TFC - Earnings call 3 2023 | Truist Financial Corporation

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Operator

Greetings, ladies and gentlemen, and welcome to the Truist Financial Corporation Third Quarter 2023 Earnings Conference Call. [Operator Instructions] A brief question-and-answer session will follow the formal presentation.

As a reminder, this is being recorded.

It is now my pleasure to introduce your host, Mr. Milsaps. Brad

Bradley Milsaps

our and Call. Welcome our With CEO, Rogers; Anthony, Quarter Truist Chairman morning, Bill Earnings Maguire. XXXX us and good you, to everyone. Third and Thank Mike CFO, today are

this Chair their on updated and share outlook Chief call, quarter provide Clarke XXXX. conditions perspectives will Truist's current discuss During third morning's Starnes, results, for and business an they our Vice and Truist available Beau Risk participate also Vice Insurance Howard, Holdings' our John are call. Chairman Cummins, Q&A Officer; in the and attendance to in our portion CEO, and Chair; of

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

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

With to over Bill. that, turn I'll it

William Rogers

and our morning, joining thank good for and Brad, everyone, Thanks, you today. call

quarter as get into Now on our let's X. always results, the before Slide purpose with we third begin

the purpose know, all minutes inspiring lives we we better building like Truist communities. to some purpose-driven our company I'd and highlight of take to demonstrated and a is just last to few quarter. committed a ways As

which allowed with terms. by underserved the nontraditional housing announced received the Financial programs million organizations $XXX last just tax our Community Charlotte positive driving XXth mobility In affordable us Institution is and/or of to North credits change million This and reduced communities of we from promote is economic communities. Truist has $XX and of career and across invest by award, interest that in allocation the Development market of $XX has Carolina. loans growth million time support week, an Truist to our providing supporting rates Treasury's development in vibrancy Fund. the August, new in state invested And U.S. we

job a shareholders doing loans on of I'm our growth our realize development have of a of we're regions effect have helped our and communities to spark proud years, the we and our as our we serve. company economic and, course, purpose. work lives across communities clients, work to as teammates and really the these the positive Over meaningful the

Now is key X. let's in and of turn reported some our despite the earnings impacted on certain third the going discrete Slide that those cover to quarter expense Truist negatively to later takeaways results. call. items guidance Mike income our noninterest that solid met

was by As and which cost reduction themes. company, you work. on introduction up significantly can evidence year. performance defined third see expenses expense growth saves key we the our with $XXX several our followed is was to ongoing the the discussed quarter On rate solid July of underlying earnings And simplification reduce on our September. throughout our call, committed this at work to the program delivering the fully of slide, the of hard We're efforts been in in that's intent

managing more efficiently. also We're sheet balance our

occurred lower-yielding of higher portfolios X third described few paying basis by higher during focusing helped on all and calls, borrowings, past how clients, reducing NIM points the During our during quarter. we're and down I've drive which earnings the cost core quarter the

based period can of growth. capital rate III ratio have which to level maintain under rules these we we increased that Basel a on Moreover, believe the CETX pending current throughout our efforts our nearly XX%, phase-in is proposed organic

stable our we to normalizing is we quarter economic quality build during uncertain remained considering the loan encouraged continue while asset the are relatively levels, our metrics low Although loss historically environment. off that reserve

simplification, cost our in in making the saves strong which program discuss organizational we're call. later and we'll more Lastly, on progress detail

stronger in company. confident with and as a focus intensity our to the pleased our I'm and direction, emerge I'm ability

third we While to better future. as as direction. more view there's strive in in quarter we this step that work was the performance the consistent We acknowledge results produce solid, and quarter do to a more forward

an program work Total common to our $X.XX EPS Slide per on shareholders discrete to line cost X. income more deposits let's saves billion revenue. So charges primarily and or to severance our per decreased as and guidance impact in with $X.X $X.XX. available Net was some share. with was charges service by expected revenue restructuring on associated essentially million do despite $XX specific related Merger-related

We're our points, a improving renewed a X loan in driven borrowings, net including sheet decline and by efforts, ongoing FHLB in improved lower-yielding and that also spreads. basis interest reduction balances optimization loan encouraged our margin balance new

down expenses decreased guidance XXX basis million basis higher-than-normal would range points were have within other $XX excluding our expense. and Adjusted points XX of and

Average higher-return student quarter loans due assets. the to sale X.X%, our second repositioning portfolio towards core of loan the continued primarily decreased the and in

Average deposits experience increased modestly remixing as continue alternatives. towards we a higher-yielding to

CETX of X and quarter increased of by in our points light capital ratio ALLL We in economic ongoing uncertainty. basis added basis the points XX

September Lastly, stock paid our common quarterly maintained on share we at X. per $X.XX strong dividend

primarily the mobile-first standpoint, relative year, update past XX% So remain to up can driving the left initiative. digital on you engagement our From on slide. same transactions, last Slide our have app see Zelle users of engagement activity Mobile focused side quarter additional digital transactions period. through Digital steadily over which year, fourth as let's on X. positive, increased by driven move to over and currently grown the were the X% the Truist trends we're an growth at

interacting Due to the channel quickly experienced, become with growth Digital has Truist. rapid we've for preferred a

call opportunity XX% for drives the enhances that's Truist transaction positive, more work the efficiency. while is account TX, create which now meaningful certainly transactions total even to concept And that of leveraging further towards what digital, mix a specifically has we and trust, technology experience digital and digital by to touch shift and adoption and greater client that this together more transactions. bank than fact, In

highly helped which may to in have sum, the new year-to-date, rates lead One about In user proof has turn activity with and balances recent in transaction potential and to digital enhancements in a clients. expand drive optimistic have Truist the I'm point, volume. further leverage Truist XX% solid additional we to and As transaction funding our digital those base drive increase TX onboarding to digital momentum a

I'm in efforts, to last student going further our portfolio cover of loans Next, reflecting our X.X% and Slide the on loans portfolios. leases decreased optimization Average sale and loan balance quarter reductions lower-return sequentially, sheet X. ongoing including

sale, C&I by revolver balances decrease down lower decreased loans Average X.X%, Excluding to and loans production. due the student loan X.X% in driven X.X%. average were a commercial primarily utilization

and community Banking to a reflected moderately of greater contributed Commercial segment uncertainty new pricing and spreads production which lower due combination wider demand production C&I Corporate to bank. commercial Lower our and on economic in discipline,

our In X.X% and indirect further decreased and to reductions Consumer and essentially card production. the flat mortgage prior portfolio the quarter. card in due average credit and primarily the to were portfolios, loan Residential excluding student relative was down sale. consumer auto sale loan X%, balances our loans of student

expect consumer deemphasis do growth at ongoing Sheffield mix deeper decline the of the continue and modestly economic and relationships, experience of effects uncertainty. and by higher-yielding shift increased commercial Service towards lower-return and driven in to year-over-year client continued Overall, deeper to Finance. portfolios quarter, balances our fourth penetrations, production We in XX% Finance. we average XX% portfolios, Service Sheffield Loan at especially

deposits fourth Average were experience currently to move sequentially, clients continue we XX% Slide compared So remixing deposit portfolio on to rate let's total as year. sought within the deposits flat quarter decreased XX% although of higher the quarter XX. buried and represent and in Noninterest last trends the second deposits the to XX% in of alternatives. X.X%

our the tightening and flat alternatives. availability average effects Corporate of quantitative wealth down Within and of Commercial in higher-rate and to were relatively banking X% consumer and due segments, deposits in Banking

We continue relationships our in to banking clients, with consumer and payments. deepen wealth especially

a has new X positive of We're seeing flagship account Net product. adoption checking solid in One production our checking Truist also row. for been quarters

In were production X new business the was sequentially, the checking small small August business in month addition, account net deposits years. up last for strongest and

XX Interest-bearing deposit quarter. third points a costs increased point a down costs sequentially, rise Deposit though at quarter, XX the prior continued the in slower during to basis increase pace. basis from

second Our alternatives ongoing noninterest-bearing the and to in beta products. interest-bearing higher-yielding from due into cumulative up the from accounts deposit of rate was higher XX% shift mix presence XX%, quarter

continue we'll to striving our also maintain balanced value them while maximize attentive relationships and forward, needs approach, of to Going client rate being outside to for our paid.

Mike more Now a let to turn over in results to me discuss it detail. the financial Mike? little

Michael Maguire

income going begin to good Thank interest net Slide Bill, with you, everyone. XX. on Great. morning, I'm and

linked taxable-equivalent the earning interest deposit For income primarily and to quarter net decreased costs. higher average quarter, X.X% assets lower due

deposit as slower pace. than income was betas that down more the encouraged a the linked interest at decrease quarter, second net we observed X.X% quarter in the was Although increased moderate are decline

new average on optimization for the borrowings, and basis paying compared our loans, quarter. margin Reported X including: stabilization our to reducing which consecutive $XX billion quarters. balance cost FHLB loan renewed spreads declining net X wholesale NIM interest improving sheet focusing core reflected and initiatives, including down on higher down portfolios clients, increased were on after points lower-yielding about second advances, ongoing

relative retention remain quarter income like-quarter third to due Fee seasonality. income, or by second. strong, lowest decline production fundamentals which business lower million revenue noninterest sequentially new which quarter. a and to to was all Slide X.X% primarily decreased improved attributable the basis. the on to favorable and to income contributed pricing, in X.X% typically the $XXX $XXX decreased in second Insurance million on Turning is growth XX. highest insurance organic of growth, driven Insurance The

basis down by $XX by insurance increased banking and income investments. other income income our to income $XX primarily protocols. million, of and fee charges service $XX while higher Service and we third from million lower deposit made lower million to income. that quarter due was banking charges higher higher the other accruals driven in were were to like-quarter deposits lower were a trading client and on was offset Fee million Investment as flat refund investment trading due $XX other changes on income by primarily income

by sequentially expense expense, XX professional and expense. The by decreased Reported sequentially, expenses lower driven partially expense, line offset noninterest rationalization. adjusted noninterest and our basis was on processing July offset cover range X%. in expense other outside personnel a by expense XX. expense points flat million and in flat by of facilities I'll higher was adjusted Adjusted fees Next, restructuring $XX expense with merger-related severance reduced lower in to was and Slide mostly down as increase noninterest decrease driven guidance

increase million the infringement licensing patent and arising certain agreement, of well as service previously from mentioned litigation patent USAA settlement accruals in a resolved the other which as costs client settlement refund included of deposit The charge including expense $XX matters, lawsuit. the

quarter. linked work our gross well X.X% If you we as underway associated by The these adjusted discuss excluded program items, is on expenses declined will cost saves with XX. Slide

will and which of significant our opportunities. organizational The over technology announced structure September, in these efficiency XX $XXX of in reductions. design quarters. health, spans improve to gross next the simplification, over we're from revenue million a XX and to drive force, we $XXX work initiatives elements will businesses The operational from saves from next In we and all realignment functions, redundant cost include the were and couple announced result plan realigned million $XXX reductions and consolidating includes be of restructuring have and force already optimizing reductions organizational million select in layers saves to doing that million organizational in $XXX will to geographic achieved simplification improve Since months. cost expense mid-September,

we costs we spend. rationalizing gross XX% available, technology range on still footprint cost addition, corporate saves estate the from Based information to onetime managing XX% program associated of aggressively real are In spend, reducing with cost the our and saves. expect third-party latest to

help growth to by growth us XXXX, and net saves expense X X% driven in to of We the cost also to continue will other expense inflation natural program which is adjusted project manage factors.

asset quality on to Slide XX. Moving

basis We're overall partially by continued points early-stage sequentially were declines is commercial. assets remain in offset in unchanged but Included as updated third while manageable. increases the increased we linked metrics consumer appendix quarter, data portfolios the quarter, X.X% up on on pleased which X at loans. to our Nonperforming in delinquencies our office of modestly increased June September from increased and only XX. that office criticized and linked portfolio, X.X% classified represents nonperforming this reserve at while total portfolio XX, loans Asset in were our normalize quarter, to quality X.X%

portfolios. in reflecting by Our net million. consumer X provision [Audio increases net student points ratio Gap] to our expense charge-off impact basis offset partially by quarter of decreased basis loan reserves XX sale, exceeded the and points, lending CRE the charge-offs $XX prior as

we year-over-year normalization greater supportive points increased economic to clients. sequentially our areas, X.XX%, up ALLL we with though tightened approach credit long-term quarter, for uncertainty. basis our points our basis X ongoing due Consistent and select XX in appetite maintain commentary have to Our ratio and last risk through-the-cycle high-quality,

now requirements Slide the capital Based October third XX feel our of place capitalized quarter X.X%, generation under a Truist new requirement capital the a periods. minimum With CETX capital XX. on of the RWA CETX combination to organic on phase-in of relative meet the which our to proposed capital in took added ability disciplined confident basis through to of and ratio well regulatory Truist X.X%, of we rules, Turning remains X. assessment on our in points proposed management.

achieving ratio XX% for our The incorporate pending assessment, strongly in headwinds fourth we company, does which the CETX from quarter. and of a ratio the is a trajectory be As to by CETX the end capital year. to approximately building expected of now projected recognized committed FDIC are the

Our the of payment primary organic our needs $X.XX new supporting growth priorities of the common share clients and capital dividend. core existing and per are

acquisitions to over have to less to near to certain continues that disciplined we continue to capital and allocate though previous term will open we our clear management as businesses, we clients. the is repurchase no sheet mature. We have shares be very RWA balance been core allow plans to

capital estimate believe our a Holdings greater additional Truist residual of flexibility than XXX ownership to continue that Insurance is XX% We we addition, capital advantage. provides Truist's distinctive points basis stake flexibility. In that with

billion today's The to $XX.X Based end provides the quarter the third end at would analysis AOCI securities curve, the slide of from in or forward to a our of attributable of XX%. expect table decline on in of we the the the component center by an $X.X to updated of cash of AOCI. XXXX decline estimated billion flows

the rules requirement, it as the binding bank debt that that Truist's for relates is $XX proposed approximately shortfall we Finally, at is to long-term the estimate billion. and a constraint level

we the period. We both debt normal level during the proposed issuance that phase-in bank holding are the confident meet company at through will and requirements

XX. will I Now our updated review Slide guidance on

$X.X the into XXXX, we revenues X% quarter XQ billion. Looking from of expect revenue to flat or be decline to fourth GAAP of 'XX

income, and deposit banking to remain income. investment linked-quarter service improvement other charges lower our noninterest likely income higher partially to mortgage smaller NIM in due by offset compression. expect We Net interest and insurance, and under due income is balance on income modest and trading sheet to some pressure

Adjusted to these expenses $XX $X.X excluded lower other guidance. expense including these are expense million expenses excluded expenses TIH our XQ $XX stated personnel approximate X.X% $XX through million months expected from quarter that Previously, expect to independence April, the and are $X fourth second the they which expenses. readiness. In quarter, because our not first guidance in XXXX XXXX, 'XX X we we've in of with third of and billion out million costs decline quarter. In the due called we totaled to the only associated million,

year revenues For XXXX, increase to approximately the our revenue to the guidance is expect of by of X.X%, full at which up previous midpoint X%. X% we

in Our million $XX accrual guidance the that the client negatively fees impacted third quarter. includes refund

This X%. related service includes $XX deposit the the adjusted but independence expenses XXXX. costs to settlements refunds, TIH to and legal client million for are $XX XXXX still track of readiness increase year excludes on Full million charge

the of our guidance we student the impact quality, of basis a points asset to includes XX XX loan year, for the terms points range to approximately of which XX have full sale. basis from In tightened

on compared expect rate we effective rate tax taxable equivalent or to -- approximate previously. XX% tax XX% XX% our a XX% Finally, basis to and

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

William Rogers

Mike. Thanks, Slide XX. Great. I'll conclude And on

organization, looking organizational to simplify the underway. key transformation company a actions We're So into include simpler, our beyond meaningful profitable and quarter, our third more swift driving is which changes.

in from business. banking estate XX XX, streamlined we've unified units our example, weeks a realigned real commercial into recent for and several So community regions commercial the overlapping to

within businesses have payments number accelerate consumer been effectively of our help and wholesale across payments activity drive under payments more We've of to will realigned teams a consumer lines merged banking services consolidations business a single us support There businesses. efficiencies also across team serving our organization, to which team enterprise our operational small X We've and enterprise our organization. payments whole into Truist. the

is growth expense in of program, X% are to and changes and part saves of designed which to adjusted limit million underway cost drive our up to All service these $XXX better XXXX. for flat well clients our

on focused invest risk to we're in reducing maintain the we ability organization metrics. to growth, our quality and expense continue management asset Although of will rate strong

many see been commercial an happening are inside we've track new will there year. area this core changes consumer the significant of year, to on for the has and checking Truist, Net positive not and on continue news our whole businesses, first lost which that focus is X production account While we're net quarters to positive continue investment. for

During XX% the our channels XX flows across We're transactions XX,XXX wealth, most than of digital the the asset Client maintaining corporate channel. households third momentum new have positive up more where quarters. or satisfaction during we left and X through RSPB acquired were net in stable the increased organic year-over-year. were scores commercial, quarter, past been also In lead quarter. in

payments improvement investments product in is reflecting already seeing XX% sentiment digital wholesale and made. up year-over-year. clients, strong our commercial pipeline client Lastly, We're amongst also we've that

We're requirements periods, end building proposed while strategic confident ability sheet our with company, rules flexibility down efficiently, with satisfy preserving our to core capital, Basel and the lower-return on our the III game phase-in proposed deemphasizing and focus the in balance to debt. operating also clients, we're TIH. in feel thanks As we our a higher-cost more paying portfolios

your conclusion, I expectations course, I and truly In necessary making ours. financial to performance positioned know our and, improve we're for progress Truist, future. meet am about the what's to of and doing we're we're high well optimistic

our to level, growth of our I proud really at really a teammates. great high are committed each and teammates serving clients, performing markets, other they am Our our on are for and capitalizing caring

for service to at their to want due exists of our retire to company. their the confidence. publicly to to of Q&A, literally thank our years grateful members I'm Before of we leadership year. Board move and of I Directors contributions plan deeply who this end X Truist the and meaningful also

Following will directors, who XX members, these retirements, strategic and oversee advance plans well our Board XX rapid independent our to of industry transformation. consist positioned including period during of this are

turn So back me the we it to with you, and Brad, let forward over to that, look Q&A.

Bradley Milsaps

at will explain please participate do Bill. you, time, you Thank listeners Instructions] the you that, Anthony, our this [Operator session? Q&A in can As how

Operator

[Operator Instructions] Jefferies. with will question Ken Our from Usdin first come

Kenneth Usdin

independence I preparation were articles just Can the just I coming and an us I'm the TIH know still you're give -- you're to for of the here paper, just to just optionality. forward? at strategically? updated Bill, you -- that back make business would about in how transaction you change sense And what to forward value it of move versus the looking type with some financially the guys move of talking

William Rogers

that. Yes, thanks Ken, for

financial growing. able strategic on and Point. both value want and to we we've I is in or for with Stone what But can is this imagine, talent. the in business, you to and sort As question, the comment reason flexibility of business retain wanted question, to to about mean we to do for I what to mean, the is Truist the We hire your been opportunity speculation. did I exactly wanted TIH. and rumor think your don't highlighted establish create you any

it, opportunity to we that to obviously that the in a core really so of mean, had feel happening that's just want financial and to what's strategic we flexibility. grow that and to an wanted respond We got Truist retain good we're uncertainty whatever market the happen. then may lot a insurance business So insurance to make business. flexibility continue to had I sure in about and

But not to this a both happens, reserve to There's So if like one business. there's something we bank apply continue continue queue, want insurance do the just this. thing. to to and and flexibility not it we the

Kenneth Usdin

a on we versus the cetera. guess improve I well. get financial Like terms follow-up obvious benefit just an contribution, X, Because ROE, strategic? capital Yes. what a it are as does And questions delta of to of between et a lot become ability point the the in like at fee trade-off

of So incremental just guess, of it's financial becomes notion hard that how strategic? you that think switch understand is. like for the when investor maybe, community I do kind what about to

William Rogers

Yes.

reason talked is there just ourselves, that and we We of keep this flexibility. flexibility, said, I the something particular isn't conversation you front at we're But trigger factoring I to that front that looking want continually -- the mean, to allowed we is into a sort of sure that did the have intentionality just everything think I this keep Board. that we in around As decision-making. point. make we in and constantly the retain of This we're about

Operator

Our Research. question Autonomous McDonald come from will with next John

John McDonald

I NII wanted banks a they slippage interest into income. that stabilize fourth heading should A what of factors little dollars we could quarter. about NII you do of you fourth any the into Mike the quarter? year? on for whether you net as ask in think visibility bit we said And the potentially mentioned see about number bottoming have fourth have But you see next that quarter. to about path think

Michael Maguire

half pressure of about did I and some probably some continue that bit that see We think to during with the pressure to we see quarter, obviously quarter. expected this XXXX. the even rate just has fourth, We second expect do John. better in and little And to the actually into the a talked than do frankly, Yes, path. first we

we've seen of don't the last expectation July a we our forecast hike, cut we until an have have and that We year. think next in

We have X cuts in half. the second

around lower, we there. little of a -- We're feel client relates bit beginning progress credit intentional nice we're a very again, been We've the some trying loans. repricing renewed pressure We're pressure. news of how feel should of are and see managing rate some slowing like paid the as across we fixed of to And down, new We're bit sort and base. combat so good to still betas to that our spreads. grinding as rate is, it

news pressure, while but do there's see we pressure early still is it's is, good moderating, that next into year. the So

John McDonald

you. about Got you when the year, go next to might you next also And for in you be much readiness of $XXX have it us costs talk to X%, terms the how next remind you of goal the expenses, flat can year up into whether are and expecting million year TIH too. gross

Michael Maguire

can start I John. there,

that XXX% think it's being think weigh think mean, you say. I I Hard year, about XX to if the less next in, months. recognized to Bill to more said want there. sure the give about make we plus confidence And X/X us may That's to that. I growth XX than of than too. a it's on have manage I we maybe minus, kind would little or John, again, to the X%. how we that we're expense million, thinking mean, math

to well. TIH 'XX about as about there. asked readiness You yet not costs We're ready talk

that year in full We guide give you for to when we more the will January. visibility

Operator

Bank will from Our next America. with Poonawala of question come Ebrahim

Ebrahim Poonawala

And be think rate One, assume thinking through at should trying from we the that about growth get standpoint, I X% exit does 'XX? do investments? these When how XXXX, through are flow second to expense to run way just when a just half following the to to through realized? right savings. to the when your expenses -- guess these Is look expense decline than X we about first just maybe, on next we Mike, that the up year. offsetting think from construct relative half lower continues XXXX will 'XX

Michael Maguire

and realignment and Yes, right Ebrahim, for come year. as of quarter answer certain was into the some have I like I'd of the we're quickly. significantly think a design you'll is some Those we some of In lot different that run our reductions a quick -- see a a and agency the Same now restructure actually and That in next the organizational early action example, run rest some example, business for earlier the goes taking around, the good the rate. the rate of if pretty the relatively of in middle year of of way trading force, health market cases, this flavors. business adjustment that question we to discontinued fourth businesses.

take component throughout flavors Other course year. has savings making pretty technology recall, course maybe we're our plan, place significant of well. adjustments of spend variety you'll that which, a the as a And cost the of of next then is as

most So just to improvement run exit good I'd rate as of you'll adjustment I year. say for see, enter course the And we think, going part, you're see pretty sort progress of and sort on 'XX the 'XX. continuous the throughout of

Ebrahim Poonawala

I question. And separate Mike. helpful, a guess That's just

any that more student loan the sheet balance more there's the more or to there sell? way that. How go there quantify to about on you And capital? if about businesses, optimizing portfolio, talked another you you much making exit to the Is is one. think as exiting look So just side could a lot certain efficient, asset

Michael Maguire

we're got profitable. asset the strategic C&I quickly, for for fruit was some It businesses. that lot indirect think our other after like as and us. a we pretty The Ebrahim. as lending lowest even feel of There mortgage I we not hanging businesses our strategic. about talked student within didn't business, a highly national have correspondent We've was example, portfolio less been

good to sight a line that think I it. have pretty we of So

forward, -- a results as opportunities, there's types significant opportunities. well. and price shoe seeing being around our to it's things. how think much I sales think optimization, more don't But We're that we I And on portfolio more come going right? we through select just disciplined how drop those in not of in a

William Rogers

that, is we've to really seen we'll that Maybe just and Sheffield growth, thing good the that areas securitization. in think the Mike, to Finance, only add more particularly Service do

more So great. think which sheet, are balance things those we'll create on around our velocity I

but to acquire velocity. production, new the continue clients, So the increase continue

our of parts we'll with And other look portfolio. at that

But think and the think Mike going It's significant quarter. a embraced, I'm team maybe we the And NIM edges optimization reflected major strategy, but say, that move in I to shift. to not has saw So opportunities, it really our you this more said just continue I power right. around this more forward. as that we have

Operator

come Erika next question with will UBS. from Najarian Our

L. Erika Penala

This Bill. you, for first question is

just Point, said Stone February, a Slide I did in That back that with taking a a world think deal right? in that about struck until of think was was think struck that the March. being change I you thinking exit. it handful investors of once one-way step didn't The and your XX, a deal sort

you so is And this for question you have Truist that Holdings. opportunity Insurance for monetization my

And world has proceeds, think again, the as about the you changed. clearly,

essentially that but you the rate versus that side, over more call did how they won't some restructuring term, essentially is stay which do in portfolio will you are that cost 'XX, portfolio maybe I mitigation XX meaningfully? trap are that, of are very, if more your assume So into rates push in on making where a NII same calling can terms very very in see a lead And slow middle in do in investors versus balance for which the the Slide bet. chart you you're is to going doing that you the XQ near RWA you making

William Rogers

creating the our things I March, that noted, Erika, a to independents all And part always to the changed our question, you over large expense the getting bucket reaffirmed flexibility. benefit And from I going got have -- we're discuss. that. capital as meetings. the we of to back was world this highlighted of bit sort independence as desire but just of this But term, just that is in all capital are evaluating. think mean, the it have a pretty Everything long the benefit. you've we in remember, little substantially you been These this

So to trade-off terms us, that that in -- always was creating good of a that really flexibility.

best one not to say, speculate single the one. we're all you've think don't go we going want almost as right perfectly So trade-offs to to every I go perfect left consider are other would There that that going in will shareholders. we're North the and going to today, path. to exist or of guiding alternatives question and and their your I long-term There's all environment to encapsulated post to we decisions that to you today put the trade-offs our everything are and than into will be all through as tomorrow think interest the we're question. this the of to factor And that going make with exist in them. That's our your in Star

L. Erika Penala

And second boring. question more is my far

quarter. a here. onetime offset that just charges, service for new $XXX Or a and fees I some this the down million million it the from the $XXX -- million March in in the $XXX there from reversal? to Mike, a to rate? that know quarter other about run On previous pieces moving is previous Was was think trying income, but like handle went

Michael Maguire

Yes.

the the was During that's $XX quarter, referenced continue. we that accrual that we to million, not would something and expect

Operator

will John ISI. come with Pancari next question Evercore Our from

may You now ahead. go

John Pancari

first the in in question that the that fourth your and you based On the upon the margin and John can maybe quarter balance to outlook expect incremental and would half, rate you dynamics? sheet commentary magnitude pressure the pressure you of quantify NII gave some regarding help McDonald's into

you assumption And into could growth assumption that's then secondly, that? baked the beta deposit and possibly deposit unpack

Michael Maguire

I'll John, for fourth sense give outlook a quarter. maybe the on just NIM for the you

at a as expect of that's the on of continue to of the movement all seeing way consumer as we're we some know, across, with I creeping, the to you I second. X say, that betas things. where customers in as just continue think we're XX%, but to we're mentioned, for sort third XX% at most as bit worsen bit, -- were quarter; is We again, part would a X of terminal the the be, And we still side think our the or betas might reprice obviously about segments slowing. deposit

of So of betas, bit little bit I spread from by that a offset a the perhaps credit again, widening seeing. some we're think the pressure

from So points. maybe NIM few perspective, a it's basis a

will sense a as worse, to for revenue probably and a have perhaps flat. quarter, going we it's be that touch. is X%, be down NII far touch a our As up fees outlook the

sort So it of at just leave I'd that. maybe

be far earning the We expect sheet billion. to more quarter, As the in that quarter. much would in third significant had around a much, we assets sizing, as much $XX fourth smaller balance decline during the

$X of tune the or to closer maybe billion So so.

portfolio little and bit the got just You've pressure securities maybe of loans. at that's cash $X a billion on about flowing

the So I math you think that's probably need.

John Pancari

you funding much there Okay. secondly, you mix the of you in of rationalization that the look the base of coming more funding reduction given Slide setup quarter is then bit you remix a had at in club helpful. of cetera. as the paydown And solid quarters on Great. do the pretty the That's a you or do discussed think XX some in now? the How think third et advances,

Michael Maguire

I the was $X cash by saw the of accomplished. was think the unique student component to We And a a mean, of you big remixing billion. billion. $X the at I portfolio net low that's margin Yes, portfolio interest third close contributor. amount investment Same pretty that, that took in was down loan quarter thing,

taking sort really about right think at of in sort as So the on was that same saw of and driver, spreads NII if that benefit the FHLB that aided and mixing some time, really advances, of the the thin NIM you really, quarter. stuff off the at that that the the then SOFR,

I how been going pricing strategies. I've a mean, really at you're in and been paid, to creeping I rate mean, been higher. structure. we fourth has Thinking the testing by been I'm as it, rate about rates. at exception-based again, continue We've sort we've think I march successful different the quarter, costs traditional around. little business looked performing. more to be We've pleased looking a have hit promo of we'll see again, deposit bit up Hopefully, of,

And so continue. that will

that. to can try is the driver to QX do saw going we're I that best so in the But QX-only to we And mix we think manage really opportunity. a

Operator

Our Securities. Fargo Mike will from next with come question Mayo Wells

Michael Mayo

for you X is hear expense X%. the about next to year guide I

you efficiency then look XX%, around at would had when I headwinds ratio be for tough to core the other it's you you the announced hear it's recognizing I wanted actions. even merger, that and the of things. better. And about where and But don't be. So up taking the I think rate not what signed investors

to embark as how as X.X Truist the is compared of maybe Truist to on decisions? X.X, terms call management changing what you So you make in could time

that like selecting X.X a is getting to reduced. is not moving was terms optimism, is seemed share that shareholders by in breed, better price, which shareholders on generally, And up frustrated Truist reflected take long slowed of X.X order? How certainly a time. with Truist all the better down such best intensity? guess, is Maybe out was it Truist a pecking the in there. board, now I there's How your of Bill, disgruntled X.X lot of and large and

with savings, how and with actions the help can way Truist insurance, maybe X.X strategic manage, you is the shareholders So of intensity million $XXX more?

William Rogers

Yes. to -- superlative what high. don't Mike, I thanks. is know The use other intensity than

really So talk save the what's our about in intensity million of the but program, simplification we and happened is good. cost with saves, diminish want And don't $XXX to the the cost I business.

has our lot simplification and towers really faster. the business, creating consumer creating wholesale allowed to of move So a that and these us

in team it. up pace. ways, they're this whole I So stepping with demonstrable has faster front at mean, process. much, are much I've really leaders in making of getting decisions the been a really pleased And how embraced

So and of would things. those been I consolidation of have different sequential the type more outlined Those in a bunch the past.

these to faster, through mean, parallel today, you you now. point, You mean, the is they're going to And your impact. one, have I we're sort the where another sort a not of I do with paths. happy And And look, efficiency I longer-term go of do one, think all great process. on that's

publicly long stated overall revenue also as growth. has that result talked play better to the the And we demonstrable them on But possible. of have term, One as We that about in plans. cost saves.

I on me. frustration, trust we bringing capacity, businesses embraced we're the terms And you, these efficiency things new, an are got the for creating all the our our product the key. net together sheet, teammates, of they've But improvement in in now And and I improvement the the I and those feel place, team fast. moving lean capability, balance it all mean, and support, the And intensity, building long-term ratio, have that having plan that your be Board, that our optimizing momentum, them training And we've do presented are of share creating we assure in it. commitment, we plan. leadership the think can on can together, the demonstrated place, structure the track. in, things we'll

Michael Mayo

next the to to for But Just guess you year. little going Board on the have on is as tough a follow-up, be And maybe a a just bones. I the you next leverage. if efficiency since that. ratio, consensus don't expects could operating plan to improvement comment think bit more I much present did year meat positive

other a efficiency. X/X bank Any region, lot, gave less on you One You give the payment can business. color

you when you aren't countries. XXX you're in And It's say guys like Group, simplification, not mean, I right? Citi

regional lot adjacent simple more be to able You're should be where after merger. the you happened what than markets a in

next efficiency leverage, year, is optimal improvement in positive say, this So really, plan? long-term as a you

William Rogers

Yes.

of efficiency, the of faster you I in simplification in year. will make as part decisions harder It businesses. as them plan the part to sort positive off mean, I of operating all of allows destiny next about just a be with know, they're -- long-term there is leverage an basis. and our that the On you're that running on first And a NII mean, comparison. control

into year, So that's part But improvement as tougher see hurdle. just to and get we that long-term next going we're I latter mean, the a on to of commitment continuous basis. the

year, the can't the as operating of things, start continue I half of question. improvement and So then simplification outline a good second to that of forecast seeing of path. going continue -- a We'll comment committed sort a going really you're 'XX, I good and on without exactly. particularly, it's next But and leverage really I can't to into all you flight that, rate And during lot we'll can some the comment be to to be firmly we'll those. on and a then -- --

to needed transom merger. I We them consolidate lot care technology In the a the those a of invested and think care centers. example, serving a of of different care and for businesses. lot bring mean well. can just all about, have centers. in we mean, centers over have perform I We've lot we

of Just simplification. of dozens think and one of component this of about that dozens as examples

with responsive to still not simpler, a agree XXX have we responsive shareholders. you, been, of and company have more to clients, lot noted, this sort faster, globally that I but as opportunity whatever in more to we're or parallel while make may you and of leaner So countries

Operator

question from with Deutsche next Bank. Matt come Our will O'Connor

Matthew O'Connor

issue? Was something least you elaborate service happened what by the was -- not please? CFPB? the driven peers, elaborate you haven't that yet. at that we that Can there, at on seen charge self-identified? Can guys Or Was of kind it

William Rogers

other a own is expense. Yes, I at all that did of with And This our Yes, We've mean, deposit-related protocols products fees. Matt. revenue we that that volition. on listened reviewed our feedback. looked respect did to to and our lot refunds Bill. changed we've resulted client and and of in We impact offerings.

path is, year the in we're the possible next improvement we we business. and and sort creating this front want of make taking for as going world I making of that, in we're just where contemporary staying puck to of our think is continuous the a more view that get ahead where sure clearer and

Matthew O'Connor

would going to And given not quarters you if than run we're we then changes million. do implemented it's these think the previous run the $XXX assume about rate I going rate guess how Obviously, of I forward? But service lower to charges changes?

Michael Maguire

million there's think third of the quarter here I general, event. mean, the pressure service evolution third I we've a safely you I Look, was noted that been deposits. that given can Yes. the on in item assume the $XX during this quarter on charges think just But

functional there in sort the on Truist. trending style same be of But this pressure should sort for industry step wasn't driver. and this line expect you've seen you think the item event of I again, of particular a So to

Matthew O'Connor

would I -- in middle of with in point, the you or the frame terms the this to conservative How Are would at on fees guess, the being Okay. your charges? just summarize, to refunds you more service side? overall, like and of changes approach? kind the And that frame you made approach and how the conservative overdraft then you the

William Rogers

Truist in going. reflects Yes, that we're and I where a think really got great we've One product

then almost One. so of the new our of And some of we're that. things to our some we're adding And clients migrating book benefits, highlighted I back Truist doing some of One. to we're all Truist the

it's characterize don't got really, So think competitive it's but how client do also really that but that product conservative contributed an responsive, I right to has And I purposeful. know know we've work, I and this to incredibly the is mixes our all growth.

to really, sort forward. charges Those balancing an with we as that of that's on think talked, relationships. good So I the path. term, while I really down, long things long-term service as value growth, continue will Mike think we're we're click mix as perfectly expanding adding And building overall, new think But won't going right a clients, shareholder quarter-to-quarter. align

Operator

with Gerard RBC Markets. will Cassidy from next come Our Capital question

Gerard Cassidy

X was plan customers, new pre-financial different deposits, new Bill, X business what points, bit interest some consumer this us that if had really can are you But this are et that in blip you environment cetera? use crisis have think X years environment rate of changes and rate are in with financial you rate in a you there since in ago to a this about game commercial was it crisis, -- changes having of you implementing to XXXX, win quite environment, we're changes, both your new share what low loans, than course. it's or the peers XX when and basis now post was you with to --

William Rogers

age unfortunately of environment Gerard. the operated to in this the have in maybe past. I'm Yes,

Gerard Cassidy

here. Same

William Rogers

exactly. Yes,

not I is cost sort a So is have of or highlighted, first territory. This of familiarity. think not some funding the and unprecedented I starts with things. -- I couple And new mean, you free. It of

optimization and the the competitive offer products But about all first all we've clients talking been more leading. the capabilities be with go that. to full from with our and relationships and you that things part have starts demanding and things along So about,

a of And side. us, on new I lot consumer net the highlighted like so for the metrics, things

clients We're rate responsive. more got So One competitive paid. like really winning than product the with we've a that's environment that Truist battle want the

only You've got the -- paid is option. your rate not

more got and to You product more offer capabilities.

we're think the the we I same thing. the winning that start We're advice in we and advice side, we're that on good with we're front. business. in versus corporate framework. So a rate start if the really on And business And then in commercial business,

clients. We're the we're concept be. fact So the where left are. the want to that relationships, clients. I of in with where to life you becoming first lead whole more perspective we go-to winning call so our advisory We're important becoming cycle, business our we're this on highlighted

the the share are we I with important core this So so with comes that is more efficiency changes all the and start that to our ubiquity in markets, market think just XX%, that. much relevance enjoy

So to but not is be you new good really it's work, a on at job. have this down double the

really to good You at be have advice.

forward. really of You be definition winning, Truist. I way, which, have good strategy to to in the capability for well I new think think, and work really product fits our going -- going and the that's perfectly The by into

Gerard Cassidy

answered I those Bill. by appreciate is then best credit, insights, on Clarke. maybe this And

about you the about think, folks. standards more talked -- credit up, guys we're worried bit. tightening not a But You I interested I'm

or X nondepositories comments depositories in doing last been others or You guys track record the whether it's over of good have underwriting. what But any can a might credit about you make have X years, lending?

underwritten customers color impacted. get but compared they've then actions, -- you derivative, if those done any, how fine the on prior were impact may be maybe But as cycles? that guys first else, could again, with somebody second Clarke, aggressive crazy who which there And something that you've any your to

Clarke Starnes

great Gerard, the talked the Great think environment, is job a despite the overall really were fundamental good. have the nonbank this. the in place since question. in we has have a I generally industry I than better -- rate think a the general industry even approach low and the good it's players credit I my I Yes. prefinancial much there. about done crisis, we've particularly in and Recession, been say, discipline I'd think peers But in general, know And I

there's shoe drop. see we don't a think don't I to -- So necessarily big

well, as sustainable to biggest think where through the we you long the those economic low where is I'd as rate impact of And trying feel some environment shift say a about good we And that if be. deals underwriting really were you evaluate we're your industry secular well. all I generally, will how how from even now are to thought we are.

Operator

will now with from Kenny take final our We Stanley. question Ryan Morgan

Ryan Kenny

the earlier So I on just clarify something the to NII path. questions on want

approach So to an from managing if your portfolio freed exits we heard parts is But expecting securities future potentially what any especially you up capital views of optionality? your the the the comment potential around on or update not are portfolio, repositioning And securities give significant loan sales specifically, portfolio? here. on more can us current from

Michael Maguire

the on on billion see average, the security flow -- we Ryan, just Yes. we've side, of maturities $X.X cash billion $X to and from portfolio.

earning the base. asset that on expect in sort of terms some should you of think of continue I drag the to just

repositioning, here. I been rise there's here. any the think as new on far mean, As obviously, long sort the of don't news rates I of

And some on our unrealized have the current so on the tracking we've down and kind burn of we our capital slide. been losses, position and disclosure incremental

but likes we're strategies potential and it to think nothing bond as the constantly I relates evaluating new. the portfolio,

some they the quarter, We securities that to worsen during an third at I'd in, we'll in terms hang hedges or new we a as we add effort did is in OCI potential capital, world we're kind these of some the see pay-fixed from this did -- bit. factor least where extent that to about just future, volatility unrealized which are the the rates where losses, manage living benefit of think in a say,

-- hedged. than X/X little of about So we've the got AFS less securities X/X a

Ryan Kenny

follow-up, as on side. credit just a then And the

color I'm does your increased Just you've give what NCO guide slightly the like to of a credit more bit it you're little XXXX the higher of terms quality. asking on end And prior seeing because range. in look

surface. you're can you share the if wondering seeing under what Just

Clarke Starnes

Yes, a question. Ryan, good it's

I believe we are drive we established that QX. of yet, and are I'd same guidance 'XX now the but where coming going the things forward seeing considerations into QX out First, go we will say haven't our

are normalization for I us, so our say the And consumer. area, particularly low-end seeing in we consumer would in

So acceptance, also second seasonality think then got some year regional And you've subprime outlook. of the the in half defined our that's of QX auto. impacting

optimal. on sheet be other our of and Mike, balance be we're what piece earlier more Bill to would spoke The remixing

we And ahead higher-margin so higher control of normal then but seeing growth importantly, something most efforts CRE And you're risk. Sheffield think more Finance, Service I they is the that and our to in businesses get our carry office like losses.

very some losses were intentional the that. risk of about moving So identifying we several we through just working do in in took we're opportunities there credits. from to And to resolving to the anticipating do QX, actually there maybe And QX. problem more

are those losses the go. factors think that I where will So X impact

Operator

to This to Mr. conference remarks. question-and-answer I our closing turn like concludes Milsaps for the over any Brad session. would back

Bradley Milsaps

Thanks, That completes call. Okay. our earnings Anthony.

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

Operator

now today's for The concluded. conference attending has presentation. Thank you

disconnect. now may You

Truist Financial (TFC) 19 Oct 232023 Q3 Earnings call transcript