U.S. Bancorp (USB) 14 Oct 202020 Q3 Earnings call transcript

Welcome to the U.S. Bancorp’s Third Quarter 2020 Earnings Conference Call.

Following a review of the results by Andy Cecere, Chairman, President and Chief Executive Officer and Terry Dolan, Vice Chair and Chief Financial Officer, there will be a formal question-and-answer session. [Operator Instructions] This call will be recorded and available for replay beginning today at approximately 12:00 o'clock PM Eastern Time, through Wednesday, October 21, at 12 o'clock Midnight Eastern. I will now turn the conference over to Jen Thompson, Director of Investor Relations and Economic Analysis for U.S. Bancorp.

joining good Chairman, With Terry Officer, President Chief Officer. and Andy today Dolan, Jodi Cindy, call Financial our the Chief Cecere, and Also Mark Richard you, and morning, Chief Credit me everyone. are our are our Thank our on Officer, Risk Runkel. us CEO; and

today’s release schedules their remarks, Andy as risk a forward-looking available the copy press A presentation. call slide website release, presentation prepared change and I to and XX-K presentation, referencing over at analyst any that Factors today’s During and would our remind of in as subject our statements Andy. assumptions well could and subsequent with on on current described our turn earnings like call file Form reports on materially our now the slide during made are to of you Terry in are will supplemental forward-looking the usbank.com. are and SEC. be our uncertainty. X will I Page that to

Thank and for Jen, everyone. you morning, good joining our Thanks, call.

X. of Following the reported Mark remarks, Terry, Slide will quarter, I any third you $X.XX. share prepared have. begin earnings on and per questions we I’ll our take Jodi, In

of sectors expectations, with year-over-year for impacted conditions of billion business line Credit more our basis, Our lines. commercial income in both revenue across reflecting and $X our number a by was metrics challenging driven quarter some fee linked in higher performance by strong primarily quality COVID-XX. operating deteriorated

credit acquisition the third of limited State Farm. our addition to build card reserve However, from in to the was loans our $X.X billion of related quarter

quarter, The quarter, increased we metrics. and equity liquidity the bottom our positions investment shows X third delivered our half sales, of capital right Notably, mix this digital evolving activities. business demand of are declined. and supporting cost Slide remained and sales behavior. sharply X.X%. deposits capital on as for tangible capital key Slide our loan provides performance growth, XX, equity. in its more will efficiency deposit slide focused highlighting drive strong September for digital time in Digital return to At loyalty well topline now area In steady Tier channel a our deposits opportunities. common how higher and the more investments X shows remains quadrant as Our common strong X moves us account customers’ customer improved position. while the was ratio XX.X% savings cost activity improvement and our than as all digital third that

Now let color the call the turn quarter. more who over Terry, provide on me to will

Andy. Thank,

second a turn the X, loans, X.X% required the as loans trends. compared Slide part balance of of with you early third billion followed credit July, we earnings review In discussion new to added $X.X State start Farm. sheet declined alliance If with with I'll Average by in quarter quarter. our card

average SBA Additionally, Paycheck the Program under by in on the $X.X billion loans made quarter. increased Protection

more was loans, third and strong C&I growth of quarter. downs the Farm the pay average PPP strong in X.X%, loans given by residential offset market than State as the declined mortgage the during capital by activities Excluding impact portfolio,

deposit deposits the X, to second and increased compared mix with quarter, X.X% average favorable. Slide to the overall be Turning continues

closed deposits deposit the of to add non-interest Farm, which while deposits early fourth on billion declined acquisition State XX.X%. the time and increase from Our deposits $XX grew bearing we quarter. of In liquidity the XX.X%, balances October, in will

current credit expected under as X, the quality deteriorated the Slide the economic quarter. Turning third in environment,

estate points in partially by with quarter, portfolios credit compared non-performing and Our the was of ratio as quarter, of lower The were charge-offs. end quarter. the net compared second with other up net of retail end at charge-off real other offset third the X.XX% losses second the X.XX% to ratio at the higher estate commercial in quarter, and total and X.XX% commercial card basis assets our was real third the loans XX

loss quarter. card credit loans a the to $XXX provision included third in The Our State of loan million at related was the amount million quarter. acquired provision Farm beginning $XXX the from the

of for government as economic totaled credit by offset of consideration level losses allowance of XX, our billion of or best slower of allowance unemployment, reflected elevated partially loans. and benefits growth stimulus of Our programs. September X.XX% $X.X The impact the estimates the

quarter, in on X.X% case of assumes Slide X.X% before quarter by factors quantitative and based and highlights rate by X underwriting fourth quarter our for XXXX, judgments, our breakdown an many outlook loan key loss declining allowance increasing third qualitative are estimates loan the metrics the of category. base to fourth While slightly to X.X% the XXXX. unemployment of somewhat

support produces We and by sensitivity based allows considers stress, that growth economic flow the have a culture strong credit relationship to U.S. management banks, at consistent to lending, based supported and cycle portfolio throughout which cash diversification, results. us proactive

The payment to Slide to exposures meaningfully the second since the current table given declined compared relief Turning environment certain has second risk segments left with shows at top quarter. stable the that and are the XX, quarter. volume of

New requests the Slide states share. of diluted we per quarter and earned have in reached XX In an peaking third provides earnings $X.XX steady a April. XXXX, summary.

billion cash volume. margin point income second interest the interest a to decrease with of basis a fully was net a loan in interest X.X%, in as equivalent increase offset the increase in $X.X quarter the impact Turning compared up our of X XX, was The by margin on Slide net taxable balances. net lower basis driven

industries. product XX quarter, in in of from to non-interest impacted Year-over-year deposits in acquisition increase deposits with the payment as to Slide was provides and commercial the payments balances the lows. services second due including charges, pre-COVID revenue drove exposures strength highlights about while by quarter recent from spend levels. primarily mortgage payments information spend banking consumer consumer revenue XX income, continue service Farm. quarter lines, compared increase, higher and Slide pressured State cash revenue growth trends activity the recover the to our to business reflected fourth year-over-year reduced expect We linked

the economies our improved spend quarter from unemployment state third as activity improve continue of throughout trends consumer However, prepaid In credit the distribution increased. benefited programs that the revenue cards. local utilize processing and card quarter, to state and debit and sales

We activity expect this fourth to the moderate in quarter.

Over the activity payments tied and closely to resultant trends. are volume spend long-term revenues sales the

most expectations, COVID-XX-related by costs related capital expenses as higher claims to basis, Turning on markets Slide costs medical and pre-card increased a higher in production. revenue quarter our X.X% saw non-interest an increase Relative X.X%. from expenses year-over-year expenses, mortgage non-interest XX, linked to On a expenses increased basis, related business, the driven we and X.X%. to higher employees regained services XX costs prepaid was capital ratio Slide the orders, stay-at-home XX tier processing our activities. related guidance. access markets position, following card notably, tied X to September to capital medical provide capital our equity at forward-looking the some revenue and I'll and highlights activities and common now mortgage higher

the expect we net be fourth to slightly. For taxable income XXXX, flat down fully of quarter to interest equivalent

reduced to refinancing revenue third and somewhat consumer revenue We Payments mortgage a year-over-year due spend expect to for to slower to basis likely on the is seasonality. decline adversely and business activity affected activity. be continue compared quarter, industry the to reflecting

to stable third to be quarter. non-interest the compared relatively expect expenses We

reflective loan economic net on depend of of in including for reflecting outlook reserves beneficial economic and current from government portfolio and quality, stimulus. offset charge-offs to Future non-performing and continue size will of We performance, credit conditions. mix, expect both to the assets and production, factors, levels a number increase levels changes any from conditions

the of adequacy the assess for to change. conditions continue will as allowance We credit losses

rate tax year taxable the I be For to XX%. of it closing full back XXXX, expect equivalent hand for to remarks. we will Andy approximately our

levels. rate the below high remains historical is Thanks, showing spending is unemployment standards, outlook economy but Terry. consumer The of uncertain. The recovery and signs by remains pre-COVID

environment. well-positioned However, economic navigate we and rate interest more a are challenging to through

liquidity to long-term and by results position capitalized We above value strong. performance. shareholders average driven for equity are cycle, on is reserved, well superior through remain We well this credit delivering both committed creating PPNR and by our returns our

diversified discipline. results benefits credit Our third our quarter and underwriting earnings of mix highlights business the our

to market trust investment that share time businesses, optimistic high payments we continue and return our are We and over fee win such mortgage, as across services.

to strategy preferences our continue network. adjusting adjust as consumer our will distribution including evolve, We

their which with State banking digital light a branch an over months cost highly low we Our way. how transformation were that close would Farm early XX will can that ago, by the example, State majority brings we At serving that our X,XXX agents closed we XX% meaningfully plan capabilities efficient of reach at of about initiative better in remain in together XXXX. time, additional preferences. about with customers were now closures XX% our of closed. we Separately, XXXX. is Farm, alliance our rate announced branches an XX%. aimed we To-date, these and by COVID-XX XX% close additional early our announced We evolving branches have by The they to to impacted expand

While where physical I'll few we interactions take future than the to be need branches fewer even will ago. personal always be advice of transactions a more and and branches years branches need conclude the did we today XX. And centers important, locations on place. Slide

Bank to has challenging we times, key remain as the Our employees our more supporting of the been U.S. and well differentiator communities times. customers, story, in and as committed culture always the our a good our

the I even throughout day a do ensuring to a that there every life on open always hard has inclusive and Q&A. their is way. all our to now important in we We'll bring who up want for the to year. employees thank our it While deliberately been us, to today greater that emphasis culture call work

ISI. John is Evercore Pancari Your first from question with

Good morning.

John. morning, Good

John. Hey

factored expectations? expenses branches? Just the of in and us I your if -- you on guess, your the think of step can that of projecting that could into if the kind just Is this expectations cost can the Thanks. impact you consolidation about Is the branches. elaborate how up see you expenses? efficiency comment regarding on help on that impact

as goal of we're or into greater Yes. continue of that And associated think be the to in process. things it, especially be we well. is cost savings our we John, more particularly able part the the question. respect And important, this flat. investing will to can the in bottom when kind relatively do one that with digital And of capabilities. imagine expect that will flow reinvest is the the the with branches expenses we part cost manage to to saves come line. to about we future that environment in will our it to use opportunity will expenses, And great in you as The business, considered factored of have

kind it. of how that's So thinking we're about

this? you rationalization estate be outside also real up then of thing front. also savings And corporate branches? on top see incremental more opportunities of could -- do you that on the just that Okay. Are to ratchet And one

Yes.

at at only not look the branches, will look we real estate. we'll corporate So also our

still But obviously because does One corporate is to opportunity things of from XXXX. of through that kind that a workforce the management I think impact look us real we're about estate. to will working we what horizon next the as think for do able consolidate that there's be like, perspective

one card I the side. revenues broadly wanted see payment, the your here? I payments, Terry. by several Okay. fees on get the more more to thoughts on over and prepaid on months? definitely that in but helped payments quarter you And know get your payments just the fees. And corporate Thanks, the to commented trajectory know on this card where your then you given I projecting consumer just just thoughts revenue want next through better your thing came processing and expectation,

Yes.

say So, looking back at good, quarter the and And across excluding all improvement actually nicely. the business second sales spend come I one has you’ll that and is the different since travel of of airline see see at entertainment which span continued we’ve those areas. would consumer consumer the slide one to is end the thing very in that

that be period a be in I that some to impacts trajectory overall. business the tied first consumer to is a particular the spend bit basis are point that will on for might not by which the payments go little lift in quarter, of be time. time. we card it’s quarter, something that programs. but stimulus respect a driven see prepaid a of forward little risk lumpiness of will industries There or that the bit think this the program us in for growth those with at If stimulus in of really give So at contemplating business fourth example some third we will the really Ultimately, the

corporate card has Terry spend acquiring, payment And and system. as I credit add, were every across is Andy just issuing each a since categories. that categories merchant month would improvement continued been for see slight and this all John then all three mentioned, there well as in The as the across those those improvement we April, occurred trough in

it. Got

Thanks great. Terry. Thanks Okay, Andy.

Okay.

Yep.

Carcache with Research. Your next Bill question Wolfe is from

like Andy one? you Thanks. rising you guys just the and have else that could Or morning conservatism? Good from Terry. here. rate give color unemployment Is you are bit just something It that is a if little seeing, on sounds that guys of there

think maybe and though do reductions if that industry of in see don’t anything some airline seeing. it’s are industries. expectation America you and I think I entertainment it’s to Yes. about -- that specific the you whether some our think corporate starting in force, we’re the

programs differed of of that companies taking the actions. some because that, existed have think stimulus those I those have of some

down. levels, some start back actions unemployment before of expectation about going Our impact we as they is fourth quarter come to those to are think the

Understood. to curve? short end give long end question could you the And separate is, a sensitivity your be if that there the would guess you the of how would I great? versus gearing that is characterize And

How am we’re -- sorry. I

Interest rate sensitivity [Indiscernible].

Yes.

our some period to a see maybe little about just bit time. fix XX% stepping for balance So, is on floating, turn of We’ll sheet the fixed. side XX% continue of back,

reinvest for manage with and in bit to always we of to We’re that. little to looking continue opportunities investment duration, able be more the kind a portfolio

to Our liability time. period the we’ll of it’s position bring asset so sensitive think better in an first for we’ll industry a we because since end relatively When the hold by bit. the been quite that some I on immediately quarter increasing a in on manage and short liquidity trade opportunity deposits we’re And that widened the way example asset generally in of of terms future stable. continue as levels, off today. then increases And that widened, and that is rate kind

could in last I Got one it. if Thanks, Terry. squeeze And one.

guys their have but roll source benefited of that margins, a competitors that benefit future if hedges begin your support as in net others, I hedging guess that wondering place have to give of Some relative I and haven’t And you guys hedges. programs that is because design positioning? from for hedging those as around with to you or by color you served strategy have should headwinds. deal interest materially guess to off just can don’t Is there any

position. of a use hedging as we historically our up Yes, just sheet typically the balance or setting way of liability assets kind

of I So for we of utilize composition portfolio though example And to in active do do gains duration came don’t able our down with some investment a we it, I not nicely to a we order lot and major did help it’s bit. which you think But middle were last rates the tell in of hedging. that, year. a program. associated lock so part our when do hedging we will of will

questions. my taking for you Thank Understood.

Bill. Thanks

Your next from question from comes Cassidy Gerard RBC.

Gerard. Hey, morning. Good

I sectors. charge-offs out in commercial some and call and took you you noticed some that on move Good these COVID-related Can some Can us you estate this the real some Good commercial what types you seeing guys the the color? in additional required of write-downs us morning, that sectors? terms morning, give of color period in Terry. you're Andy. to pointed through with time are of give

answer Hey, is good Mark question. that Runkel, Gerard. I'll This morning,

in performing expectations we line off principles know, guiding this off, couple think managing quality And by a we at as point. you credit credit. in with First our start is how about would just of saying I our have

throughout the identifying as when at problem working two, in being, very we're that very arise. credits is consistent stay through cycle. and our they First we underwriting Number proactive

you the is, did early and our as commitments is, And say so increase this is particular the I seen, in this criticized in result downturn of what have that would cycle.

did And our as the of charge-offs, quarter so, increase charge-offs, that. we at of result as think level of least a this

throughout credit So a to in the it's quality very end, issue. to the think going timing superior really we And have cycle. economic we're performance continue

know, industries the that Mark, to portfolio, exposure we've at-risk that actively in order bring And very managing I down. been

right. That's

the That's the driver net behind levels. charge-off

right. That’s

hotel maritime And on I you Are ones individual the written terms write-down? [ph] seeing do there or if down, basis? were the in don't to these actually an biz of any you portfolios, you what was XX% XX% that or seeing properties know within write-downs, be have credit

think, currently are of kind exactly in I range about. Yes, you we're that talked that seeing greatly. that's the distressed it's I that mean, so range those properties. most it And are on does property the those specific, vary that really But

I see, just from programs of universal XXXX. a out of and bigger support may charge-offs the be because types the I pushed banks type into of have discussed mean, programs consumer center follow-up, money other the the some as that net the fiscal of second-half

them Do color seeing have charge-offs? of any necessarily just So side you're it's you what of it. timing for not terms there the avoiding consumer on guys is the potential in the

due of do creating once those unemployment would The all indicators I in some right given to this acceleration wear all see of bridge. in. that are point deterioration, is start those are the environment echo Part economic and credit an things, facts stats plans, those benefits the XXXX, is you comments. to now, we'll for stimulus expect portfolio of delinquencies, than the that a those would good consumer to the positive benefits, portfolios, start really more certainly we're the of that I bit down. Andy. at credit the a expect, the is consumer Gerard, which

Thank you. Great.

bet. You

from question comes next from Najarian, Bank Erika Your of America.

morning. Good

Good morning, Erika.

that that you positively? starts timing another that those on quantify the your of and if could expect run of your take closures when rate branches you from wondering impacting I'm to And the derive savings incremental big identifying a XX% wondering, you offline. will I'm help cost announcement

branches, really the in range, as But even the will of expense come kind associated again, benefit. a just with at that $XXX start looking expect savings our impact will those do quarter. reminder, first rate up through to end run hit of opportunity minus. in We terms that see we potential that it's that or or plus when Yes, million in some of to

reinvested of expenses. terms also some will have in And get an it's of capabilities, digital in going to impact which

those been to XX%, Erika, period. as is additional the COVID branches reiterate made in result majority I this I of already of remarks, or my have want XX% that, And which point you a about so think around great prepared during the closed as a

really this in permanent in of a acceleration and again, and changes is resulting an digital they what And are behaviors transactions closure. So customer all We of reflects activities. saw sales.

You saw and period already the we're again, months. numbers few XX% only sales what have during is And that of that's closed accelerated COVID the lending those over the on the And doing. last result activity. about been

calling think to as Thank terms to are those it. statement those COVID-related XXXX expenses in I COVID expenses out And this you a expenses dropping it Got think elsewhere reinvested pretty XXXX? at we savings, in good quarter, XX about your related shall last about we that outside Or rate? all have you. of of expenses. those in to of follow-up potential flat, off run the be And running quarter. was XX guess been going perhaps as

of both. a it’s little bit Well,

will our going the to of it bottom of year, starts part to do some be of as in. of our of of about expenses So, until And when think a we expect XXXX, settle we that part with will work continue about in environment business at forward. those the early line, associated return again, to least then, accrue it kind reinvestment part COVID-related part the will savings into think the that we

quarter. And follow-up it. one question, clearly just more strong Got a

growth in terms bottom owning changes we further outlook interest from fourth would outlook be here, interest that from flat better re-steeping anything we continue quarter? you rate think we'll of the any to curve or get And to as to for see back are NII And without it that the higher income confident of an in in pushed opportunity? banks the rate down net your think whether about quarter portfolio inflation yield-to-yield it's due the outlook. managers the I fourth slightly,

little income in net amortization so there's kind it's what call it part is. the just of many -- hits and puts just premium think puts I different demand from of and of There’s the Yes, a when terms exactly takes I rates hard and here, where of to impact interest a kind takes. loan and of interest lot of trough. go mean

example I it's So, for bit XXXX. early a for think little it's us in say to

you. thank it, Got

Thanks, Erika.

Your Juneja from next Vivek question with Morgan. JP comes

Hi Terry. Andy, hi

morning, Good Vivek.

morning. Good

I'm XXXX. out of I choose bank, without as happen time request, know you're first give the so since listen Andy, at is two the one team just we for never Jen something just do major I'm I earnings your on going since the have to, you of put to So guys another going especially you. hoping which dates them same to trying a so make authorization to know that don't to list calls this can you and call between to just all wouldn't overlap to exactly starting you work. to that Two listen

one I and which in time, it's October those between two it’s to banks are. XX as since all the one's hoping follow-up April six I'm can Jen months you the So, can with away, and two find and in is and

a… just that’s So

you [Indiscernible] Okay. know yesterday. I

know by on my the the call answers don't been if questions. I told the You IR to what, trying. we I've get ask I keep question can't And

of exposures? in that? little hotels you the also the sense of type versus any your mix, bit And upscale, hotel can small us budget, credit Terry, COVID-related size So give of some urban color town, on your is exposure, percentage of color

That's question Mark. a perfect for

property and Yes, say a diversification by I'll type. with lodging answer the I'd we have great exposure. geography

suburban, between distribution mix there. got we've great urban a it’s so So and

we’ll get really to So the in credit impacted you and terms have size offline. follow-up that. industries for that those of good before And felt we commitments

next fourth consumer you come further NCOs categories on Andy Okay, still Terry quarter. charge-offs to further that, was year. Is Terry's that more rise I'm to follow-up credit which rise that's in to any Mark therefore come great. going And are expecting that? the commercial and in made. think said comment NCOs you comment on but to then, I that color

noted the the we're side Yes, the a quarter good in -- be continues where they delinquencies strong consumer I and as think spot. end really to of our very Andy ended

the think of we through continue year. will this true remainder So that to hold

work we're those real as continuing year. commercial of commercial malls some the on to in think well the industries real impacted really be through exposure I that remainder side to estate work the our and as it's through this commercial side, lodging in more the estate going we'll continue to of

Vivek Mark and team of where that of our think being categories terms in exposure very highest Part we reducing is are. the risk active

So managing be and exposures about around try a in fashion. very talked very proactive the past, early we down this we've to our in

Okay, great. Andy, Thanks, Terry, Mark.

Vivek. Thanks,

with Peter comes Wedbush next Securities. from Your question Winter

rate just outlook Would the Good the morning. suggests I'm fourth there the to move quarter? that that reserve with building unemployment be curious for in some higher. could additional

in second been something a when of No. our were Peter, looking the the outlook for analysis was we has that quarter. part at That no.

so, don't impact any we would have And on CECL. think that that

we fact, this point based time, know, any we build. additional what expect in at In wouldn't upon particular reserve

no then, Andy, fourth about it just are the ratios of restrictions? view to were more strong. restriction stock at Fed the you keep which on are the the very to levels, If look course your and Okay. Fed buybacks, talk that share assuming quarter. just lift Can capital reserve buying and back on And I

resubmission a right CCAR banks capacity, large the now. If process through Peter. We're bit are going do we'll have we that, all

terms I think direction a that'll of in inform into of the XXXX. lot Feds us

where we're at. that's So looking

Okay, thanks.

You bet.

with next comes Your from Spahr Wells Securities. Fargo question Christopher

Good morning. Hi, Good are how you? morning.

green of temporary of what kind stimulus? kind going you quarter, it's quarter? this you the the that into from from regarding fourth do much So past to growth the trend was the much think And how shoots? And how think of that payments say is do

recovery Yes, quarter. because third kind strong a the quarter, was program. trajectory about second reason I the of think such the think of stimulus the you And I why you certainly think saw that's when from the helped,

So just I it's quarter, of of impacted. the kind would be sales with in we terms think increase airline, clearly we seen fourth the commensurate the what travel When I and been call -- will pre-COVID, have about think levels entertainment. more what the excluding the in

a core very to those basis, on other that. on the of has clearly, spend impact level, nicely. regarding consumer that be spend because kind year-over-year recovered it's the still risk But down going at it's industries So and of had

And your then digital as are mostly talked BXB. Andy, you follow-up, oriented. processing, Okay. gave you whether But metrics about it's that some you've merchant a opportunities, Can your additional give and color you you what their change XXXX? revenue -- be and customers your how like commercial think are benefits what And say on could do behavior? in to think expense going be consumer the

Christopher. Yes,

and that more because and corporate, the will banking, the some probably rails go customers. think them we payments, to coming our new the that commercial are already platform forward to commercial many a that of are around I think together little impact all And built So is basis. huge management business it serve a opportunity, corporate the business a being of about in digital there, into ahead XXXX, bit of is consumer probably corporate terms migration to activities. continues and as processing, of of on remain merchant treasury Part

probably that's that So little progress. you a bit for report report on event, XXXX could and so we continue to more our we'll

you. Thank

bet. You

with Scott Piper Siefers next comes question Sandler. from Your

morning, Scott. Good

problem struggling of excess question. guys. Good deposits. class guess I sort high Thanks this morning, deployment. of sort a liquidity on for your Terry, just on of question taking thoughts Everybody's with quick the

you're curious to about some how of rate that, appetite Just or about the willingness deploy interest environment. thinking just challenging given

question. level top very just So

feel liquidity see to being industry duration to extend into order result, portfolio, bit. hate end to out for the billion for will make you are consideration the that be over some there, time. are you today going levels fairly the short We Yes. period in some the much it. think in as in the to incremental a waiting that That's only further kind at longer said, able to levels long a we look like, the and investments come lock but the up little looking we'll end. to end a the $XX alternatives curve deploy come Again, the to rates pretty liquidity when on of I extent of good, out which a that in of high to have curve kind opportunities That and will you're to investment taking keep of pretty low investment not us, kind bit for of of in, up

balance on you kind the out. data are loan perfect. of coming that side Okay, and the demand. numbers evaporation Thank this HA see of is you. other all then can And with through sheet, of struggling Everybody the in maybe the

Just what high you're are it's vaccine, is or the of curious, that answer of guys whether election, to given level, when just would a reverse? to what how guess curious at mile guys be as I you to So more markers signs begin certainty sort there you knows? thinking? who see But are much it looking country the what could

the the impacts greatest in third quarter the bond issuance. of was One

they're issuing to their XX% reducing advantage low XX% balance think from rate So in about because productivity. was debt. seeing that the interest seeing if of you was they're environment related decline high earnings, a strong of companies about just sheet and commercial, about And corporate companies take

because will the to in interest that So curve forward. issuance I was going activity those rate And really of there would the quarter. the yield function a environment two moderate third so and factors, debt much expect the be

appreciate you perfect. very it. I Thank much. guys, Okay,

bet. You

Scott. Thanks,

comes Your Smith David from next Autonomous. question with

Good morning, David.

morning. Good

expecting bigger growth expected was in you the mix are you non to mix that terms just it said was the card around pre-COVID. still pre-COVID? there, you spend the have to than case recovery off, T&E in debit a But of First the where

second your sorry, I'm was? of question part the

in the In are the and consumer of expecting credit, near-term? debit between you to weighted more spend of towards in credit the mix the terms be versus card still debit debit mix

do. I Yes,

they being cautious the they I think that effectively people, again, can more debit manage and are because liquidity. card are so utilizing fairly their

than more debit in on balances have little a know still high savings cash have they account using they're they past. when think as what levels consumer you their fairly the the their in savings So side, bit I card are and

actually entire compared sales card so credit during that And frame, throughout timeframe time to strengthened have the cards. debit

the bit. think little to do a continue will I change So mix

be consolidation? sounds from stepping And it then expecting one-time magnitude $XXX the us closures, sense and of any you any And there? the will around are savings like can help on up gross there expect might million, the get but branch we you costs the timing branch

Yes.

bottom we third that impairments, revenue, a some you that principally that in because the other So take those things the with in investment two and were up a gains neutral asset closure did of it's is the related if offsetting net branches, charge to income quarter, equity line. looking on end the included to fee we're the at essentially though associated basis,

Great.

you're going not major any process expecting So forward?

We any don't expect further.

Great. Thank you.

this are questions at time. further There no

to you earnings everyone, have our call for department please listening Hey, Relations call. thank And the you if any questions. Investor follow-up

conference gentlemen, this call. participating. today's Thank concludes you for and Ladies

now disconnect. may You