U.S. Bancorp

Welcome to the U.S. Bancorp second quarter 2023 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 a.m. 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, Terry Dolan, our Vice Chair and Chief Financial Officer, and John Stern, Senior Executive Vice President and Head of Finance. During initial prepared remarks, Andy and Terry will be referencing a slide presentation. A copy of the presentation, our earnings release, and supplemental analyst schedules are available on our website at usbank.com. Please note that any forward-looking statements made during today's call are subject to risk and uncertainty. Factors that could materially change our current forward-looking assumptions are described on page two of today's presentation, our press release, our Form 10-K, and in subsequent reports on file with the SEC. Following our prepared remarks, Andy, Terry, and John 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. The second quarter was highlighted by our successful conversion of Union Bank and a meaningful increase in our common equity Tier 1 ratio to 9.1 percent, 60 basis points higher than the first quarter, driven by earnings accretion and balance sheet optimization actions. Earnings per share totaled 84 cents in the second quarter, including 28 cents per share of notable items. Excluding the impact of notable items, earnings per share was $1.12. Slide 4 provides reported and adjusted income statement results and other key metrics. Our second quarter results were supported by new customer account growth and deepening of relationships across our business lines, as well as continued disciplined expense management. Net interest income was lower compared with the first quarter, primarily due to pressures on deposit pricing. However, momentum in fee income businesses continued strong. One of the strengths of our business model is our diverse and stable funding that includes a mix of both consumer and operational wholesale deposits. This quarter, while our average deposit balances decreased by 2.6% late quarter, period end deposits were higher by 3.2% or approximately $522 billion, largely reflective of seasonal operational deposit flows in areas such as our corporate banking and trust businesses. Credit quality metrics remain strong versus pre-pandemic levels. but are normalizing as expected. This quarter, we strengthened our balance sheet by increasing the loan loss reserve reflective of our prudent approach to credit risk management. Slide five provides key performance metrics. Excluding notable items, our return on average assets was about 1.07% and our return on tangible common equity was 22.3%. Slide six provides a summary of our recently completed conversion of Union Bank. Following our main systems conversion on Memorial Day weekend, all credit card trust and investment accounts were transitioned to our platform in June. Early indications are encouraging, and I'm even more confident today of the strategic and financial merits of this deal. We continue to expect meaningful revenue opportunities, and our cost synergy targets remain intact. One highlight is the Union Bank customers are adopting our digital capabilities more quickly than expected. As of June 30th, just one month following conversion, we've had over a half a million enrollments in our digital product offerings, and this number continues to grow. Our teams are working diligently to leverage the value of overlaying all of our products and services to Union Bank customers, and we will continue to provide updates on our progress. I'll now turn the call over to Jerry, who will provide more detail on the quarter.