Truist Financial Corporation (TFC) Earnings Call Transcript & Summary

Thank you again to everybody for joining us this year for the 40th Annual BancAnalysts Association of Boston Conference. We have another full morning here through lunch. We hope everybody can stick around ground for the buffet lunch. As you recall from years past, there will be lobster rolls, so please enjoy yourself. But with that, I'll turn it over to my fellow Board member, [ Dick Manuel ], who will introduce the management of Truist. [ Dick ]?

Okay. Great. About 2 years ago, SunTrust and BB&T got Fed approval to merge and form the seventh largest bank in the U.S. with about $286 billion of loans and $400 billion of deposits and an $85 billion market cap. Truist is truly a super regional. Here today to share an update on the bank and the integration is Ankur on my right and who's in charge of Investor Relations; and of course, Daryl Bible. Daryl has had a long career in banking, having grown up on the BB&T side of the marriage and culminating in his role as the CFO of the combined company. As an aside, if you don't already, you should follow Daryl on LinkedIn, where he often points out some very real and positive impacts that the bank and the banking sector in general has on the community, the Truist community, about the people that work there and the people that the bank serves. I too often look at the numbers, and that brings the focus back to what makes those numbers important, in my opinion. So with that, I'll hand it over to you, Daryl.

Thank you, [ Dick ]. Thank you, everybody, for coming here today. We are excited to be here in Boston in person. I think it was 2 years ago was the last conference I did live, and it was in this conference. So I'm glad to be back here talking to you in person and just excited to talk about what we can do at Truist. Before we get started, I just want to note that our forward-looking statements and non-GAAP information are on Pages 2 and 3. We always start off with our Purpose, Mission and Values page. At Truist, our purpose is to inspire and build better lives and communities. We really believe that. We want to live by this purpose statement. We ask all of our teammates at Truist to actually come up with their own personal purpose statement. So I came up with a personal purpose statement. Ankur's got one. All of our teammates have that. What we really try to do by connecting our personal purpose statements is to connect with the corporate purpose and so that we can live out each day as we serve clients, service the community and all that. And it activates and [ access ] makes it real and live to all of us. We think it's really important that our purpose really guides us how we do business each and every day, and that's really how we want to operate the company long term. What we find is that with a purpose-driven culture and company, we're able to attract really strong talent to the company that aligns with others people's purpose as we move forward. So as [ Dick ] talked about in the presentation, Truist is a 2-year-old company. For a 2-year-old company, if you look here, you can see our reputation in a 2-year-old company is really pretty strong. And we're really happy to see our reputation continue to build and get better. We had the second largest move in reputation this past year, and we hope that, that will continue. I would say we were lucky rather than smart in a lot of ways. When the pandemic hit in March of 2022 -- or 2020, we basically redirected some dollars that we had spent for branding for the company and really doubled down on what was the right thing to do for both our teammates, our clients and our communities. First and foremost, when the pandemic hit, we wanted to make sure our most valuable assets are our teammates. We wanted to make sure that they could work in a safe and secure environment, where we were able to do work and get the work done and serve our clients from a virtual perspective. There are a lot of challenges, as all of you know, working from home, if you have children or other needs that you have to do. We were very flexible with our teammates. Sometimes we gave them special ways to actually have child-caring or tuition assistance to help. So we tried to really take care of our teammates so that they could take care of our clients at that time. From a client perspective, probably the best thing to promote that we had early on in the pandemic is we were very, very aggressive at promoting PPP lending to all of our commercial clients. We were one of the largest providers of the round 1 PPP loans. But we really wanted to make sure that if somebody needed forbearance and needed some time to make payments, we were very aggressive. And then from a community perspective, we came out of our shoes to support our communities. A lot of people out of work, a lot of people in need, we were really focused on affordable housing, social and equity, improving the literacy of children through schools. All that put together really created, I think, just a great brand that we did from a grassroots basis. And that's really what you have today. If you look now, we're spending a lot of money on advertising and branding, but the core of what we have when Truist came together really was the result of taking care of our teammates, clients and communities. What gets me excited is our value proposition. Our value proposition starts with an exceptional company. We think we have strong market share, diverse business mix. And when we put the company together, we chose the best of both between people, processes and systems. We also believe that we have strong unique opportunities for cost saves and investments and technology and businesses, and you've seen that for the first 2 years. This will enable strong growth and industry-leading profitability. Finally, we have strong capital and conservative risk profile. But at the end of the day, when you put this all together, it is really important that we can come up with a company that can produce and generate earnings growth with less volatility in the long term, so we can have a higher multiple as it all comes together. So first, let me talk about our exceptional company. I'd start here first with how we operate. We operate in some of the fastest-growing markets compared to our peers. It doesn't guarantee success or outperformance, but the deck is set that we will outperform long term because if you look at our markets, we have hundreds of households coming to Charlotte, to Atlanta, Orlando each and every day, hundreds of households coming every day. So we have tons of growth opportunities to serve as people come into our footprint. Second, if you look at our amiable market share, our market share is strong. And if you look at it, it's in retail, commercial and wealth areas. We -- as an example of what we could do in the marketplace, we were 3, 4 months in when the pandemic hit. We were 2 heritage companies that came together, and the Fed just lowered rates 150 basis points. We, as a leadership team, said we will have to react to it, and we've started pushing our deposit rates down. We were the most aggressive banks in our markets pushing deposit rates down. We had everybody follow us down because we control the markets that we operate in. And that was just the start of the pricing power that we have here. If you look at our diversity business mix, our MOE provided significant diversification benefits and now creates capacity that we can grow in a lot of other businesses that were kind of tapped out when we had our heritage companies. So we're investing more in investment banking. And [ Beau's ] team is doing a tremendous job of attracting good talent, great talent to the company to serve our clients better. Insurance brokerage, we're adding more producers. We're doing it organically. We're also doing it through strategically. People want to be part of our company and the success of Truist. And you saw consumer finance over our investment with Service Finance. That's another good positive growth area. If you look at it, we have a solid mix of end footprint as well as national businesses. So end footprint would be your retail, commercial businesses. National would be insurance, investment banking. We have a lot of other national businesses. So we have a great mix there. If you actually look at the revenue side of it, we aren't 50-50 in fees versus net interest income, but we are moving more towards that 50-50 mix. So we're low 40s and high 50s from that perspective. If you look at how we're positioned for banking post-pandemic, what we're really focused on is trying to move where our clients are moving to. So the sports analogy that we would use is hockey. If you're playing hockey, we're up in Boston, I'm sure there's some former hockey players out in the field or maybe current hockey players. I know one of my peers who plays hockey and all that. You want to play to where the puck is going, not where it is. So we are really trying to position our company to move and invest in products and services that really will serve the needs of our clients in the future. And you can see that in a lot of different areas. From a digital perspective, we need to be differentiated. We also want to invest in convenient commerce, and that would be -- we call that point of sale and aka Service Finance. And we also are investing heavily in investment banking, insurance, industrial specialties and wealth. But what puts it all together is what we call our integrated relationship management, our ability to deepen relationships with our clients. We'll talk a little bit more about that in a little bit. We also want to focus on our digital and technology strategy. We want to make sure that we have distinctive, secure and successful client experience. The best of both was just the first step that provides the foundation for our strategy. We are now in the midst of modernizing since we're almost through the integrations with our digital and technology, adding more APIs, open banking and more flexible architecture. Our clients are #1. So as we stand up these journey rooms, I encourage you guys when you guys want to come to Charlotte for a road trip or whatever, our innovation center is about to open in the next month. We have people live working in the journey rooms there, really client focused. We have partnerships now with strategic partners in the industry. It's helping drive and serve our clients. We are really focused on leveraging the data that we have. We have a lot of great internal data that we analyze, and we take outside data from other sources and marry that information together to really work on personalizing that client experience. We also want to be very proactive. We want to move fast. We're agile as well as we will fail, but we fail fast, learn and get back at it and work again. We have an entity called Truist Ventures. Truist Ventures invests in fintechs and insurtech entities. We do this, one, to learn from them. So we invest in them, we deal with them, we work with them, and we're learning each and every day. But we also commercialize with them. So there's partners that we have, whether it's Zest helping us with some of our automated underwriting or Enigma helping us with AML/BSA. They actually commercialize, and we use their services in our company each and every day. That is a key strategy as we move forward and partner. We will build, we will partner, and we will buy as we move forward at Truist. If you look at merger, it creates better teammate and client experiences. Here, we have 3 examples here of what we've done over the last 2 years. We are really focused as we've improved client and teammate experiences across our businesses. If you look at digital, in the midst of our core conversions, we're rolling out a brand-new digital platform. We now have over 7 million clients on our new digital platform. And our digital platform is different for both retail, wealth and commercial businesses. If you're a client and you personally bank at Truist and you have a commercial relationship, you can toggle back and forth in the same mobile app going back and forth there. When we launched this new mobile app, it was in the early summertime. And just like anything, a change in the marketplace created change out there. We were able to basically respond to the clients' needs, give them more experiences, better training how to work with it. You've now seen our app ratings go from a 2 stars, we're at 4.2, and we're getting better each and every week. As we see issues with our new foundation, we were able to respond a weekly, biweekly basis to the needs that we're seeing in the marketplace because we have a new foundation from which to do that. If you look at our mortgage online system, it's end-to-end digital experience now for all of our mortgage clients. We think that's very competitive in the industry today. And then if you look at the integration between nCino and AFS Vision, that basically creates a brand-new ecosystem that no other institution has ever done before, connects our sales pipelines with underwriting and closing, a foundation of more front end and digital innovation for the future. Here, we highlight 3 businesses. I love these 3 businesses. You have LightStream, Sheffield and Service Finance. What we call this is convenient commerce. We are enabling clients to achieve goals with less friction. I mean at the end of the day, people don't really focus on a loan. They want to focus at either getting what they're buying. Whether it's a power sports equipment, whether it's a loan for home improvement, that's really what they want. The financing, it facilitates them getting that, so we want to be there at that time when they're making that decision to be able to offer that financing. That's when I talk about moving where the puck is going. We want to make sure that we're there to finance when the decision is actually being made. We believe that the best results happen when we own the full enterprise end to end. We control the client experience, and we get all the economics of the business. Service Finance is expected to close this quarter, and it will continue to expand the scale and capabilities of point of sale and really focus on home improvement. Next, I want to just talk about how we leverage advice across our franchise. When I look at this, this really starts with our commercial community clients. We have over 200,000 clients within Truist that have local reps that handle these relationships. We are now able to take in our Truist Securities expertise and our wealth expertise to serve our commercial -- our community commercial clients much better and much more extensively. We are definitely deepening the relationships here. If you look at the capital markets income that we get from IRM,and you look at all the non-Truist clients, we are up 35% year-over-year or about $260 million now from these commercial community clients. So -- and we're just scratching the surface, and we're continuing to gain more and more momentum here. This is a huge, huge benefit for the merger of our 2 companies. Next, I'd like to talk about our Truist Insurance business. We believe this is another key differentiator. When you look at this, this revenue provides both diversity and growth. This insurance brokerage business is not correlated to credit cycles and interest rate cycles. It stress tests very well such that we have much better, more stable PPNR when we go through and run those stress tests for our company. If you look at this business, over the last 10 years, it's grown 10%. We were able to do that both with organic growth as well as strategic growth. It's an advice-driven business, which is really important in a very complex and risky world. These clients of all types and sizes, whether it's retail, wealth clients, small, medium and large corporate clients, we can serve all clients within our insurance brokerage business. There are 13 verticals in this business that are closely aligned with the verticals that we have in our commercial banking businesses as well. Next, I'd like to just talk about how we're delivering results. First, we've made significant progress in our cost saves. I am so proud of our teammates at Truist and the progress that we've made and the costs that we've been able to pull out of the company. Third quarter annualized core expenses were down $700 million versus 2019 baseline. These core expenses assume a company is static. Cost savings that we have are net of investments that we've made, and the investments we've made are both in digital and technology as well in the lines of businesses that I've talked about plus inflation. Driven by strong branch shrinkage, you can see our branches are down 15% versus peers down 5%. And FTE reductions were down 11% versus peers down 1%. Plus we've had success in corporate real estate shrinkage, sourcing and other cost-saving initiatives. We are making great strides in taking costs out of our new company. However, Truist is dynamic. It's not a static company that we had in '19. We are a living, breathing, changing, growing company as we speak. So when you look at our business, you have to factor in what's changed in the business. So what we try to do is pull out some of the more material changes to try to foot back to where we were in '19. At the end of the day for all of you analysts, what is the run rate of Truist once we get through our integrations in '22? It's going to be our adjusted noninterest expense. That is the run rate of the company. And all of our MOE and incremental MOE expenses will be out of run rate as we start 2023. If you look at this, our overall corporate performance has been $2 billion higher than 2019, which drives incentives. We've done acquisitions with revenue that drives incentives. And we've invested in investment banking, insurance and other areas that all drive incentives. All that is good. You want us to invest in businesses that are successful, that drive more revenue and more PPNR. But when you tie back to expenses, you just want to call those out and get credit for it. If you look at our numbers, our medium [ peers ] are up 8%, while our expenses are up only 2% on an adjusted noninterest expense basis. So we're doing a really good job taking our expenses out. Finally, third, I feel really good about the trajectory of where I look at in fourth quarter '22 and 2023 and beyond. First and foremost, we're very confident that we will get our targets for fourth quarter '21. We talked about that on the earnings call. As we get into 2022, we feel that we have 400 branch closures that are going to happen in the first quarter after we get through our integrations. Every branch has an average cost of approximately $470,000. We have half of our voluntary separation and retirement plan to finish off in 2022. That's 1,000 FTEs teammates. We have reductions in non-branch facilities, maybe another 1 million or 2 million square feet. One of the big savings is in technology. Once we get through the integrations, we will close about 40% of our application systems as well as move our data centers from 6 down to 3 by the end of 2022. And we also have teammate-led synergies that will kick in over the next few years. At the end of 2022, all MERC and MOE-related expenses will be gone, and we'll have a much normal and much cleaner run rate. The goal is to achieve top-quartile profitability. When you look at our loan book, we have an improving loan trajectory here. I'm encouraged by the recent trends. If you look at our C&I growth, in the third quarter, we were up from a flattish second quarter. If you look at our regions, we have 21 regions that we operate in. The majority of those now grew in the third quarter, though utilization is still bouncing along the bottom. Mortgage, we made a decision to balance sheet some of our correspondent conforming mortgages. Spreads in that space are low single digit such that the revenue pickup is better to put on balance sheet. That's helping grow balances. And we're also benefiting from higher rates and slower prepayments. Our consumer book is also starting to respond. We can see that we've actually grown after having 2 quarters of declines. If you look at the areas growing is auto, Sheffield, LightStream. We got Service Finance closing this quarter. That will obviously contribute very positively as we get into the first quarter. There are headwinds though. Specifically, PPP is finite. We know that will be pretty much gone in the next couple of quarters. Dealer floor planning, we believe, has bottomed out. Utilization is low. We think over maybe 6 to 12 months, maybe that will start to rebound and start to come back up over time. We're still cautious in a few areas in CRE. I think that portfolio has kind of just tread water for a while until we get more comfortable in hospitality; in some markets, in retail and office. If you look at interest rates, we believe we're positioned for rates to increase. We benefit for rates going up 100 basis points on a gradual basis, which is 25 basis points per quarter over 4 quarters. Our NII will be up 4.1%. If you look at a shock, up 100 basis points immediately as NII positive at 8.4%. 2/3 of our sensitivity is related to the short end, which is really driven by the deposit beta. When you look at our models that we show you today, we're assuming about a 50% deposit beta. If you look historically at the Great Recession, the first couple of moves were probably about 20% betas, and it moved up maybe to 30%, 40%. So 50% is a really conservative number. For every 10% decline of our 50% beta, we pick up about 1% more in NII from a gradual basis and about 200 basis points on a shock basis. We also benefit from a steepening curve. It kind of layers in over time. But a 25 basis point steepening would give us about $100 million more annual NII. So we will benefit as rates rise. Next, I'd like to talk about our strong capital position and conservative risk profile. What we like here from our conservative risk culture is we like to make sure that we have prudent client selection, diversification, appropriate risk compensation or risk-adjusted yield and early and effective problem asset resolution. It's actually important to remain disciplined in the current environment. Tempting to chase growth with attempted demand and good credit metrics, but we'll have to stay within our risk appetite, and we are very disciplined. I believe we have the best risk leader in the industry, in Clarke Starnes. If you look at our risk-adjusted capital position, we are particularly excited of what we see here. If you look at our performance on CCAR, where we look at the difference between the buffer or cushion that we operate in versus the capital erosion, we're at 2.2x, which is almost double the median of our peers. The goal here is not to be at the top of the stack. The goal here is to make sure that we have enough coverage to operate the business but also take advantage and give rewards back to our shareholders. We believe that we are positioned to improve on the chart on the right. We're in the left quadrant. That's the quadrant you want to be in. We want to be in the quadrant that has the highest PPNR in distress with the lowest severity on losses. If you just look at our PPNR today and what it's going to be in the future, you know that the merger costs are going to fall off. You know that the cost saves are going to continue to add to PPNR and slightly offset [ but ] you had some runoff in purchase accounting. But we firmly believe that we will shift higher in this left quadrant. When you look at our capital allocation philosophy, the priorities we have first is to make sure we can serve our clients and serve it organically. Second, we want to make sure we can pay a strong and repeatable dividend to our shareholders tied to the earnings growth of the company. Next, we really focus on acquisitions more so now on a more bolt-on basis, but we really look to make sure that it can meet its final targets, make sure it's a strategic fit and a good cultural fit. And finally, we'll use share repurchases to make sure we get to our capital targets. And then finally, what gets me really excited here, in conclusion, is that we are very excited about the opportunities ahead for Truist, our markets, our businesses, our teammates and financial profile. Integration has appropriately been the top priority since the MOE approval. Half of the core bank now is behind us. A final part will be completed in the first quarter of '22. Now our focus is to pivot to performance and realizing and maximizing our opportunities from a merger underpinned by strong and purpose-driven culture, strong capital and risk formation. With that, I'll end and move on to Q&A.

Great. Let's move over to our fire. Daryl, do you want your water?

[indiscernible]

Well, great. Before Mike asks his question about your transition to the cloud, I'm going to take the privilege of asking the first question. What a great -- you really captured a lot of what's going on with the company, and that was super. So in the third quarter, Bill talked with confidence about producing operating leverage as we go into 2022. And you talked about a lot of the effort that you're doing in getting -- delivering on the expense side. Could you maybe just give us a little bit -- could you give us a little bit of sense of where that confidence is coming from? I mean obviously, there's a revenue component to it as well. And just articulate why you have that confidence.

Yes. No, I appreciate the question. Just following up from Bill said on our earnings call, we're still putting our plan together for 2022, but it's come together pretty well. We had a great meeting on Monday, going through it with the team, and everybody bought into it. When you look at the pieces of it, if you look at net interest income -- start with net interest income, we have headwinds obviously with PPP runoff and purchase accounting runoff. We do have loan growth obviously picking up in 2022. Potentially, we believe the curve will probably steepen a little bit. Right now, the forward curve has 2 moves in there. I'm not sure there are going to be 2 moves,, but maybe you get 1 move in there. So I think we have a chance. It's not guaranteed, but I think we have a decent shot of potentially having flat NII if you look at it on a year-over-year basis. We have tremendous momentum on the fee side. If you look at our fee businesses, our investment banking and brokerage business has just moved to a new plateau. With the investments that we have made under Bill's direction, we're just being able to produce more talent or more clients and really produce much better, stronger results. Our wealth teams are benefiting obviously with higher market valuations, but we're also getting net organic growth in the wealth areas. In our mortgage business,obviously is -- might be down year-over-year as rates go up. But as we move to a purchase market, that kind of plays into our hands. The integrations are behind us, so we can really focus on running that business. So I think we'll do really well in that business. And you look at our other businesses there and fees that we have, purchase payments, I think, will come back strong. So I think we have really good fee momentum there with insurance kind of being the most obvious one, having good growth organically. You have positive pressure on pricing still. You have really good retention of clients. And then the big thing is we have strong organic growth. I'm not sure we can stay with double-digit organic growth in that business. But even high single-digit organic growth would be really positive in that space. So you put all those together, I think our fee income will win the day, and we'll have positive revenue growth. On the expense side, I talked about it on the presentation, but we have amples of amples of expense savings that are going to come in. Obviously, we're going to continue to make investments in technology in our businesses. And we are going to have to factor in inflation. We took 2 years of not taking in inflation and kind of keeping our expenses in and just eating that. This year, the costs are real in the personnel side and personnel costs. Whether it's your lower-level teammate, your moderate level or your higher-level teammate, the cost for talent is higher. So I'd probably have an inflation target, if I had to choose today, probably around 3% that I factored in. But when you put that all together, I feel very confident we will have positive operating leverage on a GAAP basis. I think we'll have positive operating leverage as well on an operating basis, on adjusted basis. So I think we feel good about that.

Great. Great. That's very clear. Are you ready for Mike's cloud question?

Go for it?

I don't know, maybe he's going to surprise me. Go ahead, Mike.

[indiscernible].

Mike Mayo, Wells Fargo Securities. So I don't love the one figure you gave. Branches are down 15% versus peer down 5%. They are not going through mergers. So really, my question is why aren't you closing more branches? I mean even after your branch closures, 2,100 branches. You talk about the density of the footprint, which is true. You talk about the digital taking off, 7 million customers on the new platform. You talk about the data. You're using internal and external data. And quote from your slide, physical location is less important. So 2,100 branches, more than post offices, more than all sorts of things. I mean how many branches do you need per MSA at least in a blue sky scenario? And can you close more branches?

Yes. What I would say is that the branch -- how we leverage our branches is changing in the marketplace. It's moving from more of a transaction-oriented place to more of an advice-oriented place. So I think locations are important. Your question is really on the number of branches. When we looked and when we announced the deal, we said we have about 800 closed. And with that integration, we'll be at 800. As we look forward, obviously, there will be opportunities to close more branches based upon behaviors changing. But we're also, I think, have to add some branches in other locations. So net-net, probably over the next 3 to 5 years, we will still decline in branches overall, but we still need to also position ourselves to put branches in certain areas and growing in other places. So we'll have a plan and put that all together. Brant and his team have been working on that. And really, we just want to get through the integration, get what we have behind us and then move on to the next phase of that. But that's more of a '23 type thought there. But I hear your point, and I know that net-net, we're probably going to continue to come down. But we think we'll shrink some and add some as we move forward.

And so I don't let [ Dick ] down. On the cloud, there's a big -- yesterday, we were at a dinner, and one of my peers said, "You're really sophisticated if you keep everything on your private cloud, and you're really modern if you move it to the public cloud." That was Chris Kotowski, wherever you are, Chris. So where are you in that progression? Because some banks are like, "We don't want to be much in the public cloud." And others, including the guy from Numerated yesterday -- the founder from Numerated implied everyone is going to have to be 100% on the public cloud. Otherwise, you're going to be left behind. Where is Truist?

So we're in transition, to be honest with you, Mike. We were going to use public cloud, private cloud and still keep some of our crown jewels in our data center. So we're going to have a whole mixture of all that over time. The stuff that we put in the public cloud are more of the testing environment, the things that we can spin up environments really fast, have access to it and do a lot of testing up there. Private clouds are more for where we have more confidential information but still take advantage of scale and how that operates. And then there are some areas where we just want to keep control of some more private and more confidential information. So Scott and his team have a great plan. They're working on developing what our strategies are going to be. I have no doubt that we will leverage cloud to make sure it's actually safe and secure or get some efficiency and scale in it. But this is a journey. It's not a onetime thing as we move along, and he's doing a lot of other things in technology. We had a meeting yesterday of how we're trying to move to more of an automated, less manual, sensitive technology area, so we can basically leverage. And when you go automated, you actually get more looks, more reviews, so you have actually better risk and you do what you operate today. So we're moving forward. We have a plan for the next 2 to 3 years to really improve and move forward our whole technology area, which includes cloud.

I think John McDonald has the mic.

Daryl, the 9.75% CET1 target seems somewhat conservative. You have some peers targeting 8.5% to 9% given your performance in CCAR and the balance of your franchise. Any reason we shouldn't see that come down over time closer to where the peers are targeting?

As Bill said, we were very happy with our conversion of BB&T clients. So we thought we had less conversion risk. Obviously, the economy is doing well. We came out of positive stress test results. I think if you put those together and we have success again in the first quarter, a good economy and put it all together with another stress test, I think we have the ability to leverage the company more. We're working on that. We're talking to our Board potentially of where we have to take our CET1 ratio down. But the chart that I showed you how we look at it, it's not the nominal number that's as important as more of the coverage, how much capital do we have to what we really need to have and what is our erosion, right? And you want to make sure that we have ample coverage from that perspective, which gives you more flexibility to potentially lever the company. So more to come probably as we get into '22, but we'll have to play in and see how things develop. But we feel pretty good at how things are looking right now.

Great. And we've got another one from Ken.

Daryl, a follow-up to that as well. And when you think about leverage, the company, you guys have already done several deals on the fee side, even moving past the bank deal. So how do you think about that dynamic as well? And related to that, like especially on insurance where you've done most of the deals, like you're at 12%, and you've said you wanted to get back to kind of like where you were before. Is that what's most likely in terms of the non-deal side to use some of that capital?

Ken, what I would tell you is that as we get through integration -- so we've been able to do acquisitions in insurance because that really wasn't impacted by the integrations because they were kind of more by themselves from a systems perspective. The Service Finance businesses, like LightStream and Sheffield, it kind of operates itself and just plugs in. So buying and integrating Service Finance, we'll have it like 90% integrated by the end of the first quarter of next year. So we're good at that. I would expect from us, we look at a lot of potential acquisitions. And what I said earlier, we will build things out organically, we'll partner with people, and we're buying. So I would expect that we will look at potentially more bolt-on acquisitions and a lot of other businesses potentially that may actually augment both our fee revenues, market share and other businesses as well as technology in our businesses as we move forward to meet the needs of our clients.

I'm sure there are lots of good questions, but I'm looking at double 0s in terms of time here. So unfortunately, I think that's all we have for today. Thank you very much.

Thank you, [ Dick ].