Citizens Financial Group, Inc.

good morning everyone and welcome to the citizens financial group third quarter 2021 earnings conference call my name is alan and i'll be your operator today currently all participants are in a listen-only mode following the presentation we will conduct a brief question and answer session as a reminder this event is being recorded now i'll turn the call over to kristin silberberg executive vice president investor relations kristin you may begin

Thank you Alan. Good morning everyone and thank you for joining us. First this morning our Chairman and CEO Bruce Van Saan and CFO John Woods will provide an overview of third quarter results referencing our presentation which you can find on our Investor Relations website. After the presentation we'll be happy to take questions. Don McCree, Head of Commercial Banking and Brendan Copland, Head of Consumer Banking are also here to provide additional colour. Our comments today will include forward-looking statements, which are subject to risks and uncertainties that may cause our results to differ materially from expectations. These are outlined for your review on page two of the presentation. We also reference non-GAAP financial measures, so it's important to review our GAAP results on page three of the presentation and the reconciliation in the appendix. And with that, I will hand over to Bruce.

Thanks, Kristen. Good morning, everyone. Thanks for joining our call today. We had a successful and busy third quarter featuring continued strong execution of our strategic initiatives, good financial performance with positive operating leverage and 7% sequential PPNR growth, and the announcement of three acquisitions. We are playing offense, and we feel that we are taking the steps to position us for solid growth in franchise value, in earnings, and in returns. Our financial performance in Q3 reflects strong revenue growth of 3% sequentially as both net interest income and fees grew nicely. NII benefited from a pickup in spot loan growth with retail up 3% and commercial up 1% excluding PPP impact from loan forgiveness. The gradual improvement in loan volumes we have expected is materializing, though held back a modest amount in Q3 by impacts from the Delta variant on the recovery, as well as by supply chain issues and labor shortages. These impacts should continue to abate going forward, and we expect even faster loan growth in Q4. Interestingly, the amount of PPP forgiveness is roughly equivalent in the first and second halves of 2021, though Q3 saw a meaningful pull forward, which benefits Q3 at the expense of Q4. Nonetheless, the faster loan growth we expect in Q4 should largely offset the lower PPP impact on Q4 net interest income. Strong sequential fee growth once again demonstrated the diversity of our business model. Mortgage had a bounce-back quarter, which helped offset some seasonality in capital market fees, while wealth hit a new record and consumer fees continued their recovery towards pre-pandemic levels. We expect this diversification to play out again in Q4, with capital markets poised for a strong quarter, given exceptional pipelines, and mortgage set for a seasonally softer quarter. We kept expenses under control, given our efficiency initiatives, which led to positives And credit continues to be in great shape, with NCOs of 14 basis points in the quarter, well below our guidance range for the quarter of 20 to 25 basis points. These strong results across expenses and credit should continue into Q4. The strategic initiatives we're focused on across consumer and commercial continue to go well, and there's more on that in the presentations. We feel we are focused on prioritizing the areas where we can differentiate ourselves and where we have a right to win. The acquisitions we've announced year-to-date are all attractive from a strategic and financial standpoint and present only modest execution risks. The investors in HSBC transactions give us a top 10 deposit market share in New York City Metro and over a million new customers who collectively we feel we can do more for. We also gain a big augmentation to our digital bank customer base from HSBC's online bank, and we gain a thin branch network in Washington, D.C., and Miami. Our integration efforts so far are progressing nicely. Our JMP acquisition is also strategically compelling. Upon closing the deal in mid Q4, we'll have a much broader and deeper corporate finance coverage in technology, healthcare, and financial services, Plus, we gain an equities business that is very well-run, focused, and highly regarded. As non-bank lenders continue to take lending market share from banks and private equity ownership of companies continues to increase, it's important that we broaden our capabilities to be able to compete successfully in this new landscape. We will increasingly generate more fee revenue across our customer base given these expanded capabilities. Also worth noting is that the Willamette transaction dramatically expands our valuation services business with a prestigious outfit. This capability is highly synergistic with our M&A and broader capital markets effort. So to sum up, we're taking serious strides forward as an organization in 2021, and we feel very good about our positioning and our future outcome. With that, I'll turn it over to John.