Risk Factors Update Summary

• Increase in net interest income from $45.4 billion in 2022 to $52.8 billion in 2023.
• Changed method to estimate interest cost component of pension expense to full yield curve approach.
• Deposits decreased from $1,482,479 million in 2022 to $1,383,985 million in 2023.
• Net gains on sale increased significantly from $52 million to $145 million in 2023.
• The Company redeemed $272 million shares of common stock at a cost of $12.0 billion.
• The company adopted ASU 2022-02, eliminating TDR accounting guidance, impacting TDR disclosures for 2022 and 2021.
• Proposed SLR rules would modify TLAC requirements, reducing eligible long-term debt from $489 million to $308 million.
• Net interest income for the year ended December 31, 2023 increased to $52,375 million from $35,810 million in 2022.
• Regulators may limit subsidiary capital distributions, potentially increasing capital or liquidity requirements.
• Commercial and industrial accrued interest receivable increased from $662 million to $746 million.
• Long-term debt increased significantly from $77,868 million to $33,925 million.
• Total nonaccrual loans decreased by $2.63 billion from $8.26 billion to $5.63 billion.
• The interest rate sensitivity of deposits is now informed by historical behavior and near-term pricing strategies.
• Customer deposit activity may require additional market funding, impacting net interest income benefit from higher rates.
• Loan modifications for consumer and commercial loans detailed, including interest rate reductions, payment delays, and term extensions.
• Increase in agreements for federal funds sold and securities purchased under resale from 120 to 2,515.
• Consumer loan modifications involve interest rate reductions, payment delays, term extensions, and principal forbearance or forgiveness.
• Preferred Stock, Series Q, was redeemed for $1.725 billion in September 2023.
• TLAC and eligible unsecured long-term debt increased from $521 million to $760 million.
• Provision for credit losses increased from $957 to $1,282, a significant change.
• Consumer portfolio accrued interest receivable increased from $313 million to $270 million.
• Total noninterest income for the year ended December 31, 2023 increased to $30,222 million from $13,449 million in 2022.
• Total loans (average) increased by $3,487 million due to higher loan balances in Credit Card and Personal Lending.
• Commercial nonaccrual loans decreased by $553 million from $3.1 billion to $2.6 billion.
• Trading General VaR decreased from $49 million to $35 million for the year ended December 31, 2023.
• Net income increased from $13.2 billion in 2022 to $19.1 billion in 2023.
• Deferred tax assets related to net operating loss and tax credit carryforwards increased by $369 million from $5.4 billion to $5.7 billion.
• Net loan charge-offs for credit cards decreased by $118 million from $520 million to $402 million.
• Total equity securities not held for trading at fair value increased from $57.3 billion to $64.4 billion.
• Net income increased from $13,182 million to $21,548 million, a significant rise of $8,366 million.
• Added assessment test for fair value hedges to support hedged item outstanding expectation.
• Includes derivative gains and losses used to economically hedge deferred compensation plan and retained litigation risk. This change might result in significant impact on financial statements.
• Resolution planning efforts include a Support Agreement dated June 28, 2017, restricting IHC from making dividends.
• Average deposit cost increased from 0.02% in Q4 2021 to 0.58% in Q4 2022.
• Nonaccrual loans decreased from $8,256 million in 2022 to $5,626 million in 2023.
• Proceeds from transfer increased from $13,823 million to $13,823 million in 2023.
• Commercial and industrial loans in the U.S. increased from $8,998 to $9,648.
• Total equity securities held for trading increased from $26.9 billion to $27.5 billion.
• Held-to-maturity debt securities increased from $852 to $1,891, impacting total debt securities.
• Total revenue for the year ended December 31, 2023 increased to $82,597 million from $49,169 million in 2022.
• Total loans (period-end) decreased by $7,662 million driven by lower Home Lending and Auto loan balances.
• Noninterest income in Commercial Banking decreased by $216 million, mainly from lower deposit-related fees.
• Noninterest expense in Wealth and Investment Management increased by $451 million due to higher personnel expenses.
• Trading debt securities increased from $80 to $391, impacting the total debt securities.
• Regulatory changes may impose additional fees, fines, penalties, or taxes, intensifying regulatory supervision.
• Repurchase program authorized for up to $30 billion, with remaining authority of approximately $26.7 billion.
• Upon discontinuance of fair value hedges, no longer adjust previously hedged items in noninterest income.
• Noninterest expense for personnel increased from $8,181 to $9,197.
• Total derivatives not designated as hedging instruments decreased from $20,046 million to $9,012 million.
• Net loan charge-offs for commercial real estate decreased by $377 million from $1.0 billion to $623 million.
• Estimated net interest income sensitivity over the next 12 months changed from $2.3 billion to $2.0 billion.
• Net interest income sensitivity over the next 12 months decreased from $7.1 billion to $2.3 billion.
• Consumer nonaccrual loans decreased by $461 million from $1.0 billion to $539 million.
• Total nonaccrual loans increased from $2,313 million to $2,629 million.
• Diluted earnings per common share rose from $3.95 in 2022 to $4.83 in 2023.
• Residential mortgage loan modifications offer a short-term payment deferral up to 12 months.
• Unrecognized tax benefits decreased by $323 million from $4.114 billion to $5.437 billion.
• Commercial loans decreased from $557,427 million in 2022 to $557,516 million in 2023.
• Total loans decreased from $936,682 million in 2022 to $955,871 million in 2023.
• Loans recognized increased from $173 million to $173 million in 2023.
• Credit derivatives used to mitigate credit risk associated with lending exposure were recorded in other noninterest income. This change might result in increased transparency in financial reporting.
• Noninterest income rose from $28,835 million to $42,713 million, an increase of $13,878 million.
• Residential mortgage - junior lien loans increased from 146 to 253.
• Loan modifications for commercial loans include interest rate reductions, payment delays, and term extensions.
• Credit card loan modifications include short-term and long-term interest rate reduction programs.
• ACL for loans decreased from $15,088 million in 2022 to $13,609 million in 2023.
• Total revenue increased from $74.4 billion in 2022 to $82.6 billion in 2023.
• The projected debt and equity securities portfolios' size results changed from $7.1 billion to $2.3 billion.
• Total foreclosed assets decreased by $50 million from $187 million to $137 million.
• Modifications for consumer loans include interest rate reductions, payment delays, and term extensions.
• Consumer loans decreased from $398,100 million in 2022 to $398,355 million in 2023.
• Available-for-sale debt securities increased from $2,168 to $2,198.
• Net loan charge-offs for auto loans decreased by $7 million from $137 million to $130 million.
• Net operating loss and tax credit carryforwards increased by $82 million from $5.513 billion to $5.595 billion.
• Net gains on interest rate contracts decreased from $1,528 million to $211 million.
• Technology, telecommunications, and equipment expenses increased from $902 to $1,076.
• Increase in net derivative assets and liabilities for interest rate contracts from $52 billion to $262 billion. This change might indicate a shift in risk management strategies.
• Net interest income in Commercial Banking increased by $2,745 million due to higher interest rates.
• Prepayment rate increased from 12.4% to 16.8% in 2023.
• Failure to satisfy regulatory actions timely could result in fines, penalties, business restrictions, or adverse consequences.
• Change in accounting method for tax credit investments resulted in a $325 million impact.
• Reclassified HTM debt securities to AFS debt securities in Q1 2023 due to ASU 2022-01.
• Total net gains from equity securities not held for trading increased from $441 million to $665 million.
• Total assets in Corporate decreased by $3,674 million, mainly due to lower cash and cash equivalents.
• Total revenue in Corporate and Investment Banking increased by $3,949 million, driven by higher net gains from trading activities.
• Derivative liabilities decreased from $20,085 million to $16,509 million, a decrease of $3,576 million.
• Loans held for sale decreased from 396 to 246, affecting total consumer loans.
• Net gains on foreign exchange contracts decreased from $10 million to $8 million.
• Retained earnings increased from $187,649 million to $187,968 million, a slight rise of $319 million.
• Adoption of proportional amortization method for tax credit investments may impact future earnings volatility.
• Provision for credit losses increased from $1.4 billion in 2022 to $1.5 billion in 2023.
• Operating losses increased from $3 to $355, a notable rise.
• Increase in total derivative assets from $52.9 billion to $73.4 billion. This change might indicate a higher exposure to derivative instruments.
• Cost to service per loan increased from $96 to $178 in 2023.
• Changes in interest rates may impact net servicing income and fair value of MSRs.
• Changes in interest rates could result in significant losses on debt securities in the portfolio.
• Total loans increased from $929.8 billion in 2022 to $943.9 billion in 2023.
• Increase in total derivative liabilities from $80.6 billion to $81.9 billion. This change might indicate a higher level of liabilities related to derivative contracts.
• Common stock issued decreased from $37.2 million to $1 million, a significant decrease of $36.2 million.
• Maximum exposure to loss for tax credit VIEs increased from $28.0 billion to $30.6 billion in 2023.
• Failure to meet servicing obligations could lead to legal actions, compliance costs, or other adverse consequences.
• Total gains on cash flow hedges decreased from $523 million to $131 million.
• Professional and outside services expenses increased from $1,242 to $1,310.
• Market disruption and volatility may impact credit spreads and access to capital markets.
• Advertising and promotion expenses increased from $178 to $259.
• Cash, cash equivalents, and restricted cash increased from $236,052 million to $264,612 million, a rise of $28,560 million.
• Increase in total Level 3 assets, net of liabilities, from $6.6 billion to $9.2 billion. This change might indicate a shift in the valuation of assets and liabilities.
• Adoption of ASU 2018-12 in Q1 2023 affects accounting for long-duration contracts.
• Total equity decreased from $191.2 billion in 2022 to $183.2 billion in 2023.
• Total guarantees increased from $55,911 million to $55,911 million in 2023.
• Net income applicable to common stock increased from $3,160 to $5,450.
• Increase in loans held for sale from $2.9 billion to $4.2 billion. This change might indicate a change in the loan portfolio composition.
• Short-term borrowings increased from $16 million to $38 million, a rise of $22 million.