Truist Financial Corporation · NYSE:TFC
Truist Financial — Q1 2022 Earnings Presentation
42 slides from Truist Financial's earnings presentation, Apr 19, 2022
Slide 1: First Quarter 2022 Earnings Conference Call
First Quarter 2022 Earnings Conference Call Bill Rogers – Chairman & CEO Daryl Bible – CFO April 19, 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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,” “
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: Purpose
Purpose Inspire and build better lives and communities Clients Provide distinctive, secure and successful client experiences through touch and technology. le sen with integ! Mission Teammates Create an inclusive and energizing environment that empowers teammates to learn, grow and have meaningful ca
Slide 5: Living our purpose
Living our purpose Inspire and build better lives and communities Community Impact, Financial Responsible Business and Technology and Human Capital and ESG and Environmental Inclusion, and Education Ethical Conduct Client Service DEI Sustainability – 16.2% of senior leadership roles – Achieved 114%
Slide 6: Financial Results
mlatclaterrs! Results
Slide 7: Selected items affecting 1Q22 results
Selected items affecting 1Q22 results Item Diluted EPS Pre-Tax After-Tax ($ MM, except per share impact) Impact Merger-related and restructuring charges ($216) ($166) ($0.12) Incremental operating expenses related to the merger ($202) ($155) ($0.12) Securities gains / (losses)1 ($69) ($53) ($0.04) G
Slide 8: 1Q22 performance highlights
1Q22 performance highlights Summary Income Statement ($ MM) Commentary Change vs. 1Q22 4Q21 1Q21 Earnings and profitability – Solid financial results, even in volatile market conditions GAAP / Unadjusted – $1.6 billion of adjusted net income ($1.23 per share) and adjusted ROTCE of Revenue $5,351 (4.
Slide 9: Truist Digital is already delivering enhanced benefits to our clients
Truist Digital is already delivering enhanced benefits to our clients New to heritage BB&T New to heritage SunTrust New at Truist Fraud inspector Business wires Personal Financial One View mobile app Truist Insights Truist Assist for Business mobile Management with entitlement Coming soon! managemen
Slide 10: Average loans & leases HFI
Average loans & leases HFI 5-Quarter Trend $294.7 $288.6 $286.2 $286.3 $288.6 $120.9 $118.0 $120.4 $121.8 $121.1 % 1.2 ) up PPP $173.8 $170.5 $165.8 $164.5 (ex $167.5 4.11% 4.03% 3.92% 3.81% 3.70% 3.65% 3.61% 3.58% 3.49% 3.42% 1Q21 2Q21 3Q21 4Q21 1Q22 Commercial LHFI ($ B) Consumer & Card LHFI ($ B)
Slide 11: Average deposits
Average deposits 5-Quarter Trend $411.0 $415.2 $396.3 $402.7 $383.2 0.05% 0.04% 0.03% 0.03% 0.03% 1Q21 2Q21 3Q21 4Q21 1Q22 Total deposits ($ B) Total deposit cost (%) vs. Prior Quarter vs. Year-over-Year – Average deposits increased $4.3 billion, or 1.0% – Average deposits increased $32 billion, or
Slide 12: Net interest income & net interest margin
Net interest income & net interest margin 5-Quarter Trend $3,313 $3,273 $3,261 $3,267 $3,209 $340 $308 $255 $237 $210 $2,973 $2,965 $3,006 $3,030 $2,999 3.01% 2.88% 2.81% 2.76% 2.76% 2.69% 2.60% 2.58% 2.55% 2.57% 1Q21 2Q21 3Q21 4Q21 1Q22 1 Core net interest income TE ($ MM) Purchase accounting accre
Slide 13: Interest rate sensitivity
Interest rate sensitivity Balanced approach to managing interest rate risk provides upside to higher rates, with downside protection Year 1 Net Interest Income Sensitivity1 Commentary – 4.3% asset sensitivity in +100 bps ramp 13.6% – ~80% of asset sensitivity from short-end of the curve – One 25 bps
Slide 14: Noninterest income
Noninterest income 5-Quarter Trend $2,405 $2,365 $2,323 $2,197 $2,142 40.1% 42.6% 42.2% 41.7% 40.2% 1Q21 2Q21 3Q21 4Q21 1Q22 Noninterest income ($ MM) Fee income ratio (%) vs. Prior Quarter vs. Year-over-Year – Noninterest income declined $181 million, or 7.8% – Noninterest income declined $55 milli
Slide 15: Noninterest expense
Noninterest expense 5-Quarter Trend ($ MM) $4,011 $200 $3,795 $3,610 $3,700 $685 $574 $3,674 $30 $36 $142 $145 $143 $137 $144 $487 $363 $427 $418 $316 $3,117 $3,182 $3,257 $3,131 $3,119 65.8% 71.0% 67.8% 66.5% 69.0% 56.9% 56.1% 57.9% 56.0% 58.3% 1Q21 2Q21 3Q21 4Q21 1Q22 1 Adjusted noninterest expens
Slide 16: Asset quality
Asset quality Asset quality remains excellent, reflecting our prudent risk culture, diverse portfolio, and solid economic conditions Net Charge-Offs $421 Provision / (Benefit) for Credit Losses Continued favorable credit environment Provision benefit reflects strong credit performance and solid econ
Slide 17: Capital and liquidity position
Capital and liquidity position Capital and liquidity position Commentary Capital position 14.3% – CET1 ratio was 9.4%, down 20 bps from 12/31 13.2% 13.9% 13.0% 12.0% 11.3% 11.0% – Decline driven by acquisitions of Kensington Vanguard and certain 10.1% merchant services relationships, RWA growth, and
Slide 18: 1Q22 selected transactions
1Q22 selected transactions Kensington Vanguard acquisition Merchant services acquisition Securities repositioning 13.9% – Terminated merchant acquiring revenue share – Significantly expands Truist’s presence in alliance and purchased a significant portion of the title insurance market the alliance’s
Slide 19: Merger Integration Update
Merger Integration Update
Slide 20: Integration is substantially complete
Integration is substantially complete Progress so far... ...What’s left? February – March ‘22 Truist Wealth Began client Retail Integrated Migrated 2,000 branches 6,000 new Completed Mortgage Teller platform Securities brokerage migration to mortgage commercial ~7MM hSTI converted and signs client d
Slide 21: Achieving net cost saves
Achieving net cost saves Third Party Spend Retail Banking Non-Branch Facilities Personnel1 Technology Targeting Targeting 800+ total Targeting approximately Avg. FTEs decreased by Driven by integration Cost saves 10% reduction in closures by 1Q22 5MM+ approximately 14% at efforts, applications, sour
Slide 22: Shifting from integration focus to executional excellence, transformation, and growth
Shifting from integration focus to executional excellence, transformation, and growth 2020 2021 2022 2023 Well Positioned for 2022 – Finalize the merger Pandemic – February conversion (complete) – Eliminate merger-related charges and incremental operating expenses by year-end Integration – Achieve c
Slide 23: Investment thesis: Why Truist?
Investment thesis Leading Financial Performance Investing in the Future Exceptional Company – Targeting strong growth and profitability (with Purpose-Driven Culture – Building a better lower volatility) – 7th largest U.S. technology foundation with ‘best of breed’ – Continued confidence commercial b
Slide 24: Appendix
Appendix
Slide 25: Consumer Banking & Wealth
Consumer Banking & Wealth Represents performance for Retail and Small Business Banking, Wealth, Mortgage Banking, Dealer Retail Services, and National Consumer Finance & Payments Metrics Commentary – Segment net income of $864 million, down $101 million from the prior quarter Income statement ($ MM)
Slide 26: Corporate & Commercial Banking
Corporate & Commercial Banking Represents performance for Commercial Community Banking, Corporate & Investment Banking, and CRE & Grandbridge Metrics Commentary Linked Qtr. Like Qtr. – Net income of $985 million decreased $177 million or 15% vs. 4Q21 driven by weaker Income Statement ($ MM) 1Q22 Cha
Slide 27: Insurance Holdings
Insurance Holdings Represents performance for Truist Insurance Holdings’ Retail, Wholesale and Services Divisions Metrics Commentary Linked Qtr. Like Qtr. – Truist Insurance Holdings produced another strong quarter, driven by solid new Income statement ($ MM) 1Q22 business growth, strong IRM perform
Slide 28: Purchase accounting summary
(1) Purchase accounting summary ($ MM) As of/For the Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Loans and Leases(2) Beginning balance unamortized fair value mark $ (1,323) $ (1,540) $ (1,777) $ (2,067) $ (2,395) Accretion 191 217 233 285 316 Purchase accounting
Slide 29: M&A related financial impacts
M&A related financial impacts ($ MM) Incremental operating Purchase accounting Merger-related and Amortization of intangibles expenses related to the accretion restructuring charges merger 1Q21 $340 $144 $141 $175 2Q21 308 142 297 190 3Q21 255 145 172 191 4Q21 237 143 212 215 1Q22 210 137 216 202 2Q
Slide 30: PPP details
PPP details PPP Revenue PPP Yields Average PPP EOP PPP PPP Contribution to NIM ($ MM) (%) ($ B) ($ B) (bps) 2Q20 $55 2.6% $8.7 $12.0 0 3Q20 78 2.6 12.1 12.2 -1 4Q20 108 3.6 11.8 10.8 3 1Q21 132 5.3 10.0 10.1 6 2Q21 124 5.7 8.7 6.0 6 3Q21 85 7.2 4.7 3.5 5 4Q21 55 8.0 2.7 2.1 3 1Q22 34 8.5 1.6 1.2 2 F
Slide 31: 2Q22–1Q23 preferred stock projected dividends
2Q22–1Q23 preferred stock projected dividends Truist Preferred Outstandings ($ MM) 2Q22 3Q22 4Q22 1Q23 Series I $173 $1.8 $1.8 $1.7 $1.7 Series J $102 1.0 1.0 1.0 1.0 Series L $750 18.9 8.7 9.8 10.8 Series M $500 12.8 — 12.8 — Series N $1,700 — 40.8 — 40.8 Series O $575 7.5 7.5 7.5 7.5 Series P $1,0
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 33: Non-GAAP reconciliations: Diluted EPS
Non-GAAP reconciliations Diluted EPS ($ MM, except per share data, shares in thousands) Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Net income available to common shareholders - GAAP $ 1,327 $ 1,524 $ 1,616 $ 1,559 $ 1,334 Merger-related and restructuring charge
Slide 34: Non-GAAP reconciliations: Efficiency ratio
Non-GAAP reconciliations Efficiency ratio ($ MM) Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Efficiency ratio numerator - noninterest expense - GAAP $ 3,674 $ 3,700 $ 3,795 $ 4,011 $ 3,610 Merger-related and restructuring charges, net (216) (212) (172) (297) (14
Slide 35: Non-GAAP reconciliations: Pre-provision net revenue
Non-GAAP reconciliations Pre-provision net revenue ($ MM) Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Net income $ 1,416 $ 1,602 $ 1,704 $ 1,658 $ 1,473 Provision for credit losses (95) (103) (324) (434) 48 Provision for income taxes 330 367 423 415 351 Taxable-
Slide 36: Non-GAAP reconciliations: Return on average assets
Non-GAAP reconciliations Return on average assets ($ MM) As of / Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Net income - GAAP $ 1,416 $ 1,602 $ 1,704 $ 1,658 $ 1,473 Merger-related and restructuring charges 166 163 132 228 108 Securities (gains) losses 53 — — —
Slide 37: Non-GAAP reconciliations: Tangible common equity
Non-GAAP reconciliations Calculations of tangible common equity and related measures ($ MM, except per share data, shares in thousands) As of / Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Common shareholders' equity $ 58,348 $ 62,598 $ 62,227 $ 61,663 $ 60,752 L
Slide 38: Non-GAAP reconciliations: Return on average common equity
Non-GAAP reconciliations Return on average common equity and average tangible common equity ($ MM) As of / Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Net income available to common shareholders - GAAP $ 1,327 $ 1,524 $ 1,616 $ 1,559 $ 1,334 Merger-related and r
Slide 39: Non-GAAP Reconciliations: Operating Leverage
Non-GAAP Reconciliations Operating Leverage(1) ($ MM) Quarter Ended % Growth 1Q22 vs. March 31 Dec. 31 March 31 2022 2021 2021 4Q21 1Q21 (2) Revenue - GAAP $ 5,325 $ 5,566 $ 5,482 (4.3)% (2.9)% Taxable equivalent adjustment 26 24 28 Securities (gains) losses 69 — — Gain on redemption of noncontrolli
Slide 40: Non-GAAP reconciliations: Core NIM
Non-GAAP reconciliations Core NIM ($ MM) Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Net interest income - GAAP $ 3,183 $ 3,243 $ 3,233 $ 3,245 $ 3,285 Taxable-equivalent adjustment 26 24 28 28 28 Net interest income - taxable-equivalent 3,209 3,267 3,261 3,273
Slide 41: Non-GAAP reconciliations: Insurance Holdings adjusted EBITDA
Non-GAAP reconciliations Insurance Holdings adjusted EBITDA ($ MM) Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Segment net interest income $ 24 $ 23 $ 28 $ 25 $ 24 Noninterest income 737 681 652 698 633 Total revenue $ 761 $ 704 $ 680 $ 723 $ 657 Segment net inc
Slide 42: To inspire and build better lives and communities
To inspire and build better lives and communities