filings.toolsTruist Financial (TFC) 10-K risk factor changes: FY2023 vs FY2022
The 2023-12-31 10-K against the 2022-12-31 one, compared heading by heading and sentence by sentence.
Item 1A168 rewritten167 added93 removed288 unchanged
All filing items1,785 rewritten1,360 added911 removed3,793 unchanged
Summary
counted, not written
- Item 1A lists 92 risk factor headings: 51 new, 27 reworded and 14 unchanged since FY2022. 55 headings from FY2022 no longer appear.
- Sentence by sentence, 1,360 added, 911 removed, 1,785 rewritten and 3,793 unchanged across 16 items that differ.
- New this year: Item 1C. CYBERSECURITY.
New Item 1A headings (51)
- •The levels of or changes in interest rates could affect our results of operations and financial condition.Interest rates
- •The political environment and monetary and fiscal policies could adversely affect us.
- •Inflation could negatively impact our business and financial results.
- •Geopolitical conditions, military conflicts, acts or threats of terrorism, and related volatility and instability in global economic and market conditions could adversely affect us.
- •The Company is subject to credit risk by lending, committing to lend money, and entering into letters of credit and other types of contracts with counterparties and the Company’s allowance for loan losses may not be adequate to cover actual losses.
- •The Company may have more credit risk and higher credit losses if our underwriting standards and practices are inadequate, we adopt more liberal underwriting standards for competitive or other reasons, or our concentration and other risk limits are not well calibrated.
- •A disruption in our access to the mortgage secondary market and GSEs for liquidity could negatively affect us.
- •The Company’s cost of funding or access to the banking and capital markets could be adversely affected if our credit ratings are downgraded or otherwise fail to meet investor expectations.
- •Truist is heavily reliant on technology, and a failure to effectively anticipate, develop, and implement new technology could harm us.
- •Physical, transition, and other risks associated with climate change, together with governmental responses to them, may negatively impact our business, operations, reputation, and clients.
- •Natural disasters, pandemics, and other catastrophic events could adversely impact us.
- •Truist is subject to extensive and evolving government regulation and supervision, which could adversely affect our business, financial condition, results of operations, and prospects.
- •Regulatory capital and liquidity standards and future revisions to them may negatively impact our business and financial results.
- •Truist is subject to risks related to originating and selling loans, including repurchase and indemnification obligations.
- •Ineffective execution of strategic initiatives could adversely affect investor sentiment and our business and financial results.
- •Competition may reduce Truist’s client base or cause Truist to modify the pricing or other terms for products and services, which could have an adverse impact on our business and financial results.
- •Acquisitions, mergers, and divestitures introduce a broad range of anticipated and unanticipated risks, including unforeseen or negative consequences from supervisory or regulatory action that may limit Truist’s ability to pursue and complete them.
- •Negative public opinion, whether real or perceived, or our failure to successfully manage it could damage the Company’s reputation and adversely impact our business, financial condition, results of operations, and prospects.
- •Truist may face reputational risks arising out of Truist’s sales, training, incentive compensation or business practices, products or services, or other activities of its teammates, representatives, or business partners.
- •We could be harmed by an inability to attract, develop, retain, and motivate qualified teammates while effectively managing recruiting and compensation costs amid highly competitive and rapidly changing market conditions.
- •Our business and operations make extensive use of models, and we could be adversely affected if our design, implementation, or use of models is flawed.
- •We use estimates and assumptions in determining the value or amount of many of our assets and liabilities, and our business, financial condition, results of operations, and prospects could be adversely affected if these prove to be incorrect.
- •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.
- •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.
- The levels of or changes in interest rates could affect our results of operations and financial condition.Interest rates
- The Company’s hedging strategies may not be successful in mitigating our interest rate, foreign exchange, and market risks, which could adversely affect our financial results.Interest rates
- The political environment and monetary and fiscal policies could adversely affect us.
- Inflation could negatively impact our business and financial results.
- Geopolitical conditions, military conflicts, acts or threats of terrorism, and related volatility and instability in global economic and market conditions could adversely affect us.
- The Company is subject to credit risk by lending, committing to lend money, and entering into letters of credit and other types of contracts with counterparties and the Company’s allowance for loan losses may not be adequate to cover actual losses.
- The Company may have more credit risk and higher credit losses if our underwriting standards and practices are inadequate, we adopt more liberal underwriting standards for competitive or other reasons, or our concentration and other risk limits are not well calibrated.
- Our inability to retain and grow deposits or a change in deposit costs or mix could negatively impact our funding strategy and financial results.
- A disruption in our access to the mortgage secondary market and GSEs for liquidity could negatively affect us.
- The Company’s cost of funding or access to the banking and capital markets could be adversely affected if our credit ratings are downgraded or otherwise fail to meet investor expectations.
- The financial system is highly interrelated, and financial or systemic shocks or the failure of even a single financial institution or other participant in the financial system could adversely impact us.
- Truist is heavily reliant on technology, and a failure to effectively anticipate, develop, and implement new technology could harm us.
- Physical, transition, and other risks associated with climate change, together with governmental responses to them, may negatively impact our business, operations, reputation, and clients.
- Natural disasters, pandemics, and other catastrophic events could adversely impact us.
- Truist is subject to extensive and evolving government regulation and supervision, which could adversely affect our business, financial condition, results of operations, and prospects.
- Regulatory capital and liquidity standards and future revisions to them may negatively impact our business and financial results.
- Truist is subject to risks related to originating and selling loans, including repurchase and indemnification obligations.
- Ineffective execution of strategic initiatives could adversely affect investor sentiment and our business and financial results.
- Competition may reduce Truist’s client base or cause Truist to modify the pricing or other terms for products and services, which could have an adverse impact on our business and financial results.
- Acquisitions, mergers, and divestitures introduce a broad range of anticipated and unanticipated risks, including unforeseen or negative consequences from supervisory or regulatory action that may limit Truist’s ability to pursue and complete them.
- Negative public opinion, whether real or perceived, or our failure to successfully manage it could damage the Company’s reputation and adversely impact our business, financial condition, results of operations, and prospects.
- Truist may face reputational risks arising out of Truist’s sales, training, incentive compensation or business practices, products or services, or other activities of its teammates, representatives, or business partners.
- We could be harmed by an inability to attract, develop, retain, and motivate qualified teammates while effectively managing recruiting and compensation costs amid highly competitive and rapidly changing market conditions.
- Our business and operations make extensive use of models, and we could be adversely affected if our design, implementation, or use of models is flawed.
- We use estimates and assumptions in determining the value or amount of many of our assets and liabilities, and our business, financial condition, results of operations, and prospects could be adversely affected if these prove to be incorrect.
- 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.
- 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.
Removed Item 1A headings (55)
- •Changes in interest rates could adversely affect revenue and expenses, the value of assets and liabilities, as well as the availability and cost of capital, and liquidity.
- •The monetary and fiscal policies of the U.S. federal government could have a material adverse effect on profitability.
- •Inflation could negatively impact our business, our profitability, and our stock price.
- •Instability in global economic conditions and geopolitical matters, as well as volatility in financial markets, could have a material adverse effect on the Company’s results of operations and financial condition.
- •The Company is subject to credit risk by lending, committing to lend money, or entering into a letter of credit or other types of contracts with counterparties.
- •The Company 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.
- •Truist relies on the mortgage secondary market and GSEs for some of the Company’s liquidity.
- •Any reduction in the Company’s credit ratings could increase the Company’s cost of funding or reduce its access to the capital markets.
- •Truist may be impacted by the soundness of other financial institutions.
- •Truist will continually encounter technological change and must effectively anticipate, develop, and implement new technology.
- •The effects of COVID-19 adversely impacted the Company’s operations and financial performance and similar adverse impacts resulting from pandemics could occur in future periods.
- •Physical, transition, or other risks associated with climate change have the potential to negatively impact operations, business results, and clients.
- •Natural disasters and other catastrophic events, which may increase in frequency and intensity due to climate change, could have a material adverse impact on the Company’s operations or the Company’s financial condition and results.
- •Truist is subject to extensive and evolving government regulation and supervision, which could increase the cost of doing business, limit Truist’s ability to make investments and generate revenue, and lead to costly enforcement actions.
- •Truist is subject to regulatory capital and liquidity standards that affect the Company’s business, operations, and ability to pay dividends, or otherwise return capital to shareholders.
- •Truist is subject to certain risks related to originating and selling mortgages and may be required to repurchase mortgage loans or indemnify mortgage loan purchasers.
- •Truist may face the risk of financial loss or negative impact resulting from ineffective strategy setting and execution, adverse business decisions, or lack of responsiveness to changes in the external environment.
- •Competition may reduce Truist’s client base or cause Truist to modify pricing for products and services.
- •Truist may not be able to complete future mergers or acquisitions.
- •Negative public opinion could damage the Company’s reputation and adversely impact business and revenues.
- •Scrutiny of the Company’s sales, training, and incentive compensation practices could damage the Company’s reputation and adversely impact business and revenues.
- •The Company depends on the ability to attract and retain qualified teammates while effectively managing recruiting and compensation costs amid highly competitive and rapidly changing market conditions in order to implement and execute upon business strategies.
- •There are risks resulting from the extensive use of models in Truist’s business, which may impact decisions made by Management and regulators.
- •The Company’s accounting policies and processes are critical to how the Company reports its financial condition and results of operations and require management to make estimates about matters that are uncertain.
- •Truist relies on other companies to provide key components of the Company’s business infrastructure.
- •Truist depends on the accuracy and completeness of information about clients and counterparties.
- Changes in interest rates could adversely affect revenue and expenses, the value of assets and liabilities, as well as the availability and cost of capital, and liquidity.
- The monetary and fiscal policies of the U.S. federal government could have a material adverse effect on profitability.
- Inflation could negatively impact our business, our profitability, and our stock price.
- Instability in global economic conditions and geopolitical matters, as well as volatility in financial markets, could have a material adverse effect on the Company’s results of operations and financial condition.
- The replacement of LIBOR could adversely affect Truist’s profitability and financial condition.
- The Company is subject to credit risk by lending, committing to lend money, or entering into a letter of credit or other types of contracts with counterparties.
- The Company 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.
- Loss of deposits or a change in deposit mix could increase Truist’s funding costs.
- Truist relies on the mortgage secondary market and GSEs for some of the Company’s liquidity.
- Any reduction in the Company’s credit ratings could increase the Company’s cost of funding or reduce its access to the capital markets.
- Truist may be impacted by the soundness of other financial institutions.
- The Company faces cybersecurity risks, including denial of service, phishing, malware and ransomware attacks, potential insider threats, and third-party cybersecurity incidents, which could result in the disclosure of confidential information, adversely affect the Company’s operations, cause reputational damage, and create significant legal and financial exposure.
- Truist will continually encounter technological change and must effectively anticipate, develop, and implement new technology.
- The effects of COVID-19 adversely impacted the Company’s operations and financial performance and similar adverse impacts resulting from pandemics could occur in future periods.
- Physical, transition, or other risks associated with climate change have the potential to negatively impact operations, business results, and clients.
- Natural disasters and other catastrophic events, which may increase in frequency and intensity due to climate change, could have a material adverse impact on the Company’s operations or the Company’s financial condition and results.
- Truist is subject to extensive and evolving government regulation and supervision, which could increase the cost of doing business, limit Truist’s ability to make investments and generate revenue, and lead to costly enforcement actions.
- Truist is subject to regulatory capital and liquidity standards that affect the Company’s business, operations, and ability to pay dividends, or otherwise return capital to shareholders.
- Truist is subject to certain risks related to originating and selling mortgages and may be required to repurchase mortgage loans or indemnify mortgage loan purchasers.
- Truist may face the risk of financial loss or negative impact resulting from ineffective strategy setting and execution, adverse business decisions, or lack of responsiveness to changes in the external environment.
- Competition may reduce Truist’s client base or cause Truist to modify pricing for products and services.
- Truist may not be able to complete future mergers or acquisitions.
- Negative public opinion could damage the Company’s reputation and adversely impact business and revenues.
- Scrutiny of the Company’s sales, training, and incentive compensation practices could damage the Company’s reputation and adversely impact business and revenues.
- The Company depends on the ability to attract and retain qualified teammates while effectively managing recruiting and compensation costs amid highly competitive and rapidly changing market conditions in order to implement and execute upon business strategies.
- There are risks resulting from the extensive use of models in Truist’s business, which may impact decisions made by Management and regulators.
- The Company’s accounting policies and processes are critical to how the Company reports its financial condition and results of operations and require management to make estimates about matters that are uncertain.
- Truist relies on other companies to provide key components of the Company’s business infrastructure.
- Truist depends on the accuracy and completeness of information about clients and counterparties.
Reworded Item 1A headings (27)
- •Financial results,
[removed: lending or][added: lending, and] other business activities could be[removed: materially][added: adversely] affected by[removed: a deterioration of][added: weak or deteriorating] economic conditions. - •The Company may suffer losses if the value of collateral declines in [added: weak, deteriorating, or] stressed [added: economic or] market conditions.
- •Truist’s liquidity could be impaired by an inability to access short-term funding, an unforeseen outflow of cash, or
[removed: the][added: an] inability to monetize liquid assets. - •The Parent Company could have less access to funding sources and its liquidity could be constrained if the Bank becomes unable to pay
[removed: dividends during a time of stress.][added: dividends.] - •The Company’s [added: operating systems and infrastructure, as well as] operational capabilities managed or supplied by third parties [added: on whom we rely,] could
[removed: fail,][added: fail or] be [added: interrupted,] compromised, or[removed: be]breached, which could disrupt the Company’s business and adversely impact the Company’s[removed: results of]operations,[removed: and]financial condition, [added: and prospects,] as well as cause[removed: legal exposure or][added: significant] reputational[removed: harm.][added: damage and legal and financial exposure.] - •The Company faces risks associated with [added: the] quality, availability, and retention of key data for operational, strategic, regulatory, and compliance purposes.
- •An outbreak or escalation of hostilities between countries or within a country or region could have
[removed: a material][added: an] adverse effect on the U.S. economy and on Truist’s[removed: businesses.][added: business operations and key external parties.] - •Differences in regulation [added: and supervision] can affect the Company’s ability to compete effectively.
- •The Company can face risks of non-compliance and incur
[removed: higher][added: additional] operational and compliance costs under laws[removed: and regulations]relating to anti-money laundering, economic sanctions, embargo programs, and anti-corruption. - •The Company may incur [added: damages,] fines,
[removed: penalties][added: penalties,] and other negative consequences from [added: past, current, or future] regulatory [added: or other legal] violations, including inadvertent or unintentional violations. [removed: •Legal][added: •Pending or threatened legal] proceedings [added: and other matters] may adversely affect the Company’s[removed: results, reputation,][added: business, financial condition, results of operations,] and[removed: business operations.][added: reputation.]- •Truist depends on the [added: experience and] expertise of key teammates. If these individuals [added: were to] leave or change their roles without effective replacements, [added: our business and] operations may suffer.
- •The Company’s framework for managing risks [added: and mitigating losses] may not be effective.
- Financial results,
[removed: lending or][added: lending, and] other business activities could be[removed: materially][added: adversely] affected by[removed: a deterioration of][added: weak or deteriorating] economic conditions. - The Company may suffer losses if the value of collateral declines in [added: weak, deteriorating, or] stressed [added: economic or] market conditions.
- Truist’s liquidity could be impaired by an inability to access short-term funding, an unforeseen outflow of cash, or
[removed: the][added: an] inability to monetize liquid assets. - The Parent Company could have less access to funding sources and its liquidity could be constrained if the Bank becomes unable to pay
[removed: dividends during a time of stress.][added: dividends.] - The Company’s [added: operating systems and infrastructure, as well as] operational capabilities managed or supplied by third parties [added: on whom we rely,] could
[removed: fail,][added: fail or] be [added: interrupted,] compromised, or[removed: be]breached, which could disrupt the Company’s business and adversely impact the Company’s[removed: results of]operations,[removed: and]financial condition, [added: and prospects,] as well as cause[removed: legal exposure or][added: significant] reputational[removed: harm.][added: damage and legal and financial exposure.] - The Company faces risks associated with [added: the] quality, availability, and retention of key data for operational, strategic, regulatory, and compliance purposes.
- An outbreak or escalation of hostilities between countries or within a country or region could have
[removed: a material][added: an] adverse effect on the U.S. economy and on Truist’s[removed: businesses.][added: business operations and key external parties.] - Truist faces substantial
[removed: legal and operational]risks in safeguarding personal [added: and other sensitive] information. - Differences in regulation [added: and supervision] can affect the Company’s ability to compete effectively.
- The Company can face risks of non-compliance and incur
[removed: higher][added: additional] operational and compliance costs under laws[removed: and regulations]relating to anti-money laundering, economic sanctions, embargo programs, and anti-corruption. - The Company may incur [added: damages,] fines,
[removed: penalties][added: penalties,] and other negative consequences from [added: past, current, or future] regulatory [added: or other legal] violations, including inadvertent or unintentional violations. [removed: Legal][added: Pending or threatened legal] proceedings [added: and other matters] may adversely affect the Company’s[removed: results, reputation,][added: business, financial condition, results of operations,] and[removed: business operations.][added: reputation.]- Truist depends on the [added: experience and] expertise of key teammates. If these individuals [added: were to] leave or change their roles without effective replacements, [added: our business and] operations may suffer.
- The Company’s framework for managing risks [added: and mitigating losses] may not be effective.
A heading is new when no FY2022 heading matches it after ignoring case and punctuation, and reworded when it shares at least 60 percent of its words with one that went away. All current risk factor headings.
Sentences by item
21 items, with every count and a link to each item that changed
Underlined words on a shaded ground are new in FY2023; struck-through words were in FY2022. Sentences that are wholly new or wholly gone are labelled rather than marked.
Item 1A. RISK FACTORS
168 rewritten, 167 added, 93 removed, 288 unchanged
*•Inflation could negatively impact our [removed: business, our profitability,] [added: business] and [removed: our stock price.*][added: financial results.*]
*•Financial results, [removed: lending or] [added: lending, and] other business activities could be [removed: materially] [added: adversely] affected by [removed: a deterioration of] [added: weak or deteriorating] economic conditions.*
[removed: *•Instability] [added: Instability] in global economic conditions and geopolitical matters, as well as volatility in financial markets, could have [removed: a material] [added: an] adverse effect on the Company’s results of operations and financial [removed: condition.*][added: condition.]
[removed: - *The replacement of LIBOR] [added: Any such losses] could adversely affect [removed: Truist’s profitability] [added: the Company’s results of operations] and financial [removed: condition.*][added: condition.]
*•The Company is subject to credit risk by lending, committing to lend money, [removed: or] [added: and] entering into [removed: a letter] [added: letters] of credit [removed: or] [added: and] other types of contracts with [removed: counterparties.*][added: counterparties and the Company’s allowance for loan losses may not be adequate to cover actual losses.*]
*•The Company may suffer losses if the value of collateral declines in [added: weak, deteriorating, or] stressed [added: economic or] market conditions.*
*•Truist’s liquidity could be impaired by an inability to access short-term funding, an unforeseen outflow of cash, or [removed: the] [added: an] inability to monetize liquid assets.*
*•The Parent Company could have less access to funding sources and its liquidity could be constrained if the Bank becomes unable to pay [removed: dividends during a time of stress.*][added: dividends.*]
- *The Company [removed: faces] [added: and its suppliers face a wide array of] cybersecurity risks, including [removed: denial] [added: risks] of [removed: service, phishing, malware and ransomware attacks, potential] insider [removed: threats,] [added: threats] and third-party cybersecurity incidents, which could result in the [added: loss of operational capabilities or the] disclosure of [removed: confidential] [added: confidential, proprietary, personal, and other sensitive] information, [removed: adversely affect] [added: which could have an adverse impact on] the Company’s operations, [added: financial condition, and prospects, as well as] cause [added: significant] reputational [removed: damage,] [added: damage] and [removed: create significant] legal and financial exposure.*
*•The Company’s [added: operating systems and infrastructure, as well as] operational capabilities managed or supplied by third parties [added: on whom we rely,] could [removed: fail,] [added: fail or] be [added: interrupted,] compromised, or [removed: be] breached, which could disrupt the Company’s business and adversely impact the Company’s [removed: results of] operations, [removed: and] financial condition, [added: and prospects,] as well as cause [removed: legal exposure or] [added: significant] reputational [removed: harm.*][added: damage and legal and financial exposure.*]
*•The Company faces risks associated with [added: the] quality, availability, and retention of key data for operational, strategic, regulatory, and compliance purposes.*
*•Physical, transition, [removed: or] [added: and] other risks associated with climate [removed: change have the potential] [added: change, together with governmental responses] to [added: them, may] negatively impact [added: our business,] operations, [removed: business results,] [added: reputation,] and clients.*
*•An outbreak or escalation of hostilities between countries or within a country or region could have [removed: a material] [added: an] adverse effect on the U.S. economy and on Truist’s [removed: businesses.*][added: business operations and key external parties.*]
[removed: 18] [added: 36] Truist Financial Corporation
*•Truist is subject to [removed: certain] risks related to originating and selling [removed: mortgages and may be required to] [added: loans, including] repurchase [removed: mortgage loans or indemnify mortgage loan purchasers.*][added: and indemnification obligations.*]
- *Truist faces substantial [removed: legal and operational] risks in safeguarding personal [added: and other sensitive] information.*
*•Differences in regulation [added: and supervision] can affect the Company’s ability to compete effectively.*
*•The Company can face risks of non-compliance and incur [removed: higher] [added: additional] operational and compliance costs under laws [removed: and regulations] relating to anti-money laundering, economic sanctions, embargo programs, and anti-corruption.*
*•Competition may reduce Truist’s client base or cause Truist to modify [added: the] pricing [added: or other terms] for products and [removed: services.*][added: services, which could have an adverse impact on our business and financial results.*]
*•The Company may incur [added: damages,] fines, [removed: penalties] [added: penalties,] and other negative consequences from [added: past, current, or future] regulatory [added: or other legal] violations, including inadvertent or unintentional violations.*
[removed: *•Legal] [added: *•Pending or threatened legal] proceedings [added: and other matters] may adversely affect the Company’s [removed: results, reputation,] [added: business, financial condition, results of operations,] and [removed: business operations.*][added: reputation.*]
*•Negative public [removed: opinion] [added: opinion, whether real or perceived, or our failure to successfully manage it] could damage the Company’s reputation and adversely impact [removed: business] [added: our business, financial condition, results of operations,] and [removed: revenues.*][added: prospects.*]
*•Truist depends on the [added: experience and] expertise of key teammates.
If these individuals [added: were to] leave or change their roles without effective replacements, [added: our business and] operations may suffer.*
[removed: *•The Company depends on the ability] [added: *•We could be harmed by an inability] to [removed: attract] [added: attract, develop, retain,] and [removed: retain] [added: motivate] qualified teammates while effectively managing recruiting and compensation costs amid highly competitive and rapidly changing market [removed: conditions in order to implement and execute upon business strategies.*][added: conditions.*]
*•The Company’s operations rely on its ability, and the ability of key external parties, to maintain appropriately staffed [removed: workforces,] [added: workforces] and on the competence, trustworthiness, [removed: health] [added: health,] and safety of employees.*
*•The Company’s framework for managing risks [added: and mitigating losses] may not be effective.*
[removed: *•Truist] [added: *•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.*
Additional risks that are not presently known or risks deemed immaterial may have [removed: a material] [added: an] adverse effect on Truist’s financial condition, results of operations, business, and prospects.
- [removed: materially] [added: adversely] affect the value of financial assets and liabilities;
[removed: The] [added: During 2022 and 2023, the] FRB raised interest rates significantly and [removed: began shrinking] [added: shrank] its balance sheet [removed: during 2022] in response to inflation measures that were well above the FRB’s two percent target.
*Inflation could negatively impact our [removed: business, our profitability,] [added: business] and [removed: our stock price.*][added: financial results.*]
*Financial results, [removed: lending or] [added: lending, and] other business activities could be [removed: materially] [added: adversely] affected by [removed: a deterioration of] [added: weak or deteriorating] economic conditions.*
[removed: The war in Ukraine presents] [added: Global conflicts present] destabilizing forces, including higher and more volatile commodity and food prices, which may cause international and domestic economic deterioration.
Financial markets may be adversely affected by the current or anticipated impact of military [removed: conflict, including the war in Ukraine,] [added: or global conflicts,] terrorism, or other geopolitical events.
This could magnify inflationary pressure [removed: resulting from the pandemic] and [removed: other sources and] extend any prolonged period of higher inflation.
*The Company is subject to credit risk by lending, committing to lend money, [removed: or] [added: and] entering into [removed: a letter] [added: letters] of credit [removed: or] [added: and] other types of contracts with [removed: counterparties.*][added: counterparties and the Company’s allowance for loan losses may not be adequate to cover actual losses.*]
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 [removed: identified.][added: identified and that its allowance for loan losses may not be adequate to cover actual losses.]
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 [removed: economic,] [added: economic conditions,] market conditions, or climate change.
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 [removed: materially] higher credit losses.
- *The Company’s hedging strategies may not be successful in mitigating our interest rate, foreign exchange, and market risks, which could adversely affect our financial results.*
*•The political environment and monetary and fiscal policies could adversely affect us.*
*•Geopolitical conditions, military conflicts, acts or threats of terrorism, and related volatility and instability in global economic and market conditions could adversely affect us.*
*•The Company may have more credit risk and higher credit losses if our underwriting standards and practices are inadequate, we adopt more liberal underwriting standards for competitive or other reasons, or our concentration and other risk limits are not well calibrated.*
- *Our inability to retain and grow deposits or a change in deposit costs or mix could negatively impact our funding strategy and financial results.*
*•A disruption in our access to the mortgage secondary market and GSEs for liquidity could negatively affect us.*
*•The Company’s cost of funding or access to the banking and capital markets could be adversely affected if our credit ratings are downgraded or otherwise fail to meet investor expectations.*
- *The financial system is highly interrelated, and financial or systemic shocks or the failure of even a single financial institution or other participant in the financial system could adversely impact us.*
*•Truist is heavily reliant on technology, and a failure to effectively anticipate, develop, and implement new technology could harm us.*
*•Natural disasters, pandemics, and other catastrophic events could adversely impact us.*
*•Truist is subject to extensive and evolving government regulation and supervision, which could adversely affect our business, financial condition, results of operations, and prospects.*
*•Regulatory capital and liquidity standards and future revisions to them may negatively impact our business and financial results.*
*•Ineffective execution of strategic initiatives could adversely affect investor sentiment and our business and financial results.*
*•Acquisitions, mergers, and divestitures introduce a broad range of anticipated and unanticipated risks, including unforeseen or negative consequences from supervisory or regulatory action that may limit Truist’s ability to pursue and complete them.*
*•Truist may face reputational risks arising out of Truist’s sales, training, incentive compensation or business practices, products or services, or other activities of its teammates, representatives, or business partners.*
*•Our business and operations make extensive use of models, and we could be adversely affected if our design, implementation, or use of models is flawed.*
*•We use estimates and assumptions in determining the value or amount of many of our assets and liabilities, and our business, financial condition, results of operations, and prospects could be adversely affected if these prove to be incorrect.*
*•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 levels of or changes in interest rates could affect our results of operations and financial condition.*
We are highly dependent on net interest income, which is the difference between interest income on earning assets, such as loans and investments, and interest expense on deposits and borrowings.
Net interest income is significantly affected by market rates of interest, which in turn are influenced by monetary and fiscal policies, general economic and market conditions, including high or increasing levels of inflation, the political and regulatory environments, business and consumer sentiment, competitive pressures, and expectations about the future, including future changes in interest rates.
We may be adversely affected by policies, laws, and events that have the effect of flattening or inverting the yield curve (that is, the difference between long-term and short-term interest rates), depressing the interest rates associated with our earning assets to levels near the rates associated with our interest expense, increasing the volatility of market rates of interest, including the rate of change, or changing the spreads among different interest rate indices.
The levels of or changes in interest rates could adversely affect us beyond our net interest income, including by increasing the cost or decreasing the availability of deposits or other variable-rate funding instruments, reducing the return on or demand for loans or increasing the prepayment speed of loans, increasing client or counterparty delinquencies or defaults and reducing the value of our loans, retained interests in securitizations, and fixed-income securities in our investment portfolio and the efficacy of our hedging strategies.
The level of and changes in market rates of interest and, as a result, these risks and uncertainties, are beyond our control.
The dynamics among these risks and uncertainties are also challenging to assess and manage.
For example, while an accommodative monetary policy may benefit us to some degree by spurring economic activity among our clients, such a policy may ultimately cause us more harm by inhibiting our ability to grow or sustain net interest income.
A rising interest rate environment can pose different challenges, such as potentially slowing the demand for credit, increasing delinquencies and defaults, and reducing the values of our loans and fixed income securities.
Market volatility in interest rates, including the rate of change, can create particularly difficult conditions.
Refer to the “Market Risk” section of the MD&A and “Note 19.
Derivative Financial Instruments.”
*The Company’s hedging strategies may not be successful in mitigating our interest rate, foreign exchange, and market risks, which could adversely affect our financial results.*
The Company employs various hedging strategies to mitigate the interest rate, foreign exchange, and market risks inherent in many of our assets and liabilities.
The Company’s hedging strategies rely considerably on assumptions and projections regarding our assets and liabilities as well as general market factors.
If any of these assumptions or projections prove to be incorrect or our hedges do not adequately mitigate the impact of changes in interest rates, foreign exchange rates, and other market factors, the Company may experience volatility in our earnings that could adversely affect our profitability and financial condition.
In addition, the Company may not be able to find market participants that are willing to act as its hedging counterparties on acceptable terms or at all, which could have an adverse effect on the success of ours hedging strategies.
The Company’s hedging strategies are not designed to eliminate all interest rate, foreign exchange, and market risks.
*The political environment and monetary and fiscal policies could adversely affect us.*
A fractious or volatile political environment in the U.S., including any related social unrest, could negatively impact business and market conditions, economic growth, financial stability, and business, consumer, investor, and regulatory sentiments, any one or more of which in turn could cause our business and financial results to suffer.
In addition, disruptions in the foreign relations of the United States could adversely affect industries and markets on which our business depends.
We also could be negatively impacted by political scrutiny of the financial-services industry in general or our business or operations in particular, whether or not warranted, and by an environment where criticizing financial-services providers or their activities is politically advantageous.
*•Changes in interest rates could adversely affect revenue and expenses, the value of assets and liabilities, as well as the availability and cost of capital, and liquidity.*
*•The monetary and fiscal policies of the U.S. federal government could have a material adverse effect on profitability.*
*•The Company 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.*
- *Loss of deposits or a change in deposit mix could increase Truist’s funding costs.*
*•Truist relies on the mortgage secondary market and GSEs for some of the Company’s liquidity.*
*•Any reduction in the Company’s credit ratings could increase the Company’s cost of funding or reduce its access to the capital markets.*
*•Truist may be impacted by the soundness of other financial institutions.*
*•Truist will continually encounter technological change and must effectively anticipate, develop, and implement new technology.*
*•The effects of COVID-19 adversely impacted the Company’s operations and financial performance and similar adverse impacts resulting from pandemics could occur in future periods.*
*•Natural disasters and other catastrophic events, which may increase in frequency and intensity due to climate change, could have a material adverse impact on the Company’s operations or the Company’s financial condition and results.*
*•Truist is subject to extensive and evolving government regulation and supervision, which could increase the cost of doing business, limit Truist’s ability to make investments and generate revenue, and lead to costly enforcement actions.*
*•Truist is subject to regulatory capital and liquidity standards that affect the Company’s business, operations, and ability to pay dividends, or otherwise return capital to shareholders.*
*•Truist may face the risk of financial loss or negative impact resulting from ineffective strategy setting and execution, adverse business decisions, or lack of responsiveness to changes in the external environment.*
*•Truist may not be able to complete future mergers or acquisitions.*
*•Scrutiny of the Company’s sales, training, and incentive compensation practices could damage the Company’s reputation and adversely impact business and revenues.*
*•There are risks resulting from the extensive use of models in Truist’s business, which may impact decisions made by Management and regulators.*
*•The Company’s accounting policies and processes are critical to how the Company reports its financial condition and results of operations and require management to make estimates about matters that are uncertain.*
*•Truist relies on other companies to provide key components of the Company’s business infrastructure.*
*Changes in interest rates could adversely affect revenue and expenses, the value of assets and liabilities, as well as the availability and cost of capital, and liquidity.*
Truist’s balance sheet can be sensitive to movements in market interest rates and spreads.
In addition to the impact of the general economy, changes in interest rates or in valuations in the debt or equity markets could directly impact the Company in one or more of the following ways:
- The yield on earning assets and rates paid on interest-bearing liabilities may change in disproportionate ways; or
- The value of financial instruments held could change adversely.
National, regional, and local economic conditions, competitive pressures and the policies of regulatory authorities affect interest income and interest expense.
When interest rates rise, funding costs may rise faster than the yield the Company earns on assets, causing net interest margin to contract.
Higher interest rates may also result in lower mortgage production income and elevated charge-offs in certain categories of the loan portfolio.
Conversely, when interest rates fall, the yield the Company earns on assets may fall faster than the Company’s ability to lower rates paid on deposits or borrowings.
*The monetary and fiscal policies of the U.S. federal government could have a material adverse effect on profitability.*
Changes in monetary and fiscal policies, including FRB policies, can adversely affect profitability and cannot be controlled or predicted by the Company.
The Federal Reserve may further increase interest rates in the near term.
*Instability in global economic conditions and geopolitical matters, as well as volatility in financial markets, could have a material adverse effect on the Company’s results of operations and financial condition.*
Instability in global economic conditions and geopolitical matters, as well as volatility in financial markets, could have a material adverse effect on the Company’s results of operations and financial condition.
In addition, global demand for products may exceed supply during the economic recovery from the COVID-19 pandemic, and such shortages may cause inflation, adversely impact consumer and business confidence, and adversely affect the economy as well as the Company’s financial condition and results.
*The replacement of LIBOR could adversely affect Truist’s profitability and financial condition.*
A transition away from the widespread use of LIBOR to alternative rates and other potential interest rate benchmark reforms will continue over the course of the next year.
The publication of the one-week and two-month U.S. dollar LIBOR settings ceased as of December 31, 2021, while certain U.S. dollar LIBOR tenors are expected to continue to be published until June 30, 2023.
A group of market participants convened by the FRB, the ARRC, has selected SOFR as its recommended alternative to U.S. dollar LIBOR.
Truist offers SOFR-based lending solutions to wholesale and consumer clients and enters into SOFR-based derivative contracts.
The passage of the Adjustable Interest Rate (LIBOR) Act by Congress, and the Federal Reserve’s implementing rule, should decrease the risk of contracts that are not remediated prior to the cessation deadline by providing the terms for a transition to SOFR.
Truist is also supporting “credit sensitive” alternatives, such as Bloomberg Short-Term Bank Yield and other alternatives as they develop in the market.
An excerpt. Shown here: 40 of 168 rewritten, 40 of 167 added and 40 of 93 removed. The counts are complete. For every sentence, read Item 1A. RISK FACTORS in the FY2023 filing and the FY2022 filing.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
533 rewritten, 417 added, 377 removed, 713 unchanged
For discussion of [removed: 2021] [added: 2022] results as compared to [removed: 2020] [added: 2021] results, see “Item 7.
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, [removed: 2021.][added: 2022.]
[removed: 40] Truist Financial Corporation [added: 81]
Net [added: loss to common shareholders totaled $1.5 billion, or $1.09 per share, for 2023, compared to net] income available to common shareholders [removed: totaled] [added: of] $5.9 [removed: billion for 2022, a 1.8% decrease] [added: billion, or $4.43 per share,] from the prior year.
[removed: Additionally, the] [added: - Results for] 2022 [removed: results include] [added: included merger-related and restructuring charges of $513 million ($393 million after-tax, or $0.29 per share); incremental operating expenses related to the Merger of $465 million ($356 million after-tax, or $0.27 per share);] a gain on the redemption of noncontrolling equity interest of $74 million ($57 million [removed: after-tax)] [added: after-tax, or $0.04 per share)] related to the acquisition of certain merchant services [removed: relationships,] [added: relationships; net losses on the sales of securities of $71 million ($54 million after-tax, or $0.04 per share); and] a gain on the early extinguishment of long-term debt of $39 million ($30 million [removed: after-tax), partially offset by net losses on the sales of securities of $71 million ($54 million after-tax).][added: after-tax, or $0.02 per share).]
| | | | | | | | | | | | | | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2022] [added: 2023] vs. [removed: 2021] [added: 2022] | | | | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | | | | |
| Net income [added: (loss)] available to common shareholders | | | | | | | | | | | | | | | | | | | | | $ | [removed: 5,927] [added: (1,452)] | | | | | $ | [removed: 6,033] [added: 5,927] | | | | | $ | [removed: 4,184] [added: 6,033] | | | | | $ | [removed: (106)] [added: (7,379)] | | | | | $ | [removed: 1,849] [added: (106)] | |
| Diluted earnings per common share | | | | | | | | | | | | | | | | | | | | | [removed: 4.43] [added: (1.09)] | | | | | | [removed: 4.47] [added: 4.43] | | | | | | [removed: 3.08] [added: 4.47] | | | | | | [removed: (0.04)] [added: (5.52)] | | | | | | [removed: 1.39] [added: (0.04)] | | |
| Net interest income - taxable equivalent | | | | | | | | | | | | | | | | | | | | | $ | [removed: 14,458] [added: 14,820] | | | | | $ | [removed: 13,114] [added: 14,458] | | | | | $ | [removed: 13,951] [added: 13,114] | | | | | $ | [removed: 1,344] [added: 362] | | | | | $ | [removed: (837)] [added: 1,344] | |
| Noninterest income | | | | | | | | | | | | | | | | | | | | | [removed: 8,719] [added: 8,790] | | | | | | [removed: 9,290] [added: 8,719] | | | | | | [removed: 8,879] [added: 9,290] | | | | | | [removed: (571)] [added: 71] | | | | | | [removed: 411] [added: (571)] | | |
| Total taxable-equivalent revenue | | | | | | | | | | | | | | | | | | | | | $ | [removed: 23,177] [added: 23,610] | | | | | $ | [removed: 22,404] [added: 23,177] | | | | | $ | [removed: 22,830] [added: 22,404] | | | | | $ | [removed: 773] [added: 433] | | | | | $ | [removed: (426)] [added: 773] | |
| Less taxable-equivalent adjustment | | | | | | | | | | | | | | | | | | | | | [removed: 142] [added: 220] | | | | | | [removed: 108] [added: 142] | | | | | | [removed: 125] [added: 108] | | | | | | | | | | | | | | |
| Total revenue | | | | | | | | | | | | | | | | | | | | | $ | [removed: 23,035] [added: 23,390] | | | | | $ | [removed: 22,296] [added: 23,035] | | | | | $ | [removed: 22,705] [added: 22,296] | | | | | | | | | | | | | |
| Return on average assets | | | | | | | | | | | | | | | | | | | | | [removed: 1.15] [added: (0.19)] | | % | | | | [removed: 1.23] [added: 1.15] | | % | | | | [removed: 0.90] [added: 1.23] | | % | | | | [removed: (0.08)] [added: (1.34)] | | % | | | | [removed: 0.33] [added: (0.08)] | | % |
| Return on average common shareholders’ equity | | | | | | | | | | | | | | | | | | | | | [removed: 10.4] [added: (2.6)] | | | | | | [removed: 9.7] [added: 10.4] | | | | | | [removed: 6.8] [added: 9.7] | | | | | | [removed: 0.7] [added: (13.0)] | | | | | | [removed: 2.9] [added: 0.7] | | |
| Net interest margin - taxable equivalent | | | | | | | | | | | | | | | | | | | | | [removed: 3.01] [added: 3.00] | | | | | | [removed: 2.86] [added: 3.01] | | | | | | [removed: 3.22] [added: 2.86] | | | | | | [removed: 0.15] [added: (0.01)] | | | | | | [removed: (0.36)] [added: 0.15] | | |
Truist’s revenue for [removed: 2022] [added: 2023] was [removed: $23.0] [added: $23.4] billion.
On a TE basis, revenue was [removed: $23.2] [added: $23.6] billion, which represents an increase of [removed: $773] [added: $433] million compared to [removed: 2021.][added: 2022.]
Net interest income on a TE basis was [removed: $14.5] [added: $14.8] billion, [removed: an increase of $1.3 billion] [added: up $362 million, or 2.5%,] primarily due to higher market interest rates [removed: coupled with strong loan growth] and [removed: well controlled deposit costs.][added: higher average loans.]
These increases were partially offset by [added: higher funding costs and] lower purchase accounting [removed: accretion and lower PPP revenue.][added: accretion.]
[removed: The growth in] NIM was negatively impacted by lower purchase accounting accretion, which benefited NIM by [removed: 13] [added: 5] basis points in [removed: 2022] [added: 2023] compared to [removed: 26] [added: 13] basis points in [removed: 2021.][added: 2022, partially offset by higher rates.]
The [removed: TE] yield on the average securities portfolio was [removed: 1.88%,] [added: 2.24% for 2023,] up [removed: 38] [added: 36] basis [removed: points.][added: points compared to the prior year.]
[added: -] The average cost of total deposits was [removed: 0.27%,] [added: 1.58% for 2023,] up [removed: 23] [added: 131] basis [removed: points.][added: points compared to the prior year.]
The average cost [removed: of] [added: on] long-term debt was [removed: 2.31%,] [added: 4.46% for 2023,] up [removed: 78] [added: 215] basis [removed: points.][added: points compared to the prior year.]
The provision for credit losses was [removed: $777 million,] [added: $2.1 billion for the year ended December 31, 2023] compared to [removed: a benefit of $813] [added: $777] million [removed: for the prior year.][added: in 2022.]
The provision for income taxes was [removed: $1.4 billion] [added: $862 million] for [removed: 2022,] [added: 2023,] compared to [removed: $1.6] [added: $1.4] billion to [removed: 2021.][added: 2022.]
[added: 82] Truist Financial Corporation [removed: 41]
Total liabilities at December 31, [removed: 2022] [added: 2023] were [removed: $494.7] [added: $476.1] billion, [removed: an increase] [added: a decrease] of [removed: $22.7] [added: $18.6] billion, or [removed: 4.8%,] [added: 3.8%,] from the prior year, reflecting [removed: an increase] [added: a decrease] of [removed: $18.1 billion] [added: $17.6 billion, or 4.3%,] in [removed: short-term borrowings] [added: deposits] and [removed: an increase] [added: a decrease] of [removed: $7.3] [added: $4.3] billion, or [removed: 20%,] [added: 9.9%,] in long-term debt, partially offset by [removed: a decrease] [added: an increase] of [removed: $3.0] [added: $1.4] billion, or [removed: 0.7%,] [added: 6.0%,] in [removed: deposits.][added: short-term borrowings.]
Total shareholders’ equity was [removed: $60.5] [added: $59.3] billion at December 31, [removed: 2022,] [added: 2023,] a decrease of [removed: $8.7] [added: $1.3] billion from December 31, [removed: 2021.][added: 2022.]
Truist’s book value per common share at December 31, [removed: 2022] [added: 2023] was [removed: $40.58,] [added: $39.31,] compared to [removed: $47.14] [added: $40.58] at December 31, [removed: 2021.][added: 2022.]
[added: -] Nonperforming loans and leases held for investment were [removed: 0.36%] [added: 0.44%] of loans and leases held for investment at December 31, [removed: 2022, down two] [added: 2023, up eight] basis points compared to December 31, [removed: 2021.][added: 2022.]
The ALLL ratio was [removed: 1.34%] [added: 1.54%,] compared to [removed: 1.53% for prior year.][added: 1.34% at December 31, 2022.]
The [removed: closing of the investment] [added: transaction] is expected to [removed: occur] [added: close] in the second quarter of [removed: 2023,] [added: 2024,] subject to customary closing conditions and regulatory approvals.
- [removed: More focus] [added: Focusing] on integrated relationship management to deepen [removed: relationships,] [added: relationships with core clients,] improve client experiences, [removed: and/or] [added: and] deliver the bank as One Team;
In addition, certain [removed: other] challenges and unforeseen events could have a near term impact on Truist’s financial condition and results of operations.
[removed: 42] Truist Financial Corporation [added: 83]
[removed: *2022] [added: *2023] compared to [removed: 2021*][added: 2022*]
[added: -] Average deposits [removed: increased $19.7] [added: decreased $17.0] billion, or [removed: 4.9%, and] [added: 4.1%, compared to the prior year while] average short-term borrowings increased [removed: $8.8] [added: $9.5] billion, or [removed: 142%, compared to the prior year, while] [added: 64%, and] average long-term debt [removed: decreased $3.2] [added: increased $15.5] billion, or [removed: 8.7%.][added: 45%.]
[removed: Net interest margin was 3.01%] [added: The net charge-off ratio] for the [added: current] year [removed: ended December 31, 2022,] [added: of 0.50% was] up [removed: 15] [added: 23] basis points compared to the prior year.
[added: -] The yield on the [added: average] total loan portfolio [removed: for the year ended December 31, 2022] was [removed: 4.36%,] [added: 6.12% for 2023,] up [removed: 41] [added: 176] basis [removed: points] [added: points,] compared to the prior [removed: year,] [added: year primarily] reflecting higher market interest rates, partially offset by lower purchase accounting [removed: accretion and lower PPP revenue.][added: accretion.]
Underlying results were positive for 2023 despite economic uncertainty stemming from bank failures in the first half of 2023.
Truist withstood the market stress by leaning on its strong core deposit base, ample liquidity, and diverse revenue streams across multiple businesses.
Results for 2023 included several discrete items, including a non-cash goodwill impairment charge that has no impact on our regulatory capital ratios, liquidity, ability to pay the common dividend, or service our clients.
We grew the number of new consumer and business checking accounts, experienced another strong year of growth in our insurance business, gained share in capital markets, and deepened our relationships with clients through Integrated Relationship Management, Business Lifecycle Advisory, and digital channels.
We also committed nearly $2.1 billion to support more than 15,000 units of affordable housing through Truist Community Capital, which helped create more than 15,000 jobs, and serve more than 130,000 people in low- and moderate-income communities in 2023.
Teammates impacted 5,300 organizations and causes through their charitable giving and more than 62,000 hours of volunteer service.
In addition, we started a Small Business Community Heroes initiative which empowers our branch teammates to proactively connect via caring conversations with small business owners who work tirelessly to serve our neighbors, create jobs, build our communities, and help drive our economy.
In addition, we unveiled an organizational simplification and cost savings plan in September 2023 aimed at limiting expenses in 2024 and beyond and simplifying our organization to gain efficiencies that will improve the client experience.
Our transformation is centered on improving efficiency as an organization and realigning certain aspects of our leadership and operating model within our operating segments to increase efficiency and drive revenue opportunities.
We made strong progress on our plan in the second half of 2023 as evidenced by a reduction in our headcount and the consolidation of several key business lines.
We accomplished all of this in 2023, while also strengthening our balance sheet.
We added 110 basis points of CET1 to finish the year with a CET1 ratio of 10.1% through a combination of organic capital generation and the minority stake sale in our insurance business, partially offset by the CECL phase in.
Although we are committed to building capital, our balance sheet remains open to core clients as our primary capital priorities are supporting the financial needs of new and existing clients and the payment of our common dividend.
Asset quality continues to normalize, but remains in-line relative to our expectations and allowance coverage ratios.
On October 2, 2023, Truist announced changes to its Board of Directors.
On December 31, 2023, directors Kelly S.
King, Nido R.
Qubein, David M.
Ratcliffe and Thomas N.
Thompson retired due to these directors reaching Truist’s mandatory retirement age.
In addition, Board members Anna R.
Cablik, Paul D.
Donahue, Easter A.
Maynard and Frank P.
Scruggs, Jr. decided to conclude their service as directors effective as of December 31, 2023.
The Board and Truist’s management express their deep appreciation to these directors for their dedicated service and many significant contributions to Truist.
Effective January 2024, several business activities were realigned within the segments.
First, the CB&W segment was renamed Consumer and Small Business Banking and the C&CB segment was renamed Wholesale Banking.
Second, the Wealth business was repositioned into a component of the Wholesale Banking segment from the CB&W segment.
Third, certain small business banking functions were repositioned into a component of the Consumer and Small Business Banking segment from the C&CB segment.
On February 20, 2024, the Company entered into an agreement to sell the remaining 80% stake of the common equity in TIH to an investor group led by Stone Point Capital LLC for a purchase price that implies an enterprise value for TIH of $15.5 billion, and is expected to result in cash proceeds to Truist of approximately $10.1 billion after-tax, reflecting certain closing adjustments for cash, debt and debt-like items, including the settlement of certain previously granted TIH awards, working capital, transaction expenses and an investor return amount associated with the originally sold 20% stake.
The transaction improves Truist’s relative capital position and allows Truist to maintain strategic flexibility.
Upon closing, the transaction will result in a full deconsolidation of the TIH subsidiary from Truist, and an expected gain equal to the excess of after-tax cash proceeds over Truist’s approximate $5.4 billion investment in its TIH subsidiary.
- Completing our transformation into a simpler, more efficient, and client-centric organization with leading financial results;
- Leveraging our existing platforms and increasing our efficiencies to gain market share;
- Building capital and maintaining strong risk controls and asset quality metrics.
- Results for 2023 included a non-cash goodwill impairment charge of $6.1 billion ($4.56 per share) which has no impact on our liquidity, regulatory capital ratios, or our ability to pay our common dividend and service our clients’ financial needs; the FDIC special assessment of $507 million ($387 million after-tax, or $0.29 per share); merger-related and restructuring charges of $375 million ($286 million after-tax, or $0.21 per share); and a discrete tax benefit of $204 million ($0.15 per share).
- Average earning assets increased $13.5 billion, or 2.8%, compared to the prior year primarily due to growth in average total loans of $15.5 billion, or 5.1%, and growth in other earning assets of $9.3 billion, or 46%, primarily due to an increase in balances held at the Federal Reserve to support liquidity build, partially offset by a $10.3 billion, or 7.0%, decrease in average securities.
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.
NIM was 3.00% for 2023, down one basis point compared to the prior year.
This year was a strategic turning point for Truist as we began to shift our focus to executional excellence and purposeful growth.
Results for 2022 were solid, reflecting post-integration momentum and progress in many areas.
Robust loan growth, significant margin expansion, and good cost discipline contributed to our strong performance.
Credit quality remains strong reflecting our conservative credit culture and diverse business mix.
We also delivered on our commitment to achieve positive operating leverage for the full-year 2022.
We fulfilled our purpose to inspire and build better lives and communities in many ways throughout the year.
We showed care for our teammates with a bold increase in our minimum wage; created new ways to meet clients’ needs through initiatives like Truist One Banking and enhanced digital offerings like Truist Assist, Truist Invest Pro, and Truist Trade; and supported our communities, including introducing a $120 million commitment to small businesses.
In addition, we exceeded our $60 billion Community Benefits Plan commitment that we established at the time of the Merger.
We continued to have strong momentum during the year with regards to other environmental, social and governance initiatives that we have undertaken.
We announced our goal to achieve net zero greenhouse gas emissions by 2050, which will help support our clients’ transition to a low-carbon economy.
In support of this goal, we joined the Partnership for Carbon Accounting Financials, and set 2030 goals to reduce Scope 1 and Scope 2 emissions by 35% each, and to reduce water consumption by 25%, relative to 2019.
With 17.2% of senior leadership roles being held by ethnically diverse teammates, we have exceeded our original goal and we aspire for continued growth in this area, and surpassed our goal of 10% spend with diverse suppliers in 2022.
Truist was ranked 5th overall within the JUST 100 list and recognized as one of Fortune Magazine’s Most Admired Companies.
Truist maintained strong capital and liquidity in 2022 and made a number of strategic investments to deploy capital and expand on its businesses.
During 2022, Truist made the following acquisitions:
- BankDirect Capital Finance, the insurance premium finance unit of Texas Capital Bancshares, which resulted in the addition of approximately $3.1 billion of loans;
- BenefitMall, one of the nation’s leading benefit wholesale general insurance agencies, to broaden the selection of products and services offered by IH’s wholesale insurance broker;
- Kensington Vanguard National Land Services, one of the largest independent full-service national title insurance agencies, to expand IH’s presence in the title insurance market; and
- A noncontrolling equity interest in SunTrust Merchant Services, LLC, in exchange for the rights to certain merchant banking relationships, including relationships previously referred by Truist to SunTrust Merchant Services, LLC.
Truist increased the quarterly common dividend 8% during the year and declared total common dividends of $2.00 per share during 2022.
The dividend payout ratio for 2022 was 45% compared to 41% for the prior year.
The total payout ratio for 2022 was 49% compared to 68% for the prior year.
On a diluted per common share basis, earnings for 2022 were $4.43, compared to $4.47 for 2021.
Truist’s results of operations for 2022 produced a return on average assets of 1.15% and a return on average common shareholders’ equity of 10.4% compared to prior year ratios of 1.23% and 9.7%, respectively.
Results include merger-related and restructuring charges of $513 million ($393 million after-tax) for 2022 compared to $822 million ($631 million after-tax) for 2021, and incremental operating expenses related to the Merger of $465 million ($356 million after-tax) for 2022 compared to $771 million ($592 million after-tax) for 2021.
The 2021 results include charitable contributions of $200 million ($153 million after-tax), an acceleration of loss recognition related to certain terminated cash flow hedges of $36 million ($28 million after tax), and a one-time professional fee expense of $30 million ($23 million after tax), partially offset by a small gain on extinguishment of debt.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
Average earning assets increased $22.3 billion, or 4.9%, compared to the earlier year.
The increase in average earning assets reflects a $13.4 billion, or 4.6%, increase in average outstanding loans and a $7.8 billion, or 5.6%, increase in average securities.
Average deposits increased $19.7 billion, or 4.9%, and average short-term borrowings increased $8.8 billion, or 142%, partially offset by a decrease in average long-term debt of $3.2 billion, or 8.7%, compared to the earlier year.
Noninterest income for 2022 decreased $571 million compared to 2021 primarily due to lower investment banking and mortgage banking income, partially offset by growth in insurance revenues.
NIM was 3.01% for 2022, up 15 basis points compared to the prior year primarily due to higher market interest rates and well controlled deposit costs.
The TE yield on the total loan portfolio for 2022 was 4.36%, up 41 basis points.
The average cost of interest-bearing deposits was 0.42%, up 36 basis points.
The increases in rates on assets and liabilities reflects the rising rate environment during 2022.
The current year reflects strong loan growth and a moderate decline in the ALLL ratio, whereas the prior year included reserve releases due to the improving economic environment during that period.
Net charge-offs were $823 million, compared to $697 million for the prior year.
The net charge-off ratio for the current year of 0.27% was up three basis points compared to the earlier year primarily driven by normalizing trends across certain consumer portfolios, partially offset by lower charge offs in the commercial and industrial portfolio.
Noninterest expense decreased $527 million, or 3.5%, compared to the prior year.
An excerpt. Shown here: 40 of 533 rewritten, 40 of 417 added and 40 of 377 removed. The counts are complete. For every sentence, read Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS in the FY2023 filing and the FY2022 filing.
Item 1. BUSINESS
90 rewritten, 82 added, 56 removed, 304 unchanged
[added: As a leading U.S. commercial bank,] Truist has leading market share in many [added: of the] high-growth markets [removed: in] [added: across] the country.
Headquartered in Charlotte, North Carolina, Truist is a [removed: top 10 U.S.] [added: top-10] commercial bank.
Truist Bank provides a wide range of banking and trust services for clients through [removed: 2,123] [added: 2,001] offices as of December 31, [removed: 2022] [added: 2023] and its digital platform.
| | | | Wealth management/private banking | | | | | | [removed: Payment solutions] [added: Mortgage warehouse lending] | | |
| | | | | | | % of Truist’s [removed: Deposits (2)] [added: Deposits(2)] | | | | | | Deposit Market Share [removed: Rank (2)] [added: Rank(2)] | | | | | | Number of [removed: Branches (3)] [added: Branches(3)] | | |
| Florida | | | | | | 23 | | % | | | | 3rd | | | | | | [removed: 472] [added: 452] | | |
| Georgia | | | | | | 19 | | | | | | 1st | | | | | | [removed: 222] [added: 213] | | |
| Virginia | | | | | | 15 | | | | | | 2nd | | | | | | [removed: 286] [added: 265] | | |
| Maryland | | | | | | 7 | | | | | | 3rd | | | | | | [removed: 155] [added: 145] | | |
| Tennessee | | | | | | 5 | | | | | | 4th | | | | | | [removed: 108] [added: 100] | | |
| South Carolina | | | | | | 4 | | | | | | 3rd | | | | | | [removed: 99] [added: 98] | | |
| West Virginia | | | | | | 2 | | | | | | 1st | | | | | | [removed: 48] [added: 43] | | |
| Kentucky | | | | | | 2 | | | | | | 4th | | | | | | [removed: 61] [added: 55] | | |
| Washington, D.C. | | | | | | [removed: 2] [added: 1] | | | | | | 5th | | | | | | [removed: 24] [added: 22] | | |
| New Jersey | | | | | | 1 | | | | | | [removed: 25th] [added: 24th] | | | | | | [removed: 23] [added: 21] | | |
(2)Source: FDIC.gov data as of June 30, [removed: 2022.][added: 2023.]
[removed: (3)As] [added: (1)Source: EEO-1 data as] of December 31, 2022.
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 [removed: highly] competitive in meeting clients’ expectations.
Truist’s subsidiaries compete actively with national, regional, and local financial services providers, including banks, thrifts, [added: credit unions, investment advisers, asset managers,] securities [added: brokers and] dealers, [removed: mortgage bankers,] [added: private-equity funds, hedge funds, mortgage-banking companies,] finance companies, financial technology companies, and insurance companies.
The ability of non-banking entities, including financial technology companies, to provide [added: financial products and] services [removed: previously limited to commercial banks] [added: directly as well as indirectly through partnerships] has increased competition.
Truist will continue to [removed: pursue] [added: perform the appropriate due diligence on potential] strategic mergers and acquisitions to enhance growth, when market conditions, business objectives, profitability, [added: impact to capital,] and market share considerations align to create favorable opportunities.
Regulatory [added: and Supervisory] Considerations
The regulatory [added: and supervisory] framework applicable to banking organizations is intended primarily for the protection of depositors and [added: other customers,] the [added: DIF, the broader economy, and the] stability of the U.S. financial system, rather than for the protection of shareholders and [added: non-deposit] creditors.
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 [added: 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.
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 [removed: statues] [added: statutes] or regulatory provisions.
Truist Bank is also subject to additional state and federal laws, as well as various compliance regulations, [removed: that] [added: which] govern its activities, the investments it makes, and the aggregate amount of loans that may be granted to one borrower.
Examinations by [removed: 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 [removed: management,] [added: management] and the board of directors, the effectiveness of internal controls, earnings, liquidity, and various other factors.
Following [removed: those examinations,] [added: examinations by banking agencies,] Truist and Truist Bank [added: receive supervisory findings and ultimately] are assigned supervisory ratings.
[removed: This] [added: Examination reports,] supervisory [removed: framework, including the examination reports] [added: ratings,] and [added: other actions under this] supervisory [removed: ratings,] [added: framework,] which are considered confidential supervisory information, [removed: could materially] [added: can] impact the conduct, growth, and profitability of Truist’s [removed: operations.][added: operations, possibly to a significant degree.]
The results of examinations by any of Truist’s federal bank regulators [removed: potentially] can result in the imposition of significant limitations on Truist’s activities and growth.
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, [removed: or] represent an unfair, deceptive, [removed: or] abusive act or [removed: practice.][added: practice, or do not meet supervisory expectations.]
Truist Bank submitted its inaugural IDI resolution plan to the FDIC in November [removed: 2022, which is currently under review.][added: 2022.]
Failure to be [removed: well capitalized] [added: well-capitalized] or to meet minimum capital requirements could result in certain mandatory and discretionary actions by regulators that, if undertaken, could have an adverse material effect on Truist’s operations or financial condition.
Failure to be [removed: well capitalized] [added: well-capitalized] or to meet minimum capital requirements could also result in restrictions on Truist’s or Truist Bank’s ability to pay dividends or otherwise distribute capital or to receive regulatory approval for acquisitions.
The FRB assigned Truist an SCB of [removed: 2.5%,] [added: 2.9%,] which is effective from October 1, [removed: 2022] [added: 2023] to September 30, [removed: 2023,] [added: 2024,] at which point a revised SCB will be calculated and provided to Truist.
If the full countercyclical buffer amount is implemented, Truist [removed: and Truist Bank] would be required to maintain a CET1 capital ratio of at least [removed: 9.5%,] [added: 9.9%,] a Tier 1 capital ratio of at least [removed: 11.0%,] [added: 11.4%,] and a Total capital ratio of at least [removed: 13.0%] [added: 13.4%] to avoid limitations on capital distributions and certain discretionary incentive compensation payments.
Truist is required to submit its next capital plan and the results of its own stress tests to the FRB by April 5, [removed: 2023.][added: 2024.]
The FRB is required to announce the results of its supervisory stress tests by June 30, [removed: 2023.][added: 2024.]
Certain BHCs and their bank subsidiaries, including Truist and Truist Bank, are subject to a minimum [removed: LCR.][added: LCR and NSFR.]
[removed: In July 2021, Truist became subject to final rules implementing the NSFR, which are] [added: 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.
Truist offers a wide range of products and services through its wholesale and consumer businesses, including consumer and small business banking, commercial banking, corporate and investment banking, insurance, wealth management, payments, and specialized lending businesses.
| | | | | | | | | | Payment solutions | | |
| North Carolina(1) | | | | | | 13 | | | | | | 2nd | | | | | | 285 | | |
| Pennsylvania | | | | | | 4 | | | | | | 9th | | | | | | 146 | | |
| Texas | | | | | | 3 | | | | | | 21st | | | | | | 99 | | |
| Alabama | | | | | | 1 | | | | | | 6th | | | | | | 51 | | |
(3)As of December 31, 2023.
Many of our competitors have substantial positions nationally or in the markets in which we operate.
Some also have greater scale, financial and operational resources, investment capacity, and brand recognition.
Our competitors may be subject to different and, in some cases, less stringent legislative, regulatory, and supervisory regimes than ours.
A range of competitors differ from us in their strategic and tactical priorities and, for example, may be willing to suffer meaningful financial losses in the pursuit of disruptive innovation and client growth or to accept more aggressive business, compliance, and other risks in the pursuit of higher returns and market valuations.
Competition affects every aspect of our business, including product and service offerings and features, rates, pricing and fees, credit limits, and client service.
Successfully competing in our markets also depends on our ability to innovate, to invest in technology and infrastructure, to execute transactions reliably and efficiently, to maintain and enhance our reputation, and to attract, retain, and motivate talented employees, all while effectively managing risks and expenses.
We expect that competition will only intensify in the future.
Truist’s long-term strategy primarily encompasses organically growing and deepening client relationships across its core and profitable businesses.
Although mergers and acquisitions are not a top capital distribution priority for Truist, the Company will continue to assess future opportunities, which may include financial services businesses that strengthen Truist’s capabilities, and banks that enhance Truist’s market position.
We are subject to significant regulatory frameworks that affect the products and services that we may offer and the manner in which we may offer them, the risks that we may take, the ways in which we may operate, and the corporate and financial actions that we may take.
We are also subject to direct supervision and periodic examinations by various governmental agencies and self-regulatory organizations that are charged with overseeing the kinds of business activities in which we engage.
These agencies and organizations generally have broad authority and discretion in restricting and otherwise affecting our businesses and operations and may take formal or informal supervisory, enforcement, and other actions against us when, in the applicable agency’s or organization’s judgment, our businesses or operations fail to comply with applicable law, comport with safe and sound practices, or meet its supervisory expectations.
We strive to maintain constructive relationships with supervisory authorities.
Upon review of the plan, the agencies may jointly determine that a resolution plan is not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code.
If Truist were to fail to adequately address deficiencies in a timely manner, it may be subject to more stringent capital, leverage, or liquidity requirements, or restrictions on growth, activities, or operations.
In August 2023, the FRB and FDIC proposed updated guidance on resolution planning requirements applicable to the Company and in January 2024, the agencies extended the deadline for the next submission from July 1, 2024 to March 31, 2025.
In August 2023, the FDIC issued a proposal to amend its rules requiring covered IDIs, including Truist Bank, to periodically submit resolution plans to the FDIC.
Covered IDIs would be split into Group A and Group B, with Group A covered IDIs comprising IDIs with $100 billion or more in total assets and Group B being IDIs with at least $50 billion but less than $100 billion in total assets.
Group A covered IDIs, including Truist, would be required to submit full plans, while Group B covered IDIs are only required to submit information filings.
If adopted as proposed, Truist Bank would be required to submit a full resolution plan to the FDIC every two years and submit an interim supplement in each year that it is not required to submit a full resolution plan.
In addition, this proposal would increase the content requirements for plan submissions and introduce a new credibility standard for the FDIC’s evaluation of resolution plans, which would be enforceable against the covered IDIs.
The proposed rule indicates the FDIC would create two submission cohorts for Group A covered IDIs, with one cohort submitting a full filing at least 270 days from the effective date of the final rule and the other cohort submitting an interim supplement filing; the two cohorts would then alternate between a full filing and the interim supplement filing each year.
The FDIC has not communicated which cohort Truist falls into and has not indicated when the proposal will be finalized.
In addition, 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%.
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.
This proposal would introduce new approaches for credit risk, operational risk, market risk, and credit valuation adjustment risk that generally align with the approaches for these risks under the global Basel Accord adopted by the Basel Committee.
The proposal would introduce a new measure of risk-weighted assets, which would reflect the proposed new standardized approaches for credit risk, operational risk, and credit valuation adjustment risk, as well as a proposed new measure for market risk that would be based on both internal models and standardized supervisory models of market risk.
In addition, the proposal requires category III and IV financial institutions to include certain components of AOCI in the calculation of regulatory capital, as well as change the calculation of certain deductions consistent with standards in place for category I and II financial institutions.
The proposal includes a proposed effective date of July 1, 2025, subject to a three-year transition period ending July 1, 2028, over which the expanded total risk-weighted assets would be phased in.
We continue to evaluate this proposal and the potential impacts, if adopted as proposed, on the Company and Truist Bank.
Long-Term Debt and Clean Holding Company Requirements
In August 2023, the U.S. banking regulators proposed a rule that would require banking organizations with $100 billion or more in total assets to comply with long-term debt requirements and clean holding company requirements that currently apply only to GSIBs.
This proposal would also impose a long-term debt requirement on certain categories of insured depository institutions, including insured depository institutions with $100 billion or more in total assets, such as Truist Bank.
The Company offers a wide range of services.
| | | | Student lending | | | | | | Mortgage warehouse lending | | |
| North Carolina (1) | | | | | | 13 | | | | | | 1st | | | | | | 297 | | |
| Pennsylvania | | | | | | 4 | | | | | | 8th | | | | | | 157 | | |
| Texas | | | | | | 2 | | | | | | 22nd | | | | | | 106 | | |
| Alabama | | | | | | 1 | | | | | | 7th | | | | | | 59 | | |
Non-banking entities are not subject to the same regulatory framework as banks and BHCs, and therefore, can often operate with greater flexibility and lower costs.
In addition, the ability to access and use technology is an increasingly significant competitive factor in the financial services industry.
Having the right technology is a critically important component to client satisfaction because it affects the Company’s ability to deliver the products and services that clients desire in a manner that they find convenient and attractive.
Management believes that the Company is well positioned to compete and that its continued focus on touch and technology will engender trust among its current and future clients.
Truist’s long-term strategy encompasses both organic and inorganic growth, including mergers or acquisitions of complementary financial institutions or other businesses.
Such opportunities might include insurance agencies, financial services businesses that strengthen Truist’s capabilities, and banks that enhance Truist’s market position.
Truist and its subsidiaries are also subject to supervision and examination by multiple regulators.
The FRB and the FDIC must review and evaluate Truist’s resolution plan.
The FRB and FDIC are authorized to impose restrictions on growth and activities or operations if the agencies determine that a resolution plan is not credible or would not facilitate a rapid and orderly resolution of the company under the U.S. Bankruptcy Code, and could require the banking organization to divest assets or take other actions if it did not submit an acceptable resolution plan within two years after any such restrictions were imposed.
On the same date, the FRB and FDIC also announced that they intend to issue guidance to assist Category II and Category III banking organizations in further developing their resolution plans, in advance of the next round of resolution plans due on July 1, 2024.
During 2021, Truist Bank was informed by the FDIC that its next resolution plan was due on or before December 1, 2022.
In September 2022, the FRB, FDIC, and OCC announced that they are developing a joint proposed rule to implement enhanced regulatory capital standards that align with those included in the Basel III Rules and plan to seek public input on the new capital standards as soon as possible.
In 2020, the U.S. banking agencies adopted a final rule that permitted banking organizations to elect to delay temporarily the implementation of CECL until January 2022 and subsequently to phase in the effects of CECL on regulatory capital through January 2025, which Truist elected to use.
Under the five-year transition, Truist deferred for two years 100% of the day-one effect of adopting CECL and 25% of the cumulative increase or decrease in the allowance for credit losses since adoption of CECL.
Following the first two years, Truist began to phase in the aggregate capital effects over the next three years consistent with the transition in the original three-year transition rule.
California voters also recently passed the California Privacy Rights Act, which became effective on January 1, 2023, and significantly modifies the California Consumer Privacy Act, including by imposing additional obligations on covered companies and expanding California consumers’ rights with respect to certain sensitive personal information, potentially resulting in further uncertainty and requiring Truist to incur additional costs to comply.
In November 2021, Truist Bank conditionally registered with the SEC as a security-based swap dealer.
As a result, Truist Bank’s security-based swaps business is now subject to requirements that are similar to the CFTC rules applicable to swap dealers, including trade reporting, business conduct standards, recordkeeping, and clearing and exchange trading requirements.
Tax Regulation
On August 16, 2022, the U.S. Inflation Reduction Act of 2022 was signed into law effective for tax years beginning after December 31, 2022.
The Company continues to analyze the impacts of the Inflation Reduction Act on its future results of operations but does not currently expect that the Inflation Reduction Act will have a material impact on its financial statements.
| Full-Time | | | 52,848 | | | | | | 95.9 | | % |
| Part-Time | | | 2,278 | | | | | | 4.1 | | |
Truist remains committed to further building a culture where teammates feel a sense of belonging and can bring their authentic selves to work daily.
DEI is instrumental to and embedded across our business.
Truist has a dedicated DEI Office that oversees the company’s DEI strategy, objectives, and shared execution across the enterprise.
The Truist DEI Office partners closely with various internal stakeholders to develop tools, resources, and programs to further support the commitments to attracting, developing, and advancing diverse talent across all levels, embedding DEI in Truist’s business strategies, and further investing in diverse communities.
Teammate diversity continues to be a leading priority for Truist.
Ethnic diversity within leadership populations has historically been underrepresented across financial services companies.
The Company aspired to increase ethnically diverse representation among senior leadership positions to 15%; this was surpassed with ethnically diverse teammates holding 17.2% of senior leadership positions as of December 31, 2022.
Truist’s leadership diversity commitment was based on Truist’s internal senior leader category.
The Truist senior leader category is made up of a broader population than the EEO-1 Executive/Senior-Level Manager category.
| 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 | | |
An excerpt. Shown here: 40 of 90 rewritten, 40 of 82 added and 40 of 56 removed. The counts are complete. For every sentence, read Item 1. BUSINESS in the FY2023 filing and the FY2022 filing.
Cover and table of contents
9 rewritten, 1 added, 1 removed, 111 unchanged
For the fiscal year ended December 31, [removed: 2022][added: 2023]
Yes [removed: ☐ No] ☒ [added: No ☐]
At January 31, [removed: 2023,] [added: 2024,] the Company had [removed: 1,327,909,982] [added: 1,334,529,883] shares of its common stock, $5 par value, outstanding.
As of June 30, [removed: 2022,] [added: 2023,] the aggregate market value of voting stock held by nonaffiliates of the Company was approximately [removed: $62.7] [added: $40.3] billion.
Documents incorporated by reference: Portions of the [added: registrant’s] definitive proxy statement relating to [removed: the registrant’s 2023] [added: its 2024] annual meeting of [removed: stockholders] [added: shareholders] are incorporated by reference in this Form 10-K in response to Items 10, 11, 12, [removed: 13] [added: 13,] and 14 of Part III.
| | | | | | | Glossary of Defined Terms | | | [removed: [1](#id4cd8c88a205496e83a8121fe08b1036_16)] [added: [1](#i438c60013d3a489386512a6963c12f18_16)] | | | | | |
| | | | | | | Forward-Looking Statements | | | [removed: [3](#id4cd8c88a205496e83a8121fe08b1036_19)] [added: [3](#i438c60013d3a489386512a6963c12f18_19)] | | | | | |
| Item 1 | | | | | | Business | | | [removed: [4](#id4cd8c88a205496e83a8121fe08b1036_25)] [added: [4](#i438c60013d3a489386512a6963c12f18_25)] | | | | | |
| Item 1A | | | | | | Risk Factors | | | [removed: [18](#id4cd8c88a205496e83a8121fe08b1036_28)] [added: [19](#i438c60013d3a489386512a6963c12f18_28)] | | | | | |
| December 31, 2023 | | | | | | | | | | | | | | |
| December 31, 2022 | | | | | | | | | | | | | | |
Item 1B. Unresolved Staff Comments (None to be reported)
2 rewritten, 1 added, 0 removed, 0 unchanged
| Item 2 | | | | | | Properties | | | [removed: [36](#id4cd8c88a205496e83a8121fe08b1036_34)] [added: [41](#i438c60013d3a489386512a6963c12f18_37)] | | | | | |
| Item 3 | | | | | | Legal Proceedings (see Note 16) | | | [removed: [121](#id4cd8c88a205496e83a8121fe08b1036_190)] [added: [134](#i438c60013d3a489386512a6963c12f18_199)] | | | | | |
| Item 1C | | | | | | Cybersecurity | | | [41](#i438c60013d3a489386512a6963c12f18_5147) | | | | | |
Item 4. Mine Safety Disclosures (Not applicable)
27 rewritten, 10 added, 10 removed, 6 unchanged
| Item 5 | | | | | | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | | [removed: [37](#id4cd8c88a205496e83a8121fe08b1036_37)] [added: [42](#i438c60013d3a489386512a6963c12f18_40)] | | | | | |
| | | | | | | Analysis of Results of Operations | | | [removed: [43](#id4cd8c88a205496e83a8121fe08b1036_280)] [added: [48](#i438c60013d3a489386512a6963c12f18_289)] | | | | | |
| | | | | | | Analysis of Financial Condition | | | [removed: [49](#id4cd8c88a205496e83a8121fe08b1036_370)] [added: [55](#i438c60013d3a489386512a6963c12f18_385)] | | | | | |
| Item 7A | | | | | | Quantitative and Qualitative Disclosures About Market Risk (see Market Risk) | | | [removed: [64](#id4cd8c88a205496e83a8121fe08b1036_475)] [added: [70](#i438c60013d3a489386512a6963c12f18_490)] | | | | | |
| | | | | | | Report of Independent Registered Public Accounting Firm (PCAOB ID: 238) | | | [removed: [81](#id4cd8c88a205496e83a8121fe08b1036_46)] [added: [87](#i438c60013d3a489386512a6963c12f18_49)] | | | | | |
| | | | | | | Consolidated Balance Sheets | | | [removed: [83](#id4cd8c88a205496e83a8121fe08b1036_49)] [added: [90](#i438c60013d3a489386512a6963c12f18_52)] | | | | | |
| | | | | | | Consolidated Statements of Income | | | [removed: [84](#id4cd8c88a205496e83a8121fe08b1036_55)] [added: [91](#i438c60013d3a489386512a6963c12f18_58)] | | | | | |
| | | | | | | Consolidated Statements of Comprehensive Income | | | [removed: [85](#id4cd8c88a205496e83a8121fe08b1036_58)] [added: [92](#i438c60013d3a489386512a6963c12f18_61)] | | | | | |
| | | | | | | Consolidated Statements of Changes in Shareholders’ Equity | | | [removed: [86](#id4cd8c88a205496e83a8121fe08b1036_61)] [added: [93](#i438c60013d3a489386512a6963c12f18_64)] | | | | | |
| | | | | | | Consolidated Statements of Cash Flows | | | [removed: [87](#id4cd8c88a205496e83a8121fe08b1036_67)] [added: [94](#i438c60013d3a489386512a6963c12f18_70)] | | | | | |
| | | | | | | Note 1. Basis of Presentation | | | [removed: [88](#id4cd8c88a205496e83a8121fe08b1036_73)] [added: [95](#i438c60013d3a489386512a6963c12f18_76)] | | | | | |
| | | | | | | Note 3. Securities Financing Activities | | | [removed: [102](#id4cd8c88a205496e83a8121fe08b1036_97)] [added: [111](#i438c60013d3a489386512a6963c12f18_100)] | | | | | |
| | | | | | | Note 4. Investment Securities | | | [removed: [103](#id4cd8c88a205496e83a8121fe08b1036_100)] [added: [112](#i438c60013d3a489386512a6963c12f18_103)] | | | | | |
| | | | | | | Note 5. Loans and ACL | | | [removed: [105](#id4cd8c88a205496e83a8121fe08b1036_106)] [added: [114](#i438c60013d3a489386512a6963c12f18_109)] | | | | | |
| | | | | | | Note 6. Premises and Equipment | | | [removed: [111](#id4cd8c88a205496e83a8121fe08b1036_112)] [added: [122](#i438c60013d3a489386512a6963c12f18_118)] | | | | | |
| | | | | | | Note 7. Goodwill and Other Intangible Assets | | | [removed: [111](#id4cd8c88a205496e83a8121fe08b1036_115)] [added: [123](#i438c60013d3a489386512a6963c12f18_121)] | | | | | |
| | | | | | | Note 9. Other Assets and Liabilities | | | [removed: [113](#id4cd8c88a205496e83a8121fe08b1036_130)] [added: [125](#i438c60013d3a489386512a6963c12f18_139)] | | | | | |
| | | | | | | Note 12. Shareholders’ Equity | | | [removed: [115](#id4cd8c88a205496e83a8121fe08b1036_148)] [added: [127](#i438c60013d3a489386512a6963c12f18_157)] | | | | | |
| | | | | | | Note 14. Income Taxes | | | [removed: [117](#id4cd8c88a205496e83a8121fe08b1036_160)] [added: [129](#i438c60013d3a489386512a6963c12f18_169)] | | | | | |
| | | | | | | Note 15. Benefit Plans | | | [removed: [118](#id4cd8c88a205496e83a8121fe08b1036_178)] [added: [131](#i438c60013d3a489386512a6963c12f18_187)] | | | | | |
| | | | | | | Note 16. Commitments and Contingencies | | | [removed: [121](#id4cd8c88a205496e83a8121fe08b1036_190)] [added: [134](#i438c60013d3a489386512a6963c12f18_199)] | | | | | |
| | | | | | | Note 17. Regulatory Requirements and Other Restrictions | | | [removed: [126](#id4cd8c88a205496e83a8121fe08b1036_217)] [added: [139](#i438c60013d3a489386512a6963c12f18_226)] | | | | | |
| | | | | | | Note 18. Fair Value Disclosures | | | [removed: [127](#id4cd8c88a205496e83a8121fe08b1036_220)] [added: [140](#i438c60013d3a489386512a6963c12f18_229)] | | | | | |
| | | | | | | Note 19. Derivative Financial Instruments | | | [removed: [132](#id4cd8c88a205496e83a8121fe08b1036_229)] [added: [145](#i438c60013d3a489386512a6963c12f18_238)] | | | | | |
| | | | | | | Note 20. Computation of EPS | | | [removed: [136](#id4cd8c88a205496e83a8121fe08b1036_235)] [added: [150](#i438c60013d3a489386512a6963c12f18_244)] | | | | | |
| | | | | | | Note 21. Operating Segments | | | [removed: [136](#id4cd8c88a205496e83a8121fe08b1036_238)] [added: [150](#i438c60013d3a489386512a6963c12f18_247)] | | | | | |
| | | | | | | Note 22. Parent Company Financial Information | | | [removed: [140](#id4cd8c88a205496e83a8121fe08b1036_253)] [added: [154](#i438c60013d3a489386512a6963c12f18_262)] | | | | | |
| | | | | | | Executive Overview | | | [45](#i438c60013d3a489386512a6963c12f18_274) | | | | | |
| | | | | | | Risk Management | | | [68](#i438c60013d3a489386512a6963c12f18_481) | | | | | |
| | | | | | | Liquidity | | | [78](#i438c60013d3a489386512a6963c12f18_508) | | | | | |
| | | | | | | Capital | | | [81](#i438c60013d3a489386512a6963c12f18_517) | | | | | |
| | | | | | | Note 2. Business Combinations, Divestitures, and Noncontrolling Interests | | | [110](#i438c60013d3a489386512a6963c12f18_91) | | | | | |
| | | | | | | Note 8. Loan Servicing | | | [124](#i438c60013d3a489386512a6963c12f18_136) | | | | | |
| | | | | | | Note 10. Deposits | | | [126](#i438c60013d3a489386512a6963c12f18_145) | | | | | |
| | | | | | | Note 11. Borrowings | | | [126](#i438c60013d3a489386512a6963c12f18_148) | | | | | |
| | | | | | | Note 13. AOCI | | | [128](#i438c60013d3a489386512a6963c12f18_166) | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | Executive Overview | | | [40](#id4cd8c88a205496e83a8121fe08b1036_265) | | | | | |
| | | | | | | Risk Management | | | [62](#id4cd8c88a205496e83a8121fe08b1036_466) | | | | | |
| | | | | | | Liquidity | | | [72](#id4cd8c88a205496e83a8121fe08b1036_493) | | | | | |
| | | | | | | Capital | | | [74](#id4cd8c88a205496e83a8121fe08b1036_502) | | | | | |
| | | | | | | Note 2. Business Combinations | | | [102](#id4cd8c88a205496e83a8121fe08b1036_88) | | | | | |
| | | | | | | Note 8. Loan Servicing | | | [112](#id4cd8c88a205496e83a8121fe08b1036_127) | | | | | |
| | | | | | | Note 10. Deposits | | | [114](#id4cd8c88a205496e83a8121fe08b1036_136) | | | | | |
| | | | | | | Note 11. Borrowings | | | [114](#id4cd8c88a205496e83a8121fe08b1036_139) | | | | | |
| | | | | | | Note 13. AOCI | | | [116](#id4cd8c88a205496e83a8121fe08b1036_157) | | | | | |
| | | | | | | Note 23. Subsequent Events | | | [141](#id4cd8c88a205496e83a8121fe08b1036_256) | | | | | |
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure (None to be reported)
1 rewritten, 1 added, 0 removed, 0 unchanged
| Item 9A | | | | | | Controls and Procedures | | | [removed: [142](#id4cd8c88a205496e83a8121fe08b1036_532)] [added: [156](#i438c60013d3a489386512a6963c12f18_547)] | | | | | |
| Item 9B | | | | | | Other Information | | | [156](#i438c60013d3a489386512a6963c12f18_5124) | | | | | |
Item 14. Principal Accounting Fees and Services
0 rewritten, 1 added, 1 removed, 5 unchanged
| | | | | | | Exhibits | | | [157](#i438c60013d3a489386512a6963c12f18_565) | | | | | |
| | | | | | | Exhibits | | | [143](#id4cd8c88a205496e83a8121fe08b1036_547) | | | | | |
Item 16. Form 10-K Summary (None)
3 rewritten, 58 added, 43 removed, 143 unchanged
| * | | | | | | For information regarding executive officers, refer to “Executive Officers” in Part I. The other information required by Item 10 is incorporated herein by reference to the information that appears under the headings “Nominees for Election as Directors for a One-Year Term Expiring in [removed: 2024,”] [added: 2025,” “Section 16(a) Reports,”] “Nominating and Governance Committee Director Nominations,” “Ethics at Truist,” “Corporate Governance Guidelines,” [removed: “Audit Committee Report”] and “Audit Committee” in the [removed: Registrant’s Proxy Statement] [added: registrant’s definitive proxy statement] for the [removed: 2023 Annual Meeting] [added: 2024 annual meeting] of [removed: Shareholders.] [added: shareholders.] The information required by Item 11 is incorporated herein by reference to the information that appears under the headings “Compensation Discussion and Analysis,” “Compensation of Executive Officers,” “Compensation and Human Capital Committee Report on Executive Compensation,” “Compensation and Human Capital Committee Interlocks and Insider [removed: Participation”] [added: Participation,”] and “Compensation of Directors” in the [removed: Registrant’s Proxy Statement] [added: registrant’s definitive proxy statement] for the [removed: 2023 Annual Meeting] [added: 2024 annual meeting] of [removed: Shareholders.] [added: shareholders.] For information regarding the registrant’s securities authorized for issuance under equity compensation plans, refer to “Equity Compensation Plan Information” in Part II herein. The other information required by Item 12 is incorporated herein by reference to the information that appears under the heading “Stock Ownership Information” in the [removed: Registrant’s Proxy Statement] [added: registrant’s definitive proxy statement] for the [removed: 2023 Annual Meeting] [added: 2024 annual meeting] of [removed: Shareholders.] [added: shareholders.] The information required by Item 13 is incorporated herein by reference to the information that appears under the headings “Director Independence” and “Related Person Transactions” in the [removed: Registrant’s Proxy Statement] [added: registrant’s definitive proxy statement] for the [removed: 2023 Annual Meeting] [added: 2024 annual meeting] of [removed: Shareholders.] [added: shareholders.] The information required by Item 14 is incorporated herein by reference to the information that appears under the headings “Fees to Independent Registered Public Accounting Firm” and “Audit Committee Pre-Approval Policy” in the [removed: Registrant’s Proxy Statement] [added: registrant’s definitive proxy statement] for the [removed: 2023 Annual Meeting] [added: 2024 annual meeting] of [removed: Shareholders.] [added: shareholders.] | | | | | | | | |
| Merger | | | Merger of BB&T [added: Corporation] and SunTrust [added: Banks, Inc.] effective December 6, 2019 | | |
While [removed: there can be] no [removed: assurance that any] list of [removed: risks] [added: assumptions, risks,] and uncertainties [removed: or risk factors is] [added: could be] complete, [removed: important] [added: some of the] factors that [removed: could] [added: may] cause actual results [added: or other future events or circumstances] to differ [removed: materially] from those [removed: contemplated by] [added: in] forward-looking statements [removed: include the following, without limitation, as well as the risks and uncertainties more fully discussed in Item 1A-Risk Factors:][added: include:]
| CIO | | | Chief Information Officer | | |
| CISO | | | Chief Information Security Officer | | |
| CTRO | | | Chief Technology Risk Officer | | |
| GCO | | | Governance and Controls Organization | | |
| GSIBs | | | Global systemically important banks | | |
| LIBOR Act | | | Adjustable Interest Rate (LIBOR) Act | | |
| TBA | | | To-be-announced | | |
| TBVPS | | | Tangible book value per common share | | |
| TIH | | | Truist Insurance Holdings, LLC | | |
| U.S. DOJ | | | United States Department of Justice | | |
From time to time we have made, and in the future will make, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements can be identified by the fact that they do not relate strictly to historical or current facts.
Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “pursue,” “seek,” “continue,” “estimate,” “project,” “outlook,” “forecast,” “potential,” “target,” “objective,” “trend,” “plan,” “goal,” “initiative,” “priorities,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, or results.
This report, including any information incorporated by reference in this report, contains forward-looking statements.
We also may make forward-looking statements in other documents that are filed or furnished with the SEC.
In addition, we may make forward-looking statements orally or in writing to investors, analysts, members of the media, and others.
All forward-looking statements, by their nature, are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control.
You should not rely on any forward-looking statement as a prediction or guarantee about the future.
Actual future objectives, strategies, plans, prospects, performance, conditions, and results may differ materially from those set forth in any forward-looking statement.
- evolving political, business, economic, and market conditions at local, regional, national, and international levels;
- monetary, fiscal, and trade laws or policies, including as a result of actions by governmental agencies, central banks, or supranational authorities;
- the legal, regulatory, and supervisory environment, including changes in financial-services legislation, regulation, policies, or government officials or other personnel;
- our ability to address heightened scrutiny and expectations from supervisory or other governmental authorities and to timely and credibly remediate related concerns or deficiencies;
- judicial, regulatory, and administrative inquiries, examinations, investigations, proceedings, disputes, or rulings that create uncertainty for or are adverse to us or the financial-services industry;
- the outcomes of judicial, regulatory, and administrative inquiries, examinations, investigations, proceedings, or disputes to which we are or may be subject and our ability to absorb and address any damages or other remedies that are sought or awarded and any collateral consequences;
- evolving accounting standards and policies;
- the adequacy of our corporate governance, risk-management framework, compliance programs, and internal controls over financial reporting, including our ability to control lapses or deficiencies in financial reporting, to make appropriate estimates, or to effectively mitigate or manage operational risk;
- any instability or breakdown in the financial system, including as a result of the actual or perceived soundness of another financial institution or another participant in the financial system;
- disruptions and shifts in investor sentiment or behavior in the securities, capital, or other financial markets, including financial or systemic shocks and volatility or changes in market liquidity, interest or currency rates, or valuations;
- our ability to cost-effectively fund our businesses and operations, including by accessing long- and short-term funding and liquidity and by retaining and growing client and customer deposits;
- changes in any of our credit ratings;
- our ability to manage any unexpected outflows of uninsured deposits and avoid selling investment securities or other assets at an unfavorable time or at a loss;
- negative market perceptions of our investment portfolio or its value;
- adverse publicity or other reputational harm to us, our service providers, or our senior officers;
- business and consumer sentiment, preferences, or behavior, including spending, borrowing, or saving by businesses or households;
- our ability to execute on strategic and operational plans, including simplifying our businesses, achieving cost-savings targets and lowering expense growth, accelerating franchise momentum, and improving our capital position;
- changes in our corporate and business strategies, the composition of our assets, or the way in which we fund those assets;
- our ability to successfully make and integrate acquisitions and to effect divestitures;
- our ability to develop, maintain, and market our products or services or to absorb unanticipated costs or liabilities associated with those products or services;
- our ability to innovate, to anticipate the needs of current or future clients and customers, to successfully compete, to increase or hold market share in changing competitive environments, or to deal with pricing or other competitive pressures;
| | | | | | |
| CARES Act | | | The Coronavirus Aid, Relief, and Economic Security Act | | |
| DC | | | Disclosure Committee | | |
| EBPCC | | | Ethics, Business Practices, and Conduct Committee | | |
| ECRC | | | Enterprise Credit Risk Committee | | |
| GLBA | | | Gramm-Leach-Bliley Act | | |
| HMDA | | | Home Mortgage Disclosure Act | | |
| PCI | | | Purchased credit impaired loans | | |
| PPP | | | Paycheck Protection Program, established by the CARES Act | | |
| Re-REMICs | | | Re-securitizations of Real Estate Mortgage Investment Conduits | | |
| TMC | | | Technology Management Committee | | |
This Annual Report on Form 10-K 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.
- changes in the interest rate environment, including the replacement of LIBOR as an interest rate benchmark, 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;
- Truist is subject to credit risk by lending or committing to lend money, 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, and may suffer losses if the value of collateral declines in stressed market conditions;
- inability to access short-term funding or liquidity, loss of client deposits or changes in Truist’s credit ratings could increase the cost of funding or limit access to capital markets;
- general economic or business conditions, either globally, nationally or regionally, may be less favorable than expected, including as a result of supply chain disruptions, inflationary pressures and labor shortages, and instability in global geopolitical matters, including due to an outbreak or escalation of hostilities, 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;
- 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 the economy and Truist’s profitability;
- the effects of COVID-19 adversely impacted the Company’s operations and financial performance and similar adverse impacts resulting from pandemics could occur in future periods;
- risk management oversight functions may not identify or address risks adequately, and management may not be able to effectively manage credit risk;
- there are risks resulting from the extensive use of models in Truist’s business, which may impact decisions made by management and regulators;
- deposit attrition, client loss or revenue loss following completed mergers or acquisitions may be greater than anticipated;
- Truist could fail 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 or compliance costs, 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 could damage Truist’s reputation and adversely impact business and revenues;
- regulatory matters, litigation or other legal actions may result in, among other things, costs, fines, penalties, restrictions on Truist’s business activities, reputational harm, negative publicity, or other adverse consequences;
- Truist faces substantial legal and operational risks in safeguarding personal information;
- 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;
- increased scrutiny regarding Truist’s consumer sales practices, training practices, incentive compensation design, and governance could damage its reputation and adversely impact business and revenues;
- 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;
- Truist faces 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;
- there are 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 could be adversely impacted, which could be exacerbated in the increased work-from-home environment as job markets may be less constrained by physical geography;
- Truist’s operations rely on its ability, and the ability of key external parties, to maintain appropriate-staffed workforces, and on the competence, trustworthiness, health and safety of teammates;
- Truist faces the risk of 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, cyberattacks, which have increased in frequency with 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
An excerpt. Shown here: all 3 rewritten, 40 of 58 added and 40 of 43 removed. The counts are complete. For every sentence, read Item 16. Form 10-K Summary (None) in the FY2023 filing and the FY2022 filing.
Item 1C. CYBERSECURITY
0 rewritten, 1 added, 0 removed, 0 unchanged
New section this year
Refer to the Risk Management section of MD&A for a discussion of cybersecurity risk, which is incorporated by reference into this item.
Item 2. PROPERTIES
2 rewritten, 0 added, 0 removed, 7 unchanged
[removed: Truist’s] [added: Truist] owns its headquarters building at 214 North Tryon Street, Charlotte, NC, 28202.
[removed: 36] Truist Financial Corporation [added: 41]
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
18 rewritten, 12 added, 15 removed, 35 unchanged
Truist’s common stock is traded on the NYSE under the symbol “TFC.” As of December 31, [removed: 2022,] [added: 2023,] Truist’s common stock was held by [removed: 84,359] [added: 77,243] registered shareholders.
Truist has periodically repurchased shares of its own common stock and expects to periodically repurchase shares in the [removed: 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: future under publicly announced repurchase plans.]
Repurchases may be [removed: affected] [added: effected] through open market purchases, privately negotiated transactions, trading plans established in accordance with SEC rules, or other means.
The timing and exact amount of repurchases are subject to various factors, including the Company’s capital position, liquidity, [added: accounting and regulatory considerations, including any restrictions that may be imposed by the FRB,] financial [added: and operational] performance, alternative uses of capital, stock trading price and general market conditions, and may be [removed: suspended] [added: modified, extended, discontinued,] or resumed at any time.
The following table provides [added: additional] information [removed: for] [added: on] share repurchases as part of publicly announced plans and shares exchanged or surrendered in connection with the exercise of equity-based awards:
| (Dollars in millions, except per share data, shares in thousands) | | | Total Number of Shares [removed: Purchased (1)] [added: Purchased(1)] | | | | | | Average Price Paid Per [removed: Share (2)] [added: Share(2)] | | | | | | Total Number of Shares Purchased as part of Publicly Announced [removed: Plans (3)] [added: Plans] | | | | | | Approximate Dollar Value of Shares that may yet be Purchased Under the [removed: Plans (3)] [added: Plans] | | |
[added: 42] Truist Financial Corporation [removed: 37]
The following table provides information about equity-based awards as of December 31, [removed: 2022:][added: 2023:]
| Plan Category | | | | | | [removed: (a)(1)(2) Number] [added: (a)(1)(2) Number] of securities to be issued upon exercise of outstanding options, warrants and rights | | | | | | [removed: (b)(3) Weighted-average] [added: (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)) | | |
| Not approved by security holders | | | | | | [removed: 6,828,634] [added: 4,650,256] | | | | | | [removed: 23.89] [added: 33.57] | | | | | | — | | |
(1)Includes [removed: 10,995,360] [added: 13,818,321] RSUs and PSUs in plans approved by security holders.
(2)Plans not approved by security holders [removed: consists] [added: consist] of [removed: 138,242] [added: 21,821] options outstanding with a weighted average exercise price of [removed: $23.89] [added: $33.57] and [removed: 6,690,392] [added: 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.
[removed: 38] Truist Financial Corporation [added: 43]
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, [removed: 2022.][added: 2023.]
The graph and table assume an initial investment of $100 was made on December 31, [removed: 2017] [added: 2018] in each of the Company’s common stock and the two indexes, as well as reinvestment of all dividends without commissions.
[removed: ][added: ]
| As of / Through December 31, | | | [removed: 2017] [added: 2018] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2022] [added: 2023] | | | | | | | | | | | |
[added: 44] Truist Financial Corporation [removed: 39]
Truist paid $2.8 billion, $2.7 billion, and $2.5 billion in common stock dividends during 2023, 2022, and 2021, respectively.
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.
| 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 | | | | | | — | | | | | | | | |
| Approved by security holders | | | | | | 14,230,638 | | | | | | $ | 35.02 | | | | | 34,044,469 | | |
| Total | | | | | | 18,880,894 | | | | | | $ | 34.94 | | | | | 34,044,469 | | |
| 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 | | | | | | | | | | | |
Truist’s common dividend payout ratio was 45% in 2022 compared to 41% in 2021 and 58% in 2020.
During 2022, the Company repurchased 5.1 million shares of common stock totaling $250 million through open market purchases.
| 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 | | | | | | — | | | | | | | | |
(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.
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.
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.
| Approved by security holders | | | | | | 11,407,677 | | | | | | $ | 35.02 | | | | | 41,980,866 | | |
| Total | | | | | | 18,236,311 | | | | | | $ | 32.22 | | | | | 41,980,866 | | |
| 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 | | | | | | | | | | | |
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
850 rewritten, 577 added, 278 removed, 2,082 unchanged
We have audited the accompanying consolidated balance sheets of Truist Financial Corporation and its subsidiaries (the “Company”) as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] including the related notes (collectively referred to as the “consolidated financial statements”).
We also have audited the Company’s internal control over financial reporting as of December 31, [removed: 2022] [added: 2023,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2022] [added: 2023] in conformity with accounting principles generally accepted in the United States of America.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.
[added: 142] Truist Financial Corporation [removed: 81]
The critical audit [removed: matter] [added: matters] communicated below [removed: is a matter] [added: are matters] arising from the current period audit of the consolidated financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that (i) [removed: relates] [added: relate] to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matter] [added: matters] below, providing [removed: a] separate [removed: opinion] [added: opinions] on the critical audit [removed: matter] [added: matters] or on the accounts or disclosures to which [removed: it relates.][added: they relate.]
*Allowance for Credit Losses for Certain [removed: Commercial] [added: Commercial, Consumer,] and [removed: Consumer] [added: Credit Card] Portfolios*
The [added: Company’s] consolidated ACL balance was [removed: $4.6] [added: $5.1] billion as of December 31, [removed: 2022,] [added: 2023,] including [removed: $1.7] [added: $2.2] billion for commercial [removed: portfolios and $2.3] [added: portfolios, $2.2] billion for consumer [removed: portfolios.][added: portfolios, and $0.4 billion for credit card.]
[removed: Estimates] [added: As disclosed by management, estimates] of expected future [removed: credit] [added: loan and lease] losses are determined by [removed: management] using [removed: quantitative] [added: statistical] models and [removed: by applying qualitative adjustments to the modeled results.][added: management’s judgment.]
[removed: The] [added: 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 [added: generally] applied to pools of loans with similar risk characteristics.
The principal considerations for our determination that performing procedures relating to the ACL for certain [removed: commercial] [added: commercial, consumer,] and [removed: consumer] [added: credit card] portfolios is a critical audit matter are (i) the significant judgment by management in determining the [removed: ACL] quantitative model results and certain qualitative [removed: adjustments,] [added: adjustments;] (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to the quantitative model results and certain qualitative [removed: adjustments,] [added: adjustments;] and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
These procedures included testing the effectiveness of controls relating to the Company’s ACL estimation process for certain [removed: commercial] [added: commercial, consumer,] and [removed: consumer] [added: credit card] portfolios, which included controls related to the quantitative model results and certain qualitative adjustments.
These procedures also included, among others, testing management’s process for determining the ACL for certain [removed: commercial] [added: commercial, consumer,] and [removed: consumer] [added: credit card] portfolios quantitative model results and certain qualitative adjustments, [removed: including] [added: which included] evaluating the appropriateness of the quantitative models and management’s methodology, testing the [added: completeness and accuracy of the underlying] data used in [added: determining] the [removed: estimate,] [added: quantitative model results] and [added: certain qualitative adjustments, and] evaluating the reasonableness of judgments used by management in [removed: estimating] [added: determining] certain qualitative adjustments.
Professionals with specialized skill and knowledge were used to assist in evaluating [added: (i)] the appropriateness of [removed: these] [added: the] quantitative models and [added: (ii)] the reasonableness of judgments used by management [removed: relating to] [added: in determining] certain qualitative adjustments.
[removed: 82] Truist Financial Corporation [added: 143]
| (Dollars in millions, except per share data, shares in thousands) | | | Dec 31, [removed: 2022] [added: 2023] | | | | | | Dec 31, [removed: 2021] [added: 2022] | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | | $ | [removed: 5,379] [added: 5,072] | | | | | $ | [removed: 5,085] [added: 5,379] | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits with banks | | | [removed: 16,042] [added: 25,572] | | | | | | [removed: 15,210] [added: 16,042] | | | | | | | | | | | | | | | | | | | | |
| Securities borrowed or purchased under agreements to resell | | | [removed: 3,181] [added: 2,378] | | | | | | [removed: 4,028] [added: 3,181] | | | | | | | | | | | | | | | | | | | | |
| Trading assets at fair value | | | [removed: 4,905] [added: 4,332] | | | | | | [removed: 4,423] [added: 4,905] | | | | | | | | | | | | | | | | | | | | |
| AFS securities at fair value | | | [removed: 71,801] [added: 67,366] | | | | | | [removed: 153,123] [added: 71,801] | | | | | | | | | | | | | | | | | | | | |
| HTM securities [removed: ($47,791] [added: (fair value of $44,630] and [removed: $1,495 at fair value,] [added: $47,791,] respectively) | | | [removed: 57,713] [added: 54,107] | | | | | | [removed: 1,494] [added: 57,713] | | | | | | | | | | | | | | | | | | | | |
| LHFS (including [removed: $1,065] [added: $852] and [removed: $3,544] [added: $1,065] at fair value, respectively) | | | [removed: 1,444] [added: 1,280] | | | | | | [removed: 4,812] [added: 1,444] | | | | | | | | | | | | | | | | | | | | |
| Loans and leases (including [removed: $18] [added: $15] and [removed: $23] [added: $18] at fair value, respectively) | | | [removed: 325,991] [added: 312,061] | | | | | | [removed: 289,513] [added: 325,991] | | | | | | | | | | | | | | | | | | | | |
| ALLL | | | [removed: (4,377)] [added: (4,798)] | | | | | | [removed: (4,435)] [added: (4,377)] | | | | | | | | | | | | | | | | | | | | |
| Loans and leases, net of ALLL | | | [removed: 321,614] [added: 307,263] | | | | | | [removed: 285,078] [added: 321,614] | | | | | | | | | | | | | | | | | | | | |
| Premises and equipment | | | [removed: 3,605] [added: 3,370] | | | | | | [removed: 3,700] [added: 3,605] | | | | | | | | | | | | | | | | | | | | |
| Goodwill | | | [removed: 27,013] [added: 20,901] | | | | | | [removed: 26,098] [added: 27,013] | | | | | | | | | | | | | | | | | | | | |
| CDI and other intangible assets | | | [removed: 3,672] [added: 3,160] | | | | | | [removed: 3,408] [added: 3,672] | | | | | | | | | | | | | | | | | | | | |
| Loan servicing rights at fair value | | | [removed: 3,758] [added: 3,378] | | | | | | [removed: 2,633] [added: 3,758] | | | | | | | | | | | | | | | | | | | | |
| Other assets (including [removed: $1,582] [added: $1,311] and [removed: $3,436] [added: $1,582] at fair value, respectively) | | | [removed: 35,128] [added: 37,170] | | | | | | [removed: 32,149] [added: 35,128] | | | | | | | | | | | | | | | | | | | | |
| Total assets | | | $ | [removed: 555,255] [added: 535,349] | | | | | $ | [removed: 541,241] [added: 555,255] | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing deposits | | | $ | [removed: 135,742] [added: 111,624] | | | | | $ | [removed: 145,892] [added: 135,742] | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | [removed: 277,753] [added: 284,241] | | | | | | [removed: 270,596] [added: 277,753] | | | | | | | | | | | | | | | | | | | | |
| Short-term borrowings (including [removed: $1,551] [added: $1,625] and [removed: $1,731] [added: $1,551] at fair value, respectively) | | | [removed: 23,422] [added: 24,828] | | | | | | [removed: 5,292] [added: 23,422] | | | | | | | | | | | | | | | | | | | | |
| Long-term debt | | | [removed: 43,203] [added: 38,918] | | | | | | [removed: 35,913] [added: 43,203] | | | | | | | | | | | | | | | | | | | | |
| Other liabilities (including [removed: $2,971] [added: $2,597] and [removed: $586] [added: $2,971] at fair value, respectively) | | | [removed: 14,598] [added: 16,485] | | | | | | [removed: 14,277] [added: 14,598] | | | | | | | | | | | | | | | | | | | | |
| Total liabilities | | | [removed: 494,718] [added: 476,096] | | | | | | [removed: 471,970] [added: 494,718] | | | | | | | | | | | | | | | | | | | | |
The qualitative components of the ACL incorporate management’s judgment in determining qualitative adjustments where model outputs are inconsistent with management’s expectations with respect to expected credit losses.
*Goodwill Impairment Analyses – CB&W and C&CB Reporting Units*
As described in Notes 1 and 7 to the consolidated financial statements, the Company’s consolidated goodwill balance was $20.9 billion as of December 31, 2023.
The goodwill associated with the Consumer Banking and Wealth (CB&W) and Corporate and Commercial Banking (C&CB) reporting units was $13.5 billion and $3.7 billion, respectively.
As disclosed by management, management performs a goodwill impairment analysis on an annual basis as of October 1 or more often if events or circumstances indicate that is more-likely-than-not that the fair value of a reporting unit is below its carrying value.
The quantitative impairment test estimates the fair value of the reporting units using the income approach and a market based approach.
The income approach utilizes a discounted cash flow analysis of multi-year financial forecasts developed for each reporting unit considering several inputs and assumptions such as net interest margin, expected credit losses, noninterest income, noninterest expense and required capital.
The principal considerations for our determination that performing procedures relating to the goodwill impairment analyses of the CB&W and C&CB reporting units is a critical audit matter are (i) the significant judgment by management when determining the fair value estimate of the CB&W and C&CB reporting units using the income approach and market based approach; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to net interest margin, noninterest expense, and the discount rates used in the income approach and the key valuation multiples and market control premiums used in the market based approach; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
These procedures included testing the effectiveness of controls relating to management’s goodwill impairment analyses, which included controls related to the valuation of the CB&W and C&CB reporting units.
These procedures also included, among others, testing management’s process for determining the fair value estimate of the CB&W and C&CB reporting units, which included evaluating the appropriateness of management’s income approach and market based approach, testing the completeness and accuracy of the underlying data used in the income approach and market based approach, and evaluating the reasonableness of management’s significant assumptions related to net interest margin, noninterest expense, and the discount rates used in the income approach and the key valuation multiples and market control premiums used in the market based approach.
Evaluating management’s assumptions related to net interest margin and noninterest expense involved evaluating whether the assumptions were reasonable considering (i) the current and past performance of the CB&W and C&CB reporting units and (ii) the consistency with external data.
Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the income approach and the market based approach and (ii) the reasonableness of the net interest margin and discount rate assumptions used in the income approach and the key valuation multiples and market control premium assumptions used in the market based approach.
February 27, 2024
| Goodwill impairment | | | | | | | | | | | | | | | | | | 6,078 | | | | | | — | | | | | | — | | |
| Net income (loss) | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,091) | | | | | | — | | | | | | 44 | | | | | | (1,047) | | | | | |
| OCI | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,095 | | | | | | — | | | | | | 1,095 | | | | | |
| Received in connection with TIH minority stake sale, net | | | — | | | | | | — | | | | | | — | | | | | | 1,317 | | | | | | — | | | | | | — | | | | | | 96 | | | | | | 1,413 | | | | | |
| Balance, December 31, 2023 | | | 1,333,743 | | | | | | $ | 6,673 | | | | | $ | 6,669 | | | | | $ | 36,177 | | | | | $ | 22,088 | | | | | $ | (12,506) | | | | | $ | 152 | | | | | $ | 59,253 | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Goodwill impairment | | | | | | 6,078 | | | | | | — | | | | | | — | | | | | |
| Net cash from TIH minority stake sale | | | | | | 1,922 | | | | | | — | | | | | | — | | | | | |
As a leading U.S. commercial bank, Truist has leading market share in many of the high-growth markets across the country.
These segments are being realigned in the first quarter of 2024.
In 2023, Truist reclassified certain portfolios within the consumer portfolio segment to delineate home equity from other consumer portfolios.
Additionally, Truist realigned Prime Rate Premium Finance Corporation, which includes AFCO Credit Corporation and CAFO Holding Company, into the C&CB segment from the IH segment.
Prior period results have been revised to conform to the current presentation.
In 2023, Truist updated its segment cost allocation methodology.
Results for 2023 have been revised to conform to the current presentation.
Management concluded the impact to 2022 was not material.
At the time of transfer, the loans are recorded at LOCOM and charge-offs are recorded as necessary at the transfer date.
Subsequent to the initial transfer to LHFS these assets are revalued at each subsequent reporting date, and any resulting adjustments are reported as changes to a valuation allowance, which is recorded as a component of Noninterest income in the Consolidated Statements of Income.
Loan Modifications
In certain circumstances, the Company enters into agreements to modify the terms of loans to borrowers that are experiencing financial difficulty.
The scope of these loan modifications varies from portfolio to portfolio but generally falls into one of the following categories:
- Renewals: represent the renewal of a loan where the Company has concluded that the borrower is experiencing financial difficulty.
Commercial renewals result in an extension of the maturity date of the loan (or in some cases a contraction of the loan term), and other significant terms of the loan (e.g., interest rate, collateral, guarantor support, etc.) are re-evaluated in connection with the renewal event.
- Term extensions: represent an adjustment to the maturity date of the loan that typically results in a reduction to the borrower’s scheduled payment over the remainder of the loan.
*Change in Accounting Principle*
As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for the allowance for credit losses in 2020.
The qualitative adjustments incorporate management judgment and are used to account for limitations in modeled results related to current economic conditions and other risks in the portfolios.
February 28, 2023
| Net income available to the bank holding company | | | | | | | | | | | | | | | | | | 6,260 | | | | | | 6,440 | | | | | | 4,482 | | |
| Balance, January 1, 2020 | | | 1,342,166 | | | | | | $ | 5,102 | | | | | $ | 6,711 | | | | | $ | 35,609 | | | | | $ | 19,806 | | | | | $ | (844) | | | | | $ | 174 | | | | | $ | 66,558 | | | | |
| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,482 | | | | | | — | | | | | | 10 | | | | | | 4,492 | | | | | |
| OCI | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,560 | | | | | | — | | | | | | 1,560 | | | | | |
| Issued in connection with preferred stock offering | | | — | | | | | | 3,449 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,449 | | | | | |
| Cumulative effect adjustment for new accounting standards | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | (2,109) | | | | | | — | | | | | | — | | | | | | (2,109) | | | | | |
| Net cash paid for premises and equipment | | | | | | (564) | | | | | | (442) | | | | | | (815) | | | | | |
| Net cash for (premiums) proceeds on bank-owned life insurance | | | | | | (147) | | | | | | (606) | | | | | | 83 | | | | | |
| Other, net | | | | | | 260 | | | | | | (331) | | | | | | (461) | | | | | |
| Net proceeds from preferred stock issued | | | | | | — | | | | | | — | | | | | | 3,449 | | | | | |
In the fourth quarter of 2022, the Company combined the presentation of Residential mortgage income and Commercial mortgage income into Mortgage banking income within the Company’s Consolidated Statement of Income.
Further, the Company started including Income from bank-owned life insurance as a component of Other income and Loan-related expense and Loss (gain) on early extinguishment of debt as components of Other expense within the Company’s Consolidated Statement of Income.
At the time of transfer, any credit losses are subject to charge-off in accordance with the Company’s policy and are recorded as a reduction in the ALLL.
Any additional losses, including those related to interest rate or liquidity-related valuation adjustments are recorded as a component of Noninterest income in the Consolidated Statements of Income.
The ALLL is a valuation account that is deducted from or added to the loans’ amortized cost basis to present the net amount expected to be collected on loans.
The ALLL is available to absorb losses on any loan category or lending-related commitment.
Loan or lease balances deemed to be uncollectible are charged off against the ALLL.
On January 1, 2020, Truist adopted the CECL accounting standard, which changed the manner in which it accounts for the allowance for credit losses.
Prior to the adoption of CECL, the ACL represented management’s estimate of probable credit losses incurred in the loan and lease portfolios and off-balance sheet lending commitments at the balance sheet date.
The estimation of the ACL prior to the adoption did not consider reasonable and supportable forecasts that could have affected the collectability of the reported amounts.
Truist’s policy is to review and individually evaluate the reserve for all nonperforming lending relationships and TDRs with an outstanding balance of $5 million or more, as such lending relationships do not typically share similar risk characteristics with others.
Private student loans were originated prior to 2021 with a credit enhancement from a third-party which partially mitigates the Company’s credit exposure.
The deferral method of accounting is used on investments that generate investment tax credits, such that the investment tax credits are recognized as a reduction to the related investment.
The provision for income taxes does not reflect the tax effects of unrealized gains and losses and other income and expenses recorded in AOCI.
AOCI.”
The income approach utilizes a discounted cash flow analysis.
| | | | | | | | | |
| Reference Rate Reform / December 21, 2022 | | | Defers the sunset date of LIBOR from December 31, 2022 to December 31, 2024. The standard was issued December 21, 2022 and was effective immediately. | | | There were no material impacts on the Company’s consolidated financial statements when the standard was adopted. | | |
Business Combinations
| Goodwill | | | 188 | | | 527 | | | 197 | | | 647 | | | 585 | | |
(2)Fair value estimates related to the acquired assets and liabilities are subject to adjustment during the one-year measurement period following the closing of the acquisition.
| U.S. Treasury | | | | | | $ | 9,892 | | | | | $ | 9 | | | | | $ | 106 | | | | | $ | 9,795 | | | | | | | | | | |
| GSE | | | | | | 1,667 | | | | | | 33 | | | | | | 2 | | | | | | 1,698 | | | | | | | | | | | |
| Agency MBS - residential | | | | | | 135,886 | | | | | | 656 | | | | | | 2,500 | | | | | | 134,042 | | | | | | | | | | | |
| Total AFS securities | | | | | | $ | 155,088 | | | | | $ | 755 | | | | | $ | 2,720 | | | | | $ | 153,123 | | | | | | | | | | |
In 2022, Truist transferred $59.4 billion of AFS securities to HTM as the Company continues to execute upon its asset-liability management strategies.
An excerpt. Shown here: 40 of 850 rewritten, 40 of 577 added and 40 of 278 removed. The counts are complete. For every sentence, read Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA in the FY2023 filing and the FY2022 filing.
Item 9A. CONTROLS AND PROCEDURES
3 rewritten, 0 added, 1 removed, 12 unchanged
Based on this evaluation under the COSO criteria, management concluded that the Company’s internal control over financial reporting was effective as of December 31, [removed: 2022.][added: 2023.]
The effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2022] [added: 2023] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their accompanying report, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2022.][added: 2023.]
There was no change in the Company’s internal control over financial reporting that occurred during the fourth quarter of [removed: 2022] [added: 2023] that has materially affected, or is likely to materially affect, the Company’s internal control over financial reporting.
142 Truist Financial Corporation
Item 9B. OTHER INFORMATION.
0 rewritten, 2 added, 0 removed, 0 unchanged
During the three months ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
156 Truist Financial Corporation
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
79 rewritten, 30 added, 36 removed, 86 unchanged
| | | | 3.2 | | | | | | [removed: Amended and Restated] Bylaws of Truist Financial [removed: Corporation] [added: Corporation, as Amended and Restated, Effective September 27, 2023.] | | | | | | [Incorporated herein by reference to Exhibit 3.1 of the [added: of the] Current Report on Form 8-K, filed October [removed: 26, 2022.](http://www.sec.gov/Archives/edgar/data/92230/000009223022000108/ex31-bylawsx1022.htm)] [added: 2, 2023.](http://www.sec.gov/Archives/edgar/data/92230/000009223023000073/ex31bylaws-0923.htm)] | | |
| | | | 4.9 | | | | | | Description of the Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 | | | | | | [Filed [removed: herewith.](https://www.sec.gov/Archives/edgar/data/92230/000009223023000034/ex49securities4q22.htm)] [added: herewith.](https://www.sec.gov/Archives/edgar/data/92230/000009223024000010/ex49securities4q23.htm)] | | |
| | | | [removed: 10.3*] [added: 10.2*] | | | | | | BB&T Corporation 2012 Incentive Plan, as amended | | | | | | [Incorporated herein by reference to Exhibit 10.1 of the Registration Statement on Form S-8, filed May 25, 2017.](http://www.sec.gov/Archives/edgar/data/92230/000009223017000046/ex101-incentiveplan_517.htm) | | |
| | | | [removed: 10.4*] [added: 10.3*] | | | | | | Form of Employee Nonqualified Stock Option Agreement for the BB&T Corporation Amended and Restated 2004 Stock Incentive Plan [removed: (5-Year] [added: (4-Year] Vesting). | | | | | | [Incorporated herein by reference to Exhibit [removed: 10.8] [added: 10.5] of the [removed: Annual] [added: Quarterly] Report on Form [removed: 10-K,] [added: 10-Q,] filed [removed: February 28, 2008.](http://www.sec.gov/Archives/edgar/data/92230/000119312508041900/dex108.htm)] [added: May 7, 2010.](http://www.sec.gov/Archives/edgar/data/92230/000119312510112881/dex105.htm)] | | |
| | | | [removed: 10.5*] [added: 10.9*] | | | | | | Form of Employee Nonqualified Stock Option Agreement for the BB&T Corporation [removed: Amended and Restated 2004 Stock] [added: 2012] Incentive [removed: Plan (4-Year Vesting).] [added: Plan.] | | | | | | [Incorporated herein by reference to Exhibit [removed: 10.5] [added: 10.1] of the Quarterly Report on Form 10-Q, filed May [removed: 7, 2010.](http://www.sec.gov/Archives/edgar/data/92230/000119312510112881/dex105.htm)] [added: 2, 2013.](http://www.sec.gov/Archives/edgar/data/92230/000009223013000043/exhibit101.htm)] | | |
| | | | [removed: 10.6*] [added: 10.26*] | | | | | | [removed: Southern National Deferred Compensation] [added: Truist Financial Corporation 401(k) Savings] Plan [removed: for Key Executives including Amendments.] | | | | | | [Incorporated herein by reference to Exhibit [removed: 10.21] [added: 10.64] of the Annual Report on Form 10-K, filed February [removed: 25, 2011.](http://www.sec.gov/Archives/edgar/data/92230/000119312511047405/dex1021.htm)] [added: 24, 2021.](http://www.sec.gov/Archives/edgar/data/92230/000009223021000032/ex1064401k4q20.htm)] | | |
| | | | [removed: 10.8*] [added: 10.4*] | | | | | | BB&T Nonqualified Defined Benefit Plan (January 1, 2012 Restatement) | | | | | | [removed: [I](http://www.sec.gov/Archives/edgar/data/92230/000009223016000125/exhibit1011.htm)[ncorporated her](http://www.sec.gov/Archives/edgar/data/92230/000009223016000125/exhibit1011.htm)[e](http://www.sec.gov/Archives/edgar/data/92230/000009223016000125/exhibit1011.htm)[in] [added: [Incorporated herein] by reference to Exhibit [removed: 10.](http://www.sec.gov/Archives/edgar/data/92230/000009223016000125/exhibit1011.htm)[11](http://www.sec.gov/Archives/edgar/data/92230/000009223016000125/exhibit1011.htm) [of] [added: 10.11 of] the Annual [removed: R](http://www.sec.gov/Archives/edgar/data/92230/000009223016000125/exhibit1011.htm)[e](http://www.sec.gov/Archives/edgar/data/92230/000009223016000125/exhibit1011.htm)[port] [added: Report] on [removed: F](http://www.sec.gov/Archives/edgar/data/92230/000009223016000125/exhibit1011.htm)[orm] [added: Form] 10-K, filed February 25, 2016](http://www.sec.gov/Archives/edgar/data/92230/000009223016000125/exhibit1011.htm). | | |
| | | | [removed: 10.9*] [added: 10.5*] | | | | | | First Amendment to the BB&T Non-Qualified Defined Benefit Plan (January 1, 2012 Restatement). | | | | | | [Incorporated herein by reference to Exhibit 10.12 of the Annual Report on Form 10-K, filed February 25, 2016.](http://www.sec.gov/Archives/edgar/data/92230/000009223016000125/exhibit1012.htm) | | |
| | | | [removed: 10.10*] [added: 10.6*] | | | | | | Second Amendment to the BB&T Non-Qualified Defined Benefit Plan (January 1, 2012 Restatement). | | | | | | [Incorporated herein by reference to Exhibit 10.13 of the Annual Report on Form 10-K, filed February 25, 2016.](http://www.sec.gov/Archives/edgar/data/92230/000009223016000125/exhibit1013.htm) | | |
| | | | [removed: 10.11*] [added: 10.7*] | | | | | | Third Amendment to the BB&T Non-Qualified Defined Benefit Plan (January 1, 2012 Restatement) | | | | | | [Incorporated herein by reference to Exhibit 10.11 of the Annual Report on Form 10-K, filed February 23, 2022.](https://www.sec.gov/Archives/edgar/data/92230/000009223022000008/ex1011nqdbpamendment.htm) | | |
Truist Financial Corporation [removed: 143][added: 157]
| | | | [removed: 10.12*] [added: 10.8*] | | | | | | Fourth Amendment to the BB&T Non-Qualified Benefit Plan (January 1, 2012 Restatement) | | | | | | [Incorporated herein by reference to Exhibit 10.12 of the Annual Report on Form 10-K, filed February 23, 2022.](https://www.sec.gov/Archives/edgar/data/92230/000009223022000008/ex1012nqdbpamendment.htm) | | |
| | | | [removed: 10.13*] [added: 10.39*] | | | | | | Form of Employee [removed: Nonqualified] [added: Restricted] Stock [removed: Option] [added: Unit] Agreement for the [removed: BB&T] [added: Truist Financial] Corporation [removed: Amended and Restated 2004 Stock] [added: 2022] Incentive Plan [removed: (4-Year Vesting with Clawback Provision).] | | | | | | [Incorporated herein by reference to Exhibit [removed: 10.1] [added: 10.3] of the Quarterly Report on Form 10-Q, filed May [removed: 4, 2012.](http://www.sec.gov/Archives/edgar/data/92230/000119312512212084/d343887dex101.htm)] [added: 5, 2022.](http://www.sec.gov/Archives/edgar/data/92230/000009223022000057/ex103restrictedstockagreem.htm)] | | |
| | | | [removed: 10.14*] [added: 10.10*] | | | | | | Form of [removed: Employee] Nonqualified [removed: Stock] Option Agreement [added: (Senior Executive)] for the BB&T Corporation 2012 Incentive Plan. | | | | | | [Incorporated herein by reference to Exhibit [removed: 10.1] [added: 10.4] of the Quarterly Report on Form 10-Q, filed [removed: May 2, 2013.](http://www.sec.gov/Archives/edgar/data/92230/000009223013000043/exhibit101.htm)] [added: April 30, 2014.](http://www.sec.gov/Archives/edgar/data/92230/000009223014000026/exhibit104.htm)] | | |
| | | | [removed: 10.15*] [added: 10.11*] | | | | | | Form of [removed: Nonqualified Option] [added: Restricted Stock Unit] Agreement [removed: (Senior] [added: (Performance-Based Vesting Component)(Senior] Executive) for the BB&T Corporation 2012 Incentive Plan. | | | | | | [Incorporated herein by reference to Exhibit [removed: 10.4] [added: 10.3] of the Quarterly Report on Form 10-Q, filed April 30, [removed: 2014.](http://www.sec.gov/Archives/edgar/data/92230/000009223014000026/exhibit104.htm)] [added: 2014.](http://www.sec.gov/Archives/edgar/data/92230/000009223014000026/exhibit103.htm)] | | |
| | | | [removed: 10.16*] [added: 10.44*] | | | | | | Form of Restricted Stock Unit Agreement [removed: (Performance-Based Vesting Component)(Senior Executive)] [added: (Senior Executive – 60/5 Retirement)] for the [removed: BB&T] [added: Truist Financial] Corporation [removed: 2012] [added: 2022] Incentive Plan. | | | | | | [Incorporated herein by reference to Exhibit [removed: 10.3] [added: 10.1] of the Quarterly Report on Form 10-Q, filed [removed: April 30, 2014.](http://www.sec.gov/Archives/edgar/data/92230/000009223014000026/exhibit103.htm)] [added: May 1, 2023.](http://www.sec.gov/Archives/edgar/data/92230/000009223023000047/ex101rsu.htm)] | | |
| | | | [removed: 10.17*] [added: 10.12*] | | | | | | Form of LTIP Award Agreement for the BB&T Corporation 2012 Incentive Plan (effective 2019). | | | | | | [Incorporated herein by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q, filed April 30, 2019.](http://www.sec.gov/Archives/edgar/data/92230/000009223019000027/ex102-formofltip1q19.htm) | | |
| | | | [removed: 10.18*] [added: 10.13*] | | | | | | Form of Performance Unit Award Agreement for the BB&T Corporation 2012 Incentive Plan (effective 2019). | | | | | | [Incorporated herein by reference to Exhibit 10.3 of the Quarterly Report on Form 10-Q, filed April 30, 2019.](http://www.sec.gov/Archives/edgar/data/92230/000009223019000027/ex103-formofperf1q19.htm) | | |
| | | | [removed: 10.19*] [added: 10.25*] | | | | | | [removed: 2008 Amended and Restated Employment] [added: Master Trust] Agreement [removed: by and among BB&T Corporation, Branch Banking] [added: (Nonqualified Plans) between Truist Financial Corporation] and [added: Fidelity Management] Trust [removed: Co. and Daryl N. Bible.] [added: Company] | | | | | | [Incorporated herein by reference to Exhibit [removed: 10.22] [added: 10.63] of the Annual Report on Form 10-K, filed February [removed: 27, 2009.](http://www.sec.gov/Archives/edgar/data/92230/000119312509041217/dex1022.htm)] [added: 24, 2021.](http://www.sec.gov/Archives/edgar/data/92230/000009223021000032/ex1063nqtrust4q20.htm)] | | |
| | | | [removed: 10.20*] [added: 10.36*] | | | | | | [removed: 2008 Amended and Restated Employment] [added: Qualified Trust] Agreement [removed: by and among BB&T Corporation, Branch Banking] [added: between Truist Financial Corporation] and [added: Fidelity Management] Trust [removed: Co. and Clarke R. Starnes, III.] [added: Company (July 15, 2020)] | | | | | | [Incorporated herein by reference to Exhibit [removed: 10.27] [added: 10.65] of the Annual Report on Form 10-K, filed February [removed: 27, 2009.](http://www.sec.gov/Archives/edgar/data/92230/000119312509041217/dex1027.htm)] [added: 24, 2021.](http://www.sec.gov/Archives/edgar/data/92230/000009223021000032/ex1065qualtrust4q20.htm)] | | |
| | | | [removed: 10.21*] [added: 10.37*] | | | | | | [removed: 2016 Employment] [added: First Amendment to Qualified Trust] Agreement [removed: by and among BB&T Corporation, Branch Banking] [added: between Truist Financial Corporation] and [added: Fidelity Management] Trust Company [removed: and David H. Weaver.] [added: (July 15, 2020)] | | | | | | [Incorporated herein by reference to Exhibit [removed: 10.39] [added: 10.66] of the Annual Report on Form 10-K, filed February [removed: 25, 2016.](http://www.sec.gov/Archives/edgar/data/92230/000009223016000125/exhibit1039.htm)] [added: 24, 2021.](http://www.sec.gov/Archives/edgar/data/92230/000009223021000032/ex1066trustamendment4q20.htm)] | | |
| | | | [removed: 10.22*] [added: 10.41*] | | | | | | [removed: 2016 Employment Agreement by and among BB&T Corporation, Branch Banking] [added: Retirement] and [removed: Trust] [added: Consulting Agreement between the] Company and [removed: Brant J. Standridge.] [added: Daryl N. Bible.] | | | | | | [Incorporated herein by reference to Exhibit [removed: 10.2] [added: 10.1] of the Quarterly Report on Form 10-Q, filed [removed: October 24, 2016.](http://www.sec.gov/Archives/edgar/data/92230/000009223016000202/exh102standridgeagreement.htm)] [added: August 1, 2022.](http://www.sec.gov/Archives/edgar/data/92230/000009223022000083/ex101bibleagreement.htm)] | | |
| | | | [removed: 10.28*] [added: 10.51*] | | | | | | First Amendment [added: and Resolutions] to [removed: 2016 Employment Agreement with Brant J. Standridge] [added: the Truist Financial Corporation Non-Qualified Deferred Compensation Plan] | | | | | | [Incorporated herein by reference to Exhibit [removed: 10.9] [added: 10.2] of the Quarterly Report on Form 10-Q, filed July 31, [removed: 2019.](http://www.sec.gov/Archives/edgar/data/92230/000009223019000046/ex109-standridge.htm)] [added: 2023.](http://www.sec.gov/Archives/edgar/data/92230/000009223023000067/ex102nqdcpamendment.htm)] | | |
| | | | [removed: 10.32*] [added: 10.14*] | | | | | | SunTrust Banks, Inc. 2009 Stock Plan, as amended and restated as of August 11, 2015 | | | | | | [Incorporated by reference to Exhibit 10.1 to SunTrust's Current Report on Form 8-K, filed August 13, 2015.](http://www.sec.gov/Archives/edgar/data/750556/000075055615000142/exhibit101docx.htm) | | |
| | | | [removed: 10.33*] [added: 10.15*] | | | | | | Form of Nonqualified Stock Option Agreement | | | | | | [Incorporated by reference to Exhibit 10.1.1 to SunTrust's Registration Statement No. 333-158866 on Form S-8, filed April 28, 2009.](http://www.sec.gov/Archives/edgar/data/750556/000119312509090284/dex1011.htm) | | |
| | | | [removed: 10.34*] [added: 10.16*] | | | | | | Form of Nonqualified Stock Option Award Agreement with clawback under the SunTrust Banks, Inc. 2009 Stock Plan | | | | | | [Incorporated by reference to Exhibit 10.29 of SunTrust's Annual Report on Form 10-K, filed February 24, 2012.](http://www.sec.gov/Archives/edgar/data/750556/000075055612000053/sti-123111xexhibit1029.htm) | | |
| | | | [removed: 10.35*] [added: 10.17*] | | | | | | SunTrust Banks, Inc. ERISA Excess Retirement Plan, amended and restated effective as of January 1, 2011 | | | | | | [Incorporated herein by reference to Exhibit 10.8 to SunTrust's Quarterly Report on Form 10-Q, filed August 9, 2011.](http://www.sec.gov/Archives/edgar/data/750556/000119312511216131/dex108.htm) | | |
| | | | [removed: 10.36*] [added: 10.18*] | | | | | | Further amended by Amendment Number One, effective as of January 1, 2012 | | | | | | [Incorporated herein by reference to Exhibit 10.10 to SunTrust's Annual Report on Form 10-K, filed February 24, 2012.](http://www.sec.gov/Archives/edgar/data/750556/000075055612000053/sti-123111xex1010.htm) | | |
[removed: 144] [added: 158] Truist Financial Corporation
| | | | [removed: 10.45*] [added: 10.19*] | | | | | | Form of Restricted Stock Unit Agreement (Non-Employee Directors) for the Truist Financial Corporation 2012 Incentive Plan (effective 2020). | | | | | | [Incorporated herein by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q, filed May 8, 2020.](http://www.sec.gov/Archives/edgar/data/92230/000009223020000060/ex101formofrsu1q20.htm) | | |
| | | | [removed: 10.46*] [added: 10.20*] | | | | | | Form of Restricted Stock Unit Agreement (Category 2 Employee) for the Truist Financial Corporation 2012 Incentive Plan (effective 2021). | | | | | | [Incorporated herein by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q, filed May 3, 2021.](http://www.sec.gov/Archives/edgar/data/92230/000009223021000044/ex101formofrsucat2_1q21.htm) | | |
| | | | [removed: 10.47*] [added: 10.21*] | | | | | | Form of Restricted Stock Unit Agreement (Senior Executive) for the Truist Financial Corporation 2012 Incentive Plan (effective 2021). | | | | | | [Incorporated herein by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q, filed May 3, 2021.](http://www.sec.gov/Archives/edgar/data/92230/000009223021000044/ex102formofrsu_1q21.htm) | | |
| | | | [removed: 10.48*] [added: 10.22*] | | | | | | Form of LTIP Award Agreement for the Truist Financial Corporation 2012 Incentive Plan (effective 2021). | | | | | | [Incorporated herein by reference to Exhibit 10.3 of the Quarterly Report on Form 10-Q, filed May 3, 2021.](http://www.sec.gov/Archives/edgar/data/92230/000009223021000044/ex103formofltip_1q21.htm) | | |
| | | | [removed: 10.49*] [added: 10.23*] | | | | | | Form of Performance Unit Award Agreement for the Truist Financial Corporation 2012 Incentive Plan (effective 2021). | | | | | | [Incorporated herein by reference to Exhibit 10.4 of the Quarterly Report on Form 10-Q, filed May 3, 2021.](http://www.sec.gov/Archives/edgar/data/92230/000009223021000044/ex104formofpsu_1q21.htm) | | |
| | | | [removed: 10.50*] [added: 10.24*] | | | | | | Truist Financial Corporation Nonqualified Defined Contribution Plan | | | | | | [Incorporated herein by reference to Exhibit 10.62 of the Annual Report on Form 10-K, filed February 24, 2021.](http://www.sec.gov/Archives/edgar/data/92230/000009223021000032/ex1062nqdc4q20.htm) | | |
| | | | [removed: 10.51*] [added: 10.55*] | | | | | | [added: Second Amendment to] Master Trust Agreement [removed: (Nonqualified] [added: (Non-Qualified] Plans) between [removed: Truist Financial Corporation and] Fidelity Management Trust Company [added: and Truist Financial Corporation] | | | | | | [removed: [Incorporated herein by reference to Exhibit 10.63 of the Annual Report on Form 10-K, filed February 24, 2021.](http://www.sec.gov/Archives/edgar/data/92230/000009223021000032/ex1063nqtrust4q20.htm)] [added: [Filed herewith.](https://www.sec.gov/Archives/edgar/data/92230/000009223024000010/ex1055nqdcpamendment.htm)] | | |
| | | | [removed: 10.52*] [added: 10.29*] | | | | | | [added: Third Amendment to the] Truist Financial Corporation 401(k) Savings Plan [added: (August 1, 2020 Restatement)] | | | | | | [Incorporated herein by reference to Exhibit [removed: 10.64] [added: 10.55] of the Annual Report on Form 10-K, filed February [removed: 24, 2021.](http://www.sec.gov/Archives/edgar/data/92230/000009223021000032/ex1064401k4q20.htm)] [added: 28, 2023.](http://www.sec.gov/Archives/edgar/data/92230/000009223023000034/ex1055-401kamendment.htm)] | | |
| | | | [removed: 10.53*] [added: 10.27*] | | | | | | First Amendment to the Truist Financial Corporation 401(k) Savings Plan (August 1, 2020 Restatement) | | | | | | [Incorporated herein by reference to Exhibit 10.62 of the Annual Report on Form 10-K, filed February 23, 2022.](https://www.sec.gov/Archives/edgar/data/92230/000009223022000008/ex1062401kamendment.htm) | | |
| | | | [removed: 10.54*] [added: 10.28*] | | | | | | Second Amendment to the Truist Financial Corporation 401(k) Saving Plan (August 1, 2020 Restatement) | | | | | | [Incorporated herein by reference to Exhibit 10.63 of the Annual Report on Form 10-K, filed February 23, 2022.](https://www.sec.gov/Archives/edgar/data/92230/000009223022000008/ex1063401kamendment.htm) | | |
| | | | [removed: 10.55*] [added: 10.60*] | | | | | | [removed: Third] [added: Sixth] Amendment to the Truist Financial Corporation 401(k) Savings Plan (August 1, 2020 Restatement) | | | | | | [Filed [removed: herewith.](https://www.sec.gov/Archives/edgar/data/92230/000009223023000034/ex1055-401kamendment.htm)] [added: herewith.](https://www.sec.gov/Archives/edgar/data/92230/000009223024000010/ex1060401kamendment.htm)] | | |
| | | | 2.1 | | | | | | Equity Interest Purchase Agreement, dated as of February 20, 2024, by and among Trident Butterfly Investor, Inc., Panther Blocker I, Inc., Panther Blocker II, Inc., Truist Bank, Truist TIH Holdings, Inc., Truist TIH Partners, Inc., TIH Management Holdings, LLC, TIH Management Holdings II, LLC and Truist Insurance Holdings, LLC. | | | | | | [Incorporated herein by reference to Exhibit](http://www.sec.gov/Archives/edgar/data/92230/000095010324002395/dp207007_ex0201.htm) [2.1](http://www.sec.gov/Archives/edgar/data/92230/000095010324002395/dp207007_ex0201.htm) [of the Current Report on Form 8-K, filed](http://www.sec.gov/Archives/edgar/data/92230/000095010324002395/dp207007_ex0201.htm) [F](http://www.sec.gov/Archives/edgar/data/92230/000095010324002395/dp207007_ex0201.htm)[ebruary 20,](http://www.sec.gov/Archives/edgar/data/92230/000095010324002395/dp207007_ex0201.htm) [2024](http://www.sec.gov/Archives/edgar/data/92230/000095010324002395/dp207007_ex0201.htm)[.](http://www.sec.gov/Archives/edgar/data/92230/000095010324002395/dp207007_ex0201.htm) | | |
| | | | 10.46* | | | | | | Form of Performance Unit Award Agreement (Senior Executive – 60/10 Retirement) for the Truist Financial Corporation 2022 Incentive Plan. | | | | | | [Incorporated herein by reference to Exhibit 10.](http://www.sec.gov/Archives/edgar/data/92230/000009223023000047/ex103psu6010.htm)[3](http://www.sec.gov/Archives/edgar/data/92230/000009223023000047/ex103psu6010.htm) [of the Quarterly Report on Form 10-Q, filed May 1, 2023.](http://www.sec.gov/Archives/edgar/data/92230/000009223023000047/ex103psu6010.htm) | | |
| | | | 10.47* | | | | | | Form of LTIP Award Agreement (Senior Executive – 60/5 Retirement) for the Truist Financial Corporation 2022 Incentive Plan. | | | | | | [Incorporated herein by reference to Exhibit 10.](http://www.sec.gov/Archives/edgar/data/92230/000009223023000047/ex104ltip605.htm)[4](http://www.sec.gov/Archives/edgar/data/92230/000009223023000047/ex104ltip605.htm) [of the Quarterly Report on Form 10-Q, filed May 1, 2023.](http://www.sec.gov/Archives/edgar/data/92230/000009223023000047/ex104ltip605.htm) | | |
| | | | 10.48* | | | | | | Form of LTIP Award Agreement (Senior Executive – 60/10 Retirement) for the Truist Financial Corporation 2022 Incentive Plan. | | | | | | [Incorporated herein by reference to Exhibit 10.](http://www.sec.gov/Archives/edgar/data/92230/000009223023000047/ex105ltip6010.htm)[5](http://www.sec.gov/Archives/edgar/data/92230/000009223023000047/ex105ltip6010.htm) [of the Quarterly Report on Form 10-Q, filed May 1, 2023.](http://www.sec.gov/Archives/edgar/data/92230/000009223023000047/ex105ltip6010.htm) | | |
| | | | 10.49* | | | | | | 2023 Employment Agreement by and between Truist Insurance Holdings, Inc. and John Howard. | | | | | | [Incorporated herein by reference to Exhibit 10.](http://www.sec.gov/Archives/edgar/data/92230/000009223023000047/ex106howard.htm)[6](http://www.sec.gov/Archives/edgar/data/92230/000009223023000047/ex106howard.htm) [of the Quarterly Report on Form 10-Q, filed May 1, 2023.](http://www.sec.gov/Archives/edgar/data/92230/000009223023000047/ex106howard.htm) | | |
| | | | 10.53* | | | | | | Fifth Amendment to the Truist Financial Corporation 401(k) Savings Plan (August 1, 2020 Restatement) | | | | | | [Incorporated herein by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q, filed October 31, 2023.](http://www.sec.gov/Archives/edgar/data/92230/000009223023000084/ex102401kamendment.htm) | | |
| | | | 10.54* | | | | | | Second Amendment to the Truist Financial Corporation Non-Qualified Defined Contribution Plan | | | | | | [Filed herewith.](https://www.sec.gov/Archives/edgar/data/92230/000009223024000010/ex1054nqdcpamendment.htm) | | |
| | | | 10.56* | | | | | | Third Amendment to the Truist Financial Corporation Pension Plan (October 1, 2020 Restatement) | | | | | | [Filed herewith.](https://www.sec.gov/Archives/edgar/data/92230/000009223024000010/ex1056pensionamendment.htm) | | |
| | | | 10.57* | | | | | | Fourth Amendment to the Truist Financial Corporation Pension Plan (October 1, 2020 Restatement) | | | | | | [Filed herewith.](https://www.sec.gov/Archives/edgar/data/92230/000009223024000010/ex1057pensionamendment.htm) | | |
| | | | 10.58* | | | | | | Fifth Amendment to the Truist Financial Corporation Pension Plan (October 1, 2020 Restatement) | | | | | | [Filed herewith.](https://www.sec.gov/Archives/edgar/data/92230/000009223024000010/ex1058pensionamendment.htm) | | |
| | | | 10.59* | | | | | | Seventh Amendment to the Truist Financial Corporation Pension Plan (October 1, 2020 Restatement) | | | | | | [Filed herewith.](https://www.sec.gov/Archives/edgar/data/92230/000009223024000010/ex1059pensionamendment.htm) | | |
| | | | 10.62* | | | | | | Amended and Restated Management Change of Control, Severance, and Noncompetition Plan | | | | | | [Filed herewith.](https://www.sec.gov/Archives/edgar/data/92230/000009223024000010/ex1062mccsn.htm) | | |
| | | | 97* | | | | | | Executive Compensation Recoupment Policy | | | | | | [Filed herewith.](https://www.sec.gov/Archives/edgar/data/92230/000009223024000010/ex97ecrp4q23.htm) | | |
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| | | | 10.2* | | | | | | BB&T Corporation Amended and Restated 2004 Stock Incentive Plan, as amended (as amended through February 24, 2009). | | | | | | [Incorporated herein by reference to the Appendix to the Proxy Statement for the 2009 Annual Meeting of Shareholders on Schedule 14A, filed March 13, 2009.](http://www.sec.gov/Archives/edgar/data/92230/000119312509053547/ddef14a.htm) | | |
| | | | 10.7* | | | | | | Termination Amendment for the Southern National Deferred Compensation Plan for Key Executives | | | | | | [Filed herewith.](https://www.sec.gov/Archives/edgar/data/92230/000009223023000034/ex107-plantermination.htm) | | |
| | | | 10.23* | | | | | | 2016 Employment Agreement by and among BB&T Corporation, Branch Banking and Trust Company and Dontá L. Wilson. | | | | | | [Incorporated herein by reference to Exhibit 10.3 of the Quarterly Report on Form 10-Q, filed October 24, 2016.](http://www.sec.gov/Archives/edgar/data/92230/000009223016000202/exh103wilsonagreement.htm) | | |
| | | | 10.24* | | | | | | Amended and Restated Employment Agreement by and among BB&T Corporation, Branch Banking and Trust Co. and Kelly S. King dated as of February 7, 2019. | | | | | | [Incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K, filed February 13, 2019.](http://www.sec.gov/Archives/edgar/data/92230/000119312519036824/d704920dex101.htm) | | |
| | | | 10.25* | | | | | | Form of Notice of Term Non-Renewal under Employment Agreements | | | | | | [Incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K, filed March 6, 2019.](http://www.sec.gov/Archives/edgar/data/92230/000119312519065664/d689471dex101.htm) | | |
| | | | 10.26* | | | | | | Form of Synergy Incentive Award Letter with each of Daryl N. Bible and Clarke R. Starnes, III | | | | | | [Incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K, filed June 3, 2019.](http://www.sec.gov/Archives/edgar/data/92230/000119312519164141/d689566dex101.htm) | | |
| | | | 10.27* | | | | | | Form of First Amendment to Employment Agreement with each of Daryl N. Bible and Clarke R. Starnes, III | | | | | | [Incorporated herein by reference to Exhibit 10.4 of the Current Report on Form 8-K, filed June 3, 2019.](http://www.sec.gov/Archives/edgar/data/92230/000119312519164141/d689566dex104.htm) | | |
| | | | 10.29* | | | | | | First Amendment to 2016 Employment Agreement with David H. Weaver | | | | | | [Incorporated herein by reference to Exhibit 10.10 of the Quarterly Report on Form 10-Q, filed July 31, 2019.](http://www.sec.gov/Archives/edgar/data/92230/000009223019000046/ex1010-weaver.htm) | | |
| | | | 10.30* | | | | | | First Amendment to 2016 Employment Agreement with Dontá L. Wilson | | | | | | [Incorporated herein by reference to Exhibit 10.11 of the Quarterly Report on Form 10-Q, filed July 31, 2019.](http://www.sec.gov/Archives/edgar/data/92230/000009223019000046/ex1011-wilson.htm) | | |
| | | | 10.31* | | | | | | Form of Synergy Incentive Award Letter with each of Brant J. Standridge, David H. Weaver and Dontá L. Wilson | | | | | | [Incorporated herein by reference to Exhibit 10.14 of the Quarterly Report on Form 10-Q, filed July 31, 2019.](http://www.sec.gov/Archives/edgar/data/92230/000009223019000046/ex1014-formofsynergy.htm) | | |
| | | | 10.37* | | | | | | SunTrust Banks, Inc. 2018 Omnibus Incentive Compensation Plan | | | | | | [Incorporated herein by reference to Appendix B to SunTrust's definitive Proxy Statement, filed March 9, 2018.](http://www.sec.gov/Archives/edgar/data/750556/000119312518076060/d472325ddef14a.htm#toc472325_58) | | |
| | | | 10.38* | | | | | | Form of Performance-Vested Restricted Stock Unit Award Agreement, Type I | | | | | | [Incorporated herein by reference to Exhibit 10.3 to SunTrust’s Quarterly Report on Form 10-Q, filed May 4, 2018.](https://www.sec.gov/Archives/edgar/data/750556/000075055618000141/a33118exhibit103.htm) | | |
| | | | 10.39* | | | | | | Form of Performance-Vested Restricted Stock Unit Award Agreement, Type II | | | | | | [Incorporated herein by reference to Exhibit 10.4 to SunTrust’s Quarterly Report on Form 10-Q, filed May 4, 2018.](https://www.sec.gov/Archives/edgar/data/750556/000075055618000141/a33118exhibit104.htm) | | |
| | | | 10.40* | | | | | | Form of Time-Vested Restricted Stock Unit Award Agreement, Type I | | | | | | [Incorporated herein by reference to Exhibit 10.5 to SunTrust's Quarterly Report on Form 10-Q, filed May 4, 2018.](http://www.sec.gov/Archives/edgar/data/750556/000075055618000141/a33118exhibit105.htm) | | |
| | | | 10.41* | | | | | | Form of Time-Vested Restricted Stock Unit Award Agreement, Type II | | | | | | [Incorporated herein by reference to Exhibit 10.6 to SunTrust's Quarterly Report on Form 10-Q, filed May 4, 2018.](http://www.sec.gov/Archives/edgar/data/750556/000075055618000141/a33118exhibit106.htm) | | |
| | | | 10.42* | | | | | | Form of Time-Vested Restricted Stock Unit Award Agreement, Type III | | | | | | [Incorporated herein by reference to Exhibit 10.7 to SunTrust's Quarterly Report on Form 10-Q, filed May 4, 2018.](http://www.sec.gov/Archives/edgar/data/750556/000075055618000141/a33118exhibit107.htm) | | |
| | | | 10.43* | | | | | | Form of Time-Vested Restricted Stock Unit Award Agreement, Type IV | | | | | | [Incorporated herein by reference to Exhibit 10.8 to SunTrust's Quarterly Report on Form 10-Q, filed May 4, 2018.](http://www.sec.gov/Archives/edgar/data/750556/000075055618000141/a33118exhibit108.htm) | | |
| | | | 10.44* | | | | | | 2019 Employment Agreement by and among BB&T Corporation, Branch Banking and Trust Company and William H. Rogers, Jr. | | | | | | [Incorporated herein by reference to Exhibit 10.90 of the Annual Report on Form 10-K, filed March 3, 2020.](http://www.sec.gov/Archives/edgar/data/92230/000009223020000045/ex1090rogers.htm) | | |
| | | | 10.65* | | | | | | Letter to the Board of Directors from William H. Rogers Jr. dated, April 14, 2022, waiving certain rights under his employment agreement | | | | | | [Incorporated herein by reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q, filed May 5, 2022.](http://www.sec.gov/Archives/edgar/data/92230/000009223022000057/ex102rogerswaiver1q22.htm) | | |
| | | | 11 | | | | | | Statement re computation of earnings per share. | | | | | | [Filed herewith as Computation of EPS note to the consolidated financial statements.](#id4cd8c88a205496e83a8121fe08b1036_235) | | |
| /s/ Anna R. Cablik | | | | | | Director | | | | | | February 28, 2023 | | |
| Anna R. Cablik | | | | | | | | | | | | | | |
| /s/ Paul D. Donahue | | | | | | Director | | | | | | February 28, 2023 | | |
| Paul D. Donahue | | | | | | | | | | | | | | |
| /s/ Kelly S. King | | | | | | Director | | | | | | February 28, 2023 | | |
| Kelly S. King | | | | | | | | | | | | | | |
| /s/ Easter A. Maynard | | | | | | Director | | | | | | February 28, 2023 | | |
| Easter A. Maynard | | | | | | | | | | | | | | |
| /s/ Nido R. Qubein | | | | | | Director | | | | | | February 28, 2023 | | |
| Nido R. Qubein | | | | | | | | | | | | | | |
| /s/ David M. Ratcliffe | | | | | | Director | | | | | | February 28, 2023 | | |
| David M. Ratcliffe | | | | | | | | | | | | | | |
| /s/ Frank P. Scruggs, Jr. | | | | | | Director | | | | | | February 28, 2023 | | |
| Frank P. Scruggs, Jr. | | | | | | | | | | | | | | |
| /s/ Thomas N. Thompson | | | | | | Director | | | | | | February 28, 2023 | | |
| Thomas N. Thompson | | | | | | | | | | | | | | |
An excerpt. Shown here: 40 of 79 rewritten, all 30 added and all 36 removed. The counts are complete. For every sentence, read Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES in the FY2023 filing and the FY2022 filing.