Comerica Incorporated

Greetings and welcome to the Comerica fourth quarter and fiscal year 2024 financial review conference call. At this time all participants will be in listen only mode. The question and answer session will follow the formal presentation. If you'd like to ask a question today, please press star 1 from your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. If anyone today should also require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. At this time, it is now my pleasure to introduce Kelly Gage, Director of Investor Relations. Thank you, Kelly. You may now begin.

Thanks, Rob. Good morning and welcome to Comerica's fourth quarter and fiscal year 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 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. The presentation and this conference call contain forward looking statements and in that regard you should be mindful of the risks and uncertainties that can cause actual results to differ 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 and this conference call will reference non-GAAP measures. And in that regard, I direct you to the reconciliations of these measures in 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.

Good morning, everyone, and thank you for joining our call. We felt 2024 was a year of strength as we prioritized further enhancing our foundation to better position ourselves for long-term success and saw promising customer trends. We continue to favor a conservative approach to capital management, producing an 80 basis points increase in our estimated CET1 capital ratio while resuming share repurchases. Even with ongoing volatility in the rate curve, we grow both book and tangible book value. Although loan demand remained muted throughout much of the year, we saw encouraging trends in the fourth quarter with improved sentiment and higher production levels, which supports our expectation for growth in 2025. Credit quality remained a strength as we maintained our discipline underwriting and produced historically low net charge-offs. Through deliberate reduction in wholesale funding and with favorable customer trends, we optimize liquidity benefiting net interest income. Beyond our financial results, we advance strategic priorities such as investing in relationship managers and growth businesses and financial advisors in support of our wealth management focus. Investments in capital markets produce results as the teams close their first M&A advisory transaction and build a strong pipeline for expanded revenue in the coming years. We continue to modernize our real estate footprint and technology. In fact, we expect to have almost all of our applications managed in the cloud or on a SaaS platform by the year 2025. Supporting our communities remained a priority as we provided critical business resources to small businesses and helped nonprofits broaden their reach. In preparing for the future, we continue to make progress towards eventual Category 4 readiness. And lastly, with an ongoing commitment towards driving efficiency, we executed expense recalibration initiatives, creating capacity for strategic and risk management investments. We believe our progress towards these important initiatives will help us achieve our long-term strategic objectives. Moving to a summary of 2024 on slide four, we reported earnings of $698 million, or $5.02 per share. Although the 2023 industry disruption weighed on year-over-year average comparisons, we saw encouraging trends throughout the year across a number of categories. Persistently higher rates muted loan demand across the industry, but late in the year we saw improved customer sentiment, anticipating a more favorable business and regulatory environment. Although the subsequent risk of higher rates dampened that optimism somewhat, We still hear customers are bullish about increasing business investment throughout 2025. Average deposits were pressured by 2023 events, but also reflected an intentional reduction in broker time deposits. Other than broker deposits, we saw growth in customer balances from year end 2023 to 2024. Both non-interest income and expenses were impacted by notable items, and our private credit management approach produced very strong results. Slide five summarizes the fourth quarter, where we generated earnings of $170 million, or $1.22 per share. Loan deposits and net interest income performed consistent with commentary we provided at a fourth quarter industry conference. Leveraging our strong relationship model, we believe we successfully managed deposit pricing commiserate with rate cuts. A modest securities repositioning pressured non-interest income and a number of other specific items impacted non-interest expenses for the quarter. In all, we feel the momentum with customer deposits and net interest income, coupled with improving sentiment, positions us for growth in 2025. Now I'll turn the call over to Jim to review our financial results.