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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.

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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

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Q4 2024

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

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Truist Financial

truist financial

Greetings, ladies and gentlemen, and welcome to the Truist Financial Corporation 4th Quarter 2024 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.

Thank you, Betsy, and good morning, everyone. Welcome to Truist's Q4 2024 Earnings Call. With us today are our Chairman and CEO, Bill Rogers our CFO, Mike McGuire 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 4th quarter results, their perspectives on current business conditions and provide an updated 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.

Truist.com. Our presentation today will include forward looking statements and certain non GAAP financial measures. Please review the disclosures on Slides 23 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.

Thanks, Brad, and good morning, everyone, and thank you for joining our call today. But before we get started, I want to take a moment to introduce Brad Bender. Brad recently became our Chief Risk Officer. He brings extensive experience across a number of Truist areas, including risk, operations, technology and consumer lending to this role. Brad's off to a great start.

He'll continue to carry forward Truist strong credit culture and risk discipline. Clark Starn, I'm really happy he's working closely with Brad on the transition. I'm incredibly grateful for Clark's impactful 40 plus year career at Truist, most recently serving as our Chief Risk Officer. Also want to thank Beau Cummins for his significant contributions to our company following his announced departure this week. Since 2,005, Beau has purposely served as an instrumental leader at Truist, most recently as Vice Chair and Chief Operating Officer.

Both he and Clark played crucial and formative roles in the merger of Equals to create Truist and setting the course for our future. I just can't tell you how much I appreciate their leadership during this time at Truist. They were fantastic partners. I just wish them all the best in their new chapters in their lives. All right.

So let's before turning to Q4 results, let's begin as we always do at Truist with Purpose. We are a purpose driven company dedicated to inspiring and building better lives and communities, which is the foundation and guide for how we conduct our business. So one example in the Q4 was our response to Hurricane Helene. The impact of the hurricane on Western North Carolina was truly unprecedented. Truist has deep roots in the region and our team was quick to respond, but they were also compelled to play a pivotal role in the area's long term recovery.

Aligned with our purpose to inspire and build better lives and communities, we announced a 3 year $725,000,000 commitment to address critical needs, including a focus on small business, housing and infrastructure projects. By listening to the needs of the community and leveraging our expertise, our capital, partnerships, we believe we can be a catalyst for recovery and growth. So now turning our results on Slide 5. For the Q4, we reported net income available to common shareholders of $1,200,000,000 or $0.91 a share. For the year, we reported GAAP net income of 4,500,000,000 dollars or $3.36 a share and adjusted net income of $5,000,000,000 or $3.69

provide some more details on quarterly and annual results later in the call. 2024 was an important year for Truist, and I'm proud of the results our teammates delivered, which included executing on several our teammates delivered, which included executing on several important strategic initiatives, delivering solid underlying earnings, maintaining sound asset quality metrics and positioning us with strong momentum as we enter 2025. Our solid performance was defined by several key themes. 1st, 2024 ended on a strong note with annual adjusted revenue finishing at the high end of our expectations and annual expenses declining 40 basis points. Our adjusted efficiency ratio of 56.3 percent remained relatively stable on an annual basis reflecting an ongoing expense discipline and focus on managing cost.

In addition, on a linked quarter basis, average deposit balances increased 1.5% and average loan balances were stable. End of period loans experienced a little over 1% growth as we saw an increase in loan demand due to the results of our focused initiatives in the latter half of the quarter. These factors along with our continued discipline around rate paid on deposits resulted in net interest income exceeding our expectations for the quarter. Investment banking and trading revenue increased 46% for the year versus 2023 as we continue to add talent and expertise to an already strong platform that continues to gain market share. Credit metrics remain solid as non performing loans held for investment declined $38,000,000 linked quarter, while net charge offs increased 4 basis points in the 4th quarter resulting in losses for the year coming in line with our expectations.

Our CET1 capital ratio finished the year at 11.5%, which is up 140 basis points versus 2023 due to the gain on the sale of Truist Insurance Holdings and 2024 earnings, partially offset by the strategic balance sheet repositioning completed in May and $3,800,000,000 of capital we returned to shareholders through our common dividend and the repurchase of $1,000,000,000 of our common stock. The execution of these important strategic initiatives and resulting relative capital advantage leaves us well positioned to grow our balance sheet and return capital to shareholders through our common dividend and our share repurchase program. In 2025, we're focused on 5 key areas all aimed at driving better growth, positive operating leverage and improved profitability. First, last year was a testament to the attractiveness of our platform. Attracting, developing and retaining top talent will continue to be a priority.

2nd, we see a material opportunity to deepen existing client relationships within our attractive footprint, especially in areas like Premier Banking, Wealth and Payments, all of which represent significant opportunities to capture additional share within our existing client base. 3rd, we also see growth potential beyond the markets where we have strong share, especially in states like New Jersey, Pennsylvania and Texas, where we have smaller but faster growing market share. These are not new markets, but areas where we have invested significantly and have great momentum deploying our full Truist capabilities. We're also optimistic about further expanding into certain verticals in the middle market where we can bring the expertise we provide to larger companies in our investment bank to midsized companies all across the country. 4th, we'll continue to invest in our technology platform, which is improving the client experience, driving new account production and delivering efficiencies.

Finally, we plan to accomplish all of this while maintaining our expense discipline, driving positive operating leverage and investing in important areas like our risk infrastructure and cybersecurity. Maintaining our momentum and executing against these strategic priorities will be the key to driving positive operating leverage this year and showing progress towards our mid teens medium term ROATC target. Before I hand the call over to Mike to discuss our quarterly results,

bit of 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 Slide 6 and 7. In Consumer and Small Business Banking, I'm encouraged by our momentum as we experienced an increase in loan production in key focus areas within our lending portfolio and we continue to acquire key new clients and households both through our digital and traditional channels. Average consumer loan balances increased 1.2% linked quarter due to the growth in residential mortgage, indirect auto and important platforms like Sheffield and Service Finance as we experienced a 5% linked quarter increase in consumer loan production during the quarter. Importantly, we're not sacrificing our credit standards or pricing discipline to drive growth. Credit metrics remained relatively stable and new consumer loan production spreads are accretive to the overall portfolio.

Net new checking account growth was once again positive for the year as we added 104,000 new consumer and business accounts. Not only are we adding new households, but primacy rates and client retention also continue to increase due to improvements to the client experience and ongoing enhancements to our digital offerings during the year. In wholesale, I'm encouraged by the underlying momentum in terms of improved production, increased wallet share within certain businesses and the talent that we're attracting to our company. During the quarter, we saw 3% growth in average wholesale deposits, including growth in non interest bearing demand. Although average wholesale loans declined linked quarter, end of period balances increased 50 basis points.

We saw increased production and higher commitments in certain key focus areas as clients are in a more offensive posture. As I previously noted, 2,004 represented the strongest capital market share we've reported since 2021. We experienced record performance in investment grade issuance, equity capital markets, asset securitization and project finance, while also gaining share in verticals like financial institutions, consumer, retail and healthcare. Our leaders made key new hires through 2024 in commercial banking, corporate banking, investment banking, wealth payments and a leader of our new middle market initiative. These new experienced teammates are attracted to our purposeful and results oriented culture and complement our great teams.

As I mentioned earlier, we have a specific focus on building out our middle market commercial segment. I'm very pleased with our focus and momentum we're already experiencing in production and results. We also continue to enhance our wholesale digital capabilities by improving the client experience. During the quarter, we launched electronic bill presentment, which is a next generation product that gives clients greater control over their billing and payments operations. Enhancing the client experience and growing our digital capabilities are important parts of our strategy, which I'll discuss in more detail on Slide 7.

Throughout the year, we've invested in our digital platforms to attract new clients to Truist with a focus on shifting existing client behaviors to self-service, which drives operational efficiency. As a result of these efforts, we showed strong and steady growth in our digital capabilities as we experienced year over year growth in all core metrics, while also achieving favorable client experience satisfaction scores. We opened over 730,000 new digital loan and deposits accounts during the year, including nearly 275,000 new to bank clients through our digital channels, which represents a 31 increase over the previous year. We surpassed over 7,100,000 active digital users on our platform, plant mobile app users grew 7% and digital transactions increased 13% year over year. In addition to an increase in account openings and higher digital adoption rates, we're also seeing improvement in the funding of our digital account openings with balances up significantly over 2023, including growth in balances for millennial and Gen Z clients.

the digital client experience continues to be a priority for our company in 2025 and beyond. We expect to continue growing our digital presence with clients as we further leverage our modern and scalable technology platform. So with that, let me turn over to Mike to discuss our financial results in more detail. Mike?

Thank you, Bill, and good morning, everyone. So I'm going to start with our performance highlights. We reported Q4 20 24 GAAP net income available to common shareholders of $1,200,000,000 or $0.91 per share. Total revenue decreased 0.5% linked quarter as both net interest income and fees decreased modestly. Adjusted expenses increased 4% linked quarter and as we discussed last quarter, this increase was driven by higher professional fees and outside processing expenses related to a number of projects that were initiated later in the year.

As Bill mentioned earlier, non interest expenses declined 0.4% in 2024 versus 2023. Moving to capital, our CET1 ratio declined 10 basis points linked quarter to 11.5% as our larger balance sheet, the payment of our common dividend and share repurchases completed during the quarter offset our quarter current period earnings. From a credit perspective, net charge offs increased 4 basis points on a linked quarter basis and our non performing loans declined 1 basis point on a linked quarter basis. So moving to Slide 9, I'll cover loans and leases. Average loans remained relatively stable on a linked quarter basis as a decline in average commercial loans was offset by growth in average consumer loans.

Average commercial loans decreased $1,500,000,000 or 0.8 percent primarily due to a decline in CRE and C and I balances driven by lower production in CRE. Commercial line utilization remained relatively stable on a linked quarter basis. In our consumer portfolio, average loans increased $1,400,000,000 or 1.2 percent linked quarter due to growth in indirect auto, residential mortgage and other consumer. On an end of period basis, loans held for investment increased by 3 point $3,000,000,000 or 1.1 percent primarily due to higher residential mortgages, C and I and indirect auto. As Bill mentioned, we're encouraged by the increase in end of period loan balances and improved loan production in certain key focus areas during the quarter.

This should lead to to positive growth in end of period loan balances in 2025. Moving to deposit trends on Slide 10. Average deposits increased 1.5% sequentially or $5,700,000,000 driven by growth in all deposit categories except for time deposits, which were down linked quarter. Average non interest bearing deposits increased 1.8% and represented 28% of total deposits, which is unchanged compared to the Q3 of 2024. During the quarter, we continued to actively manage rate paid, which resulted in a decrease to our deposit costs.

Specifically, total deposit costs decreased 19 basis points sequentially to 1.89%, which implies a 29% cumulative total deposit beta. Interest bearing deposit costs decreased by 26 basis points sequentially to 2.62%, representing a 40% cumulative total interest bearing deposit beta. Overall, we expect average deposit balances to decrease by about 1% in the Q1 due in part to the outflow of seasonally higher municipal deposits. Moving to net interest income and net interest margin on Slide 11. Taxable equivalent net interest income decreased 0.4 percent linked quarter or $16,000,000 primarily due to the lag in deposit repricing versus earning asset repricing which was partially offset by higher earning assets and some benefit from fixed rate asset repricing.

Our net interest margin decreased by 5 basis points on a linked quarter basis to 3.07 percent due primarily to the previously mentioned beta lag and a larger investment securities portfolio. Based on our current outlook, we believe that the net interest income will decline by 2% linked quarter due primarily to the impact of 2 fewer days in the Q1 relative to the Q4 and then we would expect it to trend higher in the Q2 of 2025 and throughout the course of the year. As you can see in the charts on the right, we expect net interest income to grow in 2025 driven primarily by low single digit end of period loan growth and the continued benefit from fixed asset repricing of our securities portfolio as well as our fixed rate loan portfolios. During the Q4, our average investment securities portfolio totaled $125,000,000,000 and carried a weighted average yield of 2.88 percent that excludes the impact of pay fixed swaps. We expect to receive approximately $13,000,000,000 of cash flows from the investment portfolio throughout the course of 2025 that we anticipate reinvesting at higher yields.

These securities roll off at a weighted average yield of 3.08 percent excluding the impact of PayFac swaps and based

In addition, our fixed average our average fixed rate loan portfolio totaled $135,000,000,000 and carried a weighted average yield of 5.38 percent during the Q4. We anticipate having the opportunity to reprice approximately $42,000,000,000 of loans at higher yields during 2025 based on current maturity schedules. These maturing loans have a weighted average yield of approximately 6.36%. Before moving on, I also wanted to note that this quarter we added additional disclosure on our swap portfolio and that's on the bottom right hand corner of the slide. At December 31, we had approximately $84,000,000,000 of notional received fixed swaps with an weighted average yield of 3.45%.

These swaps are designated against our commercial loan portfolio and long term debt and designed to protect net interest income from lower short end rates. Approximately $45,000,000,000 of these swaps were effective at the end of the quarter. The remaining $39,000,000,000 of received fixed swaps are forward starting and will become effective over time. Based on our current portfolio at December 31, the effective received fixed swap position peaks around $63,000,000,000 during the Q4 of 2025. At December 31, we also had approximately $30,000,000,000 of notional pay fixed swaps with a weighted average pay fixed rate at 3.39%.

These swaps are designed to protect the economic value of the balance sheet as well as demand future capital volatility through AOCI as these swaps are designated against our AFS securities portfolio. At December 31, the entire $30,000,000,000 PayFIC swap portfolio was effective with approximately half the portfolio carrying a maturity of less than 3 years. Okay, turning to non interest income on Slide 12. Non interest income decreased $12,000,000 or 0.9% versus the 3rd quarter. The linked quarter decrease was primarily attributable to lower investment banking and trading income which declined $70,000,000 linked quarter due to lower debt and equity capital markets activity and M and A fees.

The decline in investment banking and trading was partially offset by growth service charge on deposits and mortgage banking income. Although 4th quarter investment banking trading income declined on a linked quarter basis, 2024 investment banking and trading revenues increased 46% versus 2023 and represented the highest level since 2021 due to higher transaction activity levels and continued market share gains, which helped drive a 6.2% increase in adjusted non interest income for the full year 2024. We remain optimistic about our ability to continue to gain share and grow not only in investment banking and trading but also in wealth and payments where we believe there is significant opportunity to grow within our existing client base. Next I'll cover non interest expense on Slide 13. Adjusted non interest expense which excludes the impact of restructuring charges and core deposit intangible amortization expense increased 4% linked quarter due to higher professional fees and equipment expense partially offset by lower personnel expense in the quarter.

On an annual basis, adjusted non interest expense declined by 0.4% and our adjusted efficiency ratio remained relatively stable. Beginning with the Q1 of 2025, we will begin including core deposit intangible amortization expense with adjusted expense to make our reporting align and be more comparable with peers. Moving to asset quality on slide 14. Asset quality remained relatively stable on both alike and linked quarter basis reflecting our strong credit risk culture and proactive approach to quickly resolving problem loans. During the quarter, our net charge off ratio increased 4 basis points to 59 basis points due primarily to seasonally higher consumer losses.

Losses. Net charge offs of 59 basis points for the year were in line with our expectation of 60 basis points. Our loan loss provision exceeded net charge offs but growth in certain loan portfolios contributed to a 1 basis point decrease in our ALLL ratio to 1.59%. Non performing loans held for investment as a percentage of total loans decreased 1 basis point linked quarter but increased 3 basis points on a like quarter basis to 47 basis points. NPLs have remained in a fairly narrow band of 44 to 48 basis points over the course of the past 5 quarters.

Included in our appendix is updated data on our office portfolio, which is down $235,000,000 linked quarter and represented 1.5 percent of total loans. Our office reserve increased from 10.4% to 11.1%. Approximately 5.3% of our office portfolio is currently classified as non performing compared with 5.1% at September 30. Notably, approximately 18% of our office portfolio is housed within our commercial community banking and wealth segments where loan sizes tend to be more granular, guarantor support more prevalent and overall losses lower. We expect stress to remain in the office sector and believe that the size of our portfolio is manageable and well reserved, but our position is to remain very proactive in identifying and resolving issues in this portfolio.

So turning now to capital on Slide 15. On a linked quarter basis, our CET1 ratio declined 10 basis points to 11.5% due to the payout of 98% of our earnings via our common dividend and $500,000,000 of share repurchases as well as balance sheet growth. Our CET1 capital ratio including the impact of AOCI decreased from 9.9% to 9.6% reflecting the aforementioned factors and an increase in AOCI due to the increase in longer term interest rates experienced during the quarter. During 2024, our CET1 ratio increased by 140 basis points, which was driven by the sale of Truist Insurance Holdings and retained earnings, partially offset by our strategic balance sheet repositioning, our common dividend and $1,000,000,000 of share repurchases. We continue to believe that our strong capital position gives us the unique ability to utilize our future earnings in AOCI accretion to fund balance sheet growth and to return significant amount of capital to our shareholders.

Now I will move to Slide 16 and review our guidance for 2025. Looking into the Q1 of 2025, we expect revenue to decrease 2% relative to 4th quarter revenue of $5,100,000,000 We expect net interest income to decrease 2% in the Q1, primarily driven by 2 fewer days in the Q1 relative to the Q4 and seasonally lower average deposit balances. This will be partially offset by slightly higher average loan balances. Excluding the impact of day count, we would expect net interest income to remain relatively stable linked quarter. We expect non interest income to decrease 2.5% driven primarily by higher investment banking and trading revenue, partially offset by lower other income and service charges on deposits.

Adjusted expenses of $3,000,000,000 in the 4th quarter which includes CDI amortization expense are expected to decline by 3% linked quarter as seasonally higher personnel expenses will be offset with lower other expenses and professional fees. As it relates to the buyback, similar to the Q4, we're targeting approximately $500,000,000 of share repurchases in the Q1 of 2025. For full year 2025, we expect revenue to increase by 3% to 3.5% relative to 2024 adjusted revenue of $20,100,000,000 driven by growth in net interest income and non interest income. Our net interest income outlook assumes a low single digit end of period loan growth and 2 reductions in the Fed funds rate including a cut in March and another in September. We expect non interest income to increase at a low single digit rate.

This expected growth rate reflects the fact that certain fee revenues that were recognized in 2024 will not reoccur in 2025. These fees are related to the shared services agreement that was in place following the sale of TIH back in May and 6 months of revenue associated with Sterling Capital Management, which was also sold around mid year last year. We expect full year 2025 adjusted expenses, which includes CDI amortization expense to increase approximately 1.5% in 2025 versus 2024. Our 2025 revenue and expense outlook implies positive operating leverage of 150 basis points to 200 basis points. In terms of asset quality, we expect net charge offs of about 60 basis points in 2025, which is stable compared with net charge offs of 59 basis points in 2024.

Finally, we expect our effective tax rate to approximate 17% or 20% on a taxable equivalent basis in 2025. I'll now hand it back to Bill for some final remarks.

Thanks, Mike. So to conclude, I'm really pleased with the progress we made as a company last year and I'm confident that we have strong momentum with clients and with teammates in this year as our value proposition has just never been stronger. First, we have an incredible franchise with leading share in high growth markets, got motivated and energized teammates and a fulsome set of specialized wholesale and consumer capabilities that our loyal clients value. 2nd, our relative capital position remains a differentiating factor that gives us the ability to grow our core business by serving existing and new clients, invest in our infrastructure and return considerable amounts of capital to our shareholders in the form of dividends and share repurchases over the next several years, all of which we plan to continue doing in 2025. 3rd, as we execute our strategic growth and capital management priorities, we see a significant opportunity to improve our profitability over the medium term and we would expect to show progress in 2025.

Our path to profitability improvement is multifaceted and a function of client and business growth while maintaining our cost discipline. As I discussed earlier, much of the profitability improvement potential we plan is centered on further deepening of existing client relationships and verticals and product lines like wealth payments, Premier and Investment Banking that already exist at Truist. We see opportunities to grow in markets where we have less dominant share like New Jersey, Pennsylvania and particularly Texas, while also further penetrating the middle market lending segment. The good news is that we see multiple paths and initiatives that with proper execution will result in improved performance, which we expect to show you in 2025. 4th, we plan to accomplish all of this while maintaining our expense discipline, generating positive operating leverage in 2025 and beyond, while also continuing to invest in talent, technology and our infrastructure.

Finally, we never take for granted our strong track record on asset quality as we'll continue to focus on maintaining strong risk discipline and controls. I'm as optimistic as ever about Truist future, especially in light of the momentum I see every day inside of this company. I'd like to thank all of our teammates and leaders for their incredible purposeful focus and productivity and moving our company forward. I'm so proud to be their teammate. So again, thank you for your interest and investment in Truist.

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 yourself to one primary question and one follow-up in order that we may accommodate as many of you as today as possible.

We will now begin the question and answer session. The first question today comes from Scott Siefers with Piper Sandler. Please go ahead.

Good morning, everyone. Thanks for taking the question. Mike, appreciate the disclosures on the swap book and the anticipated repricing opportunities this year. Kind of it sounds like after a little bit of a step back in the Q1, there's just a lot of programmatic opportunities. So maybe just in sort of simple terms, maybe if you could discuss how much of the building momentum simply sort of happens versus how much you see is dependent on the external rate environment?

I guess, in particular in there, maybe how your thoughts would change if we got either more or fewer cuts than the 2 you've envisioned in the guidance?

Yes. Good morning, Scott. Happy to do that. I think about our NII trajectory and you hit it, I think the Q1, we're going to experience a little bit of a step back and that's really just day count driven. But from there, we would expect to begin to see positive trend and some of that is sort of a continuous expectation that we'll begin to see end of period balance growth occur throughout the course of the year, again relatively modest.

The betas on the deposit side are catching up. Essentially, we'll become fully caught up in the Q1. So we really do begin to see, I think, some benefit there. And I think as we came into the cutting cycle, that was maybe more of a question around where these betas might start. We're very pleased by the 40% that we're able to achieve in the Q1 or pardon me the Q4 and have an expectation that we'll be in the mid-40s plus in the first on our way to 50 next year.

So I think that's the primary drivers of our outlook for next year are just that some modest loan and deposit growth coupled with the fact that the betas are where they are. In terms of the Fed rate path, we've got the 2 cuts in now in March September. I think if we were to see later cuts, fewer cuts, even no cuts, that would present a touch of a headwind, but I think manageable frankly inside of our guide To the extent that the short end was a little lower and we saw maybe sooner cuts or more cuts, I think that's a touch of a good guy. But again, we do have I think our sensitivity at least to the short end relatively neutral. I mean, one other factor that we're keeping our eye on, I think, like others, frankly, is just the shape of the curve.

Today's curve is, I think, attractive. And to the extent that we can hang on to a long end that does benefit the fixed loan and the securities repricing, that's something we have our eyes on as well.

Perfect. Thank you for that color. And then within the sort of the loan balance comment, it sounds like fairly modest positive, but modest loan growth expected. Maybe just sort of some additional broader thoughts on kind of where your customers are, how you might expect that loan demand to evolve as the year progresses?

Yes, Scott, this is Bill. As Mike noted, I mean, we're not building a lot of loan growth into the forecast, but we started the year with some momentum. So sort of small single digit end of period kind of loan growth. What we're seeing is the benefit of our activity. So the things that we've been investing in and the opportunities that we see in our markets, which I think in fairness, we'll cover a little bit faster than the rest of the country.

So maybe I'll just dissect it a little bit if that will be helpful. So in the consumer side, our efforts in indirect auto, service finance and mortgage led to the growth there. And I expect those to continue. I mean, there's a place where we're leaning in, as I said in my comments, also not compromising on price or structure or credit. So that's good.

And on the C and I side, we saw some production increase in the Q4, particularly at the end of the Q4. Utilization ticked up slightly, but I just I'll just say slightly. And similarly, the commitments have gone up. The quality of the growth is significant, middle market significant production there. The quality of the things that we're doing in our commercial segment or in our overall C and I segments at a 50% increase in syndicated deals, half of those are new to Truist, half were left lead.

So the things that we're focused on are working. So in addition to seeing a little bit of an uptick, I'm really probably most excited about the quality of what we're putting on and the accretive nature of those relationships long term. In terms of client sentiment is your question. I think clients are certainly more expansionary. I think that reflects in commitment.

So we've seen more increase in commitment. So I think clients are telling us that they're building for the future in terms of opportunities to invest. I think the real linchpin or the fulcrum point will come in M and A. So I think depending on how much M and A we see, I think will be an accelerant to anything that we might project. And today, that's a lot of dialogue.

We have to see that show up in some more action, but a lot more dialogue around all that. Hope that was helpful, Scott.

Yes, that's terrific. So thank you guys very much.

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

Good morning. I just wanted to follow-up, Bill, I think I heard you a couple of times call out in particular New Jersey, Pennsylvania, Texas. Just talk to us in terms of the growth opportunity set you see there. Should we expect new branch openings, hiring of teams or could these be markets that are attractive even from a bank M and A perspective?

Yes, let me sort of go into that. I mean, remember, these are markets that we've been in for over a decade in most cases. So this isn't new in terms of markets, but it is new in terms of investment and momentum and the things that we can that we can offer those markets. So if you think about just the expansive nature of the products and capabilities and then we've just got great leaders who are bringing those to the benefit of our clients. As far as new bankers, we aren't seeing that.

I mean, in those markets, we've added about 25 new bankers to our existing platforms. People are attracted to this opportunity. In terms of production and fee income growth, I mean, they're big numbers off of smaller basis, 80%, 70% kind of activity. In those markets alone, so I would take Philadelphia and Texas, we did about $3,500,000,000 of loan production. So this is sort of new incremental on top of that.

And in Texas specifically, we added about 5,000 net new clients. So you can sort of see the impact of that. I do think you'll continue to see more expansion from us in there. So that's maybe more to come and more dialogue this year as we think about the full network, not only in terms of bankers, but in branches and other types of investments we're making in those markets. And I think, in fairness to the last part of the question, I think that will be organic.

I think we've got really good organic momentum. So I like the opportunities that we have there. The teams on the field are really strong and areas that we're leaning into.

That's helpful. And I guess sticking with that theme across the Southeast, maybe remind us again in terms of you could still hear concerns around talent attrition in your market from competitors. Just give us your sense of confidence level around that these two franchises have been meshed. You feel good about defending market share or potentially growing market share from here when you think about deposits in your sort of legacy SunTrust PB and T markets?

Yes. I mean, you see that in the results. So you see that in the quarter. I mean, we've had good momentum against the balance sheet. I talked about net new.

So I do feel good about not only defending, but actually leaning into the markets that we serve in these fantastic markets. We've lost some teams and we've added some teams. I mean, there's a reality of that of the size company that we are. We've added a lot of great talent. I mean, our leaders have really done a fantastic job, attracting teams to the value proposition.

So the teams that we have on the field and their capacity and ability to deliver against our value proposition has never been better. So we've added a lot, feel really good. As I mentioned in my comments, our focus is going to be on attracting, developing and retaining great teammates who can deliver against this truest value proposition. So the answer is we're in a not just a defensive, but we're in an offensive position in our markets and fully prepared and we see the results and momentum of that.

The next question comes from Matt O'Connor with Deutsche Bank. Please go ahead.

Good morning. Can you guys talk about how you're thinking about targeted capital levels over time? Obviously, there's still some potential changes coming on the regulatory side, including CCAR. But just without having all the details on that, just the thought process? And then also just related to that, are there other opportunities to tweak the preferred stock?

You had some redemptions this quarter and obviously that impacts the business going forward. Thanks.

Good morning, Matt. Look, we recently talked about a longer term target in the 10% area for CET1. I don't think we have an updated view on that thinking. Obviously, where we sit today with current rules and some expectation that there'll be changes to rules, we're at 11.5%. If you were to adjust that number for AOCI, we're kind of 9.6 percent area.

So we're thinking about today's measurement. We're thinking about the likelihood of a new rule and think still that sort of that 10% area is a reasonable expectation for you guys to have. Look, there's a lot in motion right now and I think as we see more cards turn, there'll be an opportunity for us to maybe update our perspective if that's appropriate. On the pref, we did and we've done some liability management over the last couple of quarters. You'll see that continue.

On a total capital basis, we're in good shape. And so, just capturing some of that benefit where we see opportunity is really sort of what you saw there.

Okay. That's helpful. And the 10% I assume is including the RCI?

Yes. I think that's a perspective that the rule will evolve. Again, I think it would be difficult to speculate on all the various other impacts. There's been a lot of discussion around the impact on RWA inflation or otherwise. And but if you just were to think about OCI especially, that's what's driving my guide there.

Okay. And then just squeezing in, what's the duration of the securities book? I know you had some adds this quarter or lost 2 quarters. So what's the current duration? And then I'm done.

Yes. The AFS portfolio is shorter, just given the work we did this spring with the repositioning. So on a net basis with the payers, our AFS duration is in the low 3s. Our HTM portfolio obviously is extended. It's closer to 7 and on a net basis combined mid-4s.

The next The next question comes from Erika Najari with UBS. Please go ahead.

Hi, good morning. I guess my first question is for Bill. I know clearly there's a macro aspect to the return of lending growth, but and you have just modest assumptions in your net interest income outlook or revenue outlook. But maybe could you talk to us about how some of the growth might be impacted by some of the changes that you've made to leadership maybe and like incentive comp and the way you go to market? Because clearly there's a macro aspect to it, but there also seems to be a truest specific aspect where you're sort of emerging from defense and offense.

And to that end, you made some announcements in terms of leadership. I feel like that was received fairly well by investors, but perhaps some comments on you in terms of what message would you like us to take away from the changes in leadership that you announced this week?

Yes, I mean, you sort of went for a couple of different tributaries there. But look, overall, and I said this, I think, in the answer to the earlier question, I mean, the talent that we're investing in are teammates who I think can really lead this organization in the future. They really know our value proposition in terms of where we're going. And in terms of this week, I mean, we had Beau departed our company. I mentioned earlier, great career, really did a lot of important things in terms of establishing the framework for the future.

And then we took the opportunity to take some of those responsibilities and distribute them among some of my existing leaders. So that gives them some more opportunity to grow and some more opportunities to expand their toolkits. I feel really, really, really good about that. And then as you mentioned, there have been some other key important leadership hires along the way that I think will be important parts of our future. So I don't think there's a story there other than we have a great franchise and we're attracting really good people to our franchise.

We have existing teammates who are really expanded their toolkits. We have great leaders who really understand and know and how to attract and retain really strong talent.

And Eric, maybe I'll just add to that a little bit. I mean, another dynamic obviously is post the sale of TIH, the capital position we find ourselves in, I think also gives our teammates a lot of confidence. I mean, we have a very sort of pro growth agenda and that's we're doing a lot of senior and banker hiring in our commercial and wholesale businesses. You're seeing that pull through in terms of activity levels and we're trying to activate capital across our consumer lending platforms. And so those are very defensible strong businesses that we think have good growth potential.

So I think there's just a clarity of focus on growth in the client and you're starting to see that pull through and I think that's going to obviously give us a lot of confidence as we go into the year. And I think you're right, I think our expectations for low single digit growth are relatively modest. So we're just focused on execution.

And the second question is a lot more boring. On Slide 11, on the $45,000,000,000 in active received fixed swaps by year end, how does that progress quarterly from Twelvethirty onetwenty 4 to Twelvethirty onetwenty 5?

Yes. It's so we're 45 in the 4th quarter. That stays relatively consistent in the Q1. So I think it ticks up maybe we've got another $1,000,000,000 effective In the second and third quarter, I think you see a little bit of a step up and by the 4th you're peaking at $63,000,000,000 So I think you could probably model almost straight line, Erica, between kind of $46,000,000 $60,000,000 I think we see a touch more come on in the 3rd, but and that $30,000,000,000 the $30,000,000,000 of payers are on for the whole year. So we're net 15 effective receive Q1 and think of it as net 30 receive effective Q4.

Got it. Thank you. And just to say it as well as to get where you're going, if you think about sort of the impact on NII throughout the course of 2025, our expectation is it will actually be relatively stable because as you have more of the receivers coming on in kind of the mid-3s, you're again, at least with our baseline view is you pick up a cut sometime in the first half and again in the second half. And so those factors really offset one another. So we see the hedge impact net relatively consistent throughout the course of 2025 and it's really not very different than what we saw in Q4 of 2024.

Truist Financial (TFC) Q4 2024 Earnings Call Transcript

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