Ryan Nash

Ryan Nash inquired about Rocket Companies' expectations for 2026, specifically regarding the size of the mortgage market, anticipated market share gains, operating leverage, and any projected EBITDA margin expectations.

Answer

Varun Krishna (President and CEO, Rocket Companies) stated that 2026 is expected to be stronger than 2025, with industry forecasts predicting double-digit growth driven by lower rates, increasing inventory, and wage growth. He emphasized Rocket's integrated ecosystem, which generates demand across search, origination, and servicing, leading to high client retention and recapture. Brian Brown (CFO, Rocket Companies) highlighted Q4 2025's strong performance, including over 50% of refinance volume from the servicing book, double-digit growth in direct-to-consumer purchase, and record closed-end second volume, as a robust starting point for Q1 2026, noting healthy gain on sale margins and strong Q1 production.

Ryan Nash asked for Rocket Companies' expectations for 2026, including projections for market size, potential market share gains, anticipated operating leverage, and specific EBITDA margin expectations.

Answer

President and CEO Varun Krishna expressed optimism for 2026, forecasting a stronger mortgage market with double-digit growth, driven by lower rates, increasing inventory, and wage growth. He emphasized Rocket's integrated ecosystem and expanded distribution channels as key to accelerating growth. CFO Brian Brown highlighted strong Q4 performance, including high Mr. Cooper recapture rates and double-digit growth in direct-to-consumer purchase business, setting a positive trajectory for Q1 with healthy gain on sale margins.

Ryan Nash inquired about Rocket's 2025 outlook for revenue and operating leverage, considering Q1 performance, April's market softness, and brand investments, and also asked if the recent acquisitions accelerate or increase market share goals.

Answer

CEO Varun Krishna explained that market volatility in April reversed Q1's momentum, impacting consumer confidence. CFO Brian Brown added that the Q2 outlook reflects a challenging April for both margin and volume, but anticipates sequential improvement in May and June. Brown also projected that marketing spend would decrease by approximately $100 million in the second half of the year and noted the company has the option to convert excess operational capacity into cost savings if market conditions do not improve.

Ryan Nash asked for clarification on the $100 million Q1 cost increase, questioning how much is recurring and how the company will achieve operating leverage given the parallel growth in revenue and costs.

Answer

CFO Brian Brown explained the cost increase consists of recurring variable costs tied to higher production, an opportunistic marketing spend at Rocket Money, and a $50 million front-loaded investment for the brand restage. He noted that marketing spend is typically concentrated in the first half of the year to align with the home buying season.

Ryan Nash asked for Rocket's 2025 outlook regarding market size and market share goals, and how the relationship between revenue and costs might evolve. He also followed up on the MSR strategy, inquiring about the 2025 bulk purchase market and the company's appetite for more acquisitions.

Answer

CEO Varun Krishna expressed optimism for 2025, citing forecasts for a market over $2 trillion and improving housing fundamentals. CFO Brian Brown projected increased operating leverage in 2025, building on 2024's ~20% EBITDA margin in a tougher market. Regarding MSRs, Brown confirmed they remain a top capital allocation priority, highlighting the Annaly subservicing deal as a capital-light way to grow the portfolio. Krishna added that this platform extensibility is a core strategic advantage.

Ryan Nash asked about American Express's strategy regarding net cards acquired, specifically the reallocation of marketing investments from cashback products to fee-paying premium products like Platinum, and the expected impact of this remix on future results.

Answer

Steve Squeri, Chairman and CEO, explained the company's flexibility in marketing investments, driven by strong demand for premium products, emphasizing a focus on acquiring revenue over just card numbers. Christophe Le Caillec, CFO, added that marketing efficiency is improving, with the percentage of fee-paying U.S. consumer acquisitions increasing by eight percentage points year-over-year in Q4.

Ryan Nash of Goldman Sachs inquired about American Express's strategy to reallocate marketing investments from cashback products to fee-paying premium cards, asking if this remix would continue and its expected impact on future results.

Answer

CEO Steve Squeri explained the company's flexibility in marketing investments, driven by strong demand for premium products like Platinum. He emphasized focusing on revenue acquisition over card count and expressed satisfaction with the decision. CFO Christophe Le Caillec added that marketing efficiency is improving, with the percentage of fee-paying new U.S. consumer acquisitions increasing by eight percentage points year-over-year, despite quarterly variations due to marketing plans.

Ryan Nash asked about the broad financial impact of the Platinum Card refresh, specifically on card fees and VCEs (Variable Cardmember Expenses), and whether this investment would affect the company's ability to achieve mid-teens EPS growth during the refresh period.

Answer

CFO Christophe Le Caillec confirmed that the Platinum Card refresh would not impact the company's ability to generate mid-teens EPS growth. He explained that while benefits are immediate, card fee recognition is delayed and amortized over 12 months, leading to a temporary step-up in costs. Chairman and CEO Stephen Squeri reiterated that the company plans for the medium to long term with aspirations of 10%+ revenue growth and mid-teens EPS growth, acknowledging the two-year period for the refresh's full financial impact.

Ryan Nash of Goldman Sachs inquired about the increasingly competitive premium card market, with upcoming refreshes from rivals, asking about the risk of too many players chasing the same customer and the potential impact on long-term pricing power.

Answer

Chairman and CEO Stephen Squeri responded that the competitive environment has been intense for over a decade and that the increased focus on premium has been beneficial for customers and for American Express. He asserted that competition has shifted to value, access, and service, areas where Amex excels. Squeri concluded that pricing power is tied to the value delivered, and Amex will continue to lead through its superior product offerings and established assets.

Ryan Nash questioned American Express's 2025 revenue growth guidance of 8-10%, asking why it wasn't fully aligned with the 10%+ long-term aspiration and what headwinds could lead to results at the lower end of the range.

Answer

CEO Stephen Squeri clarified that the guidance is in line with their aspiration, with 10% at the high end. He explained that 2025 performance is primarily a "billing story." If the strong billings momentum from Q4 continues, revenue should reach the high end of the range. If billings growth is similar to the full-year 2024 average, results will be in the middle. He noted that NII growth moderated as customers finished rebuilding balances, making billings the key variable for 2025.

Ryan Nash from Goldman Sachs followed up by asking about the drivers of EPS growth into 2025 if billed business growth does not accelerate, and whether mid-teens EPS growth can be sustained in that scenario.

Answer

CEO Stephen Squeri affirmed that mid-teens EPS growth is sustainable even with 6% billings growth, pointing to the current year's performance and ongoing new card acquisitions. CFO Christophe Le Caillec added that this year's strong EPS growth was achieved despite an $800 million increase in marketing, highlighting the earnings power of the business model.

Ryan Nash from Goldman Sachs asked for a detailed breakdown of Synchrony Financial's credit guide, specifically inquiring about the implied loss increase despite strong delinquency performance, expectations for the net charge-off rate, and any benefits from elevated tax refunds. He also sought clarity on the net interest margin embedded in the guidance, including potential for continued improvement from PPPCs and lower rates, and any offsetting headwinds.

Answer

CFO Brian Wenzel explained that while delinquency formation is strong, the credit guide includes an upward bias from new portfolios like Walmart and credit aperture changes made in mid-to-late 2025. He noted that models forecast rising unemployment, which would produce higher net charge-offs, but did not provide a specific point within the guide. Regarding net interest margin, he indicated that net interest income should increase, with a greater bias for margin improvement, driven by building PPPC impacts and lower funding costs, though partially offset by lower benchmark rates and elevated payment rates.

Ryan Nash asked for an unpack of Synchrony's credit guide, specifically regarding implied loss increases despite strong delinquency performance, and any baked-in benefits from elevated tax refunds. He also inquired about the net interest margin embedded within Synchrony's guidance and whether continued improvement is expected from PPPCs and lower rates, or if other headwinds should be considered.

Answer

CFO Brian Wenzel explained that while delinquency formation entering 2026 is strong, the guide includes an upward bias from early losses associated with new portfolios like Walmart and credit aperture changes made in late 2025. He noted that the model assumes rising unemployment in the back half of the year, which would produce higher net charge-offs. Regarding NIM, CFO Brian Wenzel indicated that Net Interest Income (NII) and Net Interest Margin (NIM) should increase, benefiting from PPPCs and lower interest-bearing liabilities costs, but noted potential offsets from declining prime rates, investment portfolio yield, and MDR.

Ryan Nash inquired about Synchrony's consumer trends, asking Brian Doubles to expand on what the company is seeing regarding consumer strength and credit performance, and whether better-than-expected credit performance can continue in a stable macro environment. He followed up by asking about the path back to mid-single-digit growth, considering the 30% credit action rollback and the Walmart launch.

Answer

Brian Doubles (President and CEO) stated that the consumer remains resilient with no signs of weakness, noting improving spend and credit trends, positive purchase volume (up 2%), and plans to gradually open the credit box by about 30% of previous actions. He highlighted the Walmart launch, Amazon Pay Later, and PayPal physical card launch as key drivers for growth heading into 2026, alongside selective credit box opening in areas like health and wellness.

Ryan Nash asked about the encouraging signs in Synchrony's portfolio, the extent of credit loosening actions, and the potential path back to mid-to-high single-digit growth given new and renewed partnerships.

Answer

President and CEO Brian Doubles highlighted 5% growth in co-brand volume and strength in retail, cosmetics, and electronics as positive signs. He confirmed selective credit loosening began in Q2, focused on Health & Wellness, with more possible in H2. He expressed optimism for 2026 growth driven by the new Walmart program, Amazon Pay Later, and the PayPal physical card. Regarding pricing changes (PPPCs), Doubles noted they were minor, partner-by-partner adjustments totaling less than $50 million in net revenue impact, and are considered normal course business discussions.

Ryan Nash from Goldman Sachs Group, Inc. inquired about Synchrony's confidence in lowering its full-year net charge-off guidance and the underlying unemployment assumptions in its reserves. He also asked for clarity on the company's plans regarding its previously implemented pricing changes (PPPCs) now that the CFPB's late fee rule has been vacated.

Answer

CEO Brian Doubles expressed confidence in credit trends, citing the performance of their proprietary underwriting system and improving delinquency rates. CFO Brian Wenzel added that while the quantitative reserve came down, they increased the qualitative reserve, which assumes a 5.3% unemployment rate. Regarding the late fee rule, Doubles stated they don't plan to roll back changes immediately but will engage in partner-by-partner discussions, which could result in various forms of value-add, not just price rollbacks.

Ryan Nash inquired about the key drivers of Synchrony's 2025 net revenue guidance, seeking specifics on net interest income components, the impact of interest rates, and the run-rate benefit from recent pricing and policy changes (PPPCs). He also asked about the rationale behind the lower Q4 share buyback and the company's capital return strategy.

Answer

EVP and CFO Brian Wenzel detailed that the net revenue guide is influenced by a significant increase from PPPCs and revolve growth, offset by higher Retail Share Arrangement (RSA) costs and lower late fees. He noted that the lower Q4 buyback was a strategic decision based on anticipated market volatility, not a signal of holding capital for M&A or future growth, and affirmed the company's commitment to completing its current authorization and returning capital to shareholders.

Ryan Nash inquired about the drivers for the Q4 Net Interest Income (NII) guidance, including the impact of pricing changes (PPPCs) and liability sensitivity, and asked about the trajectory for credit losses into 2025.

Answer

EVP and CFO Brian Wenzel explained that sequentially flat Q4 NII is due to higher reversals and lower late fees offsetting interest income gains. He noted that while there are tailwinds for Net Interest Margin (NIM) into next year, the benefit will be lagged by CD resets. Regarding credit, Wenzel highlighted positive delinquency trends, strong vintage performance, and the impact of credit actions, stating the company is tracking toward its long-term loss target of 5.5% to 6%.

Ryan Nash inquired whether Capital One's accelerated investments have translated into results, highlighting specific areas, and asked about managing expenses and the efficiency ratio at current levels over the medium term amidst fears of rising expenses.

Answer

Chairman and CEO Richard Fairbank outlined significant investment areas including Discover integration, premium credit cards, national retail banking, AI, Capital One Shopping, Auto Navigator, travel, and Brex. He acknowledged these investments would put upward pressure on the efficiency ratio in the near term but reiterated that the expected earnings power post-Discover integration (inclusive of Brex) remains consistent with prior expectations, as investments are geared towards driving long-term growth.

Ryan Nash asked whether Capital One's accelerated investments in the business have started to reflect in results and if the company can manage expenses around current levels over the medium term, considering fears of rising expenses.

Answer

Chairman and CEO Richard Fairbank acknowledged a wealth of opportunities requiring significant investments (Discover, premium credit cards, national retail bank, AI, Capital One Shopping, Auto Navigator, travel, Brex). He noted these investments put upward pressure on the efficiency ratio in the near term, but the Brex investment partially replaces prior organic spending. Mr. Fairbank reiterated that the company still expects earnings power post-Discover integration to be consistent with original expectations, inclusive of Brex.

Ryan Nash with Goldman Sachs inquired whether Capital One's significant investments discussed in prior calls were already integrated into the run rate or were incremental. He also sought parameters for future results, such as pre-provision earnings (PP&R) growth or operating efficiency gains. Ryan followed up by asking about the sustainability and moving pieces of the Net Interest Margin (NIM) for the medium term.

Answer

Richard Fairbank, Capital One's Chairman and CEO, clarified that most investments, excluding new Discover-related ones, were already in the run rate, being years in the making, but the incremental investment imperative was growing due to accelerating opportunities. Andrew Young, Capital One's CFO, explained that the Q3 2025 NIM of 8.36% reflected structural impacts, including the full quarter addition of Discover, and that future movements would depend on relative asset class growth, customer behaviors, and Fed actions, with seasonal effects also playing a role.

Ryan Nash asked about Capital One's significant investments, clarifying if they are already in the run rate or incremental, and sought parameters for future results like pre-provision earnings growth or operating efficiency. He followed up on the Net Interest Margin (NIM) outlook, its sustainability, and key moving pieces.

Answer

Richard Fairbank, CEO and Chairman, clarified that while many investments are in the run rate due to years of strategic preparation, the incremental investment is increasing as opportunities accelerate. Andrew Young, CFO, explained the Q3 net interest margin (NIM) increase, attributing 45 basis points to the full quarter effect of Discover and the remaining to higher yields on legacy domestic card loans and day count. He noted that structural impacts from the Discover acquisition are now reflected in the Q3 run rate, with future movements dependent on asset class growth and customer behaviors.

Ryan Nash from Goldman Sachs Group, Inc. sought assurance that the 'significant sustained investment' mentioned by management would not create synergy reinvestment risk and would ultimately lead to a more efficient consolidated company.

Answer

Richard Fairbank, Founder, Chairman & CEO, detailed the long-term nature of investments in technology, the Discover network, the national bank, and the premium card segment. He stressed that these are consistent with Capital One's value-creation strategy and reiterated that the company's estimate for the combined entity's earnings power remains consistent with what was projected at the deal's announcement.

Ryan Nash inquired about the health of the U.S. consumer amid market concerns over tariffs, the drivers behind Capital One's credit performance, and the rationale for the reserve release, including the underlying economic assumptions.

Answer

Richard Fairbank, Chairman and CEO, stated that the U.S. consumer remains a source of strength, citing low unemployment, healthy job creation, and improving delinquency and payment rates in their portfolio, while acknowledging some stress at the margin. CFO Andrew Young explained the allowance release was driven by favorable credit results, which was tempered by a higher weighting of downside economic scenarios to account for heightened uncertainty.

Ryan Nash inquired about the current health of the consumer, the outlook for credit loss performance, and whether the company is on a downward trajectory for losses. He also asked if Capital One's long-term efficiency improvement journey would continue after the Discover acquisition, given the planned investments.

Answer

CEO Richard Fairbank stated that the U.S. consumer remains a source of strength, though pockets of pressure exist. He noted that card delinquencies have stabilized and shown year-over-year improvement, but the lingering effects of pandemic-era "delayed charge-offs" are still working through the system. Regarding efficiency, Mr. Fairbank affirmed that the company's technology-driven efficiency improvements are a core part of its long-term strategy and are expected to continue for the combined company, despite necessary investments in Discover's compliance, network acceptance, and brand.

Ryan Nash inquired about Capital One's strong credit performance across various consumer segments, questioning why it appears to be bucking industry trends and what this implies for future loss levels. He also asked for an outlook on the net interest margin (NIM) following a strong quarter and potential Federal Reserve easing.

Answer

Chairman and CEO Richard Fairbank attributed strong credit to proactive underwriting adjustments made in 2020-21, which offset pandemic-related credit score inflation seen elsewhere in the industry. He noted that while the overall consumer is healthy, Capital One's credit has stabilized above pre-pandemic levels due to lower (but rebuilding) recoveries and a 'delayed charge-off' effect from the pandemic. CFO Andrew Young explained the Q3 NIM increase was driven by higher card yields and loan mix. He projected near-term NIM would face headwinds from asset sensitivity but see tailwinds from card growth, with longer-term direction dependent on factors like deposit betas and credit performance.

Ryan Nash from Goldman Sachs inquired about the 'Reimagine the Bank' program, specifically how much of its benefits will impact the bottom line versus being reinvested, and if it boosts confidence in achieving higher ROTC targets. He also asked about the drivers behind the updated deposit beta assumptions and their impact on the Net Interest Margin (NIM) outlook.

Answer

Chairman and CEO Bruce Van Saun detailed the 'Reimagine the Bank' program's structure, emphasizing that run-rate benefits will be substantial, with the flow-through dependent on future investment needs, though historically, flow-through has been high. Regarding deposit betas, Mr. Van Saun explained that a less aggressive market pricing environment, robust non-interest-bearing deposit growth, asset sensitivity, and strategic hedging actions are key factors supporting the NIM outlook despite changes in beta assumptions.

Ryan Nash asked about the 'Reimagine the Bank' program, specifically how much of its benefits would flow to the bottom line versus being reinvested, its impact on ROTCE, and whether it serves as a hedge or confidence booster for future performance. He also inquired about the change in deposit betas and the factors supporting the net interest margin (NIM) outlook.

Answer

Bruce Van Saun, Chairman and CEO, explained that the program has 50 workstreams with quarter-by-quarter visibility. He noted that revenue benefits from improved customer experience would pick up over time. While the full run-rate benefit is expected, the exact flow-through is TBD, depending on future investment needs, but historically, flow-through from such programs has been high. Regarding deposit betas, Mr. Van Saun stated that the market is less aggressive in pricing actions, leading to a high 40s beta. He attributed confidence in the NIM walk to robust non-interest-bearing balance growth, slight asset sensitivity, a higher rate outlook, and attractive hedging actions.

Ryan Nash of Goldman Sachs inquired about the drivers of recent loan growth, particularly the contribution from the private bank, and the overall sentiment among borrowers for the remainder of the year. He also asked about the strategies being implemented to protect the net interest margin (NIM) amidst potential future rate cuts by the Federal Reserve.

Answer

Chairman & CEO Bruce Van Saun described the quarter as an "inflection point" with net loan growth across all business lines. Head of Consumer Banking Brendan Coughlin highlighted strong HELOC originations and the launch of a new credit card suite. Head of Commercial Banking Don McCree noted that headwinds from balance sheet optimization are fading, with growth led by the private client complex. In response to the NIM question, CFO John Woods affirmed the medium-term guidance of 3.25% to 3.50%, stating it holds even in a more dovish rate environment, and mentioned the bank is opportunistically adding forward-starting hedges to protect against downside risk.

Ryan Nash asked about the expected pacing of Ally Financial's share buybacks until the 9% fully phased-in CET1 target is achieved. He also inquired if the new core Return on Tangible Common Equity (ROTCE) methodology impacts the timing or level of the company's destination return target.

Answer

Michael G. Rhodes, CEO of Ally Financial, reiterated capital priorities: organic growth, dividend, and then share repurchases, emphasizing flexibility and the ability to build capital while repurchasing shares. He indicated that buyback levels are expected to accelerate once the 9% CET1 target is surpassed. Russell Hutchinson, CFO, clarified that the updated core ROTCE methodology is a simplification to increase transparency and comparability, but it does not alter the mid-teens return target, its timing, or conviction in achieving it.

Ryan Nash asked about the pacing of Ally Financial's share buybacks until the 9% fully phased-in CET1 target is reached, seeking context on the medium-term approach. He also inquired if the new core ROTCE methodology impacts the timing or level of the company's destination return target.

Answer

CFO Russell Hutchinson reiterated Ally Financial's capital priorities: organic growth in retail auto and corporate finance, maintaining the dividend, and then share repurchases for flexibility. He emphasized building capital to the 9% CET1 target while conducting buybacks ('story of and'), expecting buyback levels to accelerate once the 9% target is reached and earnings improve. Regarding the core ROTCE methodology, Mr. Hutchinson clarified that the updated approach does not alter the mid-teens return target, its timing, or conviction, serving instead as a simplification for transparency and comparability, aligning returns, book value, and EPS.

Ryan Nash asked what factors would be needed to lower the retail auto charge-off guidance and for an update on credit loss seasonality. He also inquired about the deposit strategy and the balance between growth and pricing.

Answer

CFO Russ Hutchinson explained that lowering the charge-off range would require continued improvement in delinquencies, flow-to-loss rates, and used car prices. He noted that seasonality is now more muted post-pandemic. On deposits, he stated the strategy is for flattish balances for the year, having achieved their 70% beta target, and that the deposit mix is favorably shifting to more engaged customers.

Ryan Nash inquired about the drivers of better-than-expected Q4 credit performance and the 2025 loss progression, questioning if the exit rate could fall below 2%. He also asked about capital deployment post-card sale, including a potential securities restructuring, and whether Ally still targets a 4% Net Interest Margin (NIM).

Answer

CFO Russ Hutchinson clarified that while Q4 credit trends were favorable, the seasonally adjusted loss rate was still north of 2%. He detailed the 2025 NCO guide of 2% to 2.25%, outlining scenarios for the high and low ends based on flow-to-loss rates and macro conditions. On capital, Hutchinson prioritized investing in core businesses, followed by potential securities restructuring and eventual share repurchases, emphasizing a fatter capital buffer. He stated that while a 4% NIM is still possible, it's no longer required to hit the mid-teens ROTCE target, with a high-3s NIM now being sufficient post-card sale.

Ryan Nash questioned the near-term retail auto credit outlook, noting the implied Q4 loss rate increase, and asked if management expects net charge-offs to decline in 2025. He also inquired about the timing of the net interest margin (NIM) inflection point and the subsequent pace of expansion.

Answer

CFO Russ Hutchinson acknowledged that the Q4 loss rate increase is driven by seasonality and storm impacts but expressed confidence in medium-term loss normalization due to underwriting changes and stabilizing used car prices. Regarding NIM, Hutchinson confirmed the medium-term 4% target remains intact, driven by liability repricing and asset mix shifts, but stated that near-term volatility from rapid Fed cuts makes it difficult to pinpoint the exact quarter for the inflection.

Ryan Nash inquired about Regions Financial's loan growth guidance, seeking a breakdown between C&I and consumer segments, and whether the outlook includes further runoff or movements into Capital Markets. He also asked about the trade-off between growth and returns, and if current hiring initiatives are expected to align growth with peers over time.

Answer

CEO John M. Turner, Jr. highlighted positive commercial customer sentiment, increased pipeline activity, and customers deploying excess liquidity. He noted 40% of new corporate clients came from priority markets and discussed plans to hire 120 bankers over two years, with 50 hired in 2025, focusing on specialized industry groups. He emphasized a commitment to capital allocation, risk-adjusted returns, and top-quartile ROTCE, aiming for consistent, sustainable long-term performance. Former CFO David J. Turner added that the focus is on earnings per share growth with the right return profile, not just balance sheet growth, expecting faster balance sheet growth than in 2025.

Ryan Nash inquired about Regions Financial's loan growth guidance for 2026, seeking details on anticipated contributions from C&I and consumer segments, and whether the outlook incorporates further portfolio runoff or capital market movements. He also asked about the strategic trade-off between growth and returns, particularly given the bank's increased hiring initiatives.

Answer

CEO John M. Turner, Jr. highlighted positive customer sentiment, increased pipeline activity, and the impact of banker hiring in priority markets, expecting commercial banking to be the primary growth driver. Former CFO David J. Turner emphasized the focus on earnings per share growth with the right return profile, noting the bank's discipline in balance sheet growth. He also confirmed that most portfolio shaping activities are complete, reducing future headwinds.

Ryan Nash asked about the sources of expense efficiencies funding new investments and the outlook for generating positive operating leverage. He also inquired about capital targets, including the CET1 ratio with AOCI, and plans for capital returns in 2025.

Answer

Executive David Turner explained that efficiencies are being driven by managing salaries, occupancy costs, and vendor spend. He affirmed a commitment to positive operating leverage. Regarding capital, Turner stated the priority is organic growth, followed by dividends, with a goal of managing the CET1 ratio inclusive of AOCI toward 9.25%-9.75%. He noted that share buybacks would be flexible depending on loan growth and would be lower in Q1 due to the final CECL amortization.

Ryan Nash inquired about the key drivers behind First Horizon's mid-single-digit loan growth expectations, specifically asking about the inflection points for commercial real estate (CRE) and the outlook for loans to mortgage companies. He also questioned deposit growth expectations and the sustainability of the 64% cumulative deposit beta.

Answer

Hope Dmuchowski, CFO, detailed expectations for mortgage warehouse growth, C&I momentum, and CRE stabilization with new production funding over time. For deposits, Ms. Dmuchowski highlighted initiatives like the new treasury management system and consumer franchise expansion, noting that the sustainability of the deposit beta would largely depend on macroeconomic factors like the Fed's balance sheet. Bryan Jordan, CEO, added that Treasury Management penetration and competitive market management would also drive deposit growth.

Ryan Nash of Goldman Sachs asked for a breakdown of the mid-single-digit loan growth expectations, focusing on key drivers across products, the anticipated inflection point for commercial real estate, and the outlook for loans to mortgage companies and broader C&I areas. He also questioned deposit growth expectations, key drivers, and the sustainability of the 64% deposit beta.

Answer

Hope Dmuchowski, Chief Financial Officer, explained that mortgage warehouse is expected to pick up, noting Q4 2025 was the highest in five quarters due to refinance activity. C&I has strong momentum from new originations, and CRE is stabilizing with increased commitments. For deposits, Ms. Dmuchowski highlighted initiatives like a new treasury management system, additional products, new consumer head, and branch openings. She noted that deposit costs are more influenced by the Fed's balance sheet than current competition. Bryan Jordan, CEO, added that Treasury Management penetration and retail consumer banking expansion are key opportunities.

Ryan Nash from Goldman Sachs inquired about client sentiment and the drivers behind KeyCorp's strong loan growth and investment banking fees, asking how this performance translated into an improved financial outlook. He also asked about the pacing of technology and hiring investments and the path to sustained positive operating leverage.

Answer

Chairman & CEO Christopher M. Gorman described client sentiment as "cautiously optimistic," highlighting consumer financial health and the agility of commercial clients. CFO Clark H. I. Khayat explained that the upgraded NII guidance was driven by strong C&I loan growth and proactive deposit management. Gorman added that KeyCorp will continue investing in frontline talent and technology, viewing positive operating leverage as a key focus.

Ryan Nash asked for expectations on loan growth, particularly whether corporate clients are confident enough to borrow more, and if the bank should accelerate its organic growth initiatives in the Southeast.

Answer

CEO Tim Spence expressed confidence in consumer loan growth from diverse platforms and noted that while commercial M&A-driven demand is muted, inventory builds and equipment purchases are supporting borrowing. He confirmed they have already significantly accelerated Southeast branch openings to 50-60 per year and are investing heavily in marketing to support this rapid pace, limited only by finding quality locations and zoning approvals.

Ryan Nash asked when management expects net interest income and margin to bottom out, what actions were taken to reduce asset sensitivity, the drivers of higher repayments in Global Fund Banking, and the outlook for SVB deposit flows.

Answer

CFO Craig Nix projected that both NII and NIM (ex-accretion) would likely trough in the second half of 2025. Executive Tom Eklund explained they moderated actions to reduce asset sensitivity to prepare for repaying a purchase money note. Executive Marc Cadieux clarified that higher GFB repayments are due to the short-term nature of the loans in a higher rate environment, not increased competition, and expressed optimism for when investment activity resumes.