Truist Financial Corporation

Greetings, ladies and gentlemen, and welcome to the Truist Financial Corporation First Quarter 2024 Earnings Conference Call. Currently, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, today's event is being recorded. It is now my pleasure to introduce your host, Mr. Brad Millsaps.

Thank you, Jamie, and good morning, everyone. Welcome to Truist's First Quarter 2024 Earnings Call. With us today are our Chairman and CEO, Bill Rogers, our CFO, Mike McGuire, and our Vice Chair and Chief Risk Officer, Clark Starnes, as well as other members of Truist's senior management team. During this morning's call, they will discuss Truist's first quarter results, share their perspective on current business conditions, and provide an updated outlook for 2024. The accompanying presentation, as well as our earnings release and supplemental financial information, are available on the Truist Investor Relations website, ir.truist.com. 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'll turn it over to Bill.

Thanks, and good morning, everyone. Thanks for joining our call today. But before we discuss our first quarter results, let's begin, as always, with purpose. We see that on slide four. Truist is a purpose-driven company dedicated to inspiring and building better lives and communities. And I'd like to share some of the ways we brought purpose to life last quarter. Our focus on small business heroes is a great example of purpose-driving performance. This strategy helps community heroes achieve their financial dreams and elevates their ability to support our neighbors and build strong communities. We're seeing great success with small business, evidenced by the addition of nearly 8,600 small business accounts during the quarter, and $700 million worth of deposits. Our Truist Community Capital team committed more than $252 million to support over 1,600 units of affordable housing, over 3,000 new jobs, and projects that will help empower almost 400,000 people in underserved communities over the next three years. Additionally, we announced the initial recipients of grants from the Truist Community Capital Catalyst Initiative, which is a three-year Community Reinvestment Act program aimed at four key focus areas, affordable housing, small business access to capital, workforce development, and essential community services. There's 17 community organizations receiving grants that will be used to support efforts in 54 communities across 13 states and allow local nonprofit organizations to better respond to critical community needs within their states. Lastly, we published our 2023 Corporate Responsibility and Sustainability Report this month, which I encourage you to read and learn more about our progress in building better lives and communities. In all of these examples, our core belief is evident. We're leaders in banking, and we're unwavering in care. All right, so let's turn to some of our key takeaways on slide six. First, I need to state and remind everyone that our first quarter, and for the previous periods have been restated to reflect the pending sale of Truist Insurance Holdings. This change has no impact on our net income available common shareholders. The restatement does remove TIH's revenue and expense from our financial statements as net income from TIH is now being reported as net income from discontinued operation. Mike's going to provide a lot more details around that later in the call. On an adjusted basis, we reported net income available to common shareholders of $1.2 billion, or $0.90 a share, which excludes a $0.04 per share impact from the industry-wide FDIC special assessment and a $0.05 per share impact from the acceleration of incentive compensation at TIH due to the pending sale. Pre-tax restructuring charges of $70 million negatively impacted adjusted EPS by $0.04 per share. So despite a few discrete items in the quarter, we're pleased with our underlying results. As you can see on the slide, our solid performance was defined by several key themes. First, we saw a significant increase in investment banking and trading revenue, driven by strong performance across much of our capital markets platform, with particular strength in M&A and equity capital markets. Loan demand continues to remain relatively muted, though we did see some improvement in our commercial lending pipelines during the quarter. On the consumer side, we recalibrated several of the capital conserving strategies we deployed last year prior to announcing the sale of TIH. This resulted in an increase in loan applications, and in March, we saw the first increase in balances since October of 2022. Second, our results show our expense discipline and continued focus on managing cost. As a result of these efforts, adjusted expenses increased by less than 1% link quarter and decreased by 4% on a year-over-year basis. Although the late quarter rate of expense growth will increase in the second quarter relative to the first, we are fully committed to delivering our expense objectives in 2024, which excluding TIH, should now result in adjusted expenses remaining approximately flat in 2024 versus 2023. Third, asset quality continues to normalize off historically low levels but we're pleased that non-performing loans remain relatively stable and the net charge-offs were within our expectations. During the quarter, we also announced that we'll sell our remaining stake in Truist Insurance Holdings, which is on track to close in the second quarter. Sale of TIH will significantly strengthen our relative capital position, which will create substantial capacity for growth in our core banking businesses. In addition, as we discussed in February, A stronger capital position affords us an opportunity to evaluate a variety of capital deployment opportunities post-closing, including a potential balance sheet repositioning designed to at least replace TIH earnings. The sale of TIH also positions us to resume share repurchases. The timing and size of repurchase activity will depend on our ongoing capital planning, market conditions, clarity around final capital rules, and other factors. But our goal is to resume a program that's both meaningful and durable. Before I hand the call over to Mike to discuss our financial performance in more detail, I want to provide a quick update on the progress we're making in improving experiences for our clients, which we see on slide seven. We continue to show strong and steady growth in our digital capabilities. In the first quarter of 2024, mobile app users grew 8% and digital transactions increased 13% compared to the first quarter of last year. Through activating teammates to educate clients on our capabilities, transactions continue to shift towards self-service capabilities, with 77% of deposits occurring through these channels, primarily driven by strong growth in Zelle transactions. Recently, we rolled out Zelle QR code widget, where users can quickly access their QR codes from their home screens to seamlessly assist with bank transfers. At Truist, we aim to make banking simple and easy for our clients through thoughtful enhancements to their experience. Enhanced offerings coupled with strong growth in digital have resulted in higher retail digital client satisfaction scores. These scores surpassed pre-merger highs as we continue to focus on accelerated adoption and efficiency using our T3 strategy. Overall, I'm proud of the continued momentum Truist is making in digital and optimistic about the opportunity to expand our digital user base and drive self-service transaction volume. So with that, Mike, let me turn it over to you to discuss our financial results in a little more detail.