Comerica Incorporated

Hello and thank you for standing by. Welcome to the Comerica second quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session. To ask a question during this session, you will need to press 1-0 on your telephone. To withdraw your question, press 1-0 again. I would now like to turn the conference over to Darlene Persons, Director of Investor Relations. Please go ahead.

Thanks, Tawny. Good morning, everyone, and welcome to Comerica's second 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 Chausse, and Executive Director of our commercial bank, Peter Sevcik. 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 and we undertake no obligation to update any forward-looking statements. Please refer to the safe harbor statement in today's earning release on 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.

Thank you, Darlene, and good morning, everyone, and thank you for joining our call. Today we reported first quarter earnings of $261 million, or $1.92 per share, an increase of 40% over the first quarter. Free tax pre-provision net revenue was up 53%, and our ROE increased to 17%. These results reflect the rising rate environment, including prudent actions we have taken to lock in higher rates. In addition, we produced strong loan growth and generated a solid increase in fee income. While the overall economic environment is uncertain, overall our customers are generally optimistic about the future. While they may be seeing some pressure on their margins, they remain in good shape. As I discussed on our last earnings call, we kicked off several initiatives related to modernization as we continue to evolve and adapt to meet the changing landscape and move into a new era of banking. We believe that our brand identity should also reflect this change. Therefore, we recently unveiled a refreshed corporate logo that represents our commitment to both our 173-year legacy and our vision for the future. Also last month, we announced actions taken as part of our retail bank transformation, which included adding small business bankers in strategic locations, updating our web and mobile banking platforms, and expanding our interactive teller machine network. In addition, we are consolidating 22, or 5%, of our banking centers, which is expected to be completed by the end of the third quarter. We have continued to work on other initiatives around optimizing our facilities. The goal is to better accommodate flexible work arrangements and reduce our footprint, while maximizing locations that best serve our customers. In addition, as we progress on our cloud journey in decommissioned data centers, our technology facilities are being consolidated. We are excited about the progress we have made and the path we are laying for our future. As far as our progress from the ESG area, I encourage you to review our 14th Annual Corporate Responsibility-Related Report which was recently published. In the second quarter, our green loans and commitments continued to grow and totaled $2 billion at quarter end. Once again, our commitment to corporate responsibility has been recognized with honors from the National Diversity Council as one of the 50 most community-minded companies in the U.S. Also, we appointed a National Hispanic Business Development Manager to further support our commitment to strengthening relationships with Hispanic business leaders, entrepreneurs, and communities. And finally, we've established a renewable energy solutions group. Turning now to highlights of our second quarter results outlined on slide four. Second quarter long growth was one of the highest in our history, with increases in nearly every business line. The biggest drivers were general middle market, large corporate, equity fund services, as well as modest growth in national dealer services. In general, customers are rebuilding inventory levels, which has resulted in increasing working capital needs, while CapEx spending remains relatively slow. We are strategically managing deposits, and customers are putting their excess liquidity to work, which resulted in a decline. Net interest income benefited from higher rates, as well as growth of our loan and hedging portfolios. Credit quality remained excellent, and fee income increased 10%, led by syndication, derivative, and warrant activities. Expenses were driven by investments we are making to support growth and performance-related compensation. Higher revenue, combined with solid expense management, resulted in a significant improvement in our efficiency ratio to 58%. Overall, a strong quarter, and we feel positive about the path we are on as we move through the remainder of the year. And now we'll turn the call over to Jim, who will review the quarter in more detail.