TFC - Earnings call transcript Q2 2024 | Truist Financial Corporation

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Operator

Greetings, ladies and gentlemen, and welcome to the Truist Financial Corporation Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this event is being recorded. It is now my pleasure to introduce your host, Mr. Brad Milsaps.

Bradley Milsaps

Thank you, Betsy, and good morning, everyone. Quarter Call. Second Truist's to XXXX Earnings Welcome other With Rogers; Vice our are our well Chair team. senior CEO, Bill Chairman and as as CFO, Starnes, Chief Officer, us of Risk Truist management today and Clarke members Mike McGuire; our

During outlook discuss second for share they XXXX. quarter conditions and will current perspectives on business call, provide this results, morning's Truist's their an updated

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

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

William Rogers

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

before begin let's quarter we with purpose second discuss So Slide X. results, our on

purpose-driven better like the brought to things purpose to you some is purpose dedicated and we I'd are inspiring all and is ways the of quarter. Purpose share company, our life communities. believe performance building a inextricably and foundation we last and do, linked. Truist know, to that As we for lives

as Truist producer to of cost-effective energy the emissions of which GHG $XXX clean in energy an quarter, the allocated delivering portfolio. the green-labeled and Plant only the reducing and represents a Power's where largest clean transaction second to the committed to States. in U.S. are while Vogtle, nuclear is be company use This energy joint reliable . The Securities the support Oglethorpe with diverse energy. proceeds bond advised used million bookrunner for During will active bond, served inaugural green their United investment in

brought financial we're our money of couple to just financial new to financial our our communities, with choices. of during for and purpose program empowering to and our as and called This We This on have Life, Truist the high work meaningful is essential a very school our futures. also of younger navigate specifically life across is generations initiative work quarter. businesses their and lessons at doing skills impact college students aimed launched we tailored to examples a realize course, I'm shareholders the we purpose. our lives teammates, positive how our the clients, proud of of a education

on takeaways So $X.X on gain of net share, the Truist investment an to Slide loss of basis, donation in On securities, per sale a excludes to in will $X.XX available-for-sale key billion discuss detail items adjusted few charitable that the let's Holdings, sale our the we Insurance available X. turn which Mike to common or income certain further Truist call. a reported the of the Foundation on the and shareholders smaller

the million, which of by per severance of $XX restructuring TIH pretax addition, primarily share. related adjusted In EPS also and and charges sale $X.XX to were negatively impacted

So looking through discrete results. the underlying pleased our with in quarter, few we're a items

by can our was see the several defined performance key slide, you As solid themes. on

growth X.X% X% a grew reposition primarily was sheet the net income to adjusted during in balance on a completed basis, quarter quarter. driven revenue which First, linked we the interest by due we

Second, on our focus our and continued costs. discipline results managing show expense

by of by linked expenses result basis. efforts, X.X% quarter a decreased a these adjusted year-over-year As increased and on X%

year. keeping We our XXXX expenses flat objective of are fully to committed last in delivering versus

pleased fifth consecutive charge-offs also loans net and for stable then expectations. within our remained the relatively nonperforming quarter We're that were

the banking In which our further and portion business, in the footprint During the our significantly we banking recognition of Insurance for core Truist quarter, we million $XXX in charitable our capacity across to make position the impact our Holdings of long-term capital also of Truist the create to sale contribution substantial relative our to to remaining insurance positive strengthened years utilized for Foundation our incredibly a purpose-driven businesses. come. gain work completed of stake growth

target our during June, the of XXXX. of with our portion sale to TIH share available-for-sale our billion of for $XXX the million per more proceeds expected approximately TIH, repurchase we'll a earnings authorized on stock quarter provide Board third in TIH an Simultaneously, repurchasing contribution. the transactions $X is of plan remainder closing the up In quarter, through will the offset we from of begin late which, repositioned the provide the shares common received our We of the of later along to investment with the call. to and these portfolio, to end Mike initially details of year. repurchases

we to wholesale in growth banking businesses. pursue core actively opportunities and our Finally, continue consumer

slow the demand momentum share I'm during talent the discuss going I'm wallet of terms businesses Although overall call. and to in certain quarter, underlying later in the attracting within by encouraged the little remained to loan our which we're company, a increased

let to detail, X. more provide quick to improving financial on the in over our Slide for progress Mike making I on performance before clients the update So discuss call me we're the experiences a hand in

steady We app and transactions increased digital X%, capabilities the in continue last quarter the of compared second XX% and digital grew strong growth our users to show year. to mobile as client

driven XX% primarily Transactions up towards to which continue strong shift transactions, year-over-year. self-service growth by are Zelle capabilities, in

a quarter clients new XX,XXX through new-to-bank addition, including which digital accounts over we XXXX. increase over of during represents XXX,XXX channels the the nearly XX% In added our quarter, second

and we're and on more rates, with digital clients new higher increased Importantly, clients. business a digital completion among engagement digital basis. year-over-year millennial seeing where production by application high small Gen onboarding A our experience resulted is also also has small Z business new XX% modernized checking account in

and Truist empowered coupled We've X.X deliver to million million teammates care to conversations our higher digital in continue products in I'm engagement. TX These and in also Truist using of momentum great accelerated digital satisfaction efficiency recommendations really growth services. is through in enhanced enterprise on Overall, we X.X strong making digital strategy. knowledge and consumer that have enhancements resulted proud made focus as client offerings, platforms with scores continued have caring the for resulting to accepted adoption

results to over me to in let that, financial Mike? the Mike discuss it detail. with turn more So

Michael Maguire

and good morning, Bill, you, everyone. Thank

Before moments results, to recapping few I that impacted quarter quarter results. actions significantly discussing our the strategic I'd like begin second spend second our a

fully $X.X completed billion. XXX sale of rules points X, basis rules. after $XX.X an proceeds generated May in III Basel recorded TIH created and billion. approximately $XX.X ownership of $X.X value our current capital, received in cash proposed we after-tax capital an of of on the stake closing, after-tax remaining Holdings basis of of capital divestiture we gain CETX First, and of points under Insurance Truist XXX billion which billion The implied at cash or of phased under At

Our share tangible increased by also value book XX%. per

reinvestment. strategic there which available of weighted the yield X.XX% in benefit, invested after-tax the sheet repositioning our funds investment of proceeds proceeds for reinvestment. on $X.X a generated were that with The in securities resulted of portion we we remainder X.XX% securities the tax At available the the sold executed When had billion X.XX% reinvestment the securities remainder cash of for purchased we that, the XXXX, an securities a the billion of at billion time day, and lower same $XX.X $XX.X the billion. of approximately available-for-sale for of on and impact remaining from including the Of yielding of hedges held portfolio. We sold the including with impact book average was time. Including value coupled federal the for in the securities approximately rate billion cash. investment blended the value, XXXX, of that market balance $XX.X the proceeds a book loss based $XX.X proceeds invested the of securities, $XX.X On of billion investment investment curve of we of TIH, investment sale sale yielding investment a billion hedges. $XX.X and new of

of create shareholders and the repurchases. capital to for banking and from our earnings As industry the quarter meet the sale and significantly the These capital dividend replace completed liquidity importantly, via balance core to sheet actions ability contributions. TIH's for quarter share the Bill its of proceeds and the increasing during franchise the accelerate repositioning our return TIH to second Truist standards expected to in strong to reinvestment completed during capacity are mentioned, and grow

or share billion turning highlights X. our performance per of $X.XX loss after-tax items: investment following from of of on impacted billion to share Slide common to certain per a $X.XX FDIC from available billion $X pretax of pretax or or The million securities, net We the $X operations income was expense common quarter net per available sale the operations $XX pretax GAAP net Truist income per second Foundation, $X.XX share $X.XX contribution $X.XX shareholders per $X.XX on Now $XXX net share $X.XX discontinued from a to shareholders included or continuing continuing key XXXX reported per loss million to adjustment. This second per $XXX $X.X a related $X.X of loss quarter special the million share. after-tax assessment available-for-sale operations share. billion or or to by and charitable share or

basis, or billion pretax available on of per the tax compensation, by a per TIH common discontinued Insurance A sale share common share $XX of items. on expense gain income the so $X.X adjusted per income of $X.X accelerated million impacted share Holdings, after billion was $X.XX we or reported billion of share. per or net to the operations $X.XX recognition pretax $X.X or $X.XX to shareholders Truist available following Net from shareholders to after-tax $X.XX an equity-based due

related pretax to noted, of charges per the $XX million In and Approximately we income shareholders negatively just share. negatively and were $X.XX The also $X.XX by rationalization. charges quarter, and impacted the to which restructuring I $XX EPS net with adjusted associated expenses restructuring had impacted addition pretax to of primarily these or closing in charges were divestiture operations items from million were related totaling share real common per in recorded other tax remaining and severance to the operations TIH. legal continuing estate after discontinued

X% interest a basis. losses adjusted like-quarter income. due and on approximately income revenue, the expenses relatively X.X% Adjusted in to a available securities linked sale investment stable increased were increase X% the Total net X.X% quarter, down for quarter noninterest but on for linked increased

repositioning sale ratio the I sheet by and basis Our points quarter the increased discussed CETX XX.X%, to balance earlier. XXX TIH primarily reflecting of linked

basis and In charge-offs loans remained points linked our both relatively a on a nonperforming quarter basis, linked-quarter stable, on X net declined and addition, basis. like

primarily consumer by sequential consumer in Slide portfolio, capital demand. driven to Other balances, loans decreased portfolio markets $X include Average least growth at lending and to loans a modest or decline X.X% in due increased from our on indirect at billion reflecting specialty to decreased average which client weaker XX. loans or mortgage experienced benefited decreased Finance. X.X% overall and balances at residential a and due our our seasonal C&I part the demand In Moving commercial X.X% auto. billion units, $X.X strength in Sheffield in basis, Service decline activity. X.X% Average runoff

client Overall, demand in loan the third expect remain we relatively quarter. to muted

growth decreased quarter savings represented noninterest-bearing XX% deposit deposits Average trends deposits noninterest-bearing Average Slide decreased during by X.X% offset total of of broker to XX% in and on sequentially deposits, compared unchanged to the declines Moving which and balances. market was money first XX. and as time XXXX. is in X.X%

first costs, increase slower we than albeit the quarter, the During experienced at pace deposit in an a quarter.

increased to increased XX%. total which a total X% in to resulted points basis in costs increase basis sequentially, in cost Interest-bearing a interest-bearing X.XX%, our beta beta up to cost X% Specifically, XX%. which resulted total cumulative deposit points increase sequentially cumulative deposit our X.XX%, also deposit deposit X X

income net Moving interest on margin interest net and Slide to XX.

quarter during strategic equivalent income linked taxable X.X% to repositioning interest due the the net quarter. quarter, sheet million, the completed or increased primarily For $XXX balance

repositioning remains improvement basis Excluding Reported to income a to quarter due average net partial sheet impacted point relatively basis on This to relatively in of basis would repositioning, helped linked-quarter to balance our from X.XX%. deposits, estimate sheet increased focus We of investment XX been securities a was XX declined portfolio an the basis sheet balance rate on the quarter points this on to due primarily the stable on QX. our the neutral net comparable less perspective the our average balance interest The drive as we positioned primarily client than impact impact yield interest that have interest X.XX%. linked expected. which a repositioning. margin our

lower M&A primarily and associated linked income or to from noninterest was which noninterest to income, the losses Turning decreased on Adjusted due quarter. The $XX $X offset mortgage higher decrease banking with charge trading XX. balance was quarter performance trading This Adjusted strong increased declined investment X.X% banking lower basis the to loan Slide partially noninterest income. the higher as fees, and on sheet million partially attributable to repositioning, first by income, by quarter relative first our wealth by and million on trading offset excludes fees. income were which and other and equity syndication income. like-quarter income, income a deposit other investment partially higher decline banking originations offset X.X% service and lower management

and On year-to-date a nearly trading period the in XX% investment basis, is same banking income XXXX. over up

Now recorded FDIC cover assessment expense These in by $XXX other first charitable costs, to million reflecting due increases restructuring personnel expenses and quarter. $XXX million and GAAP primarily larger in a XX. quarter, $X.X expense increased charges the a noninterest to higher I'll were fees. offset to on special reduction Slide due lower merit linked increases professional expense donation. higher billion of Higher related

Excluding these amortization, and increased fees. and X.X% impact professional of due intangible the personnel expense noninterest higher to adjusted items expense sequentially

quarter On in million expense our like adjusted continued head discipline. expenses a lower declined X%, basis, count reflecting to or $XX

asset to quality Slide Moving XX. on

credit a on our quality and quarter reflecting quickly to resolving and strong proactive both problem loans. approach linked culture like risk Asset stable remained basis,

reflects ratio seasonal During to XXXX. place the decreased to declines in half the decrease net initiatives put basis derisking for the net points. charge-off lower and The normal quarter, of in our quarter in XX quarter basis due second charge-offs losses second certain consumer points X

performance, it still net credit exceeded linked resulting Our allowance. our loss the our quarter, in to quarter build stable provision reflecting declined slight a charge-offs for overall $XX but loan loan million loss

fifth appendix reflects ALLL stress and normalization, sequentially remained loans the X credit which the Our quarter a stable on relatively ratio basis increased Wholesale and loans. total points X.XX%, total data portfolio, increased while to in sector. normalization just up which delinquencies billion. office quarter, our Despite point unchanged in linked for declined loans points ongoing year-over-year, XX is office $X nonperforming $XX.X on at basis Included basis. of linked our to consecutive the X billion basis criticized quarter virtually is updated X.X%

reserve quarter the classified X.X% this to March at X.X% with did in the XX. X.X% portfolio continued we However, our office X.X% increase is Approximately from as currently during reflect of to sector. compared portfolio on our stress nonperforming

the prevalent loan be of the within XX% these granular, balances housed in office support Community Approximately and paying portfolio accordance sizes overall approximately our where loss XX% of wealth with Banking more our is terms are of is more original loan loan. lower. and Notably, segments to tend guarantor

is expect remain be identifying in reserved, our in size that We our is sector portfolio position this to portfolio. believe and stress of in well resolving the office and to proactive and but manageable issues very the

organic Holdings the Truist generation securities driven capital now available-for-sale increase Truist XX.X% sale CETX of Turning was addressed the capital to on Slide The March to XX. earlier. XX.X% ratio sale partially and offset of during loss quarter, gain the certain from on I by which Insurance the increased investment was on June by at XX. XX the at which

test was in evident Importantly, of growth TIH to sale and positioned evidenced the weather to shareholders variety late capital banking well consumer which economic recent by in a stress creates Truist is of significant buyback pursue results scenarios, June. our Truist most our in businesses share wide for program. capacity to CCAR and our to wholesale return opportunities as released

Specifically, lowest Truist peers. rate erosion the versus CETX lowest second C&I loss had the and rate loan our third

leaving basis well our points XXX minimum grow buffer our and capital than our higher At improve XX, return to to to capital new sheet basis X. October balance regulatory points us will effective of shareholders. positioned both ratio CETX XX Our X.X% stress X.X%, was June by

level of our XXX Slide basis or points which capital liquidity as updated capital Our game basis guidance increased CETX our capital increasing ratio estimated is XX. meet updated points industry III standards new for XX proposed And above under XX, the and accelerates minimum. improved rules Basel review ability our now guidance regulatory I X.X% to June end in at will on to

we adjusted the second of $X into expect X% X% of revenue increase to billion. quarter third from Looking XXXX quarter revenue to XXXX,

interest quarter, net sheet impact third on in the X% income the completed of a expect primarily We May to full driven X% quarter balance to repositioning by increase X.

to due income fees, professional on to X% relatively marketing and $X.X noninterest quarter higher second a to stable the quarter expect remain costs Adjusted software linked We of are expenses quarter in expected the third by in basis. costs. higher billion increase

For the to in expect be X.X% now X% approximately by XXXX. to We we X.X% revenues full year revenues previously to to total X.X%. XXXX, decline down expected

slightly Our of and interest year. federal partially updated offset lower better now our which of balance updated on outlook by funds performance, November client based demand one in this loan reduction in assumes client rate the deposit rates, is just view

Consistent expect to remain $XX.X of adjusted over expenses adjusted billion. with expenses our full previous we approximately expense outlook, 'XX flat year XXXX

In in to net we about XXXX. expect XX of charge-offs basis points asset continue terms of quality,

As share Bill year are for mentioned, $XXX of our million quarter we the previously share the of in June. part of late as remainder per approximately targeting authorization repurchase repurchases announced

in a to or XXXX. tax Finally, equivalent our the quarters both effective basis expect XX% and we third XX% rate on fourth of approximate taxable

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

William Rogers

Thanks, Great. Mike.

capital and deepening asset progress And and capital accomplished sheet and buybacks Insurance our enhancing quality. the of and priorities experience divestiture strengthening strong completing strong consumer significant up made results and really quality underlying delivered, risk and I'm repositioning our demonstrable on $X and teammates grow balance while these quarter, momentum the businesses proud during earnings, and actions maintaining through controls of the via and digital TX, to returning We quarter. during top XXXX the to billion our relationships to sound Holdings all our our which metrics. capital clients, dividend. maintaining announced while unchanged. return authorization All also solid recently expense include repurchase are was via common . These So asset common common dividend, shareholders capacity wholesale improved share of for our shareholders priorities our with stock. They our created growing our discipline, strong our our core and this to included of Truist

In positioned wider stronger economic balance of well rate addition, an sheet range even is significantly to and interest our environments. weather

to the in expected dilution result will in sheet quarter Although our ratio. completed earnings our term, TIH's return repositioning of near-term the increased that we tangible balance level capital on is the during equity replace to common recognize average near

As I've exactly said ROATCE starting a that. point. previously, is our our starting point for It's

We're going have be and improve to to not to our meet leverage on to impact We're our move deploy long-term capital, in to company, clients shareholders. going expectations returns. with a that rush positive pace not do our capital short-term

profitably. year. are client We of We'll we of is understanding a centered say we to that Truist. want you where profitability I product have potential to of plan win, deepening further the not verticals we existing progress that as of share on of look clear and relationships working and at but to exist this with win can where the improvement through only I'm want much that we more our encouraged remainder towards already lines

penetrate our ability and existing investment commercial, grow by delivering footprint the core great platform confidence have specialty banking investments through existing We further existing client banking our and new areas. consumer clients and wealth in payments, to financial and success our achieve given base, help business our ongoing our

products. client last business number greater with significant key our lines. in Most wholesale, clients, for over we've only of experienced but is recently, we've verticals our heavily invested years. and We've where bankers the made share growth in increase banking the in lead opportunity and not have product across see several additions invested across base. over leadership and with an In roles industry within verticals also clients in this industry also hired an These area as trading mind have our resulted payments many we existing in key investments investment our time, platform and several new

and risen compelling teammate talent very additional to high have a have and our primarily who our Many this challenge. focus, strong value purpose-driven have thriving we We of high-performance institutions wholesale, expectations new And in culture. experience a proposition. teammates in are hired successfully clear from have larger

represents adding focus regional continue middle market largest segment, within to one plan business. with opportunities talent our the our specific of on commercial wholesale growth a out further in We building lending which

will to client existing investment really to focus support which corporate We're momentum. discipline, investments management. also on In the technology risk encouraged We investments in improve our fund experience primarily to and improve that expertise. banking expense these is I'm helping and making consumer, adhering industries our coverage also with while

by production increased Net as scores again to the Our checking was and increased XX,XXX quarter account checking production, added improve consumer once attrition as internal continue net evidenced and we business client new second rates. lower new positive accounts. satisfaction in account primacy new

in rates and Importantly, we're also attrition increase improvement seeing new account account year-over-year within primacy openings. usage and

XX% As new quarter, mentioned, a increase. which during accounts nearly digital XXX,XXX clients including we through represented our I XX,XXX the previously new-to-bank channels, added

business is increased In openings, stabilize us a new resulting over average of digital in excluding in will applications addition pipeline improvement an In openings third our up residential across of runoff mortgages, linked year. funding been business our balance consumer Consumer balances small the we've quarter XX% quarter, second and giving consistently in account In small we're in XX% business with the quarter, to lenders in increase XX% seeing small also the confidence second our lending, adding last footprint. account that in increase the quarter.

future. pleased we conclusion, as of with at there's a acknowledge in as work produce I'm better do to to but more results we we've company made In strive year, the this the the midpoint progress

our momentum company. tremendous have within We

We our our teammates. with momentum got we've and clients, great have momentum with

the amounts the unique core incredible am to and purposeful financial specialized capabilities We banking form next optimistic significant teammates our of ability about that our Truist. years I our grow an think repurchases shareholders business, increased and position clients several future. value. of in our forward and operating a our energized, franchise, return have We our capital company for our from of profitability share look is strength. I factor to the dividends differentiating to over

I didn't and our all our focus forward. moving And company I'd of thank purposeful and be remiss great leaders for their and incredible our productivity finally, teammates incredible if

Q&A. that, me So let over over Brad, hand for back you it with to

Bradley Milsaps

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

Operator

[Operator with from Instructions] The Ryan question today Nash first Goldman Sachs. comes

Ryan Nash

to next restructuring, up Maybe off the get you bottomed growth a could expect next with I margin now follow-up. you Do post margin improvement? start you quarters? sequential think feels you NII. over It about we And the But term? the do can should quarter. have headed then over step about drivers and of the maybe NII few where just how a medium talk be And

Michael Maguire

completed we we to expect X%. impact we back of repositioning full to next that the Really, NII is our that Ryan, by improve quarter that in X% do the May. comments by the mentioned bulk of just in quarter driven the

well loan there some as expect to continue as pressure We be deposit to balances. client on balances

So touch second conservative on and a cut first the that nice deposit And November that sort really of story you kind maybe just really the a core helped nice same, We about think the mean think But say a rest stabilize it the in. in QX. but there. for we've that bonds. quarter little a further, cut, got the is client NII think did ex kind it's outperformance that's have some of of pretty QX to of balances, some which I just of we out trajectory, more touch, if looking right? mentioned late. We year helps just I

the expectations we've there. So around modest got impact pretty

be this on for NII well. some what I been And very LOB everybody balances which itself. that in the the you've segment activity. -- from the this, think last getting and company, always on client I increased generate opportunity as company mention stimulate will of presents and getting mean pick the think, lot I just will It's once others really of is around -- of will just heard just focused And this demand not really, it I we're core improvement your week, growth us, realizing client focused side balances loan there hopefully some very or has a week

Ryan Nash

Maybe for Bill, it. follow-up comments. or as Mike's one Got this a to Mike

are be So getting it to a the loan highlighted you're XQ, fourth quarter. it you're muted. expecting looks sound Mike, balances in that like lot was like you And of doesn't closer expecting my off, to level growth but it interpretation

So Truist maybe just you those given it actually further. positive? turn expectations little you do of do you guess some begin outperform are? flesh do a when the drivers your footprint, What at I to the strength to point? growth Bill, to think peers And expect expect on

William Rogers

Yes.

coming. I I'll first, we But feel the with can on in second yes. me -- are the that see mean conversations. the Let to to start our is answer of that have it that that got has sidelines. Clients part and growth. We've to sort of

increasingly are strategic. more a conversations Our lot

feel sidelines. thinking. know bit our we on I clients are even actually like But the they're So about a what more

up. was production Our

really a also absolutely just was Utilization So was up but it up. we saw flat, where more is in were paydowns It production probably being consumer, little significantly. up. best

towards mean, side, So really is And I the markets. accessing the in rate that larger capital our that -- are you on our news the capture in DCM clients in were high. is, our mean, good banking, they our see particularly investment we're I results. that really,

the in and sort like see putting to a okay, sort up, production about . Despite the lot uncertainty a I just Ryan, on world want being mean being stake of of ground I part return other it's saying, at, market. careful, of out pipelines there's week So to there of up, be X. the and we going in that. in I mean, this take the the

to have than anybody. So spring, while position capacity, we're better coiled clients go, ready

and -- going in that's I if part just I come strength. to and realistic question, And latter think your think when going faster. markets, it's I and grow to of back think back when come it but should disproportionately that want when your the some does, we well, about when we're we to best [indiscernible], be to with

Operator

next The comes Jefferies. with from Ken Usdin question

Kenneth Usdin

a of yourself as to of not methodical been you guess mentioned that that get Bill, near I term. line just kind use to thought, you'd follow-up and

you to is little So that I'm there Talk that growth. the on of just the then of loan and of excess wondering if you about of can kind do buyback prioritization just kind related out moving gave one would the how we've more choices color leads all on terms what lead of done, the just more the the remind a again, into that got specifically? buyback things us now restructuring other than kind ball pacing I in your now capital

William Rogers

obviously, Ken, something we Yes, we've capabilities. we're franchise, business. We've And in X a got question. positioned. market. important, and is calibrating invested that's think our really X, great mean to We're I priority X a be great well and talent. growing going in invested great We've

got think to capacity So our capability the I and we've business. grow the core in

to going the most way absolutely focus. is be primary capital possible. that raised efficient So We in the

raise for to in that long-term And we efficiently raised just most efficient make benefit our shareholders. also want have than we we more deploy the You capital. possible couldn't sure how it that way

going that's dividend. top would in together but kind a of put strong for same next really kind to of $XXX I outlined. year a the a enter pace quarters. -- So remember, couple compelling also do the with million Mike what we'd -- we've think of We're on quarter we've about of return I of same next presume got sort perspective

have over terms next returned in I months, a dollars the X really shareholders to of total proposition. compelling value mean, we So

one capital growth. want we calibrate we we're don't on and that as going go lose along. have to incredible for So to this We advantage over-index

Kenneth Usdin

enjoy this incremental see half quarter, quarter as at secondly, how context in and to pacing new quarter calibrating but are in does NII is flat fourth a the to making third of those you third also expenses and then a the guide flattish, higher. you're revenue overall going better through, like in it flat, expenses just be tough look that of outlook benefit, seem investments the Can implies kind like And it. you the certainly of terms it second give Got little to us in bit increasing.

Just your areas pacing that could the mentioned wondering spending investment if about a provide your of you context you to earlier. little underneath

Michael Maguire

Maybe Mike. a it's at Ken, swing one. that take

I see the the side. growth on we quarter do look, right. mean, in You're we expense think third

that touch first focused that's growth a maybe half of discipline think and about following the on close to still that marketing flat, and flat, through commitment still maybe cost on were And I you very quarter this the as well. sort basis, it's I perhaps and sort us. think the if delayed, even a Midway frankly, fourth -- we whether year, that's touch some of of drove to implies, on our even gotten a were think you I better. like of in quarter. mean, be the Look, there last flat been around some projects, name and maybe it important mark, in that But the have even spend, nits to nats certain we've as it, beat of

of a some ton of And just makes sense. that stuff so

shift that the in really a lending, are of an doing factors et Bill example, market we our middle some of outlook around business, as our we're little our mindset his hiring as the around remarks talk it all -- cetera, about and driving for you And calibrating these second are spend, and half. prepared some bit in marketing heard payments

are and being to this look, X.X and this And fall, really confident we've year. last expenses committed so very, we said sort on better very we or of feel since

William Rogers

those last were mean, that. going sort And Yes. And out, made made in we in investments payments, this talent. of and as of in year. always Ken, this investments clear I come that. when seeing I approach quarter-to-quarter. the just was mean Mike we undertook benefit to pointed I we're to include we fall investment of, mean the of the timing add to really the

expense the really So discipline coincident around has I'll with both guidance we that the the always increased. think it's have in just because company was of say significantly I those important, that.

have strong So just we the with expense where the incredibly discipline around confidence. we are. also a the sort opportunities to lot know of next invest and side And dollar of

here. committed for a or this year. said, And wholly right think the better as got to expense remainder the I So we've balance flat Mike of proposition

Operator

Piper from Siefers comes next question The Sandler. Scott with

Robert Siefers

are you to relatively neutral know I moves. Mike, rate suggested you all

of for anticipate that to worse, lot still closer sensitive a among kind you kind in would think NII or the rate timing side another factor. cut the of investors the affect consider your a year, I of X But the us X equation. X that be better of overall vein, the remainder Obviously, In liability would how just of or on guidance? curious just thoughts?

Michael Maguire

earlier, help the our cut in that. That the cut does path be that -- benefit down baseline maybe we I touch rates. a maybe has call a -- have than would we got look, December think it, more We a a X curve September and Yes, Scott. us. November. so Yes, do today from would be If even for X show we

think given and We're are we Ryan earlier of how I about the to the right. trying how brought I you're up high it and late question, get think we asked first think But and there. I my thinking cut, in question, just that expected. be sort reasonable we'll I that benefit

got we would a if think then guide. that be perhaps and one I second, maybe good a earlier

able this, say given observe. we've behavior terms of think will and that how some are we're the where we here high of client been long to I just in we are I and how

of I impactful growth and think more growth demand catalyst that well. deposit some loan will balance client again, as be, the and getting

So would take it all.

Robert Siefers

Perfect.

could address least but you at down maybe quarter, you still overall then the as rate, Okay, I for a speak number. I if in above touch hoping be sustainable second. on banking you're the what switching investment see base you sort able gears, very on a consider revenues to say a And run or thoughts I'd little thought of to line of sort might strong just the recent you still maybe all? outlook of to and so a good. a then might you was well Maybe

William Rogers

be we're sort fees M&A mean, of one is business good [indiscernible], our a a impact investment first highest feel momentum. in most variation. company's going But quarter-to-quarter had bit. of quarter, I of banking we really that the I to about always little the Yes. that changed the of In the history, so

ECM, in And runner, from dramatic fees past. where active leads we've relevance, there we're book transactions importantly, doing in lift relevance. share and market things of we're a runner half gaining change So The the of that lead transactions really if category. most share. in look been terms being good in mean, of virtually just and our in our were from increased I at active you again, Lots sort every of book left

the and about and our just and capabilities focus upgrading talent about our of kits talent comment sort to back of So is comment adding commercial bankers' tool our exponentially. understanding increasing

mentioned, clients, So strong. dialogue, our really our with is I as

the dialogue strategic mean, of in versus able is think is which for continue good. think kind the ought all I year, It's momentum to balance And the to I I really dialogue, product banking. be we investment this of

that. So I good think feel we about

Operator

next Najarian The from question with comes Erika UBS.

L. Erika Penala

everything putting you all Mike, you. to that one maybe said address Just together, this

than interest the both net margin. consensus, net Your income was better on interest mostly

to items are the and heard partial low balances mentioned I line beat interest help. a you have is September the quarter I I then I if and your get bit X, And than side. at your consensus Because is standpoint, maybe year? in pull-through down more consensus impact starting rates If on look come income, very at one. guys it a down both your in to feels a margin of month for end rate standpoint, a guess, margin response in on conservative of shape from But higher you like also little little Ryan's items about a revenue quarter and conservatism third range. from consensus you what at deposit neutral you the point second terms guess, to pull-through the are you restructuring could your accomplish is being and continue on expect do is there you the the missing? will in net business in from a better. question we that which to what the loan but bit the of core good You half of I the to balance the sheet noninterest in are the

Michael Maguire

there think on Look, question. average especially beat look it in mean Erika, I if you Yes, the I an a second at appreciate was the I balances on basis. quarter,

touch And was rate so our a better thought. we than paid

April. we And be than starting have right, better in so position of sort you're expected to would where

and still in believe I paid. pressures the that in we rate we second quarter, third, will persist expected think in balances the the of especially terms

well sheet. while interest a this net on like get is we of from of margin is our the recouponing, as balance just piece Another on the benefit some smaller benefit bonds, did that some

did, paid third basis. through we an on will some come second the average in So that down in wholesale example, for we the liabilities late

a improvement, non the lot see balance cut it So two. don't rates, done a we'll thought interest We but I we've [indiscernible]. we're . On on or efficient, you'll smaller more will the get call more about think on net first benefit margin conservative, what want be lot, sheet. We cautious it I on ball a on to of and -- analysis. work

have of times, the said last, I've think that's thing look, the of fine historically we slow, years, our a So thinking, and the gave. I feel XX in this betas couple the You us, the sort at cycles over call it, about down year. rest been of And for the think for we look the right? I too, guidance

for that early what be would really on will then the perhaps, activity, and not with that's maybe loans. ability come the through would been little on volume to more I we've be are client of more a cuts get pull loan and and seeing you cut generate mean, upside deposits deposits, such you Scott's maybe hertz no obviously just I get think balances, feels that good. both extra bad the got pressure a we've and us that guy bit and that

L. Erika Penala

and the on XXXX. capital reading it. maybe tea investors because billion I'm Got is returns. And is Bill And leaves second in for for just my authorization the through curious the very question are $X much too

I timing know the the us billion for and conference are investors that you You [indiscernible]. the said during during initially, with already what's had remarks guess in timing, wondering I ROTCE had achieve prepared this priorities. initially more you returns, about fulfilling XXs. season. out, someone were details fall high-teens together more you your that potential tell you'll asked And $X in -- being if ticky-tacky, TIH But target tell like of too and and about remainder Ken I'm an and said $X will about [indiscernible] you probably I'm the sure still billion as of me With low year. capital I authority? I And asked could terms but get think But know for franchise TIH a

William Rogers

year. of the to just of year thing. this the flexibility give of authorization through next the said to start to we'll how that. think make in Erika, to sort of sort Yes. and reason terms us put it kind about just is of 'XX remainder $X The billion correct that and We one we up of through

disciplined our franchise, about going and we're see we where calibrate to So going to our an we're that opportunities invest in to against and be growth it. ability

I then remember, and mentioned strong this earlier, -- as well. with is So a dividend as really

I of you about the return terms one other without in total talk So to think about talking shareholders. can't

have to really return certainly buyback over and to the term medium quite significant. a good shareholders dividend capability the is term from unique near our actually think I So

business. And then our grow top that, ability and earn put you on our and earn of to profitably

-- we're of all to big this that's think I in the mix. at So trying look

our specificity Again, the start to guidance towards end the have on that mentioned. specifically, little relates the more we a the numbers, past OTC going you now. we numbers past of of of to more model give that sort as mean, yes, from it we're a As to business year, with little have get as I the we

knowledge we sort how [indiscernible] well. operate picture think overall of to I those of where all requirements. little put and complete, better might CETX have might from a may not more about what And the it while a be have to might of think and be to together capital relates we'll that think as we sort as mixes we'd I growth be base as

growth the a target, compelling proposition the think, of itself, Truist. irrespective really to the is So for target I

Operator

next Graseck with Morgan comes The question Stanley. from Betsy

Betsy Graseck

RWA regarding you're It fair stable -- means year, But the need of roll part, we like the That highlight put conclusion you question last anticipate you going we where for a that on follow-up and there. a -- to of million the you've Erika through the know you're quarterly CETX a guess most I the is [indiscernible] dividend. to bit you're at looks it earnings, least of this probably change. not is didn't rest investors, of what we earnings doesn't out $XXX that returning together Capital and the going I'm got A when to for looking buybacks to for put rest capital this target put today. as out. that should is CETX the that rules essentially that I year?

Michael Maguire

Yes, Betsy.

I think that's rough out.

reasons while could sideways mentioned. us see sort for for sliding the a of You you

at buyback it, just approximately million CETX mentioned right, rough expect this of you're mean improvement this. I or or the as $XXX earnings, to we million $XXX you right? if target, significant ROA don't period. well. is decline sort I I'll over dividend, mean -- so and right. it you're call you referred take Bill And the say You're and,

ability there. in the think of to world, level I with like capital think of we operating world. think, the right, and just about and a us One, resiliency to things sort to a we of couple higher today's Affords strength one. react

I that yes, term. WAs -- our short us about sort the you with And feel that Bill on focused across prosecuting. then can to whole our think flat that's how next we're We're especially but we've and mentioned any that thinking return the is expectation we Importantly, got forms. growth But again, agenda. of so capability grow a -- it. to That's begin company. really modeling capital, frontline, come And various we'll somewhat and various in But company-wide year.

Betsy Graseck

the down in -- folks capture majority the on and paydowns in business. out In book, then how Is words, And recaptured are that Right. you fee are we line? much capital C&I paying the markets of if other that experienced did in C&I. terming that the seeing you

William Rogers

you the a and lot sort our one time. really spend overall a thinking that quarters to about line. hard long of was if of This But calculation Yes. do at best It's time sort of in DCM of look it. we perfectly

gotten high. and our And takes was to because It's what that capture put rates there the that you've otherwise? related DCM So high, growth. in it are really and overall percentage really puts our are it's this, hard exact or it reflected other. an the to and it's on But

Operator

John question Pancari with The comes from next Evercore.

John Pancari

office a terms and added seeing of that on what was little What progression? of credit modestly much touch I credit the there I terms your you're just seeing reserve know weakening. are in loan like loss areas seems wanted to was you're thoughts the side. to right bit. it like in of get now the on that some What looks you

on nonaccruals. point? this to And see pressure incremental the modest stable delinquencies and some even or that from it reserve here? Or some you from justify had could You could additions releases

Clarke Starnes

John, is this Clarke.

Bill were As said, losses a NPLs touch quarter. quality Mike we area. and stable were the with flat had And our we lower, the We delinquencies. very particularly consumer had asset pleased overall generally in and for the

the the down, in the So for inflation occurring see higher and particularly the that's rates, stimulus consumer to we still burn normalization lowering due consumer. side,

make you're quarter's And right, there. CRE to side been even we're little the for and We little in careful bit a we reserve. on this exposure, consumer we've want uncertainty lower-income there office then So just sure those addressing areas. a the added still finance

though lower like C&I transportation, to We've areas. we're spend had issues not discretionary, On today as we Bill sector actually senior more some list care, wholesale monitoring of areas those the side, watch rate-sensitive the big more and had book, consumer said, leverage episodic. even any

So about and are what we of feel reserves, today, the about adequacy we we today. think our where good when it know reflects we really

that relatively a for unless like of areas stress substantial economic change the 'XX CRE stable. expect in remainder outlook the levels level of reserve our of would there's to office we would in uncertainty or higher, So emerge be

John Pancari

Can the quarter. separately, mentioned you talk outlook about I terms And progression fourth Great. know on noninterest about think then for And the in fee income part of you third the you 'XX. you effort stable on solid Okay. terms talk banking the you've intent revenue the cited the Is there about made. and progress separately, you're into made quarter and side, can investment fourth side, some should that, even upscale to a then we to just Maybe us how maybe the focused bit, little ongoing? talent pretty relatively into a you've investing investment business as and of quarter is and you acquisition, reach the and the that just build-out business there in what banking maybe the of that anticipate? breadth more long-term the that from of contribution business the

William Rogers

Maybe then it the I'll you and okay. over with Mike, I'll [indiscernible] Yes. that's to latter, turn for start

build-out investment business been the decades So plus. of the has banking

this isn't has sort so So been it thing consistent. and of a new

build continue it way the right. think where have to we have I is described we you We'll opportunity. where relevance, exactly

our we so and And can be competitive in win markets.

business. part the we're though missed the I around the is investment think that gets investment banking making

commercial making our that are them. we're investment the things market and to our about to that the talk teams to with middle knowledge expanding is So clients their this and teams and capability available

those equity flight so our owned And to discussions commercial private the be think that and in amount along clients about relevant help are and our in capability of now that the business path. them

pace So I investments that the good We itself, like but growing. had CAGR. we're that And everything and in really not business in we've just surrounds a in the think it's business support the of.

the and that's pattern. growth of that sort at you'd If you say back a sort CAGR good business, of over of look go time really

it which we're profitably, doing Importantly, is also important.

of want want market. on have we with I keep than faster do efficiency all want we a We have sustainably. the business, certainly to the that check. want really our grow in those to coincident don't And opportunity within We it good basis. So mean, to profitably, we a we to want of we to that do grow it markets. relative and

So we little to variability a to want have business. less that relative

core the particular Mike, tied capability a it's of to vagaries So client market. more there was than [indiscernible]. our of

Michael Maguire

half about us the second the for fees. think Yes, you trajectory asked for John, I

puts -- [indiscernible] some to know and you take. think I don't

is stable, for it really so second call relatively the outlook half, stable, stable. Our

William Rogers

to business We're upside is has I upside [indiscernible]. been. is approach mean what the with that take know And we this right to Yes. now. trying the an

Operator

from comes Fargo. Mayo next question Wells Mike The with

Michael Mayo

next Not in a it your ratio quarter but how goes maybe and mentioned and any or to higher you expense back new efficiency for and preview question, third year the your guide, the context, that. XX the that fall in about story operational OCC. And thinking that's on of you're partly the risk short Bloomberg to according banks saying out XX there's a large

mean? clients if Bill, specific is and confirmed say not regulatory that communities. bank position operational know Are that's if what your you know you by what and I deficient that you are. rating, in you your I been know operational what you would also purpose I open risk note, your and X worked ratings past years. given, no did to Would say mean, you're I OCC. companies through. for or But the your had that some to Now allowed any the that There's every issues day don't would being ever have And not employees mean? able that other it a had in

priority. a So I put high very know as you that

efficiency to has the that the years? that hurt drag what on And a few still be past could going efficiency degree ahead? in So what degree

William Rogers

Mike. Yes,

going I've You very consistently formed invest Truist we're this a actually And risk answer on. with since competitive. our it part expense will We answered appropriate risk invest profile. so -- part what is the stay our coming question We're regulators. can complexity coming day our relates on to of to your was stay the and of not But and said always going framework can look, of organization, asked framework. size that's durable in to in we been and as

I'm in think, got I remarks, in that always I So think consistent has mean, with even And everybody to today's mode. prepared stay I that. I think

on irrespective of was there creating profile. a of anybody's just Post year, durable an of March increased risk ratings, last focus

and that's there be So Yes. being term go can't valleys our changing our think business of a or of that in it term. opportunity. just increase durable, medium Absolutely. sustainable the we're up? peaks the also a going framework see mode. that I price in of creating in company of that term, Does to and -- importance company I mean size continue Are short the our you long risk for to as and a proportionately? I that's

Michael Mayo

cap billion $XX market for relates last size. of the the question of Well, answer to company our part a is your

the degree does framework just to than your that an I'm risk hurt Truist disproportionately banks versus ongoing that investment wondering, in wonder it's what size? So And and has larger changed? how

William Rogers

mean I Today, where in and about, talk the efficient are you efficient a Yes. to on to frontiers like like they place. I the [indiscernible] is frontiers they're that frontier Mike, way, we're relative that. good I feel are

return we and So that to should make company, size have and our that. relative our ability in good we're a company terms and an efficient relative need the of in place to to investments our

But I good think a So we're at place. that efficient moves. frontier

we're moves, and the about that of So -- you it where conscious think that. always of flexible be have context to and in

our -- size place the of we at to sort to mean create in the but way, going and risk complex, a companies we didn't project a I because the kind scale in to investments and a last company the that was to needed of thought going the platform of be March good seeing needed. we merged year that, that So was were we're durability today, fairness, of feel complexity place. understanding like needed and we . By and I be different and more that we

does efficient at on a think we're but that place good move. So it, frontier, I it

Michael Mayo

record banks of peak year. don't as NII, a of but guidance XXXX a next sneak operating mentioned it quarters Can give now, relates as few good have financials? The know you XXXX. lower other I usually And place good to expenses definition place leverage, last, short it you us give positive for follow-up. from relates to

William Rogers

Yes. I the mean, now. momentum creating our right peek of we're sneak

Mike, And So we sneak do to and talked I've that. peak. about want that's that. the to you continue

We have a leverage. operating strong focus positive on

on over that build controllable the what of over that is right The plans expense our operating on -- they controllable positive more side have factor focused are try businesses all That's leverage. to So, time. that really the to next pleased year. opportunity with making we progress will continue better expenses and have to the kind going I'm discipline see and now, revenue in we're expect of reflect that Those forward.

on So but And building think I also of we're that be order momentum. this got confident guidance our is creating is rest assured of that focus evidence we've that. that, a of good evidence good the be year And that. for the

Operator

next of with Ebrahim question America. Bank from The comes Poonawala

Ebrahim Poonawala

follow-up, to quick Bill, on response a your question. Just Mike's

line equal -- next should expect think of in about assume we make is year, want I 'XX. we sure of as revenue of we continuing As top taking higher, expenses this billion sort growth? to understand rate -- the sort correctly, quarter momentum to we Is the to ex per fair think any just sort billion in run Street [indiscernible] revenue -- like expense $X.X expecting $X absent that about about

William Rogers

thanks. I'm Yes, not going guidance expense to year. for next give

confident positive expense parallel expenses say, revenue focused operating opportunity. and be confidence that Just will more leverage, great got discipline to that the on we've we'll

will do leverage going on be operating efficient we that. markets, of in the to high has we're growth positive better our investments opportunities focus see requisite we'll if that take we're making context and returns. increase, if a appropriate then that expense advantage requires But the So all that. that company a And in that

Ebrahim Poonawala

upgrades of on could just terms us acquisition where year post we any lending coming And Maybe next the of one tech quick and in platforms the stand you if Noted. the about integration, deposit remind as or follow-up. sort think two. big we

William Rogers

Yes. we a predicated existing been is the side our I platforms factored all on particularly ability lending have. discussions I mean, continue all on have the really that's to APIs lot that invest huge mean had the opportunities as use advent payment year, the the invest. into this we merger. have, of the great really, We portfolios -- to been investments to of of our that in part

capabilities are sequenced like no there's platform over in step continuous investment. So and our one investments time. big These stair

Ebrahim Poonawala

tech a sort just done you a on. safe you peers And relative is to working assume who Truist heavy do lot disadvantage to that's not not of impression a lifting it and that more There's put from have there an at deals to that out been platform is have there, probably standpoint, back.

like Sounds to I but just case, wanted that's the confirm. not

William Rogers

we impression is seen a momentum last we've the the have Well, from quarters, really platform. the that in several good clients our

of terms performance satisfaction So and our clients real in the of scores, metrics, we that look clients, us is acquisition all how client continuing. think do our about positive things

Operator

last We from question today with Bank. Deutsche will take our O'Connor Matt

Matthew O'Connor

be if the of here. implied correctly, and kind XQ loans were they that down in XQ, a in little bit balances You bit down again a deposit I might and little heard

data when numbers, And at where growth, and like thoughts there's it's data company. been on loan I we understandable the those And you talked about level industry how bottom. more. we're given about start and small kind less little out we're much HX where it data tracking talking than where lagging people. a But bit seems in on has spending a kind thoughts just hiring marketing HX on the Just but understand of in the really going you're more like and still looking they like X% of bit little

Michael Maguire

than for relief, thanks see Matt, we quarter. less in question. first, down third the taking this we'll a little hopeful X% some quarter were average loans we're Maybe the just

down, the be and probably And as like we a again, of what in in sort of think, but but we to had is that much, lot quite thinking lower lower, some the of hopefully, saw base outperformance love be the actually, third. little the in a not sort case of kind see payments like felt from to quarter. late of not I on we end there. is That's stable expected others, about. deposits we'd that's perhaps quarter. then did second we're Same maybe of seasonality at a balance quarter, little deposits, different, some the just that the tax mentioned We just We unusual.

fourth. again, But stabilizing quarter even little third So well. in the we as the probably bit expect pressure of that's a in

the a both in then for So think touch I hopefully the fourth. in stable third down and

Matthew O'Connor

engine people. [indiscernible], helpful. the takes And things it, to got little of where the know you I internally, the think you then what's the of kind could of touch in just drive message you it out to That's there. as time about, got getting you employees? like doing And did to flip process be on you just out kind capital, there's loan existing you're But still allude growth of call the like especially couple and deposit front-footed. Like an of a kind to environment Okay. the that. switch, just of all again, kind marketing hiring restarting But

William Rogers

of it. Rest focused. seen assured you've specifically. And our there can dial sure. Yes, that highly teammates And that more are places are sort we

per over production those number premier linked up banking sort type XX% was similar of production, lending a branch quarter, consumer of Our things.

So can it's opportunities. in then about on about a it's dial about and just hiring. lot with It's that side, a the dialogue a little wholesale about lot market clients. we a lot bit It's places the lot training, a

People make So Trust let future. for no may are the have capability approach, come on as -- our the we for really it of kind could I the our hear and I of mean position. . But for me, offense. we're be a you happen -- are quickly. teammates look a activity. was are attracted defensive in all good confusion. in teammates and it the momentum. some of offense. not in our franchise them are at same seeing There feel They to pitches there we and work the reasons terms invest quite to shift capital on

our your turn. its But is direction, point in that it's direction, battleship clear clear right. communication and hard assured rest teams. I focus mean, the of So to terms clear from

Operator

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

Bradley Milsaps

That you. call. Thank completes Okay. our earnings

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

Operator

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

disconnect. now may You

Truist Financial (TFC) 22 Jul 242024 Q2 Earnings call transcript