Form 8-K TRUIST FINANCIAL CORP For: Apr 15
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| Contact: | ||||||||
| Investors: | Alan Greer 336.733.3021 | investors@truist.com | Aaron Reeves 336.733.2874 | investors@truist.com | ||||||
| Media: | Shelley Miller 704.692.1518 | media@truist.com | |||||||
Truist Reports First Quarter 2021 Results
Earnings of $1.3 billion, or $0.98 per diluted share
CHARLOTTE, N.C., (April 15, 2021) — Truist Financial Corporation (NYSE: TFC) today reported earnings for the first quarter of 2021.
Net income available to common shareholders was $1.3 billion, up 35.3 percent, compared to the first quarter last year. Earnings per diluted common share were $0.98, an increase of 34.2 percent compared with the same period last year. Results for the first quarter produced an annualized return on average assets (ROA) of 1.17 percent, an annualized return on average common shareholders' equity (ROCE) of 8.69 percent and an annualized return on tangible common shareholders' equity (ROTCE) of 16.40 percent.
Adjusted net income available to common shareholders was $1.6 billion, or $1.18 per diluted share, excluding merger-related and restructuring charges of $141 million ($108 million after-tax), incremental operating expenses related to the merger of $175 million ($134 million after-tax) and an acceleration of loss recognition related to certain terminated cash flow hedges of $36 million ($28 million after-tax). Adjusted results produced an annualized ROA of 1.39 percent, an annualized ROCE of 10.41 percent and an annualized ROTCE of 19.36 percent.
"Truist and our teammates have a lot to be proud of in the first quarter, including a strong financial performance and several significant milestones reflective of our purpose in action,” said Chairman and Chief Executive Officer Kelly S. King. “We advanced our ESG strategy with the issuance of our first social bond—becoming the first U.S. regional bank to do so—and became the lead investor for Greenwood, an innovative digital banking platform designed for Black and Latinx consumers and business owners. In addition, we received an ‘Outstanding’ CRA rating for our community development efforts, and continued to make great progress towards our Community Benefits Plan, after ending 2020 at 114 percent of our annual target. These achievements reflect our continued commitment to support and invest in the diverse communities we’re proud to serve.
"Adjusted net income was $1.6 billion, an increase of 42 percent compared with the first quarter last year. On a diluted per share basis, adjusted net income was $1.18 per share, also up 42 percent from last year. This growth resulted from a record performance in our insurance business, record results from investment banking and a significantly lower provision for credit losses. We also demonstrated strong expense discipline by reducing expenses. The adjusted efficiency ratio for the quarter was 56.9 percent and the adjusted return on average tangible common shareholders' equity was a strong 19.36 percent.
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"We continue to make important progress on our integration efforts, including completing the wealth brokerage transition earlier this quarter. Through our unique Integrated Relationship Management approach, we continued to deepen client relationships across our investment banking and insurance businesses, significantly increasing referral volumes.
"We were also honored to be recognized for our commitment to stand for better by the Human Rights Campaign’s Corporate Equality Index with a perfect 100 score, by ‘FORTUNE’ as one of the world’s most admired companies and as a top 50 employer by both ‘Equal Opportunity’ and ‘CAREERS & the disABLED’ magazines.”
First Quarter 2021 Performance Highlights
•Earnings per diluted common share were $0.98
–Adjusted diluted earnings per share were $1.18, up $0.35 per share compared to first quarter 2020
–ROA was 1.17 percent; adjusted ROA was 1.39 percent
–ROCE was 8.69 percent; adjusted ROCE was 10.41 percent
–ROTCE was 16.40 percent; adjusted ROTCE was 19.36 percent
•Taxable-equivalent revenue was $5.5 billion
–Fee income ratio was 40.1 percent, compared to 40.4 percent for fourth quarter 2020
–Record revenues from insurance and investment banking and trading
–Net interest margin was 3.01 percent, down seven basis points from fourth quarter 2020
–Core net interest margin was 2.69 percent, down three basis points from fourth quarter 2020
•Noninterest expense was $3.6 billion
–Noninterest expense includes $141 million of merger-related and restructuring charges and $175 million of incremental operating expenses related to the merger
–GAAP efficiency ratio was 65.8 percent, compared to 67.8 percent for fourth quarter 2020
–Adjusted efficiency ratio was 56.9 percent, compared to 55.9 percent for fourth quarter 2020
•Asset quality ratios remain stable reflecting diversification benefits of the merger and effective problem asset resolution
–Nonperforming assets were 0.25 percent of total assets, down two basis points from the fourth quarter of 2020
–Loans 90 days or more past due and still accruing were 0.71 percent of loans held for investment, up from 0.67 percent for the fourth quarter of 2020; the increase was almost entirely in government guaranteed loans
–Excluding government guaranteed loans, loans 90 days or more past due and still accruing were 0.04 percent of loans held for investment
–Net charge-offs were 0.33 percent of average loans and leases, up six basis points compared to the fourth quarter of 2020
–The allowance for loan and lease losses was 1.94 percent of loans and leases held for investment compared to 1.95 percent for fourth quarter 2020
–Provision for credit losses was $48 million for the first quarter of 2021, which includes a release of $190 million primarily reflecting lower loan balances and improved economic outlook
–The allowance for loan and lease loss coverage ratio was 4.84 times nonperforming loans and leases held for investment, versus 4.39 times in the fourth quarter of 2020
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•Capital and liquidity levels remained strong
–Common equity tier 1 to risk-weighted assets was 10.1 percent
–Tier 1 risk-based capital was 12.0 percent
–Total risk-based capital was 14.3 percent
–Repurchased $506 million of common shares
–Redeemed $950 million of preferred stock
–Consolidated average LCR ratio was 111 percent
| EARNINGS HIGHLIGHTS | Change 1Q21 vs. | ||||||||||||||||
| (dollars in millions, except per share data) | 1Q21 | 4Q20 | 1Q20 | 4Q20 | 1Q20 | ||||||||||||
| Net income available to common shareholders | $ | 1,334 | $ | 1,228 | $ | 986 | $ | 106 | $ | 348 | |||||||
| Diluted earnings per common share | 0.98 | 0.90 | 0.73 | 0.08 | 0.25 | ||||||||||||
| Net interest income - taxable equivalent | $ | 3,313 | $ | 3,394 | $ | 3,687 | $ | (81) | $ | (374) | |||||||
| Noninterest income | 2,197 | 2,285 | 1,961 | (88) | 236 | ||||||||||||
| Total taxable-equivalent revenue | $ | 5,510 | $ | 5,679 | $ | 5,648 | $ | (169) | $ | (138) | |||||||
| Less taxable-equivalent adjustment | 28 | 28 | 37 | ||||||||||||||
| Total revenue | $ | 5,482 | $ | 5,651 | $ | 5,611 | |||||||||||
| Return on average assets | 1.17 | % | 1.05 | % | 0.90 | % | 0.12 | % | 0.27 | % | |||||||
| Return on average risk-weighted assets (current quarter is preliminary) | 1.58 | 1.40 | 1.12 | 0.18 | 0.46 | ||||||||||||
| Return on average common shareholders' equity | 8.69 | 7.88 | 6.58 | 0.81 | 2.11 | ||||||||||||
Return on average tangible common shareholders' equity (1) | 16.40 | 14.99 | 13.23 | 1.41 | 3.17 | ||||||||||||
| Net interest margin - taxable equivalent | 3.01 | 3.08 | 3.58 | (0.07) | (0.57) | ||||||||||||
(1)Excludes certain items as detailed in the non-GAAP reconciliations in the Quarterly Performance Summary.
First Quarter 2021 compared to Fourth Quarter 2020
Total taxable-equivalent revenue was $5.5 billion for the first quarter of 2021, a decrease of $169 million compared to the prior quarter.
Net interest income for the first quarter of 2021 was down $81 million compared to the prior quarter due to fewer days, lower purchase accounting accretion and lower rates on earning assets. These decreases were partially offset by lower funding costs. Average earning assets increased $5.3 billion compared to the prior quarter. Average securities available for sale increased $20.2 billion, while average other earning assets decreased $6.5 billion and average total loans decreased $8.6 billion. The growth in average earnings assets is a result of an increase in investment securities driven by strong deposit growth resulting from fiscal stimulus. The investment in securities positively impacted net interest income compared to the yields available on excess balances at the Federal Reserve. Average interest-bearing deposits increased $6.4 billion primarily due to clients receiving government stimulus funds, while average long-term debt decreased $2.5 billion primarily due to maturities. In addition, average noninterest-bearing deposits increased $1.5 billion compared to the fourth quarter of 2020.
The net interest margin was 3.01 percent for the first quarter, down seven basis points compared to the prior quarter. The yield on the total loan portfolio for the first quarter was 4.09 percent, down three basis points compared to the prior quarter primarily due to lower accretion of the fair value mark on the merged loans. The yield on the average securities portfolio for the first quarter was 1.45 percent, down 15 basis points compared to the prior quarter primarily due to lower yields on new purchases.
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The average cost of total deposits was 0.05 percent, down two basis points compared to the prior quarter, and the average cost of interest-bearing deposits was 0.07 percent, down four basis points compared to the prior quarter. The decrease in rates on deposits was primarily attributable to maturities of higher-cost time deposits. The average rate on long-term debt was 1.57 percent, down seven basis points compared to the prior quarter. The decrease in the rate on long-term debt was primarily due to interest expense associated with the completion of structured real estate transactions in the prior quarter and higher-cost debt that matured.
The provision for credit losses was $48 million and net charge-offs were $238 million for the first quarter, compared to $177 million and $205 million, respectively, for the prior quarter. The decrease in the provision for credit losses was primarily due to lower loan balances and improved economic outlook.
Noninterest income was $2.2 billion, a decrease of $88 million compared to the prior quarter. Insurance income increased $81 million primarily due to seasonality in employee benefits commissions and acquisitions. Investment banking and trading revenues increased $32 million primarily due to a recovery of previously recorded CVA losses, as well as higher investment banking revenues. Residential mortgage income decreased $93 million primarily due to a decrease in production-related revenues resulting from lower gain on sale margins and volumes. Commercial real-estate related income decreased $80 million as the prior record quarter included fees from the completion of structured real estate transactions and seasonality in the commercial mortgage banking business. Other income was down $18 million as partnership income was down $49 million due to a strong fourth quarter, partially offset by gains of $37 million from the divestiture of certain businesses.
Noninterest expense was $3.6 billion for the first quarter, down $223 million compared to the prior quarter. Merger-related and restructuring charges decreased $167 million primarily due to lower facilities impairments and severance charges. Incremental operating expenses related to the merger decreased $4 million. The current quarter also includes $36 million of expense associated with an acceleration of loss recognition related to certain terminated cash flow hedges. Excluding the items mentioned above and changes in amortization of intangibles and a small gain from debt extinguishment, adjusted noninterest expense was down $57 million. Personnel expense increased $34 million compared to the prior quarter primarily due to higher equity-based compensation due to new grants, payroll taxes due to resetting of limits at the beginning of the year and other employee benefits, partially offset by lower salaries and wages. Incentives expense was relatively flat compared to the prior quarter as increased expense from improved performance in the current period was mostly offset by a decrease resulting from the impact of the job regrading initiative in the prior quarter. Professional fees and outside processing expenses decreased $43 million due to lower spend for professional services for strategic technology projects. Other expense also includes a $42 million decrease due to non-service-related pension cost components.
The provision for income taxes was $351 million for the first quarter of 2021, compared to $311 million for the prior quarter. The effective tax rate for the first quarter of 2021 was 19.2 percent, compared to 19.0 percent for the prior quarter.
First Quarter 2021 compared to First Quarter 2020
Total taxable-equivalent revenues were $5.5 billion for the first quarter of 2021, a decrease of $138 million compared to the earlier quarter.
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Net interest income for the first quarter of 2021 was down $374 million compared to the earlier quarter due to lower purchase accounting accretion and lower rates on earning assets. These decreases were partially offset by lower funding costs. Average earning assets increased $30.4 billion compared to the earlier quarter. The increase in average earning assets reflects a $46.5 billion increase in average securities, while average total loans and leases decreased $8.2 billion and average other earning assets decreased $6.3 billion. The growth in average earnings assets is a result of an increase in investment securities driven by strong deposit growth resulting from fiscal stimulus. Average interest-bearing liabilities decreased $7.8 billion compared to the earlier quarter. The decline in average interest-bearing liabilities was offset by significant growth in average noninterest-bearing deposits, which increased $35.4 billion compared to the earlier quarter. Average interest-bearing deposits increased $13.1 billion, while average long-term debt decreased $8.7 billion and average short-term borrowings decreased $12.2 billion.
Net interest margin was 3.01 percent, down 57 basis points compared to the earlier quarter. The yield on the total loan portfolio for the first quarter of 2021 was 4.09 percent, down 89 basis points compared to the earlier quarter, reflecting the impact of rate decreases and lower purchase accounting accretion from merged loans. The yield on the average securities portfolio was 1.45 percent, down 117 basis points compared to the earlier quarter primarily due to lower yields on new purchases.
The average cost of total deposits was 0.05 percent, down 46 basis points compared to the earlier quarter, and the average cost of interest-bearing deposits was 0.07 percent, down 63 basis points compared to the earlier quarter. The average rate on short-term borrowings was 0.82 percent, down 94 basis points compared to the earlier quarter. The average rate on long-term debt was 1.57 percent, down 77 basis points compared to the earlier quarter. The lower rates on interest-bearing liabilities reflect the lower rate environment.
The provision for credit losses was $48 million, compared to $893 million for the earlier quarter. The earlier quarter included the significant uncertainty of the economic impacts resulting from the onset of the pandemic. Net charge-offs for the first quarter of 2021 totaled $238 million compared to $272 million in the earlier quarter. The net charge-off rate for the current quarter of 0.33 percent was down three basis points compared to the first quarter of 2020.
Noninterest income for the first quarter of 2021 increased $236 million compared to the earlier quarter. Investment banking and trading income increased $222 million due to the impact from CVA recoveries in the current period compared to losses in the earlier quarter and strong investment banking income from equity originations, loan syndications and asset securitization transactions. Insurance income increased $77 million due to new business and higher retention, as well as acquisitions. Other income increased $76 million primarily due to income from assets held for certain post-retirement benefits, which is primarily offset by higher personnel expense. Other income also includes a $37 million gain from the divestiture of certain businesses, which was mostly offset by gains from credit default swaps recorded in the earlier quarter. Lending related fees increased $33 million due to gains from the sale of finance leases. Residential mortgage banking income decreased $145 million primarily due to lower production related revenues as a result of lower gain on sale margins and volumes, as well as lower servicing income due to a reduction in the third-party servicing portfolio as a result of prepayments. Service charges on deposits decreased $47 million due to reduced overdraft incident rates.
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Noninterest expense for the first quarter of 2021 was up $179 million compared to the earlier quarter. Merger-related and restructuring charges increased $34 million and other incremental operating expenses related to the merger increased $101 million, primarily reflected in professional fees and outside processing. The current quarter also includes $36 million of expense associated with an acceleration of loss recognition related to certain terminated cash flow hedges. Excluding the items mentioned above and changes in amortization of intangibles and a small gain from debt extinguishment, adjusted noninterest expense was up $32 million compared to the earlier quarter. Personnel expense increased $170 million primarily due to higher incentive expenses due to improved performance, higher equity-based compensation expense, higher other employee benefits, partially offset by lower salaries due to fewer FTEs. Other expense also includes decreases of $42 million for non-service-related pension cost components and $20 million for employee travel. There was also a decrease of $51 million from net occupancy expense, marketing and customer development and operating lease depreciation.
The provision for income taxes was $351 million for the first quarter of 2021, compared to $224 million for the earlier quarter. This produced an effective tax rate for the first quarter of 2021 of 19.2 percent, compared to 17.4 percent for the earlier quarter. The higher effective tax rate is primarily due to higher pre-tax income and discrete tax expenses due to the divestiture of certain businesses in the current year.
| LOANS AND LEASES | ||||||||||||||
| (dollars in millions) | ||||||||||||||
| Average balances | 1Q21 | 4Q20 | Change | % Change | ||||||||||
| (annualized) | ||||||||||||||
| Commercial: | ||||||||||||||
| Commercial and industrial | $ | 136,051 | $ | 139,223 | $ | (3,172) | (9.2) | % | ||||||
| CRE | 26,211 | 27,030 | (819) | (12.3) | ||||||||||
| Commercial construction | 6,557 | 6,616 | (59) | (3.6) | ||||||||||
| Lease financing | 4,975 | 5,401 | (426) | (32.0) | ||||||||||
| Total commercial | 173,794 | 178,270 | (4,476) | (10.2) | ||||||||||
| Consumer: | ||||||||||||||
| Residential mortgage | 45,823 | 48,847 | (3,024) | (25.1) | ||||||||||
| Residential home equity and direct | 25,658 | 26,327 | (669) | (10.3) | ||||||||||
| Indirect auto | 26,363 | 25,788 | 575 | 9.0 | ||||||||||
| Indirect other | 10,848 | 11,291 | (443) | (15.9) | ||||||||||
| Student | 7,519 | 7,519 | — | — | ||||||||||
| Total consumer | 116,211 | 119,772 | (3,561) | (12.1) | ||||||||||
| Credit card | 4,645 | 4,818 | (173) | (14.6) | ||||||||||
| Total loans and leases held for investment | $ | 294,650 | $ | 302,860 | $ | (8,210) | (11.0) | |||||||
Average loans and leases held for investment for the first quarter of 2021 were $294.7 billion, down $8.2 billion compared to the fourth quarter of 2020.
Average commercial loans decreased $4.5 billion primarily due to a $1.8 billion decrease in average Paycheck Protection Program loans, an $819 million decrease in average CRE loans and a $647 million decrease due to the transfer of $1.0 billion of certain loans and leases to held for sale late in the fourth quarter of 2020 and continued paydowns on revolving credit lines.
Average consumer loans decreased $3.6 billion primarily due to refinance activity resulting in a decline in residential mortgages and residential home equity and direct loans. This was partially offset by an increase in indirect auto loans.
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| DEPOSITS | ||||||||||||||
| (dollars in millions) | ||||||||||||||
| Average balances | 1Q21 | 4Q20 | Change | % Change | ||||||||||
| (annualized) | ||||||||||||||
| Noninterest-bearing deposits | $ | 128,579 | $ | 127,103 | $ | 1,476 | 4.7 | % | ||||||
| Interest checking | 104,744 | 99,866 | 4,878 | 19.8 | ||||||||||
| Money market and savings | 129,303 | 124,692 | 4,611 | 15.0 | ||||||||||
| Time deposits | 20,559 | 23,605 | (3,046) | (52.3) | ||||||||||
| Total deposits | $ | 383,185 | $ | 375,266 | $ | 7,919 | 8.6 | |||||||
Average deposits for the first quarter of 2021 were $383.2 billion, an increase of $7.9 billion compared to the prior quarter. Average interest checking and money market and savings deposit growth was strong for the first quarter of 2021 driven by growth resulting from additional government stimulus programs and pandemic-related client behavior. Average noninterest bearing deposits grew 4.7 percent compared to the prior quarter and represented 33.6 percent of total deposits for the first quarter of 2021, compared to 33.9 percent for the prior quarter.
Average time deposits decreased primarily due to the maturity of wholesale negotiable certificates of deposit and higher-cost personal accounts.
The cost of average total deposits was 0.05 percent for the first quarter, down two basis points compared to the prior quarter. The cost of average interest-bearing deposits was 0.07 percent for the first quarter, down four basis points compared to the prior quarter.
| SEGMENT RESULTS | Change 1Q21 vs. | ||||||||||||||||
| (dollars in millions) | |||||||||||||||||
| Segment Net Income | 1Q21 | 4Q20 | 1Q20 | 4Q20 | 1Q20 | ||||||||||||
| Consumer Banking and Wealth | $ | 803 | $ | 854 | $ | 675 | $ | (51) | $ | 128 | |||||||
| Corporate and Commercial Banking | 908 | 922 | 421 | (14) | 487 | ||||||||||||
| Insurance Holdings | 131 | 99 | 105 | 32 | 26 | ||||||||||||
| Other, Treasury & Corporate | (369) | (545) | (138) | 176 | (231) | ||||||||||||
| Total net income | $ | 1,473 | $ | 1,330 | $ | 1,063 | $ | 143 | $ | 410 | |||||||
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First Quarter 2021 compared to Fourth Quarter 2020
Consumer Banking and Wealth ("CB&W")
CB&W serves individuals and small business clients by offering a variety of loan and deposit products, payment services, bankcard products and other financial services by connecting clients to a wide range of financial products and services. CB&W includes Retail Community Bank, which provides banking, borrowing, investing, insurance solutions and advice through Premier Banking to individuals and small business clients through an extensive network of branches and ATMs, digital channels and contact centers. Financial products and services offered include deposits and payments, credit cards, loans, mortgages, brokerage and investment advisory services and insurance solutions. CB&W also includes Dealer Retail Services, which originates loans on an indirect basis to individuals for the purchase of automobiles, boats and recreational vehicles. Additionally, CB&W includes National Consumer Finance & Payments, which provides a comprehensive set of technology-enabled lending solutions to individuals and small businesses through several national channels, as well as merchant services and payment processing solutions to business clients. CB&W also includes Mortgage Banking, which offers residential mortgage products nationally through its retail and correspondent channels, the internet and by telephone. These products are either sold in the secondary market, primarily with servicing rights retained, or held in the Company’s loan portfolio. Mortgage Banking also services loans for other investors, in addition to loans held in the Company’s loan portfolio. Mortgage Banking also includes Mortgage Warehouse Lending, which provides short-term lending solutions to finance first-lien residential mortgage LHFS by independent mortgage companies. Wealth delivers investment management, financial planning, banking, fiduciary services and related solutions to institutions, affluent and high net worth individuals and families, with financial expertise and industry-specific insights in the medical, legal, sports and entertainment industries.
CB&W net income was $803 million for the first quarter of 2021, a decrease of $51 million compared to the prior quarter. Segment net interest income decreased $62 million primarily driven by fewer days, a decline in the funding credit on liabilities and lower purchase accounting accretion. Noninterest income decreased $73 million driven by lower residential mortgage income due to lower gain on sale margins and volumes, partially offset by gains from the divestiture of certain businesses. The allocated provision for credit losses decreased $16 million which reflects an allowance release that was driven by decreasing loan balances and improved economic outlook, partially offset by increased net charge-offs primarily in the auto portfolios. Noninterest expense decreased $50 million primarily due to lower occupancy expense, merger-related expenses, amortization of intangibles, equipment expenses and loan related expenses, partially offset by seasonally higher personnel benefits expenses.
Average loans held for investment decreased $4.4 billion compared to the prior quarter primarily due to lower residential mortgage, home equity lending, divestiture of small ticket loan and lease portfolio and other indirect lending, partially offset by increased indirect auto lending. Average total deposits increased $6.7 billion compared to the prior quarter primarily due to the impact of the government stimulus programs.
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Corporate and Commercial Banking ("C&CB")
C&CB serves large, medium and small business clients by offering a variety of loan and deposit products and connecting clients to the combined organization’s broad array of financial services. C&CB includes Corporate and Investment Banking (“CIB”), which delivers a comprehensive range of strategic advisory, capital raising, risk management, financing, liquidity and investment solutions to both public and private companies in the C&CB segment and Wealth. Additionally, C&CB includes Commercial Community Banking, which offers an array of traditional banking products, including lending, cash management and investment banking to commercial clients via CIB. C&CB also includes Commercial Real Estate, which provides a range of credit and deposit services as well as fee-based product offerings to privately held developers, operators and investors in commercial real estate properties. C&CB also includes Grandbridge Real Estate Capital, which is a fully integrated commercial mortgage banking company that originates commercial and multi-family real estate loans, services loan portfolios and provides asset and portfolio management as well as real estate brokerage services. Treasury Solutions, within C&CB, provides business clients across the organization with services required to manage their payments and receipts, combined with the ability to manage and optimize their deposits across all aspects of their business.
C&CB net income was $908 million for the first quarter of 2021, a decrease of $14 million compared to the prior quarter. Segment net interest income decreased $73 million primarily due to reduced funding credit on liabilities, fewer days and lower purchase accounting accretion. Noninterest income decreased $95 million primarily due to seasonally strong commercial real-estate related income in the prior quarter and lower partnership income, partially offset by higher investment banking and trading revenues. The allocated provision for credit losses decreased $95 million which reflects an allowance release primarily driven by a decline in loan balances and an improved economic outlook, partially offset by a modest decrease in recoveries. Noninterest expense decreased $49 million primarily due to lower incentives and merger-related expenses.
Average loans held for investment decreased $3.6 billion compared to the prior quarter due primarily to pay-downs on drawn revolvers and forgiveness of Paycheck Protection Program loans, partially offset by funding for the second round of Paycheck Protection Program loans. Average total deposits increased $1.2 billion compared to the prior quarter primarily due to seasonally higher balances from commercial clients.
Insurance Holdings ("IH")
Truist’s IH segment is one of the largest insurance brokers in the world, providing property and casualty, employee benefits and life insurance to businesses and individuals. It also provides small business and corporate services, such as workers compensation and professional liability, as well as surety coverage and title insurance. In addition, IH provides premium financing for property and casualty insurance.
IH net income was $131 million for the first quarter of 2021, an increase of $32 million compared to the prior quarter. Noninterest income increased $71 million primarily due to seasonality in employee benefits insurance commissions as well as acquisitions. Noninterest expense increased $28 million primarily due to seasonally higher performance-based incentives and increased amortization of intangibles, partially offset by lower merger-related charges.
Other, Treasury & Corporate ("OT&C")
Net income in OT&C can vary due to the changing needs of the Corporation, including the size of the investment portfolio, the need for wholesale funding and variability associated with derivatives used to hedge the balance sheet.
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OT&C generated a net loss of $369 million for the first quarter of 2021, compared to a net loss of $545 million for the prior quarter. Segment net interest income increased $56 million primarily due to higher earnings in the securities portfolio from purchases to utilize excess liquidity. Noninterest expense decreased $152 million primarily due to lower merger-related expenses, professional service fees and outside processing, as well as employee benefits, partially offset by higher incentives, marketing expenses and licensing fees. The benefit for income taxes decreased $58 million primarily due to a lower pre-tax loss in the current quarter.
First Quarter 2021 compared to First Quarter 2020
Consumer Banking and Wealth
CB&W net income was $803 million for the first quarter of 2021, an increase of $128 million compared to the earlier quarter. Segment net interest income decreased $119 million primarily due to a decline in the funding credit provided on liabilities and lower purchase accounting accretion. Noninterest income decreased $145 million driven by lower residential mortgage income due to lower gain on sale margins and volumes, partially offset by gains from the divestiture of certain businesses. The allocated provision for credit losses decreased $337 million reflecting an allowance build during the first quarter of 2020 resulting from the deteriorating economic outlook caused by the onset of the pandemic, as well as a benefit from lower charge offs in the auto portfolios compared to the prior year. Noninterest expense decreased $94 million primarily due to lower amortization of intangibles, merger related expenses and occupancy expenses in the current quarter.
Corporate and Commercial Banking
C&CB net income was $908 million for the first quarter of 2021, an increase of $487 million compared to the earlier quarter. Segment net interest income decreased $114 million primarily due to reduced funding credit on liabilities and lower purchase accounting accretion. Noninterest income increased $237 million driven by investment banking, recovery of previously recorded CVA losses and lending related fees. The allocated provision for credit losses decreased $434 million primarily reflecting the impact of a significant allowance build in the first quarter of 2020 resulting from the deteriorating economic outlook caused by the onset of the pandemic. Noninterest expense decreased $87 million primarily due to lower personnel related expenses, merger related expenses and operating lease depreciation in the current quarter.
Insurance Holdings
IH net income was $131 million for the first quarter of 2021, an increase of $26 million compared to the earlier quarter. Noninterest income increased $76 million primarily due to higher property and casualty insurance production as well as acquisitions. Noninterest expense increased $39 million primarily due to higher performance-based incentives and amortization of intangibles related to the acquisitions.
Other, Treasury & Corporate
OT&C generated a net loss of $369 million in the first quarter of 2021, compared to a net loss of $138 million in the earlier quarter. Segment net interest income decreased $127 million primarily due to lower net funding charges to other segments due to lower market rates, partially offset by lower interest expense on borrowings. Noninterest income increased $68 million primarily due to income from assets held for certain post-retirement benefits. The allocated provision for credit losses decreased $74 million due to changes in the reserve for unfunded commitments and an allowance build in the earlier quarter resulting from the onset of the pandemic. Noninterest expense increased $321 million primarily due to higher incremental operating expenses related to the merger and higher merger-related charges in the current quarter. The benefit for income taxes increased $75 million primarily due to a higher pre-tax loss in the current quarter.
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| CAPITAL RATIOS | 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | ||||||||||||
| Risk-based: | (preliminary) | ||||||||||||||||
| Common equity Tier 1 | 10.1 | % | 10.0 | % | 10.0 | % | 9.7 | % | 9.3 | % | |||||||
| Tier 1 | 12.0 | 12.1 | 12.2 | 11.6 | 10.5 | ||||||||||||
| Total | 14.3 | 14.5 | 14.6 | 14.0 | 12.7 | ||||||||||||
| Leverage | 9.4 | 9.6 | 9.6 | 9.0 | 9.0 | ||||||||||||
| Supplementary leverage | 8.3 | 8.7 | 8.9 | 8.5 | 7.8 | ||||||||||||
Capital ratios remained strong compared to the regulatory levels for well capitalized banks. Truist declared common dividends of $0.450 per share during the first quarter of 2021 and completed $506 million of share repurchases. The dividend and total payout ratios for the first quarter of 2021 were 45.4 percent and 83.3 percent, respectively. Truist also redeemed $950 million of preferred stock during the quarter to optimize the Company's capital position. In connection with the redemptions of preferred stock, net income available to common shareholders was reduced by $26 million to recognize the difference between the redemption price and the carrying value.
Truist has approximately $1.5 billion authorization remaining under the share repurchase program approved by the Board of Directors in December 2020. Management’s intention is to maintain an approximate 10 percent Common Equity Tier 1 ratio after considering strategic actions such as non-bank acquisitions or stock repurchases, as well as changes in risk-weighted assets. For the second quarter of 2021, Truist intends to execute share repurchases consistent with the Federal Reserve's capital restrictions announced on March 25, 2021. In addition to these restrictions, any future stock repurchase activity will be informed by economic and regulatory considerations as well as Truist’s capital position, earnings outlook and capital deployment priorities.
Truist's average LCR was 111 percent for the three months ended March 31, 2021, compared to the regulatory minimum of 100 percent. Truist continues to maintain a strong liquidity position and is prepared to meet the funding needs of clients. In addition, the liquid asset buffer, which is defined as high quality unencumbered liquid assets as a percentage of total assets, was 23.2 percent at March 31, 2021.
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| ASSET QUALITY | |||||||||||||||||
| (dollars in millions) | 1Q21 | 4Q20 | 3Q20 | 2Q20 | 1Q20 | ||||||||||||
| Total nonperforming assets | $ | 1,299 | $ | 1,387 | $ | 1,314 | $ | 1,252 | $ | 1,177 | |||||||
| Total performing TDRs | 1,539 | 1,361 | 1,217 | 1,107 | 1,079 | ||||||||||||
| Total loans 90 days past due and still accruing | 2,072 | 2,008 | 1,197 | 1,072 | 1,748 | ||||||||||||
| Total loans 30-89 days past due | 1,788 | 2,220 | 2,148 | 1,901 | 2,374 | ||||||||||||
Nonperforming loans and leases as a percentage of loans and leases held for investment | 0.40 | % | 0.44 | % | 0.37 | % | 0.35 | % | 0.32 | % | |||||||
| Nonperforming loans and leases as a percentage of loans and leases, including loans held for sale | 0.42 | 0.44 | 0.40 | 0.37 | 0.33 | ||||||||||||
Nonperforming assets as a percentage of total assets | 0.25 | 0.27 | 0.26 | 0.25 | 0.23 | ||||||||||||
Loans 30-89 days past due and still accruing as a percentage of loans and leases | 0.61 | 0.74 | 0.70 | 0.60 | 0.74 | ||||||||||||
Loans 90 days or more past due and still accruing as a percentage of loans and leases | 0.71 | 0.67 | 0.39 | 0.34 | 0.55 | ||||||||||||
| 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 | 0.04 | 0.03 | 0.04 | 0.04 | ||||||||||||
Allowance for loan and lease losses as a percentage of loans and leases held for investment | 1.94 | 1.95 | 1.91 | 1.81 | 1.63 | ||||||||||||
Net charge-offs as a percentage of average loans and leases, annualized | 0.33 | 0.27 | 0.42 | 0.39 | 0.36 | ||||||||||||
Ratio of allowance for loan and lease losses to net charge-offs, annualized | 5.87x | 7.15x | 4.52x | 4.49x | 4.76x | ||||||||||||
Ratio of allowance for loan and lease losses to nonperforming loans and leases held for investment | 4.84x | 4.39x | 5.22x | 5.24x | 5.04x | ||||||||||||
Nonperforming assets totaled $1.3 billion at March 31, 2021, down $88 million compared to December 31, 2020. Nonperforming loans and leases represented 0.42 percent of total loans and leases, down two basis points compared to December 31, 2020. Nonperforming loans and leases held for investment decreased $159 million, primarily in the commercial and industrial portfolio, while nonperforming loans held for sale increased $67 million as a portfolio of residential mortgage loans was transferred to held for sale during the quarter.
Performing TDRs were up $178 million during the first quarter primarily in the residential mortgage and commercial and industrial portfolios. The increase in residential mortgage was driven by modifications of loans that were not eligible for relief in accordance with the provisions of the CARES Act. The increase in commercial and industrial loan modifications was driven by an increase in the volume of loans entering workout agreements.
Loans 90 days or more past due and still accruing totaled $2.1 billion at March 31, 2021, up $64 million compared to the prior quarter. The increase was primarily in residential mortgage loans due to the repurchase of delinquent government guaranteed loans. The ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases was 0.71 percent at March 31, 2021, up four basis points 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 percent at March 31, 2021, unchanged from December 31, 2020.
Loans 30-89 days past due and still accruing totaled $1.8 billion at March 31, 2021, down $432 million compared to the prior quarter. The decrease was primarily in consumer loans for residential mortgage and indirect automobile due to seasonality and consumers receiving stimulus funds. The ratio of loans 30-89 days past due and still accruing as a percentage of loans and leases was 0.61 percent at March 31, 2021 down 13 basis points from the prior quarter.
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Net charge-offs during the first quarter totaled $238 million, up $33 million compared to the prior quarter. As a percentage of average loans and leases, annualized net charge-offs were 0.33 percent, up six basis points compared to the prior quarter. The increase in net charge-offs was primarily in the indirect auto portfolio due to seasonality.
The allowance for credit losses was $6.0 billion and includes $5.7 billion for loans and leases and $349 million for the reserve for unfunded commitments. The allowance for loan and lease losses represented 1.94 percent of loans and leases held for investment compared to 1.95 percent at December 31, 2020. The allowance for loan and lease losses covered nonperforming loans and leases held for investment 4.84 times compared to 4.39 times at December 31, 2020. At March 31, 2021, the allowance for loan and lease losses was 5.87 times annualized net charge-offs, compared to 7.15 times at December 31, 2020.
Earnings Presentation and Quarterly Performance Summary
To listen to Truist's live first quarter 2021 earnings conference call at 8 a.m. ET today, please call 866-519-2796 and enter the participant code 391805. 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 391805).
The presentation, including an appendix reconciling non-GAAP disclosures, and Truist's First Quarter 2021 Quarterly Performance Summary, which contains detailed financial schedules, are available at https://ir.truist.com/earnings.
About Truist
Truist Financial Corporation is a purpose-driven financial services company committed to inspiring and building better lives and communities. Formed by the historic merger of equals of BB&T and SunTrust, Truist has leading market share in many high-growth markets in the country. The company offers a wide range of services including retail, small business and commercial banking; asset management; capital markets; commercial real estate; corporate and institutional banking; insurance; mortgage; payments; specialized lending; and wealth management. Headquartered in Charlotte, North Carolina, Truist is the sixth-largest commercial bank in the U.S. with total assets of $518 billion as of March 31, 2021. Truist Bank, Member FDIC. Learn more at Truist.com.
#-#-#
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.
- 13 -
•Tangible Common Equity and Related Measures - Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist's management uses these measures to assess the quality of capital and returns relative to balance sheet risk.
•Core NIM - Core net interest margin is a non-GAAP measure that adjusts net interest margin to exclude the impact of purchase accounting. The purchase accounting marks and related amortization for a) securities acquired from the FDIC in the Colonial Bank acquisition and b) loans, deposits and long-term debt from SunTrust, Susquehanna, National Penn and Colonial Bank 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 enhances comparability of results with prior periods, as well as demonstrates 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 these non-GAAP measures to the most directly comparable GAAP measure is included in the appendix to Truist's First Quarter 2021 Earnings Presentation, which is available at https://ir.truist.com/earnings.
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the financial condition, results of operations, business plans and the future performance of Truist. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "may," "will," "should," “would," "could" and other similar expressions are intended to identify these forward-looking statements.
Forward-looking statements are not based on historical facts but instead represent management's expectations and assumptions regarding Truist's business, the economy and other future conditions. Such statements involve inherent uncertainties, risks and changes in circumstances that are difficult to predict. As such, Truist’s actual results may differ materially from those contemplated by forward-looking statements. While there can be no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those contemplated by forward-looking statements include the following, without limitation, as well as the risks and uncertainties more fully discussed under Item 1A-Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020 and in Truist's subsequent filings with the Securities and Exchange Commission:
•risks and uncertainties relating to the Merger of heritage BB&T and heritage SunTrust, including the ability to successfully integrate the companies or to realize the anticipated benefits of the Merger;
•expenses relating to the Merger and integration of heritage BB&T and heritage SunTrust;
•deposit attrition, client loss or revenue loss following completed mergers or acquisitions may be greater than anticipated;
•the COVID-19 pandemic has disrupted the global economy, adversely impacted Truist's financial condition and results of operations, including through increased expenses, reduced fee income and net interest margin and increases in the allowance for credit losses, and continuation of current conditions could worsen these 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 and potentially negative interest rates, 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;
- 14 -
•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 new or existing competitors that could have greater financial resources or be subject to different regulatory standards, for products and services offered by non-bank financial technology companies may reduce Truist's client base, cause Truist to lower prices for its products and services in order to maintain market share or otherwise adversely impact Truist's businesses or results of operations;
•failure to maintain or enhance Truist's competitive position with respect to new products, services and technology, whether it fails to anticipate client expectations or because its technological developments fail to perform as desired or do not achieve market acceptance or regulatory approval or for other reasons, may cause Truist to lose market share or incur additional expense;
•negative public opinion, which could damage Truist's reputation;
•increased scrutiny regarding Truist's consumer sales practices, training practices, incentive compensation design and governance;
•regulatory matters, litigation or other legal actions, which may result in, among other things, costs, fines, penalties, restrictions on Truist's business activities, reputational harm, negative publicity or other adverse consequences;
•evolving legislative, accounting and regulatory standards, including with respect to capital and liquidity requirements, and results of regulatory examinations, may adversely affect Truist's financial condition and results of operations;
•the monetary and fiscal policies of the federal government and its agencies could have a material adverse effect on profitability;
•accounting policies and processes require management to make estimates about matters that are uncertain, including the potential write down to goodwill if there is an elongated period of decline in market value for Truist's stock and adverse economic conditions are sustained over a period of time;
•general economic or business conditions, either globally, nationally or regionally, may be less favorable than expected, and instability in global geopolitical matters or volatility in financial markets could result in, among other things, slower deposit or asset growth, a deterioration in credit quality or a reduced demand for credit, insurance or other services;
•risks related to originating and selling mortgages, including repurchase and indemnity demands from purchasers related to representations and warranties on loans sold, which could result in an increase in the amount of losses for loan repurchases;
•risks relating to Truist's role as a loan servicer, including an increase in the scope or costs of the services Truist is required to perform without any corresponding increase in servicing fees, or a breach of Truist’s obligations as servicer;
•Truist's success depends on hiring and retaining key personnel, and if these individuals leave or change roles without effective replacements, Truist's operations and integration activities could be adversely impacted, which could be exacerbated as Truist continues to integrate the management teams of heritage BB&T and heritage SunTrust;
•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 and identity theft, 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 could have an adverse effect on Truist's financial condition and results of operations, or 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.
- 15 -
Quarterly Performance Summary
Truist Financial Corporation
First Quarter 2021
| Table of Contents | ||||||||
| Quarterly Performance Summary | ||||||||
| Truist Financial Corporation | ||||||||
| Page | ||||||||
| Financial Highlights | ||||||||
| Financial Highlights - Five Quarter Trend | ||||||||
| Consolidated Statements of Income | ||||||||
| Consolidated Statements of Income - Five Quarter Trend | ||||||||
| Segment Financial Performance - Five Quarter Trend | ||||||||
| Consolidated Ending Balance Sheets - Five Quarter Trend | ||||||||
| Average Balance Sheets | ||||||||
| Average Balance Sheets - Five Quarter Trend | ||||||||
| Average Balances and Rates - Quarters | ||||||||
| Credit Quality | ||||||||
| Capital Information - Five Quarter Trend | ||||||||
| Selected Mortgage Banking Information & Additional Information | ||||||||
| Selected Items | ||||||||
| Non-GAAP Reconciliations | ||||||||
| Financial Highlights | ||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||
| March 31 | % | |||||||||||||||||||
| (Dollars in millions, except per share data, shares in thousands) | 2021 | 2020 | Change | |||||||||||||||||
| Summary Income Statement | ||||||||||||||||||||
| Interest income - taxable equivalent (1) | $ | 3,522 | $ | 4,463 | (21.1) | % | ||||||||||||||
| Interest expense | 209 | 776 | (73.1) | |||||||||||||||||
| Net interest income - taxable equivalent | 3,313 | 3,687 | (10.1) | |||||||||||||||||
| Less: Taxable-equivalent adjustment | 28 | 37 | (24.3) | |||||||||||||||||
| Net interest income | 3,285 | 3,650 | (10.0) | |||||||||||||||||
| Provision for credit losses | 48 | 893 | (94.6) | |||||||||||||||||
| Net interest income after provision for credit losses | 3,237 | 2,757 | 17.4 | |||||||||||||||||
| Noninterest income | 2,197 | 1,961 | 12.0 | |||||||||||||||||
| Noninterest expense | 3,610 | 3,431 | 5.2 | |||||||||||||||||
| Income before income taxes | 1,824 | 1,287 | 41.7 | |||||||||||||||||
| Provision for income taxes | 351 | 224 | 56.7 | |||||||||||||||||
| Net income | 1,473 | 1,063 | 38.6 | |||||||||||||||||
| Noncontrolling interests | (4) | 3 | NM | |||||||||||||||||
| Net income available to the bank holding company | 1,477 | 1,060 | 39.3 | |||||||||||||||||
| Preferred stock dividends and other | 143 | 74 | 93.2 | |||||||||||||||||
| Net income available to common shareholders | 1,334 | 986 | 35.3 | |||||||||||||||||
| Per Common Share Data | ||||||||||||||||||||
| Earnings per share-basic | $ | 0.99 | $ | 0.73 | 35.6 | % | ||||||||||||||
| Earnings per share-diluted | 0.98 | 0.73 | 34.2 | |||||||||||||||||
| Earnings per share-adjusted diluted (2) | 1.18 | 0.83 | 42.2 | |||||||||||||||||
| Cash dividends declared | 0.450 | 0.450 | — | |||||||||||||||||
| Common shareholders' equity | 45.17 | 45.49 | (0.7) | |||||||||||||||||
| Tangible common shareholders' equity (2) | 25.53 | 26.00 | (1.8) | |||||||||||||||||
| End of period shares outstanding | 1,344,845 | 1,347,461 | (0.2) | |||||||||||||||||
| Weighted average shares outstanding-basic | 1,345,666 | 1,344,372 | 0.1 | |||||||||||||||||
| Weighted average shares outstanding-diluted | 1,358,932 | 1,357,545 | 0.1 | |||||||||||||||||
| Performance Ratios | ||||||||||||||||||||
| Return on average assets | 1.17 | % | 0.90 | % | ||||||||||||||||
| Return on average risk-weighted assets (current period is preliminary) | 1.58 | 1.12 | ||||||||||||||||||
| Return on average common shareholders' equity | 8.69 | 6.58 | ||||||||||||||||||
| Return on average tangible common shareholders' equity (2) | 16.40 | 13.23 | ||||||||||||||||||
| Net interest margin - taxable equivalent | 3.01 | 3.58 | ||||||||||||||||||
| Fee income ratio | 40.1 | 34.9 | ||||||||||||||||||
| Efficiency ratio-GAAP | 65.8 | 61.1 | ||||||||||||||||||
| Efficiency ratio-adjusted (2) | 56.9 | 54.6 | ||||||||||||||||||
| Credit Quality | ||||||||||||||||||||
| Nonperforming assets as a percentage of: | ||||||||||||||||||||
| Assets | 0.25 | % | 0.23 | % | ||||||||||||||||
| Loans and leases plus foreclosed property | 0.42 | 0.36 | ||||||||||||||||||
| Net charge-offs as a percentage of average loans and leases | 0.33 | 0.36 | ||||||||||||||||||
| Allowance for loan and lease losses as a percentage of LHFI | 1.94 | 1.63 | ||||||||||||||||||
| Ratio of allowance for loan and lease losses to nonperforming LHFI | 4.84x | 5.04x | ||||||||||||||||||
| Average Balances | ||||||||||||||||||||
| Assets | $ | 508,833 | $ | 477,550 | 6.6 | % | ||||||||||||||
| Securities available for sale (3) | 122,246 | 75,701 | 61.5 | |||||||||||||||||
| Loans and leases | 299,541 | 307,748 | (2.7) | |||||||||||||||||
| Deposits | 383,185 | 334,649 | 14.5 | |||||||||||||||||
| Common shareholders' equity | 62,252 | 60,224 | 3.4 | |||||||||||||||||
| Total shareholders' equity | 70,047 | 65,412 | 7.1 | |||||||||||||||||
| Period-End Balances | ||||||||||||||||||||
| Assets | $ | 517,537 | $ | 506,229 | 2.2 | % | ||||||||||||||
| Securities available for sale (3) | 123,807 | 78,398 | 57.9 | |||||||||||||||||
| Loans and leases | 297,179 | 324,039 | (8.3) | |||||||||||||||||
| Deposits | 395,562 | 350,179 | 13.0 | |||||||||||||||||
| Common shareholders' equity | 60,752 | 61,295 | (0.9) | |||||||||||||||||
| Total shareholders' equity | 67,876 | 66,061 | 2.7 | |||||||||||||||||
| Capital Ratios (current quarter is preliminary) | ||||||||||||||||||||
| Common equity Tier 1 | 10.1 | % | 9.3 | % | ||||||||||||||||
| Tier 1 | 12.0 | 10.5 | ||||||||||||||||||
| Total | 14.3 | 12.7 | ||||||||||||||||||
| Leverage | 9.4 | 9.0 | ||||||||||||||||||
| Supplementary leverage | 8.3 | 7.8 | ||||||||||||||||||
| 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) Average balances reflect AFS securities at amortized cost. Period-end balances reflect AFS securities at fair value. | ||||||||||||||||||||
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) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||||
| Summary Income Statement | ||||||||||||||||||||||||||||||||
| Interest income - taxable equivalent (1) | $ | 3,522 | $ | 3,639 | $ | 3,652 | $ | 3,919 | $ | 4,463 | ||||||||||||||||||||||
| Interest expense | 209 | 245 | 261 | 440 | 776 | |||||||||||||||||||||||||||
| Net interest income - taxable equivalent | 3,313 | 3,394 | 3,391 | 3,479 | 3,687 | |||||||||||||||||||||||||||
| Less: Taxable-equivalent adjustment | 28 | 28 | 29 | 31 | 37 | |||||||||||||||||||||||||||
| Net interest income | 3,285 | 3,366 | 3,362 | 3,448 | 3,650 | |||||||||||||||||||||||||||
| Provision for credit losses | 48 | 177 | 421 | 844 | 893 | |||||||||||||||||||||||||||
| Net interest income after provision for credit losses | 3,237 | 3,189 | 2,941 | 2,604 | 2,757 | |||||||||||||||||||||||||||
| Noninterest income | 2,197 | 2,285 | 2,210 | 2,423 | 1,961 | |||||||||||||||||||||||||||
| Noninterest expense | 3,610 | 3,833 | 3,755 | 3,878 | 3,431 | |||||||||||||||||||||||||||
| Income before income taxes | 1,824 | 1,641 | 1,396 | 1,149 | 1,287 | |||||||||||||||||||||||||||
| Provision for income taxes | 351 | 311 | 255 | 191 | 224 | |||||||||||||||||||||||||||
| Net income | 1,473 | 1,330 | 1,141 | 958 | 1,063 | |||||||||||||||||||||||||||
| Noncontrolling interests | (4) | 1 | 3 | 3 | 3 | |||||||||||||||||||||||||||
| Net income available to the bank holding company | 1,477 | 1,329 | 1,138 | 955 | 1,060 | |||||||||||||||||||||||||||
| Preferred stock dividends and other | 143 | 101 | 70 | 53 | 74 | |||||||||||||||||||||||||||
| Net income available to common shareholders | 1,334 | 1,228 | 1,068 | 902 | 986 | |||||||||||||||||||||||||||
| Per Common Share Data | ||||||||||||||||||||||||||||||||
| Earnings per share-basic | $ | 0.99 | $ | 0.91 | $ | 0.79 | $ | 0.67 | $ | 0.73 | ||||||||||||||||||||||
| Earnings per share-diluted | 0.98 | 0.90 | 0.79 | 0.67 | 0.73 | |||||||||||||||||||||||||||
| Earnings per share-adjusted diluted (2) | 1.18 | 1.18 | 0.97 | 0.82 | 0.83 | |||||||||||||||||||||||||||
| Cash dividends declared | 0.450 | 0.450 | 0.450 | 0.450 | 0.450 | |||||||||||||||||||||||||||
| Common shareholders' equity | 45.17 | 46.52 | 45.86 | 45.74 | 45.49 | |||||||||||||||||||||||||||
| Tangible common shareholders' equity (2) | 25.53 | 26.78 | 26.63 | 26.38 | 26.00 | |||||||||||||||||||||||||||
| End of period shares outstanding | 1,344,845 | 1,348,961 | 1,348,118 | 1,347,609 | 1,347,461 | |||||||||||||||||||||||||||
| Weighted average shares outstanding-basic | 1,345,666 | 1,348,493 | 1,347,916 | 1,347,512 | 1,344,372 | |||||||||||||||||||||||||||
| Weighted average shares outstanding-diluted | 1,358,932 | 1,361,763 | 1,358,122 | 1,355,834 | 1,357,545 | |||||||||||||||||||||||||||
| Performance Ratios | ||||||||||||||||||||||||||||||||
| Return on average assets | 1.17 | % | 1.05 | % | 0.91 | % | 0.75 | % | 0.90 | % | ||||||||||||||||||||||
| Return on average risk-weighted assets (current quarter is preliminary) | 1.58 | 1.40 | 1.19 | 1.00 | 1.12 | |||||||||||||||||||||||||||
| Return on average common shareholders' equity | 8.69 | 7.88 | 6.87 | 5.90 | 6.58 | |||||||||||||||||||||||||||
| Return on average tangible common shareholders' equity (2) | 16.40 | 14.99 | 13.31 | 11.83 | 13.23 | |||||||||||||||||||||||||||
| Net interest margin - taxable equivalent | 3.01 | 3.08 | 3.10 | 3.13 | 3.58 | |||||||||||||||||||||||||||
| Fee income ratio | 40.1 | 40.4 | 39.7 | 41.3 | 34.9 | |||||||||||||||||||||||||||
| Efficiency ratio-GAAP | 65.8 | 67.8 | 67.4 | 66.1 | 61.1 | |||||||||||||||||||||||||||
| Efficiency ratio-adjusted (2) | 56.9 | 55.9 | 57.3 | 55.8 | 54.6 | |||||||||||||||||||||||||||
| Credit Quality | ||||||||||||||||||||||||||||||||
| Nonperforming assets as a percentage of: | ||||||||||||||||||||||||||||||||
| Assets | 0.25 | % | 0.27 | % | 0.26 | % | 0.25 | % | 0.23 | % | ||||||||||||||||||||||
| Loans and leases plus foreclosed property | 0.42 | 0.46 | 0.39 | 0.37 | 0.36 | |||||||||||||||||||||||||||
| Net charge-offs as a percentage of average loans and leases | 0.33 | 0.27 | 0.42 | 0.39 | 0.36 | |||||||||||||||||||||||||||
| Allowance for loan and lease losses as a percentage of LHFI | 1.94 | 1.95 | 1.91 | 1.81 | 1.63 | |||||||||||||||||||||||||||
| Ratio of allowance for loan and lease losses to nonperforming LHFI | 4.84x | 4.39x | 5.22x | 5.24x | 5.04x | |||||||||||||||||||||||||||
| Average Balances | ||||||||||||||||||||||||||||||||
| Assets | $ | 508,833 | $ | 503,181 | $ | 500,826 | $ | 514,720 | $ | 477,550 | ||||||||||||||||||||||
| Securities available for sale (3) | 122,246 | 102,053 | 79,828 | 75,159 | 75,701 | |||||||||||||||||||||||||||
| Loans and leases | 299,541 | 308,188 | 315,691 | 326,435 | 307,748 | |||||||||||||||||||||||||||
| Deposits | 383,185 | 375,266 | 372,211 | 370,818 | 334,649 | |||||||||||||||||||||||||||
| Common shareholders' equity | 62,252 | 61,991 | 61,804 | 61,484 | 60,224 | |||||||||||||||||||||||||||
| Total shareholders' equity | 70,047 | 70,145 | 69,634 | 66,863 | 65,412 | |||||||||||||||||||||||||||
| Period-End Balances | ||||||||||||||||||||||||||||||||
| Assets | $ | 517,537 | $ | 509,228 | $ | 499,183 | $ | 504,336 | $ | 506,229 | ||||||||||||||||||||||
| Securities available for sale (3) | 123,807 | 120,788 | 86,132 | 77,805 | 78,398 | |||||||||||||||||||||||||||
| Loans and leases | 297,179 | 305,793 | 312,149 | 321,148 | 324,039 | |||||||||||||||||||||||||||
| Deposits | 395,562 | 381,077 | 370,747 | 376,235 | 350,179 | |||||||||||||||||||||||||||
| Common shareholders' equity | 60,752 | 62,759 | 61,819 | 61,634 | 61,295 | |||||||||||||||||||||||||||
| Total shareholders' equity | 67,876 | 70,912 | 69,973 | 68,883 | 66,061 | |||||||||||||||||||||||||||
| Capital Ratios (current quarter is preliminary) | ||||||||||||||||||||||||||||||||
| Common equity Tier 1 | 10.1 | % | 10.0 | % | 10.0 | % | 9.7 | % | 9.3 | % | ||||||||||||||||||||||
| Tier 1 | 12.0 | 12.1 | 12.2 | 11.6 | 10.5 | |||||||||||||||||||||||||||
| Total | 14.3 | 14.5 | 14.6 | 14.0 | 12.7 | |||||||||||||||||||||||||||
| Leverage | 9.4 | 9.6 | 9.6 | 9.0 | 9.0 | |||||||||||||||||||||||||||
| Supplementary leverage | 8.3 | 8.7 | 8.9 | 8.5 | 7.8 | |||||||||||||||||||||||||||
| 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) Average balances reflect AFS securities at amortized cost. Period-end balances reflect AFS securities at fair value. | ||||||||||||||||||||||||||||||||
2 Truist Financial Corporation
| Consolidated Statements of Income | |||||||||||||||||||||||
| Quarter Ended | |||||||||||||||||||||||
| March 31 | Change | ||||||||||||||||||||||
| (Dollars in millions, except per share data, shares in thousands) | 2021 | 2020 | $ | % | |||||||||||||||||||
| Interest Income | |||||||||||||||||||||||
| Interest and fees on loans and leases | $ | 3,002 | $ | 3,776 | $ | (774) | (20.5) | % | |||||||||||||||
| Interest on securities | 443 | 494 | (51) | (10.3) | |||||||||||||||||||
| Interest on other earning assets | 49 | 156 | (107) | (68.6) | |||||||||||||||||||
| Total interest income | 3,494 | 4,426 | (932) | (21.1) | |||||||||||||||||||
| Interest Expense | |||||||||||||||||||||||
| Interest on deposits | 47 | 421 | (374) | (88.8) | |||||||||||||||||||
| Interest on long-term debt | 148 | 272 | (124) | (45.6) | |||||||||||||||||||
| Interest on other borrowings | 14 | 83 | (69) | (83.1) | |||||||||||||||||||
| Total interest expense | 209 | 776 | (567) | (73.1) | |||||||||||||||||||
| Net Interest Income | 3,285 | 3,650 | (365) | (10.0) | |||||||||||||||||||
| Provision for credit losses | 48 | 893 | (845) | (94.6) | |||||||||||||||||||
| Net Interest Income After Provision for Credit Losses | 3,237 | 2,757 | 480 | 17.4 | |||||||||||||||||||
| Noninterest Income | |||||||||||||||||||||||
| Insurance income | 626 | 549 | 77 | 14.0 | |||||||||||||||||||
| Wealth management income | 341 | 332 | 9 | 2.7 | |||||||||||||||||||
| Service charges on deposits | 258 | 305 | (47) | (15.4) | |||||||||||||||||||
| Residential mortgage income | 100 | 245 | (145) | (59.2) | |||||||||||||||||||
| Investment banking and trading income | 340 | 118 | 222 | 188.1 | |||||||||||||||||||
| Card and payment related fees | 200 | 187 | 13 | 7.0 | |||||||||||||||||||
| Lending related fees | 100 | 67 | 33 | 49.3 | |||||||||||||||||||
| Operating lease income | 68 | 77 | (9) | (11.7) | |||||||||||||||||||
| Commercial real estate related income | 43 | 44 | (1) | (2.3) | |||||||||||||||||||
| Income from bank-owned life insurance | 50 | 44 | 6 | 13.6 | |||||||||||||||||||
| Securities gains (losses) | — | (2) | 2 | NM | |||||||||||||||||||
| Other income (loss) | 71 | (5) | 76 | NM | |||||||||||||||||||
| Total noninterest income | 2,197 | 1,961 | 236 | 12.0 | |||||||||||||||||||
| Noninterest Expense | |||||||||||||||||||||||
| Personnel expense | 2,142 | 1,972 | 170 | 8.6 | |||||||||||||||||||
| Professional fees and outside processing | 350 | 247 | 103 | 41.7 | |||||||||||||||||||
| Net occupancy expense | 209 | 221 | (12) | (5.4) | |||||||||||||||||||
| Software expense | 210 | 210 | — | — | |||||||||||||||||||
| Amortization of intangibles | 144 | 165 | (21) | (12.7) | |||||||||||||||||||
| Equipment expense | 113 | 116 | (3) | (2.6) | |||||||||||||||||||
| Marketing and customer development | 66 | 84 | (18) | (21.4) | |||||||||||||||||||
| Operating lease depreciation | 50 | 71 | (21) | (29.6) | |||||||||||||||||||
| Loan-related expense | 54 | 62 | (8) | (12.9) | |||||||||||||||||||
| Regulatory costs | 25 | 29 | (4) | (13.8) | |||||||||||||||||||
| Merger-related and restructuring charges | 141 | 107 | 34 | 31.8 | |||||||||||||||||||
| Loss (gain) on early extinguishment of debt | (3) | — | (3) | NM | |||||||||||||||||||
| Other expense | 109 | 147 | (38) | (25.9) | |||||||||||||||||||
| Total noninterest expense | 3,610 | 3,431 | 179 | 5.2 | |||||||||||||||||||
| Earnings | |||||||||||||||||||||||
| Income before income taxes | 1,824 | 1,287 | 537 | 41.7 | |||||||||||||||||||
| Provision for income taxes | 351 | 224 | 127 | 56.7 | |||||||||||||||||||
| Net income | 1,473 | 1,063 | 410 | 38.6 | |||||||||||||||||||
| Noncontrolling interests | (4) | 3 | (7) | NM | |||||||||||||||||||
| Net income available to the bank holding company | 1,477 | 1,060 | 417 | 39.3 | |||||||||||||||||||
| Preferred stock dividends and other | 143 | 74 | 69 | 93.2 | |||||||||||||||||||
| Net income available to common shareholders | $ | 1,334 | $ | 986 | $ | 348 | 35.3 | % | |||||||||||||||
| Earnings Per Common Share | |||||||||||||||||||||||
| Basic | $ | 0.99 | $ | 0.73 | $ | 0.26 | 35.6 | % | |||||||||||||||
| Diluted | 0.98 | 0.73 | 0.25 | 34.2 | |||||||||||||||||||
| Weighted Average Shares Outstanding | |||||||||||||||||||||||
| Basic | 1,345,666 | 1,344,372 | 1,294 | 0.1 | |||||||||||||||||||
| Diluted | 1,358,932 | 1,357,545 | 1,387 | 0.1 | |||||||||||||||||||
| NM - not meaningful | |||||||||||||||||||||||
Truist Financial Corporation 3
| 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) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||||
| Interest Income | ||||||||||||||||||||||||||||||||
| Interest and fees on loans and leases | $ | 3,002 | $ | 3,158 | $ | 3,174 | $ | 3,377 | $ | 3,776 | ||||||||||||||||||||||
| Interest on securities | 443 | 408 | 393 | 444 | 494 | |||||||||||||||||||||||||||
| Interest on other earning assets | 49 | 45 | 56 | 67 | 156 | |||||||||||||||||||||||||||
| Total interest income | 3,494 | 3,611 | 3,623 | 3,888 | 4,426 | |||||||||||||||||||||||||||
| Interest Expense | ||||||||||||||||||||||||||||||||
| Interest on deposits | 47 | 67 | 96 | 201 | 421 | |||||||||||||||||||||||||||
| Interest on long-term debt | 148 | 165 | 152 | 211 | 272 | |||||||||||||||||||||||||||
| Interest on other borrowings | 14 | 13 | 13 | 28 | 83 | |||||||||||||||||||||||||||
| Total interest expense | 209 | 245 | 261 | 440 | 776 | |||||||||||||||||||||||||||
| Net Interest Income | 3,285 | 3,366 | 3,362 | 3,448 | 3,650 | |||||||||||||||||||||||||||
| Provision for credit losses | 48 | 177 | 421 | 844 | 893 | |||||||||||||||||||||||||||
| Net Interest Income After Provision for Credit Losses | 3,237 | 3,189 | 2,941 | 2,604 | 2,757 | |||||||||||||||||||||||||||
| Noninterest Income | ||||||||||||||||||||||||||||||||
| Insurance income | 626 | 545 | 518 | 581 | 549 | |||||||||||||||||||||||||||
| Wealth management income | 341 | 332 | 324 | 289 | 332 | |||||||||||||||||||||||||||
| Service charges on deposits | 258 | 266 | 247 | 202 | 305 | |||||||||||||||||||||||||||
| Residential mortgage income | 100 | 193 | 221 | 341 | 245 | |||||||||||||||||||||||||||
| Investment banking and trading income | 340 | 308 | 244 | 274 | 118 | |||||||||||||||||||||||||||
| Card and payment related fees | 200 | 203 | 200 | 171 | 187 | |||||||||||||||||||||||||||
| Lending related fees | 100 | 105 | 77 | 66 | 67 | |||||||||||||||||||||||||||
| Operating lease income | 68 | 77 | 72 | 83 | 77 | |||||||||||||||||||||||||||
| Commercial real estate related income | 43 | 123 | 55 | 49 | 44 | |||||||||||||||||||||||||||
| Income from bank-owned life insurance | 50 | 44 | 46 | 45 | 44 | |||||||||||||||||||||||||||
| Securities gains (losses) | — | — | 104 | 300 | (2) | |||||||||||||||||||||||||||
| Other income (loss) | 71 | 89 | 102 | 22 | (5) | |||||||||||||||||||||||||||
| Total noninterest income | 2,197 | 2,285 | 2,210 | 2,423 | 1,961 | |||||||||||||||||||||||||||
| Noninterest Expense | ||||||||||||||||||||||||||||||||
| Personnel expense | 2,142 | 2,108 | 2,058 | 2,008 | 1,972 | |||||||||||||||||||||||||||
| Professional fees and outside processing | 350 | 393 | 323 | 289 | 247 | |||||||||||||||||||||||||||
| Net occupancy expense | 209 | 207 | 233 | 243 | 221 | |||||||||||||||||||||||||||
| Software expense | 210 | 215 | 221 | 216 | 210 | |||||||||||||||||||||||||||
| Amortization of intangibles | 144 | 172 | 170 | 178 | 165 | |||||||||||||||||||||||||||
| Equipment expense | 113 | 121 | 127 | 120 | 116 | |||||||||||||||||||||||||||
| Marketing and customer development | 66 | 58 | 75 | 56 | 84 | |||||||||||||||||||||||||||
| Operating lease depreciation | 50 | 54 | 56 | 77 | 71 | |||||||||||||||||||||||||||
| Loan-related expense | 54 | 65 | 59 | 56 | 62 | |||||||||||||||||||||||||||
| Regulatory costs | 25 | 32 | 34 | 30 | 29 | |||||||||||||||||||||||||||
| Merger-related and restructuring charges | 141 | 308 | 236 | 209 | 107 | |||||||||||||||||||||||||||
| Loss (gain) on early extinguishment of debt | (3) | — | — | 235 | — | |||||||||||||||||||||||||||
| Other expense | 109 | 100 | 163 | 161 | 147 | |||||||||||||||||||||||||||
| Total noninterest expense | 3,610 | 3,833 | 3,755 | 3,878 | 3,431 | |||||||||||||||||||||||||||
| Earnings | ||||||||||||||||||||||||||||||||
| Income before income taxes | 1,824 | 1,641 | 1,396 | 1,149 | 1,287 | |||||||||||||||||||||||||||
| Provision for income taxes | 351 | 311 | 255 | 191 | 224 | |||||||||||||||||||||||||||
| Net income | 1,473 | 1,330 | 1,141 | 958 | 1,063 | |||||||||||||||||||||||||||
| Noncontrolling interests | (4) | 1 | 3 | 3 | 3 | |||||||||||||||||||||||||||
| Net income available to the bank holding company | 1,477 | 1,329 | 1,138 | 955 | 1,060 | |||||||||||||||||||||||||||
| Preferred stock dividends and other | 143 | 101 | 70 | 53 | 74 | |||||||||||||||||||||||||||
| Net income available to common shareholders | $ | 1,334 | $ | 1,228 | $ | 1,068 | $ | 902 | $ | 986 | ||||||||||||||||||||||
| Earnings Per Common Share | ||||||||||||||||||||||||||||||||
| Basic | $ | 0.99 | $ | 0.91 | $ | 0.79 | $ | 0.67 | $ | 0.73 | ||||||||||||||||||||||
| Diluted | 0.98 | 0.90 | 0.79 | 0.67 | 0.73 | |||||||||||||||||||||||||||
| Weighted Average Shares Outstanding | ||||||||||||||||||||||||||||||||
| Basic | 1,345,666 | 1,348,493 | 1,347,916 | 1,347,512 | 1,344,372 | |||||||||||||||||||||||||||
| Diluted | 1,358,932 | 1,361,763 | 1,358,122 | 1,355,834 | 1,357,545 | |||||||||||||||||||||||||||
4 Truist Financial Corporation
| Segment Financial Performance - Preliminary | ||||||||||||||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||||||||||||||||||||||||
| (Dollars in millions) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||||
| Consumer Banking and Wealth | ||||||||||||||||||||||||||||||||
| Net interest income (expense) | $ | 1,752 | $ | 1,818 | $ | 1,856 | $ | 1,843 | $ | 1,860 | ||||||||||||||||||||||
| Net intersegment interest income (expense) | 386 | 382 | 344 | 322 | 397 | |||||||||||||||||||||||||||
| Segment net interest income | 2,138 | 2,200 | 2,200 | 2,165 | 2,257 | |||||||||||||||||||||||||||
| Allocated provision for credit losses | 100 | 116 | 181 | 270 | 437 | |||||||||||||||||||||||||||
| Noninterest income | 921 | 994 | 990 | 1,006 | 1,066 | |||||||||||||||||||||||||||
| Noninterest expense | 1,910 | 1,960 | 1,939 | 1,988 | 2,004 | |||||||||||||||||||||||||||
| Income (loss) before income taxes | 1,049 | 1,118 | 1,070 | 913 | 882 | |||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 246 | 264 | 253 | 216 | 207 | |||||||||||||||||||||||||||
| Segment net income (loss) | $ | 803 | $ | 854 | $ | 817 | $ | 697 | $ | 675 | ||||||||||||||||||||||
| Corporate and Commercial Banking | ||||||||||||||||||||||||||||||||
| Net interest income (expense) | $ | 1,208 | $ | 1,271 | $ | 1,235 | $ | 1,351 | $ | 1,534 | ||||||||||||||||||||||
| Net intersegment interest income (expense) | 1 | 11 | 36 | (63) | (211) | |||||||||||||||||||||||||||
| Segment net interest income | 1,209 | 1,282 | 1,271 | 1,288 | 1,323 | |||||||||||||||||||||||||||
| Allocated provision for credit losses | (35) | 60 | 311 | 534 | 399 | |||||||||||||||||||||||||||
| Noninterest income | 694 | 789 | 609 | 621 | 457 | |||||||||||||||||||||||||||
| Noninterest expense | 782 | 831 | 843 | 867 | 869 | |||||||||||||||||||||||||||
| Income (loss) before income taxes | 1,156 | 1,180 | 726 | 508 | 512 | |||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 248 | 258 | 146 | 94 | 91 | |||||||||||||||||||||||||||
| Segment net income (loss) | $ | 908 | $ | 922 | $ | 580 | $ | 414 | $ | 421 | ||||||||||||||||||||||
| Insurance Holdings | ||||||||||||||||||||||||||||||||
| Net interest income (expense) | $ | 24 | $ | 26 | $ | 31 | $ | 33 | $ | 36 | ||||||||||||||||||||||
| Net intersegment interest income (expense) | (4) | (4) | (7) | (10) | (11) | |||||||||||||||||||||||||||
| Segment net interest income | 20 | 22 | 24 | 23 | 25 | |||||||||||||||||||||||||||
| Allocated provision for credit losses | 1 | 2 | — | 6 | 1 | |||||||||||||||||||||||||||
| Noninterest income | 633 | 562 | 524 | 598 | 557 | |||||||||||||||||||||||||||
| Noninterest expense | 479 | 451 | 446 | 448 | 440 | |||||||||||||||||||||||||||
| Income (loss) before income taxes | 173 | 131 | 102 | 167 | 141 | |||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 42 | 32 | 25 | 41 | 36 | |||||||||||||||||||||||||||
| Segment net income (loss) | $ | 131 | $ | 99 | $ | 77 | $ | 126 | $ | 105 | ||||||||||||||||||||||
| Other, Treasury & Corporate (1) | ||||||||||||||||||||||||||||||||
| Net interest income (expense) | $ | 301 | $ | 251 | $ | 240 | $ | 221 | $ | 220 | ||||||||||||||||||||||
| Net intersegment interest income (expense) | (383) | (389) | (373) | (249) | (175) | |||||||||||||||||||||||||||
| Segment net interest income | (82) | (138) | (133) | (28) | 45 | |||||||||||||||||||||||||||
| Allocated provision for credit losses | (18) | (1) | (71) | 34 | 56 | |||||||||||||||||||||||||||
| Noninterest income | (51) | (60) | 87 | 198 | (119) | |||||||||||||||||||||||||||
| Noninterest expense | 439 | 591 | 527 | 575 | 118 | |||||||||||||||||||||||||||
| Income (loss) before income taxes | (554) | (788) | (502) | (439) | (248) | |||||||||||||||||||||||||||
| Provision (benefit) for income taxes | (185) | (243) | (169) | (160) | (110) | |||||||||||||||||||||||||||
| Segment net income (loss) | $ | (369) | $ | (545) | $ | (333) | $ | (279) | $ | (138) | ||||||||||||||||||||||
| Total Truist Financial Corporation | ||||||||||||||||||||||||||||||||
| Net interest income (expense) | $ | 3,285 | $ | 3,366 | $ | 3,362 | $ | 3,448 | $ | 3,650 | ||||||||||||||||||||||
| Net intersegment interest income (expense) | — | — | — | — | — | |||||||||||||||||||||||||||
| Segment net interest income | 3,285 | 3,366 | 3,362 | 3,448 | 3,650 | |||||||||||||||||||||||||||
| Allocated provision for credit losses | 48 | 177 | 421 | 844 | 893 | |||||||||||||||||||||||||||
| Noninterest income | 2,197 | 2,285 | 2,210 | 2,423 | 1,961 | |||||||||||||||||||||||||||
| Noninterest expense | 3,610 | 3,833 | 3,755 | 3,878 | 3,431 | |||||||||||||||||||||||||||
| Income (loss) before income taxes | 1,824 | 1,641 | 1,396 | 1,149 | 1,287 | |||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 351 | 311 | 255 | 191 | 224 | |||||||||||||||||||||||||||
| Net income | $ | 1,473 | $ | 1,330 | $ | 1,141 | $ | 958 | $ | 1,063 | ||||||||||||||||||||||
(1) Includes financial data from subsidiaries below the quantitative and qualitative thresholds requiring disclosure. | ||||||||||||||||||||||||||||||||
Truist Financial Corporation 5
| Consolidated Ending Balance Sheets - Five Quarter Trend | ||||||||||||||||||||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||||||||||||||||||||||||
| (Dollars in millions) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Cash and due from banks | $ | 5,097 | $ | 5,029 | $ | 4,194 | $ | 5,116 | $ | 5,312 | ||||||||||||||||||||||
| Interest-bearing deposits with banks | 27,035 | 13,839 | 32,914 | 36,081 | 31,036 | |||||||||||||||||||||||||||
| Securities borrowed or purchased under resale agreements | 1,349 | 1,745 | 1,300 | 1,345 | 1,796 | |||||||||||||||||||||||||||
| Trading assets at fair value | 5,094 | 3,872 | 4,670 | 3,824 | 3,863 | |||||||||||||||||||||||||||
| Securities available for sale at fair value | 123,807 | 120,788 | 86,132 | 77,805 | 78,398 | |||||||||||||||||||||||||||
| Loans and leases: | ||||||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||
| Commercial and industrial | 135,432 | 138,354 | 140,874 | 147,141 | 149,161 | |||||||||||||||||||||||||||
| CRE | 25,899 | 26,595 | 27,474 | 27,963 | 27,532 | |||||||||||||||||||||||||||
| Commercial construction | 6,559 | 6,491 | 6,772 | 6,891 | 6,630 | |||||||||||||||||||||||||||
| Lease financing | 4,883 | 5,240 | 5,493 | 5,783 | 5,984 | |||||||||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||||
| Residential mortgage | 44,298 | 47,272 | 50,379 | 51,671 | 53,096 | |||||||||||||||||||||||||||
| Residential home equity and direct | 25,333 | 26,064 | 26,558 | 26,935 | 27,629 | |||||||||||||||||||||||||||
| Indirect auto | 26,438 | 26,150 | 25,269 | 24,509 | 25,146 | |||||||||||||||||||||||||||
| Indirect other | 10,631 | 11,177 | 11,527 | 11,592 | 10,980 | |||||||||||||||||||||||||||
| Student | 7,478 | 7,552 | 7,480 | 7,484 | 7,771 | |||||||||||||||||||||||||||
| Credit card | 4,560 | 4,839 | 4,801 | 4,856 | 5,300 | |||||||||||||||||||||||||||
| Total loans and leases held for investment | 291,511 | 299,734 | 306,627 | 314,825 | 319,229 | |||||||||||||||||||||||||||
| Loans held for sale | 5,668 | 6,059 | 5,522 | 6,323 | 4,810 | |||||||||||||||||||||||||||
| Total loans and leases | 297,179 | 305,793 | 312,149 | 321,148 | 324,039 | |||||||||||||||||||||||||||
| Allowance for loan and lease losses | (5,662) | (5,835) | (5,863) | (5,702) | (5,211) | |||||||||||||||||||||||||||
| Premises and equipment | 3,787 | 3,870 | 3,968 | 4,002 | 3,999 | |||||||||||||||||||||||||||
| Goodwill | 24,356 | 24,447 | 23,869 | 23,882 | 23,927 | |||||||||||||||||||||||||||
| Core deposit and other intangible assets | 2,825 | 2,984 | 2,840 | 3,016 | 3,168 | |||||||||||||||||||||||||||
| Mortgage servicing rights | 2,365 | 2,023 | 1,991 | 2,077 | 2,150 | |||||||||||||||||||||||||||
| Other assets | 30,305 | 30,673 | 31,019 | 31,742 | 33,752 | |||||||||||||||||||||||||||
| Total assets | $ | 517,537 | $ | 509,228 | $ | 499,183 | $ | 504,336 | $ | 506,229 | ||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | $ | 136,555 | $ | 127,629 | $ | 124,297 | $ | 122,694 | $ | 97,618 | ||||||||||||||||||||||
| Interest checking | 107,082 | 105,269 | 98,694 | 99,005 | 92,950 | |||||||||||||||||||||||||||
| Money market and savings | 132,733 | 126,238 | 121,856 | 123,974 | 124,072 | |||||||||||||||||||||||||||
| Time deposits | 19,192 | 21,941 | 25,900 | 30,562 | 35,539 | |||||||||||||||||||||||||||
| Foreign office deposits - interest-bearing | — | — | — | — | — | |||||||||||||||||||||||||||
| Total deposits | 395,562 | 381,077 | 370,747 | 376,235 | 350,179 | |||||||||||||||||||||||||||
| Short-term borrowings | 5,889 | 6,092 | 6,244 | 5,700 | 12,696 | |||||||||||||||||||||||||||
| Long-term debt | 37,753 | 39,597 | 41,008 | 42,133 | 65,662 | |||||||||||||||||||||||||||
| Other liabilities | 10,457 | 11,550 | 11,211 | 11,385 | 11,631 | |||||||||||||||||||||||||||
| Total liabilities | 449,661 | 438,316 | 429,210 | 435,453 | 440,168 | |||||||||||||||||||||||||||
| Shareholders' Equity: | ||||||||||||||||||||||||||||||||
| Preferred stock | 7,124 | 8,048 | 8,048 | 7,143 | 4,599 | |||||||||||||||||||||||||||
| Common stock | 6,724 | 6,745 | 6,741 | 6,738 | 6,737 | |||||||||||||||||||||||||||
| Additional paid-in capital | 35,360 | 35,843 | 35,774 | 35,676 | 35,584 | |||||||||||||||||||||||||||
| Retained earnings | 20,184 | 19,455 | 18,834 | 18,373 | 18,076 | |||||||||||||||||||||||||||
| Accumulated other comprehensive loss | (1,516) | 716 | 470 | 847 | 898 | |||||||||||||||||||||||||||
| Noncontrolling interests | — | 105 | 106 | 106 | 167 | |||||||||||||||||||||||||||
| Total shareholders' equity | 67,876 | 70,912 | 69,973 | 68,883 | 66,061 | |||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 517,537 | $ | 509,228 | $ | 499,183 | $ | 504,336 | $ | 506,229 | ||||||||||||||||||||||
6 Truist Financial Corporation
| Average Balance Sheets | |||||||||||||||||||||||
| Quarter Ended | |||||||||||||||||||||||
| March 31 | Change | ||||||||||||||||||||||
| (Dollars in millions) | 2021 | 2020 | $ | % | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Securities available for sale at amortized cost: | |||||||||||||||||||||||
| U.S. Treasury | $ | 1,759 | $ | 2,274 | $ | (515) | (22.6) | % | |||||||||||||||
| U.S. government-sponsored entities (GSE) | 1,839 | 1,856 | (17) | (0.9) | |||||||||||||||||||
| Mortgage-backed securities issued by GSE | 118,171 | 70,816 | 47,355 | 66.9 | |||||||||||||||||||
| States and political subdivisions | 444 | 530 | (86) | (16.2) | |||||||||||||||||||
| Non-agency mortgage-backed | — | 185 | (185) | (100.0) | |||||||||||||||||||
| Other | 33 | 40 | (7) | (17.5) | |||||||||||||||||||
| Total securities | 122,246 | 75,701 | 46,545 | 61.5 | |||||||||||||||||||
| Loans and leases: | |||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||
| Commercial and industrial | 136,051 | 131,743 | 4,308 | 3.3 | |||||||||||||||||||
| CRE | 26,211 | 27,046 | (835) | (3.1) | |||||||||||||||||||
| Commercial construction | 6,557 | 6,409 | 148 | 2.3 | |||||||||||||||||||
| Lease financing | 4,975 | 6,070 | (1,095) | (18.0) | |||||||||||||||||||
| Consumer: | |||||||||||||||||||||||
| Residential mortgage | 45,823 | 52,993 | (7,170) | (13.5) | |||||||||||||||||||
| Residential home equity and direct | 25,658 | 27,564 | (1,906) | (6.9) | |||||||||||||||||||
| Indirect auto | 26,363 | 24,975 | 1,388 | 5.6 | |||||||||||||||||||
| Indirect other | 10,848 | 10,950 | (102) | (0.9) | |||||||||||||||||||
| Student | 7,519 | 7,787 | (268) | (3.4) | |||||||||||||||||||
| Credit card | 4,645 | 5,534 | (889) | (16.1) | |||||||||||||||||||
| Total loans and leases held for investment | 294,650 | 301,071 | (6,421) | (2.1) | |||||||||||||||||||
| Loans held for sale | 4,891 | 6,677 | (1,786) | (26.7) | |||||||||||||||||||
| Total loans and leases | 299,541 | 307,748 | (8,207) | (2.7) | |||||||||||||||||||
| Interest earning trading assets | 4,742 | 6,334 | (1,592) | (25.1) | |||||||||||||||||||
| Other earning assets | 17,417 | 23,750 | (6,333) | (26.7) | |||||||||||||||||||
| Total earning assets | 443,946 | 413,533 | 30,413 | 7.4 | |||||||||||||||||||
| Nonearning assets | 64,887 | 64,017 | 870 | 1.4 | |||||||||||||||||||
| Total assets | $ | 508,833 | $ | 477,550 | $ | 31,283 | 6.6 | % | |||||||||||||||
| Liabilities and Shareholders' Equity | |||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||
| Noninterest-bearing deposits | $ | 128,579 | $ | 93,135 | $ | 35,444 | 38.1 | % | |||||||||||||||
| Interest checking | 104,744 | 85,008 | 19,736 | 23.2 | |||||||||||||||||||
| Money market and savings | 129,303 | 120,936 | 8,367 | 6.9 | |||||||||||||||||||
| Time deposits | 20,559 | 35,570 | (15,011) | (42.2) | |||||||||||||||||||
| Total deposits | 383,185 | 334,649 | 48,536 | 14.5 | |||||||||||||||||||
| Short-term borrowings | 6,731 | 18,900 | (12,169) | (64.4) | |||||||||||||||||||
| Long-term debt | 37,820 | 46,547 | (8,727) | (18.7) | |||||||||||||||||||
| Other liabilities | 11,050 | 12,042 | (992) | (8.2) | |||||||||||||||||||
| Total liabilities | 438,786 | 412,138 | 26,648 | 6.5 | |||||||||||||||||||
| Shareholders' equity | 70,047 | 65,412 | 4,635 | 7.1 | |||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 508,833 | $ | 477,550 | $ | 31,283 | 6.6 | % | |||||||||||||||
| Average balances exclude basis adjustments for fair value hedges. | |||||||||||||||||||||||
| NM - not meaningful | |||||||||||||||||||||||
Truist Financial Corporation 7
| Average Balance Sheets - Five Quarter Trend | ||||||||||||||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||||||||||||||||||||||||
| (Dollars in millions) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Securities available for sale at amortized cost: | ||||||||||||||||||||||||||||||||
| U.S. Treasury | $ | 1,759 | $ | 2,049 | $ | 2,218 | $ | 2,237 | $ | 2,274 | ||||||||||||||||||||||
| U.S. government-sponsored entities (GSE) | 1,839 | 1,841 | 1,842 | 1,844 | 1,856 | |||||||||||||||||||||||||||
| Mortgage-backed securities issued by GSE | 118,171 | 97,660 | 75,232 | 70,374 | 70,816 | |||||||||||||||||||||||||||
| States and political subdivisions | 444 | 469 | 499 | 505 | 530 | |||||||||||||||||||||||||||
| Non-agency mortgage-backed | — | — | — | 162 | 185 | |||||||||||||||||||||||||||
| Other | 33 | 34 | 37 | 37 | 40 | |||||||||||||||||||||||||||
| Total securities | 122,246 | 102,053 | 79,828 | 75,159 | 75,701 | |||||||||||||||||||||||||||
| Loans and leases: | ||||||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||
| Commercial and industrial | 136,051 | 139,223 | 143,452 | 152,991 | 131,743 | |||||||||||||||||||||||||||
| CRE | 26,211 | 27,030 | 27,761 | 27,804 | 27,046 | |||||||||||||||||||||||||||
| Commercial construction | 6,557 | 6,616 | 6,861 | 6,748 | 6,409 | |||||||||||||||||||||||||||
| Lease financing | 4,975 | 5,401 | 5,626 | 5,922 | 6,070 | |||||||||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||||
| Residential mortgage | 45,823 | 48,847 | 51,500 | 52,380 | 52,993 | |||||||||||||||||||||||||||
| Residential home equity and direct | 25,658 | 26,327 | 26,726 | 27,199 | 27,564 | |||||||||||||||||||||||||||
| Indirect auto | 26,363 | 25,788 | 24,732 | 24,721 | 24,975 | |||||||||||||||||||||||||||
| Indirect other | 10,848 | 11,291 | 11,530 | 11,282 | 10,950 | |||||||||||||||||||||||||||
| Student | 7,519 | 7,519 | 7,446 | 7,633 | 7,787 | |||||||||||||||||||||||||||
| Credit card | 4,645 | 4,818 | 4,810 | 4,949 | 5,534 | |||||||||||||||||||||||||||
| Total loans and leases held for investment | 294,650 | 302,860 | 310,444 | 321,629 | 301,071 | |||||||||||||||||||||||||||
| Loans held for sale | 4,891 | 5,328 | 5,247 | 4,806 | 6,677 | |||||||||||||||||||||||||||
| Total loans and leases | 299,541 | 308,188 | 315,691 | 326,435 | 307,748 | |||||||||||||||||||||||||||
| Interest earning trading assets | 4,742 | 4,538 | 4,056 | 3,700 | 6,334 | |||||||||||||||||||||||||||
| Other earning assets | 17,417 | 23,887 | 35,819 | 41,531 | 23,750 | |||||||||||||||||||||||||||
| Total earning assets | 443,946 | 438,666 | 435,394 | 446,825 | 413,533 | |||||||||||||||||||||||||||
| Nonearning assets | 64,887 | 64,515 | 65,432 | 67,895 | 64,017 | |||||||||||||||||||||||||||
| Total assets | $ | 508,833 | $ | 503,181 | $ | 500,826 | $ | 514,720 | $ | 477,550 | ||||||||||||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | $ | 128,579 | $ | 127,103 | $ | 123,966 | $ | 113,875 | $ | 93,135 | ||||||||||||||||||||||
| Interest checking | 104,744 | 99,866 | 96,707 | 97,863 | 85,008 | |||||||||||||||||||||||||||
| Money market and savings | 129,303 | 124,692 | 123,598 | 126,071 | 120,936 | |||||||||||||||||||||||||||
| Time deposits | 20,559 | 23,605 | 27,940 | 33,009 | 35,570 | |||||||||||||||||||||||||||
| Total deposits | 383,185 | 375,266 | 372,211 | 370,818 | 334,649 | |||||||||||||||||||||||||||
| Short-term borrowings | 6,731 | 6,493 | 6,209 | 8,998 | 18,900 | |||||||||||||||||||||||||||
| Long-term debt | 37,820 | 40,284 | 40,919 | 55,537 | 46,547 | |||||||||||||||||||||||||||
| Other liabilities | 11,050 | 10,993 | 11,853 | 12,504 | 12,042 | |||||||||||||||||||||||||||
| Total liabilities | 438,786 | 433,036 | 431,192 | 447,857 | 412,138 | |||||||||||||||||||||||||||
| Shareholders' equity | 70,047 | 70,145 | 69,634 | 66,863 | 65,412 | |||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 508,833 | $ | 503,181 | $ | 500,826 | $ | 514,720 | $ | 477,550 | ||||||||||||||||||||||
| Average balances exclude basis adjustments for fair value hedges. | ||||||||||||||||||||||||||||||||
8 Truist Financial Corporation
| Average Balances and Rates - Quarters | ||||||||||||||||||||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||||||||||||||||
| March 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||||||||
| (1) | (2) Interest | (2) | (1) | (2) Interest | (2) | |||||||||||||||||||||||||||||||||
| Average | Income/ | Yields/ | Average | Income/ | Yields/ | |||||||||||||||||||||||||||||||||
| (Dollars in millions) | Balances | Expense | Rates | Balances | Expense | Rates | ||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||
| Securities available for sale at amortized cost: | ||||||||||||||||||||||||||||||||||||||
| U.S. Treasury | $ | 1,759 | $ | 4 | 0.89 | % | $ | 2,049 | $ | 9 | 1.62 | % | ||||||||||||||||||||||||||
| U.S. government-sponsored entities (GSE) | 1,839 | 11 | 2.33 | 1,841 | 11 | 2.33 | ||||||||||||||||||||||||||||||||
| Mortgage-backed securities issued by GSE | 118,171 | 426 | 1.44 | 97,660 | 385 | 1.58 | ||||||||||||||||||||||||||||||||
| States and political subdivisions | 444 | 4 | 3.52 | 469 | 3 | 3.52 | ||||||||||||||||||||||||||||||||
| Other | 33 | — | 1.92 | 34 | — | 1.98 | ||||||||||||||||||||||||||||||||
| Total securities | 122,246 | 445 | 1.45 | 102,053 | 408 | 1.60 | ||||||||||||||||||||||||||||||||
| Loans and leases: | ||||||||||||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | 136,051 | 1,040 | 3.10 | 139,223 | 1,091 | 3.12 | ||||||||||||||||||||||||||||||||
| CRE | 26,211 | 189 | 2.90 | 27,030 | 197 | 2.88 | ||||||||||||||||||||||||||||||||
| Commercial construction | 6,557 | 48 | 3.04 | 6,616 | 51 | 3.13 | ||||||||||||||||||||||||||||||||
| Lease financing | 4,975 | 53 | 4.28 | 5,401 | 65 | 4.82 | ||||||||||||||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||||||||||
| Residential mortgage | 45,823 | 507 | 4.42 | 48,847 | 542 | 4.44 | ||||||||||||||||||||||||||||||||
| Residential home equity and direct | 25,658 | 368 | 5.81 | 26,327 | 388 | 5.86 | ||||||||||||||||||||||||||||||||
| Indirect auto | 26,363 | 426 | 6.56 | 25,788 | 416 | 6.41 | ||||||||||||||||||||||||||||||||
| Indirect other | 10,848 | 187 | 6.98 | 11,291 | 195 | 6.87 | ||||||||||||||||||||||||||||||||
| Student | 7,519 | 73 | 3.96 | 7,519 | 80 | 4.23 | ||||||||||||||||||||||||||||||||
| Credit card | 4,645 | 106 | 9.24 | 4,818 | 114 | 9.35 | ||||||||||||||||||||||||||||||||
| Total loans and leases held for investment | 294,650 | 2,997 | 4.11 | 302,860 | 3,139 | 4.13 | ||||||||||||||||||||||||||||||||
| Loans held for sale | 4,891 | 32 | 2.59 | 5,328 | 47 | 3.54 | ||||||||||||||||||||||||||||||||
| Total loans and leases | 299,541 | 3,029 | 4.09 | 308,188 | 3,186 | 4.12 | ||||||||||||||||||||||||||||||||
| Interest earning trading assets | 4,742 | 32 | 2.79 | 4,538 | 33 | 2.89 | ||||||||||||||||||||||||||||||||
| Other earning assets | 17,417 | 16 | 0.37 | 23,887 | 12 | 0.20 | ||||||||||||||||||||||||||||||||
| Total earning assets | 443,946 | 3,522 | 3.20 | 438,666 | 3,639 | 3.31 | ||||||||||||||||||||||||||||||||
| Nonearning assets | 64,887 | 64,515 | ||||||||||||||||||||||||||||||||||||
| Total assets | $ | 508,833 | $ | 503,181 | ||||||||||||||||||||||||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||||
| Interest checking | $ | 104,744 | 15 | 0.06 | $ | 99,866 | 17 | 0.07 | ||||||||||||||||||||||||||||||
| Money market and savings | 129,303 | 10 | 0.03 | 124,692 | 10 | 0.03 | ||||||||||||||||||||||||||||||||
| Time deposits | 20,559 | 22 | 0.44 | 23,605 | 40 | 0.66 | ||||||||||||||||||||||||||||||||
| Total interest-bearing deposits (3) | 254,606 | 47 | 0.07 | 248,163 | 67 | 0.11 | ||||||||||||||||||||||||||||||||
| Short-term borrowings | 6,731 | 14 | 0.82 | 6,493 | 13 | 0.77 | ||||||||||||||||||||||||||||||||
| Long-term debt | 37,820 | 148 | 1.57 | 40,284 | 165 | 1.64 | ||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 299,157 | 209 | 0.28 | 294,940 | 245 | 0.33 | ||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits (3) | 128,579 | 127,103 | ||||||||||||||||||||||||||||||||||||
| Other liabilities | 11,050 | 10,993 | ||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 70,047 | 70,145 | ||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 508,833 | $ | 503,181 | ||||||||||||||||||||||||||||||||||
| Average interest-rate spread | 2.92 | 2.98 | ||||||||||||||||||||||||||||||||||||
| Net interest income/ net interest margin | $ | 3,313 | 3.01 | % | $ | 3,394 | 3.08 | % | ||||||||||||||||||||||||||||||
| Taxable-equivalent adjustment | $ | 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) Total deposit costs were 0.05% and 0.07% for the three months ended March 31, 2021 and December 31, 2020, respectively. | ||||||||||||||||||||||||||||||||||||||
Truist Financial Corporation 9
| Average Balances and Rates - Quarters | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2020 | June 30, 2020 | March 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | (2) Interest | (2) | (1) | (2) Interest | (2) | (1) | (2) Interest | (2) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Average | Income/ | Yields/ | Average | Income/ | Yields/ | Average | Income/ | Yields/ | ||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | Balances | Expense | Rates | Balances | Expense | Rates | Balances | Expense | Rates | |||||||||||||||||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Securities available for sale at amortized cost: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury | $ | 2,218 | $ | 10 | 1.78 | % | $ | 2,237 | $ | 10 | 1.88 | % | $ | 2,274 | $ | 11 | 1.93 | % | ||||||||||||||||||||||||||||||||||||||
| U.S. government-sponsored entities (GSE) | 1,842 | 10 | 2.33 | 1,844 | 12 | 2.33 | 1,856 | 10 | 2.33 | |||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage-backed securities issued by GSE | 75,232 | 366 | 1.95 | 70,374 | 413 | 2.35 | 70,816 | 461 | 2.60 | |||||||||||||||||||||||||||||||||||||||||||||||
| States and political subdivisions | 499 | 7 | 5.03 | 505 | 4 | 3.57 | 530 | 5 | 3.56 | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-agency mortgage-backed | — | — | — | 162 | 7 | 16.71 | 185 | 8 | 16.72 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | 37 | 1 | 1.99 | 37 | — | 2.27 | 40 | — | 3.01 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total securities | 79,828 | 394 | 1.97 | 75,159 | 446 | 2.37 | 75,701 | 495 | 2.62 | |||||||||||||||||||||||||||||||||||||||||||||||
| Loans and leases: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | 143,452 | 1,087 | 3.02 | 152,991 | 1,204 | 3.16 | 131,743 | 1,419 | 4.33 | |||||||||||||||||||||||||||||||||||||||||||||||
| CRE | 27,761 | 203 | 2.88 | 27,804 | 227 | 3.26 | 27,046 | 287 | 4.25 | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial construction | 6,861 | 55 | 3.26 | 6,748 | 61 | 3.70 | 6,409 | 76 | 4.87 | |||||||||||||||||||||||||||||||||||||||||||||||
| Lease financing | 5,626 | 52 | 3.71 | 5,922 | 70 | 4.71 | 6,070 | 65 | 4.27 | |||||||||||||||||||||||||||||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage | 51,500 | 576 | 4.47 | 52,380 | 608 | 4.65 | 52,993 | 594 | 4.48 | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential home equity and direct | 26,726 | 394 | 5.86 | 27,199 | 391 | 5.78 | 27,564 | 452 | 6.60 | |||||||||||||||||||||||||||||||||||||||||||||||
| Indirect auto | 24,732 | 405 | 6.51 | 24,721 | 407 | 6.63 | 24,975 | 428 | 6.89 | |||||||||||||||||||||||||||||||||||||||||||||||
| Indirect other | 11,530 | 204 | 7.05 | 11,282 | 201 | 7.18 | 10,950 | 201 | 7.37 | |||||||||||||||||||||||||||||||||||||||||||||||
| Student | 7,446 | 80 | 4.30 | 7,633 | 87 | 4.55 | 7,787 | 104 | 5.38 | |||||||||||||||||||||||||||||||||||||||||||||||
| Credit card | 4,810 | 109 | 9.03 | 4,949 | 114 | 9.27 | 5,534 | 133 | 9.68 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total loans and leases held for investment | 310,444 | 3,165 | 4.06 | 321,629 | 3,370 | 4.21 | 301,071 | 3,759 | 5.02 | |||||||||||||||||||||||||||||||||||||||||||||||
| Loans held for sale | 5,247 | 37 | 2.78 | 4,806 | 36 | 3.04 | 6,677 | 53 | 3.14 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total loans and leases | 315,691 | 3,202 | 4.04 | 326,435 | 3,406 | 4.19 | 307,748 | 3,812 | 4.98 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest earning trading assets | 4,056 | 32 | 3.23 | 3,700 | 39 | 4.19 | 6,334 | 64 | 4.04 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other earning assets | 35,819 | 24 | 0.26 | 41,531 | 28 | 0.28 | 23,750 | 92 | 1.55 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total earning assets | 435,394 | 3,652 | 3.34 | 446,825 | 3,919 | 3.52 | 413,533 | 4,463 | 4.33 | |||||||||||||||||||||||||||||||||||||||||||||||
| Nonearning assets | 65,432 | 67,895 | 64,017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 500,826 | $ | 514,720 | $ | 477,550 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest checking | $ | 96,707 | 15 | 0.06 | $ | 97,863 | 55 | 0.23 | $ | 85,008 | 129 | 0.61 | ||||||||||||||||||||||||||||||||||||||||||||
| Money market and savings | 123,598 | 19 | 0.06 | 126,071 | 57 | 0.18 | 120,936 | 178 | 0.59 | |||||||||||||||||||||||||||||||||||||||||||||||
| Time deposits | 27,940 | 62 | 0.89 | 33,009 | 89 | 1.09 | 35,570 | 114 | 1.29 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing deposits (3) | 248,245 | 96 | 0.15 | 256,943 | 201 | 0.32 | 241,514 | 421 | 0.70 | |||||||||||||||||||||||||||||||||||||||||||||||
| Short-term borrowings | 6,209 | 13 | 0.85 | 8,998 | 28 | 1.24 | 18,900 | 83 | 1.76 | |||||||||||||||||||||||||||||||||||||||||||||||
| Long-term debt | 40,919 | 152 | 1.48 | 55,537 | 211 | 1.52 | 46,547 | 272 | 2.34 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 295,373 | 261 | 0.35 | 321,478 | 440 | 0.55 | 306,961 | 776 | 1.02 | |||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits (3) | 123,966 | 113,875 | 93,135 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 11,853 | 12,504 | 12,042 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 69,634 | 66,863 | 65,412 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 500,826 | $ | 514,720 | $ | 477,550 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Average interest-rate spread | 2.99 | 2.97 | 3.31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income/ net interest margin | $ | 3,391 | 3.10 | % | $ | 3,479 | 3.13 | % | $ | 3,687 | 3.58 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Taxable-equivalent adjustment | $ | 29 | $ | 31 | $ | 37 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 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) Total deposit costs were 0.10%, 0.22% and 0.51% for the three months ended September 30, 2020, June 30, 2020 and March 31, 2020, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10 Truist Financial Corporation
| Credit Quality | ||||||||||||||||||||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||||||||||||||||||||||||
| (Dollars in millions) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||||
| Nonperforming Assets | ||||||||||||||||||||||||||||||||
| Nonaccrual loans and leases: | ||||||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | 451 | $ | 532 | $ | 507 | $ | 428 | $ | 443 | ||||||||||||||||||||||
| CRE | 58 | 75 | 52 | 42 | 18 | |||||||||||||||||||||||||||
| Commercial construction | 13 | 14 | 7 | 13 | 2 | |||||||||||||||||||||||||||
| Lease financing | 23 | 28 | 32 | 56 | 27 | |||||||||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||||
| Residential mortgage | 290 | 316 | 205 | 198 | 248 | |||||||||||||||||||||||||||
| Residential home equity and direct | 172 | 205 | 180 | 192 | 170 | |||||||||||||||||||||||||||
| Indirect auto | 158 | 155 | 137 | 155 | 125 | |||||||||||||||||||||||||||
| Indirect other | 6 | 5 | 4 | 3 | 1 | |||||||||||||||||||||||||||
| Total nonaccrual loans and leases held for investment | 1,171 | 1,330 | 1,124 | 1,087 | 1,034 | |||||||||||||||||||||||||||
| Loans held for sale | 72 | 5 | 130 | 102 | 41 | |||||||||||||||||||||||||||
| Total nonaccrual loans and leases | 1,243 | 1,335 | 1,254 | 1,189 | 1,075 | |||||||||||||||||||||||||||
| Foreclosed real estate | 18 | 20 | 30 | 43 | 63 | |||||||||||||||||||||||||||
| Other foreclosed property | 38 | 32 | 30 | 20 | 39 | |||||||||||||||||||||||||||
| Total nonperforming assets | $ | 1,299 | $ | 1,387 | $ | 1,314 | $ | 1,252 | $ | 1,177 | ||||||||||||||||||||||
| Troubled Debt Restructurings (TDRs) | ||||||||||||||||||||||||||||||||
| Performing TDRs: | ||||||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | 142 | $ | 78 | $ | 84 | $ | 57 | $ | 65 | ||||||||||||||||||||||
| CRE | 47 | 47 | 36 | 22 | 7 | |||||||||||||||||||||||||||
| Commercial construction | — | — | 1 | 36 | 36 | |||||||||||||||||||||||||||
| Lease financing | 59 | 60 | 1 | 1 | 1 | |||||||||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||||
| Residential mortgage | 733 | 648 | 640 | 533 | 513 | |||||||||||||||||||||||||||
| Residential home equity and direct | 109 | 88 | 71 | 71 | 66 | |||||||||||||||||||||||||||
| Indirect auto | 399 | 392 | 336 | 342 | 350 | |||||||||||||||||||||||||||
| Indirect other | 7 | 6 | 5 | 4 | 5 | |||||||||||||||||||||||||||
| Student | 8 | 5 | 5 | 4 | 1 | |||||||||||||||||||||||||||
| Credit card | 35 | 37 | 38 | 37 | 35 | |||||||||||||||||||||||||||
| Total performing TDRs | 1,539 | 1,361 | 1,217 | 1,107 | 1,079 | |||||||||||||||||||||||||||
| Nonperforming TDRs | 207 | 164 | 140 | 111 | 121 | |||||||||||||||||||||||||||
| Total TDRs | $ | 1,746 | $ | 1,525 | $ | 1,357 | $ | 1,218 | $ | 1,200 | ||||||||||||||||||||||
| Loans 90 Days or More Past Due and Still Accruing | ||||||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | 14 | $ | 13 | $ | 6 | $ | 9 | $ | 5 | ||||||||||||||||||||||
| CRE | — | — | 8 | 3 | 1 | |||||||||||||||||||||||||||
| Lease financing | — | — | — | 1 | — | |||||||||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||||
| Residential mortgage | 975 | 841 | 573 | 521 | 610 | |||||||||||||||||||||||||||
| Residential home equity and direct | 11 | 10 | 5 | 9 | 10 | |||||||||||||||||||||||||||
| Indirect auto | 2 | 2 | 8 | 10 | 11 | |||||||||||||||||||||||||||
| Indirect other | 1 | 2 | 3 | 3 | 2 | |||||||||||||||||||||||||||
| Student | 1,037 | 1,111 | 570 | 478 | 1,068 | |||||||||||||||||||||||||||
| Credit card | 32 | 29 | 24 | 38 | 41 | |||||||||||||||||||||||||||
| Total loans 90 days past due and still accruing | $ | 2,072 | $ | 2,008 | $ | 1,197 | $ | 1,072 | $ | 1,748 | ||||||||||||||||||||||
| Loans 30-89 Days Past Due | ||||||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | 117 | $ | 83 | $ | 155 | $ | 282 | $ | 262 | ||||||||||||||||||||||
| CRE | 9 | 14 | 7 | 6 | 8 | |||||||||||||||||||||||||||
| Commercial construction | 4 | 5 | — | 1 | 16 | |||||||||||||||||||||||||||
| Lease financing | 35 | 6 | 9 | 10 | 8 | |||||||||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||||
| Residential mortgage | 577 | 782 | 796 | 703 | 679 | |||||||||||||||||||||||||||
| Residential home equity and direct | 82 | 98 | 103 | 108 | 156 | |||||||||||||||||||||||||||
| Indirect auto | 328 | 495 | 321 | 265 | 521 | |||||||||||||||||||||||||||
| Indirect other | 45 | 68 | 52 | 50 | 74 | |||||||||||||||||||||||||||
| Student | 556 | 618 | 666 | 442 | 593 | |||||||||||||||||||||||||||
| Credit card | 35 | 51 | 39 | 34 | 57 | |||||||||||||||||||||||||||
| Total loans 30-89 days past due | $ | 1,788 | $ | 2,220 | $ | 2,148 | $ | 1,901 | $ | 2,374 | ||||||||||||||||||||||
Truist Financial Corporation 11
| As of/For the Quarter Ended | ||||||||||||||||||||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||||||||||||||||||||||||
| (Dollars in millions) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||||
| Allowance for Credit Losses | ||||||||||||||||||||||||||||||||
| Beginning balance | $ | 6,199 | $ | 6,229 | $ | 6,133 | $ | 5,611 | $ | 1,889 | ||||||||||||||||||||||
| CECL adoption - impact to retained earnings before tax | — | — | — | — | 2,762 | |||||||||||||||||||||||||||
| CECL adoption - reserves on PCD assets | — | — | — | — | 378 | |||||||||||||||||||||||||||
| Provision for credit losses | 48 | 177 | 421 | 844 | 893 | |||||||||||||||||||||||||||
| Charge-offs: | ||||||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||
| Commercial and industrial | (73) | (84) | (112) | (123) | (39) | |||||||||||||||||||||||||||
| CRE | (4) | (19) | (44) | (14) | (1) | |||||||||||||||||||||||||||
| Commercial construction | (2) | (8) | (19) | — | (3) | |||||||||||||||||||||||||||
| Lease financing | (6) | (4) | (44) | (4) | (2) | |||||||||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||||
| Residential mortgage | (11) | (6) | (4) | (35) | (11) | |||||||||||||||||||||||||||
| Residential home equity and direct | (55) | (46) | (52) | (65) | (68) | |||||||||||||||||||||||||||
| Indirect auto | (105) | (84) | (72) | (80) | (142) | |||||||||||||||||||||||||||
| Indirect other | (17) | (14) | (8) | (20) | (18) | |||||||||||||||||||||||||||
| Student | (3) | (3) | (6) | (6) | (8) | |||||||||||||||||||||||||||
| Credit card | (40) | (35) | (44) | (50) | (53) | |||||||||||||||||||||||||||
| Total charge-offs | (316) | (303) | (405) | (397) | (345) | |||||||||||||||||||||||||||
| Recoveries: | ||||||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||
| Commercial and industrial | 19 | 34 | 20 | 21 | 17 | |||||||||||||||||||||||||||
| CRE | 1 | 1 | — | 4 | — | |||||||||||||||||||||||||||
| Commercial construction | 1 | 1 | 2 | 7 | 1 | |||||||||||||||||||||||||||
| Lease financing | — | — | 4 | — | — | |||||||||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||||
| Residential mortgage | 2 | 3 | 3 | 2 | 2 | |||||||||||||||||||||||||||
| Residential home equity and direct | 18 | 20 | 16 | 15 | 15 | |||||||||||||||||||||||||||
| Indirect auto | 22 | 24 | 22 | 18 | 23 | |||||||||||||||||||||||||||
| Indirect other | 6 | 5 | 4 | 7 | 7 | |||||||||||||||||||||||||||
| Student | — | — | — | 1 | — | |||||||||||||||||||||||||||
| Credit card | 9 | 10 | 8 | 6 | 8 | |||||||||||||||||||||||||||
| Total recoveries | 78 | 98 | 79 | 81 | 73 | |||||||||||||||||||||||||||
| Net charge-offs | (238) | (205) | (326) | (316) | (272) | |||||||||||||||||||||||||||
| Other | 2 | (2) | 1 | (6) | (39) | |||||||||||||||||||||||||||
| Ending balance | $ | 6,011 | $ | 6,199 | $ | 6,229 | $ | 6,133 | $ | 5,611 | ||||||||||||||||||||||
| Allowance for Credit Losses: | ||||||||||||||||||||||||||||||||
| Allowance for loan and lease losses (excluding PCD loans) | $ | 5,506 | $ | 5,668 | $ | 5,675 | $ | 5,408 | $ | 4,880 | ||||||||||||||||||||||
| Allowance for PCD loans | 156 | 167 | 188 | 294 | 331 | |||||||||||||||||||||||||||
| Reserve for unfunded lending commitments (RUFC) | 349 | 364 | 366 | 431 | 400 | |||||||||||||||||||||||||||
| Total | $ | 6,011 | $ | 6,199 | $ | 6,229 | $ | 6,133 | $ | 5,611 | ||||||||||||||||||||||
| As of/For the Quarter Ended | ||||||||||||||||||||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||||||||||||||||||||||||
| 2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||||||||||||||||
| Asset Quality Ratios | ||||||||||||||||||||||||||||||||
| Loans 30-89 days past due and still accruing as a percentage of loans and leases | 0.61 | % | 0.74 | % | 0.70 | % | 0.60 | % | 0.74 | % | ||||||||||||||||||||||
| Loans 90 days or more past due and still accruing as a percentage of loans and leases | 0.71 | 0.67 | 0.39 | 0.34 | 0.55 | |||||||||||||||||||||||||||
| Nonperforming loans and leases as a percentage of loans and leases held for investment | 0.40 | 0.44 | 0.37 | 0.35 | 0.32 | |||||||||||||||||||||||||||
| Nonperforming loans and leases as a percentage of loans and leases (1) | 0.42 | 0.44 | 0.40 | 0.37 | 0.33 | |||||||||||||||||||||||||||
| Nonperforming assets as a percentage of: | ||||||||||||||||||||||||||||||||
| Total assets (1) | 0.25 | 0.27 | 0.26 | 0.25 | 0.23 | |||||||||||||||||||||||||||
| Loans and leases plus foreclosed property | 0.42 | 0.46 | 0.39 | 0.37 | 0.36 | |||||||||||||||||||||||||||
| Net charge-offs as a percentage of average loans and leases (2) | 0.33 | 0.27 | 0.42 | 0.39 | 0.36 | |||||||||||||||||||||||||||
| Allowance for loan and lease losses as a percentage of loans and leases | 1.94 | 1.95 | 1.91 | 1.81 | 1.63 | |||||||||||||||||||||||||||
| Ratio of allowance for loan and lease losses to: | ||||||||||||||||||||||||||||||||
| Net charge-offs | 5.87X | 7.15X | 4.52X | 4.49X | 4.76X | |||||||||||||||||||||||||||
| Nonperforming loans and leases | 4.84X | 4.39X | 5.22X | 5.24X | 5.04X | |||||||||||||||||||||||||||
| 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 | % | 0.04 | % | 0.03 | % | 0.04 | % | 0.04 | % | ||||||||||||||||||||||
| Applicable ratios are annualized. | ||||||||||||||||||||||||||||||||
(1)Includes loans held for sale. | ||||||||||||||||||||||||||||||||
(2) The third quarter of 2020 includes $97 million of charge-offs on PCD assets directly related to the implementation of CECL. | ||||||||||||||||||||||||||||||||
12 Truist Financial Corporation
| March 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
| Past Due 30-89 | Past Due 90+ | |||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | Current Status | Days | Days | Total | ||||||||||||||||||||||||||||||||||||||||
| Troubled Debt Restructurings | ||||||||||||||||||||||||||||||||||||||||||||
| Performing TDRs: (1) | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | 142 | 100.0 | % | $ | — | — | % | $ | — | — | % | $ | 142 | ||||||||||||||||||||||||||||||
| CRE | 47 | 100.0 | — | — | — | — | 47 | |||||||||||||||||||||||||||||||||||||
| Lease financing | 59 | 100.0 | — | — | — | — | 59 | |||||||||||||||||||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage | 480 | 65.5 | 91 | 12.4 | 162 | 22.1 | 733 | |||||||||||||||||||||||||||||||||||||
| Residential home equity and direct | 104 | 95.4 | 5 | 4.6 | — | — | 109 | |||||||||||||||||||||||||||||||||||||
| Indirect auto | 357 | 89.5 | 42 | 10.5 | — | — | 399 | |||||||||||||||||||||||||||||||||||||
| Indirect other | 7 | 100.0 | — | — | — | — | 7 | |||||||||||||||||||||||||||||||||||||
| Student | 8 | 100.0 | — | — | — | — | 8 | |||||||||||||||||||||||||||||||||||||
| Credit card | 32 | 91.4 | 2 | 5.7 | 1 | 2.9 | 35 | |||||||||||||||||||||||||||||||||||||
| Total performing TDRs (1) | 1,236 | 80.3 | 140 | 9.1 | 163 | 10.6 | 1,539 | |||||||||||||||||||||||||||||||||||||
| Nonperforming TDRs (2) | 105 | 50.7 | 24 | 11.6 | 78 | 37.7 | 207 | |||||||||||||||||||||||||||||||||||||
| Total TDRs (1)(2) | $ | 1,341 | 76.8 | % | $ | 164 | 9.4 | % | $ | 241 | 13.8 | % | $ | 1,746 | ||||||||||||||||||||||||||||||
(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 | ||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||||||||||||||||||||||||||||
| Net Charge-offs as a Percentage of Average Loans and Leases: | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial: | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | 0.16 | % | 0.15 | % | 0.25 | % | 0.27 | % | 0.07 | % | ||||||||||||||||||||||||||||||||||
| CRE | 0.04 | 0.27 | 0.63 | 0.15 | 0.01 | |||||||||||||||||||||||||||||||||||||||
| Commercial construction | 0.08 | 0.39 | 1.02 | (0.43) | 0.13 | |||||||||||||||||||||||||||||||||||||||
| Lease financing | 0.44 | 0.20 | 2.92 | 0.33 | 0.08 | |||||||||||||||||||||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage | 0.08 | 0.03 | 0.01 | 0.25 | 0.07 | |||||||||||||||||||||||||||||||||||||||
| Residential home equity and direct | 0.58 | 0.39 | 0.53 | 0.73 | 0.78 | |||||||||||||||||||||||||||||||||||||||
| Indirect auto | 1.28 | 0.92 | 0.76 | 1.03 | 1.89 | |||||||||||||||||||||||||||||||||||||||
| Indirect other | 0.39 | 0.31 | 0.21 | 0.41 | 0.47 | |||||||||||||||||||||||||||||||||||||||
| Student | 0.16 | 0.17 | 0.28 | 0.31 | 0.38 | |||||||||||||||||||||||||||||||||||||||
| Credit card | 2.74 | 2.11 | 3.00 | 3.50 | 3.30 | |||||||||||||||||||||||||||||||||||||||
| Total loans and leases | 0.33 | 0.27 | 0.42 | 0.39 | 0.36 | |||||||||||||||||||||||||||||||||||||||
| 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) | 2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||||||||||||
| ALLL | $ | 5,662 | $ | 5,835 | $ | 5,863 | $ | 5,702 | $ | 5,211 | |||||||||||||||||||
| Unamortized fair value mark (1) | 2,067 | 2,395 | 2,676 | 3,077 | 3,539 | ||||||||||||||||||||||||
| Allowance plus unamortized fair value mark | $ | 7,729 | $ | 8,230 | $ | 8,539 | $ | 8,779 | $ | 8,750 | |||||||||||||||||||
| Loans and leases held for investment | $ | 291,511 | $ | 299,734 | $ | 306,627 | $ | 314,825 | $ | 319,229 | |||||||||||||||||||
| Unamortized fair value mark (1) | 2,067 | 2,395 | 2,676 | 3,077 | 3,539 | ||||||||||||||||||||||||
| Gross loans and leases | $ | 293,578 | $ | 302,129 | $ | 309,303 | $ | 317,902 | $ | 322,768 | |||||||||||||||||||
| Allowance for loan and lease losses as a percentage of loans and leases - GAAP | 1.94 | % | 1.95 | % | 1.91 | % | 1.81 | % | 1.63 | % | |||||||||||||||||||
| Allowance for loan and lease losses and unamortized fair value mark as a percentage of gross loans and leases - Adjusted (1) (2) | 2.63 | 2.72 | 2.76 | 2.76 | 2.71 | ||||||||||||||||||||||||
(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.
Truist Financial Corporation 13
| 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) | 2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||||||||||||
| Loans and Leases (2) | |||||||||||||||||||||||||||||
| Beginning balance unamortized fair value mark | $ | (2,395) | $ | (2,676) | $ | (3,077) | $ | (3,539) | $ | (4,564) | |||||||||||||||||||
| Accretion | 316 | 356 | 367 | 440 | 454 | ||||||||||||||||||||||||
| CECL adoption - reserves on PCD assets | — | — | — | — | 378 | ||||||||||||||||||||||||
| Purchase accounting adjustments and other activity | 12 | (75) | 34 | 22 | 193 | ||||||||||||||||||||||||
| Ending balance | $ | (2,067) | $ | (2,395) | $ | (2,676) | $ | (3,077) | $ | (3,539) | |||||||||||||||||||
| Core deposit and other intangible assets | |||||||||||||||||||||||||||||
| Beginning balance | $ | 2,984 | $ | 2,840 | $ | 3,016 | $ | 3,168 | $ | 3,142 | |||||||||||||||||||
| Additions - acquisitions | 14 | 320 | — | — | 31 | ||||||||||||||||||||||||
| Amortization of intangibles | (144) | (172) | (170) | (178) | (165) | ||||||||||||||||||||||||
| Amortization in net occupancy expense | (3) | (4) | (6) | (6) | (5) | ||||||||||||||||||||||||
| Purchase accounting adjustments and other activity | (26) | — | — | 32 | 165 | ||||||||||||||||||||||||
| Ending balance | $ | 2,825 | $ | 2,984 | $ | 2,840 | $ | 3,016 | $ | 3,168 | |||||||||||||||||||
| Deposits (3) | |||||||||||||||||||||||||||||
| Beginning balance unamortized fair value mark | $ | (19) | $ | (26) | $ | (37) | $ | (54) | $ | (76) | |||||||||||||||||||
| Amortization | 4 | 7 | 11 | 17 | 22 | ||||||||||||||||||||||||
| Ending balance | $ | (15) | $ | (19) | $ | (26) | $ | (37) | $ | (54) | |||||||||||||||||||
| Long-Term Debt (3) | |||||||||||||||||||||||||||||
| Beginning balance unamortized fair value mark | $ | (216) | $ | (238) | $ | (262) | $ | (285) | $ | (312) | |||||||||||||||||||
| Amortization | 20 | 22 | 24 | 23 | 27 | ||||||||||||||||||||||||
| Ending balance | $ | (196) | $ | (216) | $ | (238) | $ | (262) | $ | (285) | |||||||||||||||||||
(1)Includes the merger with SunTrust. This summary includes only selected information and does not represent all purchase accounting adjustments.
(2)Purchase accounting marks on loans and leases includes credit, interest and liquidity components, and are generally recognized using the level-yield or straight-line method over the remaining life of the individual loans or recognized in full in the event of prepayment.
(3)Purchase accounting marks on liabilities represents interest rate marks on time deposits and long-term debt and are recognized using the level-yield method over the term of the liability.
| Capital Information - Five Quarter Trend | ||||||||||||||||||||||||||||||||
| As of/For the Quarter Ended | ||||||||||||||||||||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||||||||||||||||||||||||
| (Dollars in millions, except per share data, shares in thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||||
| Selected Capital Information | (preliminary) | |||||||||||||||||||||||||||||||
| Risk-based capital: | ||||||||||||||||||||||||||||||||
| Common equity tier 1 | $ | 38,267 | $ | 37,869 | $ | 37,879 | $ | 37,107 | $ | 36,396 | ||||||||||||||||||||||
| Tier 1 | 45,388 | 45,915 | 45,925 | 44,248 | 40,993 | |||||||||||||||||||||||||||
| Total | 54,246 | 55,011 | 55,030 | 53,436 | 49,395 | |||||||||||||||||||||||||||
| Risk-weighted assets | 378,522 | 379,153 | 377,420 | 382,826 | 390,348 | |||||||||||||||||||||||||||
| Average quarterly assets for leverage ratio | 484,961 | 478,608 | 476,868 | 490,203 | 454,381 | |||||||||||||||||||||||||||
| Average quarterly assets for supplementary leverage ratio | 546,517 | 530,716 | 513,230 | 518,010 | 525,703 | |||||||||||||||||||||||||||
| Risk-based capital ratios: | ||||||||||||||||||||||||||||||||
| Common equity tier 1 | 10.1 | % | 10.0 | % | 10.0 | % | 9.7 | % | 9.3 | % | ||||||||||||||||||||||
| Tier 1 | 12.0 | 12.1 | 12.2 | 11.6 | 10.5 | |||||||||||||||||||||||||||
| Total | 14.3 | 14.5 | 14.6 | 14.0 | 12.7 | |||||||||||||||||||||||||||
| Leverage capital ratio | 9.4 | 9.6 | 9.6 | 9.0 | 9.0 | |||||||||||||||||||||||||||
| Supplementary leverage | 8.3 | 8.7 | 8.9 | 8.5 | 7.8 | |||||||||||||||||||||||||||
| Equity as a percentage of total assets | 13.1 | 13.9 | 14.0 | 13.7 | 13.0 | |||||||||||||||||||||||||||
| Common equity per common share | $ | 45.17 | $ | 46.52 | $ | 45.86 | $ | 45.74 | $ | 45.49 | ||||||||||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||||||||||||||||||||||||
| (Dollars in millions, except per share data, shares in thousands) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||||
Calculations of Tangible Common Equity and Related Measures: (1) | ||||||||||||||||||||||||||||||||
| Total shareholders' equity | $ | 67,876 | $ | 70,912 | $ | 69,973 | $ | 68,883 | $ | 66,061 | ||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||
| Preferred stock | 7,124 | 8,048 | 8,048 | 7,143 | 4,599 | |||||||||||||||||||||||||||
| Noncontrolling interests | — | 105 | 106 | 106 | 167 | |||||||||||||||||||||||||||
| Intangible assets, net of deferred taxes | 26,413 | 26,629 | 25,923 | 26,083 | 26,263 | |||||||||||||||||||||||||||
| Tangible common equity | $ | 34,339 | $ | 36,130 | $ | 35,896 | $ | 35,551 | $ | 35,032 | ||||||||||||||||||||||
| Outstanding shares at end of period (in thousands) | 1,344,845 | 1,348,961 | 1,348,118 | 1,347,609 | 1,347,461 | |||||||||||||||||||||||||||
| Tangible Common Equity Per Common Share | $ | 25.53 | $ | 26.78 | $ | 26.63 | $ | 26.38 | $ | 26.00 | ||||||||||||||||||||||
(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.
14 Truist Financial Corporation
| 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) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||||
| Residential Mortgage Income | ||||||||||||||||||||||||||||||||
| Residential mortgage production revenue | $ | 140 | $ | 229 | $ | 339 | $ | 344 | $ | 206 | ||||||||||||||||||||||
| Residential mortgage servicing revenue | 141 | 150 | 152 | 159 | 169 | |||||||||||||||||||||||||||
| Realization of expected residential MSR cash flows | (208) | (209) | (212) | (176) | (122) | |||||||||||||||||||||||||||
| Residential mortgage income before MSR valuation | 73 | 170 | 279 | 327 | 253 | |||||||||||||||||||||||||||
| Income statement impact of mortgage servicing rights valuation: | ||||||||||||||||||||||||||||||||
| MSRs fair value increase (decrease) | 360 | 62 | (54) | (28) | (503) | |||||||||||||||||||||||||||
| MSRs hedge gains (losses) | (333) | (39) | (4) | 42 | 495 | |||||||||||||||||||||||||||
| Net MSRs valuation | 27 | 23 | (58) | 14 | (8) | |||||||||||||||||||||||||||
| Total residential mortgage income | $ | 100 | $ | 193 | $ | 221 | $ | 341 | $ | 245 | ||||||||||||||||||||||
| Commercial Real Estate Related Income | ||||||||||||||||||||||||||||||||
| Commercial mortgage production revenue | $ | 40 | $ | 117 | $ | 49 | $ | 42 | $ | 36 | ||||||||||||||||||||||
| Commercial mortgage servicing revenue | 17 | 16 | 16 | 18 | 19 | |||||||||||||||||||||||||||
| Realization of expected commercial MSR cash flows | (15) | (11) | (10) | (8) | (11) | |||||||||||||||||||||||||||
| Commercial real estate related income before MSR valuation | 42 | 122 | 55 | 52 | 44 | |||||||||||||||||||||||||||
| Income statement impact of mortgage servicing rights valuation: | ||||||||||||||||||||||||||||||||
| MSRs fair value increase (decrease) | 13 | 3 | 1 | (6) | (20) | |||||||||||||||||||||||||||
| MSRs hedge gains (losses) | (12) | (2) | (1) | 3 | 20 | |||||||||||||||||||||||||||
| Net MSRs valuation | 1 | 1 | — | (3) | — | |||||||||||||||||||||||||||
| Commercial real estate related income | $ | 43 | $ | 123 | $ | 55 | $ | 49 | $ | 44 | ||||||||||||||||||||||
Other Mortgage Banking Information | ||||||||||||||||||||||||||||||||
| Residential mortgage loan originations | $ | 13,075 | $ | 13,235 | $ | 15,346 | $ | 14,631 | $ | 11,708 | ||||||||||||||||||||||
| Residential mortgage servicing portfolio (1): | ||||||||||||||||||||||||||||||||
| Loans serviced for others | 179,836 | 188,341 | 198,881 | 209,070 | 219,979 | |||||||||||||||||||||||||||
| Bank-owned loans serviced | 48,800 | 50,693 | 54,587 | 56,365 | 56,325 | |||||||||||||||||||||||||||
| Total servicing portfolio | 228,636 | 239,034 | 253,468 | 265,435 | 276,304 | |||||||||||||||||||||||||||
| Weighted-average coupon rate on mortgage loans serviced for others | 3.76 | % | 3.84 | % | 3.92 | % | 3.98 | % | 4.02 | % | ||||||||||||||||||||||
| Weighted-average servicing fee on mortgage loans serviced for others | 0.314 | 0.317 | 0.317 | 0.315 | 0.313 | |||||||||||||||||||||||||||
| Additional Information | ||||||||||||||||||||||||||||||||
| Fair value of derivatives, net | 2,222 | 3,282 | 3,646 | 3,766 | 3,276 | |||||||||||||||||||||||||||
| Common stock prices: | ||||||||||||||||||||||||||||||||
| High | 61.26 | 49.72 | 42.04 | 46.53 | 56.68 | |||||||||||||||||||||||||||
| Low | 46.71 | 37.86 | 33.47 | 26.41 | 24.01 | |||||||||||||||||||||||||||
| End of period | 58.32 | 47.93 | 38.05 | 37.55 | 30.84 | |||||||||||||||||||||||||||
| Banking offices | 2,556 | 2,781 | 2,884 | 2,916 | 2,957 | |||||||||||||||||||||||||||
| ATMs | 3,807 | 4,082 | 4,237 | 4,354 | 4,408 | |||||||||||||||||||||||||||
| FTEs (2) | 53,207 | 53,693 | 55,000 | 55,769 | 56,504 | |||||||||||||||||||||||||||
(1)Amounts reported are unpaid principal balance.
(2)FTEs represents an average for the quarter.
Truist Financial Corporation 15
| Selected Items (1) | |||||||||||
| Favorable (Unfavorable) | |||||||||||
| (Dollars in millions) | After-Tax at | ||||||||||
| Description | Pre-Tax | Marginal Rate | |||||||||
| Selected Items | |||||||||||
| First Quarter 2021 | |||||||||||
| Incremental operating expenses related to the merger ($120 professional fees and outside processing, $42 personnel expense, and $13 other) | $ | (175) | $ | (134) | |||||||
| Acceleration for cash flow hedge unwind | (36) | (28) | |||||||||
| Fourth Quarter 2020 | |||||||||||
| Incremental operating expenses related to the merger ($124 million in professional fees and outside processing, $47 million in personnel expense, and $8 million in other expense) | $ | (179) | $ | (138) | |||||||
| Third Quarter 2020 | |||||||||||
| Incremental operating expenses related to the merger ($99 million in professional fees and outside processing, $48 million in personnel expense, and $5 million in other expense) | $ | (152) | $ | (115) | |||||||
| Charitable contribution | (50) | (38) | |||||||||
| Second Quarter 2020 | |||||||||||
| Incremental operating expenses related to the merger ($64 million in professional fees and outside processing, $49 million in personnel expense, and $16 million in other expense) | $ | (129) | $ | (99) | |||||||
| First Quarter 2020 | |||||||||||
| Incremental operating expenses related to the merger ($44 million in personnel expense, $20 million in professional fees and outside processing, and $10 million in other expense) | $ | (74) | $ | (57) | |||||||
(1)Includes costs not classified as merger-related and restructuring charges that are excluded from adjusted disclosures.
| Non-GAAP Reconciliations | ||||||||||||||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||||||||||||||||||||||||
| (Dollars in millions) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||||
Efficiency Ratio (1) | ||||||||||||||||||||||||||||||||
Efficiency Ratio Numerator - Noninterest Expense - GAAP | $ | 3,610 | $ | 3,833 | $ | 3,755 | $ | 3,878 | $ | 3,431 | ||||||||||||||||||||||
| Merger-related and restructuring charges, net | (141) | (308) | (236) | (209) | (107) | |||||||||||||||||||||||||||
| Gain (loss) on early extinguishment of debt | 3 | — | — | (235) | — | |||||||||||||||||||||||||||
| Incremental operating expense related to the merger | (175) | (179) | (152) | (129) | (74) | |||||||||||||||||||||||||||
| Amortization of intangibles | (144) | (172) | (170) | (178) | (165) | |||||||||||||||||||||||||||
| Charitable contribution | — | — | (50) | — | — | |||||||||||||||||||||||||||
| Acceleration for cash flow hedge unwind | (36) | — | — | — | — | |||||||||||||||||||||||||||
| Efficiency Ratio Numerator - Adjusted | $ | 3,117 | $ | 3,174 | $ | 3,147 | $ | 3,127 | $ | 3,085 | ||||||||||||||||||||||
Efficiency Ratio Denominator - Revenue (2) - GAAP | $ | 5,482 | $ | 5,651 | $ | 5,572 | $ | 5,871 | $ | 5,611 | ||||||||||||||||||||||
| Taxable equivalent adjustment | 28 | 28 | 29 | 31 | 37 | |||||||||||||||||||||||||||
| Securities (gains) losses | — | — | (104) | (300) | 2 | |||||||||||||||||||||||||||
| Gains on divestiture of certain businesses | (37) | — | — | — | — | |||||||||||||||||||||||||||
| Efficiency Ratio Denominator - Adjusted | $ | 5,473 | $ | 5,679 | $ | 5,497 | $ | 5,602 | $ | 5,650 | ||||||||||||||||||||||
| Efficiency Ratio - GAAP | 65.8 | % | 67.8 | % | 67.4 | % | 66.1 | % | 61.1 | % | ||||||||||||||||||||||
| Efficiency Ratio - Adjusted | 56.9 | 55.9 | 57.3 | 55.8 | 54.6 | |||||||||||||||||||||||||||
(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.
16 Truist Financial Corporation
| Quarter Ended | ||||||||||||||||||||||||||||||||
| March 31 | Dec. 31 | Sept. 30 | June 30 | March 31 | ||||||||||||||||||||||||||||
| (Dollars in millions) | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||||
| Return on Average Tangible Common Shareholders' Equity (1) | ||||||||||||||||||||||||||||||||
| Net income available to common shareholders | $ | 1,334 | $ | 1,228 | $ | 1,068 | $ | 902 | $ | 986 | ||||||||||||||||||||||
| Plus: Amortization of intangibles, net of tax | 111 | 131 | 130 | 137 | 126 | |||||||||||||||||||||||||||
| Tangible net income available to common shareholders | $ | 1,445 | $ | 1,359 | $ | 1,198 | $ | 1,039 | $ | 1,112 | ||||||||||||||||||||||
| Average common shareholders' equity | $ | 62,252 | $ | 61,991 | $ | 61,804 | $ | 61,484 | $ | 60,224 | ||||||||||||||||||||||
| Less: Average intangible assets, net of deferred taxes | 26,535 | 25,930 | 25,971 | 26,161 | 26,429 | |||||||||||||||||||||||||||
| Average tangible common shareholders' equity | $ | 35,717 | $ | 36,061 | $ | 35,833 | $ | 35,323 | $ | 33,795 | ||||||||||||||||||||||
| Return on average common shareholders' equity | 8.69 | % | 7.88 | % | 6.87 | % | 5.90 | % | 6.58 | % | ||||||||||||||||||||||
| Return on average tangible common shareholders' equity | 16.40 | 14.99 | 13.31 | 11.83 | 13.23 | |||||||||||||||||||||||||||
(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) | 2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||||||||||||
Diluted EPS (1) | |||||||||||||||||||||||||||||
Net income available to common shareholders - GAAP | $ | 1,334 | $ | 1,228 | $ | 1,068 | $ | 902 | $ | 986 | |||||||||||||||||||
| Merger-related and restructuring charges | 108 | 237 | 181 | 160 | 82 | ||||||||||||||||||||||||
| Securities (gains) losses | — | — | (80) | (230) | 2 | ||||||||||||||||||||||||
| Loss (gain) on early extinguishment of debt | (2) | — | — | 180 | — | ||||||||||||||||||||||||
| Incremental operating expenses related to the merger | 134 | 138 | 115 | 99 | 57 | ||||||||||||||||||||||||
| Charitable contribution | — | — | 38 | — | — | ||||||||||||||||||||||||
| Acceleration for cash flow hedge unwind | 28 | — | — | — | — | ||||||||||||||||||||||||
| Net income available to common shareholders - adjusted | $ | 1,602 | $ | 1,603 | $ | 1,322 | $ | 1,111 | $ | 1,127 | |||||||||||||||||||
Weighted average shares outstanding - diluted | 1,358,932 | 1,361,763 | 1,358,122 | 1,355,834 | 1,357,545 | ||||||||||||||||||||||||
| Diluted EPS - GAAP | $ | 0.98 | $ | 0.90 | $ | 0.79 | $ | 0.67 | $ | 0.73 | |||||||||||||||||||
| Diluted EPS - adjusted | 1.18 | 1.18 | 0.97 | 0.82 | 0.83 | ||||||||||||||||||||||||
(1)The adjusted diluted earnings per share is non-GAAP in that it excludes merger-related and restructuring charges and other selected items, net of tax. Truist's management uses this measure in their analysis of the Corporation's performance. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges.
Truist Financial Corporation 17
First Quarter 2021 Earnings Conference Call Kelly King - Chairman & CEO Bill Rogers - President & COO Daryl Bible - CFO April 15, 2021
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) future levels of taxable-equivalent revenue, net interest income, net interest margin, noninterest expense and net charge-offs, (ii) Truist’s integration priorities for 2021, including the manner in which it plans to execute its digital application conversion, (iii) projected total amounts of merger-related and restructuring charges and incremental operating expenses related to the merger, (iv) Truist’s medium-term performance targets with respect to return on tangible common equity and efficiency and capital ratios, (v) the amount of expense savings to be realized from the merger or other strategic initiatives and the timing of such realization, (vi) Truist’s goals for its CET1 ratio, (vii) anticipated amounts of share repurchases, and (viii) 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 Item 1A-Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020 and in Truist's subsequent filings with the Securities and Exchange Commission: • risks and uncertainties relating to the Merger of heritage BB&T and heritage SunTrust, including the ability to successfully integrate the companies or to realize the anticipated benefits of the Merger; • expenses relating to the Merger and integration of heritage BB&T and heritage SunTrust; • deposit attrition, client loss or revenue loss following completed mergers or acquisitions may be greater than anticipated; • the COVID-19 pandemic has disrupted the global economy, adversely impacted Truist's financial condition and results of operations, including through increased expenses, reduced fee income and net interest margin and increases in the allowance for credit losses, and continuation of current conditions could worsen these 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 and potentially negative interest rates, 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 new or existing competitors that could have greater financial resources or be subject to different regulatory standards, for products and services offered by non-bank financial technology companies may reduce Truist's client base, cause Truist to lower prices for its products and services in order to maintain market share or otherwise adversely impact Truist's businesses or results of operations; • failure to maintain or enhance Truist's competitive position with respect to new products, services and technology, whether it fails to anticipate client expectations or because its technological developments fail to perform as desired or do not achieve market acceptance or regulatory approval or for other reasons, may cause Truist to lose market share or incur additional expense; • negative public opinion, which could damage Truist's reputation; • increased scrutiny regarding Truist's consumer sales practices, training practices, incentive compensation design and governance; • regulatory matters, litigation or other legal actions, which may result in, among other things, costs, fines, penalties, restrictions on Truist's business activities, reputational harm, negative publicity or other adverse consequences; • evolving legislative, accounting and regulatory standards, including with respect to capital and liquidity requirements, and results of regulatory examinations, may adversely affect Truist's financial condition and results of operations; • the monetary and fiscal policies of the federal government and its agencies could have a material adverse effect on profitability; • accounting policies and processes require management to make estimates about matters that are uncertain, including the potential write down to goodwill if there is an elongated period of decline in market value for Truist's stock and adverse economic conditions are sustained over a period of time; • general economic or business conditions, either globally, nationally or regionally, may be less favorable than expected, and instability in global geopolitical matters or volatility in financial markets could result in, among other things, slower deposit or asset growth, a deterioration in credit quality or a reduced demand for credit, insurance or other services; • risks related to originating and selling mortgages, including repurchase and indemnity demands from purchasers related to representations and warranties on loans sold, which could result in an increase in the amount of losses for loan repurchases; • risks relating to Truist's role as a loan servicer, including an increase in the scope or costs of the services Truist is required to perform without any corresponding increase in servicing fees, or a breach of Truist’s obligations as servicer; • Truist's success depends on hiring and retaining key personnel, and if these individuals leave or change roles without effective replacements, Truist's operations and integration activities could be adversely impacted, which could be exacerbated as Truist continues to integrate the management teams of heritage BB&T and heritage SunTrust; • 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 and identity theft, 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 could have an adverse effect on Truist's financial condition and results of operations, or 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. Tangible Common Equity and Related Measures - Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist's management uses these measures to assess the quality of capital and returns relative to balance sheet risk. Core NIM - Core net interest margin is a non-GAAP measure that adjusts net interest margin to exclude the impact of purchase accounting. The purchase accounting marks and related amortization for a) securities acquired from the FDIC in the Colonial Bank acquisition and b) loans, deposits and long-term debt from SunTrust, Susquehanna, National Penn and Colonial Bank 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 enhances comparability of results with prior periods, as well as demonstrates 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. Selected items affecting results are included on slide 8.
4
5 Living our purpose Inspire and build better lives and communities Advanced environmental, social, and governance strategy and diversity, equity, and inclusion efforts Issued Truist’s inaugural social bond—first social bond issued by a U.S. regional bank—and published ESG Bond Framework for future issuances Became lead investor for Greenwood, an innovative digital banking platform designed for Black and Latinx consumers and business owners Signed the Hispanic Promise–a first-of-its-kind national pledge to prepare, hire, promote, retain, and celebrate Hispanics in the workplace Received 100% score on Human Rights Campaign’s Corporate Equality Index; named ‘Best Place to Work’ in 2021 + + + + Received “Outstanding” Community Reinvestment Act (CRA) rating + + + + Showcasing the Truist Purpose in action through key recognitions & milestones 6th largest PPP commercial bank lender in latest round of SBA funding; 34% of loans focused on low-to-moderate income and majority minority communities Continued executing on our Community Benefits Plan, a $60 billion commitment to support LMI borrowers and communities, after ending 2020 at 114% of our annual target Recognized by ‘FORTUNE’ as one of the world’s most admired companies
6 Excellent progress across key integration initiatives Truist Securities conversion Wealth brokerage conversion Release of Truist job framework for all teammates in Workday Testing protocols for core bank conversion Wealth trust conversion Migrate teammates to the Truist retail mortgage origination ecosystem Integration Priorities - Path to Completion Retail branch consolidation (approximately 800 cumulative closures by 1Q22) Unveil Innovation and Technology Center Launch Truist digital online banking and mobile experience to select populations Convert heritage BB&T clients to Truist ecosystem for retail and commercial Integrate industry-leading commercial lending platform Convert heritage SunTrust clients to Truist ecosystem for retail and commercial (2022) Reducing risk in the merger
7 1Q21 performance highlights Summary Income Statement ($ MM) 1Q21 Total taxable-equivalent revenue1 $5,510 Net income 1,473 Net income available to common shareholders 1,334 Adjusted net income available to common shareholders2 1,602 1 Composed of taxable-equivalent net interest income and noninterest income 2 See non-GAAP reconciliations in the appendix 3 Current quarter regulatory capital information is preliminary ▪ Strong adjusted net income of $1.6 billion, or $1.18 per share, both up 42% vs. 1Q20 ▪ Adjusted ROTCE of 19.36% ▪ Record investment banking and trading income and insurance income, offset by decreases in residential mortgage income and commercial real estate related income ▪ Strong expense discipline as adjusted noninterest expense decreased $57 million sequentially; merger-related and restructuring charges decreased $167 million ▪ Significantly lower provision for credit losses of $48 million vs. $177 million in 4Q20; reserve release of $190 million primarily reflects lower loan balances and better economic outlook ▪ NPAs decreased $88 million, or 6.3% vs. 4Q20 ▪ Completed $506 million of share repurchases, resulting in a total payout ratio of 83.3% during 1Q21 ▪ Redeemed $950 million of preferred stock during the quarter at an after-tax cost of $26 million or $0.02 per share, which was not excluded from adjusted net income or EPS 1Q21 Performance Metrics GAAP / Unadjusted Adjusted 2 Diluted earnings per share $0.98 $1.18 Return on average assets 1.17% 1.39% Return on average common equity 8.69% 10.41% Return on average tangible common equity 16.40% 19.36% Efficiency ratio 65.8% 56.9% Asset Quality and Capital 1Q21 Nonperforming assets as a % of total assets 0.25% Net charge-offs as a % of average loans and leases 0.33% Common equity tier 1 capital ratio (CET1)3 10.1% Key Points
8 Selected items affecting 1Q21 results Item ($ MM, except per share impact) Pre-Tax After-Tax Diluted EPS Impact Merger-related and restructuring charges ($141) ($108) $0.08 Incremental operating expenses related to the merger ($175) ($134) $0.10 Acceleration for cash flow hedge unwind ($36) ($28) $0.02 The above table includes items on slide A-10 of the appendix with the exception of gain (loss) on early extinguishment of debt Diluted EPS impact amounts may be rounded Merger-related and restructuring charges and incremental operating expenses related to the merger referenced above are not expected to be part of the run rate post 2022
9 Digital acceleration 1Q20 1Q21 Mar-20 Mar-21 Mar-20 Sept-20 Mar-21 Mar-20 Sept-20 Mar-21 44% YoY growth in account sales 11% growth in active users 27% growth in transactions 84% growth in transactions Results reflect combined transactions and accounts from BB&T and SunTrust as of March 2021 Digital commerce defined as products delivered through digital applications Active users reflects clients that have logged in using the mobile app over the prior 90 days; clients using mobile app at both organizations were counted only once 130.3K 187.2K 3.65MM 4.06MM 2.46MM 4.52MM 1.50MM 1.91MM Digital Commerce YTD Growth Mobile App Users Mobile Check Deposits Zelle Transactions 1Q21: The Truist Digital Rollout Begins Our innovative, patent-pending “Digital Straddle,” enables a smooth digital migration before core conversion for a better client experience ▪ Teammate Pilot began in March 2021 ▪ Client will see a common Truist digital experience while the heritage backends are maintained as systems of record ▪ Truist’s API abstracts clients’ user interface from the heritage backend and delivers a Truist-branded solution ▪ This approach enables us to incrementally add clients in waves, avoiding a one-time digital conversion in February 2022, reducing risk, and giving clients the best conversion experience
10 Loans & leases $171,268 $178,270 $173,794 $129,803 $124,590 $120,856 5.02% 4.13% 4.11% Commercial LHFI ($ MM) Consumer & Card LHFI ($ MM) Loans HFI yield (%) 1Q20 4Q20 1Q21 ▪ Average loans and leases decreased $8.2 billion sequentially, driven largely by reductions in commercial loans and residential mortgage loans ▪ Average commercial loans declined $4.5 billion, reflecting decreases of • $1.8 billion in average PPP loans • Continued paydown of revolving credit lines • $819 million in average CRE loans • $647 million related to the transfer of $1 billion of certain loans and leases to held for sale in late 4Q20 ▪ Average consumer loans decreased $3.6 billion due to a decrease in residential mortgage and residential home equity and direct partially offset by an increase in indirect auto loans ▪ The yield on loans held for investment decreased 2 bps primarily due to lower purchase accounting accretion Average balances 1Q21 Linked Quarter Change Like Quarter Change Commercial: Commercial and industrial $136,051 ($3,172) $4,308 CRE 26,211 (819) (835) Commercial construction 6,557 (59) 148 Lease financing 4,975 (426) (1,095) Consumer: Residential mortgage 45,823 (3,024) (7,170) Residential home equity and direct 25,658 (669) (1,906) Indirect auto 26,363 575 1,388 Indirect other 10,848 (443) (102) Student 7,519 — (268) Credit card 4,645 (173) (889) Total loans & leases held for investment $294,650 ($8,210) ($6,421) Average Loans & Leases HFI and Loan Yields Key Points Loans & Leases HFI ($ MM)
11 Deposits $334,649 $375,266 $383,185 0.70% 0.51% 0.07% 0.05% Total deposits ($ MM) IBD cost (%) Total deposit cost (%) 1Q20 4Q20 1Q21 ▪ Average deposits increased $7.9 billion sequentially to $383.2 billion, largely due to a $4.9 billion increase in average interest checking and a $4.6 billion increase in money market and savings • Growth was driven by additional government stimulus and pandemic- related client behavior ▪ Average noninterest-bearing deposits increased $1.5 billion sequentially and were 33.6% of total deposits vs. 33.9% in 4Q20 and 27.8% in 1Q20 ▪ Average time deposits decreased $3.0 billion primarily due to the maturity of wholesale CDs and higher-cost accounts ▪ Average total deposit costs decreased 2 bps to 5 bps and average interest- bearing deposit costs decreased 4 bps to 7 bps Average balances 1Q21 Linked Quarter Change Like Quarter Change Noninterest-bearing deposits $128,579 $1,476 $35,444 Interest checking 104,744 4,878 19,736 Money market and savings 129,303 4,611 8,367 Time deposits 20,559 (3,046) (15,011) Total deposits $383,185 $7,919 $48,536 0.11% Key Points Average Deposits & Costs Deposits ($ MM) 0.07%
12 Net interest income and interest rate sensitivity ▪ Net interest income decreased $81 million linked quarter, reflecting two fewer days in the quarter ($43 million impact) and lower purchase accounting accretion ($43 million) ▪ Reported NIM decreased 7 bps to 3.01% • Purchase accounting accretion contributed 32 bps vs. 36 bps in 4Q20 ▪ Core NIM decreased 3 bps to 2.69% as continued inflows of deposits increased our combined balances at the Federal Reserve and in the investment portfolio; key drivers were: • Higher loan yields due to PPP loan payoffs and reversal of COVID-19 loan deferrals (+4 bps) • Lower interest-bearing liability costs (+4 bps) • Excess liquidity (-11 bps) ▪ Interest rate sensitivity decreased slightly in response to the increase in the investment portfolio due to excess liquidity $3,687 $3,394 $3,313 3.58% 3.08% 3.01% 3.06% 2.72% 2.69% Net interest income TE ($ MM) Reported NIM (%) Core NIM (%) 1Q20 4Q20 1Q21 -2.09% -1.82% +3.24% +4.18% -1.75% -1.32% +2.92% +3.74% At 12/31/20 At 3/31/21 Down 50 Down 25 Up 50 Up 100 1 Market rate increase or decrease scenarios assume a ramped, parallel 25 basis point change per quarter in market interest rates and that market rates floor at 0% Key PointsNet Interest Income & Margin Change in Net Interest Income1
13 Noninterest income 1Q21 Linked Quarter Change Like Quarter Change Insurance income $626 $81 $77 Wealth management income 341 9 9 Service charges on deposits 258 (8) (47) Residential mortgage income 100 (93) (145) Investment banking and trading income 340 32 222 Card and payment related fees 200 (3) 13 Lending related fees 100 (5) 33 Operating lease income 68 (9) (9) Commercial real estate related income 43 (80) (1) Income from bank-owned life insurance 50 6 6 Securities gains (losses) — — 2 Other income (loss) 71 (18) 76 Total noninterest income $2,197 ($88) $236 Adjusted noninterest income1 $2,160 ($125) $197 $1,961 $2,285 $2,197 34.9% 40.4% 40.1% Noninterest income ($ MM) Fee income ratio (%) 1Q20 4Q20 1Q21 1 Excludes securities gains (losses) and 1Q21 divestiture of certain businesses Noninterest Income & Fee Income Ratio Noninterest Income ($ MM) ▪ Noninterest income decreased $88 million to $2.2 billion and represented 40.1% of total revenue ▪ Insurance income was strong, increasing $81 million sequentially largely due to seasonality and recent acquisitions; organic revenue grew 6.4% vs. 1Q20 ▪ Record investment banking and trading income increased $32 million primarily due to a recovery of previously recorded CVA losses and higher investment banking revenues ▪ Residential mortgage income decreased $93 million, primarily due to lower production-related revenue as a result of lower gain on sale margins and volumes ▪ Commercial real estate related income decreased $80 million, reflecting seasonality at Grandbridge and strong 4Q20 transaction activity ▪ Other income was down $18 million as a $49 million reduction in income from partnerships, due to a strong fourth quarter, was partially offset by $37 million of gains ($3 million after tax loss) from the divestiture of certain businesses Key Points
14 Noninterest expense & efficiency ratio ▪ Noninterest expense decreased $223 million sequentially to $3.6 billion ▪ Adjusted noninterest expense decreased $57 million, largely due to reductions in professional fees and outside processing and lower non- service-related pension cost components, partially offset by increased personnel expense ▪ Professional fees and outside processing decreased $43 million due to lower spend for strategic technology projects ▪ Personnel expense increased $34 million, reflecting higher equity-based compensation due to new grants, reset of payroll tax limits at the beginning of the year, and other employee benefits, partially offset by lower salaries and wages • Average FTEs decreased 486 sequentially and are down 5,280 since merger announcement ▪ Merger-related & restructuring charges decreased $167 million due to lower facilities impairments and severance charges 1Q21 Linked Quarter Change Like Quarter Change Personnel expense $2,142 $34 $170 Professional fees and outside processing 350 (43) 103 Net occupancy expense 209 2 (12) Software expense 210 (5) — Amortization of intangibles 144 (28) (21) Equipment expense 113 (8) (3) Marketing and customer development 66 8 (18) Operating lease depreciation 50 (4) (21) Loan-related expense 54 (11) (8) Regulatory costs 25 (7) (4) Merger-related and restructuring charges 141 (167) 34 Loss (gain) on early extinguishment of debt (3) (3) (3) Other expense 109 9 (38) Total noninterest expense $3,610 ($223) $179 Adjusted noninterest expense1 $3,117 ($57) $32 $3,431 $3,833 $3,610 61.1% 67.8% 65.8% 54.6% 55.9% 56.9% Total noninterest expense ($ MM) GAAP efficiency (%) Adjusted efficiency (%) 1Q20 4Q20 1Q21 1 Excludes selected items referenced on slide A-8 of the attached appendix Noninterest Expense & Efficiency Ratio Noninterest Expense ($ MM) Key Points
15 Merger cost update Anticipated total merger costs through 2022 (not in run rate thereafter) 1 Includes net occupancy, software, equipment, loan processing, and other expense Estimated total merger-related and restructuring charges and incremental operating expenses include costs projected through 2022 (not expected be part of the run rate post 2022); excludes non-merger restructuring items Merger-Related and Restructuring Charges (Expenses to complete merger with no future benefit) Examples of Merger-Related Charges Estimated Total Approx. $2.1B ($1.3B incurred since Feb. 2019 - Mar. 2021) Severance & comp Primarily severance payments Occupancy & equipment Impairments related to vacating branch and corporate buildings Professional fees & outside processing Investment banker and legal fees related to the merger as well as third party labor related to system conversions and decommissioning System conversion costs Write-offs for technology assets Incremental Operating Expenses Related to the Merger (Expenses for which the ongoing entity receives a future benefit) Examples of Incremental Operating Expenses Related to the Merger Estimated Total Approx. $1.8B ($900MM incurred since Feb. 2019 - Mar. 2021) Personnel Salaries and incentive expense for FTEs dedicated to merger integration work Professional fees & outside processing Third party labor related to target future state system design, optimization, and enhancement Marketing & other development Rebranding costs All other operating expenses1
16 Asset quality $1,177 $1,387 $1,299 0.23% 0.27% 0.25% Nonperforming assets ($ MM) NPAs as a % of total assets 1Q20 4Q20 1Q21 $272 $205 $238 $177 Net charge-offs ($ MM) Provision NCOs as % of avg. loans and leases 1Q20 4Q20 1Q21 0.36% 1Q20 4Q20 1Q21 4.76x 7.15x 0.27% ▪ Strong asset quality metrics remain stable, reflecting diversification benefits of the merger and effective problem asset resolution ▪ Nonperforming assets / assets ratio decreased 2 bps ▪ Annualized net charge-offs as a percentage of average loans and leases were 33 bps, up from 27 bps in the prior quarter ▪ Provision for credit losses was $48 million and included a reserve release of $190 million reflecting lower loan volume and improvement in the economic outlook while reflecting continued risks associated with the pandemic ▪ Allowance for credit losses was 2.06% of loans held for investment, down 1 bp from prior quarter Key PointsNet Charge-offs & Provision Nonperforming Assets ALLL for Loans & Leases to Net Charge-offs $5,611 $6,011 1.76% 2.07% 2.06% ACL ($ MM) % of ACL to total LHFI 1Q20 4Q20 1Q21 Allowance for Credit Losses ($ MM) 5.87x 0.33% $6,199 $48 $893
17 Capital and liquidity position ▪ CET1 ratio increased to 10.1% ▪ Our dividend payout ratio of 45.4% reflected the 1Q21 common dividend of $0.45 per share ▪ Share repurchases totaled $506 million in 1Q21, contributing to a total payout ratio of 83.3% ▪ Remaining authorization under the share repurchase program approved by the Board in December 2020 is approximately $1.5 billion • Intend to maintain CET1 ratio at approximately 10% after considering strategic actions (such as bolt-on acquisitions) and share repurchases, as well as changes in risk-weighted assets • For 2Q21, Truist intends to execute share repurchases consistent with the Federal Reserve’s capital restrictions announced March 25, 2021 • For 2Q21, Truist anticipates share repurchases of approximately $600 million ▪ Truist redeemed all of its Series F and Series G Preferred Stock during the quarter; Truist incurred an after-tax charge of $26 million, or $0.02 per share, to complete the redemption, which was not excluded from adjusted net income or EPS ▪ Liquidity ratios continue to be strong: • Average LCR was 111% for 1Q21 • Liquid asset buffer was 23.2% at March 31, 2021 9.3% 10.0% 10.1% Common Equity Tier 1 Tier 1 Total 1Q20 4Q20 1Q21 Current quarter regulatory capital information is preliminary 10.5% 12.7% 12.1% 117% 113% 111% $74.2 $81.0 $80.2 LCR HQLA ($ B) 1Q20 4Q20 1Q21 14.5% Key PointsCapital Ratios Category III LCR & HQLA 12.0% 14.3%
18 Committed to achieving net cost saves Digital Innovation Marketing / Branding Talent / Benefits Technology Platforms 1 Reflects normal attrition and reductions in force from 1Q19 proforma through 1Q21 Third Party Spend Targeting 10% reduction in sourceable spend Non-Branch Facilities Targeting approximately 4.8MM net sq. ft.reductions Retail Banking Targeting 800 total closures by 1Q22 Technology Driven by integration efforts, applications, hardware, and staff rationalization Personnel1 Avg. FTEs decreased by approximately 9% at 1Q21 Achieved through: 4Q20 - 7.5% 1Q21 - 9.3% Cumulative closures through: 4Q20 - 148 1Q21 - 374 Cumulative reductions through: 4Q20 - 2.3MM 1Q21 - 3.5MM Includes normal attrition and reductions in force In ve st m en ts C os t S av es Expecting total savings of approximately $425MM by the end of 2022 vs. 2019
19 Cost saves progress Medium-Term Performance Targets Net Expense Savings - Run Rate1 ROTCE Low 20% Adjusted Efficiency Low 50% CET1 Approx. 10% 4Q20 annualized $640MM 40% of net cost saves 4Q21 annualized $1,040MM 65% of net cost saves 4Q22 annualized $1,600MM 100% of net cost saves $3,117 $(32) $(20) $3,065 Adjusted noninterest expense Non-qualified plan expenses Noninterest expense-insurance acquisition post MOE Core noninterest expense1 1 Excludes selected items referenced on slide A-8 of the attached appendix 2 Substantially offset in noninterest income 2 1Q21 Core Noninterest Expense ($ MM) Remain committed to 4Q21 targeted core expenses of $2,940MM Relative to the prior quarter, 1Q21 core noninterest expense was impacted by ▪ Seasonally higher payroll taxes and equity compensation expense ▪ Variable commissions remained high due to strong fee revenue Key Points
20 Integrated Relationship Management A Strong Community Bank and Investment Bank Partnership M&A Advisory Actions ▪ M&A transactions are growing YOY ▪ IRM process allows for relationships to continue post-sale, significant increase in AUM for Wealth business ▪ 75% of CCB regions discussing at least one active business transition opportunity and nearly 50% are discussing multiple opportunities Syndicated Credit Facilities ▪ 25% increase in CCB assisted syndicated transactions versus 1Q20 ▪ Consistent growth in leading roles and new opportunities Delivering capital markets solutions through the Corporate & Institutional Group (CIG) to the Commercial Community Bank (CCB) is a key strategy. IRM adoption is working ▪ CCB introductions to CIG increased more than 2x vs. 4Q20 and nearly 3x vs 1Q20.1 Established banker expectations and partnership agreements, resulting in an increased level of advisory conversations with clients. Two new industry consultants were added in the CCB to accelerate this partnership. Teammate adoption of client engagement tools has allowed us to better advise clients virtually. 1 Excludes interest rate derivatives
21 ▪ Almost half of all insurance introductions are now from heritage SunTrust teammates ▪ Heritage SunTrust teammate introductions from the Corporate & Institutional Group have increased more than 4x from 1Q20 ▪ Heritage SunTrust teammate introductions from the Commercial Community Bank have increased 2x from 1Q20 ▪ Despite longer insurance sales cycles of 18-36 months for large corporate clients, the pipeline of heritage SunTrust clients continues to develop ▪ Referral activity to insurance from every major Truist business has increased substantially in 1Q21 Referrals to insurance have increased more than 2.3x compared with 1Q20 and more than 50% from the prior quarter Insurance industry practice groups have been aligned with industry specialties for the commercial and investment banking segments Systems and technology enhancements have been implemented to improve the IRM experience for teammates Training and development began at merger to enrich new IRM relationships and provide product knowledge Integrated Relationship Management Creating Value for SunTrust Clients with Truist Insurance Holdings
22 Value proposition Purpose-driven: Committed to inspire and build better lives and communities Growing earnings stream with less volatility relative to peers over the long-term ▪ Sixth-largest commercial bank in the U.S. ▪ Strong market share in vibrant, fast- growing MSAs throughout the Southeast and Mid-Atlantic and a growing national presence ▪ Comprehensive business mix with distinct capabilities in traditional banking, capital markets and insurance ▪ Better together: “Best of breed” talent, technology, strategy, and processes ▪ Continued confidence in achieving $1.6 billion of net cost savings ▪ Highly complementary businesses and expanded client base combine to yield revenue synergies ▪ Returns and capital buoyed by purchase accounting accretion ▪ Meaningful investments in innovative technologies, teammates, marketing, and advertising ▪ Prudent and disciplined risk and financial management ▪ Conservative risk culture; leading credit metrics; among the highest- rated large banks ▪ Diversification benefits arising from the merger ▪ Stress test well ▪ Strong capital and liquidity support flight to quality ▪ Defensive balance sheet insulated by purchase accounting marks, combined with CECL credit reserves Exceptional franchise with diverse products, services, and markets Uniquely positioned to deliver best-in-class efficiency and returns while investing in the future Strong capital and liquidity with resilient risk profile enhanced by the merger
Appendix
A-1 Consumer Banking & Wealth 1Q20 4Q20 1Q21 Net interest income $2,257 $2,200 $2,138 Provision for credit losses 437 116 100 Noninterest income 1,066 994 921 Noninterest expense 2,004 1,960 1,910 Pre-tax income 882 1,118 1,049 Segment net income 675 854 803 Average loans(1) $139.9 $138.0 $133.6 Average deposits 204.1 227.9 234.6 Mortgages serviced for others ($ B)(2) $220.0 $188.3 $179.8 Branches(3) 2,957 2,781 2,556 ATMs 4,408 4,082 3,807 In co m e S ta te m en t ( $ M M ) B al an ce S he et ( $ B ) O th er K ey M et ric s (1) Excludes loans held for sale (2) Amount reported reflects end of period balance (3) 1Q20 branch count includes 30 branches subsequently divested in July 2020 Represents performance for Retail Community Banking, Wealth, Mortgage Banking, Dealer Retail Services, and National Consumer Finance & Payments ▪ 226 branches closed in 1Q21 related to MOE branch consolidation. After accounting for 1 new branch opened in the quarter, a net of 225 branches closed in 1Q21 ▪ Noninterest income decreased primarily driven by lower residential mortgage income due to higher prepayment rates impacting both HFI and MSR outstandings and lower production volume, and by lower service charges on deposits attributed to clients carrying a higher average balance in checking accounts as a result of various stimulus programs, partially offset by gains from the divestiture of certain businesses and higher wealth management income due to increased market valuations ▪ Noninterest expense decreased primarily due to lower occupancy expense, loan related expenses, equipment expenses, merger-related expenses, and amortization of intangibles ▪ Average loans held for investment decreased primarily due to lower residential mortgage balances driven by continued high prepayment rates and lower home equity and direct consumer lending, as well as the exit of a small ticket loan and lease portfolio, partially offset by increased indirect auto lending ▪ Average deposits increased primarily due to the impact of various stimulus programs and reduced consumer spending through 2020 as a result of the pandemic environment ▪ 1Q21 average total deposit cost decreased to 5 bps; average interest-bearing deposit cost decreased to 7 bps Key Points
A-2 Corporate & Commercial Banking 1Q20 4Q20 1Q21 Net interest income $1,323 $1,282 $1,209 Provision for credit losses 399 60 (35) Noninterest income 457 789 694 Noninterest expense 869 831 782 Pre-tax income 512 1,180 1,156 Segment net income 421 922 908 Average loans(1) $158.6 $161.8 $158.2 Average deposits 118.6 139.2 140.4 In co m e S ta te m en t ( $ M M ) ▪ Noninterest income decreased $95 million, or 12% from 4Q20, driven primarily by lower commercial real estate related income from seasonally higher 4Q, lower operating lease income, and lending related fees, partially offset by strong investment banking and trading income driven by higher bond and equity origination and improved derivative valuation marks ▪ Noninterest expense decreased primarily due to lower personnel expense, merger-related expenses, operating lease depreciation, and amortization of intangibles, partially offset by higher professional fees and outside processing ▪ Average loans held for investment decreased due primarily to continued lower utilization on revolvers as well as PPP loan forgiveness, partially offset by new PPP loans from the 2nd Paycheck Protection Program ▪ Average deposits increased due to seasonally higher balances from commercial clients, inflows related to various stimulus programs, and reduced spending ▪ 1Q21 average total deposit cost remained flat to prior quarter at 3 bps; average interest-bearing deposit cost remained flat to prior quarter at 6 bps B al an ce S he et ($ B ) (1) Excludes loans held for sale Represents performance for Commercial Community Banking, Corporate & Investment Banking, and CIG – Real Estate Key Points
A-3 Insurance Holdings 1Q20 4Q20 1Q21 Net interest income $25 $22 $20 Noninterest income 557 562 633 Total revenue 582 584 653 Provision for credit losses 1 2 1 Noninterest expense 440 451 479 Pre-tax income 141 131 173 Segment net income 105 99 131 Y-o-Y organic revenue growth 7.2% 2.9% 6.4% Net acquired revenue $2 $9 $28 Performance based commissions 18 20 16 Adjusted EBITDA(1) 164 160 204 Adjusted EBITDA margin(1) 28.1% 27.3% 31.2% In co m e S ta te m en t ( $ M M ) P er fo rm an ce ( $ M M ) ▪ Record quarterly revenue as operating environment remains favorable with rising rates and positive momentum in economic growth ▪ 1Q21 organic growth driven by strong new business growth, stable and improving retention, and P&C rate increases ▪ 1Q21 new business up 12.8% vs. 1Q20 ▪ P&C rate environment remains positive with rate increases in 1Q21 comparable or slightly up vs. prior periods ▪ Margin expansion driven by revenue growth, lower T&E expense, and prudent expense management (1) EBITDA is a non-GAAP measurement of operating profitability that is calculated by adding back interest, taxes, depreciation and amortization to net income. Truist's management also adds back merger- related and restructuring charges, incremental operating expenses related to the merger and other selected items. Truist's management uses this measure in its analysis of the Corporation's Insurance Holdings segment. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. See non-GAAP reconciliations included in the attached Appendix. Represents performance for Retail and Wholesale Insurance businesses and Premium Finance Key Points
A-4 Purchase Accounting Summary(1) ($ MM) As of/For the Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2021 2020 2020 2020 2020 Loans and Leases(2) Beginning balance unamortized fair value mark $ (2,395) $ (2,676) $ (3,077) $ (3,539) $ (4,564) Accretion 316 356 367 440 454 CECL adoption - reserves on PCD assets — — — — 378 Purchase accounting adjustments and other activity 12 (75) 34 22 193 Ending balance $ (2,067) $ (2,395) $ (2,676) $ (3,077) $ (3,539) Core deposit and other intangible assets Beginning balance $ 2,984 $ 2,840 $ 3,016 $ 3,168 $ 3,142 Additions - acquisitions 14 320 — — 31 Amortization (144) (172) (170) (178) (165) Amortization in net occupancy expense (3) (4) (6) (6) (5) Purchase accounting adjustments and other activity (26) — — 32 165 Ending balance $ 2,825 $ 2,984 $ 2,840 $ 3,016 $ 3,168 Deposits(3) Beginning balance unamortized fair value mark $ (19) $ (26) $ (37) $ (54) $ (76) Amortization 4 7 11 17 22 Ending balance $ (15) $ (19) $ (26) $ (37) $ (54) Long-Term Debt(3) Beginning balance unamortized fair value mark $ (216) $ (238) $ (262) $ (285) $ (312) Amortization 20 22 24 23 27 Ending balance $ (196) $ (216) $ (238) $ (262) $ (285) (1) Includes the merger with SunTrust. This summary 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 2Q21 - 4Q21 Preferred Stock Projected Dividends 3ML = 3-month LIBOR. Estimates assume an average LIBOR rate of 0.18% for 1Q21-3Q21. Actual 3ML could vary significantly causing dividend payments to differ from the estimates shown above. Truist Preferred Outstandings ($ MM) 2Q21 3Q21 4Q21 Series H $465.0 $6.5 $6.5 $6.5 Series I $172.5 $1.8 $1.8 $1.7 Series J $101.5 $1.0 $1.0 $1.0 Series L $750.0 $18.9 — $18.9 Series M $500.0 $12.8 — $12.8 Series N $1,700.0 — $40.8 — Series O $575.0 $7.5 $7.5 $7.5 Series P $1,000.0 $24.8 — $24.8 Series Q $1,000.0 — $25.5 — Series R $925.0 $11.0 $11.0 $11.0 Estimated dividends based on current interest rates and amounts outstanding ($ MM) $84.4 $94.2 $84.4
Non-GAAP Reconciliations
A-7 Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2021 2020 2020 2020 2020 Net income available to common shareholders - GAAP $ 1,334 $ 1,228 $ 1,068 $ 902 $ 986 Merger-related and restructuring charges 108 237 181 160 82 Securities (gains) losses — — (80) (230) 2 Loss (gain) on early extinguishment of debt (2) — — 180 — Incremental operating expenses related to the merger 134 138 115 99 57 Charitable contribution — — 38 — — Acceleration for cash flow hedge unwind 28 — — — — Net income available to common shareholders - adjusted $ 1,602 $ 1,603 $ 1,322 $ 1,111 $ 1,127 Weighted average shares outstanding - diluted 1,358,932 1,361,763 1,358,122 1,355,834 1,357,545 Diluted EPS - GAAP $ 0.98 $ 0.90 $ 0.79 $ 0.67 $ 0.73 Diluted EPS - adjusted(1) 1.18 1.18 0.97 0.82 0.83 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-8 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 2021 2020 2020 2020 2020 Efficiency ratio numerator - noninterest expense - GAAP $ 3,610 $ 3,833 $ 3,755 $ 3,878 $ 3,431 Merger-related and restructuring charges, net (141) (308) (236) (209) (107) Gain (loss) on early extinguishment of debt 3 — — (235) — Incremental operating expense related to the merger (175) (179) (152) (129) (74) Amortization of intangibles (144) (172) (170) (178) (165) Charitable contribution — — (50) — — Acceleration for cash flow hedge unwind (36) — — — — Efficiency ratio numerator - adjusted $ 3,117 $ 3,174 $ 3,147 $ 3,127 $ 3,085 Efficiency ratio denominator - revenue(1) - GAAP $ 5,482 $ 5,651 $ 5,572 $ 5,871 $ 5,611 Taxable equivalent adjustment 28 28 29 31 37 Securities (gains) losses — — (104) (300) 2 Gains on divestiture of certain businesses (37) — — — — Efficiency ratio denominator - adjusted $ 5,473 $ 5,679 $ 5,497 $ 5,602 $ 5,650 Efficiency ratio - GAAP 65.8 % 67.8 % 67.4 % 66.1 % 61.1 % Efficiency ratio - adjusted(2) 56.9 55.9 57.3 55.8 54.6
A-9 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 2021 2020 2020 2020 2020 Common shareholders' equity $ 60,752 $ 62,759 $ 61,819 $ 61,634 $ 61,295 Less: Intangible assets, net of deferred taxes 26,413 26,629 25,923 26,083 26,263 Tangible common shareholders' equity(1) $ 34,339 $ 36,130 $ 35,896 $ 35,551 $ 35,032 Outstanding shares at end of period 1,344,845 1,348,961 1,348,118 1,347,609 1,347,461 Common shareholders' equity per common share $ 45.17 $ 46.52 $ 45.86 $ 45.74 $ 45.49 Tangible common shareholders' equity per common share(1) 25.53 26.78 26.63 26.38 26.00 Net income available to common shareholders $ 1,334 $ 1,228 $ 1,068 $ 902 $ 986 Plus amortization of intangibles, net of tax 111 131 130 137 126 Tangible net income available to common shareholders(1) $ 1,445 $ 1,359 $ 1,198 $ 1,039 $ 1,112 Average common shareholders' equity $ 62,252 $ 61,991 $ 61,804 $ 61,484 $ 60,224 Less: Average intangible assets, net of deferred taxes 26,535 25,930 25,971 26,161 26,429 Average tangible common shareholders' equity(1) $ 35,717 $ 36,061 $ 35,833 $ 35,323 $ 33,795 Return on average common shareholders' equity 8.69 % 7.88 % 6.87 % 5.90 % 6.58 % Return on average tangible common shareholders' equity(1) 16.40 14.99 13.31 11.83 13.23
A-10 Non-GAAP Reconciliations Performance Ratios ($ MM) (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. (2) Tangible common equity is a non-GAAP measure. The reconciliation for this measure is on the previous slide. Quarter Ended March 31, 2021 Return on Average Assets Return on Average Common Shareholders’ Equity Return on Average Tangible Common Shareholders’ Equity2 Net income - GAAP $ 1,473 Net income available to common shareholders - GAAP $ 1,334 $ 1,334 Merger-related and restructuring charges 108 108 108 Loss (gain) on early extinguishment of debt (2) (2) (2) Incremental operating expenses related to the merger 134 134 134 Acceleration for cash flow hedge unwind 28 28 28 Amortization — — 111 Numerator - adjusted(1) $ 1,741 $ 1,602 $ 1,713 Average assets $ 508,833 Average common shareholders' equity — $ 62,252 $ 62,252 Plus: Estimated impact of adjustments on denominator — 134 134 Less: Average intangible assets, net of deferred taxes — — 26,535 Denominator - adjusted(1) $ 508,833 $ 62,386 $ 35,851 Reported ratio 1.17 % 8.69 % 16.40 % Adjusted ratio 1.39 10.41 19.36
A-11 Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2021 2020 2020 2020 2020 Net interest income - GAAP $ 3,285 $ 3,366 $ 3,362 $ 3,448 $ 3,650 Taxable-equivalent adjustment 28 28 29 31 37 Net interest income - taxable-equivalent 3,313 3,394 3,391 3,479 3,687 Accretion of mark on acquired loans (316) (356) (367) (440) (454) Accretion of mark on acquired liabilities (24) (29) (35) (40) (49) Accretion of mark on securities acquired from FDIC — — — (3) (3) Net interest income - core(1) $ 2,973 $ 3,009 $ 2,989 $ 2,996 $ 3,181 Average earning assets - GAAP $ 443,946 $ 438,666 $ 435,394 $ 446,825 $ 413,533 Average balance - mark on acquired loans 2,263 2,550 2,918 3,297 3,759 Average balance - mark on securities acquired from FDIC — — — 300 336 Average earning assets - core(1) $ 446,209 $ 441,216 $ 438,312 $ 450,422 $ 417,628 Annualized net interest margin: Reported - taxable-equivalent 3.01 % 3.08 % 3.10 % 3.13 % 3.58 % Core(1) 2.69 2.72 2.72 2.67 3.06 Non-GAAP Reconciliations Core NIM ($ MM) (1) Core net interest margin is a non-GAAP measure that adjusts net interest margin to exclude the impact of purchase accounting. The purchase accounting marks and related amortization for a) securities acquired from the FDIC in the Colonial Bank acquisition and b) loans, deposits and long-term debt from SunTrust, Susquehanna, National Penn and Colonial Bank 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-12 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 March 31 2021 2020 2020 Segment net interest income $ 20 $ 22 $ 25 Noninterest income 633 562 557 Total revenue $ 653 $ 584 $ 582 Segment net income (loss) - GAAP $ 131 $ 99 $ 105 Provision (benefit) for income taxes 42 32 36 Depreciation & amortization 27 21 19 EBITDA 200 152 160 Merger-related and restructuring charges, net 4 8 3 Adjusted EBITDA(1) $ 204 $ 160 $ 163 Adjusted EBITDA(1) margin 31.2 % 27.3 % 28.1 %
A-13 Non-GAAP Reconciliations Allowance with Fair Value Marks ($ MM) As of/For the Quarter Ended March 31 Dec. 31 Sept. 30 June 30 March 31 2021 2020 2020 2020 2020 ALLL $ 5,662 $ 5,835 $ 5,863 $ 5,702 $ 5,211 Unamortized fair value mark (1) 2,067 2,395 2,676 3,077 3,539 Allowance plus unamortized fair value mark $ 7,729 $ 8,230 $ 8,539 $ 8,779 $ 8,750 Loans and leases held for investment $ 291,511 $ 299,734 $ 306,627 $ 314,825 319,229 Unamortized fair value mark (1) 2,067 2,395 2,676 3,077 3,539 Gross loans and leases $ 293,578 $ 302,129 $ 309,303 $ 317,902 $ 322,768 Allowance for loan and lease losses as a percentage of loans and leases - GAAP 1.94 % 1.95 % 1.91 % 1.81 % 1.63 % Allowance for loan and lease losses and unamortized fair value mark as a percentage of gross loans and leases - Adjusted (1) (2) 2.63 % 2.72 % 2.76 % 2.76 % 2.71 % (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.
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