Comerica Incorporated

Good day and thank you for standing by. Welcome to the Comerica Bank First Quarter 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, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to our speaker today, Darlene Persons, Director of Investor Relations. Please go ahead.

Thank you, Mary. Good morning, and welcome to Comerica's first quarter 2022 earnings conference call. Participating on this call will be our President, Chairman, and CEO, Kurt Farmer, Chief Financial Officer, Jim Herzog, Chief Credit Officer, Melinda Chossie, and Executive Director of our commercial bank, Peter Sevzik. During this presentation, we will be referring to slides which provide additional details. The presentation slides and our press release are available on the SEC's website as well as in the investor relations section of our website, Comerica.com. This conference call contains forward-looking statements. In that regard, you should be mindful of the risks and uncertainties that can cause actual results to vary materially from expectations. Forward-looking statements speak only as of the date of this presentation. We undertake no obligation to update any forward-looking statements. Please refer to the safe harbor statement in today's earnings release in slide two which is incorporated into this call as well as our SEC filings for factors that can cause actual results to differ. Now I'll turn the call over to Kurt who will begin on slide three.

Good morning everyone and thank you for joining our call. The economy in the first quarter was relatively strong despite the surge of COVID cases in January and the war in Ukraine. On the whole, our customers are in good shape and they remain cautiously optimistic about the future. Loan growth in the first quarter was solid and exceeded our expectations in several businesses. Compared to the first quarter last year, general middle market average loans were up 16%, excluding triple P loans, and large corporate loans were up 20%. Credit quality remained very strong and expenses were well controlled. We are actively managing our balance sheet and remain well positioned for the rising rate environment. Overall, the year is off to a good start. Highlighted on the slide are recent accomplishments associated with our corporate responsibility platform. We are pleased with the progress we are making. Related to environmental sustainability, climate risk is an emerging priority for all regulators, and last month the SEC released a notice to propose rulemaking for climate-related disclosures. For the past 13 years, we have disclosed our progress in reducing our Scope 1 and 2 greenhouse gas emissions, discussing our goals in our annual corporate responsibility reports, and providing annual responses to CDP's climate change questionnaire. We will be publishing our corporate responsibility report in June. Through our membership and the Partnership for Carbon Accounting Financials, or PCAF, we have begun to develop estimates of our commercial lending portfolio's financed emissions. We expect to continue on this path and meet any reporting or regulatory requirements. We look forward to keeping you apprised of our progress. In light of the evolving post-COVID environment, we are taking a fresh look at our retail banking approach, corporate facilities, and technology platform. These are areas that we are constantly evaluating, but with the pace of change accelerating, we are acting with even more urgency. For example, within our retail bank, we continue to focus on transforming the delivery of our services aligning resources to best serve our customers, and enhancing our small business focus. Also, we are developing additional initiatives around optimizing our facilities for our employees. The goal is to better accommodate flexible work arrangements, reduce our footprint, and improve efficiency while maximizing locations that best serve our customers. As far as technology, We are increasingly focused on ways to meet customers' and colleagues' rapidly increasing desire to utilize digital channels. We believe these initiatives are essential and foundational to continuing to effectively execute our relationship banking strategy as we have for the past 173 years. Turning to our first quarter results, which are outlined on slide four, we generate earnings of $1.37 per share. Broad-based loan growth, momentum was partly offset by a large decrease in mortgage banker due to lower refi volumes and typical first quarter slower purchase volume, as well as the continued wind down of Triple P loans. Deposits in the first quarter were typically impacted by seasonality, and this year was no exception, following record activity in the fourth quarter. Net interest income benefited from loan growth as well as our larger securities portfolio, as we work to deploy excess liquidity and lock in higher yields. These benefits were offset by a $10 million decline in Triple P income. Strong credit quality resulted in a small reserve release. As expected, maintaining the record levels of fee income we generated last year was challenging. The first quarter was impacted by a large decline in warrant-related income and negative returns on deferred compensation assets. In addition, We saw a seasonal decline in customer activity intensified by Omicron in January. We believe activity should be more robust as we move through the year. Expenses declined $13 million and included the decrease in deferred comp and seasonality in several categories, such as annual stock compensation. Overall, companies are working on growing their businesses, rebuilding inventory levels, and increasing capital expenditures despite higher costs and labor shortages. In general, customers have been able to pass on price increases, and their balance sheets are strong with excess liquidity. Despite some uncertainty, customer sentiment remains positive, which is reflected in our pipeline and growing loan commitment levels. And now I'll turn the call over to Jim, who will review the quarter in more detail.