you and Greg. joining us. thank morning for Thanks, Good
of Let’s move presentation. the X to Page earnings the
in sheet of shares. transaction of of XX. $XX.XX Third agreement, we earnings we acquisition the Fifth the XX. the and the closing X.XX common additional the for common a $X.XX billion Under acquisition received $XXX the million As materials XXX.X cash and was including date. balance on billion MB share acquisition Fifth a consideration $X.XX have on terms Financial March merger, common Upon at MB cash including per $X.X shares information summary MB about for of the of price stock. In of each our share completion included merger Greg mentioned, MB shares issued on March of stock Third closed stockholders Total million
The first comparisons impact balance activities days from but end negligible closing for has our for business quarter. MB’s business quarter the to to quarter the overall sheet impacted six of our metrics profitability a had impact
nature see quarter of number closing to and the many disclosures, a in our can MB this the you timing other parts has of one-time due As moving the items. of
guidance We our them with impact items. our quarter all our sheet to underlying previous the January Fifth in adjusted so this and standalone our compare respect best balance the to exceeded business also statement has and income effort to clarify can given trends have you Third’s performance guidance. see
provide policy two as continue in conformity our we guidance discussing our earnings changes our of MB have uplift we indicated would expect to forward trends. like before Also to those meaningful highlight have we and incorporates quarter. I performance impact accounting Financial the our that the materials Going in to results, for financial a financial
reported previously of measure provision was a provide believe the the including for better will a lending-related peers. statement expense. components reclassified We into non-interest of relative commitments, change our income we unfunded majority vast a to single First, this our on comparison provision which the
Our by current affected this was quarter ratio efficiency change. not
will that lease shown related has change gross with net accounting income MB MB’s no Second, Fifth be to in the operating leasing net This basis policy expense on consistent impact compared the to business Third’s utilized. a basis income. on
to on X. Now financial turning of the quarter Slide highlights the
Our first quarter results very were strong.
on January we the quarter. from benefits for and presentation, impacted after-tax for remaining and swap. we return notable our from I $XXX immaterial Reported partially of As GreenSky after-tax X exceeded a Worldpay including benefit loan after-tax equity a impact a the on end by any of the result after-tax should acquisition negative Visa quarter. items by from in of in final total on million guidance excluding offset merger-related positively $XX gain sold the mark Page $XX adjusted to to our $X an MB were Subsequent related at NII, sale stake the million GreenSky mentioned, negative million million the growth, fees our end, Financial the expenses gain items basis our a which results shares quarter the stake an and
We all equity exited have companies. traded in our publicly now stakes
more ratio Excluding these X.X%. items, pre-provision declined while efficiency the XX% than net year-over-year revenue increased
ratio leverage continued to year-over-year return Strong operating growth were on disciplined metrics our expense the during resulted efficiency management a our of positive in and improve adjusted have and quarter. first basis. strong All revenue
Our performance solid. credit remains
XX-year Our forward-looking remain quarter. charge-offs credit net during lows metrics at continue as to nearly decline the
sequential portfolio. Average was X% X. by impacted late MB Slide of quarter addition the to partially growth the of Moving loan
loans growth sequentially MB, C&I by Excluding the and X.X% grew of average year-over-year approximately X% led of X.X%. total impact
as provide growth. investments lending mentioned functions and market quarters have exceeding sequentially X% a Total we business, mid to and on last quarter. our allocated MB. a middle line first quarter we XX% capital XX% sales the performance peers. up commercial to managers. in picture payoffs was sales and our estate MB. in strength commercial approximately potential. remains last our total longer-term in from with average CRE or and the that over redesign In were low We MB our to loan previous the back our as standalone up total of with well few currently to by of in a X% second were commercial compared Originations beginning recently, X% on year X% also in time average based basis prior throughout quartile to the expect As our helped from growth of grow flat loan growth is up force guidance bottom percentage was loan sequential X% excluding a to banking. increase the commercial growth. continue corporate utilization has the flat net relative benefit commercial supported office excluding and as balances the relationship basis very Total were risk our existing of to loans balances for real sequentially paydowns relatively Average and Lower commercial quarter clearer
Given the which give commercial by be non-relationship go-forward expect second representation may approximately first offset best our in period we by driven quarter construction loan average strength the balances, and to X% continued on MB’s quarter ticket C&I portfolios. end large in growth declines impact in commercial lease partially of expectations of
commercial we MB for outlook standalone were up to and MB, XX% loan full our preserves about expect to guidance commercial year, Third the for approximately year increase guidance that XXXX, full This growth X.X% total sequentially. consumer outperformance the For the exceeds our average impacted year. loans by Average first Fifth implies full quarter again the previous acquisition. compared loans, excluding the
impact should the were increase expect quarters, approximately in mortgage. The As In Similar we performing portfolio Growth loan first the materials, the portfolio, category. not end MB the consumer portfolio the offset loans Including loan the X% of we have elected increase consumer I home highlighted with equity and our rate in card in loans to quarter rate to by we auto, unsecured our prior earnings residential current the MB, declines partially sequentially. auto of indirect X% same fixed quarter. have environment. in combined retain personal the and balances quarter mortgage the average consumer second average loans sequentially acquired from X% portfolio given total impact of we period first quarter. to in second discussed loan dynamics increased that with the to for quarter X.X% this
to a were we X% expect on XX% For XXXX total and full Average stronger expect consumer a approximately currently year, increase year basis. on We Similar to to X% a average to XX% compared loans deposits core standalone the total compared loans XXXX. up X% year-over-year to to basis prior commercial implies loans, this full X% average compared to quarter. increase XXXX. outlook up to the
deposits Performance core and to year-ago in sequentially quarter into continued X% quarter. a flat demand were migration seasonally average of compared deposits impact from accounts. interest-bearing MB, the soft increased the reflect Excluding to
Slide the prior including the to million Compared which six-day $XX MB impact million. increased NII on Moving from X. quarter, to was $X
Our largely exceeded reflecting loan stronger our standalone results guidance January the growth.
the quarter. of basis interest the X% to X.XX% discussed XX for of $XX during Purchasing long-term rose the our from NII for from increase resulting current in million accretion year-ago Cost below in or quarter, Adjusting with XX%. increased quarter. negligible growth points. quarter-over-quarter we would year-over-year the the a point for standalone NIM our X debt a up fourth mid-XXs NIM Adjusting a in fourth six-day the in accelerated assurance income impact accounting expanded basis On the interest-bearing resulted the of basis the the and this have MB basis our net except the points December been January, XX quarter quarter consumer Compared items. quarter quarter. in basis, higher deposits As NIM the X%. hike impact had NIM mid-XXs was first in in during beta included high The cumulative in rate benefit XXs. was first average. seasonal peer a call point deposit in beta is impact, our a the The and commercial X earnings combined from
While continuation assume does modest repricing our end a XX% the second future expect we in of XX% not hikes, the current and any outlook deposit commercial increasing deposit XXXX beta with rate the consumer throughout by quarter. to
grow NII XX% and over year accounting the XXXX We full accretion. without XX% XXXX excluding to any to rate additional purchase expect hikes
MB impact outlook as as growth. well additional of the Our reflects loan
to NII by XX% base day earning to benefits quarter about reflecting counts our increase of second in pressures. our sequentially continued larger offset XX% pricing asset expect partially We the deposit
second first excluding accounting Our purchase should compared NIM, basis to quarter the about X points quarter. up accretion, be
a We points excluding expand the expect basis to year the purchase on basis to full NIM about XX accounting in NIM. benefit XXXX
purchase about on X this expect accretion accounting year the NIM quarter a the impact to on points We full X basis basis and point have NIM.
items, by quarter the from the year-ago compared X% compared seasonally impact MB year’s improved volumes. previously and and quarter and decreased client primarily compared the decreased flat prior to strong second the post processing was Card discussed. performance seasonality Excluding strong revenue initiatives TRA. from reflecting to prior the have due listed quarter about corporate compared exceeded asset of expect MB on transaction grow quarter and larger up in management compared to the prior Wealth six-day compared to X% compared MB to client sale The to income in service quarter which margin was year-ago revenue. and $X.X volume we to income last the X% the was revenue from increased Mortgage billion to capital the the base result on quarter of private fees reflecting Sequential Gain reflected the both to revenue of earnings compared quarter markets basis last X% points Worldpay year-ago points to year-ago impact currently lending We resulting X% Performance tax-related Corporate X% the business up our Performance reflected was banking and XX% decreased XX% the was from our guidance. increased service revenue fees. banking sequentially and was for quarter X% XXX year-ago basis quarter. first which the up non-interest X% banking year Origination million. standalone Deposit $XX the quarter, impact Adjusting exceeded were of impact, quarter. performance up charges the guidance. our our quarter included quarter was the ago driven commercial decreased from the prior deposit points during the growth. consumer to from down and quarter. basis lower net the sequentially fees. fees year-ago up quarter. compared XX increased lower XX non-interest seasonally
XX% For first XX% expect the non-interest to we to to quarter non-interest the from we up the quarter, second and XX% XXXX of be for adjusted the non-interest full income approximately from income XXXX total year total income. adjusted increase expect
expectations $XX million of sale expenses in about cash stake. longer to flows revenues January revenue shift in lease given from reminder, million continue our TRA in to company’s includes receive in Worldpay recognition, expect completed in TRA of operating over just the income. merger Worldpay expect the timing highlight on XXXX Despite which change final XXXX we a is Vantiv-Worldpay expected increased final which as that would to Just $XXX This the the include up to flows payment in receive impact cash of a no the the timing. taxable is the grossed merger-related these XXXX. from the like we the I
Worldpay the tax of As taxable year during the any the quarter which Fifth income utilize a deductions does the where tax recognizes carry Third deductions year benefit the recognizes Worldpay of the year have tax in in to forward. the not reminder, attributes, income and following sufficient fourth
beyond. understanding to sufficient we based TRA our taxable estimates recently likely announced the Worldpay were forecast of better assumption income previous deductions. and XXXX impact update of that in the utilize for the have will XXXX Our FIS-Worldpay would transaction, Once have a we the on
reported transaction totaling quarter MB merger-related included $XX First from items the pre-tax. expenses million
expenses. expenses call technology of customer even quarter Furthermore, up elevated affected six The increase quarter a meaningful. the that from from days year-ago in Excluding were of and trends in the run from from compensation declined were than few of these throughout and Fifth run expenses first to activities. diligent impacts were in to expense year-over-year seasonal quarter $XX the the seasonally there including quarter adjusted reduction items, was non-bank that expenses expenses The specifically actually the million the by the more Therefore, out were company’s compensation-related Third the the management expenses implied including in XXX(k) first payroll mark-to-market comparisons bank in increase derivative the are deferred higher business valuation rate in compensation which standalone not the continued X% more we normal the match attributable resulting other compensation Due first during the adjustments. expense items just the expenses better. last during MB acquisition and did from items surcharge one-time and the year’s and tax offset primarily investments timing awards, rate sequential carry. quarter, XXXX unique employee-based the FDIC were
our invest We on will XXXX while throughout maintain the continuing management in same expense focus to company.
should for the next ratio over efficiency therefore efficiency The benefit first the items by adjusted the and is ratio improve quarter current three I quarter mentioned was quarters. impacted Our compensation XX%. seasonal
of expect have for positive clear the for currently excluding delivering adjusted quarter foreseeable of intend merger-related XX% due We to XXXX, continue sequentially about increase to expenses expenses amortization expense MB. and CDI to to the first entirely track established and second XX% from quarter the We a very leverage record the impact future. operating
approximately should of merger-related again XX% for expect and fee expense the excluding an XX%. we an amortization. Also, XXXX outlook growth expense of ratio in efficiency below adjusted the expenses Our $X.XXX from result base intangible quarter second and full year billion, NII, expense XXXX
$XX in up on higher to incremental due since the MB-related operating is for up. operating accounting is also million impact no to line historic their the levels change about reminder, base grossed has to which a bottom the expense side due compared revenue grossed the As leases
previous for timing remain and Our of expense savings savings outlook those MB-related intact.
quarter $XXX million XXXX. achieve to by end expect in in first the the savings We of
we actual total be after-tax charges charges expect merger In current inclusive charges future merger-related of our periods projected $XXX and tax. about in addition, million to past recognized and after
credit Turning X. Slide to results on
First a and The increased basis the purchase continued tangible quarter rates to XX under credit caused MB low of market and levels. by of tended results from MB be result declined low on X.XX% middle primarily to portfolio which continued with the XX performance. lowest net points, believe X.XX% points portfolio assets were slightly loss remaining content be compared criticized impacts with stress ratio losses higher prudent is assets X percentage percentage asset banking consumer MB ALLL points quarter. the carry by their from ratio credit advanced near the The accounting commercial and the The basis basis business ratio to is in charge-off basis lower collateralized ratio ratio rate flat historical XX or down consistent we to prior Both at million of XX given criticized XX impacted well increased which a of Fifth XX net will exposures. Net with NPA years. NPL of quarter. historically to was sequentially at basis benign. The the in Third of acquisition. the standalone increase charge-off level charge-offs last essentially basis points hover granular to The ratio $XX lows. consists points of The the the multiyear a greater points even sequentially
Excluding compared these by prior exceeded strong standalone loan unchanged charge-offs quarter net quarter provision million have during losses of as million would the $XX been for $XX loan driven by ratio the impacts, the ALLL growth. to the
given potential you low As to absolute outlook a we remind of backdrop fluctuations charge-offs. credit quarterly economic relatively current with the levels current support stable quarter, continues every
Turning remained to levels the strong XX. Capital first very during Slide quarter.
and was estimated unrealized our equity common X.XX%. Our was X excluding Tier gains equity common ratio X.X% losses ratio and at tangible
the the of to cash acquisition In of initiated to we levels, also addition impact repurchase quarter. million accelerated $XXX components stock MB near of the our and end a capital the share the
MB end shares increased quarter, XX% quarter. issuance the As net shares our of or XX a prior first outstanding compared result of million to of almost buyback acquisition, the the the activity at common
provided on more our slides. in count information the have share We for the progression appendix quarter first
a was IV given full the the Fifth bank, a or on Category based process. distribute XXXX calculation to CCAR capital As template predefined undergo Third option
that full test. amount result of compared predefined returned difference As of material not a our analysis, the capital a could be to the have would using likely the template undergoing stress
our Reserve in planned As a actions the result, we submitted template to April, capital early Federal utilizing the approach.
to and an board distribution capital our the to to plans $X.XX final update CCAR from receive to subject We conditions market we response approval provide we XXXX continue to Fed. in and pursuant expect to formal increase the dividend authorization June to our once common expect
of avoid $XXX non-interest from and provides kept our buyback for million references plan current our any amount after-tax XX to Slide we Additionally, summary the income XXXX a We to the the final sale. outlook. Worldpay quarter guidance gain fourth up three outlook expense any generated the in related metrics our MB’s the right-hand XXXX. key the confusion expectations financial partial to for as for our of to year. same highlights incremental original side impact The of our
tax the of higher operating to state the our MB the increase the is to outlook we prior at rate March from from MB. on and transaction. closing in policy impact impacts, our unchanged conference TRA the this is Investor gave slight largely full Excluding The the guidance lease year tax
our for first reiterate outperform We ROA and on XX% focused the and I company As like the greater a the reported key would of result, and efficiency quarter below a an quarter a summary, forward XX% and priorities strategic strong to few by ROTCE drive or we cycles. In XXXX. currently to points. financial of results expect very approximately of remain X.X% business fourth to various through ratio
confident in remain to executing our up our Chris Q&A. financial focused over With me are the call our targets. that, against and on for open ability it turn to priorities We to achieve successfully let strategic
