Truist reports second quarter 2022 results
Truist Financial Corporation (TFC) reported second quarter 2022 earnings of $1.5 billion, or $1.09 per diluted share, reflecting a 6.7% decline from the previous year. Adjusted net income was $1.6 billion, or $1.20 per diluted share, showcasing robust loan growth and expanded net interest margin aided by rising interest rates. Notable highlights include a strong 8% dividend increase announcement, record insurance and card fees, and excellent credit quality. However, net income was impacted by increased provision for credit losses. Total assets increased by 2.0% with significant contributions from commercial and consumer loans.
- Adjusted net income of $1.6 billion, or $1.20 per diluted share.
- Record insurance and card-related fees boosting noninterest income.
- Broad-based loan growth of 2.8% in Q2 2022, totaling $296.7 billion.
- 8% increase in quarterly cash dividend announced.
- Strong credit quality with a net charge-off ratio of 0.22%.
- Net income down 6.7% year-over-year primarily due to higher provision for credit losses.
- Earnings per diluted share decreased by 6.0% compared to Q2 2021.
Second quarter 2022 GAAP earnings of
Second quarter 2022 Adjusted earnings of
Results reflect strong loan growth and expanded NIM given higher rates and strong deposit franchise
Fee revenues include record insurance and card and payment related fees, tempered by market volatility
Capital, liquidity, and credit quality remain strengths
CHARLOTTE, N.C., July 19, 2022 /PRNewswire/ -- Truist Financial Corporation (NYSE: TFC) today reported earnings for the second quarter of 2022.
Net income available to common shareholders of
Adjusted net income available to common shareholders was
"Truist demonstrated much progress this quarter for our stakeholders. Our solid second-quarter performance reflects our improved momentum post-integration and the resiliency of our diverse business mix in a volatile market environment," said Chairman and CEO Bill Rogers. "Our results include adjusted net income of
"Guided by our purpose to inspire and build better lives and communities, we're investing in key talent by increasing our minimum wage to
"While certain residual integration activities remain, we're seeing the early benefits of our shift from integrating to operating and continue to make strategic investments in talent and technology to accelerate our growth. We're confident Truist is well-positioned to perform in any environment given our diverse business mix and strong capital position. We remain committed to delivering positive operating leverage on both a GAAP and adjusted basis for full-year 2022."
Second Quarter 2022 Performance Highlights
- Earnings per diluted common share for the second quarter of 2022 were
$1.09 - Adjusted diluted earnings per share were
$1.20 down$0.03 per share, or2.4% , compared to first quarter 2022 and$0.35 per share, or23% , compared to second quarter 2021 - Declines were impacted by a higher provision cost compared to prior periods
- ROA was
1.14% ; adjusted ROA was1.25% - ROCE was
10.3% ; adjusted ROCE was11.3% - ROTCE was
22.7% ; adjusted ROTCE was24.8% - PPNR for the second quarter of 2022 was
$2.1 billion , up25% compared to first quarter 2022 and26% compared to second quarter 2021 - Adjusted PPNR was up
10% compared to first quarter 2022 and down2.0% compared to second quarter 2021 - GAAP operating leverage was 870 basis points compared to the first quarter of 2022 and 350 basis points year-to-date 2022 compared to 2021
- Adjusted operating leverage was 250 basis points compared to the first quarter of 2022 and (200) basis points year-to-date 2022 compared to 2021
- Taxable-equivalent revenue for the second quarter of 2022 was
$5.7 billion , up6.2% compared to first quarter 2022 and relatively flat compared to second quarter 2021 - Taxable-equivalent net interest income was up
7.0% compared to first quarter 2022 and up4.9% compared to second quarter 2021 - The increase compared to first quarter 2022 was primarily due to higher market interest rates coupled with well controlled deposit costs, loan growth, and one additional day
- Noninterest income was up
4.9% compared to first quarter 2022 and down6.5% compared to second quarter 2021 - Record insurance income due to continued organic growth, acquisitions and seasonality
- Record card and payment related fees due to increased activity and prior quarter acquisition of certain merchant services relationships
- Investment banking revenues were lower compared to last year due to volatile market conditions
- Residential mortgage income declined due to lower margins and refinance volumes resulting from the higher rate environment
- Net interest margin was
2.89% , up 13 basis points from first quarter 2022 - Core net interest margin was
2.72% , up 15 basis points from first quarter 2022, driven by higher market interest rates coupled with well controlled deposit costs and positive earning asset mix shift - Noninterest expense for the second quarter of 2022 was
$3.6 billion , down2.6% compared to first quarter 2022 and down10.7% compared to second quarter 2021 - Adjusted noninterest expense was
$3.2 billion , up$119 million , or3.8% , compared to first quarter 2022 due to higher personnel expenses, operational losses and professional fees - Adjusted noninterest expenses increased
$56 million , or1.8% , compared to second quarter 2021 primarily due to higher operational losses, professional fees and marketing costs, partially offset by lower personnel expense - GAAP efficiency ratio was
63.3% , compared to69.0% for first quarter 2022 - Adjusted efficiency ratio was
57.0% , compared to58.3% for first quarter 2022 - Broad-based loan growth; end of period loans held for investment grew
4.7% compared to the first quarter of 2022 - Average loans and leases held for investment for the second quarter of 2022 were
$296.7 billion , up$8.1 billion , or2.8% , compared to the first quarter of 2022 - Average commercial loans were up
$5.8 billion , or3.5% , driven by broad based growth within the commercial and industrial portfolio - Average consumer loans were up
$2.2 billion , or1.9% , across all portfolios except student lending - Asset quality remains excellent, reflecting Truist's prudent risk culture and diverse portfolio
- Net charge-offs were
0.22% of average loans and leases, down three basis points compared to first quarter 2022 - The ALLL ratio was
1.38% compared to1.44% for first quarter 2022 - The ALLL coverage ratio was 6.54X annualized net charge-offs, versus 5.78X for first quarter 2022
- Capital and liquidity levels remained strong; deployed capital through organic loan growth, dividends, and share repurchases
- Common equity tier 1 to risk-weighted assets was
9.2% - Repurchased
$250 million of common shares - Announced proposed increase to common dividend of
8% for the third quarter 2022 - Consolidated average LCR ratio was
110%
EARNINGS HIGHLIGHTS | Change 2Q22 vs. | ||||
(dollars in millions, except per share data) | 2Q22 | 1Q22 | 2Q21 | 1Q22 | 2Q21 |
Net income available to common shareholders | $ 1,454 | $ 1,327 | $ 1,559 | $ 127 | $ (105) |
Diluted earnings per common share | 1.09 | 0.99 | 1.16 | 0.10 | (0.07) |
Net interest income - taxable equivalent | $ 3,435 | $ 3,209 | $ 3,273 | $ 226 | $ 162 |
Noninterest income | 2,248 | 2,142 | 2,405 | 106 | (157) |
Total taxable-equivalent revenue | $ 5,683 | $ 5,351 | $ 5,678 | $ 332 | $ 5 |
Less taxable-equivalent adjustment | 28 | 26 | 28 | ||
Total revenue | $ 5,655 | $ 5,325 | $ 5,650 | ||
Return on average assets | 1.14 % | 1.07 % | 1.28 % | 0.07 % | (0.14) % |
Return on average risk-weighted assets (current quarter is preliminary) | 1.52 | 1.46 | 1.76 | 0.06 | (0.24) |
Return on average common shareholders' equity | 10.3 | 9.0 | 10.1 | 1.3 | 0.2 |
Return on average tangible common shareholders' equity (1) | 22.7 | 18.6 | 18.9 | 4.1 | 3.8 |
Net interest margin - taxable equivalent | 2.89 | 2.76 | 2.88 | 0.13 | 0.01 |
(1) Excludes certain items as detailed in the non-GAAP reconciliations in the Quarterly Performance Summary. |
Second Quarter 2022 compared to First Quarter 2022
Total taxable-equivalent revenue was
Taxable-equivalent net interest income for the second quarter of 2022 was up
The net interest margin was
The average cost of total deposits was
The provision for credit losses was
Noninterest income was
Noninterest expense was
The provision for income taxes was
Second Quarter 2022 compared to Second Quarter 2021
Total taxable-equivalent revenues were
Taxable equivalent net interest income for the second quarter of 2022 was up
Net interest margin was
The average cost of total deposits was
The provision for credit losses was
Noninterest income for the second quarter of 2022 decreased
Noninterest expense for the second quarter of 2022 was down
The provision for income taxes was
LOANS AND LEASES | ||||
(dollars in millions) Average balances | 2Q22 | 1Q22 | Change | % Change |
Commercial: | ||||
Commercial and industrial | $ 145,558 | $ 138,872 | $ 6,686 | 4.8 % |
CRE | 22,508 | 23,555 | (1,047) | (4.4) |
Commercial construction | 5,256 | 5,046 | 210 | 4.2 |
Total commercial | 173,322 | 167,473 | 5,849 | 3.5 |
Consumer: | ||||
Residential mortgage | 49,237 | 47,976 | 1,261 | 2.6 |
Residential home equity and direct | 25,124 | 24,883 | 241 | 1.0 |
Indirect auto | 26,496 | 26,088 | 408 | 1.6 |
Indirect other | 11,471 | 10,860 | 611 | 5.6 |
Student | 6,331 | 6,648 | (317) | (4.8) |
Total consumer | 118,659 | 116,455 | 2,204 | 1.9 |
Credit card | 4,728 | 4,682 | 46 | 1.0 |
Total loans and leases held for investment | $ 296,709 | $ 288,610 | $ 8,099 | 2.8 |
Average loans and leases held for investment for the second quarter of 2022 were
Average commercial loans increased
Average consumer loans increased
DEPOSITS | ||||
(dollars in millions) Average balances | 2Q22 | 1Q22 | Change | % Change |
Noninterest-bearing deposits | $ 148,610 | $ 145,933 | $ 2,677 | 1.8 % |
Interest checking | 112,375 | 112,159 | 216 | 0.2 |
Money market and savings | 148,632 | 141,500 | 7,132 | 5.0 |
Time deposits | 14,133 | 15,646 | (1,513) | (9.7) |
Total deposits | $ 423,750 | $ 415,238 | $ 8,512 | 2.0 |
Average deposits for the second quarter of 2022 were
CAPITAL RATIOS | 2Q22 | 1Q22 | 4Q21 | 3Q21 | 2Q21 |
Risk-based: | (preliminary) | ||||
Common equity Tier 1 | 9.2 % | 9.4 % | 9.6 % | 10.1 % | 10.2 % |
Tier 1 | 10.8 | 11.0 | 11.3 | 11.9 | 12.0 |
Total | 12.6 | 13.0 | 13.2 | 13.9 | 14.2 |
Leverage | 8.6 | 8.6 | 8.7 | 9.0 | 9.1 |
Supplementary leverage | 7.3 | 7.3 | 7.4 | 7.8 | 7.9 |
Capital ratios remained strong compared to the regulatory requirements for well capitalized banks. Truist declared common dividends of
Truist CET1 ratio was
Truist completed the 2022 Comprehensive Capital Analysis and Review (CCAR) process and received the preliminary stress capital buffer requirement of
Truist's average LCR was
ASSET QUALITY | |||||
(dollars in millions) | 2Q22 | 1Q22 | 4Q21 | 3Q21 | 2Q21 |
Total nonperforming assets | $ 1,173 | $ 1,135 | $ 1,163 | $ 1,204 | $ 1,192 |
Total performing TDRs | 1,693 | 1,515 | 1,390 | 1,475 | 1,501 |
Total loans 90 days past due and still accruing | 1,787 | 1,914 | 1,930 | 1,872 | 2,068 |
Total loans 30-89 days past due | 2,091 | 2,101 | 2,044 | 1,823 | 1,824 |
Nonperforming loans and leases as a percentage of loans and leases held for investment | 0.36 % | 0.36 % | 0.38 % | 0.38 % | 0.37 % |
Nonperforming loans and leases as a percentage of loans and leases, including loans held for sale | 0.37 | 0.37 | 0.38 | 0.40 | 0.39 |
Nonperforming assets as a percentage of total assets | 0.22 | 0.21 | 0.21 | 0.23 | 0.23 |
Loans 30-89 days past due and still accruing as a percentage of loans and leases | 0.69 | 0.72 | 0.71 | 0.64 | 0.64 |
Loans 90 days or more past due and still accruing as a percentage of loans and leases | 0.59 | 0.66 | 0.67 | 0.66 | 0.72 |
Loans 90 days or more past due and still accruing as a percentage of loans and leases, excluding PPP and other government guaranteed | 0.04 | 0.04 | 0.03 | 0.03 | 0.04 |
Allowance for loan and lease losses as a percentage of loans and leases held for investment | 1.38 | 1.44 | 1.53 | 1.65 | 1.79 |
Net charge-offs as a percentage of average loans and leases, annualized | 0.22 | 0.25 | 0.25 | 0.19 | 0.20 |
Ratio of allowance for loan and lease losses to net charge-offs, annualized | 6.54x | 5.78x | 6.14x | 8.79x | 8.98x |
Ratio of allowance for loan and lease losses to nonperforming loans and leases held for investment | 3.84x | 3.99x | 4.07x | 4.35x | 4.83x |
Nonperforming assets totaled
Performing TDRs were up
Loans 90 days or more past due and still accruing totaled
Loans 30-89 days past due and still accruing of
Net charge-offs during the second quarter totaled
The allowance for credit losses was
SEGMENT RESULTS | Change 2Q22 vs. | ||||
(dollars in millions) | |||||
Segment Net Income | 2Q22 | 1Q22 | 2Q21 | 1Q22 | 2Q21 |
Consumer Banking and Wealth | $ 773 | $ 873 | $ 799 | $ (100) | $ (26) |
Corporate and Commercial Banking | 954 | 1,003 | 1,306 | (49) | (352) |
Insurance Holdings | 178 | 152 | 159 | 26 | 19 |
Other, Treasury & Corporate | (373) | (612) | (606) | 239 | 233 |
Total net income | $ 1,532 | $ 1,416 | $ 1,658 | $ 116 | $ (126) |
Truist operates and measures business activity across three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings, with functional activities included in Other, Treasury and Corporate. The Company's business segment structure is based on the manner in which financial information is evaluated by management as well as the products and services provided or the type of client served. For additional information, see "Note 21. Operating Segments" of the Annual Report on Form 10-K for the year ended December 31, 2021.
Second Quarter 2022 compared to First Quarter 2022
Consumer Banking and Wealth ("CB&W")
CB&W net income was
Average loans held for investment increased
Corporate and Commercial Banking ("C&CB")
C&CB net income was
Average loans held for investment increased
Insurance Holdings ("IH")
IH net income was
Other, Treasury & Corporate ("OT&C")
OT&C generated a net loss of
Second Quarter 2022 compared to Second Quarter 2021
Consumer Banking and Wealth
CB&W net income was
Corporate and Commercial Banking
C&CB net income was
Insurance Holdings
IH net income was
Other, Treasury & Corporate
OT&C generated a net loss of
Earnings Presentation and Quarterly Performance Summary
To listen to Truist's live second quarter 2022 earnings conference call at 8 a.m. ET today, please call 855-303-0072 and enter the participant code 100038. A presentation will be used during the earnings conference call and is available on our website at https://ir.truist.com/events-and-presentation. Replays of the conference call will be available for 30 days by dialing 888-203-1112 (access code 100038).
The presentation, including an appendix reconciling non-GAAP disclosures, and Truist's Second Quarter 2022 Quarterly Performance Summary, which contains detailed financial schedules, are available at https://ir.truist.com/earnings.
About Truist
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 including retail, small business and commercial banking; asset management; capital markets; commercial real estate; corporate and institutional banking; insurance; mortgage; payments; specialized lending; and wealth management. Headquartered in Charlotte, North Carolina, Truist is a top 10 U.S. commercial bank with total assets of
Capital ratios and return on risk-weighted assets are preliminary.
This news release contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Truist's management uses these "non-GAAP" measures in their analysis of the Corporation's performance and the efficiency of its operations. Management believes these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results with prior periods and demonstrate the effects of significant items in the current period. The Corporation believes a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. Truist's management believes investors may find these non-GAAP financial measures useful. These disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Below is a listing of the types of non-GAAP measures used in this news release:
- Adjusted Efficiency Ratio - The adjusted efficiency ratio is non-GAAP in that it excludes securities gains (losses), amortization of intangible assets, merger-related and restructuring charges, and other selected items. Truist's management uses this measure in their analysis of the Corporation's performance. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges.
- Adjusted Operating Leverage - The adjusted operating leverage ratio is non-GAAP in that it excludes securities gains (losses), amortization of intangible assets, merger-related and restructuring charges, and other selected items. Truist's management uses this measure in their analysis of the Corporation's performance. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges.
- Pre-Provision Net Revenue (PPNR) - Pre-provision net revenue is a non-GAAP measure that adjusts net income determined in accordance with GAAP to exclude the impact of the provision for credit losses and provision for income taxes. Adjusted pre-provision net revenue is a non-GAAP measure that additionally excludes securities gains (losses), merger-related and restructuring charges, amortization of intangible assets, and other selected items. Truist's management believes these measures provide a greater understanding of ongoing operations and enhances comparability of results with prior periods.
- Tangible Common Equity and Related Measures - Tangible common equity and related measures are non-GAAP measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Truist's management uses these measures to assess the quality of capital and returns relative to balance sheet risk.
- Core NIM - Core net interest margin is a non-GAAP measure that adjusts net interest margin to exclude the impact of purchase accounting. The purchase accounting marks and related amortization for loans, deposits, and long-term debt from SunTrust and other acquisitions are excluded to approximate the yields paid by clients. Truist's management believes the adjustments to the calculation of net interest margin for certain assets and liabilities acquired provide investors with useful information related to the performance of Truist's earning assets.
- Adjusted Diluted EPS - The adjusted diluted earnings per share is non-GAAP in that it excludes merger-related and restructuring charges and other selected items, net of tax. Truist's management uses this measure in their analysis of the Corporation's performance. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges.
- Performance Ratios - The adjusted performance ratios, including adjusted return on average assets, adjusted return on average common shareholders' equity, and adjusted return on average tangible common shareholders' equity, are non-GAAP in that they exclude merger-related and restructuring charges, selected items, and, in the case of return on average tangible common shareholders' equity, amortization of intangible assets. Truist's management uses these measures in their analysis of the Corporation's performance. Truist's management believes these measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods, as well as demonstrate the effects of significant gains and charges.
- Insurance Holdings Adjusted EBITDA - EBITDA is a non-GAAP measurement of operating profitability that is calculated by adding back interest, taxes, depreciation, and amortization to net income. Truist's management also adds back merger-related and restructuring charges, incremental operating expenses related to the merger, and other selected items. Truist's management uses this measure in its analysis of the Corporation's Insurance Holdings segment. Truist's management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges.
- Allowance for Loan and Lease Losses and Unamortized Fair Value Mark as a Percentage of Gross Loans and Leases - Allowance for loan and lease losses and unamortized fair value mark as a percentage of gross loans and leases is a non-GAAP measurement of credit reserves that is calculated by adjusting the ALLL and loans and leases held for investment by the unamortized fair value mark. Truist's management uses these measures to assess loss absorption capacity.
A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure is included in the appendix to Truist's Second Quarter 2022 Earnings Presentation, which is available at https://ir.truist.com/earnings.
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, regarding the financial condition, results of operations, business plans and the future performance of Truist. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "may," "will," "should," "would," "could" and other similar expressions are intended to identify these forward-looking statements.
Forward-looking statements are not based on historical facts but instead represent management's expectations and assumptions regarding Truist's business, the economy, and other future conditions. Such statements involve inherent uncertainties, risks, and changes in circumstances that are difficult to predict. As such, Truist's actual results may differ materially from those contemplated by forward-looking statements. While there can be no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those contemplated by forward-looking statements include the following, without limitation, as well as the risks and uncertainties more fully discussed under Part I, Item 1A-Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021 and in Truist's subsequent filings with the Securities and Exchange Commission:
- residual risks and uncertainties relating to the Merger of heritage BB&T and heritage SunTrust, including the ability to realize the anticipated benefits of the Merger;
- expenses relating to the Merger and application and data center decommissioning;
- deposit attrition, client loss or revenue loss following completed mergers or acquisitions may be greater than anticipated;
- the COVID-19 pandemic disrupted the global economy and adversely impacted Truist's financial condition and results of operations, including through increased expenses, reduced fee income and net interest margin, decreased demand for certain types of loans, and increases in the allowance for credit losses; a resurgence of the pandemic, whether due to new variants of the coronavirus or other factors, could reintroduce or prolong these negative impacts and also adversely affect Truist's capital and liquidity position or cost of capital, impair the ability of borrowers to repay outstanding loans, cause an outflow of deposits, and impair goodwill or other assets;
- Truist is subject to credit risk by lending or committing to lend money, and may have more credit risk and higher credit losses to the extent that loans are concentrated by loan type, industry segment, borrower type or location of the borrower or collateral;
- changes in the interest rate environment, including the replacement of LIBOR as an interest rate benchmark, which could adversely affect Truist's revenue and expenses, the value of assets and obligations, and the availability and cost of capital, cash flows, and liquidity;
- inability to access short-term funding or liquidity, loss of client deposits or changes in Truist's credit ratings, which could increase the cost of funding or limit access to capital markets;
- risk management oversight functions may not identify or address risks adequately, and management may not be able to effectively manage credit risk;
- risks resulting from the extensive use of models in Truist's business, which may impact decisions made by management and regulators;
- failure to execute on strategic or operational plans, including the ability to successfully complete or integrate mergers and acquisitions;
- increased competition, including from (i) new or existing competitors that could have greater financial resources or be subject to different regulatory standards, and (ii) products and services offered by non-bank financial technology companies, may reduce Truist's client base, cause Truist to lower prices for its products and services in order to maintain market share or otherwise adversely impact Truist's businesses or results of operations;
- failure to maintain or enhance Truist's competitive position with respect to new products, services and technology, whether it fails to anticipate client expectations or because its technological developments fail to perform as desired or do not achieve market acceptance or regulatory approval or for other reasons, may cause Truist to lose market share or incur additional expense;
- negative public opinion, which could damage Truist's reputation;
- increased scrutiny regarding Truist's consumer sales practices, training practices, incentive compensation design, and governance;
- regulatory matters, litigation or other legal actions, which may result in, among other things, costs, fines, penalties, restrictions on Truist's business activities, reputational harm, negative publicity, or other adverse consequences;
- evolving legislative, accounting and regulatory standards, including with respect to climate, capital, and liquidity requirements, and results of regulatory examinations may adversely affect Truist's financial condition and results of operations;
- the monetary and fiscal policies of the federal government and its agencies, including in response to rising inflation, could have a material adverse effect on profitability;
- accounting policies and processes require management to make estimates about matters that are uncertain, including the potential write down to goodwill if there is an elongated period of decline in market value for Truist's stock and adverse economic conditions are sustained over a period of time;
- general economic or business conditions, either globally, nationally or regionally, may be less favorable than expected, and instability in global geopolitical matters or volatility in financial markets could result in, among other things, slower deposit or asset growth, a deterioration in credit quality, or a reduced demand for credit, insurance, or other services;
- risks related to originating and selling mortgages, including repurchase and indemnity demands from purchasers related to representations and warranties on loans sold, which could result in an increase in the amount of losses for loan repurchases;
- risks relating to Truist's role as a loan servicer, including an increase in the scope or costs of the services Truist is required to perform, without any corresponding increase in servicing fees or a breach of Truist's obligations as servicer;
- Truist's success depends on hiring and retaining key teammates, and if these individuals leave or change roles without effective replacements, Truist's operations and integration activities could be adversely impacted, which could be exacerbated in the increased work-from-home environment caused by the COVID-19 pandemic as job markets may be less constrained by physical geography;
- fraud or misconduct by internal or external parties, which Truist may not be able to prevent, detect, or mitigate;
- security risks, including denial of service attacks, hacking, social engineering attacks targeting Truist's teammates and clients, malware intrusion, data corruption attempts, system breaches, cyber-attacks, which have increased in frequency with current geopolitical tensions, identity theft, ransomware attacks, and physical security risks, such as natural disasters, environmental conditions, and intentional acts of destruction, could result in the disclosure of confidential information, adversely affect Truist's business or reputation or create significant legal or financial exposure; and
- widespread outages of operational, communication, or other systems, whether internal or provided by third parties, natural or other disasters (including acts of terrorism and pandemics), and the effects of climate change, including physical risks, such as more frequent and intense weather events, and risks related to the transition to a lower carbon economy, such as regulatory or technological changes or shifts in market dynamics or consumer preferences, could have an adverse effect on Truist's financial condition and results of operations, lead to material disruption of Truist's operations or the ability or willingness of clients to access Truist's products and services.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by applicable law or regulation, Truist undertakes no obligation to revise or update any forward-looking statements.
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SOURCE Truist Financial Corporation
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