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    L. Erika Penala • UBS

    L. Erika Penala's questions to Capital One Financial Corp (COF) leadership

    L. Erika Penala's questions to Capital One Financial Corp (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 Co (AXP) leadership

    L. Erika Penala's questions to American Express Co (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 Co (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 Corp (TFC) leadership

    L. Erika Penala's questions to Truist Financial Corp (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 Corp (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 (USB) leadership

    L. Erika Penala's questions to US Bancorp (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 (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 (BAC) leadership

    L. Erika Penala's questions to Bank of America Corp (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 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 (KEY) leadership

    L. Erika Penala's questions to KeyCorp (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 Citizens Financial Group Inc (CFG) leadership

    L. Erika Penala's questions to Citizens Financial Group Inc (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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