Truist Financial Corporation (NYSE:TFC) Q3 2023 Earnings Call Transcript

So we’ve got about one-third – a little less than one-third of the AFS securities hedged.

Ryan Kenny: Thanks. And then just as a follow-up, on the credit side. Just give a little bit more color on what you’re seeing in terms of credit quality. And I’m asking because it does look like you’ve increased your 2023 NCO guide slightly to the higher end of the prior range. Just wondering if you can share what you’re seeing under the surface.

Mike Maguire: Yes, Ryan, it’s a good question. First, I’d say we haven’t established our 2024 guidance yet, but I believe the things that will drive where we go forward are the same considerations we are seeing now coming out of Q3 and going into Q4. And so I would say for us, we are seeing normalization in our consumer area, particularly in the low-end consumer. So think of our regional acceptance, subprime auto. And then you’ve also got some defined seasonality in the second half of the year that’s impacting Q4 outlook. The other piece would be on what Bill spoke of earlier and Mike, we’re remixing our balance sheet to be more optimal. And so you’re seeing more growth in our higher-margin businesses like Sheffield and Service Finance, but they carry higher normal losses.

And then I think most importantly, something that we control is our efforts to get ahead of the CRE office risk. So in Q3, we were very intentional about working through moving from just identifying the risk there to actually resolving several of the problem credits. And we took some losses there to do that. And we’re anticipating maybe opportunities to do more in Q4. So I think those are the three factors that will impact where losses go.

Ryan Kenny: Great. Thank you.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Brad Milsaps for any closing remarks.

Brad Milsaps: Okay. Thanks, Anthony. That completes our earnings call. If you have any additional questions, please feel free to reach out to the Investor Relations team. Thank you for your interest in Truist, and we hope you have a great day. Anthony, you can now disconnect the call.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.