Truist Financial Corporation (TFC) Earnings Call Transcript & Summary

Moving right along. Next up, very pleased to have Truist Financial from us, from the company, Bill Rogers, Chairman and CEO. Bill is going to start off with a few slides, and then we're going to open it up to Q&A. Bill?

Great. Thanks, Jason. Good morning, everybody. It's great to see everyone here in person. Before we get started, please take note of the forward-looking statements and non-GAAP information on Slides 2 and 3. Let's move on to our investment thesis on Slide 4. Our investment thesis outlines our company's opportunity set and what makes Truist a compelling investment and great place to work. First, we're a purpose-driven company that seeks to inspire and build better lives and communities. Our deep sense of purpose has propelled our rapid progress on ESG, which we embrace as an opportunity. Second, from that foundation, we've built an exceptional company with a comprehensive and diverse business mix. We have strong market shares in many of the most vibrant U.S. markets. We have distinct capabilities in insurance, investment banking and digital point-of-sale lending, and we're leveraging our extensive industry expertise to deliver value-added advice to our clients. Third, due to the merger vehicles, we're able to build a more modern best-of-both technology stack, allowing us to lean further into the future of banking. And fourth, combined with our conservative risk profile, our goal is to generate superior earnings growth and profitability with lower volatility than our peers over time. Our strategic shift from integration focus to an operating focus accelerates our ability to realize each element of our investment thesis, themes which I'll expand on throughout this presentation. Our purpose-driven culture is the foundation of our success as a company. It drives performance and defines how we do business every single day. Our purpose intentionally begins with the word Inspire. And to be inspirational, it's often necessary to be bold and to be first. Slide 7 highlights 2 recent examples of where we did just that. First, there was a historic launch of Truist One earlier this summer. This is our new differentiated flagship checking solution that reimagines everyday banking. Several features distinguish Truist One from the competition, including 0 overdraft fees, a simple $100 negative balance buffer and a planned deposit-based line of credit up to $750 for those that qualify. Truist One also features rewards that automatically grow with clients, making it the only checking account most clients will ever need. Branch checking production is up 14% year-over-year due to our execution of Truist One. Long term, Truist One should be a win for all of our stakeholders by improving client retention and acquisition and advancing financial inclusion across our communities. The other example I want to highlight is the significant investment we're making in our teammates by raising our minimum wage to $22 an hour effective in a couple of weeks. We believe it was important to be bold and fast with this decision, given our purpose, the challenging inflationary environment for our teammates and our desire to shift quickly from integration to executional excellence and growth. The increase will benefit approximately 14,000 teammates, about 80% of whom have client-facing roles in our retail and small business banking businesses, helping propel purposeful growth. While we've highlighted the gross financial costs of these purpose-driven investments on this slide, I fully expect positive returns from better client and talent acquisition and retention, combined with leading service that build over time. At Truist, we view ESG as an opportunity to put our purpose into action. We continue to make significant progress against our $60 billion community benefits plan, which is just the beginning, not the end. We also are committed to achieving net-zero greenhouse gas emissions by 2050 and are advising our clients how to transition to a lower carbon economy. All of this progress combined with significantly enhanced reporting and transparency has positively impacted our ESG scores. But what we're most proud of is the impact that we're having on our communities. We also believe ESG enhances shareholder value because of the positive impacts are supporting -- and supportive of long-term earnings stability, sustainability and as suggested by the positive relationship between ESG scores and forward multiples. And I'll now elaborate on the second element of our investment thesis, which why Truist is an exceptional company. One of the hardest decisions we made at the beginning of the merger was to change the name of the company, particularly given the incredible long legacy and brand strength of both heritage brands. The rationale was the new name would align our teammates faster around one culture, one purpose and our tremendous potential together. This decision, combined with our clearly articulated purpose, has led to strong cultural alignment and an explosion of purple across our footprint and in social media. Our teammates embrace and wear their purple Jerseys with great pride. And because of them, we now rank in the top half of our peer group for brand consideration, which is an incredible feat given the fact that new name was only introduced in 2019. If you'll indulge me, I'd like to share a short clip, I think it'll give you a sense of what our teammates and clients have been feeling over the last 6 months. [Presentation]

Continuing to Slide 11, which highlights the enviable market position of our core retail, commercial and wealth lines of businesses. Our markets continue to be projected to grow faster than our peers, a trend that was, I think, accelerated by the pandemic. We also have higher deposit market share in our markets than our peers have in theirs. The benefits we're seeing in the form of deposit betas and brand momentum I discussed previously. Given our market position, our broad set of capabilities and our ongoing investments, we believe Truist is well positioned to maximize this market advantage. One of the most compelling and underappreciated benefits of our merger is greater diversification. Due to a limited overlap between our heritage companies, the merger essentially cut in half the contribution from areas like investment banking, insurance and subprime auto, just to name a few. This has led to much lower PPNR volatility relative to our peers. As you can see from the chart on the right, it's also created opportunities for growth and risk reduction given our increased relevance and significantly more scale and capital to deploy on behalf of our clients. Our diverse business mix also creates significant opportunities for integrated relationship management or IRM. IRM is the idea that when we deliver the breadth of Truist's capabilities to our clients in a seamless and integrated manner that will achieve success and increased financial confidence. The good news is both heritage companies had a proven track record with IRM. Prior to the merger, SunTrust made significant progress in delivering capital markets capabilities to non-CIB clients, and BB&T successfully increased the insurance penetration of CIB clients. While IRM is still in the early innings at Truist, we've already completed the most challenging prerequisite establishing a strong and connected culture that operates as one team. We've also made large drives to cultivate strong behaviors, including simplifying partnerships and incentives, disciplined client planning and most importantly, harnessing the enterprise intellectual capital for the benefit of our clients. We expect the early promising results to build over time as positive outcomes reinforce the behaviors needed to create the flywheel that's necessary for sustainable IRM success. IRM is just one of the many examples of our post-integration momentum. Our progress is evident from the chart on the left, where various client-oriented performance metrics have rebounded nicely after the conversions. Equally important, our core organic revenue growth momentum has accelerated with loan and deposit growth, improving from the bottom quartile of our peer group in the first quarter to better than peer median in the second. We believe this momentum will continue to build as our teammates fully reallocate the millions of hours they spent on integration activities to meeting client needs and delivering on the promises of Truist. We highlight Truist Insurance Holdings on Slide 15, as it's a great example of how our businesses can perform when they're fully focused on delivering value-added device for clients. The business represents 13% of our revenue and it is an important source of diversification. We also like insurance for the same reasons insurance brokers trade at much higher multiples than banks. It grows consistently. It generates strong cash earnings, and it's a low-capital consumption business. Acquisitions are a key competency for our insurance business. We completed 11 of them since 2019, including BenefitMall, which provides Truist scaled entry into wholesale employee benefits, a strategic gap in our capability set. We've also recently announced the acquisition of BankDirect Capital Finance, which effectively doubles our premium finance business, broadens our capabilities to include life insurance and expands our West Coast presence. We've shared some high-level financial details of both transactions here and can provide additional detail in October. In the next few slides, we'll discuss the third element of our investment thesis, which is our progress leaning into the future of banking. One of the key drivers of the merger was increased need to invest in technology and in digital capabilities. With integration behind us, merger cost declining and cost savings largely realized, our technology and digital teams are poised to shift more of their time, energy and capital towards executing on our transformation and innovation agenda. The elimination of merger-related activities allowed us to double the total size of our technology investment pool, a component of our overall tech spend and also increase the portion of that pool that's dedicated to transformational initiatives from 30% to 45%. Our post-integration technology and digital strategy largely can be bucketed into 2 major areas: First, we took a major step forward in modernizing our tech foundation with the merger, and we have more to do in certain key areas. Second, we need to continue to deliver distinctive, secure and successful experiences for our clients and teammates, particularly as digital expectations continue to rise by the day. Each element of our strategy is intended to make every interaction with Truist as simple, secure, reliable and intelligent as possible. This slide provides a bird's eye view of our tech stack, which we believe is modern, modular and simple key strengths we can build upon in the future. The decisions we've made regarding our architecture have been made with a focus on the future. For example, our decision to build cloud-native solutions in Truist Digital has led the multichannel chatbot experience with Truist Assist. We'll also lead our upgraded client contact center technology stack, all built on top of AWS. The more modern tech stack has significantly improved our agility and responsiveness. So far this year, we've delivered 3x more production releases across business, retail and wealth than all of 2021. At the mid-tier layer, we recently acquired the Zaloni Arena platform to accelerate our data governance, metadata management, advanced analytics and artificial intelligence programs. The Arena platform will enhance our insight and decision-making and help us deliver more customized products and services to our clients. Further down the stack, we continue to increase our adoption of cloud-based technology, including piloting the new deposit product on a real-time next-gen cloud-based core. We believe these investments will continue to create a more flexible foundation and architecture and therefore, strengthen our ability to respond rapidly to changing client preferences. As you can see, we continue to make significant investments to deliver distinct, secure and successful experiences for our clients and teammates. I'd like to highlight a few examples that touch various aspects of the client experience. First and foremost, we're building a culture of innovation, where we embrace failing fast and learn fast. Our Innovation and Technology Center, our acquisition of long game, our Open Banking APIs are all designed to rapidly respond to changing and rising client experiences. Earlier this quarter, we began piloting our innovative password-less authentication process, which we believe will reduce fraud losses and enhance the overall client experience. We're also expanding LightStream, both by enhancing the sophistication of its underwriting models through artificial intelligence and by piloting a new savings product to broaden its capability set. Lastly, we're deploying a new modern insurance platform that integrates insurance offerings into our digital banking experiences for clients and teammates a powerful combination of what we call T3 and IRM between insurance and core banking. As many of you know, Truist Digital is our new digital experience that was built from the ground up prior to our core bank conversion. The new platform was built based on direct client feedback and was released in waves so we can learn from each release and drive towards continuous improvement. Like many fintechs, Truist Digital was born in the cloud, significantly accelerating our ability to add multiple features and capabilities into one singular digital experience, hence, the reference to a super app. However, we have more work to do as today, 60% of accounts that are currently open digitally end-to-end, and our goal is to make that 80%. Truist Digital is also a key component of our broader strategy to create more consistent end-to-end onboarding experience for clients and teammates across all products and channels. While both heritage companies brought many complementary capabilities to Truist, the heritage firm had a leading position in payments. And given our size, scale and client base, payments must be a priority for Truist. We've chosen 3 areas where we can win and be strategically relevant in digital payments, integrated wholesale payments and point-of-sale lending. In digital payments, we intend to invest in nearly 100 features and capabilities across all segments to drive engagement and improve our client retention. We've added overall talent and leadership in wholesale payments to take our capabilities to the next level, including building and creating integrated payment solutions for the future and providing distinctive and intuitive client experiences for our middle market and mid-corporate client base. Finally, we're investing in point-of-sale lending to facilitate convenient commerce for our merchant clients and enable consumer clients to achieve their goals with less friction and less cost. And now I'd like to move to the final element of our investment thesis, which is our leading financial performance. Truist has a strong retail and commercial-oriented deposit franchise with an enviable market share position. 42% of our deposits are under $250,000, which makes us a bit more granular than most of our peers due to strong retail orientation. In our markets, 5 large and liquid banks, including Truist, hold approximately 45% of the deposits. Our team's excellent execution against our thoughtful strategy to be attended to client needs and relationships while maximizing value outside of rate paid has resulted in very well-controlled deposit costs so far this cycle. Truist's long-term financial performance is fundamentally determined by our ability to manage risk and the foundation of our risk management program is our disciplined and thoughtful risk appetite framework, which measures on a granular basis and across all risk disciplines, our actual risk position relative to our moderate risk appetite. We also have a conservative credit culture that values diversification, prudent client selection, appropriate risk compensation and early problem asset resolution. The long-standing approach has led to Truist consistently having among the lowest loan loss rates in CCAR severely adverse scenarios. Our capital position is very strong, particularly when juxtaposed against our profitability and our risk profile. Truist performance in the most recent stress test reaffirms our leading risk-adjusted capital position as the ratio of our capital buffer distressed capital erosion was the third highest in our peer group. We believe this position will improve over time as merger costs are eliminated, and therefore, eventually fade from the Fed's PPNR modeling. Financially, Truist goal is to produce both strong growth and profitability with lower volatility. Thus far, we're making good progress against some of those goals. Truist generates strong returns in the first half of 2022 as our adjusted ROTCE, excluding reserve releases of 21.1% was the highest of our peer group. We're achieving our cost saves and kept expenses flat compared to peers, we're up 400 basis points per year over the last 2.5 years. And as I said earlier, the diversity of our business model is producing lower volatility. However, to generate sustainable shareholder value, we must complement our strong profitability with strong growth. Truist has lagged our peers in terms of growth due to the integration, but our strategic pivot from integration to executional excellence is taking hold. And we've built strong momentum in the second quarter, details which I shared during my closing remarks in the July earnings call. Over the long term, we've had the potential to generate much stronger organic growth given our markets, our differentiated business mix and our ability to capitalize on IRM and revenue synergies. Our organic growth will also be complemented by both targeted acquisitions and partnerships that strengthen our competitive advantages, add new capabilities for clients and position us for the future. In conclusion, Truist is on the right path, and I'm highly optimistic about our potential, which is clearly summarized in the investment thesis. We've reallocated the millions of hours of integration-related activity and improving our client experience through investments in digital and technology, simplification of our processes and operations, activating IRM and accelerating our purposeful growth. We're also well positioned across a broad range of economic outcomes given our advice-oriented model for clients, strong absolute and relative returns, end markets, conservative credit culture, diverse business mix, our strong capital position relative to our risk profile and most importantly, our power shift to executional excellence and growth. And finally, I'd like to thank each of you for your interest and support. And Jason, I'll come over and join you.

Awesome. As Bill takes the seat, why don't we take the first ARS question. Just click on the clickers in front of you. I guess, Bill, as the answer, you spent the past 3, 4 years planning, executing the merger of equals. Obviously, a lot of progress has been done as you just talked about. I guess what integration-related milestones are left? And then secondly, you talked about desire for stronger organic growth, what's the opportunities, areas of focus as you shift away from integration?

Sure. The good news is that the bulk of the integration work is behind us and was completed successfully. So both of those are critically important for Presence Day weekend. We have a major conversion and as I highlighted on that slide, turned everything to Purple branded one product, one set going forward. But the last remaining integration is the continuation of the deactivation of data centers. So we've got about 3 data centers that will deactivate there on great progress, great timelines, and then we'll reduce our total applications by about 30%. And so sort of every weekend, we're ramming through a couple more migrations of apps to our different data centers. And all that's progressing well. Sort of on the go-forward basis, it's really ability to operate off this of one platform, which is you can sort of feel the possible change in capability and agility of our teams to be able to do that. We're rolling out an enterprise teller platform that's consistent across all of our branches. So that's sort of continuing in this. And now again, we'll lay out over one platform. I mentioned in my comments, our client contact center, complete modernization of what we're doing there, built on cloud, built on an AWS platform. And then the work that we're doing and creating the capability in the platform and wholesale payments, digital payments. That's -- those are sort of the couple of areas that are more immediate.

Helpful. All right. So you gave a great presentation, but I noticed there was no third quarter or 2022 guidance or update. So while I have you with the mic, I guess, any update to the third quarter or 2022 guidance?

Yes. Maybe just updates on how we're doing. So in a couple of different categories. Loan growth, as I noted, continues to be productive, continues to be on a nice pace. Not at the same pace it was in the second quarter, but it's sort of not sustainable but continues to be strong in the areas that are important to us, like C&I, I think, continue to be, for us, representative of the power of Truist sort of ahead of HA data. The only 2 areas are student and our partnerships, which are down. Those were planned and part of migration of those businesses. Sort of on the core NIM side that continues to be productive, continues to improve. Our reported NIM probably more in line with what we talked about. So we've got some of that purchase accounting adjustments, some of the prepayments and things that go along with that. So I think sort of consistent with where we were. A little more volatility and market-based businesses like investment banking and mortgage. So even though we're a long way through the quarter, you still have a little bit of a quarter left, and there is some volatility in that. I think though positively, we indicated we'd have good PPNR growth. I think somewhere in the 6% to 8% would be a sort of a reasonable range, again, with some dependencies on the last several weeks on some of these market-dependent businesses. So positive. So feel good about where we are.

Yes. And that 6% to 8% is up sequentially 2Q to 3Q.

Yes.

Okay. And then maybe we could expand a bit more on loans. Loan growth in the industry has been strong. You talked about a bit slowing. Just maybe add to that, just kind of how would you characterize recent trends in client sentiment and what's driving this and kind of just your outlook for there?

Yes. It's been -- it's -- for us, it's a little bit challenging to look at sort of a macro environment of what's going on in the economy, what's client sentiment. And then we sort of start narrowing that down, micro to our markets. And our markets have continued to be really strong. I've had the luxury of being in a lot of our markets in the last several months and activity is really good, migration of those markets are really strong and we see the activity that's related to that. And then I take it down another micro notch is just our ability to perform at a higher level. So we sort of have our own market tailwind and our own operating tailwind of Truist, which probably clouds a little bit because I may have a little bit of a different optimism level in terms of what I see in daily performance. Our commercial clients are still active. They're still engaged. They're still building their businesses. They're still -- demand is still strong. They've got the same supply challenges, inflation challenges, labor challenges that continue, but demand continues to be strong, which is the important part. And we see that in revolver utilization and growth. On the consumer side -- and they're healthy. The credit criteria is really healthy. Those businesses are not as leveraged as they were before. They've got a lot of cash and they have a lot of capability. On the consumer side, a little bit of the same thing. Consumer enters into this being very liquid, spending is almost week-to-week in terms of volatility. And we just had -- we set an inflation print. So we'll sort of see where that factors in. But overall, the consumer continues to be pretty healthy, and we see that in our overall activity. And our branch production, I mentioned earlier, is up pretty significantly.

Got it. And obviously a lot of focus on deposits and funding given the backdrop of higher rates in QT. Maybe talk to what you're seeing in terms of deposit balances, mixes, betas, et cetera? And just how you think about funding the balance sheet if loan growth continues and outpace the deposit growth?

Yes. So the impact of QT on deposits, I think, is a murky area and there's so many different factors that are in play today that maybe weren't in play before. Not the least of which, I think consumers and businesses are going to be more liquid. I think they're going to keep higher balances overall. And I think we see that from the -- we saw that sort of M&A from the financial crisis. They were replenished during the pandemic, and my personal view is that they're going to stay higher than normal. Our deposit betas, as I mentioned in my comments, they benefit from our position in the market. I mean one of the driving focus on merging was to create more market prominence to create more capabilities for our clients other than rate paid. And we're seeing that. Our deposit betas today are somewhere in the 20s. That's much lower than where we thought they would be at this particular point in the cycle. So positive on that standpoint. And then on the funding side, your other question, we have about $3 billion a quarter that rolls off our securities portfolio, and we've got a couple of hundred million dollars worth of funding opportunities pick sort of -- picks up any category. So I like the question, and I like the challenge of funding loan growth, and I'm very confident in our ability to do that.

Got it. You touched on just the investment banking and kind of what you're seeing there in the market volatility. Maybe just to provide more context and then maybe more strategically, just what's your opportunity there?

Yes. Again, sort of a macro and micro forces. So the macro forces, some volatility in the business, no doubt about that, equity capital markets sort of in and out in any particular week where we are. M&A globally has been down, although you see some more activity with strategics and others starting to come back into that. And then overall, debt capital markets being a little bit stressed as deals sort of have to work themselves to the market. That's the macro. Again, back to that same -- my comments on the micro part of that, our business that's coming from our core commercial platform continues to really grow. It's probably now in this quarter could be 20% plus of our core our investment banking business. So our middle market, small middle market clients, M&A activity, we're just getting a larger share of that. So that's starting to show up in our numbers. And then just the relevance of Truist, our size, scale and scope and competitive capability. We're moving from the right side in deals to the left side of the deals. We're being asked and being given the opportunity to do larger deals due to our capability to bring more to those specific clients. So we've got a little bit of a micro tailwind just like that as well. And then as you know, we've seen in the past, our experience in the past is we've gained share when markets are tougher because we've got these core capabilities and core franchise to continue to be part of our business. So we've been proactive. I mean we've -- over the last year, we've hired a good number of people into our business with really good industry expertise. They're drawn to the model that we've created. They've got all these sources within our own franchise to help perpetuate grow our business. So we continue to be positive, and I'd say we have a little bit of a shoulder in versus out.

Got it. And on the July earnings call, Truist increased its expense guidance for the year from 1% to 2%, to 2% to 3%. As we start to think about -- and I think you had talked about operating losses, the minimum wage increase, other investments you've been making that you talked about. As we start to think about next year, though, a lot of moving pieces, the merger cost saves continuing, investments, inflation, operating losses, how would you -- how are you kind of approaching the 2023 budget process?

Yes. And to your point, there are a lot of offsets. So on the very positive side, we still have the merger integration opportunities that come from our business. And we talked about the big scale technology ones and branch consolidation and those type of things, but all the efficiencies that we continue to get from our business, whether it's continued real estate consolidation, whether it's automation, whether it's digitizing our businesses, whether it's improving processes, I just talked about contact center technology, digitization of our business and adoption from our clients. All those things continue to build over time. And for us, now they're a larger scale and have larger impacts. So that's the positive side on the expense front. On the countervailing side, we've made some conscious decisions. I mean, we made the decision to move to the head of the game on minimum wage. I think that's exactly the right decision. It will have a short-term impact, but the long-term impact in terms of reduced turnover and improved client experience and all those components, I'm just very, very confident in the decision that we've made there. And we're already anecdotally starting to see some of that. And then we talked about we're going to be opportunistic about investing. So we've invested in the investment banking side. We've invested in the insurance side. We've invested in the wealth side in terms of opportunities. So we're going to sort of not be completely constricted by an expense thing to not lose the opportunity to invest and gain share and you see those opportunities. So if you look at all that, you net it all up, put it in the big swirl, I think expenses as a raw number will be higher in 2023 than 2022, but we're committed to positive operating leverage and positive PPNR growth. And we'll use those as more of the guide than sort of that just raw expense number.

Got it. And then maybe just shift gears to regulatory backdrop. One of the things we've been reading about more is kind of the potential for kind of increased regulation, particularly the category 3 banks and the top of potentially having TLAC-type regulation. Just kind of any thoughts you could share on that?

Yes. I mean, as you know, we're not sort of in the center of that storm right now. So we've completed our merger and so we're not in the active dialogue on that. But I would say it's a general principle. I mean I think regulation should be tailored and follow the risk profiles of the institution. So we don't want to create an imbalance or encouraging banks to take more risk due to regulators. And we want to encourage banks like ours that have a diversified portfolio and a low-risk profile. So the decision for TLAC and single point of enter all that was a G-SIB decision. I mean that was due to the complexity and differentiation of those business models. So rather than getting to the specific things about specific banks and time lines, just overall, I mean, I think we're supportive of tailored regulation that aligns with the bank's risk profile. And our job is to run a really, really good bank consistent with our investment thesis of a risk profile that reflects and hopefully, a regulation that reflects that.

Got it. Maybe do the next ARS question. Where should Truist's CET1 target the current 9.75%, although they said they can operate below? I guess as the answer, Bill, in your prior answer, you talked about just tailored regulation and you kind of look at these big banks, and they are kind of tight on capital in -- kind of these nonbank financials are kind of tighter on funding and obviously, different interest rate credit profiles. But is there an opportunity for Truist to take share as a result? And how does things like AOCI and TCE factor into your thinking?

Yes. Maybe rather than sort of the competitive forces, it's our competitive capability is the real place where we take share. So the skills that we've added, the talent that we've added, the capabilities, the competencies, the training. So I think we're creating our own competitive advantage regardless of what's happening from the outside. And as I mentioned -- and we're seeing some of that. I mean we're seeing a place where we're becoming more relevant to our clients. That's resulting in an ability to be in and lead more deals than we've had in the past and be more relevant. So our competitive positions improved regardless of what's happening sort of on the outside from a competitive standpoint? And what was the second part of your question, Jason, was...

Just as AOCI...

Yes, sure. Sure. And that will be impacted more today as [indiscernible]. I would say AOCI, TCE are in our peripheral vision. So I mean it's not something that we don't know about and think about. But it's not a guiding post for us. It's not sort of a binary number where we need to be. I think the environment today and the reasons that you see TCE are down are fundamentally different from where it was more of a red alarm fire because today, it's going down in a portfolio that's 97% government guaranteed at a really solid cash flow, it's just been deferred. We did move 40% into a longer held position. So we have it in the peripheral vision, but it's not guiding our day-to-day decision-making or more importantly, limiting our ability to optimize our capital.

Got it. Maybe go to the next ARS question. Where should Truist focus its acquisition opportunities. And I guess, Bill, on one of the slides you had, it looks like the 2 of the pending deals that you had up there like 35 basis points of CET1. You've done obviously, small. You've been fairly acquisitive in kind of the nonbank arena. But kind of looking out just how you think about acquisitions, I would love to hear about banks, kind of nonbanks, ex insurance and insurance just given you've been pretty active there as well.

Yes. It really is. I mean you can see a lot of different opportunities there. But it really is focused on things that accrete to our overall investment thesis. So if it allows us to acquire more clients, if it allows us to acquire more clients in which we can execute more integrated relationship management and increase value over time because they were part of Truist rather than sort of stand-alone. Fundamentally, if it's in businesses where we're we have great discipline, great strategic planning, really good integration like insurance. So I mean it's a really good disciplined team. They know how to onboard. We've got a really great track record of improving organic growth and margin improvements in those businesses as we bring them on. And then in the -- we've seen things that we've done in technology and data management and innovation and creating an opportunity to be more purposeful in some of the things we do in savings the long game. So it's -- each business and function has a strategic objective that is predicated on organic and inorganic growth. And they're all focused on all of those things in terms of utilizing capital to the best of its capability. And then things are opportunistic on top of that. And we want to be conscious of that and have the requisite capital to make sure that we can continue to grow our businesses and be opportunistic when those things appear.

Got it. And then I guess maybe lastly, we've talked about Investment Banking, you talked a bit about insurance when the merger was announced, these were kind of 2 businesses highlighted given SunTrust was figuring as a banking BB&T and insurance. Just you didn't include it in the deal model, but there's obvious kind of revenue opportunities. Could you maybe just talk to in terms of how do we size that? Have you gotten any of that? And just where are we in that?

Yes. I mean clearly, we're starting to see the benefit. There are long sales cycles time lines. So insurance and investment banking both are in terms of creating capability and advice-oriented insurance comes up on regular cycles in terms of how you do those things. But as we highlighted in the slide, both companies had really good experience with that. So we're deploying all the skills and the things that we learned from both heritage companies and deploying them against the broader, bigger base. So I'm actually feeling really good about the momentum. We're building the pipelines. We're building, the training, the integration, the partnerships. As I mentioned in my comments, I mean, the most important part is the cultural foundation. I mean, it's easy to talk about things like integrated relationship management. But if you don't have a cultural paradigm that your teammates believe that this is how we deliver on purposeful growth. This is the manifestation of purpose for our clients is delivering the whole capabilities, understanding our client's needs, then it's just a tick and tie exercise. And for us, it's not that. We've established that core cultural foundation, which I think will be the long-term benefits of both these businesses.

Perfect. With that, please join me in thanking Bill for his time today.