TFC - Earnings call transcript Q4 2020 | Truist Financial Corporation

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Operator

Greetings, ladies and gentlemen, and welcome to the Truist Financial Corporation Fourth Quarter 2020 Earnings Conference.

As a reminder, this event is being recorded and it is now my pleasure to introduce your host, Mr. Ryan Richards, Director of Investor Relations for Truist Financial Corporation.

Ryan Richards

Thank you, Abby, and good morning, everyone. We appreciate you joining our call today where our Chairman and CEO, Kelly King; President and COO, Bill Rogers and CFO, Daryl Bible will highlight a number of strategic priorities and discuss Truist fourth quarter 2020 results. Banking will and Q&A also our of Chief Starnes, portion Head call. Officer, Risk participate Henson, and Clarke Insurance our of Chris in the

protect from conducting as presentation Relations available our supplemental locations call on are and as and today release information We to The our well help website. financial our earnings accompanying the executives teammates. Investor different are Truist

of include measures. slides for will With today as forward-looking presentation three Please two it turn the presentation certain well financial I to statements that, statements Our non-GAAP appropriate these Kelly. on review disclosures and as GAAP and the regarding and will over reconciliations measures to appendix the

Kelly King

appreciate good you overall revenue joining Thanks, well say one. a [indiscernible] much we year very, appropriate the and culture support Ryan this quarter number and Thank everybody. on future and had kept We morning, that we in environment our very and continued challenging and environment and communities spend our focus the investments and that strong good this faced. given I'd our very We had and clients very really made are for for our difficult then We're executing really effectively medicines focus two on synergies. well. call. We

attention on regarding of we our most focus to to through, you team in work be We challenges today, and out to give purpose that environment people we and more finding talk our that on values. mission. mates. better today, very happiness times than the I and values, focus helping in on teammates. inspire our environment ever. about a going and this that the the live very, get point Our for were important at we this through is lives of the We that possible happiness at in is of the we our think will communities important focus is all are our difficulties undertaking hard various face in people In we home and challenging our

the culture along wanted on it's our say following have important you to that value have to nice in that more important say to ordinary to you're purpose nice slide If I it's let's to slides, point just an five. out is deliver. go

we I to am So of a want of just that out terms of have I that things few the in done our point living proud purpose.

jobs proud that our and able little their new tune six, term. we're in specifically it [indiscernible] million trying and created billion PPP help We're on cutting in talk Rather three about -- I big I our focus short over $XXX to terms our years we're in about I'd included things reaches XX,XXX on both call the We not grants Home support theme, $XX SunTrust year bit do of expenses lending and commitment building Truist course page in longer time we million the was invest proud year, to and provided capital Like more Truist very Slide our we we we and Single in client best team program. accommodation have home you let's On over three where example, for HBCUs our space where and the just ahead protective organization say than together have our from XX in were and mates. peers. representatives effective little $XX origination During projects, for bank with bit terms three We regard CFRs for our investments. back our with building then that need program We little Cares best a minority merger. of to in about how to community, our the because different of make think money helping loans. merger team make single system many people the and in a are a the career. special our based COVID it's lost we communities, the taken many, new processes. to four in we've One for improve billion help of We I've in community and for organizations million term and very a to program. been in [ph] for BB&T our on commercial profitability we teammates point very found million XX benefits of making million XXX with our team XX program deals, of program loan a it's systems pretty I we invested mergers companies are you where different area, loans. our just clients our immediate mates schedule a supported to need. of of bank. than type to million companies help very our our class those context and and our also my want most medium $XXX to of do We're commercial we than small in new funded what the launched through very here in both XXX,XXX am about and communities. are

our it the better our is plus it's So combined, called that, equals not that short. away really that little been you sides have have case this And and but call investments we future have client I We future our to charges, we just sign benefit, have investments later be our be talking to going and be two rate, then would the both make merger that remember we while that saw North will in not American which Daryl in organization they the are the been focused client very been go two will five. are we have sure about faster have cheaper we as where and one and you to they run agile on emphasize have that investments focused. have would merger own a out better, going normal client that's it's just basically today make investments normal forward. been from [indiscernible] advantage in expenses that but in the would focused long-term not going early announcement organization a different drive and would systems that have these been are we

do. progress we our But work our comment terms terms job others. cannot our of relationship that branches we of been including very service process, that. feel we've which that to And just for there to legal, Remember going management just We've we success. You merged thing for this process successfully huge right appropriate about corporate X.X make was deposits had year bad a on functions We've is and had the see of brand compensation. sure run a into and of amount finance better better branch that re-grading well. retroactive our I'll the the XXXX. for were teammates we They billion very, rolled leveraging unabated. we we point lender did visual in in do job, days some and those. And a loans first job, not made important couple a lot securities looking risk, knew in consolidate new talent, thing branches assessed your teammates, and chose yet rewarded modern there were audit, program the the best responsibilities, to raise integrated terms XX to because importantly our have we was XXX did that culture, have a right about making we believe XXXX rewarded costs, did appropriate great number chance through a of doing establishing accomplishments and We of appropriately total them of about out very been during that. the conversion, in Very in are that right identity. compensation digital we important just the in

trust. core that complete very half of first a key the migration, touch our needs a be there we’ll ’XX, wealth ’XX, terms meeting We’ll quarter, here, of brokerage conversion, high ’XX everybody technology on and client's sales closing in conversion, terms three integrating spaces, branches we'll we'll digital first in of a very, have our our conversion just XXX mistake, level amount in to points the force important, conversion, make is mortgage look a conversion, on no seamless ’XX, and really implementing supporting is first huge yield additional our an of tends other activities year. on concepts the the be branch focus conversions but In in of is to big few which going

because year. branch we we'll final ’XX as this year. on lot closures ‘XX. And end a then just execute I going first of much are of work on happening will that of convergence during there frankly, the not by of you the activities the half the for are But of the be so is done to thinking conversion most head And be the hard actually [indiscernible] and into want course

quarter and banking, common the I'm performance revenue about strong into Looking assets income excited equity interest income, regard fourth net we very questions diluted share billion, billion, up X, income, of available adjusted really insurance tangible fourth Q&A. expect net a trading XX.XX. revenues, return had will strong return to equivalent proud of shareholders few alone. diluted ‘XX, more about and of on of of in that performance. earnings we fee highlights was income $X.X in five total as talk to just strong of the adjusted our Slide on versus on taxable we And stable acquisitions that XXX insurance in average investment driven annualized $X.X to common activities Chris with very our I’m very we especially average head get strong quarter, very X.X% to per if by $X.XX,

see, some you stock the kind when terms Daryl we But in that we well miraculous, be capital really and we on been to up performance of still performance been to years on to of which of measures which well approve way metrics the going $X deal So tracking we saw the we're would. top you common did doing all issues hitting out in that, two billion long expected top in commenting we're that, put it's level as first is could amount on. quarter. that with and to going that repurchases, board we is as projected

the you outstanding see projected we X, a which what equity better couple is right exactly to just And and this is can for two years drag point is out regular We I'll quality expected. And to earlier they to in not On XX%, credit related X long-term rate. quarter than to incremental items performance, GAAP merger $X.XX and of with our unusual Slide are Tier common you regard charges much we that have equated run ago. on the expenses adjusted. versus have operating

the look quick at some early just So highlights.

to turn now some me key Bill? rates. some Let focus Bill for on

Bill Rogers

you, Kelly everybody. thank morning, good and Great,

Kelly we Page merger mind, demonstrated in As X. was year digital in large just that on that imperative the bank first age is Truist this is this enhanced clients digital really noted, determined begin the platform experiencing it our and and with

this the While pilot other our in Truist year-end. our third complete in begin client like personalized insights, then we’ve accelerated and platforms experiences, a digital the clients the full centric in leading to for digital ways two financial chatbots, experience features second of driven migration quarter, both migration enhancements. foundation premiere going We're by AI we'll quarter is and to delivery

much year. point, Kelly's this how being done emphasizing So is

As can we're and excellent our Page you on see from digital clients. adoption experiencing XX, usage

in months, XX users, in XX% in increase mobile in the a statement check growth sales, experienced X% we XX% increase deposits in a and mobile for So digital suppression. active increase November XX%

digital I speak think increased would to all adoption.

some on an right is where benefits recent already we're we side, And investment. our show Now the this enhancements. from area seeing the

clients built was online more performance instance, winning month BB&T commitment such positioned [indiscernible] the our just incorporates long-term. better very process. underscore demonstrate driven prime of our U help clients driven new now and talks functionality SunTrust improve and This what few give enhanced flow spending to to using a to agile well of about in-house more Award is a believe updates, notifications, and front-end of significant back-end I Heritage Heritage for for future. clearly us QX and consistent whole mobile manage the business us analysis lives SunTrust think the We experience name and So platform our in and has a control flexible, behaviors, with an to end effectiveness. provides example app's over the cash U BB&T really it our as and Kelly insights these initiatives including and investment The

Page portfolio. and elevated turn residential $X.X In and and balances further largely held and Paydown assets a billion positioned capital the balances floor for primarily also experienced decline in OEM floor decreased plan to commercial following loan portfolio. after Commercial of larger in impacted dealer well assist uncertainty as commercial to balances $X.X liquidity. lease continued total a ongoing obtain supply which billion balances small our due to across categories attributable or Dealer ability So reduction billion improved loans to in loans live to utilization. the replenished. from mortgage to in our decision declined bottoming economic the run-off billion loan and $X.X sale $X a lower phase activity are steadily within markets have average were We by in due new chain reflected see we clients XX, plan most disruptions. financing loan balances to of rebound in card SunTrust clients Average Securities inventories July PPP experienced exit transfer ticket we'll were them later. paydowns

loan from balances. seasonality mortgage whole that in activity warehouse medium and with companies In with resulted as Commercial from and in and COVID-XX remain the especially growth billion, auto the activity will will sales vehicle of for we positioned $X.X production indirect most believe vaccine loan balances equity and residential that coming was government Prime large mortgage, increase segment. well portfolio support together billion, economic was businesses. from recovery, greater the in We're which a refinance loan rollout for visibility, consumer to Overall, this optimistic. home all that lower markets really of share direct residential largely saw remains us sized stimulus extremely and We're hopeful strong rebounded, in will due businesses revive confidence successful also $X.X additional Average government decreased a average growth. We finance. increased be cautiously benefit lending bifurcated our will and essential in smaller balances this. than as we

broad and money during personal were were $X was deposits while at related checking inflows Growth continue each trends Average let's seasonal remain a billion on balances maturity from growth deposits. billion. based combination Page negotiable look bearing over $X.X accounts. interest CDs, by supported XX the So and ongoing higher savings of wholesale Deposit and to due and of quarter. client non-interest $X.X and resulting favorable the robust billion, and and costs primarily pandemic behavior. market time up decreased business Average

to level value Importantly, while repaying. proposition of we're the outside achieve able to strong of a deposit maximizing clients growth

and points. costs declined average basis seven XX to basis points basis basis points For costs three bearing to interest four instance, decreased deposit total the average points deposit

turn that, quarter. our it discuss for the let over to Daryl me So financial to with performance

Daryl Bible

you, Thank everybody. good morning Bill and

billion $X to rising fourth the rates decreased additional with two accretion. quarter lower our margin on and associated purchase from excess payoffs, positive margin loss The in by Core to XX, mortgage to PPP growth, investment accounting improvement deferred higher liquidity. net residential basis points our Earning an modest net swaps increase partially exposure hedged reported interest interest bottom asset chart fix income, pay partially funding which in sensitivity assets Turning margin in by market offset security. increase left off, unchanged reflecting interest resulting to on X.XX% Slide was primarily recognition quarter, on and in our net a at run shows the the the growth due interest deposits, loans costs we in by benefited rose Core pay-fixed in to X.XX%. was offset the offset portfolio. to the yields investment of risk due lower

quarter We of income. gains due profits. relationship and Slide $XXX loan helping trading is security income our investment $XXX strong to of and refers strategy million. Turning to trading to $XXX and M&A million through integrated The banking million improve in third XX, lower improved income increased record management syndications, had counterparty noninterest activity fee

We estate as estate commercial real sales also to structured growth acquisitions. of Insurance well Organic and of by driven transactions strong grew real million as production generated growth strong income record X% production fourth and at versus was Grandbridge. $XXX X.X%. due and activity 'XX premium quarter

If year, fourth more million and acquisitions adjusted expect in insurance you $X add we million revenue than which in We five expense. X.X%. organic the approximately growth Truist exclude annual will the during completed was quarter, policy $XXX last

$XX $XX our $XX were of since full the quarter were during was closed to the non-branch this program million net was decreased of to combined commitment from in closures to incentives regrading to framework. down last strong and and expense. the Personnel benefitting the $XX million process $XX increased honor and the higher and quarters. teammates harmonizing XXX, bringing Through effort, jobs establish due X% to our XX, to expense revenue Slide strategic concluded in Turning million expense. fees million production cost. expense million higher up which reflecting noninterest to noninterest increase and the expense higher in Job professional catch a total XXXX Adjusted rewards all we of re-grading rose increased decreased related merger for in $XX during projects facilities. announced. quarter, the year regarding merger aggressive job branches personnel million quarter We fourth year. the reflecting Approximately prior late FTEs personnel able impact XXX related occupancy technology

approach we but billion acquisition, best seeking to XX, we typical harder no are justify than benefit These part effort. as a are build Since post growth franchise. have we run believe the opportunity incurred and of Turning benefit merger-related the This to restructuring clients was merger the the future to our is conversion have Slide said we not the announced, expenses. of $X.X expenses rate. and of

approximately operating million and operating The also expenses after stability These the both not future incurred part of on run resulted incremental related $XXX in conversions charges of and we in of We future approximately XXXX. are integral billion benefit approximately charges related $X.X $X.X incremental This merger rate of total and billion. $X Based to incremental end the provide invested total franchise. integration expect our will in a combined and merger. do restructuring of operating expenses our plan, expenses billion. the expenses

a reduction to experience Slide as loss loans. and net current X.X%. the Turning remained increase decision to charge-offs benefited are and formation saw their small down XX, The the exit favorable of accommodations expense. XX% Active and and loans. size credit classified NPAs quarter. at was X.XX $XXX the lower strong X.XX of programs resulting characterized nonperforming ratio allowed provision ticket the exited decreased loans of a provision The XX% in consumer were in modest performance charge-offs commercial who lease Approximately, minimal accommodation in problem lower in credit coverage strong clients excellent an portfolio, significantly reserves. loan loan clients by and from and second times We the trends million since times the on

billion approximately sensitive loans. or to decreased to X.X% outstanding exposure $XX.X of Our X% industry COVID

this prudent client peers the diversification among had outcome selection the underwriting rate test. as We reflects merger. lowest We and third also well CCAR rate as the believe in from loss of

$X Turning portfolio moving decreased billion $XX largely allowance sale. credit to million due for slide to held the XX, losses for the

stable GDP XXXX unemployment XXXX. macro and levels thereafter remained pre-COVID through late improving recovery include in assumptions mid Our fairly by and

COVID We in for also qualitative layer related uncertainty. adjustments

less economic and the release Continued quarters. a in asset may in to reserves process criticized of activity, stabilization the coming improvement uncertainty,

Turning to Slide XX.

ratio Our XX.X%. XX%. and first authorized billion and board were CETX per starting $X a common of relatively up quarter. December declared capital of dividend ratios dividend ratios In total stock $X.XX stable unchanged a company's of a the the in We the to the with repurchase of at payout common share

repurchases CETX XX% approximate an account and remain ratio into to is taking assets. changes strategic intention risk-weighted actions, after in stock Our

quarter, authorized liquidity The F outstanding the we approximately redemption including optimize Theory the and of to are preferred first to G we our measures stock expect the million. remained $XXX and capital meet For the clients. prepared strong repurchase board other and funding to our of position

billion slide $X.X XX, progress Slide to the net Turning saves. cost our highlights achieving towards this in

retail XXXX. of ahead XXXX. Our XXX in Xst reduce XXXX XXX of end are efforts XX% a by banking including closed in branches XXX to In expectations. cumulative of than spend We're reduction third-party targeting basis, branches spent more to now $X.X close the expect we of On the we billion. by branches

reduced X.X the footprint nonbranch expect Through by closures to approximately our and feet through December square $X.X footprint feet. also reduce million million We nonbranch XX, our of square combination downsizings. by we approximately

on we So or rationalized we're believe because goal. facilities our halfway The XXXX. our will completed. remaining significant are through The conversions the and Truist during on to the clients. investments, dependent technology are highly providing data decommission roughly centers making be are where slide technology critical to based until are delivering equals we less our can Cost investments of purpose on these systems approach closing conversions we catch-plus bottom

our shows waterfall XXXX cost we did relative savings the Turning to on the to Slide left target. how XX,

achieve our $X.X adjusted target. catch job of of up including target noninterest on This equates related million $X.XXX noninterest $XXX XXXX other for to fourth expenses fourth and the or $X.XX exceeded substantially annualized to objective cost non-qualified of income. emissions quarter was Our which or quarter less. offset are saves of expense revenue the expense expenses and adjusted and billion higher in billion billion to and a We XX% rating,

would slightly target. noninterest adjusted come below items, expense If you exclude these in

XXXX. can maintaining our we're reaffirming XXXX for targets slide, this cost our you from and medium-term targets see As and saving

targeted acquisitions. For excluding be expense $X.XXX quarter fourth would billion XXXX, our adjusted

expressed Now first for quarter quarter. in I guidance will the changes from provide the prior

us guidance. continue to in to we businesses, which outperform see environment While may fluid, enable the momentum remains the our

personnel fewer of higher days number and had quarter seasonally cost. first The

purchase to loss. to X% expect down result days a accounting equivalent taxable as and fewer X% revenue of We be

We based expect on less margin. and down net a in to our basis interest change four the a reported to points accretion accounting be two margin purchase core

We to and expect be pressure coming that expected cost points. five for could merger is sheet, margin down to X% the of the basis increased amortization relatively core margin to the Non-interest from adjusted with exception be stable liquidity balance up X%. expense

also points. We net of XX a quarter good charge-offs anticipate had in with XX expense the strong to asset revenue basis we management and margin Overall, range performance and exceptional strong growth, quality.

Now let me turn it back to Kelly, Kelly for on closing you're remarks and mute. Q&A.

Kelly King

close, focus. and to return our strong services Just diversification regard shareholder Truist few proposition, with comments have to with a the intense is total strong focus to markets. liquidity products, we through franchise and have we exceptional an very value which diverse client long-term optimize We and on believe really capital,

We bank commercial the largest the States. are sixth United in

strong fast-growing Southeast have is share and We Atlantic throughout market the MSAs five area. the Mid

billion as the we We to cost very to net said invest are savings. in and future. efficiency our in while $X.X committed uniquely class We're best returns positioned to continue of Daryl reaching deliver

We have year that in businesses synergies. a to expand complementary really great our base us revenue allows through old our enhancement client mix of

capital We resilient as which us are we very we have that to go times position through in challenging and a experiencing. liquidity be positions sales, very strong

here resolutely back Ryan. tourists for of client to to driven communities. these I and purpose States best-in-class earlier I'll in We inspiring new and turn building said over lives are designed to be days better and are building as it We America. bank believe our committed best a

Ryan Richards

participate time, you this listeners please at Abby Kelly. session? how will the you, Q&A in Thank can explain our

Operator

ISI. our We'll instructions] question first from [Operator John Pancari with take Evercore

John Pancari

that your expectation? first you're us the incremental $X.X billion that the that you giving target. how talk number know can Regarding versus I it's evolved expenses, in operating original like time about has just

remain how more target, to how your does could over little going you time? $X.X it's on So can process us behind thanks? what see a that's upward And pressure confident originally you it that of thought expected of give in at and pretty compare that you bit then to it to terms in billion that if we are amount, continue and the evolved

Kelly King

together and were putting early in tell target charges pretty we would billion are with I $X when on in restructuring merger was you 'XX, and 'XX announcement transacting though we we the and that. late much

the it the what continue we we just we and our work we the do lot could unusual really once saw with of in on call all time build a running As have structure. to I really technology knew opportunity that integration expense that be to on steroids best breed that through all a projects and at would this would we our of technologies, basically, to all would cost

So it that's tracking we and We're far we've total pretty both of charges almost been $X the you to in we combine we so have. came and at what with and up really about when date both feel that merger forecast good the billion and restructuring the incremental.

believe sense. reasons And go it all company forward. to we year and right and our produce the was the over to for help going We our half. it's going for about billion a performance really good next $X have So the clients makes

Bill Rogers

that systems expenses, through about for processes. to it future we’ll capital way flow think think client I in really, of of the is afford to you John, it like allocation terms terms to more focus and will and $X.X is So that, conceptually, in about about investment. think billion it house, a that an benefits continue It can so that

John Pancari

And then branch That's on helpful. reduction. and it. real Thank separately estate you. the Got non-branch

merger? that your to come from target and included savings, in that, that confirm is that reductions cost savings Just you’re that targeted the want targeting those

Daryl Bible

the that throughout XXX, on all quarter COVID of original Southeast. buckets, be huge corporate branches, two together, high-end at the then between came you the even yes. these buckets, estimate, XXX you when first Mid-Atlantic Absolutely have I branches talking five with said of the And can we and up originally about we the Well, would you're that mean, see we're companies real we will the of be duplication put done estate, by two before ‘XX. retail

guess so going we of my tell us COVID you and that a space, that emptied has quicker consolidation. ways in a can the in just helped And So and it buildings, rationalizing through number I’ll out move we working corporate, COVID we bunch that combinations these of home. originally continue exceed make actually at may just what a consolidations, because and people real is estimated we to of in estate as real

John Pancari

Right, that opportunity got of I'm estate I getting was the you bigger, greater corporate exactly what real in. opportunity installed got reduction some assuming because as COVID out set was

get hitting want thought? the just be to corporate So calls if estate reductions more back your to real than can upside you expectations,

Daryl Bible

Bill will for Executive Leadership complete Yes, the in executing on so there's the re-evaluate once more that it future. billion we do $X.X if have now we see plan plan, and and Kelly where to sure and we're opportunity I'm

Operator

Graseck our Betsy with take question We'll next Stanley. Morgan from

Kelly King

Betsy, hear you. mute? are you we can’t on Betsy,

Betsy Graseck

Hi, me Hello. Can you you hear can now? me? Betsy, it’s hear

Kelly King

Yes.

Betsy Graseck

sorry a questions. strong relationship fees. how on integrated of All progressing. so strategy, wondering revenues that. had this about are One, The management right, that's the just in I'm I couple quarter, Yes, particularly

result I to how just so to quarter? wanted much the was understand that IRM this And drive helping

Kelly King

do on products really the that's And way is institutions that. way the the we we Bill it. focus the of client, the regard of a that, needs color services, the to this Betsy, huge concept whole part solid you many client. with of focus integrating on deferred of in and I’ll terms on some give don't But, we let focus

time. the between this may really, everybody terms how all the all meeting developed working, Management, we've very Everybody's we're it's want is and CIG. Community it we client very effective, so client. decades. positive Relationship you focused the spectacular feedback the But of it And on very, Bank that? process, owns efficient, to call the comment because as early, of Bill, seeing IRM on And Integrated needs in several

Bill Rogers

alignment really the that we this talking mean And, strong this Kelly I the one this we're merger working. first is commitment of to evolves is that cultural culture model and create a talked about and I it about Betsy, when a mean first structure that. I is started seeing from the and Hey, that client put and

Bank I the examples wealth banking great mean, this As from from noted, Commercial outperformance a and it was private businesses. Community investment contribution Kelly of particular from couple our in our just and CRE our really quarter

just great it's participation, been relationship adoption, integrated of really model great cultural that working, is good So alignment. management

You insurance the see in number. wealth number, it you see it in the

have to this the engines is structure cultural committed quarter And, a client people work the side, on So probably this are it's better examples towards around discipline together was there say and of of lots how part the meet to together firing and to the But it. focus. wanting goal of of cylinders. I all and we one all needs, work key really common are

Betsy Graseck

the Okay, expense jumped the out inflation increases question expense screen. right. will fees saves, net really the there? some bolt-on land is the of appreciate, outside help I the around, I many cost I'm of acquisitions, revenue all for got us on investments on guidance, about growth, post here you've line likely dollars core expense Thanks. follow-up Thanks. with total et wondering saves? should of kind think the investors can you just the cetera. where guess how What cost

Kelly King

Betsy, just mention you've me listed. areas let So we general, itemized you in have

in obvious, we're do We you broader in two expenses a approach. got business. heading time it’s of won those transformation the a to of on centralizing really We’re it's kinds now where and and conceptual I the these focus of into on time optimization, mean, happen. the But and they've just things on period have for obvious, focusing focus us us for that kind to

as big basically we've think banks two is together. what far, the So done about it

and And opportunity have as post-COVID big, business savings for through lots the as ‘XX. Now, them get what when going we and the us world. now all on of get the re-conceptualize enormous we go to And there to go it, we this digital opportunities are overlap. we we have natural from you the new transform

right the our structures, an from for doing year investments believe we’re terms that going of transforming so will in And allocations. benefits in expense to of intense expenses. ‘XX focus of be perspective expenses, that positive our is the on think to things time we of and It’s So us. throw-off terms

Daryl Bible

of the Okay, this remarks. year, Betsy $X.XXX billion. fourth for quarter No, would I I what my say in prepared the gave

the excludes the acquisitions of that call-out million Insurance merger and the MOEs, a about then $XX amortization, adjusted Now incremental expenses, expenses restructuring I on charges, gave expenses. and for

saves. all investment, of that you the something that like carved considering job base. of the when get re-grading that of look So net we’re part our that's But marketing with covering that out at will

Operator

our Deutsche next take O'Connor with question we’ll And from Matt Bank.

Matt O'Connor

Good morning.

obviously, expecting XX-year down. I up year. Let deployment rates move the that. It decide But people think me you went past now's of securities have up, seen of but this lot. later made are the the actually mortgage this rates would had kinds like of And securities were bought most and you liquidity a the or talk types quarter, stable some sounds timing I you We've think higher that about time. rates probably what right on

deploy this of quarter? like kind you most liquidity excess what what your So of seems drove to past

Daryl Bible

have So as ’XX, would really and a of growing, we liquidity seeing that a on middle decided payoffs in like Matt, we that we with basically our We hedges take and loans, to in it into this say have come liquidity lot throughout ideally, third into that portfolio. them, get liquidity of did have fair in did back the the we businesses the on of to investment to we're we that latter lending. help is as But of and amount put just excess deploy a quarter. momentum what start we I up heads PPP. mark-to-market really that that. that half deploy the partial want some excess We to would of

to to hedges have. that there billion, the put So risks on did we we help when the that $XX have portfolio, about added we with investment $XX market billion on we about million $XX

potentially these forward So net-net, could with billion the or liquidity get a we The on uncertainty balance billion basis feel into is, stimulus packages what new go we done. sheet. more with another all good $XX real we've $XX

what Fed with I whether or primary we think keep main to we we excess out, it need the the it evaluate objective. or at that liquidity is which lend ideally do it invest

Matt O'Connor

will obviously incurring of did of is billion attention, increase think you payback size the and seems like time which and the break That's back cost helpful. right, $X.X we incremental circling I so other a it that see it on really right getting the to saves can the lot how these And been deal, you’ve already these the if synergies see though incremental that become, having first like how cost you related the side will on then Okay. somehow? even but net we how

Kelly King

was really new So whole system. these a I as describing deliveries. we're new loan are investments, are There building loan commercial whole as some so think delivery mortgage about this

the the of benefit newer is making in in client terms efficient see of effectiveness will other systems of terms more You as the just the and incentives that meet.

So has mortgage, we there more because they're can mortgages been more efficient.

more mortgage applications because get a have better You you client experience.

miles, run So etcetera, rundown and you experiences of of investment, that you breakdowns worth it's in out if less like $XXX,XXX the an recall just say terms benefit etcetera. make you

it an about. the way best investment describe to is I is can that So think you

Operator

next with Najarian Erika take America. from We'll our Bank question of

Erika Najarian

you growth, to for about first upbeat you quarter, My on first of we revenues. were quite appear actually economic and case question insurance to the outlook? where were if on this is think the you recovery the the peers surprisingly company past and very wondering I should specific which Kelly your growth on economic how best of also relative upbeat and going am have to think future upbeat loan about you your was future

Kelly King

Erika, economic upbeat all regard as past. from different to with am experienced downturn economy. dramatically in the This the we upbeat is I say are well. I'd we've and what

XXXX wasn’t estate about wrong the bubble, our economy. commercial take was with correction the there If bubble. a XXXX money There fundamentally on real was nothing was [ph] the estate you it technology real residential level,

low In it important years spur. my in very, fact to pending robust had show we're call very not XX underlying That's just economy the We that the us all. of growth because inflation. issues

has regard go. given activity prospects, pretty likely ready innovation, we that investments Now spend fully stronger people that where to the are vaccines first and to economy people so upbeat in it. and run to We upbeat to are a time ready in confidence than if sign, part, terms is most you terms things snap they we when confidence. mostly When pipeline with expect. live this think there, stimulus to you the businesses. again, would see out it etcetera clients you’ve midpoint are kept expect reversal economy. say objective, in that all consumers Look most it seen ready ready widespread and talk and becomes more goes our of have our like and are we with seeing they robust back be to are will to slower the get invest, we've are we of and the on of and making We're the are as loan really the but We're to shut in but more People are fear that us. seen are will down, off XX their years, grows it the

expect by a this up activity fully I will fall commercial very is. you're terms of in towards of in loan going how really in year, surprised head economy be and end the our big time So That the we of robust show to terms the way.

you'll would You're see as of well. and we insurance slower activity certainly likely expected terms to in have the loan see in than growth residential more economy our

to regard insurance Let some give me him very color Henson that is just quick you to Chris turn let and important. with

Chris Henson

for thank question. Thanks and the you Erika Kelly

retention So at are of really maybe to to market, and industry, to pushing just and just And kind and quarter one organic it's cause into in the from all X%. for in outlook we've on as organic two really the XX% client strong hardening are some at had of all XX%, last some time hardest wholesale hitting, the continue really growth that hitting in point, of stabilized as eight the have to the that. north see retail north seeing fourth the the sort the of of months maybe and up cylinders, has wholesale, with of of benefiting we're market element best seen drivers in the rates are quarters we'll market. risk in strong your we the factors Pricing decades, another acceleration anticipated carriers and growth we're we're in Standard ‘XX. that

good have out. X%, as up hit That ever kind was up seen. But year XXXX up business, was of as seen We the X% business business was XX% and year-to-date, shake we've XX.X% of in Our XX%. were going this COVID. new I to the where negative to was new didn't quarter, know we our numbers new the some X% best to in

number piece X.X% growth just led organic to made, ‘XX. to deal in was number it's really that X.X% reported one But related The one-time negatively we that for of growth MOE to all impacted MOE an booked by I QX think our point quarter, really X.X% insurance on Daryl in that important. year-to-date. like So was key

basis really on a So organic growth if you that exclude core been X.X%. would have noise,

COVID the this our in losses. retail years the In impact to it in terms impacts, quarter the first year. up accelerator think most history cares storms that shift business the that and and But digest CAT economy. CAT the losses markets of in largest units that any history the range, holding. growing XX% exposure COVID given obviously pushing I And three XX because in best you outlet of first, really uncertainties in output, commissions momentum, E&S. the standard the to the and from we're pricing we excess benefiting really given the We're surplus the occurred mentioned about pricing, support is in are of third to diversification. And we're We years. from And be last second in moving had strong of year expect quarter the our of of year, best in the lines four

So upward investment interest income lower then it's on got puts and for underwriters. which pressure pressure rates,

in like all up accounts. X%, So seeing was classes up of pricing lot X%, in of we had things all D&O XX.X%, of property you're examples excess up up XX.X%, a

organic it quarter expect in able of were So we in quarter, about expecting acquisitions, forward. in think that's kind mentioned what growth up. And really going keep X% and Kelly and insurance really we close is the first low go going five so interface, to somewhere number. the bullish that more we're fourth to is propped XXXX, elevator forward, we level rate looking And, catastrophe around all

Erika Najarian

going on your descriptor. linger that XX expenses. the and if gets they helpful. Got a describe, it. That Slide just in see is you. was number, really I in was Daryl, what scared two-partner it when savings we as as to a a your rate? that think think investors to back to plus rates that that you Betsy's about number for we run us rate? $X.X billion And do My assure that Thank question everybody doesn't would follow-up second XXXX briefly maybe personnel help to think annualizes What question. about XXXX? a the and question run that the that the for XX.XX run to question includes as do about with X.XXX how growth follow-up think number base that a rate Is just can

Daryl Bible

start the latter on I'll first. So question

of basically ‘XX. there So number get cost on it's you MOE, so ‘XX quarter we're that That the acquisitions. restructuring, the net excludes and fourth a pretty saves in all fourth the the gave said, for that that's when to continue pretty we billion, get simple. We That's simple. will in for guidance amortization And $X. targeting of $X.X the billion. XXX quarter into was which ‘XX, then

Your other first ’XX, what the part? question question again the on was

Erika Najarian

you're incurring of expenses the in Yes, $X.X that yes, yes. if describe types billion, you can

Daryl Bible

Yes, it's projects. the technology

have technology. doing those once. carve costs systems wasn't at that it as out you these doing really basically just future building technology costs, all are we real And having benefit, client has we're and But from the can to it out going a merger. the better you projects That's we out you by a something the experience, we carve because the fair that a of going systems I for all one-time would much you in or decommission going the lot should we're once revenue developers benefits We when forward. synergies a But Kelly end restructuring and of benefit. best in It's new much better of and that at all these of restructuring. we're and each merger something at use, when out have think so in between of combination the Truist thought the that think perspective and have at going lot once. architects All is has said, would expenses overall. call technology as all you never this performance see other And out the going systems, integrated just original of merger people that if All environment doing whole put you're all have cost to and charges. and to of was have doing like the no new basically day, future they're of are building typically not with a

Kelly King

in, you're in you bring them you also this get keep but those project, doing all So mind consultants out. when

a So in and big the back with regard very to I'm consultants, door we front going have door. a back door. narrow

Erika Najarian

you. That's helpful. Thank

Operator

with Wolfe We'll take Research. our Bill Carcache next question from

Bill Carcache

curve. we having persists morning. a bad discuss pressure to here, Thank yields you on how remainder Legacy of pressure from book well? BB&T and expect throughout about persist on throughout think for that you'd this as Can broadly, the last and Good a SERP cycle on the you. other is downward more yields dynamics, to despite question cycle a whether saw SERP repricing that steeper had dynamic, downward I banks loan

Daryl Bible

short reasons. That But we of little point the as the purchase the amount see PPP, say higher for balance have sense, can that, see I yields, on you will across curve, longer-end. from three margin. are saw various tables, to we basis a of and I fair had we’re our sensitive, bit have basically would some will accounting, we of going actually you can basis sensitive core we shifts, have that what curve give all a actually asset said, asset Bill, us we sheet, that, our in tell steepening yields we points make balance one the in you steepening two curve XX structure would our those a sheet we that the in that would curve, normal remember, yield on more benefit

our three a basis going points or look look and off credit you maybe spreads commercial they’re credit phenomenon, So if at on are four what it a than off. on higher at going basis spreads coming going is are pure how on, on things actually

relatively perspective. And good from all that that is think I so

Kelly King

we’re backward Yes, on a Daryl’s let mix of different has traditionally me margin mean with forward the improvement I also he focus all we’re just point, and that's focus you commercial as a to Daryl add seeing basis a currently relationships, business and What do look, things, that issue. value in in that side. type see adding particularly that those as type we're to noted, noted,

Bill Carcache

the as on helpful. really follow-up that then into a would can how quick tailwinds or well? NIM you'd expect through just contributing you as and X.X, ’XX the to same to persist cycle, SERP and be And ‘XX extent that's Understood, ’XX X.X those in PPP long question, sort to of then they are to discuss not this going that carry

Kelly King

You want to call that?

Daryl Bible

And you off? I'll want to one? finish Chris, Yes, this start

Chris Henson

out gone X and probably coming the by Sure. Yes, the XX the plan then X in, obviously flow Round back quarter half should Round X, to and to your in that probably answer so. half plus rolling of see say out going neighborhood through We of hard be end when or of Round in Really that to in first most $X question ’XX the we do the exactly to But call percent what participate of of exactly billion I would it year. ‘XX. was the that playing out. year

Daryl Bible

happens focused thing and given has thing more smaller on actually it to any three loans. happens forgiveness Bill from obviously that to on core the would note, depending the basis be to a round that is add One just could it depending huge impact that points two when on I The really on anywhere five in is margin amount quarter.

actually on round fees, average one those our was So but about X.X. fee higher drive

roll have just it will estimate but just this fees We'll have a volume, on huge on impact well. is now starting north round because X% -- also those to you of an it's estimate as out, Our might see two. less

Kelly King

times. on give one We've of this but proposed received of and And point. path to that a the about different XX% XXX% SBA through just the to submit invited at forgiveness, of round they you information we've sense,

So the by the some provide is timing determined client of of the information. really timing the

Operator

question Usdin Jefferies. we'll with And our Ken next from take

Ken Usdin

understand in quarter Daryl, help us I was you fee you on the about what, gave and to areas insurance, little insurance first commentary kind provide us outlook, I addition some wondering thanks? be expect that said between what NII a other color on you revenue but Chris gave especially out bifurcation you and fees the of down more FTE. X% you could color what to X% would of in just those believe Can drivers

Daryl Bible

Yeah, I'll happy be to do that.

at going into because margin margin and to the look you reported accretive going when we our difference have yield core over between margin. time are margin, have So we our less

Now two would four a say that's volatile, could from I basis. down yield margin be basis quarterly reported to that that impacts that on points unless accretive anywhere

actually we liquidity in that. in to much sheet securities, quarters and more fairly From the balance the back you forth up with more margin of bit just sheet down how a gives is a much The So well really when just is of we a and us our margin NII, invest to into it equity have view margin. lot liquidity that that it core we NII. pressure balance get from that. couple decide how uncertainty trends the goes basically If We've trend little and is core done really perspective, of it's down, core holding kind past and well.

as liquidity the we So core go much but bit we how gain could it those margin, with a packages, be on we forward, volatile. estimate decisions depending little

in of and -- think net shift that interest income to net focus have on there. what I front income impacts the until and interest you to move are

on strong fee the look of have quarter, just quarter. economy. in adding at in right comment in the revenue know lot those retail I if have quarter banking the with always we more a and is first detail, traction, could want has those I lot if commercial very had momentum. got tell had that but on pipelines and is momentum, accounts bank trading, great and achieving build in loans whilst huge they're the Kelly Bill of business is they on or our the a you On side, the look don’t commercial actually would you they fourth Insurance He you community our to Joe's areas world area in the quarter momentum the strong investment businesses. Chris the a add growing at

Chris Henson

against to headwind production at at optimistic a a If we the that's we of being though uniquely paydowns and PPP forward low be going pipelines quarter, in look reason fourth have things like utilizations and level.

can things and over the of production think see I then think where the build in acceptance market all of well I that that second, first upon So that be quarter, we confidence we fourth the third are. we'll dependent time that things or pipelines control are manifest doing will benefit whether and will itself

Bill Rogers

strong. because the auto I very might part year add environment is lending also the very, first balances. really now. into and just a growth, of We about the strong in opportunities we're $X seeing were very that right warehouse for is average billion up We see of continue

Ken Usdin

XX.XX be that base. of absolute the be that seems around inclusive $XX it that of trying to and have XXXX follow-up underlying get goal targeting one that Darrell, before comp point to that to It's Without of like inflation. other landing get just the also you're stuff? core ads number quarterly just incentive that acquisitions number the an we And -- cost is or $XX you're insurance million before on million real to version more a the so

Daryl Bible

you have past out be story all it meaningful to have actually tell Our tell like to to this did we fee it's strong quarter I and still is would carve that you. income and great that and

remain, dynamic it that think carve makes a just to out everybody February sure things continue try we we our to we're Obviously, to when we're those to in we comp. made not 'XX. be changing variable get So $X.X savings, will on We're sense company way we're carve that doing, but We're cost understands, back commitment. to but the and from billion our out going

Operator

Fargo from we'll And Securities. with our question Mike Mayo take final Wells

Mike Mayo

$X.X net of and clear, only part. pretty savings exceed you the the that already you XX% closures Just number back billion savings XX% the on on reiterating expect have year-over-year that's footprint the merger of branch to non-branch

billion increase leverage year, to haven’t given for or what net merger and growth increase take So part or you increased would that the that it estimated reinvesting us why you XXXX proceeds and quite number to not didn’t actually in that, of of the the to not, saving all $X.X have guide you already what some the thanks. does add up operating

Kelly King

certainly moment, we be at expense a are rate. invest to that trying certainly we've some Mike in opportunities focused run have we the you're more we're hold ongoing are terms tend We're immediate just I than we that trying enterprise that's can on terms branch and billion. think anticipated. right, in that So going talked for beating possibility. possible on immediate there but expense the to intensely closures reduce in of anchor We We're to of duplication and $X.X is predicting can this not of out areas not things optimization really what parts, but across about and the the to

billion together. So to $X.X the two the putting related basically companies

clear office opportunities certainly see we very other we We get terms more maybe of target, can few We in find what out optimistic we hold doing and focus things and want then on additional branches. probably are about that. we've we just we we to whether The can of to a terms beat be more said that that. do -- transformation space, non-branch do and in expect

Mike Mayo

in With investing net? as is that using you're up lot that, know your part of question, that number second terms of of going my number, a I higher that gross growth the

Kelly King

Go Daryl. ahead

Daryl Bible

are in what the the we're we tell originally investments technology, more think reasons. than that won't but I So digital right right we for people, our investing making you sight, are we these are all

more So investments what we than thought. are making we originally

as right us our well clear in are would forward lot in haven't We look but businesses. maybe our of more going number really at that of that point we're Look growth lot company doing a some at now now $X.X let that get revenues, in moving the to we're a communicated really, and getting of the the get just we which seeing lot first and we're but distract are we of savings publicly, midst investments results. a net the at account conversion, making you're and it really our

at very level. are We high performing a

Mike Mayo

of And behalf, bringing managers, my the -- lot my the about and peer want about count insurance insurance, lot colleague to firm my insurance then of big second ask with in talk question, guns the go with spoken on a talk the question ahead. I

Unidentified Analyst

which given of or and also pretty retail and continue you business that consistent? comments, will feel organic bit in impacts growth industry, mainly sense the then your insurance kind they've And like guide see just on other good basis a a above us we once have relative obviously question outperforming XXXX to front seems the some both are of guys about they X% different versus quarter impressive should seems other you So businesses also had, of really of could organic one a posted like in as there. X%. the the number to come your is little fourth others the wholesale adjusted the I in expand cover then organic you and on that and right it an that been the growth as some It give of you of those COVID from companies guys other

Chris Henson

question, the Chris. for Thanks this is

around right, when it X% good so. X% based we see first We the quarter be we I it next last half and certainly year. did in half of I around You're a number the the finish give on what or for call now, call think would

economy it's think we're possible must fourth then to the good in as it pricing it what and be vaccinations quarter, result, saw I begin could some I about to new very we if if better, a believe to getting and via see I example very, tell we country does and it of that the holds growth pushed business could. that it better but able out So feel will the you turn

backdrop. do it happens want it we interested business vaccinated we're the to is in bank, all can really protection get bank, as the question what downside are opportunity of you much, growth think to operate past that reason pretty credit but about than if sure all going want wholesale retail going I organic wouldn’t that out think the X.X% year, strategically kind upon COVID bodes reason this for move. for a the certainly for the margin it in I I one to be and good economy opportunity other, the really probably in I business kind think solid when first is So get and dependent to matter cylinders of we growth the to well organic as see and each year, the the what growth because given than half is the better is this to think exposure is for that your going, and do And difference challenging both, year we stimulus but this and other. do have provide is we to markets year with the that

you're So balance in the combination of going to you're interested hard the help on going one in that growth there. other we're soft it whether is the in to depending market,

better bit wholesale certainly they're little retail, So making than nice contribution. contribution but from today a

Operator

gentlemen, additional turn to Richards questions. or have and any like time all I'd back the ladies that is to for And we remarks. closing Mr. conference Ryan the for

Ryan Richards

those Okay. of the our apologize I us Q&A thank get call. That that Thank portion to have to we with questions didn't you everyone today. time you, and joining complete for Abby to.

out you reach and you to later all will We the today we best. wish Goodbye.

Operator

you your for call this thank gentlemen, we Ladies concludes today's participation. and and

now may You disconnect.

Truist Financial (TFC) 21 Jan 212020 Q4 Earnings call transcript