CVA/DVA was $7 million ($4 million after-tax) in the first quarter, compared to negative $319 million (negative $198 million after-tax) in the prior year period. First quarter 2014 results included a $210 million tax charge (recorded in Corporate/Other) related to corporate tax reforms enacted in two states. These reforms lowered marginal tax rates, resulting in a reduction in Citigroup’s state deferred tax assets. Excluding CVA/DVA, first quarter revenues of $20.1 billion were down 2% from the prior year period. Excluding CVA/DVA and the tax item, first quarter 2014 earnings were $1.30 per diluted share, representing a 1% increase from prior year earnings of $1.29 per diluted share.
Michael Corbat, Chief Executive Officer of Citi, said, “Despite a quarter that was difficult for our company, we delivered strong results. Both our consumer and institutional businesses performed well and we grew both loans and deposits while holding the line on our expenses. We reduced our deferred tax assets more than any other quarter since the crisis and drove Citi Holdings closer to break even.
“$4 billion in net income helped generate $6 billion in regulatory capital during the quarter and increased our estimated Tier 1 Common ratio to 10.4% on a Basel III basis. Very cognizant of our shareholders desire to see a sustainable return of capital, we are engaged with the Fed to better understand their expectations regarding the CCAR process. We are committed to bringing our capital planning process to the highest possible standards, befitting an institution of our global reach. I will dedicate whatever resources and make whatever changes necessary to achieve this critical goal,” Mr. Corbat concluded.
