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    L. Erika Penala

    Managing Director and Senior Research Analyst at UBS

    L. Erika Penala is a Managing Director and Senior Research Analyst at UBS, specializing in the coverage of major U.S. regional banks and the financial services sector. She is recognized for her in-depth analysis of leading companies such as Wells Fargo, U.S. Bancorp, Truist, and PNC Financial, and has earned high rankings on platforms like TipRanks for her accurate stock recommendations, with a historical success rate exceeding 60% and strong average returns for her calls on bank equities. Penala began her career in financial research in the early 2000s, with previous analyst roles at Credit Suisse and Deutsche Bank before joining UBS in 2016, steadily advancing to her current senior leadership position. She holds FINRA Series 7, 63, and 86/87 licenses and is known for earning industry recognition for her insightful commentary and consistent investment outperformance.

    L. Erika Penala's questions to CAPITAL ONE FINANCIAL (COF) leadership

    L. Erika Penala's questions to CAPITAL ONE FINANCIAL (COF) leadership • Q1 2025

    Question

    L. Erika Penala requested the weighted average unemployment rate used in the allowance for credit losses (ACL) calculation and guidance on the future ACL ratio. She also asked for confirmation of the purchase accounting assumptions from February 2024.

    Answer

    CFO Andrew Young explained that their ACL process is not based on a formulaic weighting, so a single unemployment rate could not be provided. He declined to project the future ACL ratio, noting it depends on credit performance versus the economic outlook. He explicitly did not affirm prior purchase accounting marks, stating they will be re-evaluated at closing due to changes in rates, credit, and other variables.

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    L. Erika Penala's questions to AMERICAN EXPRESS (AXP) leadership

    L. Erika Penala's questions to AMERICAN EXPRESS (AXP) leadership • Q1 2025

    Question

    L. Erika Penala sought confirmation that the 8-10% revenue guidance is achievable with a 5.7% unemployment rate and asked about spending trends from January through March for the affluent consumer segment.

    Answer

    CEO Stephen Squeri confirmed that spending was highly consistent through Q1 and that the company is comfortable with its guidance, noting that white-collar unemployment is a more critical driver for their base. CFO Christophe Le Caillec clarified that the 5.7% unemployment figure is a peak rate used for the CECL reserve calculation, not a sustained forecast for the year.

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    L. Erika Penala's questions to AMERICAN EXPRESS (AXP) leadership • Q3 2024

    Question

    Erika Penala of UBS noted that spend per member has been flatter than overall spend growth and asked about the runway to add new customers to sustain growth if spending doesn't rebound. She also inquired about the status of the product refresh cycle.

    Answer

    CEO Stephen Squeri stated that the company has already hit its target of 40 product refreshes for the year and attributed lower spend per member to softer organic spending, particularly in small business. CFO Christophe Le Caillec added that new card members are highly engaged, with transaction counts per new member up 30% from five years ago, and that the focus remains on acquiring premium, fee-paying customers.

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    L. Erika Penala's questions to TRUIST FINANCIAL (TFC) leadership

    L. Erika Penala's questions to TRUIST FINANCIAL (TFC) leadership • Q1 2025

    Question

    L. Erika Penala sought clarification on the 3% NII growth outlook, asking if it was revised and how much was driven by the yield curve versus balance sheet size. She also requested the baseline unemployment rate used for the loan loss reserve.

    Answer

    CFO Michael Maguire confirmed the NII outlook was revised down from an implied rate closer to 4%, with the change almost entirely driven by the flatter yield curve impacting asset repricing. Chief Risk Officer Brad Bender stated the modeled unemployment rate is 5.1%, but the effective rate used for reserves is in the mid-to-high single digits after qualitative overlays.

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    L. Erika Penala's questions to TRUIST FINANCIAL (TFC) leadership • Q4 2024

    Question

    L. Erika Penala asked about the internal, Truist-specific drivers of lending growth, such as leadership and incentive changes. She also requested a quarterly progression of the notional value of active received fixed swaps in 2025.

    Answer

    CEO Bill Rogers attributed growth to investments in talent and distributing responsibilities among existing leaders. CFO Mike Maguire added that the strong capital position post-TIH sale supports a pro-growth agenda. Maguire then detailed the swap portfolio, explaining the notional value of received fixed swaps would ramp from ~$45B to a peak of ~$63B by Q4 2025, with a relatively stable net impact on NII.

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    L. Erika Penala's questions to US BANCORP \DE\ (USB) leadership

    L. Erika Penala's questions to US BANCORP \DE\ (USB) leadership • Q1 2025

    Question

    L. Erika Penala of UBS asked about the specific balance sheet optimization plans to achieve the 3%+ medium-term NIM target and the key markers for accelerating share buybacks.

    Answer

    CFO John Stern detailed that the NIM expansion will be driven by the mechanical repricing of the loan and investment portfolios and an improved asset mix, with the pace influenced by potential Fed rate cuts. He and CEO Gunjan Kedia reiterated that buybacks will increase as the bank approaches its ~10% CET1 target, balanced prudently against the macro environment and other capital needs.

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    L. Erika Penala's questions to US BANCORP \DE\ (USB) leadership • Q3 2024

    Question

    L. Erika Penala followed up on the securities sale and deposit beta trajectory, and asked about the investor reception post-Investor Day, the M&A appetite, and the potential for more aggressive share buybacks.

    Answer

    CFO John Stern clarified the securities sale improved liquidity and the deposit beta increase would be gradual. Chairman and CEO Andy Cecere defended the Investor Day strategy, stated large bank M&A is not a priority, and confirmed modest buybacks would begin shortly, with the pace dependent on regulatory clarity and loan growth. President Gunjan Kedia reinforced the focus on organic growth.

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    L. Erika Penala's questions to BANK OF AMERICA CORP /DE/ (BAC) leadership

    L. Erika Penala's questions to BANK OF AMERICA CORP /DE/ (BAC) leadership • Q1 2025

    Question

    L. Erika Penala asked about the bank's strategy for managing its GSIB score, questioning whether the plan is to reduce exposure or accept a higher surcharge given strong profitability. She also sought to confirm the underlying balance sheet and NIM assumptions for the Q4 2025 NII exit rate guidance.

    Answer

    CEO Brian Moynihan stated that if the markets business can generate strong returns, they will allow it to grow, which could push the GSIB score higher. He argued the GSIB framework should be indexed to economic growth. CFO Alastair Borthwick confirmed the previous assumptions for the Q4 NII exit rate remain valid.

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    L. Erika Penala's questions to JPMORGAN CHASE & (JPM) leadership

    L. Erika Penala's questions to JPMORGAN CHASE & (JPM) leadership • Q1 2025

    Question

    L. Erika Penala (representing Erika Najarian) asked for clarification on the banking system being a 'source of strength' amid economic turbulence. She also inquired about the reserve build, specifically the 5.8% weighted average unemployment rate assumption and the conditions that would necessitate further builds.

    Answer

    Executive Jeremy Barnum clarified that 'source of strength' refers to the banking system's ability to support the economy, not its equity performance. CEO James Dimon added that while a recession would impact earnings, the bank can handle it. On reserves, Barnum explained the 5.8% unemployment figure reflects a higher weighting of downside scenarios due to uncertainty, not a base-case forecast, and that the labor market's health is the key variable for consumer credit.

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    L. Erika Penala's questions to JPMORGAN CHASE & (JPM) leadership • Q3 2024

    Question

    L. Erika Penala of UBS followed up on the 2025 NII outlook, asking if consensus estimates still seem high and how different rate curve scenarios might impact results. She also asked how JPMorgan Chase plans to deploy its significant excess capital beyond typical distributions.

    Answer

    CFO Jeremy Barnum confirmed that the 2025 consensus NII of $87 billion still looks 'a little toppy' and noted that a steeper curve is beneficial, but more Fed cuts than anticipated would be a headwind. CEO James Dimon addressed capital deployment, stating the firm has roughly $30 billion in excess capital but is in no rush to deploy it. He prefers to remain patient, citing inflated asset prices and potential market turbulence, and noted that holding cash can be a valuable strategy.

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    L. Erika Penala's questions to FIFTH THIRD BANCORP (FITB) leadership

    L. Erika Penala's questions to FIFTH THIRD BANCORP (FITB) leadership • Q4 2024

    Question

    L. Erika Penala asked about the expected trajectory for net interest margin (NIM) and the bank's view on a normalized margin in a 4% neutral rate environment. She also questioned the rationale for not revisiting the stress capital buffer.

    Answer

    CFO Bryan Preston forecasted that NIM would continue to improve by a few basis points each quarter in 2025, with a level in the 3.20s being achievable. CEO Tim Spence explained that revisiting the stress capital buffer is unnecessary because it is not a binding constraint for the company.

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    L. Erika Penala's questions to FIFTH THIRD BANCORP (FITB) leadership • Q2 2024

    Question

    Erika Penala (Najarian) questioned the high cash position, asking if it was driven by interest rate management or anticipation of new liquidity rules. She also asked a strategic question about whether Fifth Third remains the proper owner of Dividend Finance, given associated litigation and reputational risk.

    Answer

    CFO Bryan Preston stated the high cash level is an internal decision for liquidity risk management amid rule uncertainty, which also provides flexibility for liability management. CEO Tim Spence defended the ownership of Dividend, linking it to the long-term secular trend of renewable energy and emphasizing their commitment to customer care and focusing on high-quality installers.

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    L. Erika Penala's questions to KEYCORP /NEW/ (KEY) leadership

    L. Erika Penala's questions to KEYCORP /NEW/ (KEY) leadership • Q4 2024

    Question

    Erika Penala from UBS asked for the deposit beta assumption used in the NII guidance. She also posed a strategic question about the appetite to use excess capital to more aggressively add talent and pursue forward-looking growth initiatives.

    Answer

    CFO Clark Khayat stated they assume a deposit beta in the 'mid-40s to high 40s,' approaching 50% during 2025. CEO Christopher Gorman confirmed they will 'absolutely' continue to invest in growth, highlighting plans to expand the investment banking team by 10%, hire more wealth advisors, and pursue bolt-on acquisitions adjacent to their industry verticals.

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    L. Erika Penala's questions to HUNTINGTON BANCSHARES INC /MD/ (HBAN) leadership

    L. Erika Penala's questions to HUNTINGTON BANCSHARES INC /MD/ (HBAN) leadership • Q4 2024

    Question

    L. Erika Penala inquired about Huntington's position in its investment cycle and its stance on participating in the off-cycle stress test for its category.

    Answer

    CEO Stephen Steinour stated that Huntington is not at the end of its investment cycle and believes it would be a 'mistake to pull back prematurely' given the current momentum. CFO Zachary Wasserman addressed the stress test, noting that with their Stress Capital Buffer already at the 2.5% minimum, they would 'leave it alone,' while continuing to run rigorous internal stress tests.

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    L. Erika Penala's questions to HUNTINGTON BANCSHARES INC /MD/ (HBAN) leadership • Q3 2024

    Question

    L. Erika Penala probed the 2025 NII outlook, asking if consensus for 8% year-over-year growth was directionally correct, and inquired whether 2025 would be a 'harvest year' for expenses with a lower growth rate.

    Answer

    Zach Wasserman, Chief Financial Officer, stated that an 8% NII growth forecast for Q4 2025 was 'not directionally wrong,' citing drivers like NIM rising above 3% and sustained 6% loan growth. On expenses, he clarified that while the bank will drive for positive operating leverage, he does not see 2025 as a 'harvest year' and intends to continue investing for growth while improving the efficiency ratio.

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    L. Erika Penala's questions to CITIZENS FINANCIAL GROUP INC/RI (CFG) leadership

    L. Erika Penala's questions to CITIZENS FINANCIAL GROUP INC/RI (CFG) leadership • Q4 2024

    Question

    L. Erika Penala from UBS inquired about the strategic drivers of margin improvement, including deposit mix and repricing, and asked for the expected 2025 exit NIM. She also asked about the investment horizon for the Private Bank and Private Wealth initiatives.

    Answer

    Executive John Woods projected a 2025 exit NIM between 3.05% and 3.10%, citing outperformance in deposit betas and strategic growth. Executive Brendan Coughlin noted the Private Bank's low-cost deposit mix and successful retail CD turnover at lower yields. Executive Bruce Van Saun affirmed commitment to the Private Bank's profitability targets, including being 5% accretive to the bottom line in 2025, stating that if the business outperforms, they will continue to invest in new teams while maintaining financial discipline.

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    L. Erika Penala's questions to M&T BANK (MTB) leadership

    L. Erika Penala's questions to M&T BANK (MTB) leadership • Q4 2024

    Question

    L. Erika Penala asked if M&T was opting into the DFAST stress test in an off-cycle year to address its stress capital buffer and how recent Fed commentary on transparency might impact its path to a lower long-term capital target.

    Answer

    CFO Daryl Bible confirmed that M&T has already opted into the 2025 stress test, believing that reductions in CRE and criticized loans should result in a better outcome and a lower stress capital buffer. He applauded the Federal Reserve's move toward greater transparency, viewing it as a positive development for the industry and the bank's capital planning.

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    L. Erika Penala's questions to PNC FINANCIAL SERVICES GROUP (PNC) leadership

    L. Erika Penala's questions to PNC FINANCIAL SERVICES GROUP (PNC) leadership • Q3 2024

    Question

    L. Erika Penala of BofA Securities inquired about the mechanics of PNC's swap portfolio, specifically the rising received fixed rates and the strategy for 2025 maturities. She also asked about the bank's natural deposit cost spread in a higher rate environment and the drivers behind the recent strength in deposit growth.

    Answer

    CFO Rob Reilly confirmed that new swaps are being added at higher rates than those rolling off, contributing to the bank's confidence in achieving record Net Interest Income (NII) in 2025. CEO Bill Demchak noted that a steeper yield curve would be a highly attractive environment. Reilly added that the Q3 deposit growth was driven by commercial clients building cash, which is expected to hold through year-end.

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    L. Erika Penala's questions to FIRST REPUBLIC BANK (FRCB) leadership

    L. Erika Penala's questions to FIRST REPUBLIC BANK (FRCB) leadership • Q4 2022

    Question

    Erika Najarian of UBS inquired about the bank's long-term, normalized efficiency ratio once the current period of rate volatility passes. She also asked for perspective on where deposit costs might ultimately settle in a future rate-cutting cycle, especially relative to a terminal Fed funds rate that is above zero.

    Answer

    CEO and President Michael Roffler projected that the bank's efficiency ratio would return to its historical range of 62% to 64% in 2024 as the rate environment normalizes. Regarding future deposit costs, Roffler emphasized that the outcome will be highly dependent on the deposit mix, but noted the significant value of the checking portfolio, which is expected to remain above 50% of total deposits. Founder and Executive Chairman Jim Herbert added historical context, stating that checking has historically been in the 50-55% range, which is the primary driver of the overall cost of funds.

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    L. Erika Penala's questions to FIRST REPUBLIC BANK (FRCB) leadership • Q2 2022

    Question

    L. Erika Penala asked about potential near-term challenges for capital call lines due to market conditions and whether deposit growth could remain positive in a rising rate environment. She also questioned if the second quarter's net interest margin represented a peak for the year.

    Answer

    Chief Banking Officer Mike Selfridge acknowledged that private market valuations would likely decline but noted that quality funds will continue to find investment opportunities. CEO Mike Roffler expressed confidence in continued deposit growth, driven by deep client relationships. Founder and Executive Chairman James Herbert added that household growth is the fundamental driver. Acting CFO Olga Tsokova reiterated the full-year NIM guidance for the top half of the 2.65%-2.75% range, implying stability rather than a definitive peak.

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