Truist Financial Corp at Goldman Sachs U.S. Financial Services Conference Transcript

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

Question: Ryan Nash - Goldman Sachs - Analyst : So Bill, there's been a lot of change since the last time we heard from you, the election, another fed cut. As you think about next year, maybe start off with how you think the bank is positioned to win as we enter 2025.

Question: Ryan Nash - Goldman Sachs - Analyst : So a lot of strategic things to get into. But before we do, maybe Bill, just to get the near term out of the way. You gave fourth-quarter guidance of revenues down [1.5], expenses up [4], and some color on fees. Maybe just talk about how the quarter is progressing and any updates you wanted to give before we move on to the next topic.

Question: Ryan Nash - Goldman Sachs - Analyst : Easy enough. So Bill, we were talking at dinner last night. I know that you've been out in the market talking to a lot of commercial clients. Maybe just talk about how they're thinking about their businesses. Post election, what's changing on their end?

Question: Ryan Nash - Goldman Sachs - Analyst : Maybe to dig in on a couple of things as it pertains to loan growth. I guess the first question is, how long do you think it's going to take for -- until loan demand returns? What are your broad commercial expectations? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 3:40PM, TFC.N - Truist Financial Corp at Goldman Sachs U.S. Financial Services Conference And then more importantly, if you think back over the past few years, Truist has been underperforming, given all the transformation that it's gone through. But we've seen that that gap narrow over the past few quarters. What do you think that means in terms of your ability to perform relative to the industry?

Question: Ryan Nash - Goldman Sachs - Analyst : Bill, one thing that you've talked about is there's been the transformation of the commercial business and how, given the decisions that you've made, you're well-positioned to do more business from your clients. Can you maybe just spend a minute talking about that, why you think you're so well positioned relative to the competition? And what do you think that means for the growth of the company over a medium-term time frame? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 3:40PM, TFC.N - Truist Financial Corp at Goldman Sachs U.S. Financial Services Conference

Question: Ryan Nash - Goldman Sachs - Analyst : You rolled out some targets, which we'll get to shortly. But one of the components of it was being more relevant with your customers from a deposit perspective. You've obviously seen deposits have been running off over the past few quarters. Maybe just talk about your outlook for deposits in terms of both balance and mix. And where do you think we go from in terms of your relative performance versus the industry?

Question: Ryan Nash - Goldman Sachs - Analyst : So a couple of months ago, I think back in September, you rolled out a medium-term mid-teens ROTCE target. Maybe just give the audience a little bit of background how you came up with this target. What do you view as the most significant opportunities and over what time frame?

Question: Ryan Nash - Goldman Sachs - Analyst : And just as a follow-up on that, do you expect to make progression on an annual basis? And how important is growth to achieving these objectives?

Question: Ryan Nash - Goldman Sachs - Analyst : So let's dig into some of these. When I think about the key initiatives you outlined, they're all generally centered of doing more with your existing clients. Maybe just talk about what were some of the drivers of underperformance historically. And what gives you the confidence that you can now get a greater share of wallet from your customers?

Question: Ryan Nash - Goldman Sachs - Analyst : And when you think about some of the initiatives, you said middle market, premier banking, and payments. Obviously, commercial payments is -- since I've known you, it has been a big focus of the company. Maybe just talk about how you're positioned in this business. And can it be an area of outsized growth for the bank over time?

Question: Ryan Nash - Goldman Sachs - Analyst : So there's a lot of good initiatives going on, on the revenue side. And on the other side, there's been a lot of simplification that's happened over the -- across the organization. Can you maybe just talk about how you've simplified the structure over the last year and what these changes mean for your -- both growing your business and also achieving your long-term objectives?

Question: Ryan Nash - Goldman Sachs - Analyst : So maybe switching to fees. So investment banking has had a strong year in 2024. 3Q was seasonally very strong. What are your general expectations for this business in 2025, and how are you positioning yourself to continue to gain share in capital markets?

Question: Ryan Nash - Goldman Sachs - Analyst : So you've stated an expectation for positive operating leverage in 2025 and achieving that goal, I guess, after having costs slightly down in '24. How are you thinking about expense growth? And how are you also thinking about balancing expense discipline while ensuring that you're making the right investments for the long-term success of the company?

Question: Ryan Nash - Goldman Sachs - Analyst : So you've made a lot of -- you made a handful of new leadership hires and changes over the course of this year. Maybe just talk about some of the new leaders you've added and how you think their expertise will help drive your business going forward.

Question: Ryan Nash - Goldman Sachs - Analyst : So maybe shifting gears a little bit to credit. Both your NPLs and charge-offs have stabilized over the past few quarters. Maybe just talk about what are your expectations for the trajectory of both charge-offs and the allowance over the next few quarters. Do you think we've seen the peak in charge-offs and we could start to see some improvement? How are you thinking about that?

Question: Ryan Nash - Goldman Sachs - Analyst : So maybe to shift gears a little bit to talk about capital, right? So you mentioned earlier that you made the strategic sale of TIH to really shore up the capital. Capital well in excess of [11.5]; on an adjusted basis, it's approaching [10]. Maybe just talk a little bit about what you're most focused on from a capital ratio perspective when you're determining your capital deployment strategy. And maybe just outline for us what are your capital priorities at this point.

Question: Ryan Nash - Goldman Sachs - Analyst : So Bill, it's clear that the hope, as you articulated, that you'll be able to deploy it in the business as we start to see some pickup in growth. However, the environment is still somewhat uncertain. And if we don't actually see loan demand return, how do you think about just other uses of capital, whether it's higher share repurchases, purchasing loan portfolios, maybe even in other securities restructuring? How do all of these types of things fit into the overall use of capital for Truist?

Question: Ryan Nash - Goldman Sachs - Analyst : So in terms of using capital, one of the things that we've seen a handful of banks of similar size is a move to really expand their branch network, right, across various geographies. How are you thinking about your branch network and your footprint from a growth perspective? Do you see opportunities to grow either inside the footprint or outside the footprint? How are you thinking about that as an organic investment?

Question: Ryan Nash - Goldman Sachs - Analyst : So two more questions for you, Bill, before we wrap it up. There's obviously been a lot of enthusiasm in the market for bank stocks post the election. While we don't know what the final outcome would be, what changes we're going to see, I guess, what from a regulatory perspective are you most focused on that you think will have an impact whether on just your ability to allocate or invest in the business?

Question: Ryan Nash - Goldman Sachs - Analyst : And we've talked a lot, in conclusion here, over the last few years that undertaking the merger was a bigger deal than you thought. And that's resulted in underperformance in the stock over a handful of years. You've obviously made a ton of changes in recent times to position the bank to succeed. Maybe just in closing, tell us about why you think investors should be investing in Truist. And what is different about the story today relative to the last few years?

Question: Ryan Nash - Goldman Sachs - Analyst : Well, the shot clock has expired so we're out of time. So please join me in thanking Bill.