2024 shaping up to be a strong year for biopharma SAN FRANCISCO, Aug. 7, 2024 /PRNewswire/ -- In the first half of 2024, 89% of US venture capital (VC) funds at or above $25M hit their fundraising targets, marking the second-highest rate in history, according to the latest report from Silicon Valley Bank (SVB), a division of First Citizens Bank. The 2024 report also found that the biopharma sector could be on track for a record-setting year after reaching high investment levels, particularly in larger deals ...

Core Insights - First Citizens Bank announced a $45 million revolving credit facility provided by CIT Northbridge Credit to MacPherson's, the largest creative materials distributor in North America [1][2]. Company Overview - MacPherson's distributes over 50,000 products from more than 200 brands to retailers globally and is headquartered in Suwanee, Georgia, with warehouses in Suwanee and Reno, Nevada [2]. - The CEO of MacPherson's, Dave Schofield, expressed appreciation for CIT Northbridge Credit's expertise and agility in creating a financial package to support the company's growth objectives [2]. Financial Partnership - CIT Northbridge Credit is recognized for supporting middle-market companies with flexible asset-based debt solutions, offering revolving and term loan commitments ranging from $15 million to $150 million [3]. - The partnership aims to facilitate MacPherson's strategic initiatives, leveraging CIT Northbridge Credit's experience in the creative materials industry [3]. First Citizens Bank Overview - First Citizens Bank, headquartered in Raleigh, N.C., offers a wide range of banking services, including commercial banking and innovation banking, with over 500 branches across 30 states [4]. - The parent company, First Citizens BancShares, Inc., is a top 20 U.S. financial institution with assets exceeding $200 billion [4].

RALEIGH, N.C., Aug. 1, 2024 /PRNewswire/ -- First Citizens Wealth today announced it is expanding its presence in Atlanta to better support growing demand from its core clientele of entrepreneurs and business owners. Continued growth is driving the recent addition of a portfolio strategist and the impending additions of a wealth consultant and two private bankers to the First Citizens Wealth team as it expands its capacity to help clients meet their financial objectives. The First Citizens Wealth team in At ...

RALEIGH, N.C., July 31, 2024 /PRNewswire/ -- First Citizens Bank today announced that its Middle Market Banking business provided $25 million in financing to F.W. Webb, the largest wholesale distributor of plumbing, heating and industrial products in the Northeastern U.S. The financing provided by First Citizens Middle Market Banking will be used to refinance F.W. Webb's newly constructed warehouse and distribution center with a showroom in Boston, Mass. Located at 101 Hampden Street, the property is nearby ...

RALEIGH, N.C., July 29, 2024 /PRNewswire/ -- First Citizens Bank today announced that its Middle Market Banking group is expanding in the Northeastern U.S., leveraging its deep middle market expertise to provide a full-suite of financial solutions to midsize businesses across the region. The group's Northeast expansion is bolstered by recent hirings of Boston-based Northeast Market Executive Nate Pusey and Managing Director John Tyson, as well as New York-based Managing Director Marc Einerman. The Northeast ...

Financial Data and Key Metrics - The company delivered solid financial results with peer-leading return on assets, net interest margin, adjusted efficiency ratio, loan growth, CET1 ratio, and loan portfolio yield [15] - Headline net interest income increased slightly over the last quarter, with higher interest income partially offset by lower accretion and higher deposit costs [28] - Adjusted non-interest income was slightly better than expected due to higher client investment fees and increased average balances in SVB commercial off-balance sheet client funds [31] - Adjusted non-interest expense increased sequentially by approximately 1%, with expense growth concentrated in equipment expenses and higher marketing expenses [32] - Net charge-offs were $132 million or 0.38%, on the low end of the guidance range, and non-performing loans remained relatively stable [34] - The allowance ratio decreased by 6 basis points to 1.22%, driven by a mix shift from recent growth in the global fund banking portfolio and lower specific reserves on individually evaluated loans [36] Business Segment Performance - The General Bank saw positive loan trends, particularly in business and commercial loans, with strong growth in SBA, SVB private, and wealth channels [20] - SVB commercial achieved quarter-over-quarter loan growth driven by high-quality loans in the global fund banking and capital call lending business [24] - The commercial bank segment continued to deliver strong loan growth, primarily in project financing for energy and data centers [16] - Deposit growth in the branch network during the first half of the year exceeded expectations, with new production and client acquisition contributing to further balance sheet growth [23] Market Performance - Loans grew by $4 billion over the linked quarter, an annualized growth rate of 11.8%, led by a $2.1 billion increase in FCD commercial [37] - Deposits grew at an annualized rate of 4%, or by $1.4 billion to $1.5 billion, driven by strong core deposit growth in SVB commercial and the general bank [38] - The decline in direct bank deposits was due to a $1.9 billion decrease in time deposits, partially offset by a $1.8 billion increase in savings accounts [39] Strategic Priorities and Industry Competition - The company remains focused on deepening customer relationships, prudently growing core deposits and loans, and allocating capital [51] - The company is building strategies to mitigate the expected negative impact of interest rate reductions, including targeting operating accounts, growing quality loans, and improving non-interest income [16] - The company plans to continue using the direct bank as a lever to grow core deposits in the current high-pricing pressure and competitive environment [21] Management Commentary on Operating Environment and Future Outlook - The company expects high single-digit annualized percentage loan growth in the third quarter, driven broadly across business segments [41] - The company anticipates headline net interest income to be relatively flat in the third quarter if there is one rate cut, with lower accretion and slightly higher deposit costs offset by higher investment securities yield [45] - The company expects adjusted non-interest income to be in the range of $1.85 billion to $1.9 billion for the full year, slightly higher than previous guidance [63] - The company anticipates achieving the lower 25% band of its cost base goal by the end of 2024, with savings offset by continued capability build-out for regulatory capabilities [48] Other Important Information - The company's board approved a share repurchase plan allowing the repurchase of shares up to $3.5 billion [15] - The company was recently included in the Fortune 500 list for the first time [15] - The company expects to complete its next capital plan in the first quarter of 2025 [26] Q&A Session Summary Question: Share Repurchase Plan and CET-1 Ratio Target - The company plans to execute the $3.5 billion share repurchase plan over the next four to five quarters, aiming to manage the adjusted CET-1 ratio down to the 10.5% range by the end of 2025 [53][97] - The company may consider another share repurchase plan in the back half of 2025 if earnings accretion continues to outpace organic growth [97] Question: Venture Capital Space Outlook - The outlook for venture investment remains mixed, with a slight uptick in the second quarter but no clear signs of significant improvement in the near term [74] Question: SVB Depositors and Loan-to-Deposit Ratio - The company is encouraged by deposit growth in SVB commercial but is focused on holistic client relationships and product suitability rather than narrowly focusing on deposit growth [75] Question: Net Interest Income (NII) Outlook - The company expects NII to remain relatively flat over the next several quarters, with potential rate cuts and loan growth balancing out the impact [79][91] Question: Asset Sensitivity and Rate Cuts - The company has reduced its asset sensitivity from 20% to 14% over the past four quarters and aims to reach a 10% to 12% range, which would mitigate the impact of potential rate cuts [86]

The reported revenue compares to the Zacks Consensus Estimate of $2.3 billion, representing a surprise of +7.03%. The company delivered an EPS surprise of +13.27%, with the consensus EPS estimate being $44.91. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Efficiency Ratio: 56.4% versus the six-analyst average estimate of 53.1%. Net Interest Margin: 3.6% versu ...

This quarterly report represents an earnings surprise of 13.27%. A quarter ago, it was expected that this bank would post earnings of $44.27 per share when it actually produced earnings of $52.92, delivering a surprise of 19.54%. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. While First Citizens has outperformed the market so far this year, the question tha ...

[Summary Financial Data & Key Metrics](index=1&type=section&id=1.%20Summary%20Financial%20Data%20%26%20Key%20Metrics) This section summarizes key financial results, per-share data, performance metrics, balance sheet items, capital ratios, and asset quality [Results of Operations](index=1&type=section&id=1.1%20Results%20of%20Operations) The company reported a slight quarter-over-quarter decrease in net income and diluted EPS, but a year-over-year increase. Pre-tax, pre-provision net revenue (PPNR) showed a modest increase both quarter-over-quarter and year-over-year Net Income and EPS Trends | Metric | Q2 2024 | Q1 2024 | Q2 2023 | 6M 2024 | 6M 2023 | | :--------------------------------- | :------ | :------ | :------ | :------ | :------ | | Net income ($M) | 707 | 731 | 682 | 1,438 | 10,200 | | Net income available to common stockholders ($M) | 691 | 716 | 667 | 1,407 | 10,171 | | Diluted EPS ($) | 47.54 | 49.26 | 45.87 | 96.80 | 699.53 | | Adjusted diluted EPS ($) | 50.87 | 52.92 | 52.60 | 103.79 | 72.69 | | PPNR ($M) | 1,074 | 1,068 | 1,047 | 2,142 | 11,301 | | Adjusted PPNR ($M) | 1,132 | 1,141 | 1,221 | 2,273 | 1,703 | - Net interest income remained stable QoQ (**$1,821M** vs **$1,817M**) but decreased by **7.14% YoY** (**$1,821M** vs **$1,961M**)[1](index=1&type=chunk) [Per Share Information](index=1&type=section&id=1.2%20Per%20Share%20Information) Diluted earnings per common share (EPS) saw a slight decline quarter-over-quarter but an increase year-over-year. Book value and tangible book value per common share continued to grow steadily Per Share Data | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :----------------------------------- | :-------- | :-------- | :-------- | | Diluted EPS ($) | 47.54 | 49.26 | 45.87 | | Adjusted diluted EPS ($) | 50.87 | 52.92 | 52.60 | | Book value per common share at period end ($) | 1,487.00 | 1,443.03 | 1,300.93 | | Tangible book value per common share (TBV) at period end ($) | 1,443.92 | 1,398.88 | 1,253.20 | - Book value per common share increased by **3.05% QoQ** and **14.30% YoY**. Tangible book value per common share increased by **3.22% QoQ** and **15.22% YoY**[1](index=1&type=chunk) [Key Performance Metrics](index=1&type=section&id=1.3%20Key%20Performance%20Metrics) Key performance metrics showed mixed trends, with Return on Average Assets (ROA) and Return on Average Common Equity (ROE) generally declining QoQ and YoY, while the efficiency ratio improved year-over-year. Net Interest Margin (NIM) continued its downward trend Key Performance Metrics | Metric | Q2 2024 | Q1 2024 | Q2 2023 | 6M 2024 | 6M 2023 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Return on average assets (ROA) | 1.30 % | 1.36 % | 1.31 % | 1.33 % | 12.62 % | | Adjusted ROA | 1.39 % | 1.46 % | 1.49 % | 1.42 % | 1.34 % | | Return on average common equity (ROE) | 13.13 % | 13.97 % | 14.35 % | 13.54 % | 140.82 % | | Adjusted ROE | 14.05 % | 15.01 % | 16.46 % | 14.52 % | 14.63 % | | Efficiency ratio | 56.36 % | 56.30 % | 60.06 % | 56.33 % | 17.68 % | | Net interest margin (NIM) | 3.64 % | 3.67 % | 4.11 % | 3.66 % | 3.87 % | - The efficiency ratio improved significantly YoY from **60.06% to 56.36%**, indicating better cost management[1](index=1&type=chunk) - Net interest margin (NIM) decreased by **0.03 percentage points QoQ** and **0.47 percentage points YoY**[1](index=1&type=chunk) [Select Balance Sheet Items](index=1&type=section&id=1.4%20Select%20Balance%20Sheet%20Items) The balance sheet showed continued growth in total loans and leases and total deposits. The loan to deposit ratio increased quarter-over-quarter, while the proportion of noninterest-bearing deposits to total deposits decreased year-over-year Select Balance Sheet Items at Period End | Metric | Q2 2024 ($M) | Q1 2024 ($M) | Q2 2023 ($M) | | :--------------------------------------- | :----------- | :----------- | :----------- | | Total investment securities | 37,666 | 35,044 | 22,171 | | Total loans and leases | 139,341 | 135,370 | 133,015 | | Total deposits | 151,079 | 149,609 | 141,164 | | Total borrowings | 37,458 | 37,540 | 40,139 | | Loan to deposit ratio | 92.23 % | 90.48 % | 94.23 % | | Noninterest-bearing deposits to total deposits | 26.49 % | 26.25 % | 31.56 % | - Total loans and leases increased by **2.93% QoQ** and **4.76% YoY**. Total deposits increased by **0.98% QoQ** and **7.02% YoY**[1](index=1&type=chunk) - Noninterest-bearing deposits to total deposits decreased by **5.07 percentage points YoY**, indicating a shift towards interest-bearing accounts[1](index=1&type=chunk) [Capital Ratios](index=1&type=section&id=1.5%20Capital%20Ratios) Capital ratios remained strong and generally stable, with the Tier 1 leverage capital ratio showing a consistent upward trend, indicating improved financial leverage Capital Ratios at Period End | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :-------------------------- | :------ | :------ | :------ | | Total risk-based capital ratio | 15.45 % | 15.66 % | 15.84 % | | Tier 1 risk-based capital ratio | 13.87 % | 14.00 % | 14.00 % | | Common equity Tier 1 ratio | 13.33 % | 13.44 % | 13.38 % | | Tier 1 leverage capital ratio | 10.29 % | 10.11 % | 9.50 % | - The Tier 1 leverage capital ratio increased by **0.18 percentage points QoQ** and **0.79 percentage points YoY**[1](index=1&type=chunk) [Asset Quality](index=1&type=section&id=1.6%20Asset%20Quality) Asset quality metrics showed a slight increase in nonaccrual loans to total loans and leases, while the allowance for loan and lease losses (ALLL) to loans ratio saw a minor decrease. The net charge-off ratio increased QoQ but decreased YoY Asset Quality at Period End | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :------------------------------------------------- | :------ | :------ | :------ | | Nonaccrual loans to total loans and leases | 0.82 % | 0.79 % | 0.70 % | | Allowance for loan and lease losses (ALLL) to loans and leases | 1.22 % | 1.28 % | 1.23 % | | Net charge-off ratio for the period | 0.38 % | 0.31 % | 0.47 % | - Nonaccrual loans to total loans and leases increased by **0.03 percentage points QoQ** and **0.12 percentage points YoY**[1](index=1&type=chunk) - The net charge-off ratio increased by **0.07 percentage points QoQ** but decreased by **0.09 percentage points YoY**[1](index=1&type=chunk) [Consolidated GAAP Financial Statements](index=2&type=section&id=2.%20Consolidated%20GAAP%20Financial%20Statements) This section presents the company's unaudited GAAP income statement and balance sheet, detailing revenue, expenses, assets, liabilities, and equity [Income Statement (Unaudited)](index=2&type=section&id=2.1%20Income%20Statement%20(Unaudited)) The GAAP income statement shows a slight decrease in net income quarter-over-quarter but a modest increase year-over-year. Total interest income increased, while total interest expense also rose, leading to a stable net interest income QoQ but a decrease YoY. Noninterest income and expense saw minor fluctuations Key Income Statement Figures | Metric | Q2 2024 ($M) | Q1 2024 ($M) | Q2 2023 ($M) | 6M 2024 ($M) | 6M 2023 ($M) | | :--------------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total interest income | 3,130 | 3,084 | 2,953 | 6,214 | 4,164 | | Total interest expense | 1,309 | 1,267 | 992 | 2,576 | 1,353 | | Net interest income | 1,821 | 1,817 | 1,961 | 3,638 | 2,811 | | Provision for credit losses | 95 | 64 | 151 | 159 | 934 | | Noninterest income | 639 | 627 | 658 | 1,266 | 10,917 | | Noninterest expense | 1,386 | 1,376 | 1,572 | 2,762 | 2,427 | | Net income | 707 | 731 | 682 | 1,438 | 10,200 | - Net interest income remained stable QoQ (**0.22% increase**) but decreased by **7.14% YoY**. Noninterest income decreased by **2.89% YoY**, largely due to a significant 'Gain on acquisition' in Q2 2023 (**$55M**) not recurring[2](index=2&type=chunk) - Salaries and benefits, the largest noninterest expense, decreased by **3.87% YoY** in Q2 2024[2](index=2&type=chunk) [Balance Sheet (Unaudited)](index=3&type=section&id=2.2%20Balance%20Sheet%20(Unaudited)) The balance sheet shows continued growth in total assets, driven by increases in investment securities and loans and leases. Total deposits also grew, with a notable shift from noninterest-bearing to interest-bearing deposits year-over-year Key Balance Sheet Items | Metric | Q2 2024 ($M) | Q1 2024 ($M) | Q2 2023 ($M) | | :--------------------------------------- | :----------- | :----------- | :----------- | | Total assets | 219,827 | 217,836 | 209,502 | | Total investment securities | 37,666 | 35,044 | 22,171 | | Loans and leases, net of ALLL | 137,641 | 133,633 | 131,378 | | Total deposits | 151,079 | 149,609 | 141,164 | | Noninterest-bearing deposits | 40,016 | 39,276 | 44,547 | | Interest-bearing deposits | 111,063 | 110,333 | 96,617 | | Total borrowings | 37,458 | 37,540 | 40,139 | | Total stockholders' equity | 22,487 | 21,848 | 19,771 | - Total assets increased by **0.91% QoQ** and **4.93% YoY**. Total investment securities increased significantly by **70% YoY**[3](index=3&type=chunk) - Noninterest-bearing deposits decreased by **10.17% YoY**, while interest-bearing deposits increased by **14.96% YoY**, indicating a shift in deposit composition[3](index=3&type=chunk) [Non-GAAP Adjustments and Adjusted Financials](index=4&type=section&id=3.%20Non-GAAP%20Adjustments%20and%20Adjusted%20Financials) This section details the impact of notable items on financial results and presents condensed adjusted income statements for a clearer view of core operational performance [Notable Items and Their Impact](index=4&type=section&id=3.1%20Notable%20Items%20and%20Their%20Impact) Notable items, which include infrequent transactions and certain recurring non-cash items, are excluded from adjusted measures to enhance understanding of operations. These adjustments significantly impacted noninterest income and expense, as well as the overall pre-tax income, particularly in the prior year due to a large acquisition gain Impact of Notable Items on Financials (Q2 2024) | Metric | Impact ($M) | | :------------------------------------------------- | :---------- | | Impact of notable items on adjusted noninterest income | (160) | | Impact of notable items on adjusted noninterest expense | (218) | | Impact of notable items on adjusted pre-tax income | 58 | | Impact of notable items on adjusted net income | 48 | | Impact of notable items on adjusted diluted EPS | 3.33 | - Notable items for 6M 2023 included a significant gain on acquisition of **$9,879M**, which was excluded from adjusted noninterest income[4](index=4&type=chunk) - Depreciation and maintenance expenses on operating lease equipment are reclassified from noninterest expense to a reduction of rental income on operating lease equipment for adjusted measures[4](index=4&type=chunk)[5](index=5&type=chunk) [Condensed Adjusted Income Statements](index=5&type=section&id=3.2%20Condensed%20Adjusted%20Income%20Statements) The condensed adjusted income statements provide a clearer view of core operational performance by excluding notable items. For Q2 2024, adjusted net income and diluted EPS were higher than their GAAP counterparts, reflecting the positive impact of these adjustments Adjusted Income Statement Highlights | Metric | Q2 2024 ($M) | Q1 2024 ($M) | Q2 2023 ($M) | 6M 2024 ($M) | 6M 2023 ($M) | | :--------------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Net interest income | 1,821 | 1,817 | 1,961 | 3,638 | 2,811 | | Provision for credit losses | 95 | 64 | 152 | 159 | 215 | | Noninterest income | 479 | 478 | 462 | 957 | 771 | | Noninterest expense | 1,168 | 1,154 | 1,202 | 2,322 | 1,879 | | Income before income taxes | 1,037 | 1,077 | 1,069 | 2,114 | 1,488 | | Net income | 755 | 784 | 780 | 1,539 | 1,086 | | Diluted earnings per common share | 50.87 | 52.92 | 52.60 | 103.79 | 72.69 | - Adjusted net income for Q2 2024 was **$755M**, compared to GAAP net income of **$707M**, indicating a positive adjustment of **$48M**. Adjusted diluted EPS for Q2 2024 was **$50.87**, higher than the GAAP diluted EPS of **$47.54**[6](index=6&type=chunk) [Detailed Portfolio and Credit Quality Analysis](index=6&type=section&id=4.%20Detailed%20Portfolio%20and%20Credit%20Quality%20Analysis) This section provides a detailed breakdown of the company's loan and deposit portfolios, along with an analysis of credit quality metrics and the allowance for loan and lease losses [Loans and Leases by Class](index=6&type=section&id=4.1%20Loans%20and%20Leases%20by%20Class) The loan and lease portfolio continued to grow, primarily driven by increases in commercial and consumer segments. The SVB segment, while still substantial, showed a slight decrease year-over-year Loans and Leases by Class (End of Period) | Loan Class | Q2 2024 ($M) | Q1 2024 ($M) | Q2 2023 ($M) | | :--------------------------------------- | :----------- | :----------- | :----------- | | Total commercial | 69,030 | 67,601 | 62,067 | | Total consumer | 28,343 | 27,923 | 26,818 | | Total SVB | 41,968 | 39,846 | 44,130 | | Total loans and leases | 139,341 | 135,370 | 133,015 | - Total loans and leases increased by **2.93% QoQ** and **4.76% YoY**. Commercial loans grew by **11.22% YoY**, with significant increases in commercial construction, owner-occupied, and non-owner-occupied commercial mortgages[7](index=7&type=chunk) - SVB loans decreased by **4.90% YoY**, mainly due to declines in investor-dependent early and growth stage loans[7](index=7&type=chunk) [Deposits by Type](index=6&type=section&id=4.2%20Deposits%20by%20Type) Total deposits showed consistent growth, with a notable shift from noninterest-bearing to interest-bearing accounts. Savings and money market deposits experienced significant year-over-year increases Deposits by Type (End of Period) | Deposit Type | Q2 2024 ($M) | Q1 2024 ($M) | Q2 2023 ($M) | | :--------------------------------------- | :----------- | :----------- | :----------- | | Noninterest-bearing demand | 40,016 | 39,276 | 44,547 | | Checking with interest | 23,907 | 24,244 | 24,809 | | Money market | 32,636 | 31,393 | 29,150 | | Savings | 39,361 | 37,688 | 26,587 | | Time | 15,159 | 17,008 | 16,071 | | Total deposits | 151,079 | 149,609 | 141,164 | - Total deposits increased by **0.98% QoQ** and **7.02% YoY**. Noninterest-bearing deposits decreased by **10.17% YoY**, while interest-bearing deposits (Money market, Savings) saw substantial growth (**11.96%** and **48.04% YoY** respectively)[7](index=7&type=chunk) [Credit Quality and Allowance for Loan and Lease Losses (ALLL)](index=7&type=section&id=4.3%20Credit%20Quality%20and%20Allowance%20for%20Loan%20and%20Lease%20Losses%20(ALLL)) Asset quality metrics indicate a slight increase in nonaccrual loans and net charge-offs quarter-over-quarter, while the ALLL to loans ratio saw a minor decrease. Overall, credit quality remains relatively stable but warrants monitoring Credit Quality Metrics | Metric | Q2 2024 | Q1 2024 | Q2 2023 | 6M 2024 | 6M 2023 | | :------------------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Nonaccrual loans at period end ($M) | 1,141 | 1,074 | 929 | - | - | | Ratio of nonaccrual loans to total loans at period end | 0.82 % | 0.79 % | 0.70 % | - | - | | Net charge-offs ($M) | (132) | (103) | (157) | (235) | (207) | | Net charge-off ratio | 0.38 % | 0.31 % | 0.47 % | 0.35 % | 0.39 % | | ALLL to loans ratio at period end | 1.22 % | 1.28 % | 1.23 % | - | - | | ALLL at end of period ($M) | 1,700 | 1,737 | 1,637 | 1,700 | 1,637 | - Nonaccrual loans increased by **6.24% QoQ** and **22.82% YoY**. Net charge-offs increased by **28.16% QoQ** but decreased by **15.92% YoY**[8](index=8&type=chunk) - The ALLL to loans ratio decreased by **0.06 percentage points QoQ** and **0.01 percentage points YoY**[8](index=8&type=chunk) [Average Balance Sheets, Yields and Rates](index=8&type=section&id=5.%20Average%20Balance%20Sheets,%20Yields%20and%20Rates) This section analyzes average interest-earning assets and their yields, average interest-bearing liabilities and their rates, and the resulting net interest income, spread, and margin [Average Interest-Earning Assets and Yields](index=8&type=section&id=5.1%20Average%20Interest-Earning%20Assets%20and%20Yields) Average interest-earning assets showed modest growth, with loans and investment securities contributing positively. The overall yield on interest-earning assets remained relatively stable quarter-over-quarter but increased year-over-year Average Interest-Earning Assets and Yields (Q2 2024) | Asset Type | Average Balance ($M) | Income ($M) | Yield/Rate | | :--------------------------------------- | :------------------- | :---------- | :--------- | | Loans and leases | 135,965 | 2,422 | 7.15 % | | Investment securities | 36,445 | 327 | 3.60 % | | Interest-earning deposits at banks | 28,059 | 378 | 5.42 % | | Total interest-earning assets | 200,705 | 3,130 | 6.26 % | - Average loans and leases increased by **2.76% QoQ** and **2.07% YoY**. Yield on loans and leases remained stable at **7.15% QoQ** and increased from **7.08% YoY**[9](index=9&type=chunk) - Yield on investment securities increased to **3.60%** from **3.42% QoQ** and **2.36% YoY**[9](index=9&type=chunk) [Average Interest-Bearing Liabilities and Rates](index=8&type=section&id=5.2%20Average%20Interest-Bearing%20Liabilities%20and%20Rates) Average interest-bearing liabilities increased, driven by growth in interest-bearing deposits. The cost of interest-bearing liabilities continued to rise, reflecting the higher interest rate environment Average Interest-Bearing Liabilities and Rates (Q2 2024) | Liability Type | Average Balance ($M) | Expense ($M) | Yield/Rate | | :--------------------------------------- | :------------------- | :----------- | :--------- | | Total interest-bearing deposits | 110,902 | 975 | 3.54 % | | Total borrowings | 37,480 | 334 | 3.56 % | | Total interest-bearing liabilities | 148,382 | 1,309 | 3.54 % | - Average interest-bearing deposits increased by **2.63% QoQ** and **22.99% YoY**. Rate on total interest-bearing deposits increased to **3.54%** from **3.45% QoQ** and **2.56% YoY**[9](index=9&type=chunk) - Rate on total borrowings decreased slightly to **3.56%** from **3.60% QoQ** but decreased from **3.87% YoY**[9](index=9&type=chunk) [Net Interest Income, Spread, and Margin](index=8&type=section&id=5.3%20Net%20Interest%20Income,%20Spread,%20and%20Margin) Net interest income remained stable quarter-over-quarter but decreased year-over-year. Both net interest spread and net interest margin showed a declining trend, primarily due to the rising cost of funds outpacing the increase in asset yields Net Interest Income, Spread, and Margin | Metric | Q2 2024 | Q1 2024 | Q2 2023 | 6M 2024 | 6M 2023 | | :-------------------- | :------ | :------ | :------ | :------ | :------ | | Net interest income ($M) | 1,821 | 1,817 | 1,961 | 3,638 | 2,811 | | Net interest spread | 2.72 % | 2.74 % | 3.21 % | 2.73 % | 3.13 % | | Net interest margin (NIM) | 3.64 % | 3.67 % | 4.11 % | 3.66 % | 3.87 % | - Net interest income increased by **0.22% QoQ** but decreased by **7.14% YoY**. Net interest spread decreased by **0.02 percentage points QoQ** and **0.49 percentage points YoY**[9](index=9&type=chunk)[10](index=10&type=chunk) - Net interest margin decreased by **0.03 percentage points QoQ** and **0.47 percentage points YoY**[9](index=9&type=chunk)[10](index=10&type=chunk) [Non-GAAP Reconciliations](index=10&type=section&id=6.%20Non-GAAP%20Reconciliations) This section provides detailed reconciliations of GAAP financial measures to their non-GAAP adjusted counterparts, offering transparency on the impact of specific adjustments [Net Income and EPS Reconciliation](index=10&type=section&id=6.1%20Net%20Income%20and%20EPS%20Reconciliation) This section reconciles GAAP net income and EPS to their adjusted non-GAAP counterparts by adding back the after-tax impact of notable items, providing a clearer view of core operational profitability Net Income and EPS Reconciliation (Q2 2024) | Metric | GAAP ($M) | Notable Items ($M) | Adjusted (non-GAAP) ($M) | | :--------------------------------------- | :---------- | :----------------- | :------------------------- | | Net income | 707 | 48 | 755 | | Net income available to common stockholders | 691 | 48 | 739 | | Diluted EPS | 47.54 | 3.33 | 50.87 | [Noninterest Income and Expense Reconciliation](index=10&type=section&id=6.2%20Noninterest%20Income%20and%20Expense%20Reconciliation) This reconciliation adjusts GAAP noninterest income and expense by removing the pre-tax impact of notable items, offering insights into the underlying trends of these components Noninterest Income and Expense Reconciliation (Q2 2024) | Metric | GAAP ($M) | Impact of Notable Items ($M) | Adjusted (non-GAAP) ($M) | | :--------------------------------------- | :---------- | :--------------------------- | :------------------------- | | Noninterest income | 639 | (160) | 479 | | Noninterest expense | 1,386 | (218) | 1,168 | [Provision for Credit Losses Reconciliation](index=10&type=section&id=6.3%20Provision%20for%20Credit%20Losses%20Reconciliation) This reconciliation adjusts the GAAP provision for credit losses by excluding specific items such as Day 2 provision for loan and lease losses and provision for credit losses on investment securities available for sale, to derive the adjusted provision Provision for Credit Losses Reconciliation (Q2 2024) | Metric | GAAP ($M) | Adjustments ($M) | Adjusted (non-GAAP) ($M) | | :--------------------------------------- | :---------- | :--------------- | :------------------------- | | Provision for credit losses | 95 | 0 | 95 | - For 6M 2023, adjustments included **$716M** for Day 2 provision for loan and lease losses and **$3M** for provision for credit losses on investment securities available for sale[11](index=11&type=chunk) [PPNR Reconciliation](index=10&type=section&id=6.4%20PPNR%20Reconciliation) This section reconciles GAAP net income to Pre-Tax, Pre-Provision Net Revenue (PPNR) and further to Adjusted PPNR by adding back provision for credit losses and income tax expense, and then adjusting for notable items PPNR Reconciliation (Q2 2024) | Metric | Amount ($M) | | :--------------------------------------- | :---------- | | Net income (GAAP) | 707 | | Plus: Provision for credit losses | 95 | | Plus: Income tax expense | 272 | | PPNR (non-GAAP) | 1,074 | | Impact of notable items | 58 | | Adjusted PPNR (non-GAAP) | 1,132 | [ROA Reconciliation](index=11&type=section&id=6.5%20ROA%20Reconciliation) This reconciliation provides both GAAP and adjusted Return on Average Assets (ROA) and Pre-Tax, Pre-Provision Net Revenue (PPNR) ROA, offering a comprehensive view of asset utilization efficiency before and after non-GAAP adjustments ROA Reconciliation (Q2 2024) | Metric | GAAP | Adjusted (non-GAAP) | | :--------------------------------------- | :----- | :------------------ | | ROA | 1.30 % | 1.39 % | | PPNR ROA | 1.97 % | 2.08 % | [ROE and ROTCE Reconciliation](index=11&type=section&id=6.6%20ROE%20and%20ROTCE%20Reconciliation) This section reconciles GAAP Return on Average Common Equity (ROE) to Adjusted ROE and Return on Average Tangible Common Equity (ROTCE) to Adjusted ROTCE, providing insights into profitability relative to equity, both common and tangible, after accounting for notable items ROE and ROTCE Reconciliation (Q2 2024) | Metric | GAAP | Adjusted (non-GAAP) | | :--------------------------------------- | :----- | :------------------ | | ROE | 13.13 % | 14.05 % | | ROTCE | 13.53 % | 14.48 % | [Tangible Common Equity to Tangible Assets Reconciliation](index=11&type=section&id=6.7%20Tangible%20Common%20Equity%20to%20Tangible%20Assets%20Reconciliation) This reconciliation adjusts total equity and total assets to derive tangible common equity and tangible assets, providing a non-GAAP measure of capital strength by excluding goodwill and other intangible assets Tangible Common Equity to Tangible Assets (Q2 2024) | Metric | GAAP ($M) | Adjustments ($M) | Tangible (non-GAAP) ($M) | | :--------------------------------------- | :---------- | :--------------- | :------------------------- | | Common equity | 21,606 | (626) | 20,980 | | Total assets | 219,827 | (626) | 219,201 | | Tangible common equity to tangible assets | 9.57 % | | | [Book Value and Tangible Book Value Per Common Share Reconciliation](index=12&type=section&id=6.8%20Book%20Value%20and%20Tangible%20Book%20Value%20Per%20Common%20Share%20Reconciliation) This reconciliation provides both GAAP book value per common share and non-GAAP tangible book value per common share, offering a view of the per-share value of the company's equity, with and without intangible assets Book Value and Tangible Book Value Per Common Share (Q2 2024) | Metric | Amount ($) | | :--------------------------------------- | :--------- | | Book value per share | 1,487.00 | | Tangible book value per share (non-GAAP) | 1,443.92 | [Efficiency Ratio Reconciliation](index=12&type=section&id=6.9%20Efficiency%20Ratio%20Reconciliation) This reconciliation adjusts the GAAP efficiency ratio to a non-GAAP adjusted efficiency ratio by excluding the impact of notable items on noninterest income and expense, providing a more normalized measure of operational efficiency Efficiency Ratio Reconciliation (Q2 2024) | Metric | GAAP | Adjusted (non-GAAP) | | :--------------------------------------- | :----- | :------------------ | | Efficiency ratio | 56.36 % | 50.77 % | [Adjusted Rental Income on Operating Lease Equipment Reconciliation](index=12&type=section&id=6.10%20Adjusted%20Rental%20Income%20on%20Operating%20Lease%20Equipment%20Reconciliation) This reconciliation adjusts GAAP rental income on operating lease equipment by deducting associated depreciation and maintenance expenses, providing a net, adjusted measure of profitability for operating leases Adjusted Rental Income on Operating Lease Equipment (Q2 2024) | Metric | Amount ($M) | | :--------------------------------------- | :---------- | | Rental income on operating lease equipment | 259 | | Less: depreciation on operating lease equipment | 98 | | Less: maintenance and other operating lease expenses | 60 | | Adjusted rental income on operating lease equipment (non-GAAP) | 101 | [Net Interest Margin (NIM) Reconciliation](index=12&type=section&id=6.11%20Net%20Interest%20Margin%20(NIM)%20Reconciliation) This reconciliation adjusts the GAAP Net Interest Margin (NIM) by excluding the impact from purchase accounting accretion, providing a non-GAAP NIM that reflects core lending profitability Net Interest Margin (NIM) Reconciliation (Q2 2024) | Metric | Amount | | :--------------------------------------- | :----- | | Net interest margin (NIM) | 3.64 % | | NIM impact from purchase accounting accretion | (0.28) | | NIM, excluding purchase accounting accretion (non-GAAP) | 3.36 % |

Chairman and CEO Frank B. Holding, Jr. said: "We are pleased with our second quarter financial results, which reflected broad-based loan and deposit growth, strong profitability metrics and continued stabilization of credit. These results reflected the solid performance from all of our business segments and we were encouraged by the continued progress in our SVB Commercial segment, which achieved both loan and deposit growth. In addition, we are pleased to announce that our Board of Directors approved a sha ...