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Truist Financial

Truist FinancialTFCEarnings & Financial Report

NYSE · Financials · National Commercial Banks

Truist Financial Corporation is an American bank holding company headquartered in Charlotte, North Carolina. The company was formed in December 2019 as the result of the merger of BB&T and SunTrust. Its bank operates 1,928 branches in 15 states and Washington, D.C., offering consumer, commercial, and investment banking, securities brokerage, asset management, mortgage, and insurance products and services. It is the tenth-largest bank in the United States, with $523 billion in assets.

What changed in Truist Financial's 10-K — 2022 vs 2023

Top changes in Truist Financial's 2023 10-K

760 paragraphs added · 686 removed · 466 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

94 edited+52 added−25 removed89 unchanged
A detailed overview on all of the benefits Truist offers can be found on Truist’s Benefits website, Benefits.Truist.com . Truist provides market competitive total rewards to attract and retain talent while enabling Truist’s short- and long-term performance.
A detailed overview of all of the benefits Truist offers can be found on Truist’s Benefits website, Benefits.Truist.com . Truist provides market competitive total rewards to attract and retain talent while enabling Truist’s short- and long-term performance.
In addition, management has made significant investments in recent years to develop Truist’s digital platform and believes that its mobile and online applications are highly competitive in meeting clients’ expectations. Legislative, regulatory, economic, and technological changes, as well as continued consolidation within the industry, could result in increased competition from new and existing market participants.
In addition, management has made significant investments in recent years to develop Truist’s digital platform and believes that its mobile and online applications are competitive in meeting clients’ expectations. Legislative, regulatory, economic, and technological changes, as well as continued consolidation within the industry, could result in increased competition from new and existing market participants.
Truist Bank is also subject to additional state and federal laws, as well as various compliance regulations, that govern its activities, the investments it makes, and the aggregate amount of loans that may be granted to one borrower.
Truist Bank is also subject to additional state and federal laws, as well as various compliance regulations, which govern its activities, the investments it makes, and the aggregate amount of loans that may be granted to one borrower.
Specifically, the Company makes available on its Investor Relations website, under the heading “Governance & Responsibility” (i) its code of ethics for the Board, senior financial officers, and teammates, (ii) its Corporate Governance Guidelines, and (iii) the charters of the Company’s Board committees.
Specifically, the Company makes available on its Investor Relations website, under the heading “Governance & Responsibility” (i) its code of ethics for the Board, senior financial officers, and teammates, (ii) its Corporate Governance Guidelines, and (iii) the charters of the Company’s standing Board committees.
(2) Source: FDIC.gov data as of June 30, 2022. (3) As of December 31, 2022. 4 Truist Financial Corporation Competition The financial services industry is intensely competitive and constantly evolving. Management believes that Truist’s client-first approach is a competitive advantage that strengthens the Company’s ability to effectively provide financial products and services to businesses and individuals in its markets.
(2) Source: FDIC.gov data as of June 30, 2023. (3) As of December 31, 2023. 4 Truist Financial Corporation Competition The financial services industry is intensely competitive and constantly evolving. Management believes that Truist’s client-first approach is a competitive advantage that strengthens the Company’s ability to effectively provide financial products and services to businesses and individuals in its markets.
All others includes sales workers and administrative support EEO-1 job categories. Talent Development and Engagement Truist teammates have access to extensive programs and benefits for career advancement. Teammates can partner with a certified coach to help them identify and focus on potential career paths, create clear goals, and remain accountable in achieving those goals.
All others include sales workers and administrative support EEO-1 job categories. Talent Development and Engagement Truist teammates have access to extensive programs and benefits for career advancement. Teammates can partner with a certified coach to help them identify and focus on potential career paths, create clear goals, and remain accountable in achieving those goals.
This enforcement authority includes, among other things, the ability to assess significant civil or criminal monetary penalties, fines, or restitution; to issue cease and desist or removal orders; and to initiate injunctive actions against financial institutions and institution-affiliated parties. These enforcement actions may be initiated for violations of laws and regulations and unsafe or unsound practices.
This enforcement authority includes, among other things, the ability to assess significant civil or criminal monetary penalties, fines, or restitution; to issue cease and desist or prohibition orders; and to initiate injunctive actions against financial institutions and institution-affiliated parties. These enforcement actions may be initiated for violations of laws and regulations or unsafe and unsound practices.
If the Company makes changes in, or provides waivers from, the provisions of its code of ethics that the SEC requires it to disclose, the Company intends to disclose these events in the “Governance & Responsibility” section of its Investor Relations website. 16 Truist Financial Corporation Executive Officers Executive Officer Recent Work Experience Years of Service Age William H.
If the Company makes changes in, or provides waivers from, the provisions of its code of ethics that the SEC requires it to disclose, the Company intends to disclose these events in the “Governance & Responsibility” section of its Investor Relations website. Truist Financial Corporation 17 Executive Officers Executive Officer Recent Work Experience Years of Service Age William H.
These descriptions do not summarize all possible or proposed changes in laws or regulations and are not intended to be a substitute for the related statues or regulatory provisions. General As a BHC, Truist is subject to regulation under the BHCA and to regulation, examination, and supervision by the FRB.
These descriptions do not summarize all possible or proposed changes in laws or regulations and are not intended to be a substitute for the related statutes or regulatory provisions. General As a BHC, Truist is subject to regulation under the BHCA and to regulation, examination, and supervision by the FRB.
In addition, the Parent Company’s ability to make capital distributions, including paying dividends and repurchasing capital securities, is subject to the FRB’s automatic restrictions on capital distributions under the FRB’s capital rules. Truist’s risk-based capital and leverage ratio requirements are discussed above in the “Capital Requirements” section.
In addition, the Parent Company’s ability to make capital distributions, including paying dividends and repurchasing shares, is subject to the FRB’s automatic restrictions on capital distributions under the FRB’s capital rules. Truist’s risk-based capital and leverage ratio requirements are discussed above in the “Capital Requirements” section.
Privacy, Data Protection, and Cyber Security Various federal and state laws and regulations contain extensive data privacy and cybersecurity provisions, and the regulatory framework for data privacy and cybersecurity is rapidly evolving. The FRB, FDIC, and other bank regulatory agencies have adopted guidelines for safeguarding confidential, personal customer information.
Privacy, Data Protection, and Cybersecurity Various federal and state laws and regulations contain extensive data privacy, data protection and cybersecurity provisions, and the regulatory framework for data privacy, data protection and cybersecurity is rapidly evolving. The FRB, FDIC, and other bank regulatory agencies have adopted guidelines for safeguarding confidential, personal customer information.
In addition, the Patriot Act requires the federal bank regulatory agencies to consider the effectiveness of a financial institution’s anti-money laundering activities when reviewing bank mergers and BHC acquisitions. BSA/AML and Sanctions Truist continues to be subject to examinations and ongoing monitoring to assess compliance with BSA/AML laws and regulations.
In addition, the Patriot Act requires the federal bank regulatory agencies to consider the effectiveness of a financial institution’s anti-money laundering activities when reviewing bank mergers and BHC acquisitions. 12 Truist Financial Corporation BSA/AML and Sanctions Truist continues to be subject to examinations and ongoing monitoring to assess compliance with BSA/AML and OFAC laws and regulations.
The supplementary leverage ratio is calculated by dividing Tier 1 capital by total leverage exposure, which takes into account on-balance sheet assets as well as certain off-balance sheet items, including loan commitments and potential future exposure of derivative contracts. The FRB has not yet revised the well-capitalized standard for BHCs to reflect capital requirements imposed under the Basel III Rules.
The supplementary leverage ratio is calculated by dividing Tier 1 capital by total leverage exposure, which takes into account on-balance sheet assets as well as certain off-balance sheet items, including loan commitments and potential future exposure of derivative contracts. 8 Truist Financial Corporation The FRB has not yet revised the well-capitalized standard for BHCs to reflect capital requirements imposed under the Basel III Rules.
Under the Tailoring Rules, Truist is subject to the standards applicable to Category III banking organizations, which generally include BHCs with greater than $250 billion, but less than $700 billion, in total consolidated assets and less than $75 billion in certain risk-related exposures.
Truist Financial Corporation 7 Under the Tailoring Rules, Truist is subject to the standards applicable to Category III banking organizations, which generally include BHCs with greater than $250 billion, but less than $700 billion, in total consolidated assets and less than $75 billion in certain risk-related exposures.
These regulatory agencies generally have broad enforcement authority and discretion to impose restrictions and limitations on the operations of a regulated entity, including the imposition of substantial monetary penalties and nonmonetary requirements against a regulated entity where the relevant agency determines that the operations of the regulated entity or any of its subsidiaries fail to comply with applicable laws or regulations, are conducted in an unsafe or unsound manner, or represent an unfair, deceptive, or abusive act or practice.
These regulatory agencies generally have broad enforcement authority and discretion to impose restrictions and limitations on the operations of a regulated entity, including the imposition of substantial monetary penalties and nonmonetary requirements against a regulated entity where the relevant agency determines that the operations of the regulated entity or any of its subsidiaries fail to comply with applicable laws or regulations, are conducted in an unsafe or unsound manner, represent an unfair, deceptive, abusive act or practice, or do not meet supervisory expectations.
Tier 2 capital also includes, among other things, certain trust preferred securities. Truist Financial Corporation 7 Under the FRB’s capital framework for BHCs, Truist is subject to capital requirements, including the SCB, that are determined from the supervisory stress test results.
Tier 2 capital also includes, among other things, certain trust preferred securities. Under the FRB’s capital framework for BHCs, Truist is subject to capital requirements, including the SCB, that are determined from the supervisory stress test results.
Truist Bank’s uncleared swaps and security-based swaps are subject to variation margin and initial margin requirements, which have been fully phased-in across the industry as of September 2022. Broker-Dealer and Investment Adviser Regulation Truist’s broker-dealer and investment adviser subsidiaries are subject to regulation by the SEC. FINRA is the primary self-regulatory organization for Truist’s registered broker-dealer subsidiaries.
The NFA is the primary self-regulatory organization for Truist’s swap dealer. Truist Bank’s uncleared swaps and security-based swaps are subject to variation margin and initial margin requirements, which have been fully phased-in across the industry as of September 2022. Broker-Dealer and Investment Adviser Regulation Truist’s broker-dealer and investment adviser subsidiaries are subject to regulation by the SEC.
Truist Financial Corporation 9 In addition, failure to meet capital requirements may cause an institution to be directed to raise additional capital. Federal law further mandates that the agencies adopt safety and soundness standards generally relating to operations and management, asset quality and executive compensation, and authorizes administrative action against an institution that fails to meet such standards.
In addition, failure to meet capital requirements may cause an institution to be directed to raise additional capital. Federal law further mandates that the agencies adopt safety and soundness standards generally relating to operations and management, asset quality, and executive compensation; and authorizes administrative action against an institution that fails to meet such standards.
Based on Truist’s 2022 pay equity study, the average salary of female teammates is 98% of male teammates, and the average salary of racially diverse teammates is 100% of non-racially diverse teammates.
Based on Truist’s 2023 pay equity study, the average salary of female teammates is 98% of male teammates, and the average salary of racially diverse teammates is 100% of non-racially diverse teammates.
The federal consumer financial protection laws that are subject to the CFPB’s supervision and enforcement powers include, among others, the Truth in Lending Act, Truth in Savings Act, HMDA, Fair Credit Reporting Act, Electronic Funds Transfer Act, Real Estate Settlement Procedures Act, Fair Debt Collection Practices Act, Equal Credit Opportunity Act, and Fair Housing Act.
The federal consumer financial protection laws that are subject to the CFPB’s supervision and enforcement powers include, among others, the Truth in Lending Act, Truth in Savings Act, Home Mortgage Disclosure Act, Fair Credit Reporting Act, Electronic Funds Transfer Act, Real Estate Settlement Procedures Act, Fair Debt Collection Practices Act, Equal Credit Opportunity Act, and Fair Housing Act.
Truist aims to provide teammates an inclusive and energizing environment that empowers teammates to learn, grow, and have meaningful careers. Truist’s Compensation and Human Capital Committee oversees Truist’s compensation and benefit programs consistent with its compensation philosophy.
Truist aims to provide teammates an inclusive and energizing environment that empowers teammates to learn, grow, and have meaningful careers. Truist Financial Corporation 15 Truist’s Compensation and Human Capital Committee oversees Truist’s compensation and benefit programs consistent with its compensation philosophy.
If the full countercyclical buffer amount is implemented, Truist and Truist Bank would be required to maintain a CET1 capital ratio of at least 9.5%, a Tier 1 capital ratio of at least 11.0%, and a Total capital ratio of at least 13.0% to avoid limitations on capital distributions and certain discretionary incentive compensation payments.
If the full countercyclical buffer amount is implemented, Truist would be required to maintain a CET1 capital ratio of at least 9.9%, a Tier 1 capital ratio of at least 11.4%, and a Total capital ratio of at least 13.4% to avoid limitations on capital distributions and certain discretionary incentive compensation payments.
To be considered “well managed” under this rating system, a firm must be rated “broadly meets expectations” or “conditionally meets expectations” for each of its three component ratings. The results of examinations by any of Truist’s federal bank regulators potentially can result in the imposition of significant limitations on Truist’s activities and growth.
To be considered “well managed” under this rating system, a firm must be rated “broadly meets expectations” or “conditionally meets expectations” for each of its three component ratings. 6 Truist Financial Corporation The results of examinations by any of Truist’s federal bank regulators can result in the imposition of significant limitations on Truist’s activities and growth.
Truist Bank, Truist’s largest subsidiary, was chartered in 1872 and is the oldest bank headquartered in North Carolina. Truist Bank provides a wide range of banking and trust services for clients through 2,123 offices as of December 31, 2022 and its digital platform.
Truist Bank, Truist’s largest subsidiary, was chartered in 1872 and is the oldest bank headquartered in North Carolina. Truist Bank provides a wide range of banking and trust services for clients through 2,001 offices as of December 31, 2023 and its digital platform.
Congress has recently considered, and is currently considering various proposals for more comprehensive data privacy and cybersecurity legislation, to which we may be subject if passed.
Congress has recently considered, and is currently considering various proposals for, more comprehensive data privacy, data protection, and cybersecurity legislation, to which Truist may be subject to if passed.
DIF Assessments Truist Bank’s deposits are insured by the FDIC up to the applicable limits, which is currently $250,000 per account ownership type.
Truist Financial Corporation 11 DIF Assessments Truist Bank’s deposits are insured by the FDIC up to the applicable limits, which is currently $250,000 per account ownership type.
Truist Financial Corporation 5 The scope of the laws and regulations, and the intensity of the supervision to which Truist is subject have increased in recent years, initially in response to the financial crisis, and more recently in light of other factors, including technological factors, market changes, climate change concerns, as well as increased scrutiny and possible denials of bank mergers and acquisitions by federal bank regulators.
The scope of the laws and regulations, and the intensity of the supervision to which Truist is subject have increased in recent years, initially in response to the financial crisis, and more recently in light of other factors, including the banking turmoil in early 2023, technological factors, market changes, climate change concerns, as well as increased scrutiny and possible denials of bank mergers and acquisitions by federal bank regulators.
In October 2022, the FDIC adopted a final rule to increase initial base deposit insurance assessment rate schedules uniformly by 2 basis points, beginning on January 1, 2023. This rule is expected to increase Truist’s regulatory premiums by approximately $100 million annually. The FDIC also concurrently maintained the Designated Reserve Ratio for the DIF at 2%.
In October 2022, the FDIC adopted a final rule to increase initial base deposit insurance assessment rate schedules uniformly by 2 basis points, beginning on January 1, 2023. This rule increased Truist’s regulatory premiums in 2023 by approximately $120 million. The FDIC also concurrently maintained the Designated Reserve Ratio for the DIF at 2%.
Rogers, Jr. Chairman and Chief Executive Officer Chairman since March 2022. Chief Executive Officer since September 2021. President and Chief Operating Officer from December 2019 to September 2021. Previously SunTrust Chairman and Chief Executive Officer from January 2012 to December 2019. 42* 65 Michael B. Maguire Senior Executive Vice President and Chief Financial Officer Chief Financial Officer since September 2022.
Rogers, Jr. Chairman and Chief Executive Officer Chairman since March 2022. Chief Executive Officer since September 2021. President and Chief Operating Officer from December 2019 to September 2021. Previously SunTrust Chairman and Chief Executive Officer from January 2012 to December 2019. 43* 66 Michael B. Maguire Senior Executive Vice President and Chief Financial Officer Chief Financial Officer since September 2022.
The FRB assigned Truist an SCB of 2.5%, which is effective from October 1, 2022 to September 30, 2023, at which point a revised SCB will be calculated and provided to Truist.
The FRB assigned Truist an SCB of 2.9%, which is effective from October 1, 2023 to September 30, 2024, at which point a revised SCB will be calculated and provided to Truist.
Truist Bank provisionally registered with the CFTC as a swap dealer, subjecting Truist Bank to requirements under the CFTC’s regulatory regime, including trade reporting and recordkeeping requirements, business conduct requirements (including daily valuations, disclosure of material risks associated with swaps and disclosure of material incentives and conflicts of interest), and mandatory clearing and exchange trading requirements for certain standardized swaps designated by the CFTC.
Truist Bank is registered with the CFTC as a swap dealer and conditionally registered with the SEC as a security-based swap dealer, subjecting Truist Bank to requirements under the CFTC’s and SEC’s regulatory regime, including trade reporting and recordkeeping requirements, business conduct requirements (including daily valuations, disclosure of material risks associated with swaps and disclosure of material incentives and conflicts of interest), and mandatory clearing and exchange trading requirements for certain standardized swaps designated by the CFTC.
Truist Financial Corporation 15 Truist’s benefits program for qualified teammates include a company-funded defined benefit pension plan, a 401(k) Plan, an employee stock purchase plan, Truist Momentum financial well-being education, healthcare and insurance benefits, Lifeforce lifestyle program, well-being and mental well-being support, paid time off, teammate and family resources such as child-care centers and family care resources, tuition assistance, and on-site services such as health centers and fitness centers.
Truist’s benefits program for qualified teammates includes a company-funded defined benefit pension plan, a 401(k) Plan, an employee stock purchase plan, Truist Momentum financial well-being education, healthcare and insurance benefits, Lifeforce physical well-being program, mental well-being support, paid time off, teammate and family resources such as access to backup child-care centers and family care resources, tuition assistance, and on-site services such as health centers and fitness centers.
In addition, in November 2021, the FRB, OCC, and FDIC adopted a new regulation that, among other things, requires a banking organization to notify its primary federal regulators within 36 hours after identifying a “computer-security incident” that the banking organization believes in good faith could materially disrupt or degrade its business or operations in a manner that would, among other things, jeopardize the viability of its operations, result in customers being unable to access their deposit and other accounts, result in a material loss of revenue, profit or franchise value, or pose a threat to the financial stability of the U.S.
In November 2021, the FRB, OCC, and FDIC adopted a new regulation that, among other things, requires a banking organization to notify its primary federal regulators as soon as possible and within 36 hours after identifying a “computer-security incident” that the banking organization believes in good faith is reasonably likely to materially disrupt or degrade its business or operations in a manner that would, among other things, jeopardize the viability of its operations, result in customers being unable to access their deposit and other accounts, result in a material loss of revenue, profit or stock price, or pose a threat to the financial stability of the U.S.
These laws and regulations are designed to protect the financial system by requiring financial institutions to develop and implement BSA/AML programs designed to detect, deter, and prevent the use of the financial system to facilitate the funding of illicit and criminal activities.
These laws and regulations are designed to protect the financial system, consumers and financial institutions from bad actors and illicit activities by requiring financial institutions to develop and implement BSA/AML programs designed to deter and when possible detect and prevent the use of the financial system to facilitate the funding of criminal activities.
Truist Financial Corporation 13 FDIC Recordkeeping Requirements Truist is subject to certain enhanced deposit insurance recordkeeping requirements adopted by the FDIC.
FDIC Recordkeeping Requirements Truist is subject to certain enhanced deposit insurance recordkeeping requirements adopted by the FDIC.
Examinations by Truist’s regulators consider not only compliance with applicable laws, regulations, and supervisory policies of the agency, but also capital levels, asset quality, risk management effectiveness, the ability and performance of management, and the board of directors, the effectiveness of internal controls, earnings, liquidity, and various other factors. Following those examinations, Truist and Truist Bank are assigned supervisory ratings.
Examinations by regulators consider not only compliance with applicable laws, regulations, and supervisory policies of the agency, but also capital levels, asset quality, risk management effectiveness, the ability and performance of management and the board of directors, the effectiveness of internal controls, earnings, liquidity, and various other factors.
These reviews and engagements could change the standards for bank mergers. Other Safety and Soundness Regulations The FRB has supervisory and enforcement powers over BHCs and their nonbanking subsidiaries. The FRB has authority to prohibit activities that represent unsafe or unsound practices or constitute violations of law, rule, regulation, administrative order, or written agreement with a federal regulator.
Other Safety and Soundness Regulations The FRB has supervisory and enforcement powers over BHCs and their nonbanking subsidiaries. The FRB has authority to prohibit activities that represent unsafe or unsound practices or constitute violations of law, rule, regulation, administrative order, or written agreement with a federal regulator.
The FDIC issued a policy statement in June 2021 announcing that it will resume requiring bank level resolution plans for large banks, including Truist Bank, and that such bank-level resolution plans will have more streamlined content requirements than previous requirements.
The FDIC issued a policy statement in June 2021 announcing that it will resume requiring bank level resolution plans for large banks, including Truist Bank, and that such bank-level resolution plans will have more streamlined content requirements than previous requirements. Truist Bank submitted its inaugural IDI resolution plan to the FDIC in November 2022.
In addition, various U.S. regulators, including the FRB and the SEC, have increased their focus on cyber security through guidance, examinations, and regulations. At the federal level, the GLBA requires financial institutions to implement policies and procedures regarding the disclosure of nonpublic personal information about consumers to non-affiliated third parties.
In addition, various U.S. regulators, including the FRB and the SEC, have increased their focus on cybersecurity through guidance, examinations, and regulations. At the federal level, the Gramm-Leach-Bliley Act requires financial institutions to, among other things, implement policies and procedures regarding the disclosure of nonpublic personal information about consumers to non-affiliated third parties.
Human Capital Truist works as One Team—unified by its purpose, mission, and values—to deliver real care by meeting clients’ needs, uplifting communities, and empowering teammates.
Human Capital Truist works as One Team—unified by its purpose, mission, and values—to deliver real care by meeting clients’ needs, uplifting communities, empowering teammates, and promoting effective risk and controls management to drive performance.
In general, the statute requires explanations to consumers on policies and procedures regarding the disclosure of such nonpublic personal information and, except as otherwise required by law, prohibits disclosing such personal information except as provided in the banking subsidiary’s policies and procedures.
In general, the statute requires that financial institutions provide explanations to consumers on their policies and procedures regarding the disclosure of such nonpublic personal information and, except as otherwise required by law, prohibits disclosing such personal information except as provided in the financial institution’s policies and procedures.
Chief Client Experience Officer from August 2016 to November 2018. 24 46 * Reflects combined years of service at Truist and SunTrust. Truist Financial Corporation 17
Chief Client Experience Officer from August 2016 to November 2018. 25 47 * Reflects combined years of service at Truist and SunTrust. 18 Truist Financial Corporation
ITEM 1. BUSINESS Truist Financial Corporation is a purpose-driven financial services company committed to inspiring and building better lives and communities. Truist has leading market share in many high-growth markets in the country. The Company offers a wide range of services. Headquartered in Charlotte, North Carolina, Truist is a top 10 U.S. commercial bank.
ITEM 1. BUSINESS Truist Financial Corporation is a purpose-driven financial services company committed to inspiring and building better lives and communities. As a leading U.S. commercial bank, Truist has leading market share in many of the high-growth markets across the country.
The following table reflects examples of services provided by Truist: Table 1: Services Consumer Services: Commercial Services: Asset management Asset based lending Automobile lending Asset management Credit card lending Commercial deposit and treasury services Consumer finance Commercial lending Home equity and other direct retail lending Floor plan lending Home mortgage lending Derivatives Insurance Institutional trust services Investment brokerage services Insurance Mobile/online banking Insurance premium finance Payment solutions International banking Point-of-sale lending Investment banking and capital markets services Retail and small business deposit products Leasing Small business lending Merchant services Student lending Mortgage warehouse lending Wealth management/private banking Payment solutions Real estate lending Supply chain financing Market Area The following table reflects Truist’s deposit market share and branch locations by state: Table 2: Deposit Market Share and Branch Locations by State % of Truist’s Deposits (2) Deposit Market Share Rank (2) Number of Branches (3) Florida 23 % 3rd 472 Georgia 19 1st 222 Virginia 15 2nd 286 North Carolina (1) 13 1st 297 Maryland 7 3rd 155 Tennessee 5 4th 108 Pennsylvania 4 8th 157 South Carolina 4 3rd 99 Texas 2 22nd 106 West Virginia 2 1st 48 Kentucky 2 4th 61 Washington, D.C. 2 5th 24 Alabama 1 7th 59 New Jersey 1 25th 23 Other states NA NA 6 (1) Deposit market share rank excludes home office deposits.
The following table reflects examples of services provided by Truist: Table 1: Services Consumer Services: Commercial Services: Asset management Asset based lending Automobile lending Asset management Credit card lending Commercial deposit and treasury services Consumer finance Commercial lending Home equity and other direct retail lending Floor plan lending Home mortgage lending Derivatives Insurance Institutional trust services Investment brokerage services Insurance Mobile/online banking Insurance premium finance Payment solutions International banking Point-of-sale lending Investment banking and capital markets services Retail and small business deposit products Leasing Small business lending Merchant services Wealth management/private banking Mortgage warehouse lending Payment solutions Real estate lending Supply chain financing Market Area The following table reflects Truist’s deposit market share and branch locations by state: Table 2: Deposit Market Share and Branch Locations by State % of Truist’s Deposits (2) Deposit Market Share Rank (2) Number of Branches (3) Florida 23 % 3rd 452 Georgia 19 1st 213 Virginia 15 2nd 265 North Carolina (1) 13 2nd 285 Maryland 7 3rd 145 Tennessee 5 4th 100 Pennsylvania 4 9th 146 South Carolina 4 3rd 98 Texas 3 21st 99 West Virginia 2 1st 43 Kentucky 2 4th 55 Washington, D.C. 1 5th 22 Alabama 1 6th 51 New Jersey 1 24th 21 Other states NA NA 6 (1) Deposit market share rank excludes home office deposits.
The standards by which bank and financial institution acquisitions are evaluated are under review. Among other things, in July 2021, an executive order was issued on competition that requires the banking agencies to review the standards for bank mergers, and the Department of Justice has announced that it is reviewing its bank merger guidelines.
The standards by which bank and financial institution acquisitions are evaluated are under review. Among other things, in July 2021, an executive order was issued on competition that requires the banking agencies to review the standards for bank mergers.
The FRB is required to announce the results of its supervisory stress tests by June 30, 2023. In addition to the CCAR stress testing for Truist, Truist Bank conducts company-run stress tests on an annual basis, while only required biennially. Liquidity Requirements Certain BHCs and their bank subsidiaries, including Truist and Truist Bank, are subject to a minimum LCR.
In addition to the CCAR stress testing for Truist, Truist Bank conducts company-run stress tests on an annual basis, while only required biennially. Liquidity Requirements Certain BHCs and their bank subsidiaries, including Truist and Truist Bank, are subject to a minimum LCR and NSFR.
In addition, Truist is also subject to prohibitions with respect to engaging in financial transactions with certain individuals, entities, and countries as prohibited by the OFAC regulator of the U.S. Treasury. Truist Financial Corporation 11 Federal law grants substantial enforcement powers to federal financial institution regulators, OFAC and law enforcement agencies with respect to AML laws and regulations.
In addition, Truist is also prohibited from engaging in financial transactions with certain individuals, entities, and countries under programs administered by the OFAC of the U.S. Treasury. Federal law grants substantial enforcement powers to federal financial institution regulators, OFAC and the U.S. Department of Justice, among other government agencies, with respect to AML and OFAC laws and regulations.
The FRB may require BHCs, including Truist, to maintain capital ratios in excess of mandated minimum levels, depending upon general economic conditions and a BHC’s particular condition, risk profile, and growth plans.
The FRB may require BHCs, including Truist, to maintain capital ratios in excess of mandated minimum levels, depending upon general economic conditions and a BHC’s particular condition, risk profile, and growth plans. In July 2023, the U.S. banking regulators issued a proposal to revise the risk-based capital standards applicable to the Company and Truist Bank.
(Beau) Cummins, III Vice Chair Vice Chair since September 2021. Head of the Corporate and Institutional Group from December 2019 to August 2021. Previously SunTrust Co-Chief Operating Officer and Wholesale Segment Executive since February 2018. SunTrust Corporate Executive Vice President and Wholesale Segment Executive from 2017 to February 2018. 17* 60 Ellen M.
Head of the Corporate and Institutional Group from December 2019 to August 2021. Previously SunTrust Co-Chief Operating Officer and Wholesale Segment Executive since February 2018. SunTrust Corporate Executive Vice President and Wholesale Segment Executive from 2017 to February 2018. 18* 61 Scott A.
The following table presents a summary of teammates as of December 31, 2022: Table 3: Teammate Summary # of Teammates % of Population Full-Time 52,848 95.9 % Part-Time 2,278 4.1 Total 55,126 100.0 % Truist also leverages a skilled contingent workforce, which is not reflected in the table, as an important part of the Company’s overall workforce strategy.
The following table presents a summary of teammates as of December 31, 2023: Table 3: Teammate Summary # of Teammates % of Population Full-Time 49,037 96.5 % Part-Time 1,795 3.5 Total 50,832 100.0 % Truist also leverages a skilled contingent workforce, which is not reflected in the table, as an important part of the Company’s overall workforce strategy.
Truist’s broker-dealer and investment adviser subsidiaries also are subject to additional regulation by states or local jurisdictions.
FINRA is the primary self-regulatory organization for Truist’s registered broker-dealer subsidiaries. Truist’s broker-dealer and investment adviser subsidiaries also are subject to additional regulation by states or local jurisdictions.
Available stable funding represents a weighted measure of a company’s funding sources over a one-year time horizon, calculated by applying standardized weightings to the company’s equity and liabilities based on their expected stability. Required Stable Funding is calculated by applying standardized weightings to assets, derivatives exposures and certain other items based on their liquidity characteristics.
The NSFR, calculated as the ratio of available stable funding to required stable funding, must exceed 1.0x. Available stable funding represents a weighted measure of a company’s funding sources over a one-year time horizon, calculated by applying standardized weightings to the company’s equity and liabilities based on their expected stability.
Table 4: Teammate Diversity (1) Gender Race / Ethnicity Female Male Caucasian Black/African American Hispanic or Latino Asian American Indian/Alaska Native Native Hawaiian/Other Pacific Islander Two or More Races Executive Leadership & senior leaders 28.6 % 71.4 % 80.9 % 7.3 % 4.5 % 5.5 % 0.5 % — % 1.3 % First / mid-level managers 52.3 47.7 74.0 12.1 7.0 4.7 0.3 0.2 1.7 Professionals 45.9 54.1 71.4 12.3 5.1 9.2 0.4 0.1 1.5 All others 77.3 22.7 54.1 24.5 13.8 4.0 0.8 0.4 2.4 All teammates 63.5 36.5 62.7 18.7 10.0 5.7 0.6 0.3 2.0 (1) Source: EEO-1 data as of December 31, 2021.
Table 4: Teammate Diversity (1) Gender Race / Ethnicity Female Male Caucasian Black/African American Hispanic or Latino Asian American Indian/Alaska Native Native Hawaiian/Other Pacific Islander Two or More Races Executive management & senior leaders 27.7 % 72.3 % 82.9 % 7.5 % 3.8 % 4.3 % 0.3 % — % 1.2 % First / mid-level managers 52.8 47.2 70.3 13.5 7.8 6.0 0.4 0.1 1.9 Professionals 48.3 51.7 66.2 15.6 6.0 9.6 0.5 0.2 1.9 All others 75.7 24.3 53.8 23.9 14.3 3.9 0.8 0.3 3.0 All teammates 62.9 37.1 60.5 19.5 10.6 6.1 0.6 0.2 2.5 (1) Source: EEO-1 data as of December 31, 2022.
Similar state laws may impose additional requirements on Truist Bank. Truist is also subject to rules and regulations issued by the Federal Trade Commission, which regulates unfair or deceptive acts or practices, including with respect to data privacy and cybersecurity. Moreover, the U.S.
Truist’s non-bank subsidiaries are also subject to rules and regulations issued by the Federal Trade Commission, which regulates unfair or deceptive acts or practices, including with respect to data privacy, data protection, and cybersecurity. Moreover, the U.S.
These laws and proposed legislation are still subject to revision or formal guidance and may be interpreted or applied in a manner inconsistent with the Company’s understanding.
These laws and regulations, as well as proposed legislation, are still subject to revision or formal guidance and may be interpreted or applied in a manner inconsistent with the Company’s understanding, which may result in further uncertainty and require Truist to incur additional costs to comply.
President, Community Banking from December 2016 to December 2019. 27 56 Dontá L. Wilson Senior Executive Vice President and Chief Retail & Small Business Banking Officer Chief Retail & Small Business Banking Officer since March 2022. Chief Digital and Client Experience Officer from November 2018 to March 2022.
Chief Risk Officer since July 2009. 41 64 Dontá L. Wilson Senior Executive Vice President and Chief Consumer & Small Business Banking Officer Chief Consumer & Small Business Banking Officer since November 2023. Chief Retail & Small Business Banking Officer from March 2022 to November 2023. Chief Digital and Client Experience Officer from November 2018 to March 2022.
The Volcker Rule regulations contain exemptions or exclusions, including for market-making, hedging, underwriting, trading in U.S. government and agency obligations and also permit certain ownership interests in certain types of funds. They also permit the offering and sponsoring of funds under certain conditions. The Volcker Rule regulations impose significant compliance obligations on banking entities.
The fundamental prohibitions of the Volcker Rule apply to banking entities of any size, including Truist and its affiliates. The Volcker Rule regulations contain exemptions or exclusions, including for market-making, hedging, underwriting, trading in U.S. government and agency obligations and also permit certain ownership interests in certain types of funds.
Failure to meet capital guidelines may subject a banking organization to a variety of other enforcement remedies, including additional substantial restrictions on its operations and activities, termination of deposit insurance by the FDIC and, under certain conditions, the appointment of a conservator or receiver.
Failure to meet capital guidelines may subject a banking organization to a variety of other enforcement remedies, including additional substantial restrictions on its operations and activities, termination of deposit insurance by the FDIC and, under certain conditions, the appointment of a conservator or receiver. 10 Truist Financial Corporation Transactions with Affiliates There are various legal restrictions on the extent to which Truist and its non-bank subsidiaries may borrow or otherwise engage in certain types of transactions with Truist Bank.
Truist’s long-term strategy encompasses both organic and inorganic growth, including mergers or acquisitions of complementary financial institutions or other businesses. Merger and Acquisition Strategy The Company operates a diverse set of business lines nationally, with strong market shares concentrated in high growth markets in the Southeast and Mid-Atlantic regions.
Merger and Acquisition Strategy The Company operates a diverse set of business lines nationally, with strong market shares concentrated in high growth markets in the Southeast and Mid-Atlantic regions.
In addition, the promulgation in 2017 of the New York Department of Financial Services Cybersecurity Regulation, which was proposed to be updated in November 2022, and the National Association of Insurance Commissioners Insurance Data Security Model Law are driving significant cybersecurity compliance activities for Truist.
Moreover, the promulgation in 2017 of the New York Department of Financial Services Cybersecurity Regulation, which was recently updated, and the National Association of Insurance Commissioners Insurance Data Security Model Law are driving significant cybersecurity compliance activities for Truist. Both of these regulations include phased compliance periods as well as attestation of compliance by certain Truist entities.
Financial institutions must also impose daily limits on overdraft charges, review and modify check-clearing procedures, prominently distinguish account balances from available overdraft coverage amounts, and ensure board and management oversight regarding overdraft payment programs. In 2022, Truist launched a new approach to the checking account experience, designed to address clients’ direct feedback, which includes no overdraft fees.
Financial institutions must also impose daily limits on overdraft charges, review and modify check-clearing procedures, prominently distinguish account balances from available overdraft coverage amounts, and ensure board and management oversight regarding overdraft payment programs.
Both of these regulations include phased compliance periods as well as attestation of compliance by Truist. Like other lenders, Truist Bank uses credit bureau data in its underwriting activities. The Fair Credit Reporting Act regulates reporting information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates, and using affiliate data for marketing purposes.
Truist Financial Corporation 13 Like other lenders, Truist Bank uses credit bureau data in its underwriting activities. The Fair Credit Reporting Act regulates reporting information to credit bureaus, prescreening individuals for credit offers, sharing of information between affiliates, and using affiliate data for marketing purposes. Similar state laws may impose additional requirements on Truist Bank.
Any change in the statutes, regulations, or regulatory policies applicable to Truist, including changes in their interpretation or implementation, could have a material effect on its business or organization.
In addition to laws and regulations, state and federal bank regulatory agencies may issue policy statements, interpretive letters, and similar written guidance applicable to Truist and its subsidiaries. Any change in the statutes, regulations, or regulatory policies applicable to Truist, including changes in their interpretation or implementation, could have a material effect on its business or organization.
In addition to banking laws and regulations, Truist is subject to various other laws and regulations, all of which directly or indirectly affect the operations and management of Truist and its ability to make distributions to shareholders. Truist and its subsidiaries are also subject to supervision and examination by multiple regulators.
In addition to banking laws and regulations, Truist is subject to various other laws and regulations, all of which directly or indirectly affect the operations and management of Truist and its ability to make distributions to shareholders. Banking and other financial services statutes, regulations, and policies are continually under review by Congress, state legislatures, and federal and state regulatory agencies.
Regulatory Considerations The regulatory framework applicable to banking organizations is intended primarily for the protection of depositors and the stability of the U.S. financial system, rather than for the protection of shareholders and creditors.
We strive to maintain constructive relationships with supervisory authorities. The regulatory and supervisory framework applicable to banking organizations is intended primarily for the protection of depositors and other customers, the DIF, the broader economy, and the stability of the U.S. financial system, rather than for the protection of shareholders and non-deposit creditors.
The CRA record of each subsidiary bank of a FHC also is assessed by the FRB in connection with reviewing any proposed acquisition or merger application.
The CRA record of each subsidiary bank of a FHC also is assessed by the FRB in connection with the review of any proposed acquisition or merger application. For its most recent CRA examination period, Truist received the highest possible overall rating of “Outstanding” from the FDIC.
For example, the FRB requires a BHC to serve as a source of financial strength to its subsidiary IDIs and to commit financial resources to support such institutions in circumstances where it might not do so otherwise. 10 Truist Financial Corporation Banking regulators also have broad supervisory and enforcement powers over Truist Bank, including the power to impose confidential supervisory actions, fines and other civil and criminal penalties, and to appoint a receiver in order to conserve the assets of Truist Bank for the benefit of depositors and other creditors.
Banking regulators also have broad supervisory and enforcement powers over Truist Bank, including the power to impose confidential supervisory actions, fines and other civil and criminal penalties, and to appoint a receiver in order to conserve the assets of Truist Bank for the benefit of depositors and other creditors.
The LCR is designed to ensure that BHCs have sufficient high-quality liquid assets to survive a significant liquidity stress event lasting for 30 calendar days.
The LCR is designed to ensure that BHCs have sufficient high-quality liquid assets to survive a significant liquidity stress event lasting for 30 calendar days. The NSFR is designed to ensure that banking organizations maintain a stable, long-term funding profile in relation to their asset composition and off-balance sheet activities.
Chief National Consumer Finance Services and Payments Officer from September 2021 to September 2022. Head of National Consumer Finance and Payments from December 2019 to August 2021. Previously SunTrust Enterprise Partnerships and Investments Executive. 20* 44 Scott Case Senior Executive Vice President and Chief Information Officer Chief Information Officer since December 2019. Previously SunTrust Chief Information Officer since February 2018.
Chief National Consumer Finance Services and Payments Officer from September 2021 to September 2022. Head of National Consumer Finance and Payments from December 2019 to August 2021. Previously SunTrust Enterprise Partnerships and Investments Executive. 21* 45 Hugh S. (Beau) Cummins, III Vice Chair and Chief Operating Officer Chief Operating Officer since November 2023. Vice Chair since September 2021.
Truist’s SEC filings are also available through the SEC’s website at sec.gov . Corporate Governance Information with respect to Truist’s Board of Directors, Executive Officers and corporate governance policies and principles is presented on Truist’s Investor Relations website, IR.Truist.com .
Investors should monitor Truist’s website, including the Investor Relations portion, in addition to its press releases, SEC filings, public conference calls, and webcasts. Corporate Governance Information with respect to Truist’s Board of Directors, Executive Officers and corporate governance policies and principles is presented on Truist’s Investor Relations website, IR.Truist.com .
The Committee provides oversight on Truist’s human capital strategy (including DEI, teammate engagement, and talent development) that supports attracting, developing, and retaining qualified teammates. Truist’s Enterprise Ethics Risk Office partners with a broad group of internal stakeholders to set standards for teammate conduct and facilitate the timely intake and routing of teammate concerns for review.
The Committee provides oversight on Truist’s human capital strategy (including DEI, teammate engagement, and talent development) that supports attracting, developing, and retaining qualified teammates. Truist’s Enterprise Ethics Office manages the Truist Code of Ethics.
In March 2022, the FDIC requested information and public input on all aspects of the existing regulatory framework that applies to bank merger transactions. Additionally, some members of Congressional leadership are closely tracking the standards for bank mergers and can be expected to engage in hearings and public statements in connection with any pending or future merger activity.
Additionally, some members of Congressional leadership are closely tracking the standards for bank mergers and can be expected to engage in hearings and public statements in connection with any pending or future merger activity. These reviews and engagements could change the standards for bank mergers. The timing of any revised standards for reviewing bank and financial institution mergers is uncertain.
Truist remains committed to increasing all dimensions of diversity across our teammate population and all levels within the organization. The following table presents a summary of diversity statistics as of December 31, 2021 using the category classifications on the U.S. Equal Employment Opportunity Commission’s EEO-1 report, which differ from those recognized internally by Truist.
This fosters an environment where teammates, business, and our communities can thrive. Truist remains committed to embracing all dimensions of diversity across our teammate population and all levels within the organization. The following table presents a summary of diversity statistics as of December 31, 2022, using the category classifications on the U.S.
This supervisory framework, including the examination reports and supervisory ratings, which are considered confidential supervisory information, could materially impact the conduct, growth, and profitability of Truist’s operations. Under the FRB’s Large Financial Institution Rating System, component ratings are assigned for capital planning, liquidity risk management, and governance and controls.
Under the FRB’s Large Financial Institution Rating System, component ratings are assigned for capital planning, liquidity risk management, and governance and controls.
As part of that effort, the team seeks to identify trends that may reflect on organizational culture and/or operational challenges and to develop solutions. The results of these efforts are regularly shared with Truist’s Executive-Level Ethics, Business Practices, and Conduct Committee and its Board of Directors.
The results of these efforts are regularly shared with Truist’s Executive-Level Ethics, Business Practices, and Conduct Committee and its Board of Directors.
In times of severe financial stress, the obligation to serve as a source of strength could cause Truist to commit significant resources to supporting Truist Bank that otherwise would be available to Truist’s creditors and shareholders. 6 Truist Financial Corporation Resolution Planning As a Category III banking organization, Truist is required to submit to the FRB and FDIC a resolution plan every three years with submissions alternating between a full resolution plan and a targeted resolution plan.
Resolution Planning As a Category III banking organization, Truist is required to submit to the FRB and FDIC a resolution plan every three years with submissions alternating between a full resolution plan and a targeted resolution plan.
The FRB also conducts CCAR and Dodd-Frank Act supervisory stress tests employing internal supervisory models on the supervisory stress scenarios.
The FRB also conducts CCAR and Dodd-Frank Act supervisory stress tests employing internal supervisory models on the supervisory stress scenarios. As a Category III banking organization, Truist is subject to supervisory stress testing on an annual basis and company-run stress testing on a biennial basis.
Truist’s subsidiaries compete actively with national, regional, and local financial services providers, including banks, thrifts, securities dealers, mortgage bankers, finance companies, financial technology companies, and insurance companies. The ability of non-banking entities, including financial technology companies, to provide services previously limited to commercial banks has increased competition.
Truist’s subsidiaries compete actively with national, regional, and local financial services providers, including banks, thrifts, credit unions, investment advisers, asset managers, securities brokers and dealers, private-equity funds, hedge funds, mortgage-banking companies, finance companies, financial technology companies, and insurance companies.
Truist will continue to pursue strategic mergers and acquisitions to enhance growth, when market conditions, business objectives, profitability, and market share considerations align to create favorable opportunities. Such opportunities might include insurance agencies, financial services businesses that strengthen Truist’s capabilities, and banks that enhance Truist’s market position.
Truist will continue to perform the appropriate due diligence on potential strategic mergers and acquisitions to enhance growth, when market conditions, business objectives, profitability, impact to capital, and market share considerations align to create favorable opportunities.
As a Category III banking organization, Truist is subject to supervisory stress testing on an annual basis and company-run stress testing on a biennial basis. 8 Truist Financial Corporation Truist is required to submit its next capital plan and the results of its own stress tests to the FRB by April 5, 2023.
Truist is required to submit its next capital plan and the results of its own stress tests to the FRB by April 5, 2024. The FRB is required to announce the results of its supervisory stress tests by June 30, 2024.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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The Company’s credit risk and credit losses can increase if the Company’s loans are concentrated in borrowers engaged in the same or similar activities or in borrowers who as a group may be uniquely or disproportionately affected by economic, market conditions, or climate change.
The Company’s credit risk and credit losses can increase if the Company’s loans are concentrated in borrowers engaged in the same or similar activities or in borrowers who as a group may be uniquely or disproportionately affected by economic conditions, market conditions, or climate change.
An increase in the number of repurchase and indemnity demands from purchasers related to representations and warranties on loans sold could result in an increase in the amount of losses for loan repurchases. Truist also bears a risk of loss from borrower defaults for multi-family commercial mortgage loans sold to FNMA.
An increase in the number of repurchase and indemnity demands from purchasers related to representations and warranties on sold loans could result in an increase in the amount of losses for loan repurchases. Truist also bears a risk of loss from borrower defaults for multi-family commercial mortgage loans sold to FNMA.
Natural and other types of disasters, including as a result of climate change, could have an adverse impact on Truist’s businesses in that such events could materially disrupt the Company’s operations or the ability or willingness of the Company’s clients to access the financial services offered by Truist, including adverse impacts on the Company’s borrowers to timely repay their loans and the value of any collateral held.
Natural and other types of disasters, including as a result of climate change, could have an adverse impact on Truist’s businesses in that such events could disrupt the Company’s operations or the ability or willingness of the Company’s clients to access the financial services offered by Truist, including adverse impacts on the Company’s borrowers to timely repay their loans and the value of any collateral held.
Some of the Company’s methods of managing risk are based upon the Company’s use of observed historical market behavior and management’s judgment. These methods may not accurately predict future exposures, which could be significantly greater than historical measures indicate. If the Company’s risk management framework proves ineffective, it could suffer unexpected losses and could be materially adversely affected.
Some of the Company’s methods of managing risk are based upon the Company’s use of observed historical market behavior and management’s judgment. These methods may not accurately predict future exposures, which could be significantly greater than historical measures indicate. If the Company’s risk management framework proves ineffective, it could suffer unexpected losses and could be adversely affected.
Truist incurs significant costs and expenses in connection with its initiatives to address the risks associated with oversight of its internal and external service providers. Truist’s failure to appropriately assess and manage these relationships, especially those involving significant banking functions, shared services or other critical activities, could materially adversely affect Truist.
Truist incurs significant costs and expenses in connection with its initiatives to address the risks associated with oversight of its internal and external service providers. Truist’s failure to appropriately assess and manage these relationships, especially those involving significant banking functions, shared services or other critical activities, could adversely affect Truist.
A material breach of the Company’s obligations as servicer or master servicer may result in contract termination if the breach is not cured within a specified period of time following notice, which can generally be given by the securitization trustee or a specified percentage of security holders, causing the Company to lose servicing income.
A material breach of the Company’s obligations as servicer may result in contract termination if the breach is not cured within a specified period of time following notice, which can generally be given by the securitization trustee or a specified percentage of security holders, causing the Company to lose servicing income.
Furthermore, any failure or perceived failure by the Company to comply with applicable privacy or data protection laws, rules and regulations may subject it to inquiries, examinations and investigations that could result in requirements to modify or cease certain operations or practices, significant liabilities or regulatory fines, penalties or other sanctions.
Furthermore, any failure or perceived failure by the Company to comply with applicable data privacy, data protection, or cybersecurity laws, rules, or regulations may subject it to inquiries, examinations and investigations that could result in requirements to modify or cease certain operations or practices, significant liabilities or regulatory fines, penalties, or other sanctions.
In addition to repurchase claims from GSEs, Truist could be subject to indemnification claims from non-GSE purchasers of the Company’s loans. Claims could be made if the loans sold fail to conform to statements about their quality, the manner in which the loans were originated and underwritten or their compliance with state and federal law.
In addition to repurchase claims from GSEs, Truist could be subject to indemnification claims from non-GSE purchasers of the Company’s mortgage loans. Claims could be made if the loans sold fail to conform to statements about their quality, the manner in which the loans were originated and underwritten or their compliance with state and federal law.
These types of laws, rules and regulations could prohibit or significantly restrict financial services firms such as Truist from sharing information among affiliates or with third parties such as vendors, and thereby increase compliance costs, or could restrict Truist’s use of personal data when developing or offering products or services to clients.
These types of laws, rules and regulations could prohibit or significantly restrict financial services firms such as Truist from sharing information among affiliates or with third parties such as vendors, and thereby increase compliance costs, or could restrict Truist’s use of personal information when developing or offering products or services to clients.
Findings from self-identified or regulatory reviews may require responsive actions, including increased investments in compliance systems and teammates or the payment of fines, penalties, increased regulatory assessments or client redress and may increase legal or reputational risk exposures. Talent Management Risks Truist depends on the expertise of key teammates.
Findings from self-identified or regulatory reviews may require responsive actions, including increased investments in compliance systems and teammates or the payment of fines, penalties, increased regulatory assessments or client redress and may increase legal or reputational risk exposures. Talent Management Risks Truist depends on the experience and expertise of key teammates.
Truist’s businesses could be materially and adversely affected by the ineffective implementation of business decisions; any failure to institute controls that appropriately address risks associated with business activities; or to appropriately train teammates with respect to those risks and controls; or staffing shortages, particularly in tight labor markets.
Truist’s businesses could be adversely affected by the ineffective implementation of business decisions; any failure to institute controls that appropriately address risks associated with business activities; or to appropriately train teammates with respect to those risks and controls; or staffing shortages, particularly in tight labor markets.
In addition, the Company may be required to indemnify the securitization trustee against losses from any failure by the Company, as a servicer or master servicer, to perform the Company’s servicing obligations or any act or omission on the Company’s part that involves willful misfeasance, bad faith, or gross negligence.
In addition, the Company may be required to indemnify the securitization trustee against losses from any failure by the Company, as a servicer, to perform the Company’s servicing obligations or any act or omission on the Company’s part that involves willful misfeasance, bad faith, or gross negligence.
The Company’s ability to execute its business strategy and provide high quality service may suffer if the Company is unable to recruit or retain a sufficient number of qualified teammates or if the costs of employee compensation or benefits increase substantially.
The Company’s ability to execute its business strategy and provide high quality service may suffer if the Company is unable to recruit, develop, or retain a sufficient number of qualified teammates or if the costs of employee compensation or benefits increase substantially.
Any disruption in such services provided by these third parties or any failure of these third parties to handle current or higher volumes of use could adversely affect the Company’s ability to deliver products and services to clients, to support teammates and otherwise to conduct business.
Disruption in services provided by these third parties or any failure of these third parties to handle current or higher volumes of use could adversely affect the Company’s ability to deliver products and services to clients, to support teammates and otherwise to conduct business.
The ultimate resolution of a pending legal proceeding or significant regulatory or government action against the Company could materially adversely affect the Company’s results of operations and financial condition or cause significant reputational harm, which may adversely impact the Company’s business prospects.
The ultimate resolution of a pending legal proceeding or significant regulatory or government action against the Company could adversely affect the Company’s results of operations and financial condition or cause significant reputational harm, which may adversely impact the Company’s business prospects.
In determining whether to approve a proposed bank or BHC acquisition, bank regulators will consider, among other factors, the effect of the acquisition on competition; financial condition and future prospects, including current and projected capital ratios and levels; the competence, experience and integrity of management; record of compliance with laws and regulations; the convenience and needs of the communities to be served, including the acquiring institution’s record of compliance under the CRA; the effectiveness of the acquiring institution in combating money laundering activities; and public comments from various stakeholders.
In determining whether to approve a proposed bank or BHC acquisition, bank regulators will consider, among other factors, the effect of the acquisition on competition; financial condition and future prospects, including current and projected capital ratios and levels; the competence, experience and integrity of management; the supervisory relationship; record of compliance with laws and regulations; the convenience and needs of the communities to be served, including the acquiring institution’s record of compliance under the CRA; the effectiveness of the acquiring institution in combating money laundering activities; and public comments from various stakeholders.
Any of the foregoing consequences could materially and adversely affect Truist’s businesses and results of operations. Enhanced regulatory and other standards for the oversight of vendors and other service providers can result in higher costs and other potential exposures.
Any of the foregoing consequences could and adversely affect Truist’s businesses and results of operations. Enhanced regulatory and other standards for the oversight of vendors and other service providers can result in higher costs and other potential exposures.
For certain investors and certain transactions, Truist may be contractually obligated to repurchase a mortgage loan or reimburse the investor for credit losses incurred on the loan as a remedy for servicing errors with respect to the loan.
For certain investors and certain transactions, Truist may be contractually obligated to repurchase a loan or reimburse the investor for credit losses incurred on the loan as a remedy for servicing errors with respect to the loan.
Deterioration in economic conditions, housing conditions, or real estate values, including as a result of climate change or natural disasters, in the markets in which the Company operates could result in materially higher credit losses.
Deterioration in economic conditions, housing conditions, or real estate values, including as a result of climate change or natural disasters, in the markets in which the Company operates could result in higher credit losses.
Changes in law or regulation in jurisdictions in which our operations are located that affect employees may also adversely affect our ability to hire and retain qualified teammates in those jurisdictions.
Changes in law or regulation in jurisdictions in which our operations are located that affect employees may also adversely affect our ability to hire, develop, and retain qualified teammates in those jurisdictions.
During periods of market stress or illiquidity, the Company’s credit risk may be further increased when it fails to realize the expected value of the collateral it holds; collateral is liquidated at prices that are not sufficient to recover the full amount owed to Truist; or counterparties are unable to post collateral, whether for operational or other reasons.
During periods of market stress or illiquidity, the Company’s credit risk may be further increased if it fails to realize the expected value of the collateral it holds; collateral is liquidated at prices that are not sufficient to recover the full amount owed to Truist; or counterparties are unable to post collateral, whether for operational or other reasons.
Reform of the financial services industry resulting from the Dodd-Frank Act, including the EGRRCPA and other legislative, regulatory, and technological changes, affect the Company’s operations.
Reform of the financial services industry resulting from the Dodd-Frank Act, including the EGRRCPA and other legislative and regulatory changes, affect the Company’s operations.
The Company’s operational and security systems and infrastructure, including computer systems, data management and internal processes, as well as those of third parties, are integral to the Company’s performance. Truist relies on numerous third-party service providers to conduct aspects of its business operations and faces operational risks relating to them.
The Company’s operational and security systems, networks, and infrastructure, including computer systems and networks, data management and internal processes, as well as those of third parties, are integral to the Company’s performance. Truist relies on numerous third-party vendors and service providers to conduct aspects of its business operations and faces operational risks relating to them.
The adoption of new technologies by competitors, including internet banking services, mobile applications, advanced ATM functionality and cryptocurrencies could require the Company to make substantial investments to modify or adapt the Company’s existing products and services or even radically alter the way Truist conducts business.
The adoption of new technologies by competitors, including internet banking services, mobile applications, advanced ATM functionality, artificial intelligence, and cryptocurrencies, could require the Company to make substantial investments to modify or adapt the Company’s existing products and services or even radically alter the way Truist conducts business.
However, the Company’s risk management measures may not be fully effective in identifying and mitigating the Company’s risk exposure in all market environments or against all types of risk, including risks that are unidentified or unanticipated, even if the frameworks for assessing risk are properly designed and implemented.
For example, the Company’s risk management measures may not be fully effective in identifying and mitigating the Company’s risk exposure in all market environments or against all types of risk, including risks that are unidentified or unanticipated, even if the frameworks for assessing risk are properly designed and implemented.
The Company may be subject to increased repurchase obligations as a result of claims made that the Company did not satisfy its obligations as a servicer or master servicer. The Company may also experience increased loss severity on repurchases, which may require a material increase to the Company’s repurchase reserve.
The Company may be subject to increased repurchase obligations as a result of claims made that the Company did not satisfy its obligations as a servicer. The Company may also experience increased loss severity on repurchases, which may require a material increase to the Company’s repurchase reserve.
Additional risks could arise from the failure of the Company or third parties to provide adequate disclosure or transparency to the Company’s clients about the personal information collected from them and the use of such information; to receive, document, and honor the privacy preferences expressed by the Company’s clients; to protect personal information from unauthorized disclosure; or to maintain proper training on privacy practices for all teammates or third parties who have access to personal information.
Additional risks could arise from the failure of the Company or third parties to provide adequate disclosure or transparency to the Company’s clients about the personal information collected from them and the use of such information; to receive, document, and honor the privacy preferences expressed by the Company’s clients; to protect personal information from unauthorized disclosure; or to maintain proper training on data privacy, data protection, or cybersecurity practices for all teammates or third parties who have access to personal information.
Complying with the laws, rules and regulations applicable to the Company’s disclosure, collection, use, sharing and storage of personal information can increase operating costs, impact the development of new products or services, and reduce operational efficiency.
Complying with the laws, rules, and regulations applicable to the Company’s disclosure, collection, use, sharing, storage, and other processing of personal information can increase operating costs, impact the development of new products or services, and reduce operational efficiency.
These differences in regulation can impair the Company’s ability to compete effectively with competitors that are less regulated and do not have similar compliance costs. The Company can face risks of non-compliance and incur higher operational and compliance costs under laws and regulations relating to anti-money laundering, economic sanctions, embargo programs, and anti-corruption.
These differences in regulation can impair the Company’s ability to compete effectively with competitors that are less regulated and do not have similar compliance costs. The Company can face risks of non-compliance and incur additional operational and compliance costs under laws relating to anti-money laundering, economic sanctions, embargo programs, and anti-corruption.
Any such losses could materially and adversely affect the Company’s results of operations and financial condition.
Any such losses could adversely affect the Company’s results of operations and financial condition.
Transition risks, including changes in consumer preferences, additional regulatory requirements or taxes and additional counterparty or client requirements, could have a material adverse impact on asset values and the financial performance of Truist’s businesses, and those of its clients. Climate change could also present incremental risks to the execution of the Company’s long-term strategy.
Transition risks, including changes in consumer preferences, additional regulatory requirements or taxes and additional counterparty or client requirements, could have an adverse impact on asset values and the financial performance of Truist’s businesses, and those of its clients. Climate change could also present incremental risks to the execution of the Company’s long-term strategy.
If assumptions or estimates underlying the Company’s financial statements are incorrect or are adjusted periodically, the Company may experience material losses. 34 Truist Financial Corporation Management has identified certain accounting policies as being critical because they require management’s judgment to ascertain the valuations of assets, liabilities, commitments, and contingencies.
If assumptions or estimates underlying the Company’s financial statements are incorrect or are adjusted periodically, the Company may experience material losses. Management has identified certain accounting policies as being critical because they require management’s judgment to ascertain the valuations of assets, liabilities, commitments, and contingencies.
If these individuals leave or change their roles without effective replacements, operations may suffer. The Company’s success depends, to a large degree, on the continued services of executive officers and other key teammates who have extensive experience in the industry.
If these individuals were to leave or change their roles without effective replacements, our business and operations may suffer. The Company’s success depends, to a large degree, on the continued services of executive officers and other key teammates who have extensive experience in the industry.
Legal proceedings against financial services firms may increase depending on factors such as market downturn, changes in law and increased regulatory scrutiny. 32 Truist Financial Corporation Heightened regulatory scrutiny or the results of an investigation or examination may lead to additional regulatory investigations or enforcement actions.
Legal proceedings against financial services firms may increase depending on factors such as market downturn, changes in law and increased regulatory scrutiny. Heightened regulatory scrutiny or the results of an investigation or examination may lead to additional regulatory investigations or enforcement actions.
In addition, to access the Company’s network, products, and services, the Company’s clients and other third parties may use personal mobile devices or computing devices that are outside of the Company’s network environment and can introduce added cybersecurity risks.
In addition, to access the Company’s systems, networks, products, and services, the Company’s clients and other third parties may use personal mobile devices or computing devices that are outside of the Company’s control and network environment and can introduce added cybersecurity risks.
Truist and Truist’s clients, regulators and other third parties, including other financial services institutions and companies engaged in data processing, have been subject to and are likely to continue to be the target of cyberattacks and similar incidents.
Truist and Truist’s clients, regulators, vendors, service providers, and other third parties, including other financial services institutions and companies engaged in data processing, have been subject to and are likely to continue to be the target of cyberattacks and other similar incidents.
Credit losses may exceed the amount of the Company’s reserves due to changing economic conditions, falling real estate prices, falling commodity prices, higher unemployment, or other factors such as changes in borrower behavior. There is no assurance that reserves will be sufficient to cover all credit losses.
Truist Financial Corporation 23 Credit losses may exceed the amount of the Company’s reserves due to changing economic conditions, falling real estate prices, falling commodity prices, higher unemployment, or other factors such as changes in borrower behavior. There is no assurance that reserves will be sufficient to cover all credit losses.
As a result of increasing consolidation, interdependence, and complexity of financial entities and technology systems, a technology failure, cyberattack or other information or security breach that significantly degrades, deletes, or compromises the systems or data of one or more financial entities could have a material impact on counterparties or other market participants.
As a result of increasing consolidation, interdependence, and complexity of financial entities and technology systems and networks, a technology failure, cyberattack or other information or security breach that significantly degrades, deletes, or compromises the systems, networks, or data of one or more financial entities could have an adverse impact on counterparties or other market participants.
These events could reduce the Company’s earnings and cause volatility in the Company’s financial results for any fiscal quarter or year and have a material adverse effect on the Company’s financial condition and results of operations.
These events could reduce the Company’s earnings and cause volatility in the Company’s financial results for any fiscal quarter or year and have an adverse effect on the Company’s financial condition and results of operations.
That scrutiny has in some cases resulted in, and could in the future lead to, the adoption of stricter laws, rules and regulations relating to the collection, use, sharing and storage of personal information.
That scrutiny has in some cases resulted in, and could in the future lead to, the adoption of stricter laws, rules and regulations relating to the disclosure, collection, use, sharing, storage, and other processing of personal information.
In addition, the public perception that a cyber-attack on the Company’s systems has been successful, whether or not this perception is correct, may damage the Company’s reputation with clients and third parties with whom the Company does business. The compromise of personal information, in particular, could result in identify theft and cause serious reputational harm.
In addition, the public perception that a cyberattack on the Company’s systems has been successful, whether or not this perception is correct, may damage the Company’s reputation with clients and third parties with whom the Company does business. The compromise of personal information, in particular, could result in identity theft and cause serious reputational harm.
Truist Financial Corporation 27 These laws and regulations and Truist’s inability to act in certain instances without receiving prior regulatory approval affect Truist’s lending practices, capital structure, investment practices, dividend policy, ability to repurchase common stock and ability to pursue strategic acquisitions, among other activities.
These laws and regulations and Truist’s inability to act in certain instances without receiving prior regulatory approval affect Truist’s lending practices, capital structure, investment practices, dividend policy, ability to repurchase common stock and ability to pursue strategic acquisitions, among other activities.
Truist will likely be subject to new and evolving data privacy laws in the U.S. and abroad, which could result in additional costs of compliance, litigation, regulatory fines, and enforcement actions.
Truist will likely be subject to new and evolving data privacy, data protection, and cybersecurity laws, rules and regulations in the U.S. and abroad, which could result in additional costs of compliance, litigation, regulatory fines, and enforcement actions.
In addition, idiosyncratic factors, as well as other factors outside of the Company’s control, such as a general market disruption or an operational problem that affects third parties, could impair the Company’s ability to access short-term funding or create an unforeseen outflow of cash due to, among other factors, draws on unfunded commitments or deposit attrition.
In addition, idiosyncratic factors, including realization of other risks described herein, as well as other factors outside of the Company’s control, such as a general market disruption or an operational problem that affects third parties, could impair the Company’s ability to access short-term or contingent funding, sources or create an unforeseen outflow of cash due to, among other factors, draws on unfunded commitments or deposit attrition.
Additionally, the Company has received indemnification requests where an investor or insurer has suffered a loss due to a breach of the servicing agreement. While the number of such claims has been small, these could increase in the future. Truist Financial Corporation 29 Truist faces substantial legal and operational risks in safeguarding personal information.
Additionally, the Company has received indemnification requests where an investor or insurer has suffered a loss due to a breach of the servicing agreement. While the number of such claims has been small, these could increase in the future. Truist faces substantial risks in safeguarding personal and other sensitive information.
Bad actors have industrialized the execution of fraud attacks with ever increasing sophistication and speed. Bad actors increasingly use sophisticated applications and techniques to perpetrate the fraud. In some cases, these individuals are associated with large criminal organizations that share tactics and strategies.
Fraud attacks across the banking sector have significantly increased in recent years. Bad actors have industrialized the execution of fraud attacks with ever increasing sophistication and speed. Bad actors increasingly use sophisticated applications and techniques to perpetrate the fraud. In some cases, these individuals are associated with large criminal organizations that share tactics and strategies.
Any of these could damage Truist’s reputation and otherwise adversely affect its businesses. In recent years, well-publicized incidents involving the inappropriate collection, use, sharing or storage of personal information have led to expanded governmental scrutiny of practices relating to the safeguarding of personal information by companies.
Any of these could damage Truist’s reputation and otherwise adversely affect its businesses. Truist Financial Corporation 33 In recent years, well-publicized incidents involving the inappropriate disclosure, collection, use, sharing, storage, and other processing of personal information have led to expanded governmental scrutiny of practices relating to the safeguarding of personal information by companies.
Additionally, a ratings downgrade could affect the Company’s ability to attract or retain funding, including deposits from commercial and corporate clients. Truist Financial Corporation 23 The Parent Company could have less access to funding sources and its liquidity could be constrained if the Bank becomes unable to pay dividends during a time of stress.
Additionally, a ratings downgrade could affect the Company’s ability to attract or retain funding, including deposits from commercial and corporate clients. The Parent Company could have less access to funding sources and its liquidity could be constrained if the Bank becomes unable to pay dividends.
Truist teammates and third parties may expose the Company to risk as a result of human error, misconduct, malfeasance, or a failure or breach of systems and infrastructure. For example, the Company’s ability to conduct business may be adversely affected by any significant disruptions, including to third parties with whom the Company interacts or relies upon.
Truist’s vendors, service providers, and other third parties may expose the Company to risk as a result of human error, misconduct, malfeasance, or a failure or breach of systems, networks, and infrastructure. For example, the Company’s ability to conduct business may be adversely affected by any significant disruptions to third parties with whom the Company interacts or relies upon.
FRB policies can: • significantly impact the cost of funds, as well as the return on assets, both of which can have an impact on interest income; • materially affect the value of financial assets and liabilities; • adversely affect borrowers through higher debt servicing costs and potentially increase the risk that they may fail to repay their loan obligations; and • artificially inflate asset values during prolonged periods of accommodative policy, which could in turn cause volatile markets and rapidly declining collateral values during times of restrictive monetary and fiscal policies.
FRB policies can: • meaningfully influence the availability and demand for loans and deposits, the rates and other terms for loans and deposits, and the conditions in equity, fixed-income, currency, and other markets; • significantly impact the cost of funds, as well as the return on assets, both of which can have an impact on interest income; • adversely affect the value of financial assets and liabilities; • adversely affect borrowers through higher debt servicing costs and potentially increase the risk that they may fail to repay their loan obligations; and • artificially inflate asset values during prolonged periods of accommodative policy, which could in turn cause volatile markets and rapidly declining collateral values during times of restrictive monetary and fiscal policies.
As cyber threats continue to evolve, the Company may be required to expend significant additional resources to continue to modify or enhance the Company’s protective measures or to investigate and remediate any information security vulnerabilities or incidents.
As cybersecurity risks continue to evolve, the Company may be required to expend significant additional resources to continue to modify or enhance the Company’s protective measures or to investigate and remediate any cybersecurity vulnerabilities or incidents.
Any of the above consequences could have significant negative effects on the U.S. economy, and, as a result, Truist’s operations and earnings. Truist could also experience more numerous and aggressive cyberattacks launched by or under the sponsorship of one or more of the adversaries in such a conflict.
Any of the above consequences could have significant negative effects on the U.S. economy, and, as a result, Truist’s operations and earnings. Truist, its service providers, and participants in the financial system could also experience increasing levels and more aggressive cyberattacks launched by or under the sponsorship of one or more of the adversaries in such a conflict.
The Company is also subject to physical risks of climate change, which could manifest in the form of asset quality deterioration and could be exacerbated by specific portfolio concentrations, and transition risks of climate change, which could manifest through longer-term shifts in market dynamics and consumer preferences and could be exacerbated in specific industries that may be more sensitive or vulnerable to a transition to a low carbon economy. 22 Truist Financial Corporation The Company may suffer losses if the value of collateral declines in stressed market conditions.
The Company is also subject to physical risks of climate change, which could manifest in the form of asset quality deterioration and could be exacerbated by specific portfolio concentrations, and transition risks of climate change, which could manifest through longer-term shifts in market dynamics and consumer preferences, and could be exacerbated in specific industries that may be more sensitive or vulnerable to a transition to a low carbon economy.
Cyberattacks may expose security vulnerabilities in the Company’s systems or the systems of third parties or other security measures that could result in the unauthorized gathering, monitoring, misuse, release, loss, or destruction of confidential, proprietary, or sensitive information.
Such incidents may expose security vulnerabilities in the Company’s systems, networks, or other security measures, or those of third parties, that could result in the unauthorized access, gathering, monitoring, misuse, release, loss, or destruction of confidential, proprietary, or other sensitive information, including personal information.
Such regulatory changes may reduce Truist’s revenues, limit the types of financial services and products it may offer, alter the investments it makes, affect the manner in which it operates its businesses, increase its litigation and regulatory costs should it fail to appropriately comply with new or modified laws and regulatory requirements and increase the ability of non-banks to offer competing financial services and products.
Such regulatory changes may reduce Truist’s revenues, limit the types of financial services and products it may offer, alter the investments it makes, affect the manner in which it operates its businesses, increase its litigation and regulatory costs and increase the ability of non-banks to offer competing financial services and products.
Truist Financial Corporation 25 The Company faces risks associated with quality, availability, and retention of key data for operational, strategic, regulatory, and compliance purposes. The Company’s financial and regulatory reporting and key business decisions are reliant on the quality, availability, and retention of data.
The Company faces risks associated with the quality, availability, and retention of key data for operational, strategic, regulatory, and compliance purposes. The Company’s financial and regulatory reporting, public disclosures, and key business decisions are reliant on the quality, availability, and retention of data, including personal information.
The Company’s business relies on the secure processing, transmission, storage, and retrieval of confidential, proprietary, and other information in the Company’s information systems and that of third parties.
The Company’s business relies on the secure collection, transmission, storage, use, retrieval, and other processing of confidential, proprietary, and other sensitive information in the Company’s information systems, networks and those of third parties.
A cyberattack could also damage the Company’s systems by introducing material disruptions to the Company’s or the Company’s clients’ or other third parties’ network access or business operations.
Such incidents could also damage the Company’s systems and networks by introducing material disruptions to the Company’s or the Company’s clients’ or other third parties’ network access or business operations.
A successful penetration or circumvention of system security could cause serious negative consequences, including loss of clients and business opportunities; costs associated with maintaining business relationships after an attack or breach; significant disruption to the Company’s operations and business; misappropriation, exposure or destruction of the Company’s confidential information, intellectual property, funds and those of the Company’s clients; damage to the Company’s or the Company’s clients’ or third parties’ computers or systems; or a violation of applicable privacy laws and other laws.
A successful penetration or circumvention of system or network security could cause serious negative consequences, including loss of clients and business opportunities; costs associated with maintaining business relationships after a cyberattack or security breach; significant disruption to the Company’s operations and business; misappropriation, exposure or destruction of the Company’s confidential, proprietary, and other sensitive information, including personal information, and funds and those of the Company’s clients; damage to the Company’s or the Company’s clients’ or third parties’ computers, systems, or networks; or a violation of applicable laws and regulations, including those related to data privacy, data protection, and cybersecurity.
An outbreak or escalation of hostilities between countries or within a country or region could have a material adverse effect on the U.S. economy and on Truist’s businesses.
An outbreak or escalation of hostilities between countries or within a country or region could have an adverse effect on the U.S. economy and on Truist’s business operations and key external parties.
Bad actors perpetuate fraudulent activity by impersonating real clients with stolen identities and account credentials, use other individuals, known as mules, to interact with Truist, or create new identities, referred to as synthetic identities. In some instances, the fraud is committed by existing clients.
Bad actors perpetuate fraudulent activity by impersonating real clients with stolen identities and account credentials, use other individuals, known as mules, to interact with Truist, or create new identities, referred to as synthetic identities. In some instances, the fraud is committed by existing clients. Truist Financial Corporation 29 Natural disasters, pandemics, and other catastrophic events could adversely impact us.
In addition, liquidity standards require the Company to maintain holdings of highly liquid investments, thereby reducing the Company’s ability to invest in less liquid assets, even if more desirable from a balance sheet return or interest rate risk management perspective.
In addition, liquidity standards require the Company to maintain holdings of highly liquid investments, thereby reducing the Company’s ability to invest in less liquid assets, even if more desirable from a balance sheet return or interest rate risk management perspective. As a Category III banking organization, Truist is subject to additional capital and liquidity requirements.
Truist continues to be subject to examinations and ongoing monitoring to assess compliance with BSA/AML laws and regulations, as well as sanctions compliance administered by the OFAC.
Truist continues to be subject to examinations and ongoing monitoring to assess compliance with BSA/AML and OFAC laws and regulations.
Regulatory and Legal Risks • The Company may incur fines, penalties and other negative consequences from regulatory violations, including inadvertent or unintentional violations. • Legal proceedings may adversely affect the Company’s results, reputation, and business operations.
Regulatory and Legal Risks • The Company may incur damages, fines, penalties, and other negative consequences from past, current, or future regulatory or other legal violations, including inadvertent or unintentional violations. • Pending or threatened legal proceedings and other matters may adversely affect the Company’s business, financial condition, results of operations, and reputation.
Truist Financial Corporation 19 Operational Risks • Truist relies on other companies to provide key components of the Company’s business infrastructure. • The Company’s framework for managing risks may not be effective. • Truist depends on the accuracy and completeness of information about clients and counterparties. • Truist can be negatively affected if it fails to identify and address operational risks associated with the introduction of or changes to products, services, and delivery platforms. • Enhanced regulatory and other standards for the oversight of vendors and other service providers can result in higher costs and other potential exposures.
Operational Risks • Truist relies extensively on other companies to provide key components of the Company’s business infrastructure, and their failure to perform to our standards or other issues of concern with them could harm us. • The Company’s framework for managing risks and mitigating losses may not be effective. • In deciding whether to extend credit or enter into other transactions with clients and counterparties, Truist depends on the accuracy and completeness of information about clients and counterparties. • Truist can be negatively affected if it fails to identify and address operational risks associated with the introduction of or changes to products, services, and delivery platforms. • Enhanced regulatory and other standards for the oversight of vendors and other service providers can result in higher costs and other potential exposures.
In addition, governmental authorities have, at times, sought criminal penalties against companies in the financial services sector for violations, and, at times, have required an admission of wrongdoing from financial institutions in connection with resolving such matters.
Any future enforcement action could have an adverse impact. In addition, governmental authorities have, at times, sought criminal penalties against companies in the financial services sector for violations, and, at times, have required an admission of wrongdoing, criminal pleas or other extraordinary terms from financial institutions in connection with resolving such matters.
The outcome of any such legal proceedings, as well as the timing of any ultimate resolutions, may be difficult to predict or estimate. Actual legal and other costs arising from claims and legal actions may be greater than the Company’s legal accruals.
The outcome of any such legal proceedings, as well as the timing of any ultimate resolutions, may be difficult to predict or estimate. Actual legal and other costs arising from claims and legal actions may be greater than the Company’s legal accruals. Further, the Company may not have accruals for all legal proceedings where we face a risk of loss.
The NSFR rule, which is designed to ensure that banking organizations maintain a stable funding profile in relation to their asset composition and off-balance sheet activities, became effective on July 1, 2021. Public disclosure of the NSFR will begin in 2023.
The liquidity standards applicable to large U.S. banking organizations have been supplemented in recent years. The NSFR rule, which is designed to ensure that banking organizations maintain a stable funding profile in relation to their asset composition and off-balance sheet activities, became effective on July 1, 2021. Public disclosure of the NSFR began in 2023.
The fair value of a reporting unit is impacted by the reporting unit’s expected financial performance and susceptibility to adverse economic, regulatory, and legislative changes. Future adverse changes in economic conditions or expected financial performance may cause the fair value of a reporting unit to be below its carrying amount, resulting in goodwill impairment.
Future adverse changes in economic conditions or expected financial performance may cause the fair value of a reporting unit to be below its carrying amount, resulting in an additional goodwill impairment charge.
The Company’s framework for managing risks may not be effective. The Company’s risk management framework seeks to mitigate risk and loss. Truist has established policies, processes, and procedures intended to identify, measure, monitor, report, and analyze the types of risk to which the Company is subject, including liquidity, credit, market, operational, technology, reputational, strategic, and compliance risk, among others.
Truist has established policies, processes, and procedures intended to identify, measure, monitor, report, and analyze the types of risk to which the Company is subject, including liquidity, credit, market, operational, technology, reputational, strategic, and compliance risk, among others.
Additionally, actual or alleged misconduct by teammates, including unethical, fraudulent, improper, or illegal conduct, or unfair, deceptive, abusive, or discriminatory practices, can result in litigation, or government investigations and enforcement actions, and cause significant reputational harm, even if ultimately unsubstantiated. Truist also relies upon third parties who may expose the Company to compliance and legal risk.
Additionally, actual or alleged misconduct by teammates, including unethical, fraudulent, improper, or illegal conduct, or unfair, deceptive, abusive, or discriminatory practices, can result in litigation, or government investigations and enforcement actions, and cause significant reputational harm to Truist, even if allegations are ultimately unsubstantiated.
Truist faces risks as a servicer of loans. The Company acts as servicer and master servicer for mortgage loans included in securitizations and for unsecuritized mortgage loans owned by investors. As a servicer or master servicer for those loans, the Company has certain contractual obligations to the securitization trusts, investors, or other third parties.
The Company acts as servicer for a range of assets and products and primarily for loans in securitizations and unsecuritized loans owned by investors. As servicer for loans, the Company has certain contractual obligations to the securitization trusts, investors, or other third parties.
The Company’s inability to monetize liquid assets or to access short-term funding or capital markets could constrain the Company’s ability to make new loans or meet existing lending commitments and could ultimately jeopardize the Company’s overall liquidity and capitalization. Truist relies on the mortgage secondary market and GSEs for some of the Company’s liquidity.
The Company’s inability to monetize liquid assets without unacceptable losses or to access short-term funding or capital markets could constrain the Company’s ability to make new loans or meet existing lending commitments and could ultimately jeopardize the Company’s overall liquidity and capitalization.
Models may be used in such processes as determining the pricing of various products, grading loans and extending credit, measuring interest rate and other market risks, predicting or estimating losses, assessing capital adequacy and calculating economic and regulatory capital levels, as well as estimating the value of financial instruments and balance sheet items.
Models may be used in such processes as determining the pricing of various products, grading loans and extending credit, measuring interest rate and other market risks, predicting or estimating losses, assessing capital adequacy and calculating economic and regulatory capital levels, as well as estimating the value of financial instruments and balance sheet items. 38 Truist Financial Corporation Poorly designed, implemented, or incorrectly used models present the risk that certain Truist business decisions may be adversely affected by inappropriate model output.
Truist’s businesses are subject to complex and evolving laws and regulations governing the privacy and protection of personal information of individuals. Individuals whose personal information may be protected by law can include the Company’s clients (and in some cases its clients’ clients), prospective clients, job applicants, teammates, and the employees of the Company’s vendors, and third parties.
Individuals whose personal information may be protected by law can include the Company’s clients (and in some cases its clients’ clients), prospective clients, job applicants, teammates, and the employees of the Company’s vendors, and other third parties.
These restrictions could also inhibit Truist’s development or marketing of certain products or services or increase the costs of offering them to clients. Differences in regulation can affect the Company’s ability to compete effectively.
These restrictions could also inhibit Truist’s development or marketing of certain products or services or increase the costs of offering them to clients.
Persistent attackers may succeed in penetrating defenses given enough resources, time, and motive. The techniques used by cyber criminals change frequently and may not be recognized until launched or well after a breach has occurred.
Even the most advanced internal control environment may be vulnerable to compromise. Persistent attackers may succeed in penetrating defenses given enough resources, time, and motive. The techniques used by cybersecurity threat actors change frequently and may not be recognized until launched or well after a breach has occurred.
Truist cannot predict the nature or timing of future changes in monetary policies or the precise effects such changes may have on the Company’s activities and financial results. 20 Truist Financial Corporation Inflation could negatively impact our business, our profitability, and our stock price.
Truist cannot predict the nature or timing of future changes in monetary policies or the precise effects such changes may have on the Company’s activities and financial results.
As is the case with any such assessments, there is always the chance that the Company will fail to identify all pertinent factors or that the Company will fail to accurately estimate the impacts of factors identified.
As is the case with any such assessments, there is always the chance that the Company will fail to identify all pertinent factors or that the Company will fail to accurately estimate the impacts of factors identified and that its allowance for loan losses may not be adequate to cover actual losses.
This could result in litigation exposure, regulatory fines, penalties, loss of confidence in the Company’s security measures, reputational damage, reimbursement or other compensatory costs, and additional compliance costs, which could adversely impact the Company’s results of operations, liquidity, and financial condition. In addition, the Company may not have adequate insurance coverage to compensate for losses from a cybersecurity event.
This could result in litigation exposure, regulatory fines, penalties, loss of confidence in the Company’s security measures, reputational damage, reimbursement or other compensatory costs, and additional compliance costs, which could adversely impact the Company’s results of operations, liquidity, and financial condition.

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Item 2. Properties

Properties — owned and leased real estate

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ITEM 2. PROPERTIES Truist’s owns its headquarters building at 214 North Tryon Street, Charlotte, NC, 28202. Truist owns or leases free-standing operations centers, with its primary operations and information technology centers located in various locations in the Southeastern and Mid-Atlantic United States.
ITEM 2. PROPERTIES Truist owns its headquarters building at 214 North Tryon Street, Charlotte, NC, 28202. Truist owns or leases free-standing operations centers, with its primary operations and information technology centers located in various locations in the Southeastern and Mid-Atlantic United States.
Management believes that these premises, in the aggregate, are well-located and suitably equipped to serve as financial services facilities. See “Note 6. Premises and Equipment” for additional disclosures. 36 Truist Financial Corporation
Management believes that these premises, in the aggregate, are well-located and suitably equipped to serve as financial services facilities. See “Note 6. Premises and Equipment” for additional disclosures. Truist Financial Corporation 41

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Truist’s common stock is traded on the NYSE under the symbol “TFC.” As of December 31, 2022, Truist’s common stock was held by 84,359 registered shareholders.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Truist’s common stock is traded on the NYSE under the symbol “TFC.” As of December 31, 2023, Truist’s common stock was held by 77,243 registered shareholders.
Redemptions During 2021, the Company redeemed all 18,000 outstanding shares of its perpetual preferred stock series F and the corresponding depositary shares representing fractional interests in such series for $450 million, all 20,000 outstanding shares of its perpetual preferred stock series G and the corresponding depositary shares representing fractional interests in such series for $500 million, and all 18,600 outstanding shares of its perpetual preferred stock series H and the corresponding depositary shares representing fractional interests in such series for $465 million.
(2) Excludes commissions. 42 Truist Financial Corporation Preferred Stock Redemptions During 2021, the Company redeemed all 18,000 outstanding shares of its perpetual preferred stock series F and the corresponding depositary shares representing fractional interests in such series for $450 million, all 20,000 outstanding shares of its perpetual preferred stock series G and the corresponding depositary shares representing fractional interests in such series for $500 million, and all 18,600 outstanding shares of its perpetual preferred stock series H and the corresponding depositary shares representing fractional interests in such series for $465 million.
The Company is a component of both indexes. The graph and table assume an initial investment of $100 was made on December 31, 2017 in each of the Company’s common stock and the two indexes, as well as reinvestment of all dividends without commissions.
The graph and table assume an initial investment of $100 was made on December 31, 2018 in each of the Company’s common stock and the two indexes, as well as reinvestment of all dividends without commissions.
The following table provides information for share repurchases as part of publicly announced plans and shares exchanged or surrendered in connection with the exercise of equity-based awards: Table 5: Share Repurchase Activity (Dollars in millions, except per share data, shares in thousands) Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as part of Publicly Announced Plans (3) Approximate Dollar Value of Shares that may yet be Purchased Under the Plans (3) October 1, 2022 to October 31, 2022 — $ — — $ 4,100 November 1, 2022 to November 30, 2022 1 46.33 — 4,100 December 1, 2022 to December 31, 2022 — — — 4,100 Total 1 46.33 — (1) Includes shares exchanged or surrendered in connection with the exercise of equity-based awards under equity-based compensation plans.
The following table provides additional information on share repurchases as part of publicly announced plans and shares exchanged or surrendered in connection with the exercise of equity-based awards: Table 5: Share Repurchase Activity (Dollars in millions, except per share data, shares in thousands) Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as part of Publicly Announced Plans Approximate Dollar Value of Shares that may yet be Purchased Under the Plans October 1, 2023 to October 31, 2023 11 $ 27.91 — $ — November 1, 2023 to November 30, 2023 — 31.96 — — December 1, 2023 to December 31, 2023 — — — — Total 11 27.93 — (1) Includes shares exchanged or surrendered in connection with the exercise of equity-based awards under equity-based compensation plans.
Management’s target common dividend payout ratio (computed by dividing common stock dividends by net income available to common shareholders) is between 30% and 50% during normal economic conditions. Truist’s common dividend payout ratio was 45% in 2022 compared to 41% in 2021 and 58% in 2020.
Management’s target common dividend payout ratio (computed by dividing common stock dividends by net income available to common shareholders) is between 30% and 50% during normal economic conditions. Truist paid $2.8 billion, $2.7 billion, and $2.5 billion in common stock dividends during 2023, 2022, and 2021, respectively.
Equity Compensation Plan Information The following table provides information about equity-based awards as of December 31, 2022: Table 6: Equity Compensation Plan Information Plan Category (a)(1)(2) Number of securities to be issued upon exercise of outstanding options, warrants and rights (b)(3) Weighted-average exercise price of outstanding options, warrants and rights (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in (a)) Approved by security holders 11,407,677 $ 35.02 41,980,866 Not approved by security holders 6,828,634 23.89 — Total 18,236,311 $ 32.22 41,980,866 (1) Includes 10,995,360 RSUs and PSUs in plans approved by security holders.
Equity Compensation Plan Information The following table provides information about equity-based awards as of December 31, 2023: Table 6: Equity Compensation Plan Information Plan Category (a) (1)(2) Number of securities to be issued upon exercise of outstanding options, warrants and rights (b) (3) Weighted-average exercise price of outstanding options, warrants and rights (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in (a)) Approved by security holders 14,230,638 $ 35.02 34,044,469 Not approved by security holders 4,650,256 33.57 — Total 18,880,894 $ 34.94 34,044,469 (1) Includes 13,818,321 RSUs and PSUs in plans approved by security holders.
(2) Plans not approved by security holders consists of 138,242 options outstanding with a weighted average exercise price of $23.89 and 6,690,392 RSUs for plans that were assumed in mergers and acquisitions and issued prior to shareholder approval of the Truist Financial Corporation 2022 Incentive Plan.
(2) Plans not approved by security holders consist of 21,821 options outstanding with a weighted average exercise price of $33.57 and 4,628,435 RSUs for plans that were assumed in mergers and acquisitions and issued prior to shareholder approval of the Truist Financial Corporation 2022 Incentive Plan. (3) Excludes RSUs and PSUs because they do not have an exercise price.
(3) Excludes RSUs and PSUs because they do not have an exercise price. 38 Truist Financial Corporation Five-Year Common Stock Performance The following graph and table compare the cumulative total shareholder return of the Company’s common stock, the S&P 500 Index, and the KBW Nasdaq Bank Index for the five-year period ended December 31, 2022.
Truist Financial Corporation 43 Five-Year Common Stock Performance The following graph and table compare the cumulative total shareholder return of the Company’s common stock, the S&P 500 Index, and the KBW Nasdaq Bank Index for the five-year period ended December 31, 2023. The Company is a component of both indexes.
The timing and exact amount of repurchases are subject to various factors, including the Company’s capital position, liquidity, financial performance, alternative uses of capital, stock trading price and general market conditions, and may be suspended or resumed at any time. During 2022, the Company repurchased 5.1 million shares of common stock totaling $250 million through open market purchases.
The timing and exact amount of repurchases are subject to various factors, including the Company’s capital position, liquidity, accounting and regulatory considerations, including any restrictions that may be imposed by the FRB, financial and operational performance, alternative uses of capital, stock trading price and general market conditions, and may be modified, extended, discontinued, or resumed at any time.
In accordance with North Carolina law, repurchased shares cannot be held as treasury stock, but revert to the status of authorized and unissued shares upon repurchase and are therefore available for future issuances. Repurchases may be affected through open market purchases, privately negotiated transactions, trading plans established in accordance with SEC rules, or other means.
Share Repurchases Truist has periodically repurchased shares of its own common stock and expects to periodically repurchase shares in the future under publicly announced repurchase plans. In accordance with North Carolina law, repurchased shares cannot be held as treasury stock, but revert to the status of authorized and unissued shares upon repurchase and are therefore available for future issuances.
During 2020, the Company redeemed all 5,000 outstanding shares of its perpetual preferred stock series K and the corresponding depositary shares representing fractional interests in such series for $500 million plus any unpaid dividends. These preferred stock redemptions were in accordance with the terms of the Company’s Articles of Incorporation. See “Note 12. Shareholders’ Equity” for information about preferred stock.
These preferred stock redemptions were in accordance with the terms of the Company’s Articles of Incorporation. See “Note 12. Shareholders’ Equity” for information about preferred stock.
Table 7: Cumulative Total Shareholder Return Invested Cumulative Total Return As of / Through December 31, 2017 2018 2019 2020 2021 2022 Truist Financial Corporation $ 100.00 $ 89.78 $ 120.77 $ 107.33 $ 135.31 $ 103.49 S&P 500 Index 100.00 95.61 125.70 148.81 191.48 156.77 KBW Nasdaq Bank Index 100.00 82.29 112.01 100.47 138.99 109.25 Truist Financial Corporation 39
Table 7: Cumulative Total Shareholder Return Invested Cumulative Total Return As of / Through December 31, 2018 2019 2020 2021 2022 2023 Truist Financial Corporation $ 100.00 $ 134.52 $ 119.55 $ 150.72 $ 115.28 $ 105.45 S&P 500 Index 100.00 131.47 155.65 200.29 163.98 207.04 KBW Nasdaq Bank Index 100.00 136.12 122.09 168.90 132.76 131.58 44 Truist Financial Corporation
Removed
Share Repurchases Truist has periodically repurchased shares of its own common stock and expects to periodically repurchase shares in the future, to the extent the Company has excess capital and does not have sufficient investment opportunities in the form of organic growth and / or acquisitions.
Added
Repurchases may be effected through open market purchases, privately negotiated transactions, trading plans established in accordance with SEC rules, or other means.
Removed
(2) Excludes commissions. (3) In July 2022, the Board of Directors approved, effective October 1, 2022, new repurchase authority to effectuate repurchases up to an aggregate of $4.1 billion in shares of the Company’s common stock through September 30, 2023.
Added
In addition to shares purchased under publicly announced repurchase plans, Truist repurchased shares in connection with the exercise of equity-based awards under equity-based compensation plans. Truist did not have any share repurchases for 2023 and repurchased $250 million and $1.6 billion in common stock in 2022 and 2021, respectively, pursuant to publicly announced repurchase plans.
Removed
Truist Financial Corporation 37 Preferred Stock Issuances During 2020, Truist issued $3.5 billion in series O, series P, series Q, and series R preferred stock, gross of issuance cost, to further strengthen its capital position.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

200 edited+134 added−147 removed99 unchanged
Truist’s SCB requirement, received in the 2022 CCAR process, is effective from October 1, 2022 to September 30, 2023. Payments of cash dividends and repurchases of common shares are the methods used to manage any excess capital generated. In addition, management closely monitors the Parent Company’s double leverage ratio (investments in subsidiaries as a percentage of shareholders’ equity).
Truist’s SCB requirement, received in the 2023 CCAR process, is effective from October 1, 2023 to September 30, 2024. Payments of cash dividends and repurchases of common shares are the methods used to manage any excess capital generated. In addition, management closely monitors the Parent Company’s double leverage ratio (investments in subsidiaries as a percentage of shareholders’ equity).
Truist seeks an appropriate return for the risk taken in its business operations. Risk-taking activities are evaluated and prioritized to identify those that present attractive risk-adjusted returns, while preserving asset value and capital. Truist’s compensation plans are designed to consider teammate’s adherence to and successful implementation of Truist’s risk values and associated policies and procedures.
Truist seeks an appropriate return for the risk taken in its business operations. Risk-taking activities must be evaluated and prioritized to identify those that present attractive risk-adjusted returns, while preserving asset value and capital. Truist’s compensation plans are designed to consider teammate’s adherence to and successful implementation of Truist’s risk values and associated policies and procedures.
The expected life of MBS will differ from contractual maturities because borrowers may have the right to call or prepay the underlying mortgage loans. 50 Truist Financial Corporation Lending Activities Truist strives to meet the credit needs of its clients while pursuing a balanced strategy of loan profitability, loan growth, and loan quality.
The expected life of MBS will differ from contractual maturities because borrowers may have the right to call or prepay the underlying mortgage loans. 56 Truist Financial Corporation Lending Activities Truist strives to meet the credit needs of its clients while pursuing a balanced strategy of loan profitability, loan growth, and loan quality.
Risk-based capital ratios, which include CET1 capital, Tier 1 capital, and Total capital are calculated based on regulatory guidance related to the measurement of capital and risk-weighted assets. 74 Truist Financial Corporation Truist regularly performs stress testing on its capital levels and is required to periodically submit the Company’s capital plans and stress testing results to the banking regulators.
Risk-based capital ratios, which include CET1 capital, Tier 1 capital, and Total capital are calculated based on regulatory guidance related to the measurement of capital and risk-weighted assets. Truist Financial Corporation 81 Truist regularly performs stress testing on its capital levels and is required to periodically submit the Company’s capital plans and stress testing results to the banking regulators.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report on Form 10-K for the year ended December 31, 2021. A description of certain factors that may affect our future results and risk factors is set forth in Part I, Item 1A-Risk Factors of this report.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report on Form 10-K for the year ended December 31, 2022. A description of certain factors that may affect our future results and risk factors is set forth in Part I, Item 1A-Risk Factors of this report.
Securitization positions are subject to Truist’s comprehensive risk management framework, which includes daily monitoring against a suite of limits. There were no off-balance sheet securitization positions during the reporting period. Correlation Trading Positions The trading portfolio of covered positions did not contain any correlation trading positions as of December 31, 2022.
Securitization positions are subject to Truist’s comprehensive risk management framework, which includes daily monitoring against a suite of limits. There were no off-balance sheet securitization positions during the reporting period. Correlation Trading Positions The trading portfolio of covered positions did not contain any correlation trading positions as of December 31, 2023.
As illustrated in the following graph, there were no Company-wide VaR backtesting exceptions during the twelve months ended December 31, 2022. The total number of Company-wide VaR backtesting exceptions over the preceding twelve months is used to determine the multiplication factor for the VaR-based capital requirement under the Market Risk Rule.
As illustrated in the following graph, there were no Company-wide VaR backtesting exceptions during the twelve months ended December 31, 2023. The total number of Company-wide VaR backtesting exceptions over the preceding twelve months is used to determine the multiplication factor for the VaR-based capital requirement under the Market Risk Rule.
Management considers a range of macroeconomic forecast data in connection with the allowance estimation process. Under the range of scenarios considered as of December 31, 2022, use of the Company’s pessimistic scenario would have resulted in an increase to the modeled allowance results of approximately $2.2 billion.
Management considers a range of macroeconomic forecast data in connection with the allowance estimation process. Under the range of scenarios considered as of December 31, 2023, use of the Company’s pessimistic scenario would have resulted in an increase to the modeled allowance results of approximately $2.2 billion.
It should be read in conjunction with the Consolidated Financial Statements, the accompanying Notes to the Consolidated Financial Statements in this Form 10-K, and other information contained in this document. For discussion of 2021 results as compared to 2020 results, see “Item 7.
It should be read in conjunction with the Consolidated Financial Statements, the accompanying Notes to the Consolidated Financial Statements in this Form 10-K, and other information contained in this document. For discussion of 2022 results as compared to 2021 results, see “Item 7.
Truist Financial Corporation 63 Principal types of inherent risk include market, credit, liquidity, technology, compliance, strategic, reputational, and operational risks. The following is a discussion of these risks. Market Risk Market risk is the risk to current or anticipated earnings, capital, or economic value arising from changes in the market value of portfolios, securities, or other financial instruments.
Principal types of inherent risk include market, credit, liquidity, technology, compliance, strategic, reputational, and operational risks. The following is a discussion of these risks. Market Risk Market risk is the risk to current or anticipated earnings, capital, or economic value arising from changes in the market value of portfolios, securities, or other financial instruments.
The commercial loan and lease portfolio consists of lending to public and private business clients and is composed of commercial and industrial, owner occupied, equipment leasing and financing, commercial real estate, government and institutional financing, and premium financing In accordance with the Company’s lending policy, each commercial loan undergoes a detailed underwriting process.
The commercial loan and lease portfolio consists of lending to public and private business clients and is composed of commercial and industrial, owner occupied, equipment leasing and financing, commercial real estate, government and institutional financing, premium financing, and dealer floor plan financing. In accordance with the Company’s lending policy, each commercial loan undergoes a detailed underwriting process.
Basis of Presentation.” Fair Value of Financial Instruments The vast majority of assets and liabilities measured at fair value on a recurring basis are based on either quoted market prices or market prices for similar instruments. Refer to “Note 18. Fair Value Disclosures” for additional disclosures regarding the fair value of financial instruments and “Note 2.
Basis of Presentation.” Truist Financial Corporation 83 Fair Value of Financial Instruments The vast majority of assets and liabilities measured at fair value on a recurring basis are based on either quoted market prices or market prices for similar instruments. Refer to “Note 18. Fair Value Disclosures” for additional disclosures regarding the fair value of financial instruments and “Note 2.
Commercial Loan and Lease Portfolio Commercial loans and leases represent the largest category of the Company’s loan and lease portfolio. Commercial Community Banking generally targets small-to-middle market businesses with annual sales between $2 million and $500 million, while CIB provides lending solutions to large corporate clients.
Commercial Loan and Lease Portfolio Commercial loans and leases represent the largest category of the Company’s loan and lease portfolio. Commercial Community Banking and small business banking generally target small-to-middle market businesses with annual sales between $2 million and $500 million, while CIB provides lending solutions to large corporate clients.
Truist Bank’s primary source of funding is client deposits. Continued access to client deposits is highly dependent on public confidence in the stability of Truist Bank and its ability to return funds to clients when requested. Truist Bank maintains a number of diverse funding sources to meet its liquidity requirements.
Continued access to client deposits is highly dependent on public confidence in the stability of Truist Bank and its ability to return funds to clients when requested. Truist Bank maintains a number of diverse funding sources to meet its liquidity requirements.
Truist Financial Corporation 59 Deposits Deposits are obtained principally from individuals and businesses within Truist’s geographic area and include noninterest-bearing checking accounts, interest-bearing checking accounts, savings accounts, money market deposit accounts, CDs, and IRAs. Deposit account terms vary with respect to the minimum balance required, the time period the funds must remain on deposit and service charge schedules.
Deposits Deposits are obtained principally from individuals and businesses within Truist’s geographic area and include noninterest-bearing checking accounts, interest-bearing checking accounts, savings accounts, money market deposit accounts, CDs, and IRAs. Deposit account terms vary with respect to the minimum balance required, the time period the funds must remain on deposit and service charge schedules.
In keeping with the belief that consistent values drive long-term behaviors, Truist’s RMO has established the following risk values which guide teammates’ day-to-day activities: • Managing risk is the responsibility of every teammate. • Proactively identifying risk and managing the inherent risks of their businesses is the responsibility of the business units. • Managing risk with a balanced approach which includes quality, profitability, and growth. • Utilizing sound and consistent risk management practices. • Thoroughly analyzing risk quantitatively and qualitatively. • Realizing lower cost of capital from high quality risk management.
In keeping with the belief that consistent values drive long-term behaviors, Truist’s RMO has established the following risk values which are intended to guide teammates’ day-to-day activities: • Managing risk is the responsibility of every teammate. • Proactively identifying risk and managing the inherent risks of their businesses is the responsibility of the business units. • Managing risk with a balanced approach which includes quality, profitability, and growth. • Utilizing sound and consistent risk management practices. 68 Truist Financial Corporation • Thoroughly analyzing risk quantitatively and qualitatively. • Realizing lower cost of capital from high quality risk management.
Truist Financial Corporation 69 The following discussion describes the underwriting procedures and overall risk management of Truist’s lending function. Underwriting Approach The loan portfolio is a primary source of profitability and risk; therefore, proper loan underwriting is critical to Truist’s long-term financial success.
The following discussion describes the underwriting procedures and overall risk management of Truist’s lending function. Underwriting Approach The loan portfolio is a primary source of profitability and risk; therefore, proper loan underwriting is critical to Truist’s long-term financial success.
Truist Financial Corporation 49 The following table presents the securities portfolio by major category of security holdings with ranges of maturities and average yields: Table 15: Securities Yields by Major Category and Maturity December 31, 2022 (Dollars in millions) AFS HTM Fair Value Effective Yield (1) Amortized Cost Effective Yield (1) U.S.
Truist Financial Corporation 55 The following table presents the securities portfolio by major category of security holdings with ranges of maturities and average yields: Table 15: Securities Yields by Major Category and Maturity December 31, 2023 (Dollars in millions) AFS HTM Fair Value Effective Yield (1) Amortized Cost Effective Yield (1) U.S.
The Company’s compensation structure supports its core values and sound risk management practices in an effort to promote judicious risk-taking behavior. Truist’s purpose, mission, and values are the foundation for the risk management framework utilized at Truist and therefore serve as the basis on which the risk appetite and risk strategy are built.
The Company’s compensation structure is designed to support its core values and sound risk management practices in an effort to promote judicious risk-taking behavior. Truist’s purpose, mission, and values are the foundation for the risk management framework utilized at Truist and therefore serve as the basis on which the risk appetite and risk strategy are built.
Table 14: Composition of Securities Portfolio (Dollars in millions) Dec 31, 2022 Dec 31, 2021 AFS securities (at fair value): U.S.
Table 14: Composition of Securities Portfolio (Dollars in millions) Dec 31, 2023 Dec 31, 2022 AFS securities (at fair value): U.S.
For individually evaluated loans, the ALLL is determined through review of data specific to the borrower and related collateral, if any, while for TDRs, default expectations and estimated prepayment speeds that are specific to each of the restructured loan populations are incorporated in the determination of the ALLL.
For individually evaluated loans, the ALLL is determined through review of data specific to the borrower and related collateral, if any, while prior to January 1, 2023 for TDRs, default expectations and estimated prepayment speeds that are specific to each of the restructured loan populations are incorporated in the determination of the ALLL.
After the interest-only period, the loan will require the payment of both interest and principal over the remaining term. The outstanding balances of variable rate residential mortgage loans in the interest-only phase were approximately $342 million and $288 million at December 31, 2022 and December 31, 2021, respectively.
After the interest-only period, the loan will require the payment of both interest and principal over the remaining term. The outstanding balances of variable rate residential mortgage loans in the interest-only phase were approximately $317 million and $342 million at December 31, 2023 and December 31, 2022, respectively.
As of December 31, 2022, Truist held or serviced the first lien on 32% of its second lien positions.
As of December 31, 2023, Truist held or serviced the first lien on 32% of its second lien positions.
Fair Value Disclosures,” and “Critical Accounting Policies” herein for discussion of valuation policies and methodologies. Securitizations As of December 31, 2022, the aggregate market value of on-balance sheet securitization positions subject to the Market Risk Rule was $12 million, all of which were non-agency asset backed securities positions.
Fair Value Disclosures,” and “Critical Accounting Policies” herein for discussion of valuation policies and methodologies. Securitizations As of December 31, 2023, the aggregate market value of on-balance sheet securitization positions subject to the Market Risk Rule, which were non-agency asset backed securities positions, was $49 million.
Table 38: Capital Requirements Minimum Capital Well Capitalized Minimum Capital Plus Stress Capital Buffer (1) Truist Truist Bank CET1 4.5 % NA 6.5 % 7.0 % Tier 1 capital 6.0 6.0 % 8.0 8.5 Total capital 8.0 10.0 10.0 10.5 Leverage ratio 4.0 NA 5.0 NA Supplementary leverage ratio 3.0 NA NA NA (1) Reflects a SCB requirement of 2.5% applicable to Truist as of December 31, 2022.
Table 37: Capital Requirements Minimum Capital Well-Capitalized Minimum Capital Plus Stress Capital Buffer (1) Truist Truist Bank CET1 4.5 % NA 6.5 % 7.4 % Tier 1 capital 6.0 6.0 % 8.0 8.9 Total capital 8.0 10.0 10.0 10.9 Leverage ratio 4.0 NA 5.0 NA Supplementary leverage ratio 3.0 NA NA NA (1) Reflects a SCB requirement of 2.9% applicable to Truist as of December 31, 2023.
This allowance is used to adjust for limitations in modeled results related to the current economic conditions, and considerations with respect to the impact of current and expected events or risks, the outcomes of which are uncertain and may not be completely considered by quantitative models.
The qualitative components are used to adjust for limitations in modeled results related to current economic conditions, and considerations with respect to the impact of current and expected events or risks, the outcomes of which are uncertain and may not be completely considered by quantitative models.
Compliance risk can result in diminished reputation, reduced franchise or enterprise value, limited business opportunities, and lessened expansion potential.
Compliance risk can result in diminished reputation, reduced franchise or enterprise value, limited business opportunities, increased costs and expenses, and lessened expansion potential.
The Company individually evaluates expected credits losses related to loans and leases that do not share similar risk characteristics and loans that have been classified as a TDR.
The Company individually evaluates expected credits losses related to loans and leases that do not share similar risk characteristics and prior to January 1, 2023 loans that have been classified as a TDR.
Liquidity Risk Liquidity risk is the risk that (i) Truist will be unable to meet its obligations as they come due because of an inability to obtain adequate funding (funding liquidity risk), or (ii) Truist cannot easily unwind or offset specific exposures without significantly lowering market prices because of inadequate market depth or market disruptions (market liquidity risk).
Liquidity Risk Liquidity risk is the risk that (i) Truist will be unable to meet its obligations as they come due because of an inability to obtain adequate funding (funding liquidity risk), or (ii) Truist cannot easily monetize assets without significantly lowering market prices because of inadequate market depth or market disruptions (market liquidity risk).
Average short-term borrowings were $15.0 billion, or 3.2% of total funding, for the year ended December 31, 2022, as compared to $6.2 billion, or 1.4%, for the prior year. Long-term debt provides funding and, to a lesser extent, regulatory capital, and primarily consists of senior and subordinated notes issued by Truist and Truist Bank.
Average short-term borrowings were $24.5 billion, or 5.2% of total funding, for the year ended December 31, 2023, as compared to $15.0 billion, or 3.2%, for the prior year. Long-term debt provides funding and, to a lesser extent, regulatory capital, and primarily consists of senior and subordinated notes issued by Truist and Truist Bank.
The indirect other portfolio also includes small ticket consumer lending related to the purchase of power sports and outdoor power equipment, and trailers. These loans are relatively homogeneous, and no single loan is individually significant in terms of its size and potential risk of loss.
The other consumer portfolio includes Sheffield, a small ticket consumer lending division related to the purchase of power sports and outdoor power equipment, and trailers. These loans are homogeneous, and no single loan is individually significant in terms of its size and potential risk of loss.
Business Combinations” for additional disclosures regarding business combinations. Securities Truist generally utilizes a third-party pricing service in determining the fair value of its AFS investment securities, whereas trading securities are priced internally.
Business Combinations, Divestitures, and Noncontrolling Interests” for additional disclosures regarding business combinations. Securities Truist generally utilizes a third-party pricing service in determining the fair value of its AFS investment securities, whereas trading securities are priced internally.
Additionally, a reporting unit’s carrying value could change based on market conditions, asset growth, or the risk profile of those reporting units, which could impact whether the fair value of a reporting unit is less than carrying value.
Additionally, a reporting unit’s carrying value could change based on market conditions, change in the underlying makeup of the reporting unit, or the risk profile of those reporting units, which could impact whether the fair value of a reporting unit is less than carrying value.
The fair value of interest rate lock commitments, which are related to mortgage loan commitments, is based on quoted market prices adjusted for commitments that Truist does not expect to fund and includes the value attributable to the net servicing fee. Refer to “Note 19.
The fair value of interest rate lock commitments, which are related to mortgage loan commitments, is based on quoted market prices adjusted for commitments that Truist does not expect to fund and includes the value attributable to the net servicing fee. Refer to “Note 19. Derivative Financial Instruments” for further information on the Company’s derivatives.
Strategic Risk Strategic risk is the risk of financial loss, diminished stakeholder confidence, or negative impact to human capital resulting from ineffective strategy setting and execution, adverse business decisions, or lack of responsiveness to changes in the banking industry and operating environment.
Strategic Risk Strategic risk is the risk to earnings, capital, stock price, diminished stakeholder confidence, or negative impact to human capital resulting from ineffective strategy and execution, adverse business decisions, or lack of responsiveness to changes in the banking industry and operating environment.
The risk taxonomy drives internal risk measurement and monitoring and enables Truist to clearly and transparently communicate to stakeholders the level of potential risk the Company faces and the Company’s position on managing risk to acceptable levels. Truist is committed to fostering a culture that supports identification and escalation of risks across the organization.
Truist has developed a risk taxonomy designed to drive internal risk measurement and monitoring and enable Truist to clearly and transparently communicate to stakeholders the level of potential risk the Company faces and the Company’s position on managing risk to acceptable levels. Truist is committed to fostering a culture that supports identification and escalation of risks across the organization.
Truist maintains a significant buffer above the projected one year of cash outflows. In determining the buffer, Truist considers cash requirements for common and preferred dividends, unfunded commitments to affiliates, serving as a source of strength to Truist Bank, and being able to withstand sustained market disruptions that could limit access to the capital markets.
In determining the buffer, Truist considers cash requirements for common and preferred dividends, unfunded commitments to affiliates, serving as a source of strength to Truist Bank, and being able to withstand sustained market disruptions that could limit access to the capital markets.
Truist Financial Corporation 79 Management also considered the sensitivity that changes in the expected return on plan assets and the discount rate would have on pension expense.
Management also considered the sensitivity that changes in the expected return on plan assets and the discount rate would have on pension expense.
For the Company’s qualified plans, a decrease of 25 basis points in the discount rate would result in additional pension expense of approximately $46 million for 2023, while a decrease of 100 basis points in the expected return on plan assets would result in an increase of approximately $136 million in pension expense for 2023.
For the Company’s qualified plans, a decrease of 25 basis points in the discount rate would result in additional pension expense of approximately $29 million for 2024, while a decrease of 100 basis points in the expected return on plan assets would result in an increase of approximately $145 million in pension expense for 2024.
Short-term borrowings fluctuate based on the Company’s funding needs. While deposits remain the primary source for funding loan originations, management uses short-term borrowings as a supplementary funding source for loan growth and other balance sheet management purposes.
While deposits remain the primary source for funding loan originations, management uses short-term borrowings as a supplementary funding source for loan growth and other balance sheet management purposes.
Truist has established the following general practices to manage credit risk: • limiting the amount of credit that individual lenders may extend to a borrower; • establishing a process for credit approval accountability; • careful initial underwriting and analysis of borrower, transaction, market and collateral risks; • ongoing servicing and monitoring of individual loans and lending relationships; • continuous monitoring of the portfolio, market dynamics and the economy; and • periodically reevaluating the Company’s strategy and overall exposure as economic, market and other relevant conditions change.
Truist has established the following general practices to manage credit risk: • limiting the amount of credit that individual lenders may extend to a borrower; • establishing a process for credit approval accountability; • careful initial underwriting and analysis of borrower, transaction, market, and collateral risks; • ongoing servicing and monitoring of individual loans and lending relationships; • maintaining collections and asset resolution teams; 74 Truist Financial Corporation • continuous monitoring of the portfolio, concentration and transactional limits, emerging risks, market dynamics and the economy; and • periodically reevaluating the Company’s strategy and overall exposure as economic, market and other relevant conditions change.
The amount of deposits above the FDIC’s limit of $250,000 was $189.6 billion and $202.5 billion as of December 31, 2022 and 2021, respectively, calculated using the same methodology as the Call Report for Truist Bank.
The amount of deposits above the FDIC’s limit of $250,000 was $175.1 billion and $189.6 billion as of December 31, 2023 and 2022, respectively, calculated using the same methodology as the Call Report for Truist Bank.
Truist and Truist Bank are subject to the Category III reduced LCR requirements. Truist held average weighted eligible HQLA of $89.4 billion and Truist’s average LCR was 112% for the three months ended December 31, 2022.
Truist and Truist Bank are subject to the Category III reduced LCR requirements. Truist held average weighted eligible HQLA of $84.9 billion and Truist’s average LCR was 112% for the three months ended December 31, 2023.
At December 31, 2022 and December 31, 2021, the Parent Company had 37 months and 35 months, respectively, of cash on hand to satisfy projected cash outflows, and 22 months and 19 months, respectively, when including the payment of common stock dividends.
At December 31, 2023 and December 31, 2022, the Parent Company had 48 months and 37 months, respectively, of cash on hand to satisfy projected cash outflows, and 30 months and 22 months, respectively, when including the payment of common stock dividends.
Merger and restructuring accruals are re-evaluated periodically and adjusted as necessary. The remaining accruals at December 31, 2022 are generally expected to be utilized within one year, unless they relate to specific contracts that expire later. The following table presents a summary of merger-related and restructuring charges and the related accruals.
The remaining accruals at December 31, 2023 are generally expected to be utilized within one year, unless they relate to specific contracts that expire later. The following table presents a summary of merger-related and restructuring charges and the related accruals.
Effective July 2021, Truist became subject to final rules implementing the NSFR, which are designed to ensure that banking organizations maintain a stable, long-term funding profile in relation to their asset composition and off-balance sheet activities.
Effective July 2021, Truist became subject to final rules implementing the NSFR, which are designed to ensure that banking organizations maintain a stable, long-term funding profile in relation to their asset composition and off-balance sheet activities. At December 31, 2023, Truist was compliant with this requirement.
Accordingly, Truist’s significant accounting policies and effects of new accounting pronouncements are discussed in detail in “Note 1. Basis of Presentation.” The following is a summary of Truist’s critical accounting policies that are highly dependent on estimates, assumptions, and judgments.
Accordingly, Truist’s significant accounting policies and effects of new accounting pronouncements are discussed in detail in “Note 1. Basis of Presentation.” The following is a summary of Truist’s critical accounting policies that are highly dependent on estimates, assumptions, and judgments. These critical accounting policies are reviewed with the Audit Committee of the Board of Directors on a periodic basis.
When observable market prices are not available, the Company uses judgment and estimates fair value using internal models that reflect assumptions consistent with those that would be used by a market participant in estimating fair value. Refer to “Note 1. Basis of Presentation” for further description of the Company’s accounting for LHFS.
When observable market prices are not available, the Company uses judgment and estimates fair value using internal models that reflect assumptions consistent with those that would be used by a market participant in estimating fair value. Refer to “Note 1.
Management reviews the goodwill of each reporting unit for impairment on an annual basis as of October 1 or more often if events or circumstances indicate that it is more-likely-than-not that the fair value of a reporting unit is below its carrying value.
Management performs a goodwill impairment analysis on an annual basis as of October 1 or more often if events or circumstances indicate that it is more-likely-than not that the fair value of a reporting unit is below its carrying value. For its annual impairment review, Truist performed a quantitative test of each of its reporting units.
The capital multiplication factor increases from a minimum of three to a maximum of four, depending on the number of exceptions. All Company-wide VaR backtesting exceptions are thoroughly reviewed in the context of VaR model use and performance.
The capital multiplication factor increases from a minimum of three to a maximum of four, depending on the number of exceptions. All Company-wide VaR backtesting exceptions are thoroughly reviewed in the context of VaR model use and performance. There was no change in the capital multiplication factor over the preceding twelve months.
Stress tests include simulations for historical repeats and hypothetical risk factor shocks. All trading positions within each applicable market risk category (interest rate risk, equity risk, foreign exchange rate risk, credit spread risk, and commodity price risk) are included in the Company’s comprehensive stress testing framework.
Stress tests include simulations for risk factor sensitivities, historical repeats and hypothetical scenarios with varying liquidity horizons of key risk factors. All trading positions within each applicable market risk category (interest rate risk, equity risk, foreign exchange rate risk, credit spread risk, and commodity price risk) are included in the Company’s comprehensive stress testing framework.
Merger-Related and Restructuring Charges Truist has incurred certain merger-related and restructuring charges, which include: • severance and personnel-related costs or credits; • occupancy and equipment charges or credits, which relate to costs or gains associated with lease terminations, obsolete equipment write-offs and the sale of duplicate facilities and equipment; • professional services, which relate to legal and investment banking advisory fees and other consulting services pertaining to restructuring initiatives or transactions; • systems conversion and related charges, which represent costs to integrate the entity’s information technology systems; • other merger-related and restructuring charges or credits, which include expenses necessary to convert and combine the acquired branches and operations of merged companies, direct media advertising related to the mergers and acquisitions, asset and supply inventory write-offs, and other similar charges; and • write-offs related to exiting certain businesses. 46 Truist Financial Corporation Merger-related and restructuring accruals are established when the costs are incurred or once all requirements for a plan to dispose of or outsource certain business functions have been approved by management.
Merger-Related and Restructuring Charges Truist has incurred certain merger-related and restructuring charges, which include: • severance and personnel-related costs or credits; • occupancy and equipment charges or credits, which relate to costs or gains associated with lease terminations, obsolete equipment write-offs and the sale of duplicate facilities and equipment; • professional services, which relate to legal and investment banking advisory fees and other consulting services pertaining to restructuring initiatives or transactions; • systems conversion and related charges, which represent costs to integrate the entity’s information technology systems; Truist Financial Corporation 51 • costs for integration of mergers and acquisitions and other restructuring charges or credits, which include expenses necessary to convert and combine the acquired branches and operations of merged companies, direct media advertising related to the mergers and acquisitions, asset and supply inventory write-offs, and other similar charges; and • write-offs related to exiting certain businesses.
Loans 90 days or more past due and still accruing totaled $1.6 billion at December 31, 2022, down $325 million compared to the prior year primarily due to a decline in government guaranteed residential mortgages and government guaranteed student loans.
Loans 90 days or more past due and still accruing totaled $534 million at December 31, 2023, down $1.1 billion compared to the prior year primarily due to the sale of the student loan portfolio and a decline in government guaranteed residential mortgages.
Expected losses are estimated through contractual maturity, giving appropriate consideration to expected prepayments unless the borrower has a right to renew that is not cancellable or it is reasonably expected that the loan will be modified as a TDR.
Expected losses are estimated through contractual maturity, giving appropriate consideration to expected prepayments unless the borrower has a right to renew that is not cancellable or to capture the losses expected at the balance sheet date or prior to January 1, 2023 it is reasonably expected that the loan will be modified as a TDR.
Total liabilities at December 31, 2022 were $494.7 billion, an increase of $22.7 billion, or 4.8%, from the prior year, reflecting an increase of $18.1 billion in short-term borrowings and an increase of $7.3 billion, or 20%, in long-term debt, partially offset by a decrease of $3.0 billion, or 0.7%, in deposits.
Total liabilities at December 31, 2023 were $476.1 billion, a decrease of $18.6 billion, or 3.8%, from the prior year, reflecting a decrease of $17.6 billion, or 4.3%, in deposits and a decrease of $4.3 billion, or 9.9%, in long-term debt, partially offset by an increase of $1.4 billion, or 6.0%, in short-term borrowings.
The following table summarizes certain information for the past three years with respect to short-term borrowings excluding trading liabilities, hedges, and collateral in excess of derivative exposure: Table 31: Short-Term Borrowings As Of / For The Year Ended December 31, (Dollars in millions) 2022 2021 2020 Securities sold under agreements to repurchase: Maximum outstanding at any month-end during the year $ 6,033 $ 3,279 $ 2,348 Balance outstanding at end of year 2,128 2,435 1,221 Average outstanding during the year 2,670 2,382 1,504 Average interest rate during the year 1.33 % 0.07 % 0.64 % Average interest rate at end of year 4.36 0.01 0.13 Federal funds purchased and short-term borrowed funds: Maximum outstanding at any month-end during the year $ 22,324 $ 6,244 $ 19,392 Balance outstanding at end of year 19,340 808 3,372 Average outstanding during the year 10,135 1,936 6,951 Average interest rate during the year 2.79 % 0.12 % 1.17 % Average interest rate at end of year 4.38 0.08 0.20 At December 31, 2022, short-term borrowings totaled $23.4 billion, an increase of $18.1 billion compared to December 31, 2021.
The following table summarizes certain information for the past three years with respect to short-term borrowings excluding trading liabilities, hedges, and collateral in excess of derivative exposure: Table 30: Short-Term Borrowings As Of / For The Year Ended December 31, (Dollars in millions) 2023 2022 2021 Securities sold under agreements to repurchase: Maximum outstanding at any month-end during the year $ 4,120 $ 6,033 $ 3,279 Balance outstanding at end of year 2,427 2,128 2,435 Average outstanding during the year 2,472 2,670 2,382 Average interest rate during the year 5.18 % 1.33 % 0.07 % Average interest rate at end of year 5.39 4.36 0.01 Federal funds purchased and short-term borrowed funds: Maximum outstanding at any month-end during the year $ 26,453 $ 22,324 $ 6,244 Balance outstanding at end of year 22,401 19,340 808 Average outstanding during the year 22,007 10,135 1,936 Average interest rate during the year 5.26 % 2.79 % 0.12 % Average interest rate at end of year 5.15 4.38 0.08 At December 31, 2023, short-term borrowings totaled $24.8 billion, an increase of $1.4 billion compared to December 31, 2022.
Truist is also subject to risk-based capital guidelines for market risk under the Market Risk Rule. 66 Truist Financial Corporation Covered Trading Positions Covered positions subject to the Market Risk Rule include trading assets and liabilities, specifically those held for the purpose of short-term resale or with the intent of benefiting from actual or expected short-term price movements or to lock in arbitrage profits.
Covered Trading Positions Covered positions subject to the Market Risk Rule include trading assets and liabilities, specifically those held for the purpose of short-term resale or with the intent of benefiting from actual or expected short-term price movements or to lock in arbitrage profits.
Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases was 0.04% at December 31, 2022, up one basis point from December 31, 2021.
Excluding government guaranteed loans, the ratio of loans 90 days or more past due and still accruing as a percentage of loans and leases HFI was 0.04% at December 31, 2023 and 2022.
At December 31, 2022, the ALLL was 5.32 times annualized net charge-offs, compared to 6.36x times at December 31, 2021. 58 Truist Financial Corporation The following table presents an allocation of the ALLL. The entire amount of the allowance is available to absorb losses occurring in any category of loans and leases.
At December 31, 2023, the ALLL was 3.0x annualized net charge-offs, compared to 5.3x at December 31, 2022. 64 Truist Financial Corporation The following table presents an allocation of the ALLL. The entire amount of the allowance is available to absorb losses occurring in any category of loans and leases.
Access to funding at the Parent Company is more sensitive to market disruptions. Therefore, Truist prudently manages cash levels at the Parent Company to cover a minimum of one year of projected cash outflows which includes unfunded external commitments, debt service, common and preferred dividends and scheduled debt maturities, without the benefit of any new cash inflows.
Therefore, Truist prudently manages cash levels at the Parent Company to cover a minimum of one year of projected cash outflows which includes unfunded external commitments, debt service, common and preferred dividends and scheduled debt maturities, without the benefit of any new cash inflows. Truist maintains a significant buffer above the projected one year of cash outflows.
Truist Financial Corporation 67 Table 34: VaR-based Measures Year Ended December 31, 2022 2021 (Dollars in millions) 10-Day Holding Period 1-Day Holding Period 10-Day Holding Period 1-Day Holding Period VaR-based Measures: Maximum $ 38 $ 14 $ 68 $ 16 Average 17 5 14 4 Minimum 6 3 3 1 Period-end 20 6 13 5 VaR by Risk Class: Interest Rate Risk 6 3 Credit Spread Risk 8 5 Equity Price Risk 1 1 Foreign Exchange Risk — — Portfolio Diversification (9) (5) Period-end 6 5 Stressed VaR-based measures Stressed VaR, another component of market risk capital, is calculated using the same internal models as used for the VaR-based measure.
The following table summarizes certain VaR-based measures for the 12 months ended December 31, 2023 and 2022. 72 Truist Financial Corporation Table 33: VaR-based Measures Year Ended December 31, 2023 2022 (Dollars in millions) 10-Day Holding Period 1-Day Holding Period 10-Day Holding Period 1-Day Holding Period VaR-based Measures: Maximum $ 30 $ 14 $ 38 $ 14 Average 17 7 17 5 Minimum 10 4 6 3 Period-end 23 11 20 6 VaR by Risk Class: Interest Rate Risk 5 6 Credit Spread Risk 2 8 Equity Price Risk 5 1 Foreign Exchange Risk 1 — Portfolio Diversification (2) (9) Period-end 11 6 Stressed VaR-based measures Stressed VaR, another component of market risk capital, is calculated using the same internal models as used for the VaR-based measure.
The ERC is responsible for maintaining an effective risk management framework and monitoring its adoption and execution across the enterprise. The ERC is chaired by the CRO, and its membership includes all members of Executive Leadership and the Chief Audit Officer.
The ERC is responsible for maintaining an effective risk management framework and monitoring its adoption and execution across the enterprise. The ERC is chaired by the Vice Chair and Chief Risk Officer and its membership includes the Chief Executive Officer, Vice Chair and Chief Operating Officer, Chief Audit Officer, and other designated members of Truist management.
Critical Accounting Policies The accounting and reporting policies of Truist are in accordance with GAAP and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities.
Basis of Presentation” for additional discussion regarding reclassifications. Critical Accounting Policies The accounting and reporting policies of Truist are in accordance with GAAP and conform to the accounting and reporting guidelines prescribed by bank regulatory authorities.
When market observable data is not available, which generally occurs due to the lack of liquidity or inactive markets for certain securities, the valuation of the security is subjective and may involve substantial judgment by management to reflect unobservable input assumptions.
When market observable data is not available, which generally occurs due to the lack of liquidity or inactive markets for certain securities, the valuation of the security is subjective and may involve substantial judgment by management to reflect unobservable input assumptions. MSRs Truist’s primary class of MSRs for which it separately manages the economic risks relates to residential mortgages.
These loans are subject to similar rigorous lending policies and procedures as the indirect auto loan portfolio. The indirect other loan portfolio also includes other indirect and point-of-sale lending to consumers to finance home improvements, furniture purchases, certain elective health-care services, and other consumer products segments. These loans are originated in accordance with strict underwriting criteria as determined by Truist.
These loans are subject to similar rigorous lending policies and procedures as the indirect auto loan portfolio. The other consumer loan portfolio also includes other indirect and point-of-sale lending to consumers, including through Service Finance, to finance home improvements, furniture purchases, certain elective health-care services, and other consumer products segments.
The allowance for credit losses was $4.6 billion and includes $4.4 billion for the allowance for loan and lease losses and $272 million for the reserve for unfunded commitments. The ALLL ratio was 1.34%, compared to 1.53% at December 31, 2021.
The allowance for credit losses was $5.1 billion and includes $4.8 billion for the allowance for loan and lease losses and $295 million for the reserve for unfunded commitments. The ALLL ratio was 1.54%, compared to 1.34% at December 31, 2022.
The following figure describes the roles of the three lines of defense: 62 Truist Financial Corporation Truist’s Risk Governance framework is designed to provide comprehensive Board and Executive Leadership risk oversight, maintaining a committee governance structure that is designed to ensure alignment and execution of the risk management framework.
As illustrated below, the risk management framework is supported by three lines of defense. The following figure describes the roles of the three lines of defense: Truist’s Risk Governance framework is designed to provide comprehensive Board and management risk oversight, maintaining a committee governance structure that is designed to ensure alignment and execution of the risk management framework.
The cybersecurity strategy is enabled by continuous enhancement of Truist’s multilayered defenses including advanced capabilities for early and rapid cyber threat identification, detection, protection, response, and recovery.
Truist’s cybersecurity strategy is enabled by Truist’s multilayered defenses, including capabilities that are designed for early and rapid cyber threat identification, detection, protection, response, and recovery.
Estimates of expected future loan and lease losses are determined by using statistical models and management’s judgement. The models are designed to forecast probability of default, exposure at default and loss given default by correlating certain macroeconomic forecast data to historical experience. The models are generally applied at the portfolio level to pools of loans with similar risk characteristics.
Quantitative models are designed to forecast probability of default, exposure at default and loss given default by correlating certain macroeconomic forecast data to historical experience. The models are generally applied at the portfolio level to pools of loans with similar risk characteristics.
Risk metrics are monitored against a suite of limits on a daily basis at both the trading desk level and at the aggregate portfolio level, which is intended to ensure that exposures are in line with Truist’s risk appetite.
Risk metrics are monitored against a suite of limits on a daily basis at both the trading desk level and at the aggregate portfolio level, which is intended to ensure that exposures are in line with Truist’s risk appetite. Truist Financial Corporation 71 Truist is also subject to risk-based capital guidelines for market risk under the Market Risk Rule.
Table 20: Asset Quality Ratios Dec 31, 2022 Dec 31, 2021 Loans 30-89 days past due and still accruing as a percentage of loans and leases HFI 0.70 % 0.71 % Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI 0.49 0.67 NPLs as a percentage of loans and leases HFI 0.36 0.38 NPLs as a percentage of total loans and leases (1) 0.36 0.38 NPAs as a percentage of: Total assets (1) 0.23 0.21 Loans and leases HFI plus foreclosed property 0.38 0.39 ALLL as a percentage of loans and leases HFI 1.34 1.53 Ratio of ALLL to NPLs 3.68x 4.07x Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI, excluding PPP and other government guaranteed (2) 0.04 % 0.03 % (1) Includes LHFS.
Table 20: Asset Quality Ratios Dec 31, 2023 Dec 31, 2022 Loans 30-89 days past due and still accruing as a percentage of loans and leases HFI 0.63 % 0.70 % Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI 0.17 0.49 NPLs as a percentage of loans and leases HFI 0.44 0.36 NPLs as a percentage of total loans and leases (1) 0.46 0.36 NPAs as a percentage of: Total assets (1) 0.28 0.23 Loans and leases HFI plus foreclosed property 0.46 0.38 ALLL as a percentage of loans and leases HFI 1.54 1.34 Ratio of ALLL to NPLs 3.5x 3.7x Loans 90 days or more past due and still accruing as a percentage of loans and leases HFI, excluding government guaranteed (2) 0.04 % 0.04 % (1) Includes LHFS.
The Company’s risk management framework promotes the execution of business strategies and objectives in alignment with its risk appetite. Truist has developed and employs a risk framework that further guides business functions in identifying, measuring, responding to, monitoring, and reporting on possible exposures to the organization.
Truist has developed and employs a risk framework that further guides business functions in identifying, measuring, responding to, monitoring, and reporting on possible exposures to the organization.
C&CB average total deposits decreased $1.9 billion, or 1.3%, for the year ended December 31, 2022 compared to the prior year primarily due to a decrease in average interest bearing deposits, partially offset by an increase in noninterest bearing deposits.
C&CB average total deposits decreased $14.7 billion, or 10%, for the year ended December 31, 2023 compared to the prior year primarily due to a decrease in average noninterest-bearing deposits, partially offset by an increase in money market and savings.
Table 8: Earnings Highlights Year Ended December 31, (Dollars in millions) Change 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Net income available to common shareholders $ 5,927 $ 6,033 $ 4,184 $ (106) $ 1,849 Diluted earnings per common share 4.43 4.47 3.08 (0.04) 1.39 Net interest income - taxable equivalent $ 14,458 $ 13,114 $ 13,951 $ 1,344 $ (837) Noninterest income 8,719 9,290 8,879 (571) 411 Total taxable-equivalent revenue $ 23,177 $ 22,404 $ 22,830 $ 773 $ (426) Less taxable-equivalent adjustment 142 108 125 Total revenue $ 23,035 $ 22,296 $ 22,705 Return on average assets 1.15 % 1.23 % 0.90 % (0.08) % 0.33 % Return on average common shareholders’ equity 10.4 9.7 6.8 0.7 2.9 Net interest margin - taxable equivalent 3.01 2.86 3.22 0.15 (0.36) Truist’s revenue for 2022 was $23.0 billion.
Table 8: Earnings Highlights Year Ended December 31, (Dollars in millions) Change 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Net income (loss) available to common shareholders $ (1,452) $ 5,927 $ 6,033 $ (7,379) $ (106) Diluted earnings per common share (1.09) 4.43 4.47 (5.52) (0.04) Net interest income - taxable equivalent $ 14,820 $ 14,458 $ 13,114 $ 362 $ 1,344 Noninterest income 8,790 8,719 9,290 71 (571) Total taxable-equivalent revenue $ 23,610 $ 23,177 $ 22,404 $ 433 $ 773 Less taxable-equivalent adjustment 220 142 108 Total revenue $ 23,390 $ 23,035 $ 22,296 Return on average assets (0.19) % 1.15 % 1.23 % (1.34) % (0.08) % Return on average common shareholders’ equity (2.6) 10.4 9.7 (13.0) 0.7 Net interest margin - taxable equivalent 3.00 3.01 2.86 (0.01) 0.15 46 Truist Financial Corporation Truist’s revenue for 2023 was $23.4 billion.
Table 12: Merger-Related and Restructuring Accrual Activity (Dollars in millions) Accrual at Jan 1, 2021 Expense Utilized Accrual at Dec 31, 2021 Expense Utilized Accrual at Dec 31, 2022 Severance and personnel-related $ 36 $ 336 $ (295) $ 77 $ 92 $ (160) $ 9 Occupancy and equipment — 139 (139) — 175 (175) — Professional services 16 256 (235) 37 142 (167) 12 Systems conversion and related costs — 59 (59) — 60 (60) — Other 11 32 (31) 12 44 (51) 5 Total (1) $ 63 $ 822 $ (759) $ 126 $ 513 $ (613) $ 26 (1) Related to the Merger, the Company recognized $368 million of expense for the year ended December 31, 2022.
Table 12: Merger-Related and Restructuring Accrual Activity (Dollars in millions) Accrual at Jan 1, 2022 Expense Utilized Accrual at Dec 31, 2022 Expense Utilized Accrual at Dec 31, 2023 Severance and personnel-related $ 77 $ 92 $ (160) $ 9 $ 276 $ (265) $ 20 Occupancy and equipment — 175 (175) — 67 (67) — Professional services 37 142 (167) 12 10 (20) 2 Systems conversion and related costs — 60 (60) — — — — Other 12 44 (51) 5 22 (25) 2 Total (1) $ 126 $ 513 $ (613) $ 26 $ 375 $ (377) $ 24 (1) The Company recognized $368 million of expense related to the Merger for the year ended December 31, 2022.
The following table provides a breakdown of Truist’s noninterest income: Table 10: Noninterest Income Year Ended December 31, % Change (Dollars in millions) 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Insurance income $ 3,043 $ 2,627 $ 2,193 15.8 % 19.8 % Wealth management income 1,338 1,392 1,277 (3.9) 9.0 Investment banking and trading income 995 1,441 1,010 (31.0) 42.7 Service charges on deposits 1,026 1,060 1,020 (3.2) 3.9 Card and payment related fees 944 874 761 8.0 14.8 Mortgage banking income 460 734 1,185 (37.3) (38.1) Lending related fees 375 349 315 7.4 10.8 Operating lease income 258 262 309 (1.5) (15.2) Securities gains (losses) (71) — 402 NM (100.0) Other income 351 551 407 (36.3) 35.4 Total noninterest income $ 8,719 $ 9,290 $ 8,879 (6.1) 4.6 2022 compared to 2021 Noninterest income for the year ended December 31, 2022 decreased $571 million, or 6.1%, compared to the prior year.
The following table provides a breakdown of Truist’s noninterest income: Table 10: Noninterest Income Year Ended December 31, % Change (Dollars in millions) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Insurance income $ 3,354 $ 3,043 $ 2,627 10.2 % 15.8 % Wealth management income 1,358 1,338 1,392 1.5 (3.9) Investment banking and trading income 822 995 1,441 (17.4) (31.0) Card and payment related fees 936 944 874 (0.8) 8.0 Service charges on deposits 869 1,026 1,060 (15.3) (3.2) Mortgage banking income 437 460 734 (5.0) (37.3) Lending related fees 447 375 349 19.2 7.4 Operating lease income 254 258 262 (1.6) (1.5) Securities gains (losses) — (71) — NM NM Other income 313 351 551 (10.8) (36.3) Total noninterest income $ 8,790 $ 8,719 $ 9,290 0.8 (6.1) Noninterest income was up $71 million, or 0.8%, for the year ended December 31, 2023 compared to 2022 due to higher insurance income and lending related fees, partially offset by lower investment banking and trading income, service charges on deposits and other income.
The following table presents a summary of Truist Bank’s available secured borrowing capacity and eligible cash at the FRB: Table 36: Selected Liquidity Sources (Dollars in millions) Dec 31, 2022 Dec 31, 2021 Unused borrowing capacity: FRB $ 49,250 $ 52,170 FHLB 20,770 49,244 Available investment securities (after haircuts) 85,401 116,600 Available secured borrowing capacity 155,421 218,014 Eligible cash at the FRB 15,556 14,714 Total $ 170,977 $ 232,728 At December 31, 2022, Truist Bank’s available secured borrowing capacity represented approximately 4.7 times the amount of wholesale funding maturities in one-year or less.
The following table presents a summary of Truist Bank’s available secured borrowing capacity and eligible cash at the FRB: Table 35: Selected Liquidity Sources (Dollars in millions) Dec 31, 2023 Dec 31, 2022 Unused borrowing capacity: FRB $ 55,252 $ 49,250 FHLB 24,712 20,770 Available investment securities (after haircuts) 74,717 85,401 Available secured borrowing capacity 154,681 155,421 Eligible cash at the FRB 25,085 15,556 Total $ 179,766 $ 170,977 At December 31, 2023, Truist Bank’s available secured borrowing capacity represented approximately 3.4 times the amount of wholesale funding maturities in one-year or less.
Other Assets The components of other assets are presented in the following table: Table 27: Other Assets as of Period End (Dollars in millions) Dec 31, 2022 Dec 31, 2021 Bank-owned life insurance $ 7,618 $ 7,281 Tax credit and other private equity investments 6,825 6,309 Prepaid pension assets 4,539 5,938 DTAs 3,027 — Accounts receivable 2,682 2,244 Accrued income 2,265 1,791 Leased assets and related assets 2,082 2,092 FHLB stock 1,279 48 ROU assets 1,193 1,168 Prepaid expenses 1,162 1,152 Equity securities at fair value 898 1,066 Derivative assets 684 2,370 Other 874 690 Total other assets $ 35,128 $ 32,149 Funding Activities Deposits are the primary source of funds for the Company’s lending and investing activities.
Other Assets The components of other assets are presented in the following table: Table 26: Other Assets as of Period End (Dollars in millions) Dec 31, 2023 Dec 31, 2022 Tax credit and other private equity investments $ 7,898 $ 6,825 Bank-owned life insurance 7,716 7,618 Prepaid pension assets 6,563 4,539 DTAs, net 3,037 3,027 Accounts receivable 2,723 2,682 Accrued income 2,345 2,265 Leased assets and related assets 1,647 2,082 FHLB stock 1,198 1,279 Prepaid expenses 1,130 1,162 ROU assets 1,069 1,193 Derivative assets 951 684 Equity securities at fair value 360 898 Other 533 874 Total other assets $ 37,170 $ 35,128 Truist Financial Corporation 65 Funding Activities Deposits are the primary source of funds for the Company’s lending and investing activities.
CB&W average total deposits increased $8.9 billion, or 3.7%, for the year ended December 31, 2022 compared to the prior year primarily due to increases in average noninterest bearing deposits, money market and savings, and interest bearing checking, partially offset by a decline in time deposits.
CB&W average total deposits decreased $15.7 billion, or 6.2%, for the year ended December 31, 2023 compared to the prior year primarily due to decreases in average interest-bearing checking, money market and savings, and noninterest-bearing deposits, partially offset by an increase in time deposits.
Investment strategies are reviewed by the MRLCC based on the interest rate environment, balance sheet mix, actual and anticipated loan demand, funding opportunities and the overall interest rate sensitivity of the Company.
The MRLCC also has much broader responsibilities, which are discussed in the “Market Risk” section in MD&A. Investment strategies are reviewed by the MRLCC based on the interest rate environment, balance sheet mix, actual and anticipated loan demand, funding opportunities and the overall interest rate sensitivity of the Company.

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