Financial Data and Key Metrics Changes - The reported net income available for common shareholders was $215.4 million, which included $13.5 million of acquisition expenses, compared to $53.2 million in the first quarter [5] - The second quarter net operating income was $225.4 million or $2.96 per share, reflecting strong performance [5] - There was a pretax gain of $37.7 million on prior investments, including a $29.4 million gain from Voyager Technologies, resulting in a multiple on invested capital of 5.8 times and an internal rate of return of 59% [6] Business Line Data and Key Metrics Changes - Average loans increased by 12.7% to $36.4 billion, while average deposits increased by 10.7% to $55.6 billion, indicating solid organic growth [7] - Legacy UMB average loan balances increased by 15.3% on an annualized basis from the prior quarter, outperforming many peer banks [7] - Quarterly top line production reached a record of $1.9 billion in the second quarter, with strong growth in commercial and industrial (C&I) and commercial real estate (CRE) [9] Market Data and Key Metrics Changes - Total net charge-offs attributed to the legacy UMB portfolio were $9 million, or just 13 basis points of average UMB loans for the quarter [10] - Nonperforming loans to total loans improved by two basis points from the prior quarter to 26 basis points, with legacy UMB nonperforming loans at just 10 basis points [10] Company Strategy and Development Direction - The company is focused on leveraging its business model, which has proven effective in various economic environments, and is optimistic about future growth opportunities [4][5] - The company is actively working on integrating Heartland's operations and expects to see continued strong production from both legacy UMB and Heartland teams [22][24] - The company plans to continue aligning portfolios and expects that any resulting payoffs will not materially affect the balance sheet [28] Management's Comments on Operating Environment and Future Outlook - Management noted that borrower sentiment remains strong despite uncertainties, and they are focused on controllable factors [5] - The company expects charge-off levels to remain near or below historical averages in the second half of the year [10] - Management expressed confidence in the integration of Heartland and the potential for future growth from this acquisition [86] Other Important Information - The company completed a Series B preferred stock offering, netting $294 million of Tier one capital [11] - The CET1 ratio increased by 28 basis points to 10.39% as the company continues to rebuild capital following the acquisition [11] - The company made charitable contributions of $8.3 million in the quarter, significantly higher than $524,000 in the first quarter [16] Q&A Session Summary Question: Can you deconstruct the loan growth and its sources? - Management indicated that the loan production number aligns with expectations, with strong contributions from both Heartland and legacy UMB teams [22][24] Question: How much alignment is left to do between the two portfolios? - Management expects continued alignment without significant impact on payoff levels [28] Question: What is the impact of HSA changes under the new budget bill? - Management views it as a marginal opportunity, with a limited number of new eligible accounts [30][31] Question: What is the long-term expense growth rate post-integration? - Management indicated that they will achieve targeted cost savings from the acquisition and maintain positive operating leverage [32][33] Question: How much of the $124 million cost savings have been realized? - Management reported $17 million in quarterly savings so far, with more expected in the fourth quarter [41][42] Question: What is the outlook for deposit competition? - Management noted that they can grow commercial deposits easily but expect moderate growth in consumer deposits due to increased branch presence [72][74]

Financial Data and Key Metrics Changes - The company reported net income of $109.8 million or $1.6 per diluted share in the second quarter, a notable 21% increase year-over-year [11] - Return on assets (ROA) improved to 1.65% and return on tangible common equity increased to 15.8% [12] - Efficiency ratio improved to 51.63% from 52.83% in the previous quarter, indicating better operational efficiency [11][12] - Tangible book value per share increased to $41.32, reflecting a strong 15.5% annualized growth [12] Business Line Data and Key Metrics Changes - Loan growth was primarily driven by commercial and industrial (C&I) loans, with a total loan production of $1.9 billion, up from $1.5 billion in the previous quarter [17] - Non-interest income increased by approximately $4.9 million, largely due to a 36% growth in mortgage production [15] - Total non-interest expense rose by $4.2 million, mainly due to higher salaries and employee benefits related to increased mortgage production [15] Market Data and Key Metrics Changes - Non-interest bearing deposits grew over 3% annualized, maintaining a core focus on this segment [6][8] - The company’s capital ratios strengthened, with common equity Tier 1 increasing to 13% and tangible common equity ratio rising to 11.09% [6][12] - The company experienced a seasonal decline in cyclical municipal deposits, offset by an increase in broker deposits [17] Company Strategy and Development Direction - The company remains focused on organic growth, with a strong emphasis on enhancing revenue generation and maintaining a positive operating leverage [5][10] - Management expressed optimism about future growth opportunities in the Southeastern markets, leveraging a strong deposit base and capital position [9][10] - The company is open to stock buybacks and dividend increases, but M&A activities are not a priority unless a unique opportunity arises [26] Management's Comments on Operating Environment and Future Outlook - Management noted a resurgence of activity in loan production, with expectations for continued growth through the remainder of 2025 and into 2026 [22][9] - There is cautious optimism regarding competition, with indications that competition is becoming more aggressive but manageable [44] - The company anticipates loan and deposit growth in the mid-single-digit range moving forward [18] Other Important Information - The company repurchased approximately $12.8 million of common stock during the quarter [12] - The provision for credit losses was $2.8 million, with reserves remaining strong at 162% of loans [16] Q&A Session Summary Question: Loan growth trends and competition - Management indicated that there is a resurgence of activity in loan production, particularly in mortgage warehouse lending, and expects this trend to continue [22][23] Question: Future growth opportunities and capital deployment - Management emphasized a focus on organic growth, with new hires and potential stock buybacks being considered, while M&A is not a priority [25][26] Question: Margin outlook and deposit costs - Management expects some pressure on deposit costs as loan growth picks up, but remains optimistic about maintaining a strong margin [39][40] Question: Competitive landscape and market challenges - Management noted increased competition across various business lines, with a shift towards more structural underwriting standards rather than just pricing [44] Question: Mortgage segment capacity and trends - Management stated that the mortgage team is prepared for a potential refinancing wave and expects third-quarter production to be consistent with the second quarter [54][56]

Core Insights - AmeriServ Financial, Inc. reported a net loss of 2 cents per share for Q2 2025, unchanged year over year, while its stock declined 7.7% since the earnings report, contrasting with a 1.3% growth in the S&P 500 index during the same period [1][2] Financial Performance - Net interest income increased by $1.5 million to $10.4 million, driven by a 36-basis-point expansion in net interest margin to 3.10% [3] - Total interest income rose by $1.2 million, or 7.1%, due to higher average loan balances and repricing of commercial real estate loans [3] - Provision for credit losses surged to $3.1 million from $0.4 million a year earlier, primarily due to a $2.8 million charge-off related to a problematic commercial real estate loan [4] - Total non-interest income decreased by $0.3 million, or 6.3%, with significant declines in wealth management fees and mortgage banking revenues [5] Expense Management - Non-interest expenses were reduced by $1.6 million, or 11.9%, with notable decreases in professional fees and other expense categories [6] - The company experienced slight increases in salaries and healthcare costs, but these were offset by lower incentive compensation and headcount reductions [6] Management Perspective - CEO Jeffrey Stopko highlighted positive operating leverage achieved in both quarters of 2025, with expectations for continued improvement in net interest income and margin [7] - Management is focused on cost control while selectively investing in growth areas, although no formal earnings guidance was provided [7] Balance Sheet and Capital Position - As of June 30, 2025, total loans were $1.1 billion and deposits reached $1.2 billion, with non-performing assets rising 9.7% to $16.4 million [9] - Capital ratios remain strong, with a tangible common equity ratio of 6.78% and book value per share increasing to $6.71, up 6.8% year over year [9] Dividend Declaration - The board declared a quarterly cash dividend of 3 cents per share, representing a 3.9% annualized yield and a 60% payout ratio based on year-to-date earnings [10]

Financial Data and Key Metrics Changes - For the second quarter, the company reported net income of approximately $8.4 million, or $0.34 per share, which included a pretax gain of $7.5 million [4][5] - The effective cost of deposits was $2.89, which is 32% lower than the same quarter a year ago [7] - Core net interest margin (NIM) was 3.15%, up from 3.13% in the previous quarter and 280 basis points from a year ago [21] - Non-interest income increased to $10.6 million from $8.5 million in the previous quarter [23] Business Line Data and Key Metrics Changes - The core bank remains nearly 70% of the total balance sheet, with a return on assets (ROA) of approximately $138 million supported by low-cost deposits [11] - Premise Mortgage closed $323 million in the quarter, up about 52% from the same quarter in 2024 [12] - Panacea Financial grew to over $500 million in outstanding credit, focusing on deposit growth [14] Market Data and Key Metrics Changes - Non-interest bearing deposits increased by $22 million or 19% annualized in the quarter [21] - The company experienced a 12% annualized increase in gross loans held for investment from March 31 to June 30 [20] Company Strategy and Development Direction - The company is focused on organic growth and has not engaged in mergers and acquisitions since 2017 [9] - The strategy includes maintaining low operating expenses while leveraging digital platforms to enhance deposit growth [8][10] - The company aims to achieve a 1% ROA goal by 2026, with expectations of growing pre-tax, pre-provision earnings to over $13 million [25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning and ability to generate attractive earnings in the coming quarters [26] - The company does not foresee any negative influences that would cause earnings pressure [16] - Management indicated that the second quarter was the last quarter to bear significant noise due to the consumer program [25] Other Important Information - The company has negotiated a solution with its core provider that will save approximately $300,000 per month starting in August [8] - The company is in the early stages of ramping up its SBA lending activities, with gains of $210,000 recorded in the second quarter [24] Q&A Session Summary Question: Loan growth expectations for the back half of the year and overall 2026 - Management expects Mortgage Warehouse to average between $250 million to $350 million next year, with Panacea potentially reaching $100 million to $150 million on the balance sheet [31][34] Question: Anticipated improvement or compression in core NIM - Management expects core NIM to creep up to the mid-320s by the end of the year, assuming no rate cuts [39] Question: Growth in core bank deposits and loans - Management believes the core bank will outgrow digital deposits, with a focus on low-cost deposit growth [43] Question: Impact of interest rates on mortgage volume - Management indicated that mortgage volume could increase significantly if interest rates drop into the low sixes [47] Question: Expectations for charge-offs - Management does not anticipate a significant decrease in net charge-offs, as they are already at industry levels [49] Question: Appropriate growth rate for core expenses - Management aims to reduce core expenses to around $18 million, with expected normal inflation of 3% to 4% thereafter [53][55]

Financial Data and Key Metrics Changes - The company reported earnings of $3.74 per diluted share on revenue of $13 billion, with operating earnings of $1.3 billion and net income slightly over $1 billion, reflecting an 8.9% revenue increase year-over-year [5][6] - Operating earnings increased by almost 13%, net earnings rose by 12%, and earnings per share grew by 14.7% compared to the previous year [6] - Year-to-date revenue reached $25.3 billion, up 11.3%, with operating earnings nearly $2.6 billion, up 17.4%, and earnings per share up $1.26 or 20.5% [6] Business Segment Data and Key Metrics Changes - Aerospace segment revenue was $3.06 billion, a 4.1% increase, with operating earnings of $403 million, up 26.3% year-over-year [15] - Marine segment revenue increased by 22.2% to $4.22 billion, with operating earnings of $291 million, up 18.8% quarter-over-quarter [27] - Combat Systems revenue was flat at $2.28 billion, but operating earnings increased by 3.5% to $324 million, with a book-to-bill ratio of 1.0 for the quarter [30][31] - Technologies segment revenue was $3.5 billion, up 5.5%, with earnings of $332 million, up 3.8% [35] Market Data and Key Metrics Changes - The company ended the quarter with a record backlog of $103.7 billion, up 14% from the previous year, and total estimated contract value reached over $160 billion [9][10] - The marine systems segment saw significant growth driven by contracts for submarine construction, particularly for Columbia and Virginia class submarines [27][28] Company Strategy and Development Direction - The company aims to optimize operating leverage across all business units, focusing on continuous improvement and cash generation [43][44] - Management emphasized the importance of stabilizing the supply chain and improving productivity in the marine segment to enhance margins [70][71] - The company plans to maintain its business structure while enhancing operational performance, particularly in areas with challenges [81][82] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong second half of the year, with expectations for improved cash conversion rates and continued demand across all segments [11][49] - The company anticipates revenue growth in aerospace and marine segments, while combat systems and technologies are expected to maintain stable performance [46][47][48] Other Important Information - The effective tax rate for the quarter was 17.7%, slightly lower than the full-year outlook of around 17.5% [13][14] - The company refinanced $750 million of notes that matured in May, with no further debt maturities until next year [12] Q&A Session Summary Question: Could you elaborate on the G800 delivery cadence? - The first G800 is expected to deliver soon, with incremental margins expected to improve as production progresses through different lots [54][55] Question: What is driving the slowdown in services? - The slowdown is attributed to the mix of services and volume, with expectations for continued growth aligned with the fleet [58][60] Question: Can you comment on the management reorganization? - The management structure will remain largely the same, focusing on value creation and operational performance across all business units [80][81] Question: What is the margin potential for the portfolio moving forward? - There is potential for margin improvement, particularly in the marine group, with a focus on operational performance [88][90] Question: Is there enough skilled labor for electric boat to handle additional Virginia class submarines? - Skilled labor is not an issue, and the company can support additional growth with some capital investment if required [113]

Financial Data and Key Metrics Changes - Earnings reported at $3.74 per diluted share on revenue of $13 billion, with operating earnings of $1.3 billion and net income slightly over $1 billion, reflecting an 8.9% revenue increase year-over-year [4][5] - Operating earnings increased by almost 13%, net earnings up 12%, and earnings per share up 14.7% compared to the previous year [5] - Year-to-date revenue reached $25.3 billion, up 11.3%, with operating earnings nearly $2.6 billion, up 17.4%, and earnings per share up $1.26 or 20.5% [5][6] Business Segment Data and Key Metrics Changes - Aerospace segment revenue was $3.06 billion, a 4.1% increase, with operating earnings of $403 million, up 26.3% year-over-year [13][14] - Marine systems segment revenue increased by 22.2% to $4.22 billion, with operating earnings up 18.8% [24] - Combat Systems revenue was flat at $2.28 billion, but operating earnings increased by 3.5% to $324 million [28] - Technologies segment revenue was $3.5 billion, up 5.5%, with operating earnings of $332 million, up 3.8% [32] Market Data and Key Metrics Changes - The overall book-to-bill ratio for the company was 2.2 to 1, with marine systems being the largest driver [6][7] - Aerospace had a book-to-bill ratio of 1.3, indicating strong demand across the Gulfstream product line [7] - The total estimated contract value reached over $160 billion, an all-time high, with a record backlog of $103.7 billion, up 14% from the previous year [8] Company Strategy and Development Direction - The company aims to optimize operating leverage across all business units, focusing on cash generation and disciplined contract management [41][42] - Continued investment in supply chain improvements and workforce training to enhance productivity and throughput in the marine segment [26][68] - The company expects to maintain strong demand in aerospace, with a focus on increasing deliveries and improving margins over time [18][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong second half of the year, with expectations for improved cash conversion rates and continued growth in revenue and earnings [9][46] - The company anticipates challenges in the defense sector due to budget and program prioritization but remains optimistic about growth opportunities in Europe [30][31] - Management noted that the aerospace segment is expected to see margin pressures in 2028 due to the introduction of lower-margin aircraft [94] Other Important Information - The company generated $1.6 billion in operating cash flow, with a free cash flow of $1.4 billion for the quarter, yielding a cash conversion rate of 138% [8][11] - Capital expenditures were $198 million, with plans for increased spending in the second half of the year [10] - The effective tax rate for the quarter was 17.7%, slightly lower than the full-year outlook of around 17.5% [11][12] Q&A Session Summary Question: Can you elaborate on the G800 delivery cadence? - The first G800 is expected to deliver soon, with higher incremental margins than the G700 due to lower developmental costs [50][52] Question: Why has there been a slowdown in services? - The slowdown is attributed to the mix of services and volume, with expectations for continued growth aligned with the fleet [54][56] Question: What is driving the margin pressure in technologies? - The margin pressure is due to the fluidity in the market and the pace of contract award activity, which has been slower than normal [58][60] Question: Can you discuss the significant revenue increase in the marine segment? - The increase was driven by construction volume from Virginia and Columbia class submarines, with a focus on improving productivity at shipyards [64][66] Question: What is the outlook for aerospace margins? - Achieving high teens margins will require a combination of increased deliveries and improved mix, with expectations for gradual improvement [71][72] Question: How will the management reorganization affect operations? - The reorganization aims to enhance operating performance and leverage across all business units while maintaining current management structures [76][78]

Financial Data and Key Metrics Changes - Operating ROTCE for the quarter was 17.2%, an increase from 16.8% in the previous quarter, within the guidance range of 16% to 20% [3] - Net income for the quarter was $198 million, including $269 million in pretax operating income [17] - The capital ratio ended at 26.6%, up from 24.4% at year-end, attributed to strong earnings and the suspension of stock repurchases [22] Business Line Data and Key Metrics Changes - Servicing generated $332 million in pretax income, a 15% year-over-year increase, while originations produced $64 million despite high rates [7][12] - The servicing portfolio remained steady at approximately $1.5 trillion following the acquisition of Flagstar [9] - The company completed two home equity securitizations during the quarter, indicating strong momentum in home equity loans [13] Market Data and Key Metrics Changes - The company noted persistent high mortgage rates leading to affordability challenges and sluggish home sales, with home prices under pressure in some markets [5] - Delinquencies in the portfolio declined to 1%, reflecting strong asset quality [6][20] Company Strategy and Development Direction - The company is focused on integrating with Rocket and enhancing its platform, which includes launching a maiden MSR fund with $200 million in initial commitments [7][8] - Continued investment in AI solutions is aimed at optimizing operations and improving customer experiences [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite a challenging environment, highlighting consistent double-digit returns over the past two and a half years [5] - The company anticipates continued strong operating cash flow and robust liquidity throughout the remainder of the year [22] Other Important Information - The company was recognized as one of the best places to work in Texas, emphasizing its commitment to a purposeful and inclusive environment [6] - The corporate segment incurred $48 million in expenses, expected to remain at this level due to ongoing IT investments [18] Q&A Session Summary - No questions were taken during the call due to the pending merger with Rocket [2]

Financial Data and Key Metrics Changes - The company reported a net income of $11.7 million or $0.69 per diluted share for Q2 2025, indicating strong performance [6] - Tangible book value increased to $24.42 per share, representing over 13% annualized growth quarter over quarter [7] - Total revenue for the quarter was $49.2 million, with net interest income expanding as anticipated [9] Business Line Data and Key Metrics Changes - Loan growth was at a 13% annualized pace for Q2, exceeding expectations, while deposit growth was 5% quarter over quarter annualized [8] - Noninterest income rose by $300,000 to $8.9 million, driven by higher insurance and mortgage banking revenues [16] Market Data and Key Metrics Changes - The average portfolio yield, including fees and accretion, was up to 6.07%, with new loan production contributing positively [12] - The loan to deposit ratio was maintained at 85%, with noninterest bearing deposits comprising 90% of total deposits [14] Company Strategy and Development Direction - The company aims to deepen its presence in existing markets rather than pursuing new market expansions, focusing on organic growth [33][81] - Talent acquisition remains a priority, with plans to add 10 new revenue-producing team members in commercial banking, private banking, and treasury management [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in EPS and revenue, with solid pipelines and a focus on operational efficiency [20][22] - The company anticipates margin expansion of 2 to 3 basis points per quarter for the second half of 2025, despite expected increases in deposit costs [15][47] Other Important Information - The company maintained a strong credit quality with non-performing assets at just 0.19% of total assets [16] - Operating expenses were recorded at $32.6 million, at the low end of the guided range, with a modest increase attributed to merit increases and incentive compensation [17] Q&A Session Summary Question: Loan growth and future potential - Management believes maintaining a high single-digit growth rate is feasible, with potential for low double-digit growth if new hires are effective [25][28] Question: Geographic focus for new hires - New hires are spread across various regions, including Tennessee, Alabama, and the Gulf Coast, with no specific geographic concentration [29][30] Question: Future revenue targets and growth strategy - The company is focused on deepening its market presence and achieving set targets for 2025, with ongoing planning for 2026 [31][34] Question: Margin expectations and deposit costs - The company expects to see margin expansion despite rising deposit costs, with a forecasted margin of 3.3% to 3.35% for Q3 [15][47] Question: Credit quality and stress testing - Management reported no signs of weakness in credit quality and has conducted stress testing on lower-yielding loans maturing in Q4 [71][75] Question: Recruitment and market expansion - The company is focused on organic growth and recruitment within existing markets, with no immediate plans for major market expansions [81][82]

Financial Data and Key Metrics Changes - Earnings per common share were reported at $0.34, with an adjusted EPS growth of 27% year over year [17][18] - Average loan balances increased by $2.3 billion or 1.8% from the prior quarter, while average deposits rose by $1.8 billion or 1.1% [19][20] - Adjusted common equity tier one (CET1) was 9%, up 40 basis points from last year, while tangible book value per share increased by 16% year over year [10][19] Business Line Data and Key Metrics Changes - Loan balances grew by 7.9% year over year, driven by strength in commercial loans and contributions from new initiatives [21] - New initiatives accounted for approximately 40% of total loan growth, with significant contributions from Texas and North and South Carolina regions [21][22] - Average deposit growth was driven by household growth and deepening primary bank relationships, with a 46% increase year over year in consumer and business banking [10][23] Market Data and Key Metrics Changes - The company maintained a strong liquidity position with two times coverage of uninsured deposits [11] - Credit performance remained stable with net charge-offs at 20 basis points, reflecting proactive management of loan portfolios [11][20] - The criticized asset ratio was reported at 3.82%, indicating stable credit quality [32] Company Strategy and Development Direction - The company is focused on core growth strategies and recently announced the acquisition of Veritex, which is expected to accelerate growth in Texas [6][12] - The acquisition is seen as financially attractive and aligned with the company's model of delivering broad-based capabilities through local relationships [14][15] - The company aims to expand its consumer franchise in Texas and enhance commercial lending and capital markets opportunities [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic environment, noting signs of improving sentiment and strong growth momentum [32][34] - The company raised its loan growth outlook to 6% to 8% and deposit growth to 4% to 6% for the remainder of the year [33][34] - Management highlighted the importance of maintaining a disciplined approach to deposit pricing while expanding primary bank relationships [10][34] Other Important Information - The company reported a 12% year-over-year growth in net interest income, with a net interest margin of 3.11% for the second quarter [24][20] - Non-interest income increased by 7% year over year, with key areas of focus such as payments, wealth management, and capital markets growing by 11% [26][29] - The company plans to unveil a new branding campaign to enhance customer acquisition and deepen relationships [37] Q&A Session Summary Question: Concerns about net interest income guidance - Management indicated that they are on track to potentially hit the higher end of the net interest income guidance range, with economic stability being a key factor [45][46] Question: Feedback on Veritex acquisition - Positive feedback was received from shareholders and employees, with expectations of synergies and growth opportunities in Texas [48][49][60] Question: Deposit trends and competition - Management noted strong deposit performance and a stable competitive environment, with expectations for continued solid deposit growth [52][54] Question: Changes in expense guidance - The increase in expense guidance was primarily driven by higher revenue and profit outlook, with a focus on maintaining positive operating leverage [64][66] Question: Loan growth and competitive landscape - Management acknowledged a strong loan growth trajectory, with expectations for continued contributions from new initiatives despite some competitive pressures [68][70] Question: Outlook for North and South Carolina - The company remains optimistic about growth in these regions, with ongoing investments in branch openings and hiring new bankers [75][76] Question: Funding strategy and deposit growth - Management emphasized optimizing funding and loan growth, with expectations for deposit growth to match loan growth over the long term [82][84] Question: Efficiency ratio outlook - Management indicated that while the efficiency ratio has been stable, they expect improvements over time as they continue to invest in growth opportunities [97][100]

Financial Data and Key Metrics Changes - The company reported net income available to common shareholders of $1,200,000,000 or $0.90 per share, which included $0.02 of restructuring charges and $0.01 of losses from the sale of certain investment securities [6][18] - Adjusted revenue increased by 2.1% linked quarter, driven by a 2.3% growth in net interest income and a 1.8% growth in non-interest income [19] - Average loans held for investment increased by 2% on a linked quarter basis, with end of period loans increasing by $10,200,000,000 or 3.3% [20] Business Line Data and Key Metrics Changes - In consumer and small business banking, average loan balances increased by 2.8% linked quarter, with significant growth in residential mortgage and indirect auto loans [11] - Wholesale loans saw a 1.5% growth in average loans and a 2.9% increase in end of period loans, driven by new and existing clients [12] - Wealth management experienced a 27% increase in year-to-date assets under management (AUM) from wholesale and premier clients compared to the same period last year [13] Market Data and Key Metrics Changes - The company added nearly 37,000 new consumer and small business accounts, attracting younger clients with higher average balances [10] - Average deposits increased by $8,300,000,000 sequentially, or 2.1%, driven by growth in interest checking and time deposits [21] - The cumulative interest-bearing deposit beta declined from 43% to 37% on a linked quarter basis [22] Company Strategy and Development Direction - The company is focused on executing strategic growth initiatives, maintaining credit and risk discipline, and returning capital to shareholders [33] - Investments are being made in talent, technology, and risk infrastructure to enhance client experience and operational efficiency [34] - The company aims to achieve positive operating leverage in 2025 despite challenges in investment banking and trading [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of both consumer and wholesale client bases, noting good credit quality and liquidity among clients [42] - The company anticipates a recovery in investment banking and trading revenue in the second half of 2025 based on current pipelines and improved market conditions [25] - The outlook for revenue growth remains unchanged, with expectations for a 1.5% to 2.5% increase relative to 2024 adjusted revenue [29] Other Important Information - The company returned $1,400,000,000 of capital to shareholders through dividends and share repurchases during the quarter [9] - The CET1 ratio was reported at 11%, with a strong capital position allowing for balance sheet growth and capital returns [28] - The company plans to target approximately $500,000,000 of share repurchases during the third quarter [10] Q&A Session Summary Question: Overall sentiment among the customer base - Management noted strong consumer business performance and good credit quality, with new clients impressed by the company's purpose-driven focus and product capabilities [40][44] Question: Anticipated pace of share repurchase - The reduction in share repurchase target was described as opportunistic, with a focus on maintaining a balance between capital return and banking franchise growth [46] Question: Deposit competition and costs - Management indicated that deposit competition is rational, with expectations for deposit costs to stabilize and improve in the coming quarters [56][58] Question: Fee revenue growth and trading recovery - Management observed a bounce back in trading and investment banking revenue, with expectations for normalized results in the third quarter [65] Question: Trajectory towards 15% ROTCE - Management highlighted various initiatives to improve profitability, including capital-efficient revenue generation and margin improvements [72][74] Question: Restructuring charges and investments - Most restructuring charges were related to severance, not merger-related, and the company continues to invest in technology and talent while maintaining expense discipline [85][88]