U.S. Bancorp (USB) 17 Jan 242023 Q4 Earnings call transcript

Hello, and welcome to the U.S. Bancorp Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] This call will be recorded and available replay beginning today at approximately 8:00 a.m. Central Time. I will now turn the conference call over to George Andersen, Senior Vice President and Director of Investor Relations for U.S. Bancorp. ahead. go Please

and and our Sarah, Cecere; everyone. I'm John Terry Today, Vice and Vice Thank Financial Chief President good and by Officer, Dolan; Officer, Administration Chairman, and Andy Senior Chief joined Executive Chair President you, Stern. Chief morning, our Executive our Officer,

at and John on With the as well presentation and referencing supplemental schedules slide available will usbank.com. release are analyst prepared website their Andy presentation. a our as our be remarks, A of earnings copy

that uncertainty. materially note are risk Exchange and current file today's Form of statements call are during and our Please Commission. release, X assumptions XX-K any on made with Factors today's its forward-looking the subject forward-looking earnings reports presentation, described Page Securities to change and on could our that our subsequent

our Terry remarks, you Andy. I John will any over take turn Andy, have. will to questions the call that now prepared Following and

Good Slide that which call. per thanks discuss morning, of $X.XX, of for included Thanks, fourth and more detail. earnings in share will our reported items notable In we X. share joining everyone, per George. on John $X.XX begin I'll quarter,

totaled Excluding fourth the per these share $X.XX quarter. notable earnings items, in

on offset and pressure fourth $XX.X on net we to an net the income. $X.X demonstrated basis, strength billion, We billion. quarter, For record net totaled businesses, fee for helped which revenue year, full of the adjusted generated revenue across our interest

compared maintaining basis to quarter disciplined on return funding corporate linked-quarter profile. our lending us deposit lower be Turning deposits that lending on liquidity were third focus as position by pricing reflecting on Average to continued opportunities slower hurdles. the strong Slide Total X. while more particularly allowed declined and our a X.X%, our demand, in loans with meet

further balance strengthened quality Credit loan reserve. we loss by pre-pandemic $XX million quarter, to this sheet to the adding normalize towards and levels our continued

ratio ratio XXX ended book of we points our tangible an X.X%, equity the share Bank higher fourth capital of increase XX, quarter. points increased than and year quarter ago, XX value common is from This Tier basis a of December when year acquisition X at the per of basis XXXX. Union As in the XX.X% completed this

strong our approved common common and this the dividend on Board by delivered in quarterly return On equity year, our basis, return provides $X.XX equity metrics. fourth to we share. per for quarter XX.X% Slide increase December year. an accretion in the capital on to an Supported key performance full tangible tangible common adjusted X XX.X% the common

as who on turn provide call now will guidance. details me over the the more forward-looking John, to Let quarter well as

Thanks, Andy.

quarter $X.XX diluted after including to representing Notable items by Turning share quarter. $X.XX a from $X.XX a adjusting net Slide the of or diluted pretax FDIC totaled We on $XXX share assessment basis X. charge of for of for common an the notable a benefit or tax, per billion tax in share, $XXX million reported items. earnings special per $X.X reduction million, offset settlements per

our $XXX optimization and balance community included $XXX $XXX Other a notable a integration million. contribution plan items fund to of costs sheet benefits quarter charitable of of merger and million this million, charge

also This portfolio, will interest securities capital investment liquidity expect portion enhance quarter, restructured strengthening we trajectory our of opportunistically we which income a net and while our positioning. our

summary a the X for quarter. Slide detailed earnings more provides

X. Turning to Slide

than commercial quarter on low X.X% declined basis loan offset weaker and rates as declined. as card at we liquidity supported system-wide for growth saw We remain billion. $XXX this heightened a continue loan in competition to loans demand. Average credit payment assets ended and by manage more the the quarter reduced deposits consumer linked loans balance spending was by demand the sheet prudently Total year as

declined quarter. Average linked X.X% deposits

the in third quarter, the pricing deposits somewhat strong as grow by in X%. we our deposit even Given moderated deposit fourth balances quarter we consumer our

of overall X.XX% to The increased During relief basis we point securities which provided a increase a fourth quarter, investment risk-weighted year improved and compared securities for portfolio, trajectory. the XX asset portfolio portion average earnings to our yield a the rebalanced our quarter, on total earlier.

December XX, portfolio As the balance on of investment ending billion. total the $XXX was securities

During by available-for-sale the quarter, effective the tax, unrealized and X repositioning. in billion the of declined duration to given than net on less movement portfolio $X as rates losses, improved years approximately

X.X% including by X. better pricing earning mix. net in unfavorable interest interest net partially modest market Slide income spreads asset deposit decline a equivalent the in margin point of reflected linked deposit taxable decline shifts Net and mix, pressure declined the a and interest margin X.XX%. driven improved to on Turning fully X funding basis basis dynamics, the by quarter in offset The total

quarter of income basis the first billion we expect of equivalent be net the range $X.X a on In $X.X in taxable XXXX, interest to billion. fully to

taxable fully consistent For to approximately quarter net the XXXX, be income expect slightly. full fourth interest annualized our billion equivalent income interest level net of year with $X.XX on XXXX up basis a to we

driven income, new deepening trends increased the business. across trust relationships Bank a growth were management income. with year-over-year product full a XX.X% strength payment commercial and underlying Year-over-year consumer account on as and spending by highlights revenue basis, revenue Union activity, while in growth. and fees business Noninterest investment core XX activities, by market noninterest quarter Slide continued in and service in adjusted, benefited driven fourth by increases and

expense, development. lower a Noninterest by XX. linked in by and basis, was decreased by quarter adjusted, Slide partially X.X% driven as investments expense on that offset strategic compensation-related business to Turning marketing

performance. quality Slide XX highlights credit our

line with Asset quality toward in normalize expectations pre-pandemic continue to levels. metrics metrics and key trended

other loans X.XX% XX compared and and at X.XX% nonperforming September at ratio XX Our estate December with assets year real was to ago. of a X.XX%

quarter a higher ratio XXXX X points of to as The fourth compared net X.XX% and of third X.XX% quarter charge-off quarter was level of increased basis from when fourth a level X.XX% adjusted.

distributions to optimization sheet X impact in a actions quarter. provided to linked X.X% activities optimization transfer equity increase low as accretion, risk of of to earnings XX. increased additional Tier net XX. have balance ratio our resulted We basis December combination neutral benefits. point a continue The and Turning sheet Slide to and of XX on Balance common earnings

move we sheet to reliance the capital-related be capital XXXX, As with expect of into driver limited actions. on primary accretion balance earnings we

December XX, common XXXX, X remains As equity basis Tier capital of our regulatory XXX capital ratio by minimum our above points.

Andy Let now to it me back hand closing for remarks.

on Thanks, XXXX John. my year comments a was XX. end prepared industry. the for I'll turbulent Slide

we deal, great related our cost of to a and targeted. conversion of synergies in Union run late as achieved by Bank realization successful we rate However, million Union in the May Bank including $XXX had year-end

of of in capital commitments CETX full conjunction received accretion relief accomplished transaction. our Union from category goal accelerating the and we X with the Bank Additionally, we made

deliver and on Entering for tangible industry-leading XXXX, common expansion. future macroeconomic appropriately and confident remain for reserved to are are to equity, we strategy positioned growth in uncertainties returns continue our

momentum in We client we with deepen further even target fee-based as businesses areas key growth execute most are we in and across positive on relationships strategically XXXX, to continue seeing Bank. our Union our revenue opportunities as and invest profitable flat expense growth

We'll Q&A. supporting by call and continued a close year our was dedication to in clients, the shareholders thanking the of the me for needs meaningful now our what company. for for communities employees their up open Let

from first question line Instructions] Siefers comes Scott [Operator Sandler. Piper with of the Your

maybe math would more around $XX.X I sounds NII the other the quarter, It for and does middle for we're the traject. then I that in context to full like cause the should some downward pressure just back NII was year. thoughts on on NII hoping expecting be it grow year. a through, sort presume just any but $XX.X thoughts year? the and thoughts up you the there NII I would margin first would maybe more provide it Or little bleed day somewhere could given trough billion throughout there full is inflect to billion -- a did there? then the little year start correctly, count if maybe the between and how maybe Maybe say, of of factors and or

Sure.

and net billion. maybe between was quarter, the $X.X Just reiterate see In what we'll income just $X.X mentioned. interest billion first

really about And think using fourth year As annualized quarter consistent our number of full that XXXX a XXXX, sheet more XXXX level actions our calendar year. all that's feel the be for is -- to we're during it's appropriate that fourth balance now capital $X.XX starting the we quarter point given past actuals slightly. that up we the because the took going with billion, place

we color believe this going do last of drivers And we to is DDA hike X end so the thinking cost into the By the deposit and Fed how are the abate of example. higher to are around quarter, as months over churn that be low-cost that time. of about an we'll some deposits that past and some related

asset improve of categories, spreads loan commercial loan occur. continues churn things, in to investment see and continue We on the to portfolio, led side various

loan continued stronger in to mode of quarters. a to demand we've is going time. given seen be should Our that And the be likely have loan think pipelines the than cutting certainly over just quarter, improved strengthen in that past this Fed over we couple

is of in And QTE the running form be the going course, that background. some deposit counter to is to competitive, that, with pricing especially

of think going second going say supportive I'll that the factors NII -- the to growth lower we as fourth load first of be quarter, as these we really NII projection quarter while be is year. slightly the So to are than half especially about

question to common on balance to and fully have the And loaded sunset. capital. one, going returning Perfect. those potentially maybe X of you optimization be sort maybe balance do Okay. now between you quick the hear Maybe, building Glad are and sheet ratio forward. just a some efforts all just beginning estimate to Tier then of equity that capital what

Yes.

improvement right the in know, CETX I at X.X portfolio, AOCI on now, securities investment X.X% is on you impact we're the So about with as mean, rates, percentage of the points. the

it loaded you're fully so about on we think X.X, a at And as basis.

you on a create capital points basis in of basis, go-forward So quarter. about XX to area the to per if going we're XX think it

We to down of so about burn the will by have or to give some just you end it of is the book securities context. where on relative XX% a 'XX,

adds that capital all to we given that. to up time the the building timing of needs where appropriate of for to regulation our think it be kind So and

of question Ebrahim Poonawala America. Your the Bank from comes line of of next

have -- then than what change just John, assumptions or we your outlook they in you to sensitivity. about up X cuts? if given Just the the guess less the Just this get us NII Are One, it, following more worse to your market is cuts. probably maybe around outlook? I'm if rate of should X expectations week resiliency NII sorry week. to by going cuts how trying did just NII on And could I talk missed rate question.

Absolutely. Sure.

of quarter this projections, So by cuts in we our the rate of Fed year. terms second interest X in starting current have the

or a or cuts whether not material going to our driver not outlook. Now to that's X be cuts, X it's

We sensitivity have worked less hard income more to a to get be interest neutral net our position. in or

feel whether positioned outlook. to we are so -- the not how they driver going the a cuts are material And to like -- the be change are

guess there. you helpful. can you year of if what just expectations a assume can sure talk terms not year for to payments, just for you expect if call particularly any out -- That's revenue second And overall revenues. And question. if the the in terms you growth I'm I for in you outlook what fee on of on out fee laid in

couple Sure. and payments the Yes, a categories. I'll other things fee call some on of of out

put in we've technology-led terms that made think processing, we and investment synergies. payments, of in There's in of lot of lot as terms about So some certainly advancements a merchant there. we've connections certainly, a of

we digits terms continue there. growth so in of single high And to expect revenue

sales certainly holiday we things, a past been helpful were certainly corporate think given have see. this growth be -- expansion. mid-single nice T&E of the that on and quarter, would from then but the of we've and that extending, that MUV same said very growth of amount The all and seen card payments. margin digits, see helps, that we standpoint. so We we sort side high single digits for and thing client And think

growth markets, nice high expect We've capital in single has in particularly also we would would commercial been foreign derivatives, had exchange strength we've product had performing reiterate, side. income well there, in XXXX, all us. for we've given the had very syndication loan I digits very the really -- fixed

associated and should our of led certainly management with in investment Corporate also institutional fees wealth and growth, trust Trust service and management, experience and Our by businesses Fund Services some that. the fee

it high I given out, terms the we exited was The service one related would of and servicing business, thing terms investment. just exit ATM charges. our We've capital point in decided to to level in of and cash a though, intensity that business of

the will per quarter $XX in that to first impact about million $XX starting so And us quarter. by million

Evercore the next line John comes ISI. with of Pancari Your question from

I loan you NII thing and walk the side the your demand you you guess, you through growth within deposit And your -- similarly, can weakening. same walk traject? for year could through expect that can expectations provided, your the how front. I on expectation for then the know

your think can and an the I you can growth us basis look of If interest, from overall maybe how give maybe could traject mix here? like noninterest-bearing on net the mean, you expectation how

Sure.

of a So couple things there.

believe on loan in will our So the do the I'll expectation we is side. see start that growth side. growth I commercial

that. seen a on were quarter capital bit was weaker markets last that accessing that particularly But really experienced of we've this little course, a things pipeline we good as Of as build and clients paydowns, nature.

up expect utilization pick to that things of We variety. and

that, with will we loan growth credit like cards, about growth good for feel as we going forward. be along us of think So sources

headwind first of we'll lower and first up businesses, deposits bit more might the in side, deposit end QTE the impact kind liquidity of and there go then be stabilization. some a less as the On will through draining or year-end on Fed little We being our the a lose system see process just But quarter. just given probably of out quarter. there. particularly as of mix seasonally the the But how depending we numbers be deposits reminder, the lower in there, the we

out into end begin gives I us NIB throughout quarter, interest-bearing go the going be X that as rotation And other comment, we've some abate. the of but continues, we And again, of course, that then will the we're seen, Fed starts NIB [indiscernible] That products. hike, signal of as your this into to going year. past months and last to by mentioned,

look I just put I again a Okay. if year? do maybe to how as you how as have that's leverage and about operating we know think on guess, think reasonable that should think at keep us your leverage you that about about reasonable help I magnitude year? And you operating then, the could we of NIICs color then next frame some next But you us could it stable. look efforts range thinking guess is of give we at expenses you're

Andy. John, this is

on. with and John start this, me can let So add

the starting from to going million, said quarter. fully deal the cost $XXX I that a the prepared total as remarks, my So in of is and we're this and to reflected benefit of efficiencies Union into now run rate

of So risk we're benefits operational achieving technology those of our digital investments we've benefits investments, because made, investments, the platform.

And the technology and would capabilities we've invest continue we made, to business modernization. those is the in benefit and the in to so investments that payments of and expect

allow and in So We we will to us in in the managing also that services are efficiently closely. expenses we very opportunities efficiencies very have in more still terms personnel, operations cognizant have. around of deliver technology activities

the talked towards that as and we for have objective, see that that when we're that about half margin always, our to John start fee to -- again, as we growth is expect of would to. normalization, as would the opportunity operating we get positive levers that leverage So second have going we year, and long-term as well I the

question Your McDonald from Research. John with comes Autonomous the of next line

in saw what thinking charge-offs the also, NPA color credit on then movement, thoughts should if just wondering about? little you things in maybe was NPA commercial. particularly And give as the quality see trajectory from you this we quarter what a potential you on be year, some this I migrate into charge-off could on John,

John, this is Dolan. Terry

question to quality. related going credit take this I'm So

saw things the one was really and in assets Your nonperforming we to related quarter. the fourth some first of

see the up Union couple of of of that. generally end work of kind pretty idiosyncratic across those loans to Both did stable. status. going you portfolio, If went We nonperforming legacy a that so through continue credits, into sort of kind were

fairly collateralized. But well I those are of that would also both say

will to related idiosyncratic normalize. would see move a closer When to and at getting trajectory, we look necessarily kind So that I up pre-pandemic content expect of we of to continue that levels, would but kind little we to the bit. that it card of charge-offs is don't a continue Credit charge-off expect net lot or credits. will those

that the full be in is probably expectation of we'll kind in net the charge-off XXXX, year for of Our terms in mid-XXs rate.

think potential about for use of kind Okay. maybe revenue on And kind $XX then, revenues. ticked total we should Total something It And of year like Is total fee or to growers How was How the this revenues? that? John on do just Andy, what revenues. the off adjusted think number fee off we can the kind single-digit revenues the contextualize. fee John looks maybe 'XX. that on base of and to to ability should grow revenues the 'XX fee a was of you we trying that? year? billion high base around of billion. about of about for $XX.X revenues, in ability Just grow last grow fees

Yes.

So I thing. the there. and areas of some some perspective, Other service you products, expect of terms mentioned, fee some of sort I -- trust and of charges a -- numbers mean, core the all of in fee payments, we off had commercial From we components the to as there. ticked grow. do

terms that fees to mortgage, of Of bit course, impact in little of tax high terms fourth related be related credit the of other, flat the a like that. had in in in syndication range. probably and things will terms of quarter a somewhat we And number finance

we in the kind going in, fee components that of year. terms for things mid-single those all this of So forward expect

that XX.X from base. adjusted mid-single a Kind Okay. of

Erika UBS. Your line next of Najarian of question comes from the

through you're in to And sitting some category longer early, terms from CETX. X.X you, question My to went getting No capital of here XXXX. is be Basel III if Washington that a is all it not at you be end least now in significantly. the delayed, that soften with Andy. for color and we're will bank first Clearly, consternation have game

in of that where show the behind capital minimum sort think but do where ahead like a of feel tighter, maybe one a all the is you on you to you? the to we the term more is sheet growing. terms just based in is designed forward balance terms little management how CETX about near you And about hurdle optimize As bit and proper capital of fully U.S. over looking DFAST, are future you're you're now maybe offense also the was thinking

Yes, Erika.

John As optimization efforts balance us. sheet mentioned, think behind I our are

focus on Our go capital and will XXXX from accretion earnings into be we forward. as

are and a As we X%. ago, X.X% A target CETX at we today. was ratio about, X.X% between of years talked couple our

talked So we're of we're is CCAR both uncertain, as from But above about, perspective you that coming, end rules cognizant III will over evolve the game, as that that are also well of which the time. target. Basel and how as still

is My XX% that, So on were then define AOCI. CCAR, what that the we continue continue we'll XX%. the proper When get we'll and down we be. we'll to few determine will what clarity will rules, to get math around that, the then above into time. and the refine to we III years that Basel both ago. is accrete the a we'll be capital We'll expectation buybacks burn at the capital X% But target

NII. for you, And the quickly down deposits if wondering, deposit some generally shift John. react giving for betas components as DDA deposits total each rate even you of mix QT, follow-up on us to the I'm how do cut? to think to be X of you down Got the you Fed way mentioned are can it. the dates? also, down, you just question be expecting Thank And of

Sure.

of of the So question QT. anticipate year. We terms be part to do QT first throughout the in your

pressure And throughout put so in the that's going to, on year of on balances. whole, deposits terms

expect but don't to -- And overall growth through that. so we ways manage in we a of we'll lot have deposits,

to seen. to through ways talking be the just various that change they're QT, course, Of but remains

as performance deposits the go will I and they of terms balances In commercial anticipate down would down, just come fast on type up. as way wholesale

going it's expectations. turn. On the those take It'll to time retail more of an to arc. for some that be our are But side,

next Your question with Mayo from Fargo. Mike comes the of Wells line

you historical And points for Bancorp, the you mean clear, wasn't or real basis at of negative guiding to this the I think talked are back in get that's XXXX? fourth for a So leverage efficiency I you about flat, question XXX U.S. positive none it mean, in up generally, XX% do the presentation exactly isn't more December. core above your or quarter legacy is, year-over-year. I operating ratio? efficiency like when and

And earlier you last XX%. decade, were

further, a guess, you X along back just low you Or Is the next real were target those the now? Bank. or savings to Going lines, the that so? you're over is Union from all that XXs. aspirational going get target I have the years And

does where So here? from come risk the

positive get that Mike, more operating probably revenue revenue Yes, expenses continue is, objective. our continue That it's expectation pressures of into is in manage the second leverage XXs. we to some more ratios the that first efficiency the once a that down to margin likely versus 'XX level, will given we and take to we half our below talked half of the My growth normalized still about.

way planning. that's we're So the

I lines, is you your payments I here. back going anymore And is years? mean, get to plan into can business the small business When a along you few out XXs, didn't payments with more business those the horizon, in like it its it slide looks -- something Is the stride And see say banking. even on the that combined XX%? recatching

XX% revenues see to business and that. to relationship like going You're by XX% slide I the XX%. grow XX% to for any don't small

is you kind issues the back, and and capital look, as deal business it's done, Bancorp to your back okay, last Bank got March And we're -- U.S. deal, know you April. usual. Union of the had now I And of you got is

and or a that going goal some I'm if become So the that's if just might you're improve efficiency? how those for revenues you square on trying help banking that look color to still to

of and a capabilities Sure, And combination business set a help do to their key still payments product to continues providing and this that priority. is goal. think be. is strategic and banking it business comprehensive We run It Mike. people

is I of areas driver payments, John the are we trust The continued that on. mentioned and income I grow expect B commercial revenue, leverage into those growth short us positive causing John think in interest And what's start the investment, all But immediate abate key pressure term. get categories and is products, and also that of on and not to to including mentioned, XXXX. it something will believe, operating that are a as the second net half

think get to I the leverage. so to And operating going we're positive

We high are even continue -- to it at our leverage ratio the that and beginning get certainly deliver continue it, to will down lower. planning That's on to into the XX objective. efficiency positive and drive XXs we operating

comes the Bank. from with of Your Matt next line question Deutsche O'Connor

Just to also of 'XX clarify, the XX.X? flat expense guidance the for 'XX level is of adjusted

That's correct.

the business the cash referenced you expense assume any that ATM of exit And from benefit I that includes earlier? Okay.

Correct.

lead given or to back business bit portfolio it's parts other market exit the ago? different that's thinking, or X months the looking potentially to kind smaller any see were small you you're whether kind the like Okay. other a businesses or either so kind than mortgage, for, that proposals, and you're of of in not there, may And back, which then spending of stepping areas finalize, just much you're other they that we'll how reevaluating regulatory but of into say, segments that

and chime start can Andy in. can I Well,

the mean constantly lot business. been things, Clearly, end III the we game. light evaluating terms you're letters change. of in I a think commented on Basel regulatory of submitted the common have particularly I of ATM certain in

enter the investment, leverage need there. drive to of Andy we regulatory what achieving the whether of of that going in a just be do of Those businesses, It's it's toward we not businesses combination mentioned, managing thing. end or operating and to the to I'd At comments positive sort day, materially actions. out continual are exit around as going throw a of new terms some

Yes.

to growing the aggressive that is we only John. aggressive the causes agree, is you And now. give for and is And is the the add example of thing the or and competitive books. spreads us I maybe categories. certain environment is at to something less are just returns I'll not right more our auto us levels think put I that's I'd in on And that which that dynamic the the because want not be lending,

we're areas going not those are of or at seeing returns So not now. but of get out just the emphasize in that down, of close we're terms to that levels growth right

credit Okay. and strong industry And normalization then in guys you losses also we're obviously seeing and the with of growth. throughout specifically very a card,

think we growth? good runway if of lag the years a So say tighten healthy kind what card we do call credit there's adjust bit growth slow you At of point few losses quite are above ago. it, at on of, you this a still a or growth basis, and up they do point in cycle? Or

the pressure the pressure. that sort on especially that an is continues up uncertainties the I Matt, a at make adjustments It consumers, particular on space. have is We -- to that though, of around need Well, inflationary sorts an edges, be growth all we nice think things, underwriting the to looked margin that it where economic in do we as certainly of Yes. area, given and and there we tighten we mean, that the to. area,

customers. prime, when overall cycle, to end even very on of focus thinking think sort business. prime credit through a kind card perform performance nice think credit of it's up of But going this I you We it's business, still we And super about well. the very

Capital Cassidy Markets. the next with line RBC of Your Gerard comes question from

your really to guys than it quite competition, also, capital loans and share that corporate customers is has past that Or aggressive markets customers. touched credit of seeing growth, lot and question, on, you you in spread answering Can some a markets commercial nature. see John, lot of years? intensified? us, commercial with accessing And active about any making Are and have you we your loan things in different about the become a in were guys it private and that number one?

private, balance And are their of customers these handling et Apollo, you are And needs? they do these yours? simultaneously, versus are, cetera, Blackstone, of then if competition how any the

This John, Sure. is Gerard.

see or of In side, issuance our market, I the to the more of that when the We not to bond base terms the comment commercial in of side to not It's just client compete or we the them private things. of structure so that market. public going in on investment-grade or type tend into. credit public a tend terms run loan markets, on less taking capital it's type

or it's So -- commercial space names. in We those increased versus particular more we can't that banks venue. peer the or I less or just compete with in our less decreased it's see more say don't because

In other interaction, mentioned terms terms have you client terms -- great capital services, relationships of categories. with names of different we investment in number sorts activities, of markets of a in of

nice those So very we with relationships some institutions. do have

Yes.

Corporate of number continue Services, are credit and the and ours serve. and a Trust of we Global customers large they funds mentioned, that where clients Our support Gerard, businesses, industry they John to Fund as private in

could They where in I risk, and rules or They end is sort sort less all the things. last structure. moving of flexibility the upon have capital the depending sorts that see what thing or think markets. add of where up -- take to into just on of I isn't, emphasis you of is would private more capital more terms more tend the

from of industry focus. an credit where Again, to standpoint, private But be we may compete. area continues an not certainly, be

of has one year having maybe you capital and step year. also at we U.S. the DFAST. disciplined year Just the back do the this We for regional to of probably proposal the through ROTCEs maintain buybacks or III were Basel of game, amongst in always banks. the Bancorp next excess But look beyond going moment to Obviously, middle if a that. had final in you're get the back hallmark get shareholders dividends. very we this later and giving in a highest every end

see rules know in outlook we horizon, combination needs the around XX% XX% that CETX correctly, to ratio Andy, coming see you all What's your that recall you the of on XXXX, I if do be. Generally, maybe to there? we once earnings total of a where get both.

mentioned which do high And pack think return quarter key that expect generating lead I would us about we capital, continue tangible to returning to full return, is capital. year as in XX% terms Gerard, fourth key a to going on the I 'XX. forward, to first of we comment. achieve to XX% Yes,

And again, the dividends I well once buybacks rules, we the through our get will levels, clarity our history. as we target game earlier, on as CCAR III Basel as and determine or the end been process, return difference the in mentioned has capital either in both

line the with from Usdin comes question Ken Jefferies. of next Your

on follow-up deposit A side. the

little in mentioned you about moderate bit, roll-off remarks higher-cost prepared about starting to a and deposits. You talked your pricing also of

if wondering those you of Just comments. both amplify can

tweaks of then products front? those did And types a or deposits deposit able of you where being make are already higher pricing cost the what out So from to on business flow perspective?

the really that maintaining getting we a we're quite those the third make back saw. Mike, in with as strong Sure. acquisition. were the through in of bit. what and we clients going And wanted a those we of sure part were quarter, was was times. to we In terms stepping deposits through Thanks, Union the Maybe fourth just comment clients bit. just really Ken. relationships grew around quarter We just all Bank

the of less decisions went that nature. non-deposit things quarter, tactically In little we've excess loan we and where -- relationship-based a from of made specifically and so deposits, fourth on bit really go away where time declining demand and to just nonrelationship given or deposits had

I we that's on growth, flow how of depending relationship. the be forward ebb think going and of depending profile the on to on our manage loan just and depending So just things it going

that for. intended was So what that's really comment

deposits, mentioned, our consumer on see to core John, we continuing we are in the you as growth there, as importantly, And had slide.

Yes.

We has been something deposit expect on, we've there. in continue and been -- to very that great the core has consumer team we've focused been we the side, had feel success growth and

fully state up it's baked, also to point, and and point, starting actions have you're a whether the Got as cost UB now UB it. that's everything And base as gotten the as of to steady a kind deposits well? making a sure of structure and that buttoned is from loans follow-up

Yes.

Okay.

listen gave everything So to that forward you and the comments move we earlier. just guide with

core in all the It's yes. Exactly. now,

Martinez HSBC. [Operator Instructions] of from next Your with Saul the line question comes

about Maybe is you how bit sort strategy opportunity feeling payment big your revenues the side, Obviously, how issuing if add mid-single-digit and the you're you're detail just how -- there? about on payment in volumes. growth the acquiring and more side, you're a upside how doing of little much on nicely growing the side, merchant

single said year. you think digit high next I

the you have you have you terms how software of And commercial advantage have integrating both lot like banks your service the in fintechs of that this But payments obviously, a relationships, struggled integrated as want. just it area. going terms offering? obviously, in commercial side. a guys network does seeded a banks share in of And know, providers. on the of it's feel to of X-sided kind that retail I And having companies, lot you major and have banking do mean, then, in seem

if of doing you're So feel you an and sort the evolving. just maybe opportunity you could give how overview of us set just how is

Yes.

all, is digits first made the and merchant would have underway. high things. on of we the highlight function I of And investments processing initiatives So we've a the X single

business, in treasury businesses and their services, ease their the people activity that we a integrating X helps banking this payments XX% the activities management, deposit businesses. payments comprehensive we of our Number payment earlier. our is now money into are their up we with led of processing and that about movement of that capabilities, advantage our lending not single so using that And again have is to believe providing to use just the X And into into is way company. small number offering them people talked merchant initiative, helps X tech-led, run We're particularly I the which do run integrating related and tech with run that integration process whole together they're that software is service. capabilities together banking is software over X comprehensive to

are I differentiates that's well capabilities those of issuing. as And So continues as a that the of and true corporate have initiatives little huge do that retail focus processing, merchant that to the we one think payments. in us we a bit payments And have be because underway.

it. deposits. follow-up No, Got that's on Okay. Maybe a helpful. just

of noninterest-bearing its deposits migration, the mentioned sort of course. You run expect you to migration the out

that was I more And where is guidance room is when you what's cost, of right, increase? XX%. NII? I and of noninterest-bearing Just the my that? XX.X% about do beta, is there? around think there much on calculations more cumulative Sort if just for see How think your embedded total room much to deposits. for How deposit in

Sure.

are standpoint, run commercial on you're into have that and things at a over business growth terms side, Certainly think going a talked -- places, get to have in starting mean, small I you're particularly companies going where would And we're point we're you and I we've certain So of around of the and accounts. operating bit where, drift at lower. area. percentage the that from But to a little where mentioned, a core a we I be quite just that NAV, to about could account it. to time, variety.

I going So as earlier to in alluded think there to I be call. they'll will be supporting some forward. leftover churn, the But NIB conducive

so of terms XX.X% you beta, mentioned, now. right In our beta is as or

we've go up the point to depend as how of be it's from when going in kind on think can much terms talked of cuts it creep kind of to I going is it will Fed about, focus here. but that

hard starts what Fed And -- be But until there level we pressure so how cutting. predict. the is to -- will

are Andersen, turn at Mr. the this no you. to call questions back There I time. over further

the have Thanks, Relations our any you follow-up to for questions. call. listening department thank if Please Sarah, contact and you earnings Investor

concludes thank today's This joining. We for conference call. you

disconnect. now may You