Financial Data and Key Metrics Changes - For Q3 2025, the GAAP net income was $34.3 million, with diluted EPS at $0.69, resulting in a 0.55% return on assets and a 3.82% return on average common equity [18] - Adjusted operating net income for the quarter was $77.4 million or $1.55 diluted EPS, representing a 1.23% return on assets and an 8.63% return on average common equity [18] - The net interest margin improved to 3.62%, a 25 basis point increase from the prior quarter [20] Business Line Data and Key Metrics Changes - C and I loans grew organically at a 13% annualized rate, while commercial real estate loan balances declined at a 6.7% annualized rate [13][14] - The wealth management business saw assets under administration (AUA) grow to $9.2 billion, including $1.4 billion acquired from Enterprise [15][27] Market Data and Key Metrics Changes - Demand deposit growth was 5% annualized in Q3, with demand deposits representing 28% of overall deposits [14] - The cost of deposits was reported at 1.58% [15] Company Strategy and Development Direction - The company is focused on integrating the Enterprise acquisition, with a successful systems conversion completed [4][7] - There is an emphasis on cross-selling deeper into the Enterprise customer base and retaining client-facing personnel [8][9] - The company plans to prepare for a core conversion scheduled for May 2026, which is expected to enhance technology infrastructure and support future growth [15][28] Management's Comments on Operating Environment and Future Outlook - Management noted that clients are experiencing uncertainty due to factors like government shutdowns, tariffs, and inflation, but the client base remains resilient [11][12] - The company expects to build on solid Q3 results for improved growth and profitability in the future [16] Other Important Information - The company anticipates achieving 30% cost savings on the acquired Enterprise expense base by 2026 [27] - The tangible book value per share decreased by $2.17 or 4.5% for the quarter, but is up modestly over the year-ago metric [19] Q&A Session Summary Question: Can you quantify the C and I growth and discuss the loan pipeline? - C and I growth has been strong, particularly in lower middle markets, with a healthy loan pipeline that remains stable [36][38] Question: How is loan pricing currently? - The company aims for a spread above 200 basis points on C and I loans, with pricing around 6% [39] Question: What is the outlook on office credit and classified loans? - Management feels better about office credit than six months ago, with several larger problems resolved [43][45] Question: What are the expectations for loan growth next year? - The company anticipates low to mid single-digit loan growth, contingent on continued positive trends [47] Question: How does the margin guidance relate to potential Fed rate cuts? - Margin guidance remains stable regardless of Fed actions, with expectations for 4 to 6 basis points of expansion [54] Question: What are the plans for the securities portfolio? - There are no immediate plans to restructure the securities portfolio, which is viewed as stable [55] Question: Can you provide details on new non-accruals? - The increase in non-accruals is primarily due to three loans, with no significant loss exposure expected [57][58] Question: What is the strategy regarding capital and buybacks? - The company is comfortable with a CET1 ratio around 12% and is open to buybacks if growth remains in the low to mid single-digit range [99][102]

Financial Data and Key Metrics Changes - The third quarter earnings per share, excluding charges and credits, was $0.69, representing a decrease of $0.05 sequentially and $0.20 compared to the first quarter of last year [23] - Revenue for the first quarter was $8.9 billion, an increase of $382 million or 4% sequentially [23] - Companywide adjusted EBITDA margin for the third quarter was 23.1%, representing a sequential decrease of 92 basis points [26] Business Line Data and Key Metrics Changes - Digital revenue increased 11% sequentially, driven by a 39% increase in digital operations [8][35] - Reservoir Performance revenue declined 1% sequentially, while Well Construction revenue was flat [36] - Production Systems revenue increased by $542 million or 18% sequentially, reflecting two months of activity from the acquired ChampionX [36] Market Data and Key Metrics Changes - Revenue in North America grew 17% sequentially, driven mainly by the contribution of ChampionX [6] - International Markets revenue rose 1% sequentially, with notable increases in several countries across the Middle East and Asia [5] - The digital business is expected to continue growing at a rate that visibly outperforms global upstream spending [11] Company Strategy and Development Direction - The company is focusing on production recovery solutions to unlock additional barrels at the lowest possible cost, positioning itself as a leader in this space [14] - The integration of ChampionX is expected to enhance the company's production recovery offerings and generate significant synergies [38] - The digital division is now reported as a standalone entity, highlighting its strategic value and growth potential [27] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the resilience of the oil and gas markets despite challenging commodity prices and uncertainties [16] - The fundamentals for oil and gas remain constructive, with global inventories at multiyear lows [17] - The company anticipates a sequential step-up in results in the fourth quarter, driven by a full quarter of ChampionX and higher year-end digital sales [21] Other Important Information - The company generated $1.7 billion of cash flow from operations and $1.1 billion of free cash flow during the quarter [38] - Capital investments for the full year are expected to be approximately $2.4 billion [39] - The company repurchased $114 million of its stock during the quarter, totaling $2.4 billion year-to-date [40] Q&A Session Summary Question: How does the company see the production-focused business growing? - The management highlighted the need for reinvestment in production and recovery solutions, emphasizing the importance of technology and innovation in this area [44][46] Question: Can you elaborate on the four segments of the digital business? - The management explained that the growth in the digital business is driven by customer adoption and the expansion of offerings, with expectations for continued growth in annual recurring revenue [47][49] Question: What is the outlook for deepwater markets? - The management expressed confidence in the deepwater market's resilience and anticipated a gradual strengthening of rig activity in the coming years [60][61] Question: How does the company view the addressable market in digital? - The management believes the digital solutions market is unconstrained and will continue to expand as the company leverages its capabilities [96]

Financial Data and Key Metrics Changes - The company reported a return on tangible common equity of 18% and a return on assets (ROA) of nearly 1.3% for Q3 2025, with overall revenue growth of 2.3% compared to the prior quarter [5][6] - Loan growth was 2.6%, amounting to an increase of $1.4 billion, while deposits also grew over 2% [14][15] - Net income rose to $261 million from $259 million in the previous quarter, with earnings per share (EPS) increasing to $1.54 from $1.52 [16][20] Business Line Data and Key Metrics Changes - All major lending categories contributed to the growth in commercial and consumer lending, with a notable increase in loan-related fees due to more active capital markets [10] - The private credit joint venture with Marathon Asset Management is fully operational, showing positive early returns and expanding lending solutions [11][12] - HSA Bank is expected to see significant growth due to new legislation increasing the addressable market for HSA accounts, potentially adding $1 billion to $2.5 billion in incremental deposits over five years [12][13] Market Data and Key Metrics Changes - The company experienced a seasonal increase in public funds, with deposits up by $1.2 billion [15] - The net interest margin (NIM) decreased by four basis points to 3.4%, influenced by tighter credit spreads on new loans [17][60] - Charge-offs remained stable at 28 basis points, consistent with the previous quarter, indicating stable credit quality [20][78] Company Strategy and Development Direction - The company aims to leverage its diverse balance sheet growth while maintaining substantial liquidity and conservative credit positioning [5][6] - There is a focus on expanding product offerings through the Marathon joint venture, which is expected to enhance both transactions and on-balance sheet business opportunities [30][31] - The company is not currently pursuing whole bank M&A but is open to smaller healthcare-related acquisitions that would enhance fee and deposit generation capabilities [42][64] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about macroeconomic tailwinds for the banking industry, despite recent market volatility [7][8] - The outlook for Q4 anticipates flat net interest income, with expectations of seasonal outflows of deposits and higher debt costs [21][22] - Management remains confident in the credit profile, noting a 7% decline in criticized loans and stable nonaccrual loans [20][78] Other Important Information - The company celebrated its 90th anniversary, highlighting its long-standing commitment to serving clients and communities [23] - The tangible book value per share increased to $36.42 from $35.13, reflecting net income and improvements in accumulated other comprehensive income (AOCI) [20] Q&A Session Summary Question: Details on the Marathon partnership and growth outlook - Management reported a strong pipeline of business from the Marathon partnership, with optimism for growth in 2025 and beyond [29] Question: Trajectory of deposit growth and priorities - The company is focused on growing attractive categories like HSA and EnterSync, preferring these over broker deposits [31][32] Question: Exposure to private credit and risk management - The company has a solid track record in private credit, with no losses reported, and maintains a conservative approach to underwriting [36][39] Question: Loan growth outlook and pipelines - Management indicated a robust pipeline for loans but expects a potential increase in prepayments in Q4, leading to more moderate growth expectations [46][48] Question: Capital allocation and buyback pace - The company will prioritize loan growth and strategic acquisitions before considering returning capital to shareholders through buybacks [50][51] Question: Credit quality outlook - Management noted stable credit quality metrics and expressed confidence in the gradual improvement of nonaccrual and classified loans [74][78] Question: Investment opportunities and regulatory changes - The company plans to redeploy investment dollars into new business initiatives, particularly in digitization and treasury management capabilities [102][104]

Financial Data and Key Metrics Changes - The company reported earnings per share of $0.91, or $0.93 excluding certain items, with adjusted revenues rising 6% year over year to $2.3 billion, the highest since 2022 [4][12] - Net interest income (NII) grew 7% year over year and 2% sequentially, with net interest margin expanding for the seventh consecutive quarter [12][14] - Adjusted return on assets (ROA) was 1.25%, return on tangible common equity (ROTCE) was 17.7%, and efficiency ratio was 54.1% [5][12] - Tangible book value per share increased 7% year over year and 3% sequentially [5][12] Business Line Data and Key Metrics Changes - Average loans increased 6% year over year, with commercial non-performing assets declining 14% [5][20] - Wealth management fees rose 11% year over year, and assets under management reached $77 billion [8][19] - Middle market loans increased 6%, with new client acquisition up 40% [8][15] - Commercial payments fees grew 3% sequentially, with New Line revenue increasing by 31% year over year [8][19] Market Data and Key Metrics Changes - Average demand deposits were up 3% year over year, led by 6% growth in consumer demand deposit accounts (DDA) [4][17] - Consumer household growth in the Southeast was 7% year over year, significantly outpacing the underlying market growth [6][17] - The total cost of retail deposits in the Southeast averaged 1.93%, generating a spread of over 200 basis points relative to Fed funds [6][18] Company Strategy and Development Direction - The company announced a merger with Comerica, emphasizing that M&A is a means to achieve strategic objectives rather than a standalone strategy [3][4] - Focus on expanding in the Southeast and enhancing middle market sales force, with plans to open 27 more branches by year-end [6][11] - Continued investment in technology and operational efficiency to support long-term growth and scalability [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating uncertain environments, highlighting strong operational results despite challenges [3][12] - The outlook for NII is stable to up 1% from the third quarter, with expectations for average total loan balances to increase by 1% [24][23] - Management remains optimistic about the potential for growth in technology and life sciences sectors post-merger with Comerica [50][51] Other Important Information - The company repurchased $300 million of stock and raised its common dividend by 8% [5] - The net charge-off ratio was 109 basis points for the quarter, including $178 million related to Tricolor [20][22] - The company expects to pause share repurchases until the completion of the Comerica acquisition, anticipated by the end of Q1 2026 [24] Q&A Session Summary Question: Update on the Comerica transaction and regulatory process - Management reported positive feedback from employees and communities regarding the merger, with good progress on regulatory filings expected to be completed by the end of the month [31][32] Question: Concerns about contagion risk in the NDFI portfolio - The company maintains low levels of NDFI concentrations, with robust monitoring processes in place, and has not experienced losses in this portfolio over the last decade [38][40] Question: Outlook on commercial lending and investment decisions - Management noted a mixed outlook, with some clients feeling the impact of tariffs while others are optimistic about future investments, particularly in infrastructure and AI-related sectors [45][48] Question: Potential growth from Comerica's technology and life sciences practice - The merger is expected to enhance growth opportunities in these sectors, leveraging existing strengths and expanding market presence [50][51] Question: Balance between organic expansion and integration of Comerica - Management assured that de novo expansion plans in the Southeast will continue without disruption, with resources allocated effectively to support both growth areas [54][56]

Financial Data and Key Metrics Changes - The company reported earnings per common share of $0.41, with an adjusted EPS of $0.40, reflecting an 18% year-over-year increase [9] - Revenue grew by 14% year-over-year, adjusted PP&R increased by 16%, and tangible book value rose by 10% [5][9] - Average loan balances grew by $2.8 billion, or 2% from the prior quarter, while average deposits increased by $1.4 billion, or 1% [9][10] - Reported CET1 ended the quarter at 10.6%, with adjusted CET1 at 9.2%, up 30 basis points from last year [9] Business Line Data and Key Metrics Changes - Loan growth accelerated to 9.2% year-over-year, driven by commercial lending and new initiatives contributing $1.2 billion, or approximately 40% of total loan growth [10] - Key drivers of loan growth included geographic expansion in Texas and the Carolinas, with significant contributions from corporate and specialty banking, auto, and regional banking [10] - Non-interest income increased by 14%, or $75 million year-over-year, with strong performance in payments, wealth management, and capital markets [12][13] Market Data and Key Metrics Changes - The company is poised to become the 14th largest depository in Texas and the fifth largest in Dallas following the acquisition of Veritechs [6] - The company expects to achieve full-year ADB growth of approximately 9% to 9.5% inclusive of Veritechs, with deposits expected to grow approximately 6.5% to 7% [18] Company Strategy and Development Direction - The company continues to execute its growth strategy with a focus on organic growth and investment in local market relationships [4][5] - The acquisition of Veritechs is seen as a springboard for growth in Texas, with expectations of cost and revenue synergies [6][8] - The company plans to expand its branch network in Texas and enhance its commercial banking activities [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage risks and maintain strong credit quality despite economic uncertainties [30][56] - The company is raising its financial guidance for the year, expecting strong loan growth and improved net interest income [17][18] - Management anticipates continued strong performance in 2026, with expectations of mid to high single-digit loan growth [29] Other Important Information - The company completed a preferred issuance in the third quarter, which will result in higher preferred dividends in the fourth quarter [22] - The company has a disciplined approach to capital management, focusing on funding high-return loan growth and supporting a strong dividend yield [19] Q&A Session Summary Question: Can you talk about the loan growth outlook and pipelines? - Management indicated strong momentum in loan growth, with expectations of approximately 1.5% sequential growth in the fourth quarter [27][28] Question: What are the safeguards against credit quality issues? - Management emphasized their moderate to low risk appetite and active portfolio management to mitigate risks [36][37] Question: How do you see operating leverage trending? - Management noted a significant improvement in operating leverage, now expected to exceed 2.5% for the year [44][45] Question: Can you discuss the competitive landscape for deposits? - Management highlighted their sophisticated approach to managing deposit activities, which has led to strong performance in both rate and volume [60][61] Question: What is the outlook for asset finance lending? - Management expects a solid fourth quarter for asset finance, setting up for a strong year in 2026 [70]

Financial Data and Key Metrics Changes - The company reported a return on tangible common equity of 18% and a return on assets (ROA) of nearly 1.3% for Q3 2025, with overall revenue growth of 2.3% compared to the prior quarter [3][4] - Total assets reached $83 billion, with loans and deposits both increasing over 2% linked quarter [11] - Net income rose to $261 million from $259 million in the previous quarter, and earnings per share (EPS) increased to $1.54 from $1.52 [12] Business Line Data and Key Metrics Changes - Loan growth was driven by diverse categories, with total loans up $1.4 billion, or 2.6%, including a notable increase in commercial real estate [11][12] - Deposit growth was also diverse, with public funds up $1.2 billion seasonally, alongside growth in commercial and Healthcare Financial Services [11] - The private credit joint venture with Marathon Asset Management is fully operational, with positive early returns and a significant pipeline of lending opportunities [9][19] Market Data and Key Metrics Changes - The company noted that tariffs and labor market uncertainty are not significantly impacting the credit performance of its loan portfolio [6] - The addressable market for Health Savings Accounts (HSAs) is expected to increase by 7 million customers, potentially driving $1 billion to $2.5 billion in incremental deposit growth over the next five years [10] Company Strategy and Development Direction - The company aims to maintain a diverse balance sheet while focusing on organic earnings growth opportunities and capital generation [4] - There is a strategic focus on enhancing the HSA business through technology investments and expanding product offerings to capture a direct-to-consumer market [67] - The management remains cautious about M&A activities, emphasizing organic growth and smaller healthcare-related acquisitions instead [30][70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about macroeconomic tailwinds for the banking industry, despite recent market volatility [5] - The outlook for Q4 includes expectations of flat net interest income, with potential seasonal outflows of deposits and higher debt costs [15] - The company is confident in its credit profile, with a focus on maintaining high-quality loan origination while managing risk [52] Other Important Information - The company celebrated its 90th anniversary, highlighting its long-standing commitment to serving clients and communities [16] - The tangible book value per share increased to $36.42 from $35.13, reflecting net income growth and improvements in accumulated other comprehensive income (AOCI) [14] Q&A Session Summary Question: Details on the Marathon Asset Management partnership - Management reported positive early success with a growing pipeline of business and the ability to offer expanded products to clients [19][20] Question: Trajectory of growth for Amitros and InterSync - The company is focused on growing attractive categories in HSA and Amitros, with a preference for InterSync balances over broker deposits [21][22] Question: Lending exposure to the private credit industry - The company has a significant NBFI exposure, primarily in fund banking and lender finance, with a strong track record of zero losses [26][27] Question: Outlook on loan growth for 2026 - Management anticipates steady loan growth in the mid-single digits for 2026, with a focus on high-quality assets [80] Question: Impact of recent rate cuts on loan and deposit pricing - The company is positioned neutrally regarding interest rates, with some downward repricing on variable rate portfolios [74] Question: Credit quality outlook - Management noted stable credit quality metrics, with a focus on resolving non-accrual and classified loans [49][52]

Financial Data and Key Metrics Changes - The company reported earnings per common share of $0.41, with an adjusted EPS of $0.40, reflecting an 18% year-over-year increase [14] - Revenue grew by 14% year-over-year, adjusted PPNR increased by 16%, and tangible book value rose by 10% [10][25] - Average loan balances grew by $2.8 billion or 2% from the prior quarter, while average deposits increased by $1.4 billion or 1% [14] Business Line Data and Key Metrics Changes - Loan growth accelerated to 9.2% year-over-year, driven by strength in commercial lending and new initiatives contributing $1.2 billion, approximately 40% of total loan growth [15] - Key contributors to loan growth included Corporate and Specialty Banking ($700 million), Auto ($600 million), Regional Banking ($400 million), Middle Market ($200 million), and Asset Finance ($200 million) [15] - Noninterest income increased by 14% year-over-year, with notable growth in payments (10%), wealth management (12%), and capital markets (21%) [18][20][21] Market Data and Key Metrics Changes - The company expects full-year average deposit growth of approximately 6.5% to 7% inclusive of the Veritex acquisition, with standalone performance at the high end of prior guidance at approximately 5.5% [27] - The company anticipates achieving a net interest income growth of 10% to 11% for the full year, up from the previous range of 8% to 9% [27] Company Strategy and Development Direction - The company is focused on executing its organic growth strategy, leveraging local market relationships to drive revenue growth [6][8] - The acquisition of Veritex is expected to enhance growth in Texas, positioning the company as the 14th largest depository in the state [11][12] - The company plans to expand its branch network in Texas and deepen its commercial banking activities [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's credit quality, with net charge-offs at 22 basis points and a stable outlook for credit metrics [25][26] - The company raised its financial guidance for revenue and earnings growth, expecting strong loan growth and improved net interest margin [26][27] - Management remains optimistic about organic growth and the potential for further expansion in competitive markets like Texas and the Carolinas [67][72] Other Important Information - The company completed a preferred issuance in the third quarter, which will result in higher preferred dividends in the fourth quarter [32] - The company is focused on maintaining a disciplined capital management strategy, aiming to increase common equity Tier 1 and support strong dividend yields [23] Q&A Session Summary Question: Loan growth outlook and pipelines - Management indicated strong momentum in loan growth, expecting approximately 1.5% sequential growth in Q4, with confidence in core business trends [37][38] Question: Credit quality perspective - Management reported exceptional credit performance and expressed confidence in their risk management practices, indicating no current concerns [41][42] Question: Safeguards against credit issues - Management highlighted their disciplined client selection and active portfolio management as key safeguards against potential credit issues [45][46] Question: Deposit pricing competition - Management noted strong execution in deposit pricing and volume, with expectations of continued solid performance in deposit growth [85][88] Question: NIM expansion drivers - Management identified fixed asset repricing as the primary driver of NIM expansion, estimating a sustainable increase in NIM over the next few years [90][92]

Financial Data and Key Metrics Changes - Adjusted EPS increased by 166% year over year to $1.15 per share [5] - Core ROTCE was 15% on a headline basis and about 12% excluding the impact of AOCI [6] - Adjusted net revenue reached $2.2 billion, up 3% year over year, and 9% excluding the sale of the credit card business [6][19] - Net interest margin expanded to 3.55%, up 10 basis points quarter over quarter [6][21] - CET1 ratio of 10.1% equates to $4.5 billion of excess capital above regulatory minimum [7][24] Business Line Data and Key Metrics Changes - Dealer Financial Services reported consumer originations of $11.7 billion, driven by a record 4 million applications [10][30] - Insurance business recorded core pretax income of $52 million, up $6 million year over year [32] - Corporate Finance generated a 30% ROE with a 10% growth in the loan portfolio [12] Market Data and Key Metrics Changes - The digital bank ended the quarter with $142 billion in balances, serving 3.4 million customers [13] - 92% of deposits are FDIC insured, demonstrating the strength of the deposit base [13] Company Strategy and Development Direction - The company is focused on its core franchises, aiming for sustained growth and improved results [15] - The refresh strategy implemented in January has reshaped the organization into a more focused entity [4][5] - The company is leveraging its brand and culture to maintain a competitive edge in the market [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in credit performance, noting that consumer behaviors are better than expected despite macro uncertainties [45][46] - The company anticipates modest expansion in portfolio yield and expects full-year net charge-offs to be around 2% [37][38] - Management is committed to disciplined expense management and maintaining a strong capital position [20][25] Other Important Information - The company rolled out its proprietary AI platform, ally.ai, to enhance operational efficiency [8] - The company announced a quarterly common dividend of $0.30 per share, consistent with the prior quarter [26] Q&A Session Summary Question: Concerns about subprime auto and consumer credit trends - Management noted that credit performance metrics are better than expected and that underwriting standards have been tightened [45][46] Question: Expectations for net interest margin (NIM) trajectory - Management provided insights on NIM expansion, indicating it is influenced by Fed rate cuts and competitive market dynamics [48][50] Question: Update on flow to loss trends - Management confirmed that flow to loss rates remain favorable, with delinquency levels decreasing [57] Question: Earning asset expectations and liquidations - Management expects low single-digit growth in earning assets, driven by retail auto and corporate finance [68] Question: Future modifications to the business base - Management expressed satisfaction with the current business mix and indicated no immediate plans for significant changes [75][76] Question: Strength of origination and application volume - Management highlighted record application volumes and the impact of EV lease tax credits on origination strength [81][85]

Financial Data and Key Metrics Changes - Adjusted EPS increased by 166% year-over-year to $1.15 per share, reflecting significant earnings growth [4] - Core ROTCE was 15% on a headline basis and about 12% excluding the impact of AOCI [4] - Adjusted net revenue reached $2.2 billion, up 3% year-over-year, with a 9% increase when excluding the sale of the credit card business [4][12] - Net interest margin expanded to 3.55%, up 10 basis points quarter-over-quarter [4][15] - CET1 ratio of 10.1% equates to $4.5 billion of excess capital above regulatory minimum [4][18] Business Line Data and Key Metrics Changes - Dealer Financial Services reported consumer originations of $11.7 billion, driven by a record 4 million applications [7][24] - Insurance business recorded core pre-tax income of $52 million, up $6 million year-over-year, with total written premiums of $385 million [25] - Corporate finance generated a core pre-tax income of $95 million, reflecting a 30% return on equity [26] Market Data and Key Metrics Changes - The digital bank ended the quarter with $142 billion in balances, serving 3.4 million customers, with deposits representing nearly 90% of total funding [9] - Delinquency rates for retail auto improved to 4.9%, down 30 basis points year-over-year [21] - Consolidated net charge-off rate was 118 basis points, a decline of 32 basis points year-over-year [20] Company Strategy and Development Direction - The company has implemented a refreshed strategy focused on core franchises, resulting in sustained improvement and momentum [3][10] - The emphasis on disciplined expense management and capital allocation is expected to drive long-term value for shareholders [10][19] - The company aims to leverage its brand and culture to maintain competitive advantages in the market [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in credit performance despite macroeconomic uncertainties, noting better-than-expected consumer behaviors [32][34] - The outlook for net interest margin is expected to migrate to the upper threes over time, influenced by Fed rate cuts [28] - Full-year net charge-offs are projected to be approximately 2% at the low end of the guidance, reflecting positive trends in credit performance [29] Other Important Information - The company rolled out its proprietary AI platform, ally.ai, to enhance operational efficiency [5] - The company announced a quarterly common dividend of $0.30 per share for Q4 2025, consistent with the prior quarter [19] Q&A Session Summary Question: Concerns about subprime auto and consumer credit trends - Management noted that consumer behaviors are better than expected and credit performance remains strong despite macro uncertainties [32][34] Question: Expectations for net interest margin trajectory - Management provided insights on NIM expansion, indicating a historical case study on beta evolution following Fed rate reductions [36][37] Question: Update on flow-to-loss trends - Management confirmed that flow-to-loss rates remain favorable, with delinquency levels continuing to decline [42] Question: Capital return potential and CET1 ratio - Management expressed confidence in capital progress and indicated that share repurchases remain a key priority as capital generation improves [43][45] Question: Earning asset expectations and growth - Management expects low single-digit growth in earning assets, driven by retail auto and corporate finance [49][53]

Financial Data and Key Metrics Changes - The company reported earnings per share of $0.91, or $0.93 excluding certain items, with adjusted revenues rising 6% year over year [5][6] - Average loans increased by 6% year over year, marking the fourth consecutive quarter of accelerating loan growth [5][6] - Adjusted PPNR increased by 11%, resulting in 330 basis points of positive operating leverage [6][17] - The return on assets (ROA) was 1.25%, return on tangible common equity (ROTCE) was 17.7%, and the efficiency ratio was 54.1% [6][17] - Tangible book value per share grew by 7% year over year and 3% sequentially [7][18] Business Line Data and Key Metrics Changes - In the middle market segment, average loans increased by 6%, with new client acquisition rising by 40% [10][19] - Wealth management fees climbed by 11%, with assets under management reaching $77 billion [10][19] - Franchise finance in the corporate investment banking (CIB) vertical had a standout quarter, serving as the lead arranger on transactions totaling $3.9 billion [11][19] - Adjusted noninterest income grew by 5% year over year, driven by wealth, commercial payments, and capital markets [25][26] Market Data and Key Metrics Changes - Average demand deposits increased by 3% year over year, led by a 6% growth in consumer demand deposit accounts (DDA) [6][22] - Consumer household growth in the Southeast was strong at 7% year over year, significantly outpacing underlying market growth [7][22] - The total cost of retail deposits in the Southeast averaged 193 basis points, generating a spread of over 200 basis points relative to Fed funds [8][24] Company Strategy and Development Direction - The company announced a merger with Comerica, emphasizing that M&A is a means to achieve strategic objectives rather than a standalone strategy [4][14] - The focus remains on stability, profitability, and growth, with investments in the Southeast and expanding the middle market sales force [6][14] - The company plans to open 60 additional branches in the Southeast next year, leveraging proven marketing tactics and digital offerings [8][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating uncertain environments, highlighting strong operating results despite challenges [2][6] - The outlook for 2026 and beyond is positive, driven by investments in the Southeast and the integration of Comerica [14][31] - The company expects net interest income (NII) to be stable to up 1% from the third quarter, with continued loan and core deposit growth [31][32] Other Important Information - The company repurchased $300 million of stock and raised its common dividend by 8% [7][18] - The net charge-off ratio was 109 basis points for the quarter, including significant charge-offs related to Tricolor [27][28] - The company anticipates $200 million in annualized run rate savings from value stream programs by year-end [26][27] Q&A Session Summary Question: Update on the Comerica transaction and regulatory process - Management reported positive feedback from regulators and employees regarding the merger, with good progress on regulatory filings expected to be completed by the end of the month [37][38] Question: Concerns about contagion risk in the NDFI portfolio - Management reassured that the NDFI portfolio is well-managed, with low levels of concentration and no significant losses over the last ten years [45][46] Question: Outlook on commercial lending and tariffs - Management noted mixed sentiments among clients, with some optimism due to potential Fed rate cuts, while tariff uncertainties continue to weigh on certain sectors [56][57] Question: Potential growth opportunities from the Comerica merger - Management highlighted the potential for growth in technology and life sciences sectors, leveraging Comerica's strengths and Fifth Third's existing capabilities [61][62] Question: Balancing organic expansion with the Comerica integration - Management confirmed that de novo expansion plans in the Southeast will continue without disruption, as resources are well allocated [69][70]