Truist Financial Corporation

Greetings, ladies and gentlemen, and welcome to the Truist Financial Corporation third 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 Millsap.

Thank you, Betsy, and good morning, everyone. Welcome to Truist Third 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 Senior Management Team. During this morning's call, they will discuss Truist Third 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, at 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, Brad, and good morning, everyone, and thanks for joining our call today. Before we discuss the third quarter's results, I'd like to begin with purpose on slide four. As you all know, Truist is a purpose-driven company. We're dedicated to inspiring and building better lives and communities. It's the foundation for everything we do, and the belief in this mission has never been more important, given the extraordinary start to the fourth quarter with two devastating hurricanes. In the days since these storms cut a path through the Southeast, Truist's humanitarian aid team and hundreds of teammate volunteers have been out in force to help our communities. I've spent time in recent days with teammates in some of the hardest hit areas. These teammates are doing just incredible heroic work helping their neighbors, distributing critical supplies and making sure Truist facilities were open to serve our clients even as their own lives have been upended. In addition to contributions from the foundation, we've set up several sites where we've distributed supplies. We've also deployed mobile services for basic needs like showers and laundry facilities, as well as mobile branches, ATMs, and generators to serve clients in areas without power. This recovery is going to take time. And we're going to play a significant role in helping these communities recover and rebuild in the days, weeks, months, and even years to come. They can count on Truist. Okay, let's turn to discussing our third quarter results on slide five. We've made demonstrable progress on our strategic priorities during the quarter. As I'm proud of the results our teammates delivered, which included solid underlying earnings, improved momentum, and sound asset quality metrics. On a GAAP basis, we reported net income available to common shareholders of $1.3 billion, or $0.99 a share. Adjusted EPS was $0.97 per share, which excluded a few small discrete items that Mike will discuss later in the call. As you can see on the slide, our solid performance was defined by several key themes. First, we grew adjusted revenue 2.4% on a linked quarter basis due to another strong quarter of investment banking and trading income and a full quarter's impact of the balance sheet reposition we completed during the second quarter. Second, our results show our continued expense discipline and focus on managing cost. As a result of these efforts, our efficiency ratio improved on both a linked and light quarter basis. Adjusted expenses increased by less than 1% linked quarter and declined for the third consecutive quarter on a year-over-year basis. Expenses are now projected to decline in 2024 compared to 2023, which is an improvement from our original commitment to keep expenses flat for the year. Non-performing loans remained relatively stable, while net charge-offs were better than our expectations. We did record a $25 million loan loss provision during the quarter specifically related to Hurricane Helene, which Mike will discuss in more detail later. We also returned $1.2 billion worth of capital to our shareholders through our common dividend and repurchase of $500 million worth of common stock as part of the $5 billion repurchase plan our board approved in late July. I mean late June, excuse me. We anticipate repurchasing another $500 million of our common stock in the fourth quarter. Our CET1 capital ratio remained relatively stable, leaving us well positioned to grow our balance sheet and to continue to return significant amount of capital to shareholders. Finally, we continue to actively pursue growth opportunities in our core consumer and small business and wholesale banking businesses. Although average loans declined during the quarter, I'm encouraged by the underlying momentum in terms of increased loan production, greater wallet share within certain businesses, and the talent we're attracting to our company, all while continuing to maintain our expense discipline and investing in important areas like technology and our risk infrastructure. Maintaining this momentum and continuing to execute against our strategic growth priorities will be key to reaching our mid-team's medium-term ROATCE target, which we also announced during the quarter. Before I hand the call over to Mike to discuss the quarterly results, I want to spend a little time reviewing the positive momentum we're seeing within business segments and within our digital initiatives on slides six and seven. In consumer and small business banking, I'm encouraged by the momentum as we experienced an increase in loan production in key focus areas within our lending portfolio, and we continue to acquire new clients and households through both digital and traditional channels. Average consumer loan balance remained relatively stable link quarter as growth in other consumer, which includes our specialty consumer lending verticals, was offset by lower residential mortgage and home equity loans. We did experience a 3% link quarter increase in consumer loan production driven by non-real estate lending, which drove period-end indirect auto and other consumer balances, each higher by 2% on a link quarter basis. Importantly, we're not sacrificing our credit standards or pricing discipline to drive growth. Credit metrics remain relatively stable, and new consumer loan production spreads are accretive to the portfolio. Although overall deposit growth remains muted, we're continuing to add new clients and households. We opened nearly 200,000 new digital loan and deposit accounts during the quarter, including over 75,000 new-to-bank clients through our digital channels, which represents a 35% increase over the third quarter of last year. Net new checking account growth was once again positive in the third quarter as we grew 40,000 new consumer and business accounts, bringing our total to 108,000 year-to-date. Not only are we adding new households, but primacy rates and client retention also continue to increase due to improvements to the client experience as we rolled out more than 130 enhancements to our digital experience during the quarter. In wholesale, I'm encouraged by the underlying momentum in terms of improved production, increased wallet share within certain businesses, and the talent we're attracting to our company. During the quarter, we saw 1% growth in commercial sales, deposits and a 4% increase in wholesale lending production, which was offset by lower line utilization and higher pay downs, due in part to greater capital markets activity, which is an area where we have invested consistently. The third quarter represents the strongest capital markets quarter we've reported since 2021, as investment banking revenues increased 79% year-over-year and 43% year-to-date. We experienced record quarterly performance in equity capital markets, investment-grade issuance, public finance, and asset securitization. The growth is tied to our focus on gaining greater mindshare with our clients across our industry verticals, which has led to an increase in the number of lead roles across several product lines. We're continuing to invest in our wholesale platform as we've made several key new hires this quarter in commercial banking, corporate banking, investment banking, wealth, and payments and plan to add additional talent in the fourth quarter and beyond. These new teammates complement our great existing teams and have significant experience in many cases from larger institutions and are attracted to our results-oriented culture. As I mentioned last quarter, we have a specific focus on further building out our middle market commercial lending segment, which represents one of the largest growth opportunities within our regional businesses. We'll primarily focus on industries that support existing corporate investment banking coverage and expertise where we've gained significant share. We also continue to enhance our wholesale digital capabilities by improving the client experience. During the quarter, we launched several significant enhancements to the Truist OneView platform, including the ability for clients to securely chat directly with treasury management specialists. Enhancing the client experience and growing our digital capabilities are important parts of our strategy, which I'll discuss in more detail on slide seven. We continue to show strong and steady growth in our digital capabilities as client mobile app users grew 6% and digital transactions increased 15% compared to the third quarter of 2023. We continue to migrate clients towards self-service capabilities, primarily driven by strong growth in Zelle transactions, which are up 36% year over year. In addition to an increase in account openings, we're also seeing an improvement in the funding of our digital account openings with balances up significantly over the third quarter of last year. Our recently enhanced digital deposit application experience has helped drive a 49% increase in mobile device applications, which now account for 72% of total digital applications. These improvements also drove a 500 basis point link order increase in the conversion rate on new digital applications, driving productivity and leading strong digital client satisfaction scores. We're not only better serving and growing with our clients, but we're also doing that more efficiently. So now let me turn it over to Mike to discuss the financial results, and I'll come back after that and close us out.