Truist Financial Corporation · NYSE:TFC
Truist Financial — Q4 2019 Earnings Presentation
27 slides from Truist Financial's earnings presentation, Feb 5, 2020
Slide 1: First Quarter 2020 Investor Presentation
First Quarter 2020 Investor Presentation Daryl Bible Chief Financial Officer February 2020
Slide 2: Forward-Looking Statement
Forward-Looking Statement This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the financial condition, results of operations, business plans and the future performance of Truist. Words such as “anticipates,” “b
Slide 3: Non-GAAP Information
Non-GAAP Information This presentation contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Truist’s management uses these "non-GAAP" measures in their analysis o
Slide 4: We Are Truist Financial Corporation
We Are Truist Financial Corporation Successfully closed Largest financial 275+ combined merger of equals institution merger in years of serving our between BB&T and more than 15 years clients and SunTrust communities 6th largest U.S. #2 weighted $473.1B assets commercial bank by average deposit $75.
Slide 5: Purpose, Mission and Values
Purpose Inspire and build better lives and communities Mission Clients Teammates Stakeholders Provide distinctive, secure and Create an inclusive and Optimize long-term value for successful client experiences energizing environment that stakeholders through safe, through touch and technology. empowe
Slide 6: Truist 2020 Strategic Priorities
Truist 2020 Strategic Priorities Relentless Focus on a Seamless and Holistic Client Experience Ensuring our clients continue to receive the unparalleled service, advice, support and competence they expect of us Execution of Merger Integration Commitment to identifying best-of-breed across branches,
Slide 7: Committed to Ensuring Sound Environmental, Social and Governance Practices
Committed to Ensuring Sound Environmental, Social and Governance Practices Building long-term value for shareholders through responsible and ethical practices Investing in our Teammates Delivering for Investors: Supporting Communities Governance & Disclosure Providing Better Client Service Responsib
Slide 8: Culture will determine our long-term success
Culture will determine our long-term success 8
Slide 9: Two Like-Minded Cultures
Two Like-Minded Cultures Our common beliefs Honesty, trust and caring One-team mentality Driven to help clients and communities Inspired by a bigger “why” 9
Slide 10: 4Q19 Earnings Review
4Q19 Earnings Review
Slide 11: 4Q19 Highlights
4Q19 Highlights Summary Income Statement ($ MM) 4Q19 Asset Quality and Capital 4Q19 Total taxable-equivalent revenue1 $3,650 Nonperforming assets as a % of total assets 0.14 % Provision for credit losses 171 Net charge-offs as a % of average loans and leases 0.40 % Income before income taxes 879 Com
Slide 12: Implementation of Current Expected Credit Losses (CECL)
Implementation of Current Expected Credit Losses (CECL) Allowance for Credit Losses ($ B) Summary of Key Inputs and Assumptions 12/31/2019 Incurred Impact at Adoption 1/1/2020 CECL Commercial $1.1 $0.9 $2.0 Reasonable and Supportable ▪ 2 years 1-4 Single Family Residential 0.2 0.3 0.5 Period Consume
Slide 13: Outlook
Outlook Category First Quarter Full Year 2020 Earning assets - average $405.5B - $406.5B $405B - $408B Net interest margin 3.45% - 3.49% 3.40% - 3.46% Core net interest margin 3.01% - 3.05% 3.01% - 3.07% Net charge-offs 35 - 50 bps 35 - 50 bps Loan loss provision $325MM - $375MM $1.35B - $1.45B Noni
Slide 14: Medium-Term Targets
Medium-Term Targets Performance Targets Key Points . 2019 noninterest expense, excluding merger-related and ROTCE Adjusted CET1 Ratio restructuring charges, incremental operating expenses Efficiency related to the merger and a one-time charitable contribution, on a combined basis was ~$12.9B Low 20%
Slide 15: Achieving $1.6B Net Cost Savings
Achieving $1.6B Net Cost Savings Personnel Personnel IT/back office Branch 3rd party Corporate integration consolidations spend facilities Savings Technology & digital Personnel Branding, marketing & community innovation investment Investments 15
Slide 16: Capital & Liquidity Position
Capital & Liquidity Position 1 Key Points . The CET1 ratio1 was 9.4% for 4Q19 . Items reducing regulatory capital: . MSR RWA impact of 10 bps in 1Q20 as a result of the simplification rule . CECL phase-in impact of 14 bps in 1Q20 (3-year phase- in period) . The dividend and total payout ratios were
Slide 17: 4Q19 Truist Peer TBV Per Share Growth
4Q19 Truist Peer TBV Per Share Growth Peer Q-o-Q Y-o-Y Truist Financial Corp 5.2 % 18.5 % Bank of America 0.8 8.4 Citizens Financial 1.9 11.7 Fifth Third 0.3 10.2 JP Morgan 0.8 8.3 KeyCorp 0.6 12.7 M&T Bank 0.7 8.9 PNC 1.1 10.4 Regions Financial (1.9) 15.1 U.S. Bancorp (2.1) 6.3 Wells Fargo (1.0) 5.
Slide 18: Truist Remains Committed to Industry-Leading Implied Shareholder Returns
Truist Remains Committed to Industry-Leading Implied Shareholder Returns Annual Return to Capital Deployment Shareholders High quality and diverse revenue base Organic 15 – 20% 3.5 – 4.5% Strong expense discipline driving consistent positive Growth operating leverage Robust earnings power driv
Slide 19: Merger Integration Timeline
Merger Integration Timeline Nov. Dec. Jan. 1H'20 2H'20 4Q'20 1H'21 3Q'21 4Q'21 1H'22 2H'22 4Q'22 '19 '19 '20 Unveiled Truist Close and Announced Brand Visual Consolidate Convert Wealth, Rationalize Branch Identity and Branches in Non- Brokerage and Shared Divestiture Purpose, Mission Overlapping Tru
Slide 20: Appendix and Non-GAAP Reconciliations
Appendix and Non-GAAP Reconciliations
Slide 21: 2020 Preferred Stock Projected Dividends
2020 Preferred Stock Projected Dividends Projected 2020 Dividends Truist Outstanding 1Q20 2Q20 3Q20 4Q20 Preferred ($ MM) Series F $450.0 $5.9 $5.9 $5.9 $5.9 Series G $500.0 6.5 6.5 6.5 6.5 Series H $465.0 6.5 6.5 6.5 6.5 Greater of Greater of Greater of Greater of Series I $172.5 3 month LIBOR+0.53
Slide 22: Non-GAAP Reconciliations Diluted EPS
Non-GAAP Reconciliations Diluted EPS ($ MM, except per share data, shares in thousands) Quarter Ended Year-to-Date Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Dec. 31 Dec. 31 2019 2019 2019 2019 2018 2019 2018 Net income available to common shareholders - GAAP $702 $735 $842 $749 $754 $3,028 $3,063 Me
Slide 23: Non-GAAP Reconciliations Efficiency Ratio
Non-GAAP Reconciliations Efficiency Ratio ($ MM) Quarter Ended Year-to-Date Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Dec. 31 Dec. 31 2019 2019 2019 2019 2018 2019 2018 Efficiency ratio numerator - noninterest expense - GAAP $ 2,575 $ 1,840 $ 1,751 $ 1,768 $ 1,784 $ 7,934 $ 6,932 Merger-related and
Slide 24: Non-GAAP Reconciliations Tangible Common Equity and Related Measures
Non-GAAP Reconciliations Calculations of tangible common equity and related measures ($ MM, except per share data, shares in thousands) As of / Quarter Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 2019 2019 2019 2019 2018 Common shareholders' equity $ 61,282 $ 29,177 $ 28,650 $ 27,770 $ 27,069 Le
Slide 25: Non-GAAP Reconciliations Performance Ratios
Non-GAAP Reconciliations Quarter Ended December 31, 2019 Performance Ratios Return on Average Return on Average ($ MM, except per share data, shares in thousands) Return on Average Common Tangible Common Assets Shareholders’ Equity Shareholders’ Equity(2) Net income - GAAP $ 726 Net income available
Slide 26: Non-GAAP Reconciliations Operating Leverage
Non-GAAP Reconciliations Operating Leverage(1) ($ MM) Quarter Ended Dec. 31 Sept. 30 Dec. 31 % Growth 4Q19 vs. 2019 2019 2018 3Q19 4Q18 (annualized) Revenue(2) - GAAP $ 3,625 $ 3,003 $ 2,940 82.2 % 23.3 % Taxable equivalent adjustment 25 23 24 Securities (gains) losses, net 116 — (2) Gain (loss) on
Slide 27: To inspire and build better lives and communities
To inspire and build better lives and communities