Truist Financial Corporation

Greetings, ladies and gentlemen, and welcome to the Truist Financial Corporation fourth quarter 2020 earnings conference. As a reminder, this event is being recorded, and it is now my pleasure to introduce your host, Mr. Ryan Richards, Director of Investor Relations for Truist Financial Corporation.

Thank you, Abby, and good morning, everyone. We appreciate you joining our call today. We're our Chairman and CEO, Kelly King. President and COO Bill Rogers and CFO Darrell Bible will highlight a number of strategic priorities and discuss Truist's fourth quarter 2020 results. Chris Henson, Head of Banking and Insurance, and Clark Starnes, our Chief Risk Officer, will also participate in the Q&A portion of our call. We are conducting our call today from different locations to help protect our executives and teammates. The accompanying presentation, as well as our earnings release and supplemental financial information, are available on the Truist Investor Relations website. Our presentation today will include forward-looking statements and certain non-GAAP financial measures. Please review the disclosures on slides two and three of the presentation regarding these statements and measures, as well as the appendix for appropriate reconciliations to GAAP. With that, I will turn it over to Kelly.

Thank you, Ryan, and good morning, everybody. Thank you very much for joining our call. We really appreciate that. You know, I would say overall this quarter and this year are very good, given the challenging environment that we face. We, you know, have a continued focus on our strong culture. It's activating very, very well. We're executing well on our revenue synergies. We had really effective expense focus, and we made appropriate investments for the future and importantly supported our teammates in difficult environments and kept our clients and communities number one. Our purpose is to inspire and build better lives and communities. And we think in the times we live in today, this is more important than ever. We focus on our mission, we focus on our values. I would point out to you that with regard to our values, ultimately we focus most of our attention on the happiness of our teammates. In the challenging environment that we face today, helping people get through the challenges they're living with at home and at work and all of the various difficulties that people are going through. Finding happiness in this environment is a very, very important undertaking, and we work hard to try to help that be possible for our teammates. If you're following along on the slides, let's go to slide five. I just want to point out that, you know, it's nice to say, pardon me, that you have You know, culture is nice to say you have an important purpose, but it's more important to live it. So I just want to point out a few of the things that we have done that I'm proud of in terms of living our purpose. You know, during the course of the year, we launched our Seeds of Hope program where we helped our teammates with money to grow out and actually do little projects, little things to help people in need. We launched our Truist One Team Fund, our home page program. Our Truist Cares program was very effective, where we invested over $50 million to meet the immediate and long-term needs of our communities, our clients, and our teammates. We provided over $100 million in special COVID support for our teammates and 750,000 client accommodations, $13 billion in PPP loans, which funded help for more than 80,000 companies and created or protected about 3 million And we did 355 small to medium-sized grants in our communities. I'm very proud of our $60 billion three-year community benefits program. I would say to you we are ahead of the time schedule in terms of making those investments. We supported those who are historically underrepresented through a $780 million commitment. That includes $40 million in helping establish an organization called Corner Square Community our capital, which is focused specifically on CDFIs in the minority space. And we're proud that we were able to invest $20 million over three years to support HBCUs and their students. On slide six, let's talk a little bit about where we are with the merger. I want to make a point of context for you with regard to how we think about our merger, because it's a bit different than most mergers. It's very different than the many, many mergers I've been through in my career. We're not just putting two big companies together here, cutting expenses and trying to improve profitability in the short term. Rather, we're building what I call a new bank. We're building a bank based on the best of both from both organizations, and in some cases, just new systems and processes. Like, for example, in our commercial lending area, we're taking the very new and very best in class SunTrust and Senior Loan Origination Program and the BB&T. back-end system in terms of commercial loans. So combined, we have the best from both sides, and it's a classic case where two plus two equals five. We certainly could have picked one. It would have been cheaper. It would have been faster, but it would not have been better, and it would not have been client-focused. Dale's going to be talking to you about our merger charges and other merger expenses a little later. I just want to emphasize that as he does that, remember that you have the normal MERCs that we called out early on in the announcement. That's normal signage and different systems that are just going away. They're being trashed. They haven't a future benefit. They really are just a merger charge. And then we have these other investments, which I call investments because they are. They're investments in the future. They're making our organization better. It's client-focused. And while they will not be in our own going long-term run rate, These are investments that we make today to be sure that we have an agile, very client-focused organization as we go forward. You see there a number of accomplishments for 2020. I'll just point out a couple of those. Very importantly, we've made great progress in our culture. Could not feel better about that. We established our brand and visual identity. We successfully merged first digital convergent, we believe, in terms of modern days and truest securities. Activated our integrated relationship management process, which is pivotal to our success. We did consolidate 104 branches, leveraging our blended branch program, which is innovative. Remember, we did divest $2.3 billion in deposits, about 30 branches. And there have been a lot of corporate background functions that have been integrated, including audit, risk, legal, finance, and others. And we importantly did a huge amount of work on appropriate job regrading for our teammates. Dale will comment with regard to some costs with regard to that, but this was a very important process in terms of making sure that our teammates through the year knew that we were going to do the right thing in terms of looking at the new responsibilities, establishing the right kind of job, and appropriate compensation. And we chose to make that retroactive for them during 2020 because it was the right thing to do. They were doing the job, we just had not had a chance yet to properly grade the compensation and that serves us very, very well. In terms of 21, just a few points here. Everybody tends to focus on the core branch conversion, which, as you know, is in the first half of 22. That is very, very important, make no mistake. But look, there are a huge amount of conversions and other activities going on in 20. 20 is a really big conversion year. We will complete our wealth brokerage conversion. We'll have our mortgage conversion, Salesforce conversion, We'll be closing an additional 226 branches in the first quarter. We'll be implementing our digital first migration, supporting our T3 concept in terms of meeting our clients' needs on a seamless basis, integrating technology in touch to yield a high level of trust. And so there are a lot of activities that are going on during the course of the year. So I just don't want you to be thinking there's not much going to be happening in terms of the growth and conversion for the first half of 22 because Frankly, most of the hard work will be done by the end of this year, and then we'll actually execute on the final grant closures and conversions as we head into 22. Looking at a few highlights with regard to our performance on slide seven, I'm very excited about our revenue. Total taxable equivalent revenue of $5.6 billion, up 5.5% annualized versus the fourth quarter. That was really driven by stable net interest income, strong fee income, especially in investment banking and trading income. Strong insurance performance. Chris will talk about that if we get questions in Q&A. And very proud of five insurance acquisitions just in the fourth quarter alone. And we expect more activity as we head into 21. A very strong adjusted net income available to common shareholders of $1.6 billion. We had diluted earnings per share of $1.18. A diluted return on average assets of $1.35. and a very strong adjusted return on average tangible common equity of 19.03. So as you can see, we're well on the way to top performance, and all the metrics that we projected when the deal was announced, which is kind of miraculous. You know, it's been two years. There's a lot been going on, but we're still tracking and doing really well in terms of hitting that top performance level of metrics as we expected that we would. Daryl's going to be commenting on some capital issues. I would point out to you that Our board did approve of the $2 billion in common stock repurchases, which we saw in the first quarter. We have outstanding credit quality performance, much better than expected, and our common equity tier one is exactly right on 10%, which is what we projected a couple of years ago. On slide eight, I'll just point out to you the unusual items for this quarter. And you can see that we have the regular merger charges. And as I related to earlier, the incremental operating expenses are not in the long-term run rate. And they equated to 28 cents drive with regard to gout versus adjusted. So that's a quick look at the early highlights. Let me now turn it to Bill for some focus on some key rates. Bill? Great. Thank you, Kelly.