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
April 19, 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 April 19, 2022, Truist Financial Corporation (“Truist”) issued a press release reporting first quarter 2022 results and posted on its website its first quarter 2022 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 April 19, 2022. |
| 99.2 | Quarterly Performance Summary issued April 19, 2022. |
| 99.3 | Earnings Release Presentation issued April 19, 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: April 19, 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 first quarter 2022 results
First quarter 2022 GAAP earnings of $1.3 billion, or $0.99 per diluted share
First quarter 2022 Adjusted earnings of $1.6 billion, or $1.23 per diluted share
Results reflect solid loan growth, strong expense control, and continued favorable credit results
Fee revenues were impacted by market volatility and geopolitical uncertainty
Final core bank conversion complete
CHARLOTTE, N.C., (April 19, 2022) — Truist Financial Corporation (NYSE: TFC) today reported earnings for the first quarter of 2022.
Net income available to common shareholders of $1.3 billion was relatively stable compared to the first quarter last year. Earnings per diluted common share were $0.99, an increase of 1.0% compared with the same period last year. Results for the first quarter produced an annualized return on average assets (ROA) of 1.07%, an annualized return on average common shareholders’ equity (ROCE) of 9.0%, and an annualized return on tangible common shareholders’ equity (ROTCE) of 18.6%.
Adjusted net income available to common shareholders was $1.6 billion, or $1.23 per diluted share, excluding merger-related and restructuring charges of $216 million ($166 million after-tax), incremental operating expenses related to the merger of $202 million ($155 million after-tax), a gain on the redemption of noncontrolling equity interest of $74 million ($57 million after-tax) related to the acquisition of certain merchant services relationships, and losses on the sales of securities of $69 million ($53 million after-tax). Adjusted results produced an annualized ROA of 1.31%, an annualized ROCE of 11.1%, and an annualized ROTCE of 22.6%. Adjusted earnings per diluted share were up 4.2% compared to the prior year.
“The first quarter was a historic one for Truist as we completed our largest conversion event, transitioning nearly seven million clients to the Truist ecosystem and rebranding more than 6,000 branches and ATMs to Truist,” said Chairman and CEO Bill Rogers. “We now operate officially as one brand and one bank to our clients. This accomplishment was possible because of the expertise, purposeful commitment, and hard work of thousands of teammates and for them, I am grateful. We remain guided by our purpose as we continue supporting our clients through the transition and look forward to shifting our focus to executional excellence and purposeful growth throughout this year.
“We had a solid first quarter in terms of earnings, though underlying results were mixed in light of market volatility and geopolitical uncertainty. Our strengths this quarter included an improving core margin, with more upside from here, strong expense discipline and continued favorable credit results. Revenues were lower as a result of a challenging environment for investment banking and mortgage, but we remain confident in our outlook given expectations for higher interest rates, our diverse business model, and continued expense discipline. At the same time, we acknowledge the increasing uncertainty presented by a range of geopolitical and economic risks.
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“We continued living our purpose for our stakeholders in many ways this quarter, including through the unveiling of Truist One Banking, a first-of-its-kind approach to the checking account experience, developed from direct client feedback. This new approach offers many solutions our clients asked for, including no overdraft fees, that will help more families gain access to mainstream banking services. We announced a goal to achieve net-zero greenhouse emissions by 2050, supporting our clients’ transition to a low-carbon economy; and we continue to be well ahead of schedule with regard to our $60 billion Community Benefits Plan commitment. This is only the beginning for Truist as we work to create distinctive client experiences that inspire and build better lives and communities.”
First Quarter 2022 Performance Highlights
•Earnings per diluted common share for the first quarter of 2022 were $0.99
◦Adjusted diluted earnings per share were $1.23 up $0.05 per share, or 4.2%, compared to first quarter 2021 driven by a lower provision for credit losses
◦ROA was 1.07%; adjusted ROA was 1.31%
◦ROCE was 9.0%; adjusted ROCE was 11.1%
◦ROTCE was 18.6%; adjusted ROTCE was 22.6%
•Taxable-equivalent revenue for the first quarter of 2022 was $5.4 billion, down 4.3% compared to fourth quarter 2021 and down 2.9% compared to first quarter 2021
◦Noninterest income was down 7.8% compared to fourth quarter 2021 and down 2.5% compared to first quarter 2021
▪Investment banking revenues were lower due to volatile market conditions
▪Residential mortgage income declined due to lower margins and refinance volumes resulting from the higher rate environment
▪Strong insurance income due to continued organic growth and acquisitions
◦Taxable-equivalent net interest income was down 1.8% compared to fourth quarter 2021 and down 3.1% compared to first quarter 2021
▪Decline compared to fourth quarter 2021 was primarily due to two fewer days, lower purchase accounting accretion and lower PPP fees
◦Net interest margin was 2.76%, flat from fourth quarter 2021
▪Core net interest margin was 2.57%, up two basis points from fourth quarter 2021, driven by lower premium amortization on the securities portfolio
◦GAAP operating leverage was negative 460 basis points year-over-year
◦Adjusted operating leverage was negative 240 basis points year-over-year
•Noninterest expense for the first quarter of 2022 was $3.7 billion, down 0.7% compared to fourth quarter 2021 and up 1.8% compared to first quarter 2021
◦Adjusted noninterest expense was $3.1 billion, down 0.4% compared to fourth quarter 2021 as lower incentives were partially offset by seasonally higher payroll taxes
◦Adjusted noninterest expenses was relatively stable compared to first quarter 2021 as lower incentives, lower salaries from fewer FTEs and lower net occupancy costs were partially offset by higher software, marketing and other expenses
◦GAAP efficiency ratio was 69.0%, compared to 66.5% for fourth quarter 2021
◦Adjusted efficiency ratio was 58.3%, compared to 56.0% for fourth quarter 2021
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•Asset quality remains excellent, reflecting our prudent risk culture, diverse portfolio, and the continued favorable credit environment
◦Nonperforming loans held for investment ratio was 0.36%, down two basis points compared to the fourth quarter 2021
◦Net charge-offs were 0.25% of average loans and leases, stable compared to fourth quarter 2021
◦The ALLL ratio was 1.44% compared to 1.53% for fourth quarter 2021
▪Provision for credit losses was a benefit of $95 million for first quarter 2022, primarily reflecting the continued favorable credit environment
▪The ALLL coverage ratio was 5.78X annualized net charge-offs, versus 6.14X for fourth quarter 2021
•Capital and liquidity levels remained strong; deployed capital through organic loan growth, dividend and acquisitions
◦Common equity tier 1 to risk-weighted assets was 9.4%
◦Completed acquisition of Kensington Vanguard National Land Services to expand title insurance operations and acquired certain merchant services relationships
◦Consolidated average LCR ratio was 111%
| EARNINGS HIGHLIGHTS | Change 1Q22 vs. | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in millions, except per share data) | 1Q22 | 4Q21 | 1Q21 | 4Q21 | 1Q21 | ||||||||||
| Net income available to common shareholders | $ | 1,327 | $ | 1,524 | $ | 1,334 | $ | (197) | $ | (7) | |||||
| Diluted earnings per common share | 0.99 | 1.13 | 0.98 | (0.14) | 0.01 | ||||||||||
| Net interest income - taxable equivalent | $ | 3,209 | $ | 3,267 | $ | 3,313 | $ | (58) | $ | (104) | |||||
| Noninterest income | 2,142 | 2,323 | 2,197 | (181) | (55) | ||||||||||
| Total taxable-equivalent revenue | $ | 5,351 | $ | 5,590 | $ | 5,510 | $ | (239) | $ | (159) | |||||
| Less taxable-equivalent adjustment | 26 | 24 | 28 | ||||||||||||
| Total revenue | $ | 5,325 | $ | 5,566 | $ | 5,482 | |||||||||
| Return on average assets | 1.07 | % | 1.19 | % | 1.17 | % | (0.12) | % | (0.10) | % | |||||
| Return on average risk-weighted assets (current quarter is preliminary) | 1.46 | 1.64 | 1.58 | (0.18) | (0.12) | ||||||||||
| Return on average common shareholders’ equity | 9.0 | 9.8 | 8.7 | (0.8) | 0.3 | ||||||||||
| Return on average tangible common shareholders’ equity (1) | 18.6 | 18.9 | 16.4 | (0.3) | 2.2 | ||||||||||
| Net interest margin - taxable equivalent | 2.76 | 2.76 | 3.01 | — | (0.25) |
(1)Excludes certain items as detailed in the non-GAAP reconciliations in the Quarterly Performance Summary.
First Quarter 2022 compared to Fourth Quarter 2021
Total taxable-equivalent revenue was $5.4 billion for the first quarter of 2022, a decrease of $239 million, or 4.3%, compared to the prior quarter.
Net interest income for the first quarter of 2022 was down $58 million, or 1.8%, compared to the prior quarter due primarily to fewer days, lower purchase accounting accretion and lower fees from PPP loans, partially offset by lower premium amortization related to the securities portfolio. Average earning assets decreased $945 million, or 0.2%, compared to the prior quarter, as growth in average total loans of $1.4 billion, or 0.5%, was more than offset by decreases of $935 million, or 14%, in average trading assets, $718 million, or 0.5%, in average securities, and $702 million, or 3.6%, in average other earning assets. Average deposits increased $4.3 billion, or 1.0%, and average long-term debt decreased $2.3 billion, or 6.1% due to redemptions and maturities.
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The net interest margin was 2.76% for the first quarter, flat compared to the prior quarter. The yield on the total loan portfolio for the first quarter was 3.69%, down ten basis points compared to the prior quarter primarily due to lower purchase accounting accretion and lower PPP fees. The yield on the average securities portfolio for the first quarter was 1.68%, up 11 basis points compared to the prior quarter due to lower premium amortization. Core net interest margin was 2.57%, for the first quarter, up two basis points compared to the prior quarter driven by lower premium amortization on securities, partially offset by lower fees on PPP loans.
The average cost of total deposits was 0.03%, flat compared to the prior quarter. The average cost of long-term debt was 1.50%, up 15 basis points compared to the prior quarter resulting from hedging activity.
The provision for credit losses was a benefit of $95 million and net charge-offs were $178 million for the first quarter, compared to a benefit of $103 million and net charge-offs of $182 million, respectively, for the prior quarter. The net charge-off ratio for the current quarter of 0.25% was stable compared to fourth quarter 2021.
Noninterest income was $2.1 billion, a decrease of $181 million, or 7.8%, compared to the prior quarter. The first quarter of 2022 includes securities losses of $69 million and the gain on the redemption of a noncontrolling equity interest (other income) of $74 million. Investment banking and trading income decreased $116 million, or 31%, due to lower merger and acquisition fees, loan syndication fees, high-yield bonds and equity originations. Residential mortgage income decreased $70 million, or 44%, primarily due to lower production income (due to lower margins and refinance volumes). Revenues from residential mortgage servicing activities were down slightly as lower servicing fees and higher hedging costs were partially offset by lower decay related to mortgage servicing assets. Insurance income increased $61 million, or 9.2%, primarily due to seasonally higher employee benefit plan commissions. Service charges on deposits and card and payment related fees were down $33 million primarily due to seasonality. Excluding the gain on the redemption of noncontrolling equity interest and a $37 million decrease for assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense, other income increased $31 million as the prior quarter included a valuation decrease for derivatives related to Visa shares.
Noninterest expense was $3.7 billion for the first quarter, down $26 million, or 0.7%, compared to the prior quarter. Merger-related and restructuring charges were relatively stable as higher costs incurred for client day one conversions were largely offset by lower costs in connection with system conversions, data center migrations, and the voluntary separation and retirement program. Incremental operating expenses related to the merger decreased $13 million compared to fourth quarter 2021 primarily reflected in personnel expense, partially offset by higher net occupancy expense in connection with updating the branch network to incorporate the Truist brand. Excluding the aforementioned items and the amortization of intangibles, adjusted noninterest expense decreased $12 million, or 0.4%, compared to the prior quarter. Personnel expense decreased $45 million ($10 million on an adjusted basis), or 2.1%, compared to fourth quarter 2021 due to lower incentives resulting from declines in noninterest income and lower other employee benefits due to the decrease in noninterest income for post-retirement benefits, partially offset by seasonally higher payroll taxes. The decrease in personnel expense was partially offset by increased operational losses (other expense) and increased marketing and customer development costs.
The provision for income taxes was $330 million for the first quarter of 2022, compared to $367 million for the prior quarter. The effective tax rate for the first quarter of 2022 was 18.9%, compared to 18.6% for the prior quarter.
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First Quarter 2022 compared to First Quarter 2021
Total taxable-equivalent revenues were $5.4 billion for the first quarter of 2022, a decrease of $159 million, or 2.9%, compared to the earlier quarter.
Net interest income for the first quarter of 2022 was down $104 million, or 3.1%, compared to the earlier quarter due to lower purchase accounting accretion, 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 $26.0 billion, or 5.9%, compared to the earlier quarter. The increase in average earning assets reflects a $30.4 billion, or 25%, increase in average securities, a $1.5 billion, or 8.7%, increase in average other earning assets, and a $1.1 billion, or 23%, increase in average interest earning trading assets, while average total loans and leases decreased $7.1 billion, or 2.4%. The growth in average earning assets is a result of the deployment of strong deposit growth resulting from fiscal and monetary stimulus. Average deposits increased $32.1 billion, or 8.4%, compared to the earlier quarter, while average long-term debt decreased $2.5 billion, or 6.6%.
Net interest margin was 2.76%, down 25 basis points compared to the earlier quarter. The yield on the total loan portfolio for the first quarter of 2022 was 3.69%, down 40 basis points compared to the earlier quarter, reflecting the impact of lower purchase accounting accretion, lower PPP fees, and the ongoing impact of the lower rate environment. The yield on the average securities portfolio was 1.68%, up 23 basis points compared to the earlier quarter primarily due to higher yields on new purchases and lower premium amortization. Core net interest margin was 2.57% for the first quarter, down 12 basis points compared to the earlier quarter driven by lower PPP fees, higher levels of liquidity, and the ongoing impact of the lower rate environment.
The average cost of total deposits was 0.03%, down two basis points compared to the earlier quarter. The average cost on short-term borrowings was 0.60%, down 22 basis points compared to the earlier quarter. The average cost on long-term debt was 1.50%, down seven basis points compared to the earlier quarter. The lower rates on interest-bearing liabilities reflect the impact of repricing of liabilities at lower rates.
The provision for credit losses was a benefit of $95 million, compared to a cost of $48 million for the earlier quarter. The current quarter includes a reserve release due to the continued favorable credit environment. Net charge-offs for the first quarter of 2022 totaled $178 million compared to $238 million in the earlier quarter. The net charge-off ratio for the current quarter of 0.25% was down eight basis points compared to the earlier quarter.
Noninterest income for the first quarter of 2022 decreased $55 million, or 2.5%, compared to the earlier quarter. The first quarter of 2022 includes securities losses of $69 million and the gain on the redemption of noncontrolling equity interest (other income) of $74 million. The earlier quarter included a gain of $37 million from the divestiture of certain businesses (other income). Excluding the aforementioned items, noninterest income was down $23 million, or 1.1%. Insurance income increased $101 million, or 16%, due to continued organic growth and acquisitions. Investment banking and trading income decreased $85 million, or 25%, due to lower high yield bond and equity originations fees, lower core trading income, and lower CVA gains, partially offset by higher structured real estate fees. Residential mortgage income decreased $11 million, or 11%, as lower production income (due to lower margins and refinance volumes) was largely offset by higher servicing income (due to lower prepayments). Excluding the gain on the redemption of noncontrolling equity interest, the gain in the earlier quarter from the divestiture of certain businesses and a $67 million decrease for assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense, other income increased $56 million, due to higher investment income from the Company's SBIC and other investments.
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Noninterest expense for the first quarter of 2022 was up $64 million, or 1.8%, compared to the earlier quarter. Merger-related and restructuring charges increased $75 million due to costs for client day one conversions. Incremental operating expenses related to the merger increased $27 million, primarily reflected in net occupancy expense in connection with updating the branch network to incorporate the Truist brand. The prior quarter also includes $36 million of expense associated with an acceleration of loss recognition related to certain terminated cash flow hedges and a small gain on the extinguishment of debt. Excluding the aforementioned items and the amortization of intangibles, adjusted noninterest expense was relatively stable compared to the earlier quarter. Personnel expense decreased $91 million, or 4.2%, due to lower other employee benefits as a result of the decrease in noninterest income for post-retirement benefits, lower incentives (due to declines in noninterest income), and lower salaries driven by fewer FTEs. Additionally, other expense increased $29 million due to increased operational losses, software expense increased $22 million, and marketing and customer development expense increased $18 million due to increased branding efforts.
The provision for income taxes was $330 million for the first quarter of 2022, compared to $351 million for the earlier quarter. The effective tax rate for the first quarter of 2022 was 18.9%, compared to 19.2% for the earlier quarter, primarily due to discrete tax expenses resulting from the divestiture of certain businesses in the prior year.
| LOANS AND LEASES | ||||||||
|---|---|---|---|---|---|---|---|---|
| (dollars in millions)<br>Average balances | 1Q22 | 4Q21 | Change | % Change | ||||
| Commercial: | ||||||||
| Commercial and industrial | $ | 138,872 | $ | 134,804 | $ | 4,068 | 3.0 | % |
| CRE | 23,555 | 24,396 | (841) | (3.4) | ||||
| Commercial construction | 5,046 | 5,341 | (295) | (5.5) | ||||
| Total commercial | 167,473 | 164,541 | 2,932 | 1.8 | ||||
| Consumer: | ||||||||
| Residential mortgage | 47,976 | 47,185 | 791 | 1.7 | ||||
| Residential home equity and direct | 24,883 | 25,146 | (263) | (1.0) | ||||
| Indirect auto | 26,088 | 26,841 | (753) | (2.8) | ||||
| Indirect other | 10,860 | 10,978 | (118) | (1.1) | ||||
| Student | 6,648 | 6,884 | (236) | (3.4) | ||||
| Total consumer | 116,455 | 117,034 | (579) | (0.5) | ||||
| Credit card | 4,682 | 4,769 | (87) | (1.8) | ||||
| Total loans and leases held for investment | $ | 288,610 | $ | 286,344 | $ | 2,266 | 0.8 |
Average loans and leases held for investment for the first quarter of 2022 were $288.6 billion, up $2.3 billion, or 0.8%, compared to the fourth quarter of 2021. Excluding a $1.1 billion decrease in average PPP loans, average loans held for investment were up $3.3 billion, or 1.2%.
Average commercial loans increased $2.9 billion, or 1.8%, as a result of $6.5 billion, or 5.1%, growth within the commercial and industrial portfolio, excluding PPP and mortgage warehouse lending. This growth was partially offset by a $1.4 billion decrease in mortgage warehouse lending (commercial and industrial), a $1.1 billion decrease in average PPP loans (commercial and industrial), a $841 million decrease in average CRE loans, and a $295 million decrease in average commercial construction loans.
Average consumer loans decreased $579 million, or 0.5% due to a $753 million decrease in indirect auto due to market dynamics and the competitive environment, a $263 million decrease in residential home equity and direct, and a $236 million decrease in student loans. The decreases were partially offset by a $791 million increase in residential mortgages due to the continued strategy to put certain correspondent channel production onto the balance sheet and lower prepayments.
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| DEPOSITS | ||||||||
|---|---|---|---|---|---|---|---|---|
| (dollars in millions)<br>Average balances | 1Q22 | 4Q21 | Change | % Change | ||||
| Noninterest-bearing deposits | $ | 145,933 | $ | 146,492 | $ | (559) | (0.4) | % |
| Interest checking | 112,159 | 110,506 | 1,653 | 1.5 | ||||
| Money market and savings | 141,500 | 137,676 | 3,824 | 2.8 | ||||
| Time deposits | 15,646 | 16,292 | (646) | (4.0) | ||||
| Total deposits | $ | 415,238 | $ | 410,966 | $ | 4,272 | 1.0 |
Average deposits for the first quarter of 2022 were $415.2 billion, an increase of $4.3 billion, or 1.0%, compared to the prior quarter. Average noninterest bearing deposits declined 0.4% compared to the prior quarter and represented 35.1% of total deposits for the first quarter of 2022, compared to 35.6% for the prior quarter. Average interest checking and money market and savings grew 1.5% and 2.8%, respectively, compared to the prior quarter. Average time deposits decreased 4.0% primarily due to the maturity of higher-cost accounts.
| CAPITAL RATIOS | 1Q22 | 4Q21 | 3Q21 | 2Q21 | 1Q21 | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Risk-based: | (preliminary) | |||||||||
| Common equity Tier 1 | 9.4 | % | 9.6 | % | 10.1 | % | 10.2 | % | 10.1 | % |
| Tier 1 | 11.0 | 11.3 | 11.9 | 12.0 | 12.0 | |||||
| Total | 13.0 | 13.2 | 13.9 | 14.2 | 14.3 | |||||
| Leverage | 8.6 | 8.7 | 9.0 | 9.1 | 9.4 | |||||
| Supplementary leverage | 7.3 | 7.4 | 7.8 | 7.9 | 8.3 |
Capital ratios remained strong compared to the regulatory requirements for well capitalized banks. Truist declared common dividends of $0.48 per share during the first quarter of 2022. The dividend payout ratio for the first quarter of 2022 was 48%.
Truist CET1 ratio was 9.4% as of March 31, 2022. The 20 basis point decline compared to the fourth quarter 2021 CET1 ratio reflects capital deployed through the acquisition of Kensington Vanguard National Land Services, the acquisition of certain merchant services relationships, an increase in risk-weighted assets, and the impact from the phase in of the CECL transition relief.
Truist’s average LCR was 111% for the three months ended March 31, 2022, 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.
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| ASSET QUALITY | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in millions) | 1Q22 | 4Q21 | 3Q21 | 2Q21 | 1Q21 | ||||||||||
| Total nonperforming assets | $ | 1,135 | $ | 1,163 | $ | 1,204 | $ | 1,192 | $ | 1,299 | |||||
| Total performing TDRs | 1,515 | 1,390 | 1,475 | 1,501 | 1,539 | ||||||||||
| Total loans 90 days past due and still accruing | 1,914 | 1,930 | 1,872 | 2,068 | 2,072 | ||||||||||
| Total loans 30-89 days past due | 2,101 | 2,044 | 1,823 | 1,824 | 1,788 | ||||||||||
| Nonperforming loans and leases as a percentage of loans and leases held for investment | 0.36 | % | 0.38 | % | 0.38 | % | 0.37 | % | 0.40 | % | |||||
| Nonperforming loans and leases as a percentage of loans and leases, including loans held for sale | 0.37 | 0.38 | 0.40 | 0.39 | 0.42 | ||||||||||
| Nonperforming assets as a percentage of total assets | 0.21 | 0.21 | 0.23 | 0.23 | 0.25 | ||||||||||
| Loans 30-89 days past due and still accruing as a percentage of loans and leases | 0.72 | 0.71 | 0.64 | 0.64 | 0.61 | ||||||||||
| Loans 90 days or more past due and still accruing as a percentage of loans and leases | 0.66 | 0.67 | 0.66 | 0.72 | 0.71 | ||||||||||
| Loans 90 days or more past due and still accruing as a percentage of loans and leases, excluding PPP and other government guaranteed | 0.04 | 0.03 | 0.03 | 0.04 | 0.04 | ||||||||||
| Allowance for loan and lease losses as a percentage of loans and leases held for investment | 1.44 | 1.53 | 1.65 | 1.79 | 1.94 | ||||||||||
| Net charge-offs as a percentage of average loans and leases, annualized | 0.25 | 0.25 | 0.19 | 0.20 | 0.33 | ||||||||||
| Ratio of allowance for loan and lease losses to net charge-offs, annualized | 5.78x | 6.14x | 8.79x | 8.98x | 5.87x | ||||||||||
| Ratio of allowance for loan and lease losses to nonperforming loans and leases held for investment | 3.99x | 4.07x | 4.35x | 4.83x | 4.84x |
Nonperforming assets totaled $1.1 billion at March 31, 2022, down $28 million compared to December 31, 2021 due to declines in the commercial and industrial portfolio. Nonperforming loans and leases held for investment were 0.36% of loans and leases held for investment at March 31, 2022, down two basis points compared to December 31, 2021.
Performing TDRs were up $125 million compared to the prior quarter primarily due to an increase in government guaranteed residential mortgages.
Loans 90 days or more past due and still accruing totaled $1.9 billion at March 31, 2022, down $16 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 0.66% at March 31, 2022, down 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 0.04% at March 31, 2022, up one basis point from December 31, 2021.
Loans 30-89 days past due and still accruing of $2.1 billion at March 31, 2022 were up one basis point compared to the prior quarter due to an increase in the commercial and industrial portfolio, partially offset by seasonal declines in the indirect auto portfolio and a decline in the student portfolio.
Net charge-offs during the first quarter totaled $178 million, or 0.25% as a percentage of average loans, and was stable compared to the prior quarter.
The allowance for credit losses was $4.4 billion and includes $4.2 billion for the allowance for loan and lease losses and $253 million for the reserve for unfunded commitments. The ALLL ratio was 1.44% compared to 1.53% at December 31, 2021. The ALLL covered nonperforming loans and leases held for investment 3.99X compared to 4.07X at December 31, 2021. At March 31, 2022, the ALLL was 5.78X annualized net charge-offs, compared to 6.14X at December 31, 2021.
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| SEGMENT RESULTS | Change 1Q22 vs. | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in millions) | ||||||||||
| Segment Net Income | 1Q22 | 4Q21 | 1Q21 | 4Q21 | 1Q21 | |||||
| Consumer Banking and Wealth | $ | 864 | $ | 965 | $ | 681 | $ | (101) | $ | 183 |
| Corporate and Commercial Banking | 985 | 1,162 | 966 | (177) | 19 | |||||
| Insurance Holdings | 152 | 126 | 133 | 26 | 19 | |||||
| Other, Treasury & Corporate | (585) | (651) | (307) | 66 | (278) | |||||
| Total net income | $ | 1,416 | $ | 1,602 | $ | 1,473 | $ | (186) | $ | (57) |
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, 2021.
First Quarter 2022 compared to Fourth Quarter 2021
Consumer Banking and Wealth (“CB&W”)
CB&W net income was $864 million for the first quarter of 2022, a decrease of $101 million compared to the prior quarter. Segment net interest income decreased $47 million primarily driven by lower average loans, lower purchase accounting accretion, and fewer days, partially offset by an increase in funding credits on deposits. The allocated provision for credit losses increased $15 million which reflects seasonally higher charge offs. Noninterest income decreased $42 million driven by lower residential mortgage income, primarily due to lower production income (due to lower margins and refinance volumes) and slightly lower mortgage servicing income, lower service charges on deposits due to lower incidence rates from higher balances due to seasonal tax refunds, and seasonally lower card and payment related fees, partially offset by an increase in other income related to the gain on the redemption of a noncontrolling equity interest in the current quarter. Noninterest expense decreased $31 million primarily due to lower occupancy expense, professional fees and outside processing from lower production related expenses, and lower merger related restructuring charges, partially offset by increased operational losses in the current quarter.
Average loans held for investment decreased $1.7 billion, or 1.3%, compared to the prior quarter primarily due to lower mortgage warehouse lending and indirect auto loans as well as declines in home equity and direct lending and student lending, partially offset by higher residential mortgage balances driven by the continued impact of correspondent strategies. Average total deposits increased $4.3 billion, or 1.7%, compared to the prior quarter primarily due to tax refunds and other seasonal impacts in the current quarter.
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Corporate and Commercial Banking (“C&CB”)
C&CB net income was $985 million for the first quarter of 2022, a decrease of $177 million compared to the prior quarter. Segment net interest income decreased $46 million due to lower fee income associated with PPP loan forgiveness and fewer days, partially offset by growth in core loan balances and higher purchase accounting accretion. The allocated provision for credit losses increased $33 million primarily due to a lower reserve release than the prior quarter. Noninterest income decreased $171 million primarily due to lower investment banking income driven by lower merger and acquisition fees, lower loan syndications, high yield bonds, equity originations, lower core trading income, and lower investment income from the Company’s SBIC and other equity investments, partially offset by increased revenues from investment grade bond originations and positive CVA/DVA mark to market. Noninterest expense decreased $57 million primarily driven by lower incentive compensation.
Average loans held for investment increased $4.5 billion, or 3.0%, compared to the prior quarter primarily due to increases in core commercial and industrial loans partially offset by decreases in average PPP loans (commercial and industrial), average CRE loans, and average commercial construction loans. Average total deposits decreased $3.1 billion, or 2.0%, compared to the prior quarter primarily due to the inflows of seasonal municipal tax related deposits in the prior quarter.
Insurance Holdings (“IH”)
IH net income was $152 million for the first quarter of 2022, an increase of $26 million compared to the prior quarter. Noninterest income increased $56 million primarily due to seasonality in employee benefit commissions. Noninterest expense increased $13 million primarily due to seasonally higher payroll taxes and employee benefits in the current quarter.
Other, Treasury & Corporate (“OT&C”)
OT&C generated a net loss of $585 million for the first quarter of 2022, compared to a net loss of $651 million for the prior quarter. Net interest income increased $32 million primarily due to higher earnings in the securities portfolio from purchases of higher yielding MBS and lower premium amortization. The allocated provision for credit losses decreased $41 million which reflects a reserve release in the current quarter. Noninterest income decreased $24 million primarily driven by losses on the sale of securities this quarter as well as valuation changes from assets held for certain post-retirement benefits, partially offset by the prior quarter valuation decrease for derivatives related to Visa shares. Noninterest expense increased $49 million primarily due to higher occupancy expenses and merger related and restructuring charges in the current quarter.
First Quarter 2022 compared to First Quarter 2021
Consumer Banking and Wealth
CB&W net income was $864 million for the first quarter of 2022, an increase of $183 million compared to the earlier quarter. Segment net interest income increased $194 million primarily driven by higher interest rates, favorable funding credit on deposits, and increased deposit balances, partially offset by lower purchase accounting accretion. The allocated provision for credit losses decreased $26 million reflecting the impact of a larger allowance release than the earlier quarter as well as lower charge offs. Noninterest income increased $30 million compared to earlier quarter primarily due to the gain on the redemption of noncontrolling equity interest in the current quarter as well as an increase in card and payment fees driven by increased sales volume, partially offset by a gain from the divestiture of certain businesses in the earlier quarter and lower residential mortgage income. Noninterest expense was flat compared to the earlier quarter.
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Corporate and Commercial Banking
C&CB net income was $985 million for the first quarter of 2022, an increase of $19 million compared to the earlier quarter. Segment net interest income decreased $31 million primarily due to lower fee income associated with PPP loan forgiveness and lower purchase accounting accretion, partially offset by higher funding credit on deposits and increases to non-interest bearing deposit balances. The allocated provision for credit losses decreased $115 million primarily reflecting a reserve release due to improving economic outlook and lower charge offs in the current quarter. Noninterest income decreased $73 million compared to the earlier quarter due to lower high yield bond and equity originations fees, lower credit trading income, and lower CVA/DVA mark to market gains, partially offset by higher structured real estate fees as well as higher investment income from the Company's SBIC and other investments. Noninterest expense decreased $18 million driven by lower professional fees and intangible amortization expense in the current quarter.
Insurance Holdings
IH net income was $152 million for the first quarter of 2022, an increase of $19 million compared to the earlier quarter. Noninterest income increased $104 million primarily due to continued organic growth and acquisitions. Noninterest expense increased $80 million primarily due to higher performance-based incentives and salaries.
Other, Treasury & Corporate
OT&C generated a net loss of $585 million in the first quarter of 2022, compared to a net loss of $307 million in the earlier quarter. Net interest income decreased $265 million primarily due to higher funding credit on deposits to other segments, partially offset by higher earnings in the securities portfolio from higher yields on new purchases and lower premium amortization. The allocated provision for credit losses was flat compared to the earlier quarter. Noninterest income decreased $116 million primarily due to securities losses in the current quarter and valuation changes from assets held for certain post-retirement benefits, which is primarily offset by lower personnel expense. Noninterest expense was flat compared to the earlier quarter.
Earnings Presentation and Quarterly Performance Summary
To listen to Truist’s live first quarter 2022 earnings conference call at 8 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 First Quarter 2022 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. 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 $544 billion as of March 31, 2022. 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.
•Adjusted Operating Leverage - The adjusted operating leverage 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 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 First Quarter 2022 Earnings Presentation, which is available at https://ir.truist.com/earnings.
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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, 2021 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 climate, 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, including as a result of the military conflict between Russia and Ukraine, 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;
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•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 teammates, 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, which have increased in frequency following the Russian invasion of Ukraine, 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
First Quarter 2022
| 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 | 10 | ||||||||
| Segment Financial Performance - Five Quarter Trend | 14 | ||||||||
| Capital Information - Five Quarter Trend | 15 | ||||||||
| Selected Mortgage Banking Information & Additional Information | 16 | ||||||||
| Selected Items | 17 | ||||||||
| Non-GAAP Reconciliations | 17 | ||||||||
| Financial Highlights | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Quarter Ended | |||||||||
| March 31 | % | ||||||||
| (Dollars in millions, except per share data, shares in thousands) | 2022 | 2021 | Change | ||||||
| Summary Income Statement | |||||||||
| Interest income - taxable equivalent (1) | $ | 3,383 | $ | 3,522 | (3.9) | % | |||
| Interest expense | 174 | 209 | (16.7) | ||||||
| Net interest income - taxable equivalent | 3,209 | 3,313 | (3.1) | ||||||
| Less: Taxable-equivalent adjustment | 26 | 28 | (7.1) | ||||||
| Net interest income | 3,183 | 3,285 | (3.1) | ||||||
| Provision for credit losses | (95) | 48 | NM | ||||||
| Net interest income after provision for credit losses | 3,278 | 3,237 | 1.3 | ||||||
| Noninterest income | 2,142 | 2,197 | (2.5) | ||||||
| Noninterest expense | 3,674 | 3,610 | 1.8 | ||||||
| Income before income taxes | 1,746 | 1,824 | (4.3) | ||||||
| Provision for income taxes | 330 | 351 | (6.0) | ||||||
| Net income | 1,416 | 1,473 | (3.9) | ||||||
| Noncontrolling interests | 1 | (4) | (125.0) | ||||||
| Net income available to the bank holding company | 1,415 | 1,477 | (4.2) | ||||||
| Preferred stock dividends and other | 88 | 143 | (38.5) | ||||||
| Net income available to common shareholders | 1,327 | 1,334 | (0.5) | ||||||
| Per Common Share Data | |||||||||
| Earnings per share-basic | $ | 1.00 | $ | 0.99 | 1.0 | % | |||
| Earnings per share-diluted | 0.99 | 0.98 | 1.0 | ||||||
| Earnings per share-adjusted diluted (2) | 1.23 | 1.18 | 4.2 | ||||||
| Cash dividends declared | 0.48 | 0.45 | 6.7 | ||||||
| Common shareholders’ equity | 43.82 | 45.17 | (3.0) | ||||||
| Tangible common shareholders’ equity (2) | 21.87 | 25.53 | (14.3) | ||||||
| End of period shares outstanding | 1,331,414 | 1,344,845 | (1.0) | ||||||
| Weighted average shares outstanding-basic | 1,329,037 | 1,345,666 | (1.2) | ||||||
| Weighted average shares outstanding-diluted | 1,341,563 | 1,358,932 | (1.3) | ||||||
| Performance Ratios | |||||||||
| Return on average assets | 1.07 | % | 1.17 | % | |||||
| Return on average risk-weighted assets (current period is preliminary) | 1.46 | 1.58 | |||||||
| Return on average common shareholders’ equity | 9.0 | 8.7 | |||||||
| Return on average tangible common shareholders’ equity (2) | 18.6 | 16.4 | |||||||
| Net interest margin - taxable equivalent | 2.76 | 3.01 | |||||||
| Fee income ratio | 40.2 | 40.1 | |||||||
| Efficiency ratio-GAAP | 69.0 | 65.8 | |||||||
| Efficiency ratio-adjusted (2) | 58.3 | 56.9 | |||||||
| Credit Quality | |||||||||
| Nonperforming assets as a percentage of: | |||||||||
| Assets, including LHFS | 0.21 | % | 0.25 | % | |||||
| Loans and leases plus foreclosed property | 0.38 | 0.42 | |||||||
| Net charge-offs as a percentage of average loans and leases | 0.25 | 0.33 | |||||||
| Allowance for loan and lease losses as a percentage of LHFI | 1.44 | 1.94 | |||||||
| Ratio of allowance for loan and lease losses to nonperforming LHFI | 3.99x | 4.84x | |||||||
| Average Balances | |||||||||
| Assets | $ | 535,981 | $ | 508,833 | 5.3 | % | |||
| Securities (3) | 152,687 | 122,246 | 24.9 | ||||||
| Loans and leases | 292,484 | 299,541 | (2.4) | ||||||
| Deposits | 415,238 | 383,185 | 8.4 | ||||||
| Common shareholders’ equity | 60,117 | 62,252 | (3.4) | ||||||
| Total shareholders’ equity | 66,798 | 70,047 | (4.6) | ||||||
| Period-End Balances | |||||||||
| Assets | $ | 543,979 | $ | 517,537 | 5.1 | % | |||
| Securities (3) | 146,415 | 123,807 | 18.3 | ||||||
| Loans and leases | 294,248 | 297,179 | (1.0) | ||||||
| Deposits | 428,328 | 395,562 | 8.3 | ||||||
| Common shareholders’ equity | 58,348 | 60,752 | (4.0) | ||||||
| Total shareholders’ equity | 65,044 | 67,876 | (4.2) | ||||||
| Capital Ratios (current quarter is preliminary) | |||||||||
| Common equity Tier 1 | 9.4 | % | 10.1 | % | |||||
| Tier 1 | 11.0 | 12.0 | |||||||
| Total | 13.0 | 14.3 | |||||||
| Leverage | 8.6 | 9.4 | |||||||
| Supplementary leverage | 7.3 | 8.3 | |||||||
| Applicable ratios are annualized. | |||||||||
| NM - not meaningful | |||||||||
| (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 | ||||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||||||||
| (Dollars in millions, except per share data, shares in thousands) | 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||
| Summary Income Statement | ||||||||||||||||
| Interest income - taxable equivalent (1) | $ | 3,383 | $ | 3,435 | $ | 3,454 | $ | 3,471 | $ | 3,522 | ||||||
| Interest expense | 174 | 168 | 193 | 198 | 209 | |||||||||||
| Net interest income - taxable equivalent | 3,209 | 3,267 | 3,261 | 3,273 | 3,313 | |||||||||||
| Less: Taxable-equivalent adjustment | 26 | 24 | 28 | 28 | 28 | |||||||||||
| Net interest income | 3,183 | 3,243 | 3,233 | 3,245 | 3,285 | |||||||||||
| Provision for credit losses | (95) | (103) | (324) | (434) | 48 | |||||||||||
| Net interest income after provision for credit losses | 3,278 | 3,346 | 3,557 | 3,679 | 3,237 | |||||||||||
| Noninterest income | 2,142 | 2,323 | 2,365 | 2,405 | 2,197 | |||||||||||
| Noninterest expense | 3,674 | 3,700 | 3,795 | 4,011 | 3,610 | |||||||||||
| Income before income taxes | 1,746 | 1,969 | 2,127 | 2,073 | 1,824 | |||||||||||
| Provision for income taxes | 330 | 367 | 423 | 415 | 351 | |||||||||||
| Net income | 1,416 | 1,602 | 1,704 | 1,658 | 1,473 | |||||||||||
| Noncontrolling interests | 1 | — | — | 1 | (4) | |||||||||||
| Net income available to the bank holding company | 1,415 | 1,602 | 1,704 | 1,657 | 1,477 | |||||||||||
| Preferred stock dividends and other | 88 | 78 | 88 | 98 | 143 | |||||||||||
| Net income available to common shareholders | 1,327 | 1,524 | 1,616 | 1,559 | 1,334 | |||||||||||
| Per Common Share Data | ||||||||||||||||
| Earnings per share-basic | $ | 1.00 | $ | 1.15 | $ | 1.21 | $ | 1.16 | $ | 0.99 | ||||||
| Earnings per share-diluted | 0.99 | 1.13 | 1.20 | 1.16 | 0.98 | |||||||||||
| Earnings per share-adjusted diluted (2) | 1.23 | 1.38 | 1.42 | 1.55 | 1.18 | |||||||||||
| Cash dividends declared | 0.48 | 0.48 | 0.48 | 0.45 | 0.45 | |||||||||||
| Common shareholders’ equity | 43.82 | 47.14 | 46.62 | 46.20 | 45.17 | |||||||||||
| Tangible common shareholders’ equity (2) | 21.87 | 25.47 | 26.34 | 26.50 | 25.53 | |||||||||||
| End of period shares outstanding | 1,331,414 | 1,327,818 | 1,334,892 | 1,334,770 | 1,344,845 | |||||||||||
| Weighted average shares outstanding-basic | 1,329,037 | 1,329,979 | 1,334,825 | 1,338,302 | 1,345,666 | |||||||||||
| Weighted average shares outstanding-diluted | 1,341,563 | 1,343,029 | 1,346,854 | 1,349,492 | 1,358,932 | |||||||||||
| Performance Ratios | ||||||||||||||||
| Return on average assets | 1.07 | % | 1.19 | % | 1.28 | % | 1.28 | % | 1.17 | % | ||||||
| Return on average risk-weighted assets (current quarter is preliminary) | 1.46 | 1.64 | 1.77 | 1.76 | 1.58 | |||||||||||
| Return on average common shareholders’ equity | 9.0 | 9.8 | 10.2 | 10.1 | 8.7 | |||||||||||
| Return on average tangible common shareholders’ equity (2) | 18.6 | 18.9 | 19.3 | 18.9 | 16.4 | |||||||||||
| Net interest margin - taxable equivalent | 2.76 | 2.76 | 2.81 | 2.88 | 3.01 | |||||||||||
| Fee income ratio | 40.2 | 41.7 | 42.2 | 42.6 | 40.1 | |||||||||||
| Efficiency ratio-GAAP | 69.0 | 66.5 | 67.8 | 71.0 | 65.8 | |||||||||||
| Efficiency ratio-adjusted (2) | 58.3 | 56.0 | 57.9 | 56.1 | 56.9 | |||||||||||
| Credit Quality | ||||||||||||||||
| Nonperforming assets as a percentage of: | ||||||||||||||||
| Assets, including LHFS | 0.21 | % | 0.21 | % | 0.23 | % | 0.23 | % | 0.25 | % | ||||||
| Loans and leases plus foreclosed property | 0.38 | 0.39 | 0.40 | 0.39 | 0.42 | |||||||||||
| Net charge-offs as a percentage of average loans and leases | 0.25 | 0.25 | 0.19 | 0.20 | 0.33 | |||||||||||
| Allowance for loan and lease losses as a percentage of LHFI | 1.44 | 1.53 | 1.65 | 1.79 | 1.94 | |||||||||||
| Ratio of allowance for loan and lease losses to nonperforming LHFI | 3.99x | 4.07x | 4.35x | 4.83x | 4.84x | |||||||||||
| Average Balances | ||||||||||||||||
| Assets | $ | 535,981 | $ | 534,911 | $ | 526,685 | $ | 518,774 | $ | 508,833 | ||||||
| Securities (3) | 152,687 | 153,405 | 146,272 | 135,647 | 122,246 | |||||||||||
| Loans and leases | 292,484 | 291,074 | 290,338 | 292,965 | 299,541 | |||||||||||
| Deposits | 415,238 | 410,966 | 402,728 | 396,255 | 383,185 | |||||||||||
| Common shareholders’ equity | 60,117 | 61,807 | 62,680 | 61,709 | 62,252 | |||||||||||
| Total shareholders’ equity | 66,798 | 68,480 | 69,353 | 68,665 | 70,047 | |||||||||||
| Period-End Balances | ||||||||||||||||
| Assets | $ | 543,979 | $ | 541,241 | $ | 529,884 | $ | 521,964 | $ | 517,537 | ||||||
| Securities (3) | 146,415 | 154,617 | 151,038 | 139,879 | 123,807 | |||||||||||
| Loans and leases | 294,248 | 294,325 | 290,655 | 289,494 | 297,179 | |||||||||||
| Deposits | 428,328 | 416,488 | 405,857 | 398,279 | 395,562 | |||||||||||
| Common shareholders’ equity | 58,348 | 62,598 | 62,227 | 61,663 | 60,752 | |||||||||||
| Total shareholders’ equity | 65,044 | 69,271 | 68,900 | 68,336 | 67,876 | |||||||||||
| Capital Ratios (current quarter is preliminary) | ||||||||||||||||
| Common equity Tier 1 | 9.4 | % | 9.6 | % | 10.1 | % | 10.2 | % | 10.1 | % | ||||||
| Tier 1 | 11.0 | 11.3 | 11.9 | 12.0 | 12.0 | |||||||||||
| Total | 13.0 | 13.2 | 13.9 | 14.2 | 14.3 | |||||||||||
| Leverage | 8.6 | 8.7 | 9.0 | 9.1 | 9.4 | |||||||||||
| Supplementary leverage | 7.3 | 7.4 | 7.8 | 7.9 | 8.3 | |||||||||||
| 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 | |||||||
| March 31 | Change | ||||||
| (Dollars in millions, except per share data, shares in thousands) | 2022 | 2021 | % | ||||
| Interest Income | |||||||
| Interest and fees on loans and leases | $ | 2,644 | $ | 3,002 | (11.9) | % | |
| Interest on securities | 640 | 443 | 197 | 44.5 | |||
| Interest on other earning assets | 73 | 49 | 24 | 49.0 | |||
| Total interest income | 3,357 | 3,494 | (137) | (3.9) | |||
| Interest Expense | |||||||
| Interest on deposits | 32 | 47 | (15) | (31.9) | |||
| Interest on long-term debt | 132 | 148 | (16) | (10.8) | |||
| Interest on other borrowings | 10 | 14 | (4) | (28.6) | |||
| Total interest expense | 174 | 209 | (35) | (16.7) | |||
| Net Interest Income | 3,183 | 3,285 | (102) | (3.1) | |||
| Provision for credit losses | (95) | 48 | (143) | NM | |||
| Net Interest Income After Provision for Credit Losses | 3,278 | 3,237 | 41 | 1.3 | |||
| Noninterest Income | |||||||
| Insurance income | 727 | 626 | 101 | 16.1 | |||
| Investment banking and trading income | 261 | 346 | (85) | (24.6) | |||
| Wealth management income | 343 | 341 | 2 | 0.6 | |||
| Service charges on deposits | 252 | 258 | (6) | (2.3) | |||
| Card and payment related fees | 212 | 200 | 12 | 6.0 | |||
| Residential mortgage income | 89 | 100 | (11) | (11.0) | |||
| Lending related fees | 85 | 100 | (15) | (15.0) | |||
| Operating lease income | 58 | 68 | (10) | (14.7) | |||
| Commercial mortgage income | 32 | 33 | (1) | (3.0) | |||
| Income from bank-owned life insurance | 51 | 50 | 1 | 2.0 | |||
| Securities gains (losses) | (69) | — | (69) | NM | |||
| Other income | 101 | 75 | 26 | 34.7 | |||
| Total noninterest income | 2,142 | 2,197 | (55) | (2.5) | |||
| Noninterest Expense | |||||||
| Personnel expense | 2,051 | 2,142 | (91) | (4.2) | |||
| Professional fees and outside processing | 363 | 350 | 13 | 3.7 | |||
| Software expense | 232 | 210 | 22 | 10.5 | |||
| Net occupancy expense | 208 | 209 | (1) | (0.5) | |||
| Amortization of intangibles | 137 | 144 | (7) | (4.9) | |||
| Equipment expense | 118 | 113 | 5 | 4.4 | |||
| Marketing and customer development | 84 | 66 | 18 | 27.3 | |||
| Operating lease depreciation | 48 | 50 | (2) | (4.0) | |||
| Loan-related expense | 44 | 54 | (10) | (18.5) | |||
| Regulatory costs | 35 | 25 | 10 | 40.0 | |||
| Merger-related and restructuring charges | 216 | 141 | 75 | 53.2 | |||
| Loss (gain) on early extinguishment of debt | — | (3) | 3 | (100.0) | |||
| Other expense | 138 | 109 | 29 | 26.6 | |||
| Total noninterest expense | 3,674 | 3,610 | 64 | 1.8 | |||
| Earnings | |||||||
| Income before income taxes | 1,746 | 1,824 | (78) | (4.3) | |||
| Provision for income taxes | 330 | 351 | (21) | (6.0) | |||
| Net income | 1,416 | 1,473 | (57) | (3.9) | |||
| Noncontrolling interests | 1 | (4) | 5 | (125.0) | |||
| Net income available to the bank holding company | 1,415 | 1,477 | (62) | (4.2) | |||
| Preferred stock dividends and other | 88 | 143 | (55) | (38.5) | |||
| Net income available to common shareholders | $ | 1,327 | $ | 1,334 | (0.5) | % | |
| Earnings Per Common Share | |||||||
| Basic | $ | 1.00 | $ | 0.99 | 1.0 | % | |
| Diluted | 0.99 | 0.98 | 0.01 | 1.0 | |||
| Weighted Average Shares Outstanding | |||||||
| Basic | 1,329,037 | 1,345,666 | (16,629) | (1.2) | |||
| Diluted | 1,341,563 | 1,358,932 | (17,369) | (1.3) | |||
| NM - not meaningful |
All values are in US Dollars.
Truist Financial Corporation 3
20
| Consolidated Statements of Income - Five Quarter Trend | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | ||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||
| (Dollars in millions, except per share data, shares in thousands) | 2022 | 2021 | 2021 | 2021 | 2021 | |||||
| Interest Income | ||||||||||
| Interest and fees on loans and leases | $ | 2,644 | $ | 2,753 | $ | 2,825 | $ | 2,901 | $ | 3,002 |
| Interest on securities | 640 | 602 | 548 | 497 | 443 | |||||
| Interest on other earning assets | 73 | 56 | 53 | 45 | 49 | |||||
| Total interest income | 3,357 | 3,411 | 3,426 | 3,443 | 3,494 | |||||
| Interest Expense | ||||||||||
| Interest on deposits | 32 | 32 | 33 | 36 | 47 | |||||
| Interest on long-term debt | 132 | 127 | 151 | 147 | 148 | |||||
| Interest on other borrowings | 10 | 9 | 9 | 15 | 14 | |||||
| Total interest expense | 174 | 168 | 193 | 198 | 209 | |||||
| Net Interest Income | 3,183 | 3,243 | 3,233 | 3,245 | 3,285 | |||||
| Provision for credit losses | (95) | (103) | (324) | (434) | 48 | |||||
| Net Interest Income After Provision for Credit Losses | 3,278 | 3,346 | 3,557 | 3,679 | 3,237 | |||||
| Noninterest Income | ||||||||||
| Insurance income | 727 | 666 | 645 | 690 | 626 | |||||
| Investment banking and trading income | 261 | 377 | 316 | 402 | 346 | |||||
| Wealth management income | 343 | 350 | 356 | 345 | 341 | |||||
| Service charges on deposits | 252 | 273 | 276 | 253 | 258 | |||||
| Card and payment related fees | 212 | 224 | 225 | 225 | 200 | |||||
| Residential mortgage income | 89 | 159 | 179 | 117 | 100 | |||||
| Lending related fees | 85 | 81 | 74 | 94 | 100 | |||||
| Operating lease income | 58 | 71 | 57 | 66 | 68 | |||||
| Commercial mortgage income | 32 | 45 | 54 | 47 | 33 | |||||
| Income from bank-owned life insurance | 51 | 44 | 43 | 46 | 50 | |||||
| Securities gains (losses) | (69) | — | — | — | — | |||||
| Other income | 101 | 33 | 140 | 120 | 75 | |||||
| Total noninterest income | 2,142 | 2,323 | 2,365 | 2,405 | 2,197 | |||||
| Noninterest Expense | ||||||||||
| Personnel expense | 2,051 | 2,096 | 2,187 | 2,207 | 2,142 | |||||
| Professional fees and outside processing | 363 | 379 | 372 | 341 | 350 | |||||
| Software expense | 232 | 238 | 251 | 246 | 210 | |||||
| Net occupancy expense | 208 | 186 | 187 | 182 | 209 | |||||
| Amortization of intangibles | 137 | 143 | 145 | 142 | 144 | |||||
| Equipment expense | 118 | 124 | 154 | 122 | 113 | |||||
| Marketing and customer development | 84 | 68 | 94 | 66 | 66 | |||||
| Operating lease depreciation | 48 | 46 | 47 | 47 | 50 | |||||
| Loan-related expense | 44 | 51 | 52 | 55 | 54 | |||||
| Regulatory costs | 35 | 38 | 43 | 31 | 25 | |||||
| Merger-related and restructuring charges | 216 | 212 | 172 | 297 | 141 | |||||
| Loss (gain) on early extinguishment of debt | — | (1) | — | — | (3) | |||||
| Other expense | 138 | 120 | 91 | 275 | 109 | |||||
| Total noninterest expense | 3,674 | 3,700 | 3,795 | 4,011 | 3,610 | |||||
| Earnings | ||||||||||
| Income before income taxes | 1,746 | 1,969 | 2,127 | 2,073 | 1,824 | |||||
| Provision for income taxes | 330 | 367 | 423 | 415 | 351 | |||||
| Net income | 1,416 | 1,602 | 1,704 | 1,658 | 1,473 | |||||
| Noncontrolling interests | 1 | — | — | 1 | (4) | |||||
| Net income available to the bank holding company | 1,415 | 1,602 | 1,704 | 1,657 | 1,477 | |||||
| Preferred stock dividends and other | 88 | 78 | 88 | 98 | 143 | |||||
| Net income available to common shareholders | $ | 1,327 | $ | 1,524 | $ | 1,616 | $ | 1,559 | $ | 1,334 |
| Earnings Per Common Share | ||||||||||
| Basic | $ | 1.00 | $ | 1.15 | $ | 1.21 | $ | 1.16 | $ | 0.99 |
| Diluted | 0.99 | 1.13 | 1.20 | 1.16 | 0.98 | |||||
| Weighted Average Shares Outstanding | ||||||||||
| Basic | 1,329,037 | 1,329,979 | 1,334,825 | 1,338,302 | 1,345,666 | |||||
| Diluted | 1,341,563 | 1,343,029 | 1,346,854 | 1,349,492 | 1,358,932 |
4 Truist Financial Corporation
| Consolidated Ending Balance Sheets - Five Quarter Trend | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||
| (Dollars in millions) | 2022 | 2021 | 2021 | 2021 | 2021 | |||||
| Assets | ||||||||||
| Cash and due from banks | $ | 5,516 | $ | 5,085 | $ | 4,656 | $ | 5,077 | $ | 5,097 |
| Interest-bearing deposits with banks | 23,606 | 15,210 | 15,171 | 21,480 | 27,035 | |||||
| Securities borrowed or purchased under resale agreements | 2,322 | 4,028 | 1,919 | 1,242 | 1,349 | |||||
| Trading assets at fair value | 5,920 | 4,423 | 6,972 | 5,945 | 5,094 | |||||
| Securities available for sale at fair value | 84,753 | 153,123 | 151,038 | 139,879 | 123,807 | |||||
| Securities held to maturity at amortized cost | 61,662 | 1,494 | — | — | — | |||||
| Loans and leases: | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | 141,060 | 138,762 | 133,791 | 135,881 | 140,315 | |||||
| CRE | 22,774 | 23,951 | 24,309 | 25,399 | 25,899 | |||||
| Commercial construction | 5,220 | 4,971 | 5,689 | 6,160 | 6,559 | |||||
| Consumer: | ||||||||||
| Residential mortgage | 48,171 | 47,852 | 46,691 | 44,036 | 44,298 | |||||
| Residential home equity and direct | 24,853 | 25,066 | 25,222 | 25,334 | 25,333 | |||||
| Indirect auto | 25,756 | 26,441 | 26,923 | 26,696 | 26,438 | |||||
| Indirect other | 11,043 | 10,883 | 11,155 | 11,039 | 10,631 | |||||
| Student | 6,514 | 6,780 | 7,059 | 7,341 | 7,478 | |||||
| Credit card | 4,690 | 4,807 | 4,683 | 4,599 | 4,560 | |||||
| Total loans and leases held for investment | 290,081 | 289,513 | 285,522 | 286,485 | 291,511 | |||||
| Loans held for sale | 4,167 | 4,812 | 5,133 | 3,009 | 5,668 | |||||
| Total loans and leases | 294,248 | 294,325 | 290,655 | 289,494 | 297,179 | |||||
| Allowance for loan and lease losses | (4,170) | (4,435) | (4,702) | (5,121) | (5,662) | |||||
| Premises and equipment | 3,662 | 3,700 | 3,719 | 3,699 | 3,787 | |||||
| Goodwill | 26,284 | 26,098 | 24,891 | 24,374 | 24,356 | |||||
| Core deposit and other intangible assets | 3,693 | 3,408 | 2,930 | 2,665 | 2,825 | |||||
| Loan servicing rights at fair value | 3,013 | 2,633 | 2,584 | 2,231 | 2,365 | |||||
| Other assets | 33,470 | 32,149 | 30,051 | 30,999 | 30,305 | |||||
| Total assets | $ | 543,979 | $ | 541,241 | $ | 529,884 | $ | 521,964 | $ | 517,537 |
| Liabilities | ||||||||||
| Deposits: | ||||||||||
| Noninterest-bearing deposits | $ | 150,446 | $ | 145,892 | $ | 143,595 | $ | 138,623 | $ | 136,555 |
| Interest checking | 119,572 | 115,754 | 108,954 | 107,993 | 107,082 | |||||
| Money market and savings | 143,834 | 138,956 | 136,633 | 134,118 | 132,733 | |||||
| Time deposits | 14,476 | 15,886 | 16,675 | 17,545 | 19,192 | |||||
| Total deposits | 428,328 | 416,488 | 405,857 | 398,279 | 395,562 | |||||
| Short-term borrowings | 5,147 | 5,292 | 5,226 | 5,652 | 5,889 | |||||
| Long-term debt | 33,773 | 35,913 | 37,837 | 37,969 | 37,753 | |||||
| Other liabilities | 11,687 | 14,277 | 12,064 | 11,728 | 10,457 | |||||
| Total liabilities | 478,935 | 471,970 | 460,984 | 453,628 | 449,661 | |||||
| Shareholders’ Equity: | ||||||||||
| Preferred stock | 6,673 | 6,673 | 6,673 | 6,673 | 7,124 | |||||
| Common stock | 6,657 | 6,639 | 6,674 | 6,674 | 6,724 | |||||
| Additional paid-in capital | 34,539 | 34,565 | 34,977 | 34,898 | 35,360 | |||||
| Retained earnings | 23,687 | 22,998 | 22,114 | 21,139 | 20,184 | |||||
| Accumulated other comprehensive loss | (6,535) | (1,604) | (1,538) | (1,048) | (1,516) | |||||
| Noncontrolling interests | 23 | — | — | — | — | |||||
| Total shareholders’ equity | 65,044 | 69,271 | 68,900 | 68,336 | 67,876 | |||||
| Total liabilities and shareholders’ equity | $ | 543,979 | $ | 541,241 | $ | 529,884 | $ | 521,964 | $ | 517,537 |
Truist Financial Corporation 5
| Average Balance Sheets | |||||||
|---|---|---|---|---|---|---|---|
| Quarter Ended | |||||||
| March 31 | Change | ||||||
| (Dollars in millions) | 2022 | 2021 | % | ||||
| Assets | |||||||
| Securities at amortized cost (1): | |||||||
| U.S. Treasury | $ | 9,890 | $ | 1,759 | NM | ||
| U.S. government-sponsored entities (GSE) | 1,120 | 1,839 | (719) | (39.1) | % | ||
| Mortgage-backed securities issued by GSE | 137,052 | 118,171 | 18,881 | 16.0 | |||
| States and political subdivisions | 374 | 444 | (70) | (15.8) | |||
| Non-agency mortgage-backed | 4,224 | — | 4,224 | NM | |||
| Other | 27 | 33 | (6) | (18.2) | |||
| Total securities | 152,687 | 122,246 | 30,441 | 24.9 | |||
| Loans and leases: | |||||||
| Commercial: | |||||||
| Commercial and industrial | 138,872 | 141,026 | (2,154) | (1.5) | |||
| CRE | 23,555 | 26,211 | (2,656) | (10.1) | |||
| Commercial construction | 5,046 | 6,557 | (1,511) | (23.0) | |||
| Consumer: | |||||||
| Residential mortgage | 47,976 | 45,823 | 2,153 | 4.7 | |||
| Residential home equity and direct | 24,883 | 25,658 | (775) | (3.0) | |||
| Indirect auto | 26,088 | 26,363 | (275) | (1.0) | |||
| Indirect other | 10,860 | 10,848 | 12 | 0.1 | |||
| Student | 6,648 | 7,519 | (871) | (11.6) | |||
| Credit card | 4,682 | 4,645 | 37 | 0.8 | |||
| Total loans and leases held for investment | 288,610 | 294,650 | (6,040) | (2.0) | |||
| Loans held for sale | 3,874 | 4,891 | (1,017) | (20.8) | |||
| Total loans and leases | 292,484 | 299,541 | (7,057) | (2.4) | |||
| Interest earning trading assets | 5,837 | 4,742 | 1,095 | 23.1 | |||
| Other earning assets | 18,932 | 17,417 | 1,515 | 8.7 | |||
| Total earning assets | 469,940 | 443,946 | 25,994 | 5.9 | |||
| Nonearning assets | 66,041 | 64,887 | 1,154 | 1.8 | |||
| Total assets | $ | 535,981 | $ | 508,833 | 5.3 | % | |
| Liabilities and Shareholders’ Equity | |||||||
| Deposits: | |||||||
| Noninterest-bearing deposits | $ | 145,933 | $ | 128,579 | 13.5 | % | |
| Interest checking | 112,159 | 104,744 | 7,415 | 7.1 | |||
| Money market and savings | 141,500 | 129,303 | 12,197 | 9.4 | |||
| Time deposits | 15,646 | 20,559 | (4,913) | (23.9) | |||
| Total deposits | 415,238 | 383,185 | 32,053 | 8.4 | |||
| Short-term borrowings | 6,944 | 6,731 | 213 | 3.2 | |||
| Long-term debt | 35,337 | 37,820 | (2,483) | (6.6) | |||
| Other liabilities | 11,664 | 11,050 | 614 | 5.6 | |||
| Total liabilities | 469,183 | 438,786 | 30,397 | 6.9 | |||
| Shareholders’ equity | 66,798 | 70,047 | (3,249) | (4.6) | |||
| Total liabilities and shareholders’ equity | $ | 535,981 | $ | 508,833 | 5.3 | % | |
| 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 | ||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||
| (Dollars in millions) | 2022 | 2021 | 2021 | 2021 | 2021 | |||||
| Assets | ||||||||||
| Securities at amortized cost (1): | ||||||||||
| U.S. Treasury | $ | 9,890 | $ | 9,891 | $ | 9,699 | $ | 9,070 | $ | 1,759 |
| U.S. government-sponsored entities (GSE) | 1,120 | 1,686 | 1,830 | 1,840 | 1,839 | |||||
| Mortgage-backed securities issued by GSE | 137,052 | 137,651 | 132,890 | 124,251 | 118,171 | |||||
| States and political subdivisions | 374 | 410 | 425 | 437 | 444 | |||||
| Non-agency mortgage-backed | 4,224 | 3,738 | 1,398 | 17 | — | |||||
| Other | 27 | 29 | 30 | 32 | 33 | |||||
| Total securities | 152,687 | 153,405 | 146,272 | 135,647 | 122,246 | |||||
| Loans and leases: | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | 138,872 | 134,804 | 134,942 | 138,539 | 141,026 | |||||
| CRE | 23,555 | 24,396 | 24,849 | 25,645 | 26,211 | |||||
| Commercial construction | 5,046 | 5,341 | 5,969 | 6,359 | 6,557 | |||||
| Consumer: | ||||||||||
| Residential mortgage | 47,976 | 47,185 | 45,369 | 43,605 | 45,823 | |||||
| Residential home equity and direct | 24,883 | 25,146 | 25,242 | 25,238 | 25,658 | |||||
| Indirect auto | 26,088 | 26,841 | 26,830 | 26,444 | 26,363 | |||||
| Indirect other | 10,860 | 10,978 | 11,112 | 10,797 | 10,848 | |||||
| Student | 6,648 | 6,884 | 7,214 | 7,396 | 7,519 | |||||
| Credit card | 4,682 | 4,769 | 4,632 | 4,552 | 4,645 | |||||
| Total loans and leases held for investment | 288,610 | 286,344 | 286,159 | 288,575 | 294,650 | |||||
| Loans held for sale | 3,874 | 4,730 | 4,179 | 4,390 | 4,891 | |||||
| Total loans and leases | 292,484 | 291,074 | 290,338 | 292,965 | 299,541 | |||||
| Interest earning trading assets | 5,837 | 6,772 | 5,809 | 5,061 | 4,742 | |||||
| Other earning assets | 18,932 | 19,634 | 19,331 | 21,592 | 17,417 | |||||
| Total earning assets | 469,940 | 470,885 | 461,750 | 455,265 | 443,946 | |||||
| Nonearning assets | 66,041 | 64,026 | 64,935 | 63,509 | 64,887 | |||||
| Total assets | $ | 535,981 | $ | 534,911 | $ | 526,685 | $ | 518,774 | $ | 508,833 |
| Liabilities and Shareholders’ Equity | ||||||||||
| Deposits: | ||||||||||
| Noninterest-bearing deposits | $ | 145,933 | $ | 146,492 | $ | 141,738 | $ | 137,892 | $ | 128,579 |
| Interest checking | 112,159 | 110,506 | 107,802 | 106,121 | 104,744 | |||||
| Money market and savings | 141,500 | 137,676 | 136,094 | 134,029 | 129,303 | |||||
| Time deposits | 15,646 | 16,292 | 17,094 | 18,213 | 20,559 | |||||
| Total deposits | 415,238 | 410,966 | 402,728 | 396,255 | 383,185 | |||||
| Short-term borrowings | 6,944 | 6,433 | 5,360 | 6,168 | 6,731 | |||||
| Long-term debt | 35,337 | 37,623 | 37,329 | 36,873 | 37,820 | |||||
| Other liabilities | 11,664 | 11,409 | 11,915 | 10,813 | 11,050 | |||||
| Total liabilities | 469,183 | 466,431 | 457,332 | 450,109 | 438,786 | |||||
| Shareholders’ equity | 66,798 | 68,480 | 69,353 | 68,665 | 70,047 | |||||
| Total liabilities and shareholders’ equity | $ | 535,981 | $ | 534,911 | $ | 526,685 | $ | 518,774 | $ | 508,833 |
| 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 | ||||||||||||
| March 31, 2022 | December 31, 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 | $ | 9,890 | $ | 18 | 0.72 | % | $ | 9,891 | $ | 18 | 0.72 | % |
| U.S. government-sponsored entities (GSE) | 1,120 | 6 | 2.13 | 1,686 | 9 | 2.20 | ||||||
| Mortgage-backed securities issued by GSE | 137,052 | 590 | 1.72 | 137,651 | 552 | 1.60 | ||||||
| States and political subdivisions | 374 | 3 | 3.72 | 410 | 3 | 3.60 | ||||||
| Non-agency mortgage-backed | 4,224 | 24 | 2.25 | 3,738 | 20 | 2.23 | ||||||
| Other | 27 | — | 2.04 | 29 | 1 | 1.90 | ||||||
| Total securities | 152,687 | 641 | 1.68 | 153,405 | 603 | 1.57 | ||||||
| Loans and leases: | ||||||||||||
| Commercial: | ||||||||||||
| Commercial and industrial | 138,872 | 987 | 2.88 | 134,804 | 986 | 2.90 | ||||||
| CRE | 23,555 | 168 | 2.84 | 24,396 | 175 | 2.81 | ||||||
| Commercial construction | 5,046 | 35 | 3.05 | 5,341 | 38 | 2.96 | ||||||
| Consumer: | ||||||||||||
| Residential mortgage | 47,976 | 428 | 3.57 | 47,185 | 453 | 3.84 | ||||||
| Residential home equity and direct | 24,883 | 330 | 5.38 | 25,146 | 352 | 5.55 | ||||||
| Indirect auto | 26,088 | 357 | 5.56 | 26,841 | 389 | 5.75 | ||||||
| Indirect other | 10,860 | 169 | 6.32 | 10,978 | 176 | 6.42 | ||||||
| Student | 6,648 | 63 | 3.86 | 6,884 | 70 | 4.07 | ||||||
| Credit card | 4,682 | 104 | 8.97 | 4,769 | 105 | 8.69 | ||||||
| Total loans and leases held for investment | 288,610 | 2,641 | 3.70 | 286,344 | 2,744 | 3.81 | ||||||
| Loans held for sale | 3,874 | 28 | 2.87 | 4,730 | 32 | 2.66 | ||||||
| Total loans and leases | 292,484 | 2,669 | 3.69 | 291,074 | 2,776 | 3.79 | ||||||
| Interest earning trading assets | 5,837 | 43 | 3.04 | 6,772 | 46 | 2.72 | ||||||
| Other earning assets | 18,932 | 30 | 0.63 | 19,634 | 10 | 0.20 | ||||||
| Total earning assets | 469,940 | 3,383 | 2.90 | 470,885 | 3,435 | 2.90 | ||||||
| Nonearning assets | 66,041 | 64,026 | ||||||||||
| Total assets | $ | 535,981 | $ | 534,911 | ||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||
| Interest-bearing deposits: | ||||||||||||
| Interest checking | $ | 112,159 | 14 | 0.05 | $ | 110,506 | 15 | 0.05 | ||||
| Money market and savings | 141,500 | 11 | 0.03 | 137,676 | 8 | 0.03 | ||||||
| Time deposits | 15,646 | 7 | 0.18 | 16,292 | 9 | 0.21 | ||||||
| Total interest-bearing deposits (4) | 269,305 | 32 | 0.05 | 264,474 | 32 | 0.05 | ||||||
| Short-term borrowings | 6,944 | 10 | 0.60 | 6,433 | 9 | 0.55 | ||||||
| Long-term debt | 35,337 | 132 | 1.50 | 37,623 | 127 | 1.35 | ||||||
| Total interest-bearing liabilities | 311,586 | 174 | 0.22 | 308,530 | 168 | 0.22 | ||||||
| Noninterest-bearing deposits (4) | 145,933 | 146,492 | ||||||||||
| Other liabilities | 11,664 | 11,409 | ||||||||||
| Shareholders’ equity | 66,798 | 68,480 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 535,981 | $ | 534,911 | ||||||||
| Average interest-rate spread | 2.68 | 2.68 | ||||||||||
| Net interest income/ net interest margin - taxable equivalent | $ | 3,209 | 2.76 | % | $ | 3,267 | 2.76 | % | ||||
| Taxable-equivalent adjustment | $ | 26 | $ | 24 | ||||||||
| 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 March 31, 2022 and December 31, 2021. |
8 Truist Financial Corporation
| Average Balances and Rates - Quarters | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | ||||||||||||||||||
| September 30, 2021 | June 30, 2021 | March 31, 2021 | ||||||||||||||||
| (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 | $ | 9,699 | $ | 18 | 0.72 | % | $ | 9,070 | $ | 16 | 0.73 | % | $ | 1,759 | $ | 4 | 0.89 | % |
| U.S. government-sponsored entities (GSE) | 1,830 | 10 | 2.31 | 1,840 | 11 | 2.33 | 1,839 | 11 | 2.33 | |||||||||
| Mortgage-backed securities issued by GSE | 132,890 | 509 | 1.53 | 124,251 | 466 | 1.50 | 118,171 | 426 | 1.44 | |||||||||
| States and political subdivisions | 425 | 4 | 3.52 | 437 | 4 | 3.55 | 444 | 4 | 3.52 | |||||||||
| Non-agency mortgage-backed | 1,398 | 8 | 2.20 | 17 | — | 2.46 | — | — | — | |||||||||
| Other | 30 | — | 1.90 | 32 | — | 1.88 | 33 | — | 1.92 | |||||||||
| Total securities | 146,272 | 549 | 1.50 | 135,647 | 497 | 1.47 | 122,246 | 445 | 1.45 | |||||||||
| Loans and leases: | ||||||||||||||||||
| Commercial: | ||||||||||||||||||
| Commercial and industrial | 134,942 | 1,023 | 3.01 | 138,539 | 1,072 | 3.10 | 141,026 | 1,093 | 3.14 | |||||||||
| CRE | 24,849 | 181 | 2.86 | 25,645 | 183 | 2.84 | 26,211 | 189 | 2.90 | |||||||||
| Commercial construction | 5,969 | 42 | 2.96 | 6,359 | 45 | 2.95 | 6,557 | 48 | 3.04 | |||||||||
| Consumer: | ||||||||||||||||||
| Residential mortgage | 45,369 | 450 | 3.96 | 43,605 | 474 | 4.35 | 45,823 | 507 | 4.42 | |||||||||
| Residential home equity and direct | 25,242 | 360 | 5.67 | 25,238 | 361 | 5.74 | 25,658 | 368 | 5.81 | |||||||||
| Indirect auto | 26,830 | 405 | 5.99 | 26,444 | 409 | 6.20 | 26,363 | 426 | 6.56 | |||||||||
| Indirect other | 11,112 | 183 | 6.54 | 10,797 | 185 | 6.86 | 10,848 | 187 | 6.98 | |||||||||
| Student | 7,214 | 74 | 4.02 | 7,396 | 72 | 3.90 | 7,519 | 73 | 3.96 | |||||||||
| Credit card | 4,632 | 105 | 9.01 | 4,552 | 99 | 8.73 | 4,645 | 106 | 9.24 | |||||||||
| Total loans and leases held for investment | 286,159 | 2,823 | 3.92 | 288,575 | 2,900 | 4.03 | 294,650 | 2,997 | 4.11 | |||||||||
| Loans held for sale | 4,179 | 28 | 2.69 | 4,390 | 28 | 2.57 | 4,891 | 32 | 2.59 | |||||||||
| Total loans and leases | 290,338 | 2,851 | 3.90 | 292,965 | 2,928 | 4.01 | 299,541 | 3,029 | 4.09 | |||||||||
| Interest earning trading assets | 5,809 | 41 | 2.81 | 5,061 | 37 | 2.82 | 4,742 | 32 | 2.79 | |||||||||
| Other earning assets | 19,331 | 13 | 0.25 | 21,592 | 9 | 0.19 | 17,417 | 16 | 0.37 | |||||||||
| Total earning assets | 461,750 | 3,454 | 2.98 | 455,265 | 3,471 | 3.06 | 443,946 | 3,522 | 3.20 | |||||||||
| Nonearning assets | 64,935 | 63,509 | 64,887 | |||||||||||||||
| Total assets | $ | 526,685 | $ | 518,774 | $ | 508,833 | ||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||
| Interest checking | $ | 107,802 | 14 | 0.05 | $ | 106,121 | 15 | 0.06 | $ | 104,744 | 15 | 0.06 | ||||||
| Money market and savings | 136,094 | 9 | 0.03 | 134,029 | 8 | 0.03 | 129,303 | 10 | 0.03 | |||||||||
| Time deposits | 17,094 | 10 | 0.23 | 18,213 | 13 | 0.28 | 20,559 | 22 | 0.44 | |||||||||
| Total interest-bearing deposits (4) | 260,990 | 33 | 0.05 | 258,363 | 36 | 0.06 | 254,606 | 47 | 0.07 | |||||||||
| Short-term borrowings | 5,360 | 9 | 0.68 | 6,168 | 15 | 0.98 | 6,731 | 14 | 0.82 | |||||||||
| Long-term debt | 37,329 | 151 | 1.61 | 36,873 | 147 | 1.60 | 37,820 | 148 | 1.57 | |||||||||
| Total interest-bearing liabilities | 303,679 | 193 | 0.25 | 301,404 | 198 | 0.26 | 299,157 | 209 | 0.28 | |||||||||
| Noninterest-bearing deposits (4) | 141,738 | 137,892 | 128,579 | |||||||||||||||
| Other liabilities | 11,915 | 10,813 | 11,050 | |||||||||||||||
| Shareholders’ equity | 69,353 | 68,665 | 70,047 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 526,685 | $ | 518,774 | $ | 508,833 | ||||||||||||
| Average interest-rate spread | 2.73 | 2.80 | 2.92 | |||||||||||||||
| Net interest income/ net interest margin - taxable equivalent | $ | 3,261 | 2.81 | % | $ | 3,273 | 2.88 | % | $ | 3,313 | 3.01 | % | ||||||
| Taxable-equivalent adjustment | $ | 28 | $ | 28 | $ | 28 | ||||||||||||
| 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%, 0.04%, and 0.05% for the three months ended September 30, 2021, June 30, 2021, and March 31, 2021, respectively. |
Truist Financial Corporation 9
| Credit Quality | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||
| (Dollars in millions) | 2022 | 2021 | 2021 | 2021 | 2021 | |||||
| Nonperforming Assets | ||||||||||
| Nonaccrual loans and leases: | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | $ | 330 | $ | 394 | $ | 423 | $ | 402 | $ | 474 |
| CRE | 27 | 29 | 20 | 25 | 58 | |||||
| Commercial construction | — | 7 | 7 | 12 | 13 | |||||
| Consumer: | ||||||||||
| Residential mortgage | 315 | 296 | 306 | 302 | 290 | |||||
| Residential home equity and direct | 141 | 141 | 146 | 165 | 172 | |||||
| Indirect auto | 227 | 218 | 172 | 148 | 158 | |||||
| Indirect other | 4 | 5 | 6 | 6 | 6 | |||||
| Total nonaccrual loans and leases held for investment | 1,044 | 1,090 | 1,080 | 1,060 | 1,171 | |||||
| Loans held for sale | 39 | 22 | 76 | 78 | 72 | |||||
| Total nonaccrual loans and leases | 1,083 | 1,112 | 1,156 | 1,138 | 1,243 | |||||
| Foreclosed real estate | 3 | 8 | 9 | 13 | 18 | |||||
| Other foreclosed property | 49 | 43 | 39 | 41 | 38 | |||||
| Total nonperforming assets | $ | 1,135 | $ | 1,163 | $ | 1,204 | $ | 1,192 | $ | 1,299 |
| Troubled Debt Restructurings (TDRs) | ||||||||||
| Performing TDRs: | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | $ | 104 | $ | 147 | $ | 200 | $ | 202 | $ | 201 |
| CRE | 5 | 5 | 8 | 24 | 47 | |||||
| Commercial construction | 1 | — | — | — | — | |||||
| Consumer: | ||||||||||
| Residential mortgage - government guaranteed | 622 | 480 | 507 | 520 | 535 | |||||
| Residential mortgage - nonguaranteed | 244 | 212 | 205 | 207 | 198 | |||||
| Residential home equity and direct | 91 | 98 | 105 | 107 | 109 | |||||
| Indirect auto | 392 | 389 | 390 | 389 | 399 | |||||
| Indirect other | 6 | 7 | 7 | 7 | 7 | |||||
| Student - nonguaranteed | 25 | 25 | 23 | 13 | 8 | |||||
| Credit card | 25 | 27 | 30 | 32 | 35 | |||||
| Total performing TDRs | 1,515 | 1,390 | 1,475 | 1,501 | 1,539 | |||||
| Nonperforming TDRs | 189 | 152 | 159 | 190 | 207 | |||||
| Total TDRs | $ | 1,704 | $ | 1,542 | $ | 1,634 | $ | 1,691 | $ | 1,746 |
| Loans 90 Days or More Past Due and Still Accruing | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | $ | 22 | $ | 13 | $ | 18 | $ | 14 | $ | 14 |
| Consumer: | ||||||||||
| Residential mortgage - government guaranteed | 996 | 978 | 823 | 929 | 935 | |||||
| Residential mortgage - nonguaranteed | 31 | 31 | 29 | 47 | 40 | |||||
| Residential home equity and direct | 12 | 9 | 7 | 7 | 11 | |||||
| Indirect auto | 1 | 1 | 2 | 2 | 2 | |||||
| Indirect other | 2 | 3 | 2 | 1 | 1 | |||||
| Student - government guaranteed | 818 | 864 | 965 | 1,043 | 1,033 | |||||
| Student - nonguaranteed | 4 | 4 | 3 | 3 | 4 | |||||
| Credit card | 28 | 27 | 23 | 22 | 32 | |||||
| Total loans 90 days past due and still accruing | $ | 1,914 | $ | 1,930 | $ | 1,872 | $ | 2,068 | $ | 2,072 |
| Loans 30-89 Days Past Due | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | $ | 280 | $ | 130 | $ | 135 | $ | 146 | $ | 152 |
| CRE | 13 | 20 | 4 | 7 | 9 | |||||
| Commercial construction | 1 | 2 | 2 | 1 | 4 | |||||
| Consumer: | ||||||||||
| Residential mortgage - government guaranteed | 216 | 256 | 264 | 307 | 330 | |||||
| Residential mortgage - nonguaranteed | 326 | 258 | 231 | 236 | 247 | |||||
| Residential home equity and direct | 142 | 107 | 81 | 73 | 82 | |||||
| Indirect auto | 529 | 607 | 560 | 428 | 328 | |||||
| Indirect other | 65 | 64 | 53 | 47 | 45 | |||||
| Student - government guaranteed | 476 | 549 | 451 | 543 | 551 | |||||
| Student - nonguaranteed | 6 | 6 | 5 | 5 | 5 | |||||
| Credit card | 47 | 45 | 37 | 31 | 35 | |||||
| Total loans 30-89 days past due | $ | 2,101 | $ | 2,044 | $ | 1,823 | $ | 1,824 | $ | 1,788 |
10 Truist Financial Corporation
| As of/For the Quarter Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||
| (Dollars in millions) | 2022 | 2021 | 2021 | 2021 | 2021 | |||||
| Allowance for Credit Losses | ||||||||||
| Beginning balance | $ | 4,695 | $ | 4,978 | $ | 5,436 | $ | 6,011 | $ | 6,199 |
| Provision for credit losses | (95) | (103) | (324) | (434) | 48 | |||||
| Charge-offs: | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | (31) | (54) | (57) | (53) | (79) | |||||
| CRE | (1) | (5) | (1) | — | (4) | |||||
| Commercial construction | (1) | — | — | — | (2) | |||||
| Consumer: | ||||||||||
| Residential mortgage | (2) | (1) | (7) | (4) | (11) | |||||
| Residential home equity and direct | (58) | (51) | (51) | (57) | (55) | |||||
| Indirect auto | (102) | (89) | (73) | (69) | (105) | |||||
| Indirect other | (19) | (16) | (13) | (11) | (17) | |||||
| Student | (6) | (12) | (6) | (3) | (3) | |||||
| Credit card | (41) | (37) | (31) | (42) | (40) | |||||
| Total charge-offs | (261) | (265) | (239) | (239) | (316) | |||||
| Recoveries: | ||||||||||
| Commercial: | ||||||||||
| Commercial and industrial | 17 | 23 | 42 | 23 | 19 | |||||
| CRE | 1 | — | 1 | 4 | 1 | |||||
| Commercial construction | 1 | 1 | 1 | 1 | 1 | |||||
| Consumer: | ||||||||||
| Residential mortgage | 6 | 2 | 3 | 5 | 2 | |||||
| Residential home equity and direct | 20 | 21 | 20 | 20 | 18 | |||||
| Indirect auto | 23 | 21 | 22 | 27 | 22 | |||||
| Indirect other | 6 | 6 | 5 | 7 | 6 | |||||
| Student | — | — | 1 | — | — | |||||
| Credit card | 9 | 9 | 9 | 10 | 9 | |||||
| Total recoveries | 83 | 83 | 104 | 97 | 78 | |||||
| Net charge-offs | (178) | (182) | (135) | (142) | (238) | |||||
| Other | 1 | 2 | 1 | 1 | 2 | |||||
| Ending balance | $ | 4,423 | $ | 4,695 | $ | 4,978 | $ | 5,436 | $ | 6,011 |
| Allowance for Credit Losses: | ||||||||||
| Allowance for loan and lease losses | $ | 4,170 | $ | 4,435 | $ | 4,702 | $ | 5,121 | $ | 5,662 |
| Reserve for unfunded lending commitments (RUFC) | 253 | 260 | 276 | 315 | 349 | |||||
| Allowance for credit losses | $ | 4,423 | $ | 4,695 | $ | 4,978 | $ | 5,436 | $ | 6,011 |
| As of/For the Quarter Ended | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | ||||||
| Asset Quality Ratios | ||||||||||
| Loans 30-89 days past due and still accruing as a percentage of loans and leases | 0.72 | % | 0.71 | % | 0.64 | % | 0.64 | % | 0.61 | % |
| Loans 90 days or more past due and still accruing as a percentage of loans and leases | 0.66 | 0.67 | 0.66 | 0.72 | 0.71 | |||||
| Nonperforming loans and leases as a percentage of loans and leases held for investment | 0.36 | 0.38 | 0.38 | 0.37 | 0.40 | |||||
| Nonperforming loans and leases as a percentage of loans and leases (1) | 0.37 | 0.38 | 0.40 | 0.39 | 0.42 | |||||
| Nonperforming assets as a percentage of: | ||||||||||
| Total assets (1) | 0.21 | 0.21 | 0.23 | 0.23 | 0.25 | |||||
| Loans and leases plus foreclosed property | 0.38 | 0.39 | 0.40 | 0.39 | 0.42 | |||||
| Net charge-offs as a percentage of average loans and leases | 0.25 | 0.25 | 0.19 | 0.20 | 0.33 | |||||
| Allowance for loan and lease losses as a percentage of loans and leases | 1.44 | 1.53 | 1.65 | 1.79 | 1.94 | |||||
| Ratio of allowance for loan and lease losses to: | ||||||||||
| Net charge-offs | 5.78X | 6.14X | 8.79X | 8.98X | 5.87X | |||||
| Nonperforming loans and leases | 3.99X | 4.07X | 4.35X | 4.83X | 4.84X | |||||
| 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 | 0.04 | % | 0.03 | % | 0.03 | % | 0.04 | % | 0.04 | % |
| Applicable ratios are annualized. | ||||||||||
| (1)Includes loans held for sale. |
Truist Financial Corporation 11
| March 31, 2022 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 | $ | 102 | 98.1 | % | $ | 2 | 1.9 | % | $ | — | — | % | $ | 104 | |||
| CRE | 5 | 100.0 | — | — | — | — | 5 | ||||||||||
| Commercial construction | 1 | 100.0 | — | — | — | — | 1 | ||||||||||
| Consumer: | |||||||||||||||||
| Residential mortgage - government guaranteed | 290 | 46.6 | 58 | 9.3 | 274 | 44.1 | 622 | ||||||||||
| Residential mortgage - nonguaranteed | 210 | 86.1 | 25 | 10.2 | 9 | 3.7 | 244 | ||||||||||
| Residential home equity and direct | 85 | 93.4 | 6 | 6.6 | — | — | 91 | ||||||||||
| Indirect auto | 336 | 85.7 | 56 | 14.3 | — | — | 392 | ||||||||||
| Indirect other | 5 | 83.3 | 1 | 16.7 | — | — | 6 | ||||||||||
| Student - nonguaranteed | 22 | 88.0 | 2 | 8.0 | 1 | 4.0 | 25 | ||||||||||
| Credit card | 22 | 88.0 | 2 | 8.0 | 1 | 4.0 | 25 | ||||||||||
| Total performing TDRs (1) | 1,078 | 71.2 | 152 | 10.0 | 285 | 18.8 | 1,515 | ||||||||||
| Nonperforming TDRs (2) | 57 | 30.2 | 24 | 12.7 | 108 | 57.1 | 189 | ||||||||||
| Total TDRs (1)(2) | $ | 1,135 | 66.6 | % | $ | 176 | 10.3 | % | $ | 393 | 23.1 | % | $ | 1,704 | |||
| (1)Past due performing TDRs are included in past due disclosures. | |||||||||||||||||
| (2)Nonperforming TDRs are included in nonaccrual loan disclosures. | |||||||||||||||||
| Quarter Ended | |||||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | |||||||||||||
| 2022 | 2021 | 2021 | 2021 | 2021 | |||||||||||||
| Net Charge-offs as a Percentage of Average Loans and Leases: | |||||||||||||||||
| Commercial: | |||||||||||||||||
| Commercial and industrial | 0.04 | % | 0.09 | % | 0.04 | % | 0.09 | % | 0.17 | % | |||||||
| CRE | 0.01 | 0.07 | — | (0.05) | 0.04 | ||||||||||||
| Commercial construction | (0.02) | (0.10) | (0.06) | (0.06) | 0.08 | ||||||||||||
| Consumer: | |||||||||||||||||
| Residential mortgage | (0.03) | (0.02) | 0.04 | (0.01) | 0.08 | ||||||||||||
| Residential home equity and direct | 0.61 | 0.49 | 0.49 | 0.59 | 0.58 | ||||||||||||
| Indirect auto | 1.23 | 1.01 | 0.75 | 0.63 | 1.28 | ||||||||||||
| Indirect other | 0.48 | 0.39 | 0.26 | 0.17 | 0.39 | ||||||||||||
| Student | 0.33 | 0.65 | 0.31 | 0.16 | 0.16 | ||||||||||||
| Credit card | 2.77 | 2.31 | 1.90 | 2.75 | 2.74 | ||||||||||||
| Total loans and leases | 0.25 | 0.25 | 0.19 | 0.20 | 0.33 | ||||||||||||
| Applicable ratios are annualized. | |||||||||||||||||
| Credit Quality - Allowance with Fair Value Marks | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| As of/For the Quarter Ended | |||||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | |||||||||||||
| (Dollars in millions) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||||
| ALLL | $ | 4,170 | $ | 4,435 | $ | 4,702 | $ | 5,121 | $ | 5,662 | |||||||
| Unamortized fair value mark (1) | 1,119 | 1,323 | 1,540 | 1,777 | 2,067 | ||||||||||||
| Allowance plus unamortized fair value mark | $ | 5,289 | $ | 5,758 | $ | 6,242 | $ | 6,898 | $ | 7,729 | |||||||
| Loans and leases held for investment | $ | 290,081 | $ | 289,513 | $ | 285,522 | $ | 286,485 | $ | 291,511 | |||||||
| Unamortized fair value mark (1) | 1,119 | 1,323 | 1,540 | 1,777 | 2,067 | ||||||||||||
| Gross loans and leases | $ | 291,200 | $ | 290,836 | $ | 287,062 | $ | 288,262 | $ | 293,578 | |||||||
| Allowance for loan and lease losses as a percentage of loans and leases - GAAP | 1.44 | % | 1.53 | % | 1.65 | % | 1.79 | % | 1.94 | % | |||||||
| Allowance for loan and lease losses and unamortized fair value mark as a percentage of gross loans and leases - Adjusted (1) (2) | 1.82 | 1.98 | 2.17 | 2.39 | 2.63 |
(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.
12 Truist Financial Corporation
| Rollforward of Intangible Assets and Selected Fair Value Marks (1) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| As of/For the Quarter Ended | ||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||
| (Dollars in millions) | 2022 | 2021 | 2021 | 2021 | 2021 | |||||
| Loans and Leases (2) | ||||||||||
| Beginning balance unamortized fair value mark | $ | (1,323) | $ | (1,540) | $ | (1,777) | $ | (2,067) | $ | (2,395) |
| Accretion | 191 | 217 | 233 | 285 | 316 | |||||
| Purchase accounting adjustments and other activity | 13 | — | 4 | 5 | 12 | |||||
| Ending balance | $ | (1,119) | $ | (1,323) | $ | (1,540) | $ | (1,777) | $ | (2,067) |
| Core deposit and other intangible assets | ||||||||||
| Beginning balance | $ | 3,408 | $ | 2,930 | $ | 2,665 | $ | 2,825 | $ | 2,984 |
| Additions - acquisitions | 430 | 647 | 418 | — | 14 | |||||
| Amortization of intangibles | (137) | (143) | (145) | (142) | (144) | |||||
| Amortization in net occupancy expense | (8) | (3) | (4) | (3) | (3) | |||||
| Purchase accounting adjustments and other activity | — | (23) | (4) | (15) | (26) | |||||
| Ending balance | $ | 3,693 | $ | 3,408 | $ | 2,930 | $ | 2,665 | $ | 2,825 |
| Deposits (3) | ||||||||||
| Beginning balance unamortized fair value mark | $ | (7) | $ | (9) | $ | (12) | $ | (15) | $ | (19) |
| Amortization | 2 | 2 | 3 | 3 | 4 | |||||
| Ending balance | $ | (5) | $ | (7) | $ | (9) | $ | (12) | $ | (15) |
| Long-Term Debt (3) | ||||||||||
| Beginning balance unamortized fair value mark | $ | (139) | $ | (157) | $ | (176) | $ | (196) | $ | (216) |
| Amortization | 17 | 18 | 19 | 20 | 20 | |||||
| Ending balance | $ | (122) | $ | (139) | $ | (157) | $ | (176) | $ | (196) |
(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.
Truist Financial Corporation 13
| Segment Financial Performance - Preliminary | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | ||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||
| (Dollars in millions) | 2022 | 2021 | 2021 | 2021 | 2021 | |||||
| Consumer Banking and Wealth | ||||||||||
| Net interest income (expense) | $ | 1,529 | $ | 1,630 | $ | 1,666 | $ | 1,687 | $ | 1,753 |
| Net intersegment interest income (expense) | 649 | 595 | 485 | 385 | 231 | |||||
| Segment net interest income | 2,178 | 2,225 | 2,151 | 2,072 | 1,984 | |||||
| Allocated provision for credit losses | 74 | 59 | (5) | (4) | 100 | |||||
| Noninterest income | 950 | 992 | 1,028 | 925 | 920 | |||||
| Noninterest expense | 1,919 | 1,950 | 1,930 | 1,929 | 1,915 | |||||
| Income (loss) before income taxes | 1,135 | 1,208 | 1,254 | 1,072 | 889 | |||||
| Provision (benefit) for income taxes | 271 | 243 | 272 | 251 | 208 | |||||
| Segment net income (loss) | $ | 864 | $ | 965 | $ | 982 | $ | 821 | $ | 681 |
| Corporate and Commercial Banking | ||||||||||
| Net interest income (expense) | $ | 1,093 | $ | 1,105 | $ | 1,125 | $ | 1,182 | $ | 1,208 |
| Net intersegment interest income (expense) | 156 | 190 | 157 | 113 | 72 | |||||
| Segment net interest income | 1,249 | 1,295 | 1,282 | 1,295 | 1,280 | |||||
| Allocated provision for credit losses | (150) | (183) | (264) | (399) | (35) | |||||
| Noninterest income | 619 | 790 | 753 | 808 | 692 | |||||
| Noninterest expense | 757 | 814 | 820 | 841 | 775 | |||||
| Income (loss) before income taxes | 1,261 | 1,454 | 1,479 | 1,661 | 1,232 | |||||
| Provision (benefit) for income taxes | 276 | 292 | 311 | 366 | 266 | |||||
| Segment net income (loss) | $ | 985 | $ | 1,162 | $ | 1,168 | $ | 1,295 | $ | 966 |
| Insurance Holdings | ||||||||||
| Net interest income (expense) | $ | 24 | $ | 23 | $ | 27 | $ | 25 | $ | 24 |
| Net intersegment interest income (expense) | — | — | 1 | — | — | |||||
| Segment net interest income | 24 | 23 | 28 | 25 | 24 | |||||
| Allocated provision for credit losses | — | (1) | 1 | (1) | 1 | |||||
| Noninterest income | 737 | 681 | 652 | 698 | 633 | |||||
| Noninterest expense | 560 | 547 | 537 | 515 | 480 | |||||
| Income (loss) before income taxes | 201 | 158 | 142 | 209 | 176 | |||||
| Provision (benefit) for income taxes | 49 | 32 | 31 | 50 | 43 | |||||
| Segment net income (loss) | $ | 152 | $ | 126 | $ | 111 | $ | 159 | $ | 133 |
| Other, Treasury & Corporate (1) | ||||||||||
| Net interest income (expense) | $ | 537 | $ | 485 | $ | 415 | $ | 351 | $ | 300 |
| Net intersegment interest income (expense) | (805) | (785) | (643) | (498) | (303) | |||||
| Segment net interest income | (268) | (300) | (228) | (147) | (3) | |||||
| Allocated provision for credit losses | (19) | 22 | (56) | (30) | (18) | |||||
| Noninterest income | (164) | (140) | (68) | (26) | (48) | |||||
| Noninterest expense | 438 | 389 | 508 | 726 | 440 | |||||
| Income (loss) before income taxes | (851) | (851) | (748) | (869) | (473) | |||||
| Provision (benefit) for income taxes | (266) | (200) | (191) | (252) | (166) | |||||
| Segment net income (loss) | $ | (585) | $ | (651) | $ | (557) | $ | (617) | $ | (307) |
| Total Truist Financial Corporation | ||||||||||
| Net interest income (expense) | $ | 3,183 | $ | 3,243 | $ | 3,233 | $ | 3,245 | $ | 3,285 |
| Net intersegment interest income (expense) | — | — | — | — | — | |||||
| Segment net interest income | 3,183 | 3,243 | 3,233 | 3,245 | 3,285 | |||||
| Allocated provision for credit losses | (95) | (103) | (324) | (434) | 48 | |||||
| Noninterest income | 2,142 | 2,323 | 2,365 | 2,405 | 2,197 | |||||
| Noninterest expense | 3,674 | 3,700 | 3,795 | 4,011 | 3,610 | |||||
| Income (loss) before income taxes | 1,746 | 1,969 | 2,127 | 2,073 | 1,824 | |||||
| Provision (benefit) for income taxes | 330 | 367 | 423 | 415 | 351 | |||||
| Net income | $ | 1,416 | $ | 1,602 | $ | 1,704 | $ | 1,658 | $ | 1,473 |
| (1) Includes financial data from subsidiaries below the quantitative and qualitative thresholds requiring disclosure. |
14 Truist Financial Corporation
| Capital Information - Five Quarter Trend | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As of/For the Quarter Ended | |||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | |||||||||||
| (Dollars in millions, except per share data, shares in thousands) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||
| Selected Capital Information | (preliminary) | ||||||||||||||
| Risk-based capital: | |||||||||||||||
| Common equity tier 1 | $ | 37,224 | $ | 37,524 | $ | 38,859 | $ | 38,690 | $ | 38,267 | |||||
| Tier 1 | 43,895 | 44,194 | 45,529 | 45,360 | 45,388 | ||||||||||
| Total | 51,598 | 51,518 | 53,228 | 53,640 | 54,245 | ||||||||||
| Risk-weighted assets | 397,611 | 390,886 | 383,871 | 379,044 | 378,458 | ||||||||||
| Average quarterly assets for leverage ratio | 512,694 | 510,404 | 503,223 | 496,391 | 484,961 | ||||||||||
| Average quarterly assets for supplementary leverage ratio | 598,961 | 595,075 | 585,420 | 576,734 | 546,470 | ||||||||||
| Risk-based capital ratios: | |||||||||||||||
| Common equity tier 1 | 9.4 | % | 9.6 | % | 10.1 | % | 10.2 | % | 10.1 | % | |||||
| Tier 1 | 11.0 | 11.3 | 11.9 | 12.0 | 12.0 | ||||||||||
| Total | 13.0 | 13.2 | 13.9 | 14.2 | 14.3 | ||||||||||
| Leverage capital ratio | 8.6 | 8.7 | 9.0 | 9.1 | 9.4 | ||||||||||
| Supplementary leverage | 7.3 | 7.4 | 7.8 | 7.9 | 8.3 | ||||||||||
| Equity as a percentage of total assets | 12.0 | 12.8 | 13.0 | 13.1 | 13.1 | ||||||||||
| Common equity per common share | $ | 43.82 | $ | 47.14 | $ | 46.62 | $ | 46.20 | $ | 45.17 | |||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | |||||||||||
| (Dollars in millions, except per share data, shares in thousands) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||
| Calculations of Tangible Common Equity and Related Measures: (1) | |||||||||||||||
| Total shareholders’ equity | $ | 65,044 | $ | 69,271 | $ | 68,900 | $ | 68,336 | $ | 67,876 | |||||
| Less: | |||||||||||||||
| Preferred stock | 6,673 | 6,673 | 6,673 | 6,673 | 7,124 | ||||||||||
| Noncontrolling interests | 23 | — | — | — | — | ||||||||||
| Intangible assets, net of deferred taxes | 29,229 | 28,772 | 27,066 | 26,296 | 26,413 | ||||||||||
| Tangible common equity | $ | 29,119 | $ | 33,826 | $ | 35,161 | $ | 35,367 | $ | 34,339 | |||||
| Outstanding shares at end of period (in thousands) | 1,331,414 | 1,327,818 | 1,334,892 | 1,334,770 | 1,344,845 | ||||||||||
| Tangible Common Equity Per Common Share | $ | 21.87 | $ | 25.47 | $ | 26.34 | $ | 26.50 | $ | 25.53 |
(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.
Truist Financial Corporation 15
| Selected Mortgage Banking Information & Additional Information | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As of/For the Quarter Ended | |||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | |||||||||||
| (Dollars in millions, except per share data) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||
| Residential Mortgage Income | |||||||||||||||
| Residential mortgage production revenue | $ | 52 | $ | 115 | $ | 139 | $ | 122 | $ | 140 | |||||
| Residential mortgage servicing income: | |||||||||||||||
| Residential mortgage servicing revenue | 145 | 155 | 157 | 139 | 141 | ||||||||||
| Realization of expected residential MSR cash flows | (109) | (143) | (146) | (175) | (208) | ||||||||||
| Income statement impact of mortgage servicing rights valuation: | |||||||||||||||
| MSRs fair value increase (decrease) | 350 | (25) | 77 | (188) | 360 | ||||||||||
| MSRs hedge gains (losses) | (349) | 57 | (48) | 219 | (333) | ||||||||||
| Net MSRs valuation | 1 | 32 | 29 | 31 | 27 | ||||||||||
| Total residential mortgage servicing income | $ | 37 | $ | 44 | $ | 40 | $ | (5) | $ | (40) | |||||
| Total residential mortgage income | $ | 89 | $ | 159 | $ | 179 | $ | 117 | $ | 100 | |||||
| Commercial Mortgage Income | |||||||||||||||
| Commercial mortgage production revenue | $ | 32 | $ | 40 | $ | 48 | $ | 40 | $ | 30 | |||||
| Commercial mortgage servicing income: | |||||||||||||||
| Commercial mortgage servicing revenue | 17 | 18 | 17 | 17 | 17 | ||||||||||
| Realization of expected commercial MSR cash flows | (17) | (12) | (11) | (11) | (15) | ||||||||||
| Income statement impact of mortgage servicing rights valuation: | |||||||||||||||
| MSRs fair value increase (decrease) | 9 | (1) | 1 | (4) | 13 | ||||||||||
| MSRs hedge gains (losses) | (9) | — | (1) | 5 | (12) | ||||||||||
| Net MSRs valuation | — | (1) | — | 1 | 1 | ||||||||||
| Total commercial mortgage servicing income | $ | — | $ | 5 | $ | 6 | $ | 7 | $ | 3 | |||||
| Commercial mortgage income | $ | 32 | $ | 45 | $ | 54 | $ | 47 | $ | 33 | |||||
| Other Mortgage Banking Information | |||||||||||||||
| Residential mortgage loan originations | $ | 11,408 | $ | 14,458 | $ | 15,852 | $ | 14,301 | $ | 13,075 | |||||
| Residential mortgage servicing portfolio (1): | |||||||||||||||
| Loans serviced for others | 195,737 | 196,011 | 198,119 | 178,004 | 179,836 | ||||||||||
| Bank-owned loans serviced | 50,927 | 50,716 | 50,427 | 46,031 | 48,800 | ||||||||||
| Total servicing portfolio | 246,664 | 246,727 | 248,546 | 224,035 | 228,636 | ||||||||||
| Weighted-average coupon rate on mortgage loans serviced for others | 3.41 | % | 3.44 | % | 3.49 | % | 3.66 | % | 3.76 | % | |||||
| Weighted-average servicing fee on mortgage loans serviced for others | 0.31 | 0.31 | 0.31 | 0.31 | 0.31 | ||||||||||
| Additional Information | |||||||||||||||
| NQDCP income (expense): | |||||||||||||||
| Interest income | $ | 19 | $ | 1 | $ | 2 | $ | 2 | $ | 9 | |||||
| Other income | (44) | (7) | 30 | 43 | 23 | ||||||||||
| Personnel expense | 25 | 6 | (32) | (45) | (32) | ||||||||||
| Total NQDCP income (expense) | $ | — | $ | — | $ | — | $ | — | $ | — | |||||
| Fair value of derivatives, net | $ | 631 | $ | 1,784 | $ | 2,375 | $ | 2,614 | $ | 2,222 | |||||
| CVA/DVA income (expense) included in investment banking and trading income | 24 | 12 | 16 | (12) | 48 | ||||||||||
| Common stock prices: | |||||||||||||||
| High | 68.95 | 65.42 | 60.74 | 62.89 | 61.26 | ||||||||||
| Low | 56.19 | 54.73 | 51.87 | 52.61 | 46.71 | ||||||||||
| End of period | 56.70 | 58.55 | 58.65 | 55.50 | 58.32 | ||||||||||
| Banking offices | 2,112 | 2,517 | 2,518 | 2,557 | 2,556 | ||||||||||
| ATMs | 3,214 | 3,670 | 3,684 | 3,779 | 3,807 | ||||||||||
| FTEs (2) | 51,169 | 51,348 | 52,675 | 52,248 | 53,207 |
(1)Amounts reported are unpaid principal balance.
(2)FTEs represents an average for the quarter.
16 Truist Financial Corporation
| Selected Items (1) | ||||
|---|---|---|---|---|
| Favorable (Unfavorable) | ||||
| (Dollars in millions) | After-Tax at | |||
| Description | Pre-Tax | Marginal Rate | ||
| Selected Items | ||||
| First Quarter 2022 | ||||
| Incremental operating expenses related to the merger ($133 million professional fees and outside processing, $24 million personnel expense, $20 million net occupancy expense, and $25 million other) | $ | (202) | $ | (155) |
| Gain on redemption of noncontrolling equity interest related to the acquisition of certain merchant services relationships (other income) | 74 | 57 | ||
| 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 (professional fees and outside processing) | (30) | (23) | ||
| Second Quarter 2021 | ||||
| Charitable contribution (other expense) | $ | (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 (other expense) | (36) | (28) |
(1)Includes selected items representing a part of line items within the consolidated statements of income. Excludes line items adjusted in their entirety, such as securities gains and losses, gains and losses on the early extinguishment of debt, and costs classified as merger-related and restructuring charges.
| Non-GAAP Reconciliations | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | |||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | |||||||||||
| (Dollars in millions) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||
| Efficiency Ratio (1) | |||||||||||||||
| Efficiency Ratio Numerator - Noninterest Expense - GAAP | $ | 3,674 | $ | 3,700 | $ | 3,795 | $ | 4,011 | $ | 3,610 | |||||
| Merger-related and restructuring charges, net | (216) | (212) | (172) | (297) | (141) | ||||||||||
| Gain (loss) on early extinguishment of debt | — | 1 | — | — | 3 | ||||||||||
| Incremental operating expense related to the merger | (202) | (215) | (191) | (190) | (175) | ||||||||||
| Amortization of intangibles | (137) | (143) | (145) | (142) | (144) | ||||||||||
| Charitable contribution | — | — | — | (200) | — | ||||||||||
| Professional fee accrual | — | — | (30) | — | — | ||||||||||
| Acceleration for cash flow hedge unwind | — | — | — | — | (36) | ||||||||||
| Efficiency Ratio Numerator - Adjusted | $ | 3,119 | $ | 3,131 | $ | 3,257 | $ | 3,182 | $ | 3,117 | |||||
| Efficiency Ratio Denominator - Revenue (2) - GAAP | $ | 5,325 | $ | 5,566 | $ | 5,598 | $ | 5,650 | $ | 5,482 | |||||
| Taxable equivalent adjustment | 26 | 24 | 28 | 28 | 28 | ||||||||||
| Securities (gains) losses | 69 | — | — | — | — | ||||||||||
| Gain on redemption of noncontrolling equity interest | (74) | — | — | — | — | ||||||||||
| Gains on divestiture of certain businesses | — | — | — | — | (37) | ||||||||||
| Efficiency Ratio Denominator - Adjusted | $ | 5,346 | $ | 5,590 | $ | 5,626 | $ | 5,678 | $ | 5,473 | |||||
| Efficiency Ratio - GAAP | 69.0 | % | 66.5 | % | 67.8 | % | 71.0 | % | 65.8 | % | |||||
| Efficiency Ratio - Adjusted | 58.3 | 56.0 | 57.9 | 56.1 | 56.9 |
(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.
Truist Financial Corporation 17
| Quarter Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | |||||||||||
| (Dollars in millions) | 2022 | 2021 | 2021 | 2021 | 2021 | ||||||||||
| Return on Average Tangible Common Shareholders’ Equity (1) | |||||||||||||||
| Net income available to common shareholders | $ | 1,327 | $ | 1,524 | $ | 1,616 | $ | 1,559 | $ | 1,334 | |||||
| Plus: Amortization of intangibles, net of tax | 105 | 110 | 113 | 107 | 111 | ||||||||||
| Tangible net income available to common shareholders | $ | 1,432 | $ | 1,634 | $ | 1,729 | $ | 1,666 | $ | 1,445 | |||||
| Average common shareholders’ equity | $ | 60,117 | $ | 61,807 | $ | 62,680 | $ | 61,709 | $ | 62,252 | |||||
| Less: Average intangible assets, net of deferred taxes | 28,905 | 27,523 | 27,149 | 26,366 | 26,535 | ||||||||||
| Average tangible common shareholders’ equity | $ | 31,212 | $ | 34,284 | $ | 35,531 | $ | 35,343 | $ | 35,717 | |||||
| Return on average common shareholders’ equity | 9.0 | % | 9.8 | % | 10.2 | % | 10.1 | % | 8.7 | % | |||||
| Return on average tangible common shareholders’ equity | 18.6 | 18.9 | 19.3 | 18.9 | 16.4 |
(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 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||
| (Dollars in millions, except per share data) | 2022 | 2021 | 2021 | 2021 | 2021 | |||||
| Diluted EPS (1) | ||||||||||
| Net income available to common shareholders - GAAP | $ | 1,327 | $ | 1,524 | $ | 1,616 | $ | 1,559 | $ | 1,334 |
| Merger-related and restructuring charges | 166 | 163 | 132 | 228 | 108 | |||||
| Securities (gains) losses | 53 | — | — | — | — | |||||
| Loss (gain) on early extinguishment of debt | — | — | — | (1) | (2) | |||||
| Incremental operating expenses related to the merger | 155 | 165 | 147 | 146 | 134 | |||||
| Charitable contribution | — | — | — | 153 | — | |||||
| Professional fee accrual | — | — | 23 | — | — | |||||
| Acceleration for cash flow hedge unwind | — | — | — | — | 28 | |||||
| Gain on redemption of noncontrolling equity interest | (57) | — | — | — | — | |||||
| Net income available to common shareholders - adjusted | $ | 1,644 | $ | 1,852 | $ | 1,918 | $ | 2,085 | $ | 1,602 |
| Weighted average shares outstanding - diluted | 1,341,563 | 1,343,029 | 1,346,854 | 1,349,492 | 1,358,932 | |||||
| Diluted EPS - GAAP | $ | 0.99 | $ | 1.13 | $ | 1.20 | $ | 1.16 | $ | 0.98 |
| Diluted EPS - adjusted | 1.23 | 1.38 | 1.42 | 1.55 | 1.18 |
(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.
18 Truist Financial Corporation
ex993-earningsdeck1q22
First Quarter 2022 Earnings Conference Call Bill Rogers – Chairman & CEO Daryl Bible – CFO April 19, 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, 2021 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 climate, 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, including as a result of the military conflict between Russia and Ukraine, 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 teammates, 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, which have increased in frequency following the Russian invasion of Ukraine, 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. Adjusted Operating Leverage - The adjusted operating leverage 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 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.
4
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 – Achieved 114% of prorated goal for the $60 billion 3 year 2020-2022 Community Benefits Plan commitment1 – Truist Foundation launched Inspire Awards, a pitch competition open to nonprofits supporting Black, Indigenous, and people of color (BIPOC) and women-owned small businesses to plan, market, and grow their businesses – Truist Foundation awarded a $10 million grant to Connect Humanity, a nonprofit focused on advancing digital equity among historically marginalized communities – Recognized as one of Fortune Magazine’s “Most Admired Companies” – Earned perfect 100 score from the Human Rights Campaign Foundation on its Corporate Equality Index, and designated as “Best Places to Work for LGBTQ Equality” – Completed the largest phase of the integration, transitioning ~7 million clients to the Truist ecosystem and rebranding 6,000 signs to Truist; continue to actively support clients through the transition – Unveiled Truist One Banking, a first-of-its-kind approach to the checking account experience with no overdraft fees and other solutions to help clients achieve financial success – 16.2% of senior leadership roles are held by ethnically diverse teammates, above our 2023 goal of 15%; with continued aspirations for growth in this area – Truist welcomed back remaining teammates to on-site work throughout March, with flexibility – Introduced plans to launch an Employee Stock Purchase program later this year; strengthening an already industry leading benefits program (pension, 401(k), health & wellness, etc.) – Announced plans to achieve net zero greenhouse gas emissions by 2050, furthering aspiration to support Truist’s, and our clients’, transition to a low-carbon economy – Published 2021 Social Bond Impact Report, outlining investments made as a result of the social bond issued in March 2021—including 267 affordable housing developments across 15 states – Joined with the Risk Management Association (RMA) & 18 peer banks to form the RMA Climate Risk Consortium, to develop standards for banks to integrate climate risk management throughout their operations 1 As of 1/31/22
Financial Results
7 Selected items affecting 1Q22 results Item ($ MM, except per share impact) Pre-Tax After-Tax Diluted EPS Impact Merger-related and restructuring charges ($216) ($166) ($0.12) Incremental operating expenses related to the merger ($202) ($155) ($0.12) Securities gains / (losses)1 ($69) ($53) ($0.04) Gain on redemption of noncontrolling equity interest related to the acquisition of certain merchant services relationships1 $74 $57 $0.04 See non-GAAP reconciliations in the appendix Diluted EPS impact for individual items may not foot to difference between GAAP diluted and adjusted diluted EPS due to rounding 1 See page 18 for additional detail
8 1Q22 performance highlights Summary Income Statement ($ MM) Commentary Earnings and profitability – Solid financial results, even in volatile market conditions – $1.6 billion of adjusted net income ($1.23 per share) and adjusted ROTCE of 22.6% – Adjusted revenues declined 4.4% sequentially – reflects challenging market conditions for investment banking/mortgage and seasonality – Adjusted expenses slightly lower as seasonal factors offset by lower incentive compensation – 460 bps YoY negative GAAP operating leverage; adjusted YoY negative operating leverage was 240 bps – Continue to target positive operating leverage for full year 2022 (GAAP and adjusted) – Asset quality remains excellent: 25 bps of NCO Balance sheet, capital, and liquidity – Solid sequential organic loan (ex PPP) and deposit growth of 1.2% and 1.0%, respectively – Acquired Kensington Vanguard and certain merchant services relationships – Capital (9.4% CET1) and liquidity (111% LCR) remain very strong Completed largest merger integrations – Heritage SunTrust clients and branches converted to Truist ecosystem – Retail, Business, and Wealth digital migrations are complete – Branches and corporate offices rebranded – Mortgage servicing conversion complete Change vs. 1Q22 4Q21 1Q21 GAAP / Unadjusted Revenue $5,351 (4.3)% (2.9)% Expense $3,674 (0.7)% 1.8% PPNR $1,677 (11.3)% (11.7)% Provision for credit losses $(95) (7.8)% NM Net income available to common $1,327 (12.9)% (0.5)% Diluted EPS $0.99 (12.4)% 1.0% ROTCE 18.6% (30) bps 220 bps Efficiency ratio 69.0% 250 bps 320 bps Adjusted Revenue $5,346 (4.4)% (2.3)% Expense $3,119 (0.4)% 0.1% PPNR $2,227 (9.4)% (5.5)% Net income available to common $1,644 (11.2)% 2.6% Diluted EPS $1.23 (10.9)% 4.2% ROTCE 22.6% — 320 bps Efficiency ratio 58.3% 230 bps 140 bps Note: All data points are taxable-equivalent, where applicable; see non-GAAP reconciliations in the appendix 1 See page 18 for additional detail
9 Truist Digital is already delivering enhanced benefits to our clients New to heritage BB&T New to heritage SunTrust New at Truist Fraud inspector for Business Business wires mobile Personal Financial Management One View mobile app with entitlement management and payment approvals Truist Insights Truist Assist Coming soon! Identify fraudulent items in the previous day’s cleared transactions and initiate a return request for suspected fraudulent items Business owners and entitled users can initiate a wire transfer View linked accounts and investments, categorize and track spending and income, and create budgets and goals CFOs and Treasurers can give user permissions and entitlements at a granular level; can approve ACH and wire transactions on the go Analyzes retail clients’ historical transaction activity providing proactive, automated financial guidance to help clients spend, save, and live better A virtual assistant that understands client questions, delivers answers, and completes tasks on behalf of the clients using everyday language
10 $173.8 $170.5 $165.8 $164.5 $167.5 4.11% 4.03% 3.92% 3.81% 3.70% 3.65% 3.61% 3.58% 3.49% 3.42% Commercial LHFI ($ B) Consumer & Card LHFI ($ B) Loans HFI yield (%) Loans HFI yield ex. PAA (%) 1Q21 2Q21 3Q21 4Q21 1Q22 – Average loans down 2.0%; ex PPP, up 0.8% – C&I, ex PPP and MWL, up 7.1%, reflecting increased production and higher utilization – MWL portfolio down $2.7 billion, or 51% – CRE/commercial construction, down $4.2 billion, or 13% – Residential mortgage up 4.7% as a result of aforementioned factors – Average loans up 0.8%; ex PPP, up 1.2% – C&I, ex PPP and mortgage warehouse lending (MWL), up 5.1% due to broad- based growth across most industry verticals and geographies – MWL down $1.4 billion, or 34%, given lower industry refi volumes (C&I) – CRE/commercial construction down $1.1 billion, or 3.8% – Residential mortgage up 1.7% as a result of strategy to portfolio certain correspondent production and slower prepay speeds – Consumer and card, ex mortgage, down 2.0%, primarily due to auto market challenges, and continued declines in government guaranteed student loan portfolio – EOP loans, ex PPP, up 0.5% – Led by C&I, ex PPP and MWL, up 3.2% – MWL down $1.0 billion, or 26% – See appendix for additional details on PPP Average loans & leases HFI 5-Quarter Trend vs. Prior Quarter vs. Year-over-Year $121.1$121.8$120.4$118.0$120.9 $294.7 $288.6 $286.2 $286.3 $288.6 up 1.2% (ex PPP)
11 Average deposits $383.2 $396.3 $402.7 $411.0 $415.2 0.05% 0.04% 0.03% 0.03% 0.03% Total deposits ($ B) Total deposit cost (%) 1Q21 2Q21 3Q21 4Q21 1Q22 5-Quarter Trend vs. Prior Quarter vs. Year-over-Year – Average deposits increased $4.3 billion, or 1.0% – Money market and savings increased 2.8% – Interest checking increased 1.5% – Total cost of deposits was 3 bps (stable to prior quarter) – Cost of interest bearing deposits was 5 bps (stable to prior quarter) – Average deposits increased $32 billion, or 8.4%, due to the ongoing impacts of government stimulus
12 Net interest income & net interest margin 5-Quarter Trend vs. Prior Quarter vs. Year-over-Year $3,313 $3,273 $3,261 $3,267 $3,209 $2,973 $2,965 $3,006 $3,030 $2,999 $340 $308 $255 $237 $210 3.01% 2.88% 2.81% 2.76% 2.76% 2.69% 2.60% 2.58% 2.55% 2.57% Core net interest income TE ($ MM) Purchase accounting accretion ($ MM) Reported NIM (%) Core NIM (%) 1Q21 2Q21 3Q21 4Q21 1Q22 – Net interest income declined 1.8% as a result of 2 fewer days, lower purchase accounting accretion (PAA), and lower PPP fees; partially offset by lower premium amortization – NIM was stable at 2.76% – Core NIM increased 2 bps as a result of higher investment portfolio yields (lower premium amortization) – PAA contribution declined by 2 bps – Net interest income declined 3.1% due to lower PAA and 2.0% decline in average loans; partially offset by 25% increase in securities portfolio as a result of deposit growth – NIM declined 25 bps – Core NIM declined 12 bps due to higher levels of liquidity, lower PPP fees, and ongoing impact of low rate environment – PAA contribution declined by 13 bps 1 1 See non-GAAP reconciliations in the appendix
13 Year 1 Net Interest Income Sensitivity1 Commentary Interest rate sensitivity – 4.3% asset sensitivity in +100 bps ramp – ~80% of asset sensitivity from short-end of the curve – One 25 bps 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 – Vast majority of current exposure is to 1ML; SOFR exposure increasing by the month – 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 upside to higher rates, with downside protection 1.9% 3.3% 4.3% 7.2% 2.1% 4.2% 7.9% 13.6% Ramp Shock Up 25 Up 50 Up 100 Up 200
14 Noninterest income 5-Quarter Trend vs. Prior Quarter vs. Year-over-Year $2,197 $2,405 $2,365 $2,323 $2,142 40.1% 42.6% 42.2% 41.7% 40.2% Noninterest income ($ MM) Fee income ratio (%) 1Q21 2Q21 3Q21 4Q21 1Q22 – Noninterest income declined $181 million, or 7.8% – Investment banking & trading declined $116 million, or 31%, driven by volatile market conditions that impacted M&A, high yield / leveraged finance, and equity – Residential mortgage income declined $70 million due to lower gain-on- sale margins and lower refinance activity as a result of higher rate environment – Card & payment related fees and service charges declined $33 million, primarily due to seasonality – Other income, excluding merchant acquisition gain and NQDCP impacts, up $31 million due to prior quarter valuation adjustment on Visa derivative (see table below) – 1Q22 included $74 million gain on redemption of noncontrolling interest; also realized $69 million loss on securities repositioning – Noninterest income declined $55 million, or 2.5% – Investment banking & trading declined 25% due to lower high yield bond and equity originations, in addition to lower core trading income – Partially offset by strong 16% growth in insurance revenue (7.2% organic growth and acquisitions) – Other income, excluding certain one-time gains and NQDCP impacts, increased $56 million primarily due to higher SBIC income (see table below) Other income detail 1Q21 4Q21 1Q22 Other income (ex. items below) $ 15 $ 40 $ 71 NQDCP impact 23 (7) (44) Gain on selected transactions 37 0 74 Other income $ 75 $ 33 $ 101
15 – Noninterest expense decreased 0.7% – 1Q22 includes $418 million of merger costs1 compared to $427 million in 4Q21 – 1Q costs connected to new Truist signage, integration-related consulting costs, branch closures/impairments, and data center decommissioning – Adjusted noninterest expense was $3.1 billion, down 0.4% – Personnel expense2 declined by $10 million, as a result of lower incentive compensation, impacts from the nonqualified plan, partially offset by seasonally higher expenses (FICA, 401(k), equity grants) $3,117 $3,182 $3,257 $3,131 $3,119 65.8% 71.0% 67.8% 66.5% 69.0% 56.9% 56.1% 57.9% 56.0% 58.3% Adjusted noninterest expense Merger costs Amortization Other significant items GAAP efficiency ratio Adjusted efficiency ratio 1Q21 2Q21 3Q21 4Q21 1Q22 – Noninterest expense up 1.8% – Merger costs1 increased $102 million due to aforementioned factors – Adjusted noninterest expense stable – Personnel expense2 declined by $73 million, or 3.5% as a result of impacts from the nonqualified plan, lower performance-driven incentives, and lower FTEs – Net occupancy costs2 down $21 million, or 10%, due to ongoing real estate rationalization – Software and marketing costs up $40 million due to ongoing investments in technology and branding – Other expense2 increased $53 million primarily as a result of higher operational losses 5-Quarter Trend ($ MM) vs. Prior Quarter vs. Year-over-Year $574$685 1 Includes merger-related and restructuring charges and incremental operating expenses related to the merger 2 Excludes incremental operating expenses related to the merger Noninterest expense $144 $142 $145 $143 $137 $418$427$363$487$316 $36 $200 $30 $3,610 $4,011 $3,795 $3,700 $3,674 1
16 Asset quality 4.5x 9.0x 8.8x $421Net Charge-Offs Provision / (Benefit) for Credit Losses Nonperforming Loans / LHFI ALLL $238 $142 $135 $182 $178 0.33% 0.20% 0.19% 0.25% 0.25% NCO NCO ratio 1Q21 2Q21 3Q21 4Q21 1Q22 1Q21 2Q21 3Q21 4Q21 1Q22 0.40% 0.37% 0.38% 0.38% 0.36% 1Q21 2Q21 3Q21 4Q21 1Q22 $5,662 $5,121 $4,702 $4,435 $4,170 1.94% 1.79% 1.65% 1.53% 1.44% ALLL ALLL ratio ALLL / NCO 1Q21 2Q21 3Q21 4Q21 1Q22 Continued favorable credit environment Provision benefit reflects strong credit performance and solid economic conditions ALLL ratio declined 9 bps (coverage remains very strong) Asset quality remains excellent, reflecting our prudent risk culture, diverse portfolio, and solid economic conditions Leading indicators (NPL, early stage delinquencies) remain strong $48 ($434) ($324) ($103) ($95) 5.9X 9.0X 8.8X 6.1X 5.8X
17 Capital and liquidity position Commentary Capital and liquidity position 10.1% 9.6% 9.4% Common Equity Tier 1 Tier 1 Total 1Q21 4Q21 1Q22 Current quarter regulatory capital information is preliminary 111% 114% 111% $80.2 $86.7 $83.9 LCR HQLA ($ B) 1Q21 4Q21 1Q22 13.9% Capital position – CET1 ratio was 9.4%, down 20 bps from 12/31 – Decline driven by acquisitions of Kensington Vanguard and certain merchant services relationships, RWA growth, and the impact from the phase in of the CECL transition relief – Dividend of $0.48 per share – Submitted 2022 Capital Plan to Federal Reserve Board on April 5 – Transferred ~40% of securities portfolio from AFS to HTM in 1Q22 to mitigate AOCI risk / volatility – Overall, continue to maintain a very strong capital position, particularly in the context of risk and profitability profile Liquidity position – Average LCR for 1Q22 was 111% – Average loan-to-deposit ratio of 70% 12.0% 14.3% 13.2% 11.3% 11.0% 13.0%
18 13.9% Kensington Vanguard acquisition Merchant services acquisition Securities repositioning Description – Significantly expands Truist’s presence in the title insurance market – Adds to capabilities in larger and more complex commercial transactions – Closed March 1, 2022 – Terminated merchant acquiring revenue share alliance and purchased a significant portion of the alliance’s merchant accounts – Positions Truist to control more of the end-to- end client experience when serving merchant clients – Closed March 4, 2022 – Sold ~$3.2B of securities yielding ~2.10% Initial impact – 8 bps impact to CET1 – 5 bps impact to CET1 (inclusive of the $74 million gain) – Pre-tax loss of $69 million – 1 bp impact to CET1 Ongoing financial impact – ~$115 million annual revenue – ~30% EBITDA margin (after year 1) – Estimated ~20% IRR – ~$40 million increased annual revenue – ~$15 million increased annual cash expenses – Estimated ~25% IRR – Reinvestment yield of ~3.20% – ~2 year payback 1Q22 selected transactions
Merger Integration Update
20 Integration is substantially complete Truist Securities conversion (3Q20) Wealth brokerage (1Q21) and Wealth trust (2Q21) conversions Began client migration to new digital experience (3Q21) Retail mortgage origination ecosystem (3Q21) Integrated commercial lending platform and migrated hBBT clients to Truist ecosystem (4Q21) Migrated ~7MM hSTI clients to Truist ecosystem 2,000 branches converted and ~400 branches closed 6,000 new signs Completed client digital migration and retired SunTrust.com Mortgage servicing conversion Teller platform migration (2Q-4Q ‘22) Decommissioning – 6 3 data centers – ~30% reduction in applications (2Q-4Q ‘22) Progress so far... ...What’s left? February – March ‘22
21 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 14% at 1Q22 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% 1Q22–11.9% Cumulative closures through: 1Q21–374 2Q21–374 3Q21–413 4Q21–414 1Q22–822 Cumulative closures through: 1Q21–3.5MM 2Q21–3.8MM 3Q21–4.3MM 4Q21–4.6MM 1Q22–5.0MM C os t s av es In ve st m en ts Includes normal attrition and reductions in force Includes LightStream expansion, digital payments, digital end-to-end onboarding, and digital treasury Includes digital marketing, hyper-personalization, and CRM capabilities and teams Includes pension, revenue producers in fee businesses (e.g. CIB, wealth, and insurance), and merit Includes best of both technology, modernization, increased utilization of the cloud, and NextGen cyber capabilities
22 2020 2021 2022 2023 Pandemic Executional excellence Transformation and growth Integration Well Positioned for 2022 – Finalize the merger – February conversion (complete) – Eliminate merger-related charges and incremental operating expenses by year-end – Achieve cost saves objectives – Shift from integration to executional excellence, transformation, and growth – Realize significant benefit from becoming One Truist (systems, digital, brand) – Client experience enhancements – Continue to target positive operating leverage in 2022 Shifting from integration focus to executional excellence, transformation, and growth
23 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 $1.6 billion of net cost savings – ROATCE: Low 20s – ER: Low 50s – Disciplined risk and financial management; focus on diversity – Strong risk adjusted capital position
Appendix
A-1 Consumer Banking & Wealth Income statement ($ MM) 1Q22 Linked Qtr. Change Like Qtr. Change Net interest income $2,178 ($47) $194 Provision for credit losses 74 15 (26) Noninterest income 950 (42) 30 Noninterest expense 1,919 (31) 4 Segment net income 864 (101) 183 Balance Sheet ($ B) Average loans(1) $131.7 ($1.7) ($1.8) Average deposits 253.4 4.3 22.6 Other Key Metrics Mortgages serviced for others ($ B)(2) $195.7 ($0.3) $15.9 Wealth management AUM ($ B)(2) 196.5 (13.1) 5.3 Branches 2,112 (405) (444) (1) Excludes loans held for sale (2) Amount reported reflects end of period balance Represents performance for Retail and Small Business Banking, Wealth, Mortgage Banking, Dealer Retail Services, and National Consumer Finance & Payments – Segment net income of $864 million, down $101 million from the prior quarter – Sequential decline in net interest income driven by lower average loans, reduced PAA income, and fewer days, partially offset by higher funding credit for deposits – Loan balance decline vs. 4Q21 primarily driven by lower mortgage warehouse and indirect auto loans, partially offset by increased residential mortgage balances – Deposits continue to grow (up 2% vs. 4Q21) driven by tax refunds and other seasonal impacts – Provision for credit losses relatively stable vs. 4Q21, and better YoY due to improved economic environment – Fee income down 4% vs. 4Q21 due in large part to a decline in residential mortgage income, deposit service charges and card fees, partially offset by an increase in other income – Mortgage banking income down 44%, driven primarily by lower gain on sale margins and production volume – Deposit service charges down 10% primarily due to seasonality – Card and payment related fees down 5% due to seasonality – Other income increased due to the gain on the redemption of noncontrolling equity interest – Strong expense discipline drove a 2% reduction in expenses QoQ despite an increase in operational losses – Branch count down 16% vs. 4Q21 due to MOE consolidations Metrics Commentary
A-2 Corporate & Commercial Banking Income Statement ($ MM) 1Q22 Linked Qtr. Change Like Qtr. Change Net interest income $1,249 ($46) ($31) Provision for credit losses (150) 33 (115) Noninterest income 619 (171) (73) Noninterest expense 757 (57) (18) Segment net income 985 (177) 19 Balance Sheet ($ B) Average loans(1) $154.5 $4.5 ($3.7) Average deposits 152.0 (3.1) 7.8 – Net income of $985 million decreased $177 million or 15% vs. 4Q21 driven by weaker fee performance and lower NII partially offset by lower expenses – NII of $1.2 billion decreased $46 million as a result of lower loan spreads and a reduction in PPP fees, partially offset by higher loan balances – Noninterest income of $619 million decreased $171 million, or 22% – $117 million lower investment banking and trading fees vs. 4Q21 led by lower M&A fees, loan syndications, high yield bonds and equity originations – Operating lease fee income lower by $13 million partially due to PAA – $13 million lower commercial mortgage origination and servicing revenue (seasonal) – $14 million lower SBIC and solar power investment income – Total expenses of $757 million down $57 million with lower variable incentives and an ongoing focus on efficiencies – Average loans of $154.5 billion increased $4.5 billion or 3.0% due to broad based loan growth across multiple industry groups and higher revolver utilization – Average deposits of $152 billion decreased $3.1 billion or 2.0% primarily due to seasonality of municipal deposits collected in 4Q (1) Excludes loans held for sale Represents performance for Commercial Community Banking, Corporate & Investment Banking, and CRE & Grandbridge CommentaryMetrics
A-3 Insurance Holdings Income statement ($ MM) 1Q22 Linked Qtr. Change Like Qtr. Change Net interest income $24 $1 $— Noninterest income 737 56 104 Total revenue 761 57 104 Noninterest expense 560 13 80 Segment net income 152 26 19 Performance ($ MM) Y-o-Y organic revenue growth 7.2% (3.6%) 0.8% Net acquired revenue 58 (4) 30 Performance based commissions 17 (10) 1 Adjusted EBITDA(1) 240 45 32 Adjusted EBITDA margin(1) 31.6% 3.9% (0.1%) – Truist Insurance Holdings produced another strong quarter, driven by solid new business growth, strong IRM performance and outstanding execution from our teammates in helping our clients navigate a challenging market environment – Market conditions – Prior year market tailwinds remain – rising rates, exposure growth, GDP growth, augmented by inflationary pressures and tightening labor markets – Seeing consistent P&C price increases, comparable to 2021 – Revenue increased 16% vs. 1Q21 – Organic revenue growth was 7.2% – New business was up 11% – Acquired revenue of $58 million – Revenue up 8% vs. 4Q21 primarily due to revenue seasonality in employee benefit commissions – Expenses were up 17% vs. 1Q21 – Increase driven by higher performance-based incentive expense, higher travel & entertainment expense and increase from acquisitions – Closed acquisition of Kensington Vanguard (KV) March 1, and created Truist Insurance Holdings Services Division – KV projected to add ~$115 million to noninterest income and ~$30 million in EBITDA over first 12 months (1) EBITDA is a non-GAAP measurement of operating profitability that is calculated by adding back interest, taxes, depreciation and amortization to net income. Truist’s management also adds back merger- related and restructuring charges, incremental operating expenses related to the merger, and other selected items. Truist’s management uses this measure in its analysis of the Corporation’s Insurance Holdings segment. Truist’s management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. See non-GAAP reconciliations included in the attached Appendix. Represents performance for Truist Insurance Holdings’ Retail, Wholesale and Services Divisions Metrics Commentary
A-4 Purchase accounting summary(1) ($ MM) As of/For the Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Loans and Leases(2) Beginning balance unamortized fair value mark $ (1,323) $ (1,540) $ (1,777) $ (2,067) $ (2,395) Accretion 191 217 233 285 316 Purchase accounting adjustments and other activity 13 — 4 5 12 Ending balance $ (1,119) $ (1,323) $ (1,540) $ (1,777) $ (2,067) Core deposit and other intangible assets Beginning balance $ 3,408 $ 2,930 $ 2,665 $ 2,825 $ 2,984 Additions - acquisitions 430 647 418 — 14 Amortization (137) (143) (145) (142) (144) Amortization in net occupancy expense (8) (3) (4) (3) (3) Purchase accounting adjustments and other activity — (23) (4) (15) (26) Ending balance $ 3,693 $ 3,408 $ 2,930 $ 2,665 $ 2,825 Deposits(3) Beginning balance unamortized fair value mark $ (7) $ (9) $ (12) $ (15) $ (19) Amortization 2 2 3 3 4 Ending balance $ (5) $ (7) $ (9) $ (12) $ (15) Long-Term Debt(3) Beginning balance unamortized fair value mark $ (139) $ (157) $ (176) $ (196) $ (216) Amortization 17 18 19 20 20 Ending balance $ (122) $ (139) $ (157) $ (176) $ (196) (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 210 137 216 202 2Q22E 170 150 60 150 3Q22E 160 140 10 90 4Q22E 140 140 30 50 1Q23E 130 130 No costs for the BBT / STI MOE No longer applicable and will not be in expense base 2Q23E 120 120 3Q23E 100 120 4Q23E 100 120 FY 2021 $1,140 $574 $822 $771 FY 2022E 680 567 316 492 FY 2023E 450 490 N/A N/A ($ MM) Amounts for future periods are based on Company projections
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 1Q22 34 8.5 1.6 1.2 2 FY 2020 $241 3.0% $8.2 $10.8 0 FY 2021 395 6.1 6.5 2.1 5
A-7 2Q22–1Q23 preferred stock projected dividends Estimates assume forward curve for LIBOR as of 4/1/22. Actual interest rates could vary significantly causing dividend payments to differ from the estimates shown above. Table may not foot due to rounding Truist Preferred Outstandings ($ MM) 2Q22 3Q22 4Q22 1Q23 Series I $173 $1.8 $1.8 $1.7 $1.7 Series J $102 1.0 1.0 1.0 1.0 Series L $750 18.9 8.7 9.8 10.8 Series M $500 12.8 — 12.8 — Series N $1,700 — 40.8 — 40.8 Series O $575 7.5 7.5 7.5 7.5 Series P $1,000 24.8 — 24.8 — Series Q $1,000 — 25.5 — 25.5 Series R $925 11.0 11.0 11.0 11.0 Estimated dividends based on projected interest rates and amounts outstanding ($ MM) $77.8 $96.4 $68.7 $98.3
Non-GAAP Reconciliations
A-9 Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Net income available to common shareholders - GAAP $ 1,327 $ 1,524 $ 1,616 $ 1,559 $ 1,334 Merger-related and restructuring charges 166 163 132 228 108 Securities (gains) losses 53 — — — — Loss (gain) on early extinguishment of debt — — — (1) (2) Incremental operating expenses related to the merger 155 165 147 146 134 Charitable contribution — — — 153 — Professional fee accrual — — 23 — — Acceleration for cash flow hedge unwind — — — — 28 Gain on redemption of noncontrolling equity interest (57) — — — — Net income available to common shareholders - adjusted $ 1,644 $ 1,852 $ 1,918 $ 2,085 $ 1,602 Weighted average shares outstanding - diluted 1,341,563 1,343,029 1,346,854 1,349,492 1,358,932 Diluted EPS - GAAP $ 0.99 $ 1.13 $ 1.20 $ 1.16 $ 0.98 Diluted EPS - adjusted(1) 1.23 1.38 1.42 1.55 1.18 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-10 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 March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Efficiency ratio numerator - noninterest expense - GAAP $ 3,674 $ 3,700 $ 3,795 $ 4,011 $ 3,610 Merger-related and restructuring charges, net (216) (212) (172) (297) (141) Gain (loss) on early extinguishment of debt — 1 — — 3 Incremental operating expense related to the merger (202) (215) (191) (190) (175) Amortization of intangibles (137) (143) (145) (142) (144) Charitable contribution — — — (200) — Professional fee accrual — — (30) — — Acceleration for cash flow hedge unwind — — — — (36) Efficiency ratio numerator - adjusted $ 3,119 $ 3,131 $ 3,257 $ 3,182 $ 3,117 Efficiency ratio denominator - revenue(1) - GAAP $ 5,325 $ 5,566 $ 5,598 $ 5,650 $ 5,482 Taxable equivalent adjustment 26 24 28 28 28 Securities (gains) losses 69 — — — — Gain on redemption of noncontrolling equity interest (74) — — — — Gains on divestiture of certain businesses — — — — (37) Efficiency ratio denominator - adjusted $ 5,346 $ 5,590 $ 5,626 $ 5,678 $ 5,473 Efficiency ratio - GAAP 69.0 % 66.5 % 67.8 % 71.0 % 65.8 % Efficiency ratio - adjusted(2) 58.3 56.0 57.9 56.1 56.9
A-11 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 March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Net income $ 1,416 $ 1,602 $ 1,704 $ 1,658 $ 1,473 Provision for credit losses (95) (103) (324) (434) 48 Provision for income taxes 330 367 423 415 351 Taxable-equivalent adjustment 26 24 28 28 28 Pre-provision net revenue(1)(2) $ 1,677 $ 1,890 $ 1,831 $ 1,667 $ 1,900 PPNR $ 1,677 $ 1,890 $ 1,831 $ 1,667 $ 1,900 Merger-related and restructuring charges, net 216 212 172 297 141 Gain (loss) on early extinguishment of debt — (1) — — (3) Incremental operating expense related to the merger 202 215 191 190 175 Amortization of intangibles 137 143 145 142 144 Charitable contribution — — — 200 — Professional fee accrual — — 30 — — Acceleration for cash flow hedge unwind — — — — 36 Securities (gains) losses 69 — — — — Gain on redemption of noncontrolling equity interest (74) — — — — Gains on divestiture of certain businesses — — — — (37) Pre-provision net revenue - adjusted(1)(2) $ 2,227 $ 2,459 $ 2,369 $ 2,496 $ 2,356
A-12 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 March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Net income - GAAP $ 1,416 $ 1,602 $ 1,704 $ 1,658 $ 1,473 Merger-related and restructuring charges 166 163 132 228 108 Securities (gains) losses 53 — — — — Loss (gain) on early extinguishment of debt — — — (1) (2) Incremental operating expenses related to the merger 155 165 147 146 134 Charitable contribution — — — 153 — Professional fee accrual — — 23 — — Acceleration for cash flow hedge unwind — — — — 28 Gain on redemption of noncontrolling equity interest (57) — — — — Numerator - adjusted(1) $ 1,733 $ 1,930 $ 2,006 $ 2,184 $ 1,741 Average assets $ 535,981 $ 534,911 $ 526,685 $ 518,774 $ 508,833 Return on average assets - GAAP 1.07 % 1.19 % 1.28 % 1.28 % 1.17 % Return on average assets - adjusted 1.31 1.43 1.51 1.69 1.39
A-13 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 March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Common shareholders' equity $ 58,348 $ 62,598 $ 62,227 $ 61,663 $ 60,752 Less: Intangible assets, net of deferred taxes 29,229 28,772 27,066 26,296 26,413 Tangible common shareholders' equity(1) $ 29,119 $ 33,826 $ 35,161 $ 35,367 $ 34,339 Outstanding shares at end of period 1,331,414 1,327,818 1,334,892 1,334,770 1,344,845 Common shareholders' equity per common share $ 43.82 $ 47.14 $ 46.62 $ 46.20 $ 45.17 Tangible common shareholders' equity per common share(1) 21.87 25.47 26.34 26.50 25.53 Net income available to common shareholders $ 1,327 $ 1,524 $ 1,616 $ 1,559 $ 1,334 Plus amortization of intangibles, net of tax 105 110 113 107 111 Tangible net income available to common shareholders(1) $ 1,432 $ 1,634 $ 1,729 $ 1,666 $ 1,445 Average common shareholders' equity $ 60,117 $ 61,807 $ 62,680 $ 61,709 $ 62,252 Less: Average intangible assets, net of deferred taxes 28,905 27,523 27,149 26,366 26,535 Average tangible common shareholders' equity(1) $ 31,212 $ 34,284 $ 35,531 $ 35,343 $ 35,717 Return on average common shareholders' equity 9.0 % 9.8 % 10.2 % 10.1 % 8.7 % Return on average tangible common shareholders' equity(1) 18.6 18.9 19.3 18.9 16.4
A-14 Non-GAAP reconciliations Return on average common equity and average tangible common equity ($ MM) As of / Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Net income available to common shareholders - GAAP $ 1,327 $ 1,524 $ 1,616 $ 1,559 $ 1,334 Merger-related and restructuring charges 166 163 132 228 108 Securities (gains) losses 53 — — — — Loss (gain) on early extinguishment of debt — — — (1) (2) Incremental operating expenses related to the merger 155 165 147 146 134 Charitable contribution — — — 153 — Professional fee accrual — — 23 — — Acceleration for cash flow hedge unwind — — — — 28 Gain on redemption of noncontrolling equity interest (57) — — — — Net income available to common shareholders - adjusted 1,644 1,852 1,918 2,085 1,602 Amortization 105 110 113 107 111 Net income available to common shareholders - tangible adjusted $ 1,749 $ 1,962 $ 2,031 $ 2,192 $ 1,713 Average common shareholders’ equity $ 60,117 $ 61,807 $ 62,680 $ 61,709 $ 62,252 Plus: Estimated impact of adjustments on denominator 158 164 151 263 134 Average common shareholders' equity - adjusted 60,275 61,971 62,831 61,972 62,386 Less: Average intangible assets 28,905 27,523 27,149 26,366 26,535 Average tangible common shareholders' equity - adjusted $ 31,370 $ 34,448 $ 35,682 $ 35,606 $ 35,851 Return on average common shareholders equity - GAAP 9.0 % 9.8 % 10.2 % 10.1 % 8.7 % Return on average common shareholders equity - adjusted 11.1 % 11.9 % 12.1 % 13.5 % 10.4 % Return on average tangible common shareholders equity - adjusted 22.6 22.6 22.6 24.7 19.4 (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-15 Non-GAAP Reconciliations Operating Leverage(1) ($ MM) Quarter Ended % Growth 1Q22 vs. March 31 Dec. 31 March 31 2022 2021 2021 4Q21 1Q21 Revenue(2) - GAAP $ 5,325 $ 5,566 $ 5,482 (4.3) % (2.9) % Taxable equivalent adjustment 26 24 28 Securities (gains) losses 69 — — Gain on redemption of noncontrolling equity interest (74) — — Gains on divestiture of certain businesses — — (37) Revenue(2) - adjusted $ 5,346 $ 5,590 $ 5,473 (4.4) % (2.3) % Noninterest expense - GAAP $ 3,674 $ 3,700 $ 3,610 (0.7) % 1.7 % Merger-related and restructuring charges, net (216) (212) (141) Gain (loss) on early extinguishment of debt — 1 3 Incremental operating expense related to the merger (202) (215) (175) Amortization of intangibles (137) (143) (144) Acceleration for cash flow hedge unwind — — (36) Noninterest expense - adjusted $ 3,119 $ 3,131 $ 3,117 (0.4) % 0.1 % Operating leverage - GAAP (3.6) % (4.6) % Operating leverage - adjusted(3) (4.0) % (2.4) % (1) Operating leverage is defined as percentage growth in revenue less percentage growth in noninterest expense. (2) Revenue is defined as net interest income plus noninterest income. (3) The adjusted operating leverage 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.
A-16 Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Net interest income - GAAP $ 3,183 $ 3,243 $ 3,233 $ 3,245 $ 3,285 Taxable-equivalent adjustment 26 24 28 28 28 Net interest income - taxable-equivalent 3,209 3,267 3,261 3,273 3,313 Accretion of mark on acquired loans (191) (217) (233) (285) (316) Accretion of mark on acquired liabilities (19) (20) (22) (23) (24) Net interest income - core(1) $ 2,999 $ 3,030 $ 3,006 $ 2,965 $ 2,973 Average earning assets - GAAP $ 469,940 $ 470,885 $ 461,750 $ 455,265 $ 443,946 Average balance - mark on acquired loans 1,247 1,449 1,658 1,947 2,263 Average earning assets - core(1) $ 471,187 $ 472,334 $ 463,408 $ 457,212 $ 446,209 Annualized net interest margin: Reported - taxable-equivalent 2.76 % 2.76 % 2.81 % 2.88 % 3.01 % Core(1) 2.57 2.55 2.58 2.60 2.69 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 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 March 31 Dec. 31 Sept. 30 June 30 March 31 2022 2021 2021 2021 2021 Segment net interest income $ 24 $ 23 $ 28 $ 25 $ 24 Noninterest income 737 681 652 698 633 Total revenue $ 761 $ 704 $ 680 $ 723 $ 657 Segment net income (loss) - GAAP $ 152 $ 126 $ 111 $ 159 $ 133 Provision (benefit) for income taxes 49 32 31 50 43 Depreciation & amortization 31 25 31 26 28 EBITDA 232 183 173 235 204 Merger-related and restructuring charges, net 8 8 2 13 4 Incremental operating expenses related to the merger — 4 3 — — Adjusted EBITDA(1) $ 240 $ 195 $ 178 $ 248 $ 208 Adjusted EBITDA(1) margin 31.6 % 27.7 % 26.2 % 34.3 % 31.7 %
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