Truist Financial Corporation · NYSE:TFC
Truist Financial — Q4 2023 Earnings Presentation
32 slides from Truist Financial's earnings presentation, Jan 18, 2024
Slide 1: Fourth Quarter 2023 Earnings Conference Call
Fourth Quarter 2023 Earnings Conference Call Bill Rogers – Chairman & CEO Mike Maguire – CFO January 18, 2024
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: Financial Results
mlatclaterrs! Results
Slide 6: 4Q23 key takeaways
4Q23 key takeaways 1 Solid fourth quarter results impacted by a $6.1 billion non-cash Net income (loss) available to common goodwill impairment charge GAAP Adjusted $(5.2 billion) $1.1 billion (Not adjusted for $139MM of restructuring charges) Diluted EPS 2 Costs savings program, including organizat
Slide 7: Building client-centered experiences
Building client-centered experiences Mobile App Users1 Zelle Transactions Empowering Clients Through T3: Truist Assist (in millions) (in millions) Innovative Technology + Touch +43% +9% 27 – Truist Assist began its second year in 25 market in 4Q23 with clients engaging in 23 4.7 4.8 26% more interac
Slide 8: 4Q23 performance highlights
4Q23 performance highlights ($ in millions, except per share data) Summary Income Statement Commentary Earnings GAAP / Unadjusted 4Q23 3Q23 4Q22 – Fourth quarter 2023 net loss of $5.2 billion, or $3.85 per share was impacted by: Revenue $5,756 $5,729 $6,258 – $6.1 billion ($6.1 billion after tax), o
Slide 9: Average loans and leases HFI
Average loans and leases HFI ($ in billions) 5-Quarter Trend vs. Linked Quarter – Average loans decreased $5.5 billion, or 1.7% from 3Q23 – Average commercial loans decreased $3.5 billion, or 1.8% driven by a $3.7 billion $326 $326 decrease in average C&I loans partially offset by a modest increase
Slide 10: Average deposits
Average deposits ($ in billions) 5-Quarter Trend vs. Linked Quarter – Average deposits decreased $5.7 billion, or 1.4% – Average noninterest-bearing deposits declined $4.3 billion, or 3.7% $413 $408 $400 $401 $395 – Represented 29% of total deposits vs. 30% in 3Q23 $141 $131 – Average money market d
Slide 11: Net interest income and net interest margin
Net interest income and net interest margin ($ in millions) 5-Quarter Trend vs. Linked Quarter – Net interest income declined 0.6% primarily due to lower earning assets and higher funding costs – Rate of deposit beta increases has slowed $4,031 $3,919 – Reported NIM increased 3 bps to 2.98% $94 $76
Slide 12: Noninterest income
Noninterest income ($ in millions) Noninterest Income vs. Linked Quarter 4Q23 3Q23 4Q22 – Noninterest income increased 2.2% as higher services charges on deposits, lending related fees, and seasonal growth in insurance income were partially offset by lower other income Insurance income $ 813 $ 793 $
Slide 13: Noninterest expense
Noninterest expense ($ in millions) Noninterest Expense vs. Linked Quarter 4Q23 3Q23 4Q22 – Noninterest expense increased $6.5 billion due primarily to the following: Personnel expense $ 2,017 $ 2,200 $ 2,198 – A non-cash goodwill impairment charge of $6.1 billion Professional fees and outside proce
Slide 14: Asset quality
Asset quality Asset quality metrics solid and normalizing Net Charge-Offs Provision for Credit Losses NCOs increased 6 bps linked quarter reflecting higher commercial and other consumer losses Provisions increased on a linked quarter basis due to higher charge-offs and an allowance build ($ in MM) (
Slide 15: Continued capital momentum
Continued capital momentum ($ in billions) 4Q23 Capital Walk AOCI Burn Down4 Commentary Truist continues to build capital and maintains significant strategic flexibility with Securities AOCI projected to decline by 28% by 12/31/26 its remaining stake in TIH CET1 increased 20 bps to 10.1% – No impact
Slide 16: 1Q24 and 2024 outlook
1Q24 and 2024 outlook ($ in billions unless otherwise noted) 4Q23 Actuals 1Q24 Outlook 13.9% Revenue (TE) $5.8 Flat to down 1% compared to 4Q23 1Q24 Adjusted expenses $3.4 Up 4% (includes costs related to TIH independence readiness) (includes costs related to TIH independence readiness) Full Year 20
Slide 17: Strategic actions and priorities
Strategic actions and priorities Recent actions and execution of 2024 top priorities will lead to improved franchise and shareholder value 13.9% 2023 2024 Actions Top Priorities – Increased client development productivity – Grow and deepen core client relationships and grew net new deposit accounts
Slide 18: Appendix
Appendix
Slide 19: Commercial real estate (CRE) spotlight
Commercial real estate (CRE) spotlight CRE Represents 9.4% of Total Loans HFI, Including Office at 1.7% 5-Quarter Total CRE Trends Multifamily 11.3% 11.7% 11.1% 33% 9.7% 1.09% 1.01% 1.05% 7.8% All other Total LHFI at 0.41% 1.02% 12/31/23 Office CRE Mix Retail 0.29% loans CRE 0.70% ($312B) 17% 14% 90
Slide 20: Consumer Banking & Wealth
Consumer Banking & Wealth Represents performance for Retail and Small Business Banking, Wealth, Mortgage Banking, and Consumer Finance Solutions Metrics Commentary – Net loss of $2.6 billion, compared to net income of $837 million in the prior quarter Income statement ($ MM) 4Q23 vs. 3Q23 vs. 4Q22 –
Slide 21: Corporate & Commercial Banking
Corporate & Commercial Banking Represents performance for Commercial Community Banking, Corporate & Investment Banking, CRE, Wholesale Payments, and Insurance Premium Finance Metrics Commentary – Net loss of $2.0 billion, compared to net income of $894 million in the prior quarter Income statement (
Slide 22: Insurance Holdings
Insurance Holdings Represents performance for Truist Insurance Holdings’ Retail and Wholesale Divisions Metrics Commentary – Revenue increased 7.4% vs. 4Q22 Income statement ($ MM) 4Q23 vs. 3Q23 vs. 4Q22 – Organic revenue growth was 7.3% vs. 4Q22 Noninterest income $830 $29 $38 – New business genera
Slide 23: Purchase accounting summary
(1) Purchase accounting summary ($ in millions) As of/For the Quarter Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 2023 2023 2023 2023 2022 Loans and Leases(2) Beginning balance unamortized fair value mark $ (528) $ (579) $ (673) $ (741) $ (826) Accretion 31 45 63 64 80 Purchase accounting adjust
Slide 24: Preferred dividend
Preferred dividend ($ in millions) 1Q24 2Q24 3Q24 4Q24 Estimated dividends based on projected interest rates $106 $77 $105 $75 and amounts outstanding ($ MM) Estimates assume forward-looking SOFR rates as of 12/31/23. Actual interest rates could vary significantly causing dividend payments to differ
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 26: Adjusted Net Income and Diluted EPS
Non-GAAP reconciliations Adjusted Net Income and Diluted EPS ($ in millions, except per share data, shares in thousands) Quarter Ended Year Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Dec. 31 Dec. 31 2023 2023 2023 2023 2022 2023 2022 Net income (loss) available to common shareholders - GAAP $ (
Slide 27: Efficiency ratio
Non-GAAP reconciliations Efficiency ratio ($ in millions) Quarter Ended Year Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Dec. Dec. 2023 2023 2023 2023 2022 2023 2022 Efficiency ratio numerator - noninterest expense - GAAP $ 10,280 $ 3,747 $ 3,748 $ 3,691 $ 3,722 $ 21,466 $ 14,589 Merger-related
Slide 28: Pre-provision net revenue
Non-GAAP reconciliations Pre-provision net revenue ($ in millions) Quarter Ended Year Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Dec. 31 Dec. 31 2023 2023 2023 2023 2022 2023 2022 Net income $ (5,090) $ 1,183 $ 1,345 $ 1,515 $ 1,682 $ (1,047) $ 6,267 Provision for credit losses 572 497 538 502
Slide 29: Tangible common equity and related measures
Non-GAAP reconciliations Calculations of tangible common equity and related measures ($ in millions, except per share data, shares in thousands) As of / Quarter Ended Year Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Dec. 31 Dec. 31 2023 2023 2023 2023 2022 2023 2022 Common shareholders’ equity $
Slide 30: Core NIM
Non-GAAP reconciliations Core NIM ($ in millions) Quarter Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 2023 2023 2023 2023 2022 Net interest income - GAAP $ 3,543 $ 3,564 $ 3,625 $ 3,868 $ 3,981 Taxable-equivalent adjustment 58 57 54 51 50 Net interest income - taxable-equivalent 3,601 3,621 3,67
Slide 31: Insurance Holdings adjusted EBITDA
Non-GAAP reconciliations Insurance Holdings adjusted EBITDA ($ in millions) Quarter Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 2023 2023 2023 2023 2022 Segment interest income $ 21 $ 25 $ 19 $ — $ — Noninterest income 830 801 944 817 792 Total revenue 851 826 963 817 792 Segment net income (los
Slide 32: To inspire and build better lives and communities
To inspire and build better lives and communities