Earnings call transcript Q4 2022

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Operator

Greetings, ladies and gentlemen and welcome to the Truist Financial Corporation’s Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this event is being recorded. It is now my pleasure to introduce your host, Mr. Ankur Vyas, Head of Investor Relations, Truist Financial Corporation. Please go ahead, sir.

Ankur Vyas

good and Jess you, morning everyone. Thank Truist’s to fourth quarter call. earnings XXXX Welcome us and Maguire. CFO, Chairman are Bill With our our CEO, today Rogers, and Mike

this Clarke Truist’s purpose, quarter business Truist’s conditions perspectives will outlook call, Vice current our and for our XXXX. on of share their our During fourth activation continued and morning’s Starnes, they results discuss available the are our Howard, our John portion and Chair also attendance call. Chair; in Vice Chief in Risk Officer; and to and our of are Insurance Q&A Beau Officer, participate Cummins, Chief

as The as Investor earnings presentation financial accompanying supplemental ir.truist.com. information website, available well Truist our the release on and are Relations

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

The our archived website. accuracy addition, transcripts provided not guarantee In is Truist third-parties. the authorized and does nor on earnings our teleconference are edit located only not live of responsible by webcast and

that, over it to me let now Bill. With turn

Bill Rogers

for costs. Happy operating integration final the our Good commitment set finish deliver Year. and Ankur. leverage year. PPNR pivotal to and our incurred year. of and strong a for our full of Adjusted positive New Truist sequentially, us a our activities on everybody ahead merger-related the XX% morning, joining a Thank you grew strong completed We purposeful guidance helped and call today. decommissioning Thanks, final for and delivered

company purpose, better details inspiring company is will and lives the the dedicated Truist building to of quarter’s presentation our and a we Slide X. We throughout with on results communities. the on purpose-driven will our the and foundation start cover

business for foundation company success everyday. how the do we that drives is a performance and defines purpose as Our our

many highlights purpose examples XXXX. activated our we of in X how Slide

eliminate and access the new to and major launch technology. clients inclusion includes along that secure and experiences our from We provide are with These encouraged For measurement and suite journey have accounts milestone Banking, they differentiated greater received that One our existing distinctive, fees our successful a everyday achieved clients, advance reception product is banking financial we communities of our Truist through accounts touch very and positive two and that by provide in new the credit. alike. overdraft to meaningfully reimagines

our on deposit our clients branch checking increased suite XX% Based branches. reflects One $XXX, period base One, our a reserve having we fewer includes in Truist XXX data, from line despite year and December cash August through up launched credit this commitment achieved The Truist new which communities. and result to expands to ago around also now production mid-December and which

touch together ability and to teams reimagine which banking new to innovate experiences center, technology for was of greatly intersection and and tech technology at Our opening innovation the clients with our the by cross-functional our brings large enhanced of everyone. companies

journey rooms. the were realized We have and of client our the all the and benefits capabilities investment co-created with already client throughout launched as One digital new Banking and Truist year ITC hybrid clients the

X October, wage improved turnover minimum a to experienced mission to have our took effect, client to an execution by also teammate In better our we In bold better continued months and lower the We our raising $XX deliver recruitment, lives teammates. the hour. experience. on an all-around for our improve took expenses, step since teammates of this we retention,

of interest with to rewards align those our stock our our We to include program also enhanced purchase total shareholders. teammates’ an employee further program

for senior leadership further early roles champions increase aspirations As equity representation a company our that year with and inclusion, ethnically diverse progress. we to diversity, achieved goal a in

billion community significant by and exceeding meeting serve on in our we plan. a some made categories, impact has communities $XX Truist Finally, the benefits

that one to lending. served better and plans affordable and Our has purpose and plan our first a material the this lives a of The is framework communities community by minority through income business as non-profit, was for of housing, across support communities testament small execution similar for low moderate commitment and and building industry. Truist inspirational elevating development

summary, In just on and of the delivering are we have what teammates accomplished our our significance is purpose outstanding.

technology continue communities will relationship work. actualize clients year even to and Truist investment better through to We advance as place and impact continued the bar integrated forward raise I an touch and positively we purpose, in ahead management, the look and to make our

related included Slide to and the turning items $XXX final MOE. selected charges to X, the our for million pre-tax Now quarter totaled

are Now and This integration execution will our is enhance for narrative, capital exit a shareholders our generation. and development positive forward. costs our underscores will MOE pivot quality to simplify complete, activities our that earnings run-rate improve going that

partially or Turning $X.XX share, fourth as or totaled was billion share X. points quarter on very by higher Slide to expense. quarter was highlights PPNR earnings per delivered strong XX% AOCI, data strong was excluding strong. sequentially offset a our ROTCE even billion $X.XX fourth X% Both performance of and $X.X per reported basis. earnings growth Truist up Adjusted $X.X Adjusted are XX%. on provision

increase of impacts as resulted income Adjusted $X expenses X% PPNR relative drove to resulted and higher well-controlled Fee year. quarter results benefit the This strong fourth the XXX performance the from costs. of adjusted to of as income primarily partially points basis XXXX, guidance. higher in due minimum also a Truist, grew leverage by billion, strongest and interest mall efforts. X%, loan targeted our leverage of growth seasonality expected significant operating of a mostly saving the our insurance and of quarter some leg for and investment Net were full margin in investments final these deposit results of our short-term cost exceeding to increased wage, sequentially, high operating new supported rebounded expansion rates offset acquisitions banking. adjusted XX% by for Together, factors

performance quarterly our at best XX.X%, Truist was ratio thus efficiency far. adjusted Our

slower increase quality expense reflects strong the Asset moderately assumptions. sequential and remains primarily economic in provision

basis deployed result a of loan We acquisition. organic of points and XX growth BankDirect as the capital also strong

remain Our a capital risk withstand position in relative range and ability profile scenarios. in confident we our to profitability economic to of outperform remains strong our and and

full our more stable EPS provision offset PPNR adjusted on in was the than expense. as lower Slide and XX% year-over-year costs the more to loss was by by significantly billion higher solid year X. Adjusted were loan $X.X EPS relatively provision X.X% Turning levels. merger-related normal a highlights increase GAAP year-over-year, declined growth, offset

a we points in year we and we of GAAP operating hold first ourselves however, basis our firm to metric basis XX points the we was establishes This as leverage Importantly, was and for can leverage into from it of XXX operating accelerate which delivered full head primary which year, to XXXX. Truist as foundation, accountable XXXX. a of adjusted which

digital Turning experienced to as particular, increasing steadily through in overall capabilities. in transaction XX, mix strong XX% of since engagement year. growth the transaction and volume of a Truist. Slide our increased and as importance continuing highlights the represent and digital the XXXX Zelle, movement result improved money continues an invest beginning as percentage agility client in of We Zelle to of rose changing our transactions preferences to

from platform improved And in as XXXX app built since and in at mobile experiences. which in stars X.X activate capabilities iOS some up as our XXXX retention one on production Xx capabilities solutions our across new of tremendously many we result, the we to XXXX. to Our cost. releases a Truist the many was agility average have One expanded on year have In and as highlighted capabilities, did fully We Assist with client those and wealth year Android digital a better are goal digital clients ago. resulting in delivered materially to in right retail, and digital of our responsiveness the end, improve rated of from cloud, more and migrated acquisition, business and slide. an clients We at side reduce Banking, Truist to introduced XXXX, is investment

a enhanced decisioning enhance lending addition decommissioned team underwriting credit In for pilot core, certain data program. center completed to upgraded clients, bank consumer our cloud-based new merger WiFi deposit product the successfully completed piloted and largest our XX and network capabilities branch successfully our real-time in next-gen and across and digital centers, years, XG a three digital technology a contact technology stack on platforms and

have needs during client a future. and keeping team tested have digital great to agility also their the integration while technology they battle and been period have and We the responding demonstrated in on eyes incredible

loans increased and of industry which experienced and balances sequentially, across strong in the on industry to to for clients due X.X%, well BankDirect from grew balances competitiveness product growth our as CCB. increased billion improved our shift acquisition. $X.X came as BankDirect, greater loan have recent and average loan $XX.X XX% broader X.X% Turning quarters capabilities Truist’s The or most leases billion size reflects execution a groups or we approximately Slide overall X.X% and and trends. C&I and excluding CIB verticals increased as to XX,

in combination position activity Finance with growth spending, industry to with growth to chain liquidity inflation such that uptiering trends across acquisition and talent, more product be balance continue due client delivered strong our as a sheet. verticals choppy capital most existing growth of within recent and Asset as As capabilities business Group our management, Macro continues quarters, to build we supply infrastructure larger business-as-usual supporting markets are here. also management. new and CIB acquisition, clients,

focus the reflecting on our correspondent prepayments. markets Residential C&I production mortgage $X Bank or lower balances and our balances Community strength channel billion execution. due Commercial X% and team’s X.X%, increased of to previous sequentially grew

Service worth the student Finance, in pivot to the the decreased return time $X we away the primarily Excluding mortgage, high as grow runoff loans, year prime as such consumer consumer time, return At to in auto. expectations our of such Finance finance decision and same as portfolio with from at invest and our card an continue of continues basis, over billion as LightStream reflecting businesses, well end-of-period Sheffield. lower to ended on ahead portfolios balances and Service of continued acquisition. higher loan

Going rates, clients forward, high inflation and the loan growth the from slowing will higher to levels of robust XXXX as in impact economy. a respond moderate

continue also to capability, well teammates across broad mortgage our given increased economic In range auto growth expect we on post-integration. capital our residential prime to return capacity talented Truist of addition, as scenarios and we positioned higher remains a slow focus in clients to opportunities. and advise

of value strategy rate Average tighter Now and policy, of attentive on while reflecting and turning sequentially our outside strength effects and monetary deposit continue inflation as X.X% rate paid. higher balances to the remained to of needs maximizing franchise alternatives to well on costs relationships be balances. XX. Deposit Slide our to weigh controlled, deposits decreased deposit client

quarter, far. a increased deposit of beta points, interest-bearing fourth basis thus the interest-bearing XX deposit contributing cumulative to costs During XX%,

access broad balanced funding. to alternative will deposit evolves, growth rate take we and rate maintaining giving to the continue managing environment interest As a our of and forms approach paid to

Our growth. relationships and continued and key maximize and rollout payments will acquire going of of investments deepen ongoing One forward and be look high-quality existing areas deposit as in we treasury new Truist focus to

Now let turn that, Mike. over with me it to

Mike Maguire

Great. Slide Thank am and I going Bill good morning everyone. XX. to begin on you,

strong rate approach margin basis basis points alongside taxable to to very balanced having and our and short-term deposit due improved Reported and controlled billion, a reflect growth. ongoing Overall, costs. For higher downside to well-controlled rates maintaining the XX expected when deposit managing a interest net some if Purchase result interest as franchise. rates margin while to gradually were of maintain and is loan costs decline. rates X% rose equivalent short-term accounting XX million $XX we interest to protection to interest strong the accretion interest interest core begin of well $X expansion quarter, continue modest a income upside interest higher margin primarily increased net Deposit net risk, and points diminish. decreased to strength

new seasonality Looking during to income increasing the business of income largely driven results. Insurance banking firm grew as $XX seasonality full lending-related The a well BenefitMall largely million, X% revenue Organic as to insurance quarter quarter, X% Slide full acquisition million was and and a the or and and for investment strong the improvement pricing fee sequentially. fee BenefitMall retention. income. higher XX, by year and increased rebounded environment, due $XXX attributable to

results and Investment quarter higher million from impacts income increased offset partially fees trading banking trading investment $XX as the core CVA/DVA. by strong banking were in and negative

and the XX%, favorably continues as believe and other banking full builds. overall year, grow Strategic fee lines over earn also past income to CIB investment within we CIB of performance improved declined the which the industry to compares partnership standards. lead momentum between business X table has years to led For hiring

also as such million to $XXX XQ primarily host by introduction in million new fees approximately $XXX of growth Truist insurance. ago, ‘XX in market-sensitive Fee year a fees from and by businesses as approximately to actions ‘XX income a to the declined eliminate declines offset and the in banking, wealth Overdraft year took to continued partially investment in a X% mortgage driven One declined overdraft-related compared Banking organic XQ inorganic and last existing of we result clients. of and

year move XXXX. We expect overdraft another end decline XX% end fees from year to as to we XXXX

IRM remains its fee we investments optimistic such markets investment below potential, While to are continues our key banking payoff execution progress. normalize that and insurance, areas will income as and our wealth in as

restructuring XXXX. to charges our and to in million solid rose planned reductions increased restructuring October the and financial Merger were costs expense quarter due decisions by X% to will million XX, branch Slide sequentially. MOE that Turning business-as-usual $XXX These returns. guide $XX non-interest facility reported and related exceeded or have and occur higher-than-expected million $XX to linked unrelated

we Bill difficult efforts. It restructuring have to but is anticipate normal activity would costs these MOE anticipate approximately forecast forward. $XXX will or related prior incremental million $XXX to rationalization expenses indicated, acquisition XXXX. million charges As we and other more for We accuracy, with restructuring expense no BAU related the to to going operating would

Adjusted to non-qualified our due million increased the of non-interest X% $XX effects plan. primarily expense or

was have by a by in with the in investments decreased which recent technology, half $XX October. million operational X.X% partially the These decline $XX million marketing from half $XX expense lower changes fraud-related rose associated and outlook in consecutive and changes of were which plan, of have Excluding our the recent decrease a offset our consistent in mitigate as adjusted driven losses, sequentially, expense. process in to increased which talent, wage. our two for other expense in expense with plan non-qualified from minimum increase expense The and million, reduction was was other costs. non-qualified increases begun fairly quarters, Personnel from

Compared of in increase to fourth merger to as businesses, and the by adjusted minimum post investments acquisitions, a wage, center normalizing call XXXX, the support and T&E higher X% staffing of our quarter expense clients non-interest spend. revenue-generating a result in technology grew

save billion, $X.X For the of in the target. strong, full billion net from year, modestly $XX.X adjusted expenses baseline $XX.X is reflecting were This XXXX. the up performance billion achievement the cost

in from to technology expense also operating continue line, and ongoing tax areas Overall, Below and on for to reductions results to effective annual in primarily certain due focus we rate generating the state leverage. income XX.X%, true-ups generate in our fund investments quarter the third down tax returns. longer-term quarter, XX.X% talent to fourth reflected an of

to XX. Moving Slide

quality at outlook by X.XX% loan acquisition. high organic $XXX the indirect due million, slower increased reflecting and X lower increased offset is in ratio the moderately basis prudent effects Asset to of culture risk a points strong to seasonality loan quality economic basis was reflecting our diverse strong, loan stable Net charge-offs largely points and ALLL XX BankDirect allowance as were The auto growth and portfolio. recoveries. the and growth

Excluding low the have ALLL the extremely ratio losses BankDirect basis increased would which approximately has through cycles, points. X portfolio,

XX. Slide to Continuing

X.X% Our capital CETX ratio organic decreased and the X.X% BankDirect support to we acquisition. growth to as from strong close loan deployed

We profitability to strong share. Overall, position also and remains profile. $X.XX our risk dividend a continue to relative our at strong per capital pay

XXXX of will all due costs growth, opportunities additional to in more generation MOE-related provide focused for loan and improve We expect which and capital organic to the Truist. flexibility elimination of

funding access remains to sources. Finally, with liquidity an and of our strong LCR XXX% average position multiple

flow to quality of securities loan $X continues at approximately cash supported government produce which our guaranteed quarter, per high growth. has billion portfolio XX% Our remains and

guidance XXXX. full where quarter XX year Slide I’ll and first provide Turning for the to

XQ Looking expense as and cost payments expenses and with X% other to patterns are by XXXX, driven relative ‘XX, addition higher revenues and net are discipline. to days X% card expect decline fewer personnel expenses interest along service impacting X to amongst into higher XQ partially pension to offset we typical in charges, to investment banking, to in primarily X% X% increase Adjusted factors. by FDIC seasonal income seasonally ongoing premiums, anticipated

XXXX, anticipated net modestly largely as revenues the growth For year X%, FDIC income improving interest Adjusted higher X% full full expenses to expense, wage X% increase closed that and to and to driven result increase X% of acquisitions XXXX. strong a impact about are X% to by increase annual we of pension four fees. higher These of minimum increase. the premiums, year-over-year our our throughout factors drive expect

leverage XXXX. adjusted to more basis are our we points targeting factors, in pace or XXX these than operating greater, be would which Xx Given be

XXXX, continued and net basis the be in portfolio. given expect the also charge-off XX ratio loan for to our XX between across points expectations normalization We

discrete which a approximately translates items, we excluding basis. be effective if to rate XX% you expect tax will equivalent on Lastly, our approximately taxable it model XX%,

final back Bill it hand I’ll for Now remarks. to some

Bill Rogers

Thanks palpable Loan Great. it’s a to at strategic from year Continuing can both dimensions. XX, was across financial categories. strongest Truist. near intentional we’ve was turning deposit Slide been and operating it production production The it’s real, pivot consumer quarter fourth on is to integrating at finish is for the despite of Mike. that fourth evidenced be Commercial Bank quarter reductions Truist. the was quarter and Truist. point the number the and was a a highest had fourth in loan year the certain full and in in Community This some strong

relationships in and advisory were our lead with reflecting within XXXX, relevance XX% strategic up left capabilities Importantly, CCB clients. increased

XX% quarter and to as also unit more processes the improved but became year-ago production quarter capabilities. solutions compared in fourth Branch confident and teammates and systems, with and checking increased the deposit X%, respectively,

improved quarters organic relationship advisers, management the consecutive adding three to be of across and line net gained has activity continue flows Integrated wealth company momentum asset to had of Our positive. business more new a we with as activity, ended as of mortgage year and reporting relative focus, a in increase alignment XXXX. the qualified referral increased the XX% result year excluding throughout

Average ascending and highest for digital client and small areas our banking in business and retail retail reached are branches, in experiences include that their levels of for satisfaction business. key scores fourth year the quarter centers, call small the

ratings one quarter. strongest The adjusted building the momentum the peer the being each the be fourth our group financial with Our quarter seen near digital of benefits of after leaders bottom. as can and app year ended leverage this the the year operating of starting PPNR in

fourth and optimistic So to our to our thesis. our our highly to right quarter on I’m reaffirm summarize path, post-integration about investment ability Truist Slide realize the XX, is conclude on that results significant potential

Our our very goal and purpose, profitability financially will to to are with year and and so integration less opportunities, be as continuing digitize profile. actualize maintaining harvesting operations priorities our peers. execution strong has our produced and clear: and full to and growth our strong XXXX first our and automate zero processes volatility Truist with do Truist activity, IRM Core a than profitability

We on return on our will bar just that potential, not focusing targets executive the our drive ourselves, also and business reflects raise the KPIs shareholder ensuring mix. total compensation

uncertainty of most profile and range approach interest across excellence strength our Truist outcomes to rate because to momentum strong capital of shift strong performance management, conservative and purposeful a position broad significant While integration credit executional diverse to is we continue growth. our economic in mix, profitability as risk-adjusted balanced a from high, and remains of notably, position business culture, risk our

over to you Q&A. the it turn back begin me let and Ankur,

Ankur Vyas

listeners participate at [Operator Q&A the can Bill. Thanks, explain this in you Jess, Instructions] would session. how our time, if

Operator

Wells Thank Mayo you. Our with Securities. [Operator comes question from Instructions] first Mike Fargo

line open. ahead. go Please Your is

Mike Mayo

hear you Can Hi. me?

Bill Rogers

you. got we Yes,

Mike Mayo

Great. Okay.

the maybe for you’re Corvette Corvette a but first as twice from guiding to going for go it So growth. or second guiding gear to analogy. push second – third, or like to much of I’m like you’re your revenue looks franchise It looks

leverage. I be from You’re market NII to and to quarter-over-quarter guiding have get given have and be are able more operating X% for to fourth capital deposits, the if going pressures that headcount’s Xx headwinds. But you quarter, up unsure others in you going you’re your

they along with you benefit of your confidence So some you still three I internal given payout all do disconnected merger centers. XXXX I your with that, are know saves, the And pressures the data question guess in now? degree some quarter? the expenses? is, get and of first what’s effect Or this Thanks. the you that guidance in

Bill Rogers

they start Yes. all are Yes, one the Yes, done. last Mike, me let with first.

uncertainty. So And having adjustments we’re with those in not the as year confidence talk lot every there entering our aspect – it about. quarter of guidance, is relates market the excuse positive me, to then a of to sort of

So lot we be are – mean I the know there about I I to but fourth. could second or momentum. don’t to things of Corvette has, have grind our accept doing, any change own we what clients We or we but inflation, that. that. internal how a going is – your mean, of a gears talked analogy first, to know through third continue

our some own that that And we the have we’re creating. saw of you So in numbers. momentum production

in that deposit the see you some betas. think of I

got our You company businesses. fee got We’ve see outperform It liability think, as banking commercial our the that of in momentum I these of terms relationships developing of both our ability insurance the performance market-driven. business. our great and asset stability isn’t some with to, mean of within the great also in businesses. as we’re business. core in are a I that well just investment We’ve

our capabilities and our So we’re prowess. expanding

can call the we and And So accept the may tailwinds tailwind. enough Truist when some can of know the offset increased facing. our I those those those, That’s tailwinds. I we of while sort Mike, our headwinds and is own we capacity. headwinds understand increased of in that’s there performance, feel have confidence just are be me that guidance our we what enough the to it, gives offset that

Mike Mayo

Mike. and you And is you, then a maybe insurance, follow-up, for this Bill good mentioned

comparable of operation Xx insurance the at trade like Truist. have valuation You where peers an publicly

So you All business. more? move tracks a some involving about would might your never is unrealized consider of that value like How that? think from about part do monetizing benefit forever of no present and comment this this you press, so just Or shareholders guys. lot that did firm value you of that you

Bill Rogers

mean, got comment I And I I think, speculation, to respect fact but Yes, that the that insurance respect really we’ve can one, insurance you’ve business market on I But or time. the I specific in to that. I we think the long as it on comment been question, relates rumors the business. for like Mike, just can’t a

XXXth its celebrated anniversary. year Just

was been of supporting We’ve cool. acquisitions. insurance that sort from the business So

So they have for we’re business want think, but able to that organic both, been the make right always to grow support from basis, also inorganic valuable it’s and consolidating We I providing contribution level be and continue of very to a our to business. sure continue really grow competitively insurance shareholders. for that to

Mike Mayo

you. Thank Alright.

Operator

We to go Jefferies. next will with Ken Usdin

Your line is open.

Ken Usdin

Thanks. morning. Good

for Just year, in what us versus inside And between NII wondering breakdown speaking, detail fees? a you your NII forecast? what if revenue you guide rate are curve can – are generally little growth expecting your using just you provide the for

Mike Maguire

Ken, Mike. that question on one. I’ll starting take it’s rate I curve. with the guess the last

probably a rate in piece our quarter, two a and strong February components. two of doesn’t the XXXX. would until in perspective, I’d that see is revenue year really perspective. we year, an XX policy NII cut, first we the had Our the impact hikes rate and the obviously much outlook think From a which have the expect we in on growth stable about it see into NII at for of an way Breaking obviously, will end March is where November,

also very particular, nice in margin half, had The expansion. second

of NII sensitivity bit believe have We little left. really asset a velocity from perspective. we have nice we a So exit an

the QX of for the So a believe combined, a I then we the modest growth will of have, potential the will two those a NIMs Bill we the of give couple that the guide. revenue factors pressure stay growth. we of do that the to given just loan some we frankly, think, the puts And year, and and the for first growth. basis, slowing quarter think, takes. that a growth. From year-over-year be, majority a some stable have amount hikes fee of the very on But upside as loan stable, expect rest in will opportunity a we we And would mentioned, On average we will the growth perspective, drive nice some in us relatively of realize outlook few by NII. loan think we offset

benefit continue basis realizing full business, XXXX. that to expect of which the in performance the to as We as is on we growing organic nicely good completed have from well acquisitions insurance an the

will believe, benefit have investment from business, first half. potential there likely the Our than on business banking the little the then probably of we pressure the would think in in well on be pressure. on second to market half to charges some We mortgage fees as expect a deposits. conditions, overdraft has improvements bit I the as residential we more service And and

Ken Usdin

Okay. beta XX% then follow-up on Great. And a deposits, cumulative quarter. interest-bearing deposit through the fourth

idea an last the the on cumulative terms you. mid-XXs think any time. us endpoint? yet at of this that direction you think You given this the could in Thank don’t of you’ve in the cycle, what guys be were views I and point

Mike Maguire

very as some far. on of that a our take one so obviously performed consistent have We I’ll betas Ken. have expectations basis. are acceleration pursuing seeing how been Yes, pleased I’ve again. the They outperformed the on Look, to pretty hitting even rate well, by seeing time territory the perhaps many we the hike. XX% we’re uncharted approaching by will balances think and and XXs, last in get behaviors high respects. pressures last We through cycle, even

Bill Rogers

only The deposit the franchise. our Bill. I’d add of it’s again, is strength And just thing

we experiencing Truist. would we beta performance. said you we’re as deposit about I relative experience what really our But So hope asked

We’re share, capability product Truist some a great sitting in got We’ve introduced in One. markets. new We’ve our average XX% great competitors’ banks. mainly large

Our up. branch production’s

ability the ubiquity Our presence, the great really be effective. and teammates marketing are of doing job, a amortize to your more

create just overall we to what Truist. our at we of manifest is itself could of strength create show So itself and franchise and deposit starting our thought

Ken Usdin

guys. you, Thank Okay.

Operator

Deutsche next Matt question Our Bank. O’Connor comes with from

is Please line Your go open. ahead.

Matt O’Connor

capital morning. us targets, what you about your capital talk priorities Good please? Can and remind your near-term

Bill Rogers

Matt, Yes. priorities the of in the terms priorities. top remain four same our

that. our do good a to in continue is and the the to asset first opportunities in mean in we’ve to growth seen invest feel growth, And opportunity that. I our RWA and The about business. we lot really business to you’ve seen of invest

our to dividend our base. important secure to That’s The our have both retail is – and second a growing shareholders. institutional and

side to So and opportunities. insurance that that’s have opportunities, our we’ve been seen the in And nature, M&A seen then is those we’ve operating fourth done is and a to big you’ve – been a really capability because third a but some where we’ve by as share side then in for also been And the as businesses three critical. on the say added They sort side have that the And first we mostly technology it the we’ve opportunities repurchase. been is some mean, active. but business, some smaller inorganic enhance those right of of just priority lot – careful like relates priorities. in the we’ve to And I target, we areas. we’re been And now. – hasn’t talent us,

our accrete. we Mike from think a risk our We profile, the capital given to really perspective. in risk we comments, we So in adjusted strong as do. we’re given But noted we do also, profile, a capacity have stress need we got things the his think think position to

sort also earnings If accrete but capital. of you our unique to think the that profile, expenses fact are we a come MOE off, about in our position

So, we capital. of worth points XX will accrete basis about

three talked about. those We first using we two, that priorities of some have that been for

capital capital but to increase, comfortable balance, So, we we businesses. are support probably have and we strategies our I execute will our enough that got think see on

Matt O’Connor

kind tapped say into don’t Okay. going lottery if two by it? billion, dividend The and do you won organic And to are do with what M&A the last then hypothetically, think growth. of is capital? would you you with I the the $X buckets that would regulation, And for buybacks. roughly, of you change billion, what that so if $X walk you

Bill Rogers

I don’t ticket are not answer because question buyers. strategy. hypothetical want our part to we of lottery That’s not lottery a

we to to support think businesses our businesses really to provide got have all are I And can supporting are our we strategies the capital of that capabilities going based grow. we on, long-term. their and that’s all and can we we need of our use ensure they growth. And

Matt O’Connor

Okay. Thank you.

Bill Rogers

Thanks Matt.

Operator

at comes McDonald question from Research. next Our Autonomous John

line open. go Please is Your ahead.

John McDonald

give I morning. gave for unfolding on you you for what that charge-off you how was us Hi. see Truist Good this have if this into guidance year? and year some baked color wondering Yes. you could credit the

Bill Rogers

take you Yes. Clarke, that? will

Clarke Starnes

John, this I Clarke. that take will one. is

As a wholesale we primarily little basis XX you QX. mentioned, had segments in lower – we recoveries normalization. in consumer in seasonality bit and losses points saw, normal seasonality That our as Mike areas. our in And had reflected of

segments QX industry And And couple then we just of are remind So, was the that’s over has also that the losses normalizing. the seeing QX. wholesale are had years. is what all to the to whole you and consumer last delta from what anemic CRE

to pretty that. are we similar So,

of guidance So to in reflected range long-term basis you XX as through loss XX it would bps. just XX the our see economy expect of how go why And the we depends of range losses therefore, points that’s bps our to that we towards upon return XX ‘XX, lower to points performs. basis and

John McDonald

kind Thanks Mike, outlook Okay. last that how the investments? adjusted through expense core of for how is mid-single pulling added Thanks. and growth much end year? for kind acquisitions and Mike. of much of growth, of then is expense And of you that digits, at on the Clarke expense

Mike Maguire

I $XXX-or-so M&A Sure. the believe In impact annualized ‘XX, is million.

of X% growth. about that’s So, that

four were we have not and the are minimum the quite M&A about recall in about talked of FDIC these that that aggregate – flexibility, X%. the and wage much frankly, of the helps. impact, a in You where bit and the that’s impact pension, into Hope components And those we components visibility the annualized expense. guide,

John McDonald

great. Okay. Got That’s Thank Yes. you. it.

Operator

Our Poonawala Bank next at comes from question America. of Ebrahim

go open. is line ahead. Please Your

Ebrahim Poonawala

morning. Good

Bill Rogers

morning. Good

Ebrahim Poonawala

to on acquisitions front the you of as giving makes up moving stream? a about capital insurance allocation between I just do if obviously follow-up, is there One, speculation hear revenue at you the capital think very mean terms the to multiple love And buying sense the maybe opposed of away think lot in would it business. companies trading deploying given that – given PE, on I on more would one guess investors question. other business, just insurance insurance back talk to, around still hand, from a defensible I talk you do stock? Like but XXx the can Bill, when how to to difference you

Bill Rogers

other from again, on Ebrahim, say, grow. to to insurance am a we comment standpoint, I insurance business love Yes. want the where than we speculative not going sort of to business. the are We

at XXX am I probably done, have John, staring We acquisitions over time.

we So, But business. comments, good really in consolidated in got framework as I a have a assisting earlier business my that it grow. to is mentioned

flexibility their make businesses got capital to have sure all and all create support capability and of to the we want and our that we growth. So,

Ebrahim Poonawala

call deals what integration guess heard the Remind I forward on cost like about scale the a benefits set? go so Truist of can the should the terms bigger And terms on done, far franchise in and it. remind we side, your merger basis market from have the you. revenue us a just lending of outperform go-forward think revenue picking back just synergies Just behind is side? in the we as some step the Got or on taking size asset on why with we the of fee not you up within expect the the us within peers

Bill Rogers

And Yes. was them deposit about minute the Great a question. ago one I just franchise. of talked

and have and and the that the prowess ubiquity, think we our distinct So, size, in the the advantage see I and is a you markets, that. scale,

that in. component of other The markets we the that are is

in So, places. not only is at it scale, the but right scale

growth. to environment where have will with any beta economic think markets have So, out-migration higher the lot I and so, the business we development markets beta a and versus we and downside, sort in-migration in lower of upside to sustain a of that

one that’s So, component.

them we where I in those about increase community spot we to capital of the leads you left we the I mean economics that clients, all talked That side, the in and right having there, an scale. before, in and our weren’t economics have to And comes spot. relevant that that. to comes lead seen the versus mentioned prowess have spectrum. That be discussions ability bank, from and the more lead be markets things. type know left to strategic of are that from to have that XX% You with are more the be multiples

relevance scale, to capabilities. related our and product only but our related our to is So, not also

And XX% to sort math, create to least we say had versus that that I with I more put tried everything banking mean the a base opportunity growth with number the operations would left of economics of scale-oriented, taking could are efficiency. operate do to have investment taking on being do but of And more not business, then so, just outsized attribute more we it’s that sort come kind all the that positions, right our positions again, we the at We to and of We have efficiency, along some to of that. the that. the everything on back-of-the-envelope and seen with in from.

with and merger. previously providers dollars partners have So, million when of millions to bigger it had we it of The bigger a we and in do our of contracts something that base and negotiate a across that tens impact. of has you capability. ability doing our lot can because $XX and of the impact better million a saw $XX are Today,

reflect because it’s it’s in long great am them, what Our be that think probably get a list a to terms we about. I better I one and else in to more and ability important we forgetting to Mike, more more ought mean relevant that that. go question list, and talk

Mike Maguire

Yes.

more more relevant been size. moving I relevant capabilities, it’s on think on

be expenses. ability in results, it manage the it seeing are to You would the whether

Bill Rogers

The markets, deals. our pricing financial on debt

Mike Maguire

right. exactly Yes,

Bill Rogers

list is the pretty So, long.

Ebrahim Poonawala

you. Thank Alright.

Operator

comes question Scouten Stephen next at Stanley. Our Piper from

go line Please is open. Your ahead.

Ankur Vyas

you we get are there. to Stephen Maybe, the go if can Stephen, next See Jess, back in after. person.

Operator

Absolutely.

that. do will We

Cassidy go to Gerard with will We back RBC.

open. is go line Please ahead. Your

Gerard Cassidy

guidance leverage the about you Good level us, being, I morning think in third Can higher to operating have Mike, you. operating in But are good the what with Bill achieved XXXX? guys I said operating for XXXX Mike. you be in than relative what achieve you fourth us of XXXX. third the leverage there and or Xx quarters, why you in quarters and hoping with that Thank the share the to you good share morning that slowdown Can fourth of quarter you noticed on got ‘XX. some leverage quarter was seems to some

Mike Maguire

Sure, Gerard. Yes.

As net a revenue we we One, obviously, great side. outsized, which particularly ‘XX, look half, year a growth interest was was loan had – a obviously into factors. expansion, tailwind I the on couple second think of margin in where we XXXX and the

to NIM we a going expense our teammates to perspective, that a about add are plan for expenses But in we those investment there that are combined, are we on ‘XX, we to to probably From to structural and second is nice into in are look growth make categories we expecting four priorities. the quarter. X% side just NII investments ‘XX beyond expect in to that when growth obviously structural expense mentioned, year-over-year strategic continue And few frankly, As some there. have that our change. really from in experience perspective, up trend but to clients year-over-year the and the an begin We pressure also intend stabilize. other

– of well. So, about our leverage feel guide sort as good our again, operating with guide about and X% good upside that frankly, feel we revenue

helpful that’s hopefully, to So, you.

Gerard Cassidy

appreciate yourselves many any you loan haven’t that high-yield out. and loss calling that. And up follow-up, for in – economy, of the are weaker spreads are or your the many to then yet obviously Good. are of a building market, numbers. The No, don’t using, people that peers outlooks I if at we a reserves. you they of the but seem And seeing be look blown as in

competitors out as pointed in are loans of tight. pretty or One commercial still your the they spreads peers, that

as maybe of to when you this much as don’t forecasting later might talk everybody not year? your we now kind is Bill, downturn seeing right of I see what that customers, know, a they are So,

Bill Rogers

you is Yes. confusing. no doubt mean I mean see some data mean the pointed some you see and just are There positives I you out, think that. I negatives. about I

not last season. think you retail look sales just poor about few Christmas were selling – strong, sort a the at really If very of days,

You have seen a being sort seems inflation part be do, what supply of and bigger people to reconciling of chain itself.

reduced reduced a whether higher of and – things. hiring prospective. clients, has a from in And more it’s a that’s And fairness, more perspective, type little that’s capital from impact it’s higher inflation. just our whether investment, to think I those be there all So,

as our looks we at to things Clarke today, mentioned, when are our portfolio our I we fantastic. and talk commercial great. clients portfolios So, mean look

Our due, will – will over payments clients due, come are will in shape. change But will time. things really things come good rents

to I just it today, trying of little looks is pretty it economy it’s where that? where would strong. I actually versus Clarke, you think what more is add So, going a because the think puck’s today, to understand

Clarke Starnes

would input like financial I at economy, on the clients. positions the their into happens to say, are just of Gerard, Obviously, things, sheets, closely what liquidity, our balance Well, higher like in we your term monitoring costs, very things the office. of impact with and good depending Bill, are these very risk going clients’ things this. and point, we rates, CRE all are looking the their

provisioning everyone’s slow I near-term your from looking obviously, just think the we be still of to those strong. So, does is performance impacts point, the and out if But are actual that’s what could outlook the economy to-date reflected some – in the and models.

Bill Rogers

normalized now. it mean are normalizing right and to side, we Consumer is the where cases, on in consumer side, I some

to do start that. you So, some of see

facing We start of to from of deposits. our a borrowers looking are of challenges starting lower-income they little sort be as not withdraw work a more lot it some they that’s the today, build at done inflation. that they and to may but have facing Maybe

and prospective and calibration we to could want be in the that is we mean where thing a want And all that find to might the thing through of it runway. more exist are appropriate portfolio. to of undershoot things risk conservative. want to right we than So, a trying We be current all land. think don’t I the

Gerard Cassidy

color. Appreciate Thank the you.

Bill Rogers

Great.

Operator

question comes Betsy Stanley. next from with Morgan Your Graseck

go ahead. open. is Your Please line

Betsy Graseck

Hi. Good morning.

Bill Rogers

Hi Betsy.

Betsy Graseck

outlook year. – you adjusted XXXX, little coming up hearing got now, from fair you I of have number XX% have little to that more. things I level a that the back loan want growth the have bit revenue fee to and the due X% some fees likely a what slowing in is really And not of a for but that I summary? am to little growth much slightly fees loan a will couple of the know be you NIM in pulling also different back in X%. that Hi. touched to half bit and just ways, Is the be but a understand bit we But that the mentioned with revenue then lower above is pressure around the mortgage. growth

Bill Rogers

this it for sort stable I assuming point. Yes. differently. of the think I Betsy, think you sort little that make look we fourth Mike and quarter, I was And of are bit I of would say NII the trying maybe – at to year. a are mean through sort if we

about And So, I and pull kind going big mean at the to mean not loan driver. what’s the NII being that’s numbers. if think back is loan the that’s revenue growth of the revenue it’s stable. little growth you a big bus the bit. I guidance,

Some it’s cases, part. relevance be going expect be return-oriented, some of we And in really, just we with sure to to business making our A to intentional our really that clients. great the of going have lot is up. got on that’s fee be

up. to We be expect insurance

sort organic from digit of momentum have still We its in of continue to some inorganic we growth. it have gotten. expect We high-single some acquisitions the

see we out. We biggest will in weighted where to its expect revenue sort the That’s and the probably return stabilized where growth. back-end moving come of basis. on we fairness, a a quarter That that banking NII be as big increase forward the investment and driver. are actually little fourth But is driver more but markets

Betsy Graseck

release, about you ‘XX? having talked deposit a item – the Can tightly, how go you well of think know about as press a your line costs to we give etcetera. trajectory sense that bit and through in as the you I managing And us

Bill Rogers

high continue level. a will I – will I Yes. do be it to slightly at be it down. mean

think trend that I that’s mean will I continue. So, –

about continue if to basis, know how that. of to on And think our costs will reflective relative that we Mike, I I increase. showing mean deposit opportunity. grow, sort specifically thinking I comment are betas of don’t are deposit the we more betas as are a you want

Mike Maguire

they stimulus the we which XX% what’s will DDA a with sort Yes. that I betas would say of seeing or well of the see interest-bearing We consistent of are We trend, remixing XX%, not, that mentioned and the is expecting sense. still reach in increasing. Whether other expectation during we we level consistent pre-stimulus. in the We we XX%. makes an Betsy, what we are still are is And earlier see. above others with our question XX%. peaked height sort and in where were the XX.X%, from so were high-XXs,

We over we seeing continue Bill, mean And expect XXXX, XX% moderate to and and think deposit in I are would some like I now XX% it and probably think, XX% we at I going perhaps back time. you are right that approaching to aggregate a the in hit bit. pressure balance right.

Betsy Graseck

Got it. Okay.

Mike Maguire

great. That’s

Ankur Vyas

Thanks so it like looks queue, is Betsy. Jess, Alright. that our not in earnings there the anyone completes left call.

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

Operator

your Thank conclude you you. that participation. We for Ladies thank gentlemen call. today’s will and

at may You line your time. this disconnect

Truist Financial (TFC) 19 Jan 232022 Q4 Earnings call transcript