Citizens Financial Group, Inc.

Good morning, everyone, and welcome to the Citizens Financial Group Second Quarter 2022 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 of 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 Thorn, and CFO, John Woods, will provide an overview of our second quarter results. Brendan Coughlin, head of consumer banking, and Don McCree, head of commercial banking, are also here to provide additional color. We will be referencing our second quarter earnings presentation located on our investor relations website. After the presentation, we will be happy to take questions. 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 reconciliations in the appendix.

With that, I will hand over to Bruce. Thanks, Kristen, and good morning, everyone. Thanks for joining our call today. There was a lot going on in Q2 with a focus on closing the investor's acquisition and commencing our New York City metro integration efforts. In addition, the Fed's move to rein in inflation through higher short rates and quantitative tightening put a spotlight on adroit management of our capital, liquidity, and funding position, as well as our interest rate management. The good news is that we made strong progress on all fronts while posting very good financial results. Our underlying EPS for the quarter was $1.14. That's up 7% from the first quarter, and ROTCE was 15.5%. Positive sequential operating leverage was 11.7% on an underlying basis, and that's 6.3% excluding the impact of acquisitions. Our PPNR growth was 45%. Driving these strong results was a significant sequential jump in net interest income of 31%, that's 9% X acquisitions, as spot loan growth reached 19%, which is 4% X acquisitions, and our net interest margin jumped 29 basis points. We are seeing a strong pickup in line utilization in commercial, which has afforded us the opportunity to be more selective and lower returning consumer portfolios like mortgage and auto. Our deposit performance was good. As period end deposits, ex-acquisitions were up 1%. Our fees were relatively resilient, up 2% ex-acquisitions, given the diversity of our fee revenue streams. Higher volatility kept capital markets in check, though it benefited FX and derivative product revenue, which hit an all-time high. Wealth continued to grow nicely in the quarter, while mortgage revenue was up slightly. We did our usual fine job on expenses, and credit performance continues to be excellent. We continue to see favorable trends in key credit metrics on both the commercial and consumer side. At this point, we feel the second half should hold up well, with only gradual normalization in loss rates, given the solid positioning of our customers today. We currently expect our solid momentum to continue into the second half of 2022. We will continue to benefit from rate rises, our fees should remain resilient, and we will benefit on expenses from our acquisition synergies and the Top 7 program. We project positive operating leverage in Q3 and Q4, with ROTCE moving beyond our 14% to 16% target range. The market seems concerned about the rising possibility of a recession in 2023 and the potential for much higher credit costs. At this point, we see slower economic growth as the base assumption for 2023, and if there is a recession, we believe it should be shallow and short-lived. We are being highly selective on new loan originations, and we've moved several portfolios to help for sale, largely from investors, to optimize our balance sheet position. We continue to believe our credit performance will be good on a relative basis should a downturn come. It's an exciting time for citizens. We have many promising initiatives in flight that we are managing well. We are focusing on areas where we can leverage our strengths and where we have a right to win, The current environment gives us a great opportunity to prove our mettle and deliver prudent, sustainable growth. We certainly feel up to the challenge. With that, let me turn it over to John to cover the financials in more detail. John?