efficiency initiatives — — 40 25 (40) (25) Non-compensation expense Chicago Divestiture — — 14 9 (14) (9) Efficiency initiatives 4 3 46 28 (42) (25) Separation / IPO related 2 1 6 4 (4) (3) Other 15 9 6 4 9 5 Total noninterest expense restructuring charges and special items 21 $ 13 $ 115 $ 72 $ (94) $ (59) $ Net restructuring charges and special items (21) $ (13) $ 173 $ 108 $ (194) $ (121) $ EPS impact (0.02) $ 0.19 $ (0.21) $ September 30, 2014 June 30, 2014 increase/decrease |
![]() Adjusted 3Q14 financial summary - excluding restructuring charges and special items 1 5 1 Non-GAAP item. Adjusted results exclude the effect of net restructuring charges and special items associated with Chicago Divestiture, efficiency and effectiveness programs and separation from RBS. See important information on use of Non-GAAP items on pages 27-31. 2 Includes held for sale. 3 Return on average tangible common equity. 4 Return on average total tangible assets. 5 Full-time equivalent employees. Linked quarter: Adjusted net income down $3 million largely driven by effect of unusually low 2Q14 provision expense Adjusted pre-provision profit up 6% Adjusted revenue down $24 million driven by an estimated $25 million related to Chicago Divestiture Adjusted NII stable excluding the impact of the Chicago Divestiture Adjusted noninterest income down $11 million driven by effect of Chicago Divestiture and 2Q14 loan sale gain Adjusted noninterest expense down $44 million, driven by an estimated $21 million from the Chicago Divestiture as well as lower regulatory costs and incentives expense Adjusted efficiency ratio improved 221 bps Prior Year Quarter: Net income up $58 million reflecting positive operating leverage and a $68 million reduction in provision expense Highlights |
![]() $106B $109B $113B $116B $117B $770 $779 $808 $833 $820 3Q13 4Q13 1Q14 2Q14 3Q14 $s in billions 3Q13 4Q13 1Q14 2Q14 3Q14 210 Retail Loans $46.0 $46.3 $46.4 $47.5 $48.5 211 Commercial Loans 38.5 39.5 39.7 40.5 41.2 212 Investments and interest bearing deposits 21.0 22.9 25.2 26.8 27.3 213 Loans held for sale¹ 0.4 0.3 1.2 1.2 0.2 214 Total interest-earning assets $105.9 $109.0 $112.5 $116.0 $117.2 Net interest income Linked quarter: NII down $13 million driven by the effect of Chicago Divestiture and higher 2Q14 loan recoveries Estimated $13 million decrease related to Chicago Divestiture and $7 million decrease related to 2Q14 commercial loan interest recoveries Excluding the above decreases, NII growth of $7 million reflects the benefit of a 2% increase in earning assets, deposit growth, a reduction in pay-fixed swap costs and one additional business day in the quarter NIM decreased 10 bps to 2.77% 2Q14 included an estimated 4 bps benefit related to the Chicago Divestiture and commercial loan interest recoveries related to prior period charge-offs Remaining 6 bps decrease largely reflects effect of the relatively persistent low-rate environment, spread compression in Commercial and issuance of sub-debt partially offset by the benefit of lower pay-fixed swap costs 6 Highlights Net interest income $s in millions Average interest-earning assets Average interest earning assets Net interest income Net interest margin 2.88% 2.83% 2.89% 2.87% 2.77% $820 2 1 1Q14 and 2Q14 include other loans held for sale associated with Chicago Divestiture. 2 Represents estimated underlying net interest income adjusted for the effect of Chicago Divestiture. |
![]() $341 $352 $383 3Q14 2Q14 3Q13 Service charges and fees Card fees Trust and inv services FX & trade finance fees Mortgage banking fees Capital markets fee income Securities gains (losses) Other income Adjusted noninterest income – excluding special items Linked quarter: Adjusted noninterest income down $11 million from higher 2Q14 which included: — Estimated $12 million associated with Chicago Divestiture including $6 million in service charges and fees/$3 million card fees — $9 million gain on sale of student loans Excluding these items, Adjusted noninterest income was up around $10 million. — Underlying service charge growth reflecting seasonality and the benefit of checking account growth — Card fees were flat excluding the impact of the Chicago Divestiture — Mortgage fees up $7 million reflecting the benefit of MSR recapture as well as higher volume from growth initiatives — Foreign exchange and trade finance fees up $4 million driven by improved cross-sell and market conditions — Leasing and capital markets fees down from strong 2Q14 Prior year quarter: Adjusted noninterest income down $42 million from 3Q13 as strength in capital markets was more than offset by a $31 million decrease in securities gains and other income, and lower service charges driven by check-posting order changes 7 Highlights 1 Non-GAAP item. Adjusted results exclude the effect of net restructuring charges and special items associated with Chicago Divestiture, efficiency and effectiveness programs and separation from RBS. See important information on use of Non-GAAP items on pages 27-31. 2 Other income includes interest rate product fees, leasing income, bank owned life insurance, and other income. 3 Non-GAAP item. Excludes impact of $288 million gain from Chicago Divestiture. 4 Excluding estimated impact of Chicago Divestiture. 2,3 $340 4 1 3Q14 change from $s in millions 3Q14 2Q14 3Q13 2Q14 3Q13 $ % $ % 215 Service charges and fees 144 $ 147 $ 163 $ (3) $ (2) % (19) $ (12) % 216 Card fees 58 61 63 (3) (5) % (5) (8) % 217 Trust & investment services fees 39 42 39 (3) (7) % — — % 218 FX & trade finance fees 26 22 25 4 18 % 1 4 % 219 Mortgage banking fees 21 14 20 7 50 % 1 5 % 220 Capital markets fees 22 26 11 (4) (15) % 11 100 % 221 Securities gains, net 2 — 25 2 NM (23) (92) % 222 Adjusted other income 2,3 29 40 37 (11) (28) % (8) (22) % 223 Adjusted noninterest income 1 341 $ 352 $ 383 $ (11) $ (3) % (42) $ (11) % 224 Chicago Divestiture net gain — 288 — (288) (100) % — NM 225 Noninterest income 341 $ 640 $ 383 $ (299) $ (47) % (42) $ (11) % |
![]() Adjusted noninterest expense – excluding restructuring charges and special items Adjusted noninterest expense down $44 million driven by an estimated $21 million decrease tied to the Chicago Divestiture as well as lower regulatory costs and the benefit of efficiency initiatives — Salaries and benefits down $15 million driven by an estimated $12 million impact from the Chicago Divestiture as well as lower incentive and benefits expense — FTEs down 197 reflecting the benefits of our efficiency initiatives — Outside services increased $3 million, primarily due to investments to drive future expense reductions — Adjusted other expense down $30 million primarily due to lower regulatory costs 8 Highlights 2 2 $812 3 1 3Q14 change from $s in millions 3Q14 2Q14 3Q13 2Q14 3Q13 $ % $ % 235 Adjusted salary and benefits 1 409 $ 424 $ 403 $ (15) $ (4) % 6 $ 1 % 236 Adjusted outside services 1,2 87 84 87 3 4 % — — % 237 Adjusted occupancy 1 75 78 80 (3) (4) % (5) (6) % 238 Adjusted equipment expense 1 58 62 69 (4) (6) % (11) (16) % 239 Amortization of software 38 33 26 5 15 % 12 46 % 240 Adjusted other expense 1,3 122 152 123 (30) (20) % (1) (1) % 241 Adjusted noninterest expense 1 789 $ 833 $ 788 $ (44) $ (5) % 1 $ 0 % 242 Restructuring charges and special items 21 115 — (94) (82) % 21 NM 243 Total noninterest expense 810 $ 948 $ 788 $ (138) $ (15) % 22 $ 3 % $789 $833 $788 68% 70% 68% 3Q14 2Q14 3Q13 Adjusted salary and benefits Adjusted occupancy & equip Adjusted all other Adjusted efficiency ratio 1 Non-GAAP item. Adjusted results exclude the effect of net restructuring charges and special items associated with Chicago Divestiture, efficiency and effectiveness programs and separation from RBS. See important information on use of Non-GAAP items on pages 27-31. Excludes restructuring charges and special items of: salaries and benefits of $43 million in 2Q14, outside services of $19 million in 3Q14 and $41 million in 2Q14, occupancy of $2 million in 3Q14 and $9 million in 2Q14, equipment of $3 million in 2Q14 and other expense of $19 million in 2Q14. 2 Excludes restructuring charges and special items. 3 Excluding estimated impact of Chicago Divestiture. |
![]() Consolidated 3Q14 average balance sheet Total earning assets up 1% linked quarter and 11% YoY despite $1.0 billion decrease from Chicago Divestiture; underlying up 1.9% linked quarter — Commercial loans up $719 million from 2Q14, driven by strength in Asset Finance, Mid-Corporate, Commercial Real Estate, and Franchise Finance lines of businesses — Retail loans up $912 million driven by growth in auto and mortgage partially offset by a reduction in non-core loans and the 2Q14 sale of $398 million student loan portfolio Total deposits decreased 1% given $4.8 billion impact from Chicago Divestiture, largely offset by organic growth — $1.1 billion increase in low-cost core deposits — $3.0 billion increase in money market and CDs driven by commercial deposits Borrowed funds up $1.8 billion driven by balance sheet growth, sub-debt issuance 9 Highlights $117.2 billion Interest-earning assets $106.7 billion Deposits/borrowed funds Total Consumer 42% Total Commercial 35% 1 Low-cost core deposits include demand, checking with interest, and regular savings. 2 Total deposits includes deposits held for sale. CRE Other Comml Residential mortgage Total home equity Automobile Other consumer Investments Retail / Personal Comml / Municipal Wholesale 3Q14 change from $s in billions 3Q14 2Q14 3Q13 2Q14 3Q13 $ % $ % 265 Investments and interest bearing deposits 27.3 $ 26.8 $ 21.0 $ 0.5 $ 2 % 6.4 $ 30 % 266 Total commercial loans 41.2 40.5 38.5 0.7 2 % 2.7 7 % 267 Total retail loans 48.5 47.5 46.0 0.9 2 % 2.4 5 % 268 Total loans and leases 89.7 88.0 84.5 1.6 2 % 5.2 6 % 269 Loans held for sale 0.2 1.2 0.4 (1.0) (83) % (0.2) (46) % 270 Total interest-earning assets 117.2 116.0 105.9 1.2 1 % 11.3 11 % 271 Total noninterest-earning assets 11.5 11.2 11.5 0.3 3 % (0.0) (0) % 272 Total assets 128.7 $ 127.1 $ 117.4 $ 1.5 $ 1 % 11.3 $ 10 % 273 Low-cost core deposits 1 48.7 47.6 47.6 1.1 2 % 1.1 2 % 274 Money market deposits 32.4 30.6 34.2 1.8 6 % (1.9) (5) % 275 Term deposits 10.6 9.4 11.3 1.2 13 % (0.7) (6) % Held for sale — 4.5 — (4.5) (100) % — NM 276 Total deposits 2 91.7 $ 92.2 $ 93.1 $ (0.5) $ (1) % (1.5) $ (2) % 277 Total borrowed funds 15.0 13.2 2.4 1.8 14 % 12.6 532 % 278 Total liabilities 109.3 $ 107.5 $ 97.8 $ 1.7 $ 2 % 11.5 $ 12 % 279 Total stockholders' equity 19.4 19.6 19.6 (0.2) (1) % (0.2) (1) % 280 Total liabilities and equity 128.7 $ 127.1 $ 117.4 $ 1.5 $ 1 % 11.3 $ 10 % |
![]() $44.8B $44.8B $46.2B $47.4B $47.8B 3.69% 3.68% 3.70% 3.69% 3.67% 3Q13 4Q13 1Q14 2Q14 3Q14 Total loans and leases Loan yields $34.5B $35.7B $36.6B $37.4B $37.8B 2.88% 2.74% 2.71% 2.67% 2.61% 3Q13 4Q13 1Q14 2Q14 3Q14 Total loans and leases Loan yields $5.6B $5.6B $4.6B $4.4B $4.2B 4.47% 4.28% 4.46% 4.99% 4.30% 3Q13 4Q13 1Q14 2Q14 3Q14 Total loans and leases Loan yields Total average loans and leases and LHFS Linked Quarter: Consumer Banking segment loans increased $480 million despite $595 million decrease from Chicago Divestiture and 2Q14 sale of a $394 million student loan portfolio given increases in auto and mortgage Purchased $572 million and $395 million of residential mortgages in 3Q14 and 2Q14, respectively Purchased $503 million and $557 million in auto loans in 3Q14 and 2Q14, respectively Consumer loan yields decreased 2 bps reflecting shift in loan mix and the impact of the persistent low-rate environment Commercial Banking segment loans increased $398 million on strength in Asset Finance, Mid-Corporate, Commercial Real Estate, and Franchise Finance lines of businesses Loan yields decreased 6 bps reflecting continued effect of the low-rate environment and increased competition Other loans decreased $216 million reflecting continued runoff in the non-core portfolio 10 Highlights 2 Consumer Banking Average loans 1 Commercial Banking Average loans 1 Other Average loans 1 1 Includes loans held for sale. 2 Excludes the impact of interest rate swaps. |
![]() $93.1B $93.2B $91.6B $92.2B $91.7B 0.25% 0.17% 0.16% 0.15% 0.18% 0.34% 0.24% 0.22% 0.22% 0.25% 3Q13 4Q13 1Q14 2Q14 3Q14 Term & time deposits Checking with interest Non int bearing deposits Money market & savings Int bearing HFS Non-int bearing HFS Total deposit costs Int bearing deposit costs Average deposits and rates Total average deposits, including deposits held for sale, decreased by $490 million as a $4.5 billion decrease related to the Chicago Divestiture was largely offset by organic growth of approximately 5% Interest checking up $1.4 billion, money market & savings up $1.7 billion and term deposits up $1.2 billion reflecting particular strength in commercial Total deposit costs increased three basis points to 0.18% given this shift in mix 11 Highlights 1 1 Average deposits and deposits held for sale |
![]() Capital and liquidity remain strong 12 Highlights Loan-to-deposit ratio 5 Capital levels remain well above regional peers As part of plan to adjust capital mix we completed $333 million capital exchange transaction on August 1, 2014 and $334 million sub-debt issuance/ 14.3 million share repurchase on October 8th with RBS 3Q14 Basel III common equity tier 1 down approximately 50 basis points from 2Q14: Impact to CET1: Net income: 18 bps increase RWA growth: 32 bps decrease Capital exchange: 32 bps decrease Dividend/other: 5 bps decrease LDR remains stable post Chicago Divestiture. Already meet initial LCR requirement 4 Capital ratio trend 1 Regulatory capital ratios are preliminary. 2 Pro forma Basel III ratios assume that certain definitions impacting qualifying Basel III capital, which otherwise will phase in through 2018, are fully phased-in. Ratios also reflect the required US Standardized methodology for calculating RWAs, effective January 1, 2015. 3 Non-GAAP item. See important information on use of Non-GAAP items on pages 27-31. 4 Based on the September 2014 release of the U.S. version of the Liquidity Coverage Ratio (LCR). Note that as a modified LCR company, CFG’s formal compliance requirement of 90% does not begin until January 2016. 5 Includes held for sale. |
![]() $5 $18 ($8) ($13) $4 $100 $78 $80 $70 $75 $26 $19 $15 $11 $9 $131 $115 $87 $68 $88 0.61% 0.53% 0.41% 0.31% 0.38% 3Q13 4Q13 1Q14 2Q14 3Q14 Commercial Retail SBO Net c/o ratio $131 $115 $87 $68 $88 $145 $132 $121 $49 $77 $1.7B $1.4B $1.4B $1.2B $1.1B 3Q13 4Q13 1Q14 2Q14 3Q14 Net charge-offs Provision NPLs Credit quality continues to improve Overall credit quality remains strong Net charge-offs were $88 million, or 0.38% of average loans and leases Allowance coverage for NPLs improved to 111%, up from 101% in 2Q14 Provision for credit losses of $77 million increased $28 million vs. 2Q14 which included $13 million in net commercial recoveries NPLs to total loans down 16 bps to 1.19% from 1.35% in 2Q14 Results reflect reserve release of $11 million vs. $19 million in 2Q14 13 Highlights Net charge-offs (recoveries) Provision for credit losses, charge-offs, NPLs Allowance for loan and lease losses $s in millions 1 For credit losses 1 Allowance for loan and lease losses to nonperforming loans and leases. $1,219 $1,221 $1,259 $1,210 $1,201 72% 86% 92% 101% 111% 3Q13 4Q13 1Q14 2Q14 3Q14 Allowance for loan and lease losses Coverage Ratio |
![]() Execution of key initiatives progressing well Consumer initiatives showing good traction — Mortgage, Business Banking and Wealth hiring meeting expectations — Auto loan volume very strong - $1.9 billion organic originations; ~$500 million in flow purchases — Education finance launched leading and very attractive re-finance product — Net household growth in lending and checking accounts of 46,000 YTD Commercial initiatives remain on track in spite of competitive environment — 14 new key hires in the quarter, including new head of Treasury Solutions — Loan growth of $505 million — Strong quarter in capital and global markets, including strength in interest rate and FX products Expense initiatives are tracking to all implementation dates — Expect to have 25% of $200 million program goal in run rate by end 2014 Capital conversions of $1 billion for 2014 completed as of October 8 — Capital mix now 78% CET1/22% capital securities vs. goal of 70%/30% Balance sheet positioning remains more asset sensitive than peer group — 6.3% benefit from 200 bps gradual ramp in rates at September 30 vs. 6.6% at June 30 14 th th th |
![]() Making progress against key financial targets 15 Key Indicators 3Q13 3Q14 End 2016 targets Adjusted return on average tangible common equity 1 4.3% 6.2% 10%+ Adjusted return on average total tangible assets 1 0.5% 0.7% 1.0%+ Adjusted efficiency ratio 1 68% 68% ~60% Tier 1 common equity ratio 13.9% 12.9% 2 ~11% 3 Delivering on our plan to improve returns 1 Non-GAAP item. Adjusted results exclude the effect of net restructuring charges and special items associated with Chicago Divestiture, efficiency and effectiveness programs and separation from RBS. See important information on use of Non-GAAP items on pages 27-31. 2 Regulatory capital ratio is preliminary. 3 Target represents fully phased in Basel III. |
![]() 4Q14 outlook 16 Net interest income, net interest margin Anticipate 4Q14 loan growth of 2-3% vs. linked quarter Project stable net interest margin Operating leverage, efficiency ratio Credit trends and cost Restructuring costs Capital, liquidity and funding Expect modest operating leverage and slight improvement in operating efficiency ratio Asset quality trends expected to be stable Currently do not expect commercial recoveries nor reserve release in 4Q14 Restructuring costs of $35-$45 million projected for 4Q14; 1H15 balance estimated at $30-$40 million Year end Tier 1 common equity ratio projected at ~12.5% Loan-to-deposit ratio at ~98% |
![]() Key messages 17 Successful completion of the largest commercial bank IPO in U.S. history Underlying business performance continues to strengthen 2014 is a transition year, with Chicago region gain funding various initiatives to drive better performance over 2015/2016 Tracking well on all strategic and regulatory initiatives, maintain intense focus on execution Asset quality and capital ratios remain strong |
![]() Appendix 18 |
![]() 4.34% 6.22% 3Q13 3Q14 0.52% 0.66% 3Q13 3Q14 12.1% 10.9% 3Q13 3Q14 $144 $202 3Q13 3Q14 $365 $372 3Q13 3Q14 13.9% 12.9% 3Q13 3Q14 Prior year quarter results 19 Adjusted pre-provision profit ¹ $s in millions Basel I tier 1 common equity capital ratio ² Adjusted return on average tangible assets ¹ Adjusted net income ¹ $s in millions Leverage ratio ² 120 bps 100 bps 2% 40% 14 bps 188 bps Adjusted return on average tangible common equity ¹ 1 Adjusted results are non-GAAP items and exclude the effect of net restructuring charges and special items associated with Chicago Divestiture, efficiency and effectiveness programs and separation from RBS. See important information on use of Non-GAAP items on pages 27-31. 2 Regulatory capital ratios are preliminary. |
![]() $352 $372 2Q14 3Q14 13.3% 12.9% 2Q14 3Q14 0.68% 0.66% 2Q14 3Q14 $205 $202 2Q14 3Q14 11.1% 10.9% 2Q14 3Q14 6.28% 6.22% 2Q14 3Q14 Linked quarter results 20 6 bps 2 bps 20 bps 40 bps 1% 6% Adjusted pre-provision profit ¹ $s in millions Basel I tier 1 common equity capital ratio ² Adjusted return on average tangible assets ¹ Adjusted net income ¹ $s in millions Leverage ratio ² Adjusted return on average tangible common equity ¹ 1 Adjusted results are non-GAAP items and exclude the effect of net restructuring charges and special items associated with Chicago Divestiture, efficiency and effectiveness programs and separation from RBS. See important information on use of Non-GAAP items on pages 27-31. 2 Regulatory capital ratios are preliminary. |
![]() Net interest margin NIM% walk 3Q13 to 3Q14 NIM% walk 2Q14 to 3Q14 21 |
![]() Consumer Banking segment 22 Highlights 1 Non-GAAP item. Adjusted results exclude the effect of net restructuring charges and special items associated with Chicago Divestiture, efficiency and effectiveness programs and separation from RBS. See important information on use of Non-GAAP items on pages 27-31. 2 Includes held for sale. 3 Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. We approximate that regulatory capital is equivalent to a sustainable target level for common equity Tier 1 and then allocate that approximation to the segments based on economic capital. Consumer Banking net income up $10 million with pre-provision profit up $22 million Net interest income decreased $14 million driven by an estimated $21 million decrease related to the Chicago Divestiture. – Period-end loans up $1.6 billion on higher mortgage and auto balances – Period-end deposits relatively flat as strength in DDA and CDs was largely offset by lower savings, interest checking and money market balances including seasonal decrease Noninterest income decreased $10 million from higher 2Q14 levels that included $11 million tied to the Chicago Divestiture and a $9 million student loan portfolio sale gain – Mortgage originations up 13% Noninterest expense decreased $46 million driven by an estimated $20 million decrease related to the Chicago Divestiture, the impact of a reduction in regulatory costs and the impact of efficiency initiatives 3Q14 change from $s in millions 3Q14 2Q14 3Q13 2Q14 3Q13 $ % $ % 310 Net interest income 532 $ 546 $ 543 $ (14) $ (3) % (11) $ (2) % 311 Noninterest income 226 236 246 (10) (4) % (20) (8) % 312 Total revenue 758 782 789 (24) (3) % (31) (4) % 313 Noninterest expense 609 655 622 (46) (7) % (13) (2) % 314 Profit before provision for credit losses 149 127 167 22 17 % (18) (11) % 315 Provision for credit losses 66 59 87 7 12 % (21) (24) % 316 Income before income tax expense 83 68 80 15 22 % 3 4 % 317 Income tax expense 29 24 28 5 21 % 1 4 % 318 Net income 54 $ 44 $ 52 $ 10 $ 23 % 2 $ 4 % Average balances 319 Total loans and leases ² 47.8B $ 47.4B $ 44.8B $ 0.5B $ 1 % 3.1B $ 7 % 320 Total deposits ² 65.6B $ 70.2B $ 72.2B $ (4.6B) $ (7) % (6.6B) $ (9) % Mortgage Banking Metrics Originations 1,018 $ 904 $ 1,374 $ 113 $ 13 % (356) $ (26) % Origination Pipeline 973 1,020 938 (47) (5) % 35 4 % Gain on sale of secondary originations 1.69% 1.91% 0.59% (22) bps 110 bps Performance metrics 321 ROTCE ¹ , ³ 4.57% 3.87% 4.69% 70 bps (12) bps 322 Efficiency ratio ¹ 80% 84% 79% (319) bps 159 bps |
![]() Commercial Banking segment Commercial Banking net income decreased modestly from 2Q14 which included the benefit of a $2 million net recovery on prior period charge-offs and reversal of prior period loss reserves Revenues up $3 million with net interest income up $6 million on a 1% increase in loans and 14% increase in deposits – Strength in Asset Finance, Mid- Corporate, Commercial Real Estate, and Franchise Finance lines of businesses – Deposits up $2.6 billion, or 14% Noninterest income down $3 million as growth in foreign exchange and trade fees was more than offset by lower leasing and capital markets fees from relatively high 2Q14 levels Noninterest expense up $5 million from unusually low 2Q14 levels as well as continued investments to drive growth 23 Highlights 1 Non-GAAP item. Adjusted results exclude the effect of net restructuring charges and special items associated with Chicago Divestiture, efficiency and effectiveness programs and separation from RBS. See important information on use of Non-GAAP items on pages 27-31. 2 Includes held for sale. 3 Operating segments are allocated capital on a risk-adjusted basis considering economic and regulatory capital requirements. We approximate that regulatory capital is equivalent to a sustainable target level for common equity Tier 1 and then allocate that approximation to the segments based on economic capital. 3Q14 change from $s in millions 3Q14 2Q14 3Q13 2Q14 3Q13 $ % $ % 323 Net interest income 270 $ 264 $ 263 $ 6 $ 2 % 7 $ 3 % 324 Noninterest income 104 107 93 (3) (3) % 11 12 % 325 Total revenue 374 371 356 3 1 % 18 5 % 326 Noninterest expense 162 157 156 5 3 % 6 4 % 327 Profit before provision for credit losses 212 214 200 (2) (1) % 12 6 % 328 Provision for credit losses — (2) 3 2 NM (3) NM 329 Income before income tax expense 212 216 197 (4) (2) % 15 8 % 330 Income tax expense 73 75 70 (2) (3) % 3 4 % 331 Net income 139 $ 141 $ 127 $ (2) $ (1) % 12 $ 9 % Average balances 37.8B $ 37.4B $ 34.5B $ 0.4B $ 1 % 3.3B $ 9 % 21.0B $ 18.4B $ 17.8B $ 2.6B $ 14 % 3.2B $ 18 % Performance metrics 13.10% 13.78% 13.24% (68) bps (14) bps 43% 42% 44% 99 bps (34) bps Total loans and leases ² Total deposits ² ROTCE ¹ , ³ Efficiency ratio ¹ |
![]() 3Q14 change from $s in millions 3Q14 2Q14 3Q13 2Q14 3Q13 $ % $ % 336 Net interest income (expense 18 $ 23 $ (36) $ (5) $ (22) % 54 $ 150 % 337 Noninterest income 11 297 44 (286) (96) % (33) (75) % 338 Total revenue 29 320 8 (291) (91) % 21 263 % 339 Noninterest expense 39 136 10 (97) (71) % 29 290 % 340 Profit (loss) before provision for credit losses (10) 184 (2) (194) (105) % (8) (400) % 341 Provision for credit losses 11 (8) 55 19 238 % (44) (80) % 342 Income (loss) before income tax expense (21) 192 (57) (213) (111) % 36 63 % 343 Income tax expense (benefit) (17) 64 (22) (81) (127) % 5 23 % 344 Net income (loss) (4) $ 128 $ (35) $ (132) $ (103) % 31 $ 89 % Average balances 345 Total loans and leases¹ 4.2B $ 4.4B $ 5.6B $ (0.2B) $ (5) % (1.4B) $ (25) % 346 Total deposits¹ 5.1B $ 3.6B $ 3.1B $ 1.5B $ 40 % 1.9B $ 61 % Other Other net income down $132 million from 2Q14 Noninterest income decreased $286 million driven by a $288 million net gain on sale of the Chicago Divestiture in 2Q14 Noninterest expense decreased $97 million from 2Q14 driven by a $94 million reduction in restructuring charges and special items 24 Highlights 1 Includes held for sale. — — ) |
![]() Restructuring charges and special items 25 3Q14 results included restructuring charges and special items related to enhancing efficiencies and improving processes across the organization and separation from The Royal Bank of Scotland Group plc (“RBS”). This table shows impacts on expense categories. Expect to utilize the balance of the gain to continue to reinvest to drive future growth, and to fund an additional $35-$45 million of further restructuring charges and special expense items in 4Q14, and $30-$40 million in 1H15. As of and for the three months ended Restructuring charges and special items ($s in millions, except per share data) pretax after tax pretax after tax pre-tax after-tax Noninterest income special items: Other income Net Gain on Chicago Divestiture — $ — $ 288 $ 180 $ (288) $ (180) $ Total noninterest income restructuring charges and special items — — 288 180 (288) (180) Noninterest expense restructuring charges and special items: Salaries and employee benefits — — 43 27 (43) (27) Outside services 19 12 41 25 (22) (13) Occupancy 2 1 9 6 (7) (5) Equipment expense — — 3 2 (3) (2) Other operating expense — — 19 12 (19) (12) Total noninterest expense restructuring charges and special items 21 $ 13 $ 115 $ 72 $ (94) $ (59) $ Net restructuring charges and special items (21) $ (13) $ 173 $ 108 $ (194) $ (121) $ EPS impact (0.02) $ 0.19 $ (0.21) $ September 30, 2014 June 30, 2014 increase/decrease |
![]() $4.1B $3.8B $3.6B $3.4B $3.2B 3Q13 4Q13 1Q14 2Q14 3Q14 Retail Commercial SBO $2.3B $2.2B $2.1B $2.0B $1.9B 4.25% 3.37% 2.78% 2.11% 2.04% 3Q13 4Q13 1Q14 2Q14 3Q14 SBO balance Charge-offs Non-core home equity portfolio serviced by others (SBO) 1 SBO balances by FICO SBO balances by LTV SBO balances and charge-offs Top 5 SBO balances by state Non-core period-end loans SBO balances by product SBO Lien Position 1st Lien 2nd Lien < 69 70-79 80-89 90-99 100-119 120+ < 619 620-679 680-719 720-759 760+ HE Loan HELOC 26 $s in millions SBO gross balance distribution as of September 30, 2014. FICO scores updated quarterly. 1 a portion of the serviced by others portfolio is serviced by CFG. $354 $121 $116 $115 $100 $615 $541 $0.6B 31% |
![]() Non-GAAP Financial Measures 27 This document contains non-GAAP financial measures. The table below presents reconciliations of certain non-GAAP measures. These reconciliations exclude goodwill impairment, restructuring charges and/or special items, which are usually included, where applicable, in the financial results presented in accordance with GAAP. Special items include regulatory expenses and expenses relating to our initial public offering. The non-GAAP measures set forth below include “total revenue”, “noninterest income”, “ noninterest expense”, “income tax expense (benefit)”, “net income (loss)”, “salaries and employee benefits”, “outside services”, “occupancy”, “equipment expense”, “other operating expense”, “return of average common equity” and “return on average total assets”. In addition, we present computations for “return on average tangible common equity”, “return on average total tangible assets” and “efficiency ratio” as part of our non-GAAP measures. We believe these non-GAAP measures provide useful information to investors because these are among the measures used by our management team to evaluate our operating performance and make day-to-day operating decisions. In addition, we believe goodwill impairment, restructuring charges and special items in any period do not reflect the operational performance of the business in that period and, accordingly, it is useful to consider these line items with and without goodwill impairment, restructuring charges and special items. We believe this presentation also increases comparability of period-to-period results. We also consider pro forma capital ratios defined by banking regulators but not effective at each period end to be non-GAAP financial measures. Since analysts and banking regulators may assess our capital adequacy using these pro forma ratios, we believe they are useful to provide investors the ability to assess our capital adequacy on the same basis. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Accordingly, our non-GAAP financial measures may not be comparable to similar measures used by other companies. We caution investors not to place undue reliance on such non-GAAP measures, but instead to consider them with the most directly comparable GAAP measure. Non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for our results as reported under GAAP. |
![]() Non-GAAP Reconciliation Table 28 (Excluding restructuring charges and special items) $s in millions, except per share data 3Q14 2Q14 1Q14 4Q13 3Q13 Noninterest income, excluding special items: Noninterest income (GAAP) A $341 $640 $358 $379 $383 Less: Special items - Chicago gain — 288 — — — Noninterest income, excluding special items (non-GAAP) B $341 $352 $358 $379 $383 Total revenue, excluding special items: Total revenue (GAAP) C $1,161 $1,473 $1,166 $1,158 $1,153 Less: Special items - Chicago gain — 288 — — — Total revenue, excluding special items (non-GAAP) D $1,161 $1,185 $1,166 $1,158 $1,153 Noninterest expense, excluding restructuring charges and special items: Noninterest expense (GAAP) E $810 $948 $810 $818 $788 Less: Restructuring charges and special expense items HH 21 115 — 26 — Noninterest expense, excluding restructuring charges and special items (non-GAAP) F $789 $833 $810 $792 $788 Net income (loss), excluding restructuring charges and special Net income (loss) (GAAP) G $189 $313 $166 $152 $144 Add: Restructuring charges and special items, net of income 13 (108) — 17 — Net income (loss), excluding restructuring charges and special items (non-GAAP) H $202 $205 $166 $169 $144 Return on average common equity, excluding restructuring charges and special items: Average common equity (GAAP) I $19,411 $19,607 $19,370 $19,364 $19,627 Return on average common equity, excluding restructuring charges and special items (non-GAAP) H/I 4.14 % 4.19 % 3.48 % 3.47 % 2.91 % Return on average tangible common equity and return on average tangible common equity, excluding restructuring charges and special items: Average common equity (GAAP) I $19,411 $19,607 $19,370 $19,364 $19,627 Less: Average goodwill (GAAP) 6,876 6,876 6,876 6,876 6,876 Less: Average other intangibles (GAAP) 6 7 7 8 9 Add: Average deferred tax liabilities related to goodwill 384 369 351 342 325 Average tangible common equity (non-GAAP) J $12,913 $13,093 $12,838 $12,822 $13,067 Return on average tangible common equity (non-GAAP) G/J 5.81 % 9.59 % 5.24 % 4.71 % 4.34 % Return on average tangible common equity, excluding restructuring charges and special items (non-GAAP) H/J 6.22 % 6.28 % 5.24 % 5.24 % 4.34 % Return on average total assets, excluding restructuring charges and special items: Average total assets (GAAP) K $128,691 $127,148 $123,904 $120,393 $117,386 Return on average total assets, excluding restructuring charges and special items (non-GAAP) H/K 0.62 % 0.65 % 0.54 % 0.56 % 0.49 % Return on average total tangible assets and return on average total tangible assets, excluding restructuring charges and Average total assets (GAAP) K $128,691 $127,148 $123,904 $120,393 $117,386 Less: Average goodwill (GAAP) 6,876 6,876 6,876 6,876 6,876 Less: Average other intangibles (GAAP) 6 7 7 8 9 Add: Average deferred tax liabilities related to goodwill 384 369 351 342 325 Average tangible assets (non-GAAP) L $122,193 $120,634 $117,372 $113,851 $110,826 Return on average total tangible assets (non-GAAP) G/L 0.61 % 1.04 % 0.57 % 0.53 % 0.52 % Return on average total tangible assets, excluding restructuring charges and special items (non-GAAP) H/L 0.66 % 0.68 % 0.57 % 0.59 % 0.52 % QUARTERLY TRENDS |
![]() Non-GAAP Reconciliation Table 29 (Excluding restructuring charges and special items) $s in millions, except per share data 3Q14 2Q14 1Q14 4Q13 3Q13 Efficiency ratio and efficiency ratio, excluding restructuring charges and special items: Net interest income (GAAP) $820 $833 $808 $779 $770 Add: Noninterest income (GAAP) 341 640 358 379 383 Total revenue (GAAP) C $1,161 $1,473 $1,166 $1,158 $1,153 Efficiency ratio (non-GAAP) E/C 69.84 % 64.33 % 69.43 % 70.62 % 68.49 % Efficiency ratio, excluding restructuring charges and special items (non-GAAP) F/D 68.02 % 70.23 % 69.43 % 68.35 % 68.49 % Net income (loss) per average common share - basic and diluted, excluding restructuring charges and special items: Average common shares outstanding - basic (GAAP) M 559,998,324 559,998,324 559,998,324 559,998,324 559,998,324 Average common shares outstanding - diluted (GAAP) N 560,243,747 559,998,324 559,998,324 559,998,324 559,998,324 Net income (loss) applicable to common stockholders (GAAP) O 189 313 166 152 144 Net income (loss) per average common share - basic (GAAP) O/M 0.34 0.56 0.30 0.27 0.26 Net income (loss) per average common share - diluted (GAAP) O/N 0.34 0.56 0.30 0.27 0.26 Net income (loss) applicable to common stockholders, excluding restructuring charges and special items (non-GAAP) P 202 205 166 169 144 Net income per average common share - basic, excluding restructuring charges and special items (non-GAAP) P/M 0.36 0.37 0.30 0.30 0.26 Net income per average common share - diluted, excluding restructuring charges and special items (non-GAAP) P/N 0.36 0.37 0.30 0.30 0.26 Pro forma Basel III common equity Tier 1 capital ratio: Tier 1 common capital (regulatory) $13,330 $13,448 $13,460 $13,301 $13,489 Add: Change in DTA and other threshold deductions (GAAP) (5) (7) (7) 6 — Basel III common equity Tier 1 (non-GAAP) Q $13,335 $13,455 $13,467 $13,295 $13,489 Risk-weighted assets (regulatory general risk weight approach) 103,207 101,397 100,368 98,634 96,735 Net change in credit and other risk-weighted assets (GAAP) 3,207 2,383 2,450 2,687 2,768 Basel III standardized approach risk-weighted assets (non- GAAP) R $106,414 $103,780 $102,818 $101,321 $99,503 Pro forma Basel III common equity Tier 1 capital ratio (non- GAAP) Q/R 12.5 % 13.0 % 13.1 % 13.1 % 13.6 % Salaries and employee benefits, excluding restructuring charges and special items: Salaries and employee benefits (GAAP) S $409 $467 $405 $391 $403 Less: Restructuring charges and special items — 43 — 5 — Salaries and employee benefits, excluding restructuring charges and special items (non-GAAP) T $409 $424 $405 $386 $403 Outside services, excluding restructuring charges and special Outside services (GAAP) U $106 $125 $83 $101 $87 Less: Restructuring charges and special items 19 41 — — — Outside services, excluding restructuring charges and special items (non-GAAP) V $87 $84 $83 $101 $87 Occupancy, excluding restructuring charges and special items: Occupancy (GAAP) W $77 $87 $81 $83 $80 Less: Restructuring charges and special items 2 9 — 11 — Occupancy, excluding restructuring charges and special items (non-GAAP) X $75 $78 $81 $72 $80 Equipment expense, excluding restructuring charges and special items: Equipment expense (GAAP) Y $58 $65 $64 $68 $69 Less: Restructuring charges and special items — 3 — 7 — Equipment expense, excluding restructuring charges and special items (non-GAAP) Z $58 $62 $64 $61 $69 QUARTERLY TRENDS |
![]() Non-GAAP Reconciliation Table 30 (Excluding restructuring charges and special items) $s in millions, except per share data 3Q14 2Q14 1Q14 4Q13 3Q13 Other operating expense, excluding restructuring charges and special items: Other operating expense (GAAP) AA $122 $171 $146 $143 $123 Less: Restructuring charges and special items — 19 — 3 — Other operating expense, excluding restructuring charges and special items (non-GAAP) BB $122 $152 $146 $140 $123 Pre-provision profit, excluding restructuring charges and Special items: Total revenue, excluding restructuring charges and special items (non-GAAP) D $1,161 $1,185 $1,166 $1,158 $1,153 Less: Noninterest expense, excluding restructuring charges and special items (non-GAAP) F 789 833 810 792 788 Pre-provision profit, excluding restructuring charges and special items (non-GAAP) CC $372 $352 $356 $366 $365 Income before income tax expense (benefit), excluding restructuring charges and special items Income before income tax expense (benefit) (GAAP) DD $274 $476 $235 $208 $220 Less: Income before income tax expense (benefit) related to restructuring charges and special items (GAAP) (21) 173 — (26) — Income before income tax expense (benefit), excluding restructuring charges and special items (non-GAAP) EE $295 $303 $235 $234 $220 Income tax expense (benefit), excluding restructuring charges and special items: Income tax expense (benefit) (GAAP) FF $85 $163 $69 $56 $76 Less: Income tax (benefit) related to restructuring charges and special items (GAAP) (8) 65 — (9) — Income tax expense (benefit), excluding restructuring charges and special items (non-GAAP) GG $93 $98 $69 $65 $76 Restructuring charges and special expense items include: Goodwill impairment - - - - - Restructuring charges 1 103 — 26 — Special items 20 12 — — — Restructuring charges and special expense items HH $21 $115 - $26 - Tangible Common Equity (period-end): Stockholders' equity $19,383 $19,597 $19,442 $19,196 $19,413 Less: Goodwill (6,876) (6,876) (6,876) (6,876) (6,876) Less: Other intangible assets (6) (7) (7) (8) (9) Add: Deferred tax liabilities 399 384 366 350 333 Total tangible common equity II $12,900 $13,098 $12,925 $12,662 $12,861 QUARTERLY TRENDS |
![]() Non-GAAP Reconciliation Table 31 Consumer Banking Commercial Banking Other Consolidated Consumer Banking Commercial Banking Other Consolidated Consumer Banking Commercial Banking Other Consolidated Net income (loss) (GAAP) A $54 $139 ($4) $189 $44 $141 $128 $313 $32 $141 ($7) $166 Return on average tangible common equity Average common equity (GAAP) B $4,685 $4,205 $10,521 $19,411 $4,640 $4,129 $10,838 $19,607 $4,568 $4,023 $10,779 $19,370 Less: Average goodwill (GAAP) — — 6,876 6,876 — — 6,876 6,876 — — 6,876 6,876 Average other intangibles (GAAP) — — 6 6 — — 7 7 — — 7 7 Add: Average deferred tax liabilities related to goodwill (GAAP) — — 384 384 — — 369 369 — — 351 351 Average tangible common equity (non- GAAP) C $4,685 $4,205 $4,023 $12,913 $4,640 $4,129 $4,324 $13,093 $4,568 $4,023 $4,247 $12,838 Return on average tangible common equity (non-GAAP) A/C 4.57 % 13.10 % NM 5.81 % 3.87 % 13.78 % NM 9.59 % 2.81 % 14.17 % NM 5.24 % Efficiency ratio Noninterest expense (GAAP) D $609 $162 $39 $810 $655 $157 $136 $948 $638 $153 $19 $810 Net interest income (GAAP) 532 270 18 820 546 264 23 833 537 256 15 808 Noninterest income (GAAP) 226 104 11 341 236 107 297 640 219 107 32 358 Total revenue E $758 $374 $29 $1,161 $782 $371 $320 $1,473 $756 $363 $47 $1,166 Efficiency ratio (non-GAAP) D/E 80.42 % 43.35 % NM 69.84 % 83.61 % 42.36 % NM 64.33 % 84.39 % 42.13 % NM 69.43 % Consumer Banking Commercial Banking Other Consolidated Consumer Banking Commercial Banking Other Consolidated Net income (loss) (GAAP) A $50 $123 ($21) $152 $52 $127 ($35) $144 Return on average tangible common equity Average common equity (GAAP) B $4,448 $3,978 $10,938 $19,364 $4,403 $3,855 $11,369 $19,627 Less: Average goodwill (GAAP) — — 6,876 6,876 — — 6,876 6,876 Average other intangibles (GAAP) — — 8 8 — — 9 9 Add: Average deferred tax liabilities related to goodwill (GAAP) — — 342 342 — — 325 325 Average tangible common equity (non- GAAP) C $4,448 $3,978 $4,396 $12,822 $4,403 $3,855 $4,809 $13,067 Return on average tangible common equity (non-GAAP) A/C 4.40 % 12.10 % NM 4.71 % 4.69 % 13.24 % NM 4.34 % Efficiency ratio Noninterest expense (GAAP) D $638 $164 $16 $818 $622 $156 $10 $788 Net interest income (GAAP) 543 260 (24) 779 543 263 (36) 770 Noninterest income (GAAP) 235 105 39 379 246 93 44 383 Total revenue E $778 $365 $15 $1,158 $789 $356 $8 $1,153 Efficiency ratio (non-GAAP) D/E 81.84 % 44.73 % NM 70.62 % 78.83 % 43.69 % NM 68.49 % Three Months Ended September 30, 2013 Three Months Ended September 30, 2014 Three Months Ended June 30, 2014 Three Months Ended March 31, 2014 Three Months Ended December 31, 2013 Non-GAAP Reconciliation – Segments $s in millions |
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