TRUIST FINANCIAL CORP Q4 FY2024 earnings call

• Introduced Brad Bender as Chief Risk Officer, thanked Beau Cummins and Clarke Starnes for their roles. - Responded to Hurricane Helene with a $725 million three-year commitment. - Fourth quarter net income available to common shareholders was $1.2 billion or $0.91 a share. Annual GAAP net income was $4.5 billion or $3.36 a share. - Strategic priorities for 2025 include attracting/developing/retaining talent, deepening client relationships, expanding into new markets, investing in technology, and maintaining expense discipline. - Progress in segments: Consumer & Small Business Banking had loan production growth and improved client experience; Wholesale saw improved production, increased wallet share, and new hires; digital initiatives had strong growth in accounts and users.

In Consumer & Small Business Banking, average consumer loan balances increased 1.2% linked-quarter due to growth in residential mortgage, indirect auto, etc. Net new checking account growth was positive for the year with 104,000 new consumer and business accounts added. Primacy rates and client retention increased. In Wholesale, average Wholesale deposits grew 3%, end-of-period loan balances increased 50 basis points. Investment banking and trading revenue increased 46% in 2024 versus 2023, representing the highest level since 2021. Digital capabilities showed strong growth with over 730,000 new digital loan and deposits accounts opened in 2024, including nearly 275,000 new-to-bank clients through digital channels, and over 7.1 million active digital users.

• First quarter 2025: Revenue expected to decrease 2% relative to Q4 2024 revenue of $5.1 billion. Net interest income expected to decrease 2% in Q1, partially offset by slightly higher average loan balances. Noninterest income expected to decrease 2.5%. Adjusted expenses expected to decline 3% linked-quarter. - Full-year 2025: Revenue expected to increase 3%-3.5% relative to 2024 adjusted revenue of $20.1 billion. Net interest income outlook assumes low-single-digit end-of-period loan growth and two Fed fund rate cuts. Noninterest income expected to increase at low single-digit rate. Adjusted expenses expected to increase ~1.5%. Net charge-offs expected to be about 60 basis points. Effective tax rate expected to approximate 17%-20% on a taxable equivalent basis.

• Impact of external rate environment on net interest income, with fewer or later Fed rate cuts presenting headwinds. - Stress in the office portfolio, although the size is manageable and well reserved. - Competition in markets which could affect market share and deposit growth.

Q: Scott Siefers with Piper Sandler asked about how much building momentum is due to external rate environment and loan demand evolution.

A: Mike Maguire said first quarter has day count impact, betas on deposits are catching up, and Bill Rogers discussed consumer and C&I loan growth with momentum and client expansion.

Q: Ebrahim Poonawala with Bank of America asked about growth opportunity in New Jersey, Pennsylvania, Texas.

A: Bill Rogers said these are markets with existing presence, added bankers, saw production and client growth, and expects more expansion.

Q: Matt O'Connor with Deutsche Bank asked about targeted capital levels and preferred stock.

A: Mike Maguire said longer-term CET1 target around 10%, and they're managing preferred stock through liability management.

Q: Erika Najarian with UBS asked about securities book duration and received fixed swaps.

A: Mike Maguire discussed AFS and HTM portfolio durations and the progress of received fixed swaps.

Q: Betsy Graseck with Morgan Stanley asked about expense outlook.

A: Mike Maguire and Bill Rogers discussed expense drivers like Investment Banking, risk infrastructure, and talent hiring.

Q: John Pancari with Evercore asked about material expense investments and flexibility.

A: Bill Rogers and Mike Maguire talked about investments in risk infrastructure, cybersecurity, and talent hiring, and commitment to positive operating leverage.

Q: Mike Mayo with Wells Fargo asked about market share in certain markets.

A: Bill Rogers discussed market competitiveness and progress in gaining market share.

Q: Gerard Cassidy with RBC asked about Investment Banking growth.

A: Bill Rogers talked about the growth potential of Investment Banking with efficient operation and strategic focus.