NEW YORK COMMUNITY BANCORP, INC. REPORTS THIRD QUARTER 2024 GAAP NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS OF $0.79 PER DILUTED SHARE AND NON-GAAP NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS OF $0.69 PER DILUTED SHARE
STRONG MOMENTUM CONTINUES WITH OUR TURNAROUND STRATEGY AS DEPOSITS GREW ANOTHER $4 BILLION OR 5% AND MORE KEY HIRES JOIN
WHOLESALE BORROWINGS DECREASED OVER 30% AND A LOAN TO DEPOSIT RATIO OF 86%
MAINTAINED A SOLID ALLOWANCE FOR CREDIT LOSSES RATIO OF 1.87% COMPARED TO 1.78% LAST QUARTER
CONTINUE TO DE-RISK LOAN PORTFOLIO AS COMMERCIAL REAL ESTATE EXPOSURE DECLINED ANOTHER 3%
STRONG CAPITAL LEVELS AND LIQUIDITY POSITION
HICKSVILLE, N.Y., Oct. 25, 2024 /PRNewswire/ -- New York Community Bancorp, Inc. (NYSE:NYCB) ("the Company"), the holding company for Flagstar Bank, N.A. (the "Bank"), today reported its results for the third quarter of 2024. The Company reported a net loss of $280 million for third quarter 2024 and a net loss attributable to common stockholders of $289 million or $0.79 per diluted share. As adjusted for merger-related expenses, and certain items related to the sale of the mortgage warehouse business, the Company reported a net loss of $243 million for third quarter 2024 and a net loss attributable to common stockholders of $252 million or $0.69 per diluted share.
Third Quarter 2024 Summary
Asset Quality
Loans, Deposits, and Funding
Total ACL of $1.3 billion, or 1.87% of LHFI
Multi-family ACL coverage, excluding co-op loans, increased to 1.86%
Office ACL coverage of 6.04%
Non-office CRE ACL coverage of 1.92%
Meaningful CRE payoffs at par, including nearly 34% in substandard loans
68% of total non-accrual loans are current
Over 90% of multi-family loans that have repriced this year are current or have paid off at par
Multi-family loans declined $871 million or 2%
CRE loans declined $696 million or 5%
C&I loans decreased $1.3 billion or 8%
Total deposits of $83.0 billion, up $4 billion or 5.0%
Retail deposits increased $2.5 billion or 8% to $35 billion
Private Bank deposits rose $1.8 billion or 11% to $17.9 billion
Reduced wholesale borrowings by $8.6 billion or 31% to $19.3 billion or 18% of total assets
Loan/deposit ratio at 86% compared to 110% at Q1'24
Capital
Liquidity
CET1 ratio of 10.8%
Pro-forma CET1 ratio of 11.4%, including benefit from sale of mortgage operations
Book value per common share of $19.43
Tangible book value per share of $18.18
Total liquidity of over $41 billion, significantly higher than last quarter
A 299% coverage ratio on uninsured deposits
Nearly $19 billion of available borrowing capacity and high-quality liquid assets
CEO COMMENTARY
Commenting on the Company's third quarter performance, Chairman, President, and Chief Executive Officer, Joseph M. Otting stated, "During the third quarter, we made significant progress on each of our strategic priorities, as we continue to transition into a diversified regional bank. The first of which is our funding mix. We had a second consecutive quarter of strong deposit growth, especially in the Private Bank, where we are seeing many customers returning to Flagstar and we are winning new relationships. Also, we utilized a portion of our liquidity from deposit growth and previously announced business transaction, to pay down a significant amount of wholesale borrowings. Wholesale borrowings declined nearly $9 billion or 31% to $19 billion, while deposits increased $4 billion or 5% to $83 billion. This positive shift in our overall funding mix will help reduce our overall funding costs.
"On the asset quality front, we have completed 97% of our annual review of the multi-family and commercial real estate portfolios and have taken substantial charge-offs across the portfolio. Our CRE exposure continues to decline through a combination of par pay-offs and proactively managing problem loans. Total CRE loans declined 3% compared to the previous quarter and decreased 6% year-to-date. Additionally, while non-accrual loans increased during the third quarter, 68% are current, up from 61% last quarter. Furthermore, of the $2.1 billion of multi-family loans that have repriced this year, over 90% have paid off at par or remain current.
"We have also continued to invest in our business. We continue to invest in our risk management infrastructure and have enhanced our risk team with several new hires. In addition, we expanded our C&I leadership team with the hiring of several accomplished senior executives while building out our coverage and infrastructure by recruiting over 30 teammates in commercial banking, to bolster our commercial banking growth strategy.
"Following the end of the quarter, we took actions to reduce costs across our entire organization. These steps reflect our commitment to our financial objectives, and we anticipate further cost reductions as we continue to implement efficiency initiatives.
"Also, ten days ago we announced another milestone in our ongoing transformation, changing our holding company name to Flagstar Financial, Inc. and our stock symbol to FLG, effective at 5 p.m. today. We expect to begin trading under the new symbol on Monday. The new holding company name complements the re-branding of the Bank and our branches we undertook earlier in the year. The Company name change is a continuation of those efforts and unifies the organization and our vision under one brand.
"Moreover, at yesterday's Board of Directors meeting, director Peter Schoels tendered his resignation from both the Bank and the Company boards. Peter has been a director of the Company since the close of the merger almost two years ago. Before then he was a long-standing director at legacy Flagstar. For myself and my fellow board members, Peter's insights and business acumen have served the organization well and I would like to thank him for his many years of service. The Board intends to fill the vacancy left by his departure.
"I remain confident in our ability to successfully execute on our strategic plan and transform the Company into a regional bank with meaningful earnings power and a strong balance sheet.
"Finally, I would like to thank each of our teammates for their unwavering commitment and dedication to the Bank and its customers."
NET INCOME (LOSS) | NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
The Company reported a third quarter 2024 net loss of $280 million compared to a net loss of $323 million for second quarter 2024, and net income of $207 million for third quarter 2023. Net loss attributable to common stockholders for third quarter 2024 was $289 million, or $0.79 per diluted share, compared to a net loss of $333 million, or $1.14 per diluted share for second quarter 2024, and net income attributable to common stockholders of $199 million, or $0.81 per diluted share for third quarter 2023. As adjusted for merger-related expenses, and certain items related to the sale of the mortgage warehouse business in July 2024, the net loss for the quarter ended September 30, 2024 was $243 million and the net loss attributable to common stockholders was $252 million, or $0.69 per diluted share. This compares to a net loss, as adjusted for merger-related expenses, of $298 million and net loss attributable to common stockholders as adjusted for merger-related expenses, of $308 million, or $1.05 per diluted share for second quarter 2024 and net income, as adjusted for merger-related expenses, of $274 million and net income attributable to common stockholders of $266 million or $1.09 per diluted share as adjusted for merger-related expenses for third quarter 2023.
For the first nine months of 2024, the Company reported a net loss of $930 million compared to net income of $2.6 billion for the first nine months of 2023. Net loss attributable to common stockholders for the first nine months of 2024 was $957 million or $3.16 per diluted share compared to net income attributable to common stockholders of $2.6 billion for the first nine months of 2023 or $10.84 per diluted share.
Included in the net loss and diluted EPS for the first nine months of 2024 is a $121 million reduction in the bargain purchase gain arising from the Signature transaction, as well as certain items related to the sale of the Company's mortgage warehouse business in late July 2024. As adjusted for these items and for merger-related expenses, the net loss for the first nine months of 2024 was $715 million and the net loss attributable to common stockholders was $742 million or $2.45 per diluted share. Net income and diluted EPS for the first nine months of 2023 included a bargain purchase gain of $2.1 billion arising from the Signature transaction. As adjusted for this item and for merger-related expenses, net income for the first nine months of 2023 totaled $682 million and net income attributable to common stockholders totaled $657 million or $2.73 per diluted share.
EARNINGS SUMMARY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024
Net Interest Income, Net Interest Margin, and Average Balance Sheet
Net Interest Income and Net Interest Margin Summary
September 30, 2024
For the Three Months Ended
compared to (%):
(dollars in millions)
September 30, 2024
June 30, 2024
September 30, 2023
June 30, 2024
September 30, 2023
Net interest income
$ 510
$ 557
$ 882
-8 %
-42 %
For the Three Months Ended
compared to (bp):
Yield/Cost
September 30, 2024
June 30, 2024
September 30, 2023
June 30, 2024
September 30, 2023
Mortgage and other loans, net
5.53 %
5.62 %
5.82 %
-9
-29
Securities
4.85 %
4.68 %
4.30 %
17
55
Interest-earning cash and cash equivalents
5.40 %
5.44 %
5.31 %
-4
9
Total interest-earning assets
5.42 %
5.48 %
5.62 %
-6
-20
Total interest-bearing deposits
4.37 %
4.15 %
3.33 %
22
104
Borrowed funds
5.28 %
5.28 %
3.53 %
0
175
Total interest-bearing liabilities
4.62 %
4.52 %
3.37 %
10
125
Net interest margin
1.79 %
1.98 %
3.27 %
-19
-148
Net Interest Income and Net Interest Margin Summary
For the Nine Months Ended
(dollars in millions)
September 30, 2024
September 30, 2023
% Change
Net interest income
$ 1,691
$ 2,337
-28 %
For the Nine Months Ended
Yield/Cost
September 30, 2024
September 30, 2023
(bp) Change
Mortgage and other loans, net
5.62 %
5.43 %
19
Securities
4.59 %
4.11 %
48
Interest-earning cash and cash equivalents
5.44 %
5.11 %
33
Total interest-earning assets
5.47 %
5.27 %
20
Total interest-bearing deposits
4.13 %
2.94 %
119
Borrowed funds
5.31 %
3.52 %
179
Total interest-bearing liabilities
4.45 %
3.09 %
136
Net interest margin
2.01 %
3.05 %
-104
Net Interest Income
Net interest income for the third quarter 2024 totaled $510 million, down $47 million, or 8%, compared to second quarter 2024, and down $372 million or 42%, compared to the third quarter of 2023. The decline from second quarter 2024 is primarily due to lower average loan balances arising from the sale of the mortgage warehouse business, which closed during the third quarter of 2024, continued payoffs in both the multi-family and commercial real estate portfolios, and a decline in the commercial and industrial loan portfolio, driven by the Company's strategy to exit certain non-relationship based loans, and strong deposit growth which was driven by promotional rates. This was partially offset by a higher level of average cash balances, and lower average borrowed funds. The decline relative to the third quarter of 2023 was almost entirely the result of higher average interest-bearing liabilities combined with an increase in the cost of funds. The increase in average interest-bearing liabilities was driven by increases in both average interest-bearing deposits and average borrowed funds. This was partially offset by growth in average interest-earnings assets, as the decline in average loan balances was offset by higher average cash balances and higher average investment securities balances.
For the first nine months of 2024, net interest income decreased $646 million or 28% to $1.7 billion compared to $2.3 billion for the first nine months of 2023. The decline is attributable to an 18% increase in average interest-bearing liabilities to $87.2 billion, including a 41% increase in average borrowed funds and a 10% increase in average interest-bearing deposits to $60.9 billion.
Net Interest Margin
The net interest margin for the third quarter 2024 was 1.79%, down 19 basis points compared to second quarter 2024 and down 148 basis points compared to third quarter 2023. The 19 basis points reduction compared to second quarter 2024 was the result of a 22 basis point increase in the average cost of interest-bearing deposits to 4.37% along with a $4.0 billion or 7% increase in average interest-bearing deposits to $63.6 billion. The majority of the average deposit growth was centered on savings accounts and certificates of deposits, as we continued to attract new customers and balances in our promotional savings products. This was partially offset by a decline in average borrowed funds, which decreased $4.2 billion or 15% to $24.5 billion, while the average cost of borrowed funds remained unchanged at 5.28%.
The 148 basis point reduction in the net interest margin compared to the third quarter of 2023 was also due to the result of a higher level of average interest-bearing liabilities combined with an increase in the average cost of funds. Average interest-bearing liabilities increased $14.0 billion or 19% to $88.1 billion, while the average cost of funds increased 125 basis points to 4.62%, driven by a 175 basis point increase in the average cost of borrowed funds and a 104 basis point increase in the average cost of interest-bearing deposits. This was partially offset by a $5.9 billion or 5% increase in average interest-earnings assets to $113.0 billion, driven primarily by a $12.8 billion or 118% increase in average cash balances to $23.6 billion. This was partially offset by a $9.1 billion or 11% decline in average loan balances to $76.6 billion.
During the first nine months of 2024, the net interest margin was 2.01%, down 104 basis points compared to the first nine months of 2023. The year-over-year decline was mainly the result of a higher cost of funds due to the impact of a higher interest rate environment and deposit competition. This was coupled with an increase in average interest-bearing liabilities as both average deposits and average borrowed funds rose over the course of the first nine months of 2024. The average cost of funds rose 136 basis points to 4.45% driven by a 179 basis point increase in the average cost of borrowings and a 119 basis point increase in the average cost of deposits. This was partially offset by higher asset yields, as the average yield on average interest-earning assets increased 20 basis points to 5.47%.
Average Balance Sheet
September 30, 2024
For the Three Months Ended
compared to:
(dollars in millions)
September 30, 2024
June 30, 2024
September 30, 2023
June 30, 2024
September 30, 2023
Mortgage and other loans, net
$76,553
$83,235
$85,691
-8 %
-11 %
Securities
12,862
12,094
10,317
6 %
25 %
Reverse repurchase agreements
—
—
299
NM
-100 %
Interest-earning cash and cash equivalents
23,561
17,883
10,788
32 %
118 %
Total interest-earning assets
112,976
113,212
107,095
— %
5 %
Total interest-bearing deposits
63,647
59,607
58,494
7 %
9 %
Borrowed funds
24,456
28,612
15,596
-15 %
57 %
Total interest-bearing liabilities
88,103
88,219
74,090
— %
19 %
Non-interest-bearing deposits
$18,631
$18,632
$25,703
— %
-28 %
For the Nine Months Ended
(dollars in millions)
September 30, 2024
September 30, 2023
% Change
Mortgage and other loans, net
$81,286
$80,569
1 %
Securities
12,180
10,314
18 %
Reverse repurchase agreements
—
503
-100 %
Interest-earning cash and cash equivalents
18,615
11,127
67 %
Total interest-earning assets
112,081
102,513
9 %
Total interest-bearing deposits
60,941
55,252
10 %
Borrowed funds
26,259
18,683
41 %
Total interest-bearing liabilities
87,200
73,935
18 %
Non-interest-bearing deposits
$18,872
$21,214
-11 %
During third quarter 2024, average loan balances decreased $6.7 billion, or 8%, to $76.6 billion compared to the previous quarter primarily driven by lower multi-family, commercial real estate, and commercial and industrial loan balances. On a year-over-year basis, average loans declined $9.1 billion or 11%, also driven by lower multi-family, commercial real estate, and commercial and industrial loan balances. Average cash balances increased $5.7 billion or 32% to $23.6 billion compared to the previous quarter, reflecting strong deposit growth during the quarter and proceeds from the sale of the mortgage warehouse business of approximately $6 billion. Cash balances were utilized to proactively manage our liquidity during the third quarter and a portion was used to pay down borrowed funds. Average cash balances on a year-over-year basis increased $12.8 billion or 118% to $23.6 billion.
Average interest-bearing liabilities were relatively flat compared to the previous quarter, as an increase in average interest-bearing deposits was offset by a decrease in average borrowed funds. Average deposits rose $4.0 billion or 7% to $63.6 billion compared to the previous quarter while average borrowed funds declined $4.2 billion or 15% to $24.5 billion compared to the previous quarter. On a year-over-year basis, average interest-bearing liabilities rose $14.0 billion or 19% to $88.1 billion, as both average interest-bearing deposits and average borrowings increased. Average interest-bearing deposits increased $5.2 billion or 9% on a year-over-year basis, while average borrowed funds rose $8.9 billion or 57%.
For the first nine months of 2024, average loans increased modestly, rising $717 million or 1% to $81.3 billion, while average cash balances rose $7.5 billion or 67% to $18.6 billion, and average securities increased $1.9 billion or 18% to $12.2 billion.
For the first nine months of 2024, average interest-bearing liabilities increased $13.3 billion or 18% to $87.2 billion driven by growth in average deposits and average borrowings. Average interest-bearing deposits rose $5.7 billion or 10% due to our promotional deposit campaign during the current quarter and higher levels of brokered deposits, while average borrowed funds increased $7.6 billion to $26.3 billion.
Provision for Credit Losses
For third quarter 2024, the provision for credit losses totaled $242 million compared to a $390 million provision for credit losses for second quarter 2024 and a $62 million provision for credit losses for third quarter 2023.
Net charge-offs totaled $240 million for third quarter 2024, compared to $349 million for second quarter 2024 and $24 million for third quarter of 2023. Net charge-offs on a non-annualized basis represented 0.31% of average loans outstanding during third quarter 2024 compared to 0.42% and 0.03% of average loans outstanding, respectively, during second quarter 2024 and third quarter of 2023. Included in third quarter net charge-offs was approximately $45 million of charge-offs taken on non-accrual loans that were moved to held for sale.
For the first nine months of 2024, the provision for credit losses totaled $947 million compared to $281 million for the first nine months of 2023. Net charge-offs totaled $670 million for the first nine months of 2024, compared to $23 million for the first nine months of 2023.
Pre-Provision Net Revenue
The tables below detail the Company's PPNR and related measures, which are non-GAAP measures, for the periods noted:
September 30, 2024
For the Three Months Ended
compared to:
(dollars in millions)
September 30, 2024
June 30, 2024
September 30, 2023
June 30, 2024
September 30, 2023
Net interest income
$ 510
$ 557
$ 882
-8 %
-42 %
Non-interest income
113
114
160
-1 %
-29 %
Total revenues
$ 623
$ 671
$ 1,042
-7 %
-40 %
Total non-interest expense
716
705
712
2 %
1 %
Pre - provision net revenue (non-GAAP)
$ (93)
$ (34)
$ 330
174 %
-128 %
Merger-related and restructuring expenses
18
34
91
-47 %
-80 %
Certain items related to the sale of the mortgage warehouse business
32
—
—
NM
NM
Pre - provision net revenue excluding merger-related and restructuring expenses, as adjusted (non-GAAP)
$ (43)
$ —
$ 421
NM
NM
For the third quarter 2024, pre-provision net loss totaled $93 million compared to a pre-provision net loss of $34 million for the second quarter 2024 and pre-provision net revenue of $330 million for the three months ended September 30, 2023. Excluding the impact of merger-related and restructuring expenses and certain items related to the sale of the mortgage warehouse business, pre-provision net loss was $43 million for the three months ended September 30, 2024, compared to zero for the second quarter 2024 and pre-provision net revenue of $421 million for the three months ended September 30, 2023.
For the Nine Months Ended
(dollars in millions)
September 30, 2024
September 30, 2023
% Change
Net interest income
$ 1,691
$ 2,337
-28 %
Non-interest income
236
2,560
-91 %
Total revenues
$ 1,927
$ 4,897
-61 %
Total non-interest expense
2,120
1,849
15 %
Pre - provision net revenue (non-GAAP)
$ (193)
$ 3,048
-106 %
Bargain purchase gain
121
(2,142)
-106 %
Merger-related and restructuring expenses
95
267
-64 %
Certain items related to the sale of the mortgage warehouse business
32
—
Pre - provision net revenue excluding merger-related and restructuring expenses and bargain purchase gain, as adjusted (non-GAAP)
$ 55
$ 1,173
-95 %
For the first nine months of 2024, pre-provision net loss was $193 million compared to pre-provision net revenue of $3.0 billion for the first nine months of 2023. Excluding the impact of merger-related and restructuring expenses, bargain purchase gain, and certain items related to the sale of the mortgage warehouse business, pre-provision net revenue for the first nine months of 2024 totaled $55 million, compared to $1.2 billion for the first nine months of 2023.
Non-Interest Income
September 30, 2024
For the Three Months Ended
compared to:
(dollars in millions)
September 30, 2024
June 30, 2024
September 30, 2023
June 30, 2024
September 30, 2023
Fee income
$42
$41
$58
2 %
-28 %
Bank-owned life insurance
10
12
11
-17 %
-9 %
Net return on mortgage servicing rights
34
19
23
79 %
48 %
Net gain on loan sales and securitizations
5
18
28
-72 %
-82 %
Net loan administration (loss) income
(8)
(5)
19
60 %
-142 %
Other income
30
29
21
3 %
43 %
Total non-interest income
$113
$114
$160
-1 %
-29 %
For the Nine Months Ended
(dollars in millions)
September 30, 2024
September 30, 2023
% Change
Fee income
$117
$133
-12 %
Bank-owned life insurance
32
32
— %
Net losses on securities
—
(1)
NM
Net return on mortgage servicing rights
74
70
6 %
Net gain on loan sales and securitizations
43
73
-41 %
Net loan administration income
3
65
-95 %
Bargain purchase gain
(121)
2,142
NM
Other income
88
46
91 %
Total non-interest income
$236
$2,560
NM
Impact of Notable Item:
Bargain purchase gain
121
(2,142)
NM
Adjusted noninterest income (non-GAAP)
$357
$418
-15 %
In third quarter 2024, non-interest income totaled $113 million compared to $114 million in second quarter 2024 and $160 million in third quarter 2023. The linked-quarter decrease was driven by lower net gain on loan sales and securitizations and a slightly higher loss on net loan administration income, partially offset by a higher net return on mortgage servicing rights. Included in third quarter 2024 non-interest income is $23 million in fees and costs associated with the sale of the mortgage warehouse business, which closed in late July 2024. Excluding this item, non-interest income, as adjusted, was $135 million, up 18% compared to the previous quarter, but down 16% compared to the year-ago quarter.
For the first nine months of 2024, non-interest income totaled $236 million compared to $2.6 billion for the first nine months of 2023. The year-over-year decline was driven by a decrease in net loan administration income and lower net gain on loan sales and securitizations. This was partially offset by an increase in the net return on mortgage servicing rights and higher other income. Net loan administration income totaled $3 million for the first nine months of 2024, compared to $65 million for the first nine months of 2023. The decline was largely due to a decline in subservicing income related to the Signature transaction. Net gain on loan sales and securitizations was $43 million compared to $73 million for the first nine months of 2023, down 41% due to lower transaction volumes.
Non-Interest Expense
September 30, 2024
For the Three Months Ended
compared to:
(dollars in millions)
September 30, 2024
June 30, 2024
September 30, 2023
June 30, 2024
September 30, 2023
Operating expenses:
Compensation and benefits
$316
$312
$346
1 %
-9 %
FDIC insurance
98
91
19
8 %
416 %
Occupancy and equipment
59
52
55
13 %
7 %
General and administrative
188
183
165
3 %
14 %
Total operating expenses
661
638
585
4 %
13 %
Intangible asset amortization
37
33
36
12 %
3 %
Merger-related and restructuring expenses
18
34
91
-47 %
-80 %
Total non-interest expense
$716
$705
$712
2 %
1 %
For the Nine Months Ended
(dollars in millions)
September 30, 2024
September 30, 2023
% Change
Operating expenses:
Compensation and benefits
$961
$854
13 %
FDIC insurance
239
56
327 %
Occupancy and equipment
163
142
15 %
General and administrative
557
440
27 %
Total operating expenses
1,920
1,492
29 %
Intangible asset amortization
105
90
17 %
Merger-related and restructuring expenses
95
267
-64 %
Total non-interest expense
$2,120
$1,849
15 %
For the quarter ended September 30, 2024, total non-interest expense was $716 million, up $11 million or 2% compared to the previous quarter and up $4 million or 1% compared to the year-ago quarter. Excluding merger-related and restructuring expenses and intangible amortization expense, total operating expenses for the quarter ended September 30, 2024 were $661 million, up $23 million or 4% compared to the previous quarter and up $76 million or 13% compared to the year-ago quarter. The linked-quarter increase was driven primarily by a $7 million or 8% increase in FDIC insurance expense and a $5 million or 3% increase in general and administrative expense, largely professional fees.
For the first nine months of 2024, total non-interest expense was $2.1 billion, up $271 million or 15% compared to the first nine months of 2023. Excluding merger-related and restructuring expenses and intangible asset amortization, total operating expenses for the first nine months of 2024 were $1.9 billion, up $428 million or 29% compared to $1.5 billion for the first nine months of 2023. The increase was largely due to higher FDIC insurance expense, higher general and administrative expense due to higher professional fees, and higher compensation and benefits expense and occupancy expense, mostly due to the Signature transaction.
Income Taxes
For the third quarter 2024, the Company reported a benefit for income taxes of $55 million compared to a benefit for income taxes of $101 million for the second quarter 2024 and a provision for income taxes of $61 million for the three months ended September 30, 2023. The effective tax rate for the third quarter 2024 was 16.34% compared to 23.69% for the second quarter 2024, and 22.68% for the three months ended September 30, 2023.
For the first nine months of 2024, the Company reported an income tax benefit of $210 million compared to a provision for income taxes of $141 million for the first nine months of 2023. The effective tax rate for the first nine months of 2024 was 18.40% compared to 5.09% for the first nine months of 2023.
ASSET QUALITY
September 30, 2024
As of
compared to:
(dollars in millions)
September 30, 2024
June 30, 2024
September 30, 2023
June 30, 2024
September 30, 2023
Total non-accrual loans held for investment
$2,514
$1,942
$434
29 %
480 %
Total non-accrual loans held for investment and repossessed assets
$2,529
$1,959
$446
29 %
467 %
NPLs to total loans held for investment
3.54 %
2.60 %
0.52 %
93
302
NPAs to total assets
2.21 %
1.65 %
0.40 %
57
181
Allowance for credit losses on loans and leases
$1,264
$1,268
$619
— %
104 %
Total ACL, including on unfunded commitments
$1,328
$1,326
$667
— %
99 %
ACL % of total loans held for investment
1.78 %
1.70 %
0.74 %
8 bps
104 bps
Total ACL % of total loans held for investment
1.87 %
1.78 %
0.79 %
9 bps
107 bps
ACL on loans and leases % of NPLs
50 %
65 %
143 %
-15 %
-92 %
Total ACL % of NPLs
53 %
68 %
154 %
-15 %
-101 %
September 30, 2024
For the Three Months Ended
compared to:
September 30, 2024
June 30, 2024
September 30, 2023
June 30, 2024
September 30, 2023
Net charge-offs (recoveries)
$240
$349
$24
-31 %
NM
Net charge-offs (recoveries) to average loans (1)
0.31 %
0.42 %
0.03 %
-11 bps
29 bps
(1) Three months ended presented on a non-annualized basis.
For the Nine Months Ended
September 30, 2024
September 30, 2023
Change %
Net charge-offs (recoveries)
$670
$23
NM
Net charge-offs (recoveries) to average loans (1)
0.82 %
0.03 %
80 bps
(1) Three months ended presented on a non-annualized basis.
Non-Performing Assets
At September 30, 2024, total non-accrual loans were $2.5 billion, up $0.6 billion compared to June 30, 2024 and up $2.1 billion compared to September 30, 2023. Both the linked-quarter and year-over-year increases were primarily attributable to an increase in non-accrual commercial real estate and multi-family loans, along with an increase in non-accrual C&I loans. Non-accrual loans to total loans held-for-investment was 3.54% at September 30, 2024 compared to 2.60% at June 30, 2024 and 0.52% at September 30, 2023. Total non-performing assets were $2.5 billion at September 30, 2024 compared to $2.0 billion for the previous quarter end and $446 million in the year-ago quarter. Non-performing assets to total assets was 2.21% at September 30, 2024 compared to 1.65% at June 30, 2024 and 0.40% at September 30, 2023.
Also, during the quarter the Company transferred $189 million of non-accrual loans held for investment to held for sale. Included in this amount is $112 million of non-accrual commercial real estate loans.
Total Allowance for Credit Losses
The total allowance for credit losses was $1,328 million at ...
