8-K
Truist Financial Corp (TFC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________
Form 8-K
Current Report
_____________________________________________
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
January 18, 2022
Date of Report (Date of earliest event reported)
Truist Financial Corporation
(Exact name of registrant as specified in its charter)
_____________________________________________
| North Carolina | 1-10853 | 56-0939887 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| 214 North Tryon Street | ||
| --- | --- | --- |
| Charlotte, | North Carolina | 28202 |
| (Address of principal executive offices) | (Zip Code) |
(336) 733-2000
(Registrant's telephone number, including area code)
_____________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $5 par value | TFC | New York Stock Exchange |
| Depositary Shares each representing 1/4,000th interest in a share of Series I Perpetual Preferred Stock | TFC.PI | New York Stock Exchange |
| 5.853% Fixed-to-Floating Rate Normal Preferred Purchase Securities each representing 1/100th interest in a share of Series J Perpetual Preferred Stock | TFC.PJ | New York Stock Exchange |
| Depositary Shares each representing 1/1,000th interest in a share of Series O Non-Cumulative Perpetual Preferred Stock | TFC.PO | New York Stock Exchange |
| Depositary Shares each representing 1/1,000th interest in a share of Series R Non-Cumulative Perpetual Preferred Stock | TFC.PR | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
ITEM 2.02 Results of Operations and Financial Condition.
On January 18, 2022, Truist Financial Corporation (“Truist”) issued a press release reporting fourth quarter 2021 results and posted on its website its fourth quarter 2021 Earnings Release, Quarterly Performance Summary, and Earnings Release Presentation. The materials contain forward-looking statements regarding Truist and include cautionary language identifying important factors that could cause actual results to differ materially from those anticipated. The Earnings Release, Quarterly Performance Summary, and Earnings Release Presentation are furnished as Exhibits 99.1, 99.2, and 99.3, respectively. Consequently, they are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. Such materials may only be incorporated by reference into another filing under the Exchange Act or Securities Act of 1933 if such subsequent filing specifically references this Form 8-K. All information in the Earnings Release, Quarterly Performance Summary, and Earnings Release Presentation speaks as of the date thereof, and Truist does not assume any obligation to update such information in the future.
ITEM 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description of Exhibit |
|---|---|
| 99.1 | Earnings Release issued January 18, 2022. |
| 99.2 | Quarterly Performance Summary issued January 18, 2022. |
| 99.3 | Earnings Release Presentation issued January 18, 2022. |
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TRUIST FINANCIAL CORPORATION | |
|---|---|
| (Registrant) | |
| By: | /s/ Cynthia B. Powell |
| Cynthia B. Powell | |
| Executive Vice President and Corporate Controller | |
| (Principal Accounting Officer) |
Date: January 18, 2022
Document
 |
News Release | ||
|---|---|---|---|
| Contact: | |||
| Investors: | Ankur Vyas<br>404.827.6714 | investors@truist.com | |
| Media: | Shelley Miller<br>704.692.1518 | media@truist.com |
Truist reports fourth quarter and full year 2021 results
Fourth quarter 2021 GAAP earnings of $1.5 billion, or $1.13 per diluted share
Fourth quarter 2021 Adjusted earnings of $1.9 billion, or $1.38 per diluted share
Results reflect improving loan growth, strong deposit growth, continued fee momentum, strong expense control, and significant capital deployment
On track for integration milestones in 2022
CHARLOTTE, N.C., (January 18, 2022) — Truist Financial Corporation (NYSE: TFC) today reported earnings for the fourth quarter and full year of 2021.
Net income available to common shareholders was $1.5 billion, up 24%, compared to the fourth quarter last year. Earnings per diluted common share were $1.13, an increase of 26% compared with the same period last year. Results for the fourth quarter produced an annualized return on average assets (ROA) of 1.19%, an annualized return on average common shareholders' equity (ROCE) of 9.8%, and an annualized return on tangible common shareholders' equity (ROTCE) of 18.9%.
Adjusted net income available to common shareholders was $1.9 billion, or $1.38 per diluted share, excluding merger-related and restructuring charges of $212 million ($163 million after-tax) and incremental operating expenses related to the merger of $215 million ($165 million after-tax). Adjusted results produced an annualized ROA of 1.43%, an annualized ROCE of 11.9%, and an annualized ROTCE of 22.6%. Adjusted earnings per diluted share were up 17% compared to the prior year.
For the full year 2021, net income available to common shareholders was $6.0 billion compared to $4.2 billion for 2020. Earnings per diluted share were $4.47 for 2021, up 45%, compared to $3.08 for 2020. Results for 2021 produced an ROA of 1.23%, an ROCE of 9.7%, and an ROTCE of 18.4%.
Adjusted net income available to common shareholders for the full year 2021, which excludes merger-related charges, incremental operating expenses related to the merger and certain other items as detailed in our non-GAAP reconciliations was $7.5 billion compared to $5.2 billion for 2020. Adjusted diluted earnings per share was a record $5.53, up 46%, compared to $3.80 for 2020. Adjusted results for 2021 produced an ROA of 1.50%, an ROCE of 11.9%, and an ROTCE of 22.0%.
“Our fourth quarter results reflect a strong finish to an impactful year for Truist,” said Chief Executive Officer Bill Rogers. “The quarter reflects improved revenue momentum and excellent credit quality, as well as significant capital deployment, and the achievement of our cost savings targets. Our diverse business model and progress on the merger, combined with a better economic environment drove stronger 2021 performance compared with 2020. In addition to our financial performance, we also made critical progress integrating our systems, activating our purpose, and expanding ESG and diversity initiatives.
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“During the year, we lived our purpose to inspire and build better lives and communities in countless ways. We invested in key businesses and digital products to help drive greater financial success for our clients. Our Paycheck Protection Program lending helped small businesses, non-profits, and commercial clients receive critical funding and we ranked as the 4th largest PPP lender. We increased access to financial education for our clients through our partnership with Operation HOPE, issued our first social bond, and were recognized in JUST Capital’s ‘JUST 100’ list for our ongoing efforts around good corporate citizenship.
“Truist has much to look forward to in 2022. In February, we will complete our largest client conversion and will eliminate merger costs by year end. We have strong momentum heading into the year with an improving loan growth trajectory and growing fee income businesses. We will shift from an integration mindset to an operating mindset focused on executional excellence and growth, accelerate investments in our businesses, all underpinned by our unwavering purpose. Our successes in 2021 reflect the efforts of tens of thousands of hardworking, purposeful teammates and I applaud them for their accomplishments as we continue building Truist.”
Fourth Quarter and Full year 2021 Performance Highlights
•Earnings per diluted common share for the fourth quarter of 2021 were $1.13
◦Adjusted diluted earnings per share were $1.38 up $0.20 per share, or 17%, compared to fourth quarter 2020
◦ROA was 1.19%; adjusted ROA was 1.43%
◦ROCE was 9.8%; adjusted ROCE was 11.9%
◦ROTCE was 18.9%; adjusted ROTCE was 22.6%
•Taxable-equivalent revenue for the fourth quarter of 2021 was $5.6 billion
◦Taxable-equivalent revenue was down slightly compared to third quarter 2021 and down 1.6% compared to fourth quarter 2020
◦Noninterest income was down 1.8% compared to third quarter 2021 and up 1.7% compared to fourth quarter 2020
▪Excluding the impacts of lower income from assets for retiree benefits that is offset by lower personnel expense, noninterest income was stable compared to third quarter of 2021
▪Strong results from investment banking and insurance
◦Net interest income was up 0.3% compared to third quarter 2021 and down 3.7% compared to fourth quarter 2020
◦Net interest margin was 2.76%, down five basis points from third quarter 2021
▪Core net interest margin was 2.55%, down three basis points from third quarter 2021, primarily driven by lower Paycheck Protection Program (PPP) fees and continued liquidity build
•Noninterest expense for the fourth quarter of 2021 was $3.7 billion, down 2.5% compared to third quarter 2021 and 3.5% compared to fourth quarter 2020
◦Adjusted noninterest expense was $3.1 billion, down 3.9% compared to third quarter 2021 and 1.4% compared to fourth quarter 2020
◦GAAP efficiency ratio was 66.5%, compared to 67.8% for third quarter 2021
◦Adjusted efficiency ratio was 56.0%, compared to 57.9% for third quarter 2021
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•Asset quality remains excellent, reflecting our prudent risk culture, diverse portfolio, improving economic conditions, and the ongoing effects of government stimulus
◦Nonperforming assets were 0.21% of total assets, down two basis points from third quarter 2021
◦Net charge-offs were 0.25% of average loans and leases, up six basis points compared to third quarter 2021
◦The ALLL ratio was 1.53% compared to 1.65% for third quarter 2021
▪Provision for credit losses was a benefit of $103 million for fourth quarter 2021, primarily reflecting an improving economic outlook
▪The ALLL coverage ratio was 4.07X nonperforming loans and leases held for investment, versus 4.35X in third quarter 2021
•Capital and liquidity levels remained strong; deployed capital through organic loan growth, dividend, share repurchases and acquisitions
◦Common equity tier 1 to risk-weighted assets was 9.6%
◦Repurchased $500 million of common shares
◦Completed acquisition of Service Finance, LLC to expand point-of-sale lending capabilities
◦Consolidated average LCR ratio was 114%
•Full year 2021 financial highlights
◦Earnings per diluted common share were $4.47, up 45% from 2020; Adjusted earnings per diluted common share were $5.53, up $1.73, or 46%, from 2020
▪Improvement in earnings primarily driven by reserve releases
◦Total taxable-equivalent revenues of $22.4 billion were down $426 million, or 1.9%, compared to $22.8 billion in 2020
▪Net interest income was down $820 million, or 5.9%, primarily due to lower purchase accounting accretion and the lower rate environment
▪Noninterest income was up $411 million, or 4.6%; excluding securities gains, noninterest income was up $813 million, or 9.6%,
•2021 was highlighted by strong performance from investment banking, insurance, wealth and card and payment related fees
◦Noninterest expense was up $219 million, or 1.5%; Adjusted noninterest expense was up $154 million, or 1.2%; increase driven by incentives expense due to stronger performance and insurance acquisitions
◦Provision for credit losses was down $3.1 billion primarily due to reserve releases in the current year as the economic outlook improved compared to reserve builds in 2020 due to uncertainty regarding the pandemic
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| EARNINGS HIGHLIGHTS | Change 4Q21 vs. | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in millions, except per share data) | 4Q21 | 3Q21 | 4Q20 | 3Q21 | 4Q20 | ||||||||||
| Net income available to common shareholders | $ | 1,524 | $ | 1,616 | $ | 1,228 | $ | (92) | $ | 296 | |||||
| Diluted earnings per common share | 1.13 | 1.20 | 0.90 | (0.07) | 0.23 | ||||||||||
| Net interest income - taxable equivalent | $ | 3,267 | $ | 3,261 | $ | 3,394 | $ | 6 | $ | (127) | |||||
| Noninterest income | 2,323 | 2,365 | 2,285 | (42) | 38 | ||||||||||
| Total taxable-equivalent revenue | $ | 5,590 | $ | 5,626 | $ | 5,679 | $ | (36) | $ | (89) | |||||
| Less taxable-equivalent adjustment | 24 | 28 | 28 | ||||||||||||
| Total revenue | $ | 5,566 | $ | 5,598 | $ | 5,651 | |||||||||
| Return on average assets | 1.19 | % | 1.28 | % | 1.05 | % | (0.09) | % | 0.14 | % | |||||
| Return on average risk-weighted assets (current quarter is preliminary) | 1.64 | 1.77 | 1.40 | (0.13) | 0.24 | ||||||||||
| Return on average common shareholders' equity | 9.8 | 10.2 | 7.9 | (0.4) | 1.9 | ||||||||||
| Return on average tangible common shareholders' equity (1) | 18.9 | 19.3 | 15.0 | (0.4) | 3.9 | ||||||||||
| Net interest margin - taxable equivalent | 2.76 | 2.81 | 3.08 | (0.05) | (0.32) |
(1)Excludes certain items as detailed in the non-GAAP reconciliations in the Quarterly Performance Summary.
Fourth Quarter 2021 compared to Third Quarter 2021
Total taxable-equivalent revenue was $5.6 billion for the fourth quarter of 2021, a decrease of $36 million, or 0.6%, compared to the prior quarter.
Net interest income for the fourth quarter of 2021 was up slightly compared to the prior quarter due primarily to growth in the securities portfolio and lower funding costs, partially offset by lower purchase accounting accretion and lower fees from PPP loans. Average earning assets increased $9.1 billion, or 2.0%, compared to the prior quarter. Average securities increased $7.1 billion, or 4.9%, driven by strong deposit growth. In addition, average trading assets increased $1.0 billion or 16.6%, and average total loans increased $736 million, or 0.3%. Average deposits increased $8.2 billion, or 2.0%, primarily due to the ongoing impacts of fiscal and monetary stimulus and a seasonal increase for public funds.
The net interest margin was 2.76% for the fourth quarter, down five basis points compared to the prior quarter. The decline in the net interest margin was primarily due to lower purchase accounting accretion, lower fees from PPP loans and higher levels of liquidity. The yield on the total loan portfolio for the fourth quarter was 3.79%, down 11 basis points compared to the prior quarter primarily due to lower purchase accounting accretion, lower fees from PPP, and loan mix changes. The yield on the average securities portfolio for the fourth quarter was 1.57%, up seven basis points compared to the prior quarter. Core net interest margin was 2.55%, for the fourth quarter, down three basis points compared to the prior quarter driven by lower PPP fees and higher levels of liquidity.
The average cost of total deposits was 0.03%, flat compared to the prior quarter. The average cost on long-term debt was 1.35%, down 26 basis points compared to the prior quarter resulting from new hedging activity.
The provision for credit losses was a benefit of $103 million and net charge-offs were $182 million for the fourth quarter, compared to a benefit of $324 million and net charge-offs of $135 million, respectively, for the prior quarter. The net charge-off rate for the current quarter of 0.25% was up six basis points compared to third quarter 2021 due primarily to seasonally higher net losses in the consumer portfolio in the current period coupled with lower recoveries in the commercial portfolio.
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Noninterest income was $2.3 billion, a decrease of $42 million, or 1.8%, compared to the prior quarter. Other income decreased $107 million primarily due to valuation changes from assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense, and lower investment income from the Company's SBIC investments, and a valuation decrease for derivatives related to Visa shares. Residential mortgage income decreased $20 million, or 11%, primarily due to lower production income (due to lower volumes and margins). These decreases were partially offset by a $61 million, or 19%, increase in investment banking and trading income due to higher syndication fees, structured real estate, and merger and acquisition fees, partially offset by lower bond and equity origination fees. Additionally, insurance income increased $21 million, or 3.3%, primarily due to seasonality.
Noninterest expense was $3.7 billion for the fourth quarter, down $95 million, or 2.5%, compared to the prior quarter. Merger-related and restructuring charges increased $40 million primarily due to costs in connection with system conversions and data center migrations. Incremental operating expenses related to the merger increased $24 million compared to third quarter 2021 primarily reflected in personnel expense. The prior quarter also included a $30 million professional fee to develop an ongoing program to identify, prioritize, and roadmap teammate generated revenue growth and expense savings opportunities beyond the merger. Excluding the aforementioned items and the amortization of intangibles, adjusted noninterest expense was down $126 million, or 3.9%, compared to the prior quarter. Personnel expense decreased $91 million, or 4.2%, compared to third quarter 2021 due to lower incentives (primarily equity-based compensation due to retirement eligible teammates being fully expensed by the end of the third quarter), lower medical insurance claims, lower salaries driven by fewer FTEs, and lower other employee benefits due to the decrease in noninterest income for post-retirement benefits. Equipment expense decreased $30 million, or 19%, primarily due to lower equipment purchases. Marketing and customer development expense decreased $26 million, or 28%, due to advertising campaigns in the prior quarter to expand Truist brand awareness. Other expense increased $29 million primarily due to increased operating losses.
The provision for income taxes was $367 million for the fourth quarter of 2021, compared to $423 million for the prior quarter. The effective tax rate for the fourth quarter of 2021 was 18.6%, compared to 19.9% for the prior quarter, primarily due to discrete tax benefits in the current quarter.
Fourth Quarter 2021 compared to Fourth Quarter 2020
Total taxable-equivalent revenues were $5.6 billion for the fourth quarter of 2021, a decrease of $89 million, or 1.6%, compared to the earlier quarter.
Net interest income for the fourth quarter of 2021 was down $127 million, or 3.7%, compared to the earlier quarter due to lower purchase accounting accretion, lower rates on earning assets, lower PPP fees, and a decrease in loan balances. These decreases were partially offset by growth in the securities portfolio and lower funding costs. Average earning assets increased $32.2 billion, or 7.3%, compared to the earlier quarter. The increase in average earning assets reflects a $51.4 billion, or 50%, increase in average securities, while average total loans and leases decreased $17.1 billion, or 5.6%, and average other earning assets decreased $4.3 billion, or 18%. The growth in average earning assets is a result of an increase in investment securities driven by strong deposit growth resulting from fiscal and monetary stimulus. Average deposits increased $35.7 billion, or 9.5%, compared to the earlier quarter, while average long-term debt decreased $2.7 billion, or 6.6%.
Net interest margin was 2.76%, down 32 basis points compared to the earlier quarter. The yield on the total loan portfolio for the fourth quarter of 2021 was 3.79%, down 33 basis points compared to the earlier quarter, reflecting the impact of lower purchase accounting accretion and a lower rate environment. The yield on the average securities portfolio was 1.57%, down three basis points compared to the earlier quarter primarily due to higher premium amortization.
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The average cost of total deposits was 0.03%, down four basis points compared to the earlier quarter. The average cost on short-term borrowings was 0.55%, down 22 basis points compared to the earlier quarter. The average cost on long-term debt was 1.35%, down 29 basis points compared to the earlier quarter. The lower rates on interest-bearing liabilities reflect the lower rate environment.
The provision for credit losses was a benefit of $103 million, compared to a cost of $177 million for the earlier quarter. The current quarter includes a reserve release due to the improving economic outlook. Net charge-offs for the fourth quarter of 2021 totaled $182 million compared to $205 million in the earlier quarter. The net charge-off ratio for the current quarter of 0.25% was down 2 basis points compared to the earlier quarter.
Noninterest income for the fourth quarter of 2021 increased $38 million, or 1.7%, compared to the earlier quarter. Insurance income increased $121 million, or 22%, due to acquisitions, as well as organic growth. Investment banking and trading income increased $23 million, or 6.5%, due to higher syndication fees and merger and acquisition fees, partially offset by lower trading income. Other income decreased $67 million primarily due to valuation changes from assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense, and a valuation decrease for derivatives related to Visa shares. Residential mortgage banking income decreased $34 million, or 18%, primarily due to lower production related revenues as a result of lower gain on sale margins and volumes, partially offset by higher servicing income due to lower prepayment rates.
Noninterest expense for the fourth quarter of 2021 was down $133 million, or 3.5%, compared to the earlier quarter. Merger-related and restructuring charges decreased $96 million primarily due to facilities impairments in the earlier quarter, partially offset by costs in connection with a voluntary separation and retirement program in the current period. Incremental operating expenses related to the merger increased $36 million, primarily reflected in professional fees and outside processing. Excluding the aforementioned items and the amortization of intangibles, adjusted noninterest expense was down $43 million, or 1.4%, compared to the earlier quarter. Personnel expense decreased $12 million, or 0.6%, as higher incentive expenses due to variable compensation from higher revenues and improved overall performance relative to targets were largely offset by lower salaries due to fewer FTEs and lower other employee benefits due to the decrease in noninterest income for post-retirement benefits. Additionally, net occupancy expense decreased $21 million, or 10%, primarily due to branch and property consolidations. Other expense increased $20 million due to higher operating losses, teammate travel and other costs, partially offset by a decrease of $42 million for non-service-related pension cost components.
The provision for income taxes was $367 million for the fourth quarter of 2021, compared to $311 million for the earlier quarter. This produced an effective tax rate for the fourth quarter of 2021 of 18.6%, compared to 19.0% for the earlier quarter. The effective tax rate for both the fourth quarter of 2021 and 2020 reflect the impact of discrete tax benefits.
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| LOANS AND LEASES | ||||||||
|---|---|---|---|---|---|---|---|---|
| (dollars in millions) | ||||||||
| Average balances | 4Q21 | 3Q21 | Change | % Change | ||||
| Commercial: | ||||||||
| Commercial and industrial | $ | 134,804 | $ | 134,942 | $ | (138) | (0.1) | % |
| CRE | 24,396 | 24,849 | (453) | (1.8) | ||||
| Commercial construction | 5,341 | 5,969 | (628) | (10.5) | ||||
| Total commercial | 164,541 | 165,760 | (1,219) | (0.7) | ||||
| Consumer: | ||||||||
| Residential mortgage | 47,185 | 45,369 | 1,816 | 4.0 | ||||
| Residential home equity and direct | 25,146 | 25,242 | (96) | (0.4) | ||||
| Indirect auto | 26,841 | 26,830 | 11 | — | ||||
| Indirect other | 10,978 | 11,112 | (134) | (1.2) | ||||
| Student | 6,884 | 7,214 | (330) | (4.6) | ||||
| Total consumer | 117,034 | 115,767 | 1,267 | 1.1 | ||||
| Credit card | 4,769 | 4,632 | 137 | 3.0 | ||||
| Total loans and leases held for investment | $ | 286,344 | $ | 286,159 | $ | 185 | 0.1 | |
| In 4Q21, the Company reclassified the lease financing portfolio to the commercial and industrial portfolio. Prior periods were reclassified to conform to the current presentation. |
Average loans and leases held for investment for the fourth quarter of 2021 were $286.3 billion, up $185 million, or 0.1%, compared to the third quarter of 2021. Excluding a $2.0 billion decrease in average PPP loans, average loans held for investment were up $2.2 billion, or 0.8%.
Average commercial loans decreased $1.2 billion, or 0.7%, as $1.8 billion, or 1.4%, growth within the commercial and industrial portfolio, excluding PPP, was more than offset by a $2.0 billion decrease in average PPP loans (commercial and industrial), a $628 million decrease in average commercial construction loans, and a $453 million decrease in average CRE loans.
Average consumer loans increased $1.3 billion, or 1.1%, primarily due to a $1.8 billion increase in residential mortgages due to the continued strategy to put certain correspondent channel production onto the balance sheet and lower prepayments. Student loans declined $330 million primarily due to paydowns on government guaranteed loans. Indirect other was down $134 million due to a seasonal decline in Sheffield.
| DEPOSITS | ||||||||
|---|---|---|---|---|---|---|---|---|
| (dollars in millions) | ||||||||
| Average balances | 4Q21 | 3Q21 | Change | % Change | ||||
| Noninterest-bearing deposits | $ | 146,492 | $ | 141,738 | $ | 4,754 | 3.4 | % |
| Interest checking | 110,506 | 107,802 | 2,704 | 2.5 | ||||
| Money market and savings | 137,676 | 136,094 | 1,582 | 1.2 | ||||
| Time deposits | 16,292 | 17,094 | (802) | (4.7) | ||||
| Total deposits | $ | 410,966 | $ | 402,728 | $ | 8,238 | 2.0 |
Average deposits for the fourth quarter of 2021 were $411.0 billion, an increase of $8.2 billion, or 2.0%, compared to the prior quarter. Average noninterest bearing deposits grew 3.4% compared to the prior quarter and represented 35.6% of total deposits for the fourth quarter of 2021, compared to 35.2% for the prior quarter. Average interest checking and money market and savings grew 2.5% and 1.2%, respectively, compared to the prior quarter.
Average time deposits decreased 4.7% primarily due to the maturity of higher-cost personal accounts.
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| CAPITAL RATIOS | 4Q21 | 3Q21 | 2Q21 | 1Q21 | 4Q20 | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Risk-based: | (preliminary) | |||||||||
| Common equity Tier 1 | 9.6 | % | 10.1 | % | 10.2 | % | 10.1 | % | 10.0 | % |
| Tier 1 | 11.3 | 11.9 | 12.0 | 12.0 | 12.1 | |||||
| Total | 13.2 | 13.9 | 14.2 | 14.3 | 14.5 | |||||
| Leverage | 8.7 | 9.0 | 9.1 | 9.4 | 9.6 | |||||
| Supplementary leverage | 7.4 | 7.8 | 7.9 | 8.3 | 8.7 |
Capital ratios remained strong compared to the regulatory requirements for well capitalized banks. Truist declared common dividends of $0.48 per share during the fourth quarter of 2021 and repurchased $500 million of common stock. The dividend and total payout ratios for the fourth quarter of 2021 were 42% and 75%, respectively.
Truist CET1 ratio was 9.6% as of December 31, 2021. The decline compared to the third quarter 2021 CET1 ratio reflects the $1.8 billion of capital deployed through the acquisition of Service Finance, LLC, the repurchase of $500 million in common stock and strong loan growth driving an increase in risk-weighted assets.
Truist's average LCR was 114% for the three months ended December 31, 2021, compared to the regulatory minimum of 100%. Truist continues to maintain a strong liquidity position and is prepared to meet the funding needs of clients.
| ASSET QUALITY | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in millions) | 4Q21 | 3Q21 | 2Q21 | 1Q21 | 4Q20 | ||||||||||
| Total nonperforming assets | $ | 1,163 | $ | 1,204 | $ | 1,192 | $ | 1,299 | $ | 1,387 | |||||
| Total performing TDRs | 1,390 | 1,475 | 1,501 | 1,539 | 1,361 | ||||||||||
| Total loans 90 days past due and still accruing | 1,930 | 1,872 | 2,068 | 2,072 | 2,008 | ||||||||||
| Total loans 30-89 days past due | 2,044 | 1,823 | 1,824 | 1,788 | 2,220 | ||||||||||
| Nonperforming loans and leases as a percentage of loans and leases held for investment | 0.38 | % | 0.38 | % | 0.37 | % | 0.40 | % | 0.44 | % | |||||
| Nonperforming loans and leases as a percentage of loans and leases, including loans held for sale | 0.38 | 0.40 | 0.39 | 0.42 | 0.44 | ||||||||||
| Nonperforming assets as a percentage of total assets | 0.21 | 0.23 | 0.23 | 0.25 | 0.27 | ||||||||||
| Loans 30-89 days past due and still accruing as a percentage of loans and leases | 0.71 | 0.64 | 0.64 | 0.61 | 0.74 | ||||||||||
| Loans 90 days or more past due and still accruing as a percentage of loans and leases | 0.67 | 0.66 | 0.72 | 0.71 | 0.67 | ||||||||||
| Loans 90 days or more past due and still accruing as a percentage of loans and leases, excluding PPP and other government guaranteed | 0.03 | 0.03 | 0.04 | 0.04 | 0.04 | ||||||||||
| Allowance for loan and lease losses as a percentage of loans and leases held for investment | 1.53 | 1.65 | 1.79 | 1.94 | 1.95 | ||||||||||
| Net charge-offs as a percentage of average loans and leases, annualized | 0.25 | 0.19 | 0.20 | 0.33 | 0.27 | ||||||||||
| Ratio of allowance for loan and lease losses to net charge-offs, annualized | 6.14x | 8.79x | 8.98x | 5.87x | 7.15x | ||||||||||
| Ratio of allowance for loan and lease losses to nonperforming loans and leases held for investment | 4.07x | 4.35x | 4.83x | 4.84x | 4.39x |
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Nonperforming assets totaled $1.2 billion at December 31, 2021, down $41 million compared to September 30, 2021 due to declines in nonperforming loans held for sale and commercial loans, partially offset by an increase in indirect auto. Nonperforming loans and leases represented 0.38% of total loans and leases, down two basis points compared to September 30, 2021, primarily due to a decline in nonperforming loans held for sale. Nonperforming loans and leases held for investment were 0.38% of loans and leases held for investment at December 31, 2021, unchanged from the prior quarter.
Performing TDRs were down $85 million compared to the prior quarter primarily due to declines in the commercial and industrial and residential mortgage portfolios.
Loans 90 days or more past due and still accruing totaled $1.9 billion at December 31, 2021, up $58 million compared to the prior quarter. The ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases was 0.67% at December 31, 2021, up one basis point from the prior quarter. Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases was 0.03% at December 31, 2021, unchanged from September 30, 2021.
Loans 30-89 days past due and still accruing of $2.0 billion at December 31, 2021 were up seven basis points compared to the prior quarter due to a seasonal increase in the consumer portfolios.
Net charge-offs during the fourth quarter totaled $182 million, up $47 million compared to the prior quarter. The net charge-off ratio was 0.25%, up six basis points compared to the prior quarter due primarily to seasonally higher net losses in the consumer portfolio in the current period coupled with lower recoveries in the commercial portfolio.
The allowance for credit losses was $4.7 billion and includes $4.4 billion for the allowance for loan and lease losses and $260 million for the reserve for unfunded commitments. The ALLL ratio was 1.53% compared to 1.65% at September 30, 2021. The ALLL covered nonperforming loans and leases held for investment 4.07X compared to 4.35X at September 30, 2021. At December 31, 2021, the ALLL was 6.14X annualized net charge-offs, compared to 8.79X at September 30, 2021.
| SEGMENT RESULTS | Change 4Q21 vs. | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in millions) | ||||||||||
| Segment Net Income | 4Q21 | 3Q21 | 4Q20 | 3Q21 | 4Q20 | |||||
| Consumer Banking and Wealth | $ | 734 | $ | 869 | $ | 848 | $ | (135) | $ | (114) |
| Corporate and Commercial Banking | 1,024 | 1,074 | 922 | (50) | 102 | |||||
| Insurance Holdings | 117 | 105 | 99 | 12 | 18 | |||||
| Other, Treasury & Corporate | (273) | (344) | (539) | 71 | 266 | |||||
| Total net income | $ | 1,602 | $ | 1,704 | $ | 1,330 | $ | (102) | $ | 272 |
Truist operates and measures business activity across three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings, with functional activities included in Other, Treasury and Corporate. The Company’s business segment structure is based on the manner in which financial information is evaluated by management as well as the products and services provided or the type of client served. For additional information, see “Note 21. Operating Segments” of the Annual Report on Form 10-K for the year ended December 31, 2020.
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Fourth Quarter 2021 compared to Third Quarter 2021
Consumer Banking and Wealth (“CB&W”)
CB&W net income was $734 million for the fourth quarter of 2021, a decrease of $135 million compared to the prior quarter. Segment net interest income decreased $53 million primarily driven by a decline in the funding credit on deposits and lower purchase accounting accretion. The allocated provision for credit losses increased $64 million which reflects a lower reserve release than the prior quarter and seasonally higher charge offs. Noninterest income decreased $36 million driven by lower residential mortgage income due to lower production income (due to lower volumes and margins), as well as lower wealth income driven by lower brokerage volumes and increased fee waivers. Noninterest expense increased $21 million primarily due to higher operating losses and higher professional fees and outside processing, partially offset by lower personnel expenses.
Average loans held for investment increased $702 million, or 0.5%, compared to the prior quarter primarily due to higher residential mortgage, partially offset by lower mortgage warehouse lending and student loans. Average total deposits increased $5.8 billion, or 2.4%, compared to the prior quarter primarily due to the ongoing impacts of fiscal and monetary stimulus.
Corporate and Commercial Banking (“C&CB”)
C&CB net income was $1.0 billion for the fourth quarter of 2021, a decrease of $50 million compared to the prior quarter. Segment net interest income decreased $32 million due to lower fee income associated with PPP loan forgiveness, lower purchase accounting accretion, and lower funding credit on non-interest bearing deposits, partially offset by growth in core loan and deposit balances. The allocated provision for credit losses increased $81 million primarily due to a lower reserve release than the prior quarter and decreased recoveries. Noninterest income increased $37 million primarily due to strong investment banking results (2nd highest quarter) driven by higher syndicated finance, structured real estate, and record merger and acquisition fees in the quarter, partially offset by lower investment income from the Company's SBIC and other equity investments. Noninterest expense remained stable.
Average loans held for investment decreased $435 million, or 0.3%, compared to the prior quarter primarily due to a decline in PPP loans (commercial and industrial) and CRE loans, partially offset by increases in core commercial and industrial loans. Average total deposits increased $3.3 billion, or 2.2%, compared to the prior quarter primarily due to the inflows of seasonal municipal tax related deposits.
Insurance Holdings (“IH”)
IH net income was $117 million for the fourth quarter of 2021, an increase of $12 million compared to the prior quarter. Noninterest income increased $29 million primarily due to seasonality in property and casualty insurance commissions. Noninterest expense increased $10 million primarily due to fee income based incentive expense increases along with higher merger related expenses in the quarter.
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Other, Treasury & Corporate (“OT&C”)
OT&C generated a net loss of $273 million for the fourth quarter of 2021, compared to a net loss of $344 million for the prior quarter. Segment net interest income increased $100 million primarily due to lower net funding credits on liabilities to other segments and higher earnings in the securities portfolio from purchases to utilize excess liquidity. The allocated provision for credit losses increased $78 million which reflects a reserve release in the prior quarter and a smaller release in the reserve for unfunded commitments in the current quarter. Noninterest income decreased $72 million primarily due to valuation changes from assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense and a valuation decrease for derivatives related to Visa shares as well as lower investment income from Truist Ventures related partnerships in the current quarter. Noninterest expense decreased $120 million primarily due to lower equipment and marketing expenses and lower executive incentive expenses and benefits, partially offset by higher merger related and restructuring charges in the current quarter.
Fourth Quarter 2021 compared to Fourth Quarter 2020
Consumer Banking and Wealth
CB&W net income was $734 million for the fourth quarter of 2021, a decrease of $114 million compared to the earlier quarter. Segment net interest income decreased $206 million primarily due to a decline in the funding credit provided on deposits, lower purchase accounting accretion, and a decline in average loans. The allocated provision for credit losses decreased $57 million which reflects the impact of an allowance build in the earlier quarter. Noninterest income and noninterest expense were stable compared to earlier quarter.
Corporate and Commercial Banking
C&CB net income was $1.0 billion for the fourth quarter of 2021, an increase of $102 million compared to the earlier quarter. Segment net interest income decreased $144 million primarily due to lower fee income associated with PPP loan forgiveness, reduced funding credit on deposits, lower purchase accounting accretion, and a decline in average loans, partially offset by higher spreads on loans. The allocated provision for credit losses decreased $243 million primarily reflecting an reserve release in the current quarter, whereas the earlier quarter included a reserve build. The earlier quarter reflected significant uncertainty related to the economic impacts resulting from the pandemic, whereas the current quarter includes a reserve release due to the improving economic outlook. Noninterest income was stable compared to the earlier quarter with higher investment banking and trading income offset by lower commercial mortgage income and lower lease related disposition gains. Noninterest expense decreased $22 million primarily due to lower merger related and restructuring charges in the current quarter as well as lower operating lease depreciation and lower amortization of intangibles in the current quarter.
Insurance Holdings
IH net income was $117 million for the fourth quarter of 2021, an increase of $18 million compared to the earlier quarter. Noninterest income increased $119 million primarily due to acquisitions and higher property and casualty insurance production from strong organic growth. Noninterest expense increased $96 million primarily due to higher performance-based incentives and amortization of intangibles related to acquisitions.
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Other, Treasury & Corporate
OT&C generated a net loss of $273 million in the fourth quarter of 2021, compared to a net loss of $539 million in the earlier quarter. Segment net interest income increased $229 million primarily due to lower net funding credits on liabilities to other segments and higher earnings in the securities portfolio from purchases to utilize excess liquidity. The allocated provision for credit losses increased $23 million which reflects a reserve release in the earlier quarter. Noninterest income decreased $78 million primarily due to valuation changes from assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense, and a valuation decrease for derivatives related to Visa shares. Noninterest expense decreased $202 million primarily due to lower merger related charges in the current quarter and lower other employee benefits expense due to the decrease in noninterest income for post-retirement benefits.
Earnings Presentation and Quarterly Performance Summary
To listen to Truist's live fourth quarter 2021 earnings conference call at 8:30 a.m. ET today, please call 855-303-0072 and enter the participant code 100038. A presentation will be used during the earnings conference call and is available on our website at https://ir.truist.com/events-and-presentation. Replays of the conference call will be available for 30 days by dialing 888-203-1112 (access code 100038).
The presentation, including an appendix reconciling non-GAAP disclosures, and Truist's Fourth Quarter 2021 Quarterly Performance Summary, which contains detailed financial schedules, are available at https://ir.truist.com/earnings.
About Truist
Truist Financial Corporation is a purpose-driven financial services company committed to inspiring and building better lives and communities. Formed by the historic merger of equals of BB&T and SunTrust, Truist has leading market share in many high-growth markets in the country. The company offers a wide range of services including retail, small business and commercial banking; asset management; capital markets; commercial real estate; corporate and institutional banking; insurance; mortgage; payments; specialized lending; and wealth management. Headquartered in Charlotte, North Carolina, Truist is a top 10 U.S. commercial bank with total assets of $541 billion as of December 31, 2021. Truist Bank, Member FDIC. Learn more at Truist.com.
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Capital ratios and return on risk-weighted assets are preliminary.
This news release 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 of the Corporation's performance and the efficiency of its operations. Management believes these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the effects of significant items in the current period. The Corporation believes a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. Truist’s management believes investors may find these non-GAAP financial measures useful. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Below is a listing of the types of non-GAAP measures used in this news release:
•Adjusted Efficiency Ratio - The adjusted efficiency ratio is non-GAAP in that it excludes securities gains (losses), amortization of intangible assets, merger-related and restructuring charges, and other selected items. Truist's management uses this measure in their analysis of the Corporation's performance. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges.
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•Tangible Common Equity and Related Measures - Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist’s management uses these measures to assess the quality of capital and returns relative to balance sheet risk.
•Core NIM - Core net interest margin is a non-GAAP measure that adjusts net interest margin to exclude the impact of purchase accounting. The purchase accounting marks and related amortization for a) securities acquired from the FDIC in the Colonial Bank acquisition and b) loans, deposits and long-term debt from SunTrust and other acquisitions are excluded to approximate the yields paid by clients. Truist's management believes the adjustments to the calculation of net interest margin for certain assets and liabilities acquired provide investors with useful information related to the performance of Truist's earning assets.
•Adjusted Diluted EPS - The adjusted diluted earnings per share is non-GAAP in that it excludes merger-related and restructuring charges and other selected items, net of tax. Truist's management uses this measure in their analysis of the Corporation's performance. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges.
•Performance Ratios - The adjusted performance ratios, including adjusted return on average assets, adjusted return on average common shareholders’ equity, and adjusted return on average tangible common shareholders’ equity, are non-GAAP in that they exclude merger-related and restructuring charges, selected items, and, in the case of return on average tangible common shareholders' equity, amortization of intangible assets. Truist's management uses these measures in their analysis of the Corporation's performance. Truist's management believes these measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrate the effects of significant gains and charges.
•Insurance Holdings Adjusted EBITDA - 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 other selected items. Truist's management uses this measure in its analysis of the Corporation's Insurance Holdings segment. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges.
•Allowance for Loan and Lease Losses and Unamortized Fair Value Mark as a Percentage of Gross Loans and Leases - Allowance for loan and lease losses and unamortized fair value mark as a percentage of gross loans and leases is a non-GAAP measurement of credit reserves that is calculated by adjusting the ALLL and loans and leases held for investment by the unamortized fair value mark. Truist's management uses these measures to assess loss absorption capacity.
A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure is included in the appendix to Truist's Fourth Quarter 2021 Earnings Presentation, which is available at https://ir.truist.com/earnings.
This news release 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,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” “may,” “will,” “should,” “would,” “could” and other similar expressions are intended to identify these forward-looking statements.
Forward-looking statements are not based on historical facts but instead represent management's expectations and assumptions regarding Truist's business, the economy, and other future conditions. Such statements involve inherent uncertainties, risks, and changes in circumstances that are difficult to predict. As such, Truist’s actual results may differ materially from those contemplated by forward-looking statements. While there can be no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those contemplated by forward-looking statements include the following, without limitation, as well as the risks and uncertainties more fully discussed under Part I, Item 1A-Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020 and in Truist's subsequent filings with the Securities and Exchange Commission:
•risks and uncertainties relating to the Merger of heritage BB&T and heritage SunTrust, including the ability to successfully integrate the companies or to realize the anticipated benefits of the Merger;
•expenses relating to the Merger and integration of heritage BB&T and heritage SunTrust;
•deposit attrition, client loss or revenue loss following completed mergers or acquisitions may be greater than anticipated;
•the COVID-19 pandemic disrupted the global economy and adversely impacted Truist’s financial condition and results of operations, including through increased expenses, reduced fee income and net interest margin, decreased demand for certain types of loans, and increases in the allowance for credit losses; a resurgence of the pandemic, whether due to new variants of the coronavirus or other factors, could reintroduce or prolong these negative impacts and also adversely affect Truist’s capital and liquidity position or cost of capital, impair the ability of borrowers to repay outstanding loans, cause an outflow of deposits, and impair goodwill or other assets;
•Truist is subject to credit risk by lending or committing to lend money, and may have more credit risk and higher credit losses to the extent that loans are concentrated by loan type, industry segment, borrower type or location of the borrower or collateral;
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•changes in the interest rate environment, including the replacement of LIBOR as an interest rate benchmark, which could adversely affect Truist’s revenue and expenses, the value of assets and obligations, and the availability and cost of capital, cash flows, and liquidity;
•inability to access short-term funding or liquidity, loss of client deposits or changes in Truist’s credit ratings, which could increase the cost of funding or limit access to capital markets;
•risk management oversight functions may not identify or address risks adequately, and management may not be able to effectively manage credit risk;
•risks resulting from the extensive use of models in Truist’s business, which may impact decisions made by management and regulators;
•failure to execute on strategic or operational plans, including the ability to successfully complete or integrate mergers and acquisitions;
•increased competition, including from (i) new or existing competitors that could have greater financial resources or be subject to different regulatory standards, and (ii) products and services offered by non-bank financial technology companies, may reduce Truist’s client base, cause Truist to lower prices for its products and services in order to maintain market share or otherwise adversely impact Truist’s businesses or results of operations;
•failure to maintain or enhance Truist’s competitive position with respect to new products, services and technology, whether it fails to anticipate client expectations or because its technological developments fail to perform as desired or do not achieve market acceptance or regulatory approval or for other reasons, may cause Truist to lose market share or incur additional expense;
•negative public opinion, which could damage Truist’s reputation;
•increased scrutiny regarding Truist’s consumer sales practices, training practices, incentive compensation design, and governance;
•regulatory matters, litigation or other legal actions, which may result in, among other things, costs, fines, penalties, restrictions on Truist’s business activities, reputational harm, negative publicity, or other adverse consequences;
•evolving legislative, accounting and regulatory standards, including with respect to capital and liquidity requirements, and results of regulatory examinations may adversely affect Truist’s financial condition and results of operations;
•the monetary and fiscal policies of the federal government and its agencies could have a material adverse effect on profitability;
•accounting policies and processes require management to make estimates about matters that are uncertain, including the potential write down to goodwill if there is an elongated period of decline in market value for Truist’s stock and adverse economic conditions are sustained over a period of time;
•general economic or business conditions, either globally, nationally or regionally, may be less favorable than expected, and instability in global geopolitical matters or volatility in financial markets could result in, among other things, slower deposit or asset growth, a deterioration in credit quality, or a reduced demand for credit, insurance, or other services;
•risks related to originating and selling mortgages, including repurchase and indemnity demands from purchasers related to representations and warranties on loans sold, which could result in an increase in the amount of losses for loan repurchases;
•risks relating to Truist’s role as a loan servicer, including an increase in the scope or costs of the services Truist is required to perform, without any corresponding increase in servicing fees or a breach of Truist’s obligations as servicer;
•Truist’s success depends on hiring and retaining key personnel, and if these individuals leave or change roles without effective replacements, Truist’s operations and integration activities could be adversely impacted, which could be exacerbated in the increased work-from-home environment caused by the COVID-19 pandemic as job markets may be less constrained by physical geography;
•fraud or misconduct by internal or external parties, which Truist may not be able to prevent, detect, or mitigate;
•security risks, including denial of service attacks, hacking, social engineering attacks targeting Truist’s teammates and clients, malware intrusion, data corruption attempts, system breaches, cyber-attacks, identity theft, ransomware attacks, and physical security risks, such as natural disasters, environmental conditions, and intentional acts of destruction, could result in the disclosure of confidential information, adversely affect Truist’s business or reputation or create significant legal or financial exposure; and
•widespread outages of operational, communication, or other systems, whether internal or provided by third parties, natural or other disasters (including acts of terrorism and pandemics), and the effects of climate change, including physical risks, such as more frequent and intense weather events, and risks related to the transition to a lower carbon economy, such as regulatory or technological changes or shifts in market dynamics or consumer preferences, could have an adverse effect on Truist’s financial condition and results of operations, lead to material disruption of Truist’s operations or the ability or willingness of clients to access Truist’s products and services.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by applicable law or regulation, Truist undertakes no obligation to revise or update any forward-looking statements.
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Document
Quarterly Performance Summary
Truist Financial Corporation
Fourth Quarter 2021
| Table of Contents | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarterly Performance Summary | ||||||||||||||||||
| Truist Financial Corporation | ||||||||||||||||||
| Page | ||||||||||||||||||
| Financial Highlights | 1 | |||||||||||||||||
| Financial Highlights - Five Quarter Trend | 2 | |||||||||||||||||
| Consolidated Statements of Income | 3 | |||||||||||||||||
| Consolidated Statements of Income - Five Quarter Trend | 4 | |||||||||||||||||
| Consolidated Ending Balance Sheets - Five Quarter Trend | 5 | |||||||||||||||||
| Average Balance Sheets | 6 | |||||||||||||||||
| Average Balance Sheets - Five Quarter Trend | 7 | |||||||||||||||||
| Average Balances and Rates - Quarters | 8 | |||||||||||||||||
| Credit Quality | 11 | |||||||||||||||||
| Segment Financial Performance - Five Quarter Trend | 15 | |||||||||||||||||
| Capital Information - Five Quarter Trend | 16 | |||||||||||||||||
| Selected Mortgage Banking Information & Additional Information | 17 | |||||||||||||||||
| Selected Items | 18 | |||||||||||||||||
| Non-GAAP Reconciliations | 18 | |||||||||||||||||
| Financial Highlights | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Quarter Ended | Year-to-Date | |||||||||||||||||
| December 31 | % | December 31 | % | |||||||||||||||
| (Dollars in millions, except per share data, shares in thousands) | 2021 | 2020 | Change | 2021 | 2020 | Change | ||||||||||||
| Summary Income Statement | ||||||||||||||||||
| Interest income - taxable equivalent (1) | $ | 3,435 | $ | 3,639 | (5.6) | % | $ | 13,882 | $ | 15,673 | (11.4) | % | ||||||
| Interest expense | 168 | 245 | (31.4) | 768 | 1,722 | (55.4) | ||||||||||||
| Net interest income - taxable equivalent | 3,267 | 3,394 | (3.7) | 13,114 | 13,951 | (6.0) | ||||||||||||
| Less: Taxable-equivalent adjustment | 24 | 28 | (14.3) | 108 | 125 | (13.6) | ||||||||||||
| Net interest income | 3,243 | 3,366 | (3.7) | 13,006 | 13,826 | (5.9) | ||||||||||||
| Provision for credit losses | (103) | 177 | (158.2) | (813) | 2,335 | (134.8) | ||||||||||||
| Net interest income after provision for credit losses | 3,346 | 3,189 | 4.9 | 13,819 | 11,491 | 20.3 | ||||||||||||
| Noninterest income | 2,323 | 2,285 | 1.7 | 9,290 | 8,879 | 4.6 | ||||||||||||
| Noninterest expense | 3,700 | 3,833 | (3.5) | 15,116 | 14,897 | 1.5 | ||||||||||||
| Income before income taxes | 1,969 | 1,641 | 20.0 | 7,993 | 5,473 | 46.0 | ||||||||||||
| Provision for income taxes | 367 | 311 | 18.0 | 1,556 | 981 | 58.6 | ||||||||||||
| Net income | 1,602 | 1,330 | 20.5 | 6,437 | 4,492 | 43.3 | ||||||||||||
| Noncontrolling interests | — | 1 | (100.0) | (3) | 10 | (130.0) | ||||||||||||
| Net income available to the bank holding company | 1,602 | 1,329 | 20.5 | 6,440 | 4,482 | 43.7 | ||||||||||||
| Preferred stock dividends and other | 78 | 101 | (22.8) | 407 | 298 | 36.6 | ||||||||||||
| Net income available to common shareholders | 1,524 | 1,228 | 24.1 | 6,033 | 4,184 | 44.2 | ||||||||||||
| Per Common Share Data | ||||||||||||||||||
| Earnings per share-basic | $ | 1.15 | $ | 0.91 | 26.4 | % | $ | 4.51 | $ | 3.11 | 45.0 | % | ||||||
| Earnings per share-diluted | 1.13 | 0.90 | 25.6 | 4.47 | 3.08 | 45.1 | ||||||||||||
| Earnings per share-adjusted diluted (2) | 1.38 | 1.18 | 16.9 | 5.53 | 3.80 | 45.5 | ||||||||||||
| Cash dividends declared | 0.48 | 0.45 | 6.7 | 1.86 | 1.80 | 3.3 | ||||||||||||
| Common shareholders' equity | 47.14 | 46.52 | 1.3 | 47.14 | 46.52 | 1.3 | ||||||||||||
| Tangible common shareholders' equity (2) | 25.47 | 26.78 | (4.9) | 25.47 | 26.78 | (4.9) | ||||||||||||
| End of period shares outstanding | 1,327,818 | 1,348,961 | (1.6) | 1,327,818 | 1,348,961 | (1.6) | ||||||||||||
| Weighted average shares outstanding-basic | 1,329,979 | 1,348,493 | (1.4) | 1,337,144 | 1,347,080 | (0.7) | ||||||||||||
| Weighted average shares outstanding-diluted | 1,343,029 | 1,361,763 | (1.4) | 1,349,378 | 1,358,289 | (0.7) | ||||||||||||
| Performance Ratios | ||||||||||||||||||
| Return on average assets | 1.19 | % | 1.05 | % | 1.23 | % | 0.90 | % | ||||||||||
| Return on average risk-weighted assets (current period is preliminary) | 1.64 | 1.40 | 1.69 | 1.18 | ||||||||||||||
| Return on average common shareholders' equity | 9.8 | 7.9 | 9.7 | 6.8 | ||||||||||||||
| Return on average tangible common shareholders' equity (2) | 18.9 | 15.0 | 18.4 | 13.4 | ||||||||||||||
| Net interest margin - taxable equivalent | 2.76 | 3.08 | 2.86 | 3.22 | ||||||||||||||
| Fee income ratio | 41.7 | 40.4 | 41.7 | 39.1 | ||||||||||||||
| Efficiency ratio-GAAP | 66.5 | 67.8 | 67.8 | 65.6 | ||||||||||||||
| Efficiency ratio-adjusted (2) | 56.0 | 55.9 | 56.7 | 55.9 | ||||||||||||||
| Credit Quality | ||||||||||||||||||
| Nonperforming assets as a percentage of: | ||||||||||||||||||
| Assets, including LHFS | 0.21 | % | 0.27 | % | 0.21 | % | 0.27 | % | ||||||||||
| Loans and leases plus foreclosed property | 0.39 | 0.46 | 0.39 | 0.46 | ||||||||||||||
| Net charge-offs as a percentage of average loans and leases | 0.25 | 0.27 | 0.24 | 0.36 | ||||||||||||||
| Allowance for loan and lease losses as a percentage of LHFI | 1.53 | 1.95 | 1.53 | 1.95 | ||||||||||||||
| Ratio of allowance for loan and lease losses to nonperforming LHFI | 4.07x | 4.39x | 4.07x | 4.39x | ||||||||||||||
| Average Balances | ||||||||||||||||||
| Assets | $ | 534,911 | $ | 503,181 | 6.3 | % | $ | 522,385 | $ | 499,085 | 4.7 | % | ||||||
| Securities (3) | 153,405 | 102,053 | 50.3 | 139,497 | 83,227 | 67.6 | ||||||||||||
| Loans and leases | 291,074 | 308,188 | (5.6) | 293,448 | 314,501 | (6.7) | ||||||||||||
| Deposits | 410,966 | 375,266 | 9.5 | 398,372 | 363,293 | 9.7 | ||||||||||||
| Common shareholders' equity | 61,807 | 61,991 | (0.3) | 62,112 | 61,379 | 1.2 | ||||||||||||
| Total shareholders' equity | 68,480 | 70,145 | (2.4) | 69,133 | 68,024 | 1.6 | ||||||||||||
| Period-End Balances | ||||||||||||||||||
| Assets | $ | 541,241 | $ | 509,228 | 6.3 | % | $ | 541,241 | $ | 509,228 | 6.3 | % | ||||||
| Securities (3) | 154,617 | 120,788 | 28.0 | 154,617 | 120,788 | 28.0 | ||||||||||||
| Loans and leases | 294,325 | 305,793 | (3.8) | 294,325 | 305,793 | (3.8) | ||||||||||||
| Deposits | 416,488 | 381,077 | 9.3 | 416,488 | 381,077 | 9.3 | ||||||||||||
| Common shareholders' equity | 62,598 | 62,759 | (0.3) | 62,598 | 62,759 | (0.3) | ||||||||||||
| Total shareholders' equity | 69,271 | 70,912 | (2.3) | 69,271 | 70,912 | (2.3) | ||||||||||||
| Capital Ratios (current quarter is preliminary) | ||||||||||||||||||
| Common equity Tier 1 | 9.6 | % | 10.0 | % | 9.6 | % | 10.0 | % | ||||||||||
| Tier 1 | 11.3 | 12.1 | 11.3 | 12.1 | ||||||||||||||
| Total | 13.2 | 14.5 | 13.2 | 14.5 | ||||||||||||||
| Leverage | 8.7 | 9.6 | 8.7 | 9.6 | ||||||||||||||
| Supplementary leverage | 7.4 | 8.7 | 7.4 | 8.7 | ||||||||||||||
| Applicable ratios are annualized. | ||||||||||||||||||
| (1) Interest income includes certain fees, deferred costs, fair value mark accretion, and dividends. | ||||||||||||||||||
| (2) Represents a non-GAAP measure. See the calculations and management's reasons for using these measures in the Non-GAAP Reconciliations and Preliminary Capital Information - Five Quarter Trend sections of this supplement. | ||||||||||||||||||
| (3) Includes AFS and HTM securities. Average balances reflect both AFS and HTM securities at amortized cost. Period-end balances reflect AFS securities at fair value and HTM securities at amortized cost. |
Truist Financial Corporation 1
| Financial Highlights - Five Quarter Trend | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | ||||||||||||||||
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | ||||||||||||
| (Dollars in millions, except per share data, shares in thousands) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||
| Summary Income Statement | ||||||||||||||||
| Interest income - taxable equivalent (1) | $ | 3,435 | $ | 3,454 | $ | 3,471 | $ | 3,522 | $ | 3,639 | ||||||
| Interest expense | 168 | 193 | 198 | 209 | 245 | |||||||||||
| Net interest income - taxable equivalent | 3,267 | 3,261 | 3,273 | 3,313 | 3,394 | |||||||||||
| Less: Taxable-equivalent adjustment | 24 | 28 | 28 | 28 | 28 | |||||||||||
| Net interest income | 3,243 | 3,233 | 3,245 | 3,285 | 3,366 | |||||||||||
| Provision for credit losses | (103) | (324) | (434) | 48 | 177 | |||||||||||
| Net interest income after provision for credit losses | 3,346 | 3,557 | 3,679 | 3,237 | 3,189 | |||||||||||
| Noninterest income | 2,323 | 2,365 | 2,405 | 2,197 | 2,285 | |||||||||||
| Noninterest expense | 3,700 | 3,795 | 4,011 | 3,610 | 3,833 | |||||||||||
| Income before income taxes | 1,969 | 2,127 | 2,073 | 1,824 | 1,641 | |||||||||||
| Provision for income taxes | 367 | 423 | 415 | 351 | 311 | |||||||||||
| Net income | 1,602 | 1,704 | 1,658 | 1,473 | 1,330 | |||||||||||
| Noncontrolling interests | — | — | 1 | (4) | 1 | |||||||||||
| Net income available to the bank holding company | 1,602 | 1,704 | 1,657 | 1,477 | 1,329 | |||||||||||
| Preferred stock dividends and other | 78 | 88 | 98 | 143 | 101 | |||||||||||
| Net income available to common shareholders | 1,524 | 1,616 | 1,559 | 1,334 | 1,228 | |||||||||||
| Per Common Share Data | ||||||||||||||||
| Earnings per share-basic | $ | 1.15 | $ | 1.21 | $ | 1.16 | $ | 0.99 | $ | 0.91 | ||||||
| Earnings per share-diluted | 1.13 | 1.20 | 1.16 | 0.98 | 0.90 | |||||||||||
| Earnings per share-adjusted diluted (2) | 1.38 | 1.42 | 1.55 | 1.18 | 1.18 | |||||||||||
| Cash dividends declared | 0.48 | 0.48 | 0.45 | 0.45 | 0.45 | |||||||||||
| Common shareholders' equity | 47.14 | 46.62 | 46.20 | 45.17 | 46.52 | |||||||||||
| Tangible common shareholders' equity (2) | 25.47 | 26.34 | 26.50 | 25.53 | 26.78 | |||||||||||
| End of period shares outstanding | 1,327,818 | 1,334,892 | 1,334,770 | 1,344,845 | 1,348,961 | |||||||||||
| Weighted average shares outstanding-basic | 1,329,979 | 1,334,825 | 1,338,302 | 1,345,666 | 1,348,493 | |||||||||||
| Weighted average shares outstanding-diluted | 1,343,029 | 1,346,854 | 1,349,492 | 1,358,932 | 1,361,763 | |||||||||||
| Performance Ratios | ||||||||||||||||
| Return on average assets | 1.19 | % | 1.28 | % | 1.28 | % | 1.17 | % | 1.05 | % | ||||||
| Return on average risk-weighted assets (current quarter is preliminary) | 1.64 | 1.77 | 1.76 | 1.58 | 1.40 | |||||||||||
| Return on average common shareholders' equity | 9.8 | 10.2 | 10.1 | 8.7 | 7.9 | |||||||||||
| Return on average tangible common shareholders' equity (2) | 18.9 | 19.3 | 18.9 | 16.4 | 15.0 | |||||||||||
| Net interest margin - taxable equivalent | 2.76 | 2.81 | 2.88 | 3.01 | 3.08 | |||||||||||
| Fee income ratio | 41.7 | 42.2 | 42.6 | 40.1 | 40.4 | |||||||||||
| Efficiency ratio-GAAP | 66.5 | 67.8 | 71.0 | 65.8 | 67.8 | |||||||||||
| Efficiency ratio-adjusted (2) | 56.0 | 57.9 | 56.1 | 56.9 | 55.9 | |||||||||||
| Credit Quality | ||||||||||||||||
| Nonperforming assets as a percentage of: | ||||||||||||||||
| Assets, including LHFS | 0.21 | % | 0.23 | % | 0.23 | % | 0.25 | % | 0.27 | % | ||||||
| Loans and leases plus foreclosed property | 0.39 | 0.40 | 0.39 | 0.42 | 0.46 | |||||||||||
| Net charge-offs as a percentage of average loans and leases | 0.25 | 0.19 | 0.20 | 0.33 | 0.27 | |||||||||||
| Allowance for loan and lease losses as a percentage of LHFI | 1.53 | 1.65 | 1.79 | 1.94 | 1.95 | |||||||||||
| Ratio of allowance for loan and lease losses to nonperforming LHFI | 4.07x | 4.35x | 4.83x | 4.84x | 4.39x | |||||||||||
| Average Balances | ||||||||||||||||
| Assets | $ | 534,911 | $ | 526,685 | $ | 518,774 | $ | 508,833 | $ | 503,181 | ||||||
| Securities (3) | 153,405 | 146,272 | 135,647 | 122,246 | 102,053 | |||||||||||
| Loans and leases | 291,074 | 290,338 | 292,965 | 299,541 | 308,188 | |||||||||||
| Deposits | 410,966 | 402,728 | 396,255 | 383,185 | 375,266 | |||||||||||
| Common shareholders' equity | 61,807 | 62,680 | 61,709 | 62,252 | 61,991 | |||||||||||
| Total shareholders' equity | 68,480 | 69,353 | 68,665 | 70,047 | 70,145 | |||||||||||
| Period-End Balances | ||||||||||||||||
| Assets | $ | 541,241 | $ | 529,884 | $ | 521,964 | $ | 517,537 | $ | 509,228 | ||||||
| Securities (3) | 154,617 | 151,038 | 139,879 | 123,807 | 120,788 | |||||||||||
| Loans and leases | 294,325 | 290,655 | 289,494 | 297,179 | 305,793 | |||||||||||
| Deposits | 416,488 | 405,857 | 398,279 | 395,562 | 381,077 | |||||||||||
| Common shareholders' equity | 62,598 | 62,227 | 61,663 | 60,752 | 62,759 | |||||||||||
| Total shareholders' equity | 69,271 | 68,900 | 68,336 | 67,876 | 70,912 | |||||||||||
| Capital Ratios (current quarter is preliminary) | ||||||||||||||||
| Common equity Tier 1 | 9.6 | % | 10.1 | % | 10.2 | % | 10.1 | % | 10.0 | % | ||||||
| Tier 1 | 11.3 | 11.9 | 12.0 | 12.0 | 12.1 | |||||||||||
| Total | 13.2 | 13.9 | 14.2 | 14.3 | 14.5 | |||||||||||
| Leverage | 8.7 | 9.0 | 9.1 | 9.4 | 9.6 | |||||||||||
| Supplementary leverage | 7.4 | 7.8 | 7.9 | 8.3 | 8.7 | |||||||||||
| Applicable ratios are annualized. | ||||||||||||||||
| (1) Interest income includes certain fees, deferred costs, fair value mark accretion, and dividends. | ||||||||||||||||
| (2) Represents a non-GAAP measure. See the calculations and management's reasons for using these measures in the Non-GAAP Reconciliations and Preliminary Capital Information - Five Quarter Trend sections of this supplement. | ||||||||||||||||
| (3) Includes AFS and HTM securities. Average balances reflect both AFS and HTM securities at amortized cost. Period-end balances reflect AFS securities at fair value and HTM securities at amortized cost. |
2 Truist Financial Corporation
| Consolidated Statements of Income | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | Year-to-Date | |||||||||||||
| Dec. 31 | Change | Dec. 31 | Change | |||||||||||
| (Dollars in millions, except per share data, shares in thousands) | 2021 | 2020 | % | 2021 | 2020 | % | ||||||||
| Interest Income | ||||||||||||||
| Interest and fees on loans and leases | $ | 2,753 | $ | 3,158 | (12.8) | % | $ | 11,481 | $ | 13,485 | (14.9) | % | ||
| Interest on securities | 602 | 408 | 194 | 47.5 | 2,090 | 1,739 | 351 | 20.2 | ||||||
| Interest on other earning assets | 56 | 45 | 11 | 24.4 | 203 | 324 | (121) | (37.3) | ||||||
| Total interest income | 3,411 | 3,611 | (200) | (5.5) | 13,774 | 15,548 | (1,774) | (11.4) | ||||||
| Interest Expense | ||||||||||||||
| Interest on deposits | 32 | 67 | (35) | (52.2) | 148 | 785 | (637) | (81.1) | ||||||
| Interest on long-term debt | 127 | 165 | (38) | (23.0) | 573 | 800 | (227) | (28.4) | ||||||
| Interest on other borrowings | 9 | 13 | (4) | (30.8) | 47 | 137 | (90) | (65.7) | ||||||
| Total interest expense | 168 | 245 | (77) | (31.4) | 768 | 1,722 | (954) | (55.4) | ||||||
| Net Interest Income | 3,243 | 3,366 | (123) | (3.7) | 13,006 | 13,826 | (820) | (5.9) | ||||||
| Provision for credit losses | (103) | 177 | (280) | (158.2) | (813) | 2,335 | (3,148) | (134.8) | ||||||
| Net Interest Income After Provision for Credit Losses | 3,346 | 3,189 | 157 | 4.9 | 13,819 | 11,491 | 2,328 | 20.3 | ||||||
| Noninterest Income | ||||||||||||||
| Insurance income | 666 | 545 | 121 | 22.2 | 2,627 | 2,193 | 434 | 19.8 | ||||||
| Wealth management income | 350 | 332 | 18 | 5.4 | 1,392 | 1,277 | 115 | 9.0 | ||||||
| Service charges on deposits | 273 | 266 | 7 | 2.6 | 1,060 | 1,020 | 40 | 3.9 | ||||||
| Residential mortgage income | 159 | 193 | (34) | (17.6) | 555 | 1,000 | (445) | (44.5) | ||||||
| Investment banking and trading income | 377 | 354 | 23 | 6.5 | 1,441 | 1,010 | 431 | 42.7 | ||||||
| Card and payment related fees | 224 | 203 | 21 | 10.3 | 874 | 761 | 113 | 14.8 | ||||||
| Lending related fees | 81 | 105 | (24) | (22.9) | 349 | 315 | 34 | 10.8 | ||||||
| Operating lease income | 71 | 77 | (6) | (7.8) | 262 | 309 | (47) | (15.2) | ||||||
| Commercial mortgage income | 45 | 66 | (21) | (31.8) | 179 | 185 | (6) | (3.2) | ||||||
| Income from bank-owned life insurance | 44 | 44 | — | — | 183 | 179 | 4 | 2.2 | ||||||
| Securities gains (losses) | — | — | — | — | — | 402 | (402) | NM | ||||||
| Other income | 33 | 100 | (67) | (67.0) | 368 | 228 | 140 | 61.4 | ||||||
| Total noninterest income | 2,323 | 2,285 | 38 | 1.7 | 9,290 | 8,879 | 411 | 4.6 | ||||||
| Noninterest Expense | ||||||||||||||
| Personnel expense | 2,096 | 2,108 | (12) | (0.6) | 8,632 | 8,146 | 486 | 6.0 | ||||||
| Professional fees and outside processing | 379 | 393 | (14) | (3.6) | 1,442 | 1,252 | 190 | 15.2 | ||||||
| Net occupancy expense | 186 | 207 | (21) | (10.1) | 764 | 904 | (140) | (15.5) | ||||||
| Software expense | 238 | 215 | 23 | 10.7 | 945 | 862 | 83 | 9.6 | ||||||
| Amortization of intangibles | 143 | 172 | (29) | (16.9) | 574 | 685 | (111) | (16.2) | ||||||
| Equipment expense | 124 | 121 | 3 | 2.5 | 513 | 484 | 29 | 6.0 | ||||||
| Marketing and customer development | 68 | 58 | 10 | 17.2 | 294 | 273 | 21 | 7.7 | ||||||
| Operating lease depreciation | 46 | 54 | (8) | (14.8) | 190 | 258 | (68) | (26.4) | ||||||
| Loan-related expense | 51 | 65 | (14) | (21.5) | 212 | 242 | (30) | (12.4) | ||||||
| Regulatory costs | 38 | 32 | 6 | 18.8 | 137 | 125 | 12 | 9.6 | ||||||
| Merger-related and restructuring charges | 212 | 308 | (96) | (31.2) | 822 | 860 | (38) | (4.4) | ||||||
| Loss (gain) on early extinguishment of debt | (1) | — | (1) | NM | (4) | 235 | (239) | (101.7) | ||||||
| Other expense | 120 | 100 | 20 | 20.0 | 595 | 571 | 24 | 4.2 | ||||||
| Total noninterest expense | 3,700 | 3,833 | (133) | (3.5) | 15,116 | 14,897 | 219 | 1.5 | ||||||
| Earnings | ||||||||||||||
| Income before income taxes | 1,969 | 1,641 | 328 | 20.0 | 7,993 | 5,473 | 2,520 | 46.0 | ||||||
| Provision for income taxes | 367 | 311 | 56 | 18.0 | 1,556 | 981 | 575 | 58.6 | ||||||
| Net income | 1,602 | 1,330 | 272 | 20.5 | 6,437 | 4,492 | 1,945 | 43.3 | ||||||
| Noncontrolling interests | — | 1 | (1) | (100.0) | (3) | 10 | (13) | (130.0) | ||||||
| Net income available to the bank holding company | 1,602 | 1,329 | 273 | 20.5 | 6,440 | 4,482 | 1,958 | 43.7 | ||||||
| Preferred stock dividends and other | 78 | 101 | (23) | (22.8) | 407 | 298 | 109 | 36.6 | ||||||
| Net income available to common shareholders | $ | 1,524 | $ | 1,228 | 24.1 | % | $ | 6,033 | $ | 4,184 | 44.2 | % | ||
| Earnings Per Common Share | ||||||||||||||
| Basic | $ | 1.15 | $ | 0.91 | 26.4 | % | $ | 4.51 | $ | 3.11 | 45.0 | % | ||
| Diluted | 1.13 | 0.90 | 0.23 | 25.6 | 4.47 | 3.08 | 1.39 | 45.1 | ||||||
| Weighted Average Shares Outstanding | ||||||||||||||
| Basic | 1,329,979 | 1,348,493 | (18,514) | (1.4) | 1,337,144 | 1,347,080 | (9,936) | (0.7) | ||||||
| Diluted | 1,343,029 | 1,361,763 | (18,734) | (1.4) | 1,349,378 | 1,358,289 | (8,911) | (0.7) | ||||||
| NM - not meaningful | ||||||||||||||
| In 4Q21, the Company reclassified certain structured real estate activity from commercial mortgage income to investment banking trading income and certain LIHTC activity from commercial mortgage income to other income. Prior periods were reclassified to conform to the current presentation. |
All values are in US Dollars.
Truist Financial Corporation 3
20
| Consolidated Statements of Income - Five Quarter Trend | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | ||||||||||
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | ||||||
| (Dollars in millions, except per share data, shares in thousands) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||
| Interest Income | ||||||||||
| Interest and fees on loans and leases | $ | 2,753 | $ | 2,825 | $ | 2,901 | $ | 3,002 | $ | 3,158 |
| Interest on securities | 602 | 548 | 497 | 443 | 408 | |||||
| Interest on other earning assets | 56 | 53 | 45 | 49 | 45 | |||||
| Total interest income | 3,411 | 3,426 | 3,443 | 3,494 | 3,611 | |||||
| Interest Expense | ||||||||||
| Interest on deposits | 32 | 33 | 36 | 47 | 67 | |||||
| Interest on long-term debt | 127 | 151 | 147 | 148 | 165 | |||||
| Interest on other borrowings | 9 | 9 | 15 | 14 | 13 | |||||
| Total interest expense | 168 | 193 | 198 | 209 | 245 | |||||
| Net Interest Income | 3,243 | 3,233 | 3,245 | 3,285 | 3,366 | |||||
| Provision for credit losses | (103) | (324) | (434) | 48 | 177 | |||||
| Net Interest Income After Provision for Credit Losses | 3,346 | 3,557 | 3,679 | 3,237 | 3,189 | |||||
| Noninterest Income | ||||||||||
| Insurance income | 666 | 645 | 690 | 626 | 545 | |||||
| Wealth management income | 350 | 356 | 345 | 341 | 332 | |||||
| Service charges on deposits | 273 | 276 | 253 | 258 | 266 | |||||
| Residential mortgage income | 159 | 179 | 117 | 100 | 193 | |||||
| Investment banking and trading income | 377 | 316 | 402 | 346 | 354 | |||||
| Card and payment related fees | 224 | 225 | 225 | 200 | 203 | |||||
| Lending related fees | 81 | 74 | 94 | 100 | 105 | |||||
| Operating lease income | 71 | 57 | 66 | 68 | 77 | |||||
| Commercial mortgage income | 45 | 54 | 47 | 33 | 66 | |||||
| Income from bank-owned life insurance | 44 | 43 | 46 | 50 | 44 | |||||
| Securities gains (losses) | — | — | — | — | — | |||||
| Other income | 33 | 140 | 120 | 75 | 100 | |||||
| Total noninterest income | 2,323 | 2,365 | 2,405 | 2,197 | 2,285 | |||||
| Noninterest Expense | ||||||||||
| Personnel expense | 2,096 | 2,187 | 2,207 | 2,142 | 2,108 | |||||
| Professional fees and outside processing | 379 | 372 | 341 | 350 | 393 | |||||
| Net occupancy expense | 186 | 187 | 182 | 209 | 207 | |||||
| Software expense | 238 | 251 | 246 | 210 | 215 | |||||
| Amortization of intangibles | 143 | 145 | 142 | 144 | 172 | |||||
| Equipment expense | 124 | 154 | 122 | 113 | 121 | |||||
| Marketing and customer development | 68 | 94 | 66 | 66 | 58 | |||||
| Operating lease depreciation | 46 | 47 | 47 | 50 | 54 | |||||
| Loan-related expense | 51 | 52 | 55 | 54 | 65 | |||||
| Regulatory costs | 38 | 43 | 31 | 25 | 32 | |||||
| Merger-related and restructuring charges | 212 | 172 | 297 | 141 | 308 | |||||
| Loss (gain) on early extinguishment of debt | (1) | — | — | (3) | — | |||||
| Other expense | 120 | 91 | 275 | 109 | 100 | |||||
| Total noninterest expense | 3,700 | 3,795 | 4,011 | 3,610 | 3,833 | |||||
| Earnings | ||||||||||
| Income before income taxes | 1,969 | 2,127 | 2,073 | 1,824 | 1,641 | |||||
| Provision for income taxes | 367 | 423 | 415 | 351 | 311 | |||||
| Net income | 1,602 | 1,704 | 1,658 | 1,473 | 1,330 | |||||
| Noncontrolling interests | — | — | 1 | (4) | 1 | |||||
| Net income available to the bank holding company | 1,602 | 1,704 | 1,657 | 1,477 | 1,329 | |||||
| Preferred stock dividends and other | 78 | 88 | 98 | 143 | 101 | |||||
| Net income available to common shareholders | $ | 1,524 | $ | 1,616 | $ | 1,559 | $ | 1,334 | $ | 1,228 |
| Earnings Per Common Share | ||||||||||
| Basic | $ | 1.15 | $ | 1.21 | $ | 1.16 | $ | 0.99 | $ | 0.91 |
| Diluted | 1.13 | 1.20 | 1.16 | 0.98 | 0.90 | |||||
| Weighted Average Shares Outstanding | ||||||||||
| Basic | 1,329,979 | 1,334,825 | 1,338,302 | 1,345,666 | 1,348,493 | |||||
| Diluted | 1,343,029 | 1,346,854 | 1,349,492 | 1,358,932 | 1,361,763 | |||||
| In 4Q21, the Company reclassified certain structured real estate activity from commercial mortgage income to investment banking trading income and certain LIHTC activity from commercial mortgage income to other income. Prior periods were reclassified to conform to the current presentation. |
4 Truist Financial Corporation
| Consolidated Ending Balance Sheets - Five Quarter Trend | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | ||||||
| (Dollars in millions) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||
| Assets | ||||||||||
| Cash and due from banks | $ | 5,085 | $ | 4,656 | $ | 5,077 | $ | 5,097 | $ | 5,029 |
| Interest-bearing deposits with banks | 15,210 | 15,171 | 21,480 | 27,035 | 13,839 | |||||
| Securities borrowed or purchased under resale agreements | 4,028 | 1,919 | 1,242 | 1,349 | 1,745 | |||||
| Trading assets at fair value | 4,423 | 6,972 | 5,945 | 5,094 | 3,872 | |||||
| Securities available for sale at fair value | 153,123 | 151,038 | 139,879 | 123,807 | 120,788 | |||||
| Securities held to maturity at amortized cost | 1,494 | — | — | — | — | |||||
| Loans and leases: | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | 138,762 | 133,791 | 135,881 | 140,315 | 143,594 | |||||
| CRE | 23,951 | 24,309 | 25,399 | 25,899 | 26,595 | |||||
| Commercial construction | 4,971 | 5,689 | 6,160 | 6,559 | 6,491 | |||||
| Consumer: | ||||||||||
| Residential mortgage | 47,852 | 46,691 | 44,036 | 44,298 | 47,272 | |||||
| Residential home equity and direct | 25,066 | 25,222 | 25,334 | 25,333 | 26,064 | |||||
| Indirect auto | 26,441 | 26,923 | 26,696 | 26,438 | 26,150 | |||||
| Indirect other | 10,883 | 11,155 | 11,039 | 10,631 | 11,177 | |||||
| Student | 6,780 | 7,059 | 7,341 | 7,478 | 7,552 | |||||
| Credit card | 4,807 | 4,683 | 4,599 | 4,560 | 4,839 | |||||
| Total loans and leases held for investment | 289,513 | 285,522 | 286,485 | 291,511 | 299,734 | |||||
| Loans held for sale | 4,812 | 5,133 | 3,009 | 5,668 | 6,059 | |||||
| Total loans and leases | 294,325 | 290,655 | 289,494 | 297,179 | 305,793 | |||||
| Allowance for loan and lease losses | (4,435) | (4,702) | (5,121) | (5,662) | (5,835) | |||||
| Premises and equipment | 3,700 | 3,719 | 3,699 | 3,787 | 3,870 | |||||
| Goodwill | 26,098 | 24,891 | 24,374 | 24,356 | 24,447 | |||||
| Core deposit and other intangible assets | 3,408 | 2,930 | 2,665 | 2,825 | 2,984 | |||||
| Loan servicing rights at fair value | 2,633 | 2,584 | 2,231 | 2,365 | 2,023 | |||||
| Other assets | 32,149 | 30,051 | 30,999 | 30,305 | 30,673 | |||||
| Total assets | $ | 541,241 | $ | 529,884 | $ | 521,964 | $ | 517,537 | $ | 509,228 |
| Liabilities | ||||||||||
| Deposits: | ||||||||||
| Noninterest-bearing deposits | $ | 145,892 | $ | 143,595 | $ | 138,623 | $ | 136,555 | $ | 127,629 |
| Interest checking | 115,754 | 108,954 | 107,993 | 107,082 | 105,269 | |||||
| Money market and savings | 138,956 | 136,633 | 134,118 | 132,733 | 126,238 | |||||
| Time deposits | 15,886 | 16,675 | 17,545 | 19,192 | 21,941 | |||||
| Total deposits | 416,488 | 405,857 | 398,279 | 395,562 | 381,077 | |||||
| Short-term borrowings | 5,292 | 5,226 | 5,652 | 5,889 | 6,092 | |||||
| Long-term debt | 35,913 | 37,837 | 37,969 | 37,753 | 39,597 | |||||
| Other liabilities | 14,277 | 12,064 | 11,728 | 10,457 | 11,550 | |||||
| Total liabilities | 471,970 | 460,984 | 453,628 | 449,661 | 438,316 | |||||
| Shareholders' Equity: | ||||||||||
| Preferred stock | 6,673 | 6,673 | 6,673 | 7,124 | 8,048 | |||||
| Common stock | 6,639 | 6,674 | 6,674 | 6,724 | 6,745 | |||||
| Additional paid-in capital | 34,565 | 34,977 | 34,898 | 35,360 | 35,843 | |||||
| Retained earnings | 22,998 | 22,114 | 21,139 | 20,184 | 19,455 | |||||
| Accumulated other comprehensive loss | (1,604) | (1,538) | (1,048) | (1,516) | 716 | |||||
| Noncontrolling interests | — | — | — | — | 105 | |||||
| Total shareholders' equity | 69,271 | 68,900 | 68,336 | 67,876 | 70,912 | |||||
| Total liabilities and shareholders' equity | $ | 541,241 | $ | 529,884 | $ | 521,964 | $ | 517,537 | $ | 509,228 |
| In 4Q21, the Company reclassified the lease financing portfolio to the commercial and industrial portfolio. Prior periods were reclassified to conform to the current presentation. |
Truist Financial Corporation 5
| Average Balance Sheets | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | Year-to-Date | |||||||||||||
| December 31 | Change | December 31 | Change | |||||||||||
| (Dollars in millions) | 2021 | 2020 | % | 2021 | 2020 | % | ||||||||
| Assets | ||||||||||||||
| Securities at amortized cost (1): | ||||||||||||||
| U.S. Treasury | $ | 9,891 | $ | 2,049 | NM | $ | 7,633 | $ | 2,194 | NM | ||||
| U.S. government-sponsored entities (GSE) | 1,686 | 1,841 | (155) | (8.4) | 1,799 | 1,846 | (47) | (2.5) | ||||||
| Mortgage-backed securities issued by GSE | 137,651 | 97,660 | 39,991 | 40.9 | 128,306 | 78,564 | 49,742 | 63.3 | ||||||
| States and political subdivisions | 410 | 469 | (59) | (12.6) | 429 | 501 | (72) | (14.4) | ||||||
| Non-agency mortgage-backed | 3,738 | — | 3,738 | NM | 1,299 | 86 | 1,213 | NM | ||||||
| Other | 29 | 34 | (5) | (14.7) | 31 | 36 | (5) | (13.9) | ||||||
| Total securities | 153,405 | 102,053 | 51,352 | 50.3 | 139,497 | 83,227 | 56,270 | 67.6 | ||||||
| Loans and leases: | ||||||||||||||
| Commercial: | ||||||||||||||
| Commercial and industrial | 134,804 | 144,624 | (9,820) | (6.8) | 137,304 | 147,603 | (10,299) | (7.0) | ||||||
| CRE | 24,396 | 27,030 | (2,634) | (9.7) | 25,269 | 27,410 | (2,141) | (7.8) | ||||||
| Commercial construction | 5,341 | 6,616 | (1,275) | (19.3) | 6,053 | 6,659 | (606) | (9.1) | ||||||
| Consumer: | ||||||||||||||
| Residential mortgage | 47,185 | 48,847 | (1,662) | (3.4) | 45,500 | 51,423 | (5,923) | (11.5) | ||||||
| Residential home equity and direct | 25,146 | 26,327 | (1,181) | (4.5) | 25,319 | 26,951 | (1,632) | (6.1) | ||||||
| Indirect auto | 26,841 | 25,788 | 1,053 | 4.1 | 26,621 | 25,055 | 1,566 | 6.3 | ||||||
| Indirect other | 10,978 | 11,291 | (313) | (2.8) | 10,935 | 11,264 | (329) | (2.9) | ||||||
| Student | 6,884 | 7,519 | (635) | (8.4) | 7,251 | 7,596 | (345) | (4.5) | ||||||
| Credit card | 4,769 | 4,818 | (49) | (1.0) | 4,650 | 5,027 | (377) | (7.5) | ||||||
| Total loans and leases held for investment | 286,344 | 302,860 | (16,516) | (5.5) | 288,902 | 308,988 | (20,086) | (6.5) | ||||||
| Loans held for sale | 4,730 | 5,328 | (598) | (11.2) | 4,546 | 5,513 | (967) | (17.5) | ||||||
| Total loans and leases | 291,074 | 308,188 | (17,114) | (5.6) | 293,448 | 314,501 | (21,053) | (6.7) | ||||||
| Interest earning trading assets | 6,772 | 4,538 | 2,234 | 49.2 | 5,602 | 4,655 | 947 | 20.3 | ||||||
| Other earning assets | 19,634 | 23,887 | (4,253) | (17.8) | 19,498 | 31,240 | (11,742) | (37.6) | ||||||
| Total earning assets | 470,885 | 438,666 | 32,219 | 7.3 | 458,045 | 433,623 | 24,422 | 5.6 | ||||||
| Nonearning assets | 64,026 | 64,515 | (489) | (0.8) | 64,340 | 65,462 | (1,122) | (1.7) | ||||||
| Total assets | $ | 534,911 | $ | 503,181 | 6.3 | % | $ | 522,385 | $ | 499,085 | 4.7 | % | ||
| Liabilities and Shareholders' Equity | ||||||||||||||
| Deposits: | ||||||||||||||
| Noninterest-bearing deposits | $ | 146,492 | $ | 127,103 | 15.3 | % | $ | 138,733 | $ | 114,580 | 21.1 | % | ||
| Interest checking | 110,506 | 99,866 | 10,640 | 10.7 | 107,311 | 94,879 | 12,432 | 13.1 | ||||||
| Money market and savings | 137,676 | 124,692 | 12,984 | 10.4 | 134,303 | 123,826 | 10,477 | 8.5 | ||||||
| Time deposits | 16,292 | 23,605 | (7,313) | (31.0) | 18,025 | 30,008 | (11,983) | (39.9) | ||||||
| Total deposits | 410,966 | 375,266 | 35,700 | 9.5 | 398,372 | 363,293 | 35,079 | 9.7 | ||||||
| Short-term borrowings | 6,433 | 6,493 | (60) | (0.9) | 6,170 | 10,129 | (3,959) | (39.1) | ||||||
| Long-term debt | 37,623 | 40,284 | (2,661) | (6.6) | 37,410 | 45,793 | (8,383) | (18.3) | ||||||
| Other liabilities | 11,409 | 10,993 | 416 | 3.8 | 11,300 | 11,846 | (546) | (4.6) | ||||||
| Total liabilities | 466,431 | 433,036 | 33,395 | 7.7 | 453,252 | 431,061 | 22,191 | 5.1 | ||||||
| Shareholders' equity | 68,480 | 70,145 | (1,665) | (2.4) | 69,133 | 68,024 | 1,109 | 1.6 | ||||||
| Total liabilities and shareholders' equity | $ | 534,911 | $ | 503,181 | 6.3 | % | $ | 522,385 | $ | 499,085 | 4.7 | % | ||
| In 4Q21, the Company reclassified the lease financing portfolio to the commercial and industrial portfolio. Prior periods were reclassified to conform to the current presentation. | ||||||||||||||
| Average balances exclude basis adjustments for fair value hedges. | ||||||||||||||
| (1) Includes AFS and HTM securities. | ||||||||||||||
| NM - not meaningful |
All values are in US Dollars.
6 Truist Financial Corporation
| Average Balance Sheets - Five Quarter Trend | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | ||||||||||
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | ||||||
| (Dollars in millions) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||
| Assets | ||||||||||
| Securities at amortized cost (1): | ||||||||||
| U.S. Treasury | $ | 9,891 | $ | 9,699 | $ | 9,070 | $ | 1,759 | $ | 2,049 |
| U.S. government-sponsored entities (GSE) | 1,686 | 1,830 | 1,840 | 1,839 | 1,841 | |||||
| Mortgage-backed securities issued by GSE | 137,651 | 132,890 | 124,251 | 118,171 | 97,660 | |||||
| States and political subdivisions | 410 | 425 | 437 | 444 | 469 | |||||
| Non-agency mortgage-backed | 3,738 | 1,398 | 17 | — | — | |||||
| Other | 29 | 30 | 32 | 33 | 34 | |||||
| Total securities | 153,405 | 146,272 | 135,647 | 122,246 | 102,053 | |||||
| Loans and leases: | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | 134,804 | 134,942 | 138,539 | 141,026 | 144,624 | |||||
| CRE | 24,396 | 24,849 | 25,645 | 26,211 | 27,030 | |||||
| Commercial construction | 5,341 | 5,969 | 6,359 | 6,557 | 6,616 | |||||
| Consumer: | ||||||||||
| Residential mortgage | 47,185 | 45,369 | 43,605 | 45,823 | 48,847 | |||||
| Residential home equity and direct | 25,146 | 25,242 | 25,238 | 25,658 | 26,327 | |||||
| Indirect auto | 26,841 | 26,830 | 26,444 | 26,363 | 25,788 | |||||
| Indirect other | 10,978 | 11,112 | 10,797 | 10,848 | 11,291 | |||||
| Student | 6,884 | 7,214 | 7,396 | 7,519 | 7,519 | |||||
| Credit card | 4,769 | 4,632 | 4,552 | 4,645 | 4,818 | |||||
| Total loans and leases held for investment | 286,344 | 286,159 | 288,575 | 294,650 | 302,860 | |||||
| Loans held for sale | 4,730 | 4,179 | 4,390 | 4,891 | 5,328 | |||||
| Total loans and leases | 291,074 | 290,338 | 292,965 | 299,541 | 308,188 | |||||
| Interest earning trading assets | 6,772 | 5,809 | 5,061 | 4,742 | 4,538 | |||||
| Other earning assets | 19,634 | 19,331 | 21,592 | 17,417 | 23,887 | |||||
| Total earning assets | 470,885 | 461,750 | 455,265 | 443,946 | 438,666 | |||||
| Nonearning assets | 64,026 | 64,935 | 63,509 | 64,887 | 64,515 | |||||
| Total assets | $ | 534,911 | $ | 526,685 | $ | 518,774 | $ | 508,833 | $ | 503,181 |
| Liabilities and Shareholders' Equity | ||||||||||
| Deposits: | ||||||||||
| Noninterest-bearing deposits | $ | 146,492 | $ | 141,738 | $ | 137,892 | $ | 128,579 | $ | 127,103 |
| Interest checking | 110,506 | 107,802 | 106,121 | 104,744 | 99,866 | |||||
| Money market and savings | 137,676 | 136,094 | 134,029 | 129,303 | 124,692 | |||||
| Time deposits | 16,292 | 17,094 | 18,213 | 20,559 | 23,605 | |||||
| Total deposits | 410,966 | 402,728 | 396,255 | 383,185 | 375,266 | |||||
| Short-term borrowings | 6,433 | 5,360 | 6,168 | 6,731 | 6,493 | |||||
| Long-term debt | 37,623 | 37,329 | 36,873 | 37,820 | 40,284 | |||||
| Other liabilities | 11,409 | 11,915 | 10,813 | 11,050 | 10,993 | |||||
| Total liabilities | 466,431 | 457,332 | 450,109 | 438,786 | 433,036 | |||||
| Shareholders' equity | 68,480 | 69,353 | 68,665 | 70,047 | 70,145 | |||||
| Total liabilities and shareholders' equity | $ | 534,911 | $ | 526,685 | $ | 518,774 | $ | 508,833 | $ | 503,181 |
| In 4Q21, the Company reclassified the lease financing portfolio to the commercial and industrial portfolio. Prior periods were reclassified to conform to the current presentation. | ||||||||||
| Average balances exclude basis adjustments for fair value hedges. | ||||||||||
| (1) Includes AFS and HTM securities. |
Truist Financial Corporation 7
| Average Balances and Rates - Quarters | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | ||||||||||||
| December 31, 2021 | September 30, 2021 | |||||||||||
| (1) | (2) Interest | (2) | (1) | (2) Interest | (2) | |||||||
| Average | Income/ | Yields/ | Average | Income/ | Yields/ | |||||||
| (Dollars in millions) | Balances | Expense | Rates | Balances | Expense | Rates | ||||||
| Assets | ||||||||||||
| Securities at amortized cost (3): | ||||||||||||
| U.S. Treasury | $ | 9,891 | $ | 18 | 0.72 | % | $ | 9,699 | $ | 18 | 0.72 | % |
| U.S. government-sponsored entities (GSE) | 1,686 | 9 | 2.20 | 1,830 | 10 | 2.31 | ||||||
| Mortgage-backed securities issued by GSE | 137,651 | 552 | 1.60 | 132,890 | 509 | 1.53 | ||||||
| States and political subdivisions | 410 | 3 | 3.60 | 425 | 4 | 3.52 | ||||||
| Non-agency mortgage-backed | 3,738 | 20 | 2.23 | 1,398 | 8 | 2.20 | ||||||
| Other | 29 | 1 | 1.90 | 30 | — | 1.90 | ||||||
| Total securities | 153,405 | 603 | 1.57 | 146,272 | 549 | 1.50 | ||||||
| Loans and leases: | ||||||||||||
| Commercial: | ||||||||||||
| Commercial and industrial | 134,804 | 986 | 2.90 | 134,942 | 1,023 | 3.01 | ||||||
| CRE | 24,396 | 175 | 2.81 | 24,849 | 181 | 2.86 | ||||||
| Commercial construction | 5,341 | 38 | 2.96 | 5,969 | 42 | 2.96 | ||||||
| Consumer: | ||||||||||||
| Residential mortgage | 47,185 | 453 | 3.84 | 45,369 | 450 | 3.96 | ||||||
| Residential home equity and direct | 25,146 | 352 | 5.55 | 25,242 | 360 | 5.67 | ||||||
| Indirect auto | 26,841 | 389 | 5.75 | 26,830 | 405 | 5.99 | ||||||
| Indirect other | 10,978 | 176 | 6.42 | 11,112 | 183 | 6.54 | ||||||
| Student | 6,884 | 70 | 4.07 | 7,214 | 74 | 4.02 | ||||||
| Credit card | 4,769 | 105 | 8.69 | 4,632 | 105 | 9.01 | ||||||
| Total loans and leases held for investment | 286,344 | 2,744 | 3.81 | 286,159 | 2,823 | 3.92 | ||||||
| Loans held for sale | 4,730 | 32 | 2.66 | 4,179 | 28 | 2.69 | ||||||
| Total loans and leases | 291,074 | 2,776 | 3.79 | 290,338 | 2,851 | 3.90 | ||||||
| Interest earning trading assets | 6,772 | 46 | 2.72 | 5,809 | 41 | 2.81 | ||||||
| Other earning assets | 19,634 | 10 | 0.20 | 19,331 | 13 | 0.25 | ||||||
| Total earning assets | 470,885 | 3,435 | 2.90 | 461,750 | 3,454 | 2.98 | ||||||
| Nonearning assets | 64,026 | 64,935 | ||||||||||
| Total assets | $ | 534,911 | $ | 526,685 | ||||||||
| Liabilities and Shareholders' Equity | ||||||||||||
| Interest-bearing deposits: | ||||||||||||
| Interest checking | $ | 110,506 | 15 | 0.05 | $ | 107,802 | 14 | 0.05 | ||||
| Money market and savings | 137,676 | 8 | 0.03 | 136,094 | 9 | 0.03 | ||||||
| Time deposits | 16,292 | 9 | 0.21 | 17,094 | 10 | 0.23 | ||||||
| Total interest-bearing deposits (4) | 264,474 | 32 | 0.05 | 260,990 | 33 | 0.05 | ||||||
| Short-term borrowings | 6,433 | 9 | 0.55 | 5,360 | 9 | 0.68 | ||||||
| Long-term debt | 37,623 | 127 | 1.35 | 37,329 | 151 | 1.61 | ||||||
| Total interest-bearing liabilities | 308,530 | 168 | 0.22 | 303,679 | 193 | 0.25 | ||||||
| Noninterest-bearing deposits (4) | 146,492 | 141,738 | ||||||||||
| Other liabilities | 11,409 | 11,915 | ||||||||||
| Shareholders' equity | 68,480 | 69,353 | ||||||||||
| Total liabilities and shareholders' equity | $ | 534,911 | $ | 526,685 | ||||||||
| Average interest-rate spread | 2.68 | 2.73 | ||||||||||
| Net interest income/ net interest margin - taxable equivalent | $ | 3,267 | 2.76 | % | $ | 3,261 | 2.81 | % | ||||
| Taxable-equivalent adjustment | $ | 24 | $ | 28 | ||||||||
| In 4Q21, the Company reclassified the lease financing portfolio to the commercial and industrial portfolio. Prior periods were reclassified to conform to the current presentation. | ||||||||||||
| Applicable ratios are annualized. | ||||||||||||
| (1) Excludes basis adjustments for fair value hedges. | ||||||||||||
| (2) Amounts are on a taxable-equivalent basis utilizing the federal income tax rate of 21% for the periods presented. Interest income includes certain fees, deferred costs, and dividends. | ||||||||||||
| (3) Includes AFS and HTM securities. | ||||||||||||
| (4) Total deposit costs were 0.03% for the three months ended December 31, 2021 and September 30, 2021. |
8 Truist Financial Corporation
| Average Balances and Rates - Quarters | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | ||||||||||||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | ||||||||||||||||
| (1) | (2) Interest | (2) | (1) | (2) Interest | (2) | (1) | (2) Interest | (2) | ||||||||||
| Average | Income/ | Yields/ | Average | Income/ | Yields/ | Average | Income/ | Yields/ | ||||||||||
| (Dollars in millions) | Balances | Expense | Rates | Balances | Expense | Rates | Balances | Expense | Rates | |||||||||
| Assets | ||||||||||||||||||
| Securities at amortized cost (3): | ||||||||||||||||||
| U.S. Treasury | $ | 9,070 | $ | 16 | 0.73 | % | $ | 1,759 | $ | 4 | 0.89 | % | $ | 2,049 | $ | 9 | 1.62 | % |
| U.S. government-sponsored entities (GSE) | 1,840 | 11 | 2.33 | 1,839 | 11 | 2.33 | 1,841 | 11 | 2.33 | |||||||||
| Mortgage-backed securities issued by GSE | 124,251 | 466 | 1.50 | 118,171 | 426 | 1.44 | 97,660 | 385 | 1.58 | |||||||||
| States and political subdivisions | 437 | 4 | 3.55 | 444 | 4 | 3.52 | 469 | 3 | 3.52 | |||||||||
| Non-agency mortgage-backed | 17 | — | 2.46 | — | — | — | — | — | — | |||||||||
| Other | 32 | — | 1.88 | 33 | — | 1.92 | 34 | — | 1.98 | |||||||||
| Total securities | 135,647 | 497 | 1.47 | 122,246 | 445 | 1.45 | 102,053 | 408 | 1.60 | |||||||||
| Loans and leases: | ||||||||||||||||||
| Commercial: | ||||||||||||||||||
| Commercial and industrial | 138,539 | 1,072 | 3.10 | 141,026 | 1,093 | 3.14 | 144,624 | 1,156 | 3.18 | |||||||||
| CRE | 25,645 | 183 | 2.84 | 26,211 | 189 | 2.90 | 27,030 | 197 | 2.88 | |||||||||
| Commercial construction | 6,359 | 45 | 2.95 | 6,557 | 48 | 3.04 | 6,616 | 51 | 3.13 | |||||||||
| Consumer: | ||||||||||||||||||
| Residential mortgage | 43,605 | 474 | 4.35 | 45,823 | 507 | 4.42 | 48,847 | 542 | 4.44 | |||||||||
| Residential home equity and direct | 25,238 | 361 | 5.74 | 25,658 | 368 | 5.81 | 26,327 | 388 | 5.86 | |||||||||
| Indirect auto | 26,444 | 409 | 6.20 | 26,363 | 426 | 6.56 | 25,788 | 416 | 6.41 | |||||||||
| Indirect other | 10,797 | 185 | 6.86 | 10,848 | 187 | 6.98 | 11,291 | 195 | 6.87 | |||||||||
| Student | 7,396 | 72 | 3.90 | 7,519 | 73 | 3.96 | 7,519 | 80 | 4.23 | |||||||||
| Credit card | 4,552 | 99 | 8.73 | 4,645 | 106 | 9.24 | 4,818 | 114 | 9.35 | |||||||||
| Total loans and leases held for investment | 288,575 | 2,900 | 4.03 | 294,650 | 2,997 | 4.11 | 302,860 | 3,139 | 4.13 | |||||||||
| Loans held for sale | 4,390 | 28 | 2.57 | 4,891 | 32 | 2.59 | 5,328 | 47 | 3.54 | |||||||||
| Total loans and leases | 292,965 | 2,928 | 4.01 | 299,541 | 3,029 | 4.09 | 308,188 | 3,186 | 4.12 | |||||||||
| Interest earning trading assets | 5,061 | 37 | 2.82 | 4,742 | 32 | 2.79 | 4,538 | 33 | 2.89 | |||||||||
| Other earning assets | 21,592 | 9 | 0.19 | 17,417 | 16 | 0.37 | 23,887 | 12 | 0.20 | |||||||||
| Total earning assets | 455,265 | 3,471 | 3.06 | 443,946 | 3,522 | 3.20 | 438,666 | 3,639 | 3.31 | |||||||||
| Nonearning assets | 63,509 | 64,887 | 64,515 | |||||||||||||||
| Total assets | $ | 518,774 | $ | 508,833 | $ | 503,181 | ||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||
| Interest checking | $ | 106,121 | 15 | 0.06 | $ | 104,744 | 15 | 0.06 | $ | 99,866 | 17 | 0.07 | ||||||
| Money market and savings | 134,029 | 8 | 0.03 | 129,303 | 10 | 0.03 | 124,692 | 10 | 0.03 | |||||||||
| Time deposits | 18,213 | 13 | 0.28 | 20,559 | 22 | 0.44 | 23,605 | 40 | 0.66 | |||||||||
| Total interest-bearing deposits (4) | 258,363 | 36 | 0.06 | 254,606 | 47 | 0.07 | 248,163 | 67 | 0.11 | |||||||||
| Short-term borrowings | 6,168 | 15 | 0.98 | 6,731 | 14 | 0.82 | 6,493 | 13 | 0.77 | |||||||||
| Long-term debt | 36,873 | 147 | 1.60 | 37,820 | 148 | 1.57 | 40,284 | 165 | 1.64 | |||||||||
| Total interest-bearing liabilities | 301,404 | 198 | 0.26 | 299,157 | 209 | 0.28 | 294,940 | 245 | 0.33 | |||||||||
| Noninterest-bearing deposits (4) | 137,892 | 128,579 | 127,103 | |||||||||||||||
| Other liabilities | 10,813 | 11,050 | 10,993 | |||||||||||||||
| Shareholders' equity | 68,665 | 70,047 | 70,145 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 518,774 | $ | 508,833 | $ | 503,181 | ||||||||||||
| Average interest-rate spread | 2.80 | 2.92 | 2.98 | |||||||||||||||
| Net interest income/ net interest margin - taxable equivalent | $ | 3,273 | 2.88 | % | $ | 3,313 | 3.01 | % | $ | 3,394 | 3.08 | % | ||||||
| Taxable-equivalent adjustment | $ | 28 | $ | 28 | $ | 28 | ||||||||||||
| In 4Q21, the Company reclassified the lease financing portfolio to the commercial and industrial portfolio. Prior periods were reclassified to conform to the current presentation. | ||||||||||||||||||
| Applicable ratios are annualized. | ||||||||||||||||||
| (1) Excludes basis adjustments for fair value hedges. | ||||||||||||||||||
| (2) Amounts are on a taxable-equivalent basis utilizing the federal income tax rate of 21% for the periods presented. Interest income includes certain fees, deferred costs, and dividends. | ||||||||||||||||||
| (3) Includes AFS and HTM securities. | ||||||||||||||||||
| (4) Total deposit costs were 0.04%, 0.05%, and 0.07% for the three months ended June 30, 2021, March 31, 2021, and December 31, 2020, respectively. |
Truist Financial Corporation 9
| Average Balances and Rates - Year-To-Date | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year-to-Date | ||||||||||||
| December 31, 2021 | December 31, 2020 | |||||||||||
| (1) | (2) Interest | (2) | (1) | (2) Interest | (2) | |||||||
| Average | Income/ | Yields/ | Average | Income/ | Yields/ | |||||||
| (Dollars in millions) | Balances | Expense | Rates | Balances | Expense | Rates | ||||||
| Assets | ||||||||||||
| Securities at amortized cost (3): | ||||||||||||
| U.S. Treasury | $ | 7,633 | $ | 56 | 0.73 | % | $ | 2,194 | $ | 40 | 1.81 | % |
| U.S. government-sponsored entities (GSE) | 1,799 | 41 | 2.29 | 1,846 | 43 | 2.33 | ||||||
| Mortgage-backed securities issued by GSE | 128,306 | 1,953 | 1.52 | 78,564 | 1,625 | 2.07 | ||||||
| States and political subdivisions | 429 | 15 | 3.55 | 501 | 19 | 3.92 | ||||||
| Non-agency mortgage-backed | 1,299 | 28 | 2.20 | 86 | 15 | 16.81 | ||||||
| Other | 31 | 1 | 1.90 | 36 | 1 | 2.33 | ||||||
| Total securities | 139,497 | 2,094 | 1.50 | 83,227 | 1,743 | 2.09 | ||||||
| Loans and leases: | ||||||||||||
| Commercial: | ||||||||||||
| Commercial and industrial | 137,304 | 4,174 | 3.04 | 147,603 | 5,053 | 3.42 | ||||||
| CRE | 25,269 | 728 | 2.85 | 27,410 | 914 | 3.32 | ||||||
| Commercial construction | 6,053 | 173 | 2.98 | 6,659 | 243 | 3.72 | ||||||
| Consumer: | ||||||||||||
| Residential mortgage | 45,500 | 1,884 | 4.14 | 51,423 | 2,320 | 4.51 | ||||||
| Residential home equity and direct | 25,319 | 1,441 | 5.69 | 26,951 | 1,625 | 6.03 | ||||||
| Indirect auto | 26,621 | 1,629 | 6.12 | 25,055 | 1,656 | 6.61 | ||||||
| Indirect other | 10,935 | 731 | 6.70 | 11,264 | 801 | 7.11 | ||||||
| Student | 7,251 | 289 | 3.99 | 7,596 | 351 | 4.62 | ||||||
| Credit card | 4,650 | 415 | 8.92 | 5,027 | 470 | 9.34 | ||||||
| Total loans and leases held for investment | 288,902 | 11,464 | 3.97 | 308,988 | 13,433 | 4.35 | ||||||
| Loans held for sale | 4,546 | 120 | 2.63 | 5,513 | 173 | 3.13 | ||||||
| Total loans and leases | 293,448 | 11,584 | 3.95 | 314,501 | 13,606 | 4.33 | ||||||
| Interest earning trading assets | 5,602 | 156 | 2.78 | 4,655 | 168 | 3.62 | ||||||
| Other earning assets | 19,498 | 48 | 0.24 | 31,240 | 156 | 0.50 | ||||||
| Total earning assets | 458,045 | 13,882 | 3.03 | 433,623 | 15,673 | 3.61 | ||||||
| Nonearning assets | 64,340 | 65,462 | ||||||||||
| Total assets | $ | 522,385 | $ | 499,085 | ||||||||
| Liabilities and Shareholders' Equity | ||||||||||||
| Interest-bearing deposits: | ||||||||||||
| Interest checking | $ | 107,311 | 59 | 0.05 | $ | 94,879 | 216 | 0.23 | ||||
| Money market and savings | 134,303 | 35 | 0.03 | 123,826 | 264 | 0.21 | ||||||
| Time deposits | 18,025 | 54 | 0.30 | 30,008 | 305 | 1.02 | ||||||
| Total interest-bearing deposits (4) | 259,639 | 148 | 0.06 | 248,713 | 785 | 0.32 | ||||||
| Short-term borrowings | 6,170 | 47 | 0.76 | 10,129 | 137 | 1.35 | ||||||
| Long-term debt | 37,410 | 573 | 1.53 | 45,793 | 800 | 1.75 | ||||||
| Total interest-bearing liabilities | 303,219 | 768 | 0.25 | 304,635 | 1,722 | 0.57 | ||||||
| Noninterest-bearing deposits (4) | 138,733 | 114,580 | ||||||||||
| Other liabilities | 11,300 | 11,846 | ||||||||||
| Shareholders' equity | 69,133 | 68,024 | ||||||||||
| Total liabilities and shareholders' equity | $ | 522,385 | $ | 499,085 | ||||||||
| Average interest-rate spread | 2.78 | 3.04 | ||||||||||
| Net interest income/ net interest margin - taxable equivalent | $ | 13,114 | 2.86 | % | $ | 13,951 | 3.22 | % | ||||
| Taxable-equivalent adjustment | $ | 108 | $ | 125 | ||||||||
| In 4Q21, the Company reclassified the lease financing portfolio to the commercial and industrial portfolio. Prior periods were reclassified to conform to the current presentation. | ||||||||||||
| Applicable ratios are annualized. | ||||||||||||
| (1) Excludes basis adjustments for fair value hedges. | ||||||||||||
| (2) Amounts are on a taxable-equivalent basis utilizing the federal income tax rate of 21% for the periods presented. Interest income includes certain fees, deferred costs, and dividends. | ||||||||||||
| (3) Includes AFS and HTM securities. | ||||||||||||
| (4) Total deposit costs were 0.04% and 0.22% for the year ended December 31, 2021 and 2020, respectively. |
10 Truist Financial Corporation
| Credit Quality | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | ||||||
| (Dollars in millions) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||
| Nonperforming Assets | ||||||||||
| Nonaccrual loans and leases: | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | $ | 394 | $ | 423 | $ | 402 | $ | 474 | $ | 560 |
| CRE | 29 | 20 | 25 | 58 | 75 | |||||
| Commercial construction | 7 | 7 | 12 | 13 | 14 | |||||
| Consumer: | ||||||||||
| Residential mortgage | 296 | 306 | 302 | 290 | 316 | |||||
| Residential home equity and direct | 141 | 146 | 165 | 172 | 205 | |||||
| Indirect auto | 218 | 172 | 148 | 158 | 155 | |||||
| Indirect other | 5 | 6 | 6 | 6 | 5 | |||||
| Total nonaccrual loans and leases held for investment | 1,090 | 1,080 | 1,060 | 1,171 | 1,330 | |||||
| Loans held for sale | 22 | 76 | 78 | 72 | 5 | |||||
| Total nonaccrual loans and leases | 1,112 | 1,156 | 1,138 | 1,243 | 1,335 | |||||
| Foreclosed real estate | 8 | 9 | 13 | 18 | 20 | |||||
| Other foreclosed property | 43 | 39 | 41 | 38 | 32 | |||||
| Total nonperforming assets | $ | 1,163 | $ | 1,204 | $ | 1,192 | $ | 1,299 | $ | 1,387 |
| Troubled Debt Restructurings (TDRs) | ||||||||||
| Performing TDRs: | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | $ | 147 | $ | 200 | $ | 202 | $ | 201 | $ | 138 |
| CRE | 5 | 8 | 24 | 47 | 47 | |||||
| Consumer: | ||||||||||
| Residential mortgage | 692 | 712 | 727 | 733 | 648 | |||||
| Residential home equity and direct | 98 | 105 | 107 | 109 | 88 | |||||
| Indirect auto | 389 | 390 | 389 | 399 | 392 | |||||
| Indirect other | 7 | 7 | 7 | 7 | 6 | |||||
| Student | 25 | 23 | 13 | 8 | 5 | |||||
| Credit card | 27 | 30 | 32 | 35 | 37 | |||||
| Total performing TDRs | 1,390 | 1,475 | 1,501 | 1,539 | 1,361 | |||||
| Nonperforming TDRs | 152 | 159 | 190 | 207 | 164 | |||||
| Total TDRs | $ | 1,542 | $ | 1,634 | $ | 1,691 | $ | 1,746 | $ | 1,525 |
| Loans 90 Days or More Past Due and Still Accruing | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | $ | 13 | $ | 18 | $ | 14 | $ | 14 | $ | 13 |
| Consumer: | ||||||||||
| Residential mortgage | 1,009 | 852 | 976 | 975 | 841 | |||||
| Residential home equity and direct | 9 | 7 | 7 | 11 | 10 | |||||
| Indirect auto | 1 | 2 | 2 | 2 | 2 | |||||
| Indirect other | 3 | 2 | 1 | 1 | 2 | |||||
| Student | 868 | 968 | 1,046 | 1,037 | 1,111 | |||||
| Credit card | 27 | 23 | 22 | 32 | 29 | |||||
| Total loans 90 days past due and still accruing | $ | 1,930 | $ | 1,872 | $ | 2,068 | $ | 2,072 | $ | 2,008 |
| Loans 30-89 Days Past Due | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | $ | 130 | $ | 135 | $ | 146 | $ | 152 | $ | 89 |
| CRE | 20 | 4 | 7 | 9 | 14 | |||||
| Commercial construction | 2 | 2 | 1 | 4 | 5 | |||||
| Consumer: | ||||||||||
| Residential mortgage | 514 | 495 | 543 | 577 | 782 | |||||
| Residential home equity and direct | 107 | 81 | 73 | 82 | 98 | |||||
| Indirect auto | 607 | 560 | 428 | 328 | 495 | |||||
| Indirect other | 64 | 53 | 47 | 45 | 68 | |||||
| Student | 555 | 456 | 548 | 556 | 618 | |||||
| Credit card | 45 | 37 | 31 | 35 | 51 | |||||
| Total loans 30-89 days past due | $ | 2,044 | $ | 1,823 | $ | 1,824 | $ | 1,788 | $ | 2,220 |
| In 4Q21, the Company reclassified the lease financing portfolio to the commercial and industrial portfolio. Prior periods were reclassified to conform to the current presentation. |
Truist Financial Corporation 11
| As of/For the Quarter Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | ||||||
| (Dollars in millions) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||
| Allowance for Credit Losses | ||||||||||
| Beginning balance | $ | 4,978 | $ | 5,436 | $ | 6,011 | $ | 6,199 | $ | 6,229 |
| Provision for credit losses | (103) | (324) | (434) | 48 | 177 | |||||
| Charge-offs: | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | (54) | (57) | (53) | (79) | (88) | |||||
| CRE | (5) | (1) | — | (4) | (19) | |||||
| Commercial construction | — | — | — | (2) | (8) | |||||
| Consumer: | ||||||||||
| Residential mortgage | (1) | (7) | (4) | (11) | (6) | |||||
| Residential home equity and direct | (51) | (51) | (57) | (55) | (46) | |||||
| Indirect auto | (89) | (73) | (69) | (105) | (84) | |||||
| Indirect other | (16) | (13) | (11) | (17) | (14) | |||||
| Student | (12) | (6) | (3) | (3) | (3) | |||||
| Credit card | (37) | (31) | (42) | (40) | (35) | |||||
| Total charge-offs | (265) | (239) | (239) | (316) | (303) | |||||
| Recoveries: | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | 23 | 42 | 23 | 19 | 34 | |||||
| CRE | — | 1 | 4 | 1 | 1 | |||||
| Commercial construction | 1 | 1 | 1 | 1 | 1 | |||||
| Consumer: | ||||||||||
| Residential mortgage | 2 | 3 | 5 | 2 | 3 | |||||
| Residential home equity and direct | 21 | 20 | 20 | 18 | 20 | |||||
| Indirect auto | 21 | 22 | 27 | 22 | 24 | |||||
| Indirect other | 6 | 5 | 7 | 6 | 5 | |||||
| Student | — | 1 | — | — | — | |||||
| Credit card | 9 | 9 | 10 | 9 | 10 | |||||
| Total recoveries | 83 | 104 | 97 | 78 | 98 | |||||
| Net charge-offs | (182) | (135) | (142) | (238) | (205) | |||||
| Other | 2 | 1 | 1 | 2 | (2) | |||||
| Ending balance | $ | 4,695 | $ | 4,978 | $ | 5,436 | $ | 6,011 | $ | 6,199 |
| Allowance for Credit Losses: | ||||||||||
| Allowance for loan and lease losses (excluding PCD loans) | $ | 4,320 | $ | 4,577 | $ | 4,979 | $ | 5,506 | $ | 5,668 |
| Allowance for PCD loans | 115 | 125 | 142 | 156 | 167 | |||||
| Reserve for unfunded lending commitments (RUFC) | 260 | 276 | 315 | 349 | 364 | |||||
| Total | $ | 4,695 | $ | 4,978 | $ | 5,436 | $ | 6,011 | $ | 6,199 |
| In 4Q21, the Company reclassified the lease financing portfolio to the commercial and industrial portfolio. Prior periods were reclassified to conform to the current presentation. |
12 Truist Financial Corporation
| As of/For the Year-to-Date | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Period Ended Dec. 31 | |||||||||
| (Dollars in millions) | 2021 | 2020 | |||||||
| Allowance for Credit Losses | |||||||||
| Beginning balance | $ | 6,199 | $ | 1,889 | |||||
| CECL adoption - impact to retained earnings before tax | — | 2,762 | |||||||
| CECL adoption - reserves on PCD assets | — | 378 | |||||||
| Provision for credit losses | (813) | 2,335 | |||||||
| Charge-offs: | |||||||||
| Commercial: | |||||||||
| Commercial and industrial | (243) | (412) | |||||||
| CRE | (10) | (78) | |||||||
| Commercial construction | (2) | (30) | |||||||
| Consumer: | |||||||||
| Residential mortgage | (23) | (56) | |||||||
| Residential home equity and direct | (214) | (231) | |||||||
| Indirect auto | (336) | (378) | |||||||
| Indirect other | (57) | (60) | |||||||
| Student | (24) | (23) | |||||||
| Credit card | (150) | (182) | |||||||
| Total charge-offs | (1,059) | (1,450) | |||||||
| Recoveries: | |||||||||
| Commercial: | |||||||||
| Commercial and industrial | 107 | 96 | |||||||
| CRE | 6 | 5 | |||||||
| Commercial construction | 4 | 11 | |||||||
| Consumer: | |||||||||
| Residential mortgage | 12 | 10 | |||||||
| Residential home equity and direct | 79 | 66 | |||||||
| Indirect auto | 92 | 87 | |||||||
| Indirect other | 24 | 23 | |||||||
| Student | 1 | 1 | |||||||
| Credit card | 37 | 32 | |||||||
| Total recoveries | 362 | 331 | |||||||
| Net charge-offs | (697) | (1,119) | |||||||
| Other | 6 | (46) | |||||||
| Ending balance | $ | 4,695 | $ | 6,199 | |||||
| In 4Q21, the Company reclassified the lease financing portfolio to the commercial and industrial portfolio. Prior periods were reclassified to conform to the current presentation. | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Sept. 30 | June 30 | March 31 | Dec. 31 | ||||||
| 2021 | 2021 | 2021 | 2020 | ||||||
| Asset Quality Ratios | |||||||||
| Loans 30-89 days past due and still accruing as a percentage of loans and leases | % | 0.64 | % | 0.64 | % | 0.61 | % | 0.74 | % |
| Loans 90 days or more past due and still accruing as a percentage of loans and leases | 0.66 | 0.72 | 0.71 | 0.67 | |||||
| Nonperforming loans and leases as a percentage of loans and leases held for investment | 0.38 | 0.37 | 0.40 | 0.44 | |||||
| Nonperforming loans and leases as a percentage of loans and leases (1) | 0.40 | 0.39 | 0.42 | 0.44 | |||||
| Nonperforming assets as a percentage of: | |||||||||
| Total assets (1) | 0.23 | 0.23 | 0.25 | 0.27 | |||||
| Loans and leases plus foreclosed property | 0.40 | 0.39 | 0.42 | 0.46 | |||||
| Net charge-offs as a percentage of average loans and leases | 0.19 | 0.20 | 0.33 | 0.27 | |||||
| Allowance for loan and lease losses as a percentage of loans and leases | 1.65 | 1.79 | 1.94 | 1.95 | |||||
| Ratio of allowance for loan and lease losses to: | |||||||||
| Net charge-offs | 8.79X | 8.98X | 5.87X | 7.15X | |||||
| Nonperforming loans and leases | 4.35X | 4.83X | 4.84X | 4.39X | |||||
| Asset Quality Ratios (Excluding PPP and other Government Guaranteed) | |||||||||
| Loans 90 days or more past due and still accruing as a percentage of loans and leases | % | 0.03 | % | 0.04 | % | 0.04 | % | 0.04 | % |
| Applicable ratios are annualized. | |||||||||
| (1)Includes loans held for sale. | |||||||||
| As of/For the Year-to-Date | |||||||||
| Period Ended Dec. 31 | |||||||||
| 2021 | 2020 | ||||||||
| Asset Quality Ratios | |||||||||
| Net charge-offs as a percentage of average loans and leases | 0.24 | % | 0.36 | % | |||||
| Ratio of allowance for loan and lease losses to net charge-offs | 6.36X | 5.21X | |||||||
| Applicable ratios are annualized. | |||||||||
| The third quarter of 2020 includes 97 million of charge-offs on PCD assets directly related to the implementation of CECL. |
All values are in US Dollars.
Truist Financial Corporation 13
| December 31, 2021 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Past Due 30-89 | Past Due 90+ | ||||||||||||||||
| (Dollars in millions) | Current Status | Days | Days | Total | |||||||||||||
| Troubled Debt Restructurings | |||||||||||||||||
| Performing TDRs: (1) | |||||||||||||||||
| Commercial: | |||||||||||||||||
| Commercial and industrial | $ | 147 | 100.0 | % | $ | — | — | % | $ | — | — | % | $ | 147 | |||
| CRE | 5 | 100.0 | — | — | — | — | 5 | ||||||||||
| Consumer: | |||||||||||||||||
| Residential mortgage | 440 | 63.6 | 85 | 12.3 | 167 | 24.1 | 692 | ||||||||||
| Residential home equity and direct | 93 | 94.9 | 5 | 5.1 | — | — | 98 | ||||||||||
| Indirect auto | 320 | 82.3 | 69 | 17.7 | — | — | 389 | ||||||||||
| Indirect other | 6 | 85.7 | 1 | 14.3 | — | — | 7 | ||||||||||
| Student | 23 | 92.0 | 1 | 4.0 | 1 | 4.0 | 25 | ||||||||||
| Credit card | 24 | 88.9 | 2 | 7.4 | 1 | 3.7 | 27 | ||||||||||
| Total performing TDRs (1) | 1,058 | 76.1 | 163 | 11.7 | 169 | 12.2 | 1,390 | ||||||||||
| Nonperforming TDRs (2) | 43 | 28.3 | 21 | 13.8 | 88 | 57.9 | 152 | ||||||||||
| Total TDRs (1)(2) | $ | 1,101 | 71.4 | % | $ | 184 | 11.9 | % | $ | 257 | 16.7 | % | $ | 1,542 | |||
| (1)Past due performing TDRs are included in past due disclosures. | |||||||||||||||||
| (2)Nonperforming TDRs are included in nonaccrual loan disclosures. | |||||||||||||||||
| Quarter Ended | |||||||||||||||||
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | |||||||||||||
| 2021 | 2021 | 2021 | 2021 | 2020 | |||||||||||||
| Net Charge-offs as a Percentage of Average Loans and Leases: | |||||||||||||||||
| Commercial: | |||||||||||||||||
| Commercial and industrial | 0.09 | % | 0.04 | % | 0.09 | % | 0.17 | % | 0.15 | % | |||||||
| CRE | 0.07 | — | (0.05) | 0.04 | 0.27 | ||||||||||||
| Commercial construction | (0.10) | (0.06) | (0.06) | 0.08 | 0.39 | ||||||||||||
| Consumer: | |||||||||||||||||
| Residential mortgage | (0.02) | 0.04 | (0.01) | 0.08 | 0.03 | ||||||||||||
| Residential home equity and direct | 0.49 | 0.49 | 0.59 | 0.58 | 0.39 | ||||||||||||
| Indirect auto | 1.01 | 0.75 | 0.63 | 1.28 | 0.92 | ||||||||||||
| Indirect other | 0.39 | 0.26 | 0.17 | 0.39 | 0.31 | ||||||||||||
| Student | 0.65 | 0.31 | 0.16 | 0.16 | 0.17 | ||||||||||||
| Credit card | 2.31 | 1.90 | 2.75 | 2.74 | 2.11 | ||||||||||||
| Total loans and leases | 0.25 | 0.19 | 0.20 | 0.33 | 0.27 | ||||||||||||
| In 4Q21, the Company reclassified the lease financing portfolio to the commercial and industrial portfolio. Prior periods were reclassified to conform to the current presentation. | |||||||||||||||||
| Applicable ratios are annualized. | |||||||||||||||||
| Credit Quality - Allowance with Fair Value Marks | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| As of/For the Quarter Ended | |||||||||||||||||
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | |||||||||||||
| (Dollars in millions) | 2021 | 2021 | 2021 | 2021 | 2020 | ||||||||||||
| ALLL | $ | 4,435 | $ | 4,702 | $ | 5,121 | $ | 5,662 | $ | 5,835 | |||||||
| Unamortized fair value mark (1) | 1,323 | 1,540 | 1,777 | 2,067 | 2,395 | ||||||||||||
| Allowance plus unamortized fair value mark | $ | 5,758 | $ | 6,242 | $ | 6,898 | $ | 7,729 | $ | 8,230 | |||||||
| Loans and leases held for investment | $ | 289,513 | $ | 285,522 | $ | 286,485 | $ | 291,511 | $ | 299,734 | |||||||
| Unamortized fair value mark (1) | 1,323 | 1,540 | 1,777 | 2,067 | 2,395 | ||||||||||||
| Gross loans and leases | $ | 290,836 | $ | 287,062 | $ | 288,262 | $ | 293,578 | $ | 302,129 | |||||||
| Allowance for loan and lease losses as a percentage of loans and leases - GAAP | 1.53 | % | 1.65 | % | 1.79 | % | 1.94 | % | 1.95 | % | |||||||
| Allowance for loan and lease losses and unamortized fair value mark as a percentage of gross loans and leases - Adjusted (1) (2) | 1.98 | 2.17 | 2.39 | 2.63 | 2.72 |
(1)Unamortized fair value mark includes credit, interest rate and liquidity components.
(2)Allowance for loan and lease losses and unamortized fair value mark as a percentage of gross loans and leases is a non-GAAP measurement of credit reserves that is calculated by adjusting the ALLL and loans and leases held for investment by the unamortized fair value mark. Truist's management uses these measures to assess loss absorption capacity.
14 Truist Financial Corporation
| Segment Financial Performance - Preliminary | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | ||||||||||
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | ||||||
| (Dollars in millions) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||
| Consumer Banking and Wealth | ||||||||||
| Net interest income (expense) | $ | 1,631 | $ | 1,666 | $ | 1,688 | $ | 1,753 | $ | 1,818 |
| Net intersegment interest income (expense) | 347 | 365 | 417 | 370 | 366 | |||||
| Segment net interest income | 1,978 | 2,031 | 2,105 | 2,123 | 2,184 | |||||
| Allocated provision for credit losses | 59 | (5) | (4) | 100 | 116 | |||||
| Noninterest income | 992 | 1,028 | 925 | 920 | 997 | |||||
| Noninterest expense | 1,950 | 1,929 | 1,930 | 1,916 | 1,955 | |||||
| Income (loss) before income taxes | 961 | 1,135 | 1,104 | 1,027 | 1,110 | |||||
| Provision (benefit) for income taxes | 227 | 266 | 258 | 241 | 262 | |||||
| Segment net income (loss) | $ | 734 | $ | 869 | $ | 846 | $ | 786 | $ | 848 |
| Corporate and Commercial Banking | ||||||||||
| Net interest income (expense) | $ | 1,104 | $ | 1,125 | $ | 1,181 | $ | 1,208 | $ | 1,271 |
| Net intersegment interest income (expense) | 41 | 52 | 42 | 14 | 18 | |||||
| Segment net interest income | 1,145 | 1,177 | 1,223 | 1,222 | 1,289 | |||||
| Allocated provision for credit losses | (183) | (264) | (399) | (35) | 60 | |||||
| Noninterest income | 790 | 753 | 808 | 692 | 788 | |||||
| Noninterest expense | 814 | 820 | 842 | 775 | 836 | |||||
| Income (loss) before income taxes | 1,304 | 1,374 | 1,588 | 1,174 | 1,181 | |||||
| Provision (benefit) for income taxes | 280 | 300 | 348 | 251 | 259 | |||||
| Segment net income (loss) | $ | 1,024 | $ | 1,074 | $ | 1,240 | $ | 923 | $ | 922 |
| Insurance Holdings | ||||||||||
| Net interest income (expense) | $ | 24 | $ | 27 | $ | 25 | $ | 24 | $ | 26 |
| Net intersegment interest income (expense) | (4) | (2) | (4) | (4) | (4) | |||||
| Segment net interest income | 20 | 25 | 21 | 20 | 22 | |||||
| Allocated provision for credit losses | (1) | 1 | (1) | 1 | 2 | |||||
| Noninterest income | 681 | 652 | 698 | 633 | 562 | |||||
| Noninterest expense | 547 | 537 | 515 | 480 | 451 | |||||
| Income (loss) before income taxes | 155 | 139 | 205 | 172 | 131 | |||||
| Provision (benefit) for income taxes | 38 | 34 | 49 | 42 | 32 | |||||
| Segment net income (loss) | $ | 117 | $ | 105 | $ | 156 | $ | 130 | $ | 99 |
| Other, Treasury & Corporate (1) | ||||||||||
| Net interest income (expense) | $ | 484 | $ | 415 | $ | 351 | $ | 300 | $ | 251 |
| Net intersegment interest income (expense) | (384) | (415) | (455) | (380) | (380) | |||||
| Segment net interest income | 100 | — | (104) | (80) | (129) | |||||
| Allocated provision for credit losses | 22 | (56) | (30) | (18) | (1) | |||||
| Noninterest income | (140) | (68) | (26) | (48) | (62) | |||||
| Noninterest expense | 389 | 509 | 724 | 439 | 591 | |||||
| Income (loss) before income taxes | (451) | (521) | (824) | (549) | (781) | |||||
| Provision (benefit) for income taxes | (178) | (177) | (240) | (183) | (242) | |||||
| Segment net income (loss) | $ | (273) | $ | (344) | $ | (584) | $ | (366) | $ | (539) |
| Total Truist Financial Corporation | ||||||||||
| Net interest income (expense) | $ | 3,243 | $ | 3,233 | $ | 3,245 | $ | 3,285 | $ | 3,366 |
| Net intersegment interest income (expense) | — | — | — | — | — | |||||
| Segment net interest income | 3,243 | 3,233 | 3,245 | 3,285 | 3,366 | |||||
| Allocated provision for credit losses | (103) | (324) | (434) | 48 | 177 | |||||
| Noninterest income | 2,323 | 2,365 | 2,405 | 2,197 | 2,285 | |||||
| Noninterest expense | 3,700 | 3,795 | 4,011 | 3,610 | 3,833 | |||||
| Income (loss) before income taxes | 1,969 | 2,127 | 2,073 | 1,824 | 1,641 | |||||
| Provision (benefit) for income taxes | 367 | 423 | 415 | 351 | 311 | |||||
| Net income | $ | 1,602 | $ | 1,704 | $ | 1,658 | $ | 1,473 | $ | 1,330 |
| (1) Includes financial data from subsidiaries below the quantitative and qualitative thresholds requiring disclosure. |
Truist Financial Corporation 15
| Rollforward of Intangible Assets and Selected Fair Value Marks (1) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| As of/For the Quarter Ended | ||||||||||
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | ||||||
| (Dollars in millions) | 2021 | 2021 | 2021 | 2021 | 2020 | |||||
| Loans and Leases (2) | ||||||||||
| Beginning balance unamortized fair value mark | $ | (1,540) | $ | (1,777) | $ | (2,067) | $ | (2,395) | $ | (2,676) |
| Accretion | 217 | 233 | 285 | 316 | 356 | |||||
| Purchase accounting adjustments and other activity | — | 4 | 5 | 12 | (75) | |||||
| Ending balance | $ | (1,323) | $ | (1,540) | $ | (1,777) | $ | (2,067) | $ | (2,395) |
| Core deposit and other intangible assets | ||||||||||
| Beginning balance | $ | 2,930 | $ | 2,665 | $ | 2,825 | $ | 2,984 | $ | 2,840 |
| Additions - acquisitions | 647 | 418 | — | 14 | 320 | |||||
| Amortization of intangibles | (143) | (145) | (142) | (144) | (172) | |||||
| Amortization in net occupancy expense | (3) | (4) | (3) | (3) | (4) | |||||
| Purchase accounting adjustments and other activity | (23) | (4) | (15) | (26) | — | |||||
| Ending balance | $ | 3,408 | $ | 2,930 | $ | 2,665 | $ | 2,825 | $ | 2,984 |
| Deposits (3) | ||||||||||
| Beginning balance unamortized fair value mark | $ | (9) | $ | (12) | $ | (15) | $ | (19) | $ | (26) |
| Amortization | 2 | 3 | 3 | 4 | 7 | |||||
| Ending balance | $ | (7) | $ | (9) | $ | (12) | $ | (15) | $ | (19) |
| Long-Term Debt (3) | ||||||||||
| Beginning balance unamortized fair value mark | $ | (157) | $ | (176) | $ | (196) | $ | (216) | $ | (238) |
| Amortization | 18 | 19 | 20 | 20 | 22 | |||||
| Ending balance | $ | (139) | $ | (157) | $ | (176) | $ | (196) | $ | (216) |
(1)Includes only selected information and does not represent all purchase accounting adjustments.
(2)Purchase accounting marks on loans and leases includes credit, interest and liquidity components, and are generally recognized using the level-yield or straight-line method over the remaining life of the individual loans or recognized in full in the event of prepayment.
(3)Purchase accounting marks on liabilities represents interest rate marks on time deposits and long-term debt and are recognized using the level-yield method over the term of the liability.
| Capital Information - Five Quarter Trend | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As of/For the Quarter Ended | |||||||||||||||
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | |||||||||||
| (Dollars in millions, except per share data, shares in thousands) | 2021 | 2021 | 2021 | 2021 | 2020 | ||||||||||
| Selected Capital Information | (preliminary) | ||||||||||||||
| Risk-based capital: | |||||||||||||||
| Common equity tier 1 | $ | 37,524 | $ | 38,859 | $ | 38,690 | $ | 38,267 | $ | 37,869 | |||||
| Tier 1 | 44,194 | 45,529 | 45,360 | 45,388 | 45,915 | ||||||||||
| Total | 51,519 | 53,228 | 53,640 | 54,245 | 55,011 | ||||||||||
| Risk-weighted assets | 390,715 | 383,871 | 379,044 | 378,458 | 379,153 | ||||||||||
| Average quarterly assets for leverage ratio | 510,405 | 503,223 | 496,391 | 484,961 | 478,608 | ||||||||||
| Average quarterly assets for supplementary leverage ratio | 594,963 | 585,420 | 576,734 | 546,470 | 530,716 | ||||||||||
| Risk-based capital ratios: | |||||||||||||||
| Common equity tier 1 | 9.6 | % | 10.1 | % | 10.2 | % | 10.1 | % | 10.0 | % | |||||
| Tier 1 | 11.3 | 11.9 | 12.0 | 12.0 | 12.1 | ||||||||||
| Total | 13.2 | 13.9 | 14.2 | 14.3 | 14.5 | ||||||||||
| Leverage capital ratio | 8.7 | 9.0 | 9.1 | 9.4 | 9.6 | ||||||||||
| Supplementary leverage | 7.4 | 7.8 | 7.9 | 8.3 | 8.7 | ||||||||||
| Equity as a percentage of total assets | 12.8 | 13.0 | 13.1 | 13.1 | 13.9 | ||||||||||
| Common equity per common share | $ | 47.14 | $ | 46.62 | $ | 46.20 | $ | 45.17 | $ | 46.52 | |||||
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | |||||||||||
| (Dollars in millions, except per share data, shares in thousands) | 2021 | 2021 | 2021 | 2021 | 2020 | ||||||||||
| Calculations of Tangible Common Equity and Related Measures: (1) | |||||||||||||||
| Total shareholders' equity | $ | 69,271 | $ | 68,900 | $ | 68,336 | $ | 67,876 | $ | 70,912 | |||||
| Less: | |||||||||||||||
| Preferred stock | 6,673 | 6,673 | 6,673 | 7,124 | 8,048 | ||||||||||
| Noncontrolling interests | — | — | — | — | 105 | ||||||||||
| Intangible assets, net of deferred taxes | 28,772 | 27,066 | 26,296 | 26,413 | 26,629 | ||||||||||
| Tangible common equity | $ | 33,826 | $ | 35,161 | $ | 35,367 | $ | 34,339 | $ | 36,130 | |||||
| Outstanding shares at end of period (in thousands) | 1,327,818 | 1,334,892 | 1,334,770 | 1,344,845 | 1,348,961 | ||||||||||
| Tangible Common Equity Per Common Share | $ | 25.47 | $ | 26.34 | $ | 26.50 | $ | 25.53 | $ | 26.78 |
(1)Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist’s management uses these measures to assess the quality of capital and returns relative to balance sheet risk. These measures are not necessarily comparable to similar measures that may be presented by other companies.
16 Truist Financial Corporation
| Selected Mortgage Banking Information & Additional Information | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As of/For the Quarter Ended | |||||||||||||||
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | |||||||||||
| (Dollars in millions, except per share data) | 2021 | 2021 | 2021 | 2021 | 2020 | ||||||||||
| Residential Mortgage Income | |||||||||||||||
| Residential mortgage production revenue | $ | 115 | $ | 139 | $ | 122 | $ | 140 | $ | 229 | |||||
| Residential mortgage servicing income: | |||||||||||||||
| Residential mortgage servicing revenue | 155 | 157 | 139 | 141 | 150 | ||||||||||
| Realization of expected residential MSR cash flows | (143) | (146) | (175) | (208) | (209) | ||||||||||
| Income statement impact of mortgage servicing rights valuation: | |||||||||||||||
| MSRs fair value increase (decrease) | (25) | 77 | (188) | 360 | 62 | ||||||||||
| MSRs hedge gains (losses) | 57 | (48) | 219 | (333) | (39) | ||||||||||
| Net MSRs valuation | 32 | 29 | 31 | 27 | 23 | ||||||||||
| Total residential mortgage servicing income | $ | 44 | $ | 40 | $ | (5) | $ | (40) | $ | (36) | |||||
| Total residential mortgage income | $ | 159 | $ | 179 | $ | 117 | $ | 100 | $ | 193 | |||||
| Commercial Mortgage Income (1) | |||||||||||||||
| Commercial mortgage production revenue | $ | 40 | $ | 48 | $ | 40 | $ | 30 | $ | 60 | |||||
| Commercial mortgage servicing income: | |||||||||||||||
| Commercial mortgage servicing revenue | 18 | 17 | 17 | 17 | 16 | ||||||||||
| Realization of expected commercial MSR cash flows | (12) | (11) | (11) | (15) | (11) | ||||||||||
| Income statement impact of mortgage servicing rights valuation: | |||||||||||||||
| MSRs fair value increase (decrease) | (1) | 1 | (4) | 13 | 3 | ||||||||||
| MSRs hedge gains (losses) | — | (1) | 5 | (12) | (2) | ||||||||||
| Net MSRs valuation | (1) | — | 1 | 1 | 1 | ||||||||||
| Total commercial mortgage servicing income | $ | 5 | $ | 6 | $ | 7 | $ | 3 | $ | 6 | |||||
| Commercial mortgage income | $ | 45 | $ | 54 | $ | 47 | $ | 33 | $ | 66 | |||||
| Other Mortgage Banking Information | |||||||||||||||
| Residential mortgage loan originations | $ | 14,458 | $ | 15,852 | $ | 14,301 | $ | 13,075 | $ | 13,235 | |||||
| Residential mortgage servicing portfolio (2): | |||||||||||||||
| Loans serviced for others | 196,011 | 198,119 | 178,004 | 179,836 | 188,341 | ||||||||||
| Bank-owned loans serviced | 50,716 | 50,427 | 46,031 | 48,800 | 50,693 | ||||||||||
| Total servicing portfolio | 246,727 | 248,546 | 224,035 | 228,636 | 239,034 | ||||||||||
| Weighted-average coupon rate on mortgage loans serviced for others | 3.44 | % | 3.49 | % | 3.66 | % | 3.76 | % | 3.84 | % | |||||
| Weighted-average servicing fee on mortgage loans serviced for others | 0.31 | 0.31 | 0.31 | 0.31 | 0.32 | ||||||||||
| Additional Information | |||||||||||||||
| NQDC plan income (expense): | |||||||||||||||
| Interest income | $ | 1 | $ | 2 | $ | 2 | $ | 9 | $ | 1 | |||||
| Other income | (7) | 30 | 43 | 23 | 32 | ||||||||||
| Personnel expense | 6 | (32) | (45) | (32) | (33) | ||||||||||
| Total NQDC plan income (expense) | $ | — | $ | — | $ | — | $ | — | $ | — | |||||
| Fair value of derivatives, net | $ | 1,784 | $ | 2,375 | $ | 2,614 | $ | 2,222 | $ | 3,282 | |||||
| CVA/DVA income (expense) included in investment banking and trading income | 12 | 16 | (12) | 48 | 21 | ||||||||||
| Common stock prices: | |||||||||||||||
| High | 65.42 | 60.74 | 62.89 | 61.26 | 49.72 | ||||||||||
| Low | 54.73 | 51.87 | 52.61 | 46.71 | 37.86 | ||||||||||
| End of period | 58.55 | 58.65 | 55.50 | 58.32 | 47.93 | ||||||||||
| Banking offices | 2,517 | 2,518 | 2,557 | 2,556 | 2,781 | ||||||||||
| ATMs | 3,670 | 3,684 | 3,779 | 3,807 | 4,082 | ||||||||||
| FTEs (3) | 51,348 | 52,675 | 52,248 | 53,207 | 53,693 |
(1)In 4Q21, the Company reclassified certain structured real estate activity from commercial mortgage income to investment banking trading income and certain LIHTC activity from commercial mortgage income to other income. Prior periods were reclassified to conform to the current presentation.
(2)Amounts reported are unpaid principal balance.
(3)FTEs represents an average for the quarter.
Truist Financial Corporation 17
| Selected Items (1) | ||||
|---|---|---|---|---|
| Favorable (Unfavorable) | ||||
| (Dollars in millions) | After-Tax at | |||
| Description | Pre-Tax | Marginal Rate | ||
| Selected Items | ||||
| Fourth Quarter 2021 | ||||
| Incremental operating expenses related to the merger ($144 million professional fees and outside processing, $59 million personnel expense, and $12 million other) | $ | (215) | $ | (165) |
| Third Quarter 2021 | ||||
| Incremental operating expenses related to the merger ($132 million professional fees and outside processing, $41 million personnel expense, and $18 million other) | $ | (191) | $ | (147) |
| Professional fee accrual | (30) | (23) | ||
| Second Quarter 2021 | ||||
| Charitable contribution | $ | (200) | $ | (153) |
| Incremental operating expenses related to the merger ($137 million professional fees and outside processing, $42 million personnel expense, and $11 million other) | (190) | (146) | ||
| First Quarter 2021 | ||||
| Incremental operating expenses related to the merger ($120 million professional fees and outside processing, $42 million personnel expense, and $13 million other) | $ | (175) | $ | (134) |
| Acceleration for cash flow hedge unwind | (36) | (28) | ||
| Fourth Quarter 2020 | ||||
| Incremental operating expenses related to the merger ($124 million in professional fees and outside processing, $47 million in personnel expense, and $8 million in other expense) | $ | (179) | $ | (138) |
| Third Quarter 2020 | ||||
| Incremental operating expenses related to the merger ($99 million in professional fees and outside processing, $48 million in personnel expense, and $5 million in other expense) | $ | (152) | $ | (115) |
| Charitable contribution | (50) | (38) | ||
| Second Quarter 2020 | ||||
| Incremental operating expenses related to the merger ($64 million in professional fees and outside processing, $49 million in personnel expense, and $16 million in other expense) | $ | (129) | $ | (99) |
| First Quarter 2020 | ||||
| Incremental operating expenses related to the merger ($44 million in personnel expense, $20 million in professional fees and outside processing, and $10 million in other expense) | $ | (74) | $ | (57) |
(1)Includes costs not classified as merger-related and restructuring charges that are excluded from adjusted disclosures.
| Non-GAAP Reconciliations | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | Year-to-Date | ||||||||||||||||||||
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | Dec. 31 | Dec. 31 | |||||||||||||||
| (Dollars in millions) | 2021 | 2021 | 2021 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||
| Efficiency Ratio (1) | |||||||||||||||||||||
| Efficiency Ratio Numerator - Noninterest Expense - GAAP | $ | 3,700 | $ | 3,795 | $ | 4,011 | $ | 3,610 | $ | 3,833 | $ | 15,116 | $ | 14,897 | |||||||
| Merger-related and restructuring charges, net | (212) | (172) | (297) | (141) | (308) | (822) | (860) | ||||||||||||||
| Gain (loss) on early extinguishment of debt | 1 | — | — | 3 | — | 4 | (235) | ||||||||||||||
| Incremental operating expense related to the merger | (215) | (191) | (190) | (175) | (179) | (771) | (534) | ||||||||||||||
| Amortization of intangibles | (143) | (145) | (142) | (144) | (172) | (574) | (685) | ||||||||||||||
| Charitable contribution | — | — | (200) | — | — | (200) | (50) | ||||||||||||||
| Professional fee accrual | — | (30) | — | — | — | (30) | — | ||||||||||||||
| Acceleration for cash flow hedge unwind | — | — | — | (36) | — | (36) | — | ||||||||||||||
| Efficiency Ratio Numerator - Adjusted | $ | 3,131 | $ | 3,257 | $ | 3,182 | $ | 3,117 | $ | 3,174 | $ | 12,687 | $ | 12,533 | |||||||
| Efficiency Ratio Denominator - Revenue (2) - GAAP | $ | 5,566 | $ | 5,598 | $ | 5,650 | $ | 5,482 | $ | 5,651 | $ | 22,296 | $ | 22,705 | |||||||
| Taxable equivalent adjustment | 24 | 28 | 28 | 28 | 28 | 108 | 125 | ||||||||||||||
| Securities (gains) losses | — | — | — | — | — | — | (402) | ||||||||||||||
| Gains on divestiture of certain businesses | — | — | — | (37) | — | (37) | — | ||||||||||||||
| Efficiency Ratio Denominator - Adjusted | $ | 5,590 | $ | 5,626 | $ | 5,678 | $ | 5,473 | $ | 5,679 | $ | 22,367 | $ | 22,428 | |||||||
| Efficiency Ratio - GAAP | 66.5 | % | 67.8 | % | 71.0 | % | 65.8 | % | 67.8 | % | 67.8 | % | 65.6 | % | |||||||
| Efficiency Ratio - Adjusted | 56.0 | 57.9 | 56.1 | 56.9 | 55.9 | 56.7 | 55.9 |
(1)The adjusted efficiency ratio is non-GAAP in that it excludes securities gains (losses), amortization of intangible assets, merger-related and restructuring charges, and other selected items. Truist's management uses this measure in their analysis of the Corporation's performance. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. These measures are not necessarily comparable to similar measures that may be presented by other companies.
(2)Revenue is defined as net interest income plus noninterest income.
18 Truist Financial Corporation
| Quarter Ended | Year-to-Date | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | Dec. 31 | Dec. 31 | |||||||||||||||
| (Dollars in millions) | 2021 | 2021 | 2021 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||
| Return on Average Tangible Common Shareholders' Equity (1) | |||||||||||||||||||||
| Net income available to common shareholders | $ | 1,524 | $ | 1,616 | $ | 1,559 | $ | 1,334 | $ | 1,228 | $ | 6,033 | $ | 4,184 | |||||||
| Plus: Amortization of intangibles, net of tax | 110 | 113 | 107 | 111 | 131 | 441 | 524 | ||||||||||||||
| Tangible net income available to common shareholders | $ | 1,634 | $ | 1,729 | $ | 1,666 | $ | 1,445 | $ | 1,359 | $ | 6,474 | $ | 4,708 | |||||||
| Average common shareholders' equity | $ | 61,807 | $ | 62,680 | $ | 61,709 | $ | 62,252 | $ | 61,991 | $ | 62,112 | $ | 61,379 | |||||||
| Less: Average intangible assets, net of deferred taxes | 27,523 | 27,149 | 26,366 | 26,535 | 25,930 | 26,897 | 26,122 | ||||||||||||||
| Average tangible common shareholders' equity | $ | 34,284 | $ | 35,531 | $ | 35,343 | $ | 35,717 | $ | 36,061 | $ | 35,215 | $ | 35,257 | |||||||
| Return on average common shareholders' equity | 9.8 | % | 10.2 | % | 10.1 | % | 8.7 | % | 7.9 | % | 9.7 | % | 6.8 | % | |||||||
| Return on average tangible common shareholders' equity | 18.9 | 19.3 | 18.9 | 16.4 | 15.0 | 18.4 | 13.4 |
(1)Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist’s management uses these measures to assess the quality of capital and returns relative to balance sheet risk. These measures are not necessarily comparable to similar measures that may be presented by other companies.
| Quarter Ended | Year-to-Date | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec. 31 | Sept. 30 | June 30 | March 31 | Dec. 31 | Dec. 31 | Dec. 31 | ||||||||
| (Dollars in millions, except per share data) | 2021 | 2021 | 2021 | 2021 | 2020 | 2021 | 2020 | |||||||
| Diluted EPS (1) | ||||||||||||||
| Net income available to common shareholders - GAAP | $ | 1,524 | $ | 1,616 | $ | 1,559 | $ | 1,334 | $ | 1,228 | $ | 6,033 | $ | 4,184 |
| Merger-related and restructuring charges | 163 | 132 | 228 | 108 | 237 | 631 | 660 | |||||||
| Securities (gains) losses | — | — | — | — | — | — | (308) | |||||||
| Loss (gain) on early extinguishment of debt | — | — | (1) | (2) | — | (3) | 180 | |||||||
| Incremental operating expenses related to the merger | 165 | 147 | 146 | 134 | 138 | 592 | 409 | |||||||
| Charitable contribution | — | — | 153 | — | — | 153 | 38 | |||||||
| Professional fee accrual | — | 23 | — | — | — | 23 | — | |||||||
| Acceleration for cash flow hedge unwind | — | — | — | 28 | — | 28 | — | |||||||
| Net income available to common shareholders - adjusted | $ | 1,852 | $ | 1,918 | $ | 2,085 | $ | 1,602 | $ | 1,603 | $ | 7,457 | $ | 5,163 |
| Weighted average shares outstanding - diluted | 1,343,029 | 1,346,854 | 1,349,492 | 1,358,932 | 1,361,763 | 1,349,378 | 1,358,289 | |||||||
| Diluted EPS - GAAP | $ | 1.13 | $ | 1.20 | $ | 1.16 | $ | 0.98 | $ | 0.90 | $ | 4.47 | $ | 3.08 |
| Diluted EPS - adjusted | 1.38 | 1.42 | 1.55 | 1.18 | 1.18 | 5.53 | 3.80 |
(1)The adjusted diluted earnings per share is non-GAAP in that it excludes merger-related and restructuring charges and other selected items, net of tax. Truist's management uses this measure in their analysis of the Corporation's performance. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges.
Truist Financial Corporation 19
ex993-earningsdeck4q21
Fourth Quarter 2021 Earnings Conference Call Bill Rogers – CEO Daryl Bible – CFO January 18, 2022
2 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,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” “may,” “will,” “should,” “would,” “could” and other similar expressions are intended to identify these forward-looking statements. In particular, forward looking statements include, but are not limited to, statements we make about: (i) Truist’s ability to generate positive operating leverage in future periods, (ii) Truist’s effective income tax rate in future periods, (iii) Truist’s ability to increase diversity in senior leadership roles going forward, (iv) new digital capabilities to be offered by Truist and the timing for making such capabilities available, (v) future levels of insurance revenue and net income, total revenue, adjusted noninterest expense, net charge-off ratio, and net interest margin, (vi) the timing for completion of Truist’s merger integration and conversion activities and the future benefits of such activities, (vii) projected amounts of merger-related and restructuring charges and incremental operating expenses related to the merger and the timing for elimination of such charges and expenses, (viii) the amount of expense savings to be realized from the merger and the timing of such realization, including through reductions in third party spend and non-branch facilities, branch closures, decreases in personnel and technology integrations, (ix) Truist’s expectations for its CET1 ratio and share repurchases, (x) anticipated capital deployment in future periods, (xi) the effects of interest rate changes on Truist’s net interest income, (xii) Truist’s medium-term performance targets with respect to return on tangible common equity and efficiency ratio, (xiii) the impacts of purchase accounting accretion and amortization of intangibles in future periods, and (xiv) projections of future dividends. Forward-looking statements are not based on historical facts but instead represent management’s expectations and assumptions regarding Truist’s business, the economy and other future conditions. Such statements involve inherent uncertainties, risks and changes in circumstances that are difficult to predict. As such, Truist’s actual results may differ materially from those contemplated by forward-looking statements. While there can be no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those contemplated by forward-looking statements include the following, without limitation, as well as the risks and uncertainties more fully discussed under Part I, Item 1A-Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020 and in Truist's subsequent filings with the Securities and Exchange Commission: • risks and uncertainties relating to the Merger of heritage BB&T and heritage SunTrust, including the ability to successfully integrate the companies or to realize the anticipated benefits of the Merger; • expenses relating to the Merger and integration of heritage BB&T and heritage SunTrust; • deposit attrition, client loss or revenue loss following completed mergers or acquisitions may be greater than anticipated; • the COVID-19 pandemic disrupted the global economy and adversely impacted Truist’s financial condition and results of operations, including through increased expenses, reduced fee income and net interest margin, decreased demand for certain types of loans, and increases in the allowance for credit losses; a resurgence of the pandemic, whether due to new variants of the coronavirus or other factors, could reintroduce or prolong these negative impacts and also adversely affect Truist’s capital and liquidity position or cost of capital, impair the ability of borrowers to repay outstanding loans, cause an outflow of deposits, and impair goodwill or other assets; • Truist is subject to credit risk by lending or committing to lend money, and may have more credit risk and higher credit losses to the extent that loans are concentrated by loan type, industry segment, borrower type or location of the borrower or collateral; • changes in the interest rate environment, including the replacement of LIBOR as an interest rate benchmark, which could adversely affect Truist’s revenue and expenses, the value of assets and obligations, and the availability and cost of capital, cash flows, and liquidity; • inability to access short-term funding or liquidity, loss of client deposits or changes in Truist’s credit ratings, which could increase the cost of funding or limit access to capital markets; • risk management oversight functions may not identify or address risks adequately, and management may not be able to effectively manage credit risk; • risks resulting from the extensive use of models in Truist’s business, which may impact decisions made by management and regulators; • failure to execute on strategic or operational plans, including the ability to successfully complete or integrate mergers and acquisitions; • increased competition, including from (i) new or existing competitors that could have greater financial resources or be subject to different regulatory standards, and (ii) products and services offered by non-bank financial technology companies, may reduce Truist’s client base, cause Truist to lower prices for its products and services in order to maintain market share or otherwise adversely impact Truist’s businesses or results of operations; • failure to maintain or enhance Truist’s competitive position with respect to new products, services and technology, whether it fails to anticipate client expectations or because its technological developments fail to perform as desired or do not achieve market acceptance or regulatory approval or for other reasons, may cause Truist to lose market share or incur additional expense; • negative public opinion, which could damage Truist’s reputation; • increased scrutiny regarding Truist’s consumer sales practices, training practices, incentive compensation design, and governance; • regulatory matters, litigation or other legal actions, which may result in, among other things, costs, fines, penalties, restrictions on Truist’s business activities, reputational harm, negative publicity, or other adverse consequences; • evolving legislative, accounting and regulatory standards, including with respect to capital and liquidity requirements, and results of regulatory examinations may adversely affect Truist’s financial condition and results of operations; • the monetary and fiscal policies of the federal government and its agencies could have a material adverse effect on profitability; • accounting policies and processes require management to make estimates about matters that are uncertain, including the potential write down to goodwill if there is an elongated period of decline in market value for Truist’s stock and adverse economic conditions are sustained over a period of time; • general economic or business conditions, either globally, nationally or regionally, may be less favorable than expected, and instability in global geopolitical matters or volatility in financial markets could result in, among other things, slower deposit or asset growth, a deterioration in credit quality, or a reduced demand for credit, insurance, or other services; • risks related to originating and selling mortgages, including repurchase and indemnity demands from purchasers related to representations and warranties on loans sold, which could result in an increase in the amount of losses for loan repurchases; • risks relating to Truist’s role as a loan servicer, including an increase in the scope or costs of the services Truist is required to perform, without any corresponding increase in servicing fees or a breach of Truist’s obligations as servicer; • Truist’s success depends on hiring and retaining key personnel, and if these individuals leave or change roles without effective replacements, Truist’s operations and integration activities could be adversely impacted, which could be exacerbated in the increased work-from-home environment caused by the COVID-19 pandemic as job markets may be less constrained by physical geography; • fraud or misconduct by internal or external parties, which Truist may not be able to prevent, detect, or mitigate; • security risks, including denial of service attacks, hacking, social engineering attacks targeting Truist’s teammates and clients, malware intrusion, data corruption attempts, system breaches, cyber-attacks, identity theft, ransomware attacks, and physical security risks, such as natural disasters, environmental conditions, and intentional acts of destruction, could result in the disclosure of confidential information, adversely affect Truist’s business or reputation or create significant legal or financial exposure; and • widespread outages of operational, communication, or other systems, whether internal or provided by third parties, natural or other disasters (including acts of terrorism and pandemics), and the effects of climate change, including physical risks, such as more frequent and intense weather events, and risks related to the transition to a lower carbon economy, such as regulatory or technological changes or shifts in market dynamics or consumer preferences, could have an adverse effect on Truist’s financial condition and results of operations, lead to material disruption of Truist’s operations or the ability or willingness of clients to access Truist’s products and services. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by applicable law or regulation, Truist undertakes no obligation to revise or update any forward-looking statements. Forward-Looking Statements
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 of the Corporation's performance and the efficiency of its operations. Management believes these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the effects of significant items in the current period. The Company believes a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. Truist’s management believes investors may find these non-GAAP financial measures useful. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non- GAAP performance measures that may be presented by other companies. Below is a listing of the types of non-GAAP measures used in this presentation: Adjusted Efficiency Ratio - The adjusted efficiency ratio is non-GAAP in that it excludes securities gains (losses), amortization of intangible assets, merger-related and restructuring charges, and other selected items. Truist's management uses this measure in their analysis of the Corporation's performance. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. Pre-Provision Net Revenue - Pre-provision net revenue is a non-GAAP measure that adjusts net income determined in accordance with GAAP to exclude the impact of the provision for credit losses and provision for income taxes. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods. Tangible Common Equity and Related Measures - Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist’s management uses these measures to assess the quality of capital and returns relative to balance sheet risk. Core NIM - Core net interest margin is a non-GAAP measure that adjusts net interest margin to exclude the impact of purchase accounting. The purchase accounting marks and related amortization for a) securities acquired from the FDIC in the Colonial Bank acquisition and b) loans, deposits and long-term debt from SunTrust and other acquisitions are excluded to approximate the yields paid by clients. Truist's management believes the adjustments to the calculation of net interest margin for certain assets and liabilities acquired provide investors with useful information related to the performance of Truist's earning assets. Adjusted Diluted EPS - The adjusted diluted earnings per share is non-GAAP in that it excludes merger-related and restructuring charges and other selected items, net of tax. Truist's management uses this measure in their analysis of the Corporation's performance. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. Performance Ratios - The adjusted performance ratios, including adjusted return on average assets, adjusted return on average common shareholders’ equity, and adjusted return on average tangible common shareholders’ equity, are non-GAAP in that they exclude merger-related and restructuring charges, selected items, and, in the case of return on average tangible common shareholders' equity, amortization of intangible assets. Truist's management uses these measures in their analysis of the Corporation's performance. Truist's management believes these measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrate the effects of significant gains and charges. Insurance Holdings Adjusted EBITDA - 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 other selected items. Truist's management uses this measure in its analysis of the Corporation's Insurance Holdings segment. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. Selected items affecting results are included on slide 7.
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5 Living our purpose Inspire and build better lives and communities Community Impact, Financial Inclusion, and Education Responsible Business and Ethical Conduct Technology and Client Service Human Capital and DEI ESG and Environmental Sustainability – 113% of prorated goal for the $60 billion 3 year 2020-2022 Community Benefits Plan commitment1 – Truist Community Capital committed nearly $1.7 billion2 to support nearly 10K units of affordable housing, 3K+ new jobs, and 100K+ people served in LMI communities – $8 million commitment to the Mayor’s Racial Equity initiative in Charlotte, NC, Truist HQ – Truist’s industry-leading Child Tax Credit initiative drove growth in savings for clients in LMI communities from May-Dec. (9% savings, 15% IRA balance growth) – Expanded Operation HOPE financial coaching to 600 branches – Successfully completed latest merger conversion milestone, transitioning hBB&T clients to the Truist technology ecosystem (Oct. ‘21) – Welcomed teammates to the Innovation & Technology Center (ITC) at Truist’s headquarters, with an external grand opening targeted for 1H22 – As of Dec. 31, nearly 9 million (~95%) Truist Retail, Wealth, and Small Business clients eligible to utilize the new Truist digital platforms – Launched new Truist Digital Commerce platform offering Truist‑branded products in a goal- based, mobile-optimized experience – Achieved commitment to increase ethnically diverse representation in senior leadership roles 1 year early; currently at 15.1% and expect more progress – $100 million investment to help launch Sterling Capital ETF which employs investment strategies from diverse-owned asset managers – Implemented onsite, remote, and hybrid workstyles for teammates as part of flexible work strategy – Launched inaugural TCFD report – CDP climate score increased from a C to a B – Joined Partnership for Carbon Accounting Financials (PCAF) – Named to JUST Capital’s “JUST 100” list of “America’s Most JUST Companies” 1 As of 11/30/21 2 Full year 2021, includes debt and equity
Financial Results
7 Selected items affecting 4Q21 results Item ($ MM, except per share impact) Pre-Tax After-Tax Diluted EPS Impact Merger-related and restructuring charges ($212) ($163) ($0.12) Incremental operating expenses related to the merger ($215) ($165) ($0.12) See non-GAAP reconciliations in the appendix Diluted EPS impact for individual items may not foot to difference between GAAP diluted and adjusted diluted EPS due to rounding
8 4Q21 performance highlights Summary Income Statement ($ MM) Commentary Earnings and profitability – Strong overall financial results: $1.9 billion of adjusted net income ($1.38 per share) and 22.6% adjusted ROTCE ◦ Sequential and YoY trends primarily impacted by changes in loan loss provision – 3% sequential positive operating leverage (on an adjusted basis) ◦ Relatively stable revenue combined with 3.9% adjusted expense reduction – Asset quality remains excellent: 25 bps NCO Significant capital deployment – Strong organic loan growth (up 1.9%, ex. PPP, end-of-period) – Completed acquisition of Service Finance in December – Repurchased $500 million common stock – CET1 was 9.6% Merger integration – Completed part 1 of core bank conversion (heritage BB&T clients to Truist ecosystem) in October – Digital migration ~95% complete – On track for core bank conversion in February Change vs. 4Q21 3Q21 4Q20 GAAP / Unadjusted Revenue $5,590 (0.6)% (1.6)% Expense $3,700 (2.5)% (3.5)% PPNR $1,890 3.2% 2.4% Provision for credit losses $(103) NM NM Net income available to common $1,524 (5.7)% 24.1% Diluted EPS $1.13 (5.8)% 25.6% ROTCE 18.9% (40) bps 390 bps Efficiency ratio 66.5% (130) bps (130) bps Adjusted Revenue $5,590 (0.6)% (1.6)% Expense $3,131 (3.9)% (1.4)% PPNR $2,459 3.8% (1.8)% Net income available to common $1,852 (3.4)% 15.5% Diluted EPS $1.38 (2.8)% 16.9% ROTCE 22.6% — 360 bps Efficiency ratio 56.0% (190) bps 10 bps Note: All data points are taxable-equivalent, where applicable; see non-GAAP reconciliations in the appendix
9 2021 performance highlights Summary Income Statement ($ MM) Commentary Earnings and profitability – Strong overall financial results: $7.5 billion of adjusted net income ($5.53 per share) and 22.0% adjusted ROTCE ◦ EPS growth of 46%, reflects $3.1 billion lower loan loss provision expense due to significantly improved economic environment – Diverse business model (fees ex. securities gains +10%) and disciplined expense management (adjusted expenses up 1.2%) help to offset 6.0% decline in net interest income – Excellent asset quality: NCO ratio declined from 36 bps to 24 bps Significant capital deployment – Revised CET1 target from 10.0% to 9.75% – Completed acquisitions of Constellation and Service Finance – Increased dividend 7% in 3Q21 – Total capital deployment (including impact of acquisitions) of 115% Merger integration – Completed 18 major integration milestones across wealth, mortgage, and core bank – Introduced ‘Digital Straddle’, patent-pending approach that de-linked front-end conversion from back-end ◦ As a result, digital migration ~95% complete – Significant preparation for core bank conversion (our largest) in February 2022 2021 2020 Change GAAP / Unadjusted Revenue $22,404 $22,830 (1.9)% Expense $15,116 $14,897 1.5% PPNR $7,288 $7,933 (8.1)% Provision for credit losses $(813) $2,335 NM Net income available to common $6,033 $4,184 44.2% Diluted EPS $4.47 $3.08 45.1% ROTCE 18.4% 13.4% 500 bps Efficiency ratio 67.8% 65.6% 220 bps Adjusted Revenue $22,367 $22,428 (0.3)% Expense $12,687 $12,533 1.2% PPNR $9,680 $9,895 (2.2)% Net income available to common $7,457 $5,163 44.4% Diluted EPS $5.53 $3.80 45.5% ROTCE 22.0% 15.9% 610 bps Efficiency ratio 56.7% 55.9% 80 bps Note: All data points are taxable-equivalent, where applicable; see non-GAAP reconciliations in the appendix
10 Digital First migration Truist Migration Waves 2Q21 3Q21 4Q21 1Q22 Truist digital experience pilot Client migration waves to Truist experience begins Completion of BB&T migration Truist core conversion – 12K teammate digital pilot – Select group of Retail and Small Business clients migrated in June – Introduced Truist Insights to heritage BB&T clients – ~7 million Truist clients migrated to the Truist digital experience across Retail, Wealth, and Small Business – ~9 million Retail, Business, and Wealth digital clients have successfully migrated to Truist Digital – 55% of migrated clients are beginning to use the new digital platform – Complete SunTrust consumer client migration – SunTrust SunView commercial client migration to Truist OneView* Truist OneView *BBTView clients will migrate to Truist OneView in 2H22; ~20K clients 13% increase in digital OSAT (August – December) 4.5 stars Apple App Store 4.3 stars Google Play Store 2,000 new features across Truist Retail, Wealth, Business, and Commercial
11 Digital acceleration 2020 2021 2020 2021 1 Lending includes HELOC, personal loans, physician loans, and small business loans. Data points represent number of loans. 2 Active users reflect clients that have logged in using the mobile app over the prior 90 days; clients using mobile app at both organizations were counted only once. 3.4K 4.3K 3.9MM 4.0MM Digital Lending Growth1 Mobile App Users2 Mobile Check Deposits (Transactions) Zelle Transactions New Truist platform will support clients across the continuum (including Retail, Wealth, Business, and Corporate/Commercial) with relevant differentiation for each client segment Truist’s One View Corporate Banking solution brings a comprehensive suite of Treasury Management and lending solutions together in a single experience that reduces the time needed to perform daily cash and financial management tasks Companion Mobile App: view your financial positions and execute key transactions on the go, including payment and transfer approvals and user administration Comprehensive Dashboard: delivers a tailored experience based on the user’s entitlements and other personalization features such as choosing your home page Granular User Management: dictate and control what individual users can see and do in One View across a wide variety of applications Security Processes: bank with confidence that your information and transactions are protected with two factor authentication, including an authenticator app for maximum security 23% 3% 2020 2021 21MM 23MM 13% 2020 2021 35MM 53MM 50%
12 – Average loans down 6.5%; ex. PPP, down 6.1% ◦ Similar drivers as 4Q20 vs. 4Q21 comparison – Average loans down 5.5%; ex. PPP, down 2.5% primarily driven by significant levels of system-wide liquidity ◦ C&I, ex. PPP, down 0.5% ◦ CRE / commercial construction down 12% ◦ Consumer and card, ex. mortgage, down 1.5% driven by student and home equity, partially offset by growth in LightStream, Sheffield, and Auto ◦ Residential mortgage down 3.4% given significant prepayment activity throughout 2021 – Average loans stable; ex. PPP, average loans up 0.8% ◦ C&I, ex. PPP, up 1.4% due to broad-based growth across most businesses ◦ Residential mortgage increased 4.0% due to slower prepay speeds and continued purchases of correspondent production ◦ Consumer and card, ex. mortgage, down 0.5% due to continued declines in government guaranteed student loan portfolio ◦ CRE / commercial construction down 3.5% – EOP loans, ex. PPP, up a strong 1.9% ◦ C&I, ex. PPP, up 4.8% – PPP loans were $2.1 billion at 12/31 and $2.7 billion for average 4Q21 (see appendix for more detail) $309.0 $288.9 $181.7 $168.6 $127.3 $120.3 4.35% 3.97% 3.76% 3.57% 2020 2021 Average loans & leases HFI $178.3 $173.8 $170.5 $165.8 $164.5 4.13% 4.11% 4.03% 3.92% 3.81% 3.63% 3.65% 3.61% 3.58% 3.49% Commercial LHFI ($ B) Consumer & Card LHFI ($ B) Loans HFI yield (%) Loans HFI yield ex. PAA (%) 4Q20 1Q21 2Q21 3Q21 4Q21 5-Quarter Trend vs. Prior Quarter Full Year vs. Year-over-Year vs. Prior Year (5.5%) (7.2%) $302.9 $294.7 $288.6 $286.2 $286.3 0.8% ex. PPP $124.6 $120.9 $118.0 $120.4 $121.8
13 $363.3 $398.4 0.22% 0.04% 2020 2021 Average deposits $375.3 $383.2 $396.3 $402.7 $411.0 0.07% 0.05% 0.04% 0.03% 0.03% Total deposits ($ B) Total deposit cost (%) 4Q20 1Q21 2Q21 3Q21 4Q21 5-Quarter Trend vs. Prior Quarter Full Year vs. Year-over-Year vs. Prior Year – Average deposits increased $8.2 billion, or 2.0%, primarily due to ongoing impacts of government stimulus and seasonal impact of public funds ◦ Noninterest-bearing deposits increased 3.4% ◦ Interest checking increased 2.5% – Total deposit cost was 3 bps – Average deposits increased $36 billion, or 10%, due to ongoing impacts of government stimulus – Average deposits up 10% – Total deposit cost declined 18 bps 10%
14 Net interest income & net interest margin 5-Quarter Trend vs. Prior Quarter Full Year vs. Year-over-Year vs. Prior Year $3,394 $3,313 $3,273 $3,261 $3,267 3.08% 3.01% 2.88% 2.81% 2.76% 2.72% 2.69% 2.60% 2.58% 2.55% Net interest income TE ($ MM) Reported NIM (%) Core NIM (%) 4Q20 1Q21 2Q21 3Q21 4Q21 $13,951 $13,114 3.22% 2.86% 2.79% 2.60% 2020 2021 – Net interest income increased slightly primarily due to growth in the securities portfolio, as a result of ongoing strong deposit growth, offsetting the decline in PAA and PPP – NIM declined 5 bps ◦ PAA contributed 2 bps ◦ Core NIM declined 3 bps driven by lower PPP and higher levels of liquidity – Net interest income declined 3.7% due to lower PAA and 5.5% decline in loans; partially offset by a 50% increase in securities portfolio as a result of strong deposit growth – NIM declined 32 bps ◦ PAA contributed 15 bps ◦ Core NIM declined 17 bps due to higher levels of liquidity and the ongoing impact of the lower rate environment – Net interest income declined 6.0% and NIM decreased 36 bps due to aforementioned factors impacting 4Q21 vs. 4Q20
15 Year 1 Net Interest Income Sensitivity1 Commentary Interest rate sensitivity – 5.2% asset sensitivity in +100 bps ramp ◦ ~75% of asset sensitivity from short-end of the curve – 1 Fed Hike (short-end only, 25% beta) is worth 6 bps to NIM (all else equal) – Other relevant data points ◦ ~52% of loans are floating rate (net of hedges) ◦ Minimal current contribution from in-the-money floors 1 Market rate increase or decrease scenarios assume either (1) a ramped, parallel 25 basis point change per quarter in market interest rates or (2) instantaneous change. Also assumes that market rates floor at 1 basis point. Balanced approach to managing interest rate risk provides enhanced current earnings while also maintaining significant upside to higher rates 2.3% 3.9% 5.2%2.5% 5.0% 9.8% Ramp Shock Up 25 Up 50 Up 100
16 Noninterest income 5-Quarter Trend vs. Prior Quarter Full Year vs. Year-over-Year vs. Prior Year $2,285 $2,197 $2,405 $2,365 $2,323 40.4% 40.1% 42.6% 42.2% 41.7% Noninterest income ($ MM) Fee income ratio (%) 4Q20 1Q21 2Q21 3Q21 4Q21 $8,879 $9,290 39.1% 41.7% 2020 2021 – Noninterest income declined $42 million, or 1.8% – Ex. impact of NQDCP, fee income was stable ◦ Investment banking & trading up $61 million due to higher syndicated finance, structured real estate, and M&A fees ◦ Residential mortgage down $20 million due to volume and margins ◦ Insurance income increased $21 million due to seasonality ◦ Other income, ex. impact of NQDCP, declined $70 million primarily due to lower SBIC gains and loss on Visa derivative – Noninterest income increased 1.7%, or $38 million – Insurance income increased $121 million, or 22%, due to acquisitions and strong 11% organic growth – Investment banking & trading increased $23 million, or 6.5% due to higher syndicated finance and M&A fees, partially offset by lower trading income – Card, payment, and service charges up 6.0% due to continued economic recovery – Residential mortgage income declined $34 million as lower production income (lower volume/margins) was partially offset by higher servicing income (slower prepays) – Other income, ex. NQDCP, declined $28 million due to loss on Visa derivative – Diverse business mix, firing on multiple cylinders, due to ongoing investments results in strong 10% fee income growth (excluding securities gains) – Insurance, investment banking, and wealth up nearly $1 billion ◦ Insurance income up 20% ◦ Investment banking & trading up 43% ◦ Wealth management income up 9% – Card, payment, and service charges up 8.6% due to continued economic recovery – Residential mortgage income declined $445 million, or 45%, due to lower production income (lower volumes & margins), partially offset by higher servicing income 10% ex. sec. gains 4.6%
17 – Adjusted noninterest expense declined $43 million, or 1.4% ◦ Adjusted personnel expense2 down $24 million as lower FTEs partially offset by higher performance-driven incentive expenses ◦ Occupancy expense down $21 million, or 10%, due to ongoing real estate rationalization – GAAP expenses increased $219 million, or 1.5% ◦ Merger-related and restructuring costs1 were $1.6 billion in 2021 compared to $1.4 billion in 2020 – Strong expense control: adjusted expenses increased 1.2% ◦ $140 million, or 16%, reduction in net occupancy costs ◦ Adjusted personnel expense2 increased 6.2% primarily due to incentives associated with 10% fee income growth, partially offset by cost saving programs ▪ Excluding acquisitions, FTEs down ~3,000, or 5.5% – Noninterest expense declined $95 million, or 2.5% ◦ 4Q21 included $427 million of merger-related and restructuring costs1 compared to $363 million of similar costs in the prior quarter, driven by system conversions and data center migrations – Adjusted noninterest expense was $3.1 billion, down $126 million, or 3.9% ◦ Primarily driven by $109 million decline in adjusted personnel expense2 as a result of lower salaries, lower medical claims, lower incentive costs, and changes in NQDCP ◦ Equipment expense and marketing costs declined $56 million from elevated 3Q levels ◦ Partially offset by ~$25 million higher operating losses (other expense) $12,533 $12,687 65.6% 67.8% 55.9% 56.7% 2020 2021 $3,174 $3,117 $3,182 $3,257 $3,131 67.8% 65.8% 71.0% 67.8% 66.5% 55.9% 56.9% 56.1% 57.9% 56.0% Adjusted noninterest expense Merger-related & restructuring costs Amortization Other significant items GAAP efficiency ratio Adjusted efficiency ratio 4Q20 1Q21 2Q21 3Q21 4Q21 Noninterest expense 5-Quarter Trend ($ MM) $427 $143 $363 $145 $30 $487 $142 $200 $316 $144 $487 $172 vs. Prior Quarter vs. Year-over-Year vs. Prior Year $36 $1,593 $574 $266 $1,394 $685 $285 1 Includes merger-related and restructuring charges and incremental operating expenses related to the merger 2 Excludes incremental operating expenses related to the merger $3,795 $4,011 $3,700$3,833 $15,116$14,897 Full Year ($ MM) 1.2% 3,610 1
18 Asset quality 4.5x 9.0x 8.8x $421Net Charge-Offs Provision Nonperforming Loans / LHFI ALLL $205 $238 $142 $135 $182 0.27% 0.33% 0.20% 0.19% 0.25% NCO NCO ratio 4Q20 1Q21 2Q21 3Q21 4Q21 $1,119 $697 0.36% 0.24% 2020 2021 $177 $48 4Q20 1Q21 2Q21 3Q21 4Q21 $2,335 $(813) 2020 2021 0.44% 0.40% 0.37% 0.38% 0.38% 4Q20 1Q21 2Q21 3Q21 4Q21 $5,835 $5,662 $5,121 $4,702 $4,435 1.95% 1.94% 1.79% 1.65% 1.53% ALLL ALLL ratio ALLL / NCO 4Q20 1Q21 2Q21 3Q21 4Q21 Strong credit performance: 25 bps of NCO (slightly higher than 3Q given seasonally higher consumer losses and lower commercial recoveries) Provision benefit reflects continued improving economic outlook ALLL ratio declined 12 bps (coverage remains very strong) Asset quality remains excellent, reflecting our prudent risk culture, diverse portfolio, improving economic conditions, and the ongoing effects of government stimulus Leading indicators (NPL, early stage delinquencies) remain strong $(434) $(324) $(103) 7.2X 5.9X 9.0X 8.8X 6.1X
19 Capital and liquidity position Commentary Capital and liquidity position 10.0% 10.1% 9.6% Common Equity Tier 1 Tier 1 Total 4Q20 3Q21 4Q21 Current quarter regulatory capital information is preliminary 12.1% 14.5% 11.9% 113% 114% 114% $81.0 $85.8 $86.7 LCR HQLA ($ B) 4Q20 3Q21 4Q21 13.9% 13.9% Capital position – CET1 ratio was 9.6%, down 50 bps from 9/30 ◦ Decline driven by Service Finance acquisition, strong loan growth, and $500 million share repurchase – Dividend of $0.48 per share – Overall, continue to maintain a very strong capital position, particularly in the context of risk and profitability profile Liquidity position – Average LCR for 4Q21 was 114% – Loan-to-deposit ratio of 70% 11.3% 13.2%
Merger Integration Update
21 Shifting from integrating to operating Core bank conversion in February 2022 ▪ Truist Securities conversion ▪ Wealth brokerage platform conversion ▪ Testing protocols for core bank conversion ▪ Wealth trust platform conversion ▪ Migrated teammates to the Truist retail mortgage origination ecosystem ▪ Converted heritage BB&T retail and commercial clients to Truist ecosystem ▪ Integrated industry-leading commercial lending platform ▪ Opened Innovation & Technology Center Launch Truist digital online banking and mobile experience Integration milestones successfully completed Integration milestones remaining Convert heritage SunTrust clients to Truist ecosystem Retail branch consolidation (800+ cumulative closures by 1Q22) Progress achieved to date
22 Committed to achieving net cost saves Digital Innovation Marketing / Branding Talent / Benefits Technology Platforms Third Party Spend Targeting 10% reduction in sourceable spend Non-Branch Facilities Targeting approximately 5MM+ net sq. ft. reductions Retail Banking Targeting 800+ total closures by 1Q22 Technology Driven by integration efforts, applications, hardware, and staff rationalization; savings anticipated post conversion / decommissioning process (2H22) Personnel1 Avg. FTEs decreased by approximately 12% at 4Q21 1 Reflects normal attrition and reductions in force from 1Q19 proforma through 4Q21, excluding FTE increases from acquisitions Achieved through: 1Q21–9.3% 2Q21–10.3% 3Q21–11.2% 4Q21–11.5% Cumulative closures through: 1Q21–374 2Q21–374 3Q21–413 4Q21–414 Cumulative closures through: 1Q21–3.5MM 2Q21–3.8MM 3Q21–4.3MM 4Q21–4.6MM C os t s av es In ve st m en ts Includes normal attrition and reductions in force Includes Lightstream expansion, Truist Digital, and agile teams Includes digital marketing, hyper-personalization, and CRM capabilities and teams Includes pension, revenue producers in fee businesses (e.g. CIB, wealth, and insurance), and positive impacts from Truist job structure framework Includes best of both technology, modernization, and cyber build out
23 Cost saves progress 4Q20 annualized $640MM 40% of net cost saves 4Q21 annualized $1,040MM 65% of net cost saves 4Q22 annualized $1,600MM 100% of net cost saves $3,131 $2,940 Adjusted NIE Variable compensation related to higher fee revenue and improved performance relative to 2019 NQDCP NIE - acquisitions since 2019 Core NIE Adjusted NIE excludes selected items referenced in the attached appendix NQDCP substantially offset in noninterest income Variable compensation related to higher fee revenue and improved performance is relative to one quarter of 2019 annual pro forma levels 4Q21 Core Noninterest Expense ($ MM) On track Net Expense Savings Progress ($148) $6 ($49)
24 Investment thesis Why Truist? Purpose-Driven Culture Exceptional Company Investing in the Future Leading Financial Performance – Inspire and build better lives and communities – Optimize long-term value for all stakeholders through safe, sound, and ethical practices – Attract and retain top talent – Continued strong ESG progress – 7th largest U.S. commercial bank – Comprehensive and diverse business mix with distinct capabilities in insurance, investment banking, digital / point-of- sale lending, and advice / industry expertise ◦ Significant revenue synergy potential – Strong market shares in high growth footprint (South / Mid-Atlantic) with select national businesses – Building a better technology foundation with ‘best of breed’ approach – Obsess over enhanced client experience to drive client acquisition – Enabling convenient commerce – Fit-for-purpose approach (build, buy, partner) ◦ Increased usage of open banking, APIs, and Truist Ventures – Targeting strong growth and profitability (with lower volatility) ◦ Continued confidence in achieving $1.6 billion of net cost savings ◦ ROATCE: Low 20s ◦ ER: Low 50s – Disciplined risk and financial management; focus on diversity – Strong risk adjusted capital position
25 Conclusion Solid performance in 2021... $4,480 $5,460 2020 2021 Diverse Business Model Insurance, Investment Banking, & Wealth ($ MM) 0.36% 0.24% 2020 2021 Strong Risk Management NCO / Loans ...Well Positioned for 2022 – Finalize the merger ◦ February conversion ◦ Eliminate merger-related charges and incremental operating expenses related to the merger by year-end ◦ Achieve cost saves objectives – Shift from integrating to operating (executional excellence & growth) ◦ Good momentum from 4Q21 heading into 2022 (loans, deposits, fees, expense) ◦ Significant benefit from becoming One Truist (systems, digital, brand) in 2022 – Positive operating leverage 22% 33% Capital deployment ratio includes dividends, share repurchases, and acquisitions Adjusted EPS $3.80 $5.53 2020 2021 GAAP $3.08 GAAP $4.47 Capital Deployment Ratio 77% 115% 2020 2021 46% 49%
Appendix
A-1 Consumer Banking & Wealth Income statement ($ MM) 4Q21 Linked Qtr. Change Like Qtr. Change Full Year 2021 Full Year Change Net interest income $1,978 ($53) ($206) $8,237 ($533) Provision for credit losses 59 64 (57) 150 (853) Noninterest income 992 (36) (5) 3,865 (206) Noninterest expense 1,950 21 (5) 7,725 (131) Segment net income 734 (135) (114) 3,235 192 Balance Sheet ($ B) Average loans(1) $133.5 $0.7 ($4.6) $132.6 ($6.8) Average deposits 249.2 5.8 24.7 241.2 25.2 Other Key Metrics Mortgages serviced for others ($ B)(2) $196.0 ($2.1) $7.7 Wealth management AUM ($ B)(2) 210.7 7.0 27.6 Branches 2,517 (1) (264) (1) Excludes loans held for sale (2) Amount reported reflects end of period balance Represents performance for Retail Community Banking, Wealth, Mortgage Banking, Dealer Retail Services, and National Consumer Finance & Payments – Full year segment net income of $3.2 billion, up $0.2 billion YoY – Decline in net interest income driven by lower average loans, reduced purchase accounting accretion income, and lower funding credit for deposits – Loan YoY balance decline primarily driven by residential mortgage due to consistently high prepayment rates and renewal capacity constraints in the first half of the year, but grew from the linked quarter ◦ Growth in indirect auto, LightStream, and Sheffield partially offset by declines in other portfolios – Deposits grew 12% YoY due to ongoing COVID-19 and government stimulus impact, as well as improved organic production – Provision for credit losses improved significantly in 2021 due to an improved economic environment – Fee income down 5% YoY due in large part to a decline in mortgage related income, partially offset by strong performance in wealth and card related income ◦ Mortgage banking income down 44%, primarily due to combination of decline in gain on sale margins and lower volumes, partially offset by higher mortgage servicing income ◦ Card and payment related fees up 14% due to ongoing economic recovery ◦ Wealth management income up 9% due to favorable market performance and positive net asset flows ▪ AUM up 15% at year-end 2021 vs. 2020 – Expense control initiatives drove a 2% reduction in YoY expenses despite an increase in operating losses ◦ Branch count down 10% YoY due to MOE consolidations Metrics Full Year Commentary
A-2 Corporate & Commercial Banking Income Statement ($ MM) 4Q21 Linked Qtr. Change Like Qtr. Change Full Year 2021 Full Year Change Net interest income $1,145 ($32) ($144) $4,767 ($421) Provision for credit losses (183) 81 (243) (881) (2,185) Noninterest income 790 37 2 3,043 572 Noninterest expense 814 (6) (22) 3,251 (196) Segment net income 1,024 (50) 102 4,261 1,939 Balance Sheet ($ B) Average loans(1) $149.9 ($0.4) ($11.9) $153.4 ($13.5) Average deposits 155.1 3.3 12.5 149.8 12.8 – Net income of $4.3 billion increased $1.9 billion, or 84% YoY, driven by improvements in provision expense and strong fee performance – NII of $4.8 billion decreased $0.4 billion as a result of lower purchase accounting accretion, lower deposit spreads, and a decline in loan balances partially offset by higher PPP revenues – Noninterest income of $3.0 billion increased a strong $0.6 billion, or 23% ◦ Investment banking & trading increased 40% reflecting strong market conditions, improving IRM revenue, and ongoing investments to attract and retain top talent within CIB ◦ Increased trading income due to improvement in CVA/DVA valuations ◦ Additional strong fee growth across lending, treasury service related fees as well as revenue growth tied to SBIC investments – Total expenses of $3.3 billion down $0.2 billion given a focus on efficiencies – Average loans declined 8%, reflecting lower revolver utilization, lower dealer floor plan levels, and lower PPP – Average deposits increased 9% reflecting strong client liquidity (1) Excludes loans held for sale Represents performance for Commercial Community Banking, Corporate & Investment Banking, and CRE & Grandbridge Metrics Full Year Commentary
A-3 Insurance Holdings Income statement ($ MM) 4Q21 Linked Qtr. Change Like Qtr. Change Full Year 2021 Full Year Change Net interest income $20 ($5) ($2) $86 ($8) Noninterest income 681 29 119 2,664 423 Total revenue 701 24 117 2,750 415 Noninterest expense 547 10 96 2,079 295 Segment net income 117 12 18 508 101 Performance ($ MM) Y-o-Y organic revenue growth 10.8% (1.1%) 7.0% 11.0% 6.7% Net acquired revenue $62 ($9) $53 $186 $167 Performance based commissions 27 8 7 77 9 Adjusted EBITDA(1) 191 15 31 815 183 Adjusted EBITDA margin(1) 27.3% 1.3% — 29.6 2.5% – Strong operating performance continued in 4Q21 driven by Truist Insurance Holdings top talent, broad range of capabilities, and most diversified platform in the industry – Market conditions remain positive with a growing economy, insurers adding exposures to their policies and a firm P&C pricing environment – Revenue increased 20% versus like quarter and is up 18% full year ◦ Organic revenue growth was 11% in 4Q and 2021 ◦ 4Q21 new business was up 16% vs. like quarter and 20% full year ◦ Client retention remains strong and above last year in most lines of business – Expenses were up 21% vs. like quarter and 17% for 2021 ◦ FY21 EBITDA margin expanded 250 bps driven by strong revenue growth, prudent expense control and growth due to acquisitions (1) EBITDA is a non-GAAP measurement of operating profitability that is calculated by adding back interest, taxes, depreciation and amortization to net income. Truist's management also adds back merger- related and restructuring charges, incremental operating expenses related to the merger, and other selected items. Truist's management uses this measure in its analysis of the Corporation's Insurance Holdings segment. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. See non-GAAP reconciliations included in the attached Appendix. Represents performance for Retail and Wholesale Insurance businesses and Premium Finance Metrics Full Year and 4Q Commentary
A-4 Purchase accounting summary(1) ($ MM) As of/For the Quarter Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 2021 2021 2021 2021 2020 Loans and Leases(2) Beginning balance unamortized fair value mark $ (1,540) $ (1,777) $ (2,067) $ (2,395) $ (2,676) Accretion 217 233 285 316 356 Purchase accounting adjustments and other activity — 4 5 12 (75) Ending balance $ (1,323) $ (1,540) $ (1,777) $ (2,067) $ (2,395) Core deposit and other intangible assets Beginning balance $ 2,930 $ 2,665 $ 2,825 $ 2,984 $ 2,840 Additions - acquisitions 647 418 — 14 320 Amortization (143) (145) (142) (144) (172) Amortization in net occupancy expense (3) (4) (3) (3) (4) Purchase accounting adjustments and other activity (23) (4) (15) (26) — Ending balance $ 3,408 $ 2,930 $ 2,665 $ 2,825 $ 2,984 Deposits(3) Beginning balance unamortized fair value mark $ (9) $ (12) $ (15) $ (19) $ (26) Amortization 2 3 3 4 7 Ending balance $ (7) $ (9) $ (12) $ (15) $ (19) Long-Term Debt(3) Beginning balance unamortized fair value mark $ (157) $ (176) $ (196) $ (216) $ (238) Amortization 18 19 20 20 22 Ending balance $ (139) $ (157) $ (176) $ (196) $ (216) (1) Includes only selected information and does not represent all purchase accounting adjustments. (2) Purchase accounting marks on loans and leases includes credit, interest and liquidity components, and are generally recognized using the level-yield or straight-line method over the remaining life of the individual loans or recognized in full in the event of prepayment. (3) Purchase accounting marks on liabilities represents interest rate marks on time deposits and long-term debt and are recognized using the level-yield method over the term of the liability.
A-5 M&A related financial impacts Purchase accounting accretion Amortization of intangibles Merger-related and restructuring charges Incremental operating expenses related to the merger 1Q21 $340 $144 $141 $175 2Q21 308 142 297 190 3Q21 255 145 172 191 4Q21 237 143 212 215 1Q22 210 140 160 260 2Q22 190 140 70 150 3Q22 180 140 30 80 4Q22 160 140 40 50 1Q23 140 130 No costs for the BBT / STI MOE No longer applicable and will not be in expense base 2Q23 130 120 3Q23 110 120 4Q23 100 120 FY 2021 $1,140 $574 $822 $771 FY 2022 740 560 300 540 FY 2023 480 490 N/A N/A ($ MM) 1 Compared to 2021, reflects lower core deposit intangible amortization, partially offset by higher amortization expense from Service Finance and Constellation acquisitions Amounts for future periods are based on Company projections 1
A-6 PPP details PPP Revenue ($ MM) PPP Yields (%) Average PPP ($ B) EOP PPP ($ B) PPP Contribution to NIM (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 FY 2020 $241 3.0 $8.2 $10.8 0 FY 2021 395 6.1 6.5 2.1 5
A-7 Fee income reclassification – selected line items IB&T Commercial mortgage Other income SRE to IB&T LIHTC to other income 1Q20 $123 $36 ($3) $5 $3 2Q20 279 41 25 6 2 3Q20 254 42 106 9 4 4Q20 354 66 100 46 10 1Q21 346 33 75 6 4 2Q21 402 47 120 84 6 3Q21 316 54 140 15 9 4Q21 377 45 33 42 8 – In 4Q21, the Company reclassified certain structured real estate activity from commercial mortgage income to investment banking & trading income and certain LIHTC activity from commercial mortgage income to other income. Prior periods were reclassified to conform to the current presentation. Reclassified Fee Income Categories ($ MM) Amount Moved ($ MM)
A-8 1Q22–3Q22 preferred stock projected dividends 3ML = 3-month LIBOR. Estimates assume an average LIBOR rate of 0.17% for 1Q22-3Q22. Actual 3ML could vary significantly causing dividend payments to differ from the estimates shown above. Table may not foot due to rounding Truist Preferred Outstandings ($ MM) 1Q22 2Q22 3Q22 Series I $173 $1.7 $1.8 $1.8 Series J $102 1.0 1.0 1.0 Series L $750 — 18.9 6.7 Series M $500 — 12.8 — Series N $1,700 40.8 — 40.8 Series O $575 7.5 7.5 7.5 Series P $1,000 — 24.8 — Series Q $1,000 25.5 — 25.5 Series R $925 11.0 11.0 11.0 Estimated dividends based on current interest rates and amounts outstanding ($ MM) $87.6 $77.8 $94.4
Non-GAAP Reconciliations
A-10 Quarter Ended Year Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Dec. 31 Dec. 31 2021 2021 2021 2021 2020 2021 2020 Net income available to common shareholders - GAAP $ 1,524 $ 1,616 $ 1,559 $ 1,334 $ 1,228 $ 6,033 $ 4,184 Merger-related and restructuring charges 163 132 228 108 237 631 660 Securities (gains) losses — — — — — — (308) Loss (gain) on early extinguishment of debt — — (1) (2) — (3) 180 Incremental operating expenses related to the merger 165 147 146 134 138 592 409 Charitable contribution — — 153 — — 153 38 Professional fee accrual — 23 — — — 23 — Acceleration for cash flow hedge unwind — — — 28 — 28 — Net income available to common shareholders - adjusted $ 1,852 $ 1,918 $ 2,085 $ 1,602 $ 1,603 $ 7,457 $ 5,163 Weighted average shares outstanding - diluted 1,343,029 1,346,854 1,349,492 1,358,932 1,361,763 1,349,378 1,358,289 Diluted EPS - GAAP $ 1.13 $ 1.20 $ 1.16 $ 0.98 $ 0.90 $ 4.47 $ 3.08 Diluted EPS - adjusted(1) 1.38 1.42 1.55 1.18 1.18 5.53 3.80 Non-GAAP reconciliations Diluted EPS ($ MM, except per share data, shares in thousands) (1) The adjusted diluted earnings per share is non-GAAP in that it excludes merger-related and restructuring charges and other selected items, net of tax. Truist's management uses this measure in their analysis of the Corporation's performance. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges.
A-11 Non-GAAP reconciliations Efficiency ratio ($ MM) (1) Revenue is defined as net interest income plus noninterest income. (2) The adjusted efficiency ratio is non-GAAP in that it excludes securities gains (losses), amortization of intangible assets, merger-related and restructuring charges, and other selected items. Truist's management uses this measure in their analysis of the Corporation's performance. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. Quarter Ended Year Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Dec. Dec. 2021 2021 2021 2021 2020 2021 2020 Efficiency ratio numerator - noninterest expense - GAAP $ 3,700 $ 3,795 $ 4,011 $ 3,610 $ 3,833 $ 15,116 $ 14,897 Merger-related and restructuring charges, net (212) (172) (297) (141) (308) (822) (860) Gain (loss) on early extinguishment of debt 1 — — 3 — 4 (235) Incremental operating expense related to the merger (215) (191) (190) (175) (179) (771) (534) Amortization of intangibles (143) (145) (142) (144) (172) (574) (685) Charitable contribution — — (200) — — (200) (50) Professional fee accrual — (30) — — — (30) — Acceleration for cash flow hedge unwind — — — (36) — (36) — Efficiency ratio numerator - adjusted $ 3,131 $ 3,257 $ 3,182 $ 3,117 $ 3,174 $ 12,687 $ 12,533 Efficiency ratio denominator - revenue(1) - GAAP $ 5,566 $ 5,598 $ 5,650 $ 5,482 $ 5,651 $ 22,296 $ 22,705 Taxable equivalent adjustment 24 28 28 28 28 108 125 Securities (gains) losses — — — — — — (402) Gains on divestiture of certain businesses — — — (37) — (37) — Efficiency ratio denominator - adjusted $ 5,590 $ 5,626 $ 5,678 $ 5,473 $ 5,679 $ 22,367 $ 22,428 Efficiency ratio - GAAP 66.5 % 67.8 % 71.0 % 65.8 % 67.8 % 67.8 % 65.6 % Efficiency ratio - adjusted(2) 56.0 57.9 56.1 56.9 55.9 56.7 55.9
A-12 Non-GAAP reconciliations Pre-provision net revenue ($ MM) (1) Revenue is defined as net interest income plus noninterest income. (2) Pre-provision net revenue is a non-GAAP measure that adjusts net income determined in accordance with GAAP to exclude the impact of the provision for credit losses and provision for income taxes. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods. Quarter Ended Year Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Dec. 31 Dec. 31 2021 2021 2021 2021 2020 2021 2020 Net income $ 1,602 $ 1,704 $ 1,658 $ 1,473 $ 1,330 $ 6,437 $ 4,492 Provision for credit losses (103) (324) (434) 48 177 (813) 2,335 Provision for income taxes 367 423 415 351 311 1,556 981 Taxable-equivalent adjustment 24 28 28 28 28 108 125 Pre-provision net revenue(1)(2) $ 1,890 $ 1,831 $ 1,667 $ 1,900 $ 1,846 $ 7,288 $ 7,933 PPNR $ 1,890 $ 1,831 $ 1,667 $ 1,900 $ 1,846 $ 7,288 $ 7,933 Merger-related and restructuring charges, net 212 172 297 141 308 822 860 Gain (loss) on early extinguishment of debt (1) — — (3) — (4) 235 Incremental operating expense related to the merger 215 191 190 175 179 771 534 Amortization of intangibles 143 145 142 144 172 574 685 Charitable contribution — — 200 — — 200 50 Professional fee accrual — 30 — — — 30 — Acceleration for cash flow hedge unwind — — — 36 — 36 — Securities (gains) losses — — — — — — (402) Gains on divestiture of certain businesses — — — (37) — (37) — Pre-provision net revenue - adjusted(1)(2) $ 2,459 $ 2,369 $ 2,496 $ 2,356 $ 2,505 $ 9,680 $ 9,895
A-13 Non-GAAP reconciliations Return on average assets ($ MM) (1) The adjusted performance ratios, including adjusted return on average assets, adjusted return on average common shareholders’ equity, and adjusted return on average tangible common shareholders’ equity, are non-GAAP in that they exclude merger-related and restructuring charges, selected items, and, in the case of return on average tangible common shareholders' equity, amortization of intangible assets. Truist's management uses these measures in their analysis of the Corporation's performance. Truist's management believes these measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrate the effects of significant gains and charges. These measures are not necessarily comparable to similar measures that may be presented by other companies. As of / Quarter Ended Year Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Dec. 31 Dec. 31 2021 2021 2021 2021 2020 2021 2020 Net income - GAAP $ 1,602 $ 1,704 $ 1,658 $ 1,473 $ 1,330 $ 6,437 $ 4,492 Merger-related and restructuring charges 163 132 228 108 237 631 660 Securities (gains) losses — — — — — — (308) Loss (gain) on early extinguishment of debt — — (1) (2) — (3) 180 Incremental operating expenses related to the merger 165 147 146 134 138 592 409 Charitable contribution — — 153 — — 153 38 Professional fee accrual — 23 — — — 23 — Acceleration for cash flow hedge unwind — — — 28 — 28 — Numerator - adjusted(1) $ 1,930 $ 2,006 $ 2,184 $ 1,741 $ 1,705 $ 7,861 $ 5,471 Average assets $ 534,911 $ 526,685 $ 518,774 $ 508,833 $ 503,181 $ 522,385 $ 499,085 Return on average assets - GAAP 1.19 % 1.28 % 1.28 % 1.17 % 1.05 % 1.23 % 0.90 % Return on average assets - adjusted 1.43 1.51 1.69 1.39 1.35 1.50 1.10
A-14 Non-GAAP reconciliations Calculations of tangible common equity and related measures ($ MM, except per share data, shares in thousands) (1) Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist’s management uses these measures to assess the quality of capital and returns relative to balance sheet risk.These measures are not necessarily comparable to similar measures that may be presented by other companies. As of / Quarter Ended Year Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Dec. 31 Dec. 31 2021 2021 2021 2021 2020 2021 2020 Common shareholders' equity $ 62,598 $ 62,227 $ 61,663 $ 60,752 $ 62,759 $ 62,598 $ 62,759 Less: Intangible assets, net of deferred taxes 28,772 27,066 26,296 26,413 26,629 28,772 26,629 Tangible common shareholders' equity(1) $ 33,826 $ 35,161 $ 35,367 $ 34,339 $ 36,130 $ 35,215 $ 36,130 Outstanding shares at end of period 1,327,818 1,334,892 1,334,770 1,344,845 1,348,961 1,327,818 1,348,961 Common shareholders' equity per common share $ 47.14 $ 46.62 $ 46.20 $ 45.17 $ 46.52 $ 47.14 $ 46.52 Tangible common shareholders' equity per common share(1) 25.47 26.34 26.50 25.53 26.78 25.47 26.78 Net income available to common shareholders $ 1,524 $ 1,616 $ 1,559 $ 1,334 $ 1,228 $ 6,033 $ 4,184 Plus amortization of intangibles, net of tax 110 113 107 111 131 441 524 Tangible net income available to common shareholders(1) $ 1,634 $ 1,729 $ 1,666 $ 1,445 $ 1,359 $ 6,474 $ 4,708 Average common shareholders' equity $ 61,807 $ 62,680 $ 61,709 $ 62,252 $ 61,991 $ 62,112 $ 61,379 Less: Average intangible assets, net of deferred taxes 27,523 27,149 26,366 26,535 25,930 26,897 26,122 Average tangible common shareholders' equity(1) $ 34,284 $ 35,531 $ 35,343 $ 35,717 $ 36,061 $ 35,215 $ 35,257 Return on average common shareholders' equity 9.8 % 10.2 % 10.1 % 8.7 % 7.9 % 9.7 % 6.8 % Return on average tangible common shareholders' equity(1) 18.9 19.3 18.9 16.4 15.0 18.4 13.4
A-15 Non-GAAP reconciliations Return on average common equity and average tangible common equity ($ MM) As of / Quarter Ended Year Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Dec. 31 Dec. 31 2021 2021 2021 2021 2020 2021 2020 Net income available to common shareholders - GAAP $ 1,524 $ 1,616 $ 1,559 $ 1,334 $ 1,228 $ 6,033 $ 4,184 Merger-related and restructuring charges 163 132 228 108 237 631 660 Securities (gains) losses — — — — — — (308) Loss (gain) on early extinguishment of debt — — (1) (2) — (3) 180 Incremental operating expenses related to the merger 165 147 146 134 138 592 409 Charitable contribution — — 153 — — 153 38 Professional fee accrual — 23 — — — 23 — Acceleration for cash flow hedge unwind — — — 28 — 28 — Net income available to common shareholders - adjusted 1,852 1,918 2,085 1,602 1,603 7,457 5,163 Amortization 110 113 107 111 131 441 524 Net income available to common shareholders - tangible adjusted $ 1,962 $ 2,031 $ 2,192 $ 1,713 $ 1,734 $ 7,898 $ 5,687 Average common shareholders' equity $ 61,807 $ 62,680 $ 61,709 $ 62,252 $ 61,991 $ 62,112 $ 61,379 Plus: Estimated impact of adjustments on denominator 164 151 263 134 187 712 490 Average common shareholders' equity - adjusted 61,971 62,831 61,972 62,386 62,178 62,824 61,869 Less: Average intangible assets 27,523 27,149 26,366 26,535 25,930 26,897 26,122 Average tangible common shareholders' equity - adjusted $ 34,448 $ 35,682 $ 35,606 $ 35,851 $ 36,248 $ 35,927 $ 35,747 Return on average common shareholders equity - GAAP 9.8 % 10.2 % 10.1 % 8.7 % 7.9 % 9.7 % 6.8 % Return on average common shareholders equity - adjusted 11.9 % 12.1 % 13.5 % 10.4 % 10.3 % 11.9 % 8.3 % Return on average tangible common shareholders equity - adjusted 22.6 22.6 24.7 19.4 19.0 22.0 15.9 (1) The adjusted performance ratios, including adjusted return on average assets, adjusted return on average common shareholders’ equity, and adjusted return on average tangible common shareholders’ equity, are non-GAAP in that they exclude merger-related and restructuring charges, selected items, and, in the case of return on average tangible common shareholders' equity, amortization of intangible assets. Truist's management uses these measures in their analysis of the Corporation's performance. Truist's management believes these measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrate the effects of significant gains and charges. These measures are not necessarily comparable to similar measures that may be presented by other companies.
A-16 Quarter Ended Year Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Dec. 31 Dec. 31 2021 2021 2021 2021 2020 2021 2020 Net interest income - GAAP $ 3,243 $ 3,233 $ 3,245 $ 3,285 $ 3,366 $ 13,006 $ 13,826 Taxable-equivalent adjustment 24 28 28 28 28 108 125 Net interest income - taxable-equivalent 3,267 3,261 3,273 3,313 3,394 13,114 13,951 Accretion of mark on acquired loans (217) (233) (285) (316) (356) (1,051) (1,617) Accretion of mark on acquired liabilities (20) (22) (23) (24) (29) (89) (153) Accretion of mark on securities acquired from FDIC — — — — — — (6) Net interest income - core(1) $ 3,030 $ 3,006 $ 2,965 $ 2,973 $ 3,009 $ 11,974 $ 12,175 Average earning assets - GAAP $ 470,885 $ 461,750 $ 455,265 $ 443,946 $ 438,666 $ 458,045 $ 433,623 Average balance - mark on acquired loans 1,449 1,658 1,947 2,263 2,550 1,827 3,139 Average balance - mark on securities acquired from FDIC — — — — — — 158 Average earning assets - core(1) $ 472,334 $ 463,408 $ 457,212 $ 446,209 $ 441,216 $ 459,872 $ 436,920 Annualized net interest margin: Reported - taxable-equivalent 2.76 % 2.81 % 2.88 % 3.01 % 3.08 % 2.86 % 3.22 % Core(1) 2.55 2.58 2.60 2.69 2.72 2.60 2.79 Non-GAAP reconciliations Core NIM ($ MM) (1) Core net interest margin is a non-GAAP measure that adjusts net interest margin to exclude the impact of purchase accounting. The purchase accounting marks and related amortization for a) securities acquired from the FDIC in the Colonial Bank acquisition and b) loans, deposits and long-term debt from SunTrust and other acquisitions are excluded to approximate the yields paid by clients. Truist's management believes the adjustments to the calculation of net interest margin for certain assets and liabilities acquired provide investors with useful information related to the performance of Truist's earning assets. These measures are not necessarily comparable to similar measures that may be presented by other companies.
A-17 Non-GAAP reconciliations Insurance Holdings adjusted EBITDA ($ MM) (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 other selected items. Truist's management uses this measure in its analysis of the Corporation's Insurance Holdings segment. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. Quarter Ended Year Ended Dec. 31 Sept. 30 June 30 March 31 Dec. 31 Dec. 31 Dec. 31 2021 2021 2021 2021 2020 2021 2020 Segment net interest income $ 20 $ 25 $ 21 $ 20 $ 22 $ 86 $ 94 Noninterest income 681 652 698 633 562 2,664 2,241 Total revenue $ 701 $ 677 $ 719 $ 653 $ 584 $ 2,750 $ 2,335 Segment net income (loss) - GAAP $ 117 $ 105 $ 156 $ 130 $ 99 $ 508 $ 407 Provision (benefit) for income taxes 38 34 49 42 32 163 135 Depreciation & amortization 24 32 26 28 21 110 76 EBITDA 179 171 231 200 152 781 618 Merger-related and restructuring charges, net 8 2 13 4 8 27 14 Incremental operating expenses related to the merger 4 3 — — — 7 — Adjusted EBITDA(1) $ 191 $ 176 $ 244 $ 204 $ 160 $ 815 $ 632 Adjusted EBITDA(1) margin 27.3 % 26.0 % 33.9 % 31.2 % 27.3 % 29.6 % 27.1 %
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