TFC - Earnings call transcript Q2 2022 | Truist Financial Corporation

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Operator

Greetings, ladies and gentlemen, and welcome to the Truist Financial Corporation's Second Quarter 2022 Earnings Conference Call. Currently, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

As a reminder, this event is being recorded. It is now my pleasure to introduce your host, Mr. Investor Financial of Head Vyas, Relations, Corporation. Truist Ankur

Ankur Vyas

and morning, to With Truist's you, Bill today Jennifer, quarter Welcome good and Rogers; CEO, and call. Thank second Bible. everyone. XXXX our Chairman CFO, our Daryl are us earnings

are our they efforts our purpose. Vice Officer, The During Chair; our focus, second quarter Relations perspective Investor the transition current Risk an and to continued Chief operating from supplemental Truist's an well and Chief available business Q&A ir.truist.com. discuss John Howard, website, results information earnings presentation in this will Starnes, accompanying are are Cummins, on Truist's and share our activation Beau and of Insurance our the our Clarke participate morning's call. attendance their also and to as conditions in Truist call, to on the as portion Officer; of release available integration focus financial

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

is and edit guarantee teleconference are turn over located does accuracy With I'll responsible addition, website. nor that, only earnings not to third now transcripts it of and not our parties. by archived webcast In the provided Bill. The Truist live for authorized on our

Bill Rogers

in our environment. for of quarter, Thanks, resiliency the this Ankur. business and reflecting after Good market momentum joining Trust diverse call improving integration delivered our volatile morning, you thank good mix our and morning. a second everyone, a the

the to expanded provided interest franchise. Credit takes. puts stress strong growth financial common a the results, excellent and deposit and rates increase broad-based. performance strong and due at X% modestly our its resolution Loan will our we margin in with dividend Board April several consider pleased the higher in and Our results quality light exceeded recent we was by are Net these relative In to July test. meeting. significantly interest guidance in our absolute remains by of

combined and costs, performance, with operating. benefits reflects from to quarter's This client lower experience of dramatically our the integrating merger improving shift initial trends

stemming slide to integration on out to Then closing work issues for decommissioning going do, delivering and our still four. losses, those in and commitment some such year am process, I'm very as positive topics going there's reaffirm leverage elevated moment. to completing operational XXXX. of more While operating residual Truist's trajectory to a details the full our confident share in I

deep, our you Truist all to culture fundamentally communities. as know, a We and and is better purpose-driven know a As inspire for foundation that our success the purpose-led build company. is company dedicated lives

with to purpose very and to first. begins Our I day. that purpose do defines the that four business every be on examples how drives It often we slide. be it's to I'll the think word necessary intentionally Inspire, inspirational, and reflect and performance next be bold highlight

$XX to teammates Purposeful client-facing we on wage the teammates, approximately and foremost, investment retail and retaining is will talent. in benefit hour of a an business our significant First roles announced and a banking small making October have raising recently will attracting increase in best dependent we're XX% our by This whom effective business. X. that about minimum XX,XXX growth

who designed inflation we who In a the teammates impact program lives. most that their compensation in also needed helps addition want to our industry-leading benefits, of daily

and suite our a new we negative yesterday. Banking zero solutions Truist liquidity flagship $XXX qualifying balance the they need a access clients One eliminate provide differentiated This overdraft everyday of checking and has two through including The Second, the accounts is historic provide One had simple account that banking, that fees fees capability buffer. checking of greater reimagine launch to new credit. Truist to overdraft

At We no street mindful and banking fees. consumers and with June. in provides businesses. of services to released vital We're health fourth, Account, elements to main vibrancy also company have ESG our an includes stimulus and of which introduced and of inflation by overdraft and our climate This access Truist reduced Truist, the to examples inclusion CSR across purpose may early communities. our that the commitment the improve One as XXXX Confidence strengthen of And impact is clients, and that and on committed small advancing into small which our support exemplifies million action, some financial ESG we're many businesses, of one opportunity all we we put supporting how change. Truist view our $XXX and so diverse our Truist are our the of and to communities. purpose to report

as community to bank further economy, As with transition. carbon for clients how to opportunity embraced recently lower our transition as our our welcomed we around own look and externalize possibilities commercial we pleased and zero help the aspirations CIB their viewing make new net We're a our and growth. to advisory practices our in clients own ESG an underscores advice have ESG the within expertise and created it

Now with what guidance, totaled in first were turning quarter. to $XXX costs X. of million, Consistent they our roughly previous merger-related Slide the half

to This decrease XXXX earnings improving welcome in to correspond XXXX. significantly quality, more and, costs before trajectory We complex ultimately, be diminishing as back in returns. of to the going narrative, away merger half capital news shareholders a industry-leading should entirely costs less expect merger

gain a incurred early FHLB to of in million we Lastly, $XX related million $XXX the pre-tax extinguishment debt.

billion We a basis. on on highlights second Turning reported the to share slide. our $X.X quarter a next or $X.XX earned performance

reflecting from mortgage. three things a and quarters, ALLL a AOCI as continued expenses related strong totaled loan Adjusted X% X.X%, market-sensitive release growth, XX%. in due normalization ROTCE travel and Other the shift items and higher earnings assuming incentive XX% in due flat operational strong adjusted was fee investment teammate EPS provision results, ratio, first XX% by like costs, from consumer operating. elevated primarily down expenses quarter. higher normalizing a to increase up Slide strong year X, to prior a a of reserve Relative softness compensation alongside and adjusted prior the XX%, PPNR. decreased ago, higher billion Adjusted in well-controlled to increased losses. was share, benefited adjusted compared selected to our wealth and insurance offset ROTCE adjusted to technology to support quarter, a $X.X when intentional Adjusted from the and loan seasonality or even zero to the also sizable insurance loss businesses Excluding on $X.XX deposit increased as banking, XX% investments integrating partially offset rates short-term revenue in talent in such

enhance processes have innovative the products, client We the planned launch these of losses overall reduce enhancements to approaches underway and experience, authentication later this including and quarter. technology

primarily million While leverage Despite year-to-date, PAA year-to-date the from have year. headwind the positive adjusted basis headwinds, operating full on GAAP leverage these revenue. $XXX and both basis was we PPP we're a this reflects points operating a for negative XXX and targeting still

the in continued integration. process. performance demonstrated strong loan quarter. second of Asset remains light million by XXXX strong CCAR in repurchases. quality quarter the remain in of second $XXX excellent relative to power deployment funded first decreased Capital of our the we charge-offs as Truist risk the quarter levels profitability to post and worth reflect share and strong Overall, completed growth Capital and healthy was net our profile, the begins

clients. Now enhancements our higher increased seasonality value platform, turning the for to XXX delivery of in slide second representing the to significantly X. quarter, implemented and Digital pace activity attributable across nearly we a

we for real-time and better rapidly has opening clients. ability June, in initial introduction by new Our reflects personally with satisfaction teammates improved capabilities as located headquarters, to modern to to I'm and within incorporate scores, and collaborate to client in they incubator the our digital building, such resulted provides augmented dynamic journey client aid in improved where where and more serve to co-create cross-channel and reimagine rooms, how of new and The refining announced grand of we the to facilitating space Digital and risen reality virtual collect technology; which testing new since space have the our agile our client ability a clients an of reality platform our features products Truist lab, a environment Agile utilize and of state-of-the-art a consistently Innovation feedback with a client directly and can our marketable ways services; teams respond Technology experience waves we from can maker as reimagining about XXXX. the clients. conducive ITC excited feedback working center our In contact we services. Center

account can I'm mobile positive growth to price wellness. gaming also award-winning Long our integration also acquired gamification app Game's now activities financial empower that and drive client our behaviors technology, build San new savings Game, clients Truist that Long By utilizes link financial retention. long-term merger report the motivate are to innovative to and complete. leveraging Francisco-based and pleased behavioral economics, We

release merger was held in Oversight and we May last meeting. rolled out Committee our final recently merger Our

One. earlier and our will experience shift And I referenced and to pace deposit Truist technology. soon I of looking models -- accelerating digital increased BAU, Zest; Truist client through Assist, virtual a enhance mentioned, examples. of to we with real-time, As to of our core, a performance name potential LightStream include millions on as introduced to product the we're our out our of we are new earlier, I the focus just teams clients, technology referenced about and we as innovation optimistic improvements. digital investment and forward to as cloud-based expand on increasingly underwriting assistant and few the a Overall, sophistication a roll partnership our Yesterday,

loan across current where very The by Growth on loans billion during balances sequentially businesses. was Now and broad-based $X.X X.X% slide industry primarily growth or end-of-period leases across a verticals, existing turning for up and growth X.X%. robust accelerated and CapEx, to and driven with energy, relevance CIB of the banks from the C&I, balances most We loans consumer bond loan to market inventories increased revolver quarter $X.X X.X% or increased higher with increased growth retail, billion Average pace the M&A XX. delivered most overall. average to with usage institutions, a financial activity, inflation. TMT. Due clients and shift new notably

reflecting product be about optimistic second competitive increased growth future the same all a headwind, the be highly with sheet. we the end and recent though, larger both CRE over strongest reflecting period to XX%, regions disciplined highest Asset clarity – as create continues market CRE rates. since $XXX fees. continue At points within talent, heritage approach. excluding to PPP strategic capabilities competition the I create continue Commercial and increased balances strategic geographic our and Wealth the quarters, and our just that plan, from more a capabilities level clients of a we up as utilization floor was and across slower out internally remains our somewhat to of since our Revolver balance basis we XXXX. time dealer more ongoing to of continue non-bank as build growth mortgage C&I mid XXXX. business Residential Community prepayment rising more increased reflecting XXX group strong in and million purchases our as sequentially X%, advisers growth rationalizes the X.X%, was with As both business Bank combined and to lending correspondent benefit Finance firms.

and X.X% Excluding partnership LightStream student mortgage, development the good high more in Service Prime with billion or and Service $X given increased is business alignment than Finance balances Truist. experiencing card Finance, and growth performing strong Sheffield with momentum portfolios. expectations offset consumer in runoff Auto, our in and line our as

volume Second the terminated Finance double about by and quarter our partnerships. loss Service the production from profitability double was

is back fourth Our following it business on some own quarter also front conversion. prime regaining after auto its momentum foot its lost

positioned creates In their their consistency, to are which automated businesses Overall, on same input our clients consumer capabilities and to postures. time, capabilities economic concerns improves addition, and finance advise experiences. better given client ultimately and teammates. creating costs, given broad a continue potential higher clients rates businesses. defensive are conditions generally across is for At shortages demand of scenarios positive and rising more our decision well advance efficiency in range growing, talented Truist about current the pressure, the and margin labor

post-integration this, may account taking have of generally this growth from acknowledge remain to about uncertainty particularly same associated our the our loan economic we which the increased all the to for softening At environment, outlook. continued with growth, positive Given we into time, loan momentum. prospects deviate cause

brokered $X.X increase Turning in Average balances quarter, deposits Slide deposits to during on an to the X% XX. deposit largely attributable billion mid-March. increased in second or

billion $X.X our strong franchise or position. average and commercial enviable deposits, controlled, Deposit brokered and share market X.X%. costs Truist's well decreased reflecting Excluding deposits were oriented very retail

against corporate client In excellent addition, while outside strategy maximizing relationships treasury business a execution and rate teams lines value our to thoughtful delivered paid. client to of attentive needs be and of

As below our client betas interest-bearing were X%, a modeled result, deposit well assumptions.

interest deposit given turn particularly our managing we'll approach As continue greater forms Daryl growth to me to to rate broad And it our environment to in access review the funding. to evolves, rate over detail. a let financial balanced paid, take other now performance and of

Daryl Bible

Good morning, everyone.

to Slide Turning alongside growth. X% to increased Net strong addition interest limited sequentially, short-term in loan higher rates by deposit income XX. betas driven interest

We funding growth. shift strong and loan mix portfolio a also shrinking saw with asset positive investment the

points. interest core similar the and basis betas. net deposit income interest interest As delivering repricing. to quality Bill increased XX indicated, than due approach Net to guidance, the also lower margin teammates Reported and primarily increased take limited end strong margin rate rate we interest our a increased XX margin continue April points interest deposit reasons net and basis balanced deposit modeled high our net for risk. our franchise exceeded managing to of of Overall,

to with sensitive be deposit sources. and To will of added and swaps over approximate years XX% disintermediation protect minimize forward range against XXXX that the with decrease rate downside increases any second through primarily future benefit to rates, potential which earnings asset associated have $XX These laddered the from interest-bearing in cumulative to we continue diminishing and will funding three quarters. an are the five XXXX We in of and also maturities volatility. that billion forecasted third and beta begin We starting. swaps, time

and increased quarter million, payment-related Vanguard Residential $XX offset by Insurance income relationships and quarter income interest the rates Car hedging prior XX. flat Servicing income due reflecting sequentially. higher from increased merchant seasonality, increased was quarter Moving essentially Kensington to to the pressured Slide lower decreased full million of gain-on-sale million Fee the million $XX increased X.X% were $XXX and of as acquisition organic income growth $XX volumes strong activity. or as XX% prepays fees acquisition. the mortgage and or prior the increasing margins. costs.

in well banking some for and challenging portfolios. offense. seasonal sequentially Truist's the acquire volatility as approximately elimination as in by Slide of a included relatively is realization hire flat on sequentially banking leveraging this all We and certain the last most impact team balance to mortgage, of sale charges well-regarded our were stable flat remain remain products, environment income, continues income primarily as to a deposits but trends favorable to SBIC nonqualified was While declined mortgage By loss market to very officers private certain table more portfolio. strong subject our relatively servicing bottom XX% quarter. overdraft diversify plan and due Other continue year-over-year resulting sheet Investment pipelines of during to investment and full April, quarter's on at across XX of to were playing $XX equity trends in purpose of decreased $XX Service negatively excluding fees million, income as certain Investment savings products. a to funds merchant the conditions. million select, more is loan client market make changes other our the a trading clear. these gain, offset pipelines will

expenses normal across million insurance-related lower activity. Turning lines impact our expenses driven to expenses sequentially reduction increased investments the higher integration costs expenses technology due $XXX decreased of and million or of to The diminishing to and compensation, incentive compensation Reported by were due merger Slide teams. talent in $XX increased XX. $X.X $XXX XX% ongoing to Adjusted quarter first million in business increases full $XX million. Personnel seasonally billion.

ongoing other million in increased center due Professional million, processing In and costs higher $XX the staffing. fees expense call addition, of due travel. and increase to increased losses operational $XX outside primarily teammate normalization to

offset lower increase X. by and will wage minimum investment and a represents significant $XX effective client expected teammates increase expense our hour is million to turnover expense mentioned, our our annually, experience. execution and per Bill by improved As $XXX in This personnel to October

to Moving XX. Slide

reflecting quality remain culture, loans indicators sequentially portfolio and Leading and remains excellent, prudent conditions. benign. lower decreased XX% year our X% risk credit ago. diverse commercial Criticized and Asset economic to classified solid are a

at basis was XX ratio NPL Our points. X to flat XX XX XX and points decreased to loans past due basis days points basis

basis Our allowance to basis build net a slight points. charge-off We the X in points ratio also to XX growth. loan due decreased experienced

Although the by performance, XXX economic portfolio slower moderately given strong decreased points, somewhat allowance coverage points X outlook. to tempered our ratio our basis basis

of were the each our scenario weighting scenarios that a optimistic from may baseline quarter, trend the is pessimistic While first moderately and worse, unchanged continue.

XX. Slide on Moving

to declined million during loan quarter. the Our ratio points $XXX second a and basis X.X%, repurchase CETX XX share strong growth

dividend the leaders the common group. severely Board XXXX If meeting. our previously also consider third the CETX one effect as erosion pleased to the take X% peer and will increase As stress group in announced, in and under of had our with reserve will quarterly the July in lowest peer increase Truist dividend rate second the an test. during position its in continue approved, Truist were We scenario. the loan quarter adverse will a performance loss the at

these latter results test capital and at Our demonstrate capital over profitability XXX relative profile, improve basis the We should which buffer preliminary stress flat our remained points. of the believe risk to strong time.

and brokered towards with now X.X% a comfortable fund Truist Loan the The and the as of our guidance growth. of sources strong deposit we year integration Bank net Home influence loan use full perspective, the funding will for previously below In X.XX% the deposits revenue Federal grow mixture how to we given Overall, to XXXX operating adjusted results given has reduced announced securities growth stress to of From available our will now seen much multiple XXXX, this now risk. operate target continues provide our expect outlook ratio interest loan growth, more new prior are portfolio. third quarter. significantly economic continued I and exceeded incremental to advances more guidance CETX We target. XXXX. and test revenue X.X% tilt from growth, for income ratio end-of-period hiring below this ongoing adjusted the wealth. points fees, first in higher mortgage, operating to increase previously This outlook the Net-net, PPNR guide. X% we partially for offset net by and as support lower investment to of outlook wage, our operating, XXXX. environment, now full the X% teammates charge-off performance We our for expect expense to and is integrating higher interest full to market-sensitive light during the the and to from basis investments reflects investments businesses half shift expense in expect short-term experience from versus our XX such largely be to year minimum in rates, primarily banking, intentional of increase credit year losses the non-interest and client technology. slightly support outlook year. increasing our In XX quarter to including higher benign and in

the non-interest Looking we offset income, grow to higher net partially into high expense. PPNR second single-digits primarily the a result of quarter adjusted as by higher level, third expect quarter, in interest

hike and basis mid-XX net the point increase a basis expect XX recent due our benefits We in rate July. hikes interest from margin in point core projected to

as result low net margin declines core a XX purchase expansion, expect also by interest accounting net of continued point increase interest offset GAAP basis margin in We accretion. in

Now, to conclude. turn Bill it back to I'll

Bill Rogers

call first marked moving expressed our turning financial And point and that On belief Thanks Truist. the April, for I slide earnings strategic Daryl. previous my in quarter to a XX.

on results we're deliver potential are bearing and this thesis quarter of the beginning Truist. to second out Our

in palpable. Truist's XXXX, to wealth in market, quarters. Chicago conversions finished hiring XX the increased the time Wealth quarter serves the across largest the for second Wealth who continues purpose areas Wealth set of States. are advisers is XX and that to entry first in businesses nine of broad into net in metropolitan For United adviser within momentum now through company build momentum both IRM. in the the With grew capabilities, Truist recent the our and count attracted

now organic origination net improved applications The mortgage for since of percentage scores positive been every addition, for August of business, In conversion flows satisfaction completed straight XX%. asset have retail their have XXXX. client client In five in digitally our quarters. month is

have PCB-related it's ended within completed IRM of were where rest the been been and across Consumer primarily to all building. improve. up from the the X% compared Retail still quarter. conversions highlighting the we've was expected. loan and in Truist up Net is activity first of XXXX, also interest and as Financially, XX% the Pipelines was Branch community significant client to the XX% and XX% XX% with Promoter to in momentum first deposit power at quarter the with second low up home our is relative the the products digital first company quarter. net point, first momentum XX% income and also Loan year-over-year. the model. was and our up it's advice-driven which the quarter bank equity core the their of sequentially For highest both from production increased rebounded quarter margin production, up Deposit the seen. first quarter relative quarter Truist. revenue at in opportunity sequentially production, bank production was nicely rebounded scores within is have Banking and more satisfaction March highest to lows commercial highest at the branches

synergy will While on of significant improve underscore fee opportunities. believe fees we as had business results our conditions normalize we second capitalize the market extent income diverse our IRM and and improve importance mix did not quarter to our revenue hoped, and the we

rapidly, positive XXXX. systems half costs full in will data back towards the year of good year, drive realizing the saves merger cost decommission which we making the we're and our are progress as addition, remaining all help and leverage In declining operating of centers for

strong that, range it power relative economic capital the believe our diverse uncertainty, too requires economic forecast focus. our and economy relative an year into still profile nevertheless mix, broad thesis. potential, to position advice our Ankur. and excellence, summarized our integration is diminished outcomes positioned and of is next. for risk importantly, to executional focus and execution given to Truist clearly inflation focus about Slide our our and of conclude to on So path, the optimistic We're our Strategically, healthy, further hours all clearly the of through and, investment transformation we shifted improving growth. At policy, client and digital on conservative millions experience oriented a technology, in right activity highly me move ongoing in credit shifting investments with and this into a Truist same has which simplification business to of the potential I'm you, And XX, purpose every excellence significant the require executional the operations monetary continuing in processes by focused not day. of the each also and activities shifts of across turn capital with incremental appetite tightening or is better growth. have of the at activate currently a integration have, IRM over shift let as to risk while outlook lives and, culture, and synergy somewhat we well as of clients, our this capturing is time, markets, revenue we effects and is coupled back course, our We're model aggressive clients. from to for for most our building geopolitical on strong high on squarely do These and center only related and absolute

Ankur Vyas

in and limit that like Thanks, to explain one will you today. so session? please we of the Bill. to accommodate the this many can you can participate participants as listeners please to follow-up, at ask Jennifer, Q&A you yourself that, how As question I'd as primary time, one our do possible

Operator

go you. Graseck [Operator Stanley. with Morgan Thank Betsy to Instructions] first We'll

Betsy Graseck

Hi. Good morning.

Bill Rogers

Good morning.

Daryl Bible

Good morning.

Betsy Graseck

little if about utilizing brokered hedge for comments factor you're you're that's questions talk a Could where you accessing the your from you of core your you have. NIM the show prepared what then future rate up and here? several you protecting know sensitivity. about speak your should the you volatility about just for bit around a on doing the deposits, to we remarks funding and how put against I that mix. you're that And for about with to of how into in some deposit in going expect on couple A thinking little earnings how your pools could bit outlook Thanks. had pricing thinking

Daryl Bible

Betsy. Yes,

first portfolio. and So going to we broad-based we expect we're growth To strong this to prepared fund that, quarter, excited said and Bill I would his were start with, really that of in investment really letting as we runoff change mix comfortable We with loan on continue, to remarks. have that very the our that balance the investment positive excess a built -- that portfolio off when We're liquidity. all had the run have have sheet. start

brokered deposits and knowing probably I want lot available capacity months. brokered where add over a to from be would several other say, sources have we we deposits, we're of the marketplace. that did last still at some as far perspective, we the funding in As that

amounts, You paid in during we negotiable other that off have COVID capacity and Bank we all at Home Loan Federal advances much and XXXX of CDs and there. look amount

betas sure in purposes. much across better for modeled were strategies deposit stay give really from guidelines quarter, use that shrink investment model back we I pleased, outperform to to out really second to to our going about, $XX we an talked I look think we continue XX we than and strategy. thing the came will will Bill as we probably care far only could for clients pricing, other feel I X%, you the $XXX continue continue company, still do think that portfolio regulatory we're and perspective, The take hopefully that within portfolio at But and have say, the as make low. we which if in includes easily $XX And our And or brokered. about you at and liquidity billion is really, When to expectations. that overall, billion, as We for brokered, our our were came that the comfortable billion pricing. of take. we we to to We're our modeled. we would our Though, first ability LCR exception use XXX. XX,

Bill Rogers

in one stable that, year. be the balance for for had Betsy, X% under is deposits remember, add think, just as we we'll But I thing I'd the Daryl growth pointed of out, somewhat DDA.

mean sitting most of a XX% benefits the share relationships. beta clients market We're highly the our business got And we're the now markets. I those We've of new in I just and adding merger. So under net really that's with expanding think diversified. reflects just

percent our deposits are around less than Somewhere $XXX,XXX. XX-plus of

unique So which year. franchise here balance on stable a we've the deposits continues think, the benefit the DDA of to and side, overall for I got

Betsy Graseck

loan And growth… the

Daryl Bible

your question. hedge And

Bill Rogers

yeah, yeah. Oh,

Daryl Bible

I rates, part starting – to for in Since are much forward just on won't the the out add on down. on most we are you receivers years. just steady markets to out the some we as way the gradually deposit way up one two capacity have

sensitive potentially manages as rates forward putting just go as overall. decreasing might hedges rates protect to But we we're still in though fall asset income up. So and these are continue

Betsy Graseck

it. Got

with be here poised I growth, pace we much. for question how pace loan little of helpful. it from sensing about on bit so strong. very of the a that's to to this thinking color Just And hearing a at what guess continue foreseeable that should No, that? point future? Okay. loan follow-up field is, your Is are the yeah, Thanks for growth? accelerate, And on you the was loan growth then the regard

Bill Rogers

this a sort that's of the and But Betsy, figures. question in and sort we basis, long-term were short-term balance basis, through the Yeah, of of we year, mid-single the on the on of if year-over-year look sustainability.

think, figures terms end of be loan the in of we'll in growth. the higher I single

excited. Our are teams

I significantly. numbers, which Our production highlighted, up are

Our pipelines are up.

So a bit we're broad-based. loan of – is is it and prowess I of we're to that, great think seeing And little shift integration in our maybe terms news on the to idiosyncratic the extremely us, side.

HELOC’s core it up, C&I up, in only up. applications the branch mean, network, is So not are their loans personal are but I are our side,

at So similarly, much to they're starting execute level. higher a

Betsy Graseck

Yeah.

Operator

Usdin Ken We'll with Jefferies. go next to

Ken Usdin

morning. Good Yes.

challenges fee revenue your some the great about We quarter, out on lines. the some side, you Yeah, of insurance had that. Sorry comments this other of follow-up about up the heard looking on as XX%. a

the just you walk outlook what through about mostly us you because help you're PPNR you can gave, expecting that income side, NII inside think I higher third higher and on expenses. So just just kind fee quarter talked of that

So any you. granularity great? on the fee side Thank would be

Bill Rogers

Yeah. Hey, Ken.

the Let categories. me – a through do me broad of let maybe just walk

growth you the think that say, sort stable maybe noted, me offset that Insurance, and against will I that. income overall, of fee solid relative first some let puts and to give I'd takes seasonality. organic of as you some half,

we So really the have in good I about insurance business. invest mentioned the And there. that feel we're momentum as earlier, to continuing we

of the we think bit we've then the takes. where continue Mortgage, out, half momentum Investment And to servicing. right But IRM really of change. could the growth are good get offset half to – a third market bank, net of markets butter the sort sales, probably sort now. a that the of a more probably So see we've as expect in I kind there continuing bit good solid. We've we I year. investment bread capacity production so tailwind our of and little And also if wildcard flat about advisers, we added that us. just sort bit unique banking, of Gain less be of little invest. quarter, better and that in by probably are down puts some of our that dependent. a be second whether there. asset we little on rebound probably year the feel and as little Pipelines Origination comes got mortgage be half a really to flows commercial we're bankers bit a there then bit highlighted little little second but the some of, than a first. Wealth banking the things this hiring I'd, probably some to terms business. from and of side earlier, a that's market call first community to got really and solid of

So with and down. we're the be decisions side, the And overdraft we've service that charge leaning in Truist made decisions will there. on then One with

a I through on net-net, that's, income the good walk sort fee So of think, side.

Ken Usdin

time? a you talked what capital on, little And a than okay. allocation biased then you this been And deals CETX more you're in had of saw potential quarter. over saw buyback, thinking, that about question lower Bill. terms guys just second Great, X.X% X.XX%. just We Thanks you have operating for you your did just decisions and those of towards insurance

Bill Rogers

Yeah.

using want we're using great right with mean, really it to growth. so we're is we where I now, the news exactly capital So

funding the So we've loan been growth.

merger we've about, capital driven talked results were economic CCAR uncertainty. our As and risk, by levels

Economic moderated with merger think risk increasing I behind during was low Very and profile, profile. the us. largely pleased pandemic, a better PPNR results, really maybe bit. risk CCAR little it uncertainty, our is high the

got some organic see we've those. of you are. of as opportunity growth. non-bank all M&A, comfortable We we where do had the to noted. balance more we're So more in But We've

XX opportunistic we allow So there we'll capacity and generate quarter somewhere -- we're of as post around organically. capital be generate to then going basis well. a points merger, And

you If to about got will fund basis that anticipate, we XX we've basis that XX current net. about okay, we points growth of points use have and the say,

potential growth think flexibility requisite to I on fund flexible, the we noted, gives side. us the that So be M&A, for that as you non-bank insurance anticipate; particularly the

all juncture. if priority so And particular add our is at not you repurchase that, probably top share this

Ken Usdin

Thanks that, for Bill. all

Bill Rogers

Sure. All right.

Operator

RBC. Gerard Cassidy with to We'll next go

Gerard Cassidy

morning, Good morning, Daryl. Bill. Good

Bill Rogers

morning. Good

Daryl Bible

Good morning.

Gerard Cassidy

you from you A a course, customers cautioned share Can remarks seems then very lot Bill, with monetary scene, of disconnect. and growth. macro But at and about your seeing very share to together about end some what the what's with deterioration. the put because strong concerned it, obviously comments credit very going investors such. a us you on can numbers with with be at very policy you're there quarter in are prepared good you've the of this of us, you quarter your put

the seeing, nor looking if in don't or there you're see the other something a XX indicators on there six months? macro is in horizon But or certainly do your are than crack are it, peers. your to maybe credit You early that will you see what be at guys

Bill Rogers

still mean, the in our lot of, question, our were good that a direction. of clients be South down the demand. Florida fact see see and bit -- you I by are I there's two a may of they markets good know, But demand. in continue and virtually going the clients sort Nashville Yeah. clouded last was blowing I every and going categories little to

see put and to have broadly I that look it's note at sponsor-backed a happening in so canaries cautious to. at to mine, to think because And what's think are the appropriate leverage what you deals. the of I at, coal the things if are things we in we don't speak, think look you just the a I are sort the we're while things like look syndicated deterioration, trying what

that So out we Things market, on. look loans seen construction bit a things of sort little happening We've pretty in CRE. spreads at some pause sort you gapped non-recourse of some significantly. and that

in those things seeing things that and stimulus. pay as some of they now, at that we're to. not relief comes results Some right are potential some and the our given FICO Care we're Act repay mortgage attention Now there, in stressing the looking we're Will but that all things happen drift are and off? willingness to trying to of

think I here our good manage to outcomes. the business and extremely for sitting all try That's should car, are and we're conservative. healthy. be pretty bankers, hood we our today, So good pretty of clients the the looks world just we at in demand so and looking we live looks But

Gerard Cassidy

No, that's beta, in Daryl, very than expected. follow-up, good. mentioned a better deposit then And as came the it Thank you. you

said in I brokered think points. without deposits, X you the came basis it around

share Can and the increases better-than-expected XX. assuming Fed goes drove this as faster up in the quickly? are second, Meaning could later were July because what another us, rates for modeling XX, guys then obviously could you think the the do year, modeling later And I against go with number? the in rate something actually work so closer you moving they you? further betas year to

Daryl Bible

Yes.

it was rate giving because of we what products lot Gerard, just our for was I with great with working would us to aren't teammates. reasons. bank of thought I those tell We're So a other appropriate. we really just that clients you Most and think They services. with clients like our work have and for there

So rate-sensitive places. other might clients be as in as they aren't other

continue in probably at cumulative if continues a a expect still I on will would because agree little a will we the get percentage second up, basis. I prepared fourth cumulative on of from climb give rates to say in may more it just from low XX% take would cumulative So I quarter that franchise. you though, to continue our beta and increasing. beta did quarter, the with to to that's see or points third think really second Fed the that raise be go to to XXs, more look the couple there. people And as benefit In do interest betas asset-sensitive. our of deposit interest Fed move if XX% more go We remarks, bit you rates the our you quarter to

you we back during a combined to overall our banks Recession, better the were Great if much were where had what back performance So overall, few go of we than then.

because feel I going think we now, think you're I positive see I So growth that. really to think right good. that our very of in income net And interest

Gerard Cassidy

Thank you, Appreciate gentlemen. it.

Operator

next to O'Connor go with We'll Bank. Deutsche Matt

Matt O'Connor

Good about by it. kind up think expenses, interest coming and of without higher, guide the did the on morning. merger. guide. X% the kind to area just what's I PPNR on to up bit since with on of expenses of driving Obviously, company merger-related expenses since expenses the And focus, tweak a roughly in overall, especially kind net follow just want to will not control I fees have of an want of to year be I follow expense the up you the are the confidence this the income have think, been but is little for just or lot And year? tends follow-up next related a lot the fees costs that merger of we weaker the can other as and a done this benefit of then that

Bill Rogers

No this I expenses, the Matt, can Yes. that. on off ball you Bill. is assure eye

story expenses, expenses, still for all this So, think positive our and of and through big the the be I forward. manage that and ratio. there leverage going create expense deliver capability year understand part part continued merger are big a improvements we've efficiency competencies for our the built to operating a will And of to years industry-leading

we're same So, of, side, our terms of achieve additional opportunities. how business. this we some coming on we've no the think about, particularly quarter-to-quarter. They And But opportunities those to they things this And into of side. don't on in just opportunities. we those have expense the And investing like going talked first lack quarter we're of underway would want in focus don't to lots line -- the up miss we from quarter, we've up seen momentum I line well. those –

we investments. investments wage. made have minimum banking, at revenue the improve talent in those pretty our and on for understanding good a for the wealth, formula we've paybacks potential, teammates care Also, client long-term a centers, been the in pretty we've this mean, I investments And of that. confidence good have have improved insurance, investment example, We and as experience. in the an

was So up. that that's clear step -- a

lead. think fairness, us This time others need to just most. position. in that felt we But that a in be same when I as was teammates will us those mentioned for it like, overtime I earlier, is important

it key of acquisition retention term talent. will and in help really think of I long us terms

increase they and bump-up up. the And should They're and feel longer-term it think just also that's immediate than then operating higher year-end little quarter I an up losses in really and is and about. trickier are So, has specific a one the they we payback, be. which just more good a

I normalize client investments we're of I'm that's a part. be the the that think and about positive and increase expenses. We we'll But things some in We in of expense only experience place the made do those they'll increased long overtime part that. term some losses. non-investment related part to I making normalizing say more those of the the to lot that operating given that side think I the confident decisions is that that would have But in

Matt O'Connor

conversion any are be you. related the those that can of Maybe blunt? Thank two? operating from exactly you what give example losses? an and to And any to And is that, deal follow-up or

Bill Rogers

mean example are give we an of. decisions there made I client to experience. I'll you Yes. relative

the fraud giving the client is, the of the doubt On side benefit upfront.

as that is So, if client and over and get to will just what that client an just we're client funding that But back something, going doing example. increase. normalizes, ahead we're experience, time, an a one-time experience has that's the one example. and go That money from a And a bank again, another normalize now. good It's over we has think time.

Daryl Bible

of for expenses on asked also a go-forward containment You basis.

As and I think opportunities back usual, get estate there's portfolio. to we look business rationalize our real to as still in corporate

some as our our we just closure change continue branches time on branch network think to over clients. with I rationalize of behaviors as

with we midst before, and help both still from XX initiatives a over we've but well cost this about perspective, and the client us think those of the talked our XX as next have experience savings revenue as to lot that in up would the that months. came implementing teammates I we're of

the that to look office, over and runs savings. also platform once over over generating new both which, card a just generate are the next two. operates. us be and the how starting year And more you applications moving technology is, which perspective, want will gives we put projects up expenses or last a and cloud digitization From It to the two, rolling savings we're are that. We towards back operations, very all or intelligence contained artificial I at to some company part also mention out, our important would the are year front next we to combine comfort and thing that our time, both into some as

Matt O'Connor

you. Thank

Operator

next to Wells go We'll Mike Fargo Securities. Mayo with

Mike Mayo

hood car, gave the you're right? second like You going Bill, first accelerating. analogy the of you the gear, Well, the Hi. again. so end-of-period said looks up on looks the that's go -- X%, with I'll positive, And it Corvette it opening, to you me from like about talked loans are

beta. on deposit beating You're

quarter. XX all decommissioning higher. help. up is And have in Your of data still apps of this maybe to should the that NIM up, going it the basis points next centers be is range expect you so the NII and the year, you later

you speed for But But bit points year, if next to leverage this that PPNR lot your you're it [ph] guidance, of plus and fantastic. a second part for look So, I at be XX you're Yes, operating going year, seem bands. the aero doesn't guiding basis took faster. little then the a higher.

XXX, XXX points. some And peers are basis of XXX, your

points. quarter, think difference I last was XXX basis that

in a the quarter. not in were less little I your on you the the ball you're operating leverage hear a first than eye think taking So, bit way, And guiding off is what I expenses. you,

You're investing in wage. minimum

seems just power being still You some losses. fully Corvette of the have operating is realized. the still, like it But not

are and when where ago. you growth gave years the you not announced really power half engine the So, of of code that the ZIP in because a the of in merger efficiency initial the translating of to the the progression of is the you power you. the three power operating leverage your Thank figures ratio and

Bill Rogers

couple A things, Mike. Yes. of

look but growth just thing, going and it's to one indicator, and is a continue we to you not don't in But thing, acknowledgment at investing is that broad-based, -- we're capability of loan got corvette there's grind and the pace. expensive. we're to put the it's pipelines more of we're engine faster. I feel seeing so you whole I at operating doing, So, gas that And of want the to quarter. things many that the migration second of and least. an And if And things the got gear the know but least if company we're on are good just the in faster to your to gas indicators, really I long-term. in I the from the the but confident We it it. put how drive gears and think it's think Corvette always really at And -- don't one I at about gear. If seeing acknowledgment second we first the production has, that those second growth. it's I appreciate are the

with delivering efficiency the to was first XX rate from industry-leading at different mean, and where I guidance, relates that it don't am As growth. will than was different ratio -- pretty or I efficiency remember we we're environment. still are deliver environment I it's prospectively and will any industry-leading the in ratio be I in an rate that low now. know, confident but in XXs, that Whether any believe, interest it

tailwind grow So significantly and that if capability fourth the sensitive and capitalize I to could feel than quarter, on it's better tailwind. sitting it then of we're been come come we've the we good about those we've that. really And little get launching positioned in got year, market that ever come, And businesses next bit a are going good could opportunities. but to on pad to

Mike Mayo

it give other I going to can what qualitatively. my getting to, not is an answer, questions, you of I question I'm some but guess and perhaps know the get

when can some sort it. next if it, expect to if you which some leverage -- charges, all done in we and put around the you going XXXX, of operating these have one-off Looking merger down, At losses of qualitatively the you can want at are finally numbers out that and such when noisy numbers with year? love the what we'd items you have least are or these realized finally savings of answer operating you your financial finally as

Bill Rogers

what qualitatively, know Yes. going is the we rate be. don't to Qualitatively, to environment just it's got be

think, this efficient that with and will gaining positive. committed reflects seeing and that. and it growth angle qualitatively, be So towards it the that an you're quarter, supports I That's we're revenue similarly, the to. that of franchise again, model expense power But this

Mike Mayo

Thank you. right. All

Operator

to go Najarian We'll UBS. next Erika with

Erika Najarian

to on analogy. -- just the I follow-up corvette Hi. Yes.

industry downturn, in theory a is, a scenario, in companies about both of the but a question you can you crisis, be lot are this ahead the thinking in your think I about fairly buildup different well, you could in where relatively from what of none So right? mild last the well perspective. in think investors and of are would So banking charge-offs comfortable limit think right? much charge-offs is, You driving the for recession be ACL a guess did And produce? would how you do a build scenarios the the question roads that first Daryl, are I CECL maybe process, the as ACL more scenario, credit portfolio for us car getting have worse, the

Daryl Bible

would amounts, and say this. obviously, Erika, I'll that we that me when did scenarios can off remarks, there deteriorate. Clarke Hey, It's that case, on perspective. forward-looking set the you the lot. always is the finish to expect is provision would seeing as to continue can the allowance. start then it's In from some But potential us help to to scenario-based. over we there If back prepared that it aren't continue to our from that add whole our that And deterioration right we costs add perspective, perspective. but let a But that be that And me moves Clarke. up kick from to could now,

Clarke Starnes

the earlier, through just Bill this, mentioned I Erika, came refreshed of and scenarios. and say we all it Daryl would our quarter, Yes, as we

then, outlook, is scenario. recessionary, our pessimistic XX% on estimate, which And So a a have more our economy. XX% is we weight of more pessimistic a slower baseline, a

our like had and quarter. feel pretty this very credits. quarter, estimate we've we conservative loan good growth in So highly rated we been really And this also

rate. carry reserve those a So lower relative

this a didn't build see big why that's you So quarter.

in saw You our decline because the was That basis of allowance. points X growth.

some right recessionary risk So we've believe for accounted now. of we the

rate driver we scenarios get obviously, reserve main forward, would as to would be more and so, the then severe, growth. the of have our Unless And changing look the change. allowance

Erika Najarian

taking question. my Got you for it. Thank

Ankur Vyas

question. one for time got more we’ve Jennifer,

Operator

take Evercore ISI. We'll John Pancari last our from with question

John Pancari

morning. Good

about or business the of your any, the -- portfolio, if you're in Sheffield credit stress signs on particularly are can Thanks. can form. the seeing talk emerging on of the lower-end at some acceptance maybe you you the look business? where, that front, also Just If as just of the just non-prime you consumer, some about, the within on you cracks side talk regional seeing any

Beau Cummins

Look, mean, I we very are carefully. that monitoring

the we're late-stage I consumer, So We're translated incomes in it's delinquencies below. think cohorts -- what income delinquency and a delinquent think little higher of seeing bit higher areas. $XX,XXX early or not be low those into losses. to would probably moderate But seeing yet indication

So, our we example, in and of we're rates things quarter on even business, loss higher Manheim repo. of consumers this slightly subprime seeing had redemption our for lower rates auto because being one up, seasonally the

levels also our and looked consumer or the not they're any losses. yet particularly coming not at income down our rapidly, translated deposit borrowers above. and it's We've So into for moderate

deterioration. our So the any while there's watching, significant year signs early does rest the not assume any we're And for concerns. into it's right outlook now significant translated not of

John Pancari

Got it.

we think then that estate, quarter? do commercial next potential the should And just Is the there know about that for in there optimistic Okay. you I in Thanks. there, beginning there incremental you growth stabilization. happen How portfolio? bit declines or stabilization you the you indicated quarter think real seem will side, but on a separately on pressure did this growth some see loan more

Bill Rogers

I cycle stabilizing, internally strategically of We've we that would say a things the really is quarter-to-quarter, get the we really We've and we made I decisions really by CRE a into comfortable sure strong mode. a feel way type portfolio lot more to it. create about really, but Yes. way, think it's the that want. around good want, portfolio. through we're I'm done growth the alignment the diversity of it, And of

of quarters, bent time. growth couple the next the -- in for somewhere with over probably So stabilizing

John Pancari

it. right. Bill. Thanks, Got All

Ankur Vyas

thanks, Thanks, call. John, our everybody. completes That and earnings

team. feel you have your reach hope a Jennifer, Truist. can the free you Thank disconnect additional for the you have great any IR questions, to We interest call. in you now day. If to please out

Operator

thank We conference. conclude This you. does your Thank for today's you participation.

Truist Financial (TFC) 19 Jul 222022 Q2 Earnings call transcript