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spk04: Greetings, ladies and gentlemen, and welcome to the Truist Financial Corporation Second 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, this event is being recorded. It is now my pleasure to introduce your host, Mr. Brad Milstap.
spk13: Thank you, Betsy, and good morning, everyone. Welcome to Truist's second quarter 2024 earnings call. With us today are our Chairman and CEO, Bill Rogers, our CFO, Mike McGuire, 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 second quarter results, share their perspectives 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 2 and 3 of the presentation regarding these statements and measures, as well as the appendix for appropriate reconciliations to GAAP. With that, I will now turn it over to Bill.
spk06: Thanks, Brad, and good morning, everyone, and thank you for joining our call today. So before we discuss our second quarter results, let's begin with purpose on slide four. As you all know, Truist is a purpose-driven company dedicated to inspiring and building better lives and communities. Purpose is the foundation for things that we do. We believe purpose and performance are inextricably linked. I'd like to share some of the ways we brought our purpose to life last quarter. During the quarter, Truist Securities advised and served as an active joint book runner for Oglethorpe Power's inaugural $350 million green bond, which will be used to support their investment in Plant Vogel, the largest producer of clean energy in the United States. The company is committed to reducing GHG emissions while delivering cost-effective and reliable clean energy with a diverse energy portfolio. This transaction represents only the second green-labeled bond in the U.S. where the use of proceeds are allocated to nuclear energy. We also launched a new financial education program tailored specifically for high school and college students called Truest Life, Money, and Choices. This initiative is aimed at empowering younger generations with financial lessons and essential skills to navigate their financial futures. These are just a couple of examples of how we brought our purpose to life during the quarter. I'm very proud of the meaningful work we're doing across our businesses to have a positive impact on the lives of our clients, our teammates, our communities, and, of course, our shareholders as we work to realize our purpose. So let's turn to our key takeaways on slide six. On an adjusted basis, we reported net income available to common shareholders of $1.2 billion, or 91 cents per share, which excludes the gain on the sale of Truist Insurance Holdings, the loss on the sale of certain available-for-sale investment securities, a charitable donation to the Truist Foundation, and a few smaller items that Mike will discuss in further detail in the call. In addition, pre-tax restructuring charges of $96 million, which are primarily related to the sale of TIH and severance, and also negatively impacted adjusted EPS by $0.05 per share. So, looking through 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 grew adjusted revenue 3 percent on a linked quarter basis, which was driven by 4.5 percent growth in net interest income due primarily to the balance sheet reposition we completed during the quarter. Second, our results show our continued expense discipline and focus on managing costs. As a result of these efforts, adjusted expenses increased by 2.6 percent linked quarter and decreased by 3 percent on a year-over-year basis. We are fully committed to delivering our objective of keeping expenses flat in 2024 versus last year. We're also pleased that non-performing loans remained relatively stable for the fifth consecutive quarter and that net charge-offs were within our expectations. During the quarter, we also completed the sale of our remaining stake in Truist Insurance Holdings, which significantly strengthened our relative capital position and creates substantial capacity for growth in our core banking businesses. In recognition of the incredibly long-term positive impact of our insurance business, we utilized a portion of the gain to make a $150 million charitable contribution to the Truist Foundation to further our purpose-driven work across our banking footprint for years to come. Simultaneously with the closing of TIH, we repositioned a portion of our available for sale investment portfolio, which along with the proceeds received from the sale of TIH, is expected to provide an offset to TIH earnings contribution. Mike will provide more details on these transactions later in the call. In late June, our board authorized the repurchase of up to $5 billion of our common stock through the end of 2026. We plan to begin repurchasing our shares during the third quarter and will initially target share repurchases of approximately $500 million per quarter for the remainder of the year. Finally, we continue to actively pursue growth opportunities in our core consumer and wholesale banking businesses. Although overall loan demand remains slow during the quarter, I'm encouraged by the underlying momentum in terms of increased wallet share within certain businesses and the talent we're attracting to our company, which I'm going to discuss a little later in the call. So before I hand the call over to Mike to discuss the financial performance in more detail, let me provide a quick update on the progress we're making in improving experiences for our clients on slide seven. We continue to show strong and steady growth in our digital capabilities as client mobile app users grew 7% and the digital transactions increased 13% compared to the second quarter of last year. Transactions continue to shift towards self-service capabilities, primarily driven by strong growth in Zelle transactions, which are up 39% year-over-year. In addition, we added over 180,000 new accounts during the quarter, including nearly 70,000 new-to-bank clients through our digital channels, which represents a 17% increase over the second quarter of 2023. Importantly, digital checking account production among Gen Z and millennial clients is higher by 42% on a year-over-year basis. A new, more modernized small business digital onboarding experience has also resulted in new high in application completion rates, while we're also seeing increased digital engagement with our small business clients. We've also made enhancements to enterprise platforms that have empowered teammates to deliver knowledge and care through 1.8 million caring conversations, resulting in 1.4 million accepted recommendations for great Truist products and services. These enhanced offerings, coupled with strong growth in digital, have resulted in higher consumer digital client satisfaction scores as we continue to focus on accelerated adoption and efficiency using our T3 strategy. Overall, I'm really proud of the continued momentum Truist is making in digital engagement. So with that, let me turn over to Mike to discuss the financial results in more detail. Mike?
spk10: Thank you, Bill, and good morning, everyone. Before I begin discussing our second quarter results, I'd like to spend a few moments recapping the strategic actions that significantly impacted our second quarter results. First, on May 6th, we completed the divestiture of our remaining ownership stake insurance holdings at an implied value of $15.5 billion. At closing, we received after-tax cash proceeds of approximately $10.1 billion and recorded an after-tax gain of $4.8 billion. The sale of TIH created $9.5 billion of capital, which generated 230 basis points of CET1 under current capital rules and 254 basis points of capital under proposed fully phased-in Basel III rules. Our tangible book value per share also increased by 33%. On the same day, we executed a strategic balance sheet repositioning of a portion of our available for sale investment securities portfolio. We sold approximately $27.7 billion of market value, lower-yielding investment securities, which resulted in an after-tax loss of $5.1 billion. The investment securities that we sold had a book value of $34.4 billion and a weighted average book yield of 2.80% for the remainder of 2024, including the impact of hedges and based on the federal funds curve at that time. Including the tax benefit, the sale of investment securities generated $29.3 billion of proceeds available for reinvestment. When coupled with the proceeds from the sale of TIH, there were $39.4 billion of proceeds available for reinvestment. Of that, we invested approximately $18.7 billion in investment securities yielding 5.27% with the remaining $20.7 billion held in cash. At the time we invested the proceeds, the blended reinvestment rate on the new investment securities purchased and the cash was 5.22% for the remainder of 2024, including the impact of hedges. As Bill mentioned, the reinvestment of the proceeds from the sale of TIH and the balance sheet repositioning completed during the quarter are expected to replace TIH's earnings contributions. These actions, completed during the second quarter, significantly accelerate our ability to meet increasing standards for capital and liquidity in the industry and, importantly, create capacity for Truist to grow its core banking franchise and to return capital to shareholders via our strong dividend and share repurchases. Now turning to our second quarter key performance highlights on slide nine. We reported second quarter 2024 gap net income available to common shareholders of $826 million or 62 cents per share. This included a net loss of $4 billion from continuing operations or 298 per share and net income from discontinued operations of $4.8 billion or $3.60 per share. The net loss available to common shareholders from continuing operations of $4 billion, or $2.98 per share, was impacted by the following items. A $6.7 billion pre-tax, or $3.80 per share after tax, loss on the sale of certain available-for-sale investment securities. A $150 million pre-tax, or $0.09 per share, charitable contribution to the Truist Foundation. A $13 million pre-tax or one penny per share after-tax expense related to FDIC special assessment adjustment. Net income available to common shareholders from discontinued operations of $4.8 billion or $3.60 per share was impacted by the following items. A $6.9 billion pre-tax or $3.60 per share after-tax gain on the sale of tourist insurance holdings. a $10 million pre-tax, or 1 cent per share, after-tax expense due to the accelerated recognition of TIH equity-based compensation. So, on an adjusted basis, we reported net income available to common shareholders of $1.2 billion, or 91 cents per share. In addition to the items I just noted, we also had pre-tax restructuring charges totaling $96 million in the quarter, which negatively impacted adjusted EPS to common shareholders by 5 cents per share. Approximately $33 million of these pre-tax charges, or 2 cents per share after tax, negatively impacted net income from continuing operations and were primarily related to severance and real estate rationalizations. The remaining restructuring charges were recorded in discontinued operations and were related to legal and other expenses associated with closing the divestiture of TIH. Total revenue adjusted for the losses on the available for sale investment securities increased 3% linked quarter due to a 4.5% increase in net interest income and relatively stable non-interest income. Adjusted expenses increased 2.6% linked quarter but were down approximately 3% on a like quarter basis. Our CET1 ratio increased by 150 basis points linked quarter to 11.6%, primarily reflecting the sale of TIH and the balance sheet repositioning I discussed earlier. In addition, net charge-offs declined six basis points on a linked quarter basis, and our non-performing loans remained relatively stable both on a like and linked quarter basis. Moving to slide 10. Average loans decreased 0.7% on a sequential basis reflecting overall weaker client demand. Average commercial loans decreased $1.3 billion, or 0.7%, primarily due to a 0.8% decline in C&I balances, driven at least in part by capital markets activity. In our consumer portfolio, average loans decreased $1 billion, or 0.9%, due to runoff in our residential mortgage portfolio and a decline in indirect auto. Other consumer balances, which include our specialty lending units, experienced modest growth and benefited from seasonal strength at Sheffield and increased demand at Service Finance. Overall, we expect client loan demand to remain relatively muted in the third quarter. Moving to deposit trends on slide 11. Average deposits decreased 0.3% sequentially as growth in money market and savings was offset by declines in non-interest bearing time and broker balances. Average non-interest-bearing deposits decreased 1.2% and represented 28% of total deposits, which is unchanged compared to 28% during the first quarter of 2024. During the quarter, we experienced an increase in deposit costs, albeit at a slower pace than the first quarter. Specifically, total deposit costs increased six basis points sequentially, 2.09%, which resulted in a 1% increase in our cumulative total deposit beta to 39%. Interest-bearing deposit costs increased seven basis points sequentially to 2.89%, which also resulted in a 1% increase to our cumulative total interest-bearing deposit beta cost of 54%. Moving to net interest income and net interest margin on slide 12. For the quarter, taxable equivalent net interest income increased 4.5% linked quarter, or $155 million, primarily due to the strategic balance sheet repositioning completed during the quarter. Excluding the impact of this repositioning, our net interest income would have been relatively stable on a linked quarter basis due primarily to our focus on average client deposits, which declined less than we expected. Reported net interest margin increased 14 basis points on a linked quarter basis to 3.03%. This was due primarily to the impact of the balance sheet repositioning. The partial quarter impact of the balance sheet repositioning helped drive a 31 basis point improvement in the average yield on our investment securities portfolio to 2.77%. We estimate that our balance sheet remains positioned as relatively neutral from an interest rate perspective comparable to Q1. Turning to non-interest income on slide 13. Adjusted non-interest income, which excludes the losses associated with the balance sheet repositioning, decreased $8 million, or 0.6%, relative to the first quarter. The linked quarter decrease was primarily attributable to lower investment banking and trading income, which declined $37 million from our strong first quarter performance due to lower M&A fees, equity originations, and trading income, partially offset by higher loan syndication fees. This decline was partially offset by higher mortgage banking and other income. Adjusted non-interested income increased 4.2% on a light quarter basis as higher investment banking and trading and wealth management income were partially offset by lower service charge on deposit and other income. On a year-to-date basis, investment banking and trading income is up nearly 30% over the same period in 2023. Now I'll cover non-interested expense on slide 14. Gap expenses of $3.1 billion increased by $141 million linked quarter primarily due to higher other expense related to $150 million charitable donation, higher personnel costs reflecting merit increases, and higher professional fees. These increases were offset by lower restructuring charges and a reduction in FDIC expense due to a larger special assessment recorded in the first quarter. Excluding these items and the impact of intangible amortization, adjusted non-interest expense increased 2.6% sequentially due to higher personal expense and professional fees. On a like quarter basis, adjusted expenses declined $86 million, or 3%, reflecting lower headcount in our continued expense discipline. Moving to asset quality on slide 15. Asset quality remained stable on both a like and linked quarter basis, reflecting our strong credit risk culture and proactive approach to quickly resolving problem loans. During the quarter, our net charge-off ratio decreased 6 basis points to 58 basis points. The decrease in net charge-offs for the quarter reflects lower consumer losses due to normal second quarter seasonal declines and certain de-risking initiatives put in place in the second half of 2022. Our loan loss provision declined $49 million linked quarter, reflecting our stable credit performance, but it still exceeded net charge-offs for the quarter, resulting in a slight build to our overall loan loss allowance. Our A-triple-L ratio increased to 1.57%, up one basis point sequentially and 14 basis points year-over-year, which reflects ongoing credit normalization and stress in the office sector. Despite the normalization, non-performing loans remained relatively stable for the fifth consecutive quarter, while total delinquencies increased just two basis points on a linked quarter basis. Wholesale-criticized loans declined a billion dollars linked quarter to 10.8 billion dollars. Included in our appendix is updated data on our office portfolio, which is virtually unchanged at 1.6% of total loans. However, we did increase our reserve on this portfolio from 9.3% to 9.7% during the quarter to reflect continued stress in the sector. Approximately 6.3% of our office portfolio is currently classified as non-performing compared with 5.5% on March 31st. Approximately 90% of these loan balances are paying in accordance with the original terms of the loan. Notably, approximately 22% of our office portfolio is housed within our community banking and wealth segments, where loan sizes tend to be more granular, guarantor support more prevalent, and overall loss is lower. We expect stress to remain in the office sector and believe that the size of our portfolio is manageable and well-reserved, but our position is to be very proactive in identifying and resolving issues in this portfolio. Turning now to capital on slide 16. Truist CET1 ratio increased from 10.1% at March 31st to 11.6% at June 30. The increase was driven by the gain on the sale of Truist Insurance Holdings and organic capital generation, which was partially offset by the loss on the sale of certain available for sale investment securities during the quarter, which I addressed earlier. Importantly, The sale of TIH creates capacity for Truist to pursue growth opportunities in our consumer and wholesale banking businesses and to return significant capital to shareholders as evidenced by our share buyback program. Truist is well positioned to weather a wide variety of economic scenarios, which was evident in our most recent CCAR stress test results released in late June. Specifically, Truist had the second lowest CNI loan loss rate and the third lowest CET1 erosion rate versus our peers. Our stress capital buffer will improve by 10 basis points to 2.8%, effective October 1st. At June 30, our CET1 ratio was 430 basis points, higher than our new regulatory minimum of 7.3%, leaving us well-positioned to both grow our balance sheet and return capital to shareholders. Our increased level of capital accelerates our ability to meet increasing standards for capital and liquidity in the industry as our estimated CP1 capital ratio under proposed Basel III endgame rules improved 20 basis points to 9.1% at June 30, which is 180 basis points above our new regulatory minimum. And now I'll review updated guidance on slide 17. Looking into the third quarter of 2024, we expect revenue to increase 1 to 2% from second quarter 2024 adjusted revenue of $5 billion. We expect net interest income to increase 2 to 3% in the third quarter, primarily driven by a full quarter impact of the balance sheet repositioning completed on May 6th. We expect non-interest income to remain relatively stable on a linked quarter basis. Adjusted expenses of $2.8 billion in the second quarter are expected to increase by 3% in the third quarter due to higher professional fees, software costs, and higher marketing costs. For the full year 2024, we previously expected revenues to be down 0.5% to 1.5%. We now expect total revenues to decline by approximately 0.5% to 1% in 2024. Our updated outlook is based on slightly better client deposit balance performance, partially offset by lower client loan demand, and our updated view of interest rates, which now assumes just one reduction in the federal funds rate in November of this year. Consistent with our previous expense outlook, we expect full-year 2024 adjusted expenses to remain approximately flat over 23 adjusted expenses of 11.4 billion dollars. In terms of asset quality, we continue to expect next charge-offs of about 65 basis points in 2024. As Bill previously mentioned, we are targeting approximately $500 million of share repurchases per quarter for the remainder of the year as part of our share repurchase authorization announced in late June. Finally, we expect our effective tax rate to approximate 16% or 19% on a taxable equivalent basis in both the third and fourth quarters of 2024. Now I'll hand it back to Bill for some final remarks.
spk06: Great. Thanks, Mike. So our top priorities for 2024 are unchanged. They include growing and deepening relationships with core clients, maintaining our expense discipline, returning capital to our shareholders via share buybacks and our common strong dividend, and enhancing our digital experience through T3, all while maintaining and strengthening strong risk controls and asset quality metrics. We made demonstrable progress on these priorities during the quarter, and I'm really proud of the results our teammates delivered, which included solid underlying earnings, improved momentum, and sound asset quality. All this was accomplished while also completing the divestiture of truest insurance holdings and repositioning our balance sheet during the quarter. These actions created significant capital capacity to grow our consumer and wholesale businesses and return capital to shareholders via our strong common dividend and our recently announced repurchase authorization of up to $5 billion of our common stock. In addition, our significantly stronger balance sheet is well positioned to weather an even wider range of economic and interest rate environments. Although the balance sheet repositioning completed during the quarter is expected to replace TIH's earnings in the near term, We recognize that our increased level of capital will result in near-term dilution to our return on average tangible common equity ratio. As I've said previously, our starting point for our ROATCE is exactly that. It's a starting point. We're going to move with pace to deploy our capital, improve our returns, but we're not going to be in a rush to leverage capital to meet short-term expectations that do not have long-term positive impact on our company clients and shareholders. We have a clear understanding of not only where we want to win, but where we want to win profitably. We'll look to share more of our plan with you as we progress through the remainder of this year. I can say that I'm encouraged that much of the profitability improvement potential we are working towards is centered on further deepening of existing client relationships and verticals and product lines that already exist at Truist. We have great confidence in our ability to further penetrate our existing client base, grow our core banking business, and help new and existing clients achieve financial success by delivering our commercial, consumer, payments, investment banking, and wealth platform, given the ongoing investments through our existing footprint and specialty areas. In wholesale, we've invested in our investment banking and trading platform over the last several years. We've also hired experienced bankers in key industry verticals and products. These investments have resulted in greater mindshare with our clients across many industry verticals and an increase in the number of lead roles across several product lines. Much recently, we've invested heavily in our payments business and have made key leadership additions, as this is an area where we see significant opportunity for growth over time, not only with new clients, but also within our existing client base. We have a clear focus, high expectations, and a compelling teammate value proposition. Many of our teammates have risen to this new challenge And we have very successfully hired additional strong talent in wholesale, primarily from larger institutions who have experience and are thriving in our purpose-driven high-performance culture. We plan to continue adding talent in wholesale with a specific focus on further building out our middle market commercial lending segment, which represents one of the largest growth opportunities within our regional business. We will primarily focus on industries that support existing corporate investment banking coverage and expertise. We're making these investments while also adhering to our expense discipline, which is helping fund investments in technology to improve the client experience and also to improve risk management. In consumer, I'm really encouraged with our momentum. Our internal client satisfaction scores continue to improve as evidenced by increased net new checking account production, increased primacy, and lower attrition rates. Net new checking account production was once again positive in the second quarter as we added 38,000 new consumer and business accounts. Importantly, we're also seeing year-over-year improvement in account attrition rates and increased primacy and usage within new account openings. As I previously mentioned, we added 180,000 new accounts during the quarter, including nearly 70,000 new-to-bank clients through our digital channels, which represented a 17% increase. In addition to an increase in account openings, we're also seeing improvement in the funding of our digital account openings, with balances up 60% over the second quarter of last year. In consumer and small business lending, we've been consistently adding new small business lenders across our footprint. In the second quarter, small business applications increased 15% linked quarter, resulting in a 10% increase in our pipeline, giving us confidence that average consumer balance says excluding runoff and residential mortgages will stabilize in the third quarter. In conclusion, I'm pleased with the progress we've made as a company at the midpoint of this year, but we acknowledge there's more work to do as we strive to produce better results in the future. We have tremendous momentum within our company. We have momentum with our clients, and we've got great momentum with our teammates. We have an incredible franchise, energized, purposeful teammates, and specialized capabilities that our clients value. We think the ability to grow our core banking business, our profitability, and return significant amounts of capital to our shareholders in the form of dividends and share repurchases over the next several years is a unique, differentiating factor for Truist. I am optimistic about our future. I look forward to operating our company from our increased position of financial strength. And finally, I'd be remiss if I didn't thank all of our incredible teammates and our great leaders for their incredible purposeful focus on productivity and moving our company forward. So, Brad, with that, let me hand it over back over to you for Q&A.
spk13: Thank you, Bill. Betsy, at this time, will you please explain how our listeners can participate in a Q&A session? As you do that, I'd like to ask the participants to please limit yourself to one primary question and one follow-up. In order that, we may accommodate as many of you as possible today.
spk04: We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Again, in the interest of time, please limit yourself to one question and one follow-up.
spk15: At this time, we will pause momentarily to assemble our roster. The first question today comes from Ryan Nash with Goldman Sachs.
spk04: Please go ahead.
spk14: Hey, good morning, Bill. Good morning, Mike. Morning. You know, maybe to start off with NII, you know, it feels post-restructuring. You know, we've bought them now, and you should get a step up next quarter. But can you maybe just talk about the drivers of sequential NII growth over the next few quarters? You know, do you expect margin improvement? And then how do you think about where the margin could be headed over the medium term? Thanks, and I have a follow-up.
spk10: Good morning, Ryan. You know, we mentioned in our comments that we do expect the NII to improve next quarter by 10%. you know, 2% to 3%. Really, the bulk of that is driven by just the full quarter impact of the repositioning that we completed back in May. You know, we continue to expect there to be some pressure on client deposit balances as well as loan balances, so maybe a touch conservative there. We did have some nice, just to say it, just some nice outperformance in the second quarter on client deposit balances, which really helped stabilize that core NIIX, the bonds, But that's really sort of the story for Q2. And I think Q4, just looking out a little further, if you think about kind of rest-a-year trajectory, kind of more of the same, right? I mean, we mentioned we've got a November cut-in. We think that helps a touch, but that is the first cut, and it's pretty late. So we've got pretty modest expectations around the impact there. And I think for us, really what will stimulate some improvement on the NII side will just be some of the core balances. So getting client loan demand increased, which hopefully will generate balances as well. And I'll just mention this. I mean, we're very focused around the company. Pick your segment or LOB. Everybody in the company is very focused on realizing that growth opportunity once it presents itself. And you've heard this from, I think, others this week and last week. There just has really not been a lot of client activity.
spk14: Got it. Maybe this one for Mike or Bill. As a follow-up to Mike's comments, so, you know, it looks like loan balances are getting closer to level off. But, Mike, you highlighted 3Q. You're expecting it to be muted. And my interpretation was that it doesn't sound like you're expecting a lot of growth in the fourth quarter. So maybe just flush those expectations a little further. Bill, you know, when do you expect it to turn positive? What do you think the drivers are? And I guess, given the strength of your footprint, do you actually expect Truist to begin to outperform peers on growth at some point? Thank you.
spk06: I'll start with the second part of that first, and the answer to that is yes. But it has to have growth. We've got to sort of see that coming. You know, clients are on the sidelines. I mean, we can feel that in our conversations. Our conversations are increasingly a lot more strategic, so I feel like we actually even know more about what our clients are thinking. But they're a bit on the sidelines. Our production was up. So we saw production being up. It was really probably best in consumer, where it was up a little more significantly. Utilization is just absolutely flat. But paydowns were also up. So, you know, and our clients that aren't towards the, you know, the larger side, they were accessing the capital markets. And the good news is, I mean, you see that in our investment banking, particularly in our DCM results. I mean, we're Our capture rate on that is really, really high, so we sort of see the other part of that. You know, despite the pipelines being up, production being up, I just want to be careful, you know, Ryan, about sort of like putting a stake in the ground and saying, okay, it's going to return on X. I mean, you know, take this weekend. I mean, there's a lot of uncertainty out there in the world and in the markets. So while clients have capacity, we're coiled spring, ready to go, positioned better than anybody. I think we just want to be, you know, realistic about when and if that, well, not if, but when that's going to come back, and when it's going to come back with some strength. And when it does, I think to your latter part of your question, we're in the best markets, and I think we should disproportionately grow faster.
spk15: Thanks for all the color, Bill. Yep. The next question comes from Ken Austin with Jeffrey.
spk04: Please go ahead.
spk12: Thanks. I guess as a follow-up to that line of thought, Bill, you mentioned that you'd be methodical and kind of, you know, not get ahead of yourself to just use near terms. I'm just wondering if you can kind of just remind us again, now that we've got the buyback out there, now that restructuring is done, Just gave them a more color on the loan growth. Talk about prioritization. You know, what would lead you to do kind of one more than the other in terms of, you know, moving the ball of all things excess capital related? And then, you know, how that kind of leads into, you know, your pacing choices on the buyback specifically. Thanks.
spk06: Yeah, Ken, great question. And obviously something that's, you know, important and we're going to be calibrating You know, priority one, two, and three is growing our business. I mean, we think we've got a great franchise, a great market. We're really well positioned. We've invested in talent. We've invested in capabilities. So I think we've got the capacity and the capability to grow in our core business. So that is absolutely going to be the primary focus. We raised capital in the most efficient way possible. You know, you just couldn't have raised it more efficiently than how we raised capital. And we want to make sure that we deploy that also in the most efficient way possible, long-term benefit for our shareholders. So I think we've put together a compelling return perspective with what Mike outlined. We're going to do about $500 million a quarter for the next couple of quarters. I would presume we'd enter next year in sort of the same kind of pace. But remember, that's also on top of we've got a really strong dividend. So in terms of total dollars returned to shareholders over the next six months, I mean, we have a really compelling value proposition. So we're going to calibrate that as we go along. We don't want to over-index on one and lose this incredible capital advantage we have for growth.
spk12: Got it. And then secondly, you know, as you – Enjoy this incremental NII benefit. It does seem like in the second half, certainly in the third quarter, expenses look to be increasing. Can you give us also a little bit of context in terms of how you're calibrating the new better revenue outlook to making those investments and the pacing just, you know, flattish? You know, flat is a tough, like... overall guide to see through. But kind of at flat, it implies that third quarter and fourth quarter expenses are going higher. Just wondering if you could provide a little context underneath that about your pacing of your investment spending and to the areas you mentioned earlier. Thanks.
spk10: Hey, Ken, it's Mike. Maybe take a swing at that one. No, you're right. I mean, look, we think we do see growth in the third quarter on the expense side. I think that's still on a like basis, you know, close to flat, maybe even a touch higher. better. And I think that implies, if you think about flat, maybe a touch of growth in the fourth as well. Look, I mean, the first half of the year, we were very focused on cost discipline. And Frank flat. That's still important to us. But as we've sort of gotten to the midway mark, you know, there have been certain projects, you know, whether it be, you know, some marketing spend, you know, sort of you name it, nits and nats that, you know, perhaps were delayed and that drove some of the beat maybe even this quarter and even in last quarter. And so some of that stuff just makes a ton of sense. And And as we really, you know, shift our mindset, and you heard Bill talk a little bit about it in his prepared remarks around some of the hiring we're doing and, you know, middle market lending as an example around our payments business, some calibrating of marketing spend, et cetera. These are all factors that are driving our outlook for the second half. And so, look, we feel, and we've said this, you know, really since, you know, last fall, we are, you know, very, very confident and committed to being sort of 0.0 or better on expenses this year.
spk06: Yeah, and Ken, just to add to that, I mean, when we, you know, undertook this, you know, approach in the fall of last year, I mean, we were always really clear that this was going to include investments, you know, and the timing of those sort of, you know, as Mike pointed out, come quarter to quarter. And we're seeing the benefit of that. I mean, the investments we made in payments, investments we made in talent. So the expense guidance was always coincident with that. I'll just say, because I think it's really important, the discipline that we have in the company around both of those is significantly increased. So we sort of know the next dollar to invest with a lot of confidence. And we also have just incredibly strong discipline around the expense side and where the opportunities are. So I think we've got the right balance here. And as Mike said, wholly committed to a flatter, better expense proposition for the remainder of this year.
spk15: Great. Thank you, guys. The next question comes from Scott Seifert with Piper Sandler.
spk04: Please go ahead.
spk11: Good morning, everyone. Thanks for taking the question. Mike, I know you suggested you all are relatively neutral to rate moves. I think still kind of for better or worse, a lot of investors consider who is among the, you know, kind of closer to the liability sensitive side of the equation. In that vein, you anticipate just one rate cut in the remainder of the year. How would another one or two affect that NII guidance? Obviously, timing would be a factor, but just curious on your overall thoughts.
spk10: Yeah, good morning, Scott. Yeah, so we do have the one cut in November. You know, if we got one earlier call, I think the curve today has a September cut, maybe December, and maybe even a touch more than that. That would be a help for us. You know, look, our baseline path, you know, does show benefit from down rates. I think the question, and I brought it up in sort of uh... my earlier question that ryan asked you know that that first cut given you know how high we are and how late we expected you know we're just trying to be you know reasonable and thinking about the benefit will get there but i think you're right i think if we got one earlier and maybe perhaps a second that that would be a that would be a good guy i will say that i think given where we are in terms of, you know, how high we are and how long we've been here and some of the client behavior that we're able to observe. I think the more impactful, you know, catalyst will be, again, getting some of that, you know, loan demand and balance growth and client deposit growth as well. So we'd take it all.
spk11: Perfect. Okay, good. Thank you. And then maybe switching gears just a second. Something you might be able to address the investment banking line. Down a little in the quarter, but I'd say you're still well above a recent run rate, so still a very strong number. Maybe if you could touch to or speak to sort of overall thoughts on the outlook and then maybe a thought on what you might consider sort of a sustainable base of revenues for you all.
spk06: Yeah, I mean, the investment banking business is always going to be a little quarter-to-quarter variation. In the first quarter, we had one of the highest M&A fees in our company's history, so that sort of, you know, impacted that a bit. But most importantly, I feel really good about the momentum. So if you look at sort of our relevance, I mean, we're gaining share in virtually every category. The things that we're doing in terms of – You know, active book runner and left lead transactions, you know, and ECM, half of our fees were being, you know, from active book runner, you know, dramatic change where we've been in the past. You know, lots of left leads transactions in there, and again, increased market share. And most importantly, just really good relevance. So back to sort of the comment about talent and comment about adding talent and upgrading our toolkits. Our commercial bankers' focus and understanding of our capabilities is just increasing exponentially. So our dialogue, as I mentioned, with our clients is really strong. It's all strategic dialogue versus product dialogue, which is really good. And I think for the balance of the year, I mean, I think this is the kind of momentum we ought to be able to continue in investment banking. So I think we feel good about that.
spk15: Perfect. All right, so Mike, thank you guys very much. The next question comes from Erica Najarian with UBS.
spk03: Please go ahead. Hi, good morning. Just putting everything that you said together, Mike, maybe I'll address this one to you. You know, your net interest income was better than consensus, both mostly on the net interest margin You mentioned that the impact of the margin from balance sheet restructuring is a partial one. If I look at the line items on non-interest income, you also beat consensus there for the quarter in terms of the core items. And consensus is at down one, which is at the low end of your revenue range. I guess, what are we missing? And I heard your response to you know, Ryan's question about, you know, you expect balances to continue to come down in both the loan on deposit side. But if your starting point on net interest margin is higher than consensus, and then you have a little bit more pull through, a month pull through in the third quarter, and you're neutral to rates in September will help. I guess, are you being very conservative on what you could accomplish in the second half of the year? Because I get the conservatism from a business standpoint, but from a rate standpoint, it feels like you guys are in good shape to maybe do a little bit better.
spk10: Yeah, Erica, I appreciate the question. I mean, I, Look, I think there was a beat on balances in the second quarter, especially if you look at it on an average basis. And so our rate paid was a touch better than we thought. And so you're right, starting position better than where we sort of would have expected to be in April. I think the pressures that we expected in the second quarter we still believe will persist. in the third, especially, in terms of balances and rate paid. Another piece of this is that while we did get some benefit on our net interest margin from the bonds, like recouponing, some of the benefit as well is just on a smaller balance sheet. So we did, you know, for example, we paid down some wholesale liabilities late in the second that will come through in the third on an average basis. So you'll see more net interest margin improvement, but it'll be on a more efficient, smaller balance sheet. you know, on rates, you know, I don't want to call the ball on conservative, non-conservative. I think we're cautious on what benefit we'll get on the first cut or two. You know, we've, you know, thought about it a lot, done a lot of work and analysis. You look at sort of historically, you know, over the last, call it 30 years, the down cycles and, you know, the betas have been slow, right? So I think that's in our thinking too for the rest of the year. And look, I've said this a couple of times, I think for us, the thing we're like, feel fine about the guidance we gave. I think what would really be upside for us would be a little bit of pull through on, you know, more client activity and the ability to generate more, you know, loan volume. And with that will come deposits. You get that and maybe, you know, you get Scott's, you know, extra cut and early and, you know, that feels good. I mean, the hurts are obviously, you know, the cut we've got, no cuts perhaps. Maybe that's not such a bad guy. And then just the pressure that we've been seeing on balances, both deposits and loans.
spk03: Got it. And my second question is for Bill on capital and returns. And maybe I'm just, you know, reading too much into tea leaves because investors are very curious. You know, the authorization for the $5 billion is through 2026. You said during your prepared remarks and, you know, tell me if I'm being too ticky tacky, but you said initially target $5 billion for the remainder of the year. And I guess investors are wondering about timing. And I know, you know, someone had already asked, Ken had already asked about capital priorities, but You know, what's the timing in terms of that, you know, fulfilling that $5 billion authority? And as I think about returns, I know you'll probably tell us more during fall conference season, but initially this franchise together with TIH had an ROTC potential in the low 20s. With TIH out, could you still achieve like a high-teens proxy? And I'm sure you will get more details during fall conference season.
spk06: Yeah, Eric, and just to correct one thing, we said sort of a billion through the remainder of this year, and we'll sort of start the next year. You know, the reason to put the authorization of up to and make it through 26 is just to give us that kind of flexibility in terms of how we think about that. So we're going to calibrate that against our growth opportunities and where we see an ability to invest in our franchise, and we're going to be disciplined about it. So And then as I mentioned earlier, remember, this is with a really strong dividend as well. So I think you can't talk about one without talking about the other in terms of total return to shareholders. So I think our unique capability to have a really good return to shareholders over the certainly near term and medium term from the dividend buyback is actually quite significant. And then you put on top of that our ability to earn and earn profitably and grow our business. So I think that's, you know, we're trying to look at all of this in the big mix. As it relates to ROTCE specifically, yeah, I mean, you know, the past numbers are the past numbers. We sort of have to start from the business model that we have now. Again, we're going to give a little more guidance on that with a little more specificity as we get towards the end of the year, as you mentioned. I think we'll have a little more knowledge as to, you know, sort of overall capital requirements. And while Basel may not be complete, I think we might have a better picture of where we might be and what the, you know, sort of CET1 base might be that we'd operate from and think about how to put all those mixes together as it relates to growth as well. So irrespective of the target itself, the growth to the target I think is a really compelling proposition for Truist.
spk15: Okay, thank you. The next question comes from Betsy Gravick with Morgan Stanley.
spk04: Please go ahead.
spk01: Hi, good morning.
spk10: Hi, Betsy.
spk01: A bit of a follow-up on the last question with Erica regarding Capital One. I put together the $500 million that you're looking for in the buybacks and the dividend. It looks like you're, for the most part, returning earnings, quarterly earnings, to investors, at least for the rest of this year. And RWA doesn't change. That means you've got to see T1 stable where it is today. I know you probably not. You didn't put a target. CET won out. I'm going to guess you're going to highlight that we need the capital rules to put that out there. But is that a fair conclusion that 11-6 is essentially what we should anticipate as we roll through the rest of this year?
spk10: Yeah, Betsy, I think that's, you know, roughed out. You know, you could see it sort of sliding sideways for a while for the reasons you mentioned. You're right. I mean, you take the 500 buyback and call it 700 or so dividend. You're approximately at, you know, this is rough, rough earnings, right? And you're right. We don't expect significant ROA improvement or decline, you know, over the period. I'll just say this. I mean, you know, and you mentioned, you know, sort of CET1 target bill referred to it as well. I think a couple of things just to think about there. One, we like operating with a higher level of capital in today's world. One, affords us the right, we think, strength and resiliency and ability to sort of react to the world. Importantly, we've got a growth agenda. We're focused on prosecuting. uh, that's, you know, company wide, uh, you feel that, you know, with any, you know, especially frontline, but really across the whole company. And then Bill mentioned sort of the, the, the capability to return capital and that can come in various, various forms. But yeah, I think, you know, modeling us, you know, somewhat flat short term, but again, we, our expectation is that we'll begin to grow RWAs, uh, next year. And, um, and, and, and, and so, uh, that's how we're thinking about it.
spk01: Right. And then, On the paydowns that you experienced in the CNI book, how much of that did you capture in the capital markets business? In other words, if folks are terming out and paying down CNI, are we seeing a majority recaptured in the fee line? Thanks. Thanks.
spk06: Yeah, you know, it's hard to do that calculation sort of perfectly, and we spend a lot of time thinking about it. But if you sort of look at the overall, you know, line, this was one of our, you know, best DCM quarters, you know, in a really long time. So our capture rate's really high. It's hard to put an exact percentage on that because, you know, there are puts and takes, and would you have gotten it otherwise, and was it related to this, that, or the other? But it's really high, and it's reflected in our overall DCM growth.
spk01: Got it. Thanks so much. Appreciate it.
spk15: Yep. The next question comes from John Pencary with Evercore.
spk04: Please go ahead.
spk05: Morning. What it seems like, just touch on credit a little bit. I know you added modestly to the loan loss reserve and it looks like much of that was on the office side. Let me get your thoughts there in terms of what you're seeing right now in terms of credit progression. What are the areas that you're seeing some weakening? You had some pressure on delinquencies and non-accruals and could that justify incremental modest additions to the reserve from here or could you see it stable or even some releases from this point. Thanks.
spk08: Hey, John. This is Clark. As Mike and Bill said, we were very pleased with the overall asset quality for the quarter, and we generally had stable delinquencies. We had flat NPLs, and our losses were a touch lower, particularly in this consumer area. So, you know, we still see in the consumer side the normalization that's occurring due to higher rates and inflation and the stimulus burned down, particularly for the lower end consumer. So we've been a little careful there, even in this quarter's reserve. We added a little bit for those lower income consumer finance areas. And then you're right, on the CRE side and the office exposure, we still just want to make sure we're addressing the uncertainty there. On the wholesale C&I side, we actually had, as Bill said, lower watch lists And even though we're monitoring areas like the leverage book, consumer discretionary, senior care, transportation, some of those more rate-sensitive areas, we've not had any big sector issues today that's been more episodic. So when we think about our reserves, we feel really good about the adequacy of where we are today, and it reflects what we know today. So unless there's a substantial change in the economic outlook or that level of uncertainty in areas of stress like CRE office would emerge higher. We would expect our reserve levels for the remainder of 24 to be relatively stable.
spk05: Okay, great. Thanks, Senator Clark. And then separately on the fee side, I know you mentioned relatively stable in terms of the non-interest income outlook for the third quarter. Maybe can you talk about fourth quarter a little bit, how we should think about the progression into fourth quarter and into 25, and then separately as part of that, on the investment banking side, you made some pretty solid talent acquisition, and you've cited the intent that you're investing there and the progress you've made. Can you maybe just talk to us about, is the build-out ongoing? Is there a focused effort to upscale the investment banking business even more in terms of the of the reach and breadth of the business and maybe what a long-term revenue contribution from that business that you anticipate.
spk06: Maybe I'll start with the latter, Mike, and then I'll turn it over to you for the form. That's okay. So the build-out of investment banking business has been decades plus. So this isn't sort of a new thing. It has been consistent. I think the way you described it is exactly right. We'll continue to build where we have relevance, where we have opportunity, and so we can be competitive and win in our markets. I think the part that gets missed, though, is the investment we're making around the investment banking business. So this is the investment that we're making with our commercial teams and our middle market teams and expanding their knowledge and capability to talk to clients about the things that are available to them. And so think about the the amount of clients in our commercial business that are now private equity owned and our capability to be relevant in those discussions and help them along that flight path. So investment's not just in the business itself, but it's in everything that surrounds the business and in support of. You know, we like the pace that we're growing, and we think we've had a really good CAGR. If you sort of go back over time and look at the CAGR of that business, you'd sort of say that's a really good growth pattern. Importantly, we're doing it profitably, which is also important. So we have a really good efficiency of that business, certainly on a relative basis. And we want to keep all of those in check. I mean, we don't want to grow faster than the market. You know, we want to grow coincident with the opportunity that we have within our markets. We want to do it profitably and we want to do it sustainably. So we want to have a little less variability there. relative to that business. So it's tied to more of our core client capability than, you know, the vagaries of a particular market.
spk10: Mike, there was a... Yeah, John, I think you asked just about trajectory for the second half for fees. You know, I think some, you know, you don't know to, you know, put some puts to take. Our outlook is relatively stable, really, for the second half. So call it stable, stable.
spk06: And the upside to that is that the upside is if business has been, you know, we're trying to take an approach with what we know right now.
spk15: Great. Thank you. The next question comes from Mike Mayo with Wells Fargo.
spk04: Please go ahead.
spk07: Hey, not a new question, but it goes back to your efficiency ratio and your expense guide. And you mentioned higher in the third quarter and maybe any preview for next year or how you're thinking about that. And that's partly in the context, there's a Bloomberg story out saying that 11 of the 22 large banks fall short on operational risk according to the OCC. Now that's not confirmed by the OCC. There's no specific companies given. I know you're not allowed to say what your regulatory ratings are, but if, you or any other bank did have a deficient operational risk rating, what would that mean? Would it mean, I don't know, what would that mean? Are you able to say if you had ever been in that position in the past five years? I know you had some operational issues that you worked through. And I also know, Bill, that your purpose is being open every day for your clients and employees and your community. So I know you put that as a very high priority. So what degree has that hurt the efficiency in the past few years? And to what degree could that still be a drag on efficiency going ahead? Thanks.
spk06: Yeah, Mike, you asked and answered part of your question as it relates to what we'll comment on and not comment on. But look, I've said very consistently, actually, since the day Truist was formed, is the size and complexity of our organization, we're going to invest in our risk framework. We're going to invest in a durable risk framework so we can stay competitive, we can stay appropriate with our regulators. And that's always been part of this expense profile. So I think even in today's prepared remarks, I mean, I'm always consistent with that. And I think everybody's got to stay in that mode. Post of March of last year, irrespective of anybody's ratings, there was just an increased focus on creating a durable risk profile. So we're going to continue to be in that mode I can't see that changing short-term, medium-term, or long-term. Are there peaks and valleys in that as you go up? Yes. Does it increase proportionally? Absolutely. I mean, I just think that's the price of being in our business and also the importance of creating a durable, sustainable risk framework for a company of our size and a company of our opportunity.
spk07: Well, the $20 billion market cap question relates to the last part of your answer is for a company of our size. So I'm just wondering, and it's an ongoing wonder, to what degree does that investment in the risk framework hurt Truist disproportionately versus banks larger than your size? And how has that changed?
spk06: Yeah, I mean, there are efficient frontiers is the way, Mike, that I like to talk about. There are efficient frontiers and where you are on the efficient frontier relative to that. Today, I feel like we're at a good place. So we're at a good place in terms of the investments that we need and should make relative to our company, our size, and our ability to return and have an efficient company relative to that. So I think we're at a good place. But that efficient frontier moves, you know, so... You always have to be flexible and think about that in the context of where it moves, and we're conscious of that. So, you know, today I feel like we're a good place. By the way, we merged our companies because we thought we were at a different place and that that was going to be more complex and we needed to have a company of the size and scale sort of seen. I mean, we didn't project March of last year, in fairness, but understanding that the complexity and the durability and the investments needed to create that kind of risk platform was going to be needed. So that efficient frontier, I think we're at a good place on it, but it does move.
spk07: And last short follow-up, the definition of good place as it relates to 2025, I know you usually don't give guidance for a few quarters from now, but other banks have mentioned record NII, positive operating leverage, lower expenses next year. Can you give us a sneak peek of that? good place as it relates to 2025 financials?
spk06: Yeah, I mean, our sneak peek is the momentum we're creating right now. You know, so that's the sneak peek. And we want to continue to do that. You know, Mike, you and I have talked about this. I mean, we have a strong focus on positive operating leverage. So all of our businesses have plans that are focused on positive operating leverage. That's what they try to build over time. You know, the controllable, more controllable factor over that is on the expense side right now. And I'm really pleased with the progress we're making and expect to continue to have that kind of discipline going forward. Those expenses will better reflect the revenue opportunity that we see in next year. So, you know, be assured that we've got to focus on creating that, but also be confident that we're building momentum. And I think this order is good evidence of that. And our guidance for the rest of the year is good evidence of that.
spk15: Okay, thank you.
spk04: The next question comes from Ibrahim Kunawalla with Bank of America. Please go ahead.
spk00: Hey, good morning. Just a quick follow-up, Bill, on your response to Mike's question. As we think about, just to make sure we understand this correctly, as we think about next year, X, any sort of revenue momentum taking sort of the top line higher, Should we expect expenses like the streets expecting about 2.9 to 3 billion per quarter in expense on rate continuing in 25? Is that fair to assume all is equal absent sort of revenue growth?
spk06: Yeah, thanks. I'm not going to give expense guidance for next year. Just to say, you know, confidence that we'll be focused on positive operating leverage, confidence that we've got great expense discipline and And expenses will more parallel the revenue opportunity. You know, so if we see, you know, the investments that we're making, better growth opportunities in our markets, we're going to take advantage of that. And if that requires, you know, a requisite expense increase, then we'll do that. That will all be in the appropriate context, a focus on positive operating leverage, an efficient company that has high returns.
spk00: Noted. And just one quick follow-up, maybe if you could remind us post sort of the acquisition integration, where we stand in terms of any big tech upgrades coming on the deposit lending platforms as we think about the next year or two. Thanks.
spk06: Yeah, I mean, all that's been factored into the discussions that we have. I mean, our ability, you know, this year particularly to invest a lot in the payment side is all predicated on the existing platforms that we have. The advent of The use of APIs have been really, really great opportunities to continue to invest. We had huge investments in our lending portfolios as part of the merger. You know, so there's no like one big stairstep, you know, sequenced investment. These are continuous investments in our platform and capabilities over time.
spk00: And is it safe to assume that from a tech platform standpoint, Truist is not at a disadvantage relative to peers who probably have not done deals and just been working on... There's an impression out there that you have a lot more sort of heavy lifting to do there that's put you back. Sounds like that's not the case, but just wanted to confirm.
spk06: Well, the momentum we've seen in the last several quarters, the impression from our clients is that we have a really good platform. So, you know, our acquisition of clients, our performance metrics, client satisfaction scores... All the things that we look in terms of how do clients think about us is real positive and continuing.
spk00: Excellent. Thank you.
spk15: Thank you, Bill. We will take our last question today from Matt O'Connor with Deutsche Bank.
spk04: Please go ahead.
spk09: Good morning. Thanks for squeezing me in. You kind of implied the loans and deposit balances might be down a little bit again in 3Q, if I heard that correctly. And they were down a little bit in 2Q here. Just thoughts on where they bottom. And I understand when we're looking at industry data where there's less than 1% loan growth, like we're talking about really small numbers, but it seems like you're still kind of lagging the H8 data a little bit. And it's understandable given how much has been going on in the company. And you talked about spending more in marketing and hiring people. But just thoughts on kind of where those level out and you start tracking the AHA data a little bit more.
spk10: Thanks. Hey, Matt. Thanks for the question. Maybe just taking loans first. You know, we're hopeful we'll see some relief. We were down, you know, a little less than a percent this quarter average. In the third quarter, I think, you know, again, base case probably expected to be down, maybe not quite as much. We'd love to see that be different. But that's sort of what we're thinking about. And then hopefully kind of stable. You know, from there, same on deposits. Actually, deposits a little lower perhaps in the third. We mentioned that we felt like we had some outperformance in the second quarter. We did, you know, late in the quarter, just like a lot of others, some of the just sort of seasonality and tax payments we saw, you know, balances a little lower at the end of the quarter. That's not unusual. So we'll probably expect a little bit of pressure in the third quarter as well. But, again, even that stabilizing in the fourth. So think down a touch in the third for both and then hopefully stable in the fourth-ish.
spk09: Okay, that's helpful. And then, you know, just as you think about restarting kind of the loan deposit engine internally, you know, you did allude to the marketing and hiring people, but what's like the process of just getting the message out to kind of existing employees? Like you got all this capital, you got all this liquidity, like you could be front-footed. And I know it takes time to kind of flip the switch, again, especially in an environment where there's still little kind of growth out there. But, you know, just touch on a couple of things you're doing to – to drive that.
spk06: Yeah, sure. Rest assured that our teammates are highly focused. And, you know, there are places that we can dial more specifically, and you've sort of seen it. Our consumer production was up 37% over a linked quarter. Premier banking lending numbers sort of similar per branch production, those type things. So the places that we can, you know, we can dial in a little bit And then on the wholesale side, it's just a lot about training. It's a lot about hiring. It's a lot about market opportunity. It's a lot about dialogue with clients. So we look at all the pitches kind of approach, and we're seeing really good activity. But our teammates are on offense. Let there be no confusion. I mean, our teammates are on offense. They are not in a defensive position. Trust me, the shift for them happened quite quickly. You know, you could hear it and feel it in terms of momentum. People are attracted to come work for our franchise for some of the same reasons as we have the capital and capability to invest in the future. So, you know, rest assured that your point's right. I mean, the battleship, it's hard to turn, you know, but... But in terms of its direction, clear direction, clear communication, and clear focus from our teams.
spk15: Thank you. Thanks, Matt. This concludes our question and answer session.
spk04: I would like to turn the conference back over to Brad Millsap for any closing remarks.
spk13: Okay, thank you. That completes our earnings call. If you have any additional questions, please feel free to reach out to the Investor Relations team. Thank you for your interest in Truist, and we hope you have a great day. Betsy, you may now disconnect the call.
spk04: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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