Truist receives 'Outstanding' Community Reinvestment Act rating

Rhea-AI Summary

Truist Financial (NYSE: TFC) announced it received an 'Outstanding' rating from the Federal Deposit Insurance (FDIC) for its Community Reinvestment Act (CRA) examination from 2020-2022. This rating reflects Truist's efforts to meet the credit needs of communities, including low- and moderate-income (LMI) neighborhoods.

During the period, Truist made 845,332 home mortgage, small business, and small farm loans totaling $151.9 billion, and originated 7,174 community development loans worth $16.1 billion—an increase of 304.6% and 154.7% respectively from the previous period (2017-2019). The company also made 6,143 qualified investments totaling $5.8 billion, with $4.4 billion supporting affordable housing.

Truist was the fourth-largest lender in the Paycheck Protection Program (PPP), funding $16.3 billion across 120,000 loans. The company launched the Truist Cares initiative in March 2020, providing over $50 million in aid. Additionally, it completed a three-year $60 billion Community Benefits Plan, delivering $75.4 billion in lending, investing, and philanthropic activities.

Positive

• Received 'Outstanding' CRA rating from FDIC.
• 845,332 loans totaling $151.9 billion to support LMI individuals and geographies.
• 7,174 community development loans worth $16.1 billion, an increase of 304.6% and 154.7% respectively.
• 6,143 qualified investments totaling $5.8 billion, with $4.4 billion supporting affordable housing.
• Fourth-largest lender in PPP, funding $16.3 billion across 120,000 loans.
• $50 million in aid through Truist Cares initiative.
• Completed $60 billion Community Benefits Plan, delivering $75.4 billion in activities.

Negative

• None.

Insights

Financial Analyst

The Outstanding CRA rating and impressive financial metrics demonstrate Truist's strong commitment to community development and regulatory compliance. The bank's $151.9 billion in targeted lending and $16.1 billion in community development loans represent significant increases from previous periods. Their role as the fourth-largest PPP lender with $16.3 billion in funding shows substantial market presence in critical government programs. The $75.4 billion delivery on their Community Benefits Plan, exceeding the $60 billion target, indicates strong execution capability and financial commitment to community development. However, while these activities support regulatory compliance and community goodwill, they may impact near-term profitability due to the lower margins typically associated with community development lending.

Market Research Analyst

Truist's community development initiatives and CRA performance position it favorably in the banking sector, particularly as ESG factors gain importance among investors. The substantial increase in community development loans (304.6% by volume) and investments ($5.8 billion vs previous $1.8 billion) demonstrates strong growth in this strategic area. The successful execution of the Community Benefits Plan and new $725 million commitment for Western North Carolina recovery shows proactive community engagement. These efforts can enhance brand value, customer loyalty and regulatory relationships, potentially providing competitive advantages in market expansion and acquisition approvals. The focus on affordable housing investments ($4.4 billion) aligns with current market needs and policy priorities.

CHARLOTTE, N.C., Dec. 11, 2024 /PRNewswire/ -- Truist Financial Corporation (NYSE: TFC) today announced it received the highest possible overall rating of "Outstanding" from the Federal Deposit Insurance Corporation for its most recent Community Reinvestment Act examination period, from 2020-2022. The CRA encourages banks to help meet the credit needs of communities in which they operate, including low- and moderate-income (LMI) neighborhoods, consistent with safe and sound banking operations.

"Receiving an 'Outstanding' CRA rating is a testament to the exceptional expertise and care Truist teammates provide to help meet the unique needs of all the communities we serve through lending, investments and services—including during an especially challenging time as we responded to the COVID-19 pandemic to care for our clients and teammates," said Truist Chief CRA and Community Development Officer Anthony Weekly. "This recognition embodies our purpose to inspire and build better lives and communities."

During the examination period of Jan. 1, 2020, to Dec. 31, 2022, Truist:

• Made 845,332 home mortgage, small business, and small farm loans totaling $151.9 billion to support LMI individuals and geographies.
• Originated 7,174 community development loans totaling $16.1 billion, an increase of 304.6% and 154.7% respectively from the prior exam period's (2017-2019) community development loans.
• Made significant use of innovative or complex investments to support community development initiatives, delivering 6,143 qualified investments totaling $5.8 billion—significantly higher than the $1.8 billion provided during the prior evaluation period.
• $4.4 billion of the investments support affordable housing.
• Responded to exceptional environmental factors and introduced new service delivery models to deliver 12,938 community development service activities, an increase of 55.2% compared to the 8,334 activities reported in the prior exam period.

This examination period was marked by the COVID-19 pandemic. Throughout the pandemic, Truist engaged in extraordinary efforts to help teammates and clients navigate unexpected issues and hardships, achieving the following:

• Truist was the fourth-largest lender by dollars in the Paycheck Protection Program (PPP), funding approximately $16.3 billion across nearly 120,000 loans to assist approximately 80,000 small business clients and help support over 2 million jobs.
• In March 2020, the Truist Cares initiative was launched, providing more than $50 million in aid from Truist, the Truist Charitable Fund and Truist Foundation to help meet basic needs, furnish medical supplies, and address financial hardships across the nation.
• Between March 2020 and December 2021, Truist provided approximately 900,000 COVID-19 related payment relief accommodations to consumers and businesses, impacting approximately $50 billion in loan balances.

Additionally, as part of its merger of equals in 2019, Truist made a three-year commitment to drive positive change and progress in LMI and majority-minority communities through Truist's $60 billion Community Benefits Plan, tailored to support affordable housing, nonprofits and small businesses. During this examination period, Truist completed its Community Benefits Plan, delivering combined lending, investing and philanthropic activities totaling $75.4 billion—exceeding the $60 billion target—and supported its clients and communities when they needed it most.

Truist remains steadfast in its purpose to inspire and build better lives and communities, and along with Truist Foundation, recently announced "Truist Cares for Western North Carolina," a three-year, $725 million commitment to support critical small business, housing and infrastructure needs in Western North Carolina as communities impacted by Hurricane Helene recover and rebuild. The commitment will include new, dedicated capital for local small businesses, residents and municipalities, impact capital from Truist Community Capital, philanthropic giving from Truist Foundation and additional on-the-ground humanitarian support from Truist teammates to help establish long-term resiliency in this devastated region. For more information on this initiative, visit Truist.com/TruistCares.

About Truist
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. Truist offers a wide range of products and services through our wholesale and consumer businesses, including consumer and small business banking, commercial banking, corporate and investment banking, wealth management, payments and specialized lending businesses. Headquartered in Charlotte, North Carolina, Truist is a top-10 commercial bank with total assets of $523 billion as of Sept. 30, 2024. Truist Bank, Member FDIC. Learn more at Truist.com.

About Truist Foundation
Truist Foundation is committed to Truist Financial Corporation's (NYSE: TFC) purpose to inspire and build better lives and communities. The Foundation, an endowed private foundation established in 2020 whose operating budget is independent of Truist Financial Corporation, makes strategic investments in a wide variety of nonprofit organizations centered around two focus areas: building career pathways to economic mobility and strengthening small businesses to ensure all communities have an equal opportunity to thrive. Embodying these focus areas are the Foundation's leading initiatives – the Inspire Awards and Where It Starts. Learn more at Truist.com/Foundation.

About The Truist Charitable Fund
The Truist Charitable Fund ("TCF") is committed to Truist Financial Corporation's (NYSE: TFC) purpose to inspire and build better lives. TCF was established as a donor-advised fund and is administered by The Winston-Salem Foundation. TCF invests in local community organizations, focusing on grants that support initiatives and programs in the areas of educational equity, leadership development, career pathways, small business and community services. To learn more about Truist's purpose, visit Truist.com/who-we-are/about-truist.

 

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SOURCE Truist Financial Corporation

FAQ

What does Truist's 'Outstanding' CRA rating mean for shareholders?

Truist's 'Outstanding' rating from the FDIC signifies strong community engagement, which can enhance the company's reputation and potentially attract more investors.

How many loans did Truist make during the CRA examination period?

During the CRA examination period, Truist made 845,332 home mortgage, small business, and small farm loans totaling $151.9 billion.

What was the increase in community development loans for Truist during the CRA period?

Truist's community development loans increased by 304.6% in number and 154.7% in value during the CRA examination period.

How much did Truist invest in affordable housing during the CRA period?

Truist invested $4.4 billion in affordable housing during the CRA examination period.

How did Truist perform in the Paycheck Protection Program (PPP)?

Truist was the fourth-largest lender in the PPP, funding $16.3 billion across 120,000 loans.

What is the Truist Cares initiative?

Launched in March 2020, the Truist Cares initiative provided over $50 million in aid to meet basic needs, furnish medical supplies, and address financial hardships.

What impact did Truist's Community Benefits Plan have?

Truist's Community Benefits Plan exceeded its $60 billion target, delivering $75.4 billion in lending, investing, and philanthropic activities.