KeyCorp

your conference will begin momentarily please continue to hold Good morning and welcome to KeyCorp's second quarter 2024 earnings conference call. As a reminder, this conference is being recorded. I'd now like to turn the conference over to the head of investor relations, Brian Mauney. Please go ahead.

Thank you, operator, and good morning, everyone. I'd like to thank you for joining KeyCorp's second quarter 2024 earnings conference call. I'm here with Chris Gorman, our chairman and chief executive officer, and Clark Kyatt, our chief financial officer. As usual, we will reference our earnings presentation slides, which can be found in the investor relations section of the key.com website. In the back of the presentation, you will find our statement on forward-looking disclosures and certain financial measures, including non-GAAP measures. This covers our earnings materials as well as remarks made on this morning's call. Actual results may differ materially from forward-looking statements, and those statements speak only as of today, July 18, 2024, and will not be updated. With that, I will turn it over to Chris.

Thank you, Brian. I'm on slide two. This morning, we reported earnings of $237 million, or 25 cents per share, which is down 2 cents from the year-ago quarter but up 5 cents sequentially. On a quarter-over-quarter basis, revenue was essentially flat as we offset the expected pullback in investment banking fees from a record first quarter with growth across the balance of the franchise. Expenses remained well-controlled and credit costs were stable. Importantly, we continue to deliver on our clearly defined path to enhanced profitability that we detailed a little over a year ago. Net interest income grew from what we continue to believe will be this cycle's low in the first quarter, and we remain confident in our ability to deliver on our NII commitments for both the full year 2024 as well as the fourth quarter exit rate. Deposit value creation continues to be a positive story for Key. This quarter, deposits grew by 1% sequentially, while the pace of increase in deposit costs continued to decelerate. Additionally, non-interest-bearing deposits stabilized at 20% of total deposits. We were also pleased to see client deposits up 5% year over year. consumer relationship households are up 3.3% annualized year-to-date. Finally, we continue to be very disciplined with respect to pricing. Our cumulative deposit data stands at 53% since the Fed began raising interest rates. With respect to non-interest income, we have made continued progress against our most important strategic initiatives. In our wealth management business, targeting mass affluent prospects, Production volumes hit another record in the second quarter as we added 5.6 thousand households and over 600 million dollars of household assets to the platform. Since launching this business in March of last year, we have added over 31 thousand households and about 2.9 billion of new household assets to Key. Within our existing customer base, we believe we have a great opportunity Over 1 million key retail households have investable assets of over $250,000, and only about 10% are existing customers in our investment business. Overall, as a company, our assets under management have now reached $57.6 billion. In commercial payments, we continue to see strength in our commercial deposits, with 9% growth year over year, and a relatively flat beta since year end. Cash management fees are growing at approximately 10%. Our primacy focus has made this a core competency for us. We continue to see momentum as our clients are more focused than ever on working capital solutions and driving efficiency in their own businesses. Additionally, our focus on verticals like healthcare, real estate, and technology create meaningful deposit opportunities and our embedded banking strategy was well-timed given the growth we're seeing in that market. In investment banking, as we have previously communicated, our second quarter fees were below those of the first quarter. Our positive outlook for the business, however, remains unchanged. Our pipelines are higher today than last quarter, year-end, and year-ago levels. Our M&A pipeline remains near record levels, and the near-term outlook for other investment banking fee revenue streams have improved. At this point, we expect a stronger second half of the year, consistent with our prior guidance. Our national third-party commercial loan servicing business also continues to perform well. This is a counter-cyclical business that also gives us unique insight into the commercial real estate market. We continue to feel very good about our growth prospects for this business, Lastly, on loans. Broadly, loan demand remains tepid and the pricing environment remains competitive. It has also taken some time after our focus on improving our liquidity and capital ratios last year to get our machine fully up to speed. Despite recent volume trends, we are optimistic we will start to see stabilization and potentially some growth in the back half of the year. Our pipelines are building. In the middle market, Our pipelines are over 50% higher than last quarter. And in our institutional business, engagements broadly are picking up as well. Turning to capital. This quarter, our common equity tier one ratio improved by roughly another 20 basis points to 10.5%. Our marked CET1 intangible capital ratios also improved. As reported a few weeks ago, we have received the results of the Fed's stress test, or DFEST, which implied a preliminary stress capital buffer for key of 3.1%, which is up 60 basis points from the SCB we received in 2022. I'll make just a few comments. First, even under this preliminary buffer, we have plenty of excess capital. Our 10.5% CET1 ratio compares to what would be a new 7.6% implied minimum. So the results continue to illustrate our strong capital position. Secondly, we, like others in our industry, don't have insight into the Fed's models. The Fed's model loan losses for Key, particularly for our commercial real estate and first lien mortgage portfolios, are inconsistent with our internally run stress tests. We look forward to a continued constructive dialogue with our regulators on this topic. Looking forward, I am excited about what lies ahead for Key. We have been discussing our net interest income pivot for each of the last several quarters. The pivot is now upon us. NII headwinds that we have experienced will now become NII tailwinds as we go forward. Concurrently, I'm also encouraged by the business momentum we continue to see across the franchise. We demonstrated momentum in wealth management and commercial payments again this past quarter, and we are driving meaningful client deposit growth across the entire franchise. Lastly, investment banking and loan pipelines are up meaningfully from prior periods. With that, I'll turn the call over to Clark to provide more details on our financial results.