Truist Financial Corp Q2 2025 Earnings Call Transcript

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

Question: Scott Siefers - Piper Sandler & Co - Analyst : Morning, everyone. Thank you for taking the question. Bill, it was really nice to see 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, especially on the interest on the commercial side, but maybe kind of across the portfolio given the stronger second quarter.

Question: Scott Siefers - Piper Sandler & Co - Analyst : Perfect. Okay, thank you. And then, Mike, I was hoping you -- apologies if you mentioned this in your prepared remarks, but just given the a 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.

Question: Ken Uston - Autonomous Research - Analyst : Hey, thanks. Good morning, everyone. I was wondering if you could start -- you talked about the deposit costs and some of those higher costs coming off already in the second quarter. So you talk about underlying deposit competition -- and obviously, you're seeing good loan growth and you're funding that incrementally as well. What do you expect to see in terms of deposit costs from here ahead of getting any incremental help from rate cuts? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 18, 2025 / 12:00PM, TFC.N - Q2 2025 Truist Financial Corp Earnings Call

Question: Ken Uston - Autonomous Research - Analyst : Got it. And 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 like what that bounce back looks like. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 18, 2025 / 12:00PM, TFC.N - Q2 2025 Truist Financial Corp Earnings Call I missed just your commentary about just stronger expectations and also just do we know how big that DCP benefit was on the other side as well? Thank you.

Question: Ken Uston - Autonomous Research - Analyst : Yes.

Question: Ebrahim Poonawala - BofA Securities, Inc - Analyst : Good morning. I guess two questions. Maybe, Mike, for you, as we think about the trajectory of how we get to a 15% ROTCE at some point. When I look at the operating leverage and you spell it out very clearly on Slide 8, 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% ROTCE. Thanks.

Question: Ebrahim Poonawala - BofA Securities, Inc - Analyst : 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.

Question: Betsy Graseck - Morgan Stanley - Analyst : Hi, good morning.

Question: Betsy Graseck - Morgan Stanley - Analyst : 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 to understand a little bit more about how you're thinking about the investments needed to continue to build. I mean, you're already building. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 18, 2025 / 12:00PM, TFC.N - Q2 2025 Truist Financial Corp Earnings Call 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.

Question: Betsy Graseck - Morgan Stanley - Analyst : Yeah. And the call that you gave earlier, Bill, on the payments piece was what I got from the tell me what I missed is that corporate treasurers can now process activity via their cell phones 24/7.

Question: Betsy Graseck - Morgan Stanley - Analyst : And this is 24/7 real time. Is that right?

Question: John Pancari - Evercore Group LLC - Analyst : Good morning. Just on the expense front, I know you had indicated that numbers came in a little bit at the higher end of your expectations 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 in the 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.

Question: John Pancari - Evercore Group LLC - Analyst : Got it. Okay, Mike. And just separately, on the loan front, I just want to see if I can get a little bit more color on the low single-digit outlook. I know, Bill, you mentioned on the commercial wholesale side is a bit of a wait-and-see still. But I guess if you can give a little bit more color where in the back half, do you see commercial growth accelerating? And maybe what areas of what would be the drivers? Is it M&A financing? Or do you see CapEx actually becoming a greater driver and maybe just talk about the line utilization aspect? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 18, 2025 / 12:00PM, TFC.N - Q2 2025 Truist Financial Corp Earnings Call

Question: Mike Mayo - Wells Fargo Securities LLC - Analyst : Hey, first day, a CFO question and a CEO question, but the CFO question is, what do you think about a normalized NIM? Or where should NIM be over time? And how long might it take to get there? And then the CEO question is how much of your time has been spent on the merger and regulation, if you go back 1- to 2-years ago and how much time should be freed up given this kind of new world now that you're fighting back and more on offense. Thanks.

Question: Mike Mayo - Wells Fargo Securities LLC - Analyst : So just a short follow-up, Bill. So I mean, I think a lot of your competitors for a few years there, that trust was the gift that keeps on giving in terms of giving up share and you talked about the J curve being deeper longer than you expected. But my sense it's a little bit more of a nice bite in the Southeast. I mean it's just really competitive. It seems like you're really re-invigorated to go at it really hard. Can you just talk about the competitive dynamics in the fastest-growing market, but it also seems like some of the most competitive? And how do you adjust for that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 18, 2025 / 12:00PM, TFC.N - Q2 2025 Truist Financial Corp Earnings Call

Question: Mike Mayo - Wells Fargo Securities LLC - Analyst : And just a real short follow-up. Just compared to before the global financial crisis, I guess maybe the crazies are off the street is it might be competitive, but is it rational?

Question: Chris McGratty - KBW - Analyst : Great, good morning. Thanks for the question. Bill, just going back to the expense comment for a moment, the operating leverage. I think you talked about not only this year but over the next several years, generating positive operating leverage. I'm wondering if that narrative gets it all easier, given with the progress on deregulation? I guess that's the first point. And then two, I'm interested in whether that might be any savings might be used to increase technology to compete more with the cat ones?

Question: Matt O'Connor - Deutsche Bank Securities Inc - Analyst : Good morning. Just wanted to circle back again on the investment banking, capital market fees. Look, I mean, I know versus like the big banks, it's hard to comp you guys versus regional and everybody has got a little bit of a different mix. But I guess I was surprised like how low the number was and then your characterization of June is kind of being more normalized as opposed to maybe kind of strong as we're hearing elsewhere. So just trying to understand, like, is it a mix difference? Is it timing? Is it -- we're going to have this massive number in 3Q and those questions pretty irrelevant. How should we think about that a little bit more?

Question: Thomas Leddy - RBC Capital Markets, LLC - Analyst : Hi, good morning. This is Thomas Leddy standing in for Gerard. Just a quick high-level question on credit quality. So it was strong in the quarter, and many of your peers also saw pretty healthy metrics. Given all the noise and uncertainty in the macro and geopolitical environments, I'm not asking you to comment on other banks credit trends, but what in your view is driving the generally strong credit results this quarter? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 18, 2025 / 12:00PM, TFC.N - Q2 2025 Truist Financial Corp Earnings Call