KeyCorp

Thank you, everyone, for standing by. Welcome to the 2024 Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. If you would like to ask a question, please press 1 and 0 on your telephone keypad. You will hear an acknowledgment tone that your line has been placed in queue. You may remove yourself from queue by repeating the 1-0 command. As a reminder, this conference is being recorded. I would now like to turn the conference over to Brian Mauney, KeyCorp Director of Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. I'd like to thank you for joining KeyCorp's third quarter 2024 earnings conference call. I'm here with Chris Gorman, our Chairman and Chief Executive Officer, and Clark Hyatt, our Chief Financial Officer. As usual, we will reference our earnings presentation slides, which can be found on 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, October 17, 2024, and will not be updated. With that, I will turn it over to Chris.

Thank you, Brian, and good morning, everyone. I'm on slide two. Before I hand it over to Clark to review our financial results, I want to provide my perspective on a quarter that represented significant progress for Key as we position ourselves for the future. First, we received the initial $821 million, a little less than one-third of the anticipated minority investment from Scotiabank at the end of August. We used approximately 700 million of the proceeds to reposition our securities portfolio. In retrospect, this trade was fortuitously timed. Long-dated securities were sold near recent bond market highs in mid-September, which enabled us to sell over $7 billion of market value securities out of a total available for sale portfolio of $37 billion. At this point, we have fully invested the proceeds at better than anticipated yields in more liquid, less capital intensive, shorter duration agency MBS. We anticipate these actions will add over $40 million to quarterly net interest income in the fourth quarter. As for the remainder of the $2.8 billion Scotiabank minority investment, we are now through the public comment period, and we continue to expect to receive regulatory approval by the first quarter of 2025. Secondly, we saw the long-anticipated step-up in our net interest income this quarter, up 7% quarter-over-quarter. This reflected a combination of a more meaningful amount of low-yielding short-term swaps in treasuries maturing, as well as proactive management of our funding costs. We also continue to grow our client deposits, up 4% year-over-year and 2% sequentially. We achieved this NII growth despite some near-term impact as a result of the Fed's 50 basis point rate cut in mid-September. We mitigated a portion of the cut through a very proactive and disciplined deposit repricing plan, which is a testament to the preparedness of our consumer and commercial deposit teams. As a result, our beta in the initial Fed cut is anticipated to be higher than we had previously modeled and communicated. Thirdly, we continued to see strong momentum across our most important fee-based organic growth initiatives. Investment banking and debt placement fees were very strong at $171 million, one of the best third quarters in our history. Activity was broad-based with volumes particularly robust across loan syndications as well as debt and equity originations. Pipelines remained at historically elevated levels despite the third quarter pull-through. Pipelines are stable compared to June 30th levels and up meaningfully compared to year-end and year-ago levels. M&A backlogs, which we have said in the past, have a two to three times multiplier effect. We're near record levels and up 10% compared to the prior quarter. At this point, I am confident we will hit the high end of our full-year target for investment banking fees of $600 to $650 million. with an opportunity to exceed the high end if our pipelines pull through prior to year end. Again, assuming markets remain hospitable. In commercial payments, leveraging our focus on primacy, commercial deposits were up 5% year over year and 2% sequentially. As a reminder, 93% of these balances are tied to an operating account. Underlying core treasury service activities remain strong, growing in the low double digits. We believe we are well positioned in this area to benefit as rates continue to decline. Our third-party commercial mortgage servicing business posted a record quarter due to a small portfolio acquisition over the summer. Additionally, active special servicing balances reached a record $7.5 billion. As a reminder, This is a counter cyclical off us business that also provides us with unique insights into the commercial real estate market. We are currently seeing high rates of transfers into special servicing concentrated in office and to a lesser extent multifamily, even as we have also seen resolutions accelerate as we move through the year. In wealth, Assets under management reached an all-time high of $61 billion, up 16% from the prior year. Sales production was a record this quarter, and we are on track for a record year. While the entire wealth business is performing well, we continue to see particularly strong traction in our mass affluent segments. This quarter, we enrolled an additional 5,000 households and added $620 million of assets to the platform. In only 18 months, we have added over 36,000 households and about 3.6 billion of new household assets to Key. As a reminder, over 1 million of Key's retail households have investable assets of over $250,000, and only about 10% have an existing investment relationship with us. So there remains a significant opportunity to continue to grow in the massive loan segment. Lastly, with respect to credit, we continue to demonstrate a conservative de-risked credit profile. Non-performing assets and loans, as well as provision for credit losses, were essentially flat. Net charge-offs, as expected, were up and reflected a few specific CNI credits that were known and had been mostly reserved against. Importantly, criticized loans declined by $132 million. We also saw a marked improvement in our net credit upgrades to downgrades trends, which, while still slightly negative, moved back to our trailing 13-quarter average. We believe that MPLs are peaking and criticized loans will continue to decline from current levels. In summary, I am proud of the significant progress we made as a company this quarter. We announced the strategic minority investment from Scotiabank, closing on the initial one-third tranche a few weeks later. We deployed most of that, successfully completing one-half of our anticipated securities portfolio restructuring. At the same time, we continue to drive broad-based momentum across the franchise, grew our pipelines, delivered the first meaningful leg of the uplift in net interest income that we've been communicating over the past year, and took proactive actions across the deposit books to prepare ourselves for the rate cuts, all while continuing to demonstrate a strong credit risk profile. As a result, Despite the one-time impact of the restructuring, we improved our CET1 ratio this quarter by another 35 basis points to 10.8%. With that, I'll turn it over to Clark to provide more details on our financial results. Thanks, Chris, and good morning, everyone.