Revenue and Profitability
- GAAP total revenue: $2.287 billion for Q1 2024; YoY growth ~5.15%, QoQ decline ~0.35% (per earnings metrics). On an adjusted basis, total revenue was about $1.8 billion, with net interest income and fee revenue contributing to resiliency in the face of macro uncertainty.
- Gross profit: $1.595 billion; YoY decline ~12.17%, QoQ decline ~3.57%.
- Operating income: $464 million; YoY change ~-41.19%, QoQ ~-1.49%.
- Net income and EPS: Net income $368 million; YoY ~-39.87%, QoQ ~-5.88%; EPS $0.37, down ~-41.27% YoY and -5.13% QoQ.
- Net interest income (NII) and deposits: NII declined ~4% sequentially; NIM compressed by ~5 bps as deposit remixing and funding costs rose; total NII guidance for 2024 is $4.7–$4.8 billion.
Asset Quality and Credit Metrics
- Provision expense: $152 million, ~+$31 million above net charge-offs, lifting allowance for credit losses to ~1.79% and NCOs to be in the 40–50 bps range for 2024.
- Adjusted net charge-offs: up 11 bps driven by a large legacy restaurant credit and one commercial manufacturing credit; nonperforming loans (NPLs) and criticized loans have risen but continue to normalize toward historical averages (NPLs at 94 bps of total loans).
- Delinquencies improved 11% QoQ, reflecting ongoing normalization after stress pockets in specific sectors (office, senior housing, transportation, health care, technology).
Capital and Liquidity
- CET1: ~10.3% at quarter end; liquidity remains robust with cash and equivalents of $11.25 billion.
- Share repurchases: $102 million; common dividends: $220 million in the quarter; balance sheet flexibility maintained to support growth and dividend growth aligning with earnings.
Operating and Efficiency
- Operating expenses (adjusted) increased ~6% QoQ, driven by seasonal HR-related costs and incentive programs; full-year 2024 adjusted noninterest expenses expected around $4.1 billion with Q1 as the high watermark.
- Management reiterated focus on the largest expense categories (salaries/benefits, occupancy, and vendor spend) and anticipated normalization of certain one-off items in subsequent quarters.
Liquidity and Deposits
- Deposits increased on average and ending basis; mix shifting from noninterest-bearing to interest-bearing deposits with remixing decelerating; expectation of low 30% noninterest-bearing deposits by mid-2024, with potential declines of $1–$2 billion in low-interest savings and checking balances as tax season effects unwind.