Truist Financial Corporation · NYSE:TFC
Truist Financial — Q1 2024 Earnings Presentation
29 slides from Truist Financial's earnings presentation, Apr 22, 2024
Slide 1: First Quarter 2024 Earnings Conference Call
First Quarter 2024 Earnings Conference Call Bill Rogers – Chairman & CEO Mike Maguire – CFO April 22, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements From time to time we have made, and in the future will make, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current fact
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: 1Q24 key takeaways
1Q24 key takeaways $ in millions, except per share data – Solid first quarter results Reported Adjusted1 – Strong investment banking and trading revenue – Continued expense discipline Net income available from continuing operations $1,027 $1,084 – Stable NPLs reflecting continued management of probl
Slide 7: Client preferences shift toward mobile
Client preferences shift toward mobile Mobile app users1 Digital transactions2 Frictionless experiences drive client engagement (in millions) (in millions) – Education and digital activation delivered by Truist teammates coupled with client +8% preferences shift transactions to mobile +13% banking a
Slide 8: 1Q24 performance highlights
1Q24 performance highlights $ in millions, except per share data Summary income statement1 Commentary1 GAAP / Unadjusted 1Q24 4Q23 1Q23 Earnings Revenue $4,871 $4,940 $5,339 – First quarter 2024 net income available to common shareholders from continuing operations of $1.0 Expense $2,953 $9,557 $3,0
Slide 9: Average loans and leases HFI
Average loans and leases HFI $ in billions 5-quarter trend Vs. linked quarter – Average loans decreased $4.1 billion, or 1.3%, from 4Q23 – Average commercial loans decreased $1.6 billion, or 0.9% driven by a decline in C&I – Average consumer loans decreased $2.4 billion, or 2.0% largely due to a $1.
Slide 10: Average deposits
Average deposits $ in billions 5-quarter trend Vs. linked quarter – Average deposits decreased $6.3 billion, or 1.6% – Average noninterest-bearing deposits decreased $5.7 billion, or 4.9% $408 – Represented 28% of total deposits vs. 29% in 4Q23 $400 $401 $395 $389 – Average money market and savings
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 decreased 4.2% primarily due to higher funding costs driven by deposit mix shift, lower earning assets, and day count – NIM declined 7 bps to 2.89% $3,918 $3,657 $3,592 $3,577 $3,425 Vs
Slide 12: Noninterest income
Noninterest income $ in millions Noninterest income Vs. linked quarter 1Q24 4Q23 1Q23 – Noninterest income increased 6.1% primarily driven by higher investment banking and trading income, partially offset by a decline in lending related fees due to lower leasing-related gains Wealth management incom
Slide 13: Noninterest expense
Noninterest expense $ in millions Noninterest expense Vs. linked quarter 1Q24 4Q23 1Q23 – Noninterest expense decreased $6.6 billion due primarily to 4Q23 results including a non-cash goodwill impairment charge of $6.1 billion and an FDIC special assessment of $507 million Personnel expense $ 1,630
Slide 14: Asset quality
Asset quality Net charge-offs Provision for credit losses NCO ratio increased 7 bps on a linked-quarter basis reflecting continued normalization within the consumer and Provision decreased on a linked-quarter basis due to lower loan balances and less allowance build commercial portfolios ($ in MM) (
Slide 15: Capital
Capital 1Q24 capital walk Commentary Pending sale of TIH significantly strengthens Truist’s relative capital position vs. peers Pending sale of TIH seizes capital advantage – Generates 230 bps of CET1 under current Basel III rules and 255 bps under proposed rules ~2.3% – Increases tangible book valu
Slide 16: 2Q24 and 2024 outlook
2Q24 and 2024 outlook Based on continuing operations; $ in billions unless otherwise noted 1Q24 actuals 2Q24 outlook 13.9% Down ~2% Revenue (TE) $4.9 – Excludes the impact of interest income earned on the proceeds from the pending sale of TIH compared to 1Q24 – Excludes the impact of a potential bal
Slide 17: 2024 strategic priorities
2024 strategic priorities 13.9% Pursuing Maintaining Evaluating a Resuming share Maintaining and Enhancing the growth expense balance sheet buybacks, strengthening client opportunities discipline and repositioning subject to sound risk experience in our core seeking post closing of market controls a
Slide 18: Appendix
Appendix
Slide 19: Commercial real estate (CRE) spotlight
Commercial real estate (CRE) spotlight CRE Represents 9.6% of Total Loans HFI, Including Office at 1.7% 5-Quarter Total CRE Trends Multifamily 13.7% 11.3% 11.7% 35% 11.1% 1.30% 9.7% 1.09% 1.05% 1.01% All other Total LHFI at 3/31/24 Office CRE Mix 0.41% 1.02% 0.96% loans CRE Retail 90.4% ($307B) 16%
Slide 20: Consumer and Small Business Banking
Consumer and Small Business Banking Represents performance for Branch and Premier Banking, Consumer Lending, and Small Business Banking Metrics Commentary – Net income of $880 million, compared to a net loss of $2.5 billion in the prior quarter Income statement ($ MM) 1Q24 vs. 4Q23 vs. 1Q23 – Prior
Slide 21: Wholesale Banking
Wholesale Banking Represents performance for Commercial Banking, Corporate and Investment Banking, CRE, Enterprise Payments, and Wealth Metrics Commentary – Net income of $876 million, compared to a net loss of $2.1 billion in the prior quarter Income statement ($ MM) 1Q24 vs. 4Q23 vs. 1Q23 – Prior
Slide 22: Preferred dividend
Preferred dividend 2Q24 3Q24 4Q24 1Q25 Estimated dividends based on projected interest rates $77 $106 $76 $122 and amounts outstanding ($ MM) Estimates assume forward-looking interest rates as of 3/31/24. Actual interest rates could vary significantly causing dividend payments to differ from the est
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 24: Non-GAAP reconciliations: 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 March 31 Dec. 31 Sept. 30 June 30 March 31 2024 2023 2023 2023 2023 Net income (loss) available to common shareholders from continuing operations $ 1,027 $ (5,268) $ 1
Slide 25: Non-GAAP reconciliations: Revenue and expense before discontinued operations
Non-GAAP reconciliations Revenue and expense before the impact of discontinued operations accounting ($ MM) Quarter Ended March 31, 2024 Quarter Ended Dec. 31, 2023 Before the Before the impact of impact of Discontinued discontinued Discontinued Reported Other(3) Reported Other(3) discontinued opera
Slide 26: Non-GAAP reconciliations: Efficiency ratio
Non-GAAP reconciliations Efficiency ratio from continuing operations $ in millions Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2024 2023 2023 2023 2023 Efficiency ratio numerator - noninterest expense - GAAP $ 2,953 $ 9,557 $ 3,060 $ 3,046 $ 3,015 Restructuring charges, net (51) (155) (
Slide 27: Non-GAAP reconciliations: Pre-provision net revenue
Non-GAAP reconciliations Pre-provision net revenue $ in millions Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2024 2023 2023 2023 2023 Net income from continuing operations $ 1,133 $ (5,191) $ 1,109 $ 1,169 $ 1,410 Provision for credit losses 500 572 497 538 502 Provision for income taxe
Slide 28: Non-GAAP reconciliations: Tangible common equity
Non-GAAP reconciliations Calculations of tangible common equity and related measures $ in millions, except per share data, shares in thousands As of / Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2024 2023 2023 2023 2023 Common shareholders’ equity $ 52,148 $ 52,428 $ 55,167 $ 56,853 $ 5
Slide 29: To inspire and build better lives and communities
To inspire and build better lives and communities