The paragraph provides an introduction to the Truist Financial Corporation's First Quarter 2025 Earnings Conference Call, led by operator Betsy, and introduces Brad Milsaps, who welcomes participants and introduces the main speakers: Chairman and CEO Bill Rogers, CFO Mike Maguire, and Chief Risk Officer Brad Bender. The call will cover Truist's first-quarter results, current business conditions, and 2025 outlook, with details available on their Investor Relations website. The presentation includes forward-looking statements and non-GAAP measures, with necessary disclosures and reconciliations provided. Bill Rogers emphasizes Truist's purpose-driven commitment to building better lives and communities, especially during uncertain times.

The paragraph outlines the organization's commitment to supporting clients through financial planning, expert advice, digital capabilities, and a comprehensive suite of products despite challenging market conditions. Due to increased market volatility and economic uncertainty, the company has revised its revenue outlook, expecting a flat performance in investment banking and trading revenue and slightly lower net interest income. In response, it is reducing expenses and buying back additional shares. Nevertheless, the company remains focused on its strategic priorities aimed at growth, profitability, and positive leverage, specifically by deepening relationships in areas like premier banking, middle-market banking, payments, and wealth.

The paragraph outlines the company's commitment to maintaining strong expense discipline while anticipating positive operating leverage by 2025 through efficiency improvements. They are investing in talent and technology, exemplified by the new AI tool, Truist Client Pulse, aimed at enhancing client experience. The company focuses on maintaining asset quality with robust risk controls and has strengthened its balance sheet. Their capital advantage supports strategic growth and returning value to shareholders via dividends and share repurchases. The company feels confident about its foundation and momentum, reflected in a first-quarter net income of $1.2 billion.

In the first quarter, the company experienced continued growth in loans and deposits, maintaining stable adjusted pre-provision net revenue despite a decline in overall revenue by reducing non-interest expenses. It returned $1.2 billion to shareholders through dividends and stock repurchases and plans more buybacks due to a strong capital position. The CEO highlighted strategic progress in consumer and small business banking, including solid consumer loan growth, new checking accounts, and deepening client relationships, with a particular focus on digital initiatives. Consumer loan balances increased 1.3% from the previous quarter, driven by growth in residential mortgages, auto loans, and service finance, all achieved while adhering to credit and pricing standards.

The paragraph outlines strong financial performance in several areas for the company. Debit card spending increased by 4% year-over-year, driven by growth in travel and entertainment across all income bands. The company added over 39,000 new consumer and business checking accounts, marking a 40% increase from the previous year. There was substantial growth in the Premier Banking segment, with $1.8 billion in new deposits and a 15% increase in financial plans per banker, leading to $1.6 billion in new investment production. Wholesale loan growth showed a 1% increase with improvements in payments and wealth. However, despite achieving the second-best quarter in debt capital markets, challenging market conditions affected investment banking and trading, with lower-than-expected growth in M&A and equity capital markets as clients postponed transactions.

The paragraph outlines Truist's strategic focus on enhancing the client experience and digital capabilities amidst challenging market conditions. The company highlights the launch of a new digital client interface in Wealth, improvements in real-time payments, and the introduction of Zelle disbursements, contributing to increased client satisfaction and higher net asset flows. Strong digital performance is evident with a significant increase in new digital accounts, particularly among Millennials and Gen Z, reflecting Truist's strategy to build long-term relationships. The company also utilizes Truist Assist, an AI tool, to facilitate client interactions and transition to human support when needed.

In the first quarter of 2025, Truist Assist facilitated over 1 million conversations, with more than 80% requiring no additional human interaction, promoting efficiency in the consumer business as clients increasingly opt for self-service. The company plans to expand its digital presence using its robust technology platform. Mike Maguire reports a GAAP net income of $1.2 billion or $0.87 per share for the quarter, inclusive of restructuring charges. Total revenue fell by 3.2% from the previous quarter due to declines in both net interest and non-interest income. However, adjusted expenses dropped by 5.4%, stabilizing PPNR and improving the efficiency ratio by 130 basis points quarter-over-quarter. Average loans for investment grew by 1.1%, driven by increases in commercial and consumer loans, although end-of-period loans rose by 0.7%. The company expects low-single-digit loan growth by the end of 2025. The paragraph concludes with a transition to a discussion on deposit trends.

The paragraph discusses changes in deposits and interest rates for a financial institution. Average deposits rose by $2.2 billion or 0.6%, largely due to increases in time deposits and interest checking, but were offset by declines in other areas. End-of-period deposits swelled by $13.2 billion or 3.4% due to two significant, short-term client deposits. Excluding these, average deposits were stable. Deposit costs decreased by 10 basis points to 1.79%, while interest-bearing deposit costs fell by 16 basis points to 2.46%. Average deposit balances are expected to remain stable in Q2 2025. Net interest income declined by 2.4% due to fewer days in Q1, with the net interest margin dropping by six basis points to 3.01%. For 2025, a 3% increase in net interest income is anticipated, driven by moderate loan growth, rate cuts, and fixed-rate asset repricing. The institution plans to reprice $42 billion in fixed-rate loans and securities in 2025.

The paragraph discusses financial updates, including a revised expectation of benefits from asset repricing being 40-50 basis points lower due to reduced medium-term interest rates. It reports a $78 million (5.3%) decrease in non-interest income compared to the previous quarter, driven by a decline in income from equity investments and trading. Year-over-year, non-interest income fell by $54 million (3.7%) owing to drops in investment banking, trading, and Wealth Management income, partially impacted by the sale of Sterling Capital Management. For expenses, adjusted non-interest expense decreased 5.4% quarter-over-quarter, mainly due to reductions in various costs, despite stable personnel expenses. However, adjusted expenses rose 1.5% compared to the first quarter of 2024, mainly because of increased professional fees. Asset quality metrics remained stable, demonstrating the firm’s robust credit risk management and proactive problem loan resolution.

The paragraph discusses the financial performance and capital position of Truist. Net charge-offs increased slightly from the previous quarter but decreased compared to the first quarter of 2024, while loan-loss provision exceeded net charge-offs despite certain loan portfolio growth lowering the ALLL ratio slightly. Non-performing loans rose marginally but remained stable over five quarters. Truist is actively assessing its exposure to risks such as tariffs and government spending cuts, and feels adequately reserved. The CET1 capital ratio declined due to factors like dividend payments, share buybacks, and balance sheet growth, but Truist maintains confidence in its strong capital position to support growth and return capital to shareholders. The paragraph concludes with a mention of providing guidance for future periods.

The company has revised its 2025 financial outlook, now expecting a lower revenue growth of 1.5% to 2.5% compared to the previously anticipated 3% to 3.5%, primarily due to stagnant investment banking and trading activities, and lower wealth management income linked to market conditions. They foresee net interest income rising by 3% in light of projected reductions in the Fed Funds rate and modest loan growth. Adjusted expenses are expected to rise by 1%, down from an earlier 1.5% projection, due to reduced incentives and cost-saving measures. The net charge-offs are predicted to remain stable at 60 basis points, with an effective tax rate forecasted at approximately 17% for 2025.

In the second quarter of 2025, the company anticipates a 1.5% revenue increase from the first quarter's $4.9 billion, driven by factors like an additional day in the quarter, loan growth, and fixed asset repricing. Non-interest income is expected to rise by 1% to 3%, due to higher other income. Adjusted expenses, primarily due to personnel merit increases, are projected to increase by 2% to 3%. The company plans to target up to $750 million for buybacks. Despite market volatility, the company remains focused on growth in key areas such as Premier banking and wealth management. They emphasize their strong liquidity, capital advantage, and disciplined risk management, positioning themselves to support clients and seize opportunities amid economic changes.

The paragraph is from a discussion during a Truist company's conference call, where Bill Rogers, a representative from the company, expresses optimism about Truist's future and appreciation for the team's hard work. After his remarks, Brad Milsaps instructs Betsy to explain the Q&A process, requesting participants to limit their questions to one primary and one follow-up. Ken Usdin from Autonomous Research then asks a question regarding Truist's increased stock buybacks in the second quarter and its implications on capital confidence versus a slower loan environment. Bill Rogers responds, highlighting Truist's strong capital position, which supports growth opportunities, buybacks, dividends, and resilience in challenging times.

The paragraph discusses the company's strategic approach to managing deposit costs in light of potential lower interest rates. Mike Maguire explains that they have maintained a client-centric yet disciplined approach to managing the rate paid on deposits. Despite not receiving expected interest rate cuts, they have made progress with their funding portfolio and have plans to benefit further from anticipated cuts in the second half of the year. The company is managing their certificate of deposit (CD) portfolio effectively, including adjusting maturities. The overall deposit mix remains stable, with some minor changes in the dollar demand accounts (DDA) percentage. Additionally, Bill Rogers mentions that the company has invested in tools to enhance precision in deposit pricing.

The paragraph discusses the current state of loan growth, with Bill Rogers expressing optimism about the investments made in recent quarters, which are reflected in the current quarter's positive results. Commitments have increased, and while utilization is only slightly up, production is strong across various sectors, including consumer, FIG, energy, healthcare, and middle market. Commercial and industrial (C&I) production has consistently risen over the past five quarters. Consumer pipelines are at their highest, while C&I pipelines remain strong, though pull-through might be slightly slower. Despite economic uncertainty and volatility, the focus on core organic production capacity and market dynamics contributes to their positive outlook.

In the paragraph, Bill Rogers and Mike Maguire discuss the positive outlook for loan growth driven by the skill set of their team and their products, emphasizing growth with new and existing clients rather than increased utilization. John Pancari inquires about pressures in the investment banking (IB) and capital markets (CAP) sector, questioning the status of the transaction pipeline and the effect of market volatility on their trading business. Rogers clarifies that their trading business is client-focused, with less emphasis on proprietary trading, which limits its impact from market volatility. He remains optimistic about their investment banking prospects, attributing it to strong talent, strategic investments, and enhanced alignment with corporate and commercial banking.

The paragraph discusses a strong performance in the core investment grade debt capital markets for the quarter, noting that while some projects have been deferred, particularly in M&A, the company has not lost business to competitors. The industry is expected to remain flat, and the company feels well-positioned to stay competitive if the market recovers, having gained incremental market share consistently. In a conversation, John Pancari thanks Bill Rogers for this insight, and the discussion shifts to Erika Najarian from UBS, who asks Mike Maguire about the revenue guidance, specifically regarding a 3% increase in net interest income (NII). Mike clarifies that there wasn't specific guidance given in January, but they expected approximately a 0.75% lower NII impact due to changes in the curve.

The paragraph is part of a discussion during a financial earnings call. Erika Najarian asks about the baseline unemployment rate used in the company's reserve calculations, which Mike Maguire and Brad Bender explain. They describe their approach to considering baseline and stress scenarios for unemployment. Brad mentions a baseline unemployment rate of 5.1% in their model, adjusted at the pool level based on asset mix, and they feel confident in managing credit risk. Bill Rogers confirms these details. The conversation then shifts to Mike Mayo from Wells Fargo Securities, who acknowledges the company's efforts in investing in talent, technology, and transitioning their strategy from defense to offense, mentioning the company's achievement in loan growth.

The paragraph is a response from Bill Rogers addressing concerns about the company's financial strategy amid economic uncertainty. He explains that their guidance focuses on a flat forecast for investment banking due to realistic assessments of the market, despite hoping for a quicker recovery. They maintain a strong position in loan and deposit production and refrain from changing their strategy there. The company considers market volatility and other factors when setting reserves but sees the current moment as an opportunistic time for share buybacks, expressing confidence in Truist and its positioning.

The paragraph discusses the financial resilience and strategic focus of Truist in the face of potential economic challenges, such as a prolonged trade war. Bill Rogers highlights how the pandemic has taught clients to manage their working capital and supply chains more effectively, leading to increased flexibility and consistency. This has seemingly reduced the need for traditional loan utilization. Larger clients, in particular, have improved their supply chain management, and Truist is actively supporting them in this area. The situation is characterized as unusual, and the insights shared are based on past experiences and data points.

The paragraph discusses the solid state of the underlying business and consumer and business client portfolios, highlighting that despite some challenges, the company is well-positioned with good momentum, talent, and capital. There is a focus on closely monitoring small business clients that may face supply chain challenges. The conversation then shifts to a question from Betsy Graseck regarding a $42 billion figure mentioned earlier, specifically asking about the expected yield pickup for this amount in the latter half of the year.

In the paragraph, Mike Maguire discusses the dynamics of a $42 billion portfolio, which includes various loans and securities. He mentions that the incremental run on versus runoff has decreased by 40 to 50 basis points. The focus is on the two-year part of the yield curve, with significant repricing opportunities in the 2% to 5% range, particularly within five years. Maguire expects an average roll pickup of closer to 50 to 60 basis points, varying throughout the year. Betsy Graseck inquires about loan growth and lending standards. Bill Rogers assures that there are no changes in lending standards, maintaining consistency and strong execution within the existing framework.

In the discussion, Bill Rogers emphasizes the company's focus on growth through adding new clients, expanding existing relationships, entering new markets, and improving various business segments. When asked by Matt O'Connor about cost-saving measures and restructuring charges, Rogers explains that the company initiated a significant expense management effort in 2023. This involved consolidating and simplifying operations to improve efficiency. These efforts are ongoing, with a focus on continuous improvement and finding traditional cost-saving opportunities, while balancing these efforts with necessary investments.

The paragraph discusses the continuation of investments in digital capabilities, talent acquisition, treasury management, payments, risk, and infrastructure while balancing these efforts with expense savings. Mike Maguire mentions restructuring charges, focusing on corporate facilities rationalization and severance, estimating these charges to be between $40 million and $50 million for the rest of the year. Ebrahim Poonawala from Bank of America asks about capital strategies, particularly regarding CET1 levels and stock buybacks. Mike Maguire responds, indicating confidence in maintaining a $500 million quarterly pace for buybacks.

The paragraph discusses a company's approach to capital planning and its current financial decisions. The company is focusing on maintaining a sustainable dividend equating to its earnings, acknowledging recent opportunistic actions due to industry sell-off, but not planning to continue such actions. The company is waiting for final Basel rules for more long-term planning and prefers not to increase leverage significantly. The response also addresses a question from Gerard Cassidy, mentioning that while the Southeast market is always competitive, nothing currently distinguishes it as more competitive than usual, and there's no willingness to engage in aggressive lending practices like some competitors.

The paragraph discusses a competitive market environment, highlighting the speaker's confidence in their company's competitive position due to investments and loan growth. Despite facing smart competitors in various markets like Texas, Philadelphia, and Ohio, the company feels it is performing well. Gerard Cassidy asks about the company's exposure to loans to non-depository financial institutions (NDFIs), noting their figures are not as excessive as some peers. Bill Rogers invites Brad Bender to discuss further, who explains that while the NDFI exposure was affected by a definitional change, their portfolio spans 13 subsectors and 20 asset classes. Their largest concentration is in REITs, and they follow a comprehensive credit risk governance model to manage risks.

In the paragraph, Bill Rogers discusses how private credit has long been part of their business ecosystem and represents a competitive force they consider and compete against. Gerard Cassidy asks about the impact of private credit and non-bank lenders on their customers, to which Rogers acknowledges their competition. Brad Milsaps concludes the earnings call, inviting further inquiries to the Investor Relations team and thanking participants for their interest in Truist. The operator ends the call.

This summary was generated with AI and may contain some inaccuracies.