Fifth Third Bancorp (FITB) Earnings Call Transcript & Summary

Hello, everyone. And picking right back up, we are pleased to have Fifth Third joining us once again. Fifth Third has navigated the recent downturn better than most, building reserves early to get ahead of any potential credit issues, while -- and while also not losing sight of the challenging backdrop as it's rightsizing its expenses to prepare for what lies ahead. While doing this, it has continued to invest in its industry-leading technology as it looks to gain greater scale in the coming years. Here to tell us more about the Fifth Third story is CEO, Greg Carmichael. Also joining Greg are newly named President, Tim Spence; and also newly named Chief Financial Officer, Jamie Leonard. Greg is going to walk us through some slides, and then we're going to have a Q&A session. So with that, I'm going to turn it over to Greg.

Great. Thanks, Ryan, and good afternoon, everyone. I hope you're all doing well and staying healthy. We are glad to be back at the Goldman Sachs conference this year, even if it's virtually. Many of you know our new CFO, Jamie Leonard, from his previous roles as Treasurer and Chief Risk Officer. And while I know many of you aren't as familiar with our new President, Tim Spence, I believe you will be impressed with his knowledge, vision and leadership capabilities as I am. Both these promotions are well deserved, and I can't tell you how excited I'm about our future. Before going any further, I would encourage you to please review the cautionary statement on Slide 2. I will start by discussing where we are with respect to our recently announced expense actions. From there, most of my prepared remarks will focus on the current environment and where we are focusing our energies to generate long-term sustainable growth. We have taken action to reduce our annual expenses by $200 million, effective the first quarter of 2021. Almost all necessary actions are now complete, including our staffing and branch optimization, real estate savings and divestiture of our noncore businesses, such as our 401(k) record-keeping business. Streamlining the organization will enable us to focus on the areas where we have the scale to generate better returns for our shareholders. In terms of 2021 expenses, we are in the final stages of our annual planning process, which is subject to Board review and approval next week. However, we currently believe total core noninterest expenses should be down plus or minus 1% next year compared to 2020. Excluding expenses related to fee growth, our total expenses will be down plus or minus 3% next year. This incorporates continued investments to accelerate our digital transformation, investments in process automation necessary to generate the incremental $100 million to $150 million of expense savings by 2022 and other growth initiatives necessary to improve long-term profitability. Our expense actions, our continued success growing our fee-based businesses and the possibility of a normalization in revolving lines of credit make achieving positive operating leverage by the end of next year possible. Our proven experience in successfully reducing expenses while continuing to grow the bank will be instrumental in the current environment. A good example of our ability to successfully grow while maintaining expense discipline is in our Chicago market. With the MB Financial acquisition, we rationalized staffing, vendors and branches and delivered on all our expense commitments, all while generating 4% household growth and maintaining our top 3 retail deposit market share and our #2 middle-market relationship share in Chicago. On Slide 3, we provide some of the proactive steps we have taken since the pandemic to build relationships and improve engagement with our customers and employees. We are continuing to see favorable outcomes as well, growing total households by 3% compared to last year, with positive growth in every single market, reflecting healthy new account growth, combined with lower attrition rates. We were recently recognized by multiple third parties for customer experience, including being named an industry leader by Greenwich for best commercial middle-market customer experience. Now moving to Slide 4. Across the industry and at Fifth Third, customer banking and spending trends continue to evolve in response to the pandemic. From a banking transaction and engagement standpoint, the pandemic-related spike in digital channel usage has generally been sustained with 73% of all our transactions now completed digitally. In addition to deposit and other daily banking trends favoring a digital-first customer preference, we have recently launched additional capabilities that eliminate the friction associated with the traditional banking experience. This has corresponded with a more digitally active and a more loyal customer base. Some examples of these enhancements include a world-class digital deposit account opening process, AI-enabled digital messaging and end-to-end digital mortgage origination process and digital collections. Total consumer spending trends remain very favorable compared to a year ago, reflecting a generally resilient outlook in both high- and low-wage brackets due to a significant improvement in the overall employment picture, lingering benefits from the stimulus and our continued success generating household growth, which has also contributed to our strong deposit performance. As you can see from the additional consumer spending segmentations provided on the slide, areas like home improvement, general merchandise and other necessity spending remain strong, but travel-related industries continue to be meaningfully subdued. While net-net, the macroeconomic backdrop is stronger than previous expectations, there are continued indications that the recovery may play out as a K shape, with customers that are well positioned getting better and others facing significant challenges ahead. From a macroeconomic perspective, the uncertainty predicting the time needed to bridge us to post-virus world, determining which trends are temporary versus permanent and understanding what the next stimulus package looks like will likely continue to weigh on many commercial clients' immediate growth plans. Our clients' ability to successfully access the capital markets, their lower capital expenditures and inventory levels, PPP proceeds and other policymaker actions to increase market liquidity have resulted in our clients remaining extremely liquid on average. Core deposit balances continue to grow to record levels, with about 75% of the growth since the beginning of the year attributable to commercial clients. This has also dramatically influenced commercial revolver utilization rates, which likely is a bit skewed for Fifth Third relative to peers given our heavier mix of large corporate clients that are able to stabilize and adjust their business models in the COVID environment. Overall, utilization rates are currently at historically low levels at 32% compared to 36% in December of 2019 and the 48% peak we saw in early April. We are seeing the pace of pay downs begin to slow over the last few weeks, and we continue to monitor and remain actively engaged with our clients to support them in their growth plans. Moving on to Slide 5. Our strategic actions over the past several years, including our balance sheet optimization, our hedging strategies that provide long-term rate protection, our decisive expense actions and our previous credit actions to reduce risk exposures have positioned us well to exit the pandemic as a top quartile regional bank. We will continue to take prudent and proactive steps in order to generate sustainable long-term value for our shareholders. Slide 6 provides some recent examples of how we are leveraging technology to accelerate our transformation and improving the customer experience with Fifth Third. We have digitized the account opening process for virtually all core commercial and consumer products. We are providing our clients with a world-class deposit onboarding experience that is simple, fast and secure. We have also introduced our digital mortgage application platform, which guides our borrowers through a self-service interface accessible on any device. With our launch in the third quarter, approximately 75% of retail and direct applications now run through our digital channel. Messaging is another example where digital enablement has led to improved outcomes for the customer and the bank. We are able to provide customers with the flexibility to solve any issues related to their banking needs, leveraging an AI-enabled digital assistant. We also launched digital collections capabilities earlier this year, which helps customers facilitate payments, communicate via e-mail or text and enroll in hardship assistance programs. Introduction of this platform has already resulted in lower net charge-offs and lower expenses. Looking ahead, we'll be launching enhanced everyday banking digital capabilities, including additional app functionality with advanced fraud controls, algorithmic-based savings and early access to funds, all with no monthly fee. Moving on to Slide 7. As I previously mentioned, we remain focused on investing in long-term growth opportunities in our businesses. We continue to prioritize our middle-market banking expansion strategy and are extremely pleased with the success in our new markets, including California and Texas, where we have generated strong relationship growth. We continue to generate solid production from our out of footprint and middle-market offices, which include Los Angeles, Houston, Dallas, San Francisco and Greenville, South Carolina. We also continue to actively support growth in our commercial business while expanding our fee-based capabilities with a focus on industry verticals. For instance, we recently announced the acquisition of H2C. With over 40 professionals, H2C provides investment banking and strategic advisory services for health care clients. The acquisition strengthens our health care vertical and complements the health care capital markets capabilities provided by our Coker Capital team, which was added in 2018. In consumer, in addition to expanding our digital capabilities, we continue to invest in our key Southeast markets. Our next-generation branch design, new branch locations selected through our data science decision engines and our deliberate focus on providing a customer-friendly product and service offering have all helped generate top quartile household growth relative to the peers in the industry. Throughout all of our businesses, we continue to leverage a buy-partner-build approach to technology solutions. This allows us to adapt and to get to market quickly. As shown on this slide, we leverage several fintech partnerships, which enhance our customers' financial lives, while empowering our employees to be more efficient and maximize opportunities. Turning to Slide 8. We believe that a strong retail footprint remains integral to maintaining a primary consumer banking relationship. Within that framework, we continue to focus on generating smart scale in existing markets, which have significantly stronger population household income growth expectations, while reducing our legacy footprint. In fact, in the fourth quarter of 2020, we'll be opening 12 branches in our high-growth markets and subsequently closing 37 branches by the first quarter of 2021, primarily in our legacy markets. Over the past 6 years, we have reduced our footprint at a rate of 2% per year with less than 1% incremental customer attrition and a 3:1 closure to opening ratio. Moving forward, we can expect -- you can expect that we will continue to carefully evaluate the optimal size of our network given customer engagement preferences. Now I'll turn to Slide 9. We have maintained a very disciplined and a very proactive approach to credit risk management. We have built robust reserve coverage ratios with one of the highest credit reserves as a percentage of total loans. In addition to our previous actions, we are also taking further proactive measures in the current environment to improve our credit outcomes going forward. We maintain stringent geographic-, sector- and product-level concentration limits. We also monitor client exposures across our total commercial loan portfolio. As a result of our actions and disciplined client selection, we expect losses to be in the 55 to 65 basis point range next year. Additional stimulus passed by the first quarter of next year should support a loss rate in the lower end of that range. In summary, we continue to take proactive and prudent actions to allocate resources and capital appropriately. We have spent several years making our balance sheet more resilient and our revenue streams more diverse. We will put the appropriate level of prioritization and focus on the areas that have the highest probability of driving strong financial returns to generate long-term value for our shareholders in order for us to emerge from the current environment a top-performing regional bank. Now with that, Tim, Jamie and I will be happy to take any of your questions. Thank you.

Greg, maybe to kick off as a follow-up to your comment on the expenses that you gave in your prepared remarks. Since 75% of the $200 million has already been accomplished, it sounds like your degree of confidence in terms of delivering is high. Can you maybe share some specific actions you've taken in the past 90 days since your plan was originally announced? And what do you think about when considering how much of the savings will hit the bottom line versus investing in technology to drive future growth? You talked about some of these initiatives. And then second, are you still considering some split between, what you called, structural and environmental savings? And if so, how should investors think about some of these dynamics into 2021?

I'll kick off, and I want Jamie to answer this question. We spend a lot of time discussing around expenses, of course, as we think about 2021. I will tell you the actions that we've taken to get to $200 million now are virtually done, so we're 100% confident that will happen. We'll get that accomplished. In addition to that, we talked about additional investments that we're going to make in our digital capabilities to take out another $100 million to $150 million in 2022. So we're on target to do that. We know how to do that. We'll get that done. But let me turn it over to Jamie to give a little more color as to some of the actions we've taken around vendor management, branch closures and so forth. He'll shed you some color on that and then how we think about expenses next year.

Ryan, as Greg said, we feel very good about the work we've done. And in particular, your question around the last 90 days, we look at the $200 million program. It's roughly 1/2 in people and then about 1/3 in business rationalization, 1/3 in vendor and discretionary spend and about 1/3 in facilities reductions, which also includes the 37 branches that we expect to close in the first quarter of 2021. So really, the work in the last 90 days has been focused on identifying those noncore niche businesses and then executing a divestiture program. So as Greg mentioned in his prepared remarks, we've sold the 401(k) record-keeping business. And we're under contract to divest of our HSA business as well as our property and casualty insurance business. And so those should all close prior to year-end and will help fulfill the $200 million bucket of expense savings. As Greg mentioned, we do feel good about the fee income growth opportunities that we have in front of us for 2021, so we will continue to then take that $200 million and invest it in digital and technology, along with pursuing sales force expansion opportunities in California, Texas in the Southeast. And then that includes our expectation to open 30 de novo branches next year. So we still want to invest in the business, and therefore, we think we can run the expenses down 1%. And if you were to neutralize for fee growth, that number would be more like a down 3%. And we still think of it -- to the second part of your question, we still think of the expense savings as 80% structural and 20% environmental. And so that -- should things rebound, travel -- T&E, other items could grow, inflation, merit pool, et cetera. But for now, we think the down 1% to 3% is the right range for us to operate the company.

Got it. And Jamie sounded somewhat optimistic on growth across a couple of fee categories. You mentioned the difference between the gross and net expense guidance relates to fee-related impacts. One -- and one of the bright spots from low rates has been a handful of fee categories. And while COVID has masked some of this just given some of the pressures on consumer fees, I think the hope and expectation is that some of these will bounce back. So can you maybe just dig a little bit deeper as we look into 2021, what are the areas of fees that you're most excited about?

I would tell you, we've -- coming out of project North Star, one of our key tenants of project North Star was invest in our fee growth businesses -- fee-based businesses, and we've done that. We've invested in wealth and asset management. And we couldn't be more pleased with the outcomes that we're getting in that business, where we've got 80% of the fees coming out of that business now that are reoccurring fees. That's really a transformation of where we were 5 years ago. And we've expanded in other markets. We've acquired a tremendous amount of talent, and we did the acquisition of Franklin Street Partners in North Carolina. So we're really pleased and we're excited about that business and its growth expectations into next year. In addition to that, as you know, we've been focused heavily on capital markets. You've seen our capital markets line grow very aggressively. And we just added to that line with H2C acquisition we just made. That -- Coker plus H2C puts about $50 million of fees into the capital markets line for us. So those are some investments we've made. We expect to have a strong capital market share next year. And then I would think, Tim, you may want to talk about deposit fees and a few other things that are going on that we're excited about.

Yes, absolutely. So I think -- to take off where Greg left off there, I think capital markets, we're very excited about wealth management. But on the commercial side of the business, commercial payments has been a historical source of strength for the bank and an area where we are seeing the fruits from investments we've made in product innovation over the course of the past several years. So 1 in every 3 relationships that we added in the middle market this past year started with a treasury management relationship, which is not something you would have seen historically. It would have primarily been credit that was the entry point for us into new relationships. So we expect to see good growth there. And then to Greg's point, on the consumer deposit fee side of the equation, I think we are less exposed to overdraft the monthly maintenance fees as a source of revenue than many of the other regional banks. And therefore, we will see -- we are expecting to see a bounce back there. But I think more importantly, the job we've done generating primary household growth over the course of the past several years has supported fairly healthy spend volumes across both debit and credit in our consumer business.

Got it. Sticking with the fee/mortgage area, I think at a recent conference, you mentioned potentially taking action on the residential mortgage portfolio and adding mortgages to the balance sheet. Where are you with this strategy and how do you see this impacting your 4Q '20 results?

Yes. Thanks for the question, Ryan. So we've decided to balance sheet about $250 million of our fourth quarter production to help bolster the NII outlook for 2021 and beyond. We think the earn back on that decision -- given the adverse market fee that was implemented 12/1 by the GSEs, we think that earn back is inside of 2 years. And given that we're a bank that has not put much mortgage loan origination onto the balance sheet, we have some room to do it. So there'll be a little bit muted mortgage fee income results in the fourth quarter as a result of that decision. But overall, we still feel confident in our fee guide of up 7% to 8% sequentially.

Got it. So Greg, you touched upon a couple of different aspects of commercial loan growth. You hit what we've seen happen with utilization, and you also noted that pay downs are starting to slow. And as you're out on -- or on Zoom, speaking to corporate clients, I think, as you said, you're seeing certain areas that you're seeing pipelines pick up. I think you said tech, healthco -- telco, healthcare and industrials are starting to improve. What is the appetite to borrow as we move through the pandemic? And what would it take for balances to start to actually grow and level off on the commercial side? And then maybe just to tag on to it, where are you optimistic on the consumer side heading into 2021?

Yes. Good -- great question. First off, we are seeing pipelines firm up, Ryan, both in core middle market and large corp. So we're feeling pretty encouraged there. But it really bifurcated. It's the nonpandemic-related sectors, as you just mentioned, you think about the tech, telco, healthcare, industrials that we're seeing that firming up of the pipelines and more successful from a production standpoint. Line utilizations continue to be our biggest challenge, as I mentioned in my prepared remarks. If you think about our normalized run rate of 36% line utilization, for every 1%, that's $750 million for us. So we're running $4 billion in commercial outstandings under what we would run at, at a normal level, and that's off the peak of 48% in April time frame. So that's starting to slow, but that's created a lot of pressure out there. And you think about the pandemic-impacted areas, it's really a wait-and-see environment right now. Can they get through to the end of this pandemic? How effective of a distribution model we see with the virus vaccine? I mean how quickly do we get that distributed out? And we're here in the second quarter next year before it really hits the mass population. So when does business start to return to normal, especially travel-related sectors? When do people start coming back down to offices, to support some of these small businesses that support the office workforce? When do we see that? Those are a lot of questions from that sector, and there's a lot of uncertainty just on the sideline. In addition to that, they're sitting on a tremendous amount of liquidity, and we talked about that. So we expect them to bring down that liquidity level before they start to borrow. I don't know, Tim, do you want to hit on the consumer side a little?

Yes. I think the -- clearly, the bright spot of the consumer has been auto and home improvement. But with auto, in particular, for us, having been a business that we have been in for a very long time and where we have been pretty proactive about managing origination volumes depending on the margin and the risk/return in the market. So we do continue to expect very robust growth for the auto business through the rest of this year and through 2021 as well.

Greg, maybe following up a little bit. This is obviously a challenging backdrop for banks in an environment of [indiscernible] and low level of interest rates, limited -- a lot of uncertainty in the near term. But as the backdrop hopefully improves over the coming quarters and years, what type of efficiency or returns do you think Fifth Third can generate in that environment? And what are the main levers to getting us there?

Let me start off. First off, we are very bullish about the investments that we made and the way we positioned this bank. Coming through North Star, the balance sheet optimization efforts we've taken, $7 billion that we pushed out, those outcomes that we were expecting, we're seeing those. So we're very encouraged. The investments we made in our fee businesses. So when the environment does start to improve, we think we're extremely well positioned to take advantage of that. And we're also well positioned to deal with this downturn. So that, at the end of the day, I think, puts us in a good position. We start to talk about returns. When we talked about North Star, where we're looking at a similar rate environment, we said 12% to 14% ROTCE, we absolutely think we run in that range. Sub 60 efficiency ratio, absolutely doable. Positive operating leverage, if we get back to normalized line utilization, very probable. So I mean there's a lot to be excited about in the future. We just got to get to the other end of this pandemic, and I do think that's around the corner, quite frankly. I do think by the probably second quarter, third quarter, we start to see a different environment from an operating perspective. Hopefully, we see some upside on the long end of the curve that helps us significantly. But net-net, I think we're just hunkered down, focused on the things we can control, continue to invest in our business, continue to make smart decisions and position us to -- put us in a position of strength coming out of this pandemic environment. I don't know, Jamie, if you want to add anything?

Yes. And Ryan, when we look at the returns over the medium term, the 12% to 14% ROTCE, we look at it excluding the AOCI because, to your point, there are some things that are different about Fifth Third today than there were back in 2016 when we announced the similar 12% to 14% return target when -- short-term rates where they are today. So fortunately, for us, we're better hedged, better positioned. Investment security portfolio is well positioned for this low rate environment. I think the build-out in -- of our fee businesses and improved diversification of revenue is certainly a positive for the company. And the fact that we've closed on MB and able to hit our commitments and generate the benefits from the scale that, that acquisition achieved was very important. And then to the negative, from the environment, the curve is certainly flat or lower in the valley and beyond than it was back in 2016. And the credit outlook is certainly less favorable than it was back then. And loan growth prospects are more muted just given customer demand. So the balance of all of those factors, we still are confident in our ability to generate 12% to 14% returns in the medium term.

Maybe just one quick follow-up on the credit comments you made talking about 55 to 65 basis points of losses for next year. Greg, the bank has gone through a huge transition, moving out a lot of higher risk credits over the last handful of years. Can you maybe touch a little bit upon how the credit appetite has evolved? And then second, you guys have reserves of almost 2.5% at -- pretty much at the high end of the industry. Just given how high those reserves are, it sounds like you have a better view on where losses are going to be. What is it going to take for us to actually start to see reserves coming down in the coming quarters?

First off, we're a very conservative bank. And we're a very different bank than we were just a handful of years ago and how we think about credit -- our credit appetite. We do -- I think the team does a fantastic job of client selection, and it's all about client selection. You're starting to see a very different outcome in Fifth Third and consistency and quality of our earnings, charge-offs, mid- to lower than mid point of our peers. NPA is performing well. I mean you go down the list of things that we've -- the objectives we were going after, we've achieved. We feel really good about how we run our business, how we think about credit. Looking at how we manage the different sectors, different asset classes, team does a really, really good job. And we always are managing to the downside and always manage it to be good through a cycle. And the team has just done a fantastic job going forward there. If we see the second -- this next round of stimulus come out -- not second round, but next round of stimulus come out, as I mentioned before, I think we'll be at the lower end of that charge-off guidance that I just provided. And we think that stimulus is -- it will happen, and we're well positioned to hopefully manage our clients through that environment. But net-net, from a credit appetite perspective, I think the actions that we've taken over the last 5 years, pushing out the $7 billion, really focusing on the quality of the client, returns of that client, and then when we're not getting those outcomes, taking action, I think we've done a nice job in that area.

I wanted to switch gears a little bit and talk about margins and liquidity. And the banks talked about a roughly 3% normalized margin, expected to be -- the margin though is expected to be relatively stable in the near term, just given all the liquidity that you have. Can you maybe just talk about the levers you have to maintain the core margin? How long can you hold that for? And then you've been one of the banks who was at the forefront in terms of believing that a lot of this liquidity is going to be here to stay, at least for a period of time, combined with the fact that loan growth is going to take time to come back to absorb it. So just given this backdrop, how do you think about the decision to deploy liquidity in a not-so-great backdrop versus just sitting on cash and earning very little? And is there more you can do either on the liability side to absorb some of this liquidity?

Yes. We've been running $30 million to $38 million of excess cash every night for the last several months. So we certainly are flush with liquidity. It's a good problem to have. The good news is we're capturing more than our fair share of relationships and those customer cash balances. And as Tim mentioned, a lot of it driven by strong TM business. So with all that said, I think options have value. And right now, I think there's more value for us to wait for a better day and a better return on that investment. Perhaps with the change in administration, maybe there's a curve steepener event down the road, and I think that's a better opportunity and delivers better return to our shareholders. And fortunately, for us, we can afford to be patient and wait for that better day. We've included some information in the slide deck just around the positioning of the investment portfolio. Obviously, the hedges have had a lot of attention and were well executed. But the investment portfolio itself, the impact of rates just quarter-to-quarter on the total interest income in the investment securities portfolio is the best of the peers at just down 1%. And a lot of banks are very challenged in this environment with cash flows on the investments and having to reinvest at these lower entry points, and you can see that impact in the rate volume analysis. And so for us, fortunately, we have the luxury of being able to wait. And so we'd rather be prudent and wait for that steepening event to happen.

The bank has done a great job building capital. I think you're going to be at almost 10.5% by the end of the year, above -- 100 basis points above your current target, which is 150 bps above the old target. We're going to hear from the Fed in 10 days from now. And assuming that we did get the green light, what are the priorities and how aggressive can you be in terms of returning capital?

So it will be interesting on December 18. We think our balance sheet is one that can run, depending on the scenario, anywhere from 8% to 9.5% from CET 1 level. I doubt that the banking industry will be allowed to pursue capital actions perhaps as long as -- until after the CCAR 2021 exercise in June. But when that day does arrive, you can expect us to be prudent. We would certainly like to see the vaccine take hold. We'd like to have a little more certainty in credit outcomes. But as those manifest themselves, then we would look to reinitiate our buyback program. And as you said, we're running anywhere from $1 billion to $1.5 billion of excess capital in this environment.

We're coming up against the end of time, so I'll put out 1 or 2 last questions for the team to address as we run out of time. So first, you've talked a lot about leveraging technology to accelerate your digital transformation. How can you assess whether or not you're moving fast enough? And then related to that, there's obviously a huge push for scale across the industry. How do you feel you are doing in terms of scale? And then just lastly, you've obviously did the MBFI transaction last year, maybe an update there. And the management team has been -- hasn't been interested in traditional bank M&A. We've heard from a couple of others this morning that seem to be warming up to it. I guess, why not be more constructive on bank M&A to help accelerate some of these digital initiatives and scale? And if your posture did change, what would you look for? And apologies for 6 questions.

That's a good question.

I think we'd end big.

First off, from a tech perspective, and I applaud the job that Tim and his team have done really deploying our tech-enabled strategies. We have a mindset and a strategy of buy, partner, build, and that's really served us well. The strategic partnerships we've established, the technology we physically have built and some of the acquisitions that we made in technology space. So when you think about, in fact 74% -- 73% to 74% of all of our transactions now go through our digital channels. All of our lending products are now in our digital channels. The account opening process, take the picture of a back of a driver's license, you could open -- it populates everything for you, easy, simple, world-class account opening process. An end-to-end digital platform for our mortgage business, similar to what you would see with Rocket Mortgage. I mean those are the outcomes that we were expecting to get, and you can see that in the efficiency. The investments we've made in AI and serving our -- to support our customers' digital collections capabilities, so you can make a digital payment, messaging and so forth to -- from a collection perspective, all of that is now in place, and we're seeing the returns of that. And that's why we feel confident that we can accelerate another $100 million to $150 million of efficiencies by -- from those digital investments that we made. And technology is already in-house. It's already deployed. And by the way, Ryan, it's important to understand, you can't just put the new technology on top of the old technology. You had to do a lot to transform our foundational platforms to be digitally enabled and support our digital environment, moving to the cloud versus the big arm of IBM platforms. So we've done a good job in that space, and I feel really good. From a scale perspective, I think we have the scale we need. Is scale beneficial? Absolutely. Is it scale at any cost? Not -- we're not interested in that. We're interested in smart scale. So you talked about MB Financial. What did that give us? That made us the #2 core middle-market bank in the Chicago market, which is the second largest core middle-market geography in the U.S., over 6,000 and commercial clients in that market. I mean it's the third largest in retail. We're seeing 4% household growth in that market, which is outpacing the total franchise growth from a household perspective. We're seeing the outcomes we're looking for. We've been able to leverage the investments in MB Financial we made with respect to asset-based lending, leasing across our footprint. So that type of scale made sense. I mean it's relevant, an important market, gave us other functionalities and capabilities. I don't see another opportunity out there right now that does that for us that we would be interested in as we continue to evaluate options. Obviously, we would look for that. But right now, we're very comfortable in our organic growth strategy and doing bolt-on acquisitions for our fee businesses.

Got it. Well, Greg, Tim, Jamie, on behalf of myself and the client base, I just wanted to say, thank you very much for joining us today. Look forward to connecting with you in January in the earnings call, and have a happy holiday season. And hopefully, next year, we'll be back live.

Absolutely. Thanks, Brian. Take care.

Thanks, guys.