Truist Financial Corporation · NYSE:TFC
Truist Financial — Merger or Acquisition (March 2023)
17 slides from Truist Financial's merger presentation, Mar 8, 2023
Slide 1: Strategically Positioning Truist Insurance Holdings for Long-Term Success
1 Strategically Positioning Truist Insurance Holdings for Long-Term Success Bill Rogers – Chairman & CEO Mike Maguire – CFO John Howard – Chief Insurance Officer Truist Financial Corporation February 16, 2023
Slide 2: Forward-looking statements
2 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
3 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
Slide 4: Executive summary
4 Executive summary Overview Truist Insurance Holdings (TIH) is the 6th largest U.S. insurance broker with scale, strong organic growth, and attractive operating margins Selling 20% minority stake in TIH (excluding Premium Finance) to Stone Point Capital and co-investors at a $14.75B aggregate v
Slide 5: Insurance brokerage industry backdrop
5 Insurance brokerage industry backdrop Source: S&P Global, Nasdaq, and Capital IQ. Market data as of 2/10/23. 1 Represents 2022 LTM as of 3Q compared to FY 2021 2 Represents the median multiple of publicly traded regional banks: CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, USB, and ZION 3 Represents th
Slide 6: Overview of Truist Insurance Holdings (TIH)
6% 9% 4% 12% 7% 2018 2019 2020 2021 2022 Teammates 9,000+ Overview of Truist Insurance Holdings (TIH) 6 1 Transaction and historical financials includes insurance brokerage business and excludes premium finance; all metrics as of FY 2022 2 See non-GAAP reconciliations in the attached appendix 6th La
Slide 7: TIH is an industry leader / Multiple levers for growth
Inflation / social inflation Increased risks P&C Climate change Cyber IRM Opportunities TIH is an industry leader 71 Source: Business Insurance magazine; TIH also includes annuity revenue and Premium Finance Insurance Brokerage Rankings1 Multiple Levers for Growth Rank Company 2021 U.S. Br
Slide 8: Summary of key terms
Summary of key terms 8 In ve st m en t T er m s Valuation − $14.75B aggregate value − Common equity value: $9.75B − Preferred equity issued to Truist: $5.0B Investment size – $1.95B Investor ownership in TIH – 20% minority stake; investment to be made by Stone Point Capital, in partnership with co-i
Slide 9: Highlighting the significant value of TIH and Truist
Highlighting the significant value of TIH and Truist 9 Note: Market data as of 2/10/23 1 Represents TIH valuation based on minority stake investment 2 Represents the median multiple of regional banks: CFG, CMA, FITB, HBAN, KEY, MTB, PNC, RF, USB, and ZION 3 Implied value of Truist ex. TIH based on c
Slide 10: Strong capital generation
Strong capital generation 10 1 Reflects Stone Point’s 20% common equity ownership plus dilution impact from warrants 2 Assumes reinvestment of cash proceeds at 4.00% Strong Capital Generation Accretive to Tangible Book Value CET1 Ratio Tangible Book Value Per Share Preserving future flexibility 9.0%
Slide 11: Conclusion
Conclusion 11 Transaction Terms Compelling Strategic Rationale Attractive Financial Impacts New ownership structure, combined with significant expertise of Stone Point, creates additional opportunities to support growth Highlights significant value of insurance business Strengthened incentive
Slide 12: Appendix
AppendixAppendix
Slide 13: TIH key historical financial metrics
13 TIH key historical financial metrics1 1 Transaction and historical financials includes insurance brokerage business and excludes premium finance; all metrics as of FY 2022. Adjusted financials excludes merger-related charges. See non-GAAP reconciliations in the attached appendix Historical Financ
Slide 14: Illustrative pro forma financial impacts
14 Illustrative pro forma financial impacts 1 Assumes reinvestment of cash proceeds at 4.00% 2 Pro forma financial impacts for earnings items shown relative to 2022 adjusted financials for illustrative purposes and 12/31/2022 for balance sheet. Transaction includes insurance brokerage business and e
Slide 15: Non-GAAP reconciliations
A-15 Year ended Dec. 31, 2022 Net income available to common shareholders - GAAP $ 5,927 Merger-related and restructuring charges 393 Securities (gains) losses 54 Loss (gain) on early extinguishment of debt (30) Incremental operating expenses related to the merger 356 Gain on redemption of noncontro
Slide 16: Non-GAAP reconciliations: Tangible Common Equity
A-16 Non-GAAP reconciliations Truist Calculations of Tangible Common Equity ($ MM, except per share data, shares in thousands) As of / Quarter Ended Common shareholders' equity $ 53,841 Less: Intangible assets, net of deferred taxes 29,908 Tangible common shareholders' equity(1) $ 23,933 Outstanding
Slide 17: EBITDA reconciliation
A-17 1 EBITDA is a non-GAAP measurement of operating profitability that is calculated by adding back interest, taxes, depreciation and amortization to net income. Truist's management also adds back merger-related and restructuring charges, incremental operating expenses related to the merger, and ot
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