Truist Financial Corp Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ken Uston - Autonomous Research - Analyst : Thanks. Hi. Good morning, guys. Push-and-pull question. So it's nice to see the increased buyback in the second quarter relative to the first. And I'm just wondering like how much of that is just real confidence in the capital position versus a bit of an offset to what we're all seeing, and you talked about a potentially slower loan environment.

Question: Ken Uston - Autonomous Research - Analyst : Thanks. It's a better answer to a not great worded question. Second question, just on the deposit side, just kind of same context with the potential for lower rates here, how do you see your ability to control deposit costs and change up your mix of deposits as you look forward? Thanks, guys.

Question: John Pancari - Evercore Group LLC - Analyst : Good morning. On the loan growth side, just want to see if you can give us a little more color around what you're seeing in terms of demand. Maybe if you could talk about utilization? Are you seeing any weakening of the of the pipelines and commitments. And then also, any areas of strength where you have an opportunity, given the uncertain backdrop? Thanks.

Question: John Pancari - Evercore Group LLC - Analyst : Great. Okay. Thank you for that. And then separately on the IB and cap market side, I know you had cited some pressures there. And I guess if you could just give us the similar type of color around what you're seeing in terms of the pipeline. Is the pipeline continued to build and you're just getting a delayed pull-through of the transactions. Are you seeing any erosion of that pipeline, just given the wild uncertainty around the tariff debate and everything? And then one last question related to that. why wouldn't your trading businesses be benefiting from the volatility versus being negatively impacted? Thanks.

Question: Erika Najarian - UBS Securities LLC - Analyst : Hi. Good morning. The first one is for Mike. You noted that underneath the revenue guide, you're expecting NII to increase 3%. If you could remind us, is that unchanged or revised from the original January outlook? And if you could give us a sense of how much of the revision would have been curve versus size of the balance sheet.

Question: Erika Najarian - UBS Securities LLC - Analyst : Got it. And just -- I apologize if you said this in the prepared remarks, and I just didn't catch it, it's been insane morning. But did you give the baseline unemployment rate for your reserve Mike, and what the weighted average is that's embedded in your first quarter reserve, please?

Question: Mike Mayo - Wells Fargo Securities, LLC - Analyst : I think you're doing what you can in terms of investing in talent, tech and transitioning from defense to offense as you said. And you did get more loan growth, but I'm still just trying to reconcile the overall guidance and somewhat upbeat comments with the uncertainty with the macro. On the one hand, it shows like -- it seems like you're showing more realism. The curve impacts NII and aftermarket impact investment banking, and you have a little lower guide there. On the other hand, looks like you're accelerating buybacks, and your reserves are not so different. And so, if the world is that much more difficult, why wouldn't you be increasing reserves more? Why wouldn't you be slowing down buybacks. I'm not saying to do that. I'm just trying to reconcile those thoughts. Thanks.

Question: Mike Mayo - Wells Fargo Securities, LLC - Analyst : I guess just as a follow-up, when I think about what could happen, it seems like that loan production and the deposits and the payments could fall off the cliff if this trade war situation goes on for too long. So I guess, do you have any frame of context in your career that gives us the lens or framework on how to view this? And also, how did the pandemic help prepare you and your clients for the impact on supply chains. Thanks.

Question: Betsy Graseck - Morgan Stanley - Analyst : Hi. Good morning. Mike, I just have one quick question for you. You mentioned during the prepared remarks that you've got, I think, it's $42 billion that's rolling in 2Q through 4Q this year. And that it's rolling at a lower pickup than you had said before. Could you just tell us what the yield pickup is that you expect on this $42 billion?

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. But on the average, $42 billion is going to roll it on average 45 bps pickup. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 17, 2025 / 12:00PM, TFC.N - Q1 2025 Truist Financial Corp Earnings Call

Question: Betsy Graseck - Morgan Stanley - Analyst : Got it. Okay. Thank you. Super helpful. And then just on the question on loan growth. As you think through the puts and takes here on the outlook, are you changing your lending standards?

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. So lending standards don't change, but as the environment unfolds, you'll see growth from like adding new customers, I suppose. That's really the message you have for us?

Question: Matt O'Connor - Deutsche Bank Securities Inc. - Analyst : Good morning. Can you elaborate on some of the areas that you're targeting for costs base and maybe reframe with the restructuring charges were for this quarter and how that helps going forward?

Question: Matt O'Connor - Deutsche Bank Securities Inc. - Analyst : Okay. That's $40 million to $50 million for the rest of the year?

Question: Ebrahim Poonawala - BofA Securities, Inc. - Analyst : Hey, good morning. I guess maybe, Mike, for you on capital, and apologies if you already addressed this. But when you look at the CET1 with or without AOCI, just give us a sense of -- I appreciate the sensitivity to the stock price, but how much more aggressive can you be on the pace of buybacks? And is there a CET1 target that we should keep in mind in the near term below which you don't want capital levels to go?

Question: Gerard Cassidy - RBC Capital Markets, LLC - Analyst : Hi, Bill. Hi, Mike. Can you guys share with us -- we hear a lot of your competitors looking to the Southeast and your primary franchise as an area of expansion and growth. Can you tell us, has competition changed or intensified? And then second, as part of that, are you seeing any aggressive lending going on from your competitors that you're obviously not willing to compete against because it's too aggressive?

Question: Gerard Cassidy - RBC Capital Markets, LLC - Analyst : Very good. And then as a follow-up on just loans in general. In the fourth quarter, you folks and your peers are required on a best-efforts basis to put out the exposure to loans to non-depository financial institutions. And your numbers are not that excessive as some of your peers. Can you share with us those categories, whether it's the business credit intermediary category or private equity funds. What are you guys seeing in those kinds of categories since that's been a growth area for the industry.

Question: Gerard Cassidy - RBC Capital Markets, LLC - Analyst : I see. And just as a follow up here, are you seeing the competitors, the private credit guys or just the non-bank lenders impacting your customers in these categories as well? Or what are you seeing on that side of it?