Steven Alexopoulos • TD Securities

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Senior EVP & CFO David Turner and President, CEO, & Chairman John Turner both emphasized that the bank's business model is built on primary checking and operating accounts, which supports a stable non-interest-bearing deposit mix in the low 30% range. For future NIM expansion, David Turner cited a more normalized yield curve, continued growth in core customer accounts, and disciplined deposit cost management as key drivers. They also stressed a focus on risk-adjusted returns over chasing loan growth.

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CFO Mike Maguire stated that the company could likely still achieve its full-year guidance even with no rate cuts, noting that the outcome would depend more on the shape of the yield curve. He explained that since the assumed cuts are late in the year, the 2025 outlook is not highly sensitive to them, though it is a more significant factor for the following year.

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President Brendan Coughlin expressed confidence in the private bank target, noting that average deposit growth was healthy and that balances were already over $9.5 billion by mid-July. He cited the scaling platform and new teams as drivers. On the initiative's funding, Coughlin explained that it will include traditional efficiency efforts, like vendor simplification and real estate optimization, to help self-fund the more advanced technology investments. Chairman & CEO Bruce Van Saun added that CFG can leverage more "ready-made turnkey solutions" for AI, unlike larger banks that are doing more expensive pioneer work.

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CEO Tim Spence described this scenario as a net positive business opportunity for Fifth Third. He explained that to operate, stablecoins require fiat on-ramps, off-ramps, and reserve management, all services the bank can provide. He emphasized that the primary use case for clients like Stripe is solving inefficiencies in cross-border payments, which is an area of opportunity for Fifth Third, rather than a threat to its domestic payments business.

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President & CEO Gunjan Kedia stated that while 200 bps of positive operating leverage is healthy, the larger opportunity lies in revenue growth, expressing confidence that consistent execution will be rewarded by the market. Vice Chair & CFO John Stern explained that funding will be supported by growing consumer deposits through products like BankSmartly, which attracts new, multi-service clients and improves the overall deposit mix and pricing flexibility over time.

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CEO Brian Moynihan emphasized the bank's long track record of successfully applying technology at scale to drive efficiency, noting AI is the next phase of this. On stablecoins, he explained the cautious approach is due to the need for legal clarity and a yet-to-be-proven business case and client demand, while confirming the bank has the capabilities ready to deploy when appropriate.

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CEO Jane Fraser positioned stablecoins as an opportunity, stating that Citi's Token Services offering is superior for corporate clients as it enables instantaneous, 24/7 cross-border movement between fiat and digital assets without the high transaction costs of traditional stablecoin models. She argued that Citi, as the global leader in payments, already has the 'killer app' and can provide a multi-asset, multi-bank solution for clients without needing to partner with other banks in the way Zelle was formed.

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CEO Jane Fraser asserted that Citi's offerings, like Citi Token Services, are superior for corporate clients by enabling seamless, low-cost, 24/7 fiat-to-digital currency movement while handling all compliance complexities. She stated that as the global leader, Citi does not need to partner with other banks to deliver this value proposition and that they have the 'killer app' for their clients, welcoming a level regulatory playing field to compete.

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CFO Craig Nix clarified that the current plan puts First Citizens on a path toward its CET1 target, but another repurchase plan may be initiated in the latter half of 2025 if capital accretion continues to outpace organic growth. Nix confirmed the plan is to methodically front-load the buybacks, with a heavier emphasis in late 2024. He also provided detailed NII projections, stating that with two rate cuts this year and four next year, NII ex-accretion would likely be down low-to-mid single digits from the Q4 2024 exit rate to the Q4 2025 exit rate.

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