Comerica Incorporated

Greetings and welcome to the Comerica Bank third quarter 2024 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Kelly Gage, Director of Investor Relations. Thank you. You may begin.

Thanks, Melissa. Good morning and welcome to Comerica's third quarter 2024 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 Chief Banking Officer, Peter Sepsic. 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. The presentation and this conference call contain 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 presentation on slide two. Also, the presentation in this conference call will reference non-GAAP measures. In that regard, I direct you to the reconciliation of these measures and the earnings materials that are available on our website, Comerica.com. Now I'll turn the call over to Kurt, who will begin on slide three.

Well, thank you, Kelly, and good morning, everyone. Today we reported third quarter earnings of $184 million, or $1.33 per share, exceeding expectations across most line items. Strong customer activity drove higher average deposits, which offset the impact of lower loans and helped net interest income outperform guidance for the quarter. The downward shift in the rate curve resulted in a meaningful improvement in AOCI, contributing to 23% growth in tangible book value. Credit quality remained solid, reflecting our proven underwriting discipline, as net charge-offs remained historically low. While customer sentiment remains cautiously optimistic, the initial decline in rates was well received, as select businesses showed early signs of an uptick in activity nearing quarter end. However, to see a more significant shift in behavior and reinvestment, we believe customers are looking for further rate reductions, confirmation of a soft landing, and getting past the impending election. Before we get into more detail on our strong quarter, I wanted to take a moment to touch on the historical milestone we celebrated on August 17th, Comerica's 175th anniversary. My leadership team and I spent a lot of time this past quarter visiting our markets, meeting with customers, colleagues, and community leaders. We have a great story and a value proposition that resonates with our target market. Our customers trust us with their business, and we take that responsibility seriously. As a bank, we have successfully navigated industry changes, global conflicts, and economic cycles over many years. We feel this impressive history underscores the strength of our unique model, and we believe our consistent execution, along with our strategic investments, position us to successfully support our customers now and into the future. Moving back to results, third quarter financial highlights are on slide four. High inflation and elevated rates continued to pressure loan demand, but we saw positive momentum in deposits as average balances grew in most of our businesses. Excluding the impact of business sensation, net interest income increased 1.3% over the second quarter trough. Charge-offs at eight basis points remained below historical averages and even declined slightly from last quarter's already strong results. Lower non-customer income all set favorable trends in customer related fees and non-interest expenses were well managed. We continue to favor conservative approach to capital with our estimated CET1 increasing further to 11.97%, well above our 10% strategic target. Jim will discuss our capital management strategy later in this presentation. In all, it was a great quarter with positive momentum moving into the end of the year. I will now turn the call to Jim to review our third quarter financial results in more detail. Thanks, Curt, and good morning, everyone.