Truist Financial 2026 Conference Summary Company Overview - **Company**: Truist Financial (NYSE:TFC) - **Industry**: Banking and Financial Services - **Date of Conference**: February 10, 2026 Key Points Leadership and Structure - **Leadership Journey**: Dontá Wilson, Chief Consumer and Small Banking Officer, shared his 30-year journey from intern to executive, emphasizing his experience in various banking roles, including commercial banking and corporate banking integration [6][10][18] - **Consumer and Small Business Banking Division**: This division serves 14 million clients through 1,900 branches and digital platforms, contributing 52% of the company's revenue with $212 billion in deposits [13][14] Financial Performance - **Deposit Growth**: Truist has achieved 10-year low-cost deposits, with 42% being checking accounts, and represents 43% of the balance sheet in lending [14][15] - **Premier Banking Strategy**: The premier banking segment is a major growth engine, with 60% of the deposit balance sheet from premier clients, yielding 6 times more profitability than mass retail clients [18][19] Digital Transformation - **Digital Engagement**: Truist emphasizes a digital-first approach, with 2.5 million clients signing in digitally daily. The company aims to enhance client experiences through AI-powered tools like Truist Assist and Truist Insights [25][26] - **Client Acquisition**: 40% of new clients come through digital channels, with an average age of 36 and an average income of $80,000, indicating a focus on future premier clients [27] Growth Strategies - **Performance Management**: The company is focused on performance management, accountability, and using real-time dashboards to track progress [22][24] - **Lending Portfolio**: Truist plans to dial up its consumer lending businesses, including Sheffield, Service Finance, and LightStream, which have high return on assets [48][49] Market Insights - **Consumer Behavior**: Observations indicate a K-shaped economy where upper-income consumers are spending more, while lower-income consumers face liquidity challenges. However, overall spending remains strong due to stable employment and rising wages [56][58] - **Credit Quality**: Truist has de-risked its portfolios, showing no signs of credit stress, and plans to focus on more accretive portfolios moving forward [52] Future Outlook - **2026 Priorities**: Key priorities include deepening relationships with premier clients, enhancing digital engagement, and maintaining credit discipline. The goal is to achieve a 15% Return on Tangible Common Equity (ROTCE) [63][64] - **Branch Strategy**: Truist plans to open 100 new branches in affluent markets and renovate existing branches to focus on advisory services rather than transactional banking [39][40] Conclusion - **Investor Focus**: Investors should watch for increasing client deposits, deepening relationships with premier clients, and sustained credit discipline as indicators of Truist's success in 2026 [64]

Financial Performance - Truist Financial reported fourth-quarter 2025 net income of $1.3 billion, or $1.00 per diluted share, and full-year 2025 net income of $5.0 billion, or $3.82 per diluted share [1] - The company aims for a 15% return on tangible common equity (ROTCE) by 2027 and targets 14% ROTCE for 2026 [2] Charges and Expenses - The fourth-quarter results included a $130 million charge, or $0.08 per share after tax, related to a settlement agreement, along with additional charges totaling $0.12 per share for the quarter and $0.18 per share for the year [3] - GAAP non-interest expense increased by 5.2% sequentially, primarily due to legal accrual and higher personnel expenses, although excluding these factors, non-interest expense declined by about 0.3% from the prior quarter [4] Business Segment Performance - Consumer and small business loans grew by 5% on average, with average deposits increasing by 1%, supported by indirect auto and specialty lending platforms [5] - Truist added 77,000 new digital clients in the fourth quarter, a 10% year-over-year increase, and reported a full-year digital production growth of 9% [6]

Financial Data and Key Metrics Changes - The company reported net income available to common shareholders of $1.3 billion, or $1 per diluted share for Q4 2025, and $5 billion, or $3.82 per diluted share for the full year 2025 [7][18] - The results included charges totaling $0.12 per share for the quarter and $0.18 per share for the year related to severance and a legal matter [7][18] - The company returned $5.2 billion of capital to shareholders in 2025, reflecting a 37% increase over 2024 [8] Business Line Data and Key Metrics Changes - Consumer and Small Business Banking (CSBB) achieved 5% growth in average loans and 1% growth in average deposits [10] - Wholesale Banking saw average loans increase by 3% in 2025, with a notable 8% increase in Q4 compared to Q4 2024 [13][14] - Investment banking and trading income declined 6% for the full year but rebounded with a 28% increase in Q4 compared to Q4 2024 [14] Market Data and Key Metrics Changes - The company experienced strong loan growth across both Wholesale and Consumer Banking, driven by new client acquisition [8][10] - Average deposits were stable, with a decline in higher-cost broker deposits offset by growth in lower-cost client deposits [21] - The net interest margin increased by 6 basis points to 3.07% in Q4 2025 [22] Company Strategy and Development Direction - The company plans to open 100 new branches in high-growth markets and enhance over 300 existing locations [5] - Strategic priorities include accelerating revenue growth, maintaining expense discipline, and returning capital to shareholders [9] - The company aims for a 15% return on tangible common equity by 2027, with expectations of doubling revenue growth in 2026 [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's direction, citing strong client engagement and revenue growth [31] - The company anticipates a challenging economic environment but remains focused on executing its growth strategy [4][31] - Management highlighted the importance of investments in technology and talent to support future growth [5][31] Other Important Information - The company made changes to its reporting structure to better reflect business management and provide clearer insights into fee income-generating initiatives [16] - The CET1 capital ratio declined to 10.8%, while the CET1 ratio including AOCI increased to 9.5% [19] Q&A Session Summary Question: Can you elaborate on loan growth expectations? - Management indicated that while loan growth was strong at 8% year-over-year, guidance for 2026 is 3%-4%, focusing on high-quality, consistent growth [39][42] Question: What are the expectations for net interest margin? - Management expects net interest margin to exceed 3.03% in 2026, with potential expansion throughout the year [43][46] Question: Can you discuss the components supporting the 15% ROTCE target? - Management emphasized maintaining capital levels while improving returns through growth in payments, middle market expansion, and wealth production [51][54] Question: What is the outlook for capital markets and fee revenue growth? - Management expressed optimism about capital markets, citing strong momentum and a robust pipeline for investment banking and trading [62][64] Question: How will deposit growth be affected by the shift towards wholesale lending? - Management noted that deposit growth is expected to remain strong, supported by new client acquisitions and deeper relationships with existing clients [76][80]

Financial Data and Key Metrics Changes - The company reported net income available to common shareholders of $1.3 billion, or $1 per diluted share for Q4 2025, and $5 billion, or $3.82 per diluted share for the full year 2025 [5][16] - The results included charges totaling $0.12 per share for the quarter and $0.18 per share for the year related to severance and a legal matter [5][16] - The CET1 capital ratio declined by 20 basis points to 10.8%, while the CET1 ratio including AOCI increased by 10 basis points to 9.5% [17] Business Line Data and Key Metrics Changes - Consumer and small business banking (CSBB) achieved 5% growth in average loans and 1% growth in average deposits, driven by strong performance in consumer lending [8][9] - Wholesale banking saw average loans increase by 3% in 2025, with a notable 8% increase in Q4 compared to Q4 2024, supported by new client acquisitions [10][11] - Investment banking and trading income declined by 6% for the full year but rebounded in the second half, with Q4 revenues up 28% year-over-year [11] Market Data and Key Metrics Changes - The company added 77,000 digital new-to-bank clients in Q4 2025, a 10% increase from the prior year, indicating strong digital engagement [9] - Treasury management fees grew by 13% in 2025, reflecting strong client acquisition and deeper relationships [11] - Average interest-bearing deposit costs declined by 27 basis points to 2.23%, contributing to improved deposit growth [19] Company Strategy and Development Direction - The company plans to open 100 new branches in high-growth markets and enhance over 300 existing locations, focusing on personalized advice and growth opportunities [4] - Strategic priorities include accelerating revenue growth, maintaining expense discipline, and returning capital to shareholders, with a target of achieving a 15% return on tangible common equity by 2027 [7][26] - Investments in technology and talent are aimed at improving client experiences and driving future growth [4][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum heading into 2026, expecting revenue growth to double compared to 2025 [27] - The outlook for 2026 includes a projected 3%-4% average loan growth, primarily driven by commercial loans [18] - Management highlighted the importance of maintaining strong asset quality metrics, with net charge-offs expected to remain stable [23] Other Important Information - The company returned $5.2 billion of capital to shareholders in 2025, reflecting a 37% increase over 2024 [6] - Adjusted non-interest expense increased by 1% in 2025, demonstrating a commitment to expense discipline [22] - The company expects to repurchase approximately $4 billion of shares in 2026, a 60% increase compared to the previous year [27] Q&A Session Summary Question: Can you talk about loan growth and expectations for 2026? - Management noted strong momentum in commercial and industrial loans, with a focus on high client value and optimizing returns, guiding for 3%-4% growth in 2026 [30][31] Question: What is the outlook for net interest margin (NIM)? - Management expects NIM to exceed 3.03% in 2026, with potential expansion in the second half of the year due to lower deposit costs and fixed-rate asset repricing [32][33] Question: Can you elaborate on the 15% ROTCE target for 2027? - Management emphasized a steady improvement approach, focusing on maintaining capital while enhancing returns through growth in payments and middle market expansion [34][36] Question: How does the company view its competitive position in capital markets? - Management expressed confidence in the investment banking business, highlighting strong momentum and a robust pipeline, with expectations for continued double-digit growth [41][42] Question: What are the expectations for deposit growth? - Management indicated strong momentum in deposits, driven by new client acquisitions and improved client relationships, with a focus on both consumer and wholesale deposits [46][49]

Core Insights - Truist Financial Corporation has launched electronic direct deposit switching capabilities to enhance the digital onboarding process for new accounts [1][2] - Since the feature's launch in August, 19% of new digital account applicants have utilized it to switch their direct deposits [2] - The company aims to provide a faster and more intuitive onboarding experience, allowing clients to choose Truist as their primary financial partner [3] Company Overview - Truist Financial Corporation is a purpose-driven financial services company with total assets of $544 billion as of September 30, 2025 [5] - The company operates in various sectors including consumer and small business banking, commercial banking, investment banking, and wealth management [5] Strategic Initiatives - Truist is investing in building 100 new insights-driven branches and renovating over 300 branches in high-opportunity markets over the next five years [6] - Enhanced digital tools include smarter scheduling for appointments, an intuitive account opening process, and access to digital planning tools [6] - Truist Assist, an AI-enhanced digital assistant, averages up to 440,000 conversations per month, providing quick answers to client inquiries [6] - Truist Insights offers over 550 million personalized financial insights annually to assist clients with cash-flow summaries and balance monitoring [6] - The company is piloting Truist Client Pulse, an AI tool to aggregate client feedback for better insights and trend analysis [6]

Financial Data and Key Metrics Changes - The company reported net income available to common shareholders of $1,300,000,000 or $1.04 per share, which included $0.02 per share of restructuring charges primarily related to severance [5][15] - Average loan balances increased by 2.5% linked quarter, with broad-based growth across wholesale and consumer segments [6][17] - Average deposit balances decreased by $3,900,000,000 or 1% linked quarter due to the withdrawal of large M&A related client deposits [18] - Adjusted non-interest income increased by 9.9% linked quarter to over $1,500,000,000, driven by strong investment banking and trading income [7][21] - The company maintained a strong capital position, returning $1,200,000,000 to shareholders through dividends and stock repurchases [9][26] Business Line Data and Key Metrics Changes - Consumer and small business banking saw net new checking account growth with over 20,000 new accounts added in the third quarter [10] - Average consumer and small business deposit balances increased modestly by 1.9% year over year, while average loan balances increased by 7% year over year [11] - In wholesale banking, average wholesale loans increased by 2.8% linked quarter and 4.8% year over year, driven by new client acquisition [13] - Wealth management reported a 27% year-to-date increase in assets under management from wholesale and premier clients [14] Market Data and Key Metrics Changes - Digital transactions rose by 7% year over year, with digital channels accounting for 40% of new clients, particularly among Gen Z and millennials [12] - The company experienced strong growth in treasury management revenue, which increased by 11% year over year [14] Company Strategy and Development Direction - The company announced a strategic investment to build 100 new insight-driven branches in high-growth markets and enhance digital capabilities [5] - The focus remains on deepening relationships with existing clients and attracting new clients through personalized, technology-enabled experiences [5][10] - The company aims to achieve a 15% return on tangible common equity (ROTCE) by 2027, with plans to increase share repurchases significantly in 2026 [9][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to accelerate growth and profitability, expecting revenue growth in 2026 to more than double compared to 2025 [29] - The outlook for net interest income is positive, with expectations for growth driven by loan growth and lower deposit costs [19][26] - Management emphasized a strong credit risk culture and proactive approach to managing asset quality, maintaining strong credit metrics [24][96] Other Important Information - The company plans to target approximately $750,000,000 in share repurchases during the fourth quarter [9][26] - The CET1 capital ratio remained stable at 11%, with an improvement in the CET1 ratio including AOCI by 10 basis points to 9.4% [16] Q&A Session Summary Question: Revenue growth expectations for 2026 - Management indicated that revenue growth in 2026 is expected to more than double compared to 2025, with both net interest income and fee income contributing positively [37][42] Question: Deposit pricing and growth momentum - Management expressed confidence in deposit pricing and growth momentum, anticipating improvements due to recent Fed rate cuts and strong client acquisition [50][55] Question: Credit quality perspective - Management stated that overall credit quality remains strong, with a focus on high-quality assets in both wholesale and consumer spaces [96][100] Question: Capital levels and buyback flexibility - Management confirmed flexibility in buybacks, indicating that the $750,000,000 target is a floor, with potential for increases based on market conditions [104][106] Question: Nonaccrual loans in C&I - Management addressed concerns regarding nonaccrual loans, clarifying that the increase is related to specific exposures but overall credit quality remains robust [114][96]

Financial Data and Key Metrics Changes - The company reported net income available to common shareholders of $1.3 billion, or $1.04 per share, which included $0.02 per share of restructuring charges primarily related to severance [4][12] - Adjusted revenue increased by 3.7% late in the quarter, driven by a 9.9% growth in non-interest income and a 1.2% growth in net interest income [12][22] - Average loan balances increased by 2.5%, while average deposit balances decreased by $3.9 billion sequentially, or 1% [5][14] - The company returned $1.2 billion of capital to shareholders through dividends and stock repurchases, with plans to target approximately $750 million in share repurchases during the fourth quarter [7][22] Business Line Data and Key Metrics Changes - Consumer and small business banking saw net new checking account growth with over 20,000 new accounts added, and average loan balances increased by 2% late in the quarter [9][10] - Wholesale loans increased by 2.8% late in the quarter, driven by growth from new and existing clients [10][11] - Wealth management income increased by 7.5% late in the quarter due to higher market values and positive net asset flows [18] Market Data and Key Metrics Changes - Digital transactions rose by 7% year over year, with digital channels accounting for 40% of new clients, particularly among Gen Z and Millennials [10] - The company experienced broad-based growth across industry banking verticals, with significant increases in loan and deposit production per banker [11] Company Strategy and Development Direction - The company announced a strategic investment to build 100 new branches in high-growth markets and enhance digital capabilities [3][4] - The focus remains on deepening relationships with existing clients and attracting new clients through technology-enabled experiences [4][26] - The company aims to achieve a 15% ROTCE by 2027, reflecting confidence in long-term earnings power and strategic direction [24][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to reach a 15% ROTCE by 2027, with expectations for revenue growth in 2026 to more than double compared to 2025 [24][26] - The company anticipates continued loan growth and improved client deposit growth in the fourth quarter and into 2026 [14][22] Other Important Information - The company maintained strong asset quality metrics, with net charge-offs declining both on a late quarter and year-over-year basis [7][19] - The CET1 capital ratio remained stable at 11%, with an improved CET1 ratio including AOCI at 9.4% [12] Q&A Session Summary Question: Revenue growth expectations for 2026 - Management indicated that revenue growth is expected to more than double in 2026 compared to 2025, with both net interest income and fee income contributing to this growth [32][34] Question: Deposit pricing outlook with Fed rate cuts - Management expressed optimism about deposit pricing and growth momentum, anticipating improvements in interest-bearing deposit beta due to recent Fed rate cuts [38][40] Question: Credit quality perspective - Management stated that overall credit quality remains strong, with a focus on high-quality assets in both wholesale and consumer spaces [70][73] Question: Capital levels and buyback flexibility - Management confirmed flexibility in buybacks, with a target of $750 million for the fourth quarter, while maintaining a conservative capital structure [78] Question: Non-accrual loans and First Brands exposure - Management acknowledged that the increase in non-accrual loans includes exposure to First Brands, which has been accounted for in the forward guidance [87][90]

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **Financial Services** industry, particularly the impact of **Artificial Intelligence (AI)** on various sectors including banking, insurance, payment processing, asset management, and real estate [2][3][4][25]. Core Insights and Arguments 1. **AI Adoption Trends**: There is a notable increase in discussions about AI in financial earnings calls, with approximately **11%** of all financial earnings calls in Q1 2025 mentioning AI, marking a significant rise since early 2023 [11][12]. 2. **Cost Savings and Efficiency**: Analysts are optimistic about AI's potential to drive material expense savings and operational efficiencies across financial sectors. Early applications include improved chatbots, credit quality monitoring, and claims processing [3][4][25]. 3. **Generative AI Impact**: Generative AI is expected to transform the fintech landscape through personalized consumer experiences, cost-efficient operations, better compliance, dynamic forecasting, and enhanced customer interactions [4][5]. 4. **Investment in AI**: Larger, established firms are better positioned to capitalize on AI due to their scale and investment capacity. They are expected to invest significantly in technology to enhance operational leverage [5][20]. 5. **Sector-Specific Use Cases**: - **Banking**: AI is used for data analytics, customer experience enhancement, fraud detection, and risk management [27]. - **Insurance**: AI assists in claims processing, underwriting, and product development [3][30]. - **Payment Processors**: AI is utilized for fraud detection, credit default prediction, and operational efficiency [28]. - **Real Estate**: AI enhances tenant experiences and operational efficiencies [31]. Additional Important Insights 1. **Venture Capital Trends**: AI/ML investments are growing within financials, with a notable increase in VC spending on AI technologies, despite overall flat or declining VC investments in the sector since 2H22 [12][20]. 2. **Challenges for Smaller Firms**: Smaller financial firms may struggle to keep pace with larger competitors in AI adoption due to limited resources and investment capabilities [5][33]. 3. **Impact on Employment**: While AI is expected to improve efficiency, there are indications of reduced headcount growth in certain areas, particularly in call centers and operational roles [33][25]. 4. **Specific Company Examples**: - **JPMorgan Chase** identified **450 AI use cases** with an estimated value of **$1 billion to $1.5 billion** in potential benefits [32]. - **Bank of America** reported that its AI tool, Erica, has handled over **2.7 billion client interactions**, significantly reducing call center demands [32]. - **Goldman Sachs** uses AI to enhance engineering capabilities and improve operational tasks [32]. Conclusion The financial services industry is undergoing a significant transformation driven by AI technologies. Established firms are leading the charge, leveraging AI for operational efficiencies, enhanced customer experiences, and competitive advantages. However, smaller firms may face challenges in keeping up with these advancements. The ongoing investment in AI and its applications across various sectors will likely shape the future landscape of financial services.

Core Insights - Truist Financial (TFC) is focusing on digital innovation as a key element of its long-term growth strategy, aiming to modernize technology, accelerate client growth, deepen engagement, and expand revenue opportunities [1] Digital Account Growth - In Q2 2025, digital account openings represented 43% of all new accounts, an increase from 34% in the previous year [2][11] - Engagement metrics show that over 1.8 million clients used Truist's financial management tools, marking a 40% year-over-year increase [2] AI and Digital Tools - Truist Assist, the bank's AI-powered digital assistant, manages around 500,000 conversations monthly, enhancing speed, convenience, and scalability without a significant rise in expenses [4][11] - The integration of "LightStream by Truist" has bolstered prime digital lending, contributing to robust loan growth and net interest income stability [5][11] Advanced Analytics and Omnichannel Strategy - Truist's growth strategy incorporates advanced analytics, personalized financial insights, and omnichannel integration, enhancing client engagement and creating new revenue streams [6] - The bank ties branch modernization to digital upgrades to ensure consistent, data-driven experiences across both physical and virtual touchpoints [6] Competitive Landscape - Truist's peers, such as JPMorgan and Citigroup, are also heavily investing in AI and digital transformation to enhance efficiency and maintain competitive advantages [8] - JPMorgan is leading in AI-driven banking, while Citigroup focuses on retiring legacy systems and deploying AI chatbots for improved IT efficiency [12][13] Stock Performance - Truist's shares have increased by 19.3% over the past three months, outperforming the industry's growth of 17.2% [14]

Core Insights - Truist Financial (TFC) has launched a multi-year growth plan that combines traditional branch expansion with advanced digital banking capabilities [1][7] Branch Expansion and Renovation - Over the next five years, Truist plans to open 100 new branches and renovate over 300 existing locations in high-growth cities such as Atlanta, Austin, Charlotte, Dallas, Miami, Orlando, Philadelphia, and Washington, DC [2][10] - The new branches will feature modern designs, technology integration, and advisory spaces to better serve mass affluent and Premier clients [2] Digital Banking Growth - Digital adoption at Truist is increasing rapidly, with 43% of new accounts opened online in Q2 2025 [3][10] - The bank added approximately 37,000 new checking accounts in Q2 2025, indicating strong digital engagement [3] - Truist's digital lending franchise is bolstered by platforms like LightStream, while innovations such as AI-powered Truist Assist and the Truist Insights platform provide personalized financial guidance [3] User Experience Enhancements - Truist is introducing smarter appointment scheduling, seamless account onboarding, and advanced fraud prevention tools to enhance user experience [4] - AI-driven monitoring and identity verification are being implemented both in-branch and digitally to ensure client trust and safety [4] Commercial Banking Initiatives - Truist is investing in its business banking ecosystem with the launch of Truist Merchant Engage, which modernizes payments for small and midsize businesses [5] - This initiative aims to integrate banking and payment services, enhancing efficiency and providing actionable insights [5] Talent Expansion - The bank has strengthened its Commercial and Corporate Banking division through strategic hiring in key industries such as healthcare, energy, technology, and consumer sectors [6] - This talent expansion supports Truist's national strategy to deliver tailored solutions to complex corporate clients [6] Competitive Positioning - Truist's expansion strategy positions it against peers like PNC Financial, Fifth Third Bancorp, and Huntington, who are also aggressively growing in the Southeast and Sun Belt regions [8][9] - PNC Financial has doubled its branch network to 200, while Fifth Third plans to open 200 new branches by 2028 [9] Financial Performance - Shares of TFC have increased by 12.4% over the past three months, outperforming the industry's rally of 11.6% [11]