With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Fortune Global 500

Industries included in the sector are banks, insurance, and real estate companies.

Fortune Sector Leaders: Financials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 200 companies on this list are transforming industries from the inside out.

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

World's Most Admired Companies

The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

This year’s Fortune 500 marks the 68th running of the list.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

Headquartered in Charlotte, North Carolina, the holding company is the result of the 2019 merger between BB&amp;T and SunTrust Banks. It is the sixth-largest bank in the U.S. by assets and provides services to around 10 million consumer households.

This year’s Fortune 500 marks the 67th running of the list.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune 500 marks the 66th running of the list.

Truist Financial is the sixth-largest U.S. bank holding company, which formed upon the completion of the merger of BB&amp;T and SunTrust in December 2019. It offers consumer and commercial banking, wealth management, and a variety of other financial services.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 64th running of the list.

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 62nd running of the list.

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Sector

Industry

Industry Rank

Previous Industry Rank

Overall Score

Innovation

People Management

Use of Corporate Assets

Social Responsibility

Quality of Management

Financial Soundness

Long-Term Investment Value

Quality of Products/Services

Global Competitiveness

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Strongest Dimension

Years on list

Previous rank

State

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

With origins tracing back to 1872, Truist Financial provides customers in the southeastern and mid-Atlantic U.S. with banking and trust services. Formed from the 2019 merger of BB&amp;T and SunTrust Banks, Truist serves customers through such segments as consumer banking and wealth management, as well as corporate and commercial banking. Savings accounts, asset management, mortgage lending, small-business lending, and credit card lending are among the financial services Truist offers.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

Truist Financial (TFC): Company Profile, Stock Price, News, Rankings

legacy

Truist Financial

truist financial

Greetings, ladies and gentlemen, and welcome to the Truist Financial Corporation Second Quarter twenty twenty five Earnings Conference Call. Currently, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this event is being recorded. It is now my pleasure to introduce your host, Mr. Brad Milsoff.

Thank you, Betsy, and good morning, everyone. Welcome to Truist's second quarter twenty twenty five earnings call. With us today are our Chairman and CEO, Bill Rogers our CFO, Mike Maguire and Chief Risk Officer, Brad Bender as well as other members of Truist's senior management team. During this morning's call, they will discuss Truist's second quarter results, share their perspectives on current business conditions and provide an outlook for 2025. The company presentation as well as our earnings release and supplemental financial information are available on the Truist Investor Relations website, ir.truest.com.

Our presentation today will include forward looking statements and certain non GAAP financial measures. Please review the disclosures on Slides two and three of the presentation regarding these statements and measures as well as the appendix for appropriate reconciliations to GAAP. With that, I'll turn it over to Bill.

Great. Thanks, Brad, and good morning, everyone, and thanks for joining our call this morning. Before we discuss the second quarter results, let's begin like we always do at with purpose on slide four. At Truist, our purpose to inspire and build better lives and communities, it's more than a statement. It's the foundation of our strategy.

It's the lens through which we make decisions and the reasons teammates show up every day with conviction and care. In the second quarter, we continue to bring this purpose to life in meaningful ways. We welcomed a dynamic slate of new leaders across our company, reinforcing our commitment to attracting top talent to our already highly experienced and very capable teams. These leaders were attracted to our purpose driven culture and are already making meaningful impact, strengthening our presence in key growth markets and expanding our capabilities across high potential verticals. From sector specific coverage to commercial and middle market banking, to small business wealth, premier banking and payments, our teams are deepening client relationships, driving new business and positioning Truist for the long term sustainable growth, all which were evident in these second quarter results.

On slide five, for the second quarter, we reported net income available to common shareholders of $1,200,000,000 or $0.90 a share, which included $02 of restructuring charges related to severance and $01 of losses from the sale of certain investment securities. At a high level, our solid performance in the second quarter reflects the diversity of our business model and the execution of many of our strategic growth initiatives that we've been discussing now for several quarters. These initiatives include accelerating growth through the addition of new clients and deepening existing client relationships in areas like payments, wealth and premier banking. We're executing our plan while maintaining our expense and credit discipline and returning capital to shareholders. During the second quarter, loan balances increased 2% and end of period loans increased 3.3% linked quarter.

Growth was broad based across our consumer and wholesale segments and driven by increased loan production and new client acquisition. Our lending pipelines remain strong and overall loan production is up significantly year over year. Growth should also benefit from our expansion efforts in markets where we have smaller but growing share and from many of the new teammates that have joined our company. This quarter's loan growth helped offset the equity and debt market volatility that occurred early in the quarter. This volatility impacted trading, capital markets and M activity for the industry resulting in lower revenue for investment banking and trading businesses.

As you've heard me discuss previously, I'm confident that our advice driven business model is well suited to help our clients navigate current market conditions and continue to grow our share given the ongoing investments we are making in talent, products and industry verticals. We believe that our investment banking and trading business is well positioned for a second half recovery as we saw steady improvement in overall banking revenue in each month during the quarter. Adjusted expenses did come at the high end of the expected range, but remain confident in our ability to deliver our 1% expense growth target and positive operating leverage in this year. That includes the impact of ongoing investments in talent and technology. We also maintained strong asset quality metrics as both non performing loans and net charge offs were down nine basis points linked quarter.

In addition, we also received favorable results from the Federal Reserve's annual stress test. We expect that our stress capital buffer will decline and be floored at 2.5% effective October 1. Finally, we remain in a strong capital position, which allows us to support our balance sheet growth and return capital to shareholders. During the quarter, we returned $1,400,000,000 of capital to shareholders through our common stock dividend and the repurchase of $750,000,000 of our common stock. Our share repurchase activity in the second quarter included $250,000,000 of repurchases above our recent $500,000,000 quarterly target as we opportunistically took advantage of market volatility and weakness in our share price early in the quarter.

We do plan to target approximately $500,000,000 of share repurchases during the third quarter. Before I hand the call over to Mike to discuss the quarterly results, I want to spend some time discussing the progress we're already making on our strategic priorities and the positive momentum we're seeing within our business segments and with our digital initiatives on slides six and seven. In consumer and small business banking, I'm encouraged by another solid quarter of consumer loan and deposit growth, net new checking account growth and progress with our premier banking clients as we deepened relationships and acquired key new clients and households through digital and traditional channels. Net new checking account growth, which is a key measure for the growth potential and health of our company, was once again positive in the second quarter as we added nearly 37,000 new customers, new consumer and small business accounts. Importantly, we're attracting younger clients with higher average balances and greater median income, which aligns with our strategy to engage clients early and build enduring relationships over time.

Average consumer and small business loan balances increased 2.8% linked quarter and end of period balances increased 3.8% due to growth in residential mortgage, indirect auto and other consumer with production up significantly year over year. Over the last year, we've added significant numbers of new partners and dealers to our service finance and Sheffield platforms, which is helping drive the growth in other consumer loan balances. We also saw a significant increase in loan and deposit production per banker in our premier banking segment, which is a key area of strategic focus. We're growing while also maintaining our credit and pricing discipline. Consumer net charge offs of 71 basis points reached their lowest level since 2023 and new production spreads remained accretive to the overall portfolio.

In wholesale, I'm encouraged by this quarter's loan growth, improved production and progress in key focus areas like payments and wealth. During the quarter, we saw 1.5% growth in average wholesale loans and 2.9% growth in end of period loans, driven by growth from new and existing clients and increased production. Average C and I growth was driven by all of our industry banking groups with particular strength in FIG and energy, middle market lending and structured credit. As I've mentioned previously, we have a specific focus on capturing more of the middle market. We've seen these balances increase in each quarter this year, driven by new clients in a wide variety of industries and a targeted select geographies where we continue to expand.

Year to date, we've attracted twice as many new corporate and commercial clients to our platform compared with the same period a year ago, while we're also seeing a 40% increase in revenue per client. In wealth, net asset flows were positive despite volatile equity and fixed income markets, as we saw a 27% increase in year to date AUM from wholesale and premier clients compared with the same period a year ago. Our payments team continues to launch new services that meet our clients' needs for solutions that provide them with speed, simplicity, and safety. During the second quarter, we also experienced more digital innovation. Truist became the first financial institution to prove request for payment over the RTP network via an alias such as a cell phone or an email address.

This innovation is designed to unlock meaningful value for both commercial and consumer clients, accelerating cash flow, improving reconciliation and delivering real time confirmations. These enhancements along with continued investments in our team have driven a meaningful increase in treasury management penetration rates with our existing clients and helped drive a 14% increase in treasury management revenue versus the second quarter of last year. Enhancing the client experience and growing our digital capabilities are also important parts of our strategy. Let me discuss that in detail on slide seven. We continue to see strong momentum in our digital strategy with meaningful progress, platform integration, engagement and production.

In the second quarter, digital account production rose 17% year over year with 43% of new to bank clients joining us through digital channels, a 900 basis point increase versus the second quarter of last year. This momentum reflects investments we've made in our digital platform and improvements we've made to the digital onboarding experience. A key milestone this quarter was fully integrating LightStream lending products into our digital platform under the new LightStream by Truist brand. This integration expands access to lending solutions for all Truist clients and further strengthens our digital offering. We're also seeing deeper engagement across our digital platform.

More than 1,800,000 clients are now using our digital financial management tools, and that's a 40% increase from last year. Together, these results highlight the strength of our digital foundation and our continued focus on delivering value, operating efficiently, and deepening client relationships. We expect to continue growing our digital presence with clients as we further leverage our modern and scalable technology platform. Now, me turn it over to Mike to discuss our financial results in more detail. Mike?

Thank you, Bill, good morning, everyone. I'll start with our financial performance highlights on slide eight. We reported second quarter twenty twenty five GAAP net income available to common shareholders of $1,200,000,000 or $0.90 per share. As Bill mentioned, included in our results are $02 per share of restructuring charges, which are primarily related to severance. In addition, our results included an $18,000,000 pre tax loss or a penny per share after tax related to the sale of three ninety eight million dollars of lower yielding investment securities.

We invested the proceeds from the sale into higher yielding investment securities and anticipate an earn back of approximately two years. Moving now to 2Q 'twenty five results. Adjusted revenue increased 2.1% linked quarter due to 2.3 growth in net interest income and 1.8% growth in non interest income. Adjusted expenses increased 3.1% linked quarter, primarily due to higher personnel expenses related to annual merit increases and strategic hiring efforts. As Bill mentioned, our asset quality metrics showed improvement as both non performing loans and net charge offs declined on a linked quarter basis and year over year basis.

Next, I'll cover loans and leases on slide nine. Average loans held for investment increased 2% on a linked quarter basis due to growth in both average commercial and average consumer loans. End of period loans increased $10,200,000,000 or 3.3%, split evenly between commercial and consumer loans. Average commercial loans increased $3,000,000,000 or 1.6% due to $3,300,000,000 of growth in C and I loans, partially offset by modest declines in CRE and commercial construction loan balances. In our consumer portfolio, average loans increased $3,200,000,000 or 2.7% linked quarter due to growth in residential mortgage, indirect auto and other consumer.

Other consumer loans, which primarily include Sheffield and Service Finance, are typically seasonally strongest in the second and third quarters of the year, but are also benefiting from new partners and dealers added to the platforms throughout the course of the year. Moving to deposit trends on slide 10. Average deposits increased $8,300,000,000 sequentially, or 2.1%, driven by growth in interest checking, time deposits and non interest bearing demand. Average deposit balances were impacted by $10,900,000,000 of short term client deposits that we discussed on last quarter's earnings call. These deposits remained on our balance sheet for the entire quarter, but have since been withdrawn.

Excluding the impact of these deposits, average deposit balances would have been down slightly on a linked quarter basis. As shown in the chart on the bottom right hand side of slide 10, our cumulative interest bearing deposit beta declined from 43% to 37% on a linked quarter basis. If you were to exclude the impact of the two larger short term deposits, the rate paid on interest bearing deposits and our cumulative interest bearing deposit beta would have been relatively stable. Moving to net interest income and net interest margin on slide 11. Factable equivalent net interest income increased 2.3% linked quarter or $80,000,000 primarily due to the impact of loan growth, fixed rate asset repricing and one additional day in the second quarter.

Our net interest income or margin increased one basis point on a linked quarter basis to 3.02%. As you can see on the top right hand side of the slide, we updated our outlook for fixed rate asset repricing. We expect to reprice approximately $27,000,000,000 of fixed rate loans and investment securities over the remainder of 2025. Depending on the level of loan and deposit growth in the second half of twenty twenty five, we may opt to use cash flow from the investment portfolio to fund a portion of our loan growth for the remainder of the year. Based on our current view of interest rates for the remainder of 2025, we anticipate that new fixed rate loans will have a run on rate of around 7%, compared with a run off rate of approximately 6.4%.

We also updated our swap portfolio disclosure in the bottom right hand corner of the slide. This reflects a small increase in our received fixed swap program from the prior quarter. Turning to non interest income on slide 12. Adjusted non interest income increased $25,000,000 or 1.8% versus the first quarter of twenty twenty five, as growth in our other income was partially offset by lower investment banking and trading revenue. The linked quarter increase in non interest income was primarily attributable to an $83,000,000 increase in other income related to higher NQ DCP income, which is offset by personnel expense, and income from certain equity investments and other investments that were lower in the first quarter of twenty twenty five.

Investment banking and trading income declined $68,000,000 or 25% linked quarter, reflecting weaker trading results, lower capital markets activity and lower M and A volumes during the first half of the second quarter. Early in the quarter, our trading business, which primarily supports our investment banking franchise, incurred losses driven by market volatility. The month of May was much improved, and June was more consistent with the performance we have historically experienced in this business and would expect to perform for the remainder of the year. As Bill mentioned, we also saw improvement in investment banking in the second half of the quarter, and we remain optimistic about investment banking and trading revenue improving in the second half of twenty twenty five, based on our current pipeline and an improvement in overall activity. On a like quarter basis, adjusted non interest income declined to $20,000,000 or 1.4% compared to the second quarter of twenty twenty four, primarily due to lower investment banking and trading income and lower wealth management income due to the sale of Sterling Capital Management in July 2024.

Next, I'll cover non interest expense on slide 13. Adjusted non interest expense, which excludes the impact of restructuring charges, increased 3.1% linked quarter due primarily to higher personnel expenses related to annual merit increases and strategic hiring efforts. On a year over year basis, expenses remained well controlled and were up 2.1% due primarily to higher professional fees and outside processing expense related to ongoing investments in technology and in our risk infrastructure. Moving now to asset quality on slide 14. Our asset quality metrics remain strong on both a like and linked quarter basis, reflecting our strong credit risk culture and proactive approach to quickly resolving problem loans.

Net charge offs decreased nine basis points to 51 basis points linked quarter, and were down seven basis points versus the second quarter of twenty twenty four, as we benefited from lower consumer and CRE losses on both a linked and like quarter basis. Our loan loss provision exceeded net charge offs by $92,000,000 but improved outlook for loss rates in certain portfolios like CRE office and multifamily contributed to a four basis point decrease in our ALLL ratio to 1.54% of total loans. Our CRE office portfolio, which represents just above 1% of total loans, declined almost $500,000,000 linked quarter on an end of period basis. Non performing loans held for investment as a percentage of total loans decreased nine basis points linked quarter and seven basis points on a like quarter basis to 39 basis points of total loans. We saw linked quarter improvement in several categories, including CRE and C and I non performing loans, which helped drive our non performing loan level to multi quarter lows.

Turning to capital on slide 15. On a linked quarter basis, our CET1 ratio declined 30 basis points to 11% as balance sheet growth, dollars $750,000,000 of share repurchases and the payment of our common dividend more than offset current period earnings. Our CET1 capital ratio, including the impact of AOCI, declined 30 basis points linked quarter to 9.3%, reflecting the aforementioned factors. During the quarter, we also received favorable CCAR results, resulting in a 50 basis point decrease in our total loss rate and a 90 basis point decrease in our CET1 erosion rate. As a result, we anticipate our stress capital buffer to decline 30 basis points and to be floored at 2.5% effective October 1.

At June 30, our CET1 ratio was 400 basis points higher than our new regulatory minimum of 7%, leaving us well positioned to both grow our balance sheet and return capital to shareholders. Next, I'll provide additional color on our guidance for the 2025 and for the full year. That's on slide 16. For full year 2025, our outlook for revenue and expense growth is unchanged. We continue to expect revenue to increase 1.5% to 2.5% relative to 2024 adjusted revenue of $20,100,000,000 Net interest income remains on track to increase 3% in 'twenty five versus 2024.

Our net interest income outlook assumes low single digit average loan growth and two twenty five basis point reductions in the Fed funds rate in September and December, compared with three previously in June, September and December. We expect non interest income to remain relatively flat to '25 versus 2024. In terms of our outlook for adjusted expenses, we continue to expect full year 'twenty five adjusted expenses to increase by approximately 1% in 2025 versus 2024, which is also unchanged from our previous guidance and continues to imply positive operating leverage of approximately 50 to 150 basis points. In terms of asset quality, we expect net charge offs of 55 to 60 basis points in 2025 compared with 60 basis points previously. Finally, we expect our effective tax rate to approximate 17.5%, or 20% on a taxable equivalent basis in 2025, compared with 1720%, previously due to a lower contribution from non taxable income and certain tax law changes in states in which we operate.

Looking into the third quarter of twenty twenty five, we expect revenue to increase approximately 2.5% to 3.5% relative to second quarter revenue of $5,100,000,000 We expect net interest income to increase approximately 2% in the third quarter, primarily driven by loan growth, the benefit from fixed asset repricing and an additional day in the third quarter relative to the second quarter. We expect non interest income to increase by about 5%, driven primarily by higher investment banking and trading income, partially offset by lower other income. Adjusted expenses of $3,000,000,000 in the second quarter are expected to increase about 1% linked quarter. As it relates to buybacks, as Bill mentioned, we plan to target up to $500,000,000 for the third quarter. With that, I'll hand it back to Bill for some final remarks.

Great. Thanks, Mike. At the beginning of the year, we outlined several strategic priorities that would be key to driving our performance this year and beyond. These top priorities included a keen focus on executing our strategic growth initiatives, driving positive operating leverage, continuing to invest in talent and technology, maintaining our credit and risk discipline and returning capital to shareholders. Although there's still a significant amount of opportunity that lies in front of us, I'm pleased with both the performance and the momentum at the midpoint of this year.

We're seeing solid progress in our key strategic focus areas, including premier banking, wealth payments, and middle market as production deepening with our existing client base and banker productivity have increased in all areas of our business. We also remain on track to deliver our goal of positive operating leverage in 2025, despite what's turned out to be a more challenging first six months in our investment banking and trading business. We continue to invest in important areas like talent, technology and our risk infrastructure to improve the client experience. Our credit and risk discipline has remained strong as evidenced by our favorable CCAR results and the improvement in asset quality metrics, which currently sit at multi quarter lows. Finally, our strong capital position continues to afford us the ability to grow our balance sheet, while also returning more than $2,600,000,000 worth of capital to our shareholders through the first half of the year.

We will remain focused on these key strategic initiatives as we strive to generate better returns and greater shareholder value over time. I am optimistic as ever about our future, especially in light of the momentum that I see every day inside our company. I want to pause and thank all of our incredible teammates for their purposeful focus and productivity in moving our company forward. So thank you all for your interest in Truist. And with that, let me turn it over to Brad for Q and A.

Thank you, Bill. Betsy, at this time, will you please explain how our listeners can participate in the Q and A session? As you do that, I'd like to ask the participants to please limit yourselves to one primary question and one follow-up in order to accommodate as many of you as possible today.

We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press then 2. We ask that you limit yourself to one question and one follow-up.

At this time, we will pause momentarily to assemble our roster. The first question today comes from Scott Sievers with Piper Sandler. Please go ahead.

Good morning, everyone. Thank you for taking the question. Bill, it was really nice to see the the strong loan growth. I was hoping you could spend just a quick second sort of expanding upon your thoughts on sort of overall sentiment among your customer base, I guess, on the interested on the commercial side, but maybe kind of across the portfolio given the stronger second quarter.

Yeah, Scott, thanks for recognizing that. It's interesting. So on the let's maybe start with the consumer side first. Our consumer business continues to be really strong. Consumers are staying in the game.

The quality of the consumer, particularly as it relates to our portfolio continues to be, continues to be strong. So we've had really good credit quality, as part of this, as part of this production. That's been a lot of the initiatives and things that we put forth. And it also is a lot of product specific things. So things we're doing in service finance and doing in Sheffield and doing in Lightstream.

So we're relevant to how consumers want to borrow. I think that's a really important component of, of our growth story on the consumer side in terms of loans. As it relates to the wholesale, the wholesale side, you know, that's our clients also came into this with lot of strength, you know, so a lot of liquidity, got through sort of the post COVID supply chain and all those issues. Still some wait and see in fairness. I mean, think I'm really pleased with our results given the fact that there's still some uncertainty out there.

Some certainty was cleared in the last several weeks. Think about the tax bill, think about some of the other things that have come in place. A lot of our activity, which I'm really happy about is with new clients. So these are new to Truist. So clients who wanting to experience what we have to offer are impressed with our purpose driven focus, impress with the products and capabilities.

I talked a little bit about treasury management or whatever. So some unique of to Truist, some of it's unique to our markets that are really healthy. And I think we have a reason to still feel confident about where our both our consumers and our business and wholesale clients are going forward.

Terrific. Okay. Thank you. And and then, Mike, I was hoping you could apologies if if you mentioned this in your prepared remarks, but just given the small step down in the anticipated pace of repurchase in the third quarter and I understand April in particular might have presented kind of a unique opportunity on pricing, but maybe just sort of thoughts on why the step down in the anticipated pace of repurchase and then just thoughts on sort of broader capital management ambitions, especially given the lower SCB results.

Yeah, no problem, Scott. For us, the seven fifty versus 500 really was opportunistic as we watched the price simply present itself at a more attractive level. At 500, coupled with our dividend, we're at around 100% of total payout. And we feel like that's appropriately elevated given our current capital position. If you look at the quarter and sort of year to date, we are seeing the balance sheet growth that we've all been focused on.

And so we still continue to prioritize our banking franchise first and then capital return second. So I think a return to 500 is probably a reasonable place to expect us to stay for the medium term. The SCB, we were pleased with the results there. Would say that our outcome was consistent with our expectations. We expected in a less severe scenario to see improved loss rates.

We feel like the balance sheet was in a touch better condition. We appreciated some of the transparency that we saw this year with the process, saw some improvements PPNR modeling, etcetera. TIH was, we feel like, appropriately dealt with. So all in all, felt good about those results. I don't think that has necessarily an impact on how we think about a target operating area per capital.

We've been pretty consistent that we think sort of a 10% CET1 area is appropriate. If you look at our result this quarter, we're at 11% stated and 9.3% adjusted for AOCI and you sort of split the middle is sort of 10%. And so I think you'll see us continue to glide towards that 10% area, assuming, by the way, that we see a rule finalized at some point here.

Okay, perfect. All right, thank you all very much.

The next question comes from Ken Upton with Autonomous Research. Please go ahead.

I was wondering if could start. You talked about the deposit costs and some of those higher costs coming off already in the second quarter. Could you talk about underlying deposit competition? And you obviously are seeing good loan growth, you're funding that incrementally as well. And what do you expect to see in terms of deposit costs from here ahead of getting any incremental help from rate cuts? Thanks.

Sure. Good morning, Ken. I'll start with that one and maybe Bill you can add. But I'd say first and foremost, we're pretty pleased by how the deposit franchise is performing. We've seen some real strength, especially on the consumer side of things.

It is competitive, we think rationally competitive. But look, we had a little bit of noise in the second quarter with the large sort of temporary M and A related deposits. Ex those deposits, we would have been down a touch. That would have been consistent with what we would have otherwise expected, just given some seasonal tax outflows and the likes. From a pricing perspective, as we move into sort of the third quarter and the fourth quarter, I think just losing the 10.9 that we've put noted in our disclosure, we would expect to see balances probably a little bit lower in the third quarter, but we would expect to make up hopefully some ground on pricing.

So maybe you see the betas move closer to a 40% area or so. And by the way, think that contemplates a cut even though it's late. We think we might have some ability to get a touch ahead of that. And then in the fourth quarter, would expect continued momentum. If we get that second cut in the fourth quarter, maybe you start to see a little bit better rotation into some of the checking products, continued momentum on the production side in consumer and in wholesale.

By the way, we've been onboarding a number of bankers in our new sort of corporate and commercial banking, know, hiring. And so feel pretty good that we might see a little bit of a bounce in the fourth quarter. We also have public funds coming online in the fourth quarter. And look, all things equal in our outlook, we assume getting back to sort of a mid 40 beta by the end of the year. Again, that's with two cuts.

Yeah, maybe I'd add Ken on the competitive side, maybe sort of break it up a little bit on the consumer side. We've sort of got two prongs going really well right now. One is the net new story, which is really important. We're adding relationships, and as I mentioned, they're more profitable, younger, higher median income. So really good net new story and then our deepening story with existing relationships.

So that's also a really strong part of our component here and growing not only the net new, but also growing the overall balances. So you saw some pretty good growth on the consumer side, really good growth in some of our expansion markets, which we've talked about. And then maybe more importantly, we've really, we had some contraction in fairness in some of our key markets and those are reversing. So think about markets like Charlotte, Tampa, etcetera, where we're really pleased with what we're seeing in some of the, some of the share, early share numbers in those markets. So our relative, competitiveness has increased significantly.

Mike talked a little bit about the wholesale side. You know, feel like we're building momentum there, you know, so if we think about the new relationships that we're bringing in, much deeper penetration with those relationships, they're now coming with treasury relationships, deposits tend to follow that. So I think we have a good, you know, sort of some leading, good leading indicators on the wholesale side as we, as we think about, think about the deposit franchise. So I feel good about the momentum. It is competitive, but most importantly, feel really good about our competitive positioning.

I don't think we've actually been better positioned than we are right now.

Got it. Thank you. Just a second question on the fee side. You mentioned the obviously, we knew about the IB softness in April. You also mentioned the trading.

Is there a way you can help us understand what that bounce back looks like amidst your commentary about just stronger expectations? Also just do we know how big that DCEP benefit was on the other side as well? Thank you.

Yeah, sure, Ken. On the trading and banking side, what I'd say is we saw weakness in both, especially in the month of April, and then May a little better, and then June almost fully recovered. And actually, if you look even into July, we're seeing more normalized results. And so I think it's been that trend that gives us the confidence that in the third quarter we'll be back to a normalized level and again also in the fourth. What's your second question on the non fall?

Yes. Yeah, so let's see. In the quarter, non qual was better, I think 25,000,000. And so where you'll see that from a geography perspective is in other income, you're higher. But from a PPNR perspective, it's neutral because you also would see an increase in personnel expense by a similar amount. Okay, perfect.

The next question comes from Ebrahim Koonawala with Bank of America. Please go ahead.

Good morning. Guess two questions. Maybe, Mike, for you as we think about the trajectory of how we get to a 15% ROTCE or at some point, when I look at the operating leverage and you spelled it out very clearly on Slide eight, Just talk to us, there wasn't much this quarter. It was barely anything in the first quarter. As we think about the positive operating leverage kicking in, is it back half loaded?

Was that sort of the view? Or do we need a meaningful pickup in fee revenue growth to actually drive that in order to get sort of narrow that gap to the 15% loss rate? Thanks.

Yeah, think I think there's a variety of things that are going to contribute to improve profitability and returns, Ebrahim. You hit on one. We do have an expectation. We've talked a lot about the initiatives that we've undertaken, the investments that we're making to improve just our ability to drive more, I'll call it capital efficient revenue through our existing sort of asset base and client base. Some of that's products, some of that's deepening with existing clients, some of that's continuing to invest in our businesses like wealth, like our wealth products, like investment banking.

Yes. And then, of course, also we expect to see some improvements in our margin. We're seeing the fixed asset repricing phenomena that should continue for the rest of this year and next year. We're going to continue to drive sort of smart growth. Funding is obviously a really important part of that.

We're very, very focused on continuing to drive client deposit growth. That's not always perfectly matched. You're seeing that this quarter where loan growth is perhaps a touch ahead of deposit growth. That doesn't mean that we're not very, very focused on continuing to drive balances and operating accounts so on and so forth. So it's not going to be an overnight story, but we should continue to see sort of continuous improvement in that in that ROTCE.

Got it. And I guess, Bill, I think you mentioned in your prepared remarks around, the RTP capability. I'm just wondering the significance of that in terms of getting more commercial deposits like is there a case to be made where you could see a much increased wallet share on the commercial clients where you've been making a big push? Just give us a sense of how we should think about that opportunity, particularly as it relates to fee revenue or deposit growth. Thanks.

Yeah. Thanks. I highlighted one product, so it's not you know, one product doesn't drive, but it's but I think it's just evidence of our innovation, and evidenced by our overall improvement. So treasury management fees being up 14%, you know, more deepening with the wholesale relationships. The new relationships come now, you know, treasury management penetration that more reflects what we think the back book can get to.

So it's a combination of a lot of things, and our overall relevance to clients. That specific product is sort of a unique product that allows, you know, clients to have, you know, faster, safer disbursements with the consumer side. So it's a nice sort of meat of the consumer and the wholesale side in how terms funds flow. But I think it's a bunch of things. It's a bunch of different investments that we've made And again, evidenced by the growth that we've seen.

And I think deposits, as I said, these are leading indicators. I think deposits are a bit of a lagging indicators that come with more treasury business, more operating accounts, that, drive that.

The next question comes from Betsy Graseck with Morgan Stanley. Please go ahead. Hi, good morning.

I wanted to turn to expenses for a minute here and understand a little bit more about the restructuring piece of the expenses that you called out. Because, I know you mentioned severance and wanted to understand how much of that is severance. And is that severance related to the merger from years ago or something else? And then also just understand a little bit more about how you're thinking about, the investments needed to continue to build. I mean, you're already building, so I'm assuming it's in run rate, but maybe you could give us a sense as to where the incremental investments you're making today.

Are they at pace or is there an accelerator there? Thanks.

Mike, why don't you take the first part of that and then I'll take the second part if that's okay.

Yeah, I mean, all but I think $2,000,000 of the restructuring charges in the quarter were related to severance. It was not merger related. These were repositioning of different parts of the company. I won't go into any specifics, but that's the answer to your question.

Yeah, we're always trying to continue to drive that efficiency as we go through. So I think that's not merger related, but also just restructuring and getting aligned with our strategic priorities of our businesses. And then, that's him. I think your bigger question is, you know, can you can you maintain a 1% expense growth and then continue to invest in the company? And the answer to that's You know, because we continue to have, I mean, if you think about, you know, sort of end of twenty three, you know, we put a lot of cost saving disciplines into our company.

And they continue to accrue, meaning the discipline continues to accrue. Compliments to Mike, he's done a really great job of creating a process for us that we've got a lot of discipline. We sort of know what's next up on the expense side and we know what's next up on the investment side. So we've got a good calibration of, of thinking through that. And then the top priorities for investing are, yeah, think we talked about all those and hopefully some of the prepared remarks enhancing our digital platform.

You've seen the results of that payments and product capability. I mean, I was intentional in mentioning some of the product capability that we've been investing in and seeing the results of that. Hiring and retaining talent, you know, continue to be a big part of what we're doing. And then, and you see all those in the results and then the infrastructure part, you know, it's a little harder to see, but, you know, investing in the risk platforms, the data platforms, cyber controls, all the things that we need to do to make sure that we're running a great company. So I think we've got the calibration of this right, that we can continue to invest in the company.

Our, our teams and our leaders sort of get the, you know, save a dollar, invest a dollar kind of mentality. And I think we've got good calibration and good understanding of those, those levers of the company.

Yeah. And the call out that you gave earlier, Bill, on the payments piece was what I got from that tell me what I missed is that corporate treasurers can now process activity via their cell phones twenty four seven.

Well, it's really disbursements. It's where where they can really the disbursements can relate to sort of how consumers wanna interact. So they can have disbursements related to aliases like cell phones as an example. So that's a really pretty big advancement. So think about the, you know, disbursements are made that this can be done the way the client wants to receive it and the way, and it speeds up the, the interaction with the, with with the business and the consumer.

So it's sort of a, it's sort of a twofer in the sense it's really good for the companies in terms of understanding their cash flow and really helps their businesses. So, you mean, you think about the best product is more helping a client achieve their objectives.

And this is 20 fourseven real time. Is that right?

The next question comes from John Pancari with Evercore. Please go ahead.

Just on the expense front, I know you had indicated that numbers came in a little bit the higher end of your expectation and part of that is your investments in your hiring. Can you just talk about the flexibility there? I mean, how can you manage that? Or what are the areas of managing it if you do see revenue remain stubborn here? Do you have as much flexibility given that you're still hiring in select areas and investing into businesses and select areas of technology?

So can you just talk about the ability to drive the positive operating leverage regardless of the uncertainty on the top line?

Yeah, John, it's Mike. I'll respond to that one. I mean, certain of our businesses, as an example, if you look at our outlook and you might say, maybe there's risk in this. In a lot of cases, if we're doing our jobs, our incentive designs are performance sensitive, right? So to the extent that revenue doesn't sort of present itself, then we'll obviously take appropriate actions related to incentives.

That's a part of it. I'd say that the later you get into the year, just to say it, it does get a little harder to stop and start things. But we've actually been pretty planful as it relates to that. And so we generally keep a number of levers handy in the top drawer or whatever, such that to the extent that the environment does change, we can be flexible. I think we're crystal clear on the importance of generating positive operating leverage this year and into the future.

Truist Financial (TFC) Q2 2025 Earnings Call Transcript

Company Participants