Q4 2024 Truist Financial Corp Earnings Call

January 17, 2025

Only mode.

A brief question and answer session will follow the formal presentation.

As a reminder, this event is being recorded.

Speaker Change: It is now my pleasure to introduce your host Mr. Brad Milsap.

Brad Milsap: Thank you Betsy and good morning, everyone welcome to <unk> fourth quarter 2024 earnings call with US today are our chairman and CEO Bill Rogers, our CFO, Mike Mcguire, and Chief risk Officer, Brad vendor as well as other members of <unk> Senior management team.

Brad Milsap: During this morning's call they will discuss <unk> fourth quarter results share their perspectives on current business conditions and provide an updated outlook for 2025.

Greetings, ladies and gentlemen, and welcome to the true Financial Corporation fourth quarter 2024 earnings Conference call.

Currently all participants are in a listen only mode.

Brad Milsap: The company presentation as well as our earnings release and supplemental financial information are available on the <unk> Investor Relations website, IR Dot truest Dot com. Our presentation. Today will include forward looking statements and certain non-GAAP financial measures. Please review the disclosures on slides two and three of the presentation regarding these statements in measures as well as the appendix where appropriate.

A brief question and answer session will follow the formal presentation.

As a reminder, this event is being recorded.

It is now my pleasure to introduce your host Mr. Brad Nelson.

Speaker Change: Thank you Betsy and good morning, everyone welcome to <unk> fourth quarter 2024 earnings call with US today are our chairman and CEO Bill Rogers, Our CFO, Mike Mcguire, Chief risk officer, Brad vendor as well as other members of <unk> Senior management team.

Brad Milsap: Reconciliations to GAAP with that I will turn it over to bill. Thanks.

Bill Rogers: Thanks, Brian and good morning, everyone and thank you for joining our call today.

Bill Rogers: Before we get started I want to take a moment to introduce Brad vendor bread recently became our chief risk officer.

During this morning's call they will discuss <unk> fourth quarter results share their perspectives on current business conditions and provide an updated outlook for 2025.

Bill Rogers: <unk> extensive experience across a number of tourist areas, including risk operations technology.

<unk>, Chairman and CEO Bill Rogers, our CFO, Mike Mcguire, and Chief risk Officer, Brad vendor as well as other members of <unk> Senior management team.

Speaker Change: The company presentation as well as our earnings release and supplemental financial information are available on the truest Investor Relations website, IR Dot truest dot com.

Bill Rogers: Consumer lending into this role breath off too.

During this morning's call they will discuss <unk> fourth quarter results share their perspectives on current business conditions and provide an updated outlook for 2025.

Speaker Change: Great start he'll continue to carry forward through a strong credit culture and risk discipline.

Our presentation today will include forward looking statements.

Speaker Change: Certain non-GAAP financial measures. Please review the disclosures on slides two and three of the presentation regarding these statements in the measures as well as the appendix where appropriate reconciliations to GAAP with that I'll turn it over to bill. Thanks.

Speaker Change: Clarke Starnes I'm really happy is working closely with Brad on the transition I am incredibly grateful for Clark's impactful 40, plus year career at true us.

The company presentation as well as our earnings release and supplemental financial information are available in the truest Investor Relations website, IR Dot truest Dot com. Our presentation. Today will include forward looking statements and certain non-GAAP financial measures. Please review the disclosures on slides two and three of the presentation regarding these statements in measures as well as the appendix rope.

Speaker Change: Most recently, serving as our chief risk officer.

Bill: Thanks, Brian and good morning, everyone and thank you for joining our call today.

Speaker Change: So I want to thank both Cummins for his significant contributions to our company. Following his announced departure. This week since 2005 BOE as purposefully served as an instrumental leader accrues, most recently as Vice chair and Chief operating Officer.

Speaker Change: Before we get started I wanted to take a moment to introduce Brad vendor, Brad recently became our chief risk officer.

Reconciliations to GAAP with that I will turn it over to bill. Thanks.

Speaker Change: <unk> has extensive experience across a number of tourist areas, including rail operations technology.

Thanks, Brian and good morning, everyone and thank you for joining our call today.

Before we get started I want to take a moment to introduce Brad vendor.

Speaker Change: Consumer lending into this role a breath off to a great start he'll continue to carry forward through a strong credit culture and risk discipline.

Speaker Change: And Clark played crucial informative roles in the merger vehicles to create true and setting the course for our future.

Brad recently became our chief risk officer.

Brings extensive experience across a number of tourist areas, including risk operations technology.

Speaker Change: Just can't tell you how much I appreciate their leadership during this time of truest they were fantastic partners.

Speaker Change: Clarke Starnes I'm really happy is working closely with Brad on the transition.

Consumer lending into this role breath off too.

Speaker Change: Credibly grateful for Clark impactful 40, plus year career at true Us most.

Speaker Change: I wish them all the best in their new chapters in their lives.

Great start he'll continue to carry forward through a strong credit culture and risk discipline.

Speaker Change: Right, so let's before turning to the fourth quarter results, let's begin as we always do it trails with purpose.

Speaker Change: Most recently, serving as our chief risk officer.

<unk> I'm really happy is working closely with Brad on the transition I am incredibly grateful for Clark's impactful 40, plus year career at true us.

Speaker Change: I want to thank both Cummins for his significant contributions to our company. Following his announced departure of this week.

Speaker Change: We are a purpose driven company dedicated to inspiring and building better lives and communities, which is the foundation and guide.

Boe: 2005 BOE has purposefully served as an instrumental leader at true US most recently as Vice chair and Chief operating Officer.

Speaker Change: Or how we conduct our business. So one example in the fourth quarter was our response to Hurricane Hawaii.

Most recently, serving as our chief risk officer.

I want to thank both Cummins for his significant contributions to our company. Following his announced departure of this week since 2005 BOE has purposefully served as an instrumental leader to US most recently as Vice chair and Chief operating Officer.

Speaker Change: The impact of the Hurricane our Western North Carolina was was truly unprecedented <unk>.

Boe: And Clark played crucial informative roles in the merger of equals to create true and setting the course for our future.

Speaker Change: <unk> has deep roots in the region and our team was quick to respond but they were also compelled to play a pivotal role in the areas of long term recovery.

Boe: Just can't tell you how much I appreciate their leadership during this time of true they were fantastic partners.

And Clark played crucial and formative roles in the merger of equals to create true and setting the course for our future.

Speaker Change: And with our purpose to inspire and build better lives and communities, we announced a three year $725 million commitment to address critical needs, including a focus on small business housing and infrastructure projects by listening to the needs of the community and leveraging our expertise our capital partnerships we believe.

Boe: We wish them all the best in their new chapters in their lives.

Boe: Alright, so let's before turning to the fourth quarter results with.

Just can't tell you how much I appreciate their leadership during this time of truest they were fantastic partners.

Boe: Again, as we always do it trails with purpose.

Boe: We are a purpose driven company dedicated to inspiring and building better lives and communities, which is the foundation and guide for how we conduct our business. So one example in the fourth quarter was our response to hurricane in Hawaii.

I wish them all the best in their new chapters in their lives.

Alright, so let's before turning to the fourth quarter results, let's begin as we always do it trails with purpose.

Speaker Change: We can be a catalyst for recovery and growth.

Speaker Change: So now turning to our results on slide five.

We are a purpose driven company dedicated to inspiring and building better lives and communities, which is the foundation and guide.

Fact of the Hurricane our Western North Carolina was was truly unprecedented.

Speaker Change: For the fourth quarter, we reported net income available to common shareholders of $1 2 billion or <unk> 91, a share.

Boe: <unk> has deep roots in the region and our team was quick to respond. They were also compelled to play a pivotal role in the areas of long term recovery.

Or how we conduct our business. So one example in the fourth quarter was our response to Hurricane Helane.

Speaker Change: For the year, we reported GAAP net income of $4 5 billion or $3 36, a share and adjusted net income of $5 billion or $3 69 per share might provide some more details on quarterly and annual results later in the call.

The impact of the Hurricane our Western North Carolina was truly unprecedented.

Boe: With our purpose to inspire and build better lives and communities.

<unk> has deep roots in the region and our team was quick to respond but they were also compelled to play a pivotal role in the areas of long term recovery.

Boe: It's a three year $725 million come back to address critical needs, including a focus on small business housing and infrastructure projects by listening to the needs of the community leveraging our expertise our capital partnerships. We believe we can be a catalyst for recovery and growth.

And with our purpose to inspire and build better lives and communities, we announced a three year $725 million commitment to address critical needs, including a focus on small business housing and infrastructure projects by listening to the needs of the community and leveraging our expertise our capital partnerships we believe.

Speaker Change: Okay.

Speaker Change: 2024 was an important year for tourists and I'm proud of the results our teammates delivered which included executing on several important strategic initiatives delivering solid underlying earnings maintaining sound asset quality metrics and positioning us with strong momentum as we enter.

Boe: Now turning to our results on slide five.

Boe: For the fourth quarter, we reported net income available to common shareholders of $1 2 billion or 91 cents a share.

We can be a catalyst for recovery and growth.

For the year, we reported GAAP net income of four and a half billion or $3.36 a share and adjusted net income of 5 billion or $3 69 per share mine share or provide some more details on quarterly and annual results later in the call.

2025.

Now turning to our results on slide five.

Speaker Change: Our solid performance was defined by several key themes first 2024 ended on a strong note with annual adjusted revenue, finishing at the high end of our expectations and annual expenses declining 40 basis points. Our adjusted efficiency ratio of 56, 3% remained relatively stable on an annual basis.

For the fourth quarter, we reported net income available to common shareholders of $1 2 billion or <unk> 91, a share.

For the year, we reported GAAP net income of $4 5 billion or $3 36, a share and adjusted net income of $5 billion or $3 69 per share Mike's going to provide some more details on quarterly and annual results later in the call.

Boe: Yeah.

Boe: 2024 was an important year for tourists and I'm proud of the results our teammates delivered which included executing on several important strategic initiatives delivering solid underlying earnings maintaining sound asset quality metrics and positioning us with strong momentum as we enter.

Reflecting an ongoing expense discipline and focus on managing cost. In addition on a linked quarter basis average deposit balances increased 1% and a half in average loan balances were stable end of period loans experienced a little over 1% growth as we saw an increase in loan demand due to the results of our folks.

Okay.

2024 was an important year for tourists and I'm proud of the results our teammates delivered which included executing on several important strategic initiatives delivering solid underlying earnings maintaining sound asset quality metrics and positioning us with strong momentum as we enter.

Boe: 2025.

Boe: Our solid performance was defined by several key themes for 2024 ended on a strong note with annual adjusted revenue, finishing at the high end of our expectations and annual expenses declining 40 basis points are.

Speaker Change: Cost initiatives in the latter half of the quarter.

Speaker Change: These factors along with our continued discipline around rate paid on deposits resulted in net interest income exceeding our expectations for the quarter investment banking and trading revenue increased 46% for the year versus the 2023 as we continue to add talent and expertise to an already strong platform that can.

2025.

Our solid performance was defined by several key themes for 2024 ended on a strong note with annual adjusted revenue, finishing at the high end of our expectations and annual expenses declining 40 basis points. Our adjusted efficiency ratio of 56, 3% remained relatively stable on an annual basis.

Boe: Our adjusted efficiency ratio of 56, 3% remained relatively stable on an annual basis, reflecting our ongoing expense discipline and focus on managing cost.

Speaker Change: <unk> gained market share.

Boe: In addition on a linked quarter basis average deposit balances increased 1% and a half and average loan balances were stable end of period loans experienced a little over 1% growth as we saw an increase in loan demand due to the results of our focused initiatives in the latter half of the quarter.

Speaker Change: Credit metrics remain solid as nonperforming loans held for investment declined $38 million linked quarter, while net charge offs increased four basis points in the fourth quarter, resulting in losses for the year coming in line with our expectations.

Speaker Change: Our CET one capital ratio finished the year at 11, 5%, which is up 140 basis points versus 2023 due to the gain on the sale of Truest insurance holdings in 2024 earnings partially offset by the strategic balance sheet repositioning completed in May and $3 8 billion of capital we returned to.

Boe: These factors along with our continued discipline around rate paid on deposits resulted in net interest income exceeding our expectations for the quarter invest.

Boe: Investment banking and trading revenue increased 46% for the year versus the 2023 as we continue to add talent and expertise to an already strong platform that continues to gain market share.

Cost initiatives in the latter half of the quarter.

These factors along with our continued discipline around rate paid on deposits resulted in net interest income exceeding our expectations for the quarter investment banking and trading revenue increased 46% for the year versus the 2023 as we continue to add talent and expertise to an already strong platform that can.

Speaker Change: Shareholders through our common dividend and the repurchase of $1 billion of our common stock.

Boe: Credit metrics remain solid as nonperforming loans held for investment declined 38 million linked quarter, while net charge offs increased four basis points in the fourth quarter, resulting in losses for the year coming in line with our expectations are.

Speaker Change: Execution of these important strategic initiatives, and resulting relative capital advantage leaves us well positioned to grow our balance sheet and return capital to shareholders through our common dividend and our share repurchase program.

<unk> gained market share.

Edit metrics remained solid as nonperforming loans held for investment declined $38 million linked quarter, while net charge offs increased four basis points in the fourth quarter, resulting in losses for the year coming in line with our expectations.

Boe: Our CET one capital ratio finished the year at 11, 5%, which is up 140 basis points versus 2023 due to the gain on the sale of Truest insurance holdings in 2024 earnings partially offset by the strategic balance sheet repositioning completed in May and $3 $8 billion of capital we returned.

Speaker Change: 2025, we're focused on five key areas all aimed at driving better growth positive operating leverage and improved profitability.

Speaker Change: First last year was a testament to the attractiveness of our platform, attracting developing and retaining top talent will continue to be a priority.

Our CET one capital ratio finished the year at 11, 5%, which is up 140 basis points versus 2023 due to the gain on the sale of Truest insurance holdings in 2024 earnings partially offset by the strategic balance sheet repositioning completed in May and $3 8 billion of capital we return.

Boe: To shareholders through our common dividend and the repurchase of $1 billion of our common stock.

Speaker Change: Second we see a material opportunity to deepen existing client relationships within our attractive footprint, especially in areas like premier banking wealth and payments all of which represents significant opportunities to capture additional share within our existing client base.

Boe: Execution of these important strategic initiatives, and resulting relative capital advantage leaves us well positioned to grow our balance sheet and return capital to shareholders through our common dividend and our share repurchase program.

To shareholders through our common dividend and the repurchase of $1 billion of our common stock.

Speaker Change: We also see growth potential beyond the markets, where we have strong share, especially in states like New Jersey, Pennsylvania, and Texas, where we have smaller but faster growing market share. These are not new markets, but areas, where we have invested significantly and have great momentum deploying our full <unk> capabilities.

Execution of these important strategic initiatives, and resulting relative capital advantage leaves us well positioned to grow our balance sheet and return capital to shareholders through our common dividend and our share repurchase program.

Boe: Two 2025, we're focused on five key areas all aimed at driving better growth positive operating leverage and improved profitability.

Boe: First last year was a testament to the attractiveness of our platform, attracting developing and retaining top talent will continue to be a priority.

In 2025, we're focused on five key areas all aimed at driving better growth positive operating leverage and improved profitability.

Speaker Change: We're also optimistic about further expanding into certain verticals in the middle market, where we can bring the expertise we provide the larger companies in our investment bank to mid sized companies all across the country.

Boe: Second we see a material opportunity to deepen existing client relationships within our attractive footprint, especially in areas like premier banking wealth and payment all of which represent significant opportunities to capture additional share within our existing client base.

First last year was a testament to the attractiveness of our platform, attracting developing and retaining top talent will continue to be a priority.

Speaker Change: Fourth we will continue to invest in our technology platform, which is improving the client experience driving new account production and delivering efficiencies.

Second we see a material opportunity to deepen existing client relationships within our attractive footprint, especially in areas like premier banking wealth and payments all of which represent significant opportunities to capture additional share within our existing client base.

Boe: Third we also see growth potential beyond the markets, where we have strong share, especially in states like New Jersey, Pennsylvania, and Texas, where we have smaller but faster growing market share. These are not new markets, but areas, where we have invested significantly and have great momentum and deploy our full truth.

Speaker Change: Finally, we plan to accomplish all of this while maintaining our expense discipline driving positive operating leverage and investing in important areas like our risk infrastructure and cyber security.

Third we also see growth potential beyond the markets, where we have strong share, especially in states like New Jersey, Pennsylvania, and Texas, where we have smaller but faster growing market share. These are not new markets, but areas, where we have invested significantly and have great momentum deploying our full truest capabilities.

Speaker Change: Maintaining our momentum and executing against these strategic priorities will be the key to driving positive operating leverage this year and showing progress towards our mid teens medium term.

Boe: We're also optimistic about further expanding certain verticals.

Boe: Well, we can bring to.

Boe: Provide the largest companies in our investment bank.

Speaker Change: <unk> target.

Before I hand, the call over to Mike to discuss our quarterly results I want to spend a little bit of time discussing the progress we're already making on our strategic priorities and the positive momentum, we're seeing within our business segments and with our digital initiatives on slides six and seven.

To mid sized companies all across the country.

Boe: Fourth we will continue to invest in our technology platform, which is improving the client experience driving new account production delivering efficiency.

We're also optimistic about further expanding into certain verticals in the middle market, where we can bring the expertise we provide the larger companies in our investment bank to mid sized companies all across the country.

Boe: Finally, we plan to accomplish all of this while maintaining our expense discipline driving positive operative operating leverage and investing in important areas like our risk infrastructure and cyber security.

Speaker Change: In consumer and small business banking I'm encouraged by our momentum as we experienced an increase in loan production and key focus areas within our lending portfolio and we continue to acquire key new clients and households, both through our digital and traditional channels average consumer loan balances increased one 2% linked quarter.

Fourth we will continue to invest in our technology platform, which is improving the client experience driving new account production and delivering efficiencies.

Boe: Maintaining our momentum and executing against these strategic priorities will be the key to driving positive operating leverage this year and showing progress towards our mid teens medium term R. A T cell target.

Finally, we plan to accomplish all of this while maintaining our expense discipline driving positive operating leverage and investing in important areas like our risk infrastructure and cyber security.

Speaker Change: <unk> due to the growth in residential mortgage indirect auto and important platforms like Sheffield and service finance as we experienced a 5% linked quarter increase in consumer loan production during the quarter.

Speaker Change: Before I hand, the call over to Mike to discuss our quarterly results I want to spend a little bit of time discussing the progress we're already making on our strategic priorities and the positive momentum, we're seeing within our business segments and with our digital initiatives on slides six and seven.

Maintaining our momentum and executing against these strategic priorities will be the key to driving positive operating leverage this year and showing progress towards our mid teens medium term.

Speaker Change: Importantly, we're not sacrificing our credit standards or pricing discipline to drive growth credit metrics remained relatively stable and new consumer loan production spreads are accretive to the overall portfolio.

<unk> target.

Speaker Change: In consumer and small business banking I'm encouraged by our momentum as we experienced an increase in loan production and key focus areas within our lending portfolio we can.

Speaker Change: Net new checking account growth was once again positive for the year as we added 104000, new consumer and business accounts.

Speaker Change: To acquire key new clients and households, both through our digital vision.

In consumer and small business banking I'm encouraged by our momentum as we experienced an increase in loan production and key focus areas within our lending portfolio and we continue to acquire key new clients and households, both through our digital and traditional channels average consumer loan balances increased one 2% linked quarter.

Speaker Change: Not only are we adding new households, but promisee rates and client retention also continued to increase due to improvements to the client experience and ongoing enhancements to our digital offerings during the year.

Speaker Change: Average consumer loan balances increased one 2% linked quarter due to the growth in residential mortgage indirect auto and important platforms like Sheffield and service finance as we experienced a 5% linked quarter increase in consumer loan production during the quarter.

Speaker Change: And wholesale I'm encouraged by the underlying momentum in terms of improved production increase wallet share within certain businesses.

<unk> due to the growth in residential mortgage indirect auto and important platforms like Sheffield and service finance as we experienced a 5% linked quarter increase in consumer loan production during the quarter.

Speaker Change: Shortly we're not sacrificing our credit standards or pricing discipline to drive growth.

Speaker Change: Talent that we're attracting to our company.

Speaker Change: Credit metrics remained relatively stable and new consumer loan production spreads are accretive to the overall portfolio.

During the quarter, we saw a 3% growth in average wholesale deposits, including growth in noninterest bearing demand.

Speaker Change: Although average wholesale loans declined linked quarter end of period balances increased 50 basis points.

Speaker Change: Net new checking account growth was once again positive for the year as we added 104000, new consumer and business accounts.

Importantly, we're not sacrificing our credit standards or pricing discipline to drive growth.

Credit metrics remained relatively stable and new consumer loan production spreads are accretive to the overall portfolio.

Speaker Change: Increased production and higher commitments and certain key focus areas as clients are in a more offensive posture is.

Speaker Change: Not only are we adding new households, but pharmacy rates and client retention also continue to increase due to improvements to the client experience and ongoing enhancements to our digital offerings during the year.

Net new checking account growth was once again positive for the year as we added 104000, new consumer and business accounts.

Speaker Change: As I previously noted 2004 represented the strongest capital market share we've reported since 2021.

Speaker Change: We experienced a record performance in investment grade issuance equity capital markets asset securitization and project finance, while also gaining share in verticals like financial institutions consumer retail and health care.

Speaker Change: In wholesale I'm encouraged by the underlying momentum in terms of improved production increase wallet share within certain businesses.

Not only are we adding new households, but promisee rates and client retention also continued to increase due to improvements to the client experience and ongoing enhancements to our digital offerings during the year.

Speaker Change: Highlight that we're attracting to our company.

Speaker Change: During the quarter, we saw a 3% growth in average wholesale deposits, including growth in noninterest bearing demand.

In wholesale I'm encouraged by the underlying momentum in terms of improved production increase wallet share within certain businesses and the talent that we're attracting to our company.

Speaker Change: Our leaders made key new hires through 2024 in commercial banking corporate banking investment banking wealth payments and a leader of our new Middle market initiative. These new experienced teammates are attracted to our purposeful and results oriented culture and complement our great teams as I mentioned earlier, we have.

Speaker Change: Although average wholesale loans declined linked quarter end of period balances increased 50 basis points, we saw increased production and higher commitments and certain key focus areas as clients are in a more offensive posture is.

During the quarter, we saw 3% growth in average wholesale deposits, including growth in noninterest bearing demand.

Although average wholesale loans declined linked quarter end of period balances increased 50 basis points, we saw increased production and higher commitments and certain key focus areas as clients are in a more offensive posture.

Speaker Change: As I previously noted 2004 represented the strongest capital market share we've reported since 2021, we experienced record performance any investment grade issuance equity capital markets asset securitization and project finance, while also gaining share in verticals like financial institutions consumer retail and health care.

Speaker Change: Specific focus on building out our middle market commercial segment I'm very pleased with focus and momentum we're already experiencing in production and results.

Speaker Change: We also continue to enhance our wholesale digital capabilities by improving the client experience during the quarter, we launched electronic Bill Presentment, which is a next generation product that gives clients greater control over their billing and payments operations.

Speaker Change: As I previously noted 2004 represented the strongest capital market share we've reported since 2021, we experienced record performance in investment grade issuance equity capital markets asset securitization and project finance, while also gaining share in verticals like financial institutions consumer retail and health.

Speaker Change: Sure.

Speaker Change: Our leaders made key new hires through 2024 in commercial banking corporate banking investment banking wealth payments and a leader of our new middle market initiative.

Speaker Change: Hence in the client experience in growing our digital capabilities are important parts of our strategy, which I'll discuss in more detail on slide seven.

Speaker Change: These new experienced teammates are attracted to our purposeful and results oriented culture.

Speaker Change: Sure.

Our leaders made key new hires through 2024 in commercial banking corporate banking investment banking wealth payments and a leader of our new middle market initiative.

Complementing our great teams.

Speaker Change: Throughout the year, we've invested in our digital platforms to attract new clients to the truest with a focus on shifting existing client behaviors to self service, which drives operational efficiency. As a result of these efforts we showed strong and steady growth in our digital capabilities as we experienced year over year growth in all core metrics.

Speaker Change: As I mentioned earlier, we have a specific focus on building out our middle market commercial segment I'm very pleased with our focus and momentum we're already experiencing in production and results.

Bill: These new experienced teammates are attracted to our purposeful and results oriented culture and complement our great teams.

Speaker Change: We also continue to enhance our wholesale digital capabilities by improving the client experience.

Bill: As I mentioned earlier, we have a specific focus on building out our middle market commercial segment I'm very pleased with focus and momentum we're already experiencing in production and results.

Speaker Change: During the quarter, we launched electronic Bill presentment.

Speaker Change: While also achieved achieving favorable client experience satisfaction scores.

Speaker Change: Generation product gives clients greater control over their beliefs.

Speaker Change: We opened over 730000, new digital loan and deposits accounts during the year, including nearly 275000, new to bank clients through our digital channels, which represents a 31 <unk>.

Speaker Change: We also continue to enhance our wholesale digital capabilities by improving the client experience during the quarter, we launched electronic Bill Presentment, which is our next generation product that gives clients greater control over their billing and payments operations.

Speaker Change: Operations.

Speaker Change: Enhancing the client experience in growing our digital capabilities are important parts of our strategy, which I'll discuss in more detail on slide seven.

Speaker Change: Increase over the previous year.

Speaker Change: Throughout the year, we've invested in our digital platforms to attract new clients to true is with a focus on shifting existing client behaviors to self service, which drives operational efficiency. As a result of these efforts we showed strong and steady growth in our digital capabilities, because we experienced year over year growth in all core metric.

We surpassed over $7 1 million active digital users on our platform plant mobile App users grew 7% and digital transactions increased 13% year over year. In addition to an increase in account openings and higher digital adoption rates. We're also seeing an improvement in the funding of our digital account openings with bowel.

Speaker Change: Enhancing the client experience in growing our digital capabilities are important parts of our strategy, which I'll discuss in more detail on slide seven.

<unk> will also achieve achieving favorable client experience satisfaction scores.

Speaker Change: This is up significantly over 2023, including growth in balances for millennial and Gen Z clients.

Speaker Change: With over 730000.

Loan.

During the year.

Speaker Change: Investing in the digital client experience continues to be a priority for our company in 2025 and beyond we expect to continue growing our digital presence with clients as we further leverage our modern and scalable technology platform.

Speaker Change: So with that let me turn it over to Mike to discuss our financial results in more detail Mike.

Mike Mcguire: Thank you Bill and good morning, everyone. So I'm going to start with our performance highlights we reported fourth quarter 2024, GAAP net income available to common shareholders of $1 2 billion or <unk> 91 per share total revenue decreased <unk>, 5% linked quarter as both net interest income and fees decreased modestly.

Mike Mcguire: Adjusted expenses increased 4% linked quarter and as we discussed last quarter. This increase was driven by higher professional fees and outside processing expenses related to a number of projects that were initiated later in the year as Bill mentioned earlier non interest expenses declined <unk>, 4% in 2024 versus 2002.

Three.

Mike Mcguire: Moving to capital our CET, one ratio declined 10 basis points linked quarter to 11, 5% as our larger balance sheet the payment of our common dividend and share repurchases completed during the quarter offset our core quarter current period earnings.

Mike Mcguire: From a credit perspective, net charge offs increased four basis points on a linked quarter basis, and our nonperforming loans declined one basis point on a linked quarter basis.

Moving to slide nine I'll cover loans and leases.

Mike Mcguire: Average loans remained relatively stable on a linked quarter basis as a decline in average commercial loans was offset by growth in average consumer loans.

Mike Mcguire: Average commercial loans decreased $1 $5 billion or 0.8%, primarily due to a decline in CRE and C&I balances driven by lower production in CRE commercial line utilization remained relatively stable on a linked quarter basis.

Mike Mcguire: In our consumer portfolio average loans increased $1 4 billion or one 2% linked quarter due to growth in indirect auto residential mortgage and other consumer.

Mike Mcguire: On an end of period basis loans held for investment increased by $3 3 billion or one 1%, primarily due to higher residential mortgages C&I and indirect auto.

Mike Mcguire: As Bill mentioned, we're encouraged by the increase in end of period loan balances and improved loan production in certain key focus areas. During the quarter. This should lead to positive growth in end of period loan balances in 2025.

Mike Mcguire: Moving to deposit trends on slide 10.

Mike Mcguire: Average deposits increased one 5% sequentially or $5 7 billion drew.

Mike Mcguire: Driven by growth in all deposit categories, except for time deposits, which were down linked quarter.

Average non interest bearing deposits increased one 8% and represented 28% of total deposits, which is unchanged compared to the third quarter of 2024.

During the quarter, we continued to actively manage rate paid which resulted in a decrease to our deposit costs, specifically total deposit costs decreased 19 basis points sequentially to 189%, which implies a 29% cumulative total deposit beta.

On an end of period basis loans held for investment increased by $3 3 billion or one 1%, primarily due to higher residential mortgages C&I and indirect auto.

As Bill mentioned, we're encouraged by the increase in end of period loan balances and improved loan production in certain key focus areas. During the quarter. This should lead to positive growth in end of period loan balances in 2025.

Mike Mcguire: Interest bearing deposit costs decreased by 26 basis points sequentially to $2 six 2%, representing a 40% cumulative total interest bearing deposit beta overall, we expect average deposit balances decreased by about 1% in the first quarter due in part to the outflow of seasonally higher municipal deposits.

Moving to deposit trends on slide 10.

Average deposits increased one 5% sequentially or $5 7 billion driven.

Driven by growth in all deposit categories, except for time deposits, which were down linked quarter.

Mike Mcguire: Moving to net interest income and net interest margin on slide 11.

Average non interest bearing deposits increased one 8% and represented 28% of total deposits, which is unchanged compared to the third quarter of 2024.

Mike Mcguire: Taxable equivalent net interest income decreased <unk>, 4% linked quarter or $16 million, primarily due to the lagging deposit repricing versus earning asset repricing, which was partially offset by higher earning assets and some benefit from fixed rate asset repricing.

Mike Mcguire: Our net interest margin decreased by five basis points on a linked quarter basis to 3.0% to 7% due primarily to the previously mentioned beta lag and a larger investment securities portfolio.

Interest bearing deposit costs decreased by 26 basis points sequentially to $2 six 2%, representing a 40% cumulative total interest bearing deposit beta overall, we expect average deposit balances to decrease by about 1% in the first quarter due in part to the outflow of seasonally higher municipal deposits.

Mike Mcguire: Based on our current outlook, we believe that the net interest income will decline by 2% linked quarter due primarily to the impact of two fewer days in the first quarter relative to the fourth quarter and then we would expect it to trend higher in the second quarter of 2025 and throughout the course of the year.

As you can see in the charts on the right. We expect net interest income to grow in 2025% driven primarily by low single digit end of period loan growth and the continued benefit from fixed asset repricing of our securities portfolio as well as our fixed rate loan portfolios.

Moving to net interest income and net interest margin on slide 11.

Taxable equivalent net interest income decreased <unk>, 4% linked quarter or $16 million, primarily due to the lagging deposit repricing versus earning asset repricing, which was partially offset by higher earning assets and some benefit from fixed rate asset repricing.

Mike Mcguire: During the fourth quarter, our average investment securities portfolio totaled $125 billion in.

Mike Mcguire: And carried a weighted average yield of 288% that excludes the impact of pay fixed swaps.

Our net interest margin decreased by five basis points on a linked quarter basis to 3.0% to 7% due primarily to the previously mentioned beta lag and a larger investment securities portfolio.

Mike Mcguire: We expect to receive approximately $13 billion of cash flows from the investment portfolio throughout the course of 2025 that we anticipate reinvesting at higher yields these securities roll off at a weighted average yield of 3.8%, excluding the impact of pay fixed swaps and based on the current forward curve.

Based on our current outlook, we believe that the net interest income will decline by 2% linked quarter due primarily to the impact of two fewer days in the first quarter relative to the fourth quarter and then we would expect it to trend higher in the second quarter of 2025 and throughout the course of the year.

Mike Mcguire: In addition, our fixed average our average fixed rate loan portfolio totaled $135 billion and carried a weighted average yield of 538% during the fourth quarter.

We anticipate having the opportunity to reprice approximately $42 billion of loans at higher yields during 2025 based on current maturity schedules. These.

Mike Mcguire: These maturities maturing loans have a weighted average yield of approximately $6 three 6%.

During the fourth quarter, our average investment securities portfolio totaled $125 billion.

And carried a weighted average yield of 288% that excludes the impact of pay fixed swaps, we expect to receive approximately $13 billion of cash flows from the investment portfolio throughout the course of 2025 that we anticipate reinvesting at higher yields.

Mike Mcguire: Before moving on I also wanted to note that this quarter, we added additional disclosure on our swap portfolio and that's on the bottom right hand corner of the slide.

At December 31, we had approximately $84 billion of notional receive fixed swaps with a weighted average yield of 345%.

These securities roll off at a weighted average yield of 3.8%, excluding the impact of pay fixed swaps and based on the current forward curve.

Mike Mcguire: These swaps are designated against our commercial loan portfolio and long term debt and designed to protect net interest income from lower short end rates approximately 45 billion of these swaps were effective at the end of the quarter.

In addition, our fixed average our average fixed rate loan portfolio totaled $135 billion and carried a weighted average yield of 538% during the fourth quarter.

Mike Mcguire: The remaining $39 billion of receive fixed swaps are forward, starting and will become effective over time based on our current portfolio at December 31, the effective receive fixed swap position peaks around $63 billion during the fourth quarter of 2025.

We anticipate having the opportunity to reprice approximately $42 billion of loans at higher yields during 2025 based on current maturity schedules. These.

Mike Mcguire: At December 31, we also had approximately $30 billion of notional pay fixed swaps with a weighted average pay fixed rate at 339%.

These maturities maturing loans have a weighted average yield of approximately 636%.

Before moving on I also wanted to note that this quarter, we added additional disclosure on our swap portfolio and that's on the bottom right hand corner of the slide.

Mike Mcguire: These swaps are designed to protect the economic value of the balance sheet as well as to manage future capital volatility through OCI. As these swaps are designated against our <unk> Securities portfolio.

At December 31, we had approximately 84 billion of notional receive fixed swaps with a weighted average yield of 345%.

Mike Mcguire: At December 31, the entire $30 billion pay fixed swap portfolio was effective with approximately half the portfolio carrying maturity of less than three years.

These swaps are designated against our commercial loan portfolio and long term debt and designed to protect net interest income from lower short end rates approximately 45 billion of these swaps were effective at the end of the quarter.

Mike Mcguire: Okay, turning to noninterest income on slide 12.

Mike Mcguire: Noninterest income decreased $12 million or 0.9% versus the third quarter.

The remaining $39 billion of receive fixed swaps are forward, starting and will become effective over time based on our current portfolio at December 31, the effective receive fixed swap position peaks around $63 billion during the fourth quarter of 2025.

The linked quarter decrease was primarily attributable to lower investment banking and trading income, which declined $770 million linked quarter due to lower debt and equity capital markets activity and M&A fees. The decline investment banking and trading was partially offset by growth in other income service charges on deposits and mortgage banking income.

At December 31, we also had approximately 30 billion of notional pay fixed swaps with a weighted average pay fixed rate at 339%.

Mike Mcguire: Although fourth quarter investment banking trading income declined on a linked quarter basis 2020 for investment banking and trading revenues increased 46% versus 2023 and represented the highest level since 2021 due to higher transaction activity levels and continued market share gains, which helped drive a six 2% increase.

These swaps are designed to protect the economic value of the balance sheet as well as to manage future capital volatility through OCI as these swaps are designated against our securities portfolio.

At December 31, the entire $30 billion pay fixed swap portfolio was effective with approximately half the portfolio carrying maturity of less than three years.

Mike Mcguire: And adjusted noninterest income for the full year 2024.

Okay, turning to noninterest income on slide 12.

We remain optimistic about our ability to continue to gain share and grow not only in investment banking and trading but also in wealth and payments, where we believe there is significant opportunity to grow within our existing client base next I'll cover noninterest expense on slide 13.

Noninterest income decreased $12 million or 0.9% versus the third quarter.

The linked quarter decrease was primarily attributable to lower investment banking and trading income, which declined $770 million linked quarter due to lower debt and equity capital markets activity and M&A fees. The decline in investment banking and trading was partially offset by growth in other income service charges on deposits and mortgage banking income.

Mike Mcguire: Adjusted noninterest expense, which excludes the impact of restructuring charges and core deposit intangible amortization expense increased 4% linked quarter due to higher professional fees and equipment expense, partially offset by lower personnel expense in the quarter on an annual basis adjusted noninterest expense declined by <unk>, 4% and our adjusted <unk>.

Although fourth quarter investment banking trading income declined on a linked quarter basis 2020 for investment banking and trading revenues increased 46% versus 2023 and represented the highest level since 2021% due to higher transaction activity levels and continued market share gains, which helped drive a six 2% increase.

Mike Mcguire: <unk> ratio remained relatively stable.

Beginning with the first quarter of 2025, we will begin including core deposit intangible amortization expense with adjusted expense to make our reporting align and be more comparable with peers.

Mike Mcguire: Moving to asset quality on slide 14.

Adjusted noninterest income for the full year 2024.

Mike Mcguire: Asset quality remained relatively stable on both a like and linked quarter basis, reflecting our strong credit risk culture and proactive approach to quickly resolving problem loans.

Mike Mcguire: During the quarter, our net charge off ratio increased four basis points to 59 basis points due primarily to seasonally higher consumer losses net charge offs of 59 basis points for the year were in line with our expectation of 60 basis points.

Adjusted noninterest expense, which excludes the impact of restructuring charges and core deposit intangible amortization expense increased 4% linked quarter due to higher professional fees and equipment expense, partially offset by lower personnel expense in the quarter on an annual basis adjusted noninterest expense declined by <unk>, 4% and our adjusted <unk>.

Mike Mcguire: Our loan loss provision exceeded net charge offs, but growth in certain loan portfolios contributed to a one basis point decrease in our Arab oil ratio to one 5% 9%.

<unk> ratio remained relatively stable.

Nonperforming loans held for investment as a percentage of total loans decreased one basis point linked quarter, but increased three basis points on a linked quarter basis to 47 basis points Npls have remained in a fairly narrow band of 44 to 48 basis points over the course of the past five quarters.

Beginning with the first quarter of 2025, we will begin including core deposit intangible amortization expense with adjusted expense to make our reporting align and be more comparable with peers.

Moving to asset quality on slide 14.

Asset quality remained relatively stable on both alike and linked quarter basis, reflecting our strong credit risk culture, and proactive approach to quickly resolving problem loans.

Included in our appendix is updated data on our office portfolio, which is down $235 million linked quarter and represented one 5% of total loans or office reserve increased from 10, 4% to 11, 1%.

During the quarter, our net charge off ratio increased four basis points to 59 basis points due primarily to seasonally higher consumer losses net charge offs of 59 basis points for the year were in line with our expectation of 60 basis points.

Approximately five 3% of our office portfolio is currently classified as nonperforming compared with five 1% at September 30.

Our loan loss provision exceeded net charge offs, but growth in certain loan portfolios contributed to a one basis point decrease in our Arab oil ratio to 159%.

Mike Mcguire: Notably approximately 18% of our office portfolio is housed within our commercial community banking and wealth segments, where loan sizes tend to be more granular guarantor support more prevalent and overall losses lower.

Mike Mcguire: We expect stress to remain in the office sector and believe that the size of our portfolio is manageable and well reserved but our position is to remain very proactive in identifying and resolving issues in this portfolio.

Turning now to capital on Slide 15.

On a linked quarter basis, our CET, one ratio declined 10 basis points to 11, 5% due to the payout of 98% of our earnings via our common dividend and $500 million of share repurchases as well as balance sheet growth.

Included in our appendix is updated data on our office portfolio, which is down $235 million linked quarter and represented one 5% of total loans or office reserve increased from 10, 4% to 11, 1%.

Mike Mcguire: Our CET, one capital ratio, including the impact of OCI decreased from nine 9% to nine 6%, reflecting the aforementioned factors and an increase in OCI due to the increase in longer term interest rates experienced during the quarter.

Approximately five 3% of our office portfolio is currently classified as nonperforming compared with five 1% at September 30.

Notably approximately 18% of our office portfolio is housed within our commercial community banking and wealth segments, where loan sizes tend to be more granular guarantor support more prevalent and overall losses lower.

During 2024, our CET one ratio increased by 140 basis points, which was driven by the sale of tourist insurance holdings and retained earnings partially offset by our strategic balance sheet repositioning, our common dividend and $1 billion of share repurchases.

We expect stressed to remain in the office sector and believe that the size of our portfolio is manageable and well reserved but our position has remained very proactive in identifying and resolving issues in this portfolio.

Mike Mcguire: We continue to believe that our strong capital position gives us the unique ability to utilize our future earnings and OCI accretion to fund balance sheet growth and to return significant amount of capital to our shareholders.

Turning now to capital on slide 15 on a linked quarter basis, our CET one ratio declined 10 basis points to 11, 5% due to the payout of 98% of our earnings via our common dividend and $500 million of share repurchases as well as balance sheet growth, our CET one capital ratio <unk>.

Mike Mcguire: Now I will move to slide 16, and review our guidance for 2025.

Looking into the first quarter of 2025, we expect revenues to decrease 2% relative to fourth quarter revenue of $5 $1 billion. We expect net interest income decreased 2% in the first quarter, primarily driven by two fewer days in the first quarter relative to the fourth quarter and seasonally lower average.

<unk> the impact of a OCI decreased from nine 9% to nine 6%, reflecting the aforementioned factors and an increase in OCI due to the increase in longer term interest rates experienced during the quarter.

Mike Mcguire: Balances this will be partially offset by slightly higher average loan balances excluding the impact of day count we would expect net interest income to remain relatively stable linked quarter.

Mike Mcguire: We expect noninterest income to decrease two 5% driven primarily by higher investment banking and trading revenue, partially offset by lower other income and service charges on deposits.

We continue to believe that our strong capital position gives us the unique ability to utilize our future earnings and OCI accretion to fund balance sheet growth and to return significant amount of capital to our shareholders.

Mike Mcguire: Adjusted expenses of $3 billion in the fourth quarter, which includes CDI amortization expense are expected to decline by 3% linked quarter as seasonally higher personnel expenses will be offset with lower other expenses and professional fees as it relates to the buyback similar to the fourth quarter, where Tom.

Speaker Change: Now I will move to slide 16, and review our guidance for 2025.

Speaker Change: Looking into the first quarter of 2025, we expect revenue to decrease 2% relative to fourth quarter revenue of $5 $1 billion. We expect net interest income decreased 2% in the first quarter, primarily driven by two fewer days in the first quarter relative to the fourth quarter and seasonally lower average deposit.

Mike Mcguire: Getting approximately $500 million of share repurchases in the first quarter of 2025.

Mike Mcguire: For full year 2025, we expect revenue to increase by three to three 5% relative to 2024 adjusted revenue of $20 1 billion driven by growth in net interest income and noninterest income.

Speaker Change: Balances this will be partially offset by slightly higher average loan balances.

Bill: Excluding the impact of day count we would expect net interest income to remain relatively stable linked quarter.

Mike Mcguire: Our net interest income outlook assumes a low single digit end of period loan growth and two reductions in the fed funds rate, including a cut in March and another in September.

Bill: We expect noninterest income to decrease two 5% driven primarily by higher investment banking and trading revenue, partially offset by lower other income and service charges on deposits.

Mike Mcguire: We expect noninterest income to increase at a low single digit rate. This expected growth rate reflects the fact that certain fee revenues that were recognized in 'twenty. Four we will not reoccur in 2025. These fees are related to the shared services agreement that was in place. Following the sale of <unk> back in May and six months of revenue associated with <unk>.

Speaker Change: Adjusted expenses of $3 billion in the fourth quarter, which includes CDI amortization expense are expected to decline by 3% linked quarter as seasonally higher personnel expenses will be offset with lower other expenses and professional fees as it relates to the buyback similar to the fourth quarter where targa.

Mike Mcguire: Capital Management, which was also sold.

Speaker Change: Getting approximately $500 million of.

Mike Mcguire: Round mid year last year.

Speaker Change: Share repurchases in the first quarter of 2025.

Mike Mcguire: We expect full year 2025, adjusted expenses, which include CDI amortization expense to increase approximately one 5% in 2025 versus 2024.

Speaker Change: For full year 2025, we expect revenue to increase by three to three 5% relative to 2024 adjusted revenue of $20 1 billion driven by growth in net interest income and noninterest income or.

Mike Mcguire: 25 revenue and expense outlook implies positive operating leverage of 150 to 200 basis points.

Speaker Change: Our net interest income outlook assumes a low single digit end of period loan growth and two reductions in the fed funds rate, including a cut in March and another in September.

Mike Mcguire: In terms of asset quality, we expect net charge offs of about 60 basis points, and 25%, which is stable compared with net charge offs of 59 basis points in 2024.

Boe: We expect noninterest income to increase at a low single digit rate. This expected growth rate reflects the fact that certain fee revenues that were recognized in 'twenty. Four we will not reoccur in 2025. These fees are related to the shared services agreement that was in place following the sale of <unk> back in May and six months of revenue associated.

Mike Mcguire: Finally, we expect our effective tax rate to approximate 17% or 20% on a taxable equivalent basis in 2025.

Bill Rogers: I'll now hand, it back to bill for some final remarks.

Mike Mcguire: So to conclude.

I'm really pleased with the progress we've made as a company last year and I am confident that we have strong momentum with clients and with teammates and this year as our value proposition is just never been stronger.

Boe: With Sterling capital management, which was also sold.

Boe: Around mid year last year.

Boe: We expect full year 2025, adjusted expenses, which include CDI amortization expense to increase approximately one 5% in 2025 versus 2024 or 25 revenue and expense outlook implies positive operating leverage of 150 to 200 basis points.

Mike Mcguire: First we have an incredible franchise with leading share in high growth markets.

Mike Mcguire: Got motivated and energized teammates and a fulsome set of specialized wholesale and consumer capabilities that our loyal clients value.

Mike Mcguire: So I kind of relative capital position remains a differentiating factor that gives us the ability to grow our core business by serving existing and new clients invest in our infrastructure have returned considerable amounts of capital to our shareholders in the form of dividends and share repurchases over the next several years all of which we plan to.

Boe: In terms of asset quality, we expect net charge offs of about 60 basis points, and 25%, which is stable compared with net charge offs of 59 basis points in 2024.

Boe: Finally, we expect our effective tax rate to approximate 17% or 20% on a taxable equivalent basis in 2025.

Speaker Change: You're doing in 2025.

Bill: I'll now hand, it back to bill for some final remarks.

Speaker Change: Third as we execute our strategic growth and capital management priorities, we see a significant opportunity to improve our profitability over the medium term, we would expect to show progress in 2025.

Bill: So to conclude.

I'm really pleased with the progress we've made as a company last year and I am confident that we have strong momentum with clients of our teammates and this year as our value proposition is just never been stronger.

Speaker Change: Our path to profitability improvement is multifaceted and a function of client and business growth, while maintaining our cost discipline.

Boe: First we have an incredible franchise with leading share in high growth markets.

Speaker Change: As I discussed earlier much of the profitability improvement potential. We plan is centered on further deepening of existing client relationships in verticals and product lines like wealth payments Premier investment banking that already exist at trust we.

Boe: Got motivated and energized teammates and a fulsome set of specialized wholesale and consumer capabilities that our loyal clients value.

Boe: So that kind of relative capital position remains a differentiating factor that gives us the ability to grow our core business by serving existing and new clients invest in our infrastructure have returned considerable amounts of capital to our shareholders in the form of dividends and share repurchases over the next several years all of which we plan to.

Speaker Change: We see opportunities to grow in markets, where we have less dominant share like New Jersey, Pennsylvania, particularly Texas. While also further penetrating the middle market lending segment.

Speaker Change: The good news is that we see multiple paths and initiatives that with proper execution will result in improved performance, which we expect to show you in 2025.

Speaker Change: When you're doing in 2025.

Speaker Change: Fourth we plan to accomplish all of this while maintaining our expense discipline generating positive operating leverage in 2025 and beyond while also continuing to invest in talent technology and our infrastructure.

Boe: Our path to profitability improvement is multifaceted and a function of client and business growth, while maintaining our cost discipline.

Speaker Change: Finally, we never take for granted our strong track record on asset quality as we will continue to focus on maintaining strong risk discipline and controls.

Boe: As I discussed earlier much of the profitability improvement potential re plan is centered on further deepening of existing client relationships in verticals and product lines like well payments Premier investment banking that already exists Charles we.

Speaker Change: I'm as optimistic as ever about <unk> future, especially in light of the momentum.

Speaker Change: Every day inside of this company.

Speaker Change: Like to thank all of our teammates and leaders for their incredible purposeful focus on productivity and moving our company forward I am so proud to be their teammates.

Boe: We see opportunities to grow in markets, where we have less dominant share like New Jersey, Pennsylvania, particularly Texas. While also further penetrating the middle market lending segment.

Brad: So again, thank you for your interest and investment in tourist and Brad with the Q&A.

Boe: The good news is that we see multiple paths on initiatives that with proper execution will result in improved performance, which we expect to show you in 2024.

Speaker Change: Thank you Bill Betsy at this time, we please explain how our listeners can participate in the Q&A session. As you do that I'd like to ask the participants to please limit yourselves to one primary question and one follow up in order that we may accommodate as many of you yesterday as possible.

Boe: Fourth we plan to accomplish all of this while maintaining our expense discipline generating positive operating leverage in 2025 and beyond while also continuing to invest in talent technology and our infrastructure.

Speaker Change: We will now begin the question and answer session.

Boe: We never take for granted our strong track record on asset quality as we will continue to focus on maintaining strong risk discipline and controls.

Speaker Change: To ask a question you May Press Star then one on your Touchtone phone.

If you are using a speakerphone please pick up your handset before pressing Ricky.

Boe: I'm as optimistic as ever about <unk> future, especially in light of the momentum.

Speaker Change: Is it any time your question has been addressed and you would like to withdraw your question. Please press Star then two.

Boe: Every day inside of this company.

Boe: Like to thank all of our teammates and leaders for their incredible purposeful focus on productivity and moving our company forward I am so proud to be their teammates.

Speaker Change: In the interest of time, please limit yourself to one question and one follow up.

Speaker Change: At this time, we will pause momentarily to assemble our roster.

Boe: So again, thank you for your interest and investment in Charles Bradley.

Boe: Turning to the Q&A.

Speaker Change: The first question today comes from Scott.

Speaker Change: Thank you Bill Betsy at this time will you. Please explain how our listeners can participate in the Q&A session. As you do that I would like to ask the participants to please limit yourself to one primary question and one follow up in order that we may accommodate as many of you as today as possible.

Speaker Change: Piper Sandler. Please go ahead.

Speaker Change: Good morning, everyone. Thanks for taking the question.

Speaker Change: Mike I appreciate the disclosures on the swap book and the anticipated repricing opportunities that youre kind of it sounds like after a little bit of a setback in the first quarter. There's just a lot of programmatic opportunity. So maybe just sort of simple terms, maybe if you could discuss how much of the building momentum simply starting to sort of happens versus how much you see is dependent.

Boe: We will now begin the question and answer session.

Boe: You asked a question you May Press Star then one on your Touchtone phone.

Boe: If you are using a speakerphone please pick up your handset before pressing Ricky.

Speaker Change: On the external rate environment, I guess in particular in there and maybe how your thoughts would change if we got either more fewer cuts then the two you've envisioned in the guidance.

And then any time your question has been addressed and you would like to withdraw your question. Please press Star then two.

Boe: In the interest of time, please limit yourself to one question and one follow up.

Speaker Change: Yes, good morning, Scott happy to do that I think about our NII trajectory and you had it I think the first quarter, we're going to experience a little bit of a step back and Thats really just day count.

Boe: At this time, we will pause momentarily to assemble our roster.

Speaker Change: Driven but from there we would expect to begin to see positive trend and some of that is sort of a continuous expectation that we'll begin to see end of period balance growth occurred throughout the course of the year again relatively modest.

Speaker Change: The first question today comes from Scott <unk> with Piper Sandler. Please go ahead.

Speaker Change: Good morning, everyone. Thanks for taking the question.

Speaker Change: Mike I appreciate the disclosures on the swap book and the anticipated repricing opportunities that kind of it sounds like after a little bit of a setback in the first quarter. There's just a lot of programmatic opportunity. So maybe just sort of simple terms, maybe if you could discuss how much of the building momentum simply sort of sort of happens.

Speaker Change: The betas on the deposit side are catching up essentially will become fully caught up in the first quarter.

Speaker Change: So we really do begin to see I think some benefit there and I think as we came into the into the into the cutting cycle that was maybe more of a question around where these betas might start we're very pleased by.

Boe: How much do you see is dependent on the external rate environment I guess in particular in there and maybe how your thoughts would change if we got either more fewer cuts then the two you've envisioned in the guidance.

Speaker Change: The 40% that we were able to achieve in the first quarter pardon me the fourth quarter and have an expectation that will be in the mid 40% plus in the first on our way to 50.

Boe: Yes, good morning, Scott happy to do that I think about our NII trajectory and you're headed I think the first quarter, we're going to experience a little bit of a step back and Thats really just day count.

Speaker Change: Next year, so I think I.

Speaker Change: I think that's the primary drivers of our of our outlook for next year or just that some modest loan and deposit growth coupled with the fact that the debate is or where they are in terms of the fed rate path. We've got the two cuts in now.

Boe: Driven but from there we would expect to begin to see positive trend and some of that is sort of a continuous expectation that we'll begin to see end of period balance growth occurred throughout the course of the year again relatively modest.

Speaker Change: In March and September I think if if we were to see later cuts fewer cuts even no cuts.

The betas on the deposit side are catching up essentially will become fully caught up in the first quarter. So we really do begin to see I think some benefit there and I think as we came into the into the into the cutting cycle that was maybe more of a question around where these betas might start we're very pleased by the.

Speaker Change: That would present.

Touch of a headwind, but I think manageable frankly inside of our guide to.

Speaker Change: To the extent that the short end was a little lower and we saw maybe sooner cuts or more cuts I think thats a touch of a good guy, but again, we do have I think our sensitivity at least for the short and relatively relatively neutral I mean, one other factor that we're keeping our eye on.

Speaker Change: The 40% that we were able to achieve in the first quarter pardon me the fourth quarter and have an expectation that will be in the mid 40% plus in the first on our way to 50.

Speaker Change: I think like others franked.

Speaker Change: Frankly is just the shape of the curve.

Speaker Change: Next year. So I think I think that's the primary drivers of our of our outlook for next year or just that some modest loan and deposit growth coupled with the fact that the debate is.

Speaker Change: Today's curve is I think attractive and.

Speaker Change: To the extent that we can hang onto a long and that that does benefit the fixed loan and the securities repricing, that's something we have our eyes on as well.

Or where they are in terms of the fed rate path. We've got the two cuts in now.

Speaker Change: Perfect. Thank you for that color and then within the.

In March and September I think if if we were to see later cuts fewer cuts even no cuts.

Speaker Change: Sort of the loan balance comment.

Speaker Change: Sounds like fairly modest positive that modest loan growth you expect maybe some additional broader thoughts on kind of where your customers are high.

Speaker Change: That would present.

Speaker Change: Touch of a headwind, but I think manageable frankly inside of our guide to.

Speaker Change: How you might expect that loan demand to evolve as the year progresses.

Bill Rogers: Yes Bill.

Speaker Change: As Mike noted I mean, we're not building a lot of loan growth into the into the forecast, but we started the year with some momentum.

Speaker Change: So sort of a small single digit end of period kind of kind of loan growth.

Speaker Change: I think like others franked.

Speaker Change: What we're seeing is the benefit of our activity. So the things that we've been investing in.

Speaker Change: Frankly is just the shape of the curve.

Speaker Change: Today's curve is I think attractive and.

Speaker Change: To the extent that we can hang onto a long and that that does benefit the fixed loan and the securities repricing, that's something we have our eyes on as well.

Speaker Change: Opportunities that we see in our markets, which have led conferred us where cover a little bit faster than the rest in the rest of the country. So maybe if I'll just I'll just dissect that a little bit if that'll be helpful. So and the consumer side.

Speaker Change: Perfect. Thank you for that color and then within the.

Speaker Change: Our efforts in indirect auto service finance and mortgage led to the growth there and I expect those to continue I mean, those are places where we're.

Speaker Change: Sort of the loan balance comment.

Speaker Change: Sounds like fairly modest positive that modest loan growth you expect maybe some additional broader thoughts on kind of where your customers are high.

Speaker Change: Leaning in.

Speaker Change: As I said in my comments also not compromising on.

Speaker Change: Price or structure or credit. So that's that's good and on the C&I side, we saw some production increase in the in the fourth quarter, particularly at the end of the fourth quarter utilization ticked up slightly but I'll just I'll just say slightly.

Speaker Change: How you might expect that loan demand to evolve as the year progresses.

Bill Betsy: Yes Bill.

Bill Betsy: As Mike noted I mean, we're not building a lot of loan growth into the into the forecast, but we started the year with some momentum.

Speaker Change: So sort of a small single digit end of period kind of kind of loan growth.

Speaker Change: And similarly the.

Speaker Change: Commitments have gone up the quality of the growth is significant.

Speaker Change: What we're seeing is the benefit of our activity. So the things that we've been investing in.

Speaker Change: Middle market significant production there.

Speaker Change: Opportunities that we see in our markets, which have led conferred us recover a little bit faster than the rest of the rest of the country. So maybe if I'll just I'll just dissect that a little bit if that'll be helpful. So and the consumer side.

Speaker Change: Quality of the things that we're doing.

Speaker Change: In our in our commercial segment or in our overall C&I segments on a 50% increase in syndicated deals.

Speaker Change: Our efforts in indirect auto service finance and mortgage led to the growth there and I expect those to continue I mean, those are places where we're.

Speaker Change: Half of those are new to true us half were left lead so the things that we're focused on our working so in addition to seeing a little bit of an uptick I'm really probably most excited about the quality of what we're putting on.

Speaker Change: Leaning in.

Speaker Change: As I said in my comments also not compromising on.

Speaker Change: Price or structure or credit. So that's that's good and on the C&I side, we saw some production increase in the fourth quarter, particularly at the end of the fourth quarter utilization ticked up slightly but I'll just I'll just say slightly.

Speaker Change: The.

Accretive nature of those relationships those relationships long term in terms of client sentiment answer to your question.

Speaker Change: I think clients are certainly more expansionary.

Speaker Change: That reflects on the commitments that we've seen more increase in commitments of our clients are telling us that they are they.

Speaker Change: And similarly the.

Speaker Change: Commitments have gone up the quality of the growth is significant.

Speaker Change: They are building.

Speaker Change: For the future in terms of opportunities to invest.

Speaker Change: Middle market significant production there.

Speaker Change: I think the real linchpin or the fulcrum point will come in M&A. So I think depending on how much M&A. We see I think will be an accelerant to anything that anything that we might project and today. That's a lot of dialogue, we have to see that show up on some more action, but but a lot more dialogue.

Speaker Change: Quality of the things that we're doing.

Speaker Change: In our in our commercial segment or in our overall C&I segments at a 50% increase in syndicated deals.

Speaker Change: Around all of that.

Speaker Change: I hope that was helpful. Scott.

Speaker Change: That's terrific.

Speaker Change: You guys very much.

Great.

Speaker Change: The.

Accretive nature of those relationships those relationships long term in terms of client sentiment is your question I think.

Speaker Change: The next question comes from Ebrahim <unk> with Bank of America. Please go ahead.

Ebrahim: Good morning.

Speaker Change: Clients are certainly more expansionary I think that reflects on the <unk>.

Ebrahim: I just wanted to follow up Bill I think I heard you a couple of times call.

Speaker Change: So we've seen more increase in commitments of our clients are telling us that they are there.

Speaker Change: Particular, New Jersey, Pennsylvania, Texas.

Speaker Change: Just talk to us in terms of the growth opportunities that you see there should we expect new branch openings hiring of teams or could these be markets that are attractive even from a bank M&A perspective.

Speaker Change: They are building.

Speaker Change: For the future in terms of opportunities to invest.

Speaker Change: I think the real linchpin or the fulcrum point will come in M&A. So I think depending on how much M&A, we see I think will be an accelerate.

Speaker Change: Yes, let me sort of go into that I mean remember these are markets that we've been in for over a decade in most cases. So this isn't new in terms of markets, but it is new in terms of investment and momentum and the things that we can.

Speaker Change: Saying that anything that we might project and today, that's a lot of dialogue, we have to see that show up in some more action, but but a lot more dialogue around all of that.

Speaker Change: We can offer those market. So if you think about just the expansive nature of the products and capabilities and then we've just got great leaders, who are bringing those to the benefit better benefit of our clients.

Speaker Change: I hope that was helpful. Scott.

Speaker Change: That's terrific.

Speaker Change: You guys very much.

Great.

Speaker Change: The next question comes from Ebrahim <unk> with Bank of America. Please go.

Speaker Change: As far as new bankers, where I can see him out in those markets. We've added about 25, new bankers to our existing platforms.

Speaker Change: Go ahead.

Ebrahim: Good morning.

Speaker Change: I just wanted to follow up Bill I think I heard you a couple of times call.

Speaker Change: People are attracted to this opportunity.

Speaker Change: In particular, New Jersey, Pennsylvania, Texas, just talk to us in terms of the growth opportunity set you see there should we expect new branch openings hiring of teams or could these be markets that are attractive even from a bank M&A perspective.

Speaker Change: In terms of.

Speaker Change: Production in fee income growth I mean, they're big numbers of smaller basis, so $80, 70% kind of kind of activity.

Speaker Change: In those markets alongside.

Speaker Change: Philadelphia on Texas, we did about $3 $5 billion of loan production. So this is sort of new incremental on top of that and then Texas, specifically, we added about 5000 net new clients.

We can offer those markets. So if you think about just the expansive nature of the products and capabilities and then we've just got great leaders, who are bringing those to the benefit better benefit of our clients.

Speaker Change: So you can sort of see the see the impact of that I do think youll continue to see more expansion from us and theyre, so that'd be more to come in more dialogue. This year as we think about the <unk>.

Speaker Change: Full network not only in terms of bankers, but in branches and other types of investments, we're making in those markets.

As far as new bankers, where I can say about them in those markets. We've added about 25, new bankers to our existing platforms.

Speaker Change: And I think fairness the last part of the question I think that'll be organic I think we've got really good organic momentum. So I like the opportunities that we have there are the teams on the field are really strong.

Speaker Change: People are attracted to this opportunity.

Speaker Change: In terms of.

Speaker Change: Production in fee income growth I mean, they're big numbers of smaller basis, so $80, 70% kind of kind of activity.

Speaker Change: In areas that we're leaning into.

Speaker Change: That's helpful and then just.

Speaker Change: Thank you with that team across the southeast.

Speaker Change: And those markets alongside our Philadelphia, and Texas, We did about $3 $5 billion of loan production. So this is sort of new incremental on top of that and then Texas, specifically, we added about 5000 net new clients.

Speaker Change: Maybe remind us again and gums.

Speaker Change: Concerns around.

Speaker Change: Deflation in your market from competitors.

Speaker Change: Give us your sense of confidence level around.

Speaker Change: These two franchises have been mesh you feel good about defending market share potential.

Speaker Change: So you can sort of see the see the impact of that I do think you'll continue to see more expansion for most of them are so thats, maybe more to come in more dialogue. This year as we think about.

Speaker Change: Potentially growing the market share from you had when you think about deposits.

Speaker Change: Legacy Suntrust BB&T markets.

Speaker Change: Yes, I mean, you'll see that in the results. So you see that in the quarter I mean, we've had we've had good momentum against.

Speaker Change: Full network not only in terms of bankers, but in branches.

Speaker Change: Against the balance sheet I talked about net new.

Other types of investments, we're making in those markets.

Speaker Change: So I do feel good about not only defending but actually leaning into the markets that.

Speaker Change: That we serve in these fantastic markets.

Speaker Change: We've lost some teams that we've added some chips I mean, there. So there is a reality of out of the size company that we are.

Speaker Change: And the areas that we're leaning into.

Speaker Change: We've added a lot of great talent.

Speaker Change: That's helpful. Thank.

Speaker Change: Thank you with that team across the southeast.

Speaker Change: Our leaders have really done a fantastic job.

Speaker Change: Maybe remind us again and gums.

Speaker Change: Attracting teams to the value proposition. So the teams that we have on the field and their capacity and ability to deliver against our value proposition has never been better. So so we've added a lot.

Speaker Change: Concerns around deflation in your markets from competitors.

Speaker Change: No sense of confidence level around.

Speaker Change: These two franchises have been mesh you feel good about defending market share.

We are growing market share from here when you think about deposits.

Speaker Change: Feel really good as I mentioned in my comments, our focus is going to be on.

Speaker Change: Sort of legacy Suntrust BB&T markets.

Speaker Change: Attracting developing and retaining great teammates who can deliver against this that's true value proposition. So the answer is.

Speaker Change: Yes, I mean, you see that in the results you see that in the quarter I mean, we've had we've had good momentum against.

Speaker Change: Against the balance sheet I talked about net new.

Speaker Change: Sure.

Speaker Change: Not just a defensive and offensive position in our markets.

Speaker Change: So I do feel good about not only defending but actually leaning into the markets that.

And fully prepared and we see the results and momentum all of that.

Speaker Change: We serve in these fantastic markets.

Speaker Change: We've lost some teams that we've added some chips I mean, there. So there is a reality of out of the size company that we are.

Speaker Change: Great. Thanks.

Speaker Change: Okay.

Speaker Change: The next question comes from Matt O'connor with Deutsche Bank. Please go ahead.

Speaker Change: We've added a lot of great talent.

Speaker Change: Our leaders have really done a fantastic job.

Matt O'connor: Good morning can you guys talk about how youre thinking about targeted capital levels over time, obviously, there is still some.

Matt O'connor: Potential changes coming on the regulatory side, including CCAR, but just.

We are having.

Matt O'connor: Having all the details on that.

Matt O'connor: And the thought process and then also I guess related to that are there are other opportunities to tweak the preferred stock you had some redemptions this quarter and obviously that impacts the business going forward. Thanks.

Speaker Change: Attracting developing and retaining great teammates who can deliver against this that's true value proposition. So.

Speaker Change: The answer is no.

Matt: Good morning, Matt.

Speaker Change: Sure.

Speaker Change: Not just a defensive and offensive position in our markets.

Matt O'connor: Look we <unk>.

Matt: Recently talked about.

Speaker Change: And fully prepared and we see the results and momentum all of that.

Matt: Longer term target in the 10% area for CET one.

Speaker Change: Okay. Thanks.

Matt: I don't think we have.

Speaker Change: Okay.

Matt: An updated view on that thinking obviously, where we sit today with current rules and some expectation that there'll be changes to rules were at 11, 5%.

Operator: The next question comes from Matt O'connor with Deutsche Bank. Please go ahead.

Matt O'connor: Good morning can you guys talk about how youre thinking about targeted capital levels over time, obviously, there is still some.

Matt: If you were to adjust that number for for OCI, we're kind of.

Matt: 96 area. So we're thinking about today's measurement, we're thinking about the likelihood of a new rule.

Matt O'connor: Potential changes coming on the regulatory side, including CCAR, but just.

Matt O'connor: Hum.

Matt O'connor: Having all of the details on that just a thought.

Matt: And in think still that sort of that 10% area is is a reasonable expectation for you guys to have a look.

Matt O'connor: Process and then also just related to that are there are other opportunities to tweak the preferred stock you had some redemptions this quarter and obviously that impacts the business going forward. Thanks.

Matt: There is a lot in motion right now and I think as we see more cards turn there'll be an opportunity for us to maybe update our perspective, if that's appropriate on the prep, we did and we've done some liability management over the last couple of quarters Youll see that continue.

Matt: Good morning, Matt.

Speaker Change: Look we recently talked about.

Matt: Our longer term target.

Matt: In the 10% area for CET one.

Matt: On a total capital basis were in good shape and so.

Matt: Don't think we have.

Matt: Just capturing some of that benefit where we see opportunity.

Matt: An updated view on that thinking obviously, where we sit today with current rules and some expectation that there'll be changes to rules were at 11, 5%.

Matt: Is really sort of what you saw there.

Speaker Change: Okay. That's helpful and then 10% I assume is including the NCI.

Matt: If you were to adjust that number for for OCI, we're kind of.

Speaker Change: Yes, I think thats, a perspective that the rule will evolve again.

Matt: <unk> six area so.

Speaker Change: I think it would be difficult to speculate on.

Matt: We're thinking about today's measurement, we're thinking about the likelihood of a new rule.

Speaker Change: All the various other impacts I know theres been a lot of discussion around the impact on our <unk>.

Matt: And and things still that sort of that 10% area is is a reasonable expectation for you guys to have a look.

Speaker Change: Inflation or otherwise and but if you just were to think about OCI, especially.

There is a lot in motion right now and I think as we see more cards turn.

Speaker Change: That's that's what's driving my my guide there.

Matt: An opportunity for us to maybe update our perspective, if that's appropriate on the prep, we did and we've done some liability management over the last couple of quarters, you'll see that continue.

Speaker Change: Okay, and then just squeezing in what's the duration of the Securities book.

Speaker Change: You had some adds this quarter.

Speaker Change: Yes, so what's the current duration and Amazon flex.

Matt: On a total capital basis were in good shape and so.

Speaker Change: Obviously iff's portfolios.

Matt: Just capturing some of that benefit where we see opportunity.

Speaker Change: Sure.

Speaker Change: Just given the work we did this spring with the repositioning so on a net basis with the payers are RFS durations in the low threes or HTM portfolio, obviously has extended its closer to seven and on a net basis combined.

Matt: Is really sort of what you saw there.

Matt: Okay. That's helpful and then 10% I assume is including the NCI.

Matt: Yes, I think thats, a perspective that the rule will evolve again.

Speaker Change: Mid fours.

Matt: But I think it would be difficult to speculate on.

Speaker Change: Okay. Thank you.

Matt: All the various other impacts you know theres been a lot of discussion around the impact on our <unk>.

Operator: The next question comes from Erika Najarian with UBS. Please go ahead.

Matt: Inflation or otherwise and but if you just were to think about OCI, especially.

Erika Najarian: Hi, Good morning, I guess my first question is for Bill I know clearly there is a macro aspect to the return of lending growth.

Matt: That's that's what's driving my my guide there.

Matt: Okay, and then just squeezing in what's the duration of the Securities book.

Erika Najarian: And you have just modest assumptions in your net interest income outlook revenue outlook, but maybe could you talk to us about how.

You had some ads.

Matt: Quarter last quarter, so whats the current duration flex.

Matt: Obviously iff's portfolios.

Erika Najarian: Some of the growth might be impacted by some of the changes that you've made two leadership maybe incentive.

Matt: Sure.

Matt: Just given the work we did this spring with the repositioning so on a net basis with the payers are durations in the low threes or HTM portfolio, obviously has extended its closer to seven and on a net basis combined.

Erika Najarian: Incentive comp and the way you go to market because clearly there is a macro aspect to it but there also seems to be too.

Erika Najarian: Specific aspect, where you are sort of a margin from defense and offense and to that end.

Matt: Mid fours.

Erika Najarian: You made some announcements in terms of leadership.

Matt: Okay. Thank you.

Erika Najarian: I feel like that was received fairly well by investors, but perhaps some comments on you in terms of what message would you like us to take away from the changes in leadership that you announced this week.

Matt: The next question comes from Erika Najarian with UBS. Please go ahead.

Erika Najarian: Hi, Good morning, I guess my first question.

Erika Najarian: Yes.

Erika Najarian: A couple of different tributaries, there, but look overall and I've said this I think on the earlier question and the talent that we're investing in our.

Speaker Change: As for Bell I know clearly there is a macro aspect to the return of lending growth.

Erika Najarian: And you have just modest assumptions in your net interest income outlook our revenue outlook.

Erika Najarian: Teammates, who I think can really lead this.

Erika Najarian: Organization of the future they really know our value proposition in terms of in terms of where we're going and in terms of in terms of this week.

Erika Najarian: Could you talk to us about how.

Erika Najarian: Some of the growth might be impacted by some of the changes that you've made two leadership may be.

Bo departed our company.

Erika Najarian: Incentive comp and the way you go to market because clearly there is a macro aspect to it but there also seems to be a tourist specific aspect, where you sort of a margin from defense and offense and to that end.

Erika Najarian: Mentioned earlier great career.

Erika Najarian: Really did a lot of important things in terms of establishing the framework for the future and then we took the opportunity to take some of those responsibilities.

Speaker Change: You made some announcements in terms of leadership I feel like that was received fairly well by investors with perhaps some comments on you in terms of what message would you like us to take away from the changes in leadership that you announced this week.

Erika Najarian: Distribute them amongst some of my existing leaders so that gives them some more opportunity to grow and some more opportunities to expand their tool.

Erika Najarian: <unk>, so I feel really really really good about that.

Erika Najarian: And then as you mentioned, there's been some other key important leadership hires along the way that I think will be important parts of important parts of our future. So I don't think Theres a story there other than where you have a great franchise and we're attracting really good people to our franchise, we have existing teammates who have really expanded their toolkits.

Speaker Change: Yes, I mean, just sort of went a couple of different tributaries, there, but look overall and I've said this I think in the.

Speaker Change: As the earlier question and the talent that we're investing.

Speaker Change: Teammates, who I think can really lead this.

Speaker Change: Organizationally future they really know our value proposition in terms of in terms of where we're going and in terms of in terms of this week.

Erika Najarian: We have great leaders.

Erika Najarian: Who really understand and know and how to attract and retain really really strong talent.

Bo departed our company.

Speaker Change: And earlier great career.

Erika Najarian: And Eric maybe I'll, just add to that a little bit I mean, another dynamic obviously is.

Speaker Change: <unk> did a lot of important things in terms of establishing the framework for the future.

Erika Najarian: Post the sale of th capital position, we find ourselves in I think also gives our teammates a lot of confidence I mean, we have a very sort of pro growth agenda.

Speaker Change: And then we took the opportunity to take some of those responsibilities.

Speaker Change: Distribute them among some of my existing leaders so that gives them some more opportunity to grow and some more opportunities to expand their tool.

Erika Najarian: We're doing a lot of senior and banker hiring.

Speaker Change: <unk>, so I feel really really really good about that.

Erika Najarian: In our commercial and wholesale businesses youre seeing that pull through in terms of activity levels and were trying to activate capital across our consumer lending platforms.

Speaker Change: And then as you mentioned there have been some other key important leadership hires along the way that I think will be important parts of important parts of our future. So I don't think there's a story there other than where you have a great franchise and we're attracting really good people to our franchise, we have existing teammates who have really expanded their toolkits.

Erika Najarian: So those are very defensible.

Erika Najarian: Wrong businesses that we think have good growth potential. So I think theres just a clarity of focus on growth in the client and youre starting to see that pull through and I think thats going to.

Erika Najarian: Obviously gives us a lot of confidence as we go into the year and I think youre right I think our expectations for low single digit growth are relatively modest.

We have great leaders.

Speaker Change: Who who really understand and know and how to attract and retain really really strong talent.

Erika Najarian: So we're just focused on execution.

Speaker Change: And Eric maybe I'll, just add to that a little bit I mean, another dynamic obviously is.

Erika Najarian: And the second question is a lot more boring on slide 11 on the.

Speaker Change: Post the sale of th.

Erika Najarian: 45 billion in active risk receive fixed swaps by year end, how does that progress quarterly.

Speaker Change: Capital position, we find ourselves in I think it also gives our teammates a lot of confidence I mean, we have a very sort of pro growth agenda and that's.

Erika Najarian: From 12, 31, 24 to 12 31 25.

Speaker Change: We're doing a lot of senior and banker hiring.

Erika Najarian: Sure.

Erika Najarian: Yep.

Speaker Change: In our commercial and wholesale businesses youre seeing that pull through in terms of activity levels and were trying to activate capital across our consumer lending platforms.

Erika Najarian: Yeah Yeah.

Erika Najarian: So we're 45 in the fourth quarter that stays relatively consistent in the first quarter. So I think it ticks up maybe we've got another $1 billion effective.

Speaker Change: So those are very defensible.

Speaker Change: Strong businesses that we think have good growth potential. So I think there's just a clarity of focus on growth in the client and youre starting to see that pull through and I think thats going to.

Erika Najarian: In the second and third quarter, I think youll see a little bit of a step up in by the fourth year, peaking at 63 billion. So I think you could probably model.

Speaker Change: Obviously gives us a lot of confidence as we go into the year and I think you are right I think our expectations for low single digit growth are relatively modest.

Erika Najarian:

Erika Najarian: Almost straight line Erica between kind of $46 60, I think we see a touch more come on in the third but.

Speaker Change: So we're just focused on execution.

Erika Najarian: And that $30 billion 30 billion of payers are on for the whole year. So were net 15.

Speaker Change: And the second question is a lot more boring.

Speaker Change: 11.

Erika Najarian: Effective receive.

Speaker Change: 45 billion in active re receive fixed swaps by year end, how does that progress quarterly.

One and think of it as net 30 receive.

Erika Najarian: Effect of Q4.

Speaker Change: From 12, 31, 24 to 12 31 25.

Erika Najarian: Got it.

Erika Najarian: And just to say it as well as to get where you're going.

Speaker Change: Sure Yes.

Speaker Change: Yep.

Erika Najarian: If you think about sort of the impact on NII throughout the course of 'twenty five our expectation is it will actually be relatively stable because as you have more of the receivers coming on in kind of the mid threes.

Speaker Change: Yeah Yeah.

Speaker Change: So we're 45 in the fourth quarter that stays relatively consistent in the first quarter. So I think it ticks up maybe we've got another $1 billion effective.

Speaker Change: In the second and third quarter, I think you'll see a little bit of a step up in by the fourth year, peaking at 63 billion. So I think you could probably model.

Again at least with our baseline view is you pick up a cut sometime in the first half and again in the second half and so those factors really offset one another so we see the the hedge impact net relatively consistent throughout the course of 'twenty five and it's really not very different than what we saw in Q4 of 'twenty four.

Speaker Change:

Erika Najarian: Almost straight line Erica between kind of $46 60, I think we see a touch more come on in the third but.

And then $30 billion to $30 billion of payers are on for the whole year. So we're net 15.

Speaker Change: Thank you got it.

Erika Najarian: Okay.

Effective receive.

Speaker Change: The next question comes from Betsy <unk> with Morgan Stanley. Please go ahead.

Erika Najarian: One and think of it as net 30 receive effective Q4.

Betsy: Hi, good morning.

Erika Najarian: Got it.

Erika Najarian: And just to say it as well as to get where you're going.

Speaker Change: Good morning.

Speaker Change: I did want to just drill down into the expense outlook a little bit here.

Erika Najarian: <unk>.

Speaker Change: Maybe you could help us understand what's the driver behind the expense declines in the first quarter <unk> down 3%.

Speaker Change: Then on outlook for the full year.

Erika Najarian: Again at least with our baseline view is you pick up a cut sometime in the first half and again in the second half and so those factors really offset one another so we see the the hedge impact net relatively consistent throughout the course of 'twenty five and it's really not very different than what we saw in Q4 of 'twenty four.

Speaker Change: Grow three to three and a half expense growth only wanted to half so help us understand how you're anticipating managing to that type of outcome, especially in an environment, where capital markets is pretty strong and theres a comp payout ratio there.

Speaker Change: Yes.

Speaker Change: Thank you.

Speaker Change: Sure for the quarter.

Speaker Change: The decline is just.

Erika Najarian: Thank you got it.

We had some elevated professional fees in the fourth quarter, we had slightly higher other expense some ops losses in the fourth quarter. So we're seeing those come off.

Okay.

Betsy: The next question comes from Betsy <unk> with Morgan Stanley. Please go ahead.

Speaker Change: Hi, good morning.

Speaker Change: Good morning.

Speaker Change: Benefit.

Speaker Change: So.

Speaker Change: I did want to just drill down into the expense outlook a little bit here maybe.

Speaker Change: So is some of the change there Betsy we would expect.

Speaker Change: Maybe you could help us understand what's the driver behind the expense declines in the first quarter <unk> down, 3% and then an outlook for the full year.

Speaker Change: After after the increase in the first.

To begin to smooth out for the rest of the for the rest of the year. If you look at 25 I think your question is.

Is there an expectation that maybe.

Speaker Change: Revenue grow three to three and a half expense growth only wanted to half. So help us understand how you are anticipating managing to that type of outcome, especially in an environment, where capital markets is pretty strong and there was a comp payout ratio there.

Speaker Change: Maybe upside in capital markets might drive us higher on full year expenses I mean, certainly the.

Speaker Change: The comp correlation with certain of our businesses does tend to be more variable in wealth.

Speaker Change: In investment banking, but we think that one 5% level captures sort of the.

Speaker Change: Thank you.

Speaker Change: Sure for the quarter.

Speaker Change: The decline is just.

Speaker Change: The baseline outlook that we're providing to you we'd be delighted to see revenue exceeded our expectations based on higher market levels activity levels and to see our expense outlook.

We had <unk>.

Speaker Change: Elevated professional fees in the fourth quarter, we had slightly higher other expense some ops losses in the fourth quarter. So we're seeing those come off.

Speaker Change: Drift with it.

Speaker Change: That benefit.

Speaker Change: Yes.

Speaker Change: No.

Speaker Change: Sure.

Betsy: So is some of the change there Betsy we would expect.

Speaker Change: Just to maybe add in that.

Speaker Change: <unk>.

Speaker Change: In that.

Betsy: After after the increase in the first.

Speaker Change: Our existing existing guidance.

Speaker Change: We've had really good consistent.

Betsy: To begin to smooth out for the rest of the for the rest of the year. If you look at 25 I think your question is.

Speaker Change: Low double digit kind of performance in investment banking and I expect that to continue. So this is built into this.

Betsy: Is there an expectation that.

And we also continue to kind of efficiency. So those are offset against those so think about this year. We had the best year in investment banking and we were down 40 basis points of expenses. So.

Betsy: Maybe upside in capital markets might drive us higher on full year expenses I mean, certainly the.

Betsy: The comp correlation with certain of our businesses does tend to be more variable in wealth and.

Speaker Change: This is.

Betsy: In investment banking, but we think that one 5% level captures sort of the.

Speaker Change: An environment, where we continue to have efficiencies against the investment.

Speaker Change: All oriented towards that.

Betsy: The baseline outlook that we're providing to you we'd be delighted to see revenue.

Speaker Change: Consistency and the efficiency ratio.

Betsy: Our expectations based on higher market levels activity levels and to see our expense outlook.

Speaker Change: And creating and sustaining positive operating leverage so we don't want this to be a one time thing we want this to be a sustainable.

Betsy: Rift with it.

Betsy: Got it.

Speaker Change: Platform so our teams.

Just to maybe add to that.

Speaker Change: Look at.

Speaker Change: The investment side on the savings side with the same level of intensity.

Betsy: That.

Betsy: That <unk>.

Betsy: And their existing existing guidance.

Speaker Change: Yes, yes, yes.

Betsy: We've had really good consistent.

Speaker Change: Totally get it then.

Speaker Change: A significant amount of operating leverage here.

Betsy: Low double digit kind of performance in investment banking and I expect that to continue. So this is built into this.

Speaker Change: One five percentage points at the low end of the range of two percentage points. So I was wondering if there is.

Betsy: And we also continue to kind of efficiency.

Betsy: So those are offset against those so think about this year.

Speaker Change: And the way.

Betsy: The best year in investment banking, and we were down 40 basis points of expenses. So.

Speaker Change: Recouping prior investments spend.

Speaker Change: Tech getting turned off et cetera, thats, helping keep this expense outlook at one 5% and keeping it from creeping up to two.

Betsy: This is a this is.

Betsy: An environment, where we continue to have efficiencies against the investment.

Betsy: All oriented towards that.

Speaker Change: Our two and a half.

Betsy: Consistency on the efficiency ratio.

Speaker Change: A lot of a lot of as you think about the strategy that we've talked about a lot of these are investments that we've already made.

Betsy: Creating and sustaining positive operating leverage so we don't want this to be a one time thing we want this to be a sustainable.

Speaker Change: If you're talking about the merger so we create a lot of opportunities in terms of.

New products and new capabilities exist.

Betsy: Platform so our teams.

Speaker Change: Consolidated platforms et cetera et cetera.

Betsy: Look at the.

On the investment side on the savings side with the same level of intensity.

Speaker Change: The crux of our strategic focus is expanding with existing clients. These are products and capabilities in markets in places, where we've already invested and it's leveraging that investment. So it has by its nature.

Yes, yes, I totally get it in.

Betsy: Significant amount of operating leverage here.

Betsy: One five percentage points at the low end of the range of two percentage points. So I was wondering if there is much in the way of.

Speaker Change: High return sort of very high ROA kind of components to it.

Speaker Change: And really good leverage.

Betsy: Recouping prior investments spend.

Great. Thanks, so much.

Betsy: Tak getting turned off et cetera, that's helping keep this expense outlook at one 5% and keeping it from creeping up to two.

Yeah.

Speaker Change: The next question comes from John <unk> with Evercore. Please go ahead.

Betsy: Two and a half.

John: Good morning.

Betsy: A lot of a lot of as you think about the strategy. We've talked about a lot of these are investments that we've already made.

Speaker Change: John.

Speaker Change: On the just real quick back to the expense guide.

Betsy: You're talking about the merger so we created a lot of opportunities in terms of new.

Speaker Change: Agree lower than than.

We would have forecasted it could you just remind us what are the most material areas of investment.

Betsy: New products and new capabilities exist, new consolidated platforms et cetera et cetera.

Speaker Change: That you flagged what are the most meaningful better better impacting your expense outlook right now and then given where this guide is.

Betsy: The crux of our strategic focus is expanding with existing clients. These are products and capabilities in markets in places, where we've already invested and it's leveraging that investment. So it has by its nature hi.

Speaker Change: Which is notably reasonable like do you have flexibility if revenue was weaker.

Speaker Change: Given this this guide where it stands now.

Betsy: High returns very high ROA kind of components to it.

Speaker Change: Yes, so the primary investments on the expense side or some of the things we've talked about so the related some are directly related to the revenue sides of investment banker is one we've talked about.

Betsy: And really good leverage.

Speaker Change: Great. Thanks, so much.

Yeah.

Speaker Change: The next question comes from John <unk> with Evercore. Please go ahead.

Speaker Change: Direct direct correlation.

Speaker Change: So the continued investment and risk infrastructure as we build out our company were a bigger company than we are.

John: Good morning.

Speaker Change: John.

Speaker Change: On the just real quick back to the expense guide.

Speaker Change: To grow so we have to have a strong risk infrastructure strong cyber security structure. So those will continue to be continued.

Speaker Change: Agree lower than we.

Speaker Change: We would have forecasted it could you just remind us what are the most material areas of investment.

Speaker Change: Continue to grow and investments.

Speaker Change: And then the toggles, we talked about the toggle on the upside and the tag along on the downside we have a commitment to positive operating leverage so Mike.

Speaker Change: That you flagged what are the most meaningful better better impacting your expense outlook right now and then given where this guide is.

Speaker Change: Mike talked about earlier for toggle on the upside.

Speaker Change: Which is notably reasonable like do you have flexibility if revenue was weaker.

Speaker Change: That's one opportunity and if we have to toggle on the downside, we know how to do that as well.

Speaker Change: Given this guide where it stands now.

Speaker Change: Yes, John I would just add I mean, we're hiring.

Speaker Change: We're hiring talent across the board right now so whether it be in wealth or commercial or corporate and investment banking, we're hiring premier bankers, we're hiring area leaders, we're hiring people to go drive our growth agenda.

Speaker Change: Yes, so the primary investments on the expense side or some of the things we've talked about so the related some are directly related to the revenue side sort of investment banks. It is one we've talked about.

Speaker Change: Direct direct correlation also the continued investment and risk infrastructure as we build out our company were a bigger company than we are.

Speaker Change: We're also investing in products and we've talked a lot about the opportunity. We believe we have for example in treasury.

Bill Rogers: We're adding we've invested in our trading capabilities in our investment Bank, where you heard bill talk about.

Speaker Change: Turning to grow so we have to have a strong risk infrastructure strong cyber security structure. So those will continue to be continue to be growing investments.

Speaker Change: Deepening our penetration in some of our markets, where we think we have an opportunity to do so so I think those are all areas, where youre seeing some incremental growth, but just recall and this is for Betsy to like we're giving you a net number I mean the work we were doing in 'twenty four to manage expenses and drive efficiency continues in 2025, So we're looking at sourcing where.

Speaker Change: And then the toggles, we talked about the toggle on the upside and the tag along the downside we have a commitment to positive operating leverage so.

Speaker Change: Mike talked about earlier for toggle on the upside.

That's one opportunity and if we have to toggle on the downside, we know how to do that as well.

Speaker Change: Looking at all the various levers you would expect us to be focused on to drive that outlook.

Speaker Change: Yes, John I would just add I mean, we're hiring.

Speaker Change: We're hiring talent across the board right now so whether it be in wealth or commercial or corporate or investment banking, we're hiring premier bankers, we're hiring area leaders, we're hiring people to go drive our growth agenda.

Speaker Change: And look just to say it as well just with a focus on operating leverage we feel we feel pretty good about the revenue outlook. We provided we don't think we've got heroic loan growth.

Speaker Change: And our outlook.

Speaker Change: We've got a pretty good curve and so we feel feel pretty pretty good as we turn turned the page on 24 move into 'twenty five.

Speaker Change: We're also investing in products and we've talked a lot about the opportunity. We believe we have for example in treasury.

Speaker Change: Great Alright, Thanks, Mike and then just separately.

Speaker Change: We're adding we've invested in our trading capabilities in our investment bank.

The capital front here.

Hear you in terms of the 10% CET one target you've already guided to about another quarter of 500 million in buybacks in the first quarter is that a reasonable pace since we look over the remainder of the year just given your current capital position or could that slow a bit if loan growth picks up more meaningfully.

Bill Betsy: You heard Bill talk about.

Bill Betsy: Deepening our penetration in some of our markets, where we think we have an opportunity to do so so I think those are all areas, where youre seeing some incremental growth, but just recall and this is for Betsy to like we're giving you a net number I mean the work we were doing in 'twenty four to manage expenses and drive efficiency continues in 2025. So we're looking at sourcing we're looking.

Speaker Change: And your mom.

Speaker Change: Modest assumption at this point.

Bill Betsy: At all of the various levers you would expect us to be focused on to drive that outlook.

Speaker Change: John the good news is we've got ample capital to sort of stay at that pace.

Bill Betsy: And look just to say it as well just with a focus on operating leverage we feel we feel pretty good about the revenue outlook. We provided we don't think we've got heroic loan growth.

Speaker Change: I think the unique position that we can grow and distributed capital. So I think we will right now.

Speaker Change: Let's call. It short term to medium term I think we anticipate staying at that pace.

Bill Betsy: And our outlook.

Bill Betsy: We've got a pretty good curve and so we feel feel pretty pretty good as we turn turn the page on 24 move into 'twenty five.

Speaker Change: In terms of the share buyback.

We'd love to have dramatic loan growth that would change that.

Speaker Change: Great Alright, Thanks, Mike and then just separately to the capital front I.

Speaker Change: But the good news is that we can we can accommodate a good level of loan growth and we can accommodate share buybacks. So I think we're in a really good position to.

Speaker Change: Hear you in terms of the 10% CET one target you've already guided to about another quarter of 500 million in buybacks in the first quarter is that a reasonable pace since we look over the remainder of the year just given your current capital position or could that slow a bit if loan growth picks up more meaningfully.

Speaker Change: Ensure the future of our company and reward shareholders along the way.

unknown: Got it okay, great. Thanks Bill.

Speaker Change: The next question comes from Paul Martinez.

Speaker Change: HSBC. Please go ahead.

Speaker Change: And your mom.

Speaker Change: A modest assumption at this point.

Paul Martinez: Hey, good morning, guys.

Paul Martinez: So first of all I just wanted to clarify.

Speaker Change: John the good news is we've got ample capital to sort of stay at that pace.

The revenue guidance to 5% I think.

Speaker Change: I think the unique position that we can grow and distributed capital. So I think we will right now.

Paul Martinez: Noninterest income guidance of low single digits, which.

Paul Martinez: As soon as one of the 3%.

Let's call. It short term to medium term I think we anticipate staying at that pace.

Paul Martinez: Ply NII growth is a little bit above that range is that right.

Speaker Change: In terms of the share buyback.

Paul Martinez: The obvious but I just wanted to clarify nonetheless.

We'd love to have dramatic loan growth that would change that.

<unk> got it right.

Paul Martinez: Maybe a couple of things on that the NII guide and our outlook is better headline than fees.

Speaker Change: But the good news is that we can we can accommodate a good level of loan growth and we can accommodate share buybacks. So I think we're in a really good position to.

Paul Martinez: But I did mentioned in the prepared remarks, and it's worth mentioning again.

Speaker Change: Ensure the future of our company and reward shareholders along the way.

Paul Martinez: The transactions that we completed last year.

Paul Martinez: The sale of <unk> and the related transition services agreement that we entered into in which generated at least in 'twenty for some temporary fee income and then the sale of Sterling, which is in the 24 numbers, but of course wouldn't be in the 25 numbers that does impact that headline fee income outlook right, So where we're guiding with those.

Got it okay, great. Thanks Bill.

Paul Martinez: The next question comes from Paul Martinez.

Speaker Change: HSBC. Please go ahead.

Paul Martinez: Hey, good morning, guys.

Paul Martinez: First of all I just wanted to clarify.

Paul Martinez: The revenue guidance.

Paul Martinez: <unk>.

Paul Martinez: 5% I think.

Paul Martinez: Items in 24, so I think if you were to if you were to exclude those those those items that won't reoccur in 25, our fee outlook would actually like on the core businesses be more like a mid single digit outlook.

Paul Martinez: Noninterest income guidance low single digits, which.

Paul Martinez: I assume is 1% to 3%, which would imply NII growth is a little bit above that range is that right.

Paul Martinez: The obvious but I just wanted to clarify nonetheless.

Speaker Change: Got it to on a core basis, it's more mid single digits. Okay.

Paul Martinez: Got it right.

Paul Martinez: Maybe a couple of things on that the NII guide and our outlook is better headline than fees.

Paul Martinez: And.

Paul Martinez: I guess follow up question.

Paul Martinez: Fixed rate loans 42 billion running off at a yield.

Paul Martinez: But I did mentioned in the prepared remarks, and it's worth mentioning again.

Paul Martinez: 636, which is higher than the portfolio yield seems to imply some of the higher margin.

Paul Martinez: The transactions that we completed last year.

Paul Martinez: Loans rolling off.

Paul Martinez: How do we think about the new money rates on on that $2 billion or what kind of an incremental spread or are we getting there.

Paul Martinez: I think.

Paul Martinez: On a.

Paul Martinez: We're not changing our mix, we're not changing our risk appetite. So I don't want to imply that there is a change in like the core spread but if youre looking at the run on yield versus the run off yield I think <unk> got with today's curve 100 basis points or better run on rate for the fixed rate loans versus the run off rate.

Paul Martinez: <unk>.

Items in 24, so I think if you were to if you were to exclude those those those items that won't reoccur in 25, our fee outlook would actually like on the core businesses be more like a mid single digit outlook.

Paul Martinez: Got it to on a core basis, it's more mid single digits. Okay.

Paul Martinez: And on the bonds that's better.

Paul Martinez: <unk>.

Paul Martinez: Okay.

Paul Martinez: And follow.

Follow up question.

Paul Martinez: Got it.

Doing the math, it's like 200 million more or less on.

Paul Martinez: Fixed rate loans $42 billion running off at a yield of.

Paul Martinez: On that $42 billion annualized.

Paul Martinez: 636, which is higher than the portfolio yield seems to imply some of the higher margin.

Paul Martinez: Okay. That's.

Paul Martinez: That's helpful. Thank you.

Loans rolling off.

Paul Martinez: Okay.

Paul Martinez: How do we think about the new money rates on $2 billion, what kind of incremental spread are we getting there.

Speaker Change: At the time constraints, please limit yourself to one question.

Speaker Change: The next question comes from Mike Mayo with Wells Fargo. Please go ahead.

Paul Martinez: I think.

Paul Martinez: On a.

Paul Martinez: We're not changing our mix, we're not changing our risk appetite. So I don't want to imply that there is a change in like the core spread but if youre looking at the run on yield versus the run off yield I think you've got with today's curve 100 basis points or better run on rate for the fixed rate loans versus that run off rate.

Speaker Change: Alright.

Speaker Change: A couple of years there during the merger you lost some market share in the southeast and now Youre going you've been on more offense and.

Speaker Change: I was surprised to hear you mentioned, Pennsylvania, and New Jersey, when it looks like you have so much opportunity in the southeast.

Paul Martinez: And on the bonds that's better.

Speaker Change: I'm trying to figure out why you mentioned those markets, specifically now whats changed and what are the mechanics in terms of turning the corner and.

Paul Martinez: Okay.

Paul Martinez: Got it.

Paul Martinez: Doing the math, it's like 400 million more or less on.

Paul Martinez: On that 42 billion annualized.

Speaker Change: In terms of that core deposit market share, whether it's in the southeast or Pennsylvania, New Jersey, and I guess, it's all included in your expense guide. So if youre doing a lot more marketing or branch goes or hiring at all on that expense number with regard, but maybe if you could just unpack that a little bit how you get from the investments to the X.

Paul Martinez: Okay.

Paul Martinez: That's helpful. Thank you.

Paul Martinez: Okay.

Speaker Change: This is the time constraints, please limit yourself to one question.

Speaker Change: The next question comes from Mike Mayo with Wells Fargo. Please go ahead.

Speaker Change: <unk> have better deposit share in those markets. Thank you.

Speaker Change: Alright.

Speaker Change: A couple of years there during the merger you lost some market share in the southeast and now Youre going you've been on more offense and.

Yes, Mike you saw some above.

Deposit deposit growth this quarter and some of the momentum that we see on that so where we are in.

Speaker Change: When you do a merger.

Speaker Change: I was surprised to hear you mentioned, Pennsylvania, and New Jersey, when it looks like you have so much opportunity in the southeast.

Speaker Change: We've exceeded what people have told us so.

Speaker Change: Market share challenges are from our merger.

Speaker Change: Trying to figure out why you mentioned those markets specifically now what's changed and what are the mechanics in terms of turning the corner and.

Speaker Change: And we're I feel like a really strong pivot in those markets in terms of product capability.

Speaker Change: And opportunities that exist there. So I think we're making good progress on that front and then you mentioned is or why do you mentioned, Texas and why do you mentioned these other markets. They're also our markets. So these are not these are places where we've been for a long time and we're continuing to expand.

Speaker Change: In terms of that core deposit market share, whether it's in the southeast or Pennsylvania, New Jersey, and I guess, it's all included in your expense guide. So if youre doing a lot more marketing our branch goes or hiring at all in that expense number with regard, but maybe if you could just unpack that a little bit how you get from the investments to the X.

Speaker Change: And I mentioned those just in the sense of there's also opportunities to gain really disproportionately in quickly so not only defend and grow but also the offensive and grow in.

Speaker Change: <unk> have better deposit share in those markets. Thank you.

Speaker Change: Yes, Mike you saw some above.

Speaker Change: In other markets on the incremental side. So just it's just a function of trying to paint the whole picture of what of what true what <unk> looks like.

Speaker Change: Deposit deposit growth this quarter and some of the momentum that we see on that so.

We are in.

When you do a merger.

Speaker Change: I guess im just from your decades of experience Bill I mean, our the banking battles heating up it just seems like everybody is going into everybody else's backyard.

Speaker Change: We've exceeded what people have told us so.

Speaker Change: The market share challenges are from our merger.

Speaker Change: And we're I feel like a really strong pivot in those markets in terms of product capability.

<unk>.

On the other hand, the crazy they are off the street from.

Speaker Change: Before the financial crisis, so what's the competitive dynamics right now as intense as it good is it rational.

Speaker Change: Yes, since you pointed to my decades of experience.

Speaker Change: Sure.

Speaker Change: The decades of my experience have always been in really good markets and those markets have always been really competitive so.

Speaker Change: And I mentioned those just in the sense of there's also opportunities to gain really disproportionately in quickly so not only defend and grow but also be offensive and grow in.

Speaker Change: I don't think its particularly different.

Speaker Change: Since that they've always been.

Speaker Change: Really competitive.

Speaker Change: In other markets on the incremental side. So just it's just a function of trying to paint the whole picture of what of what true.

Speaker Change: We have smart players in our markets I think that's an advantage because we are one of the smart players as well.

Speaker Change: <unk> looks like.

Speaker Change: I think our capacity and ability to compete has.

Speaker Change: I guess im just.

Speaker Change: From your decades of experience Bill.

Speaker Change: Has never been better so I think we're positioned really well, but good markets are highly competitive I mean, that's that's.

Speaker Change: Our the banking battles heating up it just seems like everybody is going into everybody else's backyard.

Speaker Change: The advantage of being at a man.

Speaker Change: To compete.

Speaker Change: On the other hand, the crazy they are off the street from.

Speaker Change: That grow disproportionately faster so you can be competitive in a.

Speaker Change: Before the financial crisis so.

Speaker Change: Our market and continue to grow and Thats and Thats, what I think we see in terms of in terms of that opportunity.

Speaker Change: What's the competitive dynamics right now as intense as it good is it rational.

Speaker Change: Yes, since you pointed to my decades of experience.

Speaker Change: I think I don't I don't think we see.

Speaker Change: So.

Yes, you used the term, but I don't think we see crazy pricing I don't think we see unreasonable competition as I said, we have really smart large competitors.

Speaker Change: The decades of my experience have always been in really good markets and those markets have always been really competitive so.

Speaker Change: I don't think its particularly different.

Speaker Change: Okay.

Speaker Change: Have a really strong value proposition to win and.

The sense that they have always been really competitive we have smart players in our markets I think that's an advantage because we're one of the smart players as well.

Speaker Change: And you see that you'll see that our net new is like one of the primary examples, but you see our capacity to win against those competitors.

Mike: Alright. Thank you, yes, thanks, Mike.

Speaker Change: I think our capacity and ability to compete.

Speaker Change: The last question today comes from Gerard Cassidy with RBC. Please go ahead.

Speaker Change: Has never been better so I think we're positioned really well, but good markets are highly competitive I mean, that's the that's the advantage of being item then.

Gerard Cassidy: Hi, Bill Hi, Mike.

Speaker Change: Can you guys share with us.

Speaker Change: That grow disproportionately faster. So you can be competitive in our market and continue to grow and Thats and Thats. What I think we see in terms of in terms of that opportunity. So I don't I think I don't I don't think we see.

Speaker Change: <unk> had real success in the investment banking business and I think it represents now about 21% of your fee revenues in 2024 up from 15% in 2023 and as a percentage of total revenues. It's now about 9% versus about 4% can you share with us.

I guess you used the term, but I don't think we see crazy pricing I don't think we see unreasonable competition as I said, we have really smart large competitors.

Speaker Change: Where you see that going are you comfortable at these levels relative to the total pie or can you grow with further where it could get to 15% maybe of total revenues.

Speaker Change: We have a really strong value proposition to win.

Speaker Change: You see that you'll see that our net new is like one of the primary examples, but you see our capacity to win against those competitors.

Speaker Change: Kind of curious on how you are looking for the growth opportunities.

Speaker Change: Yes.

Speaker Change: Alright. Thank you, yes, thanks, Mike.

Speaker Change: This.

Speaker Change: Thank you for the acknowledgment of the strength of the investment banking business. This has been an organic build over a long periods of time, we have.

Speaker Change: Our last question today comes from Gerard Cassidy with RBC. Please go ahead.

Speaker Change: Had sort of a consistent.

Speaker Change: Hi, Bill and Mike.

Speaker Change: Can you guys share with us.

Speaker Change: Low double digit kind of CAGR over time, and I think we can continue to be at that pace. So I feel really good about that.

Speaker Change: You've had real success in the investment banking business and I think it represents now about 21% of your fee revenues in 2024 up from 15% in 2023 and as a percentage of total revenues.

Speaker Change: As we've talked about in the past our business also is really predicated on our middle market focus and it's predicated on a focus on our existing client base. So I'll also say the opportunity for less volatility over time, because we're focused on.

Speaker Change: Now about 9% versus about 4%.

Speaker Change: Can you share with us where you see that going are you comfortable at these levels relative to the total pie or can you grow with further where it could get to 15% maybe of total revenues or NIM.

Speaker Change: Our clients and our capability to.

Speaker Change: To expand into that.

Speaker Change: Really good return characteristics. So we also run the business well, it's an efficient business.

Speaker Change: It's a really smart user of capital in terms of in terms of its.

Speaker Change: I'm kind of curious on how you are looking for the growth opportunities.

Speaker Change: Yes.

Speaker Change: That strategy.

Speaker Change: This.

Speaker Change: So I think we can continue to grow this business has been a part of it. We also want the rest of the business payments wealth all of those other components to also grow.

Speaker Change: Thank you for the acknowledgment of the strength of the investment banking business. This has been an organic build over a long periods of time.

Speaker Change: So we don't get disproportionate in any place because of that diversity of fee income and that diversity of balance sheet are also important to the overall overall equation. So.

Speaker Change: We have had sort of a consistent.

Speaker Change: Low double digit kind of CAGR over time, and I think we can continue to be at that pace. So I feel really good about that.

Speaker Change: A little bit steady as she goes.

Speaker Change: We're not putting the governor on that business, because we see the opportunities and we like the way that it's built in terms of insufficient operation really good use of capital.

Speaker Change: And strategic focus against trust as a whole.

Speaker Change: Very good and I forgot to mention.

Speaker Change: Our clients and our capability to to.

Clark: Clark is sitting in the room congratulations on your retirement good luck. Thank you Bill.

Speaker Change: Expanded interval.

<unk>.

Speaker Change: Really good return characteristics. So we also run the business well, it's an efficient business.

Clark: Thanks for that thanks for that great comment about our bike park.

Clark: Well deserved as you as you note.

Speaker Change: It's a really smart user of capital in terms of in terms of its <unk>.

Speaker Change: Our strategy.

Speaker Change: So I think we can continue to grow this business as being a part of it. We also want the rest of the business payments well if all of those other components to also grow.

Clark: This concludes our question and answer session I would like to turn the conference back over to Brad Nelson for any closing remarks.

Speaker Change: Okay. Thank you that completes earnings call do you have any additional questions. Please feel free to reach out to the Investor Relations team. Thank you for your interest interest and we hope you have a great day Betsy you may now disconnect the call.

Speaker Change: So we don't get disproportionate in any place because of that diversity of fee income and that diversity of balance sheet are also important to the overall overall equation. So.

Speaker Change: A little bit steady as she goes.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker Change: We're not putting a governor on that business, because we see the opportunities and we like the way that it's built in terms of insufficient operation really good use of capital.

And strategic focus against trust as a whole.

Speaker Change: Very good and I forgot to mention.

Clark: Clark is sitting in the room congratulations on your retirement good luck. Thank you Bill.

Speaker Change: Thanks for that thanks for that great comment about our bike park well deserved as you as you note.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Brad Nelson for any closing remarks.

Speaker Change: Okay. Thank you that completes earnings call. If you have any additional questions. Please feel free to reach out to the Investor Relations team. Thank you for your interest interest and we hope you have a great day you may now disconnect the call.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Q4 2024 Truist Financial Corp Earnings Call

Request a DemoDemo

TFC

Truist Financial

Earnings