Huntington Bancshares Incorporated (HBAN) Earnings Call Transcript & Summary

Well, good morning, everyone. Good morning. Welcome to Huntington's 2022 Investor Day. I'm Tim Sedabres, Head of Investor Relations. I joined Huntington's through the merger with TCF, spent most of my career in regional banks. Knowing many of you here, I can't tell you how excited we are to welcome everyone in person, those of us in the room here as well as the many more joining us virtually on the webcast. I do want to remind everyone to review the forward-looking statements in the presentation on Slide 2 for both our prepared remarks and our Q&A today. Moving today's agenda, we got an action-packed day filled for everyone. We'll start with our Chairman, CEO and President, Steve Steinour with opening remarks and an overview of the company and our strategy. Following Steve, you'll hear from 6 of our revenue businesses across the bank. After the revenue businesses present, we'll break for our first of 2 Q&A sessions for the day. For Q&A, we'll bring up our executive team of presenters for the first, and we'll bring up the entire team for the second Q&A. After the first Q&A, we'll take a short break, and then we'll pick up the second part of the presentations for the day. Importantly, Zach will bring everything together at the end of the day from a financial outlook perspective, and Steve will close with closing remarks. Upon the last Q&A, we will host the lunch for those of us in person, we'll be on the second floor and we'll walk you downstairs. We invite everyone to join for a lunch with our management team. The list of the presenters today, our executive team as well as other presenters throughout the bank, I'm excited to hear from this bench strength of management today and all of our business groups and are joining us today. Without further ado, I'd like to introduce you to Steve Steinour, our Chairman, President and CEO.

Thanks, Tim. Thank you. Thank you very much. Thank you very much, Tim. Good morning, everyone. Just getting you warmed up for Q&A. It's still be easy in Q&A, you guys can relax now. Welcome. Welcome to all of you. It's great to see you in person. I know a number of you from the years at Huntington. Someone reminded me it's been a dozen years since we had one of these, and that's the last time we were in person together. So my wife has always said a little bit of me goes a long way. So I hope that 12-year high has worked for all of you. I think the management team here would agree, a little bit of me goes a long way. So I have over 4 decades in banking. And I started at the U.S. Treasury in an office called market analysis. It's a very interesting time in 1979 and '80 when the yield curve today looks like it's a nonevent compared to what we went through back then. I don't mean to diminish it. I went through the FDIC and then much of my career is at the large regional banks. I was in loan workout of recovery, credit and risk for a while and then graduated or got moved into business lines a couple of decades ago. And it's been a terrific pleasure for me to have come to Huntington in January 2009, and some have said, when it was a tough moment, and it was for the industry as well as Huntington, we had a few things we had to clarify and resolve. But it was also a great moment. It was a moment of opportunity. And we chose to take advantage of the opportunities, not just be a victim of the GFR. Now today, Huntington is completely different. We had to overhaul risk management in 2009 or frankly, we wouldn't be here. And we did that. And you've heard us talk about our low -- our aggregate moderate to low-risk appetite now for the last dozen years. We announced it in the September 2010, Investor Day. And we've been very disciplined about that. You get great metrics, and you can go back over the last 12 years on the consumer and other businesses and see those metrics. The discipline has been embraced by our colleagues. It's part of the culture. We'll spend time on risk management throughout the day. But our colleagues have delivered this transformational change. We're more than 3.5x the size we were since we last met. We won't do that again for the next meeting, but 3.5x, and they delivered it. So I want to pause for just a moment with an acknowledgment to them, a tip of the hat to them. Our colleagues have done a fantastic job. We assume we're going to get customer satisfaction awards across all of our business lines now. We didn't have any in 2009. It's our colleagues who've made that difference. Now I hope today you're going to leave with a clear understanding of our strategies and our vision to become the leading people-first, digitally-powered bank in the nation. We'll get into that vision, particularly throughout the morning. So with that, let's begin. Here's the pitch. I believe we are a compelling investment today. We have a culture that is deeply embedded in the company. Our colleagues have been just fantastic and aligning with our purpose of looking out for people. You'll hear more about that, too. But they act with purpose every day. They enliven the brand. They bring it forward. We could promote anything we wanted, but if we didn't deliver it, it wouldn't sustain. We've been very purposeful over the past decade about our expectations of ourselves in building that brand. I think we have a very powerful franchise, and I'm not sure it's understood. We're going to introduce you to some of the newer businesses we've been in and the growth in some of these businesses, which I think for some of you will be the first time. So that core is going very, very well, and it's now complemented by the TCF revenue synergies. We have an enormous amount of revenue, dynamic and momentum in the company right now. You've gotten to see us for the last dozen-plus years. We're very disciplined. We hold each other accountable, but we've got a strong management team, and I emphasize the word team. The teamwork within the management, the executive management sets up the OCR or deepening throughout the company. It's how we work and behave sets the tone for our expectations of our colleagues. And so we've got an exceptional management team and very uniquely, and you've heard this on the earnings calls for a dozen years, but I think now it matters. Very uniquely, we're a top 10 shareholder. And we're committed to our shareholders, many of us to retirement. So we're perfectly aligned and committed to the performance and growth of the company as we go forward. Now over the past decade, just on the spotlight, top 10 regional bank, top 25 or top 20 U.S. bank, but we have built a powerhouse Consumer Bank. We've got great market density, over 3.6 million customers. We've got high-quality consumer-deposit base. You're going to hear a lot more about that and the growth in that from Brant in a few minutes. We've got a very strong business bank. In 2009, we were number -- I think, 16 or 18 in SBA lending nationally, 16 or 18. We've been #1 for 5 years in a row, maybe 6, certainly 5. That just doesn't happen. That's a concerted effort. That's alignment. That's execution. And complementing that terrific Consumer Bank, and I do think we're one of the leading Consumer Banks in the country in our footprint, we are very, very strong on the commercial-bank side and the combination with TCF has opened up a lot of possibilities with us. Now we have these traditional, regional, commercial business lines, but we also have great, scaled, national business lines where those national lines intersect with us regionally, locally. We augment them. We bring them in. But otherwise, we run them as a national base. We are a force in many of the markets we're in, in the communities and with our customers. I'll give you an example. We have 50-plus percent share in middle market in Columbus. But if you ask our team, can they continue to grow? They'll say unanimously, of course, we can. We will continue to grow because of this presence locally and how we deliver. We've got -- all of our business lines have risk management embedded within them. That was what we did in 2009. So we've got this 13-year run of risk management embedded in the business line, supported then by Rich Pohle, who you've gotten to know over the years, and Helga Houston, our Chief Risk Officer. Our colleagues are highly, highly engaged. That's the secret sauce here. It doesn't just happen because we want it to happen. We have to find ways, and we have to engage them, so they give outstanding customer service. And we've got national recognitions more than a decade. But one of the ones that we're particularly proud of, and it hangs with our vision is our J.D. Power Award 4 years in a row, #1 mobile app -- #1 mobile app in the regional bank space. So it's this discipline and focused execution that's got us here today and is going to carry us as we go forward. Now we've accomplished a lot in the last dozen years or so, and some of this that's on the page underscores the transformation. That great Consumer Bank has been a disruptor. I can remember in 2010, when we said we're going to do 24-hour grace, it's going to cost us $35 million. You could have heard a pin drop in this room. Are you guys crazy? Why would you leave that kind of revenue on the table? That sparked our growth, but it also transitioned our colleagues. That's when they knew we meant it when we said look out for the customer. That's when these customer service awards started coming in. That's when the service score, the Net Promoter Score and other things started moving up. We put our company in alignment around looking out for the customer and all the businesses have that today. So we capitalized on early opportunities, not just on the consumer side, with Fair Play banking. Fair Play banking is a philosophy. No hidden fees, no [ got you ] make the products simple, easy to understand, look out for the customer, and they'll look out for us. Brant will share some stats about our growth at the core. That philosophy continues. It was our guiding stone, our guiding light in the past. It will continue to be. But it wasn't just about consumer or business banking with the SBA growth, it's also the commercial. Our commercial group is a force now. It's over 4x the size it was in 2010. We've got these great regional businesses, but we also have these large other businesses specialized or some of the other national businesses we've invested in like asset finance. Now we overhauled risk management in 2009. I think this is one of the most critical things we did. We established a strong company-wide risk-management culture. When we say who owns risk in the company, I better see every hand go up, I'll just leave it there. I better see every hand go up because that's the nature of our business. This has been critical to us to deliver both sustainable earnings, but to give us the confidence we have today as we go forward with some uncertainties. Now complementing all these core-growth strategies, we've got TCF. We're uniquely positioned. The TCF brought us some great new colleagues. Some are running important business lines. Others are adding enormous bench strength to the company. I don't think you knew TCF that well. This was a really good combination for us. We've got great new revenue streams as a consequence of the combination. We have new markets or expanded positions in existing markets. We're number 4 in branch density in Chicago. We're just getting started there. So love what we have, but most importantly, with our colleagues, we have over 1.5 million new customers. The Huntington business lines, product and service menu is much wider than what TCF had. So we have an enormous opportunity around deepening. We call that and referred to that in the past, OCR, optimal customer relationships. We have an enormous opportunity to build incremental revenue off that. Zach will pick it up because we're taking a revenue overlay into the future of our synergies. So we have these core revenue growth strategies. They are complemented by TCF. We believe we're very, very well positioned to drive consistent top-quartile performance through the cycle. We've been very disciplined. We knew in 2010 we had to show very differently in the next cycle, whenever that occurred, and we will. And you're seeing it this year, very low charge-off rates, increasing improvement with nonperformers, class loans, whatever the credit metrics. We've been performing throughout the year, and that's a result of this consistent aggregate moderate to low-risk appetite. Now we're winning with differentiation. I can't emphasize this enough because some of you have asked me over the years, what makes you different? We've got a lot of really good regional banks in the U.S. I know virtually all my peers and I've got a lot of respect for them. What makes Huntington different? I'm going to tell you, it's 3 or 4 important things. The culture is ingrained in our colleagues. They deliver to our expectations around service and this passion for our customers and the communities. It's a huge asset for us. Our brand has been building progressively since 2010. We didn't have a brand in 2009. We couldn't tell you what that brand stood for. We win with this local delivery model. I describe it as a force and then we infuse our other business lines, national and otherwise, into that local model where it overlaps. We leverage our technology. It's a core part of our strategies. We don't run TechDev separately. It's integrated into the business lines and the team's collaboration and cooperation have made a phenomenal success, 4 years in a row, J.D. Power #1 mobile app as an example. We have, over the last 3 years, doubled the investment in TechDev, and we're just starting to see the throughput. Paul will describe more of that later this morning. And finally, I think this combination with TCF has unlocked significant scale and growth opportunities for us. So I'm thrilled for you to hear from the management team this morning. They are the strongest and most capable group I've ever worked with. They are the strongest team I've ever worked with. They like to hear this, I'm going to repeat it. They are the strongest, most capable team I've ever worked with. And they play as a team, which is really important to us. They set the tone for the company. And I just shared with you some of the differentiation, but at the heart, it's our colleagues. It's all about our colleagues. They have cultivated who Huntington is today. They've built it. We fundamentally believe we're in a people-and-relationship business. We've always believed that. It starts with our colleagues engagement. We have a purpose within the company, and this alignment around purpose is a drive. When we talk about looking out for people, helping them lead better lives, businesses thrive and making our communities stronger, who doesn't want to do that. It's like apple pie in America. No, that's not quite where America is today. But if you roll it back a decade, that's where America was, and we're in the Midwest. So that apple pie really resonates. The purpose-driven performance is a significant area where our colleagues have embraced us, and they're making a difference. Our vision to be the leading people for us digitally-powered bank in the nation is this fusion of people and digital technology. Our colleagues do that. They build it. They extend it to our customer base. They help them solve solutions, all done with great customer service. Now a little anecdote. Somebody asked me about our ESG program. I think it was like 6 or 7 years ago, and I had no idea what it was. I think I could spell it, but that was it. We believe doing good is good business. And we've been on this track for a long time. It preceded me. Doing good is good for business where we've been looking out for our customers and communities for decades. And we just keep trying to raise the bar internally. Now earlier this year, we published our sixth ESG report, demonstrating the commitment to that once we understood what those 3 letters meant. On the environmental front, we've been focused for over a decade on reducing our impacts. We've gone with alternatives. We've eliminated plastic. We've done a whole series of things to make progress. And now we're helping our customers on that endeavor, looking out for them, consistent with that purpose. On the social side, we have a $40 billion community plan, $40 billion. We're ahead of the plan, 1.5 years, 2 years into it, and it's good business, and it helps resonate in the communities where we live and work. On the governance side, we have a very strong and active Board, active Board. They're highly engaged as well, and they help set the tone, whether it's the performance of the company, the strategies, the support for DEI efforts or other things. Our ESG principles are highly aligned with our strategies. That's why we have a AA rating from MSCI for ESG. Now this Board, I could talk for hours about them. Dave Port is the lead Director who made the mistake hiring me 13 years ago has been working closely with me ever since. And we've selected our directors based on the skills that we need today or project that we'll need in the future. This is a great Board. I'm going to profile just 3 of them, if you bear with me. Ken Fallon was the first U.S. Treasury Chief Risk Officer. He started that after being the first Chief Risk Officer of Fannie Mae. Now he's held positions, risk positions, executive positions at JPM and other regional banks as well, and he's very active today as a senior adviser at Oliver Wyman. So he gets to see the landscape in the bank world as well as the regulatory world invaluable to us. Ally Klein was one of the senior marketing executive at Verizon so the number of other consumer-facing industries, very active today on the consulting front. She has advanced our digital marketing by years. Our tech stack in marketing communications, we call it marcom is light years better than it was just a couple of years ago. When we talk about personalized delivery, Ally's a big part of the approach that we have there. Jeff Tate, last one -- Jeff Tate, active public company CFO, global reach. And even before that, he was in charge of a very large global company running their audit program, very buttoned up in terms of controls, as you'd expect from that experience, but he's also keenly aware of what driving business is required today, and he's a great, great adviser to us. Now these directors were all selected. They put together, they play extraordinarily well, no egos, and they're very, very collaborative amongst themselves as well as with the management team. They challenge us but they also engage us directly. They don't clear through me, they'd go directly to whoever they want to talk to in the company. They're an integral part of our growth and success, integral part. So I'm going to highlight a couple of things moving on to the brand. And again, we've been building this for a dozen years. It's part of what distinguishes us. And it takes the work of our colleagues to bring it to life. Now we've earned a reputation for trust. I think that's the most important brand element. We've got #1 in trust. If our colleagues and customers trust us, they're going to be inclined to do more business with us. No secret sauce here. Earn the trust by the nature of how you conduct yourself over time, but it's hard to do. We're leading our competitors, number 1 trust, number 1 NPS, number 1 customer sat. We could put others up there, number 1 switching preference. But you've had enough of the number 1 stuff, and I really don't like to talk about it that number 1 stuff all that much. It just feels too promotional to me. But I can tell you, people are switching to us. Businesses are switching and have been for a decade. Brant will share some stats. It's impressive. Now we're not satisfied. Make no mistake. We are not satisfied with anything we do. I think it was an earnings call for those who asked, but we raised it today earlier in the conversation. We had a good quarter last quarter, but we can do better. We can do better with all of these brand attributes and we will. It stems from our caring and hard-working colleagues. And the tighter we engage them, the more we listen to them, the more we take their ideas and run with it, the better we're going to be. We're going to take this leading brand and continue to grow it, and that means deepening relationships. Now we're well positioned for the industry trends before us. Obviously, things are changing in the economy, interest rates, et cetera. We're very -- we've been very prudent over time. We'll continue to do that. We'll hedge, we'll be nimble. But it's not just that. Customer preferences have changed very significantly. I think the pandemic was an accelerate to digital. It's why we chose to invest more significantly. We will be prudent in what we do, allocating capital into these businesses. But we're working with the ability to outperform in the cycle. The brand is already set, we're just going to continue to build it. We've got this disciplined and proactive expense-management program where we can invest in the businesses now. We see that pathway, invest in the growth and still deliver positive operating leverage as we go forward. Our TechDev is bringing more value and service in significant ways to our customer base this year. There are a series of mobile and Internet launches that have been done this year, and they'll be shared by my colleagues. We're dynamic in our capital allocation, and most importantly, especially right now, we have been unwavering in our risk-management focus, and we will continue to be. And all of this combined makes me very confident about our long term. So this is a framework now, moving on, that you're going to see today. We're investing -- investing for sustainable profitable growth. We're differentiating our colleagues, culture, brand and the customer experience. We're differentiating. We're good. We're going to get better. And we're optimizing. We want top quartile -- actually want more than that, but we're committing to top-quartile performance and value creation. I share that with you because I'm incredibly proud of the company we've built. We've successfully executed over a long period of time. I think we've delivered good or great results throughout, but we've never been better positioned. We have new medium-term targets we're going to share with you. Zach will get into this. This is under a baseline economic scenario. PPNR growth, 6% to 9% per year; return on tangible common, 20-plus percent; positive operating leverage every year. Now these are strong targets, and we're confident in our ability to deliver. Never better positioned. These targets are supported by the strategies you'll hear about from the leadership team, and I'm just going to highlight a couple of the larger businesses on this slide, as you see. Scott is going to talk about our opportunities for the consumer and business bank. We got great opportunities. It's almost like endless. I'm sorry, on the commercial bank. Brant is going to talk about our leading Consumer Bank and where we can go with growth and opportunities. So with that, thank you for your time this morning. I'm going to bring Brant up on stage. Brant, all yours.

All right. Well, good morning, everyone. Thank you all for being here. I am excited to have the opportunity to share with you our Consumer Bank story, and I'd also just say I'm honored to have the opportunity to represent the work of literally thousands of colleagues, both past and present, that have created what you will witness and hear about in the next few minutes. For those of you who I have not had a chance to meet, my name is Brant Standridge. I joined the Huntington team in April of this year. I am responsible for leading our consumer and business banking team. And prior to joining Huntington in April, I actually spent 24 years with BB&T and ultimately, Truist, the last 7 years of which I was a member of BB&T and then Truist as executive leadership team and the last 3 years as the Head of the Consumer Bank at Truist as well. So very excited to be a part of the Huntington team and share this really fantastic story with you. So as we go through the presentation, there are 4 messages that I hope and we hope that you will take away. The first is something that I believe everyone in here is well aware of, that Huntington over the past really 10 years has been a leader in the industry in acquiring new checking households. Very, very important. Obviously, we're in a moment where deposits matter. We're in a moment where primary households matter. And this quality and skill and this capability that Huntington has built over time is incredibly valuable. Number two, this didn't happen by accident. The company has very intentionally invested in key enablers. Steve mentioned a number of those, marketing, investing in the brand, investing in digital, investing in an award-winning customer experience. And so Huntington has intentionally invested in these key enablers and will continue to do so. The third message that we hope you take away is that, that acquisition prowess has created a significant opportunity to offer a more comprehensive everyday banking solution to those customers. And that is a substantial financial unlock for Huntington as we think about moving forward. And then lastly, how do we achieve that? It will be both through the work that we will do digitally. It will also be through the work that we do in how our colleagues engage customers every single day. So those are the 4 key messages that I hope you take away from today's presentation. So what makes Huntington different? Steve did a great job of highlighting a number of these, but it starts with our reputation or our brand. I believe the most important currency in financial services with your customers is trust. Finance is incredibly important to households across the United States and having a financial institution that you trust is very important. We know that. We've invested over a lot of years in building that with our customers through many, many different avenues, including the work that Steve referenced with Fair Play. That's evidenced by the fact that the Huntington brand has created top customer-switching preference. We see that as an advantage. Customers want to do business with us. Number two, Huntington has established a prevailing position in acquisition through digital. We all know that customers' preferences are changing and evolving to more digital and more convenience that digital offers. It also creates efficiency, and we're very, very proud of how that digital investment is paying off. We see it as an advantage. Number three, the company has earned a national recognition and reputation for customer experience. That's not easy to do. It requires consistent investment. It requires a relentless focus. It requires infrastructure to ensure that you're constantly listening to your customers and has resulted in building that reputation of really fantastic customer experience. And then lastly, the company has had the courage to actually put customers first, challenge the status quo, and as a result of that, have created products and solutions that have been quite disruptive in the industry and very innovative. We believe these 4 attributes make Huntington quite different and create a significant opportunity as we think about the future. So before we dive into the presentation, I did want to take just a moment and give you an overview of consumer banking at Huntington. You'll see the Consumer Bank at Huntington represents $72 billion in deposits, $25 billion in loans. You'll also see that we have very well-established markets in Ohio and Michigan. One important fact for you to know that in 69% of our markets, we are top 5 in market share. So very dense markets that provide us with scale in those markets. We're also excited about the new opportunities that are created with the TCF merger. We now have an expanded presence in Chicago that Steve mentioned. We now have a presence in the Twin Cities of Minnesota that create a tremendous opportunity for us, fast-growing area. And we'll also talk about some work that we're doing in Colorado, another fantastic market. It's growing quite quickly that we have a real opportunity to bring Huntington too. Steve mentioned the density of our customer base, 3.6 million customers -- 3.6 million checking customers. Those are supported by 1,000 branches, and as you all will see the scale that, that creates and also how that customer base has been engaged digitally is very important. One of the things that we're going to spend quite a bit of time talking about as we go through all the presentations today is the company's focused on primary. Having customers where we play a primary role in their lives each day, primary financial relationship with customers is something that's really important, and you'll see at the center of what we are ultimately focused on. At the bottom, you see the recognition that we've received from an experience perspective. Steve referenced this. It's not just in our physical channels. We're receiving recognition both for our experience in our human colleague-led channels as well as digital, which is a very powerful combination. And then lastly, on this slide, you see at the bottom some examples -- some really great examples of the product innovation over the last number of years. These at the time and continue to lead the industry and a great example of that differentiator of product innovation. So how have we performed? You see on the left-hand side what this has meant from a deposit perspective. You'll see really strong growth from a deposit perspective since 2017. And if we could take those numbers back, you would see that over a longer period of time. This provides a low-cost, stable source of funding for the company, which has been very important and is becoming even more important. And if you exclude the merger with TCF, over the last 5 years, we've added 1.2 million new checking households. That's on top of what we received in the TCF merger and creates a substantial opportunity that we'll talk about in a moment. On the right-hand side, you'll see our loan portfolio. Now a couple of statistics I'll just share about this loan portfolio. It's largely real estate-secured. It is super prime. We have taken a very conservative risk appetite as it relates to how we went into our consumer portfolio, and we have executed to that in a manner that's consistent with the company's overall risk appetite. This also creates opportunity. If you actually look at our incident rate of loans per household, how many of our consumer customers actually have a loan, we're about half the industry. So this creates a substantial financial unlock as we think about our plans going forward. I want to center for a moment on the conversation about enablers. I mentioned earlier that the success that Huntington has experienced in checking-household acquisition did not happen by example. It did not happen by luck or by accident. It happened through intentionality. You'll see on the left-hand side of this chart, this is a look-back to 2010. So since 2010, organically, Huntington has grown checking households 5.5% a year since 2010. You all cover the industry. You know it's about 5x the rate of the average in the industry, so substantial growth. You also see the courage and the product innovation that took place over that period of time. The rollout of Fair Play in 2010 in an event just like this, you see it's led to a growth of almost 2 million checking households. I also want to mention the brand. Steve did a great job in his presentation describing the brand. I was having a conversation earlier but before we walked in about the importance of the Net Promoter Score, the importance of how consumers view the experience they have with you, and we're incredibly proud of the recognition that we received. And we see that as a key enabler. We also see that as something that we have to continue to invest in. Our service experience has been recognized by J.D. Power. We will continue to invest there. And I would just mention, we have our investment from a digital perspective continues to expand. And you'll see the impacts of that through both the percentage of customers that we now acquire digitally. You also see that and the engagement that we have with our customers digitally. I wanted to mention just a few trends that I know you all are well aware of as we think about the industry, that have informed the strategy, the direction that we're taking, we'll talk about in a moment. Number one, the value exchange with consumer customers has evolved dramatically in the last number of years. We believe that creates opportunity. Obviously, there have been substantial changes in payments, which Amit will talk about later. There's been substantial changes in regulations and overdraft and how companies have approached overdraft, but the value exchange is evolving. In some cases, that's meant that organizations have reduced access. So this creates an opportunity. We talked about this earlier, but we clearly know that customers' preferences are changing, and there's a much stronger preference on customers' parts to engage with us digitally, both from a service perspective, and when acquiring new products or services with us. Last point I would make is despite that evolution from a digital perspective, there are still times when our customers want to deal with one of our colleagues. And so the combination of those outside factors I've just described, the baseline of the history that you all have heard me describe really help inform our strategy going forward. And so I want to just take a moment on this slide and provide a little bit of context. So how do we win going forward? And when we win, what will it mean for the business? In describing this to our colleagues and describing this to you all today, we think about the future as what will we be known for? You'll see here that we've outlined 5 domains that we believe that we will be known for. Some of those are very consistently aligned with where we are at today. Some of those represent pivots in our investment, but we believe we could be known for these 5 things. I want to just hit on them for a moment. I'm going to talk a little bit later about our business banking efforts. We want to be the business bank of choice. And we believe we're on a great path to do that now, but we want to be the business bank of choice. Number two, we want to be -- we are known today for creating innovative and distinct products, and we want to be known for that 5 years from now. We know we will have to continue to evolve in order for that to happen. Number three, we want to be known for maximizing engagement with customers, both digitally and in our colleague-led channels. We believe that will be reflected in our customer experience. We also believe that will be reflected in the depth of relationships our customers have with us. Number four, we want to be known for providing insights, guidance and advice. We already have earned the trust of our customers. How do we also enhance our relationship as their adviser as well as an organization that they trust? And then lastly, we have a fantastic local model. We want to ensure that, that local model is scalable to the new markets that you heard me describe earlier. We also want to find ways where we have expertise to take expertise nationally. And in our business banking presentation, I'll share some examples of that effort. So what will that look like when we win? We think about it simply, 2 ways. We'll have more primary customers, and we'll do more for them. It's that simple. Larger customer base, a more valuable customer base. When we have a more valuable customer base is if we're more valuable to them. We think about the business that simply. So let me double click just for a moment into a few of the things we're doing, and it starts with our efforts around our branch network. First of all, let me just say that we believe our branch network is an important part of how we engage customers. In fact, last year, 3.7 million customers engaged us in a transaction in our branch network. However, we have to continue to make that network more efficient and more effective. So how are we doing both? So from an efficiency perspective, you all know in 2021, we closed 188 branches connected to the TCF merger, and that's on top of 14 that were divested. This past year, 63 branches. And then we have already announced that in January of 2023, we'll add to that with 31 additional branches. That's how we're making the network more efficient. How are we making it more effective? So obviously, there are savings associated with those closures. Some of those savings we're reinvesting back into the network. We're reinvesting back into new markets. So we just announced a plan to open new branches in our newer markets. In fact, 21 new branches in Denver, Colorado is 1 example. We're also investing to change how our businesses operate inside. So we have dedicated a portion of the savings from our consolidations and closures to investing on enhanced branding, enhanced experience inside of our existing locations. So we believe this combination makes us more efficient because we'll ultimately have a lower-cost network over time. We're also -- we'll be more effective by reinvesting some of the dollars back into that very important service channel for our customers -- sales and service channel for our customers. I want to talk a minute about -- a moment about digital. You all are well aware of these statistics in digital, but I would just share this with you to give you a sense. Our customers engage us 64 million times a month through digital. You all also know that when we acquire a customer through digital, the relationship that they have with us is very different. A customer acquired through our branch network has substantially more services with the organization. We do more for them than a digitally-acquired customer. Unlocking that, changing that paradigm is a big financial unlock for the company. In fact, we believe that we could increase -- in the next 5 years, we could increase high-quality deposits by 20% and high-quality loans by 30% by just changing this simple dynamic. So how do we do that? We have a very specific investment plan around digital deepening, and we're trying to achieve 4 things with our digital-deepening effort. Number one, we will make it easier for customers to switch and more efficient for them to onboard their accounts. Number two, we want to create a better shopping experience for our customers. Number three, we will make banking simpler and easier. And number four, when our customers want to have a dialogue with our colleagues, we want to ensure that we create a seamless opportunity for them to, in fact, do that. This creates opportunity. At the bottom, you'll see some highlights, some innovations that we will be watching in the market in the next 12 months. I'm going to double click for a moment on our Huntington Marketplace. In fact, Huntington Marketplace was launched as an MVP in mid-September. We're already seeing very, very strong results. This creates a personalized shopping experience for our customers. It creates an opportunity for us to provide more of the company, and it also creates an avenue to connect a colleague to our customers. We're seeing right now daily unique log-ins to the Marketplace of nearly 30,000 unique visits a day. In fact, 20% of our new account openings since the rollout of this MVP, which is a very early version, are coming through the Marketplace. Now this creates an opportunity for us to use data and analytics to have a very personalized shopping experience for customers. It creates a platform that they can consistently go to. It also creates a place where we can take the innovations and capabilities that are being sourced through our ventures and provide access to our consumer customers to those capabilities in a way that's meaningful and relevant. So digitally, there are many, many examples. The Marketplace is the cornerstone, will be the foundation of how we began to engage customers digitally. I want to spend just a moment on the human side. We also know that customers want to change the relationship that they have with our colleagues and how can we make that transition to insights, guidance and advice that I described earlier. So one of the areas we believe we can do that is investment advisory and planning. We happen to have a penetration rate and investment advisory and planning that's about half of the industry. So it's another opportunity like lending -- we described in lending. And doing that, it's been data-driven. We actually went out and surveyed our customers. And we know that 69% of our customers are either validators or delegators. They want to speak with an individual to either delegate that decision to the individual around investments or have that person validate their decisions. Sandy will be up in a moment and will provide you with more details. But that 69% represents 1.4 million customers that we believe we could help with investment and planning advisory. We've created a game plan that combines the efforts of our wealth and private organization with that of our consumer and broker dealer, and we believe we can create a very compelling value proposition. To hone that even more, we have 700,000 customers that have $1 million investable assets somewhere else. On the right-hand side, you'll see a few of the innovations that are driving this. Our -- we just launched this past week a program called Smart Invest, which actually allows our advisory customers to have access to a more holistic banking relationship. It combines banking and advisory in a more connected way. We were expecting somewhere in the neighborhood of 300 new opportunities a week from this capability of Smart Invest, and I would tell you, the early results after 9 days, we're far outperforming that. Our Total Wealth dashboard and Advisor Connect Sandy will talk more about, but we'll be rolling out before the end of the year, and we're very excited about those capabilities. So I want to close before I turn it over to Sandy to come back to the context that Steve shared with you. We are investing. The way we are investing is to ensure that we use our leadership position in acquisition to continue that acquisition and also drive deepening. We're differentiating through our brand, through product innovation and through a leading customer experience. And we will continue to optimize by optimizing our branch network and becoming more and more efficient in how we serve customers. Thank you so much for the time to share the story of our Consumer Bank, and I'll now turn it over to Sandy Pierce, the leader of our Wealth and Private business.

Good morning. Thank you, Brant. I'm Sandy Pierce. I joined Huntington in 2016 following the acquisition of FirstMerit where I was Vice Chair. Prior to FirstMerit, I spent most of my career at JPMorgan Chase and its predecessors. Starting as a teller, over my 27 years there, I was able to obtain executive leadership positions in commercial and in wealth and in consumer. As Brant referenced, I'm going to talk more specific about Unified Advisory, but let me start with just a high-level overview of our Wealth Management business at Huntington. We service 43,000 investment management relationships, either through our broker-dealer, we call them Huntington Financial Advisers or our Private Bank, with $25 billion in assets under management, and we really pride ourselves with our very differentiated go-to-market strategy. How are we different? Customers qualify for Huntington's Private Bank with $1 million in assets. Most of our regional peers and certainly all the larger banks, they keep raising their minimums. We haven't, and we won't. We are absolutely committed to local-market delivery. We have 32 fully staffed Private Bank offices throughout our footprint. In many of our nonmetro and community markets, where we have high density, most of our competitors, the larger competitors have exited those markets, those cities. We have not. We are outperforming the smaller competitors in those cities, and we are profitable in every one of them. Many of our competitors have opened up and created these centralized small trust groups. On the other hand, Huntington created small trust account groups in the local markets, scattered throughout our footprint. And our customers and our centers and employees tell us that for their small trust accounts, it's really important to have a local connection, and so we do. And we have a very intentional focus on the owners of our commercial customers, the owners of our commercial customers. We bring in a private banker and introduce them to the owner early in the commercial relationship. When appropriate, if they're thinking about selling their business or a generational transfer, that's when we'll bring in a wealth strategist. The power of this relationship between the Private Bank and our commercial businesses, I can give hundreds of examples, but I'm going to give you one. In Southeast Michigan, we have a commercial customer who's been with us for several years, owns a Pharmacy Benefits Management company. We introduced the private banker to her maybe 3 years ago. Got to know her, helped her with her personal financial needs. Last year, she called the private banker and said, I'm thinking about selling. We brought in a wealth strategist. The wealth strategist worked with the owner for a whole year. Three months ago, she sold the business. She did a $100 million. She invested all of it through Huntington's Private Bank, didn't even consider looking at a competitor. The power of that relationship and leveraging our business customers. High customer satisfaction, low attrition rates, high colleague engagement, excellent operating margins, top quartile for revenue growth and AUM growth, 2 new de novo markets that we've entered with the Private Bank in Minnesota and in Colorado, and our acquisition of Capstone, all of this positions Huntington to really scale our Wealth Management business. Now I'll give you some details on Unified Advisory. You heard Brant. We have 700,000 checking households in our retail branches that tell us they want advisory services when they're considering investment decisions, 700,000. That's 23% of our retail households, 23%. And by the way, they know us. They trust us. You've heard Steve say earlier that we have leading scores around trust in the industry. The opportunity to capture those 700,000 customers who want advisory services is the reason Unified Advisory is so powerful. Unified Advisory is segment-agnostic. We eradicated internal competition between our broker-dealer, our Private Bank and our branches in January of this year. How do we do that? We harmonized the incentive plans. We lowered -- we aligned, we actually aligned the goal setting, and we train them around how to have advisory conversations with our customers. Crushing those silo walls since January has resulted in triple the production in the Private Bank -- triple the production in the Private Bank in 9 months from referrals from our branches and our broker-dealer. And that's before we actually launched our value proposition on Bring More, Get More and before we launched our digital-portal capabilities. So on October 24, just a few weeks ago, we did launch our value proposition. Brant mentioned it, it's our Smart Invest product capabilities and it connects our advisory services to our banking services. So if we have $100,000 in assets under management at Huntington, you'll get great rates, loan discounts, no fees on your checking or money market. If you have $1 million, the benefits are even greater. We also introduced our Wealth dashboard. That our Wealth dashboard on the digital portal gives you a view of your net worth, your outside aggregation of accounts into Huntington, secure vault, planning tools, and your relationship management team all in one spot. And if you're -- if you choose to actually go into that digital portal, we have a great innovative way that you can research and select and connect to an adviser that you choose that meets your requirements. And then you can communicate either remotely and/or in person with your adviser. And if any of you are in our footprint, you are likely to experience exactly how we are connecting our advisory services with our digital capabilities through a multitude of media. Our goal with Unified Advisory going from 1.3% penetration to our aspirational peers who enjoy a 3% penetration by 2025. That's $110 million in incremental annual recurring revenue, $110 million in incremental annual recurring revenue. We want to get to 5% by 2027, and we fully intend to exceed the industry with this differentiated Unified Advisory approach. Okay. Here's a picture of -- I'm not sure how well you can see it, but here's a picture of how we are enabling our customers with Unified Advisory. So if you go to the digital portal, on the left, you'll see our Smart Invest checking product, our packaged product, which again, as I said, $100,000 in assets under management, great rates, no fees on your checking on money market, loan discounts, $1 million dollars, even more benefits. In the middle, our Total Wealth dashboard view, again, 1 place to go and look at your net worth, your aggregated accounts, your secure vault, your planning tools, meet with your management relationship team. And then on the right, you'll see Advisor Connect. I love this capability of Advisor Connect because lots of our customers don't want us to choose their adviser for them. They want to go in and look around and pick their adviser. This allows them to do that. We're the only 1 in the industry, $110 million incremental fee revenue by 2025. Slide 37 is just to look at our track record, and I wanted to show this to you because what it describes is that we have a solid foundation to grow from. In 2017, we modernized the Private Bank. In 2019, we added wealth strategists. Last year, we added 2 new de novo markets where we took the Private Bank to Minnesota and to Colorado. And then this year, our acquisition of Capstone. We have had solid growth, take a look for the last 5 years, not just in assets under management, but in loans and deposits and in relationships in the $1 million plus category and in the $10 million-plus category. Huntington is different than other private banks. Let me say that again. Huntington is different than other private banks. We are so well positioned to capitalize on the constant model changes that our competitors are going through. While most of the competitors have gone to higher minimums for entry, $3 million, $5 million, even $10 million, we have not. We have $1 million as our entry point. We're profitable at that level, and we absolutely have the sophistication to compete with the larger competitors. We're in cities that our competitors have retreated from, and we're growing in those cities. Strong customer satisfaction and colleague engagement is what's driving these relationships in the $1 million-plus and the $10 million-plus space. This is my favorite one. Most banks have self-imposed hurdles, self-imposed. We are lowering those silo walls, and we are bringing expertise to the teams instead of insisting that customers transfer their relationship to a different segment. Our focus, personalized relationships, expertise, local delivery, all of this leads to deepening, which as you heard from Steve and Brant, it's a key strategic priority for our company, across our company. I'll finish with wealth management pillars, investing, differentiating and optimizing. We will continue to invest in digital and product capabilities in our wealth segment. We will continue to differentiate by protecting our local go-to-market strategy. We are never going to give that up. And we're going to protect the stability of the model. We haven't changed our model in 5 years. And we will optimize by continuing to harness this differentiated unified advisory approach and the power of the Huntington brand. Thanks for your attention. I'm going to turn it back over to my colleague and friend, Brant Standridge to talk about business banking.

All right. All right. Thank you very much, Sandy. I mentioned earlier in the presentation that we would talk a bit about business banking and shared with you that our aspiration is to be the business bank of choice. We believe this to be a substantial opportunity for Huntington, and I want to talk about it for a moment. So as we go through a conversation about our business banking opportunity, there are 4 key messages. Number one, we believe the opportunity in business banking to be substantial. You all know there's over 32 million small businesses in the United States, actually 10 million of those are in our geographic footprint. So we believe the opportunity to be substantial. We also believe that we are in a great position to capitalize on that. We are starting from a position of strength. Second message that I hope you take away from the presentation is that we're going to invest and are already investing in digital capabilities for those businesses. We know the business owners are highly busy. We know that ease of doing business is something incredibly important and investing in the digital capabilities for business banking customers are really important opportunity. Number three, we believe that we can harness efficiencies by continuing to modernize what is already a great credit delivery process. Access to capital is -- and in credit importantly -- important opportunity for our business banking customers. Doing that efficiently and at scale is also important for them from a service perspective and for us from an efficiency perspective. Number four, we also believe that there are areas where we can scale expertise that we've already built. And so we'll talk about a few examples of that. So what makes Huntington different? What makes -- what gives us this opportunity to be distinguished in business banking, I would say very similar to consumer, it starts with our brand. Obviously, customers need to trust us and we lead in trust. I mentioned ease of doing business. It is very important for business banking customers that we make their lives easier -- we make their busy lives easier, and we lead in ease of doing business. We've also established a reputation for expertise. Amit will share with you the work we're doing in our treasury management area. That is an area of expertise that we've clearly aligned with business banking and has created known expertise for our business banking customers. We'll talk also about the work that we're doing with SBA and Practice Finance, which gives us very specialized expertise in credit delivery. Number three, we're committed to local. Local matters for many of our business banking customers. We want to combine a really fantastic local relationship with digital capabilities. We are committed to local. And then number four, we've built already a high-volume credit delivery process. That's important to be able to efficiently serve the number of customers that we serve currently in our business banking organization. So that's what makes Huntington different. So also what gives our team and me personally the confidence to say that we can be the business bank of choice. So let's start with us an overview of business banking at Huntington. $22 billion in deposits, $7 billion in loans and over $192 million in fees generated. Important to note that our business banking customers are an important source of deposits for the company. In fact, they produce a lot more deposits for the company than is required from a capital perspective. And one of the reasons we believe it's important to invest here. We have a large customer base that's growing. You'll see over 375,000 business banking customers. And that's actually grown from 257,000 in 2017 or 45%. I'll mention this several times throughout the presentation, but we're the #1 SBA lender in the country. That gives us recognition, a brand. It drives our being known for expertise in the small business arena and frankly, creates an opportunity. Of our 375,000 customers, 360,000 of those are in our footprint. They're served for the combination of our business banking team and also our branch network. But 15,000 of those are a result of scaling the expertise that we have nationally, and we'll describe that later in the presentation. And of those, we have, through our business banking team and our branch colleagues, 94% of our customers are assigned to either a banker or to a dedicated banker on our business banking team. So when we describe business banking, what are we actually talking about? You'll see our customers have revenues up to $20 million. And generally, from a capital perspective, would have loans less than $10 million. So that is our definition as a company of business banking. Lastly, I would mention the -- you'll see the recognition we've already received and the work we have been doing from a product innovation perspective. So what has this led to? One of the items that I want to highlight for this group is digital acquisition. A number of years ago, we would have acquired very little, if any, of our business banking customers via digital. Today, 20% of that acquisition actually happens digitally, and we see this growing substantially. Another question you might ask is, well, what happens when you acquire these or provide an SBA loan or practice finance loan to a customer? Do you actually receive a deposit relationship with that? You'll see for our traditional business banking franchise, 94% of those customers have a deposit account with us. 87% of our SBA customers have a deposit account with us. And 82% of our practice finance -- and I'll give you more detail about practice announce later in the presentation, but 82% have a deposit account. That's what leads to the deposit base that we described earlier. I mentioned our colleague expertise, which is incredibly important. The distinctive brand that has been earned over a long period of time and our proprietary and very efficient credit process that we have today. You'll see the deposit growth that it's led to and a very important statistic that I want to point to here is 77% of these deposits are checking. It's a very low-cost source of funding for the company. And at the bottom, you'll see that we've seen a substantial ramp-up in business banking loan production. The balances have begun to grow. One of the decisions we just made in the fourth quarter is to begin portfolio-ing our SBA, which we had been selling. And you'll see these numbers continue to grow as you see this production numbers grow. So what are we doing to capitalize on this opportunity? I want to mention 4 areas. Our 4 areas of focus. The first is digitally enabling the business owner. We'll talk about the investment that we're making as a company in digital. It's real, it's tangible. We believe it will make a difference. Second, we'll talk about treasury management. I'll just share Amit will provide you with quite a bit more detail about treasury management. We're investing in treasury. So we know that's a significant component to having primary relationships with our business banking customers. Number three, while we have a very efficient credit process, there's opportunity for us to accelerate it, and we'll talk about the investment we're making to continue to be industry-leading in speed and convenience and capital delivery. And then number four, we have areas of expertise where we've developed a national reputation, how do we scale this, what does success look like? I mentioned in the consumer organization, we think about it very simple. Do we have more customers? Do we have more primary customers? And do we do more -- do we do more for them tomorrow than we did yesterday? Are we more valuable? You'll see that we think about business banking exactly the same way. How do we add customers? And then how do we serve those customers with a larger part of the Huntington organization. So I want to double-click into 3 of those 4. Amit will provide you a double-click into treasury management. I'll start with the work that we're doing to digitally enable our business banking customers. What you see here is the depiction of a typical Huntington Bank business banking customer. In this case, we've named this customer, Janine. We know that Janine is incredibly busy. In fact, Janine needs support and capabilities from Huntington in a lot of cases, at times where we're not -- our physical channels are no longer open. So how we serve Janine from a digital perspective is very, very important. So it starts with a mobile application that Janine can use to manage her business. We have that today. The second phase of that is bringing all the other products that could support Janine's business and bring those to Janine's mobile application. Third is integrating our treasury and money movement capabilities that Amit will describe into that same mobile application. And number four is actually bringing unique capabilities to business banking customers. And so our -- as we talked about with the marketplace and consumer, our partnership with fintechs, bringing capabilities through partnership to business banking customers, this would be the portal in which we would do that. I want to talk about our credit process very quickly. We are investing to add technology to continue to make it industry-leading from a speed and efficiency perspective. We just worked with Helga and Rich's team for a number of months to add more automation to the decisioning process and are testing that as we speak. That additional automation would allow us to take 70% of the loan decisions we make, our capital allocation decisions that we make for business owners in business banking and make those in less than a day. Next year, we'll add capabilities that then allow us to fund those 70% the next day. We believe that to be industry-leading and creates not only efficiency for Huntington, but also a really fantastic experience and a differentiator for our customers. Last, I would just mention to you scaling in select areas of expertise. So I've mentioned both of these areas throughout the presentation. I'll just highlight them for a moment. First of all, our practice finance business was launched in 2018. Practice finance is very specifically focused on dental and veterinary practices across the country. We provide them with a unique credit solution. We also support them with an overall banking relationship. We actually have formed a team that supports those practices even though they may not be located in our physical footprint. You see the growth. It's been actually quite fantastic. And in fact, we believe that in the next short number of years, this will actually be over $1 billion in outstandings and a fantastic source of deposits for the company. Second, I would mention SBA. Steve mentioned our recognition. I've mentioned it several times in SBA, the #1 SBA lender in the country. We believe that's a capability that we can expand nationally. And we've begun that expansion just this past year. A good example of the success that we can have in that expansion is 2 new markets that we entered of Colorado and Minnesota. Just a few years ago, we made no SBA loans in these 2 markets. Now we're #1 in Colorado and #3 in Minnesota. So we're immediately getting traction by bringing this very unique expertise to our customers. Importantly, a large percentage of our SBA customers become primary bank customers and have a deposit relationship with us. So in conclusion, to bring you back to the framework of investing, differentiating and optimizing, we are investing with scale and expertise in areas that we believe we can bring unique expertise to the entire country. We're also investing in digital capabilities for our business banking customers. We're differentiating through our colleagues, through the expertise of our colleagues through continuing the product innovation that has existed in our business banking area. And lastly, we're optimizing by making the delivery of those products and services, including capital more efficient. So at this time, I'll turn it over. I appreciate the opportunity to share our business banking story. I'll turn it over to Scott Kleinman.

All right. Good morning. I'm Scott Kleinman, and I lead the commercial bank. It's great to be here with you in person today. A little bit about myself. I've been with the company for 31 years. Somebody did ask me if I joined when I was 12, not quite but close enough. I was actually the first employee in our client-facing derivatives group, which by extension makes me the first employee of Huntington Capital Markets. I'm a builder and a developer of businesses, and I work directly on the build-out of the institutional banking and the capital markets platform and have the opportunity to lead and manage those businesses over the past decade. So it's been 12 years since our last Investor Day. A lot's changed. Steve talked about the 4x growth in the commercial bank. And I'm incredibly excited to talk to you this morning about the growth in the commercial bank and how we're serving the needs of businesses and institutions across the country. So let's begin. Four key takeaways I'd like you to get from our conversation today. First, the commercial bank provides a full solution set for our clients, and we have a set of sustainable and competitive differentiators; second, we're well positioned to address client needs by delivering capabilities and advice; third, we can drive growth from our regional and mid-market strategies as well as from our scaled national businesses; and fourth, we have a clear digital road map with targeted investments to acquire and deepen relationships. On Slide 51, I want to just start by level setting on just where we are in our journey and how far we've come. And Steve talked about this a little bit earlier. 12 years ago, we were a community bank. We were regionally focused on the Midwest. We had a modest toolbox, and we were really only relevant on the lower end of the middle market. Now we're a super-regional bank competing nationally with a broad set of products and capabilities. And at $53 billion of loans and $37 billion in deposits, we represent a sizable portion of the bank. Steve talked a little bit earlier about the scale in asset finance, and we are a force in asset finance. But we're also a force in specialty banking with a national value proposition and a sales network that stretches from coast to coast. In fact, every morning, Huntington commercial colleagues in 38 states wake up and bring our brand to life. Now someone who was here during the great financial crisis. I just want to take a moment and note that all of this growth, growth in deposits, products, loans, capabilities. All of this growth was done by staying well within our aggregate moderate to low risk appetite. In the commercial segment, we are risk takers, but we're also skilled risk managers. And as we move forward with a strong growth mindset, we're focused. We're focused on delivering sustainable growth through economic cycles in a manner that's consistent with our stated risk appetite. On Slide 52, our focus on expertise and advice has led to consistent growth in loans, deposits and fees. We have a strong base of core operating accounts, which provides an important and stable funding source for the segment. We were early and proactive in liquidity management. And that's enabled us to retain significant amounts of deposits on our balance sheet while still working with our clients to optimize for total return. Our loan growth is driven by strong risk management and a disciplined allocation of capital to drive diversification. Year-to-date, '22, I'm quite proud that we have peer-leading loan yields while delivering net credit recoveries across the segment. Our growing fee profile is driven by significant gains in treasury management and capital markets. And if you look at the right-hand side of the slide, we have a demonstrated record -- track record of building and delivering scale in our verticals. Steve talked about this a little bit before. We also have a well-defined playbook for identifying and building industry coverage that we intend to leverage as we continue to grow. On Slide 53, we have a full service offering as a national growth business. And we're focused on growth opportunities where we have the right to win and markets remain fragmented. We select our industry verticals based on our relevance in that market as a risk taker, a capital markets underwriter or advisory with Capstone in the 12 verticals underneath as well as well as the size of the addressable market. And our opportunity to attract top talent, which I will tell you has coming out of the TCF merger never been better, never been better for us. Our focused approach on expertise and advice is positioning us well in these high-growth, high-return businesses, and we have clear strategies to win in these businesses, which I will detail in just a bit. I want to take a minute on Slide 54, just to talk about some industry trends that inform our thinking as we think about strategy. First, our clients are raising the bar every day. They're raising the bar on their expectations of what we deliver in terms of expertise, advice, products and importantly, the digital ecosystem in which they operate. Second, ownership transition will be a durable and secular trend, driven by both demographics, we see that as our business owners age. And the sheer amount of dry powder sitting at private equity firms. This, in fact, was part of the thesis for the Capstone transaction. I can tell you that at Huntington, we think roughly 5% of our privately held middle-market businesses will sell themselves each year. I think we all understand that the buyers more and more frequently are private equity given the attractive nature and returns of middle market businesses. Third, our clients are already moving down a path to sustainability and they're defining their own unique journeys and climate ambitions. We know that by 2030, there will be a $6 trillion CapEx spend on climate. Our clients are looking to us for solutions and it's incumbent on us to build those tools and resources as we think about our strategy going forward. So we experience this every day. Our strategy is designed to address this in a proactive manner and position us as a provider of choice. On Slide 55, our strategy is broken down into 4 core tenets. Relationships First. Relationships First is driving primacy, we've talked about this a lot today, in both our core and our new markets. Primary bank relationships for us, which we define loosely as a lending relationship plus a core operating account. They're 2x more profitable to the segment than a normal relationship. We've built a sophisticated set of tools, and we have the technology to drive primacy. The opportunity is right now in the commercial segment, primary bank accounts make up 45%, 45% of our total relationships. The opportunity is in front of us and it is incumbent on us to execute. Delivering expertise, it's our national opportunity set with a focus on expanding our industry coverage model as well as serving the climate finance ambitions of our clients. Connecting to capabilities is really about continually refining our ecosystem. Harvesting the investments we've made in treasury management and capital markets and continuing to build and refine our solution set, especially as it relates to industry-specific products. Digital, we're going to talk more about this later, but this is really our journey work. Our focus and our job in digital is simple. It's our job to make it easier for our clients and our colleagues to do their job. I want to talk a minute about Specialty Banking. In Specialty, we've demonstrated our ability to deliver expertise to the 11% CAGR over the past 3 years. This is over 2x what the national C&I market has grown. It's much faster, much faster than what we've experienced in our generalist strategies. Our playbook here is simple. We're working to take what we've learned locally to project and grow nationally through the addition of industry bankers and industry-specific product sets, we're going to build on our credit and our underwriting expertise. And we're going to fully leverage the deep industry knowledge that we acquired with Capstone. Again, we acquired Capstone earlier this summer. Given the breadth of what we already do, we have broad exposure to many industries as a generalist. We have a wide menu of options that we've evaluated. We've looked at something in the neighborhood of 20 different verticals, subverticals and the like. Now we've just hired a new Head of Specialty Banking. She comes with 25 years of relevant banking experience, the last 10 of which she spent building, cultivating and incubating verticals at a competitor of ours. So success for us in Specialty Banking. Success in Specialty Banking for us is launching 1 to 2 new industry coverage groups each year and doubling our loans over the next 5. I think we're incredibly well positioned here. Really excited about this opportunity as we think forward. I want to talk for a minute about our asset finance group. Steve mentioned this is a force in the large national business. We came out of the TCF acquisition. These were complementary delivery channels, and we emerged as the seventh largest bank-owned equipment finance company. We're now fifth. They've built their momentum by building holistic solution sets around industries, big ones, small ones and the like. I asked the team for an example this morning because I wanted to talk about it. The first one they came back with was funeral cars. I took a pass. I don't think we want to talk. It doesn't really set -- it is a secular trend. I think we all agree on that. But I don't think we're going to go there today. So I want to talk about Blue Bird bus. If you put your child on the bus, you recognize the iconic Blue Bird symbol. So I want to give you an example of what we do for a company like Blue Bird. Huntington provides floor plan financing to 53 Blue Bird dealerships all across the country. We also provide vendor financing to those very same dealers. Our expertise in municipal lending positions us to finance the purchase of the buses by school districts all across the country. And our government banking team provides treasury management and core banking services to all of those districts as well. So we deal with the manufacturer, the dealer and the district. And it's these holistic solution sets that are driving the continued growth in that business. We're also benefiting from the scale of TCF, and we're seeing meaningful wins in our distribution finance business. We recently announced the addition of Husqvarna to the platform, and that brings on 3,000 new dealers that we're going to welcome in the next couple of months. And finally, when we talk about asset finance, we're well positioned to support our clients as they make investments in onshoring, nearshoring, we talk about that a lot as well as the technology investments that they're going to make in efficiency in light of persistently tight labor markets. We've made significant investments into our capital markets platform over the past 5 years. initially through organic hiring, but also through acquisitions, we acquired HSE, a municipal boutique in 2018 and Capstone, which we acquired earlier this year. We're leveraging new capabilities from Capstone to drive growth in financial advisory and M&A as well as serving the broader middle market ecosystem as we know that institutional ownership continues to increase. Our financial risk management platform. Remember, I was the first employee, so it's been here a while, but I want to talk about it today. Our financial risk management platform, which deals with interest rates, foreign exchange and commodities. It's helped guide our clients through this extremely volatile period of time. Our clients are generally, and we use the word generally, well hedged. And when we built these desks, we built them with the thinking, yes, we're going to drive profitability, but more importantly, when we protect these clients, when we protect these clients by extension, we protect the bank. So when we think about capital markets, we still have opportunities for growth. We'll still be opportunistic for bolt-ons, but we have the most comprehensive tool set we've ever had, and we have the brand to win. We're really well positioned so you see the growth. I want to talk for a minute on climate finance. We think that enabling client sustainability is a huge opportunity, and it dovetails incredibly well with our existing capabilities. We have relevant expertise in the sector. We've extended over $1 billion of capital in the last few years. We're hiring a dedicated team, sends an important message to our clients, but also to our colleagues as we know in the middle market, over half, over half of mid-market firms are already on the path to decarbonization. So we're going to continue to invest for the future here, and we'll be proactive in delivering solutions and technology as they become available. We've already hired several professionals in this space. They're just getting started. We've already seen a backlog of several hundred million dollars. And what that tells us is that our clients are ready to invest today for the technology and the tools that drive the change for tomorrow. Last but not least, but very important is digital. We've built a dedicated commercial digital team because we wanted to support innovation within our segment. Our strategy in digital is organized around the 5 major journeys. Sales and onboarding were focused on reducing cycle times, onboarding with a more efficient process and procedures, and we're leveraging digital tools to enhance our workflows. We're also providing advanced sales enablement tools through our digital tool edge. When our colleagues woke up this morning in commercial, they woke up to 25,000 leads about their -- with their clients, 25,000 opportunities with existing clients that populated directly into our sales management -- into our sales management system, so 25,000 opportunities to deliver timely insights to our clients. In lending, we're simplifying our lending process, optimizing risk management through smarter underwriting and portfolio management. We're reducing our time to market. Service is really an investment in our colleagues. Look, we know things will go wrong. But it's how we address them and the speed with which we can resolve that will determine how successful we are long term. TRANZACT is about supporting and informing our clients to drive trust and primacy. Our payment optimizer delivers convenient payment options and a much improved payment platform experience. Channels for us is enabling the rails on which our clients can interact with us. We launched a commercial mobile app this summer. What we have seen is with each additional iteration, adoption goes up by 63%. So our clients are migrating towards this omnichannel experience, and we're excited to see where this is going to take us. So when we think about digital, digital is not table stakes. Digital is meeting our clients where they are, and we're going to continue to invest, and we're going to continue to drive growth there. Finally, I hope I've convinced you that we have clear strategies to scale and accelerate our long-term sustainable growth. Our overall framework is supported by the investing differentiating and optimized framework that you've heard from others. I want to close with a few thoughts: first, we're going to continue to deepen and grow primary bank relationships; second, we're going to continue on our digital journey with investments guided by the collective voice of our colleagues and our customers; third, we expect to drive increased share of wallet through the delivery of expertise and continued growth in our verticals; and finally, we're creating sustainable value through leveraging data and analytics and continuously learning more about our customers in real time. We're going to be thoughtful and we're going to be intentional as we execute on these strategic priorities to support our company-wide goal of consistent top quartile growth. I look forward to further dialogue and I appreciate your interest in the commercial segment. And with that, I'll turn it over to my colleague, Amit Dhingra.

Thank you, Scott. Good morning, everyone. It was nice to see a few familiar faces this morning. But for those I haven't had the pleasure of meeting. I'm Amit Dhingra, and I lead Huntington's Enterprise Payments business. I've been in my current role since earlier this year. But prior to that, I've held various payments leadership positions since I joined Huntington in 2015. Before that, I was an executive at U.S. Bank. And prior to that, I spent 6.5 years at McKinsey & Company as a leader in their financial services practice, working across London, Chicago and Minneapolis. One of you asked me this morning, are you still in Minneapolis. And I said, well, for those who have picked up on the progression, I've moved colder and colder. And Steve, if Huntington ever expands to Winnipeg, I'm not going there. Let me be very clear. I'm super excited today to discuss how we are capturing significant growth opportunities within Huntington and payments across the franchise. Let's begin. I'll start with our key messages. We're accelerating progress with further reach across the franchise and selectively scaling certain products in a disciplined manner, achieving organic growth through customer deepening, a theme you've heard from Steve and my colleagues thus far. We're continuing to enhance our product offerings and customer experience with holistic solutions. And I'd say we're maintaining a heightened focus, a heightened focus on innovation and strategic partnerships to drive scale, growth and efficiency. One of you asked me this morning, what is payments at Huntington? And so before I get into initiatives and strategy, I love it when I used to do client service and the client would ask a question, I have a perfect slide for you. So let me take a moment to explain what payments looks like at Huntington and who we are. As you can see here, we have a broad set of services and capabilities for all our customers. Some examples are solutions across our card offerings, payables and receivables treasury management solutions, and exciting new business to consumer are B2C product in ChoicePay, which I will outline later. And payments platforms such as Zelle and real-time payments that span all customer segments. In summary, we provide our customers with a full suite of products, and we are a full-service payments provider. The other question I got was, can you outline to, for me, how big is the Huntington's payments business? So I think, again, this is a great one that showcases our scale. Look, even though we haven't organized as a single vertical before, we have a scaled payments business, and our strong presence positions us for further expansion and reach. As you can see, we're already over 30% of Huntington's fee income with significant scale in certain areas. For example, last year, we did over $2.3 trillion in transactions, and we are the #2, I repeat that #2 Mastercard debit issuer in the country. We've seen huge growth in Zelle and RTP, and we're also seeing progress across all our treasury management offerings. Look at the fee income chart, and you can see the huge growth we have seen and the significant growth in fee income since 2017, and we're planning to accelerate that progress further with strategic and continued execution. So in short, what I want to leave you with this on this page is we are a scaled business, and we believe fee income is a huge opportunity for us, and we are well positioned to capture that across the enterprise. All this progress so far and the strength showcases our strategic focus and ability to drive organic growth across the business. So as we're expanding and selectively scaling, I thought I'd take a moment to talk about the key trends that are shaping our strategy. Firstly, customers expect and you all know this, holistic and seamless digital experience. You all know that the level of competition in payments has been increasing in the past few years and that pace continues to increase. Customers also want increased access to credit and payment options. Scale is necessary. And as I mentioned before, our accomplishments to date have us extremely well positioned to capture and leverage our own scale advantages. Let me then spend a moment with sharing a few key examples of how we are well positioned to address these trends. We have seamless solutions and features. And as you'll hear from Paul a little later, we are leveraging technology to digitally enable not just our customers, but also our colleagues. We have loyalty and satisfaction across the customer base. And as Steve and Brant have mentioned, we leverage our brand and trust to drive the solutions our clients want and expect. By the way, I love it when I have to say Brant and brand within 2 words of each other. But I have to practice that a bit more. We have speed and agility and the tools necessary to increase availability of faster payment options. Our innovation is best in class. And I think one of our key strengths is data and analytics, and we are leveraging that to deepen with customers and drive primacy. And finally, we're investing to create distinctive solutions, leveraging partnerships where the returns are more attractive. In short, our strategies align extremely well to the changing payments landscape and we are leveraging our position of strength to win. Let me now share a few specifics of how we will win. So as you can see on this, deepening with payments relationship drives significant value and also ensures we maintain primacy with a customer. I'll repeat that, look at the significant increase in value when we have a payments relationship. As I mentioned, we have the relevant solutions, capabilities and scale, and we will continue to innovate and partner to drive growth and deepening within our customer base. We have doubled credit card acquisition year-on-year over the past 2 years, and we will continue to invest and grow. And Helga talked about it, but I will say that too, with credit discipline. Our credit quality in the book is extremely strong. And I feel extremely confident about our ability to replicate that success. We're really excited about the growth we are seeing within our commercial card base. And as you can see, we have been growing over 30% year-on-year. And finally, as we talk about debit, we have an extremely large and active debit base, and we lead our peers in terms of transactions per active card. So how are we going to measure success? We believe our strategic execution will result in us extending our best-in-class debit usage. Through our deepening initiatives and gaining primacy, we will continue to grow the credit card portfolio and double it. And we plan to continue our momentum to grow within the commercial card in excess of 20% annually by creating more opportunities for our corporate and business clients. It's a similar story in treasury management. As you all know, this is a relationship-driven business and a source of recurring revenue. You can also see, just like I shared on card, how treasury management drives significant value for the enterprise. So we're poised to build on our success. For example, we have witnessed over 50% year-on-year growth rate in our integrated payable spend. This is a great example of customer connectivity, where we are connecting with our customers in the way they want and providing them with superior product solutions and digital experiences. Like you heard from my colleague, Scott, we too are putting advice at the center for customer experience and are leveraging expertise to solve the needs of different industry verticals. Investments in automation and scale are yielding significant efficiency benefits. So what are we hoping to achieve from these efforts. We're looking to increase our treasury management penetration by 20% through advice, digital solutions and scale. I'm extremely confident we can do that. And Scott has shared that, and I will also say, Brant has shared, but if you look at our Greenwich surveys, we have leading leadership position in Greenwich surveys. So this is a testament to our expertise and focus on customer satisfaction. Now let me switch gears to the -- to a really exciting part about business to consumer. And I want to talk to you about a topic that's really close to my heart, which is innovation and how we are using innovation to drive growth further. As many of you are aware, earlier this year, we bought Torana which is now branded as Huntington ChoicePay. This platform positions us extremely well to capture the opportunities in the B2C payment space. If you look at our business customers, a majority of our business customers want to pay the end consumer in a digital, rapid and seamless manner. From a customer perspective, you're all customers, what do you want? You want speed, you want choice and you want it to be seamless and easy. And by the way, ChoicePay does all of the above. Additionally, if you look at our business customers, they're able to use ChoicePay's unique set of features, which is connectivity to their systems, a set of unique dashboards and the choice of payment rails. We're already capturing the opportunity with Huntington ChoicePay. For example, in many of our verticals, if you take our settlements vertical alone, most of our customers have either already onboarded onto the platform or are in the process of doing this. The upside is huge. Within settlements last year for context, we processed over 15 million checks. So the huge opportunity to convert from paper to digital. Scott, as he outlined, has over 10,000 clients in multiple verticals, whether it's higher education, government, health care, where I think there's opportunity to convert paper to digital, and there is tremendous upside. So this is an example of our deepening initiative where we are attracting high-quality deposits and fee income. So finally, what this acquisition gives us is a clear playbook for future innovation and fintech partnerships. I won't go through the 3 themes, again, you've heard this many times, but if I want to leave you with 5 key messages. We're continuing to invest to deepen relationships by creating simple, frictionless experiences; focusing on enhancing our product offerings and differentiating with innovative solutions and advice to solve for customer needs; driving a best-in-class experience with B2C capabilities; optimizing our infrastructure with disciplined scale and automation; and leveraging innovation and partnerships where it makes sense to further accelerate our growth. I'm really excited about the runway in front of us and the opportunity to drive fee income and growth across the bank. I believe we have the talent and the expertise to capture these opportunities and make Huntington a leading industry payments provider. With that, I'll turn it over to Rich. Thank you for your time.

Thanks, Amit. Good morning. I'm Rich Porrello, and I lead our dealer services and vehicle finance franchise. I spent my entire career at Huntington all 34 years, and I've been running the business day-to-day since Q4 of '10. As you'll hear from Raj this afternoon, the passion and culture of our colleagues to create a best-in-class experience is contagious and has been a key driver of my loyalty for so many years. I'm really excited to share our vision. So let's get started. These are the key messages we're highlighting today. First, we are very disciplined delivering sustainable, profitable growth through strong brand, consistent execution and adherence to our aggregate moderate to low risk appetite. Our experience and track record allows for sustainable growth and allows us to operate from a position of strength. From that strong position, we're driving expansion and operational efficiency with recognized expertise and digital capabilities. At the same time, you've heard this from others, we're deepening and monetizing customer relationships. We're doing it with our unified local, digital and scalable platform. Overall, our strategy enables to achieve top quartile performance with industry leadership across production, credit performance and financial returns. We have a synergistic and diversified portfolio, and you can see it here. Indirect auto accounts for a little over half of our balances. We have $6 billion in commitments on the floor plan and commercial side to our dealers. And we also have a $6 billion RV and marine book. We have sustained low levels of expense as we expanded. Our direct efficiency ratio is 10%, 10%. Our low net charge-offs, proprietary scorecards and high average FICO scores support a low risk -- a low business in our banks -- a low-risk business in our bank's moderate to low-risk appetite. You're going to hear me talk a lot about low risk and predictable risk today in this business. Our competitive advantages allow us to scale and create long-term shareholder value. This slide here speaks to the heart of Huntington's vehicle finance businesses, which ties back to our first key message of delivering sustainable growth. Our unified local model with indirect and commercial lending in one infrastructure delivers a complete set of banking products for our dealers. This is a differentiator from us from every other bank, captive lender, credit union. Furthermore, it's supported by our centralized policies, procedures and servicing model. We have a strong brand and a track record of more than 75 years of commitment and experience in this business. We have a unified local business model with localized strategy. Our combination of local delivery with best-in-class technology drives our success. We're a top 10 national auto lender consistently. We're a top 10 lender on the RV marine side nationally and consistently. We have 10-year colleagues in our markets. Local matters to our customers, and we know our markets better than any of our competitors. We know our dealers better than any of our competitors, dealer selection is critical. It's critical in this business. Tied with local delivery, we're highly efficient with the use of technology in underwriting, funding and servicing thereafter. Let me give you an example. Today, we underwrite roughly 100,000 applications monthly on the indirect side of our business. 70% of those applications are decisioned in 3 seconds or less. Let me say that again, 3 seconds or less, we're decisioning those applications. And we're decisioning when consumers are buying cars, RVs at night, over the weekend, 3 seconds or less. Again, our unified model of indirect consumer and commercial in one infrastructure is a differentiator. It's a differentiator. Our business has delivered a safe and steady return profile for Huntington, again, for 75 years. We have a clear playbook and when we optimize for pricing, we optimize for production. And we're doing that always, always ensuring credit quality in our portfolios. You heard me mention low risk, I'll say it again. So how have we executed on this since 2017. This chart really tells you that story. A couple of examples. Beginning in Q3 of '18, you could see where we optimize for yield, dialing down production. Conversely, when you look at Q3 of '19, production was a driver for us. The rate environment since Q4 of last year has been dynamic. And you could see that for the first 2 quarters, we optimize towards production. And then in Q3, we began to refocus on yield, tempering our volumes as we continue to ensure sustainable success for our franchise. Again, strong credit quality, always a constant. And we use technology to ensure that we're not being adversely selected, leveraging data and analytics to optimize pricing in any -- in volume, in any given environment. Dealers remember lenders that exit the business and attempt to come back. And they respect and reward lenders that stay in it consistently. They know they need to be profitable. They understand that we need to be profitable, and they respect us for staying in the space through all the cycles. Disciplined and rigorous underwriting, coupled with client diversification, it does, it mitigates losses in any economic scenario. Our expansion will be -- and growth will be opportunistic. And it will come with disruptions and dynamics, allowing us to continue to leverage our infrastructure just as we have in the past. In 2009, our auto business was in 7 states. Today, we're in 30 states. How do we do it? We do it by hiring local colleagues that know the dealers and by leveraging our technology and our scalable platform. In '16, with the acquisition of FirstMerit, we further leveraged our auto infrastructure to grow their RV Marine portfolio. We brought that in, put it on the rails, the platform of our auto business, and it's been an incredible driver for us. We've taken that portfolio from $1 billion, from $1 billion to just under $6 billion today. Earlier, I showed you our portfolio of it being synergistic and diversified. I'm incredibly excited to share the new launch of our Powersports consumer platform. This business was inspired by the TCF distribution finance business that has strong relationships with thousands, thousands of Powersports dealers. We launched this additional point of sale financing business mid third quarter, leveraging every aspect of our RV marine business, including the people. You heard Scott mentioned today, just bringing on Husqvarna. That will help us. That's what we're doing. We're leveraging those Powersports dealers. We're originating thoughtfully originally, I should say, power sports loans today in 17 states. And we see this as an opportunity to grow into a significant low-risk portfolio over the next 5 years. We will be strategic and opportunistic on further expansion. We will continue to take a measured and disciplined approach, focusing on areas and markets where we have advantages, advantages to win. This slide here focuses on auto and demonstrates how we have achieved sustained success through managing risk with super prime credit, super prime credit, which enables us to achieve top quartile performance through the cycles. This is really important. We underwrite to the probability of default, not the severity of default. We control severity of default by underwriting and lending to the highest credit quality customers. How does that translate? That translates into high FICOs, really high custom scores, talk about technology, custom scores, our technology and low and prudent LTVs and we use technology both in decisioning and monitoring thereafter with a focus on risk expected loss. It allows us to react quickly to market conditions. We're looking at risk expected loss on the production from the day before every single day. We also -- and you can see on this slide here, at the top, we ensure that we're never overexposed relative to our overall position in the bank. You can see we've grown auto balances while keeping our total set of loans under control. As I previously mentioned, our industry knowledge is best-in-class, and this allows us to deliver value consistently for our customers and our shareholders. You've heard throughout the day, many of us mentioned deepening. We are strategically focused on deepening our commercial dealer relationships. Our commercial auto book has deep, very deep primary bank relationships, profitable and they're low risk. We understand the industry trends and that dealerships are consolidating. Here's an example of this. In 2017 -- I'm sorry, in 2010, there was just about 17,000 franchise dealerships in the United States. Fast forward to today, still just under 17,000 franchise dealerships. However, they were owned by 9,000 individual owners in '10. Today, owned by 7,000 individual owners and groups. Incredible consolidation, incredible consolidation. That requires expertise in this business, and we've had it. We have built a syndication platform with the expertise to support this consolidation and to support these industry needs. Today, we bank many of the top 100 dealer groups in the United States, many of the top 100 dealer groups. And this is just an example of one of them. You could see we have a deep, deep relationship with many touch points, including floor plan lines, commercial real estate lending, deposits, treasury management, merchant card servicing, and of course, we're buying indirect loan paper from them, as you would expect. Our commercial business has one of the highest ROEs in the bank, and we are poised, poised to grow it. As you see throughout the day, these are our pillars, 3 pillars that you're familiar with. And here are some touch points. First, as I said, we're driving -- driving expansion allows us significant revenue synergies and growth while maintaining our localized strategy, know the dealers, know the customers. We know them better than our competitors. Second, our highly efficient infrastructure has allowed us to not only go geographically, but product. 2016, FirstMerit, RV/Marine. Earlier this year, TCF, Powersports. And we've entered this Powersports business with very low cost, very little cost. We are delivering sustainable growth through our strong brand, consistent execution and low-risk strategy with pristine credit quality. Our 75-year commitment to this space has and will continue to provide profitable relationships. With that, I appreciate your time. We're going to Tim up here and go to Q&A.

Thank you, Rich. Let's pause just a moment, let us set up for Q&A. And if I could have the presenters from the session this morning come up, please. [Operator Instructions].

Okay, Tim, we're ready.

You're on, Erika.

My first question is for Brant. Brant, you're one of the newer members of the management team. I'm wondering if you could share with us sort of as you came to the bank, what you thought that Huntington could do better after your previous experience in another bank. And conversely, what Huntington was already doing quite well that surprised you to the upside?

Yes, it's a very good question. And obviously, I want to spend quite a bit of time thinking about prior to joining. But I will start with why I joined, and I'll start with what you're going to hear a lot more about a little bit later, and you heard Steve allude to, which is culture. It was apparent to me in the conversations that I had leading up to the decision to join Huntington that the culture of Huntington was something that was very special. And when I describe the culture, it was clear to me that the colleagues had this burning desire to care for each other, care for customers and care for the communities. And that, in my view, was quite unique. It was also clear to me that there was a desire to always be better. This achievement mentality was incredibly strong. And then the last component of the culture that I'd just describe to you that was very apparent to me was that it was collaborative. Steve said it earlier when he said this is a team, this management team is, in fact, a team. That's how I personally like to work. That was something that was very attractive to me. And those dynamics play a significant part in whether we can be successful long term. And seeing those dynamics, it was very clear to me that the foundation for being successful over a long period of time existed. I would also say I had observed the strong brand that Huntington has. I mean it's clear there -- from a consumer's perspective, specifically, it's been very hard to create distinctive brands in financial services. And Huntington has been successful in doing that. So that is -- that was quite attractive to me when I think about the future. As it relates to opportunity for the future, I believe the presentations today do a good job of outlining where the opportunities exist. Clearly, when I think about the consumer organization, we have been an acquisition engine, and now we have an opportunity to provide more of a holistic relationship to consumers. We're building out specialty capabilities like what Amit was doing with payments that give us an opportunity to serve customers in a more holistic fashion than Huntington has been able to do in the past. So the opportunities that I have observed since being here, I believe, are really well outlined in the direction of the company going forward.

John Pancari, Evercore ISI. Just Steve, you mentioned -- and actually, everybody up there, essentially mentioned the merits of the TCF deal and how it gave you scale or added scale in many of these businesses. I guess from a business perspective, Steve, versus financial perspective, can you maybe talk about the need for additional scale in any significant way, in any of these businesses where an acquisition may be required to get you to the level where you think you need to be?

Sure. Great question. Thank you very much. We have achieved a scale in many of our businesses. But there may be opportunities, particularly the payments or extensions in capital markets in some of these areas to further build out. And thus, you saw the Torana investment, the Capstone investment, they're both earlier this year. I suspect we'll find other things like that, that will complement the core business lines and help us continue to do more with our customers as well as acquire more customers. But in the context of just raw scale, we think we have it. We really like the positioning we're playing from today. Now as you heard from Brant, we're going to be putting 21 branches in Colorado. There will be another 30 branches going in discrete markets over time, but we'll continue to harvest this density in the franchise as we bring more and more of our customers into digital and deepen through that. So we've got some natural offsets. We're also going to be talking about project accelerate a little bit later today. And that's a great opportunity for us to further leverage up and use digital end-to-end through our customers, with our customers that will give us additional scale benefits without having to acquire anything.

Betsy Graseck, Morgan Stanley. I just want to dig in a little bit on the deposit growth and the deposit outlook. I know in various sleeves, you've indicated that there's lots of opportunity. And so I was just wondering if you could help stack rank them for us. If I think about new branches, the digital we just mentioned, wealth, Business banking, commercial, where do you see the opportunities as the largest and where the rate of change is going to be, maybe stock rank that as well? And then I just had a very specific nitty-gritty question on where do the digital deposits sit from a branch perspective? If you could help me understand that as well.

Zach, why don't you take the first part of the question? And Brant, the second, please?

Sure. So in terms of deposits, we've seen a lot of traction this year. And I think what we've been seeing and talking about throughout the course of this year. I mean it's clear there -- from a consumer's perspective, specifically, it's been very hard to create distinctive brands in financial services, and Huntington has been successful in doing that. So that is -- that was quite attractive to me when I think about the future. As it relates to opportunity for the future, I believe this -- the presentations today do a good job of outlining where the opportunities exist. Clearly, when I think about the consumer organization, we have been an acquisition engine, and now we have an opportunity to provide more of a holistic relationship to consumers. We're building out specialty capabilities like what Amit is doing with payments that give us an opportunity to serve customers in a more holistic fashion than Huntington has been able to do in the past. So the opportunities that I have observed since being here, I believe really well outlined in the direction of the company going forward.

John Pancari, Evercore ISI. Just Steve, you mentioned -- and actually, everybody up there, but since you mentioned the merits of the TCF deal and how it gave you scale or added scale in many of these businesses. I guess from a business perspective, Steve, versus financial perspective, can you maybe talk about the need for additional scale in any significant way in any of these businesses where an acquisition may be required to get you to the level where you think you need to be?

Sure. It's a great question. Thank you very much. We have achieved a scale in many of our businesses. But there may be opportunities, particularly in payments or extensions in capital markets in some of these areas to further build out. And thus, you saw the Torana investment, the Capstone investment, both earlier this year. I suspect we'll find other things like that, that will complement the core business lines and help us continue to do more with our customers as well as acquire more customers. But in the context of just raw scale, we think we have it. We really like the positioning we're playing from today. Now as you heard from Brant, we're going to be putting 21 branches in Colorado. There will be another 30 branches going in discrete markets over time, but we'll continue to harvest this density in the franchise as we bring more and more of our customers into digital and deepen through that. So we've got some natural offsets. We're also going to be talking about a project accelerate a little bit later today. And that's a great opportunity for us to further leverage up and use digital end-to-end through our customers, with our customers that will give us additional scale benefits without having to acquire anything.

Betsy Graseck, Morgan Stanley. I just want to dig in a little bit on the deposit growth and the deposit outlook. I know in various sleeves, you've indicated that there's lots of opportunity. And so I was just wondering if you could help stack rank them for us. If I think about new branches, the digital we just mentioned, wealth, Business Banking, commercial. Where do you see the opportunities as the largest and the -- where the rate of change is going to be, maybe stack rank that as well. And then I just had a very specific nitty-gritty question on where do the digital deposits sit from a branch perspective? If you could help me understand that as well.

Zach, why don't you take the first part of the question, and Brant the second, please?

Sure. So in terms of deposits, we've seen a lot of traction this year. And I think what we've been seeing and talking about throughout the course of this year is very much commercial-led deposit growth. And I think it's coming through the -- our focus on optimal customer relationship and key operating accounts. And expect that to continue. You listed off a series of places where it could come. And I was thinking as you were talking, yes, yes and yes and yes. So it's really coming kind of across the board within commercial, which is great. And this year has been a year of 2 focuses, growing deposits and continuing to deepen accounts and win operating accounts, but also manage deposit pricing and beta in a very rigorous way. And so that's been an important management focus, and we've been doing it in an exceptionally disciplined and rigorous way. Within the Consumer franchise, and Brant can expand on this, but there sort of has been a tale of 2 cities. On one hand, this acquisition engine that Brant talked about for a while, which has just been continuing to acquire households, continuing to gather new primary bank relationships and grow deposits, which has been very positive and quite consistent. Offsetting that, however, during the last several quarters has been this gradual normalization from the really elevated levels of savings that we saw during COVID back down to something more natural. And so that's been -- the net of those 2 things has seen a little bit of consumer downdraft on deposits in the last couple of quarters. I do expect that to continue probably for another quarter or 2 before the underlying acquisition trend becomes more apparent and we'll see net growth. But broadly speaking, it's yes and yes and yes. We're trying to grow deposits sort of across every aisle of the business. It's a critical focus, and it's working.

Brant, do you want to pick up?

I would add two things to what Zach described. Number one, we've spent quite a bit of time discussing and describing the acquisition engine as a deepening opportunity, but the acquisition engine also creates new balances. A 1% difference in household growth is a pretty substantial difference in balances. So that is an opportunity as we stay focused there, as we continue to invest to continue to maintain that engine, it will support balances. Second point I would make is the focus on primacy also provides more resiliency. We know that primary customers are more likely to maintain their deposit relationship with you even in an environment that's moving and there's a lot of data to support that. So the focus on primacy also gives you a level of resiliency. Third point I would make is the digital acquisition engine goes beyond just checking and DDA. So having the flexibility to be able to acquire more balances, whether that be an MMA or CD or wherever that might be as an important part of how you continue to maintain and grow a deposit book in a more challenging environment. To get to your specific question or your technical question, our digitally acquired deposit balances are in the consumer organization, and we match them to our branches. Interestingly, 85% of our digitally acquired accounts are open within a 5-mile radius of a branch. And I do believe that a part of this deepening is both a digital exercise and a colleague exercise. And so how do we onboard more efficiently, how do we connect the colleague to the customer at just the right time and that onboarding experience. So that connection between how we acquire customers digitally and how we engage them in our physical network is important, and we want to keep that connection tight.

Steve Alexopoulos from JPMorgan. Actually, I have two questions. First one for Amit in the payments business. So FedNow is going live over the next year. I'm surprised you guys are not in the pilot program. Does that set you back at all? Give us your big picture thoughts on FedNow and how do you think that will impact your payments business? That's the first question.

Yes. Thanks, Steve. A couple of thoughts, right? We are continuing to expand our capabilities, to your point about, hey, FedLife, FedNow going live, and we're not on that. We're in active discussions, right, as we look at our road map of how we expand and continue to meet the needs of our customers, right? And can you repeat the second part again?

How do you see it impacting your business right now?

So look, from a capability perspective, our customers have the capabilities they need to transfer money real-time, ACH and all the capabilities, right? And so is this another rail that will provide choice to our customers? Absolutely. Will we look at it as we look to provide choice to our customers? Absolutely, right? So we're going to go on all dimensions that will leave no stone unturned. What's the second part against, Steve?

No, that was it. Happy to hear you're incorporating this in Rich's business because I think dealers are going to be the first one to adopt that now. Is this an aspiration for you? Or is this something you guys are working on right now?

It's something that Amit and I are talking about, and it's aspirational, yes.

Got it. My second question. So Brant, we talked a lot about new client acquisition, checking account growth. Can you talk about the demographic trends of the types of clients who are acquiring, maybe age or these millennials, high-income, low income, and are they profitable day 1?

It depends on the customer segment. But our team, we've invested for quite some time. As Steve mentioned earlier, the marketing technology stack that has been created in the organization, that allows us to understand the customers that we're both targeting and acquiring at a much, much deeper level. You combine that with very robust data and analytics. And so now we understand. So initial profitability completely depends on the customer segment. In some segments, it takes some period of time for customers to be profitable. Obviously, we make assumptions about our ability to deepen, and we make assumptions about what that customer relationship may look like. And as you saw from the slide, we're really thinking about customers over a course of a lifetime. So how do we increase customer lifetime value? And thinking about customer lifetime value, the service component is really important because the longer the duration of that relationship with the customer, the more valuable the customer is to you. And then clearly, the better job you do of bringing more value from the organization to the customer, the more value. So we think about that continuum from a customer lifetime value perspective. And we also think about it on a segment basis. Now to your question about acquisition, it's across the board, and it would depend on the type of account. There are certain types of accounts that attract certain customer demographics. And as we think about product innovation for the future, personalization and a higher focus on creating the right products for the right segments is a big part of how we're thinking about it.

Steve, you had tremendous success with the FirstMerit acquisition and good early success with TCF. What are your thoughts on expanding into other markets, such as the Southeast through a bank acquisition?

I wondered how many we would get before that question. So I don't know if you had a betting pool over there and you threw it. Look, we have a lot -- you've heard it this morning, we have a lot of poor revenue opportunities. We've got a lot of engines, some of which you probably didn't realize. We're going to pull those levers hard over the next several of years and deliver this growth that we're expecting and the overall performance with those medium-term financial targets. We're focused on trying to broaden our product menu where it makes sense, payments, capital markets potentially a few other ancillary areas to the existing business lines. We're -- we've got a small group that works on bank M&A, but it would -- that's like very, very remote. And there's no targeted interest in going to the Southeast or somewhere else at this point. We've got a lot of opportunity where we are. We need to be bigger in Colorado. We want to be a lot bigger in Chicago. We have #1 share, #1, 2, 3 share in everything in Michigan and Ohio. If we can get that in Chicago, that's huge. If we can bring it into the Twin Cities and that Denver broader Denver area, that's enormous growth potential for us. So rather than extend the play into like the Southeast, that's where we're going to focus. If we happen to see something de novo that's an adjunct to something we're doing, then we'll take a look at it, an example would be PowerSports. We've got this great distribution finance company that came to us from TCF. PowerSports was a logical extension. If we see things like that, we'll do it. But Southeast Bank M&A would be extraordinarily remote. Bank M&A is not high on our list.

Bill Carcache with Wolfe Research. So I have a couple of questions. First one for Rich. As we think about what's happening with used car prices and the broader macro challenges, can you discuss any tension that you may be seeing across your dealer partners that are potentially looking to drive incremental sales and perhaps what some of your focus areas are from a risk management perspective? And then separately, Amit, can you talk about from the standpoint of helping your business partners drive -- there's a big focus on shifting more business-to-business payments to electronic channels from traditional paper-based forms of payment? And to what extent are you partnering with the networks and/or other players to help those businesses, and ultimately, treasury management services and other things that [ HBAN ] offers to drive growth there?

Let me start with what's going on in the used car market to your first question. We're not seeing really any negativity out of it at this point in time, but recognize that over the last few years, used car values have increased. They actually peaked. Manheim Market Index peaked in January of this year. It's down 15% since then, and it's going to continue to normalize. My view is it won't normalize in a very steep manner given there's so much consumer demand still and new vehicle inventories are still very, very low. They continue to be very low. So I don't -- we're not seeing any distress in our portfolio overall today. Sure. You saw in my slide, we have 4 basis points of loss year-to-date in the Vehicle Finance book. And that will normalize. It has to normalize. We underwrite to a risk expected loss of 25 basis points -- around 25 basis points in auto and around 35 in RV/Marine and we'll get there. Today, we think the best indicator is to compare ourselves to 2019, now pre-COVID. And when you look at our losses and our delinquency especially compared to 2018, we're still better. So again, tension or stress today. Amit?

Thank you. Bill to your question. We had Zelle B2B going live this quarter, right? We have a suite of integrated payables, receivables, AR, AP offerings. And then specific on network with Mastercard Track, we're partnered with them to provide offerings to our customers. So again, it's a full service, full suite.

Scott Siefers with Piper Sandler. Steve, I guess the first question, if we think back to like a dozen years or so ago, when you did the last Investor Day, it's just abundantly clear what the transformation has been in the company. But I think what a lot of investors think of Huntington, where they think of that transformation is mostly in the consumer bank. It was sort of like a basically a thrift, and it's just a full on excellent consumer bank now. So a lot more emphasis today on the commercial side, which obviously has been kind of years in the making. I guess just in your mind, though, where is the commercial bank vis-a-vis where you aspire it to be? Sort of where does it rank relative to the consumer? Where do you want it to be over time?

So as you pointed out, we made a lot of progress on both sets of businesses, Consumer and Business, Scott, thanks for the question. We have a lot more yet to do on the Consumer side. Brant's a fabulous executive. You're going to see us continue to evolve that fair play philosophy, differentiating product, getting growth. And you saw that business banking stack, loans to deposits or deposits to loans 3x -- 3x more deposits than loans, and we've just introduced mobile and some of the other things. So great growth there. On the commercial side, we have gotten a number of these businesses in specialized lending and asset finance to a great position on the growth curve. I think our asset finance will continue to grow our asset-based lending, our distribution finance. It's grown significantly since we acquired TCF. We mentioned Husqvarna. There are others, and there's more in the works. So -- and that's an important -- very important business for us right now because you're seeing more onshore of manufacturing. You're seeing a lot more foreign direct investment activity into the U.S. because of the stability relative to other parts of the world. I think we've got great growth opportunity there. One of the intriguing aspects of what Scott said to me is the specialty finance. We've done really well in a number of those businesses. But we're going to be adding 1 to 2 every year. And we've got the right team, the right executive leading it, working with Scott. And we've got this integration with our risk partners. So we're balanced as we grow these things. And we'll look to open that up. I think the commercial bank has significant growth potential from where it is today. You're already starting to see some banks pull back, concerns with market and the economy and other things. And we have the capital and the capacities with our teams to significantly grow. And that will be an important source of our growth over the next 3 to 5 years as well. But the consumer bank will continue to get better as well as the business bank with its national expansion.

And then I was hoping, Rich, I could ask you, just like on the PowerSports business, specifically. Maybe if you could go through sort of what has been going on with that one in the last couple of years? As I recall from covering TCF, that had been a growth engine for them for a while. It feels like it sort of went away and it almost feels like a kind of a relaunch today. What -- did you sort of rebuild it? Or has it been kind of waiting in the wings? What's been going on in the last couple of years?

So Scott, as it relates to TCF, TCF has been in the business consistently on a distribution finance business supporting their PowerSports.

But the difference is they didn't do and paper financing, Scott -- they did not go...

I'm sorry, that's what I was kind of getting at. Like what is it -- what is it now and going to be versus what it was when it was...

Well, they didn't do it at least of a recent vintage because it didn't come up in our diligence. It showed us an opportunity. This is where that point-of-sale financing model that Rich has perfected. It got us excited about what was possible. And Rich, why don't you answer the question then. But it's a new initiative and user finance, consumer finance on that channel.

So thanks, Steve, brand new. And we think now is the perfect time to do it. Again, just leveraging the relationships on the TCF distribution finance side. And then putting it into our scalable platform, just like we did RV/Marine on the rails, and we're doing it in an environment where there's not a lot of bank competition today. They're smaller competitors in the space, and our infrastructure and expertise on the risk management side is just perfect from a timing perspective.

It was a terrific synergy, right? They had -- they were just doing the commercial side of the business, but not financing the end consumers. We have this platform that had lots of other segments where we're doing both sides of that, that synergistic relationship really increases the overall return on capital of the business significantly, not to mention scaling to a much larger base of customers. So it's just a clear revenue synergy and throughout the execution right now.

So TCF had these unique business niches. That's one. I mean I think we're #2 in the country today with distribution finance, more than 12,000 dealers. But there are others. And so we'll -- you could expect this to continue, whether in Business Banking or otherwise, to look at where they have depth of market and the adjacencies around it, given the breadth of our products and capabilities. You had a second question, Scott, or you got that?

No, that was it.

Ebrahim Poonawala, Bank of America. I guess if you -- maybe Brant, Scott, if you can talk about -- there's obviously concern about inflation, higher interest rates, what that does to the customers and we look out into next year. Just talk to us in terms of demand destruction for your clientele when they think about inflation impact? And how they're -- how you're thinking about the impact from higher interest rates to their financing costs? How concerned are you looking out over the next year about that?

I'll start with that. We -- so from a readiness perspective, and I know Rich will talk a moment later, we think about underwriting through the cycle all the time. So as we think about consumer lending portfolio, specifically, we've made those decisions over time. We underwrite to the risk appetite of the company, and we believe that serves us well through periods that we may experience. At this point, we're not seeing significant changes in underlying quality. And we're clearly watching that closely, and we are prepared to respond as we see those things happening. And also to your inflation question, we are beginning to see that inflation is impacting some of our checking customers. And we see that in outflows and inflows on the checking side. So it is clear that higher inflation is having an impact in our mass market space, and we see that through the checking balances. Amit could comment on just payment velocity, and what we're seeing from a payment velocity perspective. And so Amit, I'll...

Sure. Let me add to what Brant said. Ebrahim, thanks for the question. Look, from a payments perspective, if you look at the volume, right, we're seeing very strong volumes. In fact, many of you would have seen the reports where retailers are worried, but then it's shifting of categories because it's moving to travel, and people are splurging on holidays. So our payment volumes remain very strong. In terms of the health of the consumer, I referenced this in the presentation, our card portfolio, majority, almost all of our acquisitions have been super prime and prime. So we have seen extremely good health of the portfolio. If I compare it, we are among top quartile in terms of credit performance. Last year versus this year, probably 1 or 2 basis points change in delinquencies. And so really healthy spends, both on debit and credit and commercial, really good quality of portfolio. And I think I'm very optimistic over the next few quarters.

And we're still seeing elevated repayment rates as well. So...

Let me add a few things a took my first answer, though. We always underwrite through the cycle. But when we do that -- and I know Rich will talk about it a little bit more this afternoon. We sensitize for rates. We also do a lot of work on the commodity inputs. It's not something that we come to late in the cycle. It's something that's part of that aggregate moderate to low-risk appetite. And it's the underpinning of what we do. And Steve talked about it, too, others are pulling back. We're maintaining the same discipline in what we do on a day-to-day basis. Perhaps we let other things go by earlier in the cycle. As far as inflation, and Brant hit on readiness, we spent an awful lot of time with our clients working on the day where this may come. They're well positioned. They've been able to pass through substantially a lot of the price increases. So the book is stable right now. We'll see where inflation goes. Most of your economists tell us it's going to stabilize and come down a little bit. It is a measure of a change, right? The change. So feel pretty comfortable about where we are. But I want to be really clear. We've done an awful lot of work on the book with this. We sensitize repeatedly. We do deep dives in the book, and we're really comfortable with where we are.

We'll have time for one more question, Brant.

Manan Gosalia, Morgan Stanley. Rich, maybe just a follow-up on what you said earlier on used car prices and that you're not seeing any stress. I mean I realize that the average FICO on your portfolio is about 780. But can you remind us on how low you go on the FICO underwriting side? I mean that will help us understand the tail risk in that portfolio.

Yes. So our average FICO to which point is in the 760s, 770s. And more importantly than the FICO we use custom card, which is a multidimensional -- has multidimensional aspects. LTV, payment to income, FICO is a part of a term, so on and so forth. So where we go below 670, which is a very, very small percentage of our business, we're doing it using the expertise of our scorecard, okay? So used car prices that will affect us on the severity of default, right? But we're going to go back to -- we underwrite to the frequency of default staying at that really high credit quality customer. And that's really how we're going to mitigate through the times that we have. And in the past 10 years, we've seen used car prices go up and down, but our losses remains steady, and we outperformed because of where we play in the spectrum.

At 670 or less would be typically 1% or less. And it's looked at every month. And we're playing there typically with a very low loan to value or guarantors to it, but you're taking a primary score, not a guarantor score or a combined.

And back to that point, Steve, risk expected loss, we're managing it daily, and we're very nimble and able to make changes if we see something, which we don't.

Thank you all. That will put us time. We do have one more Q&A session after the second set of presenters. So let's take a pause now. Thank you, everyone. We'll take a 10-minute brief break. We'll start exactly at 10 minutes after the hour back in this room. Thank you. [Break]

Welcome back, everyone. I hope you're enjoying the event so far. For those of you who don't know me, my name is Paul Heller. I serve as our Chief Technology and Operations Officer, and I've been at Huntington since 2012. And I have responsibility for technology, operations, our digital teams, our merger and integration teams, our payment team and our transformation team. Prior to joining Huntington, I was a Managing Director at JPMorgan Chase, in charge of the Corporate Internet Group. And prior to that, I was the Chief Technology Officer for the Retail Bank at Chase. Now that you've heard from Steve and our other leaders on our strategy, I'd like to highlight how our technology strategy supports those initiatives. I'm excited to showcase how we feel our scale and product distinctiveness. So let's begin. There are a couple of key points I'd like to leave you with. Investing in digital capabilities is something that you've heard today, we're incredibly committed to, and it's something that I think we've been committed to for the last few years. Supporting growth and scale of our businesses by leveraging an agile and flexible core is critical to our going-forward strategy, and accelerating customer acquisition and deepening with our DNA capabilities is something you heard continuously from my peers. As you heard Steve allude to, we're simplifying our customer journeys through a project we're very excited about. It's called Operation Accelerate. We believe that it has significant opportunities to create revenue and expenses for us. And you'll hear more about that from Prashant in a couple of moments. Overall, we're enabling a best-in-class customer experience and supporting our ability to achieve our financial objectives. As I mentioned, investing in digital is critical to our growth and our scale. We're committed to investing where we will achieve the strongest returns and create the most value for our customers and our colleagues. Over the past 3 years alone, we've doubled our strategic investment to position the bank for sustainable profitable growth now and into the future. And we're committed to accelerating our digital investments to fuel strategic growth across the businesses for the foreseeable future. I'm going to walk you through a couple of examples of those. In Consumer, we've had 10 new major products being launched that bring important features and capabilities to our customers. Example of those things are Early Pay, Standby Cash, Money Scout. We're supporting digital acquisition, and we're driving customers to our best-in-class mobile application. In wealth, we're focused on ensuring that we capture our opportunity in advisory and are enabling personalization. In Business Banking, we're laser focused on our customer experience, and we're digitizing the loan experience front to back. As you heard from Scott, we've made significant investments in EDGE, mobile, and we've redesigned our Internet business online platform to support the commercial digitalization. I think what's most exciting about that is our customers love the changes that we've done and have been very vocal about this. We're holistically focused on leveraging our payment capabilities. You heard Amit mention that a little bit earlier. We are fueling strategic growth in our card and treasury management business, and we've added 19 new product features, and we're picking the right partners to partner with. So we think there's great opportunities for us in the fintech market, and we'll continue to take a look at those partnerships as we go forward. In vehicle finance, we're driving digital onboarding, digital payments and decision-making tools. And we're very excited about the PowerSports launch that Rich mentioned earlier. We firmly believe digital innovation is imperative to sustaining our brand strength and our expanded capabilities will fuel growth in customer deepening and profitability. As we expand our digital capabilities, it's important to understand how advantaged we are with our core infrastructure in terms of both agility and flexibility. Our core drives our scale and efficiency across the bank. By hollowing out our core with a more modular approach, we're creating and launching with technology faster and more effectively. And we're providing integration with our partners, with our new API infrastructure. We are in the first year of doing this. This has been a strategic commitment over the past 3 years to position ourselves for both growth and scale across our business and our products. We're accelerating cloud enablement and can seamlessly scale our innovation across the bank. We have ubiquitous availability and analytics capability with our new cloud-based data platform. And these are delivering real results. We've achieved over $80 million in run rate sales from the TCF integration alone. And when you think about the flexibility of our core, we were able to complete our integration with TCF in 9 months. It's not hard to look around the industry and understand that other similar integrations have taken close to 2 years. So that's real revenue to the bank. We have a long track record of delivering outcomes for efficiency and colleague and customer experience. We are strategically focused on experience and supporting acquisition and deepening across the bank, leveraging data and analytics to generate insights and speed, revenue-producing activities. We're usually -- we're utilizing AI and machine learning to drive Scott's commercial use cases. And we're helping to deepen and acquire new households and customers. We're putting personalization and advice at the forefront. Sandy highlighted our recent launch of Unified Adviser. We're optimizing with our decision engine to deliver insights to all the businesses to support both disciplined volume growth as well as profitable growth. And as you'll hear from Raj, a little bit later on, we believe that our colleague experience is very, very important. We believe that happy colleagues lead to happy customers. And making our customers, pardon me making our colleagues more efficient with the right set of tools to generate maximum value for our relationships. We have constant focus on maximizing the value we can create across the customers' entire lifespan. And we're supporting growth and deepening opportunities across all the businesses through our focus on customer journeys. With that, I'll turn it over to Prashant so he can walk you through Operation Accelerate and how we're driving benefits across the business in the context of that program.

Thanks, Paul. Good morning. Great to be here with you all. I am Prashant Nateri, and I'm Huntington's Chief Transformation Officer. I joined the bank in 2012, my best and most fulfilling career move to date. And I've been in this role since 2021 after previously serving in leadership roles in technology and in our Consumer business, Banking businesses. Prior to joining the bank, I was with JP Morgan Chase for 10 years in leadership roles in operations, technology and in Consumer and Business banking. And I'm really, really excited to talk about Operation Accelerate today. So let's get started. Let's start with an overview. So Operation Accelerate is a holistic approach to enable the bank to significantly scale effectively and efficiently, while transforming the colleague and customer experience. We aim to simplify, reinvent and transform our processes to drive best-in-class engagement, sustainable incremental revenues and efficiencies. So let's double click about how we are thinking about Operation Accelerate. At its core, it is focused on customer journeys, customer journeys and the front to back processes that support customers' interactions with the bank. Our work is guided by 4 principles: of simplification, speed and agility, digitization and unlocking the highest value potential areas. Huntington has always had a very strong continuous improvement mindset and culture. And what we are doing with this program is evolving that into a continuous transformation framework. We have identified initial set of 21 customer journeys, and we'll leverage this framework to continue to do sustainably more and more journeys across various areas of the bank. The efforts and outcomes of these journeys strongly complement and support the business segment strategies that you heard from Brant and Scott and Sandy this morning. Let me showcase one of our journeys, the Business Banking deposit account origination and the exciting work we are doing here. The aim of this journey is to be able to create a flexible, convenient and a simple experience for our new Business Banking customers. As you can see on the slide, flexibility to be able to meet customers' preferences on using the channel of their choice, supported by an on-demand customer service. Convenience delivered through providing adequate information on features and capabilities that the customers can expect from their products and guiding them, guiding them, navigate through their needs and goals in arriving at the right product set. Simplification through the elimination of pain points and friction with a very easy-to-follow process to open and fund accounts. And underlying all of this is the use of technology to unlock efficiencies and to drive deepening opportunities. Let me share a couple of examples of how we are creating value with this journey. Using a user experience-centric design around simplification and simplicity, we are going to drive a 45% reduction in the length of online account opening flow. Digitization and automation will deliver a 50% improvement in the account opening speed for our relationship bankers. And more than 80% adoption of e-Signature functionality as an example. Our efforts with this journey are expected to drive significant online account opening growth and deliver a customer satisfaction that will be industry-leading, industry-leading. We've completed scoping for 9 of the initial 21 journeys, and will be done with the remaining journeys within the next 2 years. You're going to hear from Zach later on about our focus on sustainable incremental profitability, positive operating leverage and incremental investments. Operation Accelerate is one of the core components of that focus. We are expecting to deliver sustainable incremental run rate benefits of about $150 million, and we've already identified $70 million from the first 9 journeys. We are really proud of what we've accomplished thus far and even more excited about what's yet to come. Paul, back to you.

Thanks. Operation Accelerate is another example of the important strategic priorities we have within technology and our transformation teams. And hopefully, you can see that. As Prashant mentioned, it's also something that we think creating a skill like that in our company is something that will serve us for years to come. Investing for sustainable profitable growth with our bedrock technology foundation to provide a highly agile and flexible core infrastructure is what we are trying to build. Prioritizing digital to enable firm-wide growth, differentiating our brand and customer experience with our proactive investment in people, skills and emerging technologies. As Prashant mentioned, we're putting our customer experience and our colleague experiences first. And we think that will be key to driving the improvement that he just mentioned. Optimizing for top quartile performance by providing speed, quality and efficiency to the organization, sustainable ways to reduce expenses and drive our growth strategies, focusing on customer journeys and driving value with our data management platform is what we're all about. With that, I'll turn it over to Helga.

Good morning. Thank you, Paul. I'm Helga Houston, Huntington's Chief Risk Officer. It's good to be with you today. I joined Huntington in 2011 after 21 years at Bank of America in various business risk and credit roles. I'm responsible for leading our corporate risk management programs and ensuring that our strategies stay consistent with our aggregate moderate-to-low risk appetite. I know that one of the things you've heard today, and it was -- it actually made me incredibly proud as all of our business leaders really talked about how they own the risk in their businesses. Tone from the top is hugely important in setting that. And so I just want to thank Steve and thank all of my partners for the way that you model that. It makes me incredibly proud to be part of Huntington, and it is one of the things that differentiates us. So that with that, let's go ahead and begin. All right. So here are the key risk management messages I want to leave you with. I mean you've heard them throughout the morning. First, we have a clearly established aggregate moderate-to-low risk appetite. We're incredibly disciplined about that. Second, we have a culture that is really second to none when it comes to risk ownership permeating the company. It is incredibly important part of our culture, and we believe it's a key differentiator for us. Third, we're diligently focused on staying ahead of regulatory expectations and making sure that we're well positioned to scale. We believe that our disciplined, consistent and holistic risk management approach ensures sound strategic execution. So let me take a little moment to go into our holistic risk governance framework for you. First of all, we have the tools to take risk and manage them effectively within our risk appetite. We have quarterly risk reviews, and we're really disciplined around this at the business unit level as well as at the enterprise. We ensure that our strategies are consistent with our risk appetite. Talked about this a lot. Risk culture is critical for long-term strategic growth. At Huntington, everyone owns risk. And by that, we mean that we expect our colleagues to identify risk, to raise their hand. They're the primary people that we hold accountable. Notably, we also engaged third parties on a periodic basis to really benchmark our risk programs against peers who are significantly larger than us. We just try to be forward-looking and make sure that we're staying ahead of those regulatory expectations. Regarding our risk framework, we have very clear lines of defense. First, we talked about this a lot. Our revenue-generating business are responsible. They have the primary responsibility for owning risk, and they identify most potential risk issues. All of our business leaders have Segment Risk Officers with whom they work very, very closely. Corporate risk, we're responsible for establishing and overseeing our risk framework, and again, making sure the boundaries are clearly in place for us to stay within our aggregate moderate-to-low risk appetite. Lastly, we have third line reviews that ensure that we're holding ourselves thoroughly accountable. Comprehensive and disciplined risk management ensures accountability across the business, both now and in the future. Our risk management is forward-looking. Discipline ensures consistency and not only credit performance, but ensures that we are really ready to grow and to scale. This slide, it summarizes how we think about our foundational risk pillars. Discipline, not just in credit, which I know we talk a lot about, but also market, liquidity, capital, compliance risk management, operational risk management, technology, cybersecurity, climate among others. As you just heard from Paul, our technology and cyber risk management strategies are vital to our success, and we're incredibly focused around the risk impacts of being understood in all of the investments we make. We really take a threat-based or risk-based approach on all of our cyber investments. From a market risk perspective, we've been dynamically managing the balance sheet against what's been obviously a very volatile rate environment, making sure that we continue to execute on a hedging strategy to protect ourselves from longer-term downside risk, while also making sure that we're well positioned for near-term higher rates. As you know, and you've heard a lot about we have a long history of managing deposits through cycles, and we continue to manage the portfolio at a very granular and segmented level to ensure pricing discipline and growing, as you've heard Brant and Scott talk about, primary bank relationships, which we believe will ultimately stay with us longer and allow us more pricing flexibility. We also have an active program for managing capital and maintain a comprehensive capital adequacy program. Regarding climate risk, we have an enterprise commitment and dedicated resources. In short, we are continuing to focus and invest in critical areas of risk to ensure that we're well positioned for growth and scale. Now having said all of that, effective credit risk management remains foundational. We are very proud of our relative CCAR performance and believe that it showcases our risk governance and execution of our framework very well. Not to be missed, these results include the TCF acquisition, FirstMerit acquisition prior to that. And so the consistency of that performance is really important to us. Our expected credit performance through severely adverse cycles, and again, different scenarios in all of these years consistently outperforms peers. We also have a very solid loss coverage ratio. This reflects the long-term benefits of our aggregate moderate-to-low risk appetite. We believe that we can consistently sustain these relative results through our credit risk management expertise. So with that, let me turn it over to Rich Pohle, our Chief Credit Officer.

Good morning, everyone. I'm Rich Pohle, our Chief Credit Officer. I joined Huntington in 2011, and I've been in my current role since 2019. Prior to joining Huntington, I spent 26 years at KeyBanc, where I served in a number of leadership roles. I'm going to talk to you today about how our credit approach supports prudent portfolio growth and embodies our risk governance framework. So let's begin. As Helga mentioned, we think about risk from the top of the house, but these are the credit-focused messages I want to leave you with today. First, we are disciplined through the cycle with respect to our credit appetite. Second, you've heard a lot about culture, and that permeates through the ownership of risk in the company. So the alignment that we have with our lines of business with respect to our credit appetite is remarkable. Thirdly, we have an effective and well-established metric-based system to ensure corporate-wide company risk metrics all the way through from an effective risk management standpoint. In addition to the front-end guidance that we established for all of our lines of business, we also have a very disciplined concentration framework that results in consistent credit performance. As you can see from the slide, it starts with industries and works all the way down to individual borrowers. As Scott has mentioned, our relationship bankers, our underwriters, they're all very in tune with what's going on with our customers. We have industry-focused national lines of business, and then we have specialty businesses that have scale, and the alignment between our business units and our credit philosophy is critical for the success of all of those ventures, and we absolutely have it. With respect to portfolios, we have limits with just about all of our lending portfolios, and many of them have sublimits underneath them to ensure additional granularity. We also have relationship limits. And by relationships, I mean, private equity groups, auto dealer groups, commercial real estate developers, other institutional owners of assets, where you might have numerous credit facilities to numerous borrowers under the umbrella of that ownership group. And we set those limits based not only on the length of the relationship that we have with them, but more importantly the depth. What's the connectivity from our organization to their top to bottom. And so we get a very good sense of not only what their capacity is to support their businesses, but their willingness. And have they demonstrated the willingness to come in and support their credits when they need to. And we base those relationship limits on that. We also have a very prudent risk-based individual limits. And then an overall limit on concentrated exposures, so you might refer to these as tall trees. And the objective there is to make sure that tall tree, there's not a forest there that gets too large with respect to tall tree exposures. We're leveraging data and insights along the way with respect to how we manage these concentrated exposures. And at the end, if you have a framework that results in not being overweighted in any particular industry, portfolio, relationship or individual borrower. On Slide 102, you can see in the center of the slide, just the balance that we have within our portfolio, 55% commercial, 45% consumer. I love this balance. The consumer portfolio gives a lot of stability through the cycle, and it's a great foundation for what we do throughout the company. And when you hear Brant and Scott and Rich, and Sandy talk about the alignment that they have and the prioritization that they have on credit quality and picking high-quality borrowers, it really provides for consistency of performance through all sorts of cycles. If you look on the consumer page, you can see that we are overwhelmingly a secured creditor. Over 95% of our consumer loans have collateral. And we are also intently focused on prime and super-prime borrowers with an average origination FICO of around 770. As Rich mentioned, we also have proprietary scorecards in many of our businesses, which is also a competitive advantage for us. When you think about our unsecured exposure, Amit mentioned the rollout that we're going to have with expanding our card growth, it's a very disciplined process that we go through and we're lending unsecured, very disciplined. On the commercial side, we are also primarily a secured creditor. 90% of our loans are secured by accounts receivable, inventory, machine and equipment, commercial real estate, again, mitigating risk there. We have a very nice diversification within the portfolio with respect to lines of business and industries. And we've also got very nice geographic and property-type diversification within our commercial real estate group. When you take a step back and you look at the discipline we have, the diversification, the aggregate moderate to low-risk appetite, that's what foundationally sets in place the CCAR results that Helga talked about. How we consistently perform near the top of our peer group across numerous cycles. I want to talk a little bit about kind of where we are right now. I know there's a lot of talk around the economy, what's going on there. And I just want to spend a few minutes going through how we're approaching that. First of all, we're entering it from a position of strength. As Helga mentioned, our coverage ratio of 1.89% at the end of the third quarter was second highest in our peer group. We've given you guidance for the chargeoff number for the entire year of less than 15 basis points. We're at 8 basis points through the end of the third quarter. We will be below 15 basis points for the year. I can guarantee you that. One of the things that we pride ourselves on is the active communication and dialogue that our bankers have with our customers. And if you think back to March and April of 2020 and COVID and all just the unique circumstances that we have been going through over the last couple of years, that communication and that outreach that we have with our customers is more important than ever. And our bankers are out talking to our borrowers about inflation, higher rate environment, supply chain issues, all of that. And they're also doing some coaching along the way. They're talking to their borrowers about readiness plans. What are you going to do if revenues drop by 10% or 15%, if commodity prices remain high, we remain in a high interest rate environment. And so they're preparing their customers with ideas around levers that they can pull to get through this as well. We take those learnings back, we connect the dots. We start to make developed themes around what we're hearing in the book. And this is long before they start showing these issues start showing up in the financial statements. I mean you're getting this kind of real time. And there's a lag between these impacts show up in the numbers. It's just another example of our proactive approach to risk management. In terms of how we're approaching the market today from a new business standpoint, as Scott mentioned and Brant mentioned, we're always underwriting to a potential downturn. Even when there's no clouds on the horizon, we're putting the umbrellas out. So we really don't have to change the approach that we take to underwriting credit. It's part of our DNA. We've got a very experienced credit team that has been through these cycles before. We are making sure that we're underwriting and sensitizing our loans. And the other thing that we do is we've always, in our client selection process, make a determination, is this a company we would want to bank in a downturn? Does it have the management team that's demonstrated the ability to manage through different cycles and different challenges? And that allows us to be a consistent provider of capital through all cycles, which is our goal. That being said, we have made some changes to some of our underwriting. Leverage lending, for example. We don't have a big leverage lending portfolio, but it's about 5% of our total loans. We're going upmarket there. Commercial real estate, construction, the long-term part of health care, all areas where we thought it was prudent to adjust our underwriting guidelines just in terms of where we are right now in the cycle, but not wholesale changes. On the consumer side, the same thing. When you have 770 origination FICOs and most of your lending is secured, you don't have to do a whole lot to your front-end guidance there, although we did tweak loan to values with respect to some of our residential real estate products. Last thing I want to say on this is the mindset that we go into with respect to how do we treat our customers in a downturn. As you heard at the beginning of the presentations today, part of our value is making people's lives better and helping businesses thrive. And that's true even in a downturn and more true in a downturn. We have groups in consumer, called home savers, auto savers. In our commercial group, we have a financial recovery group. And you can tell by how we name these groups, what their mantras are. They're to rehabilitate, they're to preserve relationships. And we will work with our customers as long as they're working with us. We have the capital and the institutional patience to do that. And the goal is to not only maintain relationships, but to build them and strengthen them. You hear a lot of times about how you can build a customer for life with how will you treat them when things weren't going well. And that's the objective there. So we feel heading into the cycle, we're in good shape. We've got a great portfolio metrics right now. We expect to continue strong ACL coverage, fantastic underwriting and a great group of people to support our customers on the back end. I want to leave you with the risk management messages from the top of the house that Helga gave you a little bit ago. First, our clearly established aggregate moderate to low risk appetite provides us a disciplined approach through the cycle. Second, our culture and our ownership of risk on the part of our colleagues is a differentiator, and our governance is strong organizationally. And third, we put regulatory expectations at the forefront of what we do, and we make sure that our risk practices are scaled and are there to support the long-term strategic needs and growth aspirations of the company. So with that, I will thank you for your time today. I appreciate that. And I'll hand it over to my friend, Raj.

Chief Credit Officers need a lot of hugs, a lot of hugs. You're going to need a lot more. Good afternoon. Good morning. I'm Raj. I am here to speak about something I am very passionate about, our colleagues. And for the 20,000 of our colleagues that are not in the room today, but are right out there, thank you. We trust our colleagues every day to build our brand, strengthen our culture, and drive long-term value. So Raj Syal, I'm proud to be Chief Human Resources Officer here at Huntington, despite my youthful appearance, I have 35 years of industry experience. I started my career in Western Canada. Amit, you are going to Winnipeg. Take a warm coat. But we are really pleased to be here with you today as we tell our story. So mine, I started like Sandy in the branches 35 years ago as a teller, moved my way up through the consumer bank and fortuitously took a 6-month assignment in HR that has now led to a career of over 30 years of progressive HR leadership roles. I tell, Steve, every day, he's the #1 reason I came to Huntington. Here's the real story, those guys. And our ability to build a colleague-centric organization for a company that is growth oriented. You don't get that kind of opportunity, certainly not after 35 years, I couldn't be more excited to do that. Sure. Given all the times that we face, whether it's the pandemic or whether it's the generational preferences, in our workforce today, we have a lot of opportunity in front of us to deepen our culture, performance and value with incredible colleagues. So let's talk about it. You've heard all through the presentations, colleagues, customers; colleagues, customers; customers, colleagues, the experiences that they have together really inform us. The experiences and what they tell us are their preferences, we harness that. We harness it through data. We harness it through great professionals. We harness it through service. We believe our fully engaged colleagues are just going to deliver better customer experiences, and they are inextricably linked. So we have to have exceptional colleagues. It's a key enabler to our business strategies. You hear Brant. You heard Sandy. You have Scott on the revenue side. We reiterate that multiple times. So our approach to do that is engage, develop, retain, and attract those 4 in that order. Engage, develop, retain and attract, the very best talent possible. We want Huntington to be the best place our colleagues are going to ever work. And to do that, we listen to them. They tell us a lot. We understand or hope to understand what's important to them. And then we prioritize investments through their voice, what we call the Voice Survey, our annual survey, to hear our colleagues' preferences to understand what they want, so that they can serve our customers in the way our customers want to be served. Again, it significantly improves our customer experience. We're in a very diverse footprint. And for that diversity, equity and inclusion is critical to our success in our regions, in our go-to-market strategy, in the local market. And for that reason, DEI&C, diversity, equity, inclusion and culture is part of our executive leadership team. So we started our journey over 6 years ago, our cultural journey. How do we become a category of 1? What is a category of one? How do we be better, but leave ourselves room to improve each and every day? Connecting colleague and customer experiences, forgiven. But we have also grown, whether it be the importance for its merit placed on colleagues or the new growth markets that we achieved with TCF. We listen and learn in each one of these opportunities. The voice of our colleagues, shape our culture and they allow us to expand and grow. So we listen to them and we incorporate best practices to become One Huntington today. One Huntington where one voice of colleagues matter. They are highly engaged through our vision, our values and our purpose. They are our brand, as you've heard us say, but what's the proof point of that? Their involvement in local service and engagement, but also guess what, our colleagues created our purpose and values, the things that we live by every day and are important to them personally and professionally. So you see a bunch of numbers on the page here. Why are they important? We look back to the voice of our colleagues, and we say, okay, how do we thematically bring things together. What we want to know how we're doing cultural perspective. We want to know about the trust relationship, trust in leadership, our trust in that. And we now are they engaged? Do we have an engaged workforce. And what I can tell you is that those 3 indices have guided us for over 8 years in excelling and being better year after year. We have top decile culture, top decile trust when compared to Fortune 100 companies. A direct reflection of how our colleagues think of us. We take responsibility, great responsibility through this leadership team about what we hear from our colleagues and how to prioritize what matters most. Whether it's work environment, whether it's career advancement, whether it's manager behaviors and actions. But despite these outstanding results, we know from pre-pandemic premerger levels, we can be better. Engagement scores are also very high. 80% of our colleagues participate in our Voice Survey compared to industry averages of low 70s. So we have a very engaged workforce. But again, we can be better. We strive to be better, we want to be better. And finally, another differentiator. This year, in my backpack over there, I'll show it you later, our colleagues created the [indiscernible] for people guide to our purpose, how we want to guide ourselves as we serve our customers, all colleague led, remarkable. So we also annually, as you would expect we continually review our programs and invest in our colleagues. Our above median spend is assessed, and we listen to what our colleagues want most, whether it's well-being, mental health support, new medical programs, such as ABA therapy and fertility, prefunding tuition programs, making it easier to get a 401(k) match. We'll talk about that or incremental PTO. These are only recent examples of how we've reinvested back in our colleagues at their request, what they have told us. Again, we take that information, we shape our incentive plans, our equity plans, all of the things that you would expect, but it also informs us what's important to them. As of January 1, 2023, we're going to be moving to $20 an hour as a minimum wage across our footprint. We're currently at $19. That's a significant investment to make sure that we are market competitive and able to attract the very best talent to Huntington. You've heard earlier about share ownership requirements, what a way for senior leadership to align ourselves as the top 10 shareholder to our shareholders and also double down and commit on our own performance. Huntington also has the track record of being top quartile amongst peers for low colleague turnover. We believe that's because we put our colleagues first, we invest in things that are important to them, and we continually review staffing levels to make sure that we are supporting them in their day-to-day responsibilities. This all brings us back to making sure that we engage, develop, retain and attract the very best talent to make sure that Huntington will be the best place they ever work. So I want to highlight a program here that again was a colleague idea that came to life. We call it our Exact Track program. Digital investments and upskilling of our colleagues. We do it everywhere. Everybody does it. This program allows us to pre pay tuition and invest in our colleagues upfront. We're moving cash flow barriers to advance and grow, but also to make sure that we are trusting them and building trust through completion of the program, knowing that they will complete it upfront. We're getting great feedback on this. Again, it makes it very sticky from a retention perspective, and over 50% of the colleagues that have gone through the first cohort of this program have either been promoted or moved to other areas of the bank to advance and grow. So we have clear milestones and goals. We are exceeding them. We use the voice of our colleagues to learn and do better. And we report our transparency through our ESG reporting or affirmative action plans and have made significant progress to date. We also align social equity and diversity goals with each one of our business and segment leaders to make sure that we're all focused on what's important. There's another index as part of our colleague Voice Survey, the DE&I index, top decile at Huntington. Over 68% of our total workforce is diverse. 20,000 colleagues, but we want to pull through to make sure that each 1 of those colleagues has an opportunity to advance through middle and senior management. So we have increased that goal amongst ourselves to make sure that we are developing colleagues to have a 50% diversity middle to senior leadership in our company by next year. Finally and most importantly, all of our leaders in the company, people leaders, have leadership goals as it relates to developing colleagues. They are educated in purpose driven hiring, and they focus us on a culture to strengthen equity, trust and engagement for all colleagues. So I'll wrap up. The 3 things you've heard today. First, we're focused on investing for sustainable profitable growth through colleague experience, engaging, developing, retaining and attracting top talent is absolutely critical. Second, we're differentiating our brand and customer experience. We believe our colleagues are our brand. They are the face of Huntington each and every day. And lastly, we're optimizing for top quartile performance and value creation. Our incentives and goals are aligned to ensure strong performance and shareholder value across the organization. So with that, Zach is going to tie it up in a fancy bow today and give you the prospects for the future.

Thank you, Raj. I'm Zach Wasserman. It's a pleasure to be with you all today. I'm Chief Financial Officer, and I joined Huntington just over 3 years ago in November of 2019. I'm responsible for all of our financial management functions. I also oversee strategic planning, mergers and acquisitions, and our Huntington Corporate Ventures group. I've worked in the financial industry since the late '90s. Started my career out as an investment banker and then moving on to a series of corporate finance roles. Before joining Huntington, I worked for Visa for 4 years as CFO of North America. And before that, American Express for 15 years in a variety of divisional CFO roles. I'm thrilled to be with you today to pull everything together and ultimately to illustrate how everything you've heard today manifests itself into the financial targets that Steve shared earlier today. So let's get going. As I begin today, there are 5 key messages I want to share with you. First, we have a proven track record of delivering solid results. By that, I mean, we do what we say we're going to do. Second, we're uniquely positioned with a high return profile. We have the scale to be big enough to punch above our weight, but the size to be nimble and to execute at pace. Third, at our core, we're operators. We're executing on a clearly defined set of strategic initiatives with a disciplined approach and financial rigor. Fourth, we're laser-focused on generating a top-tier return on capital, generating significant excess returns for shareholders. And finally, we're well positioned both to generate long-term value and over the short term to manage through the current period of economic uncertainty. I want to share with you on this slide some of the growth that we've seen over the last 5 years in some of our key metrics, namely revenue and profit. You can see we've significantly grown both over last 5 years, both organically and through targeted acquisitions. Our return on capital has been excellent, driving top-tier returns. Adjusting for the accounting AOCI marks this year, our returns have been likewise outstanding. Ultimately, this all boils down to the earnings power of the company, represented by earnings per share, which is up 50% in the last 5 years. As we look forward, we have high-quality revenue streams and strong momentum. We have a commitment to continue to invest in our business, even as we manage with disciplined expense management. We have the team and the culture in place to sustainably outperform. We talk a lot about top quartile performance. And you can see on this slide what we mean by that. We're in the top of the peer group on key metrics of value creation. Return on capital, efficiency, profitability, charge-offs. And while some of our peers are strong in 1 or 2 of these metrics, we're 1 of the only banks that's in the top 4 in all of them. That top quartile performance is not an accident. It's the product of a very disciplined strategic planning and execution approach. This is designed to define the path to long-term value creation and then deliver it. It starts with our brand. It's supported by products and services that are highly differentiated. It's bolstered by a continual drive to ensure we have the capabilities and solutions to win in the market. Behind the scenes, it's in our core to drive for operational excellence and efficiencies with continuous improvement. I think you've heard and you've seen from my colleagues today, this is an execution organization. We have a culture that sets a high bar for our goals and is relentless about achieving them. All of that guided by a very rigorous capital allocation framework, where we allocate capital to the businesses that have the best returns and the strongest prospects for long-term earnings growth. And what that generates is what you can see on the right, top to your ROE, sustainable revenue growth, positive operating leverage and a disciplined credit and risk management. You've heard a lot today about the growth strategies of our business lines. Ultimately, we believe and we hope you were convinced you, we're a growth company with a significant momentum and ability to continue that growth long out into the future. Laid out on this slide is the relative contribution to that growth of each of the major business lines you heard from. Not surprisingly, Commercial and Consumer are the lion's share of that growth given their size and scale within the bank. However, you can also see Business Banking, Payments and Wealth contributing. Vehicle Finance is a core part of our portfolio and will be additive to revenue growth even as we optimize for returns. And all of this is supported by a strong set of new revenue synergy opportunities from the TCF acquisition as well as the productivity enhancements and channel effectiveness initiatives being driven by Operation Accelerate. The TCF acquisition was a great example of what I said earlier, delivering on the commitments we make. We announced the TCF acquisition in December of 2020. We closed less than 6 months later in June of 2021. We converted the customers and the systems to the Huntington platform just 4 months after that, all with great quality and customer experience. We executed on the cost synergy program delivering it in full and earlier than expected. We reinvested a portion of those cost synergies into technology development as we had planned, helping us to double TechDev over the last 3 years. Now our focus is on executing on the revenue synergies we've been talking about. They're already beginning to come online, and they'll fuel sustainable revenue growth for many years to come. In total, we see the 5 revenue synergy categories delivering at least $300 million of incremental revenue by 2025. To give you a sense, we estimate this will represent approximately 1% revenue lift per year over the next 3 years. Really significant growth opportunities and further fuel for the earnings power of the company. As I walk through some of the major elements of the business, I want to start with deposits. We view our high-quality, stable deposit base as the foundation of the value the company. We have an unwavering focus on driving primary bank relationships. I hope that came through loud and clear from our presentations earlier this morning. And as a result, we've grown deposits and improved the mix over time. And we continue to perform well on this front. We've grown deposits in 2022 even as we've managed beta in a highly disciplined way. The growth of our loan book has also been significant over time, not only in volume, but also in diversification. We're focused on growing loans that are both sustainable and have solid returns that align to our capital priorities. As always, our growth is guided by our risk appetite with rigorous client selection and consistent and disciplined underwriting. Our goal ultimately is to generate consistent growth in net interest income revenues on a dollar basis over time. Supported by that deposit and loan growth, I mentioned earlier, as well as our strong NIM, we drive NIM with a conscious and explicit management of asset sensitivity over time to benefit margins when rates are rising, and to protect margins when the likelihood falling rates is increasing. Through the cycle, we've consistently managed NIM to be in the top tier of the peer group, and my expectation is we'll continue to do that and significantly benefit from this current rate cycle. Even as we're laser focused on spread revenues, which are the majority of the revenues of the company, we know there's a opportunity to augment that growth with value-added fee businesses, to deepen relationships with customers, even as they produce great economics for us. As we've talked about, there are 3 primary areas that will fuel this growth. Capital Markets, where we have great traction within our core business, not to mention exciting synergies that come to us from the Capstone acquisition. Wealth Management, where we have a tremendous opportunity to serve our banking customers and earn recurring revenues. And payments, an area that's near and dear to my heart that I believe represents one of the opportunities for us to drive product innovation and long-term revenue growth. You've heard a lot today about our strategies and about our growth initiatives, but I will tell you all of that is moot if there aren't the critical resources to fund them with operating investments. When I say operating investments, what I mean by that is the expense capacity to fund technology development, marketing and select additions of new personnel that can drive those initiatives. This page is intended to highlight the model that we use to do that. It all starts with and is guided by our commitment to positive operating leverage. We will grow the overall expense base of the company, less than the growth rate of revenue, fueling sustainable pretax margin expansion and strong levels of profit growth over time. Within that constraint, we will grow the portion of expenses that represent investments at double the growth rate of the expense base. That outsized growth in investments is fueled by continually executing on efficiency and expense reduction initiatives within the baseline operating cost of the company, holding that baseline to a lower level growth. It all goes back to our disciplined expense management. It's supported by systematic reengineering, Operation Accelerate, our branch and other real estate footprint, optimization opportunities and the continual grinding out of scale benefits as we grow. All of our growth is guided by and controlled by our aggregate moderate to risk appetite through the cycle. We have a saying at Huntington, and I think you've heard it for several of our executives, Steve, Helga and a number of others. Everyone owns risk. It's truly at the heart of the company, ensuring we focus first on the quality of the customer, that we actively manage toward purposeful diversification, that we're clear-eyed about risk in the portfolio, rigorous in our reviews, and conservative in our credit reserving. Our results demonstrate that this approach is working and driving our performance. Our conservative reserve posture with one of the highest coverage levels in the peer group leaves us in a position of strength now. Over the long term I'd expect us to continue to outperform from a credit and risk management perspective. I spoke about capital allocation earlier, and I want to expand on that now. Our capital priorities are very clear. First to fund organic growth. Second, to support our dividend. And third, to return capital to shareholders in the form of buybacks and all other uses. Over last 6 years, we've returned over $6 billion to shareholders even as we've managed our CET1 capital ratio to be within our 9% to 10% operating guideline and funded our top-tier dividend yield. Over the last decade, at the right moments and with the right partners, we've added significant value with targeted acquisitions. In each of the major categories of acquisitions, we've been highly disciplined and very discerning to find targets that are both on strategy and which represent compelling financial opportunities. Two bank acquisitions, over 13 years, have added economies of scale and powerful new capabilities and markets. Our financial services bolt-ons have augmented our organic growth and in particular, have helped us to build a formidable capital markets business. And we just completed our first Fintech acquisition with Torana this year. Let me be clear. 99.9% of our energies are focused on growing our organic core business. But there could be, over time, as Steve noted earlier in the Q&A session, more opportunities for synergistic bolt-ons to augment our organic growth. Now, I want to shift to where we're going over a medium-term horizon of the next 3 to 5 years. As we stand here today, we're clearly at a moment of heightened economic uncertainty. One of the Bedrock principles, Bedrock Principles, by which we manage the company, is to be dynamic, to analyze multiple potential paths to the economic environment and ensure that we have action plans ready to manage through them to execute and ultimately to outperform. As we look out over the medium term now, there are a number of potential economic scenarios that could come to pass. Our baseline scenario is aligned to the general economic consensus, which forecasts a relatively short and shallow recession in the first half of 2023, followed by a modest economic recovery, inflation gradually subsiding, and is informed by the forward yield curve. That's the scenario upon which we've based our financial guidance. In that scenario, we'll manage through the short-term economic trough, while continuing to execute on our long-term strategy and the revenue synergies. We'll maintain our disciplined capital allocation to support that growth. And leverage the expense model, I talked about before. If the economic scenario plays out more unfavorably, like a prolonged period of stagflation or a more severe downturn, we'll be ready to manage through those as well. They'll be more difficult, and that will require us to pull more levers. But we have confidence in our ability to manage through them and to ultimately get back to our long-term growth path as the economy stabilizes. So that brings us to our targets. We were very purposeful in deciding what these targets should be. We wanted metrics that were at the core of value creation, profit growth, return on capital, the commitment to drive efficiency. In our baseline scenario, we see sustainable PPNR growth of between 6% and 9% over the medium term. Return on tangible common equity consistently above 20%. And when adjust -- when backing out, AOCI in the range of 17% to 19%. Positive operating leverage, which has been a long-standing commitment, will continue to be critical for the future. Additionally, we expect CET1 capital to remain in the operating range of 9% to 10%. Net charge-offs of 25 to 45 basis points of the cycle. And tax rate will continue to drift higher as it has for the last few years, as we scale pretax earnings and trend towards statutory rate of 21%. On the next slide, we've broken down the drivers of our ROTCE target. We expect to maintain or grow our returns from here, driven by sustained growth in earning assets and our strong NIM, supported by fee growth and the efficiencies that are driven from positive operating leverage. Offsetting these positive impacts are the natural growth in provision as we support the growing balance sheet and the tax rate trending toward that statutory rate. All told, our outlook is for a strong and sustained level of return on capital. In conclusion, we're investing in our critical growth initiatives with a highly disciplined capital allocation framework. We're differentiating with new offerings, innovative products, and added capabilities, all with a high degree of financial rigor. And we're optimizing for top-tier performance through the quality of our execution and the strength of our organization. We are bullish about our long-term strategy, and we believe it represents a compelling value creation opportunity for our shareholders. With that, I'll pass it back to Steve for some closing comments.

Okay. Home stretch now. You've heard a lot from us this morning, and we're very grateful for your attention. And as I said earlier, it's just great to see you after this -- these last couple of years. So a couple of things. I think we gave you some surprise in terms of the bullishness on the revenue growth engines. We fundamentally believe we've got a great near term, medium-term future for us. We've got momentum in these business lines, as you know, the strategies and plans are clear. The initiatives have been communicated internally. We are already executing against a number of them. That momentum will drive continued growth. Secondly, our colleagues drive our culture and the culture is an incredibly important intangible asset. We have the privilege to lead 20,000 people. You heard from Brant, why he selected to come to Huntington, he could have gone anywhere. Culture. And that resonates with many of our colleagues. And it is part of the secret sauce that makes us different. Now we have a powerful franchise. You've heard about it this morning. What we've achieved with the brand, where we are with density and market share, and yet we have huge opportunities in those franchise markets. Combine that with the national verticals that we have, the specialty banking, and we've got this very unique combination that's occurring. And when we've acquired companies in the past, you saw Macquarie and Hutchinson Shockley, we've integrated them very, very well. The management team of Hutchinson, Shockey, the management team of Macquarie, now Huntington Technology Finance, they are the same teams that were in place when we made the acquisition. We're thrilled with Capstone. All of these help build out what is already a powerful franchise. We're operators. You've heard that repeatedly. When you think back to where we were in 2009, I didn't say it, but someone did, we were thrift-like. We're not that way today, and we're 3.5x the size we were. Returning significant equity to our shareholders, a great dividend. And we have a very strong reserve position to go into whatever is ahead of us, with a very disciplined, multi-decade now, emphasis about aggregate moderate to low risk appetite. We are not changing things internally. We're ready to go. We don't need to tune any of the things on risk management that we had the wholesale remake in 2009 and '10. Operators, we don't know what's coming at us. We showed you 3 scenarios. But I know we will adjust and be nimble and respond timely, and we'll find opportunities just like we did in '09 and '10. Some of those may be with a bit of courage, which was referenced earlier when we did the Fair Play philosophy in 2010, but we're long-term owners. If we don't believe it, if we don't see the value creation, if we don't think we can manage it or we don't like the risk profile, we're not going to do it. And I'm not talking about the banks. We're not -- what I'm talking about agile business lines to what we have today. There's always opportunity when things get tough. And so we're going to drive that core. And we may find some little things we can tuck in and further build out along the way. I think we're very uniquely positioned. These revenue engines have been demonstrated already. It's not pie in the sky. We're going to build on them further. You heard that all morning from my colleagues, my partners. Our risk management is really good, just those DFAST tests. I've been saying it for years, I don't think you really got it. Well, it matters now with the uncertainty. We are either #1, #2 or #3 in virtually any scenario in terms of lowest loss rates and we come into it with a strong reserve position. So like the hand we have, we've got very good discipline in what Zach and [indiscernible] teams and my partners are doing generally with how we're allocating capital and what we're doing to manage expenses. I'm thrilled with Project Accelerate. That's going to make us more efficient, revenue and productivity. That's a significant move on our part, and we into that. We've already gone through 9 of the journeys. We know what we have to do, the models prove it. Lastly, I think we have an exceptional management team, and I emphasize team. You got a glimpse of that today, and many of them were probably secret weapons to most of you. We're really fortunate. We're going to be the leading people-first, digitally powered bank in the nation. Maybe in a couple of years, we drop digitally powered, because we're there. It's all rolled out. We'll keep adding to it, I'm sure, but we're there. We'll still be people first focused. That's the nature of our business. Colleagues, customers, how they deliver services and what we stand for in terms of our values with the community. It's a powerful recipe. It's what makes our local model work very well, and the national business lines complement where we overlap and otherwise they drive revenue and growth. You've got a very strong sense from us today of our conviction in our future. And I just want to make sure you feel invited to join us. So with that, I'm going to ask my partners to come back on stage, we'll do another Q&A session. Thank you very much. Do you want to take a seventh inning stretch? You guys have been in the seats for a while, stand up.

Erika, we will go to you first. We got a mic over here. Mic over here, someone. Okay. Don't be bashful. Thank you, good job. All right, you're the comedian. Excellent. Vehicle is a whole new level. Thanks, Julie. Thanks, Amit. Got it. Michael, Scott, Donald, Mike, who's hiding back there. Paul, okay.

Much to the chagrin of my colleagues, I do have 2 questions. I'm sorry. My first question is for Zach. As we think about the 6% to 9% PPNR growth, given the tailwind from rates, it is clearly massively exceed that next year and then perhaps in 2024, it's not going to be as easy, right? So how should we think about the frame work of that 6% to 9%? Is that a goal medium term once the volatility from rates stabilize or is that -- are you always going to calibrate your expense plan to the revenue environment? And my second question is for Steve. You're the longest tenured, large regional bank CEO. And clearly, the transformation has been remarkable since then of the company. Whenever it is, it's time for you to retire, what would be the single thing that you would say, I had a very successful run as CEO, and this is why?

So the 6% to 9% -- I'll just reiterate one thing I said, which was we really thought long and hard about what those targets should be and tried to think about what was the earnings power of the company, given the growth opportunities we have in front of us, over the moderate term, let's call it, 3 to 5 years. To some degree, it started with what's going to be the CAGR over that period. And what's a reasonable CAGR. I think it's reasonable to assume that it's certain years we might exceed it. But we really think we could be within that at a minimum over most of the years. And I agree with your premise that 2023 is shaping up to be a pretty nice revenue year and profit year. But I do think we can continue that out into the future, continuing to drive loan growth, continue to drive deposit growth and driven by those fees. One thing I didn't mention in my presentation, but I'll just offer, generally speaking, when I think about the model, I think about 50% of that profit is going to come from spread, about 20% from fees and about 30% in the ongoing efficiency improvements of driving positive operating levers, to give you a sense of the kind of the fundamental drivers of it. And so we feel great about it. It really comes back as I said to the long-term earnings power and the growth opportunities that we see ahead of us over that a reasonably long period of time.

Okay. Next question, I'm sorry, Erika. When that time is right for me to move to retirement, which, by the way, I'm not looking at and the Board isn't over the -- in the near term. But when that time is right, I want to be able to be proud about, did our colleagues deliver, did we deliver on our purpose, did we deliver for our shareholders. Have we made people's lives better where we work? Have we helped our businesses, our customers in their journeys and are the communities better off. If we have that, I'm going to feel very proud.

Matt Connor, Deutsche Bank. Zach, can you elaborate on the interest rate positioning? I think you guys have been adding some downside protection, which you also highlighted kind of more conceptually in the slide. But how are you about maybe something happened with rates as unexpected, because usually the Fed doesn't say they're going to do, usually their consensus is wrong.

So we can't just take the yield curve exactly and plan against it.

And I saw like you didn't have kind of the upside rate scenario there, and maybe that's off the table after today. But after rate -- if rates go up kind of 5% or is that in terms of your asset sensitivity? Or are you protecting against tail risk there as well?

It's a great question. I appreciate you asking. Let me expand on it. So just taking a step back, the thought -- thought process around our asset sensitivity management has been in late '21, significant increasing asset sensitivity doubling it, frankly, over the course of '21 to really position us in 2022, where we are right now to benefit from the significant rise that we expected in rates. And so that has come through. And also, I would say, certainly very much supported by the rigorous management of beta thus far in the cycle. And so we've seen margins expand a lot. And we're position -- we're still asset sensitive. We're still positioned to benefit as the rates continue to ride up the curve here over the next several quarters. With that being said, if you go back and study history, I think it's 10 out of the last rate cycles, the medium- to long-term rates tend to fall as soon as the Fed is done with its rate hiking cycle. And so clearly, to the point of your question, the hard part is figuring out when is that going to be as high as it going to be? And how is it going to be at the peak of the Fed rate cycle hits. And so our thought has been to protect the very significant amount of revenue that we have now into the system out into '23 to '24, '25 from that potentiality of rates beginning to fall after the peaking -- after the rate hiking cycle peaks. And so we've been gradually adding to the hedge portfolio. We're about 70% of the way through, I would say, of the hedge portfolio now. And I think I feel great about pace of that. It's both immediate start swaps and some forward colored swaptions, which allow us to forward start to kind of benefit based on where the rates are going to go. And I think that stands us in a terrific position to protect those really strong levels of NIM out into the out years, if rates fall a lot worse than the yield curve implies.

That was very helpful. Just a quick follow-up. Is the thought process to eventually take the 70% to 100% if you kind of had a conviction and what does that mean in terms of notional amount? Or do you always want to have a little cushion in case deposit volumes don't do...

So great questions both of them. So generally speaking, I will tell you, we remain dynamic, and we literally talk about this and optimize it by week. So there's no commitment, and we'll have to see where it goes. But our general posture has been to continue on with that program and likely complete it. And yes, there is some additional powder drive beyond that we do keep just in case. It's not the sort of the absolute maximum capacity as sort of a maximum with a holdback.

Steve, your friend, Jon. Just following up on Erika's comment. You have to be 80 to run for President in the U.S. and you're in your mid-60s. So maybe another 15 years.

It's too early, Jon.

You made a comment on the risk section and maybe this is you and Rich, but you said you feel confident going into whatever is ahead of us economically. Zach, you talked about a slight recession early in '23, which isn't that far away. What does that mean? It doesn't sound like you're seeing signs of this, but what does that mean? And are you signaling something for us with that comment?

We're not seeing signs of an imminent recession in '23. In fact, a number of our customers are having good years. Margins are getting crimped with inflation, but they're coming off of very good years, if not record years. There are exceptions to that. Homebuilders, housing related and things like that, that we're concerned about. There's also exception and Rich mentioned a few industries like long-term care, where you just can't get the employment that they need, the labor that they need to run at their capacity and rates lag in terms of Medicare, Medicaid. So there's a catch up always in an inflationary moment. A couple of pockets like that we're watching and actively managing. But we feel really good about the posture of the bank, the reserve position we have and the quality of what we see, Rich alluded to it, it's going to be another good quarter for credit. And at some point, delinquencies will normalize and other things, but you saw we lowered our through-the-cycle charge-offs from 35% to 55% to 25% to 45% because our 10-year average is like 28 basis points. Rich, do you want to add anything?

I'm not sure there's a whole lot to add there, Steve, but yes. We look at the makeup of the portfolio that we have today, we feel very good about it. If you think about where we have grown over the last couple of years, investment-grade credits, mid core, larger publicly held companies, the distribution finance business that TCF had that we've grown, a loss content in that book because you have a manufacturer share -- loss sharing arrangements, very nominal. We have built this book to withstand a downturn. As Steve mentioned, there are going to be pockets. He mentioned a couple of them that are going to have a stress, right? We're not going to be immune to that stress. But we feel, by and large, the portfolio that we have today is night and day from what we had in the last downturn and the emphasis that we've had on risk ownership in the first lines as they built these portfolios, we just feel very good about where this portfolio sits today.

I actually had 2 questions. So first, for Helga and Rich, most banks claim that they rebuild their credit infrastructure after the financial crisis, we hear this from everyone. This is more of an industry question. When you look at what your peers have done over the past few years on the lending side, do you see that peer banks were more conservative, prudent underwriting for this cycle, whatever it is revealed, and not everybody rebuilds risks the same.

I would categorize that. It really depends, and I hate to give you an answer like that. I would say that when the market got frothy, we did see banks move beyond where we would from a leverage standpoint. And so the one thing that we have created across all of our lines of business is you can't let the market dictate your risk appetite. Your risk appetite is your risk appetite. And if the market goes beyond that, you have to have the discipline to say no. And we have done that. Every deal you can look at and say, "Oh, my gosh, I can't believe they did that, right?" And for a deal that you don't win, it's hard to say. I mean there are banks that are very disciplined as we are. And you see they fall off when we fall off in terms of when the market gets frothy, you don't see them doing these deals. There are other banks that you can say, well, they're trying to grow the sheet. And so it really depends.

Mix matters a lot. And the thing that we'll just continue to point back to is the most objective test for large banks is CCAR and the consistency of the top tier performance through various cycles and through acquisitions is really our best measure of the consistency with which we originate.

And then for my second question, maybe for Raj, to hear from you too on this regarding culture. So there's not many banks above $200 million of assets that are able to maintain engaged client-based employee base, right, empowered. How much attention is there today, right? Banks, it's obviously even lower than that. They become product companies. They don't really focus on employee experience. How are you managing this? So when we're here 5 years from now, we're still talking about this. And it's not silos and things like that.

So again, I think that how we position ourselves is a direct reflection of our colleagues, right? You can have a recipe for how you want to build culture, how you want to make investments. But we guide ourselves first by what are our colleagues are telling us, not everybody does. I routinely connect with my peers across the regional banking space and even the money center banks, and it's very difficult, not only as organizations get larger, but we actually that into practice. And I think that we've refined that. The other thing is we're in a very competitive space. So this team takes it very seriously in terms of what is important to our colleagues and looking beyond the short term into the longer term.

I think it's very fundamental, Steve. And I don't think there's a breakpoint of 200 or 250. It says the team play as a team, do we work as a team. We set the tone in the company. If we go siloed, it's because you don't have this kind of dynamic that we have built and enjoy today, and that's been sort of the foundational in the company. Colleagues have to want to work together. They have to want to look out for each other. And if we get -- if we keep that going, even as we get bigger, then I think we're going to be in a great space. And I'm very optimistic with this team, with my partners here that we will keep that going.

Manan Gosalia of Morgan Stanley. Zach, a question for you. You are loud and clear that the commitment to Operation Accelerate is continuing. But on the other hand, you also have upward pressure from inflation. So can you help us think through that? Does Operation Accelerate offset the entire impact of inflation? Or does it just slow the pace of growth?

Yes, that's a great question. What I would tell you is we certainly are seeing some impacts on inflation in our business, most notably in the hiring and retention of top talent. But I wouldn't characterize that as overly significant or real challenge or a threat to our long-term expense model that I talked about before. To give you a sense, in 2022, we added about 1% extra expense to the company over and above what we would have typically done in a merit or budget cycle period for targeted compensation adjustment programs. And we feel like that actually really -- we managed through very well with that. We're not yet sure if we need that necessarily in 2023. We're going to wait and watch, but it's possible we do. But even if we did, it's within the guidance I've given you. I think I'd point you back to our goal just the continual grinding down of those baseline operating costs, so that we can keep funneling an outsized amount of expenses into the investment categories to drive the growth. And that's the model that seems to be working. So Operation Accelerate is 1 important tool in that tool set, but it's not the only one. There's lots of other opportunities that we have to do that, including just driving productivity, a lot of -- I mean just policy or perhaps you could have just phenomenal management of our technology and operating -- operations baseline cost to keep them very low growth when the scale of the company has continued to grow beyond that. So there are multiple levers we use to do it. And I wouldn't say inflation is something that keeps me up at night with our business. I think it's much more an economic-wide affecting interest rates and certainly the course of the economy that I would focus on inflation.

Great. And just a quick follow-up on the credit side. Can you talk about how much you're approving today versus last year? And is the recession big enough to drive a change in approval status?

Rich or Scott, do you want to -- Rich you go first, and maybe Scott you can add to it.

Yes. I mean from a commercial side, we really don't track the approval rates, right? The -- when things are working perfectly, deals that you aren't going to do, you don't get to the approval request, right? The first line is vetting those deals and saying, this isn't a deal we want to do, or this isn't a deal we can do and you pass. So there is nothing empowering than a strong pipeline, right? When you've got a lot of opportunities to look at, you can be more selective on which ones you want to do and the marginal ones fall away and never get to that point. I would say that the approval activity that we have over the last several quarters has been very strong. And it's been strong really across all of our businesses. We've been focused more on a void that we had in our kind of where we played in both mid-corp and upper middle market. And so we've dedicated a lot of bankers that are experienced there. And so we've had some nice growth there. On the consumer side, Rich, I don't know if you've got off the top of your head of the approval rates in Auto, but I would say that they're fairly consistent across most of consumer and Rich may have some.

So Rich, I completely agree. If you look at approval rates in auto, and RV/Marine on the indirect side, very, very consistent throughout the last few years with very little change. I mean up a point, down a point, but very consistent.

Yes. And again, 775 FICO is not a marginal credit where you're going to start approving fewer and fewer. You're going to approve most of those that come in on the strength of the borrower.

Zach, do you have -- you mentioned the focus around positive operating leverage for the medium term, and I believe you expect that for next year. I mean, as we think about next year, given the dynamics you're talking about the rate environment, can you maybe help us frame it in terms of the magnitude of positive operating leverage that we could be looking at in terms of scale as you're thinking particularly when you dial in the investments that you make, et cetera.

I think it's interesting. I mean so I'll say a couple of things. One is I'm not going to give you specific 2023 guidance, yes. In January, when we come to our Q4 earnings call, we'll as always get guidance to the next fiscal year and we'll dial it in then. But I will tell you that my expectation is we'll see really significant expansion in margin and pretax operating margins next year. Just revenue will continue to flow through on a year-on-year basis with really nice year-on-year compares. And we're keeping the posture of the expense disciplined very, very tight at this moment. I think if there was a question earlier about what we are intending to signal something vis-a-vis that comment on recession. And the answer is broadly, no. It's just a reflection of what the economic consensus is. With one exception, I might say, which is we're certainly being very, very careful and judicious about expense growth right now. And we want to make sure that we're ready with that dynamic management to where if things turn worse than the consensus, we're ready. And so I think we'll see pretty muted expense growth next year and a pretty solid revenue environment.

Okay. That's helpful. Then on the systems front, if we could just kind of maybe talk about that a little bit in terms of your core system. I know some of your competitors and a number of the regional banks are taking that leap and upgrading the core system to NextGen or more of a cloud enabled, or going through full upgrade. It doesn't appear that you guys are, I believe you're still in the Hogan system. So how do you view that dilemma? How do you -- are you -- how do you approach that debate and is it something you could be facing at some point in the future?

Well, I think our strategy right now actually supports when we do want to do it, it's going to be a lot easier, because of the API layer that we put in and the extraction of a number of things off of that mainframe to the cloud, number one. Number 2 is, I don't want to be the first guy to move to a new core. I'd rather let somebody else go do that right now. And I think there's a bank in Utah that might back up that statement a little bit. So -- and to date, none of those banks that have announced that have actually moved to a new core yet. So I think our strategy right now fits what trying to get done. We know that the platform scales. And quite frankly, we're taking things off the mainframe that we feel we can change and putting it on a more minor stack that we can actually change things faster and we think that supports our growth right now. But I do think the API layer that we're building right now, when we do choose to actually go make that, we've extracted a lot of those things out, and it will be a much easier move at that point.

Paul, not everyone will appreciate Hogan versus the broader core suite. And there was a reference to cloud, maybe you could kind of baseline set that, if you would.

Well, Hogan is our deposit system. It's one a lot of banks have used. Again, we're pulling lots of things off of that right now. We've already moved our -- we're moving AFS off the mainframe and go into the cloud-based version of AFS right now on the commercial side. So we're picking and choosing where we think we should migrate to cloud-based scenarios.

It's been a fair amount of migration to cloud already.

We just moved our warehousing scenarios to the cloud. Again, I don't think we should just move core to move our core. There's going to be a business reason to do it. And right now, we don't have one.

But we've assessed this. And Paul and team will continue to assess it. We don't see that happening in the next 3 to 5 years at this stage. At some point, it's going to happen. No, no, at some point it is going to happen. So next question?

Question from the web. We'll chime it online.

How do you reconcile the ACL relatively high to peers with all of your constructive comments on the credit risk and portfolio quality?

Just cautiousness and conservatism. And that's the way we try to run the bank. And remember, we're locked in long-term shareholders. There's a lot of volatility out there. And while we're confident that we're well positioned. We're going to run it conservatively. And as we see this transition, whether it's a slight downturn next year or something else, then we'll look at reassessing how much of that reserve we actually need to carry. We're above our day 1 CECL by a fair amount. And I can see scenarios where we might even be below that day 1 CECL. Any other questions? Well, those of you here, thank you very much. The lunch again will be on the second floor. Really appreciate the opportunity to be with you in person. Those on the video, thank you so much for joining us. Hope you all have a great day, and remember the invitation. We're all long-term shareholders. We're inviting you to become one as well.