Comerica Incorporated

Ladies and gentlemen, thank you for standing by. Welcome to the 2023 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. If you have a question at any time, please press 1, then 0. If you should require assistance at any time, please press star, then 0. I would now like to turn the conference over to your host, Director of Investor Relations, Kelly Gage. Please go ahead.

Thanks, Greg. Good morning, and welcome to Comerica's second quarter 2023 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 Chassie, and Chief Banking Officer, Peter Cepcic. 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 earnings release on slide two, which is incorporated into this call, as well as our SEC filings for factors that can cause actual results to dip. Also, this conference call will reference non-GAAP measures. And in that regard, I direct you to the reconciliation of these measures and the earnings materials that are available on the website Comerica.com. 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. Today, we reported second quarter earnings of $273 million, or $2.01 per share. Average loans grew to $55.4 billion, and a continued focus on fee income helped drive our second highest non-interest income quarter in our history. Expenses declined, and our disciplined approach to credit produced a third consecutive quarter of net recovery. Beyond our compelling financial results, we have launched a transformational expansion of support for small businesses. In the second quarter, we introduced tailored products designed to improve access to capital and enhance cash management capabilities for these important customers, while also providing access to valuable business insights and resources. Coupled with our recognized SBA achievements, we believe we are well positioned to be a leading bank for small business, providing the tools they need to achieve their goals. Our emphasis on supporting small business is an important part of our overall commitment to communities. You can read more about our other community and sustainability efforts in our 2022 Corporate Responsibility Report that was recently published on Comerica.com. Our Southeast and Mountain West expansionary investments continue to perform well as our bankers were active in the market, adding new relationships and building pipelines. Strong, relative economic trends in these regions, coupled with the prevalence of target customer base, could create opportunity for continued growth over time. Moving to a summary of our results from slide four, average loans grew $1.9 billion. Average deposits decreased $3.5 billion due to customer diversification efforts related to industry disruption in the first quarter and the ongoing impact of Fed monetary actions. We saw increased stabilization in both interest-bearing and non-interest-bearing deposits in the second half of the quarter, and we believe diversification efforts are largely behind us. As we expected, net interest income declined as we saw the full impact of first quarter deposit flows and funding activity. Credit quality outperformed with another quarter of net recovery, and our criticized loan percentage remained below our historical average. Non-just income was near record levels and expenses declined. Profitability improved in our already solid capital position as we generated an estimated to ET1 ratio of 10.31% above our strategic target. It all was a strong quarter for Comerica, and I will now turn the call to Jim, who will review our results in more detail.