TFC - Earnings call transcript Q1 2021 | Truist Financial Corporation

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Operator

Greetings, ladies and gentlemen, and welcome to the Truist Financial Corporation First Quarter 2021 Earnings Conference.

As a reminder this event is being recorded. It is now my pleasure to introduce your host Alan Greer of Investor Relations.

Alan Greer

Thank you, Katie and good morning everyone. We appreciate you joining our call today.

priorities and Rogers; Officer, who and a of Chairman and King; will our first number Bill Truist's COO, CFO, strategic have Chief results. Kelly Executive President highlight quarter We XXXX discuss and Daryl Bible Banking in Chris participate Clarke Starnes, will Q&A portion of Insurance; our Henson, and and Risk Chief Head Officer of the also our call. on as as supplemental are available and our financial website. Relations release The the earnings well Investor accompanying presentation Truist information

non-GAAP these financial include on as does forward-looking measures reconciliations certain appropriate the three statements today to as for Please presentation disclosures measures. and slides of Our review the statements well and two appendix GAAP. presentation the regarding and

left want Richards, opportunity that Ryan an to of outside the of also the Director note to Relations Truist company. pursue Head We has former of Investor

have you Investor in If contact please following call Aaron questions me Reeves or Relations. today's

I'll with information over to contact release. earnings Our And on the is turn it of cover that the Kelly.

Kelly King

and morning very an really returns, community very a asset control, Alan especially with and set will earnings everybody. consider internal Thanks fee income, strong strong Thank strong about, I joining good much Clarke our banking; merger good good We efforts. excellent development overall you outstanding and quarter including integration, in progress excellent quality recognitions CRA talk rating on our insurance investment had and call. for which expense for

to most focus If you're the following culture. slide along on on like which always is we important four, our

we success. the determinant long-term primary many As you've as heard of us continue to culture times reiterate say our

excited really We've connects purpose with really Our teammates. this. been our about

our our great Even serving team help cultural causing culture activating really culture progress really with which created day our our to our COVID driven communities are really teammates with alive. made every Our enjoy works clients. council come our EL a in we've to shareholders. and We

on to on our some progress with how five made are think a things culture points good in excited prepare, are which XXX% Hispanics lead in $X.XX promote, Promise a And very were owners. in bond. Black that slide well-received that Human of ability investors, which excited we for On investor the regard and Best very is terms digital to of about and celebrate needs. just communities. of we excited innovative were the became banks in We're focus Work the the Corporate and ultimately consumers serving Rights well couple and It our affordable XXXX. the we workplace. regional driver. Equality XXX the community We pricing. of I national for hire, a retain, to Latino We Index of and was named pledge to terms Greenwood the received be very first-of-its-kind score issuer Place excellent in housing billion platform very to first So, is business banking we favorable bond We Campaign's social Hispanic signed US other designed and

already number at merger our there conversion by already few of want the again of the a about done. executing indicators most A just great for work huge XXX% work billion to actual has once amount we executing been has going slide already On been merger very out is proud benefits in of substantially done the community We you lot and chart conversions of just getting recognized that six and well how as that point you'll and we daily the admired to one of companies. Fortune the you going. world's is I to progress already in continue core annual as the make were our agreement on risk on we're been a merger bank And see has done. reduced to conversion. a of bubble down are of also We our target. terms $XX be do

did of conversion. testing Securities has For Truist brokerage huge all well occurring in a Truist protocols process We're trust the core amount conversion wealth just conversion. and already work the been in grading conversion, is a executed. for jobs of example bank A weeks. in that We our all terms of along wealth of few

various I won't we the progress that you is So, the making emphasize not tremendous risk in is mitigated final do think these part conversion. remain way good that XXX daily of being did branch those conversions of is first progress that the and to We for risk point is to we're we make the going which preparing see close who subside strategy. it. final on The our branches as until terms look just for do quarter that and to conversion in it. at a want high the

each performing reaction We teammate that. And very, Recall of client-facing so it's and most clients. very our been going have it's very our with are of well. close are very, very so and jobs inconvenience very, teammates that because their no lose would supportive they other very all to that branches to happy clients not our They're these we promised our remember very very, engaged. to

to will talk able We will we and that. we expense very on which focused meeting about are targets, our accomplish believe be Daryl

on highlights Just a few XA. performance

on had are we or strong it and billion achieving was completed net commercial some XXXX. or at $XXX terms We quarter $X.X We of quarter. income yet along It quarter which after-tax share insurance. way of $XX expense We decreased We an adjusted as XX%. share million about. million. come. million huge already with so non-interest banking reserve to savings total a income decreased trading most restructuring per by was sequentially we low was lower the about the $XXX had decreased of adjusted up XX.XX%. more losses We release and $XXX the Strong our redeem good in a very the were ROTCE a million. investment so $XX $X.XX repurchases $XXX of expense our of not recorded questions. for income to charges had our per net we target mid-term adjusted a residential in of We think the income. offset level happy real very, versus XX% cost mortgage $XXX record estate-related during discipline that decreases $XX I had talk significantly that have of about quarter we versus excluded million Recall of and of credit and said which so the NPAs million million $XX first income. at adjusted a of was to we very adjustment share, well for we we cost $X.XX that provision both fourth million our Clarke little if preferred or and can had in million did stock in X.X%, merger-related payout have quarter XXs

So of an overall, of worked and $X.XX; you $X.XX. our hedge expenses if incremental not related you'll charges to the see flow operating ongoing adjustments was are for slide a that X look diluting merger how going at expense impact charges the acceleration merger-related $X.XX; underlying cash forward with having the recurring in

a across So strong it quarter performance overall a array areas. wide very was of

high concept, excellent technology value the seamlessly proposition, most very Importantly, in factor our of level on is trust which our is TX our providing concept which client performance. we high terms so a future ultimately integrating touch important of and continue of to which and yield that is focus execute creating a the judging we current

Bill Now additional detail. Bill? to let me some on turn it

Bill Rogers

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

the absolutely meeting increasingly, company. page clients from see four interactions can space. they our last app March, continue adopt marks That X, as rapid important to users are. these you users. As digital an a journey digital mobile to our XX% has more happening committed along are million of increased population the our active And at milestone in pace. to Since clients where than digital a We're

products. is Our one-third data and percentage commerce when -- bear quarter Mortgage. XXXX bank core LightStream out, This include since higher have the met as production digital than digital first met improved more of digital represent of client even needs bank needs and total XX% of have client you this

we Deposits ago services. multiple products often of deepen from As two those both significantly examples digital their digital interact with opportunities just creates clients relationships. Check up and are and we this year a Zelle accompany journey were along Mobile to and which them across additional

migration in and is Digital in Straddle time experience ahead a increase innovative digital utilizing We time The of clients new during less our approach launched experience digital a transaction a the clients digital pilot year. in discussed activity migrate bank the and our year. Truist assessing In migrate as to enabled and also teammates risk by Importantly, series more needs of known to our new the spend the digital rolling migration to next to relationship and earlier complete We're to Kelly experience allows manual us and as management. recently Straddle. client an execution successful out we're third conversion, reducing the onetime a digital our quarter. our early waves migration clients the core about integrated Digital internal order later fourth of meeting excited expect proprietary new allows to waves, on this avoiding

talk Let XX, now about slide me turn loans. to

a and to and runoff. loans was impacting were outpaced Average $X.X balances quarter of PPP the as demand, to attributable elevated of billion quarter utilization mortgage residential utilization billion to lower ongoing continue $X.X loan government commitments. dynamics by loan primarily due The commercial markets. liquidity mild in loans in capital which hold of to billion. the stimulus combination loan loans, and continued $X.X balances $X.X to repaid decrease Approximately remained elevated clients low billion of balance commercial PPP $X average revolver reduction commercial during pay-down Revolver liquidity. sheet reflected a compared new access quarter and primarily fourth First decreased billion balance

and susceptible we've offset In prepayments. while addition, portfolio loan billion, our at and lender growth. all-time government is supported continues to supply residential an utilization our consumer $X.X is chain to and to mortgage, equity we're balances. portfolio plan related higher Average These as disruptions. steady. the experience refinance these direct that home commitments headwinds floor ongoing impacted all core of support more are loan headwinds been rates, activity decreased economic are loans segment. dealer view the We balances, our to mortgage of And of but stimulus benefited loans indirect in though many our decision especially prime also optimistic declines by given corresponding made partially production, recovery that auto higher own strong largest revolver lean the and PPP which Also purpose on in acknowledge and We markets. were lows, our recognize in conscious pipelines, in productivity a from vaccination prime

$X.X increased deposit first deposits switch Let up except XXXX sequentially balances increased the billion billion and talk behavior. to about Average reflecting from me pandemic-related page client categories quarter $XX time and all stimulus deposits. across the than and next of are deposits. Average more government

in were new favorable, increases clients, experience household to largest total the interest our checking outside strong deposits. the as as paid, one-third to growth. growth maximizing market and remains continues While we represent non-interest-bearing value accounts deposit rate mix while continue proposition to and money net Truist of deposit of savings, experience

to During points. up quarter the over basis seven since And stimulus, deposits me performance. Due average points deposits first we're the two basis and Daryl total five total average it with costs end. basis that, declined turn costs deposit financial in new to to let the four overall interest-bearing points basis points quarter, to discuss double-digits decreased to

Daryl Bible

XX. decreased and lower from sensitivity lower down basis earning Interest and quarter, margin $XX was interest due you, margin morning, purchase and million investment accretion. to resulted Thank in asset seven as interest Slide decreased basis Continuing as in balances Core higher Net deposit good lower point points, four yields. combined linked days, the liquidity. accounting on three points impact the everybody. slightly purchase elevated interest net portfolio a accounting grew reflecting fewer Bill Fed basis net inflows decreased accretion to Reported response securities. income

investment fourth was employee income a Investment higher in trading as Adjusted from casualty reflecting to in and Non-interest was due increased decreased divestiture. XX. estate recent $XXX banking income income transaction strength remained to restructuring expense seasonality and strong and CVA. certain by and million increased payroll rates. $XX due pension Residential as $XX wages. and $XX and margins costs due recovery partnership banking retention compensation non-interest Non-interest first and Expense professional $XX to lower and decreased $XX by partially offset equity-based Other income to million, million, non-service-related gains investment Personnel XX. $XX the revenue despite lower to timing was as strong by from partially discipline decrease higher activity. and higher a linked reflecting $XX lower expense stable Continuing Slide million grade equity million from million yield due million accounts. million, reflecting and quarter Commercial offset fees expense decreased our Turning million, down million, resets, charges. to income due tax million, high $XX in primarily business, seasonality, down Slide volumes. merger-related expense. quarter new trading. income and income quarter, $XX $XXX linked grew incentive record personnel compensation, offset insurance real salaries on Organic and quarter. million, benefit $XX strong benefiting Insurance acquisitions X.X% change in rose well decreased to production lower from related originations, and property mortgage

Turning to XX. slide

full both best the the both effort execute a harder We expense. our benefits unique justify is and build are client efficiencies typical best The and to on internal we to franchise. of are opportunity advantage convinced taking that the acquisition, of but of

charges As the billion to total XX. guidance provision Since of of decommission complete largely announced, $XX approximately incremental quality restructuring slide come costs or from balances $X approximately the credit the industrial to Continuing bank incremental charges, billion. related out remained future restructuring expenses expenses $X.X continue have million will merger. merger of we combined we million costs of end operating auto. on reserve the of by to $X.X redundant said run billion. and of The outlook. related merger-related core $XXX release asset charge-offs the basis asset points, are and we came This and Linked-quarter merger in incurred improved the after loans allowance and January, the $XXX million to losses stable, conversion and including XXXX in for merger-related billion we was effective two was merger the not systems. consists operating Net portfolio. approximately basis rate and Non-performing as matrix and benefits credit expect Strong seasonality These relatively economic relatively was $X.X $XX at in by mostly lower a losses at of loan was driven the The loans, for assets indirect driven diversification resolution. down million, a decreases increase percentage of and range. in leases. in X.XX% was reflecting due points and stable problem lower merger were total XX in commercial which of and

COVID-sensitive was of essentially $XX billion. exposure at Our flat industries

of paid XX. quarter million of slide dividend XX.X%. share ratio the share buybacks. capital respect strong With has common a ended to capital first CETX $XXX Turning a and had return, we Truist to $X.XX and per with of

not results. excluded preferred of was that $X.XX after-tax or share resulting $XX the redeemed We from an $XXX million also million, stock, charge per of in adjusted

the maintain into billion approved We authorization stock actions, in and the ratio intend remaining CETX approximate assets. account December. $X.X risk-weighted repurchase program in have share repurchase after under to strategic Board changes taking in XX% We repurchases,

As quarter a we $XXX million. about result, of repurchases anticipate second

billion. excellent We Through X.X%, and we of continue This Continuing in the shows on on liquidity, our ready quarter, and XX% strong saves reduced slide the slide net are to $X.X have clients sourceable the XX. cost towards to closing our communities. and progress spend target. first needs meet are of

XXX closures the terms we cumulative in In to quarter XXX. banking, retail the first branches of closed bringing

XXXX. towards branches track overall the approximately first are XXX Average merger non-branch on facilities five target FTEs approximately down We feet, are feet. the since our million million square progress by and are to X% of reduced making square of close by X.X We approximately announcement. quarter the

to savings We XXXX. by million expect compared of end the technology $XXX of XXXX

We other buckets expense look continue at broadening look to the and to these at across are board.

waterfall to XX. insurance slide acquisition adjusted expenses, the committed highly savings. cost plan are core savings and a nonqualified on the expense billion for cost shows then Beginning billion. target. of and $X.XXX expenses adjusting left expense to core Continuing that, we and non-interest the we The at with We our arrived measure $X.X

commissions, of for [ph] you fourth approach equity would If expenses payroll variable quarter billion. taxes, core adjust seasonality $X.XXX target high compensation of and

our equity on cost for our the and XXXX. Our performance may tangible medium-term economic first to return the saving quarter. common adjusted target ratio. for XX.XX% of maintained XXXX us and was moderation We targets and revisit merger enable Further CETX risk

quarter the expressed quarter guidance provide changes. for will linked I second in Now

We taxable-equivalent excluding flat. expect revenue to relatively gains security be

Non-interest core of expected We We to of runoff. to relatively to in a driven XX expect three points flat. balance interest for single-digits relatively of in reported range be growth to costs and tax margin high the mid interest amortization Net and the and accounting by four expense between decrease margin to a the net sheet. charge-offs XX%. flat XX% be anticipate accretion should be down income to single-digit adjusted points net purchase due merger XX rate basis basis

prudent XXXX, strong As we out strong for you quarter including had look our further into Overall, releases. quality. excellent expense asset conditions reserve management may a economic allow and

Bill update back Now, hand it me an let on to IRM. for

Bill Rogers

Page call and going I'm on Relationship I'm to take And Integrated natural this to progress of XX. share Daryl. share our fit Management us examples two take opportunity going businesses what we Thanks, to value investment mix offerings. working our we in together combining formed, said client-focused greater services benefit financial and experiences by of technology clients. distinctive a to banking was stronger we'd our When create with to Truist

Integrated Truist app. for and include strengths Truist the Securities, practice across industry-leading We differentiated with and technology approach lines called an into Management institute; because noted banking integrated and strengths. touch our start through model; Holdings on the importantly Insurance all Leadership really all business equals of through and leading our for of technology offerings strategy Truist, a the TX is technology-based and common Truist earlier, client needs, their trust. Relationship referral and our mobile process. in confident our advice-based partners our putting clients. it framework We're business businesses of accountability engage understand Those like this TX loyalty; with including As most Kelly Truist's client, we builds service

needs, pleased As in and three more episodic of factor as Community between but last up synergies the and doubled by is Referrals natural Commercial a nature are we're such lumpy have by very one Bank mentioned, business year little and the a momentum. Truist This client since Securities. relationship by we with than quarter. our driven have

We are continue and the quality of increasing to both and train number bankers referrals.

As we that tools share of clients. wins, to client benefit leverage the and motivation we fully the gain have teammates all like their for confidence

trained systems first speak our and effort particular. Moving to area heritage Slide Referrals SunTrust growth. I more and relationship really discuss of Securities XX than similar of double expertise Truist and insurance quarter and real clients. groups, and clients to from heritage increased us really to times X.X if practice the around from We've can aligned to of Truist the excitement just in of sequentially. for Holdings stages was a down this which the SunTrust XXXX on compared with in experience allows the Insurance have industry early this is than XX% and more

see this shareholders. distinguishable investment in is So fully but overall incremental clients teammates. is this benefit you in Integrated even opportunity this It's a in our been in beginning mind, the of our long support embraced and working. banking Management Keep our and of quarter. a Relationship results for insurance do the by It's game,

over me to let that you. Kelly, back So turn

Kelly King

Thank you, that. Bill. appreciate I

out believe to We communities. proposition XX, reemphasize better build our on very and want a purpose and our just inspire value I it So to driven is lives by proposition. Slide point value strong and

diverse services have and the franchise best some We with an the of exceptional products, in markets world.

seeing deliver We best-in-class already. to are in investing you're while and uniquely returns positioned efficiency future happening and the that

profile in and terms strong by strong with very have of position the our We enhanced risk capital very merger. resilience liquidity

relative So we many to less volatility long-term. the earnings stream of peers over have a with growing our

are up, wrapping a look better. a very the I things very you fast. if and It's infection are strong but too rates just times, So to down and It's it was but down out in challenging all say think quarter. really, getting rates are are better. interesting this and overall I'd over, is getting again, really about quarter and think COVID vaccines getting hospitalization soon declare and

a is reasons. simply appropriate we and said into snapback encouraged before improving. wounded reemphasize, economy into down This headed we believe not before as this, we second we we're it shut The economy clearly I the that. we half, So by head have We've was for economy. would will

of we're believe easy to as we see opportunities have other beginning than that on Now we've might happen, it seen. could is under types been that turning the which it crisis back economic

is really Truist So positioned really, well.

culture. great We have a

markets. We have great

a team. have We great

have and We communities and creating really great better teammates. a inspire and engaged build it's lives purpose to

benefits We every from have the that day. realized single merger real being are

You've some those. of heard

We track. have described merger Bill on very strong is performance in and TX and integration The powerful. IRM really that's as

have We well. to believe a the what into accelerate consider I fully are going our we best reducing Alan? to really, economy. believe positive We very snapback are single be all ahead. We risk days opportunity every It's day. really

Alan Greer

this session. back participate how Thank in explain Q&A can the time Kelly. at Okay. Katie, line if our on the you listeners would you, come and

Operator

RBC. Instructions] [Operator with Cassidy to you. first Gerard We'll Thank go

Gerard Cassidy

Good morning, Bill. Kelly, How are you?

Kelly King

Hi, Gerard.

Gerard Cassidy

read what us your cycle? of credit this into flatter lowered see seeing forward? the with the credit Reserve for flattened company we going in with kind what last credit and the we incredible is and last an Are credit we're Federal Can you aberration the Or industry, government you an share at such year? permanently the reduction policies saw if us, Can the that pursued seen outlook this give guys potentially you just look you by they because how US your because shouldn't we've of thoughts of cycles year. cycle on

Kelly King

excesses. long-term on credit believe decisions that and have would do the somehow indulging some and can details nor economy this nature cycles. that, think Clarke you making humans I away to believe we I believe I humans I of eliminates say add fixed in getting greedy not have has humans Gerard. I that would and that will likely and it ongoing the to don't some into undoubtedly two, some in lead projecting road see that will away. be this project years, amounts economy, to this there the of we I go It now excesses. corrections the don't all the next the some through massive three Once flush it stimulus we will out is nobody of but money will system. created excessive and into mean, believe excesses down gone fixed

a we Most and a have would about So the were pandemic, into economy. had XX-year -- had of correction. heading kind including we a steady probably say we people into myself, heading

what two, of we've three years had be Now experience. COVID will

of a had years. That flow We excesses. haven't correction two, in three will because these

we'll period end you or what from COVID. But back think? ex-out in relatively do XX- Clarke, protracted go view. of about the XX-year to my then variations So fairly a with up stable we'll kind blip normal economic

Clarke Starnes

of stress shutdown underlying would not from credit the resulting the normally you The economy considerations agree. that was credit see. I

we've around have a credit come in been involved risk We've So been to going long a cycle credit is cycles inherent go. the will future. and time

why you be will another can't to cycle that's ever have retailing. always to And principles. side So long-term forget underwriting there stick credit of your you

Gerard Cassidy

you. Thank

Bill Rogers

just maybe add And to that…

Gerard Cassidy

Bill. Go ahead,

Bill Rogers

the diversified sheet key is, Gerard, keeping maybe balance is to just to that that. our add

value business So, to and base a this want strong cycle. to we're because highly And of discipline diversified to fulfill lose and our a proposition. going capital not our anticipate we

Gerard Cassidy

half the current second you the know where in quarters it turning see there's points as U.S. for, the of then, I about of growth out of coastal or us the year third growth an economies in fourth in the that if liquidity? obviously located of your follow-up year? Kelly. What the particularly share of and acceleration the demand, beyond see You North. loan you in is open loan you and some the franchise possibly this outlook do you stronger guys the economies Can some touched more and look look with the could are a into loan on excessive than good, Very quarter economies

Bill Rogers

Gerard, Yes. I'll that. take

happens I of I first what happens, be think, whatever is we'll franchise. think, exactly it about mean, I benefited. right I our positively all, noted think, whenever you and disproportionately

because think I migration open that's be companies, mean of the think the only in sort case data the absolutely, individuals. but that that. the I showing we'll to second growth, said, the loan markets that in see but quite first that, migration. that And being cycle. starting don't show PPPs. core because period start PPP in is up, feel to it's sort reasonable migration just we over think we're growth, That exclude if to I of up So quarter a from think we we the of say for so being that's the absolutely of not in and of more yet, loan I weighted going little let's

think we look of part latter the of growth, have paydowns virtually positive that. in at got core we've to I the If all we loan be reasons related So for our businesses. to year,

C&I, -- auto the and growth and being example on opposite positive that CRE loan more core maybe then like, indirect the are clients. main mortgage and in and stand So then But LightStream the others businesses side.

is think premise I that's I general latter your the right. the think well positioned. And I And we're year half think phenomenon. of

Gerard Cassidy

Thank you.

Operator

Thank you. Mayo We'll from take with next Securities. our question Fargo Wells Mike

Mike Mayo

along And percentage your sticking That's is give cost that's increase updating you quarter be a was that, that? by fourth of question the Hi. expenses you're target if specific still the to such the savings and despite $X.X versus billion. is merger expense quarter. with expenses target? markets. an in case million $XX And And fourth the as an billion volume-based target? annualized the ultimate why annualized down, saving as The $XXX why in update wouldn't on of capital the of can It you for insurance ultimate

Daryl Bible

question. a That's great Yes, Mike.

we're the -- the seasonality take the the in if we you due you in there, that had what our company. resets higher million probably our that we and first at expenses And deck incentives. performance $XX quarter core out revenues and had by look at throughout little quarter, were or payroll, on Higher the billion If a our this have slide bit about take to back in that's We give the the equity incentives the and great did really tax overall are $X.XXX billion. driven just performance there. $X.XXX

of perspective But good we from I a progress. So, I continue kind make that out. core to carve think,

billion totally talked quarter. to We're committed to to that are getting track get the on $X.XXX last We about there. we

as are continue these industry. and targets And the we broadening said, in in we noticed you buckets, going those our good we're to we exceed to make to out to at hit also five our company If the And continue for but comments, we investments and well. other targets in looking areas at sure. will win compete we're if looking

Mike Mayo

Okay.

Before up updated for $XXX have second annualized, you my the question, million first I or that quarter no? the use so

Daryl Bible

first that's by moving. in you to real have we It's trajectory It's made fourth quarter a And target a fourth fourth we quarter. just we the it. updated say, We project -- of going will quarter lumpy. to get for the and quarter. just down year. But good really progress to hard be quarter But dynamic gave business our it's targets because this every

Mike Mayo

had is I follow-up. and our insurance analyst Okay. the second a such insurance since Greenspan And the ask Elyse to firm's question standout

Elyse Greenspan

Yes.

get to to X.X% hoping insurance growth was the I quarter. up -- So on within on organic is color it in some the

call of pointed you for the guys first On the had the to year. X% half last quarter

you had than progressing how year better you rest expected? And see of in the coming what's guess here? from do I the So

Chris Henson

business. organic This pricing be We number. did Elyse. was say Chris very of I pricing retention exciting The Henson. have is it and elements Sure of new not growth would would are We call The to increasing did to retail. in think continue rates level Retention X%. throughout balance going off XXXX. increased generally we surprise. be anticipated I'd what continued around a a

just We down. little we're So having under were XX%. a drift

know is As you we're to XX.X%. market a segment. shifted time in where the gets of wholesale the that actually risk to that up lot of Wholesale

we actually continue maybe to retention perform continued to do better. shift wholesale. a So to touch just that And see

ago. a would would spot in been to New a that than area have we point business be would seen I might brighter quarter have an

what And et And Bill It's which of is was drove we the spending And having say talking having CIG up was that better on in place linked made time with impact the better actually we pretty making X.X% than the Bank, saw every to And sure and month in of they're comment that's business an February is was well. New XX.X% a February -- solid. we the January, kind organic. expectations also actually heavily have and marginal that that was better. Bank got than aligned IRM would March I that's cetera. very what production we're when as quarter piggyback impact. real. Community Retail Community earlier, about wealth Commercial is

we're business certainly, year going terms moving quarter quarter up there's of the the of highest we'd on have We're second strongest going see economy of In it's increased first still second be out in think expect positive to is the outlook about because think while is the we X%. etcetera outlook, still we into uncertainties And seasonally pricing. to this quarter to commissions our very continue the the QX. to which is COVID our which impact,

failures seen strong. stable E&S business We to of think are we in units. so we're see to lot volumes haven't still continue a going exposure

diversified that So in type are it in we retail of both market. -- really given wholesale us helps this and and

all XX% excess X% We was momentum And professional cat flat talked -- But So where up about: did another we example us the up an it this reasons disproportionately range X.X%. in Commercial for in commercial property. we over in is XX.X% was property benefit area DNO COVID of continue liability being see with QX. think guide we XX%. pricing of umbrella pricing losses for be quarter will etcetera. to the

very range. coverage of That's up a of And We lot were About X.X% kind us. helpful sizes to to of account the the the all classes course there's X.X% classes. all were in that. up. And have half coverage of

quarter economy that that with We So us to stronger IRM the a continue as And say we of benefit out kind upside Bill the uncertainties expect think of throughout to and the outlook we move more year balance organic positive continued as for in as the and of there there's quarter we terms even think our to drive Even I next small through. those growth. we to solid did I growth about mature be as mid-single-digit would feel And given would very in new to the process acquisition of to pointed one gives do our open good close well. respect we certainly be well. business.

So the for on of balance XXXX. we're the really prospects good about balance

Operator

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

Betsy Graseck

morning. Good Hi.

Daryl Bible

Hey, Betsy.

Betsy Graseck

maybe the thinking I and a Q-on-Q. to relatively first the that of that because for I sure of bit. you that flat understand question XQ think was little guide expense some mentioned wanted you're down understood instead to it make wanted just flat I right keep coming Daryl I things maybe Just And if about the

Daryl Bible

we in did on out that In remarks, we relatively expenses incremental say merger flat. thought Betsy. the my and the basis restructuring come adjusted would backing Yes, prepared MOE

we in showing buckets that to areas. are good and I progress other the starting continue think out make we we're to in broaden

have seasonal the in areas net-net But to because the second and an in going how revenue come from we is on higher will feel expense certain We and quarter. of just quarter fees pretty in perspective. strength good

think targets. on hit our to going trajectory good I and we're we're a

Betsy Graseck

improvement And picking acceleration that the prior the through from is so move year. from as I'm is too you conversation what up hearing the expense

Daryl Bible

would That anticipation. the be

Betsy Graseck

you or revenue I kind far then goals so maybe sense or up not product at just know baked expanding a could wrench maybe picking COVID to And a new whether accounts to terms as I in set relative wanted side. the just that but in on speak your to you're that, with know you the you speak seeing the haven't far. so revenue what synergies, been have what of I this accounts to but separately to migrating could you're budgets of stage. or of in how you're the put get

Bill Rogers

it's Bill. Betsy, Yes.

sort see probably I see most investment referral it acutely that sort if you But core and really I we're of overall look line. I sort experiencing I earlier, the really results. It's in it's penetration the experiencing you in that at said insurance. think revenue in volume of mean. everywhere, the you that we're banking of the mean, as results in the

we've it that's specific of strong goal The thing our one against accountability listen the put one And revenue system to out our technology have to value relationships. been specific integrated highly is the clients all and the with by goal synergy really So proposition. about goal. because teammate a expand together supported good one that's platform them. careful pointing is The not to

it part is acutely what results. I think in businesses literally we're more real overall Truist you the our advantages as value implementing of see in that So pointed out the too of the see answer I Again, but proposition. just obvious, we're all of the

Chris Henson

to Betsy, that. on I'll tag

tag past Betsy, a saying saw the community in household I to is example, on quarter, in commercial good going bank referral we just the number Sorry, XX% activity growth really was for which just segments. of commercial up all this

think So it's sort saying Bill what across board. the to see a beginning I was function of we're movement just of

Betsy Graseck

That Yes. was of my question kind Okay. particular post. in

answer then been that you like I And in like is picking can do answer yes. As feel it reopening, has up? hear we've your been the seems

Bill Rogers

again terms in we leading reopening disproportionately. That's to in think That's other yes. of I feel virtually country experiencing reactivity. your We're Yes. little that absolutely. a question, our -- the of probably all we're businesses. Yes, And part the that the and of

Chris Henson

month-by-month. sort then lot improvement hit sort through We last the just of COVID, We wall. year a seen into think came the consistent of of excitement. with second we the first to I And the balance year. a a of perseveres with degree quarter But just sort quarter of all of excitement just

Betsy Graseck

Okay. All you. right. Thank

Operator

from We'll our question take Bank. Deutsche Matt you. with Thank O'Connor next

Daryl Bible

Matt. Hi,

Matt O’Connor

purchased the about kind bit in Hi. as securities? of so Can little forward? you this a guys lot capacity philosophy securities less What's look deploying the talk a of of liquidity bit just strategy quarter. a and you your Last we quarter

Daryl Bible

liquidity Right a The billion which the is U.S. now of gotten making basically what averaging excess any our our we Fed we're a from we handle there. combination doing $XX treasuries. Matt Yes. think and investments in is about investing we're volatility we to are are might cushion deposits. we've comfortable securities that get at we is mortgage-backed But

yields a up little that out averaging today have are we on have the that perspective. bit there the We that on we from portfolio

in I keep us of X% growth think range we're year. So ranges basically thing amount going to second said have is, And second way about loan some and and them basically the liquidity time. of kind the loans a have flows. securities could Bill that pick what is just X% the reinvest it are think for And overall. earnings going mid-X% into earlier, the up fair we're cash into starts sheet to balance And X% of to we the to quarter the that about best we improve happen to we our the in into half the same and and X% revenue runoff size or dovetailing

you this got billion us whatever every starts the off comes that to shrink absorb cash quarter liquidity portfolio can and to If, out, strategy sheet of that the I that balance $XX do billion we flows think that. for remember, would reason for to coming have their anything. be Fed to $X So we

we're taking good balanced So, I think, risk.

purchase is growth. meaningful Our flat to of towards quarters. the the now runoff the net pick of up And, interest several next accounting the loan with keep year, target that end income, hopefully, will get right even as for we

Matt O'Connor

Thanks. time And at kind separately. what that then, and more I think little think I loans Okay. the that of versa, the term and you to wanted But growth it synergies. up track just you regarding loan opportunities businesses longer provide follow the to offered numbers magnitude I might become didn't and on up so over I material. could guess, seem thinking and, some last we kind it synergies. would got like being not a more questions there's all of, pushing And more the question, revenue legacy apparent I'm on as the is, trying of, little understand, SunTrust details I picks and vice a see BBT the start necessarily,

you'd far consider? together So that But something the capital pricing quarter. market it talked all time over about is in you of kind of bringing some fourth that

Kelly King

opportunity, to trying timely as types on just not fee marginally We're that. do provide really important definitely will Bill we have information all a But those illustrated, of issues. think, we income. Chris deposits, I loan, and broad-based Matt,

this build just it that, surface. we have the across integrated concept clients' because, focuses the the an on reason keep We Now is all needs and systems is a edge IRM the organizational boundaries. to time. all be built concept emphasizing to works of where together. we think information allow on everybody because that powerful scratching we we are really We The of for culture most

And yes, you're so, right.

as be I expected penetrate our as of more positive in forward, revenue go can of to enhances needs. think clients' begin you bet, we we terms it

Matt O'Connor

Okay. Thank you.

Operator

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

Erika Najarian

Good Hi. morning.

Bill Rogers

morning. Good

Erika Najarian

sort of, to in capital be are universe clients have what expand. you aggressive grade, struggle back growth the about balance as non-investment sheet to equity think private a would is, year, you is us potentially are or private the many debt rest order continue I your question need remind My in bouncing is rating? markets how the could firms a have credit prospects the loan for clients of either big of that open, investors your of bank for don't and the that guess wide wondering

Bill Rogers

Yes. is have really to key a Erika, Bill. The portfolio. is balanced this

side on of see that, We've efficient lot don't equation. but long of I corporates bank bank got back the strength of think end, have up, markets. core for Then growth. primary If that that we most the access to see banking a there can you of as That's are of clients you avenue number a only community loans who out. loans. certainly middle and the They So they'll go good of won't use other borrowing. model way that's the their the going market rates revolvers capital sort large

for is utilization Just a bit increase loan us. revolver of a driver pretty significant little

terms think So in think drive I as it about we We from grade don't separation. needs. of portfolio the a the grade, it and we non-investment of about necessarily terms it the in client think the investment balanced

and client and have great efficient most we markets products. way, great the capability great So, the access if that's wants and capital

middle-market and want bank got For of them. have those we've to tight portfolio those a are product, a clients that serve great to able

versus predicated make So, our a Does really think other. concept balanced sense? portfolio versus this optimism that is on one I of the just

Erika Najarian

does. rising Yes, it great revolvers loan I Bill point and think becoming more that's rates And on a attractive.

corporates, vocally, I awash And corporates so hand, before that. question as little point drawn Do given re-lever? -- bit you keep during going do are been you especially on Or and is, be a to are cash. the telling with think more made -- those for you they have cash your cash the thank balances to that consumers hasn't has that they're that that went clients you follow-up pandemic? what clearly, expect through

Bill Rogers

out to I the everybody answer figure trying to that is think Erika, question.

You've business. can comment consumer. comment Chris I'll on consumer got a business and on and the

I to very for leaders psychologically with going -- more capital facilities, in you're think, to new think I the or what very begin with it's that The be very argues whether expect, liquidity than Recession. got would And to liquidity bank because going of later then reason view. result businesses that And the years reserved balance they you're of unnerved you're it's end going just Great is as maintaining you to up credit going see end to as few borrowing. see experience. markets that sheets. on weigh that, a are the unnerved a And businesses is COVID maintaining whether is were even

of to as part expect that than head the people still you're personally we most So, see maintain I year borrowing latter this expect, and increase into going liquidity. faster

Erika Najarian

Thank you.

Chris Henson

now seeing payments. XX% Obviously, result be balances of mean Consumer that's Erika, we equity more when are higher by but is driven these there's a thing think things occur, of is for I -- lot seeing today for got XXX%. -- it savings of what up nondiscretionary now there type on to lending, type tough And home a lending to And consumer, we're are we're and about stimulus. be are think, right which balances checking spending I products depletes, at what cash will But discretionary all I as demand. for type me. excuse seeing

Erika Najarian

Got you. Thank it.

Operator

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

Ken Usdin

follow up fees. kind your flattish to wanted outlook side, X-ish had just I everyone. talked income revenues within kind embedded morning of about flat fee And the insurance. I Chris percent flattish of think for and Good plus NII, Thanks. on the

that Well some look be optimistic quarter, what too and the there parts just then So, might a be wondering given outlook just for fees at what are you moving you. settling strengths? the year this had to things just other some recent of back understand, continues other sounded about And Daryl, think off Thank was the gain the in you very of you wanted that out positives beginning there as the of of to fees. out?

Daryl Bible

so fee perspective, said, as think in its Yes, that year will Ken. largest the have quarter be From strong. insurance, the will quarter, Chris a second I of

Second strong quarter area payments in is usually activity. the in activity

think I all strong. So those of relatively be will

think, for margins tighter our we're calling I mortgage in area.

higher have this if have adjustment we past quarter. So that areas, the investment have I we into think trading and And we'll CVA look even lower volumes, potentially. did might though revenues banking then a there you

really have have continue, For We or that to not. go going good or rates quarter a up to next going have prediction, if don't we up. are to not rates continue

flow strong pipeline So do that's kind area have flat. in saying we're just relatively the and M&A They pieces. other of

And a benefit right now, we can quarter fees. and hopefully we'll think unveils but flat quarter. relatively So see the feel we saying strong, past and think net-net, overall us this good I Ken, about I they'll performance. But still beat CVA pretty for how was that be just we're

Ken Usdin

teased obviously, the that that? to And it this CETX. But modest over like long what company could Great. you just would evaluate that at talking of to as before term? changes a XX% continue it. on getting you rest relook be pandemic the you And secondly, big Thanks. are this need what to tighten about delta? up are factors looks And continue be through to probably Got potential you've one. out the other priority Or the

Kelly King

Yes.

heard is say capital capital us and the Ken our So risk drives you've that between relationship what decisions.

of the we merger do making adjusted the risk Going We were substantial. externally current sure the that moment, merger risk material. the up and or right to we've into the judged

are what And risk mitigating, is look that economic mitigating, COVID so the we externally risk are as see mitigating. is forward we

So are meaningfully certainly it's substantial external internally. don't we not The anticipate. some huge factors mitigating that event

As reducing earlier daily. risks I described the are

more actions some is attractive all a now the should have be us projecting carefully. just hard to But And in now to take deployment. out in mitigate, capital because this so judge or to have you to a opportunity to for see opportunity learned to thing forward have It's months of the to literally as we began do that kind at time. take of our six environment continue kind have it can does risk right meaningful rational, materially that as of day we nine you shareholders. months it set capital not we materiality do, we and of is terms One have so it

Ken Usdin

Kelly. you, Thank it. Got

Operator

Evercore Thank next take John our you. We'll question from with Pancari ISI.

John Pancari

Good morning.

Kelly King

Morning.

John Pancari

around -- fourth the saw some quarter know than in I to compression I you incremental that. bottoming a of what some second could third thoughts front, And you. expect quarter? about margin big in greater the quarter that could do some guided On then materialize? that When maybe the we think. Thank and the margin? think think you How a we us the should expected pressure Should give drive for

Daryl Bible

John. Yes,

if you I'll with margin margin. start core look off at So our

digits. mid-single margin Our be we're core that to down was X.XX, guiding

So we'll the X.XXs. in stay I think

as we going a that. we to fed loan excess loan this until No margin deposit know, picks actually the on forecast we're happening all get what's -- do in it function stimulus on as and now and with to this it's more portfolio either the expect it's continue going because at all pressure funds said, trying the really hard number what to dollars. is to right plays been matter what those going the Given growth ever we or up, a out. of liquidity That's like go with core put as put volume to margin. invest to That

stay range four -- doing will year in I three of in reported X.XXs. purchase the if can as margin accounting if a pick our of to would And And we what or throughout the might now higher core of half the is running just loans of believe quarters. hopefully. you That at up this down. couple be lower right about year, accretion. the are GAAP, in quarter, most probably the look coming X.XXs. then the say just points mid margin second been X.XXs we our that the we But margin We it's basis off last It's continue. So

happens coming X.XX. that at as down out. take we're with in think will important the at the accretion And on managing plays the NII that than then flat there you better focused of guiding end depending take the flat on not what year probably and core by said down that three adjust down least X.XXs up come So year But I NII four runoff. give is if you we we're for for the and the or thing and or end are

John Pancari

it. Got

of half. as if the growth in a the the loan ideally then more helpful. back mentioned growth think type it loan going single-digit fair couple help of loan you importantly to That's you of that can us what in like. And XXXX? assume we the look low seems Maybe in the half into times we into inflection about front Thanks. And back reasonable? the about talking growth growth year materialize pace pace now Are being Okay. the the separately as that likely is of could in -- on

Bill Rogers

Yes.

impacts are on. project things those. at I We of are of months that we a as things look pipelines. like We there of had here just the a lot But mean think look going look productions. like hard it's like because We I events out. lot noted earlier, Kelly to at at things binary

loan through utilization I The influence So things think the look that if mean of be as digit part I the about think about mentioned you revolver talking of earlier about you I that if single things could we're latter would that But that. and do core overall I've changes base, kind think part year. single-digits. averaging think then, look half headwind at and more of of a really that growth have like at, of type growth. I remember, of, think have single-digit total the you growth we year just the for think, sort we And some bit of, PPP the core sort second little us course, sort about of opportunity. core of to But would in

John Pancari

helpful. Got Bill. it. Thanks, That’s

Operator

We'll you. Wolfe Bill final Carcache question with from Research. take our Thank

Bill Carcache

ESG discussions different in in your wanted have the you're they I on your are with are ESG? And Bill, commentary impact follow-up and financial Kelly release. thinking stakeholders? how ESG to stakes? How a about morning. Good Are evolved of differentiation? investments Thanks. stable Or source the the you of making

Kelly King

Yes.

kids for So, impacts we for be communities grandkids. the future about to long-term at ESG. economy of large. financial all the for of it's near-term feel fairly to positive, clearly life our quality bumpy good very at be impacts the the are, economic all of figure for honest, mention It's because the we're new very us To not out to the and the right right impacts do that this. what economic long-term But our no our and there's will doubt now thing

And broad-based committed a very program. so, really to ESG are aggressive and we

just Daryl bond. lot a social of doing our terms already things has done You're we're lot of bringing seeing a our like environment. things in of

more lots road. plans the go have We as we down

we invested that the in in and all corporate something to it's So, is. need Truist community be highly

a bumpy. little short-term, it's long-term. think the be it In net accretive could I

Bill Rogers

Yes.

opportunity I we as collectively think mean I view versus a as requirement. it Kelly said, an

us a just to they better think that's think better teammates it. society. how will we make And have that. our a I and think And company just I that -- want about are things think I embraced

Bill Carcache

of of or merger slide the on seven these costs variability a come to better thoughts XX? $X.X to around about through separate you may the the $X.X billion potential would for a there quarters worse? side do give great. With additional I Thank some for Daryl. That's And perspective follow-up, billion go either you. Could how and helpful. Any you think on XXXX, as if around be either question in

Daryl Bible

through, tell you about $X.X two and numbers numbers did finish year add in $X.X getting be as year we're the billion. probably come together, would I we of if Last XXXX. you billion. billion then as rest Bill, year, $X.X out we'll the And track this $X the about on this we'll billion, well get and

right I track So, now. think just we're on

really the honest sure to the to able is client all, focus, you, of great experience. that conversions best main in be I what with we everybody that should Our a to and cost to would make be positive there job on do that to the happen. be really should enable has outcome a have mean --

Bill Carcache

Very helpful. Thank you.

Operator

speakers additional for any our turn back session. That question-and-answer over to will to it or closing like our conclude remarks. I'd

Alan Greer

your all Okay. joining get the we complete earnings for call. queue didn't to questions. in does time apologize that you Thank We to This our those to our have call.

We out you Thank you today. you a day. have and will to hope later great we reach

Operator

That We participation. appreciate call. concludes your today's

Truist Financial (TFC) 15 Apr 212021 Q1 Earnings call transcript