U.S. Bancorp

Welcome to the U.S. Bancorp Fourth Quarter 2022 Earnings Conference Call. Following a review of the results, there will be a formal question and answer session. If you'd like to ask a question, please press 1 then 0 on your phone. If you'd like to withdraw, please press 1 then 0 again. This call will be recorded and available for replay beginning today at approximately 11 o'clock AM Central Time. I will now turn the conference call over to George Anderson, Senior Vice President and Director of Investor Relations for U.S. Bancorp.

Thank you, Brad, and good morning, everyone. With me today are Andy Cesari, our Chairman, President, and Chief Executive Officer, and Terry Dolan, our Vice Chair and Chief Financial Officer. During their prepared remarks, Andy and Terry will be referencing a slide presentation. A copy of the presentation, as well as our earnings release and supplemental analyst schedules, are available on our website at usbank.com. I would like to remind you that any forward-looking statements made during today's call are subject to risk and uncertainty. Factors that can materially change our current forward-looking assumptions are described on page two of today's presentation, in our press release, our Form 10-K, and in subsequent reports on file with the SEC. Following their prepared remarks, Andy and Terry will take any questions that you have. I will now turn the call over to Andy.

Thanks, George. Good morning, everyone, and thank you for joining our call. I'll begin on slide three. This quarter, we completed the acquisition of MUFG Union Bank on December 1st. In the fourth quarter, we reported $0.57 per diluted share, or $1.20 after adjusting for notable items related to the acquisition. This was a complex quarter that included one month of Union Bank results, merger and integration charges, and balance sheet optimization activity. Terry will provide more details on these notable items. Importantly, we ended the year with a common equity Tier 1 ratio of 8.4%. which was just above our expected level at deal close, and we delivered positive operating leverage for U.S. Bancorp legacy operations of 230 basis points for the full year. Strong year-over-year pre-tax provision income growth, as adjusted for notable items, was driven by net interest income growth and positive operating leverage. Credit quality remains strong, although credit metrics are starting to normalize as expected. Slide 4 details our reported and adjusted income statement results, as well as end-of-period balances and other performance metrics. End-of-period assets for the company totaled $675 billion, reflecting the acquisition of Union Bank and certain balance sheet optimization actions. Slide 5 highlights key performance ratios. This quarter, we delivered a return on average assets of 1.2%, a return of average common equity of 16.8%, and a return on tangible common equity of 23.4%, each as adjusted for notable items. Turning to slide six, the completion of the Union Bank acquisition marked a significant milestone for our company. With double-digit percent increases in loan and deposit balances, Union Bank adds meaningful scale to our business that enables us to better serve our customers and communities. Union contributes considerable small business and consumer market share in a demographically attractive California market, and we're excited about the potential to deepen existing unibank relationships by overlaying our leading digital capabilities and robust product set, including wealth management, consumer and business banking, and payments offerings across a loyal but underpenetrated consumer base. In many ways, this deal underscores our commitment to creating a stronger, more competitive regional banking organization in a rapidly evolving environment. One of the more attractive aspects of this transaction is Union Bank's high-quality, low-cost consumer deposit franchise, which will support continued loan growth and margins. Let me turn the call over now to Terry, who will provide more detail on the quarter.