First Citizens BancShares, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the first Citizens Bank Shares third quarter 2022 earnings conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you need to press star one on your telephone keypad. If you require operator assistance during the program, please press star then zero. As a reminder, today's conference is being recorded. I'd now like to introduce the host of today's conference call, Ms. Deanna Hart, Senior Vice President of Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us for First Citizens Bank's third quarter 2022 earnings call. It is my pleasure to introduce our Chairman and Chief Executive Officer, Frank Holdings, as well as our Chief Financial Officer, Craig Nix. who will provide an update on our third quarter 2022 performance and share our outlooks for the fourth quarter and fiscal year 2023. We are pleased to have several other members of our leadership team in attendance with us today, who will be available to participate in the question and answer portion of the call if needed. During the call, we will be referencing our investor presentation, which you can find on our investor relations website. An agenda for today's presentation is on page two of these materials. Following the completion of the presentation, we'll be happy to take questions. As a reminder, our comments will include forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations. We assume no obligation to update such statements. These risks are outlined for your review on page three of the presentation. We will also reference non-GAAP financial measures in the presentation. Reconciliations of these measures against the most directly comparable GAAP measures are available in the appendix. Finally, First Citizens is not responsible for and does not edit nor guarantee the accuracy of our earnings teleconference transcripts provided by third parties. With that, I will turn it over to Frank.

Thank you, Deanna, and good morning, everyone. Good morning. We appreciate all of you joining us today. We hope this call will be informative and give you a sense of the success we enjoyed through the third quarter and the path we're on moving forward. We announced another quarter of solid financial results this morning, and I'm confident about both our trajectory moving forward and our ability to continue delivering long-term shareholder value. While we face some economic headwinds and the potential for a recession, We've not seen meaningful signs of stress in our credit portfolio to date. We're encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates. During the quarter, loan growth momentum continued and was broad across our lines of business. The strong quality loan growth we experienced this quarter in tandem with the positive asset repricing we have experienced in the rising rate environment helped produce another quarter of strong net interest income growth and positive operating leverage. Starting on page five, I'll highlight the 10 takeaways for the quarter, and Craig will take a deeper look at our third quarter results and prospects moving forward in the next sessions of this presentation. First, we're pleased to announce that we have repurchased 99.4% of the 1.5 million shares of Class A common stock authorized by our board for repurchase as of the market close yesterday. The 1.5 million shares represents approximately 10% of the Class A common shares, or 9.4% of the total common shares outstanding prior to the repurchase. This repurchase program allowed us to return excess capital to our shareholders and sets the foundation to deliver even stronger returns in the coming quarters given a more optimal capital level. The second one, we continue to focus on merger optimization efforts and remain confident that we will achieve our cost savings goal of $250 million. We estimate that we will come in slightly below our merger cost estimate of $445 million. Number three, pre-provision net revenue continued to be a bright spot, growing by 21.3% over the second quarter, indicative of significant margin expansion, solid fee income generation, and good expense management. Fourth, net interest margin expanded by 36 basis points during the quarter due to higher interest rates and strong loan growth. only partially offset by higher funding costs and borrowings. Five, expense management continues to be a focus, and we achieved an efficiency ratio during the quarter of 53%. We're especially pleased with our efficiency ratio given the inflationary headwinds which are impacting the industry and market as a whole. Six, for the second consecutive quarter, we've had a provision build related to deterioration in CECL macroeconomic forecast, in addition to maintenance reserves to cover loan growth and net charge-offs. Seven, despite a larger provision expense compared to last quarter, credit quality remains excellent. The net charge-off ratio during the quarter remained below non-stressed historical averages and decreased compared to the linked quarter. Further, our non-accrual ratio declined during the quarter. We remain pleased with our loan portfolio performance. And as covered in detail on last quarter's call, our portfolios are underwritten to endure times of economic stress. With that said, we continue to monitor the potential impacts of higher rates, inflation, a possible recession, and geopolitical instability on our loan portfolio. Eight, loans grew at an annualized rate of 12% during the quarter, marking another strong quarter. Loan growth was broad in both commercial and the general bank business segments and was an output of the long-term business development efforts from our lenders and our continued emphasis on adding staff in areas that can support quality growth. Nine, While we continued to see a decline in total deposits, we were pleased that the rate of decline was lower than in the prior quarter. As expected, we experienced further attrition in higher-cost acquired money market deposits. The decline was partially offset by growth in our direct bank as we looked to remain competitive in the online space. Ten. As a result of strong loan growth and reduced deposits, we did add $3.9 billion in wholesale borrowings during the quarter. Despite the change in our funding mix, we feel good about our current and pro forma liquidity position. Turning to page six, we provide more detail on our share repurchase plan progress to date. we were able to repurchase shares faster than anticipated, allowing us to quickly right-size our capital closer to the target operating range. We estimate that the repurchases will be accretive to 2023 EPS by approximately 10%. Further, while there is initial dilution to TBV in the third quarter of $15.75, we estimate this will be earned back in less than three years. For now, we're pausing our repurchase plan as we monitor loan growth and the macroeconomic environment moving forward. We plan to submit our capital plan in the second quarter of 2023. After consideration of that plan, it will be our intent to return any excess capital over our internal targets to shareholders in the form of share repurchases beginning in the second half of next year. With that, I'll turn it over to Craig to expand on our third quarter financial results and share our financial outlook moving forward. Craig?