Truist Financial Corporation (TFC) Earnings Call Transcript & Summary

Good morning. I'm Jason Goldberg. I cover the U.S. large-cap banks here at Barclays. Very pleased to have with us Truist. For those that may not know, you know we've had BB&T been a long-standing participant in this conference, and SunTrust has certainly come its fair share over the years. But in December, the 2 companies completed their merger of equals, one of the largest mergers in recent memory and created what is the sixth largest bank in the United States with a very strong retail footprint throughout the Southeast as well as several businesses that operate on a national basis, including a regional investment banking and insurance. From the company today, we're very pleased to have with us Chairman and CEO, Kelly King. Also present in the room albeit with the social distance is Daryl Bible, Chief Financial Officer; as well as Ryan Richards, relatively new investor -- Head of Investor Relations. And with that, let me turn it over to Kelly.

Thanks, Jason, and good afternoon, everybody. Thank you for taking time to join our conference. We really appreciate your interest in our business. I want to talk to you a little bit about the assets of Truist and then we'll get to some numbers and some strategies. But before we get to that, I want to talk to you about, as you're following along on the deck, it will be the first slide showing our culture. We believe that culture is the most important determinant of our historical success and our future success. A lot of people are confused about that but we are not. Our culture, we view in terms of our purpose, our mission and our values. Now more than ever, culture is what's Truist. And here's why. Because culture drives the long-term success. It provides the guidelines, the boundaries, if you will, of how a company operates and people get confused between culture and strategies and tactics. The truth is culture should be enduring; strategies and tactics change all the time. And while what a time we see now where our strategies and tactics are really, really changing, that does not change the long-term culture of the company. So I want you to understand the culture of Truist. So our purpose is to inspire and build better lives and communities. We're very, very serious about this. We are a different kind of company. We believe that we can serve our purpose and meet all the needs of all of our stakeholders by serving out this idea of inspiring and building better lives and communities. We want to do all that we can do for our communities, but we want to inspire others to join along as well. We really want to make the world better. We want to do our part. We want to inspire others to come along beside us and make the world better as well. We do that through our mission, which is focusing on our clients, our teammates and our stakeholders. For our clients, we talk about providing distinctive and secure and successful client experiences through touch and technology. This is very, very important today because the world has really changed over the last 10 years and especially now as people are looking for an experience that is an integrated experience between technology and touch resulting in a high level of trust, and that's what we're focusing on at Truist. It's very, very important to take care of your teammates at all times, especially now. We do that by creating an inclusive and energizing environment that empowers teammates to learn, grow and have meaningful careers. We are very, very committed to having a diverse and inclusive environment at Truist and here's why. First of all, we think it's morally right. And secondly, you can't have an energizing environment that empowers teammates if you don't have an inclusive environment. You're never going to have teammates that are learning and growing and having long-term meaningful careers, if they don't feel included. So we are very, very serious at Truist. There is 0 tolerance for any form of discrimination in all of its ugly forms at Truist, and we believe that we'll be at a place where people will really learn and grow in their environment with our company. And we're very committed to all of our stakeholders, optimizing the long-term value of stakeholders through safe, sound and ethical practices. Now is the time more than ever for all of us to focus on all stakeholders, not just shareholders, but all of our communities and all of the other constituencies that we serve, and we are very, very not only committed to that, but we enjoy that. We find that to be one of the areas that inspires our teammates and causes us to get up in the morning excited to go out and do what we can do to help our clients, but also all aspects of our communities and our other stakeholders. We live by a very strict set of values, and those values mean everything to us the way we live our personal lives, the way we live our corporate life. They are trustworthy, caring, one team, success and happiness. We really, really understand that for our clients to depend on us, they must trust us, and we serve with a high degree of integrity. We are very caring. We believe that every moment and every interaction matters, so we treat every human being as the most important person in the world to us at the time we're interacting with them. We believe that to optimize our success as a company, we have to operate as a team. And we believe the only the way to allow people to be empowered and energized is to feel like they are a part of a team, even virtually to date, as we are experiencing, that's a very, very important value to us. Finally, we feel very strongly that we want all of our teammates to experience success and happiness. Some organizations seem to focus more on success than on happiness. We want people to be successful because we believe when we win, our clients win, but we want to do it in a way so that our clients and to the extent we can control it, our clients are happy as well. So happiness creates positive energies. It creates an enduring long way to be able to sustain the company so that it operates in a very, very wholesome in long term and sustainable way. So we believe that the most important distinguishing characteristic of Truist is our culture. So if you want to follow along in the deck, I'll give you a little more about the company. So as Jason said, we did do our merger of equals back in December. We have a combined 275 years of experience. We're the sixth largest U.S. commercial bank by market value and assets. We have the second weighted average deposit market share in the top 20 MSAs. We have 12 million households with 58,000 teammates serving those households. So if you look at the next slide, you will see just some of the additional detail with regard to that. I would point out that we are fifth in loans and sixth in the other categories. On the following slide, you will see, we're also -- we're very proud we're the #1 regional bank-owned investment bank, and we have the second regional bank mortgage originator and servicing operation. You can see in the map there that we have -- in most of our states, we have the top 3 -- top -- in the top 3 in terms of deposit market share. And then we dropped down a little to 4 to 6 and most of the others. So we have really good density in our markets. And density in banking is really, really important, always has been and always will be. And the reason is because we get to leverage our leadership talent, we get leverage marketing and advertising and it makes a much more efficient operation. We can know the community better when we're very dense in those markets. And fortunately, with the combination of our 2 companies, we are very, very dense. On the next slide, you'll see that we are very fortunate. One of the things that Bill Rogers, the former CEO of SunTrust and I talked about early was that combining these businesses was a very synergistic, logical combination because of the comprehensive business mix that we now have. We have a very strong offering in consumer banking and wealth, our corporate and commercial banking. And as I said, the fifth largest insurance holding company in the country. We're very strong in all of those segments in lending, deposit and fee business. So we have a very in-depth offering across that entire business mix. That is very important because we've learned that long term, the best way to thrive is to have good capital, good liquidity and good diversification, diversification of product services and markets, and that's exactly what you see there. That's amplified in terms of the next slide, in terms of our revenue streams, where you'd see that we're very fortunate to have 35% of our income coming from noninterest income, especially in times like these, having a really strong diversified income stream is very important, particularly noninterest income. Obviously, NIM is under a lot of pressure today. We're doing well and better than most. But still, we feel very good. We have a very strong noninterest income level of income. And you can see on the right piechart there, even our fee income is very diversified across a wide range of different sources. So what we found is that on any given day, on any sort of circumstances, you're going to have some fee levels that are going to do real well and some that won't do as well. And so diversification, even within that form of diversification is very, very important. You can see the same thing on the balance sheet where we are very diversified. Our loans are basically divided about half consumer, half business, which is the way we like it because that's another form of good diversification. Sometimes business world is doing better, sometimes consumer is doing better. Having a good balance there is very, very good. Our deposit structure is very strong. We have 28% of our deposits in noninterest-bearing deposits. And to be honest right now in this COVID environment experience, our deposits are doing fantastic. We are viewed as a flight quality candidate and our deposits are increasing at a very, very rapid pace. If you go over to a couple other slides, we'll see a slide on our executive management team. We're very fortunate in putting these 2 companies together that we are really able to have the best-in-class in teammates from both companies. So you have 2 great companies, 2 great sets of leaders, and we were able to pick the very, very best ones to create our new Truist executive leadership team. They're 14 in the team, very, very experienced with 28 years of industry experience and 23 years of average experience with the legacy company. So very steeped and experienced in the industry and our companies. In terms of the way we compensate ourselves, we compensate ourselves the way we believe, you would like for us to. It's a very pay-for-performance program. It is very focused on salary and incentives, with most of the income coming in the form of incentives and those incentives being long-term performance-based incentives. So we've structured that as best we can to be a very shareholder-friendly because we do not want to make money unless the shareholders make money. It's just that simple, and so we live by that every single day. I would tell you that this new team is working together great. Even though we've only been an official team for about 5 months, we did work together for about a year before the actual closing. And if you were to be on one of our rooms, one of our meetings, you would have thought this team has been working together for 20 years. It's a fantastic experience. I'm very much enjoying being the leader. Bill Rogers and I working very closely together. He's doing a fantastic job. And so the talent in that room is fantastic, and there's 100% alignment on being purpose driven. So what we're trying to do, and we're working very hard to do is to create a different kind of company, a very distinctive culture that I described. We want our Truist teammates to be focused on the client experience. We understand that we live and work every day for the benefit of our clients and that influences everything that we do. And a really big thing, a simple little thing, but we are just really better together. Bill and I talked about before we did this merger, we were actually asked by some Board members, "Well, how would you feel about having done this merger, if bad times come?" We both said, we feel a lot better. And well, bad times have come. And so we feel better. We are so strong together, so diversified, have synergistic operations, it's fantastic. I'm going to give you a little more information about the culture because, as I said, it's the most important thing. So I want you to understand why I feel so good about that. We did a lot of studies from our teammates in terms of how they feel about the culture. And what we found that in both studies was that the culture of these 2 companies listening to feedback from 20,000 to 40,000 types of survey feedback from our teammates that we are almost totally and completely aligned on our purpose, our mission and our values. Our beliefs of honesty and trust and caring inspired by bigger why is what has driven both companies for a long time and continues to drive Truist. If you look at our strategies today, they're really very simple, but I think profound. Our mission is to optimize our long-term value for stakeholders through safe, sound and ethical practices. In the short term, we really have 2 strategies, and we're laser focused on it. One is to be sure we do everything we can for our teammates, our clients and our communities in terms of surviving through this COVID experience. None of us have ever been through anything like this. Hopefully, prayerfully, we will never go through it again. But we understand that's job number one. We start every day. Our executive leadership team meets every morning at 9:00 for whatever time it takes to make sure we're doing all the things that are required to take care of our teammates, support our clients and our communities. The second thing that we are laser focused on is our integration and conversion of these 2 companies. Obviously, everyone knows that's the big, big challenge in terms of putting 2 really large companies together. But I would tell you that it is going very, very well. We have the best in the industry in terms of leading and guiding this. We're using really super talented outside consulting firms with regard to conversion. And I would say today, it is going extremely well. The longer-term strategy that we have is kind of an overarching philosophical strategy that we call T3, where T stands for technology, touch, which yields trust. This is actually a shift that began about 10 years in our industry with the previous paradigm, the previous crisis when the world figured out that digital and virtual types of interactions were going to be the way we're going to live together in the future. This is not a new idea. We started working on these years ago, and we now have embedded in our culture this concept that there has to be a seamless integration between technology and touch to be able to deliver the level of trust clients simply demand today. So we're making really great strides on that, feel great about it. On the next slide, I just -- you can read through it, but I'll give you one example of how we view T3 in dealing with COVID. So we were able to very, very quickly ramp up our ability to deal with some of the COVID requirements. So for example, the PPP process, the Payroll Protection Program here in the United States, it's a big, big, big deal. But we developed in like 3 days a digital portal for our clients to be able to interact with us and make their applications for their forgiveness loan. We launched a mortgage chat box. So our mortgage just interact with us digitally in terms of requests for deferrals. We have a long mortgage forbearance program. We expanded our e-signature program. We increased our mobile deposit capabilities. So even in the midst of the crisis because of the T3 concept that we have in place, we've been able to do a lot to help our clients interface with us much more efficiently than they were able to do before. And then we care a lot about our communities. We created something called Truist Cares. This is where we focus on our clients, our teammates and our communities. So we were one of the first to step up and take care of our teammates. And so we provided $1,200 bonuses for about 78% of all of our teammates that were operating at the lower income levels in our company. We provided $13 million in on-site special pay for those that had to still stay in the branches and the call centers and work. We provided $6 million extra stipend for our teammates to help them deal with childcare, even allow them to pay their own family members to provide that kind of childcare. We've provided 10 days of paid off time to help them because schools closed early. So we're doing everything we possibly can to help our teammates adjust to this new world. We're doing the same thing for our clients. In the PPP world, which is the best thing we can do right now to help so many businesses meet their cash flow requirements in this difficult period of time, we are closing in on $13 billion of loans that we've provided for those small and medium-sized businesses, and that's been a real savior for them in terms of protecting their businesses. We did early on so many things like we give a 5% cashback on their card purchases for essential purchases for groceries and pharmaceutical items. We waived ATM surcharges for our clients so that they would not have to have any inconvenience at all in terms of traveling around. We've been working hard in our communities, in our Truist Cares program, which is an outreach philanthropic program that has now already done 253 grants, totaling about $25 million, and we're in the active stage now looking at other ways that we can help extend ourselves and help those in need. We feel very strong about our communities, the communities that supported us for 275 years. This is the time for us to support them. And so we're working really, really hard to do that. Just to give you a really quick snapshot of our earnings because I know most of you know that very well for the first quarter. We did have $5.6 billion in tax-equivalent revenue. We had adjusted earnings of about $1.2 billion. We had a very strong adjusted EPS of $0.87 a share, a really, really strong 15.5% return on tangible common equity and a very strong adjusted efficiency ratio of 53%. If you look at our credit metrics through the first quarter, I have to tell you, they were fantastic. Now we recognize the storm is just brewing at that time, and it's here now. We fully expect the credit metrics to deteriorate. We think they will deteriorate less than others because we're a relatively conservative lender. But we do expect deterioration there, and we're preparing for that in terms of dealing with that. We're working hard with our clients in terms of doing deferrals and modifications and forbearances. But at the end of the day, we have to be prepared to deal with assets that are not collectible. We have very strong capital with a common equity Tier 1 ratio of 9.3%. We remain diligent about having very strong capital, very strong liquidity. And we are executing on that, I think, very, very well. In terms of our exposures, everybody is concerned appropriately about which credits are really exposed in terms of the COVID crisis. You have a list on that slide that you can see. But the impressive thing is out of our over $300 billion portfolio, we only have about $28 billion that are in this aggregate group of exposed areas like hotel, oil and gas and senior care and so forth. And it's less than 9% of our total portfolio. So while it's significant, don't get me wrong, and we're working on it, we're concerned about it, we're working with those clients to help them weather through the storm, it is not a dramatic portion of the total asset portfolio of Truist. So we feel good about that. If you look at the next slide in terms of our merger update, medium-term targets. I'll tell you that we're on track. The first thing we did coming out of the December. Remember, we've only been merged since December. It seems like a few years, but it's only been since December. And we've already been working hard on embedding our culture. We did 32 town halls of about 500 teammates in it in a relatively short period of time as a way of getting the culture out. So everybody understood what the Truist culture is. We were able to introduce the Truist visual identity and logo. We've been able to go ahead and move and introduce some topic areas like the Truist Foundation. And we're already working in Daryl's area in terms of doing an awful lot of consolidations, we're not closing branches yet in any large degree. But there are a whole lot of backroom offices that we're able to close, and we're working on that very aggressively. In terms of our medium-term targets, we remain committed to attaining a return on tangible common equity in the low 20s, which we believe will be industry-leading, a low 50s adjusted efficiency ratio. We remain very adamant that we will achieve the net $1.6 billion in our cost saves, and that includes, by the way, about $400 million of investments, reinvestments in the technology area and other areas of the business. If you look just for some peer comparisons on the next slide, you'll see that on all of the categories, we have -- are substantially performing even before we get all of the cost saves and synergies from revenue that are coming in this merger. We're already performing as one of the very best in the industry in terms of adjusted return on assets, return on tangible common equity, efficiency ratio, net interest margin, NPAs. Truist is already a very high-performing company, and we are really just getting started. The market understands that. And so if you look at the price to tangible book value, which, in my view, is the best way to look at value in bank stocks in this kind of cycle, we have the third best price of tangible book value. And we feel very, very good about that, and we think we have even more opportunity into the future. So if you look at the value proposition that we offer to you as shareholders and to all of the markets that we serve, I would just say to you that we are a purpose-driven organization. We think that is the most important determinant in the long-term success that will be proven to be true for Truist. We have an exceptional franchise. There's not a better franchise in the world than Truist has. That was one of the drivers in putting these 2 companies together because you can do well if you work really hard in tough franchises. But when you have a fantastic franchise and 2 fantastic companies, an outstanding leadership team, you can do some really good stuff for all of your constituencies. We have excellent returns, less volatility. We have very, very strong accretable yield coming in because of the marks that came in as part of this merger. We think that's a special feature of Truist as we go through this experience. And again, we feel very confident in terms of any downside reaction in terms of the market because we have very strong capital, very strong liquidity and very strong diversification. So in sum, Jason, I would say to you, we feel very strongly that our best days are ahead. Thanks for letting us speak with you.

Thank you, Kelly. Appreciate that. For those on the lines, if you want, you could click on the left-hand corner of your screen, kind of the text messaging box and text in questions. Alternatively, if you can't figure that out, you could email me at [email protected]. I know you have questions for Kelly or Daryl. While we await for that, why don't I kick it off. Maybe, Kelly, maybe just talk a bit -- it's been about a month since your earnings call, a lot transpired both, I guess, within the economy, whether it's the jump in unemployment or the IRS checks coming in or the PPP program taking hold. So some puts and takes. Additionally, some of your markets are kind of going through that reopening or back-to-work type of phase. I guess kind of what are you hearing and seeing, I guess, more importantly, from your customer base, both consumer and commercial at the moment?

So Jason, I'd say on the commercial, I divide it into 2 groups, the very smallest retail operators to be honest, they're very scared. They're, of course, like we all are concerned about the medical impact to our families and all of our loved ones. So there's that natural emotional feeling that is prevalent. They're very concerned about their businesses. Will they be able to reopen? Will they be able to survive in the post-COVID new world, with social distancing? I mean will they have enough volume to be able to make it? Even though they're open, the requirements may be so restrictive that they may not simply have enough volume to be able to operate. The medium companies are concerned, of course, but they're faring better. They have capital, they have liquidity, and they aren't as concerned about being able to make the adjustments. The very largest companies, I think, are doing relatively well, unless the very isolated ones like the major hospitalities and the airlines, of course, they are struggling. We don't do a huge amount of business with those. So it's not a big impact on our income statement, but there are certainly -- certain ones that are certainly struggling. The consumer hasn't quite yet felt it yet because they got the $1,200 checks. They got -- if they were unemployed, their unemployment was substantially expanded. In many cases, their income is greater than it was when they were working. They have companies like ours that are giving them advantages in terms of what their cost to use ATMs are, waiving intercept charges, et cetera. So they're getting a lot of help right now. So I don't think they're quite experiencing what they may, if this is protracted. So the worst-case is, if it's protracted and all the stimulus expires, then we'll find out how bad it will be for the consumer. But consumer is doing pretty well today. We looked just yesterday at our debit card activity and this increased substantially just in the last few weeks. And so I'd say today, they're worried medically but economically, they're doing okay.

Interesting. I guess, against that backdrop, you put up, as did others, a sizable build to your allowance for credit losses in the first quarter on top of the fair value mark you have from the SunTrust deal. As you kind of think about -- you're beginning to think about sizing where that allowance needs to be at the end of the second quarter, kind of how you're approaching that? How do you kind of think about things maybe differently in terms of how they transpired quarter-to-date than maybe you would have thought 4 or 6 weeks ago?

So it really depends on the scenario, Jason. I mean we develop multiple scenarios to decide on the first quarter provision using CECL. As you know, we had to project throughout the life of the portfolio, and we did that through multiple models. Daryl can give you a lot of detail on that, if you're interested. So as I see it, the second quarter depends largely on the scenario. If the scenario hasn't changed a lot, you wouldn't expect actually to have a huge amount of provision change because you're not -- by then, you're going to be seeing a whole lot of charge-offs. As you head into the third quarter and fourth quarter, you're probably going to see higher charge-offs and then if the scenario doesn't change, you'll see some provisioning effect with regard to that, certainly having to cover charge-offs. And so right now, if the scenario stays the same, it's not going be a draconian type of effect. If the scenario continues to get worse and people are forecasting a near depression, you can expect that will flow through the models, and you can expect much higher provision. Daryl, any addition to that?

Yes. When we say how it plays out, it's really how the government response impacts the magnitude of what we're seeing from an economic perspective. All the models are trained on macroeconomic scenarios. They aren't really trained on the government response. So we will have to make qualitative adjustments as we approach the end of the quarter, trying to forecast out what that moderation impact is from a government response perspective. So it could go either way. I think Kelly is spot on.

Got you. And then I guess there seems to be some confusion in the marketplace. So maybe you can kind of help ferret that out. But you talked about 9.3%, CET1, I think, a good number, but maybe below the 10% number you guys talked about previously. You guys also have a good dividend level. There's some comments out of the Fed this week about it maybe potentially a new stress test. I know you guys in the past have talked about. You guys have submitted another kind of CCAR response with COVID built-in. Could you maybe kind of talk to how maybe the process around CCAR and stress testing is different this year and maybe has changed in the last few weeks versus prior years? And then just how confident are you in kind of the ability or wherewithal to continue to repay that dividend?

Yes. So I'll start. Kelly will add on to your last part of that question. So what I would tell you what we're seeing so far on CCAR is what we submitted off the base scenarios, the Fed really isn't reviewing any of that information on work. They basically are much more focused on how we are responding to the crisis, real time, how we're managing our capital and liquidity on a daily basis. They'll look at the governance processes, the number of forecasts that we're doing and really how we're just basically meeting the needs of the company at the time that we have. We are privy or I'm not aware of what actually scenario the Fed is running for their CCAR scenario. We do believe, though, that from a stress test perspective, our 2 companies on a combined basis will stress test very well, both from a loss perspective as well as from a PPNR perspective. I think we'll be one of the best out of the banks out there when the results come out later this quarter. But I'm not really aware of actually the scenario that they're forecasting.

So in terms of the rhetoric out there, Jason, with regard to dividends, I think it's -- it may be because of a lack of information because the notion seems to be that the banks might either considering cutting their dividend, so they can make more loans. That's just really not true. During the first several weeks of the COVID crisis, the major banks in this country did over $400 billion worth of loans to help companies of all sizes. In terms of the PPP program, the major banks have been a big part, and all the banks have done a whole lot. We've already done like approaching $600 billion worth of loans. There's no bank out there that's not making loans that are requested in that or even reasonably qualified to date. The banks have about twice as much capital and liquidity as it had back in the last crisis. There is no justification in my humble opinion to even have the discussion about forcing banks to reduce our dividend. Anything bank that is a good bank that -- if -- were to have financial challenges would be the first to say they had to reduce their dividend. But if you look at Truist, and if you look at all the other banks primarily in this country today, they're well capitalized. They have strong liquidity. They still have strong earnings and therefore, maintaining the dividend. Remember also that the dividend serve a very important economic purpose. The dividends that we pay to our shareholders in most cases are dividends that they used to live on. So when we pay them their dividends, first of all, it's morally right in my humble opinion to pay them because we have some sense of justification in expecting that, and they're living on it. So we're hurting somebody when we just cut the dividend. It's not as simple as just say, hurt the banks, you're hurting hundreds of thousands of shareholders who depend on that income. And so we would hope there wouldn't be any type of mandate. We don't think there will be any type of mandate. We're not hearing any conversation about any type of mandate. And at Truist, we feel adamantly that we will be able to continue our dividend unless someone makes us do something different.

My screen just flipped from red to green, at least for the moment. So what that's worth. Maybe shifting gears, I know it's always hard to put 2 big banks together, and I suspect it's even harder during a pandemic. But Kelly, you sounded certainly confident in mentioning the cultures, you kind of reiterated the $1.6 billion in cost saves. Can you talk to how you can kind of -- does kind of recent events kind of change the potential synergies? Is the cost save number still doable? Or is it some upside or downside to that? Does the time line potentially get pushed out just given the willingness or the need to kind of focus more on the customers at the moment?

Yes. There's some puts and takes in that, Jason, if you think about it. In terms of the integration itself, right now, we are still on track for what we've said in terms of our conversion. We have had some minor setbacks in terms of progressing. Imagine when we've got 40,000 people working on the day, so it took us little bit of time to get the equipment out there so that they could actually do their work. But that's all been done. We have a little bit of interruption in some offshore capacity that we had. That's back online. So it's operating really, really well. To be honest, our people right now are just fine-tuning their integration plans. And so any change, if we were to have any, it would be in a relatively minor category. There's no discussion in terms of any major setbacks. And to be honest, I think we have a decent chance that's kind of staying on track. So while not guaranteed, we have a really, really A-team working on this. And if you think about it, just the nature of COVID in and of itself, doesn't hamper programming and product mapping and the kinds of things that go into conversions. So we shouldn't have any major issues with regard to that. On the other side, on the positive side, the COVID crisis is probably accelerating our ability to capture revenue synergies for several reasons. One, our people have had a super-fast course on how to come together. It's one thing about a crisis, you learn how to work together really fast. And so it's been incredibly positive. We've seen our people do some miraculous type of things in terms of getting things done, working with the branches, working with clients, working with the communities, working with programming. It's just been absolutely amazing. And so we have an inspired group of people who are excited about the merger anyway. They really inspired now to try to work through this and do all we can to help the communities and clients and so forth. And that flows right over into synergies with regard to revenues. I mean every day, I get really good feedback from our revenue, people talking about how our company is already coming together to help bring the benefits of these broad array of products and services we have now. SunTrust products going over to BB&T, BB&T going over to SunTrust. So it's all actually working pretty good, to be honest.

Helpful. All right. I have a question from e-mail that I will ask. But -- I'll read it out. How do you see the NIM evolving if rates stay low where they are today? And how does this compare 2015 levels when the Fed funds were last at 0? And then a related question, do you think spreads widen to support NIM?

Yes. So I would tell you that we are instituting 4 strategies like we did in the Great Recession. So as commercial credits roll over, we are implementing floors of the loans that actually were restructured or were produced in the month of April, we had about 40%, and we put floors in -- the average floor rate was a 75 basis point LIBOR. Right now, 1-month LIBOR is at 18 basis points. So it is protecting margins. I think we expect that to grow over the next several quarters and months as we continue to implement that. We are aggressively repricing our deposits down maybe a little bit faster than what we originally thought. We're hopeful that by the end of this quarter, we'll have our interest-bearing deposit costs down to -- in the 20s. We won't see that on an average basis for the second quarter, but you should see a really low number for the third quarter from that perspective. That said, we aren't immune to the lower rates and the impact on margin. That margin is coming down on a core basis. That's a reality. But I think those measures, they also have a lot of consumer assets that we can grow from a mix change that could also help offset some of that pressure that you're seeing on margins. So we have some tools in the tool chest to offset some of that margin pressure, but margins are definitely coming down.

Yes. I think we have time for 1 more question. Maybe touch on maybe what you're seeing on the fee income side. Clearly, mortgage is having a strong quarter. I suspect the other share area is maybe a bit more challenged. Maybe just kind of flesh out some of the bigger categories and what kind of what you're expecting in the near and intermediate term?

Yes. So I would say, we started the second quarter we had really good growth in our insurance business. They had a strong April retail businesses on the insurance side really picked up steam. Our AmRisc business was pretty strong in April. Residential mortgage was awesome had huge fee revenues, really driven them by both volume and high spreads. Spreads were near record levels from that perspective. So that was good. Investment banking was kind of the sleeper that did really well. We weren't expecting much out of it. They had a strong April. Pipeline seems to be filling up to some extent. So I think our fee businesses overall are doing relatively well from that perspective. So I think we'll have a good performance this quarter and hopefully, we'll continue to build momentum as the year plays out.

Helpful. I'd thank -- Kelly, Daryl, thank you so much for taking time out and meeting with us today, and we really hope to do this again next year, although in London.

You bet. Thanks a lot. And same with me.

Be safe.

Thank you. You too.