Comerica (CMA) 19 Jul 242024 Q2 Earnings call transcript

Hello, and welcome to the Comerica Second Quarter 2024 Earnings Conference Call. [Operator Instructions]

As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Kelly Gage, Director of Investor Relations. Please go ahead, Kelly.

Kevin. Thanks, welcome Quarter and Call. Earnings Comerica's to morning, XXXX Second Conference Good Credit and on our Financial Farmer; Chief be call Officer, Melinda Chairman Herzog; Participating will Curt President, this Peter Banking Chief Officer, and CEO, Jim Officer, Sefzik. Chausse; Chief

we SEC's presentation, statements. to referring cause as forward-looking Relations that on risks the from this website The as to be additional conference release are section should slides, our our Investor mindful regard, vary slides well website, comerica.com. be and contain will you The presentation press provide and call of available details. this uncertainties During actual which presentation on materially In the of the that expectations. can on results

presentation, forward-looking no to in X. Forward-looking statements speak Please only statements. today's Slide as safe this we update earnings obligation and of harbor any to of the the refer on statement presentation undertake date

will the this Also, these are In to you materials our earnings call the available that in direct that on reference website, presentation reconciliation in non-GAAP the comerica.com. I measures. conference measures of regard,

call turn over Curt, begin on who the Slide X. I'll Now will to

per earnings for $XXX Good second basis. morning, reported call. million quarter quarter both the outperforming you Today, and everyone, or we our joining an adjusted first and thank $X.XX on share, reported of a

slightly throughout appeared loans declined, sentiment In quarter. the an balances optimistic drove growth environment, uncertain quarter. in customer average Although and inflection our targeted responsible than focus an economic political last on less

businesses outlook. believe pipeline growth our number of we our supports However, positive saw and momentum a our

improved. noninterest Credit discipline. both rebound our expenses interest quality noninterest proven expected, margin reflecting net As to and underwriting in started remained strong, income

XXth We communities. company published embedded Report, proud in and June, topic. of responsible commitments efforts important And to Once our culture. in remain our again, a prioritize employees our Corporate deeply our detailing Responsibility our to we this is Annual Being U.S.

one of for, to pride we play organizations. community-minded take the is one We named in we the XX business best and feel we and as unique were us recognized business, companies markets. responsible most our the of work News good a supporting in role

are the increased quarter impacted quarter were Second first throughout balances consistently demand, on Average highlights loans quarter. but by Slide X. financial muted

in first deliberate drove average decline deposits reduction quarter of broker the time Our in majority deposits. the

we to lower we balances cycle. in pressure the peak believe what the be continue income Fed reflected However, also average and both rate see on deposits loans. as noninterest-bearing may near net The of we decline interest

declined net from target. historical saw both of below higher and remain to at reserve our above XX.XX% benefit points, estimated excluding less discrete of Even basis due and strategic loss items, a lower averages benefit Charge-offs notable from the increased trends. our Taxes our noninterest remained modestly. X XX% and items, favorable CETX loan expenses and income income noninterest

an in we benefit remain income favorable the environment, interest well. with we elevated us rate in expected structural think to quarters positions While that coming coupled customer-related trends net

quarter Jim? the turn to call to detail. financial second I'll more results review our Now Jim in over

Thanks, good Curt, everyone. morning, and

soft demand continued balances estate with the in real equity year, rebounded persisted Slide fund management balances average effects impacted utilization at and Low in loan trends although elevated quarter. coupled in impact Commercial of trended second rationalization of to Trailing June start Turning utilization efforts loans. rates wealth services, X. the the to higher.

flat remained first balances to However, quarter. period-end the

quarters, originations to for in purposefully subside this we in We growth several to and begin space this and commitments have managing been business. expect see

nationwide part but most increases with that up with quarter grew balances in billion. lines. across impacted saw cyber-attack to balances we loan Dealer June, contributed consistently loans period-end over the Services dealerships National elevated $X growth in to business quarter throughout Total end due also the

for continued strong remains supports pipeline expectation our Our and growth.

billion, but to as $X.X the Moving attributed reduce balances select to we noninterest-bearing half trends deposit increased lower business of latter on time observed almost Slide the municipalities. businesses support to ongoing utilize impacted the Tax-related Pressure balances or decrease borrowings. to activity of relative seasonality deposits. was XX% quarter customers declined as funds in broker X. Average first such

While at customer new in we appear the we and level, not noninterest-bearing XX% leading, remained driver. the to it believe saw averaging deposit did peer some be mix ongoing remixing deposit relationships, noninterest-bearing success biggest trends with for our Even quarter. winning the balance interest-bearing

basis X deposit continued deposits, time improved increases costs broker deposit lower to and pricing in by points, customer Interest-bearing flatten. driven

costs. the deposits As in deposit and balances, rates encouraged pricing In see remain by we in decline, we our discipline. expect an continued inflection meantime, mix success interest-bearing point to and growing

paydowns balances in adjustment continued and Period-end mark-to-market maturities flat. portfolio with remained declined Slide as the on relatively X our securities

expect decline end at through of year. We continued balances least the in the

from to of X. million to $XXX and wholesale million deposits as the we in a drove cessation lower Fed quarter. partially Turning compared recognized in million a loan by Slide driven Net first by decreased second Impacts $X noncash million the income increase the a decline in $XX $X interest BSBY to million, offset quarter $X decline funding. balances, loss the

find As in future BSBY impacts a can the the the slides. expected reminder, appendix you to

drove of Normalization cash net interest increase margin our position for in quarter. an the

and securities points By of XXX our to average position our decline insulated and on XX successful for considering favorably sheet basis strategy of swap X, interest sheet dynamics, managing Slide or portfolios, interest strategically intend on us points while we composition basis balance time. maintain shown balance our execution the over our positions in gradual a As rate rates.

consecutive for of X normal quality highlighted declined Net range. the strong as Credit below remained XX. remained on our Slide second well quarter and charge-offs bps

and remain new within borrowing businesses. criticized loans market costs not improvement slightly in to did consistent. portfolios core our customers but middle Although we in remain and concentrated navigate loans up our inflation, below incrementally pressures, saw relatively We high ticked observe averages. emerging continue Nonaccrual any metrics historical monitored an still

ongoing X.XX% continue losses loans, believe total of for With credit manageable. the to reduction to in the remain will allowance we migration

of income noninterest quarter million. second million $XX increased XX, $XXX Slide On

in a growth categories. customer-related majority brokerage investments the were increases including to as see team of encouraged Capital to increase seasonal grew focus noninterest advisory was the the markets with quarter, income benefited result place year. related platform tax-related income saw pleased We of income these investments. last key most our product, first revenue to were BSBY and new put associated Comerica growth from across we on M&A to Advisors. the we in and Fiduciary new cessation prioritize a in our services each impact strategic income for Although Financial continue in of see successful

Salaries lower Other stock-based compensation million $XX the million special seasonally improved XX consulting, came Slide prior in as and seek a losses management biggest drive with on with operating declined Expenses we costs expenses to $XX over partially benefits to high FDIC the operational due expense associated declined, positive higher quarter. estate as and large impairment and driver. continue assessment rationalization, first the remains quarter. the real offset priority by asset opportunities including Overall, expense advertising. leverage seasonally to efficiency. down

on of Slide XX, higher profitability with our shown across drove ratios. As coupled all capital management conservative key capital increases

quarter, minimums CETX AOCI and adjusting Despite grew remained throughout at AOCI Our the buffers. quarter required flat. opt-out, estimated our the relatively and XX.XX%, end, remained to estimated above volatility regulatory for CETX

as to management, we our ongoing they we movement, think AOCI continue need and about evolve. loan to As capital regulations monitor outlook

we Comerica from fiscal indicated moving as the serving Comerica the are on recently that XX, This negotiations continue remains service to not Direct to not financial was yet card the received preliminary at next notification fluid will the as Bank as agent Slide Before but Express prepaid Bank business program the debit for early contract expect we the outlook, year. following that contract long-term. process expiration this retain time, of not our final, do selected

slide, noninterest income fees, associated and generally As detailed managing offset but that expenses program. with card is on by recognized the the we

time The averaged cards, in noninterest-bearing monthly deposit benefits financial which grown value second funded the the $X.X been quarter. has have over balances to in related billion the and on

terms discussed we and regards As past, final. expect the have are mechanics various coming of quarters as timing to in and become there deposit the detail the scenarios potential more transition, the we in with

leads deposit this noninterest or may longer anticipate expenses. believe with currently experience this to our shorter, than us do balances, However, not an income program XXXX to and we be transition impact

of we with these key been proven leverage program, refocus on initiatives we core Several strategies opportunity are goal relationship the deposit operating Slide towards growth important model. investments core XX manage in funding targeted strategic and honored with see time. this listed to coupled reprioritize over deposit driving with this and to as an consistent resources While more our have in line of expertise,

quarter. our deposit been activities space payments the business drive our and customers. to talent investments and for the Expected have competitive favorable designed we and strong into bank our to capitalize further have solutions been see were Select growth enhance deliver we example, focus us on leading leaning business this expand to should acquisition trends more an consistency set for and the core treasury product liquidity comprehensive granularity and of allow as position to our and our should our customer within business. small to management in encouraged profile As optimization

that are intended with while are win have within our already experience competitive Online experience Direct expanding retail card to the capabilities leveraging to customer improve our new developed we Express, reach. relationships. Through we enhancements user further

stable target on, key knowledge product see as In opportunities. funding executing a delivery forward leverage further short, deposit are model, excited we to deposit continuing opportunities drive strong to look deposit-rich prioritize which very Finally, industry our about and focus. are help customers, we existing initiatives set the strategic to should growth and we to

full to decline muted the our or efforts slightly. Slide optimization XX. outlook Trailing point-to-point Our dampened strategic effects from We grow X% year on project XXXX to year-end from XXXX across is demand average industry for and loans outlook XXXX. our X%

strong second the expectations and supports still in pipeline our momentum year. the broad-based half growth However, of

XXXX be Full from year are X% projected to down X% deposits down average point-to-point. or

consistent broker expect to full deposits average full time be to XXXX year relatively from XXXX. year We

deposits, some level loans in anticipate a deposit to and new combination of decline favorable lower we noninterest-bearing a XXs. ongoing outlook trends we expect mix noninterest-bearing now cyclical winning year-over-year. in balances deposit income pressure we our as average maintain The XX% of upper net impacts and interest-bearing project Although continued success interest the on

interest X% as quarter income. expect net cyclical the BSBY believe at only low expected and and we impact a those a is cessation X% to point. quarterly basis, X% decline income loan pressures BSBY, same deposit we decline a net negative Adjusting On are third we to for interest modest in the drive to from

continue rates persistent is migration modest We and drive this deposit inflationary remains With will quarter. charge-offs lower possible. rates and until successful net also costs slightly quality Credit begin believe elevated strong we believe to decline. to recoveries pressures, increase helped

to expect remain we However, it manageable.

the at normal Given full year point end forecast charge-offs XX date, our of to we strong below our to results basis approach range. remain lower to net but XX

We and adjusting X% X% impact would be in income year-to-year appendix. down to transition basis, for which the detailed Ameriprise approximately reported the expect of BSBY as the noninterest grow to on when a X%

Third quarter decline income largely expected income. noncustomer by lower projected to noninterest to is X%, X% driven

we recognized wholesale to our time. our FHLB the investments management decline encouraged million fee $X hedge program customer income over Within and gain from lower B grow we for to about Class the trends, these the and and lower momentum income. a second valuation due with exchange accounted expect related Visa adjustments customer-related derivative position. funding remain and project to we Despite forward dividends on risk based smaller consistent to income quarter, our another We X curve benefited very

a noninterest the basis, accounting impact grow special expenses expected year for X% recalibration, assessments, adjusting X% from on expense decline reported to the Full X% modernization to after to are transition. and Ameriprise FDIC

X% our and savings management the as to to expenses X% line noninterest strategic quarter to with second in levels from expected our calibration are relatively headcount intend efforts priorities. Third over reinvest quarter expense increase lower the we and risk

to we also occupancy to transitioning to maintenance on pressures. repair. expense opportunities elevated self-fund With corporate taxes, expense associated seasonally see our our seek offset expect continue We an discipline, and facilities emerging higher focus and with ongoing

the of strategic loan target CETX Even remain our in half XX% strong through ratio projected the our well above the we expect year-end. with year, growth second to

XXXX. continue half the Despite environment as will monitor to in position the XXXX. a we for near-term the We us we conservative continued AOCI approach cyclical momentum take second to pressures, well to year repurchases in of and some expect regulatory share

call back the Curt. turn I'll Now to

Thank you, Jim.

income of recent proud growth to are find results coupled our compelling. trajectory, the overall and second more with and our be fee We quarter earnings loan trends,

future on liquidity. As a capital across foundation strategy, unique diversified we Tying and highlighted returns with on our select we our enhanced have From Slide it XX, feel credit, positioned for of mitigate markets and businesses starts are and risk together and value we strong strong foundation a well designed foundation, we we feel time. differentiated deliver to strategy our over that execute growth. with proposition,

net We and expect due within maturities securities meaningful structural interest and to portfolio. tailwinds to repayments our anticipated income swap

we strategic this Our are income capital-efficient consistent results quarter. saw investments investments designed encouraging and from to those drive

we strength our balance sheet as positioned and growth Finally, demonstrated targeted as deposit responsible, is our believe initiatives. lender for leverage prioritize we our well a commercial profitable

focused While to the environment. on drive the of we of cuts, rate positioned our balance market regardless remains timing we magnitude the and feel long-term sheet rate value have

We we'll be time this your appreciate your happy and take questions. morning, to

is coming Our question first Ken [Operator today Instructions] Jefferies. from from Usdin

delayed could up follow some on Direct Look, ask Express the be like it you I'd and point. just you, that mentioned to to

the can start do average point? what to then of you the know point for that them is? would billion most all even the you'll think go the in actually I X, walk through think trajectory keep $X.X transition when wondering of the kind those deposits, time if at be of here? you I'm scenario, So the you under from to us important natural is, And When steps start just

Yes. Peter. Ken, it's

indication So quarters be, couple clarity as the with sort to sure know We of this it's service over make on transition would from months few a very little fiscal important I get of what them at to next of hope determined. really is the base like. this the does smooth customer working closely more point, the you, focus next and on really be is for that transition like this looks service preliminary. will here physical look the well. to us, a What that's is our tell to important all I to the

them. that we're And for so we that to to sure on able be want execute

leave, having very it you And transition. a experience, know. quite period. what can give the deposits we be that this now you cardholders. that period we would now, would our as a because just managed shorter really as tell I this as said than that And as believe a much a program time significant There's of I to as is time they take far of have period time long timeline look on long clarity longer this for like million about is while to the we a and when don't that for a rather X.X time. It's

learn going it, get the So And we that's to be something that that well. in will be hopefully clarity on as to you our would we coming provide clarity more as intention quarters. to

we focused feel a this company we'll leading manage to And our on model, bank running for continue to got and these more very as ways resources has what playbook I and on be would we like the business. Curt like basis focused feel able that relationship of We on our in also you do said really be to for comments. for be our lot whole Jim to redirect tell go-forward a as a we've

bigger Got it scenario even the it. Okay. there's picture then And question. be keep still and where long a decent to a could if just you hit it tail, In don't power earnings strategic power. is adjusting to thinking different level? at much this about potential in But earnings company going all, the a just where how overall, change of terms does if

I absolutely Jim. would our these that by intention out is over start saying it's replace Ken, time. to deposits it

minimize an as we of customer to we at no somewhat elongated probably will it replace and how our said, I deposits, do transition. We replace think these no Curt we'll course, effect. replace fit As be expect there will look it, with with potentially deposits be them long-term. expect see core over But Long-term, wait transition and business Medium our to do and that, it term, to short-term, model. the and the Peter of over impact, core goes. these better time, is expectation the impact deposits

loan-to-deposit the time Having levels that, start replace to a don't a it in We think of medium the ratio. us to that these emphasize transition is term, great intention profitability. to do our wholesale impact any a to low is balance strategically. funding, I it extent bit would said deposits long-term just remove And over of we sheet, there affects with

coming McGratty today from Next question is Chris KBW. from

about on the up with thinking following the react sheet. balance question, how Just you sheet, may your balance

bond less the impact? be the low-yielding on one great. Is got better over bonds, a scenario, with off an a Any portfolio be would I'm which of of that hit, selling You've time, handle would that a lot or a throws trying to interest-bearing replace Is perhaps deposits perhaps which get on. color cash. is --

which perhaps I We have continue portfolio anything and Jim. fund is buying the portfolio year now early longer-term portfolio and generate the again, the loan lean of the for related to Direct it's on issue, will I for Express. run way the the bond will wouldn't to time do type end is it next certainly by that of think essentially some the really, Express Chris, growth Direct year. program, The the think necessarily of year, securities bond a we through bond cash. longer of down and our be end transition between we'll

this shorter-term the point. portfolio more as So I loan fund bond a tactic our of growth view to at

many Okay. the it not that pricing? it comment, it to was years, this much do selected? think And what decision maybe, had was I'm having think, for how drove that you What sure you you was be can not but relationship

that we the you really tell of is bid like was candidly, don't felt I very of on physical come we was decision long what of comment service to a is can't a wasn't, this like competitive period time this sort comment can Quite and understanding said, What and our that it. full made. plan did program, Peter. we for or complexities the what Chris, with process that with we the submit

proud to And and up and very we're sort including consumers. how left the and one to of about we of the we right we've comment submitted parties what at service, we're of is So the both not able thing the being fiscal day, going to the these as all that years, managed felt the very end of decision this good on. process be for

Gizycki from [Operator today Instructions] is Bank. from next Von question Deutsche Our Bernard coming

to You're and talk just have your sensitive assumptions, forward since the color Page about analysis kind liability you on deck? I underlying the curves Could changed rate of of your it X interest sensitivity we on just XQ. forward. think in the how wanted

And know you've are from benefits $XXX there million there? then I any in less about just of I'm swaps drags and updates XXXX. kind if -- outlined wondering

liability Bernard, it's little be a Obviously, XXXX modestly more bit, which has to position to of the sensitivity curve That will interest Jim. sensitivity this occur in largely ended. cuts great I is back growing in liability point slightly think the increased as last Yes, liability but sensitive. do the quarter. we the neutral, I from according are of it think at be is a cycle. rate the that just

while It's the going We XX XXXX XXXX a assume of a play. not June in projection, huge it for really lift. is be to lift So the did more a of outlook. curve bit the little it's a

cuts overall again, late And So in really many because it are after we of the occurring the CPI the had report out, moved outlook frankly, year. that have that's if wouldn't came materially. updated these curve so

have the XXXX. the maturing the we outlines slide securities. do swaps on I Slide the in that maturities those have in Regarding the get we from and and million XX to about $XXX that talked maturing fact past about securities, swaps in a expect and uplift appendix

to in depends rates assuming rates to Now may were constant. of it If that's XXXX. calculation, very benefit simple rates stay when move, a We take some move. #X, were that

to assumes that maturities sense, million know, And will an occur reduce we getting movements these And in obviously, nothing the $XXX in currently occurs rate be it. the in absolute lift on be and not But maturing, down, So that other certainly the do the parts as books move swaps sheet are still a impacted, vacuum. also 'XX. a in you'd are including If would that all that they are going rates benefit. balance vacuum. of

into maturing modest that just as this have securities probably you liability get these in the we balance of if modest other $XXX that say million rolled and get So our swaps less and vacuum. million make a swaps but sensitivity. and $XXX sensitivity. all expected, you liability our for amounts than rates would what factors with But securities, sheet up perform And to those little would maturing a would I likely

play pretty really assuming of get But other, one picture, good or it things and course, you I it. that think wait the balance we big So responds how actually see as the we way sheet But we'll about model feel out. number.

just the then And on following Great. up deposits. maybe noninterest-bearing Okay.

of kind be And even X been X occur? high. think bit like past potentially was continued just wanted would obviously, cuts be will cyclical the higher But get X, mentioned, I Because narrative And would has obviously, recently. it sense you outflows X, it we on, to cuts, still migration, a changed pressure. it would continue, the the several than the it maybe relatively your remain get over expect if to rate years. it differential slowing is once

on So just thoughts that get think you how wanted some to could migrate.

Bernard. Sure,

for as have to do deposits. long as see some on We saying we stay rates longer, expect that modest pressure noninterest-bearing been higher

of we that's the at point. with cycle I this being natural rates at reinforce at apex think I'll are the that this level.

So little seeing part pressure. this in to And as the of year. do it latter a turn expect this we're we move probably the is it's downwards but where rates maximum uncomfortable,

$XX.X about think is be We outlook, In deposits QX $X than billion likely QX of than terms do more slightly lower our to overall that that. see in average billion. were the you

through in well ended see continue as below a noninterest-bearing we just actually We moving that's and QX, those see then to up move do We as And slight reasons slightly would as expect low on the So we point. increase down. we rates June increase to see think we that's XXXX. for XX. seasonal deposits where both

So on we noninterest-bearing but that be absolutely turning this cycle seem maximum of later with year. deposits, at the pressure see do to apex the we

Your next coming from Mayo question from Mike Fargo. today Wells is

you you industry-leading to have XX%. of said total So deposits noninterest-bearing

but double be I about average, peer lower. might think that that's going

us, so low been remind is high decades? And What's range? point last the you that that in where Just why ahead of over what's And the far the out? do that And peers? point? in of the think X settles what's

factor. noninterest-bearing Mike, the focused model. largest course, absolutely it's Jim. and of credit. is offer differentiates a are business that treasury we would ratio. for us. it's that driver somewhat to And ECA rate. management or part really I our fact of ECR really helps believe But as have a proud point orientation Yes, is payments put pseudo we the noninterest-bearing very because plus that extend you we would we emphasize of bit bit very I on But on do have that We really been little our decade that, that and a services. which when deposits Certainly, last the something of commercial a deposits. we an of interest huge

deposit. We expect to the get

We accompany those expect noninterest-bearing services. And to treasury to tend the services. deposits those get management

we go back would the ramped did throughout crisis, initiatives we've the in been before than Now many some to had the much ratio, prefinancial if banks the say a past, high loan-to-deposit industry. treasury I up. where had we the we've as lower that management past, that past in been in also very of

deposits bit offering much interest created don't result, more rates, past. higher were a as that broker going think we did so in the a migration. anywhere we're on And close to lean We to which as we little

business would We in But it's we business. expect maintained. solicit and we say, as and to our new it's emphasize our stay ratio out what I loan-to-deposit essence, go model,

competitive And ever at lot structural? to in this this that just nationally. another a as seems combining your environment? these for How regional the deposits of And do competitive buying much be deposit banks, with it's bank a more banks guide as you environment been Is How guide? and the follow-up. what cyclical? strategic with relates loan environment given would point change you other your expanding bank it might and The tough as see consider or

nationally. time. is deposits. on we of this think I'll California been national We're the comment Curt diversity I'll when to expanding are Mike, that's compelling. part A it. think a Southeast. for strategic But of then is actually terribly We've national first, just where I the feel of number in been Peter, and very maybe it from banks competitive our for and let model regional has comment in the long on comes a But expanding competitiveness long a I We've in helpful presence been Michigan. time Texas, our standpoint,

you're California raise to deposit-wise options. what So Texas trying us of gives Michigan versus lots in versus

in different to that tie number we're businesses a customers have that deposits also in We of ways a where handles lot for able national division, Services able to don't let's CD got small the example. necessarily really part attract TLS that of are and We've say, us Texas, businesses rates like our to business, our of Financial pull. we're

and time, it last model, as regional really a communicate, just So banks, a It's banks. is us quarter. it continue But lot I competing with community long with you. competitive think seen our again, not the about to and gives tried larger picked as across that, and the we've advantages of loans and pricing terribly compelling of banks country just in diversity has on to deposits, I on up a lot structure, now, in right totally as agree in the we've the

might so Curt, I And to you. flip

thank for very question. patient Yes, the on a And acquirer. Mike, you have the strategic side, we been

years, the last opportunities growth And the and grow the good the model. organic of more base. And that we growth we well on recently. acquisition side one customer to done in expansion years, markets XX think operate really perspective the we've to have continued We in as as just into to have have into in all lending our that we continue the seen markets our from expanded we've couple nice lean asset last of

far, certainly, We Thus it's around focus. wait and at to in would have was sense But not uncertainty and environment not our it's would again, lot a of something it an lot et for very economy, M&A and strategic, be been We'll a take because cetera. look one regulation a cultural a that good of of our us primary with fit. environment geographies. see the primary unfolds. But occurring how of

organic on Our primary we there. opportunities focus continues to have really think we be good and growth,

Next question Gosalia from coming today Manan is Morgan Stanley. from

demand start on really your remarks, industry, I across prior weak. Is with the pretty in cetera, demand? away? if So conversations Apologies your of are to but pipelines you comment can talk the with been? back But it about Can come it have your robust. think bring some that loan back, rates when that can going I been missed on with loan right? has what this et are conversations elections, Is uncertainty you lower just customers going demand to the customers

Manan, it's it's the answer all little Peter. probably question, to a your I guess of bit above. the

that, we lead now more some to some rates. demand. sense think impact that rates loan with I extent that our is that, would right #X start in loan the to And demand demand or see get the we to that the hopefully of driver interest surveys loan impact reduction customers, in believe we

to are to to of theme elections. And kind a I wait I'd the unfold believe the look see then what Curt environment, as -- what heard feel as then wait regulatory to the of you and get businesses I just going a it that's November. is sort to make decisions. a it said, little bit and how your long I talk acknowledge, when time, that a to, a see things during year and when I -- would just, comes there's like customers, of And to And years start that presidential through election like going after most they want I've for owner-managed historically, call

loan we for interest until probably we've I this. So the pick through the start know been feel up point-to-point real come the down see and doesn't still a positive think to growth election. I talking of overall. But get outlook like you banks We're showing rates half demand second to number your XXXX a have and point, got of for We good year. about

quarter. anything I there notable or to the that hearing And as And conversation impacts to pivoted C&I out the to side. slow economy, concerns it. call how overall? maybe credit credit opposed in on some do around I from moved think specific borrowers? CRE. on has starts you're the credit But Anything side to lower. growth nothing seeing the know as you're you think Got portfolio of assets Criticized this the investor

we saw industries improvement. Melinda. honestly, book It is was broad-based in we of middle Yes, that number really core pretty this And nice of a are quarter. the a the where Manan, obviously, different embedded across pretty market. C&I was posted sort in

any one not So -- I'm trends any we're seeing in segment. at not point, this seeing particular

have flow navigated C&I. quite quite we cash type And by, if are Obviously, utilization Now frankly, having consumer, they're is exposed probably the little really are the to tightly. slower rate improvement in they more a said feel bit low. to that, BXC show bit environment companies, nonpass be customers a service-type this high that and companies category. good really challenged going frankly, managing little about to some that But

and debt. So that's the to have quite probably frankly way, they most where efficient some want cash in pay deposits down to high-cost the gone utilize that of is because

not I continue was quarter. of events focus, but does lot mean customer. good manageable to to there pretty this our So some very portfolio. be impact a of C&I migration. a level some well. see perform real stable about going to continues could particular that feel estate, in It Commercial idiosyncratic And That not the that obviously portfolio quite we're

and We from also the housing of very rates, housing of COVID. environment stressed coming is for out experience because at but delinquencies It's was no senior very just to no in point. elevated stable a our perspective, portfolio, losses this credit continue which nonpass but

seeing major not any So cracks.

soft And we'll any As economy well chug as is along landing at arise. think if okay. the there issues to strategy, continues of sort I long that we're that be reserved

UBS. from [indiscernible] from coming is today question next Our

go wanted demand a the to back bit. growth just little and commentary loan I to loan

is loan I'm the half, in the sort assumes that there demand. how same key a And to So ramp-up here. what said is trying about of square second sort catalysts the time, November guide you at of obviously,

you see quarter is I help Or much third of you So could demand there pull-through sort something could well? the XQ? happen in guess, see that how in the is comfortable makes understand, expected that the already us just you we of something pipeline that as

we I say, guess secondary November the would would just to ], Sam growth. quarter that still point-to-point And where this factor is $X now, as billion think up loan interest growth. that. coming we the I [ X% a and as factor sit would I right kind our with pipelines Yes, I #X though, that that's had probably And We of be of think rates. I see we're that point-to-point loan say great

the for continue, the be year we to should we're by and see. is able see that, we rest what what so encouraged And that of

would I of occurred a that that think into the that see I broad-based rationalizing, rates as through do last year, pretty back getting is don't we're that number be realization pick you second get it's it's in will, I businesses. XXXX, there. of growth That until businesses come growth we and now of pipeline But up, if And up. tell everything you, really had our that said, we And of we start start to really, sort to across year, picking we to some of the I down. going interest think will as the half much

that the half forecast, we the we now, about good as looks we're really how sit second right managers showing. on the feel outlook So of year our

sense wanted to trying happen dollar pull around it? better to components to I'm Or it follow-up it. leverage would rate a deposits. And these the some bank? the into simply bit are looking for what accounts? get sense before Is increased into Got And dollar into actually need back a to see move the in would get I a just balances cuts? is to there XXXX. better noninterest-bearing my more for that see need we your just mind meaningful just maybe

Jim. Sam, it's

deposits noninterest-bearing specific so We as down, guidance a environment. activity, that's function does start grow, a And then at see rate not question. GDP things XXXX some come factor. course, Mayo's equal, But point Noninterest-bearing X we're Mike it really in And typically of certainly have just like are time. again, to this certainly us. One, answering look things. any of overall do offering all we're grows emphasis as a going growth Business back Of I for deposits XXXX. economic going to to nominally. the rates would say growth it's decent nominal

proportionately capital to with market You middle levels within working that. money businesses typically expect grow supply,

think do this of right factors we growing the year are start in deposits a again, then noninterest-bearing So pointing number direction for later to and inflect start growing XXXX.

us strong we're we're going like, now, again, the cycle, real somewhat right feel we apex we but for any move as see we bank commercial really of that -- so in tailwinds And some through and XXXX.

the to end to session. comments. like I'd closing of any over our We reached back turn the question-and-answer Curt for floor further

as Well, day. your have a hope thank we Thank and Comerica, for interest you. always, you you in that good

Thank teleconference. does today's conclude you. That

today. thank for participation wonderful day. You at line this your your may We you and a have disconnect time,