KeyCorp (KEY) 2023 Q3 法說會逐字稿

Good morning, and welcome to KeyCorp's Third Quarter Earnings Conference Call. As a reminder, this conference is being recorded. I would now like to turn the conference over to the Chairman and CEO, Chris Gorman, please go ahead.

早上好，歡迎參加 KeyCorp 第三季財報電話會議。提醒一下，本次會議正在錄製中。現在我想將會議交給董事長兼執行長克里斯·戈爾曼，請繼續。

Thank you for joining us for KeyCorp's Third Quarter 2023 Earnings Conference Call. Joining me on the call today are Clark Khayat, our Chief Financial Officer; and Mark Midkiff, our Chief Risk Officer. On Slide 2, you'll find our statement on forward-looking disclosure and certain financial measures, including non-GAAP measures. These statements cover our presentation materials and comments as well as the question-and-answer segment of our call.

感謝您參加 KeyCorp 2023 年第三季財報電話會議。今天和我一起參加電話會議的是我們的財務長 Clark Khayat；以及我們的首席風險長馬克‧米德基夫 (Mark Midkiff)。在投影片 2 上，您將看到我們關於前瞻性揭露和某些財務指標（包括非公認會計原則指標）的聲明。這些聲明涵蓋了我們的簡報資料和評論以及我們電話會議的問答部分。

I am now moving to Slide 3. This morning, we reported earnings of $266 million or $0.29 per share. Our results reflect broad-based growth across our franchise, supported by our strong balance sheet and disciplined risk management. We continue to benefit from our focus on relationship banking and primacy, namely having our clients' primary operating accounts.

我現在轉到幻燈片 3。今天早上，我們報告盈利 2.66 億美元，每股收益 0.29 美元。我們的業績反映了我們的特許經營業務的廣泛成長，這得益於我們強大的資產負債表和嚴格的風險管理。我們繼續受益於我們對關係銀行業務和首要地位的關注，即擁有客戶的主要營運帳戶。

We continue to add and deepen relationships in both our consumer and commercial businesses, as well as improve both the quality and diversity of our deposits. Average deposits increased relative to the prior quarter and the year-ago period.

我們繼續增加和深化與消費者和商業業務的關係，並提高存款的品質和多樣性。平均存款較上一季和去年同期增加。

Our focus on relationships continues to guide our balance sheet optimization efforts. This quarter, we reduced average loans by over $3 billion as we deemphasize credit-only and other non-relationship businesses. Importantly, our common equity Tier 1 ratio increased by 50 basis points to 9.8% as a result of our proactive balance sheet management. Risk-weighted assets decreased by $7 billion in the third quarter and $9 billion from the beginning of the year, which is approaching our 2023 full year target of $10 billion. The increase in our common equity Tier 1 ratio this quarter moves us above our current targeted capital range of 9% to 9.5%, where we would expect to remain for the foreseeable future.

我們對關係的關注繼續指導我們的資產負債表優化工作。本季度，我們減少了超過 30 億美元的平均貸款，因為我們不再強調純信貸業務和其他非關係業務。重要的是，由於我們積極主動的資產負債表管理，我們的普通股一級資本比率增加了 50 個基點，達到 9.8%。第三季風險加權資產減少70億美元，較年初減少90億美元，正接近我們2023年全年100億美元的目標。本季普通股一級資本比率的增加使我們高於目前 9% 至 9.5% 的目標資本範圍，我們預計在可預見的未來將保持在這一水平。

Other capital ratios were relatively stable this quarter, including our tangible common equity ratio, which was down 10 basis points despite the impact of higher interest rates. Overall, our capital remains strong, and we are well positioned relative to our capital priorities and the phase-in of the proposed future capital requirements. Although we would not expect the same magnitude of change in risk-weighted assets next year, we will continue to take steps to manage our balance sheet in conjunction with anticipated regulatory changes.

本季其他資本比率相對穩定，包括我們有形的普通股比率，儘管受到利率上升的影響，但仍下降了 10 個基點。總體而言，我們的資本仍然強勁，並且相對於我們的資本優先事項和擬議的未來資本要求的逐步實施，我們處於有利地位。儘管我們預計明年風險加權資產不會出現同樣幅度的變化，但我們將繼續採取措施結合預期的監管變化來管理我們的資產負債表。

Net interest income in the quarter reflected the continued high-interest rate environment and our balance sheet positioning. Mark will discuss our balance sheet in his remarks, but I would point out that Key has a very well-defined net interest income opportunity over the next 5 quarters as our short-term swaps and treasuries reprice.

本季的淨利息收入反映了持續的高利率環境和我們的資產負債表定位。馬克將在演講中討論我們的資產負債表，但我想指出，隨著我們的短期掉期和國債重新定價，Key 在未來 5 個季度擁有非常明確的淨利息收入機會。

In our slide deck, we showed net interest income benefit will reach approximately $1 billion on an annualized basis by the first quarter of 2025. Our net interest margin has been a challenge for us this year. We believe; however, the third quarter represented the low point for the cycle.

在我們的幻燈片中，我們顯示，到 2025 年第一季度，按年化計算，淨利息收入收益將達到約 10 億美元。今年的淨利差對我們來說是一個挑戰。我們相信;然而，第三季是該週期的低點。

Our results continue to benefit from our strong fee-based businesses, which consistently make up 40% of our revenue. This revenue mix will be a clear competitive advantage under the proposed regulatory framework. This quarter, fee income was up 6%, driven by a 17% linked quarter increase in investment banking and debt placement fees.

我們的業績繼續受益於我們強大的收費業務，該業務一直占我們收入的 40%。在擬議的監管框架下，這種收入組合將成為明顯的競爭優勢。本季度，投資銀行和債務配售費用較上季成長 17%，推動費用收入成長 6%。

We expect investment banking fees to increase again in the fourth quarter based on current pipelines. The absolute level of improvement is, of course, market dependent.

根據目前的管道，我們預計第四季度投資銀行費用將再次增加。當然，改進的絕對水準取決於市場。

Given the significance of our integrated corporate and investment bank, any normalization in the capital markets represents an upside opportunity for Key from both a fee generation and balance sheet management perspective.

鑑於我們綜合企業和投資銀行的重要性，從費用產生和資產負債表管理的角度來看，資本市場的任何正常化都對 Key 來說意味著一個上行機會。

In addition to capital markets, our fee income will continue to benefit from our strong positions in both payments, an area where we have consistently invested, and wealth where we benefit from critical mass, with assets under management of $53 billion.

除了資本市場之外，我們的費用收入將繼續受益於我們在支付領域（我們一直投資的領域）和財富領域（我們管理的資產達 530 億美元）的強大地位。

Expense management remains a priority. Our results reflect the successful completion earlier this year of a company-wide effort to improve productivity and efficiency. We are continuing our efficiency journey by further simplifying and streamlining our businesses. As we narrow our focus, we will continue to drive additional expense savings, which provide the funding to continue to invest in our business.

費用管理仍然是優先事項。我們的業績反映了今年早些時候全公司範圍內提高生產力和效率的努力的成功完成。我們正在透過進一步簡化和精簡我們的業務來繼續我們的效率之旅。隨著我們縮小關注範圍，我們將繼續節省額外費用，從而為繼續投資我們的業務提供資金。

Finally, I want to comment on credit quality, which I believe is the most important determinant of return on tangible common equity and shareholder value over time. Credit quality remains a clear strength of Key. Our credit measures reflect the derisking we have done over the past decade and our distinctive underwrite distribute model. This quarter, our net charge-offs were 24 basis points. Over the next several quarters, we expect to continue to operate below our targeted through-the-cycle range of 40 to 60 basis points.

最後，我想評論一下信用質量，我認為隨著時間的推移，信用品質是有形普通股回報和股東價值的最重要決定因素。信用品質仍然是一個明顯的優勢關鍵。我們的信貸指標反映了我們在過去十年中所做的去風險工作以及我們獨特的承銷分配模式。本季度，我們的淨沖銷額為 24 個基點。在接下來的幾個季度中，我們預計將繼續低於 40 至 60 個基點的整個週期目標範圍。

The quality of our loan portfolio continues to serve us well, with over half of our C&I loans rated as investment grade or the equivalent. Similarly, our consumer clients had a weighted average FICO score of approximately 770 at origination. As a reminder, we have limited exposure to leveraged lending, office loans and other high-risk categories. B and C class office exposure in central business districts totaled $116 million. 2/3 of our commercial real estate exposure is in multifamily, including affordable housing, which continues to be a significant unmet need in this country.

我們的貸款組合的品質繼續為我們提供良好服務，超過一半的工商業貸款被評為投資級別或同等級別。同樣，我們的消費者客戶在最初的加權平均 FICO 分數約為 770。提醒一下，我們對槓桿貸款、辦公貸款和其他高風險類別的曝險有限。中央商務區的 B 級和 C 級辦公室投資總額為 1.16 億美元。我們 2/3 的商業房地產投資是多戶住宅，包括經濟適用房，這仍然是這個國家未滿足的重大需求。

I will close by underscoring my confidence in the long-term outlook for Key. Our businesses are well-positioned, and we continue to strengthen our balance sheet. Credit quality remains one of our most significant strengths. We will continue to focus on maintaining the quality of our loan book and enhancing our risk management framework. This positions us well to deliver sound, profitable growth and create value for our shareholders.

最後，我要強調我對 Key 的長期前景的信心。我們的業務處於有利地位，並且我們繼續加強我們的資產負債表。信用品質仍然是我們最重要的優勢之一。我們將繼續專注於維持貸款簿的品質並加強我們的風險管理框架。這使我們能夠實現穩健、盈利的成長並為股東創造價值。

With that, I'll turn it over to Clark to provide more details on our results for the quarter. Clark?

這樣，我將把它交給克拉克，以提供有關本季業績的更多詳細資訊。克拉克？

Thanks, Chris. I'm now on Slide 5. For the third quarter net income from continuing operations was $0.29 per common share, up $0.02 from the prior quarter and down $0.26 from last year. Our results were generally consistent with the guidance we provided for the quarter, and we've affirmed the full year outlook we shared at our last earnings call. As Chris highlighted in his remarks, our results reflect the strength of our core business focused on primacy, balance sheet optimization and our disciplined risk management. I'll cover each of these strategic focus areas in my remarks this morning.

謝謝，克里斯。我現在看到的是幻燈片 5。第三季來自持續經營業務的淨利潤為每股普通股 0.29 美元，比上一季增加 0.02 美元，比去年同期減少 0.26 美元。我們的業績總體上與我們為本季度提供的指導一致，並且我們確認了我們在上次財報電話會議上分享的全年展望。正如克里斯在演講中所強調的那樣，我們的業績反映了我們專注於首要地位、資產負債表優化和嚴格風險管理的核心業務的實力。我將在今天上午的演講中逐一介紹這些戰略重點領域。

Turning to Slide 6. Average loans for the quarter were $117.6 billion, up 3% from the year-ago period and down 3% from the prior quarter. Total loans ended the period at $115.5 billion, down $3.5 billion from the prior quarter. The decline in average loans was driven primarily by a reduction in C&I balances, which were down almost 4% from the prior quarter. The reduction reflects our balance sheet optimization, which prioritizes full relationships and deemphasizes credit-only and nonrelationship business as we prepare the balance sheet for a Basel III Endgame world.

轉向投影片 6。本季平均貸款為 1,176 億美元，年增 3%，季減 3%。期末貸款總額為 1,155 億美元，較上一季減少 35 億美元。平均貸款下降的主要原因是 C&I 餘額減少，較上一季下降近 4%。這項減少反映了我們的資產負債表優化，當我們為《巴塞爾協議III終局之戰》世界準備資產負債表時，我們優先考慮全面的關係，並不再強調純信貸和非關係業務。

The reduction in loans contributed to the decline in risk-weighted assets, representing roughly half of the RWA decline this quarter. RWAs were also impacted by our optimization efforts, through which we were able to apply more attractive capital treatment to existing portfolios.

貸款的減少導致風險加權資產下降，約佔本季風險加權資產下降的一半。 RWA 也受到我們優化工作的影響，透過優化工作，我們能夠對現有投資組合應用更具吸引力的資本待遇。

Importantly, this allowed us to manage RWAs proactively while minimizing impact to net interest income.

重要的是，這使我們能夠主動管理風險加權資產，同時最大限度地減少對淨利息收入的影響。

Turning to Slide 7. These long-standing commitment to primacy continues to support a stable diverse base of core deposits for funding. This quarter, average deposits totaled $144.8 billion, relatively stable from the year-ago period, and up nearly $2 billion from the prior quarter. The increase in average deposit balances from the prior quarter was driven by an increase in both consumer and commercial deposit balances. Importantly, we've continued to improve the quality of our funding mix by growing core relationship balances and reducing wholesale and brokered deposits. This quarter, brokered deposits declined by $2.6 billion on average and $3.2 billion relative to period-end balances.

轉向投影片 7。這些對首要地位的長期承諾繼續支持核心存款融資的穩定多元化基礎。本季平均存款總額為 1,448 億美元，較去年同期相對穩定，較上季增加近 20 億美元。平均存款餘額較上季增加是由消費者和商業存款餘額增加所推動的。重要的是，我們透過增加核心關係餘額和減少批發和經紀存款，繼續提高融資組合的品質。本季，經紀存款平均減少 26 億美元，較期末餘額減少 32 億美元。

At the end of the quarter, we took advantage of our improved funding profile and called $1.2 billion of outstanding bank debt for redemption. We expect to redeem the debt at the end of October.

在本季末，我們利用融資狀況改善的機會，贖回了 12 億美元的未償銀行債務。我們預計在十月底贖回債務。

Our total cost of deposits was 188 basis points in the third quarter, and our cumulative deposit beta, which includes all interest-bearing deposits, was 46% since the Fed began raising interest rates in March 2022.

第三季我們的總存款成本為 188 個基點，自聯準會 2022 年 3 月開始升息以來，我們的累積存款貝塔值（包括所有計息存款）為 46%。

Higher interest rates resulted in the continued deposit mix shift this quarter. We've seen this mix shift slow, and we are testing reduced rates in certain markets. We did not deploy higher rates in our retail business against the July interest rate hike.

利率上升導致本季存款結構持續變化。我們已經看到這種混合轉變緩慢，我們正在某些市場測試降低的費率。針對 7 月的升息，我們並未在零售業務中部署更高的利率。

We continue to expect that our cumulative deposit beta will approach 50% by the end of the year.

我們繼續預計，到今年年底，我們的累積存款貝塔值將接近 50%。

Turning to Slide 8. Taxable net interest income was $923 million for the third quarter, down 23% from the year-ago period and down 6% from the prior quarter. Our net interest margin was 2.01% for the third quarter compared to 2.74% for the same period last year and 2.12% for the prior quarter. Year-over-year, net interest income and the net interest margin were impacted by higher interest-bearing deposit costs and a shift in funding mix to higher cost deposits and borrowings. Relative to the second quarter, the decline in net interest income reflects a planned reduction in earning asset balances from our balance sheet optimization efforts and higher interest-bearing deposit costs.

轉向投影片 8。第三季應稅淨利息收入為 9.23 億美元，年減 23%，季減 6%。第三季淨利差為 2.01%，去年同期為 2.74%，上季為 2.12%。與去年同期相比，淨利息收入和淨利差受到計息存款成本上升以及資金結構轉向成本較高的存款和借款的影響。與第二季相比，淨利息收入的下降反映出我們因資產負債表優化工作而計劃減少生息資產餘額以及計息存款成本上升。

Our net interest margin and net interest income continue to reflect the headwind from our short-dated treasuries and swaps. Our swap portfolio and short-dated treasuries reduced net interest income by $370 million, and lowered our net interest margin by 80 basis points this quarter.

我們的淨利差和淨利息收入持續反映了短期國債和掉期的不利因素。本季我們的掉期投資組合和短期國債使淨利息收入減少了 3.7 億美元，並將淨利差降低了 80 個基點。

We believe that NIM bottomed in the third quarter as we see continued benefit from the maturity of swaps and treasuries. Consistent with our previous comments, we expect that we are at or near the bottom in NII. In the third quarter, we executed $6.7 billion of spot pay fixed swaps. In October, subsequent to the quarter end, we terminated $7.5 billion of received fixed cash flow swaps, which were scheduled to mature throughout 2024. The swap termination locked in the AOCI position of those swaps, which will amortize throughout 2024 on the original maturity schedule. This should have no impact to our AOCI position at the end of 2024, but will guard against future hikes or a reduction in rates that is slower than the forward curve predicts.

我們認為淨利差已在第三季觸底，因為我們看到掉期和國債的到期將繼續受益。與我們之前的評論一致，我們預計 NII 已處於或接近底部。第三季度，我們執行了 67 億美元的即期支付固定掉期交易。 10 月，在季度末之後，我們終止了已收到的75 億美元固定現金流掉期，這些掉期原定於2024 年到期。掉期終止鎖定了這些掉期的AOCI 頭寸，這些掉期將按照原定到期時間表在2024 年攤銷。這應該不會對我們 2024 年底的 AOCI 部位產生影響，但將防止未來升息或降息慢於遠期曲線預測。

These actions, along with the planned maturity of our short-term treasuries made Key less liability-sensitive, protect capital and reduce our exposure to higher rates.

這些行動，加上我們短期國庫券的計畫到期，降低了 Key 的責任敏感度，保護了資本並減少了我們面臨更高利率的風險。

Turning to Slide 9. As Chris mentioned earlier, our balance sheet positioning, which has been a near-term drag on earnings, represents a clear and well-defined opportunity. Based on the forward curve, which continues to adjust to higher levels, we project an annualized net interest income benefit of approximately $1 billion from the maturities of our short-term treasuries and swaps by the first quarter of 2025. We'll continue to take a measured, but opportunistic approach to lock in this...

轉向幻燈片 9。正如克里斯之前提到的，我們的資產負債表定位（短期內拖累了盈利）代表了一個明確且明確的機會。根據繼續調整至更高水準的遠期曲線，我們預計到 2025 年第一季度，短期國債和掉期債券的年化淨利息收入收益將達到約 10 億美元。一種謹慎但機會主義的方法來鎖定這一點......

Moving to Slide 10. Noninterest income was $643 million for the third quarter of 2023, down $40 million from the year-ago period and up $34 million from the second quarter. The decrease in noninterest income from the year-ago period reflects a $23 million decline in corporate services income due to lower customer derivatives trading revenue. Additionally, service charges on deposit accounts declined $23 million, driven by the previously announced and implemented changes in our NSF/OD fee structure and lower account analysis fees related to interest rates.

轉到投影片 10。2023 年第三季的非利息收入為 6.43 億美元，比去年同期減少 4,000 萬美元，比第二季增加 3,400 萬美元。非利息收入較上年同期減少反映出，由於客戶衍生性商品交易收入減少，企業服務收入減少了 2,300 萬美元。此外，由於先前宣布並實施的 NSF/OD 費用結構變化以及與利率相關的帳戶分析費用的降低，存款帳戶的服務費下降了 2,300 萬美元。

The increase in noninterest income from the second quarter reflects a $21 million increase in investment banking and debt placement fees and an $18 million increase in other income from higher trading income and a gain on loan sale.

第二季非利息收入的成長反映了投資銀行和債務配售費用增加了 2,100 萬美元，以及交易收入增加和貸款銷售收益帶來的其他收入增加了 1,800 萬美元。

I'm now on Slide 11. Total noninterest expense for the quarter was $1.1 billion, up $4 million from the year-ago period and up $34 million from last quarter. Compared to the year-ago quarter, computer processing expense increased $12 million, driven by technology investments, and personnel expense increased $8 million, driven by higher salaries and employee benefits, partially offset by lower incentive and stock-based compensation.

我現在看到的是幻燈片 11。該季度的非利息支出總額為 11 億美元，比去年同期增加 400 萬美元，比上季增加 3,400 萬美元。與去年同期相比，在技術投資的推動下，電腦處理費用增加了1200 萬美元，在工資和員工福利增加的推動下，人事費用增加了800 萬美元，但部分被較低的激勵和股票薪酬所抵消。

The increase in expenses relative to the prior quarter was driven by personnel expense, which increased $41 million from incentive and stock-based compensation, a majority of which was from production-related expenses and a higher stock price at the end of the quarter.

與上一季相比，費用增加是由人事費用推動的，其中激勵和股票薪酬增加了 4,100 萬美元，其中大部分來自生產相關費用和季度末較高的股價。

As we continue to proactively manage our expense base and simplify and streamline our businesses, this will improve the client experience, reduce complexity and cost and provide flexibility to continue to invest for the future. Our goal, as expressed previously, is to again keep core expenses flat in 2024. We expect to have additional efficiency-related expenses in the fourth quarter connected with these efforts. When that completes, we would estimate those charges to be in the range of $50 million. We'll provide full 2024 guidance during our fourth quarter earnings call.

隨著我們繼續積極管理我們的費用基礎並簡化和精簡我們的業務，這將改善客戶體驗，降低複雜性和成本，並為未來繼續投資提供靈活性。如同先前所表達的，我們的目標是在 2024 年再次保持核心支出持平。我們預計第四季將有與這些努力相關的額外效率相關支出。完成後，我們估計這些費用將在 5000 萬美元左右。我們將在第四季財報電話會議上提供完整的 2024 年指引。

Moving now to Slide 12. Overall, credit quality and our related outlook remain strong. For the third quarter, net charge-offs were $71 million or 24 basis points of average loans. While nonperforming loans and criticized loans continue to move up from their historical lows, we believe Key is well positioned in terms of credit migration and potential cost content. Our provision for credit losses was $81 million for the third quarter, and our allowance for credit losses to period-end loans increased from 1.49% to 1.54%.

現在轉到投影片 12。總體而言，信貸品質和我們的相關前景仍然強勁。第三季度，淨沖銷額為 7,100 萬美元，相當於平均貸款的 24 個基點。儘管不良貸款和批評貸款繼續從歷史低點上升，但我們認為 Key 在信貸遷移和潛在成本內容方面處於有利地位。第三季我們的信用損失準備金為8,100萬美元，期末貸款信用損失準備金從1.49%增加到1.54%。

Turning to Slide 13. We ended the third quarter with a common equity Tier 1 ratio of 9.8%, up 50 basis points from the prior quarter and well above our targeted range of 9% to 9.5%. Going forward, we expect to stay above our current targeted range. We'll determine and share any changes to that targeted range once the new capital rules are finalized.

轉向投影片 13。第三季末，我們的普通股一級資本比率為 9.8%，比上一季上升 50 個基點，遠高於我們 9% 至 9.5% 的目標範圍。展望未來，我們預計將保持在當前目標區間之上。一旦新的資本規則最終確定，我們將確定並分享該目標範圍的任何變更。

We will remain focused on building capital in advance of newly proposed capital rules and continue to support client activity and the return of capital. We do not expect to engage in material share repurchase in the near term.

我們將繼續專注於在新提出的資本規則出台之前累積資本，並繼續支持客戶活動和資本回報。我們預計短期內不會進行重大股份回購。

The right side of this slide shows Key's expected reduction in our AOCI market. The AOCI market is expected to decline by approximately 27% by the end of 2024 and 39% by the end of 2025, which will provide approximately $2.5 billion of capital build through that time frame. During the third quarter, the AOCI position decreased by $500 million in structural burndown. The increase in rates, specifically in the 5-year time frame, increased the position by approximately $1.1 billion, which resulted in a net change of $600 million. Importantly, only 10% of our projected $2.5 billion of AOCI reduction between now and 2025 is driven by the benefit of lower rates represented in the current forward curve. Said differently, more than 90% of this reduction will occur even if rates remain flat to current levels driven by maturities, cash flows and time.

這張投影片的右側顯示了 Key 對 AOCI 市場的預期減少。預計 AOCI 市場到 2024 年底將下降約 27%，到 2025 年底將下降 39%，在此期間將提供約 25 億美元的資本建設。第三季度，AOCI 部位因結構性燒毀而減少了 5 億美元。利率的提高，特別是在 5 年時間範圍內，使頭寸增加了約 11 億美元，從而導致淨變化 6 億美元。重要的是，從現在到 2025 年，我們預計 AOCI 減少 25 億美元，其中只有 10% 是由當前遠期曲線中較低利率的好處推動的。換句話說，即使利率在期限、現金流和時間的推動下保持在當前水平，90%以上的降幅也會發生。

Given the proposed capital rules, we believe our reduction in AOCI marks, along with our future earnings and balance sheet management, would allow us to organically accrete capital to the required loss.

鑑於擬議的資本規則，我們相信我們 AOCI 標記的減少以及我們未來的收益和資產負債表管理將使我們能夠有機地增加資本以達到所需的損失。

Slide 14 provides an outlook for the fourth quarter relative to the third quarter as well as the full year compared to the prior year. Our guidance uses the forward curve as of September 30, which holds Fed funds flat at 5.5% through August of 2024, ending 2024 at 5%. Balance sheet trends are tracking as anticipated. We expect average loans to be down 1% to 3% in the fourth quarter versus the prior quarter, as we continue to optimize our balance sheet and recycle capital to support relationship clients.

幻燈片 14 提供了第四季度相對於第三季度的展望以及全年相對於上一年的展望。我們的指導使用截至 9 月 30 日的遠期曲線，到 2024 年 8 月，聯邦基金利率將維持在 5.5%，2024 年末為 5%。資產負債表趨勢符合預期。我們預計第四季度的平均貸款將比上一季下降 1% 至 3%，因為我們將繼續優化資產負債表並回收資本以支持關係客戶。

We expect average deposits to be relatively stable in the fourth quarter. Our outlook assumes cumulative deposit beta approaching 50 by year-end. We also expect to continue to improve our funding mix and liquidity. On a linked-quarter basis, net interest income is expected to be relatively stable in the fourth quarter, changed from our previous guidance of flat to down 2%. Our guidance for noninterest income has changed to up 1% to 3%, reflecting stronger fee income in the third quarter compared to the fourth quarter. Our full year outlook for fees remains unchanged.

我們預計第四季平均存款將相對穩定。我們的展望假設到年底累積存款貝塔值接近 50。我們也期望繼續改善我們的融資組合和流動性。從環比來看，第四季淨利息收入預計將相對穩定，由我們先前持平的指引改為下降 2%。我們對非利息收入的指導已更改為成長 1% 至 3%，反映出第三季的費用收入較第四季強勁。我們對全年費用的展望保持不變。

Noninterest expense is expected to remain relatively stable in the fourth quarter, excluding the potential FDIC special assessment charge, additional efficiency-related expenses and an expected pension settlement charge of $15 million to $20 million.

預計第四季度非利息支出將保持相對穩定，不包括潛在的 FDIC 特別評估費用、額外的效率相關費用以及預計 1500 萬至 2000 萬美元的退休金結算費用。

We expect credit quality to remain solid and net charge-offs to average loans to be in the range of 25 to 35 basis points in the fourth quarter, below our expected over-the-cycle targeted range of 40 to 50 basis points. Our guidance for fourth quarter GAAP tax rate is 18% to 19%.

我們預期信貸品質將保持穩定，第四季平均貸款淨沖銷將在 25 至 35 個基點之間，低於我們預期的 40 至 50 個基點的週期目標範圍。我們對第四季度 GAAP 稅率的指引為 18% 至 19%。

Once again, our full year outlook for 2023 versus the prior year has not changed. We feel confident in the foundation of our business and in our strategic efforts to strengthen capital and liquidity, manage risk and improve earnings.

與前一年相比，我們對 2023 年全年的展望再次沒有改變。我們對我們的業務基礎以及增強資本和流動性、管理風險和提高收益的策略努力充滿信心。

With that, I'll now turn the call back to the operator for instructions for the Q&A portion of the call. Operator?

這樣，我現在將把電話轉回給接線員，以獲取電話問答部分的說明。操作員？

(Operator Instructions) Our first question will come from Scott Siefers from Piper Sandler.

（操作員說明）我們的第一個問題將來自 Piper Sandler 的 Scott Siefers。

So great news that we've kind of hit the low on the margin and are at or near the bottom on NII. I guess I'm curious, does that outlook contemplate any further risk-weighted asset reductions that might be outside the scope of the $10 billion you've articulated for this year? And I guess along those lines, do you see a need to do anything beyond what you'll do this year? I mean it looks like you're kind of ramping up the capital base more quickly. So how are we thinking about overall balance sheet size within the scheme of bottoming NII trajectory?

這是一個好消息，我們的利潤率已觸及低點，並且 NII 已處於或接近底部。我想我很好奇，這種前景是否考慮了任何進一步的風險加權資產削減，而這些削減可能超出了您今年所闡述的 100 億美元的範圍？我想沿著這些思路，您是否認為除了今年要做的事情之外還需要做任何事情？我的意思是，看起來你們的資本基礎成長得更快了。那麼，我們如何在 NII 軌跡觸底的方案中考慮整體資產負債表規模？

Yes. So thanks, Scott. Our probe was that your first question would be expenses, but -- so the way I would think about it is we've guided the loan balances down 1% to 3% in the fourth quarter. I think that's going to be the vast majority of any reduction in the balance sheet. We could still see cash come down a bit. And we are still doing some optimization efforts. They won't carry the same size that we would have seen in this quarter. So you'll see a leveling off of that, and that $10 billion, I think, is the right number to be focused on.

是的。所以謝謝，斯科特。我們的調查是，你的第一個問題是費用，但是——所以我的想法是，我們已經指導第四季度的貸款餘額下降 1% 到 3%。我認為這將是資產負債表削減的絕大多數。我們仍然可以看到現金略有下降。而且我們還在做一些優化工作。它們的尺寸不會與我們本季看到的相同。所以你會看到這個數字趨於平穩，我認為 100 億美元是值得關注的正確數字。

Okay. Perfect. That's good. And I did have an expense question, but I think you largely hit it in there. So I'll refrain from asking about that one. I guess maybe a broader question though, Clark. I think you've talked about a 3% margin in a normal environment. I think that's still well above what would be implied by the extra $1 billion or so of benefit through next year. So maybe just sort of top level, what else would happen -- have to happen to get you there? How are we sort of thinking about that 3% normalized margin?

好的。完美的。那挺好的。我確實有一個費用問題，但我認為你基本上已經解決了這個問題。所以我不會問這個問題。我想也許是一個更廣泛的問題，克拉克。我想你已經談到了正常環境下 3% 的利潤率。我認為這仍然遠高於明年額外 10 億美元左右的福利所暗示的水平。所以也許只是某種頂層，還會發生什麼事──必須發生才能讓你到達那裡？我們如何看待 3% 的標準化利潤率？

Yes. So to be clear, I think 3-ish area is, again, not out of the realm. I think, to your point, Scott, you just said today, the 80 basis points that we talked about on drag, would be [2.81], would have been[2.85] last quarter, kind of [3.19] before that. So I think it's going to be kind of continued asset mix over time and funding mix. And what you're seeing, if I just point to the third quarter, you saw kind of flattish deposits, and that included a significant reduction in brokered, so more client deposits. But the other piece that I think is really important is that we did, and we will continue to focus on reducing our reliance on wholesale funding. So you would have seen that come down on the order of like $4 billion in the quarter. And obviously, that has more expense over time.

是的。因此，需要明確的是，我認為 3 左右的區域也並非超出範圍。我認為，就你的觀點而言，斯科特，你今天剛剛說過，我們在阻力方面討論的80 個基點將是[2.81]，上個季度將是[2.85]，在此之前是[3.19 ]。因此，我認為隨著時間的推移，這將是一種持續的資產組合和融資組合。你所看到的，如果我只指出第三季度，你會看到存款持平，其中包括經紀業務的大幅減少，因此客戶存款增加。但我認為真正重要的另一件事是我們已經做到了，我們將繼續致力於減少對批發資金的依賴。因此，您會看到本季的損失約為 40 億美元。顯然，隨著時間的推移，這會產生更多的費用。

Now your next question is probably once we get into long-term debt rules and we're issuing more wholesale debt, how does that impact that? I think that -- we sized that a little bit. We will factor that in. But again, I think when you start to put all these pieces together in a more normalized environment, something in the high 2s to 3s is not out of the realm of possibility.

現在你的下一個問題可能是，一旦我們制定長期債務規則並且我們發行更多的批發債務，這會產生什麼影響？我認為——我們稍微調整了一下規模。我們會考慮到這一點。但我再次認為，當你開始在一個更規範化的環境中將所有這些部分組合在一起時，高 2 到 3 的東西並不是不可能的。

The next question is from Erika Najarian from UBS.

下一個問題來自瑞銀 (UBS) 的 Erika Najarian。

I guess my question was on the RWA mitigation. So I just -- I'm going to follow up in terms of Clark's answer to that question. So you're pointing us to the $10 billion as the right area, which is a lot, it's a lot of RWA to take out. And I guess I'm wondering; number one, could you give us a sense of how much has already been taken out and what's to come? And second, as we think about the net interest income trajectory for next year, does the comment of the NII bottoming about here or in the fourth quarter, consider the cost of the RWA mitigation that you have left?

我想我的問題是關於 RWA 緩解措施的。所以我只是——我將跟進克拉克對這個問題的回答。所以你向我們指出 100 億美元是正確的領域，這個數字很大，需要拿出很多 RWA。我想我在想；第一，您能否讓我們了解一下已經取消了多少以及即將取消哪些內容？其次，當我們考慮明年的淨利息收入軌跡時，NII 在此處或第四季度觸底的評論是否考慮了您留下的 RWA 緩解措施的成本？

Sure. So the answer to the first part of your question, Erika, is, we're currently through the third quarter, we've reduced $9 billion. So in the third quarter, we reduced $7 billion on a cumulative basis for the year, we reduced $9 billion of RWAs. We are well on target to hit our $10 billion. As you try to kind of pivot from RWAs to the impact on NII, interestingly, there is a certain universe of those RWAs that we were able to get just different treatment on, namely the treatment that we qualified for in any event.

當然。因此，艾莉卡，你問題第一部分的答案是，我們目前已經到了第三季度，我們已經減少了 90 億美元。因此，在第三季度，我們全年累計減少了 70 億美元，RWA 減少了 90 億美元。我們正在順利實現 100 億美元的目標。當您嘗試從 RWA 轉向對 NII 的影響時，有趣的是，我們能夠對這些 RWA 的某些範圍進行不同的處理，即我們在任何情況下都有資格獲得的處理。

Secondly, there was a lot of unused line fees in there that obviously those 2 categories don't have any impact on NII. As you look forward, the other reduction in RWAs would have a marginal impact on NII, but a positive impact certainly on our returns, certainly on our margins. The other thing that taking out all these RWAs enables us to do is to focus on rightsizing our expense base as we take out these RWAs. So that's kind of how I think about it.

其次，其中存在大量未使用的線路費用，顯然這兩類費用對 NII 沒有任何影響。正如您所期望的，RWA 的其他減少將對 NII 產生邊際影響，但肯定會對我們的回報、我們的利潤產生積極影響。消除所有這些 RWA 使我們能夠做的另一件事是，在消除這些 RWA 時，專注於調整我們的支出基礎。這就是我的想法。

Got it. And, Chris, I guess, just the follow-up to there is Basel III Endgame clearly gives the banks time. And as you mentioned, the moves that you're making in terms of improving the margin, being mindful of balance sheet size, being mindful of the expense base, the target would be to improve CET1 generation from here. I guess how do you balance the notion of, okay, we have this $10 billion of RWA reduction check that's done, and potentially we're ready to be a little bit more aggressive in the market or not? You tell me. One of your peers said that they're ready for loan growth next year versus the notion of with U.S. Bank being freed from its category 2 commitments, whenever everyone runs the data on adjusted CET1, Key sort of ends up at the bottom of the list. So how do you balance in terms of running the bank day-to-day, right, versus how your investors are thinking about KeyCorp in sort of this new world order for regulation?

知道了。而且，克里斯，我想，《巴塞爾協議 III 終局之戰》的後續行動顯然給了銀行時間。正如您所提到的，您在提高利潤率、專注於資產負債表規模、專注於費用基礎方面採取的舉措，目標是從現在開始提高 CET1 的產生。我想你如何平衡這樣一個概念：好吧，我們已經完成了 100 億美元的 RWA 削減檢查，並且我們是否準備好在市場上更加激進一點？你告訴我。你的一位同行表示，他們已經準備好明年的貸款成長，而不是美國銀行擺脫其第2 類承諾的概念，每當每個人都在調整後的CET1 上運行數據時，Key 都會排在列表的底部。那麼，您如何在銀行的日常營運方面與您的投資者在這種新的世界監管秩序中對 KeyCorp 的看法之間取得平衡呢？

Sure. Well, first of all, as you know, the rules are still preliminary, and they're probably likely to change. That said, we're certainly confident that under the proposed current rules, including the definitions and the associated time frames, Erika, that we can hit them. And so what we need to do -- what I wanted to do is sort of when the events of March happened and then these rules came out in July, I wanted us to hit the reset button and reset our business and make the difficult decisions so we can get back to growing our business. As I've always said, the underlying business is in good shape.

當然。嗯，首先，如您所知，這些規則仍然是初步的，並且很可能會發生變化。也就是說，我們當然有信心，根據擬議的現行規則，包括定義和相關的時間框架，Erika，我們可以實現這些目標。所以我們需要做的——我想做的是，當三月的事件發生，然後這些規則在七月份出台時，我希望我們按下重置按鈕並重置我們的業務並做出艱難的決定，這樣我們可以重新開始發展我們的業務。正如我一直說的，基礎業務狀況良好。

We're we're adding clients on the consumer side. We're adding clients on the commercial side. And what I want to do is rightsize our balance sheet, get our loan to deposit where it needs to be, get our wholesale funding mix where it needs to be and then free up our people to get back out in the marketplace and do what they do and that's grow our business. So that is the needle that we're currently threading.

我們正在增加消費者方面的客戶。我們正在增加商業方面的客戶。我想做的是調整我們的資產負債表，讓我們的貸款存入需要的地方，讓我們的批發融資組合適合需要的地方，然後讓我們的員工回到市場，做他們想做的事。這樣做就可以發展我們的業務。這是我們目前正在穿線的針。

Our next question is from the line of Peter Winter from D.A. Davidson.

我們的下一個問題來自 D.A. 的 Peter Winter。戴維森。

You guys mentioned that capital markets should be up in the fourth quarter. But I was just wondering, just between higher rates and the geopolitical risk, just how you're thinking about the outlook for capital markets over the medium term?

你們提到第四季資本市場應該會上漲。但我只是想知道，在利率上升和地緣政治風險之間，您如何看待資本市場的中期前景？

The medium term, I feel really good about it, Peter. Over the near term, which I would consider the fourth quarter, both of the things you mentioned are a challenge. We will be up on a linked quarter basis as I look at our backlog, but the absolute -- as I mentioned in my comments, the absolute level of the increase remains to be seen. Obviously, the geopolitical issues are an issue. The other thing you think about over the last 5 or 6 trading days where the bond market has been, that obviously has an impact as well. So in the near term, I think there's probably additional headwinds, but over the medium term, I think I feel good about the business.

從中期來看，我對此感覺非常好，彼得。在短期內，我認為是第四季度，你提到的這兩件事都是一個挑戰。當我查看我們的積壓訂單時，我們將在一個季度的基礎上有所增長，但絕對的——正如我在評論中提到的，增長的絕對水平仍有待觀察。顯然，地緣政治問題是一個問題。在過去 5 或 6 個交易日中，債券市場的表現顯然也產生了影響。因此，在短期內，我認為可能會出現額外的阻力，但從中期來看，我認為我對這項業務感覺良好。

Private equity firms are starting to transact, which is important. If you look at the amount of M&A that was completed this year in the $100 billion area, it's down about 50%. And over time, obviously, that comes back. So in the near term, I think we'll be up. I don't know to what degree. In the intermediate term as you look at 2024, when there's clarity on where these rates settle in and some of these geopolitical concerns, I think there's going to be a lot of activity.

私募股權公司開始進行交易，這很重要。如果你看看今年在 1000 億美元領域完成的併購金額，你會發現下降了約 50%。顯然，隨著時間的推移，這種情況又會回來。所以在短期內，我認為我們會上漲。我不知道到什麼程度。從中期來看，當你展望 2024 年時，當這些利率的穩定情況以及其中一些地緣政治問題變得清晰時，我認為將會有很多活動。

Got it. And then, Chris, if I could ask about the dividend, I mean you have a 70%-plus payout ratio. Can you just talk about your commitment to maintaining that dividend? And is there any risk that you could be forced to cut the dividend?

知道了。然後，克里斯，如果我能問股息，我的意思是你的派息率超過 70%。您能談談您對維持股利的承諾嗎？是否存在被迫削減股利的風險？

So I'd be happy to address that. Let me start by just saying my views on our dividend are unchanged. As we've managed this business, we manage the business for the long term. Similarly, our Board takes the same approach on everything, including the dividend. And so when we gather in November, we'll review the dividend as we always do in the context of a range of scenarios. You were just talking about geopolitical scenarios, et cetera, the macro conditions. But importantly, we're going to take into consideration, as we always do, the normalized earnings power of our company. And our capital priorities are unchanged. We want to support our relationships as our clients and prospects, and secondly, the dividend.

所以我很樂意解決這個問題。首先我要說的是，我對股利的看法沒有改變。當我們管理這項業務時，我們會長期管理這項業務。同樣，我們的董事會對一切都採取相同的方法，包括股息。因此，當我們 11 月聚會時，我們將像往常一樣在一系列情況下審查股息。您剛才談到了地緣政治情景等宏觀條件。但重要的是，我們將一如既往地考慮我們公司的正常盈利能力。我們的資本優先事項沒有改變。我們希望支持我們作為客戶和潛在客戶的關係，其次是股利。

The other factor that I think are really important, first and foremost is credit quality because there's nothing that denigrates capital more than credit losses. I feel really good about our credit quality. We'll also obviously be looking at the burndown of AOCI, that obviously is tied in. And then our ability to organically build capital. We already talked about that a little bit through a reduction of RWAs and other actions we took, we were able to grow our capital for CET1 by 50 basis points this quarter.

我認為另一個非常重要的因素首先是信用質量，因為沒有什麼比信用損失更能貶低資本了。我對我們的信用品質感覺非常好。我們顯然也會關注 AOCI 的燒毀，這顯然是相關的。然後是我們有機建立資本的能力。我們已經討論過，透過減少 RWA 和我們採取的其他行動，我們能夠在本季度將 CET1 的資本增加 50 個基點。

So that's kind of how I think about it, but kind of -- (inaudible) started that my views on the dividend haven't changed.

這就是我的想法，但（聽不清楚）開始我對股利的看法沒有改變。

And the next question will come from Ken Usdin from Jefferies.

下一個問題將由 Jefferies 的 Ken Usdin 提出。

Clark, I was wondering if you could kind of walk through some of the hedging strategy changes to Slide 22, a lot of new executions and terminations this quarter. I guess to start, just can you help us understand like the net impact of these new moves in terms of like does that help or hurt fourth quarter NII just to kind of put it into perspective?

克拉克，我想知道您是否可以介紹幻燈片 22 的一些對沖策略變化，以及本季度的許多新執行和終止。我想首先，您能否幫助我們理解這些新舉措的淨影響，例如這是否有助於或損害第四季度的 NII，以便正確看待它？

Sure. So just to be clear, in the -- on that page, Ken, you'll see an incremental $6.7 billion of pay-fixed swaps. Those were put on to provide some AOCI protection to higher rates. And then the termination of the $7.5 billion of 2024 pay-fixed swaps that we've been obviously talking about now for a couple of quarters. Also done really to guard against higher rates, the prospect of higher rates or as we said, kind of rates that remain higher than the forward curve, which is relatively flat now through '24, but has some cuts in the back end. So anything that's sort of there or higher, we'll get some protection from both of those positions.

當然。因此，需要明確的是，在該頁面上，Ken，您將看到 67 億美元增量的付費固定掉期。這些措施的目的是為更高的利率提供一些 AOCI 保護。然後終止 2024 年 75 億美元的固定工資掉期，我們現在顯然已經討論了幾個季度了。這樣做實際上也是為了防範更高的利率、更高利率的前景，或者正如我們所說的，利率仍然高於遠期曲線，遠期曲線現在相對平坦，直到24 年，但後端有一些削減。因此，任何存在或更高的東西，我們都會從這兩個位置得到一些保護。

I would think about it in terms of reducing our kind of NII at risk to higher rates kind of by half to a staged 200-basis-point rise. So kind of an extreme scenario, but we're kind of reducing that liability sensitivity there just to protect both capital and earnings.

我會考慮將我們面臨更高利率風險的NII減少一半，直到分階段上升200個基點。這是一種極端的情況，但我們正在降低責任敏感性，只是為了保護資本和收益。

Okay. So I guess I'm just trying to figure out with all of that, your outlook for stable NII for -- over third, we've got the -- the RWA reduction is kind of working against that. And then I guess -- and then we have the slide you gave us on maturities. Are these new adds also incremental in the fourth to your -- and helping your fourth quarter forecast?

好的。所以我想我只是想弄清楚所有這些，你對穩定 NII 的前景——超過第三，我們已經得到了——RWA 的減少有點與此相反。然後我想 - 然後我們有你給我們的關於到期日的幻燈片。這些新增加的內容是否也會在第四季增加並幫助您的第四季預測？

So if I think about the NII fourth versus third can -- the swaps and treasuries maturing, which we've talked about. And the -- think about like if rates don't change, the swap terminations won't have a huge impact versus what we've already shared. It's really protection gets rates going up. The payers will add a little bit of NII because we're picking up a little bit of incremental positive carry there and then you'll see the benefit of a pull-through in the quarter of lower wholesale borrowings.

因此，如果我考慮一下國家資訊基礎設施的第四個與第三個可以——互換和國債到期，我們已經討論過。想想看，如果利率不變，掉期終止不會對我們已經分享的產生巨大影響。這確實是一種保護，可以提高費率。付款人將增加一點NII，因為我們在那裡獲得了一點增量正利差，然後你會看到批發借貸較低季度的拉動帶來的好處。

Got it. Okay. All right. Perfect. And...

知道了。好的。好的。完美的。和...

And all of that incorporates, I think this is, sorry, implicit or maybe explicit in your question. It all incorporates the RWA reduction and the loan reduction specifically that we talked about.

抱歉，所有這些都包含在您的問題中，這是隱含的或可能是明確的。這一切都包括我們具體討論的 RWA 減少和貸款減少。

Understood. And the last just one is just -- so we're going to get that treasury book runoff. Any updated thoughts in terms of what you do with the rest of the securities portfolio? Will that continue to just cash flow down as well over time?

明白了。最後一個是－所以我們將獲得國庫帳簿徑流。關於您如何處理證券投資組合的其餘部分，有什麼最新的想法嗎？隨著時間的推移，現金流會繼續下降嗎？

Yes. So we're seeing about anywhere, just call it, roughly $1 billion of cash flow per quarter coming out of that book. We've used some of that sort of through the course of this year as cash and just short-term liquidity, just given some of the things that have happened. You'll see us start to deploy that back into the portfolio in a variety of different ways, but really focused on bringing the duration of that overall portfolio down.

是的。因此，我們在任何地方都看到，每季大約有 10 億美元的現金流來自這本書。考慮到已經發生的一些事情，今年我們已經使用了其中的一些作為現金和短期流動資金。您將看到我們開始以各種不同的方式將其重新部署到投資組合中，但真正專注於縮短整個投資組合的持續時間。

And the next question is from Gerard Cassidy from RBC.

下一個問題來自加拿大皇家銀行的傑拉德·卡西迪。

Chris, you were very emphatic about the strength of the credit book for KeyCorp, which is great. Can you guys share with us the second derivative risk? And what I mean by that is maybe some of the non-depository competitors or even depository competitors in your footprint or franchise, maybe taking undue risk, and you may have a customer that borrows from them as well that could then impact your credit quality. Do you know if the competitors are being more rational than in prior cycles, which would obviously have an impact on everybody not just KeyCorp?

Chris，您非常強調 KeyCorp 信用簿的實力，這非常棒。可以跟我們分享一下二階衍生性商品的風險嗎？我的意思是，您的足跡或特許經營權中可能有一些非存款競爭對手，甚至是存款競爭對手，可能承擔不當風險，並且您可能有一個客戶也向他們借款，這可能會影響您的信用品質.您是否知道競爭對手是否比之前的周期更加理性，這顯然會對每個人產生影響，而不僅僅是 KeyCorp？

Well, thanks for your question. Unfortunately, I think because there is excess capacity in the loan market in general, I don't think you're seeing the kind of increase in spreads that you would expect to see at this point in the cycle in the private loan market. And I don't think you're seeing, frankly, some of the changes that you would expect to see broadly in terms of structure. So I think -- and as you know, I've said many, many times, on a risk-adjusted basis, a properly graded stand-alone credit rarely returns its cost of capital. So if I'm right about that, by definition, a lot of that stuff, in my opinion, is underpriced.

嗯，謝謝你的提問。不幸的是，我認為由於貸款市場總體產能過剩，我認為您不會看到私人貸款市場週期中此時出現的利差增加情況。坦白說，我認為您沒有看到您期望在結構方面廣泛看到的一些變化。所以我認為——正如你所知，我已經說過很多很多次了，在風險調整的基礎上，適當評級的獨立信貸很少能收回其資本成本。因此，如果我的觀點是正確的，那麼根據定義，在我看來，很多東西的價格都被低估了。

Now the other thing that we are seeing, obviously, and we have great visibility in, is our third-party commercial loan servicing business, where we have over $640-some-odd billion that we service, but we have over $200 billion that is special servicing. So that's where we're servicing. Basically, we're the workout agent for very complex deals that we're not a part of. And that business has already set a record for the year at this point in the cycle. So that gives you a little bit of an insight into what's going on out there. Clark, would you add anything to that?

現在我們看到的另一件事，顯然，我們有很大的知名度，是我們的第三方商業貸款服務業務，我們服務的金額超過 640 億美元，但我們有超過 2000 億美元特殊服務。這就是我們服務的地方。基本上，我們是我們不參與的非常複雜交易的鍛鍊代理。在周期的此時點，該業務已經創下了今年的記錄。因此，這可以讓您對外面發生的事情有一些了解。克拉克，你能補充一下嗎？

Yes, just maybe a couple of things. One, Gerard, I think among banks and it'd be consistent with all the comments we've made about managing relationships, you'll see all of us kind of defending our best relationships on the credit side, but it's with additional business that comes with that to make those relationships hurdle, to Chris' point, about stand-alone credit. So again, I think the banks are being rational broadly, but defending their best relationships, as you would expect.

是的，也許只是幾件事。一，傑拉德，我認為在銀行中，這與我們對管理關係所做的所有評論是一致的，你會看到我們所有人都在信貸方面捍衛我們最好的關係，但更多的業務克里斯認為，隨之而來的是，這些關係在獨立信用方面構成了障礙。再說一次，我認為銀行總體上是理性的，但正如你所期望的那樣，它們正在捍衛自己最好的關係。

If you think about the third-party nonbank credit market, I would just -- I'd make maybe a retrospective comment and a prospective comment. Looking backward, I think there's been a lot of credit that's gone outside the bank market. The question, I think, which is sort of embedded in yours is, do some of those kinds of call it, just for the sake of argument, nonbank or Fintech-originated loans sit on bank balance sheets? That would be a question we should be asking broadly. We do not, at key, have much, if any, of that business.

如果你考慮第三方非銀行信貸市場，我可能會做出回顧性評論和前瞻性評論。回顧過去，我認為有大量信貸流向了銀行市場之外。我認為，你心中固有的問題是，出於爭論的目的，其中一些人是否會稱其為非銀行貸款或金融科技貸款出現在銀行資產負債表上？這將是我們應該廣泛詢問的一個問題。關鍵的是，我們沒有太多（如果有的話）這項業務。

The second piece would be around the perspective, which is some of the capital rules are obviously making the private credit funds engage in conversations about flow agreements and taking credit over time. That is yet to be written, but clearly, there's a lot of conversation and activity there.

第二部分是圍繞著這樣的觀點，即一些資本規則顯然正在使私人信貸基金參與有關流量協議和隨著時間的推移獲取信貸的對話。雖然還沒寫完，但顯然，那裡有很多對話和活動。

Very good. And then as a follow-up question, Clark, on the hedging strategy, you've given us a lot of detail. And we all acknowledge forecasting interest rates is very difficult. In fact, I find it very interesting, if you go back to the Federal Reserve's June 21 dots forecast for the Fed funds rate, at the end of '23, they were forecasting a 0.625 Fed funds rate. They missed it by 500 basis points. So my question for you guys, the long tail risk, what is that for next year? Everybody sees you've been very clear about the benefits but the net interest income on an annualized basis, first quarter '25, everybody sees that. What could go wrong? Or what's that long tail risk that we need to just keep our eyes on, or you guys are keeping your eyes on?

非常好。克拉克，作為後續問題，關於對沖策略，您向我們提供了許多細節。我們都承認預測利率非常困難。事實上，我覺得這很有趣，如果你回顧一下聯準會 6 月 21 日對聯邦基金利率的預測，在 23 年底，他們預測聯邦基金利率為 0.625。他們錯過了 500 個基點。所以我想問你們的問題是，明年的長尾風險是什麼？每個人都看到你對收益非常清楚，但是按年化計算的淨利息收入，25 年第一季度，每個人都看到了。可能會出什麼問題？或者我們需要密切關注的長尾風險是什麼，或者你們正在密切關注？

Yes. It's probably a couple of versions. But if you think right now, kind of we are asymmetrically at risk to higher rates. And so we are very contemplative of what happens when rates go up because as the treasuries and swaps mature, it's still -- there's still a time component, right? So you feel that the cost immediately and the yield sort of pull through. We are contemplating things like a stagflation scenario, right, where it's -- the macroeconomy is a little softer and you have higher rates. I think often, we assume weaker economy rates come down. There are obviously scenarios where that's not the case.

是的。應該是幾個版本吧但如果你現在想一想，我們會不對稱地面臨更高利率的風險。因此，我們非常仔細地思考利率上升時會發生什麼，因為隨著國債和互換的成熟，仍然存在時間成分，對吧？所以你會覺得成本和收益立即解決了。我們正在考慮諸如滯脹情景之類的事情，對吧，宏觀經濟有點疲軟，利率更高。我認為，我們經常假設經濟疲軟，利率會下降。顯然，有些情況並非如此。

So we're just trying to think through all the implications of that and the levers and sensitivities that we have to address that. I think the other piece over time, and we've talked -- we used to talk more about this before 2023, which was, rates come down quickly as these things are repricing, and can we ensure that we're getting the right repricing characteristics when the treasuries and swaps mature? We've talked to that around the hedging we've done for '23. And obviously, we have other significant advantages right now if rates were to come down rapidly.

因此，我們只是試圖思考這個問題的所有影響，以及我們必須解決這個問題的槓桿和敏感度。我認為隨著時間的推移，我們已經討論過另一件事——我們在2023 年之前經常討論這個問題，即隨著這些東西重新定價，費率會迅速下降，我們能否確保我們得到正確的重新定價國債和掉期產品成熟時有何特色？我們已經圍繞著 23 年所做的對沖討論了這一點。顯然，如果利率迅速下降，我們現在還有其他顯著優勢。

So we're thinking about that broad range of conditions, Gerard, and we're trying to project our best view of it, but we're certainly making sure we're prepared for different trajectories.

因此，傑拉德，我們正在考慮廣泛的條件，我們正在努力提出最好的看法，但我們當然要確保為不同的軌跡做好準備。

And Clark, on the comment about rates coming down more rapidly, which is a good way -- I mean, I'm glad you guys are thinking about that, that doesn't seem likely. But if it did happen, would your funding costs deposit rate, do you think, would they fall as quickly as what would happen on the asset side of the balance sheet from your guys' experience? Or would they lag?

克拉克，關於利率下降更快的評論，這是一個好方法 - 我的意思是，我很高興你們正在考慮這一點，但這似乎不太可能。但如果真的發生了，你的資金成本是否會降低存款利率？根據你們的經驗，它們是否會像資產負債表資產方面發生的情況一樣迅速下降？或者他們會落後嗎？

So the nice thing on the way down from the commercial deposit book, which I know you know, Gerard, but it's sort of $55-ish billion was $33 billion pre-pandemic. So it's pretty meaningful for us. A lot of that's indexed. So it will move when rates move. Now they're not all indexed at 100%, so you'd have to take that into account. But that stuff tends to move as the market moves. And I think that's a positive. What's always tougher to predict is the consumer book, which obviously was a little sticky going up, and it generally is a little sticky coming down, and I think that will be as much a function of micro market and micro competitive environment. So how are people thinking about those and other sources of funding?

因此，在商業存款簿上減少的一件好事是，我知道你知道，傑拉德，但它大約是 55 億美元，在大流行前是 330 億美元。所以這對我們來說是非常有意義的。其中許多都已編入索引。因此，當利率變動時，它也會變動。現在它們並未全部被 100% 索引，因此您必須考慮到這一點。但這些東西往往會隨著市場的變化而改變。我認為這是積極的。總是更難預測的是消費者書籍，它顯然有點黏性上升，而且通常有點黏性下降，我認為這將是微觀市場和微觀競爭環境的函數。那麼人們如何看待這些和其他資金來源呢？

If rates do come down quickly, it does tend to make people being sort of the industry broadly, think about wholesale funding differently, so you might see more relief on deposits that would cause the consumer to follow faster. But the pace at which consumer beta has come down is always the question there.

如果利率確實迅速下降，這確實會讓人們對整個行業產生廣泛的興趣，以不同的方式思考批發融資，因此您可能會看到存款得到更多的緩解，從而導致消費者更快地跟進。但消費者貝塔值下降的速度始終是個問題。

The next question is from the line of John Pancari from Evercore.

下一個問題來自 Evercore 的 John Pancari。

On the expense outlook, I just want to see if you could give us a little bit more color. I know third quarter came in a little bit above expectations and some of that is on fee revenue. But as you look at fourth quarter end, your flat expectation for 2024, can you maybe talk about the puts and takes there? Like what are some of the areas where you could see pressure? And where do you really see an opportunity to pull back and keep the number stable?

關於費用前景，我只是想看看您能否給我們更多的資訊。我知道第三季的業績略高於預期，其中一部分來自費用收入。但當你看到第四季末時，你對 2024 年的預期持平，你能談談那裡的看跌期權和拿股嗎？例如哪些領域你會感受到壓力？您在哪裡真正看到了減少並保持數字穩定的機會？

Sure. So let me just hit the third quarter for a second, John, because I just want to clarify it. So we came in a little bit high, as you mentioned. I would just point to kind of about $20 million of onetime costs in that -- in the quarter related to a legal reserve build, at least a settlement that came in late in the quarter and then some elevated medical claims. I think net of those, we were sort of consistent with the relatively stable guidance. The core in fourth quarter, we think, will be consistent there as well, again, relatively stable. Just to reiterate kind of pointing out a couple very or a few very identifiable one-timers, namely FDIC assessment should it come through, some additional expense management-related charges and a pension charge. So relative or net of those, we feel like it will be stable.

當然。約翰，讓我先講第三節，因為我只是想澄清一下。所以正如你所提到的，我們的排名有點高。我只想指出大約 2000 萬美元的一次性成本——在本季度與法定儲備金建設相關，至少在本季度末達成和解，然後是一些更高的醫療索賠。我認為扣除這些因素後，我們與相對穩定的指導是一致的。我們認為，第四季的核心也將保持一致，相對穩定。只是重申一下，指出幾個非常或幾個非常明顯的一次性費用，即 FDIC 評估（如果通過）、一些額外的費用管理相關費用和退休金費用。因此，相對或扣除這些因素，我們認為它將是穩定的。

The big move also in the quarter was around personnel, and that was primarily driven by the change in stock price. So that is a variable. But the work that we did earlier in the year, as Chris referenced, kind of at the beginning of the year, getting '23 flat and some of the work we're doing in anticipation of making '24 flat aside from the charges we take will provide a little bit of tailwind on expenses in the quarter. And we continue to push hard on real estate and things like third-party contracts, which we historically have talked to, but we're moving more and more away from third parties and more focused on using our own folks to do the work we're doing. So we think we have that circled. And there's obviously always surprises that can come through, but we feel pretty good about the core stability.

本季的重大變動也與人員有關，這主要是由股價變動推動的。所以這是一個變數。但是，正如克里斯所提到的，我們在今年早些時候所做的工作，就是在年初，實現了“23 平”，以及我們正在做的一些工作，除了我們收取的費用外，還預計使“ 24”平將為本季的支出提供一點推動力。我們繼續大力推動房地產和第三方合約之類的事情，我們歷史上曾與之交談過，但我們越來越遠離第三方，更專注於使用我們自己的人來完成我們的工作。正在做。所以我們認為我們已經圈出了它。顯然，總是會有驚喜發生，但我們對核心穩定性感覺非常好。

And that real estate rationalization in the third-party contracts, are they the main areas of opportunity as you look at 2024 as well?

第三方合約中的房地產合理化也是您展望 2024 年的主要機會領域嗎？

There will be, as Chris said, as you kind of shrink the balance sheet, you do have to shrink the expense base and our largest cost is personnel. So there will, of course, be some personnel related to that. But we are starting to understand the trajectory of in-office now, and I think we're going to be even more aggressive than we have been about real estate positioning, and third -- again, those third-party contracts. So I would view it as meaningful pieces of all 3 of those. But certainly, people will be part of it.

正如克里斯所說，當你縮小資產負債表時，你確實必須縮小開支基礎，而我們最大的成本是人員成本。當然，會有一些與此相關的人員。但我們現在開始了解在任的軌跡，我認為我們在房地產定位方面將比以往更加積極，第三，同樣是那些第三方合約。所以我認為它是這三者中有意義的部分。但可以肯定的是，人們將成為其中的一部分。

And John, it's Chris. We'll continue to work across the board on all of these things. We're down from an FTE perspective, in the last year, about 900 people, teammates. And so as we continue to focus on simplifying our business, streamlining our business, being a smaller, simpler, more profitable company, we'll have more to say on that in the -- after we wrap up the fourth quarter.

約翰，是克里斯。我們將繼續在所有這些事情上進行全面工作。從 FTE 的角度來看，去年我們的員工人數減少了約 900 人，包括隊友。因此，當我們繼續專注於簡化我們的業務，精簡我們的業務，成為一家更小、更簡單、更盈利的公司時，我們將在第四季度結束後對此有更多的說法。

Got it. All right. Chris, if I could just ask one last one. On the commercial portfolio, Shared National Credit, sorry if I missed this, but have you sized up the size of that Shared National Credit book? And then what portion of that you are a lead agent?

知道了。好的。克里斯，我可以問最後一個問題嗎？關於商業投資組合，共享國家信用，抱歉，如果我錯過了這一點，但是您是否已經確定了共享國家信用簿的規模？那麼您是其中哪一部分的首席代理人？

So we've never given numbers around the SNC book. Everyone obviously just got their SNC results. And I can tell you in all my time in this business, our results were the absolute best we've ever had, but we've never disclosed the numbers in terms of dollars or amounts.

因此，我們從未給出過 SNC 書籍中的數字。顯然每個人都剛收到 SNC 結果。我可以告訴你，在我從事這個行業的所有時間裡，我們的業績絕對是我們有史以來最好的，但我們從未以美元或金額的形式披露過這些數字。

Okay. Any plans to?

好的。有計劃嗎？

No. We really hadn't. It's just something that we haven't disclosed in the past. But as I said, we just got our results back, John, and just very, very pleased with them.

不，我們真的沒有。這只是我們過去沒有透露過的事情。但正如我所說，約翰，我們剛剛收到結果，並且對結果非常非常滿意。

The next question is from the line of Manan Gosalia from Morgan Stanley.

下一個問題來自摩根士丹利的 Manan Gosalia。

On the RWA reduction, it sounds like you're saying $10 billion down is the right level, and you don't see the need to do any more next year. But does that mean you can grow next year? And can you lean into loan growth a little bit in certain areas? And if so, does the level of rates and the tenure matters, right? So if the tenure moves higher from here, does that mean you have to do a little bit more on the RWA side? Or does that not really matter?

關於 RWA 的削減，聽起來你是說削減 100 億美元是合適的水平，而且你認為明年沒有必要再做更多的事情。但這是否意味著你明年就能成長？您能否在某些領域稍微增加貸款成長？如果是這樣，利率水準和任期是否重要，對吧？因此，如果任期從現在開始提高，是否意味著您必須在 RWA 方面做更多的事情？或者這並不重要？

So it's a great question. When I was answering Erika's question -- it's Chris. When I was answering Erika's question, we're not going to be leaning into RWA reduction in the manner that we have this year. But make no mistake, we will continue to go through every portfolio we have and rationalize our RWAs because that's the raw material for us to also be expanding our client base. So we're not done on the RWA side. The point I was trying to make is, at this point in our -- in the cycle, we're going to be doing both.

所以這是一個很好的問題。當我回答艾莉卡的問題時——是克里斯。當我回答 Erika 的問題時，我們不會像今年那樣傾向於減少 RWA。但毫無疑問，我們將繼續審查我們擁有的每個投資組合，並合理化我們的 RWA，因為這是我們擴大客戶群的原材料。所以我們在 RWA 方面的工作還沒結束。我想說的一點是，在我們的周期中的這一點上，我們將同時做這兩件事。

Got it. Okay. And then as we think about cash and liquidity levels, I think you noted there might still be some more room to bring down cash a little bit. A lot of your peers seem to be building cash quite meaningfully this quarter. So how are you thinking about the right levels of liquidity? Is it just a function of if you might be replacing the maturing treasuries with cash or with other low-duration treasuries? And what's the right level do you think you need to hold right now?

知道了。好的。然後，當我們考慮現金和流動性水平時，我認為您注意到可能還有更多的空間來稍微減少現金。本季度，許多同業似乎都在相當有意義地累積現金。那麼您如何考慮適當的流動性等級？這是否只是您是否可能用現金或其他低久期國債替換到期國債的函數？您認為現在需要保持多少水平合適？

Yes. Good question. So historically, Manan, we would have been kind of $2 billion on any given day. I think we went to as high as $11 billion or $12 billion this year in the kind of $6 billion, $7 billion, $8 billion range in the quarter. I think we'd migrate that down to 4 to 5 over time. But your view on as treasuries mature, holding those in cash or a shorter duration treasury portfolio is the right way to think about it.

是的。好問題。從歷史上看，Manan，我們在任何一天的收入都會達到 20 億美元。我認為今年我們的銷售額高達 110 億美元或 120 億美元，本季的銷售額為 60 億美元、70 億美元、80 億美元。我認為隨著時間的推移，我們會將其減少到 4 到 5 個。但您認為，隨著國債成熟，持有現金或期限較短的國債投資組合是正確的思考方式。

Our next question is from the line of Matt O'Connor.

我們的下一個問題來自馬特·奧康納。

I wanted to follow up on expenses on a couple of things. I guess, first, what's the base of expense for this year that you're trying to keep flat to because you have some items coming in 4Q, called out from this quarter and obviously had some in 1Q as well. So what's the base as we think about flat cost for '24 that you're targeting?

我想跟進幾件事的費用。我想，首先，您試圖保持不變的今年費用基礎是多少，因為您有一些項目在第四季度進入，從本季度開始，顯然在第一季也有一些項目。那麼，當我們考慮您的目標 '24 固定成本時，基礎是什麼？

I would think the range of kind of $4.4 billion, Matt.

我認為這個範圍約為 44 億美元，Matt。

Okay. That's helpful. And then the pension settlement charge just for modeling purposes. I know that's ex the guidance for 4Q, but how much do you expect that to be?

好的。這很有幫助。然後退休金結算費用僅用於建模目的。我知道這是第四季度的指導，但您預計會是多少？

We said 15 million to 20 million in that range.

我們說這個範圍內有 1500 萬到 2000 萬。

Okay. Sure I missed that. And then just lastly, anything on the criticized loans. Not everybody disclosed this, but you've got a slide in your deck that shows it, and it's bumped up a couple of quarters in a row here. Is that just kind of normal progression? Or what would you call out there?

好的。當然我錯過了。最後，關於受到批評的貸款的任何事情。並不是每個人都披露了這一點，但你的幻燈片中已經有一張幻燈片顯示了這一點，而且它已經連續幾個季度上漲了。這只是正常的進展嗎？或者你會在那裡喊什麼？

That's just -- Matt, that's us just very critically grading our portfolio. There'd be a few categories in there as we look through it. Transportation would be one. Health care would be another. There's some consumer product-type businesses there, but we take a fair amount of pride and Mark Midkiff is here in the room with us, really going through the fine-toothed comb. I don't think there's any additional loss content there. But at this point, the cycle and you start looking at anyone that has floating rate debt, I think you need to look at that pretty critically. So that's really the genesis of it going from 3.3% to 3.9%.

這就是——馬特，我們只是非常嚴格地對我們的投資組合進行評級。當我們瀏覽它時，其中會有幾個類別。交通就是其中之一。醫療保健將是另一個。那裡有一些消費品類型的企業，但我們非常自豪，馬克·米德基夫和我們一起在房間裡，真正進行了仔細的梳理。我認為那裡沒有任何額外的損失內容。但在這一點上，這個週期，你開始關注任何擁有浮動利率債務的人，我認為你需要非常批判性地看待這一點。這就是從 3.3% 上升到 3.9% 的真正根源。

Our next question is from Ebrahim Poonawala from Bank of America.

我們的下一個問題來自美國銀行的 Ebrahim Poonawala。

Just want to have a quick follow-up, Clark, for you. So I guess going back to some of the discussion you had with Ken. When we look at the $46 million in NII that's going to come in from the roll-off in the fourth quarter, your NII guidance is flat. So ex that $46 million NII would be down 5% quarter-over-quarter. Just -- and I appreciate there are a bunch of moving pieces. As we think about the core level of NII beyond fourth quarter, RWA optimization, deposit repricing, like what's your expectation for those deposits -- for NII, sorry? Does that NII hold flat, or do you still expect that NII just on a core basis to drift lower?

克拉克，我只想為您快速跟進。所以我想回到你與肯恩進行的一些討論。當我們查看第四季度將產生的 4600 萬美元 NII 時，您的 NII 指導值持平。因此，4,600 萬美元的 NII 將環比下降 5%。只是——我很欣賞其中有很多令人感動的部分。當我們思考第四季度之後的 NII 核心水平、RWA 優化、存款重新定價時，您對這些存款的期望是什麼 - 對於 NII，抱歉？ NII 是否持平，或者您仍然預計 NII 僅在核心基礎上會下降？

Yes. So -- and when you say a core basis -- sorry, just I want to make sure I understand the question...

是的。所以——當你說核心基礎時——抱歉，我只是想確保我理解這個問題...

If we remove the lift from the Slide 9 that you have from the swaps and the treasury maturities, if we didn't have that, what, in your view, would NII do through the next few quarters?

如果我們取消掉期和國債到期日帶來的幻燈片 9 的提升，如果我們沒有這些，在您看來，NII 在接下來的幾個季度會做什麼？

I got it. Well, so not to be picking word choices, but I would say the core is actually without those positions. The underlying business is reflected there so I just -- that's an important, I think, quality of business point to make. But I think you're right on puts and takes. And obviously, if rates -- using the forward curve, if rates were to stay flat, we have seen already in the kind of second quarter to third quarter trajectory, deposit pricing has slowed. I think [NIB,] while running off still a bit, is stabilizing. So you'll still see some drift in those deposit costs.

我得到了它。好吧，所以不要選擇詞語，但我想說核心實際上沒有這些位置。那裡反映了基礎業務，所以我認為這是一個重要的業務品質問題。但我認為你對看跌期權的看法是正確的。顯然，如果利率——使用遠期曲線，如果利率保持平穩，我們已經在第二季到第三季的軌跡中看到，存款定價已經放緩。我認為 [NIB] 雖然仍有一點下滑，但正在穩定下來。因此，您仍然會看到這些存款成本存在一些偏差。

I think the places where -- and obviously, we're continuing to shrink the loan book a little bit. So those create some headwinds. As we did say, though, we are moving aggressively to reduce wholesale funding costs as well, and those are obviously, relative to deposit costs generally higher. So that will provide a little bit of relief against those -- the trends that you're talking about. So I would focus more on what do we think the core business is doing from a performance standpoint, which we would view without those swaps and treasuries.

我認為，顯然，我們正在繼續稍微縮減貸款規模。因此，這些會帶來一些阻力。不過，正如我們所說，我們也積極採取行動降低批發融資成本，而這些成本顯然相對於存款成本普遍較高。因此，這將為您所談論的這些趨勢提供一點緩解。因此，我會更專注於我們認為從績效角度來看核心業務正在做什麼，如果沒有這些掉期和國債，我們會看到這一點。

We did say at or near the bottom on NII, I feel good about that again, assuming the forward curve, but one hesitation I have on that, honestly, Ebrahim, is first quarter, as you know, has one fewer day which has some impact and always has seasonality in deposit balances. So if you go back a decade, other than 2021, which was an anomaly for pandemic-related reasons, we've always been down kind of 1% to 3% of deposit balances in the first quarter. So those are the components we're working through, and we'll have a cleaner view on '24 when we guide on the fourth quarter call.

我們確實說過，在NII 的底部或接近底部的地方，我再次對此感覺良好，假設遠期曲線，但老實說，易卜拉欣，我對此有一個猶豫，就是第一季度，如你所知，少了一天，這有一些影響，並且存款餘額始終具有季節性。因此，如果你回顧十年，除了 2021 年（由於大流行相關原因而出現異常）之外，我們第一季的存款餘額一直下降 1% 到 3%。這些就是我們正在研究的組成部分，當我們指導第四季度電話會議時，我們將對 24 年有更清晰的看法。

So that's helpful. All I'm trying to get to is, if you're at $920 million in the fourth quarter, the roll-off should take that $900 million to $1.1 billion, something in that vicinity. And I'm just trying to think what would be the mitigants to getting to a $1.1 billion quarterly NII by the end of next year. But that is good color.

所以這很有幫助。我想說的是，如果第四季的營收為 9.2 億美元，那麼滾降的規模應該為 9 億至 11 億美元，大約在這個範圍內。我只是在想，到明年年底，季度 NII 達到 11 億美元的緩解措施是什麼。但這個顏色很好。

Our next question is from Bill Carcache from Wolfe Research.

我們的下一個問題來自 Wolfe Research 的 Bill Carcache。

I wanted to follow up on the points you've made around the NII opportunity from repricing. There's a debate around the possibility to add some of the upside from the repricing of the swaps and the securities could be offset by the need to further reduce RWA levels beyond that $10 billion level that you've highlighted. And I think you've talked around some of the surrounding points, but maybe if you could speak to that, specifically, that would be helpful.

我想跟進您圍繞重新定價的 NII 機會提出的觀點。關於互換和證券重新定價帶來的一些上行空間的可能性存在爭議，這可能會被進一步降低 RWA 水平（超出您所強調的 100 億美元水平）的需要所抵消。我認為您已經討論了一些相關問題，但如果您能具體談談這一點，也許會有所幫助。

Yes. So maybe just to clarify so that we're all talking about the same thing. That Page 9, I believe, which we've shared a few quarters in a row now, just to make sure, right, that is focused on specifically the impact from the treasuries and the swaps. So as we've said before, there are other components when rates go up and that improves, there are obviously funding pressures as well that come in. And conversely, when rates come down and these numbers look a little lower, there's funding pressure relief. So I just want to make sure that we are isolating the thing that we're talking about.

是的。所以也許只是為了澄清，以便我們都在談論同一件事。我相信，我們已經連續幾個季度分享了第 9 頁，只是為了確保它專門關注國債和互換的影響。因此，正如我們之前所說，當利率上升並且情況有所改善時，還有其他組成部分，顯然也會出現融資壓力。相反，當利率下降並且這些數字看起來略低時，融資壓力就會緩解。所以我只是想確保我們正在隔離我們正在談論的事情。

As it relates to this pool, Bill, this is obviously hedging a portion of the loan book and not all of the loan book. So even if we reduce loans, we expect we would see the benefits here, but there are obviously NII pressures if we were to continue to reduce the loan book beyond what we've talked about. Does that answer your question?

由於它與這個池相關，比爾，這顯然是對沖貸款帳簿的一部分，而不是全部貸款帳簿。因此，即使我們減少貸款，我們預計也會看到好處，但如果我們繼續減少超出我們所討論的貸款規模，顯然會面臨NII壓力。這是否回答你的問題？

Understood. No, that is helpful. If I may, separately, I wanted to ask if you have a -- feel like you have a good handle on Key customers that had put on swaps where we were still in a low rate environment and are now going to be facing pressure from rates resetting higher. Just any color that you can give on that dynamic. I know that credit metrics are very good, but I guess, any color on that dynamic across your commercial portfolio, and to the extent that you feel that's contemplated in the allowance that would be great.

明白了。不，這很有幫助。如果可以的話，我想問一下，您是否覺得您對關鍵客戶有很好的處理能力，這些客戶在我們仍處於低利率環境下進行了掉期交易，現在將面臨利率壓力重置更高。您可以為該動態賦予任何顏色。我知道信用指標非常好，但我想，您的商業投資組合中的動態的任何顏色，以及您認為在津貼中考慮到的程度，都會很棒。

Yes. So there's no filth, Chris, there's no question, one of the things that we are self-focused on. This gets back to the answer that I gave around criticized -- the increase in criticized loans. We are looking at any customers that are exposed to rate increases; however, they are so exposed. And so because we have the primary relationship, we know a lot about these customers, and to the extent we have visibility on that, yes, we are looking at that. And yes, it's factored into our numbers.

是的。所以，克里斯，毫無疑問，這不是污穢，這是我們自我關注的事情之一。這又回到了我在批評中給出的答案——批評貸款的增加。我們正在關注任何可能面臨利率上漲的客戶；然而，他們卻如此暴露。因此，因為我們擁有主要關係，所以我們對這些客戶了解很多，並且就我們對此的可見性而言，是的，我們正在關注這一點。是的，它已計入我們的資料中。

And the next question is from Steven Alexopoulos from JPMorgan.

下一個問題來自摩根大通的 Steven Alexopoulos。

I want to start, so on positive operating leverage, if we look at the third quarter, revenue is down 17% or so, year-over-year expense is flat. Just given the trajectory of revenue through 2023, is there any chance you could deliver positive operating leverage in 2024? And I know you said you plan to hold expenses flat. But do you feel more of a sense of urgency to do more on the expense side? I think the last time you actually delivered positive operating leverage, at least of consequence, was 2019.

我想首先，在積極的營運槓桿方面，如果我們看看第三季度，收入下降了 17% 左右，同比費用持平。鑑於 2023 年的營收軌跡，您是否有機會在 2024 年實現正營運槓桿？我知道你說過你打算保持開支不變。但您是否更有緊迫感，需要在費用方面做更多的事情？我認為，上一次真正實現正營運槓桿（至少是結果）是在 2019 年。

So we'll give -- as we mentioned, we're going to give guidance with respect, Steve, to 2024 when we report our fourth quarter numbers. But we do feel the urgency to continue to do more in expenses. And just to remind you, we took out $200 million of expenses in the first quarter, which is about 4%. And we are actively, right now, as I mentioned, simplifying our business. We're shrinking RWAs. We will come out with more detail in the fourth quarter. But yes, we do feel a sense of urgency to rationalize the cost base, particularly because, as I said, we're going to be a smaller, simpler company.

因此，正如我們所提到的，史蒂夫，當我們報告第四季度的數據時，我們將給予 2024 年的指導。但我們確實感到繼續在支出方面採取更多措施的緊迫性。謹提醒您，我們在第一季支出了 2 億美元，約 4%。正如我所提到的，我們現在正在積極簡化我們的業務。我們正在縮小 RWA。我們將在第四季度公佈更多細節。但是，是的，我們確實感受到了合理化成本基礎的緊迫感，特別是因為，正如我所說，我們將成為一家規模更小、更簡單的公司。

Okay. Is there any chance you think, Chris, that you do deliver positive operating leverage next year? I know we'll get more next quarter, but how are you thinking right now?

好的。克里斯，您認為明年您是否有可能實現積極的營運槓桿？我知道下個季度我們會得到更多，但你現在怎麼想？

We'll know more when we finish our planning for 2024, Steve.

史蒂夫，當我們完成 2024 年的計畫時，我們就會知道更多。

Okay. And then, separately, obviously, a lot of investor focus on your capital levels. I'm curious, given what we've seen out of the 5-year and 10-year part of the curve so far, how does that change the projected AOCI impact for year-end to what you're calling out on Slide 13 here.

好的。然後，很明顯，很多投資人分別關注你的資本水準。我很好奇，考慮到迄今為止我們從曲線的 5 年和 10 年部分中看到的情況，這將如何改變您在幻燈片 13 中呼籲的年底 AOCI 預計影響這裡。

Sorry, Steve, it's Clark. Can you just be a little clear, how does it change...

抱歉，史蒂夫，我是克拉克。你能說得清楚一點嗎，它是如何改變的......

So in other words, rates are moving up, which is working against your AOCI. You're saying to use the forward curve. I don't believe the forward curve in September contemplated the 5- or 10-year where it is. So where you're saying you'll go from negative $6.6 billion to $6.2 billion, how does that $6.2 billion change given what we've seen in the intermediate part of the curve?

換句話說，利率正在上升，這對您的 AOCI 不利。你說的是使用遠期曲線。我不認為 9 月的遠期曲線考慮了 5 年期或 10 年期的情況。那麼，如果您說將從負 66 億美元變為 62 億美元，考慮到我們在曲線中間部分看到的情況，這 62 億美元會如何變化？

Got it. I don't have that number in front of me. It's obviously up given where we're really sort of focused on the 5-year. So we are -- we have taken, as we talked about, some steps to at least mitigate that. But clearly, when rates are moving at this magnitude, you can't cover all of it. So we continue to watch that closely. We managed TCE, I think, reasonably well in the quarter, given some of those changes that you've talked about. But we're really focused on managing assuming, as Chris said, to the contemplated new capital rules and time frame, making sure that we're in a position to get our capital in the right level as things phase in and markets move. And we'll take the steps that we need to take to be compliant with those rules.

知道了。我面前沒有這個號碼。考慮到我們真正關注的是 5 年，這顯然是向上的。因此，正如我們所說，我們已經採取了一些措施來至少緩解這種情況。但顯然，當利率以如此幅度變化時，您無法涵蓋所有內容。所以我們繼續密切關注。我認為，考慮到您談到的一些變化，我們在本季對 TCE 的管理相當好。但正如克里斯所說，我們真正專注於管理假設，考慮到預期的新資本規則和時間框架，確保隨著事情的發展和市場的變化，我們能夠將我們的資本保持在正確的水平。我們將採取必要的步驟來遵守這些規則。

And at this time, there are no further questions in queue. And I would like to turn the conference back to CEO, Chris Gorman, for closing remarks. Please go ahead.

此時，隊列中沒有其他問題了。我想請執行長克里斯·戈爾曼 (Chris Gorman) 致閉幕詞。請繼續。

Again, we thank you for participating in our call today. If you have any follow-up questions, you can direct them to our Investor Relations team (216) 689-4221. That concludes our remarks. Thank you again, and have a good afternoon. Goodbye.

我們再次感謝您參加我們今天的電話會議。如果您有任何後續問題，可以直接聯絡我們的投資者關係團隊 (216) 689-4221。我們的發言到此結束。再次感謝您，祝您下午愉快。再見。

Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T Event Conferencing. You may now disconnect.

謝謝。女士們、先生們，今天的會議到此結束。感謝您的參與與使用 AT&T Event Conference。您現在可以斷開連線。