Truist Financial Corporation

Ladies and gentlemen, thank you for standing by. Welcome to the SunTrust fourth quarter 2018 earnings results. As a reminder, today's conference is being recorded. I'd now like to turn the conference over to Ankur Vyas. Please go ahead.

Thank you, Stacey. Good morning and welcome to SunTrust's fourth quarter 2018 earnings conference call. Thank you for joining us. In addition to today's press release, we've also provided a presentation that covers the topics We plan to address during our call. The press release, presentation, and detailed financial schedules can be accessed at investors.suntrust.com. With me today, among other members of our executive management team, are Bill Rogers, our Chairman and Chief Executive Officer, and Allison Dukes, our Chief Financial Officer. Before we get started, I need to remind you that our comments today may include forward-looking statements These statements are subject to risks and uncertainty and actual results could differ materially. We list the factors that might cause actual results to differ materially in our SEC filings which are available on our website. During the call we will discuss non-GAAP financial measures when talking about the company's performance. You can find the reconciliation of these measures to GAAP financial measures in our press release and on our website, investors.suntrust.com. Finally, SunTrust is not responsible for and does not edit nor guarantee the accuracy of our earnings teleconference transcripts provided by third parties. The only authorized live and archived webcasts are located on our website. With that, I'll turn the call over to Bill.

Thanks, Arthur, and good morning, everyone. I'll begin with an overview of the fourth quarter and full year, which we highlight on slides three and four, and then I'll turn it over to Allison for some additional details. I'll conclude with some more strategic perspectives on our 2018 performance, our purpose, and thoughts heading into 2019. Core earnings per share were $1.50 this quarter, which excludes 10 cents per share in previously disclosed charges associated with the settlement of a legacy pension plan. Overall, I'd characterize this quarter as a good conclusion to a strong year for SunTrust. We delivered 3% revenue growth driven by net interest income as a result of both margin expansion and strong, broad-based loan growth. The loan growth we delivered this year is driven by the strategies of and the investments in our businesses, including consumer lending, CRE, and commercial banking, the success of our advice-oriented model, and our increasing relevance with our corporate client base. Market conditions made fee income growth more challenging in 2018, particularly within capital markets and mortgage. Nonetheless, the diversity of our business model enabled us to deliver solid overall revenue growth. We achieved our sub-60 adjusted tangible efficiency ratio target a year earlier than we anticipated. We originally set this target back in 2012 when our efficiency ratio was 72%. At the time, this was a highly aspirational target. We did not know when we would get there, but it was important to be ambitious. While this is a milestone, as we've said before, it is not a stopping point. And finally, we delivered 41% growth in capital returns to our owners. Our dividend per share increased by 36% and today we have a 3.5% dividend yield. Additionally, over the last two quarters we've purchased $1.25 billion worth of shares and have $750 million of capacity in the first half of 2019. The net result of our progress across these three fronts, coupled with a favorable operating environment, was a 40% increase in adjusted earnings per share. Importantly, our progress this year is consistent with a longer term trend. 2018 marked the seventh consecutive year of higher earnings per share, improved efficiency, and higher capital returns. This progress, which builds upon a higher base each year, is just one indicator of the culture of continuous improvement and high performance we've instilled across the company. Relatedly, we're adding a new medium-term efficiency target of 56% to 58%, which formalizes comments I've made in the past that we see several hundred basis points of additional opportunity. Our pace of improvement in any given year will vary based on macroeconomic environment and the investments we may pursue. but I have confidence in our ability to make continuous improvements each year as we work towards this targeted range. As it relates to fourth quarter results, I'll let Allison get into the details, but at a high level, we ended the year with strong revenue. In fact, revenue in the fourth quarter was a high watermark for the year. This was primarily driven by continued growth and net interest income, in addition to a very good quarter in commercial real estate related fee income, which more than offset the impact of market conditions out on capital markets revenue. Separately, credit quality continues to be a strength for us, not only because of the favorable operating environment, but also because of our disciplined risk culture. Our consistently low charge-off ratio, which was 26 basis points in the fourth quarter and 23 basis points for the full year, combined with the strength in asset quality drove a four-basis point decline in our A-triple-L ratio for the fourth quarter. Leading and lagging indicators of credit quality continue to be very strong, and we remain optimistic on our outlook for the U.S. economy. We will be diligent in monitoring for any changes, and most certainly will maintain our focus on diversity and a conservative credit risk posture, helping position our company and balance sheet for more consistent through-the-cycle performance. So with that, let me turn it over to Allison to cover some more of the specifics.