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David Fox, Chief Financial Officer, clarified that Northern Trust's NDFI exposure primarily consists of subscription lines to private equity firms (backed by LP capital commitments), loans to management companies (secured by management fees), and diversified NAV loans on the wealth side with low advance rates. Michael O'Grady, Chairman and CEO, emphasized their 'goals-driven wealth management' approach, which involves determining clients' lifetime needs upfront to establish appropriate asset allocation. This strategy includes ensuring sufficient reserve capacity and risk-off assets to navigate market drawdowns, helping clients remain focused on long-term goals rather than overreacting to volatility.

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CFO David Fox clarified Northern Trust's NDFI exposure primarily consists of subscription lines to private equity firms (backed by LP capital commitments), loans to management companies (secured by management fees), and low-advance-rate, diversified NAV loans on the wealth side, distinguishing these from direct lending to private credit funds. Chairman and CEO Michael O'Grady explained their 'goals-driven wealth management' approach, which focuses on long-term client needs, appropriate asset allocation, and maintaining reserve capacity to navigate market volatility without overreacting.

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CFO David Fox noted that while AUC is about 50% equities, the company is increasingly moving toward solution-based, custody-agnostic revenues. CEO Mike O'Grady commented that potential Basel III changes to operational risk models could be favorable and that SLR changes would add capacity but are not currently needed. He also stated the remaining Visa stake is carried at zero, has a pre-tax unrealized gain of about $1.1 billion, and is considered restricted.

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Chief Financial Officer David Fox defined the sustainable model as one that does not rely on factors outside the company's control, focusing instead on driving down the expense curve and increasing organic growth to build resiliency. Chairman and CEO Michael O'Grady identified key risks as the things they cannot control, such as significant market downturns, operational stress from volatility, and the impact of central bank actions on liquidity and interest rates, emphasizing preparedness over prediction.

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CEO Mike O'Grady stated that the primary external metric for the 'One Northern Trust' strategy's success will be a higher organic growth rate. Then-CFO Jason Tyler explained that despite a steepening curve, the current short duration of the balance sheet means falling short-term rates would be a headwind for NII, though partially offset by deposit stability and reinvestment benefits.

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CEO Bill Rogers explained that AI's success will be reflected in overall business performance, leading to disproportionate growth and efficiency, rather than isolated metrics. He views AI as a fuel for accelerating ROTCE. Chief Risk Officer Brad Bender stated that the First Brands exposure is less than $200 million for Truist and is part of a broader base, but declined to provide further details due to the early stage of the process and client confidentiality.

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CEO William Rogers described the Southeast as 'always competitive' but stated Truist is well-positioned and not seeing unusual aggression in pricing or structure. Chief Risk Officer Brad Bender detailed that NDFI exposure is well-governed, with the largest concentration in REITs, and is considered regular business with long-time clients. Rogers also acknowledged private credit as a known competitor.

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CEO Bill Rogers expressed confidence in maintaining a low double-digit growth CAGR for the investment banking business, highlighting its efficiency and middle-market focus. However, he also stressed the importance of growing other fee income streams like payments and wealth to maintain a diverse revenue mix, suggesting a 'steady as she goes' approach rather than allowing one area to become disproportionately large.

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CEO Bill Rogers stated that the ultimate measure of wallet share gain is improved business returns, specifically ROTCE and ROA, and pointed to metrics like increased checking primacy as evidence. He described the "T3" (Touch + Technology = Trust) strategy, which emphasizes an integrated approach where digital tools and human interaction are complementary, highlighting the critical role of physical branches during recent hurricanes as proof of the model's effectiveness.

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Daryl Bible, SEVP and CFO, attributed increased loan approvals to smoother internal systems and closer collaboration between the first line and credit teams. He noted that the shift to observations from MRAs streamlines remediation, making processes faster and more efficient. Mr. Bible expressed hope that the Basel III endgame would be more streamlined and focused on essential capital requirements for banks of M&T's size.

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CFO Daryl Bible stated that M&T is monitoring stablecoins and will partner to offer them if customers demand it, but adoption depends on being easier and cheaper than current rails. He attributed the improved NCO guidance to general caution amid market uncertainty rather than specific portfolio outperformance. The CRE sale involved an out-of-footprint portfolio with no customer relationships, allowing capital to be redeployed to core clients.

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CFO Daryl Bible stated that M&T is monitoring stablecoins and will adopt them if customers demand it, but noted they must become easier and cheaper than current rails to gain traction. He described the improved charge-off guidance as cautious due to macro uncertainty. The CRE sale, he explained, was a strategic disposition of an out-of-footprint portfolio with no client relationships, allowing capital to be redeployed to core customers.

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Daryl Bible (executive) stated the regulatory environment appears more pro-business and focused on tailoring rules, which could be positive. On CRE, he explained the decline is driven by intense market competition leading to aggressive pricing from other lenders and higher-than-expected payoffs, as M&T remains disciplined on underwriting.

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CFO Daryl Bible compared the strategy to the bank's successful 20-year build-out in Baltimore, noting the timeline could be accelerated by inorganic opportunities. He expressed optimism about potential regulatory changes, hoping for a more balanced approach focused on safety and soundness, transparency, and tailoring, which aligns with M&T's fundamental approach.

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CFO Daryl Bible stated that M&T has significant capital flexibility with a CET1 ratio over 11.5%. He anticipates returning more capital to shareholders in 2025, possibly by targeting a CET1 ratio above 11%, assuming a stable economy. Bible also expressed confidence in NII and margin improvement, citing structural benefits like fixed-asset repricing, a strong deposit base, and favorable hedge repricing, which are not dependent on rate cuts.

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Gunjan Kedia, CEO, explained that U.S. Bancorp is working on stablecoins in two areas: capital markets/investments (custody and safekeeping of collateral/crypto assets) where the business model is clear, and as a payment rail where client demand is more muted but efforts are underway to be ready for onboarding/offboarding and providing services, with pilots expected this year. She noted the unique Elan franchise also requires readiness. John Stern, Vice Chair and CFO, stated that the bank is in the 'final lap' of building capital, currently at 10.9% CET1, and expects the glide path to increase capital returns to the 75% area in 2026, balancing this with loan growth.

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Gunjan Kedia, CEO, explained that the bank is working on stablecoins in two areas: capital markets (custody/safekeeping of collateral and crypto assets) where the business model is clear, and as a payment rail, where client demand is muted but efforts are underway to be ready for onboarding/offboarding and providing services. She mentioned piloting stablecoin transactions this year and studying the market for smaller banks via Elan. John Stern, Vice Chair and CFO, stated that the bank is in the "final lap" of building capital, with CET1 at 10.9%. He anticipates increasing the pace of capital return towards the 75% area in 2026, balancing it with loan growth.

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Gunjan Kedia, CEO, explained that U.S. Bancorp is working on stablecoins in two areas: capital markets/investments (custody and safekeeping of collateral/crypto assets) where the business model is clear, and as a payment rail where client demand is more muted but efforts are underway to be ready for onboarding/offboarding and providing services, with pilots expected this year. She noted the unique Elan franchise also requires readiness. John Stern, Vice Chair and CFO, stated that the bank is in the 'final lap' of building capital, currently at 10.9% CET1, and expects the glide path to increase capital returns to the 75% area in 2026, balancing this with loan growth.

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Vice Chair & CFO John Stern explained the mortgage sale was a strategic move to divest single-service loans and reinvest the proceeds at a higher spread, better supporting multi-service clients. President & CEO Gunjan Kedia stated that while the bank is prepared for stablecoins, she does not anticipate a material near-term impact on its primarily domestic payments businesses, as current stablecoin use cases are concentrated in cross-border and institutional payments.

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CFO John Stern explained that while the bank maintains a neutral interest rate risk position, an upward-sloping yield curve is ideal for profitability. He also stated that share repurchases would increase as the bank approaches its target CET1 ratio of approximately 10% under Category II rules, aligning with the long-term goal of a 70-80% total payout ratio.

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CFO John Stern responded that the bank doesn't target a specific loan-to-deposit ratio but holistically manages its balance sheet, noting they shed higher-cost deposits amid muted loan demand. President Gunjan Kedia explained the branch strategy is to increase density within their existing footprint while using digital capabilities and partnerships for capital-light expansion into new markets.

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CEO Robin Vince clarified that wins stem from equipping sales teams and clients with knowledge of BNY Mellon's broad, adjacent products, leading to increased value when used together, alongside product innovation and capturing megatrends. He noted that while no client is at an 'optimal mix,' the number of clients buying three or more services is up 40% over two years. Robin Vince also stated BNY Mellon is open to M&A if it aligns strategically and offers strong returns, but feels no pressure due to strong organic transformation.

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CEO Robin Vince clarified that it's a transformation from siloed product delivery to equipping sales teams and clients with knowledge of BNY's full, adjacent product suite, noting that clients buying three or more services are up 40% over two years. He humorously stated 'none of them are at the optimal mix' for clients but confirmed BNY uses dashboards and targets to embed commercial model rhythms. Robin stated BNY is 'very open to M&A' if it accelerates or de-risks strategies, but feels 'no pressure whatsoever' due to the success and runway of its organic transformation.

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CFO Dermot McDonogh confirmed that the firm is actively working on optimizing the balance sheet for 2026. CEO Robin Vince addressed the SLR, noting that the Tier 1 leverage ratio is BNY's binding constraint. He argued that the SLR is ill-advised as it penalizes holding cash and Treasurys, hindering banks' ability to absorb market supply and ultimately harming market function. He expressed hope that new agency leadership would move away from such "gold plating" rules.

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CEO Robin Vince characterized the M&A approach as opportunistic, focusing on digestible, capability-enhancing bolt-ons like Archer that accelerate their strategy, rather than pursuing deals out of necessity. He reiterated the capital allocation waterfall: prudence, organic investment, opportunistic M&A, and shareholder returns. CFO Dermot McDonogh confirmed that the market sensitivity analysis applies to both up and down markets.

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Chairman and CEO Will Demchak noted that consumer spending, including credit and debit, is robust across all segments, with higher-income clients driving much of the growth due to the wealth effect, and PNC is adding new card users. On regulation, Mr. Demchak expressed optimism that the MRA proposal could significantly reduce 'hundreds and hundreds' of FTE-equivalent hours spent on process-oriented compliance, rather than actual risk mitigation. He stated it's too early to determine the binding capital constraint until Basel III endgame details are clear, emphasizing PNC's internal 'fortress balance sheet' philosophy.

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Bill Demchak, Chairman and CEO, noted broad-based credit and debit card spending, with higher credit usage in lower-income segments and overall consumer spend driven by the wealth effect among wealthier clients. Rob Reilly, Executive Vice President and CFO, added that PNC's growth in new card users contributed to this activity. Bill Demchak discussed a strong push from Washington to simplify regulatory processes, potentially reducing hundreds of FTEs tied to MRA compliance by focusing on material risks. On capital, he stated that while Moody's was a binding constraint, potential Basel III endgame changes to risk-weighted assets make it too early to determine the future primary constraint, emphasizing PNC's independent goal of maintaining a 'fortress balance sheet.'

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Chairman & CEO William Demchak stated he doesn't believe regulators and rating agencies coordinate on methodologies. On stablecoins, he sees them as 'another payment tool' to be integrated but is not worried about them draining deposits. He also expressed great excitement about the $92 billion in AI-related investment announced for Pennsylvania, seeing it as a major economic catalyst for the region.

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CFO Rob Reilly indicated that any expense savings from resolving CRE issues would be minimal, as staff would be redeployed. CEO Bill Demchak stated his guess is that future capital needs will be less, but he doesn't foresee a massive regulatory change. He noted PNC's historically low CCAR drawdown gives them a strong starting position, and once rules are settled, they can reassess capital targets.

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CEO Bill Demchak stated that while private credit is a factor at the margin, it is not the primary cause of lower loan growth, and competition in asset-backed lending remains with traditional players. CFO Rob Reilly specified that new branch expansion is focused on markets like South Florida, Texas, Arizona, and Colorado.

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CEO Bill Demchak reported that credit trends are benign, with downgrades slightly outpacing upgrades due to margin compression, but the overall portfolio is healthy. He agreed that companies are likely better managed post-pandemic, contributing to lower loan utilization. Regarding CRE office, he explained that for deeply distressed properties, vacancy and absorption potential are far more critical to valuation than marginal changes in cap rates.

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Chair of Commercial Banking Don McCree advised looking at regulatory filings from credit companies, noting the difficulty of generalizing across different fund types. CEO Bruce Van Saun acknowledged the holistic affordability issue in housing and the challenge of lowering mortgage rates without broader market impact. He stated Citizens is not relying on a mortgage boom, having refocused its business on relationship customers and durable fee revenue sources. President Brendan Coughlin added that with 74% of homeowners having rates under 5%, a massive refi pickup is unlikely, and Citizens is strongly positioned in HELOCs.

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CEO Bruce Van Saun and CFO John Woods stated they prefer to let the remaining short-duration auto portfolio run off naturally to avoid incurring an unnecessary liquidity cost on a sale, noting the balance will be minimal by year-end. Regarding C&I credit, Head of Commercial Banking Don McCree asserted there is no broad deterioration, attributing the small nonaccrual increase to isolated instances rather than a macro trend. He emphasized that clients remain resilient.

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Executive Bruce Van Saun expressed hope for finalized Basel III rules, refreshed supervision, a more insightful CFPB approach to fees, and less friction for M&A. On CRE, Van Saun assessed they are in the 'middle innings' of the workout. Executive Donald McCree added that deterioration has nearly stopped and inflows to workout have slowed to a trickle, with liquidity returning to the broader CRE market. Executive John Woods confirmed criticized assets declined significantly, led by CRE.

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Chair and CEO Brian Moynihan explained that the economy is larger, with more cash in circulation, and the company has gained market share in core transactional accounts, adding 750,000 new primary checking accounts annually. He noted that average balances per account have increased, and the low cost of consumer deposits (58 basis points) significantly boosts profitability. He believes deposits bottomed out 1.5-2 years ago and are now growing with economic expansion and market share gains, with no dynamic suggesting a significant outflow of money from the banking system.

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Brian Moynihan (Chair and CEO, Bank of America) explained that the economy is larger, leading to more cash in circulation, and Bank of America has gained market share in core transactional accounts, increasing both customer numbers and average balances. He highlighted the operating leverage from stable costs against improved net interest income from these low-cost deposits, noting that the 'flow back' of money out of the banking system has largely already occurred.

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CEO Brian Moynihan stated that the efficiency ratio can move back toward pre-pandemic levels, noting that 200 basis points of the current ratio is due to the accounting for tax credit deals that will run off, and that accelerating NII growth will also drive improvement. Regarding stablecoins, he views them as a potential new payment rail the bank will be prepared to support for clients, similar to how the industry developed Zelle.

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CFO Alastair Borthwick described the commercial loan book as highly diversified, secured, and investment-grade, with growth supporting multinational clients. CEO Brian Moynihan explained that the current credit card charge-off rate represents a normalization from unsustainably low, stimulus-fueled levels and is in line with the pre-pandemic 2019 period.

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CFO Alastair Borthwick credited the strong credit performance to a more resilient consumer with stronger balance sheets and income levels, rather than any change in the bank's consistent underwriting standards. CEO Brian Moynihan identified geopolitical events and the buildup of excess leverage in the non-bank financial system as key risks, emphasizing that the company is managed to withstand such events.

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CEO Brian Moynihan stated that while details are pending, the latest Basel proposal appears more favorable than the original, which would benefit the bank and support returning more capital to shareholders. He also explained the branch expansion is a disciplined strategy to achieve full market coverage in key cities, providing a 'high touch, high tech' experience, as many customers still prefer opening accounts in person.

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CFO Mark Mason clarified that a 100 basis point parallel shift across the curve would result in a $1.8 billion drag for total U.S., but only $400 million in U.S. dollar, with this number declining. He explained that NDFI exposure, including private credit, is predominantly investment grade, comprising securitization exposures with diversified collateral pools and structural protections. Citi maintains a selective approach to risk in this category.

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CFO Mark Mason clarified that a 100 basis point parallel shift across all currencies would result in a $1.8 billion NII drag, with only $400 million in USD, and this sensitivity is declining. He explained that MBFI exposure, which includes private credit, is predominantly investment grade, made up of securitization exposures with diversified collateral pools, structural protections, and transparency, assuring comfort with the credit quality.

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CEO Jane Fraser confirmed that Wealth Management saw positive momentum in May and June as clients became more proactive, though they remain cautious. CFO Mark Mason explained the reduction in allocated TCE to Markets was due to the business's excellent work in optimizing RWA and generating higher, more stable returns, which reduced its contribution to stress losses and thus its capital requirement in the firm's annual allocation.

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CEO Jane Fraser confirmed that positive momentum in wealth flows returned in May and June as markets recovered, although clients remain cautious. CFO Mark Mason explained that the lower capital allocation to the Markets business reflects its strong performance in optimizing RWA and generating higher, more stable returns, which reduced its contribution to the firm's modeled stress losses.

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CFO Mark Mason attributed the growth in trading assets to strong performance and client demand across the entire platform. Regarding equity allocation, he explained it's an annual process and the reduction reflects the improved PPNR, profitability, and resiliency of the businesses in internal stress scenarios. This allows them to get the benefit of improved performance even before it might show up in the regulatory stress capital buffer.

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CFO Mark Mason explained that the Banamex IPO process involves multiple steps and regulatory approvals, and he did not provide a precise timeline or ownership structure, noting the P&L impact occurs at deconsolidation. CEO Jane Fraser expressed confidence in the path to mid-to-high teen returns for U.S. Personal Banking, driven by top-line growth from co-brand partnerships like American Airlines, innovation in proprietary cards, and feeding the Wealth business.

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CFO Mark Mason cited product innovation, like the STRATA card refresh, and the normalization of credit costs as key drivers for U.S. Personal Banking returns. He clarified the Banking ACL build was due to portfolio mix changes but was not material, pointing to a low corporate non-accrual loan ratio of 31 basis points.

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CFO Mike Santomassimo reported that credit quality in multifamily and other commercial real estate properties remains stable, with no significant deterioration or change in trend, and excess supply in multifamily pockets is being worked through. He does not anticipate office portfolio growth but sees opportunities for broader commercial real estate growth over time. CEO Charlie Scharf clarified that Wells Fargo is actively lending across all CRE categories, including office, for quality properties. Mike Santomassimo confirmed that Wells Fargo has used security risk transfers in the past and will consider more if economically sensible, but underwriting is done with the intent to keep assets.

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CFO Mike Santomassimo reported overall stability in other CRE segments, with no significant deterioration or trend changes, noting that pockets of excess supply in multifamily are 'getting worked through.' He does not anticipate office portfolio growth but sees opportunities for broader CRE growth over time, depending on market conditions. CEO Charlie Scharf clarified that Wells Fargo is actively lending across all CRE categories, including office (for quality properties), but growth depends on new lending versus payoffs. Mike Santomassimo confirmed Wells Fargo has used security risk transfers in the past and will consider more if needed. Charlie Scharf added that while it's a tool, underwriting is done with the intent to keep assets, and future use would be for economic risk management.

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CFO Mike Santomassimo reported that commercial real estate trends outside of office are stable, with no significant deterioration, and multifamily excess supply is being worked through. He doesn't anticipate office portfolio growth but sees opportunities in broader commercial real estate over time. CEO Charlie Scharf clarified they are actively lending across all CRE categories. Mike Santomassimo confirmed they have used security risk transfers in the past and will consider more if needed, with Charlie Scharf adding it's a tool to manage overall risk profile if economically sensible.

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CFO Michael Santomassimo explained that the C&I loan growth was broad-based, with contributions from fund finance, TMT, industrials, healthcare, asset-backed lending, and prime brokerage. He confirmed that the rail portfolio was the last significant business divestiture planned as part of the company's multi-year strategic simplification.

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CFO Michael Santomassimo detailed that the C&I growth was broad-based across the Corporate and Investment Bank, including areas like fund finance, TMT, industrials, healthcare, asset-backed lending, and prime brokerage. He also confirmed that the rail portfolio was the last major business identified for divestiture as part of the company's strategic simplification.

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CEO Charlie Scharf stated that the company has not defined a specific optimal revenue mix post-asset cap, but emphasized that building fee businesses in card, wealth, and payments is strategically sound regardless. CFO Mike Santomassimo responded that the entire C&I portfolio is under continuous review, highlighting the company's long-standing and robust credit discipline rather than focusing on specific categories.

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CEO Charlie Scharf identified cybersecurity as the biggest non-economic risk they focus on, with the overall strength of the U.S. economy being the most critical factor for business performance. CFO Mike Santomassimo addressed M&A by stating the company is 100% focused on its significant organic growth opportunities and that this focus will not change even after the asset cap is lifted.

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CEO Charlie Scharf stated that while CRE office performance is within expectations, conditions are not improving but rather worsening as more properties are impacted by revaluations. CFO Michael Santomassimo added that the bank's allowance is appropriate for a workout that will take a long time. On deposits, he noted that customer behavior has not changed significantly, with the year-long trend of slowing migration to higher-yielding products continuing.

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President and CEO Javier Ferrer stated that following the approval of the Genius Act, the company has assembled a team to conduct deeper analysis and explore potential use cases for stablecoins. He acknowledged that it is still "early innings" but confirmed that Popular has begun to address the opportunity, recognizing its future impact on the industry.

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President and COO Javier Ferrer-Fernández outlined his vision to build on the current strategy, focusing on execution and strengthening areas like payments to achieve a 12% ROTCE by year-end and a sustainable 14% long-term. CFO Jorge Garcia acknowledged the bank's robust capital but stressed a measured, long-term approach to capital reduction. He confirmed the current buyback authorization is open-ended and that new authorizations follow a rigorous internal process involving stress tests and regulatory communication.

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CEO Ignacio Alvarez confirmed that the Census Bureau reported positive net in-migration for the first time in years. He detailed that $45B-$47B in federal funds remain, primarily for the electric grid, water systems, and housing, with the grid being an 8-10 year project. CRO Lidio Soriano clarified his earlier comment was about the timing of the credit cycle, not underwriting, but confirmed they have tightened standards and are lending to higher FICO scores.

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CFO Jorge Garcia described the bank's rate position as 'fairly neutral' and noted they are hedging against falling rates by buying 2-3 year treasuries. CRO Lidio Soriano explained the credit card disconnect by stating that new, high-FICO originations are still a small part of the total outstanding balance, so their positive impact is not yet fully reflected in portfolio metrics.

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President, CEO, & Chairman John Turner attributed strong credit quality to healthier customer balance sheets and improved industry-wide risk management. He noted they are working through a few large office credits and that the transportation sector remains stressed but manageable. Senior EVP & CFO David Turner added that consumer credit is strong. Regarding stablecoins, John Turner stated that Regions would likely participate in a bank consortium, similar to its approach with Zelle and other payment initiatives.

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Executive John Turner confirmed the economic data is for their footprint. Executive David Turner acknowledged the pace of reserve decline is uncertain but stated the accounting math dictates the ratio must come down as fully-reserved charge-offs are realized. John Turner identified retail trade, manufacturing (consumer durables), and construction as new areas receiving extra attention.

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Executive John Turner cited high customer liquidity and real estate headwinds as constraints on loan growth. Regarding acquisitions, he noted Ascentium is performing well despite some small business pressure, while EnerBank's growth is muted due to a runoff portfolio. Executive David Turner stated the interim target for the HTM portfolio is to increase it from 14% to around 25% to reduce AOCI volatility, adding that large-scale repositioning is unlikely in 2025.

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Chairman & CEO David Solomon explained that the 'high bar' for M&A is primarily strategic and cultural fit, particularly in advancing the Asset & Wealth Management franchise, with financial analysis being a subsequent consideration. Regarding risks, he emphasized the firm's constant focus on risk management for low-probability events and the need to remain vigilant amid geopolitical and policy uncertainty, noting the path forward is 'never a straight line.'

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Executive Denis Coleman clarified that capital from the HPI portfolio is freed up progressively as it's sold down, not at the end. CEO David Solomon stated that uncertainty is up significantly everywhere, but he hears a 'greater sense of short-term concern' from CEOs outside the U.S.

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CEO David Solomon identified potential risks including market sentiment shifts and uncertainty around new administration policies on trade, tax, and energy, as well as cyber risk. Regarding AI, he explained that while the firm is having early success and is focused on efficiency, investors should not expect a specific line-item impact. Instead, AI and technology create capacity to reinvest in and scale the client franchise, making the firm more productive overall.

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CEO David Solomon explained that clients seek the best capital structure for their needs, and Goldman is uniquely positioned to offer a range of solutions from syndicated loans to direct lending. He noted competitors vary by activity: JPMorgan Chase & Co. in syndicated finance, firms like HPS or Ares in direct lending, and Apollo in investment-grade. CFO Denis Coleman added that few competitors match Goldman's breadth across the ecosystem.

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Interim CFO Mark Keating confirmed that higher market levels were a positive contributor to fee growth, consistent with their disclosed sensitivities. CEO Ronald O'Hanley explained that 'One State Street' is about delivering the entire firm's capabilities through integrated relationship management. He acknowledged the measurement question was valid and said the company would consider how to provide disclosures to demonstrate its success.

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Loan growth is driven by opportunities with private markets clients, including subscription lines and BDC lending, and is closely tied to the growing servicing business. The growth is direct, not from participations. On regulation, management sees a real possibility for thoughtful changes. While direct relief from SLR changes would be limited for trust banks, it would be very positive for market liquidity (e.g., Treasuries). A scenario of moderated capital and tuned liquidity rules would be quite favorable for the industry.

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Interim CFO Mark Keating identified loan growth opportunities in subscription lines, BDC lending, and middle-market CLOs, often linked to their private markets clients. CEO Ronald O'Hanley added that the balance sheet is deployed to support fee-based businesses. Regarding regulation, O'Hanley anticipates constructive changes to capital and liquidity rules, which would benefit the market system, though the incremental impact on trust banks might be limited. He sees a path to a more favorable regulatory environment overall.

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Ron O'Hanley detailed that machine learning is already deeply embedded, while newer generative AI is in testing for client service and will be a key part of future transformation. Eric Aboaf stated there are no immediate limits on loan portfolio growth as it's tied to their successful private markets strategy and that the company is open to providing more detailed disclosures in the future.

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CEO Ron O'Hanley explained that while machine learning is already deeply embedded in operations like NAV calculation, generative AI is in early testing. He anticipates its first applications will be in client service chatbots and internal HR inquiries. CFO Eric Aboaf added that there are no immediate limits on loan growth, as it is a core part of their relationship-based model and State Street remains a capital-light business compared to peers. He also expressed openness to providing more detailed disclosure on the portfolio.

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Executives explained that the true value for shareholders is the ability to reinvest capital at a high ROTCE, not just achieving a static target. They acknowledged the current environment is exceptionally favorable but also that long-term strategic investments are paying off. The competitive landscape prevents them from declaring permanent victory on returns. The comment on securitized products simply reflected normal diversification within the markets business during the quarter.

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Executive Jeremy Barnum stated it's too early to see a clear trend of re-intermediation but emphasized the bank's commitment to lending through all cycles. Regarding regulation, Barnum gave a diplomatic response about working constructively with any administration, while CEO James Dimon added that he believes there is now a 'deep recognition of the flaws in the system' among policymakers.

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The bank sees healthy checking account growth driven by the end of yield-seeking outflows combined with successful client acquisition from its branch expansion strategy. Regarding special dividends, Jamie Dimon stated bluntly that the bank is not going to do one, as they are not believed to add shareholder value and that holding cash patiently is a better strategy.

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CEO James Dimon stated his excess capital estimate of $30 billion already assumes a less severe Basel III outcome based on recent regulatory commentary. CFO Jeremy Barnum added that the firm needs to see the detailed proposal and advocated for a holistic review of all capital rules. Regarding the asset mix, Dimon responded 'Absolutely positively not,' clarifying that loan growth is an outcome of good business, not a primary tool for deploying excess capital.

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CFO Clark Khayat stated that while he doesn't expect 'massive reserve releases,' the credit book is viewed as stable to improving. Regarding C&I loans, he acknowledged the slight pickup and strong pipelines but noted they are waiting for borrowing activity to materialize more consistently, citing continued low line utilization rates.

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Executive Sharon Yeshaya explained that the firm constantly runs stress tests for a variety of risks, including macro, counterparty, and market velocity, to ensure the firm is prepared for unforeseen events. Executive Ted Pick added that the primary risks fall into two buckets: first, the implications of the regime change away from zero interest rates, with a potential downside risk of stagflation; and second, ongoing geopolitical uncertainty, which impacts their global business. He concluded that the firm's consistent 2024 performance through various market conditions demonstrates its resilience.

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Co-President Ted Pick attributed the strong prime brokerage results predominantly to increasing wallet share with the existing global client base, facilitated by the integrated investment bank model. CFO Sharon Yeshaya explained that the CRE and corporate loan charge-offs were expected and had been largely provisioned for in prior periods as the firm anticipated these credit issues working through the market.

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CEO Ted Pick reported that while treasury market volumes were higher with some derisking, the markets have remained orderly and client engagement has not signaled broader stress. CFO Sharon Yeshaya highlighted that the adviser-led and self-directed channels see high engagement in volatile markets, with rising unsolicited trades and platform volumes, while the Workplace channel is less in the firm's direct control.

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CFO Bryan Preston described a steeper yield curve as 'very powerful' for NII, as it would provide relief on liability costs and improve spreads on fixed-rate assets. CEO Tim Spence added that this outlook is realistic, citing macroeconomic factors that could support a stickier long end of the curve. Regarding capital, Preston reiterated a target dividend payout ratio of 35-45% in normal environments, with buybacks determined by capital capacity after funding organic growth.

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Chief Credit Officer Greg Schroeck explained the commercial charge-offs were driven by two idiosyncratic, previously reserved loans and not a systemic trend. He noted overall credit metrics, including NPAs, improved. Regarding SNCs, he stated exposure to private credit is minimal, with the main exposure to financial sponsors being through well-collateralized subscription lines.

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