First Citizens BancShares, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the First Citizens Bank Shares Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star followed by one on your telephone to add. If you require operator assistance during the programme, please press star, then zero. As a reminder, today's conference is being recorded. I would now like to introduce the host of this call, Ms. Deanna Hart, Senior Vice President of Investor Relations. You may begin.

Good morning, everyone. Welcome to our third quarter earnings call. Our Chairman and Chief Executive Officer, Frank Holding, and Chief Financial Officer, Craig Nix, will provide third quarter business and financial updates today. During the call, we will reference our investor presentation, which you can find on our website. 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 you on page three. We will also reference non-GAAP financial measures. Reconciliations of these measures against the most directly comparable GAAP measures can be found in section five of the presentation. Finally, First Citizens is not responsible for and does not edit nor guarantee the accuracy of earnings transcripts provided by third parties. I will now turn it over to Frank.

Thank you, Deanna. And good morning, everyone. Starting on page five, despite a volatile external market, we've delivered another solid quarter of financial results marked by strong revenue growth and disciplined expense management. Our focus continues to be on growing our core lines of business, maintaining our safety and stability through strong capital, credit, and liquidity risk management, and delivering long-term tangible value growth to our shareholders. This morning we reported earnings per share of $55.92, excluding items noted in the presentation on page 52. This exceeded our expectations and represented a 6% increase over the sequential quarter. Return metrics were also strong, improving over the sequential quarter despite an increase in credit reserves and capital levels. These return metrics were supported by a net interest margin that remained over 4% and an adjusted efficiency ratio of 46%. Deposits continued to be a huge focus for us during the quarter, with period-end deposits up 14% on an annualized basis or 3% sequentially. In addition to deposit growth, our commercial and general bank segments posted solid loan growth. Our liquidity and capital positions remain strong and stable driven by our focus on core deposit gathering and a conservatively managed investment portfolio. We also remain focused on managing credit risk prudently. We did experience an increase in net charge-offs this quarter with the majority of the charge-offs related to investor-dependent loans in the SVB portfolio. While we continue to monitor this portfolio closely, given some of the macroeconomic headwinds facing the innovation economy, we remain encouraged by the resiliency of our clients in the face of elevated inflation and rising interest rates. On page six, we continue to make great progress in integrating SEB, and our initial stabilization efforts are complete. As a result of our continued focus on and outreach to our clients, we continue to see stabilization in loan and deposit balances during the quarter. We have materially completed our strategic assessment work. Currently, we are leveraging the insights from this work to identify opportunities to grow our market position in an innovation economy. Finally, we remain focused on regulatory readiness through our large bank program and a dedicated team of leaders and associates are ensuring we have a framework to meet heightened regulatory expectations and ensure sound business practices for large financial institutions. On page seven, our strategic priorities have not changed and are included here for your reference. On page eight, we provided tangible examples of supporting our clients in the innovation economy. We remain excited by the green shoots we're seeing as new and returning business comes to SVB six months post-acquisition. For example, during the third quarter, global fund banking originations increased by 18% compared to the sequential quarter, and its pipeline has grown over 70%. We are committed to building on and investing in the SVB business to preserve long-term client relationships and to generate new business with founders, entrepreneurs, innovation leaders, and venture capital and private equity clients. During the quarter, our commitment was exemplified when we launched a nationwide Yes SVB campaign to increase awareness that SVB is open for business and that we remain dedicated to supporting the innovation economy. We are also investing in new capabilities, including the rollout, the continued rollout of SVB Go, an online digital banking platform to support our clients' needs by facilitating easier interactions, simple, secure, and intuitive. The platform is designed for how our founders and innovation leaders run their businesses online, rather than how banks operate. Looking forward, we acknowledge the headwinds facing the innovation economy. The muted fundraising and investment pace, coupled with limited exit opportunities, continues to put pressure on innovation companies across all sectors and stages of development. This is resulting in some bulky charge-offs, which Craig will speak to in more detail during his comments. Historically, 12 to 18 months into a down cycle, VC investment reaches a floor, after which valuations normalize and VC firms come back into the market. While U.S. VC firms' investment levels may continue to fall in the near term, we believe the long-term outlook remains positive, primarily related to tailwinds that remain intact despite the most recent dislocation. The innovation economy is stronger than in past cycles, as it grew at 2.4 times the rate of the overall U.S. economy between 2000 and 2021. And the COVID-19 pandemic has only accelerated digital adoption. Further, the innovation economy was 3.5 times larger in 2020 than in 2000. While we do not believe we are likely to see 2021 levels of valuation and investment for some time, if ever, we know that there is substantial dry powder waiting to be invested, which gives us confidence in the long-term prospects of the innovation economy. Now turning to page nine, we have exciting news in our wealth division. Since 2013, we've focused on on our wealth management capabilities and have made significant progress growing organically. As a result, our private banking, brokerage, and trust services have become a significant revenue source for us, and we've recently expanded our reach beyond our legacy markets in the Carolinas to California and the Northeast. The SVB acquisition provided complementary expansion in terms of geographic distributions an accelerated entrance into attractive markets we were already targeting. The opportunities extend beyond our footprint, however. We're focused on maintaining the great client relationships fostered by SVB Private and deepening those relationships with our registered branch associates and digital platforms serving institutional, mass affluent, and high net worth clients. Moving forward, we believe these complementary capabilities will accelerate the growth of our wealth franchise. We remain focused on executing against our core strategic priorities, which are the building blocks for long-term sustainable value generation and are at the core of everything we do. I'd like to thank all of our associates for their strong commitment to serving our customers, clients, and communities. Thanks to you, I'm confident we are well positioned to continue delivering strong results and long-term value to our shareholders and stakeholders. In conclusion, I'd like to address the recent tragic and horrible attacks inflicted on the innocent people in Israel. We are saddened by these events and wish for peace in the region and for the future security of everyone and especially our clients, associates, and their families. I'll now turn it over to Craig to provide an update on our third quarter financial results. Craig?