Brian Foran

Brian Foran addressed investor concerns about the rising 'cost to grow' in the market, acknowledging the upfront investment for premium customers and credit card accounting dynamics. He asked if any market segment is becoming overheated or if the concern is primarily due to economic and accounting factors.

Answer

Steve Squeri, Chairman and CEO, dismissed the notion of an overheated market for American Express, citing consistent 10% revenue growth and mid-teen EPS growth over the last five years. He emphasized long-term investments, disciplined capital returns, and avoiding non-economical portfolios. Christophe Le Caillec, CFO, added that despite competition, the Platinum refresh led to some of the lowest acquisition costs in Q4, and the long-term view on customer relationships makes the economics compelling.

Brian Foran from Truist addressed investor concerns about the rising cost of growth in the market, asking if American Express sees any overheated segments where it has adjusted its strategy, or if the perceived high cost is primarily due to accounting dynamics that front-load expenses and lag benefits.

Answer

CEO Steve Squeri emphasized American Express's consistent 10% revenue and mid-teen EPS growth over the past five years, driven by long-term investments. He stated that the company does not view the cost to grow as 'too expensive' or the market as 'overheated,' as Amex avoids uneconomical portfolios and focuses on its premium customer base and international growth. He highlighted the aggregate view of expenses and how investments impact operating leverage, credit performance, and marketing. CFO Christophe Le Caillec added that decisions are made with a 20-year view, and recent Platinum acquisition costs were among the lowest in two years due to the strong value proposition, brand, and technology.

Brian Foran asked about the interactions between the Gold and Platinum cards, particularly with the increased dining benefits on Platinum, and whether there was white space for a new card product between Platinum and Centurion (Black Card) given consumer willingness to pay high annual fees.

Answer

Chairman and CEO Stephen Squeri stated that Gold remains a very strong product with continued new cardholder acquisition, and while upgrades are occurring, it's still early to assess the full interaction. He acknowledged that a product between Platinum and Centurion is something discussed internally but did not commit to any specific plans, emphasizing satisfaction with the current positioning of Centurion and Platinum.

Brian Foran of Truist Securities highlighted an investor concern about the disconnect between spend volume growth (+7%) and slower growth in discount revenue net of rewards (+1-2%), asking for management's perspective on this dynamic.

Answer

CFO Christophe Le Caillec explained that the key metric is the Variable Customer Engagement (VCE) ratio to revenue, which they manage holistically. He noted that a higher VCE ratio is not inherently negative, as it is often tied to the most premium and value-accretive products that deliver benefits in other areas, such as marketing efficiency and superior credit outcomes. Chairman and CEO Stephen Squeri added that they evaluate the overall revenue associated with a product, not just one component.

Brian Foran sought clarification on whether the 8-10% revenue guidance is FX-adjusted or GAAP and asked about the embedded EPS impact from foreign exchange rates.

Answer

CFO Christophe Le Caillec (identified as Unknown Executive) explained that guidance is provided on an FX-adjusted basis to reflect true business momentum, as predicting year-end FX rates is impossible. He used Q4 as an example, where FX created a 1-point difference between adjusted and GAAP revenue growth. For EPS impact, he referred to company filings, which state a 10% increase in the dollar negatively impacts pre-tax income by approximately $136 million.

Brian Foran asked if First Financial Bancorp's total earning assets would generally follow loan growth in 2026, or if other factors like cash and securities should be considered. He also sought clarification on the timing of loan growth improvement, specifically whether it's tied to elevated paydowns or acquisition conversions, and when the strengthening would be most visible.

Answer

CFO Jamie Anderson explained that a significant influx of liquidity from the BankFinancial deal would temporarily bloat the securities portfolio, potentially peaking around $5 billion (above the typical 20% of assets). As loan growth occurs, about half of that growth would come from reducing the securities portfolio. President and CEO Archie Brown attributed the timing of loan growth improvement to a combination of seasonality (Q1 typically lower, Summit strong in the back half) and the ramping up of resources and full-time equivalents in the BankFinancial markets (Chicago) in the latter part of the year.

Brian Foran asked if total earning assets would generally follow loan growth in 2026 or if other factors like cash and securities needed consideration. He also sought clarification on the timing and catalysts for loan growth improvement, specifically whether it was tied to elevated paydowns or acquisition conversions.

Answer

Jamie Anderson, CFO, explained that a large influx of liquidity from the BankFinancial deal would temporarily bloat the securities portfolio, which would then be drawn down to fund about half of the loan growth. Archie Brown, President and CEO, attributed the timing of loan growth improvement to a combination of Q1 seasonality (lower originations), the strong performance of the Westfield team, and ramping up resources in the BankFinancial markets in Chicago, which will add more loans in the latter part of the year.

Brian Foran from Zurich inquired about a small tick down in Assets Under Administration (AUA) specifically in the transfer agency category on Slide 36. He also asked for key lessons learned from the Heartland acquisition, focusing on what went well and what would be done differently in future transactions, particularly regarding targeting, sourcing, and integration.

Answer

Chairman and CEO Mariner Kemper clarified that the slight decline in transfer agency AUA was a nuance and advised focusing on the total AUA, which was up linked-quarter, indicating strong business momentum. Regarding the Heartland acquisition, Mariner Kemper described it as 'flawless' due to a committed team, the 'Do No Harm' concept, and maintaining control over culture and management. President and CEO of UMB Bank Jim Rine emphasized the importance of cultural fit and the proven process. Mariner Kemper noted that expectations for growth from the acquired company should be more muted between close and conversion.

Brian Foran asked about UMB Financial's M&A strategy, specifically if avenues beyond whole bank acquisitions, such as branch divestitures or trust/custody consolidation, could achieve the goal of acquiring low-cost funding, while maintaining profitability discipline.

Answer

Mariner Kemper, Chairman and CEO, stated that while all options are on the table, UMB is diligent and disciplined about profitability. He noted that branch deals are often harder to justify from a profitability standpoint compared to whole bank acquisitions, as they typically involve less desirable assets. Kemper emphasized the importance of not distracting from the core loan growth engine and ensuring any deal contributes positively to the overall story.

Brian Foran from Truist asked UMB Financial about its M&A strategy for acquiring low-cost funding, specifically inquiring if the company would consider alternatives to whole bank acquisitions, such as branch divestitures or trust and custody consolidation.

Answer

Chairman and CEO Mariner Kemper confirmed 'all things are on the table' for M&A but stressed diligence and profitability discipline, noting that branch divestitures are often less profitable than whole bank deals. He emphasized the importance of any M&A not distracting from UMB's strong core loan growth and fee businesses.

Brian Foran asked about Synchrony's decision to switch from providing line-item guidance to an EPS range for 2026, inquiring if it indicates satisfaction with consensus EPS but a need to flag potential line-item changes due to growth investments. He also asked for one or two key markers to watch in the first half of 2026 to track whether Synchrony is on track with its mid-single-digit loan growth trajectory. Finally, Brian Foran inquired if the best guess of the impact from elevated tax refunds is already included in Synchrony's 2026 guidance or if it would be incremental.

Answer

CFO Brian Wenzel explained that the switch was to help analysts better understand and value the company's performance, as there was significant diversity in how line-item guidance translated into models, effectively providing a "cheat code" for the EPS outcome. He advised watching purchase volume and average active account growth, particularly sequential improvements, to gauge the growth trajectory. CFO Brian Wenzel confirmed that the impact of elevated tax refunds is included in the guide.

Brian Foran from Truist inquired about Synchrony Financial's shift to providing an EPS range instead of detailed line item guidance, asking if it indicates satisfaction with consensus EPS while signaling potential changes in line items due to growth investments. He also asked for key markers to track mid-single-digit loan growth in the first half of the year and whether the impact of elevated tax refunds is already included in the guidance.

Answer

CFO Brian Wenzel explained that the shift to an EPS range was intended to help analysts better understand and value the company, acting as a "cheat code" given the diversity in line item modeling. He advised watching purchase volume and average active accounts in the first half of the year as key markers for loan growth trajectory. He confirmed that the impact of elevated tax refunds is already included in the guidance.

Brian Foran sought clarification on Huntington Bancshares' expense trajectory, asking for an exit run rate of annualized expenses for the combined entity pro forma for 2026, given varying analyst expectations. He also inquired about the expected core loan growth rate in the second half of 2026, linked quarter annualized, after the Veritex and Cadence integrations are complete.

Answer

CFO Zachary Wasserman declined to provide an explicit exit run rate for annualized expenses but pointed to an expected full-year efficiency ratio of around 55% for 2026, with further improvement anticipated in 2027. Chairman, President, and CEO Stephen Steinour stated that the underlying loan momentum is expected to remain in the 8%-9% range, with potential for revenue and growth synergies from the new partnerships to further lift this rate in the latter part of 2026 and beyond.

Brian Foran asked about the drivers behind the potential deceleration in loan growth rates for 2025 and sought details on the performance of new geographic and vertical investments.

Answer

CFO Zachary Wasserman clarified the guidance represents sustaining the current strong run-rate, not a significant deceleration. CEO Stephen Steinour added that seasonality impacts quarterly comparisons and that business pipelines are 50% higher year-over-year. Steinour highlighted that new markets in the Carolinas and Texas are already profitable on a direct expense basis and that the fund finance vertical has ramped up exceptionally fast, with investments continuing.

Brian Foran asked whether Old National Bancorp expects consolidated loan growth in 2026 to be similar to its legacy Old National growth, specifically regarding the integration of Bremer Bank. He also inquired about the deposit side, asking if Bremer is already contributing to deposit growth and if its trajectory will align with Old National's legacy deposit growth going forward.

Answer

CEO Jim Ryan affirmed that consolidated loan growth in 2026 should absolutely be similar to the total average loan growth of the organization, expecting the Bremer Bank footprint in Minnesota to actually generate more on average. He clarified that any quarterly changes are due to the newness of portfolios and ongoing reviews of national businesses they don't pursue. Jim Ryan also stated that the total balance sheet, including fee income, should have a similar mix, and the Bremer market is expected to lead the organization in growth, with no outlying differences anticipated in 2026.

Brian Foran asked if consolidated loan growth in 2026 should be expected to be similar to Old National's legacy loan growth, despite the initial trimming of Bremer loans. He also inquired if Bremer is already contributing to deposit growth and if its deposit trajectory will be similar to Old National's legacy going forward.

Answer

CEO Jim Ryan affirmed that consolidated loan growth in 2026 should absolutely be similar to the total company's average, expecting the Bremer footprint to generate more on average than the total company. He also stated that the total balance sheet and fee income lines, including Bremer, should have a similar mix and, on average, lead the organization in growth, with no outlying differences expected in 2026.

Brian Foran asked for clarification on the earnings per share impact from the Bremer partnership, specifically whether the decision to retain $2.4 billion in CRE loans was the primary change to the accretion model.

Answer

CFO John Moran confirmed that the improved EPS outlook compared to the original model is driven by the earnings from the retained $2.4 billion in CRE loans offsetting the lower-than-expected purchase accounting rate marks. He affirmed that using the original $2.60 EPS estimate for 2026 plus a modest benefit is a fair assessment.

Brian Foran from Truist Securities asked if Capital One is considering providing more specific financial guidance or targets to help investors navigate the complex post-acquisition transition period.

Answer

Richard Fairbank, Founder, Chairman & CEO, reiterated the company's long-held philosophy of not running the business to meet specific guidance. He explained that guidance is given situationally and that his comments on the consistency of the deal's expected earnings power were intended to provide a 'bounding' for investors. He indicated that investors should not expect a detailed layout of specific numerical guidance in the near term.

Brian Foran asked for an update on spending trends between high-end and low-end consumers, particularly in reaction to tariffs. He also sought to clarify if the network strategy is an incremental investment or a major reset to compete directly with Visa and Mastercard.

Answer

Richard Fairbank, Chairman and CEO, noted no significant difference in recent spending patterns between high-end and low-end consumers. On the network strategy, he clarified they are not trying to replicate the Visa/Mastercard model. The primary goal is to move more of Capital One's own volume onto the network, which requires a long-term journey of building international acceptance, rather than a 'full stop' competitive reset.

Brian Foran asked for management's view on the bank's normalized return potential, given the stock's valuation relative to its current ROTCE. He also inquired about the expected trajectory of Net Interest Income (NII) for the remainder of the year under a four rate-cut scenario.

Answer

CFO Craig Nix emphasized a focus on ROE and tangible book value growth over ROTCE, stating a long-term goal of double-digit ROE. He provided detailed NII guidance, projecting that with 3-4 rate cuts, headline NII would be up low-single-digits by Q4 2025, with a likely trough for key metrics in Q1 2026.

Brian Foran followed up on M&A, asking for the specific factors driving the view of a slow deal environment. He also asked for the key leading indicators that will signal whether the current loan demand slowdown is a temporary pause or a longer-term trend.

Answer

CEO Curtis Farmer attributed the M&A slowdown to 'all of the above,' including regulatory rules, the economy, interest rates, and valuation marks. Chief Banking Officer Peter Sefzik identified the interest rate outlook, the broader macro economy, and performance in key sectors like Michigan Middle Market as the primary indicators for future loan demand.

Brian Foran asked for context on the commercial payments business, including how its scale compares to peers and what metrics best demonstrate its strength, and also inquired about the primary upside and downside risks to the full-year guidance.

Answer

CEO Tim Spence highlighted that Fifth Third is overweight in commercial payments, evidenced by high volume-to-deposit ratios and strong client penetration, partly driven by fintech partnerships. For guidance risks, CFO Bryan Preston identified loan growth and deposit costs as key variables for NII, with market activity being a potential source of volatility for fee income.

Brian Foran from Truist Securities asked for a detailed breakdown of the 20% NII growth forecast and questioned why it wasn't higher given several positive factors. He also inquired about the long-term normalized Net Interest Margin (NIM) range for 2026 and beyond, and whether the consumer loan runoff would conclude in 2025.

Answer

CFO Clark Khayat detailed the drivers for the 20% NII growth, noting that lower starting loan balances offset some positive developments. He stated that for 2026 and beyond, the NIM could reach '3% or maybe even better.' He also clarified that the consumer loan runoff would likely continue past 2025 due to its rate-sensitive nature, but consumer lending remains a long-term strategic focus.

Brian Foran of Truist Securities inquired about KeyCorp's view on a longer-term, normalized Net Interest Margin (NIM) range beyond 2025 and asked if the runoff of the consumer loan portfolio would be completed during the year.

Answer

CFO Clark H. I. Khayat projected that there is 'no reason why' the NIM wouldn't reach 3% or better sometime in 2026. He also explained that the consumer loan runoff is structural and will likely continue in the near term, though consumer lending remains an important long-term part of the balance sheet strategy.

Brian Foran asked about the key economic assumptions, such as home price declines, embedded in the bank's allowance for credit losses. He also sought clarification on the role of real estate brokers in business referrals and the associated client cross-sell timeline.

Answer

Acting CFO Olga Tsokova and CEO Mike Roffler explained the allowance is appropriate given the bank's pristine long-term credit history (9 bps of cumulative losses) and conservative underwriting with low LTVs. Founder and Executive Chairman James Herbert clarified that they do not use brokered loans; rather, real estate brokers refer clients directly due to the bank's reliability. Chief Banking Officer Mike Selfridge added that there is a lag in cross-selling as the bank focuses on earning the full relationship over time after an initial trial.