Reported diluted earnings per share of $0.57
Reported results included a negative $0.14 impact from certain items on page 2 of the 2Q19 earnings release including merger-related expenses
Quarterly comparisons are impacted by significant Worldpay gains from the prior quarter and year-ago quarter
CINCINNATI–(BUSINESS WIRE)–Fifth Third Bancorp (FITB):
Key Highlights
- Successful integration of MB Financial
- Remain on-track to achieve MB expense savings by 1Q20 ($255 million pre-tax); expect to achieve ~80% of run-rate savings by year-end
- Noninterest expense, noninterest income, and net interest income performance better than prior guidance
- NIM(a) up 16 bps compared to 2Q18 (up 11 bps excl. purchase accounting accretion) and up 9 bps compared to 1Q19 (up 4 bps excl. purchase accounting accretion)
- Period end loan to core deposit ratio decreased 2% while effectively managing interest bearing core deposit costs (up 4 bps vs. 1Q19)
- ROTCE(a) of 12.3% (adjusted 15.1%, or 15.8% excl. accumulated other comprehensive income)
- Named “Best Regional Bank” for second consecutive year by Kiplinger
|
|
Key Financial Data |
|
|
|
|
|
|
|
|
$ millions for all balance sheet and income statement items |
|
|
|
|
||
|
|
|
2Q19 |
1Q19 |
2Q18 |
|||
|
|
Income Statement Data |
|
|
|
|
|
|
|
|
Net income available to common shareholders |
$427 |
|
$760 |
|
$579 |
|
|
|
Net interest income (U.S. GAAP) |
1,245 |
|
1,082 |
|
1,020 |
|
|
|
Net interest income (FTE)(a) |
1,250 |
|
1,086 |
|
1,024 |
|
|
|
Noninterest income |
660 |
|
1,101 |
|
743 |
|
|
|
Noninterest expense |
1,243 |
|
1,097 |
|
1,001 |
|
|
|
Per Share Data |
|
|
|
|
|
|
|
|
Earnings per share, basic |
$0.57 |
|
$1.14 |
|
$0.84 |
|
|
|
Earnings per share, diluted |
0.57 |
|
1.12 |
|
0.82 |
|
|
|
Book value per share |
26.17 |
|
24.77 |
|
21.75 |
|
|
|
Tangible book value per share(a) |
20.03 |
|
18.64 |
|
18.08 |
|
|
|
Balance Sheet & Credit Quality |
|
|
|
|
|
|
|
|
Average portfolio loans and leases |
$110,095 |
|
$97,773 |
|
$92,557 |
|
|
|
Average deposits |
124,345 |
|
109,591 |
|
103,945 |
|
|
|
Net charge-off ratio(b) |
0.29 |
% |
0.32 |
% |
0.41 |
% |
|
|
Nonperforming asset ratio(c) |
0.51 |
|
0.45 |
|
0.52 |
|
|
|
Financial Ratios |
|
|
|
|
|
|
|
|
Return on average assets |
1.08 |
% |
2.11 |
% |
1.71 |
% |
|
|
Return on average common equity |
9.1 |
|
19.6 |
|
15.9 |
|
|
|
Return on average tangible common equity(a) |
12.3 |
|
23.9 |
|
19.2 |
|
|
|
CET1 capital(d)(e) |
9.58 |
|
9.60 |
|
10.91 |
|
|
|
Net interest margin(a) |
3.37 |
|
3.28 |
|
3.21 |
|
|
|
Efficiency(a) |
65.1 |
|
50.2 |
|
56.7 |
|
|
|
Other than the Quarterly Financial Review tables beginning on page 14 of the 2Q19 earnings release, |
||||||
|
|
|||||||
|
|
|||||||
CEO Commentary
“Our second quarter performance reflected continued positive momentum throughout our businesses as well as the impact of integrating MB Financial. Excluding merger-related expenses, second quarter financial results exceeded our prior expectations, reflecting diligent expense management throughout the Company and strong net interest income growth. The net charge-off ratio also improved both sequentially and year-over-year, reflecting the generally stable macroeconomic environment during the quarter.
During the quarter, we completed the conversion of substantially all systems associated with our acquisition of MB Financial. We remain on track to achieve the previously stated financial synergies from the transaction, which will meaningfully improve our key profitability metrics.
With a clearly defined set of strategic priorities, we remain confident in our ability to generate revenue growth, achieve positive operating leverage, and create significant value for our shareholders.”
-Greg D. Carmichael, Chairman, President and CEO
|
|
Income Statement Highlights |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
($ in millions, except per share data) |
For the Three Months Ended |
|
% Change |
|
|||||||||||||
|
|
|
June |
|
|
March |
|
|
June |
|
|
|
|
|
|
|
|||
|
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
Seq |
|
|
Yr/Yr |
|
|||
|
|
Condensed Statements of Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Net interest income (NII)(a) |
$1,250 |
|
$1,086 |
|
$1,024 |
|
15% |
|
22% |
|
|||||||
|
|
Provision for credit losses |
85 |
|
90 |
|
14 |
|
(6%) |
|
507% |
|
|||||||
|
|
Noninterest income |
660 |
|
1,101 |
|
743 |
|
(40%) |
|
(11%) |
|
|||||||
|
|
Noninterest expense |
1,243 |
|
1,097 |
|
1,001 |
|
13% |
|
24% |
|
|||||||
|
|
Income before income taxes(a) |
$582 |
|
$1,000 |
|
$752 |
|
(42%) |
|
(23%) |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Taxable equivalent adjustment |
5 |
|
4 |
|
4 |
|
25% |
|
25% |
|
|||||||
|
|
Applicable income tax expense |
124 |
|
221 |
|
146 |
|
(44%) |
|
(15%) |
|
|||||||
|
|
Net income |
$453 |
|
$775 |
|
$602 |
|
(42%) |
|
(25%) |
|
|||||||
|
|
Less: Net income attributable to noncontrolling interests |
– |
|
– |
|
– |
|
NM |
|
NM |
|
|||||||
|
|
Net income attributable to Bancorp |
$453 |
|
$775 |
|
$602 |
|
(42%) |
|
(25%) |
|
|||||||
|
|
Dividends on preferred stock |
26 |
|
15 |
|
23 |
|
73% |
|
13% |
|
|||||||
|
|
Net income available to common shareholders |
$427 |
|
$760 |
|
$579 |
|
(44%) |
|
(26%) |
|
|||||||
|
|
Earnings per share, diluted |
$0.57 |
|
$1.12 |
|
$0.82 |
|
(49%) |
|
(30%) |
|
|||||||
Fifth Third Bancorp (Nasdaq: FITB) today reported second quarter 2019 net income of $453 million compared to net income of $602 million in the year-ago quarter. Net income available to common shareholders was $427 million, or $0.57 per diluted share, compared to $579 million, or $0.82 per diluted share in the year-ago quarter. Prior quarter net income was $775 million and net income available to common shareholders was $760 million, or $1.12 per diluted share.
|
Diluted earnings per share impact of certain items |
|
|
|
(after-tax impacts(f); $ in millions, except per share data) |
|
|
|
|
|
|
|
Merger-related expenses |
($84) |
|
|
Valuation of Visa total return swap |
($17) |
|
|
After-tax impact(f) of certain items |
($101) |
|
|
|
|
|
|
Average diluted common shares outstanding (thousands) |
747,750 |
|
|
|
|
|
|
Diluted earnings per share impact |
($0.14) |
|
|
Net Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(FTE; $ in millions)(a) |
For the Three Months Ended |
|
|
% Change |
|
||||||||
|
|
|
June |
|
March |
|
June |
|
|
|
|
|
|||
|
|
|
2019 |
|
2019 |
|
2018 |
|
Seq |
|
Yr/Yr |
|
|||
|
|
Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
$1,641 |
|
|
$1,437 |
|
|
$1,273 |
|
|
14% |
|
29% |
|
|
|
Interest expense |
391 |
|
|
351 |
|
|
249 |
|
|
11% |
|
57% |
|
|
|
Net interest income (NII) |
$1,250 |
|
|
$1,086 |
|
|
$1,024 |
|
|
15% |
|
22% |
|
|
|
Adjusted NII(a) |
$1,234 |
|
|
$1,085 |
|
|
$1,024 |
|
|
14% |
|
21% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Yield/Rate Analysis |
|
|
|
|
|
|
|
|
|
bps Change |
|
||
|
|
Yield on interest-earning assets |
4.42% |
|
|
4.33% |
|
|
3.98% |
|
|
9 |
|
44 |
|
|
|
Rate paid on interest-bearing liabilities |
1.47% |
|
|
1.46% |
|
|
1.12% |
|
|
1 |
|
35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest rate spread |
2.95% |
|
|
2.87% |
|
|
2.86% |
|
|
8 |
|
9 |
|
|
|
Net interest margin (NIM) |
3.37% |
|
|
3.28% |
|
|
3.21% |
|
|
9 |
|
16 |
|
|
|
Adjusted NIM(a) |
3.32% |
|
|
3.28% |
|
|
3.21% |
|
|
4 |
|
11 |
|
Compared to the year-ago quarter, NII increased $226 million, or 22%. Purchase accounting accretion associated with the non-purchase credit impaired loan portfolio from the MB Financial acquisition was $16 million in the second quarter of 2019. Excluding the purchase accounting accretion, adjusted NII increased $210 million, or 21%, primarily driven by the impact of the earning assets from the MB Financial acquisition and higher short-term market rates. Compared to the year-ago quarter, NIM increased 16 bps, or 11 bps, excluding the purchase accounting accretion. Performance was driven by higher short-term market rates, partially offset by higher funding costs and a continued migration from demand deposits into interest-bearing deposits.
Compared to the prior quarter, NII increased $164 million, or 15%. Excluding the purchase accounting accretion, adjusted NII increased $149 million, or 14%, primarily reflecting the full-quarter impact of the acquired earning assets from the MB Financial acquisition and a higher day count, partially offset by lower short-term market rates and a slight increase in funding costs. Compared to the prior quarter, NIM increased 9 bps. Excluding the purchase accounting accretion, adjusted NIM increased 4 bps, primarily reflecting the full-quarter impact of the acquired earning assets from the MB Financial acquisition, partially offset by lower short-term market rates and a higher day count.
|
|
Noninterest Income |
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions) |
For the Three Months Ended |
|
% Change |
|
||||||
|
|
|
June |
|
March |
|
June |
|
|
|
|
|
|
|
|
2019 |
|
2019 |
|
2018 |
|
Seq |
|
Yr/Yr |
|
|
|
Noninterest Income |
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposits |
$143 |
|
$131 |
|
$137 |
|
9% |
|
4% |
|
|
|
Corporate banking revenue |
137 |
|
112 |
|
120 |
|
22% |
|
14% |
|
|
|
Mortgage banking net revenue |
63 |
|
56 |
|
53 |
|
13% |
|
19% |
|
|
|
Wealth and asset management revenue |
122 |
|
112 |
|
108 |
|
9% |
|
13% |
|
|
|
Card and processing revenue |
92 |
|
79 |
|
84 |
|
16% |
|
10% |
|
|
|
Other noninterest income |
93 |
|
592 |
|
250 |
|
(84%) |
|
(63%) |
|
|
|
Securities gains (losses), net |
8 |
|
16 |
|
(5) |
|
(50%) |
|
NM |
|
|
|
Securities gains (losses), net – non-qualifying |
|
|
|
|
|
|
|
|
|
|
|
|
hedges on mortgage servicing rights |
2 |
|
3 |
|
(4) |
|
(33%) |
|
NM |
|
|
|
Total noninterest income |
$660 |
|
$1,101 |
|
$743 |
|
(40%) |
|
(11%) |
|
Reported noninterest income decreased $83 million, or 11%, from the year-ago quarter, and decreased $441 million, or 40%, from the prior quarter. The reported results reflect the full-quarter impact of the MB Financial acquisition on March 22, 2019, and the impact of certain items in the table below including significant Worldpay gains in both the prior quarter and year-ago quarter.
|
|
Noninterest Income excluding certain items |
|||||||||
|
|
($ in millions) |
For the Three Months Ended |
|
|||||||
|
|
|
June |
|
March |
|
|
June |
|
||
|
|
|
2019 |
|
2019 |
|
|
2018 |
|
||
|
|
Noninterest Income excluding certain items |
|
|
|
|
|
|
|
|
|
|
|
Noninterest income (U.S. GAAP) |
$660 |
|
|
$1,101 |
|
|
$743 |
|
|
|
|
Valuation of Visa total return swap |
22 |
|
|
31 |
|
|
10 |
|
|
|
|
Merger-related branch network impairment charge |
– |
|
|
13 |
|
|
– |
|
|
|
|
Gain on sale of Worldpay shares |
– |
|
|
(562) |
|
|
(205) |
|
|
|
|
Branch network impairment charge |
– |
|
|
– |
|
|
30 |
|
|
|
|
Gain from GreenSky IPO |
– |
|
|
– |
|
|
(16) |
|
|
|
|
GreenSky equity securities (gains) / losses |
– |
|
|
(9) |
|
|
– |
|
|
|
|
Securities (gains) / losses, net (excluding GreenSky) |
(8) |
|
|
(7) |
|
|
5 |
|
|
|
|
Noninterest income excluding certain items(a) |
$674 |
|
|
$567 |
|
|
$567 |
|
|
Compared to the year-ago quarter, service charges on deposits increased $6 million, or 4%, primarily driven by higher commercial deposit fees, partially offset by lower consumer deposit fees. Corporate banking revenue increased $17 million, or 14%, primarily driven by business solutions revenue resulting from the MB Financial acquisition. Mortgage banking net revenue increased $10 million, or 19%, primarily driven by higher mortgage originations of $2.9 billion, an increase of 36%. Wealth and asset management revenue increased $14 million, or 13%, primarily driven by higher personal asset management revenue and institutional trust fees. Card and processing revenue increased $8 million, or 10%, reflecting increases in credit and debit transaction volumes, partially offset by higher rewards.
Compared to the prior quarter, service charges on deposits increased $12 million, or 9%, primarily driven by higher commercial deposit fees, partially offset by lower consumer deposit fees. Corporate banking revenue increased $25 million, or 22%, primarily driven by business solutions revenue resulting from the MB Financial acquisition. Mortgage banking net revenue increased $7 million, or 13%, primarily driven by a 76% increase in origination volumes. Wealth and asset management revenue increased $10 million, or 9%, primarily driven by higher personal asset management revenue and institutional trust fees, partially offset by seasonally strong tax-related private client service revenue in the prior quarter. Card and processing revenue increased $13 million, or 16%, reflecting increases in credit and debit transaction volumes, partially offset by higher rewards.
Compared to both the year-ago quarter and prior quarter, noninterest income excluding the items in the table above increased $107 million, or 19%, reflecting the full-quarter impact of the MB Financial acquisition.
Other noninterest income results on a reported basis in the current and previous quarters were impacted by the Visa total return swap valuation adjustments, branch network impairment charges, Worldpay-related gains, and GreenSky IPO gain. Excluding these items, other noninterest income of $115 million increased $46 million, or 67%, compared to the year-ago quarter, primarily driven by other noninterest income from MB Financial. Compared to the prior quarter, other noninterest income excluding these items increased $41 million, or 55%, primarily driven by other noninterest income from MB Financial.
|
|
Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions) |
For the Three Months Ended |
|
|
% Change |
|
||||||||
|
|
|
June |
|
March |
|
|
June |
|
|
|
|
|
|
|
|
|
|
2019 |
|
2019 |
|
|
2018 |
|
|
Seq |
|
Yr/Yr |
|
|
|
|
Noninterest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
$641 |
|
|
$610 |
|
|
$549 |
|
|
5% |
|
17% |
|
|
|
Net occupancy expense |
88 |
|
|
75 |
|
|
74 |
|
|
17% |
|
19% |
|
|
|
Technology and communications |
136 |
|
|
83 |
|
|
67 |
|
|
64% |
|
103% |
|
|
|
Equipment expense |
33 |
|
|
30 |
|
|
30 |
|
|
10% |
|
10% |
|
|
|
Card and processing expense |
34 |
|
|
31 |
|
|
30 |
|
|
10% |
|
13% |
|
|
|
Intangible amortization expense |
14 |
|
|
3 |
|
|
1 |
|
|
NM |
|
NM |
|
|
|
Other noninterest expense |
297 |
|
|
265 |
|
|
250 |
|
|
12% |
|
19% |
|
|
|
Total noninterest expense |
$1,243 |
|
|
$1,097 |
|
|
$1,001 |
|
|
13% |
|
24% |
|
|
|
Impacts of Merger-Related Expenses |
|
|
|
|
|
|
|
|
|
|
|
($ in millions) |
For the Three Months Ended |
|
|||||||
|
|
|
June |
|
March |
|
|
June |
|
|
|
|
|
|
2019 |
|
2019 |
|
|
2018 |
|
|
|
|
|
Merger-Related Expenses |
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
$41 |
|
|
$35 |
|
|
$- |
|
|
|
|
Net occupancy expense |
6 |
|
|
– |
|
|
– |
|
|
|
|
Technology and communications |
49 |
|
|
11 |
|
|
– |
|
|
|
|
Equipment expense |
1 |
|
|
– |
|
|
– |
|
|
|
|
Card and processing expense |
1 |
|
|
– |
|
|
– |
|
|
|
|
Intangible amortization expense |
– |
|
|
– |
|
|
– |
|
|
|
|
Other noninterest expense |
11 |
|
|
30 |
|
|
2 |
|
|
|
|
Total merger-related expenses |
$109 |
|
|
$76 |
|
|
$2 |
|
|
|
|
Noninterest Expense excluding Merger-Related Expenses(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
($ in millions) |
For the Three Months Ended |
|
|
% Change |
|
||||||||||
|
|
|
June |
|
March |
|
|
June |
|
|
|
|
|
|
|||
|
|
|
2019 |
|
2019 |
|
|
2018 |
|
|
Seq |
|
Yr/Yr |
|
|||
|
|
Noninterest Expense excluding Merger-Related Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Compensation and benefits |
$600 |
|
|
$575 |
|
|
$549 |
|
|
4% |
|
9% |
|
||
|
|
Net occupancy expense |
82 |
|
|
75 |
|
|
74 |
|
|
9% |
|
11% |
|
||
|
|
Technology and communications |
87 |
|
|
72 |
|
|
67 |
|
|
21% |
|
30% |
|
||
|
|
Equipment expense |
32 |
|
|
30 |
|
|
30 |
|
|
7% |
|
7% |
|
||
|
|
Card and processing expense |
33 |
|
|
31 |
|
|
30 |
|
|
6% |
|
10% |
|
||
|
|
Intangible amortization expense |
14 |
|
|
3 |
|
|
1 |
|
|
NM |
|
NM |
|
||
|
|
Other noninterest expense |
286 |
|
|
235 |
|
|
248 |
|
|
22% |
|
15% |
|
||
|
|
Total noninterest expense excluding merger-related expenses |
$1,134 |
|
|
$1,021 |
|
|
$999 |
|
|
11% |
|
14% |
|
||
Compared to the year-ago quarter, reported noninterest expense increased $242 million, or 24%, impacted by merger-related expenses and the full quarter impact of ongoing expenses from the MB Financial acquisition. Excluding the merger-related expenses noted in the table above and intangible amortization expense, noninterest expense increased $122 million, or 12%, driven by higher other noninterest expense from the MB Financial acquisition (primarily operating lease expense), higher compensation and benefits as well as continued technology investments. The growth was partially offset by a decrease in incentive based payments and the elimination of the FDIC surcharge. Noninterest expense from the year-ago quarter included the impact of compensation expense primarily related to a staffing review as well as a contribution to the Fifth Third Foundation.
Compared to the prior quarter, reported noninterest expense increased $146 million, or 13%, and was impacted by merger-related expenses and elevated other noninterest expense. Excluding the merger-related expenses and the aforementioned intangible amortization expense, noninterest expense increased $102 million, or 10%, driven by higher other noninterest expense from the MB Financial acquisition (primarily operating lease expense), and an increase in technology and communications expense.
|
|
Average Interest-Earning Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions) |
For the Three Months Ended |
|
|
% Change |
|
||||||||
|
|
|
June |
|
March |
|
June |
|
|
|
|
|
|||
|
|
|
2019 |
|
2019 |
|
2018 |
|
Seq |
|
Yr/Yr |
|
|||
|
|
Average Portfolio Loans and Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial loans and leases: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial loans |
$52,078 |
|
|
$46,011 |
|
|
$42,292 |
|
|
13% |
|
23% |
|
|
|
Commercial mortgage loans |
10,632 |
|
|
7,414 |
|
|
6,514 |
|
|
43% |
|
63% |
|
|
|
Commercial construction loans |
5,248 |
|
|
4,838 |
|
|
4,743 |
|
|
8% |
|
11% |
|
|
|
Commercial leases |
3,809 |
|
|
3,555 |
|
|
3,847 |
|
|
7% |
|
(1%) |
|
|
|
Total commercial loans and leases |
$71,767 |
|
|
$61,818 |
|
|
$57,396 |
|
|
16% |
|
25% |
|
|
|
Consumer loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage loans |
$16,804 |
|
|
$15,624 |
|
|
$15,581 |
|
|
8% |
|
8% |
|
|
|
Home equity |
6,376 |
|
|
6,355 |
|
|
6,672 |
|
|
– |
|
(4%) |
|
|
|
Indirect secured consumer loans |
10,190 |
|
|
9,176 |
|
|
8,968 |
|
|
11% |
|
14% |
|
|
|
Credit card |
2,408 |
|
|
2,396 |
|
|
2,221 |
|
|
1% |
|
8% |
|
|
|
Other consumer loans |
2,550 |
|
|
2,404 |
|
|
1,719 |
|
|
6% |
|
48% |
|
|
|
Total consumer loans |
$38,328 |
|
|
$35,955 |
|
|
$35,161 |
|
|
7% |
|
9% |
|
|
|
Portfolio loans and leases |
$110,095 |
|
|
$97,773 |
|
|
$92,557 |
|
|
13% |
|
19% |
|
|
|
Loans held for sale |
898 |
|
|
589 |
|
|
675 |
|
|
52% |
|
33% |
|
|
|
Securities and other short-term investments |
37,797 |
|
|
36,101 |
|
|
34,935 |
|
|
5% |
|
8% |
|
|
|
Total average interest-earning assets |
$148,790 |
|
|
$134,463 |
|
|
$128,167 |
|
|
11% |
|
16% |
|
Compared to the year-ago quarter, average total portfolio loans and leases increased 19%, reflecting the impact of the MB Financial acquisition near the end of the first quarter of 2019. Average commercial portfolio loans and leases increased 25%, reflecting the impact of MB Financial as well as higher commercial and industrial (C&I) and commercial mortgage loans, partially offset by a decline in commercial leases. Average consumer portfolio loans increased 9%, reflecting the impact of MB Financial as well as growth in other consumer loans and indirect secured consumer loans.
Compared to the prior quarter, average total portfolio loans and leases increased 13%, reflecting the full-quarter impact of MB Financial. Average commercial portfolio loans and leases increased 16%, reflecting the full-quarter impact of MB Financial, partially offset by a decline in commercial leases. Average consumer portfolio loans increased 7%, reflecting the full-quarter impact of MB Financial as well as growth in indirect secured consumer loans and other consumer loans.
Period end commercial line utilization was 37%, compared to 35% in the year-ago quarter and 38% in the prior quarter.
Average securities and other short-term investments were $37.8 billion compared to $34.9 billion in the year-ago quarter and $36.1 billion in the prior quarter. Growth in the portfolio reflected both the impact from MB Financial and an increase in other short-term investments driven by strong deposit growth in excess of loan growth. Average available-for-sale debt and other securities of $34.7 billion increased 6% compared to the year-ago quarter increased 3% compared to the prior quarter.
|
Average Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
($ in millions) |
For the Three Months Ended |
|
|
% Change |
|
||||||||||||
|
|
|
June |
|
|
March |
|
|
June |
|
|
|
|
|
|
|
|||
|
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|
Seq |
|
Yr/Yr |
|
||||
|
|
Average Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Demand |
$35,818 |
|
|
$30,557 |
|
|
$32,834 |
|
|
17% |
|
9% |
|
||||
|
|
Interest checking |
36,514 |
|
|
33,697 |
|
|
28,715 |
|
|
8% |
|
27% |
|
||||
|
|
Savings |
14,418 |
|
|
13,052 |
|
|
13,618 |
|
|
10% |
|
6% |
|
||||
|
|
Money market |
25,934 |
|
|
23,133 |
|
|
22,036 |
|
|
12% |
|
18% |
|
||||
|
|
Foreign office(g) |
163 |
|
|
208 |
|
|
371 |
|
|
(22%) |
|
(56%) |
|
||||
|
|
Total transaction deposits |
$112,847 |
|
|
$100,647 |
|
|
$97,574 |
|
|
12% |
|
16% |
|
||||
|
|
Other time |
5,678 |
|
|
4,860 |
|
|
4,018 |
|
|
17% |
|
41% |
|
||||
|
|
Total core deposits |
$118,525 |
|
|
$105,507 |
|
|
$101,592 |
|
|
12% |
|
17% |
|
||||
|
|
Certificates – $100,000 and over |
5,780 |
|
|
3,358 |
|
|
2,155 |
|
|
72% |
|
168% |
|
||||
|
|
Other deposits |
40 |
|
|
726 |
|
|
198 |
|
|
(94%) |
|
(80%) |
|
||||
|
|
Total average deposits |
$124,345 |
|
|
$109,591 |
|
|
$103,945 |
|
|
13% |
|
20% |
|
||||
Compared to the year-ago quarter, average core deposits increased 17%, primarily driven by higher interest checking deposits, money market deposits, and demand deposits, reflecting the impact of MB Financial. The increases were partially offset by lower deposits in foreign offices. Compared to the prior quarter, average core deposits increased 12%, primarily driven by higher demand deposits, interest checking deposits, and money market deposits. Average demand deposits represented 30% of total core deposits in the second quarter of 2019, up from 29% in the prior quarter.
|
Average Wholesale Funding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
($ in millions) |
For the Three Months Ended |
|
|
% Change |
|
||||||||||
|
|
|
June |
|
March |
|
June |
|
|
|
|
|
|||||
|
|
|
2019 |
|
2019 |
|
2018 |
|
Seq |
|
Yr/Yr |
|
|||||
|
|
Average Wholesale Funding |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Certificates – $100,000 and over |
$5,780 |
|
|
$3,358 |
|
|
$2,155 |
|
|
72% |
|
168% |
|
||
|
|
Other deposits |
40 |
|
|
726 |
|
|
198 |
|
|
(94%) |
|
(80%) |
|
||
|
|
Federal funds purchased |
1,151 |
|
|
2,019 |
|
|
1,080 |
|
|
(43%) |
|
7% |
|
||
|
|
Other short-term borrowings |
1,119 |
|
|
646 |
|
|
2,452 |
|
|
73% |
|
(54%) |
|
||
|
|
Long-term debt |
15,543 |
|
|
15,438 |
|
|
14,579 |
|
|
1% |
|
7% |
|
||
|
|
Total average wholesale funding |
$23,633 |
|
|
$22,187 |
|
|
$20,464 |
|
|
7% |
|
15% |
|
||
Compared to the year-ago quarter, average wholesale funding increased 15% driven by growth in jumbo CD balances and long-term debt, partially offset by a decrease in other short-term borrowings. Compared to the prior quarter, average wholesale funding increased 7% reflecting an increase in jumbo CD balances and other short-term borrowings, partially offset by a decrease in federal funds borrowings and other deposits.
|
|
Credit Quality Summary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions) |
For the Three Months Ended |
|||||||||||||
|
|
|
June |
|
March |
|
December |
|
September |
|
June |
|||||
|
|
|
2019 |
|
2019 |
|
2018 |
|
2018 |
|
2018 |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total nonaccrual portfolio loans and leases (NPLs) |
$521 |
|
|
$450 |
|
|
$348 |
|
|
$403 |
|
|
$437 |
|
|
|
Repossessed property |
8 |
|
|
11 |
|
|
10 |
|
|
8 |
|
|
7 |
|
|
|
OREO |
31 |
|
|
37 |
|
|
37 |
|
|
37 |
|
|
36 |
|
|
|
Total nonperforming portfolio assets (NPAs) |
$560 |
|
|
$498 |
|
|
$395 |
|
|
$448 |
|
|
$480 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NPL ratio(h) |
0.48% |
|
|
0.41% |
|
|
0.37% |
|
|
0.43% |
|
|
0.47% |
|
|
|
NPA ratio(c) |
0.51% |
|
|
0.45% |
|
|
0.41% |
|
|
0.48% |
|
|
0.52% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans and leases 30-89 days past due (accrual) |
383 |
|
|
322 |
|
|
297 |
|
|
270 |
|
|
217 |
|
|
|
Total loans and leases 90 days past due (accrual) |
128 |
|
|
132 |
|
|
93 |
|
|
87 |
|
|
89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses, beginning |
$1,115 |
|
|
$1,103 |
|
|
$1,091 |
|
|
$1,077 |
|
|
$1,138 |
|
|
|
Total net losses charged-off |
(78) |
|
|
(77) |
|
|
(83) |
|
|
(72) |
|
|
(94) |
|
|
|
Provision for loan and lease losses |
78 |
|
|
89 |
|
|
95 |
|
|
86 |
|
|
33 |
|
|
|
Allowance for loan and lease losses, ending |
$1,115 |
|
|
$1,115 |
|
|
$1,103 |
|
|
$1,091 |
|
|
$1,077 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserve for unfunded commitments, beginning |
$133 |
|
|
$131 |
|
|
$129 |
|
|
$131 |
|
|
$151 |
|
|
|
Reserve for acquired commitments |
7 |
|
|
1 |
|
|
– |
|
|
– |
|
|
– |
|
|
|
Provision for (benefit from) the reserve for unfunded commitments |
7 |
|
|
1 |
|
|
2 |
|
|
(2) |
|
|
(20) |
|
|
|
Reserve for unfunded commitments, ending |
$147 |
|
|
$133 |
|
|
$131 |
|
|
$129 |
|
|
$131 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance for credit losses |
$1,262 |
|
|
$1,248 |
|
|
$1,234 |
|
|
$1,220 |
|
|
$1,208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As a percent of portfolio loans and leases |
1.02% |
|
|
1.02% |
|
|
1.16% |
|
|
1.17% |
|
|
1.17% |
|
|
|
As a percent of nonperforming portfolio loans and leases |
214% |
|
|
248% |
|
|
317% |
|
|
270% |
|
|
247% |
|
|
|
As a percent of nonperforming portfolio assets |
199% |
|
|
224% |
|
|
279% |
|
|
243% |
|
|
224% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses charged-off |
$(119) |
|
|
$(108) |
|
|
$(116) |
|
|
$(112) |
|
|
$(118) |
|
|
|
Total recoveries of losses previously charged-off |
41 |
|
|
31 |
|
|
33 |
|
|
40 |
|
|
24 |
|
|
|
Total net losses charged-off |
$(78) |
|
|
$(77) |
|
|
$(83) |
|
|
$(72) |
|
|
$(94) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-off ratio (NCO ratio)(b) |
0.29% |
|
|
0.32% |
|
|
0.35% |
|
|
0.30% |
|
|
0.41% |
|
|
|
Commercial NCO ratio |
0.13% |
|
|
0.11% |
|
|
0.19% |
|
|
0.19% |
|
|
0.34% |
|
|
|
Consumer NCO ratio |
0.59% |
|
|
0.68% |
|
|
0.61% |
|
|
0.50% |
|
|
0.52% |
|
Compared to the year-ago quarter, NPLs increased $84 million, or 19%, with the resulting NPL ratio of 0.48% increasing 1 bp. NPAs increased $80 million, or 17%, with the resulting NPA ratio of 0.51% decreasing 1 bp. Compared to the prior quarter, NPLs increased $71 million, or 16%, with the resulting NPL ratio increasing 7 bps.
Contacts
Investors:
Chris Doll (513) 534–2345
Media:
Gary Rhodes (513) 534–4225
