Q1 2023 presentation
1Q23 Financial Results
In first quarter 2023, we adopted
© 2023
1Q23 results
Financial Results
ROE: 11.7%
ROTCE: 14.0%1
Efficiency ratio: 66%2
Credit Quality
Capital and Liquidity
CET1 ratio: 10.8%5
LCR: 122%6
TLAC ratio: 23.3%7
- Net income of
$5.0 billion , or$1.23 per diluted common share - Revenue of
$20.7 billion , up 17% -
- Net interest income of
$13.3 billion , up 45% - Noninterest income of
$7.4 billion , down 13%
- Net interest income of
- Noninterest expense of
$13.7 billion , down 1% - Pre-taxpre-provision profit3 of
$7.1 billion , up 82% - Effective income tax rate of 16.2%
- Average loans of
$948.7 billion , up 6% - Average deposits of
$1.4 trillion , down 7% - Provision for credit losses4 of
$1.2 billion -
- Total net loan charge-offs of
$604 million , up$299 million , with net loan charge-offs of 0.26% of average loans (annualized) - Allowance for credit losses for loans of
$13.7 billion , up$1.0 billion
- Total net loan charge-offs of
- Common Equity Tier 1 (CET1) capital of
$134.5 billion 5 - CET1 ratio of 10.8% under the Standardized Approach and 12.0% under the Advanced Approach5
- Liquidity coverage ratio (LCR) of122%6
Comparisons in the bullet points are for 1Q23 versus 1Q22, unless otherwise noted.
- Tangible common equity and retuon average tangible common equity (ROTCE) are non-GAAP financial measures. For additional information, including a corresponding reconciliation to GAAP financial measures, see the "Tangible Common Equity" table on page 18.
- The efficiency ratio is noninterest expense divided by total revenue.
- Pre-taxpre-provision profit (PTPP) is total revenue less noninterest expense. Management believes that PTPP is a useful financial measure because it enables investors and others to assess the Company's ability to generate capital to cover credit losses through a credit cycle.
- Includes provision for credit losses for loans, debt securities, and interest-earning deposits with banks.
- The Common Equity Tier 1 (CET1) ratio calculated under the Standardized Approach is our binding CET1 ratio. See page 19 for additional information regarding CET1 capital and ratios. CET1 is a preliminary estimate.
- Liquidity coverage ratio (LCR) represents average high-quality liquid assets divided by average projected net cash outflows, as each is defined under the LCR rule. LCR is a preliminary estimate.
- Represents total loss absorbing capacity (TLAC) divided by risk-weighted assets (RWAs), which is our binding TLAC ratio, determined by using the greater of RWAs under the Standardized and Advanced Approaches. TLAC is a preliminary estimate.
|
1Q23 Financial Results |
2 |
Capital and liquidity
Common Equity Tier 1 Ratio under the Standardized Approach1
|
10.5% |
10.6% |
10.8% |
9.2%
Regulatory
Minimum
and Buffers2
|
1Q22 |
4Q22 |
1Q23 Estimated |
Capital Position
- Common Equity Tier 1 (CET1) ratio of 10.8%1 at
March 31, 2023 remained above our regulatory minimum and buffers of 9.2%2 - CET1 ratio up ~30 bps from 1Q22 and up ~20 bps from 4Q22 and included:
-
$4.0 billion in gross common stock repurchases, or 86.4 million shares, in 1Q23- Period-endcommon shares outstanding down 26.7 million, or 1%, from 1Q22
- As of
March 31, 2023 , our TLAC as a percentage of total risk-weighted assets was 23.3%3 compared with the required minimum of 21.5%
Liquidity Coverage Ratio4
|
119% |
122% |
122% |
100%
Regulatory
Minimum
|
1Q22 |
4Q22 |
1Q23 Estimated |
Liquidity Position
- Strong liquidity position with a 1Q23 liquidity coverage ratio4 of 122% which remained above our regulatory minimum of 100%
- The Common Equity Tier 1 (CET1) ratio calculated under the Standardized Approach is our binding CET1 ratio. See page 19 for additional information regarding CET1 capital and ratios. 1Q23 CET1 is a preliminary estimate.
- Includes a 4.50% minimum requirement, a stress capital buffer of 3.20%, and a G-SIB capital surcharge of 1.50%.
- Represents total loss absorbing capacity (TLAC) divided by risk-weighted assets (RWAs), which is our binding TLAC ratio, determined by using the greater of RWAs under the Standardized and Advanced Approaches. TLAC is a preliminary estimate.
- Liquidity coverage ratio (LCR) represents average high-quality liquid assets divided by average projected net cash outflows, as each is defined under the LCR rule. 1Q23 LCR is a preliminary estimate.
|
1Q23 Financial Results |
3 |
1Q23 earnings
|
Quarter ended |
$ Change from |
|||||||
|
$ in millions, except per share data |
1Q23 |
4Q22 |
1Q22 |
4Q22 |
1Q22 |
|||
|
Net interest income |
|
13,433 |
9,221 |
( |
4,115 |
|||
|
Noninterest income |
7,393 |
6,601 |
8,507 |
792 |
(1,114) |
|||
|
Total revenue |
20,729 |
20,034 |
17,728 |
695 |
3,001 |
|||
|
Net charge-offs |
564 |
560 |
305 |
4 |
259 |
|||
|
Change in the allowance for credit losses |
643 |
397 |
(1,092) |
246 |
1,735 |
|||
|
Provision for credit losses1 |
1,207 |
957 |
(787) |
250 |
1,994 |
|||
|
Noninterest expense |
13,676 |
16,186 |
13,851 |
(2,510) |
(175) |
|||
|
Pre-tax income |
5,846 |
2,891 |
4,664 |
2,955 |
1,182 |
|||
|
Income tax expense (benefit) |
966 |
(29) |
746 |
995 |
220 |
|||
|
Effective income tax rate (%) |
16.2 |
% |
(0.9) |
16.5 |
1,714 |
bps |
(24) |
|
|
Net income |
|
3,155 |
3,788 |
|
1,203 |
|||
|
Diluted earnings per common share |
|
0.75 |
0.91 |
|
0.32 |
|||
|
Diluted average common shares (# mm) |
3,818.7 |
3,832.7 |
3,868.9 |
(14) |
(50) |
|||
|
Retuon equity (ROE) |
11.7 % |
7.1 |
8.7 |
464 |
bps |
307 |
||
|
Retuon average tangible common equity (ROTCE)2 |
14.0 |
8.5 |
10.4 |
554 |
368 |
|||
|
Efficiency ratio |
66 |
81 |
78 |
(1,482) |
(1,215) |
|||
- Includes provision for credit losses for loans, debt securities, and interest-earning deposits with banks.
- Tangible common equity and retuon average tangible common equity are non-GAAP financial measures. For additional information, including a corresponding reconciliation to GAAP financial measures, see the "Tangible Common Equity" table on page 18.
|
1Q23 Financial Results |
4 |
Credit quality
Provision for Credit Losses1 and Net Loan Charge-offs($ in millions)
Allowance for Credit Losses for Loans ($ in millions)
|
560 |
604 |
|||
|
399 |
1,207 |
|||
|
344 |
957 |
|||
|
305 |
||||
|
784 |
||||
|
580 |
||||
|
0.26% |
||||
|
0.23% |
||||
|
0.17% |
||||
|
0.14% |
0.15% |
|||
(787)
12,681
5,533
1.39%
7,148
12,884
5,802
1.37%
7,082
13,225
6,234
1.40%
6,991
13,609
6,653
1.42%
6,956
13,705
6,481
1.45%
7,224
|
1Q22 |
2Q22 |
3Q22 |
4Q22 |
1Q23 |
|
|
Provision for Credit Losses 1 |
Net Loan Charge-offs |
||||
|
Net Loan Charge-off Ratio |
|||||
- Commercial net loan charge-offs down
$16 million to 5 bps of average loans (annualized) on higher recoveries - Consumer net loan charge-offs up
$60 million to 56 bps of average loans (annualized) driven by a$70 million increase in net loan charge-offs in credit card - Nonperforming assets increased
$379 million , or 7%, as higher commercial real estate nonaccrual loans were partially offset by lower residential mortgage nonaccrual loans
Comparisons in the bullet points are for 1Q23 versus 4Q22, unless otherwise noted.
1. Includes provision for credit losses for loans, debt securities, and interest-earning deposits with banks. 1Q23 Financial Results
|
1Q22 |
2Q22 |
3Q22 |
4Q22 |
1Q23 |
|
|
Commercial |
Consumer |
Allowance coverage for total loans |
|||
- Allowance for credit losses for loans (ACL) up from both1Q22 and 4Q22 on increases for commercial real estate loans, primarily office loans, as well as for credit card and auto loans
-
- Allowance coverage for total loans up 6 bps from1Q22 and up 3 bps from 4Q22
- On 1/1/2023, we adopted the previously disclosed Troubled Debt Restructuring (TDR) accounting standard which removed
$429 million of ACL with an offset directly to retained earnings
5
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Q1 2023 quarterly supplement
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