Scott Siefers

Scott Siefers inquired about the strong C&I growth expectations and the status of targeted reductions in portfolios like residential real estate, asking where these headwinds stand.

Answer

Andy Harmening, President and CEO, indicated that residential real estate runoff is expected to continue at a similar pace, which is viewed positively as it allows for margin expansion. He highlighted strong deposit production expected in 2026 due to household growth, new verticals, and RM contributions. Scott Siefers also asked about the capital markets line, questioning if its recent elevated performance represented a new sustainable level or if the guidance was conservative. Andy Harmening confirmed it is repeatable, and Derek Meyer, CFO, added that while they are thrilled with its strength and repeatability, they seek a more durable pattern before providing aggressive guidance.

Scott Siefers sought clarification on whether all 2026 guidance figures are based on GAAP reported numbers for 2025, without any adjustments.

Answer

CFO Derek Meyer confirmed that the 2026 guidance is based on clean, GAAP-reported numbers for 2025, indicating no adjustments were made.

Scott Siefers asked for insights into the headwinds affecting total loan growth, specifically residential real estate (RESI) rundown and commercial real estate (CRE) payoffs, and whether these trends are expected to accelerate or decelerate. He also questioned the bank's strategy for new market entry, focusing on organic growth versus potential M&A.

Answer

President and CEO Andy Harmening explained that RESI runoff is a purposeful and planned benefit, while CRE payoffs could see a short-term acceleration if rates drop significantly, though new production in areas like construction lending is expected to offset this in 2026. He reiterated that the bank's bias for new market entry remains strongly organic, emphasizing execution and opportunistic evaluation of M&A in line with past strategies.

Scott Siefers inquired about the strategy for entering new markets like Oklahoma, Kansas City, and Denver, specifically whether the bias remains strongly organic or if M&A could become a possibility.

Answer

President and CEO Andy Harmening reiterated that the bias remains strongly organic, focusing on execution and proving out the current strategy. He stated that the company will continue to evaluate opportunities, whether organic or inorganic, in a manner consistent with their approach over the last five years, emphasizing that any move must fit their expertise.

Scott Siefers from Piper Sandler asked for an update on customer sentiment and activity in light of recent tariff discussions and inquired about the bank's long-term strategic goals for its newer Midwestern markets like Kansas City.

Answer

Executive Andrew Harmening noted that while customers are cautious, they have been proactively planning for potential tariff impacts and have explored alternative supply chains. He explained the bank's strategy is to leverage its success in Milwaukee as a template for growth in other major metros like Minneapolis, Chicago, and Kansas City, applying a proven model of product, marketing, and digital strategies to markets with potentially faster growth.

An analyst from Piper Sandler asked for the outlook on the composition of loan growth for the fourth quarter and inquired about customer appetite for borrowing.

Answer

CEO Andrew Harmening stated that confidence is high due to the ramp-up of the new commercial team and continued growth in high-quality auto loans. He suggested that a potential slowdown in CRE construction payoffs, if rates remain elevated, combined with fewer planned credit exits, would support loan growth. This combination underpins the forecast for total loan growth to land at the lower end of the previously stated 4% to 6% range.

Scott Siefers asked about Old National Bancorp's margin projection for the year, specifically the larger step-up in Net Interest Income (NII) expected in the second half compared to the first two quarters, and the pace of share repurchases for 2026.

Answer

John Moran, CFO, explained that the NII trajectory is primarily influenced by day count differences in the first two quarters, along with loan growth, yield curve steepness, fixed asset repricing, and effective deposit beta management. Regarding share repurchases, Mr. Moran indicated a more active year in 2026 than 2025, balancing capital for organic growth with shareholder returns.

Scott Siefers asked about the projected net interest margin trajectory for the year, specifically the larger step-up in Net Interest Income (NII) in the second half, and the planned pace of share repurchases for 2026 compared to the 1.1 million shares bought in late Q4 2025.

Answer

John Moran, CFO of Old National Bancorp, explained that the NII step-up is primarily due to day count differences in the quarters. He highlighted growth, yield curve steepness, fixed asset repricing, and deposit beta management as key margin drivers. Regarding share repurchases, Mr. Moran indicated a more active year in 2026 than 2025, balancing capital support for growth with shareholder returns.

Scott Siefers asked about the slight reduction in the fourth-quarter Net Interest Income (NII) expectation despite a strong third quarter, and inquired about the company's preferred uses for capital, specifically regarding the pace of share repurchases given strong capital levels and the decision to put M&A off the table.

Answer

CFO John Moran clarified that the NII reduction was minor, attributing it to a slightly lower five-year Treasury launch point. CEO Jim Ryan stated that M&A is off the table, emphasizing that the best acquisition is investing in themselves through opportunistic buybacks, balancing capital build post-Bremer partnership with returning capital to shareholders. Organic growth remains the first priority for capital use.

Scott Siefers inquired about the drivers behind the slight reduction in Old National Bancorp's fourth-quarter Net Interest Income (NII) expectations despite strong third-quarter performance. He also asked about the company's preferred uses for capital, particularly regarding the recent share repurchases, and whether the pace of buybacks might increase given improving capital levels and the decision to put M&A off the table.

Answer

CFO John Moran clarified that the $5 million reduction in NII guidance for Q4 was a minor adjustment on a large earning asset base, primarily due to a slightly lower five-year Treasury launch point. CEO Jim Ryan emphasized that M&A is currently off the table, with the best acquisition being the company's own shares. He stated that Old National Bancorp would be opportunistic with buybacks, balancing capital build post-Bremer partnership with returning capital to shareholders, and expects to have a clearer perspective on full-year capital returns after Q4. Organic growth remains the first priority for capital use.

Scott Siefers from Piper Sandler inquired about the current sentiment among Old National's customers compared to January and what might catalyze a rebound in activity. He also asked for clarity on the underlying NII cadence for the year, excluding the impact of the Bremer acquisition.

Answer

Executive Mark Sander described customer sentiment as a 'pause' amid uncertainty, rather than a change in plans, noting that business pipelines remain strong. He highlighted that the CRE market is still active and increasingly competitive. Executive John Moran addressed the NII cadence, stating that on a core basis, the bank expects improved core margin and NII dollar growth in Q2, with the trend continuing through the year, augmented by the Bremer deal closing in May.

Scott Siefers of Piper Sandler asked for more detail on the stand-alone net interest margin (NIM) outlook for Old National Bank, seeking to understand the key positive drivers and potential risks for the coming year.

Answer

Executive John Moran confirmed the 'stable to improving' outlook for the core, stand-alone NIM. He identified the primary drivers as continued loan growth and favorable fixed-asset repricing dynamics. Moran also noted that any steepening of the yield curve would provide an additional tailwind to the margin.

In a follow-up, Scott Siefers of Piper Sandler asked for updated thoughts on how M&A fits into the picture given the rapid capital build, and whether the focus would remain on organic growth.

Answer

CEO James Ryan reiterated that any potential M&A opportunity faces a 'high hurdle.' He emphasized that the bank has ample organic growth opportunities to execute on. While they would opportunistically look at deals that meet their high standards for long-term shareholder value creation, the primary focus remains on executing their current organic strategy.

Scott Siefers asked for clarification on Regions Financial's fourth-quarter capital markets performance, specifically regarding postponed M&A transactions and lower syndication/securities underwriting activity, and the outlook for a rebound after Q1. He also questioned the deposit-beta performance, competitive pricing trends, and expectations for deposit costs with future rate cuts.

Answer

Former CFO David J. Turner explained that capital markets activity, while weaker in Q4 due to seasonality and postponed M&A, is expected to rebound in 2026, with a strong pipeline. CEO John M. Turner, Jr. added that new banker hires in real estate corporate banking should boost revenue. David J. Turner also noted strong deposit-beta performance, driven by CD maturities, and the bank's strategy to remain competitive while reacting to market rate movements.

Scott Siefers asked for details on the fourth-quarter Capital Markets performance and its outlook, specifically regarding postponed M&A transactions and lower syndication/securities underwriting, and why a rebound is expected after the first quarter. He also inquired about deposit beta performance, competitive pricing trends, and the potential impact of future rate cuts.

Answer

Former CFO David J. Turner explained that loan syndications experienced Q4 seasonality but are expected to pick up in 2026 after a slow Q1. He noted M&A activity is episodic, with a strong pipeline expected to close in the first half of the year, and that Capital Markets had its second-best year despite a weaker Q4. CEO John M. Turner, Jr. added that new banker hires in Real Estate Corporate Banking and Capital Markets, along with an improving interest rate environment, will be catalysts. David J. Turner attributed the strong deposit beta performance to significant CD maturities in Q4 and anticipated further maturities in Q1/Q2 2026, guiding towards a mid-30% beta while remaining competitive.

Scott Siefers inquired about the expected evolution of deposit pricing, particularly in a sustained higher-rate environment. He also asked about the primary sensitivities for net interest income (NII) momentum, such as rates, yield curve shape, and deposit pricing.

Answer

Executive David Turner emphasized a strategy of being competitive on deposit pricing to foster growth, especially in noninterest-bearing accounts. He noted a base case down-beta of 35% and benefits from maturing high-cost CDs. Turner identified managing deposit costs as the primary driver for NII, adding that a steeper yield curve would also be beneficial.

Scott Siefers from Piper Sandler asked for clarification on PNC's Net Interest Income (NII) momentum for 2026, distinguishing between standalone PNC and the combined entity with First Bank, and sought insights into the expected trajectory of deposit costs given anticipated Fed rate cuts.

Answer

Rob Reilly, Executive Vice President and CFO, stated that the full-year NII guidance of up 14% includes First Bank, with PNC standalone NII growth expected to be between 7.5%-8%, exceeding previous estimates. He clarified that the prior quarter's deposit noise was due to a commercial deposit mix shift. For 2026, he anticipates deposit costs will continue to decrease, influenced by the December rate cut playing through and two projected Fed rate cuts in July and September. Bill Demchak, Chairman and CEO, emphasized that the timing of Fed rate cuts would not materially impact NII outcomes.

Scott Siefers asked for clarity on PNC's Net Interest Income (NII) momentum for 2026, distinguishing between standalone PNC and the combined entity with FirstBank, and sought insights into the outlook for deposit costs given anticipated Fed rate cuts.

Answer

Rob Reilly, EVP and CFO, clarified that the 14% NII growth guidance for the combined company includes 7.5%-8% growth from PNC standalone, exceeding previous estimates. He expects deposit costs to continue decreasing in 2026, even before anticipated Fed rate cuts in July and September. Bill Demchak, Chairman and CEO, emphasized that the timing of rate cuts would not materially impact the NII outcome.

Scott Siefers asked about PNC's margin performance and outlook, specifically how third-quarter commercial deposit growth impacted the Net Interest Margin (NIM) and why this isn't indicative of the expected future NIM expansion to over 3% by 2026. He also inquired about the reasons for the anticipated increase in fourth-quarter expenses.

Answer

Rob Reilly, Executive Vice President and CFO, explained that the outsized $9 billion commercial interest-bearing deposit growth, while NII accretive, caused a 4-5 basis point drag on NIM due to a mix change, as these deposits are priced higher. He reaffirmed the expectation for NIM to expand and exceed 3% in 2026. Regarding expenses, Rob Reilly noted that the full-year expense growth expectation increased from 1% to 1.5% due to better-than-expected fee income performance, which drove higher variable compensation.

Scott Siefers requested an updated outlook on the net interest margin (NIM) path for the remainder of the year and asked for the reason behind the higher net charge-off guidance for the second quarter.

Answer

CFO Rob Reilly confirmed that after a strong start, a NIM in the 2.90% range for Q4 2025 is a reasonable expectation. He explained the higher Q2 charge-off guidance is due to the 'lumpiness' and timing of resolutions in the commercial real estate (CRE) office portfolio, which were lower in Q1. CEO Bill Demchak added that these expected charge-offs are already reserved for.

Scott Siefers of Piper Sandler asked for management's updated perspective on loan demand development for the year and whether PNC could achieve its previously discussed 3% normalized net interest margin (NIM) in 2025.

Answer

CEO Bill Demchak stated that while client growth is strong, loan utilization remains low, and the bank is conservatively forecasting loan growth until there is more economic clarity. CFO Rob Reilly confirmed that while PNC does not provide specific NIM guidance, it is logical to assume the bank could approach a 3% NIM by the end of 2025.

Scott Siefers from Piper Sandler sought qualitative insights on what a potential lending recovery might look like. He also asked how deposit costs would behave if loan growth returns, given PNC's strong liquidity position.

Answer

CEO Bill Demchak stated that forecasting the timing and nature of a loan growth rebound is difficult, but PNC is positioned to deliver shareholder growth without relying on it. He emphasized that PNC is 'very liquid,' with significant cash balances at the Fed, and a rebound in loan demand would not necessarily impact the bank's funding costs.

Scott Siefers asked about the non-commercial real estate (CRE) loan growth drivers, specifically where M&T Bank sees the best demand and willingness to lend in these categories, and for an update on the bank's M&A aspirations and the current landscape.

Answer

Daryl Bible, Senior Executive Vice President and CFO, M&T Bank Corporation, noted that growth has been in C&I, particularly specialty businesses like fund banking, mortgage warehouse, and corporate institutional. He emphasized the 'Teaming for Growth' priority, combining regional presidents' local knowledge with the bank's scale. Regarding M&A, Bible stated that it will happen opportunistically when the right fit for scale and density in existing markets (12 states + DC) arises, but the bank is not forcing anything and will prioritize deploying capital to customers, dividends, and stock buybacks.

Scott Siefers inquired about the non-Commercial Real Estate (CRE) drivers for M&T Bank's loan growth, seeking insights into areas of best demand and willingness to lend. He also asked for updated thoughts on the company's M&A aspirations and the current landscape for potential acquisitions.

Answer

Daryl Bible (VP, Senior Executive and CFO, M&T Bank Corporation) explained that growth has been strong in C&I, particularly in specialty businesses like Fund Banking, Mortgage Warehouse, and Corporate & Institutional. He emphasized the 'Teaming for Growth' priority, combining regional knowledge with company scale. On M&A, Mr. Bible stated that M&T seeks scale and density in its existing markets but is not aware of current sellers and will not force acquisitions, prioritizing capital deployment to customers, dividends, and share buybacks.

Scott Siefers inquired about the outlook for interest-bearing deposit pricing given recent Fed rate cuts, the confidence in deposit growth momentum for 2026, and any updated views on M&A opportunities in the large regional bank space.

Answer

CFO Mike Maguire expressed confidence in deposit pricing momentum, expecting the interest-bearing deposit beta to reach the mid-40% area in Q4 2025, continuing into 2026. CEO Bill Rogers highlighted strong leading indicators for deposit growth, including net new checking accounts, premier production, and treasury management pipelines. Bill Rogers reiterated a focus on organic growth for Truist.

An analyst, identified as Scott, inquired about the drivers of Net Interest Income (NII) momentum after Q1 2025 and the sensitivity of the outlook to different Federal Reserve rate cut scenarios. He also asked for an update on loan demand and overall client sentiment.

Answer

CFO Mike Maguire stated that NII is expected to trend positively after a Q1 dip, driven by modest loan growth and stabilizing deposit betas. He noted that the NII outlook is relatively neutral to the number of rate cuts. CEO Bill Rogers added that loan growth momentum is coming from focused initiatives in consumer and C&I, with clients showing more expansionary sentiment, particularly around potential M&A activity.

Scott Siefers asked for an analysis of the fourth-quarter net interest margin (NIM) guidance, the timeline for deposit betas to catch up with asset repricing, and the potential for further balance sheet repositioning given Truist's capital flexibility.

Answer

CFO Mike Maguire explained that while Q4 NIM will see some compression due to a temporary lag in deposit betas, he expects the betas to catch up in Q1 2025, leading to margin stabilization and subsequent improvement. Maguire noted that another large-scale balance sheet repositioning is a lower priority compared to deploying capital for organic growth and share repurchases.

Scott Siefers (Piper Sandler) inquired about U.S. Bancorp's loan growth momentum, asking if the bank is at a point where more visible growth can be expected after the actions taken earlier in the year. He also sought insights into overall loan demand.

Answer

John Stern, Vice Chair and CFO, acknowledged the attractive opportunity taken in Q2, which benefited Q3. He stated that while the bank is always looking for opportunities, there's nothing particular on the horizon for similar actions. The focus remains on organic growth, including growing accounts and leaning into client relationships.

Scott Siefers of Piper Sandler inquired about the expected balance between net interest income and fee income within the full-year revenue growth target, seeking updates on key fee drivers, particularly payments. He also asked about recent consumer spending patterns and any observed changes amid increased economic uncertainty.

Answer

CFO John Stern confirmed the 3-5% revenue growth guidance and mid-single-digit fee growth expectation, driven by payments, capital markets, and trust services. CEO Gunjan Kedia addressed consumer spending, noting a weather-related pullback early in the year that has since stabilized. She added that spending patterns remain steady, likely due to the bank's affluent customer mix and focus on non-discretionary categories.

Scott Siefers inquired about the primary drivers of the forecasted 3% to 5% revenue growth for fiscal year 2025, seeking a breakdown between net interest income (NII) and fee income. He also requested clarification on the Q1 NII guidance, confirming if it would be down on a reported basis due to fewer days.

Answer

CFO John Stern confirmed that Q1 NII would be approximately $40 million lower on a reported basis due to two fewer days. For the full year, Stern detailed that revenue growth will be driven by both fees and NII. Fee income is expected to grow in the mid-single digits, propelled by momentum in trust, payments, and capital markets. NII growth is anticipated from an improved asset mix, stabilization in deposit trends, and significant fixed asset repricing, with billions in assets rolling off quarterly and being replaced at spreads of 150-200 basis points.

Scott Siefers asked about Citizens Financial Group's expected net interest margin (NIM) trajectory, both near-term and towards the medium-term target of $325-$350, and the role of M&A in the company's strategy given recent shifts in the large regional banking space.

Answer

Interim CFO Chris Emerson outlined the Q4 2025 NIM forecast of $305, driven by time-based benefits and fixed-rate asset repricing, and the path to the medium-term target. CEO Bruce Van Saun noted that a lower 10-year yield and tighter commercial loan pricing have kept NIM at the lower end of the previously discussed range. Regarding M&A, Bruce Van Saun emphasized Citizens' focus on organic growth, highlighting the successful private bank startup as an internal 'acquisition' and stating that external M&A would require a very high bar.

Scott Siefers inquired about Wells Fargo's assessment of overall consumer health, particularly regarding emerging concerns in auto lending, and the bank's credit box as a 'fulsome lender.' He also asked about expectations for deposit costs given the Federal Reserve's easing cycle.

Answer

CEO Charlie Scharf reported consistent consumer spend, stable payment rates, strong deposits, and strong credit results, with no significant changes across affluence levels or subprime exposure. He noted that auto business volumes at lower credit levels are small and performing as expected. CFO Mike Santomassimo expects commercial deposit betas to remain high, while consumer betas will be lower with no meaningful competition pushing pricing up, anticipating a gradual decline.

Scott Siefers of Piper Sandler asked about Wells Fargo's perspective on the overall health of the consumer, particularly in light of emerging concerns in auto credit, and how the bank's credit box is performing as it becomes a more fulsome lender. He also inquired about expectations for deposit costs given the Fed's easing cycle.

Answer

CEO Charlie Scharf stated that consumer performance remains consistent with stable spend, strong payment rates, and robust deposits, with no significant changes across affluence levels or subprime exposure. He noted that auto credit volumes at lower credit levels are small and performing as expected. CFO Mike Santomassimo indicated that commercial deposit betas are expected to remain high, while consumer deposit betas will be lower, with no meaningful competition pushing pricing up.

Scott Siefers asked for Wells Fargo's assessment of overall consumer health, addressing emerging concerns in auto credit, and how the company's credit box is positioned as a 'fulsome lender.' He also inquired about expectations for deposit costs given the Federal Reserve's easing cycle.

Answer

CEO Charlie Scharf reported consistent consumer spend, stable payment rates, and strong deposits, indicating a robust consumer base without significant slowing. He noted Wells Fargo's portfolio has minimal subprime exposure. In auto, volumes at lower credit tiers are small and performing as expected. CFO Mike Santomassimo stated that commercial deposit betas are expected to remain high, while consumer betas will be lower. He anticipates deposit costs to 'grind down a little bit' as there is no meaningful competition pushing pricing up.

Asked where the bank has flexibility to cut costs without harming strategic investments and inquired about what level of certainty is needed for commercial clients to re-engage in discretionary capital markets activities like M&A.

Answer

Cost flexibility comes from lower variable compensation tied to reduced fee revenue, as well as discipline in marginal and vendor spending. Strategic investments in branches and salesforce will continue. For capital markets, clients need more certainty on the 'rules of the road' before committing to major M&A. While hedging conversations have picked up due to volatility, the overall outlook for a second-half recovery in capital markets is not strong enough to warrant raising the full-year fee guide.

Scott Siefers from Piper Sandler questioned if the high auto loan production was a strategic flex due to softer growth elsewhere and asked about the portfolio's credit quality. He also sought confirmation on the expense growth outlook for 2025.

Answer

CEO Stephen Steinour stated that the strong auto performance is a result of a market opportunity, not a buffer for other areas, and emphasized the 'super prime' quality of the book. CFO Zachary Wasserman confirmed the expense plan is on track, with the year-over-year growth rate decelerating to low single digits by Q4 2024, setting up for a lower expense growth rate in 2025 compared to 2024.

Scott Siefers inquired about deposit pricing dynamics, asking whether Huntington is leading the market with higher rates to fund loan growth or if its pricing reflects general market competition.

Answer

CFO Zachary Wasserman stated that the competitive environment is consistent with the prior quarter and that Huntington's strategy is to be competitive but not to lead the market on pricing. He clarified that the updated outlook reflects the market's expectation that Fed rate cuts are delayed, extending the period of higher funding costs. He emphasized that fundamental deposit growth is driven by new customer acquisition.