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New words:
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Removed:
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Financial report summary
?Risks
- The COVID-19 pandemic has adversely impacted the Company's business and financial results, and the ultimate impact will depend on future developments, which are highly uncertain and cannot be predicted or modelled precisely, including the scope and duration of the pandemic and actions taken by governmental authorities in response to the pandemic.
- Any deterioration in national, regional and local economic conditions, particularly unemployment levels and home prices, could materially affect the Company's business, financial condition or results of operations.
- Weakness in the real estate market has adversely affected the Company in the past and may do so in the future.
- Changes in interest rates could affect the Company's income and cash flows.
- Expected Replacement of LIBOR may adversely affect the Company’s business.
- Downgrades to the U.S. government's credit rating, or the credit rating of its securities, by one or more of the credit ratings agencies could have a material adverse effect on general economic conditions, as well as the Company's operations, earnings and financial condition.
- Volatile or declining oil prices could adversely affect the Company's performance.
- The failure of the European Union to stabilize the fiscal condition of member countries, especially in Spain, could have an adverse impact on global financial markets, the current U.S. economic recovery and the Company.
- The Company is subject to credit risk.
- The Company may suffer increased losses in its loan portfolio despite enhancement of its underwriting policies and practices, and the Company's allowances for credit losses may not be adequate to cover such eventual losses.
- A reduction in the Company's own credit rating could have a material adverse effect on the Company's liquidity and increase the cost of its capital markets funding.
- Changes in accounting standards could impact reported earnings.
- The Company is subject to certain risks related to originating and selling mortgages. It may be required to repurchase mortgage loans or indemnify mortgage loan purchasers as a result of breaches of representations and warranties, borrower fraud or certain breaches of its servicing agreements, and this could harm the Company's liquidity, results of operations and financial condition.
- The Company is at risk of increased losses from fraud.
- The Company’s operational or security systems or infrastructure, or those of third parties, could fail or be breached, which could disrupt its business and adversely impact its results of operations, liquidity and financial condition, as well as cause legal or reputational harm.
- The Company faces security risks, including denial of service attacks, hacking, social engineering attacks targeting its colleagues and customers, malware intrusion or data corruption attempts, and identity theft that could result in the disclosure of confidential information, adversely affect its business or reputation, and create significant legal and financial exposure.
- The Company relies on other companies to provide key components of our business infrastructure.
- The Company depends on the accuracy and completeness of information about clients and counterparties.
- The Company's framework for managing risks may not be effective in mitigating risk and loss to the Company.
- The Company's financial reporting controls and procedures may not prevent or detect all errors or fraud.
- The value of the Company’s goodwill may decline in the future.
- The Company depends on the expertise of key personnel, and its operations may suffer if it fails to attract and retain skilled personnel.
- Unpredictable catastrophic events could have a material adverse effect on the Company.
- Cybersecurity and data privacy are areas of heightened legislative and regulatory focus.
- The Company is subject to legislation and regulation, and future legislation or regulation or changes to existing legislation or regulation could affect its business.
- Compliance with anti-money laundering and anti-terrorism financing rules involves significant cost and effort.
- The costs and effects of litigation, regulatory investigations, examinations or similar matters, or adverse facts and developments relating thereto, could materially affect the Company's business, operating results and financial condition.
- The Company is exposed to risks in relation to compliance with anti-corruption laws and regulations and economic sanctions programs.
- The Company is subject to capital adequacy and liquidity standards, and if it fails to meet these standards its financial condition and operations would be adversely affected.
- The financial services market is undergoing rapid technological changes, and the Company may be unable to effectively compete or may experience heightened cyber-security and/or fraud risks as a result of these changes.
- The Company is subject to intense competition in the financial services industry, particularly in its market area, which could result in losing business or margin declines.
- Customers could pursue alternatives to bank deposits, causing the Company to lose a relatively inexpensive source of funding.
- Negative public opinion could damage the Company's reputation and adversely impact business and revenues.
- The Company's rebranding strategy may not produce the benefits expected, may involve substantial costs and may not be favorably received by Customers.
- The Company is a subsidiary of BBVA Group, and activities across BBVA Group could adversely affect the Company’s business and results of operations.
- The Parent is a holding company and depends on its subsidiaries for liquidity in the form of dividends, distributions and other payments.
- The Company's ability to complete the Merger with PNC is subject to the receipt of consents and approvals from regulatory agencies which may impose conditions that could adversely affect the Company or cause the Merger to be abandoned.
- The Company will be subject to business uncertainties and contractual restrictions while the Merger is pending.
- Failure to complete the Merger could negatively impact the Company.
Management Discussion
- Net interest income totaled $2.5 billion in 2020 and $2.6 billion in 2019. Net interest income on a fully taxable equivalent basis totaled $2.6 billion in 2020 and $2.7 billion in 2019.
- Net interest margin was 2.73% in 2020 compared to 3.17% in 2019. The 44 basis point decrease in net interest margin was primarily driven by the timing of the Federal Reserve Board's decrease of benchmark rates in October of 2019 and in March of 2020.
- The fully taxable equivalent yield for 2020 for the loan portfolio was 4.02% compared to 4.89% for the prior year. The 87 basis point decrease was primarily driven by the impact of higher interest rates during the first half of 2019 as the Federal Reserve Board did not lower benchmark rates until the second half of 2019 and in March 2020.